AGREEMENT
MADE this day ____ of _____________, 1999, by and between
SEVEN FIELDS DEVELOPMENT COMPANY, a Pennsylvania Business
Trust having its principal place of business at 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxx (hereinafter referred to as
the "Seller"), and XXXXX HOLDINGS, INC., having its principal
place of business at 000 Xxxxx Xxxxx, XXXX Xxxx, X'Xxxx
Xxxxxxxx, Xxxxxxxxxxxx (hereinafter referred to as the
"Purchaser").
WHEREAS, Seller is the Developer of a 500+ acre mixed use real
estate development in the Borough of Seven Fields,
Pennsylvania, and operates a residential construction company
under the fictitious name "Hawthorne Construction Company,"
which builds residential dwelling units in Xxxxxx and
Allegheny Counties, Pennsylvania;
WHEREAS, Seller is entering the final stages of its Seven
Fields Development and desires to arrange for the sale of all
remaining residential lots and its construction company after
the development reaches a certain point;
WHEREAS, Purchaser has acted as the Seller's exclusive
residential real estate sales agent at the Seven Fields
Development for a number of years and is therefore familiar
with the residential real estate market in the Seven Fields
area;
WHEREAS, Purchaser is willing to agree to purchase at one time
all residential lots and certain other assets owned by Seller
at a time and at a price to be determined in accordance with
the following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
TRANSFER OF ASSETS
1.1 TRANSFERRED ASSETS. Subject to the terms and conditions
set forth in this Agreement, Seller agrees to sell, transfer
and assign to Purchaser, and Purchaser agrees to purchase from
the Seller, all of the Seller's right, title and interest in
and to the following Assets:
(a) RESIDENTIAL LOTS. All residential lots owned by Seller
on the Closing Date, as hereinafter defined, located in the
following subdivisions:
SEVEN FIELDS: NEVILLEWOOD:
Xxxxx Xxxxx Xxxxxxx X Xxx Xxxx
Xxxxx Xxxxx Xxxxxxx 00 Xxxxxxxxxx
Xxxxx Xxxxx Xxxxxxx III English Turn
Castle Creek 11
Castle Creek III
Hawthorne Commons
The lots to be sold hereunder shall be listed on a schedule to
be provided to Purchaser at least sixty (60) days prior to the
Closing Date and shall be updated as of the Closing Date.
(b) CONSTRUCTION-IN-PROCESS. All construction-in-process on
any lot within subparagraph (a) above, as of the Closing Date,
including, but not limited to, completed (but not subject to a
contract for sale) and uncompleted houses and dwelling units,
building foundations, driveways, and any other completed or
uncompleted improvements or portions thereof which have been
placed or constructed within the boundaries of a lot. The
construction-in-process to be sold hereunder shall be
described on a schedule to be provided to Purchaser sixty days
(60) prior to the Closing Date and updated on the Closing
Date .
(c) CONTRACTS FOR THE SALE OF RESIDENTIAL DWELLINGS. Any
contracts for the sale of residential dwelling units, the
construction of which is not completed by the Closing Date,
shall be assigned to the Purchaser at the Closing along with
any deposits held by Seller in connection therewith. A
schedule of all such contracts of sale which are expected to
be assigned hereunder shall be listed on a schedule to be
provided to Purchaser sixty (60) days prior to the Closing
Date and updated on the Closing Date.
A residential dwelling shall be deemed completed, for purposes
of this Agreement, only upon the issuance of an occupancy
permit.
(d) INVENTORY. All building materials, appliances, parts and
supplies, equipment, vehicles, computers, office furniture,
office supplies, and furnishings owned by Seller on the
Closing Date. A schedule equipment, vehicles, computers, office
furniture and furnishings shall be provided to Purchaser sixty
days prior to the Closing Date and of the other inventory at
least five (5) days prior to Closing Date, and all shall be
updated on the Closing Date.
(e) HAWTHORNE CONSTRUCTION COMPANY. All tangible and
intangible assets of Hawthorne Construction Company which are
not included in subparagraphs (b) and (c) above, including,
but not limited to, the fictitious name "Hawthorne
Construction Company," any engineering drawings, building
designs, standard practices and specifications, methods of
construction, and plans and blue prints developed by, or on
behalf of, Hawthorne Construction Company.
(f) LEASEHOLD INTEREST. The unexpired term as of the Closing
Date, of Seller's leasehold interest in the second floor of
the office building located at 0000 Xxxxxx Xxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxxxx, in which Seller maintains its offices,
and any other portions of the building covered by the lease.
If the Seller has not entered into a lease agreement for the
second floor office space as of the Closing Date, which lease
agreement is under the terms and conditions of the attached
lease Exhibit A, then this provision will be null and void and
any allocation of price shall be deleted, with no change to
any other term of this Agreement.
(g) CERTAIN OTHER INTANGIBLE ASSETS. Certain intangible assets
not heretofore mentioned which are owned by Seller, including
contract rights, customer lists, telephone numbers if
requested by Purchaser, books and records, etc., which shall
be listed on a schedule to be provided to Purchaser at least
sixty (60) days before the Closing Date, and shall be updated
as of the Closing Date.
(h) GOVERNMENTAL APPROVALS. All governmental approvals, zoning
and environmental permits, building and occupancy permits,
etc., to the extent assignable without cost to the Seller. If
Seller refuses to pay any fee, cost, or other charge necessary
for the transfer of any permit or other governmental approval,
then Purchaser may make any such payments. A list of the
foregoing shall be provided to Purchaser at least sixty (60)
days prior to the Closing Date and updated on the Closing
Date.
(i) SEVEN FIELDS SALES CENTER. The building and lot located at
000 Xxxxx Xxxxxx Xxxxxxxxx being used as the Seven Fields
Sales Center shall be sold to Purchaser at the Closing in
accordance with the terms and conditions hereinafter set
forth.
(j) THE XXXXXXXX PROPERTY. The Cranberry Township property
owned by the Seller consisting of 40.3 acres more or less and
known as the Xxxxxxxx Property shall sold to Purchaser at the
Closing for the price hereinafter set forth. A description of
the Xxxxxxxx Property is appended hereto as Exhibit B.
