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Leasehold Improvements Purchase Agreement

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Sectors: Transportation
Governing Law: Ohio, View Ohio State Laws
Effective Date: January 20, 2004
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LEASEHOLD IMPROVEMENTS PURCHASE AGREEMENT



This Leasehold Improvements Purchase Agreement ("Agreement") is made this 20 th day of January, 2004 by and between AirNet Systems. Inc., an Ohio corporation having a mailing address of 3939 International Gateway Drive, Columbus, Ohio 43219 ("Seller"), and Columbus Regional Airport Authority , a port authority organized and existing pursuant to Chapter 4582 of the Ohio Revised Code having a mailing address of 4600 International Gateway, Columbus, Ohio 43219 ("Buyer").







Background





A. Seller, as lessee, and Buyer, as lessor, are currently parties to the following described lease (the "Lease") relating to real property located at Port Columbus International Airport and more particularly described in the Lease (the "Leased Premises"):



Lease Agreement between the City of Columbus and Jerry G. Mercer dated October 4, 1984, as modified by (a) Modification #1 dated June 11, 1985, (b) Modification #2 dated June 11, 1986, (c) Modification #3 dated May 15, 2987, (d) Modification #4 dated August 17, 1989, (e) Modification #5 dated December 15, 1994 and (f) Modification #6 dated September 1, 2002.



B. The Leased Premises have been improved with certain leasehold improvements consisting of an approximately 78,000 square foot hangar/sort/office facility and related site improvements (collectively, the "Leasehold Improvements") owned by Seller.



C. Simultaneous with their execution and delivery of this Agreement, Buyer, as landlord, and Seller as tenant, are executing that certain lease agreement (the "Rickenbacker Lease") pursuant to which (i) Seller is leasing from Buyer an approximately 8.098 acre site at Rickenbacker International Airport upon which Seller will be constructing a new hangar/sort/office facility to house its aeronautical operations (the "Rickenbacker Leasehold Improvements") and (ii) Buyer has agreed to construct an aircraft parking ramp (the "Ramp") adjacent to Seller92s proposed new facility.



D. As an inducement to Seller to enter into the Rickenbacker Lease, Buyer has agreed to purchase the Leasehold Improvements from Seller and terminate the Lease, all in accordance with terms and conditions hereinafter set forth.



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Agreement



NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained in this Agreement, the parties hereby covenant and agree as follows, intending to be legally bound hereby:





a7 1. Purchase and Sale . Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Leasehold Improvements. The Leasehold Improvements shall include all of the right, title and interest of Seller in and to all improvements now or hereafter located on the Leased Premises. The Leasehold Improvements do not include (a) any aircraft or other personal property owned by Seller and located at the Leased Premises or (b) any of the property more particularly described on Exhibit A attached hereto.



a7 2. Purchase Price . The purchase price for the Leasehold Improvements (the "Purchase Price") is Three Million Eight Hundred Fifty Thousand Dollars ($3,850,000) payable in cash at the Closing (as hereinafter defined) in the form of a certified or bank check or wired federal funds.



a7 3. Closing . The closing of the transaction contemplated by this Agreement (the "Closing") shall take place (a) at the offices of Seller or such other place as Seller and Buyer may mutually agree upon in writing, and (b) during the month of December, 2004, with the date and time of Closing to be established by Seller in a written notice to Buyer given not less than seven (7) days prior to the scheduled Closing date. Notwithstanding the foregoing, the Closing may be postponed by Seller or Buyer pursuant to the provisions of Section 5 hereof.



a7 4. Representations and Warranties of Seller . To induce Buyer to enter into this Agreement to purchase the Leasehold Improvements, Seller represents and warrants to Buyer as follows:



a. There are no leases, subleases, tenancies, licenses, or other rights of occupancy or use of any portion of the Leased Premises other than the Lease.



b. Seller is the sole legal and beneficial owner of the Leasehold Improvements.



c. The Leasehold Improvements are free and clear of all liens, security interests, encumbrances, pledges, claims of others, or equitable interests of any kind whatsoever.



d. Seller does not know of any pending or threatened condemnation or eminent domain proceedings that would affect the Leasehold Improvements.



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e. No litigation or proceeding is pending or threatened relating to Seller or the Leasehold Improvements or any part thereof, which could have an adverse effect on title to or the use and enjoyment or value of the Leasehold Improvements or any part thereof, or which could in any way interfere with the consummation of this Agreement.





f. Seller does not know of any existing conditions in the Leasehold Improvements that violate any environmental laws, rules, regulations or permits or require any remedial or corrective action pursuant to said environmental laws, rules, regulations or permits.





