PCY HOLDINGS, LLC and LENNAR COLORADO, LLC CONTRACT FOR PURCHASE AND SALE OF REAL ESTATE

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 Exhibit 10.1

PCY HOLDINGS, LLC

and

LENNAR COLORADO, LLC

 

(Sky Ranch – Phase B)

 

“Additional Deposit” shall have the meaning set forth in Section 3(a).

“Amended Service Plans” shall have the meaning set forth in Section 4(d)(ii).

“APS Mill Levy” shall have the meaning set forth in Section 4(d)(ii).

“Architectural Review Committee” shall have the meaning set forth in Section 12(d).

“ASP” shall have the meaning set forth in Section 5(a).

“ASP Criteria” shall have the meaning set forth in Section 12(d).

“Assessment Adjustment” shall have the meaning set forth in Section 16(d).

“Authorities” and “Authority” shall have the meaning set forth in the Recitals.

“BMPs” shall have the meaning set forth in Section 29(x).

“Board” shall have the meaning set forth in Section 16(b).

“BSD Mill Levy” shall have the meaning set forth in Section 4(d)(ii).

“Builder Designation” shall have the meaning set forth in Section 8(d)(ii)(7).

“CAB” shall have the meaning set forth in Section 4(d)(i).

“CABEA” shall have the meaning set forth in Section 16(c).

“CDs” shall have the meaning set forth in Section 5(a).

“CIC Approval” shall have the meaning set forth in Section 10(a).

“Closed” shall have the meaning set forth in Section 7.

“Closing Date” shall have the meaning set forth in Section 8(b).

“Closing” shall have the meaning set forth in Section 7.

“Communication Improvements” shall have the meaning set forth in Section 21.

“Communications” shall have the meaning set forth in Section 29(j).

“Confidential Information” shall have the meaning set forth in Section 29(bb).

“Continuation Notice” shall have the meaning set forth in Section 10(a).

“County Records” shall have the meaning set forth in Section 5(a).

“Debt Mill Levy Cap” shall have the meaning set forth in Section 16(d).

“Dedications” shall have the meaning set forth in Section 18.

“Deferred Purchase Price” shall have the meaning set forth in Section 2(a).

“Deferred Purchase Price Deposit” shall have the meaning set forth in Section 5(c)(iv).

“O&M Cap” shall have the meaning set forth in Section 16(d).

“OFAC” shall have the meaning set forth in Section 23.

“Other New Exceptions” shall have the meaning set forth in Section 4(b).

“Overex” shall have the meaning set forth in Section 10(e).

“Owner’s Affidavit” shall have the meaning set forth in Section 4(a).

“Permissible New Exceptions” shall have the meaning set forth in Section 4(b).

“Permitted Exceptions” and “Permitted Exception” shall have the meaning set forth in Section 9.

“PIF Covenant” shall have the meaning set forth in Section 9(e).

“Plat Certificate” shall have the meaning set forth in Section 4(a).

“Public Improvements” shall have the meaning set forth in Exhibit C.

“Purchase Price” shall have the meaning set forth in Section 2.

“Purchaser Parties” shall have the meaning set forth in Section 10(i).

“Purchaser’s Conditions Precedent” shall have the meaning set forth in Section 6(b).

“Purchaser’s Geotechnical Reports” shall have the meaning set forth in Section 10(e).

“Purchaser’s SWPPP” shall have the meaning set forth in Section 29(x).

“Rangeview” shall have the meaning set forth in Section 16(a).

“Regional Improvements” shall have the meaning set forth in Section 4(d)(ii).

“Regional Improvements Authority” shall have the meaning set forth in Section 16(c).

“Regional Improvements Mill Levy” shall have the meaning set forth in Section 4(d)(ii).

“Representatives” shall have the meaning set forth in Section 29(bb).

“Reservations and Covenants” shall have the meaning set forth in Section 8(c)(ii)(1).

“SDF” shall have the meaning set forth in Section 16(e)(iii).

“SDP” shall have the meaning set forth in Section 5(a).

“Second Closing” shall have the meaning set forth in Section 1.

“Seller” shall have the meaning set forth in the Preamble.

“Seller Caused Exception” shall have the meaning set forth in Section 4(b).

“Seller Cure Period” shall have the meaning set forth in Section 4(b).

“Seller Documents” shall have the meaning set forth in Section 10(a).

“Seller Party” or “Seller Parties” shall have the meaning set forth in Section 10(h).

“Seller’s Actual Knowledge” shall have the meaning set forth in Section 11.

“Seller’s Conditions Precedent” shall have the meaning set forth in Section 6(a).

“Seller’s Representations” shall have the meaning set forth in Section 11.

“Service” shall have the meaning set forth in Section 21.

“SFD 45’ Lots” shall have the meaning set forth in the Recitals.

“Sidewalks” shall have the meaning set forth in Exhibit C.

“Sky Ranch Districts” shall have the meaning set forth in Section 4(d)(ii).

“Survey” shall have the meaning set forth in Section 4(a).

“SWPPP” shall have the meaning set forth in Section 29(x).

“Takedown 1 Closing Date” shall have the meaning set forth in Section 8(b).

“Takedown 2 Closing Date” shall have the meaning set forth in Section 8(b).

“Takedown 3 Closing Date” shall have the meaning set forth in Section 8(b).

“Takedown 4 Closing Date” shall have the meaning set forth in Section 8(b).

“Takedown Commitment” shall have the meaning set forth in Section 4(b).

“Tap Purchase Agreement” shall have the meaning set forth in Section 16(a).

“Third Closing” shall have the meaning set forth in Section 1.

“Title Company” shall have the meaning set forth in Section 4(a).

“Title Company Indemnity” shall have the meaning set forth in Section 4(a).

“Title Objection Deadline” shall have the meaning set forth in Section 4(a).

“Title Objections” shall have the meaning set forth in Section 4(a).

“Title Policy” shall have the meaning set forth in Section 4(e).

“Townhome Lots” shall have the meaning set forth in the Recitals.

“Tree Lawns” shall have the meaning set forth in Exhibit C.

“Uncontrollable Event” shall have the meaning set forth in Section 13.

CONTRACT FOR PURCHASE

AND SALE OF REAL ESTATE

 

THIS CONTRACT FOR PURCHASE AND SALE OF REAL ESTATE (this “Contract”) is entered into as of the last date of the signatures hereto (the “Effective Date”), by and between PCY HOLDINGS, LLC, a Colorado limited liability company (“Seller”), and LENNAR COLORADO, LLC, a Colorado limited liability company (“Purchaser”).

 

RECITALS:

A.          Seller is developing a master planned residential community known as “Sky Ranch” which is located in Arapahoe County, Colorado (“County”). The Sky Ranch master planned residential community may also be referred to herein as the “Development”. The conceptual development plan and lotting diagram for Phase B of the Development (the “Lotting Diagram”) are attached hereto as Exhibit A and incorporated herein by this reference. The Development is being platted in several subdivision filings and developed in phases. Each subdivision filing is hereinafter sometimes respectively referred to as a “Filing” and collectively as “Filings”.

 

B.         Seller desires to sell to Purchaser, and Purchaser desires to purchase and obtain from Seller, approximately 218 platted single family residential lots (individually referred to as a “Lot” and collectively as the “Lots”) in the Development which will be finished in accordance with this Contract and which will be used for the construction of single family residential dwellings upon the terms and conditions set forth in this Contract.

C.         Seller is selling platted residential lots within the Development to multiple homebuilders, including Purchaser. The Lots to be sold by Seller and acquired by Purchaser that are located within the Development shall be hereinafter collectively referred to as the “Property.” The Lots will be conveyed at one or more Closings as more particularly provided herein and each such Closing may be referred to herein as a “Takedown.” The Lots which are to be conveyed at the first Closing shall be sometimes hereinafter collectively referred to as the “Takedown 1 Lots”; the Lots which are to be conveyed at the second Closing shall be sometimes hereinafter collectively referred to as the “Takedown 2 Lots”; the Lots which are to be conveyed at the third Closing shall be sometimes hereinafter collectively referred to as the “Takedown 3 Lots”; and the Lots which are to be conveyed at the fourth Closing shall be sometimes hereinafter collectively referred to as the “Takedown 4 Lots”.

 

D.         As of the Effective Date, the Lots have not been subdivided pursuant to a recorded final subdivision plat. The number and location of the Lots to be acquired by Purchaser are generally depicted on the Lotting Diagram. The precise number, dimension and location of the Lots will be established at the time the subdivision plat for such Lots is approved by the County and/or any other relevant governmental authority (the County any other governmental entity or authority may be referred to herein collectively as the “Authorities”, and each an “Authority”). As of the Effective Date, the parties anticipate that Purchaser will acquire approximately:

 

 

E.          Following Purchaser’s acquisition of Lots, Seller will construct certain infrastructure improvements for the Lots as described on Exhibit C attached hereto (the “Finished Lot Improvements”) pursuant to a lot development agreement executed by Seller and Purchaser in the form set forth on Exhibit E (“Lot Development Agreement”).

AGREEMENT:

1.          Purchase and Sale. The Property shall be purchased at four (4) Closings. Subject to the terms and conditions of this Contract, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, on or before the dates set forth in Section 8(b) below, the Lots in each Takedown, as generally depicted on the Lotting Diagram and as follows:

 

At the Takedown 1 Closing (“First Closing”), twenty-four (24) Townhome Lots, and thirty (30) SFD 45’ Lots;

 

At the Takedown 2 Closing (“Second Closing”), eighteen (18) Townhome Lots, and forty-six (46) SFD 45’ Lots;

 

At the Takedown 3 Closing (“Third Closing”), twenty-eight (28) Townhome Lots, and twenty-four (24) SFD 45’ Lots; and

 

At the Takedown 4 Closing (“Fourth Closing”), thirty-two (32) Townhome Lots, and sixteen (16) SFD 45’ Lots.

 

Notwithstanding the foregoing, however, the parties acknowledge and agree that the Parties shall negotiate during the Due Diligence Period to reach agreement on a mutually acceptable site plan for the Lots (“Final Lotting Diagram”) and that the exact number and location of the Lots within each Takedown are subject to adjustment based upon the approval by the Authorities of the Final Plat (as hereinafter defined) that includes the Lots to be acquired by Purchaser at each Takedown. The precise number, dimension (subject to the provisions of this Contract), location and legal description of the Lots will be established at the time the Final Plat for such Lots is approved by the County and/or any other Authority, and upon approval of each such Final Plat the parties shall execute an amendment to this Contract setting forth the legal description of those Lots included in the approved Final Plat.

 

2.          Purchase Price. The purchase price to be paid by Purchaser to Seller for each Lot (the “Purchase Price”) shall consist of the Initial Purchase Price (as hereinafter defined) and the Deferred Purchase Price (as hereinafter defined). The Purchase Price for each Lot shall be calculated as provided in the following Section 2(a) and shall be subject to adjustment as provided in Section 2(b) below:

(a)         Purchase Price Payments. For each Lot, the Purchase Price shall be the sum of the “Initial Purchase Price” of: (i) Twenty Thousand and 00/100 Dollars ($20,000.00) per Townhome Lot, and (ii) Twenty-Nine Thousand and 00/100 Dollars ($29,000.00) per SFD 45’ Lot, paid by Purchaser to Seller by wire transfer or other immediately available and collectible funds (“Good Funds”), and the “Deferred Purchase Price” of (A) Forty Thousand and 00/100 Dollars ($40,000.00) per Townhome Lot, and (B) Fifty-Eight Thousand and 00/100 Dollars ($58,000.00) per SFD 45’ Lot, paid by Purchaser to Seller in Good Funds, for a total of (1) Sixty Thousand and 00/100 Dollars ($60,000.00) per Townhome Lot and (2) Eighty-Seven Thousand and 00/100 Dollars ($87,000.00) per SFD 45’ Lot (subject to adjustment as hereinafter provided in Section 2(b) of this Contract). As more particularly described in Section 5(c)(iv), below, the Deferred Purchase Price for the Lots acquired by Purchaser at the First Closing shall be secured by a letter of credit delivered by Purchaser into escrow at the First Closing, the Deferred Purchase Price for the Lots acquired by Purchaser at the Second Closing shall be secured by a letter of credit delivered by Purchaser into escrow at the Second Closing, the Deferred Purchase Price for the Lots acquired by Purchaser at the Third Closing shall be secured by a letter of credit delivered by Purchaser into escrow at the Third Closing, and the Deferred Purchase Price for the Lots acquired by Purchaser at the Fourth Closing shall be secured by a letter of credit delivered by Purchaser into escrow at the Fourth Closing.

 

(b)         Purchase Price Escalator. Any and all portions of the Purchase Price of each Lot that is to be paid after the occurrence of the First Closing will increase by an amount equal to the amount of simple interest that would accrue thereon for the period elapsing between the date that the First Closing occurs until the date such amount is paid, at a per annum rate equal to four percent (4%) per annum (the “Escalator”). The Escalator applies to both the Initial Purchase Price and the Deferred Purchase Price. By way of example and for clarification purposes only, if the Purchase Price of a Lot at the Closing of the Takedown 1 Lots is $60,000 then at a subsequent Closing occurring twelve (12) months (365 days) following the date of the closing of the Takedown 1 Lots, the Purchase Price for the same type of Lot at such subsequent Closing will be $62,400.00, which is calculated as follows: $60,000 + ($60,000 x .04) = $62,400.00. If the Initial Purchase Price for such Lot to be acquired at the subsequent closing is $20,000, then the Initial Purchase Price for such Lot to be paid at the subsequent closing will be $20,800 [calculated as follows: $20,000 + ($20,000 x .04) = $20,800.00]. Likewise, if one-half of the Deferred Purchase Price of a Lot acquired at the closing of the Takedown 1 Lot is due and payable twenty-four (24) months following the date of the closing of the Takedown 1 Lots then one-half of the Deferred Purchase Price that will be due and payable will be $21,600 [calculated as follows: $20,000 + ($20,000 x .04) + ($20,000 x .04) = $21,600.00].

 

3.           Payment of Purchase Price. The Purchase Price for each of the Lots, as determined pursuant to Section 2 above, shall be payable as follows:

 

(a)         ▇▇▇▇▇▇▇ Money Deposit. Within five (5) business days following the Effective Date, Purchaser shall deliver to the Title Company (as defined in Section 4(a) hereof) an ▇▇▇▇▇▇▇ money deposit in the amount of $243,180.00 (the “Initial Deposit”). At the end of the Due Diligence Period and within five (5) business days after delivery of the Continuation Notice (as hereinafter defined), Purchaser shall deliver to Title Company an additional deposit in the amount of $243,180.00 (the “Additional Deposit”). The Initial Deposit and the Additional Deposit and all interest earned thereon shall be referred to herein as the “Deposit”. The Title Company will act escrow agent and invest the Deposit in a federally insured institution at the highest money market rate available. The Deposit shall be paid in Good Funds. The Deposit shall be applied on a pro- rata basis to the Initial Purchase Price due at each Closing. If this Contract is terminated prior to the expiration of the Due Diligence Period for any reason, the Initial Deposit shall be refunded to Purchaser. If this Contract is terminated after the Due Diligence Period and prior to the Deposit being fully applied to the Purchase Price at the last Closing, the unapplied portion of the Deposit shall be paid to Seller, except in the case of a termination of this Contract pursuant to a provision that expressly entitles Purchaser to a refund of the Deposit as provided elsewhere herein.

 

(b)          Initial Purchase Price. That portion of the Purchase Price for each Lot that is identified as the Initial Purchase Price and calculated as provided in Section 2 above shall be paid by Purchaser to Seller in Good Funds at the Closing that is applicable to the Lot.

 

(c)           Deferred Purchase Price. That portion of the Purchase Price for each Lot that is identified as the Deferred Purchase Price in Section 2 above is due and payable by Purchaser to Seller, as provided in and pursuant to the terms of the Lot Development Agreement.

 

(a)          Preliminary Title Commitment. Within ten (10) days after the Effective Date, Seller shall furnish to Purchaser, at Seller’s expense, a current commitment for a Title Policy (as defined below) for the Property (the “Master Commitment”) issued by Land Title Guarantee Company (“Title Company”) as agent for First American Title Insurance Company, together with copies of the instruments listed in the schedule of exceptions in the Master Commitment. If the Master Commitment contains any exceptions from coverage which are unacceptable to Purchaser, then Purchaser shall object to the condition of the Master Commitment in writing (“Title Objections”) within twenty (20) days after the Effective Date (the “Title Objection Deadline”). Upon receipt of the Title Objections, Seller may, at its option and at its sole cost and expense, clear the title to the Property of the Title Objections within five (5) days after the Title Objection Deadline. In the event Seller does not timely elect to clear the title to the Property of the Title Objections, then prior to the expiration of the Due Diligence Period, Purchaser, as its sole remedy, may elect (i) to terminate this Contract, in which event the Initial Deposit shall be promptly returned to Purchaser, Purchaser shall deliver to Seller all information and materials received by Purchaser from Seller pertaining to the Property and any non-confidential and non-proprietary information otherwise obtained by Purchaser pertaining to the Property, and thereafter the parties shall have no further rights or obligations under this Contract except as otherwise provided in Section 12(c) below; or (ii) to waive such objections and proceed with the transactions contemplated by this Contract, in which event Purchaser shall be deemed to have approved the title matters as to which its Title Objections have been waived. If Purchaser fails to provide the Title Objections prior to the expiration of the Title Objection Deadline, Purchaser shall be deemed to have elected to waive any objections to title matters set forth in the Master Commitment. If Purchaser fails to notify Seller of its election to terminate this Contract or waive it objections, Purchaser shall be deemed to have elected to waive its objections to any title matter that Seller has failed or elected not to cure. Seller shall release at or prior to the applicable Closing any monetary lien that Seller caused or created against the Property with respect to that portion of the Property to be acquired at a particular Closing other than non-delinquent real estate taxes and assessments and Permitted Exceptions, and such monetary liens shall not constitute Permitted Exceptions (as hereinafter defined). At each Closing, without the need for Purchaser to object to the same in Purchaser’s Title Objections, Seller shall execute and deliver the Title Company’s standard form mechanic’s lien affidavit (the “Lien Affidavit”) in connection with the standard printed exception for liens arising against the Lots purchased at the Closing for work or materials ordered or contracted for by Seller, and to the extent required by the Title Company a commercially reasonable indemnity agreement (the “Title Company Indemnity”), provided, however, if Purchaser determines during the Due Diligence Period that the Title Company refuses or is unwilling to delete the standard printed exception for liens as part of extended coverage despite Seller’s offer to execute and deliver the Lien Affidavit and Title Company Indemnity, then Purchaser will have the right to terminate this Contract on or before the expiration of the Due Diligence Period whereupon the Initial Deposit will be returned to Purchaser, or Purchaser may proceed with the Closing in which event the Title Policy will contain, and the Lots will be conveyed subject to, the standard printed exception for liens unless the Title Company agrees thereafter to delete such lien exception, however, the Purchaser shall have no further termination rights if the Title Company does not agree to do so. If the Title Company agrees during the Due Diligence Period to delete the standard printed exception for liens as part of extended coverage and thereafter the Title Company refuses to delete the exception for liens based on Seller’s offer to execute and deliver the Lien Affidavit and Title Company Indemnity, then such exception shall be deemed a Non-Seller Caused Exception (as hereinafter defined) to which Purchaser shall have the right to object pursuant to Section 4(b). Seller shall request that the Takedown Commitment (as hereinafter defined) provide for the deletion of the other standard printed exceptions from the Title Policy (provided that Seller’s only obligation with respect thereto shall be (i) to provide a copy of Seller’s existing survey (“Survey”), if any, of the land that contains the Lots, obtain and furnish, at Purchaser’s sole cost and expense, a plat certification issued by a licensed surveyor (“Plat Certificate”) if and to the extent a Plat Certificate is required by the Title Company as a requirement to delete the standard survey exception, (ii) to execute the Title Company’s standard form seller-owner final affidavit and agreement as reasonably modified by Seller and as to Seller’s acts only if such affidavit is required by the Title Company for the purpose of deleting any exception for parties in possession (“Owner’s Affidavit”), and (iii) to execute the Title Company’s Lien Affidavit with respect to Seller’s acts, in form and substance reasonably acceptable to Seller). Seller has no obligation to provide a new Survey or to update any existing Survey.

