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) 0000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx ("Premises
A")
2) 000 Xxxxx Xxxxxxxx Xxxxx, Xxx Xxxxxx, Xxxxxxx
("Premises B")
3) 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx
("Premises C")
4) 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxxxx,
Xxxxxxx ("Premises D")
5) 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx
("Premises E")
6) 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxx
("Premises F")
7) 000 Xxxxxxxx Xxxx Xxxxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxxxxxxxxx ("Premises G")
8) 000 Xxxxx Xxxx, Xxxxxx, Xxxxxxxxxx ("Premises H")
9) 0000 X Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx
("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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X Xxxxxxx
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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Its: President
AEI FUND MANAGEMENT XVII, INC.,
a Minnesota corporation
By: /s/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
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/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
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,
Xxxxxxx Xxxxx Capital, a Division of Xxxxxxx Xxxxx Business
Financial Services Inc., GE Capital Franchise Finance
Corporation, National City Bank of Pennsylvania, Xxxxx 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 000 X. Xxxxx, Xxxxxxx, Xxxxxxxx
00000, 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 xxxx, logo, insignia, slogan, emblem or
symbol of Xxxxxxxx'x 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 in the
form of those attached as exhibits to the Lease);
(h) the Title Policy, or an irrevocable commitment to issue the
Title Policy (and any endorsements for which commitments have
been obtained by Purchaser prior to the end of the Due Diligence
Period), for each Property, dated as of the filing of the Deed
for such Property, issued by the Title Company, and insuring
Purchaser's good and marketable title in the amount of the
Purchase Price allocable to such Property, subject only to the
Permitted Encumbrances applicable to such Property;
(i) a Xxxx of Sale and Assignment, duly executed by Seller,
conveying title to all of the portions of the Properties
described in Section 2.3(d), (e), (f) and (g) hereof, if, and to
the extent assignable, to Purchaser;
(j) a Certificate of Seller confirming that all representations
and warranties of Seller in this Agreement are true and correct
in all material respects as of the Closing Date;
(k) certificates of insurance with respect to each Property
showing the insurance coverages required under the Leases and
names Purchaser as an additional insured and/or loss payee two
(2) business days prior to Closing;
(l) a Closing Statement; and
(m) written confirmation from AAG that it has no right to
acquire any interest in the Properties.
Section 5.3. PURCHASER'S CLOSING ITEMS. At the Closing,
Purchaser shall execute, deliver, furnish or provide to Seller,
or cause to be executed, delivered, furnished or provided to
Seller, the following:
(a) the balance of the Purchase Price in the manner required by
Section 2.2(b);
(b) consents to collateral lease assignments and estoppel
agreements and any other document reasonably required by Seller's
Bank Syndicate or Franchisor, in form and substance reasonably
acceptable to the parties hereto;
(c) such other documents as may be reasonably necessary or
appropriate as requested by Seller to effect the consummation of
the transactions that are the subject of this Agreement;
(d) a Certificate of Purchaser confirming that all
representations and warranties of Purchaser in this Agreement are
true and correct in all material respects as of the Closing Date;
and
(e) a Closing Statement.
Section 5.4. DOCUMENTS JOINTLY EXECUTED BY SELLER AND
PURCHASER. At the Closing, Seller and Purchaser shall each
execute and deliver the following documents:
(a) any requisite transfer tax returns provided for in Section
5.5, to be delivered to the Title Company;
(b) the Leases and Lease Memorandum for the Properties;
(c) the documentation necessary to comply with Section 5.7;
(d) subject to satisfaction of the conditions to Closing
contained in this Agreement and such letter, a letter of
direction to the Escrow Agent to disburse the Deposit and the
balance of the Purchase Price to Seller, record the Deeds and
Lease Memoranda, and take all other actions necessary to effect
the Closing; and
(e) such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transactions that
are the subject of this Agreement.
Section 5.5. TRANSFER AND RECORDATION TAXES. (a) All recording
fees, recording taxes, intangibles taxes, transfer taxes and
sales taxes, if any, imposed in connection with the conveyance of
the Properties pursuant to this Agreement as required by the laws
of each respective jurisdiction in which the Properties are
located (the "Transfer Taxes") shall be paid by Seller.
(b) Seller and Purchaser shall each execute and/or acknowledge
the returns or statements required if any, in connection with the
Transfer Taxes, and any other taxes referred to in this Section
5.5 or otherwise applicable to the transactions contemplated by
this Agreement, and shall deliver same, together with the check
or checks of Seller in payment thereof which are required of
Seller, to the Title Company on the Closing Date. All such tax
payments shall be made by certified or bank check payable
directly to the order of the appropriate governmental officer, or
in such manner as the Title Company shall reasonably require and
accept.
(c) The provisions of this Section 5.5 shall survive the
Closing.
Section 5.6. TITLE INSURANCE AND DILIGENCE COSTS. The costs of
examination of title (including all UCC, tax and other searches)
and title premiums for the issuance by the Title Company of ALTA
owner's form title insurance policies with extended coverage (and
including survey endorsements) insuring Purchaser's fee interest
in the Properties, shall be paid by Seller. The cost of
obtaining survey affidavits and certifications required
hereunder, including, without limitation, affidavits regarding no
new improvements, shall be paid by Seller. The cost of the Phase
I reports previously delivered to Purchaser, any updates to
correct inaccuracies in such reports, and the certification
thereof to Purchaser shall be paid by Seller. The costs of all
other diligence items, including, but not limited to, appraisals,
structural and engineering reports and condemnation and zoning
investigations, additional surveys (excluding the Surveys
described in Section 4.1), and additional environmental reports
or studies obtained by Purchaser shall be paid by Purchaser. The
provisions of this Section 5.6 shall survive the Closing.
Section 5.7. 1099 COMPLIANCE. Seller and Purchaser shall
execute, acknowledge and deliver to the other party such
instruments, and take such other actions, as such other party may
reasonably request in order to comply with Section 6045(e) of the
Code, or any successor provision or any regulations promulgated
pursuant thereto, insofar as the same requires reporting of
information in respect of real estate transactions. The parties
designate the Title Company as the responsible party for
reporting this information as required by law. The provisions of
this Section 5.7 shall survive the Closing.
