Exhibit 10.2
AGREEMENT OF
SALE
Phase 2 -2,797 acres, Lackawanna,
Luzerne, and Monroe Counties, PA
THIS AGREEMENT OF SALE (the "Agreement"),
is made this 11 th day of March 2009, by
and between BLUE RIDGE REAL ESTATE COMPANY , a corporation
duly organized under the laws of the Commonwealth of Pennsylvania,
having an address of P.O. Box 707, Blakeslee, PA 18640 (the
"Seller"), and THE CONSERVATION FUND, A Non-Profit
Corporation organized under the laws of the State of Maryland,
having an address of 1655 North Fort Myer Drive, Suite 1300,
Arlington, Virginia 22209 (the "Purchaser").
WITNESSED, WHEREAS, Seller is the owner
of eight non-contiguous parcels of land containing an aggregate of
approximately 3,972 acres of unimproved property located in
Lackawanna, Luzerne, and Monroe counties, Pennsylvania, the "Land";
and
WHEREAS, Purchaser has offered to
purchase and Seller has agreed to sell the Land in two phases under
two separate contracts; and;
WHEREAS, simultaneous with entry into the
Agreement of Sale, the Seller and the Purchaser have entered into a
Phase 1 contract for the transfer and sale of that 1,175 acre
portion of Land located in Monroe and Lackawanna Counties,
Pennsylvania; and
WHEREAS, under this Phase 2 Agreement,
the Purchaser agrees to purchase and Seller agrees to sell the
balance of the Property, being 2,797 acres in Luzerne, Lackawanna,
and Monroe Counties, Pennsylvania, as more fully described as the
"Property".
NOW THEREFORE, for and in consideration
of the mutual promises contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller agrees to sell and Purchaser agrees to
purchase the Property, subject to and in accordance with the terms
and conditions set forth in this Agreement.
Section 1. The
Property . Seller agrees
to sell and Purchaser agrees to purchase certain unimproved
property containing an aggregate of approximately 2,797 +/- acres
in Monroe, Luzerne, and Lackawanna County, Pennsylvania, consisting
of approximately 1,477 +/acres, located in Buck Township, Luzerne
County, Thornhurst Township, Lackawanna County, and Tobyhanna
township, Monroe County in Pennsylvania ("Assemblage #A") , and
approximately 1,320 +/- acres located in Bear Creek township, and
Buck Township, in Luzerne County, Pennsylvania ("Assemblage #B") as
more particularly shown on the map attached hereto as Exhibit A-I,
and consisting of those tax parcels listed on the table attached
hereto as Exhibit A-2 including, without limitation but except as
otherwise provided herein, any and all buildings, improvements,
personalty and fixtures situated thereon, and any and all mineral,
timber, water, grazing and other surface and subsurface rights,
permits, hereditaments, easements, incidents and appurtenances
belonging thereto (the "Property"). Assemblage A consists of
Parcels 1, 2, 3, 4, and 5, as shown on the map attached hereto as
Exhibit A-I and Assemblage B consists of Parcel 8 as shown on the
attached map. Purchaser may elect to remove from this transaction
the purchase and sale of Assemblage #B by providing written notice
to the Seller prior to the expiration of the Inspection Period (as
defined below in Section 5). If Purchaser makes such an
election, then from and after the date of
such notice, the term "Property" as used herein shall be deemed to
exclude Assemblage #B. The Property shall be sold subject to Seller
reserving the oil and gas rights on the Property for a period
commencing up the date for Closing (as hereinafter defined in
Section 4), and terminating on December 31, 2031 (the "Oil and Gas
Reservation") provided such rights are exercised in accordance with
the terms and conditions of a surface rights agreement in a form
identical to the Surface Rights Agreement negotiated under the
Phase 1 contract and a Timber Sales Agreement dated October 15,
2007 by and between the Seller and RGM Hardwoods, Inc., a copy of
which is attached as part of Exhibit D, which terminates on October
15, 2009 (the "Timber Agreement").
Section 2. Good Faith
Deposit . Within five (5)
business days from the Effective Date of this Agreement (as defined
below in Section 15.17), Purchaser shall deliver a good faith
deposit in the amount of Five Thousand and 00/100 Dollars
($5,000.00) to be held in an interest bearing escrow account with
Pocono Area Abstract Company, PO Box 128, Blakeslee, PA 18610,
Attn: Rick Hanna, Phone: 570-646-0282, as escrow agent (the "Title
Company"). The good faith deposit, and all interest earned thereon
(the "Deposit") shall be applied towards the payment of the
Purchase Price for the Property, as described below, unless
otherwise forfeited to Seller or returned to Purchaser in
accordance with the terms of this Agreement. In the event that the
Purchaser elects to remove Assemblage #B from this transaction in
accordance with the provisions set forth above in Section 1, then
the Purchaser shall not be obliged at Closing to pay that portion
of the Purchase Price allocated to Assemblage #B.
