EXHIBIT 10(a)
AGREEMENT OF SALE
BETWEEN
XXXXX ELECTRONICS CORPORATION,
AS "SELLER"
-AND-
X. XXXXXXXXX NORTH JERSEY ACQUISITIONS, L.L.C.,
AS "BUYER"
FOR PREMISES LOCATED IN
OAKLAND BOROUGH, BERGEN COUNTY
NEW JERSEY
- DATED -
DECEMBER 29, 2004
TABLE OF CONTENTS
PAGE
1. PREMISES/PHASED PURCHASE...................................................1
2. PURCHASE PRICE/CLOSING.....................................................1
3. INVESTIGATION PERIOD.......................................................6
4. DEPOSIT/ADDITIONAL DEPOSITS/OPTION PAYMENTS................................7
5. GOVERNMENTAL APPROVALS CONTINGENCY.........................................9
6. TITLE AND SURVEY INVESTIGATION............................................12
7. ENVIRONMENTAL MATTERS.....................................................13
8. EMINENT DOMAIN............................................................15
9. DEFAULTS..................................................................15
10. REAL ESTATE COMMISSION....................................................16
11. NEW JERSEY LAW............................................................16
12. POSSESSION ON CLOSING/RISK OF LOSS........................................16
13. TAXES, ADJUSTMENTS AND INCIDENTAL COSTS...................................16
14. NOTICES...................................................................17
15. CAPTIONS/HEADINGS.........................................................18
16. DRAFTING OF AGREEMENT.....................................................18
17. INITIALING BY PARTIES.....................................................19
18. ENTIRE AGREEMENT/COUNTERPARTS/SURVIVAL....................................19
19. EXECUTION OF DOCUMENTS....................................................19
20. RECORDING.................................................................19
21. BUYER'S REPRESENTATIONS...................................................19
22. SELLER'S REPRESENTATIONS..................................................20
23. LICENSE TO ERECT SIGNS/TRAILERS...........................................21
24. DOCUMENTS TO BE DELIVERED AT CLOSING......................................21
25. ASSIGNMENT OF CONTRACT....................................................22
26. OTHER MATTERS.............................................................22
[EXHIBITS OMITTED]
AGREEMENT OF SALE
THIS AGREEMENT made on December 29, 2004, (the "Agreement") between Xxxxx
Electronics Corporation, a corporation of the State of New York, with offices
located at 00 Xxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000 ("Seller") and X. Xxxxxxxxx
North Jersey Acquisitions, L.L.C., a limited liability company of the State of
Delaware, with offices located at 000 Xxxxxxxxxx Xxxxxx, XX 0000, Xxxxxx, Xxx
Xxxxxx 00000-0000 ("Buyer").
WHEREAS, Seller is the fee simple owner of Block 2.18, Lot 1201 in Oakland
Borough, Bergen County, New Jersey, described in Exhibit A attached hereto and
made a part hereof and has full authority to enter into this Agreement; and
WHEREAS, Seller wishes to convey its ownership interest in a portion of
Block 1201, Lot 2.18, consisting of approximately sixty-eight (68) acres, (the
"Premises") and generally consisting of Tract III as shown on the location
survey prepared by Xxxxxx Xxxxxxxx, Jr., dated 9/12/97, last revised on 9/17/97
attached hereto and made a part hereof as Exhibit A pursuant to the terms and
conditions of this Agreement; and
WHEREAS, Buyer wishes to purchase the Premises pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Buyer and Seller agree as follows:
1. PREMISES/PHASED PURCHASE
A. Seller agrees to convey to Buyer and Buyer agrees to purchase the
Premises upon and subject to the terms and conditions of this Agreement. The
Premises shall be conveyed free from all liens and encumbrances, except as this
Agreement may otherwise provide, by Bargain and Sale Deeds with Covenant as to
Grantor's Acts, on the dates hereinafter fixed for the closings of title
(separately, a "Closing" and collectively, the "Closings"). The deeds shall
contain either: (1) a metes and bounds description in accordance with a survey
prepared in accordance with Paragraph 6, below; and/or (2) a reference to lots
on a plat that has been or will be filed simultaneously with Closing with the
Clerk of Bergen County, and/or (3) reference to units in a recorded Master Deed
creating a condominium for the Phase then subject to Closing.
B. The purchase of the Premises shall occur in two (2) phases
(hereinafter referred to in this Agreement as Phase I and Phase II.) While it is
Buyer's intention to purchase all Phases, Buyer's purchase of Phase I does not
in any way obligate it to purchase Phase II. A conceptual site plan is attached
hereto as Exhibit F.
2. PURCHASE PRICE/CLOSING
A. The Purchase Price for the Premises shall be Eighteen Million One
Hundred Eighty Five Thousand Four Hundred Forty Two ($18,185,442) Dollars
subject to adjustment as set forth in this Agreement (the "Purchase Price")
based upon one hundred seventy four (174) market rate residential units
consisting of seventy eight (78) market rate townhomes ("Townhomes") at One
Hundred Eleven Thousand Seventy Nine Dollars ($111,079) per home in Phase I and
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ninety-six (96) active adult multi-family garden type homes ("Active Adult
Homes") at Ninety Nine Thousand One Hundred Eighty ($99,180) Dollars per home in
Phase II.
B. The Purchase Price shall be paid at each Phase Closing by wire
transfer or bank teller's check at Buyer's option, as follows:
(1) PHASE I PURCHASE PRICE. Phase I shall consist of Seventy Eight (78)
Townhomes. The Phase I Purchase Price shall be calculated by multiplying the
number of market rate townhomes in Phase I by One Hundred Eleven Thousand
Seventy Nine ($111,079) Dollars but in no event shall be less than Six Million
($6,000,000) Dollars ("Phase I Minimum Purchase Price"). The Phase I Closing
shall take place within thirty (30) days after receipt of All Approvals (as
defined in Paragraph 5, below).
(2) PHASE II PURCHASE PRICE. Phase II shall consist of Ninety Six Active
Adult Homes. The Phase II Purchase Price shall be calculated by multiplying the
number of market Active Adult Homes in Phase II by Ninety Nine Thousand One
Hundred Eighty Dollars ($99,180) but in no event shall the cumulative Phase I
and Phase II Purchase Price be less than Twelve Million ($12,000,000) Dollars
(the "Phase I and Phase II Minimum Purchase Price"). A credit in the amount by
which the Phase I Minimum Purchase Price paid by Buyer exceeded the purchase
price which would have been due on a per home basis for Phase I shall be
credited at the Phase II Closing. However, in no event shall the credit reduce
the cumulative purchase price paid by Buyer for Phases I and II to less than the
Phase I and Phase II Minimum Purchase Price. By way illustration only, if there
are forty townhomes in Phase I, the Phase I Purchase Price would be $6,000,000
and not the per home purchase price of $ 4,443,160. The Minimum Purchase Price
is $1,556,840 more than the per home price. If there were 77active adult homes
in Phase II, the Phase II Purchase Price would be $6,080,020 ($7,636,860 -
$1,556,840). The Phase I and Phase II Purchase Price would be $12,080,020. The
Phase II Purchase Price shall be increased by an escalator as hereafter defined.
The Phase II Closing shall take place not more than twenty four (24) months
after the Phase I Closing.
(4) ESCALATOR. The "Escalator" shall be six (6%) percent PER ANNUM
simple interest prorated monthly commencing to run on the date of the Phase I
Closing until the date of the next Phase Closing.
(5) DEPOSIT. The Deposit shall be released to Seller by Escrow Agent as
follows:
(a) Fifty Thousand ($50,000) Dollars at the expiration of the
Investigation Period, provided Buyer has not terminated the
Agreement as set forth in Paragraph 3 (the Investigation Period) ;
(b) One Hundred Thousand ($100,000) Dollars on the six month anniversary
of the Agreement; and
(c) Fifty Thousand Dollars upon the rezoning of the Property for Buyer's
intended residential use.
(6) PURCHASE PRICE ADJUSTMENT. Subject to Buyer's right to terminate
pursuant to Paragraph 2(B)(7) below, in the event that Buyer obtains All
Approvals for more/less than One Hundred and Thirty (130) Homes the Purchase
Price shall be increased/decreased by the applicable per home price, but in no
event shall be less than the applicable Minimum Purchase Price. If Buyer closes
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title without All Approvals based on the Minimum Purchase Price and subsequently
obtains All Approvals, the Purchase Price shall be increased by the applicable
per home price. This provision survives closing of title.
