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Exhibit 10(j)
AGREEMENT OF SALE
THIS AGREEMENT, made and entered into this 8th day of September, 1995 made
by and between LAND DEVELOPMENT ASSOCIATES S.E., a Puerto Rico limited
partnership, having an office at the Doral Building, Suite 700, 650 Xxxxx
Xxxxxx Avenue, Hato Rey, Puerto Rico (hereinafter referred to as the "Seller",)
and Twenty First Century Homes S.E., a Puerto Rico special partnership, having
an office at Central Mercantil Internacional, Catao, Puerto Rico (hereinafter
referred to as the Buyer).
PRELIMINARY STATEMENT
WHEREAS Seller owns two (2) parcels of land of approximately 13,577.87
square meters (3.45 cuerdas) and 13,728.45 square meters (3.49 cuerdas) in the
San Xxxxx Xxxx of Carolina, Puerto Rico, which parcels of land are identified
as Parcel II-1 and Parcel II-2, respectively, in surveys prepared by Engineer
Xxxx X. Xxxxxxx on May 25, 1995, copies of which are attached hereto as
Exhibit A (hereinafter collectively referred to as the ("Parcels").
WHEREAS the Parcels are an integral and important part of Parque Escorial,
a master planned residential and commercial community (hereinafter referred to
as "Parque Escorial") being developed by Seller in a parcel of land of
approximately 439 cuerdas located in the municipalities of San Xxxx and
Carolina, Puerto Rico (hereinafter referred to as "Main Farm"), best described
in the attached copy of the Parque Escorial master plan (the "Master Plan"),
which is made Exhibit B hereto, and as such, the Parcel shall, at the Time of
Settlement, as said term is defined in Paragraph 4 hereof, be subject to (i)
certain restrictive covenants pursuant to a Deed of Declaration of Covenants,
Conditions and Restrictions and Establishment of Parque Escorial Homeowners
Association (hereinafter referred to as the "Restrictive Covenants), a draft of
which is attached hereto as Exhibit C, (ii) the design standards for Parque
Escorial (hereinafter referred to as the "Design Standards"), attached hereto
as Exhibit D, (iii) certain use restrictions best described in Paragraph 2
(xiii) of this Agreement (hereinafter referred to as the Wal-Mart Use
Restrictions) and (iv) other use restrictions best described in Paragraph 2 (i)
(hereinafter referred to as the "Use Restrictions").
WHEREAS, the Parcels are two of approximately ten (10) parcels of land of
various sizes comprising Phase II, as said term is defined in the Master Plan
and the Design Standards, (hereinafter referred to as "Phase II"), on which
approximately one thousand ninety five (1,095) residential units are planned to
be constructed in accordance with the provisions of the Restrictive Covenants,
the Design Standards, and any other restriction specified in this Agreement,
and subject to the approval of Seller and the Architectural Review Committee,
as said term is defined in the Restrictive Covenants (hereinafter referred to
as the "Architectural Review Committee").
WHEREAS, Parcel II is one of several phases in which Seller plans to
develop the areas designated for residential use in the Master Plan,
(hereinafter referred to as the "Residential Zone").
WHEREAS, pursuant to the Master Plan and unless otherwise approved by
Seller, the Parcels can only be used for the development of one (1) or two (2)
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residential projects totalling not more than one hundred and sixty (160) three
bedroom units, or its equivalency in units with less or more bedrooms as
determined by Seller in accordance with the standards of the Planning Board of
Puerto Rico, to be designed and built in accordance with the Restrictive
Covenants, the Design Standards and subject to the approval of the
Architectural Review Committee, (hereinafter referred to as the "Project").
WHEREAS, Seller has agreed to sell and Buyer agrees to purchase the
Parcels under the terms and conditions hereinafter set forth, together with all
rights, titles, improvements and any and all things appertaining thereto and or
forming part thereof.
WHEREAS, subject to the provisions hereof, this agreement shall without
further action of Seller and Buyer be a binding Agreement of Sale (hereinafter
referred to as the "Agreement"), enforceable at law or in equity for the sale
by Seller and purchase by Buyer of the Parcels at the Purchase Price provided
in Paragraph 1 hereof, upon the terms and conditions contained herein.
WHEREAS, it is the expressed intention of the parties that this Agreement
is solely for the benefit of the parties hereto and shall give rise to no
rights to any other party, and under no circumstances shall Buyer transfer or
assign this Agreement to another party except with the written consent of the
Seller, provided, however, that if such transfer or assignment shall be to a
party related to Buyer through common ownership and that reasonable evidence
of such relationship is provided by Buyer to Seller to the effect that such
transfer or assignment in no way alters the intent, terms, conditions and
guarantees of this Agreement, Seller shall not unduly withhold its consent to
the assignment. Any such assignment or transfer will not release Buyer from
the obligations and responsibilities assumed under the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth below,
the parties agree as follows:
1. Purchase Price; Reimbursement of Impact Fees. Subject to the
provisions of Paragraphs 4 thru 11 hereof, the Purchase Price of the Parcels
shall be equal to the amount obtained from multiplying Twenty Two Thousand
Dollars ($22,000) times the number of three (3) bedroom units, or its
equivalency in units with less or more bedrooms, comprising the Project at any
time, but in no event shall the Purchase Price be less than Three Million Five
Hundred Twenty Thousand Dollars ($3,520,000) and shall be payable as follows:
(i) One Hundred Thousand Dollars ($100,000) as xxxxxxx money (hereinafter
referred to as the "Xxxxxxx Money"), upon the execution of this Agreement,
the receipt and adequacy of which is hereby acknowledged;
(ii) A certified or bank manager's check from a banking institution to be
delivered to Seller at the Time of Settlement in the amount by which the
Purchase Price, as determined pursuant to the provisions of this
Paragraph, exceeds the Xxxxxxx Money.
The obligation of Buyer to pay Seller Twenty Two Thousand Dollars
($22,000) for each three (3) bedroom unit, or its equivalency in units
with more or less bedrooms, built on the Parcels shall survive the Time of
Settlement, it being understood that in order to calculate the Purchase
Price any unit which is deemed to be convertible to a unit with additional
bedrooms shall be considered as a unit having the maximum number of
bedrooms that it could be converted into.