(k) INSURANCE POLICIES. At Purchaser's election, all policies
of insurance held by Seller which are assignable shall be
assigned to Purchaser at the Closing.
(l) SUBCONTRACTS. All assignable subcontracts relating to the
construction-in-process described in subparagraph 1.1(b)
above. A list of such subcontracts shall be provided by
Purchaser at least thirty (30) days prior to the Closing Date
and shall be updated on the Closing Date.
1.2 EXCLUDED ASSETS. The Assets to be sold and/or otherwise
transferred under this Agreement shall not include any of the
following:
(a) COMPLETED RESIDENTIAL DWELLINGS UNDER CONTRACT. Any
completed residential dwelling unit which is the subject of an
open agreement of sale entered into by the Seller prior to the
Closing Date and any proceeds or payments due or to become due
thereunder, other than any contract of sale specifically
listed on the schedule to be provided to the Purchaser under
paragraph 1.1(c) hereof. A list of such completed (and, those
expected to be completed by the Closing Date) residential
dwellings shall be provided by Purchaser at least thirty (30)
days prior to the Closing Date and shall be updated on the
Closing Date.
(b) CASH, RECEIVABLES, CREDITS AND INVESTMENTS. All cash,
accounts receivable, deposits, bonds, prepaid expenses,
insurance policies, bank accounts, investments, and credits
owned or held by, or shown on the books of, Seller as of the
Closing Date.
(c) BUSINESS TRUST OWNERSHIP INSTRUMENTS. All ownership or
debt instruments, all minute books and stock records and all
ownership records.
(d) ASSETS NOT INCLUDED IN PARAGRAPH 1.1 . Any real estate or
pers onal property or rights therein, which are not
specifically mentioned in paragraph 1.1 of this Agreement,
along with all rights therein, are Excluded Assets and shall
not be sold or transferred to Purchaser under this Agreement,
Purchaser shall have no obligation of any nature whatsoever
with respect to any Excluded Asset. Seller shall be solely
responsible for the proper completion of any work or warranty
work required under any contract of sale which is not a
Transferred Asset hereunder.
1.3 ASSUMED LIABILITIES. After the Closing, Purchaser shall be
responsible to the Borough of Seven Fields to discharge all of
the Seller's remaining obligations which are related to any
lots to be sold hereunder, including, but not limited to,
installation of final road surfaces, removal of sedimentation
ponds, etc., Purchaser shall indemnify and hold Seller
harmless from performance of any such obligations after the
Closing, and shall replace any bonds or other security which
Seller has posted in connection with such obligations. Upon
execution hereof, Seller shall furnish the Purchaser with a
schedule of all of Seller's current outstanding obligations to
the Borough of Seven Fields for illustrative purposes. At
least sixty (60) days prior to the Closing Date, Seller will
provide a list of the Assumed Liabilities and shall update the
list from time to time until the Closing Date.
1.4 PURCHASE PRICE. As consideration for the Assets to be sold
and transferred hereunder, Purchaser agrees, subject to the
terms and conditions set forth in this Agreement, to pay to
the Seller at the Closing the following:
Consideration for the lots to be sold and transferred
hereunder is based upon the following percentages of the
Standard Asking Price as of the Closing Date as follows:
Location 68% First 59% Next
Seven Fields plans:
North Ridge Estates, I, II and III 30 lots 30 lots
Castle Creek II and III 15 lots 15 lots
Hawthorne Commons 18 lots 18 lots
Any additional lots in the foregoing plans are priced at 50%
of the Standard Asking Price as of the Closing Date.
Nevillewood lots are priced at Seller's cost shown on Seller's
books and records.
(b) CONSTRUCTION-IN-PROCESS-DWELLINGS. Purchaser shall pay to
Seller at the Closing for Construction-in-Process of
dwellings an amount equal to the total cost of
Construction-in-Process which Seller paid, incurred or
allocated prior to the Closing Date in connection with
construction activities on any of the lots sold hereunder as
reflected on Seller's books and records. The items of cost
which Seller may include in the calculation of cost of
Construction-in-Process are listed on the schedule attached
here to as Exhibit "C."
The cost of Construction-in-Process which Purchaser shall be
obligated to pay for any one dwelling unit under construction
shall not exceed the amount, when added to the estimated cost
of completion as of the Closing Date, which equals the selling
price for the dwelling unit in question less sales costs.
The estimated cost of completion of a dwelling unit shall be
determined by agreement of the parties, and failing such
agreement, by arbitration in accordance with the provisions of
paragraph 5.2 hereof.
(c) INVENTORY, EQUIPMENT AND FURNISHINGS. Purchaser shall pay
to Seller at the Closing, for all inventory, equipment,
supplies, and furnishings sold hereunder, an amount equal to
the total book value therefor as shown on Seller's books and
records as of the Closing Date. "Book value" is the original
cost of the item, less depreciation to the Closing Date for
items other than inventory. For inventory, book value is the
cost of merchantable inventory items.
(d) LEASEHOLD INTEREST. Purchaser shall pay to Seller at the
Closing for the assignment of the unexpired lease term on the
lease for Seller's offices, an amount equal to a pro rata
share of the prepaid rent previously paid by Seller, prorated
over the lease term.
(e) THE SEVEN FIELDS SALES CENTER. The Purchaser shall pay to
the Seller at the Closing the sum of Four Hundred Twenty Five
Thousand ($425,000.00) Dollars for the Seven Fields Sales
Center.
(f) THE XXXXXXXX PROPERTY. The Purchaser shall pay to the
Seller at the Closing the sum of Five Hundred Eighty Thousand
($580,000.00) Dollars for the Xxxxxxxx Property.
(g) INSURANCE POLICIES. For any insurance policy assigned to
Purchaser hereunder, Purchaser shall pay to Seller the prepaid
premium prorated for the remaining unexpired term.
(h) OTHER TRANSFERRED ASSETS. All other Assets to be
transferred at the Closing under paragraph 1.1 hereof, shall
be transferred for no additional consideration.
