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LOT PURCHASE AGREEMENT

Real Estate Purchase and Sale Agreement

LOT PURCHASE AGREEMENT | Document Parties: Stanley Martin Companies, Inc | Wildewood Neighborhoods, LLC | Wildewood Residential, LLC You are currently viewing:
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Stanley Martin Companies, Inc | Wildewood Neighborhoods, LLC | Wildewood Residential, LLC

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Title: LOT PURCHASE AGREEMENT
Governing Law: Virginia     Date: 12/20/2005

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Exhibit 10.2

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

"Purchaser."

WITNESSETH:

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

Agreement.

2. Deposit.

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.

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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

this sentence.

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

homeowners.

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.

5. Closing.

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

 

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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

quarters:

(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.

 

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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

costs.

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

designates.

10. Adjustments.

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

settled.

11. Default.

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

 

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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

free thereof.

 

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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

party purchasers.

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.

 

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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


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