ASSIGNMENT
OF
PURCHASE AND SALE AGREEMENT
AND
ESCROW INSTRUCTIONS
THIS ASSIGNMENT made and entered into this 24th day of
May 2002, by and between AEI FUND MANAGEMENT, INC., a
Minnesota corporation, ("Assignor") and AEI Income & Growth
Fund XXI Limited Partnership, a Minnesota limited
partnership ("Assignee");
WITNESSETH, that:
WHEREAS, on the 16th day of April, 2002, Assignor
entered into a Purchase and Sale Agreement and Escrow
Instructions ("the Agreement") for that certain property
located at 497 Big Bend Road, Ballwin, MO (the "Property")
with ARAMARK Educational Resources, Inc. d/b/a Children's
World Learning Centers, Inc., as Seller/Lessee; and
WHEREAS, Assignor desires to assign an undivided one
hundred percent (100.0%) of its rights, title and interest
in, to and under the Agreement to Assignee, with respect to
this property only, as hereinafter provided;
NOW, THEREFORE, for One Dollar ($1.00) and other good
and valuable consideration, receipt of which is hereby
acknowledged, it is hereby agreed between the parties as
follows:
1. Assignor assigns all of its rights, title and
interest in, to and under the Agreement to Assignee, to
have and to hold the same unto the Assignee, its
successors and assigns with respect to this p roperty
only;
2. Assignee agrees to reimburse to Assignor any
earnest money deposit paid by Assignor;
3. Assignee hereby assumes all rights, promises,
covenants, conditions and obligations under the
Agreement, with respect to this property only, to be
performed by the Assignor thereunder, and agrees to be
bound for all of the obligations of Assignor under the
Agreement.
All other terms and conditions of the Agreement shall remain
unchanged and continue in full force and effect.
AEI FUND MANAGEMENT, INC.
("Assignor")
By: /s/ Robert P Johnson
Robert P. Johnson, its President
AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP ("Assignee")
BY: AEI FUND MANAGEMENT XXI, INC.
By: /s/ Robert P Johnson
Robert P. Johnson, its President
PURCHASE AND SALE AGREEMENT
AND
ESCROW INSTRUCTIONS
DATE OF AGREEMENT: April 16, 2002
SELLER: ARAMARK Educational Resources, Inc.
d/b/a Children's World Learning
Centers, Inc.
a Delaware corporation
Address: 573 Park Point Drive
Golden, CO 80401
Attn.: John Rosen, Exec. VP
Telephone: (303) 526-3400
Facsimile: (303) 526-3394
PURCHASER: AEI Fund Management, Inc.
CWLC #0882 5220 Chairman's Court,
Fredrick, MD 21701
CWLC #0549 24259 Homestead, Novi,
MI 48374
CWLC #0075 1485 Bunker Lake Blvd.
NW, Andover, MN 55304
CWLC #0412 200 Allen Bradley Dr.,
Mayfield Heights, OH 44124
CWLC #0833 2572 Glenwood Drive,
Twinsburg, OH 44087
CWLC #0092 497 Big Bend, Ballwin,
MO 63011
CWLC #0394 749 Truman Street,
Kimberly, WI 54136
CWLC #0291 10003 West Lincoln
Highway, Frankfort, IL
CWLC #0810 9460 W. 179th St.,
Tinley Park, IL 60477
CWLC #0372 7010 Intech Boulevard,
Indianapolis, IN 46278
ALTERNATIVE PROPERTIES:
CWLC #0138 600 Creek Parkway,
Boothwyn, PA 19061
CWLC #511 2120 Mann Avenue,
Mansfield, TX 76063
Address: 1300 MN World Trade Center
30 East Seventh Street
St. Paul, MN 55101
Attn: Robert P.
Johnson, President
Telephone: (651) 227-7333
Facsimile: (651) 227-7705
ESCROW AGENT: Lawyers Title Insurance Corporation
Address: 3636 North Central Avenue
Suite 350
Phoenix, AZ 85012
Attn.: David Nowlin
Telephone: (602) 287-3500
Facsimile: (602) 263-0433
PROPERTIES: Those real properties, individually
or collectively, listed above and
described on Exhibit "A", together
with all improvements thereon,
except playground equipment,
whether or not attached, and all
the rights, easements, and
appurtenances pertaining thereto,
including, without limitation, any
right, title, and interest of
Seller in and to adjacent streets,
alleys, or right of way.
PRICES: The purchase price of each property
shall be as described on Exhibit
"A" hereto.
ESCROW OPENING DATE: April 18, 2002
(To Be Inserted By Escrow Agent)
RECITALS
A. Seller is the owner of the Properties, each of which
consists of improved real property.
B. Seller desires to sell the Properties to Purchaser, and
Purchaser desires to purchase the Properties from
Seller, upon the terms and conditions set forth herein.
