Exhibit 10.13
CONTRACT OF SALE IN LIEU OF CONDEMNATION
     This Contract of Sale in Lieu of Condemnation (the “Contract”) is entered
into by and between Altreco, Inc., a Delaware corporation (“Seller”), and the
City of Grapevine, Texas (“Purchaser”).
ARTICLE I
AGREEMENT OF PURCHASE AND SALE
     1.1 Agreement. For the consideration and upon the terms and conditions
contained herein, Seller agrees to sell and convey to Purchaser and Purchaser
agrees to purchase from Seller:
     (a) Lot 5 and 6 B, Lipscomb and Daniel Subdivision and Tract 65A, Abstract
No. 422, such property more commonly known to be located at 815 S. Main Street
in Grapevine, Tarrant County, Texas, shown and described in the attached Exhibit
“A” (the “Land”), together with all improvements (except as provided in
Section 1.1(c)) located thereon and all the rights and appurtenances pertaining
thereto but excluding any mineral interests of whatever nature, producing or non
producing, related to the Land. The Land shall be conveyed to Purchaser together
with all of Seller’s right, title, and interest in and to (i) any and all
adjacent strips and gores between the Land and any abutting properties, and in
land lying in or under the bed of any creek, stream, or waterway or any highway,
avenue, street, road, alley, railroad spur, easement, or right-of-way, upon or
proposed, in, on, across, abutting, or adjacent to the Land, (ii) all utilities,
sewage treatment capacity and water capacity serving or which will serve the
Land and (iii) any easements, leases, rights-of-way, rights of ingress or
egress.
     (b) all (i) rights, privileges, benefits, powers and interests (including
rights, privileges, benefits, powers and interests as “developer”, “owner”,
“declarant”, or otherwise) under or with respect to any restrictive covenants,
use restrictions, deed restrictions, (ii) rights relating to property owners
associations, including review and approval rights, (iii) licenses and permits
pertaining to the Land, (iv) development and zoning rights pertaining to the
Land (the “Intangible Property”).
     (c) the Land, and Intangible Property are sometimes collectively herein
referred to as the “Property”. Notwithstanding the foregoing, Seller shall have
the right to remove at any time prior to or after Closing all personal property,
fixtures, equipment, inventory, and trade fixtures from the Property, and such
items shall not be deemed “Property”.

 

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ARTICLE II
PURCHASE PRICE
     2.1 Purchase Price. The purchase price for the Land (the “Purchase Price”)
shall be $2,747,000.00. The Purchase Price is payable all in cash or current
funds at the Closing (hereinafter defined), subject to the offsets and credits
described herein.
     2.2 Additional Consideration.
          (a) Relocation Costs. In addition to the Purchase Price, Purchaser
agrees to pay Seller’s relocation costs for relocation within the Dallas-Fort
Worth-Arlington Metropolitan Statistical Area in an amount of not less than
$341,000.00. The estimate of relocation costs shall be updated by Purchaser, and
Purchaser agrees to pay the greater of $341,000.00 and the actual moving costs
estimated by Move Solutions, Ltd. as of no later than September 1, 2010. If
Seller relocates outside the Dallas-Fort Worth-Arlington Metropolitan
Statistical Area, Purchaser’s relocation cost obligation is limited to
$341,000.00.
          (b) Occupation. Seller, or its designated affiliate, Security
Manufacturing Corporation, a Delaware corporation, shall be entitled to use and
occupy the Property at no additional cost, rent or fee from the Closing Date
until the earlier of: 1) December 31, 2010, provided that it uses and operates
the Property substantially consistent with the pre-Closing use and occupancy of
the Property; or 2) written agreement by both parties to terminate the lease of
the Property (the “Lease Term”). The rights and obligations of Purchaser and
Seller (or its designated affiliate, Security Manufacturing Corporation) during
the Lease Term shall be memorialized and set forth in that certain Lease
Agreement attached hereto as Exhibit “B” and which shall be executed and
effective by both parties as of the Closing Date.
ARTICLE III
CONTRACT CONSIDERATION AND EARNEST MONEY
     3.1 Contract Consideration. Upon execution of this Contract by Seller,
Purchaser hereby delivers to Seller a check in the amount of $100.00, which is
hereby accepted by Seller as the consideration for Seller’s execution and
delivery of this Contract, which consideration is in addition to and independent
of any other consideration provided for in this Contract, is earned and is
nonrefundable.
     3.2 Earnest Money; Amount and Payment. Within three (3) business days after
the Effective Date (hereinafter defined), Purchaser shall deliver its check in
the amount of One Thousand and No/100 Dollars ($1,000.00) (the “Earnest Money”)
to Rattikin Title Company, 112 State Street, Suite 200 Southlake, Texas 76092
(the “Title Company”). The Title Company shall cash the Earnest Money check and
deposit the proceeds thereof in an account and at a depository selected by
Purchaser, with interest, if any, to accrue to the benefit of Purchaser, and
such interest shall not be part of the Earnest Money but shall be distributed to
Purchaser from time to time upon Purchaser’s request to the Title Company. The
Earnest Money shall be non-refundable, except in case of Seller’s uncured breach
of this Agreement and shall either shall be applied to the Purchase Price upon
Closing or turned over to Seller if Purchaser, for any reason other than
Seller’s uncured

