Purchase and Sale Agreement, by and among 150 CCM Black Oak, Ltd. and Houston LD, LLC, dated as of July 3, 2018

 

1. Sale of Property/Lots. Seller agrees to sell and Buyer agrees to purchase, subject to the terms and conditions of this Agreement, certain property more particularly described as follows:

 

 

2. Purchase Price. The Purchase Price for Property shall be $6,175,000.00 and allocated as follows:

 

50 lf Lot	$44,000	Number of lots: 53	$2,332,000
60 lf Lot	$54,000	Number of lots: 70	$3,780,000
70 lf Lot	$63,000	Number of lots: 1	$63,000

 

 

 

 

 

 

3. Effective Date. The Effective Date shall be the date when the last one of the Buyer or Seller executes this Agreement.

 

4. Due Diligence Inspection Period. For the independent consideration of $500 paid to the Escrow Agent in accordance with Paragraph 2.a above, Buyer shall have forty-five (45) days from the Effective Date (“Inspection Period”) in which the Buyer may perform inspections and non-invasive testing, at its sole expense, to determine if the Property and lots located therein, in its sole discretion, is suitable for Buyer’s proposed development, use and business purposes and that the lots within Property are in compliance with all standards, conditions and terms hereof and herein. Buyer and its representatives shall have access to the Property during this Inspection Period and up until Closing. Buyer agrees to restore the Property substantially to its original condition after completion of such inspection and testing, which obligation shall survive termination of this Agreement. Buyer may cancel or terminate this Agreement at any time during the Inspection Period for any reason by delivering written notice of termination to Seller prior to the expiration of the Inspection Period and the parties shall be released from any further rights, obligations, and liabilities hereunder (except for those which expressly survive termination) and all earnest money on deposit shall be returned to the Buyer.

 

 

 

 

 

5. Title Commitment. Within seven (7) days after the Effective Date, Seller, at its expense, shall order and deliver to Buyer a title commitment for the Property in the amount of the Purchase Price from Escrow Agent and obtain a copy of all documents which constitute exceptions to the title commitment. Buyer shall give Seller written notice within twenty (20) days following receipt of the Title Commitment of any condition of title (exceptions or requirements) that is not satisfactory to Buyer. Seller may, but shall not be obligated, to resolve such matters; provided, however, that mortgage liens may be resolved at closing. If Seller is unable or unwilling to resolve such matters before the expiration of the Inspection Period as defined above, then Buyer may, at Buyer’s sole option, either (1) accept title subject to the objections raised by Buyer and such accepted objections shall become Permitted Exceptions (“Permitted Exceptions”) without any adjustment in the Purchase Price, or (2) terminate this Agreement prior to the expiration of the Inspection Period pursuant to Paragraph 4 above, whereupon the earnest monies shall be immediately returned to Buyer by Escrow Agent, or (3) work with Seller, if mutually agreeable, to satisfy unacceptable matters and postpone the end of the Inspection Period and/or Closing Date to satisfy these matters. At Closing, Seller shall provide Buyer with an owner’s policy of title insurance in the amount of the Purchase Price. Seller shall pay the cost for the basic cost of the owner’s policy of title insurance, and Buyer shall pay the cost for all endorsements, changes, and modifications to the owner’s policy of title insurance.

 

6. Closing. Closing shall occur within thirty (30) days after the expiration of the Inspection Period (“Closing Date”) subject to the Property being delivered in compliance with all terms herein.

 

7. Title & Deliveries. At or prior to Closing, Seller shall deliver to the Escrow Agent and/or Buyer the following items for the Property, duly executed and acknowledged where required:

 

A. Conveyance Deed. A special warranty deed in the form satisfactory to Buyer, specifically stating all approved exceptions to title, if any, subject but not limited to, zoning or deed restrictions, easements and encumbrances of record by either Buyer or Seller, or future assessments if applicable.

 

B. Foreign Person Tax Withholding. Documentation or information required for compliance with Section 1445 of the Internal Revenue Code.

 

C. Additional Documents. Such additional documents as might be reasonably required by the Buyer, Buyer’s Lender, or the Escrow Agent to consummate the sale of the Property and convey clear title to the Buyer with all appurtenant rights.

 

D. Insurance Policy and Costs. Seller will pay the costs of Seller’s counsel, preparation of any deeds and any bill of sale, deliver and pay the basic costs for a title insurance policy in an amount equal to the Purchase Price, transfer taxes for the conveyance, and one half of the escrow or closing fees. Buyer will pay the cost of Buyer’s counsel, all loan costs required by Buyer’s lender, including title policy cost in excess of owner’s policy, Buyer’s portion of the cost of the owner’s policy of title insurance, one half of any escrow or closing fee, and recording fees for any deeds and mortgage, and any applicable mortgage tax.

