Exhibit 10.13
EARNEST MONEY CONTRACT
(1111 GILLINGHAM LANE, SUGAR LAND, TEXAS)
THIS EARNEST MONEY CONTRACT ("CONTRACT") is entered into by and between SUNTRON
GCO, LP, a Texas limited partnership ("SELLER"), and GSL INDUSTRIAL PARTNERS,
L.P., a Texas limited partnership, and/or its assigns ("BUYER"), on the terms
set forth below.
1. PURCHASE AND SALE. For the Sales Price as defined below and subject to the
terms and conditions of this Contract, Seller agrees to sell and convey to
Buyer, and Buyer agrees to buy from Seller, the "Property," as hereinafter
described.
2. PROPERTY. The "PROPERTY" consists of approximately 36 acres of real
property located in Sugar Land, Fort Bend County, Texas, including thereon
an industrial building (with office space) of approximately 487,550 square
feet in size, plus an additional approximately 7.5 acres of undeveloped
real property, all located at 1111 Gillingham Lane, Sugar Land, Texas
77478, and as such real property is more particularly described on EXHIBIT
"A" attached hereto and made a part hereof for all purposes, together with
the other property and rights described on ADDENDUM I attached hereto. The
metes and bounds description determined by the survey of the Property under
Section 7 hereof will replace EXHIBIT "A" describing the perimeter
boundaries of the Property if the survey differs from EXHIBIT "A".
3. LEASE. The closing of the sale and purchase hereunder (the "CLOSING") shall
be conditioned upon the execution by Seller, as the "Tenant," and Buyer, as
the "Landlord," of the Industrial Triple Net Lease attached hereto as
EXHIBIT "C" (collectively, the "LEASE"), the term of which Lease shall
commence on the date of Closing, and (ii) an "EXISTING MORTGAGEE SNDA
AGREEMENT" (herein so called) in favor of Buyer's lender which complies
with the requirements of Paragraph 20 of the Lease for any SNDA Agreement
as described therein (which Existing Mortgagee SNDA Agreement will be
attached to the Lease as the Exhibit "F" called for therein).
4. SALES PRICE. The Buyer will pay the Seller the amount of NINETEEN MILLION
THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($19,300,000) ("SALES PRICE") in
cash at Closing, subject to adjustment as may be set forth herein.
5. EARNEST MONEY AND INDEPENDENT CONSIDERATION. Within three (3) business days
after the full execution of this Contract by both Seller and Buyer, Buyer
shall deposit FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000) as
"EARNEST MONEY" with the "Title Company," as hereinafter defined ("ESCROW
AGENT"). The Earnest Money will be deposited in a federally insured, market
rate, interest-bearing account chosen by Escrow Agent. At Closing, the
Earnest Money and any interest earned thereon will be applied to the Sales
Price. Notwithstanding any provision of this Contract to the contrary, a
portion of the Earnest Money in the amount of ONE HUNDRED AND NO/100
DOLLARS ($100.00) shall be non-refundable and shall be distributed to
Seller at the Closing or other termination of this Contract (other than a
termination resulting from Seller's breach of
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this Contract), as full payment and independent contract consideration for
Seller's performance under this Contract.
6. TITLE POLICY. Seller will furnish to Buyer, at Seller's expense, an Owner
Policy of Title Insurance (the "TITLE POLICY") issued by Chicago Title
Insurance Company, 5858 Westheimer, Suite 301, Houston, Texas 77057 (the
"TITLE COMPANY"), in the amount of the Sales Price, dated at or after
Closing, insuring Buyer against loss under the provisions of the Title
Policy, subject only to those title exceptions permitted by this Contract,
or as may be approved by Buyer in writing, and the standard printed
exceptions contained in the promulgated form of the Title Policy; provided
however that: (a) the exception as to area and boundaries will be deleted
except for any shortages in the area at the expense of Buyer; (b) the
exception as to restrictive covenants will be endorsed "None of Record"
except to the extent that any restrictive covenants are permitted by this
Contract or may be approved by Buyer in writing; and (c) Buyer, and not
Seller, shall be responsible for the costs of any other endorsements to the
Title Policy required by Buyer or any third-party lender of Buyer. Within
ten (10) days after the Effective Date, Seller will furnish Buyer a
commitment for Title Insurance (the "COMMITMENT"), including legible (or
best available) copies of all recorded documents evidencing title
exceptions. Seller authorizes the Title Company to deliver the Commitment
and related documents to Buyer at Buyer's address. Buyer will have the
rights in connection with the review of the Commitment as described on
ADDENDUM II attached hereto.
7. SURVEY. Within twenty (20) days following the Effective Date, Seller shall,
at Seller's cost, have prepared by a Texas registered land surveyor, and
deliver to Buyer, three (3) originals of a current ALTA, Category 1A,
Condition II, as-built survey of the Property ("SURVEY") and metes and
bounds field note description thereof, properly certified to Seller, Buyer,
the Title Company and Buyer's lender, if any, and in form sufficient to
permit deletion of the "survey exception" from the Title Policy and as
further described on ADDENDUM II hereof. Buyer will have the rights in
connection with the review of the Survey as described on ADDENDUM II
attached hereto.
8. INSPECTIONS, FEASIBILITY STUDIES AND FINANCING. Buyer shall have a period
from the Effective Date until the later to occur of (a) sixty (60) days
following the Effective Date, or (b) twenty (20) business days following
Seller's receipt of written notice from Seller certifying that Seller has
obtained the consent to sell the Property from Seller's Lender (as such
term is hereinafter defined), in which to conduct Buyer's review of the
Property (such period being hereinafter referred to as the "INSPECTION
PERIOD"). Buyer may complete or cause to be completed inspections,
investigations and testing of the Property (including all improvements and
fixtures) (hereinafter referred to collectively as the "INSPECTIONS") by
representatives of Buyer's choice. Inspections may include, but are not
limited to, those items described in paragraph 1 of ADDENDUM III attached
hereto. Seller will permit Buyer and Buyer's representatives' access to the
Property during normal business hours or such other times as Seller may
approve for the purpose of conducting Inspections. Seller shall have the
right and opportunity to have a representative present during all Buyer
Inspections. Such Inspections shall be timed and conducted so as to
minimize any impact on Seller's operations at the Property. Buyer may (but
shall not be obligated to) terminate this Contract by written notice
thereof (the "INSPECTION NOTICE")
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to Seller at any time on or before the expiration of the Inspection Period,
if, in Buyer's sole and absolute discretion, Buyer decides not to
consummate the purchase of the Property contemplated hereby. In such event,
then this Contract will be deemed to have terminated as of the date of such
notice. If, in Buyer's sole and absolute discretion, Buyer determines that
Buyer desires to consummate the purchase of the Property contemplated
hereby, then Buyer will give written notice thereof (the "CLOSING NOTICE"),
to Seller on or before the expiration of the Inspection Period. In the
event that Buyer timely gives Seller the Closing Notice, Buyer will be
deemed to have waived any objection with respect to the inspections,
studies and assessments under this Section 8, and this Contract will
proceed to Closing, subject to all other terms of this Contract. If Buyer
does not give Seller the Closing Notice on or before the expiration of the
Inspection Period and has not previously terminated this Contract by
written notice to Seller, then this Contract will be deemed to have
terminated as of the expiration of the Inspection Period. In either of such
events terminating the Contract, within three (3) business days following
written request from Buyer to the Escrow Agent without joinder by Seller,
the Escrow Agent shall return the Earnest Money and all interest earned
thereon to Buyer, less the $100 independent contract consideration
described in Section 5 to be delivered to Seller. Buyer's right to
undertake the Inspections shall be subject to the following terms and
conditions:
(a) The Inspections shall be conducted by Buyer and Buyer's
representatives at Buyer's sole cost and expense.
(b) Buyer shall promptly repair any damage to the Property resulting from
the actions of Buyer or Buyer's representatives in connection with the
Inspections.
(c) Buyer and Buyer's representatives shall (1) comply with all laws
applicable to the Inspections and all other activities undertaken by
Buyer and Buyer's representatives in connection therewith; and (2)
take all actions and implement all protections reasonably necessary to
ensure that all actions taken by Buyer or Buyer's representatives in
connection with the Inspections, and the equipment, materials and
substances generated, used or brought onto the Property pose no threat
to the safety or health of persons or the environment, and cause no
damage to the Property.
(d) Buyer shall keep the Property free of any lien or encumbrance arising
as a result of the actions of Buyer or Buyer's representatives in
connection with the Inspections, including, without limitation, liens
for services, labor or materials furnished in connection with the
Inspection, and to cause any such liens or encumbrances to be
immediately removed of record.
(e) Buyer shall indemnify Seller and hold Seller harmless from and against
any and all claims, demands, causes of action, losses, damages,
liabilities, costs and expenses (including, without limitation,
reasonable and actual attorneys' fees and disbursements), suffered or
incurred by Seller and caused by or resulting in any manner from (1)
Buyer's and/or Buyer's representatives' entry upon the Property, (2)
the Inspections or other due diligence activities conducted with
respect to the
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Property by Buyer or Buyer's representatives, (3) any liens or
encumbrances filed or recorded against the Property as a consequence
of the Inspection or any and all other activities undertaken by Buyer
or Buyer's representatives, and/or (4) any and all other activities
undertaken by Buyer or Buyer's representatives with respect to the
Property.
(f) Buyer acknowledges that all Inspections are subject to the
confidentiality requirements of Section 24 of this Contract, and Buyer
shall so notify all consultants providing Inspection services to
Buyer.
The provisions of this Section shall survive the Closing or the earlier
termination of this Contract.
9. COMMISSION. If, as and when the Closing occurs, Seller shall pay a real
estate commission to Staubach Company ("SELLER'S BROKER"), pursuant to a
separate agreement between Seller and Seller's Broker. If, as and when the
Closing occurs, Seller shall pay a real estate commission equal to 1.5% of
the Sales Price to River Oaks Financial Group, Inc. ("BUYER'S BROKER").
