MASTER PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS Between DENNY’S, INC. and DENNY’S REALTY, LLC as Seller and NATIONAL RETAIL PROPERTIES, INC. as Buyer September 8, 2006
AND
ESCROW INSTRUCTIONS
Between
DENNY’S,
INC. and XXXXX’X REALTY, LLC
as
Seller
and
NATIONAL
RETAIL PROPERTIES, INC.
as
Buyer
September
8, 2006
AND
ESCROW INSTRUCTIONS
DATED: Dated
to
be effective as of September 8, 2006 (the “Effective
Date”).
PARTIES: This
Master Purchase Agreement and Escrow Instructions is between DENNY’S, INC., a
California corporation (“DI”)
and
XXXXX’X REALTY, LLC, a Delaware limited liability company (“DRI”)
(DI
and DRI are jointly, severally and collectively referred to herein as
“Seller”),
and
NATIONAL RETAIL PROPERTIES, INC., a Maryland corporation (“Buyer”).
Preliminary
Statement
DI
or DRI
(as the successor to Denny's Realty, Inc.) is the fee title owner of those
certain parcels of improved property listed by address on Exhibit A attached
hereto, and legally described on the title commitments delivered by Seller
to
Buyer (each a “Parcel”
and
collectively, the “Parcels.”)
Each
Parcel is improved with a building (each, a “Building”
and,
collectively, the “Buildings”).
Each
Parcel, the Building on such Parcel and the improvements to such Parcel (the
“Improvements”)
are
leased or subleased to a Denny’s franchisee (each, a “Tenant”
and
collectively, the “Tenants”)
in
accordance with a written lease or sublease (each, a “Lease”
and,
collectively, the “Leases”).
Each
Lease is guarantied by certain guarantors (the “Guaranties”). All Leases and
Guaranties are more particularly identified on Exhibit
D.
Each
Parcel, the Building on such Parcel, the Improvements to such Parcel, and
Seller’s right,
title, and interest
in the Lease relating to such Parcel and all rents issued and profits due or
to
become due thereunder are collectively referred to as a “Property”. All Parcels,
Buildings, Improvements to the Parcels, and Seller’s
right,
title, and
interest
in the Leases and all rents issued and profits due or to become due thereunder
are collectively referred to as the “Properties”.
Buyer
has
delivered to Seller a Confidentiality Agreement dated April 5, 2006 (the
“Confidentiality
Agreement.”).
The
parties have signed a non-binding letter of intent concerning Buyer’s review of
and interest in acquiring the Properties.
Buyer
desires to purchase the Properties from Seller and Seller desires to sell the
Properties to Buyer,
all as
more particularly set forth in this Master Purchase Agreement and Escrow
Instructions (the “Agreement”).
The
Confidentiality Agreement and the letter of intent are superseded and replaced
by this Agreement and shall no longer be in force and effect.
NOW
THEREFORE, in consideration of the promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby
acknowledged, Seller and Buyer (each, a “Party”
and,
collectively, the “Parties”)
agree
as follows:
1. INCORPORATION
OF RECITALS.
All of
the foregoing Recitals are hereby incorporated as agreements of the
Parties and
form
an integral
part of this Agreement.
2. BINDING
AGREEMENT.
This
Agreement constitutes a binding agreement between Seller and Buyer for the
sale
and purchase of the Properties subject to the terms and conditions set forth
in
this Agreement. Subject to the limitations set forth in this Agreement, this
Agreement shall bind and inure to the benefit of the Parties and their
respective successors and
permitted
assigns.
This Agreement supersedes all other written or verbal agreements between the
Parties concerning any transaction embodied in this Agreement. No claim of
waiver or modification concerning the provisions of this Agreement shall be
made
against a Party unless based upon a written instrument signed by such Party.
The
letter of intent is not part of the Agreement and does not constitute a binding
agreement.
The
Confidentiality Agreement is superseded by this Agreement.
3. INCLUSIONS
IN PROPERTIES.
(a) The
Properties.
The
term “Properties”
shall
also include the following:
(1) all
tenements, hereditaments and appurtenances pertaining to the
Parcels;
(2) all
mineral, water and irrigation rights, of Seller if any, running with or
otherwise pertaining to the Parcels;
(3) all
right, title and
interest, if any, of Seller in any road adjoining the Parcels;
(4) all
right,
title and interest, if any, of Seller in any award made or to be made or
settlement in lieu thereof for damage to the Properties or any portion thereof
by reason of condemnation, eminent domain or exercise of police
power;
(5) all
of
Seller’s right,
title and interest in the Buildings, the Improvements and any other improvements
and fixtures on the Parcels;
(7) the
Leases; and
(8) all
of
Seller’s right,
title and interest, to the extent transferable
without
costs,
in all
permits and licenses, warranties (specifically including, without limitation,
any warranty related to the roof of each Building), and contractual rights
(including architectural/engineering plans) with respect to the operation,
maintenance, repair or improvement of the Properties, but excluding the
Franchise Agreements.
“Excluded
Property”
means
any equipment, machinery and personal property (i) owned by any of the Tenants,
or (ii) that contains the Denny’s trademark. “Franchise
Agreements”
means
the Denny’s franchise agreements relating to each of the Properties between
Seller’s affiliate, DFO, LLC (“DFO”)
and
the Tenants, as amended.
(b) The
Transfer Documents.
Except
for the Leases, each of which shall be transferred by that certain assignment
and assumption of lease, a specimen of which is attached hereto as Exhibit
C
(each, an “Assignment
of Lease”),
all
components of each of the Properties shall be transferred and conveyed by
execution and delivery by Seller of a special warranty deed in the customary
form for each jurisdiction as prepared by Escrow Agent (each, a “Deed”).
The
Assignments of Lease and each Deed are collectively referred to as the
“Transfer
Documents”.
4. PURCHASE
PRICE.
The
aggregate price to be paid by Buyer to Seller for the Properties is $67,468,787
(subject to potential increase as provided below) (the “Purchase
Price”),
which
Purchase Price is allocated as more particularly provided for on Exhibit
A
among
the Properties and is payable as follows:
(a) A
wire of
cash or an irrevocable, standby letter of credit issued to Denny's Realty LLC
in
the amount of $3,000,000 (the “Xxxxxxx
Money Deposit”)
will
be delivered by Buyer to First American Title Insurance Company, 0000 Xxxxxxx
Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxxx Xxxxxxxxx (“Escrow
Agent”)
not
later than three (3) business days
(excludes Saturday, Sunday or legal holiday
recognized by the federal government)
following the receipt by Escrow Agent of a fully-executed original of this
Agreement. The Xxxxxxx Money Deposit is to be held by Escrow Agent until
released to Seller or Buyer as provided herein or paid to Seller at close of
escrow (“XXX.”)
(b) Such
amounts, in additional cash, or other immediately available funds (as may be
increased or decreased by such sums as are required to take into account any
additional deposits, prorations, credits, or other adjustments required by
this
Agreement), set forth in one or more settlement or closing statements prepared
by Escrow Agent and approved by Buyer and Seller in connection with XXX, to
be
deposited in escrow with Escrow Agent on or before XXX (the “Additional
Funds”)
which
will be held by Escrow Agent until cancellation of this Agreement as provided
herein or paid to Seller at XXX.
(c) If
XXX
has not occurred
by 4 pm
Eastern Time September 27, 2006 due to Buyer’s failure to perform, the Purchase
Price shall increase $25,000. If XXX has not occurred by 4 pm Eastern Time
October 13, 2006 due to Buyer’s failure to perform, the Purchase Price shall
increase by 1.25% per week (such increase to take effect every Friday) until
such time as XXX has occurred with respect to every Property.