(b)          Subsequently Disclosed Exceptions. Not less than fifteen (15) days prior to the each Closing, Seller shall cause the Title Company to issue an updated title commitment for that portion of the Property to be acquired at such Closing (each a “Takedown Commitment”), together with copies of any additional instruments listed in the schedule of exceptions which are not reflected in the Master Commitment furnished pursuant to Section 4(a) above or in any prior Takedown Commitment. Additional items disclosed by a Takedown Commitment or by an amendment to the Master Commitment that affect title to the subject Property are referred to as “New Exceptions”. New Exceptions affecting title to the subject Property that are allowed by the provisions of this Contract are referred to as “Permissible New Exceptions” and all other New Exceptions are referred to as “Other New Exceptions”. Purchaser has no right to object to any Permissible New Exception. Other New Exceptions which do not materially adversely affect title to, or use of, a Lot, as reasonably agreed upon by the parties, shall also be Permissible New Exceptions. Purchaser shall have a period of seven (7) days from the date of its receipt of such Takedown Commitment or amendment to the Master Commitment and a copy of the New Exceptions (the “New Exception Review Period”) to review and to approve or disapprove any Other New Exceptions. If any Other New Exception is unacceptable to Purchaser, Purchaser shall object to such Other New Exception(s) in writing prior to the expiration of the New Exception Review Period (the “New Exception Objection”). Upon receipt of the New Exception Objection, Seller shall cure the New Exception Objection (by deletion, insuring over or endorsement) to the extent that such Other New Exception was caused or created by Seller and is not otherwise permitted by this Contract (“Seller Caused Exception”). If the New Exception Objection relates to an Other New Exception that was not caused by Seller (“Non-Seller Caused Exception”), Seller may, at its sole discretion, cure the New Exception Objection, within fifteen (15) days of receipt of the New Exception Objection (“Seller Cure Period”) and the applicable Closing Date will be extended to accommodate the Seller Cure Period. In the event Seller fails, or elects not to cure a Non-Seller Caused Exception within such fifteen (15)-day period, the Purchaser, as its sole remedy, may elect within five (5) days after the end of the Seller Cure Period either: (i) to terminate this Contract in its entirety, in which event that portion of the Deposit not previously applied to the Purchase Price at a Closing, shall be refunded to Purchaser and the parties shall have no further rights or obligations under this Contract; or (ii) to waive such objection and proceed with the applicable Takedown, in which event Purchaser shall be deemed to have approved the New Exception. If Purchaser fails to notify Seller of its election to terminate this Contract in accordance with the foregoing sentences within five (5) days after the expiration of the Seller Cure Period (i) Purchaser shall be deemed to have elected to waive its objections as described in the preceding sentences regarding such items, and (ii) all such items shall be deemed to be Permitted Exceptions.

(c)         Permitted Exceptions; Additional Easements. Seller shall convey title to the Lots included in each Takedown of the Property to Purchaser at the Closing for such Takedown subject to the Permitted Exceptions described in Section 9 hereof. Prior to each Closing, Seller shall have the right to convey, subject to the limitations set forth below and those Reservations and Covenants (as hereinafter defined) as set forth on Exhibit B, attached hereto, additional easements as Permissible New Exceptions to utility and cable service providers, governmental or quasi- governmental Authorities, metropolitan, water and sanitation districts, homeowners associations or property owners associations or other entities that serve the Development or adjacent property for construction of utilities and other facilities to support the Development or such adjacent property, including but not limited to sanitary sewer, water lines, electric, cable, broad-band and telephone transmission, storm drainage and construction access easements across the Property not yet acquired by Purchaser, allowing Seller or its assignees the right to install and maintain sanitary sewer, water lines, cable television, broad-band, electric, telephone and other utilities on the Property and on the adjacent property owned by Seller and/or its affiliates, and further, to accommodate storm drainage from the adjacent property. Seller shall promptly advise Purchaser of any such easements and provide copies of the same to Purchaser for its reasonable review. Such easements shall (i) allow installation of such customary and reasonable above-grade appurtenances which do not materially interfere with Purchaser’s use of a Lot, (ii) require the restoration of any surface damage or disturbance caused by the exercise of such easements, (iii) not be located within the building envelope of any Lot, and (iv) not materially detract from the value, use or enjoyment of (A) the Lots affected or the remaining portion of the Property on which such easements are to be located, or (B) any adjoining property of Purchaser, as more particularly set forth in the Reservations and Covenants.

 

(i)          Master Covenants. The Lots to be acquired pursuant to this Contract shall be, prior to each Closing, made subject to the Covenants, Conditions and Restrictions for Sky Ranch recorded in the County Records on August 10, 2018, at Reception No. D8079588 (the “Master Declaration”). The Master Declaration, together with any supplemental declarations which have been, or may in the future be, recorded against the Property for the limited purpose of subjecting the Property to the provisions of the Master Declaration (or for other purposes as approved in accordance with Sections 4(a) or 4(b), above) shall be collectively referred to as the “Master Covenants”. The Master Covenants are administered by the Sky Ranch Community Authority Board (“CAB”) and shall be a Permitted Exception (as hereinafter defined). Seller shall provide to Purchaser for its review, a copy of the Master Covenants as part of the Seller Documents (as hereinafter defined). Seller shall be permitted to revise or supplement the Master Covenants at any time before the First Closing under this Contract without the consent of Purchaser but with prior notice and copies of same to Purchaser; provided, that any such revision has no material adverse effect on the Lots acquired or to be acquired by Purchaser.

 

(ii)          Regional Improvements Mill Levy. The Sky Ranch Metropolitan Districts Nos. 3, 4 and 5 (the “Sky Ranch Districts”) petitioned the County and, on December 8, 2020, the County approved Amended and Restated Service Plans for the Sky Ranch Districts (“Amended Service Plans”). In connection with Seller’s delivery of the Seller Documents to Purchaser, Seller shall deliver to Purchaser a copy of the Amended Service Plans. Pursuant to the Amended Service Plans, each Sky Ranch District is authorized to provide for the planning, design, acquisition, construction, installation, relocation and/or redevelopment and to contribute to the funding of certain regional improvements serving the Development and other properties, and to fund the administration, overhead and operations and maintenance costs related to the provisions of such regional improvements. The regional improvements include, without limitation, the freeway interchange at Interstate I-70/Airpark Frontage Road adjacent to the Development, 6th Avenue, Monaghan St., Alameda Avenue, Hayesmount, and stormwater channel improvements along Monaghan and the First Avenue Tributaries to First Creek (collectively, the “Regional Improvements”). The Regional Improvements may be funded, in part, with revenue generated by the Sky Ranch Districts’ imposition of a mill levy that is a subset of the Sky Ranch Districts’ operations and maintenance mill levy to plan, design, acquire, construct, install, relocate and/or redevelop, and for the administration, overhead and operations and maintenance costs incurred with respect to the Regional Improvements (the “Regional Improvements Mill Levy”). The Regional Improvements Mill Levy shall be calculated, in any year, as the difference between the Aurora Public Schools mill levy (“APS Mill Levy”) and the ▇▇▇▇▇▇▇ School District 29J mill levy (“BSD Mill Levy”). The Debt Mill Levy Cap of 55.664 ▇▇▇▇▇ as set forth in the Amended Service Plans does not apply to each Sky Ranch District’s ability to increase its Regional Improvements Mill Levy as necessary for provision of the Regional Improvements. The Sky Ranch Districts are authorized to share the revenue generated by the imposition of the Regional Improvements Mill Levy in order to provide a source of funding for the construction and operation of the Regional Improvements and may pledge such revenue generated by the imposition of the Regional Improvements Mill Levy to the repayment of bonds issued by another governmental entity.