Seller hereby agrees to defend, indemnify, and hold harmless Buyer, and
Buyer hereby agrees to defend, indemnify and hold harmless Seller, from and
against any claim by any other third parties for brokerage, commission,
finder's, intermediary's or other fees relative to this Contract or the
sale of the Property, and any court costs, attorney's fees or other costs
or expenses arising therefrom, and alleged to be due by authorization of
the indemnifying party, except that Buyer does not indemnify Seller from
claims by Seller's Broker and Seller does not indemnify Buyer from claims
by Buyer's Broker in excess of the amount of the commission to be paid by
Seller to Buyer's Broker in accordance with the provisions of this Section
9. The obligations of the parties under this Section shall survive the
Closing or the earlier termination of this Contract.
10. CLOSING.
(a) The Closing will be on or before the later to occur of (i) the date
that is ten (10) days following the expiration of the Inspection
Period, or (ii) within seven (7) days after objections to title or
survey have been cured as provided in ADDENDUM II attached hereto (the
"CLOSING DATE"). If the Closing fails to occur by the Closing Date, as
extended pursuant to the terms of this Contract, as a result of a
default by either party, the non-defaulting party will be entitled to
exercise the remedies contained in Section 15. Seller must convey
title to the Property to Buyer at Closing:
(1) With no liens, assessments, or Uniform Commercial Code or other
security interests against the Property which will not be
satisfied out of the Sales Price; and
(2) With no persons in possession of any part of the Property as
lessees, tenants at sufferance, or trespassers, except Seller as
the "Tenant" under the Lease.
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(b) At Closing, Seller and Buyer will each furnish, at their own expense,
the items described on ADDENDUM IV attached hereto.
(c) Buyer acknowledges that Seller's obligation to convey the Property to
Buyer is expressly conditioned on Seller's obtaining the consent to
such sale from the lender currently holding a deed of trust lien on
the Property (the "SELLER'S LENDER"). Seller agrees to use good faith
efforts to obtain the consent of the Seller's Lender no later than
February 15, 2006 (the "CONSENT DATE"). If Seller is not able to
obtain the consent of the Seller's Lender on or prior to the Consent
Date, Buyer may grant Seller additional time in which to obtain such
consent or Buyer may terminate this Contract and receive the return of
the Earnest Money. Buyer agrees that so long as Seller uses good faith
efforts to obtain the consent of the Seller's Lender, Seller shall not
be in default under this Contract if Seller is unable to obtain such
consent on or prior to the Consent Date.
If Seller is unable to obtain such consent on or prior to the Consent
Date (or such later date as may be approved by Buyer in writing), then
(i) either party shall have the right at any time thereafter to
terminate this Contract by giving written notice of intent to
terminate to the other party and the Title Company (an "INTENT TO
TERMINATE"), and (ii) Seller shall be obligated to reimburse Buyer for
Buyer's out-of-pocket third party expenses (including, without
limitation, attorneys' fees and finance commitment fees) incurred by
Buyer in connection with the proposed acquisition of the Property
(collectively, the "BUYER REIMBURSABLE EXPENSES"). To secure Seller's
performance of its obligation to reimburse Buyer for the Buyer
Reimbursable Expenses, Seller shall, within three (3) business days
after the Effective Date of this Contract, deposit with the Title
Company the sum of $250,000 (the "SELLER REIMBURSEMENT DEPOSIT"), to
be held and disbursed by the Title Company in accordance with the
provisions of this paragraph. If, on or prior to the Consent Date,
Seller delivers evidence of the consent of Seller's Lender in
accordance with the immediately preceding paragraph, then the Title
Company shall, promptly after delivery of such evidence, release all
of the Seller Reimbursement Deposit to Seller, free and clear of all
rights and claims of Buyer with respect thereto.
Upon either party's receipt of an Intent to Terminate, the Earnest
Money shall be promptly refunded to Buyer, free and clear of all
rights and claims of Seller with respect thereto. Further, within two
(2) business after either party's receipt of an Intent to Terminate,
Buyer shall provide Seller with a schedule of Buyer Reimbursable
Expenses, indicating those expenses that have already been paid and
those expenses incurred but remaining to be paid, together with
invoices evidencing such expenses. Seller shall have a period of three
(3) business days after receipt of Buyer's schedule of Buyer
Reimbursable Expenses in which to review and approved such expenses,
which approval shall not be unreasonably withheld. Upon approval of
the Buyer Reimbursable Expenses, the Title Company shall be authorized
(i) to reimburse Buyer in an amount equal to the Buyer Reimbursable
Expenses already paid by Buyer, and (ii) to pay directly to the
applicable third party the Buyer Reimbursable Expenses incurred but
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remaining to be paid. Upon payment in full of the Buyer Reimbursable
Expenses, the balance of the Seller Reimbursement Deposit shall be
refunded to Seller, free and clear of all rights and claims of Seller
with respect thereto, this Contract shall terminate and neither Buyer
nor Seller shall have any further rights or obligations hereunder
(except for matters expressly stated in this Contract to survive
termination); provided, however, that Seller agrees that, for a period
of twelve (12) months after the effective date of any termination of
this Contract pursuant to the provisions of this Section 10(c), Seller
shall, prior to entering into any contract, agreement or other
arrangement to sell, transfer or convey all or any portion of the
Property to any other person or entity, offer to sell the Property to
Buyer on the same terms and conditions as set forth in this Contract,
and Buyer shall have a period of ten (10) days after receipt of such
offer in which to accept such offer by giving written notice of
acceptance to the Seller. If Buyer accepts the offer to purchase the
Property in accordance with the terms of the immediately preceding
sentence, then, at the Closing of the sale of the Property by Seller
to Buyer, Buyer shall reimburse Seller in an amount equal to all Buyer
Reimbursable Expenses paid out of the Seller Reimbursement Deposit.
11. POSSESSION. At Closing, Seller will deliver possession of the Property to
Buyer, subject to Seller's rights as "Tenant" under the Lease, in its
present or required repair condition, ordinary wear and tear excepted. Any
possession by Buyer prior to Closing or Seller after Closing that is not
authorized by the Lease or another separate written lease agreement will
establish a landlord-tenant at sufferance relationship between the parties.
12. CLOSING AND SALES EXPENSES. Closing and sales expenses are to be paid in
cash at or prior to Closing:
(a) Seller's Expenses: Releases of existing liens, including prepayment
penalties and recording fees; release of Seller's loan liability; tax
statements or certificates; attorney fees and other expenses related
to any roll-back tax assessed against the Property solely as a result
of the conveyance of the Property by Seller to Buyer; preparation of
deed, bill of sale, and assignment of leases; one-half (1/2) of escrow
fee; Seller's attorney's fees; other expenses stipulated to be paid by
Seller under other provisions of this Contract, and all other expenses
that it incurs in connection with performing its obligations under
this Contract that are not provided to be paid by Buyer under
paragraph (b), below.
(b) Buyer's Expenses: All loan fees or expenses (e.g., fees for
application, origination, discount, appraisal, assumption, recording,
tax service, mortgagee title policies, credit reports, document
preparation and the like); fees for copies and delivery of title
commitment and related documents; required premiums for flood and
hazard insurance; interest on all periodic installment payment notes
from date of disbursements to one payment period prior to dates of
first monthly payments; one-half (1/2) of escrow fee; costs of any
Inspections; and Buyer's attorney's fees, other expenses stipulated to
be paid by Buyer under other provisions of this Contract, and all
other expenses that it incurs in connection with
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performing its obligations under this Contract that are not provided
to be paid by Seller under paragraph (a), above.
13. PRORATIONS. The following will be prorated at Closing through the Closing
Date: (i) current taxes on the Property, (ii) any rents relating to the
Property, and (iii) utility bills and charges for water, telephone,
electricity, gas and similar charges relating to the Property along with
any other expenses attributable to the Property. If the amount of the ad
valorem taxes for the year in which the sale is closed is not available on
the Closing Date, proration of taxes will be made on the basis of taxes
assessed in the previous year, with a subsequent cash adjustment of such
proration to be made between Seller and Buyer, if necessary, when actual
tax figures are available. If the Property is part of a larger tract of
land for ad valorem tax purposes, then the proration shall be made based
upon the per square foot assessment (calculated separately for each of the
land and the improvements) of the larger tract of which the Property is a
part. If Buyer is assuming payment of or taking subject to any existing
loan on the Property, all reserve deposits for the payment of taxes,
insurance premiums, and other charges, will be transferred to Buyer by
Seller and Buyer will pay to Seller the amount of such reserved deposits at
Closing.
14. CASUALTY LOSS AND CONDEMNATION.
(a) If, prior to Closing, more than 25% of the floor area of the building
located on the Property is destroyed or damaged, or more than 10% of the
land area of the Property (such percentages being referred to hereinafter
as a "material part") becomes subject to condemnation or eminent domain
proceedings, then Seller shall promptly notify Buyer thereof (a "SELLER'S
NOTICE"). If, within five business days after Buyer's receipt of a Seller's
Notice, Seller receives written notice from Buyer of Buyer's termination of
this Contract, then Buyer shall be deemed to have terminated this Contract.
If, within five business days after Seller's delivery of a Seller's Notice,
Seller does not receive written notice from Buyer of Buyer's termination of
this Contract, Buyer shall have waived its right to terminate this Contract
under this Section 14, and the parties shall proceed to Closing, in which
event Buyer shall be entitled to all insurance proceeds or condemnation
awards payable as a result of such damage or taking and, to the extent the
same may be necessary or appropriate, Seller shall assign to Buyer at
Closing Seller's rights to such proceeds or awards and at Closing Buyer
shall receive a credit for the amount of any deductible payable under any
applicable insurance policy.
(b) If, before Closing, less than a material part of the Property is
destroyed or damaged, or becomes subject to condemnation or eminent domain
proceedings, then Seller shall notify Buyer thereof, Buyer shall have no
right to terminate this Contract, and the parties shall proceed with the
Closing, but Buyer shall be entitled to all insurance proceeds or
condemnation awards payable as a result of such damage or taking and, to
the extent the same may be necessary or appropriate, Seller shall assign to
Buyer at Closing Seller's rights to such proceeds or awards and at Closing
Buyer shall receive a credit for the amount of any deductible payable under
any applicable insurance policy.
