PURCHASE AGREEMENT
AutoMax
Central Ave
Columbia Heights, MN
This AGREEMENT, entered into effective as of the 20th of Nov,
1996 .
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 Madan
Estates /s/ R /s/ HSM [changed to conform to the facts] married
with rights of survivorship ("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 ("Permitted Exceptions").
3. Purchase Price. The purchase price for this Property is
$414,375 /s/ R [changed to conform to the facts] 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 $5,000
to be deposited into Escrow (the "First Payment"). The First
Payment will be credited against the purchase price when and
if escrow closes and the sale is completed.
(b) Balance of purchase price, $409,375 /s/R [changed to
conform to the facts] to be deposited into escrow on or
before closing.
5 Closing Date. Escrow shall close on or before January 31,
1997. /s/ HSM /s/ R [changed to conform to the facts]
6. Contingencies: Buyer agrees to use its best efforts to
secure a commitment for financing of the Purchase Price on terms
reasonably satisfactory to it and to execute all documents
reasonably required to consummate said financing. In the event
Buyer cannot secure a commitment for such financing on or before
forty five days from the date first written above, and in the
event Buyer delivers to Seller on or before said date written
notice of its failure to secure said commitment, then in such
event this agreement shall become null and void and the First
Payment paid herein shall be refunded to Buyer. Absent delivery
of said notice by Buyer to Seller, and absent default by Seller
hereunder, after the expiration of said forty five days, this
contingency to Buyer's obligations hereunder shall be deemed
satisfied, the First Payment shall be non-refundable and shall be
the sole property of Seller.
7 . Due Diligence. Buyer will have until the expiration of the
tenth day after delivery of each of following items (the "Review
Period"), to be supplied by Seller, to conduct all of its
inspections and due diligence and satisfy itself regarding each
item, the Property, and this transaction.
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) Copies of a Certificate of Occupancy or other such
document as of the date reflected thereon as may be in
Seller's possession certifying completion and granting
permission to permanently occupy the improvements on the
Entire Property.
(c) Copies of an "as built" survey of the Property done
concurrent with Seller's acquisition of the Property.
(d) Lease of the Property showing occupancy date, lease
expiration date, rent, and security deposit, if any, and
Guarantys, if any, accompanied by such tenant financial
statements as provided to Seller by the Tenant and/or
Guarantors.
(e) Phase I Environmental Site Assessment dated April 19,
1996.
(f) UST Abandonment and Phase II Investigation Report dated
June 25, 1996.
(g) Within forty-five (45) days after execution of this
Agreement by both parties, Buyer shall have the right to
inspect and obtain further investigations of the Property
(the "Inspection Period"). Buyer shall indemnify and hold
Seller harmless for any loss or damage caused by Buyer or
its agents in connection with the inspection.
Buyer acknowledges that the information provided and to be
provided by Seller with respect to the Property and to the
Lessee and Guarantors of Lease was obtained from a variety
of sources and Seller neither (a) has made independent
investigation or verification of such information, or (b)
makes any representations as to the accuracy or completeness
of such information. Seller is not aware that such
information is inaccurate or misleading.
At closing, Seller shall provide Buyer with an affidavit
under penalty of perjury, that Seller is not a "foreign
person".
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 Review Period or
Inspection 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 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. If Buyer shall fail to cancel this
Agreement within either the Review or Inspection Period, absent
default by Seller, the First Payment shall become non-refundable
and shall be the sole property of Seller.
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
8. Escrow. Escrow shall be opened by Seller and the First Payment
deposited with an escrow holder upon acceptance of this
agreement. The escrow holder will be a nationally-recognized
escrow company selected by Seller and acceptable to Buyer. 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 opened upon
acceptance of this Agreement.
8. Title. Closing will be conditioned on the commitment of a
title company selected by Seller and acceptable to Buyer 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 insurable title to the Property subject only
to: such matters as tenant Tenant has created, suffered or
permitted to accrue, the title company's standard exceptions;
current real property taxes and assessments; survey exceptions;
and other items of record disclosed to Buyer during the
contingency period not affecting marketability of title.
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability of exceptions to title thereto, said objections to
be made in writing or deemed waived. If any objections are so
made, the Seller shall be allowed ten (10) 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 to the Buyer, the
parties shall perform this agreement according to its terms.
9. Closing Costs. Seller will pay the deed stamp taxes and
one-half of escrow fees, /s/ R [changed to conform to the facts]
Seller shall pay for the cost of issuing the title commitment.
Buyer will pay the cost of the title insurance premium for an
Owner's policy, (if Buyer shall decide to purchase the same) all
recording fees, one-half of the escrow fees, the costs of a
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 of this transaction.
10. Real Estate Taxes, Special Assessments and Prorations.
(a) Although the Entire Property is subject to a triple net
lease, Seller holds escrow paid by Tenant to Seller for real
estate taxes. Seller shall provide Buyer with a real estate
tax proration at closing and such proration will be listed
on the Settlement Statement as a credit to the Buyer.
Seller represents that to the best of its
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
knowledge, all real estate taxes and installments of special
assessments due and payable in all years prior to the year
of Closing have been paid in full. Regardless,
responsibility for such taxes shall be prorated as of the
date of closing for any portion not paid by the Tenant of
the Property.
(b) All income and all operating expenses payable by Seller
from the Entire 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 incurred prior to the date of
Closing to the extent not paid by the Tenant.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between Seller and J
D Enterprises of Minnesota, Inc., ("Tenant") Seller is not
aware of any leases of the Property.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) It is not aware of any contracts Seller has executed
that would be binding on Buyer after the closing date.
(iv) To the best knowledge of undersigned, there are no
xxxxx, septic systems, drain fields or any other private
sewer system on the Property, nor any underground storage
tanks.
12. Disclosures.
(a) To the best of Seller's knowledge: there are not now,
and at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and all such items are in
good operating condition and repair and in compliance with
all applicable governmental , zoning and land use laws,
ordinances, regulations and requirements.
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and ground water conditions. Buyer
acknowledges receipt of Phase I Environmental Site
Assessment dated April 19, 1996, and the UST Abandonment and
Phase II Investigation Report dated June 25, 1996. To the
best of Seller's knowledge: there is no proceeding or
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
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.
Except as otherwise provided in this Agreement and except to
the extent that Seller has knowledge of any hazardous
substances or materials on or in connection with the
Property which Seller is not disclosing to Buyer hereunder,
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date.
(d) Subject to Seller's representations contained in the
Agreement, including subparagraphs 12(a), (b) and (c) above,
Buyer agrees that it shall be purchasing the Property in its
then present condition, as is, where is, and Seller has no
obligations to construct or repair any improvements thereon
or to perform any other act regarding the Property, except
as expressly provided herein.
(e) Buyer acknowledges that, having been given the
opportunity to inspect the Property and such financial
information on the Lessee and Guarantors of the Lease as
Buyer or its advisors shall request, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided except as
set forth herein. Buyer 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, profitability or
fitness for a particular purpose, in respect of the
Property.
13. Closing.
At Closing, Seller shall deliver to Buyer the following:
(i) A standard Seller's Affidavit regarding liens
and judgments.
(ii) All keys to the Property in the possession of
Seller.
(iii) An Assignment of Seller's interest as lessor
under any and all leases
affecting the Property.
(v) Seller shall transfer to Buyer all escrows.
prepaid rent and security deposits, if any, with respect to
the Property.
(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.
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
(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 and Seller will be relieved of all obligations and
will be entitled to retain the First Payment heretofore paid by
the Buyer. Seller shall retain all remedies available to Seller
at law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, 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 actual, punitive,
consequential or speculative damages arising out of any default
by Seller hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
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, (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.
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
16. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$10,000 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, subject to rights of any Tenant of the Entire
Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds, subject to rights of any
Tenant of the Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer all the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding, subject
to rights of any Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the Xxxxxxx Money
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. Buyer's 1031 Tax Free Exchange.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to Guarantee Escrow of
Minnesota who will act as Facilitator to perfect the 1031
exchange by preparing an agreement of exchange of Real Property
whereby Guarantee Escrow of Minnesota will be an independent
third party purchasing the ownership interest in subject property
from Seller and selling the ownership interest in subject
property to Buyer under the same terms and conditions as
documented in this Purchase Agreement. Buyer asks the Seller to
cooperate in the perfection of such an exchange at no additional
cost or expense or delay in time. Buyer hereby indemnifies and
holds Seller harmless from any claims and/or actions resulting
from said exchange. Pursuant to the direction of Guarantee
Escrow of Minnesota, Seller will deed the property to Buyer.
18. 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 by January 15, 1997, /s/
HSM /s/ R [changed to conform to the facts] 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 and return all funds there to fore
paid by Buyer.
(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 85-B Limited Partnership
1300 Minnesota World Trade Center
00 X. 0xx Xxxxxx
Xx. Xxxx, XX 00000
Buyer Initial: /s/ HSM
Purchase Agreement for: Automax Central Ave., Columbia Heights, MN
If to Buyer:
Madan Estates /s/ HSM [changed to conform to the facts]
0000 Xxxxxx Xx
Xxxxx XX 00000
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller along with the $5,000 First Payment,
which, if accepted, will be deposited in to escrow by Seller.
Seller has two (2) business days after receipt of the executed
offer and first payment within which to accept this offer; if not
accepted by Seller, Seller shall immediately return the payment
to Buyer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: Madan Estates /s/ HSM [changed to conform to the facts]
By: /s/ Xxxxxx X Xxxxx CFO
Xxxxxx X. Xxxxx
By;
Xxxxxxxx X. Xxxxx
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/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
EXHIBIT "A"
Lots 16, 17, 18, 19 and the South half of Xxx 00, Xxxxx 0,
Xxxxxxxxx'x Xxxxxx Subdivision, according to the plat thereof on
file in the office of the Registrar of Titles of Anoka County,
Minnesota.
FIRST AMENDMENT TO PURCHASE AGREEMENT BY AND BETWEEN AEI REAL
ESTATE FUND 85-B LIMITED PARTNERSHIP ("SELLER") AND MADAN
ESTATES, ("BUYER")
WHEREAS, Seller and Buyer are parties to that certain
Purchase Agreement dated November 20, 1996 for the purchase and
sale of the property located in Columbia Heights, Minnesota,
commonly known as the Automax Store, Columbia Heights, MN.
The name of the buyer referenced in the Purchase Agreement
dated November 21, 1996 is incorrectly referred to as Madan
Estates and the correct name of the buyer is Madan Estates, Inc.,
a Minnesota corporation. This Amendment does therefore correct
said Purchase Agreement to reflect the true and correct name of
the Buyer, Madan Estates, Inc., a Minnesota corporation, and the
undersigned represents and warrants that "Madan Estates"
referenced in the Purchase Agreement is in fact "Madan Estates,
Inc." Furthermore, the undersigned agrees to indemnify and hold
Seller harmless from any and all claims of "Madan Estates" if the
same shall exist and assert any claim against Seller arising out
of the Purchase Agreement.
Buyer:
Madan Estates, Inc., a Minnesota corporation
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx CFO
By: /s/ Xxxxxx X Xxxxx
Xxxxxx X. Xxxxx, Individually 2/3/97
Seller:
AEI Real Estate Fund 85-B Limited Partnership
By: Net Lease Management 85-B, Inc., its corporate general partner
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X Xxxxxxx