EXHIBIT 10.01
OPTION CONTRACT OF SALE
THIS AGREEMENT (the "Agreement"), is made as of September 7, 2005,
between Xxxxxx, Inc., a Delaware corporation, having an address at 0000
Xxxxxxxxx Xxxxxx, Xxxx Xxx Xxxx, XX 00000 ("Seller"), and Xxxx Xxxxxxx, with the
right to assign this Agreement at the time of closing to an entity to be formed
in which Xxxxxxx Xxxxx shall be an equity participant and active in the
approvals process outlined in subsection 2(b), below, having an address c/o The
Law Offices of Xxxxxx X. Xxxx, LLC, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
("Purchaser").
W I T N E S S E T H:
Sellers agrees to sell and Purchaser agrees to purchase, upon the
terms and conditions hereinafter set forth,
ALL those certain plots, pieces or parcels of land, with the buildings
and improvements thereon erected, situate, lying and being in the town of West
New York, the County of Xxxxxx and the State of New Jersey, being known and
designated as 0000-0000 Xxxxxxxxx Xxxxxx and 0000-0000 Xxxxxxxxx Xxxxxx and
0000-0000 Xxxxxxxxx Xxxxxx and 0000-0000 Xxxxxxxxxx Xxxxxx, (also being known as
Lots 5 in Block 130 and Lot 13 in Block 133 and Xxx 0-00 xx Xxxxx 000 xxx Xxx 0
xx Xxxxx 130 as shown on the municipal tax maps). Purchaser may cause a survey
and metes and bounds description to be prepared at Purchaser's sole cost and
expense, in which event that description, upon being certified to and accepted
by Seller and its legal counsel, will be deemed attached to and made a part of
this Agreement as EXHIBIT "A" (the land, buildings and improvements being
hereinafter referred to as the "Premises").
1. PURCHASE PRICE
The Purchase Price for the Premises is Ten Million
($10,000,000) Dollars, payable as follows:
(a) Concurrently with the execution of this Agreement, Purchaser shall
deliver to Xxxxxx X. Xxxxx, Esq. (the "Escrow Holder") the sum of Thousand
($50,000) Dollars in immediately available federal funds (the "Initial Deposit")
to be held by the Escrow Holder in a federally insured, interest bearing account
or group of accounts. The Initial Deposit shall be disbursed or applied by the
Escrow Holder in accordance with the provisions of this Agreement. Interest
shall follow the Initial Deposit.
(b) On the sixtieth (60th) day following full execution of this
Agreement, Purchaser shall deliver to the Escrow Holder the additional sum of
Thousand ($50,000) Dollars in immediately available federal funds (together with
the funds deposited in accordance with P. 1 (c), below, the "Xxxxxxx Money") to
be held by the Escrow Holder in a federally insured, interest bearing account or
group of accounts. The Xxxxxxx Money is non-refundable and shall immediately
become the absolute property of and paid to the Seller on the ninety-first
(91st) day following full
execution of this Agreement. Purchaser shall have no right to seek repayment of
all or any portion of the Xxxxxxx Money for any reason whatsoever except for
Seller's cancellation due to the environmental conditions set forth in Article
8, below.
(c) On the ninetieth (90th) day following full execution of this
Agreement, Purchaser shall pay to the Escrow Holder the sum of One Hundred
Thousand ($100,000) Dollars in immediately available federal funds (together
with the funds deposited in accordance with P. 1 (b), above, the "Xxxxxxx
Money"). The Xxxxxxx Money is non-refundable and shall immediately become the
absolute property of the Seller on the ninety-first (91st) day following full
execution of this Agreement. Purchaser shall have no right to seek repayment of
all or any portion of the Xxxxxxx Money for any reason whatsoever except for
Seller's cancellation due to the environmental conditions set forth in Article
8, below.
