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Exhibit 10.8
AGREEMENT
This Agreement (this "AGREEMENT") is made and entered into as
of __________ 1997, by and between CAPTEC NET LEASE REALTY, INC., a Delaware
corporation with a principal place of business at 24 Frank Lloyd Wright Drive,
Ann Arbor, Michigan ("PURCHASER"), and ____________________, a Delaware
corporation with a principal place of business at 24 Frank Lloyd Wright Drive,
Ann Arbor, Michigan ("III Corp") and Patrick L. Beach, an individual and
resident of the State of Michigan with a principal place of business at 24 Frank
Lloyd Wright Drive, Ann Arbor, Michigan ("Beach") (III Corp. and Beach each
being hereinafter referred to individually as a "SELLER" and collectively as the
"SELLERS").
WHEREAS, III Corp and Beach are the general partners of Captec
Franchise Capital Partners L.P. III, a Delaware limited partnership (the
"Partnership") engaged in the business of the acquisition, ownership,
development and net leasing of commercial real properties ("the Business") and;
WHEREAS, Purchaser desires to acquire from each of III Corp
and Beach their general partnership interests in the Partnership which in the
aggregate constitute 100% of the general partnership interests in the
Partnership (the "General Partnership Interests") in exchange for cash as
hereinafter provided; and
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WHEREAS, Sellers desires to effect such exchange.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF SELLERS
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The Sellers represent and warrant to Purchaser as
follows:
SECTION 1.01 ORGANIZATION AND QUALIFICATION. The Partnership
is a limited partnership duly organized, validly existing, and in good standing
under the laws of the State of Delaware with all requisite power and authority,
and all necessary consents, authorizations, approvals, orders, licenses,
certificates, and permits of and from, and declarations and filings with, all
federal, state, local, and other governmental authorities and all courts and
other tribunals to own, lease, license, and use its properties and assets and to
carry on the Business. The Partnership is in good standing as a foreign
limited partnership in every jurisdiction in which its ownership, leasing,
licensing, or use of property or assets or the conduct of its business makes
such qualification necessary.
SECTION 1.02 CAPITALIZATION AND ORGANIZATION. The ownership
interests in the Partnership (the "Partnership Interests") consist of the
General Partnership Interests and _______ units of limited
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partnership interest which are owned and held beneficially and of record by the
persons identified on Exhibit "A" hereto. There is no commitment, plan, or
arrangement to issue, and no outstanding option, warrant, or other right calling
for the issuance of, any Partnership Interest, including, but not limited to,
the Units, or any security or other instrument convertible into, exercisable
for, or exchangeable for any Partnership Interest.
SECTION 1.03 FINANCIAL CONDITION.
(a) Sellers have delivered to Purchaser true and correct
copies of the following, initialled by each of Beach and the chief executive
officer of III Corp:
(1) Balance sheet of the Partnership as of the end of
each of the last two fiscal years;
(2) Balance sheet of the Partnership as of June 30,
1997; and
(3) Statement of income, statement of retained
earnings, and statement of cash flows of the Partnership for
each of the last two fiscal years and for the six months ended
July 31, 1997.
(b) Each such balance sheet presents fairly the financial
condition, assets, liabilities, and partners' equity of the Partnership as of
its date; each such statement of income and statement of retained earnings
presents fairly the results of operations of the Partnership for the period
indicated; and each such statement of cash flows presents fairly the information
purported to be shown therein. The financial statements referred
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to in this Section 1.03 have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved, are
correct and complete, and are in accordance with the books and records of
Partnership.
(c) Since December 31, 1996, and since June 30, 1997:
(1) There has at no time been a material adverse change in the
financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of the Partnership and the
Partnership has operated profitably.
(2) The Partnership has not authorized, declared, paid, or
effected any distribution in respect of the Partnership Interests or
any direct or indirect redemption, purchase, or other acquisition of
any Partnership Interests except as set forth in the Financial
Statements;
(3) The Business has been conducted in all respects only in
the ordinary course.
(4) The Partnership has not suffered an extraordinary loss
(whether or not covered by insurance) or waived any right of
substantial value.
(5) The Partnership shall pay any tax, other liability, or
expense accruing to Partnership and resulting from the preparation of,
or the transactions contemplated by, this Agreement. The Partnership
shall pay all such taxes, liabilities, and expenses which may result
from the transaction contemplated by this Agreement.
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(d) As of the date hereof, Sellers know of nothing which
materially adversely affects or in the future will materially adversely affect
the financial condition, results of operations, Business, properties, assets,
liabilities, or future prospects of the Partnership.
SECTION 1.04 TAX AND OTHER LIABILITIES.
(a) The Partnership has no liability of any nature,
accrued or contingent, including without limitation liabilities for federal,
state, local, or foreign taxes and liabilities to customers or suppliers, and
has received no notice of any such alleged liabilities, other than the
following:
(1) Liabilities for which full provision has been
made on the balance sheet (the "LAST BALANCE SHEET") as of June 30,
1997 (the "LAST BALANCE SHEET DATE") referred to in Section 1.03; and
(2) Other liabilities arising since the Last Balance
Sheet Date and prior to the Closing (as defined in Section 3.02) in the
ordinary course of business which are not inconsistent with the
representations and warranties of the Sellers or any other provision of
this Agreement.
(b) Without limiting the generality of the foregoing, the
amounts set up as provisions for taxes on the Last Balance Sheet are sufficient
for all accrued and unpaid federal, state, local, and foreign taxes of the
Partnership, whether or not due and payable and whether or not disputed, under
tax laws as in effect on
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the Last Balance Sheet Date or now in effect, for the period ended on such date
and for all fiscal years prior thereto. The United States Internal Revenue
Service (the "IRS") has not audited or settled any federal income tax
information returns of the Partnership.
(c) The Partnership has (i) filed all federal, state, local,
and foreign tax information and other returns required to be filed by it; (ii)
Sellers have delivered to Purchaser true and correct copies thereof; and (iii)
paid (or has established on the Last Balance Sheet a reserve for) all taxes,
assessments, and other governmental charges payable or remittable by it or
levied upon it or its properties, assets, income, or franchises which are due
and payable. There have been no reports as to adjustments received by
Partnership from any taxing authority during the past five years.
(d) Except as described in EXHIBIT A, the Partnership has paid
and discharged all federal, state, county, city, and other taxes, assessments,
excises and other levies relating to the Business or operations of the
Partnership, including, but not limited to, all sales and use taxes, real and
personal property taxes, income taxes, estimated taxes, excise taxes, gross
receipts taxes, franchise taxes, employment and payroll-related taxes, and
special assessments applicable to the Business. No claim for assessment or
collection of taxes (including any additions to tax, withholdings, penalties and
interest) has been made against Partnership, and no consent or agreement to
extend the period for any such assessment or collection is in effect. All monies
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required by law to be withheld or collected by Partnership from its employees or
other persons for taxes for periods occurring prior to Closing have been duly
collected or withheld, and if due, have been paid to the respective governmental
agencies or, if not yet due, have been set aside in accounts for such purpose or
accrued, provided for, and entered upon the books of the Partnership.
SECTION 1.05 LITIGATION AND CLAIMS. There is no litigation,
arbitration, claim, governmental or other proceeding (formal or informal), or
investigation pending, threatened, or to the best of the Sellers' knowledge in
prospect (or any basis therefor known to Partnership) with respect to the
Partnership or the Business (as defined below), and the Partnership has not
received notice of any such prospective litigation, arbitration, claim,
proceeding or investigation. The Partnership is not in violation of, or in
default with respect to, any law, rule, regulation, order, judgment, or decree;
nor is the Partnership required to take any action in order to avoid such
violation or default.
SECTION 1.06 ASSETS. The assets of the Partnership are listed
on EXHIBIT B (the "ASSETS"). The Partnership has good and marketable title in
fee simple absolute to the Assets, and all such Assets are owned free and clear
of all liens, security interests, pledges, charges and encumbrances except as
set forth on EXHIBIT B.
