Exhibit (10)(g)
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CONTRACT FOR PURCHASE AND SALE
OF
REAL PROPERTY LOCATED IN ASHEBORO, NC
THIS CONTRACT FOR PURCHASE AND SALE OF REAL PROPERTY (this "Agreement") is
made and entered into as of the 28th day of January, 1999 by and between
B. B. WALKER COMPANY, a North Carolina corporation with offices at 414 East
Dixie Drive, Asheboro, North Carolina 27203 ("Walker") and H. WILLIAM HULL,
JR., a resident of Rocky Mount, North Carolina (Hull and any person or
entity to whom Hull may assign his rights and obligations hereunder as
permitted in Paragraph 18 shall be referred to herein as "BUYER").
BACKGROUND STATEMENT
A. Walker is the present owner of the eight (8) lots and parcels of real
estate located in Asheboro, North Carolina as are outlined in red on that
map of survey entitled "Plat Prepared for Walker Shoe Company" prepared by
Steven D. Brown, Registered Land Surveyor (Registration Number L-1435) dated
June 22, 1987. The eight lots owned by Walker shall be referred to herein
as the "Walker Property". The two lots of the Walker Property located on
the eastern side of Third Street as shown on the Survey (hereinafter
sometimes referred to as the "Eastern Tract") and the buildings and
improvements located thereon are currently used by Walker as a manufacturing
facility and for office and retail purposes and such lots and the buildings
and improvements located thereon shall be referred to herein as the
"Manufacturing Facility". The six lots of the Walker Property located on the
western side of Third Street as shown on the Survey shall be referred to
herein as the "Western Tract".
B. Walker has entered into six (6) contracts to purchase the six (6) lots
and parcels of real estate located in Asheboro, North Carolina. The six
lots Walker has agreed to purchase are more particularly described in the
Additional Property Contracts and shall be referred to herein as the
"Additional Property". The six contracts to purchase the Additional
Property, some of which Walker entered into directly with the Sellers
thereunder and some of which Walker has obtained by assignment from King
Cecil, LLC, set forth the following information with respect to each such
contract: the sellers thereunder, the contract price payable thereunder, the
property subject thereto, the earnest money deposited by the buyer
thereunder, the commissions, if any, payable by the buyer thereunder, and
the closing date thereunder. The six contracts to purchase the Additional
Property shall be referred to herein as the "Additional Property Contracts".
C. B. B. Walker Shoe Foundation (the "Foundation") is the owner of that
certain lot fronting on Atlantic Avenue in Asheboro, North Carolina which is
outlined in yellow on the Survey and which is the property acquired by the
Foundation pursuant to that deed recorded in Book 952 at Page 552 in the
Office of the Register of Deeds of Randolph County, North Carolina (the
"Foundation Lot").
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D. The Western Tract of the Walker Property, the Additional Property, and
the Foundation Lot have recently been rezoned by the City Council of Asheboro
to a B-2 zoning district under the City of Asheboro's zoning ordinance which
district permits the use of such properties for office, retail, and motel and
hotel purposes. In addition, (i) the portion of Washington Street between
the Walker Property and the Additional Property; (ii) that portion of Second
Street as is outlined in green on the survey as well as that unopened portion
of Second Street located on Lot 6 of the Walker Property; and (iii) all of
Atlanta Avenue from First Street to Third Street and from Third Street to Cox
Road have been closed by all appropriate action of the City Council of
Asheboro subject to the fulfillment of certain conditions precedent as more
specifically discussed below. Buyer desires: (i) to acquire the Walker
Property for a purchase price of $5,600,000; (ii) to acquire the Additional
Property by assuming the Additional Property Contracts and paying the purchase
prices due thereunder; and (iii) to acquire the Foundation Lot from the
Foundation for the sum of $25,000.00. Walker desires to sell the Walker
Property to Buyer and to assign the Additional Property Contracts to Buyer for
the purchase price of $5,600,000. Walker and Buyer anticipate that Buyer and
the Foundation will, prior to the expiration of the Examination Period, enter
into a contract providing for the purchase and sale of the Foundation Lot by
the Foundation to the Buyer for a purchase price of $25,000.00 (the
"Foundation Lot Contract").
E. Following the acquisition of the Walker Property, the Additional
Property, and the Foundation Lot Buyer contemplates constructing upon
portions of the Walker Property, the Additional Property and the Foundation
Lot various improvements including an office building and a retail building.
If so, Walker desires to rent from Buyer approximately 12,000 square feet of
office space in the office building to be constructed by Buyer (the "Office
Lease") and approximately 8,000 square feet of retail space in the retail
building to be constructed by Buyer (the "Retail Lease") and Buyer desires
to rent such office and retail space to Walker.
F. Walker and Buyer contemplate that title to the Walker Property will be
conveyed to Buyer in a single closing but that Walker will lease back from
Buyer the two tracts located on the eastern side of Third Street (Lot 1
and Lot 2 as shown on the Survey) and the buildings and improvements located
thereon comprising the Manufacturing Facility for a lease term of nine (9)
months following the closing date (the "Manufacturing Facility Lease").
G. Walker and Buyer desire by this document to set forth their agreement
with respect to the purchase and sale of the Walker Property, the assignment
to Buyer of the Additional Property Contracts, the closings of Atlantic
Avenue, Washington Street, and Second Street and understandings with regard
to certain other matters.
NOW THEREFORE IN CONSIDERATION of the mutual agreements and promises set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Walker and Buyer hereby agree
as follows:
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1. Buy/Sell Agreement. Walker agrees to sell and Buyer agrees to purchase,
on the terms hereinafter stated, all of Walker's right, title and interest
in and to the Walker Property, including all buildings and improvements
located thereon. Walker's equipment, machinery, inventory, furniture and
other items of personal property located on or used in connection with the
Property (the "Excluded Property") shall not be included within the Walker
Property and none of such Excluded Property shall be conveyed or sold
hereunder. All Excluded Property shall be removed by Walker at or prior to
the termination of the Manufacturing Facility Lease. In addition to its
right and obligation to remove all items of the Excluded Property, upon the
termination of the Manufacturing Facility Lease, Walker shall be entitled to
remove, but shall not be required to remove, any and all air compressors and
air cleaning equipment, all telephone systems, all building security systems
and the Flagpole and bell located at the entrance to the Manufacturing
Facility as Walker may elect (the "Other Excluded Property") without regard
to whether such Other Excluded Property constitutes personal property or
fixtures. Walker shall have no obligation to replace any Excluded Property
or Other Excluded Property or to repair or restore any damage resulting from
the removal thereof. Any Excluded Property or Other Excluded Property which
is not removed by Walker within thirty (30) days following the expiration of
the Manufacturing Facility Lease shall become and remain the property of Buyer.
2. Purchase Price. Subject only to the prorations and adjustments provided
for herein, the total purchase price to be paid to Walker by Buyer for the
Walker Property shall be FIVE MILLION SIX HUNDRED THOUSAND AND NO/100 DOLLARS
($5,600,000.00) which amount shall be referred to herein as the "Purchase
Price". Buyer shall pay the Purchase Price in the following manner:
a. Earnest Money. The sum of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000)
in cash or by other immediately available funds (the "Earnest Money") shall
be deposited by Buyer as earnest money with Lawyers Title Insurance Company
of North Carolina (the "Escrow Agent") contemporaneously with Buyer's
execution and delivery of this Agreement. A failure by Buyer to deposit the
Earnest Money contemporaneously with its execution and delivery hereof shall
constitute an automatic recission of this Agreement and of any obligation of
Walker to Buyer with respect to the conveyance of the Walker Property and the
assignment of the Additional Property Contracts. The Earnest Money shall be
held by the Escrow Agent in an interest bearing account in a federal
depository institution as selected by Escrow Agent and any interest earned
upon the Earnest Money shall be added thereto and shall become a part of such
Earnest Money to be disbursed as provided herein. In the event that the sale
provided for herein is consummated, the Earnest Money shall be paid over to
Walker at closing and credited against the cash portion of the Purchase Price.
