PURCHASE AGREEMENT
0000 Xxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
This AGREEMENT, entered into effective as of the 23rd of August,
2002.
l. PARTIES. Seller is AEI Real Estate Fund 85-B 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 Xxxxxxx
Xxxxxxxxx and/or its assigns ("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 the
provisions of Buyer review of title as set forth below in
paragraph 8, including that certain Net Lease Agreement between
Seller and Xxxxx X. Xxxxxx & Xxxxx X. Xxxxxxxx.
3. PURCHASE PRICE. The purchase price for this Property is
$262,500 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 $2,000
in cash or good funds (the "First Payment") to Ticor Title
Insurance Company, Attn: Xxxx Xxxxxxxx, 000 X. Xxxx Xxxxxx,
Xxxxx Xxxxx, XX 00000 ("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 Review 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 or this agreement is properly cancelled by Buyer
pursuant to the terms hereof.
(b) Buyer will pay the balance of purchase price for the
Property, $260,500 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 the thirtieth
day after the Inspection and Feasibility Study Period (as
extended, if applicable) is completed.
6. DUE DILIGENCE. Buyer will have until the expiration of the
30th day after the Effective Date of this Agreement (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 at Buyer's sole
expense. Buyer agrees to indemnify and hold Seller harmless 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.
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. If this Agreement is not canceled as
set forth herein, the First Payment shall be non-refundable
unless Seller shall default hereunder or this Agreement is
properly cancelled by Buyer pursuant to the terms hereof.
If Buyer cancels this Agreement as permitted under this
Section or Section 16, except for any liabilities under sections
15(a)(iii) and 16(b) of this Agreement (which will survive),
Buyer (after execution of such documents reasonably requested by
Seller to evidence the termination hereof) shall be promptly
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
relinquished 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. Seller shall
notify Escrowee upon Seller's acceptance of this Agreement.
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 exceptions reflected
in the title commitment reasonably acceptable to Buyer (the
"Permitted Exceptions"), current real property taxes and
assessments; and survey exceptions. The survey, if required by
Buyer or Escrowee, shall be ordered and paid for by the Buyer.
Seller shall have a Title Commitment issued and tendered to Buyer
within twenty (20) days of the date this Purchase Agreement is
delivered to Escrowee.
Buyer shall be allowed until the expiration of the
"Inspection and Feasibility Study Period" for examination and the
making of any objections to the survey and to any exception
contained in the Title Commitment, 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 cure Buyer's
objections, or in the alternative to obtain a commitment for
insurable title insuring over Buyer's objections. If within such
30-day period Seller fails to cure Buyer's objections, or is
unable to obtain insurable title to Buyer's reasonable
satisfaction, Buyer may elect to cancel this Agreement and (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.
If Buyer shall make no written objection to Seller within
the Review 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
Commercial Advantage, Inc. only. Seller shall pay for the cost
of issuing the title commitment and the cost of the title
insurance premium for an Owner's policy. Buyer will pay 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). All other closing costs shall be paid by Seller and
Buyer in the manner in which such costs are customarily paid by
such parties in transactions involving real property in Lake
County, Indiana. 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 and any known increase in the assessed valuation or the
tax rate. 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. However, Seller
shall remain responsible for the pro-rata share of taxes prior to
closing and Buyer assumes the responsibility for the pro-rata
share of taxes after closing. Seller and Buyer agree that the
parties shall, if necessary, re-prorate the taxes when actual tax
bills for the year of closing are available. This agreement to
re-prorate taxes shall survive closing.
11. SELLER'S REPRESENTATION AND AGREEMENTS.
Seller represents and warrants as of this date that:
(i) 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.
(ii) The Property is subject to a Net Lease Agreement as
follows:
(a) Net Lease Agreement entered into February 19, 1990 by
and between Seller and Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxxxx
as extended and amended by letter agreement dated April 27,
2000 and acknowledged in letter agreement dated April 24,
2002.
(iii) It is not aware of any 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) Buyer acknowledges and agrees that Buyer is not relying
upon any representation or warranties made by Seller or
Seller's Agent except those provided herein.
(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 of
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 special warranty deed subject to the Permitted
Exceptions conveying good and indefeasible title of the
Property to Buyer. At Closing, Seller shall deliver to
Buyer and the Title Company a standard Seller's Affidavit
regarding liens and judgments. Buyer will be given five (5)
business days, prior to closing, to review and approve all
closing documents.
(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, Buyer will forfeit all rights
and claims to the Property and Seller will be relieved of all
obligations and will be entitled to retain all monies heretofore
paid by the Buyer as Seller's sole remedy.
If Seller shall default, Buyer may, at its option, either
terminate this Agreement and receive a full and immediate refund
of the First Payment or seek to enforce specific performance of
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. PROPERTY INSPECTION AND ENVIRONMENTAL.
