STATE OF NORTH CAROLINA
CUMBERLAND COUNTY
REAL ESTATE EXCHANGE CONTRACT
-----------------------------
THIS REAL ESTATE EXCHANGE CONTRACT (the "Contract"), made and entered
into this 3rd day of October, 2003, by and among MJS ACQUISITION COMPANY, a
North Carolina corporation hereinafter referred to as "MJS," and MIDDLE ROAD
PROPERTIES, LLC, a North Carolina limited liability company, hereinafter
referred to as "MRP."
W I T N E S S E T H:
WHEREAS, MJS is the owner of certain real property located in or near
the City of Fayetteville, in Cumberland County, North Carolina, with property
addresses of:
(1) 000 Xxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxx Xxxxxxxx (PIN
0447-45-1359) and known as the "XxXxxxxx Land" containing
approximately 20 acres and more fully described on Exhibit A,
attached hereto and made a part hereof;
(2) 2.0 acres (approximately) of 1 Soffe Drive, Fayetteville,
North Carolina (a part of PIN 0447-55-7744) to be surveyed and
more fully described on Exhibit B, attached hereto and made a
part hereof;
(3) 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxx Xxxxxxxx (PIN
0000-00-0000 and 0000-00-0000) known as the "Distribution
Center" containing approximately 16.82 acres and 6.98 acres
respectively and more fully described on Exhibit C, attached
hereto and made a part hereof; and
(4) three-quarters undivided interest as tenants in common in 126
and 128 Xxxxxxx Street, Fayetteville, North Carolina (PIN
0000-00-0000, 0000-00-0000 and 0000-00-0000) and known as the
"Xxxxx Building" and more fully described on Exhibit D,
attached hereto and made a part hereof (collectively, the real
property described in 1-4 above shall be referred to as "MJS
Real Property;"
WHEREAS, MRP is the owner of certain real property located in or near
the City of Fayetteville, in Cumberland County, North Carolina, as follows:
(1) 000 Xxxxxx Xxxx, Xxxxxxxxxxxx, Xxxxx Xxxxxxxx, containing
approximately 21.75 acres with a property address of and more
particularly described on Exhibit E, attached hereto and made
a part hereof; and
(2) 3.72 acre tract in Cumberland County, North Carolina, and more
fully described on described on Exhibit F, attached hereto and
made a part hereof (collectively, the real property described
in 1 - 2 above shall be referred to as "MRP Real Property");
WHEREAS, MJS desires to exchange the aforesaid MJS Real Property and
the improvements located thereon for the aforesaid MRP Real Property upon the
terms and conditions hereinafter set forth; and
WHEREAS, MRP desires to exchange the aforesaid MRP Real Property and
the improvements located thereon for the aforesaid MJS Real Property upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. MJS Property. MJS agrees to exchange the real property described as
MJS Real Property, together with all improvements and structures located
thereon, and all rights, privileges, members, licenses and easements appurtenant
thereto (hereinafter called the "MJS Property") for the MRP Real Property and
MRP Property (as hereinafter defined).
2. MRP Property. MRP agrees to exchange the real property described as
MRP Real Property, together with all improvements and structures located
thereon, and all rights, privileges, members, licenses and easements appurtenant
thereto (hereinafter called the "MRP Property") for the MJS Real Property and
MJS Property. "Grantor" shall refer to either party with respect to the property
that it is transferring to the other party. "Grantee" shall refer to either
party with respect to the property it is receiving from the other party.
3. Xxxxxxx Money. Intentionally deleted.
4. Exchange Value. The exchange value attributed to the MJS Property
(the "MJS Exchange Value") shall be Three Million One Hundred Twenty-Five
Thousand and no/100 Dollars ($3,125,000.00). The exchange value attributed to
the MRP Property (the "MRP Exchange Value") shall be Three Million One Hundred
Twenty-Five Thousand and no/100 Dollars ($3,125,000.00). Collectively, the MJS
Exchange Value and MRP Exchange Value shall be referred to as "Exchange Values".