C. It is the intent of the parties that, contemporaneous
with the Closing as defined on Page 4 of this
Agreement, Seller shall lease the Properties from the
Purchaser pursuant to the terms and conditions stated
in the form net lease attached hereto as Exhibit "B".
A separate lease will be signed for each Property
purchased, subject only to those modifications of the
attached form lease, which are necessary for the lease
to be legally binding in the state in which the
property is located.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. PURCHASE AND SALE; PURCHASE PRICE; TERMS OF PAYMENT.
1.1 PURCHASE AND SALE. Seller agrees to sell and
Purchaser agrees to purchase the Properties (including
improvements thereon, except playground equipment, whether
or not attached to the Property, and excluding any personal
property or trade fixtures and trade dress of Seller) on
the terms and conditions set forth in this Agreement and
further agree that Purchaser may purchase all, none, or
some, of the Properties; however, Purchaser shall purchase
Properties whose aggregate base price, as specified in
Exhibit "A" hereto (the "Base Price") shall be at least
fourteen million five hundred thousand ($14,500,000)
dollars, or at Seller's sole election to be exercised in
accordance with Section 8 hereof, this Agreement shall be
terminated and no closing shall occur for any Property.
Purchaser shall have the right to terminate that portion of
this Agreement with respect to any rejected Property, as
provided herein, and in its place substitute an Alternative
Property as identified in Exhibit "A".
1.2 PURCHASE PRICE. The purchase price, which
Purchaser agrees to pay for each Property, after giving
effect to the terms of this Agreement, is described on
Exhibit "A" hereto (the "Purchase Price(s)"):
1.3 TERMS OF PAYMENT. The Purchase Price shall be
payable as follows:
1.3.1 EARNEST MONEY DEPOSIT. Upon execution
of this document by both parties and receipt of a Seller-
signed copy by Purchaser, $20,000 in immediately available
funds shall be deposited by Purchaser with Escrow Agent
(identified in Section 2) as an earnest money deposit for
each Property ("Property Earnest Money Deposit"). The
aggregate of the Property Earnest Money Deposits paid by
Purchaser for all Properties ($220,000.00) shall be
referred to hereinafter as the "Aggregate Earnest Money
Deposit." Upon receipt of the Aggregate Earnest Money
Deposit, Escrow Agent shall insert the date of such receipt
on Page 1 of this Agreement (the "Escrow Opening Date') and
shall immediately deposit it in a federally insured account
and open an escrow account for the transactions
contemplated hereby. Any interest earned on escrowed funds
shall remain the property of, and be paid to, Purchaser.
No additional funds will be escrowed for substituted
Alternative Properties.
1.3.2 CLOSING PAYMENT. An amount equal to
the difference between the Purchase Price for each closed
Property (adjusted for payment of prorations and Closing
Costs (hereinafter defined) and the Property Earnest Money
Deposit for each closed Property shall be paid by Purchaser
for each closed Property in immediately available funds at
the Closing for each closed Property (the "Closing
Payment").
1.3.3 RENTAL RATE. The initial annual rent
for each Property will be equal to nine and forty-five
hundredths (9.45%) percent of the Purchase Price for such
Property, as defined in Exhibit "A". Beginning in the
sixth lease year, and every fifth lease year thereafter,
inclusive of renewal periods, the annual rent will increase
by an amount equal to the lesser of the prior year's
scheduled rent multiplied by 10.0%, or the prior year's
scheduled rent increased by 200% of the cumulative change
in the consumer price index over the previous five (5)
lease years.
1.3.4 LEASE TERM. Each lease term will be
fifteen (15) years with three (3) five-year options to
renew.
2. CLOSING. The closing of this transaction as to each
Property closed ("Closing") shall occur, at the offices of
Lawyers Title Insurance Company ("Title Company"), 3636
North Central Avenue Suite 350, Phoenix, Arizona 85012,
attention David Nowlin ("Escrow Agent"), unless another
location is mutually agreed to by the parties, not later
than June 14, 2002 ("Closing Date"). In the event Seller
is unable to consummate the sale of the Properties by the
Closing Date due to nonperformance by Sumitomo (the
"Bank"), Seller may delay the Closing date for up to thirty
(30) days upon written notice to Purchaser. In the event
the Closing Date is delayed beyond thirty (30) days further
extension of the Closing Date shall be at the election of
Purchaser upon written request of Seller. Either party may
participate in the Closing by mail. The Purchaser may, at
its election, purchase one Property prior to June 14, 2002;
however, not earlier than May 1, 2002. Purchaser shall
notify Seller in writing of its election to exercise this
option no later than April 18, 2002.
3. DEED. At the Closing, Seller shall convey
title to the Properties to Purchaser by that form of Special
Warranty Deed customarily used in the County where the
Properties are located ("Deed"), subject only to those
specific matters approved or deemed approved by Purchaser as
herein provided in connection with the title insurance
policy to be issued by the Title Company.
