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11. Contingency to Closing for Lease of Premises by Xxxxx.
Closing of this transaction is also specifically contingent, subject to and
conditioned upon Buyer and Seller agreeing on the terms and conditions of a
lease for Solo Serve Corporation, the Seller, to lease the Property from Buyer,
for an initial term of ten (10) years, with two (2) five (5) year renewal
options. The lease is to be an absolute triple-net lease for the Property.
Under the lease, Solo Serve Corporation shall be responsible for all expenses,
maintenance, taxes, assessments, insurance, structural repairs and
replacements, non-structural repairs and replacements, and in the lease, Solo
Serve Corporation will agree to promptly repair and remediate same (to include,
without limitation, settling of the foundation occurring in the front office
portion of the building); provided, however, this repair obligation is not
intended to apply to any casualty loss or condemnation loss to the extent any
proceeds received as a result of such loss are not delivered to Seller to
repair the Property. Additional terms of the lease, without limitation, shall
include the following:
11.1 Rent. Rent payments are to be payable monthly in
advance during the Primary Lease Term, based on a beginning annual base rental
for Years 1-5 of the Primary Lease Term of Nine Hundred Seventy-Five Thousand
and No/Hundredths Dollars ($975,000.00), One Million Seventy-Two Thousand Five
Hundred and No/Hundredths Dollars ($1,072,500.00) for Years 6-10 of the Primary
Lease Term, and the annual base rental for each renewal period, if executed,
shall be at market rates.
11.2 Assignment and Subletting. Tenant shall not be
entitled to assign or sublet all or any portion of the Premises.
11.3 Prepaid Rent. Upon execution of the lease, the Tenant
will be required to provide prepaid rent under the lease in the amount of Five
Hundred Thousand and No/Hundredths Dollars ($500,000.00) (the "Prepaid Rent").
Beginning with the Fourth Lease Year, as such term is defined in the lease, One
Hundred Thousand Dollars ($100,000.00) of the Prepaid Rent will be applied to
the Base Rent for the Fourth Lease Year, One Hundred Thousand Dollars
($100,000.00) to the Fifth Lease Year, and One Hundred Thousand Dollars
($100,000.00) to Rent for the Sixth Lease Year. Beginning with the Seventh
Lease Year, the Prepaid Rent shall thereafter remain at Two Hundred Thousand
Dollars ($200,000.00), and will be applied to Base Rent as set forth in the
Lease.
11.4 Other Terms. Such other reasonable terms as may be
negotiated and agreed upon between Xxxxx and Seller in good faith.
The terms set forth in this Section 11 are not intended to be a
definitive lease, and a lease shall not be deemed to exist between Buyer and
Seller, nor shall the condition set forth in this Section 11 be deemed
satisfied, until a definitive written lease agreement has been agreed upon by
both Xxxxx and Seller. During the Buyer's Examination Period, Seller and Xxxxx
agree to negotiate in good faith to agree upon a definitive lease agreement
incorporating the terms set forth above. In the event Buyer and Seller do not
agree on the terms of a definitive lease within the Buyer's Examination Period
(after good
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faith negotiations), this Contract shall terminate and neither party shall have
any further rights or obligations one unto the other hereunder, except for
Xxxxx's indemnity obligations under Section 7.3 hereof. In the event Buyer and
Seller do agree on a definitive lease agreement within said period of time, the
parties shall mutually acknowledge said agreement in a writing between the
parties, the agreed upon form of the lease shall be deemed to be a part of this
Contract, and Seller and Buyer shall each be obligated to each execute and
deliver a copy of said lease at the Closing.
12. Closing. The purchase and sale of the Property herein
described shall be closed in the offices of the Title Company on the first
business day following twenty (20) days after the Buyer's Examination Period.
Upon Closing, Seller shall deliver to Buyer:
12.1 Warranty Deed. A Special Warranty Deed conveying
good and indefeasible title in fee simple to the Land and Improvements, free
and clear of any and all liens, encumbrances, conditions, easements,
assessments, restrictions, and other conditions except for and subject to the
Permitted Exceptions.
12.2 Title Policy. An Owner's Title Policy of Insurance
issued in the face amount of the Purchase Price insuring good and indefeasible
title to the Property.
