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EXHIBIT 10.1
CONTRACT OF SALE
This Agreement is entered into by and between DAVID M. FENDER and JANE
M. FENDER (collectively "Seller"), and GEORGE R. BEDELL ("Purchaser").
W I T N E S S E T H :
FOR AND IN CONSIDERATION of the promises, undertakings, and mutual
covenants of the parties herein set forth, Seller hereby agrees to sell and
Purchaser hereby agrees to purchase and pay for all that certain property
hereinafter described in accordance with the following terms and conditions:
ARTICLE I
PROPERTY
The conveyance by Seller to Purchaser shall be of all the following
described real property, together with all right, title and interest of Seller
in and to any all strips or gores, roads, easements, streets, and ways bounding
said property, and all rights of ingress and egress thereto, and shall include
all improvements and fixtures located or to be located on said property with the
exception of the crystal chandelier in the formal dining room of the residence
and the stained glass mosaic built into the north wall of the "summer house"
located closest to the water frontage of Lake Palestine on said property:
Six (6) parcels of land, located in Smith County, Texas, and being
described in Exhibit "A" attached hereto and made a part hereof for
all purposes.
Hereafter the aforesaid real property is referred to collectively as the
"Subject Property."
ARTICLE II
PURCHASE PRICE
The purchase price to be paid by Purchaser to Seller for the Subject
Property shall be the sum of One Million Forty Thousand and No/100 Dollars
($1,040,000.00). The purchase price shall be paid all in cash at the closing.
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ARTICLE III
EARNEST MONEY
Within two (2) business days after final execution of this Contract by
all parties hereto, Purchaser shall deliver Purchaser's check in the amount of
Fifty Thousand and No/100 Dollars ($50,000.00) to Safeco Land Title of Dallas,
5220 Renaissance Tower, 1201 Elm Street, Dallas, Texas 75270, Attn: John Kerr
(the "Title Company"). The Title Company shall immediately cash the earnest
money check and deposit the proceeds thereof in an interest bearing account,
the earnings from which shall accrue to the benefit of Purchaser (hereinafter
the proceeds of the earnest money check shall be referred to as the "earnest
money").
In the event that this Contract is closed, then all earnest money shall
be applied in partial satisfaction of the purchase price. In the event that this
Contract is not closed, then the earnest money shall be disbursed in the manner
provided for elsewhere herein. Notwithstanding the foregoing or anything to the
contrary contained elsewhere in this Contract, it is understood and agreed that
Ten Thousand Dollars ($10,000.00) of the earnest money shall in all events be
delivered to Seller as valuable consideration for the Inspection Period
described in Article VI hereinbelow and the execution of this Contract by
Seller.
ARTICLE IV
PRE-CLOSING OBLIGATIONS
Within twenty (20) days from the date of execution of this Contract,
Seller shall furnish to Purchaser a survey of the Subject Property prepared in
1997 by John Cowan & Associates. If Purchaser desires additional survey work,
Purchaser must arrange for such work and pay all costs incurred in connection
therewith.
Within twenty (20) days from the date of execution of this Contract,
Purchaser shall obtain a current commitment (the "Title Commitment") for the
issuance of an owner's policy of title insurance to the Purchaser from the
Title Company, together with good and legible copies of all documents
constituting exceptions to Seller's title as reflected in the Title Commitment;
a copy of the Title Commitment shall be furnished to Seller.
