EXECUTION COPY
ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT
This Assignment and Assumption of Purchase Agreement is made
and
entered into as of the
11th day of September, 2006, by AEI FUND
MANAGEMENT, INC., a Minnesota corporation ("AEI"), to AEI INCOME
& GROWTH FUND 24
LLC, a Delaware limited liability company ("AEI
24"); AEI FUND MANAGEMENT XVII, INC., a Minnesota
corporation
("AEI XVII"); AEI INCOME & GROWTH FUND 26 LLC, a Delaware
limited
liability company
("AEI 26"); AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP, a Minnesota limited partnership ("AEI
XXI");
AEI INCOME
& GROWTH FUND XXII
LIMITED PARTNERSHIP, a
Minnesota
limited partnership ("AEI XXII"); AEI ACCREDITED INVESTOR FUND V
LP, a Minnesota limited partnership
("AEI V"); AEI
ACCREDITED
INVESTOR FUND
2002 LIMITED PARTNERSHIP, a Minnesota limited
partnership ("AEI 2002").
RECITALS
A.
AEI
is named as the "Purchaser" in that certain
Purchase and Sale Agreement executed by and between APPLE
INDIANA
II LLC, APPLE PENNSYLVANIA LLC, APPLE
WASHINGTON LLC,
each a
Delaware limited
liability company, and B.T. WOODLIPP, INC., a
Pennsylvania corporation (collectively, "Seller") and dated
July
10, 2006 (the "Purchase Agreement"), and
has entered into
the
Purchase Agreement for
the sole purpose of purchasing the real
property located at the following addresses:
1) 8310 East
96th Street, Fishers, Indiana ("Premises
A")
2) 109
South Memorial Drive, New Castle, Indiana
("Premises B")
3) 2659
East
Main
Street, Plainfield, Indiana
("Premises C")
4) 1516
South Washington Street, Crawfordsville,
Indiana ("Premises D")
5) 7345
East Washington Street, Indianapolis, Indiana
("Premises E")
6)
425 Galleria Drive, Johnstown, Pennsylvania
("Premises F")
7) 850
Chippewa Town Center Drive, Beaver Falls,
Pennsylvania ("Premises G")
8) 130 River
Road, Sequim, Washington ("Premises H")
9) 1441
D Street Northeast, Auburn, Washington
("Premises I")
B.
AEI
desires to assign its right, title and interest in
the Purchase
Agreement to AEI 24
with respect to the
sale and
purchase of Premises A; to AEI XVII with respect to the sale
and
purchase of Premises B; to AEI XVII with respect to the sale
and
purchase of Premises C; to AEI XVII with respect to the sale
and
purchase of Premises
D; to AEI 26 and AEI XVII with respect to
the sale and purchase of Premises E; to AEI XXI and AEI XXII
with
respect to
the sale and purchase
of Premises F; to AEI
V with
respect to the sale and purchase of Premises G; to AEI 2002
with
respect to the sale and purchase of Premises H; and to AEI V
with
respect to the sale and purchase of Premises I.
NOW,
THEREFORE, in
consideration of the above recitals, and
good and valuable consideration received,
AEI, sells,
assigns,
transfers, sets over and delivers unto AEI 24; AEI XVII; AEI
26;
AEI XXI; AEI XXII; AEI V; and AEI 2002 all
of its right,
title
and interest in and to
the Purchase Agreement and AEI 24; AEI
XVII; AEI 26; AEI XXI; AEI XXII; AEI V; and AEI 2002 assumes all
of AEI's right, title and interest in and to the Purchase
Agreement.
IN
WITNESS
WHEREOF, the undersigned has caused this
Assignment and Assumption of Purchase Agreement to be executed
as
of the date and year first above written.
(Signature Pages to Follow)
AEI FUND MANAGEMENT, INC.,
a Minnesota corporation
By:/s/ Robert P Johnson
Name: Robert P
Johnson
Its: President
AEI INCOME & GROWTH FUND 24 LLC,
a Delaware limited liability
company
By: AEI Fund
Management XXI, Inc.,
a Minnesota corporation,
its Managing Member
By: /s/ Robert P Johnson
Name: Robert P. Johnson
Its:
President
AEI FUND MANAGEMENT XVII, INC.,
a Minnesota corporation
By: /s/ Robert P Johnson
Name: Robert P.
Johnson
Its:
President
AEI INCOME & GROWTH FUND 26 LLC,
a Delaware limited liability
company
By: AEI Fund
Management XXI, Inc.,
a Minnesota corporation,
its Managing Member
By: /s/ Robert P Johnson
Name: Robert P.
Johnson
Its:
President
AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI Fund
Management XXI, Inc.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P Johnson
Name: Robert P.
Johnson
Its:
President
AEI INCOME & GROWTH FUND XXII
LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI Fund
Management XXI, Inc.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P Johnson
Name: Robert P.
Johnson
Its:
President
AEI ACCREDITED INVESTOR FUND V LP,
a Minnesota limited partnership
By: AEI Fund
Management XVIII, Inc.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P Johnson
Name: Robert P.