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In addition to the Purchase Price, at the Time of Settlement Buyer
shall pay Seller at any time prior to the issuance of the Use Permit of
the Project, an amount equal to Five Hundred andTwenty Dollars ($520.00)
multiplied by the number of units in the Project as a reimbursement of
advances made by Seller on the $1,000 per unit impact fee charged by the
Puerto Rico Aqueduct and Sewer Authority ("PRASA") pursuant to an
agreement entered into by Seller and PRASA on May 27, 1994, whereby PRASA
endorsed Parque Escorial and the obligations of each developer of land in
Parque Escorial towards PRASA are established including but not limited to
the payment of tap-in fees for the connection of the water and sewer
systems and an impact fee of $1,000 per unit, a copy of which is attached
hereto as Exhibit E.
2. Warranties and Representations of Seller. Seller warrants and
represents to Buyer the following:
(i) That Seller is, and on the Time of Settlement will be, the
lawful owner of the Parcels to be sold and delivered by it
hereunder and has full right and authority to sell and deliver
the same in accordance with this Agreement. Upon the delivery
of the Parcels to Buyer pursuant to the provisions of this
Agreement, Seller will convey and transfer to Buyer by Public
Deed a valid, fee simple (pleno dominio), insurable and
recordable title to the Parcels, free and clear of all mortgage
liens and of any encumbrances and other charges or restrictions
which presently affect the Parcels, subject only to those
matters set forth herein including but not limited to the (a)
the Restrictive Covenants; (b) the Design Standards; (c) the
Wal-Mart Use Restrictions; (d) the requirements of PRASA as
defined in Exhibit E hereto; (e) the requirements of the Highway
Authority of Puerto Rico, as defined in Exhibit F hereto; (f) a
covenant in the deed of sale providing that the Parcels can only
be developed for residential purposes and that unless otherwise
approved by Seller, the density of development on the Parcels
may not exceed one hundred and sixty (160) three bedroom units,
and that the design and construction of the Project have to be
in conformity with the Restrictive Covenants, the Design
Standards, as determined by the Architectural Review Committee,
(herein referred to as the "Use Restrictions"); and (g) to those
normal and ordinary liens, encumbrances and easements required
by governmental authorities for public services and which a
search at the Registry of the Property would reveal hereto;
(ii) That Seller shall not take any action during the term of this
Agreement which would impair title to the Parcels or further
encumber the Parcels, except for (a) the mortgage liens securing
financing arrangements required by Seller for the development of
Parque Escorial, from which the Parcels will be released upon
its acquisition by Buyer, (b) encumbrances and easements
required by the governmental authorities for the furnishing of
public services, (c) the Restrictive Covenants (d) the Design
Standards (e) the Wal-Mart Use Restrictions and (f) the Use
Restrictions.
(iii) That Seller shall not willfully take any action which would
impair the physical condition of the Parcels during the term of
this Agreement;
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(iv) That Seller has not made and does not make any representations
or warranties whatsoever concerning the physical condition of
the Parcels, accesses, zoning, soil or subsoil condition,
availability of utilities, construction or use permits, or any
other permits issued by the government agencies affecting or
related to or necessary for the development or use of the
Parcels or any other matter or thing affecting or related to the
Parcels or the Project, other than those specifically referred
to in (a) this Agreement, (b) the Master Plan, (c) the "Consulta
de Ubicacion" for Parque Escorial issued by the Planning Board
of Puerto Rico dated October 27, 1992, as amended on December
23, 1994, copies of which are attached hereto as Exhibits G and
H (hereinafter referred to as the "Consulta de Ubicacion") and
(d) the "Desarrollo Preliminar" of Parque Escorial approved by
the Administracion de Reglamentos y Permisos of Puerto Rico
("ARPE") on , 1995, a copy of which is attached hereto as
Exhibit I, (hereinafter referred to as the "Desarrollo
Preliminar") (e) an agreement between Seller and PRASA, a copy
of which is attached hereto as Exhibit E, (f) the agreement
entered into by Seller and the Puerto Rico Highway Authority
dated November 22, 1991, as ratified on August 22, 1994, which
states among other things, that each developer of residential
units in Parque Escorial has to pay a $1,000 impact fee to the
Highway Authority for each residential unit to be developed,
including those to be developed in the Parcels, a copy of which
is attached hereto as Exhibit F, (g) the Wal-Mart Use
Restrictions, (h) the Use Restrictions and (i) the warranties
and representations made herein by Seller regarding the
Infrastructure Improvements, as said term is defined in
Paragraph 2 (vi) hereof, the Phase II Infrastructure
Improvements, as said term is defined in Paragraph 2 (vii), and
that the Parcels are presently approved for "high medium
density" residential use under the parameters of a R-3 zoning.
(iv) That Seller shall provide Buyer at least fifteen (15) calendar
days before the Time of Settlement with (i) a written report
prepared by a qualified geotechnical engineer to the effect that
the compaction of the fill material placed on the Parcels by
Seller is in accordance with ASTM-D 2922 standard test methods
for density of soil and soil aggregate in place by nuclear
methods (shallow depth) to no less than ninety five percent
(95%) of the maximum dry density as defined in ASTM-D698
standard test methods for moisture density relations of soils
and soil aggregate mixtures using 5.5 pound rammer and 12 inch
drop ("standard xxxxxxx tests"); (ii) a certification by a
licensed civil engineer or surveyor to the effect that the rough
grading, as said term is known in the land development industry,
of the Parcels at the Time of Settlement is the one specified in
the grading plan of the Parcels that is part of Exhibit N
hereof, a copy of which Buyer hereby acknowledges having
received prior to the execution of this Agreement; and (iii) a
certification from Seller to the effect that the Parcels,
including the access to the Parcels to be provided by Seller for
the transportation of materials and construction equipment to be
used in the construction of the Project, shall be in such
physical condition at the Time of Settlement that Buyer shall be
able to commence the development of the Project immediately
thereafter.
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The above conditions are hereinafter referred to as the
"Conditions Precedent".
(vi) That prior to (i) the date in which the Project has been issued
a Use Permit by the regulatory governmental agencies or (ii) the
date in which such Use Permit could been reasonably expected to
have been issued had the work specified hereinafter had been
completed on a timely and satisfactory manner, absent any acts
of God or force majeure, Seller shall have substantially
completed (a) all the improvements to the 65th Infantry Avenue
described in the plans and specifications prepared by Engineer
Xxxx X. Xxxxxxx, dated February 11, 1994, as amended from time
to time, made an exhibit hereto by reference only (hereinafter
referred to as "Exhibit J") which plans and specifications
constitute the object of a construction contract awarded to
Xxxxxx Construction Company on October 21, 1994 made an exhibit
hereto by reference only (hereinafter referred to as Exhibit K),
(b) all the improvements to the infrastructure of Parque
Escorial described in the plans and specifications prepared by
Engineer Xxxx X. Xxxxxxx, dated March 1, 1994, as amended from
time to time, made an exhibit hereto by reference only
(hereinafter referred to as "Exhibit L"), which plans and
specifications constitute the object of a construction contract
awarded to Xxxxxx Construction Company on October 21, 1994, made
Exhibit M hereto by reference only. The
improvements to the 65th Infantry Avenue described in Exhibit J
hereto and the improvements to the infrastructure of Parque
Escorial described in Exhibit L hereto shall be collectively
referred to herein as the "Infrastructure Improvements".
(vii) That prior to the date in which the Project has been issued a
Use Permit by the pertinent regulatory governmental agencies or
the date in which such Use Permit could had been reasonably
expected to have been issued had the work described hereinafter
been completed on a timely and satisfactory manner, absent any
act of God or force majeure, Seller shall have completed (a)
those improvements to Phase II shown in the plans and
specifications prepared by Engineer Xxxx X. Xxxxxxx, dated May
24, 1995, as amended from time to time, a copy of which Buyer
acknowledges having received prior to the execution of this
Agreement, made Exhibit N hereto by reference only, which are
the object of a construction contract awarded to Constructora
Xxxxxxxx, Inc., on August 24, 1995, made an exhibit hereto by
reference only (hereinafter referred to as Exhibit O), and (b)
the improvements described hereinafter, none of which is part of
the work contemplated under Exhibits J, L, N and O:
1) Cyclone wire fence along the exterior perimeter of Phase II
and a concrete fence along the North perimeter of the
Residential Zone, including the North boundary of Parcel II-1.
2) Gate and guard house at the East entrance of Boulevard Media
Xxxx, as said road is identified in the Master Plan.
3) Extension of Avenida Sur, as said road is identified in the
Master Plan, from the East entrance of the Residential Zone to
the site of the Carolina Regional College of the University of
Puerto Rico.
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4) Landscaping of Avenida Este, as said road is identified in
the Master Plan.
5) Off site electrical work required to
service Phase II.
6) Concrete fence along the north boundary of the Residential
Zone to be built in stages. The first stage will consist of the
north boundary of Parcel II-10, Parcel II-1 and the east section
of the Great Lawn Park, as said area is identified in the Master
Plan.
Those improvements described in Exhibit N, which are part
of the construction contract referred to herein as Exhibit O and
the improvements listed herein under Paragraph 2 (vii) (b)
hereof are referred to herein as the "Phase II Infrastructure
Improvements".
(viii) That Seller shall have available for inspection by Buyer at all
times at its offices copies of Exhibits J, K, L, M and O.
(ix) That this Agreement and the documents to be executed by Seller
pursuant to the terms thereof constitute the legal, valid and
binding obligation of Seller enforceable in accordance with its
terms.
(x) That all necessary actions have been taken by the Board of
Directors of Seller to authorize the execution and delivery of
this Agreement and the consummation of all transactions
contemplated hereunder.
(xi) That all information owned or available to Seller as of the date
of this document or at any time, prior, during or after the
construction of the Project such as plans, studies and
government agencies' approvals of any kind pertaining to the
development of the Parcels or Parque Escorial shall be made
available at no cost to Buyer for the purpose of designing the
Project and seeking the necessary approvals from governmental
agencies for the proposed development of the Project or for any
other reasonable use.
(xii) That other than (a) the Restrictive Covenants (b) the Design
Standards, (c) the Wal-Mart Use Restrictions, (d) the Use
Restrictions and (e) those restrictions or conditions imposed by
the government agencies as described in Exhibits E thru I or
other restrictions or requirements typical of the development of
a master planned community, there are no other restrictions
regarding the use of the Parcels as the site of the Project to
be developed as intended in the Master Plan.
(xiii) That upon the sale of a parcel of land of 63 cuerdas to Wal-Mart
Puerto Rico, Inc. ("Wal-Mart") on March 27, 1991, certain
restrictions were imposed on the Main Farm but excluding the
parcel acquired by Wal-Mart (herein referred to as the "Wal-Mart
Use Restrictions") which restrictions, as a result of subsequent
amendments, are now as follows:
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(a) Unless otherwise waived by Wal-Mart, no portion of Parque
Escorial, including but not limited to the Parcels, shall be
used for, nor shall there be permitted upon Parque Escorial the
operation of: (i) any type of department store, wholesale club
or supermarket store; or (ii) any other type of single retail
store containing more than twenty five thousand (25,000) square
feet of gross floor area.
(xiv) That Wal-Mart has secured zoning approval from the Planning
Board of Puerto Rico for a 480,000 sq. ft. shopping center to be
built on the parcel of 63 cuerdas in Parque Escorial sold to
Wal-Mart, which approval is evidenced in Exhibits G and H
hereto, of which a first phase of approximately 260,000 sq. ft.
is presently under construction and expected to be opened to the
public in 1995, and that Wal-Mart intends to solicit
approximately 120,000 sq. ft. more of commercial space at a
later date for a total square footage of approximately 600,000
sq.ft. Seller approved the construction of said shopping center
subject to the terms and conditions contained in an agreement
entered into by Seller and Wal-Mart on March 27, 1991, as
subsequently amended, a copy of which is available for review by
Buyer at the offices of Seller.
(xv) That Seller shall dedicate, in accordance with the various
stages of development of Parque Escorial and as required by the
pertinent governmental agencies, to the proper governmental
agencies the main avenues, recreational areas and community
facilities that will be built by Seller in Parque Escorial,
including Phase II, pursuant to the requirements of the Planning
Board of Puerto Rico, as specified in the "Consulta de
Ubicacion" and the "Desarrollo Preliminar".