(7) A. In the event that All Approvals are received for fewer than one
hundred thirty (130) Homes Buyer may either: (1) terminate this Agreement, in
which event this Agreement shall become null and void and neither party shall
have any further obligation to the other, except for those obligations which
expressly survive the termination of this Agreement, or (2) proceed to the
Phased Closings and pay an adjusted Purchase Price based on the number of Homes
for which All Approvals are obtained, but in no event less than the Minimum
Purchase Price applicable to that Phase..
B. Reserved
C. No consideration shall be paid for lots on which Mt. Laurel Homes
shall be constructed. The Purchase Price is based upon the parties' mutual
understanding that no Mt. Laurel Homes (defined in this Paragraph, below) are
required to be constructed on the Premises and that Buyer is able to obtain
certificates of occupancy for all Market Homes (defined in this Paragraph,
below) on the Premises without any requirements to construct Mt. Laurel Homes.
"Market Home" is defined as any home for which there is no restrictions or
limitations on the sales or rental prices. In the event that the municipality
requires the payment of affordable housing fees, these fees shall be deemed
Construction Costs for the purposes of calculating Profit Sharing under
Paragraph 2 J. An affordable housing fee is defined as a payment of any kind
required in lieu of restrictions or limitations on the sales or rental prices,
which restrictions or payments are imposed by any governmental entity or court
or pursuant to any court order or governmental implementation of any court order
or settlement to satisfy in whole or in part the municipality's obligations
under the _Mt. Xxxxxx XX decision of the New Jersey Supreme Court or the Fair
Housing Act or under any Council on Affordable Housing certified plan.
D. In the event that Buyer elects not to purchase Phase II, Buyer
shall pay Seller a termination fee in the amount of One Hundred Twenty Five
thousand ($125,000) Dollars.
E. Buyer shall have the right to pay the Purchase Price and Close title
to any Phase, before the outside dates set forth above, without penalty, upon
ten (10) days written notice to Seller. However, acceleration of the Closing
date for any Phase shall not accelerate the Closing date for any subsequent
Phase. Rather, the remaining Phase shall not be accelerated a similar number of
months, but shall take place in accordance with the schedule set forth above.
For example, if Buyer accelerates the Phase I Closing, the Phase II Closing
shall nonetheless take place twenty four (24) months after the required Phase I
Closing Date,
F. Reserved.
G. Buyer shall have the right to commence site development of the
Premises prior to the Phase I Closing with Seller's consent which shall not be
unreasonably withheld or delayed, provided that prior to commencing any such
site activities, Buyer shall have posted any necessary performance guarantees
required by under this Agreement and named the Seller as an additional obligee.
Such site development shall be limited to environmental remediation, soil
balancing, and installation of sewer, water, drainage, utilities and roads. All
such site development shall conform with All Approvals and with applicable
construction codes and shall be at Buyer's sole cost and expense. In no event
shall Buyer perform any activities for which a building permit is required until
such time as Buyer has closed title to the relevant Phases of the Premises. In
the event that Buyer fails to close title to any Phases of the Premises, all
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such improvements and site development shall be for the benefit of Seller. Buyer
and Seller shall grant to each other the necessary cross-easements at the Phase
I Closing.
H. No consideration shall be paid for the transfer of Lots and/or lands
on which Buyer, in accordance with All Approvals, does not construct homes
(referred to as "Non-Home Lands"). Non-Home Lands are used for open space,
stormwater detention/retention basins or culverts, buffers, wetlands and similar
use. If Buyer must construct such improvements on the Phase II Property in
connection with the Phase I development, Buyer shall bond said improvements and
name Seller as an obligee on these bonds. Seller shall not have any obligation
to construct improvements on lands not bought by Buyer but required by an
Approval in connection with a Phase that Buyer has bought. At each Phase
Closing, Buyer and Seller shall grant to each other easements and/or
cross-easements necessary for access and for the proper functioning of utility
and drainage systems and for roadway access, and as otherwise necessary to
facilitate construction as contemplated by All Approvals for the Phase being
Closed.
I. If Buyer is unable to obtain All Approvals in such a manner that the
Phases of the Premises are subdivided from each other Seller shall convey title
to the entire Premises to Buyer. Buyer shall pay to Seller the Phase I Purchase
Price by wire transfer or, bank teller's check at Buyer's option, with the
balance of the Purchase Price for Phase II being secured by the Mortgage
Documents. Buyer shall deliver to Seller a Note (in the general form attached
hereto as Exhibit B) and a non-recourse Mortgage (in the general form attached
hereto as Exhibit C) for the Premises. The Note and Mortgage are referred to
collectively as the Mortgage Documents. Seller shall deliver to Eastern Title
Agency a Release of Part of Mortgaged Premises (in the form attached hereto as
Exhibit D) for those Homes which are included in Phase I and are paid for by the
Buyer at the Phase I Closing (the "Release"); The Release shall be held in
escrow by Eastern Title Agency until the Master Deed creating the condominium
regime for Phase I of the Premises has been recorded with the County Clerk's
Office or a final subdivision plat has been filed in the County Clerk's Office.
Immediately thereafter, Eastern Title Agency shall deliver the Release to Buyer;
and the releases of the subsequent Phase shall take place in accordance with the
terms of the Mortgage Documents. In the alternative, at Buyer's request, Seller
shall at each Phase Closing convey title to the condominium units located within
that Phase together with an undivided percentage interest in the common elements
for the Condominium. The Master Deed shall give Developer the right to construct
the improvements on the Premises required to serve the units being conveyed in
that Phase, shall not obligate Seller to make any improvements and shall not
require the construction of any future condominium units beyond those contained
in the Phase being conveyed. In addition, Seller shall have the right to review
and approve the Master Deed, which review and approval shall not be unreasonably
withheld or delayed and shall sign same for the purpose of establishing its
consent to the filing of the Master Deed.
This Subparagraph shall survive the Closing of Title. Buyer shall also
deliver to Seller any Bond naming Seller as an Obligee to secure the performance
of any on and off-site improvements and requirements in the Master Deed.
Seller shall not be obligated to sign any document which would have the
effect of Seller owning land which is subject to a condominium regime if Buyer
elects not to acquire the subsequent phase except if the condominium regime may
be abandoned at the time that Buyer elects not to acquire the subsequent Phase.
J. PROFIT SHARING
(1) As additional consideration for the transfer and sale of the
Premises, the Purchase price Shall be increased by a portion of the Profits, if
any (and not in any losses) earned by Buyer in the build-out of the community
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(i.e., construction and installation of required on and off-site improvements
and sale of completed homes and all other assets to third-party purchasers and
all steps necessary to commence and complete the contemplated development). Such
profit sharing, hereinafter referred to as "Profit Participation" shall be as
follows:
(a) Ten (10%) percent of the Profits in excess of a ten (10%) percent
Profit Threshold to Buyer on the build-out and sale of the
development.
(b) Twenty (20%) percent of the Profits in excess of a twelve (12%)
percent Profit Threshold to Buyer on the build-out and sale of the
development.
(c) Thirty (30%) percent of the Profits in excess of a fourteen (14%)
percent Profit Threshold to Buyer on the build-out and sale of the
development.
(d) Forty (40%) percent of the Profits in excess of a sixteen (16%)
percent Profit Threshold to Buyer on the build-out of the
development.
(2) Profits shall be calculated on Buyer's fiscal year and shall be the
positive amount, if any, determined by calculating Total Housing Revenue from
this Community (which revenue shall include sales prices of Homes, including
premiums, discounts, extras and profit realized from the resale of off-site
property bought to satisfy an Approval obligation but no longer needed), and
subtracting from that sum Construction Costs for this Community (i.e. "bricks
and mortar" construction costs, land development costs, affordable housing fees,
land purchase price, real estate taxes and homeowner association operating
subsidy); Construction and Service Overheads allocable to this Community (i.e.,
construction, services); Selling Overhead allocable to this Community (i.e.,
prepaid marketing expenses, financing and closing costs, commissions, salaries,
advertising and general expenses); Capital Cost allocable to this Community
(i.e.. interest) and Administrative Overhead allocable to this Community (i.e.,
Division, Region and Corporate Overhead.) In addition, an amount of One Thousand
Dollars ($1,000) per closed home shall be deducted for future home warranty
service until Final Profit Participation is calculated). In calculating Profit
Threshold to Buyer, the numerator shall be Profits and the denominator shall be
Total Housing Revenue.
(3) Reserved
(4) The following costs for the purpose of calculating Profits shall be
based on the actual costs incurred but shall not exceed the following
percentages:
(a) Construction Overhead and Service Overhead at 1.5% of Total Housing
Revenue;
(b) Selling Overhead at 6% of Total Housing Revenue;
(c) Capital Cost, at 6% of Total Housing Revenue; and.