The Exchange Values shall be satisfied at Closing by each party delivering a
deed(s) for its respective property. There shall be no payments of cash for the
Exchange Values as the transaction is to be a relinquishment and replacement of
real property in accordance with Section 1031 of the Internal Revenue Code of
1986, as amended. The parties agree that the MJS Exchange Value and the MRP
Exchange Value shall be used by the parties to complete IRS Form 8824, and the
parties agree to cooperate with each other regarding the exchange of real
property hereunder.
5. Costs and Prorations. Each party shall pay the transfer or grantor
tax applicable to the sale of the property it is transferring, the cost of
preparation of the deed(s) to the property it is transferring and the costs of
recording all documents, other than the deed(s) to be recorded in connection
with the transaction. Each party shall pay the cost of recording the deed(s) for
2
the property it is receiving. Each party shall pay its own attorney's fees,
costs of its title examination, title insurance and any survey it obtains. The
ad valorem real estate taxes for the properties shall be prorated as of the date
of Closing.
6. Closing. The closing or settlement of this transaction (the
"Closing") shall be held at the office of Xxxxxx & Xxxxxxx LLP at 0000 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx immediately following and in conjunction with
the closing pursuant to that certain Stock Purchase Agreement dated as of July
3, 2003 by and between Delta Apparel, Inc., as buyer, and Xxxxx X. Xxxxx, Xxxx
X. Xxxxx, Xxxxxxx X. Xxxxxxxx and X.X. Xxxxx Co. collectively, as seller (as
amended, "Stock Purchase Agreement"), unless MJS and MRP shall mutually agree
upon another date, time or place.
7. Title to Property. At the Closing, each party shall convey to the
other, his heirs, or successors and assigns, indefeasible, marketable and
insurable fee simple title to its property free and clear of all objections,
easements, liens, encumbrances, restrictions, encroachments and other survey
exceptions except those set forth on Exhibit G hereto (the "Permitted
Encumbrances"), which include only the lien of 2003 ad valorem taxes, customary
general delivery utility easements not adversely affecting the use of the
property for commercial purposes, and any other encumbrances upon which the
parties agree; provided, however, it is known that MJS owns only an undivided
3/4 interest as tenant in common in the fee estate of the Xxxxx Building.
8. Inspection Period. Intentionally deleted.
9. Brokerage. Intentionally deleted.
10. Access to Property. Intentionally deleted.
11. Eminent Domain. If, at any time prior to Closing, any Grantor
receives notice of the commencement or threatened commencement of eminent domain
or other like proceedings against the property or any portion thereof, such
Grantor shall immediately give Notice (as hereinafter defined) thereof to
Grantee. Within five (5) days after receipt of such Notice by Grantor, Grantee
shall elect by Notice to the other party either (i) to terminate this Contract,
or (ii) to close the transaction contemplated hereby in accordance with its
terms but subject to such proceedings, in which event the Exchange Values shall
not be reduced but such Grantor shall assign to Grantee, Grantor's rights in any
condemnation award or proceeds. If Grantee does not give Notice timely, Grantee
shall be deemed to have elected to close the transaction contemplated hereby in
accordance with clause (ii) above. Closing may be postponed a sufficient number
of days to permit Grantee to exercise its rights under this paragraph.
12. Destruction of Improvements. If all or any part of the
improvements, if any, on the property is destroyed or damaged (excluding normal
wear and tear) prior to Closing, Grantor shall give Notice to Grantee of such
damage or destruction and of Grantor's insurance coverage. If the cost of
repairing or replacing such damaged or destroyed property shall exceed
$50,000.00, Grantee shall elect within thirty (30) days by Notice to Grantor
either (i) to terminate this Contract, or (ii) to close the transaction
contemplated hereby, in which event the Exchange Values shall not be reduced but
Grantor shall assign to Grantee, Grantor's rights in any insurance proceeds paid
or payable to Grantor in connection with such damage or destruction. If Grantee
3
does not give Notice timely, Grantee shall be deemed to have elected to close
the transaction contemplated hereby in accordance with clause (ii) of the
preceding sentence. If the cost of repairing or replacing such damaged or
destroyed property shall not exceed $50,000.00, Grantor shall repair or replace
such destroyed or damaged property prior to Closing or pay to Grantee at Closing
the sums necessary to repair or restore the property, and Grantee shall proceed
to close the transaction. Grantor agrees until Closing to preserve in effect all
existing insurance on any improvements on the property owned by it. Closing may
be postponed a sufficient number of days to permit Grantee to exercise its
rights under this paragraph.