Section 5.8. ATTORNEYS' FEES. Seller and Purchaser shall each
bear the costs of their respective counsel in connection with the
sale and purchase of the Properties. At Closing, Seller shall
provide a credit to Purchaser against the Purchase Price in an
amount equal to the lesser of: (a) Four Thousand Dollars
($4,000.00) for each Property conveyed to Purchaser at Closing,
or (b) the total amount of attorneys' fees incurred by Purchaser
in connection with this transaction. At least two (2) business
days prior to Closing, Purchaser shall provide to Seller copies
of invoices (or other evidence of payment) verifying the total
amount of attorneys' fees incurred by Purchaser in this
transaction.
Section 5.9. CLOSING CONDITIONS. (a) The obligation of Seller
to consummate the transaction contemplated by this Agreement
shall be conditioned on the following conditions, as of the
Closing Date:
(i) all representations and warranties of Purchaser in this
Agreement are true and correct in all material respects as of the
Closing Date, except to the extent that any such representations
and warranties expressly relate to an earlier date;
(ii) Purchaser shall have performed, in all material respects,
all of its obligations under this Agreement;
(iii) Purchaser has not filed nor has become the subject of a
bankruptcy proceeding; and
(iv) Seller's Bank Syndicate and Franchisor shall have consented
to the transactions contemplated by this Agreement (including,
without limitation, approval of the Lease) within five (5) days
prior to the Closing Date.
(b) The obligation of Purchaser to consummate the transaction
contemplated by this Agreement shall be conditioned on the
following conditions, as of the Closing Date:
(i) all representations and warranties of Seller are true and
correct in all material respects as of the Closing Date, except
to the extent that any such representations and warranties
expressly relate to an earlier date;
(ii) Seller shall have performed, in all material respects, all
of its obligations under this Agreement;
(iii) neither any Seller nor AAG has filed nor has become the
subject of a bankruptcy proceeding; and
(iv) Seller's Bank Syndicate and Franchisor shall have consented
to the transactions contemplated by this Agreement (including,
without limitation, approval of the Lease) within five (5) days
prior to the Closing Date.
(c) If the Closing shall not occur solely as a result of the
failure of the condition set forth in Section 5.9(a)(iv), Section
5.9(b)(iii) or Section 5.9(b)(iv) above, the Deposit (and any
interest earned thereon) shall be returned to Purchaser and upon
Purchaser's request therefor, Seller shall reimburse Purchaser
for all of Purchaser's actual out-of-pocket costs and expenses
(including, without limitation, the cost of third-party reports,
travel expenses and reasonable attorneys' fees and expenses)
reasonably incurred by Purchaser in connection with this
Agreement, within ten (10) days of Seller's receipt of an invoice
for such costs and expenses; Provided, However, the amount of
such reimbursement shall not exceed One Hundred Fifty Thousand
Dollars ($150,000), in the aggregate.
Section 5.10. PRICE ALLOCATION. Purchaser and Seller hereby
agree to allocate the Purchase Price among the Properties in the
manner set forth on Schedule 4.3 under the column labeled
"Purchase Price - Amt," or on such other basis as the parties may
mutually agree to in writing prior to Closing.
ARTICLE VI
CLOSING ADJUSTMENTS
Section 6.1. CLOSING ADJUSTMENTS. Seller and Purchaser
acknowledge and agree that there shall be no closing adjustments,
because of the execution and delivery of the Lease at closing and
that payments usually adjusted will be paid by Seller or the
tenant under the Lease.
ARTICLE VII
COVENANTS OF SELLER
Section 7.1. COVENANTS. During the period from the date hereof
until the Closing Date, Seller shall (i) operate, maintain and
manage the Properties in a manner consistent with current
practice, (ii) not enter into any leases, license agreements or
other agreements which would be an encumbrance on any of the
Properties, (iii) maintain casualty and liability insurance in
commercially reasonable amounts, and (iv) notify Purchaser
promptly after Seller is notified or becomes aware of (A) any
litigation regarding any of the Properties, (B) any event or
condition which would cause any representation or warranty of
Seller contained herein to no longer be true and correct in any
material respect, or (C) any event or condition which would cause
any condition to Purchaser's obligations in Section 5.9(b) to not
be satisfied in any material respect.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.1. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller
hereby represents and warrants to Purchaser as of the date hereof
that, except as identified on Schedule 8.1, which Seller shall
complete and deliver to Purchaser within ten (10) days following
the Effective Date:
(a) Seller is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State
of Delaware and is qualified to do business in each state where
the Properties are located;
(b) Seller has the legal right, power and authority to enter
into this Agreement and the Leases and to perform all of its
obligations hereunder, and the execution and delivery of this
Agreement and the Leases and the performance by Seller of its
obligations hereunder and thereunder, (x) has been duly
authorized, and (y) will not conflict with, or result in a breach
of, any of the terms, conditions and provisions of its
organizational and governance documents or any law, statute, rule
or regulation, or order, judgment, writ, injunction or decree of
any court or governmental instrumentality, or any contract,
agreement or instrument to which it is a party or by which it is
bound, or to which it or any portion of its property is subject
and (z) will not require the consent, approval, authority or
order of any court or governmental agency that has not been
previously obtained in writing or delivered to the Purchaser;
(c) Seller has not received written notice of any pending
condemnation, eminent domain or similar proceedings with respect
to the Properties, and has no actual knowledge that any such
proceedings are threatened or contemplated;
(d) Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code;
(e) neither Seller nor AAG has (i) commenced a voluntary case,
or to Seller's knowledge, had entered against it a petition for
relief under any federal bankruptcy act or similar petition order
or decree under any federal or state law or statute relative to
bankruptcy, insolvency or other relief for debtors, (ii) caused,
suffered or consented to the appointment of a receiver, trustee,
administrator, conservator, liquidator, or similar official in
any federal, state or foreign judicial or nonjudicial proceeding,
to hold, administer and/or liquidate all or substantially all of
its asset, or (iii) made an assignment for the benefit of
creditors;
(f) the Properties are not subject to any agreements of sale, or
any options or other rights of third parties to acquire any
interest therein (other than pursuant to this Agreement and the
rights of Franchisor under its franchise agreements with AAG);
(g) there are no adverse or other parties in possession of the
Properties, or of any part thereof, except Seller, and to
Seller's knowledge no party has been granted, and there does not
currently exist, any license, lease or other right relating to
the possession of the Properties, or any part thereof other than
as set forth in Seller's agreements with Franchisor;