 

(e)          Title Policy. Within a reasonable time after each Closing, Seller, at its expense, shall cause the Title Company to deliver a Form 2006 ALTA extended coverage owner’s policy of title insurance (“Title Policy”), insuring Purchaser’s title to the Property conveyed at such Closing, pursuant to the applicable Takedown Commitment and subject only to the Permitted Exceptions, together with such endorsements as Purchaser may request and which the Title Company agrees to issue during the Due Diligence Period, and shall pay the premium for the basic policy at such Closing. The Title Policy shall provide insurance in an amount equal to the Purchase Price for all Lots purchased at such Closing. At each Closing, Seller shall offer to execute and deliver a Lien Affidavit and an Owner’s Affidavit, and shall obtain and furnish a Plat Certificate, as necessary. Purchaser shall pay any fees charged by the Title Company to delete the standard pre-printed exceptions. Purchaser shall pay for the premiums for any endorsements requested by Purchaser, except that Seller shall pay for any endorsements that Seller agrees to provide in order to cure a Title Objection.

 

 

(i)          Platting and Entitlements. Seller shall be responsible, at Seller’s sole cost and expense, for preparing and processing in a commercially reasonable manner and timeframe, and diligently pursuing and obtaining Final Approval (as defined below) from the County and any other appropriate Authority and recording in the records of the Clerk and Recorder of the County (the “County Records”), as may be required, the following: (A) a preliminary plat; (B) a general development plan (“GDP”); (C) a specific development plan that includes the Property (“SDP”); (D) an administrative site plan (“ASP”) and final subdivision plat (or plats) for each Filing within the Property (each a “Final Plat”); (E) the public improvement construction plans for all improvements relating to each Final Plat (“CDs”); and (F) one or more development or subdivision improvement agreements associated with the Final Plats and other similar documentation required by the Authorities in connection with approval of the Final Plat(s) and CDs (collectively, the “Entitlements”). The Entitlements shall substantially comply with the Final Lotting Diagram, and shall provide that Phase B of the Development contains approximately 834 lots with the Lots being of the number, type, and dimension as set forth above in Recital D (after taking into consideration applicable setbacks), and the Entitlements shall not impose new or additional requirements upon Purchaser which increase (or could be expected to increase) the construction cost for a Home on any Lot by more than $3,000 or which materially adversely affect Purchaser’s ability to construct a Home on any Lot. Seller shall use commercially reasonable efforts to have the Entitlements for each Takedown, respectively, approved by the Authorities and recorded as necessary in the County Records with all applicable governmental or third-party appeal and/or challenge periods applicable to an approval decision of the County Board of Commissioners or County Planning Commission having expired without any appeal then-pending (“Final Approval”). Seller covenants to comply with the Surface Development Notification Act, C.R.S. § 24-65.5-101, et seq., with respect to minerals and applications for Final Approvals of the Entitlements. Seller shall use commercially reasonably efforts to obtain Final Approval of the Entitlements applicable to the Takedown 1 Lots on or before that date which is nine (9) months after the expiration of the Due Diligence Period, as such period may be extended pursuant to this Section 5(a)(i), or as a result of delays resulting from Uncontrollable Events. If Final Approval of the Entitlements applicable to the Takedown 1 Lots has not been achieved as aforesaid on or before nine (9) months after the expiration of the Due Diligence Period (subject to delays resulting from Uncontrollable Events), then either party, in its discretion, shall have the right to extend the date for obtaining such Final Approval for a period not to exceed an additional six (6) months by providing written notice to the other party prior to the expiration of such nine (9) month period (or such later date as the same may have been previously extended). If Seller has not secured such Final Approval of the Entitlements applicable to the Takedown 1 Lots by the expiration of the initial nine (9) month period (subject to delays resulting from Uncontrollable Events) and neither party exercises such six-month extension, this Contract shall automatically terminate and each party hereto shall thereupon be relieved of all further obligations and liabilities under this Contract, except as otherwise provided herein, and the Deposit shall be returned to Purchaser. If either party extends the time period for obtaining Final Approval of the Entitlements applicable to the Takedown 1 Lots, then during such extended time period Seller shall continue to use commercially reasonable efforts to obtain Final Approval of such Entitlements, and failing which, Seller shall not be in default of its obligations under this Contract (unless Seller failed to use commercially reasonable efforts to obtain Final Approval of such Entitlements), and this Contract shall automatically terminate in which case each party shall thereupon be relieved of all further obligations and liabilities under this Contract, except as otherwise provided herein, and the Deposit shall be returned to Purchaser. During the Entitlement process, Seller shall keep Purchaser reasonably informed of the process and the anticipated results therefrom and provide Purchaser with copies of those Entitlement documents as submitted to the County and other documentation reasonably requested by Purchaser relating to same. Purchaser, at no material cost to Purchaser (other than costs incurred to obtain services that could reasonably be performed or provided in- house), shall reasonably cooperate with Seller in Seller’s efforts to obtain Final Approval of the Entitlements by the County.

 

(ii)        Lot Minimums for each Takedown. The Final Plat(s) for the Property and the Lots are anticipated to be in a form which is substantially consistent with the Final Lotting Diagram, subject to changes made necessary by the Authorities and/or final engineering decisions which are necessary to properly engineer, design, and install the improvements in accordance with the requirements of the County and other applicable Authorities.

(iii)       Recordation of Final Plat. At or before each Closing, Seller shall cause to be recorded, in the County Records, the Final Plat that includes the Lots that are to be purchased at such Closing. Seller shall be responsible for providing to the County all payments and any bond or other financial assurance that is required by the County to record each Final Plat, whether such amounts are paid before or after recordation each Final Plat. This Section shall survive the applicable Closing.

 

(b)        Interchange Obligations. As of the Effective Date, the existing entitlements for the Development state that no more than 774 building permits may be issued for the Development until the Freeway Interchange is upgraded. The foregoing building permit provision may affect the ability of Purchaser and the other builders within Phase B to obtain building permits on the Lots acquired after the First Closing under this Contract and after the initial closings under the other builder contracts. Seller is currently working with the County, CDOT, and other stakeholders to identify interim upgrades to the Freeway Interchange that, if implemented, would increase the number of building permits available within the Development to accommodate all Lots subject to this Contract and the other building contracts within Phase B (the “Interchange Upgrades”).

 

(i)         At the First Closing, Purchaser and Seller shall enter into the Lot Development Agreement in the form attached hereto as Exhibit E, regarding Seller’s obligations to construct and install the Finished Lot Improvements as described on Exhibit C attached hereto.

(ii)         The Lot Development Agreement includes, without limitation, provisions that provide for the following: (A) the payment of the Deferred Purchase Price by Purchaser as follows: for each Takedown, one-half of the Deferred Purchase Price for the Lots in that Phase shall be paid to Seller upon Substantial Completion of that portion of the Finished Lot Improvements consisting of the water and sanitary sewer infrastructure, as set forth on Exhibit E to the Lot Development Agreement, which is necessary to serve the Lots in that Phase, and the remaining one-half of the Deferred Purchase Price for the Lots in that Phase shall be paid to Seller upon Substantial Completion of the balance of Finished Lot Improvements that serve that Phase to the extent necessary to obtain building permits; (B) Seller’s and/or the District’s obligation to post surety as required by the County in connection with such Phases; (C) provisions regarding Seller’s and/or the District’s agreements with the contractors who will construct the Finished Lot Improvements; (D) Seller’s and/or the District’s warranty obligations, as provided on Exhibit C; (E) Seller’s obligation to obtain lien waivers and to discharge mechanics liens related to construction of the Finished Lot Improvements; (F) Purchaser’s step-in rights following a Seller and/or District Event of Default (as such term is defined in the Lot Development Agreement) under the Lot Development Agreement; and (G) a license from Purchaser to permit construction of the Finished Lot Improvements and performance of other related activities on the Lots. If the parties are unable to agree on the form of Lot Development Agreement before the expiration of the Due Diligence Period, either Party shall have the right to terminate this Contract and upon such termination, the Initial Deposit shall be promptly returned to Purchaser, Purchaser shall deliver to Seller all information and materials received by Purchaser from Seller pertaining to the Property and any non-confidential and non-proprietary information otherwise obtained by Purchaser pertaining to the Property, and thereafter the parties shall have no further rights or obligations under this Contract except as otherwise provided in Section 25 below. The Seller, Purchaser, other builder(s) affected by any improvements to be constructed under the Lot Development Agreement that serve or benefit the Lots and other property that is to be acquired by such other builder(s) (the “Joint Improvements”) and the Title Company will, at the First Closing execute a “Joint Improvements Memorandum” that describes the rights and obligations of Seller, Purchaser, such other builder(s) and Title Company and such document will supplement the Lot Development Agreement regarding the installation and construction of any Joint Improvements. The form of the Joint Improvements Memorandum is attached to the Lot Development Agreement as Exhibit F thereto.