15. DEFAULT. If Buyer fails to comply with this Contract and such failure shall
not be cured within five (5) business days following written notice thereof
from Seller to Buyer, Buyer
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will be in default and, in such event, Seller as its SOLE and EXCLUSIVE
remedy (whether at law or equity) may terminate this Contract and Escrow
Agent shall immediately pay to Seller the Earnest Money and any interest
earned thereon as liquidated damages, thereby releasing the parties from
any further obligations under this Contract except those which by their
terms survive the Closing or the prior termination of this Contract, it
being agreed that the actual damages suffered by Seller shall be extremely
difficult or impossible to ascertain and that after negotiation, the
parties have agreed that, considering all the circumstances existing on the
date of this Contract, the amount of the Earnest Money is a reasonable
estimate of the damages that Seller would receive in the event of Buyer's
default hereunder. If Seller is unable without fault to make any
non-casualty repairs agreed to be made by Seller hereunder or deliver the
Commitment within the time allowed, Buyer as its SOLE and EXCLUSIVE remedy
(whether at law or equity) may either (a) terminate this Contract and
receive the Earnest Money and any interest earned thereon, thereby
releasing the parties from any further obligations under this Contract
except those which by their terms survive the Closing or the prior
termination of this Contract, or (b) extend the time for performance by
Seller up to fifteen (15) days and the Closing Date will be extended as
necessary. If Seller fails to comply with this Contract for any other
reason and such failure shall not be cured within five (5) business days
following written notice thereof from Buyer to Seller, or if Seller has
breached any representation or warranty in this Contract, Seller will be in
default and, in such event, Buyer as its SOLE and EXCLUSIVE remedy (whether
at law or equity) may either (i) terminate this Contract and receive the
Earnest Money and any interest earned thereon, thereby releasing the
parties from any further obligations under this Contract except those which
by their terms survive the Closing or the prior termination of this
Contract, (ii) enforce specific performance of the terms and conditions of
this Contract, or (iii) if the default by Seller is a breach of a warranty
or representation hereunder, seek any and all other relief as may be
provided by law and/or in equity; provided, however, Buyer acknowledges and
agrees that Seller's liability under this subsection (iv) for a breach of
representation or warranty regarding the physical condition of the Property
(as set forth in items 2 (a) 1, 3, 4, 5 & 6 of Addendum V) shall be limited
to a maximum of $500,000, in total, for all such claims. Seller and Buyer
each hereby waives any and all rights, in equity or at law, other than
those enumerated above, which it may otherwise have against the other in
connection with any default hereunder. This provision of this Section shall
survive the Closing or any earlier termination of this Contract, subject,
however, to the limitations set forth in Section 8 of Addendum V hereto.
16. ATTORNEYS' FEES. If Buyer or Seller is a prevailing party in any legal
proceeding brought under or with relation to this Contract or this
transaction, such party will be entitled to recover from the non-prevailing
parties all costs of such proceedings and reasonable attorneys' fees. The
provisions of this Section will survive Closing.
17. WARRANTIES, REPRESENTATIONS, COVENANTS AND CONDITIONS. Seller and Buyer
agree to the warranties, representations, covenants and conditions as set
forth on ADDENDUM V attached hereto.
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18. NOTICES. All notices will be in writing and effective when hand-delivered,
mailed by certified mail return receipt requested, or sent by facsimile
transmission to:
If to Buyer:
GSL Industrial Partners, L.P.
5858 Westheimer, Suite 800
Houston, Texas 77057
Attn: Welcome W. Wilson, Sr.
Telephone: (713) 788-0303
Telecopy: (713) 952-7733
If to Seller:
Suntron GCO, LP
2401 West Grandview Road
Phoenix, AZ 85023
Attn: Hargopal (Paul) Singh
President and CEO
T: 602.282.5066
F: 602.282.5600
Email: paul.singh@suntroncorp.com
And to:
Suntron GCO, LP
1111 Gillingham Lane
Sugar Land, TX 77478
Attn.: Alan Mills
Telephone: (832) 754-3200
Facsimile: 281-243-5509
Email: Alan.Mills@suntroncorp.com
With a copy to:
Boyar & Miller, P.C.
4265 San Felipe, Suite 1200
Houston, Texas 77027
Attn: Timothy J. Heinrich, Esq.
Telephone: (713) 850-7766
Telecopy: (713) 552-1758
With a copy to:
Greenberg Traurig, LLP
13155 Noel Road
Dallas, TX 75240
Attn: Pamela Stein, Esq.
Telephone: 972-419-1307
Facsimile: 972-628-4612
E-mail: steinp@gtlaw.com
19. AGREEMENT OF THE PARTIES.
(a) This Contract will be binding on the parties, their heirs, executors,
representatives, successors and assigns.
(b) This Contract will be construed under and in accordance with laws of
the State of Texas.
(c) This Contract contains the entire agreement of the parties and cannot
be changed except by written agreement.
(d) If this Contract is executed in a number of identical counterparts,
each counterpart is deemed an original and all counterparts will,
collectively, constitute one agreement.
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(e) So long as the proposed assignee has a net worth at least equal to
that of Buyer, Buyer may assign this Contract (i) to any Affiliate of
Buyer without the prior consent of Seller and (ii) to any other person
or entity only upon Seller's written approval, not to be unreasonably
withheld. As used in this Contract, the term "Affiliate" shall mean
any person or entity controlled by, controlling or under common
control with Buyer. If Buyer assigns this Contract, Buyer will be
relieved of any future liability under this Contract only if the
assignee complies with the requirements of this paragraph 19 (e) and
assumes in writing all obligations and liability of Buyer under this
Contract, and any other assignment shall be void and of no effect. In
addition, Buyer may assign this Contract to an Affiliate having a net
worth less than that of Buyer so long as Buyer remains fully liable
until Closing for performance of all obligations of Buyer under this
Contract should such assignee be unable to perform any of such
obligations before Closing.
(f) Attachments that are part of this Contract are EXHIBIT "A", EXHIBIT
"B", EXHIBIT "C", EXHIBIT "D", EXHIBIT "E", EXHIBIT "F", ADDENDUM I,
ADDENDUM A-1, ADDENDUM II, ADDENDUM III, ADDENDUM IV, ADDENDUM V and
ADDENDUM VI.
20. TIME. Time is of the essence in this Contract. Strict compliance with the
times for performance stated in this Contract is required. Notwithstanding
the foregoing, if the date for performance of any obligation or the giving
of any notice falls on a Saturday, Sunday or legal holiday, then the
performance of such obligations or the giving of such notice on the next
following day that is not a Saturday, Sunday or legal holiday shall be
deemed timely performance or timely giving of such notice. For purposes
hereof, "legal holiday" means any holiday on which banks or post offices
are generally closed for business in the county where the Property is
located or the county where the notice address for either party is located.
21. CONSTRUCTION. This Contract (including attachments thereto) is a negotiated
agreement and any documents delivered pursuant hereto will be construed
without regard to the identity of the persons who drafted the various
provisions thereof. Every provision of this Contract and such other
documents shall be construed as though all parties participated equally in
the drafting thereof. Any legal rule of construction that a document is to
be construed against the drafting party shall not be applicable and is
expressly waived.
22. USE OF FACSIMILE MACHINE. For the purpose of negotiating and finalizing
this Contract, any signed document transmitted by fax machine shall be
treated in every respect as an original document. The signature of any
party on such document transmitted by fax machine shall be considered for
these purposes to be an original signature.
23. EFFECTIVE DATE. The "EFFECTIVE DATE" of this Contract for the purpose of
performance of all obligations shall be the date this fully-executed
Contract is receipted for by the Escrow Agent.
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24. CONFIDENTIALITY. Except as hereinafter permitted, Seller and Buyer each
expressly acknowledge and agree that prior to Closing, the transactions
contemplated by this Contract and the terms, conditions, and negotiations
concerning the same will be held in the strictest confidence by each of
them and will not be disclosed by either of them except to their respective
legal counsel, accountants, consultants, officers, partners, directors,
shareholders, brokers, lenders and consultants, and except and only to the
extent that such disclosure may be necessary for their respective
performances hereunder. Except as expressly provided in this Contract,
Buyer further acknowledges and agrees that, unless and until the Closing
occurs, all information obtained by Buyer in connection with the Property
will not be disclosed by Buyer to any third persons without the prior
written consent of Seller. Nothing contained in this Section will preclude
or limit either party to this Contract from issuing a press release or
making other disclosures with respect to any information otherwise deemed
confidential under this Section (a) in response to lawful process or
subpoena or other valid or enforceable order of a court of competent
jurisdiction, (b) required by law or (c) required by rule or regulation of
the Securities and Exchange Commission or the New York Stock Exchange,
including without limitation in any filings required by any governmental
authorities. In determining whether a disclosure contemplated in the
preceding sentence is required by law or by rule or regulation of the
Securities and Exchange Commission or the New York Stock Exchange, the
disclosing party is entitled to rely upon the written advice of counsel.
The obligations of Buyer and Seller under this Section shall survive any
termination of this Contract.
25. CERTAIN REQUIRED NOTICES.
(a) Notice Regarding Possible Liability For Additional Taxes. If for the
current ad valorem tax year the taxable value of the Property is
determined by a special appraisal method that allows for appraisal of
the Property at less than its market value, Buyer may not be allowed
to qualify the Property for that special appraisal in a subsequent
year and the Property may then be appraised at its full market value.
In addition, the transfer of the Property or a subsequent change in
the use of the Property may result in the imposition of an additional
tax plus interest as a penalty for the transfer or the change in use
of the Property. The taxable value of the Property and the applicable
method of appraisal for the current tax year is public information and
may be obtained from the tax appraisal district established for the
county in which the Property is located. If Seller has claimed the
benefit of laws permitting a special use valuation for the purpose of
ad valorem taxes on the Property and if, after the Closing, Buyer
changes the use of the Property from its present use and such change
results in the assessment of additional taxes, then those additional
taxes will be Buyer's obligation, notwithstanding that some or all of
those additional taxes may relate back to the period prior to Closing.
Buyer acknowledges that the Property has been subject to a ten year
tax abatement and that such abatement expires in 2005.
