EXHIBIT
O
ACQUISITION FRAMEWORK AGREEMENT
BETWEEN
CBCI INCOME AND GROWTH FUND, LLC
AND
CBCI ACQUISITIONS I, LLC
TABLE OF CONTENTS
1 DEFINITIONS AND INTERPRETATIONS O-1
1.1 DEFINITIONS O-1
1.2 INTERPRETATION O-4
2 PROSPECTIVE ACQUISITIONS AND MODIFICATION O-4
2.1 MODIFICATION O-4
2.2 GENERAL PROPOSALS O-5
2.3 ACQUISITION PROCESS O-5
2.3.2 COMPLETION OF PRELIMINARY INVESTIGATION O-5
2.4 TITLE TO PRODUCT O-5
2.5 PRELIMINARY REPORTS O-6
2.6 FINAL FEASIBILITY STUDY O-6
2.7 ADDITIONAL INFORMATION O-7
2.8 COST ESTIMATES O-7
2.9 VERIFICATION BY COMPANY REPRESENTATIVE O-7
2.10 SELECTION OF COMPANY REPRESENTATIVE O-7
2.11 COMPANY REPRESENTATIVE'S COSTS O-8
2.12 COMPANY REVIEW OF FINAL FEASIBILITY STUDY O-8
2.13 ACQUISITION MEMBER FEES O-8
2.14 LIMITATION OF LIABILITY O-9
2.15 CONFIDENTIAL INFORMATION O-9
3 COMPLETION OF ACQUISITION PROCESS O-9
3.1 ACQUISITION BY ACQUISITION MEMBER O-9
3.1.1 CONTRIBUTION OF PROPERTY BY ACQUISITION MEMBER O-9
3.1.2 DETERMINATION OF FAIR MARKET VALUE O-10
3.2 EXCLUSIVITY O-10
4 PAYMENTS O-10
4.1 PAYMENTS TO ACQUISITION MEMBER O-10
4.1.1 PAYMENT FOR SERVICES O-10
4.1.2 COMPANY ELECTION TO DISCONTINUE ACQUISITION PROCESS O-11
5 TERMINATION BY COMPANY O-11
5.1 TERM O-11
5.2 NON-CURABLE TERMINATING EVENTS O-11
5.3 CURABLE DEFAULTS O-11
5.4 OTHER TERMINATION RIGHTS OF COMPANY O-12
5.4.1 MINIMUM PARTICIPATION IN OWNERSHIP OF COMPANY O-13
5.4.2 FORECLOSURE O-13
5.5 RIGHTS AND OBLIGATIONS AFTER COMPANY TERMINATION O-13
5.5.1 INCOMPLETE SERVICES O-13
5.5.2 ASSIGNMENT OF AGREEMENTS O-13
5.5.3 DELIVERY OF DOCUMENTS O-13
5.5.4 RELEASE OF COMPANY O-13
5.6 TERMINATION AS TO SPECIFIC PROSPECTIVE ACQUISITION O-14
6 TERMINATION BY ACQUISITION MEMBER O-14
6.1 COMPANY DEFAULT O-14
6.2 RIGHTS AND OBLIGATIONS AFTER ACQUISITION MEMBER'S TERMINATION. O-15
7 TERMINATION FOR REASONS OTHER THAN DEFAULT O-15
7.1 OTHER TERMINATION PROCEDURES O-15
7.1.1 ASSIGNMENT OF THIRD PARTY AGREEMENTS O-15
7.1.2 STATEMENT OF ACCOUNT O-16
7.1.3 RELEASE FROM EXCLUSIVITY O-16
7.2 DELIVERY OF DOCUMENTS O-16
7.3 ADDITIONAL INFORMATION O-16
7.4 PAYMENT O-16
8 PERFORMANCE OF OBLIGATIONS; ASSIGNMENT O-16
8.1 TRANSFER BY ACQUISITION MEMBER TO AFFILIATES O-16
8.2 CONTRACTORS O-17
9 NOTICES O-17
10 REPRESENTATIONS AND WARRANTIES O-17
10.1 ACQUISITION MEMBER REPRESENTATIONS AND WARRANTIES O-17
10.2 COMPANY REPRESENTATIONS AND WARRANTIES O-18
11 GENERAL PROVISIONS O-18
11.1 GOVERNING LAW AND JURISDICTION O-18
11.2 PRONOUNS O-18
11.3 REFERENCES IN THIS AGREEMENT O-19
11.4 HEADINGS O-19
11.5 BINDING EFFECT O-19
11.6 COUNTERPARTS O-19
11.7 AMENDMENTS O-19
11.8 SEVERABILITY O-19
11.9 WAIVER O-19
11.10 NO THIRD PARTY BENEFICIARY O-19
11.11 INDEMNITIES O-20
11.11.1 INDEMNIFICATION OF COMPANY O-20
11.11.2 INDEMNIFICATION OF ACQUISITION MEMBER O-20
11.12 ATTORNEYS' FEES O-21
11.12.1 PREPARATION OF THIS AGREEMENT O-21
11.12.2 JUDICIAL ACTION OR LITIGATION O-21
11.13 CUMULATIVE RIGHTS O-21
ACQUISITION FRAMEWORK AGREEMENT
THIS ACQUISITION FRAMEWORK AGREEMENT {"Agreement"}, is made and entered into
as of November 20, 2002 by and between CBCI Income and Growth Fund, LLC, a
Minnesota limited liability company {"Company"}, and CBCI Acquisitions
I, LLC, a Minnesota limited liability company {"Acquisition Member"}.
WITNESSETH:
WHEREAS, Company is in the process of offering up to $40,000,000 worth of its
equity securities for sale to the general public, the proceeds of which will
be used for the purpose of acquiring a portfolio of income-producing
properties (either directly or indirectly through a new joint venture or
partnership in which Company or any Affiliate of Company becomes the managing
member or partner, hereinafter referred to as a "Joint Venture"); and,
WHEREAS, Acquisition Member is a member in good standing of Company; and
WHEREAS, Company and Acquisition Member desire to enter into this Agreement
to provide that (a) when Company decides to pursue any Prospective
Acquisition or to perform any pre-acquisition work relating to a Prospective
Acquisition, Acquisition Member will be appointed to carry out the
Acquisition Process; and (b) when any Joint Venture decides to pursue any
Prospective Acquisition or to perform any pre-acquisition work relating to a
potential Prospective Acquisition, Company will use its best efforts to cause
Acquisition Member to be appointed as its representative to carry out the
Acquisition Process.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, it is hereby agreed as
follows:
1 DEFINITIONS AND INTERPRETATIONS
1.1 DEFINITIONS
As used in this Agreement the following words or expressions shall have the
meaning respectively assigned to them.