4. TITLE AND TITLE INSURANCE.
4.1 TITLE REPORT. Within twenty (20) days from the
Escrow Opening Date, the Title Company shall deliver a
current Commitment for Title Insurance or a Preliminary
Title Report ("Title Report") on the Properties from Title
Company to both Purchaser and Seller. Such Title Report
shall show the status of title to the Properties as of the
effective date of the Title Report and shall be accompanied
by legible copies of all title exceptions documents referred
to in the Title Report. The Title Report shall be updated
within five (5) days prior to Closing.
4.2 TITLE REVIEW PERIOD. With respect to each
Property separately, Purchaser shall have a period of time
beginning the latter of (i) the execution of this Agreement
or (ii) upon Purchaser's receipt of the Title Report for
such Property and copies of all documents referred to
therein and ending at 5:00 p.m., Central Standard Time,
fifteen (15) business days thereafter (the "Title Review
Period"), to review the Title Report for such Property and
to give Seller and Escrow Agent notice of any title
exceptions relating to such Property which are unacceptable
to Purchaser. Purchaser shall be deemed to have waived its
right to object to any exception included in the Title
Report if Purchaser fails to notify Seller of such
objections prior to the expiration of the Title Review
Period for such Property. If Purchaser gives notice of
dissatisfaction as to any exception to title as shown in the
Title Report for any Property, or any amendment thereto,
Seller may, but shall not be obligated to, attempt to
eliminate the disapproved exception from the Title Report
for such Property or any amendment thereto prior to the
Closing Date for such Property. If Seller elects to
eliminate the disapproved exception and does not eliminate
it by a date which is at least ten (10) business days prior
to the Closing Date for such Property, Purchaser's sole and
exclusive remedies shall be to either (i) cancel this
Agreement, with respect to such Property only, by giving
Seller and Escrow Agent written notice of cancellation at
least five (5) business days prior to the Closing Date for
such Property, (ii) close such transaction, with respect to
such Property only, subject to such previously disapproved
exception, or (iii) cancel this Agreement in full, as to all
Properties. Notwithstanding the foregoing, if Seller
notifies Purchaser in writing of its election not to
eliminate a disapproved exception to title, Purchaser shall
have until the earlier of the Closing Date or five (5)
business days after receiving Seller's written notice of
such election to either (i) cancel this transaction or
proceed to Closing, with respect to such Property only, or
(ii) cancel this Agreement in full, as to all Properties.
Purchaser's failure to make a timely election shall be
deemed its election to close this transaction with respect
to such Property only, taking title subject to any
previously disapproved title exception. With respect to any
amendments or updates to the Title Report or previous
amendments or updates thereto, the same provisions and
procedures described above shall apply with respect to
Purchaser's review and approval of, and Seller's option to
eliminate, disapproved exceptions first appearing in such
updated Title Report, except that Purchaser shall have five
(5) business days after its receipt of the amendment or
update to the Title Report containing such exception to give
its notice of dissatisfaction of any new title exception.
If Purchaser fails to object to any matter first appearing
in any updated or amended Title Report within such five (5)
business day period, purchaser shall be deemed to have
waived its right to object to such matter.
4.3 APPROVAL OR DISAPPROVAL OF STATUS OF TITLE.
Purchaser's failure to approve or disapprove any exception
during the Title Review Period as to a specific Property
shall be deemed an approval of title to such Property as
described in the Title Report for such Property and a waiver
of Purchaser's right to cancel this Agreement as to such
Property according to this Section. Upon any cancellation
of this Agreement in full in accordance with this Section,
Escrow Agent shall, without further instruction from either
party, return the Aggregate Earnest Money Deposit to
Purchaser and this Agreement and the escrow shall terminate
as to all Properties. Upon any cancellation of this
Agreement in part in accordance with this Section, Escrow
Agent shall return to Purchaser, along with a pro-rata share
of any interest earned thereon, the Property Earnest Money
Deposit for the Property canceled; provided, however, that
if Seller elects to cancel this Agreement pursuant to
Section 8 hereof, Escrow Agent shall return the Aggregate
Earnest Money Deposit to Purchaser.
4.4 OWNER'S TITLE POLICY. Provided Purchaser
approves, or is deemed to have approved, the status of title
to a Property during the Title Review Period for such
Property, Seller shall cause Title Company to provide
Purchaser with a standard coverage owner's policy of title
insurance (the "Owner's Title Policy") for such Property at
the Closing or as soon thereafter as is reasonably possible.