(d) Administrative Overhead is preset at 3.5% of Total Housing Revenue.
(5) Commencing on the first quarter following the date that Buyer
conveys its first home to a third party purchaser and on each quarter
thereafter, Seller shall be entitled to Interim Profit Participation
(6) Buyer shall calculate the first Interim Profit Participation due
Seller within ninety (90) days following the end of the fiscal quarter within
which the first sale of a home to a third party purchaser occurs and shall
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provide quarterly community Interim Profit Participation statements until the
last home is sold to a third party purchaser. Seller may, upon reasonable
advance notice and during reasonable business hours inspect or audit the books
and records of Buyer upon which the Interim Profit Participation statement was
based. If Seller objects to the Interim Profit Participation Statement, the
procedures set forth in Paragraph 2 J(9) below shall apply.
(7) The Profit Participation due Seller shall be adjusted each quarter
based upon cumulative revenues and expenses incurred from commencement of the
community.
(8) If Seller receives Interim Profit Participation and the Final Profit
Participation determines that Seller was not entitled to receive Final Profit
Participation or an amount less than what Seller received as Interim Profit
Participation, Seller shall, within thirty (30) days notice, refund to Buyer the
appropriate amount.
(9) A final accounting of the community, for purposes of determining
Seller's Final Profit Participation shall be conducted one (1) year after the
quarter in which the last home in the community is closed. At this time Buyer
will pay to Seller its share, if any, of any additional Profit Participation
which may be due. Seller, at its own expense, may review Buyer's final
accounting and may upon reasonable advance notice and during reasonable business
hours inspect or audit the books and records of Buyer upon which the Final
Profit Participation Statement was based. If Seller disagrees with such
accounting, it will provide Buyer with a copy of report from an accountant
outlining in what respects it disagrees with Buyer's accounting. The parties
will then have twenty (20) days to see if the matter can be resolved. If the
matter is not resolved, Seller's accountant and Buyer's accountant shall select
an independent accountant who shall make a final determination on the issue of
Profit Participation based on the parameters set forth in this paragraph. The
parties agree that any amount in dispute shall be held by Eastern Title Company.
The costs of the accountant's services shall be split evenly by the parties, but
Buyer's share of the cost shall be capped at Twenty Thousand ($20,000) Dollars.
(10) Buyer shall pay Seller Interim Profit Participation and Final Profit
Participation together with the Interim/Final Profit Participation Statements.
Seller shall pay Buyer any refund within thirty (30) days of receiving the Final
Profit Participation Statement.
(11) Any information collected by Seller during the course of its review
of any Interim or Final Profit Participation shall be deemed proprietary
information of Buyer and shall be kept strictly confidential except to the
extent required to resolve any controversy between the parties in any
administrative or legal proceeding.
3. INVESTIGATION PERIOD
A. Buyer has ninety (90) days from the Effective Date of this Agreement
to conduct investigations, tests, studies and inspections of any kind or nature
whatsoever including, without limitation, soil and groundwater sampling, and to
make a complete and independent investigation of all aspects of the transaction
contemplated by this Agreement including, but not limited to, the condition of
the Premises, all correspondence, instruments, agreements, contracts, books,
documents, records, plans, drawings, specifications, brochures, permits,
licenses, registrations, consents, approvals and authorizations concerning the
Premises to determine the feasibility of development of the Premises in
accordance with Buyer's plans (the "Investigation Period").
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B. Reserved.
C. Buyer and its agents have the right, upon prior notice, to enter
onto the Premises for all purposes contemplated by this Agreement during the
term of this Agreement.
D. Buyer shall provide Seller with proof of Buyer's liability insurance
coverage naming Seller as an additional insured with respect to the Premises and
having a combined single limit of not less than Three Million Dollars
($3,000,000.) with at least Ten Million Dollars ($10,000,000.) excess liability
coverage. Buyer or Buyer's agents shall also carry worker's compensation
insurance for such activities. Buyer shall repair any damage caused by such
testing and shall restore the Premises to substantially the same condition as
existed immediately prior to such testing. Buyer hereby indemnifies and holds
Seller harmless from any liability to the extent related to any negligent act or
omission of Buyer or Buyer's agents or representatives in the performance of any
and all activities conducted on the Premises by Buyer until Closing, except to
the extent such liability is the result of Seller's acts or omissions..
E. Seller shall make available at its office for inspection and copying
on and after the date of this Agreement, copies of any and all documents in
Seller's or Seller's agents' possession concerning the portion of the Premises
to be purchased by Buyer for development which includes the documents set forth
in Exhibit E.
F. Buyer may terminate this Agreement in its sole, absolute and
unfettered discretion prior to the end of the Investigation Period. If Buyer
terminates this Agreement pursuant to this Paragraph 3(F), Buyer shall give
written notice to Seller and Escrow Agent (as defined in Paragraph 4 (A), below)
on or before the expiration of the Investigation Period. Upon receipt of such
notice, the Escrow Agent shall, within three (3) business days, return the
Deposit (as defined in Paragraph 4, below) with all interest accrued thereon to
Buyer, in which event this Agreement shall become null and void and neither
party shall have any further obligation to the other. Failure of Buyer to send a
timely notice of termination, shall not be deemed a waiver of the right to
terminate. If Seller does not receive a notice of termination, it shall send a
notice to Buyer that the Investigation Period has expired and if Buyer fails to
terminate within three (3) days of receipt of Seller's notice, the right of
Buyer to terminate under this Paragraph shall expire. If Buyer terminates, it
shall provide copies of non-proprietary investigation reports concerning the
condition of the Premises, such as soils reports and environmental reports to
the Escrow Agent, who must hold such reports in escrow and treat them as
confidential material until such time as Buyer has received the Deposit from
Escrow Agent after which date these investigation reports can be released to
Seller. Buyer shall have the right to use these reports to the extent permitted
by the applicable consultant and Buyer shall have no liability to Seller in
connection with its use and reliance on any report or document.
4. DEPOSIT/ADDITIONAL DEPOSITS/OPTION PAYMENTS
A. Upon the Effective Date of this Agreement, Buyer shall pay to
Seller's attorney Xxxxxx Xxxxx, Xxxxxx Xxxxxxxxx & Xxxxx, 0000 Xx. 000 X. Xxx
000, Xxxxxxxxx, XX 00000 ("Escrow Agent"), a deposit of Two Hundred Thousand
($200,000.00) Dollars (the "Deposit"). The Escrow Agent shall hold the Deposit
in a federally insured interest bearing attorney trust account located in the
State of New Jersey. If Buyer does not terminate the Agreement prior to the end
of the Investigation Period, the Deposit, together with all interest accrued
thereon, shall be released to Seller in accordance with Paragraph 2.(B)(5), and
the Deposit plus interest shall become non-refundable unless Buyer subsequently
terminates this Agreement based upon: (a) the failure of Seller to clear title
or survey objections pursuant to Paragraph 6; (b)eminent domain pursuant to
Paragraph 8; (c) the default of Seller pursuant to Paragraph 9; or (d)
misrepresentations by Seller pursuant to Paragraph 22.
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B. The Deposit shall be credited against the Purchase Price at each
closing, pro rata at each closing, pro rata per home.
C. If Buyer exercises its right to an Extension of the Agreement (as
defined in Paragraph 5(C) (1), below), Buyer shall pay to Seller an additional
deposit (the "Additional Deposit") of Twenty Five Thousand ($25,000) Dollars for
each such Extension. The Additional Deposit(s) shall be non-refundable except in
those instances where Buyer is entitled to a return of the Deposit as set forth
in this Paragraph, above, in which case the Deposit and Additional Deposit(s),
together with all interest accrued thereon shall be refunded to Buyer. The
Additional Deposit(s) shall not be credited in part or in their entirety against
the Purchase Price.
D. Escrow Agent.
(1) If, for any reason, Closing does not occur and either party makes a
written demand upon Escrow Agent hereunder, Escrow Agent shall give written
notice to the other party of such demand. If Escrow Agent does not receive a
written objection from the other party to the proposed payment within ten (10)
business days after the giving of such notice, Escrow Agent is authorized to
make such payment. If Escrow Agent does receive such written objection within
such 10 day period, or, if for any other reason, Escrow Agent in good faith
elects not to make such payment, Escrow Agent shall: (i) continue to hold such
amount until otherwise directed by written instructions from the parties to this
Agreement or a final judgment (beyond any applicable appeal period) of a court
of competent jurisdiction or (ii) deposit such funds with a court of competent
jurisdiction selected by the Escrow Agent, in which event all liability of
Escrow Agent with respect to such funds shall terminate.