Section 3. Purchase
Price . The purchase price
for the Property, including the Deposit, shall be EIGHT MILLION ONE
HUNDRED FIFTY THOUSAND and 00/100 Dollars ($8,150,000.00) (the
"Purchase Price"), of which FOUR MILLION SEVEN HUNDRED SEVENTY FIVE
THOUSAND ($4,775,000.00) shall be allocated to Assemblage #A, and
THREE MILLION THREE HUNDRED SEVENTY FIVE THOUSAND ($3,375,000.00)
shall be allocated to Assemblage #B. The Purchase Price shall be
paid by Purchaser to Seller at Closing (as defined below in Section
4) in cash, certified funds, or by wire transfer of federal or
other immediately available funds.
Section 4. Closing
. The closing of the purchase and sale
of the Property (the "Closing") shall be held at the office of the
"Title Company" on or before thirty (30) days following the
termination of the Inspection Period, as defined below in Section
5.
Section 5. Due Diligence
Review . Purchaser's
obligation to purchase the Property is subject to Purchaser
satisfactorily completing its due diligence review of the Property,
as more fully set forth herein.
5.1. Inspection Period.
Purchaser shall have a period commencing
upon the Effective Date of this Agreement and terminating no later
than one hundred twenty (120) days after the Effective Date, in
which to obtain, secure, conduct, review and analyze any and all
tests, studies, applications, reports and documents deemed
necessary by Purchaser, including but not limited to: surveys,
appraisals, title reports, title commitments, funding commitments
and environmental assessments which Purchaser deems necessary to
satisfy itself as to the feasibility of proceeding with an
acquisition of the Property (the "Inspection Period").
2
5.2 Documents; Evidence of Title .
During the Inspection Period Purchaser shall obtain at Purchaser's
expense, a title commitment issued by the Title Company, together
with copies of all exceptions, pursuant to which the Title Company
shall issue to Purchaser a standard coverage owner's policy of
title insurance subject only to those matters not otherwise raised
as an objection during the Inspection Period, insuring good and
marketable title to the Property in the amount of the Purchase
Price. Issuance of a title insurance policy covering the Property
in the amount of the Purchase Price, as described above, shall be a
condition precedent to Purchaser's obligation to close on the
purchase and sale of the Property.
5.3 Right of Entry onto the
Property . Purchaser and its employees, contractors and agents,
shall have the right to enter upon the Property at reasonable times
for appraising, surveying, inspecting the Property, and for other
reasonable purposes related to Purchaser's acquisition of the
Property. Purchaser shall provide Craig Harahus, (Telephone No.
570-433-8433), the Seller's representative, with telephonic notice
prior to entry onto the Property. Purchaser agrees to indemnify and
hold Seller harmless from and against any claims, liens, damages,
losses, and causes of action arising solely from Purchaser
exercising its rights of entry onto the Property as described
herein. Notwithstanding the foregoing, Purchaser's indemnification
under this· 8ection 53. shall not apply to claims arising
out of the negligent, wil1ful or wanton conduct of Seller or its
employees, contractors, agents and invitees.
5.4. Election at the End of the
Inspection Period . Should Purchaser determine, for any reason
prior to the expiration of the Inspection Period, that it is not
feasible for Purchaser to proceed with its acquisition of the
Property, Purchaser shall notify Seller in writing on or before the
expiration of the Inspection Period of its dissatisfaction, at
which time this Agreement shall be considered null and void and of
no further force and effect and the Deposit shall be promptly
returned to Purchaser. Upon such termination the Purchaser shall,
within ten (10) days of receipt of Seller's written request,
provide the Seller with copies of all due diligence materials
obtained by Purchaser from third party contractors in connection
with this transaction, to the extent such third party contractors
allow delivery of the same to the Seller at no further cost or
expense to Purchaser (other than copying and postage). The
Purchaser's transfer of the due diligence materials shall be made
without representation or warranty of any kind. Purchaser shall, at
any time, have the right to waive its due diligence condition
precedent, as described in this Section 5, before the end of the
Inspection Period and if Purchaser elects to waive this condition
precedent or to terminate the Inspection Period, this Agreement
will remain in full force and effect and the Deposit shall become
non-refundable except as otherwise provided herein. Failure of
Purchaser to notify Seller of its dissatisfaction prior to the
expiration of the Inspection Period shall be deemed a waiver of
this condition precedent.