"ACQUISITION PROCESS" means the process of identifying properties to be
acquired, negotiating the terms and conditions of purchase of such property,
preparing capital budgets, preparing feasibility studies, reviewing leases,
plans, specifications, schematic designs, and other similar documents,
preparing and submitting applications and negotiating consents and approvals
from regulatory authorities and other third parties (including Occupants),
negotiating or re-negotiating leases, determining the need for Modifications,
and, finally, the purchasing of a Prospective Acquisition by Acquisition
Member.
"AFFILIATE" means (i) any person directly or indirectly controlling,
controlled by or under common control with another person; (ii) any person
owning or controlling 10% or more of the outstanding voting securities of
such other person; (iii) any officer, director or partner of such person; and
(iv) if such other person is an officer, director or partner, any such
company for which such person acts in such capacity.
"ASSET MANAGER" means CBCI Fund Management I, Inc., a Minnesota corporation
and its permitted successors and assigns under the Asset Management
Agreement.
"ASSET MANAGEMENT AGREEMENT" means that certain Asset Management Agreement,
dated as of October 31, 2002 between Company and Asset Manager, as the same
may be amended from time to time.
"APPROVED BUDGET" means the budget for any Prospective Acquisition or
Services (including the Purchase Price of any property to be acquired), as
the context requires, and any subsequent revisions of those budgets, approved
by Company, Joint Venture or Company Representative hereunder from time to
time.
"BANKRUPTCY" with respect to any Person means the occurrence of any of the
following events:
(a) If such Person shall file a voluntary petition in bankruptcy or shall
be adjudicated a bankrupt or insolvent, shall file any petition or
answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself
under the present or any future Federal bankruptcy act or any other
present or future applicable Federal, state or other statute or law
relating to bankruptcy, insolvency, or other relief for debtors, or
shall seek or consent to the appointment of any trustee, receiver,
conservator or liquidator of such Person of all, or substantially all
of, its property; or
(b) If a court of competent jurisdiction shall enter an order, judgment or
decree approving a petition filed against such Person seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the present or any future Federal
bankruptcy act, or any other present or future Federal, state or other
statute or law relating to bankruptcy, insolvency, or other relief for
debtors, and such order, judgment or decree shall remain unvacated and
unstayed for a period of ninety (90) days from the date of entry
thereof, or any trustee, receiver, conservator or liquidator of such
Person or of all or substantially all of its property shall be
appointed without the consent of such Person and such appointment
shall remain unvacated and unstayed for a period of ninety (90) days,
or if such Person shall file an answer admitting the material
allegations of a petition filed against it in any bankruptcy,
reorganization or insolvency proceeding; or
(c) If such Person shall admit to the others in writing its inability to
pay its debts as they mature; or
(d) If such Person shall make a general assignment for the benefit of
creditors or take any other similar action for the protection or
benefit of creditors; or
(e) If any assets of such Person are attached, seized or subjected to a
garnishment or other action by a creditor of such Person seeking to
realize upon a judgment against such Person, and such attachment,
seizure, garnishment or other action is not vacated, stayed or
otherwise resolved within ninety (90) days thereafter.
"BUSINESS DAY" means a day which is not a Saturday, Sunday or legally
recognized public holiday in the United States.
"CCRCI" means the Company Computed REIT Capitalization Index. CCRCI is
determined from information reported each quarter in the 10-Q reports of
certain publicly traded real estate investment trusts ("REITS"), as selected
by the Company from time to time, and is computed by dividing the annualized
amount of Funds From Operations (as that term is defined by the National
Association Of Real Estate Investment Trusts) reported by such REITS during
the most recent quarter by the total amount of real estate assets reported by
such REITS, weighted by the number of days such real estate assets were
actually held by such REITS during the quarter.
"COMPANY" means CBCI Income and Growth Fund, LLC, a Minnesota limited
liability company and any permitted successor or assign under the terms of
this Agreement. To the extent any Prospective Acquisition is sought by a
Joint Venture, Company shall be deemed authorized to act on behalf of such
Joint Venture in granting all approvals hereunder. For purposes of granting
any approvals or consents under this Agreement, Company shall act through its
Managing Member or Company Representative.
"COST ESTIMATES" means fully detailed estimates of all costs to be incurred
by Company in connection with the provision of Services by Acquisition Member
hereunder.
"FINAL FEASIBILITY STUDY" means the report produced by Acquisition Member
when the investigation of any Prospective Acquisition by Acquisition Member
pursuant to Section 2.6 has been completed to the extent necessary to enable
Company or any Joint Venture to fully assess the financial feasibility of,
and the construction risks relating to, the Prospective Acquisition.
"MANAGING MEMBER" means CBCI Fund Management I, Inc., a Minnesota
corporation, and its permitted successors and assigns.
"OCCUPANT" means any Person using or in possession of any portion of a
Prospective Acquisition from time to time under a lease with the current
owner (or owner's predecessor in title) of the Prospective Acquisition
including any Person using or in possession of a portion of the Prospective
Acquisition on a temporary basis.
"COMPANY REPRESENTATIVE" means a representative of the Company appointed
pursuant to Section 2.9. If Company has not appointed a representative
pursuant to Section 2.9, all references to "Company Representative" contained
in this Agreement shall be deemed to refer to Company or Company's Managing
Member.
"MODIFICATION" means work of any description related to any particular
Prospective Acquisition including any development, design, architectural,
engineering, consulting and construction services that are subject to the
provisions of Article 2. Modification shall not include any items
constituting normal maintenance and repair.
"PERSON" means an individual, partnership, joint venture, limited liability
company, trust, unincorporated association or other entity or association.
"PROPERTY" or "PROPERTIES" means any Prospective Acquisition purchased by
Acquisition Member at the bequest of Company pursuant to the Acquisition
Process.
"PROSPECTIVE ACQUISITION" means a property, whether existing or under
development, identified by Company or Acquisition Member and considered, on a
preliminary basis, to meet the investment objectives and policies of the
Company as set forth in the Company's Prospectus dated xxxxx, 2003, and which
properties may require Modification.
"PRIME RATE" means the rate of interest announced by the Wall Street Journal
from time to time as its "prime" rate, or if no such rate is announced, then
the rate charged to the best corporate customers for demand loans.
"PROJECT PRICE" with respect to any Prospective Acquisition means the costs
incurred to acquire the Prospective Acquisition pursuant to the Acquisition
Process.
"SERVICES" means any one or more of the services that Acquisition Member is
obligated to provide under this Agreement including, without limitation,
preparation of preliminary budgets, plans, construction schedules and
feasibility studies, design and architectural services (including the
preparation of drawings, plans and specifications, schematic designs and
similar documents), preparation and negotiation of applications or requests
for consents or approvals from regulatory authorities and other third parties
(including any required approvals of existing Occupants) and, if appropriate,
the negotiation or re-negotiation of leases with Occupants or proposed
Occupants of any Prospective Acquisition.