(b) Notice Regarding Possible Annexation. If any portion of the Property
is located outside the limits of a municipality, the Property may now
or later be included in the extraterritorial jurisdiction of a
municipality and may now or later be subject
11
to annexation by the municipality. Each municipality maintains a map
that depicts its boundaries and extraterritorial jurisdiction. To
determine if any portion of the Property is located within a
municipality's extraterritorial jurisdiction or is likely to be
located within a municipality's extraterritorial jurisdiction, Buyer
is advised to contact all municipalities located in the general
proximity of the Property for further information.
(c) Notice Regarding Underground Storage Tank. The underground storage
tank(s), if any, which are located on the Property are presumed to be
regulated by the Texas Commission on Environmental Quality and may be
subject to certain registration and construction notification
requirements found in 30 Texas Administrative Code, Chapter 334.
(d) Texas Open Beaches Act Notice. The Property or a portion thereof is
located in a county that borders the Gulf of Mexico. If the Property
is in close proximity to beach fronting the Gulf of Mexico, Buyer is
hereby advised that the public has acquired a right of use or easement
to or over the area of any public beach by prescription, dedication,
or presumption, or has retained a right by virtue of continuous right
in the public since time immemorial, as recognized in law and custom.
The extreme seaward boundary of natural vegetation that spreads
continuously inland customarily marks the landward boundary of the
public easement. If there is no clearly marked natural vegetation
line, the landward boundary of the easement is as provided by Sections
61.016 and 61.017, Natural Resources Code.
Texas law prohibits any obstruction, barrier, restraint or
interference with the use of the public easement, including the
placement of structures seaward of the landward boundary of the
easement. STRUCTURES ERECTED SEAWARD OF THE VEGETATION LINE (OR OTHER
APPLICABLE EASEMENT BOUNDARY) OR THAT BECOME SEAWARD OF THE VEGETATION
LINE AS A RESULT OF NATURAL PROCESSES ARE SUBJECT TO A LAWSUIT BY THE
STATE OF TEXAS TO REMOVE THE STRUCTURES.
Buyer is hereby notified that Buyer should seek the advice of an
attorney or other qualified person before executing this Contract or
instrument of conveyance as to the relevance of these statutes and
facts to the value of the Property Buyer is hereby contracting to
purchase.
(e) Texas Real Estate License Act Notice. The Texas Real Estate License
Act requires written notice to Buyer that it should have an attorney
examine an abstract of title to a Texas Property or obtain a title
insurance policy. Notice to that effect is, therefore, hereby given to
Buyer.
(f) NOTICE REGARDING "ROLLBACK" TAXES. IF FOR THE CURRENT AD VALOREM TAX
YEAR THE TAXABLE VALUE OF THE VACANT LAND THAT IS THE SUBJECT OF THIS
CONTRACT IS DETERMINED BY A SPECIAL APPRAISAL METHOD THAT ALLOWS FOR
APPRAISAL OF THE
12
LAND AT LESS THAN ITS MARKET VALUE, THE PERSON TO WHOM THE LAND IS
TRANSFERRED MAY NOT BE ALLOWED TO QUALIFY THE LAND FOR THAT SPECIAL
APPRAISAL IN A SUBSEQUENT TAX YEAR AND THE LAND MAY THEN BE APPRAISED
AT ITS FULL MARKET VALUE. IN ADDITION, THE TRANSFER OF THE LAND OR A
SUBSEQUENT CHANGE IN THE USE OF THE LAND MAY RESULT IN THE IMPOSITION
OF AN ADDITIONAL TAX PLUS INTEREST AS A PENALTY FOR THE TRANSFER OR
THE CHANGE IN THE USE OF THE LAND. THE TAXABLE VALUE OF THE LAND AND
THE APPLICABLE METHOD OF APPRAISAL FOR THE CURRENT TAX YEAR IS PUBLIC
INFORMATION AND MAY BE OBTAINED FROM THE TAX APPRAISAL DISTRICT
ESTABLISHED FOR THE COUNTY IN WHICH THE LAND IS LOCATED.
(g) Municipal Utility District ("MUD") Notice. The Property is situated in
utility or other statutorily created district providing water, sewer,
drainage or flood control facilities and services. The Texas Water
Code requires Seller to deliver and Buyer to sign and acknowledge, at
the closing, the statutory notice in substantially the form attached
hereto as ADDENDUM VI relating to the tax rate, bonded indebtedness or
standby fee of the district prior to the final execution of this
Contract. Such notice shall be recorded in the real property (deed)
records of the county in which the Property is located.
Buyer hereby acknowledges receipt of the foregoing notice at or before
execution of this Contract.
26. REPURCHASE OPTION. Upon Closing, Buyer shall grant Seller the right and
option (the "REPURCHASE OPTION"), to purchase that certain portion of the
Property as depicted on EXHIBIT "E" attached hereto, of real property on
the north side of the Property fronting Gillingham (the "OPTION PROPERTY"),
for the lump sum of $100. In order to effectively exercise its Repurchase
Option, Seller must, on or before the date that is nine (9) months after
the Closing Date, (a) have, at Seller's sole cost and expense, take such
action as may be required to plat the Option Property in accordance with
all applicable legal requirements and in a manner reasonably acceptable to
Buyer, and (b) have delivered to Buyer written notice of the exercise of
the Repurchase Option (the "OPTION EXERCISE NOTICE"). Buyer agrees that
Seller may commence such platting process prior to the Closing Date so long
as Seller obtains Buyer's written consent with respect to all materials
that are submitted to any to any municipal official or board for approval.
The legal description of the Option Property set forth on the plat shall be
deemed to replace the description of the Option Property as depicted on
Exhibit E. The Closing of the Repurchase Option shall occur on the date
that is thirty (30) days after the date of Buyer's receipt of the Option
Exercise Notice. At the closing of the Repurchase Option, Buyer will pay
the purchase price for the Option Property in full in cash and Buyer shall
convey the Option Property to Seller free and clear of any liens, claims
and encumbrances other than those existing as of the Closing Date and those
set forth on the plat of the Option Property. Seller shall pay all costs
related to the closing of the Repurchase Option.
27. RIGHT OF FIRST OPPORTUNITY.
(a) In the event Seller does not consummate the currently pending sale of
that certain approximately 14.85 acre tract located adjacent to the
Property and being more particularly
13
described on EXHIBIT "F" attached hereto tract (the "ROFO PROPERTY"), but
Seller thereafter desires to market the ROFO Property, Seller shall give
Buyer the first right and option to purchase the ROFO Property. Seller
shall initiate such option by delivering to Buyer a written summary of the
price and other material terms and conditions on which the Seller intends
to market the ROFO Property (the "ROFO NOTICE").
(b) Buyer shall have the right to purchase the ROFO Property upon the terms
set forth in the ROFO Notice. Buyer may exercise its right to acquire the
ROFO Property by delivering written notice (an "ACCEPTANCE NOTICE") to
Seller within fifteen (15) days after Buyer's receipt of the ROFO Notice
(the "ACCEPTANCE DEADLINE"). If Seller receives an Acceptance Notice prior
to the Acceptance Deadline, the closing of the sale of the ROFO Property
from Seller to Buyer shall occur within forty-five (45) days after Seller's
receipt of such Acceptance Notice.
(c) If Seller fails to receive an Acceptance Notice prior to the Acceptance
Deadline, then the Seller may proceed to market and convey the ROFO
Property to any third party in substantial accordance with the terms
described in the ROFO Notice. If Seller is unable to sell the ROFO Property
to a third party on substantially the terms described in the ROFO Notice,
and Seller remarkets the ROFO Property but decreases the purchase price by
15% or more, then the ROFO Property shall automatically again become
subject to Buyer's right of first opportunity as described above.
28. DTPA WAIVER. BUYER HEREBY WAIVES ANY RIGHTS THAT IT MAY HAVE UNDER THE
TEXAS DECEPTIVE TRADE PRACTICES AND CONSUMER PROTECTION ACT (SECTION 17.41
ET SEQ. OF THE TEXAS BUSINESS AND COMMERCE CODE), A LAW THAT GIVES
CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. BUYER WARRANTS AND REPRESENTS TO
SELLER THAT BUYER IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION,
THAT IT IS REPRESENTED BY LEGAL COUNSEL OF ITS OWN SELECTION AND THAT BUYER
HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE
IT TO EVALUATE THE MERITS AND RISKS OF A TRANSACTION, AND THAT IT
VOLUNTARILY CONSENTS TO THIS WAIVER AFTER CONSULTATION WITH AN ATTORNEY OF
ITS OWN SELECTION.
[END OF PAGE - SIGNATURE PAGES FOLLOW]
14
EXECUTED effective as of the Effective Date of this Contract.
SELLER: BUYER:
SUNTRON GCO, LP, GSL INDUSTRIAL PARTNERS, L.P., a
Texas limited partnership a Texas limited partnership
By: Rodnic LLC, a Texas limited By: GSL Partners GP, LLC, a Texas
liability company, its general limited liability company, its
partner general partner
By: /s/ JAMES A. DORAN By: /s/ WELCOME W. WILSON, Sr.
