EXHIBIT 10.23
REAL ESTATE PURCHASE AGREEMENT
THIS REAL ESTATE PURCHASE AGREEMENT ("Agreement") is made to be effective
as of the Effective Date (as hereinafter defined), between Golden Books
Publishing Company, Inc. (hereinafter the "Seller"), with a notice address c/o
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, fax no.
▇▇▇-▇▇▇-▇▇▇▇, ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., and ▇▇▇▇▇ ENTERPRISES, INC.
(hereinafter the "Buyer"), with a notice address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, fax no. ▇▇▇-▇▇▇-▇▇▇▇, ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
W I T N E S S E T H:
1. Sale of the Real Property. Subject to the other provisions of this
Agreement, Seller agrees to sell and Buyer agrees to purchase, on the terms
hereafter stated, certain real property located near Fayetteville, North
Carolina ("Real Property"), which Real Property is described on Exhibit "A"
hereto, together with (a) all buildings thereon and all related improvements and
all equipment and fixtures appurtenant thereto, (b) any current service and
supply contracts, if any, pertaining to the Real Property; (c) any unexpired
warranties and guaranties relating to the Real Property and improvements and
fixtures thereon, if any; and (d) the Lease (as defined in Section 3.E.
below)related to the Property (with the items referenced in sub-paragraphs (a),
(b), (c), and (d) hereafter collectively the "Property". The date the Seller
delivers a fully-executed counterpart of this Agreement to the Title Company is
referred to herein as the "Effective Date".
2. Purchase Price. The purchase price ("Purchase Price") shall be
$7,250,000.00. Buyer shall deposit $50,000 (the "▇▇▇▇▇▇▇ Money Deposit") as
▇▇▇▇▇▇▇ money with a mutually agreed upon title company (the "Title Company"),
within three (3) business days following the Effective Date, to be applied
against the Purchase Price payable on the Closing Date, or otherwise to be dealt
with as provided herein. The ▇▇▇▇▇▇▇ Money Deposit shall be increased as
provided in paragraph 7 below.
3. Title; Survey; Environmental Information; Lease, Etc.
A. Within twenty (20) days following the Effective Date, Buyer
will endeavor to obtain a preliminary binder for issuance of an owner's
title insurance policy ("Title Report") issued by the Chicago Title
Insurance Company through its agent, The Security Abstract Title
Company, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, phone no.
(▇▇▇) ▇▇▇-▇▇▇▇, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇ (the "Title Company"),
showing Buyer as the prospective named insured, showing the policy
amount as the Purchase Price, showing the status of Seller's title to
the Property, and containing legible copies of all documents referred
to in the Title Report. Within the same time, Buyer shall obtain
reports of searches made of the Uniform Commercial Code Records of the
county in which the Real Property is located and those maintained in
the Office of the Secretary of State of North Carolina (the "U.C.C.
Searches").
On the Closing Date (as defined in paragraph 4.A. below),
Seller will cause to be issued to Buyer a policy of owner's title
insurance in an amount equal to the Purchase Price, insuring fee simple
title to the Property in Buyer, subject only to those title exceptions
contained in the Title Report (as corrected pursuant to the mutual
agreements of Seller and Buyer) and U.C.C. Searches.
B. Within twenty (20) days following the Effective Date, Buyer
will endeavor to obtain a survey of the Real Property, prepared and
certified by a licensed surveyor, which survey shall be certified
subsequent to the Effective Date and shall be in conformity with ALTA
As-Built Survey of Property requirements in accordance with ALTA/ACSM
Land Title Surveys.
C. Within ten (10) days following the Effective Date, Seller
shall provide Buyer copies of all plans, specifications, structural
reports, floor and roof reports, reports of any inspections of the
mechanical and electrical systems of the buildings located on the Real
Property, environmental reports and audits in the possession or under
the control of Seller concerning the Property, along with all
communications to and from environmental agencies or authorities.
D. Within ten (10) days following the Effective Date, Seller
shall provide Buyer an accurate copy of any management, service and
supply contracts to which Seller is a party concerning the Property.
E. Within twenty (20) days following the Effective Date,
Seller shall provide Buyer with a complete and accurate copy of the
only lease ("Lease") encumbering the Property, and an estoppel
certificate, in form and substance satisfactory to Buyer, from each
tenant thereunder which: (1) ratifies such lease; (2) expresses the
commencement and termination dates thereof; (3) certifies that the
lease is in full force and effect and has not been assigned, modified,
supplemented or amended (except by such written documents as shall be
stated); (4) states that all conditions under the lease to be performed
by the landlord have been satisfied; (5) states that there are no
defenses or offsets against the enforcement of the lease by the
landlord, or stating those claimed by the tenant; (6) states the amount
of advance rent, if any (or none if such is the case), paid by tenant;
(7) states the date to which rent has been paid; and (8) states the
amount of security deposited with the landlord, if any.
