PURCHASE AGREEMENT
Taco Cabana, San Antonio, TX
This AGREEMENT, entered into effective as of the 14 of February,
1997 .
l. Parties. Seller is AEI Real Estate Fund XVIII Limited
Partnership ("Seller"), Seller presently holds an undivided
62.3243% interest in the fee title to that certain real property
legally described in the attached Exhibit "A". (the "Entire
Property") Buyer is Xxxxx Xxxxxx, Xx. ("Buyer"). Seller wishes
to sell and Buyer wishes to buy a portion as Tenant in Common of
Seller's interest in the Entire Property.
2. Property. The Property to be sold to Buyer in this transaction
consists of an undivided 11.5896% percentage interest
(hereinafter, simply the "Property") as Tenant in Common in the
Entire Property. To the best of Seller's knowledge, the purchase
of the Entire Property is the purchase of an interest in real
property under Texas law.
3. Purchase Price . The purchase price for this percentage
interest in the Entire Property is $218,050 all cash.
4. Terms. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed, or otherwise
dispersed pursuant to the terms of this Agreement.
(b) Buyer will deposit the balance of the purchase price,
$213,050 (the "Second Payment") into escrow in sufficient
time to allow escrow to close on the Closing Date.
(c) Seller hereby acknowledges receipt of the sum of $50.00
cash (the "Option Consideration") from Buyer, as
consideration for execution of this Agreement by Seller. If
the purchase and sale of the Property is consummated
pursuant to this Agreement, the Option Consideration shall
be applied toward the purchase price paid by Buyer. If this
Agreement is terminated pursuant to a default by Seller
hereunder, the Option Consideration shall be immediately
returned by Seller to Buyer. If this Agreement is
terminated for any reason other than a default by Seller
hereunder, Seller shall be entitled to retain the Option
Consideration.
5 Closing Date. Escrow shall close on or before March 7, 1997.
6 . Due Diligence. Buyer will have until the expiration of the
fifth business day after delivery of each of following items, to
be supplied by Seller, to conduct all of its inspections and due
diligence and satisfy itself regarding each item, the Property,
and this transaction. Buyer agrees to indemnify and hold Seller
harmless for any loss or damage to the Leased Premises or persons
caused by Buyer or its agents arising out of such physical
inspections of the Entire Property. (The "Review Period")
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) Copies of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) Copies of an "as built" survey of the Property done
concurrent with Seller's acquisition of the Property.
(d) Lease of the Entire Property showing occupancy date,
lease expiration date, rent, and Guarantys, if any,
accompanied by such tenant financial statements as may have
been provided most recently to Seller by the Tenant and/or
Guarantors.
It is a contingency upon Seller's obligations hereunder that
two (2) copies of Co-Tenancy Agreement in the form attached
hereto duly executed by Buyer and Seller and dated on escrow
Closing Date be delivered to the Seller on the Closing Date.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
any Review Period. Such notice shall be deemed effective only
upon receipt by Seller. If this Agreement is not canceled as set
forth above, the First Payment shall be non-refundable unless
Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under sections 15(a) of this Agreement (which will
survive), Buyer (after execution of such documents reasonably
requested by Seller to evidence the termination hereof) shall be
returned its First Payment, and Buyer will have absolutely no
rights, claims or interest of any type in connection with the
Property or this transaction, regardless of any alleged conduct
by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to have canceled this Agreement and
relinquish all rights in and to the Property. If this Agreement
is not canceled and the Second Payment is made when required, all
of Buyer's conditions and contingencies will be deemed satisfied.
7. Escrow. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this Agreement by both parties. The
escrow holder will be a nationally-recognized escrow company
selected by Seller. A copy of this Agreement will be delivered to
the escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. Title. Closing will be conditioned on the commitment of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
Buyer will own insurable title to the Property subject only to:
the title company's standard exceptions; current real property
taxes and assessments; survey exceptions; the rights of parties
in possession pursuant to the lease defined in paragraph 11
below; and other items of record disclosed to Buyer during the
Review Period.
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this Agreement according to its terms.
9. Closing Costs. Seller will pay one-half of escrow fees,
the cost of the title commitment and any brokerage commissions
payable except those brokerage commissions incurred by Buyer.
The Buyer will pay the cost of issuing a Standard Owners Title
Insurance Policy in the full amount of the purchase price, if
Buyer shall decide to purchase the same. Buyer will pay all
recording fees, one-half of the escrow fees, and the cost of an
update to the Survey in Sellers possession (if an update is
required by buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. Real Estate Taxes, Special Assessments and Prorations.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid levied and pending special
assessments existing on the date of Closing shall be the
responsibility of Buyer and Seller in proportion to their
respective Tenant in Common interests, pro-rated, however,
to the date of closing; for the period prior to closing,
such taxes and asessments shall be the responsibility of
Seller, if Tenant shall not pay the same. Seller and Buyer
shall likewise pay in proportion to their ownership
interests all taxes due and payable in the year after
Closing and any unpaid installments of special assessments
payable therewith and thereafter, if such unpaid levied and
pending special assessments and real estate taxes are not
paid by any tenant of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
date of Closing. Seller shall be entitled to all income
earned and shall be responsible for all expenses incurred
prior to the date of Closing, and Buyer shall be entitled to
its proportionate share of all income earned and shall be
responsible for its proportionate share of all operating
expenses of the Property incurred on and after the date of
closing, if the same are not paid by any tenant of the
Entire Property.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between Seller and
Taco Cabana, Inc. ("lessee"), dated July 19, 1991 which was
assigned to Texas Taco Cabana LP pursuant to the General
Assignment and Assumption of Leases between Taco Cabana,
Inc. and TC Lease Holdings III, V and VI, Inc. dated October
31, 1993 and pursuant to the General Assignment and
Assumption of Leases between TC Lease Holding III V and VI,
Inc. and Texas Taco Cabana LP dated October 31, 1993 and
pursuant to the Consents and Acknowledgments Concerning Net
Lease Agreements between Taco Cabana, Inc. and AEI Real
Estate Fund XVIII Limited Partnership dated June 2, 1994,
Seller is not aware of any leases of the Property. A copy
of the above referenced documents is incorporated herein as
"Exhibit "B". The above referenced lease agreement has an
option to purchase in favor of the Tenant as set forth in
Article 34 of said lease agreement.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the Closing Date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts prior to the Closing Date that would materially
affect the Property and be binding on Buyer after the
Closing Date without Buyer's prior consent, which will not
be unreasonably withheld. However, Buyer acknowledges that
Seller retains the right both prior to and after the Closing
Date to freely transfer all or a portion of Seller's
remaining undivided interest in the Entire Property provided
such sale shall not encumber the Property being purchased by
Buyer in violation of the terms hereof or the contemplated
Co-Tenancy Agreement.
12. Disclosures.
(a) To the best of Seller's knowledge: there are now, and
at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and all such items are in
good operating condition and repair and in compliance with
all applicable governmental , zoning and land use laws,
ordinances, regulations and requirements.
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the use and operation of the Property after the
Closing in the manner in which the Property has been used
and operated prior to the date of this Agreement.
(d) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and groundwater conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property.
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Property arising out of Seller's negligence or intentional
misconduct in violation of applicable state or federal law
or regulation.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein.
(f) Buyer acknowledges that, having been given the
opportunity to inspect the Property and such financial
information on the Lessee and Guarantors of the Lease as
Buyer or its advisors shall request, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided except as
set forth herein. Buyer further acknowledges that the
information provided and to be provided by Seller with
respect to the Property and to the Lessee and Guarantors of
Lease was obtained from a variety of sources and Seller
neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information. The sale of the Property as provided for
herein is made on an "AS IS" basis, and Buyer expressly
acknowledges that, in consideration of the agreements of
Seller herein, except as otherwise specified herein, Seller
makes no warranty or representation, express or implied, or
arising by operation of law, including, but not limited to,
any warranty or condition, habitability, tenantability,
suitability for commercial purposes, merchantability, or
fitness for a particular purpose, in respect of the
Property. This provision shall survive closing.
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
13. Closing.
(a) Before the Closing Date, Seller will deposit into
escrow an executed special warranty deed conveying insurable
title of the Property to Buyer, subject to the encumbrances
contained in paragraph 8 above.
(b) On or before the Closing Date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign the Co-
Tenancy Agreement, and deliver to the escrow holder any
other documents reasonably required by the escrow holder to
close escrow.
(c) On the Closing Date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
owners title policy purchase by buyer; immediately deliver
to Seller the portion of the purchase price deposited into
escrow by cashier's check or wire transfer (less debits and
prorations, if any); deliver to Seller and Buyer a signed
counterpart of the escrow holder's certified closing
statement and take all other actions necessary to close
escrow.
14. Defaults. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. Seller shall retain all remedies available to Seller at
law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the second payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
assurances as Seller or the Title Company may require and
be reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$10,000.00, this Agreement shall become null and void, at
Buyer's option exercised, if at all, by written notice to
Seller within ten (10) days after Buyer has received written
notice from Seller of said destruction or damage. Seller,
however, shall have the right to adjust or settle any
insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any five-day period provided for above in this Subparagraph
16a for Buyer to elect to terminate this Agreement has
expired or Buyer has, by written notice to Seller, waived
Buyer's right to terminate this Agreement. If Buyer elects
to proceed and to consummate the purchase despite said
damage or destruction, there shall be no reduction in or
abatement of the purchase price, and Seller shall assign to
Buyer the Seller's right, title, and interest in and to all
insurance proceeds (pro-rata in relation to the Entire
Property) resulting from said damage or destruction to the
extent that the same are payable with respect to damage to
the Property, subject to rights of any Tenant of the Entire
Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. Buyer's 1031 Tax Free Exchange.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to Western Title Co. who will
act as Facilitator to perfect the 1031 exchange by preparing an
agreement of exchange of Real Property whereby Western Title will
be an independent third party purchasing the ownership interest
in subject property from Seller and selling the ownership
interest in subject property to Buyer under the same terms and
conditions as documented in this Purchase Agreement. Buyer asks
the Seller to cooperate in the perfection of such an exchange at
no additional cost or expense or delay in time. Buyer hereby
indemnifies and holds Seller harmless from any claims and/or
actions resulting from said exchange. Pursuant to the direction
of Western Title Co., Seller will deed the Property to Buyer.
18. Cancellation
If any party elects to cancel this Contract because of any
breach by another party, the party electing to cancel shall
deliver to escrow agent a notice containing the address of
the party in breach and stating that this Contract shall be
canceled unless the breach is cured within 13 days following
the delivery of the notice to the escrow agent. Within
three days after receipt of such notice, the escrow agent
shall send it by United States Mail to the party in breach
at the address contained in the Notice and no further notice
shall be required. If the breach is not cured within the 13
days following the delivery of the notice to the escrow
agent, this Contract shall be canceled.
19. Miscellaneous.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
understandings. Exhibits attached to this Agreement are
incorporated into this Agreement.
(b) If this escrow has not closed by March 7, 1997 through
no fault of Seller, Seller may either, at its election,
extend the Closing Date or exercise any remedy available to
it by law, including terminating this Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Xxxxxx X. Xxxxxxx
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
00 X. 0xx Xxxxxx
Xx. Xxxx, XX 00000
If to Buyer:
Xxxxx Xxxxxx Xx.
0000 Xxxxxx
Xxxxxxxx XX 00000
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller. Seller has five (5) business days from
receipt within which to accept this offer.
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: Xxxxx Xxxxxx, Xx.
By:/s/ Xxxxx Xxxxxx, Xx.
Xxxxx Xxxxxx, Xx.
SELLER: AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP, a
Minnesota limited partnership.
By: AEI Fund Management XVIII, Inc., its corporate general partner
By:/s/ Xxxxxx X.Xxxxxxx
Xxxxxx X. Xxxxxxx, President
Buyer Initial /s/ AK Jr.
Purchse Agreement for Taco Cabana, San Antonio, TX
Exhibit A
Legal Description
Xxx 00, Xxxxx 0, Xxx Xxxx Xxxxx 00000, XXX Subdivion, Unit
3, an addition to the City of San Antonio, Bexar County,
Texas, according to the map or plat thereof, recorded in
volume 9504, Page 182, Deed and Plat Records of Bexar
County, Texas.