 

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breach of this Agreement, fails to close the transaction set forth in this
Contract.
ARTICLE IV
PRE-CLOSING OBLIGATIONS AND CONDITIONS
     4.1 Items to be Obtained. Within thirty (30) days after the Effective Date
(hereinafter defined), Purchaser shall obtain the following at Purchaser’s sole
cost and expense:
     (a) A current on-the-ground survey of the Land (the “Survey”) dated
subsequent to the Effective Date, prepared by a licensed professional surveyor
(the “Surveyor”) in a form acceptable to Purchaser. In the event the legal
description of the Land contained in the Survey is different from the
description contained in Exhibit “A”, it shall be substituted for the
description of the Land contained in Exhibit “A”, and the Contract shall be
deemed amended by the substitution of the legal description of the Land
contained in the Survey for the description of the Land contained in Exhibit
“A”.
     (b) A current commitment from the Title Company for the issuance of a Title
Policy (hereinafter defined) by an underwriter acceptable to the Purchaser,
together with complete and legible copies of all instruments referred to in the
commitment as conditions or exceptions to title to the Land, including items
listed in Schedule C of the commitment (collectively, the “Title Commitment”).
     (c) An environmental assessment of the Land, including at a minimum a Phase
I environmental survey, which Purchaser has obtained prior to the Effective Date
(the “Phase I”) and any additional inspection proven necessary as determined by
Purchaser in Purchaser’s sole discretion. Purchaser shall have the right to
update the Phase I prior to Closing and Purchaser shall have the right to
terminate this contract if Purchaser finds a material adverse change between the
environmental condition set forth in the original Phase I and the environmental
condition set forth in the updated Phase I. The Phase I (and any other
environmental inspections performed by Purchaser) shall be not be disclosed to,
certified to, or otherwise provided to Seller.
     (d) all information in the possession of the Seller (including copies of
documents) concerning any leases (including oil and gas leases), contracts or
licenses concerning the Land (the “Leases”).

 

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     4.2. The Land. In addition to any other requirements contained herein,
Seller shall, as a condition prerequisite to Closing, provide evidence that any
leases or occupancy agreement, if any, have either been terminated prior to
Closing or have been made fully assigned to Purchaser in a manner mutually
agreeable to both parties, and that in the event of any termination thereof, any
such tenant or licensee occupying or utilizing the Land has been removed and
relocated prior to Closing. It is the intent of the parties and a condition of
this Contract that except as to Seller’s occupancy of the Land pursuant to
Section 2.2 hereinabove in accordance with the Lease, the Land be free of any
tenant or occupant at the time of Closing.
ARTICLE V
SURVEY, INSPECTION, AND TITLE REVIEW
     5.1 Inspection. Purchaser may inspect the Property within thirty (30) days
after the Effective Date, which inspection may include structure, appliances,
heat and air conditioning systems, electrical systems, plumbing, machinery,
sprinklers, foundation, soil, and all portions of the Land. In the event any
element of such inspection is unacceptable to Purchaser, Purchaser may terminate
this Contract by written notice to the Seller.
     5.2 Title Review. Purchaser shall have a period of twenty (20) days from
the date on which it obtains the last of the Title Commitment and the Survey in
which to review the state of Seller’s title to the Land (the “Title Review
Period”). If the Survey or Title Commitment reflects or discloses any defect,
exception, or other matter affecting the Land (individually, “Title Defect” and
collectively, “Title Defects”) that is unacceptable to Purchaser for any reason
whatsoever, then prior to the expiration of the Title Review Period, Purchaser
shall provide Seller with written notice of its objections, and Seller shall
have ten (10) days (the “Cure Period”) from the date of Seller’s receipt of such
notice to remove or cure any Title Defects to the satisfaction of Purchaser.
Seller shall use its best efforts to remove or cure the Title Defects to
Purchaser’s satisfaction, but shall not be required to incur any costs to do so.
     If Seller cannot cure any or all of the Title Defects within the Cure
Period, Seller shall notify Purchaser in writing, prior to the expiration of the
Cure Period, specifying Seller’s failure, refusal, or agreement to cure each of
the Title Defects (the “Cure Notice”), and Purchaser may on or before ten
(10) days after receipt of the Cure Notice (The “Defect Review Period”), either
(i) terminate this Contract by written notice to the Seller, or (ii) elect in
writing to waive any uncured Title Defect which Seller has not agreed in the
Cure Notice to cure at or prior to Closing.
     If Purchaser fails to terminate the Contract prior to expiration of the
Defect Review Period, then any Title Defect (i) that Seller has failed to cure
prior to the expiration of the Cure Period and has not agreed in the Cure Notice
to cure or cause to be cured by Closing, and (ii) that is set forth on
Schedule B of the Title Commitment shall be deemed waived by Purchaser. In the
event Seller fails to provide Purchaser with the Cure Notice prior to the
expiration of the Cure Period, Purchaser shall have the right, at any time after
the expiration of the Cure Period, to either (i) terminate this Contract by
written notice to Seller; or (ii) elect in writing to waive any uncured Title
Defects.
     Any exceptions to Seller’s title (i) (a) to which Purchaser has not
objected or (b) which have

