AMENDMENT NO. 3 TO
REAL ESTATE PURCHASE AGREEMENT
This Amendment No. 3 to Real Estate Purchase Agreement (this "Amendment")
is entered into this 16th day of June, 1997, among T&B LEASING, a North Carolina
general partnership ("Seller"); W. XXXXXX XXXXXXXX and XXXXXXX X. XXXXXXXX;
NATIONAL RESTAURANT ENTERPRISES, INC., d/b/a AMERIKING CORPORATION, a Delaware
corporation ("Purchaser"); and INVESTORS TITLE EXCHANGE CORPORATION, a North
Carolina corporation ("Qualified Intermediary").
Recitals
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1. Seller, Castle Properties, L.L.C., Xxxxxx Xxxxxxxx and Xxxxxxx Xxxxxxxx
entered into that certain Real Estate Purchase Agreement dated March 8, 1997
(the "Original Contract") involving the conveyance of certain interests in real
property and improvements thereon as specified in Section 1.1 therein.
2. The Original Contract was amended by Amendment No. 1 to Real Estate
Purchase Agreement, dated April 8, 1997, and Amendment No. 2 to Real Estate
Purchase Agreement, dated June 16, 1997 (the "Prior Amendments"). Pursuant to
the Prior Amendments, Purchaser was substituted for Castle Properties, L.L.C. as
a party to the Original Contract, as amended. (The Original Contract, as amended
by the Prior Amendments, is referred to herein as the "Contract.")
3. Consistent with Section 11.18 of the Original Contract, Seller desires
to engage in a like-kind exchange pursuant to (S)1031 of the Internal Revenue
Code of 1986, as amended, and therefore, the parties hereto desire to modify
certain provisions of the Contract prior to closing in accordance with the terms
provided below in order that Seller may avail itself to the benefits of (S)1031
of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, for and in consideration of One Dollar ($1.00) in hand paid
by Seller to Purchaser and the mutual premises contained herein and other good
and valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and modify the Contract as
follows:
l. Section 8.1 of the Original Contract is hereby modified as follows:
a. Purchase Price. Both the Purchaser and the Seller intend the
conveyance of the properties set forth on Exhibit A attached hereto
(collectively, the "Property") and the receipt of consideration by the Seller in
return therefor shall constitute a like-kind exchange with respect to the Seller
within the meaning of (S) 1031 of the Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, the Seller shall locate and designate Exchange
Parcels (as hereinafter defined), and the Qualified Intermediary shall expend
the sums deposited into escrow as provided herein in order to deliver or cause
to be delivered to the Seller title to the Exchange Parcels as consideration to
the Purchaser of the Property, all as more specifically provided herein.
b. First Closing. The closing of the transfer of the Property by the
Seller to the Purchaser shall occur at the offices designated in Section 2.1 of
the Contract at the time and place set forth in the Contract ("First Closing
Date"), at which time all parties agree to execute any and all documents and
papers necessary to consummate the transactions contemplated in the Contract and
herein with regard to the conveyance of the Property to Purchaser. The deed for
the Property shall be to Purchaser. The transactions to occur at such time and
place are referred to herein as the "First Closing." At the First Closing,
Purchaser shall cause to be paid to the Qualified Intermediary all of the sums
allocated to the Property under Section 1.2 of the Contract (the "Purchase
Price") less closing, costs, prorations and adjustments, to be held in
accordance with the provisions herein.
c. Identification of Like-Kind Exchange Property. Within 45 days of
the First Closing Date, Seller shall identify in writing one or more fee simple
or leasehold interests in parcels of real estate (hereinafter called "Exchange
Parcels") which are to be acquired by the Qualified Intermediary and transferred
to the Seller at the Second Closing Date, as hereinafter defined. Identification
of the Exchange Parcels by the Seller shall be deemed to have occurred only if
the identification is in writing, specifically designates the identified
properties, is signed by the Seller, and is hand delivered, mailed or telecopied
to the Qualified Intermediary within 45 days of the First Closing Date.
