North Carolina-Trinity-1 Office Parkway Purchase Agreement for Commercial Property - Hollingsworth and Stout Enterprises LLC and Sealy Inc.
PURCHASE AGREEMENT
(Commercial Property)
THIS AGREEMENT, dated JANUARY 1, 1998 , between
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HOLLINGSWORTH AND STOUT ENTERPRISES, LLC ,(the
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"Seller"), whose address is 1 OFFICE PARKWAY, TRINITY, NC 27370
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and SEALY, INC.
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,(the "Buyer"), whose address is C/O KEZIAH, GATES & SAMET,
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POST OFFICE BOX 2608, HIGH POINT, NC 27261;
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WITNESSETH THAT:
WHEREAS, Seller is the owner in fee simple of certain real property known as
DAR/RAN PLANT AND OFFICES, 1 OFFICE PARKWAY, TRINITY, North Carolina (the
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"Land") CONSISTING OF APPROXIMATELY 68.51 ACRES, and more particularly described
in A SURVEY PREPARED BY MARK TERRY & ASSOCIATES DATED FEBRUARY 4, 1994,
DESIGNATED JOB NO. 3585-51-02 AND IN A DEED RECORDED AT DEED BOOK 1390, PAGE 606
IN THE OFFICE OF THE REGISTER OF DEEDS FOR RANDOLPH COUNTY, NORTH CAROLINA ,
WHICH IS INCORPORATED BY REFERENCE IN THIS AGREEMENT. Seller has agreed to sell
and Buyer has agreed to purchase the Land, the improvements located on the Land,
WHICH IMPROVEMENTS CONSIST OF A MANUFACTURING PLANT CONTAINING APPROXIMATELY
165,240 SQUARE FEET AND AN OFFICE BUILDING CONTAINING APPROXIMATELY 28,450
SQUARE FEET, and certain other property upon the terms and conditions stated in
this agreement.
NOW, THEREFORE, in consideration of their mutual promises contained in this
agreement, the parties agree as follows:
PURCHASE AND SALE. Seller agrees to sell to Buyer and Buyer agrees to
purchase, upon the terms and conditions stated in this agreement, the following
(collectively, the "Property"):
a. the Land;
b. all buildings or other improvements located on the Land (the "Improvements)";
c. all personal property owned by Seller and located on and used in connection
with the operation of the buildings on the Land, including but not limited to
all apparatus, machinery, equipment, motors, elevators, fittings, radiators,
built-in appliances, signs, awnings, shades, screens, blinds, carpeting, and all
plumbing, heating, lighting, ventilating, air conditioning and sprinkler
equipment USED IN CONNECTION WITH THE OPERATION OF THE IMPROVEMENTS, whether or
not attached to the Land and improvements, AND SPECIFICALLY INCLUDING ALL
EXISTING ELECTRICAL PANELS, BUS DUCTS AND WIRING WHICH HAVE BEEN INSTALLED TO
PROVIDE POWER TO SELLER'S MANUFACTURING EQUIPMENT AND MACHINERY (the "Personal
Property"), BUT EXCLUDING SELLER'S FURNITURE MANUFACTURING MACHINERY AND
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EQUIPMENT;
d. all right, title and interest of Seller in and to any right of access,
street, roadway or alley abutting or adjoining the Land; and
e. all other rights, permits (including without limitation all density,
watershed and other development rights or permits), privileges, appurtenances,
easements and rights of way owned by the Seller and appurtenant to or used in
connection with the Land, the Improvements or the Personal Property.
2. PURCHASE PRICE. The Purchase Price for the Property is
$8,250,000.00.
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The Purchase Price is payable as follows:
2.1 DEPOSIT.
a. Buyer has paid to SELLER the sum of $25,000.00 (the "Deposit"),
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to be held in escrow and applied in accordance with the terms of this
agreement.
b. The Deposit shall be applied as a credit against the Purchase Price at
Closing.
c. If this transaction does not close, the Deposit will be applied as
provided in Paragraph 12.
2.2 BALANCE OF PURCHASE PRICE. Buyer will pay the balance of the Purchase
Price, after crediting the Deposit and subject to all adjustments and prorations
provided for in this Agreement, to Seller at Closing as provided in Section
11.3.
3. ACCEPTANCE BY SELLER. This Agreement shall be void unless Seller delivers to
Buyer a duplicate original counterpart of this Agreement, properly executed by
Seller, at or prior to 5:00 p.m. on JANUARY 9, 1998.
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4. INVESTIGATIONS BY BUYER.