(h) Seller is not a party to any litigation, arbitration or
administrative proceeding, and no litigation, arbitration or
administrative proceeding is pending or, to Seller's knowledge,
threatened: (A) in which Seller is adverse to any person or
entity having or claiming any past, present or future interest in
any of the Properties, (B) which affects or questions Seller's
title to or current use of any of the Properties or Seller's
ability to perform its obligations under this Agreement, or (C)
otherwise relating to any claim for damages for personal injury
or property damage arising from or at any Property;
(i) except as disclosed in the Environmental Reports (i) to
Seller's knowledge, no Property contains any Hazardous Substances
in violation of any applicable Environmental Laws, (ii) Seller
has not received any notice of, and has no actual knowledge that,
any administrative agency or other governmental authority has
determined that there has been (or is investigating whether there
is) a presence at, release or threat of release from, or
placement on or in, any Property of any Hazardous Substances, or
any Hazardous Substance in violation of any applicable
Environmental Laws, and (iii) to Seller's knowledge, no
underground storage tanks are located on any Property;
(j) to Seller's knowledge, Seller has not received written
notice of any breach of any reciprocal easement agreement,
development agreement, operating agreement or similar agreement
affecting the Property which has not been cured;
(k) Seller has not received written notice from any governmental
or regulatory agency of any material violation of any law,
regulation or statutory requirement with respect to the physical
condition of any Building, or the operation of Seller's business
thereon, which has not been cured;
(l) Neither Seller nor, to the best of Seller's knowledge, any
of Seller's members, are an entity or person: (i) that is listed
in the Annex to, or is otherwise subject to the provisions of
Executive Order 13224 issued on September 24, 2001 ("EO13224");
(ii) whose name appears on the United States Treasury
Department's Office of Foreign Assets Control ("OFAC") most
current list of "SPECIFICALLY DESIGNATED NATIONAL AND BLOCKED
PERSONS" (which list may be published from time to time in
various mediums including, but not limited to, the OFAC website,
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/x00xxx.xxx);
(iii) who commits, threatens to commit or supports "TERRORISM,"
as that term is defined in EO13224; (iv) is subject to sanctions
of the United States government or is in violation of any
federal, state, municipal or local laws, statutes, codes,
ordinances, orders, decrees, rules or regulations relating to
terrorism or money laundering, including, without limitation,
EO13224 and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001; or (v) who is otherwise affiliated with any entity
or person listed above (any and all parties or persons described
in subsections (i) - (v) above are herein referred to as a
"PROHIBITED PERSON"). Neither Seller nor its members shall
knowingly: (A) conduct any business, nor engage in any
transaction or dealing, with any Prohibited Person, including,
but not limited to, the making or receiving of any contribution
of funds, goods, or services, to or for the benefit of a
Prohibited Person; or (B) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set
forth in EO13224; and
(m) the Properties are not now in whole or in part under lease
to any person, nor are there any equipment leases or service
contracts (other than those relating to Excluded Property or
those which can be cancelled upon sixty (60) days or less notice
without penalty) relating to the Properties to which Seller is a
party;
(n) The historical financial statements provided to Purchaser by
Seller are consistent with those internally prepared by Seller
and to Seller's knowledge are true, accurate and complete.
(o) To the Seller's knowledge, the Properties are suitable for
use and operation of a typical Applebee's restaurant.
(p) To the Seller's knowledge, no Property contains any latent
defect, construction structural design or engineering defect and
no state of repair exists which would in the aggregate, as to any
Property, cost more than $200,000 to correct or repair.
Any and all uses of the phrase, "TO SELLER'S ACTUAL KNOWLEDGE" or
other references to Seller's knowledge in this Agreement shall
mean the actual knowledge of Xxxxx X. Xxxxxxx (the "SELLER
KNOWLEDGE INDIVIDUAL") as to a fact at the time given. The
actual or constructive knowledge of any other individual or
entity shall not be imputed to the Seller Knowledge Individual.
Section 8.2. REPRESENTATIONS AND WARRANTIES BY PURCHASER.
Purchaser hereby represents and warrants to Seller as of the date
hereof that:
(a) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota;
(b) Purchaser has the legal right, power and authority to enter
into this Agreement and perform all its obligations hereunder,
and the execution and delivery of this Agreement and the
performance by Purchaser of its obligations hereunder, (x) has
been duly authorized, and (y) will not conflict with, or result
in a breach of, any of the terms, conditions and provisions of
its organizational and governance documents or any law, statute,
rule or regulation, or order, judgment, writ, injunction or
decree of any court or governmental instrumentality, or any
contract, agreement or instrument to which Purchaser is a party
or by which it is bound, or to which it or any portion of its
property is subject and (z) will not require the consent,
approval, authority or order of any court or governmental agency
that has not been previously obtained in writing and delivered to
Seller;
(c) Purchaser, either directly or through its shareholders or
affiliates, has sufficient capital or net worth to meet the
obligations of Purchaser under this Agreement, including payment
of the Purchase Price; and
(d) Neither Purchaser nor, to the best of Purchaser's knowledge,
any of Purchaser's shareholders, is an entity or person: (i)
that is listed in the Annex to, or is otherwise subject to the
provisions of Executive Order 13224 issued on September 24, 2001
("EO13224"); (ii) whose name appears on the United States
Treasury Department's Office of Foreign Assets Control ("OFAC")
most current list of "SPECIFICALLY DESIGNATED NATIONAL AND
BLOCKED PERSONS" (which list may be published from time to time
in various mediums including, but not limited to, the OFAC
website,
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/x00xxx.xxx);
(iii) who commits, threatens to commit or supports "terrorism,"
as that term is defined in EO13224; (iv) is subject to sanctions
of the United States government or is in violation of any
federal, state, municipal or local laws, statutes, codes,
ordinances, orders, decrees, rules or regulations relating to
terrorism or money laundering, including, without limitation,
EO13224 and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001; or (v) who is otherwise affiliated with any entity
or person listed above (any and all parties or persons described
in subsections (i) - (v) above are herein referred to as a
"PROHIBITED PERSON"). Purchaser covenants and agrees that
neither Purchaser nor any of its shareholders shall knowingly:
(A) conduct any business, nor engage in any transaction or
dealing, with any Prohibited Person, including, but not limited
to, the making or receiving of any contribution of funds, goods,
or services, to or for the benefit of a Prohibited Person; or (B)
engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in EO13224.