It shall be a condition of Buyer92s obligation to close the transaction which is the subject of this Agreement that all of the foregoing warranties and representations remain true as of the date of the Closing.





a75. Closing Contingencies .





(a) Seller92s Contingency. Seller92s obligation to proceed to Closing is specifically conditioned upon Buyer, at the time of the Closing, having progressed with construction of the Ramp to the point that, in Seller92s reasonable opinion, construction of the Ramp will be completed within the time established in Section V.B of the Rickenbacker Lease. If, in Seller92s reasonable opinion, construction of the Ramp has not so progressed at the time of Closing, Seller may elect one of the following options:



(i.) Seller may elect to proceed with the Closing; or



(ii.) Seller may elect to postpone the Closing to a date which is no later than thirty (30) days following the date construction of the Ramp is completed.



Seller92s election to proceed under either of the options above shall be made in a written notification given to Buyer at any time on or prior to the scheduled date of the Closing. If Seller elects to postpone the Closing, the actual date of Closing shall be established in a subsequent written notice from Seller to Buyer. Anything contained herein to the contrary notwithstanding, in the event Seller elects to postpone the Closing, Seller shall have the option to terminate this Agreement if Buyer does not complete construction of the Ramp within the time established in Section V.B of the Rickenbacker Lease. If Seller elects to terminate this Agreement, then the parties shall be released from all further obligations hereunder effective as of the date of such notice of termination.





(b) Buyer92s Contingency. Buyer92s obligation to proceed to Closing is specifically conditioned upon Seller, at the time of the Closing, having progressed with construction of the Rickenbacker Leasehold Improvements to the point that, in Buyer92s reasonable opinion, construction of the Rickenbacker Leasehold Improvements will be completed within the time established in Section V.A of the Rickenbacker Lease. If, in



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Buyer92s reasonable opinion, construction of the Rickenbacker Leasehold Improvements has not so progressed at the time of Closing, Buyer may elect one of the following options:



(i.) Buyer may elect to proceed with the Closing; or



(ii.) Buyer may elect to postpone the Closing to a date which is no later than thirty (30) days following the date construction of the Rickenbacker Leasehold Improvements is completed.





Buyer92s election to proceed under either of the options above shall be made in a written notification given to Seller at any time on or prior to the scheduled date of the Closing. If Buyer elects to postpone the Closing, the actual date of Closing shall be established in a subsequent written notice from Buyer to Seller. Anything contained herein to the contrary notwithstanding, in the event Buyer elects to postpone the Closing, Buyer shall have the option to terminate this Agreement if Seller does not complete construction of the Rickenbacker Leasehold Improvements within the time established in Section V.A of the Rickenbacker Lease and, as a result thereof, the Rickenbacker Lease is terminated. If Buyer elects to terminate this Agreement, then the parties shall be released from all further obligations hereunder effective as of the date of such notice of termination.



a76. Closing Documents . (a) Seller Documents . At Closing, Seller shall execute and deliver to Buyer the following documents:





(i) Deed and Bill of Sale substantially in the form of the attached Exhibit B (the " Deed"), conveying the Leasehold Improvements to Buyer.



(ii) Lease Termination Agreement substantially in the form of the attached Exhibit C (the "Termination Agreement"), terminating the Lease.



(iii) Lease Agreement (the "New Lease"), pursuant to which Buyer leases to Seller the Leased Premises and Leasehold Improvements pending the completion of construction of the Ramp and Rickenbacker Leasehold Improvements. The terms and conditions of the New Lease will be substantially the same as the existing Lease, except that (A) it will be a lease of the Leased Premises and Leasehold Improvements, (B) the rent will be $30,000 per month, with the first 3 months being abated (i.e., rent free), (C) the term shall end on the date Seller completes its move-in under the Rickenbacker Lease, and (D) there shall be no renewal options or rights-of-first refusal to purchase. If Seller or Buyer elects to postpone the Closing pursuant to Section 5 hereof until construction of the Ramp or Rickenbacker Leasehold Improvements, as applicable, is completed, the New Lease will not be required.



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(iv) Appropriate certificates of Seller regarding the authorization of the sale and the authority of any person who has signed this Agreement or any of the closing documents on behalf of Seller.



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