This Real Estate Purchase and Sale Agreement involves
Title: LOT PURCHASE AGREEMENT
Governing Law: Virginia Date: 12/20/2005
LOT PURCHASE AGREEMENT
THIS LOT PURCHASE AGREEMENT (this "Agreement") is made as of the Effective
Date (hereinafter defined) by and between WILDEWOOD RESIDENTIAL, LLC, a Maryland
limited liability company, hereinafter called "Seller," and WILDEWOOD
NEIGHBORHOODS, LLC, a Maryland limited liability company, hereinafter called
WHEREAS, Seller is the owner of certain property located in St. Mary's
County (the "County"), Maryland, in the subdivision known as Wildewood, as more
fully shown and designated for single family home construction on the attached
Exhibit "A" (said property being hereinafter referred to as the "Property"); and
WHEREAS, Purchaser wishes to acquire a portion of the Property containing
the single family lots set forth on SCHEDULE 1 attached hereto (the "Lots"),
which lots will be duly and properly created upon the Property as shown on the
attached Exhibit "A."
NOW, THEREFORE, in consideration of the premises and of the promises
hereinafter set forth, the parties agree as follows:
1. Bargain and Sale.
Seller hereby promises and agrees to sell, and Purchaser hereby promises
and agrees to purchase, the Lots in accordance with the provisions of this
Within five (5) business days of the Effective Date, Purchaser shall
deliver to Seller a deposit in the amount of One Million Dollars
($1,000,000.00), by good check or wire transfer (the "Deposit"). Seller and
Purchaser hereby agree as follows with respect to the Deposit:
a. Should Purchaser refuse to settle on said Lots or in the event of
any breach, failure of default by Purchaser under the terms of this Agreement
(which breach, failure or default is not remedied or cured by Purchaser pursuant
to any other provisions hereof), Seller's sole and exclusive right and remedy
shall be to retain the Deposit, or so much thereof as shall then be remaining
after reduction pursuant to the provisions of Section 4 hereof, as full fixed
and liquidated damages, and not as a penalty; it being the agreement of the
parties that Purchaser shall have no liability or obligation for default
hereunder except to the extent of the Deposit made herein and in no event shall
Purchaser's liability or responsibility for any failure, breach or default
hereunder exceed the total amount of the Deposit as constituted after
application of the Deposit to any Lot closed for by Purchaser hereunder, and in
no event shall Seller be entitled to specific performance of this Agreement.
b. Purchaser and Seller hereby expressly understand and agree that the
Deposit may be pledged as collateral by Seller or otherwise used by Seller
during the term of this Agreement in any manner and for any purpose whatsoever
in connection with the Property; provided, however, that such use shall not
affect the obligation of Seller to return the Deposit to Purchaser in the event
of Seller's default, in accordance with the provisions of Section 11.b. hereof.
3. Purchase Price.
a. The base purchase price for the Lots shall be as set forth on
SCHEDULE 1 attached hereto (the "Base Purchase Price").
b. In the event that twenty percent (20%) of the contract price on
outsales of Lots to homeowners exceeds the Base Purchase Price theretofor paid
by Purchaser for such Lots (such excess amount being referred to herein as the
"Additional Purchase Price"), then, in such event, at settlement on the outsale
of each such Lot, Purchaser shall pay Seller the Additional Purchase Price, if
any, with respect to such Lot.
4. Payment of Purchase Price.
a. The Base Purchase Price for each Lot purchased hereunder shall be
paid in cash, by wire transfer, title company check, or certified funds or the
equivalent at closing on the purchase thereon. At settlement with respect to
each Lot, the amount of Seven Hundred Fifty Dollars ($750.00) per Lot shall be
applied from the Deposit against the Base Purchase Price for such Lot and the
Deposit shall thereupon mean the initial Deposit as reduced by the provisions of
b. The Additional Purchase Price, if any, for each Lot sold by
Purchaser to homeowners, shall be paid in cash, by wire transfer, title company
check, or certified funds or the equivalent at closing on such outsale to
c. As used herein, the term "Purchase Price," for any particular Lot
or Lots shall mean and refer to (i) the Base Purchase Price and (ii) the
Additional Purchase Price, if any.