1.5 LIMITATIONS ON CONSTRUCTION-IN-PROCESS OF SPEC HOUSES.
Seller shall use its best efforts to ensure that at the time
of Closing, there shall be at least twelve (12) and no more
than twenty-five (25) dwelling units under construction at
Seven Fields, and at least four (4) but not more than ten (10)
dwelling units under construction at Nevillewood which, as of
the Closing Date, are not under contract with a purchaser.
1.6 XXXXXXX MONEY DEPOSIT. Purchaser shall deposit an Xxxxxxx
Xxxx y Deposit in the amount of Four Hundred Thousand
($400,000.00) Dollars to be held in escrow by Seller's
counsel, Xxxxxxx X. Xxxxxxx, Esq. ("Picadio"), (who shall be
the Drawee) during the pendency of this Agreement, or shall
provide a bank letter of credit in the amount of Four Hundred
Thousand ($400,000.00) Dollars in a form reasonably acceptable
to Seller's counsel. If the Seller claims there is an event
entitling Seller to liquidated damages, Notice shall be given
Purchaser. Purchaser, within 10 days of receipt of such
Notice, may give Notice to Seller and Picadio that Purchaser
disputes the Seller's claim, in which case Seller shall not
draw upon the letter of credit unless any of the following
occur:
(a) The letter of credit is due to expire and the Purchaser
has not provided for a renewal or extension of the letter of
credit;
(b) A judgment or decree, final and unappealable, has been
entered in a court having jurisdiction, which judgment or
decree awards the liquidated damages to Seller.
If the letter of credit is drawn upon due to Seller asserting
a right to liquidated damages and Purchaser disputes Seller is
entitled to liquidated damages, Picadio shall hold the funds
and invest them into an interest bearing account pending the
parties' instructions or a final, unappealable order of any
court relating to the same.
1.7 SELLER'S STANDARD ASKING PRICE FOR LOTS. The Seller's
Standard Asking Price for Lots contained in the various
subdivisions listed in paragraph 1.1(a) hereof are set forth
on Exhibit "D" attached hereto. Seller shall not increase or
decrease its Standard Asking Price for any lot without the
Purchaser's written consent.
1.8 TIME AND PLACE OF CLOSING. The Closing shall be held on
January 2, 2001, beginning 10:00 A.M. unless Seller gives at
least sixty days Notice of an earlier Closing Date. The
Closing will take place in Seller's Offices unless otherwise
required by Buyer, in which case Buyer shall determine the
place of Closing. Time shall be of the essence with respect to
the Closing Date.
1.9 PRELIMINARY ESTIMATE OF PURCHASE PRICE. Thirty (30) days
prior to the Closing Date Seller shall provide Purchaser with
a written preliminary listing of the Assets to be sold
hereunder along with an estimate of the Purchase Price which
shall be due at the Closing. The final list of Assets to be
sold hereunder and the final amount to be paid at Closing will
be adjusted at Closing. The parties will cooperate with one
another so that at Closing, the final list will be approved by
both parties.
1.10 CONTINUED OPERATION OF BUSINESS. Seller shall continue to
operate in the ordinary course of its business until the
Closing.
1.11 PROCEDURE PRIOR TO AND AT THE CLOSING.
Not less than five (5) days prior to Closing, Seller shall
provide to Purchaser or Purchaser's representative, copies of
all deeds and the xxxx of sale proposed for delivery at
closing. Such shall be in a form reasonably acceptable to
Purchaser and as required under the terms of this Agreement.
At the Closing, the following actions will be taken by the
parties and the completion of each action shall be a further
condition to the Closing:
(a) SELLER'S OBLIGATIONS
(i) Delivery of a Special Warranty Deed(s) for all real
property to be transferred at the closing by good and
marketable title, insurable by any reputable title company
subject only to those easements and exceptions for utilities,
roads and the like which are either on the recorded plan or do
not affect the use or value of the lot for the construction of
residential housing;
(ii) Delivery of a Quit Claim Deed for the Seller's mineral
rights, if any;
(iii) Delivery of a Non-Foreign Affidavit;
(iv) Delivery of a Xxxx of Sale for all inventory, equipment,
supplies and furnishings to be transferred at the Closing;
(v) Assignment of Leasehold Interest;
(vi) Assignment of Contracts of Sale of residential dwelling
units as called for under this Agreement;
(vii) Assignments of Seller's plans, designs, permits and
approvals;
(viii) Delivery of a Current Certificate of Good Standing from
the Pennsylvania Department of State; current Corporate Lien
Certificate from the Pennsylvania Department of Revenue;
Corporate Resolution; and Incumbency Certificate; or similar
documents and certificates applicable to a Pennsylvania
Business Trust;
(ix) Delivery of Municipal Lien Letters;
(x) Delivery of Paid real estate tax receipts;
(xi) Delivery of All mortgage satisfaction pieces and any other
instruments necessary to satisfy or release any security
interest in the Property being transferred;
(xii) Assignment to Purchaser or Purchaser's designee of all
rights in and to the fictitious name: "Hawthorne Construction
Company" if Purchaser elects;
(xiii) Delivery of a Corporate Tax Clearance Certificate
pursuant to 69 P.S. 529, or such other requirement as may
reasonably be required by the title insurance company selected
by the Purchaser to eliminate any exception related to this
issue;
(xiv) Any affidavits or other documents reasonably required by
Purchaser's attorney or title insurance company;
(xv) Delivery of a UCC search report from the Secretary of
State of the Commonwealth of Pennsylvania and from the
counties in which the Transferred Assets are located and each
county in which the Seller does business, showing that there
are no liens or encumbrances against any of the Transferred
Assets that will not either be paid or credited at Closing.