4. Closing. Buyer and Seller agree that the purchase of the Property
will be consummated as follows:
A. Closing Date. Subject to the satisfaction of any
contingencies contained herein and to prior termination hereof as
otherwise permitted hereunder, this transaction shall close (the
"Closing") on the fifteenth day following the expiration of Buyer's
Feasibility Period (the "Closing Date"); provided, however, that in the
event such fifteenth day is a weekend day or holiday, the Closing Date
shall be the next succeeding business day. The Closing will take place
at an office of the Title Company, with the exact time for Closing to
be designated by Buyer and approved by Seller.
B. Seller's Deliveries. At the Closing, Seller shall cause to
be delivered to Buyer the following items (all documents will be duly
executed and acknowledged where required):
(1) A General Warranty Deed conveying to Buyer
the Property;
(2) Affidavits in form acceptable to the Title
Company concerning Seller's payment in full of all costs for
labor and materials delivered to, or in connection with, the
Property and related matters;
(3) An updated certificate of the representations of
Seller indicating whether the same remain true and correct in
all material respects to the time of Closing, or, if such
representations are no longer accurate, a statement indicating
the changes thereto;
(4) An assignment of the Lease related to the
Property;
(5) An assignment of all service and supply contracts
disclosed to Buyer hereunder;
(6) An assignment of all warranties and guarantees
required to be disclosed to Buyer hereunder;
(7) Originals or true copies of building permits and
certificates of occupancy for the buildings;
(8) An affidavit of non-foreign status in compliance
with Section 1445 of the Internal Revenue Code; and
(9) A Closing statement.
C. Buyer's Deliveries. Buyer shall pay the Purchase Price by
wire transfer of funds, subject to any adjustments provided herein, and
less the ▇▇▇▇▇▇▇ Money Deposit, which shall become the property of
Seller. Buyer shall execute such documents as are reasonably acceptable
to Seller in order that Buyer assume for the period from and after the
Closing the Seller's obligations under the Lease and the service and
supply contracts hereunder transferred.
D. Costs. Seller shall pay the entire premium associated with
the standard owner's title insurance policy; the cost for the survey;
and one-half of the Closing fee and cost reimbursement charged by the
Title Company. Buyer shall pay the costs of recording the deed
conveying title to the Property to Buyer and one-half of the Closing
fee and cost reimbursement charged by the Title Company.
5. Possession; Prorations. Possession of the Property will be
delivered to Buyer on the Closing Date, subject to the Lease. All utilities;
payments under service and supply contracts to be
assigned hereunder; rent and other payments under the Lease; real property
taxes; and installments of special assessments, if any, pertaining to the Real
Property for the calendar year in which the Closing occurs, shall be prorated to
the Closing Date; provided, if the taxes or assessments for such calendar year
are not known as of the Closing Date, the proration shall be computed using the
best evidence and information available and, when actual figures are available,
a cash settlement shall be made between Seller and Buyer. Seller shall be
responsible for all operating expenses applicable to the Property prior to
Closing and Buyer shall be responsible for the same applicable following the
Closing.
6. Representations, Warranties and Covenants of Seller. Seller hereby
represents, warrants, and covenants to Buyer as follows, which representations
and warranties shall be true and correct as of the Closing Date and shall
survive the Closing:
A. The management, service and supply contracts delivered to
Buyer by Seller pursuant to paragraph 3.D. above are true, correct and
complete, and, to the best of Seller's knowledge, there are no
defaults, or events which with the passage of time will mature into
defaults, thereunder.
B. The Lease delivered to Buyer by Seller pursuant to
paragraph 3.E. above is true, correct and complete, and, to the best of
Seller's knowledge, there are no defaults, or events which with the
passage of time will mature into defaults, thereunder.
C. Seller has full right, power, and authority to enter into
this Agreement and to perform its obligations hereunder.
D. There are no pending claims, arbitrations, regulatory,
legal or other proceedings or, to the best of Seller's knowledge,
threatened, against Seller, or any basis therefor, that arises out of
the use or ownership of the Property or that might detrimentally affect
the use or operation of the Property for its intended purpose, the
value of the Property, or adversely affect the ability of Seller to
perform its obligations under this Agreement, and Seller is not aware
of any contemplated condemnation, eminent domain or similar proceedings
relating to the Property.
