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REAL ESTATE CONTRACT
This Contract is entered into by and between Elecsys Corporation, a Kansas
corporation ("Buyer"), and Rose Construction Company, a Kansas corporation
("Seller") effective as of the "Effective Date," which is hereby defined as the
last date upon which both Buyer and Seller have executed this Contract.
1. Purchase and Sale. Seller hereby agrees to sell and convey and Buyer
agrees to purchase the real property comprised of approximately 5 acres of land
legally described on Exhibit A attached hereto and incorporated herein, and all
improvements to be constructed thereon consisting primarily of an approximately
60,100 sq. foot single story building made primarily of pre-cast concrete and
glass (the "Building") (the Building and all appurtenant parking areas,
infrastructure and other improvements are hereinafter collectively referred to
as the "Improvements"), together with all and singular the rights and
appurtenances pertaining to the property, and all right, title and interest of
Seller in and to parking, adjacent streets, easements, gaps and gores,
appurtenances and rights of way relating to such real estate (collectively, the
"Property").
2. Purchase Price. Subject to Sections 5(e), 5(g), and 8(e) below, the
Purchase Price for the Property shall be (a) Four Million Three Hundred Eighty
Six Thousand and 00/100 Dollars ($4,386,000.00), and (b) the aggregate
construction interest owed on the Construction Financing for the period prior to
the "Target Date" (defined in Section 5(a) below), which shall be paid in cash
or by wire transfer at "Closing" (defined in Section 9 below).
3. Entry on Property. Buyer, its agents, employees, and representatives,
are hereby granted the right to immediately enter upon all or any portion of the
Property for the purpose of making any structural, mechanical, engineering,
geological, ecological, environmental, soil, surveying, or other inspections,
tests, or work as Buyer, in its discretion, may deem necessary or appropriate.
Buyer shall give advance written notice to Seller prior to entering the
Property. Buyer agrees to indemnify and hold Seller harmless from all
liabilities, damages and claims arising out of injury to persons or property as
a result of Buyer's inspections and entry onto the Property pursuant to this
Section 3.
4. Seller's Deliveries. Seller shall within ten (10) days from the date
this Contract is executed by Buyer, at Seller's expense, deliver to Buyer
legible, accurate and complete copies of any and all documents and agreements
relating to the Property which are in Seller's possession or control, including,
without limitation, the following (together, the "Seller's Deliveries"): a
current standard form ALTA Owner's Title Commitment ("Title Commitment")
covering the Property and issued by Kansas Title, as agent for First American
Title Insurance Company (the "Title Company"), along with copies of all
documents referred to as exceptions therein; a current ALTA/ASCM survey of the
Property (the "Survey"); any existing environmental study or report; any
existing soil reports; and building permits.
5. Construction; Construction Financing.
(a) Seller shall construct the Improvements at its expense in
accordance with the "Approved Plans and Specifications" attached hereto as
Exhibit B and incorporated herein,
any "Approved Change Orders" (defined in Section 5(e) below), and all governing
laws and codes. Without limiting the foregoing, Seller shall be responsible for
any and all impact or tap-in fees, municipal charges and assessments, and permit
fees relating to the construction or occupancy of the Improvements. Seller shall
use only contractors and subcontractors approved in writing by Buyer, such
approval not to be unreasonably withheld. Seller shall use reasonable efforts to
complete such construction on or before August 21, 2006 (the "Target Date").
(b) This section intentionally deleted.
(c) Seller shall keep Buyer apprised of the ongoing status of
construction, and shall promptly furnish to Buyer copies of all material
documents relating to the Property and construction of the Improvements
generated or obtained by or for Seller. Upon completion of construction, Seller
shall deliver to Buyer the following items (together, "Seller's
Post-Construction Deliveries"): architectural reports and reviews (including,
without limitation, an AIA certificate from Seller's architect certifying that
the Improvements were constructed in substantial accordance with the Approved
Plans and Specifications, as modified by any Approved Change Orders, and laws
and codes; an updated "as built" survey; unconditional lien waivers from all
contractors, subcontractors, and suppliers of materials, "as-built" plans and
specifications, any engineering reports, and a temporary or permanent
certificate of occupancy.
(d) Buyer and Seller and their respective agents and consultants shall
conduct a walk through of the Improvements on or before substantial completion
thereof, and Buyer shall submit a list of any incomplete items to Seller within
ten (10) days of the date thereof. Seller shall promptly cure such punch-list
items.