(xvi) Delivery of an affidavit that no liens or encumbrances
exist on any of the property sold hereunder;
(xvii) If required by the organization financing the
transaction, an opinion from counsel for the Seller that (1)
the Seller has all requisite power and authority to execute
the Agreement and to deliver the deeds and other documents
relating to the Assets to be Transferred and otherwise
consummate the sale; (2) that the Agreement, xxxxx, xxxx of
sale and all other documents relating to the Assets to be
transferred have been executed by the proper representatives
of the Seller who were properly authorized; (3) That counsel
is not aware of any representation or warranty of Seller that
is not materially true in all respects; and, (4) that counsel
is not aware of any legal actions instituted or threatened
which would affect the Transferred Assets or the ability of
the Seller to transfer such assets;
(xviii) Delivery of an incumbency certificate;
(xix) Delivery of certified copies of all resolutions or other
documents reflecting that Seller is authorized to enter into
this Agreement and to consummate it;
(xx) Delivery of a certificate of good standing that Seller is
in good standing as a Business Trust within the Commonwealth
of Pennsylvania;
(xxi) Purchaser's security deposit or letter of credit shall
be returned or credited to the Purchase Price;
(xxii) Seller shall execute and deliver to Purchaser any
other agreements or instruments, in form reasonably acceptable
to Purchaser's counsel, the title company issuing insurance on
t he Transferred Assets or the institution financing the
Transferred Assets or required to fulfill the obligations
undertaken in this Agreement
(xxiii) Seller shall deliver to Purchaser evidence that Seller
obtained a trailer by which it has provided for the extension
of any claims made liability insurance relating to
construction or development by Seller prior to the Closing.
(b) PURCHASER'S OBLIGATIONS. The Purchaser shall deliver to
the Seller at the closing the full amount of the Purchase
Price by cashier's check or wire transfer immediately
available funds, shall satisfy any closing requirements
imposed by Purchaser's title insurance company, and shall
execute and deliver to Seller any agreements or instruments,
in form reasonably acceptable to Seller's counsel, required to
fulfill the obligations undertaken in this Agreement.
1.12 ADJUSTMENTS AND PRORATIONS. The final list of Transferred
Assets and the total Purchase Price shall be determined at the
Closing. Any necessary adjustments which cannot feasibly be
made at or prior to the Closing shall be made as soon as
reasonably practicable following the Closing.
All real estate taxes shall be prorated to the date of Closing
based upon the year of tax accounting for each taxing body.
The parties shall share equally the realty transfer taxes
applicable to the sale of the real estate to be transferred
hereunder. Following the Closing, Seller and Purchaser shall
each have reasonable access to the other's books and records
for the purpose of making any necessary post-Closing
adjustments or preparing any necessary filings.
1.13 EXTRAORDINARY TRANSACTIONS NEEDING PURCHASER'S CONSENT.
From the date of execution of this Agreement until the
Closing, Seller, without the written consent of the Purchaser,
shall not:
(a) Dispose of any asset falling within any of the categories
of Transferred Assets set forth in paragraph 1.1 hereof, other
than in the ordinary course of Seller's business.
(b) Purchase any individual item of inventory or equipment for
a purchase price in excess of Ten Thousand ($10,000.00)
Dollars.
(c) Increase the total book value of inventory and equipment by
more than One Hundred Thousand ($100,000.00) Dollars.
(d) Acquire any inventory or equipment other than in the
ordinary course of business.
(e) Sell any lot for a price which is less than the Seller's
Standard Asking Price therefor as shown on Exhibit "D" hereto.
(f) Depart from the limitations on Construction-in-Process set
forth in paragraph 1.5 hereof.
(g) Make any material change in development, construction or
plans which affect the Transferred Assets.
In all other respects the Seller shall continue its normal
business operations until the Closing.
1.14 SELLER'S OBLIGATION TO DEVELOP LOTS. All residential lots
to be sold hereunder shall be developed by Seller in
accordance with the applicable subdivision and grading plans
approved by the Borough of Seven Fields. Sewage, water and
electrical utilities connections shall be made available by
Seller at the boundary of each lot to be sold hereunder.
Seller may contract with others to complete any such lot
development which may remain uncompleted on the Closing Date,
or, at Seller's election, may give Purchaser a credit at the
Closing in the amount of Seller's budgeted cost for any
uncompleted lot development. If the parties disagree as to the
amount of the credit due the Purchaser under this paragraph,
at Purchaser's election, Seller shall complete the work.
1.15 COMPLETION OF CONSTRUCTION-IN-PROCESS. Purchaser shall be
solely responsible for the completion of any residential
Construction-in-Process transferred hereunder and the lots as
set forth in Article 1.14 and shall indemnify and hold Seller
harmless from any and all claims relating thereto (excluding
lot development work by Seller) and including, but not limited
to, claims alleging defects in construction or construction
materials for any residential improvements completed by
Purchaser after the Closing without regard to whether the
alleged defect occurred prior to or after the Closing except
as otherwise provided hereunder or as may result from a breach
of a warranty by Seller. Purchaser agrees to fully indemnify
and hold Seller harmless from any such claims.
ARTICLE 11
CONDITIONS TO CLOSING
2.1 ENVIRONMENTAL ASSESSMENT. Prior to the execution hereof,
Seller provided Purchaser with a Phase I Environmental Site
Assessment Report dated September 1999 prepared by Earth Tech,
Inc., which covers the real property to be transferred
hereunder. Purchaser acknowledges that there is nothing in
such report which Purchaser considers material to the
transaction set forth in this Agreement. Purchaser, at its
own cost, may retain a consultant to conduct any additional
Environmental Assessment which it desires and may enter the
Property at any reasonable time for the purpose of conducting
any such additional Environmental Assessment. The Purchaser
shall remain liable to repair and restore any disturbances to
the Property caused by the Environmental Assessment.
If any additional Environmental Assessment which Purchaser
causes to be conducted identifies any material environmental
contamination of any of the real property to be transferred
hereunder which is not shown in the Phase I report provided by
Seller, then Purchaser may elect to terminate this Agreement.
Any such election to be effective must be in writing and must
be served on the Seller, along with a copy of the
environmental Assessment Report relied on, within one hundred
twenty (120) days after the date of this Agreement. Time
shall be of the essence with respect to the one hundred twenty
(120) day period.