Johnson
Its:
President
AEI ACCREDITED INVESTOR FUND 2002
LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI Fund
Management XVIII, Inc.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P Johnson
Name: Robert P.
Johnson
Its:
President
APPLE INDIANA II LLC, APPLE PENNSYLVANIA LLC,
APPLE WASHINGTON LLC, and B.T. WOODLIPP, INC.,
as Seller
and
AEI FUND MANAGEMENT, INC.,
as Purchaser
PURCHASE AND SALE AGREEMENT
Dated: As of July 10,
2006
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
1
ARTICLE II PURCHASE AND SALE; LEASEBACK
4
ARTICLE III [INTENTIONALLY OMITTED]
7
ARTICLE IV DUE DILIGENCE
7
ARTICLE V CLOSING
11
ARTICLE VI CLOSING ADJUSTMENTS
15
ARTICLE VII COVENANTS OF SELLER
15
ARTICLE VIII REPRESENTATIONS AND WARRANTIES
16
ARTICLE IX NOTICES
21
ARTICLE X CONFIDENTIALITY
22
ARTICLE XI DAMAGE AND DESTRUCTION
22
ARTICLE XII CONDEMNATION
24
ARTICLE XIII DEFAULT BY PURCHASER OR SELLER
25
ARTICLE XIV MISCELLANEOUS PROVISIONS
26
EXHIBITS AND SCHEDULES
EXHIBIT A LEGAL
DESCRIPTIONS
EXHIBIT B ESCROW
AGREEMENT
EXHIBIT C FORM
OF LEASE
EXHIBIT D
FOREIGN INVESTORS REAL PROPERTY
TAX ACT CERTIFICATION AND AFFIDAVIT
EXHIBIT E WIRE
TRANSFER INSTRUCTIONS
EXHIBIT F DUE
DILIGENCE DOCUMENTS
SCHEDULE 4.3
PORTFOLIO VALUE
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is entered into as of
the 10th day of July,
2006, by and among APPLE INDIANA II LLC,
APPLE PENNSYLVANIA
LLC, APPLE WASHINGTON LLC, each, a Delaware
limited
liability
company, and
B.T. WOODLIPP, INC., a
Pennsylvania
corporation (collectively, the "SELLER"), and AEI
FUND MANAGEMENT, INC., a Minnesota corporation (the
"PURCHASER").
W I T N E S S E T H
WHEREAS, Seller
is the owner of
fourteen (14)
sites
described in
EXHIBIT A attached hereto (collectively, the
"LAND"),
together with
all buildings, fixtures and other
improvements erected
thereon (collectively, the "BUILDINGS" and
each a "BUILDING") in the states of
Indiana, Pennsylvania
and
Washington on which Seller operates a franchised restaurant
(each
such site together
with the Building thereon and the other items
set forth in SECTION 2.3 with respect thereto is called a
"PROPERTY" and all are collectively called the "PROPERTIES");
and
WHEREAS, Seller has agreed to sell to Purchaser all of
Seller's right, title
and interest in the Land, the Buildings,
and all other items included within the term
"Properties"
in
Section 2.3; and
WHEREAS,
Purchaser has
agreed to purchase the
Properties from Seller; and
WHEREAS, Purchaser has
agreed to lease to Seller, and
Seller has agreed to lease from Purchaser, the Properties; and
WHEREAS, the
parties desire to set forth their
respective
rights and
obligations
with respect to the
transactions contemplated herein.
NOW THEREFORE, in consideration of the mutual covenants
and agreements
hereinafter
set forth and other valuable
consideration, the
receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1.
DEFINITIONS. For
purposes of this Agreement, the
following terms shall have the meanings indicated below:
"ADJOURNED CLOSING DATE" has the meaning given to such
term in Section 4.1.
"AGREEMENT" means
this Purchase and
Sale Agreement,
including all Exhibits and Schedules hereto.
"BUILDINGS" has the meaning given to such term in the
first "WHEREAS" clause of this Agreement.
"BUSINESS DAY" has the
meaning given to such
term in
Section 2.2. If any
event under this Agreement is to occur, or a
time period is to
expire, on a date which is not a business day,
such event shall occur
or time period shall expire on the next
succeeding business day.
"CASUALTY PROPERTY" has the meaning given to such term
in Section 11.1(b).
"CLOSING" means
the consummation of
the transactions
described in
Article II in
accordance with the
terms of this
Agreement.
"CLOSING DATE" means either the Scheduled Closing Date
or the Adjourned Closing Date.
"CODE" means
the Internal Revenue
Code of 1986, as
amended.
"COMMITMENTS" has the
meaning given to such
term in
Section 4.1(a).
"DEEDS" has the
meaning given to such term in Section
5.2(a).
"DEFECT" has the meaning given to such term in Section
8.3(c).
"DEPOSIT" has the meaning given to such term in Section
2.2(a).
"DILIGENCE CURE PERIOD" has the meaning given to such
term in Section 4.6.
"DILIGENCE OBJECTION"
has the meaning given
to such
term in Section 4.6.
"DUE DILIGENCE
DEFAULT" has the meaning given to such
term in Section 4.7.
"DUE DILIGENCE PERIOD"
means the period commencing on
the date hereof, and ending at 11:59 p.m.,
Central time, on
, 2006, which date is forty-five (45) days after the
Effective Date.
"EFFECTIVE DATE" shall
mean for all purposes
in this
Agreement the
date on which this
Agreement is executed
by the
last of Purchaser and Seller.
"ENVIRONMENTAL LAWS" means all federal, state or local
laws, statutes,
ordinances, rules or regulations or judicial or
administrative decisions, orders, or decrees relating to
health,
safety, pollution or
protection of the environment or workplace,
including, without limitation, relating to Hazardous
Substances.
"ENVIRONMENTAL REPORTS" has the meaning given to such
term in Section 4.6.
"ESCROW AGENT" has the
meaning given to such
term in
Section 2.2(a).
"EXCLUDED PROPERTY" has the meaning given to such term
in Section 2.3.
"FIRPTA AFFIDAVIT" has
the meaning given to such term
in Section 5.2(c).
"FRANCHISOR" has the
meaning given to
such term in
Section 2.3.
"HAZARDOUS
SUBSTANCES"
means any
pollutants,
contaminants, wastes,
toxic or hazardous or extremely hazardous
substances, or
other materials
(including, without
limitation,
petroleum or any by-products or fractions thereof, lead,
asbestos
and asbestos-containing materials, and polychlorinated
biphenyls)
that are regulated by,
or may form the basis of liability under,
any Environmental Laws.
"LAND" has the meaning given to such term in the first
"WHEREAS" clause of this Agreement.
"LEASE" has the
meaning given to such term in Section
2.4.
"LEASE GUARANTY" has the meaning given to such term in
Section 2.4.
"NOTICES" has the meaning given to such term in Section
9.1.
"PERMITTED ENCUMBRANCES" has the meaning given to such
term in Section 3.1.
"PROPERTIES" has the
meaning given to
such term in
Section 2.3.
"PROPERTY" has the
meaning given to such term in the
first "WHEREAS" clause of this Agreement.
"PURCHASE PRICE" has the meaning given to such term in
Section 2.2.
"PURCHASER" has the meaning given to such term in the
preamble to this
Agreement, and any permitted assignees of the
Purchaser pursuant to Section 14.5 hereof.
"REPRESENTATIVES" means, with respect to any person or
entity, such
person's or entity's agents or representatives,
including, without limitation, its directors, officers,
members,
employees, affiliates,
partners, agents, contractors, engineers,
attorneys,
accountants,
consultants, brokers
or financial
advisors.
"SCHEDULED CLOSING DATE" has the meaning given to such
term in Section 5.1.
"SELLER" has
the meaning given to
such term in the
preamble to this Agreement. Although the term "Seller"
is used
collectively to
refer to all of the entities that own the
Properties, the
covenants,
representations,
warranties
and
obligations of Seller under this Agreement are not intended to
be
joint and several, but rather each of such
entities shall be
responsible for the
covenants, representations, warranties and
obligations relating
only to those of the
Properties owned
by
such entity.
The Properties are
owned by each respective Seller
entity as specified on Schedule 4.3 hereto.
"SELLER KNOWLEDGE INDIVIDUAL" has the meaning given to
such term in Section 8.1.
"SELLER'S BANK SYNDICATE" means Bank of America, N.A.,
as administrative
agent, Bank of America, N.A., SunTrust Bank,
Merrill Lynch
Capital, a Division of Merrill Lynch Business
Financial
Services Inc.,
GE Capital Franchise Finance
Corporation, National
City Bank of
Pennsylvania,
Wells Fargo
Bank, N.A., and ING
Capital LLC, and their respective successors
and/or assigns.
"SELLER'S DILIGENCE
NOTICE" has the meaning given to
such term in Section 4.6.
"SELLER'S TITLE NOTICE" has the meaning given to such
term in Section 4.3.
"SURVEYS" has the meaning given to such term in Section
4.1(a).
"SURVIVING
REPRESENTATIONS" has the meaning given to
such term in Section 8.3(a).
"SURVIVAL PERIOD" has the meaning given to such term in
Section 8.5.
"TAKING" has the meaning given to such term in Section
12.1.
"TAKING PROPERTY" has the meaning given to such term in
Section 12.1(b).
"TITLE COMPANY" means Chicago Title Insurance Company.
"TITLE CURE PERIOD" has the meaning given to such term
in Section 4.1(a).
"TITLE OBJECTIONS" has
the meaning given to such term
in Section 4.1(a).
"TITLE POLICY" has the
meaning given to such
term in
Section 4.5.
"TRANSFER TAXES" has the meaning given to such term in
Section 5.5(a).
ARTICLE II
PURCHASE AND SALE; LEASEBACK
Section 2.1.
PURCHASE AND SALE.