13. Notice. Each notice ("Notice") provided for under this Contract
must comply with the requirements of this paragraph. Each Notice shall be in
writing and shall be delivered in person or sent by depositing it with a
nationally recognized overnight courier (such as Federal Express) with adequate
postage prepaid, for next day delivery addressed to the appropriate party (and
marked to a particular individual's attention if so indicated) as hereinafter
provided. Each Notice personally delivered shall be effective on delivery; each
Notice sent by a nationally recognized overnight courier shall be effective when
deposited with the courier for delivery as specified herein. A copy of each
Notice served by overnight courier shall also be sent by telecopier to the
respective parties on the same date of delivery of the Notice to the courier.
The parties' addresses shall be those set forth below and a copy of any Notice
shall be sent to the parties designated below:
As to MJS: MJS Acquisition Company
--------------------------------
--------------------------------
Telecopier No.:
---------------------
With copy to: Xxxxxxx Xxxxx Lux, Esq.
Xxxxx Xxxxxxx Xxxxxxx & Xxxxxx, P.A.
00 Xxxx Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
Telecopier No.: 000-000-0000
As to MRP: Middle Road Properties, LLC
000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telecopier No.:
---------------------
With copy to: Xxxxx X. X'Xxxxx , Esq.
Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Any party shall have the right from time to time to change the
address or individual's attention to which Notices to it shall be sent by
4
giving to the other party at least ten (10) days' prior Notice thereof. For
purposes hereof, "business days" shall mean Monday through Friday,
excluding federal holidays.
14. Covenants, Representations and Warranties. MJS and MRP make the
following respective covenants, representations and warranties for the reliance
of the other in entering this Contract:
14.1 MJS's Covenants, Warranties and Representations as to
Authority, Etc. MJS covenants, represents and warrants (which
covenants, representations and warranties shall also be true at the
time of Closing) as follows:
(a) The execution, delivery and performance of this Contract
by MJS does not and will not result in any violation of, or be in
conflict with or constitute a default under, any provisions of any
agreement, mortgage, deed of trust, indenture, license, security
agreement, or any other instrument or any judgment, decree, order,
statute, rule or governmental regulation to which MJS is a party or
which affects the MJS Property.
(b) MJS is a corporation duly organized, validly existing and
in good standing under North Carolina law. All action required for the
approval of this Contract has been taken and this Contract is the
legally binding, valid and enforceable obligation of MJS.
(c) There is not any action, suit, investigation or proceeding
by or before any Court, arbitrator, administrative agency or other
governmental authority initiated at any time, now pending or, to the
best of MJS's knowledge, threatened which involves MJS which if
adversely determined would have a material adverse effect on the MJS
Property or which involves the transactions contemplated by this
agreement or the properties covered hereby, nor is there, to the best
of MJS's knowledge, any state of facts, or occurrence of any event
which might give rise to any of the foregoing.
(d) Based upon the title insurance commitments obtained from
Investors Title Insurance Company on behalf of MJS, MJS has good,
marketable, indefeasible and insurable fee simple title to the MJS
Property, free and clear of any objections, easements, liens,
encumbrances, restrictions, encroachments or other survey exceptions of
every nature, other than the Permitted Encumbrances. To the best of
MJS's knowledge none of the Permitted Encumbrances in any material
respect detracts from the value of the MJS Property or interferes with
or impairs the present and continued use thereof in the normal conduct
of business of commercial business.
(e) To the best of MJS's knowledge, no consent or approval of,
prior filing with or notice to, or other action by, any governmental
body or agency, or any other third party is required in connection with
the execution and delivery of this agreement by MJS, or the
consummation of the transactions provided for herein.
5
14.2 MRP's Covenants, Warranties and Representations as to
Authority, Etc.
