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AGREEMENT OF PURCHASE AND SALE
THIS
AGREEMENT OF PURCHASE AND SALE (this “
Agreement ”)
is made by I. C. ISAACS & COMPANY LIMITED PARTNERSHIP, a
Maryland limited partnership (“
Seller ”),
and D & R REALTY II, LLC, a Maryland limited liability company
(“
Purchaser” ),
as of March 14, 2008 (the “
Effective Date ”).
EXPLANATORY STATEMENT
Seller
is the owner of the Property (as defined below). Seller
desires to sell the Property to Purchaser and Purchaser
desires to buy the Property from Seller pursuant to the terms
and conditions of this Agreement.
NOW,
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are acknowledged, Seller and
Purchaser agree as follows:
Section
1.
Property; Purchase and Sale
Seller
agrees to sell, and Purchaser agrees to buy, all of Seller's
right, title and interest in the following property: (a) the
fee simple interest of Seller in a parcel containing .577
acres, more or less, described as Map 26, Section 16, Block
6311, Lot 55, and as further described on
Exhibit A ,
attached to and made a part of this Agreement (the "
Land "),
located in the City of Baltimore, State of Maryland; (b) all of
Seller’s interest, if any, in the buildings and other
improvements located on the Land, including a building consisting
of 25,200 square feet, more or less, of office and warehouse space,
being generally known as 3840 Bank Street, Baltimore, Maryland
21224 (the "
Improvements ");
(c) together with all fixtures, equipment, and other personal
property owned by Seller and affixed to the Improvements (the
“
Fixtures ”)
(collectively, the Land, Improvements and the Fixtures are
sometimes referred to in this Agreement as the "
Property ").
Section
2.
Purchase Price and Deposits
The
purchase price which Purchaser agrees to pay and Seller agrees
to accept for Seller's interest in the Property shall be the
sum of Nine Hundred Thousand Dollars ($900,000.00) (the
"
Purchase Price "),
payable as follows:
(a)
An
earnest money deposit (the "
Deposit ")
of Twenty-Five Thousand Dollars ($25,000.00), in cash or
immediately available funds, to be deposited with FIRST MOUNTAIN
TITLE, LLC (the "
Escrow
Agent ")
by Purchaser upon Purchaser’s execution of this Agreement,
and that is refundable to Purchaser, subject to the provisions
of
Section 5.1 ,
until the end of the Contingency Period (as defined below), at
which point the Deposit becomes non-refundable except upon
Seller’s default as set forth in
Section 3.2 or
upon the occurrence of any event set forth in
Section 6 ;
and
(b)
The
balance of the Purchase Price shall be paid at time of Closing
(as defined in
Section 4 )
by federal wire transfer to Seller or its designee.
The
Deposit shall be paid to Seller at the Closing as a credit
against the Purchase Price.
Three
(3) original copies of this Agreement shall be delivered to
the Escrow Agent immediately after both parties have executed
it, together with the Deposit from Purchaser. The Escrow Agent
shall execute this Agreement, retain one copy and deliver one
fully executed original copy to each of Purchaser and
Seller.
Section
3.
Failure to Close
3.1
Purchaser's Default .
In
the event that Purchaser fails to perform any of its obligations
under this Agreement and fails to correct such failure within ten
(10) days after written notice is given to Purchaser by Seller,
Seller's remedies shall include any remedies available at law or in
equity, in which event the Escrow Agent shall immediately deliver
the Deposit to Seller. Seller may retain the Deposit, terminate
this Agreement upon notice to Purchaser, in
which event neither party shall have any further rights or
obligations with respect to the other under this Agreement, except
as to the terms of this Agreement which expressly survive Closing
or the earlier termination of this Agreement (the “
Surviving Covenants ”),
and
sue for actual damages suffered by Seller.
3.2
Seller's Default .