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ARTICLE V
TITLE INSPECTION PERIOD
Purchaser shall have a period of sixty (60) days following the date on
which Purchaser receives the survey to be provided to Purchaser pursuant to
Article IV hereinabove in which to review and approve the survey and the Title
Commitment to be obtained by Purchaser (the "Title Review Period"). If the
information to be provided pursuant to Article IV reflects or discloses any
defect, exception or other matter affecting the Subject Property ("Title
Defects") that is unacceptable to Purchaser, then prior to the expiration of
the Title Review Period Purchaser shall provide Seller with written notice of
Purchaser's objections. Seller may, at its sole option, elect to cure or remove
the objections raised by Purchaser; provided, however, that Seller shall have
no obligation to do so. Should Seller elect to attempt to cure or remove the
objections, Seller shall have ten (10) days from the date of Purchaser's
written notice of objections (the "Cure Period") in which to accomplish the
cure. In the event Seller either elects not to cure or remove the objections or
is unable to accomplish the cure prior to the expiration of the Cure Period,
then Seller shall so notify Purchaser in writing specifying which objections
Seller does not intend to cure, and then Purchaser shall be entitled, as
Purchaser's sole and exclusive remedies, either to terminate this Agreement by
providing written notice of termination to Seller within ten (10) days from the
date on which Purchaser receives Seller's no-cure notice or waive the
objections and close this transaction as otherwise contemplated herein. If
Purchaser shall fail to notify Seller in writing of any objections to the state
of Seller's title to the Subject Property as shown by the Survey and Title
Commitment, then Purchaser shall be deemed to have no objections to the state
of Seller's title to the Subject Property as shown by the Survey and Title
Commitment, and any exceptions to Seller's title which have not been objected
to by Purchaser and which are shown on the Survey or described in the Title
Commitment shall be considered to be "Permitted Exceptions." It is further
understood and agreed that any Title Defects which have been objected to by
Purchaser and which are subsequently waived by Purchaser shall be Permitted
Exceptions. It is also understood and agreed that a two-thirds (2/3) interest
in the minerals in and under the Subject Property was reserved by the grantors
in a deed
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recorded in Volume 1328, Page 80 of the Deed Records of Smith County,
Texas. This mineral reservation and all easements to Texas Power & Light
Company across the Subject Property shall be Permitted Exceptions.
ARTICLE VI
INSPECTION PERIOD
Purchaser, at Purchaser's sole expense, shall have the right to
conduct a feasibility, environmental, engineering and physical study of the
Subject Property for a period of time commencing on the date of execution of
this Contract and expiring sixty (60) days from the date on which Purchaser
receives the last of the items to be provided to Purchaser pursuant to Article
IV hereinabove (the "Inspection Period"). Purchaser and Purchaser's duly
authorized agents or representatives shall be permitted to enter upon the
Subject Property at all reasonable times during the Inspection Period in order
to conduct engineering studies, soil tests and any other inspections and/or
tests that Purchaser may deem necessary or advisable; provided, however, that
no drilling or other ground penetrations or physical sampling in any building
shall be done without Seller's prior written consent, which consent shall not
be unreasonably withheld or delayed. Purchaser further agrees to indemnify and
hold Seller harmless from any claims or damages, including reasonable
attorneys' fees, resulting from Purchaser's inspection of the Subject Property.
In the event that the review and/or inspection conducted by this paragraph
shows any fact, matter or condition to exist with respect to the Subject
Property that is unacceptable to Purchaser, in Purchaser's sole discretion, or
if for any reason Purchaser determines that purchase of the Subject Property is
not feasible, then Purchaser shall be entitled, as Purchaser's sole remedy, to
cancel this Contract by providing written notice of cancellation to Seller
prior to the expiration of the Inspection Period. If Purchaser shall provide
written notice of cancellation prior to the expiration of the Inspection
Period, then this Contract shall be cancelled, all earnest money (less
$10,000.00) shall be immediately returned to Purchaser by the Title Company,
and thereafter neither Seller nor Purchaser shall have any continuing
obligations one unto the other.
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ARTICLE VII
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Seller represents and warrants to Purchaser that Seller will convey
the Subject Property to Purchaser at closing free and clear of all liens.
Seller further covenants and agrees with Purchaser that, from the date
hereof until the closing, Seller shall not sell, assign, or convey any right,
title, or interest whatsoever in or to the Subject Property, or create or
permit to exist any lien, security interest, easement, encumbrance, charge, or
condition affecting the Subject Property (other than the Permitted Exceptions)
without promptly discharging the same prior to closing.
