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OPTION AGREEMENT FOR THE PURCHASE AND SALE OF LAND
By and Between
SAWMILL POINT INVESTORS, LLC
and
THE CITY OF WILMINGTON, NORTH CAROLINA
NORTH CAROLINA
November ____, 2012
PPAB 2012858V6
TABLE OF CONTENTS
Section
Page
ARTICLE 1. OPTION TO PURCHASE PROPERTY 1.1 1.2 Option to Purchase Property ............................................................................................... 1 Purchase Price ..................................................................................................................... 1 ARTICLE 2. OPTION TERM AND PAYMENT 2.1 2.2 2.3 Option Term ........................................................................................................................ 1 Option Payment .................................................................................................................. 1 Option Extension ................................................................................................................ 1 ARTICLE 3. INSPECTION 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 Inspection of Property ......................................................................................................... 2 Seller’s Deliveries ............................................................................................................... 2 Exercise of Option to Purchase ........................................................................................... 3 Seller’s Cooperation ........................................................................................................... 3 Survey ................................................................................................................................. 3 Title Examination; Objections ............................................................................................ 3 Intentionally Deleted........................................................................................................... 4 Mortgages ........................................................................................................................... 4 Taxes and Assessments ....................................................................................................... 4 Environmental Study .......................................................................................................... 4 ARTICLE 4. REPRESENTATIONS AND WARRANTIES 4.1 4.2 4.3 Seller's Representations and Warranties ............................................................................. 4 Buyer’s Representations and Warranties ............................................................................ 7 Reliance; Survival ............................................................................................................... 7 ARTICLE 5. CLOSING 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Closing ................................................................................................................................ 7 Conditions Precedent to Buyer’s Obligation to Close. ....................................................... 8 Conditions Precedent to Seller’s Obligation to Close. ........................................................ 8 Deadline for Closing ........................................................................................................... 9 Seller’s Closing Documents................................................................................................ 9 Buyer’s Closing Documents ............................................................................................. 10 Closing Costs and Prorations ............................................................................................ 10 Taxes ................................................................................................................................. 10 ARTICLE 6. REMEDIES 6.1 6.2 Seller’s Remedies ............................................................................................................. 10 Buyer’s Remedies ............................................................................................................. 11 i
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ARTICLE 7. GENERAL PROVISIONS 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 Assignment ....................................................................................................................... 11 Intentionally Deleted......................................................................................................... 11 Risk of Loss ...................................................................................................................... 11 Intentionally Deleted......................................................................................................... 11 Casualty; Condemnation. .................................................................................................. 11 Brownfields Agreement .................................................................................................... 12 Intentionally Deleted......................................................................................................... 12 Notices .............................................................................................................................. 12 Weekends / Holidays ........................................................................................................ 13 Brokerage Commission..................................................................................................... 13 TIME IS OF THE ESSENCE ........................................................................................... 13 Applicable Law ................................................................................................................. 13 Non-Waiver ...................................................................................................................... 13 Entire Agreement .............................................................................................................. 13 Severability ....................................................................................................................... 14 Counterparts ...................................................................................................................... 14 Memorandum .................................................................................................................... 14 No Publicity ...................................................................................................................... 14 Withdrawal from Market .................................................................................................. 14 Principles of Interpretation and Definitions ...................................................................... 14 ii
PPAB 2012858V6
EXHIBITS
Exhibit A:
Property Description
Exhibit B:
Form of Memorandum of Option Agreement for the Purchase and Sale of Land
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PPAB 2012858V6
OPTION AGREEMENT FOR THE PURCHASE AND SALE OF LAND
THIS OPTION AGREEMENT FOR THE PURCHASE AND SALE OF LAND (this
“Agreement”) is made and entered into this ___ day of November, 2012 (“Effective Date”) by and
between SAWMILL POINT INVESTORS, LLC, a Delaware limited liability company (“Seller”), and
THE CITY OF WILMINGTON, NORTH CAROLINA, a public body corporate and politic
(“Buyer”). Seller and Buyer may be referred to individually as a “Party” and collectively as the
“Parties”.
RECITALS:
WHEREAS, Seller is the owner of that certain real property located in Wilmington, New
Hanover County, North Carolina (“Property”), and more particularly described on Exhibit A attached
hereto and made a part hereof;
WHEREAS, Seller desires to sell the Property to Buyer and to grant to Buyer the sole exclusive
right and option to purchase the Property on the terms and conditions hereafter stated;
WHEREAS, Buyer desires to acquire the sole exclusive right and option to purchase the Property
on the terms and conditions hereafter stated; and
NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein
below and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
TERMS OF AGREEMENT
ARTICLE 1. OPTION TO PURCHASE PROPERTY
1.1
Option to Purchase Property. Subject to the terms and conditions of this Agreement,
Seller hereby grants to Buyer the sole exclusive option to purchase all of the Property more particularly
described in the attached Exhibit A, together with all of Seller’s rights, titles, licenses, privileges, and
easements appurtenant to the Property for the term described in Section 2.1 below (“Option”).
1.2
Purchase Price. The purchase price for the Property shall be Five Million Two Hundred
Thousand No/100 Dollars ($5,200,000.00) (“Purchase Price”).Buyer shall pay to Seller at Closing (as
hereinafter defined) the Purchase Price, plus any pro-rations to be credited to Seller for items apportioned
to Seller in this Agreement, in cash or other immediately available funds, less any prorations to be
credited to Buyer at Closing.
ARTICLE 2. OPTION TERM AND PAYMENT
2.1
Option Term. The Option (“Initial Option Term”) shall commence on the Effective
Date and shall expire at 5:00pm Eastern time on December 15, 2012.
2.2
Option Payment. Buyer shall pay to Seller One and No/100 Dollar ($1.00) as an option
payment within five (5) days after the Effective Date (“Option Payment”).