In the event that Buyer exercises any right to terminate this Agreement as
provided herein, the Earnest Money shall be refunded to Buyer. In the event
that Buyer does not terminate this Agreement pursuant to a right provided
herein and the sale contemplated hereunder is not consummated, then the
earnest money shall be disbursed to the party entitled thereto as provided
for in Paragraph 17.
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b. Cash at Closing. TWO MILLION TWO HUNDRED THOUSAND AND NO/100
DOLLARS ($2,200,000.00) in cash or immediately available funds shall be paid
by Buyer to Walker at the closing of the sale contemplated hereunder which
sum shall include the Earnest Money. The amount of cash due at closing
shall be adjusted if necessary to reflect the prorations and adjustments
provided for in Paragraph 11 hereof.
c. Purchase Money Note. THREE MILLION FOUR HUNDRED THOUSAND AND NO/100
DOLLARS ($3,400,000.00) shall be paid by Buyer executing and delivering to
Walker at the closing Buyer's purchase money promissory note in that face
amount (the "Purchase Money Note"). The Purchase Money Note shall: (i)
provide for interest prior to default at a variable rate equal to the
interest rate announced and established by NationsBank, NA from time to time
as its Prime Rate; (ii) provide for monthly payments of interest only
commencing on the first day of the first month following the closing and
continuing on the first day of each month thereafter to and including the
maturity date; (iii) provide for a maturity date which shall be the first
anniversary of the closing on which maturity date the entire principal amount
of the Purchase Money Note, together with all accrued unpaid interest thereon,
shall be due and payable in one lump sum payment; (iv) be prepayable in whole
or in part at any time without prepayment penalty or fee; (v) be secured by a
purchase money deed of trust constituting a first priority lien upon the
Manufacturing Facility (the "Purchase Money Deed of Trust"); and (vi) provide
that it is a non-recourse indebtedness as provided for in NCGS Section
45-21.38 The Purchase Money Deed of Trust shall: (i) constitute a first
priority lien upon that portion of the Walker Property lying east of Third
Street (Lots 1 and 2 as shown on the Survey); and (ii) contain a due on sale
clause pursuant to which the Purchase Money Note shall become due and payable
in the event the security property or any interest therein or portion thereof
is conveyed except coincident to rearrangement of utility services on the
Walker Property and the Additional Property provided such rearrangements do
not materially adversely affect Walker's use of the Manufacturing Facility
pursuant to the Manufacturing Facility Lease.
The Purchase Price due Walker for the Walker Property shall not include
credit for the purchase prices to be paid under the Additional Property
Contracts which purchase prices shall be paid to the sellers thereunder by
Buyer when and as due pursuant to the Additional Property Contracts following
the assignment thereof to Buyer as provided in Paragraph 4 below. In addition
to paying the Purchase Price, in exchange for Walker's assignment of the
Additional Property Contracts to Buyer, Buyer shall reimburse Walker at
Closing for the earnest money deposits made by Walker under such Additional
Property Contracts and are to be credited against the purchase prices due
under the Additional Property Contracts and Buyer shall pay when and as due
the commissions payable by Walker in connection with the closings under the
Additional Property Contracts The Purchase Price shall also be in addition to
the amount due the Foundation for the purchase of the Foundation Lot, pursuant
to the Foundation Lot Contract.
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3. Matters of Title. Matters relating to the nature and extent of the title
to the Walker Property and to the Additional Property shall be as follows:
a. Marketable Title of the Walker Property. Buyer's obligations
hereunder shall be subject to and conditioned upon Walker being able to
convey good and marketable title in indefeasible fee simple to the Walker
Property free of monetary liens and encumbrances subject only to month to
month tenants in possession, ad valorem taxes for the calendar year of
closing (which shall be prorated on a calendar year basis) and such
easements, rights of way and restrictions and matters of record as may be
customary and usual with respect to properties comparable to the Walker
Property and which do not materially affect the value of the Walker Property
or its potential use for office, retail and motel and hotel purposes,
including without limitation those easements, restrictions and matters of
record (collectively, the "Permitted Exceptions") and upon Buyer being able
to obtain, at its sole cost and expense (including without limitation title
examination fees), a title insurance binder from a reputable title insurance
company selected by Buyer by which such title insurance company commits to
issue a title insurance policy in favor of Buyer subject only to such
Permitted Exceptions.
b. Cure of Title Defects. No later than two days after the expiration
of the Examination Period as defined below, Buyer shall notify Walker in
writing of any matter of record affecting title to the Walker Property as of
the expiration of the Examination Period which Buyer deems objectionable.
In the event Buyer fails to notify Walker of any such objections within such
time period, then Buyer shall be deemed to have agreed to accept the Walker
Property subject to all matters of record as of the expiration of the
Examination Period; provided, however, that Walker shall remain obligated to
pay and discharge any monetary liens and encumbrances upon the Walker
Property or otherwise to obtain a release of the Walker Property from such
liens and encumbrances at or prior to closing, it being agreed that the cash
portion of the Purchase Price may be used for that purpose. In the event
Buyer notifies Walker in writing of a matter of record affecting title to the
Walker Property (other than a monetary lien or encumbrance to be discharged
or released at closing) to which Buyer objects, Walker shall have thirty (30)
days after its receipt of such notice to cure the title matter objected to by
Buyer and the closing hereunder shall be postponed for such time. Walker
shall, however, have no obligation to cure any such title objection. If
Walker cures the title matter to which Buyer has objected within such thirty
(30) day time period, then the sale provided for herein shall be consummated
as herein provided. If, however, Walker is unable to cure the title matter to
which Buyer has objected within such time period or is unwilling to do so,
then Buyer may at its option either: (i) terminate this Agreement and obtain
a full refund of the Earnest Money; or (ii) elect to waive its objection to
the title matter and to complete the closing as provided herein notwithstanding
the continued existence of such title matter and without any credit against or
diminution in the Purchase Price.
