ASSIGNMENT
OF
PURCHASE AGREEMENT
AEI Fund Management, Inc., a Minnesota corporation
("Assignor"), hereby assigns an undivided thirty-four percent
(34%) interest to AEI Income & Growth Fund 24 LLC, a Delaware
limited liability company, an undivided thirty-three percent
(33%) interest to AEI Income & Growth Fund XXII Limited
Partnership, a Minnesota limited partnership, and an undivided
thirty-three percent (33%) interest to AEI Income & Growth
Fund 27 LLC, a Delaware limited liability company
(collectively, "Assignee"), in that certain Purchase and Sale
Agreement between Assignor and Xxxx Companies US, Inc., a
Minnesota corporation, dated August 7, 2008, with respect to
property located in Lake Geneva, Wisconsin known as Best Buy,
and Assignee hereby assumes all management responsibilities
and obligations of Buyer thereunder.
ASSIGNOR:
AEI FUND MANAGEMENT, INC.,
a Minnesota corporation
By /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Secretary/Treasurer
ASSIGNEE:
AEI Income & Growth Fund 24 LLC,
a Delaware limited liability
company
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation,
Its managing member
By /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx,Secretary/Treasurer
AEI Income & Growth Fund XXII
Limited Partnership, a Minnesota
limited partnership
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation,
Its corporate general partner
By /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx,Secretary/Treasurer
AEI Income & Growth Fund 27 LLC,
a Delaware limited liability
company
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation,
Its managing member
By /s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Secretary/Treasurer
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement")
entered into as of this 7th day of August, 2008, by and
between XXXX COMPANIES US, INC., a Minnesota corporation (the
"SELLER"), and AEI FUND MANAGEMENT, INC., a Minnesota
corporation, or its permitted assigns (the "BUYER"). The date
on which last party hereto executes this Agreement is
hereafter referred to as the "EFFECTIVE DATE".
In consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and
sufficiency of which are herby mutually acknowledged, the
parties hereto covenant and agree as follows:
1. PROPERTY. Seller is the owner of a parcel of
real property, with all improvements thereon, known generally
as 000 X. Xxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxx, currently
leased for use as a Best Buy store, such property being more
particularly legally described on EXHIBIT "A" attached hereto
(collectively, the "PROPERTY"). The Property includes all of
Seller's rights and interests in and to all buildings and
other improvements on or within the Property or appurtenant
thereto, including easements, warranties, guaranties,
indemnities, and covenants, other than Seller's status as
"Approving Party" under the Operation and Easement Agreement
dated October 5, 2006 (as amended by First Amendment dated
October 9, 2007, the "OEA") between Target Corporation and
Seller. Seller wishes to sell and Buyer wishes to purchase
the Property on the terms and conditions set forth herein.
2. LEASE. The Property is being sold subject to an
existing Lease of the Property, dated February 27, 2007,
(together, collectively the "LEASE") by and between Seller, as
lessor, and Best Buy Stores, L.P., a Virginia limited
partnership, as lessee (the "TENANT"). Buyer shall have the
right to review and approve such Lease during the Due
Diligence Period (as defined below), in Buyer's sole
discretion.
3. CLOSING DATE. The closing date on the Buyer's
purchase of the Property (the "CLOSING DATE") shall be ten
(10) business days from the expiration of the later of: a) the
Due Diligence Period (or an Adverse Change Review Period, if
any should be occasioned, as set forth below in SECTION 8.03,
whichever is later), or b) the expiration of the period within
which Seller may and does choose to cure Buyer's objections to
title and survey.
The foregoing is subject to Buyer and Seller satisfying
all of its obligations herein. However, the Closing Date may
be earlier upon the mutual agreement of the parties, or
extended (such as upon the occurrence of an Adverse Change
Review Period) pursuant to other specific provisions set forth
herein.
4. PURCHASE PRICE. The purchase price for the Property
is $6,034,000 (the "PURCHASE PRICE"). If all conditions
precedent to Buyer's obligations to purchase have been
satisfied, Buyer shall deposit the Purchase Price with the
Closing Agent (as defined below).
Within three (3) business days of the Effective Date of
this Agreement, Buyer will deposit $90,000 (the "XXXXXXX
MONEY") in an interest bearing account with First American
Title Insurance Company, 0000 Xxxxxxx Xxxxx, 000 Xxxxxxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000; Attn: Xxxxx Xxxxxxxxxx
(Phone No: 000-000-0000); email: xxxxxxxxxxx@xxxxxxx.xxx (the
"CLOSING AGENT" OR "TITLE COMPANY").
If for any reason this Agreement is terminated prior to
the expiration of the Due Diligence Period (or prior to the
expiration of the Adverse Change Review Period if such occurs
because of the unanticipated occurrence of Adverse Change Due
Diligence Documents as defined below), then the Xxxxxxx Money
and any interest accrued thereon shall be returned to Buyer.
If the transaction contemplated hereby proceeds to
Closing, the Xxxxxxx Money and any interest accrued thereon
shall be paid to Seller at Closing and Buyer shall receive a
credit against the Purchase Price payable hereunder in the
amount of the Xxxxxxx Money plus interest accrued thereon or
upon the balance of the Purchase Price when deposited with
Escrow Agent. If the Buyer does not terminate this Agreement
as expressly allowed hereunder, the Xxxxxxx Money and any
interest accrued thereon shall thereafter be deemed non-
refundable, except as otherwise expressly provided herein. As
used in this Agreement, the term "XXXXXXX MONEY" shall mean
the amount deposited by Buyer, together with all interest
accrued thereon or deemed to have accrued thereon, as provided
above.
The balance of the Purchase Price is to be deposited by
Buyer with Closing Agent in immediately available funds on or
before 10:00 a.m. (Central time) on the Closing Date.
Provided Buyer makes the necessary arrangements with Closing
Agent, such funds may be deposited into an interest bearing
escrow account with the Closing Agent.
5. ESCROW. Escrow shall be opened by the Buyer with
the Closing Agent upon execution of this Agreement. A copy of
this fully-executed Agreement will be delivered to the Closing
Agent by the Buyer and will serve as escrow instructions
together with any additional instructions required by Seller
and/or Buyer or their respective counsels, provided that such
supplemental escrow instructions must be consistent with the
terms of this Agreement. Seller and Buyer agree to cooperate
with the Closing Agent and sign any additional instructions
reasonably required by the Closing Agent to deposit the
Xxxxxxx Money and close escrow. If there is any conflict
between any other instructions and this Agreement, this
Agreement shall control.
6. TITLE. Once Buyer has deposited the Xxxxxxx Money with
Closing Agent, Seller shall promptly order a commitment for an
ALTA Owner's Policy of Title Insurance (most recent edition)
issued by the Closing Agent, insuring marketable title in the
Property, subject only to such matters as Buyer may approve as
set forth below and containing such endorsements as Buyer may
require during the time period set forth below that are
available for a property in Wisconsin, including extended
coverage and owner's comprehensive coverage (the "UPDATED
TITLE COMMITMENT"). The Updated Title Commitment shall show
Seller as the present fee owner of the Property and show Buyer
as the fee owner to be insured and insuring Buyer in the
amount of the Purchase Price.
The Updated Title Commitment shall also state:
a) whether taxes are current and if not, show the amounts
unpaid;
b) the tax parcel identification numbers and whether the
tax parcel includes property other than the Property to be
purchased; and
c) If the Title Company is willing to provide such
information in the Updated Title Commitment, an itemization of
all outstanding and pending special assessments and an
itemization of taxes affecting the Property and the tax year
to which they relate.
All easements, restrictions, documents and other items
affecting title shall be listed in Schedule "B" of the Title
Commitment. Seller shall request that copies of all documents
referred to in the Updated Commitment (the "UPDATED TITLE
COMMITMENT DOCUMENTS") shall be delivered with the Updated
Title Commitment.
Buyer shall be allowed until the later of the expiration
of the Due Diligence Period or ten (10) business days after
receipt of the Updated Title Commitment (including all the
Updated Title Commitment Documents) and the Updated Survey (as
defined in Section 8.01 below) (herein, the "TITLE REVIEW
PERIOD") for examination and the making of any objections
thereto and making of requests for specific endorsements, said
objections or requests (hereinafter "objections") to be made
in writing or deemed waived. Matters deemed waived by Buyer
shall be deemed approved by Buyer.
If any objections are so made, the Seller shall be
allowed five (5) days after receipt of Buyer's objections
("SELLER'S CURE PERIOD") to respond to Buyer In Writing
whether Seller shall cure, remove or obtain insurable title
over said objections. If Seller shall decide to make no
efforts to cure, remove or obtain insurable title over Buyer's
objections, or if Seller fails to cure, remove or obtain
insurable title over Buyer's objections, then Buyer may either
(a) waive its objections or (b) terminate this Agreement by
written notice to Seller within three (3) business days after
the earlier of (x) receipt of Seller's written title response
letter and (y) the expiration of Seller's Cure Period.
Without limitation, Buyer may exercise the foregoing remedies
in the event there is a mechanic's lien filed against the
Property and Seller either refuses or is unable to cause such
mechanic's lien to be removed or insured over by the Title
Company at no cost to Buyer. Furthermore, Seller shall be
required to insure over any mechanic's lien filed with respect
to work performed at the Property before Closing, provided
that Seller retains its rights against Tenant under the Lease
in the event Tenant is responsible for any such pre-Closing
mechanic's lien. If Buyer shall so terminate this Agreement,
the Xxxxxxx Money shall be returned in full to Buyer as
Buyer's sole remedy and neither party shall have any further
duties or obligations to the other hereunder (except for those
which expressly survive the termination of this Agreement).
Any matters appearing on the Title Commitment at the end
Title Review Period to which Buyer has not objected (as well
as those for which Buyer's objection has been cured by Seller)
shall be deemed "PERMITTED EXCEPTIONS", provided that no
mechanic's lien may constitute a Permitted Exception. Also
included as "Permitted Exceptions" shall be the proposed
Certified Survey Map dated June 17, 2008 (revised June 24,
2008) and the proposed Declaration of Covenants, Conditions,
Restrictions, and Easements For Party Wall to be executed by
Seller before Closing, both of which Buyer has reviewed before
executing this Agreement and which Seller shall record against
the Property before Closing.
The Buyer shall also have five (5) business days to
review and approve any easement, lien, hypothecation or other
encumbrance placed of record affecting the Property after the
date of the Updated Title Commitment. If necessary, the
Closing Date shall be extended by the number of days necessary
for the Buyer to have five (5) business days to review any
such items. Such five (5) business day review period shall
commence on the date the Buyer is provided with a legible copy
of the instrument creating such exception to title. Any
matters appearing on the Title Commitment at the end of the
aforementioned five (5) business day review period by Buyer to
which Buyer does not object shall be deemed "PERMITTED
EXCEPTIONS".
If any further objections are so made based upon any
easement, lien, hypothecation or other encumbrance placed of
record affecting the Property after the date of the Updated
Title Commitment, the Seller shall be allowed five (5) days
after receipt of Buyer's objections ("SELLER'S UPDATE CURE
PERIOD") to elect to respond to Buyer IN WRITING whether
Seller shall cure, remove or obtain insurable title over said
objections. If Seller shall decide to make no efforts to
cure, remove or obtain insurable title over Buyer's
objections, or if Seller fails to cure, remove or obtain
insurable title over Buyer's objections, then Buyer may either
(a) waive its objections or (b) terminate this Agreement by
written notice to Seller within three (3) business days after
the earlier of (x) receipt of Seller's written title response
letter and (y) the expiration of Seller's Update Cure Period.
If Buyer shall so terminate this Agreement, the Xxxxxxx Money
shall be returned in full to Buyer as Buyer's sole remedy and
neither party shall have any further duties or obligations to
the other hereunder (except for those which expressly survive
the termination of this Agreement).
7. SITE INSPECTION. As a condition precedent to
Buyer's obligations hereunder, the Property shall be inspected
and approved by Buyer, in Buyer's sole discretion. Said
inspection and approval shall be completed within the Due
Diligence Period, and Buyer shall provide Seller with its
written notice of any disapproval of the Premises prior to the
expiration of the Due Diligence Period. If Buyer shall not
give Seller any written notice of such disapproval prior to
the expiration of the Due Diligence Period, this condition
precedent shall be deemed waived.
8. DUE DILIGENCE AND DUE DILIGENCE PERIODS.
8.01 DUE DILIGENCE DOCUMENTS AND DUE DILIGENCE PERIOD.
In order to conduct all of its inspections, due diligence
and review to satisfy itself regarding each Due Diligence
Document, the Property and this transaction, Buyer shall have
until the end of the thirty - fifth (35th) day after the
Effective Date (the "DUE DILIGENCE PERIOD").
Within three (3) business days following the Effective
Date of this Agreement, the following Due Diligence Documents,
to the extent such documents are in Seller's possession, are
to be delivered by Seller, at Seller's expense, (unless
specifically designated herein to be obtained by Seller, or to
be obtained, if possible from Tenant):
a) Updated Title Commitment and Updated Title Commitment
Documents as defined above in Section 6 (to be delivered
within five (5) business days after Buyer deposits the Xxxxxxx
Money with the Title Company rather than 3 business days
following the Effective Date);
b) Copies of Seller's existing Owner's Title Policy for the
Property, with copies of its underlying documents, if in
Seller's possession;
c) Seller shall provide to Buyer a copy of the Seller's
existing as-built ALTA survey and/or existing boundary ALTA
survey of the Property, which survey may show land in addition
to the Property ("EXISTING SURVEY").
d) Within three days of the date Buyer deposits the Xxxxxxx
Money with the Title Company, Seller, at Seller's sole
expense, will be responsible for ordering an updated as-built
ALTA Survey of the Property (the "UPDATED SURVEY") certified
to "AEI Fund Management, Inc., its successors and/or assigns"
and Title Company, and in accordance with the requirements set
forth in Exhibit "B" attached hereto.
e) A complete copy of the Lease and Guaranty of Lease, if
any, and any amendments thereto, INCLUDING BUT NOT LIMITED TO
amendments, assignments of lease and/or letter agreements,
commencement agreements, memorandum of leases, project
acceptance letter (wherein Tenant accepts possession of the
property, if Tenant shall have issued the same or similar) and
the most recent tenant estoppel currently in Seller's
possession;
f) Seller's existing Phase I environmental site assessment
for the Property dated May 31, 2006 (which may cover land in
addition to the Property);
g) A copy of the Seller's existing insurance certificate(s)
for the Property;
h) A copy of the Tenant's existing insurance certificate(s)
for the Property;
i) If in Seller's possession, any zoning information
concerning the current zoning of the Property;
j) A copy of the soils report, if in Seller's possession;
k) A copy of the Certificate of Occupancy from the governing
municipality;
l) If in Seller's possession, Certificate of Substantial
Completion executed by the project architect and/or general
contractor for the improvements, if any;
m) Copies of the existing final building plans and
specifications for the improvements on the Property;
n) A copy of the most recent real estate tax statement for
the Property;
o) A rent accounting for the last twelve (12) months (or
such shorter period reflecting Tenant's occupancy of the
Property) showing when Seller received each check from Tenant;
p) Copies of any and all certificates, permits, licenses and
other authorizations of any governmental body or authority
which are necessary to permit the use and occupancy of the
Improvements, if in Seller's possession; and
q) Copies of any and all warranties respecting construction
of the improvements, including but not limited to the roof,
HVAC system, structural, plumbing or electrical that have not
expired by their terms, and assignments thereof to Tenant,
issued to or required to be provided to Tenant as designated
in the Lease, if any.
Buyer will require any and all third party warranties,
which have not expired and have not been transferred to
Tenant, to be transferred to Buyer on the Closing Date.
In the event the third party warranties are unable to be
transferred to Buyer on the Closing Date but such
warranties are, in fact, transferable to Buyer, Seller
shall provide Buyer with a letter of undertaking wherein
Seller agrees at Seller's expense, including the payment
of any transfer fees or costs of pretransfer inspections,
to transfer the third party warranties in Buyer's name
provided that Buyer shall be responsible to arrange for
any necessary post Closing inspections.
(All of the above described documents (a) through (q) are
hereinafter collectively the "DUE DILIGENCE DOCUMENTS").
The Due Diligence Documents shall be sent under cover of
correspondence from Seller to Buyer advising Buyer which of
the Due Diligence Documents are not being provided because
they are not in Seller's possession.
After receipt and review of the Due Diligence Documents
or after Buyer's inspection of the Property, Buyer may cancel
this Agreement for any reason, in its sole discretion, by
delivering a cancellation notice, return receipt requested, to
Seller and Closing Agent on or before the expiration of the
Due Diligence Period and the Xxxxxxx Money shall be returned
in full to Buyer and neither party shall have any further
duties or obligations to the other hereunder (except for any
obligation expressly surviving the termination of this
Agreement).
