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AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS AMENDMENT AGREEMENT dated as of December 31, 1998 is made and
entered into by and between BIRMINGHAM UTILITIES, INC., a Connecticut
corporation ("Seller"), M/1 HOMES, LLC, a limited liability company
organized under the laws of Connecticut ("Buyer").
WHEREAS, Seller and Buyer are parties to a certain Purchase and
Sale Agreement dated as of March 18, 1997 (the "Purchase and Sale
Agreement"); and
WHEREAS, Seller and Buyer desire to amend the Purchase and Sale
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants set forth
in this Amendment Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Paragraph 1 of the Purchase and Sale Agreement is hereby amended
by deleting the provisions thereof and substituting in lieu thereof
the following:
"1. CONSIDERATION
The Purchase Price, subject to the Provisions of Paragraph 13(a)
hereof, is: $4,020,000.00
Which the Buyer agrees to pay, as follows:
(a) As Earnest Money, paid with the
execution hereof, receipt of which,
subject to collection, is hereby
acknowledged: $50,000.00
(b) No later than 30 days prior to the
first day of public hearings scheduled by
the Connecticut Department of Public
Utility Control ("DPUC") as set forth in
the first schedule of proceedings to be
issued in the docket opened by the DPUC
to consider the Company's application
contemplated in Paragraph 12(b) hereof, a
Supplementary Deposit, in immediately
available funds: $147,500.00
(c) In immediately available funds
delivered to the Seller on the date of
the Closing of the title and upon
delivery of the deed as hereinafter
provided below: $2,370,000.00
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(d) By delivery to the Seller of a
promissory note in the principal
amount of $1,650,000, payable in
full one year from the date of the
Closing and secured by a first
mortgage on that portion of the
Premises described as Phase Two
in Paragraph 13(a) hereof: $1,650,000.00
$4,020,000.00
The Earnest Money deposit paid herewith in accordance with
Paragraph 1(a) above and the Supplementary Deposit paid in accordance
with Paragraph 1(b) above shall be held, subject to the provisions of
Paragraphs 12, 13, and 18 hereof, by the Seller's attorney in an
interest bearing account. At the time of the Closing, the Earnest
Money deposit and the Supplementary Deposit, together with the interest
thereon, shall be released and paid to the Seller as part of the
immediately available funds payable at the Closing. The promissory
note and the first mortgage referred to in Paragraph 1(d) above shall
be, respectively, in the forms set forth on Schedule D and Schedule E
attached hereto."
2. Paragraph 9 of the Purchase and Sale Agreement is hereby amended
by deleting the date "December 31, 1998" and inserting in lieu thereof
the date "June 30, 1999" as part (a) of the definition of the Closing
Date.
3. Paragraph 13 of the Purchase and Sale Agreement is hereby
amended by deleting the provisions thereof and substituting in lieu
thereof the following:
"13. BUYER CONTINGENCIES
(a) Notwithstanding any provision of this Agreement to the
contrary, the Buyer's obligation to Purchase the Premises hereunder is
conditioned upon the Buyer obtaining Final approval (which approval
shall become "Final" only upon the expiration of the applicable appeal
periods without any appeal having been filed or served) reasonably
satisfactory to the Buyer of federal, state and local land use
regulatory authorities, including without limitation, the Traffic
Commission of the State of Connecticut, the United States Corps of
Engineers, and the Town of Seymour Planning and Zoning and Inland
Wetlands Commissions necessary for the development on the Premises
for Phase I, that being the first 103 units, of a 183 unit residential
active adult housing project including a clubhouse and amenities
(hereinafter referred to as the "Project") on or before June 30, 1999.
(It is understood that (i) the Buyer plans additional development on
the Premises, known as Phase II, which additional development is
contemplated to consist of an 80 unit residential active adult housing
project, the owners of which units will have access to the clubhouse
and amenities included in Phase I, (ii) Phase II is not included in
the definition of "Project" for the purposes hereof, (iii) that the
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real property upon which Phase II will be located will be subject to
the First Mortgage in favor of the Seller contemplated in Paragraph 1(d)
hereof, and (iv) the approximate boundaries of Phase II will be as set
forth on the map entitled "The Preserve, Holbrook Road, Seymour,
Connecticut" by Michael H. Horbal, Land Surveyors and Planners,
which map was submitted to the Seymour Planning and Zoning Commission
in connection with the Buyer's application for conceptual approval of
the development of the Premises and is attached hereto as Schedule F.)
Buyer agrees to submit in good faith applications for all such approvals
of the Project on or before March 15, 1999 and to pursue such
applications diligently. Buyer shall submit to the Seller, on or
before March 15, 1999, a certificate executed by a Member duly
authorized, to the effect that Buyer has applied in good faith for all
approvals necessary to satisfy the above condition to its purchase of
the Premises. Seller agrees to provide reasonable cooperation to the
Buyer in connection with the Buyer's applications. If the Buyer fails
to submit all such applications in good faith by March 15, 1999 or fails
to submit the above certificate to the Seller, the Seller may terminate
this Agreement and, subject to the provisions set forth below with
respect to the treatment of the Earnest Money and the Supplementary
Deposit and the right to possession of development plans with respect to
the Premises, the obligations of the parties hereunder shall terminate
and come to an end. If the Buyer shall have duly applied in good faith
for and diligently pursued the above approvals as contemplated above,
but shall not have received all such Final approvals by June 30, 1999,
the Buyer may, upon written notice submitted to the Seller not later
than June 30, 1999, terminate this Agreement and, subject to the
provisions of the following sentence with respect to the treatment of
the Earnest Money and the Supplementary Deposit, all obligations of the
parties hereunder shall terminate and come to an end. Upon (i) Seller
terminating this Agreement as a result of the Buyer failing to submit
all such applications or providing to the Seller the certificate with
respect to such submissions as set forth above, or (ii) the Buyer
terminating this Agreement as a result of being unable to obtain the
Final approvals by June 30, 1999, the Seller may retain the Earnest
Money deposit paid by the Buyer in accordance with Paragraph 1(a)
hereof, together with the interest thereon, and $50,000 of the
Supplementary Deposit paid in accordance with Paragraph 1(b) hereof,
together with the interest thereon, and the Seller shall return to the
Buyer the balance of the Supplementary Deposit (being $97,500) together
with the interest thereon. If this Agreement is terminated or the
purchase and sale contemplated herein does not take place for any
reason other than the failure of the Seller to comply with the
provisions of this Agreement, the Buyer shall, upon the request of
the Seller, provide to the Seller as soon as practicable after such
request copies of all documents, plans, drawings, letters, notebooks,
reports, or other papers or electronic media detailing Buyer's
proposed development of the Premises and all applications for
approvals contemplated in this Paragraph 13.
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Notwithstanding the provisions set forth in this Paragraph 13(a)
above, if (iii) the Buyer shall have obtained all of the approvals
contemplated in this Paragraph 13(a) on or before June 30, 1999, but one
or more of the said approvals has not become Final solely because a third
party has initiated an appeal of such approval to a court of competent
jurisdiction, in lieu of terminating this Agreement as contemplated
above, the Buyer may, by written notice to the Seller not later than
June 30, 1999, elect to extend this Agreement and the date for Closing
to the earlier of (A) June 30, 2001, or (B) the date which is thirty
(30) days after all such appeals have been determined finally in a
manner reasonably satisfactory to the Buyer, and (iv) if, prior to
June 30, 1999, one or more of the Buyer's applications for approval
contemplated in this Paragraph 13 is denied, the Buyer may, by written
notice submitted to the Seller not later than June 30, 1999, elect to
appeal, at Buyer's expense, any such denial and to extend this Agreement
and the date for the Closing to the earlier of (X) June 30, 2001, or
(Y) the date which is thirty (30) days after all such appeals have been
determined finally in a manner reasonably satisfactory to the Buyer,
provided however, that if the Closing shall occur after June 30, 2000
by reason of the Buyer's election pursuant to this Paragraph 13(a), the
Purchase Price to be paid by the Buyer for the Premises shall increase
by twenty thousand dollars ($20,000) for each month or portion thereof
which passes from June 30, 2000 until the Closing, which amounts shall
be payable monthly, in advance, and shall be deemed to be additional
Earnest Money deposit for all purposes under this Agreement and shall
be applied to increase that portion of the Purchase Price payable at
the Closing in immediately available funds as contemplated in
Paragraph 1(c) hereof.
(b) Seller agrees that it shall, at its sole expense, construct a
sanitary sewer line (the "Sewer Extension") with capacity reasonably
satisfactory to the Buyer's engineer to serve Buyer's proposed
development on the Premises as described is Paragraph 13(a) above, which
Sewer Extension shall connect to the Sewer system of the Seymour Water
Pollution Control Authority through an easement over the Seller's
property adjacent to the Premises located on Cemetery and Holbrook Roads
(hereinafter referred to as "Parcel B"). The Sewer Extension to be
constructed by the Seller shall end at the boundary of the Premises on
Cemetery Road. The Seller shall obtain at its expense final design
plans and all approvals necessary for the construction of the Sewer
Extension not later than April 1, 1999 Seller shall obtain the capacity
requirements for the design from the Town Engineer and/or the Seymour
Water Pollution Control Authority based on 183 homes with three bedrooms
each, plus a 5,000 square foot clubhouse with a pool, plus capacity for
future connections to the system, as may be required by the Town of
Seymour. It shall be a condition of Closing by Purchaser herein that
the Seller shall have begun construction of the Sewer Extension in
accordance with said approvals prior to the Closing. The Seller agrees
to pursue diligently all governmental approvals necessary for the
construction of the Sewer Extension, to provide reasonable surety for
the completion thereof, provided that Buyer agrees that if the Town of
Seymour shall require a bond for the completion of the Sewer Extension,
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such bond shall be deemed to satisfy the surety required herein, and to
use reasonable and diligent efforts to complete construction of the
Sewer Extension as soon as reasonably practicable after beginning
construction thereof.