 

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been waived or deemed waived by Purchaser, and (ii) which are shown on
Schedule B of the Title Commitment shall be “Permitted Exceptions”. In no event
shall any matter or instrument which affects the Land become a Permitted
Exception until Purchaser has (i) been advised in writing of the existence of
such matter or instrument, (ii) received a legible copy of the instrument, if
any, creating such exception, and (iii) failed to object to said exception
within ten (10) days following Purchaser’s receipt of written notification of
the existence of such exception and the instrument creating such exception. If
Purchaser terminates this Contract as provided for herein, then the Earnest
Money shall be returned immediately to Purchaser and neither Seller nor
Purchaser shall have any further right or obligation hereunder.
ARTICLE VI
REPRESENTATIONS, WARRANTIES,
COVENANTS, AND AGREEMENTS OF SELLER
     6.1 Representations and Warranties. In order to induce Purchaser to enter
into this Contract, Seller makes the following warranties and representations
which shall be true and correct as of the Effective Date and on the Closing
Date:
     (a) Seller has or will have at closing good and indefeasible fee simple
title to the Land, and at the Closing Seller will have and will convey to
Purchaser, good and indefeasible fee simple title to the Land, free and clear of
all liens, defects, encumbrances, conditions, exceptions, restrictions, or other
matters affecting title except the Permitted Exceptions.
     (b) Except with respect to Seller’s potential exercise of its right of
eminent domain, there is no litigation or proceeding pending or threatened
against or relating to any of the Land.
     (c) Seller is, and at Closing will be, authorized and permitted to enter
into this Contract and to perform all covenants to be performed by Seller
hereunder, and Seller’s right to execute this Contract is not limited by any
other agreements. The person(s) signing this Contract has been authorized by
Seller to do so.
     (d) Except with respect to Seller’s potential exercise of its right of
eminent domain, Seller has no knowledge of any pending or threatened judicial or
administrative action, or any action pending or threatened by third parties
applicable to the Land.
     (e) Except for debts, liabilities, and obligations for which provision is
made herein for proration or other adjustment at Closing, all liabilities and
obligations arising from the ownership and operation of the Land (including, but
not limited to, utility services and tap fees) will be paid on or before the
Closing Date. The costs for any adjacent streets and any utilities serving the
Land have been fully paid.
     (f) To the best of Seller’s knowledge, Seller has complied with and the
Land is in

 

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compliance with all applicable laws, ordinances, regulations, statutes, rules
and restrictions relating to the Land.
     (g) To the best of Seller’s knowledge and except as may be required by
Seller’s lender with respect to the current mortgage on the Property, execution
and delivery of this Contract, consummation of the transaction described herein,
and compliance with the terms of this Contract will not conflict with, or
constitute a default under, any agreement to which Seller is a party or by which
Seller or the Land is bound, or violate any regulation, law, court order,
judgment, or decree applicable to Seller or the Land.
     (h) Seller has no knowledge of any archaeological, anthropological, or
historical finds, objects, or sites or any endangered or threatened species in,
on, or about the Land. To the best of Seller’s knowledge, no portion of the Land
constitutes a “critical habitat” as such term is defined in the Endangered
Species Act of 1973, as amended.
     (i) To the best of Seller’s knowledge, no part of the Land has been used
for the storage or disposal of any hazardous or toxic materials, and no part of
the Land contains any materials, whether brought to the Land, deposited thereon,
used on the Land, generated on the Land as a product or by-product of activities
on the Land, or otherwise; (i) that are or contain polychlorinated bi-phenyls
(PCB’s) or asbestos; (ii) that are wastes or other regulated substances under
the Resource Conservation and Recovery Act and/or the regulations promulgated or
adopted thereunder; (iii) that are hazardous substances or other regulated
substances as defined in the Comprehensive Environmental Response, Compensation
and Liability Act, as amended (or regulations promulgated, adopted or
incorporated thereunder); or (iv) that are otherwise classified as hazardous or
regulated substances under any federal or applicable state law or regulation.
There are no underground storage tanks on the Land and, to Seller’s knowledge,
there never have been any underground storage tanks on the Land. To the best of
Seller’s knowledge, the Land has not been used as a landfill or as a dump for
garbage or refuse.
     (j) At the Closing Date, Seller has fully complied with the requirements of
Article 4 herein.
     6.2 Covenants of Seller. Seller covenants that, from and after the
Effective Date, Seller shall:
     (a) Give Purchaser and Purchaser’s agents and representatives full access
to physically inspect the Land and to make such inspections, surveys, test
borings, soil analyses, and other tests and surveys thereon as Purchaser, in its
sole discretion, shall deem advisable; provided, however, that such access shall
be contingent upon Purchaser providing reasonable notice to Seller and that any
physically intrusive studies (e.g. boring into the Land) shall require Seller’s
consent. Seller shall furnish Purchaser such additional information concerning
the ownership, management, operation and the condition of the Land as Purchaser
may reasonably request. All inspection fees, appraisal fees, engineering fees
and other expenses of any kind incurred by Purchaser relating to the inspection
of the Property will be solely Purchaser’s expense, and Purchaser will keep the
Property free and