2.3
Option Extension. The Initial Option Term may be extended by Buyer for up to four (4)
successive one (1) month terms (collectively, the “Extension Terms”) upon Buyer’s election and
delivery of written notice of extension to Seller prior to the expiration of the then applicable Initial Option
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Term or Extension Term, together with payment (by wire or by certified or other immediately available
funds) in the following respective amounts (collectively, the “Extension Payments” and each
individually an “Extension Payment”):
First Extension Term (December 15, 2013)
Second Extension Term (January 15, 2013)
Third Extension Term (February 15, 2013)
Fourth Extension Term (March 15, 2013)
$50,000.00
$50,000.00
$50,000.00
$50,000.00
(The Initial Option Term and the Extension Terms are hereinafter collectively referred to as the
“Option Term”). The Option Payment and the Extension Payments are sometimes collectively referred
to as the “Payment”. If Buyer delivers timely notice as described in Section 3.3 below and pursuant to
this Agreement elects to purchase the Property, the Payment shall be applied to and be credited towards
the Purchase Price at Closing. The Option Payment and any Extension Payments shall be non-refundable
to Buyer upon payment, except in the event of a termination of this Agreement by Buyer pursuant to
Section 6.2(a) hereof.
ARTICLE 3. INSPECTION
3.1
Inspection of Property. Seller grants to Buyer and Buyer’s authorized employees,
agents and representatives (“Authorized Personnel”) the right and privilege to enter onto the Property to
inspect the Property and to conduct any such surveying, title examination, zoning investigations,
architectural, engineering, environmental (including drilling, soil analysis, installation of groundwater
testing wells and any other environmental analysis), topographical, geological, soil, marketing, feasibility,
and other investigations, tests, borings, measurements, and inspections as Buyer deems necessary or
desirable with respect to Buyer’s intended use of the Property (collectively, the “Inspections”). Buyer
will provide Seller with at least three (3) days advance written notice prior to any such site visits. In the
event that Buyer conducts environmental Inspections at the Property, Buyer shall obtain Seller’s consent
as to the location of any subsurface borings, which consent shall not be withheld unless any such location
materially interferes with infrastructure beneath the Property, which infrastructure location is provided by
Seller to Buyer.
If Buyer does not purchase the Property pursuant to this Agreement, then Buyer shall
immediately restore the Property as to any damage caused by Buyer or its Authorized Personnel in
making the Inspections to the condition existing prior to such damage, normal wear and tear excepted.
Buyer shall indemnify, pay, reimburse, defend and hold Seller and its employees, members, managers and
lenders harmless from any such damage or loss resulting from the negligence or willful misconduct of
Buyer or its Authorized Personnel in connection with the Inspections. Buyer will not permit any lien to
attach to the Property as a result of its or its Authorized Personnel’s Inspection activities on the Property.
Buyer’s obligations set forth in this Section 3.1 shall survive the termination or expiration of this
Agreement.
3.2
Seller’s Deliveries. Buyer acknowledges that prior to the execution of this Agreement,
Seller has delivered to Buyer, to the extent they are in Seller’s possession, copies of all previously
existing title insurance policies, title exceptions and materials, binders and reports, surveys, and other
materials relating to the soil, surface or groundwater, topography, and environmental condition of the
Property (including but not limited to the application for Brownfields Agreement related to the Property
(and the reports referenced therein) as described in Section 7.6 (the “Brownfields Application”)) (the
“Existing Materials”). As provided more specifically in Section 3.10, Seller and Buyer agree that Buyer
will conduct its own environmental assessment of the Property to independently determine if the Property
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is suitable for Buyer’s intended use. The environmental reports contained in the Existing Materials
provided to Buyer are for the purposes of assisting Buyer in its own environmental assessment of the
Property and may not be relied on by Buyer.
3.3
Exercise of Option to Purchase. No later than 5:00 p.m. on the last day of the Option
Term, Buyer shall have the right, in its sole and absolute discretion, to exercise the Option by giving
Seller written notice of such exercise in accordance with the notice provisions set forth in Section 7.8 of
this Agreement (“Buyer’s Notice”). If the Buyer fails to exercise, or elects to terminate, the Option for
any reason or no reason in Buyer’s sole discretion at any time during the Initial Option Term or any
Extension Term, this Agreement will be considered terminated and Seller shall keep the Option Payment
and any and all Extension Payments; provided, however, the Payment shall be refundable to Buyer in the
event of a termination of this Agreement by Buyer pursuant to Section 6.2(a) below. If Buyer’s Notice is
given to Seller, then the purchase and sale of the Property shall be in accordance with this Agreement.
The “Option Date” under this Agreement shall be the date of Buyer’s Notice.
3.4
Seller’s Cooperation.Subject to the terms of this Agreement, Seller shall cooperate in
good faith with Buyer and Buyer’s Authorized Personnel in completing all Inspections. Notwithstanding
any provision or inference to the contrary, Seller, at Seller’s sole expense, shall cause the termination or
release of all liens, leases, and other occupancies affecting the Property that are not Permitted Exceptions
(as hereinafter defined) at or prior to Closing. Seller shall cooperate reasonably and in good faith, without
out of pocket expense to Seller or binding the Property in any way in the event that Buyer does not
purchase the Property pursuant to this Agreement, with the execution of applications and other documents
reasonably necessary to Buyer’s efforts to obtain the consents, approvals, rezoning and permits
reasonably necessary for Buyer’s intended use of the Property, provided that no rezoning shall be
approved or applicable, nor any permits issued to Buyer, its agents, contractors, or assigns, in connection
with the Property unless and until Buyer acquires title to the Property.
3.5
Survey. Buyer, at Buyer’s sole expense and in its sole discretion, may obtain a survey
(“Survey”) of the Property prepared by a surveyor registered in North Carolina, from which a legal
description will be prepared for the Special Warranty Deed to be conveyed by Seller at Closing. If the
legal description of the Property prepared from Buyer’s Survey differs from the legal description of the
Property attached as Exhibit A, Seller’s Special Warranty Deed to Buyer shall contain the description of
the Property contained in Exhibit A, and Seller shall also convey to Buyer by Quitclaim Deed the legal
description of the Property contained on Buyer’s Survey for no additional consideration.