Purchaser and Seller hereby agree that Purchaser shall take down Lots on a
per "Quarter" (as defined below) basis in accordance with the takedown schedule
as set forth on Schedule 1 attached hereto. If in any Quarter purchases exceed
the then required takedown schedule, Purchaser shall be given a credit for such
Lots against the next required takedown schedule. Purchaser reserves the right
to accelerate the takedown schedule, subject to the availability of Lots. The
sequence of Lot takedowns shall be agreed upon by Seller and Purchaser.
Modifications to the sequence and/or the takedown schedule must be agreed upon
by both Seller and Purchaser. Notwithstanding the foregoing, Purchaser shall
have the right, exercisable in Purchaser's sole discretion by giving Seller not
less than ten (10) days prior written notice, to delay a scheduled takedown for
a period of ninety (90) days, in which event all subsequent
takedowns shall occur ninety (90) days after the date originally scheduled for
such takedowns. Following the exercise of the foregoing deferral right, provided
Purchaser has subsequently satisfied the quarterly takedown obligation for not
less than three (3) consecutive Quarters, Purchaser shall have an additional
one-time right, exercisable in Purchaser's sole discretion by giving Seller not
less than ten (10) days prior written notice, to delay a scheduled takedown for
a period of ninety (90) days, in which event all subsequent takedowns shall
occur ninety (90) days after the date originally scheduled for such takedown.
a. "Quarter" as used herein shall mean the following calendar
(i) January 1 to March 31 (first calendar Quarter);
(ii) April 1 to June 30 (second calendar Quarter);
(iii) July 1 to September 30 (third calendar Quarter); and
(iv) October 1 to December 31 (fourth calendar Quarter).
b. In the event Seller has not completed its obligations under this
Agreement and is unable to deliver finished Lots to satisfy Purchaser's takedown
obligations in accordance with the takedown schedule shown on Schedule 1, and
closing is delayed as a result thereof, the Purchase Price shall be the amount
Purchaser would have paid had the closing not been delayed, and increases in the
Purchase Price due to the application of the escalator shown on Schedule 1 shall
be abated accordingly.
c. Purchaser shall have the right at any time to settle on more Lots
than the number of Lots required to be purchased in such Quarter, provided
additional Lots are available for early settlement. Purchaser shall receive
credits toward the minimum number of Lots required to be purchased in any
period, for Lots purchased in excess of the minimum number, and such credits
shall be cumulative.
6. Additional Conditions to Closing for Lots.
Initial settlement for model Lots shall take place on or before fifteen
(15) days from the date on which Seller notifies Buyer that (i) building permits
for such model Lots are issuable by St. Mary's County, assuming timely filing of
all requisite applications and payment of standard fees; (ii) there is
construction access available to the model Lots; and (iii) the Lots are cleared
and graded as required under this Agreement. Thereafter, prior to all subsequent
settlements, each of the Lots shall have such improvements as would allow
Purchaser to obtain a building permit for the construction of a dwelling unit
thereon, and upon completion of such dwelling unit, a Certificate of Use and
Occupancy therefor assuming timely filing of all requisite applications and
payment of standard fees. Seller shall use commercially reasonable efforts to
complete the work described in Exhibit "B" attached hereto and incorporated
herein and in this section as to a number of Lots sufficient to enable the
initial settlement on the model lots within the third (3rd) calendar Quarter
following the acquisition of the Property by Seller, and shall thereafter
complete such work as to additional Lots such as will enable Purchaser to meet
its closing obligations set forth in Schedule 1.
7. Transfer Imposts.
Seller shall pay all state and county transfer and recordation taxes
assessed at or related to each closing on Lots hereunder.
