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SCHEDULE 14C
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14 (c)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Check the appropriate box:
{ } Preliminary Information Statement
{ } Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d) (2))
{X} Definitive Information Statement
SOUTHERN INVESTORS SERVICE COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required
{ } Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (1) (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total Fee Paid:
- --------------------------------------------------------------------------------
{X} Fee paid previously with preliminary materials.
{ } Check box if any part of the fee is offset as provided by Exchange Act
rule 0-11 (a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- --------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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SOUTHERN INVESTORS SERVICE COMPANY, INC.
(A DELAWARE CORPORATION)
INFORMATION STATEMENT
DATE FIRST MAILED OUT TO STOCKHOLDERS:
MARCH 10, 2000
2727 NORTH LOOP WEST
SUITE 200
HOUSTON, TEXAS 77008
TEL: (713) 869-7800
(PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY)
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
SOUTHERN INVESTORS SERVICE COMPANY, INC.
INFORMATION STATEMENT
MARCH 10, 2000
INTRODUCTION
This Information Statement is being furnished to stockholders of Southern
Investors Service Company, Inc., a Delaware corporation (the "Company"),
pursuant to the requirements of Regulation 14C under the Securities Exchange Act
of 1934, as amended, in connection with an Action by Written Consent, dated
February 21, 2000, of stockholders of the Company (the "Written Consent").
A copy of the Written Consent is attached as Annex A to this Information
Statement.
The Written Consent contains resolutions consenting to the execution and
performance by the Company of the Purchase Agreement and two related Real Estate
Purchase and Sale Agreements, each dated February 24, 2000, entered into by the
Company and Stephen R. Smith, a private investor from Austin, Texas (hereinafter
referred to collectively as the "Agreement"), pursuant to which the Company will
sell its Lajitas Resort and two adjoining tracts of land in west Texas
("Lajitas") for $3,950,000 in cash. Lajitas constitutes substantially all of the
Company's assets.
Management of the Company is utilizing the Written Consent in order to
reduce the expense and demands on the Company's executives' time necessitated by
the holding of a Special Meeting of Stockholders, since the Company has received
an executed Written Consent from several of the Company's significant
stockholders who together represent 64.5% of the issued and outstanding shares
of the Company's $1.00 par value common stock, thereby ensuring that a majority
of the stockholders of the Company have consented to the transactions
contemplated by the Agreement.
The Written Consent will be effective 21 days from the date this
Information Statement is first mailed to stockholders.
Unless the Agreement is terminated pursuant to its terms, the closings
under the Agreement will take place March 31, 2000, or as promptly as
practicable thereafter as the various conditions set forth in the Agreement have
been satisfied or waived.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
This Information Statement is dated March 10, 2000 and is first being
mailed to Stockholders on or about March 10, 2000.
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STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THIS INFORMATION STATEMENT AND THE
ANNEXES HERETO IN THEIR ENTIRETY. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
THE COMPANY
Southern Investors Service Company, Inc., was incorporated under the laws of the
State of Delaware in 1972. Prior to 1990, the Company was engaged in the
ownership and development of real estate, primarily in and around Houston,
Texas. The operations of the Company were significantly reduced during 1990,
however, as a result of various debt settlements with lenders and other
creditors. Under these settlements, the Company transferred substantially all
of its holdings to its creditors. The Company, nevertheless, continued to
manage residential developments and two office buildings owned by others until
1998. The majority of these residential developments were sold, though, in 1998
and, effective January 1, 1999, the Company ceased all management activity.
Since then, the Company's primary activity has been the operation of a resort
property in west Texas known as Lajitas, the Company's last remaining operating
asset. The Company has principal executive offices located at 2727 North Loop
West, Suite 200, Houston, Texas 77008 (tel: 713-869-7800).
DISSENTERS' RIGHT OF APPRAISAL
Under the Delaware General Corporation Law ("DGCL"), holders of the Company's
Common Stock are not entitled to dissenters' appraisal rights in connection with
the sale of substantially all of the assets of the Company.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
As of February 21, 2000, there were 3,168,929 outstanding shares of $1.00 par
value Common Stock of the Company, each of which is entitled to one vote for the
purpose of approving the sale of substantially all of the assets of the Company.
Stockholders of record at the close of business on February 21, 2000 (the date
of the Written Consent) are being furnished copies of this Information
Statement.
To the best knowledge of the Company, the following table sets forth all persons
beneficially owning more than 5% of the Common Stock at February 21, 2000.
Unless otherwise indicated, each of the following persons may be deemed to have
sole voting and dispositive power with respect to such shares.
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<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNER OF CLASS
- ------------------------------------ ---------------- --------
<S> <C> <C>
Walter M. Mischer......................................... 915,240(a) 28.88%
2727 North Loop West, Suite 200
Houston, Texas 77008
FCLT Loans, L.P........................................... 805,156 25.41%
1021 Main St., Suite 250
Houston, Texas 77002
John D. Weil.............................................. 335,695(b) 10.59%
200 North Broadway, Suite 825
St. Louis, Missouri 63102
Texas Commerce Bank National Association.................. 307,549 9.71%
P. O. Box 2558
Houston, Texas 77252
</TABLE>
__________
(a) The number of shares of the Common Stock set forth as being beneficially
owned by Mr. Mischer includes 2,250 shares of Common Stock that Mr. Mischer
holds as custodian for his grandchildren.
(b) The number of shares of Common Stock set forth as being beneficially owned
by Mr. Weil includes 308,695 shares of Common Stock held by Mr. Weil and
27,000 shares of Common Stock held by trusts of which Mr. Weil is the
trustee.
The following table sets forth certain information, as of February 21, 2000,
concerning the ownership of shares of Common Stock by the directors and certain
executive officers of the Company and by all directors and executive officers of
the Company as a group:
<TABLE>
<CAPTION>
DIRECTOR OR AMOUNT AND NATURE OF
EXECUTIVE OFFICER TITLE BENEFICIAL OWNER(a) PERCENT OF CLASS
----------------- ----- -------------------- -------------------
<S> <C> <C> <C>
Walter M. Mischer Chairman of the Board & Chief 915,240(b) 28.9%
Executive Officer; Director
Walter M. Mischer, Jr. President & Chief Operating 19,044(c)(d) (e)
Officer; Director
John D. Weil Director 335,695(f) 10.6%
All Directors and executive
officers as a group 1,269,979 40.1%
</TABLE>
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__________
(a) Except as otherwise described herein, each director or executive officer
may be deemed to have sole voting and dispositive power with respect to his
shares.
(b) Includes 2,250 shares held by Mr. Mischer as custodian for his
grandchildren.
(c) Includes 50 shares held by Mr. Mischer, Jr. as custodian, and 800 shares
held by trusts of which Mr. Mischer, Jr. serves as co-trustee and as to
which he shares voting and dispositive power.
(d) Does not include 120,548 shares of Common Stock held by the Walter M.
Mischer, Jr. 1972 Trust. Mr. Mischer, Jr. is the sole beneficiary of such
trust, but does not exercise any voting or dispositive power with respect
to any securities held by such trust.
(e) Less than 1%.
(f) Includes 27,000 shares of Common Stock held by trusts of which Mr. Weil is
trustee.
THE PROPERTY
The town of Lajitas is a complete, full-service frontier resort town situated on
approximately 3,000 acres overlooking the Rio Grande River. Lajitas consists of
the resort town and approximately 19,000 acres of adjoining land located in the
southwest portion of Brewster County, Texas, adjacent to the western border of
Big Bend National Park. The development includes a hotel, condominiums, a
restaurant, meeting rooms, various shops and other facilities in a number of
separate one and two-story buildings. The development also has ancillary site
improvements consisting of a nine-hole golf course, recreational vehicle park,
swimming pool, tennis courts, landing strip and an airplane hangar. In
addition, the development includes housing for employees of the resort, some of
which is owned by Walter M. Mischer and not by the Company. Such housing will
be sold by Mr. Mischer to the Company immediately prior to the Closing in order
to permit the Company to sell such housing with the rest of Lajitas. See "The
Transaction - Consideration; Interests of Certain Persons in the Transaction."
THE TRANSACTION
The Company is selling Lajitas to Stephen R. Smith, a private investor from
Austin, Texas (the "Buyer"), pursuant to the Agreement. Mr. Smith serves as a
member of the board of directors of Teleglobe Inc., a Canadian corporation. Mr.
Smith's address is 16004 Chateau Avenue, Austin, Texas 78734. Under the DGCL,
the transaction requires the approval of the holders of a majority of the issued
and outstanding shares of Common Stock of the Company. Holders of the Company's
Common Stock are not entitled to dissenters' appraisal rights under the DGCL in
connection with the sale of Lajitas.
As of February 21, 2000 (the date of the Written Consent), there were 3,168,929
shares of Common Stock of the Company issued and outstanding. Stockholders
representing no fewer than 1,584,465 shares of Common Stock are, therefore,
required to execute the Written Consent
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to effect the matters set forth herein. Stockholders of record at the close of
business on February 21, 2000 are being furnished copies of this Information
Statement.
Walter M. Mischer, Sr. (with respect to 912,990 shares), Walter M. Mischer, Jr.
(with respect to 18,194 shares), John D. Weil, (with respect to 286,695 shares
in his individual capacity and 22,000 shares as Trustee of the John D. Weil
Trust), and FCLT Loans, LP (with respect to all of its shares), together
representing 2,045,035 shares of Common Stock, or 64.5% of the issued and
outstanding Common Stock of the Company, have executed the Written Consent. The
Written Consent will be effective 21 days from the date this Information
Statement is first mailed to Stockholders. This Information Statement is first
being mailed to Stockholders on or about March 10, 2000.
Unless the Agreement is terminated pursuant to its terms, the closing under the
Agreement shall take place March 31, 2000, or as promptly as practicable
thereafter as the various conditions set forth in the Agreement have been
satisfied or waived.
REASONS FOR THE TRANSACTION
As a result of the Company's operational losses in recent years, the Company's
management has from time to time considered several options to generate cash at
sufficient levels to meet operating needs and increasing debt obligations.
These options have included efforts to reduce operating expenses (including
interest), attempts to increase revenues of the Company's resort development,
negotiations with various creditors to settle accounts for cash payments at
substantially lower amounts than the amounts due, the settlement of liabilities
through the transfer of assets to creditors in satisfaction of their claims, and
a possible plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Although there have been sporadic efforts to sell Lajitas in the past, only a
few potential buyers ever seriously examined the property or conducted any due
diligence. With debt that had matured and was currently due totaling more than
$4,772,000, the Company determined in late 1999 that the sale of Lajitas, its
sole remaining operating asset, would facilitate the Company's ability to settle
its existing liabilities most favorably. The Company's decision to sell Lajitas
at this time was also influenced by its perception that a strong marketplace
currently favors sellers of specialty properties. After considering the
efficacy of the Company's past efforts and reviewing sales of other specialty
properties, the Company determined that the best alternative would be to sell
the property through an auction process. As a result, the Company retained the
National Auction Group, Inc., ("National Auction") to conduct an auction of
Lajitas on February 24, 2000.
National Auction is a company specializing in the auction sales of unique, high-
end real estate with values in excess of $1 million. National Auction recently
sold Beaver Dam Farms, the former estate of country singer Kenny Rogers, and has
sold sizeable ranches that belonged to Ross Perot and former Secretary of the
United States Treasury Lloyd Bentsen. National Auction has its headquarters at
1411 Rainbow Drive, Gadsden, Alabama 35901 (tel: 256-547-3434).
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In order for the Company to convey free and clear title to the Buyer,
approximately $700,000 of the proceeds from the auction sale of Lajitas will be
used to pay off indebtedness to Walter M. Mischer that is secured by part of the
property. The remaining proceeds will be retained by the Company while it
considers whether to continue negotiations with creditors to settle its debts
for cash payments of substantially lower amounts than the amounts due or to file
for protection under the U.S. Bankruptcy Code. The Company believes that it is
unlikely that the net proceeds from the sale of Lajitas will exceed the
Company's indebtedness that will remain outstanding following the transaction
and, as a result, it is also unlikely that any funds will be available for
distribution to shareholders regardless of which of these courses of action is
pursued by the Company. See "- Consideration; Interests of Certain Persons in
the Transaction."
CONSIDERATION; INTEREST OF CERTAIN PERSONS IN THE TRANSACTION
Under the Agreement, upon the Closing, the Company will receive an aggregate of
$3,950,000 in cash from the Buyer.
The Board of Directors of the Company believes this consideration to be fair
based on (i) the Company's inquiries regarding historical sales prices for
undeveloped acreage similar to the undeveloped acreage included in Lajitas (ii)
the Company's discussions with National Auction regarding its opinion of the
possible range of sales prices for the property and (iii) the nature of the
auction process, including the fact that the sale was subject to a minimum bid
and was widely advertised in national newspapers, local newspapers and business
journals in Texas and Los Angeles, and other publications such as Hotel & Motel
Management, the Robb Report, Millionaire Magazine and Unique Homes.
Approximately 55% of the Lajitas real estate is subject to a mortgage in favor
of Walter M. Mischer, who is the Chairman of the Board and Chief Executive
Officer of the Company. The mortgage secures approximately $712,000 of
indebtedness to Mr. Mischer, consisting of $497,000 of principal and
approximately $215,000 of accrued interest at February 25, 2000. It will be
necessary for the Company to use a portion of the proceeds of the sale of
Lajitas to repay this indebtedness in order to remove the mortgage lien from the
property and convey free and clear title to the Buyer.
As part of the property being sold pursuant to the Agreement, the Buyer will
purchase a portion of the employee housing at the resort currently owned by Mr.
Mischer. Mr. Mischer has agreed to sell this housing to the Company immediately
prior to the Closing for $275,000, which amount represents the actual cost
incurred by Mr. Mischer in connection with the construction thereof. Mr.
Mischer agreed to provide such employee housing for Lajitas at a time when the
Company was unable to finance its construction on acceptable terms.
Following the Closing and the repayment of the indebtedness to Mr. Mischer that
is secured by a portion of Lajitas, the Company's outstanding indebtedness is
expected to be approximately $7.3 million. Of this amount, approximately $3.3
million will be owed to Mr. Mischer (consisting of approximately $3 million of
unsecured notes and $300,000 of notes secured by certain notes receivable and
the Company's 6% interest in an office building) and approximately $1.7 million
will be owed to John Weil, a member of the Company's Board of Directors. All of
the
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indebtedness to Mr. Weil is unsecured. The Company is unable to predict the
outcome of any settlement discussions with its creditors or the application of
its assets in connection with a possible proceeding under the U.S. Bankruptcy
Code following the proposed transaction, but expects that a substantial portion
of any proceeds remaining after the sale of Lajitas and payment of expenses
incurred in pursuing one or both of these options may ultimately be paid to Mr.
Mischer and Mr. Weil.
ACCOUNTING AND TAX TREATMENT
The Company has substantial net operating loss carry forwards and therefore
anticipates that no federal income tax will be payable as a consequence of the
transaction. The transaction will be recorded as a sale with no special
accounting treatment by the Company.
THE AGREEMENTS
The following is a summary of the material terms of the Purchase Agreement and
the two Real Estate Purchase and Sale Agreements (the "REPSAs"). The summary is
qualified in its entirety by reference to the Purchase Agreement and the REPSAs,
copies of which are attached hereto as Annex B and Annexes C-1 and C-2,
respectively. Unless otherwise indicated, all capitalized terms in this section
are as defined in the Purchase Agreement or the REPSAs, as applicable.
The Buyer will pay to the Company $3,950,000 (the "Purchase Price") by wire
transfer of immediately available funds to a title company at the Closing. The
Buyer will pay National Auction a fee in the amount of $296,250 (7.5% of the
Purchase Price), $162,000 of which will be paid by National Auction to the
Company as reimbursement for advertising expenses, which amount will be credited
at Closing toward payment of the Purchase Price. The Company will pay National
Auction a commission equivalent to 6% of the proceeds it receives from the
transaction. The Buyer has deposited ten percent of the Purchase Price as
Earnest Money with the title company.
PURCHASE AND SALE OF ASSETS
The Company will sell and transfer its right, title and interest in the
business, assets, properties and rights listed as transferred assets in the
Purchase Agreement. Such transferred assets comprise the assets and real
property of the resort and town of Lajitas, excluding, among other items,
certain receivables and the two adjoining tracts of land that are covered by the
separate REPSAs. The transferred assets also include all of the outstanding
capital stock of Lajitas Utility Co., Inc., which company provides water and
related utility services to the resort and town.
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ASSUMED LIABILITIES
As part of the transaction, the Buyer will assume the assumed liabilities at the
Closing. The assumed liabilities include (i) the obligation to honor guest
deposits paid to the Company on or before the Closing Date; (ii) all trade
payables incurred on or before the Closing Date to the extent they remain unpaid
by such date; (iii) certain tax obligations; (iv) accrued but unused vacation
time of the employees of Lajitas; and (v) the obligation to provide services to
guests of the resort on the Closing Date.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The representations and warranties to the Buyer made by the Company under the
Purchase Agreement cover: (i) incorporation, existence and good standing; (ii)
validity of the agreement; (iii) title; (iv) contracts and commitments; (v)
litigation; (vi) financial statements and business in the ordinary course; (vii)
employees; (viii) condition of the assets; and (ix) finder's fees.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The representations and warranties to the Company made by the Buyer under the
Purchase Agreement cover: (i) incorporation, existence and good standing; (ii)
validity of the agreement; (iii) Texas Deceptive Trade Practices Act waiver and
investigation; and (iv) finder's fees.
CONDITIONS TO THE OBLIGATIONS OF THE BUYER
As of the Closing Date, the obligation of Buyer to purchase Lajitas under the
Purchase Agreement will be subject to several conditions, including the
following, any of which may be waived by the Buyer in writing: (i) the accuracy
of the representations and warranties of the Company; (ii) the execution and
delivery of certain ancillary documents by the Company, including a special
warranty deed, bill of sale, assignment and assumption agreement, various
certificates, and a closing statement; (iii) the absence of current litigation
affecting the transaction; and (iv) review of the purchase of the shares of
Lajitas Utility Company by the Texas Natural Resource Conservation Commission
(the "TNRCC").
CONDITIONS TO THE OBLIGATIONS OF THE SELLER
As of the Closing Date, the obligation of Company to sell Lajitas under the
Purchase Agreement will be subject to several conditions, including the
following, any of which may be waived by the Company in writing: (i) the
accuracy of the representations and warranties of the Buyer; (ii) the execution
and delivery of certain ancillary documents by the Buyer, including an
assignment and assumption and a certificate of sales tax exemption; (iii) the
absence of current litigation affecting the transaction; (iv) receipt of
compliance with TNRCC review provisions; and (v) the approval, as required under
applicable law, of the transaction by the Company's stockholders.
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INDEMNIFICATION
Under the Purchase Agreement, the Company agrees to indemnify the buyer from
breaches of representations and covenants, subject to a deductible of $10,000
and a cap of $100,000. The cap for a breach of the title representation is
$200,000. Seller's overall obligation for all indemnification is $200,000.
Indemnification by Seller with respect to representations and covenants is
subject to a time period of 180 days.
TERMINATION
The obligation to close the transaction under the Purchase Agreement may be
terminated (i) by mutual agreement of the buyer and the Company; (ii) by either
party upon material default or failure to cure a breach by the other party;
(iii) if the transaction does not close within a certain time period; or (iv) if
the Company pays the buyer a termination fee to terminate the transaction upon
recommendation of the board of directors consistent with its fiduciary
obligations to the stockholders of the Company. Such fiduciary obligations of
the directors may be triggered if the Company receives a bona fide offer to
purchase Lajitas that is higher than the Purchase Price. If the Buyer does not
match the higher offer within 48 hours after notification of such offer, the
Company may pay the greater of $50,000 or 5% of the difference between the
amount of the other offer and the Purchase Price to terminate its agreement with
the existing Buyer.
REAL ESTATE PURCHASE AND SALE AGREEMENTS
The sale of two tracts of land adjacent to the Lajitas town and resort is
governed by two substantially similar Real Estate Purchase and Sale Agreements
("REPSAs"). The first REPSA, for the "North Tract," relates to approximately
6,330 acres to be conveyed by special warranty deed and approximately 940 acres
to be conveyed by quit claim deed. The second REPSA, for the "South Tract,"
relates to approximately 8,513 acres to be conveyed by special warranty deed
and approximately 3,430 acres to be conveyed by quit claim deed.
Under the REPSAs, the Company represents that (i) it has the full right, power
and authority to enter into the agreement; (ii) the person(s) executing the
agreement on its behalf are fully authorized; (iii) it has received no notice
and has no knowledge of any pending condemnation proceedings or litigation that
would constitute a lien, claim or material obligation against the property;
(iv) it has no actual knowledge of any person firm or entity having any rights
in the property or right to acquire the property; and (v) the sale of the
property will not cause any withholding liability to be imposed on the buyer
pursuant to Section 1445 of the Internal Revenue Code.
The buyer represents and warrants that it has thoroughly and carefully inspected
the property and agrees to purchase the property "as is, where is," and "with
all faults, if any."
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AVAILABLE INFORMATION
The Company is subject to the information filing requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy and information statements and other information with the SEC. The
reports, proxy and information statements and other information filed by the
Company with the SEC may be inspected and copied at the public reference
facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549-1004 and at the following regional offices of
the SEC: Midwest Regional Office, Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and Northeast Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048. Copies of such information
should be obtained by mail, upon payment of the SEC's customary charges, by
writing to the SEC's principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549-1004. Such material should also be
available on-line through EDGAR, which is located on the SEC's public access
site at http://www.sec.gov.
------------------
The Securities and Exchange Commission allows the Company to
"incorporate by reference" information into this Information Statement. The
information incorporated by reference is considered to be part of this
Information Statement, except for any information modified or superseded by
information in (or incorporated by reference in) this Information Statement.
This Information Statement incorporates by reference the documents set forth
below that have been previously filed with the Securities and Exchange
Commission. The documents contain important information about the Company and
its finances.
SOUTHERN INVESTORS SERVICE COMPANY, INC., SECURITIES AND EXCHANGE COMMISSION
FILINGS (FILE NO. 0-04863)
1. Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998,
filed by the Company on March 30, 1999.
2. Quarterly Report on Form 10-QSB for the period ended September 30, 1999,
filed by the Company on November 12, 1999.
The Company will provide, without charge, a copy of any or all of the
documents incorporated by reference in this information statement (other than
exhibits to such documents, unless the exhibits are specifically incorporated by
reference in such documents). You may obtain documents incorporated by reference
in this information statement by requesting them in writing or by telephone from
the appropriate party at the following address:
Southern Investors Services Company, Inc.
2727 North Loop West
Suite 200
Houston, Texas 77008
Attn: Eric Schumann
(713) 869-7800
Statements contained in this Information Statement or in any document
incorporated in this Information Statement by reference as to the contents of
any contract or other document referred to herein or therein are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed as an Annex to this Information Statement or such other
document, each such statement being qualified in all respects by such reference.
ANNEXES
Annex A - Written Consent dated February 21, 2000.
Annex B - Purchase Agreement, dated as of February 24, 2000, between the
Company and Buyer.
Annex C-1 - Real Estate Purchase and Sale Agreement, dated as of
February 24,2000, between the Company and Buyer.
Annex C-2 - Real Estate Purchase and Sale Agreement, dated as of February 24,
2000, between the Company and Buyer.
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SOUTHERN INVESTORS SERVICE COMPANY, INC.
WRITTEN CONSENT OF STOCKHOLDERS
IN LIEU OF SPECIAL MEETING
Pursuant to the provisions of Section 228 of the Delaware General
Corporation Law, the undersigned stockholders of Southern Investors Service
Company, Inc., a Delaware corporation (the "Company"), do hereby adopt the
following resolutions in lieu of holding a special meeting of stockholders.
This Written Consent, executed as of February 21, 2000, shall become effective
21 days after the transmittal of a definitive information statement to
stockholders, pursuant to Section 240.14c-2 of the Securities Exchange Act of
1934.
WHEREAS, the Company wishes to sell its Lajitas Resort and two
adjoining tracts of land (each of which is referred to herein separately as
a "Component Part" and all of which are referred to collectively as
"Lajitas") pursuant to the terms and conditions in those certain forms of
Purchase Agreement and Real Estate Purchase and Sale Agreement attached
hereto as Exhibits A and B, respectively, subject to such changes therein
as may be agreed to by the Company and the buyer(s) of the Component Parts
of Lajitas; and
WHEREAS, the Board of Directors of the Company has determined that the
most favorable method for disposing of Lajitas is through an auction sale
conducted by the National Auction Group, Inc.; and
WHEREAS, Lajitas comprises substantially all of the assets of the
Company; and
WHEREAS, the stockholders of the Company wish to approve the sale of
any one or more of the three Component Parts of Lajitas at auction to as
many as three independent buyers for minimum acceptable bid prices;
NOW, THEREFORE, BE IT:
RESOLVED, that the undersigned stockholders of the Company hereby
approve the sale of each of the Component Parts of Lajitas to as many as
three independent buyers who bid in cash at least $2,500,000 for the resort
and town, $300,000 for the adjoining tract of land comprising approximately
7,700 acres, and $600,000 for the adjoining tract of land comprising
approximately 10,000 acres together with an adjacent parcel of
approximately 4,500 acres and who agree to purchase the Component Parts of
Lajitas pursuant to the terms and conditions of the
<PAGE>
Purchase Agreement attached hereto as Exhibit A or the Real Estate Purchase
and Sale Agreement attached hereto as Exhibit B, as applicable, subject to
such changes therein as the officers of the Company may, in their best
judgment, deem necessary, desirable or advisable in order to reach an
agreement with the buyer(s); and further
RESOLVED, that all lawful actions to be taken by the officers and
directors of the Company with regard to negotiating, executing and handling
the sale of Lajitas be, and they hereby are, ratified, confirmed and
approved in all respects.
This document may be executed in any number of counterparts, each of which
shall for all purposes be deemed an original, and all such counterparts together
shall constitute one and the same document.
/s/ WALTER M. MISCHER, SR.
----------------------------------------
Walter M. Mischer, Sr.
720,240 shares
/s/ WALTER MISCHER
----------------------------------------
Walter Mischer
158,650 shares
/s/ WALTER MISCHER, SR.
----------------------------------------
Walter Mischer, Sr.
34,100
/s/ WALTER M. MISCHER, JR.
----------------------------------------
Walter M. Mischer, Jr.
18,194 shares
FCLT LOANS, LP
By: FCLT Loans Asset Corp.,
General Partner
/s/ CHRIS O'MARA
----------------------------------------
By: Chris O'Mara
Its: Vice President
805,156 shares
/s/ JOHN D. WEIL
----------------------------------------
John D. Weil
286,695 shares
/s/ JOHN D. WEIL
----------------------------------------
John D. Weil, Trustee for the
John D. Weil Trust
22,000 shares
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
----------------------------------------
By: ____________________________________
Its: ___________________________________
307,549 shares
<PAGE>
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered in to as of
February 24, 2000, by and between Southern Investors Service Company, Inc., a
Delaware corporation (the "Seller"), and the Person named as the Buyer (the
"Buyer") on the Transaction Schedule attached hereto.
WITNESSETH:
WHEREAS, the Seller desires to transfer to the Buyer the Transferred Assets
(as hereinafter defined) which are used in connection with the operation of the
resort commonly referred to as "Lajitas" (the "Business") and certain
obligations and the Buyer desires to acquire such Transferred Assets and assume
such obligations, all upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the parties hereto desire to set forth certain representations,
warranties and agreements, all as more fully set forth below;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements contained herein, the parties hereto agree as follows
(all capitalized terms not otherwise defined in this Agreement shall have the
meanings given to them in Article 9 of this Agreement):
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Transferred Assets. Subject to the terms and conditions of this
Agreement and in consideration of the obligations of the Buyer as provided
herein, and except as otherwise provided in Section 1.2 of this Agreement, at
the Closing, the Seller shall sell, assign, transfer, grant, bargain, deliver
and convey to the Buyer the Seller's right, title and interest in, to and under
the assets, properties and rights listed below (all of such assets, properties,
rights and business being hereinafter sometimes collectively referred to as the
"Transferred Assets"):
(a) the real property described in Schedule 1.1-A together with the
improvements thereon (collectively referred to as the "Town and Resort Real
Property");
(b) all machinery, vehicles, transportation equipment, tools, equipment,
supplies, furnishings, books and records and other tangible personal property
owned by the Seller and used exclusively in the Business as operated by the
Seller as of the Closing Date (the "Equipment"), including, without limitation,
the Equipment described in Schedule 1.1 to this Agreement;
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(c) all inventories of goods (including food, beverages and lumber) held
exclusively for sale or lease in the Business which are owned by the Seller as
of the Closing Date (the "Inventories"), but excluding alcoholic beverages;
(d) all accounts receivable (excluding (i) amounts receivable from credit
card companies with respect to credit card charges made by Persons on or before
the Closing Date and by Persons who check out from the resort on the Closing
Date and (ii) amounts owed to the Seller by Persons from sales from the lumber
and hardware store on or before the Closing Date) not collected on or before
Closing Date generated exclusively from the Business (the "Accounts
Receivable");
(e) all prepaid expenses and deposits paid by the Seller prior to the
Closing Date relating exclusively to the Business;
(f) the Seller's rights under the Assumed Contracts;
(g) all tradenames, trademarks and service marks owned and used by the
Seller exclusively in the Business (including those listed on Schedule 1.1),
together with any goodwill associated with the Business, the telephone numbers
in Lajitas used by Seller in the Business and the world wide web site
"Lajitas.com";
(h) all of the issued and outstanding shares of capital stock ("Lajitas
Utility Shares") of Lajitas Utility Co., Inc., a Texas corporation ("Lajitas
Utility");
(i) cash on hand in Seller's cash registers at Lajitas on the Closing Date
held in the ordinary course of business; and
(j) rights of the Seller to withdraw water from the Rio Grande River
pursuant to the certificate of adjudication described on Schedule 1.1.
1.2 Excluded Assets. Notwithstanding anything in Section 1.1 to the
contrary, the Transferred Assets shall not include those assets of the Seller
listed or described in Schedule 1.2 to this Agreement (collectively, the
"Excluded Assets").
1.3 Closing. Subject to the conditions set forth in this Agreement, the
Closing shall take place at the offices of the Title Company, Houston, Texas, at
9:00 a.m. on March 31, 2000, or at such other time, date and place as the
parties hereto shall mutually agree upon in writing (the "Closing Date").
Failure to consummate the transactions contemplated hereby on such date shall
not result in a termination of this Agreement or relieve any party hereto of any
obligation hereunder. Title to, ownership of, control over and risk of loss of
the Transferred Assets, and obligations to perform the Assumed Liabilities,
shall pass to the Buyer at the Closing.
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1.4 Purchase Price for the Assets.
(a) In consideration of the transfer to the Buyer of the Transferred
Assets, at Closing the Buyer shall (i) pay to the Seller the Cash Purchase Price
described on the Transaction Schedule (the "Cash Purchase Price") by wire
transfer of immediately available funds to the Title Company and (ii) assume the
Assumed Liabilities. The Cash Purchase Price and the Assumed Liabilities are
herein collectively referred to as the "Purchase Price."
(b) At the Closing, the Buyer shall also pay to The National Auction Group,
Inc. ("NAG") by wire transfer of same day funds to the Title Company an amount
(the "Auction Fee") equal to 7.5% of the Cash Purchase Price.
1.5 Assumed Liabilities; Liabilities Not Assumed by the Buyer.
(a) At Closing, the Buyer shall assume all of the following (collectively,
the "Assumed Liabilities"):
(i) the Seller's obligations under each of the contracts and agreements
described in Schedule 1.5 (collectively, the "Assumed Contracts") to the extent
related to periods before, on or after the Closing Date;
(ii) the obligation to honor all deposits paid to the Seller in connection
with the Business by Persons on or before the Closing Date (the "Assumed Guest
Deposits"), including by refunding such deposits or applying such deposits
against invoices, in each case in accordance with the Seller's policy on guest
deposits;
(iii) except for the utilities as described in clause (i) of Section
1.6(b), all trade payables (including the utilities described in clause (ii) of
Section 1.6(b)) incurred by the Seller in the ordinary course of the Business on
or before the Closing Date to the extent not paid by the Seller in the ordinary
course of business on or before the Closing Date;
(iv) the obligation to pay those Taxes which relate to periods on or before
the Closing Date to the extent the Seller receives a credit against the Cash
Purchase Price or receives a payment from the Buyer pursuant to Section 1.6(a);
(v) all accrued but unused vacation time of the employees of the Business;
and
(vi) the obligation to provide services to guests staying at the resort on
the Closing Date.
(b) Except for the Assumed Liabilities, the Buyer shall not assume any
liabilities, debts or obligations related to or arising from the conduct or
operation of the Business prior to the Closing Date.
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(c) The Seller in the ordinary course of business has given to guests and
other Persons incentive coupons (designated as "Lajitas Bucks") providing for a
$14 discount on hotel/motel rooms for a one night stay or $28 discount on
hotel/motel rooms for a two night stay, excluding certain dates and subject to
availability. Further information regarding the Lajitas Buck program is
contained in an attachment to Schedule 1.5. If, after Closing, Buyer does not
honor any Lajitas Bucks issued prior to Closing, the Buyer hereby releases,
acquits and forever discharges the Seller from, and indemnifies and holds the
Seller harmless against, any claims made by any Person resulting from the
Buyer's not honoring such Lajitas Bucks.
(d) From and after Closing, Lajitas Utility shall remain liable for its own
obligations (contractual or otherwise), debts and liabilities (including,
without limitation, those relating to periods on or prior to Closing), and the
Seller shall have no liability for such obligations, debts and liabilities.
1.6 Prorations; Utilities.
(a) Any general property Tax assessed against or pertaining to the Town and
Resort Real Property for the taxable period that includes the Closing Date shall
be prorated between the Buyer and the Seller as of the Closing Date. In the
event the amount of any such general property Tax cannot be ascertained as of
the Closing Date, proration shall be made on the basis of the preceding year,
the Buyer shall receive a credit against the Cash Purchase Price on the Closing
Date for the Seller's pro rata portion of such general property Taxes, and to
the extent that such proration may be inaccurate the Seller and the Buyer agree
to make such payment to the other after the tax statements have been received as
is necessary to allocate such general property Tax properly between the Seller
and the Buyer as of the Closing Date.
(b) (i) Prior to the Closing Date, the Buyer will request final meter
readings and bills from the gas, electric, telephone and satellite television
companies providing service to the Business bills, in each case as of the
Closing Date (or as of a date before the Closing Date but as close as is
practicable to the Closing Date). The Seller will be responsible for paying
such final bills, and the Buyer shall pay for all gas, electric, telephone and
satellite television service after the respective dates of such final bills.
(ii) The Buyer shall assume and pay to Lajitas Utilities all amount owed by the
Seller to Lajitas Utility.
(c) From and after Closing, the Seller shall forward promptly to the Buyer
any payments received by the Seller with respect to any Accounts Receivable sold
to the Buyer as part of the Transferred Assets..
1.7 Transfer Taxes; Recording Fees.
(a) The Buyer shall pay any and all sales Taxes imposed as a result of the
consummation of the transactions contemplated by this Agreement and the Buyer
hereby agrees to indemnify the
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Seller against, and agrees to protect, save and hold the Seller harmless from,
any loss, liability, obligation or claim (whether or not ultimately successful)
for sales Taxes (and any interest, penalties, additions to tax and fines thereon
or related thereto) imposed as a result of the consummation of the transactions
contemplated by this Agreement.
(b) The Buyer shall pay any and all recording, filing or other fees
relating to the conveyance or transfer of the Transferred Assets from the Seller
to the Buyer; provided that the Seller will pay recording fees for the recording
of the deed delivered by the Seller pursuant to Section 5.2(a).
(c) The Buyer shall deliver to the Seller on the Closing Date a certificate
certifying that the Inventories are being purchased for resale.
1.8 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Transferred Assets as agreed in writing by the Seller and Buyer on or
before the Closing Date (each acting reasonably) subject the following:
(a) such allocation of the Purchase Price will be reflected in Form 8594
(or any successor form) that will be filed by the Buyer and the Seller in
accordance with Section 1060 of the Code; and
(b) the Buyer and the Seller agree to treat and report in filings under the
Code (and, if necessary, to cause each of their respective Affiliates to so
treat and report) the transactions contemplated by this Agreement in a manner
consistent with one another.
1.9 Earnest Money. On the date hereof, Purchaser has deposited with
Stewart Title Company ("Title Company") at 1111 Bagby Street, Suite 2000,
Houston, Texas, 77002 Attn: George Houghton, (phone 713-651-0810), by delivery
of a check(s) (supported by sufficient funds and to be cashed immediately) or by
wire transfer the amount specified in the Transaction Schedule as earnest money
(such amount, together with any addition thereto and interest earned thereon, is
called the "Earnest Money"). The Earnest Money may be invested by the Title
Company in U.S. government obligations or federally insured certificates of
deposit or deposit accounts at the direction of Purchaser. The Title Company
shall pay the Earnest Money to the Seller at and upon the Closing, or otherwise,
to the party entitled to received the Earnest Money in accordance with this
Agreement. The parties shall execute such certificates and other written
confirmations as the Title Company may reasonably require with regard to the
disposition of the Earnest Money in accordance with this Agreement. The Buyer
and the Seller shall each pay one-half of the fees and expenses of the Title
Company in holding and disbursing the Earnest Money pursuant to this Agreement.
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
Except as otherwise set forth in the Schedules to this Agreement, the
Seller represents and warrants to the Buyer as follows:
2.1 Corporate Matters. The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified and in good standing to transact business in the State of
Texas. Lajitas Utility is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Texas. The Seller has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations under this Agreement. The Seller is the sole shareholder
of Lajitas Utility.
2.2 Validity of Agreement
(a) Subject to stockholder approval as described in Section 6.7, this
Agreement, and the transactions contemplated hereby, have been duly authorized
and approved by all necessary corporate action on the part of the Seller. No
further corporate actions are necessary on the part of the Seller to execute and
deliver this Agreement or, except for receipt of stockholder approval as
described in Section 6.7, to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Seller and is a
legal, valid and binding obligation of the Seller enforceable against the Seller
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect that affect creditors' rights generally and by legal
and equitable limitations on the availability of specific remedies.
(b) The execution, delivery and performance of this Agreement and the other
agreements and documents to be delivered by the Seller to the Buyer, the
consummation of the transactions contemplated hereby or thereby, and the
compliance with the provisions hereof and thereof, by the Seller will not
conflict with the Certificate of Incorporation or Bylaws of the Seller.
2.3 Title. At Closing, the Seller will deliver (a) a special warranty of
title to the Town and Resort Real Property as set forth in the form of special
warranty deed attached hereto as Exhibit A, (b) a stock power substantially in
the form of Exhibit B hereto transferring good title to the Lajitas Utility
Shares, and (c) a special warranty of title to the other Transferred Assets
(other than the Real Property) as set forth in the form of the bill of sale and
assignment and assumption in Exhibits C and D and D-1, respectively.
2.4 Contracts and Commitments.
(a) Schedule 2.4 lists each Assumed Contract, and each contract to which
Lajitas Utility is a party, requiring the expenditure or series of related
expenditures of funds after Closing in excess
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of $50,000.00, excluding any Assumed Contract, and any contract to which Lajitas
Utility is a party, that is terminable without penalty or cost on not more than
30 days' prior written notice.
(b) To the Seller's Knowledge, the Seller is not in breach of any provision
of, or in default under the terms of, any of the Assumed Contracts that
constitute a part of the Transferred Assets, in each case which would reasonably
be expected to have a Material Adverse Effect.
2.5 Litigation. Except as set forth on Schedule 2.5, there is no action,
suit, or other legal proceeding pending or, to the Seller's Knowledge,
threatened against or affecting the Business or Lajitas Utility, at law or in
equity, before or by any governmental entity which would reasonably be expected
to have a Material Adverse Effect.
2.6 Income Statements; Ordinary Course.
(a) Schedule 2.6 sets forth the unaudited income statement of each of the
Business and Lajitas Utility as of December 31, 1999 for the twelve month
period then ended. Such unaudited income statements fairly present in all
material respects the unaudited results of operation of each of the Business
and Lajitas Utility for the period covered thereby.
(b) Since December 31, 1999, each of the Business and Lajitas Utility has
been operated in the ordinary course of business, consistent with past practices
(except to the extent affected by the process of selling the Transferred
Assets).
2.7 Employees. Attached hereto as Schedule 2.7 is a true and correct list
of the employees of the Business as of January 15, 2000. Lajitas Utility has no
employees, although certain of the employees of the Business provide services to
Lajitas Utility and Lajitas Utility is charged for an allocable portion of such
employees' compensation. Neither the Seller nor Lajitas Utility provides any
health, medical or other insurance (other than workers' compensation) for any of
such employees.
2.8 Condition of Assets. Except as expressly provided herein, the Seller
makes NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE MAINTENANCE,
REPAIR, CONDITION, DESIGN, WORKMANSHIP, SUITABILITY, UTILITY OR MARKETABILITY OF
ANY OF THE TRANSFERRED ASSETS OR ANY OF THE ASSETS OF LAJITAS UTILITY OR ANY
PORTION THEREOF OR PROPERTY THEREON OR THE ABSENCE OF ANY DEFECTS THEREIN,
WHETHER LATENT OR PATENT, OR ANY OTHER MATERIALS OR INFORMATION (INCLUDING,
WITHOUT LIMITATION, ALL INFORMATION OF ANY NATURE WHATSOEVER PROVIDED BY SELLER,
THE NATIONAL AUCTION GROUP, INC., OR THEIR RESPECTIVE AGENTS, CONSULTANTS OR
REPRESENTATIVES) THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO BUYER OR
ITS AGENTS, CONSULTANTS OR REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION
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RELATING THERETO. WITHOUT LIMITATION, SELLER MAKES NO IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IT BEING THE
EXPRESS AGREEMENT OF THE BUYER AND THE SELLER THAT THE TRANSFERRED ASSETS ARE
BEING TRANSFERRED TO BUYER (AND THAT THE LAJITAS SHARES ARE BEING TRANSFERRED TO
BUYER WITH THE ASSETS OF LAJITAS UTILITY BEING) IN THEIR PRESENT CONDITION AND
STATE OF REPAIR, "AS IS"" AND "WHERE IS" AND "WITH ALL FAULTS".
2.9 Finder's Fees. Except for NAG, the Seller has not employed or
retained any investment banker, broker, agent, finder or other party, or
incurred any obligation for brokerage fees, finder's fees or commissions, with
respect to the sale by the Seller of any of the Transferred Assets or with
respect to the transactions contemplated by this Agreement, or otherwise dealt
with anyone purporting to act in the capacity of a finder or broker with respect
thereto whereby the Buyer may be obligated to pay such a fee or commission.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
3.1 Corporate Matters. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of its
organization and is duly authorized to conduct business and is in good standing
in the State of Texas. The Buyer has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations under this
Agreement.
3.2 Validity of Agreement.
(a) This Agreement, and all transactions contemplated hereby, have been
duly authorized and approved by all necessary corporate action on the part of
the Buyer. No further corporate action is necessary on the part of the Buyer to
execute and deliver this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Buyer and is a legal, valid and binding obligation of the Buyer, enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect that affect creditors' rights generally and by legal
and equitable limitations on the availability of specific remedies.
(b) The execution, delivery and performance of this Agreement and the other
agreements and documents to be delivered by the Buyer to the Seller, the
consummation of the transactions contemplated hereby and thereby, and the
compliance with the provisions hereof and thereof, by the Buyer will not
conflict with its organizational documents.
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3.3 DTPA Waiver; Investigation.
(a) The Buyer is not a "consumer" as defined in the Texas Deceptive Trade
Practices Act-Consumer Protection Act, as amended (the "DTPA"), and, after
consultation with its counsel, hereby voluntarily waives (to the extent
applicable) all of it rights under the DTPA (a law that gives consumers special
rights and protections).
(b) The Buyer (i) is a sophisticated investor with knowledge and experience
in business and financial matters, (ii) has had the opportunity to obtain such
information concerning the Business, Transferred Assets and Lajitas Utility as
it has desired and to acquire such additional information about the business and
condition of the Business, Lajitas Utility and Transferred Assets (including,
without limitation, environmental matters and matters disclosed in the
Schedules to this Agreement) as it has requested in order to evaluate the risk
of purchasing the Transferred Assets and assuming the Assumed Liabilities, and
(iii) is acquiring the Transferred Assets for its own account for investment
purposes without the view to the further distribution thereof.
(c) THE BUYER ACKNOWLEDGES AND AGREES THAT THE BUYER IS FULLY RELYING ON
THE BUYER'S (OR THE BUYER'S REPRESENTATIVES') INSPECTIONS OF THE TRANSFERRED
ASSETS, ASSUMED LIABILITIES, BUSINESS AND ASSETS AND LIABILITIES OF LAJITAS
UTILITY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE
OR MAY BE MADE (OR PURPORTEDLY MADE) BY THE SELLER OR ANY OF ITS REPRESENTATIVES
EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT. THE BUYER ACKNOWLEDGES THAT
THE BUYER HAS (OR THE BUYER'S REPRESENTATIVES' HAVE), PRIOR TO THE DATE OF THIS
AGREEMENT, THOROUGHLY INSPECTED AND EXAMINED THE BUSINESS, TRANSFERRED ASSETS,
ASSUMED LIABILITIES AND THE ASSETS AND LIABILITIES OF LAJITAS UTILITY TO THE
EXTENT DEEMED NECESSARY BY THE BUYER IN ORDER TO ENABLE THE BUYER TO EVALUATE
THE CONDITION OF THE TRANSFERRED ASSETS, ASSUMED LIABILITIES, BUSINESS, ASSETS
AND LIABILITIES OF LAJITAS UTILITY AND ALL OTHER ASPECTS OF THE BUSINESS AND OF
LAJITAS UTILITY, AND THE BUYER ACKNOWLEDGES THAT THE BUYER IS RELYING SOLELY
UPON THE BUYER'S OWN (OR THE BUYER'S REPRESENTATIVES') INSPECTION, EXAMINATION,
AND EVALUATION OF THE FOREGOING. THE BUYER ACKNOWLEDGES THAT THE PAST FINANCIAL
RESULTS OF THE BUSINESS AND OF LAJITAS UTILITY ARE NOT NECESSARILY INDICATIVE OF
THE FUTURE PERFORMANCE OF THE BUSINESS OR OF LAJITAS UTILITY.
AS A MATERIAL PART OF THE CONSIDERATION FOR THIS TRANSACTION, THE BUYER IS
ACCEPTING THE TRANSFERRED ASSETS, AND IS PURCHASING THE LAJITAS SHARES WITH THE
ASSETS OF LAJITAS UTILITY, ON AN "AS-IS, WHERE-IS" BASIS, WITH ALL FAULTS, AND
WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW, EXCEPT ONLY THE WARRANTIES EXPRESSLY SET FORTH IN
THIS
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AGREEMENT OR IN THE OPERATIVE INSTRUMENT OF TRANSFER DELIVERED PURSUANT TO THIS
AGREEMENT. WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT
FOR THE TITLE WARRANTIES CONTAINED IN SUCH INSTRUMENTS OF TRANSFER AND FOR THE
LIMITED WARRANTIES SET FORTH IN THIS AGREEMENT, THE TRANSFERRED ASSETS ARE BEING
TRANSFERRED WITHOUT ANY WARRANTY, AND THE SELLER AND THE SELLER'S DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, AND AFFILIATES (COLLECTIVELY, "SELLER'S
RELATED PARTIES") HAVE MADE NO, AND EXPRESSLY AND SPECIFICALLY DISCLAIM, AND THE
BUYER ACCEPTS THAT THE SELLER AND THE SELLER'S RELATED PARTIES HAVE DISCLAIMED,
ANY AND ALL REPRESENTATIONS, GUARANTIES OR WARRANTIES, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW (EXCEPT AS DESCRIBED ABOVE) OF OR RELATING TO THE
BUSINESS, TRANSFERRED ASSETS OR LAJITAS UTILITY, INCLUDING, WITHOUT LIMITATION,
OF OR RELATING TO: (I) THE USE, INCOME POTENTIAL, EXPENSES, OPERATION,
CHARACTERISTICS, OR CONDITIONS OF THE TRANSFERRED ASSETS OR ASSETS OF LAJITAS
UTILITY AND THE SURFACE OR SUBSURFACE THEREOF, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY, DESIGN, OR FITNESS FOR
ANY SPECIFIC PURPOSE OR A PARTICULAR PURPOSE; (II) THE COMPLIANCE OF ANY OF THE
TRANSFERRED ASSETS OR ASSETS OF LAJITAS UTILITY WITH ANY LAWS, RULES,
ORDINANCES, OR REGULATIONS; (III) THE ENVIRONMENTAL CONDITION OF THE TRANSFERRED
ASSETS OR ASSETS OF LAJITAS UTILITY AND THE PRESENCE OR ABSENCE OF OR
CONTAMINATION BY HAZARDOUS MATERIALS, OR THE COMPLIANCE OF THE TRANSFERRED
ASSETS OR OF THE ASSETS OF LAJITAS UTILITY WITH ALL REGULATIONS OR LAWS
PERTAINING TO HEALTH OR THE ENVIRONMENT, INCLUDING, BUT NOT LIMITED TO, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, THE
RESOURCE CONSERVATION AND RECOVERY ACT, THE CLEAN WATER ACT, THE TEXAS HEALTH
AND SAFETY CODE, THE TEXAS SOLID WASTE DISPOSAL ACT, AND THE TEXAS WATER CODE,
EACH AS MAY BE AMENDED FROM TIME TO TIME, AND INCLUDING ANY AND ALL REGULATIONS,
RULES, OR POLICIES PROMULGATED THEREUNDER ("ENVIRONMENTAL LAWS"); AND (IV) THE
SOIL CONDITIONS, DRAINAGE, GEOLOGY, FLOODING CHARACTERISTICS, UTILITIES, SQUARE
FOOTAGE, OR OTHER CONDITIONS EXISTING IN, ON, AROUND OR UNDER THE TRANSFERRED
ASSETS OR ASSETS OF LAJITAS UTILITY. THE BUYER HEREBY EXPRESSLY ASSUMES ALL
RISKS, LIABILITIES, CLAIMS, DAMAGES, AND COSTS, INCLUDING ANY LIABILITY WITH
RESPECT TO ENVIRONMENTAL LAWS RESULTING OR ARISING FROM OR RELATED TO THE
TRANSFERRED ASSETS OR ASSETS OF LAJITAS UTILITY OR THE OWNERSHIP, USE,
CONDITION, LOCATION, MAINTENANCE, REPAIR, OR OPERATION THEREOF.
ADDITIONALLY, THE SELLER AND THE SELLER'S RELATED PARTIES ARE RELEASED BY THE
BUYER FROM ANY AND ALL CLAIMS (WHETHER FOR
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<PAGE>
CONTRIBUTION, INDEMNITY, OR OTHERWISE) THE BUYER OR THE BUYER'S SUCCESSORS,
HEIRS OR ASSIGNS MAY NOW OR HEREAFTER HAVE UNDER ENVIRONMENTAL LAWS NOW OR
HEREAFTER IN EFFECT, OR IN CONNECTION WITH THE PRESENCE OF HAZARDOUS MATERIALS
ON OR ABOUT THE TRANSFERRED ASSETS OR ASSETS OF LAJITAS UTILITY.
3.4 Finder's Fees. The Buyer has not employed or retained any investment
banker, broker, agent, finder or other party, or incurred any obligation for
brokerage fees, finder's fees or commissions, with respect to the sale of the
Transferred Asset or with respect to the transactions contemplated by this
Agreement, or otherwise dealt with anyone purporting to act in the capacity of a
finder or broker with respect thereto whereby the Seller may be obligated to pay
such a fee or a commission.
ARTICLE 4
ADDITIONAL AGREEMENTS
4.1 Delivery of Corporate Documents; Record Retention; Financial
Statements.
(a) By Closing, the Buyer shall assume possession of all documents in the
Seller's possession which are located in Lajitas which relate exclusively to the
Transferred Assets, the Assumed Liabilities and the current operations of the
Business. The Seller, however, shall be entitled to retain the historical books
and records relating to the Business and Lajitas Utility to the extent such
books and records are not necessary for the ongoing operations of the Business
or Lajitas Utility by the Buyer.
(b) In the event and for so long as any party is contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand asserted by a third party (including any Governmental Entity) in
connection with (i) any transaction contemplated by this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving the Business, Lajitas Utility or the Transferred
Assets, the other party will to the extent reasonably practicable cooperate with
the contesting or defending party and its counsel in the contest or defense, and
provide such testimony and access to its books and records as shall be necessary
in connection with the contest or defense, all at the sole cost and expense of
the contesting or defending party (except to the extent the contesting or
defending party is entitled to indemnification therefor under Article 7 hereof);
provided, however, that nothing herein requires any party to retain any books
and records other than in the ordinary course of business. In addition, after
Closing the Buyer agrees to provide to the Seller with reasonable access to any
books and records included in the Transferred Assets as may be necessary for the
preparation of, or in connection with, any Tax returns, financial statements or
filings with any Governmental Entity. Notwithstanding the foregoing,
information as to which the contesting or defending party may reasonably assert
would waive a privilege need not be disclosed.
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4.2 Further Assurances. The Seller and the Buyer shall execute,
acknowledge and deliver or cause to be executed, acknowledged and delivered, at
the Buyer's expense, such bills of sale, assignments, assumptions and other
instruments of transfer, assignment, assumption and conveyance, in form and
substance satisfactory to the Buyer and the Seller, as shall be necessary of the
Seller and to use commercially reasonable efforts to cause to be taken such
other action as the Buyer or the Seller reasonably may require to more
effectively implement and carry into effect the transactions contemplated by
this Agreement.
4.3 Employee Matters.
(a) Promptly after Closing, the Seller shall pay to the persons who worked
for the Business as of the Closing Date the salaries or wages owed by the Seller
to such employees through the Closing Date (but not accrued vacation). By
Closing, the Buyer shall be deemed to have hired the employees of the Business
and will honor the employees' accrued vacation. The Buyer shall comply with
applicable law if the Buyer terminates any such employee after Closing.
(b) For a period of 180 days after Closing, the Buyer shall make available
to the Seller at no cost or expense to the Seller the accounting personnel at
the Business to prepare and deliver to the Seller Tax returns and financial
statements of the Business which relate to periods ending on or before the
Closing Date and to otherwise cooperate with the Seller in the Seller's
preparation of reports and other information regarding the Seller's operation of
the Business. The Buyer shall have no liability to the Seller for the acts or
omissions of employees pursuant to this clause (b).
(c) From the date hereof through Closing, the Seller shall not increase (or
permit Lajitas Utility to increase) the compensation or hourly wages payable to
the employees of the Business or of Lajitas Utility other than in the ordinary
course of business consistent with past practices.
4.4 Operation Prior to Closing. From the date hereof until the Closing
Date (or until earlier termination of this Agreement), the Seller shall operate
the Business (and cause Lajitas Utility to operate) in the ordinary course of
business, consistent with past practices, except to the extent necessary to
consummate the transactions contemplated by this Agreement.
4.5 Access. From the date hereof until Closing or the earlier termination
of this Agreement, the Seller shall afford the Buyer and its representatives
reasonable access during normal business hours to the resort and Lajitas Utility
and the books and records of Lajitas Utility and of the Seller relating to the
Business. The Buyer shall maintain all information gained form the Seller or
Lajitas Utility in strict confidence (and subject to the terms of the
confidentiality agreement executed by the Buyer and the Seller) and shall take
all actions necessary to prevent disclosure, access to, or transmission of such
information to any third party except to the extent permitted by such
confidentiality agreement.
4.6 Title Commitment; No Survey. The Buyer acknowledges that it has
received from the Seller a commitment from the Title Company for the issuance of
an owner's policy of title insurance relating to the Town and Resort Real
Property. The Buyer further acknowledges that the
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Seller shall have no obligation regarding the issuance of any such title policy
nor any obligation to take any action to cure or remove any exception set forth
in the commitment or policy. The Buyer shall have the right, if it so elects and
at its sole cost and expense, to purchase from the Title Company title insurance
on the Town and Resort Real Property. The Seller shall have no obligation to
provide to the Buyer or otherwise pay for any survey.
4.7 Certain Permits and Approvals; Pre-Closing and Other Actions.
(a) The Buyer acknowledges that it will be required to obtain from the
applicable Governmental Entities certain permits in order to operate the
Business which are not being transferred as part of the Transferred Assets,
including, without limitation, a Texas State Sales Tax permit, alcoholic
beverage licenses and health certificates. From and after the date hereof, the
Buyer agrees to use commercially reasonable efforts to obtain such permit and
licenses. The Buyer shall not have the right, nor shall the Seller be obligated
to arrange for the Buyer, to utilize any such permits held by the Seller or its
Affiliates. For informational purposes only, the Seller has informed the Buyer
that the Seller (or its Affiliates) holds the permits listed on Schedule 4.7
(each of which is an Excluded Asset), and the Buyer acknowledges that it will
need to obtain comparable permits.
(b) The Buyer acknowledges that the sale of the Lajitas Utility Shares is
subject to review and approval by the Texas Natural Resource Conservation
Commission ("TNRCC"). Promptly after the date hereof, the Buyer shall prepare
and file with the TNRCC an appropriate application in connection with the
Buyer's proposed purchase of the Lajitas Utility Shares, and shall diligently
pursue such application, including by requesting that the 60-day review period
be terminated early by the TNRCC so as to accommodate a March 31, 2000 closing.
The Buyer and the Seller shall cooperate with one another in connection with
such process, and each shall provide to TNRCC such information as TNRCC may
request in connection with such review and approval; provided that in no event
shall the Seller be required to provide any financial or other support to or for
the benefit of the Buyer in connection with the Buyer's ownership and operation
of Lajitas Utility. If the Closing occurs, the Buyer shall notify the TNRCC of
the consummation of the sale within 30 days after the sale as required by TNRCC
regulations.
(c) Prior to Closing, the Buyer shall make all necessary arrangements with
the gas, electric, telephone and satellite television companies so as to ensure
that the Business has such services on the Buyer's account from and after the
Closing.
(d) From and after Closing, the Buyer shall (i) take all actions necessary
to notify vendors that the Buyer is the new owner of the Business and that
orders of goods and services are for the Buyer's account and not for the account
of the Seller and (ii) make all filings and reports required by applicable law
as a result of the Buyer's acquisition of the Transferred Assets.
4.8 Certain Matters Regarding Lajitas Utility. As disclosed in Schedule
2.5, Lajitas Utility has entered into an agreed order with the TNRCC (the "TNRCC
Agreement") regarding certain corrective measures to be taken by Lajitas
Utility. As a result of such agreement, Lajitas Utility has engaged Water
Equipment and Treatment Services, Inc. (the "Water Equipment") as
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described in Schedule 2.4 (the "Water Equipment Agreement") pursuant to which
Water Equipment will provide certain services in response to the TNRCC
Agreement. From and after Closing, Seller agrees to pay to Water Equipment when
due all amounts owed by Water Equipment under the Water Equipment Agreement
which have not been paid as of Closing up to a maximum aggregate amount payable
by the Seller equal to the difference between $75,000 minus the amount paid to
Water Equipment pursuant to the Water Equipment Agreement on or before Closing
(such maximum amount being the "Unpaid Fees"). The Seller's obligations under
this Section 4.8 are limited to the Unpaid Fees, and the Seller shall have no
obligation under this Section 4.8 if after Closing any provision of the Water
Equipment Agreement (including, without limitation, the scope of work or fee
schedule attached thereto) is modified without the Seller's prior written
consent. The Seller shall not in any event be obligated or otherwise responsible
to Lajitas Utility, the Buyer or any other Person for Water Equipment's work
under the Water Equipment Agreement.
ARTICLE 5
BUYER'S CONDITIONS
The obligation of the Buyer to purchase the Transferred Assets and to
assume the Assumed Liabilities as contemplated hereby is, at the option of the
Buyer, subject to the satisfaction on or before the Closing Date of the
conditions set forth below, any of which may be waived by the Buyer in writing.
5.1 Representations, Warranties and Covenants. The representations and
warranties of the Seller contained in this Agreement shall be true, correct and
complete in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made or
given on and as of such date, except for such matters due to changes in facts
from the date hereof required or permitted by this Agreement and except for
representations and warranties made or given only as of a specified date. Each
and all of the agreements and covenants of the Seller to be performed or
complied with by the Seller on or before the Closing Date pursuant to this
Agreement shall have been performed or complied with in all material respects.
The Seller shall have delivered to the Buyer a certificate, substantially in the
form of Exhibit F-1, signed by one of its duly authorized officers, dated the
Closing Date.
5.2 Certain Documents. The Seller shall have executed and delivered to
the Buyer each of the following dated as of the Closing Date:
(a) a special warranty deed, substantially in the form attached hereto as
Exhibit A, with respect to the Town and Resort Real Property;
(b) a stock power, substantially in the form of Exhibit B, together with
the stock certificate(s) evidencing the Lajitas Utility Shares;
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(c) a bill of sale, substantially in the form attached hereto as Exhibit C,
with respect to the Transferred Assets (other than the Town and Resort Real
Property);
(d) (i) an assignment and assumption substantially in the form attached
hereto as Exhibit D and (ii) an assignment and assumption substantially in the
form attached hereto as Exhibit D-1 (collectively, the "Assignment and
Assumptions");
(e) the certificate of title for each of the vehicles listed on Schedule
1.1 with respect to which a certificate of title has been issued to the Seller;
(f) a "FIRPTA" certificate; and
(g) a closing statement prepared by the Title Company and reasonably
acceptable to the Buyer.
5.3 No Litigation. No preliminary or permanent injunction or other order
of any Governmental Entity shall be in effect nor shall there be in effect any
statute, rule, regulation or executive order promulgated or enacted by any
Governmental Entity that, in any such case, prevents the consummation of the
transactions contemplated by this Agreement. No suit, action, claim, proceeding
or investigation before any Governmental Entity shall have been commenced or
threatened by any Person other than the Buyer or any of its Affiliates seeking
to prevent the sale of the Transferred Assets or the Business or asserting that
the sale of all or a portion of the Transferred Assets or the Business would be
unlawful.
5.4 TNRCC Review. The Buyer's proposed purchase of the Lajitas Utility
Shares on the Closing Date shall be permitted by Section 13.302 of the Texas
Water Code and Rule 291.111 of the TNRCC's regulations.
5.5 Resignations. The Buyer shall have received copies of resignations
submitted to Lajitas Utility from all of the directors and officers of Lajitas
Utility.
ARTICLE 6
SELLER'S CONDITIONS
The obligation of the Seller to transfer the Transferred Assets as
contemplated hereby is, at the option of the Seller, subject to the satisfaction
on or before the Closing Date of the conditions set forth below, any of which
may be waived by the Seller in writing.
6.1 Representations, Warranties and Covenants. The representations and
warranties of the Buyer contained in this Agreement shall be true, correct and
complete in all material respects on and as of the Closing Date with the same
force and effect as though such representations and warranties had been made or
given on and as of such date, except for representations and warranties made or
given only as a specified date. Each and all of the agreements and covenants of
the Buyer
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to be performed or complied with by it on or before the Closing Date pursuant to
this Agreement shall have been performed or complied with in all material
respects. The Buyer shall have delivered to the Seller a certificate,
substantially in the form of Exhibit F-2, signed by one of its duly authorized
officers, dated the Closing Date.
6.2 Certain Documents. The Buyer shall have executed and delivered to the
Seller each of the following dated as of the Closing Date:
(a) both of the Assignment and Assumptions;
(b) a certificate of exemption from sales tax with respect to the
Inventories, substantially in the form of Exhibit E; and
(c) a closing statement prepared by the Title Company and reasonably
acceptable to the Seller.
6.3 Cash Purchase Price and Auction Fee. The Buyer shall have delivered
to the Title Company (and the Title Company shall have received) by wire
transfer of immediately available funds an amount equal to the Cash Purchase
Price (including the Earnest Money deposited with the Title Company pursuant to
Section 1.9) for payment to the Seller plus an amount equal to 7.5% of the Cash
Purchase Price for payment of the Auction Fee payable to NAG.
6.4 No Litigation. No preliminary or permanent injunction or other order
of any Governmental Entity shall be in effect nor shall there be in effect any
statute, rule, regulation or executive order promulgated or enacted by any
Governmental Entity that, in any such case, prevents the consummation of the
transactions contemplated by this Agreement. No suit, action, claim, proceeding
or investigation before any Governmental Entity shall have been commenced or
threatened by any Person other than the Seller or any of its Affiliates seeking
to prevent the sale of the Transferred Assets or the Business or asserting that
the sale of all or a portion of the Transferred Assets or the Business would be
unlawful.
6.5 Stockholder Approval. The stockholders of the Seller shall have
effectively approved the sale of the Transferred Assets and transactions
contemplated by this Agreement as required by applicable law.
6.6 TNRCC Review. The Seller shall have received evidence satisfactory to
it that the Buyer's proposed purchase of the Lajitas Utility Shares on the
Closing Date may be completed in compliance with Section 13.302 of the Texas
Water Code and Rule 291.111 of the TNRCC's regulations.
6.7 Lajitas Utility Registered Office and Agent. The Seller shall have
received evidence satisfactory to it that the Buyer is causing Lajitas Utility,
immediately after Closing, to file with the Texas Secretary of State an
application in proper form specified by the Texas Secretary of
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State to change the registered agent and registered office to a registered agent
and registered office not associated with the Seller.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by the Seller. Except as otherwise limited by this
Article 7 and Article 8 hereof, the Seller agrees to indemnify, defend and hold
the Buyer and each of its officers, directors, employees and agents, and their
respective successors and assigns (collectively, the "Buyer Persons") harmless
from and against and in respect of Damages actually suffered, incurred or
realized by such party (collectively, "Buyer Losses"), arising out of or
resulting from or relating to:
(a) any misrepresentation, breach of warranty or breach of any covenant or
agreement made or undertaken by the Seller in this Agreement or in any other
agreement, certificate, exhibit or writing delivered to the Buyer pursuant to
this Agreement; or
(b) except for the Assumed Liabilities and for obligations, debts and
liabilities of Lajitas Utility, and except as limited by Section 3.3(c), the
ownership, management, use or operation of the Transferred Assets or the
Business before the Closing.
Notwithstanding the foregoing, the Seller shall not be liable under this Section
7.1 unless and until the aggregate amount of all the Buyer Losses for which the
Buyer Persons are entitled to indemnification hereunder exceeds $10,000 and then
only for those Buyer Losses that in the aggregate exceed $10,000; provided,
however, that the Seller's aggregate liability under clause (a) of this Section
7.1 (other than liability resulting from a breach of the Seller's warranties of
title) shall not exceed $100,000 and the Seller's aggregate liability resulting
from breaches of the Seller's warranty of title as described in Section 2.3
shall not exceed $200,000.
The Seller's aggregate liability under this Article 7 shall not in any
event exceed $200,000.
7.2 Indemnification by the Buyer. Except as otherwise limited by this
Article 7 and Article 8 hereof, the Buyer agrees to indemnify, defend and hold
the Seller and each of its officers, directors, employees and agents, and its
successors and assigns (collectively, the "Seller Persons") harmless from and
against and in respect of Damages actually suffered, incurred or realized by
such party (collectively, "the Seller Losses"), arising out of or resulting
from:
(a) any misrepresentation, breach of warranty or breach of any covenant or
agreement made or undertaken by the Buyer in this Agreement or in any other
agreement, certificate, exhibit or writing delivered to the Seller pursuant to
this Agreement;
(b) any Assumed Liability;
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(c) the ownership, management, use or operation of the Transferred Assets,
the Business or Lajitas Utility after the Closing.
7.3 Procedure. All claims for indemnification under this Article 7 shall
be asserted and resolved as follows:
(a) An Indemnitee shall promptly give the Indemnitor notice of any matter
that an Indemnitee has determined has given or could give rise to a right of
indemnification under this Agreement, stating the amount of the Losses, if
known, and method of computation thereof, all with reasonable particularity, and
stating with particularity the nature of such matter. Failure to provide such
notice shall not affect the right of the Indemnitee to indemnification except to
the extent such failure shall have resulted in liability to the Indemnitor that
could have been actually avoided had such notice been provided within such
required time period.
(b) The obligations and liabilities of an Indemnitor under this Article 7
with respect to Losses arising from claims of any third party that are subject
to the indemnification provided for in this Article 7 ("Third Party Claims")
shall be governed by and contingent upon the following additional terms and
conditions: if an Indemnitee shall receive notice of any Third Party Claim, the
Indemnitee shall give the Indemnitor prompt notice of such Third Party Claim and
the Indemnitor may, at its option, assume and control the defense of such Third
Party Claim at the Indemnitor's expense and through counsel of the Indemnitor's
choice reasonably acceptable to Indemnitee. In the event the Indemnitor assumes
the defense against any such Third Party Claim as provided above, the Indemnitee
shall have the right to participate at its own expense in the defense of such
asserted liability, shall cooperate with the Indemnitor in such defense and will
attempt to make available on a reasonable basis to the Indemnitor all witnesses,
pertinent records, materials and information in its possession or under its
control relating thereto as is reasonably required by the Indemnitor. In the
event the Indemnitor does not elect to conduct the defense against any such
Third Party Claim, the Indemnitor shall pay all reasonable costs and expenses of
such defense (including the reasonable costs and expenses of counsel of the
Indemnitee's choice reasonably acceptable to Indemnitor) as incurred and shall
cooperate with the Indemnitee (and be entitled to participate) in such defense
and attempt to make available to it on a reasonable basis all such witnesses,
records, materials and information in its possession or under its control
relating thereto as is reasonably required by the Indemnitee. Except for the
settlement of a Third Party Claim that involves the payment of money only and
for which the Indemnitee is totally indemnified by the Indemnitor, no Third
Party Claim may be settled without the written consent of the Indemnitee.
7.4 Time Limitation. No claim for indemnification under this Article 7
may be asserted by the Buyer or any other Buyer Person subsequent to the 180th
day following the Closing Date; provided, however, that any bona fide claim for
indemnification under this Article 7 made during such 180 day period shall be
valid notwithstanding that such claim may not be resolved within such period if
on or before the thirtieth (30th) day after the end of such period the party
seeking indemnification files a lawsuit against, and serves legal process on,
the other party with respect to the claim described in this Article 7. Claims
by the Seller and the other Seller Persons for indemnification shall not be
limited by this Section 7.4.
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7.5 Payment. Payment of any amounts due pursuant to this Article 7 shall
be made within ten Business Days after notice is sent by the Indemnitee.
7.6 Adjustment of Liability. The amount which an Indemnitee shall be
entitled to receive from an Indemnitor with respect to any indemnifiable Losses
under this Article 7 shall be net of any insurance recovery by the Indemnitee on
account of such Losses from an unaffiliated party.
7.7 Certain Limitations. The Buyer acknowledges and agrees that the
remedies provided in this Article 7 shall be the sole and exclusive remedies of
the Buyer and the other the Buyer Persons for any breach by, or other action
against, the Seller under or with respect to this Agreement, or the transactions
contemplated hereby, and hereby waives any and all other remedies. EACH PARTY
HEREBY IRREVOCABLY AND KNOWINGLY WAIVES ANY RIGHT TO SEEK OR RECOVER, AND AGREES
NOT TO DEMAND OR SEEK, SPECIAL, CONSEQUENTIAL (INCLUDING WITHOUT LIMITATION,
LOST PROFITS), EXEMPLARY, SPECIAL AND PUNITIVE DAMAGES, OR ANY OF THE FOREGOING,
IN CONNECTION WITH ANY ACTION UNDER, RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
BUYER AGREES THAT ITS SOLE AND EXCLUSIVE RECOURSE UNDER, RELATING TO OR
ARISING OUT OF THIS AGREEMENT, AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
AGAINST SELLER (SUBJECT TO, AND AS LIMITED BY, THIS AGREEMENT). BUYER SHALL
HAVE NO RECOURSE UNDER, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED AGAINST (AND BUYER HEREBY IRREVOCABLY AND KNOWINGLY
WAIVES ANY SUCH CLAIM AGAINST AND AGREES NOT TO SEEK OR DEMAND RECOURSE OR
RECOVERY AGAINST) ANY DIRECTOR, OFFICER, EMPLOYEE OR STOCKHOLDER OF SELLER.
7.8 Survival. The several representations and warranties of the parties
to this Agreement shall survive the Closing Date and shall remain in full force
and effect for a period of 180 days following the Closing Date. All covenants
and agreements contained herein to be performed after Closing, and all
disclaimers and limitations of liability, shall survive Closing without
expiration.
ARTICLE 8
TERMINATION
8.1 Events of Termination. The obligation to close the transactions
contemplated by this Agreement may be terminated by:
(a) mutual agreement of the Buyer and the Seller;
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(b) the Buyer, if a material default shall be made by the Seller in the
observance or in the due and timely performance by the Seller of any agreements
and covenants of the Seller herein contained, or if there shall have been a
breach by the Seller of any of the warranties and representations of the Seller
herein contained, and such default or breach has not been cured or has not been
waived within five (5) days of written notice thereof;
(c) the Seller, if a material default shall be made by the Buyer in the
observance or in the due and timely performance by the Buyer of any agreements
and covenants of the Buyer herein contained, or if there shall have been a
breach by the Buyer of any of the warranties and representations of the Buyer
herein contained, and such default or breach has not been cured or has not been
waived within five (5) days of written notice thereof;
(d) the Buyer or the Seller, provided the terminating party has not
materially breached any of its agreements, covenants, representations or
warranties, if the Closing shall not have occurred on or before April 30, 2000,
or
(e) the Seller, if (i) the Seller is not then in material breach of any
representation, warranty, covenant or agreement set forth herein, (i) this
Agreement and the transactions contemplated hereby shall not have been
effectively approved by the Seller's stockholders, (iii) the board of directors
of the Sellers shall have withdrawn, modified or changed in a manner adverse to
the Buyer its approval or recommendation of this Agreement or the transactions
contemplated hereby because the Company shall have received after the date
hereof another bona offer from a third party to purchase the Transferred Assets
(the "Other Offer") which is higher than the Cash Purchase Price and the Buyer
shall not have agreed to match the Other Offer within 48 hours after being
notified by the Seller of such Other Offer and (iv) the Seller shall have paid
to the Buyer an amount (the "Termination Fee") equal to the greater of (1)
$50,000 or (2) an amount equal to 5% of the difference between the amount of the
Other Offer minus the Cash Purchase Price by bank cashier's check or wire
transfer to an account designated by the Buyer for this purpose,, in any case,
as it deems necessary in the exercise of its fiduciary obligations to the
Company's shareholders after being so advised in writing by outside legal
counsel.
8.2 Liability Upon Termination. If the obligation to close the
transactions contemplated by this Agreements is terminated pursuant to any
provision of this Article 8 then this Agreement shall forthwith become void and
there shall not be any liability or obligation with respect to the terminated
provisions of this Agreement on the part of the Seller or the Buyer except and
to the extent provided in Section 8.4.
8.3 Notice of Termination. The parties hereto may exercise their
respective rights of termination under this Article 8 only by delivering written
notice to that effect to the other party, provided, however, that such notice
must be received on or before the Closing Date.
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8.4 Earnest Money; Specific Performance.
(a) If either (i) all of the conditions to the Buyer's obligation to
purchase the Transferred Assets have been satisfied or waived in writing by the
Buyer and if the Buyer should fail to close this transaction for any reason
other than the Seller's default, failure of a condition to the Buyer's
obligation to close, or the exercise by the Buyer of an express right of
termination granted herein, or (ii) the Seller terminates this Agreement
pursuant to Section 8.1(c), then the Seller's sole remedy in such event shall be
to terminate this Agreement and to retain the Earnest Money as liquidated
damages, the Seller waiving all other rights or remedies in the event of such
default by the Buyer, and the Title Company shall pay such Earnest Money to the
Seller in such event. The parties acknowledge that the Seller's actual damages
in the event of a default by the Buyer under this Agreement before Closing will
be difficult to ascertain, and that such liquidated damages represent the
parties' best estimate of such damages.
(b) If either (i) all of the conditions to the Seller's obligation to sell
the Transferred Assets have been satisfied or waived in writing by the Seller
and if the Seller should fail to close this transaction for any reason other
than the Buyer's default, failure of a condition to Seller's obligation to
close, or the exercise by Seller of an express right of termination granted
herein, or (ii) the Buyer terminates this Agreement pursuant to Section 8.1(b),
then the Buyer's sole remedy in such event shall be either to (i) terminate this
Agreement and receive a refund of the Earnest Money (in which case the Title
Company shall pay such Earnest Money to the Buyer in such event) or (ii) sue for
specific performance of this Agreement, Buyer waiving all other rights or
remedies in the event of such default by the Seller. In the event the Buyer
elects to pursue an action for specific performance, such action must be
initiated within thirty (30) days from the date the Buyer is notified on the
Seller's refusal to proceed to Closing; failure to initiate such action within
such thirty (30) day period shall be deemed to be an election by the Buyer to
terminate this Agreement and receive a refund of the Earnest Money.
ARTICLE 9
DEFINITIONS OF CERTAIN TERMS
In addition to terms defined elsewhere in this Agreement, the following
terms shall have the meanings assigned to them herein, unless the context
otherwise indicates, both for purposes of this Agreement and the Schedules and
Exhibits:
9.1 "Affiliate" shall mean, with respect to any Person, an individual or
entity that, directly or indirectly, controls, is controlled by or is under
common control with such Person.
9.2 "Agreement" shall mean this Purchase Agreement (together with the
Exhibits and Schedules hereto) between the Seller and the Buyer, as amended from
time to time by such parties.
9.3 "Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Houston, Texas are authorized by law to
close.
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9.4 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or similar provisions of legislation replacing such law from time
to time.
9.5 "Damages" shall mean, subject to Section 7.7, any and all liabilities,
losses, damages, demands, assessments, claims, costs and reasonable expenses
(including, without limitations, reasonable attorneys' fees and expenses and
reasonable fees and expenses of consultants and other professionals)).
9.6 "Governmental Entity" shall mean any arbitrator, court, administrative
or regulatory agency, commission, department, board or bureau or body or other
government or authority or instrumentality or any entity or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
9.7 "Indemnitee" shall mean the Person or Persons indemnified or entitled,
or claiming to be entitled to be indemnified, pursuant to the provisions of
Section 7.1 or Section 7.2 hereof, as the case may be.
9.8 "Indemnitor" shall mean the Person or Persons having the obligation to
indemnify pursuant to the provisions of Section 7.1 or Section 7.2 hereof, as
the case may be.
9.9 "Lien" shall mean any lien, pledge, claim, charge, security interest
or other encumbrance, option, defect or other rights of any third Person of any
nature whatsoever.
9.10 "Losses" shall mean the Seller Losses or the Buyer Losses, as the
case may be.
9.11 "Material Adverse Effect" means an effect on the condition
(financial or otherwise), results of operation, personal and real property,
other assets or liabilities of the Business or Lajitas Utility or any of their
respective assets that could reasonably be expected to involve an adverse effect
on the Business or Lajitas Utility of at least $50,000.
9.12 "Permitted Liens" shall mean (a) Liens securing or relating to
liabilities or obligations that are to be assumed by the Buyer pursuant to this
Agreement, (b) Liens for current taxes and assessments not yet due, (c) inchoate
mechanic and materialmen Liens for construction in progress, (d) inchoate
workmen, repairmen, warehousemen and carriers Liens arising in the ordinary
course of business or (e) Liens created by the Buyer.
9.13 "Person" shall mean a corporation, limited liability company, an
association, a partnership, an organization, a business, an individual or a
Governmental Entity.
9.14 "Seller's Knowledge" shall mean and refer only to the actual
knowledge of Mark A. Kilkenny with the express limitations and qualifications
that Mark A. Kilkenny has not made any special investigation or inquiry, and has
no duty or obligation of reasonable diligent investigation or inquiry, or other
duty or obligation to acquire or attempt to acquire notice, knowledge or
information beyond or in addition to the current, actual knowledge of Mark A.
Kilkenny. By virtue
22
<PAGE>
of the limitations and qualifications herein expressed, it is the intention of
the parties that the Seller hereby expressly negates the applicability of any
principle or theory of "negligent ignorance" that would or might impute to the
Seller or charge the Seller with, as a matter of law, actual notice or knowledge
as a result of those tings that a reasonably diligent inquiry and exercise of
the means of information at hand would or might disclose to the Seller.
9.15 "Taxes" shall mean all federal, state, local, foreign and other
taxes, charges, fees, duties, levies, imposts, customs or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, profit share, license,
lease, service, service use, value added, withholding, payroll, employment,
excise, estimated, severance, stamp, occupation, premium, property, windfall
profits, or other taxes, fees, assessments, customs, duties, levies, imposts, or
charges of any kind whatsoever, together with any interest, penalties, additions
to tax, fines or other additional amounts imposed thereon or related thereto,
and the term "Tax" means any one of the foregoing Taxes.
ARTICLE 10
MISCELLANEOUS
10.1 Public Announcements. Subject to applicable securities law or
stock exchange requirements, neither the Buyer nor the Seller shall, without the
prior approval of the other party hereto, issue, or permit any of their
respective partners, directors, officers, employees, agents or Affiliates to
issue, any press release or other public announcement with respect to this
Agreement or the transactions contemplated hereby.
10.2 Expenses. Except as otherwise set forth herein, and whether or
not the transactions contemplated by this Agreement shall be consummated, each
party agrees to pay, without right of reimbursement from any other party, the
costs incurred by such party incident to the preparation and execution of this
Agreement and performance of its obligations hereunder, including without
limitation the fees and disbursements of legal counsel, accountants and
consultants employed by such party in connection with the transactions
contemplated by this Agreement.
10.3 Notices. All notices, requests, consents, directions and other
instruments and communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered in person, by courier, by an internationally recognized overnight
delivery service with proof of delivery or by prepaid registered or certified
United States first-class mail, return receipt requested, addressed to the
respective party at the address set forth below, or if sent by facsimile
transmission or other similar form of communication (with receipt confirmed) to
the respective party at the facsimile number set forth below:
23
<PAGE>
If to the Seller, to:
Southern Investors Service Company, Inc.
2727 North Loop West, Suite 200
Houston, Texas 77008
Attention: Walter M. Mischer, Sr.
Facsimile: 713-864-0526
Confirm: 713-869-7800
Copies to:
Mayer, Brown & Platt
700 Louisiana, Suite 3600
Houston, Texas 77002
Attention: Timothy B. Ellwood
Facsimile: 713-224-6410
Confirm: 713-224-6410
If to the Buyer, to:
To the address set forth on the Transaction Schedule.
or to such other address or facsimile number and to the attention of such other
Person(s) as either party may designate by written notice. Any notice mailed
shall be deemed to have been given and received on the third Business Day
following the day of mailing.
10.4 Bulk Transfer Laws. The Seller agrees with the Buyer that the
provisions of any statute of any state or jurisdiction regulating bulk sales or
transfers do not apply to this Agreement.
10.5 Successors. This Agreement shall insure to the benefit of and be
binding upon the Buyer and the Seller and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interest or
obligations hereunder shall be assigned by either of the parties hereto without
the prior written consent of the other party hereto.
10.6 Entire Agreement. This Agreement and the exhibits and schedules
hereto and the confidentiality agreement among the parties hereto constitute the
entire agreement and understanding between the parties relating to the subject
matter hereof and thereof and supersede all prior representations, endorsements,
premises, agreements, memoranda communications, negotiations, discussions,
understandings and arrangements, whether oral, written or inferred, between the
parties relating to the subject matter hereof. This Agreement may not be
modified, amended, rescinded, canceled, altered or supplemented, in whole or in
part, except upon the execution and delivery of a written instrument executed by
a duly authorized representative of each of the parties hereto.
10.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Texas without giving
effect to choice of law principles.
24
<PAGE>
10.8 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any other breach
of the same or any other term or condition.
10.9 Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction shall, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 No Third Party Beneficiaries. Any agreement contained, expressed
or implied in this Agreement shall be only for the benefit of the parties hereto
and their respective legal representatives, successors and assigns, and such
agreements shall not inure to the benefit of the obligees of any indebtedness of
any party hereto, it being the intention of the parties hereto that no Person
shall be deemed a third party beneficiary of this Agreement, except to the
extent a third party is expressly given rights herein.
10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 Headings. The headings of the Articles and Sections of this
Agreement have been inserted for convenience of reference only and shall in no
way restrict or otherwise modify any of the terms or provisions hereof or
affect in any way the meaning or interpretation of this Agreement.
10.13 Interpretation. The provisions of this Agreement shall be deemed
to have been negotiated and drafted by both parties without regard to any
principle relating to who prepared the Agreement.
10.14 Disclaimer by Auction Company. Buyer shall look only to the
Seller as to all matters regarding this Agreement and the Transferred Assets,
and NAG shall not be responsible or liable in any way if the Seller fails or
refuses to or cannot close the transactions contemplated hereby, or if the
Transferred Assets are affected in any way or are in any other way
unsatisfactory to the Buyer as the Buyer may determine before or after Closing.
10.15 Service of Process; Waiver of Jury Trial; Attorneys' Fees;
Jurisdiction
(a) Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought against any of
the parties in the courts of the State of Texas, County of Harris, or, if it has
or can acquire jurisdiction, in the United States District Court for the
Southern District of Texas, Houston Division and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
25
<PAGE>
(b) EACH PARTY FURTHER ACKNOWLEDGES AND AGREES THAT ANY ACTION OR
PROCEEDING WHICH MAY ARISE OUT THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT. BY EXECUTING THIS AGREEMENT, EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION
26
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
SELLER:
SOUTHERN INVESTORS SERVICE COMPANY, INC.
By: /SS/ Mark A. Kilkenny
---------------------------
Name: Mark A. Kilkenny
--------------------
Title: V.P.
--------------------
BUYER:
/SS/ Stephen R. Smith
------------------------------
By:
Name:
---------------------
Title:
--------------------
27
<PAGE>
TITLE COMPANY'S AGREEMENT AND RECEIPT
On this ______ day of February 2000, Stewart Title Company, as the Title
Company named in the foregoing Agreement, hereby acknowledges receipt of (i)
______ (___) counterparts of this Agreement executed by the Seller and the Buyer
and (ii) the Earnest Money in the form specified below required under Section
1.9 of this Agreement and hereby agrees to act as Title Company in strict
accordance with the terms of this Agreement.
STEWART TITLE COMPANY
By:____________________________________
Its: ___________________ President
Form in which Earnest Money delivered: _________________________
28
<PAGE>
Special Warranty Deed - Town Tract
EXHIBIT A
Lots 7, 14, 15, 19 and 20, Block 1, COMANCHE MESA SUBDIVISION;
Lots 8, 9, 10, 16, 17, 18, 19, 20, 22, 23, 24, 26, 27, 28, 29, 30, 31, 32, 33,
34, 35, 37, 38, 43, 44, 45, 47 and 48, Block 2, COMANCHE MESA SUBDIVISION;
Lots 1 thru 5, 6-B, and 7 thru 12, Block 3, COMANCHE MESA SUBDIVISION;
Lots 11, 12,13,16,17, 19, 21, 27, and 23, COMANCHE HILLS SUBDIVISION;
Lots 1, 2, 3 and 4, RIVERVIEW SUBDIVISION;
Lots 1 thru 18, Block 1, SPEAR POINT SUBDIVISION;
Lots 1 thru 20, Block 2, SPEAR POINT SUBDIVISION
Lots 1 thru 12, Block 3, SPEAR POINT SUBDIVISION;
Lots 1 thru 4, Block 4, SPEAR POINT SUBDIVISION;
Lots 1 & 2, Block 5, SPEAR POINT SUBDIVISION;
Lots 1 thru 16, Block 6, SPEAR POINT SUBDIVISION;
Lots 1 thru 6, Block 7, SPEAR POINT SUBDIVISION:'
Lots 1, 2 & 3, Block 8, SPEAR POINT SUBDIVISION;
Lots 2, 3, 4, 6, 7, 8, 9, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24,
25 & 26, MESA VISTA SUBDIVISION,
Unit 104, Building A, CASTALON CONDOS;
Unit 112, Building B, CASTALON CONDOS;
Unit 111, Building D, CASTALON CONDOS;
Unit 104, Building A, SAN CARLOS CONDOS;
Unit 111, Building, SAN CARLOS CONDOS;
Section 36, Block 341, TC Ry. Co. 363.81 ac.m/l (395.90 ac. SAVE & EXCEPT 21.11
ac. conveyed in Vol. 228, Page 148, DR; .937 ac. conveyed in Vol. 212, Page 786,
DR; .8194 ac. conveyed in Vol. 225, Page 286, DR; that portion of Riverview
Subdivision lying in Sec. 36; 7.14 ac. conveyed in Vol. 136, Page 196, DR; .65
ac. conveyed in Vol. 232, Page 234, DR; 1.0148 ac. conveyed to Vol. 245, Page
591, DR; .3095 ac. conveyed in Vol. 218, Page 472, DR and .41 ac. conveyed in
Vol. 221, Page 6, DR.
Section 37, Block 341, TC Ry. Co.; 399.78 ac.(574 ac. SAVE & EXCEPT 1.28 ac.
conveyed in Vol. 31, Page 9, OPR; 94.56 ac. conveyed in Vol. 228, Page 148, DR;
2.01 ac. conveyed in Vol. 26, Page 41, OPR;35.45 ac. contained in Spear
Point subdivision; that portion contained in Comanche Hills Subdivision; 31.89
ac. contained in Mesa Vista Subdivision and 7.49 ac. conveyed in Vol. 136, Page
196, DR; 1.54 ac. contained in Castalon Condos complex and that portion
contained in San Carlos Complex)
Section 99, Block 341, TC Ry. Co. 213.38 acres, m/l (443.5 ac. SAVE & EXCEPT
37.34 ac. contained in Spear Point Subdivision; 99.20 ac. conveyed in Vol. 20,
Page 501, OPR,; 89.6 ac. conveyed in Vol. 6, Page 432, OPR; 3.98 ac. conveyed in
Vol. 221, Page 103, DR)
Section 100, Block 341, TC Ry. Co., 273.495 acres, m/l (284.59 ac. SAVE & EXCEPT
8.73 conveyed to Vol 136, Page 196, DR; 1.40 ac. conveyed in Vol. 68, Page 36,
OPR; .965 ac. conveyed in Vol. 226, Page 223, DR and that portion of the
Comanche Hills and Comanche Mesa Subdivisions lying within Section 100.
Tract of 2.76 ac. m/l out of Section 37 and 100, Block 341, Known as "Employee
Housing" Section 101, Block 341, TC Ry. Co., 440.25 acres m/l
Section MC-1, SF 16366, 84.62 acres, m/l SAVE & EXCEPT that portion lying
within the boundaries of Comanche Mesa Subdivision.
<PAGE>
EXHIBIT A
FORM OF DEED
SPECIAL WARRANTY DEED
STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF BREWSTER (S)
THAT Southern Investors Service Company, Inc., a Delaware corporation
("Grantor"), for and in consideration of the sum of Ten Dollars ($10) and other
good and valuable consideration to it in hand paid by ________________________,
a _________________ ("Grantee"), having a mailing address of _________________,
the receipt and sufficiency of which consideration are hereby acknowledged, has
GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents does hereby GRANT,
BARGAIN, SELL and CONVEY, unto Grantee all of the real property described in
Exhibit A attached hereto and made a part hereof for all purposes, together with
all of Grantor's right, title and interest in and to all easements, rights of
way, reservations, privileges, appurtenances, any buildings, structures,
fixtures and improvements thereon, and other estates and rights of Grantor
pertaining to the real property (collectively, the "Property").
This conveyance is made and accepted subject to all easements,
encumbrances, restrictions, rights-of-way and prescriptive rights whether of
record or not, pertaining to any portion(s) of the Property; any rights of
adjoining land owners in any walls or fences, any discrepancies, conflicts, or
shortages in area or boundary lines, and any encroachments or overlapping of
improvements; all presently recorded and valid oil, gas, and/or other mineral
exceptions, rights of development or leases, royalty reservations and/or other
instruments constituting oil, gas, or other mineral interest severances of any
kind; all zoning and other ordinances, and other recorded instruments, but only
to the extent that same are still in effect; standby fees and taxes for the
current year having been prorated, and subsequent years, the payment of which
Grantee assumes; and subsequent assessments for this and prior years due to
change(s) in land usage, ownership, or both, the payment of which Grantee
assumes; and any conditions that would be revealed by a physical inspection and
survey of the Property; and to all takings by any governmental authorities or
transfers in lieu thereof (the "Permitted Exceptions").
TO HAVE AND TO HOLD the Property, as aforesaid, unto Grantee, its
successors and assigns, forever; and Grantor does hereby bind itself and its
successors and assigns, to WARRANT AND FOREVER DEFEND all and singular, the
Property unto Grantee, its successors and assigns, against every person
whomsoever lawfully claiming or to claim the same, or any part thereof by,
through, or under Grantor, but not otherwise, subject to the Permitted
Exceptions.
<PAGE>
This conveyance is made without covenants, representations or warranties of
any kind, express, implied or statutory, including without limitation, those
implied covenants described in Section 5.023 of the Texas Property Code, other
than the special warranty of title contained herein.
GRANTEE ACKNOWLEDGES AND BY ACCEPTANCE OF THIS DEED GRANTEE AGREES THAT IT
IS FULLY RELYING ON GRANTEE'S (OR GRANTEE'S REPRESENTATIVES') INSPECTIONS OF THE
PROPERTY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE
OR MAY BE MADE (OR PURPORTEDLY MADE) BY GRANTOR OR ANY OF ITS REPRESENTATIVES
EXCEPT AS SPECIFICALLY PROVIDED IN THIS DEED. GRANTEE ACKNOWLEDGES THAT GRANTEE
HAS (OR GRANTEE'S REPRESENTATIVES' HAVE), PRIOR TO THE EFFECTIVE DATE OF THIS
DEED, THOROUGHLY INSPECTED AND EXAMINED THE PROPERTY TO THE EXTENT DEEMED
NECESSARY BY GRANTEE IN ORDER TO ENABLE GRANTEE TO EVALUATE THE CONDITION OF THE
PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY, AND GRANTEE ACKNOWLEDGES THAT
GRANTEE IS RELYING SOLELY UPON ITS OWN (OR ITS REPRESENTATIVES') INSPECTION,
EXAMINATION, AND EVALUATION OF THE PROPERTY. AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS CONVEYANCE, GRANTEE IS ACCEPTING THE PROPERTY IN ITS "AS-
IS, WHERE-IS" CONDITION, WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
EXCEPT ONLY THE TITLE WARRANTIES EXPRESSLY SET FORTH IN THIS DEED. WITHOUT IN
ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR THE TITLE
WARRANTIES CONTAINED IN THIS DEED, THE CONVEYANCE OF THE PROPERTY ARE WITHOUT
ANY WARRANTY, AND GRANTOR AND GRANTOR'S PARTNERS, OFFICERS, AGENTS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AFFILIATES (COLLECTIVELY, "GRANTOR'S RELATED PARTIES")
HAVE MADE NO, AND EXPRESSLY AND SPECIFICALLY DISCLAIM, AND GRANTEE ACCEPTS THAT
GRANTOR AND GRANTOR'S RELATED PARTIES HAVE DISCLAIMED, ANY AND ALL
REPRESENTATIONS, GUARANTIES OR WARRANTIES, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW (EXCEPT AS TO TITLE WARRANTIES CONTAINED IN THIS DEED) OF OR
RELATING TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, OF OR RELATING TO: (I)
THE USE, INCOME POTENTIAL, EXPENSES, OPERATION, CHARACTERISTICS, OR CONDITIONS
OF THE PROPERTY AND THE SURFACE OR SUBSURFACE THEREOF, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY, DESIGN, OR
FITNESS FOR ANY SPECIFIC PURPOSE OR A PARTICULAR PURPOSE; (II) THE COMPLIANCE OF
THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES, OR REGULATIONS; (III) THE
ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE OR ABSENCE OF OR
CONTAMINATION BY HAZARDOUS MATERIALS, OR THE COMPLIANCE OF THE PROPERTY WITH
ALL REGULATIONS OR LAWS PERTAINING TO HEALTH OR THE ENVIRONMENT, INCLUDING, BUT
NOT LIMITED TO, THE COMPREHENSIVE
2
<PAGE>
ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, THE RESOURCE
CONSERVATION AND RECOVERY ACT, THE CLEAN WATER ACT, THE TEXAS HEALTH AND SAFETY
CODE, THE TEXAS SOLID WASTE DISPOSAL ACT, AND THE TEXAS WATER CODE, EACH AS MAY
BE AMENDED FROM TIME TO TIME, AND INCLUDING ANY AND ALL REGULATIONS, RULES, OR
POLICIES PROMULGATED THEREUNDER ("ENVIRONMENTAL LAWS"); AND (IV) THE SOIL
CONDITIONS, DRAINAGE, GEOLOGY, FLOODING CHARACTERISTICS, UTILITIES, SQUARE
FOOTAGE, OR OTHER CONDITIONS EXISTING IN, ON, AROUND OR UNDER THE PROPERTY.
GRANTEE HEREBY EXPRESSLY ASSUMES ALL RISKS, LIABILITIES, CLAIMS, DAMAGES, AND
COSTS, INCLUDING ANY LIABILITY WITH RESPECT TO ENVIRONMENTAL LAWS RESULTING OR
ARISING FROM OR RELATED TO THE PROPERTY OR THE OWNERSHIP, USE, CONDITION,
LOCATION, MAINTENANCE, REPAIR, OR OPERATION THEREOF. ADDITIONALLY, GRANTOR AND
GRANTOR'S RELATED PARTNERS ARE RELEASED FROM ANY AND ALL CLAIMS (WHETHER FOR
CONTRIBUTION, INDEMNITY, OR OTHERWISE) GRANTEE OR ITS HEIRS AND ASSIGNS MAY NOW
OR HEREAFTER HAVE UNDER ENVIRONMENTAL LAWS NOW OR HEREAFTER IN EFFECT, OR IN
CONNECTION WITH THE PRESENCE OF HAZARDOUS MATERIALS ON OR ABOUT THE PROPERTY.
[Signature Page Follows]
3
<PAGE>
IN WITNESS WHEREOF, this Special Warranty Deed has been executed to be
effective as of _______________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By:________________________________
Name:______________________________
Title:_____________________________
STATE OF ________________ (S)
(S)
COUNTY OF ________________ (S)
This instrument was acknowledged before me on ______________________, 2000,
by ____________________________, ____________________________ of
_________________________, a ________________________, on behalf of such
____________________.
-----------------------------------
Notary Public
[Seal]
4
<PAGE>
EXHIBIT A
(Legal Description of the Property)
[to be attached]
5
<PAGE>
EXHIBIT B
Form of Stock Power
STOCK POWER
FOR VALUE RECEIVED, Souther Investors Service Company, Inc. (successor in
interest by merger to T.M.C. Funding, Inc.) hereby assigns and transfers to
_____________________ the 1,000 shares of the common stock of Lajitas Utility
Company, a Texas corporation (the "Company"), represented by Certificate Number
1 herewith, and does hereby irrevocably constitute and appoint the Secretary of
the Company as attorney to transfer the said stock on the books of the Company.
Dated: _________________________, 2000
SOUTHERN INVESTORS SERVICE COMPANY, INC.
By:______________________________
Name:____________________________
Title:___________________________
<PAGE>
EXHIBIT C
Form of Bill of Sale
BILL OF SALE
SOUTHERN INVESTORS SERVICE COMPANY, INC., a Delaware corporation (the
"Seller"), pursuant to the Purchase Agreement, dated as of February _____, 2000
(the "PA"), between the Seller and ________________________________, a
_________________ (the "Buyer"), and in consideration of the payment by the
Buyer to the Seller of the Cash Purchase Price, the assumption by the Buyer of
the Assumed Liabilities, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, does hereby sell, convey, assign,
transfer and deliver to the Buyer and its successors and assigns, and the Buyer
does hereby purchase, acquire and take assignment and delivery from the Seller
of, all of the right, title and interest of the Seller in and to all of the
Transferred Assets excluding the Real Property and Assumed Contracts (the
"Transferred Property"), TO HAVE AND TO HOLD the Transferred Property, as
aforesaid, unto the Buyer, its successors and assigns forever; and the Seller
does hereby bind itself and its successors and assigns to WARRANT AND FOREVER
DEFEND all and singular, the Transferred Property unto the Buyer, its successors
and assigns, against every person whomsoever lawfully claiming or to claim the
same, or any part thereof, by, through or under the Seller, but not otherwise,
subject to the Permitted Liens and the limitations set forth in the PA.
The other representations, warranties, covenants, agreements, disclaimers,
and limitations with respect to the Transferred Property are those set forth in,
and are governed by the terms of, the PA.
This Bill of Sale shall be construed and interpreted in accordance with the
laws of the State of Texas, without regard to the principles of conflicts of law
thereof. Terms used and not defined herein have the same meaning as in the PA.
IN WITNESS WHEREOF, the Seller has caused this instrument to be duly
executed and delivered as of the _________ day of _______________, 2000.
SOUTHERN INVESTORS SERVICE COMPANY, INC.
By:______________________________________
Title:___________________________________
<PAGE>
EXHIBIT D
Form of Assignment and Assumption
ASSIGNMENT AND ASSUMPTION
SOUTHERN INVESTORS SERVICE COMPANY, INC., a Delaware corporation (the
"Seller"), pursuant to the Purchase Agreement, dated as of February _____, 2000
(the "PA"), between the Seller and ________________________________, a
_________________ (the "Buyer"), and in consideration of the payment by the
Buyer to the Seller of the Cash Purchase Price, the assumption by the Buyer of
the Assumed Liabilities, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, does hereby sell, convey, assign,
transfer and deliver to the Buyer and its successors and assigns, and the Buyer
does hereby purchase, acquire and take assignment and delivery from the Seller
of, all of the right, title and interest of the Seller in and to all of the
Seller's rights under the Assumed Contracts (the "Transferred Property"), TO
HAVE AND TO HOLD the Transferred Property, as aforesaid, unto the Buyer, its
successors and assigns forever; and the Seller does hereby bind itself and its
successors and assigns to WARRANT AND FOREVER DEFEND all and singular, the
Transferred Property unto the Buyer, its successors and assigns, against every
person whomsoever lawfully claiming or to claim the same, or any part thereof,
by, through or under the Seller, but not otherwise, subject to the Permitted
Liens and the limitations set forth in the PA.
The Buyer does hereby accept such assignment. The Buyer further assumes
and agrees to pay and perform in accordance with and subject to their respective
terms all of the Seller's obligations under the Assumed Contracts and all other
Assumed Liabilities. A list of Assumed Guest Deposits is attached hereto as
Exhibit A.
The other representations, warranties, covenants, agreements, disclaimers
and limitations with respect to the Transferred Property are those set forth in,
and are governed by the terms of, the PA. This Bill of Sale shall be construed
and interpreted in accordance with the laws of the State of Texas, without
regard to the principles of conflicts of law thereof. Terms used and not
defined herein have the same meaning as in the PA.
<PAGE>
IN WITNESS WHEREOF, the Seller and the Buyer have caused this instrument to
be duly executed and delivered as of the _________ day of _______________, 2000.
SOUTHERN INVESTORS SERVICE COMPANY, INC.
By:______________________________________
Title:___________________________________
[BUYER]
By:______________________________________
Title:___________________________________
2
<PAGE>
Exhibit A
to
Assignment and Assumption
The Assumed Guest Deposits are listed on the attached list.
<PAGE>
EXHIBIT D-1
Form of Assignment and Assumption of Municipal Water Rights
ASSIGNMENT AND ASSUMPTION OF MUNICIPAL WATER RIGHTS
STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF HARRIS (S)
THAT Southern Investors Service Company, Inc., a Delaware corporation and
successor in interest by merger to Arrow Investment Company, Inc. ("Grantor"),
for and in consideration of the sum of Ten Dollars ($10) and other good and
valuable consideration to it in hand paid by __________________________________,
a _________________ ("Grantee"), having a mailing address of _________________,
the receipt and sufficiency of which consideration are hereby acknowledged, has
ASSIGNED, SOLD and CONVEYED, and by these presents does hereby ASSIGN, SELL and
CONVEY, unto Grantee all of rights of Grantor to divert and use water from the
Rio Grande River for municipal purposes (the "Transferred Rights") as described
in, and subject to the terms and conditions of, the Certificate of Adjudication
No. 23-986 issued on August 18, 1977 by the Texas Water Commission to Arrow
Investment Company, Inc. (predecessor by merger to Grantor), and filed of record
in the irrigation contract records of Brewster County, Texas (vol. 1, page 70),
as amended by the Amendment to Certificate of Adjudication (Certificate No. 23-
986A) dated May 31, 1979 and filed of record in the irrigation contract records
of Brewster County, Texas (vol. 1, page 71), as further amended by the Amendment
to Certificate of Adjudication (Certificate No. 23-986B) dated January 22, 1990
as filed of record in Brewster County, Texas (Vol. 15, page 782) (such
Certificate of Adjudication, as so amended, being the "Certificate"). Grantee
acknowledges that concurrently herewith it has acquired from Grantor by separate
deed ownership of certain real property, which ownership of such real property
includes all of rights of Grantor to divert and use water from the Rio Grande
River for irrigation as described in the Certificate.
This assignment is made and accepted subject to the terms and provisions of
the Certificate and subject to recorded exceptions, easements, reservations,
rights-of-way, encroachments, encumbrances, restrictions, regulations,
ordinances, laws and conditions, and any other matters of record which are valid
and existing, to all matters which a correct survey would show, and to all
takings by any governmental authorities or transfers in lieu thereof (the
"Permitted Exceptions").
TO HAVE AND TO HOLD the Transferred Rights, as aforesaid, unto Grantee, its
successors and assigns, forever; and Grantor does hereby bind itself and its
successors and assigns, to WARRANT AND FOREVER DEFEND all and singular, the
Transferred Rights unto Grantee, its successors and assigns, against every
person whomsoever lawfully claiming or to claim the same, or any part thereof
by, through, or under Grantor, but not otherwise, subject to the Permitted
Exceptions.
2
<PAGE>
This conveyance is made without covenants, representations or warranties of
any kind, express, implied or statutory, including without limitation, those
implied covenants described in Section 5.023 of the Texas Property Code, other
than the special warranty of title contained herein.
The Grantee does hereby accept such assignment. Grantee further assumes
and agrees to pay and perform in accordance with and subject to their respective
terms all of the Grantor's obligations under the Certificate.
Grantor has executed and delivered this instrument and has ASSIGNED, SOLD
and CONVEYED the Transferred Rights, and Grantee has accepted this instrument
and has purchased the Transferred Rights ON AN AS IS, WHERE IS, WITH ALL FAULTS,
BASIS AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR
IMPLIED, IT BEING THE INTENTION OF GRANTOR AND GRANTEE TO EXPRESSLY NEGATE AND
EXCLUDE ALL REPRESENTATIONS AND WARRANTIES RELATING TO THE TRANSFERRED RIGHTS,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR ANY PARTICULAR USE OR PURPOSE, ALL WARRANTIES CREATED BY ANY
DESCRIPTION OF THE TRANSFERRED RIGHTS, AND ANY OTHER WARRANTIES AND
REPRESENTATIONS WHATSOEVER, EXCEPT THE WARRANTY OF TITLE SET FORTH HEREIN.
This instrument shall be construed and interpreted in accordance with the
laws of the State of Texas, without regard to the principles of conflicts of law
thereof.
[Signature Page Follows]
3
<PAGE>
IN WITNESS WHEREOF, this instrument has been executed to be effective as of
_______________, 2000.
Southern Investors Service Company, Inc. (successor by
merger to Arrow Investment Company, Inc.)
By:________________________________________
Name:______________________________________
Title:_____________________________________
[Name of Buyer]
By:________________________________________
Name:______________________________________
Title:_____________________________________
STATE OF ____________ (S)
(S)
COUNTY OF ___________ (S)
This instrument was acknowledged before me on ______________________, 2000,
by ____________________________, ____________________________ of Southern
Investors Service Company, Inc., a Delaware corporation, on behalf of such
corporation.
----------------------------------------
Notary Public
[Seal]
4
<PAGE>
STATE OF ______________ (S)
(S)
COUNTY OF _____________ (S)
This instrument was acknowledged before me on ______________________, 2000,
by ___________________________________, ___________________________ of
___________________________________, a ______________________, on behalf of such
_________________________.
----------------------------------------
Notary Public
[Seal]
5
<PAGE>
EXHIBIT E
Form of Certificate of Exemption
(attached)
<PAGE>
TEXAS RESALE CERTIFICATE
<TABLE>
<CAPTION>
Name of purchaser, firm or agency Phone (Area code and number)
- --------------------------------------------------------------------------------------------------------
<S> <C>
Address (Street & number, P.O. Box or Route number)
- --------------------------------------------------------------------------------------------------------
City, State, ZIP code
- --------------------------------------------------------------------------------------------------------
Texas Sales or Use Tax Permit Number (or out-of-state retailer's registration number or date applied for
Texas Permit - must contain 11 digits if from a Texas permit)
- --------------------------------------------------------------------------------------------------------
(Mexican retailer's must show their Federal Taxpayers Registry (RFC)
number on the certificate and give a copy of their Mexican registration
- ---------------------------- form to the seller.)
- --------------------------------------------------------------------------------------------------------
</TABLE>
I, the purchaser named above, claim the right to make a non-taxable purchase for
resale of the taxable items described below or on the attached order or invoice
form:
Seller: Southern Investors Service Company, Inc.
Street address: 2727 North Loop West
City, State, ZIP code: Houston, Texas 77008
Description of items to be purchased: inventory
Description of the type of business activity generally engaged in or type of
items normally sold by the purchaser: resort community being purchased from the
Seller
The taxable items described above, or on the attached order or invoice, will be
resold, rented, or leased by me within the geographical limits of the United
States of America, its territories and possessions, or within the geographical
limits of the United Mexican States, in their present form or attached to other
taxable items to be sold.
I understand that if I make any use of the items other than retention,
demonstration or display while holding them for sale, lease or rental, I must
pay sales tax on the items at the time of use based upon either the purchase
price or the fair market rental value for the period of time used.
I understand that it is a criminal offense to give a resale certificate to the
seller for taxable items that I know, at the time of purchase, are purchased for
use rather than for the purpose of resale, lease, or rental and, depending on
the amount of tax evaded, the offense may range from a Class C misdemeanor to a
felony of the second degree.
- --------------------------------------------------------------------------------
Purchaser Title Date
sign
here
- --------------------------------------------------------------------------------
This certificate should be furnished to the supplier. Do not send the completed
certificate to the Comptroller of Public Accounts.
2
<PAGE>
EXHIBIT F-1
Form of Seller's Closing Certificate
(Section 5.1)
Reference is made to the Purchase Agreement, dated as of February ___, 2000
(the "Purchase Agreement"), between Southern Investors Service Company, Inc. as
the "Seller" and ______________________ as the "Buyer." This certificate is
delivered pursuant to Section 5.1 of the Purchase Agreement.
The Seller hereby certifies to the Buyer that
(i) all of the agreements and covenants of the Seller to be performed or
complied with by the Seller on or before the Closing Date pursuant to the
Agreement have been performed or complied with in all material respects; and
(ii) the representations and warranties of the Seller contained in the
Agreement are true, correct and complete in all material respects on and as of
the date of the Closing Date with the same force and effect as though such
representations and warranties had been made or given on and as of such date,
except for such matters due to changes in facts from the date hereof required or
permitted by this Agreement and except for representations and warranties made
or given only as of a specified date.
SOUTHERN INVESTORS SERVICE COMPANY, INC.
By:________________________________________
Title:_____________________________________
<PAGE>
EXHIBIT F-2
Form of Buyer's Closing Certificate
(Section 6.1)
Reference is made to the Purchase Agreement, dated as of February ___, 2000
(the "Agreement"), between Southern Investors Service Company, Inc. as the
"Seller" and ______________________ as the "Buyer." This certificate is
delivered pursuant to Section 6.1 of the Agreement.
The Buyer hereby certifies to the Seller that
(i) all of the agreements and covenants of the Buyer to be performed or
complied with by the Buyer on or before the Closing Date pursuant to the
Agreement have been performed or complied with in all material respects; and
(ii) the representations and warranties of the Buyer contained in the
Agreement are true, correct and complete in all material respects on and as of
the date of the Closing Date with the same force and effect as though such
representations and warranties had been made or given on and as of such date,
except for representations and warranties made or given only as of a specified
date.
[Name of Buyer]
By:________________________________________
Title:_____________________________________
<PAGE>
TRANSACTION SCHEDULE
TO
PURCHASE AGREEMENT
Buyer: Stephen R. Smith or assigns
Address for Buyer: 16004 Chateau Ave
------------------------------
Austin, Texas 78734
------------------------------
Attention: Stephen R. Smith
-------------------
Facsimile:
-------------------
Confirm:
---------------------
with a copy to:
------------------------------
------------------------------
------------------------------
Attention:
--------------------
Facsimile:
--------------------
Confirm:
----------------------
Cash Purchase Price: $3,950,000.00
Earnest Money (10% of sum of Cash Purchase Price): $ 395,000.00
Due at Closing:
Cash Purchase Price (less Earnest Money paid) $3,555,000.00
Auction Fee payable by Buyer (7.5% of Cash Purchase Price): $ 296,250.00
Total Due at Closing: $3,851,250.00
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
REAL ESTATE AUCTION
BREWSTER COUNTY, TEXAS
FEBRUARY 24, 1999
This Real Estate Purchase and Sale Agreement ("Agreement") is entered into as
of February 24, 2000, by and between SOUTHERN INVESTORS SERVICES COMPANY, INC.,
a Delaware corporation ("Seller") and the person or entity named as Buyer
("Buyer") on the Transaction Schedule attached hereto.
1. THE PROPERTY: Seller agrees to sell and Buyer agrees to purchase the real
estate described on Exhibit "A" hereto (the "Property") for the price upon
the terms and conditions as set forth below:
2. THE PRICE: The total purchase price ("Purchase Price") (including the seven
and one-half percent (7.5%) Auction Fee) payable at closing in cash or by
wire transfer of immediately available funds to the Escrow Agent shall be
the amount described on the Transaction Schedule.
3. THE TITLE: The Seller shall convey 8513 (plus or minus) acres of the
Property (as designated on Exhibit "A") by Special Warranty Deed in form of
Exhibit "B" attached hereto, subject to recorded exceptions, reservations,
conditions, restrictions, mineral, royalty, and timber interests and
easements of record reflected on the title commitment provided by the
Escrow Agent, a copy of which is attached hereto as Exhibit "C", and any
other matters of record which are valid and existing, to all matters which
a correct survey would show, to all takings by any governmental authorities
or transfers in lieu thereof, and to any valid leases (copies of which
shall be delivered to Buyer with this Agreement). If title insurance is
desired, it shall be at the Buyer's option and expense. The Seller shall
convey 3430 (plus or minus) acres of the Property (as designated on
Exhibit "A-1") by Quitclaim Deed in the form of Exhibit "D" attached hereto
for which conveyance title insurance will not be available.
4. THE SURVEY: If a survey is desired, it will be at the Buyer's option and
expense.
5. CLOSING: This sale and purchase transaction shall be closed by Stewart
Title Company, Attn: George Houghton ("Escrow Agent") at 1111 Bagby, Suite
2000, Houston, Texas 77002, (Phone, 713-651-0810); on or before March 31,
2000 ("Closing Date"), unless otherwise agreed in writing by Seller and
Buyer.
1
<PAGE>
6. DEFAULTS: In the event Seller defaults in the performance of any of
Seller's obligations under this Agreement for any reason, except Buyer's
default or the termination of this Agreement by Buyer or Seller pursuant to
any right herein provided, Buyer's sole and exclusive remedy shall be to
either (i) terminate this Agreement in which event the Deposit shall be
immediately delivered by Closing Agent to Buyer or (ii) enforce specific
performance of this Agreement. In the event Buyer elects to enforce
specific performance, such action must be initiated within thirty (30) days
from the date Buyer is notified of Seller's refusal to proceed to Closing.
In the event Buyer fails to perform any obligation pursuant to the terms of
this Agreement, Seller's exclusive remedy shall be to retain the Deposit
above, as agreed liquidated damages, and as a reasonable forecast of just
compensation for the harm that would be caused by Buyer's breach, Buyer and
Seller acknowledging that the actual damages for such breach would be
difficult or impossible to calculate. Additionally, at its option, Seller
may have the additional right to enforce specific performance of this
Agreement. Except for the specific remedies set forth above, neither party
shall have any other rights or remedies in the event of a breach of this
Agreement, and each party specifically waives any and all rights and
remedies not expressly set forth in this Agreement.
SELLER AND BUYER HEREBY WAIVE ALL PROVISIONS OF THE TEXAS DECEPTIVE TRADE
PRACTICES ACT, AS AMENDED (OTHER THAN SECTION 17.555, PERTAINING TO
CONTRIBUTION AND INDEMNITY) TO THE EXTENT APPLICABLE TO THE TRANSACTION
CONTEMPLATED HEREBY.
7. EARNEST MONEY: Buyer has delivered to Stewart Title Company, as Escrow
Agent, the amount specified as earnest money on the Transaction Schedule,
which is equal to ten percent (10%) of the total Purchase Price in
certified funds or by wire transfer ("Earnest Money"). The Escrow Agent
shall apply the Earnest Money, together with interest thereon, against the
Purchase Price at or upon Closing, or otherwise pay to the party entitled
to receive the Earnest Money in accordance with this Agreement.
8. PRORATIONS: Prorations and adjustments shall be made at closing as follows:
ad valorem taxes shall be prorated to the date of closing on the basis of
the latest available information and assumed by the Buyer. These taxes are
subject to readjustment and reproration when the actual tax bills are
received or the actual tax amounts for the year of closing become known.
9. BROKERAGE: Each party represents and warrants that no real estate broker
or salesman has been involved in this transaction except The National
Auction Group, Inc.
2
<PAGE>
("Auction Company") and _______ N/A _____________________________________
("Participating Broker"). Any commission due the Auction Company shall be
paid before any part of the sales proceeds are disbursed to any other
person or entity. The parties agree that all deposits and purchase funds
shall be paid to the Escrow Agent for its proper disbursement. If the
Buyer defaults in closing this Agreement, the Deposit shall be allocated as
follows: (i) promotion costs shall be reimbursed to Seller, (ii) the
balance, if any, shall be divided equally between Auction Company and
Seller. If Seller seeks and obtains a judgment for specific performance of
any Agreement, Auction Company shall be paid the full amount of its
commission due in respect thereof.
10. CLOSING DOCUMENTS: (a) To perform its closing obligations hereunder, Seller
shall execute and deliver, in form for recording, said Special Warranty
Deed and do and perform all other acts and things that are required hereby
and do and perform all other acts and things as shall reasonably be
required by the Escrow Agent including execute and deliver such Certificate
in form of Exhibit "E" attached hereto to comply with the provisions of
(S)1445 of the Internal Revenue Code; (b) to perform its closing
obligations hereunder, Buyer shall execute and deliver to Seller the
Buyer's Certificate Regarding Property Condition ("Certificate") in form
attached hereto as Exhibit "F" and deliver all documents and do and perform
all other acts and things that are required hereby and do and perform all
other acts and things as shall be required by the Closing Agent as
conditions precedent (i) to its making and showing on its closing statement
to Buyer and Seller the Purchase Price, all prorations, expenses and costs
as herein provided for and contemplated, and (ii) to its delivering to
Seller the remainder of the Purchase Price under the terms hereof.
11. CLOSING COSTS: Buyer and Seller shall each pay one-half (1/2) of the escrow
fees, if any, incident to this transaction. Buyer shall pay (i) the basic
title insurance premium for a Standard Texas Form Owner's Title Insurance
Policy, (ii) for any deletions it so desires and (iii) for any survey.
Seller shall pay the cost of recording the Deed. Each party shall be
responsible for payment of its own attorney's fees.
12. SELLER'S REPRESENTATIONS:
A) Seller (i) represents to Buyer that each of the following is true and
correct as of the date this Agreement is executed by Seller and (ii) agrees
that on the Closing Date, Seller will represent unto Buyer that each of the
following is true and correct (to the extent the same are in fact then true
and correct) as of the Closing Date:
1. Seller has the full right, power, and authority to enter into
this Agreement and to carry out the obligations of Seller set
forth in this Agreement;
3
<PAGE>
2. The person or persons executing this Agreement on behalf of
Seller are fully authorized to execute this Agreement on behalf
of Seller;
3. Seller has received no written notice and has no actual knowledge
of any pending condemnation proceedings affecting the Property or
any part thereof;
4. Seller has received no written notice and has no actual knowledge
of any pending litigation affecting Seller or the Property which
would in any way constitute a lien, claim or material obligation
of any kind against the Property;
5. To Seller's actual knowledge, no person, firm or entity has any
rights in the Property or right to acquire the Property or any
part thereof;
6. This Agreement and the sale of the Property will not cause to be
imposed on the Buyer any liability to withhold any amount
pursuant to (S) 1445 of the Internal Revenue Code (and the
implementing regulations);
All references in this Agreement to notices or written notices
received by Seller shall mean and refer only to written notices received by
Mark A. Kilkenny of Seller and all references in this Agreement to
"Seller's actual knowledge" or "the actual knowledge of Seller" or similar
references shall mean and refer only to the current, actual knowledge of
Mark A. Kilkenny with the express limitations and qualifications that Mark
A. Kilkenny has not made any special investigation or inquiry, and has no
duty or obligation of reasonably diligent investigation or inquiry, or any
other duty or obligation, to acquire or attempt to acquire notice,
knowledge or information beyond or in addition to the current, actual
knowledge of Mark A. Kilkenny. By virtue of the limitations and
qualifications herein expressed, it is the intention of Seller expressly to
negate the applicability of any principle or theory of "negligent
ignorance" that would or might impute to Seller or charge Seller with, as a
matter of law, actual notice or knowledge as a result of those things that
a reasonably diligent inquiry and exercise of the means of information at
hand would or might disclose to Seller.
B) The foregoing representations of Seller shall survive the Closing only
for a period terminating on the date that is thirty (30) days from and
after the Closing Date. Any proceeding or action for enforcement of said
representations, and any claims for damages as a result of the breach
thereof, must be brought by Buyer within the time period described above,
or Buyer shall be deemed conclusively to have waived any claims, rights,
causes of action or remedies with regard to alleged breaches of the
representations of Seller. With respect to any such claim for damages,
Buyer shall not be entitled to seek or recover, and Buyer hereby expressly
waives any rights to seek or recover, any punitive, exemplary or
consequential damages. The provisions of this paragraph shall survive the
Closing.
4
<PAGE>
13. PROPERTY CONDITION: This Property is selling subject to any existing
rights-of way, easements, encroachments, restrictive covenants, zoning
regulations, governmental agency regulations, environmental conditions,
leases, adverse possession, encumbrances, mineral, timber or royalty
interests, and assessments. To the maximum extent permitted by applicable
law, this sale is made and will be made without representation, covenant,
or warranty of any kind (whether express, implied, or, to the maximum
extent permitted by applicable law, statutory) by Seller. As a material
part of the consideration for this Agreement, Buyer agrees to accept the
Property on an "as is" and "where is" basis, with all faults, and without
any representation or warranty, all of which Seller hereby disclaims,
except for Seller's Warranties. Except for Seller's Warranties, no
warranty or representation is made by Seller as to fitness for any
particular purpose, merchantability, design, quality, condition, operation
or income, compliance with drawings or specifications, absence of defects,
absence of hazardous or toxic substances, absence of faults, flooding, or
compliance with laws and regulations including, without limitation, those
relating to health, safety, and the environment. Buyer acknowledges that
Buyer has entered into this Agreement with the intention of making and
relying upon its own investigation of the physical, environmental, economic
use, compliance, and legal condition of the Property and that Buyer is not
now relying, and will not later rely, upon any representations and
warranties made by Seller or anyone acting or claiming to act, by, through
or under or on Seller's behalf concerning the Property. ADDITIONALLY,
BUYER AND SELLER HEREBY AGREE THAT (A) BUYER IS TAKING THE PROPERTY "AS
IS" WITH ALL LATENT AND PATENT DEFECTS AND THAT EXCEPT FOR SELLER'S
WARRANTIES, THERE IS NO WARRANTY BY SELLER THAT THE PROPERTY IS FIT FOR A
PARTICULAR PURPOSE, (B) EXCEPT FOR SELLER'S WARRANTIES, BUYER IS NOT
RELYING UPON ITS EXAMINATION OF THE PROPERTY, AND (C) BUYER TAKES THE
PROPERTY UNDER THIS AGREEMENT UNDER THE EXPRESS UNDERSTANDING THAT THERE
ARE NO EXPRESS OR IMPLIED WARRANTIES (EXCEPT FOR THE LIMITED WARRANTIES OF
TITLE SET FORTH IN THE DEED AND THE SELLER'S WARRANTIES. THE PROVISIONS OF
THIS PARAGRAPH SHALL SURVIVE INDEFINITELY ANY CLOSING OR TERMINATION OF
THIS AGREEMENT AND SHALL NOT BE MERGED INTO THE CLOSING DOCUMENTS. THE
ABOVE PROVISION SHALL BE INCORPORATED INTO THE DEED TO BE DELIVERED AT
CLOSING.
14. RISK OF LOSS: Risk of condemnation or fire or other casualty loss shall
remain with Seller until Closing, and if any condemnation or unrepaired
fire or other casualty damage occurs, Buyer has the option of (i) closing
without diminution of the Purchase Price upon taking assignments from
Seller (which Seller covenants to make) of all condemnation awards and/or
fire and other casualty insurance claims or (ii) of releasing Seller
hereunder and having the return of the Deposit paid by Buyer on account
hereof.
5
<PAGE>
15. NOTICES: Notices required or permitted hereby shall be in writing, mailed
postage prepaid by certified or registered mail, return receipt requested,
to the Seller and the Buyer at their respective addresses as set forth
below, or to such other address designated by either party by written
notice to that effect.
16. ENTIRE AGREEMENT: This Agreement represents the entire and final Agreement
between the parties, superseding and canceling all prior oral and written
communications and agreements between them, their agents and
representatives, and this Agreement may not subsequently be changed or
amended except in writing signed by the parties.
17. LEGAL EXPENSES: In the event of litigation arising out of the terms and
conditions of this Agreement, the prevailing party in such litigation shall
have the right to recover from the non-prevailing party reasonable
attorney's fees and court costs incurred as a result of such litigation.
18. SCOPE AND INTERPRETATION: This Agreement shall be governed and interpreted
by the laws of the State of Texas.
19. EXECUTION IN COUNTERPART: This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one Agreement. To facilitate execution
of this Agreement, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages, which facsimile counterparts
shall be fully binding as originals.
20. CONSTRUCTION. The parties acknowledge that the parties and their counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
21. ORGANIZATION AND AUTHORITY: By its signature below, each party represents
and warrants to the other that it has the full right and authority and has
obtained any and all consents required to enter into this Agreement, to
perform the obligations provided for in this Agreement, and to consummate
the sale contemplated herein. Each party further represents and warrants
to the other that this Agreement has been duly and properly executed and
constitutes the valid and binding obligation of said party, enforceable in
accordance with the terms of this Agreement.
22. CONFIDENTIALITY: Buyer shall make no public announcement or disclosure of
any information related to this Agreement to outside brokers or third
parties, before or after the Closing, without the prior written consent of
Seller.
23. RELATIONSHIP OF PARTIES: No provision of this Agreement, and no act or
failure to act of either of the parties hereto, shall be deemed or
construed by any party, person, entity, or court to create a relationship
between the parties of principal and agent,
6
<PAGE>
partnership, joint venture, or any other association whatsoever, other than
the relationship of a vendor and a vendee. The parties hereto are not in
any fiduciary relationship with respect to each other.
24. CAPTIONS: The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe, limit or affect the scope or
intent of this Agreement or any of its provisions.
25. EXHIBITS INCORPORATED: All Exhibits and Attachments to this Agreement are
hereby incorporated herein by this reference in their entirety and for all
purposes.
26. ATTACHMENTS HERETO:
Transaction Schedule
Exhibit A and A-1 - Property;
Exhibit B - Form of Deed;
Exhibit C - Title Commitment.
Exhibit D - Quitclaim Deed
Exhibit E - FIRPTA Affidavit
Exhibit F - Buyer's Certificate Regarding Property Condition
BUYER REPRESENTS AND WARRANTS THAT BUYER AND BUYER'S EXPERTS HAVE THOROUGHLY AND
CAREFULLY INSPECTED THE PROPERTY AND AGREE TO PURCHASE SAME "AS IS, WHERE IS,"
"WITH ALL FAULTS, IF ANY."
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on February 24,
2000.
SELLER:
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By: /s/ MARK A. KILKENNY
----------------------------------
Name: Mark A. Kilkenny
--------------------------------
Title: Vice President
-------------------------------
ADDRESS
2727 North Loop West, Suite 200
Houston, TX 77008
(713) 802-7900
PHONE NUMBER
BUYER:
SS#
Name: /s/ STEPHEN R. SMITH
ADDRESS
PHONE NUMBER
8
<PAGE>
TITLE COMPANY'S AGREEMENT AND RECEIPT
On this ______ day of February 2000, Stewart Title Company, as the Title
Company named in the foregoing Agreement, hereby acknowledges receipt of (i)
______ (___) counterparts of this Agreement executed by the Seller and the Buyer
and (ii) the Earnest Money in the form specified below required under Paragraph
7 of this Agreement and hereby agrees to act as Title Company in strict
accordance with the terms of this Agreement.
STEWART TITLE COMPANY
By:
Its: ___________________ President
Form in which Earnest Money delivered: _________________________
9
<PAGE>
TRANSACTION SCHEDULE
TO
PURCHASE AGREEMENT
See Transaction Schedule to Purchase Agreement for Lajitas Resort Purchase
Agreement - Tract I dated as of February 24, 2000
10
<PAGE>
SPECIAL WARRANTY DIED - SOUTH TRACT
EXHIBIT A
Section Block Original Grantee Abst. Acres m/l
62 (NE/4 & NW/4) 341 TC Ry. Co. 414.35
63 341 TC Ry. Co. 640
64 341 TC Ry. Co. 640
65 341 TC Ry. Co. 320
(640 ac. SAVE AND EXCEPT: SE/4-SW4 conveyed is Vol. 221, P. 739, DR;
NE/4-SE/4 conveyed in Vol. 32, P. 659, OPR;
NE/4-NE/4 conveyed to Vol. 38, P. 340, OPR;
NW/4-NE/4 conveyed in Vol. 53, P.113, OPR;
NW/4 conveyed in Vol 96, P. 308, OPR;
66 341 TC Ry. Co. 343.5
67 341 TC Ry. Co. 1570 216.87
(640 ac. SAVE AND EXCEPT: 23.13 ac. conveyed in Vol. 249, P. 555, DR
SE/4-NW/4 conveyed in Vol. 29, P. 259, OPR;
SW/4-NW/4 conveyed in Vol. 29, P. 261, OPR;
NW/4-SW/4 conveyed in Vol. 30, P. 100, OPR
NW/4-SE/4 conveyed in Vol. 48, P. 561, OPR;
NW/4-NE/4 conveyed in Vol. 62, P. 193, OPR;
SE/4-NE/4 conveyed to Vol. 70, P. 332, OPR;
SW/4-NE/4 conveyed in Vol. 74, p. 313, OPR;
NW/4-NW/4 conveyed in Vol. 92, P. 161, OPR;
NE/4-NW/4 conveyed in Vol. 114, P. 2 OPR;
NE/4-NE/4 conveyed in VOL 115, P. 284, OPR;
87.43 ac. conveyed in Vol. 53, P. 190, OPR;
74 341 TC Ry. Co. lying South of Hwy. 170
75 341 TC Ry. Co. 640
76 341 TC Ry. Co. 1574 560
640 ac. SAVE AND EXCEPT the E/2-SE/4 conveyed in Vol. 224, P. 75 DR
81 341 TC Ry. Co. 1577 640
82 341 TC Ry. Co. containing 612.11 acres m/l (640 ac.
SAVE & EXCEPT 13.82 ac. conveyed in 258, Page 757, Deed Records, and
14.07 ac. conveyed in Vol. 16, Page 4, Official Public Records.
83 341 TC Ry. Co. lying South of Hwy. 170
86 341 TC Ry. Co lying South of Hwy. 170
87 341 TC Ry. Co. 1580 644
92 341 TC Ry. Co. 16366 419.6
94 341 TC Ry. Co. lying South of Hwy. 170
95 341 TC Ry. Co. lying South of Hwy. 170
<PAGE>
EXHIBIT A-1
PROPERTY
All that certain real property located in the County of Brewster, State of
Texas, described as follows, to-wit:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Abstract Block Cert. Survey Reference Original No. of Accession,
No. No. No. No. to Deed Grantee Acres Map No.
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
7,684 341 2,110 88 None TC Ry: Trs. 1, 2, 3, 440 237
6, 11-22, 27-46, 48-62,
65-70, 89, 90, 93-101,
108-117, 119-128
- -------------------------------------------------------------------------------------------------------------------------------
1,377 17 1,921 21 None GH & SA Ry: Trs. 2, 3, 360 178
5, 6, 9, 10, 11, 13, 16
- -------------------------------------------------------------------------------------------------------------------------------
1,370 17 1,914 7 None GH & SA Ry: Trs. 1, 3, 7, 8, 440 178
9, 10, 11, 14, 15, 16
- -------------------------------------------------------------------------------------------------------------------------------
1,371 17 1,915 9 None GH & SA Ry: Trs. 1, 5, 6, 7, 350 178
9, 14, 15, 16 and 30 acres
of Tr. 10
- -------------------------------------------------------------------------------------------------------------------------------
1,379 17 1,923 25 None GH & SA Ry: Except Trs. 1, 4, 440 178
7, 9, 14
- -------------------------------------------------------------------------------------------------------------------------------
1,375 17 17 None GH & SA Ry: Except Trs. 1, 3, 480 178
4, 13
- -------------------------------------------------------------------------------------------------------------------------------
1,382 17 31 None GH & SA Ry: Trs. 2, 3, 6, 7, 280 178
8, 10, 15
- -------------------------------------------------------------------------------------------------------------------------------
17 23 GH & SA Ry: Trs. 2, 3, 4, 7, 320 178
8, 12, 14, 16
- -------------------------------------------------------------------------------------------------------------------------------
17 33 GH & SA Ry: Trs. 5, 7, 8, 12 160
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PART SECTION BLOCK ORIGINAL GRANTEE ACRES #
- --------------------------------------------------------------------------------
SW 1/4 OF SE 1/4 19 17 GH & SA Ry. Co. 40
- --------------------------------------------------------------------------------
SE 1/4 OF SW 1/4 19 17 GH & SA Ry. Co. 40
- --------------------------------------------------------------------------------
SE 1/4 OF NE 1/4 19 17 GH & SA Ry. Co. 40
- --------------------------------------------------------------------------------
NE 1/4 OF NE 1/4 19 17 GH & SA Ry. Co. 40
- --------------------------------------------------------------------------------
Being the same land conveyed to Arrow Investment Co., Inc. Roy Seaberg and W.A.
Conner in that certain deed from D.C. Curry dated July 26, 1966, and recorded in
Volume 154, Page 538 of the Deed Records of Brewster County, Texas and/or the
same land conveyed to Arrow Investment Co. Inc. by Merritt L. Hopson in that
certain deed dated January 25, 1974 recorded in Volume 184, Page 179 of the Deed
Records of Brewster County, Texas. To the extent that the deeds overlapped, it
is the intent of Grantor to convey any and all of its right, title and interest
in the property described herein and in the deeds referred to above.
<PAGE>
EXHIBIT B
FORM OF DEED
SPECIAL WARRANTY DEED
STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF BREWSTER (S)
THAT Southern Investors Service Company, Inc., a Delaware corporation
("Grantor"), for and in consideration of the sum of Ten Dollars ($10) and other
good and valuable consideration to it in hand paid by
__________________________________, a _________________ ("Grantee"), having a
mailing address of ____________________________, the receipt and sufficiency of
which consideration are hereby acknowledged, has GRANTED, BARGAINED, SOLD and
CONVEYED, and by these presents does hereby GRANT, BARGAIN, SELL and CONVEY,
unto Grantee all of the real property described in Exhibit A attached hereto and
made a part hereof for all purposes, together with all of Grantor's right, title
and interest in and to all easements, rights of way, reservations, privileges,
appurtenances, any buildings, structures, fixtures and improvements thereon, and
other estates and rights of Grantor pertaining to the real property
(collectively, the "Property").
This conveyance is made and accepted subject to all easements,
encumbrances, restrictions, rights-of-way and prescriptive rights whether of
record or not, pertaining to any portion(s) of the Property; any rights of
adjoining land owners in any walls or fences, any discrepancies, conflicts, or
shortages in area or boundary lines, and any encroachments or overlapping of
improvements; all presently recorded and valid oil, gas, and/or other mineral
exceptions, rights of development or leases, royalty reservations and/or other
instruments constituting oil, gas, or other mineral interest severances of any
kind; all zoning and other ordinances, and other recorded instruments, but only
to the extent that same are still in effect; standby fees and taxes for the
current year having been prorated, and subsequent years, the payment of which
Grantee assumes; and subsequent assessments for this and prior years due to
change(s) in land usage, ownership, or both, the payment of which Grantee
assumes; and any conditions that would be revealed by a physical inspection and
survey of the Property; and to all takings by any governmental authorities or
transfers in lieu thereof (the "Permitted Exceptions").
TO HAVE AND TO HOLD the Property, as aforesaid, unto Grantee, its
successors and assigns, forever; and Grantor does hereby bind itself and its
successors and assigns, to WARRANT AND FOREVER DEFEND all and singular, the
Property unto Grantee, its successors and assigns, against every person
whomsoever lawfully claiming or to claim the same, or any part thereof by,
through, or under Grantor, but not otherwise, subject to the Permitted
Exceptions.
<PAGE>
This conveyance is made without covenants, representations or warranties of
any kind, express, implied or statutory, including without limitation, those
implied covenants described in Section 5.023 of the Texas Property Code, other
than the special warranty of title contained herein.
GRANTEE ACKNOWLEDGES AND BY ACCEPTANCE OF THIS DEED GRANTEE AGREES THAT IT
IS FULLY RELYING ON GRANTEE'S (OR GRANTEE'S REPRESENTATIVES') INSPECTIONS OF THE
PROPERTY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE
OR MAY BE MADE (OR PURPORTEDLY MADE) BY GRANTOR OR ANY OF ITS REPRESENTATIVES
EXCEPT AS SPECIFICALLY PROVIDED IN THIS DEED. GRANTEE ACKNOWLEDGES THAT GRANTEE
HAS (OR GRANTEE'S REPRESENTATIVES' HAVE), PRIOR TO THE EFFECTIVE DATE OF THIS
DEED, THOROUGHLY INSPECTED AND EXAMINED THE PROPERTY TO THE EXTENT DEEMED
NECESSARY BY GRANTEE IN ORDER TO ENABLE GRANTEE TO EVALUATE THE CONDITION OF THE
PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY, AND GRANTEE ACKNOWLEDGES THAT
GRANTEE IS RELYING SOLELY UPON ITS OWN (OR ITS REPRESENTATIVES') INSPECTION,
EXAMINATION, AND EVALUATION OF THE PROPERTY. AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS CONVEYANCE, GRANTEE IS ACCEPTING THE PROPERTY IN ITS "AS-
IS, WHERE-IS" CONDITION, WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
EXCEPT ONLY THE TITLE WARRANTIES EXPRESSLY SET FORTH IN THIS DEED. WITHOUT IN
ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR THE TITLE
WARRANTIES CONTAINED IN THIS DEED, THE CONVEYANCE OF THE PROPERTY ARE WITHOUT
ANY WARRANTY, AND GRANTOR AND GRANTOR'S PARTNERS, OFFICERS, AGENTS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AFFILIATES (COLLECTIVELY, "GRANTOR'S RELATED PARTIES")
HAVE MADE NO, AND EXPRESSLY AND SPECIFICALLY DISCLAIM, AND GRANTEE ACCEPTS THAT
GRANTOR AND GRANTOR'S RELATED PARTIES HAVE DISCLAIMED, ANY AND ALL
REPRESENTATIONS, GUARANTIES OR WARRANTIES, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW (EXCEPT AS TO TITLE WARRANTIES CONTAINED IN THIS DEED) OF OR
RELATING TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, OF OR RELATING TO: (I)
THE USE, INCOME POTENTIAL, EXPENSES, OPERATION, CHARACTERISTICS, OR CONDITIONS
OF THE PROPERTY AND THE SURFACE OR SUBSURFACE THEREOF, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY, DESIGN, OR
FITNESS FOR ANY SPECIFIC PURPOSE OR A PARTICULAR PURPOSE; (II) THE COMPLIANCE OF
THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES, OR REGULATIONS; (III) THE
ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE OR ABSENCE OF OR
CONTAMINATION BY HAZARDOUS MATERIALS, OR THE COMPLIANCE OF THE PROPERTY WITH
ALL REGULATIONS OR LAWS PERTAINING TO HEALTH OR
<PAGE>
THE ENVIRONMENT, INCLUDING, BUT NOT LIMITED TO, THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT, THE RESOURCE CONSERVATION AND RECOVERY
ACT, THE CLEAN WATER ACT, THE TEXAS HEALTH AND SAFETY CODE, THE TEXAS SOLID
WASTE DISPOSAL ACT, AND THE TEXAS WATER CODE, EACH AS MAY BE AMENDED FROM TIME
TO TIME, AND INCLUDING ANY AND ALL REGULATIONS, RULES, OR POLICIES PROMULGATED
THEREUNDER ("ENVIRONMENTAL LAWS"); AND (IV) THE SOIL CONDITIONS, DRAINAGE,
GEOLOGY, FLOODING CHARACTERISTICS, UTILITIES, SQUARE FOOTAGE, OR OTHER
CONDITIONS EXISTING IN, ON, AROUND OR UNDER THE PROPERTY. GRANTEE HEREBY
EXPRESSLY ASSUMES ALL RISKS, LIABILITIES, CLAIMS, DAMAGES, AND COSTS, INCLUDING
ANY LIABILITY WITH RESPECT TO ENVIRONMENTAL LAWS RESULTING OR ARISING FROM OR
RELATED TO THE PROPERTY OR THE OWNERSHIP, USE, CONDITION, LOCATION, MAINTENANCE,
REPAIR, OR OPERATION THEREOF. ADDITIONALLY, GRANTOR AND GRANTOR'S RELATED
PARTNERS ARE RELEASED FROM ANY AND ALL CLAIMS (WHETHER FOR CONTRIBUTION,
INDEMNITY, OR OTHERWISE) GRANTEE OR ITS HEIRS AND ASSIGNS MAY NOW OR HEREAFTER
HAVE UNDER ENVIRONMENTAL LAWS NOW OR HEREAFTER IN EFFECT, OR IN CONNECTION WITH
THE PRESENCE OF HAZARDOUS MATERIALS ON OR ABOUT THE PROPERTY.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, this Special Warranty Deed has been executed to be
effective as of _______________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
STATE OF TEXAS (S)
(S)
COUNTY OF (S)
This instrument was acknowledged before me on ______________________, 2000,
by ____________________________, ____________________________ of Southern
Investors Services Company, Inc., a Delaware corporation, __________________, on
behalf of such corporation.
-----------------------------------------
Notary Public
[Seal]
<PAGE>
EXHIBIT A
(Legal Description of the Property)
<PAGE>
EXHIBIT C
THE FOLLOWING COMMITMENT FOR TITLE INSURANCE IS NOT VALID UNLESS YOUR NAME AND
THE POLICY AMOUNT ARE SHOWN IN SCHEDULE A, AND OUR AUTHORIZED REPRESENTATIVE HAS
COUNTERSIGNED BELOW.
COMMITMENT FOR TITLE INSURANCE
ISSUED BY
STEWART TITLE
GUARANTY COMPANY
We, STEWART TITLE GUARANTY COMPANY, will issue our title insurance policy
or policies (the Policy) to You (the proposed insured) upon payment of the
premium and other charges due, and compliance with the requirements in Schedule
B and Schedule C. Our Policy will be in the form approved by the Texas
Department of Insurance at the date of issuance, and will insure your interest
in the land described in Schedule A. The estimated premium for our Policy and
applicable endorsements is shown on Schedule D. There may be additional charges
such as recording fees, and expedited delivery expenses.
This Commitment ends ninety (90) days from the effective date, unless the
Policy is issued sooner, or failure to issue the Policy is our fault. Our
liability and obligations to you are under the express terms of this Commitment
and end when this Commitment expires.
In witness whereof, the Company has caused this commitment to be signed and
sealed as of the effective date of commitment as shown in Schedule A, the
commitment to become valid and binding only when countersigned by an authorized
signatory.
STEWART TITLE
GUARANTY COMPANY
/s/ Stewart Morris Sr. /s/ Malcolm S. Morris
- -------------------------------- -------------------------------------
Chairman of the Board President
Countersigned by:
/s/ Joy B. Adams
- ---------------------------------
Authorized Signatory Joy B. Adams
ELLYSON ABSTRACT & TITLE CO.
- ---------------------------------
Company
Alpine, Texas
- ---------------------------------
City, State
<PAGE>
CONDITIONS AND STIPULATIONS
1. If you have actual knowledge of any matter which may affect the title or
mortgage covered by this Commitment, that is not shown in Schedule B, you
must notify us in writing. If you do not notify us in writing, our liability
to you is ended or reduced to the extent that your failure to notify us
affects our liability. If you do notify us, or we learn of such matter, we
may amend Schedule B, but we will not be relieved of liability already
incurred.
2. Our liability is only to you, and others who are included in the definition
of Insured in the Policy to be issued. Our liability is only for actual loss
incurred in your reliance on this Commitment to comply with its requirements
or to acquire the interest in the land. Our liability is limited to the
amount shown in Schedule A of this commitment and will be subject to the
following terms of the Policy: Insuring Provisions, Conditions and
Stipulations, and Exclusions.
All notices required to be given the Company and any statement in writing
required to be furnished the Company shall be addressed to it at P.O. Box 2029,
Houston, Texas 77252.
STEWART TITLE
GUARANTY COMPANY
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE A
Effective Date: February 1, 2000, 8:00 am G.F. No. or File No. 99125089
Commitment No._____________ issued: February 20, 2000, 4:00 pm
(if applicable)
1. The policy or policies to be issued are:
(a) OWNER POLICY OF TITLE INSURANCE (Form T-1)
(Not applicable for improved one-to-four family
residential real estate)
Policy Amount: $0.00
PROPOSED INSURED:
(b) TEXAS RESIDENTIAL OWNER POLICY OF TITLE INSURANCE -
ONE-TO-FOUR FAMILY RESIDENCES (Form T-1R)
Policy Amount:
PROPOSED INSURED:
(c) MORTGAGEE POLICY OF TITLE INSURANCE (Form T-2)
Policy Amount:
PROPOSED INSURED;
Proposed Borrower:
(d) MORTGAGEE TITLE POLICY BINDER ON INTERIM
CONSTRUCTION LOAN (Form T-13)
Binder Amount:
PROPOSED INSURED:
Proposed Borrower:
(e) OTHER
Policy Amount:
PROPOSED INSURED:
2. The interest in the land covered by this Commitment is: Fee Simple
3. Record title to the land on the Effective Date appears to be vested in:
Southern Investors Services Co., Inc.
Stewart Title Guaranty Company
See Continuation Page
<PAGE>
Continuation Of Schedule A G.F. No. 9912589
<TABLE>
<CAPTION>
4. Legal description of t land:
<S> <C> <C> <C> <C>
Section Block Original Grantee Abst. Acres m/l
62 (NE/4 & NW/4) 341 TC Ry. Co. 414.35
63 341 TC Ry. Co. 640
64 341 TC Ry. Co. 640
65 341 TC Ry. Co. 320
(640 ac. SAVE AND EXCEPT: SE/4-SW4 conveyed in Vol. 221, P. 739, DR;
NE/4-SE/4 conveyed in Vol. 32, P. 659, OPR;
NE/4-NE/4 conveyed in Vol. 38, P. 340, OPR;
NW/4-NE/4 conveyed in Vol. 53, P. 113, OPR;
NW/4 conveyed in Vol. 96, P. 308, OPR;
66 341 TC Ry. Co. 843.5
67 341 TC Ry. Co. 1570 216.87
(640 ac. SAVE AND EXCEPT: 23.13 ac. conveyed in Vol. 249, P. 555, DR
SE/4-NW/4 conveyed in Vol. 29, P. 259, OPR;
SW/4-NW/4 conveyed in Vol. 29, P. 261, OPR;
NW/4-SE/4 conveyed in Vol. 30, P. 100, OPR;
NW/4-SE/4 conveyed in Vol. 48, P. 561, OPR;
NW/4-NE/4 conveyed in Vol. 62, P 193, OPR;
SE/4-NV4 conveyed in Vol. 70, P. 332, OPR;
SW/4-NE/4 conveyed in Vol. 74, P. 313, OPR;
NW/4-NW/4 conveyed in Vol. 92. P. 161, OPR;
NW/4-NW/4 conveyed in Vol. 114, P. 2, OPR;
NE/4-NE/4 conveyed in Vol. 115, P. 284, OPR;
87.43 ac. conveyed in Vol. 53, P. 190, OPR;
74 341 TC Ry. Co. lying South of Hwy. 170
75 341 TC Ry. Co. 640
76 341 TC Ry. Co. 1574 560
640 ac. SAVE AND EXCEPT the E/Z-SE/4 conveyed in Vol. 224, P.75 DR
81 341 TC Ry. Co. 1577 640
82 341 TC By. Co. containing 612.11 acres m/l (640 ac. SAVE & EXCEPT 13.32 ac.
conveyed in 258, Page 757, Deed Records, and 14.07 ac. conveyed in Vol. 16, Page 4, Official Public Records.
83 341 TC Ry. Co. lying South of Hwy. 170
86 341 TC Ry. Co. lying South of Hwy. 170
87 341 TC Ry. Co. 1580 640
92 341 TC Ry. Co. 16366 419.6
94 341 TC Ry. Co. lying South of Hwy. 170
95 341 TC Ry. Co. lying South of Hwy.170
Stewart Title Guaranty Company Countersigned
Ellyson Abstract & Title Co.
By
-------------------------------
Page 2
</TABLE>
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE B
EXCEPTIONS FROM COVERAGE
In addition to the Exclusions and Conditions and Stipulations, your Policy will
not cover loss, costs, attorneys' fees, and expenses resulting from:
1.
2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any
encroachments or protrusions, or any overlapping of improvements.
3. Homestead or community property or survivorship rights, if any, of any spouse
of any insured. (Applied to the Owner Policy only).
4. Any titles or rights asserted by anyone, including, but not limited
to, persons, the public, corporations, governments or other entities,
a. to tidelands, or lands comprising the shores or beds of navigable or
perennial rivers and streams, lakes, bays, gulfs or oceans, or
b. to lands beyond the line of harbor or bulkhead lines as established or
changed by any government, or
c. to filled-in lands, or artificial islands, or
d. to statutory water rights, including riparian rights, or
e. to the area extending from the line of mean low tide to the line of
vegetation, or the rights of access to that area or easement along and
across that area.
(Applies to the Owner Policy only.)
5. Standby fees, taxes and assessments by any taxing authority for the year
2000, and subsequent years; and subsequent taxes and assessments by any
taxing authority for prior years due to change in land usage or ownership,
but not those taxes or assessments for prior years because of an exemption
granted to a previous owner of the property under Section 11.13, TEXAS TAX
CODE, or because of improvements not assessed for a previous tax year.
6. The terms and conditions of the documents creating your interest in the
land.
7. Materials furnished or labor performed in connection with planned
construction before signing and delivering the lien document described in
Schedule A, if the land is part of the homestead of the owner. (Applies to
the Mortgagee Title Policy Binder on Interim Construction Loan only, and may
be deleted if satisfactory evidence is furnished to us before a binder is
issued.)
Stewart Title Guaranty Company
See Continuation Page
<PAGE>
Continuation of Schedule B G.F. No. 99125089
8. Liens and leases that affect the title to the land, but that are subordinate
to the lien of the insured mortgage. (Applies to Mortgagee Policy only.)
9. The following matters and all terms of the documents creating or offering
evidence of the matters (We must insert matters or delete this exception.):
a. Mineral reservations by the State of Texas in patents or deed as to
Sections 62, 64, 66; 72, 82, 86, 92, and 94, Block 341, TC Ry. Co.,
Brewster County, Texas.
b. Mineral reservations contained in deed from E.P. Armstrong to Louis
Lewenthal dated July 3, 1946, recorded in Volume 109, Page 417, Deed
Records of Brewster County, Texas.
c. Mineral reservations contained in deed from Rex Ivey, Jr. et ux,
Kathryn Ivey, to Arrow Investment Co., Inc. dated October 29, 1975,
recorded in Volume 190, Page 512, Deed Records of Brewster County, Texas.
d. Mineral reservations contained in deed from Roy Seaberg to Arrow
Investment Co., Inc. dated May 7, 1975, recorded in Volume 189, Page 159,
Deed Records of Brewster County, Texas.
e. Mineral reservations contained in deed from W.A. Conner to Arrow
Investment Co., Inc. dated May 7, 1975, recorded in volume 189, Page
163, Deed Records of Brewster County, Texas.
f. Mineral Deed from Bomar Horton to Gordon Kenley dated December 12,
1983, recorded in Volume 55, Page 568, Oil & Gas Lease Records of
Brewster County, Texas.
g. Easement from Arrow Investment Co., Inc. to Public Utilities and/or The
Public dated February 22,1979, recorded in Volume 212, Page 429, Deed
Records of Brewster County, Texas.
h. Easement from Arrow Investment Co., Inc. to Big Bend Telephone Co.,
Inc. dated January 14, 1980, recorded in Volume 221, Page 103, Deed
Records of Brewster County, Texas.
i. Roadway Easement from Arrow Investment Co., Inc. to Brewster County
dated May 7, 1981, recorded in Volume 228, Page 44, Deed Records of
Brewster County, Texas.
j. Easement and Right of Way from Arrow Investments Co., Inc. to Rio
Grande Electric Co-op dated January 24, 1997, recorded in Volume 81, Page
150, Official Public Records of Brewster County, Texas.
k. Easement from the State of Texas to Rio Grande Electric Coop. dated
October 19, 1984, recorded in Volume 249, Page 425, Deed Records of
Brewster County, Texas.
l. Easement from Southern Investors Service Company, Inc. to Raymond Wayne
Pauly contained in deed dated March 10, 1998, recorded in Volume 96, Page
308, Deed Records of Brewster County, Texas.
m. Easement granted and retained in deed from Southern Investors Service
Co., Inc. to Fred Gossien dated October 11, 1999, recorded in Volume 120,
Page 628, Official Public Records of Brewster County, Texas.
n. Affidavit from James C. Box to The Public dated May 28, 1981, regarding
solid waste disposal recorded in Volume 24, Page 255, Official Public
Records of Brewster County, Texas.
Stewart Title Guaranty Company
Page 2 See Continuation Page
<PAGE>
Continuation of Schedule B G.F. No. 99125089
o. Easement from Southern Investors Service Co., Inc. to Big Bend Telephone
Co., Inc. dated August 12, 1996, recorded in Volume 68, Page 301,
Official Public Records of Brewster County, Texas.
p. Easement from Southern Investors Service Co., Inc. to County of
Brewster dated May 21, 1999, recorded in Volume 118, Page 7, Official
Public Records of Brewster County, Texas.
q. Any and all easements, or claims of easement, for any way, road,
pipeline, electric power transmission line, telephone line or telegraph
(public or private), which easements are visible, valid, apparent and
existing.
r. Any inaccuracy of the square footage, area or acreage of the land
described in Schedule A attached. The Company does not insure square
footage, area or acreage of the land.
s. This policy will not cover any acreage lying within the right of way
of Highway 170.
Stewart Title Guaranty Company
Page 3
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE C
Your Policy will not cover loss, costs, attorneys' fees, and expenses resulting
from the following requirements that will appear as Exceptions in Schedule B of
the Policy, unless you dispose of these matters to our satisfaction, before the
date the Policy is issued:
1. Documents creating your title or interest must be approved by us and must
be signed, notarized and filed for record.
2. Satisfactory evidence must be provided that:
a. no person occupying the land claims any interest in that land against
the persons named in paragraph 3 of Schedule A,
b. all standby fees, taxes, assessments and charges against the property
have been paid,
c. all improvements or repairs to the property are completed and accepted
by the owner, and that all contractors, subcontractors, laborers and
suppliers have been fully paid, and that no mechanic's, laborer's or
materialmen's liens have attached to the property,
d. there is legal right of access to and from the land,
e. (on a Mortgagee Policy only) restrictions have not been and will not
be violated that affect the validity and priority of the insured
mortgage.
3. You must pay the seller or borrower the agreed amount for your property or
interest.
4. Any defect, lien or other matter that may affect title to the land or
interest insured, that arises or is filed after the effective date of this
Commitment.
5. Upon execution of a Waiver of Inspection by the purchaser(s), "Rights of
parties in possession" will be inserted under Schedule B of the owner's
policy.
6. We will require a release of the lien created by Deed of Trust executed by
The Mischer Corp. (now Southern Investors Service Co., Inc) dated May
18,1993, in favor of Walter Mischer, Trustee, securing the payment of one
note of even date therewith in the principal sum of $337,944.50 payable to
the order of Walter Mischer; said Deed of Trust is recorded in Volume 38,
Page 89, Official Public Records of Brewster County, Texas; being renewed
modified and extended by Agreement dated February 9,1999, recorded in
Volume 114, Page 332, Official Public Records of Brewster County, Texas.
Stewart Title Guaranty Company
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE D
G. F. No. or File No. 99125089 Effective Date: February 1, 2000, 8:00 am
Pursuant to the requirements of Rule P-21, Basic Manual of Rules, Rates and
Forms for the writing of Title Insurance in the State of Texas, the following
disclosures are made:
1. The following individuals are directors and/or officers, as indicated, of
the Title Insurance Company issuing this Commitment:
Stewart title Guaranty Company
Shareholders owning, controlling or holding, either personally or beneficially,
10% or more of the shares of Stewart Title Guaranty Company as of the last day
of the year preceding the date herein above set forth are as follows:
Stewart Information Services - 100%
OFFICERS DIRECTORS
President: Malcolm S. Morris Carloss Morris Stewart Morris
Executive Vice President: Bert B. Corkill Stewart Morris, Jr. Malcolm S. Morris
Secretary: Sue M. Nolz Max Crisp C. M. Hudspeth
Treasurer: Ken Anderson, Jr. Eugene Mohler Bruce Belin
Nita Hanks
2. As to ELLYSON ABSTRACT & TITLE CO. (Title Insurance Agent), the following
disclosures are made:
Shareholders, owners, partners or other persons having, owning or
controlling 1% or more of Title Insurance Agent are as follows:
Joy B. Adams 100%
3. You are entitled to receive advance disclosure of settlement charges in
connection with the proposed transaction to which this commitment relates.
Upon your request, such disclosure will be made to you. Additionally, the
name of any person, firm or corporation receiving any sum from the
settlement of this transaction will be disclosed on the closing or
settlement statement.
You are further advised that the estimated title premium` is:
Owners Policy $ 0.00
Mortgagee Policy $ 0.00
Total $ 0.00
Of this total amount: 17.75% will be paid to the policy issuing Title
Insurance Company: 82.25% will be retained by the issuing Title Insurance
Agent; and the remainder of the estimated premium will be paid to other
parties as follows:
Amount To Whom For Services
------ ------- ------------
Stewart Title Guaranty Company
See Continuation Page
<PAGE>
Continuation of Schedule D G. F. No. 99125089
*The estimated premium is based upon information furnished to us as of the
date of this Commitment for Title Insurance. Final determination of the amount
of the premium will be made at closing in accordance with the Rules and
Regulations adopted by the State Board of Insurance.
This commitment is invalid unless the insuring provisions and Schedules A, B,
and C are attached.
STEWART TITLE GUARANTY COMPANY
Page 2
<PAGE>
STEWART TITLE
GUARANTY COMPANY
IMPORTANT INFORMATION
FOR INFORMATION, OR
TO MAKE A COMPLAINT
CALL OUR TOLL-FREE TELE-
PHONE NUMBER
1-800-729-1902
ALSO
YOU MAY CONTACT
THE TEXAS DEPARTMENT
OF INSURANCE AT
1-800-252-3439
to obtain information on:
1. filing a complaint against an insurance company or agent,
2. whether an insurance company or agent is licensed,
3. complaints received against an insurance company or agent,
4. policyholder rights, and
5. a list of consumer publications and services available through the
Department.
YOU MAY ALSO WRITE TO
THE TEXAS DEPARTMENT OF
INSURANCE
P.O. BOX 149104
AUSTIN, TEXAS 78714-9104
FAX NO. (512) 475-1771
AVISO IMPORTANTE
PARA INFORMACION, O
PARA SOMETER UNA QUEJA
LLAME AL NUMERO GRATIS
1-800-729-1902
TAMBIEN
PUEDE COMUNICARSE CON
EL DEPARTAMENTO DE SEGUROS
DE TEXAS AL
1-800-252-3439
para obtener informacion sobre:
1. como someter una queja en contra de una compania de seguros o agente de
seguros,
2. si una compania de.seguros o agente de seguros tiene licencia,
3. quejas recibidas en contra de una compania de seguros o agente de seguros
4. los derechos del asegurado, y
5. una lista de publicaciones y servicios para consumidores disponibles a
traves del Departamento.
TAMBIEN PUEDE ESCRIBIR AL
DEPARTAMENTO DE SEGUROS DE
TEXAS
P.O. BOX 149104
AUSTIN, TEXAS 78714-9104
FAX NO. (512) 475-1771
FORM: Commitment for Title Insurance
<PAGE>
STEWART TITLE
GUARANTY COMPANY
TEXAS TITLE INSURANCE INFORMATION
Title insurance insures you against loss resulting from certain risks to your
title.
The Commitment for Title Insurance is the title insurance company's promise to
issue the title insurance policy. The commitment is a legal document. You should
review it carefully to completely understand it before your closing date.
El seguro de titulo le asegura en relacion a perdidas resultantes de ciertos
riesgos que pueden afectar el titulo de su propiedad.
El compromiso para Seguro de Titulo es la promesa de la compania aseguradora de
titulos de emitir la poliza de seguro de titulo. El Compromiso es un documeoto
legal. Usted debe leerlo cuidadosamente y entenderlo completamente antes de la
fecha para finalizar su transaccion.
Your commitment for Title Insurance is a legal contract between you and us. The
Commitment is not an opinion or report of your title. It is a contract to issue
you a policy subject to the Commitment's terms and requirements.
Before issuing a Commitment for Title Insurance (the Commitment) or a Title
Insurance Policy (the Policy), the Title Insurance Company (the Company)
determines whether the title is insurable. This determination has already been
made. Part of that determination involves the Company's decision to insure the
title except for certain risks that will not be covered by the Policy. Some of
these risks are listed in Schedule B of the attached Commitment as Exceptions.
Other risks are stated in the policy as Exclusions. These risks will not be
covered by the Policy.
Another part of the determination involves whether the promise to insure is
conditioned upon certain requirements being met. Schedule C of the Commitment
lists these requirements that must be satisfied or the Company will refuse to
cover them. You may want to discuss any matters shown in Schedules B and C of
the Commitment with an attorney. These matters will affect your title and your
use of the land.
When your Policy is issued, the coverage will be limited by the Policy's
Exceptions, Exclusions and Conditions, defined below.
- EXCEPTIONS are title risk that a Policy generally covers but does not
cover in a particular instance. Exceptions are shown on Schedule B or
discussed in Schedule C of the Commitment They can also be added if you do
not comply with the Conditions section of the Commitment. When the Policy is
issued, all Exceptions will be on Schedule B of the Policy.
- EXCLUSIONS are title risks that a Policy generally does not cover.
Exclusions are contained in the Policy but not shown or discussed in the
Commitment.
- CONDITIONS are additional provisions that qualify or limit your coverage.
Conditions include your responsibilities and those of the Company. They are
contained in the Policy but not shown or discussed in the Commitment. The
Policy Conditions are not the same as the Commitment Conditions.
You can get a copy of the policy form approved by the State Board of Insurance
by calling the Title Insurance Company at 1-800-729-1902 or by calling the title
insurance agent that issued the Commitment The State Board of Insurance may
revise the policy form from time to time.
You can also get a brochure that explains the policy from the Texas Department
of Insurance by calling 1-800-252-3439.
Before the Policy is issued, you may request changes in the policy. Some of the
changes to consider are:
- Request amendment of the "area and boundary" exception (Schedule B,
paragraph 2). To get this amendment, you must furnish a survey. On the
Owner Policy, you must pay an additional premium for the amendment. If the
survey is acceptable to the Company, your Policy will insure you against
loss because of discrepancies or conflicts in boundary lines, encroachments
or protrusions, or overlapping of improvements. The Company may then decide
not to insure against specific boundary or survey problems by making special
exceptions in the Policy.
- Allow the Company to add an exception to "rights of parties in
possession." If you refuse this exception, the Company or the Title
insurance agent may inspect the property. The Company may except to and not
insure you against the rights of specific persons, such as renters, adverse
owners or easement holders who occupy the land. The Company may charge you
for the inspection. If you want to make your own inspection, you must sign a
Waiver of Inspection form and allow the Company to add this exception to
your Policy.
The entire premium for a Policy must be paid when the Policy is issued. You will
not owe any additional premiums unless you want to increase your coverage at a
later date and the Company agrees to add an Increased Value Endorsement.
FORM: Commitment for Title Insurance
<PAGE>
EXHIBIT "D"
QUITCLAIM DEED
STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF BREWSTER (S)
THAT SOUTHERN INVESTORS SERVICES COMPANY, INC., a Delaware corporation
("Grantor"), for and in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration to it in hand paid by
("Grantee"), having a mailing address of , the receipt and
sufficiency of which consideration are hereby acknowledged, has QUITCLAIMED, and
by these presents does hereby QUITCLAIM, unto Grantee all of Grantor's right,
title and interest in and to the real property described in Exhibit A attached
hereto and made a part hereof for all purposes (the "Property").
Neither Grantor nor Grantor's successors or assigns shall have, claim or
demand any right or title to the Property or any part thereof.
EXECUTED to be effective as of ___________________________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By:
Name:
Title:
STATE OF TEXAS (S)
(S)
COUNTY OF (S)
This instrument was acknowledged before me on _________________, 2000, by
, of Southern Investors Services Company, Inc., a Delaware corporation,
on behalf of said corporation.
Notary Public
[Seal]
<PAGE>
EXHIBIT A
(Legal Description of the Property)
<PAGE>
EXHIBIT E
FIRPTA AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform _______________________________, a ________________
("Transferee"), that withholding of tax is not required upon the disposition of
a U.S. real property interest in the real property described on Exhibit "A"
attached hereto (the "Property") by SOUTHERN INVESTORS SERVICES COMPANY, INC., a
Delaware corporation, a Texas limited partnership ("Transferor"), the
undersigned hereby certifies as follows:
1. Transferor is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor's U.S. employer identification number is: ___________; and
3. Transferor's office address is: 2727 N. Loop West, Suite 200, Houston,
Texas 77008.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, the undersigned, in the capacity set forth
below, hereby declares that he has examined this certification and to the best
of his knowledge and belief it is true, correct, and complete, and the
undersigned further declares that he has authority to sign this document in such
capacity.
EXECUTED to be effective as of the ______ day of ________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By:
Name:
Title:
<PAGE>
THE STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
This instrument was acknowledged before me on the _______ day of ________,
2000, by ______________________, as __________________ of Southern Investors
Services Company, Inc, a Delaware corporation, on behalf of said corporation.
Notary Public in and for
the State of Texas
Printed Name:
My commission expires: ____________
<PAGE>
EXHIBIT A
Legal Description
[Attached]
<PAGE>
EXHIBIT F
BUYER'S CERTIFICATE REGARDING PROPERTY CONDITION
THE UNDERSIGNED, ________________, A _______________________, ("BUYER"),
HAS THIS DAY PURCHASED FROM SOUTHERN INVESTORS SERVICES COMPANY, INC., A
DELAWARE CORPORATION ("SELLER"), THAT CERTAIN ____ ACRE TRACT OR PARCEL OF REAL
PROPERTY, MORE OR LESS, DESCRIBED ON EXHIBIT "A" ATTACHED HERETO AND MADE A PART
HEREOF FOR ALL PURPOSES (SUCH REAL PROPERTY, ANY IMPROVEMENTS THEREON, AND ANY
RELATED RIGHTS BEING HEREINAFTER COLLECTIVELY CALLED THE "REAL PROPERTY"),
TOGETHER WITH OTHER RIGHTS AND INTERESTS OF SELLER RELATED THERETO, PURSUANT TO
THAT CERTAIN REAL ESTATE PURCHASE AND SALE AGREEMENT BETWEEN SELLER AND BUYER
DATED EFFECTIVE FEBRUARY 24, 2000 (THE "CONTRACT").
BUYER AGREES THAT IT HAS HAD PRIOR TO CLOSING THE OPPORTUNITY TO PERFORM
EXAMINATIONS AND INVESTIGATIONS OF ALL OF THE PROPERTY DESCRIBED IN THE
CONTRACT, INCLUDING SPECIFICALLY, WITHOUT LIMITATION, EXAMINATIONS AND
INVESTIGATIONS FOR THE PRESENCE OF ASBESTOS, PCB EMISSIONS AND HAZARDOUS WASTES
ON THE REAL PROPERTY, AND THAT BUYER IS RELYING SOLELY UPON SUCH EXAMINATIONS
AND INVESTIGATIONS (EXCEPT FOR SELLER'S WARRANTIES CONTAINED IN THE CONTRACT) IN
PURCHASING THE PROPERTY. BUYER HEREBY ASSUMES FULL RESPONSIBILITY FOR SUCH
INSPECTIONS AND, WITHOUT LIMITING ANY OTHER DISCLAIMER OF SELLER HEREIN,
IRREVOCABLY WAIVES ANY CLAIM AGAINST SELLER ARISING FROM THE PRESENCE OF
ASBESTOS, PCB EMISSIONS AND HAZARDOUS WASTES UPON THE REAL PROPERTY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AND AS A MATERIAL INDUCEMENT TO
SELLER'S ENTERING INTO THE CONTRACT AND AGREEING TO ACCEPT THE PURCHASE PRICE,
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT BUYER IS PURCHASING THE PROPERTY (AND
EACH AND ALL PORTIONS THEREOF) "AS IS" AND "WHERE IS", AND WITH ALL FAULTS, AND
THAT EXCEPT AS EXPRESSLY SET FORTH IN THE CONTRACT (AND AS EXPRESSLY QUALIFIED
AND LIMITED THEREIN), SELLER IS MAKING NO REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO THE
QUALITY, PHYSICAL CONDITION OR VALUE OF THE PROPERTY, THE INCOME OR EXPENSES
FROM OR OF THE PROPERTY OR THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS
OR REGULATIONS, INCLUDING WITHOUT LIMITATION BUILDING AND FIRE CODES. WITHOUT
LIMITING THE FOREGOING, IT IS UNDERSTOOD AND AGREED THAT (A) SELLER MAKES NO
EXPRESS OR IMPLIED WARRANTY OF HABITABILITY, SUITABILITY, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR USE OR PURPOSE, AND (B) TO THE EXTENT THAT
<PAGE>
WARRANTIES OF TITLE HAVE BEEN MADE, SUCH WARRANTIES ARE SET FORTH SOLELY AND
EXPRESSLY IN THE SPECIAL WARRANTY DEED OF EVEN DATE HEREWITH AND OTHER DOCUMENTS
OF CONVEYANCE DELIVERED TO BUYER BY SELLER AT CLOSING. BUYER FURTHER AGREES THAT
SELLER IS NOT LIABLE OR BOUND BY ANY GUARANTEES, PROMISES, STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY MADE OR FURNISHED BY
ANY REAL ESTATE AGENT, BROKER, EMPLOYEE, SERVANT OR OTHER PERSON REPRESENTING OR
PURPORTING TO REPRESENT SELLER, EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH
IN THE CONTRACT (AND AS EXPRESSLY QUALIFIED AND LIMITED THEREIN).
IN FURTHERANCE OF AND PURSUANT TO TEXAS BUSINESS AND COMMERCE CODE SECTION
17.42(A), AS AMENDED, BUYER HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS IT MAY
HAVE UNDER THE TEXAS DECEPTIVE TRADE PRACTICE-CONSUMER PROTECTION ACT OTHER THAN
THE PROVISIONS OF TEXAS BUSINESS AND COMMERCE CODE SECTION 17.555. IN THAT
REGARD, BUYER HEREBY REPRESENTS TO SELLER THAT (A) BUYER HAS KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE
MERITS AND RISKS OF THIS TRANSACTION, AND (B) BUYER IS NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION IN CONNECTION WITH NEGOTIATING FOR AND
CONSUMMATING THE PURCHASE OF THE PROPERTY, AND (C) BUYER HAS BEEN REPRESENTED BY
LEGAL COUNSEL ACCEPTABLE TO IT IN CONNECTION WITH NEGOTIATING FOR AND
CONSUMMATING THE PURCHASE OF THE PROPERTY.
EXECUTED THIS _____ DAY OF ________________, 2000.
By:
Name:
Title:
"BUYER"
<PAGE>
THE STATE OF _______________ (S)
(S)
COUNTY OF __________________ (S)
This instrument was acknowledged before me on the _____ day of ___________,
2000, by __________________________, the ________________________ of
______________________________________, a _________________________________, on
behalf of said .
Notary Public in and for
the State of
Printed Name:
My Commission Expires:
<PAGE>
REAL ESTATE PURCHASE AND SALE AGREEMENT
REAL ESTATE AUCTION
BREWSTER COUNTY, TEXAS
FEBRUARY 24, 1999
This Real Estate Purchase and Sale Agreement ("Agreement") is entered into as
of February 24, 2000, by and between SOUTHERN INVESTORS SERVICES COMPANY, INC.,
a Delaware corporation ("Seller") and the person or entity named as Buyer
("Buyer") on the Transaction Schedule attached hereto.
1. THE PROPERTY: Seller agrees to sell and Buyer agrees to purchase the real
estate described on Exhibit "A" hereto (the "Property") for the price upon
the terms and conditions as set forth below:
2. THE PRICE: The total purchase price ("Purchase Price") (including the seven
and one-half percent (7.5%) Auction Fee) payable at closing in cash or by
wire transfer of immediately available funds to the Escrow Agent shall be
the amount described on the Transaction Schedule.
3. THE TITLE: The Seller shall convey 6330 (plus or minus) acres of the
Property (as designated on Exhibit "A") by Special Warranty Deed in form of
Exhibit "B" attached hereto, subject to recorded exceptions, reservations,
conditions, restrictions, mineral, royalty, and timber interests and
easements of record reflected on the title commitment provided by the
Escrow Agent, a copy of which is attached hereto as Exhibit "C", and any
other matters of record which are valid and existing, to all matters which
a correct survey would show, to all takings by any governmental authorities
or transfers in lieu thereof, and to any valid leases (copies of which
shall be delivered to Buyer with this Agreement). If title insurance is
desired, it shall be at the Buyer's option and expense. The Seller shall
convey 940 (plus or minus) acres of the Property (as designated on Exhibit
"A-1") by Quitclaim Deed in the form of Exhibit "D" attached hereto for
which conveyance title insurance will not be available.
4. THE SURVEY: If a survey is desired, it will be at the Buyer's option and
expense.
5. CLOSING: This sale and purchase transaction shall be closed by Stewart
Title Company, Attn: George Houghton ("Escrow Agent") at 1111 Bagby, Suite
2000, Houston, Texas 77002, (Phone, 713-651-0810); on or before March 31,
2000 ("Closing Date"), unless otherwise agreed in writing by Seller and
Buyer.
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<PAGE>
6. DEFAULTS: In the event Seller defaults in the performance of any of
Seller's obligations under this Agreement for any reason, except Buyer's
default or the termination of this Agreement by Buyer or Seller pursuant to
any right herein provided, Buyer's sole and exclusive remedy shall be to
either (i) terminate this Agreement in which event the Deposit shall be
immediately delivered by Closing Agent to Buyer or (ii) enforce specific
performance of this Agreement. In the event Buyer elects to enforce
specific performance, such action must be initiated within thirty (30) days
from the date Buyer is notified of Seller's refusal to proceed to Closing.
In the event Buyer fails to perform any obligation pursuant to the terms of
this Agreement, Seller's exclusive remedy shall be to retain the Deposit
above, as agreed liquidated damages, and as a reasonable forecast of just
compensation for the harm that would be caused by Buyer's breach, Buyer and
Seller acknowledging that the actual damages for such breach would be
difficult or impossible to calculate. Additionally, at its option, Seller
may have the additional right to enforce specific performance of this
Agreement. Except for the specific remedies set forth above, neither party
shall have any other rights or remedies in the event of a breach of this
Agreement, and each party specifically waives any and all rights and
remedies not expressly set forth in this Agreement.
SELLER AND BUYER HEREBY WAIVE ALL PROVISIONS OF THE TEXAS DECEPTIVE TRADE
PRACTICES ACT, AS AMENDED (OTHER THAN SECTION 17.555, PERTAINING TO
CONTRIBUTION AND INDEMNITY) TO THE EXTENT APPLICABLE TO THE TRANSACTION
CONTEMPLATED HEREBY.
7. EARNEST MONEY: Buyer has delivered to Stewart Title Company, as Escrow
Agent, the amount specified as earnest money on the Transaction Schedule,
which is equal to ten percent (10%) of the total Purchase Price in
certified funds or by wire transfer ("Earnest Money"). The Escrow Agent
shall apply the Earnest Money, together with interest thereon, against the
Purchase Price at or upon Closing, or otherwise pay to the party entitled
to receive the Earnest Money in accordance with this Agreement.
8. PRORATIONS: Prorations and adjustments shall be made at closing as follows:
ad valorem taxes shall be prorated to the date of closing on the basis of
the latest available information and assumed by the Buyer. These taxes are
subject to readjustment and reproration when the actual tax bills are
received or the actual tax amounts for the year of closing become known.
9. BROKERAGE: Each party represents and warrants that no real estate broker
or salesman has been involved in this transaction except The National
Auction Group, Inc.
2
<PAGE>
("Auction Company") and _______ N/A _____________________________________a
("Participating Broker"). Any commission due the Auction Company shall be
paid before any part of the sales proceeds are disbursed to any other
person or entity. The parties agree that all deposits and purchase funds
shall be paid to the Escrow Agent for its proper disbursement. If the
Buyer defaults in closing this Agreement, the Deposit shall be allocated as
follows: (i) promotion costs shall be reimbursed to Seller, (ii) the
balance, if any, shall be divided equally between Auction Company and
Seller. If Seller seeks and obtains a judgment for specific performance of
any Agreement, Auction Company shall be paid the full amount of its
commission due in respect thereof.
10. CLOSING DOCUMENTS: (a) To perform its closing obligations hereunder, Seller
shall execute and deliver, in form for recording, said Special Warranty
Deed and do and perform all other acts and things that are required hereby
and do and perform all other acts and things as shall reasonably be
required by the Escrow Agent including execute and deliver such Certificate
in form of Exhibit "E" attached hereto to comply with the provisions of
(S)1445 of the Internal Revenue Code; (b) to perform its closing
obligations hereunder, Buyer shall execute and deliver to Seller the
Buyer's Certificate Regarding Property Condition ("Certificate") in form
attached hereto as Exhibit "F" and deliver all documents and do and perform
all other acts and things that are required hereby and do and perform all
other acts and things as shall be required by the Closing Agent as
conditions precedent (i) to its making and showing on its closing statement
to Buyer and Seller the Purchase Price, all prorations, expenses and costs
as herein provided for and contemplated, and (ii) to its delivering to
Seller the remainder of the Purchase Price under the terms hereof.
11. CLOSING COSTS: Buyer and Seller shall each pay one-half (1/2) of the escrow
fees, if any, incident to this transaction. Buyer shall pay (i) the basic
title insurance premium for a Standard Texas Form Owner's Title Insurance
Policy, (ii) for any deletions it so desires and (iii) for any survey.
Seller shall pay the cost of recording the Deed. Each party shall be
responsible for payment of its own attorney's fees.
12. SELLER'S REPRESENTATIONS:
A) Seller (i) represents to Buyer that each of the following is true and
correct as of the date this Agreement is executed by Seller and (ii) agrees
that on the Closing Date, Seller will represent unto Buyer that each of the
following is true and correct (to the extent the same are in fact then true
and correct) as of the Closing Date:
1. Seller has the full right, power, and authority to enter into
this Agreement and to carry out the obligations of Seller set
forth in this Agreement;
3
<PAGE>
2. The person or persons executing this Agreement on behalf of
Seller are fully authorized to execute this Agreement on behalf
of Seller;
3. Seller has received no written notice and has no actual knowledge
of any pending condemnation proceedings affecting the Property or
any part thereof;
4. Seller has received no written notice and has no actual knowledge
of any pending litigation affecting Seller or the Property which
would in any way constitute a lien, claim or material obligation
of any kind against the Property;
5. To Seller's actual knowledge, no person, firm or entity has any
rights in the Property or right to acquire the Property or any
part thereof;
6. This Agreement and the sale of the Property will not cause to be
imposed on the Buyer any liability to withhold any amount
pursuant to (S) 1445 of the Internal Revenue Code (and the
implementing regulations);
All references in this Agreement to notices or written notices
received by Seller shall mean and refer only to written notices received by
Mark A. Kilkenny of Seller and all references in this Agreement to
"Seller's actual knowledge" or "the actual knowledge of Seller" or similar
references shall mean and refer only to the current, actual knowledge of
Mark A. Kilkenny with the express limitations and qualifications that Mark
A. Kilkenny has not made any special investigation or inquiry, and has no
duty or obligation of reasonably diligent investigation or inquiry, or any
other duty or obligation, to acquire or attempt to acquire notice,
knowledge or information beyond or in addition to the current, actual
knowledge of Mark A. Kilkenny. By virtue of the limitations and
qualifications herein expressed, it is the intention of Seller expressly to
negate the applicability of any principle or theory of "negligent
ignorance" that would or might impute to Seller or charge Seller with, as a
matter of law, actual notice or knowledge as a result of those things that
a reasonably diligent inquiry and exercise of the means of information at
hand would or might disclose to Seller.
B) The foregoing representations of Seller shall survive the Closing only
for a period terminating on the date that is thirty (30) days from and
after the Closing Date. Any proceeding or action for enforcement of said
representations, and any claims for damages as a result of the breach
thereof, must be brought by Buyer within the time period described above,
or Buyer shall be deemed conclusively to have waived any claims, rights,
causes of action or remedies with regard to alleged breaches of the
representations of Seller. With respect to any such claim for damages,
Buyer shall not be entitled to seek or recover, and Buyer hereby expressly
waives any rights to seek or recover, any punitive, exemplary or
consequential damages. The provisions of this paragraph shall survive the
Closing.
4
<PAGE>
13. PROPERTY CONDITION: This Property is selling subject to any existing
rights-of way, easements, encroachments, restrictive covenants, zoning
regulations, governmental agency regulations, environmental conditions,
leases, adverse possession, encumbrances, mineral, timber or royalty
interests, and assessments. To the maximum extent permitted by applicable
law, this sale is made and will be made without representation, covenant,
or warranty of any kind (whether express, implied, or, to the maximum
extent permitted by applicable law, statutory) by Seller. As a material
part of the consideration for this Agreement, Buyer agrees to accept the
Property on an "as is" and "where is" basis, with all faults, and without
any representation or warranty, all of which Seller hereby disclaims,
except for Seller's Warranties. Except for Seller's Warranties, no
warranty or representation is made by Seller as to fitness for any
particular purpose, merchantability, design, quality, condition, operation
or income, compliance with drawings or specifications, absence of defects,
absence of hazardous or toxic substances, absence of faults, flooding, or
compliance with laws and regulations including, without limitation, those
relating to health, safety, and the environment. Buyer acknowledges that
Buyer has entered into this Agreement with the intention of making and
relying upon its own investigation of the physical, environmental, economic
use, compliance, and legal condition of the Property and that Buyer is not
now relying, and will not later rely, upon any representations and
warranties made by Seller or anyone acting or claiming to act, by, through
or under or on Seller's behalf concerning the Property. ADDITIONALLY,
BUYER AND SELLER HEREBY AGREE THAT (A) BUYER IS TAKING THE PROPERTY "AS
IS" WITH ALL LATENT AND PATENT DEFECTS AND THAT EXCEPT FOR SELLER'S
WARRANTIES, THERE IS NO WARRANTY BY SELLER THAT THE PROPERTY IS FIT FOR A
PARTICULAR PURPOSE, (B) EXCEPT FOR SELLER'S WARRANTIES, BUYER IS NOT
RELYING UPON ITS EXAMINATION OF THE PROPERTY, AND (C) BUYER TAKES THE
PROPERTY UNDER THIS AGREEMENT UNDER THE EXPRESS UNDERSTANDING THAT THERE
ARE NO EXPRESS OR IMPLIED WARRANTIES (EXCEPT FOR THE LIMITED WARRANTIES OF
TITLE SET FORTH IN THE DEED AND THE SELLER'S WARRANTIES. THE PROVISIONS OF
THIS PARAGRAPH SHALL SURVIVE INDEFINITELY ANY CLOSING OR TERMINATION OF
THIS AGREEMENT AND SHALL NOT BE MERGED INTO THE CLOSING DOCUMENTS. THE
ABOVE PROVISION SHALL BE INCORPORATED INTO THE DEED TO BE DELIVERED AT
CLOSING.
14. RISK OF LOSS: Risk of condemnation or fire or other casualty loss shall
remain with Seller until Closing, and if any condemnation or unrepaired
fire or other casualty damage occurs, Buyer has the option of (i) closing
without diminution of the Purchase Price upon taking assignments from
Seller (which Seller covenants to make) of all condemnation awards and/or
fire and other casualty insurance claims or (ii) of releasing Seller
hereunder and having the return of the Deposit paid by Buyer on account
hereof.
5
<PAGE>
15. NOTICES: Notices required or permitted hereby shall be in writing, mailed
postage prepaid by certified or registered mail, return receipt requested,
to the Seller and the Buyer at their respective addresses as set forth
below, or to such other address designated by either party by written
notice to that effect.
16. ENTIRE AGREEMENT: This Agreement represents the entire and final Agreement
between the parties, superseding and canceling all prior oral and written
communications and agreements between them, their agents and
representatives, and this Agreement may not subsequently be changed or
amended except in writing signed by the parties.
17. LEGAL EXPENSES: In the event of litigation arising out of the terms and
conditions of this Agreement, the prevailing party in such litigation shall
have the right to recover from the non-prevailing party reasonable
attorney's fees and court costs incurred as a result of such litigation.
18. SCOPE AND INTERPRETATION: This Agreement shall be governed and interpreted
by the laws of the State of Texas.
19. EXECUTION IN COUNTERPART: This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of
such counterparts shall constitute one Agreement. To facilitate execution
of this Agreement, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages, which facsimile counterparts
shall be fully binding as originals.
20. CONSTRUCTION. The parties acknowledge that the parties and their counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
21. ORGANIZATION AND AUTHORITY: By its signature below, each party represents
and warrants to the other that it has the full right and authority and has
obtained any and all consents required to enter into this Agreement, to
perform the obligations provided for in this Agreement, and to consummate
the sale contemplated herein. Each party further represents and warrants
to the other that this Agreement has been duly and properly executed and
constitutes the valid and binding obligation of said party, enforceable in
accordance with the terms of this Agreement.
22. CONFIDENTIALITY: Buyer shall make no public announcement or disclosure of
any information related to this Agreement to outside brokers or third
parties, before or after the Closing, without the prior written consent of
Seller.
23. RELATIONSHIP OF PARTIES: No provision of this Agreement, and no act or
failure to act of either of the parties hereto, shall be deemed or
construed by any party, person, entity, or court to create a relationship
between the parties of principal and agent,
6
<PAGE>
partnership, joint venture, or any other association whatsoever, other than
the relationship of a vendor and a vendee. The parties hereto are not in
any fiduciary relationship with respect to each other.
24. CAPTIONS: The captions in this Agreement are inserted for convenience of
reference only and in no way define, describe, limit or affect the scope or
intent of this Agreement or any of its provisions.
25. EXHIBITS INCORPORATED: All Exhibits and Attachments to this Agreement are
hereby incorporated herein by this reference in their entirety and for all
purposes.
26. ATTACHMENTS HERETO:
Transaction Schedule
Exhibit A and A-1 - Property;
Exhibit B - Form of Deed;
Exhibit C - Title Commitment.
Exhibit D - Quitclaim Deed
Exhibit E - FIRPTA Affidavit
Exhibit F - Buyer's Certificate Regarding Property Condition
BUYER REPRESENTS AND WARRANTS THAT BUYER AND BUYER'S EXPERTS HAVE THOROUGHLY AND
CAREFULLY INSPECTED THE PROPERTY AND AGREE TO PURCHASE SAME "AS IS, WHERE IS,"
"WITH ALL FAULTS, IF ANY."
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on February 24,
2000.
SELLER:
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By: /s/ Mark A. Kilkenny
----------------------------------
Name: Mark A. Kilkenny
--------------------------------
Title: Vice President
-------------------------------
ADDRESS
2727 North Loop West, Suite 200
Houston, TX 77008
(713) 802-7900
PHONE NUMBER
BUYER:
SS#
Name: /s/ STEPHEN R. SMITH
ADDRESS
PHONE NUMBER
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<PAGE>
TITLE COMPANY'S AGREEMENT AND RECEIPT
On this ______ day of February 2000, Stewart Title Company, as the Title
Company named in the foregoing Agreement, hereby acknowledges receipt of (i)
______ (___) counterparts of this Agreement executed by the Seller and the Buyer
and (ii) the Earnest Money in the form specified below required under Paragraph
7 of this Agreement and hereby agrees to act as Title Company in strict
accordance with the terms of this Agreement.
STEWART TITLE COMPANY
By:
Its: ___________________ President
Form in which Earnest Money delivered: _________________________
9
<PAGE>
TRANSACTION SCHEDULE
TO
PURCHASE AGREEMENT
See Transaction Schedule to Purchase Agreement for Lajitas Resort
Purchase Agreement - Tract 1 dated as of February 24, 2000
10
<PAGE>
Special Warranty Deed - North Tract
EXHIBIT A
Section 73, Block 341, TC Ry. Co. lying North of Highway 170;
Section 74, Block 341, TC Ry. Co. lying North of Highway 170;
Section 83, Block 341, TC Ry. Co. lying North of Highway 170;
Section 84, Block 341, TC Ry. Co. containing 160 ac. m/1 (640 ac. SAVE & EXCEPT
the N/2-SE/4 conveyed in Vol. 40, P. 258, OPR; N/2-NW/4 conveyed in Vol. 60,
P. 22, OPR; S/2-NW/4 conveyed in Vol. 66,P.135. OPR; S/2-SW/4 conveyed in Vol.
92, P.159, OPR. and the NE/4)
Section 85, Block 341, TC Ry. Co. containing 640 ac., m/l;
Section 86, Block 341, TC Ry. Co. lying North of Highway 170;
Section 95, Block 341, TC Ry. Co. lying North of Highway 170;
Section 96, Block 341, TC Ry. Co. containing 640 ac., m/l;
Section 47, Block G-12, GC&SF Ry. Co. containing 640 acres, m/l.
Section 48, Block G-12, GC&SF Ry. Co. containing 640 acres, m/l.
Section 55, Block G-12, GC&SF Ry. Co. containing 640 acres, m/1.
Section 56, Block G-12, GC&SF Ry. Co. containing 640 acres, m/1.
Section 105, Block G-5, MK&TE Ry. Co. containing 540 acres, m/1 (640 ac. SAVE &
EXCEPT the NE/4-NE/4 conveyed in Volume 88, Page 460, DR; SW/4-NW/4 AND the
SE/4-NE/4-NW/4 conveyed in Volume 104, Page 618, DR and the SE/4-NW/4-NE/4
conveyed in Vol. 92, Page 310, DR)
<PAGE>
EXHIBIT A-1
PROPERTY
All that certain real property located in the Country of Brewster, State of
Texas, described as follows, to-wit:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Part Section Block Original Grantee Acres#
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
103 G-5 MK & TE Ry. Co. 640*
- -------------------------------------------------------------------------------------------
NE 1/4 OF NE 1/4 105 G-5 MK & TE Ry. Co. 40
- -------------------------------------------------------------------------------------------
SE 1/4 OF NW 1/4 OF NE 1/4 105 G-5 MK & TE Ry. Co. 10
- -------------------------------------------------------------------------------------------
SE 1/4 OF NW 1/4 OF NW 1/4 AND SW
1/4 OF NW 1/4 105 G-5 MK & TE Ry. Co. 50
- -------------------------------------------------------------------------------------------
106 G-5 MK & TE Ry. Co. 200*
- -------------------------------------------------------------------------------------------
</TABLE>
* Being the same land conveyed in that certain deed form D.C. Curry to Arrow
Investment Company, Roy Seaberg and W.A. Conner dated July 26, 1966, and
recorded in Volume 154, Page 538 of the Deed Records of Brewster County,
Texas.
<PAGE>
EXHIBIT B
FORM OF DEED
SPECIAL WARRANTY DEED
STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF BREWSTER (S)
THAT Southern Investors Service Company, Inc., a Delaware corporation
("Grantor"), for and in consideration of the sum of Ten Dollars ($10) and other
good and valuable consideration to it in hand paid by ________________________,
a _________________ ("Grantee"), having a mailing address of _________________,
the receipt and sufficiency of which consideration are hereby acknowledged, has
GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents does hereby GRANT,
BARGAIN, SELL and CONVEY, unto Grantee all of the real property described in
Exhibit A attached hereto and made a part hereof for all purposes, together with
all of Grantor's right, title and interest in and to all easements, rights of
way, reservations, privileges, appurtenances, any buildings, structures,
fixtures and improvements thereon, and other estates and rights of Grantor
pertaining to the real property (collectively, the "Property").
This conveyance is made and accepted subject to all easements,
encumbrances, restrictions, rights-of-way and prescriptive rights whether of
record or not, pertaining to any portion(s) of the Property; any rights of
adjoining land owners in any walls or fences, any discrepancies, conflicts, or
shortages in area or boundary lines, and any encroachments or overlapping of
improvements; all presently recorded and valid oil, gas, and/or other mineral
exceptions, rights of development or leases, royalty reservations and/or other
instruments constituting oil, gas, or other mineral interest severances of any
kind; all zoning and other ordinances, and other recorded instruments, but only
to the extent that same are still in effect; standby fees and taxes for the
current year having been prorated, and subsequent years, the payment of which
Grantee assumes; and subsequent assessments for this and prior years due to
change(s) in land usage, ownership, or both, the payment of which Grantee
assumes; and any conditions that would be revealed by a physical inspection and
survey of the Property; and to all takings by any governmental authorities or
transfers in lieu thereof (the "Permitted Exceptions").
TO HAVE AND TO HOLD the Property, as aforesaid, unto Grantee, its
successors and assigns, forever; and Grantor does hereby bind itself and its
successors and assigns, to WARRANT AND FOREVER DEFEND all and singular, the
Property unto Grantee, its successors and assigns, against every person
whomsoever lawfully claiming or to claim the same, or any part thereof by,
through, or under Grantor, but not otherwise, subject to the Permitted
Exceptions.
<PAGE>
This conveyance is made without covenants, representations or warranties of
any kind, express, implied or statutory, including without limitation, those
implied covenants described in Section 5.023 of the Texas Property Code, other
than the special warranty of title contained herein.
GRANTEE ACKNOWLEDGES AND BY ACCEPTANCE OF THIS DEED GRANTEE AGREES THAT IT
IS FULLY RELYING ON GRANTEE'S (OR GRANTEE'S REPRESENTATIVES') INSPECTIONS OF THE
PROPERTY AND NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE
OR MAY BE MADE (OR PURPORTEDLY MADE) BY GRANTOR OR ANY OF ITS REPRESENTATIVES
EXCEPT AS SPECIFICALLY PROVIDED IN THIS DEED. GRANTEE ACKNOWLEDGES THAT GRANTEE
HAS (OR GRANTEE'S REPRESENTATIVES' HAVE), PRIOR TO THE EFFECTIVE DATE OF THIS
DEED, THOROUGHLY INSPECTED AND EXAMINED THE PROPERTY TO THE EXTENT DEEMED
NECESSARY BY GRANTEE IN ORDER TO ENABLE GRANTEE TO EVALUATE THE CONDITION OF THE
PROPERTY AND ALL OTHER ASPECTS OF THE PROPERTY, AND GRANTEE ACKNOWLEDGES THAT
GRANTEE IS RELYING SOLELY UPON ITS OWN (OR ITS REPRESENTATIVES') INSPECTION,
EXAMINATION, AND EVALUATION OF THE PROPERTY. AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS CONVEYANCE, GRANTEE IS ACCEPTING THE PROPERTY IN ITS "AS-
IS, WHERE-IS" CONDITION, WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW,
EXCEPT ONLY THE TITLE WARRANTIES EXPRESSLY SET FORTH IN THIS DEED. WITHOUT IN
ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT FOR THE TITLE
WARRANTIES CONTAINED IN THIS DEED, THE CONVEYANCE OF THE PROPERTY ARE WITHOUT
ANY WARRANTY, AND GRANTOR AND GRANTOR'S PARTNERS, OFFICERS, AGENTS, DIRECTORS,
EMPLOYEES, ATTORNEYS, AND AFFILIATES (COLLECTIVELY, "GRANTOR'S RELATED PARTIES")
HAVE MADE NO, AND EXPRESSLY AND SPECIFICALLY DISCLAIM, AND GRANTEE ACCEPTS THAT
GRANTOR AND GRANTOR'S RELATED PARTIES HAVE DISCLAIMED, ANY AND ALL
REPRESENTATIONS, GUARANTIES OR WARRANTIES, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW (EXCEPT AS TO TITLE WARRANTIES CONTAINED IN THIS DEED) OF OR
RELATING TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, OF OR RELATING TO: (I)
THE USE, INCOME POTENTIAL, EXPENSES, OPERATION, CHARACTERISTICS, OR CONDITIONS
OF THE PROPERTY AND THE SURFACE OR SUBSURFACE THEREOF, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF SUITABILITY, HABITABILITY, MERCHANTABILITY, DESIGN, OR
FITNESS FOR ANY SPECIFIC PURPOSE OR A PARTICULAR PURPOSE; (II) THE COMPLIANCE OF
THE PROPERTY WITH ANY LAWS, RULES, ORDINANCES, OR REGULATIONS; (III) THE
ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE OR ABSENCE OF OR
CONTAMINATION BY HAZARDOUS MATERIALS, OR THE COMPLIANCE OF THE PROPERTY WITH
ALL REGULATIONS OR LAWS PERTAINING TO HEALTH OR
<PAGE>
THE ENVIRONMENT, INCLUDING, BUT NOT LIMITED TO, THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT, THE RESOURCE CONSERVATION AND RECOVERY
ACT, THE CLEAN WATER ACT, THE TEXAS HEALTH AND SAFETY CODE, THE TEXAS SOLID
WASTE DISPOSAL ACT, AND THE TEXAS WATER CODE, EACH AS MAY BE AMENDED FROM TIME
TO TIME, AND INCLUDING ANY AND ALL REGULATIONS, RULES, OR POLICIES PROMULGATED
THEREUNDER ("ENVIRONMENTAL LAWS"); AND (IV) THE SOIL CONDITIONS, DRAINAGE,
GEOLOGY, FLOODING CHARACTERISTICS, UTILITIES, SQUARE FOOTAGE, OR OTHER
CONDITIONS EXISTING IN, ON, AROUND OR UNDER THE PROPERTY. GRANTEE HEREBY
EXPRESSLY ASSUMES ALL RISKS, LIABILITIES, CLAIMS, DAMAGES, AND COSTS, INCLUDING
ANY LIABILITY WITH RESPECT TO ENVIRONMENTAL LAWS RESULTING OR ARISING FROM OR
RELATED TO THE PROPERTY OR THE OWNERSHIP, USE, CONDITION, LOCATION, MAINTENANCE,
REPAIR, OR OPERATION THEREOF. ADDITIONALLY, GRANTOR AND GRANTOR'S RELATED
PARTNERS ARE RELEASED FROM ANY AND ALL CLAIMS (WHETHER FOR CONTRIBUTION,
INDEMNITY, OR OTHERWISE) GRANTEE OR ITS HEIRS AND ASSIGNS MAY NOW OR HEREAFTER
HAVE UNDER ENVIRONMENTAL LAWS NOW OR HEREAFTER IN EFFECT, OR IN CONNECTION WITH
THE PRESENCE OF HAZARDOUS MATERIALS ON OR ABOUT THE PROPERTY.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, this Special Warranty Deed has been executed to be
effective as of _______________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By: __________________________________
Name: ________________________________
Title: _______________________________
STATE OF TEXAS (S)
(S)
COUNTY OF (S)
This instrument was acknowledged before me on ______________________, 2000,
by ____________________________, ____________________________ of Southern
Investors Services Company, Inc., a Delaware corporation, __________________, on
behalf of such corporation.
