EXHIBIT 10.4
CONTRACT OF SALE
THIS CONTRACT OF SALE is made by and between ISLANDS BANCORP, a South
Carolina corporation hereinafter referred to as "Buyer", and N. XXXXXX
XXXXXXXXX, hereinafter referred to as "Seller". The term "Buyer" shall include
any permitted assignee of Islands Bancorp hereunder. In good consideration of
the agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
agree as follows:
ARTICLE I
The Property
1.1 Subject to the terms and provisions of this Contract, Seller agrees to
sell and convey to Buyer, and Buyer agrees to purchase from Seller, the
following property:
All that certain piece, parcel or lot of land situate, lying and
being on U.S. Hwy 21, Lady's Island, Beaufort County, State of South
Carolina, containing 2.3+/- acres, and is more particularly shown and
described on that certain plat, which is attached hereto as Exhibit
"A".
ARTICLE II
Purchase Price
2.1 Purchase Price: The purchase price for the property is FIVE HUNDRED
TWENTY THOUSAND ($520,000.00) DOLLARS.
2.2 Method of Payment: The purchase price shall be paid by Buyer in the
following manner:
(a) Escrow Deposit: Buyer shall simultaneously with the execution hereof
pay to the Seller the sum of FIFTEEN THOUSAND AND NO/100
($15,000.00) Dollars as a deposit to be applied toward the purchase
price of the property. The Escrow Deposit shall be held in an
account by Seller's attorney, Xxxxxx X. Xxxxx, Xxxxxx & Xxxxxx,
P.A., attorneys at law, Beaufort, South Carolina.
(b) Balance of Purchase Price: The balance of the purchase price (after
credit for the Escrow Deposit) shall be paid at closing (as
hereinafter defined) by Buyer as FIVE HUNDRED FIVE THOUSAND AND
NO/100 ($505,000) in cash or certified bank funds.
ARTICLE III
Title and Survey
3.1 Survey: If Buyer desires to do so, within thirty (30) days from the
date hereof, Buyer may obtain a current boundary survey of the Property,
prepared by a South Carolina Registered Land Surveyor.
3.2 Review of Title Abstract and Survey: Buyer shall have a review period
(the "Review Period") ending thirty (30) days from the date hereof. Any title
encumbrances or exceptions to which Buyer does not object within the Review
Period shall be deemed to be permitted exceptions to the status of Seller's
title (the "Permitted Exceptions"). With regard to any title or survey items to
which a Buyer objects within the Review Period, Seller shall have a period of
fifteen (15) business days from the date of Buyer's notice of such objections,
in which to elect to cure or otherwise satisfy Buyer's objections. For example,
Seller may satisfy
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Buyer's objections to title by providing a title insurance binder issued by an
ALTA title insurance company at standard rates subject only to standard
exceptions for Beaufort County, and to no other exceptions or conditions
reasonably unsatisfactory to Buyer. If Seller elects not to cure said title
objections, or the same are not satisfied to Buyer's satisfaction within
Seller's 15 day cure period, then Buyer may elect to terminate this Contract by
providing written notice thereof to Seller within three (3) business days after
the end of such cure period, and receive the return of the Escrow Deposit. If
the Contract is not so terminated, Buyer will have been deemed to have fully
and completely waived any said objections and accept the status of title and
the survey "as is". Buyer shall also have the right to notify Seller of any
objectionable title matters that appear of record subsequent to the date of
Buyer's title abstract and/or title insurance binder and on or prior or date of
Closing. In such event, Seller shall have the same 15 business day cure period
as set forth above, and Buyer shall have the same rights to terminate this
Contract as set forth above.
ARTICLE IV
Inspection, Termination and Waiver
4.1 Due Diligence Period: For a period of ninety (90) days after the date
hereof (the "Due Diligence Period"), Buyer shall have the right to conduct
investigations, inspections and studies of the Property and to satisfy the
following contingencies, unless otherwise waived by Buyer:
(a) Buyer has applied for all necessary preliminary permits and approvals
from Beaufort County, DHEC/OCRM, Lady's Island Fire Department, all
utility providers in connection with the development of the property.
(b) Buyer has satisfied itself that public water and sewer is available
for service to the property.