E. To the best of Seller's knowledge, except as disclosed
within the Phase I environmental report previously provided to Buyer by
Seller concerning the Property: (i) none of the Property, including
subsurface soil and groundwater, contains any substance, including, but
not limited to, any radioactive substance, hydrocarbons, industrial
solvents, oil, petroleum, oil byproducts, petroleum byproducts, metals,
flammables, or other hazardous substances or toxic materials, which
could presently, or at any time in the future, cause a health, safety
or environmental hazard on the Property or to any person who may enter
or use the Property or which may require remediation at the request of
any governmental authority (collectively, "Hazardous Materials"); (ii)
the ownership, operation, use or condition of all of the Property is
not in violation of any federal, state or local law, ordinance or
regulation relating to the Hazardous Materials, industrial hygiene,
hazardous or toxic materials (or similarly defined substances,
materials or wastes or environmental protection); (iii) no person
has generated, manufactured, stored, treated or disposed of Hazardous
Materials on, into or under the Property or transported any Hazardous
Materials to, from or across the Property; and (iv) none of the
Property contains any underground treatment or storage tanks.
F. Seller has not received any notice of any violation of any
laws, ordinances, rules or administrative or judicial orders affecting
or regarding the Property.
G. So long as this Agreement is in effect, Seller shall not
modify the terms of the Lease, management, service or supply contracts
referenced herein and shall not enter into any new lease, management,
service or supply contracts which extend beyond the Closing Date,
without Buyer's prior written consent.
H. As of the Effective Date, all of the mechanical systems and
electrical systems, including, without limitation, all HVAC equipment
and systems, fire sprinkler systems, boilers, heaters, and doors of any
building comprising a portion of the Property (collectively "Systems")
are in good working condition and repair, except to the extent
referenced on Exhibit "B" hereto, which Exhibit shall be attached by
Seller prior to the Effective Date. Additionally, from the Effective
Date to the Closing Date, Seller shall maintain, repair and replace the
improvements comprising the Property, and Systems therein, so that as
of the Closing, such improvements and equipment are in the same
condition as of the date hereof, reasonable wear and tear excepted.
7. Feasibility Period, Termination Rights, and Additional ▇▇▇▇▇▇▇
Money.
A. Buyer shall have a period of thirty (30) days following the
Effective Date (the "Feasibility Period") to enter onto the Property
and to inspect and investigate the Property, at its sole cost and
expense; to make such studies thereof as it deems appropriate to
consider and evaluate the suitability of the Property for Buyer's
purposes. Buyer agrees to indemnify and hold Seller harmless and free
from all claims, proceedings, actions, liens, costs, expenses,
liabilities, and damages incurred on or arising in connection with any
work done or performed by Buyer or its contractors, representatives, or
agents on the Property. Notwithstanding the foregoing, in the event
Buyer has not received the Title Report, UCC searches and survey, in
accordance with subparagraph 3.A. and B. above, on or before the 20th
day following the Effective Date hereof, the Feasibility Period shall
be extended for the number of days which elapse following such 20th day
until Buyer has received all the documents required by subparagraphs
3.A. and B. For example, if Buyer does not actually receive the survey
referenced in subparagraph 3.B. until the 25th day following the
Effective Date, the Feasibility Period shall extend 35 days rather than
30.
B. Buyer shall have the right to terminate this Agreement
without any excuse or reason at any time prior to the expiration of the
Feasibility Period upon written notice to the Seller. In the event of
such termination, the ▇▇▇▇▇▇▇ Money Deposit, with accrued interest
thereon, less $100.00, shall be returned to Buyer and neither party
shall have any further obligation hereunder. The remaining $100.00 of
the ▇▇▇▇▇▇▇ Money Deposit shall be paid
to Seller. Seller acknowledges that the $100.00 shall constitute good,
valid and sufficient consideration for this Agreement.
C. In the event Buyer does not exercise its right of
termination under subparagraph B above, Buyer shall increase the
▇▇▇▇▇▇▇ Money Deposit from $50,000 to $100,000 on the first day
following the expiration of the Feasibility Period.
8. Default; Remedy. In the event that either party fails to perform
such party's obligations hereunder (except as excused by the other's default),
the party claiming default will make written demand for performance upon the
defaulting party. If the defaulting party fails to comply with such written
demand within five (5) days after receipt of such notice to perform, the
non-defaulting party shall have the option to (a) waive such default; (b)
terminate this Agreement and, in the event the terminating party is (i) the
Buyer, the ▇▇▇▇▇▇▇ Money Deposit, together with accrued interest thereon, shall
be returned to Buyer, and Buyer shall have the right to seek specific
performance of Seller's obligations hereunder, or (ii) the Seller, the ▇▇▇▇▇▇▇
Money Deposit shall be delivered to Seller by the Title Company, together with
accrued interest thereon as Seller's sole remedy. The rights and remedies
specified in this paragraph shall be the exclusive rights and remedies available
to the parties hereunder.
9. Damage or Destruction. In the event any buildings and/or related
improvements that are a part of the Property are damaged or destroyed prior to
the Closing, Seller shall give Buyer prompt notice thereof. Unless Seller shall
repair and restore the same in a good and workmanlike manner prior to the
Closing Date; agrees in writing to complete the same within thirty (30) days
following the Closing Date; or unless the insurance in effect with respect to
the Property will cover the entire cost of restoration (less any deductible
which Seller shall pay) to the satisfaction of Buyer and Seller assigns its
rights to the insurance proceeds to Buyer as part of the Closing, then, except
as otherwise agreed by the parties, this Agreement shall terminate automatically
and Buyer's ▇▇▇▇▇▇▇ Money Deposit, together with accrued interest thereon, shall
be returned to Buyer.
10. Condition of Real Property. Except as specifically provided herein
and in Sellers representations and warranties contained above, Seller makes no
representation or warranty of any kind, express or implied, with respect to the
Property, the same, except as specifically provided herein, being sold "AS IS,
WHERE IS, WITH ALL FAULTS."
11. Miscellaneous. It is further agreed as follows:
A. Time. Time is of the essence of this Agreement.
B. Fees and Expenses. Each party shall be responsible for and
shall pay their own attorneys fees incurred in connection with this
transaction. Additionally, Buyer and Seller each represent and warrant
to each other that they have not engaged the services of any broker in
connection with this Agreement or the transaction contemplated hereby
and that no person or entity can properly claim a right to a real
estate commission, real estate finder's fee, real estate acquisition
fee, or other real estate brokerage type compensation (collectively
"Real Estate Compensation") based upon the acts of that party with
respect to the transaction
contemplated by this Agreement, except for the ▇▇▇▇ Corporation, whose
fees shall be paid by Seller. Each party hereto agrees to indemnify and
defend the other against and to hold the other harmless from any and
all costs, loss, liability or expense (including, but not limited to,
attorneys fees and return commissions) resulting from any claim for
Real Estate Compensation by any person or entity based upon such
party's acts. The indemnity contained in this provision shall survive
the Closing of the transaction contemplated by this Agreement.
C. Notices. Any notice pursuant hereto shall be given in
writing by (a) personal delivery, or (b) expedited delivery service
with proof of delivery, or (c) United States Mail, postage prepaid,
registered or certified mail, return receipt requested, or (d)
telefacsimile transmission (provided that such telefacsimile
transmission is confirmed by expedited delivery service or by mail in
the manner previously described), sent to the intended addressee at the
address set forth above, and shall be deemed to have been given either
at the time of personal delivery or, in the case of expedited delivery
service or mail, as of the date of first attempted delivery at the
address or, in the case of telefacsimile transmission, upon receipt.
Any such notices may be under the signature of the Seller's or Buyer's
(as the case may be) agent, attorney, or representative.
D. Entire Agreement; Amendment; Survival. This Agreement
constitutes the entire understanding between Buyer and Seller, and
there are no agreements, understandings, warranties or representations
between Buyer and Seller except as set forth herein. This Agreement
cannot be amended except in writing executed by Buyer and Seller. The
representations, warranties and covenants contained herein shall
survive the Closing.
E. Binding Effect. This Agreement will inure to the benefit of
and bind the respective successors and assigns of the parties hereto.
F. Execution. This Agreement has been executed by the parties
on the dates set forth below their respective signatures.
G. Governing Law. This Agreement is to be governed by the laws
of the state in which the Property is located.
H. Assignment. Buyer may assign its rights and obligations
hereunder to an entity owned entirely or controlled by Buyer; however
such assignment shall not release Buyer hereunder.
I. Acceptance. Seller must accept this Agreement on or before
5 o'clock p.m. C.D.S.T. on October 23, 1998, by delivering a fully
executed copy of this Agreement to the Title Company no later than said
date. Should Seller fail to timely accept this Agreement, then Buyer's
offer herein contained shall be null and void.
IN WITNESS WHEREOF, this instrument has been executed by the parties to
be effective as of the Effective Date.
"BUYER": "SELLER":
▇▇▇▇▇ ENTERPRISES, INC. GOLDEN BOOKS PUBLISHING COMPANY, INC.
By: /s/ By: /s/
----------------------------- ---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President Name:
Title:
Date: October 12, 1998 Date: October __, 1998