AGREEMENT OF SALE
THIS, AGREEMENT OF SALE, made this 3rd day of December, 1997,
by and between
Seven Fields Development Company
0000 Xxxxxx Xxxxx
Xxxx, XX 00000-0000
hereinafter referred to as "SELLER"
and
Xxxxxx X. Xxxxxx
hereinafter referred to as "PURCHASER"
WITNESSETH:
For and in consideratjon of the mutual covenants and conditions
contained herein, and with the intention of being legally bound
hereby, SELLER and PURCHASER agree as follows:
1. Property.
In accordance with the terms and conditions of this Agreement,
SELLER agrees to sell and convey, and PURCHASER agrees to
purchase all townhouse apartment Units and associated lots
located in the Castle Creek Phase I subdivision which are owned
by SELLER at the time of the closing, the number of which shall
in any case be no more than sixty-nine (69) nor less than sixty-five (65).
The sale and conveyance shall include said townhouse apartment Units and
associated lots along with all rights and appurtenances thereto arid
thereon PURCHASER shall purchase the Property subject to any leases in
effect on the date of the closing. All such leases shall be assigned by
SELLER to PURCHASER at the closing pursuant to an assignment of lease, the
form of which is attached hereto as Exhibit "A.." It is a condition of this
Agreement that at 1east 56 of the units be under lease at the
time of closing.
All leases shall be delivered to PURCHASER at Closing. Copies of
all leases shall be delivered to PURCHASER within fourteen (14)
days of the date hereof.
The townhouse apartment Units located in the Castle Creek Phase I
subdivision which SELLER owns as of the date of this Agreement
are shown on attached Exhibit "B." SELLER shall have the
unrestricted right to continue to offer for sale and to sell
individual Units shown on Exhibit A after the date of this
Agreement. SELLER agrees to take all Units off the market and
hold them for sale to the BUYER upon receipt of written notice
that BUYER has received a letter of commitment for financing
along with a copy of the letter, provided that any pending sale
agreements with third parties for townhouses will be consummated
by SELLER and such townhouses will not be included in this
transaction.
From and after the date of PURCHASER's loan commitment letter,
PURCHASER shall have the right to market the property and
negotiate potential leases and sales of Units with prospective
purchasers and tenants; provided that PURCHASER shall not
consummate the lease or sale of any Unit prior to Closing.
2. Purchase Price.
The Purchase Price for the Property shall equal Fifty-four
Thousand Five Hundred ($54,500.00) Dollars per townhouse Unit,
Fifty-two Thousand ($52,000.00) Dollars for the real estate and
Two Thousand Five Hundred ($2,500.00) Dollars for appliances and
other personal property, payable as follows:
a. Forty-seven Thousand ($47,000.00) Dollars per Unit shall be
paid at closing.
b. Seven Thousand Five Hundred ($7,500.00) Dollars per Unit
plus interest at the rate of Seven and One-Half (7 1/2%) Percent
per annum from the date of the original closing shall be paid at
the time the PURCHASER receives proceeds from the sale of a Unit,
regardless of the purchase price for the particular Unit.
3. Promissory Note and Second Mortgage.
In order to evidence and secure its obligation to pay the Seven
Thousand Five Hundred ($7,500.00) Dollars per Unit set forth in
paragraph 2b., above, PURCHASER shall deliver to the SELLER at
Closing a Promissory Note and a recordable Second Mortgage on the
property in an aggregate principal amount equal to Seven Thousand
Five Hundred ($7,500.00) Dollars multiplied by the number of
Units conveyed to PURCHASER at the Closing. The form of the
Promissory Note is attached hereto as Exhibit "C." The Second
Mortgage, the form of which is attached hereto as Exhibit "D,"
and lien thereof shall be against the entire property and have
priority over all other liens and encumbrances which PURCHASER
may cause to be placed against the Property, excepting only a
first mortgage lien in favor of the lender providing financing to
the PURCHASER for the purchase of the Property as set forth
herein.