This
amount represents the additional cost to Seller from delay in funding and
announcing a full and complete transaction. In no event will XXX be completed
as
to every Property later than December 31, 2006.
At
XXX,
Buyer may change the allocation of the Purchase Price amongst the individual
Properties so long as the total, combined Purchase Price remains unchanged
by
such reallocation.
5. DISPOSITION
OF XXXXXXX MONEY DEPOSIT.
Seller
and Buyer hereby instruct Escrow Agent to handle the letter of credit serving
as
the Xxxxxxx Money Deposit
as
follows:
(a) if
Buyer
cancels this Agreement as provided in this Agreement, the Xxxxxxx Money Deposit
shall be returned immediately to Buyer;
(b) if
the
Xxxxxxx Money Deposit is forfeited by Buyer pursuant to this Agreement, the
letter of credit shall be immediately delivered to Seller and may be drawn
on in
full. The face amount will be Seller’s agreed and total liquidated damages, it
being acknowledged and agreed that it would be difficult or impossible to
determine Seller’s exact damages
and that
such amount does not constitute a penalty;
or
(c) upon
the
completion of XXX,
the
letter of credit shall be returned to Buyer.
6. PRELIMINARY
TITLE REPORT AND OBJECTIONS.
(a)
Escrow Agent has prepared a current Preliminary Title Report (each, a
“Report”
and,
collectively, the “Reports”)
for an
ALTA extended coverage title insurance policy (each, an “Owner’s
Policy”
and,
collectively, the “Owner’s
Policies”)
for a
purchaser to be designated. Each Report shows the status of title to the
applicable Property as of the date of such Report and the requirements of Escrow
Agent for the issuance of an Owner’s Policy corresponding to such Property as
described herein. The cost of a standard Owner’s Policy corresponding to each of
the Properties will be paid for by Seller; Buyer shall pay additional costs
for
extended coverage and
any
endorsements. In
addition to the Reports, Escrow Agent has produced copies of all documents
identified in Part Two of Schedule B of each Report (the “Title
Exceptions”).
Escrow Agent has incorporated ALTA/ACSM “as-built” surveys of the Properties
(collectively, the “Surveys”
and
individually, a “Survey”)
into
the Reports. With respect to each Property, the Report relating to such
Property, the Title Exceptions relating to such Report and the Survey relating
to such Property are collectively referred to herein as the “Title
Materials”.
(b) On
a
regular basis but in any event before 7 pm Eastern Time September 8
(“Review
Period”),
Buyer
shall furnish Seller with a written statement of objections, if any, to title
to
every Property and the matters shown by the Survey for every Property
(“Objections”).
So
long
as one Seller has marketable, fee simple title to each Property, subject only
to
a mortgage which Seller will release at XXX, Buyer
shall be deemed to have agreed to accept title subject to all matters reflected
in any Report and any Title Update and to the state of facts shown on the
Survey, other than Objections that have been timely given. However, in no event
shall Buyer be deemed to have agreed to accept title subject to (i) monetary
liens, encumbrances or security interests against the fee simple estate in
any
Property,
(ii)
encumbrances that have been voluntarily placed against any Property by Seller
after the Effective Date without Buyer’s prior written consent and that will not
otherwise be satisfied on or before XXX, or (iii) exceptions that can be removed
from the Report by Seller’s delivery of a customary owner’s title affidavit or
gap indemnity (all of the foregoing collectively referred to as the
“Seller’s
Required Removal Items”).
All
title
matters and exceptions set forth in a Report and any Title Update and the state
of facts shown on the Survey which, in each case, are not Objections, or which
are thereafter deemed to be accepted or waived by Buyer as provided below,
other
than the Seller’s Required Removal Items, are hereafter referred to as the
“Permitted
Exceptions”.
(c) If
Buyer
notifies Seller within the Review Period of Objections, then within five (5)
days after the end of the Review Period, September 8, 2006, Seller or Escrow
Agent shall notify Buyer in writing (“Seller’s
Title Response Notice”)
of the
Objections which Seller or Escrow Agent agrees to satisfy on or prior to XXX,
at
Seller’s sole cost and expense, and of the Objections that Seller cannot or will
not satisfy. Failure by Seller to respond to Buyer by the expiration of said
five (5) day response period shall be deemed as Seller’s election not to cure
the Objections raised by Buyer. Notwithstanding the foregoing, Seller shall,
in
any event, be obligated to satisfy by XXX
Seller’s
Required Title Removal Items. If Seller chooses not to satisfy all or any of the
Objections that Seller is not obligated to satisfy, Seller shall notify Buyer
within the allowed five (5) day period, then Buyer shall have the option on
or
before September 15, 2006 of either (i) terminating this Agreement in its
entirety under Section 7(c)
or (ii)
electing to consummate the purchase of the applicable Property or Properties,
in
which case Buyer shall be deemed to have waived such Objections and such
Objections shall become “Permitted
Exceptions”
for
all
purposes. Failure by Buyer to respond to Seller on or before September 15,
2006
shall be deemed its election to waive the applicable Objection(s), which shall
become “Permitted
Exceptions”.
7. BUYER’S
OTHER DILIGENCE.
(a) The
Review Period.
As to
any particular Properties, at Buyer’s sole cost, it may during the Review Period
conduct and approve any investigations, studies or tests deemed necessary by
Buyer, in Buyer’s sole discretion, to determine the feasibility of acquiring
each of the Properties (collectively, “Buyer’s
Diligence”).
Buyer
shall notify Seller promptly throughout the Review Period of any elements of
Buyer’s Diligence that might cause Buyer not to proceed with the
transaction.
(b) Right
of Entry.
As soon
as Seller can announce its specific intention to enter into this transaction,
the parties may agree from time to time on joint communications to certain
or
all Tenants. Buyer or its agents are permitted to inspect the Properties prior
to that time without disclosing a possible transaction. Subject to the prior
rights of Tenants in the Properties, Seller hereby grants to Buyer and Buyer’s
agents, employees and contractors the right to enter upon each of the
Properties, at any time or times during the Review Period, to conduct Buyer’s
Diligence. Buyer shall provide reasonable prior notice to Seller and the Tenant
and shall observe Tenant’s reasonable requirements about dealing with the on
site business. In consideration therefor, Buyer shall and does hereby agree
to
indemnify and hold Seller and the Tenants harmless from any and all liabilities,
claims, losses or damages, including, but not limited to, court costs and
attorneys’ fees, which may be incurred by Seller or the Tenants as a direct
result of Buyer’s Diligence. Buyer’s indemnity and hold harmless obligation
shall survive cancellation of this Agreement or XXX and is not limited to or
to
be satisfied from the Xxxxxxx Money Deposit.
(c) Cancellation.
If
Buyer determines in its sole and absolute discretion that the Properties in
the
aggregate are unacceptable, from the standpoint of marketability of title or
any
other element of Buyer’s Diligence or because the portfolio as a whole is not
suitable to Buyer in its sole and absolute discretion for investment as triple
net commercial real estate, then Buyer may by written notice to Seller and
Escrow Agent before the later of: (i) the end of the Review Period,
and
(ii) five days after Seller’s final Title Response, Notice terminate this
Agreement as to all of the Properties. The Xxxxxxx Money Deposit shall be
returned immediately to Buyer and, except as otherwise provided in this
Agreement, neither of the Parties shall have any further liability or obligation
under this Agreement. If
this
option is not exercised, the Xxxxxxx Money Deposit shall thereafter be
nonrefundable, except for Seller’s breach or a failure of a condition precedent
to Buyer’s obligation to close, and
this
Agreement shall continue in full force and effect.
8. DELIVERY
OF SELLER’S DILIGENCE MATERIALS.
(a) Deliveries
to Buyer.
Pursuant to the Confidentiality Agreement, Seller has made
available to
Buyer
at no cost to Buyer:
(i)
the
sales reported and base and percentage rents paid by Tenants for each
Property;
(ii)
the
Leases and the Guaranties and the Master Lease (as defined herein);
(iii)
the
Title Materials;
(iv)
all
materials received by Seller with respect to environmental assessments of the
Properties conducted in 2006 by third parties; and
(v)
all
materials received by Seller with respect to appraisals of the Properties
conducted in 2006 by third parties;
(collectively,
“Seller’s
Diligence Materials”)
(b) Delivery
by Buyer.
If this
Agreement is canceled as to all of the Properties for any reason, except
Seller’s willful default hereunder, Buyer agrees to deliver to Seller copies of
any additional investigations, studies or tests which Buyer may have elected
to
obtain.
(c) Certifications.
The
Seller shall use its best efforts to cause the Surveys and items in sections
8(a)(iv) and (a)(v) to be certified to Buyer in a form reasonably satisfactory
to Buyer prior to XXX. Seller agrees to pay, at XXX and only in the event XXX
occurs, up to $100,000.00 in the aggregate to the professionals who prepared
those items for the certification, and to the professionals who prepare for
Buyer prior to closing FASB market rent appraisals. Buyer either agrees to
pay
whatever additional amounts are required or to accept the items without
certification.
9. CLOSE
OF ESCROW.
XXX as
to each of the Properties shall occur in a single transaction on or before
September 26, 2006.
XXX
shall be a “New York” style closing, with payment of amounts due at XXX to be
paid once all Transfer Documents and other closing documents have been executed
and delivered and all conditions to closing have been satisfied. The recordation
of the Deeds and any other documents to be recorded shall take place after
XXX
and Seller will execute and deliver to Escrow Agent (if required by Escrow
Agent) a gap indemnity in order for Escrow Agent to be able to issue at XXX
the
title insurance coverage contemplated by the Owner’s Policies.
10. CLOSING
ADJUSTMENTS.
(a) Closing
Costs.
Seller
and Buyer agree to pay closing costs as indicated in this Agreement and in
the
escrow instructions attached hereto as Exhibit G, and by this reference
incorporated herein (the “Escrow
Instructions”).
At
XXX, Seller shall pay (i) the costs of releasing all liens, judgments, and
other
encumbrances originated by Seller
and of
recording such releases, (ii) any
recordation and
transfer
taxes
associated with the sale and
conveyance of
the
Properties
and the
recording of the Deeds,
which,
as
determined by Escrow Agent, are paid by sellers by local law or
custom,
(iii)
Seller’s portion of the title premium as provided in Section 6, (iv) one-half of
the fees and costs of the Escrow Agent which shall be $300 per Property, (v)
all
other costs to be paid by Seller under this Agreement. At XXX, Buyer shall
pay
(i) one-half of the fees and costs due Escrow Agent for its services which
shall
be $300 per Property, (ii) any
recordation and
transfer
taxes
associated with the sale and
conveyance of
the
Properties and
the
recording of the Deeds,
which,
as determined by Escrow Agent, are paid by buyers by local law or custom, (iii)
Buyer’s portion of the title premium as provided in Section 6, and (iv) all
other costs to be paid by Buyer under this Agreement. Except as otherwise
provided for in this Agreement, Seller and Buyer will each be solely responsible
for and bear all of their own respective expenses, including, without
limitation, expenses of legal counsel, accountants, and other advisors incurred
at any time in connection with pursuing or consummating the transaction.
Any
other
closing costs not specifically designated as the responsibility of either Party
in the Escrow Instructions or in this Agreement shall be paid by Seller and
Buyer according to the usual and customary allocation of the same by Escrow
Agent.
Seller
agrees that all closing costs payable by Seller shall be deducted from Seller’s
proceeds otherwise payable to Seller at XXX. Buyer shall deposit with Escrow
Agent sufficient cash to pay all of Buyer’s closing costs.
(b) Real
Property Taxes.
To the
extent that, prior to XXX, Seller has paid real estate taxes with respect to
any
of the Properties for which the current fiscal tax period ends after XXX, such
taxes shall be prorated at XXX, with Seller receiving a credit for the portion
of such taxes attributable to the period from and after XXX. To the extent
that
real estate taxes with respect to any of the Properties covering the fiscal
tax
period in which XXX occurs are not yet due and payable at the time of XXX,
Buyer
shall receive a credit at XXX for the portion of such taxes attributable to
the
period prior to XXX, which credit shall be based upon the current valuation
and
latest available tax rates (the “Buyer
Credit”).
Notwithstanding the foregoing, the Parties shall cooperate in good faith in
determining how to handle real estate tax prorations for taxes not yet due
and
payable at XXX, but due and payable shortly thereafter. To the extent the Buyer
Credit, if given, should be inaccurate based on the actual millage set forth
on
the tax xxxx if the current tax xxxx has not been received by XXX, either Party
may demand after XXX, that such taxes and assessments be reprorated based on
the
actual xxxx and shall be entitled to receive upon demand, any amount owing
to
such Party based on such reproration. With respect to any amounts paid by
Tenants for real estate taxes pursuant to their Leases either prior to or after
XXX (the “Tenant
Tax Payments”),
Seller shall be entitled to such amounts to the extent they relate to the period
prior to XXX and Buyer shall be entitled to such amounts to the extent they
relate to the period from and after XXX. Seller shall provide Buyer with
reasonably appropriate information reflecting the periods to which the Tenant
Tax Payments relate.
(c) Rents.
At XXX,
Buyer shall receive a credit for any base rent, percentage rent or other
additional rent paid by Tenants for the period beginning with the date of XXX
and for all time thereafter. Any other credits to Buyer shall be similarly
prorated.
Base
rent, percentage rent and other additional rent shall be prorated as of XXX.
Any
base rent, percentage rent or other additional rent received from a Tenant
after
XXX shall be applied in the following order of priority:
1. First,
to
any rents then owing for the two weeks prior to XXX until the Tenant under
the
applicable Lease is current in the payment of all such rent;
2. Second,
to the rents owing for the weeks following XXX until rents for that period
are
paid in full, subject to the normal two week lag; and
3. Third,
to
rents owing for any weeks preceding XXX until the Tenant, under the applicable
Lease, is current.
For
a
period of ninety (90) days after XXX, Buyer shall xxxx Tenants for all amounts
due under their Leases accruing prior to XXX (including, without limitation,
base rent, additional rent and percentage rent) and shall use reasonable efforts
to collect from Tenants any base rent, additional rent and percentage rent
owing
with respect to the period prior to XXX. To the extent delinquent amounts for
base rents, additional rents and percentage rents for the period prior to XXX
are collected by or on behalf of Buyer, subject to clauses 1 through 3 above,
such amounts, net of reasonable costs of collection, including without
limitation, reasonable attorney’s fees, shall be paid to Seller no later than
thirty (30) days
following the date on which such amounts have been received by or on behalf
of
Buyer. Buyer shall not be obligated to expend any funds or commence legal
proceedings to collect any unpaid base rents, additional rents or percentage
rents owing with respect to the period prior to XXX.
The
provisions of this Section shall survive XXX.
(d) Instructions.
This
Agreement, together with the Escrow Instructions, shall constitute escrow
instructions for the transaction. Such escrow instructions shall be construed
as
applying principally to Escrow Agent’s employment.
11. IRS
SECTION 1445.
Seller
shall furnish to Buyer in escrow by XXX a sworn affidavit (the “Non-Foreign
Affidavit”)
stating under penalty of perjury that neither Seller is a “foreign person” as
such term is defined in Section 1445(f)(3) of the Internal Revenue Code of
1986,
as amended (the “Code”).
If
Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold
(or
direct Escrow Agent to withhold) from the Additional Funds, an amount equal
to
the amount required to be so withheld pursuant to Section 1445(a) of the Code,
and such withheld funds shall be deposited with the Internal Revenue Service
as
required by such Section 1445(a) and the regulations promulgated thereunder.
The
amount withheld, if any, shall nevertheless be deemed to be part of the Purchase
Price paid to Seller.
12. LEASE
AND FRANCHISE RELATIONSHIPS.
(a)
Seller has informed Buyer that, prior to XXX, Seller desires to obtain from
the
Tenants through the estoppels under Section 14(d) an agreement that the separate
Credit Card Agreements between DFO and Tenants shall be coterminous with the
Franchise Agreements. This shall not be a condition of XXX, though DFO may
continue to pursue this agreement after XXX.
(b) At
Closing, Buyer and Seller shall enter into an agreement whereby Buyer agrees
that should DFO approve assignment of the Franchise Agreement relating to a
Property in the future, Buyer shall not unreasonably withhold, delay or
condition its consent to an assignment of the Tenant’s right, title, and
interest in the Lease relating to such Property to the assignee of such
Franchise Agreement. The agreement shall also provide that any such assignment
and consent shall be subject to such conditions as Buyer may reasonably require,
including, the execution by the assignor and assignee of an assignment and
assumption agreement reasonably acceptable to Buyer, and the assignor not being
released from any obligations or liabilities with respect to such Lease (unless
Buyer otherwise agrees in writing to such release). In that agreement DFO shall
agree to give Buyer, as landlord under the Lease, notice of any default under
the Franchise Agreement or any expiration or termination of the Franchise
Agreement on any Property.
13. MASTER
LEASE.
The
Properties identified on Exhibit F (collectively, the “Master
Lease Properties”)
are
leased by DRI, as landlord, to DI, as tenant, under a master lease covering
such
Properties and certain other Properties (the “Master
Lease”).
Each
Master Lease Property is subleased by DI to the applicable Tenant. Buyer shall
have the option of acquiring the Properties subject to or without the Master
Lease at XXX. If Buyer chooses to acquire the Master Lease, then at the XXX,
(i)
DRI and DI shall amend the Master Lease to remove each parcel not conveyed
to
Buyer, (ii) DRI shall assign its interest in the Master Lease to Buyer or any
wholly owned subsidiary of Buyer, and (iii) DI shall assign its interest in
the
Master Lease to an entity designated by Buyer. Otherwise, at the XXX, (i) DRI
and DI shall amend the Master Lease to remove each Property to be conveyed
to
Buyer, and (ii) DRI and DI shall join in the Assignments of Leases to Buyer
for
such Properties, so that the subleases for such Properties shall become direct
leases between Buyer and the applicable Tenants. In
any
event, from and after the XXX, there shall be no ongoing relationship between
the Properties and Seller’s other real estate.
14. BUYER’S
CONDITIONS PRECEDENT / CLOSING OBLIGATIONS OF SELLER.
In
addition to all other conditions precedent set forth in this Agreement, Buyer’s
obligations to perform under this Agreement and to close escrow are expressly
subject to the following, and the following shall be an affirmative obligation
of Seller at closing:
(a) the
delivery by Seller to Escrow Agent, for delivery to Buyer at XXX, of the
executed original Transfer Documents and the executed Non-Foreign
Affidavit;
(b) the
issuance of the Owner’s Policies (or a written commitment therefor) subject only
to the Permitted Exceptions;
(d) an
estoppel certificate executed by the applicable Tenant for each Lease and
Property in the form of Exhibit B, or in a form reasonably acceptable to Buyer,
dated within 30 days of the XXX. In the alternative, if despite Seller’s best
efforts it has not obtained by XXX a Tenant estoppel, Seller may supply a
landlord estoppel in the form of Exhibit B for up to 15 Properties
which
does not raise any issues with respect to such Lease, such as an outstanding
landlord default, adverse claim or material discrepancy (collectively, the
“Seller
Estoppels.”)
The
Parties shall continue to use reasonable best efforts following XXX to obtain
the remaining Tenant Estoppel Certificates (as of the XXX.) Until a conforming
post-XXX Tenant Estoppel Certificate is received for any Property, Seller’s
liability under the Seller Estoppel it delivers for such Property will not
be
subject to any of the limitations in Sections 15, 17 or 23.
In
addition, at XXX the amount of $25,000 will be escrowed for every Property
where
a tenant estoppel certificate has not been delivered which meets the
requirements of this Agreement. The amount escrowed will be released from time
to time upon delivery of the missing tenant estoppel certificates in a form
which complies with the terms of this paragraph. The parties will memorialize
these escrow terms in an escrow agreement to be agreed to by the parties prior
to XXX.
(e) the
deposit by Seller with Escrow Agent of (i) an executed customary owner’s title
affidavit,
if
required by the Title Company,
(ii) an
executed gap indemnity, if
required by the Title Company, and
(iii)
such authorization documentation of each party comprising Seller and such other
instruments and documents executed by Seller as shall be reasonably required
by
Escrow Agent to consummate this transaction;
(f) the
deposit with Escrow Agent of a letter from Seller to each Tenant concerning
the
transaction advising each tenant of the sale and assignment of the lease;
(g) delivery
to Buyer of fully-executed originals of each Lease
and each
Guaranty or copies certified to be complete and correct,
and
any
related
non-privileged or non-confidential
correspondence;
(h) delivery
to Buyer of all of the documents to be delivered by Seller pursuant to Section
12 and 13 of this Agreement;
(i) delivery
to Buyer of insurance certificates from all of the tenants evidencing that
tenants are carrying the insurance required under all of the Leases with Seller
identified as an additional insured on all such certificates. Seller shall
use
best efforts to get the insurance certificates updated prior to XXX to name
Buyer as the additional insured on such certificates; and
(j) satisfaction
of all of those Buyer contingencies listed more particularly on Exhibit
H
attached
hereto and incorporated herein by this reference.
15. SELLER’S
WARRANTIES AND COVENANTS.
Seller
hereby represents
and
warrants
to
Buyer
as of the Effective Date and again as of XXX that, except as disclosed in the
Seller’s Diligence Materials or on the disclosure schedule executed and
delivered by Seller and accepted by Buyer at the time of execution of this
Agreement (the “Disclosure
Schedule”):
(a) there
are
no unrecorded leases (other than the Leases)
to which
Seller is a party
which
may affect title to any of the Properties and the Master Lease is in place
as to
all of the Properties listed on Exhibit
F
as of
the date hereof and as of the date of XXX;
(b) to
the
knowledge of Seller’s legal and property management departments, there is no
pending
or
threatened (in
the
form of a written communication to Seller)
condemnation or taking by inverse condemnation of any of the Properties, or
any
portion thereof, by any governmental authorities;
(c) there
are
no suits or claims pending or, to knowledge of Seller’s legal department,
threatened (in
the
form of a written communication to Seller) with
respect to or in any manner affecting any of the Properties;
(d) this
transaction will not in any way violate any other material agreements to which
Seller is a party;
(e) Seller
has full power and authority to execute, deliver and perform under this
Agreement as well as under the Transfer Documents;
(f) no
consent of any third party is required in order for Seller to enter into this
Agreement and perform Seller’s obligations hereunder;
(g) Except
as
set forth in Seller’s Diligence Materials, Seller’s legal and property
management departments have no actual knowledge that there exists,
and
Seller itself has not caused any generation, production, location,
transportation, storage, treatment, discharge, disposal, release upon,
under or about any of the Properties of any Hazardous Materials
that
would trigger a response action by the applicable governmental
authority.“Hazardous
Materials”
shall
mean any flammables, explosives, radioactive materials, hazardous wastes,
hazardous and toxic substances or related materials, asbestos or any material
containing asbestos (including, without limitation, vinyl asbestos tile), or
any
other substance or material, defined as a “hazardous substance” by any federal,
state, or local environmental law, ordinance, rule or regulation including,
without limitation, the Federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, the Federal Hazardous
Materials Transportation Act, as amended, the Federal Resource Conservation
and
Recovery Act, as amended, and the rules and regulations adopted and promulgated
pursuant to each of the foregoing;
(h) to
the
knowledge
of Seller’s legal and property management departments
and
Seller’s management, (i) Seller has performed all landlord obligations under the
Leases, (ii) Tenants have performed all tenant obligations under the Leases,
except for: (x) compliance issues arising under the Franchise Agreements as
described in item (vi) below, (y) non-monetary obligations which Seller deems
immaterial, and (z) matters related to physical condition of improvements to
real property, which are subject solely to Section 18 and Buyer’s diligence;
(iii) Guarantors have performed all guarantor obligations under the Guaranties,
(iv) Seller, as landlord has committed no acts or failed to take any action
which would give Tenant the right to exercise any right to xxxxx, offset or
otherwise withhold any rent under any of the Leases; (v) no Tenant has alleged
a
default of Landlord under any of the Leases; and (vi) the Franchise Agreements
are in full force and effect, and DFO has not issued any notices of default
or
threatened terminations which are outstanding.