(d) On the one hundred twentieth (120th) day following full execution
of this Agreement, Purchaser shall deliver to the Escrow Holder the additional
sum of Seventy Five Thousand ($75,000) Dollars in immediately available federal
funds (together with the Initial Deposit, the "Deposit") to be held by the
Escrow Holder in a federally insured, interest bearing account or group of
accounts. The Deposit shall be disbursed or applied by the Escrow Holder in
accordance with the provisions of this Agreement. Interest shall follow the
Deposit.
(e) On the one hundred fiftieth (150th) day following full execution of
this Agreement, Purchaser shall deliver to the Escrow Holder the additional sum
of Seventy Five Thousand ($75,000) Dollars in immediately available federal
funds (to be added to and constitute the "Deposit") to be held by the Escrow
Holder in a federally insured, interest bearing account or group of accounts.
The Deposit shall be disbursed or applied by the Escrow Holder in accordance
with the provisions of this Agreement. Interest shall follow the Deposit.
(f) On the one hundred eightieth (180th) day following full execution
of this Agreement, Purchaser shall deliver to the Escrow Holder the additional
sum of Seventy Five Thousand ($75,000) Dollars in immediately available federal
funds (to be added to and constitute the "Deposit") to be held by the Escrow
Holder in a federally insured, interest bearing account or group of accounts.
The Deposit shall be disbursed or applied by the Escrow Holder in accordance
with the provisions of this Agreement. Interest shall follow the Deposit.
(g) On the two hundred tenth (210th) day following full execution of
this Agreement, Purchaser shall deliver to the Escrow Holder the additional sum
of Seventy Five Thousand ($75,000) Dollars in immediately available federal
funds (to be added to and constitute the "Deposit") to be held by the Escrow
Holder in a federally insured, interest bearing account or group of accounts.
The Deposit shall be disbursed or applied by the Escrow Holder in accordance
with the provisions of this Agreement. Interest shall follow the Deposit.
(h) The balance of the Purchase Price, namely Nine Million Five Hundred
Thousand ($9,500,000) Dollars shall be payable at Closing in immediately
available federal funds by wire transfer or other form acceptable to Seller,
subject to satisfaction of the mortgage contingency set forth in Article 13,
below.
2. CONTINGENCIES
This Agreement is made upon the following conditions:
(a) Purchaser shall have an initial "due diligence" period of
ninety (90) days with the right to terminate for any reason. Before
entering onto the Property of perform any aspect of its due diligence,
Purchaser shall deliver to Seller evidence of liability insurance as
provided for in ss. 7, below.
(b) Seller, at no cost or expense to them, shall cooperate and
assist Purchaser in obtaining approval from the appropriate
governmental authorities allowing the Premises to be used for
residential purposes with a minimum density of 200 residential units.
Seller agrees to sign all necessary documents to allow Purchaser to
apply for the approvals. Purchaser shall have the following time
periods within which to obtain the approvals:
Number of Days Following
Execution and Delivery
of the Agreement Action to be Completed
------------------------------------------ -------------------------------------------------------
120 Filing Application for Development Under NJ
Municipal Land Use Law (NJSA 40:55D-1, et seq., the
"Law").
165 Application for Development deemed
"complete" as provided for in the Law and being
placed on the calendar for the first Public
Hearing on the Application for
Development.
300 Decision by the Planning Board or Zoning
Board of Adjustment and reading and adoption of
the memorializing resolution.
(c) If any of these benchmarks are not accomplished or if
Purchaser does not waive all of those which have not been accomplished,
then Seller may terminate this Agreement upon ten (10) days written
notice to Purchaser, provided that if Purchaser either: (a) cures such
defect within the ten (10) day period; or (b) pays to Seller the sum of
Seventeen Thousand Five Hundred ($17,500) Dollars per each thirty (30)
day period commencing on the 301st day following execution and delivery
of the Agreement, which payments shall not be credited against the
Purchase Price, then Seller's termination shall be deemed withdrawn as
to that specific item. The extension of this contingency period may
continue for up to, but not exceeding, a total of four (4) periods of
thirty (30) days each, at the end of which Seller's right to terminate
this Agreement shall not be subject to
any further extensions without Seller's written agreement and upon such
terms as Seller, in its sole discretion, shall require of Purchaser.