Upon subsequent sale by the PURCHASER of individual Units, and
upon payment to SELLER of the amount due for each such Unit under
paragraph 2.b. hereof, SELLER shall provide a written release in
a form satisfactory to PURCHASER and PURCHASER's lender,
releasing the Units sold from the lien of the Second Mortgage.
4. Term of Promissory Note and Second Mortgage
The promissory Note and the Second Mortgage which secure it shall
be payable as follows:
a. Two and one-half (2 1/2) years after the closing, a
principal amount equal to Two Hundred Fifty Five Thousand
($255,000.00) Dollars plus interest at the rate of seven and one-half
(7 1/2%) percent per annum from the date of closing shall become
due and payable. PURCHASER shall receive credit against the
principal amount then due for all principal payments previously
made pursuant to paragraph 2.b. above and interest shall be
computed on the balance remaining after such credit is applied.
b. Three and one-half (3 1/2) years after the Closing, an
additional principal amount equal One Hundred Twenty-seven
Thousand Five Hundred ($127,500.00) Dollars plus interest at the
rate of seven and one-half (7 1/2%) percent per annum from the
date of Closing shall become due and payable. PURCHASER shall
receive credit against the principal amount then due for all
principal payments previously made pursuant to paragraph 2.b.
above which shall have not been previously credited to PURCHASER
pursuant to subparagraph 4.a. hereof. Interest shall be computed
on the balance remaining after such credit is applied.
c. Four and one-half (4 1/2) years after the date of Closing
the remaining principal balance shall become due and payable plus
interest at the rate of seven and one-half (7 1/2%) percent per
annum from the date of Closing. PURCHASER shall receive credit
against the remaining principal balance for all principal
payments previously made pursuant to subparagraph 2.b. above
which shall have not been previously credited to PURCHASER
pursuant to subparagraphs 4.a. and 4.b. above. Interest shall be
computed on the balance remaining after such credit is applied.
d. PURCHASER shall have the right at any time to make additional
principal payments without penalty.
5. Xxxxxxx Money Deposit. PURCHASER has delivered an Xxxxxxx
Money Deposit in the amount of Seventy-five Thousand ($75,000.00)
Dollars to be held in an interest- bearing escrow account by
Xxxxxxx X. Xxxxxxx, Esquire during the pendency of this
Agreement. If PURCHASER defauults under this Agreement, and
SELLER is not in default, SELLER shall be entitled to receive the
Escrow Deposit plus interest earned as liquidated damages as
provided in this Agreement. If SELLER defaults under this
Agreement, PURCHASER shall be entitled to receive a return of the
Escrow Deposit plus interest earned as provided in this
Agreement.
6. Condition of the Property
a. Exterior Condition. The townhouse Units which are being sold
hereunder are presently undergoing exterior renovation. SELLER
shall use its best efforts to complete the exterior renovation of
all Units prior to the Closing. Three Thousand ($3,000.00)
Dollars shall be escrowed at the closing with the closing agent
for each Unit which has not yet had its exterior renovation
completed. The escrowed amount shall be paid to SELLER upon
completion of the exterior renovation by SELLER and acceptance by
PURCHASER. Exterior renovation of all Units shall be completed no
later than January 1, l998. If not completed by that date, SELLER
shall be paid from the escrow for any portion of the work
completed and the balance of the Escrow fund shall be paid to
PURCHASER and PURCHASER shall thereafter complete the exterior
renovations.
b. Interior Condition. The SELLER warrants that the interior
condition of the Units on date of closing shall be as it existed
on the date PURCHASER shall have received its financing
commitment letter.
c. Other Conditions. In all other respects, the property shall
be sold "as is" on the date of Closing without any warranty or
representations concerning its state of repair or physical
condition except as may otherwise be provided herein. PURCHASER,
however, shall receive any existing warranties or guarantees by
third parties which may exist for any part of the structure,
appliances or other personal property.