In the event that Purchaser has complied with all of the covenants
and conditions contained in this Agreement and is ready, willing
and able to take title to the Property in accordance with this
Agreement, and Seller fails to consummate this Agreement and convey
title as set forth in this Agreement within
ten (10) days after written notice is given to Seller by
Purchaser ,
then Purchaser may elect to (i) seek specific performance requiring
Seller to perform any covenants of Seller under this Agreement, or
(ii) terminate this Agreement by written notice to Seller, in which
event neither party shall have any further rights or obligations
with respect to the other under this Agreement, except as to the
Surviving Covenants, obtain the Deposit from the Escrow
Agent, and
sue for actual damages suffered by Purchaser .
Section
4.
Closing and Transfer of Title
4.1
Closing .
The time of a closing of this sale (the "
Closing ")
shall be designated by Purchaser by written notice given to Seller
not less than five (5) days prior to the proposed closing date and
shall be held in the office of the Escrow Agent or by mail. In no
event shall the date of Closing (the “
Closing Date ”)
be more than sixty (60) days after the expiration of the
Contingency Period (as defined below). This Agreement shall
terminate if transfer of title is not completed by the Closing Date
(unless such failure to close is due to Seller's default, or unless
the date for Closing is extended by written agreement of the
parties). If the Closing has not occurred by the ninety-fifth
(95
th )
day after the Effective Date for any reason other than
Seller’s default or earlier termination of this Agreement,
then the parties agree that the Escrow Agent shall immediately
deliver the Deposit to Seller without the need for any further
notice or authorization from either party.
4.2
Closing Procedure .
At Closing, Seller shall execute and deliver or cause to be
executed and delivered:
(a)
a
Special Warranty Deed (the “
Deed ”)
in proper form for recording, conveying Seller's right, title and
interest in the Property to Purchaser or
to Purchaser’s designee subject to:
(1)
Existing
leases, easements, sidetrack and license agreements, if any,
whether of record or not;
(2)
Covenants
and conditions of record, if any;
(3)
Taxes
and special assessments against the Property, if
any;
(4)
Zoning
laws and municipal regulations, if any;
(5)
Environmental
laws and regulations, if any;
(6)
Building
line restrictions, use restrictions and building restrictions
of record, if any; and
(7)
Encroachments,
overlaps and other matters which would be disclosed by an
accurate current survey;
(b)
an
affidavit that Seller is not a "foreign person" in
substantially the form of
Exhibit B ,
attached to and made a part of this Agreement;
(c)
an
assignment of Seller’s interest in leases on the
Property, if any;
(d)
a
bill of sale, if applicable, for any Fixtures;
(e)
a
lease for Seller’s continued use and occupancy of the
Property after Closing in substantially the form of
Exhibit C ,
attached to and made a part of this Agreement (the “
Lease ”);
(f)
a
settlement statement prepared by the Title Company and
satisfactory to both Purchaser and Seller setting forth the
source of funds and allocation of costs for this transaction
(the “Settlement Sheet”); and
(g)
all
documents, certifications and affidavits reasonably and
customarily required by the Title Company for issuance of the
Title Policy pursuant to the Title Report referenced in
Section 5.2 ,
.
4.3
Purchaser's Performance .
At Closing, Purchaser will cause the Purchase Price and funds equal
to all costs of Closing payable by Purchaser pursuant to this
Agreement to be delivered to the Escrow Agent. Purchaser shall also
execute and deliver or cause to be executed and delivered the Lease
and Settlement Sheet.
Section
5.
Contingency Period; Right to Continue Marketing; Restoration
Rights .
5.1
Contingency Period .