 

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clear of any mechanic’s or materialmen’s liens in connection with the
inspections. In the event the transactions contemplated hereby shall fail to
close for any reason, Purchaser agrees to provide Seller with copies of all
reports or other information provided to or obtained by Purchaser in connection
with or as a result of the Inspections. Purchaser’s obligations under this
Section 6.2(a) shall survive the Closing or termination of this Agreement.
     (b) Not: (i) create or permit any lien or other encumbrance affecting the
Land, other than the lien for taxes not yet due and payable and existing liens
to be released at the Closing; (ii) commit any waste or nuisance upon the Land;
(iii) impose any easements, covenants, conditions, or restrictions on the Land;
(iv) institute or participate in any annexation, zoning, platting, or other
governmental action regarding the Land; or (v) enter into or modify any lease or
contract which affects the Land.
     (c) Make all payments on all indebtedness secured by any of the Land when
due, and timely comply with all other provisions of the instruments evidencing
or securing such indebtedness.
     (d) Notwithstanding anything herein to the contrary, Purchaser acknowledges
that Seller may use the Property in accordance with its current day-to-day
operations, and nothing contained herein shall prevent Seller from performing
such business operations as Seller deems reasonable.
     (e) The instruments evidencing or securing such indebtedness shall not be
amended nor shall such indebtedness be, renewed, extended, refinanced, or in any
other way changed without the prior written consent of the Purchaser.
     6.3 Knowledge Standard. The terms “to the best of the knowledge of the
Seller”, “to the best knowledge of the Seller”, to “Seller’s knowledge” and
other phrases of like substance are to be construed to include only the actual
knowledge of the officers of Seller.
     6.4 Survival of Representations and Warranties. All of the representations,
warranties and agreements of Seller set forth in this Contract shall be true
upon the Effective Date and shall survive the delivery of the special warranty
deed for a period of ninety (90) days following the Closing Date.
     6.5 “AS IS, WHERE IS”: Disclaimer of Warranties. AS A MATERIAL INDUCEMENT
TO SELLER TO ENTER INTO THIS CONTRACT AND TO SELL THE PROPERTY TO PURCHASER,
PURCHASER HEREBY ACKNOWLEDGES AND AGREES THAT (i) PURCHASER IS PURCHASING THE
PROPERTY IN “AS IS, WHERE IS CONDITION, WITH ALL FAULTS”; (ii) PURCHASER IS
PURCHASING THE PROPERTY SUBJECT TO ALL EXISTING LAWS, STATUTES, ORDINANCES,
CODES, RULES AND REGULATIONS, AND PURCHASER SHALL BE RESPONSIBLE FOR THE PAYMENT
OF ALL CONNECTION CHARGES, PRO RATA FEES, DEVELOPER LIABILITY PAYMENTS AND LIKE
CHARGES, FEES AND PAYMENTS REQUIRED IN CONNECTION WITH THE UTILIZATION OF
UTILITIES, ROADS OR OTHER SIMILAR IMPROVEMENTS TO SERVE

 