7. Title
a. Title to be Conveyed. At the closing the SELLER will convey
or cause to be conveyed to PURCHASER, by a general warranty deed
in recordable form, good and indefeasible title, free and clear
of any and all liens, encumbrances, conditions, easements and
restrictions, except for the Permitted Exceptions (as hereinafter
defined) and for general real estate taxes which are not yet due
and payable, subject only to any existing leases in effect on the
date of closing. SELLER shall also deliver to PURCHASER at the
closing a quit claim deed respecting any mineral rights it might
possess with respect to the Property.
b. Commitment for Title Insurance. PURCHASER shall obtain, at
its own cost and expense, a title insurance commitment for the
Property. If the title commitment shows exceptions to title which
are unacceptable to PURCHASER (the "Unpermitted Exceptions"),
PURCHASER shall so notify SELLER and SELLER shall have thirty
(30) days from the date of delivery of such notice to cure the
Unpermitted Exceptions by removing or correcting them, or
committing to insure over them. If SELLER, after using
reasonable efforts, is unable to cure all of the Unpermitted
Exceptions within the foregoing thirty (30) day period, PURCHASER
shall have the option (to be exercised by delivery of written
notice to SELLER within ten (10) days after the expiration of
said thirty (30) day period) either to:
(1) terminate this Agreement (without either party being deemed
at fault, with Escrow Deposit plus interest earned plus any other
monies spent on the transaction by PURCHASER to be returned to
PURCHASER); Or
(2) proceed pursuant to this Agreement and
accept title subject to the remaining Unpermitted Exceptions.
Those title exceptions which are acceptable to PURCHASER,
together with those exceptions that PURCHASER elects to take
pursuant to (ii) above, shall be known as the Permitted
Exceptions, and shall be listed on Exhibit "B," attached hereto.
PURCHASER agrees that SELLER need not remove liens, mortgages,
deeds of trust, trust deeds, security interests or contract
interests affecting the Property and constituting Unpermitted
Exceptions prior to the Closing of the sale of the Property.
8. Survey. within ten (10) days after the effective Date of this
Agreement, SELLER, at SELLER's sole cost and expense shall
deliver or cause to be delivered to PURCHASER a current survey
(".Survey") prepared by a licensed surveyor acceptable to
PURCHASER and the Title Company.
9. Closing. The closing of the sale of the Property by SELLER
to PURCHASER shall occur on or before 2/15/98. Time is of the
essence with respect to the Closing date. The Closing shall be
held at a location specified by the PURCHASER.
a. SELLER's Obligations. At the Closing, SELLER shall deliver
the following Documents (the "Closing Documents) to PURCHASER or
title insurer as applicable.
i. General Warranty Deed;
ii. Assignment of leases of all Units then rented;
iii. Non-Foreign Affidavit;
iv. Good Standing Certificate, Corporate Lien Certificate,
Corporate Resolution, Incumbency Certificate, and affidavit that
sale does not constitute more than 50% of assets of corporation.
v. Municipal Lien letter and paid real estate tax receipts;
vi. Transfer Tax Return and Closing or Settlement Statement
(unless prepared by title insurer);
vii. All documents, instruments and records relating to the
Property, including without limitation maintenance contracts,
restrictive covenants, permits and licenses, and existing third-party
warranties and guarantees;
viii. Such other instruments and documentation which may
reasonably be required by PURCHASER's first lender and/or title
insurer, including without limitation, mechanics liens waivers
and release of liens.
b. PURCHASER'S Obligations. At the Closing, PURCHASER shall pay
to SELLER that portion of the Purchase Price set forth in
paragraph 2.a. hereof (adjusted to reflect the xxxxxxx money
deposit and any applicable prorations), and shall deliver to
SELLER, in a form acceptable to SELLER'S counsel, the Promissory
Note and Second Mortgage referred to in paragraphs 3 and 4
hereof. PURCHASER shall pay to title insurer all other amounts
necessary for Closing (including, but not limited to, title
insurance premiums, transfer taxes, recording fees, etc.).