In the event this Agreement is canceled or terminated for
any reason, Buyer shall promptly, and as a condition to the
return to it of the Xxxxxxx Money, return the Due Diligence
Documents to Seller and deliver to Seller copies of all third
party reports (including surveys, site plans, concept plans,
engineering, architectural plans, documents submitted to
governmental authorities and soil test reports) regarding the
Property which were prepared for Buyer.
Buyer's right to review, examine and inspect the Property
shall be limited to those rights which Seller has to provide
access to the Property. Buyer shall provide Seller not less
than 48 hours prior written notice before any entry on the
Property; at a minimum such notice shall disclose who will be
entering upon the Property and the purpose of the visit.
Buyer may not conduct reviews, examinations or inspections of
an invasive nature, including but not limited to the taking of
any samples or soil borings, without Seller's prior written
approval. Prior to any entry upon the Property, Buyer shall
deliver to Seller a certificate of liability insurance in form
reasonably satisfactory to Seller showing liability coverage
of no less than Two Million and No/100ths Dollars
($2,000,000.00), and showing Seller and its designated parties
as additional insureds thereunder. Buyer shall be responsible
and liable for the acts, omissions, faults or neglects of
Buyer and Buyer's employees, officers, agents, contractors,
consultants, engineers and other representatives. Without
limiting the foregoing, Buyer hereby agrees to indemnify,
defend and hold harmless Seller, its affiliates, its and its
affiliates' respective officers, directors, shareholders,
partners, managers, members, employees, attorneys and agents,
and the heirs, legal representatives, successors and assigns
of all of the foregoing (collectively, "Related Parties") of
and from any and all claims, demands, damages, losses,
injuries, liabilities, penalties, costs, expenses (including
reasonable attorneys' and consultants' fees), suits, actions,
investigations, judgments and fees (collectively, "Claims")
which may be imposed upon, incurred or suffered by or asserted
against Seller by reason of the acts, omissions, faults or
neglects of Buyer and Buyer's employees, officers, agents,
contractors, consultants, engineers and other representatives
in connection therewith. Also, without limiting the
foregoing, Buyer shall not permit or suffer, and shall cause
promptly to be removed and released, any mechanic's,
materialman's or other lien in connection with, or on account
of or in respect of such work and activities. The provisions
of this paragraph shall survive the closing or termination of
this Agreement.
If notice of termination is not given on or before the
expiration of the Due Diligence Period, all such matters shall
be deemed acceptable and all such conditions satisfied and/or
waived and the right to termination under Section 8.01 shall
be extinguished and the Xxxxxxx Money shall be non-refundable
to Buyer, except in the event: (i) of Seller's default; (ii)
Buyer's termination hereof based upon receipt of any Adverse
Change Documents as defined below as set forth in Section
8.03; or (iii) pursuant to Buyer's right to terminate as
otherwise set forth herein, in which case the Xxxxxxx Money
shall be returned to Buyer.
8.02 FORM OF CLOSING DOCUMENTS. AT LEAST FIVE (5) DAYS
PRIOR TO THE END OF THE DUE DILIGENCE PERIOD, Seller shall, at
its sole expense, provide to Buyer drafts of the following
documents, and Seller and Buyer shall agree on the form of the
following documents, if not attached hereto, which are to be
delivered to Buyer on the Closing Date by Seller (and executed
by Seller and Buyer as appropriate) as set forth in Section 14
hereof:
(a) Limited or special warranty deed in the form attached
hereto and incorporated herein as Exhibit "C";
(b) Seller's Affidavit, as may be required by the Title
Company;
(c) FIRPTA Affidavit;
(d) Assignment and Assumption of the Lease in the form
attached hereto and incorporated herein as Exhibit "D"; and
(e) A generic Assignment of warranties in the form as
attached hereto and incorporated herein as Exhibit "E".
In addition, within five days of the Effective Date, Buyer
shall deliver to Seller Buyer's desired form of Tenant
estoppel so that Seller may deliver it to the Tenant with a
request that Tenant execute the same.
8.03 ADVERSE CHANGE DUE DILIGENCE DOCUMENTS AND ADVERSE
CHANGE REVIEW PERIOD. Promptly upon Seller's receipt of same,
up until the Closing Date, Seller shall deliver to Buyer the
following items for review and acceptance:
Any documents or notices received by Seller that
materially change or render incomplete, invalid, or
materially inaccurate any of the Due Diligence
Documents (collectively, IF ANY, the "ADVERSE CHANGE
DUE DILIGENCE DOCUMENTS").
If necessary, the Closing Date shall be extended to allow
Buyer to have three (3) business days (the "ADVERSE CHANGE
REVIEW PERIOD") to examine and to accept all of the above-
described Adverse Change Due Diligence Documents. During the
Adverse Change Review Period, Buyer may cancel this Agreement
if any of the Adverse Change Due Diligence Documents are not
acceptable to Buyer, in its reasonable discretion, by
delivering a cancellation notice, as provided herein, to
Seller and Closing Agent prior to the end of the Adverse
Change Review Period. Such notice shall be deemed effective
upon receipt by Seller. If Buyer so terminates this Agreement,
the Xxxxxxx Money and accrued interest shall be returned in
full to Buyer as Buyer's sole remedy on account of such
Adverse Change Due Diligence Document(s) and the matters set
forth therein, and thereafter neither party shall have any
further duties or obligations to the other hereunder other
than those obligations which expressly survive the termination
of this Agreement. If Buyer instead elects to close, then
Buyer waives any and all claims that Buyer may have against
Seller related to the Adverse Change Due Diligence Document(s)
and the matters set forth therein.