1.2 Interpretation
In this Agreement, unless a contrary intention is expressly provided:
(a) A reference to this Agreement or another instrument includes any
modification or replacement of them;
(b) A reference to a statute, ordinance, code or other law includes
regulations under it and consolidations, amendments, re-enactments or
replacements of any of them;
(c) The singular includes the plural and vice versa;
(d) Where under any provision of this Agreement except ARTICLES 5 and 6
and Section 7.4, any notice is to be given or any other act, matter or
thing is to be done in the stated period of days only Business Days
shall be counted, and where anything is to be done on a day which is a
non-Business Day then that thing will be deemed to be required to be
done on the next succeeding Business Day; and
(e) The word "including" where used in this Agreement shall be deemed
followed by the words "without limitation" if not already followed by
those words.
2 PROSPECTIVE ACQUISITIONS AND MODIFICATION
2.1 Modification
Company and Acquisition acknowledge that it is desirable to remodel and
refurbish Prospective Acquisitions in order to maximize investment returns
and maintain quality and appearance standards and, accordingly, it may be
appropriate to consider the advisability of performing a Modification.
2.2 General Proposals
From time to time during the term of this Agreement, Acquisition Member may
make proposals and recommendations to Company regarding a Prospective
Acquisition. In addition, Company may from time to time request Acquisition
Member to evaluate a Prospective Acquisition. Company shall not be obligated
to reimburse Acquisition Member for any costs in connection with the
preparation of any proposal relating to any Prospective Acquisition unless
Company or Company Representative has given its consent to an Approved Budget
under Section 2.3 for the Services in connection with any such proposal (and
then only to the extent provided in the Approved Budget).
2.3 Acquisition Process
2.3.1 Preliminary Investigation
At the time Acquisition Member shall propose to commence any Acquisition
Process for a Prospective Acquisition, or promptly after its receipt of a
request from Company to evaluate a Prospective Acquisition, Acquisition
Member shall submit a budget itemizing the estimated costs to undertake
preliminary investigations relative to such Prospective Acquisition. The
budget to be submitted by Acquisition Member shall be reasonable in both form
and content, shall be reasonable under all of the circumstances and shall
contain Cost Estimates with respect to such preliminary investigations. It is
acknowledged that any Approved Budget for, and the scope of, the preliminary
investigations will be reviewed from time to time with a view to updating
their content to reflect such changes as are appropriate under the
circumstances. Any such review (including a change in the scope of the
preliminary investigations), whether initiated by Company or Acquisition
Member, shall be deemed to be a revised budget submitted by Acquisition
Member under this Section 2.3 and shall be subject to approval by Company
pursuant to this Section 2.3.
2.3.2 Completion of Preliminary Investigation
If Company or Company's Representative approves a budget or revised budget
submitted by Acquisition Member under Section 2.3.1 and elects to proceed
with the preliminary investigations, Acquisition Member shall proceed with
the work reasonably necessary to complete the preliminary investigation in
accordance with the Approved Budget and the scope of investigations agreed to
between Acquisition Member and Company or Company's Representative. It is
acknowledged that the scope of preliminary investigations may include
negotiations with authorities, Occupants and prospective Occupants, design
work, approval, supervision and coordination of the design, demographic
analyses and similar services. Company will use its best reasonable efforts
to cause Acquisition Member to be appointed to provide any preliminary
investigations in connection with any Prospective Acquisition of any Joint
Venture.
2.4 Title To Product
Upon payment by Company or by a Joint Venture to Acquisition Member for
Services provided under this Agreement, title to the Product (as defined
below} of the Services in respect of which the payment was made shall pass to
Company or Joint Venture. For the purposes of this Section 2.4, "Product"
includes any commercial information with respect to the applicable
Prospective Acquisition, including information relating to financial
feasibility, demographics, market trends and prospective Occupants, and
design documentation, but does not include any design concept inherent in any
design work or documentation or any Confidential Information as defined in
Section 2.15.
2.5 Preliminary Reports
During the period that Acquisition Member is providing any Services to
Company relating to the preliminary investigations of any Prospective
Acquisition, Acquisition Member shall provide to Company regular reports, in
a form reasonably acceptable to Company, containing updates as to the
progress of its investigations and such information as is reasonably
requested by Company or Company Representative. Such reports shall be
provided at such intervals as Company and Acquisition Member may reasonably
agree at the time that the Approved Budget is established pursuant to Section
2.3 but shall, in all events, include a quarterly progress report specifying
the costs incurred during the preceding quarter by Acquisition Member and a
reconciliation of the actual costs incurred for the preliminary
investigations through the date of such report as against the Approved
Budget; provided, except as otherwise agreed by Company or Company
Representative, such reports shall not be deemed to amend the Approved
Budget.
2.6 Final Feasibility Study
At the conclusion of its preliminary investigations of any Prospective
Acquisition under Section 2.3.2, Acquisition Member shall produce and deliver
to Company a Final Feasibility Study, subject to the limitations of the
Approved Budget and the agreed scope of the preliminary investigations. The
Final Feasibility Study shall contain such detailed information as may be
reasonably required to enable Company to make a fully informed decision as to
whether to proceed with the applicable Acquisition Process including:
(a) Preliminary schematic plans and, to the extent available,
specifications;
(b) A proposed construction and acquisition schedule, including the
dates for substantial completion of any proposed acquisition or
Modification;
(c) Cost Estimates for the Prospective Acquisition to the extent not
included in Section 2.6(g) below;
(d) The consultants proposed to be used by Acquisition Member to the
extent known by Acquisition Member at the time;
(e) Required payments to and any other requirements of governmental
authorities necessary to obtain all consents, permits and
entitlements for the applicable Prospective Acquisition;
(f) Reports on any issues which may impact the timing, success or cost
of the Prospective Acquisition, including, if applicable, any
matters related to the leasing or compliance of the Acquisition
Process with any existing leases or with applicable local building
laws;
(g) A detailed budget for the Prospective Acquisition, including all
fees payable to Acquisition Member in accordance with the terms
hereof;
(h) Any reports prepared by consultants hired by Acquisition Member.
2.7 Additional Information
Acquisition Member shall deliver each completed Final Feasibility Study to
Company and/or Company Representative as directed by Company.
If so requested by Company or Company Representative, at Company's cost,
Acquisition Member shall provide such other material, reports, information or
assistance as may be considered reasonably necessary by the person making the
request including, subject to the provisions of Section 2.15, upon reasonable
advance notice to Acquisition Member, access to (a) all information, reports
and reviews developed or obtained by Acquisition Member for the purposes of
any Final Feasibility Study, (b) any of Acquisition Member's governors,
managers and senior personnel directly involved in the performance of
Services or the preparation of the Final Feasibility Study for any aspect of
the Acquisition Process, and (c) such other persons and consultants as such
may be nominated for the purpose. Acquisition Member shall nominate such
additional persons and consultants from time to time as may be appropriate to
provide to Company the information that is required to be provided under this
Agreement. Subject to Section 2.15, Acquisition Member shall disclose to
Company or any Company Representative all information or documents relevant
to the preparation and the content of the Final Feasibility Study.