Section 8.3. ACKNOWLEDGMENTS OF PURCHASER. Purchaser
acknowledges and agrees for the benefit of Seller that:
(a) Except as otherwise expressly stated in this Agreement or in
any agreement or instrument executed and delivered by Seller to
Purchaser contemporaneously herewith or at the Closing,
including, by way of example, but not limited to representations
and warranties set forth in Section 8.1 of this Agreement
(hereinafter collectively referred to in this Section 8.3 as the
"SURVIVING REPRESENTATIONS"), Seller hereby expressly disclaims
any and all representations and warranties of any kind or
character, express or implied, written or oral, with respect to
the Properties, and Purchaser agrees to accept the Properties "AS
IS, WHERE IS, WITH ALL FAULTS". Without limiting the generality
of the preceding sentence or any other disclaimer set forth
herein, Seller and Purchaser hereby agree that, except for the
Surviving Representations, Seller has not made and is not making
any representations or warranties, express or implied, written or
oral, as to (a) the nature or condition, physical or otherwise,
of any Property or any aspect thereof, including, without
limitation, any warranties of habitability, suitability,
merchantability or fitness for a particular use or purpose, or
the absence of latent or other defects in any Property, (b) the
nature or quality of construction, structural design or
engineering of the improvements or the state of repair or lack of
repair of any of the improvements, (c) the quality of the labor
or materials included in the improvements, (d) any soil, surface
water or groundwater conditions, drainage conditions,
topographical features, access to public rights-of-way,
availability of utilities or other conditions or circumstances
which affect or may affect any Property or any use to which any
Property may be put, (e) any conditions which affect or may
affect any Property with respect to any particular purpose, use,
development potential or otherwise, (f) the area, size, shape,
configuration, location, capacity, quantity, quality, cash flow,
expenses or value of any Property or any part thereof, (g) the
nature or extent of title to any Property, or any easement,
servitude, right-of-way, possession, lien, encumbrance, license,
reservation, condition or otherwise that may affect title to any
Property, (h) any environmental, geological, structural, or other
condition or hazard or the absence thereof heretofore, now or
hereafter affecting in any manner any Property, including but not
limited to, the presence or absence of any Hazardous Substances
on, in, under, migrating to or from or adjacent to any Property,
(i) the compliance of any Property or the operation or use of any
Property with any applicable restrictive covenants, or with any
laws, ordinances or regulations of any governmental body
(including specifically, without limitation, any zoning laws or
regulations, any building codes, any Environmental Laws, and the
Americans with Disabilities Act of 1990, 42 U.S.C. 12101, et
seq.). The provisions of this Section 8.3 shall be binding on
Purchaser and shall survive the Closing.
(b) Purchaser has been given the opportunity to inspect the
Properties, the leases, contracts and other materials (including,
without limitation, title materials and financial reports)
relating to the Properties that Purchaser deemed necessary to
inspect and review in connection with the transaction
contemplated by this Agreement, and Purchaser has had the
opportunity to retain such environmental consultants, structural
engineers and other experts as it deemed necessary to inspect the
Properties and review such materials. Purchaser is relying on
its own investigation and the advice of its experts regarding the
Properties, and upon its review of leases, contracts, and other
materials, and not on any representations or warranties of Seller
(other than the Surviving Representations). Purchaser
acknowledges that Seller makes absolutely no representations or
warranties with respect to the accuracy or completeness of any
information, reports or other materials delivered to Purchaser
except as may be expressly set forth in the Surviving
Representations or elsewhere in this Agreement or in the
instruments executed and delivered at Closing.
(c) Anything contained in this Agreement to the contrary
notwithstanding, if a breach, inaccuracy, incompleteness or
nonfulfillment ("Defect") of any warranty, representation or
covenant of Seller or of any condition to Purchaser's obligations
hereunder, contained in this Agreement, occurs and such Defect is
known to Purchaser at or prior to the Closing, Purchaser's sole
remedy with respect thereto shall be either (x) to waive its
right to object to such Defect and cause the Closing to occur
without abatement, credit against or reduction of the Purchase
Price by any amount whatsoever, in which event Seller shall have
no further liability or responsibility to Purchaser with respect
to any such Defect or (y) to notify Seller in writing of such
Defect prior to the Closing Date and, at Purchaser's option,
either, (i) if such Defect is not cured by Seller prior to the
Closing Date, to terminate this Agreement in which case the
Deposit (together with any interest thereon) shall be returned to
Purchaser and Seller shall have no further liability to
Purchaser except by reason of such Defect, if applicable, as
provided in Section 13.2 or (ii) whether or not Seller undertakes
to cure such Defect, proceed to Closing without abatement, credit
against or reduction of the Purchase Price by any amount
whatsoever, in which event, Seller shall have no further
liability or responsibility to Purchaser with respect to any such
Defect.
Section 8.4. NO FINANCING CONTINGENCY. Purchaser acknowledges
and agrees that its obligations under this Agreement shall not be
subject to any financing contingency.
Section 8.5. DAMAGES FOR BREACH OF REPRESENTATIONS. In the
event of a material breach with respect to any representation or
warranty made by Seller or Purchaser under this Agreement, the
non-breaching party shall be entitled to pursue a claim with
respect to such breach if and only if (i) written notice of such
breach is given to the breaching party on or prior to the
expiration of the applicable Survival Period for such breach,
which notice must contain a reasonably detailed description of
the facts relating to the claimed breach and (ii) the liability
and losses arising out of such breach, when aggregated with all
other breaches, if any, of representations and warranties under
this Agreement, shall exceed Two Hundred Fifty Thousand Dollars
($250,000). For purposes of this Section 8.5, "SURVIVAL PERIOD"
shall mean a period of one (1) year commencing on the day
following the Closing Date. The provisions of this Section 8.5
shall survive the Closing. Seller and Purchaser acknowledge and
agree that, except to the extent any losses, costs or damages are
incurred by such party resulting from any fraudulent
misrepresentation by the other party, Purchaser's and Seller's
sole and exclusive remedy with respect to any and all claims
based upon, resulting from or arising out of the breach of any
representation or warranty of the other party contained in this
Agreement shall be pursuant to the provisions of this Article
VIII. All claims for damages shall be limited to actual damages
and shall not include lost profits or consequential damages
whether arising in contract, tort (including negligence and
strict liability), warranty, statute or otherwise.
ARTICLE IX
NOTICES
Section 9.1. NOTICES. All notices, demands, requests,
approvals or other communications ("NOTICES") required to be
given or which may be given hereunder shall be in writing and
shall be given by personal delivery with receipt acknowledged or
by United States registered or certified mail, return receipt
requested, postage prepaid, by Federal Express or other reputable
national overnight courier service or by facsimile transmission,
and shall be deemed given when received or refused at the
following addresses:
If to Seller: APPLE AMERICAN GROUP LLC
000 Xxxx Xxxxxx,
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
With copies to: Xxxxxx X. XxXxxx, Esq.