3. SELLER'S REPRESENTATIONS
Seller represents to Purchaser that:
(a) Seller is the sole owner of the Premises, and has
full power, authority and right to execute, deliver and
perform this Agreement.
(b) Seller is a corporation which has been duly
formed and is in good standing under the Laws of the State of
Delaware.
(c) Seller has neither notice nor knowledge of any
pending proceedings for the taking of all or any portion of
the Premises by condemnation or eminent domain, and to the
best of Seller' knowledge no such proceeding is about to be
commenced.
(d) Seller is not a "foreign person" as defined in
Section 1445(f)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"). If Seller fails or refuses to deliver to
Purchaser at the closing a certificate evidencing that Seller
is not a "foreign person", or if Seller is a "foreign person",
then Purchaser shall be entitled to withhold from the Purchase
Price a tax equal to ten percent of the Purchase Price, as
required by Section 1445 of the Code. In the event of such a
withholding, Purchaser shall remit such tax to the Internal
Revenue Service and shall file the required return, and the
closing hereunder shall not be otherwise affected.
4. PURCHASER'S REPRESENTATIONS
Purchaser represents as follows:
(a) Purchaser represents that Purchaser possesses sufficient funds, together
with the mortgage as stated in this Agreement, to close this transaction at the
stated purchase price.
5. TENANCIES
Seller represents that the Seller is one of the tenants at the Premises
occupying approximately fifty (50%) percent of the total Premises (the "Leased
Portion"). Purchaser agrees that Seller may remain as a tenant at the Leased
Portion for a period of five (5) months commencing on the first day of the first
full month following the closing (the "Lease Period") at no cost or expense to
Seller other than payment of its fifty (50%) percent pro rata share of the costs
for utilities, real estate taxes, sewer charges and insurance premiums, in such
amounts which are consistent with the current coverages (collectively, the "Pass
Through Expenses). Purchaser agrees that Stylecrest Fabrics, On-The-Xxxx, Pisces
Sports and ODK (collectively, the "Tenants") may each remain as a tenant for the
Lease Period as defined above. Seller agrees that
Seller shall, at its sole cost and expense, cause the Tenants to vacate,
surrender and deliver up its leased premises on or prior to the last day of the
Lease Period. If any of the Tenants or Seller shall remain in possession after
the end of the Lease Period (the "Holdover") then Seller shall pay to Purchaser
the sum of $500 per day for each day of Seller's Holdover and $500 per day for
each day of each of the Tenant's Holdover.
6. CONDITION OF PREMISES.
Purchaser shall accept title to the Premises in their "as is" and
"where is" condition on the date of the Closing and shall accept the surrender
and delivering up of the Premises and the Leased Portion, as provided for in
Section 5, above, in their "as is" and "where is" condition.
7. INSPECTIONS BY PURCHASER
Purchaser shall have the right and the option to enter upon the
Premises to conduct physical and engineering inspections of the Premises and
undertake such other inspections as Purchaser shall deem appropriate (through
Purchaser's agents, consultants or representatives, as the case may be). No
inspections permitted under this Agreement shall take place unless and until
Purchaser and each of its agents, consultants or representatives provides to
Seller proof of insurance in the form of a Certificate of Insurance evidencing
liability and completed operations coverages naming Seller as an additional
insured in such amounts as Seller may reasonably accept. Any damage to the
Premises shall be repaired and restored by Purchaser it its sole cost and
expense.
8. ENVIRONMENTAL COMPLIANCE
Seller, to the best of its knowledge, information and belief, state to
the Purchaser that:
(a) There is no pending claim, lawsuit, proceeding,
or other legal, quasi-legal, or administrative challenge
concerning the Premises or the operation thereof and no such
claim, lawsuit, proceeding or challenge is threatened by any
person or entity.
(b) Seller is presently conducting studies of the
environmental condition of the Premises relating to an
underground storage tank which may have leaked. Seller is
awaiting advice from the New Jersey Department of
Environmental Protection ("NJDEP") as to whether ground water
testing or monitoring will be required. If the cost to test,
monitor and remediate any Hazardous Substance will exceed
$250,000, then Seller may terminate this Agreement at any time
prior to Closing by notice to Purchaser to be dispatched not
later than the 30th day following the date that Seller learns
that the cost will exceed $250,000. If Seller does not
terminate this Agreement, then Seller shall be responsible for
all costs to test, monitor and remediate Hazardous Substances
at the Premises both before and after Closing and shall obtain
from NJDEP a "No Further Action" letter approving the
remediation as being complete and permitting the sale of the
Premises to the Purchaser. Purchaser shall execute and
record such instrument as is required to implement and
complete such remediation under the Industrial Site Recovery
Act, N.J.S.A. 13:1K-6 et seq. and N.J.S.A. 58:10B-1 et seq.
("ISRA"), including the instrument now known as a Deed Notice
("Deed Notice"). The Premises may be subject to irrevocable
environmental restrictions as NJDEP may determine which
restrictions shall run with the land and shall bind the
Premises in perpetuity, and all present and future owners or
operators on the Premises. Purchaser consents to the Deed
Notice, environmental restrictions and such other
institutional controls which NJDEP may require in order for
Seller to obtain either a No Further Action letter ("NFA") or
an Administrative Consent Order ("ACO") permitting the sale of
the Premises, provided, however, that no such Deed Notice
shall limit or prevent the development and use of the Premises
for multi-family residential purposes.
As used herein, "Hazardous Substance" means any substance which listed
as "hazardous" or "toxic" in the regulations implementing the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 6901 et seq., or under applicable New Jersey law.
9. CLOSING DATE
The closing of title pursuant to this Agreement (the "closing") shall
be held at the offices of Purchaser's attorney or Purchaser's mortgage lender,
located in Essex, Bergen or Xxxxxx Counties in New Jersey thirty (30) days
following the satisfaction of all contingencies for mortgage financing,
environmental compliance and receipt of final non-appealable approval of
Purchaser's Application for Development as provided for in sub-part 2. (a),
above.
If this Agreement is properly terminated by Purchaser as permitted by
any provision of this Agreement, then the Deposit, exclusive of the Xxxxxxx
Money, and all accrued interest shall be returned to Purchaser and neither
Seller nor Purchaser shall have any further rights against or obligations to the
other.
10. CONDITIONS OF CLOSING
It shall be a condition to Purchaser's obligation to close title that:
(a) The representations of Seller set forth herein
shall be true as of the Closing Date.
(b) The covenants of Seller set forth herein shall
have been complied with as of the Closing Date.
(c) Seller shall convey to Purchaser a title to the
Premises in accordance with this Agreement.
(d) Seller shall deliver possession of the Premises
to Purchaser on the Closing Date in the condition required by
this Agreement and in accordance with the terms, covenants and
conditions of this Agreement.
Without limiting the other rights of Purchaser and subject to the
provisions of Section 7, above, Seller shall permit Purchaser and such agents
and experts of Purchaser as Purchaser shall designate access to the Premises
during reasonable business hours, for purposes of such independent investigation
as Purchaser shall desire to conduct. Any and all proposed entries into tenant
space shall require reasonable notice to Seller of not less than 24 hours.
Purchaser shall have the right to assign this Agreement of sale to an
entity to be formed by the Purchaser, in which the Purchaser has an interest,
such assignment to be effective at the Closing. Seller shall designate such
entity as the Grantee in the Deed to be delivered at Closing. Such assignment
shall be deemed to be with full recourse until the payment of the purchase
price, in full.
11. TITLE
Title to the Premises at Closing shall be insurable at regular rates by a title
insurer authorized to transact business in the State of New Jersey free and
clear of all liens and encumbrances, other than the continued right of Seller to
occupy the Premises.