(xvi) That Seller shall construct, in phases and as required in the
sole opinion of Seller, during the various stages of development
of Parque Escorial, the central recreational area of Parque
Escorial, identified in the Master Plan as the "Great Lawn
Park", and the community facilities identified as such in the
Master Plan, required under the "Consulta de Ubicacion" and the
"Desarrollo Preliminar" for Phase II.
(xvii) That Seller shall provide an adequate area within Parque
Escorial for the construction by Buyer, subject to the approval
of the Architectural Review Committee, of a temporary structure
to be used as the sales office for the Project, the construction
and operating costs of which shall be for the sole account of
Buyer. Said temporary structure shall be removed immediately
after it has served the purpose for what it was erected.
(xviii) That Seller shall preserve and promote the concept of Parque
Escorial as a master planned community as envisioned in the
Master Plan.
(xix) That unless otherwise permitted hereunder, Seller shall release
Buyer from any responsibility for the construction by Seller of
the Infrastructure Improvements, and Phase II Infrastructure
Improvements.
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(xx) That Seller shall not sell parcels of land within Phase II in
excess of those that on a cumulative basis would entitled their
owners to commence construction before the 1st day of December
1996 of more than five hundred and forty three (543) three
bedroom units. Notwithstanding the above, upon the occurrence of
any of the events listed hereinafter Seller shall be entitled to
sell other parcels of land within Phase II and permit the
commencement of construction of residential units thereon as
long as the total number of units so approved by Seller to
commence construction prior to the 1st day of December 1996 on
any such parcel(s) shall not exceed the same number of units
previously approved for any parcel(s) whose buyer(s) fail(s) to
comply with the following conditions:
(a) A buyer of any of the parcels of land within Phase II on
which Seller has initially agreed to the commencement of
construction of the first five hundred and forty three (543)
residential units fails, for reasons not attributable to Seller,
to acquire any such parcels of land within the term provided
under their respective agreements of sale, including this
Agreement;
(b) After acquiring any of such parcel(s) of land II the
buyer(s) fail(s), for reasons not attributable to Seller, to
commence the construction of the units to be erected upon any
such parcel before the 30th day of June 1996, or
(c) After commencing construction of the residential units to
be erected on any such parels of land, construction work is
stopped for a period of more than four (4) months for reasons
not attributable to Seller or acts of God or force majeure.
Furthermore, Seller shall be entitled to sell at any time
additional parcels of land within the Residential Zone,
including Phase II, that upon their development would exceed
five hundred forty three (543) residential units, provided that
the respective agreements of sale and the deeds of sale shall
specifically restrict the commencement of construction of the
residential units to be erected thereon to a date which will not
be in violation of the warranties and representations made by
Seller herein.
(xxi) The Seller shall protect, indemnify and save harmless the Buyer
from and against all liabilities, obligations, damages,
penalties, claims, causes of action, costs, charges and expenses
(including without limiting the generality of the foregoing,
court costs, attorneys' and consultants' fees, environmental
cleanup costs, natural resources damages, fines, penalties and
damages to persons, personal property, real property and
business enterprises, including any and all past, present and
future claims and liability arising out of or relating to the
environmental condition of the Parcels as of the Time of
Settlement, existence of any environmentl hazard on the Parcels
as of the Time of Settlement and any release or threat of
release of any Hazardous Substance (as hereinafter defined) of
any kind in, on, under or from the Parcels at any time resulting
from a condition existing as of the Time of Settlement which may
be imposed upon or incurred by or asserted against the Buyer by
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reason of (i) any accident, injury or damage to any person or
property occurring on or about the Parcels or any part thereof,
(ii) any use, non-use or condition of the Parcels or any part
thereof, or (iv) any necessity to defend any of the rights,
title or interest conveyed to Buyer by virtue of the Deed of
Sale. Any amounts payable to the Buyer under this paragraph
which are not paid within thirty (30) days after written demand
therefor by the Buyer shall bear interest from the date of such
demand until full payment thereof at a fluctuating annual rate
computed on the basis of a three-hundred-sixty-day (360-day)
year and the actual number of days elapsed) equal to the "prime
rate" publicly announced by Citibank, N.A. in New York, New
York, as its reference, base or prime rate (herein the "prime
rate") such fluctuating rate to change simultaneously with the
changes in the prime rate. In no event shall the interest rate
to be charged hereunder exceed the maximum permissible legal
rate. In case any action, suit or proceeding is brought against
the Buyer by reason of any such occurrence, the Seller, upon
request by the Buyer, will at the Seller's expenses resist and
defend such action, suit or proceeding or cause the same to be
resisted or defended, either by counsel designated by the Seller
and approved by the Buyer or, where such occurrence is covered
by liability insurance, by counsel designated by the insurer.
Notwithstanding anything to the contrary in this Agreement, the
provisions of this indemnity and all other representations,
warranties and covenants contained in this Agreement shall
survive the Time of Settlement. As used in this Agreement the
term Hazardous Substance has the following meaning; (i) any
"hazardous substance", "pollutant" or "contaminant" as said
terms are defined in clauses fourteen (14) and thirty-three (33)
of Section one hundred one (101) of the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA)
[Title Forty-Two (42) United States Code (U.S.C.) Section nine
thousand six hundred one (9,601), clauses fourteen (14) and
thirty-three (33)], or Title Forty (40) Code of Federal
Regulations (C.F.R.) Part three hundred two (302), as said act
and regulation may be amended prior to the Time of Settlement;
(ii) any "hazardous waste" as said term is defined as of the
Time of Settlement in the Puerto Rico Environmental Quality
Board Regulation for the Control of Hazardous and Non-Hazardous
Solid Wastes; (iii) any toxic or hazardous substance, material
or waste (whether solid, liquid or gaseous); (iv) any substance
containing "petroleum", as that term is defined as of the Time
of Settlement, in Section nine thousand one (9001), clause eight
(8) of the Resource Conservation and Recovery Act (RCRA),
[Title Forty-Two (42) U.S.C. Section six thousand nine hundred
ninety-one (6,991), clause eight (8)], or Title Forty (40)
C.F.R. Part two hundred eighty point one (280.1); or (v) any
other substance for which any governmental entity shall be
entitled, pursuant to all presently existing rules, regulations
and laws, require special handling in its collection, storage,
treatment or disposal.