Seller
hereby covenants:
(1) without
Buyer’s prior written consent, Seller shall not, by voluntary or intentional act
or omission to act, further cause or create any easement, encumbrance, or
mechanic’s or materialmen’s liens, or similar liens or encumbrances to arise or
to be imposed upon any of the Properties or any portion thereof that
affects
title;
(2) should
Seller receive notice or knowledge of any information regarding any of the
matters set forth in this Section 15 after the Effective Date and prior to
XXX,
Seller will immediately notify Buyer of the same in writing; and
(3) Should
franchisor terminate a franchise agreement on any of the Properties identified
in the Disclosure Schedule as having an existing franchisee default within
one
(1) year from the XXX, then Buyer shall have the right to put any or all of
said
Properties where the Franchise Agreement is terminated back to Seller, by
delivering notice of said put within thirty (30) days of receipt of notice
of
said termination of franchise agreement from Seller. The put price for the
Properties shall be the purchase price paid hereunder, and Seller shall be
responsible for all transaction costs involved in putting the Property or
Properties back to Seller, excluding Buyer’s attorney’s fees and costs. The
parties shall agree on a Put Agreement on or before XXX..
Prior
to
XXX, Seller shall have the right to notify Buyer of any representations and
warranties of Seller contained in this Section 15 that fail to be true and
correct. If any of Seller’s representations and warranties shall fail to be true
and correct at or prior to XXX and such failure would have a material adverse
effect on Seller’s ability to consummate the transactions under this Agreement,
the Properties taken as whole or the operation thereof, Buyer shall have the
right to terminate this Agreement within five (5) business days after receiving
written notice from Seller of such failure. If Buyer timely exercises its right
to terminate this Agreement, the Xxxxxxx Money Deposit shall be returned
immediately to Buyer and, except as provided in Section 23 of this Agreement,
neither of the Parties shall have any further liability or obligation under
this
Agreement. If any of the foregoing representations or warranties shall fail
to
be true and correct at or prior to XXX and such failure would have a material
adverse effect on any Property, Buyer shall have the right to terminate this
Agreement with respect to such Property (each, a “Removed
Property”)
within
five (5) business days after receiving written notice from Seller of such
failure and the Purchase Price shall be reduced by the amount corresponding
to
such Removed Property as set forth in Exhibit A, and this Agreement shall
continue in full force and effect with respect to all remaining
Properties.
Notwithstanding
anything to the contrary contained herein, if prior to XXX, Buyer has knowledge
that any representation or warranty of Seller set forth in this Agreement is
not
true, and nevertheless Buyer proceeds to close the transaction, then Buyer
shall
be deemed to have irrevocably and unconditionally waived its rights to assert
any claim against Seller after XXX with respect to any misrepresentation of
which it had knowledge prior to XXX. For purposes of the preceding sentence
and
Section 16, the terms “knowledge,” “Buyer’s knowledge” or similar phrases mean
the actual conscious awareness of facts or other information by those employees
of Buyer actively involved in this transaction, without any duty to investigate,
make inquiry or review records. For purposes of this Section 15, Buyer shall
also be deemed to have knowledge of any and all documents and other information
provided to Buyer by or on behalf of Seller or otherwise obtained by Buyer
in
connection with Buyer’s Diligence.
Subject
to the foregoing, Seller shall and does hereby indemnify against, defend and
hold Buyer harmless from any Losses (as defined below) that Buyer may incur
as a
result of and to the extent of any material misrepresentation by Seller or
any
material breach of any of Seller’s warranties. The term “Losses”
means
and includes claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, diminutions in value, fines, penalties, charges, fees, expenses,
judgments, awards, amounts paid in settlement and damages of whatever kind
or
nature (including, without limitation, reasonable attorneys’ fees, court costs
and other costs of defense, if awarded by a court of law) which Buyer may
incur.
All
representations and warranties made in this Section 15 by Seller and the
foregoing indemnity and hold harmless obligations shall survive XXX, subject
to
the terms, conditions and limitations set forth in Section 23.
16. BUYER’S
WARRANTIES AND COVENANTS. Buyer
hereby represents
and
warrants
to
Seller as of the Effective Date and again as of XXX that:
(a) Buyer
has
full power and authority to execute, deliver and perform under this Agreement
as
well as under the Transfer Documents;
(b) Buyer
has
unrestricted access to funds in the amount of the Purchase Price and all other
sums required to be paid by Buyer to complete this transaction and
XXX.
(c) there
are
no actions or proceedings pending or to Buyer’s knowledge, threatened against
Buyer which may in any manner whatsoever affect the validity or enforceability
of this Agreement or any of the Transfer
Documents;
(d) the
execution, delivery and performance of this Agreement and the Transfer
Documents, have
not
and will not constitute a breach or default under any other agreement, law
or
court order under which Buyer is a party or may be bound; and
(e) no
consent of any third party is required in order for Buyer to enter into this
Agreement and perform Buyer’s obligations hereunder.
Buyer
hereby covenants that should Buyer receive notice or knowledge of any
information regarding any of the matters set forth in this Section 16 after
the
Effective Date and prior to XXX, Buyer will immediately notify Seller of the
same in writing;
All
representations
and
warranties
made in
this Section 16 by Buyer and the indemnity and hold harmless obligations below
shall survive the execution and delivery of this Agreement and XXX, subject
to
the terms, conditions and limitations set forth in Section 23. Buyer shall
and
does hereby indemnify against, defend and hold Seller harmless from any Losses
which Seller may incur as a result of and to the extent of (i) any material
misrepresentation by Buyer or any material breach of any of Buyer’s warranties,
or (ii) any actions, suits, proceedings or claims brought by third parties
against Seller relating to any alleged events, acts or omissions occurring
after
XXX with respect to any of the Properties conveyed to Buyer.
17. INDEMNITIES (a)
Without limiting the provisions of Section 15 and the indemnity obligations
under the Leases and Franchise Agreements or of any insurer, and subject to
the
limitation of liability provided in Section 23, Seller shall, at its sole cost
and expense, protect, defend, indemnify, release and hold Buyer harmless for,
from and against any and all Losses imposed upon or incurred by or asserted
against Buyer and directly or indirectly arising out of or in any way relating
to any third party actions, suits or proceedings (including,
without limitation, those suits referenced in the Disclosure Schedule or any
suits brought by the same plaintiffs to replace or amend said suits referenced
in the Disclosure Schedule) resulting
from events, acts or omissions occurring prior to XXX with respect to any of
the
Properties conveyed to Buyer, other than Environmental Matters.