12. DEED
At Closing, the Seller shall execute, acknowledge and deliver a
standard form of Bargain and Sale Deed with Covenants against Grantor's Acts
(the "Deed").
13. MORTGAGE CONTINGENCY
This Agreement is made upon the condition that Purchaser shall receive,
in writing, a mortgage commitment within sixty (60) days following Purchaser's
receipt of preliminary approval of its Application for Development as provided
for in P. 2 (a), above, pursuant to which a lending institution shall issue to
Purchaser a written commitment in the usual form of such institution to make a
conventional first mortgage on the Premises in the principal amount of
$7,500,000, for a term of not less than 10 years, bearing interest at then
prevailing rate for such a loan. Purchaser shall pay all fees and charges
required in connection with such application and loan. Purchaser shall agree to
guarantee the Note and Mortgage if the proposed lender requires such a
guarantee.
If such a commitment is not issued within the contingency period
provided for in the preceding paragraph, then, Purchaser may elect to terminate
this Agreement by delivering to Seller' attorney, within 10 business days after
the expiration of said period, a written notice of such election. If this
Agreement is terminated as provided above, Seller shall direct Escrow Holder to
return the Deposit, exclusive of the Xxxxxxx Money, to Purchaser, with any
interest earned thereon, whereupon Seller and Purchaser shall have no further
rights against each other hereunder.
Seller shall cooperate fully with the Purchaser and Purchaser's lending
institution in the Purchaser obtaining the mortgage, at no cost or expense to
Seller.
14. CLOSING DOCUMENTS
Seller shall deliver to Purchaser at the closing:
(a) The Deed.
(b) A xxxx of sale for all fixtures, equipment and
personal property included in this sale, with, if any.
(c) If the title examination discloses judgments,
bankruptcies or other returns against other persons having
names the same as or similar to Seller, Seller shall deliver
an affidavit based upon Seller' knowledge information and
belief in the standard form utilized in Xxxxxx County, New
Jersey showing that such judgments, bankruptcies and other
returns are not against Seller.
(d) A certificate reaffirming the representations of
Seller and Purchaser stated in this Agreement as of the date
of the Closing.
15. ADJUSTMENTS AND COSTS
The following shall be apportioned as of midnight of the day preceding
the Closing Date:
(a) Real estate taxes, water charges and sewer rents, if any, on the
basis of the lien period for which assessed. If on the Closing Date the tax rate
shall not have been fixed, the apportionment shall be based upon the tax rate
for the preceding year applied to the latest assessed valuation; however,
adjustment will be made when the actual tax amount is determined. If there are
water meters on the Premises, Seller shall furnish readings thereof to a date
not more than fifteen days prior to the Closing Date. Meter charges shall be
apportioned on the basis of the last reading. Upon the taking of a subsequent
actual reading, such apportionment shall be readjusted. The provisions of this
clause (a) shall survive the closing for a period of thirty (30) days.
(b) Any errors in computing adjustments at the closing shall be
corrected after the closing.
(c) If the adjustments result in a payment due Seller, such payment
shall be made at the closing by a cashier's or certified check of Purchaser. If
the adjustments result in a payment due Purchaser, such payment shall be
credited against the cash portion of the Purchase Price due at the closing.
(d) The amount of any unpaid real estate taxes, assessments, water
charges and sewer rents which Seller is obligated hereunder to discharge or
satisfy, with any interest or penalties thereon, at the option of Seller may be
allowed as a credit to Purchaser at the closing, provided
official bills therefor, showing the amount due including any interest or
penalties to a date not less than two days after the Closing Date, are furnished
at the closing. If on the Closing Date there are any liens or encumbrances which
Seller is obligated hereunder to discharge or satisfy, Purchaser agrees to
provide at the closing, upon five days prior request, separate certified checks
to facilitate the discharge or satisfaction of items referred to in this
paragraph.
(e) If on the Closing Date the Premises shall be affected by an
assessment which is or may become payable in annual installments, and the first
installment is then a lien, then only the installment then due and payable shall
be paid by Seller at the closing.