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c. Marketable Title to the Additional Properties. Buyer's obligations
hereunder shall be conditioned upon the sellers under the Additional Property
Contracts being able to convey good and marketable title in indefeasible fee
simple to the Additional Property subject only to the rights of month to
month tenants in possession thereof, ad valorem taxes for the calendar year
in which the closing occurs (which taxes shall be prorated as provided in the
Additional Property Contracts) and to such other title exceptions and matters
of record as is contemplated in the Additional Property Contracts. No later
than the expiration of the Examination Period, Buyer, at its sole cost and
expense, shall cause the title to the Additional Property to be examined by
an attorney selected by Buyer and Buyer shall provide Walker with an opinion
of title from such attorney indicating the owners of the Additional Property
and setting forth the matters of record affecting the title to such
Additional Property. No later than two days following the expiration of the
Examination Period, Buyer shall notify Walker in writing of any matter of
record affecting title to any of the Additional Property as of the expiration
of the Examination Period which Buyer finds objectionable and which Buyer
reasonably believes is not a title matter which is permitted pursuant to the
applicable Additional Property Contract. Buyer shall be deemed to have
agreed to accept the Additional Property subject to all matters of record
affecting title thereto as of the expiration of the Examination Period which
are not objected to in writing by Buyer within such time period; provided,
however that monetary liens and encumbrances affecting title to any of the
Additional Property shall be paid and discharged as provided for in the
applicable Additional Property Contract so that the Sellers thereunder can
convey the properties free of liens and other monetary encumbrances. In the
event that Buyer notifies Walker in writing within such time period of a
matter of title affecting any of the Additional Property which Buyer finds
objectionable and which Buyer reasonably believes is not a title exception
permitted under the applicable Additional Property Contract, then Walker
shall notify the seller under the applicable Additional Property Contract
and will use good faith efforts to cause the seller to cure or remedy the
title matter as contemplated in the applicable Additional Property Contract
or in such other manner as may be reasonably acceptable to Buyer. Walker
shall not, however, be obligated to cure any title matter affecting the
Additional Property, and if any title matter affecting any of the Additional
Property is not cured to Buyer's reasonable satisfaction at or prior to
closing, then Buyer may elect: (i) to terminate this Agreement and obtain
a refund of the Earnest Money; (ii) to close the purchase of the Walker
Property and to take an assignment of all but the affected Additional
Property Contracts; or (iii) to waive its objection to the title matter and
complete the closing of the Walker Property and to take an assignment of all
of the Additional Property Contracts notwithstanding the continued existence
of such title matter. One or more of the Additional Properties may be
subject to month to month leases. If required by the applicable Additional
Property Contract, Buyer shall accept title to the Additional Property
subject to such month to month leases, provided the same may be terminated
on not more than thirty (30) days notice.
d. Deed of Conveyance. Walker shall convey title to the Walker
Property to Buyer at the closing by a general warranty deed subject only to
the Permitted Exceptions and such other matters of title agreed to or
accepted by Buyer in accordance with the terms hereof.
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e. Walker's Lien Affidavit. Walker shall deliver to Buyer at closing
Walker's Affidavit and Indemnity Agreement in such standard form as required
by Buyer's title insurer to the effect that all work, labor, services, and
materials furnished to or in connection with the Walker Property within the
120 days immediately preceding the closing have been fully paid for so that
no mechanic's or materialmen's lien may be properly filed against the
Property, provided that if any such lien is improperly filed but is based
upon an allegation that Walker contracted for the sums allegedly due, Walker
shall indemnify and save Buyer harmless therefrom.
f. Costs of Title Examination and Insurance. Buyer shall pay all costs
of any title examinations and title insurance which Buyer obtains or
procures in connection with the Walker Property or the Additional Property.
Walker shall have no obligation to provide Buyer with an attorney's opinion
of title or title insurance with respect to either the Walker Property or
the Additional Property but Walker shall, upon Buyer's request therefor,
make available to Buyer a copy of any existing title insurance policy which
Walker may have upon the Walker Property and will request of the sellers
under the Additional Property Contracts copies of any title insurance
policies which such sellers may have with respect to the Additional Property.
4. The Additional Property Contracts. Walker hereby represents to Buyer
that: (i) true copies of the Additional Property Contracts are attached;
(ii) all of such Additional Property Contracts are in full force and effect
free of default by the buyer thereunder; and (iii) Walker has the full
right, power and authority to assign the Additional Property Contracts to
Buyer as contemplated herein. Walker agrees that it shall not agree to
any alteration, modification, or termination of any of the Additional
Property Contracts without first having obtained Buyer's consent thereto
which consent shall not be unreasonably withheld or delayed. At all times
prior to the closing hereunder, Walker shall cooperate with Buyer with
respect to the Additional Property Contracts and shall authorize Buyer to
make such examinations and inspections of the Additional Property as Walker
may be entitled to make pursuant to the Additional Property Contracts.
Except as otherwise provided herein, Walker shall, at the closing hereunder,
assign to Buyer all of Walker's rights, title and interest in, to and under
the Additional Property Contracts as the buyer thereunder and Buyer shall
assume the performance of all of Walker's obligations under all such
Additional Property Contracts, including without limitation the obligation
to pay the purchase prices as may be due thereunder to the sellers under
such Additional Property Contracts. Such assignment and assumption shall be
evidenced by a written assignment and assumption agreement in standard and
customary form (the "Assignment and Assumption Agreement"). In addition,
Buyer shall at closing hereunder reimburse Walker for all earnest money
deposited by Walker pursuant to the Additional Property Contracts to the
extent such earnest money deposits are to be credited against the purchase
prices due under the Additional Property Contracts and shall assume Walker's
obligation to pay such commissions as may be due from Walker in connection
with such Additional Property Contracts. In the event that the
scheduled closing date under any of the Additional Property Contracts
occurs prior to the closing hereunder, then Walker may, but shall not be
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obligated to, attempt to obtain an extension of the time for closing under
such Additional Property Contract. In the event that Walker cannot or
chooses not to obtain such an extension, then Walker shall complete the
purchase of the property as provided for in any such affected Additional
Property Contract and Walker shall thereafter convey such Additional
Property to Buyer at the closing hereunder. The purchase price to be paid
by Buyer for those portions of the Additional Property which Walker has
acquired prior to the closing hereunder in accordance with its obligation
set forth in the immediately preceding sentence: (i) shall be equal to the
total of (a) the purchase prices paid for such Additional Property by Walker
pursuant to the Additional Property Contracts plus (b) the total of all
reasonable closing costs and expenses incurred by Walker in completing the
acquisition of such Additional Property, including without limitation any
commissions paid by Walker in connection with such purchases and any loan
fees actually incurred by Walker in the event that Walker obtains third party
financing to finance such acquisitions plus (c) an amount equal to the
interest on the total of the amounts referenced in clauses (a) and (b) that
would accrue at the per annum rate equal to the Prime Rate of NationsBank,
N.A. plus one and one-half percent for the period from the expenditure of
each such sum to the closing date hereunder; (ii) shall be in addition to the
$5,600,000 Purchase Price provided for herein; and (iii) shall be paid by
Buyer in full at closing in cash or by immediately available funds. If any
of the Additional Property Contracts are assigned to Buyer as contemplated
herein, then from and after such assignment, Buyer shall indemnify and
defend Walker from and against any and all liabilities and obligations under
or associated with the Additional Property Contracts assigned to Buyer.