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THE PROPERTY AND/OR ANY IMPROVEMENTS EXISTING OR HEREAFTER CONSTRUCTED OR PLACED
THEREON; (iii) EXCEPT AS EXPRESSLY SET FORTH IN THIS CONTRACT AND EXCEPT FOR THE
SPECIAL WARRANTY OF TITLE CONTAINED IN THE DEED, NEITHER SELLER NOR ANY PARTY
REPRESENTING SELLER HAS MADE ANY WARRANTY OR REPRESENTATION TO PURCHASER,
EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTIES OR REPRESENTATIONS CONCERNING HABITABILITY,
SUITABILITY, MERCHANTABILITY, WORKMANSHIP, INCOME TO BE DERIVED FROM THE
PROPERTY, EXPENSES TO BE INCURRED IN CONNECTION WITH THE PROPERTY, ZONING,
BUILDING CODE, PLATTING, SUBDIVISION, ACCESS, AVAILABILITY OF UTILITIES OR
COMPLIANCE WITH ANY LAWS, STATUTES, ORDINANCES, CODES, RULES OR REGULATIONS; AND
(iv) EXCEPT FOR THE EXPRESS WARRANTIES AND REPRESENTATIONS CONTAINED IN THIS
CONTRACT AND THE SPECIAL WARRANTY OF TITLE CONTAINED IN THE DEED, PURCHASER WILL
NOT RELY ON ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ORAL OR WRITTEN,
OF SELLER OR ANY PARTY REPRESENTING SELLER, BUT INSTEAD WILL RELY ON PURCHASER’S
AND ANY CONSULTANT(S)’ INSPECTIONS, TESTS, SURVEYS, PROCEDURES AND
INVESTIGATIONS OF THE PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT
ANY THIRD PARTY REPORT, AUDITS, ASSESSMENTS, STUDIES OR OTHER INFORMATION WITH
RESPECT OR PERTAINING TO THE PROPERTY FURNISHED TO PURCHASER BY SELLER
(INCLUDING, WITHOUT LIMITATION, AND ANY ENGINEERING REPORTS), OR BY ANY PARTY
REPRESENTING SELLER HAVE BEEN PROVIDED BY SELLER TO PURCHASER WITHOUT ANY
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, ORAL OR WRITTEN, CONCERNING THE
ADEQUACY OR THE ACCURACY THEREOF AND THAT PURCHASER WILL NOT RELY THEREON BUT
INSTEAD WILL RELY ON PURCHASER’S OR THE APPLICABLE CONSULTANT(S)’ INVESTIGATIONS
OF THE PROPERTY TO DETERMINE WHETHER THE PROPERTY IS IN A CONDITION SATISFACTORY
TO PURCHASER AND WHETHER THE PROPERTY IS SUITABLE FOR PURCHASER’S INTENDED USE.
The special warranty deed and all other conveyance documents, if any, conveying
the Property to Purchaser at Closing shall contain a provision substantially
identical to that which is set forth above.
     6.6 Release Effective as of the Closing and except as to Seller’s
obligations, representations, warranties and covenants under this Contract,
Purchaser, on its own behalf and on behalf of its trustees, officers, employees,
other Affiliates (as defined below), agents, attorneys, representatives,
successors and assigns (collectively “Releasing Parties’) hereby agrees that
each of Seller and Seller’s directors, officers, employees, other Affiliates,
agent, attorneys, representatives, successors and assigns (collectively
“Released Parties” shall be fully and forever released and discharged from any
and all liabilities, losses, claims (including third party claims), demands,
damages of any nature whatsoever, causes of action, costs, penalties, fines,
judgments, attorneys’ fees, consultants’ fees and costs and experts’ fees
(collectively “Claims”), whether direct or indirect, known or unknown, foreseen
or unforeseen, that may arise on account of or in any way be connected with the
Property including, without limitation, the physical, structural condition of
the Property or any law or regulation applicable thereto, including, without
limitation, any Claim or matter (regardless of when it first appeared or
appears) relating to or arising from: (a) the status of title to the Property or
Seller’s ownership of the Property including all matter shown on the Title

 

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Commitment, the Survey and all matters which would have been shown on an
ALTA/ASCM survey of the Property, (b) any patent or latent defects or
deficiencies with respect to the Property; (c) the presence of any mold or
microbial agents in the Property; and (d) any and all matters related to the
physical condition of the Property or any portion thereof, including without
limitation, the condition and/or operation of the Property and each part
thereof. Purchaser hereby waives the right to pursue and hereby covenants and
agrees not to commence any action, legal proceeding, cause of action or suit in
law or equity, of whatever kind or nature against the Released Parties or any
one of them or their agents in connection with any Claim. In this connection and
to the greatest extent permitted by law, Purchaser hereby agrees, represents and
warrants that Purchaser realizes and acknowledges that factual matters now
unknown to it may have given or may hereafter give rise to Claims which are
presently unknown, unanticipated and unsuspected, and Purchaser further agrees,
represents and warrants that the waivers and releases herein have been
negotiated and agreed upon in light of that realization, that Purchaser
nevertheless hereby intends to release, discharge and acquit Released Parties
from any such unknown Claims, and that this release is a material factor in
Seller’s negotiation of the Purchase Price and represents a material portion of
the consideration given to Seller by Purchaser in exchange for Seller’s
performance hereunder and the provisions of this Section shall survive the
Closing. The term “Affiliate” of a specified Person (as defined below) means any
Person which directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with the Person specified. The term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person. The term
“Person” means any individual, partnership, corporation, limited liability
company, trust, unincorporated association, joint venture or any other entity of
any kind whatsoever, whether for profit or not for profit, and any governmental
agency.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     7.1 Representations and Warranties. To induce Seller to enter into this
Contract, purchaser represents and warrants to Seller that Purchaser is fully
authorized and empowered to enter into this Contract and to consummate the
transactions contemplated hereunder.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING
     8.1 Conditions Precedent to Purchaser’s Performance. The obligation of
Purchaser to close the transaction described in this Contract shall be subject
to the following conditions precedent:
     (a) All the representations and warranties of Seller set forth in this
Contract shall be true and correct as of the Effective Date and on the Closing
date, and Seller shall have complied with all covenants and agreements of Seller
set forth herein.
     (b) There shall be no material change in the matters reflected on the Title