Seller hereby further represents and warrants to Purchaser, to the
best of Seller's knowledge, as follows:
a. There are no actions, suits, or proceedings pending or, to
the best of Seller's knowledge, threatened against Seller or
otherwise affecting any portion of the Subject Property, at law or in
equity, or before or by any federal, state, municipal, or other
governmental court, department, commission, board, bureau, agency, or
instrumentality, domestic or foreign;
b. The execution by Seller of this Contract and the consummation
by Seller of the sale contemplated hereby have been duly authorized,
and do not, and, at the closing date, will not, result in a breach of
any of the terms or provisions of, or constitute a default under any
indenture, agreement, instrument, or obligation to which Seller is a
party or by which the Subject Property or any portion thereof is
bound, and do not, and at the closing date will not, constitute a
violation of any regulation affecting the Subject Property; and
c. Seller has not received any notice of any violation of any
ordinance, regulation, law, or statute of any governmental agency
pertaining to the Subject Property or any portion thereof.
All of the foregoing representations and warranties of Seller are made by Seller
both as of the date hereof and as of the date of the closing hereunder and shall
survive the closing hereunder. Notwithstanding the foregoing or anything to the
contrary contained herein, it is understood and agreed that the representations
and warranties set forth hereinabove shall survive the closing of this Contract
only for a period of two (2) years following the closing date, but not
thereafter, and Seller shall have no liability of any kind whatsoever for any
breach thereof except to the extent a claim is asserted against Seller within
such two (2) year period. If any representations and warranties set forth herein
are determined at any time on or before the date of closing to be untrue or
unfulfilled, then Purchaser, as Purchaser's sole and exclusive remedy, may
terminate
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this Contract by providing written notice of such termination to Seller, in
which event the earnest money (less $10,000.00) shall be returned to Purchaser
and thereafter neither Seller nor Purchaser shall have any further liabilities
or obligations one unto the other.
Notwithstanding the foregoing, or anything to the contrary contained
herein, it is understood and agreed that the improvements on the Subject
Property will be sold to Purchaser as is, with all faults, without any kind of
warranty as to the fitness of such improvements.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
The obligation of Purchaser to close this Contract shall, at the
option of Purchaser, be subject to the following conditions precedent:
a. All of the representations, warranties and agreements of
Seller set forth in this Contract shall be true and correct in all
material respects as of the date hereof and at closing, and Seller
shall not have on or prior to closing, failed to meet, comply with or
perform in any material respect any conditions or agreements on
Seller's part as required by the terms of this Contract;
b. There shall be no change in the matters reflected in the
Title Commitment, and there shall not exist any encumbrance or title
defect affecting the Subject Property not described in the Title
Commitment except for the Permitted Exceptions;
c. There shall be no changes in the matters reflected in the
Survey, and there shall not exist any easement, right-of-way,
encroachment, waterway, pond, flood plain, conflict or protrusion
with respect to the Subject Property not shown on the Survey; and
d. No material and substantial change shall have occurred with
respect to the Subject Property which would in any way affect the
findings made in the inspection of the Subject Property described in
Article VI hereinabove.
If any such condition is not fully satisfied by closing, Purchaser may
terminate this Contract by written notice to Seller whereupon this Contract
shall be cancelled, the earnest money deposit (less $10,000.00) shall be
returned to Purchaser by the Title Company and thereafter neither Seller nor
Purchaser shall have any continuing obligations one unto the other.
ARTICLE IX
CLOSING
The closing hereunder shall take place at the offices of the Title
Company. The closing shall occur on or before thirty (30) days from the date of
expiration of the Inspection Period.