5. The Foundation Lot Contract. Promptly following the execution and
delivery of this Agreement, the Buyer shall use good faith efforts to enter
into an Agreement with the Foundation for the purchase by the Buyer of the
Foundation Lot for a purchase price of $25,000 and subject to standard
provisions and any non-standard provisions approved by Buyer. In the event
that the Foundation at any time prior to the expiration of the Examination
Period offers to sell the Foundation Lot to Buyer for a purchase price of
$25,000 payable in cash (the "Foundation Offer"), then Buyer shall, within
seventy-two (72) hours following Buyer's receipt of the Foundation Offer,
either (i) accept the Foundation's Offer and purchase the Foundation Lot as
provided therein; or (ii) waive the condition precedent to Buyer's
obligation to purchase the Walker Property hereunder relating to the Buyer's
purchase of the Foundation Lot and proceed with the closing hereunder without
purchasing the Foundation Lot. In the event that prior to closing, Buyer has
been unable to enter into a contract with the Foundation to purchase the
Foundation Lot despite Buyer's good faith efforts to do so and the Foundation
has not offered to sell the Foundation Lot to Buyer pursuant to the Foundation
Offer, then Buyer shall have the right either: (i) to terminate this Agreement
and receive a refund of the Earnest Money; or (ii) to waive the requirement
for the Foundation Lot Contract and proceed to closing without having entered
into the Foundation Lot Contract. In the event that Buyer acquires the
Foundation Lot prior to the closing hereunder and thereafter the closing
hereunder does not occur for any reason, then, notwithstanding any termination
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of this Agreement and regardless of whether either Walker or Buyer has
defaulted hereunder, Walker shall, promptly following the failure of the
closing hereunder to have occurred, purchase the Foundation Lot from Buyer
and Buyer shall sell the Foundation Lot to Walker for a purchase price equal
to the purchase price paid by Buyer to the Foundation for the purchase of the
Foundation Lot plus reasonable closing costs actually incurred and paid by
Buyer in connection with such purchase. In the event that Buyer enters into
the Foundation Lot Contract prior to the closing hereunder, the closing
thereunder has not occurred, and the closing hereunder does not occur for
any reason, then, notwithstanding any termination of this Agreement and
regardless of whether either Walker or Buyer has defaulted hereunder, Buyer
shall assign to Walker the Foundation Contract without any payment therefor
from Walker except for the reimbursement to Buyer of any earnest money
deposited by Buyer with the Foundation pursuant to the Foundation Lot Contract.
6. Examination Period. The time from the date of this Agreement until 5:00
p.m. on February 26, 1999 shall be referred to herein as the "Examination
Period".
a. Inspections and Examinations. During the Examination Period Buyer
shall be entitled to make and conduct such inspections, appraisals, physical
evaluations, environmental assessments, surveys, and other examinations of
the Walker Property, the Additional Property, and the Foundation Lot as
Buyer may elect in its discretion to make and as may be permitted under the
Additional Property Contracts and the Foundation Lot Contract. Walker
agrees, subject only to reasonable prior notice, to permit Buyer and Buyer's
representatives and agents access to the Walker Property for the purpose of
making and conducting such inspections, appraisals, physical evaluations,
environmental assessments, surveys and examinations. All of such
inspections, appraisals, physical evaluations, environmental assessments,
surveys and other examinations: (i) shall be made at Buyer's sole cost, risk
and expense; (ii) shall be made without damage or physical injury to the
Walker Property or the Additional Property; and (iii) shall be made
following reasonable prior notice to Walker as to the Walker Property.
Walker reserves the right to accompany Buyer and Buyer's representatives
during any entry upon the Walker Property by Buyer or Buyer's
representatives pursuant to this Paragraph 6. Buyer shall repair and restore
any damage to the Walker Property or the Additional Property resulting from
any entry upon the Walker Property or the Additional Property made by Buyer
or Buyer's representatives and agents and Buyer shall indemnify and holder
Walker harmless from and against any and all claims made against Walker or
losses or damages incurred by Walker as a result of or arising out of any
entries upon the Walker Property or the Additional Property made by Buyer
or Buyer's representatives and agents.
b. Termination Right. Buyer may, for any reason sufficient to itself,
terminate this Agreement at any time prior to the expiration of the
Examination Period by written notice to Walker which notice, to be effective,
must be received by Walker prior to the expiration of the Examination Period.
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Upon Walker's receipt of such written notice of termination from Buyer, this
Agreement shall terminate, Buyer shall be entitled to a refund of the Earnest
Money and neither party shall have any liability to the other hereunder
except that Buyer shall remain liable upon its indemnity agreement set forth
in Paragraph 6(a) above and the parties shall be obligated to buy and sell
the Foundation Lot or to assign the Foundation Lot Contract as provided in
Paragraph 5 above. If Buyer does not provide written notice of termination
pursuant to this Paragraph 6(b) prior to the expiration of the Examination
Period, then Buyer shall have no further right to terminate this Agreement
pursuant to this Paragraph 6.
c. AS IS, WHERE, IS Sale. Walker makes no warranties of any nature,
express or implied, with respect to the physical condition or state of repair
of the Walker Property or of the Additional Property or with respect to any
other matter relating to or affecting the Walker Property, the Additional
Property or the Foundation Lot, except as may otherwise be provided herein.
The Walker Property and any of the Additional Property conveyed by Walker to
Buyer is being sold hereunder in its AS IS, WHERE IS CONDITION WITH ALL
FAULTS. Walker shall have no duty to make any repairs to any of the Walker
Property or the Additional Property or to restore any damage thereto whether
now existing or suffered subsequent to the date hereof.
7. Rezoning and Street Closings. With respect to the rezoning of the
Western Tract of the Walker Property, the Eastern Tract of the Walker
Property, the Additional Property, and the Foundation Lot, and the closing
of those portions of Atlantic Avenue, Second Street and Washington Street,
Walker and Buyer agree as follows:
a. Rezoning. Walker and Buyer acknowledge to one another that the
City Council of the City of Asheboro at its meeting on January 7, 1999
unconditionally rezoned the Western Tract of the Walker Property, the
Additional Property, and the Foundation Lot to a B-2 zone under the City
of Asheboro's zoning ordinance. Buyer agrees that such B-2 zoning
classification is acceptable to it and that Buyer has and does hereby
approve of the present B-2 zoning classification applicable to the Western
Tract of the Walker Property, the Additional Property, and the Foundation Lot.
b. Street Closings. Walker and Buyer acknowledge to one another that
the City Council of the City of Asheboro, at its meeting on January 7, 1999,
took such action as was necessary to close the portion of Washington Street
between the Walker Property and the Additional Property, and the portion of
Atlantic Avenue from First Street to Third Street subject only to Walker's
acquisition of the Additional Property or Buyer's acquisition of the
Additional Property, the Western Tract of the Walker Property, and the
Foundation Lot. Walker and Buyer also acknowledge to one another that the
portion of Second Street located to the north of Atlantic Avenue as shown on
the Survey as well as that portion thereof located south of Atlantic Avenue
which constitutes one of the Additional Properties has previously been
unconditionally closed by the City Council of the City of Asheboro. Buyer
agrees that it has reviewed and approved the current status of the closing
of the portions of Washington Street and of Second Street as set forth above
and that B. B. Walker shall not be obligated to take any further action in
connection therewith.
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c. Rezoning of Eastern Tract. Walker and Buyer acknowledge to one
another that Walker has filed an application with the City of Asheboro
requesting that the Eastern Tract of the Walker Property be rezoned to a
B-2 zoning classification under the City of Asheboro's zoning ordinance.
With respect to such rezoning, Walker and Buyer agree that: (i) Walker
shall use good faith efforts to pursue the pending rezoning application and
to obtain a rezoning of the Eastern Tract of the Walker Property to a B-2
zoning classification prior to the closing hereunder; (ii) provided it shall
have used good faith efforts to obtain such rezoning, Walker shall have no
liability to Buyer in the event that the rezoning is not obtained; and
(iii) the completion of the rezoning of the Eastern Tract to a B-2 zoning
classification prior to the closing hereunder shall be a condition precedent
to the Buyer's obligation hereunder to complete the closing of the Walker
Property and the Additional Property as set forth herein. In the event,
that the Eastern Tract of the Walker Property has not been rezoned to a B-2
zoning classification on or before April 15, 1999, Buyer may terminate this
Agreement and obtain a refund of the Earnest Money Deposit or Buyer may
elect to waive this condition. Upon any termination Buyer and Walker shall
be obligated to take the actions with respect to the Foundation Lot or
Foundation Lot Contract as are set forth in Paragraph 5 above.
8. Completion of Conditions to Closing of Atlantic Avenue to the East of
Third Street. Walker believes and understands that the portion of Atlantic
Avenue located to the east of Third Street which is shown on the Survey has
been closed by the city council of Asheboro subject only to (i) Walker
conveying to the city of Asheboro a strip of property ten feet in width
along the southern boundary line of the portion of Lot 2 of the Walker
Property as is outlined in pink on the Survey for use by the city to expand
the right of way for Telephone Avenue from forty feet to fifty feet; and
(ii) Walker causing Telephone Avenue to be opened and paved from the current
end thereof as shown on the Survey to Cox Road as shown on the Survey, the
cost of which opening and paving is estimated to be less than $100,000.
Oliver Rubber Company has filed a lawsuit in the Superior Court of Randolph
County challenging the validity of the closing of Atlantic Avenue to the
east of Third Street. With respect to the completion of the conditions to
the closing of Atlantic Avenue east of Third Street and the objection filed
by Oliver Rubber Company, Walker and Buyer hereby agree as follows:
a. Fulfillment of Conditions. On or prior to the Closing Date, Walker
shall convey to the city of Asheboro the ten feet wide strip along the
southern boundary of the portion of Lot 2 as is outlined in pink on the
Survey for use by the city to widen the right of way for Telephone Avenue
(the "Ten Feet Wide Strip"), as to which Buyer consents to such conveyance
of the Ten Feet Wide Strip and agrees that such conveyance shall not affect
Buyer's obligations hereunder or result in a diminution of the Purchase
Price. Buyer will be responsible for opening and paving Telephone Avenue
and paying the costs thereof, as may be necessary to fulfill the conditions
to the closing of the eastern portion of Atlantic Avenue, and Walker shall
have no further responsibility with respect to the opening and paving of
Telephone Avenue or with respect to the closing of Atlantic Avenue.
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b. Oliver Rubber Company Lawsuit. Walker shall use good faith efforts
to cause Oliver Rubber Company to dismiss its challenge to the closing of
the portion of Atlantic Avenue to the east of Third Street and to negotiate
a settlement with Oliver Rubber Company of its objections to such closing.
Walker shall not, however, be obligated to participate in the pending
lawsuit against the city and if Walker shall have used good faith efforts
to negotiate a settlement with Oliver Rubber Company of its objections to
the closing of Atlantic Avenue, then Walker shall have no liability to Buyer
in the event that a settlement cannot be achieved. Buyer agrees that in
order to obtain a dismissal of the Oliver Rubber Company's challenge to the
closing of Atlantic Avenue, Walker may enter into a settlement agreement with
Oliver Rubber Company providing for the conveyance to Oliver Rubber Company
of a strip of land along the southern boundary of Lot 2 of the Walker Property
which strip of land shall be approximately 25 feet wide at its widest point
(which shall be at the intersection of Third Street and Telephone Avenue) and
which shall taper from such widest point to a width of approximately 10 feet.
Buyer consents to the conveyance of such strip of land provided the total
acreage to be included therein does not exceed .6 acres and agrees that such
conveyance shall not relieve Buyer of its obligations hereunder or result in
a diminution in the Purchase Price. In the event that Walker enters into a
settlement agreement with Oliver Rubber Company as described above, Walker
shall be entitled to receive from Oliver Rubber Company all amounts paid by
Oliver Rubber Company for the strip of land to be conveyed to it and any
amounts received by Walker shall not be credited against the Purchase Price.
In addition, Buyer shall remain responsible for paving and opening the unopened
portion of Telephone Avenue notwithstanding the fact that Walker may have
entered into a settlement agreement with Oliver Rubber Company as set forth
above. The settlement of Oliver Rubber Company's objection to the closing of
Atlantic Avenue and the dismissal of its petition challenging such closing
shall be a condition precedent to Buyer's obligations to purchase the Walker
Property and the Additional Property as provided for herein and in the event
that the Oliver Rubber Company objection has not been settled and its petition
dismissed prior to April 15, 1999, Buyer may at its option terminate this
Agreement and obtain a refund of the Earnest Money Deposit or Buyer may elect
to waive this condition. Upon any termination by Buyer, Walker and Buyer
shall be obligated to take the action with respect to the Foundation Lot or
the Foundation Lot Contract as is provided for in Paragraph 5 above.
9. The Office Lease, the Retail Lease, and the Manufacturing Facility Lease.
With respect to the Office Lease, the Retail Lease and the Manufacturing
Facility Lease, Walker and Buyer hereby agree as follows:
a. The Office Lease. Prior to the Closing Date, Walker and Buyer
shall negotiate in good faith the terms and conditions of the Office Lease
pursuant to which Walker will lease from Buyer and Buyer will lease to
Walker space in the office building to be constructed by Buyer upon the
Western Tract and Additional Property. The Office Lease shall contain the
following terms and conditions among others as may be agreed upon by Walker
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and Buyer: (i) the demised premises shall consist of approximately 12,000
square feet of space on a single floor within the office building; (ii) the
office building and the demised premises shall be completed and ready for
occupancy in accordance with plans and specifications reasonably acceptable
to Walker and no later than the first anniversary of the closing hereunder;
(iii) Walker shall be entitled to a tenant allowance in an amount to be
negotiated between the parties to cover the costs of the upfitting of such
space; (iv) the initial term shall be for such duration as the parties may
determine by subsequent negotiation; and (v) the minimum annual rent payable
under such lease shall be a fixed rent in an amount to be negotiated between
the parties. Promptly following the expiration of the Examination Period,
Buyer shall submit to Walker a proposed Office Lease embodying the foregoing
terms and otherwise in a form acceptable to Buyer. Walker and Buyer shall
thereafter attempt to reach agreement upon the final terms and conditions
of the Office Lease so that the Office Lease may be executed and delivered
at closing. In the event that the parties cannot agree upon an acceptable
Office Lease prior to the Closing Date, Walker shall have the right either
to (a) terminate this Agreement, in which event the Earnest Money shall be
refunded to Buyer; or (b) to waive the requirement that the Office Lease be
executed, in which event, the sale contemplated hereunder shall be
consummated without the execution of the Office Lease and the parties shall
thereafter be relieved of any obligation to one another with respect to the
Office Lease.
b. The Retail Lease. Prior to the Closing Date, Walker and Buyer shall
negotiate in good faith the terms and conditions of the Retail Lease pursuant
to which Walker will lease from Buyer and Buyer will lease to Walker space
in one of the retail buildings to be constructed by Buyer on the Western
Tract and the Additional Property. The Retail Lease shall contain the
following terms and conditions among others as may be agreed upon by Walker
and Buyer: (i) the demised premises shall consist of approximately 8,000
square feet located on a single floor of one of the retail buildings to be
constructed by Buyer; (ii) the retail building and the demised premises
shall be constructed in accordance with plans and specifications reasonably
acceptable to Walker and no later that the first anniversary of the closing
hereunder; (iii) Walker shall be entitled to a tenant allowance in an amount
to be negotiated between the parties to cover the costs of upfitting the
demised premises; (iv) the initial term shall be such duration as the parties
may determine by subsequent negotiation; (v) the minimum annual rent payable
under the lease for the initial term shall be fixed rent in an amount to be
negotiated between the parties; and (vi) the lease shall not provide for
percentage rents. Promptly following the expiration of the Examination
Period, Buyer shall submit to Walker a proposed form of the Retail Lease
embodying the foregoing terms and otherwise in a form acceptable to Buyer.
