Exhibit 10.5
CONTRACT OF SALE
THIS CONTRACT OF SALE (this "Contract") is hereby entered into as of this
22nd day of July, 2005 (the "Effective Date"), by and between XXXXXXX ROAD
NEIGHBORHOODS, LLC, a Virginia limited liability company (the "Buyer"), and
XXXXXXX NEIGHBORHOODS, LLC, a Virginia limited liability company (the "Seller").
RECITALS:
R-1. Seller is the owner of certain real property identified as (i) County
GPIN 0000-00-0000 (containing approximately 87.7262 acres of land), (ii) County
GPIN 0000-00-0000 (containing approximately 58.6023 acres of land), (iii) County
GPIN 0000-00-0000 (containing approximately 36.9444 acres of land) and (iv)
County GPIN 0000-00-0000 (containing approximately 9.906 acres of land) located
in Prince Xxxxxxx County, Virginia (the "County"), (said real property, together
with all improvements and fixtures thereon and all rights, privileges,
easements, benefits and agreements appurtenant thereto, including any right,
title or interest in any street frontage or previously dedicated street area, is
hereinafter referred to as the "Property").
R-2. Seller desires to sell the Property to Buyer, and Buyer desires to
purchase the Property from Seller, in accordance with the terms and conditions
hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and of the promises
hereinafter set forth, the parties agree as follows:
1. Bargain and Sale. Seller hereby promises and agrees to sell the Property
to Buyer, and Buyer hereby promises and agrees to purchase the Property from
Seller, in accordance with the provisions of this Contract.
2. Deposit. Within five (5) business days of the Effective Date, Buyer
shall deliver to Seller a deposit in the amount of One Million Dollars
($1,000,000.00), by good check or wire transfer (the "Deposit"). Seller and
Buyer hereby agree as follows with respect to the Deposit:
(a) Should Buyer refuse to Close hereunder or in the event of any breach or
default by Buyer under the terms of this Contract (which breach or default is
not remedied or cured by
Buyer pursuant to any other provisions hereof), Seller's sole and exclusive
right and remedy shall be to retain the Deposit as full fixed and liquidated
damages, and not as a penalty; it being the agreement of the parties that Buyer
shall have no liability or obligation for default hereunder except to the extent
of the Deposit made herein and in no event shall Buyer's liability or
responsibility for any breach or default hereunder exceed the Deposit, and in no
event shall Seller be entitled to specific performance of this Contract.
(b) Buyer and Seller hereby expressly understand and agree that the Deposit
may be pledged as collateral by Seller or otherwise used by Seller during the
term of this Contract, in whole or in part, in any manner and for any purpose
whatsoever; provided, however, that such use shall not affect the obligation of
Seller to return the Deposit to Buyer in the event of Seller's default in
accordance with the provisions of this Contract.
3. Purchase Price; Payment. The purchase price for the Property (the
"Purchase Price") shall be the sum of Thirty-Two Million Three Hundred Nineteen
Thousand Seven Hundred Fifty-seven and 02/100 Dollars ($32,319,757.02), plus:
(a) any and all interest and other carrying costs paid by Seller under (i) that
certain $5,131,990 Purchase Money Deed of Trust Term Note dated January 20, 2005
from Seller, as Borrower, to Xxxxxxxx X. Xxxxxxx, Xxxxx Xxxx Xxxxxxx White, Xxxx
Xxxx Xxxxxxx and H. Xxxxxx Xxxxxxx, as Lender, (ii) that certain $20,345,348
Purchase Money Deed of Trust Term Note dated January 20, 2005 from Seller, as
Borrower, to The Xxxxxxx Family Limited Partnership, RLLP, as Lender; and (iii)
that certain $1,377,661.50 Purchase Money Deed of Trust Term Note dated January
20, 2005 from Seller, as Borrower, to Xxxxxx X. Xxxxxxx and Xxxxxxx Xxxxxxx, (b)
any and all engineering and due diligence costs incurred by Seller with respect
to the Property until Closing hereunder, and (c) any and all fees (including,
but not limited to, attorneys' fees), costs, assessments, expenses, pre-paid
expenses and obligations, and accrued expenses incurred by Seller in connection
with the Property, including, without limitation, the rezoning thereof. The
Purchase Price shall be payable by Buyer in cash or by certified or bank
cashier's check or wire transfer of funds at Closing. The Deposit shall be
applied to the Purchase Price at Closing.
4. Rezoning. Seller shall pursue a rezoning of the Property to a zoning
category that will allow Buyer to develop a residential community on the
Property in accordance with
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development plans and subject to such conditions and proffers as are mutually
acceptable to Seller and Buyer (the "Rezoning").
Buyer and Seller expressly acknowledge that Seller's obtaining final
approval of the Rezoning is a condition precedent to Buyer's obligation to
proceed to Closing. For purposes of this Contract, Seller shall be deemed to
have obtained final approval of the Rezoning when the Rezoning has been approved
by all necessary and appropriate governmental authorities of the County, and all
applicable appeal periods have expired without an appeal having been filed or
(if an appeal is filed) the entry of a final decree by a court of competent
jurisdiction upholding the Rezoning approval and the expiration of all
applicable appeal periods without an appeal of such decree having been filed.