(c) Buyer has satisfied itself that the property meets all local, state
and federal environmental regulations as evidenced by a Phase I or
Phase II Environmental Assessment, which Buyer may obtain at its
expense. If Buyer elects to obtain such Environmental Assessment,
Buyer agrees to have such study or studies prepared within sixty (60)
days after the Execution Date hereof, and Buyer agrees to provide
Seller with a copy of such studies and Buyer's written confirmation of
the acceptability or unacceptability of such studies within ten (10)
days after the receipt by Buyer of such studies.
(d) Buyer may at buyer's option obtain an (MAI) appraisal which shall
indicate a fair market value of the property at or above the Purchase
Price and said appraisal shall in all regards be acceptable to any and
all regulatory agencies involved in the chartering process for Islands
Community Bank, NA (Proposed).
(e) Buyer has applied for and obtained preliminary approval from Beaufort
County and the South Carolina Department of Transportation, or any
other governmental entity or agency providing a curb cut for ingress
and egress off of United States Highway 21 to the property.
(f) Buyer and/or Buyer's Architects and/or Engineers shall be satisfied
that the property has adequate usable land situated and configured
such that a banking main office can be located upon it. Further, Buyer
and/or Buyer's Architects and/or Engineers shall be satisfied that the
depression located in areas to be utilized in the construction of a
building, parking, or any other capacity necessary to the erection and
operation of a commercial bank may be filled at a cost acceptable to
Buyer.
4.2 Termination and Waiver: Should one or more of the above contingencies
not be satisfied, Buyer may give written notice to Seller on or before the
expiration of the Due Diligence Period that this Contract will be terminated
fifteen (15) business days after such notice (unless Seller can persuade Buyer
within such time period to rescind such notice), and the Escrow Deposit shall
be refunded to buyer upon such termination except for any portion of said
deposit that may previously become non-refundable pursuant to paragraph 4.2 (a)
herein. If such notice is given and not rescinded, neither party shall have any
further rights or obligations hereunder upon such termination, except Seller's
obligation to refund to Buyer the Escrow Deposit. Seller may however, be
granted an extension of time to satisfy any one or more of the above
contingencies as may be agreed upon by the parties to this agreement.
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(a) $5,000 of the xxxxxxx money deposit shall become non-refundable 60
days from date of this agreement and an additional $5,000 shall become
non-refundable 90 days from date of this agreement, unless the sale in
not consummated due to Seller's failure to meet its obligations and
conditions for closing under this agreement. In the event Seller fails
to meet its obligations under this agreement the entire ($15,000)
xxxxxxx money deposit shall be returned to Buyer. Additionally, no
xxxxxxx money deposits shall become non-refundable as a result of
delay or disapproval by the Federal Bankruptcy Court in the process of
approving this contract.
4.3 Inspection: Buyer and its employees and designated agents and
consultants may, before closing or termination of this Contract, have access as
Seller's invitees to enter upon the Property to inspect, examine, and survey it
and to make test borings and soil borings tests, however, no trees or
vegetation shall be cut or removed other than brush necessary to clear for
surveying or testing on the property. Buyer shall at its expense, restore
property to its former condition in the event Buyer does not acquire the
property. Buyer agrees to indemnify, save and hold harmless Seller from and
against all liens and for any damages, or any death or injury to any person,
occurring on the property and from and against any other liability, cost of
expense including attorneys fees and court costs as a result of the activities
or presence of Buyer or persons acting on its behalf in the exercise of such
inspection rights. Notwithstanding anything herein to the contrary, Buyer shall
not do anything which materially interrupts Sellers' business on the property
prior to closing date.
4.4 Cooperation: While this Contract is in effect, Seller and Buyer agree
to cooperate in good faith to achieve a closing of the sale and purchase of the
Property. Buyer agrees to keep the Seller fully informed of its efforts to
investigate the property and to otherwise perform this agreement. Seller agrees
to cooperate with Buyer in connection with obtaining any title insurance
binders and the preparation of any development plan applications submitted to
the County, State of Federal Government, and Seller agrees to provide the
necessary "consent" forms required by any governmental body or agency in
connection with such applications. Seller agrees to provide Buyer any existing
or proposed agreements, plans, information or knowledge with or from any
governmental entity(ies) or agency(ies) including, but not limited to, South
Carolina Department of Transportation and/or Beaufort County, relating to the
property as contained herein.
4.5 Wetland and Environmental Protection Matters: Seller warrants to Buyer
that during all periods prior to and including the date of the closing
hereunder (a) no ponds or other wetlands on the Property have been altered,
filled or otherwise disturbed, and (b) no matter or materials have been stored
or buried on the Property that would be in contravention of any public health
law, whether by the U.S. Environmental Protection Agency or by the South
Carolina Department of Health and Environmental Control, and (c) no other
prohibited materials have been placed or stored on the Property. With respect
to such matters, Seller agrees at Seller's expense to remove them and to bring
the property into compliance with all appropriate laws and regulations prior to
the time of closing.