3.6
Title Examination; Objections. Following the execution of this Agreement, Buyer shall
conduct an examination of the title to the Property and shall cause Buyer’s selected title insurance
company (“Title Company”) to issue a title insurance commitment (“Title Commitment”) and to
provide a copy thereof simultaneously to Buyer and Seller no later than November 20, 2012. Within ten
(10) days after issuance of the Title Commitment, Buyer shall give Seller written notice of any specific
condition of title as set forth in the Title Commitment and Survey which is not satisfactory to Buyer
(other than Permitted Exceptions as hereinafter defined). In such event, Seller shall have the right to elect
(except with respect to encumbrances, such as a lien or deed of trust which can be removed by the
payment of a specific monetary amount for which Seller shall be obligated to remove, but excluding any
such liens or encumbrances which are noted in Seller’s Title Policy as being afforded affirmative title
insurance coverage and/or which do not secure a debt or obligation owed by a part other than Seller
(collectively, the “Insured Liens”)) promptly to eliminate or modify all such unacceptable matters to the
reasonable satisfaction of Buyer. However, Seller is obligated to remove those exceptions set forth in the
parenthetical phrase of the immediately preceding sentence at Closing if Buyer exercises the Option and
proceeds to close the purchase of the Property. If Seller is unwilling or unable to eliminate or modify to
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Buyer's reasonable satisfaction those title defects (excepting Permitted Exceptions, liens or
encumbrances) requested by Buyer to be so eliminated or modified, or if Seller determines in its
reasonable business judgment, that it is not feasible for Seller to accomplish such requests within a
reasonable time (not to exceed thirty (30) days) from said written notice, then Seller shall so notify Buyer
in writing no later than thirty (30) days from receipt of Buyer's request, and Buyer may elect, at its option,
as evidenced by written notice to Seller (1) to waive its objections, take title subject to such exceptions,
and proceed to close; or (2) to terminate this Agreement. Should any new title exceptions appear of
record after the date of the Title Commitment (other than Permitted Exceptions, liens or encumbrances)
which Buyer requests Seller to eliminate or modify as stated above, and Seller is unable or unwilling as
provided above to accomplish such requests by Closing, Buyer shall have the right to a prompt return of
the Payment then made if Buyer elects to terminate this Agreement pursuant to clause (2) above.
3.7
Intentionally Deleted.
3.8
Mortgages. At all times prior to Closing, Seller shall keep any mortgage(s) that are a lien
on any portion of the Property (excluding Insured Liens) current and not in default.
3.9
Taxes and Assessments. Seller shall pay all applicable taxes and other charges and
assessments against the Property prior to delinquency to avoid forfeiture of Buyer’s rights under this
Agreement.
3.10
Environmental Study. Buyer may, in its sole discretion, conduct a Phase I
Environmental Site Assessment, Phase II testing and any additional testing or investigation that Buyer
deems necessary or desirable with respect to Buyer’s intended use of the Property (“Environmental
Study”) on the Property at Buyer’s sole cost during the Option Term.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
4.1
Seller's Representations and Warranties.Subject to the terms and conditions hereof,
and the disclosures by Seller made herein and as more particularly contained in Section 4.1(n) below,
Seller represents and warrants the following to Buyer, which shall be true and complete as of the
Effective Date and as a condition of Closing, true and complete on the date of conveyance of the
Property. Upon Buyer’s request, Seller agrees to sign and deliver to Buyer a certification at Closing
certifying that Seller’s representations and warranties remain true and accurate as of Closing.
(a)
Authority. Seller is a limited liability company, duly organized, validly existing
and in good standing under the laws of the State of Delaware, and authorized to transact business in the
State of North Carolina. Seller has the lawful right, power, authority and capacity to sell the Property in
accordance with the terms, provisions and conditions of this Agreement.
(b)
Bankruptcy. Seller is not involved in any proceeding by or against Seller in any
court under the Federal Bankruptcy Code or any insolvency or debtor’s relief act, whether state or federal,
or for the appointment of a trustee, receiver, liquidator, assignee, sequestrator or other similar official of a
substantial part of Seller’s property.
(c)
Title. Seller holds fee simple and marketable title to the Property free and clear
of all restrictions, encumbrances, liens, easements, Uniform Commercial Code financing statements,
security interests, leases, exceptions or reservations of any kind and character other than those disclosed
to Buyer, shown on the Survey or reflected by the Title Commitment prior to or at the Closing and the
following (collectively, “Permitted Exceptions”):
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(1)
Real estate taxes for the year of closing and subsequent years which are
not due and payable;
(2)
Easements of record, covenants, restrictions and other matters referenced
as affecting the Property as set forth in Seller’s owner’s policy of title insurance issued by
Chicago Title Insurance Company and bearing policy number 34 306 CH12-0008803
(“Seller’s Title Policy”), zoning and other land use controls imposed by New Hanover
County or any other applicable public authority;
(3)
Leases”);
(4)
All leases for marina/slip/dock usage (collectively, the “Marina
The Insured Liens; and
(5)
All matters and conditions which would be revealed by an accurate and
current survey and physical inspection of the Property.
(d)
Intentionally Deleted.
(e)
Possession. To Seller's actual knowledge, there are no parties currently in
possession of the Property, including lessees, tenants at sufferance, or trespassers, other than Seller and
tenants under the Marina Leases, and no one has been granted any license, lease, or other right relating to
the use or possession of the Property, including the reservation of any oil, gas or mineral rights except
pursuant to the Permitted Exceptions.
(f)
Access to and from the Property. To Seller's actual knowledge, no fact or
condition exists that would result in the termination of access from the Property to any presently existing
public roads adjoining or situated on the Property or to any existing water, sewer, or other utility facility
serving, adjoining, or situated on the Property.
(g)
Taxes, Levies, Assessments and Special Fees. To Seller's actual knowledge,
Seller has filed all federal, state, and local tax returns as required by law with regard to Seller and the
Property. Further, to Seller’s actual knowledge, there are no public assessments or liens against the
Property or any claims pending that would result in the creation of any liens for public improvements,
including water, sanitary, or storm sewers or drainage facilities, whether such improvements have been
completed or are being developed.
(h)
Compliance with Applicable Laws. To Seller's actual knowledge, all of Seller’s
activities on the Property have complied with all applicable laws, ordinances, and regulations of all
applicable governmental authorities, including those relating to health, subdivision, development, land or
soil disturbance, environmental matters, hazardous waste, radon emission, interstate land sales, toxic
materials, and zoning and land use matters (“Laws”).