In the event that (a) Seller has not obtained final approval of the
Rezoning on or before the Outside Closing Date (as defined below), or (b) Buyer,
at any time during the Rezoning process determines, in its sole discretion, that
Seller will not be able to obtain final approval of the Rezoning, then Buyer may
either (i) terminate this Contract by delivering written notice to Seller, in
which event the Deposit shall be returned to Buyer and the parties shall have no
further rights or obligations under this Contract, or (ii) waive such condition
and proceed under this Contract.
5. Closing Date. Provided that all conditions precedent to Buyer's
obligation to settle under this Contract (The "Closing") have been satisfied (or
waived by Buyer, in its sole discretion), Closing shall occur on or before
thirty (30) days after the Rezoning (the "Closing Date"), but in no event later
than July 20, 2006 (the "Outside Closing Date"). Buyer shall have the right to
close earlier than the Closing Date by giving Seller at least thirty (30) days
prior written notice of such earlier date. Notwithstanding the foregoing, in the
event that any of the conditions identified in Paragraph 4 above have not been
satisfied in Buyer's sole discretion on or before the Outside Closing Date, then
Buyer may extend the Outside Closing Date for three (3) consecutive extension
periods of one (1) month each by delivering written notice of each such
extension to Seller on or before the then-applicable Outside Closing Date.
Closing shall be held at the offices of Excel Title Corporation or another
settlement agent in the northern Virginia area selected by Buyer.
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6. Conveyance. The Property is to be conveyed by Special Warranty Deed (the
"Deed") to Buyer or to such person or entity as Buyer may designate in writing,
prior to or at Closing to take title to the Property. Possession of the Property
shall be delivered from Seller to Buyer at Closing, free of any tenancies or
other possessory rights whatsoever other than those matters that are permitted
pursuant to Paragraph 9 hereof.
7. Expenses. Buyer shall pay the cost of (i) the preparation of the Deed,
(ii) obtaining releases of all monetary liens encumbering the Property, (iii)
the Virginia Grantor's Tax, (iv) all expenses of examination of title, (v)
survey costs, (vi) all reasonable fees and expenses of the party conducting
Closing, (vii) the title insurance premium, (viii) Buyer's attorneys' fees, and
(ix) all recording fees.
8. Adjustments and Taxes. Any and all rents, water, utility charges, and
real estate taxes shall be paid by Buyer on the Closing Date. Special
assessments against the Property for public improvements authorized, pending or
completed prior to the Closing, whether assessment therefor has been levied or
not, and whether payable in one lump sum or in installments, shall be paid in
full by Buyer at Closing or due allowance shall be made therefor.
9. Title. At Closing, title to the Property is to be good of record and in
fact, fully marketable and insurable by a recognized title insurance company of
Buyer's selection, authorized to do business in the Commonwealth of Virginia at
regular rates without exception, except for (i) those matters shown on that
certain title commitment No. H0400169JL issued by Xxxxxxx Title Guaranty Company
(a copy of which is attached hereto as Exhibit A), (ii) those matters affecting
title as are agreed upon by Seller and Buyer in connection with the Rezoning,
and (iii) such other matters which Buyer determines, in its sole discretion,
would not prevent, materially impair or materially increase the cost of Buyer's
intended development and construction on the Property. Buyer agrees to obtain at
its cost a title report or title commitment covering the Property prior to
Closing (the "Title Commitment") to confirm the foregoing.
10. Representations and Warranties of Seller. Seller warrants and
represents to Buyer as follows:
A. Seller is a limited liability company duly organized, validly existing
and in good standing under the laws of the Commonwealth of Virginia.
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B. Seller has the power and authority to enter into this Contract and to
consummate the transaction contemplated herein.
C. Seller has not received any actual notice of any legal actions, suits or
other legal or administrative proceedings pending or threatened against Seller
or the Property which might adversely affect Seller's ability to consummate the
transaction.
If any of the foregoing representations and warranties is not true in any
material respect on the Closing Date, then Buyer, at its option, may either (i)
terminate this Contract by delivering written notice to Seller by the Closing
Date, in which event the Deposit shall be returned to Buyer and the parties
shall have no further rights or obligations under this Contract, or (ii) proceed
to Closing hereunder.
11. Representations and Warranties of Buyer. Buyer warrants and represents
to Seller as follows:
A. Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Virginia.
B. Buyer has the power to enter into this Contract and to consummate
the transaction contemplated herein.
C. Buyer has not received any actual notice of any legal actions,
suits, or other legal or administrative proceedings pending or threatened
against Buyer which might adversely affect Buyer's ability to consummate
the transaction.
If any of the foregoing representations and warranties of Buyer is not true
and correct in any material respect on the Closing Date, then Seller, at its
option, may either (i) terminate this Contract by delivering written notice to
Buyer by the Closing Date and the parties shall have no further rights or
obligations under this Contract, or (ii) proceed to Closing hereunder.