(a) The execution, delivery and performance of this Contract
by MRP does not and will not result in any violation of, or be in
conflict with or constitute a default under, any provisions of any
agreement, mortgage, deed of trust, indenture, license, security
agreement, or any other instrument or any judgment, decree, order,
statute, rule or governmental regulation to which MRP is a party or
which affects the MRP Property.
(b) MRP is a limited liability company duly organized and
validly existing under North Carolina law as evidenced by a Certificate
of Existence issued by the North Carolina Secretary of State dated
September 23, 2003. All action required for the approval of this
Contract has been taken and this Contract is the legally binding, valid
and enforceable obligation of MRP.
(c) There is not any action, suit, investigation or proceeding
by or before any Court, arbitrator, administrative agency or other
governmental authority initiated at any time, now pending or, to the
best of MRP's knowledge, threatened which involves MRP or, the MRP
Property which if adversely determined would have a material adverse
effect on the MRP Property or which involves the transactions
contemplated by this agreement or the properties covered hereby, nor is
there, to the best of MRP's knowledge, any state of facts, or
occurrence of any event which might give rise to any of the foregoing.
(d) Based upon the title commitments issued by Investors Title
Insurance Company, MRP has good, marketable, indefeasible and insurable
fee simple title to the MRP Property, free and clear of any objections,
easements, liens, encumbrances, restrictions, encroachments or other
survey exceptions of every nature, other than the Permitted
Encumbrances. None of the Permitted Encumbrances in any material
respect detracts from the value of the MRP Property or interferes with
or impairs the present and continued use thereof in the normal conduct
of business of commercial business.
(e) All buildings, structures, and improvements, if any, upon
the MRP Property and all electric, gas, water and sewer utilities
serving the MRP Property are structurally sound and in good condition
and repair, ordinary wear and tear excepted. All improvements on the
MRP Property have been constructed in compliance with all applicable
building codes, ordinances, regulations and laws, including without
limitation the Americans with Disabilities Act and the Fair Housing
Act, and with the plans and the approvals and permits obtained therefor
from all governmental authorities, and certificates of occupancy and
approval by all applicable governmental authorities have been obtained.
There are no zoning or similar land use restrictions presently in
effect with respect to the MRP Property which would impair the use of
such MRP Property for commercial purposes for which it is now being
used or for which MJS intends to use it, and the real property is in
compliance with all applicable zoning or similar land use restrictions
of all governmental authorities having jurisdiction thereof. There are
no proceedings for the taking of any of the MRP Property by eminent
6
domain nor for changing the public access thereto from abutting streets
by any governmental authority pending or, to the knowledge of MRP,
threatened.
(f) No consent or approval of, prior filing with or notice to,
or other action by, any governmental body or agency, or any other third
party is required in connection with the execution and delivery of this
agreement by MRP, or the consummation of the transactions provided for
herein.
(g) There are no contracts affecting the MRP Property which
will survive the Closing, except the contracts set forth on Exhibit I
(the "MRP Property Contracts"), if any, which MRP Property Contracts
shall be assumable by MJS without the consent of any other party except
parties whose consent shall have been obtained by Closing.
(h) MRP has conducted its business on the MRP Property so as
to comply with all laws, statutes, regulations, rules and other
requirements of any governmental authority applicable to it, the
noncompliance with which would have a materially adverse effect on the
MRP Property, and there are no outstanding judgments, orders, writs or
decrees of any judicial or other governmental authority binding
specifically against MRP and pertaining to the MRP Property.
(i) MRP at all times during its ownership and/or occupancy of
the property has used the MRP Property only for the conduct of and, to
the best of MRP's knowledge, the uses of the property prior to MRP's
ownership and/or occupancy thereof are as listed on Exhibit I; and, the
MRP Property (i) is not being and has not been used as a sanitary
landfill, and no activity is or has been conducted thereon which is
subject to regulation under the North Carolina Solid Waste Management
Act or any similar state or federal statute or regulation; (ii) does
not consist of or contain wetlands as such term is used in Section 404
of the Clean Water Act, or such wetlands as do exist on the MRP
Property are not of such size or location as to interfere with, prevent
or impact the continued operation of the business; (iii) does not
consist of filled land; and (iv) is not located in a special flood
hazard area as such term is used in the Flood Disaster Protection Act
of 1973 or in a floodway as such term is used in the North Carolina
Water and Air Resources Act or any similar state or federal statute or
regulation.