The
term “Environmental
Matters”
shall
mean (i) the presence, release, treatment, transportation, storage, arranging
for disposal or disposal of any Hazardous Materials located in, on, above or
under any of the Properties, and (ii) any non-compliance with or violations
of
any Environmental Laws (or permits issued pursuant to any Environmental Law)
in
connection with activities, operations or environmental conditions on any of
the
Properties, including but not limited to any failure to comply with any order
of
any governmental authority in connection with any Environmental
Laws.
(b) Without
limiting the provisions of Section 16 and the indemnity obligations under the
Leases and Franchise Agreements or of any insurer, and subject to the limitation
of liability provided in Section 23, Buyer shall, at its sole cost and expense,
protect, defend, indemnify, release and hold Seller harmless for, from and
against any and all Losses imposed upon or incurred by or asserted against
Seller and directly or indirectly arising out of or in any way relating to
any
third party actions, suits or proceedings resulting from events, acts or
omissions occurring after XXX with respect to any of the Properties conveyed
to
Buyer, other than Environmental Matters.
Seller’s
obligations under this Section 17 shall survive XXX and the conveyance of title
to the Properties.
18. “AS
IS”.
Buyer
shall make such investigations and inspections of the Properties and the
Seller’s Diligence Materials to satisfy itself as to all matters relating to its
purchase of the Properties. Buyer acknowledges that Seller’s willingness to sell
the Properties to Buyer at the Purchase Price has been induced, in part, by
the
agreement of Buyer to accept the Properties in their “AS
IS, WHERE IS, WITH ALL FAULTS”
condition without any representation or warranty, either express or implied,
oral or written, about the Properties or the condition of the Properties, except
as expressly set forth in this Agreement. Except as expressly set forth in
this
Agreement, Buyer acknowledges that Seller has not made, does not make, and
specifically negates, renounces, and disclaims any representations, warranties,
promises, covenants, agreements, or guaranties of any kind or character
whatsoever, whether express or implied, oral or written, as to, concerning,
or
with respect to, (a) the value, investment potential, operation, or resale
of
the Properties or the nature, quality, or condition of the Properties,
including, but not limited to, the water, soil, and geology, (b) the suitability
of the Properties for any and all activities and uses that may be conducted
thereon or for any particular purpose, (c) the compliance of or by the
Properties with any laws, (d) the habitability, merchantability, marketability,
profitability, or fitness for a particular purpose of the Properties, (e) the
quality of construction and integrity of the Properties or the condition or
safety of the Properties or any improvements thereon, including, but not limited
to, plumbing, sewer, heating, ventilating and electrical systems, roofing,
air
conditioning, foundations, soils, geology, and lot size, (f) the environmental
condition of the Properties, including, but not limited to, the presence or
absence, location, or scope of any Hazardous Materials in, at, about, or under
the Properties, (g) the accuracy or completeness of any statements,
calculations, or conditions stated or set forth in Seller’s books and records
concerning the Properties or set forth in any of Seller’s offering materials for
the Properties, (h) the dimensions of the Properties or the accuracy of any
floor plans, square footage, lease abstracts, sketches, revenue, or expense
projections related to the Properties, (i) the operating performance, the income
and expenses of the Properties, or the economic status of the Properties, (j)
the leasing status of the Properties or the intentions of any parties for the
negotiation or execution of any Leases for any portion of the Properties, (k)
the ability of Buyer to obtain any and all necessary governmental approvals
or
permits for Buyer’s intended use and development of the Properties, (l) the
existence or non-existence of underground storage tanks, surface impoundments,
or landfills, (m) the potential for further development of the Properties,
(n)
tax consequences, (o) soil conditions, including the existence of instability,
past soil repairs, soil additions or conditions of soil fill, or susceptibility
to landslides, or the sufficiency of any undershoring, (p) whether, and to
the
extent to which the Parcels or any portion thereof are affected by any stream
(surface or underground), body of water, wetlands, flood prone area, flood
plain, floodway or special flood hazard, and (q) any other matter or attribute
with respect to the Properties.
Buyer
hereby acknowledges, represents and warrants that it is not in a disparate
bargaining position with respect to Seller in connection with this transaction,
that Buyer freely and fairly agreed to the waivers and conditions of this
Section 18 as part of the negotiations of this Agreement, and Buyer has been
represented by competent legal counsel and has conferred with such legal counsel
concerning the waivers and other conditions of this Section. The Purchase Price
shall not be reduced as a consequence of use, wear, tear, and natural
deterioration between the Effective Date and XXX.
Nothing
in this Section 18 shall be deemed to limit (i) Seller’s liability with respect
to Seller’s express representations, warranties and indemnities set forth
elsewhere in this Agreement that survive XXX or (ii) Seller’s liability under
the documents executed and delivered by Seller at XXX.
The
provision of this Section 18 shall survive XXX and conveyance of title to the
Properties.
19. BROKER’S
COMMISSION.
Concerning any brokerage commission, the Parties agree as follows:
(a) the
Parties represent
and warrant
to one another that neither
has
dealt
with any finder, broker or realtor in connection with this Agreement
or the
transaction contemplated hereby;
and
(b) if
any
person shall assert a claim to a finder’s fee or brokerage commission on account
of alleged employment as a finder or broker in connection with this Agreement,
the Party under whom the finder or broker is claiming shall indemnify and hold
the other Party harmless from and against any such claim and all costs, expenses
and liabilities incurred in connection with such claim or any action or
proceeding brought on such claim, including, but not limited to, counsel and
witness fees and court costs in defending against such claim. The provisions
of
this subsection shall survive cancellation of this Agreement or XXX.
20. ASSIGNMENT.
Buyer
may assign this Agreement in whole and not in part to Commercial Net Lease
Realty, LP, and other subsidiaries of Buyer which are wholly owned by Buyer.
The
assignee shall assume all Buyer’s pre- and post-XXX obligations for Seller’s
benefit,
provided,
that Buyer shall remain liable, along with the assignee, to Seller for the
performance of all of Buyer’s obligations hereunder.
There
shall be no change in the Xxxxxxx Money Deposit. Otherwise, this Agreement
may
not be assigned by either Party without the prior written consent of the other
Party.
21. ATTORNEYS’
FEES.
If
there is any litigation to enforce any provisions or rights of this Agreement,
the unsuccessful party in such litigation, as determined by the court, agrees
to
pay the successful party, as determined by the court, all costs and expenses,
including, but not limited to, reasonable attorneys’ fees incurred by the
successful party through all appeals, such fees to be determined by the
court.
22. RISK
OF LOSS.
Seller
shall bear all risk of loss, damage or taking of any of the Properties which
may
occur prior to XXX. In the event of any material loss, damage or taking prior
to
XXX,
at
Buyer’s sole option, by written notice to Seller and Escrow Agent
within
five (5) days after receipt of notice from Seller,
Buyer
may terminate this Agreement with respect to the applicable Property or
Properties (each, a “Removed
Property”)
and
the Purchase Price shall be reduced by the amount corresponding to such Removed
Property as set forth in Exhibit A. This Agreement shall continue in full force
and effect with respect to all remaining Properties. In the alternative, Buyer
may attempt to negotiate an appropriate reduction
in
the
Purchase Price for such Property. If Seller and Buyer cannot agree upon such
a
reduction
within a
reasonable period (not to exceed ten (10) days from the date Buyer receives
notice of the loss) Buyer may remove such Removed Property from this Agreement
as provided above. If Buyer waives
any such
loss or damage to any such Properties and closes escrow, Seller shall assign
to
Buyer, as of XXX all rights or claims for relief to the insurance or
condemnation proceeds. More
particularly, as to Site No. 6179, and Site No. 6638 identified on Exhibit
A
Seller
shall not agree to any settlement or any proposed payment from the proposed
condemning authority, and shall assign at closing to Buyer, in a form reasonably
acceptable to the parties, all of the rights and remedies available to the
owner
of the Property relating or arising out of the potential condemnations
identified in the Disclosure Schedule. No such event or the provisions of this
section shall cause a delay in XXX.
23. REMEDIES.
(a) Seller’s
Breach.
If
Seller fails to convey any Property and Lease as provided in this
Agreement,
or if
Seller breaches any representation in a manner which has a material adverse
effect on the benefits sought to be obtained by Buyer under this Agreement,
then
in either event Buyer may, at Buyer’s sole option, either: (i) by written notice
to Seller and Escrow Agent, cancel this Agreement in its entirety whereupon
the
Xxxxxxx Money Deposit shall be returned immediately by Escrow Agent to Buyer,
Seller shall reimburse Buyer for its third party out-of-pocket expenses incurred
in connection with this Agreement in a documented amount not to exceed
$500,000.00
and,
except as otherwise provided in this Agreement, neither of the Parties shall
have any further liability or obligation hereunder; or (ii) within one year
of
the notice of default file an action for specific performance against
Seller.
Notwithstanding the foregoing, if specific performance is unavailable as a
remedy to Buyer because of Seller’s affirmative acts
designed
to thwart or frustrate Buyer’s ability to seek specific performance,
Buyer
shall be entitled to pursue all rights and remedies available at law or in
equity, subject to the limitations set forth in Sections 15, 17 and
23.
(b) Buyer’s
Breach.
If
Buyer materially breaches this Agreement prior to XXX and such breach is not
cured within five (5) business days after notice of such breach is given by
Seller to Buyer, Seller shall be entitled, as its sole and exclusive remedy,
to
retain the Xxxxxxx Money Deposit in accordance with subsection 5(b) as Seller’s
agreed and total liquidated damages and not as a penalty. In addition, Buyer
shall remain liable for its other obligations identified as surviving under
this
Agreement and shall deliver to Seller, at no charge, copies of all
investigations and reports for the Properties obtained by Buyer. THE PARTIES
HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO
CONSUMMATE THIS SALE DUE TO BUYER’S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE, THE AMOUNT
OF
THE XXXXXXX MONEY DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER
WOULD INCUR IN SUCH EVENT. EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED,
AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION. THE FOREGOING SHALL BE DEEMED TO BE SELLER’S UNCONDITIONAL AND
IRREVOCABLE ELECTION OF A REMEDY FOR A DEFAULT BY BUYER UNDER THIS AGREEMENT
FOR
FAILURE TO CONSUMMATE A TRANSACTION. SELLER HEREBY WAIVES ANY RIGHT TO SEEK
ANY
EQUITABLE OR LEGAL REMEDIES AGAINST BUYER. If Buyer materially breaches this
Agreement after XXX and such breach is not cured within five (5) business days
after notice of such breach is given by Seller to Buyer, Seller shall have
such
remedies available at law or in equity, subject to the limitations set forth
in
Sections 16, 17 and 23.
(c) All
claims by either Party, other than indemnified third party claims under Section
17, shall be (i) identified in writing no later than the first anniversary
of
XXX, and, (ii) unless otherwise satisfied, be incorporated in a complaint filed
no later than sixty (60) days after the first anniversary of XXX. Nothing in
this Section 23 shall limit the amount Buyer or Seller may recover or limit
the
timing of seeking recovery under an indemnity claim under Section 17. The
provisions of this Section shall survive XXX.
24. NOTICES.
(a) Addresses.
Except
as otherwise required by law, any notice required or permitted hereunder shall
be in writing and shall be given by personal delivery, or by deposit in the
U.S.
Mail, certified, return receipt requested, postage prepaid, or telecopies
(fax), or any
express or overnight delivery service (e.g.,
Federal
Express), delivery charges prepaid, in each case, to the Parties at the
addresses set forth below or at such other address as a Party may designate
in
writing pursuant hereto:
| if to Seller: | Denny’s, Inc. |
| Xxxxx’x Realty, LLC | |
| 000 Xxxx Xxxx Xxxxxx | |
| Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000 | |
| Attention: Xxx Xxxxxxxx | |
| Tel.: (000) 000-0000 | |
| Fax: (000) 000-0000 | |
| EMAIL: XXxxxxxxx@Xxxxxx.xxx | |
| if to Buyer: | National Retail Properties, Inc. |
| 000 Xxxxx Xxxxxx Xxx., Xxxxx 000 | |
| Xxxxxxx, Xxxxxxx 00000 | |
| Attn: General Counsel | |
| Tel.: (000) 000-0000 | |
| Fax: (000) 000-0000 | |
| EMAIL xxxxx.xxxxxxxxx@xxxxxxx.xxx | |
| with copies to: | National Retail Properties, Inc. |
| 000 Xxxxx Xxxxxx Xxx., Xxxxx 000 | |
| Xxxxxxx, Xxxxxxx 00000 | |
| Attn: Xx. Xxxxxx Xxxxxxxxxx | |
| Senior Vice President Acquisitions | |
| Tel.: (000) 000-0000 | |
| Fax: (000) 000-0000 | |
| EMAIL: xxx.xxxxxxxxxx@xxxxxxx.xxx | |
| if to Escrow Agent: | First American Title Insurance Company |
| 0000 Xxxxxxx Xxxxxxx | |
| Xxxx Xxxxx, Xxxxxxx 00000 | |
| Attention: Xxxxxx Xxxxxxxxx | |
| Tel.: (000) 000-0000 | |
| Fax: (000) 000-0000 | |
| EMAIL: XXXxxxxxxxx@xxxxxxx.xxx |
(b) Effective
Date of Notices.
Notice
shall be deemed to have been given on the date on which such notice is
delivered,
or if
not delivered on a Business Day, then on the next Business Day,
if
notice is given by personal delivery, or
telecopies,
and on
the date of deposit in the mail, if mailed or deposited with the overnight
carrier, if used. Notice shall be deemed to have been received on the date
on
which the notice is received, if notice is given by personal delivery, and
on
the second (2nd) business day following deposit in the U.S. Mail, if notice
is
mailed. If escrow has opened, a copy of any notice given to a party shall also
be given to Escrow Agent by any
method
provided for herein.
25. ESCROW
CANCELLATION CHARGES.
If
escrow fails to close because of Seller’s default, Seller shall be liable for
any cancellation charges of Escrow Agent. If escrow fails to close because
of
Buyer’s default, Buyer shall be liable for any cancellation charges of Escrow
Agent. If escrow fails to close for any other reason, Seller shall be liable
for
any cancellation charges of Escrow Agent. The provisions of this Section 25
shall survive cancellation of this Agreement.
26. APPROVALS.
Concerning all matters in this Agreement requiring the consent or approval
of
any Party, the Parties agree that any such consent or approval shall not be
unreasonably withheld,
delayed, or conditioned
unless
otherwise provided in this Agreement.
27. ADDITIONAL
ACTS.
The
Parties agree to execute promptly such other documents and to perform such
other
acts as may be reasonably necessary to carry out the purpose and intent of
this
Agreement.
28. CONSTRUCTION.
The
terms and provisions of this Agreement represent the results of negotiations
among the Parties, each of which has been represented by counsel of its own
choosing, and neither of which has acted under any duress or compulsion, whether
legal, economic or otherwise. Consequently, the terms and provisions of this
Agreement shall be interpreted and construed in accordance with their usual
and
customary meanings, and the Parties each hereby waive the application of any
rule of law which would otherwise be applicable in connection with the
interpretation and construction of this Agreement that ambiguous or conflicting
terms or provisions contained in this Agreement shall be interpreted or
construed against the Party whose attorney prepared the executed Agreement
or
any earlier draft of the same.