_________________________________________
Notary Public
[Seal]
<PAGE>
EXHIBIT A
(Legal Description of the Property)
<PAGE>
EXHIBIT C
THE FOLLOWING COMMITMENT FOR TITLE INSURANCE IS NOT VALID UNLESS YOUR NAME AND
THE POLICY AMOUNT ARE SHOWN IN SCHEDULE A, AND OUR AUTHORIZED REPRESENTATIVE HAS
COUNTERSIGNED BELOW.
COMMITMENT FOR TITLE INSURANCE
ISSUED BY
STEWART TITLE
GUARANTY COMPANY
We, STEWART TITLE GUARANTY COMPANY, will issue our title insurance policy
or policies (the Policy) to You (the proposed insured) upon payment of the
premium and other charges due, and compliance with the requirements in Schedule
B and Schedule C. Our Policy will be in the form approved by the Texas
Department of Insurance at the date of issuance, and will insure your interest
in the land described in Schedule A. The estimated premium for our Policy and
applicable endorsements is shown on Schedule D. There may be additional charges
such as recording fees, and expedited delivery expenses.
This Commitment ends ninety (90) days from the effective date, unless the
Policy is issued sooner, or failure to issue the Policy is our fault. Our
liability and obligations to you are under the express terms of this Commitment
and end when this Commitment expires.
In witness whereof, the Company has caused this commitment to be signed and
sealed as of the effective date of commitment as shown in Schedule A, the
commitment to become valid and binding only when countersigned by an authorized
signatory.
STEWART TITLE
GUARANTY COMPANY
/s/ Stewart Morris Sr. /s/ Malcolm S. Morris
- -------------------------------- -------------------------------------
Chairman of the Board President
Countersigned by:
/s/ Joy B. Adams
- ---------------------------------
Authorized Signatory Joy B. Adams
ELLYSON ABSTRACT & TITLE CO.
- ---------------------------------
Company
Alpine, Texas
- ---------------------------------
City, State
<PAGE>
CONDITIONS AND STIPULATIONS
1. If you have actual knowledge of any matter which may affect the title or
mortgage covered by this Commitment, that is not shown in Schedule B, you
must notify us in writing. If you do not notify us in writing, our liability
to you is ended or reduced to the extent that your failure to notify us
affects our liability. If you do notify us, or we learn of such matter, we
may amend Schedule B, but we will not be relieved of liability already
incurred.
2. Our liability is only to you, and others who are included in the definition
of Insured-in the Policy to be issued. Our liability is only for actual loss
incurred in your reliance on this Commitment to comply with its requirements
or to acquire the interest in the land. Our liability is limited to the
amount shown in Schedule A of this commitment and will be subject to the
following terms of the Policy: Insuring Provisions, Conditions and
Stipulations, and Exclusions.
All notices required to be given the Company and any statement in writing
required to be furnished the Company shall be addressed to it at P.O. Box 2029,
Houston, Texas 77252.
STEWART TITLE
GUARANTY COMPANY
<PAGE>
COUNT FOR TITLE INSURANCE
SCHEDULE A
Effective Date: February 1, 2000, 8:00 am G. F. No. or File No. 99125088
Commitment No. ______________________ issued: February 20, 2000, 4:00 p.m.
(if applicable)
1. The policy or policies to be issued are:
(a) OWNER POLICY OF TITLE INSURANCE (Form T-1)
(Not applicable for improved one-to-four family
residential real estate)
Policy Amount: $0.00
PROPOSED INSURED:
(b) TEXAS RESIDENTIAL OWNER POLICY OF TITLE INSURANCE -
ONE-TO-FOUR FAMILY RESIDENCES (Form T-1R)
Policy Amount:
PROPOSED INSURED:
(c) MORTGAGEE POLICY OF TITLE INSURANCE (Form T-2)
Policy Amount:
PROPOSED INSURED:
Proposed Borrower:
(d) MORTGAGEE TITLE POLICY BINDER ON INTERIM
CONSTRUCTION LOAN (Form T-13)
Binder Amount:
PROPOSED INSURED:
Proposed Borrower:
(e) OTHER
Policy Amount:
PROPOSED INSURED:
2. The interest in the land covered by this Commitment is: Fee Simple
3. Record title to the land on the Effective Date appears to be vested in:
Southern Investors Services Co., Inc.
Stewart Title Guaranty Company
See Continuation Page
<PAGE>
Continuation of Schedule A G. F. No.99125088
4. Legal description of the land:
Section 73, Block 341, TC Ry. Co. lying North of Highway 170;
Section 74, Block 341, TC Ry. Co. lying North of Highway 170;
Section 83, Block 341, TC Ry. Co. lying North of Highway 170;
Section 84, Block 341, TC Ry. Co. containing 160 ac. m/l (640 ac. SAVE &
EXCEPT the N/2-SE/4 conveyed in Vol. 40, P. 258, OPR; N/2-NW/4 conveyed in
Vol. 60, P. 22, OPR; S/2-NW/4 conveyed in Vol. 66, P.135, OPR; S/2-SW/4
conveyed in Vol. 92, P. 159, OPR. and the NE/4)
Section 85, Block 341, TC Ry. Co. containing 640 ac., m/l;
Section 86, Block 341, TC Ry. Co. lying North of Highway 170;
Section 95, Block 341, TC Ry. Co. lying North of Highway 170;
Section 96, Block 341, TC Ry. Co. containing 640 ac., m/l;
Section 47, Block G12, GC&SF Ry. Co. containing 640 acres, m/l.
Section 48, Block G12, GC&SF Ry. Co. containing 640 acres, m/l.
Section 55, Block G12, GC&SF Ry. Co. containing 640 acres, m/l.
Section 56, Block G12, GC&SF Ry. Co. containing 640 acres, m/1.
Section 105, Block G5, MK&TE Ry. Co. containing 540 acres, m/1 (640 ac. SAVE
& EXCEPT the NE/4-NE/4 conveyed in Volume 88, Page 460, DR; SW/4-NW/4 AND the
SE/4-NE/4-NW/4 conveyed in Volume 104, Page 618, DR and the SE/4-NW/4-NE/4
conveyed in Vol. 92, Page 310, DR)
Stewart Title Guaranty Company Countersigned
Ellyson Abstract & Title Co.
By ____________________________________
Page 2
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE B
EXCEPTIONS FROM COVERAGE
In addition to the Exclusions and Conditions and Stipulations, your Policy will
not cover loss, costs, attorneys' fees, and expenses resulting from:
1.
2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any
encroachments or protrusions, or any overlapping of improvements.
3. Homestead or community property or survivorship rights, if any, of any spouse
of any insured. (Applies to the Owner Policy only).
4. Any titles or rights asserted by anyone, including, but not limited to,
persons, the public, corporations, governments or other entities,
a. to tidelands, or lands comprising the shores or beds of navigable or
perennial rivers and streams, lakes, bays, gulfs or oceans, or
b. to lands beyond the line of harbor or bulkhead lines as established or
changed by any government, or
c. to filled-in lands, or artificial islands, or
d. to statutory water rights, including riparian rights, or
e. to the area extending from the line of mean low tide to the line of
vegetation, or the rights of access to that area or easement along and
across that area:
(Applies to the Owner Policy only.)
5. Standby fees, taxes and assessments by any taxing authority for the year
2000, and subsequent years; and subsequent taxes and assessments by any
taxing authority for prior years due to change in land usage or ownership,
but not those taxes or assessments for prior years because of an exemption
granted to a previous owner of the property under Section 11.13, Texas Tax
Code, or because of improvements not assessed for a previous tax year.
6. The terms and conditions of the documents creating your interest in the
land.
7. Materials furnished or labor performed in connection with planned
construction before signing and delivering the lien document described in
Schedule A, if the land is part of the homestead of the owner. (Applies to
the Mortgagee Title Policy Binder on Interim Construction Loan only, and
may be deleted if satisfactory evidence is furnished to us before a binder
is issued.)
Stewart Title Guaranty Company
See Continuation Page
<PAGE>
Continuation of Schedule B G. F. No. 99125088
8. Liens and leases that affect the title to the land, but that are subordinate
to the lien of the insured mortgage. (Applies to Mortgagee Policy only.)
9. The following matters and all terms of the documents creating or offering
evidence of the matters (We must insert matters or delete this exception.):
a. Subject to mineral reservations by the State of Texas in patents or
deeds to the following sections: Sections 48, 56, and 60, Block G-12;
Section 74, 84, 86 and 96, Block 341, all in Brewster County, Texas.
b. Royalty Deed from Louis Lewenthal et ux, to Bert Lewenthal et al, dated
July 21, 1953, recorded in Volume 123, Page 528, Deed Records of
Brewster County, Texas.
c. Mineral reservations contained in deed from Roy Seaberg to Arrow
Investment Co., Inc. dated May 7, 1975, recorded in Volume 189, Page
159, Deed Records of Brewster County, Texas.
d. Mineral reservations contained in deed from W.A. Conner to Arrow
Investment Co., Inc. dated May 7, 1975, recorded in Volume 189, Page
163, Deed Records of Brewster County, Texas.
e. Easement from Southern Investors Service Co., Inc. to Big Bend Telephone
Co., Inc. dated April 9, 1998, recorded in Volume 101, Page 143,
Official Public Records of Brewster County, Texas.
f. Easement from Southern Investors Service Co., Inc. to County of Brewster
dated May 21, 1999, recorded in Volume 118, Page 7, Official Public
Records of Brewster County, Texas.
g. Mineral reservations contained in deed from E.P. Armstrong to L.
Lewenthal dated July 3, 1946, recorded in Volume 109, Page 417, Deed
Records of Brewster County, Texas.
h. Right of way Easement from Louis Lewenthal to the State of Texas dated
July 21, 1958, recorded in Volume 133, Page 435, Deed Records of
Brewster County, Texas.
i. Access Easement contained in deed from Southern Investors Service Co.,
Inc. to Raymond Wayne Pauly dated March 10, 1998, recorded in Volume 96,
Page 308, Official Public Records of Brewster County, Texas.
j. Any easements, or claims of easement, upon or across the lands described
above which are visible, valid, apparent and existing.
k. Any inaccuracy of the square footage, area or acreage contained in
Schedule A attached. The Company does not insure square footage, area or
acreage.
l. This policy will not cover any acreage lying within the right of way of
State Highway 170.
Stewart Title Guaranty Company
Page 2
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE C
Your Policy will not cover loss, costs, attorneys' fees, and expenses resulting
from the following requirements that will appear as Exceptions in Schedule B of
the Policy, unless you dispose of these matters to our satisfaction, before the
date the Policy is issued:
1. Documents creating your title or interest must be approved by us and
must be signed, notarized and filed for record.
2. Satisfactory evidence must be provided that:
a. no person occupying the land claims any interest in that land against
the persons named in paragraph 3 of Schedule A,
b. all standby fees, taxes, assessments and charges against the property
have been paid,
c. all improvements or repairs to the property are completed and accepted
by the owner, and that all contractors, subcontractors, laborers and
suppliers have been fully paid, and that no mechanic's, laborer's or
materialmen's liens have attached to the property,
d. there is legal right of access to and from the land,
e. (on a Mortgagee Policy only) restrictions have not been and will not be
violated that affect the validity and priority of the insured mortgage.
3. You must pay the seller or borrower the agreed amount for your property or
interest.
4. Any defect, lien or other matter that may affect title to the land or
interest insured, that arises or is filed after the effective
date of this Commitment.
5. Upon execution of a Waiver of Inspection by the purchaser(s), "Rights of
parties in possession" will be inserted under Schedule B of the owner's
policy.
6. We will require a release of the lien created by Deed of Trust executed by
the Mischer Corp. (now Southern Investors Service Co., Inc.) in favor of
Walter Mischer, Trustee, dated May 18, 1993, securing the payment of one
note of even date therewith in the principal sum of $337,944.50 payable to
the order of Walter Mischer; said Deed of Trust is recorded in Volume 38,
Page 89, Official Public Records of Brewster County, Texas; being renewed,
modified and extended by Agreement dated February 9,1999, recorded in
Volume 114, Page 332, Official Public Records of Brewster County, Texas.
Stewart Title Guaranty Company
<PAGE>
COMMITMENT FOR TITLE INSURANCE
SCHEDULE D
G. F. No. or File No. 99125088 Effective Date: February 1, 2000, 8:00 am
Pursuant to the requirements of Rule P-21, Basic Manual of Rules, Rates and
Forms for the writing of Title Insurance in the State of Texas, the following
disclosures are made:
1. The following individuals are directors and/or officers, as indicated, of
the Title Insurance Company issuing this Commitment:
Stewart Title Guaranty Company
Shareholders owning, controlling or holding, either personally or beneficially,
10% or more of the shares of Stewart Title Guaranty
Company as of the last day of the year preceding the date herein above set forth
are as follows:
Stewart Information Services - 100%
OFFICERS DIRECTORS
President: Malcolm S. Morris Carloss Morris Stewart Morris
Executive Vice President: Bert B. Corkill Stewart Morris, Jr. Malcolm S. Morris
Secretary: Sue M. Nolz Max Crisp C. M. Hudspeth
Treasurer: Ken Anderson, Jr. Eugene Mohler Bruce Belin
Nita Hanks
2. As to ELLYSON ABSTRACT & TITLE CO. (Title Insurance Agent), the following
disclosures are made:
Shareholders, owners, partners or other persons having, owning or
controlling 1% or more of Title Insurance Agent are as follows:
Joy B. Adams 100%
3. You are entitled to receive advance disclosure of settlement charges in
connection with the proposed transaction to which this commitment relates.
Upon your request, such disclosure will be made to you. Additionally, the
name of any person, firm or corporation receiving any sum from the
settlement of this transaction will be disclosed on the closing or
settlement statement.
You are further advised that the estimated title premium is:
Owners Policy $0.00
Mortgagee Policy $0.00
Total $0.00
Of this total amount: 17.75% will be paid to the policy issuing Title
Insurance Company: 82.25% will be retained by the issuing Title Insurance
Agent; and the remainder of the estimated premium will be paid to other
parties as follows:
Amount To Whom For Services
------ ------- ------------
Stewart Title Guaranty Company
See Continuation Page
<PAGE>
Continuation of Schedule D G.F. No. 99125088
*The estimated premium is based upon information furnished to us as of the
date of this Commitment for Title Insurance. Final determination of the amount
of the premium will be made at closing in accordance with the Rules and
Regulations adopted by the State Board of Insurance.
This commitment is invalid unless the insuring provisions and Schedules A, B,
and C are attached.
Stewart Title Guaranty Company
Page 2
<PAGE>
STEWART TITLE
GUARANTY COMPANY
================================================================================
IMPORTANT INFORMATION
FOR INFORMATION, OR
TO MAKE A COMPLAINT
CALL OUR TOLL-FREE TELE-
PHONE NUMBER
1-800-729-1902
ALSO
YOU MAY CONTACT
THE TEXAS DEPARTMENT
OF INSURANCE AT
1-800-252-3439
to obtain information on:
1. filing a complaint against an insurance
company or agent,
2. whether an insurance company or agent
is licensed,
3. complaints received against an insurance
company or agent,
4. policyholder rights, and
5. a list of consumer publications and
services available through the
Department.
YOU MAY ALSO WRITE TO
THE TEXAS DEPARTMENT OF
INSURANCE
P.O. BOX 149104
AUSTIN, TEXAS 78714-9104
FAX NO. (512) 475-1771
================================================================================
AVISO IMPORTANTE
PARA INFORMACION, O
PARA SOMETER UNA QUEJA
LLAME AL NUMERO GRATIS
1-800-729-1902
TAMBIEN
PUEDE COMUNICARSE CON
EL DEPARTAMENTO DE SEGUROS
DE TEXAS AL
1-800-252-3439
para obtener informacion sobre:
1. como someter una queja en contra de
una compania de seguros o agente de
seguros,
2. si una compania de seguros o agente de
seguros tiene licencia,
3. quejas recibidas en contra de una
compania de seguros o agente de
seguros
4. los derechos del asegurado, y
5. una lista de publicaciones y servicios
para consumidores disponibles a traves
del Departamento.
TAMBIEN PUEDE ESCRIBIR AL
DEPARTAMENTO DE SEGUROS DE
TEXAS
P.O. BOX 149104
AUSTIN, TEXAS 78714-9104
FAX NO. (512) 475-1771
================================================================================
FORM: Commitment for Title Insurance
<PAGE>
STEWART TITLE
GUARANTY COMPANY
TEXAS TITLE INSURANCE INFORMATION
================================================================================
Title insurance insures you against loss
resulting from certain risks to your title.
The Commitment for Title Insurance is the
title insurance company's promise to issue
the title insurance policy. The commitment is
a legal document. You should review it
carefully to completely understand it before
your closing date.
================================================================================
El seguro de titulo le asegura en relacion a
perdidas resultantes de ciertos riesgos que
pueden afectar el titulo de su propiedad.
El compromiso para Seguro de Titulo es la
promesa de la compania aseguradora de
titulos de emitir la poliza de seguro de titulo.
El Compromiso es un documento legal.
Usted debe leerlo cuidadosamente y
entenderlo completamente antes de la fecha
para finalizar su transaccion.
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Your commitment for Title Insurance is a legal contract between you and us. The
Commitment is not an opinion or report of your title. It is a contract to issue
you a policy subject to the Commitment's terms and requirements.
Before issuing a Commitment for Title Insurance (the Commitment) or a Title
Insurance Policy (the Policy), the Title Insurance Company (the Company)
determines whether the title is insurable. This determination has already been
made. Part of that determination involves the Company's decision to insure the
title except for certain risks that will not be covered by the Policy. Some of
these risks are listed in Schedule B of the attached Commitment as Exceptions.
Other risks are stated in the policy as Exclusions. These risks will not be
covered by the Policy.
Another part of the determination involves whether the promise to insure is
conditioned upon certain requirements being met. Schedule C of the Commitment
lists these requirements that must be satisfied or the Company will refuse to
cover them. You may want to discuss any matters shown in Schedules B and C of
the Commitment with an attorney. These matters will affect your title and your
use of the land.
When your Policy is issued, the coverage will be limited by the Policy's
Exceptions, Exclusions and Conditions, defined below.
- EXCEPTIONS are title risks that a Policy generally covers but does not
cover in a particular instance. Exceptions are shown on Schedule B or
discussed in Schedule C of the Commitment. They can also be added if you
do not comply with the Conditions section of the Commitment. When the
Policy is issued, all Exceptions will be on Schedule B of the Policy.
- EXCLUSIONS are title risks that a Policy generally does not cover.
Exclusions are contained in the Policy but not shown or discussed in the
Commitment.
- CONDITIONS are additional provisions that qualify or limit your coverage.
Conditions include your responsibilities and those of the Company. They
are contained in the Policy but not shown or discussed in the Commitment.
The Policy Conditions are not the same as the Commitment Conditions.
You can get a copy of the policy form approved by the State Board of Insurance
by calling the Title Insurance Company at 1-800-729-1902 or by calling the title
insurance agent that issued the Commitment. The State Board of Insurance may
revise the policy form from time to time.
You can also get a brochure that explains the policy from the Texas Department
of Insurance by calling 1-800-252-3439.
Before the Policy is issued, you may request changes in the policy. Some of the
changes to consider are:
- Request amendment of the "area and boundary" exception (Schedule B,
paragraph 2). To get this amendment, you must furnish a survey. On the
Owner Policy, you must pay an additional premium for the amendment. If the
survey is acceptable to the Company, your Policy will insure you against
loss because of discrepancies or conflicts in boundary lines,
encroachments or protrusions, or overlapping of improvements. The Company
may then decide not to insure against specific boundary or survey problems
by making special exceptions in the Policy.
- Allow the Company to add an exception to "rights of parties in
possession." If you refuse this exception, the Company or the Title
insurance agent may inspect the property. The Company may except to and
not insure you against the rights of specific persons, such as renters,
adverse owners or easement holders who occupy the land. The Company may
charge you for the inspection. If you want to make your own inspection,
you must sign a Waiver of Inspection form and allow the Company to add
this exception to your Policy.
The entire premium for a Policy must be paid when the Policy is issued. You will
not owe any additional premiums unless you want to increase your coverage at a
later date and the Company agrees to add an Increased Value Endorsement.
FORM: Commitment for Title Insurance
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EXHIBIT "D"
QUITCLAIM DEED
STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF BREWSTER (S)
THAT SOUTHERN INVESTORS SERVICES COMPANY, INC., a Delaware corporation
("Grantor"), for and in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration to it in hand paid by __________________
("Grantee"), having a mailing address of ____________________, the receipt and
sufficiency of which consideration are hereby acknowledged, has QUITCLAIMED, and
by these presents does hereby QUITCLAIM, unto Grantee all of Grantor's right,
title and interest in and to the real property described in Exhibit A attached
hereto and made a part hereof for all purposes (the "Property").
Neither Grantor nor Grantor's successors or assigns shall have, claim or
demand any right or title to the Property or any part thereof.
EXECUTED to be effective as of ___________________________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By: __________________________________
Name: ________________________________
Title: _______________________________
STATE OF TEXAS (S)
(S)
COUNTY OF (S)
This instrument was acknowledged before me on _________________, 2000, by
_______________, ____________________ of Southern Investors Services Company,
Inc., a Delaware corporation, on behalf of said corporation.
Notary Public
[Seal]
<PAGE>
EXHIBIT A
(Legal Description of the Property)
<PAGE>
EXHIBIT E
FIRPTA AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform _______________________________, a ________________
("Transferee"), that withholding of tax is not required upon the disposition of
a U.S. real property interest in the real property described on Exhibit "A"
attached hereto (the "Property") by SOUTHERN INVESTORS SERVICES COMPANY, INC., a
Delaware corporation, a Texas limited partnership ("Transferor"), the
undersigned hereby certifies as follows:
1. Transferor is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor's U.S. employer identification number is: ___________; and
3. Transferor's office address is: 2727 N. Loop West, Suite 200, Houston,
Texas 77008.
Transferor understands that this certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury, the undersigned, in the capacity set forth
below, hereby declares that he has examined this certification and to the best
of his knowledge and belief it is true, correct, and complete, and the
undersigned further declares that he has authority to sign this document in such
capacity.
EXECUTED to be effective as of the ______ day of ________, 2000.
SOUTHERN INVESTORS SERVICES
COMPANY, INC., a Delaware corporation
By:
Name:
Title:
<PAGE>
THE STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
This instrument was acknowledged before me on the _______ day of
__________, 2000, by ______________________, as __________________ of Southern
Investors Services Company, Inc, a Delaware corporation, on behalf of said
corporation.
Notary Public in and for
the State of Texas
Printed Name:
My commission expires: ____________
<PAGE>
EXHIBIT A
Legal Description
[Attached]
<PAGE>
EXHIBIT F
BUYER'S CERTIFICATE REGARDING PROPERTY CONDITION
THE UNDERSIGNED, ________________, A _______________________, ("BUYER"),
HAS THIS DAY PURCHASED FROM SOUTHERN INVESTORS SERVICES COMPANY, INC., A
DELAWARE CORPORATION ("SELLER"), THAT CERTAIN ____ ACRE TRACT OR PARCEL OF REAL
PROPERTY, MORE OR LESS, DESCRIBED ON EXHIBIT "A" ATTACHED HERETO AND MADE A PART
HEREOF FOR ALL PURPOSES (SUCH REAL PROPERTY, ANY IMPROVEMENTS THEREON, AND ANY
RELATED RIGHTS BEING HEREINAFTER COLLECTIVELY CALLED THE "REAL PROPERTY"),
TOGETHER WITH OTHER RIGHTS AND INTERESTS OF SELLER RELATED THERETO, PURSUANT TO
THAT CERTAIN REAL ESTATE PURCHASE AND SALE AGREEMENT BETWEEN SELLER AND BUYER
DATED EFFECTIVE FEBRUARY 24, 2000 (THE "CONTRACT").
BUYER AGREES THAT IT HAS HAD PRIOR TO CLOSING THE OPPORTUNITY TO PERFORM
EXAMINATIONS AND INVESTIGATIONS OF ALL OF THE PROPERTY DESCRIBED IN THE
CONTRACT, INCLUDING SPECIFICALLY, WITHOUT LIMITATION, EXAMINATIONS AND
INVESTIGATIONS FOR THE PRESENCE OF ASBESTOS, PCB EMISSIONS AND HAZARDOUS WASTES
ON THE REAL PROPERTY, AND THAT BUYER IS RELYING SOLELY UPON SUCH EXAMINATIONS
AND INVESTIGATIONS (EXCEPT FOR SELLER'S WARRANTIES CONTAINED IN THE CONTRACT) IN
PURCHASING THE PROPERTY. BUYER HEREBY ASSUMES FULL RESPONSIBILITY FOR SUCH
INSPECTIONS AND, WITHOUT LIMITING ANY OTHER DISCLAIMER OF SELLER HEREIN,
IRREVOCABLY WAIVES ANY CLAIM AGAINST SELLER ARISING FROM THE PRESENCE OF
ASBESTOS, PCB EMISSIONS AND HAZARDOUS WASTES UPON THE REAL PROPERTY.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AND AS A MATERIAL INDUCEMENT TO
SELLER'S ENTERING INTO THE CONTRACT AND AGREEING TO ACCEPT THE PURCHASE PRICE,
IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT BUYER IS PURCHASING THE PROPERTY (AND
EACH AND ALL PORTIONS THEREOF) "AS IS" AND "WHERE IS", AND WITH ALL FAULTS, AND
THAT EXCEPT AS EXPRESSLY SET FORTH IN THE CONTRACT (AND AS EXPRESSLY QUALIFIED
AND LIMITED THEREIN), SELLER IS MAKING NO REPRESENTATIONS OR WARRANTIES, WHETHER
EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO THE
QUALITY, PHYSICAL CONDITION OR VALUE OF THE PROPERTY, THE INCOME OR EXPENSES
FROM OR OF THE PROPERTY OR THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS
OR REGULATIONS, INCLUDING WITHOUT LIMITATION BUILDING AND FIRE CODES. WITHOUT
LIMITING THE FOREGOING, IT IS UNDERSTOOD AND AGREED THAT (A) SELLER MAKES NO
EXPRESS OR IMPLIED WARRANTY OF HABITABILITY, SUITABILITY, MERCHANTABILITY OR
FITNESS FOR A PARTICULAR USE OR PURPOSE, AND (B) TO THE EXTENT THAT
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WARRANTIES OF TITLE HAVE BEEN MADE, SUCH WARRANTIES ARE SET FORTH SOLELY AND
EXPRESSLY IN THE SPECIAL WARRANTY DEED OF EVEN DATE HEREWITH AND OTHER DOCUMENTS
OF CONVEYANCE DELIVERED TO BUYER BY SELLER AT CLOSING. BUYER FURTHER AGREES THAT
SELLER IS NOT LIABLE OR BOUND BY ANY GUARANTEES, PROMISES, STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY MADE OR FURNISHED BY
ANY REAL ESTATE AGENT, BROKER, EMPLOYEE, SERVANT OR OTHER PERSON REPRESENTING OR
PURPORTING TO REPRESENT SELLER, EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH
IN THE CONTRACT (AND AS EXPRESSLY QUALIFIED AND LIMITED THEREIN).
IN FURTHERANCE OF AND PURSUANT TO TEXAS BUSINESS AND COMMERCE CODE SECTION
17.42(A), AS AMENDED, BUYER HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS IT MAY
HAVE UNDER THE TEXAS DECEPTIVE TRADE PRACTICE-CONSUMER PROTECTION ACT OTHER THAN
THE PROVISIONS OF TEXAS BUSINESS AND COMMERCE CODE SECTION 17.555. IN THAT
REGARD, BUYER HEREBY REPRESENTS TO SELLER THAT (A) BUYER HAS KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE
MERITS AND RISKS OF THIS TRANSACTION, AND (B) BUYER IS NOT IN A SIGNIFICANTLY
DISPARATE BARGAINING POSITION IN CONNECTION WITH NEGOTIATING FOR AND
CONSUMMATING THE PURCHASE OF THE PROPERTY, AND (C) BUYER HAS BEEN REPRESENTED BY
LEGAL COUNSEL ACCEPTABLE TO IT IN CONNECTION WITH NEGOTIATING FOR AND
CONSUMMATING THE PURCHASE OF THE PROPERTY.
EXECUTED THIS _____ DAY OF ________________, 2000.
By:
Name:
Title:
"BUYER"
<PAGE>
THE STATE OF _______________ (S)
(S)
COUNTY OF __________________ (S)
This instrument was acknowledged before me on the _____ day of ___________,
2000, by __________________________, the ________________________ of
______________________________________, a _________________________________, on
behalf of said .
Notary Public in and for
the State of
Printed Name:
My Commission Expires:
