EXHIBIT 10.18
NOTICE IS HEREBY GIVEN PURSUANT TO SOUTH CAROLINA UNIFORM ARBITRATION ACT, S.C.
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CODE ANN. SECTION 15-48-10(a) THAT CERTAIN PROVISIONS OF THIS AGREEMENT ARE
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SUBJECT TO MANDATORY ARBITRATION TO BE CONDUCTED IN ACCORDANCE WITH THE
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COMMERCIAL RULES OF PRACTICE AND PROCEDURE OF THE AMERICAN ARBITRATION
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ASSOCIATION.
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STATE OF SOUTH CAROLINA
LAND PURCHASE AGREEMENT
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COUNTY OF HORRY
THIS LAND PURCHASE AGREEMENT (this "Agreement") is made and entered into as
of the 30th day of December, 1996, by and between MYRTLE BEACH FARMS COMPANY,
INC., a South Carolina corporation, hereinafter referred to as the "Seller"; and
VISTANA MYRTLE BEACH, L.P., a South Carolina limited partnership, hereinafter
referred to as the "Buyer."
STATEMENT OF PURPOSE
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Seller is the owner of certain real property located in and/or near Myrtle
Beach, South Carolina, as more particularly described hereinafter. Buyer and
Seller each desire that Buyer purchase, develop and operate on such property a
time-share vacation resort containing approximately 600 time-share units (the
"Units").
NOW, THEREFORE, IN CONSIDERATION OF the mutual agreements and undertakings
herein set forth and other valuable considerations, the receipt and sufficiency
of which are hereby acknowledged, Seller and Buyer hereby agree as follows:
1. Description of Property.
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(a) The property which is subject to this Agreement (the "Property")
consists of approximately 40 acres of land located in Horry County, South
Carolina as shown on the map marked EXHIBIT A and attached hereto and
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incorporated herein by reference, together with and including (i) all
improvements (if any) located thereon, (ii) all trees, shrubbery and growing
crops located thereon, (iii) all easements and rights-of-way appurtenant to the
Property and all of Seller's rights to use same, (iv) all rights of ingress and
egress to and from the Property, (v) any and all right, title and interest of
Seller in and to any and all roads, streets and rights-of-way affecting or
bounding the Property and (vi) any and all appurtenant development rights,
including the present or future use thereof, relating to the Property, including
sanitary sewer capacity, drainage, water capacity and other utility facilities
to the extent they pertain to or benefit the Property, including, without
limitation, all reservations of or commitments, letters or agreements relating
to any such use currently or in the future.
(b) Seller hereby agrees to sell and convey to Buyer, and Buyer hereby
agrees to purchase from Seller, the approximately fourteen (14) acres of the
Property identified on EXHIBIT A attached hereto as the Initial Purchase (the
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"Initial Purchase"). After Buyer purchases the Initial Purchase, Buyer shall
have, and Seller hereby grants to Buyer effective upon the Initial Purchase, the
option to purchase the
remainder of the Property which is identified on EXHIBIT A as the Option
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Property (the "Option Property"), as more fully set forth in this Agreement.
2. Manner of Purchase.
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(a) The closing with respect to the Initial Purchase (the "Initial
Closing") shall take place on or before December 31, 1996 or such other date
mutually agreed upon by Buyer and Seller. Thereafter, Buyer shall have the
right, at its sole option, to exercise its option with respect to the Option
Property in accordance with Paragraph 2(b) below during the period commencing on
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the date of the consummation of the Initial Closing and continuing through
December 31, 2003 (the "Option Period"), on which date this Agreement shall
terminate and Buyer shall have no further rights to acquire any portion of the
Option Property; provided, however, that no Option Effective Date (as defined in
Paragraph 2(b) herein) shall be less than 120 days prior to the expiration of
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the Option Period. Each closing with respect to all or a portion of the Option
Property shall be referred to herein as a "Closing." Commencing with the
Initial Closing and continuing until such time as Buyer's option rights on the
Option Property are terminated pursuant to this Agreement, Buyer agrees that it
shall be responsible for payment of all real estate taxes, personal property
taxes, ad valorem taxes, rollback taxes, general and special assessments, or any
other taxes imposed or levied against the Option Property. Buyer and Seller
agree to prorate such charges as of the date of termination of Buyer's option
rights with respect to any portion of the Option Property not purchased by
Buyer, with Buyer being responsible for all such taxes for the calendar year in
which such termination occurs through the date of termination, and Seller being
responsible for all such taxes after the effective date of such termination.
Seller shall provide to Buyer a statement setting forth all such taxes with
respect to the Option Property, together with supporting documentation, at least
thirty (30) days prior to such taxes becoming first due. If the Option Property
is a separately assessed tax parcel, Buyer shall remit such amount directly to
the applicable taxing authority prior to such taxes becoming delinquent; if the
Option Property is part of a larger tax parcel, Buyer shall pay the taxes with
respect to the Option Property to Seller prior to the date on which same would
become delinquent. Buyer shall have the right to protest the amount of such
taxes with respect to the Option Property so long as Buyer escrows the contested
tax amount with a third party escrow agent or as otherwise required by
applicable law so that such contest does not result in the imposition of any
lien upon the Option Property or other real property owned by Seller. Seller
agrees to reasonably cooperate with any such contest by Buyer provided that all
of Seller's costs and expenses (including reasonable attorneys' fees) in
connection therewith shall be paid by Buyer.
(b) After Buyer has closed on the Initial Purchase so long as Buyer is not
in default under this Agreement, Buyer may elect, at its sole option, to
purchase additional portions of the Property after the Closing of the Initial
Purchase, by providing written notice of such election to Seller. Buyer shall
deliver together with its notice of election a Survey (as defined in Paragraph 4
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herein) identifying the applicable portion of the Option Property to be acquired
and a legal description thereof. In the event of any such election by Buyer
during the Option Period, the date that such notice is considered given or
delivered pursuant to Paragraph 21 of this Agreement shall be deemed the
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Effective Date with respect to such portion of the Option Property (each an
"Option Effective Date"); provided, however, that no Option Effective Date shall
be less than one hundred twenty (120) days prior to the expiration of the Option
Period. Buyer hereby agrees that in selecting the applicable portions of the
Option Property to be acquired under this Paragraph 2(b), Buyer shall generally
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select portions of the Option Property in the sequences shown on the preliminary
concept sketch plan attached hereto as EXHIBIT B and incorporated herein by
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reference; provided, however, that Seller acknowledges that the progression of
acquisition and development shown on EXHIBIT B is strictly preliminary and that
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the exact size, acreage, and location of Buyer's elections are
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subject to change by Buyer during the course of this Agreement in accordance
with market and development conditions. Buyer, however, agrees that in making
its selections, (i) Buyer shall select portions of the Option Property which are
contiguous to those portions previously acquired by Buyer, (ii) the size and
acreage of each selection shall be sufficient for the development a minimum of
two (2) standard time-share buildings by Buyer in accordance with the
requirements of all applicable governmental authorities, (iii) that Buyer's
selections shall not leave Seller with any portion of the Option Property
without direct access to Central Parkway and (iv) that Seller shall have the
right to approve the precise configuration of each election, which Seller shall
not exercise in a commercially unreasonable manner (the parties agree it shall
not be commercially unreasonable to disapprove any configuration which leaves
gaps or gerrymanders the Property).
(c) In the event that Buyer shall exercise its option to purchase all or
any portion of the Option Property during the Option Period and shall fail to
close on the purchase thereof for any reason other than Seller's default, a
failure of a condition to Buyer's obligations under this Agreement, or the
exercise of Buyer's right to terminate its election within the applicable
Investigation Period pursuant to Paragraph 8 herein, then in such event Buyer's
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option on the Option Property shall be terminated and Buyer shall have no
further rights to purchase any portion of the Option Property. Buyer may also,
at its election, voluntarily terminate its option rights under this Agreement at
any time prior to the expiration of the Option Period by written notice to
Seller.
(d) Seller hereby agrees to grant to Buyer upon reasonable request, any
utility, access, construction or other easements, and to join in granting and
dedicating to governmental authorities, utility companies or others providing
access or utility services as reasonably required by Buyer on, over, under or
across any portion of the Option Property, in order to permit Buyer to have
reasonable construction access to a public right-of-way and reasonable access to
utility services to serve those portions of the Property previously acquired by
Buyer to the extent such construction access or utility service is not otherwise
reasonably available to such portions of the Property owned by Buyer. Likewise,
Buyer hereby agrees to grant to Seller, upon reasonable request, any utility,
access, construction or other easements, and to join in granting and dedicating
to governmental authorities, utility companies or others providing access or
utility services as reasonably required by Seller on, over, under or across any
portion of the Property owned by Buyer or the Option Property not yet acquired
by Buyer, for reasonable access to utility services to serve that portion of the
Option Property not yet acquired by Buyer and other property owned by Seller and
adjoining the Property, to the extent that such utility service is not otherwise
reasonably available to such property owned by Seller. The location of any
easements granted under this Paragraph 2(d) shall in no event interfere with the
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actual or contemplated development of the respective properties of Buyer and
Seller. This obligation shall survive each Closing so long as Buyer's option
rights under this Agreement are outstanding. Any utility easements granted
hereunder shall include the right to install, construct, replace, maintain and
repair the applicable utility facilities. In addition, any easement located on,
over, under or across the Option Property at Buyer's request pursuant to this
subparagraph (d) shall be subject to relocation by Seller at Buyer's cost and
expense in the event that Buyer does not acquire the portion of the Option
Property over which such easement is located and Buyer's option rights under
this Agreement are terminated or expired; provided, however, that the relocation
of said easements shall occur in a commercially reasonable manner with minimum
disruption of service to the portions of the Property served by such easement.
3. Purchase Price. The purchase price for the portions of the Property
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to be purchased at each Closing (the "Purchase Price") shall be based on the
gross acreage of each portion purchased as
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determined from each Survey. The Purchase Price shall be payable in United
States currency by way of federal wire transfer or other immediately available
funds at each Closing. The Purchase Price for the Initial Purchase shall be
calculated on the basis of $139,600.00 per acre. Thereafter, the per acre price
for any additional portion of the Option Property purchased by Buyer shall be
determined by the date of Closing with respect to such portion of the Option
Property as follows:
(a) $139,600 per acre closed during the first twelve (12) months following
the Closing of the Initial Purchase;
(b) $153,560.00 per acre closed during months thirteen (13) through
twenty-four (24) following the Closing of the Initial Purchase;
(c) $168,900.00 per acre closed during months twenty-five (25) through
thirty-six (36) following the Closing of the Initial Purchase;
(d) $185,800.00 per acre closed during months thirty-seven (37) through
forty-eight (48) following the Closing of the Initial Purchase;
(e) $204,400.00 per acre closed during months forty-nine (49) through
sixty (60) following the Closing of the Initial Purchase;
(f) $224,800.00 per acre closed during months sixty-one (61) through
seventy-two (72) following the Closing of the Initial Purchase; and
(g) $247,300.00 per acre closed thereafter through the end of the Option
Period.
Provided, however, if Buyer shall make an election pursuant to Paragraph 2(b) at
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least one hundred twenty (120) days prior to a scheduled Purchase Price increase
as set forth above, then in the event Buyer is unable to Close on the applicable
portion of the Option Property, despite diligent good faith efforts of Buyer,
prior to such scheduled Purchase Price increase going into effect, the Purchase
Price in effect on the Option Effective Date with respect to that portion of the
Option Property shall remain in effect for up to an additional thirty (30) days
after the Purchase Price increase would have become effective.
4. Survey. Buyer shall, at Buyer's sole expense, cause a survey of each
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portion of the Property purchased under this Agreement (each a "Survey") to be
prepared by a registered land surveyor of Buyer's choosing and to such standards
as Buyer may require. To the extent reasonably available to Seller, Seller
shall provide all information available to Seller necessary to enable the
surveyor preparing each Survey to designate thereon the precise location(s) of
all underground utility lines, including, without limitation, electrical
transmission lines, telephone lines, cable television lines and natural gas
lines, within the bounds of each applicable portion of the Property. Buyer
agrees to cause the surveyor to indicate the acreage of each portion of the
Property to the nearest 1/100th of an acre. The description of the Property
contained in each Deed (as defined in Paragraph 6 herein) shall be prepared from
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the respective Survey.
5. Closing. The Closing of the Initial Purchase shall take place on or
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before December 31, 1996 or such other date mutually agreed upon by Buyer and
Seller. If Buyer exercises its option to purchase any portion of the Option
Property pursuant to Paragraph 2(b) above, the Closing with respect thereto
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shall take place, provided all conditions precedent thereto are met or waived,
on the date which is
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sixty (60) days following the expiration of Buyer's Investigation Period with
respect to such portion of the Option Property or on a prior date selected by
Buyer on at least ten (10) days' written notice to Seller.
6. Delivery of Deed; Title. At each Closing of any portion of the
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Property, Seller shall deliver to Buyer a special warranty deed (each a "Deed")
in form and content satisfactory to Buyer's attorneys, conveying to Buyer a
good, indefeasible fee simple and insurable title to the Property, said title to
be insurable both as to fee and marketability thereof at regular rates of First
American Title Insurance Company or a title insurance company of national
recognition acceptable to Buyer (the "Title Company") without exception except
as to those matters enumerated herein. The Property shall be conveyed by Seller
to Buyer free and clear of all liens, encumbrances, claims, rights-of-way,
easements, leases, restric tions and restrictive covenants, except that said
Property may be conveyed subject only to the matters and exceptions set forth in
the Deed delivered at the Initial Closing and such other matters as Buyer may
approve in writing (the "Permitted Exceptions").
Seller has delivered to Buyer copies of any existing title information
relating to the Property and in the possession of or reasonably available to
Seller. Buyer at its expense shall have through two (2) days prior to the
Initial Closing within which to cause title to the Property to be examined
("Buyer's Initial Title Examination Period") and to give Seller written notice
(the "Objection Notice") setting forth any objection(s) (other than the
Permitted Exceptions) to Seller's title to the Property. In the event Buyer
fails to deliver the Objections Notice prior to the expiration of Buyer's
Initial Title Examination Period, Buyer shall be deemed to have waived all
rights under this paragraph as to title matters of record as of effective date
of such title examination (the "Examination Date"). Seller shall have the
option, but shall not be obligated, to cure any such title objection and shall
notify Buyer prior to the Initial Closing whether or not it intends to satisfy
any such title objections. Failure by Seller to provide such notice prior to
the Initial Closing shall be deemed a refusal by Seller to cure any such title
objections. If Seller shall refuse to cure or satisfy any title objections
contained in the Objection Notice, then, at the option of Buyer, evidenced by
written notice to Seller given on or before the Initial Closing, Buyer may: (i)
terminate this Agreement and such termination shall not be a default by Buyer
under Paragraph 17(a), or (ii) elect to accept title to the Property
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irrespective of such title objections without reduction of the Purchase Price.
Buyer's consummation of the Initial Closing shall be deemed an election of
choice (ii) above. If Seller shall agree to satisfy any title objection noted
in the Objection Notice, it shall be a condition precedent to Buyer's obligation
to purchase any portion of the Property affected by any such title matter that
Seller satisfy such title matter prior to the applicable Closing with respect to
such affected portion of the Property.
From and after the Effective Date, Seller covenants and agrees that is
shall not, without the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed, permit any lien, encumbrance, or other matter
to attach to or affect title to any portion of the Property; provided, however,
that the parties acknowledge that certain sewer, water, stormwater and drainage
easements will be located across the Option Property as preliminarily located on
EXHIBIT A attached hereto and incorporated herein, except that the exact
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location of such easements will be subject to relocation (i) as Buyer and Seller
shall mutually agree in connection with the development of the Option Property
and (ii) by Seller as set forth in the last sentence of Paragraph 2(d) herein.
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With respect to any matters of title to the Property which first arise, occur or
appear of record after the Examination Date and to which Buyer has not consented
in writing ("New Title Matters"), Seller shall take all action(s) necessary to
clear all New Title Matters prior to Buyer being obligated to close on the
portion of the Property affected thereby pursuant to the terms of this
Agreement. Seller shall clear any New Title Matter within thirty (30) days of
receiving notice thereof. If Seller shall fail to satisfy any New Title Matter
prior to the applicable Closing, Buyer shall be entitled
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to take any action necessary to clear such New Title Matters and receive a
credit against the applicable Purchase Price for the costs and expenses thereof.