12. Buyer's Default; Seller's Remedy. In the event that all of the
conditions precedent to Buyer's obligations under this Contract have been
satisfied or waived and Seller performs all of Seller's obligations hereunder
and Buyer fails to close on the Property or otherwise defaults under this
Contract, and fails to cure such default within five (5) days after receipt by
Buyer of written notice of such default, in which event the Deposit shall be
retained by Seller as liquidated damages, as Seller's sole and exclusive remedy,
and the parties shall have no further rights or obligations under this Contract.
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13. Seller's Default; Buyer's Remedies. In the event that Buyer performs
all of its obligations hereunder and Seller fails to close on the Property or
otherwise defaults under this Contract, and fails to cure such default within
five (5) days after receipt by Seller of written notice of such default, then
Buyer shall be entitled to (i) terminate this Contract by delivery of written
notice to Seller in which event the Deposit shall be returned to Buyer, or (ii)
seek to obtain specific performance of Seller's obligations hereunder.
14. Parties Bound. This Contract shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, personal
representatives, successors and assigns.
15. Commission. Seller and Buyer warrant to each other that neither has
dealt with nor been represented by any agent, consultant, broker or finder in
this transaction, and that no commission or other fee is contemplated with
respect to this transaction. Seller and Buyer hereby agree to indemnify, defend
and hold each other harmless of and from any claim by any party that a
commission or other fee is due and owing to such party in connection with this
sale transaction as a result of the act or failure to act of the indemnifying
party. The provisions of this Paragraph 15 shall survive Closing and shall not
be merged into the Deed.
16. Applicable Law. This Contract shall be construed in accordance with the
laws of the Commonwealth of Virginia.
17. Total Agreement. This Contract (including all exhibits hereto) contains
the full and final agreement between the parties hereto with respect to the sale
and purchase of the Property. Buyer and Seller shall not be bound by any terms,
conditions, statements, warranties or representations, oral or written, not
contained herein. No change or modification of this Contract shall be valid
unless the same is in writing and is signed by the parties hereto. No waiver of
any of the provisions of this Contract shall be valid unless the same is in
writing and is signed by the party against which it is sought to be enforced.
18. Assignment. Buyer may assign this Contract in whole or in part without
the prior consent of Seller. Upon any such assignment and the assumption by the
assignee of Buyer's obligations hereunder, Buyer shall have no further
obligations or liabilities hereunder.
19. Time. Time is of the essence with respect to all matters set forth in
this Contract.
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20. Risk of Loss. The risk of loss for damage to the Property or any
improvements or fixtures located thereon by fire or other casualty is hereby
assumed by Seller until the Closing hereunder and recordation of the Deed
covering the Property.
21. Condemnation. Seller agrees to give Buyer prompt notice of any actual
or threatened taking of all or any portion of the Property by condemnation or
eminent domain prior to the Closing Date hereunder. In the event that prior to
Closing hereunder there shall occur a taking by condemnation or eminent domain
of all or any portion of the Property or a proposed conveyance to a condemning
authority in lieu of condemnation, then Buyer, at its option, may either (i)
terminate this Contract by delivery of written notice to Seller in which event
the Deposit shall be returned to Buyer, and thereupon the parties hereto shall
have no further rights or obligations hereunder, or (ii) proceed to Closing
hereunder, in which event Seller shall assign to Buyer at Closing all interest
of Seller in and to any condemnation proceeds payable to Seller in connection
with the condemnation and thereupon Buyer shall control all negotiations with
the condemning authority. Buyer shall receive a credit against the Purchase
Price at Closing for the amount of any condemnation proceeds received by Seller
prior to Closing.
22. Headings. The paragraph headings contained in this Contract are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Contract.
23. Weekends and Holidays. Any date specified in this Contract for the
performance of an obligation or expiration of a time period which is a Saturday,
Sunday or a legal holiday shall be extended to the first regular business day
after such date which is not a Saturday, Sunday or legal holiday.
24. Counterpart Originals. This Contract may be executed in multiple
original counterparts, each of which shall be an original, but all of which
shall constitute one and the same Contract.
25. Attorneys' Fees. In the event that any party is required to resort to
litigation to enforce its rights under this Contract, Seller and Buyer agree
that any judgment awarded to the prevailing party shall include all litigation
expenses of the prevailing party, including (without limitation) actual
attorneys' fees and court costs.
26. Non-Merger. The provisions of this Contract shall survive Closing and
shall not be deemed to have merged into the Deed covering the Property.
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IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed effective as of the later of the dates of execution set forth below or
the later of the date of any handwritten changes initialed by both parties, as
the case may be, which later date shall be the effective date hereof and shall
be inserted on page 1 of this Contract.
[SIGNATURES ON FOLLOWING PAGE]
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BUYER:
XXXXXXX ROAD NEIGHBORHOODS, LLC
By:
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Date Name:
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Title:
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SELLER:
XXXXXXX NEIGHBORHOODS, LLC
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Date
By:
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Name:
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Title:
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EXHIBIT "A"