 

E. Tax Prorations. All taxes and assessments (including pending assessments if the related improvement is substantially completed as of the Closing Date), whether payable in installments or not, for the year of closing will be prorated to the Closing Date based on the latest available tax rate and assessment valuation (with the parties signing a proration agreement as to adjustments when actual taxes are known).

 

 

8. Obligations of Seller & Conditions Precedent to Closing. Seller shall complete and deliver the Property in compliance with all terms and requirements stated herein, if not already done so. Buyer’s obligation to close on the Property or any lots within same is subject to and conditioned upon the compliance and satisfaction, as of the Closing Date, of each of the requirements described herein and below. Unless specifically stated otherwise, the satisfaction of these conditions shall be at Seller’s expense. Buyer shall cooperate with Seller to satisfy these conditions as needed.

 

A. Correctness of Representations and Warranties. Seller represents and warrants that (i) to its knowledge it holds good and marketable title in fee simple to the Property, (ii) all closing documents signed by Seller will be valid, authorized and binding upon Seller, (iii) to its knowledge no outstanding contracts, fees, debts or liens exist on the Property (except mortgage liens to be satisfied at closing and other items related to the development of the Property); and (iv) to Seller’s knowledge there are no leases or third-party rights/interests on the Property and Seller is in sole possession. These representations and warranties of Seller shall be evaluated by Buyer during its title review and the Inspection Period and shall not create any obligations of Seller or rights of Buyer, outside of those specified in Paragraphs 4 and 5 of this Agreement.

 

B. Final Plat Recording & 911 Addresses. Finalization and recording of the proposed plat and Seller’s delivering a copy thereof to Buyer on or before the Closing Date. The plat shall be deemed finalized after all required governmental approvals have been obtained, said plat has been duly recorded in the real property records of the applicable County Clerk’s office, corresponding 911 addresses have been provided by the Seller to the Buyer.

 

C. Covenants, Conditions, and Restrictions (“CC&Rs”). Seller shall draft CC&Rs for Buyer’s review prior to the expiration of the Inspection Period, and Buyer shall approve the CC&Rs so long as they are reasonable. If buyer does not believe that the CC&Rs are reasonable, it shall give Seller written notice specifying its objections and Seller and Buyer shall attempt to negotiate a final set of CC&Rs prior to the expiration of the Inspection Period. If Seller or its affiliate is the declarant and/or governing architectural review authority under the CC&Rs, then upon Buyer’s submittal from time to time, Seller shall approve Buyer’s submittals so long as they are in accordance with the CC&Rs.

 

D. Completion/Compliance. The Property and lots therein have been completed in full compliance with all terms hereof. All requirements by applicable local, state and federal governmental authorities will have been met or exceeded for the Property and each lot therein, including but not limited to, preliminary and final plat approval, proper construction and availability of fully operational utilities including roads, water, sanitary sewer, storm, sewer with all necessary permits and fully compliant (no violations) with all applicable rules, regulations, and ordinances of applicable authorities, and a written statement from the engineer of record that building permits are obtainable from the appropriate governmental agencies for the construction of single-family houses on the lots. A preliminary and final plat of the development, approved construction drawings from the municipal authority and an “AS BUILT” survey will be provided in “PDF” and “CAD” format to the Buyer as they become available. Each lot pin shall have a flagged wooden lathe to mark the pin location. Provided that Buyer provides Seller adequate and appropriate utility easements over and under the Property, as reasonably determined by Seller, Seller will cause permanent underground electric power and telecommunication facilities (collectively, the “Permanent Utilities”) to be installed and available to the perimeter of each lot within the Property within ninety (90) days after Buyer has poured the slab for a residence on a lot and has given Seller written notice that Buyer is ready for the Permanent Utilities for the lot. This post-closing obligation of Seller to provide Permanent Utilities shall expressly survive Closing for twenty-four (24) months.

 

E. Permits and Environmental Concerns. Seller will obtain and complete all requirements related to Storm Water Pollution Prevention Plans (“SWPPP”) as required by applicable local, state and federal authorities and maintain the same during the development of the lots within the Property. Upon Closing, Seller will deliver to Buyer satisfactory approval from the appropriate authority/agency regarding storm water quality that all BMP’s are installed and maintained per the SWPPP. Upon Closing, Seller shall transfer (to the extent transferrable) the stormwater permit to Buyer and Buyer shall assume all responsibility for future maintenance and installation and Seller shall be released from liability thereon. Seller shall have caused all FEMA requirements to have been met for a home on any lot to be exempted from purchasing flood insurance and no portion of any house pad site (it being understood that some portions of some lots are within a flood plain) is to be located in a FEMA defined flood plain. Seller’s principals have no actual knowledge that the Property has been or is presently used for handling, storage, manufacturing, refining, transportation or disposal of “toxic material”, “hazardous substances”, or “hazardous waste”. If “hazardous wastes”, “hazardous substances”, or “hazardous material” is located on the Property, as determined by a Phase I or permitted Phase II environmental assessment obtained by the Buyer, then Buyer shall have the right to terminate this Agreement during the Inspection Period pursuant to Paragraph 4 above.

 

F. Trash, Trees, Brush & Debris. The Property is being sold “as-is” and Buyer shall be responsible for mowing, brush hogging, and removing, clearing, and disposing of all trees, trash and debris on the Property, except that Seller will remove any construction debris of which Buyer notifies Seller in writing prior to the expiration of the Inspection Period.

 

 

9.  Offsite Water Flow. Seller will deliver the Property at Closing with proper offsite water flow on and to the Property and which will be managed through the appropriate infrastructure.

 

10. Subsurface Rock. Prior to expiration of the Inspection Period, Buyer may terminate this Agreement pursuant to Paragraph 4 above and recover the earnest money upon the discovery of subsurface rock underlying the Property in any quantity deemed excessive by the Buyer, unless Seller has remedied the same to Buyer’s satisfaction.

 

11. Assessments.  So long as Developer is in control under the CC&Rs, Buyer shall be exempt from paying any and all applicable assessments (but will have to pay TAP fees and the amenity assessment) in the CC&Rs to the Developer during the Seller’s period of ownership, including, but not limited to regular and special assessments. Seller also agrees to exempt bona fide home builders from assessments in the CC&Rs, during the same time period.

 

12. Notice. All notices will be in writing and served by electronic transmission to the addresses shown below, until notification of a change of such addresses. All such notices shall be deemed delivered on the date initiated.

 

13. Disclosure by Buyer and Seller. One or more individuals representing the Buyer or Seller may hold real estate licenses from multiple states.

 

14. Default. If Seller has performed all of Seller’s obligations and fulfilled the conditions under this Agreement and, if within five (5) days after the date specified for Closing, the Buyer fails to make payment as required herein, through no fault of Seller, then Seller may, as its sole and exclusive remedy, cancel and terminate this Agreement and keep the earnest money deposit paid by the Buyer as liquidated damages. If Seller breaches this Agreement or fails to perform any of Seller’s obligations hereunder, then Buyer may as its sole remedy, (i) terminate this Agreement and receive a refund of all of the earnest money, or (ii) seek specific performance of this Agreement pursuant to the remainder of this Paragraph 14.

 

 

 

 

15. Binding Effect/Assignment. This Agreement will inure to the benefit of and bind the respective successors of the parties. Seller may not assign this Agreement or any obligations hereunder. Buyer may assign this Agreement and any and all rights and obligations hereunder at any time prior to closing to any person or entity controlling, controlled by, or under common control with Buyer. For purposes of this Paragraph a person or entity shall control an entity, if it, directly or indirectly, holds a majority interest in the entity to be controlled.

 

16. No Waiver. Failure of either party to exercise any rights under this Agreement shall not constitute a waiver of any right, nor excuse the other party’s full performance. No express waiver of any matter shall affect any other matter under this Agreement. Express waivers are only effective if in writing.

 

17. Brokerage. Buyer represents that it has not contracted with any real estate broker in connection with the transaction contemplated by this Agreement. Seller shall be responsible for paying a 4% Broker’s commission based on the Purchase Price to Dave Ramsey with Home Asset, Inc. Each party shall indemnify and hold the other party harmless from all claims, losses, liabilities, costs, fees, and expenses (including, but not limited to, court costs, litigation expenses, and attorneys’ fees) related to or incurred in connection with any claims for brokerage commissions arising by, through, or under the indemnifying party.

 

18. Entire Agreement. This document constitutes the entire agreement between the parties, incorporating all prior agreements, and may only be amended in writing executed by both parties. The exhibits attached to this Agreement are incorporated into this Agreement for all purposes.

 

19. Attorney’s Fees. If either party prevails against the other in a legal action concerning any part of this Agreement, the successful party shall be entitled to its reasonable attorney’s fees and costs connected with such action, through appellate and bankruptcy proceedings, in addition to all other recovery or relief. Costs shall include all deposition costs and expert fees, even if not used at trial.

 

20. Governing Law. This Agreement shall be governed and enforced in accordance with the law of the state where the Property is located.

 

21. Time. Buyer and Seller understand that “Time is of the Essence” for this Agreement.

 

22. ADA Compliant Ramps. Seller shall be responsible for installation of any and all required ADA sidewalk ramps for sidewalks installed by Seller. Said ramps shall meet all the ADA Guidelines, Code and Specifications for such ramps.

 

23. Special Stipulations.

 

 

 

 

 

24. AS-IS. Subject to the representations and covenants, stated herein to expressly survive Closing, and the specific provisions of Paragraph 8.D, the parties intend that the sale of the Property will be made on an “As Is, Where Is” basis with all faults, in accordance with the terms and provisions of Exhibit C.

 

 

25. Statutory Notices. To the extent applicable, Seller gives Buyer the notices set forth in Exhibit D.