 

(iii)       After obtaining Final Approval of all necessary Entitlements for the applicable Lots, Seller acting as the Constructing Party (as defined in the Lot Development Agreement) under the Lot Development Agreement shall commence and diligently pursue Substantial Completion, or cause to be Substantially Completed, for the Lots being purchased and acquired by Purchaser at each Closing, subject to delays resulting from Uncontrollable Events or any force majeure events provided for in the Lot Development Agreement, the Finished Lot Improvements in accordance with the phasing, provisions and schedules of the Lot Development Agreement and all applicable laws, codes, regulations and governmental requirements for the Lots. Seller will notify Purchaser when each phase of the Finished Lot Improvements have been Substantially Completed. Seller’s failure to comply with the foregoing covenant shall not constitute a default hereunder unless and until such failure shall constitute an Event of Default (as defined in the Lot Development Agreement) under the Lot Development Agreement.

(iv)        In order to secure Purchaser’s obligation (following each Closing) to pay the Deferred Purchase Price in accordance with the terms of this Contract and the payment schedule set forth in the Lot Development Agreement, as described in Section 5(c) of this Contract, at each Closing Purchaser shall deliver to Title Company (acting as escrow agent), either (a) a letter of credit with Title Company as the beneficiary, in a form reasonably agreeable to Seller and issued by either Fidelity Guaranty and Acceptance Corp., a Delaware corporation or another financial institution reasonably agreeable to Seller if Purchaser elects in its sole discretion not to use Fidelity Guaranty and Acceptance Corp. (the “Letter of Credit”), or (ii) a cash payment (a Letter of Credit and the cash payment each constitute a “Deferred Purchase Price Deposit”). If Purchaser is using a Letter of Credit, Purchaser shall deliver the draft form thereof to Seller within ten (10) business days after the Effective Date and the parties shall use commercially reasonable efforts to agree on the form of the same prior to the expiration of the Due Diligence Period and such agreed-upon form shall be incorporated herein by an amendment to this Contract. The Deferred Purchase Price Deposit shall be in an amount equal to the sum of the Deferred Purchase Price for all of the Lots acquired by Purchaser at such Closing plus, for the Takedown 2 Lots, the Takedown 3 Lots, and the Takedown 4 Lots, the Escalator thereon calculated pursuant to Section 2(b). Title Company shall hold and maintain the Deferred Purchase Price Deposit pursuant to the Lot Development Agreement in an escrow account established by Title Company for the benefit of Seller and Purchaser. A Letter of Credit that is posted as the Deferred Purchase Price Deposit for a Closing shall remain in place until the final payment of the Deferred Purchase Price applicable to such Closing has been made to the Seller following Substantial Completion of the Finished Lot Improvements which serve the Lots acquired by Purchaser at such Closing. The Letter of Credit shall provide that if a Letter of Credit is scheduled to expire prior to the Substantial Completion of all of such Lots, and Purchaser has not renewed the Letter of Credit no later than fourteen (14) days prior to the expiration date thereof, Title Company is authorized and directed to draw down the full amount of the Letter of Credit and deposit such funds in escrow to be used solely for the payment of any unpaid Deferred Purchase Price. The Letter of Credit may provide that it may be reduced from time to time to the extent of payments of the Deferred Purchase Price made by Purchaser for Finished Lot Improvements in accordance with the terms, including the payment schedule, set forth in the Lot Development Agreement and Section 5(c) of this Contract. The Letter of Credit for each Closing shall be returned to Purchaser, together with an executed reduction certificate reducing the face amount thereof to $0.00, upon payment in full of the Deferred Purchaser Price for all of the Lots in such Closing. A cash payment that is deposited as the Deferred Purchase Price Deposit for a Closing will be drawn down and disbursed by the Title Company to Seller from time to time to the extent of payments of the Deferred Purchase Price made by Purchaser for Finished Lot Improvements in accordance with the terms, including the payment schedule, set forth in the Lot Development Agreement and Section 5(c) of this Contract. Failure by Purchaser to pay any portion of the Deferred Purchase Price that is secured by a Letter of Credit when the same shall become due and payable, provided that if such failure continues for a period of ten (10) days after the delivery of written notice thereof from Seller to Purchaser, shall entitle Seller to enforce the collection of the delinquent Deferred Purchase Price by drawing upon the Letter of Credit or having the Title Company draw upon the Letter of Credit, and in either event the funds so drawn shall be paid to Seller as payment of any unpaid Deferred Purchase Price and such failure to pay shall be deemed cured. If Seller or Title Company is unable to draw upon the Letter of Credit, or Purchaser otherwise fails to pay the Deferred Purchase Price, Seller may protect and enforce its rights under this Contract pertaining to payment of the Deferred Purchase Price by (i) such suit, action, or special proceedings, including proceedings for specific performance of any such payment obligation or for the recovery of actual damages (excluding consequential, punitive, or similar damages) related to Purchaser’s failure to pay all or any portion of the Deferred Purchase Price, and (ii) enforcing Seller’s lien rights under the Lot Development Agreement, in either case pursuant to the applicable provisions set forth in this Contract and the Lot Development Agreement. Seller’s remedies are non-exclusive. The foregoing provisions regarding the Letter of Credit as security for payment of the Deferred Purchase Price shall be included in the Lot Development Agreement in the form of escrow instructions.

 

(a)          Seller’s Conditions. It shall be a condition precedent to Seller’s obligation to close each Takedown, that the following conditions (“Seller’s Conditions Precedent”) have been satisfied:

 

(i)         Purchaser and other homebuilders are under contract to purchase at least 250 of the Lots in Phase B, and close the initial purchase of lots under some or all of such purchase and sale agreements as determined by Seller simultaneously (the “Initial Purchase Condition”).

(ii)         Provided that Seller shall have used commercially reasonable, good faith efforts in connection therewith, Seller shall have satisfied, or both parties are reasonably certain that Seller will be able to satisfy, its obligations with respect to the Interchange Upgrades, on or before the Substantial Completion Deadline (as set forth in the Lot Development Agreement) for such Takedown, such that Purchaser shall not be prevented from obtaining building permits to construct Houses on Lots acquired at such Takedown no later than the applicable Substantial Completion Deadline (the “Interchange Condition”) and will not be prevented from obtaining certificates of occupancy for such Houses, solely as a result of Seller’s failure to timely satisfy the Interchange Condition.

 

Seller agrees to use commercially reasonable, good faith efforts to timely satisfy the Seller’s Conditions Precedent. If for any reason other than Seller’s default or Seller’s fault or exercise of its discretion, either Seller’s Condition Precedent is not satisfied on or before a Closing Date, Seller may elect to: (1) terminate this Contract solely with respect to the applicable Takedown by giving written notice to Purchaser at least ten (10) days prior to such Closing; (2) waive the unsatisfied Seller’s Condition(s) Precedent and proceed to the applicable Closing (provided, however, that such waiver shall not apply to any subsequent Closings); or (3) extend the applicable Closing Date for a period not to exceed ninety (90) days by giving written notice to Purchaser on or before the applicable Closing Date, during which ▇▇▇▇ ▇▇▇▇▇▇ shall use commercially reasonable, good faith efforts to cause such unsatisfied Seller’s Conditions Precedent to be satisfied. If Seller elects to extend any Closing Date and the unsatisfied Seller’s Condition Precedent is not satisfied on or before the last day of the 90-day extension period for any reason other than Seller’s fault or exercise of its discretion, then Seller shall elect within five (5) business days after the end of such extension period to either terminate this Contract solely with respect to the applicable Takedown or waive the unsatisfied Seller’s Condition(s) Precedent and proceed to the applicable Closing. In the event Seller terminates this Contract pursuant to this Section 6(a), that portion of the Deposit made by Purchaser that has not been applied to the Purchase Price for Lots already acquired by Purchaser shall be returned to Purchaser. Failure to give a termination notice as described above shall be an irrevocable waiver of Seller’s right to terminate this Contract as to the affected Takedown pursuant to this Section 6(a).

 

(b)          Purchaser’s Conditions. It shall be a condition precedent to Purchaser’s obligation to close each Takedown, that the following conditions (“Purchaser’s Conditions Precedent”) have been satisfied:

 

(i)          Final Approval of the Entitlements for the applicable Takedown by the County and all other applicable Authorities and recordation in the County Records of the Final Plat for the Lots to be acquired at such Takedown and such other Entitlements, as may be required by the County, on or before the applicable Closing Date, as the same may be extended.

 

(ii)         Seller shall have satisfied, or both parties are reasonably certain that Seller will be able to satisfy, the Interchange Condition, such that Purchaser shall not be prevented from obtaining building permits for such Lots no later than the applicable Substantial Completion Deadline (as set forth in the Lot Development Agreement) and will not be prevented from obtaining certificates of occupancy for such Houses solely as a result of Seller’s failure to timely satisfy the Interchange Condition.

