SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1996
Commission File Number: 0-19989
FM Properties Inc.
Incorporated in Delaware 72-1211572
(IRS Employer Identification No.)
1615 Poydras Street, New Orleans, Louisiana 70112
Registrant's telephone number, including area code: (504) 582-4000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes X No
---
On September 30, 1996, there were issued and outstanding 14,285,770
shares of the registrant's Common Stock, par value $0.01 per share.
1
FM PROPERTIES INC.
TABLE OF CONTENTS
Page
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Operations 4
Statements of Cash Flow 5
Notes to Financial Statements 6
Remarks 6
Report of Independent Public Accountants 7
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 8
Part II. Other Information 10
Signature 11
Exhibit Index E-1
2
FM PROPERTIES INC.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
FM PROPERTIES INC.
CONDENSED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995
---------- ----------
(In Thousands)
ASSETS
Current assets:
Cash and short-term investments $ 1,789 $ 2,282
Accounts receivable and other 2,403 4,616
Income tax receivable 526 2,693
---------- ----------
Total current assets 4,718 9,591
Real estate and facilities 123,219 180,040
Other assets 6,398 5,172
---------- ----------
Total assets $ 134,335 $ 194,803
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 2,726 $ 8,100
Current portion of long-term debt 63,940 -
---------- ----------
Total current liabilities 66,666 8,100
Long-term debt, less current portion - 121,294
Other liabilities 7,080 5,886
Stockholders' equity 60,589 59,523
---------- ----------
Total liabilities and
stockholders' equity $ 134,335 $ 194,803
========== ==========
The accompanying notes are an integral part of these financial
statements.
3
FM PROPERTIES INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
(In Thousands, Except Per Share Amounts)
Revenues $ 34,461 $ 25,497 $ 72,054 $ 41,882
Costs and expenses:
Cost of sales,
including
depreciation and
amortization 31,866 25,607 66,624 42,650
General and
administrative
expenses 558 872 1,869 3,680
---------- ---------- ---------- ----------
Total costs and
expenses 32,424 26,479 68,493 46,330
---------- ---------- ---------- ----------
Operating income
(loss) 2,037 (982) 3,561 (4,448)
Interest
expense, net (1,193) (226) (3,085) (492)
Other income, net 90 3 64 7
---------- ---------- ---------- ----------
Income (loss)
before income
tax benefit 934 (1,205) 540 (4,933)
Income tax benefit 526 - 526 -
---------- ---------- ---------- ----------
Net income (loss) $ 1,460 $ (1,205) $ 1,066 $ (4,933)
========== ========== ========== ==========
Net income (loss)
per share $.10 $(.08) $.07 $(.35)
==== ===== ==== =====
Average shares
outstanding 14,395 14,286 14,364 14,286
====== ====== ====== ======
The accompanying notes are an integral part of these financial
statements.
4
FM PROPERTIES INC.
STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended
September 30,
------------------------
1996 1995
---------- ----------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 1,066 $ (4,933)
Adjustments to reconcile net
income (loss) to net cash provided
by operating activities:
Depreciation and amortization 1,465 1,842
Cost of real estate sales 59,974 37,700
(Increase) decrease in working capital:
Accounts receivable and other 2,222 2,758
Accounts payable and accrued
liabilities (3,216) (1,883)
Other (30) 4,176
---------- ----------
Net cash provided by operating
activities 61,481 39,660
---------- ----------
Cash flow from investing activities:
Real estate and facilities (4,620) (22,129)
---------- ----------
Net cash used in investing
activities (4,620) (22,129)
---------- ----------
Cash flow from financing activities:
Proceeds of debt 70,000 8,000
Repayment of debt (127,354) (24,331)
---------- ----------
Net cash used in financing
activities (57,354) (16,331)
---------- ----------
Net increase (decrease) in cash
and short-term investments (493) 1,200
Cash and short-term investments
at beginning of year 2,282 1,200
---------- ----------
Cash and short-term investments
at end of period $ 1,789 $ 2,400
========== ==========
The accompanying notes are an integral part of these financial
statements.
5
FM PROPERTIES INC.
NOTES TO FINANCIAL STATEMENTS
1. INTEREST COSTS
Interest expense excludes capitalized interest of $0.4 million and
$2.9 million in the third quarter of 1996 and 1995, respectively, and
$2.7 million and $9.1 million for the first nine months of 1996 and
1995, respectively.
2. INCOME TAXES
During the third quarter of 1996, a $0.5 million tax benefit was
recognized from the carryback of the current year's estimated tax loss
to recoup taxes paid in previous years.
--------------------
Remarks
The information furnished herein should be read in conjunction with FM
Properties Inc. financial statements contained in its 1995 Annual
Report to stockholders included in its Annual Report on Form 10-K.
The information furnished herein reflects all adjustments which are,
in the opinion of management, necessary for a fair statement of the
results for the period. All such adjustments are, in the opinion of
management, of a normal recurring nature.
6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
of FM Properties Inc.:
We have reviewed the accompanying condensed consolidated balance sheet
of FM Properties Inc. (the Company), a Delaware Corporation, as of
September 30, 1996, and the related condensed statements of operations
for the three-month and nine-month periods ended September 30, 1996
and 1995, and the condensed statements of cash flow for the nine-month
periods ended September 30, 1996 and 1995. These financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet of FM Properties Inc. as of
December 31, 1995, and the related statements of operations,
stockholders' equity and cash flow for the year then ended (not
presented herein), and in our report dated January 23, 1996, based on
our audit, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the
accompanying condensed balance sheet as of December 31, 1995, is
fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
October 22, 1996
7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
OVERVIEW
FM Properties Inc. (FMPO) operates through its 99.8 percent ownership
of FM Properties Operating Co. (the Partnership), with 0.2 percent
owned by Freeport-McMoRan Inc. (FTX) which serves as the managing
general partner.
Throughout 1996, FMPO has capitalized on the enhanced sales
opportunities at its Austin, Texas property holdings brought about by
the positive legislative and judicial developments which occurred
during 1995. FMPO's third-quarter 1996 revenues from its Austin area
properties totaled $25.9 million, including the sale of the Barton
Creek Country Club and Conference Resort for $25.0 million and the
sale of a 24 acre undeveloped tract for $0.7 million. Several
additional tracts within the Barton Creek Development are currently
under contract and are scheduled to close during the remainder of 1996
and early 1997. In addition to the sales in the Austin area, third-
quarter 1996 revenues also include the sale of 22 acres of undeveloped
commercial property, located in the Dallas area, for $5.7 million.
The sale of undeveloped tracts to sub-developers is an integral part
of FMPO's business strategy. These transactions provide funds to
reduce debt, lower future carrying and development costs and establish
values for FMPO's remaining properties.
The State Court of Appeals in Austin recently overturned the
favorable District Court ruling which invalidated the _SOS_ ordinance
in Austin; however, the appeals court upheld the lower court's
favorable holding with respect to the interpretation of certain
grandfather rights for platted land. A decision will be made in the
near future with respect to an appeal of the case. This ruling is not
expected to adversely affect any of FMPO's property holdings. The
City of Austin's regulatory authority was, in effect, superseded by
Texas state legislation enacted during 1995.
Included in this legislation was the creation of the Southwest
Travis County Water District (District) which encompasses the land
owned by Circle C Land Corp. (Circle C), a wholly owned subsidiary.
In October 1996, the City of Austin filed a petition for declaratory
judgment asserting that the legislation that created the District is
unconstitutional. The District has indicated that it intends to
defend itself against the City's claim. None of FMPO's land other
than the land owned by Circle C is included in the District.
During the third quarter of 1996, FMPO reached an agreement to
sell the remaining assets of Circle C for $34.0 million. The
remaining assets of Circle C consist of approximately 1,000 acres of
undeveloped commercial and multi-family property within the Circle C
Ranch development near Austin, Texas. FMPO received a $1.0 million
non-refundable cash deposit, with the balance of the purchase price to
be received $30.0 million in cash and $3.0 million in a secured note
at closing which is scheduled for the first quarter of 1997. The
completion of this sale is however, subject to the ability of the
purchaser to secure financing which may be affected by the recent
litigation discussed in the preceding paragraph.
RESULTS OF OPERATIONS
Third Quarter Nine Months
--------------- --------------
1996 1995 1996 1995
------ ------ ----- -----
(In Millions)
Revenues:
Developed
properties $28.1 $21.0 $40.4 $32.4
Undeveloped
properties and
other 6.4 4.5 31.7 9.5
--- --- ---- ---
Total revenues 34.5 25.5 72.1 41.9
---- ---- ---- ----
Operating income
(loss) 2.0 (1.0) 3.6 (4.4)
Net income (loss) 1.5 (1.2) 1.1 (4.9)
Revenues from developed properties for the 1996 periods include
$25.0 million from the sale of the Barton Creek Country Club and
Conference Resort, as well as $3.1 million and $15.4 million from the
sale of 57 and 339 single-family homesites during the third-quarter
and nine-month periods of 1996, respectively. Revenues from developed
properties for the 1995 periods consisted of $15.8 million from the
sale of the Circle C residential properties, as well as $5.2 million
and $16.6 million from the sale of 101 and 343 single-family homesites
during the third-quarter and nine-month periods of 1995, respectively.
8
Revenues from undeveloped properties for the third-quarter and nine-
month periods of 1996 represented the sale of 46 and 649 undeveloped
acres, respectively, compared with the sale of 101 and 303 undeveloped
acres for the year-ago periods.
General and administrative expenses declined to $0.6 million and
$1.9 million for the third-quarter and nine-month periods of 1996,
respectively, compared with $0.9 million and $3.7 million for the 1995
periods, continuing to reflect the benefit of steps taken in the third
quarter of 1995 to reduce costs.
Interest expense for the 1996 periods increased because of
reduced capitalized interest, partially offset by lower average debt
levels and interest rates.
During the third quarter of 1996, FMPO recognized a $0.5 million
tax benefit for the carryback of the current year's estimated tax loss
to recoup federal income taxes paid in previous years.
FMPO's current business strategy includes the sale of larger
undeveloped tracts of land. These transactions by their nature can
cause significant variations in FMPO's revenues and operating income
during a particular accounting period. As a result, significant
fluctuations in FMPO's future operating results can be expected in any
given quarter which may cause future operating losses to be incurred.
Consequently, past operating results are not necessarily indicative of
trends in profitability.
CAPITAL RESOURCES AND LIQUIDITY
During the first nine months of 1996, FMPO generated operating cash
flow of $61.5 million which, after funding capital additions, enabled
FMPO to reduce its debt from the beginning of the year by $57.4
million. With the cash proceeds from future property sales, including
the potential sale of the remaining Circle C properties (see above),
the Partnership may be able to reduce its debt further prior to its
1997 principal payment requirements ($29.1 million due February 1997
and $34.8 million due June 1997). These reductions are dependent on
the future cash flow from the Partnership's assets, which is subject
to numerous economic and other factors, including factors beyond
FMPO's control. FMPO is presently engaged in negotiations with its
commercial banks and is seeking to extend the maturities of its debt.
There can be no assurance that the Partnership will generate cash flow
or obtain funds sufficient to make required interest and principal
payments.
FMPO continues to seek a permanent financial restructuring, which
may include obtaining a new bank credit facility or issuing new debt
or equity investments. An objective in arranging new financing for
FMPO will be to eliminate the guarantees of its debt by FTX and
Freeport-McMoRan Copper & Gold Inc. While FMPO believes any new
financing will be beneficial to the long-term interests of its
shareholders, an elimination of the guarantees would be expected to
increase financing costs significantly. The extent of any
refinancing, including any need to sell properties in connection
therewith, will determine the future net cash flow available to FMPO
to recover its investment in real estate assets.
----------------------------
The results of operations reported and summarized above are not
necessarily indicative of future operating results.
9
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits to this report are listed in the Exhibit Index
appearing on page E-1 hereof.
(b) During the quarter for which this report is filed, the
registrant filed two Current Reports on Form 8-K, dated August 22,
1996 and September 12, 1996, reporting information under Item 5.
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FM PROPERTIES INC.
By: /s/ William J. Blackwell
------------------------
William J. Blackwell
Controller
(authorized signatory and
Principal Accounting Officer)
Date: November 8, 1996
11
FM PROPERTIES INC.
EXHIBIT INDEX
-------------
Sequentially
Numbered
Number Description Page
- ------ ----------- ----
10.1 Purchase and Sale Agreement between FM
Properties Operating Co. and Barton Creek
Resort & Clubs, Inc. executed August 21, 1996.
10.2 Purchase and Sale Agreement between Circle C
Land Corp. and Phoenix Holdings, Ltd. dated
May 30, 1996, the first addendum to the purchase
and sale agreement dated May 30, 1996 and the
second addendum to the purchase and sale
agreement dated September 10, 1996.
27.1 Financial Data Schedule
E-1
EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made
by and between FM PROPERTIES OPERATING CO., a Delaware general
partnership (hereinafter referred to as "Seller"), and BARTON
CREEK RESORT & CLUBS, INC., a Texas corporation (hereinafter
referred to as "Purchaser"), and is as follows:
W I T N E S S E T H
WHEREAS, Seller is the owner of those certain resort,
conference center, and country club facilities located in Travis
and Burnet Counties, Texas, commonly known as "Barton Creek
Country Club and Conference Resort" and "Barton Creek Lakeside,"
together with certain furniture, fixtures, equipment, inventory
licenses, permits, cash, cash accounts, accounts receivable,
tangible and intangible assets and rights related thereto and/or
used in connection with the operation of such facilities, which
are collectively defined in this Agreement as the "Property"; and
WHEREAS, Seller desires to sell the Property to Purchaser,
and Purchaser desires to purchase the Property from Seller, as
provided in this Agreement,
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are mutually acknowledged, the
parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. Definitions. All capitalized terms referenced or used
in this Agreement and not specifically defined herein shall have
the meaning set forth on Exhibit A.
ARTICLE 2.
PURCHASE AND SALE OF THE PROPERTY
2.1. Agreement to Purchase and Sell. In consideration of
the payment by Purchaser to Seller of the sum of TWENTY-FIVE
MILLION DOLLARS ($25,000,000.00), plus an amount equal to eight
percent (8%) simple interest per annum on the sum of TWENTY-FIVE
MILLION DOLLARS ($25,000,000.00) calculated from December 27,
1995 (the "Effective Date") through the Closing Date
(collectively, the "Purchase Price"), Seller hereby agrees to
sell the Property to Purchaser and Purchaser hereby agrees to
purchase the Property from Seller upon the terms and conditions
set forth herein.
ARTICLE 3.
TITLE, SURVEY, PERMITTED EXCEPTIONS, AND REVIEW
3.1. Title. The Title Company has issued and delivered to
Purchaser a final title commitment, dated effective as of August
8, 1996, referenced as GF No. 6-19468 (the "Title Commitment"),
showing Seller as the record fee title owner of the Property and
the terms by which the Title Company agrees to issue to Purchaser
at Closing an owner policy of title insurance (the "Title
Policy") in the amount of the Purchase Price on the standard form
promulgated by the State Board of Insurance of Texas, as modified
pursuant to Purchaser's request, insuring Purchaser's fee simple
title to the Property to be good and indefeasible, subject to the
terms of such policy and the Permitted Exceptions. Purchaser has
reviewed the Title Commitment and confirms that Purchaser's
objections have been addressed and the Permitted Exceptions
agreed to prior to the execution of this Agreement. Seller shall
pay all premium and other charges and costs incident to the
issuance of the Commitment and the Owner's Title Policy. Any
Title Policy premium fee for deletion of the exception as to
"shortages in area" shall be divided equally between the parties.
3.2. Survey. William H. Ramsey, Registered Professional
Land Surveyor 4532, with Rust Lichliter/Jameson & Associates, has
prepared and delivered to Purchaser, at Seller's expense, a
survey of the Real Property dated August 16, 1996, referenced as
Job No. 67000.901 (the "Survey"). Purchaser has reviewed the
Survey and Purchaser's objections have been addressed prior to
the execution of this Agreement and confirms that the Survey in
its final form is acceptable to Purchaser. Seller shall pay all
costs and expenses incident to the preparation and delivery of
the Survey.
3.3. Permitted Exceptions. The term "Permitted Exceptions"
as used in this Agreement shall refer to the list of encumbrances
and other matters set forth on Attachment 2 to the Special
Warranty Deed, of even date herewith by and between Seller and
Purchaser (the "Deed").
3.4. Review. Purchaser confirms that Purchaser has
conducted, or had the opportunity to conduct, a thorough and
complete due diligence review of the Property, including, without
limitation, engineering, environmental, soil, and other studies
and tests on the Property and, based on that review, Purchaser
has determined that the Property, subject to the representations
and warranties of Seller recited herein and in the Closing
Documentation (defined below) executed by Seller at Closing, is
acceptable to Purchaser in all respects.
ARTICLE 4.
PAYMENT OF PURCHASE PRICE
4.1. Payment of Purchase Price. The Purchase Price shall
be payable in cash, cashier's check, or wire transfer at Closing.
ARTICLE 5.
CLOSING
5.1. Date and Location. Closing shall be held on the
Execution Date of this Agreement (the "Closing Date"). Closing
shall be held at the offices of the Title Company, or such other
location mutually acceptable to Seller and Purchaser.
5.2. Closing Documents. At Closing, Seller and Purchaser
shall deliver or cause to be delivered to each other, as
applicable, the documents and instruments listed on the Closing
Checklist, a copy of which is attached hereto as Exhibit B, duly
executed, all of which shall be dated on or effective as of the
Closing Date and any other title curative documents, release
documentation, easements, or other documents executed at Closing
between the parties (collectively, the "Closing Documentation").
ARTICLE 6.
CLOSING STATEMENT
6.1. Closing Statement. The settlement statement (the
"Settlement Statement") has been prepared by the Title Company
and executed by the parties hereto at Closing, which closing
statement evidences the monetary terms of this transaction,
including all closing costs.
ARTICLE 7.
INTERIM OPERATIONS AND PRORATIONS
7.1. Lease/Option Agreement. Purchaser and Seller
acknowledge that the Property has been leased by Purchaser
pursuant to the terms of that certain Lease/Option Agreement
dated January 1, 1992 (the "Lease/Option Agreement"). The
Lease/Option Agreement is being terminated effective on the
Closing Date. Seller and Purchaser agree that Purchaser shall
receive and retain and Seller herein assigns to Purchaser as its
sole property (i) one hundred percent (100%) of all Gross
Receipts, as defined in the Lease/Option Agreement, generated or
prepaid from December 27, 1995 (the "Effective Date"), and (ii)
Purchaser shall be responsible for the payment of all Expenses,
as defined in the Lease/Option Agreement, arising and accrued
during the period from the Effective Date to the Closing Date as
if Purchaser had purchased the Property as of the Effective Date.
7.2. Lease Payments. In addition to the Purchase Price,
Purchaser agrees to pay to Seller on the Closing Date pursuant to
the termination of the Lease/Option Agreement (a) the rental
amount due to Seller as of the Effective Date which totals SEVEN
HUNDRED FORTY-THREE THOUSAND FIVE HUNDRED SIXTY-TWO AND NO/100
DOLLARS ($743,562.00), and (b) the sum of SIX HUNDRED THOUSAND
DOLLARS ($600,000.00) representing twenty percent (20%) of the
THREE MILLION DOLLARS ($3,000,000.00) received by Tenant for
initiation fees in December 1995, which amounts collectively
represent a full and final settlement of all sums due Landlord
under the Lease Option Agreement (the "Lease Payments") as
provided in the Lease Modification and Termination Agreement (the
"Termination Agreement").
7.3. Capital Reserve and Working Capital. Pursuant to the
terms of the Termination Agreement, the balance of any Working
Capital, Capital Reserve or other cash accounts or reserves,
together with Seller's right, title and interest in and to any
deposits posted with third parties pertaining to the Property as
of the Effective Date, are hereby assigned to Purchaser and shall
be Purchaser's sole property.
7.4. Utilities. Purchaser and Seller shall cause the
companies and municipalities furnishing utility services to the
Real Property and the Improvements to transfer services (if
applicable) to Purchaser on the morning of the Closing Date, or
on a date as soon thereafter as possible, and to submit final
statements for utility services for which Purchaser shall be
responsible.
7.5. Taxes. Except for the sales tax audit liability
assumed by Seller pursuant to the terms and provisions of that
certain Post Closing Agreement, of even date herewith, by and
between Seller and Purchaser (the "Post-Closing Agreement"), all
ad valorem taxes, payroll taxes, sales taxes, license taxes,
liquor taxes, use taxes, and all taxes arising from and as a
result of the operation of the Property that are due, or to
become due, to any governmental or quasi-governmental authority,
whether municipal, state, county or federal (the "Taxes")
accruing prior to the Effective Date shall be paid pursuant to
the terms of the Termination Agreement. Any Taxes accruing for
the period after the Effective Date shall be paid by Purchaser.
ARTICLE 8.
POSSESSION OF THE PROPERTY
8.1. Possession of the Property. Possession of the Real
Property, Improvements, and Tangible Personal Property shall be
delivered by Seller to Purchaser at Closing.
ARTICLE 9.
SELLER'S REPRESENTATIONS AND WARRANTIES
9.1. Seller makes the following representations and
warranties to Purchaser, which representations and warranties
shall survive the execution and delivery of this Agreement and
shall be true and correct in all material respects on the Closing
Date:
9.1.1. Partnership Status. Seller is a Delaware
general partnership duly organized, validly existing
and in good standing under the laws of the State of
Delaware, and is duly qualified and in good standing to
do business in Texas; Seller has all requisite power to
execute and deliver this Agreement, to consummate the
transactions contemplated hereby, and to perform its
obligations hereunder; the execution and delivery of
this Agreement by Seller and the performance of the
transactions contemplated hereby have been duly
authorized by all requisite partnership and general
partner corporate action on behalf of Seller, and this
Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable in accordance with
its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar
laws affecting enforcement of creditor's rights
generally or by general equitable principles; and no
approval or consent of any person or entity is
necessary to make this Agreement a valid and binding
obligation of Seller.
9.1.2. Violation of Agreement. Neither the
execution and delivery of this Agreement by Seller nor
Seller's performance of any obligation hereunder or the
consummation of the transactions contemplated hereby
(i) will constitute a violation of Seller's partnership
agreement, or other governing documents or any law,
ruling, regulation or order to which Seller is subject,
or (ii) shall constitute a default of any term or
provision or shall cause an acceleration of the
performance required under any other agreement or
document (a) to which Seller is a party or is otherwise
bound or (b) to which the Property or any part thereof
is subject.
9.1.3. Name and Logo. Subject to the license
granted to Seller pursuant to the Mark License
Agreement, all of Seller's right, title and interest,
if any, in and to "Barton Creek Conference Resort and
Country Club" and "Barton Creek Lakeside Country Club,"
and the logos used in connection with the logo of
Barton Creek and in the operation of the Property as
and where now conducted, shall be assigned to Purchaser
at Closing and, to Seller's actual knowledge, the use
of such names and logos by Seller in the operation of
the Property as and where now conducted does not
violate or infringe the rights of any other person or
entity.
9.1.4. Litigation, Claims or Proceedings. Except
for the (i) McFarlane suit and (ii) the Audit as
defined in the Post Closing Agreement, Seller has no
actual knowledge of any existing or pending actions,
suits, litigation, claims, proceedings or governmental
investigations with respect to any aspect of the
Property or the Resort, nor, to the actual knowledge of
Seller, have any such actions, suits, litigation,
claims, proceedings or governmental investigations been
threatened or asserted.
9.1.5. Access. Seller has no actual knowledge of
any circumstance or condition existing which would
result in the termination of the current access to the
Real Property from existing roads.
9.1.6. Utilities, Waste and Drainage. To
Seller's actual knowledge, the utility services (i) are
installed and connected pursuant to valid permits and
are in full compliance with all governmental
regulations, (ii) are adequate for the present use and
operation of the Property, and (iii) no fact or
condition exists which would result in the termination
or impairment in the furnishing of utility services to
the Improvements.
9.1.7. Construction Claims. Except for any work
and services contracted by Tenant or its employees,
agents, or contractors and work and services provided
in connection with the day-to-day maintenance of the
Property, to Seller's actual knowledge, no work has
been performed or is in progress at the Property, and
no materials have been delivered to the Property that
might provide the basis for a mechanic's, materialman's
or other lien against the Property or any portion
thereof.
9.1.8. Assessments. Except for any existing
ad valorem taxes against the Real Property, Seller has
received no notice and has no actual knowledge of any
pending improvements, liens or special assessments to
be made against the Property by any governmental agency
or authority.
9.1.9. Contracts. To Seller's actual knowledge,
there are no outstanding contracts, leases, or
agreements of any nature to which the Resort, Purchaser
or the Property is or may become subject, except for
any contracts, which are (i) currently in Purchaser's
name, (ii) assumed by Purchaser or being terminated at
Closing, or (iii) set forth on the Permitted
Exceptions.
9.1.10. Property Condition of Improvements. To
Seller's actual knowledge, the Property is not in
material violation of any applicable city, county,
state and federal laws, ordinances, rules, regulations
and requirements, including, without limitation, those
pertaining to zoning, existing conditions in or about
the Property, building, safety, or environmental
matters promulgated by municipal, state or federal
governments, and Seller has not received any notice,
written or oral, claiming any violation of any of law,
ordinance or regulation or requesting or requiring the
performance of any repairs, alterations or other work
in order to so comply.
9.1.11. Options. There are no options or rights
of first refusal or any other right to purchase the
Property or any part thereof in favor of any person or
entity is currently outstanding, except for the rights
granted to Purchaser recited herein and the right of
first refusal on Part B of Tract II, Lot 44, to be
released at Closing.
9.1.12. Employees. Seller acknowledges that
Purchaser is acquiring only the Property and is not
obligated to retain any employee and is not assuming
any employment agreement, insurance or profit sharing
program of any nature between Seller and its
employees.
9.1.13. Environmental Laws. Seller has not
received any written notice, nor does Seller have any
actual knowledge that the Property is currently in
violation of or subject to any existing, pending or
threatened investigation or inquiry by any governmental
authority or to any remedial obligations under any
applicable laws pertaining to health or the environment
(hereinafter sometimes collectively called "Applicable
Environmental Laws"), including, without limitation,
the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (as amended
from time-to-time, hereinafter called "CERCLA"), the
Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the
Solid Waste Disposal Act Amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as
amended from time-to-time, hereinafter called "RCRA"),
the Texas Water Code and the Texas Solid Waste Disposal
Act.
9.1.14. Waste Disposal Activities. Seller has no
actual knowledge that the Property has been used as a
garbage or refuse dump site, a landfill for waste, a
waste disposal facility, a transfer station, or any
other type of facility for storage, processing,
treatment, or temporary or permanent disposal of waste
materials, including, without limitation, solid,
industrial, toxic, hazardous, radioactive, nuclear, or
putrescible waste or sewage (except for normal trash
and kitchen waste, and household-like waste and
sanitary sewers and their contents), and there are no
underground storage tanks of any kind or nature located
on the Property. To Seller's actual knowledge, the
Property has not been, and is not now, listed on the
Environmental Protection Agency's list of violating
facilities established pursuant to the Clean Water Act,
the National Priorities List established pursuant to
CERCLA, and there are no orders, judgments, claims,
suits, actions or proceedings, including, but not
limited to, governmental investigations or requests for
information (except for the normal and routine
proceedings and investigations that may from time-to-
time occur in connection with the issuance, renewal,
modification, or monitoring of ordinary environmental
operating and other permits and licenses), which could
have an adverse effect upon the Property.
9.1.15. Wildlife. Except as otherwise reflected
in the Section 10(a) Permit applicable to the Property,
Seller has no actual knowledge of any present situation
or condition relating to the Property requiring
preservation of wildlife habitat.
The phrase "to Seller's actual knowledge" shall
mean the actual knowledge of William H. Armstrong, III,
the Vice President and Attorney-in-Fact of Seller, and
John Baker, the Chief Financial Officer of Seller, and
Seller shall be deemed to have knowledge of any item
for which written documentation, notice, report,
memorandum, or correspondence of any nature has been
received from any party or governmental agency or
prepared by Seller or any of its Affiliates concerning
the subject matter. Purchaser acknowledges that it has
been the Tenant under the Lease/Option Agreement, and,
in the event Purchaser has actual knowledge prior to
Closing of any defect or misrepresentation of a
representation, covenant, or warranty made by Seller
herein (a "Seller" Breach") and Purchaser proceeds to
Closing, Purchaser waives any claim for damages, costs,
or fees against Seller arising due to the Seller
Breach.
ARTICLE 10.
SELLER'S COVENANTS
10.1. Seller covenants and agrees to the following, which
covenants and agreements shall survive Closing, shall have been
fully complied with as of the Closing Date, and shall not be
deemed merged in the conveyance contemplated herein:
10.1.1. Litigation, Claims or Proceedings. In
the event a lien, claim or cause of action affecting
the Property or the Resort should arise after the date
hereof and prior to the Closing Date and Purchaser
gives Seller written notice of same, Seller shall
satisfy (or contest and or provide suitable bonding
reasonably acceptable to Purchaser) any such claim
prior to the Closing Date and furnish Purchaser with
evidence thereof.
10.1.2. Permits. Seller shall cooperate fully
with Purchaser as necessary to enable Purchaser, at
Purchaser's cost, unless otherwise specified herein, to
procure and/or to transfer and to maintain all
licenses, permits or authorizations necessary for the
operation of the Property.
10.1.3. Sales Tax Audit. Pursuant to the term of
the Post-Closing Agreement, Seller agrees to indemnify
and hold Purchaser harmless from any claims, demands,
causes of action, attorneys' fees, and other costs,
including the payment of any sales tax due arising from
such audit proceedings.
10.1.4. Documentation. If necessary to carry out
the intent of this Agreement, Seller shall execute and
provide to Purchaser, on or after the Closing Date, any
and all instruments, documents, conveyances,
assignments and agreements which Purchaser may
reasonably request.
10.1.5. Noninterference. If Purchaser shall keep
and perform its covenants, conditions and obligations
hereunder, Seller shall not interfere in any manner
with Purchaser's operation, possession and ownership of
the Property.
ARTICLE 11.
PURCHASER'S
COVENANTS, REPRESENTATIONS, AND WARRANTIES
11.1. Purchaser makes the following covenants,
representations, and warranties to Seller. Each
covenant, representation, and warranty shall survive
the execution and delivery of this Agreement and shall
be true and correct in all material respects on the
Closing Date, and no covenant, representation, or
warranty shall be deemed to be merged with the
conveyance herein contemplated:
11.1.1. Corporate Status. Purchaser is a
corporation duly organized, validly existing and in
good standing under the laws of the State of Texas,
Purchaser has all requisite corporate power to execute
and deliver this Agreement, to consummate the
transactions contemplated hereby, and to perform its
obligations hereunder; the execution and delivery of
this Agreement by Purchaser and the performance of the
transactions contemplated hereby have been duly
authorized by all requisite corporate action on behalf
of Purchaser, and this Agreement constitutes the legal,
valid and binding obligation of Purchaser, enforceable
in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting
enforcement of creditor's rights generally or by
general equitable principles; and no approval or
consent of any person or entity is necessary to make
this Agreement a valid and binding obligation of
Purchaser.
11.1.2. Title. Purchaser has been advised that
Purchaser should have a title abstract covering the
Property examined by attorneys of Purchaser's selection
or that Purchaser should be furnished with a policy of
title insurance covering the Property.
11.1.3. Violation of Agreement. Neither the
execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby,
will violate, conflict with or result in the breach of
any term or provision of, or constitute a default
under, Purchaser's articles of incorporation, bylaws,
or any statute, order, judgment, writ, injunction,
decree, license, permit, rule or regulation of any
court or any governmental or regulatory body, or any
agreement to which Purchaser is a party or by which it
is bound.
11.1.4. Documentation. If necessary to carry out
the intent of this Agreement, Purchaser shall execute
and provide to Seller, on or after the Closing Date,
any and all instruments, documents, conveyances,
assignments and agreements which Purchaser may
reasonably request.
11.1.5. Litigation. Pursuant to the terms and
provisions of the Post Closing Agreement, Purchaser
agrees to indemnify and hold Seller harmless from any
claims, demands, causes of action, attorneys' fees, or
other costs arising from the McFarlane lawsuit.
11.1.6. Maintenance Standards. Purchaser agrees
to operate the Club at the maintenance standard set
forth in that certain Membership Agreement, of even
date herewith, by and between Seller and Purchaser.
11.1.7. Warranties. Purchaser acknowledges that
Purchaser has inspected the Property or independently
caused the Property to be inspected on its behalf and
that, except as otherwise expressly provided herein,
Purchaser has not entered into this Agreement based
upon any representation, warranty, agreement, statement
or expression of opinion of Seller or by any person or
entity acting or allegedly acting for or on behalf of
Seller as to the Property or the condition of the
Property. Purchaser agrees that the Property is to be
sold to and accepted by Purchaser at Closing, AS IS,
WHERE IS, WITH ALL FAULTS, IF ANY, AND WITHOUT ANY
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR
IMPLIED, except for the representations, warranties and
covenants expressly set forth herein and in the Closing
Documentation.
ARTICLE 12.
LIABILITIES AND INDEMNIFICATIONS
12.1. Liabilities. It is expressly agreed and recognized
that Purchaser, in acquiring the Property conveyed hereby, does
not assume any responsibility or liability whatsoever for any
commitments, agreements, contracts, obligations or debts made or
incurred by Seller, arising from Seller's ownership of the
Property prior to the Effective Date, regardless of whether
fixed, accrued or contingent, except for any obligations assumed
by Purchaser in the Closing Documentation, which accrues after
the Effective Date. It is further expressly agreed and
recognized that Seller, in disposing of the Property to be
conveyed hereby, does not assume any responsibility or liability
whatsoever for any commitments, obligations or debts made or
incurred by Purchaser or its successors arising from the
ownership of the Property subsequent to the Effective Date,
regardless of whether fixed, accrued or contingent, except for
the obligations assumed by Seller in the Closing Documentation.
12.2. Indemnification by Seller. Except for the liability
assumed by Purchaser pursuant to the terms of the Lease/Option
Agreement and the Closing Documentation, Seller shall pay, defend
and hold Purchaser and the Property harmless from and against all
liability of any nature whatever, regardless of the nature in
which such liability may arise, from any and all claims, actions
and demands, expenses, attorneys' fees, damages, losses,
liabilities, suits and/or judgments, costs and expenses,
including those of any employee of Seller, whether past or
present, arising from (i) Seller's ownership of the Property
prior to the Effective Date (but excluding liability as a result
of the acts or omissions of Purchaser or any affiliate of
Purchaser), (ii) any third-party relationship with Seller,
(iii) any misrepresentation, breach of warranty and/or covenant
(but excluding liability as a result of the acts or omissions of
Purchaser or any affiliate of Purchaser), or nonfulfillment of
any agreement on the part of Seller under this Agreement, or
(iv) any misrepresentation in or omission from any certificate or
other instrument furnished or to be furnished to Purchaser under
this Agreement. This Section 12.2 shall survive Closing and
shall in no event be deemed to merge with the conveyance herein
contemplated.
12.3. Indemnification by Purchaser. Except for the
liabilities retained by Seller pursuant to the terms of the
Closing Documentation, Purchaser shall pay, defend and hold
Seller harmless from and against all liability of any nature
whatever, regardless of the nature in which such liability may
arise, for any and all claims, actions, demands, expenses,
attorneys' fees, damages, losses, liabilities, suits and/or
judgments, costs and expenses, including that of any employee of
Purchaser or any customer, member, invitee or licensee of
Purchaser arising from (i) Purchaser's operation of the Property
from the Effective Date to the Closing Date and ownership of the
Property after the Closing Date, including, but not limited to,
all operational contracts and membership agreements entered into
by Purchaser during the term of the Lease/Option Agreement and
from the Effective Date to the Closing Date (but excluding
liability arising as a result of the acts or omissions of Seller
or any affiliate of Seller), (ii) any third-party relationship
with Purchaser, (iii) any misrepresentation, breach or warranty
and/or covenant (but excluding liability arising as a result of
the acts or omissions of Seller or any affiliate of Seller), or
nonfulfillment of any agreement on the part of Purchaser under
this Agreement, or (iv) any misrepresentation in or omission from
any certificate or other instrument furnished or to be furnished
to Seller under this Agreement. This Section 12.3 shall survive
Closing and shall in no event be deemed to merge with the
conveyance herein contemplated.
ARTICLE 13.
SELLER'S AND PURCHASER'S OBLIGATIONS
13.1. Independent Partnership. Purchaser recognizes and
acknowledges that Seller is an independent general partnership,
duly organized chartered under the laws of the State of Delaware,
and Purchaser will look solely to the partnership and the general
partners of the partnership, including the Managing General
Partners, who are solely responsible for the obligations and
liabilities of Seller recited herein, arising hereunder, or in
any manner related to the transactions contemplated hereby.
Purchaser further recognizes and acknowledges that no other
entity or entities, including, but not limited to, (i) any
individual, or (ii) any other corporation affiliated with Seller
which may provide services to, provide loans and funds to,
negotiate for, provide personnel to, make representations on
behalf of, and from time to time take actions on behalf of or for
the benefit of Seller by direct dealings with Purchaser or those
acting for it, is in any manner liable or responsible for the
obligations and liabilities of Seller, whether recited herein,
arising hereunder, or in any manner related to the transactions
contemplated hereby.
13.2. Independent Corporation. Seller recognizes and
acknowledges that Purchaser is an independent corporation,
chartered under the laws of the State of Texas, to whom Seller
will solely look and who is solely responsible for the
obligations and liabilities of Purchaser recited herein, arising
hereunder, or in any manner related to the transactions
contemplated hereby. Seller further recognizes and acknowledges
that no other entity or entities, including, but not limited to,
(i) Purchaser's parent corporation, Club Resorts Holding, Inc.;
the partner, Club Corporation International; or its affiliate,
Club Corporation of America, (ii) any individual, or (iii) any
corporation affiliated with Purchaser which may provide services
to, provide loans and funds to, negotiate for, provide personnel
to, make representations on behalf of, and from time to time take
actions on behalf of or for the benefit of Purchaser by direct
dealings with Seller or those acting for it, is in any manner
liable or responsible for the obligations and liabilities of
Purchaser, whether recited herein, arising hereunder, or in any
manner related to the transactions contemplated hereby.
ARTICLE 14.
DEFAULT/REMEDIES
14.1. Event of Default. If either party shall fail in the
performance of or compliance with any of the covenants,
agreements, terms or conditions contained in this Agreement and
such failure shall continue for a period of thirty (30) days
after written notice thereof from either party specifying in
detail the nature of such failure, or, in the case such failure
cannot with due diligence be cured within such 30-day period, if
either party fails to proceed promptly and with all due diligence
to cure the same and thereafter to prosecute the curing of such
failure with all due diligence [it being intended that in
connection with a failure not susceptible of being cured with due
diligence within thirty (30) days that the time within which to
cure the same shall be extended for such period as may be
necessary to complete the same with all due diligence, said
extension not to exceed ninety (90) days], then the party shall
be in default (an "Event of Default") and the nondefaulting party
shall be entitled to exercise the remedies set forth in
Section 14.2 hereof.
14.2. Remedies. Upon the occurrence of an Event of Default
by either party after Closing which is not cured within the time
permitted provided in Section 14.1 hereof, the disputed matter
shall be submitted to arbitration pursuant to the terms and
conditions of Article 15 hereof.
ARTICLE 15.
ARBITRATION
15.1. Arbitration. Any controversy arising out of, or
relating to, this Agreement, or the breach thereof, shall be
settled by binding arbitration administered by the American
Arbitration Association in accordance with its rules, and
judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction. The initiating party shall
give written notice to the other party of its intention to
arbitrate, which notice shall contain a statement setting forth
the nature of the dispute, the amount involved, if any, the
remedy sought, and the hearing locale requested, and shall file
at any regional office of the American Arbitration Association
three (3) copies of the notice and three (3) copies of this
arbitration provision, together with the appropriate filing fee,
as provided by the American Arbitration Association. The
arbitrator shall be selected by using the listing process under
the American Arbitration Association's arbitration rules. The
arbitrator shall award to the prevailing party, if any, as
determined by the arbitrator, all of its costs and expenses.
"Costs and expenses" shall mean all reasonable pre-award expenses
of the arbitration, including the arbitrator's fees,
administrative fees, travel expenses, out-of-pocket expenses,
such as copying and telephone, witness fees, and attorneys' fees.
The consideration of the parties to be bound by arbitration is
not only the waiver of trial by jury, but also the waiver of any
rights to appeal the arbitration finding.
ARTICLE 16.
NOTICES
16.1. Notices. Any notices or other communications
required or permitted hereunder shall be sufficiently given if in
writing and (i) hand delivered, including delivery by courier
service, (ii) sent by facsimile, or (iii) sent by certified mail,
return receipt requested, postage prepaid, addressed as shown
below, or to such other address as the party concerned may
substitute by written notice to the other. If the notice is sent
by facsimile, it must be properly addressed, reflecting the
facsimile phone number of the addressee(s), and must be
transmitted by a facsimile which produces a dated message
confirming completion of the transmission. All notices hand
delivered shall be deemed received on the date of delivery. All
notices forwarded by mail meeting the requirements of (iii) above
shall be deemed received on a date three (3) days (excluding
Sundays and legal holidays when the U.S. mail is not delivered)
immediately following date of deposit in the U.S. mail.
Provided, however, the return receipt indicating the date upon
which all notices were received shall be prima facie evidence
that such notices were received on the date on the return
receipt. Notwithstanding the foregoing, any notice of
termination given by Purchaser by certified mail and sent prior
to the end of the Review Period shall be effective when mailed.
If to Seller: FM PROPERTIES OPERATING CO.
8212 Barton Club Drive
Austin, Texas 78735
Attention: Mr. William H. Armstrong, III
Facsimile: (512) 328-4275
With a required copy to:
FM PROPERTIES OPERATING CO.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Mr. John G. Amato
Facsimile: (504) 585-3513
With a second required copy to:
Strasburger & Price, L.L.P.
600 Congress Avenue, Suite 2600
Austin, Texas 78701
Attention: Mr. Ken Jones
Facsimile: (512) 499-3660
If to Purchaser: BARTON CREEK RESORT & CLUBS, INC.
P.O. Box 819012
Dallas, Texas 75381-9012
Attention: President
Facsimile: (214) 888-7583
With a required copy to:
ADDISON LAW FIRM,
a Professional Corporation
14901 Quorum Drive, Suite 650
Attention: Mr. Randolph D. Addison
Facsimile: (214) 960-7719
The addresses and addressees may be changed by giving notice
of such change in the manner provided herein for giving notice.
Unless and until such written notice is received, the last
address and addressee given shall be deemed to continue in effect
for all purposes. No notice to either Purchaser or Seller shall
be deemed given or received unless the entity noted "With a copy
to" is simultaneously delivered notice in the same manner as any
notice given to either Seller or Purchaser, as the case may be.
ARTICLE 17.
MISCELLANEOUS
17.1. Exhibits. All Exhibits attached hereto are
incorporated herein by this reference as if fully set forth
herein.
17.2. Waiver of Consumer Rights. TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, PURCHASER HEREBY WAIVES ALL OF THE PROVISIONS
OF THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT
(THE TEXAS BUSINESS AND COMMERCE CODE; SECTION 17.41, ET SEQ.)
SAVE AND EXCEPT THE PROVISIONS OF SECTION 17.555 OF THE TEXAS
BUSINESS AND COMMERCE CODE. PURCHASER WARRANTS AND REPRESENTS TO
SELLER THAT (A) PURCHASER IS NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION AS TO ANY PROVISION OF THIS AGREEMENT OR AS
TO ANY MATTER CONTAINED HEREIN, (B) PURCHASER IS A SOPHISTICATED
ENTITY, AND (C) PURCHASER IS REPRESENTED BY LEGAL COUNSEL OF
PURCHASER'S OWN CHOOSING IN SEEKING, ACQUIRING, AND PURCHASING
THE PROPERTY AND IN NEGOTIATING THE TERMS OF THIS AGREEMENT.
FURTHER, THE CONSIDERATION FOR THE PURCHASE OF THE PROPERTY IS IN
EXCESS OF FIVE HUNDRED THOUSAND DOLLARS ($500,000.00). THIS
WAIVER IS MADE KNOWINGLY.
17.3. Successors and Assigns; Assignment. This Agreement
and the terms and provisions hereof shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and assigns whenever the context so requires or
permits. Except as expressly provided herein, this Agreement and
any documents executed in connection therewith shall not be
assigned by Seller or Purchaser without the prior written consent
of the other party, and any assignment without such prior written
consent shall be null and void.
17.4. Confidentiality; Public Announcements. Seller
covenants and agrees that unless the transaction contemplated by
this Agreement actually closes and Purchaser receives the Special
Warranty Deed at Closing, Seller will not disclose to any person
or entity any information received or discovered by Seller
concerning this Agreement or the intentions of Purchaser
hereunder. If Seller discloses any such information, such
disclosure shall constitute an Event of Default, whereupon
Purchaser shall be entitled to exercise the remedies available to
Purchaser under this Agreement as well as any other remedies
available to Purchaser at law or in equity for Seller's violation
of this Section, without any prior notice whatsoever; Seller
hereby waives notice for purposes of this Section. The
provisions of this Section shall survive Closing. Neither party
hereto shall make any public announcement or press release
concerning this Agreement or the transactions contemplated herein
except as may be mutually agreed upon by the parties in writing;
provided, however, the foregoing shall not preclude either party
from disclosing to any governmental or regulatory authority such
information or making press releases as may be required by
applicable laws or regulations.
17.5. Survival. All statements contained in any
certificate or other instrument delivered by or on behalf of
either party pursuant hereto, or in connection with the
transactions contemplated hereby, shall be deemed representations
and warranties by the respective party presenting such statement.
All covenants, representations, warranties, and agreements,
including, without limitation, agreements for indemnification and
post-closing adjustments, contained in this Agreement or in the
documents or instruments delivered at Closing which contemplate
performance by either party after Closing, shall survive Closing
and shall not be deemed merged in the conveyance.
17.6. Construction, Interpretation and Severability of
Agreement. This Agreement is to be performed in the State of
Texas and shall be governed by and construed in accordance with
the laws of the State of Texas. Any action brought to enforce or
interpret this Agreement shall be brought in the court of
appropriate jurisdiction in the county in which the Real Property
is located. Should any provision of this Agreement require
judicial interpretation, it is agreed that the court interpreting
or considering same shall not apply the presumption that the
terms hereof shall be more strictly construed against a party by
reason of the rule or conclusion that a document should be
construed more strictly against the party who itself or through
its agent prepared the same. It is agreed and stipulated that
all parties hereto have participated equally in the preparation
of this Agreement and that legal counsel was consulted by each
party before the execution of this Agreement. Except as
expressly provided to the contrary herein, each section, part,
term, or provision of this Agreement shall be considered
severable, and if for any reason any section, part, term, or
provision herein is determined to be invalid and contrary to or
in conflict with any existing or future law or regulation by a
court or governmental agency having valid jurisdiction, such
determination shall not impair the operation of or have any other
affect on other sections, parts, terms, or provisions of this
Agreement as may remain otherwise intelligible, and the latter
shall continue to be given full force and effect and bind the
parties hereto, and said invalid sections, parts, terms, or
provisions shall not be deemed to be a part of this Agreement.
17.7. No Partnership or Joint Venture; Outside Business.
Nothing contained herein shall be deemed or construed by the
parties hereto or by any third party as creating the relationship
of (i) principal and agent, (ii) a partnership, or (iii) a joint
venture between the parties hereto; it being understood and
agreed that neither any provisions contained herein nor any acts
of the parties hereto shall be deemed to create any relationship
between the parties hereto other than the relationship of seller
and purchaser. Nothing contained in this Agreement shall be
construed to restrict or prevent in any manner any party or any
party's affiliates, parent corporations, representatives, or
principals from engaging in any other businesses or investments.
17.8. Time. Time is of the essence in this Agreement and
each and all of its provisions. Any extension of time granted
for the performance of any duty under this Agreement shall not be
considered an extension of time for the performance of any other
obligation under this Agreement.
17.9. Counterparts; Documentation. This Agreement may be
executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and
the same instrument. If necessary to carry out the intent of
this Agreement, Purchaser and Seller agree to execute and provide
to the other party on or after Closing any and all other
instruments, documents, conveyances, assignments, and agreements
which such other party may reasonably require.
17.10. Brokers. Seller shall indemnify and hold harmless
Purchaser against and from all loss, cost, damage, or expense,
including attorneys' fees, incurred by Purchaser in any action
based upon a claim by a broker that Seller has employed or
otherwise engaged such broker in connection with the transaction
contemplated by this Agreement; and Purchaser shall indemnify and
hold harmless Seller against and from all loss, cost, damage, or
expense, including attorneys' fees, incurred by Seller in any
action based upon the claim of a broker that Purchaser has
employed or otherwise engaged such broker in connection with the
transaction contemplated by this Agreement. The term "broker" as
used herein shall include any party who claims a commission
because of the sale of the Property contemplated hereby.
17.11. Captions. Captions, titles to sections, and
paragraph headings used herein are for convenience of reference
and shall not be deemed to limit or alter any provision hereof.
17.12. Governing Document. This Agreement shall govern in
the event of any inconsistency between this Agreement and any of
the Exhibits attached hereto or any other document or instrument
executed or delivered pursuant hereto or in connection herewith.
17.13. Attorneys' Fees. In the event either party hereto
should default under any of the provisions of this Agreement and
the parties should employ attorneys or incur other expenses for
the enforcement of performance or observance of any obligation or
assessment on the part of the defaulting party or the defense of
said allegations, the prevailing party shall be entitled to
recover reasonable attorneys' fees and expenses incurred.
EXECUTED August 21, 1996 (the "Execution Date").
Seller:
FM PROPERTIES OPERATING CO.,
a Delaware general partnership
By: /s/ William H. Armstrong, III
William H. Armstrong, III,
Authorized Agent
Purchaser:
BARTON CREEK RESORT & CLUBS,
INC., a Texas corporation
By: /s/ Gregg E. Pate
Gregg E. Pate, Vice President
EXHIBIT "A"
DEFINITIONS
All capitalized terms referenced or used in the Purchase and
Sale Agreement (the "Agreement") to which this Exhibit is
attached and not specifically defined therein shall have the
meaning set forth below in this Exhibit A, which is attached to
and made a part of the Agreement for all purposes. The section,
paragraph, and exhibit references herein refer to the Sections,
Paragraphs, and Exhibits in and to the Agreement.
1.1. Affiliate. The term "Affiliate" shall mean a person
that directly or indirectly controls, is controlled by, or is
under common control with the person in question, and any other
party who owns ten percent (10%) or more of such person. For
purposes of this definition, the term "control" means the
ownership of ten percent (10%) or more of the beneficial interest
of the voting power of the appropriate entity.
1.2. Capital Reserve. The term "Capital Reserve" shall mean
those amounts at any given time allocated to an account for
capital replacements and improvements within and to the
Improvements, the Tangible Personal Property, and the Real
Property, as more specifically reflected on the Financial
Statements of the Property.
1.3. Closing. The term "Closing" shall mean the time at
which Seller shall deliver the Deed to Purchaser.
1.4. Closing Date. The term "Closing Date" shall mean the
date specified in Section 5.1.
1.5. Closing Documentation. The term "Closing
Documentation" shall have the meaning set forth in Section 5.2.
1.6. Club. The term "Club" shall collectively mean the
portion of the Resort operated as "Barton Creek Country Club,"
consisting of two (2) 18-hole golf courses, the clubhouse, tennis
courts and related club facilities, and the "Barton Creek
Lakeside" 18-hole golf course, country club and related club
facilities.
1.7. Effective Date. The term "Effective Date" shall have
the meaning set forth in Section 7.1.
1.8. Improvements. The term "Improvements" shall mean all
improvement structures, and fixtures placed, constructed, or
installed on the Real Property conveyed to Purchaser pursuant to
that Bill of Sale and Assignment, of even date herewith, between
Seller and Purchaser (the "Bill of Sale").
1.9. Intangible Personal Property. The term "Intangible
Personal Property" shall mean all intangible personal property
owned or held by Seller in connection with the Property,
including, but not limited to, cash, cash accounts, security
deposits, prepaid expenses, accounts receivable, membership
lists, and the exclusive use of the logos, service marks, and the
names "Barton Creek Country Club and Conference Resort" and
"Barton Creek Lakeside," conveyed to Purchaser pursuant to the
Bill of Sale and that certain Mark Assignment, of even date
herewith between Seller and Purchaser.
1.10. Lease/Option Agreement. The term "Lease/Option
Agreement" shall have the meaning set forth in Section 7.1.
1.11. Lease Payments. The term "Lease Payments" shall
have the meaning set forth in Section 7.2.
1.12. Permitted Exceptions. The term "Permitted
Exceptions" shall have the meaning as set forth in Attachment 2
to the Deed.
1.13. Personal Property. The term "Personal Property"
shall mean the Intangible Personal Property and the Tangible
Personal Property.
1.14. Property. The term "Property" shall mean the
Improvements, the Intangible Personal Property, the Tangible
Personal Property, and the Real Property owned by Seller and to
be conveyed to Purchaser pursuant to the Agreement, including the
Resort and the Club.
1.15. Real Property. The term "Real Property" shall
have the same meaning as "Property" as such term is defined in
the Deed.
1.16. Resort. The term "Resort" shall be defined as the
Barton Creek Conference Center and Country Club located near
Austin, Texas, with one hundred fifty (150) guest rooms,
conference center, three (3) 18-hole golf courses with country
club, executive fitness center/spa, tennis courts and fitness
facilities.
1.17. Survey. The term "Survey" shall mean the Survey
defined in Section 3.2, which has been approved by Purchaser.
1.18. Tangible Personal Property. The term "Tangible
Personal Property" shall have the same meaning as "Personal
Property" as such term is defined in the Bill of Sale and
Assignment, of even date herewith, by and between Seller and
Purchaser.
1.19. Title Company. The term "Title Company" shall
mean Heritage Title Company of Austin, Inc., 98 San Jacinto
Boulevard, Suite 400, Austin, Texas 78701, Attention: Ms. Phylis
J. Donelson.
1.20. Title Policy. The term "Title Policy" shall mean
an TLTA policy of title insurance issued by the Title Company in
the amount of the Purchase Price in the form accepted by
Purchaser pursuant to Section 3.1.
1.21. Working Capital. The term "Working Capital" shall
mean the amount of working capital pursuant to generally accepted
accounting principles shown on the Financial Statements
concerning the Property for the Fiscal Year ending December 27,
1995.
EXHIBIT B
CLOSING CHECKLIST
EXHIBIT 10.2
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made
by and between CIRCLE C LAND CORP., a Texas corporation
("Seller") and PHOENIX HOLDINGS, LTD., a Texas limited
partnership ("Buyer").
In consideration of the mutual covenants and representations
herein contained, Seller and Buyer agree as follows:
1. Purchase and Sale. Subject to the terms and conditions of
this Agreement, Seller hereby agrees to sell and convey to Buyer
and Buyer hereby agrees to purchase from Seller, free and clear
of all liabilities except as expressly provided herein, the
following (collectively, the "Property"):
(a) All of the real property owned by Seller and located
within the boundaries of the Circle C Ranch and Circle West
Subdivisions (collectively, "Circle C") owned by Seller, as
generally described on Exhibit A attached hereto (herein
collectively called the "Land").
(b) All of Seller's right, title and interest in and to
all personal property, contracts, claims, receivables,
assets, rights, privileges, benefits, and interests owned by
Seller related to, associated with, benefitting or otherwise
attributable to Circle C, including without limiting the
generality of the foregoing, those items generally described
on Exhibit B attached hereto.
2. Purchase Price. The purchase price for the Property (the
"Purchase Price") shall be THIRTY-FOUR MILLION and NO/100 DOLLARS
($34,000,000.00). The Purchase Price shall be paid as follows:
(a) Thirty-One Million and no/100 Dollars
($31,000,000.00) shall be paid in cash or other immediately
available funds at the closing (as hereinafter defined).
(b) The balance of the Purchase Price shall be paid by
execution and delivery at the closing of a promissory note
(the "Note") and security documents (the "Security
Documents"), made payable to and for the benefit of an
entity designated by Seller and in form as hereinafter
specified. Purchaser, at its sole expense, shall provide
Seller a mortgagee's policy of title insurance securing
Seller's first lien against any real estate included as part
of the Collateral. Purchaser shall cause Gary L. Bradley to
individually guarantee payment of the Note, and he is
executing this Agreement to acknowledge and agree to do so.
The collateral securing the Note shall consist of property
located within Circle C, as Buyer shall specify and Seller
shall approve on or before the Approval Date (as hereinafter
defined), and Buyer and Seller agree to cooperate in good
faith regarding such collateral. In the event the parties
fail to specify and approve such collateral by the Approval
Date, this Agreement shall terminate. It is understood and
acknowledged that Buyer is the owner of two tracts of land
containing approximately 85.86 acres and 145.80 acres,
respectively, as generally depicted on Exhibit E-1 on which
is located the Circle C Golf Course (the "Golf Course"), and
which are presently encumbered by liens securing certain
indebtedness of Buyer. Seller and Buyer expressly agree
that at any time after the liens encumbering the Golf Course
have been released, Buyer shall have the right, at its sole
election and expense, to substitute the Golf Course as the
collateral for the Note by executing and delivering to the
holder of the Note a first lien deed of trust against the
Golf Course and a mortgagee's policy of title insurance in
the amount of the Note insuring Seller's first lien thereon,
and with no other title encumbrances that would materially
reduce the value thereof, in form approved by Seller (which
approval shall not be unreasonably withheld or delayed).
Upon the delivery of such deed of trust and title policy,
and contemporaneously with the recording of such deed of
trust, all other collateral securing the Note shall be
released by the holder of the Note.
3. Earnest Money. Within two (2) business days after the
Approval Date (as hereinafter defined), Buyer shall deliver to
Stewart Title Austin, Inc. (the "Title Company") at 100 Congress
Avenue, Suite 200, Austin, Texas 78701, Attn: John Bruce, the
sum of One Million and No/100 Dollars ($1,000,000.00) in cash or
other immediately available funds. All funds so delivered to the
Title Company are hereinafter referred to as the "Earnest Money."
The Earnest Money shall be held and disbursed by the Title
Company as provided in this Contract. If Buyer fails to deposit
the Earnest Money with the Title Company on or before the
required date set forth herein, Seller may cancel this Contract
by written notice to Buyer at any time thereafter prior to
Buyer's depositing the Earnest Money with the Title Company. The
Earnest Money shall be "at risk" and non-refundable to Buyer
except in the event of a default by Seller in Seller's
obligations hereunder. In the event this Agreement terminates
for any reason other than a default by Seller or pursuant to
section 4 below, the Earnest Money shall be promptly delivered to
Seller and Buyer shall have no rights thereto. The Earnest Money
shall be deposited by the Title Company with a national bank in
Austin, Texas, in an interest-bearing account or fund approved by
Buyer, and all interest accrued thereon shall be paid along with
and upon final disposition of the Earnest Money as herein
provided.
4. Title. Within thirty (30) days after the Effective Date
hereof, Buyer shall obtain and furnish to Seller (i) a commitment
for an owner's policy of title insurance (the "Commitment") in
the amount of the Purchase Price issued by the Title Company
indicating the status of title to the Land, (ii) legible copies
of any instruments recited in the Commitment as encumbrances
against the Land, and (iii) a certificate reflecting the results
of a UCC financing statement search of the records of the Texas
Secretary of State and Travis County (the "UCC Search"). If the
Commitment, the Survey (as hereinafter defined) or the UCC Search
indicates any matters that are unacceptable to Buyer, Buyer shall
notify Seller of any unacceptable matters within thirty (30) days
after receipt of both the Commitment and the Survey. Any matters
with respect to which Buyer does not give such notice (other than
any liens or security interests reflected in the Commitment or
the UCC Search, all of which shall be released by Seller at or
prior to the closing) shall be conclusively deemed to be approved
by Buyer. Seller may, but shall have no obligation to, cure any
of such unacceptable matters. In the event Seller is unable or
unwilling to cure and remove such unacceptable matters (other
than liens and other Schedule C items which shall be released or
satisfied at or prior to the closing) within five (5) days from
the date of receipt of Buyer's notice of objections, Buyer must,
by notice to Seller within fifteen (15) days after the expiration
of such cure period, either (i) terminate this Agreement and
receive an immediate refund of the Earnest Money, or (ii) waive
such objections and accept such title as Seller can deliver
without adjustment of the Purchase Price, as Buyer's sole and
exclusive remedies. In the event Buyer fails to send written
notice to Seller and the Title Company waiving such objections
within said 15-day period, Buyer shall be conclusively deemed to
have waived such uncured objections, and shall proceed with the
closing in accordance with the terms of this Agreement. All
matters permitted or accepted by Buyer hereunder shall be
"Permitted Exceptions". The date on which Buyer finally accepts
and approves (or is deemed to have accepted and approved) the
Title Commitment and the Survey shall be the "Approval Date".
5. Survey. It is acknowledged that Buyer has ordered a current
on-the-ground survey plat and metes and bounds descriptions of
each tract comprising the Land (collectively, the "Survey"), to
be prepared by Capital Surveying Company Incorporated ("CSCI").
Buyer and Seller agree to cooperate fully in obtaining the Survey
as promptly as possible after the Effective Date. Seller shall
supervise the completion of the Survey, and may cause the Survey
to be completed by CSCI and/or such other registered public
surveyor(s) as Seller may determine. Buyer agrees to be solely
responsible for the cost of the Survey, whether the same is
prepared by CSCI or by such other surveyor(s). The Survey shall
(i) locate all improvements, fences, recorded and/or visible or
apparent easements, rights-of-way, street and curb lines, (ii)
specify and locate the total acres contained within each tract
comprising the Land, (iii) be prepared by a public surveyor
registered in the State of Texas, (iv) comply with the
requirements for a Texas Surveyor's Association Category "1A"
Land Title Survey, (v) contain a certificate to Buyer and the
Title Company of the foregoing, and (vi) otherwise be acceptable
to the Title Company for the deletion of the "survey" exception
(other than "shortages in area"). Promptly upon completion of
the Survey, a copy of the Survey shall be delivered to Seller,
Buyer and the Title Company.
6. Representations, Warranties and Covenants.
(a) BUYER ACKNOWLEDGES AND AGREES THAT SELLER HAS NOT
MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY
REPRESENTATIONS, WARRANTIES (OTHER THAN THE SPECIAL WARRANTY OF
TITLE AS SET OUT IN THE DEED AND OTHER DOCUMENTS CONVEYING,
TRANSFERRING AND ASSIGNING THE PROPERTY), PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE,
QUALITY OR CONDITION OF THE PROPERTY, (B) THE SUITABILITY OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY
CONDUCT THEREON, (C) THE PRESENCE OR ABSENCE OF ANY HAZARDOUS
MATERIALS OR OTHER ENVIRONMENTAL CONDITION, OR THE VIOLATION OF,
OR THE COMPLIANCE OF OR BY, THE PROPERTY WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY, OR (D) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY, AND BUYER EXPRESSLY WAIVES AND RELEASES ANY CLAIMS
ARISING UNDER OR WITH RESPECT TO ANY OF THE FOREGOING. BUYER
FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE
OPPORTUNITY TO INSPECT THE PROPERTY, BUYER IS RELYING SOLELY ON
ITS OWN INVESTIGATIONS AND NOT ON ANY INFORMATION PROVIDED OR TO
BE PROVIDED BY SELLER. BUYER FURTHER ACKNOWLEDGES AND AGREES
THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE
PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" CONDITION
AND BASIS WITH ALL FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE
PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT
THAT THE PROPERTY IS SOLD BY SELLER AND PURCHASED BY BUYER
SUBJECT TO THE FOREGOING. THE PROVISIONS OF THIS SECTION SHALL
SURVIVE THE CLOSING.
(b) Except as provided in 6.(c) below, prior to the
closing (as hereinafter defined) neither Seller nor Buyer shall
submit any request for a land use change or an amendment or
modification of the development restrictions imposed by or in
connection with the CCMUDs (as hereinafter defined) with respect
to land within Circle C to the board of the Southwest Travis
County Water District ("SWTCWD") or any other governmental
entity, including without limitation, the CCMUDs, without the
prior written approval of the other party. It is expressly
understood that the foregoing shall not affect or apply to the
preparing, filing or processing of any subdivision plats, site
plans or other use and/or development approval and permits with
respect to any property owned by Buyer other than requests for a
land use change or an amendment or modification of the
development restrictions imposed by or in connection with the
CCMUDs.
(c) Seller and Buyer agree that after the Approval Date,
Buyer, at Buyer's sole expense and without Seller's assistance,
may seek approvals from SWTCWD and the municipal utility
districts in Circle C (the "CCMUDs") for land use changes,
together with subdivisions, site plans, and other use and/or
development approvals and permits, with respect to the following
property within Circle C and to the extent necessary to effect
the following sales: approximately 136.8 acres on Loop 1, to the
extent required for Buyer to complete a sale to Crystal
Semiconductor Corporation; approximately 27 acres on Wolf Trap,
to the extent required for Buyer to complete a sale to Bethany
Lutheran Church; and approximately 2 acres at Slaughter Lane and
Brodie Lane (which currently has no land use designation), to the
extent required for Buyer to complete a sale to Eckerd Drugs.
(d) Seller confirms and warrants that no contracts or
agreements presently exist for the sale, lease or any other
disposition or encumbrance with respect to any of the Property,
except as set forth on the Contracts Schedule attached hereto.
(e) All proceeds from the sale of bonds issued by any of
the CCMUDs prior to closing and allocable to reimbursement of
eligible infrastructure (the "Escrowed Funds") shall be placed in
escrow with the Title Company pursuant to an escrow agreement
(the "Escrow Agreement") to be agreed to by the parties prior to
the Approval Date. Seller may, at its sole election, borrow the
Escrowed Funds at any time prior to closing, by delivering (i) a
notice of election to Buyer and the Title Company at least ten
(10) days prior to the funding of such loan and (ii) an unsecured
promissory note (the "Note") payable to order of the Title
Company in form approved by Buyer (which approval shall not be
unreasonably withheld or delayed). The Note shall be made by FM
Properties Operating Co., a Delaware general partnership, shall
specify no interest to the maturity date (and the maximum legal
interest rate after maturity), and shall mature and be payable on
or before sixty (60) days after the date on which the closing is
to occur pursuant to section 7(a) below. The Escrow Agreement
shall provide that (i) in the event this transaction closes as
provided herein, an amount equal to the Escrowed Funds shall be
deducted from the cash portion (and credited as a reduction
against) the Purchase Price, and the Escrowed Funds shall be
disbursed to Seller (or if the Escrow Agent holds the Note, the
Note shall be cancelled and delivered to Seller); and (ii) in the
event this transaction does not close, for any reason, the
Escrowed Funds shall be deposited in the registry of an
appropriate court in Travis County (or if the Escrow Agent holds
the Note, it shall endorse the Note, without recourse, jointly to
Seller and Buyer as their interests may appear and deposit the
endorsed Note in the registry of the court), and neither party
shall have waived, released or in any way altered any of their
rights to such proceeds by virtue of this Agreement.
7. Closing.
(a) The closing of the sale and purchase of the Property
(the "closing") shall occur on the first business day following
one hundred twenty (120) days after the Approval Date; provided,
Buyer may extend such date by delivering to the Title Company on
or before such date the sum of Two Million and No/100
($2,000,000.00) as a non-refundable Option Fee (which shall be
credited against the Purchase Price in the event of closing) in
which event the closing shall occur on the first business day
following one hundred sixty-five (165) days after the Approval
Date. In the event this transaction fails to close for any
reason other than a default by Seller, the $1,000,000.00 Earnest
Money and the $2,000,000.00 Option Fee shall be immediately
delivered to Seller and Buyer shall have no claim thereto. The
date on which the closing occurs shall be the "Closing Date".
(b) The closing shall be held at 10:00 a.m. on the
Closing Date at the main office of the Title Company at 100
Congress Avenue, Suite 200, Austin, Texas, or at such other
location acceptable to both Seller and Buyer.
(c) At the closing, Seller shall deliver or cause to be
delivered to Buyer the following:
(i) A Special Warranty Deed in the form attached
as Exhibit C, conveying to Buyer good and indefeasible fee
simple title to the Land, subject only to the Permitted
Exceptions.
(ii) A General Assignment and Bill of Sale, with
covenants of special warranty only, of all of the personal
property, contracts, claims, receivables, assets, rights,
privileges, benefits and interests owned by Seller related
to, associated with, benefitting or otherwise attributable
to Circle C, in the form attached as Exhibit D.
(iii) An Owner's Policy of Title Insurance issued
by the Title Company to Buyer in accordance with the
provisions hereof at Buyer's sole expense.
(iv) A certificate that Seller is not a "foreign
person" as defined in the federal Foreign Investment in Real
Property Act of 1980 in compliance with such federal law.
(v) Such other instruments and documents as Buyer
or the Title Company may reasonably determine to be
necessary, appropriate or desirable to consummate the
closing and otherwise effectuate the provisions of this
Agreement.
(d) At the closing, Buyer shall deliver or cause to be
delivered the following:
(i) A cashier's check, wire transfer or other
"good funds" acceptable to the Title Company in an amount of
money equal to the portion of the Purchase Price to be paid
in cash as provided in paragraph 2(a); provided, the Earnest
Money and the Option Fee shall be applied and credited
against such cash portion of the Purchase Price.
(ii) An acceptance of the Special Warranty Deed
and the General Assignment and Bill of Sale.
(iii) The Note and Security Documents, in the form
attached as Exhibit E.
(iv) A mortgagee's policy of title insurance
insuring Seller's first lien on any real property encumbered
by the Security Documents, issued at Buyer's expense in the
amount of the Note.