10. Adjustments and Prorations. Real estate taxes and rents shall
be prorated to the date of Closing of the Property on the basis
of the calendar year. SELLER and PURCHASER shall share equally
the amount of any real property transfer tax. PURCHASER shall pay
the fee of the title insurer to act as closing agent. PURCHASER
shall receive all security deposits and prepaid rents. All unpaid
rents as of the date of Closing shall belong to SELLER and SELLER
shall have the right to collect same.
11. SELLER's Warranties and Representations. PURCHASER's
obligation to close this transaction are expressly contingent
upon the truth and correctness of the following warranties and
representations, which warranties and representations shall also
be deemed made as of the time of the Closing. Nothing herein
shall preclude PURCHASER from waiving any one or more of the
warranties and representations, provided, however, that said
waiver is in writing to SELLER.
a. SELLER's Authority. The person Signing this Agreement as
SELLER, or on behalf of the SELLER, has the full right, power and
authority to enter into this Agreement as SELLER, and to carry
Out SELLER's obligations, including the conveyance of the
Property to PURCHASER as provided in this Agreement, without the
joinder of another person.
b. Title. SELLER has and will convey to PURCHASER at Closing,
good, marketable, indefeasible fee simple title to the Property,
free and clear of all conditions, exceptions, or reservations,
except for the Permitted Exceptions as defined in paragraph 7
hereof, insurable by a responsible title insured selected by
PURCHASER, at regular rates.
c. Compliance with Regulations. There is no known condition
existing with respect to the Property or the operation of the
Property that violates any restrictive covenant, or any township,
county, state or federal regulation, code, ordinance or statute
in effect on the date of this Agreement, including the violation
of any zoning ordnance or user restriction, and SELLER has not
received any notice relating to any such violation.
d. Condemnation. 'There is no pending or threatened condemnation
or similar proceeding affecting the Property or any portion
thereof, nor has SELLER knowledge that any such action is
presently contemplated. SELLER agrees to give PURCHASER prompt
notice of any actual, threatened or contemplated condemnation or
similar proceeding between the date hereof and the Closing.
e. Maintenance Agreements. There no maintenance agreements in
effect with respect to the Property.
f. Actions. There is no action, suit, proceeding or claim
affecting SELLER or the land or any portion thereof relating to
or presently being prosecuted for the reduction of the assessed
valuation or taxes or other impositions payable in respect to any
portion of the land.
g. Property Taxes. All real estate and valorem taxes levied
against the land and any penalties or interest hereon and all
assessments of any kind for periods prior to the year of Closing
have been paid in full by the SELLER.
h. Non-Foreign Status. SELLER is not a "foreign person" as
defined under Section 1445(f) of the Internal Revenue Service
Code; and, at Closing, SELLER shall furnish Purchaser an
affidavit confirming same in such form as PURCHASER's attorney
may reasonably require.
i. Schedule 1 attached hereto is a true and complete list of
all leases in force and effect at the Propert as of the date of
this Agreement and SELLER is the sole owner of landlord's right,
title and interest in and to such leases. The leases are valid
and enforceable and have not been altered, modified or amended
except as indicated on Schedule 1, and no rents under any of the
leases has been paid more than thirty (30) days in advance.
Seller has received no notice of default and to Seller's
knowledge no default has occurred under any of such leases.