(c) The non-defaulting party shall give notice to the defaulting
party of any default by the defaulting party and the defaulting party
shall have ten (10) days from the receipt of notice to cure.
(d) The Buyer may at its option waive any of the conditions set
forth in this Paragraph 13 and agree to Close notwithstanding that any
or all of such conditions may not have occurred"
4. Paragraph 18 of the Purchase and Sale Agreement is hereby
amended by deleting the provisions thereof and substituting in lieu
thereof the following:
"18. BUYER'S FINANCIAL CONDITION DOCUMENTATION
On or before May 15, 1999, the Buyer shall (a) obtain from a bank
or other financial institution qualified to do business in Connecticut
a binding commitment to provide to the Buyer financing in the principal
amount not less than $1,422,000 with which to consummate the Closing and
(b) deliver to the Seller (i) a copy of such binding commitment and (ii)
evidence reasonably satisfactory to the Seller that the Buyer has
sufficient equity and ready access to funds, that is the balance of the
portion of the purchase price to be paid at the Closing, in order to
consummate the Closing. If the Buyer fails to obtain such binding
commitment and to deliver a copy of such commitment and evidence of
financial capacity to the Seller on or before May 15, 1999, the Seller
may terminate this Agreement and, subject to the provisions with respect
to the treatment of the Earnest Money and the Supplementary Deposit set
forth below and the right to possession of certain development plans
with respect to the Premises as set forth in Paragraph 13(a) hereof,
the obligations of the parties hereunder shall terminate and come to an
end. Upon Seller terminating this Agreement as contemplated in the
preceding sentence, the Seller may retain the Earnest Money deposit paid
by the Buyer in accordance with Paragraph 1(a) hereof, together with
the interest thereon, and $50,000 of the Supplementary Deposit paid in
accordance with Paragraph 1(b) hereof, together with the interest
thereon, and the Seller shall return to the Buyer the balance of the
supplementary Deposit (being $97,500) together with the interest thereon.
5. The Purchase and Sale Agreement is hereby further amended by
adding thereto a new Paragraph 19, as follows:
"19.Cemetery Road Engineering. The Seller acknowledges that the
Buyer has obtained from the Seymour Planning and Zoning Commission
so-called "conceptual" approval for the Project, which approval
contemplates, as a condition of final approval, the widening and partial
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relocation of Cemetery Road across Parcel B, and Seller agrees (a) to
allow a portion of Cemetery Road to be relocated onto Parcel B as
contemplated in the conceptual approval by the Seymour Planning and
Zoning Commission and (b) to provide to the Buyer as soon as reasonably
practicable, at Seller's expense, the design engineering necessary for
such relocation."
6. This Amendment Agreement is subject to the Seller obtaining
approval by the Connecticut Department of Public Utility Control
("DPUC") of its provisions, including without limitation, a specific
acknowledgment that (a) the agreement with respect to the allocation
of open space set forth in Paragraph 7(d) of the Purchase and Sale
Agreement, as amended by this Amendment Agreement, will, so long as
such allocation of open space is made at the time of the Closing,
continue to entitle the Seller to the ratemaking treatment based upon
an allocation of 50% of the Premises to open space, regardless of the
Seller's potential foreclosure and resale of Phase II of the Project,
and (b) rate base reductions occasioned by the gain to be received by
the Company on the sale of the Premises shall be recognized for
ratemaking purposes subsequent and with respect only to proceeds
actually received by the Company from the sale. Notwithstanding
the preceding sentence, the parties acknowledge that the extension of
time for Closing contemplated by this Amendment Agreement results, in
part, from both parties' inability to obtain local regulatory approvals
by December 31, 1998, and the parties, irrespective of approval of this
Amendment Agreement, hereby mutually release each other from and against
all claims for loss or damage, other than the Seller's right to retain
the Earnest Money deposit, together with interest thereon, resulting
from their respective failures to obtain local approvals as
contemplated in the original Purchase and Sale Agreement. The Seller
will, in order to seek the DPUC's approval of this Amendment Agreement,
apply to the DPUC as soon as reasonably practicable to reopen the
proceeding in which the DPUC approved the Purchase and Sale Agreement.
During the pendancy of the DPUC proceeding, the parties shall proceed
in good faith to obtain all approvals contemplated in Paragraphs 13,
18 and 19 of the Purchase and Sale Agreement, as amended by this
Amendment Agreement, and agree that the dates set forth in the Purchase
and Sale Agreement, as so amended, for the performance of any act or
acts by a party, other than the Seller's obligation to convey the
Premises, shall not be modified or extended by virtue of any delay in
obtaining the DPUC approval contemplated herein.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the
date first above written.
BIRMINGHAM UTILITIES, INC.
By: /s/ Betsy Henley-Cohn
Betsy Henley-Cohn, Its Chairwoman,
Duly Authorized
M/1 HOMES, LLC
By: /s/Glenn Tatangelo
Glenn Tatangelo, Its Member,
Duly Authorized