Subject to the terms and
provisions set forth in this Agreement, on the Closing Date:
(a)
Seller shall
transfer the Properties to Purchaser, and (b)
Purchaser shall pay
the Purchase Price to Seller as provided in
Section 2.2.
Section 2.2.
PAYMENT OF THE PURCHASE PRICE. The purchase price
(the "PURCHASE PRICE") for the Properties is Forty Million One
Hundred Nine Thousand One Hundred Thirteen Dollars
($40,109,113),
subject to reduction as hereinafter provided in this Agreement,
and shall be payable by Purchaser as follows:
(a) A deposit (the
"DEPOSIT") in the amount of Two Hundred
Thousand Dollars
($200,000), payable
simultaneously
with the
execution of
this Agreement by wire transfer,
in immediately
available Federal
Funds, to the escrow account of Chicago Title
Insurance Company
located at 171 N.
Clark, Chicago, Illinois
60601, as escrow agent (the "Escrow Agent")
in accordance with
the wiring
instructions
attached hereto
as Exhibit E. The
Deposit shall
be held by Escrow Agent in accordance
with the
terms of that certain Escrow Agreement of even
date herewith
between Seller, Purchaser and Escrow Agent in the form of
Exhibit
B attached hereto. The
Deposit shall be delivered as provided in
this Agreement.
(b) Within five (5)
days after the later of: (y) the expiration
of the Due Diligence Period, unless Purchaser has timely
delivered a notice of termination of this Agreement under
Section
4.7(b), or (z) the date upon which Seller has waived in writing
the condition set forth in Section 5.9(a)(iv), Purchaser shall
increase the amount of the Deposit by depositing with Escrow
Agent an additional One Hundred Thousand Dollars ($100,000) in
immediately available Federal Funds, which amount shall be
added
to and become a part of the Deposit hereunder.
(c) The balance of the
Purchase Price, in the amount of Thirty-
nine Million Eight Hundred Nine Thousand One Hundred Thirteen
Dollars ($39,809,113), subject to reduction as provided in this
Agreement, payable on the Closing Date by wire transfer, in
immediately available Federal Funds, to the account of Escrow
Agent.
(d) If the Closing
shall occur, Escrow Agent shall be instructed
to deliver the proceeds of the Deposit, including the interest
on
the Deposit, to Seller to be credited against the Purchase
Price.
If the Closing shall not occur and this Agreement shall be
terminated, then the interest earned on the Deposit shall be
paid
to the party entitled to receive the Deposit as provided in
this
Agreement. The party
receiving such interest shall take such
interest into account for purposes of determining its federal
income tax liability, if any, and shall pay any income taxes
thereon.
As used in this Agreement, the term
"BUSINESS DAY" means
every
day other than Saturdays, Sundays, all days
observed by the
federal or Illinois
State government as legal holidays and all
days on which commercial banks in Illinois are required by law
to
be closed.
Section 2.3. SCOPE OF SALE. As used in this Agreement, the
term "PROPERTIES" shall mean all of the following:
(a) the Land;
(b) all of the
Buildings;
(c) all easements,
covenants, servitudes and other rights now
belonging or appertaining or appurtenant to, or comprising a
part
of, the Land, and all right, title and interest of the Seller
in
and to strips or gores adjacent to the Land and any land lying
in
the bed of any street, road, avenue or alley, open or closed,
in
front of or behind or otherwise adjoining the Land and to the
center line thereof;
(d) all fixtures,
equipment and machinery (including, without
limitation, all of the lighting, electrical, mechanical,
plumbing
and heating, ventilation and air conditioning systems),
exclusive
of the Excluded Property, used in connection with the Land and
the Buildings and the operation, management, maintenance or
occupation of the Properties (as opposed to the operation of
Seller's business);
(e) if available,
certificates of occupancy and all licenses
(excluding liquor licenses), permits, approvals and
authorizations, if any, which are customarily required to be
transferred to evidence Seller's ownership of the Properties
(as
opposed to the operation of Seller's business); and
(f) all right, title
and interest of Seller in and to all
warranties, indemnity agreements and bonds with respect to any
portion of the Land, the Buildings or any other portions of the
Properties.
(g) all of Seller's
rights under any contract or agreement in
Seller's possession (other than those relating to Excluded
Property), including without limitation, maintenance contracts,
service contracts, property management contracts, equipment
leases, or warranties relating to the operation of the
Properties;
(h) all of Seller's
right, title and interest in and to any
drawings, plans, building permits, surveys and certificates of
occupancy relating to the Properties, and all licenses and
permits relating to the ownership thereof; and
(i) all records in
Seller's possession relating to Seller's
ownership of the Properties, including without limitation all
records regarding real estate taxes, assessments, insurance,
maintenance, repairs, capital improvements and services.
As used in
this Agreement, the term "EXCLUDED PROPERTY"
shall mean
(i) all fixtures,
furniture, furnishings, equipment
(other than floor and
wall coverings, fixtures which are built-
ins or constitute an integral part of the
Building, the walk-in
cooler, heat, air
condition and ventilation systems, electrical,
mechanical and
plumbing
systems), Kitchen Equipment (as
hereinafter defined),
inventory, merchandise, goods, chattels,
trade fixtures,
signage, appliances display cases, supplies,
tools, machinery,
security systems, computer software or other
personal property
(including, without limitation, trade fixtures
in, on, around or affixed to any Property),
(ii) fixtures,
furniture,
furnishings, equipment, supplies, tools, machinery,
security systems,
computer software, signage and other personal
property (including, without limitation, trade fixtures
in, on,
around or affixed to any Property) which displays the name,
trade
name, trademark, service mark, logo, insignia, slogan, emblem
or
symbol of Applebee's
International Inc.'s ("FRANCHISOR") or of
the tenant
under the Lease, and (iii) all
licenses, permits,
approvals and
authorizations, if
any, which
are required in
connection with
the operation of
Seller's business,
including,
without limitation,
all liquor licenses.
The Excluded
Property
described in SUBSECTIONS (i) and (ii) above shall be and
at all
times remain
the property of Seller
regardless of whether
the
same is affixed to the
Buildings or the manner in which the same
is affixed (unless permanently affixed) and regardless of
whether
the same is regarded as a fixture or as property of the owner
of
the Building
by operation of law or
otherwise unless,
however,
such fixtures and equipment cannot be removed without
substantial
damage to any Building which cannot be easily repaired.
As used
herein the
term "Kitchen Equipment" shall include, without
limitation, kitchen
fixtures (except for sanitary plumbing
fixtures), counters,
stainless steel equipment, ranges, ovens,
display cases and
refrigeration equipment (excluding the walk-in
cooler).
Section 2.4.
LEASEBACK. On the
Closing Date, immediately
following conveyance
of title to the Properties to Seller,
Purchaser shall
lease to Seller and Seller shall lease from
Purchaser, the Properties, pursuant to a separate lease for
each
Property, in the form attached hereto as Exhibit C, as the same
may be modified if and to the extent necessary
to make them
enforceable under the laws of the state in which each applicable
Property is located or to include statutorily required
provisions
(each, a "Lease", and collectively, the "Leases"), each of
which
shall be guaranteed by Apple American Group
LLC, a Delaware
limited liability
company ("AAG"), pursuant to the terms and
conditions of the
lease guaranty, the form of which is attached
to the Lease (the
"Lease Guaranty").
Seller and Purchaser shall
negotiate in good faith during the Due Diligence Period to
agree
upon a mutually acceptable form of Landlord's
Agreement which
will be attached as Exhibit B to the Lease.
ARTICLE III
[INTENTIONALLY OMITTED]
ARTICLE IV
DUE DILIGENCE
Section 4.1.
SURVEY AND TITLE OBJECTIONS. (a) On or before the
date of this Agreement, Purchaser has received (i) from the
Title
Company commitments to
issue an owner's title
insurance policy
with respect
to each of the Properties together
with legible
copies of
all recorded exceptions set forth therein
(collectively, the "COMMITMENTS"), and (ii) from Seller copies
of
the existing
surveys in Seller's
possession for the
Properties
(which Seller shall, prior to the Closing Date, have certified
to
Purchaser and
its lender at Seller's cost) (the "SURVEYS").
Seller shall
deliver a signed
Affidavit required by
the Title
Company in order to provide sufficient endorsements to enable
the
Title Company
to issue the title
policies in the form
required
hereunder within ten
(10) days after the Effective Date. If a
Commitment discloses
the existence of an
easement affecting
a
Property which was recorded after the date of an existing
Survey
and is not located on
such Survey, Seller shall have such Survey
updated at
its cost to reflect the location of
such easement.
Within the
first twenty-five (25) days of
the Due Diligence
Period, Purchaser
shall deliver to Seller notice of any liens,
covenants, conditions,
restrictions,
encumbrances
and noted
violations revealed by
the Commitments or the Surveys to which
Purchaser objects and
is not required hereunder to accept (the
"TITLE OBJECTIONS").
Any items to which Purchaser does not
timely object
shall be deemed to be permitted encumbrances
("PERMITTED
ENCUMBRANCES").
Notwithstanding the
foregoing,
Purchaser shall not be obligated to object to any mortgage,
deed
of trust,
mechanics lien, or similar lien to pay money
(collectively,
"MONETARY LIENS"), and
any such item will be
deemed to
be objected to and shall not be a Permitted
Encumbrance. All
Monetary Liens shall be satisfied or released
at Closing.
For purposes hereof
the term "MONETARY LIEN" shall
not mean or include assessments under any
local improvement
or
special benefit
district. Purchaser
shall not be
entitled to
object to, and shall
be deemed to have approved, any item which
will be extinguished upon the transfer of the Properties.