SELLER represents and warrants that no tenant has any right of
first refusal purchase any portion of the Property except as
provided in the leases, and that none of the leases has been
assigned or is subject to a sublease except as indicated on
Schedule 1.
j. SELLER has delivered or made available to Purchaser all
documents and information in SELLER's possession related to the
Property, including all permits, licenses, authorizations,
official notices and approvals, service contracts, plans, surveys
and studies.
k. To SELLER's knowledge, (i) there is no pending or threatened
environmental investigation or enforcement action with respect to
the Property, (ii), neither SELLER nor any other party has used,
stored or disposed of any hazardous material or toxic substances
in or on the Property in violation of any applicable law, rule,
regulation or ordinance, (iii) there is no asbestos or asbestos-containing
materials at the Property, and (iv) there are no
underground storage tanks located on or under the Property.
l. SELLER has entered into no contracts for improvements to the
Property for which SELLER or its successor would be obligated
that have not been paid in full as of the date of Closing. Any
liens resulting from any such outstanding contracts shall be
discharged by SELLER at no cost to PURCHASER.
m. The execution and delivery of this Agreement and the
consummation of the sale contemplated herein will not constitute
a violation, breach or default by Seller of any other instrument
of which Seller is a party or to which Seller or any portion of
the Property may be subject.
n. There are no real estate tax appeals pending with respect to
the Property.
o . The Property is serviced by a community sewage system.
12. Defaults and Remedies.
a. PURCHASER'S Default and SELLER's Remedies.
i. PURCHASER's Default. Purchaser shall be deemed to be in
default under this Agreement if all of PURCHASER's Conditions for
Closing have been satisfied and PURCHASER fails or refuses to
perform PURCHASER's obligations at Closing for any reason other
than a default by SELLER or termination by PURCHASER under some
provision of this Agreement.
ii. SELLER's Remedies. if PURCHASER is deemed to be in default
under this Agreement, SELLER shall be entitled to receive the
Xxxxxxx Money Deposit, which shall be delivered to SELLER by the
escrow agent on receipt of written notice from SELLER that
PURCHASER has defaulted under this Agreement. It is agreed
between PURCHASER and SELLER that such amount 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.
b. SELLER's Defaults and PURCHASER's Remedies.
i. 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:
(1) Any of SELLER's warranties or representations set forth in
this Agreement is or become untrue at any time on or before the
Closing.
(2) 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.
ii. Purchaser's Remedies. If SELLER is deemed to be in
default under this Agreement, Purchaser may, at PURCHASER's sole
option, do any one or more of the following:
(1) Terminate this Agreement by written notice delivered to
SELLER on or before the date of Closing and receive a return of
Escrow Deposit plus interest earned.
(2) Enforce specific performance of this Agreement against
SELLER.
13. Commission. if the transaction provided for under this
Agreement is actually consummated (but not otherwise), then, at
Closing, SELLER agrees to pay Xxxxxx Xxxxx Company a commission
that has been agreed upon between SELLER and broker under
separate contract. The parties acknowledge that PURCHASER has not
dealt with or incurred any liability to any broker in connection
with this transaction and that SELLER is responsible for any
commission payable to any broker.
14. 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, and any award in condemnation shall become the
Property of the SELLER and the Purchase Price shall be reduced by
an amount equal to the net award received by SELLER; provided,
however, 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 any portion of the Property have been
commenced or concluded. In the event of such termination, the
Xxxxxxx Money Deposit shall be immediately refunded to the
Purchaser.
l5. Risk of Loss. If prior to closing all or part of the
property is destroyed by fire or other casualty, PURCHASER may
terminate this Agreement and receive the deposit and accrued
interest thereon.