3. Warranties and Representations of Buyer. Buyer warrants and
represents to Seller the following:
(i) That Buyer hereby expressly acknowledges and accepts that no
other such representations or warranties have been made or
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implied and agrees that other than the (a) Infrastructure
Improvements, as they relate to the Parcels, to be completed by
Seller, (b) the Phase II Infrastructure Improvements to be
completed by Seller, and (c) the representations and warranties
made herein by Seller, the Parcels will be acquired by Buyer on
an "as is where is" condition. It shall be Buyer's sole
responsibility to satisfy itself, at its sole cost, expense and
risk, as to all aspects regarding the physical condition of the
Parcels and, accordingly, does herein specifically renounce and
waive any and all rights, claims and/or causes of action against
Seller as to the Parcels, forever releasing, relieving and
holding harmless Seller from any and all liability or legal
responsibility in connection therewith. Notwithstanding
anything to the contrary herein, Seller shall not be released
from its liability or legal responsibility for any
representations made by Seller herein.
(ii) That Buyer shall bear all the costs, expenses and risks related
to any request filed by Buyer with any government agency
for the approval of the Project provided that all the warranties
and representations made herein by Seller remain valid.
(iii) That Buyer shall not seek during the term of this Agreement or
at any time after its acquisition of the Parcels any changes to
the presently permitted uses or zoning of the Parcels. This
restriction shall also apply to all the succesors of Buyer in
the ownership of the Parcels.
(iv) That the Parcels constitute an integral and important part of
Parque Escorial and as such the Parcels shall always remain
subject to and the Project shall be constructed pursuant to (a)
the Restrictive Covenants, as amended from time to time by the
governing body of the Parque Escorial Residential Owners
Association, a non profit corporation to be organized under the
laws of Puerto Rico by Seller as an association of all the
owners of real property in the residential area of Parque
Escorial in order to insure the orderly development of the
Residential Zone and to provide for the efficient preservation
of the facilities and amenities to be constructed in the
Residential Zone (hereinafter referred to as the "Association"),
(b) the Design Standards, as amended from time to time by Seller
or the Architectural Review Committee, (c) the Wal-Mart
Restrictions and (d) the Use Restrictions.
(v) That the plans for the development of the Parcels and
construction of the Project, as well as any changes made
thereafter which may modify the character, layout, elevations or
density of the Project, shall be submitted by Buyer to the
Architectural Review Committee for its approval prior to
submitting them to the pertinent government agencies.
(vi) That the sales price of the three (3) bedroom units comprising
the Project shall not be less than One Hundred Thousand Dollars
($100,000).
(vii) That Buyer agrees that its employees, agents, contractors and
sub-contractors will only utilize the access to the Parcels to
be provided by Seller for the transportation of construction
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equipment, supplies and construction materials and that Buyer
will reimburse Seller for any damages caused by those parties
from the unauthorized use of roads or other improvements within
Parque Escorial.
(viii) That Buyer shall impose upon the Parcels its own restrictive
covenants to be administered by a homeowner association composed
of all the owners of units in the Project which shall be
responsible, among other things, for the collection of the fees
to be paid to the Association, as provided in the Restrictive
Covenants, for the services rendered by the Association to the
Residential Zone, including but not limited to the maintenance
of the recreational areas, the fences, the green areas, and the
roads, the security of the Residential Zone and any other
services that the Association deems fit to render pursuant to
provisions of its Certificate of Incorporation and By-Laws.
(ix) That Buyer shall pay (i) for fifty percent (50%) of the cost of
the fence to be built at the boundary line of Parcel II-2 with
Parcel II-3 and (ii) one hundred percent (100%) of the cost of
the fence to be built on the boundary line of the Parcels with
Boulevard Media Xxxx, as said road is identified in the Master
Plan.
(x) That Buyer shall hold Seller safe and harmless from any claim
from third parties resulting from the construction by Buyer and
its agents of the improvements and residential units comprising
the Project including but not limited to those claims arising
from accidents or damages caused by Buyer or its agents outside
of the Parcels.
(xi) That Buyer shall hold Seller safe and harmless from any claim by
third parties arising out of any breach by Buyer of the (a) the
Design Standards, (b) Restrictive Covenants, (c) the Use
Restrictions, (d) any other restriction or condition to which
the Parcels are subject pursuant to the terms and conditions of
this Agreement or, (e) any misrepresentations made by Buyer to
any party.
(xii) That Buyer shall submit to Seller, for Seller's approval, a copy
of the form of option agreement or agreement of sale to be
executed between Seller and the buyers of units within the
Project and shall not enter into any such option agreement or
agreement of sale with any such buyers until such time as Seller
has issued its approval, which approval Seller shall not
unreasonably deny.
(xiii) That Buyer acknowledges and accepts that Seller, as the master
developer of Parque Escorial, holds the exclusive right to seek
and make amendments to the Master Plan in the interest of the
overall development of Parque Escorial, as provided that any
such amendments shall not be in violation of the representations
made by Seller herein.
(xiv) That Buyer acknowledges and agrees that other than the soil
compaction tests referred to in Paragraph 2 (iv) hereof and
those representations and warranties made by Seller as to
environmental matters and Hazardous Substances, as stated in
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Paragraph 2 sub-paragraph (xxi) hereof, it shall be the sole
responsibility of Buyer to conduct its own soil and sub-soil
studies prior to the execution of this Agreement or at any time
during the term of this Agreement and Buyer hereby releases
Seller from any condition regarding the soil or sub-soil of the
Parcels that might surface prior to the execution of this
Agreement, during the term of the Agreement, or after the Time
of Settlement. Notwithstanding the above, Seller shall make
available to Buyer, at Buyer's request, any other soil or sub-
soil tests that Seller may have conducted on the Parcel; it
being understood that the submittal by Seller of said reports to
Buyer shall not impose any obligation or liability upon Seller
and shall not amend or modify the obligations of Buyer
hereunder.
