1
EXHIBIT 10.5
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
This First Amendment to Purchase and Sale Agreement (the "AMENDMENT") is
made and entered into by and among BABEL, XXXXXX & XXXXXXXXX PARTNERSHIP, a
Texas general partnership, a/k/a Babel, Xxxxxx & Xxxxxxxxx, Ltd., XXXXXXXX
XXXXXXXX STREET PROPERTIES, L.L.C., a Texas limited liability company, NECHES
STREET PROPERTIES, L.L.C., a Texas limited liability company (hereinafter
Xxxxxxxx Xxxxxxxx Xxxxxx Properties, L.L.C. and Neches Street Properties,
L.L.C. are collectively referred to as "SELLER"), and ITEQ, INC., a Delaware
corporation (hereinafter referred to as "PURCHASER").
WHEREAS, Babel, Xxxxxx & Xxxxxxxxx Partnership and Purchaser entered
into that certain Purchase and Sale Agreement (the "AGREEMENT") with an
effective date of May 14, 1997, for the sale of certain real property in
Jefferson County, Texas (the "PROPERTY"), more particularly described in the
Agreement; and
WHEREAS, the Property has been conveyed by the owners thereof to
Xxxxxxxx Xxxxxxxx Xxxxxx Properties, L.L.C. and Neches Street Properties,
L.L.C.; and
WHEREAS, Purchaser and Xxxxxxx X. Xxxxxx, Xxx X. Xxxxx, Xxxxxx X.
Xxxxxxxxx, XX, Xxxxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxxx Xxxxx and Xxxxxx Xxxxxxxxx,
III (collectively, the "SHAREHOLDERS") have entered into that certain Stock
Purchase Agreement dated April 24, 1997 (the "STOCK PURCHASE AGREEMENT"), as
amended, whereby the Shareholders have agreed to sell and Purchaser has agreed
to buy 100% of the stock of Exell, Inc., subject to the terms of the Stock
Purchase Agreement; and
WHEREAS, Seller and Exell, Inc., upon the closing of the Stock Purchase
Agreement intend to enter into a Lease Agreement (the "LEASE") whereby Exell,
Inc. shall lease the Property from Seller; and
WHEREAS, upon the satisfaction of the conditions precedent of the
Agreement, Seller and Purchaser intend to consummate the Agreement, as amended;
and
WHEREAS, Purchaser and Seller desire to amend the Agreement as herein
provided.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties do hereby amend the Agreement as follows:
1. Assignment and Assumption of Agreement. Babel, Xxxxxx & Xxxxxxxxx
Partnership has ASSIGNED, TRANSFERRED and SET OVER, and by these presents does
ASSIGN, TRANSFER and SET OVER all of its right, title and interest, in and to
the Agreement to Xxxxxxxx Xxxxxxxx Xxxxxx Properties, L.L.C. and Neches Street
Properties, L.L.C. and Beaumont
0
Xxxxxxxx Xxxxxx Properties, L.L.C. and Neches Street Properties, L.L.C. has
ASSUMED the obligations of Seller as set forth in the Agreement and this
Amendment.
2. Sale and Purchase. Section 1(a) of the Agreement is deleted in
its entirety and replaced with the following:
a. the tracts or parcels of land situated in Jefferson County, Texas
described in EXHIBIT A hereto together with all rights and interests
appurtenant thereto, including all of Seller's right, title, and
interest in and to adjacent streets, alleys, rights-of-way, and any
adjacent strips or gores of real estate (the "LAND"); all fixtures and
improvements located on the Land, including, but not limited to all
overhead cranes presently situated on the Land (the "IMPROVEMENTS"); and
all rights, titles, and interests appurtenant to the Land and
Improvements; and
3. Purchase Price. Section 2 of the Agreement is deleted in its
entirety and replaced with the following:
The price for which Seller shall sell and convey the Property to
Purchaser, and which Purchaser shall pay to Seller, is ONE MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00) (the "PURCHASE
PRICE"). The Purchase Price shall be payable in cash or cash equivalent
at the Closing (hereinafter defined).
4. Xxxxxxx Money. Pursuant to the Agreement, Purchaser deposited
$100.00 as Xxxxxxx Money with Xxxxxxx Title Company, 0000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxxxx 00000. Seller and Purchaser wish to replace Xxxxxxx Title
Company and designate Beaumont Title Company, 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxx,
Xxxxx 00000, Attn: Xx. Xxx Xxxxxx as the "TITLE COMPANY" under the Agreement.
Seller and Purchaser agree to cooperate in order to have the Xxxxxxx Money
transferred from Xxxxxxx Title Company to Beaumont Title Company. Seller and
Purchaser agree that Chicago Title Insurance Company is an acceptable
underwriter for the Title Commitment and Title Policy to be issued pursuant to
the terms of the Agreement. The Effective Date of the Agreement shall remain
May 14, 1997.