(2) The duties of Escrow Agent as set forth in this Paragraph are
subject to the following provisions which are expressly approved by Seller and
Buyer;
(a) Escrow Agent shall be liable as a depository only and shall not be
responsible for the sufficiency or accuracy of the form, execution or validity
of any documents delivered to Escrow Agent hereunder or any description of the
Premises or other thing contained therein or the identity, authority or rights
of the persons executing or delivering or purporting to execute or deliver any
such document. Escrow Agent's duties hereunder are limited to the safekeeping of
the Deposit and such other as are delivered to it, and the delivery of the same
in accordance herewith.
(b) Escrow Agent shall not be liable for any act or omission done in
good faith, or for any claim, demand, loss or damage made or suffered by any
party to this Agreement, excepting such as may arise through or be caused by
Escrow Agent's willful misconduct or gross negligence.
(c) Escrow Agent shall not be liable for collection items until the
proceeds of the same in actual cash have been received by Escrow Agent. Escrow
Agent is authorized to rely on any document believed by Escrow Agent to be
authentic in making any delivery of funds or Premises hereunder.
(d) In the event of a dispute arising under this Agreement, Escrow Agent
shall not be disqualified from representing Seller
F. Seller's and Buyer's Federal Tax Identification Numbers are as
follows:
Seller: 00-0000-000
Buyer: 00-0000000
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G. Commencing June 1, 2005 and terminating on the date of the first
Phase Closing, Buyer shall pay Seller each year an Option Payment in the amount
of One Hundred Twenty Five ($125,000) Thousand Dollars in consideration of
Seller's carrying costs of the Premises for the prior year. An adjustment shall
be made at the Phase I Closing for the number of days between the last option
payment and the date of the Phase I Closing. The Option Payments shall not be
applicable to the Purchase Price but shall be applicable to any Additional
Payments due in connection with Buyer exercising its right to an extension of
the Agreement pursuant to Paragraph 4C.
5. GOVERNMENTAL APPROVALS CONTINGENCY
A. Unless waived by Buyer in writing, Buyer's obligation to close title
pursuant to this Agreement is contingent on Buyer's receiving All Approvals as
defined as all necessary nonappealable rezoning, final approvals, permits and
agreements containing terms and conditions acceptable to Buyer needed for the
uninterrupted development of at least one hundred seventy four (174) Homes
consisting of ninety-six (96) Active Adult Garden Homes and seventy-eight (78)
Townhomes (collectively the "Development") to completion and which final
approvals shall include, but not be limited to the governing body of the
Township, Township Planning and Zoning Boards, New Jersey Department of
Environmental Protection, New Jersey Department of Transportation, New Jersey
Department of Community Affairs Registration, County Planning Board, Municipal
or Regional Sewerage/Utilities Authority, County Soil Conservation District and
any and all other approvals, permits and agreements necessary or desirable for
the development and construction of the Premises, including the right to obtain
a building permit for the first Home in the development but not the building
permit itself. Each such approval shall be referred to as an "Approval."
B. The Premises are not currently zoned for the use contemplated by
this Agreement.. Unless waived by Buyer in writing, Buyer's obligation to close
title pursuant to this Agreement is contingent on Buyer's obtaining a final and
nonappealable municipal rezoning of the Premises to permit the use contemplated
in this Agreement (hereinafter "Rezoning"). After the end of the Investigation
Period, Buyer shall submit a written request to the municipality's governing
body for the Rezoning. If the municipality's governing body fails to adopt the
Rezoning ordinance within twenty four (24) months after the expiration of the
Investigation Period (the "Rezoning Period"), either party may upon written
notice to the other terminate this Agreement in which event this Agreement shall
become null and void and neither party shall have any further obligation to the
other.. Notwithstanding the foregoing in the event that a rezoning ordinance has
been recommended by the Planning Board prior to the expiration of the Rezoning
Period, Seller shall not be permitted to terminate the Agreement unless the
municipality's governing body fails to adopt the Rezoning ordinance within
thirty six (36) months after the expiration of the Investigation Period. In the
event that the Agreement is terminated because the Premises has not been
rezoned, Seller shall be entitled to a quit claim assignment of all applications
with related documents submitted by Buyer to obtain the Rezoning and All
Approvals and due diligence documents as set forth in Paragraph 3 F. Seller
shall not be entitled to any proprietary information which includes Buyer's an
internal work product.
C. (1) Buyer shall have twenty-four (24) months from the Effective Date
of this Agreement to obtain All Approvals (the "Approval Period"). If Buyer is
unable to obtain All Approvals within the Approval Period, provided that Buyer
is diligently seeking All Approvals, upon written notice to Seller and payment
of the Additional Deposit in accordance with Paragraph 4C, above, Seller shall
grant to Buyer four (4) extensions of the Approval Period, each for six (6)
months. The first such extension period shall be known as the "First Extension"
and the second such extension period shall be known as the "Second Extension"
9
and the third such extension period shall be known as the "Third Extension
Period" and the fourth such extension period shall be known as the "Fourth
Extension Period." The right to the First through Fourth Extension Periods shall
not be applicable to the grant of the Rezoning set forth in Paragraph 5B.
However, these extension periods shall be applicable if the municipality has
granted the rezoning and it is being challenged by a third party. The Fourth
through Twelfth Extension Payments are not refundable and are not applicable to
the purchase price. These extension payments are independent of the $125,000
Option Payments due under Paragraph 4 G.
(2) In the event this Agreement is extended for any of the reasons set
forth in Paragraph 5(D), each six month time period by which this Agreement is
extended beyond the expiration of the Fourth Extension period shall be known as
the Fifth through Twelfth Extension Periods, respectively. Buyer shall pay
Seller the sum of $100,000 for the Fifth Extension Period and $100,000 for the
Sixth Extension Period. Buyer shall pay Seller the sum of $200,000 for the
Seventh Extension Period and $200,000 for the Eighth Extension Period. Buyer
shall pay Seller the sum of $300,000 for the Ninth Extension Period and $300,000
for the Tenth Extension Period. Buyer shall pay Seller the sum of $400,000 for
the Eleventh Extension Period and $400,000 for the Twelfth Extension Period.
(3) Not later than ten (10) days prior to the end of the Approval Period
and not later than ten (10) days prior to the end of any prior extension period,
Buyer shall deliver written notice to Seller as to whether or not Buyer intends
to exercise its right to an extension, as set forth above together with any
applicable payment due for that extension period. Failure of Buyer to deliver
such notice shall be deemed to be a default under this Agreement and Seller
shall proceed in accordance with Paragraph 9, below.
D. Buyer shall have the right, but not the obligation, to undertake any
litigation in order to obtain All Approvals with conditions reasonably
satisfactory to Buyer including, without limitation, the right to litigate to
the ultimate decision maker. While this Agreement is in effect, Seller is not
permitted to initiate litigation challenging any Approval for the Premises.
However, if any party, person or entity including, but not limited to, Buyer
initiates litigation or otherwise appeals any Approval or permit or the denial
of any Approval or permit for the Premises or the revocation thereof, or any
administrative actions or inactions or the denial or revocation thereof, the
time periods in this Agreement shall be extended by the length of time during
which any such appeal is pending, but not beyond a date which is 8 years from
the date of this Agreement.. Notwithstanding the foregoing, this tolling
provision shall not apply if the municipality denies the rezoning request, but
shall apply if the municipality grants the rezoning and the rezoning is
challenged by a third party. Similarly, the time periods in this Agreement shall
be extended by the length of time during which any moratorium is in effect as to
utility connections or usage, approvals, permits or applications related to the
development of the Premises, but not beyond a date which is 8 years from the
date of this Agreement.. If an appeal/litigation results in the denial of any
Approval or sustains the denial of any permit or Approval by a governmental
agency relating to the development of the Premises, Buyer has the right, by
written notice to Seller within twenty (20) days after the date of the Court
Order memorializing such denial, to: (1) waive any such Approval and close title
to the Premises and pay the Purchase Price therefore in accordance with
Paragraph 2 of this Agreement; or (2) terminate this Agreement, in which event
neither party shall have any further obligation to the other except for those
obligations that expressly survive the termination of this Agreement
E. Seller agrees to execute promptly all applications and related
documents that are presented to Seller by Buyer in connection with Buyer's
pursuit of All Approvals, at no cost to Seller. All costs and expenses
associated with obtaining All Approvals shall be the responsibility of Buyer.