The Owner's Title Policy shall be issued by the Title
Insurer in the full amount of the Purchase Price, be
effective as of the Closing Date, and shall insure Purchaser
that fee simple title to the Property described therein is
vested in Purchaser, subject only (i) to the exceptions to
title approved or deemed approved by Purchaser as provided
for in Sections 4.2 and 4.3 of this Agreement (ii) any
exceptions regarding survey matters; and (iii) any other
matter approved in writing by Purchaser or resulting from
the acts of Purchaser or Purchaser's agents. Purchaser
shall pay in the cost of any endorsement to the Owner's
Title Policy.
5. FEASIBILITY CONDITION.
5.1 PROPERTIES REVIEW PERIOD. Purchaser shall have
the right to enter upon the Properties, (only if accompanied
by Seller's representative or agent) for the purpose of
conducting site inspections and for further examination and
investigation of the Properties for up to thirty (30)
business days after the execution date of this Agreement
(the "Properties Review Period"). If any Property is
rejected on the basis of such site inspection or any other
investigation made by Purchaser, the termination of the
Purchase Agreement as it relates to such Property must be
made in writing to Seller prior to the expiration of the
Properties Review Period. Purchaser's right of rejection
for purposes of site inspection only are hereby waived for
Ballwin, MO and Kimberly, WI. Purchaser, its
representatives and agents shall have the right during the
Properties Review Period, to conduct all non-destructive
testing and examinations it deems necessary to determine the
desirability of purchasing the Properties. Purchaser shall
have the right during the Properties Review Period to cancel
this Agreement in whole or in part if Purchaser is
dissatisfied, in its sole and absolute discretion, with the
results of its examination of the Properties or any
documentation related thereto, or for any other reason. If
this Agreement is canceled in accordance with this Section
with respect to one or more of the Properties, but not all
of them, then, upon written notice by Purchaser to the
Escrow Agent, the Property Earnest Money Deposit for the
canceled Property or Properties, along with any interest
earned or accrued thereon, shall be immediately paid by the
Escrow Agent to the Purchaser and this Agreement and the
Escrow Account shall remain in effect for the balance of any
remaining, non-canceled, Properties, subject to Seller's
right to elect to cancel this Agreement as to all
Properties, as provided in Section 8, below. In the event
Purchaser shall elect to substitute one of the Alternative
Properties for purchase, the Properties Review Period shall
be extended as necessary for Purchaser's inspection and
examination of that Alternative Property only, subject to
the Closing Date specified herein.
5.2 WHEN EARNEST MONEY BECOMES NON-REFUNDABLE. On or
before expiration of the Properties Review Period, or as
applicable prior to the expiration of the Properties Review
Period as extended for review of any Alternative Property,
Purchaser shall give written notice to Seller and Escrow
Agent of its election to either cancel this Agreement, in
whole or in part, or to proceed to close the transaction
upon the terms and conditions herein. If Purchaser elects
to cancel this Agreement in part in accordance with this
Section, Escrow Agent shall, without further instruction
from either party, return the Property Earnest Money Deposit
to Purchaser for the Property or Properties for which this
Agreement shall be cancelled and the escrow for such
Property or Properties shall terminate, subject, however, to
the right of Seller to terminate this Agreement as to all
Properties pursuant to Section 8 hereof. If Purchaser
elects to cancel this Agreement in full in accordance with
this Section, the Escrow Agent shall, without further
instruction from either party, return the Aggregate Earnest
Money Deposit and all interest earned thereon to Purchaser.
If Purchaser elects or is deemed to have elected to proceed
to close this transaction, the Aggregate Earnest Money
Deposit shall become nonrefundable to Purchaser, except if
Seller fails to perform when due any act required of it by
this Agreement. Purchaser's failure to give written notice
of its election to either cancel or proceed to close this
transaction shall be deemed a waiver of its election to
cancel this Agreement under this Section.
5.3 INDEMNIFICATION. All entries on, and
inspections or studies of, the Properties shall be at the
expense of Purchaser and Purchaser shall indemnify and hold
Seller harmless from and against any and all liens, claims,
demands, injuries, damages, losses, costs, expenses
(including all reasonable attorney fees), or liability
incurred by or asserted against the Seller or any of the
Properties as a result of any of those entries, inspections
or studies, which Purchaser's indemnification shall survive
the Closing or any termination of this Agreement.
5.4. SITE INSPECTION FEES. Seller shall be obligated
to pay a site inspection fee to Purchaser in the amount of
two thousand five hundred dollars ($2,500) for the two Ohio
sites, two thousand five hundred dollars ($2,500) for the
Maryland site, two thousand five hundred ($2,500) for the
two Illinois sites, two thousand five hundred ($2,500) for
the Michigan site, and two thousand five hundred ($2,500)
for the Indianapolis site for a grand total of twelve
thousand five hundred dollars ($12,500). No inspection fee
will be due or paid for Andover, MN, Ballwin, MO and
Kimberly, WI. In the event Purchaser shall substitute an
Alternative Parcel, no inspection fee shall be due to
Purchaser, unless such substitution was due to an uncured
defect of title for a Property. Notwithstanding the
foregoing, at the request of Seller, the Purchase Price of
all the Properties closed may be increased by the
proportionate share of the total amount of the site
inspection fees paid, and the annual base rent for each
Property closed may be increased appropriately. No refund
will be given to Seller for the inspection fee paid for any
Property not purchased by Purchaser. If Purchaser has
inspected one or more of the Properties, the inspection fee
is due from Seller regardless if Purchaser purchases all or
none of the Properties. Any inspection fees due from Seller
shall be paid to Purchaser within ten (10) days after any
cancellation of this Agreement as to all Properties.