(i)
Lawsuits. To Seller's actual knowledge, there are no actions, suits, proceedings,
attachments, executions, assignments for the benefit of creditors, or voluntary or involuntary proceedings
in bankruptcy or under any applicable debtor relief laws existing pending, threatened, or anticipated that
affect the Property or relate to Seller’s ownership and ability to convey the Property to Buyer pursuant to
this Agreement.
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(j)
Governmental Notices; Condemnation. To Seller's actual knowledge, Seller has
not received any uncured notices of violations of Laws that have been served by any governmental
authority that would affect the Property or any portion thereof. To the Seller’s actual knowledge, there is
no pending, threatened, or contemplated condemnation or similar proceeding affecting the Property.
(k)
Liens. To Seller’s actual knowledge, there are no outstanding liens on the
Property for labor, services, or materials for improvements to the Property, and all payments due to any
person or company that has furnished labor, services, or materials in connection with the Property are
current.
(l)
Agreements with Third Parties. Seller has not made any contract to sell all or any
part of the Property to any person other than Buyer, nor has Seller given to any person other than Buyer
an option that is presently exercisable to purchase all or any part of the Property. To Seller’s actual
knowledge, Seller has not granted any liens, easements, rights of first refusal, or other contracts to third
parties with respect to the Property, other than Permitted Exceptions.
(m)
Environmental Matters.
(i)
“Hazardous Materials” shall mean any elements, compounds, solutions,
mixtures, substances, materials, or other matter of any kind, including solid, liquid, or gaseous materials
that are: (i) listed or defined as a “hazardous waste”, “extremely hazardous waste”, “restricted hazardous
waste”, “hazardous substance”, or “toxic substance” under any municipal, local, state, or federal law
code, ordinance, or other regulation; (ii) petroleum, oil and gas, mold or radon; (iii) asbestos;
(iv) polychlorinated biphenyl; (v) designated a “hazardous substance” pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. § 1317); (vi) defined as “hazardous waste” pursuant to
Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901. et seq., (42
U.S.C. § 6903); (vii) defined a “hazardous substance” pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601)
(“CERCLA”); (viii) defined as a toxic substance in the Toxic Substance Control Act (1511 U.S.C. § 2601
et seq.); (ix) contaminants of soil or groundwater and cause degradation of the soil and/or water to the
extent that mitigation methods are needed to restore the soil or water to its natural state; or (x) causes or
contributes to damage to human health or the environment.
(ii)
Except as set forth in the Existing Materials, neither Seller nor, to Seller’s actual
knowledge, any third party, has used, generated, manufactured, stored, or disposed of any Hazardous
Material in, at, on, or under the Property or transported any Hazardous Material to or from the Property.
To Seller’s actual knowledge, and except as disclosed in the Brownfields Application, Permitted
Exceptions or Existing Materials: (a) the Property is not in violation, nor has been or is currently under
investigation for violation, of any federal, state, or local law, ordinance, or regulation relating to industrial
hygiene, worker health and safety, or to the environmental conditions in, at, on, under, or about the
Property, including soil and groundwater conditions; (b) the Property has not been subject to a deposit of
any Hazardous Material; (c) there has been no discharge, migration, or release of any Hazardous Material
from, into, on, onto, or under the Property; and (d) there is not now, nor has there ever been, on or in the
Property underground storage tanks or surface or below-grade impoundments, any asbestos-containing
materials or any polychlorinated biphenyls used in hydraulic oils, electrical transformers, or other
equipment.
(n)
Buyer’s Limited Reliance. Except as expressly set forth in this Agreement, the
Seller makes no representations or warranties with regard to the Property. Buyer acknowledges that the
terms of this Agreement provide Buyer ample opportunity to inspect the Property and that Buyer is
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relying on its own investigations and Inspections and that the sale of the Property shall be “AS IS.”
Buyer acknowledges that, except as expressly set forth in this Agreement, the Seller has not made any
representations, warranties, or other agreements of any kind related to: (a) the physical condition of the
Property, (b) the suitability of the Property for any intended use or activity, and (c) the compliance of the
Property with any applicable Laws, ordinances, or regulations of any applicable governmental authority.
Except as expressly set forth in this Agreement, no third person is authorized to acting on behalf of Seller
or to make any representations, warranties, covenants, or agreements on behalf of Seller. All matters
contained in the Existing Materials or discovered by Buyer prior to Closing (or which, with the exercise
of diligence by Buyer, would be discovered by Buyer prior to Closing) are deemed disclosed to Buyer and
all representations and warranties of Buyer set forth in this Agreement or deemed made at any other time
by Seller shall be made subject to such matters.
(o)
Removal of Improvements by Seller. Seller shall, within thirty (30) days after the
Effective Date, notify Buyer of any man-made improvements installed onto or constructed on the
Property which Seller intends to remove from the Property during the Option Term. Seller may
subsequently remove any such improvements during the Option Term. If Seller removes any such
improvements from the Property, then Seller shall restore the Property to its condition immediately prior
to the installation or construction of those improvements (including ensuring the Property is left with
materially similar grade).
4.2
Buyer’s Representations and Warranties. Buyer makes the following representations
and warranties as of the Effective Date and as of Closing: (i) Buyer is a duly authorized and existing
North Carolina municipality that is authorized to transact business in North Carolina; (ii) Buyer has full
right and authority to enter into this Agreement and to consummate the transactions contemplated in this
Agreement; and (iii) each of the persons signing this Agreement on behalf of Buyer is an agent of Buyer
authorized to do so by appropriate corporate action.
4.3
Reliance; Survival. Buyer and Seller each acknowledge and agree that each Party is
materially relying on the representations and warranties contained in this Agreement in entering into this
Agreement, subject to the limitations to same set forth in the Agreement. Each of the representations and
warranties made in this Article shall survive Closing for a period of six (6) months.