8. Settlement Costs.
Document preparation charges for the Deed, if any, shall be at the sole
expense of Seller and the cost of examination of title, title insurance,
Purchaser's settlement fees, and Purchaser's attorneys' fees shall be at the
sole expense of Purchaser. Seller shall be responsible for its own settlement
9. Place of Settlement.
Closings as herein required shall be held at Bulman Dunie Burke & Feld or
at such other settlement agent's office within the Washington, D.C. Metropolitan
Area or within the jurisdiction in which the Property is located as Purchaser
All ad valorem taxes, metropolitan district charges, front foot or other
benefit charges or assessments, including deferred connection charges, if
applicable, and all other fees payable on an annual or periodic basis shall be
adjusted to the date(s) of closing and thereafter assumed by Purchaser. Seller
will be responsible for the payment of any presently enacted rezoning or
development tax which may be imposed on the Lots. Purchaser will be responsible
for any water and sewer capital facility connection charges and capital facility
assessment charges and any user fees applicable to the Lots, and if all or a
portion of the same has been paid by Seller prior to settlement, Purchaser shall
reimburse Seller at settlement for such charges on a pro-rata basis per Lots
a. Purchaser's Failure to Close. In the event of Purchaser's wrongful
failure to close upon a Lot or Lots as provided herein, Seller's sole remedy
shall be to retain the Deposit, as set forth more fully in Section 2.a. hereof.
b. Seller's Default. Except as set forth in the last paragraph of
Section 13 of this Agreement, in the event of default by Seller, Purchaser shall
have the right to (i) elect to terminate this Agreement and the Deposit (after
reduction pursuant to the provisions of Section 4 hereof) shall be returned to
Purchaser or (ii) bring a suit for specific performance against Seller with
regard to the obligations of Seller.
c. Notice and Cure. Except for payments by Purchaser required pursuant
to this Agreement, no failure or default by Purchaser or Seller, including
failure to timely exercise options, shall result in the termination or
limitation of any right hereunder or the exercise of any rights or remedies with
respect to such failure or default unless and until defaulting party shall
have been notified in writing and shall have failed to remedy said failure
within fifteen (15) days after the receipt of said written notice. If such
failure or default is not curable within fifteen (15) days, then action to cure
shall begin within fifteen (15) days and be completed within thirty (30) days.
12. Seller's Representations.
As of the Effective Date of this Agreement, Seller represents, warrants and
covenants as follows, and it shall be a condition precedent to Purchaser's
obligation to consummate closing(s) that none of the following has been breached
or would be breached if remade as of their respective date(s) of closing(s):
a. For so long as this Agreement continues in effect, Seller shall not
cause any change in the Property from its present physical condition except as
required by governmental authorities and/or to finish the Lots, and shall not
commit any waste upon the Property.
b. Seller shall, during the terms of this Agreement, keep any existing
mortgage(s) against the Property current and not in default and cause to be paid
all taxes and other public charges against the Property so as to avoid
forfeiture of Purchaser's rights under this Agreement.
c. With the exception of restrictive covenants for the Wildewood
Community Association Inc., any other applicable homeowner association and all
other documents recorded or required to be recorded to subdivide the finished
Lots, Seller has not made and will not make any commitments or representations
to the applicable governmental authorities, any adjoining or surrounding
property owners, any civic association, any utility, or any other person or
entity, which would in any manner be binding upon Purchaser or interfere with
Purchaser's ability to utilize or develop the Property, without Purchaser's
prior written approval.
d. There is no violation of any law, ordinance, order or regulation
affecting the Lots resulting from Seller's actions, and Seller agrees to take
all necessary action to correct any such future violation caused or created by
Seller prior to closing and to convey the Property free thereof.
e. To the best knowledge of Seller, there are no hazardous or toxic
wastes or substances or petroleum waste or substances which are the subject of
any federal, state or local environmental or pollution control laws upon or
adjacent to the Property or any part thereof, and that it has received no
notification of, and has no knowledge of, any investigation of the Property or
any part thereof by the U.S. Environmental Protection Agency or any similar
federal, state or local governmental authority, and agrees to take all necessary
action to correct any such future violation caused or created by Seller prior or
after closing and to take such corrective action in order to convey the Property
f. There is no action, suit, proceeding, inquiry or investigation at
law or in equity, before or by any court, public body or board or administrative
agency, pending or threatened, which in any way impairs title to the Lots and/or
creates an impediment to obtaining building permits for the Lots.
g. It has no knowledge of any pending or threatened condemnation
proceeding concerning any part of the Lots.