5.5 NONINTERFERENCE WITH BUSINESS. The Properties are
presently being used as daycare centers. Notwithstanding
anything to the contrary, Purchaser may not conduct any of
its tests or examinations during normal business hours
except with the prior written permission of Seller, which
may be arbitrarily withheld by Seller. No chemicals or
hazardous substances shall be used in any testing or
examination except with the prior written permission of
Seller. No tools or materials shall be left or stored in or
around the Properties during the Properties Review Period.
Purchaser agrees to indemnify Seller and hold Seller
harmless from the cost, liability, expense or injury to
person or property arising out of any violation of this
Section 5.5 including but not limited to attorney fees.
5.6 RESTORATION OF PROPERTY. Purchaser shall, at its
sole expenses, restore all of the Properties investigated to
the condition in which they existed prior to any testing or
examination which Purchaesr conducts on the Property.
Purchaser agrees to indemnify Seller and hold Seller
harmless from any cost, liability, damage, expense, or
injury to person or property or liability incurred or
asserted against Seller arising out of Purchaser's acts,
omissions, or exercise of the rights granted by this
Article, including but not limited to any attorneys' fees
incurred by Seller in connection with any such claims or
liabilities. This Section shall survive any terminationof
this Agreement.
6. SELLER'S DOCUMENTS
6.1 SELLER'S DOCUMENTS. Seller shall deliver to
Purchaser all of the documents described in this Section by
April 30, 2002, at Seller's expense, each to be of current
or recent date and certified to Purchaser unless otherwise
noted below (the `Seller's Documents'). Purchaser shall
have until the earlier of 1) forty-five (45) days after the
delivery of all of the Seller's Documents, or May 15, 2002
(the "Document Review Period") to review and approve
Seller's Documents. If Purchaser shall elect to substitute
an Alternative Property the cost of obtaining Seller's
Documents as to the Alternative Property shall be shared
equally, unless such Alternative Property was substituted
for another of the Properties due to an uncured title defect
for such Property, and Purchaser shall obtain at Purchaser's
expense any other documents ("Purchaser's Documents")
required and deemed necessary by Purchaser to evaluate the
Property or Alternative Property as listed in Section 7.
Seller's Documents are provided as a convenience to
Purchaser so that Purchaser may conduct all of its
inspections, due diligence and review of the Properties to
satisfy itself regarding each item, the Property and this
transaction. Seller makes no representation or warranty to
Purchaser regarding the accuracy or completeness of Seller's
Documents. Seller's Documents shall include:
(a) The Title Commitment and back-up documentation;
(b) As-Built ALTA boundary survey of the Property as
described on Exhibit "C" attached hereto;
(c) Phase I environmental assessment report and
reliance letter prepared by a company satisfactory to
Buyer, current within the last 6 months and copies of
any existing environmental assessments in Seller's
possession;
(d) Existing Final plans and specifications for the
Improvements;
(e) Financial statements of the Lessee as described on
Exhibit "D" attached hereto;
(f) Existing soils reports in Seller's possession;
(g) Existing Certificate of Occupancy;
(h) Utility site contacts for telephone, sewer, water,
electric and gas companies (inclusive of company
name, name of contact person, address, phone and
fax numbers, as available to Seller;
(i) Certificate of completion executed by the
contractor and/or architect in Seller's
possession; and
(j) Existing lease for the Frederick, MD Property
known as the Frederick County Headstart Program.
6.2 SELLER'S CLOSING DOCUMENTS Seller shall provide
the following documents, at its expense, ten (10) days prior
to the Closing Date. Purchaser shall have up until the
Closing date to review and approve such documents:
(a) Copies of the certificates of Insurance in accordance
with the Lease attached as Exhibit "B";
(b) Proposed warranty deed;
(c) Copies of any documents required by the Title Company;
(d) Opinion of Counsel re: due authority of Lessee;
(e) Seller's Affidavit;
(f) FIRPTA Affidavit; and
(h) Copies of the Articles of Incorporation, the
By-Laws and a current Certificate of Good
Standing for the Lessee.
