Purchase Agreement between 4211 Cedar Springs Partners, Ltd., as Seller, and Kent International Holdings, Inc., as Buyer, dated February 22, 2011

 

 

 

 

Date of Execution:

Date of Execution:

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Title:

Title:

Address:	100 Throckmorton, Suite 700		Address:	4101 William D. Tate, Suite 100
	Fort Worth, Texas			Grapevine, Texas 760

 

          Seller and Purchaser hereby agree to the following terms and conditions which shall modify and amend the Contract of Sale referenced above (the “Contract”), and shall supersede the provisions of the Contract which may be in conflict:

 

          A.          During the Inspection Period, Purchaser shall have the right to conduct studies and to make investigations of the Property as Purchaser deems prudent, in accordance with Addendum C attached to the Contract. Purchaser acknowledges that the Federal Bureau of Prisons (“FBOP”) occupies the Building and for security purposes, access to the Building is limited or restricted. In that regard, Purchaser agrees that its inspection of the Property will necessarily occur at a time that will be arranged and coordinated by Seller with the FPOB, and a representative of Seller will need to be present at all times during the inspection and will need to escort Purchaser’s representative(s) during their inspection of the Building. Seller agrees to cooperate with Purchaser and use diligent and good faith efforts to assist Purchaser in accessing the Building for its inspections. Notwithstanding the terms of the Contract to the contrary, within two (2) business days of the execution of the Contract by both parties, Seller shall deliver to Purchaser the following:

1. All existing property condition assessments, environmental and engineering reports in Seller’s possession which pertain to the Property;

2. Copies of all maintenance and vendor contracts, service contracts, electricity provider agreements and equipment leases currently pertaining to the Property;

3. A copy of the certificate of occupancy for the Building; and

4. Architectural building plans for the Building, including the original construction of the Building and the renovation of the Building

5. Copies of all warranties and guaranties;

6. Profit and loss operating statements for the Property for the three (3) preceding calendar years (2008, 2009 and 2010), and for 2011 to the present date, which shall include utility charges, repair costs and other expenses incurred by Seller for the operation and maintenance of the Property for such periods of time.

 

          B.          At the Closing, Seller shall convey to Purchaser, as a part of the Property, all fixtures, equipment and articles of personal property situated on or about the Property that are owned by Seller (and not owned by the tenant or occupant of the Building).

 

 

          C.          Under the Assignment of Lease to be delivered by the Seller to Purchaser at Closing, the Seller shall indemnify, reimburse and hold Purchaser harmless from any and all claims, losses, damages and expenses (including reasonable attorneys fees and court costs) arising from or attributable to the acts or omissions of Seller prior to the Closing date, and pertaining to the Property or to the tenant lease affecting the Property (the “Lease”) with the United States of America General Services Administration (“GSA”), and the obligations of the landlord thereunder; and the Purchaser shall assume Seller’s obligations, as landlord, under such tenant Lease, and shall indemnify, reimburse and hold Seller harmless from any and all claims, losses, damages and expenses (including reasonable attorneys fees and court costs) arising from or attributable to the acts or omissions of Purchaser after the Closing date, and pertaining to the Property or the tenant Lease, and the obligations of the landlord thereunder.

 

          D.          Purchaser acknowledges that it is being afforded the opportunity to review all aspects of the Property pursuant to the Inspection Period. Seller represents and warrants that (i) it has received no notice of nor, with no obligation to investigate, has Seller any knowledge of any current violation of the Property or the improvements thereon, as currently used by the tenant, with respect to any laws, ordinances, regulations or rules that pertain to the Property, and (ii) Seller has not violated the Lease, nor, with no obligation to investigate, to its knowledge, has Tenant violated the Lease. All warranties and representations made by Seller under the Contract (including under this Addendum F and any Contact Exhibits) shall survive Closing, but shall terminate on the date that is one (1) year following the Closing Date, and shall be void with respect to any claims that are made after the expiration of such one (1) year period. Except as expressly set forth in the Contract (including all Addendums (and this Addendum F) and Exhibits), Seller shall have no liability to Purchaser, and Purchaser hereby releases Seller from any liability (including contractual and/or statutory actions for contribution or indemnity), for, concerning or regarding (1) the nature and condition of the Property, including the suitability thereof for any activity or use; (2) any improvements or substances located thereon; or (3) the compliance of the Property with any laws, rules, ordinances or regulations of any government or other body. Except as may be expressly provided in the Agreement, Seller has not made, does not make and expressly disclaims any warranties, representations, covenants or guarantees, expressed or implied, or arising by operation of law, as to the merchantability, habitability, quantity, quality or environmental condition of the Property or its suitability or fitness for any particular purpose or use. Purchaser affirms that it has, or prior to Closing that it will have, (i) investigated and inspected the Property to its satisfaction and become familiar and satisfied with the condition of the Property, and (ii) made its own determination as to (a) the merchantability, quantity, quality and condition of the Property, including the possible presence of toxic or hazardous substances, materials or wastes or other actual or potential environmental contaminates, and (b) the Property’s suitability or fitness for any particular purpose or use.

 

 

          E.          EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT PURCHASER HEREBY ACCEPTS THE PROPERTY IN ITS PRESENT CONDITION ON AN “AS IS”, “WHERE IS” AND “WITH ALL FAULTS” BASIS, AND ACKNOWLEDGES THAT (I) WITHOUT THIS ACCEPTANCE, THIS SALE WOULD NOT BE MADE, AND (II) THAT SELLER SHALL BE UNDER NO OBLIGATION WHATSOEVER TO UNDERTAKE ANY REPAIR, ALTERATION, REMEDIATION OR OTHER WORK OF ANY KIND WITH RESPECT TO ANY PORTION OF THE PROPERTY. PURCHASER AND ITS SUCCESSORS AND ASSIGNS HAVE, AND SHALL BE DEEMED TO HAVE, ASSUMED ALL RISK AND LIABILITY WITH RESPECT TO THE PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES, MATERIALS OR WASTES OR OTHER ACTUAL OR POTENTIAL ENVIRONMENTAL CONTAMINATES ON, WITHIN OR UNDER THE SURFACE OF THE PROPERTY, WHETHER KNOWN OR UNKNOWN, APPARENT, NON-APPARENT OR LATENT, AND WHETHER EXISTING PRIOR TO, AT OR SUBSEQUENT TO TRANSFER OF THE PROPERTY TO PURCHASER. SELLER IS HEREBY RELEASED BY PURCHASER AND ITS SUCCESSORS AND ASSIGNS OF AND FROM ANY AND ALL RESPONSIBILITY, LIABILITY, OBLIGATIONS AND CLAIMS, KNOWN OR UNKNOWN, INCLUDING (1) ANY OBLIGATION TO TAKE THE PROPERTY BACK OR REDUCE THE PRICE, OR (2) ACTIONS FOR CONTRIBUTION OR INDEMNITY, THAT PURCHASER OR ITS SUCCESSORS AND ASSIGNS MAY HAVE AGAINST SELLER OR THAT MAY ARISE IN THE FUTURE, BASED IN WHOLE OR IN PART UPON THE PRESENCE OF TOXIC OR HAZARDOUS SUBSTANCES, MATERIALS OR WASTES OR OTHER ACTUAL OR POTENTIAL ENVIRONMENTAL CONTAMINATES ON, WITHIN OR UNDER THE SURFACE OF THE PROPERTY, INCLUDING ALL RESPONSIBILITY, LIABILITY, OBLIGATIONS AND CLAIMS THAT MAY ARISE UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT, AS AMENDED 42 U.S.C. SECTION 9601 ET SEQ. PURCHASER FURTHER ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY EXPLAINED TO PURCHASER AND THAT PURCHASER FULLY UNDERSTANDS AND ACCEPTS THE SAME.

 

          F.          From and after the Effective Date until the Closing Date or earlier termination of this Contract, Seller shall:

	(1) Manage the Property in the ordinary course of business as Seller has previously done, and shall not commit or permit any waste on the Property.
	(2) Not enter into any written or oral service contract or other agreement with respect to the Property without the prior written consent of the Purchaser, unless the contract or agreement may be terminated upon 30 days written notice by Purchaser. Subject to Purchaser’s review of service contracts affecting the Property during the Inspection Period, Purchaser agrees at Closing to assume the Seller’s obligations under all service contracts affecting or pertaining to the Property that were entered into by Seller prior to the Effective Date, or that were entered into by Seller after the Effective Date with Purchaser’s approval, including, without limitation, contracts for the provision of landscaping services with respect to the Property.
	(3) Advise Purchaser promptly after Seller receives notice of (or institutes) any litigation, arbitration, or administrative hearing before any governmental or quasi-governmental agency or authority concerning or affecting the Property which is instituted or threatened after the Effective Date.
	(4) Not sell, assign, convey or enter into any lease, lease amendment, license, easement, restriction, encumbrance, lien or security interest with respect to the Property without discharging the same prior to or at the time of Closing or without the Purchaser’s prior written approval.

 

(5) Not permit any mechanic’s or materialmen’s liens to attach to any portion of the Property, unless such liens are contested and Seller provides a bond or security at Closing to assure that such liens will be satisfied and discharged.

 

          G.        Purchaser and its agents and representative shall maintain the terms of this Agreement, and the content of all information and reports obtained from Seller relating to the Property, confidential and shall not disclose any such confidential information to any other person or entity without obtaining Seller’s prior written consent.

 

          H.        Seller shall, as a condition to Purchaser’s obligation to Close the transactions contemplated under this Contract, provide to Purchaser on or before the Closing Date, as may be extended, an estoppel certificate (“Estoppel Certificate”) that is in the form of the estoppel certificate attached hereto as Exhibit F-l, or that is upon terms that are materially the same to those contained in the form of estoppel certificate attached hereto as Exhibit F-l, executed by the GSA. Notwithstanding the foregoing, and in lieu thereof, Purchaser agrees that this condition to Closing will be satisfied if on or before the Closing Date, as may be extended, Seller shall provide to Purchaser (i) a letter (“Letter Estoppel”) executed by the GSA, as allowed for under Sections 5(a) and 5(b) on Page 4 of the General Clauses section of the Lease, providing for the certifications referenced therein, and subject to the conditions set forth therein and (ii) an indemnity from Scott A. Larson (“Larson”) in the form the Indemnification Agreement attached hereto as Exhibit F-2, executed by Larson, pursuant to which Larson shall indemnify the Purchaser for any current default of the Seller, as landlord, and for any default of Seller, as landlord, that existed in the past and for which the GSA may exercise remedies, under the Lease, referenced above, subject to the terms and conditions contained therein; provided, however, Seller agrees to use good faith efforts to obtain the Estoppel Certificate. In the event that the Seller is unable to provide the Estoppel Certificate, or Letter Estoppel (with Larson’s indemnity discussed below) as required above by the Closing Date, then the Closing Date shall automatically be extended for a period of fifteen (15) days in order to provide Seller with additional time to obtain such Estoppel Certificate or Letter Estoppel, as the case may be. Purchaser agrees that the Estoppel Certificate or Letter Estoppel, as the case may be, may be addressed to Seller and to its lender as long as the same is assignable, and Seller assigns its interests thereunder to Purchaser at Closing. In the event that the Seller is unable to provide to Purchaser the Estoppel Certificate or the Letter Estoppel (with Larson’s indemnity) as required above on or before the Closing Date, as extended as provided above, then Purchaser may either waive this requirement of receiving the Estoppel Certificate or Letter Estoppel prior to the Closing and proceed to Close the purchase of the Property under this Contract, or terminate this Contract by providing written notice of termination to the Seller, in which case this Contract shall be terminated and the Purchaser’s Earnest Money shall be refunded to Purchaser, and the parties shall have no further obligations to each other under this Contract. Notwithstanding the foregoing, in the event either (i) that Purchaser elects to Close the purchase of the Property, waiving the requirement of receiving the Estoppel Certificate or Letter Estoppel, as provided for above, or (ii) Seller delivers the Letter Estoppel, or an Estoppel Certificate that is in a form materially different than that attached hereto as Exhibit F-l, the Seller shall nonetheless be required to provide to Purchaser at the Closing the Indemnification Agreement, referenced below, executed by Larson.

 

 

          I.          Scott A. Larson, by his signature to this Addendum F, below, agrees that at the Closing of the transactions contemplated by this Agreement, he will execute and deliver to Purchaser the Indemnification Agreement attached hereto as Exhibit F-2, if and as required in accordance with Paragraph H above. In that regard, Larson agrees to the indemnity contained in such Indemnification Agreement, subject to the terms and conditions contained therein.

 

          J.          Seller agrees to deliver at Closing affidavits acceptable by the title company stating (i) that there are no outstanding debts or liens affecting the Property that will not be satisfied at Closing, and (ii) that no changes have occurred at the Property so that the Survey is an accurate reflection of the same.

 

          IN WITNESS WHEREOF, this Addendum has been executed as for the date of the Agreement, referenced above.

	SELLER: 4211 CEDAR SPRINGS PARTNERS, LTD., a Texas Limited Partnership By: 4211 Cedar Springs Holdings, L.L.C., (its General Partner)
	By:	/s/ Scott A. Larson
		Scott A. Larson, President
	PURCHASER: KENT INTERNATION HOLDINGS, INC., a Nevada corporation

 

By:

Name:

Title:

 

          The undersigned, Scott A. Larson, has hereby provided his signature below, for the limited purpose of agreeing to the terms of the provisions of Paragraph I of this Addendum F, as set forth above.

	/s/ Scott A. Larson
	Scott A. Larson

 

 

 

          THIS ESTOPPEL CERTIFICATE (“Estoppel Certificate”), dated this ______ day of _____________, 2011, is executed by the United States of America General Services Administration (“Lessee”).

 

R E C I T A L S:

 

          I.          Lessee is the Lessee under that certain U.S. Government Lease for Real Property, dated January 9, 2006 (Lease No. GS-07B-16023), as amended by that certain Supplemental Lease Agreement No. 1, that certain Supplemental Lease Agreement No. 2, dated October 24, 2007, that certain Supplemental Lease Agreement No. 3, dated April 21, 2009, that certain Supplemental Lease Agreement No. 4, dated April 21, 2009, and that certain Supplemental Lease Agreement No. 5, dated October 30, 2009, all of which lease documents (“Lease Documents”) were entered into by Lessee with 4211 Cedar Springs Partners, Ltd., as Lessor (hereinafter collectively referred to as the “Lease”) covering the property located at 4211 Cedar Springs, Dallas, Texas 75219, and as more particularly described in Exhibit “A” attached hereto and made a part hereof (the “Property”).

 

          II.          Lessor and its lender, Wells Fargo Bank, N.A., have requested that Lessee make the representations and certifications provided for under this Estoppel Certificate.

 

A G R E E M E N T:

 

          NOW, THEREFORE, in consideration of the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Lessee hereby makes the following representations and certifications:

	1.	The Lease is accurately described in the first paragraph of Recitals above, and except as provided in the Lease Documents described in the Recitals above, it has not been otherwise amended, modified or extended. True, correct and complete copies of the Lease Documents comprising the Lease are attached hereto as Exhibit “B”.
	2.	The Lease does not contain any options to purchase and/or lease additional space, rights of set off, rights of first refusal to purchase and/or lease additional space or any similar provisions regarding acquisition of ownership interests or additional leased space in the building, except as may be provided in the Lease Documents.

 

 

	3.	The current term of the Lease commenced on January 18, 2008, and will terminate on January 17, 2023.
	4.	The current amount of monthly base rent payable under the Lease is $62,205.37. Rent, which is payable in arrears, has been paid through January 31, 2011. No advance rents have been prepaid. Except as may be provided for under the Lease Documents, no free rent periods or other concessions of any kind or nature have been granted to Lessee under the Lease.
	5.	All improvements to be made pursuant to the terms of the Lease have been completed and accepted by Lessee.
	6.	There is no security deposit under the Lease.
	7.	Lessee has not sublet any portion of the leased premises or assigned any of its interests or rights under the Lease.
	8.	Lessee is in full and complete possession of the premises demised under the Lease, such possession having been accepted by the Lessee pursuant to the terms of the Lease. The leased premises contain 39,329 rentable square feet.
	9.	The Lease is in full force and effect, Lessee has no existing claims, defenses or offsets under the Lease against Lessor, no uncured default by either Lessee or Lessor exists under the Lease, and no event has occurred that would, except for the lapse of time, the giving of notice or both, constitute a default.
	10.	The undersigned representative of Lessee certifies that he/she has full power, authority and right to execute and deliver this Estoppel Certificate on behalf of Lessee.

 

          This Estoppel Certificate is made by Lessee for the benefit of Lessor and its lender, Wells Fargo Bank, N.A., and any of their assignees and successors in interest that may hereafter acquire an interest in the Property, with the understanding that such parties will rely upon the statements set forth above with respect to the Lease and the Property.

 

          IN WITNESS WHEREOF, the Lessee has executed this Estoppel Certificate as of the day and year first above written.

