EXHIBIT 10.2
PURCHASE AND SALE
AGREEMENT
By and between
GRAND OAKS DEVELOPMENT,
LLC , as
“Seller”
and
ENCLAVES GROUP, INC.
, as
“Purchaser”
[Grand Oaks Property, Lexington,
South Carolina]
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Purchase and Sale Agreement
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Grand Oaks Development,
LLC
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(October 2005) • Page 2
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> Enclaves Group, Inc.
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TABLE OF CONTENTS
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1.
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Purchase and Sale of Property
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3
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2.
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Purchase Price and Terms of Payment
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4
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3.
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Seller’s Documents; Purchaser’s
Feasibility Period .
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5
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6.
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Risk of Loss; Casualty .
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8
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9.
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Conditions to Closing .
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8
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10.
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Obligations Pending Closing
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9
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11.
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Representations and Warranties of
Seller .
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10
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12.
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Representations and Warranties of
Purchaser .
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12
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13.
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General Provisions .
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12
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Attachments:
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Exhibit A - Legal Description
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Exhibit B - Concept Development Plan
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Exhibit C - Due Diligence Documents
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Purchase and Sale Agreement
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Grand Oaks Development,
LLC
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(October 2005) • Page 3
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PURCHASE AND SALE
AGREEMENT
THIS PURCHASE AND SALE AGREEMENT
(this “Agreement”) dated as of the 20 th day
of October, 2005, is made by and between GRAND OAKS DEVELOPMENT,
LLC , a South Carolina limited liability company (the
“Seller”), and ENCLAVES GROUP, INC., a Delaware
corporation, and its successors or assigns (the
“Purchaser”).
In consideration of the mutual
covenants and agreements set forth herein, the parties hereto agree
as follows:
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1.
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Purchase and Sale of Property
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(a) Seller agrees to sell and Purchaser agrees to
purchase all of those two (2) certain adjacent parcels of real
property located in Lexington County, South Carolina, which are
comprised of (i) seventy-one and one hundredth (71.01) acres and
(ii) two hundred six and twenty-six hundredths (206.26) acres,
located on or near the intersection of Long Point Road at Arrie
Lane, identified on Tax Map number 6400-03-020 and further
described in the legal description attached hereto as
Exhibit A and the Plat attached as Exhibit B ,
hereby incorporated as if set forth herein (the
“Land”), together with all and singular, the rights,
air rights, easements, rights-of-way, tenements, and hereditaments
appertaining thereto, including all right, title, and interest of
the Seller in and to adjacent streets, easements, privileges,
alleys, or rights-of-way now or hereafter belonging to or inuring
to the benefit of the Land, and all right, title and interest of
Seller in and to the land lying in the bed of any street, road or
highway (open or proposed) in front of, adjoining or servicing the
Property (all of which shall be deemed part of the Property for the
purpose of this Agreement), and all other improvements erected or
placed thereon, (the “Improvements”)(the Land, the
Improvements, and the described rights being collectively the
“Real Property”), together with the assets described in
§ 1(b) below.
(b) As used herein, the assets to be conveyed
hereunder (the “Property”) shall include the full
right, title, and interest of the Seller in and to all of the
following:
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(ii)
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the leases and other occupancy agreements for
the Real Property (each a “Lease” and together the
“Leases”), if applicable;
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(iii)
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all of Seller’s right, title, and interest
in and to the improvements and modifications, additions,
restorations, repairs, and replacements to the Property including
fixtures and personal property on the Property on the date of
Closing (as hereinafter defined); and all right, title, and
interest of the Seller in and to all inchoate rights,
appurtenances, privileges, and easements belonging or pertaining
thereto including all marketing materials, budgets, and pricing
information for any improvements in Seller’s possession, all
deposits which have been placed by Seller in connection with
approvals for the development of the Property, as well as all
existing approvals and permits issued by Lexington County, South
Carolina, or any other governmental body having
jurisdiction;
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(October 2005) • Page 4
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(iv)
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all engineering and technical plans and studies
performed thereon in Seller’s possession or
control;
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(v)
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the Property also includes all trees, shrubbery
and plants, and all sand, gravel, dirt, minerals, oil and natural
gas in, on, or under the Property on the date of Seller’s
execution of this Agreement; during the term of this Agreement
Seller shall not remove or disturb such items and Seller shall not
permit others to remove or disturb such items without the express
written consent of Purchaser;
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(vi)
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any and all insurance policies, service
contracts, maintenance and repair agreements, and other similar
contracts affecting the construction, operation, or maintenance of
the Improvements (collectively the “Contracts”);
and
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(vii)
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all warranties and guarantees claims (if any and
to the extent assignable) under or with respect to the Contracts or
the personal property, or with respect to any construction of or
repairs to the Real Property or any part thereof.
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2.
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Purchase Price and Terms of
Payment .
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(a) The total purchase price of the Property (the
“Purchase Price”) is Seven Million One Hundred Thousand
Dollars ($7,100,000).
(b) Within ten (10) business days after the
Effective Date, Purchaser shall deposit the sum of One Hundred
Thousand Dollars ($ 100,000) (the “Deposit”), with
Purchaser’s title company identified in § 4 below,
which will act as escrow agent (the “Escrow
Agent”).
(c)
At the end of the Feasibility Study
Period described in § 3 below, and subject to the automatic
termination of this Agreement if Purchaser does not deliver an
Affirmative Notice to Seller, the Deposit and any and all interest
accrued thereon (collectively, the “Deposit”) with the
Escrow Agent shall become nonrefundable, subject to the terms of
this Agreement.
(d) The parties shall execute and deliver escrow
instructions reasonably satisfactory to the Escrow Agent and
otherwise in compliance with the terms of this Agreement. The
Escrow Agent shall acknowledge receipt of the Deposit in writing to
the parties and agree to accept, hold, and return such Deposit and
disburse any funds received hereunder, in accordance with the
provisions of this Agreement. If the transaction contemplated
herein should fail to close for any reason other than
Purchaser’s default and failure to cure that default
hereunder, the Deposit shall be returned to Purchaser.
Notwithstanding any provision herein to the contrary, should
Purchaser not provide written notice to Seller on or before the
last day of the Feasibility Period affirmatively stating that it
desires to proceed to Closing (the “Affirmative
Notice”), this Agreement shall automatically terminate, the
Deposit shall be refunded to the Purchaser, and neither party will
thereafter have any further liability to the other (except for
liabilities which expressly survive termination). If the Purchaser
does deliver an Affirmative Notice to Seller on or before the last
day of the Feasibility Period, the Deposit shall become
non-refundable to Purchaser for any reason other than a default by
Seller or as expressly provided in §§ 4 or 7 hereof.
Failure to make the Deposit shall be a default under this
Agreement. The Escrow Agent shall hold the Deposit in an interest
bearing federally-insured account and interest thereon shall be
credited to the Purchaser and disbursed with the
Deposit.
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LLC
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(e) At the Closing (described in
§ 5 (a) below), (i) the Deposit, including all
accrued interest thereon, shall be applied toward the Purchase
Price, and (ii) Purchaser shall pay the balance of the Purchase
Price by cashier’s check, certified check, or wire
transferring the required sum in currently available funds to the
party conducting settlement (the “Settlement
Company”).
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3.
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Seller’s Documents; Purchaser’s
Feasibility Period .
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(a) Within five (5) business days after the
Effective Date, to the extent not previously provided and only to
the extent in the care, custody, or control of Seller, or its
agents or representatives, Seller shall deliver to Purchaser true,
correct, and complete copies of the documents listed in
Exhibit C attached hereto and hereby incorporated
(the “Due Diligence Documents”). Purchaser agrees to
hold all documents and information provided to Purchaser by Seller
strictly confidential except to its agents, employees, lenders,
attorneys and other professionals and those who have a need to
know. In the event Purchaser or Seller terminates this Purchase
Agreement, pursuant to this Purchase Agreement, Purchaser will
promptly return to Seller all materials that were provided to
Purchaser pursuant to this Section
(b) Purchaser and its agents and representatives
shall have the right to enter onto the Property at all reasonable
times after the Effective Date for purposes of conducting surveys,
soil tests, market studies, engineering tests, and such other
tests, investigations, studies, and inspections as Purchaser deems
necessary or desirable in its sole discretion to evaluate the
Property, provided that (i) all such tests, investigations,
studies, and inspections shall be conducted at Purchaser’s
sole risk and expense, (ii) Purchaser shall give Seller at least
three (3) days’ prior notice of its entry onto the Property,
and (iii) Purchaser shall indemnify and hold Seller harmless from
and against any losses, liabilities, costs, or expenses (including
reasonable attorney’s fees) arising solely and directly out
of Purchaser’s entry onto the Property. Purchaser shall
return the Property to the condition it was in prior to the
performance of such tests. Purchaser shall not interfere with the
operations of the lessees at the Property (if any). The foregoing
indemnity obligation set forth in this § 3 (b) shall
survive any termination of this Agreement and shall not be limited
by the liquidated damages provision of § 7 (b)
hereof.
(c) Purchaser shall have a period to determine the
feasibility of proceeding with this transaction (that period being
the “Feasibility Period”) commencing with the Effective
Date and terminating on the date thirty (30) days after the
Effective Date. In the event that Purchaser is satisfied with the
feasibility of Purchaser’s acquisition, financing, and
ownership of the Property, Purchaser must deliver an Affirmative
Notice to Seller on or before the last day of the Feasibility
Period, which notice shall affirmatively state that Purchaser does
want to proceed to Closing as described in §5 below. In the
event that Purchaser is not satisfied, in its sole and unreviewable
judgment and discretion, with the feasibility of Purchaser’s
acquisition, financing, and ownership of the Property, and if
Purchaser does not deliver an Affirmative Notice to Seller on or
before the last day of the Feasibility Period, this Agreement shall
automatically terminate. Upon any such termination the Purchaser
shall pay to Seller the sum of One Hundred Dollars ($100), in
consideration of Seller’s agreement to enter into this
Agreement subject to the Feasibility Period, and Purchaser shall
return to Seller all items received by Purchaser pursuant to
§ 3 (a) hereof (which shall be a condition precedent
to the return of the Deposit), the Escrow Agent shall return the
Deposit to the Purchaser, and the parties hereto shall be released
from any further liabilities or obligations hereunder (except for
any liability of Purchaser for indemnification under
§ 3 (b) above or a party under § 8 below).
Any notice by Purchaser that it has elected to go forward with the
transaction contemplated hereby shall nevertheless be subject to
the satisfaction or subsequent express waiver of the conditions to
settlement set forth in § 9 below.
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LLC
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(October 2005) • Page 6
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(a) Title to the Property shall be marketable and
good of record and in fact and insurable by a nationally recognized
ALTA title insurance company of Purchaser’s choice at normal
rates. At the Closing, Seller shall convey title to the Property in
fee simple, free and clear of any and all liens, mortgages, deeds
of trust, security interests, leases, covenants, conditions,
restrictions, easements, rights-of-way, licenses, encroachments,
judgments or encumbrances of any kind, except for the following
permitted exceptions (the “Permitted Exceptions”): (a)
the Leases; (b) the lien of real estate taxes not yet due and
payable; (c) zoning and building restrictions and other laws,
ordinances, and regulations of governmental bodies having
jurisdiction over the Property; and (d) matters of record affecting
title to the property, as reviewed and approved (or deemed
approved) by Purchaser.
(b) Promptly after the Effective Date Purchaser
agrees to obtain a commitment of title insurance for the Property
and to review such commitment and provide Seller with any notice of
objections during the Feasibility Period. Any exceptions to title
taken by the Purchaser’s title company (the “Title
Company”) in such commitment shall be Permitted Exceptions
hereunder if Purchaser does not, during that Feasibility Period,
object to such matters by written notice to Seller. Within three
(3) business days of receipt of such notice from Purchaser, Seller
shall advise Purchaser in writing whether or not Seller agrees to
cure any exceptions to title to which Purchaser has objected. Any
exceptions to title that are not Permitted Exceptions and that
Seller agrees to cure shall be cured by Seller at its sole cost and
expense at or prior to the Closing; provided that if Seller is
unable or unwilling to cure such exceptions or other matters,
Purchaser shall have the right to either (i) waive such exceptions
or other matters and proceed to the Closing on the terms set forth
herein (in which event the exceptions to which Purchaser objected
shall be deemed to be Permitted Exceptions) or (ii) terminate this
Agreement by written notice to Seller within five (5) business days
of receipt of Seller’s written notice and obtain the return
of the Deposit, in which event neither party shall have any further
liability or obligation to the other (except for liabilities which
expressly survive termination). Should Purchaser not terminate
within the timeframe of subsection (ii) hereof, Purchaser shall be
deemed to have elected to waive such exceptions.
(c) Purchaser shall have the right to re-examine the
title to the Property at Closing and to object to any defects or
encumbrances that have been placed of record on the Property
subsequent to the date of Purchaser’s initial title report
(except for customary easements and rights of way established in
connection with the subdivision plans or encumbrances which have
been caused or approved by Purchaser, which shall be Permitted
Exceptions) (such objections being the “Subsequent
Objections”). Seller shall cure Subsequent Objections at or
prior to Closing and if Seller shall fail to cure them then
Purchaser in its sole discretion may: (i) waive the Subsequent
Objections and proceed to Closing; (ii) terminate this Agreement
and receive a refund of the Deposit; or (iii) declare Seller to be
in default under this Agreement and pursue any remedies available
hereunder.
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Purchase and Sale Agreement
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Grand Oaks Development,
LLC
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(October 2005) • Page 7
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(a) The Purchaser shall complete the purchase of the
Property thirty (30) days after satisfaction of the Contingencies
in §9 below, with five (5) days advance notice to Seller (the
“Closing Notice”), but in no event later than thirty
(30) days after the end of the Feasibility Period described in
§3 above (the “Outside Closing Date”); provided
that the date for the Closing may be extended in accordance with
§ 9 hereof to satisfy outstanding conditions to Closing.
The Closing shall be held at the offices of the Escrow Agent, or
other mutually agreed upon location, and unless an earlier time and
date is designated in the Closing Notice, Closing shall occur at
2:00 p.m. on the Outside Closing Date.
(b) At Closing, Seller shall deliver to Purchaser a
general warranty deed (the “Deed”) conveying the
Property to Purchaser subject only to the Permitted Exceptions.
Purchaser shall be entitled to receive from the Title Company,
prior to delivery of the Deed, the Title Company’s
unconditional commitment to issue an ALTA Form B Owner’s
Policy of Title Insurance, in the amount of the Purchase Price, and
the Title Company’s assurance that its recordation of the
Deed, after performing a bring-to-date examination of the land
records, will constitute its agreement to issue such policy within
thirty (30) days after the Closing. Seller shall also execute such
affidavits and other instruments as reasonably required by
Purchaser’s counsel or the Title Company, at any time within
the six (6) months after Closing hereunder, and for the better
conveying, transferring, assuring, and confirming the conveyance of
title to the Property to the Purchaser in accordance with
§ 4 hereo