SECTION 1.07 CONTRACTS AND OTHER INSTRUMENTS.
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(a) EXHIBIT B accurately and completely sets forth the
information required to be contained therein with respect to the Partnership.
(b) The Partnership has furnished to Purchaser the limited
partnership agreement of the Partnership (the "Partnership Agreement") and all
amendments thereto, as presently in effect, and true and correct copies of all
contracts, agreements, and instruments referred to in EXHIBIT B, initialled by
the Sellers.
(c) Neither the Partnership nor, to best of Sellers'
knowledge, any other party to any such contract or agreement is now or expects
in the future to be in violation or breach of, or in default with respect to
complying with, any material provision thereof, and each such contract,
agreement, instrument, lease, or license is in full force and is the legal,
valid, and binding obligation of the parties thereto and is enforceable as to
them in accordance with its terms. Each such contract or agreement is a valid
and continuing arrangement or understanding. Neither the Partnership, nor to the
best of Sellers' knowledge, any other party to any such arrangement or
understanding has given notice of termination or taken any action inconsistent
with the continuance of such arrangement or understanding, and the execution,
delivery, and performance of this Agreement will not prejudice any such
arrangement or understanding in any way.
(d) The Partnership is not a party to, or bound by, any
contract or agreement or subject to any charter or other restriction, which has
had or, to the knowledge of the Sellers, may
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in the future have a material adverse effect on the financial condition, results
of operations, Business, or future prospects of the Partnership.
(e) The Partnership is not in violation or breach of, or in
default with respect to, any term of the Partnership Agreement or any other
constituent or governing document.
Section 1.08 EMPLOYEES.
(a) The Partnership has not or does not maintain or contribute to any
pension, profit-sharing, option, deferred compensation, severance, other
incentive plan, or any other type of employee benefit plan, fund or program
("EMPLOYEE BENEFIT PLAN") (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended, ("ERISA") or otherwise), nor has any
obligation to or customary arrangement with employees or former employees for
bonuses, incentive compensation, vacations, severance pay, insurance, or other
benefits, except as set forth in EXHIBIT C. There is no litigation, arbitration,
claim, governmental or other proceeding (formal or informal), or investigation
pending, threatened, or in prospect (or any basis therefor known to Partnership)
with respect to any such Employee Benefit Plan or related trust or with respect
to any fiduciary, administrator, or sponsor (in its capacity as such) of any
such Employee Benefit Plan.
SECTION 1.09 PATENTS, TRADEMARKS, ET CETERA. The Partnership
has not infringed, is not infringing, or has not
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received notice of infringement with asserted Intangibles of others. To the
knowledge of the Partnership, there is no infringement by others of Intangibles
of the Partnership. As far as Sellers can foresee, there is no Intangible of
others which may materially adversely affect the financial condition, results of
operations, Business, properties, assets, liabilities, or future prospects of
the Partnership.
SECTION 1.10 AUTHORITY TO SELL. Each of III Corp and Beach
have all requisite corporate and individual power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of III
Corp have been duly taken to authorize the execution, delivery, and performance
of this Agreement by III Corp (including, without limitation, action by III
Corp's stockholders). This Agreement has been duly authorized, executed, and
delivered by each of III Corp and Beach, is the legal, valid, and binding
obligation of each of them, and is enforceable as to each of them in accordance
with its terms. No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing with, any federal,
state, local, or other governmental authority or any court or other tribunal is
required by either III Corp or Beach for the execution, delivery, or performance
of this Agreement. Except for the consent of third parties to contracts or other
agreements to which the Partnership may be bound requiring consent to the
transfer of the General Partnership Interests to the Purchaser no consent of any
party to any contract, agreement, instrument, lease, license, arrangement,
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or understanding to which the Partnership, III Corp or Beach is a party is
required for the execution, delivery, or performance of this Agreement; and,
except with respect to consents of third parties to contracts and agreements,
the execution, delivery, and performance of this Agreement will not violate,
result in a breach of, conflict with, or (with or without the giving of notice
or the passage of time or both) entitle any party to terminate or call a
default under any such contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term of
the Partnership Agreement or any other constituent agreement of the Partnership
or violate, result in a breach of, or conflict with any law, rule, regulation,
order, judgment, or decree binding on the Partnership, III Corp or Beach or to
which any of the Partnership's operations, properties, the Assets or the
Business are subject.