It shall be a condition precedent to Buyer's obligations
to close hereunder that there have been no adverse material
changes in any of the information reflected in the Due
Diligence Documents or Adverse Change Due Diligence Documents
after the date of such document and prior to closing.
9. CLOSING COSTS. Seller shall pay the following closing
costs: (i) the transfer taxes (state, county, and
municipality, if such exists) and/or transfer fees; (ii) all
recording costs associated with the Deed and Assignment and
Assumption of Lease; (iii) one half of the escrow fees; (iv)
warranty transfer costs; (v) the cost of the Updated Survey;
(vi) brokerage commissions payable by Seller under Section
18.4 below; (vii) costs of title endorsements necessary to
clear title, such as to insure over mechanic's liens with
respect to work performed at the Property before Closing; and
(viii) all costs associated with recording any document(s) or
instrument(s) necessary to cure any title objections raised by
Buyer.
Buyer shall pay the following closing costs: (i) one
half of the escrow fees; (ii) the costs associated with an
updated title commitment/search and the Owner's Title policy
premium, including any charge for extended coverage; (iii) all
Buyer's diligence costs including the cost of Buyer's updated
ASTM Phase I Environmental Report; and (iv) the cost of any
endorsements Buyer may require on its Owner's Title Policy,
other than any endorsements required to insure over Buyer's
title objections for which Seller has undertaken to cure or is
required to cure.
Each party will pay its own attorneys' fees to close
this transaction.
10. REAL ESTATE TAXES AND ASSESSMENTS. General and
special real estate taxes (which shall be deemed to include
any special assessments, which shall be calculated based on
the longest permitted payment period) not currently due and
payable and affecting the Property for tax years that occur
during and prior to the year of closing shall be prorated on a
cash (not an accrual) basis as of the Closing Date. Tenant is
responsible for real estate taxes under the Lease;
consequently any credit due from Seller to Buyer for real
estate taxes shall only be for real estate taxes payable (not
accrued) and attributable to a time period before the Lease
commencement date. If the Property is covered by tax parcels
that affect property in addition to the Property, then (i)
each of (x) Seller (with respect to the portion of the
Property still owned by Seller after Closing) and (y) Buyer
(with respect to the Property) shall be responsible for its
proportionate share of each tax xxxx and shall work together
to ensure that all such bills are timely paid until split
bills are issued; and (ii) Seller shall cause a tax division
to occur as soon as reasonably possible after closing such
that the Property will be taxed as one or more separate tax
parcels. Seller and Buyer each agree, in good faith, to
perform such acts and execute such documentation as shall be
necessary to effectuate such tax division for the Property.
All such taxes shall be reprorated by the parties from time to
time as necessary upon the issuance of the final tax bills for
all of the tax years in question. All provisions set forth in
this Section shall survive the closing or termination of this
Agreement.
11. PRORATIONS. The Buyer and the Seller, as of the
Closing Date, shall prorate: (i) all rent due under the Lease,
(ii) ad valorem taxes (as provided above), (iii) utility
charges for which Seller, as landlord, is responsible under
the Lease, including charges for water, gas, electricity, and
sewer, if any, (iv) other expenses relating to the Property
which have accrued but not been paid (or which have been
prepaid) as of the Closing Date, based upon the most current
ascertainable billing information, including any charges
arising under any of the encumbrances to the Property. To the
extent that information for any such proration is not
available on the Closing Date or if the actual amount of such
charges or expenses differs from the amount used in the
prorations at closing, then the parties shall make any
adjustments necessary so that the prorations at closing are
adjusted based upon the actual amount of such charges or
expenses, but not later than sixty (60) days after the Closing
Date. Seller shall not be responsible for any amounts payable
by the Tenant under the Lease and for which Tenant fails to
pay the same when due.
12. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller
represents and warrants to Buyer as of this date and to the
best of Seller's knowledge that:
(a) Except for this Agreement and the Lease between
Seller and Tenant, and those matters disclosed in
the materials delivered to Buyer pursuant to
Sections 6 and 8, it is not aware of any other
agreements or leases that will be binding upon Buyer
after Closing with respect to the Property.
(b) Seller 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 hereunder.
(c) Seller does not have any actions or proceedings
pending against Seller, which would materially
affect the Property or Tenant after Closing, except
matters fully covered by insurance;
(d) The consummation of the transactions contemplated
hereunder, and the performance of this Agreement and
the delivery of the special warranty deed to Buyer,
will not result in any breach of, or constitute a
default under, any instrument to which Seller is a
party or by which Seller may be bound or affected;
(e) At the xxxx Xxxxxx delivered the leased premises to
Tenant, the Property was in conformance with all
applicable local, state and federal laws,
ordinances, regulations and requirements. Since
that delivery date, Seller has not received written
notice that the Property is 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;
(f) The transaction contemplated herein does not
represent a fraudulent conveyance by Seller;
(g) The Lease is valid, in full force and effect, and
has not been pledged by Seller, modified, or amended
except as otherwise disclosed to Buyer in writing
during the Due Diligence Period. To Seller's
knowledge, Tenant is not in default under the Lease
and no Rent has been waived, discounted,
compromised, or released by Seller;
(h) To Seller's knowledge, the Property is free of
structural defects and is structurally sound;
(i) To Seller's knowledge, no condemnation action is
pending or threatened against the Property as of the
date hereof; and
(j) Neither Seller nor, to Seller's current, actual
knowledge, any of Seller's shareholders, are an
entity or person: (i) that is listed in the Annex
to, or is otherwise subject to the provisions of
Executive Order 13224 issued on September 24, 2001
("EO13224"); ii) whose name appears on the United
States Treasury Department's Office of Foreign
Assets Control ("OFAC") most current list of
"Specifically Designated National and Blocked
Persons" (which list may be published from time to
time in various mediums including, but not limited
to, the OFAC website,
(xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/x
11sdn.pdf); (iii) who commits, threatens to commit
or supports "terrorism," as that term is defined in
EO13224; (iv) is subject to sanctions of the United
States government or is in violation of any federal,
state, municipal or local laws, statutes, codes,
ordinances, orders, decrees, rules or regulations
relating to terrorism or money laundering,
including, without limitation, EO13224 and the
Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001; or (v) who is otherwise
affiliated with any entity or person listed above
(any and all parties or persons described in
subsections (i) - (v) above are herein referred to
as a "PROHIBITED PERSON"). In connection with the
transaction contemplated by this Agreement, neither
Seller nor its members shall knowingly: (A) conduct
any business, nor engage in any transaction or
dealing, with any Prohibited Person, including, but
not limited to, the making or receiving of any
contribution of funds, goods, or services, to or for
the benefit of a Prohibited Person; or (B) engage in
or conspire to engage in any transaction that evades
or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the
prohibitions set forth in EO13224.