(a) Seller shall provide Buyer access to the Property from
time to time for the purpose of conducting inspections
thereof including mechanical, structural, electrical and
other physical inspections. Buyer has until the end of the
Inspection and Feasibility Study Period to complete such
physical inspections.
(b) Buyer shall indemnify, defend, and hold harmless 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,
and shall survive closing.
(c) Buyer shall pay for any Phase I Environmental studies it
wants to be performed on the Property. If Buyer desires a
Phase I Environmental, Buyer shall obtain and review the
same within the Inspection and Feasibility Study Period. If
Buyer terminates this Agreement prior to the expiration of
the Inspection and Feasibility Study Period, Buyer will
provide Seller with copies of all reports and test results
Buyer had performed on the Property.
(d) Seller shall deliver to Buyer, on or before ten (10)
days following the date Seller signs this Agreement, the
following items to the extent within Seller's possession, or
if such item(s) do not exist or Seller does not possess such
items, a statement to that effect:
(a.) Seller's internally generated income statement for 2001
and year-to-date 2002 for this property.
(b.) Copy of tenant's latest financial statements.
If this transaction does not close as scheduled, Purchaser
shall return the items set forth in (a.)-(b.) to Seller
within a reasonable time following termination of this
Agreement.
The Inspection and Feasibility Study Period shall be
extended for one (1) day for each day by which Seller is
late in delivering the items (a.)-(b.).
17. 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 17a 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 hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds in relation to the
Property.
(b) If, prior to closing, the Property, or any part thereof,
is taken or notice of a taking is received from any
condemning authority (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 17(a) or 17(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).
18. SELLER'S AND BUYER'S BROKERS. Commercial Advantage, Inc. is
the broker representing the Buyer and the Seller in this
transaction. Other than Commercial Advantage, Inc. whose eight
percent (8%) commission is to be paid solely by Seller (and only
shall be paid commission if this transaction as contemplated
shall close); 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
19. CANCELLATION If either party elects to cancel this Contract
because of any breach by the other party, the party electing to
cancel shall deliver to the defaulting party and the escrow agent
a notice stating that this Contract shall be canceled unless the
breach is cured within 5 days following the delivery of the
notice to the defaulting party. If the breach is not cured
within the 5 days following the delivery of the notice to the
defaulting party, this Contract shall be canceled.
20. 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) 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.
(c) 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: Xxxx X. Xxxxxx
AEI Real Estate Fund 85-B Limited Partnership
1300 Minnesota World Trade Center
00 X. 0xx Xxxxxx
Xx. Xxxx, XX 00000-0000
If to Buyer:
Xxxxxxx Xxxxxxxxx
0000 Xxxx Xx
Xxxxxxxxxxxx, XX 00000
(d) Buyer may assign this Agreement at any time without the
consent or prior approval of Seller, and following any such
assignment, Seller agrees to close this transaction with the
assignee of Buyer. The original Buyer named herein shall
remain liable for any indemnity obligations hereunder.
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 along with the Option Consideration, and
delivering a copy of this Agreement signed by Buyer and the
$2,000.00 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 seven (7) business days after receipt of the executed
offer and acknowledgment of receipt of the First Payment by
Escrowee within which to accept this offer by fully executing
this contract and giving both Buyer and Escrowee written notice
thereof; if not accepted by Seller, Escrowee shall immediately
return the First Payment to Buyer and shall not require any
releases by the Seller. The Effective Date of this Agreement
shall be the date Buyer receives a fully executed original
counterpart of this Agreement.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
Xxxxxxx Xxxxxxxxx
By: /s/ Xxxxxxxx Xxxxxxxxx
Its: Sole Proprietor
Title
SELLER:
AEI REAL ESTATE FUND 85-B LIMITED PARTNERSHIP, a Minnesota
limited partnership.
By: Net Lease Management 85-B, Inc., its corporate general
partner
By: /s/ Xxxx X Xxxxxx
Xxxx X. Xxxxxx, Chief Financial Officer
ESCROWEE:
The Title Company hereby acknowledges receipt of a fully
executed copy of this Agreement and the First Payment referred to
in the Agreement on August 22, 2002, 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 Lake County,
Indiana, 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.
Ticor Title Insurance Company
By: /s/ Xxxxxx X Xxxxxxxx
Its: Escrow Manager
Exhibit A
Legal Description
The West 108.00 feet of Lot 6 in Kuehls Acres, as per plat
thereof, recorded in Plat Book 22 Page 40, in the Office of the
Recorder of Lake County, Indiana.
Permanent Real Estate Tax Index Number: 15-78-6
Common Address: 0000 X. Xxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxx
