PURCHASE AGREEMENT
XxXxxx'x Italian Restaurant & Lounge
Brooklyn Park, Minnesota
This AGREEMENT, entered into effective as of the 13th of April,
2004.
l. PARTIES. Seller is AEI Real Estate Fund 86-A Limited
Partnership, which owns 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 X. Xxxxxx
and Xxxxx X. Xxxxx, and or their assigns. Seller wishes to sell
and Buyer wishes to buy the Property.
2. PROPERTY. The Property to be sold to Buyer in this
transaction consists of an undivided 100% percentage interest the
Property. Seller is also conveying by Quit Claim Xxxx of Sale
Seller's interest in any personalty on the Property, subject to
the contingencies set forth below. See Exhibit B attached
hereto, as to any personalty to be sold in connection with the
Property.
3. PURCHASE PRICE. The purchase price for this percentage
interest in the Property is $770,000, all cash.
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(A). When this agreement is executed, Buyer will pay $25,000 (the
"First Payment") to Seller, (which shall be deposited into escrow
according to the terms hereof). The First Payment will be
credited against the purchase price when and if escrow closes and
the sale is completed. The First Payment shall be non-refundable
except for Seller's failure to perform, or if Buyer shall
terminate this Agreement pursuant to paragraph 6. Due Diligence
below.
(B). Buyer will deposit the balance of the purchase price,
$745,000 (the "Second Payment") into escrow in sufficient time to
allow escrow to close on the closing date.
5. CLOSING DATE. Escrow shall close on or before June 1, 2004.
6. DUE DILIGENCE. Buyer will have 30 days from the Effective
Date of this Agreement (the "Review Period") to conduct all of
its inspections and due diligence and satisfy itself regarding
the Property and this transaction. 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. Within ten days of the
Effective Date of this Agreement (except as explained below, in
Item A), Seller shall provide:
A. One copy of a title insurance commitment for an Owner's
Title insurance policy (see paragraph 9 below), which Seller will
deliver to Buyer as soon as a third party title insurance company
provides to Seller.
B. A copy of a Certificate of Occupancy or other such document
certifying completion and granting permission to permanently
occupy the improvements on the Property as are in Seller's
possession.
C. A copy of an "as built" survey of the Property completed
concurrent with Seller's acquisition of the Property, if
available in Seller's possession.
D. A copy of any Phase I Environmental Report on the Property,
if available in Seller's possession.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
the Review Period. Such notice shall be deemed effective only
upon receipt by Seller. If this Agreement is not cancelled as set
forth above, the First Payments shall be non-refundable unless
Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this Section,
except for any escrow cancellation fees and any liabilities under
the first paragraph of Section 6 of this Agreement (which will
survive), Seller (after execution of such documents reasonably
requested by Seller to evidence the termination hereof) shall
return to Buyer 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 this Agreement is not canceled and the First and Second
Payments are made when required, all of Buyer's conditions and
contingencies will be deemed satisfied. Unless 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 be in
default under this Agreement. Seller then may, at its option,
retain the First Payment and declare this Agreement null and
void, in which event Buyer will be deemed to have canceled this
Agreement and relinquish all rights in and to the Property, or
Seller may exercise its rights under Section 15 hereof.
7. CONTINGENCIES. The former tenant of the Property being
conveyed herein has filed a petition for relief under Chapter 7
of the U.S. Bankruptcy Code. The former tenant occupied the
Property on a month-to-month tenancy. In order to convey title
free and clear of any claims of the Chapter 7 Trustee, it will be
necessary to receive an Order from the U.S. Bankruptcy Court
allowing the Trustee to abandon any interest it may claim in the
personal property or equipment being conveyed herewith. In order
for Seller to convey whatever title Seller may have to this
equipment, it will be necessary to obtain the release of the
Trustee's interest therein.
This offer is subject to the receipt of the US Bankruptcy Court
Chapter 7 Trustee's release of all rights to the equipment
therein, and the removal of all liens against the Property, which
Buyer and Seller both acknowledge. Any and all obligations of
Seller to complete the sale of the Property to Buyer under this
Agreement are contingent upon obtaining such releases. Seller
shall use best efforts to obtain the necessary releases from the
Trustee, but the same shall not obligate Seller to expend its
funds in order to do so.
8. ESCROW. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this Agreement by both parties. The
escrow holder will be a nationally recognized escrow company
selected by Seller. 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.
9. TITLE. Closing will be conditioned on the agreement of a
title company selected by Seller 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: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; all matters of public record; and
other items disclosed to Buyer during the Review Period.
Buyer shall be allowed ten (10) business days after receipt of
said commitment for examination and the making of any objections
to marketability thereto, said objections to be made in writing
or deemed waived. If any objections are so made, Seller shall be
allowed sixty (60) days to cure such objections and make such
title marketable 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,
if previously made, will be returned and this Agreement shall be
null and void and of no further force and effect. Seller has no
obligation to spend any funds or make any effort to satisfy
Buyer's objections, if any.
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
to the Buyer of satisfaction of Buyer's objections, the parties
shall perform this Agreement according to its terms.
10. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment, and any brokerage commissions
payable to broker's representing Seller, post closing. Seller
will pay 3% of the purchase price as real estate commission to
Xxxxxx Properties, Inc. at closing in certified funds. If Buyer
shall decide to purchase title insurance, then Buyer will pay the
cost of obtaining a Standard Owners Title Insurance Policy in the
full amount of the purchase price. Buyer will pay all recording
fees, transfer taxes and clerk's fees imposed upon the recording
of the deed, one-half of the escrow fees, and the cost of an
update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
11. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(A). Unpaid real estate taxes and unpaid levied and pending
special assessments existing on the date of Closing shall be the
responsibility of Buyer, pro-rated, however, to the date of
closing for the period prior to closing, which shall be the
responsibility of Seller. Buyer shall likewise pay all taxes due
and payable in the year after Closing and any unpaid installments
of special assessments payable therewith and thereafter.
(B). All income and all operating expenses from the Property, if
any, 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. 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.
12. SELLER'S REPRESENTATION AND AGREEMENTS.
(A). Seller represents and warrants as of this date that:
1. It is not aware of any pending litigation (other than the
Chapter 7 Bankruptcy proceedings) or condemnation proceedings
against the Property or Seller's interest in the Property.
2. Seller is aware of certain mechanics liens on the Property.
Seller is working with United States Bankruptcy Trustee to cause
these liens to be removed.
3. Seller is not aware of any contracts Seller has executed
that would be binding on Seller after the closing date.
(B). Provided that Buyer performs its obligations as required,
Seller agrees that it will not enter into any new contracts that
would materially affect the Property and be binding on Seller
after the Closing Date without Buyer's prior consent, which will
not be unreasonably withheld.
13. 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 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 ofthe 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.
14. CLOSING.
(A). Before the closing date, Seller will deposit into escrow an
executed special warranty deed warranting title against lawful
claims by, through, or under a conveyance from Seller, but not
further or otherwise, conveying insurable title of the Property
to Buyer, and a Quit Claim Xxxx of Sale as to the personal
property, subject to the exceptions contained in paragraph 9
above.
(B). On or before the closing date, Buyer will deposit into
escrow the balance of the Purchase Price when required under
Section 4 and any additional funds required of Buyer (pursuant to
this agreement or any other agreement executed by Buyer) to close
escrow. Both parties will 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 ready 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.
15. 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 all monies heretofore paid by the
Buyer. In addition, 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, deposited
the balance of the Second Payment for the Purchase Price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, 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 actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
16. BUYER'S REPRESENTATIONS AND WARRANTIES.
(A). Buyer represents and warrants to Seller as follows:
(1). 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 be reasonable in order to
consummate the transactions contemplated herein.
(2). 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.
(3). 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.
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 $10,000.00, 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 7 hereof have been satisfied, or waived; and
(ii) any ten-day 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 (pro-rata in relation
to the Property) 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 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 pro-rata in relation to the Property, subject to rights
of any Tenant of the 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 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 the Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata in
relation to the Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 17A or 17B, 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. CANCELLATION
If any party elects to cancel this Contract because of any breach
by another party or because escrow fails to close by the agreed
date, 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 cancelled 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 cancelled.
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 by June 1, 2004 through no
fault of Seller, Seller may, at its election, extend the closing
date or exercise any remedy available to it by law, including
terminating this Agreement.
(C). Funds to be deposited or paid by Buyer must 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:
AEI Real Estate Fund 86-A Limited Partnership
00 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xx. Xxxx, XX 00000
If to Buyer:
Xxxxxx Properties, Inc.
Attn: Xxx Xxxxxx
0000 Xxxxxxxxx Xxxx X. 000
Xxxxxxxx, 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. Seller has five (5) business days from
receipt within which to accept this offer.
This Agreement shall be governed by, and interpreted in
accordance with, the laws of the state of Minnesota.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: BUYER:
/s/ Xxxxx X Xxxxx /s/ Xxxxxxx X Xxxxxx
By: Xxxxx x Xxxxx By: Xxxxxxx X Xxxxxx
SELLER:
AEI Real Estate Fund 86-A Limited Partnership, a Delaware limited
partnership
By: AEI Fund Management 86-A, Inc., a Minnesota corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, its President
EXHIBIT A
Description of the Property
Property Identification Number: 19-119-21-13-0026