6.3 Notwithstanding the other items in Section 6.1 (a)
through (h), above, if Seller becomes aware of any
information concerning the Property that is not disclosed in
Seller's Documents, and if conditions listed below are met,
then Seller shall also be under a duty to disclose certain
facts and conditions relating to the Properties if:
(i) Such facts and conditions are not known to Purchaser;
(ii) Such facts and conditions are material and may
adversely affect Purchaser's investment in either
Property
(iii) It is commercially reasonable to expect Seller to
disclose such facts and conditions,
(iv) Such facts and conditions arise after the
execution of this Agreement; and Seller, to its
knowledge, has received written or oral notice
of such facts and conditions. As used herein,
"Knowledge" shall be defined as and limited to the
actual knowledge of John Rosen, or those persons
immediately under his supervision limited to Chris
Bardwell or other staff charged with such
information.
6.4 After receipt and review of Seller's Documents,
and Purchaser's Documents as identified in Section 7 below,
as such documents relate to one or all of the Properties,
Purchaser may cancel this Agreement as to one or more or all
of the Properties for any reason, in its sole discretion, by
delivering a written cancellation notice to Seller and
Escrow Agent prior to the end of the Document Review Period,
but in no event subsequent to the Document Review Period.
After the receipt and review of the Seller's Closing
Documents as identified in Section 6.2 above, as such
documents may relate to one or all of the Properties,
Purchaser may cancel this Agreement as to one or more of the
Properties for any reason, in its sole discretion, by
delivering a written cancellation notice to Seller and
Escrow Agent prior to the Closing Date. If Purchaser
cancels this Agreement in part in accordance with this
Section, Escrow Agent shall return the Property Earnest
Money applicable to any Property canceled, together with the
interest earned thereon, to Purchaser and the escrow shall
be canceled as to that Property; subject, however, to the
Seller's right to elect to cancel the entire Agreement as to
all Properties, as provided in Section 8. If Purchaser
elects to cancel this Agreement as to all Properties in
accordance with this Section, the Aggregate Earnest Money
Deposit shall be returned in full to Purchaser immediately
and neither party shall have any further duties or
obligations to the other hereunder.
7. PURCHASER'S DOCUMENTS
(a) MAI Appraisal;
(b) Verification of zoning classification; and
(c) Verification of utility services.
8. SELLER'S OPTION TO TERMINATE.
8.1 SELLER'S OPTION TO TERMINATE. Seller shall have
the option to terminate this Agreement as to all Properties
("Seller's Termination Option") if Purchaser exercises any
right of termination hereunder as to any Property, and such
termination has the effect of reducing the aggregate Base
Price of the Properties to be closed by Purchaser hereunder
to less than fourteen million five hundred thousand
($14,500,000) dollars, as determined by reference to the
Base Price of each of the Properties set forth in Exhibit
"A" hereto.
8.2 EXERCISE OF SELLER'S OPTION TO TERMINATE.
Seller shall notify Purchaser and Escrow Agent in writing of
its exercise of Seller's Termination Option ("Seller's
Termination Notice") within five (5) business days following
Seller's receipt of any written notification from Purchaser
that Purchaser's has elected to terminate this Agreement as
to one or more but not all of the Properties ("Purchaser's
Partial Termination Notice"). If Seller fails to deliver
Seller's Termination Notice within the time period specified
above as to any Purchaser's Partial Termination Notice,
Seller shall be deemed to have waived its right to terminate
this Agreement on the basis of such Purchaser's Partial
Termination Notice; provided, however, that if Seller fails
to exercise Seller's Termination Option as to one
Purchaser's Partial Termination Notice given by Purchaser,
Seller shall not be precluded from exercising Seller's
Termination Option as to any subsequent Purchaser's Partial
Termination Notice delivered by Purchaser.
8.3 EFFECT OF SELLER'S EXERCISE. If this Agreement is
terminated by Seller pursuant to Seller's Option to
Terminate, Escrow Agent shall, without further instructions
from the parties, return the balance of the Aggregate
Earnest Money Deposit for the Properties (after deducting,,
if applicable, any Property Earnest Money Deposit relating
to any Property Purchaser has closed early under the terms
of Section 2 hereof), together with any interest accrued
thereon, to Purchaser. In such case, Seller shall have no
liability to Purchaser for the Allowance (hereinafter
defined) due at Closing, and Seller shall reimburse
Purchaser for site inspection fees due and payable to
Purchaser under Section 5.4 of this Agreement, provided that
Seller shall owe a site inspection fee only on those
Properties for which a site inspection has actually been
completed by Purchaser as of the date Purchaser receives
Seller's Termination Notice.
9. ESCROW.
9.1 ESTABLISHMENT OF ESCROW. An escrow for this
transaction shall be established with Escrow Agent and
Escrow Agent is hereby employed by the parties to handle the
escrow. This Agreement shall constitute escrow instructions
and an original or fully executed copy shall be deposited
with Escrow Agent for this purpose. Should Escrow Agent
require the execution of its standard form printed escrow
instructions, Purchaser and Seller agree to execute the
same; however, such instructions shall be construed as
applying only to Escrow Agent's employment, and if there are
conflicts between the terms of this Agreement and the terms
of the printed escrow instructions, the terms of this
Agreement shall control.