d. Like-Kind Exchange. The Seller shall negotiate the terms and
conditions of the contracts of sale or the leases for the Exchange Parcels and
shall furnish execution copies of such contracts of sale or leases to the
Qualified Intermediary. All contracts so furnished to the Qualified Intermediary
shall be executed by the Qualified Intermediary within ten (10) days after their
submission by Seller. The Qualified Intermediary shall not enter into any such
contracts or lease regarding the Exchange Parcels except those furnished thereto
by the Seller. If the contract or lease for an Exchange Parcel shall require the
payment of an xxxxxxx money deposit or any other funds, the amount of the
xxxxxxx money deposit or any other funds shall be advanced by the Qualified
Intermediary from the funds deposited therewith pursuant to paragraph b hereof
to the seller, landlord or other party named in the contract or lease regarding
the Exchange Parcel.
In addition to the above, Qualified Intermediary shall enter into a
construction contract or construction contracts negotiated and selected by
Seller and shall use the Escrow Account Balance (as hereinafter defined) to
construct improvements upon the Exchange Parcel to be transferred or assigned to
Seller pursuant to this Agreement as directed by Seller. Seller shall require
the construction company or general contractor constructing improvements on any
Exchange Parcel to have adequate liability insurance and to name Qualified
Intermediary as a certificate holder. Qualified Intermediary shall convey each
Exchange Parcel to Seller by limited warranty deed or by assignment of lease
with regard to a leasehold estate. Seller shall be responsible for all real
estate taxes applicable to each Exchange Parcel from the date of acquisition of
same by Qualified Intermediary.
Notwithstanding anything herein to the contrary, in no event shall
Qualified Intermediary be required to expend more than the Escrow Account
Balance for the acquisition and construction of
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one or more Exchange Parcels. Accordingly, if the total cost for the acquisition
and construction of one or more Exchange Parcels are greater than the amount of
the Escrow Account Balance held by Qualified Intermediary, Seller shall be
responsible for any deficiency from time to time or at the Second Closing (as
hereinafter defined).
e. Second Closing. For each Exchange Parcel, the closing of the
conveyance or assignment of the Qualified Intermediary's interest in the
Exchange Parcels to the Seller shall occur at the office designated by Seller on
the earliest of (i) a date agreed upon by the Qualified Intermediary and Seller,
(ii) the date which is 180 days after the First Closing Date or (iii) the due
date (including extensions) of the Seller's tax return for the taxable year of
the First Closing Date ("Second Closing Date"). The transactions to occur at
such time and place are referred to herein as the "Second Closing." At the
Second Closing, the Qualified Intermediary shall cause each Exchange Parcel or
leasehold interest therein to be conveyed or assigned to the Seller by deeds or
assignments containing such covenants of title as are required by the terms of
the contracts relating to such Exchange Parcel. The Qualified Intermediary shall
pay such sums of money held by the Qualified Intermediary ("Escrow Account
Balance") which are necessary to effectuate the transfer of the Exchange
Parcels. The title to each Exchange Parcel or interest therein shall be as
required by the contract of sale or lease relating to such Exchange Parcel. If
the aggregate cost of the Exchange Parcels less any xxxxxxx money deposit or
other sums previously paid by the Qualified Intermediary is greater than the
Escrow Account Balance, then the Seller shall pay to the Qualified Intermediary
in cash upon demand, as additional consideration for the Exchange Parcels, an
amount equal to the excess of the aggregate cost of the Exchange Parcels less
any xxxxxxx money deposit or other sums previously paid by the Qualified
Intermediary over the Escrow Account Balance. If any funds remain in the
possession of the Qualified Intermediary at the last of the Exchange Parcels to
be acquired at the Second Closing after the payment of the aggregate costs of
the Exchange Parcels, such funds shall be distributed to the Seller. The
aggregate cost of an Exchange Parcel shall include the cost of the acquisition,
transfer, assignment and exchange of the Exchange Parcel and the construction of
improvements thereon actually paid in cash by the Qualified Intermediary and not
otherwise reimbursed to the Qualified Intermediary, including, without limiting
the generality of the foregoing, all settlement costs and expenses, all
obligations of the contract purchaser under the contract of sale for the
Exchange Parcels and the reasonable cost of legal services rendered to the
Qualified Intermediary with respect to the Exchange Parcels, it being the intent
of this Contract that the Seller shall reimburse the Qualified Intermediary for
all costs and expenses which would have been incurred by the Qualified
Intermediary if the Seller had not selected any Exchange Parcels and the
Purchaser had paid the entire Purchase Price for the Property to the Seller in
cash. The cost of an Exchange Parcel shall not include the amount of any
mortgage or encumbrance, if any, to which an Exchange Parcel is subject at the
time of its conveyance or assignment to the Seller. The Qualified Intermediary
shall not enter into any other contract, incur any expense, execute any note or
mortgage, or agree to any encumbrance in connection with an Exchange Parcel
unless the Seller has first approved such contract expense, indebtedness or
encumbrance. No contract relating to any Exchange Parcel shall be amended or
modified without the prior written consent of the Seller, and the Qualified
Intermediary shall perform all of its obligations under each contract of sale or
lease relating to an Exchange Parcel during the period in which the Qualified
Intermediary has an interest. The Seller shall report, for federal income tax
purposes, that the exchange of Exchange Parcels for the Property is subject to
the provision of (S) 1031 of the Code, and the Purchaser shall refrain from
taking any
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position inconsistent with this reporting without the Seller's prior written
consent. The provisions of the preceding sentence shall survive settlement
pursuant to this Contract.
f. Failure to Identify Exchange Parcels. If the Seller fails to
identify any Exchange Parcels within 45 days of the First Closing Date in
accordance with the provisions of paragraph c, the Qualified Intermediary shall,
upon the expiration of the 45 day period, distribute the funds held in escrow to
the Seller. In the further event that the Seller properly identifies one or
more Exchange Parcels within 45 days of the First Closing Date in accordance
with the provisions of paragraph c, but the Qualified Intermediary fails for any
reason to acquire an interest in at least one of the properly identified
Exchange Parcels by the Second Closing Date, the Qualified Intermediary shall
distribute to the Seller the funds held in escrow on the earlier of the date
which is 180 days after the First Closing Date or the due date (including
extensions) of the Seller's tax return for the taxable year of the First Closing
Date.
g. Qualified Intermediary's Funds. All monies deposited with the
Qualified Intermediary hereunder shall be held in a separate interest bearing
demand account or other form at a bank insured by the Federal Deposit Insurance
Corporation and approved by Seller. All interest earned on such funds shall be
for the direct or indirect benefit of Seller and shall be added to and become a
part of the Escrow Account Balance.
h. Limitation of Liability. Qualified Intermediary shall not be
liable for anything which Qualified Intermediary may do or refrain from doing in
connection with this Agreement and all documents referred to herein including
without limitation (i) the failure of the Property to close in a timely fashion;
(ii) the failure of Seller to locate or properly identify appropriate Exchange
Parcels within such forty-five (45) day period after the First Closing; (iii)
the failure of the Property or the Exchange Parcels to qualify as like-kind
exchange property within the meaning of (S) 1031 of the Internal Revenue Code of
1986, as amended; (iv) the failure of the Exchange Parcels to close within the
required period; and (v) the failure for any reason of the exchange of the
Property or the Exchange Parcels by Seller to qualify as a like-kind exchange
pursuant to (S) 1031 of the Internal Revenue Code of 1986, as amended, unless
such failure is caused by the negligence or willful misconduct of the Qualified
Intermediary.
Seller represents and warrants to Qualified Intermediary that it has
requested and received satisfactory review and advice regarding the legal and
tax implications of the contemplated like-kind exchange, and related documents
and agreements, including without limitation, this Agreement. Qualified
Intermediary makes no representations or warranties, express or implied, that
the transaction contemplated in this Agreement qualifies as a like-kind exchange
pursuant to (S) 1031 of the Internal Revenue Code of 1986, as amended, and
Seller has not relied upon any statements or representations made by Qualified
Intermediary, its of officers, directors, shareholders, agents or employees
regarding the legal or tax implications of the transactions contemplated in this
Agreement.
i. Indemnity of Qualified Intermediary. Seller shall indemnify and
hold harmless Qualified Intermediary, its shareholders, directors, officers,
employees, agents, representatives, and
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the successors and assigns thereof, from and against any and all claims,
disputes, liabilities, losses, costs, damages, or expenses of any kind,
including reasonable attorney's fees actually incurred and costs and expenses
incurred in the investigation, prosecution, defense or settlement of any claims,
which may be threatened against, incurred or undertaken by Qualified
Intermediary and (i) which arise out of or in connection with any breach;
inadequacy, incompleteness or inaccuracy of any representation or warranty made
by or on behalf of Seller in, or any failure of Seller to perform any of the
Seller's covenants or obligations pursuant to this Agreement and any and all
other documents or agreement referred to herein or entered into in connection
herewith, and (ii) which otherwise arise out of or in connection with this
Agreement and any and all documents or agreements referred to herein or entered
into in connection herewith, except those claims for which Qualified
Intermediary may be held liable to Seller for the negligence or willful
misconduct of Qualified Intermediary.
Seller shall indemnify and hold harmless Qualified Intermediary, its
shareholders, directors, officers, employees, agents, representatives, and the
successors and assigns thereof, from and against any and all claims, disputes,
liabilities, penalties, forfeitures, violations of Environmental Laws (as
hereinafter defined), losses, costs, damages, or expenses of any kind, including
reasonable attorneys' fees actually incurred and costs and expenses incurred in
the investigation, prosecution, defense or settlement of any claims, or death
of, or injury to any person or damage to any property whatsoever, which may be
threatened against, incurred or undertaken by Qualified Intermediary and arising
from or caused in whole or in part, directly or indirectly, by the presence in,
on, under or relating to the Property or the Exchange Parcels or any
improvements thereon of any Hazardous Substances Materials or Wastes (as
hereinafter defined), or the use, analysis, generation, discharge, release (or
threatened release), storage, treatment, transport or disposal of Hazardous
Substances Materials or Wastes to, in, on, under, or about or from any such
property or improvements thereon. Seller's obligation hereunder shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary repair, removal, assessment, remediation, or
detoxification or decontamination of any of said property or any improvements,
and the preparation and implementation of any comprehensive site assessment,
closure, remedial action or other required plans in connection therewith, and
these obligations shall survive the transfer to Qualified Intermediary's
successor in interest of any such property or improvements. For purposes of the
indemnity provisions hereof, any acts or omissions of or by employees, agents,
assignees, or of Seller or others acting for or on behalf of Seller (whether or
not they are negligent, intentional, willful or unlawful) strictly shall be
attributable to Seller.
For purposes of this Agreement, "Hazardous Substance Materials or Wastes"
means and includes, without limitation, petroleum products, petroleum byproducts
and any petroleum constituents (including, but not limited to, crude oil, diesel
oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with other
waste, oil sludge and all other liquid hydrocarbons regardless of specific
gravity), any flammable explosives, radioactive materials, asbestos or any
asbestos-containing materials, solid or liquid wastes, and/or any hazardous,
toxic, regulated or dangerous waste, substance or material defined as such by
the United States Environmental Protection Agency or for the purpose of or by
any Environmental Laws as may now or at any time hereafter be in effect. For
purposes of this Agreement, "Environmental Laws" means and includes, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, the Hazardous Materials
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Transportation Act, the Resource Conservation and Recovery Act, the Clean Water
Act, the Clean Air Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, any "Superfund" or "Superlien" law,
applicable State Groundwater Regulations, applicable State Underground Storage
Tank regulations, or any other federal, state or local law, ordinance,
regulation, rule, order or decree regulating, relating to or imposing liability,
responsibility or standards of conduct applicable to environmental, health or
safety conditions and/or releases (or threatened releases) of Hazardous
Substances Materials or Wastes in, on, at or affecting the Property or the
Exchange Parcels, as such may now or at any time hereafter be defined or in
effect.
If any matter subject to indemnification hereunder arises in the form of a
claim against Qualified Intermediary, its shareholders, directors, officers,
employees, agents, representatives, or the successors and assigns thereof
(collectively, "Indemnitee") (herein referred to as a "Third Party Claim"), the
applicable Indemnitee promptly shall give notice and details thereof, including
copies of all pleadings and pertinent documents to Seller. Within fifteen (15)
days of such notice, Seller either (i) shall pay the Third Party Claim either in
full or upon agreed compromise; or (ii) shall notify the applicable Indemnitee
and Qualified Intermediary that Seller disputes the Third Party Claim and
intends to defend against it, and thereafter shall so defend and pay any adverse
final judgment or award in regard thereto. Such defense shall be controlled by
Seller and the cost of such defense shall be borne by Seller except that the
applicable Indemnitee and Qualified Intermediary shall have the right to
participate in such defense at their own expense and provided that Seller shall
have no right in connection with any such defense or the resolution of any such
Third Party Claim to impose any cost, restriction, limitation or condition of
any kind upon any of the parties comprising Indemnitee hereunder. Qualified
Intermediary agrees that it shall cooperate in all reasonable respects in the
defense of any such Third Party Claim, including making personnel, books and
records relevant to the Third Party Claim available to Seller without charge
therefor except for out-of-pocket expenses. If Seller fails to take action
within fifteen (15) days as hereinabove provided or, having taken such action,
thereafter fails diligently to defend and resolve the Third Party Claim, the
parties comprising Indemnitee shall have the right to pay, compromise or defend
the Third Party Claim and to assert the indemnification provisions hereof. Each
of the parties comprising Indemnitee also shall have the right, exercisable in
good faith, to take such action as may be necessary to avoid a default prior to
the assumption of the defense of the Third Party Claim by Seller.
If Qualified Intermediary institutes litigation or any other dispute
resolution action (including without limitation, arbitration or mediation)
against Seller for any reason in connection with this Agreement, Seller shall
pay all costs and expenses, including without limitation attorneys' fees,
incurred by Qualified Intermediary in such action.
2. Assignment.
a. Seller hereby assigns to the Qualified Intermediary its rights
under the Contract with regard to the Property only to the extent necessary to
consummate the contemplated like-kind exchange. The Qualified Intermediary
hereby accepts such assignment; and, subject to the provisions of paragraph 2.b
hereof, the Qualified Intermediary hereby agrees to assume the Seller's
obligation and duty to convey the Property to the Purchaser pursuant to the
Contract. In connection with such
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assignment, the Qualified Intermediary is hereby substituted in place of the
Seller under the Contract solely for the purpose of conveying the Property to
the Purchaser in order to facilitate and effectuate the exchange. The Purchaser
hereby consents to such assignment upon the terms and conditions set forth
herein.
b. The Purchaser agrees to cooperate with the Seller and the
Qualified Intermediary to effect the exchange and the Purchaser and the
Qualified Intermediary acknowledge and agree that:
(i) The Qualified Intermediary will acquire the Property from the
Seller in order to complete the exchange. The Qualified Intermediary, as
seller, hereby instructs the Seller to execute and the settlement agent to
record a warranty deed conveying the Property at the First Closing directly from
the Seller, as grantor, to the Purchaser, as grantee. Further, any and all
bills of sale, tenant lease assignments, general assignments, and similar
closing documents shall be executed by the Seller for the direct benefit of the
Purchaser. The Qualified Intermediary has not made or assumed, nor shall it
make, assume, or be liable for, any covenant, duty, or obligation of the Seller
under the Contract as set forth in the Contract except for the limited
obligations undertaken herein, which are assumed expressly, and only to the
extent necessary to consummate this like-kind exchange, and the Purchaser hereby
releases and discharges the Qualified Intermediary from and against any claim,
demand, liability, loss, damage, cost, or expense in connection with any matter
relating to the Property and/or any term, condition, or instrument referred to
in these instructions or otherwise relating to the First Closing or the
Contract. The Purchaser hereby agrees that it shall be and remain solely
responsible and liable to the Seller for the performance of each and every
warranty, representation and obligation, if any, of the Purchaser with respect
to the Property and that the Seller shall look solely to it for such performance
and liability.
(ii) The Purchaser's sole recourse shall be against the Seller with
respect to any claim or allegation concerning the Property or any performance,
agreement, or obligation arising from or in connection with the First Closing or
the Contract. The Seller and its general partners hereby agree that they shall
be and remain solely responsible and liable to the Purchaser for the performance
of each and every warranty and obligation, if any, of the Seller with respect to
the Purchaser's purchase of the Property and that the Purchaser shall look
solely to them for such performance and liability.
(iii) The assignment set forth in paragraph 2.a. above shall not
affect, limit, modify, or impair in any way the representations, warranties,
covenants, or indemnifications, if any, made by the Purchaser or the Seller or
the obligations of the Purchaser or the Seller under the Contract and all such
representations, warranties, covenants, and indemnifications made by them shall
inure to the benefit of the other and shall not be affected in any way by the
assignment set forth in paragraph 2.a. hereof. Nothing set forth herein shall
in any way release the Purchaser or the Seller from any of their obligations,
liabilities, indemnifications, covenants, representations, or warranties
(whether express or implied in fact or implied at law), if any, made under the
Contract for the benefit of the other thereunder, or under any documents
executed in connection with the Contract for the benefit of the other
thereunder, or executed in connection with the First Closing for the benefit of
the other thereunder, including without limitation, all warranty deeds,
assignments of contracts, assignments of leases, assignments of warranties,
general assignments, bills of sale, and estoppel certificates.
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3. This Amendment may be executed in counterparts, each of which shall be
deemed as original, but all of which, when taken together, shall constitute but
one (1) and the same instrument.
4. This Amendment may be executed by any or all of the parties hereto and
delivered to the Qualified Intermediary by facsimile, and the Qualified
Intermediary is hereby authorized to act upon all such facsimile copies as if
they were originals.
5. Except as otherwise modified herein, the Contract is hereby ratified
and confirmed.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and sealed, all as of the day and year first above written.
PURCHASER
NATIONAL RESTAURANT ENTERPRISES, INC.
d/b/a AMERIKING CORPORATION,
[CORPORATE SEAL] a Delaware corporation
Attest:
By:__________________________________
Xxxx Xxxxxx, Secretary
________________________
Name: __________________
SELLER
T&B LEASING
a North Carolina general partnership
By:_______________________________ (SEAL)
W. Xxxxxx Xxxxxxxx, General Partner
QUALIFIED INTERMEDIARY
INVESTORS TITLE EXCHANGE
CORPORATION
By:__________________________________
Title:_______________________________
Date:________________________________
[CORPORATE SEAL]
ATTEST:
_________________________________
Its:__________________ Secretary
___________________________________(SEAL)
W. Xxxxxx Xxxxxxxx
_____________________________________(SEAL)
Xxxxxxx X. Xxxxxxxx
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Exhibit A
to Amendment to
Real Estate Purchase Agreement
Store Allocated
Number Location of Store Sales Price
--------------------------------------------------------------------------
0000 Xxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxx Xxxxxxxx $ 956,076
--------------------------------------------------------------------------
7234 Lillington, North Carolina $1,057,239
--------------------------------------------------------------------------
7321 Apex, North Carolina $1,069,678
--------------------------------------------------------------------------
0000 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxx $1,370,970
--------------------------------------------------------------------------
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