12.3 Bill of Sale and Assignment. A Special Warranty Bill
of Sale and Assignment in form reasonably acceptable to Buyer and Seller
conveying the Tangible Property and Intangible Property, subject to the
Permitted Exceptions. The form of this Agreement shall be agreed upon by Xxxxx
and Seller during the Buyer's Examination Period; provided, however, that Buyer
shall be obligated to assume therein all of Seller's obligations under all the
Guaranties, Warranties and Service Agreements constituting part of the
Intangible Property, but only to the extent same is delivered to Buyer as part
of the Inspection Items.
12.4 Non-Foreign Affidavit. An Affidavit of Seller
certifying that Seller is not a "foreign person" as defined in the Federal
Foreign Investment and Real Property Tax Act of 1980, and the 1984 Tax Reform
Act, as amended.
12.5 Warranties. To the extent same are assignable by
Xxxxxx, the originals of all warranties from third parties regarding the
Property in the possession of Seller.
12.6 Evidence of Authority. Copy of Seller's resolutions,
certified as true and complete as of the Closing date, authorizing Seller's
selling the Property pursuant to this Agreement, and evidencing the authority
of the person signing this Agreement and any documents to be executed by Seller
at Closing.
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12.7 Other Documents. Such other documents and
instruments as are reasonably required by the Title Company in connection with
the issuance of its title insurance policy to Buyer.
12.8 Assumption of Notes. Any and all documents and
instruments as are reasonably required by the Lender in connection with Xxxxx's
assumption of the Nationwide Note and the Wausau Note.
12.9 Lease. The lease executed by Xxxxxx, as Tenant, upon
the terms and provisions set forth in Section 11 above.
12.10 Estoppel Agreement. An estoppel agreement executed by
Seller and Nationwide, in connection with the Nationwide Note, and by Seller
and Employer's Life Insurance Company of Wausau, in connection with the Wausau
Note, evidencing that there are no defaults or events of default by Seller
under either the Nationwide Note or Wausau Note [It being understood that
Seller will make reasonable and good faith efforts to obtain the signature of
Nationwide (with respect to the Nationwide Note) and Employer's Life Insurance
Company of Wausau (with respect to the Wausau Note), but that Seller does not
covenant or warrant that it can obtain an estoppel agreement executed by
Nationwide or Employer's Life Insurance Company of Wausau; provided, however,
if, after exercising reasonable and good faith efforts, Seller fails to deliver
an estoppel agreement fully executed by Nationwide and/or an estoppel agreement
fully executed by Employer's Life Insurance Company of Wausau, as provided in
this Section 12.10, then Buyer, as its sole and exclusive remedy, shall have
the right to terminate the Contract and receive a full refund of the Xxxxxxx
Money (less $100.00 paid to Seller); and, upon such return of the Xxxxxxx
Money, both parties shall be relieved and released of and from any further
liability hereunder, except for Buyer's obligations under Section 7.3 hereof.]
13. Xxxxx's Obligations at Closing. At the Closing, Buyer shall
deliver to Seller the following:
13.1 Purchase Price. The Purchase Price, less the assumed
indebtedness with Nationwide Insurance and Employer's Life Insurance Company of
Wausau, by wire transfer of immediately available funds.
13.2 Lease. The Lease, executed by Xxxxx, as Landlord,
and Seller, as Tenant, upon the terms and provisions set forth in Section 11
above.
13.3 Evidence of Authority. Copy of Xxxxx's resolutions,
certified as true and complete as of the Closing date, authorizing Xxxxx's
acquisition of the Property pursuant to this Xxxxxxx Money Contract, and
evidencing the authority of the person signing this Agreement and any documents
to be executed by Xxxxx at Closing.
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13.4 Other Documents. Such other documents and
instruments as are reasonably required by the Title Company in connection with
the issuance of its title insurance policy to Buyer.
13.5 Assumption of Notes. Such documents and instruments
as are reasonably required by Xxxxxx in connection with the assumption by Buyer
of the Nationwide Note and the Wausau Note.
14. Proration. Rent shall be prorated for the month in which the
Closing occurs. As Seller will be responsible for all utility expenses and
other charges related to the Property pursuant to the terms of the lease, no
proration of these items will be made. Real estate taxes will be prorated as
of the date of Closing.