7. Zoning; Contemplated Use. The obligations of Buyer under this
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Agreement are in all respects conditioned upon and subject to (i) each portion
of the Property being annexed and rezoned to a TA-55 classification or
equivalent classification which permits the Contemplated Use (as hereinafter
defined) by the City of Myrtle Beach as of its respective Closing, and (ii)
there then being no pending or proposed application for any rezoning or change
in zoning not consented to by Buyer that would apply to the Property or any
portion thereof which would inhibit or prohibit the development and utilization
of the Property for hotels, motels, and other transient occupancy
accommodations, including time-share, vacation clubs and resort condominiums,
multifamily developments, parking facilities and other accessory uses in
connection therewith and which are consistent with the uses specified above (the
"Contemplated Use") or which would increase the costs of developing and using
the Property for the Contemplated Use. In the event Seller obtains knowledge of
any application or proposal for rezoning or change in zoning of the Property or
any portion thereof which would inhibit or prohibit the development and
utilization of the Property for the Contemplated Use or which would increase the
costs of developing and using the Property for the Contemplated Use, Seller
shall immediately notify Buyer and then Buyer, in Buyer's sole discretion, shall
have the option of (i) terminating this Agreement by declaring said Agreement
null and void, whereupon the parties hereto shall have no further rights,
obligations or liabilities with respect to each other hereunder or (ii)
terminating its election as to the applicable portion of the Property upon
written notice to Seller, which termination shall not be a default under
Paragraph 17(a). Seller covenants, represents and warrants to Buyer that it
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will not apply for, encourage or consent to any zoning or rezoning of any
portion of the Property without Buyer's prior written consent, except for the
annexation and rezoning (to a TA-55 classification or equivalent classification
which permits the Contemplated Use) by the City of Myrtle Beach. All terms and
conditions of such annexation and rezoning shall be subject to the reasonable
approval of Buyer. Buyer agrees to cooperate with Seller in such annexation and
rezoning process and agrees to pay for all necessary surveys required in
connection therewith. Seller agrees that Buyer, so long as Buyer is not in
default under this Agreement, shall have the right, at Buyer's option, to
request Seller to annex and rezone the entire remaining Option Property as
provided in this Paragraph 7, provided that any such request should not be given
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later than one hundred twenty (120) days prior to a pending Closing on any
portion of the remaining Option Property.
Notwithstanding anything to the contrary contained herein, in the event of
a rezoning of any portion of the Option Property initiated by a party
unaffiliated with Seller to a classification which would prohibit the
Contemplated Use, then in such event Buyer may elect to exercise its option to
purchase any portion of the Option Property affected by such rezoning
(consistent with the requirements of Paragraph 2(b) herein); provided, however,
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that Buyer's election must occur within one (1) year of the date upon which such
rezoning becomes final and, provided further that in the event Buyer fails to
exercise its election to purchase such affected portion of the Option Property
within said one-year period, its option with respect to such portion shall
terminate and Buyer's option with respect to the remainder of the Option
Property not affected by such rezoning shall remain in effect consistent with
the requirements of Paragraph 2(b) above.
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Buyer agrees that its intent is to develop time-share units on the Property
and that Buyer shall use reasonable best efforts to do so; provided, however,
that such intent shall in no way limit Buyer's right to use the Property for any
use encompassed within the Contemplated Use.
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8. Pre-Closing Rights and Privileges. From the Effective Date until such
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time as all portions of the Property are purchased by Buyer or this Agreement is
otherwise terminated, Buyer, Buyer's authorized agents and employees, as well as
others authorized by Buyer, shall be entitled to enter upon the Property to
conduct and complete investigations with respect to environmental conditions,
soils conditions, flood and drainage conditions, access, land use regulations,
building standards regulations, infrastructure investigation (including
availability of all utilities), and surveying (the "Investigations"); provided,
however, none of the Investigations so conducted will result in any material
adverse change to the physical characteristics of any portion of the Property
and Buyer shall return the Property to the same condition as existed prior to
the Investigations to the extent reasonably practicable. Buyer agrees to comply
with all applicable laws and local regulations in conducting the Investigations
and to indemnify and hold Seller harmless from and against any and all claims,
costs, expenses, and liabilities for personal injury or damage to the property
or third parties, including reasonable attorneys' fees, arising out of or by
reason of the Investigations of Buyer or Buyer's agents prior to settlement or
other termination of this Agreement; provided, however, such indemnification
obligations shall exclude any claims, costs, expenses and liabilities arising
out of (i) the discovery of, or the accidental or inadvertent release of, any
Substances (as defined in Paragraph 13(g) herein) resulting from the
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Investigations conducted in a commercially reasonable manner, which Substances
were in, on or under the Property prior to the Investigations or (ii) the
negligence of Seller or Seller's employees or agents.
If Buyer shall not be satisfied with any of the Investigations, in Buyer's
sole discretion, Buyer shall have the unqualified right at any time (i) prior to
the Initial Closing with respect to the Initial Purchase and (ii) the sixty (60)
day period following each applicable Option Effective Date (each an
"Investigation Period"), to terminate its election as to the portion of the
Property which is subject to such Investigations by giving written notice
thereof to Seller and any such termination shall not be a default by Buyer under
Paragraph 17(a) herein. If such termination relates to the Initial Purchase,
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then this Agreement shall terminate and neither party shall have any further
obligations hereunder.
9. Mechanics' or Materialmen's Liens. Seller agrees to provide at each
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Closing an executed owner's affidavit or other document(s) required by the Title
Company as a condition to the issuance of a final title insurance policy in
favor of Buyer with affirmative coverage against the possible lien claims of
mechanics, laborers and materialmen. Additionally, Seller shall discharge in
full any and all such indebtedness on the portion of the Property being acquired
at or before each Closing, or at its election, provide Buyer with such other
commercially reasonable protections as may be appropriate under the
circumstances such as bonding or affirmative title insurance coverage.
10. Risk of Loss. Risk of loss or damage by fire or other casualty until
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the date of Closing for each applicable portion of the Property and delivery of
the Deed as to each portion of the Property shall remain with Seller.
11. Waste. Buyer's obligations under this Agreement are in all respects
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conditioned upon and subject to the Property being in substantially the same
condition at each Closing as exists on the Effective Date subject to
installation of utilities on the Option Property as described in Paragraph 6
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herein and any alterations to the Option Property caused by Buyer's
Investigations. Seller represents, subject to the exceptions noted in the
immediately preceding sentence, that it will not cause or permit any grading of
any portion of the Property to which it retains title or any trees or shrubbery
to be cut on any portion of the Property to which they retained title without
the prior written consent of Buyer or its assigns.
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12. Closing Costs. Seller shall furnish and pay the expense of
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preparation of each Deed, the recording fee required by South Carolina Code
(S)12-24-10 et. seq. and the fees and costs of Seller's own attorney. Seller
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shall also be responsible for and discharge prior to delinquency all assessments
(special or otherwise), rollback or deferred taxes and charges placed against or
applicable to the Property relating to periods prior to January 1, 1997. Buyer
shall pay for the expense of filing each Deed, the cost of each Survey, the cost
of all title searches, the title insurance premium for coverage provided by the
Title Company insuring Buyer's title to the applicable portion of the Property
in an amount equal to the full Purchase Price to be paid therefor and the fees
and costs of Buyer's own attorney.
13. Conditions Precedent to Buyer's Obligations. In addition to any other
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conditions precedent to the performance of Buyer's obligations under this
Agreement, the obligations and liabilities of Buyer hereunder shall in all
respects be conditioned upon satisfaction of each of the following conditions
precedent as of each respective Closing with respect to the portion of the
Property being acquired at such Closing (any of which may be waived by written
notice from Buyer to Seller):
(a) Seller shall own marketable fee simple and insurable title to the
Property on the date of each Closing, subject only to the Permitted
Exceptions.
(b) Seller shall have entered into no agreement, oral or written, not
referred to herein, with reference to the Property, and neither Seller
nor the Property shall be subject to any judgment or decree of a court
of competent jurisdiction, or to any litigation or administrative
proceeding which would in any way affect the Property or which would
in any way be binding upon Buyer, or Buyer's assigns or restrict in
any way Seller's right or ability to enter into this Agreement and
consummate the transactions contemplated hereby. In addition, no
further action shall be required as a prerequisite to the
enforceability of this Agreement against Seller, in accordance with
its terms.
(c) Neither Seller nor any agent of Seller shall have received any notices
from any city, county or any governmental authority of any taking of
the Property, or any portion thereof, by eminent domain or similar
proceeding, and no such taking or other condemnation of the Property,
or any portion thereof, shall be threatened or contemplated by any
such governmental authority.