ARTICLE 5. CLOSING
5.1
Closing. Unless Buyer has elected to terminate this Agreement as permitted under this
Agreement or has not timely and properly exercised the Option pursuant to this Agreement, the closing on
the sale and purchase of the Property (“Closing”) shall be held in the offices of Buyer in Wilmington,
North Carolina, or shall be conducted in escrow on the “Closing Date”, which date shall be either: (a)
thirty (30) days after the Option Date; or (b) such earlier date as chosen by Buyer, in its sole discretion,
provided Buyer notifies Seller of such date no fewer than twenty (20) days prior to such date. If Closing is
conducted in escrow, the Parties and their attorneys do not need to be physically present at the Closing
and may deliver documents by overnight delivery service or other means; provided, all deliveries of
closing documents to Buyer’s counsel to be held in escrow pending Closing shall be accompanied by a
closing instruction letter clearly stating the terms and conditions (consistent with this Agreement)
pursuant to which the documents may be released and recorded at Closing. Upon payment of the
Purchase Price to Seller, Seller shall deliver possession of the Property to Buyer at Closing.
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5.2
Conditions Precedent to Buyer’s Obligation to Close.
(a)
Buyer’s Conditions Precedent. Notwithstanding the foregoing or any other
provision in this Agreement, the obligation of Buyer to close on the purchase of the Property under this
Agreement shall be contingent upon the satisfaction, in Buyer’s reasonable discretion, of the following
conditions (the “Buyer’s Conditions Precedent”):
(i)
No material adverse change in the condition of the Property has occurred since
the delivery of Buyer's Notice to Seller;
(ii)
Intentionally Deleted;
(iii)
Intentionally Deleted;
(iv)
Any of Seller’s mortgage(s) secured by the Property (other than the Insured
Liens) are current, in good standing, and are not in default, and all applicable assessments and taxes due
and payable on the Property have been paid in full or will be paid in full before Closing or at Closing out
of the proceeds due to Seller under this Agreement (except for ad valorem taxes for the year in which
Closing occurs, which shall be prorated at Closing);
(v)
If the Property is subject to a title objection(s) that Seller has elected to cure
pursuant to Section 3.6 of this Agreement, Seller has cured the title objection(s) or will cause such cure in
connection with Closing;
(vi)
Seller has entered into a Brownfields Agreement for the Property with the North
Carolina Department of Environment and Natural Resources (“DENR”) as described in Section 7.6;
(vi)
All of Seller’s representations and warranties in this Agreement are true and
correct in all material respects as of the Closing Date; and
(vii)
No material breach by Seller shall exist under this Agreement and Seller shall be
ready, willing, and able to close under the terms of this Agreement.
(b)
Failure of Buyer’s Conditions Precedent. If any of the foregoing Buyer’s
Conditions Precedent have not been satisfied or waived within the times and in the manner required by
this Agreement and Seller does not promptly cause any such unsatisfied Buyer’s Condition Precedent to
be satisfied within five (5) days of written notice from Buyer stating which of said conditions have not
been satisfied, Buyer may terminate this Agreement and, in the event Buyer’s Condition Precedent set
forth in Sections 5.2(a)(vi) and (vii) above shall not be satisfied due to Seller’s breach, Buyer shall,
following Seller’s Cure Period, be entitled to seek remedies as provided in Article 6.
5.3
Conditions Precedent to Seller’s Obligation to Close.
(a)
Seller’s Conditions Precedent. Notwithstanding the foregoing or any other
provision in this Agreement, the obligation of Seller to close on the conveyance of the Property under this
Agreement shall be contingent upon the satisfaction, in Seller’s sole discretion, of the following
conditions (the “Seller’s Conditions Precedent”):
(i)
All of Buyer's representations and warranties in this Agreement are true and
correct in all material respects as of the Closing Date; and
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(ii)
No material breach by Buyer shall exist under this Agreement, this Agreement
shall not have terminated, and Buyer shall be ready, willing, and able to close under the terms of
this Agreement.
(b)
Failure of Seller’s Condition Precedent. If any of the foregoing Seller’s
Conditions Precedent have not been satisfied or waived within the times and in the manner required by
this Agreement, Seller may terminate this Agreement and shall be entitled to seek remedies as provided in
Article 6.
5.4
Deadline for Closing. Notwithstanding anything to the contrary in this Agreement, if,
despite both Parties’ diligent efforts, Closing does not occur on or before April 15, 2013, then this
Agreement shall terminate automatically unless extended by a writing executed by the Parties.
5.5
Seller’s Closing Documents. At Closing, Seller shall sign and deliver the following
signed documents to Buyer. Each document shall be in a form and substance reasonably satisfactory to
Buyer and Buyer’s title insurance company.
(a)
Special Warranty Deed. Special Warranty Deed signed by Seller conveying to
Buyer good and marketable fee simple title to the Property, together with all rights and
appurtenances thereto, free and clear of all vendor liens, mechanic’s liens, encumbrances, leases,
easements, restrictions, covenants, and other title encumbrances other than ad valorem taxes for
the then current year (prorated through the Closing Date), utility easements, and the Permitted
Exceptions.
(b)
Release/Satisfaction. Release or satisfaction instrument releasing all deeds of
trust or other security instruments as title encumbrances on the Property (excluding Insured
Liens) or written confirmation from such secured party that the secured lien shall be released
upon the payment of all or a portion of Seller’s Closing proceeds to the secured party at Closing.
(c)
Lien/Possession Affidavits. Mechanics’ and materialmen’s lien waiver and
indemnity and possession affidavit signed by Seller and all contractors and subcontractors that
have done work on the Property or supplied materials to the Property within the one hundred
twenty (120) days prior to Closing, to be prepared by Buyer and reasonably approved by Seller.
(d)
Tax Affidavits. Substitute Form 1099A, Non-Foreign affidavit, North Carolina
Resident Affidavit, and any other necessary affidavits, to satisfy federal and state tax reporting
requirements;
(e)
Settlement Statement. Settlement Statement, to be prepared by Buyer and
reasonably approved by Seller;
(f)
Quitclaim Deed. Quitclaim Deed, if requested by Buyer, based on the Survey of
the Property; and
(g)
Other Documents. Any other additional signed documents contemplated by this
Agreement or mutually deemed by the Parties’ attorneys to be appropriate to consummate the sale
of the Property to Buyer:
i.
Assignment of Marina Leases; and
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ii.
Assignment of Cost Recovery Agreement with
Temporary Construction Easement, the Development
Agreement and the Marina Easement referenced in Seller’s Title Policy
which were assigned to Seller separately upon Seller’s purchase of the
Property.