 

(iii)        Seller’s representations and warranties set forth herein shall be materially true and correct as of the applicable Closing.

(iv)        Rangeview will have delivered to Purchaser, in accordance with the Tap Purchase Agreement, reasonable evidence that the Lots have water and sewer tap commitments sufficient for Purchaser’s intended build-out of the Lots, subject to the payment of tap fees as set forth in the Tap Purchase Agreement.

 

(v)        No state, County, city, public school district, or other Authority shall have declared or implemented any moratorium or other limitation on: (a) the issuance permits for the construction of infrastructure to serve the Lots, building permits for the construction of houses or certificates of occupancy for those houses; (b) the purchase of sewer and/or water taps; or (c) the processing of any engineering, architecture or other plans or documents necessary for the construction of houses or infrastructure improvements to serve such houses.

 

(vi)        The Title Company shall be irrevocably and unconditionally committed (subject only to Purchaser’s obligation to pay the portion of the Title Policy premium for which Purchaser is responsible under this Contract and satisfaction of any Title Company requirements applicable to Purchaser) to issue to Purchaser the applicable Title Policy with the endorsements as Purchaser may request and the Title Company agrees in writing to issue prior to the expiration of the Due Diligence Period, subject only to the Permitted Exceptions accepted by Purchaser in accordance with the provisions of this Contract.

 

(vii)        The Joint Improvements Memorandum shall have been fully executed by all required parties.

 

If the Purchaser’s Conditions Precedent are not satisfied on or before a respective Closing Date, Purchaser may: (1) waive the unfulfilled Purchaser’s Condition Precedent and proceed to Closing, (2) extend the applicable Closing Date for up to ninety (90) days to allow more time for Seller to satisfy the unfulfilled Purchaser’s Condition Precedent, or (3) as its sole remedy (except in the case of a Seller default) hereunder terminate this Contract as to such Takedown or terminate this Contract in its entirety as to such Takedown and all subsequent Takedowns by written notice to Seller, delivered within ten (10) business days after the Closing Date for the applicable Takedown, in which case each party shall thereupon be relieved of all further obligations and liabilities under this Contract (as to any Takedowns that are being terminated), except as otherwise provided herein, and that portion of the Deposit made by Purchaser for any Takedowns that are being terminated that has not been applied to the Purchase Price for Lots already acquired by Purchaser shall be returned to Purchaser. If Purchaser elects to extend the Closing Date under (2), above, and the unsatisfied Purchaser’s Condition Precedent is not satisfied as of the last day of the ninety (90)-day extension period, then Purchaser shall, as its sole remedy (except in the case of a Seller default), elect to waive or terminate under (1) or (3). If Purchaser fails to timely give notice as described above, prior to termination of this Contract, Seller shall provide written notice to Purchaser confirming whether Purchaser intends to waive or terminate. Purchaser shall have five (5) business days to respond to such request whereby it may elect to waive or terminate. Failure of Purchaser to timely respond to such request shall be a deemed an election by Purchaser to terminate this Contract in its entirety in accordance with (3) above; provided, however, that Seller may negate such termination by giving notice to Purchaser that Seller has elected to extend the applicable Closing Date by ninety (90) days for the purpose of continuing its efforts to satisfy the unfulfilled Purchaser’s Condition(s) Precedent, so long as such notice is given within five (5) business days after Seller’s receipt of Purchaser’s notice of termination, and Purchaser shall again have a termination right pursuant to this Section if such Purchaser’s Condition(s) Precedent are not satisfied prior to the last day of such extended period.

7.          Closing. “Closing” shall mean the delivery to the Title Company of all applicable documents and funds required to be delivered pursuant to Section 8 hereof and unconditional authorization of the Title Company to disburse, deliver and record the same. The purchase of Lots at the closing of a Takedown shall be deemed to be “Closed” when the documents and funds required to be delivered pursuant to Section 8 hereof have been delivered to the Title Company, and the Title Company agrees to unconditionally to disburse, deliver and record the same.

 

 

(a)          On each respective Closing Date, Purchaser shall purchase the number of Lots that Purchaser is obligated to acquire hereunder in the applicable Takedown.

 

(b)          Closing Dates. The First Closing shall occur on that date which is ten (10) days after Final Approval of the Entitlements applicable to the Takedown 1 Lots is obtained (the “Takedown 1 Closing Date”), which Takedown 1 Closing Date is currently estimated to be May 2021. The Second Closing shall occur on that date which is ten (10) days after the later to occur of (i) Final Approval of the Entitlements applicable to the Takedown 2 Lots and (ii) that date which is twelve (12) months after the Takedown 1 Closing Date (the “Takedown 2 Closing Date”). The Third Closing shall occur on that date which is ten (10) days after the later to occur of (i) Final Approval of the Entitlements applicable to the Takedown 3 Lots and (ii) that date which is twelve (12) months after the Takedown 2 Closing Date (the “Takedown 3 Closing Date”). The Fourth Closing shall occur on that date which is ten (10) days after the later to occur of (i) Final Approval of the Entitlements applicable to the Takedown 4 Lots and (ii) that date which is twelve (12) months after the Takedown 3 Closing Date (the “Takedown 4 Closing Date”). The term “Closing Date” may be used to refer to each of the Takedown 1 Closing Date, the Takedown 2 Closing Date, the Takedown 3 Closing Date, and the Takedown 4 Closing Date. If Purchaser desires to accelerate any Closing Date, Purchaser may request that a Closing Date be accelerated, and if Seller is willing to do so, in its sole and absolute discretion, the parties will work together to prepare a mutually acceptable amendment to this Contract to accommodate such request. Seller shall have the right to extend the Takedown 1 Closing Date for up to ninety (90) days in order to satisfy Seller’s Condition Precedent as provided in Section 6(a) of this Contract.

 

(c)          Closing Place and Time. Each Closing shall be held at 11:00 a.m. on the applicable Closing Date at the offices of the Title Company or at such other time and place as Seller and Purchaser may mutually agree.

 

(d)          Closing Procedures. Each purchase and sale transaction shall be consummated in accordance with the following procedures:

 

(i)          All documents to be recorded and funds to be delivered hereunder shall be delivered to the Title Company to hold, deliver, record and disburse in accordance with closing instructions approved by Purchaser and Seller;

(ii)         At each Closing, Seller shall deliver or cause to be delivered in accordance with the closing instructions the following:

(1)         A special warranty deed conveying the applicable portion of the Property to be acquired at such Closing to Purchaser. The special warranty deed shall contain a reservation of easements, minerals, mineral rights and water and water rights, as well as other rights, as set forth on Exhibit B (the “Reservations and Covenants”). The special warranty deed shall also be subject to non-delinquent general real property taxes for the year of such Closing and subsequent years, District assessments and the Permitted Exceptions.

 

(2)          Payment (from the proceeds of such Closing or otherwise) sufficient to satisfy any encumbrance relating to the portion of the Property being acquired at such Closing, required to be paid by Seller at or before the time of Closing.

 

(3)          A tax certificate or other evidence sufficient to enable the Title Company to ensure the payment of all general real property taxes and installments of District assessments then due and payable for the portion of the Property being acquired at such Closing.

(iv)        At each Closing, Purchaser and Seller shall each deliver an executed settlement statement, which shall set forth all prorations, disbursements of the Purchase Price and expenses applicable to such Closing;

 

(v)          The following adjustments and prorations shall be made between Purchaser and Seller as of each Closing:

 

(1)        Real property taxes and installments of District assessments, if any, for the applicable portion of the Property for the year in which the Closing occurs shall be prorated based upon the most recent known rates, mill levy and assessed valuations; and such proration shall be final.

 

(2)          Seller shall pay real property taxes and assessments for years prior to the year in which the Closing occurs.

 

(3)          Purchaser shall pay any and all recording costs and documentary fees required for the recording of the deed.

 

(4)         Seller shall pay the base premium for the Title Policy and for any endorsement Seller agrees to provide to cure a Title Objection, and Purchaser shall pay the premium for any other endorsements requested by Purchaser in accordance with Section 4 above, including an extended coverage endorsement.

 

(5)          Each party shall pay one-half (1/2) of any closing or escrow charges of the Title Company.

 

(6)       All other costs and expenses not specifically provided for in this Contract shall be allocated between Purchaser and Seller in accordance with the customary practice of commercial real estate transactions in Arapahoe County, Colorado.

 

(vi)        Possession of the applicable portion of the Property being acquired at each Closing shall be delivered to Purchaser at such Closing, subject to the Permitted Exceptions.

 

 

(a)          all easements, agreements, covenants, restrictions, rights-of-way and other matters of record that affect title to the Property as disclosed by the Master Commitment or any Takedown Commitment, to the extent that such matters are approved or deemed approved by Purchaser in accordance with Section 4 above or otherwise approved by Purchaser (unless otherwise identified herein as an obligation, fee or encumbrance to be assumed by Purchaser or which is otherwise identified herein as a Purchaser obligation which survives such Closing, the foregoing items, however, shall not include any mortgages, deeds of trust, mechanic’s liens or judgment liens arising by, through or under Seller, which monetary liens Seller shall cause to be released or fully insured over by the Title Company, to the extent they affect any portion of the Property, on or prior to the date that such portion of the Property is conveyed to Purchaser);

 

(a)         Feasibility Review. Within five (5) days following the Effective Date, Seller shall deliver or make available (via electronic file share if available in electronic form, otherwise at Seller’s office) to Purchaser the following listed items to the extent in Seller’s actual possession; if an item listed below is not in Seller’s possession and not delivered or made available to Purchaser, but is otherwise readily available to Seller, then Purchaser may make written request to Seller to provide such item, and Seller will use its reasonable efforts to obtain and deliver or make such item available to Purchaser, but Seller will have no obligation otherwise to obtain any item not in Seller’s possession: (i) any environmental reports, soil reports and certifications pertaining to the Lots, (ii) a copy of any subdivision plat for the Property, (iii) engineering and construction plans pertaining to the Lots, (iv) biological, grading, drainage, hydrology and other engineering reports and plans and engineering and constructions plans for offsite improvements that are required to obtain building permits/certificates of occupancies for single-family detached residences constructed on the Lots; (v) any PUD, Development Agreement, Site Development Plans and other approvals pertaining to the Lots particularly and the Development generally; (vi) the Master Covenants; (vii) the Amended Service Plans; (viii) the form of Maintenance Declaration; (ix) the form of Joint Improvements Memorandum; (x) any existing ALTA or other boundary Survey of the Property; and (xi) copies of any subdivision bonds or guarantees applicable to the Lots (collectively, the “Seller Documents”). Purchaser shall have a period expiring thirty (30) calendar days following the Effective Date of this Contract within which to review the same (the “Due Diligence Period”). During the Due Diligence Period, Purchaser shall have an opportunity to review and inspect the Property, all Seller Documents and any and all factors deemed relevant by Purchaser to its proposed development and the feasibility of Purchaser’s intended uses of the Property in Purchaser’s sole and absolute discretion (the “Feasibility Review”). The Feasibility Review shall be deemed to have been completed to Purchaser’s satisfaction only if Purchaser gives written notice to Seller of its election to continue this Contract (“Continuation Notice”) prior to the expiration of the Due Diligence Period. Additionally, and notwithstanding any provision contained in this Agreement to the contrary, Purchaser’s obligations under this Contract are contingent upon its receipt of the written approval of the Corporate Investment Committee of Lennar Corporation, a Delaware corporation (“CIC Approval”). CIC Approval shall be deemed to have been obtained, if at all, by Purchaser’s delivery of the Continuation Notice on or before the expiration of the Due Diligence Period. If Purchaser fails to timely deliver the Continuation Notice or if Purchaser gives a notice of its election to terminate, this Contract shall automatically terminate, the Initial Deposit shall be promptly returned to Purchaser, Purchaser shall deliver to Seller all information and materials received by Purchaser from Seller pertaining to the Property and any non-confidential and non-proprietary information otherwise obtained by Purchaser pertaining to the Property and any information otherwise obtained by Purchaser, and thereafter the parties shall have no further rights or obligations under this Contract except as otherwise provided in Section 25 below. Seller will reasonably cooperate with Purchaser, at Purchaser’s cost and at no cost and with no liability to Seller to assist Purchaser in obtaining: (A) an updated or recertification of any of the Seller Documents, (B) reliance letters from any of the preparers of the Seller Documents, and (C) any consents that may be required so that Purchaser may receive the benefits after Closing of any agreements comprising the Seller Documents that confer a benefit and are reasonably necessary for the Purchaser’s proper and efficient development of the Property for residential use, to the extent such are obtainable by Purchaser.

 

(b)          Approval of Property. If Purchaser gives a Continuation Notice on or before the expiration of the Due Diligence Period, except as otherwise provided in this Section 10, Purchaser shall be deemed to have approved the Property, the Development and the feasibility of Purchaser’s intended uses of the Lots (subject to the terms and conditions of Section 5 and Section 6 hereof). Such approval shall be deemed to include, but shall not be limited to, Purchaser’s approval of the following as to the Property:

 

(iii)        All Seller Documents delivered to Purchaser pursuant to this Contract;

 

(iv)         All of the Permitted Exceptions;

 

(v)          The financial condition and other factors relevant to the operation of the District;

 

(vi)        Fitness for Purchaser’s intended use, accessibility of roads, and the condition and suitability for improvement and sale of the Lots, subject to Seller’s obligations under this Contract.

 

EXHIBIT A:

CONCEPTUAL DEVELOPMENT PLAN AND LOTTING DIAGRAM

EXHIBIT B:

RESERVATIONS AND COVENANTS

EXHIBIT C:

FINISHED LOT IMPROVEMENTS

EXHIBIT D:

FORM OF GENERAL ASSIGNMENT

EXHIBIT E:

FORM OF LOT DEVELOPMENT AGREEMENT

EXHIBIT F:

FORM OF TAP PURCHASE AGREEMENT

EXHIBIT G:

LOT DEVELOPMENT FEE SCHEDULE (CURRENT AS OF EFFECTIVE DATE)

EXHIBIT H:

FORM OF BUILDER DESIGNATION

EXHIBIT I:

FORM OF MAINTENANCE DECLARATION

 

RESERVATIONS AND COVENANTS

 

 

 

 

The obligations and covenants set forth herein shall be binding on Grantee, its successors and assigns, and any subsequent owners of the Property, except that homeowners shall have no obligation for any reimbursements provided herein. The obligation for reimbursements described herein shall automatically terminate (without the necessity of recording any document) with respect to any residential lot as of the date of conveyance of such residential lot, together with a residence constructed thereon, to a homebuyer. Any title insurance company may rely on the automatic termination language set forth above for the purpose of insuring title to a home.

 

FINISHED LOT IMPROVEMENTS

1.          “Finished Lot Improvements” means the following improvements and standards on, to or with respect to the Lots or in public streets or tracts in the locations as required by all approving Authorities to obtain building permits for Home improvements for the Lots (and once the Home improvements are completed, a certificate of occupancy for the Lots), and substantially in accordance with the CDs (whether or not, for the avoidance of doubt, such improvements are included on the CDs):

(b)          overlot grading together with corner pins for each Lot installed in place, graded to match the specified Lot drainage template within the CDs (but not any Overex), and any retaining walls required by the CDs (excluding any retaining walls which are specific to any single Lot); notwithstanding the foregoing, there shall be no overlot grading condition occurring on any Lot where the rear property line is more than five percent (5%) higher or more than ten percent (10%) lower than the front property line of such Lot and there shall be an overlot grading hold-down on each Lot from front setback to rear setback at a depth of 12”;

(c)         water and sanitary sewer mains and other required installations in connection therewith identified in the CDs, valve boxes and meter pits, substantially in accordance with the CDs approved by the approving Authorities, together with appropriate markers;

(d)          storm sewer mains, inlets and other associated storm drainage improvements pertaining to the Lots in the public streets as shown on the CDs (“Storm Water Improvements”);

 

(e)         curb, gutter, asphalt, sidewalks, street striping, street signage, traffic signs, traffic signals (if any are required by the approving Authorities), and other street improvements, in the private and/or public streets as shown on the CDs; Seller will either have applied a final lift of asphalt or in Seller’s discretion posted sufficient financial guarantees as required by the County for the Lots to qualify for issuance of building permits in lieu of such final lift of asphalt; provided that Seller shall timely complete such final lift of asphalt so as not to delay issuance of certificates of occupancy for Homes constructed by Purchaser;

(f)          sanitary sewer service stubs if required by the Authorities, connected to the foregoing sanitary sewer mains, installed into each respective Lot (to a point beyond any utility easement), together with appropriate markers of the ends of such stubs, as shown on the CDs;

(g)          water service stubs connected to the foregoing water mains installed into each Lot (to a point beyond any utility easement), together with appropriate markers of the ends of such stubs, as shown on the CDs;

 

(h)        Lot fill in compliance with the geotechnical engineer’s recommendation, and with respect to any filled area or compacted area, provide from a Colorado licensed professional soils engineer a HUD Data Sheet 79G Certification (or equivalent) and a certification that the compaction and moisture content recommendations of the soils engineer were followed and that the grading of the respective Lots complies with the approved grading plans, with overlot grading completed in conformance with the approving Authorities approved grading plans within a +/- 0.2’ tolerance of the approved grading plans; however, the Finished Lot Improvements do not include any Overex as provided in Section 10(e) of this Contract;

 

(i)          all storm water management facilities as shown in the CDs (“Storm Water Management Facilities”); and

 

2.          Dry Utilities. Electricity, natural gas, and telephone service will be installed by local utility companies. The installations may not be completed at the time of a Closing, and are not part of the Finish Lot Improvements; provided, however, that: (i) with respect to electric distribution lines and street lights, Seller will have signed an agreement with the electric utility service provider and paid all costs and fees for the installation of electric distribution lines and facilities to serve the Lots, and all sleeves necessary for electric, gas, telephone and/or cable television service to the Lots will be installed; (ii) with respect to gas distribution lines, Seller will have signed an agreement with the gas utility service provider and paid all costs and fees for the installation of gas distribution lines and facilities to serve the Lots; and (iii) Seller will use good faith efforts to coordinate the activities of the utility service providers with development of the Property in an attempt to achieve installation of such utilities in a timely manner. Seller will take commercially reasonable efforts to assist Purchaser in coordinating with these utility companies to provide final electric, gas, telephone and cable television service to the residences on the Lots, however, Purchaser must activate such services through an end user contract. Purchaser acknowledges that in some cases the telephone and cable companies may not have pulled the main line through the conduit if no closings of residences have occurred. Notwithstanding the foregoing, if dry utilities have not been installed upon Substantial Completion of the Finished Lot Improvements, Seller shall be obligated to have contracted for same and paid all costs and fees payable for such installation. Unless Seller has contracted for such installation and paid such costs before the Effective Date, Seller will give Purchaser notice when such contracts have been entered and such costs paid. With respect to any Finished Lot Improvements that are required by the subdivision improvement agreement applicable to the Lots but which are not addressed as part of the Finished Lot Improvements, and any other improvements which are not required for the issuance of building permits but which are required by the Authorities so that dwellings and other improvements constructed by Purchaser on the Lots are eligible for the issuance of certificates of occupancy for homes, Seller shall complete such other improvements, to the extent required by the County, so as not to delay the issuance of certificates of occupancy for residences constructed by Purchaser on the Lots.

 

3.          Storm Water Improvements and Facilities. All Storm Water Improvements and Storm Water Management Facilities shall be constructed and installed in accordance with the applicable CDs and in a manner so as not to delay the issuance of certificates of occupancy for residences constructed by Purchaser on the Lots.

4.          Tree Lawns/Sidewalks. Notwithstanding anything in this Contract to the contrary, Seller shall have no obligation to construct, install, maintain or pay for the maintenance, construction and installation of (i) any landscaping or irrigation for such landscaping behind the curb on any Lot that is to be maintained by the owner of such lot (collectively, “Tree Lawns”), but Seller shall be responsible for constructing and installing the detached sidewalks and ramps (collectively, “Sidewalks”) that are located immediately adjacent to any Lot or on a tract as required by the approved CDs, County, or any other Authority and/or applicable laws as provided in this Contract. Purchaser shall be responsible for installing any other lead walks, pathways, and driveways and any other flatwork on the Lots. Purchaser shall install all Tree Lawns on or adjacent to the Lots in accordance with all applicable CDs, requirements, regulations, laws, development codes and building codes of all Authorities.

 

(a)        Government Warranty Period. The Authorities require warranty periods (each a “Government Warranty Period”) after the final completion that is applicable to those Finished Lots Improvements that are dedicated to or owned, and accepted for maintenance by the Authorities (the “Public Improvements”). In the event defects in the Public Improvements to which a governmental warranty (each a “Governmental Warranty”) applies become apparent during the applicable Government Warranty Period, then Seller shall coordinate the repairs with the applicable Authorities and cause the service provider(s) who performed the work or supplied the materials in which the defect(s) appear to complete such repairs or, if such service providers fail to correct such defects, otherwise cause such defects to be repaired to the satisfaction of the Authorities. Any costs and expenses incurred pursuant to a Government Warranty in connection with any repairs or warranty work performed during the Government Warranty Period (including, but not limited to, any costs or expenses incurred to enforce any warranties against any service providers) shall be borne by Seller, unless such defect was caused by Purchaser or its contractors, subcontractors, employees, or agents, in which event Purchaser shall pay all such costs and expenses to the extent such defect was caused by Purchaser or its contractors, subcontractors, employees, or agents.

 

(b)         Non-Government Warranty Period. Seller warrants (“Non-Government Warranty”) to Purchaser that each Finished Lot Improvement, other than the Public Improvements, shall have been constructed in accordance with the CDs for one (1) year from the date of Substantial Completion of the Improvement (the “Non-Government Warranty Period”). If Purchaser delivers written notice to Seller of breach of the Non-Government Warranty during the Non-Government Warranty Period, then Seller shall coordinate the corrections with Purchaser and cause the service provider(s) who performed the work or supplied the materials in which the breach of Non-Government Warranty appears to complete such corrections or, if such service providers fail to make such corrections, otherwise cause such corrections to be made to the reasonable satisfaction of Purchaser. Any costs and expenses incurred in connection with a breach of the Non-Government Warranty shall be borne by Seller (including, but not limited to, any costs or expenses incurred to enforce any warranties against service providers), unless such breach was caused by Purchaser or its contractors, subcontractors, employees, or agents, in which event Purchaser shall pay all such costs and expenses to the extent the breach was caused by Purchaser or its contractors, subcontractors, employees, or agents.

(c)      EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND TO PURCHASER IN RELATION TO THE FINISHED LOT IMPROVEMENTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF HABITABILITY, MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE, AND EXPRESSLY DISCLAIMS ALL OF THE SAME AND SHALL HAVE NO OBLIGATION TO REPAIR OR CORRECT AND SHALL HAVE NO LIABILITY OR RESPONSIBILITY WITH RESPECT TO ANY DEFECT IN IMPROVEMENTS FOR WHICH NO CLAIM IS ASSERTED DURING THE APPLICABLE WARRANTY PERIOD. If and to the extent C.R.S. 13.20-806(7) applies with respect to any claim arising out of residential property, nothing in this Contract is intended to constitute a waiver of, or limitation on, the legal rights, remedies or damages provided by the Construction Defect Action Reform Act, C.R.S. ▇▇-▇▇-▇▇▇ et seq., or provided by the Colorado Consumer Protection Act, Article 1 of Title 6, C.R.S., as described in the Construction Defect Action Reform Act, or on the ability to enforce such legal rights, remedies, or damages within the time provided by applicable statutes of limitation or repose.

 

FORM OF GENERAL ASSIGNMENT

 

GENERAL ASSIGNMENT

Reference is hereby made to that certain Purchase and Sale Agreement dated as of__________  , 202 (the “Agreement”), pursuant to which PCY HOLDINGS, LLC, a Colorado limited liability company (“Seller”), has agreed to sell to LENNAR COLORADO, LLC, a Colorado limited liability company (“Purchaser”), the Property as described in the Agreement.

 

For good and valuable consideration, the receipt of which is hereby acknowledged, Seller hereby assigns and transfers to Purchaser on a non-exclusive basis, Seller’s right, title and interest in the following as the same relate solely to the Property, and to the extent the same are assignable: (i) all subdivision agreements, development agreements, and entitlements; (ii) all plats, construction plans and specifications; (iii) all construction warranties; and (iv) all development rights benefiting the Property.

 

FORM OF LOT DEVELOPMENT AGREEMENT

[to be agreed upon prior to the end of Due Diligence and attached hereto by an amendment to the Contract]

 

FORM OF TAP PURCHASE AGREEMENT

 

[to be agreed upon prior to the end of Due Diligence and attached hereto by an amendment to the Contract]

 

SKY RANCH LOT DEVELOPMENT FEE SCHEDULE

(CURRENT AS OF     /    /20    )

Fee Description	Timing	Contact Information
System Development Fees (Tap Fees) (Issued to Rangeview Metropolitan District) Water Tap Fee per unit1,2= $27,753 (for 1 SFE lot) Wastewater Tap Fee per unit= $4,847 Meter Set Fee (3/4") per unit or irrigated area = $408.23 Service Line Inspection Fee per meter= $75.00 Irrigation tap fees for common areas are assessed at $3 per square foot of landscaped area Tap fees increase by 2% per year 1To determine estimated water tap fees for detached residential products with yards, use the following link: ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇▇-▇▇▇-▇▇▇▇▇▇▇▇▇▇/ 2Attached residential products (paired, duplex, townhomes) will be assessed a water tap fee of $14,068 per unit for indoor water use only. Outdoor portions of the water tap fees are assessed at $3 per square foot of landscaped area for yard irrigation.	Building Permit	▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 303-292-3456 ▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Public Improvement Fee (Issued to Sky Ranch CAB) 2.75% of 50% of construction valuation per lot	Building Permit	▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

FORM OF BUILDER DESIGNATION

 

 

4.          Miscellaneous. This Designation embodies the entire agreement between the parties as to its subject matter and supersedes any prior agreements with respect thereto. The validity and effect of this Designation shall be determined in accordance with the laws of the State of Colorado, without reference to its conflicts of laws principles. This Designation may be modified only in writing signed by both parties. This Designation may be executed in any number of counterparts and each counterpart will, for all purposes, be deemed to be an original, and all counterparts will together constitute one instrument.

5.          Binding Effect. This Designation is binding upon and inures to the benefit of Developer and Lennar and their respective successors and assigns, and shall be recorded in the Records.

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The foregoing instrument was acknowledged before me this      day of________20 , by ▇▇▇▇ ▇▇▇▇▇▇▇ as President of Pure Cycle Corporation, a Colorado corporation, sole member of PCY HOLDINGS, LLC, a Colorado limited liability company.

	LENNAR:
	LENNAR COLORADO, LLC,
	a Colorado limited liability company

By:

Name:

Title:

STATE OF COLORADO			)
			)	ss.
COUNTY OF			)

Witness my hand and official seal.
My commission expires:
	Notary Public

 

FORM OF MAINTENANCE DECLARATION

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