9.2 CANCELLATION OF ESCROW. If the escrow fails to
close because of Seller's default, Seller shall be liable
for all customary escrow cancellation charges. If the
escrow fails to close because of Purchaser's default,
Purchaser shall be liable for all customary escrow
cancellation charges. If the escrow fails to close for any
other reason, Seller and Purchaser shall each be liable for
one-half (1/2) of all customary escrow cancellation charges.
9.3 LEASE. The parties hereby agree upon the form
of the Lease and memorandum of lease as attached as Exhibit
"B" hereto. At closing, duplicate copies of such form lease
will be signed for each Property purchased, subject only to
changes necessary for each lease to be legally binding in
the state in which the Property is located. Upon Closing,
the Escrow Agent shall insert into the Lease, and the
parties hereby give the Escrow Agent Power of Attorney to
insert, the Lease Commencement Date that shall be the
Closing Date. If closing does not occur for any reason
whatsoever, the Escrow Agent shall destroy the Leases. The
Escrow Agent is further instructed upon the Closing Date to
record that certain Memorandum of Lease referred to in
Exhibit "C". Such Memorandum shall be recorded in the
office of the clerk and recorder, register of deeds or
analogous office immediately subsequent to the recording of
the Deed, with no intervening documents being recorded.
10. CLOSING COSTS.
10.1 SELLER'S CLOSING COSTS. Seller will pay for and
provide Purchaser with a standard Owner's Title Policy for
each property. The Purchaser shall pay the cost of any
endorsement to the Owner's Title Policy. All other closing
costs for each Property shall be borne equally by Seller and
Purchaser. Seller will pay Purchaser a due diligence
expense allowance (the "Allowance") of $23,500 per Parcel,
payable at the closing of the purchase of each Parcel as
provided herein. As a result, upon the purchase of each
Property by Purchaser, the Purchase Price of such Property
will be increased by $23,500 as reflected on the Closing
Settlement Statement, and the base annual rent for each
Property will be increased by $2,220.75. No Allowance shall
be payable to Purchaser for any Property not purchased by
Purchaser. Each party shall pay its own attorney fees and
costs.
10.2 PRORATIONS. Real estate taxes, personal
property taxes and assessments, if any, shall be prorated
through escrow, as of the Closing Date, and be based upon
the latest available information. Purchaser and Seller shall
pay any other closing costs equally.
11. POSSESSION. Possession of the Properties sold shall
be delivered to Purchaser upon Closing, subject to a lease
executed between the parties.
12. BROKERAGE. Purchaser and Seller warrant and
represent to each other that neither has dealt with any real
estate broker or salesperson in connection with this
transaction. If any person shall assert a claim to a
finder's fee, brokerage commission, or any other
compensation on account of alleged employment as a finder or
broker or performance of services as a finder or broker in
connection with this transaction, the party under whom the
finder or broker is claiming shall indemnify and hold the
other party harmless from and against any such claim and all
costs, expenses and liabilities incurred in connection with
such claim or any action or proceeding brought on such
claim, including, but not limited to, counsel and witness
fees and court costs in defending against such claim. This
indemnity shall survive the Closing or cancellation and
termination of this Agreement and the escrow.
13. REMEDIES.
13.1 SELLER'S REMEDIES. Only if Seller is not in
default hereunder and Purchaser fails to perform as required
by this Agreement, in the time and manner set forth in this
Agreement, Seller, as Seller's sole and exclusive remedy,
may cancel this Agreement and the escrow, such cancellation
to be effective immediately upon Seller giving written
notice of cancellation to Purchaser and Escrow Agent;
provided, however, that Purchaser's indemnity provided for
in Section 5 of this Agreement shall survive any termination
of this Agreement. Upon such cancellation, Seller shall be
entitled to, and Escrow Agent shall deliver to Seller, the
Aggregate Earnest Money Deposit, as consideration for
acceptance of this Agreement, for taking the Properties off
the market, and as the parties' best estimate of Seller's
damages resulting from Purchaser's default, but not as a
penalty. Subject to Section 19.5 Attorney's Fees, the
Aggregate Earnest Money Deposit released to Seller upon such
cancellation shall be retained by Seller as its sole and
exclusive remedy against Purchaser in all respects. Any
accrued interest shall be paid to Purchaser.