(e) If on one or more occasions following execution of this Contract,
Buyer requests that Seller deviate from the Approved Plans and Specifications (a
"Requested Change Order"), Seller shall incorporate the Requested Change Order
into the Improvements, and, subject to the terms of this Section 5(e), the
Purchase Price at Closing shall be increased by the cost of the Requested Change
Order. If any Requested Change Order individually or in the aggregate would
cause an increase in the cost of construction of more than $10,000.00, Seller
shall notify Buyer in writing within five (5) business days of the request for
the Requested Change Order of the cost of the Requested Change Order and Buyer
has three (3) business days to elect to withdraw such request. Any Requested
Change Order proposed by Buyer and not withdrawn by Buyer shall be an "Approved
Change Order". If Seller fails to timely notify Buyer of the cost of any
Requested Change Order as required herein, the Purchase Price shall not be
increased to reflect such cost.
(f) Seller shall and hereby does warrant the good and complete
performance of its construction obligations hereunder, and shall indemnify and
hold Buyer harmless from and against all costs, expenses, claims, damages,
demands and liabilities relating to the Property which accrue or arise prior to
the Closing Date, or accrue or arise at any time arising out of Seller's failure
to perform (or cause to be performed) Seller's construction obligations as set
forth herein. Without limiting the foregoing, Seller shall cure all labor and
material defects in the Improvements of which Seller has written notice prior to
one year after the Closing Date. Nothing set forth herein shall limit any claim
against Seller arising from the negligent performance of its construction
obligations.
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(g) Seller shall obtain and be solely responsible for any financing
required to construct the Improvements (the "Construction Financing"); provided,
however, Buyer(s) agrees to guarantee that portion of the Construction Financing
that does not exceed the Purchase Price so long as (i) Buyer has approved in
writing in advance the amount financed, interest rate, and other terms of the
Construction Financing, and Seller accepts or agrees to no modifications thereof
without Buyer's prior written consent; (ii) any amount Buyer is required to pay
under said guaranty shall (A) constitute a debt from Seller to Buyer in such
amount, which contingent debt and the Seller's obligations under this Contract
shall be secured by a mortgage in favor of Buyer in the form attached hereto as
Exhibit C (the "Mortgage") to be recorded against the Property (all costs of
such recording shall be borne by Seller) on the Effective Date, and (B) at
Closing, in lieu of the foregoing debt described in (A), cause a reduction in
the Purchase Price at Closing; and (iii) the guaranty shall be released at
Closing. Buyer and Seller acknowledge and agree that the Mortgage shall be
junior to any mortgage securing the Construction Financing, but to no other lien
or security instrument.
(h) All obligations of this Section 5 shall survive Closing.
6. Title Insurance. Buyer shall deliver to Seller its written objections
to any matters shown or indicated in the Title Commitment, exception documents,
or the Survey, within thirty (30) days after receipt of all of said items.
Seller shall have until Closing to remove all such defects or objections to
Buyer's reasonable satisfaction. In the event Seller is unable to cure or remove
such objections to Buyer's reasonable satisfaction prior to or at Closing, Buyer
may, at its option, terminate this Contract, waive its objections and proceed to
Closing, or delay Closing until Seller has cured such objections. Effective as
of the date and time of recording of the Deed (as defined below), there shall be
issued to Buyer by the Title Company, an ALTA Owner's Title Insurance Policy
(the "Title Policy") in the amount of the Purchase Price. The Title Policy shall
insure good and marketable fee simple title to the Property in favor of Buyer.
The Title Policy shall contain as exceptions to title only those matters
approved or waived by Buyer ("Permitted Exceptions"). The Title Policy shall not
have any exceptions for mechanics or material liens, survey matters or the
Construction Financing. The costs and expenses of the Title Commitment, Title
Policy, and the surveys shall be borne by Seller.
7. Conditions Precedent. In addition to Seller's performance of its
obligations under this Contract, including the delivery of all documents at
Closing, Buyer's obligation to purchase the Property is subject to Buyer's
satisfaction in its sole discretion with the Property in all respects,
including, without limitation, the physical condition of the Property, the
Seller's Deliveries, the economic viability of the Property, and any other
matters pertaining to the Property within forty-five (45) days after the
Effective Date (the "Due Diligence Period"). If Buyer deems this condition to be
unsatisfied, Buyer may, at its option, terminate this Contract by written notice
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