Xxxxx Xxxxxx Xxxxxxxx LLP
0000 0xx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
If to Purchaser: AEI Fund Management, Inc.
0000 Xxxxx Xxxxx Xxxxx
00 Xxxxxxx Xxxxxx Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
With copies to: Winthrop & Weinstine P.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
Each party may designate a change of address (or additional or
substitute parties for notice) by notice to the other party,
given at least fifteen (15) days before such change of address is
to become effective. The giving of any notice required hereunder
may be waived in writing by the party entitled to receive such
notice.
ARTICLE X
CONFIDENTIALITY
Section 10.1. CONFIDENTIALITY. Purchaser acknowledges and
agrees that until the Closing it shall be bound by all of the
terms and conditions of that certain confidentiality letter
agreement between AAG and AEI Fund Management, Inc. dated as of
February 27, 2006. Between the date hereof through and including
the Closing Date, Purchaser and Seller shall not (and shall each
use reasonable efforts to cause their respective Representatives,
including, without limitation, financial institutions not to)
disclose, make known, divulge, disseminate or communicate the
Purchase Price or any of the terms of this Agreement or this
transaction or any agreement, document or understanding pertinent
to the instant transaction without the consent of the other
party, except (i) as required by law, (ii) to their respective
Representatives involved in the transaction or their respective
businesses, (iii) to Purchaser's prospective lenders or
investors, (iv) to Seller's lender or investors, (v) to
Franchisor, or (vi) as necessary to enforce the provisions of
this Agreement or to pursue any claim or action arising
hereunder. Neither AAG nor Seller, on the one hand, nor
Purchaser, on the other hand, shall make any public
announcements, including, without limitation, any press releases,
pertaining in any way to this Agreement and documents or
transactions contemplated hereby without the prior consent of
Purchaser, Seller and AAG, except as required by law.
Notwithstanding the foregoing or any contrary agreement or
understanding, the parties (and each of their respective
employees, representatives or other agents) may disclose to any
and all persons, without limitation of any kind, the U.S. federal
income tax treatment and U.S. federal income tax structure of the
transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to
them relating to such U.S. federal income tax treatment and U.S.
federal income tax structure.
Section 10.2. SURVIVAL. The provisions of Section 10.1 shall
survive the termination of this Agreement.
ARTICLE XI
DAMAGE AND DESTRUCTION
Section 11.1. EFFECT OF DAMAGE. If all or any part of any
Property is damaged by fire or other casualty occurring following
the date hereof and prior to the Closing Date, whether or not
such damage affects a material part of any Property,
(a) if the estimated cost of repair or restoration with respect
to any one Property is less than or equal to Two Hundred Thousand
Dollars ($200,000) or twenty percent (20%) or less of the parking
spaces of any Property are damaged, neither party shall have the
right to terminate this Agreement and the parties shall
nonetheless consummate this transaction in accordance with this
Agreement, without any abatement of the Purchase Price or any
liability or obligation on the part of Seller by reason of said
destruction or damage and without any extension of the Closing
Date. In such event, Seller shall make a claim for and have the
right to collect any casualty insurance proceeds received under
the casualty insurance policies in effect with respect to the
Properties on account of said physical damage or destruction and
Seller shall promptly proceed to perform the requisite repairs
and rebuild the Building to substantially the same condition as
it existed prior to the occurrence of such fire or other
casualty, it being contemplated that insurance proceeds will be
assigned to Seller, and that Seller, will be responsible for the
amount of any deductible (but the completion of such repairs and
restoration shall not be in condition to Purchaser's obligation
to close so long as the Lease for such Property specifically
provides that the Tenant shall pay rent during the pendency of
such repairs and the Tenant is not otherwise able to terminate
the Lease by reason of such damage); and
(b) if the estimated cost of repair or restoration with respect
to any one (1) Property exceeds Two Hundred Thousand Dollars
($200,000) or more than twenty (20%) of the parking spaces for
any Property are destroyed (in either case, a "CASUALTY
PROPERTY"), Seller or Purchaser, shall have the option,
exercisable within thirty (30) days after the occurrence of such
fire or other casualty and such party's receipt of such factual
information regarding the casualty and availability of insurance
proceeds as is reasonably sufficient to enable such party to make
an informed decision about whether or not to proceed to Closing,
to eliminate such Casualty Property from the sale contemplated by
this Agreement in which event the Purchase Price shall be reduced
by the amount allocated to such Casualty Property on Schedule 4.3
attached hereto and this Agreement shall be deemed canceled and
of no further force or effect with respect to the Casualty
Property only, except for those rights and obligations expressly
stated to survive expiration or termination of this Agreement,
and neither party shall have any further rights or liabilities
against or to the other with respect to the Casualty Property.
Any Casualty Property eliminated by Purchaser from the sale
contemplated hereunder shall not be deemed a Due Diligence
Default for purposes of Section 4.7 of this Agreement. If a fire
or other casualty described in this subsection (b) shall occur
and neither party shall have elected to eliminate such Casualty
Property from the transaction contemplated by this Agreement,
then in such event, irrespective of the cost of repair or
restoration exceeding Two Hundred Thousand Dollars ($200,000) or
whether more than twenty percent (20%) of the parking spaces for
any Property are destroyed, the Closing Date with respect to such
Casualty Property (but not the other Properties) shall be
adjourned for a period of time reasonably determined to be
necessary by Seller to make the repair or restoration, but in any
event not later than November 30, 2006.
Section 11.2. ESTIMATES. The estimated cost to repair and/or
restore contemplated in Section 11.1 above shall be established
by estimates obtained by Seller from independent contractors,
subject to Purchaser's review and reasonable approval of the same
and the provisions of Section 11.3 below.
Section 11.3. DISPUTES. Any disputes under this Article XI as
to the cost of repair or restoration shall be resolved by
expedited arbitration before a single arbitrator acceptable to
both Seller and Purchaser in their reasonable judgment in
accordance with the expedited commercial arbitration rules then
obtaining of the American Arbitration Association.