Purchaser
shall have until 11:59 p.m., Eastern time, April 13, 2008 (the
“
Contingency Period ”)
to conduct a title search, feasibility studies, and any other
investigation of the Property which Purchaser chooses to conduct,
including but not limited to environmental audits. Purchaser and
Seller shall also negotiate and agree upon the final form of a
lease pursuant to
Section 14 of
this Agreement. Purchaser may choose to terminate this Agreement
for any reason by written notice to Seller prior to the end of the
Contingency Period. Upon receipt of such notice of termination,
Seller shall notify the Escrow Agent to deliver any outstanding
cost of restoring the Property as described in this Section to
Seller, with the remainder of the Deposit to be returned to
Purchaser. During the Contingency Period, Purchaser, its agents,
employees, contractors and engineers shall have the right from time
to time to enter upon the Property at their risk and expense for
the purpose of inspecting the same and conducting surveys,
engineering studies, borings, soil tests, investigations,
feasibility studies, environmental audits, and the like
(individually or collectively, the “
Studies ”),
but only to the extent that Purchaser has arranged a site visit at
least one (1) day in advance with Seller, and only to the extent
that Seller can accompany Purchaser or its representative on site
if Seller chooses to do so. In any event, any such entry is at
Purchaser or its agent’s sole risk. All such entries shall be
made in such a manner as to minimize interference with the use and
occupancy of the Property by Seller. During the Contingency Period,
and thereafter unless and until Purchaser delivers to Seller
evidence of Purchaser’s financial ability to complete the
purchase satisfactory to Seller in its reasonable discretion,
Seller shall be permitted to continue all marketing efforts
relating to the Property and to enter into agreements for the
purchase and sale of the Property with other potential purchasers;
such agreements shall be contingent upon the termination of this
Agreement. Upon written notice from Seller, Purchaser shall
immediately restore the Property, to the extent the Property has
been affected by any Studies or by entry onto the Property by or on
behalf of Purchaser, to its prior condition at Purchaser’s
sole cost. Purchaser’s obligation to restore the Property as
described in this Section shall survive termination of this
Agreement.
5.2
Title Review .
During the Contingency Period, Purchaser may obtain a title
report
or
title insurance commitment (the "
Title Report "),
issued by a national title company (the "
Title Company ").
If there shall exist any other condition or matter affecting title
to which Purchase objects (a “
Title Matter ”),
Purchaser shall, within five (5) days after receipt of the Title
Report (but in any event prior to the end of the Contingency
Period), notify Seller in writing of any such Title Matter. Such
written notice of a Title Matter shall state Purchaser's objection
with specificity and shall be limited to matters which would render
title to the Property unmarketable. If Seller does not receive
Purchaser’s written notice of a Title Matter within such five
(5) day period or by the end of the Contingency Period, whichever
is earlier, then it shall be automatically and conclusively
presumed that Purchaser has waived all objections to title. Upon
receipt of such notice of a Title Matter, Seller may (i) terminate
this Agreement by written notice to Purchaser and Seller shall then
direct the Escrow Agent to return the Deposit (less any costs
payable by Purchaser as described in
Section 5.1 )
to Purchaser, or (ii) elect to cure such Title Matter. If Seller
elects to cure such Title Matter and does so within 15 days after
receipt of Purchaser’s notice, or, if any such Title Matter
is such that it cannot be cured within 15 days, but Seller has
commenced curing such Title Matter and thereafter diligently
proceeds to perfect such cure, then this Agreement shall continue
in full force and effect and the Closing Date shall be adjusted
accordingly. If Seller chooses not to cure a Title Matter or
otherwise fails to cure a Title Matter within the required time
period, then Purchaser may either (a) waive any Title Matter that
Seller chooses not to cure or otherwise fails to cure, and upon
receipt by Seller of such waiver in full from Purchaser, this
Agreement shall remain in full force and effect or (b) Purchaser
may terminate this Agreement pursuant to
Section 5.1 .
Notwithstanding anything to the contrary in this
Section 5.2 ,
Seller shall remove any monetary liens applicable to the Property
prior to or in connection with Closing. If requested by Seller,
Purchaser will confirm in writing whether this title contingency
has been satisfied and, if so, the date on which it was
satisfied.
If
Purchaser or any lender requests or requires the issuance of a
title insurance policy (the “
Title Policy ”),
or the issuance of such policy with extended coverage, all Title
Policy premiums shall be at the sole cost and expense of Purchaser
and not Seller, and satisfaction of such request or requirement
shall not delay Closing.
5.3
Seller Deliveries .
Purchaser acknowledges that Seller has previously provided to
Purchaser copies of all drawings, site work plans, title policies,
plats, surveys, wetland studies, appraisals, environmental reports,
leases and the like relating to the Property that are available to
or in the possession of Seller, such documents being listed
on
Exhibit D ,
attached to and made a part of this Agreement (the “
Feasibility Documents ”).
Purchaser further acknowledges that Seller has provided the
Feasibility Documents solely to assist Purchaser with its
evaluation of the Property, and Seller makes no representation or
warranty whatsoever as to the accuracy or completeness of any such
documents or materials provided to Purchaser. Purchaser may not
rely on Seller for the accuracy or completeness of any Feasibility
Document or related information. Purchaser shall be fully and
solely responsible for verifying any information it deems material
or relevant to its evaluation of the Property.
Section
6.
Loss Due to Casualty or Condemnation
The
entire risk of loss by condemnation, casualty or other loss
relating to the Property shall be that of Seller. It is also
understood and agreed that Seller shall maintain, at
Seller’s cost, the current level of insurance on the
Property. If prior to Closing the Property, or any part
thereof, is taken by condemnation or materially damaged,
either Seller or Purchaser may terminate this Agreement, and
the Deposit shall be returned to Purchaser, subject to the
provisions of
Section 5.1 .
Section
7.
Maintenance of the Property
Between
the Effective Date and the Closing Date, Seller shall continue
to maintain the Property in good repair, reasonable wear and
tear excepted. During the period from the Effective Date to
the Closing Date, Seller shall not enter into any new lease
for any portion of the Property nor shall Seller enter into
any new contract relating to the operation of the Property
without Purchaser's consent unless the same may be cancelled
on the Closing Date without cost to Purchaser.
Section
8.
Broker
Purchaser
and Seller represent to each other that they have dealt with
no agent or broker who in any way has participated as a
procuring cause of the sale of the Property, except UGL Equis,
who represented Seller, and Remax Sales, who represented
Purchaser. Upon Closing, Seller shall pay a commission to UGL
Equis in the amount of four percent (4%) of the Purchaser
Price and shall pay a commission to Remax Sales in the amount
of two percent (2%) of the Purchaser Price. Subject to the
foregoing, each party represents and warrants to the other
that the representing party has dealt with no real estate
broker, agent or finder other than the parties described above
in connection with this transaction, and that there is no
commission, charge or other compensation due on account
thereof. Purchaser and Seller each agree to defend, indemnify
and hold harmless the other against and from any inaccuracy in
such party’s representation. The provisions of
this
Section 8 shall
survive the Closing and any termination of this
Agreement.
Section
9.
Representations and Warranties
9.1
Limitations on Representations and Warranties
.
Purchaser agrees and acknowledges that, except as set forth
in
Section 9.2 below,
neither Seller nor any agent, attorney, employee or representative
of Seller has made any representation whatsoever regarding the
subject matter of this sale, or any part thereof, including
(without limiting the generality of the foregoing) representations
as to the physical nature or condition of the Property or the
capabilities thereof, and that Purchaser, in executing, delivering
and/or performing this Agreement, does not rely upon any statement
and/or information to whomever made or given, directly or
indirectly, orally or in writing, by any individual, firm or
corporation. Purchaser agrees to take the Property "
AS IS ,"
as of the Effective Date, reasonable wear and tear, minor damage
caused by the removal of any personal property or fixtures not
included in this sale, excepted. SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES AS TO THE PHYSICAL CONDITION OF THE PROPERTY, THE
FINANCIAL CONDITION OR VIABILITY OF THE PROPERTY, OR THE
SUITABILITY THEREOF FOR ANY PURPOSE FOR WHICH PURCHASER MAY DESIRE
TO USE IT. SELLER EXPRESSLY DISCLAIMS ANY WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE AND ANY
OTHER WARRANTIES OR REPRESENTATIONS AS TO THE PHYSICAL CONDITION OF
THE PROPERTY. PURCHASER, BY ACCEPTANCE OF THE DEED, AGREES THAT IT
HAS SUFFICIENT OPPORTUNITY UNDER THIS AGREEMENT TO INSPECT THE
PROPERTY AND ACCEPTS SAME "AS IS" AND "WITH ALL
FAULTS".