--------------------------------- ------------------------------------
James A. Doran, Welcome W. Wilson, Sr.,
Chief Financial Officer Chairman and Chief
Executive Officer
THREE FULLY-EXECUTED ORIGINALS OF CONTRACT RECEIVED THIS 27TH DAY
OF DECEMBER, 2005 (THE "EFFECTIVE DATE"):
CHICAGO TITLE INSURANCE COMPANY
By: /s/ PHYLLIS J. OCEAN
---------------------------------
Name: PHYLLIS J. OCEAN
-------------------------------
Title: ESCROW OFFICER
------------------------------
EARNEST MONEY IN THE FORM OF BANK WIRE RECEIVED THIS 27TH
DAY OF DECEMBER, 2005:
CHICAGO TITLE INSURANCE COMPANY
By: /s/ PHYLLIS J. OCEAN
---------------------------------
Name: PHYLLIS J. OCEAN
-------------------------------
Title: ESCROW OFFICER
------------------------------
SELLER REIMBURSEMENT DEPOSIT IN THE FORM OF BANK WIRE RECEIVED THIS
23RD DAY OF DECEMBER, 2005:
CHICAGO TITLE INSURANCE COMPANY
By: /s/ PHYLLIS J. OCEAN
---------------------------------
Name: PHYLLIS J. OCEAN
-------------------------------
Title: ESCROW OFFICER
------------------------------
15
ADDENDUM I
OTHER PROPERTY AND RIGHTS INCLUDED IN THE TERM "PROPERTY"
The term "PROPERTY" shall include the following: (a) all buildings,
improvements, fixtures and all property of every kind and character and
description (personal or real) owned by Seller located on, attached to, or used
in connection with the Property described on EXHIBIT "A"; (b) all rights,
privileges and appurtenances pertaining thereto, including any right, title, and
interest of Seller in and to adjacent streets, alleys, and right-of-way; (c)
Seller's interest in and to all leases or rents and security deposits; (d)
Seller's interest in and to all licenses and permits with respect to the
Property described on EXHIBIT "A"; and (e) Seller's interest in all third party
warranties or guaranties, if transferable, relating to the Property described on
EXHIBIT "A" or to any tangible personal property and fixtures located on,
attached to, or used in connection with the Property described on EXHIBIT "A",
but expressly excluding from (d) and (e) above those licenses, permits,
warranties and guaranties, if any, that are to be used by Seller in connection
with Seller's on-going occupancy of the Property under the Lease and described
on ADDENDUM 1-A hereto. The personal property to be conveyed by Seller to Buyer
will include all tangible personal property and equipment which is either
located on or used in connection with the operation, repair or maintenance of
the Property described on EXHIBIT "A" including, but not limited to all: (i) gas
and electric fixtures, systems, conduit and wiring; (ii) engines, boilers,
elevators, escalators, incinerators, generators, motors, dynamos, battery rooms
and batteries; (iii) heating, ventilating and air-conditioning systems,
equipment, appurtenances; (iv) sinks, water closets, basins, pipes, faucets, and
other plumbing fixtures, equipment and facilities; (v) fire prevention and
extinguishing apparatus; (vi) central music and public address systems; (vii)
burglar alarms, security systems and other security or alarm systems, wiring and
equipment; (viii) built-in appliances and furniture, and other furnishings and
decor items that are permanently attached to the building; (ix) shades, awnings,
screens, blinds, drapes, curtains and other window coverings or treatments; (x)
wall to wall carpets and other permanent floor coverings; (xi) lawn care and
landscaping care and maintenance equipment and tools; and (xii) other equipment,
spare parts, tools, materials and supplies for the use, operation, maintenance
and/or repair of the Property described on EXHIBIT "A" or any of the personal
property described in this ADDENDUM I, or both. Notwithstanding the foregoing,
even though they may be nominally "attached" to the buildings, structures or
other improvements located on the Property, those items described on ADDENDUM
1-A hereto are not deemed part of the Property and may be retained by Seller.
ADD 1-1
ADDENDUM 1-A
LIST OF SELLER-RETAINED LICENSES, PERMITS, WARRANTIES, GUARANTIES
AND ATTACHED PERSONAL PROPERTY
1. All furniture, pictures, paintings, plants and other furnishings and
decor.
2. All computer, networking and communication equipment, including
telephone and voicemail systems.
3. All office equipment, including copiers, scanners, printers, document
shredders and mail processing equipment.
4. All production/manufacturing equipment, including air compressors,
compressed air dryers and tanks, process water chillers, cooling
towers and filtration systems, and nitrogen tanks and delivery systems
that are used in manufacturing, processing or similar capacities, but
excluding any equipment forming a part of the basic building operating
systems, including the HVAC system.
5. Leased security, access control and CCTV system.
ADD I-A-1
ADDENDUM II
COMMITMENT AND SURVEY
1. COMMITMENT. Buyer will have fifteen (15) days after receipt of the
Commitment and legible or best available copies of all documents evidencing
title exceptions required by this Contract to object in writing to matters
disclosed in the Commitment other than the standard printed exceptions as
described or limited in Section 6 of the Contract. Buyer's failure to
object under this paragraph within the time allowed will constitute a
waiver of Buyer's right to object, except that the requirements in Schedule
C of the Commitment will not be deemed to have been waived. If objections
hereunder are made by Buyer or any third party lender of Buyer within the
time allowed, Seller shall notify Buyer within five (5) days of receipt of
such objections as to whether Seller intends to cure such objections, in
which event Seller shall have fifteen (15) days after the date of such
notice to Buyer to cure such objections. If Seller has not notified Buyer
within five (5) days of receipt of Buyer's objections under this paragraph
of its intent to cure such objections or if Seller elects not to cure all
of such objections, Buyer shall have only the right, by giving notice
thereof to Seller within ten (10) days of the expiration of Seller's reply
period or receipt of Seller's election not to cure Buyer's objections, (a)
to terminate this Contract and receive the return of the Earnest Money and
any interest earned thereon, thereby relieving the parties from any further
obligations under this Contract except those which by their terms survive
this Closing or the prior termination of this Contract, or (b) to waive
such objections under this paragraph and proceed to Closing without any
abatement or reduction of the Sales Price. In the event Buyer does not give
such election notice within said ten (10) day period, Buyer shall be deemed
to have elected option (b) above. Should Seller elect to cure Buyer's
objections and fail to do so within the time allowed hereunder, Buyer may
elect to extend the Closing Date as necessary to allow Seller to cure such
objections, or to terminate this Contract, or to waive such objections and
proceed to Closing under the provisions as stated herein.
2. SURVEY. The Survey required or permitted by Section 7 of the Contract shall
be made by a Texas Registered Professional Land Surveyor acceptable to the
Title Company, Buyer and any lender of Buyer. The Survey shall: (i)
identify the Property by metes and bounds or platted lot description; (ii)
show that the Survey was made and staked on the ground with corners
permanently marked; (iii) set forth the dimensions and total area of the
Property; (iv) show the location of all improvements, highways, streets,
roads, railroads, rivers, creeks, or other waterways, fences, easements,
and rights of way on the Property with all easements and rights of way
referenced to their recording information; (v) show any discrepancies or
conflicts in boundaries, any visible encroachments, and any portion of the
Property lying within the 100-year floodplain as shown on the current
Federal Emergency Management Agency map; and (vi) contain the surveyor's
certificate in the form attached hereto as EXHIBIT "B". Buyer may within
fifteen (15) days after Buyer's receipt of the Survey (but in no event
later than the expiration of the Inspection Period) object in writing to
any matter relating to the Survey. Buyer's failure to object under this
paragraph within the time allowed will constitute a waiver of Buyer's right
to object to Survey matters. If objections hereunder are made by Buyer, or
any third party lender of Buyer within the time allowed, such objections
shall be dealt with in accordance with the
ADD II-1
provisions of paragraph 1 above, and the Closing Date may be extended if
necessary to provide for the time periods described in such paragraph.
ADD II-2
ADDENDUM III
INSPECTIONS AND SELLER INFORMATION
3. INSPECTIONS. Buyer's Inspections under Section 8 of the Contract may
include, but are not limited to the following: (i) physical property
inspections including, but not limited to, structural pest control,
mechanical, structural, electrical, or plumbing inspections; (ii) economic
feasibility studies; (iii) any type of environmental assessment or
engineering study including the performance of tests such as soils tests,
air sampling, or paint sampling; and (iv) compliance inspections to
determine compliance with zoning ordinances, restrictions, building codes,
and statutes (e.g., ADA, OSHA, and others).
4. SELLER INFORMATION. Within ten (10) days after the Effective Date, Seller
will deliver to Buyer the items described below to the extent that the
items are in Seller's possession or are readily available to Seller
(collectively, the "DUE DILIGENCE MATERIALS"):
(a) copies of all leases pertaining to the Property, including any
modifications, supplements, or amendments to the leases;
(b) a current inventory of all tangible personal property and fixtures
owned by Seller and located on, attached to, or used in connection
with the Property;
(c) copies of all service, maintenance and management agreements relating
to the ownership and operation of the Property other than instruments
of record;
(d) an itemized list of major capital expenditures undertaken in the last
two years, together with a schedule of capital improvements planned
for the current year, and the progress of such improvements to date;
(e) copies of monthly income and expense statements for the Property for
the years 2003, 2004, and the most recent year to date 2005;
(f) copies of all warranties and guaranties relating to the Property, or
any part thereof, or to the tangible personal property and fixtures
owned by Seller and located on, attached to, or used in connection
with the Property;
(g) copies of easements, deed restrictions, side letters, and any other
documents now encumbering the Property or that will encumber the
Property in the future and that are not recorded in the public
records;
(h) copies of all leasing or other commission agreements with respect to
the Property that are being assumed by Buyer;
(i) a copy of the "as-built" plans and specifications of the Property;
(j) copies of the most recent property tax statements and value renditions
regarding the Property for the years 2003, 2004, and if available, the
statement of taxes to be paid in 2005;
ADD III-1
(k) copies of all governmental licenses, certificates, permits and
approvals pertaining to the Property and satisfactory evidence of
compliance with all zoning, subdivision, and other governmental
requirements, conditions and agreements;
(l) copy of the current Certificate(s) of Occupancy for the Property; and
(m) copies of all previous title policies, surveys, site plans,
appraisals, environmental assessments, studies, or analyses, and soil,
engineering or wetlands reports, affecting the Property in Seller's
possession.
EXCEPT AS TO THE ITEMS DESCRIBED IN SUBPARAGRAPHS (a), (b), (c) AND (d)
ABOVE (WHICH SELLER WARRANTS WILL BE TRUE, ACCURATE AND COMPLETE), BUYER HEREBY
ACKNOWLEDGES THAT SELLER HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION OR
WARRANTY REGARDING THE TRUTH, ACCURACY OR COMPLETENESS OF THE FOREGOING ITEMS OR
THE SOURCES THEREOF. EXCEPT AS TO THE ITEMS DESCRIBED IN SUBPARAGRAPHS (a), (b),
(c) AND (d) ABOVE (WHICH SELLER WARRANTS WILL BE TRUE, ACCURATE AND COMPLETE),
SELLER HAS NOT UNDERTAKEN ANY INDEPENDENT INVESTIGATION AS TO THE TRUTH,
ACCURACY OR COMPLETENESS OF THE FOREGOING ITEMS AND IS PROVIDING THE FOREGOING
ITEMS SOLELY AS AN ACCOMMODATION TO BUYER.