(xv) That Buyer acknowledges and agrees that the timely and orderly
construction of the Project as an integral part of Phase II is
of utmost importance to the successful development of Parque
Escorial as a master planned community; therefore, Buyer or any
of its successors in the ownership of the Parcel shall have
until the later of (i) the 31st day of December 1996 or (ii)
twelve (12) months after the Time of Settlement should the Time
of Settlement take place after the 15th day of December 1995 for
reasons attributable to Seller, (hereinafter referred to as the
"Commencement of Construction Date"), to, in accordance with the
Design Standards, commence construction of the Project on the
Parcel. In the event that the Commencement of Construction Date
does not occur within the term specified hereinbefore in this
Paragraph, for reasons not attributable to Seller or acts of God
or force majeure. Seller shall have, upon the expiration of
said term and without the need of executing any other document,
a valid and binding first option to repurchase the Parcels at
the Purchase Price, as defined hereinbefore; said option to be
exercised by Seller within one hundred and twenty (120) days
from the date of expiration of such term. Failure by Seller to
exercise said option as provided hereinbefore shall render said
option null and void whereby Buyer shall have no further
obligation to sell the Parcels to Seller. For the purpose of
this Paragraph, the Commencement of Construction Date shall
refer to such date on which the Buyer has complied with all of
the following:
(i) the Construction Permit for the Project, as previously
approved by the Architectural Review Committee, has been
obtained;
(ii) a bonafide construction contract has been executed for
the construction of the Project;
(iii) a financing agreement for the construction of the
Project has been executed;
(iv) earth movement over the Parcels has commenced.
(xvi) The Buyer shall protect, indemnify and save harmless the Seller
from and against all liabilities, obligations, damages,
penalties, claims, causes of action, costs, charges and expenses
(including without limiting the generality of the foregoing,
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court costs, attorneys' and consultants' fees, environmental
cleanup costs, natural resources damages, fines, penalties and
damages to persons, personal property, real property and
business enterprises, including any and all past, present and
future claims and liability arising out of or relating to the
existence of any environmental condition on the Parcels
resulting from acts attributable to Buyer and any release or
threat of release of any Hazardous Substance (as said term is
defined in Paragraph 2 sub paragraph (xxi) hereof) of any kind
in, on, under or from the Parcels at any time after the Time of
Settlement resulting from acts attributable of Buyer which may
be imposed upon or incurred by or asserted against the Seller by
reason of (i) any accident, injury or damage to any person or
property occurring on or about the Parcels or any part thereof
or, (ii) any use, non-use or condition of the Parcels or any
part thereof. Any amounts payable to the Seller under this
paragraph which are not paid within thirty (30) days after
written demand therefor by the Seller shall bear interest from
the date of such demand until full payment thereof at a
fluctuating annual rate computed on the basis of a three-
hundred-sixty-day (360-day) year and the actual number of days
elapsed) equal to the "prime rate" publicly announced by
Citibank, N.A. in New York, New York, as its reference, base or
prime rate (herein the "prime rate") such fluctuating rate to
change simultaneously with the changes in the prime rate. In no
event shall the interest rate to be charged hereunder exceed the
maximum permissible legal rate. In case any action, suit or
proceeding is brought against the Seller by reason of any such
occurrence, the Buyer upon request by the Seller, will at the
Buyer's expense resist and defend such action, suit or
proceeding or cause the same to be resisted or defended, either
by counsel designated by the Seller and approved by the Buyer
or, where such occurrence is covered by liability insurance, by
counsel designated by the insurer.
Notwithstanding anything to the contrary in this Agreement, the
provisions of this indemnity and all other representations,
warranties and covenants contained in this Agreement shall
survive the Time of Settlement.
(xvii) That this Agreement and the documents to be executed by Buyer
pursuant to the terms thereof constitute the legal, valid and
binding obligations of Buyer enforceable in accordance with its
terms; and
(xviii) That all necessary actions have been taken by the Board of
Directors of Buyer to authorize the execution and delivery of
this Agreement and the consummation of all transactions
contemplated hereunder.
4. Time for Settlement. Unless otherwise provided in Paragraph 8 hereof,
the closing under the terms of this Agreement for sale by Seller and purchase
by Buyer of the Parcels shall be made not later than fifteen (15) calendar days
after Seller has given written notice to Buyer that the Conditions Precedent,
as said term is defined in Paragraph 2 (v), have been satisfied but in no event
sooner than the 30th day of November 1995 or later than the 15th day of
December 1995 (herein referred to as the "Time of Settlement"). The settlement
shall be at a place designated by Seller.
14
At the Time for Settlement, title to the Parcels shall be conveyed to
Buyer by a public deed pursuant to the terms and conditions contained herein.
The payment by Buyer of the Purchase Price and any other amounts of money owed
to Seller by Buyer under this Agreement shall be made at the Time of
Settlement, in exchange for the delivery by the Seller to Buyer of the deed
referred to in Paragraph 7 hereof (hereinafter referred to as the "Deed of
Sale"), in (i) cash or cashier's check drawn on a banking institution doing
business in Puerto Rico in favor of Seller in the amount by which the Purchase
Price and any such other amounts owed to Seller by Buyer under this Agreement
exceeds the Xxxxxxx Money.
5. Allocation of Certain Costs and Charges. Seller shall pay the
notarial fees of the Deed of Sale and those incurred by Seller in the
preparation of the Agreement and the Restrictive Covenants, and the internal
revenue stamps of the original of the Deed of Sale. Buyer shall pay for the
internal revenue stamps corresponding to the certified copies of the Deed of
Sale and the stamps to be cancelled in the registration of said certified
copies. Buyer shall be responsible for all costs of a title insurance policy
solicited by Buyer. Seller shall be responsible for all the unpaid property
taxes on the Parcels up to the time of execution of the Deed of Sale and Buyer
shall be responsible thereafter. Buyer will reimburse Seller at the Time of
Settlement for any portion of the property taxes for the Parcel paid in advance
by Seller.
Buyer warrants and represents that no broker has participated in the
transaction contemplated under this Agreement or is interested hereby, through
or on account of Buyer. Should any claim for commissions be made by any broker
on account of any acts of Buyer, Buyer will indemnify and hold Seller free and
harmless from any and all liabilities and expenses in connection therewith,
including but not limited to, all legal expenses incurred by Seller as a
consequence thereof.
6. Delivery of Possession. Actual possession of the Parcels shall be
delivered by Seller to Buyer at the Time of Settlement.