15. Default. In the event Buyer defaults in its obligations
hereunder, Seller may terminate this Contract and retain all Xxxxxxx Money, as
liquidated damages and this shall be Seller's sole remedy for the Buyer's
breach of this Agreement. Seller and Xxxxx agree that it is difficult to
determine, with any degree of certainty, the loss which Seller would incur in
the event of Buyer's failure to close the purchase of the Property, and the
parties have agreed the amount of the Xxxxxxx Money represents a reasonable
estimate of such loss and is intended as a liquidated damages provision. In
the event Seller defaults in its obligations hereunder, Buyer shall be
entitled, as its sole and exclusive remedy in such event, to either (i)
terminate this Agreement and receive a refund of the full amount of its Xxxxxxx
Money, or (ii) enforce specific performance of this Contract.
16. Future operations. From the date of this Agreement until the
Closing or earlier termination of this Agreement, Seller will:
(i) keep, operate, and maintain the Property in
accordance with past operating procedures, and
(ii) promptly advise Buyer of any litigation, arbitration
or administrative hearing concerning the Property arising or threatened to
which Xxxxxx receives notice or of any circumstances which Seller learns of
which would render any of Seller's representations set forth in Section 9
hereof false;
(iii) maintain (or cause the maintenance of) all liability
and property insurance currently in force with respect to the Property;
(iv) perform all of Seller's obligations under the loan
documents for the Nationwide Note and the Wausau Note;
(v) not transfer or encumber or cause any lien to be
placed against all or a portion of the Property; and
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(vi) not enter into or acquiesce in the filing of any
easement, license, plat (or re-plat) or zoning change affecting the Property.
17. Real Estate Commission. If, as and when this transaction
closes, Seller will at Closing pay a commission of four percent (4.0%) of the
Purchase Price, payable two percent (2.0%) to Xxxxx & Xxxxx, and two percent
(2.0%) to Ironwood Property Corporation (the "Brokers"). Seller hereby
indemnifies and holds Xxxxx harmless from any and all real estate commissions,
claims for such commissions or similar fees on this transaction arising in any
manner out of any commitment or promise or agreement made by Seller. Xxxxx
hereby indemnifies and holds Seller harmless from any and all real estate
commissions, claims for such commissions or similar fees on this transaction
arising in any manner out of any commitment or promise or agreement made by
Xxxxx, other than the commission provided herein. In accordance with the terms
of the Real Estate License Act of Texas, Buyer is hereby advised by Xxxxxx that
Buyer should have the abstract covering the Property examined by an attorney of
Buyer's selection, or be furnished with or obtain a policy of title insurance.
18. Broker/Principal Disclosure. Xxxx X. Xxxxxx, licensed real
estate broker, is a principal of Ironwood Property Corporation and is also a
principal of Xxxxxx/XxXxxxx, LLC, the Buyer herein.
19. Survival. All representations and warranties of Seller under
this Purchase Agreement shall survive the Closing and continue in full force
and effect for a period of two (2) years after the Closing.
20. Closing Costs. Notwithstanding anything to the contrary
contained herein, the Closing Costs shall be paid as follows:
By Seller:
(a) Preparation of a Special Warranty Deed;
(b) Title insurance examination and premium;
(c) The cost of the Survey;
(d) Brokerage fee as outlined in Section 17 herein;
(e) One-half of the escrow fee, if any; and
(f) One-half of the transfer and any other fees imposed
by Lender, up to a maximum total amount payable by Buyer and Seller of
Seventy-Five Thousand Dollars ($75,000.00).
By Buyer:
(a) Preparation of transfer documents relating to the
Nationwide Note;
(b) Recording fees;
(c) One-half of the escrow fee, if any;
(d) The survey deletion fee for Title Insurance purposes;
and
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(e) One-half of the transfer and any other fees imposed
by Xxxxxx, up to a maximum total amount payable by Buyer and Seller of
Seventy-Five Thousand Dollars ($75,000.00).
In the event that Lender requires a payment of more than $75,000.00 as
a condition of granting its approval of Buyer's assumption of the Notes,
neither party shall be obligated to pay any such additional amount, and in the
event Buyer and Seller cannot agree upon the payment thereof, either party may
terminate this Contract and the Xxxxxxx Money will be refunded to Buyer (less
$100.00), in which event neither party shall have any further obligation one
unto the other hereunder, except for Xxxxx's indemnity obligations under
Section 7.3 hereof.