ADD III-2
ADDENDUM IV
CLOSING ITEMS
1. At Closing, Seller will deliver to Buyer, at Seller's expense, the items
described below:
(a) tax statements showing no delinquent taxes on the Property;
(b) Special Warranty Deed conveying good and indefeasible title to the
Property showing no additional exceptions to those permitted in
Sections 6 and 7 of the Contract or in ADDENDUM II;
(c) a Bill of Sale with warranties of title conveying title, free and
clear of all liens and security interests, to any personal property
defined as part of the Property in ADDENDUM I and conveyed by this
Contract;
(d) to the extent assignable, an assignment to Buyer of the following
items as they relate to the Property or its operations: (i) licenses
and permits, (ii) maintenance, management and other contracts, and
(iii) warranties and guaranties.
(e) any notices, statements, certificates or other documents required by
the Contract or law necessary to convey the Property, all of which
must be completed and executed by Seller as necessary;
(f) a Reaffirmation Certificate as described in Paragraph 3 of ADDENDUM V
to this Contract;
(g) evidence that the person executing this Contract and the Closing
documents is authorized to bind Seller;
(h) a copy of the current Certificate(s) of Occupancy covering the
improvements located on the Property;
(i) the Lease and Existing Mortgagee SNDA Agreement;
(j) an amount equal to the first month's rent under the Lease; and
(k) the notices required to be executed by Seller pursuant to Section 25
of this Contract.
2. At Closing, Buyer will deliver to Seller, at Buyer's expense, the items
described below:
(a) the Purchase Price, subject to adjustment as may be set forth herein;
(b) evidence that the person executing this Contract and the Closing
documents is authorized to bind Buyer;
ADD IV-1
(c) any notices, statements, certificates or other documents required by
the Contract or law necessary to accept conveyance of the Property,
all of which must be completed and executed by Buyer as necessary;
(d) the Lease and Existing Mortgagee SNDA Agreement; and
(e) the notices required to be executed by Buyer pursuant to Section 25 of
this Contract.
ADD IV-2
ADDENDUM V
WARRANTIES, REPRESENTATIONS, COVENANTS AND CONDITIONS
1. LIMITATIONS ON SELLER'S WARRANTIES AND REPRESENTATIONS. BUYER SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT (I) EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN
ANY CLOSING DOCUMENT REQUIRED HEREBY, SELLER IS TRANSFERRING THE PROPERTY
"AS IS, WHERE IS AND WITH ALL FAULTS" AND (II) EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH HEREIN, OR IN
ANY CLOSING DOCUMENT REQUIRED HEREBY, NEITHER SELLER NOR ANY OTHER PERSON
IS MAKING, AND BUYER IS NOT RELYING ON, ANY REPRESENTATIONS OR WARRANTIES
OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED,
STATUTORY OR OTHERWISE, AS TO ANY MATTER CONCERNING ANY OF THE PROPERTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACCURACY OR COMPLETENESS OF
ANY INFORMATION PROVIDED TO BUYER BY SELLER OR ANY OTHER PERSON OR
OTHERWISE OBTAINED BY BUYER CONCERNING ANY OF THE PROPERTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING ANY REPRESENTATIONS OR
WARRANTIES RELATING TO: (A) THE QUALITY, NATURE, HABITABILITY,
MERCHANTABILITY, USE, OPERATION, VALUE, MARKETABILITY, ADEQUACY OR PHYSICAL
CONDITION OF ANY OF THE PROPERTY OR ANY ASPECT OR PORTION THEREOF,
INCLUDING STRUCTURAL ELEMENTS OF ANY BUILDINGS OR IMPROVEMENTS, ACCESS,
SEWAGE, WATER AND UTILITY SYSTEMS, FACILITIES AND APPLIANCES, SOILS,
GEOLOGY, SURFACE WATER, GROUNDWATER OR ACCESS TO OR VALUE, VOLUME OR
QUALITY OF TIMBER; (B) THE MAGNITUDE OR DIMENSIONS OF THE PROPERTY; (C) THE
DEVELOPMENT OR INCOME POTENTIAL, OR RIGHTS OF OR RELATING TO, THE PROPERTY,
OR THE FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR ANY
PARTICULAR PURPOSE; (D) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR
THE EXISTENCE OF ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON THE USE OF THE
PROPERTY; (E) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY
APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS,
CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL AUTHORITY OR OF ANY OTHER
PERSON; OR (F) THE ABILITY OF BUYER TO OBTAIN ANY NECESSARY GOVERNMENTAL
APPROVALS, LICENSES OR PERMITS FOR THE USE OR DEVELOPMENT OF THE PROPERTY.
BUYER HEREBY FURTHER EXPRESSLY ACKNOWLEDGES AND AGREES THAT BUYER HAS OR
WILL HAVE, PRIOR TO THE END OF THE INSPECTION PERIOD, THOROUGHLY INSPECTED
AND EXAMINED THE PROPERTY TO THE EXTENT DEEMED NECESSARY BY BUYER IN ORDER
TO ENABLE BUYER
ADD V-1
TO EVALUATE THE PURCHASE OF THE PROPERTY AND THAT BUYER IS RELYING SOLELY
UPON THE INSPECTION, EXAMINATION, AND EVALUATION OF THE PROPERTY BY BUYER.
IN ADDITION, BUYER ACKNOWLEDGES AND AGREES THAT NO PROPERTY (REAL, PERSONAL
OR OTHERWISE) OWNED BY ANY TENANT OR ANY OTHER PERSON IS INTENDED TO BE
CONVEYED HEREUNDER UNLESS THAT PROPERTY IS DESCRIBED AND PURPORTED TO BE
CONVEYED UNDER THIS AGREEMENT. THE TERMS AND CONDITIONS OF THIS PARAGRAPH
WILL EXPRESSLY SURVIVE THE TERMINATION OF THIS CONTRACT OR THE CLOSING, AS
THE CASE MAY BE, AND WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING
DOCUMENTS AND ARE HEREBY DEEMED INCORPORATED INTO THE DEED CONVEYING THE
PROPERTY AS FULLY AS IF SET FORTH AT LENGTH THEREIN. NOTWITHSTANDING
ANYTHING IN THIS PARAGRAPH 1 TO THE CONTRARY, NOTHING HEREIN IS INTENDED,
OR SHALL BE CONSTRUED, TO LIMIT SELLER'S LIABILITY OR OBLIGATION, OR
BUYER'S RIGHTS OR REMEDIES, UNDER PARAGRAPH 5 OF THIS ADDENDUM V.
NOTWITHSTANDING ANYTHING IN THIS PARAGRAPH 1 TO THE CONTRARY, NOTHING
HEREIN IS INTENDED, OR SHALL BE CONSTRUED, TO LIMIT SELLER'S LIABILITY OR
OBLIGATION, OR BUYER'S RIGHTS OR REMEDIES, UNDER PARAGRAPH 5 OF THIS
ADDENDUM V.
2. SELLER'S WARRANTIES AND REPRESENTATIONS. As used herein, the phrase "actual
knowledge of Seller" or "Seller's knowledge" or similar phrases shall mean
the actual knowledge of Alan Mills, without duty of inquiry and exclusive
of any implied knowledge.
(a) Seller represents and warrants that Seller has not received written
notice of and has no actual knowledge of any of the following, except
as may be described otherwise in this Contract:
(1) any Material Physical Defect to the Property; provided that as
used herein, the term "Material Physical Defect" shall mean any
structural condition of the Property that would prevent the
Property from continuing to be used in substantially the same
manner as the Property is being used on the Effective Date of
this Contract, and Buyer agrees that Seller is not warranting the
condition of HVAC system components or other mechanical or
utility systems or any components thereof that are subject to
deterioration and wear and tear, Buyer having had an opportunity
inspect all such systems and determine the condition thereof;
(2) any pending or threatened litigation, condemnation, or assessment
affecting the Property;
ADD V-2
(3) any fact or condition regarding the physical utility of the
Property that would prevent the continued use or operation of the
Property in the manner of its present use and operation;
(4) with the exception of those items listed on EXHIBIT "D", any
Hazardous Materials being located on the Property or having been
disposed of or released from the Property into or onto other
property);
(5) with the exception of those items listed on EXHIBIT "D", any use
by Seller of the Property for the storage of Hazardous Materials,
other than Permitted Materials as defined in the Lease, or for
the disposal of Hazardous Materials, or as a dump site or
landfill, or whether the Property contains or has previously
contained any underground tanks or containers; and
(6) with the exception of those items listed on EXHIBIT "D", whether
radon, asbestos insulation or fireproofing, urea-formaldehyde
foam insulation, lead-based paint or other pollutants or
contaminates of any nature now exist or have ever existed on the
Property.
(b) Further, Seller warrants and represents to Seller's actual knowledge
to Buyer as follows:
(i) Seller has not received any written notice or request from any
insurance company or board of fire underwriters (or any
organization exercising functions similar thereto) requesting the
performance of any work or alterations with respect to the
Property, except those as to which Seller has completed remedial
action which has been formally accepted as sufficient by such
authority or insurer.
(ii) Seller has not received written notice that any restrictive
covenants, zoning or other ordinances, rules, statutes or
governmental laws or regulations are being violated by the
current use or operation of the Property or that the Property
lacks any permits required for its present use and occupancy.
(iii) There are no service or maintenance contracts which are not
terminable by Seller without penalty after no more than thirty
(30) days' notice.
(iv) Seller is duly organized, validly existing and in good standing
under the laws of its state of organization or incorporation and
is duly qualified and has all requisite power and authority to
own and operate the Property and to enter into and perform this
Contract; this Contract has been duly authorized by all requisite
action and is enforceable against Seller in accordance with its
terms; and neither the execution and delivery of this Contract
nor the consummation of the sale provided for herein will
constitute a violation or breach by Seller of any provision of
any
ADD V-3
agreement or other instrument to which Seller is a party or to
which the Seller may be subject although not a party, or will
result in or constitute a violation or breach of any judgment,
order, writ, injunction or decree issued against Seller or the
Property.
