PURCHASE AGREEMENT
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
This AGREEMENT, entered into effective as of the 20th of August,
2001.
l. PARTIES. Seller is AEI Real Estate Fund XVII Limited
Partnership ("Seller"). Seller holds an undivided 100% interest
in the fee title to that certain real property legally described
in the attached Exhibit "A" (the "Property"). Buyer is Xxxx X.
Xxxx ("Buyer"). Seller wishes to sell and Buyer wishes to buy the
Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
is legally described on Exhibit A attached hereto, subject to all
easements, covenants, conditions, restrictions and agreements of
record that do not affect marketability of title ("Permitted
Exceptions"), subject to the provisions of Buyer review of title
as set forth below in paragraph 8, including that certain Net
Lease Agreement dated September 21, 1995. See paragraph 11 for
certain disclosures by Seller concerning the Lease
3. PURCHASE PRICE. The purchase price for this Property is
$750,000 cash based on the following terms:
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $10,000
in cash or good funds (the "First Payment") to First
American Title Insurance Company ("Escrowee"). The First
Payment will be credited against the purchase price when and
if escrow closes and the sale is completed, or otherwise
disbursed pursuant to the terms of this Agreement. After
the expiration of the Inspection and Feasibility Study
Period as defined in paragraph 6 below, the First Payment
held for the account of Seller shall become non-refundable,
unless Seller shall default hereunder.
(b) Buyer will pay the balance of purchase price for the
Property, $740,000 in cash or good funds (the "Second
Payment"), at closing to the Escrowee who shall close the
transaction according to the terms hereof.
5. CLOSING DATE. Escrow shall close on or before thirty days
after the Inspection and Feasibility Study Period is completed.
6. DUE DILIGENCE. Buyer will have until the expiration of the
14th day after delivery of both the signed "Agreement" and the
Due Diligence Documents, as defined below, (the "Inspection and
Feasibility Study Period"), to conduct all of its inspections and
due diligence and satisfy itself regarding title to the Property,
and to inspect the Property. Buyer shall have the right to extend
the Inspection and Feasibility Study Period by an additional
fourteen (14) days by paying Escrowee an additional $5,000,
thereby increasing the First Payment by an additional $5,000.00,
before expiration of the initial fourteen (14) day Inspection and
Feasibility Study Period. Buyer agrees to indemnify and hold
harmless Seller for any loss or damage to the Property or persons
caused by Buyer or its agents arising out of such physical
inspections of the Property. Buyer expressly acknowledges that
the sale of the Property as provided for herein is made on an "AS
IS" basis, and such provision shall survive closing.
Without representing or warranting the truth or accuracy of
those items prepared by third parties, Seller will provide to
Buyer within 3 business days after both parties have executed
this Agreement copies, if in Seller's possession, of any surveys,
environmental reports, Seller's title policy, certificates of
occupancy, leases and subleases, and guaranties of lease
affecting the Property ("Due Diligence Documents"). In addition,
Seller hereby consents to Buyer having discussions with any
prospective lessees of the Property. See paragraph 11 for
Seller's representations concerning the Lease.
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 personal delivery to Seller and
escrow holder before the expiration of the Inspection and
Feasibility Study Period. Such notice shall be deemed effective
only upon receipt by Seller. If this Agreement is not canceled as
set forth herein, 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 title insurance and/or escrow cancellation
fees of the escrowee which will be paid by the Buyer, and any
liabilities under sections 6 and 15(a)(iii) 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 Seller shall be in default of any obligation
hereunder, or 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 Buyer and the First Payment
shall be deposited by Buyer with Escrowee. 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. The parties
agree to sign these additional instructions of the Escrowee, if
any. If there is any conflict between these other instructions
and this Agreement, this Agreement will control. Escrow will be
opened upon acceptance of this Agreement by Seller.
8. TITLE. Closing will be conditioned on the commitment of
Escrowee 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 will own marketable and insurable fee simple
title to the Property subject only to: the Permitted Exceptions
as defined in paragraph 2 above; current real property taxes and
assessments; and survey exceptions.
Buyer shall be allowed until the expiration of the
"Inspection and Feasibility Study Period" to obtain said
commitment for title insurance, and for examination and the
making of any objections to marketability of title thereto, said
objections to be made in writing or deemed waived. If any
objections are so made, the Seller shall be allowed thirty (30)
days to make such title marketable or cure Buyer's objections, 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 by Seller to the
Buyer, the parties shall perform this Agreement according to its
terms.
If Buyer shall make no written objection to Seller within
the Inspection and Feasibility Study Period setting forth Buyer's
objections to the status of title, Buyer shall have been deemed
to have waived any such objections.
9. CLOSING COSTS. Seller will pay the deed stamp taxes, if any,
and one-half of escrow fees attributable to the closing services
for this transaction, and any brokerage commissions payable to
Apartment Investment Realty only. Buyer will pay the cost of the
title insurance premium for an Owner's policy (if desired by
Buyer). Buyer will pay all recording fees, one-half of the
escrow fees, the costs of a new survey or an update to the Survey
in Seller's possession (if an update is required by Buyer). Each
party will pay its own attorneys' fees and costs to document and
close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
Seller represents that to the best of its knowledge, all real
estate taxes and assessments due and payable in all years prior
to the year of Closing have been paid in full. Responsibility
for real estate taxes and special assessments shall be prorated
as of the date of closing based upon the most recently available
tax xxxx with no readjustment for the taxes due for the year in
which closing shall occur. All real estate taxes and special
assessments due and payable in the years following the year in
which closing occurs shall otherwise be the responsibility of
Buyer. The parties acknowledge and agree that the tenant of the
property is responsible for payment of taxes and assessments and
thus no actual proration of funds at closing shall occur, except
that appropriate adjustment on the closing statement to reflect
the transfer of an escrow for taxes being held by Seller.
However, Seller shall remain responsible for the pro-rata share
of taxes and assessments prior to closing and Buyer assumes the
responsibility for the pro-rata share of taxes and assessments
after closing, except as otherwise reflected on the closing
statement signed by both parties.
11. SELLER'S REPRESENTATION AND AGREEMENTS.
Seller represents and warrants as of this date that:
(i) The Property is subject to a Net Lease Agreement dated
September 21, 1995 (the "ease"), which lease is guaranteed by
certain individuals; lessee's interest in said lease was
assigned on September 27, 1999, and also at such time, Seller as
Lessor entered into a Tri-party Agreement with Lessee and
Provident Bank, which inter alia, provided for Seller's consent
to the placement of a leasehold mortgage over the Lessee's
interest in the Property and certain items of Lessee's personalty
and provided for Provident Bank to receive notice of Lessee
defaults, among other rights. A copy of said Net Lease
Agreement, Guarantees, and Tri-party Agreement will be provided
to Buyer concurrent with the execution of the Agreement by both
parties hereto. The current Lessee has filed for bankruptcy and
has not to date accepted or rejected the Lease. On July 27,
2001, Lessee filed a motion to extend the time to assume or
reject the Lease though September 25, 2001. Seller does not
intend to object to that motion at this time. The rejection of
the lease by Lessee shall not be a basis for the termination of
this Agreement.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property that have not been disclosed to
Buyer. Provided, however, that Seller is a defendant in a
lawsuit brought by two homeowners alleging that the lessee
of the Property (and alleged co-defendants) negligently or
intentionally caused waste grease products to be deposited
in the sanitary sewer system causing a residential sewer
main to back up, resulting in damage to the homeowners and
their properties (the "Lawsuit"). Copies of the Summons and
Complaints in this matter will be turned over to the Buyer
within 3 business days after all parties have signed this
Agreement. This action is not to date in rem and does not
involve the Property per se, but does affect the lessee of
the Property, and hence is being disclosed herein. Seller
shall indemnify, defend, and hold harmless Buyer from and
against any and all losses, claims, causes of action,
liabilities, and costs arising from the Lawsuit. The
foregoing duty of indemnification shall include the duty to
pay all reasonable attorney's fees incurred by the Buyer in
responding to or defending any such claims or proceedings.
Buyer agrees to allow Seller reasonable access to the
Property after closing and Buyer shall cooperate (at no
expense to Buyer) with Seller to allow Seller to comply with
the terms of this indemnity and to defend the Lawsuit.
(iii) It is not aware of any other contracts affecting this
Property and potentially or actually binding on Buyer after
the closing date.
(iv) 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.
12. DISCLOSURES.
(a) 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 the
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 of title 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.
(b) This Agreement is subject to an inspection contingency
as set forth in Section 6. Buyer acknowledges and agrees
that, except as otherwise stated herein this Agreement,
Buyer is not relying upon any representation or warranties
made by Seller or Seller's Agent.
(c) 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 by Seller or to be provided except as
set forth herein. Buyer expressly acknowledges that, in
consideration of the agreements of the 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, profitability, or
fitness for a particular purpose, in respect of the
Property.
(d) 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.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ALSO
AGREES THAT SELLER WILL HAVE NO LIABILITY OF ANY TYPE,
DIRECT OR INDIRECT, TO BUYER OR BUYER'S SUCCESSORS, ASSIGNS,
LENDERS OR AFFILIATES IN CONNECTION WITH ANY HAZARDOUS,
TOXIC, DANGEROUS, FLAMMABLE, EXPLOSIVE OR CHEMICAL
SUBSTANCES OF ANY TYPE (WHETHER OR NOT DEFINED AS SUCH UNDER
ANY APPLICABLE LAWS) ON OR IN CONNECTION WITH THE PROPERTY
EITHER BEFORE OR AFTER THE CLOSING DATE.
The provisions (a) through (d) shall survive closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into escrow an
executed limited warranty deed subject to Permitted Exceptions
conveying insurable title of the Property to Buyer. At Closing,
Seller shall deliver to Buyer a standard Seller's Affidavit
regarding liens and judgments.
(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 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. DEFAULTS. If Buyer defaults after the expiration of the
Inspection and Feasibility Study Period, Buyer will forfeit all
rights and claims and Seller will be relieved of all obligations
and will be entitled to retain all monies 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, performed
all of its other obligations and satisfied all conditions under
this Agreement, and unconditionally notifies Seller that it
stands ready to tender full performance, purchase the Property
and close escrow as per this Agreement. Provided, however, that
in no event shall Seller be liable for any consequential,
punitive 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) 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.
(ii) 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.
(iii) Buyer agrees to indemnify and hold Seller harmless
from any and all claim of any persons or entities claiming a
brokerage or other fee arising out of representation of
Buyer.
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
$20,000, 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 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.
If the cost of repair is less than $20,000.00, Buyer shall
be obligated to otherwise perform hereunder 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 in relation to the
Property.
(b) If, prior to closing, the Property, or any part thereof,
is taken (other than as disclosed in writing to Buyer prior
to the date of this Agreement) 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 relation to the Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16(a) or 16(b), 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. SELLER'S AND BUYER'S BROKERS. Xxxx Xxxxxxx of Apartment
Investment Realty is the broker representing the Buyer (and the
Buyer only) in this transaction. The Seller is not represented by
a broker in this transaction. Other than Apartment Investment
Realty, whose commission is to be paid solely by Seller only upon
the successful closing with Buyer of the transaction contemplated
herein, both parties represent and warrant that no other broker
has been involved on behalf of the warranting party, and both
parties agree to indemnify the other and hold harmless from any
claim through or on behalf of such other party.
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 understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed through no fault of
Seller, by the thirtieth day after the completion of the
Inspection and Feasibility Study Period, Seller may either,
at its election, extend the closing date, exercise any
remedy available to it by law, including but not limited to
terminating 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.
(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 XVII Limited Partnership
1300 Minnesota World Trade Center
00 X. 0xx Xxxxxx
Xx. Xxxx, XX 00000-0000
If to Buyer:
Xxxx X. Xxxx
C/o Corporate Tower
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 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 and delivering a copy of this Agreement
signed by Buyer and the $10,000.00 First Payment to Escrowee;
Escrowee shall sign below acknowledging receipt of this Agreement
signed by Buyer and the First Payment, which, will be deposited
in to escrow by Escrowee. Seller has three (3) business days
after receipt of the executed offer and acknowledgment of receipt
of the First Payment by Escrowee within which to accept this
offer; if not accepted by Seller, Escrowee shall immediately
return the First Payment to Buyer.
(e) Buyer may freely assign his rights and obligations
under this Agreement to a third party controlled by Buyer;
provided however, Buyer shall not be relieved of his obligations
hereunder.
(f) To enable Buyer to effect a "like kind" exchange under
Section 1031 of the Internal Revenue Code, Buyer may elect to
close this transaction as a tax free exchange. Seller will
reasonably cooperate with Buyer in connection with such "like
kind" exchange transaction and will execute such documents as are
reasonably requested, provided that Seller shall make no
representations or warranties whether the transaction will
qualify for "like kind" exchange treatment, which is solely
Buyer's responsibility. Buyer shall be required to consummate the
transaction contemplated by this Agreement on the closing date
hereunder irrespective of Buyer's ability to affect a "like kind"
exchange.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
/s/ Xxxx X Xxxx
Xxxx X. Xxxx
SELLER:
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
ESCROWEE:
The undersigned hereby acknowledges receipt of a fully
executed copy of this Agreement and the First Payment referred to
in the Agreement on August 20, 2001, and agrees to accept, hold,
deliver and disburse the First Payment and Second Payment,
together with all interest accrued thereon and received by the
Title Company, strictly in accordance with the terms and
provisions of this Agreement. In performing any of its duties
hereunder, the Title Company shall not incur any liability to
anyone for any damages, losses or expenses, except for
negligence, willful default or breach of trust, and it shall
accordingly not incur any liability with respect (i) to any
action taken or omitted in good faith upon advice of its counsel,
or (ii) to any action taken or omitted in reliance upon any
instrument, including any written notice or instruction provided
for in this Agreement, not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which
the Title Company shall in good faith believe to be genuine, to
have been signed or presented by a proper person or persons and
to conform with the provisions of this Agreement. Seller and
Buyer hereby agree to indemnify and hold harmless the Title
Company against any and all losses, claims, damages, liabilities
and expenses, imposed upon the Title Company or incurred by the
Title Company in connection with its acceptance or the
performance of its duties hereunder, including any litigation
arising from this Agreement or involving the subject matter
hereof, unless such losses, claims, damages, liabilities and
expenses arise out of Title Company's negligence, willful default
or breach of trust. In the event of a dispute between Seller and
Buyer sufficient in the discretion of the Title Company to
justify its doing so, the Title Company shall be entitled to
tender into the registry of the District Court of Xxxxxxxx
County, Ohio, all money or property in its hands under this
Agreement, together with such legal pleadings as it deems
appropriate, and thereupon be discharged from all further duties
and liabilities under this Agreement. Seller and Buyer shall
bear all costs and expenses of such legal proceedings.
First American Title Insurance Company
By: /s/ Xxxxxxxxxxx X Xxxxxx Xxxxxxxxxxx X Xxxxxx
[Print Name]
Its: Agent