(d) The Initial Purchase shall be contiguous to and have direct vehicular
access to the right-of-way of Central Parkway in accordance with the
Contemplated Use.
(e) Seller shall have presented evidence satisfactory to Buyer, Buyer's
attorneys and the Title Company with respect to the right, power and
authority of designated representative(s) of Seller to execute and
deliver the closing documents and consummate the sale of the Property.
(f) The Title Company is willing and is prepared to issue to Buyer upon
the Closing a fee owner's policy of title insurance meeting the
requirements of Paragraph 6 herein and using the standard ALTA Owner's
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Title Policy form.
(g) No toxic or hazardous material or waste limited or regulated by any
governmental or quasi-governmental authority, or that, even if not so
limited or regulated, could or does
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pose a hazard to the health or safety of the occupants of the Property
or adjacent properties (collectively, "Substances"), including, but
not limited to, asbestos, polychlorinated biphenyls, petroleum
products and substances regulated under any feder al, state or local
environmental statute, law, order, ordinance, regulation, rule, re
quirement or right or remedy existing under common law or in equity
(collectively, the "Statutes and Laws") has been or, prior to the
Closing, shall be, located, released (within the meaning of 42 U.S.C.
(S) 9601(22)), stored, treated, generated, transported to or from,
disposed of (with the meaning of 42 U.S.C. (S) 6903(3)) or allowed to
escape on the Prop erty, including, without limitation, the surface
and subsurface waters of the Property. No endangered species of plants
or animals shall be located within the boundaries of the Property and
no portion of the Property has been or, prior to Closing, shall be a
critical habitat for an endangered species. No above ground storage
tanks ("ASTs") or under ground storage tanks ("USTs") shall have been
located on the Property or, if located on the Property, shall have
been subsequently removed and disposed of in full compliance with all
applicable Statutes and Laws (satisfactory evidence of which shall
have been provided to Buyer). No portion of the Property shall have
been used for waste treatment, storage or disposal, and no wetlands
shall be located within the boundaries of the Property. No
investigation, administrative or judicial order, governmental notice
of noncompliance or violation, remediation action plan, consent order
and/or agreement, administrative proceeding, civil or criminal
litigation or settlement under Statutes and Laws or with respect to
Substances, ASTs or USTs shall be proposed, threatened, antici pated
or in existence with respect to the Property. No notice shall have
been served on or delivered to Seller from any entity, governmental
body or individual claiming any violation of any Statutes and Laws or
demanding payment or contribution for environ mental cleanup costs,
environmental damage, harm to endangered species, or injury to natural
resources, or asserting liability with respect to same.
(h) In the event a subdivision is required pursuant to applicable law in
connection with the conveyance of any portion of the Property to
Buyer, all necessary approvals respecting such subdivision shall have
been obtained and shall be final and nonappealable prior to or as of
each Closing. The costs of completing any such subdivision shall be
Buyer's responsibility, and the terms of any such subdivision shall be
acceptable to Buyer.
(i) It shall be a condition to the Initial Closing that Buyer and Seller
execute a Memorandum in recordable form sufficient to provide record
notice of Buyer's option to acquire the Option Property after the
Initial Purchase herein. Recording, filing and like charges and any
stamp, charge for recording, transfer or other tax in connection with
said Memorandum shall be paid by Buyer. In the event of termination
of this Agreement, within thirty (30) days after written request from
Seller, Buyer agrees to execute, acknowledge and deliver to Seller an
agreement removing such Memorandum from record. If Buyer fails to
execute such agreement within said thirty (30) day period or fails to
notify Seller within said thirty (30) day period as to its reasons for
refusing to execute such agreement, Seller is hereby authorized to
execute and record such agreement removing said Memorandum from
record.
14. Conditions Precedent to Seller's Obligations. The obligations and
--------------------------------------------
liabilities of Seller hereunder shall in all respects be conditioned
upon satisfaction of each of the following
9
conditions precedent as of each Closing (any of which may be waived by
written notice from Seller to Buyer):
(a) All of the representations and warranties of Buyer set forth herein
shall be true in all material respects.
(b) Buyer shall be in material compliance with all performance
requirements of Buyer under this Agreement as of each Closing,
including the provisions of Paragraph 2(b) herein.
--------------
(c) Buyer shall have presented evidence satisfactory to Seller and
Seller's attorneys with respect to the right, power and authority of
designated representative(s) of Buyer to execute and deliver the
closing documents and consummate the purchase of each portion of the
Property.
15. Seller's Representations and Warranties. Seller hereby makes the
---------------------------------------
following representations and warranties to Buyer, each of which shall be
deemed material:
(a) Seller has good, indefeasible and marketable fee simple title to the
Property, and, at the time of each Closing with respect to the portion
of the Property then being acquired, there are no mechanics' liens,
contractors' claims, unpaid bills for material or labor pertaining to
the Property, nor any other similar liens which might adversely affect
Seller's title to the Property, except for current ad valorem real
estate taxes and rollback taxes.
(b) There are no tenants or other persons or entities on the Property
which will have a right of possession beyond the date of each Closing.
(c) To the best of Seller's knowledge without investigation, there are no
pending, threatened or contemplated condemnation actions involving all
or any portion of the Property and Seller has received no notice of
any such action. If, between the Effective Date and any Closing, any
portion of the Property is subject to pending, threatened or
contemplated condemnation action by any governmental agency, Buyer
shall have the option, in Buyer's sole discretion, of declaring this
Agreement null and void. Seller shall notify Buyer within five (5)
business days of receipt of any information concerning any such
condemnation action, and in turn Buyer must elect within thirty (30)
business days from the date of receipt of the said information whether
to (i) terminate Buyer's election as to the applicable portion of the
Property or (ii) proceed to close the transaction and receive an
assignment of all of Seller's right, title and interest in and to any
condemnation award. If Buyer elects (ii), Seller shall fully
cooperate, at no expense however to Seller, with Buyer in any
condemnation action.
(d) As of each Closing, no maintenance, management, service, supply,
employment or other contracts shall exist with respect to the Property
acquired at such Closing.
(e) From the Effective Date through each Closing, Seller shall:
10
(1) Maintain the Property in the same condition as presently exists,
except for (i) reasonable wear and tear (ii) construction and
installation of water and sewer lines through the Property
pursuant to easements as described in Paragraph 6 herein and
-----------
(iii) any alterations caused by Seller's Investigations.
(2) Perform all of its obligations under any contracts respecting the
Property and promptly notify Buyer of any default thereunder.
(3) Provide Buyer or its representatives reasonable access to the
Property and reasonable access to all engineering information,
reports, soil tests, surveys, plans and records available to
Seller relating to the Property.
(4) Refrain from entering into, or negotiating with regard to, any
contract or commitment or from incurring any expenditure or
obligation affecting the Property or the title thereto which
would extend beyond any Closing or would involve payments that
would not be paid in full prior to any Closing without the prior
written consent of Buyer.
(5) Pay promptly indebtedness secured by deed(s) to secure debt or
other liens, and generally all expenses incurred by Seller
(except taxes which Buyer shall pay pursuant to Paragraph 2(a)
--------------
herein) in the operation of the Property, which may arise out of
or accrue because of Seller's ownership or operation of the
Property.
(6) Make no lease or rental of the Property or any portion thereof
without the prior written consent of Buyer, or negotiate,
actively market or enter into any other contract or option for
the sale of the Property or any portion thereof, or further
encumber the Property with any restriction or easement (other
than as contemplated pursuant to the terms of this Agreement).
(f) The entry into this Agreement, the execution and delivery of all
instruments and documents required to be executed and delivered under
the terms hereof, and the performance of all acts necessary and
appropriate for the full consummation of the transaction contemplated
hereunder are consistent with, and not in violation of, and will not
create any adverse condition under any contract, agreement, or
instrument to which Seller is a party, or any judicial order or
judgment of any nature under which Seller is bound. In addition,
Seller has taken or caused to be taken all actions required to render
this Agreement enforceable against Seller in accordance with its
terms.
(g) Seller has not received, with respect to the Property, any notice from
any insurance company, governmental agency, adjacent landowners or any
other party of (i) any condition, defect, or inadequacy that, if not
corrected, would result in termination of insurance coverage or
increase its costs, (ii) any violation of building codes and/or zoning
ordinances, subdivision ordinances, watershed regulations, or other
governmental laws, regulations or orders, (iii) any proceedings that
could or would cause the change, redefinition, or other modification
of the zoning classification, or of other legal requirements
applicable to the Property or any part thereof, or any property
adjacent to the Property, (iv) any moratorium that could or would in
any way impair the development
11
and use of the Property for the Contemplated Use or (v) any
significant adverse fact or condition relating to the Property or its
Contemplated Use that has not been disclosed in writing to Buyer by
Seller. The representations and warranties in (iv) and (v) above shall
be limited to the best of Seller's knowledge without investigation.
(h) Seller, to the best of its knowledge without investigation, is unaware
of any proposal to change, limit or deny access to the Property from
Central Parkway.
(i) Seller is not a "foreign person" which would subject Buyer to the
withholding tax provisions of Section 1445 of the Internal Revenue
Code of 1986, as amended, and, at each Closing, Seller agrees to
deliver to Buyer a certification, under penalty of perjury, in a form
approved under regulations promulgated pursuant to Section 1445 of the
Internal Revenue Code of 1986, as amended, to the effect that Seller
is not a foreign person.
(j) To the best of Seller's knowledge without investigation: (i) no
Substances have been or shall (to the extent controllable by Seller),
prior to the Closing, be located, released (within the meaning of 42
U.S.C. (S) 9601(22)), stored, treated, generated, transported to or
from, disposed of (within the meaning of 42 U.S.C. (S) 6903(3)) or
allowed to escape on the Property, including, without limitation, the
surface and subsurface waters of the Property; (ii) no ASTs or USTs
are located on the Property or were located on the Property and
subsequently removed or filled; (iii) no portion of the Property has
been used in the past for waste treatment, storage, or disposal, and
no wetlands are located within the boundaries of the Property; (iv) no
endangered species of plants or animals are located within the
boundaries of the Property and no portion of the Property has been or,
prior to Closing, will be a critical habitat for an endangered
species; (v) no investigation, administrative or judicial order,
governmental notice of noncompliance or violation, remediation action
plan, consent order and agreement, administrative proceeding, civil or
criminal litigation or settlement under Statutes and Laws or with
respect to Substances, ASTs or USTs is proposed, threatened,
anticipated or in existence with respect to the Property.
The Property and Seller's operations thereon are and, to the best
of Seller's knowledge without investigation, in the past have been in
compliance with all applicable Statutes and Laws. No notice has been
or will (to the best of Seller's knowledge, information and belief)
prior to each Closing, be served on or delivered to Seller from any
entity, governmental body or individual claiming any violation of any
Statutes and Laws or demanding payment or contribution for
environmental cleanup costs, environmental damage, harm to endangered
species, or injury to natural resources, or asserting liability with
respect to same. Copies of any such notices received on or after the
Effective Date (including after each Closing) shall be forwarded to
Buyer within three (3) days of their receipt. If Seller has conducted
or has access to an "environmental audit" or other environmental
study, report or information respecting the Property, Seller shall
provide Buyer with a true and complete copy of same within ten (10)
days following the Effective Date.
(k) SELLER MAKES NO WARRANTIES OR REPRESENTATIONS WHATSOEVER AS TO THE
INTENDED DEVELOPMENT BY BUYER ON THE PROPERTY OR THE SUCCESS THEREOF
OR ANY OTHER PROPERTIES WHICH ARE OWNED BY
12
SELLER IN THE VICINITY OF THE PROPERTY, WHETHER OR NOT IN THE GENERAL
VICINITY OF THE PROPERTY.
Except as otherwise specifically provided in this Agreement, all
representations and warranties of Seller contained in this Agreement or any
document or exhibit required to be executed by Seller pursuant hereto shall be
true in all material respects with respect to the Property as of the Effective
Date and the Initial Closing, and at each Closing thereafter with respect to the
portion of the Option Property being acquired at such Closing and the remaining
portion of the Option Property not yet acquired by Buyer pursuant to this
Agreement, as though such representations and warranties were made at such time.
If Seller acquires knowledge of any fact(s) rendering any of the foregoing
representations and warranties false at any time prior to any Closing with
respect to that portion of the Option Property not yet acquired by Buyer, Seller
shall immediately notify Buyer in writing of such fact(s).
16. Buyer's Representations and Warranties. Buyer hereby makes the
--------------------------------------
following representa tions and warranties to Seller, each of which
shall be deemed material:
(a) Buyer is a duly organized limited partnership and is validly existing
and in good standing under the laws of the State of South Carolina.
Buyer has the right, power and authority to enter into this Agreement,
to purchase the Property in accordance with the terms and conditions
hereof, and to consummate the other transactions contemplated herein.
This Agreement, when executed and delivered by Buyer, will be a legal,
valid and binding obligation on Buyer enforceable in accordance with
its terms.
(b) There is no litigation or dispute, judgment or execution of any nature
whatsoever pending or, to the best of Buyer's knowledge threatened,
against Buyer which could adversely affect Buyer's ability to enter
into this Agreement and consummate the transactions contemplated
hereby.
(c) Neither the execution, the delivery of this Agreement, nor the
consummation of the transactions provided for in this Agreement will
(i) result in the breach of any of the terms or provisions of, or
constitute a default under any other contract or agreement to which
Buyer is a party or is bound; or (ii) conflict with or violate any
law, rule, regulations, ordinance, order, writ, injunction, judgment,
code or decree applicable to Buyer.
17. Remedies on Default.
-------------------
(a) Buyer's Default. In the event that the terms and conditions of this
---------------
Agreement have been satisfied and Buyer refuses or is unable to
purchase any portion of the Property within the time limits herein set
forth, Seller, as Seller's sole and exclusive remedy, shall be
entitled to declare this Agreement canceled and collect from Buyer as
full liquidated damages the amount of Fifty Thousand and No/100
Dollars ($50,00.00), and the parties hereto shall have no further
rights, obligations or liabilities with respect to each other
hereunder. Seller and Buyer have agreed that the foregoing amount
constitutes a good faith estimate of the damages which Seller would
sustain by virtue of Buyer's default, Seller's actual damages being
difficult, if not impossible, to ascertain. Additionally, with
respect to any performance obligations of Buyer pursuant to this
Agreement other than Buyer's obligation to purchase any portion of
Property, Seller shall be entitled to seek
specific performance
13
by injunction or otherwise of such obligations of Buyer under this
Agreement and seek damages and any other remedies available at law or
in equity, provided that Seller shall in no event have a right to seek
any remedy with respect to Buyer's obligations to purchase any portion
of the Property other than the liquidated damages set forth above.
Notwithstanding the foregoing, Seller shall also have the rights
afforded pursuant to Paragraph 23(e) herein, if applicable.
---------------
(b) Seller's Default. In the event that Seller is unable, after exerting
----------------
reasonable and good faith effort, to convey title to the applicable
portion of Property at each Closing or to otherwise perform pursuant
to the terms of this Agreement, Buyer shall have the right and option,
as Buyer's sole and exclusive remedy, to either (i) immediately
terminate its election as to the applicable portion of the Property
upon written notice to Seller, or (ii) demand and compel by legal
proceedings (including specific performance) full compliance with the
terms of this Agreement, including, without limitation, the immediate
convey ance of the Property, or so much thereof as is applicable, by
Seller, or (iii) with respect to the performance obligations of Seller
pursuant to this Agreement other than those relating to the conveyance
of the Property hereunder, to seek such damages as to which it may be
entitled.
(c) Attorneys' Fees. In the event suit is brought to enforce or interpret
---------------
all or any portion of this Agreement or if suit is brought for
liquidated damages or for any other relief permitted hereunder, the
party, if any, awarded costs in such suit shall be entitled to
recover, as an element of such costs, and not as damages, reasonable
attorneys' fees incurred in connection with such suit. Without
limiting the generality of the foregoing, attorneys' fees shall be
determined at the normal hourly rates charged by the person doing the
work, regardless of whether said fees bear a reasonable relationship
to the relief obtained. A party which is not entitled to recover
costs in any such suit shall not be entitled to recover its attorneys'
fees.
(d) No Waiver. No waiver by any party of any default under this Agreement
---------
shall be effective or binding on such party unless made in writing by
such party, and no such waiver shall be implied from any omission by
such party to take action in respect to such default. No express
written waiver of any default shall affect any other default or cover
any other period of time other than any default and/or period of time
specified in such express waiver. One or more written waivers of any
default under any provision of this Agreement shall not be deemed to
be a waiver of any subsequent default in the performance of the same
or any other provision of this Agreement.
18. Brokerage. Seller and Buyer represent and warrant each to the other
---------
that they have not dealt with any broker in connection with this transaction
except Southern Property Management Inc. ("Broker"). Buyer shall be exclusively
responsible for paying Broker its brokerage commission as set forth in a
separate agreement between Buyer and Broker. Each party agrees to indemnify and
hold the other harmless from and against any and all other claims, demands or
the cost and expense thereof, including reasonable attorneys' fees, arising out
of any other brokerage commission, fee or other compensation due or alleged to
be due in connection with the transaction contemplated by this Agreement based
upon an agreement alleged to have been made or other action alleged to have been
taken by the indemnifying party.
14
19. Survival of Provisions. All covenants, representations, warranties,
----------------------
obligations and agreements set forth in this Agreement shall survive the
Closing.
20. Assignment of Buyer's Interest.
------------------------------
(a) General. Seller and Buyer understand and agree that this Agreement is
-------
personal to Buyer and that, except as otherwise specifically provided
in Paragraph 19(b) herein, Buyer may not, without Seller's prior
---------------
written consent (which consent Seller may withhold or deny in Seller's
sole discretion), assign Buyer's right, title and interest in and to
this Agreement at any time to any party.
(b) Related Entities. Notwithstanding the general prohibition in
----------------
Paragraph 19(a) herein, Buyer shall be entitled, without seeking
---------------
Seller's consent, to assign all of Buyer's right, title and interest
in and to this Agreement to any other entity that is either controlled
by, or under the common control with, Buyer, which assumes all of
Buyer's obligations under this Agreement, and in which Raymond L.
Gellein, Jr. or Jeffrey Adler is a managing officer.
21. Notices. Any notices, requests, or other communications required or
-------
permitted to be given hereunder shall be in writing and shall be either (i)
delivered by hand, (ii) mailed by United States registered mail, return receipt
requested, postage prepaid, (iii) sent by a reputable, national overnight
delivery service (e.g., Federal Express, Airborne, etc.) or (iv) sent by
----
facsimile (with the original being sent by one of the other permitted means or
by regular United States mail) and addressed to each party at the applicable
address set forth herein. Any such notice, request, or other communication
shall be considered given or delivered, as the case may be, on the date of hand
delivery (if delivered by hand), on the third (3rd) day following deposit in the
United States mail (if sent by United States registered mail), on the next
business day following deposit with an overnight delivery service with
instructions to deliver on the next day or on the next business day (if sent by
overnight delivery service), or on the day sent by facsimile (if sent by
facsimile, provided the original is sent by one of the other permitted means as
provided herein in this Paragraph 21 or by regular United States mail).
------------
However, the time period within which a response to any notice or request must
be given, if any, shall commence to run from the date of actual receipt of such
notice, request, or other communication by the addressee thereof. Rejection or
other refusal to accept or inability to deliver because of a changed address of
which no notice was given shall be deemed to be receipt of the notice, request,
or other communication. By giving at least ten (10) days prior written notice
thereof, any party hereto may, from time to time and at any time, change its
mailing address hereunder.
Seller: Myrtle Beach Farms Company, Inc.
------
Founders Centre
2411 Oak Street
Suite 402
Myrtle Beach, South Carolina 29577
Attention: President
Telephone: (803) 448-5123
Facsimile: (803) 448-9838
15
With a copy to: Fennebresque, Clark, Swindell & Hay
--------------
100 North Tryon Street, Suite 2900
Charlotte, North Carolina 28202
Attention: Lee Ann Rooney, Esq.
Telephone: (704) 347-3800
Facsimile: (704) 347-3838
Buyer: Vistana Myrtle Beach, L.P.
-----
8801 Vistana Centre Drive
Orlando, Florida 32821
Attention: Raymond L. Gellein, Jr.
Chairman; and
Susan Werth, Esq.
Senior Vice President - Law
Telephone: (407) 239-3009
Facsimile: (407) 239-3198
With a copy to: Kennedy Covington Lobdell & Hickman, L.L.P.
100 North Tryon Street, Suite 4200
Charlotte, North Carolina 28202
Attention: E. Allen Prichard, Esq.
Telephone: (704) 331-7497
Facsimile: (704) 331-7598
22. Miscellaneous.
-------------
(a) The term "Effective Date," as used in this Agreement, shall be deemed
to refer to the date a fully executed original of this Agreement is
delivered to each party hereto, and the Effective Date shall be
inserted as the date of this Agreement in the introductory para graph
of this Agreement.
(b) This Agreement constitutes the entire agreement between the parties
hereto with respect to the transaction contemplated herein; and it is
understood and agreed that there are no oral or written agreements
between the parties, nor any representations made by either party
relative to the subject matter hereof, which are not expressly set
forth herein. This Agreement may not be changed orally, but only by
an agreement in writing signed by both Buyer and Seller; and no waiver
of any of the provisions in this Agreement shall be valid unless in
writing and signed by the party against whom such waiver is sought to
be enforced.
16
(c) The provisions of this Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective heirs
and permitted successors and assigns, as may be applicable.
(d) If the final day of any period of time set out in any provision of
this Agreement, falls on a Saturday, Sunday or holiday recognized by
national banks in South Carolina, then in such case, such period shall
be deemed extended to the next day which is not a Saturday, Sunday or
holiday recognized by national banks in South Carolina or in Orlando,
Florida ("Business Day").
(e) No presumption shall be created in favor of or against Seller or Buyer
with respect to the interpretation of any term or provision of this
Agreement due to the fact that this Agreement was prepared by or on
behalf of one of said parties.
(f) Words of any gender used in this Agreement shall be held and construed
to include any other gender, and words in the singular number shall be
held to include the plural and vice versa, unless the context requires
otherwise.
(g) The captions used in connection with the paragraphs of this Agreement
are for reference and convenience only and shall not be deemed to
construe or limit the meaning of the language contained in this
Agreement or be used in interpreting the terms and provisions of this
Agreement.
(h) This Agreement may be executed in two or more counterparts and shall
be deemed to have become effective when and only when one or more of
such counterparts shall have been signed by or on behalf of each of
the parties hereto (although it shall not be necessary that any single
counterpart be signed by or on behalf of each of the parties hereto,
and all such counterparts shall be deemed to constitute but one and
the same instrument), and shall have been delivered by each of the
parties to the other.
(i) When anything is described or referred to in this Agreement in general
terms and one or more examples or components of what has been
described or referred to generally is associated with that description
(whether or not following the word "including"), the examples or
components shall be deemed illustrative only and shall not be
construed as limiting the generality of the description or reference
in any way.
(j) If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, such provision shall be
fully severable; this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a
part of this Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the
illegal, invalid or unen forceable provision or by its severance from
this Agreement. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and be legal,
valid or enforceable.
(k) This Agreement is intended to be performed in the State of South
Carolina and shall be
17
construed and enforced in accordance with the laws of said State. The
parties agree to waive any objections to venue and to submit to the
exclusive jurisdiction of the federal and state courts in Horry
County, South Carolina.
(l) This Agreement shall not be recorded or placed of public record under
any circumstances, except with the prior written consent of Seller and
Buyer, subject to the Memorandum described in Paragraph 13(i).
---------------
(m) This Agreement shall not be deemed, held or construed as creating a
partnership or joint venture or any other business relationship, other
than that of seller and buyer, among the parties hereto.
(n) With respect to any notice and cure periods provided for under this
Agreement, time shall be of the essence with respect to the
performance of any such cure within the applicable period.
23. Development Timetables.
----------------------
(a) Approval. Within one hundred twenty (120) days after a Closing on any
--------
portion of the Property, Buyer shall submit to Seller copies of the plans and
specifications (the "Plans") which Buyer intends to submit to the applicable
governmental authorities in connection with the issuance of required permits for
the initial development thereof. Seller shall have thirty (30) days from the
date of receipt to review and approve the Plans and such approval shall not be
unreasonably withheld or delayed, but may be based upon purely aesthetic grounds
determined in the reasonable discretion of Seller. Seller agrees to make good
faith efforts to review, comment and object or approve the Plans as expediently
as possible during the thirty (30) day period. The Seller shall specify any
objections to the Plans in written detail prior to the expiration of said thirty
(30) day period. If no such written objections are received by Buyer prior to
the expiration of said period, the Plans shall be deemed approved as submitted.
After approval, no material changes to such plans shall be made without the
prior written approval of Seller consistent with this Paragraph. In the event
of a dispute pursuant to this Paragraph 23, Buyer and Seller agree that such
------------
dispute shall be submitted to binding arbitration at the office of the American
Arbitration Association most proximate to Myrtle Beach, South Carolina,
conducted in accordance with the standard procedures established by the American
Arbitration Association, and the determination of the arbitrator shall be
binding. The cost of said arbitration shall be paid by Buyer and Seller
equally.
(b) Permits. Within nine (9) months after approval of the Plans by
-------
Seller, Buyer shall submit Plans to the applicable governmental authorities and
seek issuance of the permit(s) required by the applicable governmental
authorities for the development of the improvements shown in the Plans. Buyer's
obligations under this subparagraph (b) shall be subject to delays resulting
from Force Majeure (as hereinafter defined). "Force Majeure" shall mean
governmental orders, delays in obtaining governmental permits and approvals,
labor and materials shortages, war, acts of God, or labor strikes, inclement
weather or other causes beyond the control of the person obligated to perform,
whether Buyer or Seller as the case may be.
(c) Completion. Upon issuance of the permit(s) required to commence
----------
development of the improvements shown in the Plans, Buyer shall thereafter
substantially complete construction of said improvements shown in the Plans
within eighteen (18) months following the issuance of the first such
18
permit. Buyer's obligations under this subparagraph (c) shall be subject to
delays resulting from Force Majeure.
(d) Remedies. If Buyer shall fail to satisfy the time periods set forth
--------
in subparagraphs (a), (b) or (c) above, then in any such event Seller may elect,
after providing Buyer notice of such default and a reasonable period of time
thereafter in which to cure same, to terminate Buyer's option rights under this
Agreement with respect to all remaining Option Property by written notice to
Buyer.
(e) Right to Repurchase. If Buyer shall be in default of its obligations
-------------------
under subparagraphs (a) and (b) above beyond applicable notice and cure periods,
Seller shall have the option, but not the obligation, to reacquire that portion
of the Property to which such default by Buyer relates. Seller shall exercise
its repurchase option hereunder within fifteen (15) days after the expiration of
the applicable notice and cure period with respect to such default by providing
written notice to Buyer of its election. If no such notice is received within
fifteen (15) days following the expiration of the applicable notice and cure
period, Seller's right to repurchase the applicable portion of the Property
shall automatically terminate. If Seller shall exercise its option to
repurchase the applicable portion of the Property as provided herein, the Seller
shall reacquire such portion of the Property within sixty (60) days following
its election, subject to Force Majeure, for an amount equal to the Purchase
Price paid by Buyer for such portion of the Property under this Agreement and
the Buyer shall be obligated to reconvey such portion of the Property.
Notwithstanding the foregoing, Seller's option to repurchase any portion of the
Property shall automatically terminate upon issuance by the applicable
governmental authorities of the first permit required for the commencement of
construction of improvements on such portion of the Property. The terms of
subparagraphs (a), (b) and (e) of this Paragraph 23 shall be included in each
------------
Deed.
24. Final Plan and Specification Approval. Not later than thirty (30)
-------------------------------------
days prior to the start of construction of any improvements in addition to those
improvements approved by Seller pursuant to Paragraph 23 herein, Buyer shall
------------
cause to be prepared and delivered to Seller for Seller's prior approval a copy
of the plans for any such additional construction which Buyer has submitted or
intends to submit to governmental authorities in order to have permits issued.
Such approval shall not be unreasonably denied, withheld or delayed but may be
based upon purely aesthetic grounds determined in the reasonable discretion of
Seller. If Seller has not responded to Buyer within thirty (30) days after
submission of any such plans under this Paragraph, such plans shall be deemed
approved by Seller. The provisions of this Paragraph shall survive the
termination of this Agreement. After approval of such plans, Buyer shall make
no material changes thereto without Seller's prior written approval thereof in
accordance with this Paragraph 24. In the event of a dispute between Buyer and
------------
Seller under this Paragraph 24, Buyer and Seller agree that such dispute shall
------------
be submitted to binding arbitration in accordance with the standard procedures
established by the American Arbitration Association of its office most proximate
to Myrtle Beach, South Carolina, and the determination of the arbitrator shall
be binding upon Buyer and Seller. The cost of said arbitration shall be paid by
Buyer and Seller equally. The terms of this Paragraph 24 shall be included in
------------
each Deed.
25. No Liability for Plan Review and Approval. Seller shall not be
-----------------------------------------
responsible or liable in any way for any defects in any plans approved by Seller
pursuant to this Agreement, nor for any structural defects in any work done
according to such plans approved by Seller. In submitting plans to Seller for
approval, Buyer agrees that it will not bring any action against Seller to
recover any such damage. Approval of any such plans by Seller shall not
constitute assumption of responsibility for the accuracy, sufficiency or
propriety thereof, nor shall any such approval constitute a representation or
warranty that
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the plans comply with applicable laws. No approval of plans shall ever be
construed as representing or implying that such plans will, if followed, result
in properly designed units. Seller shall not be responsible or liable for any
defects in any plans submitted, revised or approved under this Agreement, nor
for any defects in construction pursuant to such plans. Buyer shall have sole
responsibility for compliance with approved plans and does hereby agree, by
acceptance of title to any portion of the Property, to hold Seller harmless for
any failure thereof caused by Buyer or its builder. Buyer shall be responsible
for the costs of any and all improvements on the Property and shall hold Seller
harmless from and against all claims arising by reason of the construction
thereof, expressly including, but without limiting the generality thereof,
mechanics' liens or public liability. The terms of this Paragraph 25 shall be
------------
included in each Deed.
26. Right of First Offer. At such time as Buyer should desire to sell its
--------------------
real property interest in the portions of the Property previously acquired by
Buyer (expressly excluding the sale to the public of time-share or condominium
interests) (the "Buyer Real Property"), then prior to marketing its rights in
the Buyer Real Property to any third party, Buyer shall notify Seller in writing
of the Buyer's intention to market its interest in the Buyer Real Property.
Buyer agrees to negotiate exclusively with Seller the terms and conditions under
which Seller would acquire all of Buyer's rights in the Buyer Real Property
within the period set forth below. If Buyer and Seller are unable to agree upon
a purchase price, Buyer and Seller may appoint a mutually acceptable appraiser
to perform an appraisal of such property owned by Buyer, which appraised amount
shall be the purchase price for purposes of this Paragraph. If Buyer and
Seller are unable to agree upon a mutually acceptable appraiser, then Seller and
Buyer shall each select their own appraiser, which two appraisers shall select a
third appraiser, and the average appraised amount from the three appraisals
shall be the purchase price for purposes of this Paragraph. Such negotiation
and appraisal process shall be limited to ninety (90) days following Buyer's
notice to Seller of its intention to market its interest in the Buyer Real
Property, subject to Force Majeure. Notwithstanding the foregoing, if the Buyer
Real Property secures indebtedness of Buyer incurred in connection with the
acquisition and development thereof, Buyer and Seller agree that the minimum
purchase price for purposes of this Paragraph must be the amount necessary to
fully pay off the outstanding amount of such indebtedness together with the
customary costs and charges of the sale pursuant to this Paragraph. Seller
shall have the right, but not the obligation, to elect to purchase the Buyer
Real Property at the purchase price determined pursuant to this Paragraph by
written notice to Buyer within the above-stated 90-day period, subject to Force
Majeure. If Seller shall not elect to purchase Buyer's interest in the Buyer
Real Property within said period, then thereafter Buyer may market, negotiate
and sell its interest in the Buyer Real Property to any other party and on any
terms which Buyer may deem appropriate; provided, however, Buyer shall not sell
the Buyer Real Property at a price less than that established pursuant to this
Paragraph unless Buyer first offers the Buyer Real Property to Seller at such
lesser price. Buyer agrees that any sale of the Buyer Real Property shall not
include Buyer's option rights to any unacquired portion of the Option Property
pursuant to this Agreement, the assignment of which rights is governed by
Paragraph 20 herein. Seller agrees that the provisions of this Paragraph 26
- ------------ ------------
shall be subordinated to the lien of any loan secured by the Buyer Real
Property, and Seller shall execute any commercially reasonable document
requested by a lender of Buyer to evidence such subordination. The provisions
of this Paragraph 26 shall survive the termination of this Agreement.
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27. Provisions Relating to Proposed Extension of 33rd Avenue North.
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(a) Construction of the Extension. Buyer and Seller acknowledge that an
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extension of 33rd Avenue North (the "Extension") is proposed across Seller's
adjoining property which would extend from
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the westerly margin of the drainage ditch which is contiguous to the western
boundary of the Property to the right-of-way of Highway 17 Bypass, which would
end near the westerly boundary of the Property as shown on EXHIBIT A attached
hereto and incorporated herein by reference. In the event that either Buyer or
Seller shall determine that the development of their respective properties makes
it necessary or advantageous to construct the Extension, such party (the
"Constructing Party") shall notify the other in writing and immediately
thereafter Buyer and Seller shall engage a mutually acceptable traffic engineer
to perform a traffic study for the purpose of determining the projected usage of
the Extension by Buyer and Seller and their respective affiliates. The projected
usage analysis shall be based upon estimated external and internal trip
generation, traffic counts and other recognized standards of traffic study for
the projected development of the benefitted properties of Buyer, Seller and
their respective affiliates. Buyer and Seller agree that the Constructing Party
shall receive reimbursement of the costs of construction thereof from the other
party in proportion to the projected usage and impact attributable to the
respective properties of the other party and its affiliates. The Constructing
Party shall, prior to commencement thereof, submit plans and specifications and
a construction budget to the other party for review and approval, not to be
unreasonably withheld, denied or delayed, and shall generally follow the
procedure set forth in Paragraph 24 herein. The Constructing Party shall be
entitled to the reimbursement described herein within a commercially reasonable
time after completion of construction of the Extension; provided, however, if
Seller is the Constructing Party, Buyer shall have no reimbursement obligation
unless and until Buyer acquires that portion of the Property adjacent to the
Connection Easement (as defined in subparagraph (c) below). If Buyer shall be
the Constructing Party, Seller shall grant to Buyer such easements as may be
reasonably necessary for Buyer, its agents, employees and contractors to
construct the Extension.
(b) Maintenance of the Extension. Buyer and Seller acknowledge that the
----------------------------
Extension may be a private road to be maintained by Seller, its successors or
assigns. Buyer hereby agrees to pay its proportionate share of the costs to
maintain and repair the Extension according to the formula described in
subparagraph (a) above; provided, however, either party may request an update of
the analysis described in subparagraph (a) above from time to time, but no more
frequently than once per year, and any change in the analysis shall cause an
adjustment in the respective proportionate shares of maintenance and repair
costs commencing with the next yearly budget. Seller, its successor or assigns,
shall submit to Buyer yearly a budget of the expected costs to maintain and
repair the Extension during the following year. Buyer shall pay monthly to
Seller one-twelfth (1/12) of its proportionate share of such estimated costs.
Before the end of January of each year, Seller shall deliver to Buyer a
statement of actual costs of maintaining and repairing the Extension during the
prior calendar year. If Buyer has overpaid, Seller shall remit such overpayment
together with the statement; if Buyer has underpaid, Buyer shall remit the
additional payment within thirty (30) days of receipt of such statement.
Notwithstanding anything in this subparagraph (b) to the contrary, Buyer shall
have no reimbursement obligation unless and until Buyer acquires that portion of
the Property adjacent to the Connection Easement (as defined in subparagraph (c)
below).
(c) Connection Easement. Subject to the limitations in subparagraph (e)
-------------------
below, Seller hereby agrees to grant to Buyer, for the exclusive benefit of any
portion of the Property acquired by Buyer hereunder, a perpetual easement from
the westerly boundary of the Property to the easterly terminus of the Extension
(the "Connection Easement") for access, ingress and egress over the drainage
ditch running along the western boundary of the Property for access to the
Extension. Seller shall be obligated to grant the Connection Easement to Buyer
upon the date Buyer acquires that portion of the Option Property abutting the
Connection Easement. Buyer shall have the right to specifically enforce
Seller's obligations
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under this Paragraph 27(c). Buyer may construct within the Connection Easement,
at its sole cost and expense, a bridge over the drainage ditch and all necessary
roadway improvements to provide direct access from the Property to the
Extension. Seller shall have the right to review and approve the plans and
specifications for the improvements to be constructed within the Connection
Easement pursuant to the procedures set forth in Paragraph 24 herein. Buyer
shall be responsible for all costs to maintain the Connection Easement and any
improvements thereto and such obligation shall be transferred to any property
owners association at such time as Buyer transfers control its development to
such association.
(d) Extension Easement. Contemporaneously with the granting of the
------------------
Connection Easement, but subject to the limitations in subparagraph (e) below,
Seller shall be obligated to grant to Buyer, for the non-exclusive benefit of
any portion of the Property acquired by Buyer hereunder, a perpetual easement
for access, ingress and egress by vehicular and pedestrian traffic over the
Extension (the "Extension Easement"). The Extension Easement shall extend from
the easterly terminus of the Connection Easement to the right-of-way of Highway
17 Bypass. Buyer shall have the right to specifically enforce Seller's
obligations under this Paragraph 27(d).
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(e) Limitation on Easements. Buyer hereby agrees and covenants that the
-----------------------
primary beneficiaries of the Buyer's usage of the Connection Easement and the
Extension Easement (collectively, the "Easements") must be transient occupants
of the improvements constructed on the Property ("Qualified Users"), including
owners or renters of Units, hotel guests, invitees and all other persons
occupying the Property other than those persons who would own or rent a Unit as
their primary residence; provided, however, that Seller acknowledges that there
may be incidental use of the Easements by persons other than Qualified Users.
Buyer acknowledges that it shall be Buyer's obligation to construct its
development in such a fashion, or otherwise supervise the use of the Easements
by the occupants of the Property, so that the primary users of the Easements are
Qualified Users. To the extent that the use of the Easements by persons other
than Qualified Users shall be more than incidental, Seller shall notify Buyer of
same and Buyer shall have sixty (60) days to institute corrective measures to
comply with the requirements of this subparagraph. If such corrective measures
are not taken, Seller may notify Buyer of termination of its rights to use and
enjoyment of the Easements.
(f) Dedication of Extension. Seller, its successors and assigns, shall
-----------------------
have the sole right to dedicate, in its sole discretion, the Extension to the
public for maintenance by the applicable governmental authorities, and Seller
shall be solely responsible for the costs of construction, if any, necessary to
have the Extension accepted by said governmental authorities. Upon acceptance
of the Extension for maintenance by such governmental authorities, the Extension
Easement granted pursuant to subparagraph (d) above, Buyer's maintenance
reimbursement obligations pursuant to subparagraph (b) above, and the
restrictions on use in subparagraph (e) above shall automatically terminate.
28. Construction of Water and Sewer Facilities. In the event Buyer
------------------------------------------
constructs sewer facilities on portions of the Property acquired by Buyer from
time to time, Buyer shall be obligated to construct such facilities (including
pipe size and basin depth) to accommodate the development of the adjacent
properties owned by Seller, consisting of the 14.01-acre tract to the south of
the Property and the 37.06-acre tract to the north of the Property, as shown on
a map prepared by Associated Land Surveyors dated July 9, 1996. Accordingly,
prior to the design and construction of such facilities on portions of the
Property acquired by Buyer, Buyer shall submit plans for said facilities to
Seller for Seller's prior approval consistent with the procedure set forth in
Paragraph 24 herein. Provided, further, that Buyer shall be under no obligation
- ------------
to incur expense in order to afford a connection to facilities which Buyer
designs and constructs except for
22
a connection to serve Seller's contiguous property located to the south of the
Initial Purchase.
29. Restriction on Buyer's Property. Buyer hereby agrees that each Deed
-------------------------------
to any portion of the Option Property acquired by Buyer pursuant to this
Agreement shall contain the same restrictions, covenants and conditions as
contained in the Deed delivered at the Initial Closing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by persons duly empowered to bind the parties to perform their
respective obligations hereunder the day and year first above written.
"BUYER"
VISTANA MYRTLE BEACH, L.P.
By: Vistana MB, Inc., its sole general partner
By: /s/ Raymond L. Gellein, Jr.
--------------------------------------
Raymond L. Gellein, Jr.
Chairman and CEO
"SELLER"
MYRTLE BEACH FARMS COMPANY, INC.
ATTEST:
/s/ Franklin J. Long By:/s/ Douglas P. Wendel
- ----------------------------- ---------------------------------------
Franklin J. Long, Secretary Douglas P. Wendel
President and CEO
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