Phrases such as "to Seller's knowledge" or "to the best of
Seller's knowledge" mean the actual knowledge of employees of
Seller on the date hereof, without a duty of investigation or
inquiry. These Seller's representations and warranties shall
be remade and shall be true and correct as of the Closing
Date. If the Seller shall notify Buyer of a change in its
representation and warranties prior to the Closing Date, the
Buyer shall get five (5) business days to review such change
and terminate this Purchase Agreement if Buyer deems
necessary. If Buyer so terminates this Agreement, the Xxxxxxx
Money shall be returned in full to Buyer as Buyer's sole
remedy on account of such breach of representation or warranty
and thereafter neither party shall have any further duties or
obligations to the other hereunder other than those
obligations which expressly survive the termination of this
Agreement. If Buyer instead elects to close, then Buyer
waives any and all claims that Buyer may have against Seller
related to such breach of representation or warranty.
These representations and warranties shall survive for a
period of six months from the Closing Date.
13. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer
represents and warrants to Seller that:
(a) 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 hereunder;
(b) Neither the execution and delivery of this Agreement
nor the consummation of the transaction contemplated
hereunder will result in any breach of, or
constitute a default under, any agreement or
instrument to which Buyer is a party or by which
Buyer is bound or affected; and
(c) Neither Buyer nor, to the best of Buyer's knowledge,
any of Buyer's members, are an entity or person:
(i) that is listed in the Annex to, or is otherwise
subject to the provisions of Executive Order 13224
issued on September 24, 2001 ("EO13224"); ii) whose
name appears on the United States Treasury
Department's Office of Foreign Assets Control
("OFAC") most current list of "Specifically
Designated National and Blocked Persons" (which
list may be published from time to time in
various mediums including, but not limited
to, the OFAC website,
(xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/x
11sdn.pdf); (iii) who commits, threatens to commit
or supports "terrorism," as that term is defined in
EO13224; (iv) is subject to sanctions of the United
States government or is in violation of any federal,
state, municipal or local laws, statutes, codes,
ordinances, orders, decrees, rules or regulations
relating to terrorism or money laundering,
including, without limitation, EO13224 and the
Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001; or (v) who is otherwise
affiliated with any entity or person listed above.
In connection with the transaction contemplated by
this Agreement, neither Buyer nor its members shall
knowingly: (A) conduct any business, nor engage in
any transaction or dealing, with any Prohibited
Person, including, but not limited to, the making or
receiving of any contribution of funds, goods, or
services, to or for the benefit of a Prohibited
Person; or (B) engage in or conspire to engage in
any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in
EO13224.
These Buyer's representations and warranties deemed to be
true and correct as of the Closing Date and shall survive for
six months from the date of closing.
14. CLOSING.
(a) On or before the Closing Date, with simultaneous
copy to Buyer, Seller will deposit into escrow with the
Closing Agent the following documents:
(1) The documents listed in 8.02(a)-(e) above;
(2) Estoppel executed by Tenant dated not more than thirty
(30) days prior to the Closing Date, in either (A) the form
requested by Buyer under Section 8.02 above, (B) the form
required by the Lease, or (C) Tenant's standard form, and in
each case disclosing no default or other material adverse
information that is not evident from a review of the Lease and
other Due Diligence Documents.
(3) Estoppel from Target Corporation in the form required by
Section 6.3 of the OEA dated not more than thirty (30) days
prior to the Closing Date.
(4) Estoppel from Xxxx Companies US, Inc. in the form
required by Section 6.3 of the OEA dated not more than thirty
days prior to the Closing Date.
(5) the original Lease and originals of any and all
documentation modifying the Lease, including but not limited
to, assignments, amendments, commencement agreement,
memorandum of lease, and letter agreements;
(6) Notice of Sale and Assignment of Lease to Tenant;
(7) Tenant's Certificate of Insurance naming Buyer as
additional insured and/or loss payee, as required by the
Lease;
(8) A down-dated title commitment for an owner's title
insurance policy, reflecting only Permitted Exceptions and
endorsements required by Buyer during the Due Diligence
Period; and
(9) A letter from Seller to Buyer wherein Seller itemizes (in
percentages totaling 100%) the following percentages of costs
of the Premises: land acquisition, soft costs, building
construction, and site work.
(b) On or before the Closing Date, with simultaneous copy to
Seller, Buyer will deposit the following with the Closing
Agent: i) the Purchase Price; and ii) its counterpart to the
Assignment and Assumption of Lease.