2.8 Cost Estimates
The Cost Estimates included in any Final Feasibility Study shall include
fully detailed categories in a form and containing such information as
Company or Company's Representative may reasonably require. If so requested
by Company Representative, Acquisition Member shall provide to Company
Representative a full report of the assumptions and calculations employed by
Acquisition Member in compiling the detailed costs or any component part
thereof.
2.9 Verification By Company Representative
Company may engage, at any time a Company Representative to report on and
verify any aspect of the Services for any Prospective Acquisition, including
the Final Feasibility Study, project timing and verification of the accuracy
of any Cost Estimates and, subject to Section 2.15, Acquisition Member shall
provide such additional information as may be requested by Company
Representative to enable the appropriate reports and verifications to be
made.
2.10 Selection Of Company Representative
If Company desires to engage a Company Representative, Company shall consult
with Acquisition Member in good faith as to the selection of an independent
third party to be engaged as Company Representative under this Agreement and
shall consider in good faith any independent third parties recommended by
Acquisition Member to act as Company Representative. After appropriate
consultation, Company will notify Acquisition Member of Company's preferred
representative and obtain Acquisition Member's consent thereto.
Unless, within 10 days after Acquisition Member's receipt of a written
request for approval, Acquisition Member shall have delivered a notice to
Company rejecting the proposed Company Representative and specifying the
reasons for such rejection, Acquisition Member will be deemed to have
accepted the Company Representative so proposed.
2.11 Company Representative's Costs
The fees and costs (including indirect and out of pocket costs) of any
Company Representative employed by Company to undertake a review or
assessment of, or verify any matter contained in, a Final Feasibility Study
or any other report, proposal or Service issued, delivered or provided by
Acquisition Member pursuant to this Agreement shall be borne by Company.
2.12 Company Review Of Final Feasibility Study
Before a final decision is made by Company to complete the Acquisition
Process with respect to any Prospective Acquisition, Company shall first have
the opportunity to thoroughly investigate and review the Final Feasibility
Study and the estimated cost of the Prospective Acquisition based on such
reports, plans and specifications and Cost Estimates as Acquisition Member
shall provide, and for this purpose Acquisition Member shall submit to
Company, to the extent not contained in the Final Feasibility Study, such
reports, plans and specifications, construction schedules and Cost Estimates
and such other material, and reports as Company or Company Representative may
reasonably require. At the request of Company, Acquisition Member shall
update the Final Feasibility Study to reflect any additional matters
reasonably required by Company and to take into account any comments of
Company on the conclusions of Acquisition Member set forth in the Final
Feasibility Study.
Company and Acquisition Member acknowledge that the Acquisition Agreement
provides for Acquisition Member to complete the Acquisition Process in
accordance with an approved schedule. As part of its approval of any Final
Feasibility Study, Company may, at its sole option, engage a Company
Representative to review such study and advise Company with respect to the
costs to be paid by Company or any Joint Venture with respect to the
Prospective Acquisition and also as to the timing set forth in the
acquisition and Modification schedule. If Company Representative shall not
approve the costs or schedule proposed by Acquisition Member in its Final
Feasibility Study, Company Representative shall notify Acquisition Member of
the differences (and provide to Acquisition Member reasonable detail of the
reasons for such differences) between Acquisition Member's proposal and what
it believes is reasonable under the circumstances and conditions outlined in
the Final Feasibility Study. If Company Representative and Acquisition
Member's Representative shall not have reached agreement within 60 days,
Company may exercise its right to choose not to proceed with any Prospective
Acquisition.
2.13 Acquisition Member Fees
It is acknowledged and agreed that, in the event Company shall proceed with
any Prospective Acquisition, the amounts payable to Acquisition Member under
this Agreement shall be included in the Approved Budget for the Prospective
Acquisition and Acquisition Member shall be entitled to such amounts on the
date Company accepts the contribution of any Property contribute by
Acquisition Member. In addition to payment and reimbursements for Services,
Acquisition Member shall be paid an Acquisition Fee for each Property
contributed to Company pursuant to Section 3.1.1 of this Agreement in an
amount computed as follows:
(1) 1% of the Fair Market Value of each Property contributed for the
first $40,000,000 of Property contributions; and,
(2) 3% of the Fair Market Value of each Property contributed
thereafter;
2.14 Limitation Of Liability
Company acknowledges that it will perform its own verification of all
financial projections related to any Property contributed to Company by
Acquisition Member, and in no event shall Acquisition Member be liable to
Company or any Joint Venture for any discrepancy between such financial
projections and actual operating results.
2.15 Confidential Information
Notwithstanding any other provision of this Agreement requiring Acquisition
Member or its members, employees and agents to provide information,
documentation or reports to the Company, Company Representative, or other
agents or representatives of the Company, Company hereby acknowledges and
agrees that such information does not include information about any property
or other matters other than those relating specifically to Property,
Prospective Acquisitions or other items obtained or produced as part of any
Acquisition Process (collectively, the "Confidential Information").
3 COMPLETION OF ACQUISITION PROCESS
3.1 Acquisition By Acquisition Member
If Company has made a decision to proceed with the Acquisition Process
detailed in any Final Feasibility Study (Acquisition Member to be notified in
writing of such decision), then Company will appoint and Company will use its
best reasonable efforts to cause the applicable Joint Venture to appoint
Acquisition Member to undertake the completion of the Acquisition Process and
for this purpose Company or the applicable Joint Venture shall notify
Acquisition Member in writing to acquire the Prospective Acquisition in
Acquisition Member's name. Once a Prospective Acquisition has been so
acquired, the Acquisition Process shall be deemed to be completed for that
particular Prospective Acquisition.
3.1.1 Contribution Of Property By Acquisition Member
Upon completion of the Acquisition Process, Acquisition Member shall
contribute the applicable Property to the Company and Company will accept
such contribution of Property provided that Company receives marketable title
(subject only to encumbrances for tax assessments, utility easements and
other encumbrances typical in commercial real estate transactions) to the
Property at the time of its contribution by Acquisition Member. Evidence of
marketable title may include a policy of title insurance, an opinion of
counsel or other evidence as is customary in the locality in which the
Property is situated.
Upon acceptance of Acquisition Member's contribution of Property, Company
will credit the capital account of Acquisition Member on Company's books by
an amount equal to Fifty Percent (50%) of the Fair Market Value of the
Property.