ARTICLE V
Condition of the Property
5.1 Buyer hereby acknowledges its familiarity with the Property and agrees
that during the Due Diligence Period it will conduct and complete any and all
investigations, inspections, and studies considered necessary and prudent to
determine the condition of the Property, and to determine any approvals needed
from the appropriate governmental authorities for the development of the
Property. At closing Seller will convey good, marketable and insurable Fee
Simple title to the Property to Buyer "as is" without express or implied
warranties of any nature, except as contained in the Deed conveying the
Property to Buyer.
5.2 Seller shall not remove any timber, dirt materials, or otherwise affect
the condition of the Property after the signing of this Contract. All timber,
dirt, minerals, etc./shall remain with the Property and be a part of the
Property, and be transferred to the Buyer unless agreed to in writing by both
Parties. Seller shall not bring
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any trash, refuse, debris, medical or other hazardous waste, or other improper
materials upon the Property. In the event any condemnation proceedings is
brought by any governmental authority, agency, utility, etc. prior to the
closing, then Buyer may elect to rescind this Contract and receive a refund of
the Escrow Deposit and any incremental payments made to Seller under Section
7.1 hereof. Seller shall remove any and all items considered as "Merchandise
for Resale", debris, vehicles, equipment, landscaping and gardening materials,
greenhouses, and furnishings from buildings that are located on the property.
ARTICLE VI
Conditions to Closing
6.1 In addition to any other conditions set forth in this Contract, Buyer's
obligation to purchase the Property at the closing shall be subject to the
fulfillment of each of the following conditions, it being understood that Buyer
may, at its election, waive in whole or in part, any or all of said conditions:
(a) Seller shall have (i) cured or otherwise addressed to Buyer's
satisfaction any and all title and survey objections as to which Buyer
has provided proper notification to Seller pursuant to section 3.2
hereof; (ii) satisfied any contingency as to which Seller is obligated
to satisfy under Article IV hereunder; and (iii) complied with all its
other covenants and obligations under this Contract and not be in
default hereunder.
(b) Buyer shall have satisfied any objections to the purchase of the
Property which have been raised by the Office of the Comptroller of
the Currency, or any other governmental agency which may be involved
with the chartering, deposit insurance and/or operation of a bank.
(c) The minimum offering conditions for the release of offering proceeds
to Islands Bancorp from the escrow agent in the initial public
offering by Islands Bancorp of its common stock shall have been
satisfied and such proceeds shall have been delivered to Islands
Bancorp.
(d) No suit, action or other proceeding shall have been instituted before
any court or administrative agency which could result in an order or
decree enjoining the consummation of the transaction contemplated by
this Contract or the divestment of any portion of the Property, other
than any such suit, action or other proceeding instituted as a result
of the sole act of Buyer.
6.2 The Parties hereto agree that in the event Islands Bancorp shall
determine at any time prior to the end of the Due Diligence Period to terminate
its initial public offering of common stock, Buyer may terminate this Contract
by providing written notice thereof to Seller, whereupon the Escrow Deposit
shall be promptly refunded to Buyer except for any portion of said deposit that
may have previously become non-refundable pursuant to said provision pursuant
to paragraph 4.2 (a) herein.
ARTICLE VII
Closing
7.1 Time and Place of Closing: If all pre-closing contingencies and
conditions have been satisfied or waived by Buyer, the Closing of this
transaction shall take place at the office of the Buyer's attorney on or before
May 15, 2000. If such contingencies or conditions have not been satisfied
within such time period, Buyer shall have the right to extend the Due Diligence
Period and to extend the time for Closing for thirty (30) day increments up to
six (6) months for a consideration of Three Thousand ($3,000.00) Dollars for
each incremental thirty (30) day extension. The consideration paid for any
incremental extension hereunder shall be advanced directly to Seller and shall
not be applied toward the purchase price of the Property. Notwithstanding the
foregoing, no incremental payment shall be due from Buyer with respect to any
extension of the Due Diligence Period or extension of the time for Closing
resulting from the failure of Seller to satisfy its obligations with respect to
any pre-closing contingency or condition including but not limited to delays
resulting from Federal Bankruptcy Court.