4.1 RIGHT OF ENTRY. Seller grants to Buyer and Buyer's agents,
representatives, or designees, the right to enter upon the Property, at any time
this agreement is in force, to inspect, examine, survey and test the Property as
Buyer deems necessary or desirable, including without limitation, environmental
studies and soils tests. Buyer agrees (i) to repair any damages to the Property
resulting from, and restore the Property as nearly as possible to its condition
prior, to Buyer's tests and inspections; and (ii) to defend, indemnify and hold
harmless Seller from and against any claim, damage or liability incurred by or
asserted against the Seller as a result of such activities on the Property
pursuant to this Section.
4.2 INVESTIGATION PERIOD. During the period (the "Investigation Period")
beginning on the date upon which this agreement has been executed by both
parties and a fully executed original counterpart returned to Buyer (the
"Effective Date") and ending at 4:00 p.m. on the day which is 60 days
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after the Effective Date, Buyer may seek commitments for financing satisfactory
to Buyer, and may conduct such tests, studies and analyses as Buyer deems
necessary or desirable in order to determine, in Buyer's sole discretion,
whether the Property is suitable for Buyer's intended use of the Property (the
"Intended Use") as A BEDDING MANUFACTURING PLANT AND OFFICE BUILDING and
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otherwise satisfactory to Buyer. Buyer shall have the right to review and
inspect all leases, contracts, or other agreements affecting or relating to the
Property, and all pertinent records of Seller relating to the operation or
maintenance of the Property.
4.3 BUYER'S TERMINATION RIGHT. If, at any time prior to the close of the
Investigation Period, Buyer, in Buyer's sole discretion, determines that
satisfactory financing cannot be obtained or that the Property is unsuitable for
Buyer's Intended Use, Buyer, by giving notice to Seller at any time prior to the
Investigation Period, may elect to terminate this agreement, in which case the
Seller will immediately disburse the Deposit as provided in Paragraph 12.1, and
this agreement will terminate.
4.4 AS-IS SALE. Except as expressly otherwise provided in this agreement,
Seller expressly disclaims any and all warranties, express or implied, of any
nature with respect to the condition of the Property, including without
limitation any warranties of merchantability, habitability or fitness, whether
express or implied, and whether in regard to the improvements, the personal
property or any other portion of the Property. If Buyer does not properly
terminate this agreement as provided in the preceding Section, then Buyer will
be conclusively deemed to have represented and warranted to Seller that:
a. Buyer has had full opportunity to make such investigations of the
condition of the Property as Buyer has deemed necessary; and
b. Buyer is relying solely upon such investigations and has decided to
purchase and will accept the Property in an "AS IS" condition, with no
representations or warranties, except as expressly otherwise provided for in
this agreement.
5. TITLE.
5.1 SELLER'S TITLE INFORMATION. Seller agrees to deliver to Buyer promptly
after the Effective Date copies of all deeds, title insurance policies, and
surveys relating to the Property in Seller's possession or readily available to
Seller.
5.2 TITLE. Seller must convey title to Buyer at Closing by general
warranty deed (the "Deed") in form and content satisfactory to Buyer's counsel,
conveying to Buyer good and marketable indefeasible fee simple title to the
Property, its appurtenances and improvements, insurable both as to fee and
marketability at regular rates by a national title insurance company, selected
by Buyer (the "Title Insurance Company"), without exception, other than the
Permitted Exceptions as provided for in the following Section. The title
insurance policy must provide full coverage against mechanics' or materialmen's
liens and contain such other special endorsements as Buyer may reasonably
require, including full survey coverage if Buyer obtains a Survey of the Land as
provided for in Paragraph 6.
5.3 PERMITTED EXCEPTIONS. Seller must convey title to the Property to
Buyer at Closing free and clear of all liens and encumbranc-
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es, subject only to the following exceptions (the "Permitted Exceptions"):
a. public utility easements (water, sewer, electric, gas and telephone) of
record in customary form to serve the Property which do not impair its use by
the Buyer for the Intended Use;
b. rights of way for public streets abutting the Land;
c. applicable zoning ordinances of the zoning jurisdiction in which the
Property is located, provided such ordinances do not prohibit or limit the use
of the Property by Buyer for the Intended Use;
d. ad valorem real property taxes on the Property for the calendar year in
which the Closing Date occurs, which taxes shall be prorated on a calendar year
basis up through the Closing Date; and
e. such other exceptions as Buyer may approve in writing, or as are added
pursuant to the provisions of the following Sections.
5.4 SPECIAL ASSESSMENTS. If, at the time of Closing, all or any part of the
Property is affected by any special assessment payable in installments, or of
which the first installment is then a charge or a lien, or has been paid, then
for the purposes of this agreement, all unpaid installments of any such
assessment, including those which are to become due and payable after the
Closing, will be conclusively deemed to be due and payable and to be liens
against the Property and must be paid by Seller at Closing.
5.5 TITLE OBJECTIONS. Buyer, at any time until one week prior to the Closing
Date, may furnish Seller a written statement of objections to the title to the
Property, if any, other than the Permitted Exceptions, which statement must be
accompanied by a copy of Buyer's title report and any other materials disclosing
such objections to title to the Property. Except for objections arising
subsequent to the earlier of the effective date of Buyer's title report or one
week prior to the Closing Date, Buyer shall be deemed to have waived all other
objections to title which would be disclosed by an examination of title and
which Buyer has not furnished to Seller as provided in this Section, and such
objections shall be included in the Permitted Exceptions.
5.6 ADDITIONAL OBJECTIONS. Buyer may, at any time prior to the Closing,
present Seller with a further statement of objections to title to the Property,
provided, however, that any such statement of objections must be limited solely
to matters arising after the earlier of the effective date of Buyer's title
report or one week prior to the Closing Date.
5.7 SELLER'S OBLIGATIONS. Seller must pay or satisfy at or before Closing
all liens, judgements mortgages, deeds of trust or other liens or encumbrances
which can be satisfied by payment of a liquidated amount (the "Monetary
Claims"). Seller shall not be required to cure other title objections. Seller,
on or before the Closing Date, must notify Buyer of such title objections other
than Monetary Claims that Seller will not satisfy prior to or at Closing (the
"Unsatisfied Objections"). If Seller gives such notice to Buyer, then Buyer, at
Buyer's election, by notice to Seller at any time prior to the Closing, will be
entitled either to:
a. waive the Unsatisfied Objections and proceed to close the purchase of
the Property and accept the Property subject to the Unsatisfied Objections with
no reduction in the Purchase Price, in which case the Unsatisfied Objections
shall be included in the Permitted Exceptions; or
b. terminate this agreement, in which case Buyer shall be entitled to a
refund of the Deposit, as Buyer's sole remedy.
6. SURVEY.
6.1 SELLER'S SURVEY. Promptly after the Effective Date, Seller agrees to
deliver to Buyer a copy of any survey in Seller's possession or readily
available to Seller.
6.2 BUYER'S SURVEY. Buyer shall have the right to obtain a survey (the
"Survey") of the Land prepared by a land surveyor or engineer, who must be
registered and licensed in the State of North Carolina and approved by Seller in
writing prior to commencement of the survey work (the "Surveyor"), such approval
not to be unreasonably withheld or delayed, and to furnish a copy of the Survey
to Seller. The Survey must depict boundaries, easements, improvements, if any,
and rights-of-way adjoining or crossing the Property and shall contain a
computation of the acreage of the Property to the nearest one-hundredth of an
acre, certified by the Surveyor.
6.3 LEGAL DESCRIPTION. Prior to the Closing, Buyer may deliver to the
Seller for Seller's review and approval, not to be unreasonably withheld or
delayed, a copy of a legal description of the Property based upon the Survey.
Unless objected to by Seller prior to Closing, this description, together with
the Survey, will become a part of this agreement without the necessity of any
further action by either of the parties.
6.4 SURVEY OBJECTIONS. If the Survey shows any encroachment on the Land,
or that any improvement located on the Land encroaches on the land of others, or
if the Survey shows any other defect which would affect the marketability of
title to the Property, or material deviation from the boundaries as described in
the deed by which Seller acquired title, and such defect is unacceptable to
Buyer, Buyer must notify Seller of such defect within the time Buyer must give
notice of title defects pursuant to Paragraph 5, and such encroachment or defect
shall be treated in the same manner as title defects are treated under this
agreement. Buyer shall be deemed to have waived any survey defects unless Buyer
gives notice of such defects to Seller as provided in this Section, and such
defects shall be included in the Permitted Exceptions.
7. WARRANTIES AND REPRESENTATIONS OF SELLER. Seller represents, warrants and
covenants that:
a. Seller has full right, power and authority to enter into this agreement
and to consummate this transaction.
b. The execution by Seller of, and the consummation of the transaction
contemplated by, this agreement will not result in a breach of, or constitute a
default (whether immediately or after the giving of notice or lapse of any time
period) under, any indenture, agreement, instrument or obligation to which
Seller is a party or by which Seller or the Property is bound and will not
violate any order, rule or regulation of any court or any federal, state or
municipal regulatory body or agency having jurisdiction over Seller or the
Property.
c. Seller owns and will convey title to the Property at Closing in accordance
with the requirements of Paragraph 5.
d. There are no parties other than Seller in possession of any portion of the
Land or improvements as lessees, tenants at sufferance or trespassers, OTHER
THAN DAR/RAN FURNITURE INDUSTRIES, INC., WHICH TENANCY WILL BE TERMINATED AT OR
PRIOR TO CLOSING.
e. There is no action or proceeding pending, or, to the knowledge of the
Seller, threatened, against or affecting the Property, or relating to or arising
out of the ownership of the Property.
f. Seller has not received any notice of any pending or threatened eminent
domain or zoning proceeding with respect to or affecting the Property, or any
proposed change with respect to access from, or change of grade of, abutting
public streets.
g. Seller has conducted Seller's activities on the Property, and, to the
best of Seller's knowledge, all Seller's tenants and all prior occupants of the
Property have conducted their activities on the Property, in compliance with all
applicable environmental laws and regulations. To the best of Seller's
knowledge, there are no underground storage tanks, transformers or other
devices containing PCB'S, or other hazardous substances of any kind, located on
the Property (including subsurface strata and ground water beneath the
Property).
8. WARRANTIES AND REPRESENTATIONS OF BUYER. Buyer represents, warrants and
covenants that:
a. UPON AND SUBJECT TO APPROVAL BY BUYER'S BOARD OF DIRECTORS, AS PROVIDED
FOR IN SECTION 19.1, Buyer has full right, power and authority to enter into
this agreement and to consummate this transaction.
b. The execution by Buyer of, and the consummation of the transaction
contemplated by, this agreement will not result in a breach of, or constitute a
default (whether immediately or after the giving of notice or lapse of any time
period) under, any indenture, agreement, instrument or obligation to which the
Buyer is a party or by which Buyer is bound and will not violate any order, rule
or regulation of any court or any federal, state or municipal regulatory body or
agency having jurisdiction over Buyer.
9. CONDITIONS TO OBLIGATION OF BUYER.
9.1 CONDITIONS. The obligation of Buyer to close this transaction is
subject to the following conditions, any of which may be waived by Buyer at or
prior to the Closing:
a. All of the representations and warranties of Seller set forth in this
agreement must be true as of the Closing Date, as though made at that time.
b. Seller shall have delivered, performed and complied with all items and
obligations required to be delivered, performed or complied with by Seller at or
before the Closing.
c. The Property must be in the same condition as existing on the Effective
Date, in all material respects.
9.2 SELLER'S DEFAULT. If Seller fails or is unable to satisfy any of the
foregoing conditions as the result of any act or omission of Seller, such
failure shall constitute a default of Seller unless waived by Buyer and shall
entitle Buyer to exercise Buyer's remedies upon default as stated in Section
12.2.
9.3 BUYER'S ELECTION. If Seller fails or is unable to satisfy any of the
foregoing conditions and such failure is not the result of any act or omission
of Seller, Buyer, at Buyer's option, may either:
a. waive such nonperformance as Seller is unable to cure and proceed to
clo se the purchase of the Property and accept the Property subject to such
nonperformance with no reduction in the Purchase Price; or
b. terminate this agreement, in which case Buyer shall be entitled to a
refund of the Deposit, as Buyer's sole remedy.
10. CONDITIONS TO OBLIGATION OF SELLER.
10.1 CONDITIONS. The obligation of Seller to close this transaction is
subject to the following conditions, any of which may be waived by Seller at or
prior to the Closing:
a. All of the representations and warranties of Buyer set forth
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in this agreement must be true as of the Closing Date, as though made
at that time.
b. Buyer shall have delivered, performed and complied with all of the
terms and obligations required to be delivered, performed or complied with by
Buyer at or before the Closing.
10.2 BUYER'S DEFAULT. If Buyer fails or is unable to satisfy any of the
foregoing conditions, such failure shall constitute a default of Buyer unless
waived by Seller and shall entitle Seller to exercise Seller's remedies upon
default as stated in Section 12.3.
11. CLOSING.
11.1 CLOSING DATE. Closing is defined as the delivery in escrow of all
closing documents and funds to Buyer's attorney, and the subsequent recording of
the Deed. The Closing shall take place at a time and place in the City of HIGH
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POINT, NC set by Buyer, on or before 30 DAYS AFTER THE CLOSE OF THE
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INVESTIGATION PERIOD (the "Closing Date"). The Closing Date may be extended up
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to 15 days in order to permit Seller to cure any title objections which Seller
has elected to cure; provided however, that Seller must give notice to Buyer of
such extension prior to the Closing Date.
11.2 SELLER'S CLOSING DELIVERIES. At the Closing the Seller must deliver
to the Buyer:
a. the Deed, dated as of the Closing Date, duly executed and
acknowledged by Seller, conveying title to the Property to the Buyer in
accordance with Paragraph 5, subject only to the Permitted Exceptions, and in
form and substance acceptable to counsel for Buyer;
b. if requested by Buyer, a Bill of Sale, in form and substance
satisfactory to Buyer conveying to Buyer good and marketable title, subject only
to the Permitted Exceptions, to any part of the Property which is not, in
Buyer's opinion, satisfactorily conveyed by the Deed;
c. an affidavit and indemnity agreement acceptable to the Title Insurance
Company showing that all labor and materials (other than any labor or materials
ordered by Buyer), if any, furnished to the Property within 120 days prior to
the Closing Date have been paid for and agreeing to indemnify Buyer and the
Title Insurance Company against all loss from any cause or claim arising from
any mechanics' or materialmens' liens;
d. an affidavit or qualifying statement of Seller's non-foreign status, in
form and substance satisfactory to Buyer's counsel.
e. exclusive possession of the Property, WHICH MUST BE DELIVERED IN BROOM
CLEAN CONDITION, WITH ALL PROPERTY OF SELLER (OR SELLER'S TENANT) NOT
CONSTITUTING A PART OF THE PROPERTY, AND ALL TRASH AND REFUSE, REMOVED FROM THE
PREMISES;
f. a survey affidavit satisfactory and acceptable to the Title Insurance
Company, showing no changes to the Property since the last survey; and
g. such other instruments and documents as Buyer may reasonably require to
carry out the terms of this agreement.
11.3 BUYER'S CLOSING DELIVERIES. At the Closing, Buyer must deliver to the
Seller:
a. the unpaid balance of the Purchase Price, subject to all adjustments
and prorations provided for in this Agreement, in cash or immediately available
funds; and
b. such other instruments and documents as Seller may reasonably require
to carry out the terms of this agreement.
11.4 PRORATIONS. Ad valorem real property taxes applicable to the Property
will be prorated on a calendar year basis as of the Closing Date. Any other ad
valorem taxes or interest or penalties which constitute a lien on any part of
the Property must be paid by Seller or credited to Buyer as of the date of
Closing. All rents will be adjusted and prorated as of the Closing Date.
11.5 EXPENSES. Seller will pay for preparation of the Deed, the excise tax
(documentary stamps) required by law and Seller's brokers' commissions,
attorneys' fees and any other expenses incurred by Seller. Buyer will pay
recording fees for the Deed, title examination expenses, title insurance
premiums, survey costs, the cost of the Survey, Buyer's investigations and
tests, Buyer's attorneys' fees, and any other expenses incurred by Buyer.
12. DEFAULT AND REMEDIES.
12.1 TERMINATION BY BUYER. If Buyer elects to terminate this agreement
pursuant to a right of Buyer to do so pursuant to Paragraphs 4, 5, 9, 13 or 14
of this agreement, the entire Deposit shall be refunded to Buyer, as Buyer's
sole remedy.
12.2 SELLER'S FAILURE TO CLOSE. If Seller fails to close this transaction
for any reason other than Buyer's default or an election by Buyer, pursuant to
the terms of Paragraphs 4, 5, 9, 13 or 14 of this agreement, to terminate it,
Buyer shall be entitled to an immediate refund of the Deposit, without prejudice
to any other right or remedy Buyer may have at law or in equity by reason of
Seller's failure to close, including, but not limited to, the right to recover
damages or seek specific performance, and including Buyer's reasonable
attorneys' fees and costs of litigation.
12.3 BUYER'S FAILURE TO CLOSE. If Buyer fails to close this transaction
for any reason other than Seller's default, or Buyer's election, pursuant to the
terms of Paragraphs 4, 5, 9 13 or 14 of this agreement, to terminate it, Seller,
as Seller's sole remedy, shall be entitled to terminate this agreement and
retain the Deposit as liquidated damages.
13. FIRE OR CASUALTY. The risk of loss prior to Closing shall be on the
Seller. If, prior to the Closing, all of the Property (or such portion as will
materially adversely affect Buyer's ability to use the Property for Buyer's
Intended Use) is destroyed or damaged by fire or other casualty, Buyer, at
Buyer's option may, by notice to Seller on or before the earlier of (i) the
Closing Date or (ii) the date 20 days after the date of the casualty, elect to:
a. terminate this agreement, in which case the Buyer will be entitled to a
refund of the Deposit, and this agreement will terminate; or
b. accept the Property in its damaged condition and proceed to closing, in
which case:
(1) the proceeds of all applicable insurance payable with respect to
such casualty, together with the amount of all applicable policy deductibles or
coinsurance, will be assigned or credited to Buyer at closing; and
(2) Buyer will be entitled to extend the Closing Date to allow for
appraisals of the damage and the amount of applicable insurance proceeds, policy
deductibles and coinsurance to be determined.
14. EMINENT DOMAIN.
14.1 BUYER'S RIGHT TO TERMINATE. If, prior to the Closing, all of the
Property (or such portion as will materially adversely affect Buyer's ability to
use the Property for Buyer's Intended Use) is taken or appropriated by reason of
eminent domain, or sold under threat of such taking, Buyer may terminate this
agreement by notice to Seller within 5 days after the earlier of the date on
which title passes under the taking or sale or the date on which Seller notifies
Buyer that the taking or sale will occur, in which event Buyer shall be entitled
to a refund of the Deposit and this agreement shall terminate.
14.2 NONEXERCISE OF BUYER'S TERMINATION RIGHT. If Buyer does not elect to
terminate this agreement, it shall remain in full force and effect, and:
a. Seller will convey the Property to Buyer at Closing, less any
interest or portion taken or sold as provided in the preceding Section;
b. Seller will assign or pay the proceeds of the taking or sale in lieu
thereof to Buyer at Closing; and
c. Seller will permit Buyer to participate in the condemnation
proceedings or negotiations as if Buyer were an owner of the Property.
15. NOTICES. All notices required or permitted by the terms of this agreement
shall be deemed given by personal delivery or when deposited in the United
States Registered or Certified Mail, postage prepaid, or, with verification of
delivery, by telegram, cable, telex, commercial courier or any other generally
accepted means of business communication, to either party, at their respective
addresses set forth on the signature page of this agreement. Either party may
change the address to which notices must be sent by giving notice to the other
party in accordance with this Section.
16. BROKERAGE COMMISSIONS. Each party warrants to the other that such party
has not dealt with any broker in connection with this transaction, and agrees
to indemnify and hold harmless the other party from and against any other
claims, demands or liabilities, including reasonable attorneys' fees and
expenses of litigation, arising out of any other alleged brokerage commission or
fee claimed in connection with this transaction based upon any other agreement
alleged to have been made or other action alleged to have been taken by the
indemnifying party.
17. RECORDING. Buyer and Seller agree that this instrument may not be
recorded; however, at Buyer's option, the parties will execute a Memorandum of
Agreement and Buyer, but not Seller, may record the Memorandum of Agreement at
Buyer's sole expense and discretion. Buyer agrees, upon the expiration or
termination of this agreement by Buyer, but subject to performance of Seller's
obligations upon such termination, to execute and deliver to Seller a recordable
document provided by Seller at Seller's expense in form reasonably acceptable to
Buyer evidencing such expiration or termination by Buyer, and Buyer will
indemnify and save harmless Seller from any loss or damage suffered by Seller as
a result of Buyer's failure to do so.
18. MISCELLANEOUS.
18.1 INTERPRETATION. This agreement (i) contains the entire understanding
of the parties and there are no conditions precedent to its effectiveness or
collateral understandings with respect to its subject
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matter; (ii) may not be modified except by a writing signed by both parties; and
(iii) binds the parties and their respective heirs, personal representatives,
successors and permitted assigns. Where the context requires, the singular
includes the plural and the masculine includes the feminine and the neuter.
18.2 TIME OF ESSENCE. Except as specifically otherwise provided,
time is of the essence in every particular in the performance of the
obligations of the parties under this agreement.
18.3 SURVIVAL OF WARRANTIES AND REPRESENTATIONS. All warranties and
representations contained in this agreement shall, as applica ble, survive the
Closing, the delivery of the Deed, and any investigation by Buyer.
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19. ADDITIONAL PROVISIONS:
19.1 APPROVAL BY BUYER'S BOARD OF DIRECTORS. BUYER'S EXECUTION OF THIS
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AGREEMENT IS SUBJECT TO APPROVAL OF BUYER'S BOARD OF DIRECTORS WITHIN 10 DAYS
AFTER THE EFFECTIVE DATE. IF BUYER FAILS TO NOTIFY SELLER OF THE APPROVAL OF
THIS AGREEMENT BY BUYER'S BOARD OF DIRECTORS WITHIN SUCH TIME, THEN THE SELLER
WILL RETURN THE DEPOSIT TO BUYER, AND THIS AGREEMENT WILL BE VOID.
19.2 ELECTION TO PURCHASE OFFICE IN FURNISHED CONDITION. BUYER, AT BUYER'S
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OPTION, MAY ELECT TO PURCHASE THE OFFICE BUILDING IN ITS FURNISHED STATE (AS
EXISTS ON THE DATE OF THIS AGREEMENT), INCLUDING WITHOUT LIMITATION
APPROXIMATELY 5 SOFAS, 150 CHAIRS, ALL WOOD CASE GOODS SHOWN TO BUYER DURING
BUYER'S INITIAL VISUAL INSPECTION OF THE OFFICES, AND ALL WINDOW DRESSINGS,
BLINDS, SHADES AND HARDWARE, AND ALL FLOOR COVERINGS, BUT EXCLUDING ALL
REMOVABLE OPEN OFFICE SYSTEM PARTITIONS. BUYER MUST GIVE NOTICE OF SUCH ELECTION
WITHIN 10 DAYS AFTER THE CLOSE OF THE INVESTIGATION PERIOD. IF BUYER ELECTS TO
PURCHASE THE OFFICE BUILDING IN SUCH FURNISHED STATE, THE PURCHASE PRICE AS
STATED IN PARAGRAPH 2 WILL BE INCREASED TO $8,375,000.00.
19.3 CONVERSION OF HVAC SYSTEM. NOTWITHSTANDING ANYTHING TO THE CONTRARY
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ELSEWHERE CONTAINED IN THIS AGREEMENT, SELLER WILL PAY AT CLOSING THE ESTIMATED
COST, IF ANY, TO IMPLEMENT ANY RECOMMENDATION OF BUYER'S ENGINEERS THAT BUYER
CONVERT THE EXISTING HVAC SYSTEM (WHICH BUYER HAS BEEN ADVISED UTILIZES "R-22"
REFRIGERANT) TO THE USE OF AN APPROVED REFRIGERANT WHICH WOULD NOW BE REQUIRED
FOR HVAC SYSTEMS IN CONNECTION WITH THE CONSTRUCTION OF NEW MANUFACTURING AND
OFFICE FACILITIES COMPARABLE TO THE IMPROVEMENTS. BUYER WILL NOTIFY SELLER OF
SUCH RECOMMENDATION, AND FURNISH SELLER WITH AN ESTIMATE OF THE COST OF SUCH
CONVERSION FROM A REPUTABLE HVAC CONTRACTOR DOING BUSINESS IN THE HIGH POINT
AREA PRIOR TO CLOSING.
19.4 CONFIDENTIALITY. SELLER AGREES TO KEEP IN STRICT CONFIDENCE THIS
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AGREEMENT AND THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AT ALL TIMES PRIOR
TO AND AFTER THE CLOSING, UNTIL SUCH TIME AS BUYER HAS MADE A PUBLIC
ANNOUNCEMENT OF BUYER'S ACQUISITION OF THE PROPERTY. SELLER WILL NOT DISCLOSE
THE EXISTENCE OF THIS AGREEMENT, NOR ANY INFORMATION RELATING TO THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT TO ANYONE OTHER THAN SELLER'S OFFICERS AND
EMPLOYEES WHO HAVE A NEED FOR SUCH KNOWLEDGE BASED UPON THEIR DUTIES AND
RESPONSIBILITIES, SELLER'S PROFESSIONAL ADVISORS AND ANY PERSON OR AGENCY TO
WHOM DISCLOSURE IS REQUIRED BY LAW. SELLER WILL USE SELLER'S BEST EFFORTS TO
CAUSE ALL SUCH PERSONS TO MAINTAIN IN STRICT CONFIDENCE ALL SUCH INFORMATION
DISCLOSED TO THEM.
20. ADDENDA. List here any addenda that are attached to and made a part of this
agreement:
NONE.
IN WITNESS WHEREOF, the parties have executed this agreement as a sealed
instrument, as of the date first stated above.
SELLER: BUYER:
HOLLINGSWORTH AND STOUT ENTERPRISES, LLC (Seal) SEALY, INC.
By: (Seal) By:
----------------------------- -----------------------------
Member/Manager President
4
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AMENDMENT TO PURCHASE AGREEMENT AND ESCROW AGREEMENT
The Purchase Agreement dated January 1, 1998 between Hollingsworth & Stout
Enterprises, L.L.C. ("Seller") and Sealy, Inc. ("Buyer") as amended by Letter
Agreement dated March 9, 1998 from Seller to Buyer is hereby amended further as
follows:
1.Closing: Closing shall be held at the offices of Buyer's counsel, Gilbert
"Skipper" Gates, Esq. Keziah, Gates & Samet, L.L.P., 400 High Point
Bank Bldg., 300 North Main Street, High Point, NC 27261-2608 on
Monday, April 13, 1998 at 1:30 p.m. ("Closing Date").