(v) Such other instruments and documents as
Seller or the Title Company may reasonably determine to be
necessary, appropriate or desirable to consummate the
closing and otherwise effectuate the provisions of this
Agreement.
(e) Buyer shall pay title (including title insurance
premiums), survey, and other customary closing costs and expenses
and Seller shall have no liability therefor. Each party shall
pay its attorneys' fees.
(f) At the closing, all rents, operating revenues,
operating costs and expenses, and ad valorem taxes shall be
prorated as of the Closing Date. Seller shall pay and be
responsible for all accounts payable, liabilities and obligations
with respect to the Property arising or pertaining to all periods
ending on or prior to the Closing Date, and Buyer shall be
responsible for all such items for all periods after the Closing
Date. Buyer may reject any contract or agreement existing on
(and which Buyer has not approved prior to) Closing Date, and
Seller shall be solely responsible for all liabilities and
obligations under such rejected contracts and agreements. If the
actual amount of such taxes are not known as of the date of the
closing, the prorations shall be made on the basis of the best
evidence then available, and thereafter, when actual figures are
received, a cash settlement will be made between Seller and
Buyer. Buyer shall assume and shall be responsible for the
payment of any "roll-back" or other taxes levied or assessed
against the Land as the result of the change of the use or
ownership of the Land.
(g) Prior to the closing and provided Buyer is not in
default hereunder, Seller shall operate and deal with the
Property in the ordinary course of business, consistent with the
operations of Seller on the Effective Date hereof. Without the
prior written consent of Buyer, which Buyer shall not
unreasonably withhold, Seller shall not grant or impose any
easements, restrictions or other encumbrances upon or against the
Property which will not be released at closing; apply for any new
(or amend, revise, terminate or otherwise modify any existing)
subdivision plan or plat, land use plan, site plan, or other
permit or approval with respect to or affecting the Property
unless in Seller's reasonable determination such action is
necessary to protect existing entitlements or the value of the
Property and Seller obtains Buyer's prior written approval
thereof (which approval shall not be unreasonably withheld or
delayed); or sell or lease, or enter into any contract or
agreement or amendment thereto for the sale or lease, or relating
to the use or development of, the Property or any part thereof or
any interest therein except for sales reflected on the Contracts
Schedule.
(h) At the closing, at Buyer's option and request, FM
Properties, Inc. ("FMP") shall assign and transfer to Buyer all
outstanding shares of stock of Seller, together with the
originals of all certificates evidencing such stock with an
appropriate endorsement or stock power transferring such shares
to Buyer. Seller and FMP agree that Seller shall not be
dissolved before the closing, and that Seller and/or FMP shall
pay and be responsible for all accounts payable, liabilities and
obligations of Seller arising or pertaining to all periods ending
on or prior to the Closing Date, so that Seller shall have no
liabilities or obligations as of the closing. FMP is a Delaware
corporation and the owner of all such shares of stock, and is
executing this Agreement to acknowledge and agree to this
paragraph.
8. Condemnation and Casualty Loss. Prior to the closing, risk
of loss with regard to the Property shall be borne by Seller. If
prior to the closing any portion of the Property is destroyed or
damaged, or becomes subject to a taking by virtue of eminent
domain, Seller shall notify Buyer and Buyer may, by notice to
Seller within five (5) days after the date of Seller's notice,
either (i) terminate this Agreement and receive the return of the
Earnest Money, or (ii) proceed with the closing with no reduction
in the Purchase Price and Seller shall assign to Buyer all
proceeds and rights to proceeds received or receivable by Seller
as a result of such damage or destruction or condemnation
proceedings.
9. Default.
(a) If Seller shall default hereunder, Buyer may as
Buyer's sole and exclusive remedies hereunder either
(i) terminate this Agreement and receive the return of the
Earnest Money and the Option Fee (if then deposited), or
(ii) enforce specific performance of this Agreement.
(b) If Buyer shall default hereunder, Seller may as
Seller's sole and exclusive remedy hereunder terminate this
Agreement and receive the Earnest Money and the Option Fee (if
then deposited) as liquidated damages (and not as a penalty).
(c) If this Agreement terminates pursuant to any
provision hereof, thereafter no party shall have any further
rights or obligations hereunder.
10. Commissions. There is no Real Estate Broker or Agent
involved in this transaction, and there is no real estate
commission owing in connection with this transaction. Each party
agrees to defend, indemnify and hold the other harmless from any
cost or claim for commission, fee or other compensation by reason
of this transaction made by any agent, broker, entity or person
alleging to be acting for or under the indemnifying party or
which otherwise arises out of the acts or conduct of the
indemnifying party. It is understood and acknowledged that Gary
L. Bradley is a Real Estate Broker.
11. Notices. All notices, demands and requests which may be
given or which are required to be given by either party to the
other, and any exercise of a right of termination provided by
this Agreement, shall be in writing and shall be deemed effective
when either: (i) personally delivered to the intended recipient;
(ii) sent, by certified or registered mail, return receipt
requested, addressed to the intended recipient at the address
specified below; (iii) delivered in person to the address set
forth below for the party to whom the notice was given;
(iv) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express Corporation,
Emery, or Purolator, addressed to such party at the address
specified below; or (v) sent by facsimile, telegram or telex,
provided that receipt for such facsimile, telegram or telex is
verified by the sender and followed by a notice sent in
accordance with one of the other provisions set forth above.
Notices shall be effective on the date of delivery or receipt,
or, if delivery is not accepted, on the earlier of the date that
delivery is refused or one (1) business day after the date the
notice is deposited in the mails or delivered to an overnight
delivery service. For purposes of this section, the addresses of
the parties for all notices are as follows (unless changed by
similar notice in writing given by the particular person whose
address is to be changed):
If to Seller at: 8212 Barton Club Drive
Austin, Texas 78735
Attention: William H. Armstrong, III
Fax: (512) 328-4275
with a required copy to: Mr. John G. Amato
1615 Poydras
New Orleans, Louisiana 70122
Fax: (504) 585-1603
with a required copy to: Mr. Kenneth N. Jones
Strasburger & Price, L.L.P.
2600 One American Center
600 Congress Avenue
Austin, Texas 78701-3288
Fax: (512) 499-3660
If to Buyer at: 1111 West 11th Street
Austin, Texas 78703
Fax: (512) 474-6919
with required copy to: Mr. Edward A. Kotite
Kotite & Kotite, L.L.P.
805 Third Avenue, 28th Floor
New York, New York 10022
Fax: (212) 891-3710
12. Entire Agreement. This Agreement embodies the entire
agreement between the parties relative to the subject matter
hereof, and there are no oral or written agreements between the
parties, nor any representations made by either party relative to
the subject matter hereof, which are not expressly set forth
herein.
13. Amendment. This Agreement may be amended only by a written
instrument executed by the party or parties to be bound thereby.
14. Time of Essence. Time is of the essence of this Agreement.
If the final date of any period which is set out in any provision
of this Agreement falls on a Saturday, Sunday or legal holiday
under the laws of the United States or the State of Texas, then,
in such event, the time of such period shall be extended to the
next day which is not a Saturday, Sunday or legal holiday.
15. Governing Law. This Agreement shall be construed under and
in accordance with the laws of the State of Texas and all
obligations hereunder are performable in Travis County, Texas.
In the event any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or
unenforceable, such invalidity, illegality or unenforceability
shall not affect the remainder of this Agreement, which shall
continue in full force and effect.
16. Successors and Assigns. This Agreement shall bind and inure
to the benefit of Seller and Buyer and their respective heirs,
executors, administrators, personal and legal representatives,
successors and permitted assigns. Buyer may assign Buyer's
rights under this Agreement to an entity which assumes all
Buyer's obligations hereunder and in which Buyer holds at least
fifty percent (50%) of the ownership interests, without the prior
consent or approval of Seller. Buyer may not otherwise assign
Buyer's rights under this Agreement without the express prior
written consent of Seller.
17. Attorneys' Fees. Notwithstanding anything contained herein
to the contrary, in the event it becomes necessary for either
party hereto to file suit to enforce this Agreement or any
provision contained herein, the party prevailing in such suit
shall be entitled to recover, in addition to all other remedies
or damages, as provided herein, reasonable attorneys' fees
incurred in such suit.
18. MUD Notice. It is acknowledged that portions of the Land is
located within the CCMUDs and the Southwest Travis County Water
District. Seller shall give Buyer Notices (in form attached
hereto) as required by section 49.452 of the Texas Water Code,
and Buyer agrees to sign and acknowledge such Notices to
acknowledge the receipt thereof, as required by such statute.
19. Multiple Counterparts. This Agreement may be executed in
identical counterparts which, taken together, shall constitute
collectively one (1) agreement; but in making proof of this
Agreement, it shall not be necessary to produce or account for
more than one such counterpart.
20. Effective Date. This Agreement has been signed by Buyer on
the date set forth below Buyer's signature to this Agreement.
This Agreement and offer shall be null and void unless signed by
Seller and delivered to Buyer within seven (7) business days from
the date of Buyer's execution hereof. The Effective Date of this
Agreement shall be the date this Agreement is received by the
Title Company.
SELLER:
CIRCLE C LAND CORP.
By: /s/ William H. Armstrong
Name (print): William H. Armstrong
Title (print): President
Date: May 30, 1996
For purposes of paragraph 7(h)
only:
FM PROPERTIES INC.
By: /s/ William H. Armstrong
Name (print): William H. Armstrong
Title (print): Authorized Agent
Date: May 30, 1996
BUYER:
PHOENIX HOLDINGS, LTD.
By: Phoenix Holdings GP, Inc.
a Texas corporation,
its General Partner
By: /s/ Gary L. Bradley
Name (print): Gary L. Bradley
Title (print): President
Date: May 21, 1996
For purposes of paragraph 2(b)
only:
/s/ Gary L. Bradley
Gary L. Bradley, individually
Date: May 21, 1996
RECEIPT OF AGREEMENT
The undersigned Title Company hereby acknowledges receipt of
a fully executed copy of the foregoing Agreement on May 31, 1996.
TITLE COMPANY:
Stewart Title Austin, Inc.
By: /s/ John Bruce
Name (print): John Bruce
Title (print):Commercial Division
Manager
EXHIBIT A
to Purchase and Sale Agreement
Those certain tracts of land more particularly described
below, and being as generally depicted on Exhibit A-1 attached
hereto and made a part hereof:
Tract 101: That certain tract of land containing 57 acres, more
or less, and being those tracts of land designated as
Lot 1, Block M; Lots 23 and 24, Block B; Lot 43,
Block A; and the proposed right of way of Allerton
Avenue on the preliminary plan of CIRCLE C PHASE A
filed with the City of Austin under File No. C8-84-
164(A), as revised.
Tract 102: That certain tract of land containing 67 acres, more
or less, and being those tracts of land designated as
Lot 2, Block V; Lots 1 and 2, Block U; Lot 1, Block
T; and the proposed rights of way of Allouez Avenue
and Hillside Terrace Drive on the preliminary plan of
CIRCLE C PHASE B filed with the City of Austin under
File No. C8-84-164(B), as revised.
Tract 103: That certain tract of land containing 62 acres, more
or less, and being those tracts of land designated as
Lots 2 and 3, Block W; and the proposed right of way
for Escarpment Boulevard on the preliminary plan of
CIRCLE C PHASE B filed with the City of Austin under
File No. C8-84-164(B), as revised; and Lots 1 and 2,
Block H on the preliminary plan of CIRCLE C PHASE C
filed with the City of Austin under File No. C8-84-
164(C), as revised.
Tract 104: That certain tract of land containing 15 acres, more
or less, and being that tract of land designated as
Lot 3, Block T on the preliminary plan of CIRCLE C
PHASE B filed with the City of Austin under File No.
C8-84-164(B), as revised.
Tract 105: That certain tract of land containing 8 acres, more
or less, and being that tract of land designated as
Lot 38, Block J on the preliminary plan of CIRCLE C
PHASE C filed with the City of Austin under File No.
C8-84-164(C), as revised.
Tract 106: That certain tract of land containing 12 acres, more
or less, and being that tract of land designated as
Lot 1, Block G on the preliminary plan of CIRCLE C
PHASE C filed with the City of Austin under File No.
C8-84-164(C), as revised.
Tract 107: That certain tract of land containing 23 acres, more
or less, and being that tract of land designated as
Lot 37, Block J on the preliminary plan of CIRCLE C
PHASE C filed with the City of Austin under File No.
C8-84-164(C), as revised.
Tract 108: That certain tract of land containing 111 acres, more
or less, and being those tracts of land designated as
Lots 1, 2 and 3, Block AA; Lots 1, 2, 3, and 4, Block
A; and the proposed right of way of Asticou Lane on
the preliminary plan of CIRCLE C PHASE C filed with
the City of Austin under File No. C8-84-164(C), as
revised, and that certain tract of land containing
4.9461 acres, more or less, as more particularly
described on Exhibit A-2 attached hereto and made a
part hereof.
Tract 109: That certain tract of land containing 20 acres, more
or less, and being that tract of land designated as
"Minor Waterway" in Block RR on the preliminary plan
of CIRCLE C PHASE B filed with the City of Austin
under File No. C8-84-164(B), as revised.
Tract 110: That certain tract of land containing 250 acres, more
or less, and being those tracts of land designated as
Lots 1 and 2, Block Y; Lots 67, 69, 70 and 71, Block
X; and the proposed right of way of Hannon Lane (now
South Bay) on the preliminary plan of CIRCLE C PHASE
B filed with the City of Austin under File No. C8-84-
164(B).
Tract 111: That certain tract of land containing 17 acres, more
or less, and being those tracts of land designated as
Lot 1, Block P on the preliminary plan of CIRCLE C
PHASE C filed with the City of Austin under File No.
C8-84-164(C), as revised.
Tract 112: That certain tract of land containing 50 acres, more
or less, and being that tract of land designated as
Lot 2, Block R on the preliminary plan of CIRCLE C
PHASE C filed with the City of Austin under File No.
C8-84-164(C), as revised.
Tract 113: That certain tract of land containing 39 acres, more
or less, and being those tracts of land designated as
Lots 2, 3, 4 and 5, Block R; and the right of way of
proposed Stamplighter Avenue (now South Bay) on the
preliminary plan of CIRCLE C PHASE C filed with the
City of Austin under File No. C8-84-164(C), as
revised.
Tract 114: That certain tract of land containing 12 acres, more
or less, and being that tract of land designated as
Lot 98, Block G on the preliminary plan of CIRCLE C
WEST filed with the City of Austin under File No. C8-
85-37, as revised.
Tract 115: That certain tract of land containing 534 acres, more
or less, and being those tracts of land designated as
Lots 1, 2 and 4, Block Z; Lot 2, Block CC; Lot 1,
Block DD; Lot Block BB; Lots 1, 2 and 3, Block AA;
and the rights of way of proposed Beechnoll Drive,
Wink Drive, Davilla Drive and Yoakum Drive on the
preliminary plan of CIRCLE C WEST filed with the City
of Austin under File No. C8-85-37, as revised.
Upon completion of the Survey as provided for in paragraph 5 of
this Agreement and Seller's and Buyer's approval of the same
(which approval shall not be unreasonably withheld or delayed),
the Survey shall be substituted for and shall replace the above
description.
Page A-2
EXHIBIT B
to Purchase and Sale Agreement
1. All buildings, structures, fixtures, equipment, facilities,
parking areas, and other improvements owned by Seller
located on the Land (the "Improvements").
2. All personal property owned by Seller located on the Land or
in the Improvements or used in connection with the use and
operation thereof (the "Personalty").
3. All of Seller's right, title and interest in and to all
easements, rights, privileges and appurtenances pertaining
to the Land and the Improvements, including all right, title
and interest of Seller in any land lying in or under any
street, road, or rights-of-way (whether existing or
proposed), or lying in the bed of any creek, stream or
watercourse, adjacent to or adjoining the Land; and except
as set forth in paragraph 14 below, all of Seller's right,
title and interest in and to any permits, plats, plans,
deposits, utility taps, connections or service commitments,
rights to receive reimbursement for the installation of gas,
electric or other utilities, or other development rights and
benefits to the extent the same are associated with or
pertain to Circle C (the "Appurtenances").
4. All of Seller's right, title and interest in and to all
past, present and future amounts payable by or in respect of
the CCMUDs, with respect to the engineering, construction,
and installation of water, wastewater, drainage and other
improvements constructed within the boundaries of the CCMUDs
or elsewhere, or that provide service to or benefit the
CCMUDs and/or Circle C, whether installed and constructed
prior to or after the Effective Date hereof and whether
constructed by Seller, by Seller's predecessors-in-title, or
by any other party, including without limitation all pending
bond applications and all proceeds payable under any pending
bond issues (the "Reimbursements").
5. All of Seller's right, title and interest in and to all
contracts, leases, sales agreements, warranties, guarantees,
bonds or sureties owned, held, or accruing, to the extent
such items are associated with or pertain to Circle C,
including without limitation all contracts and agreements
between Seller, or Seller's predecessors-in-title, and the
CCMUDs (the "Contracts").
6. All of Seller's right, title and interest in and to all
receivables, notes, accounts, proceeds, instruments,
certificates, or other writings evidencing the same, and all
security interests, collateral, pledges, liens, encumbrances
owned or held by or for the benefit of Seller, to the extent
such items are associated with or pertain to Circle C (the
"Receivables").
7. All of Seller's right, title and interest in and to all site
plans, surveys, soil and substrata studies, architectural
drawings, plans and specifications, engineering plans and
studies, landscape plans and other tests, or other studies
or reports of any kind in Seller's possession or control,
which are associated with or pertain to Circle C ("Plans").
8. All books, record, promotional material, data, corporate
records, and other materials of any kind in Seller's
possession or control, which are or have been or may be used
in connection with Circle C and/or Seller ("Books and Records").
9. All of Seller's rights as the Declarant under any
Declaration of Covenants, Conditions, and Restrictions with
respect to any property within the CCMUDs and/or Circle C
(the "Declarant's Rights").
10. All of Seller's rights in, to and under that certain Final
Judgment entered in the District Court of Hays County,
Texas, 22nd Judicial District Cause No. 92-0637 styled Jerry
J. Quick, et al. vs. City of Austin, together with the right
to use the name "Circle C Land Corp." in connection with the
filing and processing of any applications for any permit, or
any other matter to which the Final Judgment relates,
determined by Buyer to be necessary, appropriate or helpful
with respect to the use and development of the Land and the
Improvements.
11. All of Seller's right, title and interest in and to the
tradenames "Circle C," "Circle C Ranch," "Circle C Ranch
Soccer Complex," "Circle C Soccer Complex," "Circle C Ranch
Veloway," "Circle Veloway," or any other related or similar
names, all registrations, copyrights or trademarks related
to any such names, and all business and goodwill of Seller
acquired in connection with and symbolized by the use of any
such names.
12. Any and all other rights, titles, interests, privileges and
appurtenances owned by Seller and in any way related to, or
used in connection with, the ownership, use, development and
operation of Circle C or any of the foregoing.
13. All proceeds payable with respect to the Property (including
but not limited to all proceeds from any Reimbursements, but
excluding the COA Contract described on the Contracts
Schedule to this Agreement) shall be paid to and held in a
separate escrow (with respect to each item of the Property
for which proceeds are paid) by the Title Company, and shall
be deposited by the Title Company in a national bank in
Austin, Texas in an interest-bearing account or fund
approved by Buyer. At the closing (and conditioned
thereon), each such escrow, together with all interest
thereon, shall be paid to Buyer. The proceeds from the COA
Contract shall be applied and credited as set forth on the
Contracts Schedule.
14. Simultaneously with and as a condition to the closing, Buyer
shall replace or have released the letters of credit and
deposits set forth on the LOC Schedule attached hereto, in
the event such items are in existence on the Closing Date
and to the extent of the amount thereof on the Closing Date.
Buyer and Seller shall cooperate prior to the closing as
concerns such replacement or release. Upon such replacement
or release, the party providing the letter of credit or
deposit so replaced shall be entitled to a return of same.
This provision shall survive the closing.
15. Seller shall pay and be responsible for all accounts
payable, liabilities and obligations with respect to the
Property arising or pertaining to all periods ending on or
prior to the Closing Date, and Buyer shall be responsible
for all such items for all periods after the Closing Date.
Buyer may reject any contract or agreement existing on (and
which Buyer has not approved prior to) the Approval Date,
and Seller shall be solely responsible for all liabilities
and obligations under such rejected contracts and
agreements. This provision is not intended and shall not be
construed to restrict or limit Buyer's indemnity obligations
assumed or incurred in connection with that certain Purchase
and Sale Agreement dated April 13, 1995, as amended, and
related documents executed in connection with closing
thereunder.
Page B-2
EXHIBIT C
to Purchase and Sale Agreement
SPECIAL WARRANTY DEED
THE STATE OF TEXAS S
S KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF TRAVIS S
That CIRCLE C LAND CORP., a Texas corporation ("Grantor"),
for and in consideration of the sum of TEN AND NO/100 DOLLARS
($10.00) and other valuable consideration to the undersigned paid
by the Grantee herein named, the receipt and sufficiency of which
are hereby acknowledged, and to secure the payment of which no
lien, express or implied, is retained; has GRANTED, SOLD and
CONVEYED, and by these presents does GRANT, SELL and CONVEY unto
PHOENIX HOLDINGS, LTD., a Texas limited partnership ("Grantee"),
subject to the reservations and restrictions hereinafter set
forth, the following-described real property in Travis County,
Texas, to wit:
Those certain tract of land, more particularly
described on Exhibit A attached hereto (the
"Property");
TO HAVE AND TO HOLD the Property, together with all and
singular the rights and appurtenances thereto in anywise
belonging, unto Grantee, its successors and assigns forever; and
Grantor does hereby bind itself, it 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 and under Grantor, but not otherwise.
This conveyance is made by Grantor and accepted by Grantee
subject to any and all easements, covenants, rights-of-way
conditions, restrictions, outstanding mineral interests and
royalty interests, if any, relating to the Property, to the
extent, and only to the extent, that the same may still be in
force and effect, and either shown of record in the office of the
County Clerk of Travis County, Texas, or apparent on the
Property, including without limitation those referenced on
Exhibit B attached hereto.
Current ad valorem taxes on the Property having been
prorated, the payment thereof for 1996 and subsequent years is
assumed by Grantee. Grantee further assumes and agrees to pay
any "rollback" taxes or other assessments levied against the
Property as the result of any change in the use or ownership of
the Property, including all periods prior to the date hereof.
EXECUTED to be effective the _____ day of _______, 1996.
CIRCLE C LAND CORP.
By:______________________________
Name (print):_________________
Title (print):________________
Accepted by Grantee:
PHOENIX HOLDINGS, LTD.
By: Phoenix Holdings GP, Inc.
a Texas corporation,
its General Partner
By:_____________________________
Name (print):________________
Title (print):_______________
Address for Grantee:
_____________________
_____________________
_____________________
THE STATE OF TEXAS S
S
COUNTY OF TRAVIS S
This instrument was acknowledged before me on the ______ day
of _________________, 1996 by _______________________________,
__________________________ of CIRCLE C LAND CORP., a Texas
corporation, on behalf of said corporation.
__________________________________
Notary Public, State of Texas
Print name: ______________________
STATE OF TEXAS S
S
COUNTY OF TRAVIS S
This instrument was acknowledged before me on the _____ day
of ___________, 1996, by _________________, _________________ of
Phoenix Holdings GP, Inc., a Texas corporation, General Partner
of PHOENIX HOLDINGS, LTD., a Texas limited partnership, on behalf
of said limited partnership.
__________________________________
Notary Public, State of Texas
Print name: ______________________
AFTER RECORDING, RETURN TO:
Wm. Terry Bray
Graves, Dougherty, Hearon, & Moody
P.O. Box 98
Austin, Texas 78767
Page C-2
EXHIBIT D
to Purchase and Sale Agreement
GENERAL ASSIGNMENT AND BILL OF SALE
STATE OF TEXAS S
S
COUNTY OF TRAVIS S
That CIRCLE C LAND CORP., a Texas corporation ("Assignor"),
for and in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and to secure the payment of which no
lien or security interest is retained, has GRANTED, SOLD,
ASSIGNED, TRANSFERRED, CONVEYED and DELIVERED, and by these
presents does hereby GRANT, SELL, ASSIGN, TRANSFER, CONVEY and
DELIVER unto PHOENIX HOLDINGS, LTD., a Texas limited partnership
("Assignee"), all of the personal property, contracts, claims,
receivables, assets, rights, privileges, benefits, and interests
owned by Assignor related to, associated with, benefitting or
otherwise attributable to the Circle C Ranch and Circle C West
Subdivisions generally described on Exhibit A attached hereto
(collectively, the "Land"):
1. All buildings, structures, fixtures, equipment, facilities,
parking areas, and other improvements owned by Assignor
located on the Land (the "Improvements").
2. All personal property owned by Assignor located on the Land
or in the Improvements or used in connection with the use
and operation thereof (the "Personalty").
3. All of Assignor's right, title and interest in and to all
easements, rights, privileges and appurtenances pertaining
to the Land and the Improvements, including all right, title
and interest of Assignor in any land lying in or under any
street, road, or rights-of-way (whether existing or
proposed), or lying in the bed of any creek, stream or
watercourse, adjacent to or adjoining the Land; and except
as set forth on the LOC Schedule attached hereto, all of
Assignor's right, title and interest in and to any permits,
plats, plans, letters of credit, deposits, utility taps,
connections or service commitments, rights to receive
reimbursement for the installation of gas, electric or other
utilities, or other development rights and benefits to the
extent the same are associated with or pertain to Circle C
(the "Appurtenances").
4. All of Assignor's right, title and interest in and to all
past, present and future amounts payable by or in respect of
the CCMUDs, with respect to the engineering, construction,
and installation of water, wastewater, drainage and other
improvements constructed within the boundaries of the CCMUDs
or elsewhere, or that provide service to or benefit the
CCMUDs and/or Circle C, whether installed and constructed
prior to or after the Effective Date hereof and whether
constructed by Assignor, by Assignor's predecessors-in-
title, or by any other party, including without limitation
all pending bond applications and all proceeds payable under
any pending bond issues (the "Reimbursements").
5. All of Assignor's right, title and interest in and to all
contracts, leases, sales agreements, warranties, guarantees,
bonds or sureties owned, held, or accruing, to the extent
such items are associated with or pertain to Circle C,
including without limitation all contracts and agreements
between Assignor, or Assignor's predecessors-in-title, and
the CCMUDs (the "Contracts").
6. All of Assignor's right, title and interest in and to all
receivables, notes, accounts, proceeds, instruments,
certificates, or other writings evidencing the same, and all
security interests, collateral, pledges, liens, encumbrances
owned or held by or for the benefit of Assignor, to the
extent such items are associated with or pertain to Circle C
(the "Receivables").
7. All of Assignor's right, title and interest in and to all
site plans, surveys, soil and substrata studies,
architectural drawings, plans and specifications,
engineering plans and studies, landscape plans and other
tests, or other studies or reports of any kind in Assignor's
possession or control, which are associated with or pertain
to Circle C ("Plans").
8. All books, record, promotional material, data, corporate
records, and other materials of any kind in Assignor's
possession or control, which are or have been or may be used
in connection with Circle C and/or Assignor ("Books and
Records").
9. All of Assignor's rights as the Declarant under any
Declaration of Covenants, Conditions, and Restrictions with
respect to any property within the CCMUDs and/or Circle C
(the "Declarant's Rights").
10. All of Assignor's rights in, to and under that certain Final
Judgment entered in the District Court of Hays County,
Texas, 22nd Judicial District Cause No. 92-0637 styled Jerry
J. Quick, et al. vs. City of Austin, together with the right
to use the name "Circle C Land Corp." in connection with the
filing and processing of any applications for any permit, or
any other matter to which the Final Judgment relates,
determined by Assignee to be necessary, appropriate or
helpful with respect to the use and development of the Land
and the Improvements.
11. All of Assignor's right, title and interest in and to the
tradenames "Circle C," "Circle C Ranch," "Circle C Ranch
Soccer Complex," "Circle C Soccer Complex," "Circle C Ranch
Veloway," "Circle Veloway," or any other related or similar
names, all registrations, copyrights or trademarks related
to any such names, and all business and goodwill of Assignor
acquired in connection with and symbolized by the use of any
such names.
12. Any and all other rights, titles, interests, privileges and
appurtenances owned by Assignor and in any way related to,
or used in connection with, the ownership, use, development
and operation of Circle C or any of the foregoing.
All of the foregoing is collectively referred to as the
"Assigned Property." Without limiting the generality of the
foregoing, the Assigned Property includes those items more
particularly described on Exhibit B attached hereto.
The foregoing Assignment also constitutes a delegation of
the performance of the duties and obligations of Assignor with
respect to the Assigned Property, and Assignee accepts the
foregoing Assignment subject to the terms and provisions thereof
and agrees to perform the duties and obligations of Assignor
thereunder.
Page D-2
Assignor covenants and warrants that the Assigned Property
is free from all other grants, sales assignments and
encumbrances; that title to the Assigned Property assigned to
Assignee shall be good and indefeasible in Assignee, and the
assignment and transfer thereof by Assignor is rightful; and that
Assignor, its successors and assigns, shall forever warrant and
defend the title to the Assigned Property hereby assigned unto
Assignee, its successors and assigns, by, through or under
Assignor, but not otherwise.
EXECUTED to be effective the ____ day of _________, 1996.
ASSIGNOR:
CIRCLE C LAND CORP.
By:______________________________
Name (print):_________________
Title (print):________________
ASSIGNEE:
PHOENIX HOLDINGS, LTD.
By: Phoenix Holdings GP, Inc.
a Texas corporation,
its General Partner
By:_____________________________
Name (print):________________
Title (print):______________
STATE OF TEXAS S
S
COUNTY OF TRAVIS S
This instrument was acknowledged before me on the ____ day
of ___________ 1996, by _______________, __________________ of
CIRCLE C LAND CORP.), a Texas corporation, on behalf of said
corporation.
__________________________________
Notary Public, State of Texas
Print name: ______________________
STATE OF TEXAS S
S
COUNTY OF TRAVIS S
This instrument was acknowledged before me on the _____ day
of ___________, 1996, by _________________, _________________ of
Phoenix Holdings GP, Inc., a Texas corporation, General Partner
of PHOENIX HOLDINGS, LTD., a Texas limited partnership, on behalf
of said limited partnership.
__________________________________
Notary Public, State of Texas
Print name: ______________________
AFTER RECORDING, RETURN TO:
Wm. Terry Bray
Graves, Dougherty, Hearon, & Moody
P.O. Box 98
Austin, Texas 78767
Page D-3
EXHIBIT E
to Purchase and Sale Agreement
PROMISSORY NOTE
Austin, Texas
$3,000,000.00 _________________, 1996
For value received, Phoenix Holdings, Ltd., a Texas limited
partnership ("Makers," whether one or more), as principals,
promise to pay to the order of Circle C Land Corp., a Texas
corporation ("Holder"), at _______________________, or such other
address as Holder may from time to time designate in writing, the
sum of Three Million and No/100 Dollars ($3,000,000.00) in legal
and lawful money of the United States of America with interest on
the unpaid balance thereof, from date hereof (the "Loan Date")
until maturity, at a rate (the "Contract Rate") equal to the
average cost of funds of FM Properties Operating Co., a Delaware
general partnership, adjusted quarterly. Matured, unpaid
principal and interest shall bear interest from date of maturity
until paid at the highest, non-usurious rate at which Holder may
lawfully and contractually require Makers to pay (the "Maximum
Rate").
The principal and interest of this Note are due and payable,
and Makers shall pay the indebtedness, principal and interest,
evidenced by this Note (the "Indebtedness") as follows: The
principal is payable on or before four (4) years from the Loan
Date, and interest is payable annually as it accrues. Makers
shall have the right to prepay the principal of this Note in full
or in part, at any time, without premium or penalty, and interest
shall immediately cease to accrue on any principal so prepaid.
This note is secured by [to be agreed upon by Seller and
Buyer on or before the Approval Date, but which shall contain
provisions giving Buyer the right to substitute the Golf Course
as the collateral for the Note as provided in paragraph 2(b)].
Regardless of any contingency, event, or agreement between
Holder and Makers, the interest contracted for, taken, received,
reserved or charged, directly and indirectly, by Holder, in
connection with the transaction of which this Note is a part (the
"Loan Transaction"), shall never exceed the maximum, non-usurious
amount Holder may contract for, take, receive, reserve and charge
under applicable law. If Holder receives interest in excess of
such non-usurious amount, then Holder shall either refund that
excess to Makers or credit that excess, as of the time received,
to the unpaid principal under this Note, at Makers' option.
Holder's crediting of payments on this Note, as between interest
and principal, shall be provisional until the Indebtedness is
fully paid, when a final and binding crediting shall be made. In
addition, the principal required to be paid by this Note shall
not exceed the sum of all advances made by Holder under this Note
(including, without limitation, any advances made and retained by
Holder in payment of interest or fees). If any of the provisions
of this paragraph conflict with any provisions in any other
paragraph in this Note, or any provisions in any other agreement
signed by Makers, the provisions of this paragraph shall control
and govern the interpretation of this Note and any such other
agreement.
If Makers fail to make timely any payment required by this
Note or to perform timely any other covenant or obligation under
any security document that secures payment of any of the
Indebtedness, or in any guaranty agreement by which payment of
any of the Indebtedness is guaranteed, Holder may, to the extent
it elects, accelerate the maturity of the Indebtedness. If
Page 1 of 2 Pages Initi
Holder retains an attorney in connection with any default in
payment of the Indebtedness, or in performance of any covenant or
obligation described above, if Holder brings suit on this Note,
then Makers shall pay to Holder, on demand, the amount of all
reasonable attorneys' and/or collection fees incurred by Holder.
The portion of that amount that has been demanded by Holder and
not paid by Makers shall bear interest at the same rate at which
interest accrues on matured, unpaid principal and interest under
this Note; and interest accruing pursuant to this sentence shall
be paid to Holder by Makers on demand.
Makers and each guarantor of any of the Indebtedness,
(i) except as expressly provided herein, waives all notices
(including, without limitation, notice of intent to accelerate,
notice of acceleration and notice of dishonor), demands for
payment, presentment, protest and diligence in bringing suit and
in the handling of any security; and (ii) agrees that with regard
to the Indebtedness, none of certain actions by or at the request
of one or more of Makers, whether with or without notice and
whether before or after maturity, shall release or diminish any
obligation or liability owed by him, to Holder, such certain
actions being as follows: any and all renewals, extensions,
rearrangements, modifications (including, without limitation,
changes in interest rate), partial payments, indulgences of any
kind, releases of any other person(s) obligated to pay any of the
Indebtedness, and releases or substitutions of security, in whole
or in part. Holder agrees that upon any default under this Note
or any security document that secures payment of any of the
Indebtedness, Holder may accelerate the maturity of the
Indebtedness only after thirty (30) days prior written notice to
Makers at the address set forth below, specifying the default,
during which period Makers shall have the right to cure such
default.
This Note and all documents executed in connection herewith
shall be subject to, governed by, and construed in accordance
with, the laws of the State of Texas and the United States.
MAKERS:
PHOENIX HOLDINGS, LTD.,
a Texas limited partnership
By: Phoenix Holdings GP, Inc.,
a Texas corporation,
its General Partner
By:
Name (print):
Title (print):
Address:
For value received, I guarantee payment of the Note
according to its terms to the same extent as if I were Makers of
this Note. I waive all requirements of law, if any, that any
collection efforts be made or that any action be brought against
Makers before resorting to this guaranty.
Gary L. Bradley, Individually
Page 2 of 2 Pages Initi
EXHIBIT E
to Purchase and Sale Agreement
SECURITY DOCUMENTS
[To be agreed upon by Seller and Buyer on or before the
Approval Date, but which shall contain provision giving
Buyer the right to substitute the Golf Course as the
collateral for the Note as provided in paragraph 2(b).]
FIRST ADDENDUM TO PURCHASE AND SALE AGREEMENT
1. Incorporation into Agreement. This First Addendum to
Purchase and Sale Agreement (the "Addendum") is intended to be
attached to and incorporated in that certain Purchase and Sale
Agreement (the "Agreement") of even date herewith, between Seller
and Buyer for all purposes. In the event of a conflict between
the terms of the Agreement and those of this Addendum, the terms
of this Addendum are intended and shall be construed as
controlling. Capitalized terms used but not defined in this
Addendum are used and defined as in the Agreement.
2. Circle C Land Corp. Stock Transfer. Notwithstanding
Section 7(h) or elsewhere in the Agreement to the contrary, in
the event Buyer elects to exercise its option to acquire the
outstanding shares of stock of Seller (the "Circle C Stock"), the
following provisions shall apply:
(i) FMP shall only be obligated to transfer its right,
title and interest in and to the Circle C Stock to
Buyer.
(ii) FMP shall not make any representations or
warranties concerning the Circle C Stock or any
associated liabilities of obligations of Seller except
as set forth in (iii), immediately below.
(iii) At Closing, FMP shall only represent and
warrant that during the period of time FMP has owned
the Circle C Stock FMP, to its knowledge, has not
transferred the Circle C Stock or encumbered the Circle
C Stock with any financing encumbrance which is not
being released at Closing. Once FMP has transferred
the Circle C Stock to Buyer, FMP shall have no
liability or obligations with respect to the Seller or
the Circle C Stock other than for breach of its
warranty under this subparagraph (iii).
(iv) All of the Purchase Price proceeds and any other
cash, bank account deposits, or letters of credit
(except all items included in the definition of
Property, and, accordingly to be transferred to Buyer
pursuant to the Agreement) shall be disbursed from
Seller to another entity, as determined by Seller in
Seller's sole discretion, prior to the transfer of the
Circle C Stock from FMP to Buyer.
3. Survey Completion Deadline. Notwithstanding anything
in Sections 4 or 5 or elsewhere in the Agreement to the contrary,
for purposes of Section 4, the Survey will be deemed received and
the Survey objection and cure periods will commence on the
earlier of (i) the date the Survey is actually received by
Seller; or (ii) July 20, 1996.
Executed to be effective May 30, 1996.
SELLER: FMP:
Circle C Land Corp. FM Properties Inc.
By: /s/ William H. Armstrong By:
Printed Name: William H. Armstrong Printed Name: William H. Armstrong
Title: President Title: Authorized Agent
BUYER:
Phoenix Holdings, Ltd.
By: Phoenix Holdings C.P., Inc.
a Texas corporation,
its general partner
By: /s/ Gary Bradley
Printed Name: Gary Bradley
Title: President
SECOND ADDENDUM TO PURCHASE AND SALE AGREEMENT
This Second Addendum to Purchase and Sale Agreement (this
"Second Addendum") is made to be effective the date set forth
below by and between CIRCLE C LAND CORP., a Texas corporation
("Seller"), and PHOENIX HOLDINGS, LTD., a Texas limited
partnership ("Buyer") with respect to that certain Purchase and
Sale Agreement effective May 30, 1996, as modified by a First
Addendum to Purchase and Sale Agreement effective May 30, 1996
(the "Agreement") providing for the sale and purchase of certain
real property owned by Seller and located within the Circle C
Ranch and Circle C West subdivisions and certain contracts,
rights, interests, and personal property as more particularly
described therein (collectively, the "Property")
In accordance with the terms of the Agreement, Seller and Buyer
hereby agree as follows:
1. Unless otherwise defined herein, all capitalized terms
shall be as defined in the Agreement.
2. The property described on Exhibit A (the "Collateral
Property") attached hereto and made a part hereof has been
approved by Seller and Buyer as the collateral to secure the
Note, as contemplated in Section 2(b) of the Agreement. The
Collateral Property is currently encumbered by liens securing
certain indebtedness of Buyer. At Closing, Buyer shall be
required to provide Seller a first lien deed of trust encumbering
the Collateral Property by execution of the Security Documents,
referenced in paragraph 3 below, along with delivery of a policy
of title insurance insuring Seller's first lien position, as
required by the Agreement. All costs incident to releasing any
existing encumbrances and issuing the title policy shall be
Buyer's sole responsibility. Notwithstanding anything in this
Second Addendum or elsewhere in the Agreement to the contrary, in
the event, for any reason, Buyer fails, at Closing, to (i)
deliver Seller the first lien deed of trust on the Collateral
Property along with insurance coverage as required by this
paragraph 2; or (ii) pay the entire THIRTY-FOUR MILLION AND
NO/100 DOLLARS ($34,000,000.00) in cash (avoiding the necessity
of a note and first lien for the $3,000,000.00 portion of the
Purchase Price), Buyer shall be in default and Seller shall be
entitled to terminate this Agreement as Seller's sole and
exclusive remedy, and receive the Earnest Money and the Option
Fee (if then deposited) as liquidated damages.
3. The form of the Deed of Trust and the Guaranty attached
hereto as Exhibit B and Exhibit C, respectively, and made a part
hereof have been approved by Seller and Buyer as the Security
Documents, as contemplated in Section 2(b) of the Agreement.
4. The form of the Escrow Agreement attached hereto as
Exhibit D and made a part hereof has been approved by Seller and
Buyer as the Escrow Agreement, as contemplated in Section 6(e) of
the Agreement.
EXECUTED by the parties to be effective September 10, 1996.
SELLER: BUYER:
CIRCLE C LAND CORP. PHOENIX HOLDINGS, LTD.
By: Phoenix Holdings GP, Inc.,
a Texas corporation,
its General Partner
By: /s/ William H. Armstrong, III
Name: William H. Armstrong, III
Title: Attorney-In-Fact By: /s/ Gary L. Bradley
Gary L. Bradley, President
EXHIBIT A
Map of Collateral Property Omitted
5
0000885508
FM PROPERTIES INC.
1,000
9-MOS
DEC-31-1996
SEP-30-1996
1,789
0
0
0
0
4,718
123,923
704
134,335
66,666
0
0
0
143
60,446
134,335
72,054
72,054
66,624
66,624
0
0
3,085
540
(526)
1,066
0
0
0
1,066
.07
0