Walker and Buyer shall thereafter attempt to reach agreement about the final
terms and conditions of the Retail Lease prior to the Closing Date so that
the Retail Lease may be executed and delivered at closing. In the event
that the parties cannot reach agreement upon the final terms of the Retail
Lease prior to the Closing Date, then Walker may elect either (a) to
terminate this Agreement, in which event, the Earnest Money shall be
refunded to Buyer; or (b) to waive the requirement that the Retail Lease be
executed, in which event the sale provided for herein will be consummated
notwithstanding the failure to execute the Retail Lease and the parties
shall thereafter be relieved of any obligation to one another with respect
to the Retail Lease.
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c. The Manufacturing Facility Lease. The Manufacturing Lease shall
be executed and delivered at closing and pursuant thereto Buyer shall lease
to Walker and Walker shall lease from Buyer all of the land, buildings, and
improvements constituting the Manufacturing Facility. The Manufacturing
Facility Lease shall: (i) be for a term of nine (9) months commencing on
the closing date and expiring nine months thereafter; (ii) provide for
monthly rentals in an amount equal to the monthly interest due and payable
for such month under the Purchase Money Note; (iii) provide that Walker may
use the Manufacturing Facility for any purpose as Walker may desire including
such uses as are comparable to Walker's current use of the Manufacturing
Facility; (iv) provide that neither Buyer nor Walker shall be required to
repair or maintain the Manufacturing Facility but that Walker shall be
entitled to make such repairs or alterations as it desires; (v) provide that
Walker shall pay the costs of all utilities used by it at the Manufacturing
Facility; (vi) provide that neither Walker nor Buyer shall be required to
restore any damage or destruction to the Manufacturing Facility resulting
from fire or other casualty; and (vii) provide that Walker shall pay all
ad valorem taxes due upon the Manufacturing Facility for the period in which
Walker is in possession pursuant to the Manufacturing Facility Lease,
failing which Buyer may pay such taxes and offset the amounts paid against
the sums due under the Purchase Money Note.
10. Closing. The purchase and sale of the Walker Property as
contemplated herein shall be consummated and closed as follows:
a. Closing Date and Location. The sale of the Walker Property to
Buyer and the assignment of the Additional Property Contracts to Buyer shall
be consummated and closed on April 15, 1999 or on such earlier date as may
be agreed upon by Walker and Buyer (the "Closing Date"). Time is of the
essence hereunder and there shall be no extension of the Closing Date or of
the Examination Period or of any other time period provided for herein,
except by mutual written agreement of Walker and Buyer. The closing shall
be held at the offices of Walker in Asheboro, North Carolina at 10:00 a.m.
on the Closing Date or at such other place and at such other time on the
Closing Date as may be mutually agreed upon by Walker and Buyer.
b. Walker's Documents. At the closing, Walker will deliver or cause
to be delivered to Buyer the following items and documents all of which shall
be properly executed and acknowledged as appropriate: (i) a general warranty
deed in standard form reasonably acceptable to Buyer's counsel conveying to
Buyer the Walker Property (except for the Ten Feet Wide Strip and, if
appropriate, the Oliver Rubber Company Strip) and conveying to the extent
appropriate such portions of the Additional Property as Walker may have
acquired as provided herein free and clear of all liens and encumbrances
except for the Permitted Exceptions; (ii) the Assignment and Assumption
Agreement by which Walker shall assign to Buyer the Additional Property
Contracts as contemplated in Paragraph 4 hereof; (iii) the lien affidavit
referred to in Paragraph 3(e) hereof; (iv) a closing statement in standard
form setting forth the Purchase Price, the closing costs and expenses, and
the prorations and adjustments provided for herein (the "Closing Statement");
(v) the originals of the Additional Property Contracts; (vii) a FIRPTA
affidavit in standard form confirming that Walker is not a foreign taxpayer;
and (viii) such additional documents as may be reasonably required by
counsel for Buyer in order to consummate and close the transactions
contemplated hereby.
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c. Buyer's Documents. At the closing, Buyer shall deliver to Walker
the following items and documents all of which shall be properly executed
and acknowledged as appropriate: (i) the cash portion of the Purchase Price
plus cash in the amount due pursuant to Paragraph 4 for the purchase from
Walker of such portions of the Additional Property as Walker may have
acquired prior to the closing hereunder; (ii) the Purchase Money Note;
(iii) the Purchase Money Deed of Trust; (iv) the Assignment and Assumption
Agreement by which Buyer shall assume all of Walker's obligations under and
with respect to the Additional Property Contracts as provided for in
Paragraph 4 hereof; (v) the Closing Statement; and (vi) such additional
items and documents as might be reasonably required by counsel to Walker
in order to consummate and close the transactions contemplated hereby.
d. Documents to be Executed and Delivered by Both Walker and Buyer.
In addition to the Walker Documents and the Buyer's Documents, Walker and
Buyer shall both execute and deliver to one another the following documents
and instruments, all of which shall be duly executed and acknowledged as
appropriate: (i) the Office Lease. unless the parties have failed to reach
agreement on the form of such Office Lease and Walker has waived the
requirement for such Office Lease; (ii) the Retail Lease, unless the
parties have failed to reach agreement on the form of such Retail Lease
and Walker has waived the requirement for such Retail Lease; and (iii) the
Manufacturing Facility Lease.
e. Closing Costs. Walker shall pay the following closing costs:
Walker's attorneys' fees and expenses incurred in connection with the
preparation of this Agreement and the closing of the transactions
contemplated hereunder, the brokerage commissions due the Recognized Broker
as defined in Paragraph 18 below, and the documentary tax stamps required
to be affixed to the Deed. Buyer shall pay the following closing costs:
Buyer's attorneys' fees as charged by any attorney engaged by Buyer to
perform services on Buyer's behalf, including without limitation title
examination services as provided for herein, the costs of any title
insurance procured by Buyer with respect to the Walker Property or the
Additional Property, the recording fees for the recordation of the Deed
and the Purchase Money Deed of Trust, the costs of any surveys of the
Walker Property or of the Additional Property or of the Foundation Lot
obtained and contracted for by Buyer, the costs and expenses of all other
items and services obtained by Buyer in connection with its inspection,
appraisal and evaluation of the Walker Property and the Additional Property,
including without limitation, any and all environmental audit or assessment
fees, physical inspection fees, appraisal fees, and any brokerage fees due
any broker engaged by Buyer. Buyer shall be responsible for paying at the
closing under the Additional Property Contracts such closing costs as are
payable by the buyer under each such Additional Property Contract. Buyer
shall be responsible for arranging for and coordinating the completion of
the closings under the Additional Property Contracts which closings shall
occur either concurrently with the closing hereunder or subsequent thereto
as Buyer may elect.
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f. Possession. Possession of the Western Tract (and of any of the
Additional Property conveyed by Walker to Buyer) shall be delivered to Buyer
at closing subject only to tenants then in possession under leases approved
by Buyer. Possession of the Manufacturing Facility shall be delivered to
Buyer upon the termination or expiration of the Manufacturing Facility
Lease. Possession of the Additional Property not conveyed by Walker to
Buyer shall be delivered to Buyer as provided in the Additional Property
Contracts and possession of the Foundation Lot shall be delivered as
provided in the Foundation Lot Contract.