5. Delivery of Information. Seller has caused the Title Company to
issue an updated Title Commitment on or before the date of this Amendment.
Further, the following shall be added to Section 5 of the Agreement as
subparagraph e:
e. Within fifteen (15) days after certification of the Property
under the VCP (as defined in Section 13 hereof) or equivalent
regulatory determination, Seller shall deliver or cause to be
delivered to Purchaser, in compliance with the requirements set
forth in Section 5, subparagraphs a, b, c and d, the following:
-2-
3
i. an updated Title Commitment from the Title Company, with
true, complete and legible copies of all documents not
previously provided to Purchaser;
ii. an updated Survey;
iii. an updated search of the UCC records of the Secretary of
State of Texas and the County Clerk of Jefferson County,
Texas; and
iv. copies of all Documents and Information not previously
provided to Purchaser.
6. Right of Inspection; Contingency Period. The last sentence of
Section 6(b) is hereby deleted. The following shall be added to Section 6 of
the Agreement as subparagraph c:
b. Purchaser shall have the right to terminate this Agreement for
thirty (30) days after receipt of the last of the updated Title
Commitment, Title Documents, Survey, UCC search and copies of
Documents and Information required under Section 5(e) (the
"SECOND CONTINGENCY PERIOD"), if Purchaser, in its sole and
absolute discretion, is not satisfied for any reason with the
condition of Seller's title to the Property. If Purchaser does
not so terminate this Agreement prior to the expiration of the
Second Contingency Period, Purchaser shall have waived its right
to terminate this Agreement under this Section 6.
7. Title. Section 7 of the Agreement is deleted in its entirety and
replaced with the following:
Purchaser shall have the right, at any time during the Contingency
Period and the Second Contingency Period, as the case may be, to object
in writing to any liens and encumbrances reflected by the Title
Commitment or Survey. All liens and encumbrances to which Purchaser so
objects are hereinafter referred to as the "NON-PERMITTED ENCUMBRANCES";
if no such notice of objection is given during the Contingency Period or
the Second Contingency Period, as the case may be, then it shall be
deemed that all matters reflected by the Survey and Title Commitment are
"PERMITTED ENCUMBRANCES". Seller shall use reasonable efforts, at its
sole cost, to cure or remove all Non-Permitted Encumbrances and give
Purchaser written notice thereof before the end of the Contingency
Period or the Second Contingency Period, as the case may be; provided,
however, that Seller, at its sole cost, shall be obligated to cure or
remove at or before Closing all mortgages, deeds of trust, judgment
liens, mechanics and materialmen's liens, and other liens against the
Property, whether or not Purchaser objects thereto during the
Contingency Period or the Second Contingency Period, as the case may be.
Further, Seller shall cause any leases
-3-
4
relating to the Land and Improvements to be terminated on or before
Closing. If Seller does not timely cause all of the Non-Permitted
Encumbrances to be removed or cured, and timely written notice thereof
to be given to Purchaser, then Purchaser shall have the right to either
(i) terminate this Agreement in accordance with Section 12(b) hereof by
delivering notice to Seller, or (ii) attempt to remove or cure the Non-
Permitted Encumbrances and deduct the cost of such removal or cure from
the Purchase Price, or (iii) elect to purchase the Property subject to
the Non-Permitted Encumbrances, other than liens that Seller is
obligated to cure or remove, and the Non-Permitted Encumbrances (other
than liens that Seller is obligated to cure or remove) subject to which
Purchaser elects to purchase the Property shall thereafter be Permitted
Encumbrances.
8. Seller's Representations, Warranties and Covenants. Section 8(l)
of the Agreement is deleted in its entirety and replaced with the following:
l. Except for those matters disclosed by the Dames & Xxxxx
Reports (as defined in Section 13) for which Seller, Babel, Xxxxxx &
Xxxxxxxxx Partnership (a/k/a Babel, Xxxxxx & Xxxxxxxxx, Ltd.), Xxx X.
Xxxxx, Xxx Xxxxxx and Xxxxxx X. Xxxxxxxxx deny responsibility, during
the period that such parties have owned the Property, the Property has
not been the site of any activity that would violate any past or present
environmental law or regulation of any governmental body or agency
having jurisdiction over the Property. Further, except as disclosed by
the Dames & Xxxxx Reports, (i) solid waste, petroleum, or petroleum
products have not been handled on the Property such that they may have
leaked or spilled onto the Property or contaminated the Property, (ii)
there is no on-site contamination resulting from activities on the
Property or adjacent tracts, and (iii) the Property contains no
"hazardous materials" which shall mean any flammables, explosives,
radioactive materials, asbestos, or other hazardous waste including
without limitation substances defined as "hazardous substances",
"hazardous materials", or "toxic substances" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980; the
Hazardous Materials Transportation Act; and the Resources Conversation
and Recovery Act, all as amended.