The MRP Property and the uses thereof comply in all material
respects with all federal, state and local laws, rules, regulations,
orders and requirements relating to health, safety or the environment,
including without limitation those relating to ambient air, surface and
ground water, surface and subsurface soils and other natural resources
and those relating to the manufacture, processing, distribution, use,
treatment, storage, handling, transportation, release, disposal or
importing and exporting of hazardous substances, hazardous wastes,
pollutants, contaminants, toxic substances, asbestos, oil, other
petroleum or chemical, biological or radioactive substances (said laws,
rules, regulations, orders and requirements hereinafter collectively
referred to as "Environmental Laws"). (i) MRP has received no notice
from any governmental authority having jurisdiction thereof that the
7
MRP Property or equipment and the respective uses thereof are now or
have previously been in violation of any Environmental Laws; (ii) there
does not exist on the MRP Property any hazardous substance, hazardous
waste, pollutant, contaminant, toxic substance, asbestos, oil, or other
petroleum or chemical, biological or radioactive substance which is
subject to regulation under any Environmental Laws or any storage tank
used for the storage thereof, whether above-ground or underground;
(iii) except as set forth on Exhibit Ithere has been no discharge,
storage or disposal of any hazardous substance, hazardous waste,
pollutant, contaminant, toxic substance, asbestos, oil, other petroleum
or chemical, biological or radioactive substance which is subject to
regulation under any of the Environmental Laws on or from the MRP
Property and any storage or utilization of any such substance by MRP as
set forth on Exhibit I is and at all times has been in full compliance
with Environmental Laws; and (iv) any and all reports, analyses,
studies or other documentation owned or controlled by MRP identifying
or relating to any hazardous substance, hazardous waste, pollutant,
contaminant, toxic substance, asbestos, oil, or other petroleum or
chemical, biological or radioactive substance which is subject to
regulation under any Environmental Laws or any storage tank used for
the storage thereof, used in connection with, existing upon, stored
upon or disposed or discharged on or from the MRP Property have been
delivered to MJS and are listed on Exhibit I.
(j) MRP represents that it will conduct its business on the
MRP Property only in the normal course through the Closing and that it
will use its best efforts to preserve the business at the MRP Property
and to preserve for MJS the goodwill of the tenants and others having
business relations with MRP at the MRP Property.
15. Conditions Precedent to Each Grantee's Obligations. The obligation
of the Grantee to consummate the transaction provided for herein at Closing is
subject to the fulfilling of the following conditions at Closing, unless Grantee
shall agree in writing to waive the same:
15.1 The representations and warranties of each party herein
contained shall be true in all material respects on and as of the date
and time of Closing with the same force and effect as if made on and as
of such date and time, and the covenants of each party set forth herein
shall have been complied with at or before the Closing.
15.2 Each party shall have obtained all consents, approvals
and releases required for the transfer to the other party.
15.3 Grantee shall have determined that Grantor can convey
title at Closing in accordance with the provisions hereof, and Grantee
shall have obtained a commitment to issue title insurance insuring
Grantee's title to the property in accordance herewith.
15.4 MJS shall have determined in its discretion that the
existing improvements are in compliance with all applicable zoning,
building and other governmental laws, ordinances and regulations,
8
including, without limitation, those applicable to disabled persons,
that the use of the property for MJS's intended use is a permitted use
by right under such laws and ordinances.
15.5 MJS shall have obtained a certification from the
applicable governmental authorities that water, sewer, gas, and
electrical utilities are available at the property; that there are no
outstanding charges for extending any such utility to the property
boundaries; and that utility service is available in quantities and
rates deemed sufficient to MJS in its discretion for the operation of
MJS's intended use on the property.
15.6 MJS shall have received engineering and other
professional reports satisfactory to it in its discretion that the
property is topographically, geologically and otherwise suitable for
the location thereon of the existing improvements and the operation
therein of MJS's intended use/business, all without necessitating the
expenditures of any funds for unusual purposes such as pilings,
foundation supports, removal of excessive rocks, or any other
extraordinary excavation or grading, and that the property is properly
drained.
15.7 MJS shall have received a certification from the proper
governmental authorities to the effect that all improvements on the
property, have been constructed in accordance with the plans therefor
submitted to and approved by such governmental authorities and that
certificates of occupancy have been issued therefor and are currently
in effect.
15.8 MJS shall have reviewed all of the building and
construction plans for the property and conducted a full physical
inspection of the property, and shall have determined satisfactory to
it in its discretion that the existing improvements are in a
first-class condition and state of repair.
15.9 MJS's survey shall have disclosed that the property
contains at least the amount of acreage set forth herein and that there
are no encroachments, overlaps, set-back violations or boundary
disputes affecting the property.
15.10 MJS shall have obtained such governmental assurances as
it shall in its discretion require of adequate driveway access to and
from the property and abutting public roads.
15.11 The Grantor shall have delivered to the Grantee such
other and further certificates, assurances and documents as Grantee may
reasonably request in order to evidence the accuracy of the
representations and warranties herein, and the fulfillment of the
conditions to Grantee's obligations.
15.12 MJS shall have obtained a report from an environmental
consultant certifying that no petroleum or hazardous or toxic
substances or materials are located on the property and that no
violation of the federal, state, and local environmental laws exists,
and the representations and warranties hereof shall be true at all
times through and as of the date and time of Closing as if made as of
9
such times. Without limiting the generality of the foregoing, MJS shall
have received an environmental report satisfactory to it in its
discretion indicating the absence of any asbestos on the property.
15.13 MJS shall have obtained a report satisfactory to it in
its discretion from an environmental or engineering consultant
concerning any issues of wetlands upon the property.
15.14 There shall not have been any condemnation of or loss,
damage or destruction to the property, unless Grantee shall have waived
the same and proceeded in accordance with the terms hereof.
15.15 MJS's review of the leases, rent rolls and security
deposits, if any, shall have been satisfactory to it in its discretion.
15.16 MRP shall have furnished MJS copies of all Contracts and
MJS shall have reviewed and approved all such Contracts to be assumed
by MJS and for which MJS shall have liability after closing. MRP shall
have furnished MJS within ten (10) days after execution of this
Contract, copies of all deeds, surveys, plats, appraisals, leases, and
title insurance policies in MRP's possession pertaining to the title to
the property and of all reports upon any investigation of environmental
or other condition.
15.17 If any material adverse change shall occur with respect
to any of the above-mentioned conditions prior to Closing, Grantee
shall have no obligation to consummate the transaction provided for
herein.
15.18 MRP and MJS shall execute a Lease Agreement for the
Distribution Center in the form reasonably agreed to by the parties.
15.19 MRP and MJS shall have closed the transaction
contemplated by the Stock Purchase Agreement.
16. Assignment of Warranties. Grantor shall assign and convey to
Grantee at Closing all contractor's warranties relating to the construction of
improvements on the property and all manufacturers' and other warranties
relating to the improvements.
17. Documents. MRP shall convey title to the MRP Property to MJS in
accordance with the provisions hereof by execution and delivery of a special
warranty deed, in recordable form. MJS shall convey title to the MJS Property to
MRP in accordance with the provisions hereof by execution and delivery of a quit
claim deed, in recordable form. Grantor shall provide Grantee at Closing: (i) a
FIRPTA certificate, evidencing that Grantor is not a foreign person as defined
in Section 1445(f)(3) of the Internal Revenue Code; (iii) a Form 1099, if
Grantor is not exempted from providing such form; (iv) an owner's affidavit and
lien waiver in a form reasonably acceptable to the title insurance company of
Grantee's choice (hereinafter the "Title Company"); and (v) such other documents
and instruments as Grantee or the Title Company may reasonably require.