5.5. Election to Cure .
Notwithstanding anything to the contrary contained in Section 5.4.
above, in the event Purchaser's due diligence inspection of the
Property reveals physical or title defects impacting the Property,
which are capable of being cured, Purchaser may elect to provide
Seller with the option of curing such defects, as opposed to
terminating this Agreement. In such event, the Purchaser shall
offer such option in a written notice to Seller prior to the
termination of the Inspection Period, specifying the nature of the
defect and the amount of time proposed by Purchaser for such cure.
If Seller is willing to accept such option to cure the defects,
Seller shall so advise Purchaser in writing within ten (10) days of
receipt of Purchaser's
3
notice of defect, and the parties will
then document their agreement to have Seller cure such defects to
Purchaser's satisfaction within a specified time, by having both
parties execute an amendment to the Agreement. If Seller is
unwilling to cure the defects, Purchaser shall have ten (10) days
after receipt of Seller's written notice to notify Seller of
Purchaser's intention to waive the defect and proceed to Closing or
terminate this Agreement whereupon the Deposit shall be immediately
refunded to Purchaser and this Agreement shall be null, void, and
of no further force or effect.
5.6. Seller's Delivery of
Documents . Within seven (7) days of the Effective Date, Seller
at its expense shall deliver or cause to be delivered to Purchaser
for Purchaser's review in connection with its due diligence
inspection of the Property the following documents or records
relating to the Property:
(a) true, complete and correct copies of
all agricultural, residential, oil and gas or other leases, timber
agreements and all other third party agreements encumbering the
Property including; licenses and third party contracts, and current
and up-to-date security deposit and rent payment
records;
(b) most recent historic title insurance
policy and deeds issued to Seller;
(c) tax bills and assessment records for
the past two tax fiscal years, including but not limited to real
estate taxes, school taxes, special assessments and personal
property taxes and all documentation pertaining to Property's tax
classification under the Clean and Green Program;
(d) copies of all studies, reports and
all other documents which Seller possesses or other otherwise
reasonably available to Seller, including without limitation,
environmental reports, soils reports, property condition assessment
reports, and maps, but specifically excluding appraisals and a 2006
Phase I Environmental Site Assessment, which by its terms cannot be
distributed by Seller to any other party;
(e) copies of most recent survey(s),
plans, specifications and governmental licenses and permits;
and
(f) copies of all maintenance agreements,
vendor contracts, and agreements with Property
caretakers.
Section 6. Additional Conditions
Precedent . Purchaser's
obligation to purchase the Property is subject to the satisfactory
completion of the following conditions precedent set forth
below:
6.1. Approval of Purchaser's Board
. Purchaser's acquisition of the Property shall be subject to the
approval of Purchaser's Board of Directors. Purchaser acknowledges
that this condition was satisfied on April 15, 2008.
6.2 Surface Rights Agreement . The
Seller and Purchaser having successfully negotiated a Surface
Rights Agreement in accordance with the Phase 1 contract. In
addition, at Closing the Seller and Purchaser shall execute and
record a Surface Rights Agreement identical to the Surface Rights
Agreement developed under the Phase 1 contract, except that the
legal description of the Surface Rights Agreement will be exchanged
for a legal description for the Property conveyed
hereunder.
4
6.3 The Pro-ration Agreement .
Prior to the expiration of the Inspection Period, the parties shall
negotiate the pro-ration of timber revenues under the Timber
Agreement and document same in an amendment to this
Agreement.
If the conditions precedent set forth
above are not satisfied on or before the dates set forth above,
Purchaser may elect to waive the conditions and proceed to Closing,
or alternatively, terminate the Agreement, be relieved of all
liability hereunder, in which event the Deposit shall be promptly
returned to Purchaser.
Section 7. Seller's Representations
and Warranties . To induce
Purchaser to enter into this Agreement, Seller makes the following
representations and warranties as of the date of this Agreement
(the "Representations and Warranties") for the benefit of Purchaser
and its successors and assigns. These representations and
warranties are continuing in nature and shall remain true, accurate
and correct through the date of Closing.
7.1 Title to the Property . Seller
is the record owner of the Property to be conveyed hereunder. Upon
the Closing Date, Purchaser will have good, marketable and
insurable title to the Property.
7.2. A