Buyer has total control of the approval process, including, without limitation,
10
the right to designate all professionals who will be engaged during the approval
process. Buyer shall also apply for other Approvals within the foregoing time
period.
F. Reserved.
G. Buyer has the right to waive the receipt of All Approvals at any
time and proceed to Closing upon ten (10) days written notice to Seller. In such
event, the Purchase Price shall be determined by the number of Homes approved in
the preliminary site plan/subdivision approval granted by the Township Planning
Board, or if no such approval has been granted, the Purchase Price shall be the
Minimum Purchase Price for the Premises.
H. Seller shall join Buyer: (1) in filing/recording a condominium map
or subdivision plat in the County Clerk's office; and (2) in the dedication of
streets, rights-of-way, and any easements to the extent reasonably necessary,
prior or subsequent to the Phase I Closing; provided however, that: (a) any
plats, plans, dedications of streets, rights-of-way, and easements are approved
in writing by Seller, which approval shall not be unreasonably withheld or
delayed; and (b) all costs incident thereto shall be paid by Buyer. Buyer will
post the necessary performance guarantees and escrow fees and pay any inspection
fees required by the Township and County Planning Boards in order to permit the
condominium map and/or subdivision plat to be filed in the County Clerk's
Office. If Buyer has posted said guarantees and paid such fees, and Closing does
not occur pursuant to this Agreement (1) as a result of Seller's default; or (2)
Seller develops the Premises in accordance with any Approvals for the Premises
obtained by Buyer, Buyer shall terminate the bonds (except if the obligation
survives a Phase I Closing) and Seller as obligee under these bonds must
consent. Buyer shall be entitled to a refund of its still outstanding deposits
and inspection fees from the relevant governmental authority. It is the
obligation of a successor developer to replace the guarantees and fees.
I. If any Approval requires that a Developer's Agreement be entered into
with the appropriate governmental agency prior to the Phase I Closing, Buyer
shall submit such Developer's Agreement to Seller for its prompt review,
approval and signature, which shall not be unreasonably withheld or delayed.
Buyer shall indemnify and hold Seller harmless for any obligations arising or in
any way connected with the Developer's Agreement it is signing on Buyer's behalf
and shall name Seller as an Obligee on any bonds,. J. Seller shall be deemed to
have approved any application, document and/or plan delivered to Seller if
Seller fails to respond to Buyer within ten (10) business days of said documents
being provided to the Seller.
K. Buyer and Seller acknowledge and agree that the Premises are not
currently zoned for Buyer's intended use as a residential condominium and that a
rezoning of the Premises will be required as part of the Governmental Approvals
Contingency.
L. Buyer and Seller acknowledge and agree that the Premises are a
portion of Block 1201 Lot 2.18 and accordingly, Buyer must obtain a subdivision
of Block 2.18 Lot 1201 to create Tract II and Tract III as generally shown on
Exhibit A. Seller shall agree to changes in the location of the subdivision
lines required by governmental reviewing agencies and authorities provided that
such changes would not adversely affect Seller's ability to use Tract II for its
current use..
M. Buyer shall name Seller as a joint obligee on all performance bonds
in connection with development of Phase I and Phase II to the extent that it
covers work on land not acquired by Buyer. Seller must release the bond if the
11
primary obligee releases it as a function of the completion of the obligations
covered by the bond(s).
6. TITLE AND SURVEY INVESTIGATION
A. TITLE AND SURVEY
(1) Within five (5) days from the Effective Date of this Agreement,
Seller shall deliver to Buyer a copy of the most current commitment and/or
binder and/or policy used to insure title to the Premises and any surveys of the
Premises in Seller's possession.
(2) Within sixty (60) days from the Effective Date of this
Agreement, Buyer shall deliver to Seller (a) a copy of the commitment to insure
title from the title company chosen by Buyer or the report from the title
company chosen by Buyer refusing to issue a commitment to insure marketable
title ("Buyer's Title Report"), together with a list of items which appear on
Buyer's Title Report to which Buyer objects; and (b) a certified survey of the
premises together with a list of any items appearing on the survey to which
Buyer objects.
(3) Not later than twenty (20) days after Seller receives Buyer's
title and survey objections, Seller shall notify Buyer which of the objections
Seller shall cure prior to or at the Phase I Closing, including when and in what
manner said items are to be cured. If Buyer is dissatisfied with Seller's
response or lack of response, Buyer has from the latter of (a) ten (10) days
from receipt of Seller's response or (b) the expiration of the Investigation
Period to either: (i) terminate this Agreement and receive a refund of the
Deposit together with all interest accrued thereon, in which event this
Agreement shall become null and void and neither party shall have any further
obligation to the other; or (ii) agree to accept the exceptions which appear on
the Title Report and which are not identified as those which are to be cured by
the Seller prior to or at the Phase I Closing (the "Permitted Exceptions") and
proceed under this Agreement.
(4) If Seller agrees to cure under Paragraph 6(A)(3) above, but
fails to do so, Buyer has the right to: (i) delay any Phase Closing to a date
specified by Buyer so that Seller or Buyer removes or cures such objections at
Seller's expense; or (ii) close title to that Phase for which Closing is being
held and pay the Purchase Price (or portion thereof) when due; however,
sufficient sums from the proceeds due Seller at such Phase Closing, as
determined by Buyer's title insurance company, shall be placed into escrow with
Buyer's title insurance company, and shall be used by Buyer to cure or clear
such objections at Seller's expense, with Seller being obligated to satisfy any
deficiency and Buyer refunding any portion remaining after curing said defect;
or (iii) terminate this Agreement and receive a full refund of the Deposit plus
all interest accrued thereon plus Approvals costs (including, but not limited
to, consultants', engineering and application fees) and interest thereon, in
which event this Agreement shall become null and void and neither party shall
have any further obligation to the other.
B. As a condition precedent to Buyer's closing title to any Phase of the
Premises, at each Closing, Seller shall convey fee simple, marketable title
insurable at regular rates by Buyer's title insurance company, subject only to
the Permitted Exceptions.
C. From the date of this Agreement, Seller shall not permit any further
encumbrance to appear of record on the Premises without Buyer's prior written
approval which shall not be unreasonable withheld or delayed. Notwithstanding
the foregoing, Seller can mortgage the Premises before the Phase I Closing from
an institutional lender provided that either (I) the amount of the mortgage can
12
be satisfied from the Phase I Closing Proceeds or (ii) the lender provides a
recordable Discharge of Mortgage for the Premises at the time of the loan
transaction which Discharge of Mortgage shall be held in escrow by Buyer's title
insurance company. Seller can mortgage the Premises from a non-institutional
lender provided that the lender provides a Discharge of Mortgage at the time of
the loan transaction which Discharge of Mortgage shall be held in escrow by
Buyer's title company.
D. Within thirty (30) days of the date of execution of this Agreement,
Seller shall cause any person(s) or entities who have liens on the Premises to:
(i) deliver to Buyer a schedule, certified by such lienholder, showing the
amount of money due on its lien; (ii) affirm to Buyer in a signed document which
shall be in recordable form, that to the extent payments are made to Seller in
accordance with the terms and amounts set forth in this Agreement, as adjusted,
said lienholder agrees to release its lien at the time of each Phase Closing.
Seller shall provide Buyer with evidence of the appropriate release documents
prior to each Phase Closing.
7. ENVIRONMENTAL MATTERS
A. Seller represents and warrants to Buyer that: with respect to the
portion of the Premises to be conveyed to Buyer (1) that Seller has no
knowledge, about Hazardous Substances (as defined in Subparagraph 7(B), below)
on, under, at, emanating from or affecting the Premises in violation of
Environmental Laws (as defined in Subparagraph 7(B), below); (2) to the best of
Seller's knowledge Seller has never used the Premises for the use, storage,
release, dumping, treating or disposal of any Hazardous Substance except for
testing diesel fuel generators.; (3) to the best of Seller's knowledge, Seller
has not created, suffered or permitted the Discharge (as defined in Subparagraph
7(B), below) of any Hazardous Substance on, under, at, emanating from or
affecting the Premises, nor directly or indirectly into any waterways flowing
upon, under or near the Premises, nor does Seller have any knowledge of any such
Discharge of a Hazardous Substance by any third party; (4) there is no pending
or threatened claim, directive, suit, action, complaint, notice of violation,
investigation or proceeding by any governmental authority or third party
respecting the Premises arising out of the violation or alleged violation of any
Environmental Laws or the Discharge of any Hazardous Substance; (5) Seller has
provided Buyer with all Environmental Documents (as defined in Subparagraph
7(B), below) in Seller's possession or under Seller's control concerning the
Premises; and (6) the New Jersey Department of Transportation placed crushed
stone of the premises in connection with the construction of Route 287 and
Seller has no knowledge about the nature of the crushed stone and whether or not
it contained Hazardous Substances or any other discharges which may have taken
place in connection with construction of Route 287.
B. The following definitions shall apply in the Agreement:
1. "Discharge" shall mean the use, generation, transportation,
manufacture, treatment, delivery, storage, handling, release, spill, leak,
disposal, pouring, emitting, emptying or dumping of a Hazardous Substance.
2. "Environmental Documents" shall mean all environmental
documentation in the possession or under the control of Seller concerning the
Premises or its environs, including without limitation, Phase I reports or any
other plans, reports and sampling results and any correspondence or other
documentation to or from any governmental authority.
13
3. "Environmental Laws" (and individually, "Environmental Law")
shall mean each and every applicable federal, state, county or municipal
statute, ordinance, rule, regulation, order, code, directive or requirement.
4. "Hazardous Substance" shall include, without limitation, any
regulated substance, toxic substance, hazardous substance, hazardous waste,
pollutant or contaminant defined or referred to in Environmental Laws.
C. Seller shall use its best efforts to deliver to Buyer, within
forty-five (45) days of the date of this Agreement, a nonapplicability letter
issued by the Industrial Site Evaluation Element of the New Jersey Department of
Environmental Protection ("NJDEP") pursuant to the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6 ET SEQ., with respect to this transaction (the
"Nonapplicability Letter"). Seller shall promptly apply for the Nonapplicability
Letter and shall provide Buyer with a copy of the application and submission. In
the event that Seller fails to deliver the Nonapplicability Letter as aforesaid,
Buyer shall retain the right to terminate the Agreement of Sale for failure to
provide the LNA until the date that the LNA is procured but not later than
expiration of the Investigation Period.
D. Reserved.
E. In the event that Seller receives notice from Buyer or any third party
or entity at any time prior to any Phase Closing that any Discharge of a
Hazardous Substances has been discovered at the Premises, and such Discharge
occurred after the date on which Buyer conducts its environmental due diligence
of the Premises, Seller shall provide notice to Buyer within three (3) days of
Seller's receiving such Notice from a third party or entity. Seller shall advise
Buyer, within thirty (30) days of Seller's receipt of such notice, whether
Seller shall address or remediate such Discharge prior to the next Closing in
accordance with Environmental Laws and provide Buyer with an NFA or other
similar documentation evidencing that the Discharge has been addressed or
remediated in accordance with Environmental Laws. If Seller advises Buyer that
it shall not address or remediate such Discharge, Buyer shall have the option,
on thirty (30) days' prior written notice to Seller, to either: (1) terminate
this Agreement in which event this Agreement shall become null and void and
neither party shall have any further obligation to the other except for those
obligations which expressly survive the termination of this Agreement; or (2)
accept the Premises with the Discharge and proceed to the next Phase Closing in
accordance with this Agreement in which event the term of the Agreement shall be
extended as required by Buyer to obtain approval for the required remediation.
Notwithstanding the foregoing, Seller shall not have any obligations under this
Paragraph if the Discharge was caused by Buyer or Buyer's contractors,
consultants or purchasers in which event Buyer shall be liable for any necessary
remediation. In addition, Buyer shall be responsible for future environmental
conditions of the Phase II after the Phase I Closing provided that the Discharge
was not caused by Seller or Seller's contractors, consultants or purchasers in
which event Seller shall be liable for any necessary remediation and that Buyer
takes title to the Phase II Property.
F. In the event that Seller advises Buyer that it will address and/or
remediate the Discharge pursuant to Paragraph 7 (E), above, and Seller fails to
provide the NFA prior to the date set for the Phase I Closing, then Buyer may,
at its option: (1) delay any Closing to a date specified by Buyer, and Seller
shall obtain the NFA, at Seller's expense, prior to the date specified by Buyer;
or (2) close title to and pay the total Purchase Price for the Phase of the
Premises to be conveyed; provided, however, that a sum equal to all or a portion
of the proceeds due Seller at Closing, which shall be determined jointly by
Buyer's and Seller's environmental consultants, shall be placed into escrow with
Buyer's attorney, which shall be used by Seller and Buyer jointly to address or
remediate such Discharge and obtain the NFA at Seller's expense. In addition,
14
Seller shall be obligated to pay to Buyer any sums expended by Buyer in excess
of the sum placed in escrow, and Buyer's attorney shall refund to Seller any
sums remaining in escrow; or (3) terminate this Agreement and receive a full
refund of the Deposit and any Additional Deposit(s) and all interest accrued
thereon, together with the cost of All Approvals accrued by Buyer after Seller
advised Buyer that it will address and/or remediate the Discharge in which event
this Agreement shall become null and void and neither party shall have any
further obligation to the other except as set forth herein.
G. In no event shall any remediation by Seller pursuant to this Paragraph
7 involve any engineering or institutional controls, including without
limitation, capping, a deed notice, a groundwater classification exception area
or a well restriction area without the consent of Buyer..
H. The provisions of this Paragraph 7 shall survive all Phase Closings.
8. EMINENT DOMAIN
A. If, prior to the any Closing, any condemnation or eminent domain
proceeding has been commenced by any governmental or quasi-governmental entity
or any utility authority, company or other agency against all or any part of the
Premises, Seller shall so notify Buyer and shall provide Buyer with all
information concerning such proceedings. Buyer may then, at its sole option,
either: (a) terminate this Agreement by providing written notice to Seller
within twenty (20) days after receipt of the notice from Seller, in which event
this Agreement shall become null and void and Seller shall immediately return
the Deposit and any Additional Deposit(s) together with all interest accrued
thereon; or (b) proceed to Closing as provided hereunder, in which case, any
award in condemnation and/or unpaid claims or rights in connection with such
condemnation shall be assigned to Buyer at Closing, or if paid to Seller prior
to Closing, credited to Buyer against the Purchase Price at such Closing. If
Buyer does not terminate this Agreement, Seller shall: (a) not adjust or settle
any condemnation proceedings without the prior written approval of Buyer; (b)
keep Buyer fully advised as to the status of the proceedings; and (c) allow
Buyer to participate in all proceedings. Condemnation shall include a transfer
resulting from negotiations under threat of taking.
B. From the date of this Agreement, Seller shall not be permitted to
communicate with the Municipality or County regarding possible governmental
acquisition of the Premises for open space and/or park land without Buyer's
written consent, which may be withheld for any reason.
C. If the Municipality or County exercises its powers of condemnation or
eminent domain for the purpose of acquiring the property for open space and/or
park land, and Buyer elects to terminate this Agreement, Seller will reimburse
to Buyer (i) the Deposit and Additional Deposits paid to Seller, (ii) ten (10%)
percent of the actual condemnation or settlement amount for the acquisition or
taking of the Premises in excess of the Minimum Purchase Price, if any, in
compensation for the value added to the Premises by Buyer by virtue of this
Agreement and Buyer's efforts in endeavoring to obtain All Approvals for the
Premises and (iii) Buyer's fees to consultants and other third parties in
pursuing the Rezoning and All Approvals provided that payment of this sum shall
not reduce the actual condemnation or settlement amount to Seller below the
Minimum Purchase Price..
9. DEFAULTS
A. If Buyer or Seller defaults as to any of the provisions of this
Agreement, and the nondefaulting party serves the defaulting party with written
notice specifying the default, the defaulting party has twenty (20) days from
receipt of such notice to cure such default. Failure of the defaulting party to
15
cure the default within such time period shall automatically entitle the
nondefaulting party to exercise its rights set forth below.
B. Buyer's failure to cure a default: Seller shall retain the Deposit and
any Additional Deposits as and for liquidated damages as Seller's sole remedy
against Buyer, in which event Seller shall have no further recourse against
Buyer except with respect to its rights as an oblige under any bond posted
pursuant to this Agreement and this Agreement shall then become null and void
and neither party shall have any further obligation to the other except for
those obligations which expressly survive the termination of this Agreement.
C. Seller's failure to cure a default: Buyer shall be entitled to specific
performance and direct costs limited to the value of the Premise as its sole
remedy against Seller.
Notwithstanding the foregoing, the parties shall be liable to each other
for monetary damages in the event of a false representation set forth in this
Agreement.