 

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Commitment or Survey from those matters appearing therein on the date thereof
(except those changes requested by Purchaser in its notice of Title Defects),
and no encumbrance or Title Defect shall affect the Land except the Permitted
Exceptions.
     In the event that any of the above conditions are not satisfied or waived
in writing by Purchaser prior to the Closing, Purchaser may terminate this
Contract by delivery of written notice to Seller on or before the Closing Date.
In the event of termination pursuant to this section, the Earnest Money shall be
immediately refunded to Purchaser free of any claims by Seller.
ARTICLE IX
CLOSING
     9.1. Time and Place. The sale and purchase of the Land shall be consummated
at a closing (the “Closing”) to be held at the offices of the Title Company. The
Closing shall occur on a date designated by Purchaser that is not later than
forty-five (45) days after the Effective Date (the “Closing Date”).
     9.2 Items to be Delivered by Seller at the Closing. At the Closing Seller
shall deliver or cause to be delivered to Purchaser each of the following items:
     (a) A special warranty deed duly executed and acknowledged by Seller,
granting, conveying and warranting to Purchaser good and indefeasible fee simple
absolute title to the Land, free and clear of any liens, encumbrances,
easements, restrictions, or other matters affecting title to the Land except the
Permitted Exceptions.
     (b) A duly executed and acknowledged assignment so as to convey all
Intangible Property to Purchaser, free and clear of all liens, encumbrances,
easements, and other matters other than the Permitted Exceptions.
     (c) Such evidence that may be reasonably required by Purchaser or the Title
Company to evidence the status and capacity of Seller and the authority of the
persons who are executing the various documents on behalf of the Seller.
     (d) An affidavit in compliance with Section 1445 of the Internal Revenue
Code and applicable regulations stating, under penalty of perjury, Seller’s
United States taxpayer identification number and that Seller is not a “foreign
person” as that term is defined in said Section 1445. If Seller fails to deliver
such affidavit, Purchaser may withhold from the Purchase Price and pay to the
Internal Revenue Service the amount required by Section 1445 and applicable
regulations.
     (e) An “affidavit of parties in possession” for delivery to the Title
Company, stating that there are no parties in possession of any portion of the
Land as lessees, tenants at sufferance, or trespassers.
     (f) A “bills paid affidavit” in accordance with Section 53.085 of the Texas

 

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Property Code.
     (g) A fully-executed copy of the Lease.
     9.3. Items to be Delivered by Purchaser at the Closing. At the Closing,
Purchaser shall deliver to Seller the Purchase Price plus $341,000.00 for moving
costs pursuant to Section 2.2(a) hereinabove (and subject to a “true-up” if the
moving costs are demonstrated to be more than $341,000.00, such difference will
be paid by Purchaser to Seller within fifteen (15) days within Seller’s
submission to Purchaser of evidence of such difference); provided however, if
any of the Purchase Price is paid by bank wire transfer of funds, and the order
for transfer of funds is timely made on the date of Closing, but the funds are
not received by the Title Company on the date of Closing, Purchaser shall not be
in default hereunder if the Purchase Price is received by the Title Company on
the next business day. In addition, Purchaser shall deliver to Seller a
fully-executed copy of the Lease.
     9.4. Adjustments and Prorations. At Closing, the following items shall be
adjusted or prorated between Seller and Purchaser:
     (a) Ad valorem taxes for the Land for the then current calendar year shall
be prorated in cash as of May 1, 2009. Seller’s pro rata portion of such taxes
shall be based upon taxes actually assessed for the then current calendar year
or, if for any reason such taxes for the Land have not been actually assessed,
such proration shall be based upon the amount of such taxes for the immediately
preceding calendar year, and adjusted by cash settlement when exact amounts are
available. If the Land is assessed and taxed as a part of a larger parcel, then,
for purposes of computing tax prorations, a proportionate part of the ad valorem
taxes attributable to such larger parcel shall be allocated to the Land on the
basis of the ratio between the number of gross acres of the Land and the total
number of gross acres comprising such larger parcel, taking into account the
value and location of any improvements located on the larger parcel. All special
taxes or assessments approved or assessed prior to the Closing Date shall be
paid by Seller. If Seller or Seller’s predecessors in title have claimed any
partial or total exemption from taxation of the Land based on agricultural or
open space use or any other use, and if a loss of such partial or total
exemption would result in the imposition of tax for a period prior to the
Closing Date, Seller shall satisfy at the Closing, and shall indemnify and hold
Purchaser harmless from, any tax on any of the Land for years prior to the
Closing Date which become due as the result of any changes in land usage or
ownership or otherwise (“Rollback Taxes”, the term Rollback Taxes shall include
all interest incurred with respect to such taxes).
     (b) Except as otherwise provided herein, each party shall pay its share of
all other closing costs and expenses of closing in consummating the sale and
purchase of the Property to be borne and paid as follows:
     Owner’s Title Policy paid by Purchaser
     Documentary stamp or other transfer taxes paid by Purchaser
     Survey paid by Purchaser
     Filing fees paid by Purchaser