18. New Survey. Each Grantee shall have the right to cause a new survey
of the property to be conducted at its expense prior to Closing, or, in the
10
alternative, Grantee may accept and use any existing survey of Grantor. If
Grantee obtains a new survey, Grantor will, if requested, use in the deed of
conveyance the description which is in accordance with the new boundary survey
of the property and which is approved by the Title Company.
19. Release and Indemnity.
19.1 MRP hereby releases and shall indemnify and hold MJS
harmless from and against any and all liability, obligation, loss or
damage of every nature ("loss") that MJS may suffer as a result of
claims, demands, costs, expenses (including, without limitations
reasonable attorneys' fees and costs), clean-up costs, fines,
penalties, assessments, orders, rulings, judgments or other matters
against MJS of any kind or character arising out of or in any manner
incident or relating or attributable to (i) any untruth, breach,
inadequacy, inaccuracy or incompleteness, in any material respect of
any representation, covenant or warranty of MRP herein, (ii) any
failure of MRP in a material respect to perform any covenant or
obligation under this Contract, (iii) any underground storage tank,
out-of-use transformers, oil, gasoline or other fuel, toxic,
radioactive or hazardous material or substance or other contaminant
located on the property prior to the date and time of Closing or the
diffusion or other movement thereof to adjoining properties at any
time, (iv) the removal from the property of any such underground
storage tank, out-of-use transformer, gasoline, oil, other fuel,
hazardous, radioactive or toxic material or substance, or contaminant
at any time, (v) any violation of any environmental law, regulation or
ordinance of any state, federal or local authority arising out of any
material of any nature located on the property prior to the date and
time of Closing, and (vi) in general, the ownership and operation of
the property thereon prior to Closing.
19.2 Without limiting the generality of the foregoing
indemnity, it is agreed that such indemnity shall cover any loss,
including loss of rents or property, incurred by MJS by reason of (i)
the disruption, cessation, or delay of business on the premises due to
any action taken as a result of any such event, occurrence or
circumstance as described in subparagraph 19.1 above; (ii) any expense
of complying with any governmental monitoring or other preventive or
corrective measure ordered by any governmental authority; and (iii) any
costs of complying with any other state or federal directive relating
to the existence of the contamination or other environmental violation
or its clean-up.
19.3 The indemnity contained herein shall survive the Closing.
20. Time of Essence. Time is of the essence of this Contract.
21. Entire Agreement. This Contract merges all prior negotiations and
understandings between the parties, and , with the Stock Purchase Agreement,
constitutes their entire agreement for the exchange of the property and other
assets described in paragraphs 1 and 2, which is binding upon Grantee and
Grantor when executed by MJS and MRP, regardless of any written or verbal
representations of any agent, manager, or other employees to the contrary. This
Contract and the Stock Purchase Agreement constitute the entire agreement of the
parties and may not be amended except by written instrument executed by MRP and
MJS.
11
22. Severability. Any provision of this Contract which is prohibited or
unenforceable in any jurisdiction shall as to such jurisdiction be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
23. Enforcement. This agreement shall be construed as a contract to
exchange real estate binding upon the parties hereto, and the Grantee shall,
without excluding his other remedies available to him at law or in equity, be
entitled to the remedy of specific enforcement.
Interpretation. The paragraph headings are inserted for convenience
only and are in no way intended to interpret, define, or limit the scope or
content of this Contract or any provision hereof.
Possession. Grantor shall deliver actual possession of the property at
Closing.
Survival and Termination.
23.1 The provisions of this Contract relating to Grantee's
entering upon the property prior to Closing, and the indemnifications
contained herein shall survive Closing or Termination (as hereinafter
defined).
23.2 All warranties, representations and indemnifications set
forth in this Contract shall survive Closing and any examination or
investigation made by Grantee.
23.3 "Terminate" or "Termination" shall mean the termination
of this Contract prior to Closing pursuant to a right to do so provided
herein. Upon Termination, the parties shall have no further rights or
duties under this Contract except as expressly provided herein.
23.4 If this Contract is terminated for any reason other than
a breach or default by Grantor, Grantee shall furnish Grantor copies of
all surveys and engineering and environmental reports obtained by
Grantee relating to the property.
24. Applicable Law. This Contract shall be construed and interpreted in
accordance with the laws of the State of North Carolina.
25. Successors and Assigns. This Contract shall be binding upon and
inure to the benefit of the parties and their respective heirs, or successors
and assigns, if any. Grantee shall have the right to assign his rights and
obligations hereunder to and upon such assignment and the assumption of
Grantee's rights and obligations hereunder by such assignee, the assignee shall
have all rights and liabilities of Grantee hereunder and Grantee shall have no
further rights and liabilities hereunder.
26. Exhibits. The exhibits referred to in and attached to this Contract
are incorporated herein in full by reference.
12
27. Counterpart Execution. This Contract may be executed in separate
counterparts, with each party to receive a fully executed counterpart.
28. Best Efforts. Grantor and Grantee agree to exercise all due
diligence and their best efforts to take such action as shall be necessary by
them respectively to cause the conditions of Closing to be satisfied at Closing.
29. Conditions of MJS's Agreement.
29.1 MJS has entered into this Contract for the purposes of
consummating an exchange of real property in accordance with Section
1031 of the Internal Revenue Code of 1986, as amended.
29.2 While MJS has agreed to assist with respect to the
exchange in accordance with Section 1031 of the Internal Revenue Code
of 1986, as amended, MJS has not made any representations or warranties
with respect to the subject exchange and shall have no liability or
obligation of any nature to MRP relating to such exchange, including
without limitation the status of title to the exchange property (except
as set forth herein), the condition of the exchange property (except as
set forth herein), or the economic or tax consequences of the exchange.
29.3 MJS makes no representation or warranty, nor shall MJS
nor its counsel bear any responsibility or liability concerning the
federal or state tax consequences to MRP of the transactions
contemplated herein, including, without limitation, the status of any
replacement property as "like-kind" property or the qualification of
this transaction as a tax-deferred exchange pursuant to Section 1031 of
the Internal Revenue Code. MRP agrees to seek its own independent legal
tax advice.
30. Conditions of MRP's Agreement.
30.1 MRP has entered into this Contract for the purposes of
consummating an exchange of real property in accordance with Section
1031 of the Internal Revenue Code of 1986, as amended.
30.2 While MRP has agreed to assist with respect to the
exchange in accordance with Section 1031 of the Internal Revenue Code
of 1986, as amended, MRP has not made any representations or warranties
with respect to the subject exchange and shall have no liability or
obligation of any nature to MJS relating to such exchange, including
without limitation the status of title to the exchange property (except
as set forth herein), the condition of the exchange property (except as
set forth herein), or the economic or tax consequences of the exchange.
30.3 MRP makes no representation or warranty, nor shall MRP
nor its counsel bear any responsibility or liability concerning the
federal or state tax consequences to MJS of the transactions
contemplated herein, including, without limitation, the status of any
replacement property as "like-kind" property or the qualification of
13
this transaction as a tax-deferred exchange pursuant to Section 1031 of
the Internal Revenue Code. MJS agrees to seek its own independent legal
tax advice.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
14
IN WITNESS WHEREOF, the Parties have set their hands and seals hereto
as of the date and year indicated below their respective signatures.
Middle Road Properties, LLC (SEAL)
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: Manager
Date signed by MRP:
October 3, 2003
---------------
MJS ACQUISITION COMPANY
By: /s/ Xxxxxx X. Humphyeys
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
---------------------------------------
Title: President and CEO
--------------------------------------
Date signed by MJS:
October 3, 2003
---------------
15
LIST OF EXHIBITS
Exhibit A XxXxxxxx Land - 20 acres
Exhibit B 2.0 acres of 1 Soffe Drive
Exhibit C Distribution Center (16.82 acres and 6.98 acres)
Exhibit X Xxxxx Property
Exhibit E 000 Xxxxxx Xxxx (00.00 xxxxx)
Exhibit F Vacant/Parking Area (3.72 acres)
Exhibit G Permitted Exceptions
Exhibit H Contracts for MRP Property
Exhibit I Uses of MRP Property
16