10. REAL ESTATE COMMISSION
A. Seller and Buyer hereby represent to each other that they have had no
dealings with any broker, salesperson or agent in connection with the sale of
the Premises other than SBWE, Inc. and Xxxxxxx Xxxxxx. The parties agrees to
defend and indemnify each other (including its affiliates, subsidiaries and
officers) harmless from and against any and all claims, liabilities, losses,
damages and expenses (including court costs and attorney's fees) asserted by any
and all other brokers, salespersons or agents with whom they have had dealings
in connection with the sale of the Premises inconsistent with this
representation.
B. Seller shall be responsible for any and all brokerage commissions
payable to the party named in Subparagraph 10(A).
11. NEW JERSEY LAW
This Agreement will be construed in accordance with the laws of the State
of New Jersey.
12. POSSESSION ON CLOSING/RISK OF LOSS
Possession of the Premises, including, without limitation, all buildings,
garages and other structures, shall be delivered to Buyer by Seller at each
Phase Closing: (1) vacant and free of any leases, licenses or rights of use by
others; and (2) free of all furniture, furnishings, fixtures, equipment,
machinery, inventory, drums and/or containers. Until delivery of the Premises at
each Phase Closing, all risks of loss with respect to the Premises, except with
respect to Buyer's activities on the Premises, shall be Seller's. Seller shall
deliver the Premises at each Phase Closing in the same physical condition as
exists at the time of execution of this Agreement, with the exception of
conditions resulting from Buyer's activities on the Premises.
13. TAXES, ADJUSTMENTS AND INCIDENTAL COSTS
A. Seller shall keep all real estate taxes current for the entire Premises
during the term of this Agreement. As Phase Closings occur, Buyer shall be
responsible for the real estate taxes only on the Phases of the Premises to
which it has taken title.
16
B. Except as set forth in Paragraph 3 F, all assessments for improvements
(confirmed or unconfirmed), as of each Phase Closing, except those which are a
result of Buyer's Approvals for the Premises, shall be paid by Seller prior to
each Phase Closing or shall be deducted from the Purchase Price. Assessments for
improvements shall include, but are not limited to, assessments for water, sewer
and other charges against the Premises. This paragraph does not apply to any
increase in real estate taxes relating to a reassessment of the value of the
land which is governed by Paragraph 13 F.
C. In the event Seller fails to keep taxes or assessments for improvements
current, and Buyer is thereby prevented from applying for or obtaining any
Approval, including a rezoning, Buyer shall have the right, but not the
obligation, to pay all outstanding real estate taxes or assessments. In such
event, Seller shall immediately reimburse Buyer for all amounts so expended. In
the event Seller fails to reimburse Buyer immediately, interest shall accrue on
the amount so expended by Buyer at the rate of twelve (12%) per cent PER ANNUM.
D. All tax apportionment, except rollback taxes, shall be on the basis of
the fiscal year used by the municipal taxing authority and shall be prorated to
the date of each Phase Closing. If, at Closing, the tax rate for the fiscal year
in which the Closing occurs is not fixed, the tax apportionment at Closing shall
be tentative and shall be made on the basis of the preliminary tax bills for the
Premises. A final tax adjustment shall be made promptly after final tax bills
have been issued.
E. Seller shall pay for all rollback taxes, if any, against the Premises.
If, at the time of Closing, the final rollback tax xxxx has not been determined,
the rollback tax adjustment at Closing shall be tentative and shall be
determined by Buyer's title company, which shall hold in escrow the estimated
amount of any such adjustment until the final rollback tax adjustment is made. A
final rollback tax adjustment on the basis of the final rollback tax xxxx for
the Premises shall be made promptly after such xxxx has been issued.
F. Buyer shall be liable for and shall pay for any increase in real estate
taxes attributable to a reevaluation of the Premises arising from the receipt of
Approvals or the filing of the Master Deed until all phases are purchased or
Buyer notifies Seller that it is not purchasing the next phase.
14. NOTICES
All notices, demands or requests under this Agreement shall be in writing
and shall be hand delivered by messenger (with receipt acknowledged in writing),
delivered by courier guarantying overnight delivery (with receipt acknowledged
in writing) or delivered by electronic facsimile (with receipt acknowledged by
automated electronic response) to the parties as follows:
TO BUYER: X. Xxxxxxxxx North Jersey Acquisitions, L.L.C.
Attn: Xxxxxx X. Xxxxx
President-Northeast Region
000 Xxxxxxxxxx Xxxxxx, XX 0000
Xxxxxx, Xxx Xxxxxx 00000-0000
Phone: (000)-000-0000
Fax: (000) 000-0000
17
X. Xxxxxxxxx North Jersey Acquisitions, L.L.C.
Attn: Xxxxx Xxxxxxxx
President
000 Xxxxxxxxxx Xxxxxx, XX 0000
Xxxxxx, Xxx Xxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
X. Xxxxxxxxx North Jersey Acquisitions, L.L.C.
Attn: Xxxxxxxx Xxxxxxx, Esq.
Legal Counsel
000 Xxxxxxxxxx Xxxxxx, XX 0000
Xxxxxx, Xxx Xxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
E-Mail:
TO SELLER: Xxxxx Electronics Corporation
00 Xxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Phone:
Fax:
E-Mail:
With a Copy to Seller's Counsel:
Xxxxxx Xxxxx, Esq.
Xxxxxx Xxxxxxxxx & Xxxxx
0000 Xx. 000 X
Xxx 000
Xxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
E-Mail:
Either party may change its notice address, entity or party upon not less
than ten (10) days prior written notice to the other party. All notices shall be
effective when received.
15. CAPTIONS/HEADINGS
All captions and headings are for reference only and are not deemed to
define, limit, explain or amplify any provisions of this Agreement.
16. DRAFTING OF AGREEMENT
This Agreement, as a matter of convenience to both parties, was initially
prepared by the attorney for Buyer. Both parties agree that if there is an
ambiguity in this Agreement, such ambiguity shall not be resolved against Buyer
solely on the basis that the Agreement was prepared by Buyer's attorney.
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17. INITIALING BY PARTIES
The parties' initials at the bottom of each page of this Agreement,
including each of the exhibits hereto, constitute acknowledgment that each has
read the Agreement and that all terms hereof were complete and understood.
Specific changes, deletions and/or additions to this typed Agreement must also
be initialed by both parties, and initials of specific changes on a page
supersede initials at the bottom of the same page.
18. ENTIRE AGREEMENT/COUNTERPARTS/SURVIVAL
A. This Agreement constitutes the entire agreement between the parties. No
representations have been made by the parties and the realtors or their agents,
except as set forth herein. Any modifications and amendments to this Agreement
shall be in writing signed by Buyer and Seller. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be original, but
all of which together shall constitute one and the same instrument.
B. Notwithstanding any presumption to the contrary, all covenants,
conditions and representations contained in this Agreement which, by their
nature, impliedly or expressly involve performance in any way after Closing, or
which cannot be ascertained to have been fully performed until after Closing,
shall survive Closing.
19. EXECUTION OF DOCUMENTS
Each party shall, at the other party's request, take such further actions
and execute such further documents that are reasonably necessary to effectuate
the purposes and terms of this Agreement. This obligation shall survive the
Phase Closing(s).
20. RECORDING
Except as set forth in this Paragraph, neither this Agreement nor any
document referenced in this Agreement shall be recorded in any public office by
or on behalf of either party. Any recording not permitted by this Agreement may,
at the other party's option, be a default by the party doing the recording or on
whose behalf such recording was done. Buyer and Seller shall execute,
contemporaneously with the execution of this Agreement, the "Short Form
Agreement" attached hereto as Exhibit H and the "Cancellation of Short Form
Agreement" attached hereto as Exhibit I. Buyer is authorized to record the Short
Form Agreement in the Bergen County Clerk's Office after the Investigation
Period has expired. The Termination of Agreement shall be held by Escrow Agent
until the earlier of (a) the final Phase Closing; (b) written authorization from
Buyer to release the document to Seller; or (c) upon the Order of a court of
competent jurisdiction. Notwithstanding the foregoing, Seller may disclose this
Agreement and the terms hereof as necessary to comply with any applicable
Securities and Exchange Commission filing and disclosure requirements.
Buyer has the right to file a Notice of Settlement in the Bergen County
Clerk's Office.
21. BUYER'S REPRESENTATIONS
Buyer represents that it has the full right and authority to execute this
Agreement and consummate all of the transactions hereby contemplated. Buyer is a
limited liability company which is duly organized and validly existing under the
laws of the State of New Jersey and is in good standing.
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Buyer further represents that it will not make, any commitments or
representations to any applicable governmental authorities or to adjoining or
surrounding property owners, which would, in any manner, be binding upon Seller,
or interfere with Seller's ability to improve the Premises, if Buyer terminates
this Agreement or Buyer fails to close on all Phases. These representations
shall be true and correct as of each Phase Closing and shall survive each Phase
Closing.