This provision permitting termination of this Agreement if
Purchaser discovers a material environmental condition not
shown in the Phase I Environmental Assessment Report provided
by Seller, shall constitute Purchaser's sole and exclusive
remedy against the Seller for environmental contamination of
any real property to be transferred hereunder. If purchaser
fails to terminate this agreement in strict accordance with
this paragraph, it shall be obligated to close in accordance
with the terms and conditions of this Agreement unless Seller
is in default.
ARTICLE III
WARRANTIES AND REPRESENTATIONS
3.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents
and warrants to Purchaser as follows:
(a) VALIDLY EXISTING. Seller is a business trust validly
existing and presently subsisting under the laws of the
Commonwealth of Pennsylvania.
(b) NECESSARY AUTHORITY. Seller has the necessary corporate
power and authority to execute and deliver this Agreement and
to perform its obligations hereunder, including, but not
limi xxx to, executing the deeds and xxxx of sale and
assignment of the Lease.
(c) FORMAL ACTION. The execution and delivery of this
Agreement have been duly authorized by all necessary formal
actions of the Trustees of Seller.
(d) DUE EXECUTION. This Agreement has been duly executed and
delivered and constitutes the legal, valid and binding
obligations of the Seller and is enforceable against the
Seller in accordance with its terms.
(e) COMPLIANCE WITH BULK SALES LAWS. Seller shall comply with
any applicable bulk sales laws and shall indemnify Purchaser
against any and all liabilities, damages, costs, and expenses
incurred by Purchaser as a result of any claims that this
transaction violates or is subject to any bulk sales laws.
(f) PARTIES IN POSSESSION. There are no known parties with a
claim of adverse possession to the real property to be
conveyed hereunder and Seller has no notice of any such claim.
(g) MECHANICS' LIENS. At the Closing there will be no unpaid
bills for labor or materials furnished to Seller in connection
with the real estate to be conveyed hereunder that would
permit a mechanics' lien or materialmen's lien to be filed on
the Property. Seller shall obtain lien releases from all
contractors who would be entitled to file a lien if unpaid.
(h) CONDEMNATION. There is no pending or threatened
condemnation or similar proceeding affecting any real property
to be conveyed hereunder, or any portion thereof, nor has
Seller actual knowledge that any such action is presently
contemplated. Seller agrees to give Purchaser prompt notice of
any actual, threatened or contemplated condemnation of which
Seller receives notice between the date of this Agreement and
the Closing.
(i) NON-FOREIGN STATUS. Seller is not a "foreign person" as
defined under Section 1445(f) of the Internal Revenue Code;
and, at Closing, Seller shall furnish purchaser an affidavit
confirming the same in such form as Purchaser's attorney may
reasonably require.
(j) HAZARDOUS MATERIALS. Seller has no actual knowledge that
hazardous waste, hazardous substances or any other hazardous
materials have been stored or disposed of on any real property
to be conveyed hereunder, and it shall not knowingly cause or
permit storage or disposal of such hazardous materials after
the date of this Agreement and before the Closing. Seller has
received no notice of any kind related to the environmental
condition of any real property to be conveyed hereunder.
Seller has provided Purchaser with its most current Phase l
Environmental Site Assessment dated September 1999. Purchaser
understands and agrees that except as set forth in this
paragraph, Seller makes no express or implied warranties or
repr esentations as to environmental contamination or
liabilities, and that all real property transferred hereunder
is transferred AS IS.
(k) WETLANDS. Seller has no actual knowledge or notice that
the development of any real property to be conveyed hereunder
would violate any laws, regulations, ordinances, or orders
relating to wetlands protection.
(l) LEGAL PROCEEDINGS OR ENFORCEMENT ACTIONS. There is no
action, suit, proceeding, enforcement action, administrative
order, claim filed or threatened regarding or affecting the
Transferred Assets or the Seller which would affect the
Transferred Assets or the Purchaser's use or sale of same.
(m) COMPLIANCE WITH LAWS AND REGULATIONS. Seller has no actual
knowledge of any condition existing on or with respect to the
property which violates any restrictive covenant, or any
borough, county, state, or federal ordinance, regulation, or
stat ute in effect on the date of this Agreement.
(n) TRANSFER. The execution and delivery of this Agreement,
and the consummation of the transfers and conveyances called
for in this Agreement, are not in violation of the terms and
conditions of any mortgage, note, or other instrument to which
the Seller is now a party and will not result in any breach or
default thereunder.
(o) CONDITION OF PERSONAL PROPERTY. All equipment, vehicles,
furniture, and other personal property transferred hereunder
shall be in fair condition and working order, and to Seller's
knowledge is not subject to any major capital expenditure or
repair. All other inventory except plans, drawings and
designs, shall be new, undamaged and not obsolete. PURCHASER
UNDERSTANDS AND AGREES THAT, EXCEPT AS SET FORTH IN THIS
PARA GRAPH, ALL SUCH PERSONAL PROPERTY IS BEING SOLD,
TRANSFERRED, AND ASSIGNED, AS IS, WHERE IS, AND WITHOUT ANY
EXPR ESS OR IMPLIED WARRANTIES AS TO ITS CONDITION,
MERC HANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(p) EMPLOYEE BENEFIT PLANS. The Seller does not maintain any
employee benefit plan, bonus plan, health plan, or fringe
benefit plan for employees which will affect the purchaser.
(q) UNION CONTRACTS. The Seller is not party to any union
contract, collective bargaining agreement, or other labor
agreement. There are no labor disputes or controversies of
any kind between the Seller and the employees. The Seller has
complied with all laws relating to the employment of labor,
including provisions thereof relating to wages, hours, equal
opportunity, and collective bargaining. There are not amounts
due and owing to any employee of the Seller which are
currently due and payable and which have not been paid in full
or accrued.
(r) INSURANCE. The Seller maintains each of the insurance
policies set forth on Exhibit "E" attached to this Agreement.