Notwithstanding
anything to the contrary contained herein, if
Seller is unable to eliminate any Title
Objections (other
than
Monetary Liens) by the
Scheduled Closing Date, Seller may, upon
prior notice
to Purchaser, adjourn
the Scheduled Closing
Date
(such adjourned
Closing Date is herein referred to as the
"ADJOURNED CLOSING DATE"), for a period (the "TITLE CURE
PERIOD")
reasonably determined to be necessary by Seller in order to
cure
Title Objections but in any event not later than thirty (30)
days
after the Scheduled Closing Date.
(b)
Seller shall also have
the right to invoke the aforesaid
mechanism and adjourn
the Scheduled Closing Date to an Adjourned
Closing Date
if additional time is needed in order
to secure
either the
consents referred in Section 5.9(a)(iv) or the
prepayment of any mortgage or deed of trust loan secured
by the
Properties, by
providing Purchaser at
least five (5)
business
days prior
notice of the date of the Adjourned
Closing Date,
which for purposes of this Section 4.1(b)
can be no later
than
thirty (30)
days after the
Scheduled Closing Date, which date
shall be "time of the essence" with respect to
both parties'
obligation to close on such Adjourned Closing Date.
Section 4.2.
[Intentionally Omitted]
Section 4.3. NO ACTIONS. (a) Except as set forth in Section
4.3(b) in no event
shall Seller be required to bring any action
or institute any
proceeding, or to incur any costs or expenses,
in order to attempt to eliminate any Title
Objection.
Seller
shall notify
Purchaser within ten
(10) days after
receipt of
Purchaser's notice
of any Title Objection ("Seller's Title
Notice") whether or not Seller intends to make reasonable
efforts
to cure the Title Objection in question
(failing which,
Seller
shall be deemed to have elected not to cure
the Title Objection
in question).
Within ten (10)
days after receipt of
Seller's
Title Notice
stating that Seller will not cure any Title
Objection (or
within ten (10) days
of the end of Seller's
ten
(10) day period if Seller failed to send a Seller's Title
Notice), or,
if Seller notified Purchaser
in Seller's Title
Notice that Seller will cure the Title Objection, within five
(5)
days after
any subsequent notice from Seller
that Seller is
unable to, or unwilling to, cure the Title Objection in
question,
Purchaser shall
notify Seller that
Purchaser shall either
(i)
accept the Properties
subject to such objection to title without
abatement of
the Purchase Price, in which event (x) such
objection to
title shall be deemed
to be, for all
purposes, a
Permitted
Encumbrance, (y)
Purchaser shall close hereunder
notwithstanding the existence of same, and (z) Seller shall
have
no obligations
whatsoever after the expiration of Due Diligence
Period with respect to
Seller's failure to cause such objection
to title to be eliminated, or (ii) elect to eliminate the
Property affected by such Title Objection from the terms of
this
Agreement in
which case this
Agreement shall be of
no further
force or effect with respect only to such
Property, except
for
those rights
and obligations expressly stated to survive
expiration or
termination of this
Agreement, and the
Purchase
Price shall be reduced by the value allocated to such Property
as
set forth on Schedule
4.3 attached hereto.
Such election
under
subpart (ii)
of the immediately preceding
sentence shall be
deemed a "DUE
DILIGENCE DEFAULT" under the provisions of Section
4.7 hereof.
(b)
Notwithstanding the
provisions of Section 4.3(a), Seller
shall be obligated, at Closing to discharge
all Monetary Liens
affecting any
Property. Seller shall have no obligation to
discharge any
restrictive covenants, declarations, easements or
other similar instruments which are executed and acknowledged
by
Seller after the date
hereof and prior to the Closing Date and
recorded against
any of the Properties to the extent such
restrictive covenants,
declarations, easements or other similar
instruments were
entered into by Seller after obtaining
Purchaser's prior
written consent thereto, which consent shall
not be unreasonably withheld, conditioned or delayed.
Section 4.4.
SELLER
AFFIDAVITS. Seller
shall deliver to the
Title Company a commercially reasonable form of owner's
affidavit
if and to the extent
required in connection with the issuance of
extended coverage title policies.
Section 4.5.
TITLE INSURANCE. It is
contemplated that, at the
Closing, the Title Company shall issue to Purchaser, or be
irrevocably committed to issue to Purchaser, an ALTA owner's
form
title insurance policy with extended coverage issued by the
Title
Company (each, a "TITLE POLICY", and collectively, the "TITLE
POLICIES") with respect to each Property, in the aggregate
amount
of the Purchase Price, allocated for each Property in
accordance
with the amounts set forth on Schedule 4.3 insuring that good
and
marketable title to the Properties is vested in Purchaser in
accordance with this Agreement. Purchaser shall be entitled to
request that the Title Company provide such additional
endorsements to the Title Policy as Purchaser may reasonably
require, provided that (a) such additional endorsements shall
be
at no cost to, and shall impose no additional liability on
Seller, (b) Purchaser shall obtain commitments for any such
endorsements through a pro forma policy issued by the Title
Company prior to the end of the Due Diligence Period, and, if
Purchaser is unable to obtain such endorsements as set forth in
such pro forma policy at Closing, Purchaser shall not be
obligated to proceed to close with respect to the affected
Property or Properties, the Purchase Price shall be reduced by
the value allocated to such Property or Properties as set forth
on Schedule 4.3 attached hereto, and (c) the Closing on the
remaining Property or Properties shall not be delayed as a
result
of Purchaser's election.