(f) Seller shall pay any applicable transfer tax or stamp tax payable
by reason of the delivery of the deed. Seller and Purchaser agree to execute,
swear to, and cause to be filed any applicable transfer tax return or other
return required in connection with the closing.
(g) Purchaser shall pay any applicable tax or transfer fee arising out
of or relating to the permitted use of the Premises for residential purposes.
(h) Rent for all Tenants (as that term is defined in ss. 5, above)
shall be adjusted as of the Closing Date. The term "Tenants" does not include
the Seller (again, see ss. 5, above).
16. ESCROW CONDITIONS
Escrow Holder shall hold the Deposit in accordance with this Agreement,
or a joint instruction signed by Seller and Purchaser, or separate instructions
of like tenor signed by Seller and Purchaser, or a final judgment of a court of
competent jurisdiction.
Escrow Holder shall deposit the Deposit in an interest bearing account,
or invest the Deposit in treasury bills, certificates of deposit or other income
producing investments.
Escrow Holder is held harmless by both Seller and Purchaser, other than
for gross negligence or willful misconduct and that in the event of a dispute,
Escrow Holder shall be permitted to represent Seller in negotiations or
litigation, or both.
In the event of any dispute relating to this Agreement, Escrow Holder
may act as legal counsel to Seller.
17. BROKERAGE
Seller and Purchaser each represent and warrant to the other that they
have not dealt with any broker in connection with this sale. Each party hereby
indemnifies the other against any claims by any real estate broker arising out
of promises or agreements by that party with any such real estate broker, such
indemnification to include all damages, settlements, costs and expenses,
including reasonable attorney's fees.
18. NOTICES
All notices, demands and other communications required or permitted to
be given hereunder shall be in writing and shall be deemed to have been properly
given if delivered sent by United States registered or certified mail, return
receipt requested, to Seller or Purchaser, as the case may be, at their
addresses first above written, or at such other addresses as they may designate
by notice given hereunder. Copies of any such communication shall be delivered
to The Law Offices of Xxxxxx X. Xxxx, LLC, Xxx Xxxxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxx, XX 00000 if addressed to Purchaser, and to Xxxxxx X. Xxxxx, Esq.,
0000 XxXxxxxx Xxxxxxx, Xxxxxx, Xxx Xxxxxx 00000 if addressed to Seller, in the
same manner as stated above in this Section 18.
19. TAX-FREE EXCHANGE.
Seller may elect to proceed with this transaction as part of a tax-free
exchange of like-kind properties under ss. 1031 of the Internal Revenue Code.
Purchaser, at no cost or expense to Purchaser and without altering any material
term or condition of this Agreement, shall cooperate with Seller in connection
with the proposed tax-free exchange.
20. MISCELLANEOUS
(a) The representations and warranties of Seller hereunder shall not
survive the closing except as may be specifically provided for elsewhere in this
Agreement.
(b) This Agreement may not be altered, amended, changed, waived, or
modified in any respect or particular unless the same shall be in writing signed
by Seller and Purchaser.
(c) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and permitted assigns.
(d) The Tax Identification or Social Security Numbers of Seller and
Purchaser are as follows:
Seller: 00-0000000
Purchaser:
(e) The submission of this Agreement to Purchaser or its attorney
shall not be construed as an offer to sell the Premises on the
terms and conditions stated in this document. A binding
agreement will be deemed to have come into existence only upon
the full execution and delivery of this document, which be
accomplished in counterparts, by both Seller and Purchaser.
IN WITNESS WHEREOF Seller and Purchaser have duly executed this
Agreement on the date first above written.
SELLER:
Xxxxxx, Inc.
By: /s/ Xxxxxx Xxxxxxxx, President
BUYER:
By: /s/ Xxxx Xxxxxxx
EXHIBIT A
PROPERTY DESCRIPTION
[To be attached at the option of the Purchaser upon Purchaser obtaining, at
Purchaser's sole cost and expense, a survey, certified to Seller and its
attorney, and a metes and bounds description based upon that survey]