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7.2 Events of Closing: At the Closing:
(a) Seller shall deliver to Buyer the following:
(i) A General Warranty Deed (in form and substance customarily used
in Beaufort County, South Carolina) duly executed and
acknowledged by Seller conveying to Buyer fee simple title to
the land which is the subject of this agreement free and clear
of any lien, encumbrances or exception other than the Permitted
Exceptions
(ii) A Seller's Affidavit attesting to the absence unless otherwise
provided for herein or for settlement at Closing, of any
financing statements, claims of liens or potential lienors known
to Seller and further attesting that (A) there have been no
improvements to the Property for ninety (90) days immediately
preceding the Closing Date for which payment in full has not
been made; (B) that to the knowledge of Seller the Property has
never been used for the storage or disposal of hazardous wastes;
and (C) that since the date of this Contract, Seller has not
caused to be placed against the Property and has no knowledge of
the placement against the Property since such date of any
easements, (except those to accommodate cross-easements for
improved traffic flow), restrictions, leases, tenancies,
encumbrances or rights affecting the Property, and has not taken
any other action, either directly or indirectly, which would
otherwise adversely affect title to the Property;
(iii) a non-foreign affidavit, and
(iv) possession of the Property.
(b) Buyer shall deliver to Seller the consideration required pursuant to
this agreement.
7.3 Expenses: Buyer shall pay the cost of the title abstract, the cost of
any title insurance, Buyer's share of the prorations, the fee to record the
Deed, and the Buyer's own attorney's fees. Except as otherwise provided in this
Section, all other expenses hereunder shall be paid by the party incurring such
expenses. Seller shall pay the cost of the statutory recording fee (formerly
called deed stamps), and Seller's own attorney's fees. Seller shall pay
Seller's proportionate share of the prorations as set forth below.
7.4 Prorations: Real estate taxes shall be prorated to the day of Closing
based upon the number of actual days involved. Seller shall be responsible for
all such taxes for any period prior to the Closing. In connection with the
proration of the real estate taxes, if actual tax figures for the year of
Closing are not available on the Closing Date, an estimated proration of taxes
shall be made using tax figures from the preceding year; provided, however that
when actual taxes for the year of Closing become available, a corrected
proration required hereunder, if such taxes for the year of Closing increase
over those for the preceding year, Seller shall pay to Buyer a pro rata portion
of such increase, computed to the Closing Date, and conversely, if such taxes
for the year of Closing decrease from those of the preceding year, Buyer shall
have to pay to Seller a pro rata portion of such decrease, computed to the
Closing Date, any such payment to be made within (15) days after notification
by either party that such adjustment is necessary.
ARTICLE VIII
Default and Remedies
8.1 Default by Seller: Seller shall be in default hereunder if Seller shall
fail to meet, comply with or perform any covenant, agreement, or obligation
required, within the time limits and in the manner required in this Contract,
for any reason other than a Permitted Termination or a default by Buyer. Upon
the failure of Seller to comply with the terms hereof within the stipulated
time, and after receipt of notice of said default with a ten (10) day right to
cure, it is understood and agreed by and between the parties hereto that Buyer
pursue any and all rights and remedies available at law or in equity against
Seller.
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8.2 Default by Buyer: Buyer shall be in default hereunder if Buyer shall
fail to deliver at the Closing the consideration required by Section 2.1 (b)
hereof, for any reason other than a default by Seller hereunder or a Permitted
Termination. Upon the failure of Buyer to comply with the terms herein within
the stipulated time, and after receipt of notice of said default with a ten
(10) day right to cure, it is understood and agreed by and between the parties
hereto that Seller may pursue any and all rights and remedies available at law
or in equity against Buyer.
8.3 Attorneys' Fees: If it is necessary for either the Buyer or Seller to
employ an attorney to enforce its rights pursuant to this Contract because of
the default of the other party, the defaulting party shall reimburse the
nondefaulting party for reasonable attorneys' fees incurred at trial or on
appeal.
ARTICLE IX
Brokerage Commission
Buyer represents to Seller that Buyer has not engaged the services of a
broker, nor is any commission or fee due from Buyer on account of the sale of
the Property. Seller represents to Buyer that Seller has listed the property
with ReMax, with the specification that Buyer is an excluded party and not
subject to any brokerage commission or fee due from Seller on account of the
sale of the Property. Each party agrees to indemnify the other party and to
hold the other party harmless from any loss, liability, damage, cost or expense
(including, without limitation reasonable attorneys' fees incurred in
negotiation, at trial or on appeal) paid or incurred by reason of any said
breach of the representation made in this Article.