 

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     Property and other taxes through pro-rated through May 1, 2009
     Recording fees paid by Purchaser
     Realtor or broker fees, if any, paid by Seller.
     (c) The agreements as to prorations and adjustments in this Section shall
survive the Closing. In the event that, subsequent to the Closing, any
adjustments made at the Closing pursuant to this Section are agreed upon by the
parties hereto to be erroneous, then either party hereto who is entitled to
additional monies shall invoice the other party for such additional amounts a
may be owing, and such amounts shall be paid within ten days from receipt of the
invoice.
ARTICLE X
REMEDIES UPON DEFAULT
     10.1. Default by Seller. If Seller fails to timely comply with any
condition, covenant, or obligation of Seller hereunder, such failure shall be a
default, and Purchaser shall have the right, as its sole remedy, to either:
(i) terminate this Contract by giving written notice thereof to Seller,
whereupon the Title Company immediately shall deliver the Earnest Money (and all
accrued interest thereon, if any) to Purchaser, free of any claims by Seller, or
(ii) enforce specific performance of Seller’s obligations under this Contract.
Notwithstanding any other provision herein to the contrary, if Seller fails to
satisfy its obligations, whereupon Purchaser will be granted a credit against
the Purchase Price for the costs incurred by Purchaser to satisfy such
obligations of Seller.
     10.2. Default by Purchaser. If all conditions of this Contract are
satisfied and all covenants and obligations to be performed by Seller prior to
Closing are fully performed, and if performance of this Contract is fully
tendered by Seller and the sale is not consummated through default by Purchaser,
then Seller, as Seller’s sole and exclusive remedy at law or in equity, shall
have the right to terminate this Contract by giving written notice thereof to
Purchaser, whereupon neither party shall have any further rights or obligations
hereunder, and the Title Company shall deliver the Earnest Money to Seller, free
of any claims by Purchaser. The Earnest Money is a reasonable, good faith
estimate of actual damages that Seller would suffer, and shall be liquidated
damages for Purchaser’s default due to the difficulty, inconvenience, and
uncertainty of ascertaining Seller’s actual damages for Purchaser’s default. The
payment of the Earnest Money upon Purchaser’s default shall constitute full
satisfaction of Purchaser’s obligations hereunder.
ARTICLE XI
MISCELLANEOUS
     11.1. Notices. Any notice, demand, or other communication required to be
given or to be served upon any party hereunder shall be in writing and delivered
to the person to whom the notice is directed, either: (i) in person; (ii) by
United States Mail, as registered or certified item with return receipt
requested; or (iii) delivered by delivery service (including any express mail or
delivery

 

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service). Notices, demands, or other communications delivered by mail shall be
deemed given and received when deposited in a post office or other depository
under the care or custody of the United States Postal Service, enclosed in a
wrapper, addressed properly, with proper postage affixed. Any notice, demand or
other communication given other than by certified or registered mail, return
receipt requested, shall be deemed to have been given and received when
delivered to the address of the party to whom it is addressed as stated below:

         
 
  Purchaser:   The City of Grapevine, Texas
 
      Attn: Bruno Rumbelow
 
      City Manager
 
      200 South Main Street
 
      Grapevine TX 7
 
      817-410-3105
 
      817-410-3202- Fax
 
       
 
      With a copy to:
 
      Matthew C. G. Boyle
 
      Boyle & Lowry, L.L.P.
 
      4201 Wingren, Suite 108
 
      Irving, Texas 75062
 
      (972)650-7100
 
      (972)650-7105 Fax
 
       
 
  Seller:   Altreco, Inc.
 