ARTICLE XII
CONDEMNATION
Section 12.1. EFFECT OF CONDEMNATION. If, prior to the Closing
Date, any part of any Property is taken, or if Seller shall
receive an official notice from any governmental authority having
eminent domain power over any of the Properties of its intention
to take, by eminent domain proceeding, all or any portion of any
of the Properties (in either case, a "Taking"), then:
(a) if such Taking with respect to any Property is less than or
equal to Two Hundred Thousand Dollars ($200,000), does not affect
more than twenty percent (20%) of the parking spaces of any
Property and otherwise would not allow for termination of the
Lease or reduction, abatement or offset of rent under the Lease
if such Taking occurred during the Term of the Lease, does not
impair Seller's ability to conduct its business at the
Properties, and will not result in the Property violating any
federal, state or local law, regulation or ordinance, neither
party shall have any right to terminate this Agreement, and the
parties shall nonetheless consummate this transaction in
accordance with this Agreement, without any abatement of the
Purchase Price or any liability or obligation on the part of
Seller by reason of such Taking and without any extension of the
Closing Date; PROVIDED, HOWEVER, that Purchaser and Seller shall
be entitled to make a claim for any award or other proceeds of
such Taking , and Seller may receive and keep the portion of such
proceeds or award necessary to restore the Property in order to
operate the Seller's business on the Property. The net proceeds
of any such award after such restoration shall be delivered to
Purchaser; and
(b) if such Taking with respect to any Property is more than Two
Hundred Thousand Dollars ($200,000), affects more than twenty
percent (20%) of the parking spaces of any Property, would allow
for termination of the Lease if such taking occurred during the
Term of the Lease or reduction, abatement or offset of rent under
the Lease, or impairs Seller's ability to operate its business at
any Property or results in the Property violating any federal,
state or local law, regulation or ordinance (a "TAKING
PROPERTY"), either Seller or Purchaser, shall have the option,
exercisable within thirty (30) days after such Taking or notice
that such Taking will occur and such party's receipt of such
factual information regarding the Taking and the availability of
awards or other proceeds of such Taking as is reasonably
sufficient to enable such party to make an informed decision
about whether or not to proceed to Closing, to exclude such
Taking Property from the sale contemplated by this Agreement in
which case the Purchase Price shall be reduced by the amount
allocated to such Taking Property on Schedule 4.3 attached hereto
and this Agreement shall be deemed canceled and of no further
force or effect with respect to the Taking Property only, except
for those rights and obligations expressly stated to survive
expiration or termination of this Agreement, and neither party
shall have any further rights or liabilities against or to the
other with respect to the Taking Property. Any Taking Property
eliminated by Purchaser from the sale contemplated hereunder
shall not be deemed a Due Diligence Default for purposes of
Section 4.7 of this Agreement. If a Taking described in this
subsection (b) shall occur and neither party shall have elected
to eliminate such Taking Property from the transaction
contemplated by this Agreement, then Purchaser and Seller shall
consummate this transaction in accordance with this Agreement,
without any abatement of the Purchase Price or any liability or
obligation on the part of Seller by reason of such Taking;
provided, however, that Seller may receive and keep the portion
of any award or other proceeds of such Taking necessary to
restore the Property in order to operate the Seller's business
thereon, the net proceeds of any such award after such
restoration shall be delivered to Purchaser, and the Closing Date
with respect to such Property (but not the other Properties)
shall be adjourned for a period of time reasonably determined to
be necessary by Seller to make the repair or restoration, but in
no event later than November 30, 2006.
(c) Any disputes under this ARTICLE XII as to whether the Taking
is less than or equal to Two Hundred Thousand Dollars ($200,000),
affects more than twenty percent (20%) of the Parking Spaces for
any Property or impairs Seller's ability to conduct its business
at such Property shall be resolved by expedited arbitration
before a single arbitrator acceptable to both Seller and
Purchaser in their reasonable judgment in accordance with the
expedited commercial arbitration rules then obtaining of the
American Arbitration Association.
ARTICLE XIII
DEFAULT BY PURCHASER OR SELLER
Section 13.1. PURCHASER DEFAULT. If Purchaser shall default in
the payment of the Purchase Price or if Purchaser shall default
in the performance of any of its other obligations to be
performed on the Closing Date, Seller shall have the right, as
its sole and exclusive remedy by reason thereof (in lieu of
prosecuting an action for damages or proceeding with any other
legal course of conduct, the right to bring such actions or
proceedings being expressly and voluntarily waived by Seller, to
the extent legally permissible, following and upon advice of its
counsel), to terminate this Agreement and to retain the Deposit
(and any interest earned thereon).
Section 13.2. SELLER DEFAULT. If Seller shall default in any of
its obligations to be performed on the Closing Date, Purchaser,
as its sole remedies by reason thereof (in lieu of prosecuting an
action for damages or proceeding with any other legal course of
conduct, the right to bring such actions or proceedings being
expressly and voluntarily waived by Purchaser, to the extent
legally permissible, following and upon advice of its counsel),
shall have the right: (i) to seek to obtain specific performance
of Seller's obligations hereunder, provided that any action for
specific performance shall be commenced within one hundred and
twenty (120) days after such default, and if Purchaser prevails
thereunder, Seller shall reimburse Purchaser for all reasonable
legal fees, court costs and all other reasonable costs of such
action; or (ii) to terminate this Agreement and receive a return
of the Deposit (together with any interest earned thereon), in
which event Seller shall reimburse Purchaser on demand for all of
Purchaser's out-of-pocket costs and expenses (including, without
limitation, the cost of third-party reports, travel expenses and
reasonable attorneys' fees and expenses) reasonably incurred in
connection with this Agreement (but in no event shall the amount
of such reimbursement exceed Fifty Thousand Dollars ($50,000) in
the aggregate), it being understood that if Purchaser fails to
commence an action for specific performance within one hundred
and twenty (120) days after such default, Purchaser shall be
deemed to have elected the remedy under this subpart (ii). If
Purchaser elects or is deemed to have elected the remedy set
forth in subpart (ii) of the immediately preceding sentence, then
upon return and delivery of the Deposit, this Agreement shall
terminate and neither party hereto shall have any further rights
or obligations hereunder, except for those rights and obligations
expressly stated to survive expiration or termination of this
Agreement.
Section 13.3. SURVIVAL. The provisions of this ARTICLE XIII
shall survive the termination hereof.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1. SEVERABILITY. Each part of this Agreement is
intended to be severable. If any term, covenant, condition or
provision hereof is unlawful, invalid, or unenforceable for any
reason whatsoever, this Agreement shall be construed without such
term, covenant, condition or provision.