5.6
Buyer’s Closing Documents. At Closing, Buyer shall sign and deliver the following
documents to Seller. Each document shall be in a form and substance satisfactory to Seller:
(a)
Settlement Statement. A signed counterpart to the Settlement Statement;
(b)
Survey. Certified true copy of Survey; and
(c)
Other Documents. Any other additional signed documents contemplated by this
Agreement or mutually deemed by the Parties’ attorneys to be appropriate to consummate the sale
of the Property to Buyer (including an assignment and assumption of the rights referenced in
5.5(g)(ii) above).
5.7
Closing Costs and Prorations. At Closing, Seller shall pay all usual and customary
seller expenses and closing costs in connection with the Closing, including Seller’s attorney’s fees,
recording fees for any releases or satisfactions of Seller’s mortgages or other security instruments
(excluding Insured Liens), and any costs or fees associated with the release of all outstanding liens and
assessments against the Property including documentary stamps/excise taxes. Buyer shall pay all usual
and customary buyer expenses and closing costs in connection with the Closing, including title
examination, title insurance premium, Buyer’s attorney’s fees, and recording fees for the deed. Any rents,
leases or profits paid to Seller for any period of time after the Closing shall be prorated between Buyer
and Seller as of the Closing on the Settlement Statement at Closing.
5.8
Taxes. Ad valorem property taxes applicable to the Property at Closing for the calendar
year of the Closing will be prorated between Buyer and Seller on the Settlement Statement at Closing.
Notwithstanding the preceding sentence, Buyer shall pay any “deferred use” or rollback taxes assessed
against the Property. If the current year’s taxes have not been determined by the Closing Date, the
proration shall be estimated based upon the prior year’s taxes. After the actual tax statement for the
Property is available, Buyer and Seller each agrees to reimburse the other, as applicable, the amount of
taxes owed based on the actual prorations within thirty (30) days after the tax bills are presented to the
other Party. Buyer acknowledges it will be solely responsible for its portion of the taxes prorated after the
Closing Date, and Seller shall be responsible for all taxes incurred prior to and including the Closing
Date. The provisions of this Section shall survive Closing.
ARTICLE 6. REMEDIES
6.1
Seller’s Remedies.
(a)
Breach by Failure to Close. Notwithstanding anything to the contrary in this
Agreement, in the event of Buyer’s breach under this Agreement by failing to close on the purchase of the
Property, Buyer shall have five (5) business days following receipt of notice from Seller to cure such
breach (“Buyer’s Cure Period”). If Buyer fails to cure its breach within Buyer’s Cure Period, Seller, as
its sole and exclusive remedy, may terminate this Agreement and retain the Payment as liquidated
damages and not a penalty, Seller’s damages arising from such breach being difficult, if not impossible, to
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determine, and the Payment being the Parties’ best estimate of Seller’s actual damages arising from such
breach.
(b)
Other Breaches. Notwithstanding anything to the contrary in this Agreement, in
the event of any breach under this Agreement by Buyer other than its failure to close on the purchase of
the Property, Buyer shall have the Buyer’s Cure Period to cure such breach, after which Seller may
pursue all remedies available at law or in equity.
6.2
Buyer’s Remedies.
(a)
Breach by Failure to Close. Notwithstanding anything to the contrary in this
Agreement, in the event of any material breach under this Agreement by Seller by failing to close its
conveyance of the Property pursuant to this Agreement, Seller shall have five (5) business days following
receipt of notice from Buyer to cure such breach (“Seller’s Cure Period”). If Seller fails to cure such
breach within Seller’s Cure Period, Buyer may elect one of the following remedies: (i) Buyer may
terminate this Agreement and promptly receive a return of the Payment from Seller; (ii) waive any right
to a return of the Payment, and seek specific performance of this Agreement; or (iii) if, but only if, Seller
has conveyed all or part of the Property to a third party, then Buyer shall be entitled to a return of the
Payment from Seller, and Buyer may bring an action against Seller for damages.
(b)
Other Breaches. Notwithstanding anything to the contrary in this Agreement, in
the event of Seller’s breach under this Agreement other than its failure to close on the conveyance of the
Property, Seller shall have the Seller’s Cure Period to cure such breach, after which Buyer may pursue all
remedies available at law or in equity.
ARTICLE 7. GENERAL PROVISIONS
7.1
Assignment. Buyer shall not have the right to assign its rights and obligations pursuant to
this Agreement without the prior written consent of Seller, which consent shall not be unreasonably
withheld or delayed. No assignment shall be effective until Seller has received written notice executed by
both Buyer and the assignee of such assignment, the assignee assumes all of Buyer's obligations
hereunder, and Buyer has provided to Seller the name, address, telephone number, and principal contact
of the assignee. Any assignee of Buyer shall acquire all right, title and interest of Buyer hereunder, and
Seller shall owe the same duties to the assignee as Seller owes to Buyer hereunder.
7.2
Intentionally Deleted.
7.3
Risk of Loss. Prior to Closing, risk of loss or damage to the Property, but excluding loss
or damage caused by Buyer’s negligence or willful misconduct, shall be on Seller. Upon Closing, risk of
loss to the Property shall be on Buyer.
7.4
Intentionally Deleted.
7.5
Casualty; Condemnation.
(a)
Event of Condemnation. For purposes of this Agreement, a “Condemnation”
shall exist if eminent domain proceedings are threatened or commenced against any part of the
Property. If, after Seller's receipt of Buyer's Notice and prior to the Closing Date, all, or a
significant part, of the Property is taken in fee simple or in some lesser interest by Condemnation
(or transferred in lieu thereof), Seller promptly shall notify Buyer of such event and forward to
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Buyer copies of all Condemnation documents applicable to the action on the affected portion of
the Property. Thereafter, Buyer shall have fifteen (15) days in which it may, by notice to Seller,
elect to terminate this Agreement. Notwithstanding anything to the contrary in this Agreement,
the Closing Date shall be extended, if necessary, to provide Buyer the 15-day period to respond
granted in this Section. If Buyer elects to terminate this Agreement, both Parties shall be relieved
and released of any further liability under this Agreement, except those that expressly survive the
termination of this Agreement.