The Seller has received no notice of cancellation or
termination of any such policies. The Seller has not received
notice that any insurance premiums will be materially
increased on the renewal thereof or that the insurance
policies will not otherwise be renewed on substantially the
same terms as are now in effect. If the Purchaser elects, the
Seller will assign to Purchaser all insurance policies listed
on Exhibit E which are assignable. Seller will continue to
maintain the insurance hereunder and in such amounts as would
be required to pay the replacement cost of any damage to the
Assets to be Transferred.
(s) CONTINUED OPERATION OF THE BUSINESS OF SELLER. The
operation of the business of the Seller has been and is being
cond ucted in accordance with all applicable rules,
regulations, ordinances and laws governing the business of
Seller and in the ordinary course. No investigations by any
governmental authority asserting or alleging any violation or
noncompliance with such laws are pending or, to the actual
know ledge of the Seller, threatened.
(t) PLANS AND SPECIFICATIONS. Seller warrants that it has
comp lied with all plans and specifications, for the
development of the lots being transferred and, with respect to
the buildings, with all plans, specifications and good
building practices.
(u) TITLE TO TRANSFERRED ASSETS. Seller warrants that it has
good and marketable title, free and clear of liens and
encumbrances, to the real, personal and intangible property
being transferred hereunder, except to the extent otherwise
provided under the terms of this Agreement.
(v) TAX RETURNS AND REGULATORY FILINGS. Seller warrants that it
has and, will to the date of the Closing, timely file all tax
returns and pay such taxes, to the extent that a failure to do
so would affect the Transferred Assets or Seller's ability to
transfer the Transferred Assets.
(w) ADVERSE DEVELOPMENTS. Seller warrants that there are no
adverse developments that materially affect the Transferred
Assets or the business of Seller as of the date of Closing.
All Representations and Warranties set forth above shall be
true as of the execution of this Agreement and as of the
Closing.
Seller shall be under a continuing obligation to promptly
notify Purchaser in writing of the occurrence of any event
which comes to Seller's attention between the date of this
Agreement and the Closing which, to the Seller's knowledge,
may, would, or could change or vary the state of any warranty
or representation made herein.
3.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller as follows:
(a) VALIDLY EXISTING. Purchaser is a corporation validly
existing and presently subsisting under the laws of the
Commonwealth of Pennsylvania.
(b) CORPORATE AUTHORITY. Purchaser has the necessary corporate
power and authority to execute and deliver this Agreement and
to perform its obligations hereunder.
(c) CORPORATE ACTION. The execution and delivery of this
Agreement, the performance of all terms and conditions hereof,
and the consummation of the transactions contemplated hereby
have been duly authorized by the necessary corporate action.
(d) DUE EXECUTION. This Agreement has been duly executed and
delivered and constitutes the legal, valid, and binding
obligations of Purchaser, and shall be enforceable against it
in accordance with its terms.
(e) INSPECTION AND INVESTIGATION. Purchaser has conducted an
investigation of the Assets to be transferred hereunder and is
ente ring into this Agreement in reliance on its own
investigation concerning the physical condition, economic
feasibility, profitability, value, and economic potential of
said Assets and Purchaser was not induced to enter into this
Agreement by any oral or written representation, statement of
fact, expressions of opinion, or warranty of the Seller other
than those expressly set forth in this Agreement.
All of the foregoing Representations and Warranties of the
Purchaser shall be true as of the execution of this Agreement
and as of the Closing.
3.3 REPORTING REQUIREMENTS. From and after the date of this
Agreement and until the Closing Date, Seller shall provide
Purchaser with monthly reports of the number of developed and
undeveloped lots remaining in the subdivisions set forth in
para graph 1. I (a) hereof, and quarterly reports of
Cons truction-in-Process and Inventory referred to in
paragraphs 1. I (b) and (d) hereof in order to permit
Purchaser to maintain a current estimate of the Assets to be
transferred and the Purchase Price therefor. The reports
concerning Construction-in-Process and Inventory shall include
the Seller's costs as shown on the Seller's books and records,
and any accounts payable related thereto. Seller shall also
provide Purchaser with monthly reports of its budgeted
development costs for the subdivisions set forth in paragraph
1. I (a) hereof.
3.4 RIGHT OF CONSULTATION. From and after the date of this
Agreement and until the Closing Date, Seller shall operate its
business in the ordinary course but shall regularly consult
with Purchaser concerning development plans, lot prices,
building designs, and all other significant matters relating
to the subdivisions set forth in paragraph 1.1 (a) hereof
and/or relating to the activities of Hawthorne Construction.
Seller, however, shall be under no obligation whatsoever to
accept any recommendation, suggestion or comment, other that
as limited by the other terms of this Agreement, including,
but not limited to Articles 1.7 and 1.10.
Purchaser's Right of Consultation shall include the right to
attend any meetings of Seller's Board of Directors, or any
committee thereof, at which matters relating to the
subdivisions set forth in paragraph 1. I (a) hereof are
discussed. Seller shall provide Purchaser with timely written
notice of Board of Directors meetings, Executive Committee
meetings, and any other corporate meetings at which matters
relating to the divisions set forth in paragraph I. I (a)
hereof will be discussed.
ARTICLE IV
CONDEMNATION, INDEMNIFICATION, DEFAULTS AND REMEDIES
4.1 CONDEMNATION. If, during the pendency of this Agreement
and prior to Closing, condemnation proceedings are commenced
with respect to any portion of the Property, both the Seller
and the Purchaser, by their respective attorneys, shall have
the right to appear and defend their interest in the Property
in such proceedings. The Purchaser or the Seller may at any
time on or prior to the Closing terminate this Agreement by
delivery of written notice to the other party if, and only if,
condemnation proceedings with respect to a material portion of
the Property have been commenced. In the event of such
termination, the Xxxxxxx Money Deposit shall be immediately
refunded to the Purchaser, and neither party shall have any
further obligation to the other. If condemnation proceedings
are commenced but neither party elects to terminate this
Agreement prior to the closing, then the Purchaser shall pay
the full purchase price at the Closing and shall be entitled
to receive the full amount of any just compensation paid or
awarded in connection with the condemnation.