11. Adjustments and Prorations. The following items will be prorated
between Walker and Buyer on a calendar year basis to the Closing Date and
the cash portion of the Purchase Price as provided in Paragraph 2(b) will
be adjusted to reflect such prorations: (i) the ad valorem taxes on the
Western Tract and for any portions of the Additional Property conveyed from
Walker to Buyer for the calendar year 1999; (ii) any rents due and payable
under any leases affecting the Western Tract and for any portions of the
Additional Property conveyed from Walker to Buyer; and (iii) any utilities
expenses or other operating expenses which Walker shall have prepaid with
respect to the operation of the improvements on the Western Tract. Walker
shall be responsible for the payment of all assessments levied or pending
against the Walker Property prior to the Closing Date and Buyer shall be
responsible for all other assessments, if any, against the Walker Property
levied thereafter. Ad valorem taxes and operating expenses in connection
with the Manufacturing Facility shall be paid by Walker for all periods
prior to closing and thereafter such operating expenses and taxes shall be
paid by Walker for so long as the Manufacturing Facility Lease is in effect.
Prorations with respect to the Additional Property not conveyed by Walker to
Buyer shall be accomplished between Buyer and the sellers under the
Additional Property Contracts in accordance with the terms of the Additional
Property Contracts and prorations with respect to the Foundation Lot shall be
accomplished between the Buyer and the Foundation as provided in the
Foundation Lot Contract.
12. Care and Maintenance of Walker Property Until the Closing Date. From
the date of this Agreement to the Closing Date, Walker may, but shall not
be required to, continue to operate the Walker Property in the usual and
customary course of its business consistent with past operations. Walker
shall be under no obligation to make any repairs or capital expenditures of
any kind with respect to the Walker Property or with respect to any portion
of the Additional Property acquired by Walker or to maintain or care for the
Walker Property or any portion of the Additional Property in any way, but
Walker shall not commit waste thereof.
13. Conditions to Buyer's Obligations. Buyer's obligations hereunder
shall be subject to the fulfillment of the following conditions precedent and
if any such condition precedent is not fulfilled at the Closing Date or has
not been waived by Buyer, Buyer may terminate this Agreement in which event
the Earnest Money shall be refunded to Buyer:
16
a. Walker's Compliance. Walker shall have performed and complied with
all agreements and conditions required to be performed by Walker hereunder
and Walker shall have executed and delivered to Buyer at the closing all
documents and instruments required to be delivered by Walker hereunder.
b. No Material Adverse Change in Zoning, Street Closings, or Title.
There shall have occurred no material adverse change in the zoning
applicable to the Western Tract, the Additional Property or the Foundation
Lot or in the status of the efforts to close Atlantic Avenue, Second Street
and Washington Street from that as existed at the expiration of the
Examination Period and no objections, challenges or legal actions of any
nature shall have been filed with or before any governmental entity or court
contesting the validity or propriety of the zoning applicable to the Western
Tract, the Eastern Tract, the Additional Property or the Foundation Lot or
contesting the validity of the closing of the portions of Atlantic Avenue,
Second Street or Washington Street except for the objection of Oliver Rubber
Company. There shall have occurred no material adverse change in the status
of record title to the Walker Property or the Additional Property, or the
Foundation Lot from that as existed as of the expiration of the Examination
Period.
c. Additional Property Contracts Remain in Effect. Except to the
extent that Walker shall have acquired portions of the Additional Property
pursuant to the Additional Property Contracts as provided for in Paragraph 4
hereof, the Additional Property Contracts shall remain in full force and
effect, unmodified except as consented to by Buyer, such that upon the
assignment thereof by Walker to Buyer, Buyer shall have the right to complete
the acquisition of such Additional Property in accordance with such remaining
Additional Property Contracts.
d. Required Approvals and Consents. Walker shall have obtained all
consents, approvals, and authorizations as may be necessary to authorize
Walker to complete the conveyance of the Walker Property as contemplated
hereunder (the "Required Consents") including without limitation the consent
and approval of any lender or party whose consent and approval may be
required pursuant to any loan agreement or other agreement binding upon
Walker, the approval by Walker's Board of Directors, and, if deemed
necessary by Walker's counsel, the approval by Walker's shareholders and
the approval of any governmental authority whose approval may be required.
e. Foundation Lot Contract. Unless Buyer has waived its requirement
for the Foundation Lot Contract, Buyer and the Foundation shall have entered
into the Foundation Lot Contract as provided for pursuant to Paragraph 5
hereof and the Foundation shall not be in default thereunder.
f. Rezoning of Eastern Tract. The Eastern Tract of the Walker
Property shall have been rezoned to a B-2 zoning classification as
provided for in Paragraph 7 above.
g. Settlement of Oliver Rubber Company's Objection. Oliver Rubber
Company's objection to the Closing of Atlantic Avenue shall have been
settled and its petition challenging such closing shall have been dismissed
as provided for in Paragraph 8 above.
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14. Conditions to Walker's Obligations. Walker's obligations hereunder
shall be subject to the fulfillment of the following condition precedent and
if such condition precedent is not fulfilled at the Closing Date or has not
been waived by Walker, Walker may terminate this Agreement in which event
the Earnest Money shall be refunded to Buyer unless the Buyer is in default
hereunder:
a. Buyer's Compliance. Buyer shall have performed and complied with
all agreements and conditions required to be performed by Buyer hereunder
and shall have executed and delivered to Walker all documents required to
be executed by Buyer hereunder, including without limitation the Office
Lease and the Retail Lease, unless Walker has waived the requirement for
such leases.
15. Risk of Loss. No damage to any of the improvements located on the
Walker Property or the Additional Property occurring during the period from
the expiration of the Examination Period to the Closing Date resulting from
any fire or other casualty shall relieve Walker or the Buyer from their
respective obligations hereunder and the sale contemplated herein shall be
completed notwithstanding such casualty damage or loss without any
diminution in the Purchase Price due hereunder. Walker shall be entitled
to all insurance proceeds payable under any policy maintained by Walker with
respect to the Walker Property and Buyer shall not be entitled to share in
such proceeds. Walker may, but shall not be obligated to, restore any
improvements as may be damaged or destroyed by any fire or other casualty.
16. Tax-Deferred Exchange. In the event that Walker desires to effect
a tax-deferred exchange in connection with the conveyance of the Walker
Property, Buyer agrees to cooperate in effecting such exchange and Buyer
shall enter into such agreements as may be reasonably required to accomplish
the exchange desired by Walker; provided, however, that: (i) Walker shall
be responsible for all additional costs associated with such exchange; (ii)
Buyer shall not be obligated to assume any additional liability with respect
to such tax deferred exchange; (iii) Buyer shall not be obligated to take
title to any exchange property unless Buyer has received an environmental
site assessment with respect to such property which report is acceptable to
Buyer in all respects; and (iv) Walker shall indemnify and hold Buyer
harmless with regard thereto including from any liability arising from any
environmental conditions, at or affecting any such exchange property.
17. Earnest Money Deposit and Default. With respect to the Earnest Money
and defaults by Walker or Buyer hereunder, Walker and Buyer agree as follows:
a. Earnest Money Deposit. The Earnest Money shall be held by the
Escrow Agent in an interest bearing insured account at a federal depository
institution in Buyer's name. All interest earned upon the Earnest Money
shall be for Buyer's account and shall be deemed to be a part of the Earnest
Money and shall be applied, refunded or paid over in the same manner as
provided for herein with respect to the principal of the Earnest Money. In
the event the sale contemplated hereunder closes as herein provided, the
Earnest Money shall be paid over to Walker and credited to the cash portion
of the Purchase Price as provided in Paragraph 2 hereof. In the event either
party terminates this Agreement pursuant to any termination right granted
such party herein, other than a termination by Walker because of Buyer's
default the Earnest Money, shall be promptly refunded to Buyer and this
Agreement shall be of no further force and effect.
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b. Walker's Default. In the event that Walker defaults in the
performance of its obligations hereunder, then Buyer, as it sole and
exclusive remedy, may either (i) terminate this Agreement in which event
the Earnest Money shall be promptly refunded to Buyer, and the parties
shall thereafter have no further obligation to one another hereunder or
(ii) in lieu of terminating this Agreement and accepting a refund of the
Earnest Money, Buyer may institute an action against Walker for specific
performance of this Agreement and Walker agrees that this Agreement shall
be specifically enforceable against it. In no event, however, shall Buyer
be entitled to maintain against Walker an action for damages for Walker's
breach hereof.
c. Buyer's Default. In the event that the sale contemplated herein
does not close because of a default hereunder by Buyer, then the Earnest
Money shall be paid to Walker as liquidated damages for Buyer's default and
upon such payment this Agreement shall terminate and the parties shall have
no further obligations to one another hereunder except with respect to the
purchase and sale of any of the Additional Property which Buyer may have
acquired prior to such termination which Additional Property shall be bought
and sold as provided in Paragraph 4 hereof. The payment of the Earnest
Money to Walker shall be Walker's sole and exclusive remedy for Buyer's
default hereunder. Walker and Buyer agree that the amount of damages that
Walker would sustain as the result of Buyer's default in completing the sale
hereunder would be difficult to ascertain and that the amount of liquidated
damages provided for herein is a reasonable estimate of such damages and is
not a penalty.
18. Brokers. Buyer and Walker hereby recognize Donald R. Browning of
Providence Real Estate Advisors, L.L.C. of Charlotte, North Carolina (the
"Recognized Broker") as the broker representing Walker in connection with
this Agreement and agree that the entire commission due to such Recognized
Broker upon the closing of this transaction pursuant to an agreement between
Walker and the Recognized Broker shall be the sole responsibility of
Walker. Walker shall indemnify and hold Buyer harmless with respect to any
commissions due the Recognized Broker. Buyer hereby represents and
acknowledges that Buyer has been represented in connection with this
Agreement by Peter T. Chenery (the "Buyer's Agent) and that upon the closing
Buyer shall be responsible for all commissions as may be due the Buyer's
Agent pursuant to any agreement between Buyer and Buyer's Agent. Buyer
shall indemnify and hold Walker harmless with respect to any commissions
claimed by the Buyer's Agent. Buyer and Walker each represent and warrant
to one another that, other than the Recognized Broker and the Buyer's Agent,
each respective party has dealt with no other real estate broker, dealer or
salesperson in connection with the transactions contemplated by this
Agreement and that no other broker, dealer or salesperson is entitled to a
commission with respect to the transaction contemplated hereby based upon
actions of such respective party. Buyer and Walker each hereby agree to
indemnify, defend and hold the other harmless from any and against any loss,
damage or claim resulting from a breach of the foregoing representation,
including reasonable attorneys' fees. The provisions of this Paragraph
shall survive the closing and any termination of this Agreement.
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19. Assignment. Neither this Agreement nor the rights of Buyer hereunder
may be assigned by Buyer, whether voluntarily or by operation of law,
without Walker's prior written consent and Walker hereby reserves the right
to approve or disapprove of any proposed assignment in its sole unfettered
discretion. Notwithstanding the foregoing, H. William Hull, Jr. may,
without Walker's consent assign his rights and interests hereunder to any
partnership, limited liability company, corporation or other legal entity in
which H. William Hull, Jr. owns a controlling equity interest, provided only
that any such entity to which Hull assigns his rights and interests
hereunder shall in connection with such assignment assume the performance of
all of Buyer's obligations hereunder by written agreement, a copy of which
shall be delivered to Walker. No assignment by Hull shall be effective
unless and until Hull has provided Walker with written notice of such
assignment and with a copy of the assumption agreement executed by such
assignee. From and after such assignment, the assignee shall be the
"Buyer" hereunder.
20. Miscellaneous. Buyer and Walker hereby further agree as follows.
a. Entire Agreement. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
merges all prior negotiations and agreements concerning the purchase and
sale of the Walker Property. All amendments hereto must be in writing and
signed by the party sought to be charged with them.
b. Notices. Whenever any notice may be given or is required to be
given under the terms of this Agreement, the same shall be in writing and
shall be deemed given at the earlier of (i) actual delivery;
(ii) forty-eight hours after deposit in registered or certified United
States mail, return receipt requested with postage prepaid; or (iii)
twenty-four (24) hours after deposit with a recognized overnight
commercial courier; and in all events addressed to the parties as follows:
To Walker: B. B. WALKER COMPANY
414 East Dixie Drive
Asheboro, North Carolina 27203
Attention: Kent T. Anderson
Chairman of the Board
With Copies To: E. Garrett Walker
Smith Helms Mulliss & Moore, L.L.P.
300 North Greene Street, Suite 1400
Post Office Box 21927
Greensboro, North Carolina 27420
and
Donald R. Browning
Providence Real Estate Advisors, LLC
212 South Tryon Street, Suite 333
Charlotte, North Carolina 28281
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To the Buyer: H. WILLIAM HULL, JR.
Post Office Box 2203
Rocky Mount, North Carolina 27802
With Copies To: Thomas L. Young
Battle, Winslow, Scott & Wiley, P.A.
Post Office Box 7100
Rocky Mount, North Carolina 27804
To The Escrow Agent: Lawyer's Title Insurance Company of
North Carolina
or such substitute address as either party may designate by such notice.
c. Binding Effect. The parties to this Agreement mutually agree that
it shall be binding upon and inure to the benefit of their respective heirs,
representatives, successors in interest and permitted assigns.
d. Controlling Law. It is the intent of the parties hereto that all
questions with respect to the construction of this Agreement and the rights
and liabilities of the parties shall be determined in accordance with the
laws of the State of North Carolina.
e. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall constitute one and the same Agreement.
f. Titles. The titles or section headings are inserted only for
convenience and are in no way to be construed as a part of this Agreement
or as a limitation of the scope of the particular provisions to which they
refer.
g. Survival of Provisions. No covenants, representations, warranties
and agreements of Walker set forth in this Agreement shall survive the
closing except those warranties contained in the deed of conveyance and
except as specifically provided for in this Agreement.
IN WITNESS WHEREOF B. B. WALKER COMPANY and H. WILLIAM HULL, JR. have duly
executed and sealed this Contract of Purchase and Sale of Real Estate as of
the day and year first above written.
B. B. WALKER COMPANY
BY: KENT T. ANDERSON
----------------
KENT T. ANDERSON
CHIEF EXECUTIVE OFFICER
ATTEST:
DOROTHY W. CRAVEN
- -----------------
DOROTHY W. CRAVEN, SECRETARY
(CORPORATE SEAL)
BY: H. WILLIAM HULL, JR.
--------------------
H. WILLIAM HULL, JR.
(SEAL)
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