h. Connection with all utilities necessary to service residences upon
the Property, including but not limited to electric and public or private water
and sewer system, is reasonably available upon proper application.
i. The right of ingress to and egress from the Property, through
direct access to a dedicated public road or to a dedicated private road with
direct access to a dedicated public road, is reasonably available.
j. All dedications or fees in lieu thereof (other than as set forth in
Section 14 hereof), or as otherwise specified herein, shall have been made or
paid by Seller.
k. Seller shall provide Purchaser with all the information required to
be disclosed to Purchaser's third party purchasers, regarding the Homeowners'
Association for the Property. Seller shall have an ongoing responsibility to
deliver to Purchaser, in a timely manner, any substantial or material amendments
or changes to the information required to be delivered to Purchaser's third
l. This Agreement has been duly authorized by Seller and all of its
individual and corporate stockholders, partners, members and participants, and
the terms hereof do not violate and are not inconsistent with any by-law,
statute, regulation, document, judicial or administrative proceeding, or
anything else to which Seller is legally bound and/or a party.
m. Seller is not a "foreign person" as defined in Section 1445(f)(3)
of the Internal Revenue Code as amended or replaced (the "Code"). At closing,
Seller shall execute the Affidavit required by Section 1445(b)(2) of the Code
and shall be responsible for filing such Affidavit as required. Seller shall
indemnify and hold Purchaser harmless against any and all claims arising out of
or relating to the execution, content or filing of the foregoing Affidavit.
Seller shall also comply with any other reporting requirements imposed by the
Code with respect to, or arising out of, the sale of the Property.
n. Seller shall grant and provide such licenses, easements, and
rights-of-way as Purchaser reasonably deems necessary for Purchaser's access to
the Property and for Purchaser's ingress and egress and such other easements or
rights-of-way needed for the purpose of Storm Water Quality Management or
utility service, all of the foregoing not to materially interfere with
development by Seller or materially devalue Seller's Property. All of the
foregoing licenses, easements and rights-of-way shall conform with County
requirements and approvals.
o. As of each closing date, all sureties, bonds, and/or letters of
credit required by the County or all other governmental agencies (including
FHA/VA) in connection with Seller's development obligations shall have been
posted by Seller, in the amount required by appropriate governmental agencies.
p. Seller has disclosed, and provided Purchaser with copies of, any
and all proffers and agreements between Seller and the local government
officials, or otherwise affecting the Property, regarding the development of the
Property and construction of the Lots. Seller shall be solely responsible for
any and all monetary and development obligations set forth in any such proffers
and/or agreements, except for capital facility charges, impact fees and front
foot benefit assessments as hereinbefore set forth in this Agreement, which
shall be Purchaser's obligation except as otherwise provided in this Agreement.
13. Seller's Undertakings, Representations and Conditions Precedent.
In addition to the promises and agreements hereinabove made by Seller,
Seller, at its sole cost and expense, shall be responsible for further
undertakings as specified in this section. Purchaser's obligation to consummate
respective closings shall be conditioned upon the completion of the following
items as to the Lots to then be so closed upon (wherever in this Agreement there
is a reference to Seller having to take development activity "to a Lot and/or
Lot line," the same shall mean to a point five (5) feet beyond the curb in the
direction towards the Lot, such curb line being adjacent to the Lot):
a. Seller shall be responsible for all costs in connection with the
installation of the water and sewer mains to a Lot line and the construction and
implementation of on-site sewage and water treatment facilities.
b. The Lots shall be conveyed free of monetary liens, except for liens
previously set forth in this Agreement and those items to be adjusted as of each
closing hereunder, and zoned for the use contemplated herein.
c. Seller shall have obtained all off-site rights-of-way and easements
that may be necessary (i) for the installation of water and sanitary sewer to
the Lots and to serve each Lot therein, (ii) to accomplish all on-site and
off-site grading, (iii) for storm water management areas, and (iv) for streets
and roads to service the Lots.
d. Seller shall have prepared plans for public water and private
sanitary sewer distribution systems to serve each Lot, and obtained
authorization and approval of the same by the County and any other required
entity. Such payment or reimbursement shall occur simultaneously with the
settlement of each Lot. Water and sanitary sewer laterals shall be i