9.2
Seller’s Representations and Warranties
.
Seller makes the following representations and warranties and
agrees that Purchaser's obligations under this Agreement are
conditioned upon the truth and accuracy of such representations and
warranties, both as of this date and as of the Closing
Date:
(a)
Seller
has the power and authority to enter into this Agreement and
convey Seller's interest in the Property to Purchaser;
and
(b)
To
the best of Seller's knowledge, Seller has received no written
notice of any existing or pending litigation, administrative
proceeding, violation of law or condemnation or sale in lieu
thereof, that would affect any portion of the Property;
and
(c)
To
the best of Seller's knowledge, no approvals or consents by
third parties or governmental authorities are required in
order for Seller to consummate the transactions contemplated
by this Agreement; and
(d)
Seller
is not a foreign person within the meaning of Section
1445(f)(3) of the Internal Revenue Code of 1986.
9.3
Seller's Knowledge .
Whenever the term "to the best of Seller's knowledge" is used in
this Agreement or in any representations and warranties given to
Purchaser at Closing, such knowledge shall be the actual knowledge
of Timothy J. Tumminello (the "
Key
Personnel ").
Seller shall have no duty to conduct any further inquiry in making
any such representations and warranties, and no knowledge of any
other person shall be imputed to the Key Personnel.
9.4
Purchaser's Representations and Warranties .
Purchaser represents and warrants to Seller that:
(a)
Purchaser
has the power and authority to enter into this Agreement and
to purchase the Property; and
(b)
The
purchase of the Property contemplated by this Agreement is not
subject to any financing contingency and Purchaser has the
financial strength and ability to close on the purchase of the
Property at the time and on the terms set forth in this
Agreement; and
(c)
No
approvals or consents by third parties or by governmental
authorities are required in order for Purchaser to consummate
the transactions contemplated hereby.
9.5
Survival .
None of the representations and warranties contained in this
Agreement shall survive the Closing of this transaction unless
expressly stated otherwise.
Section
10.
Non-Liability of Seller
Neither
Seller nor any partner of Seller shall, by entering into this
Agreement, become liable for any costs or expenses incurred by
Purchaser and arising subsequent to the Closing Date. Except
for the covenants, representations and warranties which
expressly survive Closing, by proceeding to Closing with
respect to the Property, Purchaser shall be deemed to have (i)
acknowledged that all conditions precedent to the performance
of each party’s obligations under this Agreement have
been satisfied or waived and (ii) released any claims or
causes of action against Seller with respect to the existence
of any Hazardous Substances (defined below) on or affecting
the Property on or prior to the Closing Date. “
Hazardous Substances ,”
as used in this Agreement, means any toxic or hazardous waste,
pollutants or substances, including without limitation, petroleum
products or by-products, asbestos (irrespective of whether or not
encapsulated) and substances defined or listed as hazardous
substances or toxic substances or similarly identified in or
pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 41 U.S.C. Section 9601, et
seq., hazardous materials identified in or pursuant to the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802, et
seq., hazardous waste identified in or pursuant to the Resource
Conservation and Recovery act of 1976, as amended, 15 U.S.C.
Section 2601, et seq., or any hazardous or toxic substance or
pollutant regulated under any other applicable federal or local
environmental law. This provisions of this
Section 10 shall
survive the Closing.
Section
11.
Assignment
This
Agreement may not be assigned by Purchaser without the written
consent of Seller, which consent may be withheld in
Seller’s sole and absolute discretion. In any event, no
assignment shall relieve Purchaser of any of its obligations
under this Agreement. Purchaser may, however, designate
another entity as the “grantee” under the Deed
from Seller at Closing. Notwithstanding the above, Purchaser
may assign this Agreement to an entity in which either
Purchaser or any member of Purchaser is an owner, without
Seller’s prior written consent but with written notice
to Seller. In any event, no assignment shall relieve Purchaser
of any of its obligations under this Agreement. Purchaser may
designate another entity as the “grantee” under
the Deed from Seller at Closing.