29. TIME
OF ESSENCE.
Time is
of the essence of this Agreement. However, if this Agreement requires any act
to
be done or action to be taken on a date which is a Saturday, Sunday or legal
holiday
recognized by the federal government,
such
act or action shall be deemed to have been validly done or taken if done or
taken on the next succeeding day which is not a Saturday, Sunday or legal
holiday
recognized by the federal government,
and the
successive periods shall be deemed extended accordingly.
30. INTERPRETATION.
If
there is any specific and direct conflict between, or any ambiguity resulting
from, the terms and provisions of this Agreement and the terms and provisions
of
any document, instrument or other agreement executed in connection herewith
or
in furtherance hereof, including any Exhibits hereto, the same shall be
consistently interpreted in such manner as to give effect to the general
purposes and intention as expressed in this Agreement which shall be deemed
to
prevail and control.
31. HEADINGS.
The
headings of this Agreement are for reference only and shall not limit or define
the meaning of any provision of this Agreement.
32. FACSIMILE
AND COUNTERPARTS.
This
Agreement may be executed by facsimile and/or in any number of counterparts.
Each party may rely upon any facsimile or counterpart copy as if it were one
original document.
33. INCORPORATION
OF EXHIBITS BY REFERENCE AND INCORPORATION OF RECITALS.
All
Exhibits to this Agreement are fully incorporated herein as though set forth
at
length herein. The recitals set forth at the beginning of this Agreement are
true and correct and are hereby incorporated in the Agreement by this
reference.
The
Exhibits are:
|
Exhibit
A
|
List
of properties with addresses
|
|
Exhibit
A-1
|
Reserved
|
|
Exhibit
B
|
Buyer
form of Tenant/Landlord estoppel
|
|
Exhibit
C
|
Form
Assignment of Lease
|
|
Exhibit
D
|
List
of Leases and Guaranties
|
|
Reserved
E
|
Reserved
|
|
Exhibit
F
Exhibit
G
|
Master
Lease
Escrow
Instructions
|
|
Exhibit
H
Exhibit
I
|
Buyer’s
Closing Contingencies
Properties
in Need of Additional Environmental Testing
|
34. ENTIRE
AGREEMENT.
This
Agreement contains the entire agreement between the Parties and supersedes
all
prior agreements, oral or written, with respect to the subject matter hereof.
The provisions of this Agreement shall be construed as a whole and not strictly
for or against any Party.
35. 1031
EXCHANGE.
Buyer
and Seller shall reasonably cooperate with respect to a like-kind exchange
pursuant to Section 1031 of the Internal Revenue Code ("1031
Exchange");
provided such 1031 Exchange shall not impose on Buyer or Seller any additional
liability or financial obligation and shall not change XXX. Buyer and Seller
shall indemnify, defend and hold each other harmless against any claims, damages
or expenses arising in connection with or resulting from Buyer’s or Seller’s
1031 Exchange. Notwithstanding the foregoing, the transactions contemplated
by
this Agreement shall not be subject to or contingent upon either party’s ability
to consummate its 1031 Exchange.
36. JOINT
AND SEVERAL. The
entities comprising Seller shall be jointly and severally liable for the
obligations and liabilities of Seller under this Agreement.
37. SERVICING
AGREEMENT.
At XXX,
at Buyer’s election, Seller and Buyer shall enter into a servicing agreement in
form and substance acceptable to each of them pursuant to which Seller shall
agree to service, on behalf of Buyer, after XXX, the collection of payments
under the Leases for those Properties acquired by Buyer (the “Servicing
Agreement”).
As
the sole fee, the servicer may retain 1% of collections and remittances. The
Servicing Agreement shall provide that Seller may not terminate the Servicing
Agreement as to any Properties so long as the applicable franchise agreement
is
still in place as to said Properties. Buyer shall have the right to terminate
the Servicing Agreement upon 30 days notice to Seller. All monies collected
by
Seller from any location shall be applied first to the payment of rent and
all
other charges under the Lease until such obligations are current within
presently customary terms, with the balance of any collections available to
satisfy other obligations to Seller and its affiliates under the applicable
Franchise Agreements. The parties will agree upon the final form of the
Servicing Agreement prior to XXX.
38. SECURITIES
FILING.
Seller
has been advised by its counsel that the entry in this Agreement is the entry
into a “material definitive agreement” which requires Seller to file an 8K with
the Securities and Exchange Commission (“SEC”) within four (4) business days of
full execution of this Agreement. On or before September 12, 2006 Buyer and
Seller shall reasonably agree on the form of the 8K to be filed by Seller.
However, no other filings shall be made by either party before the XXX, unless
required by law, and only after the written approval of both parties to this
Agreement.
39. Additional
Environmental Matters.
There
is identified on Exhibit I four Properties (Site 6639 - Boise, ID, Site 0000
-
Xxxxxxxxxxxx, XX, Xxxx 0000 - Xxxxx, XX, and Site 7702 - St. Louis, MO) where
Buyer needs to receive, review and approve, in its sole and absolute discretion,
additional environmental testing on the Properties before Buyer can determine
if
those Properties are acceptable to Buyer. Therefore, Buyer and Seller hereby
acknowledge and agree (i) that Buyer and Seller shall use good faith efforts
to
come up with a plan of testing for each of those Properties between now and
XXX,
(ii) should Buyer and Seller fail to agree on a plan of testing on any or all
of
said Properties before XXX, Buyer may remove those Properties from the terms
and
conditions of this Agreement and closing shall proceed on the other Properties,
(iii) if Buyer and Seller agree on a plan of testing before XXX, said testing
shall be conducted after XXX on the other Properties at Seller’s expense, and
(iv) should the results of the testing on any or all of said Properties be
acceptable to Buyer, Buyer and Seller shall have a second XXX on said Property
or Properties, as applicable, on a date mutually agreeable to Buyer and Seller,
but in any event on or before December 15, 2006. If there is a second XXX as
to
any of the Properties identified on Exhibit I, the terms and conditions of
this
Agreement shall apply to that second XXX as well, but notwithstanding anything
else contained herein, the purchase price of these Properties at the second
XXX
shall not be increased on the second XXX because of the terms of Section 4(c)
hereof.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN
WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
Effective Date.
| SELLER: | DENNY'S INC., a California corporation |
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxx |
|
Printed
Name:
|
Xxxxxx
X. Xxxxxxxxx
|
|
Its:
|
President and Chief Executive Officer |
| DENNY'S REALTY, LLC | |
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxx |
|
Printed
Name:
|
Xxxxxx X. Xxxxxxxxx |
|
Its:
|
President and Chief Executive Officer |
| BUYER: | NATIONAL RETAIL PROPERTIES, INC. |
| a Maryland Corporation | |
|
By:
|
/s/ Xxxxxxxxxxx X. Xxxxxxxxx |
|
Printed
Name:
|
Xxxxxxxxxxx X. Xxxxxxxxx |
|
Its:
|
Senior Vice President |
ESCROW
AGENT’S ACCEPTANCE
The
foregoing fully executed Agreement together with the letter of credit as
Xxxxxxx
Money Deposit is accepted by the undersigned this 18th day of August, 2006,
which for the purposes of this Agreement shall be deemed to be the date of
opening of escrow. Escrow Agent hereby accepts the engagement to handle the
escrow established by this Agreement in accordance with the terms set forth
in
this Agreement.
|
FIRST
AMERICAN TITLE INSURANCE COMPANY
|
|
|
By:
|
/s/
Xxxxxxxx Xxxxxxx
|
|
Printed
Name:
|
Xxxxxxxx
Xxxxxxx
|
|
Title:
|
Escrow
Officer
|
|
|