Section 4.6.
OTHER DILIGENCE OBJECTIONS. Upon reasonable prior
notice to Seller, Purchaser shall have the opportunity from the
Effective Date until the date of Closing to physically inspect
the Properties, and Purchaser or Purchaser's agents,
contractors
and representatives shall have the right from and after the
Effective Date to enter upon and make inspections and studies
of
and tests on the Properties at all reasonable times. Such
inspections, studies and tests may include, but not be limited
to, engineering studies, tests and Phase I environmental
assessments (collectively, the "Studies"). The Studies shall (i)
be conducted in a manner as not to physically damage the
Properties or unreasonably interfere with the usual operation
of
the Properties by Seller and (ii) in no event include sampling
of
any environmental media (including, without limitation, air,
soil
and/or groundwater), provided that, if any Phase I
environmental
assessment shall recommend further environmental testing,
including, without limitation, invasive testing and soil
sampling, Purchaser may engage in such testing only if (A)
Purchaser provides reasonable prior notice of such testing to
Seller, (B) Purchaser provides Seller insurance certificates
naming Seller as an additional insured and containing such
types
of insurance and limits that Seller may reasonably require, (C)
such testing does not unreasonably interfere with the business
of
Seller conducted on the Properties, (D) Purchaser shall
immediately repair any damage caused by such testing and
restore
the Property to the condition in which it existed immediately
prior to such damage at Purchaser's sole cost and expense and
(E)
Purchaser indemnifies and holds Seller and Seller's
Representatives harmless from and against any and all loss,
cost,
damage, liens, claims, liabilities or expenses (including, but
not limited to, reasonable attorneys' fees, court costs and
disbursements) incurred by Seller or any of Seller's
Representatives arising from or by reason of such testing.
Seller shall provide to Purchaser all information reasonably
requested by Purchaser which is available to Seller with
respect
to the Properties to assist Purchaser in the Studies. On or
before the date of this Agreement (unless otherwise provided on
Exhibit F), Seller has delivered updated Phase I reports for
each
of the Properties to Purchaser (the "ENVIRONMENTAL REPORTS")
and
Seller has delivered or made available to Purchaser for its
review the materials described on Exhibit F attached hereto
(the
"DUE DILIGENCE DOCUMENTS"). During the Due Diligence
Period,
Purchaser may obtain structural assessments and appraisals of
the
Properties (at Purchaser's sole cost and expense), and shall
deliver to Seller notice of any environmental condition,
structural condition or other matter, including those based
upon
the Due Diligence Documents (including, without limitation, an
appraised value which is less than the amount allocated to a
Property on Schedule 4.3 hereto) with respect to any Property
which materially and adversely affects such Property (a
"DILIGENCE OBJECTION"); PROVIDED, HOWEVER, that any Diligence
Objection relating to any environmental condition shall be
delivered to Seller within the first twenty-five (25) days of
the
Due Diligence Period.
Within ten (10) days after receipt of a
Diligence Objection, Seller shall notify Purchaser ("SELLER'S
DILIGENCE NOTICE") whether or not Seller elects to cure such
Diligence Objection (failing which, Seller shall be deemed to
have elected not to cure the Diligence Objection in question).
If Seller elects to cure such Diligence Objection, Seller may
adjourn the Closing Date for a period reasonably determined to
be
necessary by Seller in order to cure the Diligence Objection
(the
"DILIGENCE CURE PERIOD"), which shall not be later than thirty
(30) days after the Scheduled Closing Date. Within ten (10) days
after receipt of Seller's Diligence Notice stating that Seller
will not cure any Diligence Objection (or within ten (10) days
of
the end of Seller's ten (10) day period if Seller failed to
send
a Seller's Diligence Notice), or, if Seller notified Purchaser
in
Seller's Diligence Notice that Seller will cure any Diligence
Objection within five (5) days after any subsequent notice from
Seller that Seller is unable or unwilling to cure the Diligence
Objection in question, Purchaser shall notify Seller that
Purchaser shall either (i) accept the applicable Property
subject
to such Diligence Objection without abatement of the Purchase
Price, and (x) Purchaser shall close hereunder notwithstanding
the existence of the same, and (y) Seller shall have no
obligations whatsoever after the Due Diligence Period with
respect to Seller's failure to cause such Diligence Objection
to
be eliminated, or (ii) eliminate the Property affected by such
Diligence Objection from the terms of this Agreement in which
case this Agreement shall be of no further force or effect with
respect to such Property, except for those rights and
obligations
expressly stated to survive expiration or termination of this
Agreement, and the Purchase Price shall be reduced by the
amount
allocated to such Property as set forth on Schedule 4.3
attached
hereto. Such election
under subpart (ii) of the immediately
preceding sentence shall be deemed a "DUE DILIGENCE DEFAULT"
under the provisions of Section 4.7 hereof.
Section 4.7. DUE
DILIGENCE DEFAULT; TERMINATION RIGHT; LIMITED
REIMBURSEMENT RIGHT.
(a) During the Due Diligence Period,
Purchaser may provide notice to Seller that Purchaser elects to
eliminate up to five (5) Properties from the terms and
provisions
of this Agreement for reasons of a Title Objection under
Section
4.3, or a Diligence Objection under Section 4.6 (each, a "DUE
DILIGENCE DEFAULT").
If Purchaser timely provides notice of such
Due Diligence Default in accordance with the provisions of
Section 4.3 and Section 4.6, then the Properties for which
notice
of such Due Diligence Default was provided by Purchaser to
Seller
shall be eliminated from the terms and provisions of this
Agreement and this Agreement shall be of no further force and
effect with respect to such Properties only, other than those
rights and obligations expressly stated to survive expiration
or
termination of this Agreement, but this Agreement shall remain
in
full force and effect with respect to all of the other
Properties.
(b)
Anything contained in
this Agreement to the contrary
notwithstanding, if Purchaser determines at any time prior to
the
expiration of
the Due Diligence
Period that the Properties are
not satisfactory to
Purchaser for any reason or no reason, in
Purchaser's sole
discretion, then Purchaser may terminate this
Agreement in
its entirety by delivering written notice of
termination to
Seller prior to the
end of the Due Diligence
Period. If
Purchaser so
terminates this Agreement, the Escrow
Agent shall return the
Deposit to Purchaser (together with all
interest thereon),
and neither party shall have any further
rights, duties or
obligations hereunder except with respect to
the provisions
of this Agreement which expressly
survive the
termination of this Agreement.
(c) If Purchaser
terminates this Agreement following Seller's
election not to cure, or Seller's failure to cure, Diligence
Objections (other than objections relating to financial
performance or valuation of the Properties) for at least five
(5)
Properties and such Diligence Objections could have been cured
by
Seller using commercially reasonable efforts, then Seller shall
be obligated to reimburse Purchaser for Purchaser's actual
out-of-
pocket costs and expenses (including the cost of third-party
reports, travel expenses and reasonable attorneys' fees and
expenses) reasonably incurred by Purchaser in connection with
this Agreement; PROVIDED, HOWEVER, the amount of such
reimbursement shall not exceed Fifty Thousand Dollars
($50,000.00), in the aggregate.
Section 4.8.
FRANCHISOR AND
BANK SYNDICATE APPROVAL, CONSENT.
During the
Due Diligence Period,
Seller shall use
commercially
reasonable efforts
to obtain Franchisor's and Seller's Bank
Syndicate's
approval of
the Lease and consent to this
transaction.
ARTICLE V
CLOSING
Section 5.1.
CLOSING.
The Closing shall be
held on the date
which is ten (10) days
following expiration of the Due Diligence
Period (the
"SCHEDULED CLOSING
DATE"), or such other
date as
Seller may set for the
Closing if it elects to extend said date
pursuant to Section 4.1, Section 4.6, Section 11.1(b) or Section
12.1(b) as
the Adjourned Closing Date.
The Closing on the
Scheduled Closing
Date or the Adjourned Closing Date, as
applicable, shall
commence at 9:30 a.m.
Central time,
at the
offices of the Title Company or at such other location as
Seller
and Purchaser shall mutually designate.
Section 5.2. SELLER'S
CLOSING ITEMS. Unless
otherwise provided
in this Section 5.2, at the Closing, Seller shall execute,
deliver, furnish
or provide to Purchaser, or cause to be
executed, delivered,
furnished or provided
to Purchaser, the
following (in such reasonable number of original counterparts
as
Purchaser may request):
(a) special or limited
warranty deeds in form reasonably
satisfactory to Purchaser and the Title Company for each
of the
Land and Buildings, conveying good and marketable (as required
by
this Agreement)
fee title thereto, subject
to the Permitted
Encumbrances applicable to each Property (the "DEEDS");
(b) the Lease Guaranty
with respect to each Property;
(c) a "non-foreign
person" certification from Seller pursuant to
Section 1445 of the Code in the form attached hereto as Exhibit
D
(the "FIRPTA Affidavit");
(d) the affidavits and
other similar documents contemplated by
Section 4.4;
(e) if available and
to the extent in Seller's possession, a
certificate of occupancy (or copy thereof to the extent
available);
(f) copies of all
permits, approvals, warranties, guaranties,
indemnity agreements, variances, approvals and licenses, in
connection with the ownership, occupancy, maintenance or
operation of the Properties, to the extent Seller is in
possession;
(g) such other
documents as may be reasonably necessary or
appropriate as requested by Purchaser to effect the
consummation
of the transactions that are the subject of this Agreement
(including, without limitation, a Subordination, Non
Disturbance
and Attornment Agreement and a Tenant Estoppel Certificate
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