(b)
Assignment/Prosecution of Claims. Unless this Agreement is terminated by
Buyer pursuant to Section 7.5(a) above, it shall remain in full force and effect; and, provided the
transaction under this Agreement closes, at Closing Seller shall assign, transfer, and set over to
Buyer all of Seller’s right, title, and interest in and to any claim, award, judgment, or proceeds
that may be paid, payable, available, or made on account of such Condemnation, whether before
or after the Closing Date, and the Property shall be delivered to Buyer subject to any such
Condemnation. Seller, in any proceedings regarding Condemnation prior to the Closing Date or
any assignment to Buyer of applicable settlement proceeds, shall use commercially reasonable
efforts to recover the fair market value as compensation for the Condemnation. Seller shall
cooperate fully and in good faith with Buyer to affect the assignment and further prosecution of
any such claims until Seller is removed as a Party to the applicable proceedings. Notwithstanding
the foregoing, in no event shall Seller be obligated to pay, assign, transfer, or set over to Buyer
any total proceeds, awards, or compensation in excess of the Purchase Price.
7.6
Brownfields Agreement. Seller has submitted the Brownfields Application for the
Property to DENR. Seller shall use good faith efforts to reach a Brownfields Agreement with DENR that
addresses environmental conditions at the Property. Closing shall occur only after Seller has entered into
a Brownfields Agreement with DENR provided, however, that Buyer may waive this condition to Closing
in its sole discretion.
7.7
Intentionally Deleted.
7.8
Notices. To be effective, any notice or other communication required, permitted, or
contemplated by this Agreement must be in writing and must be sent by facsimile, email, certified mail
(return-receipt requested), overnight delivery service (with proof of delivery), or commercial courier
(with proof of delivery) to the following addresses. Any notice given by facsimile or email also shall be
delivered by certified mail, overnight delivery service, or commercial courier within two (2) days after the
original transmission. Either Party may change its address(es) by giving five (5) days prior notice to the
other Party of such change. Notice shall be deemed delivered or received upon the earliest to occur of: (a)
receipt of the transmission if sent by facsimile or email; (b) three (3) days after the postmark if sent by
certified mail; (c) the next day that is not a Saturday, Sunday, or legal holiday if sent by overnight
delivery service, or (d) upon receipt if delivered by commercial courier.
If to Buyer:
City of Wilmington
102 N. Third Street
Wilmington, NC 28401
Attention: Tony Caudle, Deputy City Manager
Facsimile No.: 910-341-5839
With required copies to:
Parker Poe Adams & Bernstein LLP
Three Wells Fargo Center
401 South Tryon St., Suite 3000
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Charlotte, NC 28202
Attention: Anthony Fox
Facsimile No.: 704-334-4706
If to Seller:
Sawmill Point Investors, LLC
1820 Cumberland Avenue
Charlotte, NC 28203
Attention: Patrick Melton
Facsimile No.: 704-973-0224
With required copies to:
Wishart Norris Henninger & Pittman, P.A
Attention: Andrew McCullough
6832 Morrison Blvd.
Charlotte, NC 28211
Facsimile No.: 704-916-7758
7.9
Weekends / Holidays. If the last day for any act to be performed by either Party under
this Agreement falls on a Saturday, Sunday, federal holiday, or holiday in the state where the Property is
located, then the deadline for performance of such act shall be extended to and include the next following
business day.
7.10
Brokerage Commission. Seller and Buyer each represents to the other it has not entered
into any agreement whereby a real estate brokerage fee or commission is, or shall be, due or owing in
connection with the transaction contemplated by this Agreement. Seller and Buyer each shall indemnify,
defend, pay, reimburse and hold harmless the other from and against any and all losses and expenses,
including reasonable attorneys’ fees and costs of litigation, which such Party may suffer or incur by
reason of any claim for a commission regarding the transaction contemplated by this Agreement.
7.11
TIME IS OF THE ESSENCE. TIME IS OF THE ESSENCE WITH RESPECT TO
THE OBLIGATIONS TO PERFORM SET FORTH IN THIS AGREEMENT.
7.12
Applicable Law. This Agreement shall be construed and interpreted in accordance with
the laws of North Carolina, excepting only its conflict of laws principles.
7.13
Non-Waiver. No course of dealing between the Parties or any delay on the part of a
Party to exercise any right it may have under this Agreement shall operate as a waiver of any of the rights
under this Agreement or a waiver of any rights provided by law or equity. No waiver of any prior default
shall operate as a waiver of any subsequent default. No express waiver shall affect any term or condition
other than the one specified in such waiver, and such waiver shall apply only for the time and manner
specifically stated therein.
7.14
Entire Agreement. This Agreement constitutes the entire agreement between Seller and
Buyer with respect to the Property, and all prior or contemporaneous oral or written agreements or
instruments are merged herein. No amendment to this Agreement shall be effective unless it is in writing
and signed by both Buyer and Seller. Both Parties have participated in drafting and negotiating this
Agreement, and no interpretive presumption shall be drawn against either Party by virtue of its role in
drafting this Agreement.
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7.15
Severability. If any provision of this Agreement is held to be invalid or unenforceable,
then such provision will be fully severable from this Agreement, and the remaining provisions of this
Agreement will remain in full force and effect and will not be affected thereby. In lieu of such invalid or
unenforceable provision, there shall be added automatically as a part of this Agreement a provision as
similar in terms to such invalid or unenforceable provision as may be reasonably possible and valid and
enforceable.
7.16
Counterparts. This instrument may be signed in multiple counterparts, each of which
shall be deemed an original and together shall constitute one and the same instrument.
7.17
Memorandum. Buyer shall have the right to prepare a memorandum of this Agreement
for recordation in the Register of Deeds for the county in which the Property is located. Provided that the
said memorandum is in the form and substance set forth in Exhibit B, Seller shall promptly execute,
acknowledge and deliver the Memorandum to Buyer upon Buyer’s request, including delivery of the
Memorandum to Buyer concurrently with Buyer’s delivery of the Option Payment to Seller. Buyer shall,
immediately upon the termination of this Agreement for any reason, execute and deliver a termination of
this Agreement in recordable form and otherwise in form acceptable to Seller and sufficient to clear the
title to the Property from the Agreement.