4.2 INDEMNIFICATION OF PURCHASER. Seller shall defend,
indemnify, and hold Purchaser harmless from any and all
claims, causes of action, suits, damages, liabilities, costs,
or expenses, including attorneys fees, arising out of any
construction or development defect, misrepresentation or other
conduct of the Seller which occurred prior to the Closing.
4.3 INDEMNIFICATION OF SELLER. Purchaser shall defend,
indemnify and hold Seller harmless from any and all claims,
causes of action, suits, damages, liabilities, costs, or
expenses, including attorneys fees, arising out of any
construction defect, misrepresentation or other conduct of the
Purchaser which occurs after the Closing.
4.4 PURCHASER'S DEFAULT AND SELLER'S REMEDIES.
(a) PURCHASER'S DEFAULT. Purchaser shall be deemed to be in
default under this Agreement if it falls or refuses to perform
Purchaser's obligations at Closing unless there is a default
by Seller, Purchaser has elected to terminate this Agreement
under paragraph 2.1, 5.1 or under any other provision hereof
by which Purchaser is entitled to terminate this Agreement, or
if the failure to close is not otherwise excused under the
terms and conditions of this Agreement.
(b) SELLER'S REMEDIES. If Purchaser is in default under this
Agreement, Seller's claim shall be limited to liquidated
damages as secured by the Xxxxxxx Money Deposit referenced in
Article 1.6. It is agreed between Purchaser and Seller that
the Xxxxxxx Money Deposit shall be liquidated damages for a
default of purchaser under this Agreement because of the
difficulty, inconvenience, and uncertainty of ascertaining
actual damages of such default, and that such liquidated
damages are a reasonable approximation of Seller's actual
damages and are not a penalty.
If a breach giving a right to liquidated damages occurs, the
Seller may not claim any other damages or waive the liquidated
damages claim and xxx for actual damages.
4.5 SELLER'S DEFAULTS AND PURCHASER'S REMEDIES.
(a) SELLER'S DEFAULTS. Seller shall be deemed to be in default
under this Agreement on the occurrence of any one or more of
the following events:
(i) Any of Seller's warranties or representations set forth in
this Agreement is or becomes untrue at any time on or before
the Closing; or
(ii) Seller fails to meet, comply with, or perform any
covenant, agreement, or obligation within the time limits and
in the manner required by this Agreement.
(iii) The violation of or failure to perform any term of the
Agreement.
(b) PURCHASER'S REMEDIES. In the event that the Seller fails
to Close on time for a reason other than a breach or default
by the Purchaser, and the failure to close is not otherwise
excused under the terms and conditions of this Agreement,
then, in such event, the Purchaser's sole and exclusive remedy
shall be limited to the recovery of the Liquidated Damages
hereinafter provided plus the return of the Purchaser's
Xxxxxxx Money Deposit. If there is any other breach of this
Agreement or misrepresentation, Purchaser may bring any action
at law or equity to enforce the same or for damages or both.
(c) LIQUIDATED DAMAGES. The parties agree and understand that
if the Seller fails to close on time for a reason other than a
breach by the Purchaser, and the failure to close is not
otherwise excused hereunder, the Purchaser will suffer damages
including, but not limited to, loss of profits and loss of
business opportunities. Since such damages would be uncertain
and difficult to determine, the Seller agrees to pay and the
Purchaser agrees to accept Liquidated Damages in the amount of
Four Hundred Thousand ($400,000.00) Dollars in the event of
such an unexcused failure to close on the part of the Seller,
and the parties agree that such sum is a reasonable
approximation of the purchaser's damages and does not
constitute a penalty.
(d) POST-CLOSING CLAIMS. If the parties close, any
Post -Closing Claims for breach of any obligations,
representations, or warranties contained in this Agreement
shall be settled by arbitration in accordance with the
procedure set forth in paragraph 5.2 hereof.
4.6 LIMITATIONS PERIOD. Written Notice of any claim under or
to enforce this Agreement, whether at law or in equity, must
be given within one (1) year following the Closing or shall
forever be barred. Upon receipt of a notice of a claim, the
recipient may at any time demand that the claimant submit the
claim to arbitration either before the end of the one year
following Closing or, within 60 days of the Notice, whichever
is later.
ARTICLE V
MISCELLANEOUS
5.1 FORCE MAJEURE.
(a) The following events of force majeure shall excuse
Purchaser's performance hereunder:
(i) Any fires, accidents, war, or other casualties, whether
natural or man made, which have a material direct or indirect
adverse effect on Purchaser's ability to develop the Property
into residential building lots and construct residential
buildings thereon as contemplated by this Agreement.
(ii) Any change after the execution of this Agreement in any
law, ordinance, rule or regulation, or judicial or
administrative interpretation thereof, which has a material
adverse effect on Purchaser's right to develop the Property
into residential building lots and construct residential
buildings thereon as contemplated by this Agreement.
(iii) Any sewer ban or other moratorium on access to
utilities or other services necessary to the development of
the Property which has the effect of causing a material delay
or interruption in development.
(iv) Any increase in the prime rate of interest published by
PNC Financial between the date of this Agreement and the Cut
Off date which exceeds 2-1/2%.
(v) Any material adverse change in the marketability of the
lots to be sold hereunder caused by adverse publicity arising
from the institution of class action or other litigation
against the Seller and/or the Seller's Board of Directors.
(vi) Any catastrophic currency crisis which causes the
Purchaser to be unable to close.
(b) Unless the parties otherwise agree in writing, the
following events of force majeure shall excuse either party's
performance hereunder:
(i) Any injunction, court order, or administrative order
which prohibits either party from closing or from performing
any of its closing obligations hereunder.
(ii) Any fires, accidents, war, or other casualties, whether
natural or man-made, which have a material adverse impact on
the ability of either party to close or otherwise perform its
obligations under this Agreement within the time specified for
such performance; but damage to one or more buildings, not the
result of a general disaster, such as an earthquake or natural
disaster , shall not be considered such an event.
The occurrence of any of the above-mentioned events of force
majeure shall entitle the affected party to terminate this
Agreement if it so elects. Any election to terminate this
Agreement because of the occurrence of an event of force
majeure must be made in writing within thirty (30) days
following the occurrence of the event of force majeure relied
upon in the election to terminate this Agreement. Time is of
the essence with respect to this 30-day period and any
election to terminate not delivered to the other party within
said 30-day period shall be ineffective.