21. Casualty. The risk of loss or damage to the Property by fire
or other casualty shall, until Closing, be borne by Seller. Seller shall
promptly give Buyer written notice of any material casualty and the extent
thereof, and for purposes of this Section 21, "material" shall be any casualty
resulting in damage to the Property of $25,000 or more. In the event of a
material casualty, either Buyer or Seller may, by written notice to the other
within twenty (20) days after receipt of notice of the occurrence, elect to
cancel this Agreement. In the event either party shall so elect, the Xxxxxxx
Money shall be returned to Buyer (less $100.00 paid to Seller) and, upon such
return of the Xxxxxxx Money, both parties shall be relieved and released of and
from any further liability hereunder, except for Buyer's obligations under
Section 7.3 hereof. In the event of a material casualty, if this Agreement is
not so cancelled by either Buyer or Seller, this Agreement shall not be
affected, but Seller shall assign to Buyer all of its right, title and interest
in any insurance proceeds and the Purchase Price shall be reduced by the amount
of any deductible. In the event of an immaterial casualty, this Contract shall
not be affected, and the parties shall proceed to Closing in accordance with
the terms hereof and Seller shall be obligated to repair such damage as soon as
reasonably practicable. In the event such damage cannot be repaired prior to
Closing, the Closing shall not be delayed, but the reasonable sum necessary (as
reasonably agreed to by and between Buyer and Seller prior to Closing) to
repair such immaterial casualty shall be credited to Buyer and against Seller
as a "Closing Adjustment" at the Closing; and, in the event of the satisfactory
repair of such damage by Seller pursuant to the lease or as otherwise agreed by
Seller and Buyer, then Xxxxx shall reimburse Seller for such sum credited to
Xxxxx at Closing..
22. Condemnation. If all or any portion of the Property is
condemned or taken by eminent domain by any authority (a "Condemnation"), this
Agreement may be terminated by either Buyer or Seller by giving written notice
to the other party prior to the Closing Date, in which event the Xxxxxxx Money
shall be returned to Buyer (less $100.00 paid to Seller) and, upon such return
of the Xxxxxxx Money, both parties shall be relieved and released of and from
any further liability hereunder, except for Buyer's obligations under Section
7.3 hereof.
23. Entire Agreement. This written agreement constitutes the
entire and complete agreement between the parties hereto. It is expressly
understood that there are
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no verbal understandings or agreements which may change the terms, covenants
and conditions herein set forth, and that no modification of this Agreement and
no waiver of any of the terms and conditions shall be effective unless made in
writing and duly executed by the parties hereto.
24. Binding Effect. All covenants, agreements, warranties and
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
25. Controlling Law. This Agreement has been made and entered
into under the laws of the State of Texas, and said laws shall control the
interpretation thereof.
26. Seller's Acceptance. In the event that Seller does not accept
Xxxxx's offer by executing a copy of this Agreement and delivering same to the
Title Company on or before 5:00 p.m., CDT, on January 14, 1998, then in that
event this offer shall be deemed to have been withdrawn, and this Xxxxxxx Money
Contract shall become null and void.
27. Confidentiality. Xxxxx agrees not to disclose any
confidential information (that is, any information not otherwise available to
the public) as may be disclosed by Seller to Buyer during the term of this
Agreement. Any and all reports, studies and other information delivered by
Seller to Buyer during the term of this Agreement shall be returned to Seller,
in the event this Agreement is terminated by either party prior to Closing.
The Brokers, by execution of this Xxxxxxx Money Contract, agree that they will
not, at any time prior to or after the Closing hereunder, without the prior
written consent of Xxxxx, disclose to any third party the terms and provisions
of this Contract, other than pursuant to proper court order.
28. Time. Time is of the essence in all matters pertaining to the
performance of this Agreement. However, if the final date of any period set
forth in this Agreement falls on a Saturday, Sunday, or legal holiday under the
laws of the United States or the State of Texas, then, in such event, the time
of such period shall be extended to the next day which is not a Saturday,
Sunday or legal holiday.
29. Assignment. Buyer shall not have the right to assign this
Contract, except to an Affiliated Entity. "Affiliated Entity," for purposes
hereof, is an entity owned fifty percent (50.0%) or more by Xxxx Xxxxxx and/or
X.X. "Red" XxXxxxx.
30. Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be sent by either
facsimile, deemed delivered when sent with confirmation of receipt, or mailed
by certified or registered mail, postage prepaid, or express mail, deemed
delivered when deposited in a U.S. mail depository, or by hand delivery,
addressed as follows:
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IF TO SELLER: Solo Serve Corporation
Attn: Xx. Xxxx Xxxxx
0000 Xxxxxxxxx Xxxx.
San Antonio, Texas 78219-2900
Telephone: (000) 000-0000, ext. 302
Telecopier: (000) 000-0000
WITH A COPY TO: Xxxxx X. Xxxxxxxxx
Xxx & Xxxxx, Inc.
000 X. Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
IF TO BUYER: Xxxxxx/XxXxxxx, LLC
Attn: Xxxx X. Xxxxxx, President
000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
WITH A COPY TO: Xxxxxxx X. Xxxxxxxxxxx
Xxxxx, Xxxxx & Xxxxxxx, Inc.
0000 Xxxxx Xxxxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
31. Counterparts. This Agreement may be executed in as many
counterparts as may be required and it shall be sufficient that the signature
of each party appear on one or more such counterparts. All counterparts shall
collectively constitute a single agreement.
32. Tax Abatement. Xxxxx agrees to cooperate with Seller, at no
expense to Xxxxx, to assist Xxxxxx in obtaining the consent of applicable
taxing authorities to the continuation of the current tax abatement agreement
in favor of the Seller in relation to the Property, notwithstanding the sale of
the Property to Buyer. Buyer's obligations under this Section 32 shall survive
Closing.
33. Exclusivity. During the term of this Agreement, Seller
covenants and agrees that Seller will not negotiate or enter into any
discussions with any other potential buyers for the purchase of the Property.
EXECUTED by Buyer this 14th day of January, 1998, in multiple
counterparts, each of which shall have the force and effect of an original.
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EXECUTED by Seller this 14th day of January, 1998, in multiple
counterparts, each of which shall have the force and effect of an original.
SIGNATURES ON FOLLOWING PAGE:
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SELLER:
SOLO SERVE CORPORATION,
a Delaware corporation,
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Name: Xxxx X. Xxxxx
---------------------------
Its: Executive Vice President
----------------------------
BUYER:
XXXXXX/XxXXXXX, LLC,
a Texas limited liability company,
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx, President
The Brokers do hereby agree to the confidentiality provisions of
Section 27, above.
XXXXX & XXXXX
By: /s/
--------------------------------------
Its: Senior Vice President
-----------------------------
IRONWOOD PROPERTY CORPORATION
By: /s/
--------------------------------------
Its: Vice President
-----------------------------
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Receipt of this Xxxxxxx Money Contract is acknowledged the 14th day
of January, 1998.
ALAMO TITLE COMPANY
By: /s/ XXXXX X. XXXXXXXXXX
--------------------------------------
Its: Vice President
-----------------------------
Receipt of Xxxxxxx Money in the amount of $50,000.00 is hereby
acknowledged this 14th day of January, 1998; and the Title Company does hereby
agree that if the Buyer terminates the Contract as provided in this Xxxxxxx
Money Contract, to promptly pay the Xxxxxxx Money as set forth herein without
the necessity of securing Seller's consent.
CHICAGO TITLE COMPANY
By: /s/ XXXXX X. XXXXXXXXXX
--------------------------------------
Its: Vice President
-----------------------------
NOTICE TO TITLE COMPANY. Upon receipt, please deliver a dated and
executed copy of this Xxxxxxx Money Contract to each of the following parties:
Xxxxxxx X. Xxxxxxxxxxx Xxxxx X. Xxxxxxxxx
Xxxxx, Xxxxx & Xxxxxxx, Inc. Xxx & Xxxxx, Inc.
0000 Xxxxx Xxxxxxxxxxx, Xxxxx 000 000 X. Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000 Xxx Xxxxxxx, Xxxxx 00000
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