7.18
No Publicity. Seller shall not issue any press releases concerning the Property or Buyer
without Buyer’s prior written consent.
7.19
Withdrawal from Market. Seller shall not market the availability of the Property for
lease, sale, or other use prior to the expiration or termination of this Agreement, except for the offering of
the Property for leases of the docks, marinas and similar facilities located on the Property.
7.20
Principles of Interpretation and Definitions. In this Agreement, unless the context
requires otherwise: (a) the singular includes the plural, and the plural includes the singular; (b) the
pronouns “it”, “its”, and “they” include the masculine and feminine; (c) references to statutes or
regulations include all statutory and regulatory provisions consolidating, amending, or replacing the
statute or regulation; (d) references to contracts and agreements shall be deemed to include all
amendments thereto; (e) the words “include”, “includes”, and “including” are to be interpreted as if they
were followed by either the phrase “without limitation” or “but not limited to”; (f) references to an
“Article”, “Section”, “section”, or “paragraph” shall mean an article or section of this Agreement; (g)
headings and titles of sections, paragraphs, and articles are for convenience only and shall not be
construed to affect the meaning of this Agreement; (h) the word “shall” is mandatory; and (i) all exhibits,
attachments, or documents attached to this Agreement or referred to in this Agreement are incorporated
by reference into this Agreement as if fully set forth herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be duly signed
under seal on the day and year first above written.
BUYER:
CITY OF WILMINGTON,
a North Carolina municipality
By: _________________________________(SEAL)
Print Name: _________________________
Title: _______________________________
SELLER:
SAWMILL POINT INVESTORS, LLC,
a Delaware limited liability company
By: SSP Sawmill Management, LLC, its Manager
By:
(SEAL)
Name: PATRICK MELTON
Title:
MANAGER
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EXHIBIT A
PROPERTY DESCRIPTION
BEING ALL OF THAT CERTAIN PROPERTY CONVEYED TO SAWMILL POINT
INVESTORS, LLC BY DEED RECORDED IN BOOK 5659, PAGE 200, NEW HANOVER
COUNTY PUBLIC REGISTRY, REFERENCE TO WHICH IS MADE FOR A MORE
PARTICULAR DESCRIPTION, SUCH DESCRIPTION BEING INCORPORATED HEREIN BY
REFERENCE.
PPAB 2012858V6
EXHIBIT B
FORM OF MEMORANDUM OF OPTION AGREEMENT FOR
THE PURCHASE AND SALE OF LAND
[SEE ATTACHED]
PPAB 2012858V6
Prepared By and Return To:
Parker Poe Adams & Bernstein LLP (NEA)
P.O. Box 389
Raleigh, NC 27602
Brief Description for Index:
MEMORANDUM OF OPTION TO PURCHASE LAND
THIS MEMORANDUM OF OPTION TO PURCHASE LAND (“Memorandum”) is made
and entered into __________________ ___, 2012, by and between SAWMILL POINT INVESTORS,
LLC,a Delaware limited liability company (“Optionor”), and CITY OF WILMINGTON, NORTH
CAROLINA, a public body corporate and politic (“Optionee”).
WHEREAS, Optionor and Optionee have entered into an Option Agreement for the Purchase
and Sale of Land (“Option Agreement”) dated ___________________ ___, 2012, under which Optionor
granted to Optionee an exclusive option (“Option”) to purchase the real property located in New Hanover
County, North Carolina, more particularly described on the attached Exhibit A (“Property”).
WHEREAS, the parties enter into this Memorandum to set forth certain terms and conditions of
the Option and to provide constructive notice of the Option.
NOW, THEREFORE, in consideration of the foregoing, the parties hereby agree as follows:
1.
The term of the Option commenced on the effective date of the Option Agreement and
shall expire on December 15, 2012, unless the term of the Option is extended. Optionee has the right to
extend the term of the Option for up to four (4) successive one (1) month terms.
2.
reference.
All of the provisions set forth in the Option are incorporated in this Memorandum by
3.
The Option shall be binding upon and inure to the benefit of the parties and their
respective heirs, successors and assigns.
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IN WITNESS WHEREOF, Optionor and Optionee have caused this Agreement to be duly
signed under seal on the day and year first above written.
Optionor:
Sawmill Point Investors, LLC,
a Delaware limited liability company
By: SSP Sawmill Management, LLC, its Manager
By:
(SEAL)
Name: Patrick Melton
Title:
Manager
STATE OF
COUNTY OF
I certify that _____________________ personally appeared before me this day and
acknowledged that (s)he is the manager of SSP Sawmill Management, LLC, manager of Sawmill Point
Investors, LLC, a Delaware limited liability company, and that (s)he, in such capacity, being authorized to
do so, voluntarily signed the foregoing on behalf of the corporation for the purposes stated therein.
Date: __________________
By:
Print Name:
Notary Public
[SEAL OR STAMP]
My Commission Expires:
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Optionee:
City of Wilmington, North Carolina,
a North Carolina municipality
By:
Name:
Title:
STATE OF NORTH CAROLINA
COUNTY OF _______________
I, a Notary Public of the County and State aforesaid, certify that __________________ personally
appeared before me this day and acknowledged that he/she is ___________________________ of City of
Wilmington, North Carolina, and that by authority duly given and as an act of the City of Wilmington,
North Carolina, the foregoing instrument was signed in its name by its Mayor, sealed with its municipal
seal and attested by himself/herself as its _____________________________.
Date: _________________
_______________________________
Official Signature of Notary
________________________, Notary Public
Notary Public’s printed or typed name
My Commission Expires: _______________
(Official Stamp or Seal)
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Exhibit A
Property Description
BEING ALL OF THAT CERTAIN PROPERTY CONVEYED TO SAWMILL POINT
INVESTORS, LLC BY DEED RECORDED IN BOOK 5659, PAGE 200, NEW HANOVER
COUNTY PUBLIC REGISTRY, REFERENCE TO WHICH IS MADE FOR A MORE
PARTICULAR DESCRIPTION, SUCH DESCRIPTION BEING INCORPORATED HEREIN BY
REFERENCE.
PPAB 2012858V6