If an event of force majeure occurs and one party or both
parties have a right to terminate this Agreement as a result
thereof, and the condition or event giving rise to the right
to terminate this Agreement is temporal in nature, the other
party or either party may reasonably extend the time for
Closing if the time extension does not materially and
adversely affect the ability of the other party to close at
the time to which extended.
Any disagreement or dispute concerning a party's right to
terminate the agreement because of the occurrence of an event
of force majeure shall be resolved by arbitration in
accordance with paragraph 5.2 hereof.
5.2 ALTERNATE DISPUTE RESOLUTION PROCEDURES. If the parties
are unable to amicably resolve any dispute or disagreement
concerning the construction, interpretation performance, or
enforcement of this Agreement, then either party may serve on
the other a written demand for arbitration setting forth in
detail a description of each claim to be arbitrated along with
a re quest for relief spelling out the precise relief
requested. Within thirty (30) days following receipt by the
respondent of any such demand for arbitration, the parties
shall select by mutual agreement a single neutral arbitrator
to resolve each claim set forth in the demand for arbitration.
If the amount of the claim exceeds Two Hundred Fifty Thousand
($250,000.00) Dollars, then three neutral arbitrators shall be
selected. If the parties are unable to agree on an arbitrator
or arbitrators within said thirty (30) day period, either
party may ask the American Arbitration Association to select
an arbitrator or arbitrators. Arbitration shall be conducted
in accordance with the American Arbitration Association
Commercial Arbitration Rules, or, in the case of a dispute
concerning construction, the Construction Arbitration Rules.
The decision of the arbitrator(s) on all claims shall be final
and unappealable and may be entered as a judgment or decree in
any court having jurisdiction over the parties thereto. The
arbitrator(s) shall be empowered to award counsel fees and
litigation costs against any party found to have acted in bad
faith in either bringing or defending a claim.
If there are more than one claim or counterclaim, for purposes
of determining the number of arbitrators, all of the claims
shall be cumulated. All known claims and counterclaims must be
filed in a single proceeding. For purposes of this provision,
federal rules pertaining to res judicata and mandatory
counterclaims are to be followed.
The parties shall each contribute one half of the costs of
arbitration, advancing such funds as are required, subject to
the authority of the arbitrator(s) to award costs and fees
prospectively.
5.3 ASSIGNMENT. Purchaser may assign this Agreement without
the written consent of the Seller only to an entity owned and
controlled by the Purchaser, otherwise the written consent of
the Seller shall be required.
5.4 DUTY OF COOPERATION. Purchaser and Seller shall be under a
continuing duty of good faith, to cooperate with one another,
and each shall provide the other with documents, information
or provide or execute documents which may reasonably or
commercially be usual or necessary for Closing or which may be
required by banks, lenders or others normally involved in a
Closing of this type.
5.5 NO THIRD-PARTY BENEFICIARIES. No person or entity other
than the parties hereto and their respective successors and
assigns shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision thereof.
5.6 ENTIRE AGREEMENT. The representations, warranties, and
covenants set forth in this Agreement constitute the exclusive
undertakings of the parties concerning the subject matter of
this Agreement. The parties make no representations or
warranties or agreements not expressly set forth or referred
to h erein. All prior negotiations, agreements, and
discussions are merged herein and there exist no enforceable
oral agreements which deal with the subject matter of this
Agreement. No party relied on or was induced to enter into
this Agreement by any promise, representation, or warranty not
expressly set forth herein.
5.7 AMENDMENT AND MODIFICATION. This Agreement can be amended
or modified only by the written agreement of the parties
hereto duly authorized by the Boards of Directors of the
parties hereto.
5.8 NOTICES. All notices or other correspondence given
hereunder or in connection herewith shall be in writing and
shall be sent to the appropriate party by certified mail,
overnight courier or facsimile transmission as follows:
If to Seller: Xxxxxx X. Xxxxx
Seven Fields Development Company
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
FAX: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxxx, Esq.
Picadio XxXxxx Xxxxxx & Xxxxxx
4680 USX Tower, 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
FAX: (000) 000-0000
If to Purchaser: Xxxxx Xxxxx
Xxxxx Holdings, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
5.9 NO COMMISSIONS OR BROKERS' FEES. No agent, broker,
investment banker, person, or firm has acted directly or
indirectly on behalf of the Seller in connection with this
Agreement or any transaction contemplated herein, and no
person or entity is or will be entitled to any broker's fee,
commission, or similar compensation in connection with this
Agreement or the transaction contemplated herein.
5.10 RISK OF LOSS. In case of fire or other damage to one or
more than a single property, not constituting force majeure,
Purchaser shall take an assignment of the insurance relative
to such property; in which case this Agreement or the
obligations of the parties shall not be modified. If
settlement of the insured loss can reasonably be consummated
prior to Closing, then this provision will not be applicable.
5.11 TERMINATION. If Purchaser terminates this Agreement under
any provision allowing termination and not as a result of a
default, the Xxxxxxx Money Deposit is to be returned to
Purchaser. In addition, Seller or Purchaser shall execute
releases if requested.
ARTICLE 6
ADDITIONAL EXHIBITS
Seller has provided the following documents to Purchaser,
other than the Exhibits attached hereto, upon which
authenticity Purchaser has relied:
6.1 The Phase I Environmental Site Assessment dated September
1999, by Earth Tech, Inc.;
6.2 Personnel policies of the Seller;
6.3 Form of deed to be issued;
6.4 Certified copy of the Seller's Trust Indenture;
6.5 A certified copy of the resolution or other authorization
approving the entry into this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals the date first above-written.
ATTEST: SEVEN FIELDS DEVELOPMENT COMPANY
By
Xxxxxx X. Xxxxxx Xxxx Xxxxxx
Executive Vice President President
ATTEST: XXXXX HOLDINGS INC.
By
Name:
Title:
