Exhibit 10.1
PURCHASE AGREEMENT
Spanish Trails (finished lots)
THIS PURCHASE AGREEMENT (the "Contract"), is made and entered into by
and between Spanish Trails, LLC, a New Mexico limited liability company,
("Seller"), and DR Horton, Inc., a Delaware corporation, ("Purchaser"),
collectively the "Parties".
I. SALE AND PURCHASE OF PROPERTY.
1.01 AGREEMENT OF SALE AND PURCHASE.
For and in consideration of the sum of *** and of the premises,
undertakings, and mutual covenants of the Parties set forth herein, Seller
hereby agrees to sell and convey unto Purchaser, and Purchaser hereby agrees to
purchase and take from Seller, approximately *** fully developed single-family
lots ( the "Lots" ), with such dimensions as shown on the Replat (hereinafter
defined) approved by Purchaser as provided in Paragraph 2.04 hereof, situated in
the first phase of the Spanish Trails master planned community located in Belen
(the "City"), Valencia County (the "County"), New Mexico, together with all
improvements thereon and all rights and appurtenances pertaining thereto,
including, but not limited to, all right, title, and interest of Seller in and
to adjacent streets, alleys, easements, and rights-of-way (all of such real
property, rights, and appurtenances being hereinafter referred to collectively
as the "Property"). The Lots *** Subdivision as more particularly depicted on
Exhibit A-1 hereto. The precise legal description and acreage of the Property
will be set forth in the Survey to be ordered by Purchaser pursuant to the terms
of this Agreement and will be attached hereto as Exhibit A-2 and made a part
hereof.
1.02 PURCHASE PRICE.
Seller shall sell, and Purchaser shall purchase the Lots based upon a per
Lot price of *** (the "Purchase Price") for an estimated total of ***. The
Purchase Price will be adjusted as needed if the number of lots changes. It is
understood and agreed that the Purchase Price includes not only the price of the
land but the cost to develop the Lots as single family residential lots to the
point of being eligible for issuance of a building permit and so they otherwise
meet all of the requirements of Substantial Completion defined in Section VII
hereof.
1.03 EARNEST MONEY.
In consideration for the right to purchase the Lots granted herein by
Seller to Purchaser, the Purchaser shall, within fourteen (14) days from the
full execution of this Contract by both parties, including Purchaser's Corporate
Approval (as defined in Section XX (p) below), deposit with *** (the "Title
Company") the sum of *** in cash (the "Earnest Money Deposit"). The Title
Company shall deposit the Earnest Money into a federally insured interest
bearing account. If this Contract is terminated prior to the Closing, the
Earnest Money, together with all interest earned thereon, shall be delivered to
Seller or returned to Purchaser by the Title Company, in accordance with the
applicable termination provision as elsewhere provided herein. At the Closing
the Earnest Money shall be applied by the Title Company as a credit to the
Purchase Price on behalf of Purchaser. Interest on the Earnest .Money shall be
credited and paid to party that receives it (Seller at closing, Purchaser at
refund).
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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If Purchaser fails to deposit the Earnest Money as required herein, and
such failure continues for a period of ten (10) days after written notice from
Seller, then either party may terminate this Contract by written notice to the
other at any time prior to the deposit of the Earnest Money. If this Contract is
so terminated, this Contract shall be deemed to have terminated as of the date
that the Earnest Money was originally to have been deposited by Purchaser, and
there shall be no remedy hereunder to either Seller or Purchaser other than the
termination of this Contract.
II. CONTINGENCIES.
The obligation of Purchaser to purchase the Lots is subject to the
satisfaction of the following conditions in the time frames noted below. If any
one of these contingencies is not timely met this Contract shall, at the sole
option of Purchaser, terminate. In the event of such termination, the Earnest
Money, plus any interest earned thereon, will be promptly returned to Purchaser,
and the Parties shall have no further obligation to each other.
2.01 TITLE & TITLE COMMITMENT
Within ten (10) days from the full execution of this Contract by Seller and
Purchaser's representatives, excluding Corporate Approval, Seller will furnish
to Purchaser a title commitment for an ALTA Owner's Title Policy with standard
exceptions 1 through 6, the deletable portion of 7, deleted (the "Title
Commitment") covering all of the Property and the Lots to be purchased by this
Contract in an amount equal to the total Purchase Price, issued by the Title
Company together with certified copies of all instruments reflected as
exceptions therein, including, but not limited to, any easements, restrictions,
reservations, terms, covenants, or conditions which may be applicable to or
enforceable against any of the Lots. The Title Commitment will show that the
Property is subject to the Permitted Encumbrances (as hereinafter defined).
Purchaser shall have *** (the "Review Period") after receipt of the Title
Commitment in which to examine same and notify Seller in writing of objection to
same. Upon the expiration of said *** day period, Purchaser shall be deemed to
have accepted all exceptions to title to the Property as shown on the Title
Commitment, except for matters for which notification permitted herein has been
given by Purchaser and except for the fact that Seller may not yet hold title to
the Property. Seller represents and warrants that it shall be the owner of good
and marketable fee simply title to the Property prior to the end of the
Feasibility Period, and Purchaser need not object to the initial Title
Commitment showing an entity other than Seller being in title. In the event of
notification to Seller of objections by Purchaser, Seller may undertake to
eliminate or modify such objectionable items to the reasonable satisfaction of
Purchaser within ***, (the "Cure Period") after receipt of such notice of
objections. In the event Seller has not cured, or chooses not to cure,
objections of Purchaser within the Cure Period, Purchaser may, at its option,
and as Purchaser's sole remedy, terminate this Contract by written notice to
Seller at any time subsequent to the Cure Period. In such event, in addition to
returning monies to Purchaser as required herein, Seller shall pay all costs,
fees, and expenses payable to the Title Company, and neither party shall
thereafter have any further duties, rights or obligations hereunder. Any
exceptions accepted by Purchaser or not timely objected to as aforesaid shall be
hereafter collectively referred to as "Permitted Encumbrances". Possession shall
be delivered at Closing free and clear of all matters except the Permitted
Encumbrances.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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2.02 FEASIBILITY
(a) Purchaser shall have a period of up to *** days after the
effective date of this Contract to inspect the Property and perform all
necessary due diligence deemed necessary by Purchaser regarding the
Property and its purchase of the Property ("Feasibility Period"). Within
the Feasibility Period, if Purchaser in its sole judgment and discretion
determines that the Property is suitable to Purchaser, Purchaser shall
notify Seller in writing of Purchaser's intention to close the purchase of
the Lots. Notwithstanding anything contained herein to the contrary, the
written notice of Purchaser's intent to purchase the Lots ("Notice of
Suitability"), and any Supplemental Notice of Suitability as described in
Section 2.03 below, shall not be effective unless signed by one of the
officers of Purchaser named in Article XX (p) herein. If Purchaser fails to
send Seller a Notice of Suitability on or before the last day of said ***
period or, if applicable, a Supplemental Notice of Suitability as described
in Section 2.03, and such failure continues for a period of ten (10) days
after written notice from Seller, this Contract shall automatically
terminate and the Earnest Money will be returned to Purchaser.
(b) Seller represents that it is in possession of the Property and can
and will provide Purchaser and its consultants reasonable access to the
Property during the Feasibility Period to conduct such tests and studies as
Purchaser deems appropriate, provided that in no event (i) shall such tests
or studies disrupt or disturb the ongoing operation of Seller's overall
development of Spanish Trails adjacent to the Property, or (ii) shall
Purchaser or its agents or representatives drill or bore on or through the
surface of the Property without Seller's prior written consent, which
consent shall not be unreasonably withheld. After making such tests and
studies, Purchaser agrees promptly to restore the Property to its condition
prior to such tests and studies. Purchaser agrees to indemnify and hold
harmless the Seller from and against any mechanics or other liens or claims
that may be filed or asserted against the Property or Seller by anyone
performing any such work on Purchaser's behalf. Seller shall not be liable
nor responsible for personal injury or property damage caused or occasioned
by such tests and studies, and Purchaser shall indemnify and save Seller
harmless from any loss, damage or claim resulting therefrom, irrespective
of the termination of this Agreement.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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2.03 DISCLOSURES.
Seller agrees to provide copies of all existing soils studies, rock and/or
basalt studies, environmental assessments, recommendations regarding
geotechnical and environmental conditions, and evidence of compliance therewith,
and a copy of the current grading and drainage plan (if any) within seven (7)
days of the execution of this Contract by Seller and Purchaser's
representatives, excluding Corporate Approval. Seller shall provide Purchaser
with any new studies, assessments, recommendations and plans as they become
available. To the extent Seller provides Purchaser with any such new disclosure
document(s), Purchaser shall have the remainder of the Feasibility Period, or
fourteen (14) days after receipt of any such new disclosure document(s),
whichever is later, to determine, in its sole judgment and discretion whether
such new disclosure document(s) affect(s) the suitability of the Lots. If a
Notice of Suitability has already been sent, Purchaser shall provide Seller with
a supplemental notice ("Supplemental Notice of Suitability") of Purchaser's
continued intent to close the Purchase of the Lots, within fourteen (14) days of
receipt of any such new disclosure document(s). All such disclosure documents
shall remain the property of Seller until Closing. To comply with this Section
2.03, Seller may place the foregoing disclosure documents in a folder designated
specifically for Purchaser's use on Seller's ***, and Seller shall provide
Purchaser with access instructions to such folder. If this transaction does not
close for any reason, Purchaser's access rights to the *** shall be terminated
and Purchaser shall return to Seller all copies of such disclosure documents.
2.04 PLATS, INFRASTRUCTURE AGREEMENTS AND GUARANTEES.
Seller intends to file a replat (the "Replat") amending the Plat of the ***
Subdivision to change lot lines to create the Lots and to accommodate
Purchaser's home products and shall consult with Purchaser and obtain
Purchaser's approval of the proposed replat prior to submission of the same to
the City of Belen or Valencia County. Seller must obtain City or County approval
for the replat, along with approval of any changes to its infrastructure lists,
and provide copies of the same to Purchaser no later than ***.
2.05 COVENANTS, CONDITIONS AND RESTRICTIONS.
Seller has not yet recorded any covenants, conditions or restrictions (the
"CCRs") against the Property and will not do so without prior review and
reasonable approval of the same by Purchaser. Seller shall provide Purchaser
with drafts thereof within ten (10) business days of the full execution of this
Contract by Seller and Purchaser's representatives, excluding Corporate
Approval, and the parties shall reach agreement with respect thereto prior to
the expiration of the Feasibility Period. If Purchaser has not disapproved the
CCRs proposed by Seller in writing prior to the expiration of the Feasibility
Period, then this contingency shall be deemed to have been satisfied or waived.
2.06 ENVIRONMENTAL ASSESSMENT
Seller will provide to Purchaser *** copies of all Existing Environmental
Reports (as defined in Section 19.02 hereof). Purchaser's obligation to close
any Lot is contingent on Purchaser having obtained the Phase I report required
in paragraph 19.03, which report is satisfactory to Purchaser in its sole
discretion, and there having been no change in any environmental condition from
that described in said report.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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2.07 MORATORIUM.
Purchaser's obligation to close any Lot is contingent on there being no
moratorium as contemplated in Article IX.
2.08 SURVEY.
Purchaser's obligation to close its purchase of Lots is contingent on
Purchaser being provided with an ALTA survey, certified to Purchaser and the
Title Company, showing among other things that no part of any Lot on which it
intends to construct a house is within the Army Corps of Engineers' 100-year
flood plain, as determined by the Federal Insurance Administration. However, if
any Lots have been removed from the 100-year flood plain, then a copy of the
FEMA Letter of Map Revision or the FEMA Final Map Amendment certifying that said
Lots have been removed from the FEMA Map will satisfy this requirement. Further,
if Seller is unable to remove any Lot from the 100-year flood plain within the
period required by Purchaser, then this Contract shall reduce automatically to
the number of Lots not then removed from the FEMA Map. Purchaser shall order the
survey no later than five (5) days after depositing its Earnest Money, but the
Parties shall split the cost thereof 50150 at the Closing. If the transaction
does not close for any Purchaser shall have 15 days from Purchaser has not
disapproved the survey in writing prior to the expiration of the survey
Feasibility Period, then this contingency shall be deemed to have been satisfied
or waived.
2.09 APPROVAL OF PLANS.
Purchaser agrees to submit to Seller, within thirty (30) days of the
execution of this Contract, including Corporate Approval, the plans and
specifications (the "Plans") for each house it intends to build on the Lots.
Seller agrees to not unreasonably withhold or delay its approval thereof. If any
Plans are disapproved, Seller shall specify in writing the modifications that
would be required in order to obtain its approval of the Plans by Seller.
Purchaser shall be under no obligation to close any Lots until Seller has
approved the Plans. After Seller has approved the Plans Purchaser may make minor
modifications thereto without the need to seek further approval from Seller or
from any homeowner's association or architectural control committee that may be
created. In addition to Seller's approval, Seller shall cause its project
engineer to provide Purchaser with a certificate, prior to the end of the
Feasibility Period, confirming that the building pad size is sufficient to allow
Purchaser's Plans to be built on the Lots in accordance with all applicable
zoning , setback and grading requirements.
2.10. GEO TECHNICAL REPORT.
Not later than thirty (30) days after the execution of this Contract,
excluding Corporate Approval, Seller shall provide Purchaser with a geo
technical report by a qualified soils engineer, acceptable to Purchaser (the
"Geo Technical Report"), setting forth the recommended earthwork for Spanish
Trails and setting forth the results of a reputable soils testing laboratory's
test results on the original condition of the soils, based on an appropriate
number of borings, which shall be on a maximum of 200' centers at 20' depths,
and concluding as to soils type and characteristics, plasticity index, and
shrinks well factors, as well as recommendations to achieve soils conditions
suitable for Purchaser's proposed foundation construction including an allowable
bearing capacity of at least 1500 pounds per square foot. Any buried or foreign
materials encountered, including fill, must also be disclosed in said report.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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2.11 CONTINGENCIES TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to close is expressly contingent upon the occurrence,
satisfaction or waiver by Seller of the following (the "Seller Contingencies")
on or before the Closing Date, or any extensions thereof:
a. The approval by applicable governmental authorities and the filing
of the Replat with lot count and layout that matches Purchaser's design and
engineering.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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b. Seller's acquisition of the Property prior to the end of the
Feasibility Period.
III. PROVISIONS WITH RESPECT TO CLOSING.
3.01 CLOSING.
The Title Company shall sign and date this Agreement on the space provided
at the end of this Agreement, indicating that Escrow has been opened as of such
date (the "Opening of Escrow"). The Closing of the purchase and sale of the Lots
shall take place on a date mutually agreeable to Purchaser and Seller that is no
later than *** , (the "Closing Date" or the "Close of Escrow"), provided all
contingencies and conditions precedent to closing have been met and provided
further that the Closing Date must occur on a Tuesday, Wednesday, or Thursday (a
"Permitted Closing Day"). If the foregoing Closing Date would otherwise occur on
a day that is not a Permitted Closing Day, the Closing Date shall be extended
automatically to the next day that is a Permitted Closing Day. The Closing shall
take place in the offices of the Title Company on a Permitted Closing Day.
Provided the Seller is proceeding with reasonable diligence and in good faith to
obtain approval of the Replat of the Property, the Closing shall be extended to
a date which is *** days after governmental approval of the Replat. However, if
the Replat has not been approved by ***, then either party may terminate this
Contract by written notice to the other.
3.02 SELLER'S OBLIGATIONS AT CLOSINGS.
At Closing, Seller shall do the following:
(a) Execute and deliver to Purchaser a general warranty deed, duly
executed and acknowledged, conveying to Purchaser good and marketable fee
simple title to all of the Lots, free and clear of all liens, claims, and
encumbrances except the Permitted Encumbrances in accordance with Article
II hereunder;
(b) Deliver evidence that all ad valorem or other taxes for the Lots
have been paid for the years prior to the year of the Closing, and pay or
escrow with the Title Company all taxes for the Lots for the current year
up to the date of Closing;
(c) Deliver possession of the Property to Purchaser;
(d) Pay Seller's closing costs as hereinafter specified;
(e) Cause to be secured from Seller's lender, or other holder of any
note or lien on said Lots, a properly executed and recordable release or
partial release of lien for execution and delivery simultaneously with the
deed of the Lots to Purchaser, or as soon thereafter as is reasonably
possible;
(f) Cause to be delivered to Purchaser a certification from a
registered surveyor that iron pins have been staked by a registered
surveyor and are visible at each Lot corner; and
(g) Cause the Title Company to issue and advise Purchaser that it has
issued an owner's fee policy of title insurance in the form contemplated
herein, with standard exceptions 1 through 6, and the deletable portion of
7 deleted, in the amount of the Purchase Price for the Lots , insuring fee
simple, good and marketable title to such Lots and right of access thereto
in Purchaser, containing no exception other than the Permitted
Encumbrances, and specifically with standard exceptions 1 through 6, and
the deletable portion of 7 deleted, and without exception for rights of
parties in possession, visible and apparent easements and portions of the
Property lying within public or private roads.
3.03 PURCHASER'S OBLIGATIONS AT CLOSING.
At the Closing, Purchaser shall:
(a) pay to Seller the Purchase Price in cash for the Lots;
(b) provide evidence of Purchaser's authority to consummate this
transaction; and
(c) deliver any customary certificates and affidavits that may be
required in the normal course by Title Company, in form and substance
satisfactory to Title Company, duly executed by Purchaser;
3.04 CLOSING COSTS.
Seller shall pay the following costs and expenses in connection with the
Closing:
(a) Seller's portion of the prorated taxes and fees (as provided
below);
(b) Seller's own attorney's fees;
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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(c) *** the cost of the ALTA survey
(d) The cost of a tax search fee charged by the Title Company, if any;
(e) One half (1/2) the cost of any Title Company escrow fee;
(f) All other incidental costs and fees not expressly provided for
herein shall be paid for by Seller; and
(g) The base premium for the standard owner's title insurance policy
in the form contemplated herein.
Purchaser shall pay the following costs and expenses in connection with
each Closing:
(a) Purchaser's own attorney's fees;
(b) Purchaser's portion of the prorated taxes and fees (as provided
below);
(c) The cost of recording the special warranty deed(s); and
(d) One-half (112) the cost of any Title Company escrow fee.
(e) The premiums for any endorsements specifically requested by
Purchaser and any cost associated with the deletion of standard exceptions.
3.05 PRORATION OF TAXES.
Current ad valorem taxes shall be prorated on each Lot as of the date of
the Closing. If the Lots are taxed as a part of a larger parcel, Seller shall,
at closing, deposit in escrow with the Title Company sufficient funds to pay all
of the taxes for the current period on the larger tax parcel. If such is the
case, Purchaser's pro-rata share of the taxes shall be placed in such escrow.
3.06 UTlLlTY EXPANSION AND WATER CONNECTION CHARGES.
*** the New Mexico Water Services Company to reserve the availability of
water and sanitary sewer to each Lot which is the subject of this Agreement.
Seller will provide Purchaser with evidence of the Utility Reservation Payment,
and written confirmation from the City and/or County, as applicable,
acknowledging that said *** so that when Purchaser goes to get building permits
it will not be asked to pay such charges again. Said evidence and confirmation
shall be provided to Purchaser within five (5) days after such the Utility
Reservation Payment is made. At the Closing, Purchaser shall reimburse Seller
for the actual cost of the Utility Reservation Payment made by Seller for the
Lots being closed.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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IV. SUBDIVISION IMPROVEMENTS.
4.01 SELLER'S OBLIGATIONS.
(a) Seller shall *** based on lot layouts and designs reasonably
approved by Purchaser within the times and in the manner provided for in
this Contract.
(b) Within *** days of the execution of this Contract, excluding
Corporate Approval, Seller shall provide Purchaser with a specific
landscape design for the subdivision within which the Property is located
and designs for all entryway improvements, signage and amenities. The
parties will have the Feasibility Period within which to come to an
agreement regarding the same. The agreed upon designs shall be implemented
by Seller at its sole expense.
(c) Seller shall develop the Lots as more specifically set forth in
Section VII below.
(d) Seller agrees to keep all Lots not Closed by Purchaser, if any, as
well as the entryway into and the street rights-of-way along, and all other
portions of the Subdivision, in a neat, clean, and orderly manner, all at
Seller's expense and will observe all laws, ordinances, regulations and
restrictions affecting the Property.
(e) Seller agrees not to create or incur any mortgage, lien, pledge or
other encumbrance in any way affecting the Property, except for acquisition
and development loans which will be satisfied on or before the Closing.
4.02 PURCHASER'S SIGNAGE.
Seller hereby grants Purchaser the right to erect a sign or signs, at such
locations on the Property, and of such size and content, as mutually agreed to
by the Parties, in connection with Purchaser's marketing of the Lots and
improvements constructed thereon effective as of the full execution of this
Contract, including Corporate Approval. This signage shall be subject to
Seller's reasonable approval which will not be withheld unreasonably, and by the
appropriate governmental agency.
V. REMEDIES.
5.01 SELLER'S REMEDIES.
In the event that Seller shall fulfill all of Seller's obligations
pursuant to this Contract and, should Purchaser breach any term of this
Contract, Seller shall be entitled, as Seller's sole and exclusive remedy, to
(i) waive the contractual obligations of Purchaser in writing; (ii) extend the
time for performance by such period of time as may be mutually agreed upon in
writing by the Parties hereto; or (iii) terminate this Contract and retain or
receive the Earnest Money and all accrued interest thereon then on deposit as
liquidated damages for such default and not as a penalty, in which event the
Parties shall be released herefrom and have no further rights, obligations, or
responsibilities hereunder. Seller specifically waives any right to specific
performance.
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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5.02 PURCHASER'S REMEDIES.
If Seller defaults in performing Seller's obligations hereunder that are to
be performed prior to Closing, for any reason other than Purchaser's default,
Purchaser shall be entitled, as Purchaser's sole and exclusive remedy, to (i)
waive the contractual obligations of Seller in writing; (ii) extend the time for
performance by such period of time as may be mutually agreed upon in writing by
the Parties hereto; (iii) terminate this Contract and receive a return of the
Earnest Money then on deposit plus damages in the amount of its actual due
diligence costs incurred, or $100,000, whichever is less; or (iv) enforce
specific performance of this contract.
VI. COMMISSION.
6.01 Seller and Purchaser each hereby warrant and represent to the other
that no brokers', agents', finders' fees or commissions, or other similar fees,
are due or arising in connection with the entering into of this Contract, the
sale and purchase of the Property, or the consummation of transactions
contemplated herein; and Seller and Purchaser each hereby agree to indemnify and
hold the other harmless from and against all liability, loss, cost, damage, or
expense (including but not limited to attorneys' fees and costs of litigation)
which the other party shall suffer or incur because of any claim by a broker,
agent, or finder claiming by, through, or under such indemnifying party, whether
or not such claim is meritorious, for any compensation with respect to the
entering into of this Contract, the sale and purchase of the Property, or the
consummation of the transactions contemplated herein.
6.02 Purchaser is hereby notified and acknowledges that Fred M. Montano and
Real Estate Services, Inc. are shareholders of Falcon Ridge Development, Inc.,
which is the sole member of Seller. Fred Montano is manager of Seller, and is a
licensed New Mexico real estate broker, and that through his affiliation with
Seller, he has caused Seller to enter into this transaction with the intent to
generate a monetary gain or profit.
VII. SUBSTANTIAL COMPLETION.
"Substantial Completion", with respect to each of the Lots, is defined to
mean the date that documents evidencing, to Purchaser's reasonable satisfaction,
that each and all of the requirements listed below have been met are delivered
to Purchaser:
(a) The following Final Subdivision *** which have been approved by
Purchaser and by all applicable governmental agencies and recorded in the
official records for the County and/or other municipality or applicable
governmental agency:
1. One (1) mylar of the Final Replat;
2. Two (2) recorded Final Replats;
3. One (I) full-sized copy of the Final Replat;
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***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
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4. Electronic copies of the final plat, in AutoCAD R14 (or newer) format,
conveyed to Purchaser via CD ROM, e-mail or placed on the FTP Site;
and
5. Electronic copies of the Subdivision improvement construction plans,
in AutoCADR14 (or newer) format, conveyed to Purchaser via CD ROM,
e-mail, or placed on the FTP Site and
6. Two (2) copies of the final address map
(b) A set of "As Built" construction plans showing water, sewer, storm
drainage, top of curb elevations at all property line intersects, PC's,
PT's, angle permits and curb returns, pad elevations and utility layouts to
be provided to Seller by Project Engineer.
(c ) The recorded Deed Restrictions/Restrictive Covenants, if any,
which shall be in a form and substance approved by Seller and Purchaser;
(d) The Final Acceptance Letters evidencing that the City, County, or
appropriate governmental agency or utility company has accepted for
permanent operation and maintenance (subject to Seller's one year warranty)
all the streets, water lines, sanitary sewer, and storm sewers for the
Lots:
(e) Written certification to Purchaser, from the Seller's project
engineer, that operable water and sewer taps are available to each of the
Lots;
(f) The Lots shall be cleared both above and below ground of any
trash, debris, brush and other materials, and all easements and
rights-of-way have been graded, seeded and stabilized as may be required by
all applicable governmental authorities.
(g) Written certification to Purchaser from Seller's project engineer
that building permits are obtainable from the appropriate governmental
agencies for the construction of single-family houses on the Lots;
(h) Notwithstanding any other provision of this Contract, Seller shall
not be responsible for any grade or compaction modifications which occur
after the Closing, or for construction of sidewalks or interior privacy
walls. After the Closing, Purchaser shall construct at its own expense all
interior privacy walls and front sidewalks contiguous to Lots (the
"Purchaser Improvements") as required by the Restrictive Covenants or by
any ordinance, or regulation of the City or County, or by any statute,
ordinance or regulation of any other Governmental Authority. If any Lot has
frontage on two interior streets, Purchaser shall construct sidewalks
adjacent to each street. All Purchaser Improvements shall be completed no
later than the issuance by the City or County of a certificate of occupancy
for the dwelling on each respective Lot. Seller may be required to enter
into a Subdivision Improvement Agreement ("SIA) with the City or County to
guaranty construction of the sidewalks. If Purchaser has not completed
construction of the sidewalks adjacent to the Lots by the expiration date
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
11
of the SIA, Purchaser shall extend the SIA as it relates to the Lots, shall
substitute its own financial guarantee to the City or County for the
unfinished work related to the Lots, shall obtain a release of Seller's
financial guarantee related to the Lots, and shall indemnify and save
Seller harmless for the costs related to such work. If Purchaser fails or
refuses to timely construct the sidewalks as provided in this Paragraph
after 30 days written notice from Seller, Seller may, but shall not be
obligated, to construct the sidewalks and may collect the cost thereof from
the Purchaser, including interest at the statutory rate and reasonable
attorneys fees incurred by Seller in enforcing this provision. The
provisions of this Paragraph VII (h) shall survive the Closing.
(i) Written certification to Purchaser, from the Seller's project
engineer, that the Lots are served by permanent underground electricity,
all transformers are set, in accordance with utility approved plans and
specifications;
(j) Written certification to Purchaser, from Seller's project
engineer, that all telephone and cable television improvements are in place
and that all Lots can be served with underground telephone and cable
television service, together with a letter from the telephone and cable
television companies that the Lots will be served with telephone and cable
television service;
(k) A copy of the plans for the underground electric, telephone, cable
tv, and gas distribution system;
(l) Written certification to Purchaser, from a professional
geotechnical engineer, retained by Seller and approved by Purchaser,
indicating that all of the earthwork on all Lots satisfies or exceeds the
requirements of the Geotechnical Report posted on the FTP Site pursuant to
paragraph 2.1 0, and satisfies or exceeds the requirements of the City, and
that the completed lots are suitable to allow the use of floating slabs for
residential units to be constructed thereon. Copies of all compaction test
reports and reports for any other tests administered for the Lots;
(m) Written certification to Purchaser, from Seller's project engineer
a licensed surveyor, that iron pins and have been staked by a professional
surveyor and are visible at adjoining property lines and referenced with a
scribed point or nail in the gutter pan;
(n) Written certification to Purchaser, from Seller's project
engineer, of street lights and street signs, as required by the appropriate
governmental agency;
(o) Written certification to Purchaser, from Seller's project
engineer, of the installation of natural gas service stuff-outs to each
Lot;
(p) Written certification to Purchaser, from Seller's project
engineer, that the Subdivision has been graded in accordance with plans
approved by all governmental authorities with jurisdiction over the
Property and all grading and drainage complies with such plans and all
laws, rules and regulations pertaining thereto and the Lots are graded and
building pads are constructed in accordance with Article XIV hereunder;
(q) Written certification to Purchaser, from Seller's project engineer
that, all of the plans and designs contemplated in Articles IV hereof and
all improvements and work contemplated therein have been completed;
(r) Written certification from Seller's project engineer, that all on
and off-site improvements required by the City have been completed and all
punch list items from the City have been completed;
(s) Seller shall have completed the perimeter, retaining and garden
walls described in the attached wall exhibit, Exhibit D hereto.
(t) Seller shall have completed the landscaping and entry way
improvements, described in Section 4.01 (b).
Upon satisfying all requirements of this Section VII, Seller shall send
written notice to Purchaser. The Substantial Completion Date shall be the date
of Seller's written notice, so long as it is accompanied by written evidence of
completion of each of the above items, and provided that all requirements of
this paragraph have been met to Purchaser's reasonable satisfaction.
Seller shall be diligent and use Seller's good faith efforts to achieve the
Substantial Completion requirements by ***. If Seller materially breaches this
Section VII by failing to materially satisfy any of its requirements by ***,
Purchaser may send written notice to Seller of such breach, which notice shall
set forth with specificity the requirements which Purchaser believes have not
been met, and Seller shall have thirty (30) days after receipt of such notice
within which to cure. If Seller is unable or unwilling to cure, Purchaser shall
have the right in addition to its other remedies set forth in this Contract and
at Purchaser's sole discretion to terminate the Contract or Purchaser may extend
the date for Seller's achievement of Substantial Completion for one or more
periods not exceeding, in the aggregate, ***. If Purchaser chooses to terminate
the Contract (whether at the time Seller is unable or unwilling to cure its
failure to reach Substantial Completion, or after any extension of the
substantial-completion date shall be entitled to the immediate return of
thereon.
VIII. NOTICE AND RIGHT TO CURE.
Each party shall be entitled to written notice of any default and shall
have thirty (30) days from receipt of such notice to cure or begin process to
cure such default prior to the exercise of any remedy provided herein. In the
case of a default by Purchaser, in addition to the persons entitled to notice,
as set forth in Article XVIII, Seller shall send a copy of any default notice to
Purchaser's corporate offices as follows: Ted Harbour, D. R. Horton, Inc., 301
Commerce Street, Suite 500, Fort Worth, Texas 76102 and Bob Coltin, D. R.
Horton, Inc., 7001 N. Scottsdale Road, Suite 2050, Scottsdale, AZ, 85243. Seller
and Purchaser agree to cooperate with each other in any and all attempts by a
defaulting party to cure any default within the default cure period.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
12
IX. MORATORIUM.
If any state, county, city, public school district, or governmental agency
declares or effects any moratorium on the issuance of building permits for the
construction of houses, or Certificates of Occupancy for those houses, or the
purchase of sewer and/or water taps and/or public school attendance rights,
which moratorium is applicable to the Property or any portion thereof, and, as a
result of such moratorium, the state, county, school district, or any other
governmental agency will not issue permits for the construction and/or purchase
of sewer and/or water taps for houses to be erected upon the Property or
building permits for the construction of houses or Certificates of Occupancy for
those houses, or will not permit attendance in the School District attendance
zone in effect as of the date hereof, then, in such event, Purchaser's
obligations to purchase the Lots shall abate. Upon the discontinuation of any
such moratorium, Purchaser's obligations shall resume as of that date and
continue as per the provisions of this Contract. If, however, such moratorium
shall last longer than ninety (90) days, Seller or Purchaser shall each have the
right, but not the obligation, to terminate this Contract. In the event of such
termination by either Seller or Purchaser, the Earnest Money then on deposit
shall be refunded to Purchaser.
X. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby makes the following representations and warranties, which
shall be true as of the Substantial Completion Date, or as of the Closing Date,
and which shall survive the Closing for a period of one (1) year:
(a) Prior to the end of the Feasibility Period and before commencing
any onsite development of the Property Seller shall be the owner of title
to the Lots in fee simple;
(b) Seller has the full right, power, and authority to execute,
deliver, and perform this Contract without obtaining any consents or
approval from, or taking any other actions with respect to, any third
parties, (or if any such consents, approvals, or other actions are
required, the same shall be accomplished prior to the Closing), and this
Contract, when executed and delivered by Seller and Purchaser, shall
constitute the valid and binding agreement of Seller, and shall be
enforceable against Seller in accordance with its terms.
(c) All requisite company action has been taken by Seller in
connection with making and entering into this Contract and the consummation
of the transactions contemplated herein. If any of Seller's representations
and warranties set forth in Article X are untrue in any material respect,
Purchaser may terminate this Contract by delivering notice to Seller and
may avail itself of any other remedy set forth herein specifically
including the right to seek damages.
(d) Seller has complied with all applicable laws, ordinances,
regulations, and restrictions relating to the Lots;
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
13
(e) There are no parties in possession of any portion of the Lots as
lessees, tenants at sufferance, or trespassers;
(f) There is no pending or threatened condemnation or similar
proceeding or special assessment or federal forfeiture action affecting the
Lots, or any part thereof, nor, to the actual knowledge of Seller, is any
such proceeding, assessment or action contemplated by any governmental
agency. As used herein, the term "Governmental Agency" shall mean the
United States, the State of New Mexico, the County and City (if any) in
which the Lots are located, and any agency, department, commission, board,
bureau or instrumentality of any of them;
(g) There are no unpaid charges, debts, liabilities, claims, or
obligations arising from the construction, occupancy, ownership, use, or
operation of the Lots;
(h) The Lots will have full and free access to and from public
streets, and Seller has no actual knowledge of any pending or threatened
governmental proceeding or any other fact or condition which would limit or
result in the termination of such access;
(i) All municipal and utility services of all Governmental Agencies
are available to the Lots and are sufficient for service to the Lots for
single-family houses;
(j) To the best of Seller's knowledge, there is no change contemplated
in any applicable law or any judicial or administrative action which has
not been disclosed in writing to Purchaser by Seller which would prevent,
limit, impede, or render more costly Purchaser's contemplated use of the
Lots;
(k) At the time of Closing, no developer-related charges or
assessments for public improvements or otherwise which would have been made
against the Lots will remain unpaid, including, without limitation, those
for construction of sewer lines, water lines, storm drainage systems,
electric lines, natural gas lines, streets (including perimeter streets),
roads and curbs;
(l) Seller is not a "foreign person", as defined in recent amendments
to the Internal Revenue Code and, prior to the first Closing contemplated
under this Contract, agrees to provide to Purchaser an affidavit to that
effect containing Seller's United States taxpayer identification number;
(m) All Lots under Contract to Purchaser conform to the appropriate
Governmental Agency's subdivision standards for property of this type;
(n) Seller shall provide to Purchaser written certification from a
registered professional engineer that all improvements to the Lots are
constructed according to the requirements of all applicable Governmental
Agencies. Should any revisions become necessary, Seller shall immediately
notify Purchaser of any and all changes and simultaneously refile and
re-record all necessary data with the appropriate Governmental Agency, with
copies being sent to Purchaser;
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
14
(o) Within a reasonable time after obtaining knowledge of the
institution of any proceedings for the condemnation of the Lots or any
portion thereof, or any other proceedings arising out of injury or damage
to the Lots or any portion thereof, Seller will notify Purchaser of the
pendency of such proceedings;
(p) Seller has complied with, and has no actual knowledge of, any
violation, condition, or any action which with the passing of time or
giving of notice would be deemed a violation of any and all applicable
laws, Hazardous Substance Laws, ordinances, regulations, statutes, codes,
rules, orders, decrees, determinations, covenants, and restrictions
relating to the Lots and every part thereof (hereinafter collectively
referred to as the "Applicable Laws"), including those promulgated or
imposed by the FHA, the VA, and any other agency, department, commission,
board, bureau, or instrumentality of any governmental authority of the
United States, the State of New Mexico, the County, the City, or any other
local authority or any board of fire underwriters (or any other body
authorized to exercise any similar function). Furthermore, Seller has no
actual knowledge that any default or breach exists, or as of Closing will
exist, under any of the covenants, conditions, restrictions, rights-of-way,
or easements affecting the Lots or any portion thereof;
(q) Other than park and utility impact fees paid by Purchaser at the
time of building permit, there is no commitment to or requirement by any
governmental authority, utility company, school board, church or other
religious body, homeowners association, or any other organization, group or
individual relating to the Property which would impose an obligation on
Purchaser or its successors or assigns to make any contribution or
dedication of money or land or to construct, install or maintain any
improvements of a public or private nature on or off the Property, other
than homeowner association dues or fees and assessments by the Valley
Improvement Association to be paid by Purchaser's homebuyers; and
(r) To the best of Sellers knowledge, the Property contains no
threatened, endangered or protected species or habitats or any items of
archaeological significance as defined by applicable state, local or
federal law.
(s) When used anywhere in this Contract, the term "knowledge" with
regard to Seller means the current actual knowledge of Fred M. Montana, the
Manager of Seller, and no other representative of Seller. Seller hereby
recommends that Purchaser conduct a full and complete investigation of the
Property during the Inspection Period, including the foregoing matters.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
15
(t) Disclaimer. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT TO THE
EXTENT EXPRESSLY SET FORTH IN THIS CONTRACT, SELLER DOES NOT MAKE AND
DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR AGREEMENTS OF ANY KIND WITH
RESPECT TO THE PROPERTY, AND AT CLOSING, SELLER SHALL SELL TO PURCHASER,
AND PURCHASER SHALL ACCEPT FROM SELLER, THE PROPERTY, IN ITS "AS IS"
CONDITION, WITH ALL FAULTS, AND WITHOUT WARRANTY OR REPRESENTATION, EXPRESS
OR IMPLIED OTHER THAN AS EXPRESSLY SET FORTH HERE IN AND IN THE WARRANTY OF
TITLE IN THE GENERAL WARRANTY DEED. THE PROVISIONS OF THIS SECTION WILL
SURVIVE THE CLOSING.
XI. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
(a) Purchaser has the full right, power, and authority to purchase the
Lots from Seller as provided in this Contract and to carry out its
obligations hereunder; and all required action necessary to authorize
Purchaser to enter into this Contract and to carry out its obligations
hereunder has been or will have been taken prior to the Closing Date;
(b) There are no attachments, executions, or assignments for the
benefit of creditors, or voluntary or involuntary proceedings in bankruptcy
or under any other debtor-relief laws pending or threatened against
Purchaser; and
(c) Purchaser will comply with all applicable laws, ordinances,
regulations, statutes, rules, and restrictions relating to the Recorded
Final Plat.
XII. DELIBERATELY OMITTED.
XIII. DELIBERATELY OMITTED.
XIV. LOT GRADING.
Within five (5) days of the execution of this Agreement, excluding
Corporate Approval, Seller shall arrange to allow Purchaser to meet with
Seller's engineer to agree on lot standards that will be used in preparing
Seller's grading and drainage plan. Seller shall thereafter provide Purchaser
with the completed grading and drainage plan for review and approval. After the
grading and drainage plan has been reviewed and approved by Purchaser, it shall
be the obligation of Seller to implement the plan, at Seller's sole cost and
expense, and to carry out the actual final approval, if any, required by the
City.
The grading of each Lot shall be accomplished in such a manner that each
Lot shall have:
(a) Swales cut to the City or County standards on each Lot in
accordance with the construction grading plan approved by Purchaser;
(b) Grading elevations within plus or minus one-tenth of a foot at the
center corners of each building pad (hereinafter defined) and at the
corners of each Lot as noted on the lot grading plan;
(c) No debris or other detrimental material except Purchaser's
construction materials;
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
16
(d) Fronts, sides and backs of each Lot graded in compliance with the
grading plan approved by Purchaser;
(e) Sidewalk areas and right-of-way areas graded with a minimal slope
from the property line to 6" below the top of the curb or what minimal
slope the City or County will allow; and
(f) A construction area that is benched, constructed, and compacted in
accordance with the Geotech recommendations and otherwise suitable to allow
the use of a monolithic slab or stem wall foundation and with a net
buildable dimension as agreed to by the parties during the platting process
for the applicable Phase (the "Building Pad").
(g) All earthwork shall be in accordance with the recommendations of
the Geo Technical Report and shall be monitored for compliance by the
geotechnical engineer.
(h) If on-lot ponding is required, ponds shall be located a minimum of
ten (10) feet from the Building Pad, or such further distance as may be
recommended in the Geo Technical Report.
XV. WALLS.
Seller will be responsible for construction of any retaining walls required
by the construction grading plan, and will construct all such walls in
accordance with the subdivision standards established by the City or County. All
such walls shall be built to the full height required by the City or County.
Seller shall also be responsible for constructing a Subdivision perimeter wall
around the Subdivision as shown in the wall exhibit attached hereto as Exhibit
D.
XVI . WATER METER BOXES AND ELECTRICAL SERVICE.
When all water meter boxes and electrical connections have been set,
Seller's engineers shall certify to Purchaser that all such connections and
boxes have been set correctly. After such certification, Purchaser shall be
responsible for Purchaser's damage to all items so certified, and shall repair
the damaged water meter boxes and electrical connections, and Purchaser shall be
responsible for their replacement, if necessary. Pursuant to Article VII of this
Contract, Seller shall be responsible for the payment and installation of
permanent underground electrical service to all Lots.
XVII. SALES TRAILER.
Purchaser shall be allowed to place a sales trailer on a portion of the
Property as agreed by the parties after the date hereof, provided that the sales
trailer complies with appropriate Governmental Agencies' requirements.
XVIII. NOTICE.
Any notice authorized, required, or permitted to be given hereunder shall
be deemed to have been given upon the depositing of such notice in the United
States mail, postage prepaid, certified mail or registered mail, return receipt
requested, and properly addressed to the party to be notified at the following
address:
If to Seller: Spanish Trails, LLC
5111 Juan Tabo, NE
Albuquerque, NM 87111
Attn: Fred Montano
Telephone: 5051856-6043
With a copy to: Espinosa & Associates, PC
7770 Jefferson NE #I00
Albuquerque, New Mexico 87109-4359
Attn: Leonard Espinosa
Telephone: 5051242-5656
Facsimile: 5051242-9869
If to Purchaser: DR Horton, Inc.
4400 Alameda NE, Bldg. B
Albuquerque, New Mexico 871 13
Telephone: 505-797-4245
Facsimile: 505-797-9881
Attn: Richard Bressan
With a copy to: DR Horton, Inc.
DR Horton Tower
301 Commerce Street, Suite 500
Fort Worth, Texas 76102
Telephone: 817-390-8200
Facsimile: 817-390-1 704
Attn: James M. Peebles, Jr.
With a copy to: Landry & Ludewig, LLP
1007 Marquette NW
Albuquerque, New Mexico 871 02
505/243-6 100
505/243-8255
Attn: Margaret C. Ludewig
It is provided, however, that the Parties hereto may, from time to time and
at any time, change their respective addresses upon the giving of ten (10) days'
written notice to the other party of such change of address in the manner as
aforesaid.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
17
XIX. ENVIRONMENTAL.
19.01 Representation and Warranty.
Seller hereby represents and warrants to Purchaser that except as otherwise
may be set forth in the Existing Environmental Reports (hereinafter defined):
(i) neither Seller nor, to the Seller's actual knowledge, any previous owner of
the Property or any other person or entity has ever used, generated, processed,
stored, disposed of, released or discharged any Hazardous Substance on, under,
or about the Property or transported it to or from the Property, nor, to the
Seller's actual knowledge, has any party ever alleged that any such activities
have occurred; and (ii) to the best of Seller's actual knowledge, no use by
Seller, any prior owner of the Property, or any other person or entity, has
occurred which violates or has been alleged by any party to violate any
applicable Environmental Law, and the Property is not on any "Superfund" list
under any applicable Environmental Law, nor is it subject to any lien related to
any environmental matter. As used in this Contract, "Hazardous Substance" shall
mean and include all hazardous or toxic substances, wastes or materials, any
pollutants or contaminates (including, without limitation, asbestos and raw
materials which include hazardous constituents, 1011 212005 radon and urea
formaldehyde), and any other similar substances or materials which are included
or regulated by any local, state, or Federal law, rule, or regulation pertaining
to environmental regulation, contamination, clean-up or disclosure, including,
without limitation, the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide
Act, as amended the New Mexico Ground Water Protection Act, the New Mexico Solid
Waste Act, the New Mexico Hazardous Waste Act, and the New Mexico Quality
Control Act (collectively, "Environmental Laws"). In the event Seller has
breached the representations and warranties in this paragraph, Seller shall
indemnify and hold Purchaser, its successors and assigns, harmless from and
against all fines and penalties and liabilities, including all foreseeable and
unforeseeable consequential damages, any other damages, costs and losses,
including reasonable attorneys' fees, directly or indirectly and in whole or in
part arising out of or attributable to Hazardous Substances existing beneath or
on the surface of the Property on or prior to any Closing or the migration
thereof within or from the Property at any time, whether before or after any
Closing, including without limitation the cost of any remedial, removal,
response, abatement, clean-up, investigative and monitoring costs, and any other
related costs and expenses. Notwithstanding anything to the contrary contained
herein, the representations and warranties in this paragraph shall be deemed
remade as to each Lot as of the Closing, and such representations and warranties
and the indemnification provisions in this paragraph shall survive Closing and
shall not be merged therein. Notwithstanding anything to the contrary contained
herein, the representations and warranties in this paragraph shall be deemed
remade as to each Lot as of the Closing , and such representations and
warranties and the indemnification provisions in this paragraph shall survive
Closing for a period of one year and shall not be merged therein.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
18
19.02 Existing Environmental Reports.
Seller shall, within fifteen (15) days after the date hereof, provide to
Purchaser copies of all reports, studies, and other materials which Seller
possesses or controls which pertain to the environmental condition of the
Property and the property in the vicinity of the Property, or the same may be
posted on the FTP Site (collectively, the "Existing Environmental Reports").
19.03 Subsequent Environmental Reports.
Purchaser's obligation to close each Lot hereunder is expressly conditioned
upon: (i) Purchaser's receipt, at Purchaser's expense, of an environmental
engineering report (or reports) acceptable to Purchaser, in Purchaser's
discretion, in light of its intended use of the Property, with regard to the
existence, generation, processing, storing, disposal, release or discharge of
any Hazardous Substances, from, on, under, about, or in the vicinity of the
Property and Environmental Laws relating to Hazardous Substances affecting the
Property, and with regard to the presence of any threatened, endangered or
protected species or habitats or items of archaeological significance, which
investigation is commonly referred to as a "Category I", "Phase I", or "Level I"
environmental audit ("Phase I"), which report(s) have been prepared or updated
to no more than six (6) months prior to the Substantial Completion Date for the
Lots to be closed at the Initial Closing, and such further investigations and/or
reports as Purchaser may require due to the results obtained in the Phase 1
(collectively, the "Subsequent Environmental Reports"); and (ii) Purchaser's
satisfaction with the results of the foregoing investigations(s) and report(s).
In the event Purchaser is not satisfied with the results of such
investigation(s) and report(s), Purchaser may terminate this Contract as to any
or all of the Property and, if terminated as to all the Property, the Earnest
Money (less $100.00 which will be paid to Seller) shall be returned to
Purchaser. Purchaser's obligation to close each Lot hereunder is expressly
conditioned upon there having been no change in the condition of the Property or
the property in the vicinity of the Property as such condition was reflected in
such investigation(s) and report(s).
XX. MISCELLANEOUS PROVISIONS.
(a) Deliberately omitted.
(b) The terms, provisions, warranties, representations, covenants, and
agreements contained in this Contract shall apply to, be binding upon, and
inure to the benefit of, the Parties hereto and their respective legal
representatives, successors, and assigns.
(c) Time is of the essence in the performance of this Contract.
(d) The Parties will each cooperate with each other, their employees,
and agents to facilitate the purchase of Lots by Purchaser under the terms
and conditions herein set forth.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
19
(e) This Contract shall be governed and interpreted under the laws of
the State of New Mexico.
(f) The paragraph headings used in this Contract are for convenience
purposes only, and shall not be used in the interpretation of this
Contract.
(g) All exhibits attached hereto are incorporated herein by reference
and made a part of this Contract.
(h) Failure of either party to insist in any one or more instances
upon the performance of any of the covenants, agreements, and/or conditions
of this Contract, or to exercise any right or privilege herein conferred
shall not be construed as a waiver of any such covenant or condition,
unless otherwise provided in this Contract.
(i) This Contract contains the entire agreement between the Parties
relating to the Lots, and neither party shall be bound by any verbal
statement or agreement made heretofore. This Contract cannot be varied and
no waiver shall occur except by written agreement executed by the Parties.
(j) All of the representations, warranties, covenants, and agreements
made by Seller and by Purchaser shall survive the Closing(s) for a period
of one year and shall not be merged therein for the benefit of Purchaser
and Seller and their respective legal representatives, successors, and
assigns.
(k) In the event the Seller or Purchaser breaches any of the terms,
provisions, warranties, representations, covenants, or agreements contained
in this Contract and Seller and Purchaser become involved in litigation
with regard to breach hereof, the prevailing party shall be entitled to be
paid its reasonable attorneys' fees. The prevailing party is the party who
receives substantially the relief sought, whether by judgment, summary
judgment, dismissal, settlement or otherwise.
(l) Nothing contained herein is intended to create, nor shall it ever
be construed to make, Seller and Purchaser partners or joint venturers.
(m) The provisions of this Contract are severable, and if any
provision or part hereof or the application thereof to any person or
circumstance shall ever be held by any court of competent jurisdiction to
be invalid or unconstitutional for any reason, the remainder of this
Contract and the application of such provisions or part hereof to other
persons or circumstances shall not be affected thereby.
(n) The term, "date of this Contract", or "date hereof", or "effective
date of this Contract", as used herein, shall mean the later of the
following dates: (1) the date of Seller's signature, or; (2) the date of
Purchaser's signature, without the Corporate Approval of the Purchaser.
(o) Purchaser shall not have the right to sell, assign, or transfer
this Contract without the prior written approval of Seller. Any assignment
in violation of this paragraph shall not be binding on Seller.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
20
(p) I NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY,
NEITHER THIS CONTRACT NOR ANY AMENDMENT HERETO SHALL BE A VALID AND
ENFORCEABLE OBLIGATION OF PURCHASER UNLESS THE CONTRACT OR AMENDMENT IS
EXECUTED BY EITHER ONE OF DONALD R. HORTON, DONALD J. TOMNITZ , SAMUEL R.
FULLER, BILL WHEAT, STACEY DWYER OR FRANK T. DAVIS, OFFICERS OF THE
PURCHASER, WITHIN FIFTEEN (15) DAYS OF THE EXECUTION OF THIS CONTRACT OR
AMENDMENT BY SELLER AND PURCHASER'S REPRESENTATIVES. AS USED IN THIS
CONTRACT, THE TERM "CORPORATE APPROVAL" SHALL MEAN EXECUTION OF THIS
CONTRACT BY PURCHASER IN ACCORDANCE WITH THIS PARAGRAPH.
(q) This Contract shall constitute escrow instructions to the Title
Company, together with such modifications thereto as may be made by
supplementary escrow instructions.
(r) Each party hereto will, promptly upon the request of the other,
execute a memorandum of this Contract in the form attached hereto as
Exhibit B, which may be recorded by either party in the Valencia County
real estate records.
(s) Each party agrees that they are and shall be responsible for
complying with all applicable federal, state and local laws, ordinances and
regulations with regard to storm water pollution prevention in connection
with Tracts or Lots they own. Each party shall develop, prepare and manage
an appropriate Notice of Intent and a Storm Water Pollution Prevention Plan
("SWPPP"), and appropriate modifications and amendments thereto, in
accordance with the National Pollutant Discharge Elimination System
("NPDES") General Permit for Construction Activity for any of the Tracts or
Lots which it owns and are the subject of this Agreement.
(t) In order to assist Purchaser in complying with FASB Interpretation
No. 46 (Consolidation of Variable Interest Entities), Seller agrees to
provide Purchaser with all information reasonably requested from time to
time by Purchaser to assist it in the preparation of its quarterly and
annual financial statements. This will generally include information
relating to the legal structure of Seller, the nature and amount of assets
(including the Property) owned by Seller and the nature and amount of
indebtedness secured by those assets. Promptly after the execution of this
Agreement, Seller shall complete an initial questionnaire in the form
attached hereto as Exhibit C.
IN WITNESS WHEREOF, the Parties hereto have executed this Contract in
multiple copies, each of which shall be deemed to be an original, on the dates
set forth below.
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
21
SELLER: PURCHASER:
Spanish Trails, LLC DR Horton, Inc.
51 11 Juan Tabo, NE 4400 Alameda NE, Bldg. B
Albuquerque, NM 871 11 Albuquerque, NM 87113
Telephone: 5051856-60443 Telephone: 505/797/9881
Facsimile: Same Facsimile: 505/797/9881
Attn: Fred Montano Attn: Richard Bressan
Spanish Trails, LLC: DR Horton, Inc.:
/s/ Fred Montano /s/ Mark Ferguson
------------------------------- -----------------------------------
Fred Montano, Its Manager Mark Ferguson, Its Division President
10-11-05 10-11-05
------------------------------- -----------------------------------
DATE OF EXECUTION DATE OF EXECUTION
TITLE COMPANY: CORPORATE APPROVAL:
Fidelity National Title Co.
BY /s/ Virginia Mclntyre By: /s/ Frank T. Davis
---------------------------- ----------------------------------
6745-C Academy Road NE Frank T. Davis, Regional President
Albuquerque, New Mexico, 87109
Telephone: 5051858-1 295
-------------------------------------
Facsimile: 5051858-1 693 DATE OF EXECUTION
Attn: Virginia Mclntyre
BY /s/ Virginia Mclntyre
----------------------------
Virginia Mclntyre
DATE OF EXECUTION
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
22
Exhibits:
Exhibit A-1: Depiction of property
Exhibit A-2 Survey
Exhibit B: Memorandum of Contract
Exhibit C: FASB Interpretation 46
Exhibit D: Wall exhibit
23
Exhibit A-1
(Graphic)
24
Exhibit A-2
Attach SURVEY
25
EXHIBIT "B"
Memorandum of Contract
THIS MEMORANDUM of Contract regarding the Purchase Agreement (the
"Contract") dated effective as of the ____ day of ________________, 2005, by and
between Spanish Trails, LLC, a New Mexico limited liability company ("Seller")
and DR Horton, Inc., a Delaware corporation ("Purchaser").
1. For and in consideration of *** and other good and valuable
consideration by Purchaser to Seller, and in further consideration of the
agreements, covenants and conditions more particularly set forth in the
Contract, Seller has agreed to sell to Purchaser *** fully developed lots in the
Spanish trails master planned community located in Belen, New Mexico, as more
particularly described in Exhibit A attached hereto and made a part hereof.
2. The Contract provides for the closing based on certain conditions
precedent having been met.
3. It is agreed that in the event the Contract is amended or supplemented
by written instrument executed by Seller and Purchaser, or in the event that the
Contract shall be amended, assigned, or terminated in any manner permitted under
the terms thereof, then without further act and instrument whatsoever this
Memorandum shall likewise, and to the same effect, be deemed to be amended, or
terminated, as the case may be.
4. The address of the Seller for notification purposes under the Contract
is Spanish Trails, LLC, c/o Fred Montano, 51 11 Juan Tabo NE, Albuquerque, New
Mexico 871 11, with a copy to Leonard Espinosa, Espinosa & Associates, PC, 7770
Jefferson NE, Albuquerque, New Mexico 871094359, the address for the Purchaser
for such purposes is DR Horton, Inc., c/o Richard Bressan, 4400 Alameda NE,
Bldg. B, Albuquerque, New Mexico 871 13, with a copy to Margaret C. Ludewig,
Landry & Ludewig, LLP, 1007 Marquette NW, Albuquerque, New Mexico 871 02.
5. This Memorandum is executed for the purpose of recording the same in the
records of Valencia County, New Mexico. This Memorandum shall not in any way
modify, supplement or abridge the Contract or any of its provisions as the same
are now or may hereafter be in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed this Memorandum on the
first date written above.
DR Horton, Inc., Spanish Trails, LLC,
a Delaware corporation,+' a New Mexico Limited Liability Company
By: /s/ Mark Ferguson By: /s/ Fred Montano
-------------------------------- -------------------------------------
Mark Ferguson Fred Montano
Its Division President Its Manager
Dated: Dated
----------------------------- -----------------------------------
_______________
***Denotes omission of information pursuant to a request for confidential
treatment. An copy of this agreement which includes the omitted information has
been filed separately with the Securities and Exchange Commission.
_______________
26
STATE OF NEW MEXICO )
)ss.
COUNTY OF BERNALILLO )
This instrument was acknowledged before me this _______ day of
_____________, 2005, by Mark Ferguson, Division President of D.R. Horton, Inc.,
a Delaware corporation, on behalf of said corporation.
Notary Public
My Commission Expires:
---------------------
STATE OF NEW MEXICO )
)ss.
COUNTY OF BERNALILLO )
This instrument was acknowledged before me this 11th day of October,
2005, by Fred Montano, Manager of Spanish Trails, LLC, a New Mexico limited
liability company, on behalf of said company.
/s/ Karen Y. Duran
---------------------------
Notary Public
My Commission Expires: October 13, 2006
27
EXHIBIT A
(Graphic)
28
Exhibit "C"
Seller's Questionnaire for Compliance with
FASB lnterpretation No. 46
In connection with Buyer's compliance with FASB lnterpretation No. 46
(Consolidation of Variable Interest Entities) ("FIN 467, Seller must complete
the following questionnaire in order for Buyer and its affiliates to determine
Buyer's accounting treatment of its interests related to the land purchase or
option contract with Seller (the "Purchase Agreement").
1. Land Seller's legal entity name: Spanish Trails, LLC
2. Land Seller's legal structure (e.g., corporation, LLC, limited partnership,
general partnership, or individual): Limited Liability Company
3. Does Seller's legal entity own any assets other than the land subject to
the Purchase Agreement? Yes (Yes or No)
(a) If yes, what percentage of the total fair value of the assets owned by
Seller's legal entity did the value of the land under the Purchase
Agreement represent at the date the Purchase Agreement was entered
into? ***%
(b) If yes, please summarize the total asset dollar values by category
(i.e., land subject to the Purchase Agreement, other real estate
assets, cash, receivables, personal property and equipment, other,
etc.): ***
4. Does Seller have any project specific debt or other liabilities related
solely to the land that Buyer has contracted to purchase? Yes (Yes or No)
(a) If yes, then at the time the Purchase Agreement was entered into, how
much project specific debt or other liabilities were related solely to
the land that Buyer has contracted to purchase? $ 450,000.00
(b) If yes, is the debt cross collateralized with other assets within
Seller's legal entity (i.e., are there other assets and parcels within
Seller's legal entity that are securing part of the debt on the land
property that Buyer has contracted to purchase)? No (Yes or No)
The undersigned has read this disclosure questionnaire and the related responses
and acknowledges that the information provided herein is accurate and complete
to the best of his or her knowledge.
/s/ Fred Montano
------------------------------
By: Fred Montano
Its: Manager
29
EXHIBIT D
Wall exhibit
30