7. Deed to be Delivered by Seller at Settlement. The conveyance of the
Parcels under this Agreement shall be by deed (herein referred to as the "Deed
of Sale"). Such deed shall be prepared by Notary Public selected by Seller and
approved by Buyer as to form and substance.
8. Title Defects; Breach by Seller. In the event that (i) the Conditions
Precedent have not been satisfied or (ii) that Seller cannot transfer title to
the Parcels to Buyer as represented in this Agreement on the dates provided in
Paragraph 4 hereof for reasons attributable to Seller or on account of acts of
God or force majeure, but excluding those acts to be performed by Buyer, the
term of this Agreement shall be automatically extended until such time as the
Conditions Precedent have been satisfied and title to the Parcels can be
transferred to Buyer as represented in the Agreement but in no event shall the
Time of Settlement occur later than the 30th day of June 1996.
In the event that as of the 30th day of June 1996 Seller has not satisfied
the Conditions Precedent or if it is still unable to transfer title to the
Parcels to Buyer as represented in this Agreement for reasons attributable or
not to Seller, but excluding those acts to be performed by Buyer, Buyer shall
have the right to demand from Seller the immediate return of the Xxxxxxx Money
to Buyer together with a check in the amount of the costs incurred by Buyer
with third parties, as determined through bonafide evidence made available to
Seller by Buyer, in the preparation of the plans and geological investigations
15
for the Project in which case all the rights to such plans and geological
investigations shall be acquired by Seller but in no event shall any such
reimbursement of costs be greater than FOUR HUNDRED THOUSAND DOLLARS
($400,000.00) (hereinafter referred to as the "Reimbursement of Actual Costs")
whereby this Agreement shall be terminated and Seller and Buyer shall not have
any further rights, claims, causes of action or obligations under this
Agreement.
In the event that Buyer does not exercise any such right, the term of this
Agreement shall be further extended to the 30th day of September 1996 and if as
such date, the Conditions Precedent have not been satisfied for any reason not
attributable to Buyer or if Seller is unable to transfer title to the Parcels
to Buyer as represented herein, Seller shall immediately return the Xxxxxxx
Money to Buyer together with a check in the amount of the Reimbursement of
Actual Costs whereby this Agreement shall be terminated and Seller and Buyer
shall not have any other rights, claims, causes, actions or obligations under
this Agreement.
9. Default by Buyer. Thirty (30) days after notice thereof has been
given to Buyer, the Seller, at its sole option, may terminate all of its
obligations under this Agreement, without liability in the event of any of the
following events:
1) With respect to the Buyer or any assignee of the Agreement duly
approved by Seller (hereinafter referred to as the "Assignee"), (i)
the filing by or against it or any case or other proceedings for any
relief pursuant to the bankruptcy or insolvency laws of the United
States, of any State, of the United States Virgin Islands, or of the
Commonwealth of Puerto Rico; (ii) the filing of an answer admitting
insolvency or inability to pay debts as they became due; (iii) a
material adverse change in the financial condition of Buyer or any of
the assumptions and representations under which Seller was induced to
enter into this Agreement;
2) The attachment, seizure, levy upon, or taking possession by any
receiver, custodian or assignee for the benefit of creditors of a
substantial part of any property of the Buyer or the Assignee.
3) If Buyer assigns this Agreement to another party without the
expressed written consent of Seller.
4) If Buyer or the Assignee shall default in the performance of any
of the obligations and agreements on its part to be performed under
this Agreement.
Notwithstanding the above, failure by Seller to pay the Purchase
Price and all other amounts owed to Seller hereunder in the manner
and at the time provided in this Agreement shall not require thirty
(30) days notice from Seller to become an event of default under this
Agreement. Upon the occurrence of such event of default, Seller
shall be entitled to exercise its rights under this Agreement
immediately.
In the event that Seller decides, at its sole option, to
terminate its obligations under this Agreement, upon the happening of
any of the events of default described above, then the Xxxxxxx Money
shall be retained by Seller as additional consideration and
liquidated damages for such breach, whereupon Buyer and Seller, and
16
the Assignee, if any, shall be released and relieved from all
liability towards each other and this Agreement, shall become null
and void; it being understood that if Seller chooses to terminate its
obligations under this Agreement on account of any of the defaults
listed hereinbefore, the right to retain the Xxxxxxx Money, as
compensation and liquidated damages, shall be the sole remedy
available to Seller.
In the event that Seller chooses not to terminate its obligations
under this Agreement upon the occurrence of any of the events of
default listed hereinbefore, Seller shall retain its right to demand
specific performance under this Agreement and to seek legal and
monetary remedies from Buyer and the Assignee, if any, in an amount
equal to the sum of the Purchase Price and any monetary damages
suffered by Seller, including but not limited to legal costs incurred
by Seller.
10. Survival of Agreement. Notwithstanding any presumption to the
contrary, all agreements contained in this Agreement which by their nature
impliedly or expressly involve performance at any particular time after the
Time of Settlement shall survive the Time of Settlement.
11. Seller not Bound. The Seller is not liable in any manner by any oral
or written statements, representations, or other information pertaining to the
Parcel by any broker, agent, employee, servant, account, or any other person,
whether or not associated with or employed by Seller, unless the same are
specifically set forth herein.
12. Right of Access. During the term of this Agreement, Buyer and his
authorized representatives shall be entitled to enter the Parcels for the
purpose of inspecting the same, making appraisals and conducting engineering
investigations. Buyer agrees to hold Seller safe and harmless from any claim
or liability arising out of any injury to Buyer, or to any of his officers,
agents or employees while in the Parcels, and shall indemnify and hold Seller
harmless from any and all damages, losses, expenses, claims suits, judgments
and liabilities (including claims and suits by and judgment and liabilities to
Buyer's employees) resulting in any way from the acts to Buyer, his agents, or
employees as herein provided. During all times that Buyer enters upon and/or
conducts any surveys, studies, tests, etc. on the Parcels, Buyer shall have and
maintain, at Buyer's cost, public liability and property damage insurance in
form and substance acceptable to Seller with a minimum, single, combined
liability limit of $1,000,000.00 insuring Buyer and Buyer's authorized
representatives, agents, employees, etc., against all liability arising out of
or in connection with Buyer's use or occupancy of the Parcels. The insurance
required herein shall (i) be issued by an insurance company authorized to do
business in Puerto Rico with a financial rating of at least +3 status as
reported in the most recent edition of Best's Report; (ii) be issued as a
primary policy; and (iii) contain endorsements naming Seller as additional
insuree and requiring thirty days written notice from the insurance company to
Seller and Buyer before cancellation or changing coverage, scope or amounts.