(c) Both parties will sign and deliver to the Closing Agent
any other documents reasonably required by the Closing Agent
and/or the Title Company, including transfer declarations.
15. WARRANTY. If, within one year after January 25,
2008 (January 25, 2008 being the date of substantial
completion of the improvements at the Property), the
improvements constructed by Seller at the Property are found
to be defective due to faulty workmanship or materials or not
in accordance with the requirements of the Lease and (a)
Purchaser (not Tenant) is responsible for the repair of such
defect under the Lease, (b) the defect is not covered by
another warranty (such as a subcontractor warranty) that has
already been assigned to Tenant or has been separately
assigned to Purchaser, (c) such defect is not the result of
abuse, neglect or improper or inadequate care and maintenance
by Purchaser or Tenant, and (d) if within such period
Purchaser notifies Seller thereof in writing, then Seller
shall correct the same within a reasonable time after receipt
of such notice. Purchaser shall notify Seller promptly in
writing after discovery of the condition. Prior to the
expiration of this warranty period, representatives of
Purchaser and Seller shall inspect the Property and jointly
determine if any work is subject to repair by Seller as set
forth above in this Section and Seller shall promptly correct
such non-conforming work, provided that such non-conforming
work is not the result of abuse, neglect or improper or
inadequate care and maintenance by Purchaser or Tenant. This
warranty is personal to Purchaser and may not be assigned by
Purchaser without Seller's written consent. This Section 15
shall survive Closing.
16. DAMAGES, DESTRUCTION AND EMINENT DOMAIN. If, prior
to the Closing Date, the Property, or any part thereof, should
be destroyed or further damaged by fire, the elements, or any
cause, due to events occurring subsequent to the date of this
Agreement (which damage exceeds 10% of the Purchase Price of
the Property or abates payment of rent by Tenant or renders
the Lease invalid), this Agreement shall become null and void,
at Buyer's option, exercised by written notice to Seller
within ten (10) business 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 (a) all contingencies set forth in Section 8 hereof
have been satisfied, or waived; and (b) any period provided
for above in Section 8 hereof 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 resulting form said damage or destruction
to the extent that the same are payable with respect to damage
to the Property, subject to rights of the Tenant.
If prior to closing, the Property, or any part thereof,
is taken by eminent domain (which taking delays commencement
of the Lease or delays payment of rent by the Tenant or
renders the Lease invalid) 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 all the Seller's right, title and
interest in and to any award made, or to be made, in the
condemnation proceeding, subject to the rights of the Tenant.
In the event that this Agreement is terminated by Buyer
as provided above, the Xxxxxxx Money shall be returned in full
to Buyer as Buyer's sole remedy and neither party shall have
any further duties or obligations to the other hereunder
(except for those which expressly survive the termination of
this Agreement).
17. NOTICES. 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 by facsimile transaction to the
respective fax number(s) set forth below with printed
confirmation of receipt thereof, or to such other address as
such party may hereafter designate by written notice to the
other party. Notice given in accordance herewith shall be
effective upon delivery to the address of the addressee. Any
notice given by facsimile transmission shall be followed by a
hard copy or by hand delivery.
If to Seller: Xxx Xxxxxx
Xxxx Companies US, Inc.
00 Xxxxx 00xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
xxx.xxxxxx@xxxxxxxxxxxxx.xxx
with a copy to: Xxxxx Xxxxxxxxx
Levenfeld Xxxxxxxxxx, LLC
Xxx Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
xxxxxxxxxx@xxxxxxx.xxx
If to Buyer: AEI Fund Management, Inc.
1300 Xxxxx Fargo Center
00 X. 0xx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxxxx Xxxxx / Xxxxxxx Xxx
Phone No.: (000) 000-0000
Fax: (000)-000-0000
Email: xxxxxx@xxxxxxxx.xxx/xxxx@xxxxxxxx.xxx
With a copy to: Xxxxxxx Xxxxxxxxx
Xxxxxxxxx Law Firm
00 Xxxx Xxxxxxx Xxxxxx, Xxx 0000
Xx. Xxxx, Xxxxxxxxx 00000
Phone: (000) 000-0000
Fax: 000-000-0000
E-Mail: xxxxxx@xxxxxxxxxx.xxx
18. Miscellaneous.
18.1 ENTIRE AGREEMENT; AMENDMENTS; RULE OF CONSTRUCTION;
WAIVERS; ATTORNEYS' FEES. 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 agreement or understandings.
Exhibits attached to this Agreement are incorporated into this
Agreement.
18.2 DEFAULT. In the event that Seller defaults
hereunder and fails to cure within five days after receipt of
notice of such default from Buyer, Buyer may either, at its
election, as its sole and exclusive choice of remedy: (a)
enforce specific performance (in which event Buyer must notify
Seller of its election to seek specific performance within 30
days and file suit within 60 days) or (b) terminate this
Agreement (in which event Buyer shall receive its Xxxxxxx
Money back in full and neither party shall have any further
duties or obligations to the other hereunder except for those
which expressly survive the termination of this Agreement).
In the event that Buyer defaults hereunder and fails to cure
within five days after receipt of notice of such default from
Seller, Seller shall be entitled to the Xxxxxxx Money as
liquidated damages, it being understood that Seller's actual
damages would be difficult to ascertain and that the Xxxxxxx
Money represents the parties' best estimate of such damages.
If Seller fails to deliver an estoppel certificate that Seller
is required to deliver at Closing under Section 14(a) above
(other than the OEA estoppel from Seller), it shall be deemed
a failure of condition to Closing rather than a default by
Seller. In the event of a failure of condition to Closing,
Buyer may either waive such failure and close without
adjustment of the Purchase Price or terminate this Agreement
(in which event Buyer shall receive its Xxxxxxx Money back in
full and neither party shall have any further duties or
obligations to the other hereunder except for those which
expressly survive the termination of this Agreement).
18.3 ASSIGNMENT. With written notice to Seller given at
least five (5) business days before the Closing Date, this
Agreement shall be assignable by Buyer, at its option, in
whole or in part, in such manner as Buyer may determine, to an
affiliate or affiliates of Buyer, provided that the originally
named Buyer shall remain liable for Buyer's obligations under
this Agreement and further provided Buyer's assignment results
in no additional cost or expense to Seller.
18.4 BROKERS. Seller shall pay any and all real estate
commissions due and payable to any broker claiming commission
by and through its representation of Seller according to the
terms of Seller's agreement with any such broker. Seller
agrees to pay to CB Xxxxxxx Xxxxx ("Agent") a commission
pursuant to a separate written agreement between Agent and
Seller, for its services in connection with this transaction.
Buyer represents and warrants to Seller that Buyer has not
worked with any real estate broker other than Agent and Buyer
shall indemnify Seller from any claim for a commission or
other fee from any broker other than Agent who purportedly
acted on behalf of Buyer. This Section 18.4 shall survive
Closing.
18.5 COMPUTATION OF TIME. If the time period or date by
which any right, option, or election provided under this
Agreement must be exercised, or by which any act required
hereunder must be performed, or by which the Closing must be
held, expires or occurs on a Saturday, Sunday, or legal or
bank holiday, then such time period or date shall be
automatically extended through the close of business on the
next regularly scheduled business day.
18.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an
original and which together shall constitute the agreement of
the parties hereto.
18.8. EXPIRATION. Buyer is submitting this offer by
signing a copy of this Agreement and delivering it to Seller.
Seller has three (3) business days from receipt within which
time to accept this offer by signing and returning this
Agreement to Buyer. When executed by both parties, this
Agreement will be a binding agreement for valid and sufficient
consideration which will bind and benefit Seller, Buyer and
their respective successors and assigns.
18.9. NO RECORDING. Neither this Agreement nor any
memorandum hereof may be recorded.
19. AS IS. As a material inducement to Seller to
execute this Agreement, Buyer agrees, represents and warrants
that (i) prior to Closing, Buyer will have fully examined and
inspected the Property, together with any documents and
materials with respect to the Property which Buyer deems
necessary or appropriate in connection with its investigation
and examination of the Property, (ii) Buyer will have accepted
and will be fully satisfied in all respects with the foregoing
and with the Lease, physical condition, environmental
condition, value, financing status, and prospects of the
Property, (iii) the Property will be purchased by Buyer "As
Is" and, upon the Closing, Buyer shall assume responsibility
and liability for the ownership, operation and physical
condition and environmental condition of the Property
(whenever such condition may have arisen, whether prior to, on
or after the Closing Date, (iv) Buyer will have decided to
purchase the Property solely on the basis of its own
independent investigation, and (v) effective as of the Closing
Date, Buyer releases and forever discharges Seller and its
Related Parties of and from all Claims, whether known or
unknown, liquidated or unliquidated, which arise in connection
with the presence of any hazardous material (as defined by
applicable code) on the Property or the violation of any
environmental law in connection therewith. Except as
otherwise expressly provided herein, Buyer hereby acknowledges
and agrees that Seller has not made, does not make, and has
not authorized anyone else to make any representation and
warranty as to the Lease, the past, present or future physical
condition, environmental condition, value, financing status
and prospects, or any other matter or thing pertaining to the
Property. SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS
OR IMPLIED OR ARISING BY OPERATION OF LAW, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF CONDITION, HABITABILITY,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE IN
CONNECTION WITH THE PROPERTY, EXCEPT (IF SUCH BE THE CASE) AS
EXPRESSLY SET FORTH HEREIN. Seller shall not be liable for,
or be bound by, any verbal or written statements,
representations, real estate broker's "setups" or information
pertaining to the Property furnished by any real estate
broker, agent, employee, servant or any other person unless
the same are specifically set forth in writing in this
Agreement.
20. OEA. The OEA shall govern the development and other
matters set forth therein, including provisions therein
relating to common area maintenance charges, building and sign
restrictions, and requirements for the Property, and the use
of the Property and other portions of the shopping center.
Upon Closing, Purchaser shall be responsible for all
obligations required of Purchaser as the owner of the Property
under the OEA, provided that Seller shall retain "Approving
Party" status.
IN WITNESS WHEREOF, Seller and Buyer have executed this
Agreement effective as of the date last set forth below.
SELLER:
Xxxx Companies US, Inc.,
a Minnesota corporation
By: /s/ Xxxxxxx XxXxxx
Name: Xxxxxxx XxXxxx
Its: VP
Date: 8-7-08
BUYER:
AEI Fund Management, Inc.,
a Minnesota corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, its President
Date: August 7, 2008
EXHIBIT "A"
LEGAL DESCRIPTION
Lot 2 in Certified Survey Map No. [____], dated June 17, 2008
(revised June 24, 2008) prepared by Xxxx X. Xxxxx, Registered
Land Surveyor, showing a division of Xxx 0 xx Xxxxxxxxx Xxxxxx
Xxx Xx. 0000 being part of the Southeast 1/4 of the Southwest
1/4 and the Southwest 1/4 of the Southeast 1/4 of Section 30,
Town 2 North, Range 18 East, in the City of Xxxx Xxxxxx,
Xxxxxxxx Xxxxxx, Xxxxxxxxx.