9. Closing. The first sentence of Section 9 of the Agreement is
hereby deleted in its entirety and replaced with the following:
The closing ("CLOSING") of the sale of the Property by Seller to
Purchaser shall occur on the later to occur of the following: (i) sixty
(60) days after certification of the Property under the VCP (as defined
in Section 13); or (ii) ten (10) days after the Non-Permitted
Encumbrances have been cured or waived as set forth in Section 7, but in
any event no later than ninety-nine (99) years from the commencement
date of the
-4-
5
Lease; provided, however, Purchaser, in its sole discretion, may waive
one or more of the conditions to Closing and proceed to Closing at any
time.
10. Conditions to Closing. The Section 13 of the Agreement is hereby
deleted in its entirety and replaced with the following:
a. This Agreement is expressly conditioned upon the
consummation of a Stock Purchase Agreement dated April 24, 1997 between
the stockholders of Exell, Inc., a Texas corporation and Purchaser (the
"EXELL AGREEMENT"). In the event the Exell Agreement is not consummated
for any reason, Seller shall have no further obligation to sell and
Purchaser shall have no further obligation to purchase the Property and
this Agreement shall be automatically terminated and of no further force
and effect.
b. This Agreement is expressly conditioned upon the Seller
entering into the Lease with Exell, Inc. contemporaneously with the
closing of the Exell Agreement, upon terms reasonably acceptable to
Purchaser and Seller.
c. Purchaser has learned of certain environmental matters
affecting the Property (the "ENVIRONMENTAL MATTERS") as set forth in
reports prepared by Dames & Xxxxx entitled "Final Report, Phase I
Environmental Site Assessment, Limited Environmental Compliance Review,
Excell Manufacturing Facility, 0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxx for
ITEQ, Inc." dated April 30, 1997, and "Dames & Xxxxx Group Limited Phase
II Investigation, Excell, Inc. Facilities, Beaumont, Texas" dated July
14, 1997 (collectively, "DAMES & XXXXX REPORTS"). As part of the
consideration for the Lease, Exell, Inc. (with the guaranty of
Purchaser) has agreed to remediate the Environmental Matters under the
Voluntary Cleanup Program provided for in Texas Health and Safety Code,
Sections 361.601 et. seq., as same may be amended from time to time and
the regulations promulgated thereunder ("VCP"), pursuant to the terms
and conditions set forth in the Lease. The Closing of this Agreement is
expressly conditioned upon Exell, Inc. obtaining a Certificate of
Completion for the Property under the VCP from the Texas Natural
Resources Conservation Commission, or equivalent regulatory
determination in the event remediation of the Property is not performed
under the VCP.
11. Notices. The following is added to Section 14 in the event a
notice is sent to the Seller or Purchaser:
-5-
6
If to Seller, to: Xxxxxxxx Xxxxxxxx Street Properties, L.L.C.
Neches Street Properties, L.L.C.
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxx
(000) 000-0000
FAX: (000) 000-0000
with a copy to: Xxxxxx, Xxxx & Xxxxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxx, III, Esquire
(000)000-0000
FAX: (000)000-0000
If to Purchaser, to: ITEQ, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxxx X. XxXxxx
(000) 000-0000
FAX: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esquire
(000)000-0000
FAX: (000)000-0000
12. Memorandum of Agreement. The parties shall execute a Memorandum
of this Purchase and Sale Agreement and record such Memorandum in the Official
Public Records of Jefferson County, Texas.
13. No Other Modifications. Except as expressly amended and modified
hereby, all of the covenants and conditions of the Agreement as amended by this
Amendment are ratified and confirmed by Seller and Purchaser.
14. Defined Terms. All terms, definitions and dates contained in the
Agreement shall have the same meaning and application in this Amendment except
to the extent there is a conflict, in which event, the terms of this Amendment
shall control.
-6-
7
15. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
EXECUTED effective the 13th day of August, 1997.
SELLER:
XXXXXXXX XXXXXXXX XXXXXX PROPERTIES, L.L.C.
By: /s/ XXX XXXXXX XXXXXXXXX
------------------------------------------
Name: Xxx Xxxxxx Xxxxxxxxx
----------------------------------------
Title: Managing Member
---------------------------------------
NECHES STREET PROPERTIES, L.L.C.
By: /s/ XXX XXXXXX XXXXXXXXX
------------------------------------------
Name: Xxx Xxxxxx Xxxxxxxxx
----------------------------------------
Title: Managing Member
---------------------------------------
BABEL, XXXXXX & XXXXXXXXX PARTNERSHIP
By: /s/ XXX X. XXXXX
------------------------------------------
Name: Xxx X. Xxxxx
----------------------------------------
Title: Partner
---------------------------------------
PURCHASER:
ITEQ, INC.
By: /s/ XXXXXXXX X. XxXXXX
------------------------------------------
Xxxxxxxx X. XxXxxx, Executive Vice
President and Chief
Financial Officer
-7-