22. SELLER'S REPRESENTATIONS
A. Seller represents and warrants, to the best of Seller's knowledge, as
follows:
1. AUTHORITY. Subject to Paragraph 26.A: Seller has the full right
and authority to execute this Agreement and consummate all of the transactions
hereby contemplated. This Agreement has been duly authorized, executed and
delivered by and on behalf of Seller. The execution, delivery and the
performance of and compliance with this Agreement by Seller will not (with or
without the giving of notice or lapse of time, or both) result in any violation
of, or be in conflict with, or constitute a default under, the terms of any
contract, note, indenture or other agreements to which Seller is a party, or of
any judgment, decree, order, statute, rule or regulation to which Seller is
subject.
2. NO ATTACHMENT. There are no attachments, executions, assignments
for the benefit of creditors or any pending proceedings, either voluntary or
involuntary, in bankruptcy, which are contemplated or threatened against Seller.
3. NO LITIGATION. There are no existing or pending litigation,
claims, condemnations or sales in lieu thereof, contracts of sale, options to
purchase or rights of first refusal with respect to the Premises or any part
thereof, nor have any such actions, suits, proceedings, claims or other such
matters been, to the best of Seller's knowledge and belief, threatened or
asserted.
4. NO ASSESSMENTS. Seller has received no notice and has no
knowledge of any pending improvements, liens or special assessments to be made
against the Premises by any governmental authority.
5. ALL OWNERS BOUND. The execution of this Agreement by Seller is
effectual without the joinder of any other party and no signatures other than
Seller's will be required to be affixed to the deed of conveyance hereunder in
order to close title as contemplated by the Agreement.
6. NO VIOLATION. There are no violations of law, statutes or
ordinances against the Premises nor any notice thereof, nor have any such
violations been committed by Seller.
7. FIRPTA. Seller represents that it is not now, nor will be at time
of closing, a "foreign person" as described in Section 1445 of the Internal
Revenue Code of 1986, as amended.
8. ACCURACY. All of the documentation supplied by Seller to Buyer
pursuant to this Agreement, whether an exhibit to this Agreement or otherwise,
is true and accurate in all material respects.
9. Seller has not made, and will not make, any commitments or
representations to any applicable governmental authorities, or to adjoining or
surrounding property owners, which would, in any manner, be binding upon Buyer,
or interfere with Buyer's ability to improve the Premises with the construction
of Homes.
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10. Seller has granted no person any contract right or other legal
right to the use of any portion of the Premises, or the furnishings or use of
any facility or amenity on, or relating to, the Premises.
B. The representations and warranties set forth in this Paragraph and in
Paragraph 7, above shall: (1) be true and correct as of each Phase Closing; and
(2) survive each Phase Closing. In addition, the truth of these representations
and warranties is a condition precedent to Buyer's performance of its
obligations under this Agreement. Seller has an affirmative obligation to notify
Buyer of any changes in the representations and warranties during the term of
this Agreement.
C. If any of Seller's representations or warranties set forth in this
Agreement are not true as of the date of each Phase Closing, Buyer, at its sole
option, shall have the right to either: (1) close title to the portion of the
Premises to be conveyed at the Phase Closing; or terminate this Agreement and
xxx Seller for any damages, which damages shall not exceed the value of the
Premises. Seller shall have no liability for damages if the representations and
warranties are not true because of a change in the law between the date of this
Agreement and the date of Closing.
D. Reserved.
23. LICENSE TO ERECT SIGNS/TRAILERS
A. Buyer is hereby granted the right to erect signs and place sales and/or
construction trailers with adequate parking at appropriate locations as
determined by Buyer on any portion of the Premises after the Rezoning Period and
before or after any Phase Closing. In addition, Buyer shall have the right to
have temporary utility connections made to the trailers.
B. The right to erect signs or place trailers is subject to compliance
with all governmental regulations after the Rezoning Period and so long as Buyer
maintains insurance naming Seller as an additional insured.
C. If this Agreement is terminated for any reason, Buyer will promptly
remove, at Buyer's sole cost and expense, any signs, trailers or utility
connections installed in accordance herewith.
24. DOCUMENTS TO BE DELIVERED AT CLOSING
A. Seller shall deliver the following documents at Closing in form and
substance satisfactory to Buyer and to Buyer's title insurance company: (1)
Deed; (2) Affidavit of Title; (3) Corporate Resolution; (4) Bonds. (5) other
document(s) required under the Master Deed to transfer easements and
rights-of-way; (6) (Partial) Release of Mortgage; (7) UCC-3's; (8) Blanket
Assignment of Rights in and to Approvals, Surveys, Engineering Plans,
Environmental and Other Reports and Other Matters; (9) Compliance Agreement;
(10) Reserved(11) Reserved; (12) Reserved. (13) Representations and Warranties;
(14) Paid Receipt of Real Estate Broker; (15) Tax and Utility Bills; (16)
Certificate of Compliance with Section 1445 of the Internal Revenue Code
(FIRPTA); (17) Xxxx of Sale for Personalty; (18) Reserved. (19) Reserved. (21)
Cross-Easement Agreement
B. The Buyer shall deliver the following documents at Closing:
(1) Cross-Easement Agreement; (2) Title Closing Statement; (3) Escrow
Agreement; (4) Limited Liability Company Certificate, (5) Closing
proceeds and (6) copies of Bonds in which Seller is named as an oblige
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C. If Buyer takes title to the entire Premises by reference to a filed
Master Deed and gives back a Note and Mortgage to Seller for the Phase II
condominium units, Buyer at Seller's option, shall convey to Seller a contingent
assignment of all approvals and permits which would permit Seller to complete
the community in accordance with the approvals, permits and condominium
association documents in the event that Buyer does not take title to that
portion of the condominium which is located on the Phase II property.
25. ASSIGNMENT OF CONTRACT
A. This Agreement is binding on the parties and on their respective heirs,
executors, administrators, successors and assigns.
B. Buyer may not assign this Agreement except to another "Hovnanian"
affiliated entity or to an unrelated third party for financing purposes,
provided that such assignment shall not relieve Buyer of its obligations under
this Agreement ("Permitted Hovnanian Assignee"). In addition, once all
conditions precedent to Closing have been met, Buyer may assign all or a portion
of this Agreement to one or more unrelated entities provided that such
assignments shall not relieve Buyer of its obligations as more fully set forth
in this Agreement.
C. Seller may assign this Agreement upon written notice to Buyer but
without the approval of Buyer provided that the Assignee assumes the obligations
under this Agreement and further provided that such assignment shall not relieve
Seller of its financial obligations under this Agreement..
26. OTHER MATTERS
A. Notwithstanding anything to the contrary in this Agreement, Seller
shall be entitled to submit the sale of the Premises hereunder to a vote of its
stockholders at its next Annual Meeting, in which case (i) Seller shall use
reasonable efforts to obtain the approval of its stockholders, by the
affirmative vote of stockholders representing 2/3 of the outstanding common
stock, and (ii) the obligations of Buyer and Seller to complete the Closings
shall be conditioned upon receipt of such approval (and if such approval is not
obtained by March 20, 2005, either party may terminate this Agreement without
liability to the other). The date that Buyer receives notice of such approval is
referred to herein as the Seller Approval Date. Wherever any time period is
measured from the date or Effective Date of this Agreement, it shall mean the
Seller Notice of Approval Date.
B Nothing in this Agreement is intended to, or shall, confer upon any
third party any legal or equitable right, benefit or remedy of any nature
whatsoever except to a Permitted Hovnanian Assignee.
C. Nothing in this Agreement is intended or shall be deemed to constitute
a partnership, agency, employer-employee or joint venture relationship between
Buyer and Seller. Neither party shall incur any debts or make any commitments
for the other, except to the extent, if at all, specifically provided herein.
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IN WITNESS WHEREOF, each party hereto, being authorized to do so and
intending to be legally bound hereby, has duly executed and entered into this
Agreement on the date first set forth above.
ATTEST/WITNESS: X. Xxxxxxxxx North Jersey Acquisitions, L.L.C., a
limited liability company of the State of
Delaware, Buyer
/s/Xxxxxxx Xxxxxx By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Area President
ATTEST/WITNESS: Xxxxx Electronics Corporation, a corporation of the
State of New York, Seller
/s/Xxxxx X. Xxxxxxx By: /s/ Xxxx H.D. Xxxxx
Name: Xxxx H.D. Xxxxx
Title: CEO
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