2.Purchase Price and Escrow of Funds:
(a) On the Closing Date, Buyer shall cause the net amount due as noted on the
Closing Statement, said amount being sum of $8,340,395.97 to be sent by
wire transfer to the Trust Account of Buyer's Counsel using the following
wire transfer instructions: High Point Bank & Trust Company; High Point,
North Carolina - ABA No. 053100685 for credit to Keziah, Gates & Samet,
L.L.P., Real Estate Trust Account No. 040107892.
(b) Provided all obligations of Seller under the Purchase Agreement have been
satisfied by Seller as of the Closing Date, including the delivery of the
Deed to Buyer, the sum of $3,312,299.34 shall be delivered to Seller after
satisfaction of the outstanding mortgage liens on the Property and Seller
shall be entitled to possession of the $25,000 Deposit.
(c) The sum of $375,000 remaining in the Trust Account shall be trans ferred
by Buyer's counsel to an escrow account bearing interest in favor of Buyer
which sum (less interest and other deductions noted below) shall be paid
to Seller by Buyer's counsel, as escrow agent, in accordance with the
requirements noted below:
(i) On April 22, 1998, the sum of $125,000 provided:
(a) Seller and Buyer shall agree no later than April 20, 1998 either
(1) as to the office furnishings and furniture which Buyer has
agreed to buy and Seller has agreed to sell under Paragraph 19.2
of the Purchase Agreement ("Purchased Furniture") for the sum of
$125,000; or (2) as to the amount by which the $125,000 sum shall
be reduced to reflect the value of office furnishings and
furniture which Seller shall not convey to Buyer (''Purchase Sum")
in which event the amount in excess of the Purchase Sum shall be
returned to Buyer; and
(b) Seller delivers to Buyer a Bill of Sale transferring unencumbered
title to and delivers possession of the Purchased Furni ture to
Buyer.
(ii) On May 4, 1998, the sum of $125,000 provided Dar-Ran furniture and
Seller have vacated and delivered to Buyer possession of the
manufacturing building located at the Property in its entirety as of
5:00 p.m. May 3, 1998 in the condition required by Paragraph 11.2 of
the Purchase Agreement. In the event Seller fails to meet the May 3,
1998 deadline and later vacates and delivers possession of the
manufacturing building to Buyer, the sum of $125,000 due Seller
hereunder shall be reduced in accordance with Paragraph 3 below.
(iii) On May 18, 1998, the sum of $125,000 provided Dar-Ran Furniture and
Seller have vacated and delivered to Buyer possession of the office
building located at the Property in its entirety as of 5:00 p.m. May
17, 1998 in the condition required by Paragraph 11.2 of the Purchase
Agreement. In the event Seller fails to meet the May 17, 1998
deadline and later vacates and delivers possession of the existing
office building to Buyer, the sum due Seller hereunder shall be
further reduced in accordance with Paragraph 3 below.
<PAGE>
(iv) Notwithstanding the foregoing, Seller shall not be obligated to
address by clean-up or otherwise any changes to the Property or
alterations to either the manufacturing or office building caused by
Buyer's contractors.
3. Liquidated Damages. Failure of Dar-Ran Furniture and/or Seller to vacate
the manufacturing building and/or the office building by the dates and/or
and/or in the manner required by Paragraphs 2(c) (ii) and/or (iii) shall
result in Seller being liable to Buyer in the amount of $1,250 per day for
the manufacturing building and $242 per day for the office building (based
upon a lease rate of $3.00 per square foot) until possession and/or
condition of the building or buildings not so delivered is delivered to
Buyer. Such sums due to Buyer hereunder shall first be deducted from the
amounts to be paid to Seller under Paragraph 2 (c) (ii) and/or (iii) with
any balance being due and payable to Buyer within ten (10) business days
after possession and/or condition is so delivered and shall bear interest
at the rate of ten percent (10%) per annum until paid.
IN WITNESS WHEREOF, Buyer and Seller have signed this Amendment to Purchase
Agreement and Escrow Agreement as of April 13, 1998.
HOLLINGSWORTH & STOUT ENTERPRISES, SEALY, INC. ("Buyer")
L.L.C. ("Seller")
By: ____________________________ By: _____________________________
Title: _________________________ Title: __________________________