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Purchaser shall notify Seller at least five (5) days in advance of the exact
time and date of closing. Seller and Purchaser hereby agree that Purchaser
shall have the right to obtain one (1) sixty (60) day extension of the deadline
for closing hereunder by delivering to Seller an additional Twenty-Five
Thousand Dollars ($25,000.00) in earnest money. If Purchaser exercises this
right, then the deadline for closing of this Contract shall be extended by
sixty (60) days; the additional $25,000.00 earnest money deposit that must be
made by Purchaser in order to extend the deadline for closing of this Contract
by sixty (60) days shall be non-refundable to Purchaser except in the event of
a default by Seller hereunder, but, if this Contract closes, shall be applied
in partial satisfaction of the purchase price payable hereunder.
ARTICLE X
SELLER'S OBLIGATIONS AT CLOSING
At the closing, Seller shall do the following:
a. Deliver to Purchaser a Special Warranty Deed covering the
Subject Property, duly signed and acknowledged by Seller, which deed
shall be in form reasonably acceptable to Purchaser for recording and
shall convey to Purchaser good and marketable title to the Subject
Property, free and clear of all liens, rights-of-way, easements, and
other matters affecting title to the Subject Property, except for the
Permitted Exceptions.
b. Deliver or cause to be delivered to Purchaser an Owner Policy
of Title Insurance (the "Title Policy") covering the Subject
Property, in the amount of the purchase price, in the form prescribed
by the Texas State Board of Insurance. Such Title Policy may contain
as exceptions only the Permitted Exceptions and the standard printed
exceptions except that: (i) the exception relating to restrictions
against the Subject Property shall be deleted, except for such
restrictions as may be included in the Permitted Exceptions; (ii) the
exception relating to discrepancies, conflicts, or shortages in area
or boundary lines, or any encroachment or overlapping of improvements
which a survey might show shall be deleted except for shortages in
area; and (iii) the exception relating to standby fees and ad valorem
taxes shall except only to taxes owing for the current year and
subsequent assessments for prior years due to change in land usage or
ownership. The additional premium charged by the Title Company for
modifying the survey exception shall be paid by Purchaser.
c. Deliver such evidence or other documents that may be
reasonably required by the Title Company evidencing the status and
capacity of Seller and the authority of the person or persons who are
executing the various documents on behalf of Seller in connection
with the sale of the Subject Property.
d. Deliver a non-withholding statement that will satisfy the
requirements of Section 1445 of the Internal Revenue Code so that
Purchaser is not required to withhold any portion of the purchase
price for payment to the Internal Revenue Service.
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e. Deliver to Purchaser any other documents or items necessary
or convenient in the reasonable judgment of Purchaser to carry out
the intent of the parties under this Contract.
ARTICLE XI
PURCHASER'S OBLIGATIONS AT CLOSING
At the closing, Purchaser shall deliver to Seller the purchase price
in cash.
ARTICLE XII
COSTS AND ADJUSTMENTS
At closing, the following items shall be adjusted or prorated between
Seller and Purchaser:
a. Ad valorem taxes for the Subject Property for the current calendar
year shall be prorated as of the date of closing, and Seller shall pay
to Purchaser in cash at closing Seller's prorata portion of such
taxes. Seller's prorata portion of such taxes shall be based upon
taxes actually assessed for the current calendar year.
b. All other closing costs, including but not limited to, recording
and escrow fees shall be divided equally between Seller and Purchaser;
provided, however, that Seller and Purchaser shall each be responsible
for the fees and expenses of their respective attorneys.
Seller agrees to indemnify and hold Purchaser harmless of and from any
and all liabilities, claims, demands, suits, and judgments, of any kind or
nature (except those items which under the terms of this Contract specifically
become the obligation of Purchaser), brought by third parties and based on
events occurring on or before the date of closing and which are in any way
related to the ownership, maintenance, or operation of the Subject Property,
and all expenses related thereto, including, but not limited to, court costs
and attorneys' fees.
Purchaser agrees to indemnify and hold Seller harmless of and from any
and all liabilities, claims, demands, suits, and judgments, of any kind or
nature, brought by third parties and based on events occurring subsequent to
the date of closing and which are in any way related to the ownership,
maintenance or operation of the Subject Property, and all expenses related
thereto, including, but not limited to, court costs and attorneys' fees.