3. CERTAIN SPECIFIC COVENANTS OF SELLER. Seller further covenants and agrees
with Buyer as follows, Seller's compliance with which covenants shall be a
condition precedent to Buyer's obligation to proceed to Closing under this
Contract, provided, however, that if such conditions are not satisfied
prior to the Closing Date, Buyer shall have only the rights and remedies
set forth in Section 15 of this Contract:
(a) Performance of Obligations. Through the Closing Date or earlier
termination of this Contract, Seller shall not default in performance
of Seller's obligations under any service contracts or other
agreements affecting the Property, including, without limitation any
loans secured by liens against the Property, and Seller shall not
make, or permit to be made, any change or modification to any such
agreement that will be binding on the Property after the Closing
without the prior written approval of Buyer.
(b) Encumbrances; Alterations; Change. Through the Closing Date or the
earlier termination of this Contract, Seller shall not, without the
prior written consent of Buyer except as otherwise required or
permitted under the terms of this Contract: (i) plat, restrict or
encumber, or permit to be platted, restricted or encumbered any
portion of the Property, except as provided in Section 26 with regard
to the Option Property; (ii) grant any licenses, easements or other
uses affecting any portion of the Property; (iii) cause or permit any
mechanic's or materialman's lien to attach to any portion of the
Property that will not be removed at or prior to Closing; (iv) place
or permit to be placed on, or remove or permit to be removed from, the
Property any buildings, structures, landscaping or other improvements
of any kind except in connection with normal upkeep of the buildings
and landscaping; (v) excavate or permit the excavation of the
Property; (vi) contaminate or cause or permit the Property or any part
thereof to be contaminated with any Hazardous Substance; or (vii)
remove, destroy or sell, or allow to be removed, destroyed or sold,
any portion of the Property except such portions of the Property
disposed of and contemporaneously replaced with an item of equivalent
value and function (but in any event in operating or functional
condition) as a result of obsolescence of the replaced item.
(c) Operations. Seller shall operate, or cause to be operated, the
Property in a good and businesslike manner until the Closing, and
make, or cause to be made, repairs and replacements that would
typically be made in the ordinary course of such business.
(d) Insurance. The amount and type of insurance policies carried by Seller
covering the Property shall not be changed, cancelled or allowed to
expire prior to the Closing unless replaced with policies of
equivalent value.
ADD V-4
(e) Zoning Matters. Seller agrees to use reasonable efforts to cooperate
with Buyer in Buyer's attempts to obtain such zoning, platting and
development approvals as may be necessary or desirable, in Buyer's
sole and absolute discretion, so long as Seller is able to continue
Seller's use of the Property under the Lease.
4. ADDITIONAL CONDITIONS TO CLOSING. Notwithstanding anything to the contrary
contained in the Contract, the following shall be conditions precedent to
Buyer's obligations under this Contract:
(a) Covenants of Seller. All covenants and obligations of Seller due to be
performed prior to Closing shall have been fully performed (unless
expressly waived in writing by Buyer).
(b) Representations and Warranties. All of Seller's representations and
warranties shall be true and correct as of Closing, and shall be
reaffirmed by Seller at Closing by executing and delivering to Buyer a
certificate (the "REAFFIRMATION CERTIFICATE") whereby the Seller
reaffirms Seller's representations and warranties in this Addendum as
of the Closing Date.
(c) Property Condition. Except for changes consented to by Buyer in
writing, and ordinary wear and tear, and subject to the provisions of
Section 14 of this Contract, the Property shall be in the same
condition on the Closing Date as it was on the Effective Date
(excluding conditions that are the Buyer's responsibility under any
other provision of this Contract)
(d) Permitted Use. The use of the Property as an industrial
facility/warehouse shall be permitted by applicable laws and
regulations, and all permits and approvals therefor, shall be in full
force and effect. Further, Seller shall provide to Buyer a copy of
Certificates of Occupancy in Seller's possession covering the
improvements located on the Property and evidence that the applicable
zoning ordinance permits the industrial/warehouse use of the Property.
(e) Zoning, Platting and Development Approvals. Prior to Closing, Buyer
shall have obtained all of its final zoning, platting and development
approvals from applicable governmental agencies and other parties as
may be necessary or desirable, in Buyer's sole and absolute
discretion, for the use and development intended by Buyer for the
Property. Seller agrees to use reasonable efforts to cooperate with
Buyer in Buyer's attempts to obtain such zoning, platting and
development approvals.
(f) Mineral Leases or Interests; No Outstanding Surface Rights. No person
(other than Seller prior to the Closing and only Buyer immediately
following Closing) who owns, leases or otherwise has any rights with
respect to oil, gas or other minerals (subsurface or otherwise) in, on
or under the Property shall have any surface rights with respect to
the Property, including, without limitation, any right (i) to use or
occupy any portion of the surface of the Property; (ii) to conduct
drilling, prospecting, mining or other operations upon the surface of
the Property;
ADD V-5
(iii) to construct pipelines, other structures or other facilities
upon the surface of the Property; or (iv) to damage the surface of or
the improvements on the Property unless such rights have been approved
by Buyer in connection with Buyer's review of title matters.
5. ENVIRONMENTAL INDEMNITY.
(a) Notwithstanding anything in the Contract to the contrary, Seller will
indemnify, defend and hold harmless Buyer from and against, and
reimburse Buyer on demand for, any and all claims, demands,
liabilities (including strict liability), losses, damages (including
consequential damages), causes of action, judgments, penalties, costs
and expense (including without limitation, reasonable fees and
expenses of attorneys and other professional consultants and experts,
and of the investigation and defense of any claim, whether or not such
claim is ultimately withdrawn or defeated, and the settlement of any
claim or judgment including all value paid or given in settlement) of
every kind, known or unknown, foreseeable or unforeseeable (all of the
foregoing, collectively, "CLAIMS"), which may be imposed upon,
asserted against or incurred or paid by Buyer at any time and from
time to time, whenever imposed, asserted or incurred, because of,
resulting from, in connection with, or arising out of (i) any
Hazardous Materials Contamination which arose or occurred before
Closing and that was caused or contributed to by Seller (or any
affiliate of Seller) during Seller's (or such Seller-affiliate's)
ownership of the Property, or (ii) any violation of any representation
or warranty of Seller in this Contract pertaining to Hazardous
Materials.
(b) Notwithstanding anything in the Contract to the contrary, and except
as otherwise provided in the Lease, Buyer will indemnify, defend and
hold harmless Seller from and against, and reimburse Seller on demand
for, any and all Claims which may be imposed upon, asserted against or
incurred or paid by Seller at any time and from time to time, whenever
imposed, asserted or incurred, because of, resulting from, in
connection with, or arising out of (i) any Hazardous Materials
Contamination which arose or occurred after Closing and that was
caused or contributed to by Buyer (or any affiliate of Buyer) during
Buyer's (or such Buyer-affiliate's) ownership of the Property, or (ii)
any violation of any representation or warranty of Buyer in this
Contract pertaining to Hazardous Materials.
(c) The provisions of this Paragraph 5 survive Closing.
(d) "HAZARDOUS MATERIALS" shall mean (a) any "hazardous waste" or
"regulated substance" as defined by the Resource Conservation and
Recovery Act of 1976, and regulations promulgated thereunder, both as
amended from time to time; (b) any "hazardous substance" as defined by
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), and regulations promulgated thereunder, both
as amended from time to time; (c) any "toxic substance" as defined by
the Toxic Substances Control Act, and regulations promulgated
thereunder, both as amended from time to time; (d) any "waste" as
defined by the Texas Water Quality Control Act, and regulations
promulgated
ADD V-6
thereunder, both as amended from time to time; (e) any "solid waste"
as defined by the Texas Solid Waste Disposal Act, and regulations
promulgated thereunder, both as amended from time to time; (f) any
"air contaminant" as defined by the Texas Clean Air Act, and
regulations promulgated thereunder, both as amended from time to time;
(g) any "hazardous substance" as defined by the Texas Hazardous
Substances Spill Prevention and Control Act, and regulations
promulgated thereunder, both as amended from time to time; (h) any
"toxic chemical" as defined by the Texas Toxic Chemical Release
Reporting Act, and regulations promulgated thereunder, both as amended
from time to time; (i) any "regulated asbestos-containing material" as
defined in the National Emission Standard for Asbestos, as amended
from time to time; (j) polychlorinated biphenyls ("PCBS") as defined
in 40 C.F.R. Part 761, as amended from time to time; (k) underground
storage tanks, whether active, inactive, empty, filled or partially
filled with any substance, (l) any substance the presence and quantity
of which on the Property is prohibited by any Governmental
Requirements; and (m) any other substance which by any Governmental
Requirements requires special handling or notification of any federal,
state or local governmental entity in its collection, storage,
transportation, treatment, processing, management or disposal.
(e) "HAZARDOUS MATERIALS CONTAMINATION" shall mean the contamination of
the improvements, facilities, soil, surface water, groundwater, air or
other elements on or of the Property by Hazardous Materials, or the
contamination of the buildings, facilities, soil, surface water,
groundwater, air or other elements on or of any other property as a
result of Hazardous Materials emanating from the Property.
(f) IT IS UNDERSTOOD AND AGREED THAT THE INDEMNITIES DESCRIBED IN THIS
SECTION 5 INCLUDE INDEMNIFICATION BY BUYER FOR THE ORDINARY NEGLIGENCE
OF SELLER, AND THE INDEMNIFICATION BY SELLER FOR THE ORDINARY
NEGLIGENCE OF BUYER.
6. FEDERAL TAX REQUIREMENT. If Seller is a "foreign person", as defined by
applicable law, or if Seller fails to deliver an affidavit that Seller is
not a "foreign person", then Buyer will withhold from the sales proceeds at
Closing an amount sufficient to comply with applicable tax law and deliver
the same to the Internal Revenue Service, together with appropriate tax
forms. Internal Revenue Service regulations require filing written reports
is cash in excess of specified amounts is received in the transaction.
7. BUYER'S WARRANTIES AND REPRESENTATIONS. Buyer warrants and represents to
Seller that Buyer is duly organized, validly existing and in good standing
under the laws of its state of organization or incorporation and is duly
qualified and has all requisite power and authority to enter into and
perform this Contract; this Contract has been duly authorized by all
requisite action and is enforceable against Buyer in accordance with its
terms; and neither the execution and delivery of this Contract nor the
consummation of the sale provided for herein will constitute a violation or
breach by Buyer of any provision of any agreement or other instrument to
which Buyer is a party or to which the Buyer may be
ADD V-7
subject although not a party, or will result in or constitute a violation
or breach of any judgment, order, writ, injunction or decree issued against
Buyer.
8. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. The covenants,
representations and warranties contained herein shall survive and be
enforceable after the Closing and shall not be merged into the deed or any
other documents executed at Closing, and shall not be affected by any
investigation, verification or approval by any party hereto or by anyone
acting on behalf of any party hereto (except as a waiver may be evidenced
in writing signed by the waiving party or a waiver is deemed to have
occurred by the express provisions of this Contract); provided, however,
notwithstanding any provision of this Contract seemingly to the contrary,
Seller and Buyer each agree that any action, suit or proceeding brought by
either party against the other, if not commenced and served on or before
the end of the time periods set forth below, thereafter shall be void and
of no force or effect:
(a) with respect to the representations and warranties of Seller set
forth in subsections 1, 3, 4, 5, & 6 of Section 2 (a) of Addendum V,
on or before the date which is six (6) months after the date of
Closing, and
(b) with respect to all other representations and warranties set forth
in this Contract, on or before the date which is twelve (12) months
after the date of Closing.
ADD V-8
ADDENDUM VI
NOTICE OF SPECIAL TAXING AUTHORITY DISTRICT
("MUD NOTICE")
The real property, described below, that you are about to purchase is
located in the __________ District. The district has taxing authority
separate from any other taxing authority and may, subject to voter
approval, issue an unlimited amount of bonds and levy an unlimited rate of
tax in payment of such bonds. As of January 1, 2005, the rate of taxes
levied by the district on real property located in the district is
$__________ on each $100 of assessed valuation.
If the district has not yet levied taxes, the most recent projected rate of
tax, as of this date, is $__________ on each $100 of assessed valuation.
The total amount of bonds, excluding refunding bonds and any bonds or any
portion of bonds issued that are payable solely from revenues received or
expected to be received under a contract with a governmental entity,
approved by the voters and which have been or may, at this date, be issued
is $__________, and the aggregate initial principal amounts of all bonds
issued for one or more of the specified facilities of the district and
payable in whole or in part from property taxes is $__________.
The district has the authority to adopt and impose a standby fee on
property in the district that has water, sanitary sewer, or drainage
facilities and services available but not connected and which does not have
a house, building, or other improvement located thereon and does not
substantially utilize the utility capacity available to the property. The
district may exercise the authority without holding an election on the
matter. As of this date, the most recent amount of the standby fee is
$__________. An unpaid standby fee is a personal obligation of the person
that owned the property at the time of imposition and is secured by a lien
on the property. Any person may request a certificate from the district
stating the amount, if any, of unpaid standby fees on a tract of property
in the district.
The district is located in whole or in part within the corporate boundaries
of the City of Sugar Land. The taxpayers of the district are subject to the
taxes imposed by the municipality and by the district until the district is
dissolved. By law, a district located within the corporate boundaries of a
municipality may be dissolved by municipal ordinance without the consent of
the district or the voters of the district.
ADD VI-1
The purpose of this district is to provide water, sewer, drainage, or flood
control facilities and services within the district through the issuance of
bonds payable in whole or in part from property taxes. The cost of these
utility facilities is not included in the purchase price of your property,
and these utility facilities are owned or to be owned by the district. The
legal description of the property you are acquiring is as follows or as
attached hereto:
___________________________________________________________________________
- -------------------------------------
(Date)
- -------------------------------------
Signature of Seller
BUYER IS ADVISED THAT THE INFORMATION SHOWN ON THIS FORM IS SUBJECT TO
CHANGE BY THE DISTRICT AT ANY TIME. THE DISTRICT ROUTINELY ESTABLISHES TAX RATES
DURING THE MONTHS OF SEPTEMBER THROUGH DECEMBER OF EACH YEAR, EFFECTIVE FOR THE
YEAR IN WHICH THE TAX RATES ARE APPROVED BY THE DISTRICT. BUYER IS ADVISED TO
CONTACT THE DISTRICT TO DETERMINE THE STATUS OF ANY CURRENT OR PROPOSED CHANGES
TO THE INFORMATION SHOWN ON THIS FORM.
The undersigned purchaser hereby acknowledges receipt of the foregoing
notice at or prior to execution of a binding contract for the purchase of
the real property described in such notice or at closing of purchase of the
real property.
- -------------------------------------
(Date)
- -------------------------------------
Signature of Buyer
(Note: Correct district name, tax rate, bond amounts, and legal description
are to be placed in the appropriate space. Except for notices included as an
addendum or paragraph of a purchase contract, the notice shall be executed by
the seller and purchaser, as indicated. If the district does not propose to
provide one or more of the specified facilities and services, the appropriate
purpose may be eliminated. If the district has not yet levied taxes, a statement
of the district's most recent projected rate of tax is to be placed in the
appropriate space. If the district does not have approval from the commission to
adopt and impose a standby fee, the second paragraph of the notice may be
deleted.)
ADD VI-2
EXHIBIT "A"
DESCRIPTION OF PROPERTY
Seller and Buyer acknowledge that the description on the page(s) attached
hereto technically may be, or is, legally insufficient for the purposes of
supporting an action to enforce the purchase and sale of the Property. As such,
Seller and Buyer confirm unto one another that, notwithstanding the
insufficiency, the parties desire to proceed with the execution of the Contract
to which this EXHIBIT "A" is attached. Therefore, since the parties are desirous
of executing the Contract and in order to provide for the right of Seller or
Buyer to demand and successfully enforce the terms thereof and to ensure that
such right is not precluded due to the legal description of the Property, Seller
and Buyer agree that (i) they are experienced in transactions of the nature
provided for in this transaction, (ii) in fact, they specifically are familiar
with the location of the Property, (iii) each party waives any and all claims of
an insufficient legal description in a cause of action for enforcement hereof,
and (iv) the metes and bound description of the Property prepared in connection
with the Survey shall become the legal description of the Property.
A-1
EXHIBIT "B"
REQUIRED FORM OF SURVEYOR'S CERTIFICATE
Surveyor's Certification: I hereby certify to ____________________________
("Purchaser"), __________________ ("Lender"), and Chicago Title Insurance
Company, and all other interested parties, as follows:
1. On the ________ day of __________, 20__, this survey was made by me (or
under my direct supervision) on the ground as per the field notes shown on this
survey and is true, correct and accurate as to the boundaries and areas of the
subject Property and the size, location and type of buildings and improvements
thereon, if any, and as to the other matters shown thereon.
2. The area or quantity of the subject Property as set forth in this survey
is accurate to the nearest _____________________.
3. This survey conforms to the Texas Surveyor's Association Standards and
Specifications for a Category 1A, Condition II Survey.
4. This survey correctly shows (among the other matters required to be
shown by the standards described in Paragraph 3 hereof) the location of the
following matters affecting the subject Property, whether or not located on the
subject Property: all recorded easements and rights-of-way; all signs, fences,
power lines and power poles, railroad tracks, party walls, foundations, and
other improvements; all building set-back lines and other areas restricted for
building purposes under any apparently applicable private restrictive covenant;
all lakes, ponds, streams and areas that appear to be permanently inundated,
whether or not navigable; all areas that appear to be swamp, marsh, bog or
regularly and substantially saturated in surveyor's best judgment (provided that
Surveyor does not certify whether such areas or any other portions of the
Property comprise "wetlands" under applicable federal laws); all above-ground
and underground telephone or power lines, oil or gas pipelines, utility lines,
power lines and power poles including those which serve, or which may serve, the
subject Property (provided that pipelines and utility lines off the property are
shown only to the extent located in immediately adjacent rights-of-way or within
fifty feet of any boundary of the Property not fronting on a right-of-way); all
encroachments visible on the ground or of record; all visible or apparent
easements (including paths, dirt or gravel roads, and other man-made surface
features); all areas that appear to be or be affected by sinkholes and other
areas of excavation; all ditches that appear to be natural drainage courses; all
matters set forth in that certain commitment for owner's policy of title
insurance dated ______________, 20__, issued by ______________________ Title
Company, G.F. No. _____________; and all matters of which I have knowledge or
have been advised, whether or not of record, and, except as shown hereon, no
such matters affect the subject Property. All matters shown on this survey that
are created or affected by an instrument of record contain a reference to the
specific recording information under which such instrument has been filed for
public record.
5. Encroachments as used herein include encroachments or protrusions onto
the subject Property by improvements on adjacent property, rights-of-way or
easements and encroachments and protrusions onto adjacent property,
rights-of-way, easements or building set-backs by any improvements on the
subject Property and any conflicts or overlaps of the metes and bounds calls of
the subject Property and those of adjacent property, easements or rights-of-way.
6. The subject Property has unrestricted ingress and egress to and from
______________________, _____________________ and ___________________, and such
streets are paved, dedicated public right-of-ways maintained by the ___________.
B-1
7. No part of the subject Property lies within any flood hazard zone or
100-year flood plain or in an identified "flood prone area" or which is subject
to "special flood hazard," as defined by the U. S. Department of Housing and
Urban Development, pursuant to the Flood Disaster Act of 1973, as amended,
except as indicated hereon. Surveyor has no actual knowledge (without
independent inquiry or investigation) that any part of the Property is affected
by any fault zone as established by the U.S. Geological Service.
DATED: , 20
----------------- -- ----------------------------------------
Registered Public Surveyor
(SEAL) Surveyor Number: _________
B-2
EXHIBIT "C"
FORM OF LEASE
C-1
EXHIBIT "D"
ENVIRONMENTAL DISCLOSURES
None, unless listed below:
See list of Hazardous Materials used by Seller at the Property attached
hereto as Exhibit "D-1".
D-1
EXHIBIT "E"
DESCRIPTION OF OPTION TRACT
E-1
EXHIBIT "F"
DESCRIPTION OF RIGHT OF FIRST OPPORTUNITY TRACT
COMMERCIAL RESERVE "B"
TRACT 131 OF SUGAR LAND BUSINESS PARK
SLIDE NO. 1356B F.B.C.P.R.
BROWN AND BELKNAP LEAGUE, A-15
FORT BEND COUNTY, TEXAS
F-1