Each policy or a certificate of insurance, together with evidence of payment of
premiums, shall be delivered to Seller prior to entry upon the Parcels.
Likewise, Seller and its authorized representatives shall be entitled to
enter the Parcels after its acquisition by Buyer for the purpose of conducting
engineering investigations and completing the improvements to the Parcels or
the Phase II Infrastructure Improvements that Seller is obligated to do
pursuant to the terms and conditions of this Agreement. Seller agrees to hold
17
Buyer safe and harmless from any claim or liability arising out of any injury
to Seller, or to any of his officers, agents or employees while in the Parcels,
and shall indemnify and hold Buyer harmless from any and all damages, losses,
expenses, claims suits, judgments and liabilities (including claims and suits
by and judgment and liabilities to Seller's employees) resulting in any way
from the acts to Seller, his agents, or employees as herein provided. During
all times that Seller enters upon and/or conducts any surveys, studies, tests,
etc. on the Parcels, Seller shall have and maintain, at his cost, public
liability and property damage insurance in form and substance acceptable to
Buyer with a minimum, single, combined liability limit of $1,000,000.00
insuring Seller and Seller's authorized representatives, agents, employees,
etc., against all liability arising out of or in connection with Seller's use
or occupancy of the Parcels. The insurance required herein shall (i) be issued
by an insurance company authorized to do business in Puerto Rico with a
financial rating of at least +3 status as reported in the most recent edition
of Best's Report; (ii) be issued as a primary policy; and (iii) contain
endorsements naming Buyer as additional insuree and requiring thirty days
written notice from the insurance company to Buyer and Seller before
cancellation or changing coverage, scope or amounts. Each policy or a
certificate of insurance, together with evidence of payment of premiums, shall
be delivered to Buyer prior to entry upon the Parcels.
13. Time to be of Essence. It is distinctly understood and agreed that
time wherever specified in this Agreement is made and declared to be of the
essence thereof.
14. Notices. Any notice required or permitted to be given under this
Agreement must be in writing and sent by certified or registered mail, return
receipt requested, to the respective addresses of the parties stated at the
outset of this Agreement or to such other single address as either party may
designate from time to time with the terms of this Paragraph. In the case of
Seller, all notices shall be addressed to Xx. Xxxxxxxxx Xxxxxx, Senior Vice
President, Interstate General Properties Limited Partnership S.E. - 650 Xxxxx
Xxxxxx Avenue, Doral Building, Suite 700, Hato Rey, P. R. 00918 with a copy to
Xx. Xxxxxx X. Xxxxxxxx, Executive Vice President at the same address. In case
of Buyer, all notices shall be addressed to Mr. , President.
15. Construction. This Agreement shall be construed in accordance with
and governed by the laws of the Commonwealth of Puerto Rico and Seller and
Buyer and their assignees hereby submit themselves to the exclusive
jurisdiction of the San Xxxx Section of the Superior Court of Puerto Rico for
any and all controversies that may arise thereunder.
16. Miscellaneous. Each of the parties acknowledges that it has not
relied on any agreements or commitments by the other party or any of their
affiliates with respect to the subject matter hereof except the agreements and
commitments specifically set forth herein. This Agreement supersedes and
nullifies all prior agrements and sets forth the entire understanding of the
parties with respect to the Parcel. The provisions of this Agreement may not
be waived, extended or modified by subsequent conduct, correspondence or
otherwise. Each of the parties agrees that it or he shall not obtain, seek to
obtain, or rely on any waiver extension, modification, or approval unless the
waiver, extension, modification or approval is evidenced in writing, and (b) is
specifically approved in writing by the Seller or by Buyer. No delay or
failure of the Seller in exercising any right or privilege hereunder shall
affect such right or privilege; nor shall any single or partial exercise
thereof or any abandonment or discontinuance of steps to enforce such right or
privilege preclude any further exercise thereof or of any other right or
18
privilege. Any waiver, extension, modification or approval related to this
Agreement shall be effective only to the extentand subject to the terms and
conditions in writing evidencing the same. Any waiver, extension, modification
or approval may be made subject to additional terms and conditions from time to
time after it is given or agreed to by the party giving or agreeing to it,
whether or not such waiver, extension, modification or approval has been relied
on in the meantime by the other party. Approval by Seller on any matter for
which approval is required shall not be unreasonably withheld. Whenever any
reference is made in this Agreement to an event of default, other than the
event of default caused by Buyer's failure to pay the Purchase Price and any
other amounts of money owed to Seller hereunder in the manner provided in this
Agreement, it shall be understood that no such event of default has occurred
until thirty (30) days have lapsed since notice thereof has been given to Buyer
provided therein.
IN WITNESS WHEREOF, the parties have executed this agreement by their
respective duly authorized officers on the day and year first above written.
SELLER: BUYER:
LAND DEVELOPMENT ASSOCIATES S.E., TWENTY FIRST CENTURY HOMES
a Puerto Rico special partnership S.E.
By: XXXXXXX & XXXXXXXXXXXXX
By: INTERSTATE GENERAL PROPERTIES CORP.
LIMITED PARTNERSHIP, S.E., a
Maryland limited partnership, By : /s/ Xxxxxxx Xxxxxxx
----------------------
its managing partner Xxxxxxx Xxxxxxx
Title: President
By: INTERSTATE GENERAL COMPANY,
L.P., a Delaware limited
partnership, a general By : SECOND BAYAMON
partner PREMISES, INC.
By: INTERSTATE GENERAL MANAGEMENT By: : /s/ Xxxxx Xxxxx Xxxxxx
CORPORATION, a Delaware cor- ----------------------
poration, its managing general Xxxxx Xxxxx Xxxxxx
partner Title: President
By : /s/ Xxxxxxxxx Xxxxxx Cros
----------------------------
Xxxxxxxxx Xxxxxx Cros
Title: Senior Vice President