      Attn: Paul M. Zaidins
 
      801 S. Main
 
      Grapevine, Texas 76051
 
      817-329-1600
 
      817-722-0100 – Fax
 
       
 
      With a copy to:
 
      Timothy R. Vaughan
 
      Hallett & Perrin, P.C.
 
      2001 Bryan Street, Suite 3900
 
      Dallas, Texas 75093
 
      (214) 922-4167
 
      (214) 922-4193 — Fax

Either party hereto may change its address for notice by giving the other party
ten (10) days advance written notice of such change of address.
     11.2. [Intentionally deleted.]
     11.3. Assignment; Third-Party Beneficiaries. This Contract shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors, and assigns. This Contract or the
rights hereunder may be assigned by the Purchaser or Seller

 

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without the written consent of the other party. In addition, this Contract shall
specifically inure to the benefit of American Locker Group, Incorporated, a
Delaware corporation (“ALG”), its affiliates and subsidiaries, and ALG, its
affiliates and subsidiaries shall be entitled to the benefits from and to
enforce any rights of Seller under this Contract.
     11.4. Interpretation and Applicable Law. THIS CONTRACT SHALL BE CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND ALL
OBLIGATIONS OF THE PARTIES CREATED HEREUNDER ARE PERFORMABLE IN DENTON COUNTY,
TEXAS. Where required for proper interpretation, words in the singular shall
include all genders. The descriptive headings of the article, sections, and
paragraphs in this Contract are for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
     11.5. Amendment. Except as provided above with respect to the automatic
substitution of Exhibit “A”, this Contract may not be amended and no condition,
covenant, or obligation may be waived, except by an agreement in writing signed
by Seller and Purchaser.
     11.6. Attorneys’ Fees. If either party files a lawsuit in connection with
this Contract, the prevailing party in such action shall be entitled to recover
from the non prevailing party, in addition to all other remedies or damages as
limited herein, reasonable attorneys” fees and costs of court incurred in such
lawsuit.
     11.7. Entire Agreement. This Contract constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection therewith.
     11.8. Multiple Counterparts. This Contract may be executed simultaneously
in two or more counterparts, (including counterparts executed by portable
document format (pdf) or by facsimile), each of which shall be deemed an
original and all of which together shall constitute one instrument.
     11.9. Effective Date; Dates. The effective date of this Contract (the
“Effective Date”) shall be the date on which the last of Seller and Purchaser
execute this Contract. Any act performable on an official United States Holiday
or a Saturday or Sunday shall be performable on the next business day following
such date.
     11.10. Brokers. Each party represents and warrants to the other that no
brokers or finders have been engaged by it in connection with the transactions
contemplated by this Contract, or, to its knowledge, is in any way connected
with such transaction. In the event of any claim for broker’s or finder’s fees
or commissions in connection with the negotiation, execution, or consummation of
this Contract, then each party shall indemnify, hold harmless, and defend the
other party from and against any such claim based upon any statement,
representation, or agreement made by, or allegedly made by, the indemnifying
party. This indemnity shall survive the Closing or termination of this Contract.
     11.11. Construction. The parties acknowledge that they have had the
opportunity to be

 

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represented by counsel in connection with this transaction and that this
Contract shall be interpreted according to its fair construction and shall not
be construed against either party.
     11.12. Invalidity. If any provision in this Contract shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Contract shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
     11.13. Further Assurances. In addition to the acts recited herein to be
performed by Seller, Seller hereby agrees to perform at or after the Closing all
further acts as Purchaser may reasonably require to (i) evidence and vest in
Purchaser the ownership of, and title to, all of the Land, and (ii) consummate
the transaction contemplated hereunder.
     11.14 [Intentionally deleted].
     11.15. Time is of the Essence; Waiver. Time is of the essence with respect
to every provision of this Contract. No waiver by either party of any of its
rights or remedies hereunder or otherwise shall be considered a waiver of any
other subsequent right or remedy. Except as expressly provided herein, no waiver
by either party of any of its rights or remedies hereunder or otherwise shall be
effective unless such waiver is evidenced in a written instrument executed by
the waiving party.
     11.16 [Intentionally deleted].
     11.17 Contract in Lieu of Condemnation. Seller and Purchaser acknowledge
that this Contract is made and entered into in lieu of Purchaser’s rights of
eminent domain with respect to the Property and that Purchaser’s consideration
paid to Seller herein is in lieu of any condemnation award that may have been
paid to Seller pursuant to Purchaser’s rights.
[signature page to follow]

 

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            PURCHASER:

The City of Grapevine, Texas     Date of Execution:   September 18, 2009        
By:   /s/ Bruno Rumbelow       Name:   Bruno Rumbelow      Title:   City
Manager     

            SELLER:

Altreco, Inc.     Date of Execution:   September 18, 2009       By:   /s/ Paul
M. Zaidins       Name:   Paul M. Zaidins      Title:   Chief Financial Officer