ARTICLE X
Miscellaneous
10.1 Notices: All notices, demands, requests and other communications
required or permitted hereunder Shall be in writing, and shall be deemed to be
delivered and received upon the earlier or occur of actual receipt, or
regardless of whether actually received (except where receipt is specified in
this Contract), deposited in a regularly maintained receptacle for the United
States mail, registered or certified, return receipt requested, postage fully
prepaid, addressed to the address as such party may have specified theretofore
by notice delivered in accordance with this Article and actually received by
the addressee:
As to SELLER: N. Xxxxxx Xxxxxxxxx
000 Xxx Xxxxxx Xxxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
As to BUYER: Xxxxxx Xxxxxxx, Chairman
Islands Bancorp
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
10.2 Section 1031 Exchange: Buyer acknowledges and agrees that Seller
intends to sell the subject property pursuant to Section 1031 of the U.S.
Internal Revenue Service Code and agrees to cooperate with Seller in meeting
the requirements of such tax deferred sale and exchange.
10.3 Integration; Modification; Waiver: This Contract constitutes the
complete and final expression of the agreement of the parties relating to the
Property, and supersedes all previous contracts, agreements, and understandings
of the parties, either oral or written, relating to the Property. This Contract
cannot be modified except by an instrument in writing (referring specifically
to this Contract) executed by the party against whom enforcement of the
modification is sought.
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10.4 Counterpart; Execution: This Contract may be executed in several
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.
10.5 Headings; Construction: The headings which have been used throughout
this contract have been inserted for convenience of reference only and do not
constitute matter to be construed in interpreting this Contract. Words of any
gender used in this Contract shall be construed to include any other gender and
words in the singular number shall be held to include the plural; and vice
versa, unless the context requires otherwise. The words "herein", "hereunder",
and other similar compounds of the word "here" when used in this Contract refer
to the entire Contract and not to any particular provision or section. If the
last day of any time period stated herein shall fall on a Saturday, Sunday,
legal or banking holiday, then the duration of such time period shall be
extended so that it shall end on the next succeeding day which is not a
Saturday, Sunday, legal or banking holiday. The term "business day" shall mean
any day other than a Saturday, Sunday, legal or banking holiday.
10.6 Invalid Provision: If any one or more of the provisions of this
Contract, or the applicability of any such provision to a specified situation,
shall be held invalid or unenforceable, such provision shall be modified to the
minimum extent necessary to make it or its application valid and enforceable,
and the validity and enforceability of all other provisions of this Contract
and all other applications of any such provision shall not be affected thereby.
10.7 Further Acts. In Addition to the acts recited in this Contract to be
performed by Seller arid Buyer, Seller and Buyer agree to perform at the
Closing or after the Closing any and all such further acts as may be reasonably
necessary to consummate the transactions contemplated hereby.
10.8 Date of Contract: The date of this Contract shall for all purposes be
the date of the signature of the last of the parties to sign this Contract (the
"Execution Date").
10.9 Assignment of Contract: This Contract may not be assigned by either
party hereto without the prior written consent of the other party; provided,
however, that the parties hereto agree that this Contract may be assigned at
any time by Islands Bancorp to Islands Community Bank, N.A. (Proposed). Seller
may assign this contract to a qualified intermediary in connection with
discharging the requirements of IRS Section 1031.
10.10 Time for Acceptance: This offer shall expire on January 26, 2000 at
1:00 p.m. Eastern Standard Time.
10.11 Restriction of Use: Buyer agrees that Buyer or assigns shall not
operate a retail landscape or garden center upon the property subject to this
contract for a period of five (5) years from date hereof.
10.12 Approval by Federal Bankruptcy Court: Buyer and Seller acknowledge
that this agreement is subject to approval by Federal Bankruptcy Court. Seller
shall submit to Federal Bankruptcy Court and petition made for approval to the
Court within fifteen (15) days of the signing of this agreement with a copy of
petition to be provided to Seller.
EXECUTED BY BUYER ON: EXECUTED BY SELLER ON:
January 24, 2000 (Date) 1-24-00 (Date)
________________________________ __________________________
ISLANDS BANCORP XXXXXX XXXXXXXXX
By: /s/ D. Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxxxx
________________________________ __________________________
D. Xxxxxx Xxxxxxx, Chairman Xxxxxx Xxxxxxxxx
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