Item 1.01 Entry into a Material Definitive Agreement.
Pure Cycle announced today that its wholly owned subsidiary PCY Holdings, LLC
("PCY Holdings"), a Colorado limited liability company, entered into a contract
for the Purchase and Sale of Real Estate (the "Purchase and Sale Contract") with
Lennar Colorado, LLC ("Lennar"). The Purchase and Sale Contract with Lennar
provides that, upon the terms and subject to the conditions set forth in the
Purchase and Sale Contract, PCY Holdings will sell, and the Builder will
purchase, a certain number of platted residential lots at the Sky Ranch
property, located in unincorporated Arapahoe County, Colorado, approximately
four miles south of the Denver International Airport.
The closing of the transaction contemplated by the Purchase and Sale Contract is
subject to customary closing conditions, including, among others, Lennar's
completion to its satisfaction of a title review and other due diligence of the
property, the accuracy of the representations and warranties made by PCY
Holdings contained in the Purchase and Sale Contract, and a commitment by the
title company to issue to the Builder a title policy, subject to certain
conditions. Lennar will have a 30-day due diligence period. Within seven
business days of the execution of the Purchase and Sale Contract, Lennar is
obligated to make earnest money deposits after the due diligence period and
final approval of the entitlements for the property. If the Purchase and Sale
Contract is terminated prior to the expiration of the due diligence period, then
the earnest money deposit must be refunded to Lennar. Otherwise, the earnest
money deposit or deposits will be applied to the payment of the purchase price
of the lots at closing in accordance with a takedown schedule or be paid to PCY
Holdings, subject to certain conditions. The purchase price for townhome lots
will be $40,000 and the purchase price for 45' single family lots will be
$87,000.Pursuant to the Purchase and Sale Contract, PCY Holdings must use
commercially reasonable efforts to obtain final approval of the entitlements for
the property on or before nine months after the expiration of the due diligence
period, but PCY Holdings will have the right to extend the date for obtaining
final approval of the entitlements for up to six months after the initial
nine-month period.
PCY Holdings has made customary representations and warranties in the Purchase
and Sale Contract for a transaction of this nature. Certain of PCY Holdings'
representations and warranties are subject to knowledge and other similar
qualifications and will survive for 12 months after each closing of a takedown
of lots. The assertions embodied in the representations and warranties were made
solely for purposes of the Purchase and Sale Contract between PCY Holdings and
Lennar and may be subject to important qualifications and limitations agreed to
by the parties in connection with the negotiated terms. Pure Cycle's
shareholders are not third-party beneficiaries under the Purchase and Sale
Contract and should not rely on the representations and warranties or any
descriptions thereof as characterizations of the actual state of facts or
conditions of PCY Holdings or any of its affiliates.
The agreement with Lennar follows a Lot Development Agreement format under which
payments are due upon satisfaction of certain milestones including platted lot
delivery, completion of wet utilities, and the final payment due upon delivery
of completed, ready-to build, finished lots.
Item 1.02 Termination of a Material Definitive Agreement.
Pure Cycle Corporation announced today that PCY Holdings terminated its Contract
for the Purchase and Sale Contract with Meritage Homes of Colorado ("Meritage")
with an effective date of such termination of February 16, 2021. The Purchase
and Sale Contract with Meritage provided that, upon the terms and subject to the
conditions set forth in the Purchase and Sale Contract, PCY Holdings would sell,
and the Builder would purchase, a certain number of platted residential lots at
the Sky Ranch property, located in unincorporated Arapahoe County, Colorado.
The Purchase and Sale Contract with Meritage were terminated as a result of
factors out of PCY Holdings' control.
Item 7.01 Regulation FD Disclosure.
On February 22, 2021, Pure Cycle issued a press release regarding the entry into
the Purchase and Sale Contract with Lennar and the termination of the Purchase
and Sale Contract with Meritage. A copy of the press release is attached hereto
as Exhibit 99.1.
The information contained in this Item 7.01 of Form 8-K, including the
accompanying Exhibit 99.1 is being furnished, and shall not be deemed to be
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of that
section. The information contained in the press release shall not be
incorporated by reference into any filing under the Securities Act of 1933, as
amended, or the Exchange Act, whether made before or after the date hereof,
except as shall be expressly set forth by specific reference in such a filing.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Contract for Purchase and Sale of Real Estate, dated February 19,
2021, by and between PCY Holdings, LLC and Lennar Colorado, LLC
99.1 Press Release dated February 22, 2021
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