Section 14.2. RIGHTS CUMULATIVE; WAIVERS. The rights of each of
the parties under this Agreement are cumulative and may be
exercised as often as any party considers appropriate. The
rights of any of the parties hereunder shall not be capable of
being waived or varied otherwise than by an express waiver or
variation in writing executed by all of the parties hereto.
Failure to exercise or any delay in exercising any of such rights
also shall not operate as a waiver or variation of that or any
other such right. Defective or partial exercise of any of such
rights shall not preclude any other or further exercise of that
or any other such right. No act or course of conduct or
negotiation on the part of any party shall in any way preclude
such party from exercising any such right or constitute a
suspension or any variation of any such right.
Section 14.3. HEADINGS. The headings contained in this
Agreement are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or any provision
hereof.
Section 14.4. CONSTRUCTION. Unless the context otherwise
requires, singular nouns and pronouns, when used herein, shall be
deemed to include the plurals of such nouns or pronouns and
pronouns of one gender shall be deemed to include the equivalent
pronouns of the other gender.
Section 14.5. ASSIGNMENT. Purchaser may assign its rights to
purchase any Property under this Agreement to one or more persons
or entities controlling, controlled by or under common control
with, or managed by, Purchaser or AEI Fund Management, Inc., and
may delegate its rights to purchase any Property hereunder to any
such persons or entities. Except as provided in the immediately
preceding sentence, Purchaser shall not assign its rights under
this Agreement to any other party without the prior written
consent of Seller. No assignment hereunder shall release
Purchaser from its obligations under this Agreement.
Section 14.6. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be an original,
and all of which taken together shall constitute one and the same
Agreement.
Section 14.7. GOVERNING LAW. This Agreement shall be construed,
and the rights and obligations of Seller and Purchaser hereunder
shall be determined, in accordance with the laws of the State of
Indiana.
Section 14.8. JURISDICTION; VENUE. For the purposes of any
suit, action or proceeding involving this Agreement, the parties
hereto hereby expressly submit to the jurisdiction of all federal
and state courts sitting in Indianapolis, Indiana, and consent
that any order, process, notice of motion or other application to
or by any such court or a judge thereof may be served within or
without such court's jurisdiction by registered mail or by
personal service, provided that a reasonable time for appearance
is allowed, and the parties hereto agree that such court shall
have exclusive jurisdiction over any such suit, action or
proceeding commenced under this Agreement. Each party hereby
irrevocably waives any objection that it may have now or
hereafter to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought
in any federal or state court sitting in Indianapolis, Indiana,
and hereby further irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
Section 14.9. WAIVER OF TRIAL BY JURY. The parties hereto waive
any right to a trial by jury of any dispute arising under or
relating to this Agreement.
Section 14.10. BROKERS AND ADVISORS. Seller and Purchaser each
warrants and represents to the other that it has not dealt or
negotiated with any broker in connection with the sale of the
Properties as provided by this Agreement. Seller and Purchaser
each hereby agrees to indemnify, defend and hold the other
harmless from all loss, cost, damage or expense (including
reasonable attorneys' fees) incurred by the other as a result of
any claim arising out of the acts of the indemnifying party (or
others on its behalf) for a commission, finder's fee or similar
compensation made by any broker, finder or any party who claims
to have dealt with such party. The provisions of this Section
14.10 shall survive the Closing and the termination of this
Agreement.
Section 14.11. INTEGRATION. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to
the specific matters agreed to herein and supersedes all prior
agreements or understandings between the parties with respect to
the matters contained herein. The parties hereto acknowledge
that no oral or other agreements, understandings, representations
or warranties exist with respect to this Agreement or with
respect to the obligations of the parties hereto under this
Agreement, except those specifically set forth in this Agreement.
Section 14.12. AMENDMENTS. This Agreement may not be changed,
modified or terminated, except by an instrument in writing signed
by the parties hereto.
Section 14.13. FURTHER ASSURANCES; COOPERATION. The parties will
execute, acknowledge and deliver all and every such further acts,
deeds, conveyances, assignments, notices, transfers and
assurances as may be reasonably required for the better assuring,
conveying, assigning, transferring and confirming unto Purchaser
the Properties and for carrying out the intentions or
facilitating the consummation of the transactions contemplated by
this Agreement. In furtherance thereof, the parties hereto shall
cooperate with each other to effectuate the transactions
contemplated by this Agreement and to minimize transaction costs.
The provisions of this Section 14.13 shall survive the Closing.
Section 14.14. NO RECORDING. Neither this Agreement nor any
memorandum hereof may be recorded without first obtaining
Seller's prior written consent thereto.
Section 14.15. TRANSACTION CHARACTERIZATION. (a) It is the
intent of the parties that the conveyance of the Properties to
Purchaser be an absolute conveyance in effect as well as form,
and the instruments of conveyance to be delivered at Closing are
not intended to serve or operate as a mortgage, equitable
mortgage, security agreement, trust conveyance or financing or
trust arrangement of any kind, nor as a preference or fraudulent
conveyance against any creditors of Seller. After the execution
and delivery of the instruments of conveyance described in
Section 5.2, Seller will have no legal or equitable interest or
any other claim or interest in the Properties other than as set
forth in the Lease. Furthermore, the parties intend for the
Lease to be a true operating lease and not a transaction creating
a financing lease, capital lease, equitable mortgage, mortgage,
deed of trust, security interest or other financing arrangement,
and the economic realities of the Lease are those of a true
lease.
(b) Notwithstanding the existence of the Lease, none of the
parties shall contest the validity, enforceability or
characterization of the sale and purchase of the Properties by
Purchaser pursuant to this Agreement as an absolute conveyance,
and both parties shall take reasonable action to support the
intent expressed herein that the purchase of the Properties by
Purchaser pursuant to this Agreement provides for an absolute
conveyance and does not create a joint venture, partnership,
equitable mortgage, trust, financing device or arrangement,
security interest or the like, if, and to the extent that, any
challenge occurs. The provisions of this Section 14.15 shall
survive the Closing.
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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first referenced above.
SELLER:
APPLE INDIANA II LLC APPLE PENNSYLVANIA LLC
By:Apple American Group LLC, By:Apple American Group LLC,
its Managing Member its Managing Member
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title: EVP/CFO Title: EVP/CFO
APPLE WASHINGTON LLC B.T. WOODLIPP, INC.
By:Apple American Group LLC,
its Managing Member
By: /s/ Xxxxx Xxxxxxx By:/s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title: EVP/CFO Title: EVP/CFO
PURCHASER:
AEI FUND MANAGEMENT, INC.
