PURCHASE AGREEMENT
THIS AGREEMENT, entered into effective as of this 5th day of
April, 2000.
1. PARTIES. The buyer is Xxxx Xxxxxxx and Xxxxxx Xxxxx or
related assigns, (such assignment to be effective only if buyer
shall remain liable for the full performance of Buyer hereunder),
("Buyer"), and the seller is AEI Real Estate Fund XVI Limited
Partnership and AEI Real Estate Fund XVII Limited Partnership
("Seller").
2. PROPERTY. The Property consists of the real property
legally described on Exhibit A attached hereto, all buildings and
improvements, and fixtures on the land, (including, but not
limited to, that certain building and related improvements)
appurtenances, mineral and similar rights (to the extent owned by
Seller), and personal property, if any, presently owned by Seller
and used by Seller in connection with the land or the
improvements, all of Seller's interest in all leases, prepaid
rents, security deposits and other contract rights, guaranties
and warranties or other rights related to the use and operation
of the Property and all assignable governmental licenses and
permits.
3. PURCHASE PRICE. The purchase price for the Property is
$900,100, all cash.
4. TERMS. The purchase price for the Property will be
paid by Buyer as follows:
When this agreement is executed, Buyer
will pay $50,100 to Seller by depositing the same
into escrow with the escrowee set forth in
paragraph 7 hereof (the "First Payment"). The
First Payment will be forwarded to the Seller per
paragraph 7 hereof, and credited against the
purchase price when and if escrow closes and the
sale is completed. One Hundred Dollars of such
First Payment shall be considered Option
Consideration and be immediately non-refundable
even if this Agreement is terminated for any
reason.
(b) Buyer will deposit the balance of the
purchase price, $850,000, (the "Final Payment")
into escrow in sufficient time to allow escrow to
close on the closing date.
5. CLOSING DATE. Escrow is scheduled to close (i.e., the
deed will be recorded and the purchase price transferred to
Seller) the later of May 15, 2000, or ninety days after the date
the last party to sign this agreement has signed, such earlier
time as the parties may mutually agree. Time is of the essence.
6. DUE DILIGENCE. Buyer will have until the latter of (i)
sixty (60) days after the full execution of this Agreement by
both parties hereto, or (ii) sixty (60) days after delivery of
each of the following items (the "Due Diligence Period") to
conduct all of its inspections and due diligence and satisfy
itself regarding each item, the Property and this transaction.
a. The original and one copy of a title insurance
commitment for an TLTA owner's title insurance policy
(see paragraph 8 below)
b. Copies of such "as built" plans and specifications
for the Property as Seller can locate after diligent
search.
c. Copies of an "as built" survey of the Property
done concurrent with Seller's acquisition of the
Property.
d. Copies of any and all existing soil tests and
environmental tests previously done by or for Seller
relating to the Property.
Seller shall provide Buyer access to the Property from time
to time, after Seller shall have coordinated the same with the
present occupant of the Property, for the purpose of conducting
inspections thereof including mechanical, structural, electrical
and other physical inspections. Buyer has until the end of the
Due Diligence Period to complete such physical inspection.
Buyer shall indemnify Seller from and against any and all
losses, claims, causes of action, liabilities, and costs to the
extent caused by the actions of Buyer, its agents, employees,
contractors, or invitees, during any such entry upon the
Property. The foregoing duty of indemnification shall include
the duty to pay all reasonable attorney's fees incurred by the
Seller in responding to or defending any such claims or
proceedings.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice by certified mail,
return receipt requested, or by overnight delivery service to
Seller and escrow holder before the expiration of the Due
Diligence Period. Such notice shall be deemed effective only
upon receipt by Seller.
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 the First Payment only if the reason for termination
shall be the existence of a non-curable objection to the
marketability of title or the presence of Hazardous Substances on
the Property as revealed by a Phase I Environmental report
prepared by a third party environmental engineer. Upon
termination of this Agreement by Buyer, 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. Otherwise Buyer
may terminate this Agreement during the Due Diligence Period, but
its First Payment in its entirety shall be non-refundable.
Upon the expiration of the Due Diligence Period, Buyer
shall have been deemed to have waived its right to terminate this
Agreement based upon the items received by Buyer and its
inspection of the property during the Due Diligence Period.
Buyer shall have ten (10) business days, from written notice to
Buyer, to review any adverse material changes in any of the due
diligence items received prior to the Closing Date to terminate
this Agreement. Except for the foregoing, 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. The escrow holder will be an agent for a
nationally-recognized title insurance company of Chicago Title
Insurance Company ("the Escrowee"), with offices in or near
Mesquite, Texas. 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.
Escrow will be deemed opened only upon Seller's execution of this
Agreement.
8. TITLE. Closing will be conditioned on the agreement of
the Escrowee to issue an TLTA Owner's policy of title insurance,
dated as of the close of escrow, in an amount equal to the
purchase price, insuring that 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; other items of record; other items disclosed to Buyer
during the Due Diligence Review Period.
Buyer shall be allowed ten (10) business days after receipt
of said commitment for examination and for the making of any
objections thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed fifty (50) days to remove or cure such objection to
Buyer's satisfaction and make such title marketable. If Seller
shall decide to make no efforts to make title marketable, or is
unable to make title marketable, (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.
Seller shall pay for the cost of issuing the title commitment and
shall pay the owner's title insurance premium for an Owner's
policy.
9. CLOSING COSTS. Subject to paragraph 4(c) above, Seller
will pay the deed stamp taxes and one-half of escrow fees, title
insurance premium and any brokerage commissions payable and
commissioned by Seller. Buyer will pay all recording fees, one-
half of the escrow fees, the costs of a survey or survey update
(if required by Buyer). Each party will pay its own attorneys'
fees and costs to document and close of this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) The property shall be subject to an
occupancy agreement between Buyer and Seller,
which occupancy agreement shall address the
payment of taxes and installments of special
assessments due and payable during the period
prior to the date of closing. Buyer shall be
responsible for a prorata share of real estate
taxes from February 17, 2000, regardless of the
date of closing, and Seller shall be responsible
for real estate taxes prior thereto, reserving
unto Seller the right to pursue the former
occupant for the same. However, Seller represents
that 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, or shall be as of closing. Unpaid levied
and pending special assessments existing on the
date of Closing shall be pro-rated between Buyer
and Seller as of the date of Closing. Buyer shall
pay all taxes due and payable in the year after
Closing and any unpaid installments of special
assessments payable therewith and thereafter.
(b) The property shall be subject to an
occupancy agreement between Buyer and Seller,
which occupancy agreement shall address the
payment of rent and responsibility for expenses of
maintenance during the period prior to closing.
Subject to such agreement and terms therein to the
contrary, all income and all operating expenses
from the Property shall be prorated between the
parties and adjusted by them as of the date of
Closing. Seller shall be entitled to all income
earned and shall be responsible for all expenses
not allocated to Buyer under the Occupancy
Agreement incurred prior to the date of Closing,
and Buyer shall be entitled to all income earned
and shall be responsible for all operating
expenses of the Property incurred on and after the
date of closing, except as otherwise set forth
herein or in the Occupancy Agreement. To the
extent any of said items cannot be determined at
Closing after reasonable efforts, Seller and Buyer
shall compute such prorations as soon as possible
after Closing and settle such adjustment as of the
Closing date.
11. SELLER'S COVENANTS, REPRESENTATIONS AND AGREEMENTS.
(a) Seller represents and warrants as of this date
that:
(i) Except for the Net Lease
Agreement with Sports City Cafe and its
sublessees or concessionaires, there are no
other leases of the property.
(ii) It is not aware of any pending
litigation, condemnation, or rezoning
proceedings against the Property or Seller's
interest in the Property.
It is not aware of any
contracts it has executed that would be
binding on Buyer after the closing date.
Seller is validly existing and
duly qualified to transact business in the
State of Texas.
To the best of Seller's
knowledge the Property is not subject to any
claim, demand, suit, unfiled lien or other
proceeding of any kind which affects or may
affect the Property.
There are no leasing
commissions, fees or other compensation owed
in connection with the leasing of the
Property.
Seller agrees that as long as
Buyer abides by the terms of the Occupancy
Agreement, Seller will not enter into any new
contracts or amend or modify any current
leases (except to the extent that the
existing Lease may be considered modified by
the Occupancy Agreement) 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.
Seller is not a "foreign
person" which would subject Buyer to the
withholding tax provisions of Section 1445 of
the Internal Revenue Code.
To Seller's best knowledge,
the Property and all business operations
thereon are in compliance with all applicable
federal, state and local statutes, laws and
regulations.
Seller is not aware of, and
has received no notice of, the presence,
disposal, leakage or migration on to the
Property of any hazardous waste or toxic
substances regulated by any federal, state or
local governmental authorities which may be
in violation of any applicable law, rule or
regulation.
In addition to the acts and
deeds recited herein and contemplated to be
performed, executed, and delivered by Seller,
Seller 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
assurances, as Buyer or the Title Company may
require and Seller deems to be reasonable in
order to consummate the transactions
contemplated herein.
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 hereby.
To Seller'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 Seller is a party or by which Seller is
bound.
(b) All covenants, representations and warranties
of Seller contained herein are true and correct as
of the date hereof and shall be true and correct
as of the date of Closing.
12. DISCLAIMER. Seller and Buyer acknowledge and agree
that Seller acquired the Property through a sale\leaseback with a
prior tenant. Seller has been an absentee landlord.
Consequently, Seller has little, if any, knowledge of the
physical characteristics of the Property.
Accordingly, except as otherwise specifically stated in this
Agreement, Seller hereby specifically disclaims any warranty,
guaranty, or representation, oral or written, past, present, or
future of, as to, or concerning (i) the nature and condition of
the Property, including, without limitation, the water, soil, and
geology, and the suitability thereof and of the Property for any
and all activities and uses which Buyer may elect to conduct
thereon; (ii) except for the warranty contained in the Deed to be
delivered by Seller at the Closing, the nature and extent of any
right of way, Lease, possession, lien, encumbrance, license,
reservation, condition, or otherwise, and (iii) the compliance of
the Property or its operation with any laws, ordinances, or
regulations of any government or other body.
Buyer acknowledges that having been given the opportunity to
inspect the Property, Buyer is relying solely on its own
investigation of the Property and not on any information
provided or to be provided by Seller except as set forth herein.
Buyer further acknowledges that the information provided and to
be provided with respect to the Property by Seller 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.
BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN ITS
THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER HAS NO
OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS THEREON, OR TO
PERFORM ANY OTHER ACT REGARDING THE PROPERTY, EXCEPT AS EXPRESSLY
PROVIDED HEREIN.
13. CLOSING.
Before the closing date, Seller will
deposit into escrow: an executed special warranty
deed conveying fee simple, insurable title of the
Property to Buyer; and
the original Sports City Cafe Lease
and all amendments thereto;
Lien waiver affidavit
Form 10995
FIRPTA Certificate
Delivery of original warranties
pertaining to the improvements if any
warranties be in Seller's possession,
permits/licenses, keys, if any, in Seller's
possession.
Certified copy of Partnership
Agreement for the Seller
(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 to close escrow. Both
parties will sign 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 title policy;
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. DEFAULT. If Buyer defaults and Seller has fully
performed all obligations of Seller hereunder and satisfied all
conditions to Closing to be performed by Seller, Buyer will
forfeit all rights and claims and Seller will be relieved of all
obligations and will be entitled as its sole and exclusive
remedy, to retain all monies heretofore paid by the Buyer as
liquidated damages, actual damages being difficult if not
impossible to calculate and the parties having made a good faith
effort to determine the same.
If Seller shall default, Buyer irrevocably waives any right
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 and Second
Payment, performed all of its other obligations and satisfied
all conditions under this Agreement within the required time
periods, 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 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 assurances as Seller or
the Title Company may require and Buyer deems to 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,
(ii) any order of any court or other agency of
government having jurisdiction hereof, or (iii) any
agreement or instrument to which Buyer is a party or by
which Buyer is bound.
16. DAMAGE, 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, 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 ten-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 resulting from said
damage or destruction to the extent that the same are
payable with respect to damage to the Property, and are
so payable to Seller under the Sports City Cafe Lease.
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 all the Seller's right,
title and interest in and to any award made, or to be
made, in the condemnation proceeding.
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. MISCELLANEOUS.
(a) This Agreement may be amended only by a
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 understandings. Exhibits attached to this
Agreement are incorporated into this Agreement.
(b) If this escrow has not closed by thirty
(30) days after the end of the Due Diligence
Period, through no fault of Seller, Seller may
either, at its election, extend the closing date,
exercise any remedy available to it by law, or
terminate this Agreement .
(c) Funds to be deposited or paid by Buyer
will be good and clear funds in the form of cash,
cashier's checks or wire transfers..
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.
Further Conditions to Closing:
Seller has complied with and
otherwise performed each of the covenants and
obligations of Seller set forth herein;
No adverse change to the title
or to the environmental condition of the
Property occurs after the Due Diligence
Period.
All representations, warranties and
covenants contained herein shall, as applicable,
survive the Closing and delivery of the deed for a
period of one (1) year.
This Agreement shall be governed by end
construed in accordance with the laws of the State
of Texas.
This Agreement may be executed in
multiple counterparts, each of which shall be an
original copy and together which shall constitute
one instrument.
Notices:
If to Seller:
Attention: Xxxxxx X. Xxxxxxx
AEI Fund Management XVI, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
If to Buyer:
Attention:
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, and tendering the $50,100 First
Payment to the Escrowee. Seller has five (5) business days
within which to accept this offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year first above written.
BUYER:
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
Accepted and agreed this 5th day of April, 2000.
SELLER:
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: AEI Fund Management XVI, Inc., its
corporate general partner
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X Xxxxxxx, President
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: AEI Fund Management XVII, Inc., its
corporate general partner
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X Xxxxxxx, President
Purchase Agreement, Mesquite, Texas Property, 0000 Xxxxx Xxxxxxxx
Xxxxxxxxx