16. Miscellaneous
a. Assignment of Agreement. This Agreement may be assigned by
Purchaser only to any partnership or other entity in which Xxxxxx
X. Xxxxxx owns a majority or controlling interest. Upon any such
assignment. Xxxxxx X. Xxxxxx shall be relieved of any and all
personal liability for performance of purchaser's obligations
hereunder.
b. Survival of Covenants. Any of the representations,
warranties, covenants and agreements of the parties, as well as
any rights and benefits of the parties, pertaining to a period of
time following the Closing shall survive the Closing and shall
not be merged therein.
c. Notices. Any notice or other communication required or
permitted hereby, or convenient to the SELLER or the PURCHASER in
the consummation of the transaction contemplated hereby, shall be
deemed delivered when deposited (i) in a receptacle of the United
States Postal Service, as registered or certified mail, return
receipt requested, postage prepaid, or (ii) with any expedited
courier service, fees prepaid, and addressed to the respective
parties.
d. Parties Bound. This Agreement shall be binding upon and
insure to the benefit of the parties to this Agreement and their
respective heirs, executors, administrators, legal
representatives, successors and assigns.
e. Severability. If any of the terms and
conditions hereof shall for any reason be held to be invalid,
illegal, or unenforceable in any respect such invalidity,
illegality, or unenforceability shall not affect any other of the
terms and conditions hereof and the terms and conditions hereof
thereafter shall be construed as if such invalid, illegal, or
unenforceable term or condition had never been contained herein.
f. Entire Agreement. The terms and conditions hereof relating to
the subject matter described herein (i) constitute the entire
agreement and understanding between the SELLER and the PURCHASER,
(i) supersede all prior agreements and understandings, written or
oral, between the PURCHASER and the SELLER, and (iii) may not be
modified or amended except by an instrument mutually executed
and delivered by the SELLER and PURCHASER.
g. Continuation. Unless otherwise expressly stated, all of the
representations and warranties contained in the Agreement shall
be true as of the date hereof and as of the Closing Date, and
further, shall survive the Closing of this transaction, the
payment of any consideration required, the execution of all
closing documents and any inspections made by or on behalf of the
PURCHASER.
h. Interpretation. Words of any gender used in this Agreement
shall be held and 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.
i. Signage. After PURCHASER receives a financing commitment
letter, PURCHASER shall have the right to erect signage on the
Property with the SELLER'S approval.
j. Waiver. Either the PURCHASER or the SELLER may specifically
waive any breach of the terms and conditions hereof by the other
party, but no waiver of similar
or other breaches of the terms and conditions hereof. All
remedies, rights, undertakings, obligations and agreements
contained herein shall be cumulative and not mutually exclusive.
k. Attorney's Fees Should either the PURCHASER or the SELLER
employ an attorney or attorneys to enforce any of the terms and
conditions hereof, or to protect any right, title or interest
created or evidenced hereby, the non-prevailing party ill any
action pursued in courts of competent jurisdiction shall pay to
the prevailing party all reasonable costs, damages, and expenses,
including attorneys' fees, expended or incurred by the prevailing
party.
l. Governing Law. The terms and conditions hereof shall be
governed by and construed in accordance with the laws of the
state where the Property is located.
m. Headings. The headings herein are for reference purposes only
and shall not affect the meaning or interpretation of the terms
and conditions hereof.
n. Effective Date. The effective Date of the Agreement shall be
the date that the SELLER executes the Agreement of Sale.
o. Financing Contingency. PURCHASER's obligations under this
Agreement are contingent upon PURCHASER obtaining an acceptable
commitment for a mortgage loan in the amount of Three Million
Eight Thousand Four Hundred ($3,008,400.00) Dollars for a term of
at least fifteen (15) years, at lender's stated interest rate of
not more than eight and one-half (81/2%) percent per annum. If
PURCHASER has not received an acceptable commitment within thirty
(30) days following the date hereof, PURCHASER or SELLER may
terminate this Agreement, in which event the Escrow Deposit plus
interest earned thereon shall be returned to PURCHASER; provided,
that PURCHASER may elect to waive this contingency clause in
which case this Agreement shall continue in full force and in
effect as if no such contingency had existed. Such waiver shall
occur if PURCHASER fails to apply for such financing within ten
(10) days following the date hereof.
p. Risk of Loss. SELLER shall bear all risk of loss with respect
to the Property up to the date that title is transferred to
Purchaser in accordance with this Agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement On the day first
above written.