By:/s/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X Xxxxxxx
Title: President
EXHIBIT A
LEGAL DESCRIPTIONS
X. XXXXXXXXXX
PARCEL 1:
Part of the East Half of the Southwest Quarter of Section 1,
Township 15 North, Range 4 East of the Second Principal Meridian,
Xxxxxx Township, Xxxxxx County, Indiana, more particularly
described as follows:
Commencing at a brass plug marking the intersection of the
centerline of Washington Street (U.S. 40) with the West line of
the of the East Half of the Southwest Quarter of Xxxxxxx 0,
Xxxxxxxx 00 Xxxxx, Xxxxx 0 Xxxx; thence on said centerline North
86 degrees 26 minutes 34 seconds East (assumed bearing) 675.10
feet to an angle point in said centerline; thence continuing on
said centerline North 86 degrees 27 minutes 34 seconds East 34.90
feet; thence deflecting 90 degrees 00 minutes 00 seconds right
South 03 degrees 32 minutes 26 seconds East 40.00 feet to the
South right-of-way line of said Washington Street per I.S.H.C.
Federal Aid Project No. 13, Sec. F and A3 (1938) Sheet No. 13,
being the POINT OF BEGINNING of the herein described real estate;
thence on said 40-foot right-of-way line North 86 degrees 27
minutes 34 seconds East 178.26 feet to the East line of land
described in a deed to Venture Stores, Inc., recorded as
Instrument No. 92-37757 in the Office of the Recorder of Xxxxxx
County, Indiana; thence on the East line of said land, parallel
with the West line of said East Half South 00 degrees 00 minutes
50 seconds East 254.88 feet; thence North 89 degrees 58 minutes
36 seconds West 206.33 feet to the point of curvature of a non-
tangent curve concave Northeasterly, having a radius of 39.99
feet and a central angle of 78 degrees 11 minutes 50 seconds;
thence Northwesterly on said curve, an arc distance of 54.58 feet
(said arc being subtended by a chord which bears North 49 degrees
30 minutes 04 seconds West 50.44 feet) to a non-tangent line;
thence North 00 degrees 03 minutes 17 seconds East 152.34 feet;
thence parallel with said right-of-way line North 86 degrees 26
minutes 34 seconds East 19.73 feet; thence parallel with the West
line of said East Half North 00 degrees 00 minutes 50 seconds
West 39.32 feet to the South right-of-way line of said Washington
Street per Indiana State Highway Department Project No. 246 (23)
1955, Sheet 10; thence on said right-of-way line North 86 degrees
26 minutes 34 seconds East 13.02 feet to an angle point; thence
on said right-of way line North 86 degrees 27 minutes 34 seconds
East 34.89 feet; thence North 03 degrees 32 minutes 26 seconds
West 15.00 feet to the POINT OF BEGINNING.
PARCEL 2:
A non-exclusive easement for ingress and egress as set out in an
agreement recorded September 27, 1996 as Instrument No. 96-134926
in the Office of the Recorder of Xxxxxx County, Indiana,
described as follows:
A strip of ground over a part of the East Half of the Southwest
Quarter of Section 1, Township 15 North, Range 4 East of the
Second Principal Meridian, Xxxxxx Township, Xxxxxx County,
Indiana, more particularly described as follows:
Commencing at a brass plug marking the intersection of the
centerline of Washington Street (U.S. 40) with the West line of
the East Half of the Southwest Quarter of Section 1, Township 15
North, Range 4 East; thence on said centerline an assumed bearing
of North 86 degrees 26 minutes 34 seconds East 595.76 feet;
thence South 00 degrees 03 minutes 17 seconds West 55.11 feet to
a point on the Southerly right-of-way line of Washington Street
as established on I.S.H.C. Project No. 13, Sections F and A3,
(1938), Sheet 13, said point being the POINT OF BEGINNING of the
herein described real estate; thence on said right-of-way line
North 86 degrees 26 minutes 34 seconds East 50.10 feet; thence
South 00 degrees 03 minutes 17 seconds West 191.87 feet to the
point of curvature of a non-tangent curve concave Northeasterly,
having a radius of 39.99 feet and a central angle of 78 degrees
11 minutes 50 seconds; thence Southeasterly on said curve, an arc
distance of 54.58 feet (said arc being subtended by a chord which
bears South 49 degrees 30 minutes 04 seconds East 50.44 feet) to
a non-tangent line; thence South 89 degrees 58 minutes 36 seconds
East 206.33 feet to the East line of said land described in a
deed to Venture Stores, Incorporated, recorded in Instrument No.
92-37757 in the Office of the Recorder of Xxxxxx County, Indiana;
thence on the East line of said land South 00 degrees 00 minutes
50 seconds East 31.00 feet; thence North 89 degrees 58 minutes 36
seconds West 294.74 feet; thence North 00 degrees 03 minutes 17
seconds West 267.57 feet to said right-of-way line and the POINT
OF BEGINNING.
PARCEL 3:
A non-exclusive easement for ingress and egress as set out in an
agreement recorded April 1, 1992, as Instrument No. 92-37761, in
the Office of the Recorder of Xxxxxx County, Indiana.
PARCEL 4:
Non-exclusive easements as set out in that certain Outlot,
Construction, Operation, Maintenance and Reciprocal Easement
Agreement recorded September 27, 1996, as Instrument No. 96-
134926, in the Office of the Recorder of Xxxxxx County, Indiana.
FISHERS
PARCEL 1:
Out Lot "D" of the Replat of Lots 1 and 2 of the Replat of Block
"L" in North By Northeast Business Park - Section One, as per
replat thereof, recorded as Instrument No 95-58716, in Plat
Cabinet Xx. 0, Xxxxx Xx. 000, in the Office of the Recorder of
Xxxxxxxx County, Indiana.
PARCEL 2:
A non-exclusive easement for access as set forth and described in
Access Easement, recorded November 8,1995 as Instrument No. 95-
60012 in the Office of the Recorder of Xxxxxxxx County, Indiana.
PARCEL 3:
Non-exclusive easements for access, utilities and drainage as
created in a Declaration of Covenants And Restrictions For North
By Northeast Business Park recorded May 30, 1989 as Instrument
No. 89-10815, as amended by First Amendment recorded July 23,1997
as Instrument No. 97-29691 as modified by the Modification
recorded September 10, 1997 as Instrument No. 97-37871 in the
Office of the Recorder of Xxxxxxxx County, Indiana.