3.1.2 Determination of Fair Market Value
Company and Acquisition Manager hereby understand and agree that the fair
market value ("Fair Market Value") of any Property at the time of its
contribution shall be an amount determined by dividing the projected annual
rental payments anticipated to be received during the next full fiscal year
of the Company (less rental expenses associated with such Property, but
without deduction for any overhead, accounting, legal or other administrative
expenses of Company) by the CCRCI in effect at the date of contribution.
3.2 Exclusivity
Company shall not, and shall use its best reasonable efforts to cause any
Joint Venture not to, during the term of this Agreement, without the consent
in writing of Acquisition Member (which may be given or withheld in
Acquisition Member's sole and absolute discretion) engage any person other
than Acquisition Member to provide Services or to undertake all or any
portion of any Acquisition Process in respect of any Prospective Acquisition.
Nothing in this Section shall limit or modify the rights with respect to
termination afforded to Company under this Agreement.
4 PAYMENTS
4.1 Payments To Acquisition Member
4.1.1 Payment For Services
In consideration for undertaking all work in connection with the preparation
of reports, studies, plans and specifications, construction schedules,
budgets and Cost Estimates including all necessary acquisition, design,
architectural, consulting and engineering construction services (including
approval, supervision and coordination of the design of any Modification)
undertaken by Acquisition Member prior to the completion of any Acquisition
Process, Acquisition Member shall be entitled to payment for all costs (which
costs shall, for purposes of employees of Acquisition Member providing
Services hereunder, be calculated at a rate equal to the hourly rate of such
employees, based on their salaries, wages and benefits based upon a 40 hour
work week, to the extent such employee is working specifically on any
Prospective Acquisition hereunder pursuant to an Approved Budget) incurred by
it or by any third party under Acquisition Member's supervision, provided
that notwithstanding the foregoing, Acquisition Member shall not be entitled
to be reimbursed for any such costs incurred by it except to the extent set
forth in an Approved Budget for the Acquisition Process to which such costs
relate. Acquisition Member shall submit to Company on a monthly basis its
invoices for costs of providing the Services hereunder. Subject to Company's
verification that such costs were incurred in accordance with the terms
hereof (which verification may be performed by a Company Representative),
Company shall pay or cause any applicable Joint Venture to pay the amount of
such invoice within 15 Business Days after its receipt thereof. In the event
that Company directs Acquisition Member to complete the Acquisition Process
for any Prospective Acquisition, Acquisition Member shall be paid the fees
set forth in this Agreement.
4.1.2 Company Election To Discontinue Acquisition Process
At any time prior to providing notice to Acquisition Member to complete the
Acquisition Process (as set forth in Section 3.1) for any Prospective
Acquisition, Company may elect to discontinue or delay any Service being
provided by Acquisition Member hereunder. If Company decides to halt any
Services being provided pursuant to Section 2.3 prior to the completion of
the relevant Services, or to halt the preparation of a Final Feasibility
Study, or not to complete the Acquisition Process following the delivery to
Company of the Final Feasibility Study for any Prospective Acquisition, then
Company shall notify Acquisition Member of its decision and Acquisition
Member shall halt all work on the applicable preliminary investigation or
Final Feasibility Study as the case may be. In the event that Company elects
to discontinue any Service under this Section, Acquisition Member shall be
entitled to payment for the Services provided by Acquisition Member or any
third party under Acquisition Member's supervision in accordance with the
terms hereof, including, without limitation, in accordance with an Approved
Budget with respect to the applicable preliminary investigation or Final
Feasibility Study, up to and including the date of the notice. Promptly after
its receipt of any notice from Company under this Section 4.1.2, Acquisition
Member shall deliver to Company an invoice and supporting documents for the
Services performed by Acquisition Member or any third party under Acquisition
Member's supervision, up to and including the date of the Notice.
5 TERMINATION BY COMPANY
5.1 Term
The term of this Agreement shall commence as of the date hereof and shall
continue until terminated pursuant to this Article.
5.2 Non-Curable Terminating Events
Company may terminate this Agreement on 15 days prior written notice to
Acquisition Member upon (a) the occurrence of the Bankruptcy of Acquisition
Member; or (b) an act of fraud, embezzlement or theft constituting a felony
against Company or its Affiliates which causes it (i) material injury; is
perpetrated by Acquisition Member in its corporate capacity (as distinguished
from the acts of any employees that are performed without the complicity of
the managing members of Acquisition Member) under this Agreement.
5.3 Curable Defaults
Company may terminate this Agreement by written notice to Acquisition Member
in the event that Acquisition Member shall default in the performance or
observance of any material term, condition or covenant contained in this
Agreement and such default shall continue for a period of thirty (30) days
after written notice thereof shall have been given to Acquisition Member by
Company specifying such default and requesting that the same be remedied in
such thirty-day period (an "Acquisition Member Default Notice").
Acquisition Member shall be deemed to have complied with an Acquisition
Member Default Notice given under this Section 5.3 if Acquisition Member
shall, in good faith, have commenced to remedy the default specified therein
as soon as is practicable after receiving such Acquisition Member Default
Notice and, if the default is such that it is curable within a reasonable
time, but cannot be reasonably remedied within the specified time,
Acquisition Member thereafter shall have diligently prosecuted the cure to
its completion.
Company shall have the right to terminate this Agreement based on a default
by Acquisition Member under this Section 5.3 only if such default is
determined to constitute an Acquisition Member Adjudicated Default as
provided below. If Company believes that Acquisition Member has defaulted in
the performance of a material obligation under this Agreement and such
default remains uncured following the delivery of an Acquisition Member
Default Notice, and the expiration of the applicable cure period provided in
this Section 5.3, then Company may deliver a written notice to Acquisition
Member setting forth its intention to terminate this Agreement pursuant to
this Section (a "Company Termination Notice"). If Acquisition Member desires
to contest such termination, then Acquisition Member shall notify Company
within ten (10) Business Days after receipt of the Company Termination
Notice, and senior personnel of each party shall meet promptly and negotiate
in good faith in order to resolve such dispute. If such senior personnel are
unable to resolve the dispute within thirty (30) days after Acquisition
Member's receipt of the Company Termination Notice, then Acquisition Member
may institute an action in the appropriate judicial forum within thirty (30)
days thereafter to determine whether Acquisition Member has defaulted in the
performance of a material obligation hereunder. An "Acquisition Member
Adjudicated Default" shall be deemed to have occurred if:
1. The parties' respective senior personnel are unable to resolve such
dispute and Acquisition Member does not institute a judicial
proceeding within thirty (30) days after it's receipt of an Company
Termination Notice;
2. A court renders a final decision finding that Acquisition Member has
defaulted in the performance of a material obligation hereunder, and
Acquisition Member does not deliver a notice of appeal to the
appropriate parties within the applicable appeal period; or
3. A court renders a final decision finding that Acquisition Member has
defaulted in the performance of a material obligation hereunder and
an appeal is perfected by Acquisition Member within the applicable
appeal period, and a second court renders a final decision finding
that Acquisition Member has defaulted in the performance of a
material obligation hereunder.