SECTION 1.13 COMPLETENESS OF DISCLOSURE. No representation or
warranty by Sellers in this Agreement contains, or on the date of the Closing
will contain, any untrue statement of material fact, or omits, or on the date of
the Closing will omit, to state a material fact necessary to make the statements
made not misleading.
SECTION 1.14 ENVIRONMENTAL COMPLIANCE.
(a) The Partnership is in compliance in all material respects
with all laws, rules, and regulations relating to environmental protection with
respect to or affecting the Business, and the Partnership has not been notified
that it is potentially liable for costs incurred by any person as a result of a
release or
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threat thereof under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any similar law, whether state, federal,
county, or local, with respect to or affecting the Business or the Partnership.
(b) The Partnership has accurately prepared and timely filed
with the appropriate jurisdictions all reports and filings required of the
Partnership, if any, pursuant to any federal, state, or local law, regulation,
statute, ordinance, or order applicable to Partnership or its operations and
related to environmental protection.
(c) The Partnership has not entered into or received any
consent decree, compliance order or administrative order relating to
environmental protection.
(d) The Partnership has not entered into or received, nor is
the Partnership in default under, any judgment, order, writ, injunction, or
decree of any federal, state, or municipal court or other governmental authority
applicable to the Partnership and relating to environmental protection. The
Partnership has not received notice of any lien which has arisen on any of the
Assets under federal, state, or local laws, rules, or regulations relating to
environmental protection.
(e) The Partnership has all material permits, licenses, and
other authorizations ("ENVIRONMENTAL PERMITS") required for conduct of the
Business and ownership of the Assets under federal, state, and local laws
relating to the protection of the
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environment. EXHIBIT D contains a complete list and description of each
Environmental Permit, if any.
(f) The Partnership has not received notice, nor is the
Partnership aware of, any suit or action, claim, investigation, inquiry, or
proceeding pending or threatened against or affecting the Partnership or the
Assets relating to environmental matters.
(g) The Partnership has not, by its own act or omission,
disposed, emitted, discharged, released, or placed any hazardous or
toxic substances, pollutants, contaminants, petroleum, gas products or
asbestos-containing materials, which require special handling pursuant to law or
regulation (as any of such terms may be defined under federal, state, or local
law, collectively the "HAZARDOUS MATERIALS") on, in, at, or about any facilities
owned or used for or in connection with the Business during the Partnership's
occupancy of any real property which is or has previously been occupied by the
Partnership. The Partnership has not disposed, released, buried, or placed any
Hazardous Materials on any properties or facilities used by the Partnership for
the Business which have resulted in contamination or beneath any of the
properties or facilities used by the Partnership for the Business.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Purchaser represents and warrants to Partnership as follows:
SECTION 2.01 ORGANIZATION. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, with all requisite power and authority to own, lease, license, and use
its properties and assets and to carry on the business in which it is now
engaged and the business in which it contemplates engaging. The Purchaser has
all necessary consents, authorizations, approvals, orders, licenses,
certificates, and permits of and from, and declaration and filing with all
federal, state, local and other governmental authorities and all courts and
other tribunals to own, lease, license and use its properties and assets in the
conduct of its business as presently conducted.
SECTION 2.02 AUTHORITY TO BUY. Purchaser has all requisite
power and authority to execute, deliver, and perform this Agreement. All
necessary corporate proceedings of Purchaser have been duly taken to authorize
the execution, delivery, and performance of this Agreement by Purchaser. This
Agreement has been duly authorized, executed, and delivered by Purchaser, is the
legal, valid, and binding obligation of Purchaser, and is enforceable as to
Purchaser in accordance with its terms.
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ARTICLE III
THE EXCHANGE
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SECTION 3.01 TERMS OF THE EXCHANGE. On the basis of the
representations, warranties, covenants, and agreements contained in this
Agreement and subject to the terms and conditions of this Agreement:
(a) Sellers shall sell, assign, transfer, and convey to
Purchaser at the Closing the General Partnership Interests Purchaser shall:
(1) Deliver at the Closing to the Sellers in the
aggregate $___________ representing the price to be paid by Purchaser
for the General Partnership Interests in cash or by certified or
official bank check or checks payable to the order of the Sellers, or
wire transfer to be allocated between the Sellers as may be agreed upon
between them;
(2) Assume at the Closing the General Partnership
Interests including all obligations and liabilities of Partnership
described in EXHIBIT B hereto and pursuant to this Agreement.
SECTION 3.02 THE CLOSING. The closing of the transactions
contemplated herein (the "CLOSING") shall take place at the offices of the
Partnership, 24 Frank Lloyd Wright Drive, Ann Arbor, Michigan local time, within
five (5) business days of the receipt by the Sellers of all third party consents
to the consummation of the transaction contemplated by this Agreement,
including, but not
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limited to, any approval of the limited partners of the Partnership
required by the Partnership Agreement.
Section 3.03 TRANSACTIONS AT THE CLOSING. The following
transactions shall take place at the Closing:
(a) the Sellers shall deliver to Purchaser all such
instruments or documents as in the opinion of counsel to Purchaser may be
necessary or desirable to evidence or perfect the sale, assignment and transfer
of the General Partnership Interests to the Purchaser in each case free and
clear of all liens, mortgages, security interests, pledges, charges, and
encumbrances. The Sellers also shall deliver to Purchaser all books and records
concerning the Partnerships.
(b) Purchaser shall deliver to the Sellers the following:
(i) the Purchase Price in cash or by certified or official
bank check or checks payable to the order of Sellers in such amounts as
may be agreed upon between them;
(ii) an instrument of assumption of the General Partnership
Interests substantially in the form of EXHIBIT F hereto;
(iii) any other documents required to finalize the
transactions contemplated herein.
(c) Sellers shall deliver to the Purchaser all books and
records of, and other documents and information concerning or relating to, the
Partnership, the Business and/or the Assets.
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ARTICLE IV
CONDITIONS TO OBLIGATIONS OF PURCHASER
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The obligations of Purchaser under this Agreement are
subject, at the option of Purchaser, to the following conditions:
SECTION 4.01 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH
CONDITIONS. All representations and warranties of the Sellers contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing as though such representations and warranties were then made by the
Sellers and regardless of any investigation or knowledge or lack thereof on the
part of the Sellers or changes beyond their control. As of the Closing the
Sellers and the Partnership shall have performed and complied with all covenants
and agreements and satisfied all conditions required to be performed and
complied with by it at or before such time by this Agreement.
SECTION 4.02 OTHER CLOSING DOCUMENTS. The Sellers shall have
delivered to Purchaser at or prior to the Closing such other documents as
Purchaser may reasonably request in order to enable Purchaser to determine
whether the conditions to their obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.
SECTION 4.03 REVIEW OF PROCEEDINGS. All actions, proceedings,
instruments and documents required to carry out this Agreement or incidental
thereto and all other related legal matters shall be subject to the reasonable
approval of counsel to
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Purchaser, and the Sellers shall have furnished such counsel such documents as
such counsel may have reasonably requested for the purpose of enabling them to
pass upon such matters.
SECTION 4.04 LEGAL ACTION. There shall not have been
instituted or threatened any legal proceeding relating to, or seeking to
prohibit or otherwise challenge the consummation of, the transactions
contemplated by this Agreement, or to obtain substantial damages with respect
thereto.
SECTION 4.05 APPROVAL OF THE LIMITED PARTNERS. If required
under applicable law or the Partnership Agreement, the consummation of any of
the transactions contemplated by this Agreement shall have been approved by the
affirmative vote of the Limited Partners.
SECTION 4.06 CONTRACTUAL CONSENTS NEEDED. The Sellers shall
have obtained at or prior to the Closing any consents required for the
consummation of the transactions contemplated by this Agreement from any party
to any contract, agreement, instrument, lease, license, arrangement, or
understanding to which the Partnership or either Seller is a party, or to which
the Business or the Assets are subject.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF SELLERS
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The obligations of Sellers under this Agreement are subject,
at the option of Partnership, to the following conditions:
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SECTION 5.01 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH
CONDITIONS. All representations and warranties of Purchaser contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing as though such representations and warranties were then made in
exactly the same language by Purchaser and regardless of knowledge or lack
thereof on the part of Purchaser or changes beyond its control. As of the
Closing Purchaser shall have performed and complied with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by any of them at or before such time by this Agreement.
SECTION 5.02 LEGAL ACTION. There shall not have been
instituted or threatened any legal proceeding relating to, or seeking to
prohibit or otherwise challenge the consummation of, the transactions
contemplated by this Agreement, or to obtain substantial damages with respect
thereto.
ARTICLE VI
COVENANTS AND AGREEMENTS OF PARTNERSHIP
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Partnership covenants and agrees as follows:
SECTION 6.01 CONDUCT OF BUSINESS. The Partnership will
conduct, and the Sellers will cause the Partnership to conduct its affairs so
that at the Closing no representation or warranty of the Sellers will be
inaccurate, no covenant or agreement of the Partnership will be breached, and no
condition in this Agreement
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will remain unfulfilled by reason of the actions or omissions of the Sellers or
the Partnership. Except as otherwise requested by Purchaser in writing, until
the Closing or the earlier rightful termination of this Agreement, the
Partnership will use its best efforts to preserve the Business and operations of
the Partnership intact, to keep available the services of its present personnel,
to preserve in full force and effect the contracts, agreements, instruments,
leases, licenses, arrangements, understandings and other Assets of the
Partnership, and to preserve the good will of its suppliers, customers, and
others having business relations with any of them. Until the Closing or earlier
rightful termination of this Agreement, the Partnership will conduct the
Business and operations in all respects only in the ordinary course.
SECTION 6.02 ADVICE OF CHANGES. Until the Closing or the
earlier rightful termination of this Agreement, the Partnership will immediately
advise Purchaser in a detailed written notice of any fact or occurrence or any
pending or threatened occurrence of which it obtains knowledge and which (if
existing and known at the date of the execution of this Agreement) would have
been required to be set forth or disclosed in or pursuant to this Agreement or
an Exhibit hereto, which (if existing and known at any time prior to or at the
Closing) would make the performance by any party of a covenant contained in this
Agreement impossible or make such performance materially more difficult than in
the absence of such fact or occurrence, or which (if existing and known at the
time of the Closing) would cause a condition to any party's obligations
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under this Agreement not to be fully satisfied, or which otherwise will
materially adversely affect the Business for any reason whatsoever.
SECTION 6.03 CONFIDENTIALITY. Sellers shall insure that all
confidential information concerning the Partnership which the Sellers and any of
their shareholders, officers, directors, employees, attorneys, or agents may now
possess or may hereafter create or obtain relating to the financial condition,
results of operations, business, properties, assets, liabilities, or future
prospects of Partnership, any Affiliate, or any customer or client of the
Partnership published, disclosed, or made accessible by any of them to any other
person or entity at any time or used by any of them except pending the Closing
in the Business and for the benefit of Partnership, in each case without the
prior written consent of Purchaser; provided, however, that the restrictions of
this sentence shall not apply (a) as may otherwise be required by law, (b) as
may be necessary or appropriate in connection with the enforcement of this
Agreement, or (c) to the extent such information shall have otherwise become
publicly available. The Partnership shall, and shall cause all other such
persons and entities to, deliver to Purchaser all tangible evidence of such
confidential information to which the restrictions of the foregoing sentence
apply at the Closing or the earlier rightful termination of this Agreement.
ARTICLE VII
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SURVIVAL; INDEMNIFICATION
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SECTION 7.01. SURVIVAL. The several representations,
warranties and covenants of the Sellers contained in Articles I and VI of this
Agreement shall survive until the first anniversary of the Closing, irrespective
of any investigation made by or on behalf of any party.
SECTION 7.02 INDEMNIFICATION BY SELLERS. Sellers jointly and
severally agree to indemnify and hold Purchaser and its officers, directors,
controlling persons (if any), employees, attorneys, agents, stockholders,
successors and assigns, in each case past, present, or as they may exist at any
time after the date of this Agreement (the "INDEMNITEES") harmless from and
against any and all claims, suits, actions, proceedings (formal or informal),
actions, investigations, judgments, deficiencies, damages, settlements,
liabilities, losses, costs, expenses, and legal and other expenses (including
legal fees and expenses of attorneys chosen by any Indemnitee, penalties, and
interest), as and when incurred arising out of or based on (i) any breach of
any representation, warranty, covenant, or agreement of Sellers contained in
this Agreement.
SECTION 7.03. INDEMNIFICATION BY PURCHASER. Purchaser shall
indemnify, defend and hold each of the Sellers and their respective officers,
directors, controlling persons, employees, attorneys, agents, stockholders,
successors and assigns, in each case past, present, or as they may exist at any
time after the date
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of this Agreement (the "INDEMNIFIED PARTIES") harmless from and against any and
all claims, suits, actions, proceedings (formal or informal), investigations,
judgments, deficiencies, damages, settlements, liabilities, losses, costs,
expenses, and legal and other expenses (including legal fees and expenses of
attorneys chosen by any Indemnified Party), penalties and interest, as and when
incurred arising out of or based on (i) any breach of any representation,
warranty, covenant, or agreement of Purchaser contained in this Agreement, or
(ii) any and all claims against the Partnership of any kind or nature
concerning, related to or arising out of the Partnership or its Business;
provided, however, that Sellers shall not be entitled to indemnification for any
liability resulting from or arising out of any breach of fiduciary duty, willful
misconduct or gross negligence by the Seller.
ARTICLE VIII
MISCELLANEOUS
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SECTION 8.01 FURTHER ACTIONS. At any time and from time to
time, each party agrees, at its expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
SECTION 8.02 MODIFICATION. This Agreement and the Exhibits
hereto set forth the entire understanding of the parties with respect to the
subject matter hereof supersede all existing
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agreements among them concerning such subject matter, and may be modified only
by a written instrument duly executed by each party.
SECTION 8.03 NOTICES. Any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested or delivered against receipt
to the party to whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 8.03)
with a copy to each of the other parties hereto. Any notice or other
communication given by certified mail (or by such comparable method) shall be
deemed given at the time of certification thereof (or comparable act), except
for a notice changing a party's address which will be deemed given at the time
of receipt thereof.
SECTION 8.04 WAIVER. Any waiver by any party of a breach of
any provision of this Agreement shall not operate as or be construed to be a
waiver of any other breach of that provision or of any breach of any other
provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions will
not be considered a
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waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing and, in the case of a corporate party, be authorized by a resolution
of the Board of Directors or by an officer of the waiving party.
SECTION 8.05 BINDING EFFECT. The provisions of this Agreement
shall be binding upon and inure to the benefit of the Sellers and Purchaser and
their respective successors and assigns.
SECTION 8.06 NO THIRD PARTY BENEFICIARIES. This Agreement does
not create, and shall not be construed as creating, any rights enforceable by
any person not a party to this Agreement (except as provided in Section 8.05).
SECTION 8.07 SEVERABILITY. If any provision of this Agreement
is invalid, illegal, or unenforceable, the balance of this Agreement shall
remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances.
SECTION 8.08 HEADINGS. The headings in this Agreement are
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
SECTION 8.09 COUNTERPARTS; GOVERNING LAW. This Agreement may
be executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by and construed in accordance with the laws of
the State of Michigan without giving effect to conflict of laws.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
CAPTEC NET LEASE REALTY, INC.
By:
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Name:
Title:
By:
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Name:
Title:
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Patrick L. Beach
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