 

 

 

 

BEING a tract of land out of the J.H. Sylvester Survey, Abstract No. 1383, and being all of Lot 1A, Block 9/1616 of the Headwaters Addition, an addition to the City of Dallas, Texas, as recorded in Volume 82206, Page 1148 of the Map Records of Dallas County, Texas, said tract being more particularly described as follows:

	BEGINNING at a ½” iron rod found for corner in the southerly right-of-way line of Wycliff-Douglas Connection (32 feet from its centerline) at its intersection with the southwesterly right-of-way line of Cedar Springs Road (32 feet from its centerline);
	THENCE S 47 degrees 49 minutes E, along the above said southwesterly line of Cedar Springs Road, 185.46 feet to a ½” iron rod found at the beginning of a cut-off with Douglas Street;
	THENCE S 1 degrees 28 minutes 41 seconds E, along the above said cut-off line, 9.66 feet to a ½” iron rod found for corner in the northwesterly right-of-way line of Douglas Street (21 feet from its centerline);
	THENCE S 44 degrees 51 minutes 40 seconds W, along the above said northwesterly line of Douglas Street, 136.00 feet to a ½” iron rod found for a corner in the northeasterly right-of-way line of a 15 foot alley;
	THENCE N 47 degrees 49 minutes W, along the above said northeasterly line of a 15 foot alley, 322.00 feet to a ½” iron rod found for corner;
	THENCE N 44 degrees 51 minutes 40 seconds E, 12.25 feet to a ½” iron rod set for a corner in the above referenced Wycliff-Douglas Connection;
	THENCE S 83 degrees 47 minutes 29 seconds E, along the above said Wycliff-Douglas Connection, 11.50 feet to a ½” iron rod for the beginning of a curve to the left having a radius of 601.57 feet;
	THENCE Southwesterly to Northeasterly, continuing along the above said southerly line of Wycliff-Douglas Connection and with the above said circular curve to the left thru a central angle of 16 degrees 54 minutes 43 seconds, an arc distance of 177.56 feet to a POINT OF BEGINNING and containing 36,589 square feet or 0.8400 acres of land.

 

 

 

(See attached)

 

 

INDEMNIFICATION AGREEMENT

 

          This Indemnification Agreement is executed as of the ______ day of ___________, 2011, by Scott A. Larson (“Indemnitor”), whose address is 3311 Oak Lawn Ave., Suite 250, Dallas, Texas 75219, for the benefit of Kent International Holdings, Inc., a Nevada corporation (“Indemnitee”).

 

WITNESSETH:

 

          WHEREAS, Indemnitor is the beneficial owner of all outstanding member ownership interests of 4211 Cedar Springs Holdings, L.L.C., a Texas limited liability company, which is the managing general partner of 4211 Cedar Springs Partners, Ltd., a Texas limited partnership (the “Seller”);

 

          WHEREAS, of even date herewith, Seller has sold that certain property located at 4211 Cedar Springs, Dallas, Texas 75219 (the “Property”) to Indemnitee, which sale occurred conditioned upon, and in consideration of, the Indemnitor giving its indemnity to Indemnitee, as provided hereunder; and

 

          WHEREAS, the Property is currently leased to the United States of America General Services Administration (the “GSA”), for use by the Federal Bureau of Prisons, under that certain U.S. Government Lease for Real Property, dated January 9, 2006 (Lease No. GS-07B-16023), as amended by that certain Supplemental Lease Agreement No. 1, that certain Supplemental Lease Agreement No. 2, dated October 24, 2007, that certain Supplemental Lease Agreement No. 3, dated April 21, 2009, that certain Supplemental Lease Agreement No. 4, dated April 21, 2009, and that certain Supplemental Lease Agreement No. 5, dated October 30, 2009, all of which lease documents were entered into by Seller, as Lessor, with the GSA, as Lessee (hereinafter collectively referred to as the “Lease”).

 

          NOW, THEREFORE, in consideration of the foregoing premises, and for Ten Dollars ($10,00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned Indemnitor hereby agrees to indemnify and hold Indemnitee harmless for any and all claims, losses, liabilities and damages that Indemnitee, as purchaser of the Property, may incur as a result of any default that may currently exist, or that existed in the past and for which GSA may exercise remedies, under the Lease with respect to the performance of the obligations of Seller, as Lessor thereunder, provided that this indemnity shall terminate one (1) year from the date hereof, and shall be null and void with respect to any claims made on the indemnity after such one (1) year period, and provided furthermore, that the Indemnitor’s liability hereunder shall in all cases be limited to, and shall not exceed, the aggregate sum of One Hundred Thousand Dollars ($100,000.00).

 

 

          IN WITNESS WHEREOF, this Indemnification Agreement is executed as of the date first set forth above.

 

	/s/ Scott A. Larson
	Scott A. Larson

 

Addendum F - Other Provisions - Page 11 

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