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ARTICLE XIII
ENTRY ON PROPERTY
Purchaser, Purchaser's agents, employees, servants, or nominees, are
hereby granted the right to enter upon the Subject Property at any time prior
to closing for the purpose of inspecting the Subject Property and conducting
such engineering and mechanical tests as Purchaser may deem necessary or
advisable, any such inspections and tests to be made at Purchaser's sole
expense. Purchaser agrees to indemnify and hold Seller harmless from and
against any and all losses, damages, costs, or expenses incurred by Seller as a
result of any inspections or tests made by Purchaser.
ARTICLE XIV
POSSESSION OF PROPERTY
Possession of the Property free and clear of all uses and
encroachments, except the Permitted Exceptions, shall be delivered to Purchaser
at closing.
ARTICLE XV
NOTICES
All notices, demands, or other communications of any type given by the
Seller to the Purchaser, or by the Purchaser to the Seller, whether required by
this Contract or in any way related to the transaction contracted for herein,
shall be void and of no effect unless given in accordance with the provisions
of this paragraph. All notices shall be in writing and delivered to the person
to whom the notice is directed, either in person, by facsimile transmission, or
by United States Mail, as a registered or certified item, return receipt
requested. Notices delivered by mail shall be deemed given when deposited in a
post office or other depository under the care or custody of the United States
Postal Service, enclosed in a wrapper with proper postage affixed, addressed as
follows:
Seller: David M. Fender
116 E. Front Street
Tyler, Texas 71710
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Purchaser: George R. Bedell, Esq.
901 Main Street, Suite 3700
Dallas, Texas 75202
Telephone No.: (214) 744-3700
Facsimile No.: (214) 747-3732
ARTICLE XVI
REMEDIES
In the event that Seller fails to timely comply with all conditions,
covenants and obligations of Seller hereunder, it shall be an event of default
and Purchaser shall have the option (i) to terminate this Contract by providing
written notice thereof to Seller, in which event the earnest money (less
$10,000.00) shall be returned immediately to Purchaser by the Title Company and
the parties hereto shall have no further liabilities or obligations one unto
the other; (ii) to waive any defect or requirement and close this Contract; or
(iii) sue Seller for specific performance or for actual damages; provided,
however, that, in the event that Seller violates its obligations pursuant to
this Contract and the closing does not occur as a result thereof, Purchaser's
right to obtain any damages hereunder shall be limited to the recovery of
Purchaser's out-of-pocket expenses, and in no event shall Purchaser have the
right to sue for any other damages, including consequential damages, lost
profits or punitive damages. In the event that Purchaser fails to timely comply
with all conditions, covenants, and obligations Purchaser has hereunder, such
failure shall be an event of default, and Seller's sole remedy shall be to
receive the earnest money. The earnest money is agreed upon by and between the
Seller and Purchaser as liquidated damages due to the difficulty and
inconvenience of ascertaining and measuring actual damages, and the uncertainty
thereof, and no other damages, rights, or remedies shall in any case be
collectible, enforceable, or available to the Seller other than in this
paragraph defined, and Seller shall accept the earnest money as Seller's total
damages and relief.
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ARTICLE XVII
ASSIGNMENT
This Contract may be assigned by the Purchaser to any person, firm,
corporation or other entity which the Purchaser may, at its sole discretion,
chose, but only on condition that any such assignee must assume and agree to
perform all of Purchaser's obligations hereunder. Purchaser shall promptly
provide Seller with written notice of any assignment made pursuant to this
paragraph.
XVIII
INTERPRETATION AND APPLICABLE LAW
This Agreement shall be construed and interpreted in accordance with
the laws of the State of Texas. Where required for proper interpretation, words
in the singular shall include the plural; the masculine gender shall include
the neuter and the feminine, and vice versa. The terms "successors and assigns"
shall include the heirs, administrators, executors, successors, and assigns, as
applicable, of any party hereto.
XIX
AMENDMENT
This Contract may not be modified or amended, except by an agreement
in writing signed by the Seller and the Purchaser. The parties may waive any of
the conditions contained herein or any of the obligations of the other party
hereunder, but any such waiver shall be effective only if in writing and signed
by the party waiving such conditions and obligations.
ARTICLE XX
AUTHORITY
Each person executing this Contract warrants and represents that he is
fully authorized to do so.
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ARTICLE XXI
ATTORNEYS' FEES
In the event it becomes necessary for either party to file a suit to
enforce this Contract or any provisions contained herein, the prevailing party
shall be entitled to recover, in addition to all other remedies or damages,
reasonable attorneys' fees and costs of court incurred in such suit.
ARTICLE XXII
DESCRIPTIVE HEADINGS
The descriptive headings of the several paragraphs contained in this
Contract are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
ARTICLE XXIII
ENTIRE AGREEMENT
This Contract (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings of the parties in connection therewith. No representation,
warranty, covenant, agreement, or condition not expressed in this Contract
shall be binding upon the parties hereto or shall affect or be effective to
interpret, change, or restrict the provisions of this Contract.
ARTICLE XXIV
MULTIPLE ORIGINALS ONLY
Numerous copies of this Contract may be executed by the parties
hereto. Each such executed copy shall have the full force and effect of an
original executed instrument.
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ARTICLE XXV
ACCEPTANCE
Seller shall have until 5:00 o'clock p.m., August 6, 1998, to execute
and return a fully executed original of this Contract to Purchaser, otherwise
this Contract shall become null and void. Time is of the essence of this
Contract. The date of execution of this Contract by Seller shall be the date of
execution of this Contract. If the final date of any period falls upon a
Saturday, Sunday, or legal holiday under the laws of the State of Texas, then
in such event the expiration date of such period shall be extended to the next
day which is not a Saturday, Sunday, or legal holiday under the laws of the
State of Texas.
ARTICLE XXVI
REAL ESTATE COMMISSION
In the event that this Contract closes, but not otherwise, Seller
agrees to pay at closing a real estate commission in the amount of three
percent (3%) of the purchase price, such commission to be paid to Pirtle Real
Estate Services. Seller represents and warrants to Purchaser that Seller has
not contacted or entered into any agreement with any other real estate broker,
agent, finder, or any other party in connection with this transaction, and that
Seller has not taken any action which would result in any other real estate
broker's, finder's, or other fees or commissions being due and payable to any
other party with respect to the transaction contemplated hereby. Purchaser
hereby represents and warrants to Seller that Purchaser has not contracted or
entered into any agreement with any other real estate broker, agent, finder, or
any other party in connection with this transaction, and that Purchaser has not
taken any action which would result in any other real estate broker's,
finder's, or other fees or commissions being due or payable to any other party
with respect to the transaction contemplated hereby. Each party hereby
indemnifies and agrees to hold the other party harmless from any loss,
liability, damage, cost, or expense (including reasonable attorneys' fees)
resulting to the other party by reason of a breach of the representation and
warranty made by such party herein. Notwithstanding
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anything to the contrary contained herein, the indemnities set forth in this
Article XXVI shall survive the closing.
EXECUTED on this the 5th day of August, 1998.
SELLER:
/s/ DAVID M. FENDER
-----------------------------------------
David M. Fender
/s/ JANE M. FENDER
-----------------------------------------
Jane M. Fender
EXECUTED on this the 1st day of August, 1998.
PURCHASER:
/s/ GEORGE R. BEDELL, ESQ.
-----------------------------------------
George R. Bedell, Esq.
RECEIPT OF EARNEST MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS CONTRACT IS
HEREBY ACKNOWLEDGED:
TITLE COMPANY:
SAFECO LAND TITLE OF DALLAS
By: /s/ J. G. KERR
--------------------------
Name: J. G. Kerr
------------------------
Its: Vice President
-------------------------
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