Section
12.
Notices
All
notices under this Agreement or required by law shall be hand
delivered, sent by email (to be confirmed by hand delivery or
overnight delivery) or sent via any nationally recognized
commercial overnight carrier with provisions for receipt,
addressed to the parties at their respective addresses set
forth below or as they have specified by written notice
delivered in accordance with this Section:
PURCHASER:
D
& R REALTY II, LLC
1001
S. Lakewood Street
Baltimore,
Maryland 21224
Attn:
Raymond Jackson
Email:
RJackson@stonewalldevelopment.net
SELLER:
I.
C. Isaacs & Company Limited Partnership
3840
Bank Street
Baltimore,
MD 21224-2522
Attn:
Timothy J. Tumminello
Email:
ttumminello@icisaacs.com
With
a copy to: Whiteford,
Taylor & Preston L.L.P.
Seven
St. Paul Street
Baltimore,
Maryland 21202-1636
Attn:
John P. Evans, Esq.
Email:
jevans@wtplaw.com
Delivery
will be deemed complete upon actual receipt or refusal to
accept delivery.
Section
13.
Expenses
Seller
shall pay its own attorney's fees and expenses, one-half of
the state and county transfer taxes and recordation stamp
taxes for the Deed, one-half of the recording charges for the
Deed and all commissions to the brokers specified in
Section 8 .
All other costs and expenses related to the transaction or this
Agreement, including but not limited to all of Purchaser's
attorneys' fees and expenses, one-half of the state and county
transfer taxes and recordation stamp taxes for the Deed, one-half
of the recording charges, and any costs or fees incurred in
connection with the Contingency Period, a survey or Title Report or
Title Policy, shall be paid by Purchaser, notwithstanding any local
practice to the contrary. Purchaser shall be responsible for all
filings and expenses related thereto under FIRREA, and similar
laws. Except
as provided in the Lease, all charges, if any, for water, sewer
service, electricity, telephone service and other public utility
services furnished to any or all of the Property being acquired by
Purchaser from the Effective Date to the Closing Date shall be
adjusted between Seller and Purchaser as of the Closing
Date.
Section
14.
Lease
During
the Feasibility Period, Seller and Purchaser shall agree on
the final form of the Lease, which shall be based upon the
form attached as
Exhibit C .
At Closing, Seller and Purchaser will enter into the Lease,
pursuant to which Seller shall lease the Property after Closing for
a term of three (3) months, plus an option period, as more fully
described in such Lease. In addition to customary terms and
conditions, the Lease shall include the following
terms:
(a)
Term
of three (3) months from the Closing Date (the “
Initial Term ”),
with one (1) option for Seller to extend the term for up to an
additional three (3) months (the “
Extension ”)
upon written notice to Purchaser not less than 30 days prior to the
end of the Initial Term.
(b)
During
the Initial Term, Seller shall pay rent on a monthly basis in
an amount equal to the cost of insurance and real estate taxes
applicable to the Initial Term (for example, 1/12 of any
annual premium would be payable each month).
(c)
During
the Extension, Seller shall pay rent on a monthly basis in an
amount equal to the cost of insurance and real estate taxes
applicable to the Extension plus an amount equal to the
monthly interest payable by Purchaser on its purchase money
financing, based on a maximum principal amount of $630,000, at
an annual interest rate of no more than 8 %, amortized over
not less than 20 years (that is, the actual interest payable
up to a maximum of $5,275 per month).
(d)
During
the term of the Lease, Seller shall pay for all utility
services used by Seller at the Property, including but not
limited to gas, electric, telephone, water and
sewer.
(e)
At
the earlier of the end of the term or upon Seller’s
vacating the Property, Seller shall remove all of
Seller’s personalty and leave the Property in broom
clean condition and in substantially the same condition as on
the Closing Date, reasonable wear and tear
excepted.
Section
15.
Miscellaneous
15.1
Successors and Assigns .
All of the terms and conditions of this Agreement are made binding
upon the successors and permitted assigns of both
parties.
15.2
Gender .
Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the
singu
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