Upon the giving of a default notice under this Section 5.3, Company may
suspend any payment which thereafter may become due to Acquisition Member,
other than amounts actually due and payable to third-party contractors
performing work under Acquisition Member's supervision under any applicable
contracts, and amounts properly payable to Acquisition Member at the time of
the default with respect to completed work, until such time as the default
has been remedied. If the engagement of Acquisition Member hereunder to carry
out any Services is terminated by Company, then Company shall not be
obligated to make any further payments to Acquisition Member.
5.4 Other Termination Rights Of Company
In addition to the termination rights of Company under Sections 5.2 and 5.3
hereof, Company shall have the following termination rights:
5.4.1 Minimum Participation In Ownership Of Company
Upon thirty (30) days prior written notice to Acquisition Member if the
aggregate direct and indirect interest of the Managing Members and their
Affiliates (including any investment vehicle sponsored, promoted or managed
by any such entity) in Company shall become less than 20%, Company may
terminate this Agreement, provided that no termination shall be permitted
under this Section 5.4.1 with respect to a Prospective Acquisition for which
Services are then being performed by Acquisition Member or for which
Acquisition Member has been directed to complete the Acquisition Process
pursuant to Section 3.1.
5.4.2 Foreclosure
Company may terminate this Agreement as to any Prospective Acquisition upon
the foreclosure by any mortgagee upon such Prospective Acquisition or the
taking of possession thereof by a deed-in-lieu of foreclosure or any other
transfer to a mortgagee, directly or indirectly, except as otherwise agreed
in writing by Acquisition Member and such mortgagee. No termination of this
Agreement with respect to a specific Prospective Acquisition pursuant to this
Section 5.4.2 shall affect the terms of this Agreement with respect to the
remaining Prospective Acquisitions.
5.5 Rights And Obligations After Company Termination
In the event that Company shall terminate the engagement of Acquisition
Member pursuant to Section 5.2 or Section 5.3, the following shall be the
respective rights and duties of Company and Acquisition Member with respect
to all Sections of this Agreement that relate to the performance of the
Acquisition Process:
5.5.1 Incomplete Services
Company may employ and pay another person or persons to carry out and
complete the Services that are uncompleted as of the date of termination
("Incomplete Services").
5.5.2 Assignment Of Agreements
Acquisition Member shall, if so required by Company, assign to Company
without any further payment or consideration the benefit of any agreement
between Acquisition Member and any consultant or subcontractor for the
provision of services or work for the purposes of this Agreement, and Company
shall pay for those services under those agreements, after said termination,
the price fixed by the relevant agreement, insofar as it has not been already
paid by Acquisition Member;
5.5.3 Delivery Of Documents
Upon receipt of a written request from Company, Acquisition Member shall
promptly deliver to Company all documentation relating to the Services.
5.5.4 Release Of Company
Company shall be released from the exclusivity provisions set forth in
Section 3.2.
5.6 Termination As To Specific Prospective Acquisition
In the event that Company shall terminate the engagement of Acquisition
Member for any specific Prospective Acquisition due to a material default by
Acquisition Member thereunder, this Agreement shall be deemed to be
terminated as to such Prospective Acquisition (and Company and Acquisition
Member shall have the rights and obligations set forth in Section 5.5 as to
such Prospective Acquisition only), and Company shall be released from the
exclusivity provisions set forth in Section 3.2 as to such Prospective
Acquisition (it being acknowledged that this Agreement shall continue with
respect to the remaining Prospective Acquisitions).
6 TERMINATION BY ACQUISITION MEMBER
6.1 Company Default
Without prejudice to any other rights and remedies it may have, Acquisition
Member may suspend provision of any Services or terminate its engagement in
relation to any Services if Company fails to pay the amount that is properly
due under any invoice issued by Acquisition Member within fifteen (15) days
of its becoming due for payment, and such failure shall continue for a period
of not less than (20) days after written notice thereof shall have been given
to Company by Acquisition Member (a "COMPANY DEFAULT NOTICE"), which notice
shall state Acquisition Member's intention to so suspend the Services or
terminate its engagement hereunder; provided, to the extent Company is
disputing the payments due Acquisition Member with respect to any specific
Prospective Acquisition, Acquisition Member shall not automatically suspend
Services for any other Prospective Acquisition during such dispute. Any
suspension of Services shall not prevent Acquisition Member from terminating
its engagement in relation to all Services under this Section during the time
the Services are suspended.
Acquisition Member shall have the right to terminate its engagement under
this Agreement as to any Prospective Acquisition pursuant to this Section 6.1
based on Company's failure to pay any amount which is properly due under any
invoice with respect to such Prospective Acquisition issued by Acquisition
Member only if such default is determined to constitute a Company Adjudicated
Default as provided below. If Acquisition Member believes that Company has
failed to pay any amount that is properly due under any invoice with respect
to any Prospective Acquisition issued by Acquisition Member, and such
default remains uncured following the delivery of a Company Default Notice
and the expiration of the applicable cure period provided in this Section
6.1, then Acquisition Member may deliver a written notice to Company setting
forth its intention to terminate its engagement under this Agreement as to
such Prospective Acquisition pursuant to this Section (an "ACQUISITION MEMBER
TERMINATION NOTICE").If Company desires to contest such termination, then
Company shall notify Acquisition Member within ten (10) Business Days after
receipt of the Acquisition Member Termination Notice, and senior personnel of
each party shall meet promptly and negotiate in good faith in order to
resolve such dispute. If such senior personnel are unable to resolve the
dispute within thirty (30) days after Company's receipt of the Acquisition
Member Termination Notice, then Company may institute an action in the
appropriate judicial forum within thirty (30) days thereafter to determine
whether Company has failed to pay any amount that is properly due under any
invoice issued by Acquisition Member. A "COMPANY ADJUDICATED DEFAULT" shall
be deemed to have occurred if:
1. The parties' respective senior personnel are unable to resolve such
dispute and Company does not institute a judicial proceeding within
thirty (30) days after it's receipt of an Acquisition Member
Termination Notice;
2. A court renders a final decision finding that Company has failed to pay
any amount which is properly due under any invoice issued by
Acquisition Member, and Company does not deliver a notice of appeal to
the appropriate parties within the applicable appeal period; or
3. A court renders a final decision finding that Company has failed to pay
any amount which is properly due under any invoice issued by
Acquisition Member and an appeal is perfected by Company within the
applicable appeal period, and a second court renders a final decision
finding that Company has failed to pay any amount which is properly due
under any invoice issued by Acquisition Member.
6.2 RIGHTS AND OBLIGATIONS AFTER ACQUISITION MEMBER'S TERMINATION.
Upon a termination of Acquisition Member's engagement under Section 6.1,
Company shall pay to Acquisition Member the following several sums in
relation to the Services:
1. The value of the Services provided under this Agreement in accordance
with any Approved Budget up to the date of termination;
2. The cost of materials or goods or services ordered pursuant to the
Approved Budget for the provision of the Services and paid for or
agreed to be paid for by Acquisition Member, provided that where any
materials or goods are in the possession of Acquisition Member they
shall be delivered to Company with clear title (except for any
applicable materialman's liens, provided that such lien shall be
removed contemporaneously with such payment) at the time of payment by
Company, and where they are not in the possession of Acquisition Member
any payment made in respect of such goods by Company shall be refunded
by Acquisition Member if they are not delivered to Company with clear
title promptly after payment therefor; and
3. Any loss or damage caused to Acquisition Member by any termination
pursuant to Section 6.1.
7 TERMINATION FOR REASONS OTHER THAN DEFAULT
7.1 Other Termination Procedures
If this Agreement is terminated pursuant to Section 5.4 or for reasons other
than those specified in Section 5.2, Section 5.3 or ARTICLE 6, then the
following procedures shall apply, as applicable, to each Prospective
Acquisition that is the subject of such termination:
7.1.1 Assignment Of Third Party Agreements
Acquisition Member shall, if so required by Company, assign to it without any
further payment or consideration the benefit of any assignable agreement
between Acquisition Member and any third party consultant for the supply of
services with respect to any applicable Prospective Acquisition, provided
that upon any termination of this Agreement pursuant to Section 5.4 (other
than a termination pursuant to Section 5.4.1), Company shall be required to
assume all such agreements or subcontracts; and
7.1.2 Statement Of Account
Within thirty (30) days after the date of termination of this Agreement,
Acquisition Member shall provide to Company a statement of account in form
and content reasonably satisfactory to Company which form shall include,
without limitation the following information:
(a) Details of all expenditures made and costs incurred pursuant to any
Approved Budget current as of the date of termination;
(b) The total amount paid to or at the direction of Acquisition Member in
accordance with any Approved Budget as of the date of termination;
(c) The percentage of the applicable Services completed by Acquisition
Member as of the date of termination; and
(d) The balance due to Acquisition Member;
7.1.3 Release From Exclusivity
Upon Company's payment of any amounts due and owing in accordance with
Section 7.4, Company shall be released from the exclusivity provisions set
forth in Section 3.2 with respect to the applicable Prospective Acquisitions.
7.2 Delivery Of Documents
Upon receipt of any amount due to Acquisition Member under Section 7.4,
Acquisition Member shall provide to Company all design documents, consents
and certificates from governmental authorities and any other documents or
records relevant to the Services or Acquisition Process being undertaken by
Acquisition Member under this Agreement in the possession of Acquisition
Member as of the date of termination.
7.3 Additional Information
Within twenty (20) days after the receipt of the final statement from
Acquisition Member under Section 7.1.2, Company may request Acquisition
Member to provide such additional information or documents as Company may
reasonably require.
7.4 Payment
Within fifteen (15) Business Days of the date on which Company receives all
information or additional documents requested by it under Section 7.3,
Company shall pay to Acquisition Member the amount set forth in paragraph (d)
of Section 7.1.2.
8 PERFORMANCE OF OBLIGATIONS; ASSIGNMENT
8.1 Transfer By Acquisition Member To Affiliates
Acquisition Member may assign all or any of its obligations under this
Agreement to, or otherwise arrange for such obligations to be performed by,
any Affiliate. The transfer of an interest in Acquisition Member shall not be
deemed an assignment of this Agreement so long as the existing owners of
Acquisition Member continue to own, directly or indirectly, at least a 50%
interest in Acquisition Member.
8.2 Contractors
Acquisition Member may sub-let or sub-contract any part of its obligations
and provide either directly or through its sub-contractors all labor
including the labor of architects, experts and other persons necessary for
the execution and completion of its obligations in accordance with the
provisions of this Agreement provided that no sub-letting or sub-contracting
will relieve Acquisition Member of any of its obligations under this
Agreement. Notwithstanding the foregoing to the contrary, Acquisition Member
agrees not to transfer or assign its interest in Company or its interest in
any Property or Prospective Acquisition except to an Affiliate.
9 NOTICES
In order to be deemed effective, all documents to be delivered and all
notices, approvals, authorizations and/or consents to be given or obtained by
any party to this Agreement shall be in writing and, where a notice is to be
given, shall be given by personal delivery, or sent by express mail or
nationally recognized overnight courier, or by registered or certified mail,
postage prepaid, return receipt requested, or by facsimile (with confirmed
receipt), addressed as set forth below.
If to Company, then to:
CBCI Income and Growth Fund, LLC
Suite 000 Xxxxxxxx Xxxxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
If to Acquisition Member:
CBCI Acquisitions I, LLC
Suite 000 Xxxxxxxx Xxxxxxxx
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
The above addresses may be changed for future communications or delivery of
notice hereunder by giving notice of such change to the others listed above
in the manner prescribed by this Article. All notices shall be deemed
effective when received by all applicable parties at the addresses set forth
above (as such addresses may be changed by the parties in accordance
herewith). Notwithstanding the foregoing, no notice shall be deemed
ineffective because of any party's refusal to accept delivery at the address
specified for the giving of such notice in accordance herewith.
10 REPRESENTATIONS AND WARRANTIES
10.1 Acquisition Member Representations And Warranties
Acquisition Member represents and warrants as of the date of this Agreement
that:
(a) It is a limited liability company duly organized and in good standing
under all applicable legal requirements and has all requisite power
and authority to enter into and observe its obligations under this
Agreement;
(b) It has in full force and effect all authorizations necessary to enter
into this Agreement and to perform its obligations under this
Agreement and allow them to be enforced.
(c) It, together with its Affiliates, has the skill and experience
necessary to perform its obligations in accordance with the terms of
this Agreement;
(d) Its warranties and obligations contained in this Agreement as at the
date of this Agreement are valid and binding on it; and
(e) It is not, in relation to the performance of its obligations under
this Agreement, in default under any legal requirement (whether or.
not at law or in equity) or other obligation (including any
contractual or fiduciary obligation)
10.2 Company Representations And Warranties
Company represents and warrants as at the date of this Agreement that:
(a) It is a Minnesota limited liability company, duly organized, and in
good standing under all applicable legal requirements and has all
requisite power and authority to enter into and observe its
obligations under this Agreement;
(b) It has and will continue to have or have available to it during the
term of this Agreement, the financial capacity necessary to comply
with its obligations under this Agreement.
(c) It has in full force and effect all authorizations necessary to
enter into this Agreement and to perform its obligations under this
Agreement and allow them to be enforced.
(d) Its warranties and obligations contained in this Agreement as at
the date of this Agreement are valid and binding on it; and
(e) It is not, in relation to the performance of its obligations under
this Agreement, in default under any legal requirement (whether or
not at law or in equity) or other obligation (including any
contractual or fiduciary obligation).
11 GENERAL PROVISIONS
11.1 Governing Law And Jurisdiction
This Agreement is made in and shall be governed by and construed in
accordance with the laws of the State of Minnesota. Both Acquisition Member
and Company irrevocably and unconditionally submit to the non-exclusive
jurisdiction of the courts of Minnesota. Company and Acquisition Member waive
any right they may have to object to an action being brought in those courts
including, without limitation, by claiming that the action has been brought
in an inconvenient forum or that those courts do not have jurisdiction.
Without preventing any other mode of service, any document in an action
(including, without limitation, any writ of summons or other originating
process or any third or other party notice) may be served on any party by
being delivered to or left for that party at its address for service of
notices and in the manner prescribed therefor under ARTICLE 9.
11.2 Pronouns
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
11.3 References In This Agreement
All references herein to numbered or lettered Articles, Sections and
Paragraphs refer to the respective Articles, Sections and Paragraphs of this
Agreement unless otherwise expressly stated.
11.4 Headings
All headings herein are inserted only for convenience and ease of reference
and are not to be considered in the construction or interpretation of any
provision of this Agreement.
11.5 Binding Effect
Except as herein otherwise expressly stipulated to the contrary, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, legal representatives, successors and
permitted assigns.
11.6 Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which together shall constitute one
and the same Agreement.
11.7 Amendments
This Agreement may not be amended, altered or modified except by a written
instrument signed by each of the parties to this Agreement.
11.8 Severability
Every provision of this Agreement is hereby declared independent of, and
separable from, every other provision of this Agreement. To the extent any
such provision shall be held to be invalid or unenforceable, such provision
shall be deemed not to exist in this Agreement and any such holding shall be
without effect upon the validity or enforceability of any other provision of
this Agreement. It is the intention of the parties hereto that, in lieu of
each provision of this Agreement which is determined to be invalid or
unenforceable, there shall be added, as part of this Agreement, such an
alternative clause or provision as may be valid or enforceable but otherwise
as close to the applicable original provision as possible.
11.9 Waiver
No waiver of any provision of this Agreement shall be deemed to or shall
constitute a waiver of any other provision (whether or not similar) nor shall
such waiver constitute a continuing waiver unless otherwise expressly
provided. Failure on the part of any party to complain of any act of any
other party, or to declare any other party in default, irrespective of how
long such failure continues, shall not constitute a waiver by such party of
its rights hereunder.
11.10 No Third Party Beneficiary
This Agreement is made for the exclusive benefit of the parties hereto, their
executors, administrators, successors and assigns herein permitted
(including, without limitation, persons taking by novation or assumption)
and, except as otherwise expressly provided, not for any third party as a
third party beneficiary or otherwise. Except as otherwise specifically
provided, nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties hereto, their executors,
administrators, successors and assigns herein permitted, any rights or
remedies by reason of this Agreement.
11.11 Indemnities
11.11.1 Indemnification Of Company
Acquisition Member hereby agrees to indemnify, defend and protect Company and
Joint Ventures, their respective officers, directors and managers {each such
person collectively called "the Indemnified Parties" for the purposes of this
Section 11.11.1) and hold each of the Indemnified Parties harmless against
all claims, losses, damages, costs, expenses and liabilities {including,
without limitation, attorneys' fees and expenses incurred in good faith and
court costs) incurred by the Indemnified Parties by reason of any claim or
demand being made upon or any action taken against the Indemnified Parties
relating to or arising out of the negligence or willful misconduct or fraud
of Acquisition Member. The Indemnified Parties shall, in good faith, endeavor
to notify Acquisition Member in writing as to every such claim, demand or
action against the Indemnified Parties within ten (10) Business Days after
the Indemnified Parties become aware that such claim or demand has been made
or such action has been taken. A good faith failure to notify Acquisition
Member shall not limit Acquisition Member's liability under this Section
11.11.1, to the extent such failure does not adversely affect Acquisition
Member's rights with respect to such claim.
11.11.2 Indemnification Of Acquisition Member
Company hereby agrees to indemnify, defend and protect Acquisition Member,
each Affiliate performing Services hereunder, and each of their respective
members, governors and personnel (such persons collectively called "the
Indemnified Parties" for the purposes of this Section 11.11.2), and hold each
of the Indemnified Parties harmless against all claims, losses, damages,
costs, expenses and liabilities (including, without limitation, attorneys'
fees and expenses incurred in good faith and court costs) incurred by the
Indemnified Parties by reason of any claim or demand being made upon or any
action taken against the Indemnified Parties relating to or arising out of
(i) any negligence or willful misconduct or fraud of Company, except to the
extent a member of the Acquisition Member is responsible for such negligence
or willful misconduct of Company, or (ii) any act taken or omission made by
Acquisition Member and Affiliates in the performance of Acquisition Member's
obligations under this Agreement, provided that such act or omission does not
constitute negligence or willful misconduct or fraud. The Indemnified Parties
shall, in good faith, endeavor to notify Company in writing as to every such
claim, demand or action against the Indemnified Parties within ten (10)
Business Days after the Indemnified Parties become aware that such claim or
demand has been made or such action has been taken. A good faith failure to
notify Company shall not limit Company's liability under this Section
11.11.2, to the extent such failure does not adversely affect Company's
rights with respect to such claim.
11.12 Attorneys' Fees
11.12.1 Preparation Of This Agreement
Company and Acquisition Member shall pay their respective legal costs and
disbursements associated with the preparation, negotiation and execution of
this Agreement and any modifications hereof.
11.12.2 Judicial Action Or Litigation
In the event that any judicial action between the parties is instituted to
enforce any of the provisions of this Agreement or any right of any party
under this Agreement, regardless of whether such action or proceeding is
prosecuted to judgment and in addition to any other remedy, the unsuccessful
party shall pay to the prevailing party all reasonable costs and expenses
incurred therein by the prevailing party, including, without limitation, all
reasonable attorneys' fees and expenses and court costs.
11.13 Cumulative Rights
All rights, privileges, and remedies afforded the parties by this Agreement
shall be cumulative and in addition to, and not exclusive of, any other
rights, remedies and benefits allowed by law or equity to any party and the
exercise of anyone of such remedies shall not be deemed to be a waiver of any
other right, remedy or privilege provided for herein or available at law or
equity.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the date first above written.
CBCI Income and Growth Fund, LLC
By: CBCI Fund Management I, Inc.
Managing Member
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
President
CBCI Acquisitions I, LLC
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
Managing Member
O-ii