13.2 PURCHASER'S REMEDIES. Only if Purchaser is not
in default hereunder and Seller fails to perform any
transaction(s) as required by this Agreement, in the time
and manner set forth in this Agreement, Purchaser, as its
sole and exclusive remedy, may cancel this Agreement and the
Escrow, such cancellation to be effective immediately upon
Purchaser giving written notice of cancellation to Seller
and Escrow Agent. Upon such cancellation, Purchaser shall
be entitled to, and Escrow Agent shall deliver to Purchaser,
the Property Earnest Money Deposit and any interest earned
thereon, and Seller shall pay to Purchaser $20,000 per
Property as to any Property not closed due to Seller's
failure to Close as required by this Agreement as
consideration for entering into this Agreement and as the
parties' best estimate of Purchaser's damages resulting from
Seller's default, but not as a penalty. Subject to Section
19.5 Attorney's Fees, the Property Earnest Money Deposit and
any interest earned thereon released to Purchaser and the
$20,000 to be paid by Seller shall be retained by Purchaser
as its sole and exclusive remedy against Seller in all
respects as to each Property Seller fails to close.
13.3 LIQUIDATED DAMAGES: After endeavoring to estimate
what the actual loss would be in the event of a default and
as a material inducement to execution hereof, the parties
agree that it would be impractical and extremely difficult
to fix actual damages in case of a default. The amount of
the Aggregate Earnest Money Deposit is a reasonable estimate
of Seller's damages and Seller shall retain the Aggregate
Earnest Money Deposit as stated above, and Purchaser shall
be entitled to payment from Seller of $20,000 per Property
as set forth in Section 13.2 above, as their sole remedy
against each other in case of default; provided however,
that Purchaser's indemnity obligation as set forth in
Section 5 hereof shall survive any termination of this
Agreement. The parties shall also be entitled to attorney
fees pursuant to Section 19.5, Attorney's Fees.
14. ESCROW OPENING DATE. The "Escrow Opening Date"
shall be the date on which the Aggregate Earnest Money
Deposit, together with a fully executed copy or counterpart
copies of the Purchase Agreement are receipted for by the
Escrow Agent in accordance with the terms of this Agreement.
Escrow Agent is hereby instructed to enter the Escrow
Opening Date on the first page of this Agreement and return
a copy to both Seller and Purchaser.
15. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller
represents and warrants to Purchaser (and on the Closing
Date shall be deemed to represent and warrants) as follows:
15.1 LEGAL, VALID AND BINDING. This Agreement and
all other instruments or documents executed or delivered
with this transaction each constitute legal, valid and
binding obligations of Seller, enforceable against Seller in
accordance with their respective terms.
15.2 NO APPROVAL BY GOVERNMENTAL AUTHORITY. No
consent, approval, authorization, registration,
qualification, designation, declaration or filing with any
governmental authority is required in connection with the
execution and delivery of this Agreement by Seller.
15.3 NO CONFLICT. The execution, delivery and
performance of this Agreement by Seller and the consummation
of the transaction contemplated herein will not: (i) result
in a breach or acceleration of or constitute a default or
event of termination under the provisions of any agreement
or instrument by which the Properties is bound or affected;
(ii) result in the creation or imposition of any lien,
charges or encumbrance, not provided for herein, on or
against the Properties or any portion thereof; (iii)
constitute or result in the violation or breach by Seller of
any judgment, order, writ, injunction or decree relating to
the Properties issued against or imposed upon Seller, or
result in the violation of any applicable law, rule or
regulation of any governmental authority applicable to the
Properties.
15.4 NO LAWSUITS. Seller, having undertaken no
independent inquiry, there are no actions, suits,
proceedings or investigations pending, or, to the best of
Seller's Knowledge, threatened, with respect to or in any
manner affecting Seller's ownership of the Properties or
otherwise affecting any portion thereof, or which will
become a cloud on the title to the Properties or question
the validity or enforceability of the transaction
contemplated herein.
15.5 NO LEASES. There will be no existing leases
and/or tenancies affecting all or any portion of the
Properties as of the Closing Date, except for that certain
lease of the Frederick, MD Property known as the Frederick
County Headstart Program Lease and the lease between the
parties attached as Exhibit "B".
15.6 NO MECHANICS LIENS. No work has been performed or
is in progress at, and no materials have been furnished to,
the Properties or any portion thereof, which might give rise
to mechanics', materialmen's or other lien against
Purchaser's interest in the Properties or any portion
thereof. Seller hereby agrees to indemnify Purchaser from
and against any and all claims of third parties, and from
all mechanics' liens in connection with the Properties whose
claim of lien arises from labor or material provided to the
Properties prior to Closing or pursuant to a contract
entered into with Seller prior to Closing, including all
costs and attorneys' fees.
15.7 NON-FOREIGN AFFIDAVIT. Seller is not, and as of
the Closing Date will not be, a "foreign person" within the
meaning of Internal Revenue Code Section 1445, and Seller
shall deliver to Purchaser at Closing a Non-Foreign
Affidavit pursuant to Section 1445(b)(2) of the Internal
Revenue Code (the "Non-Foreign Affidavit").
15.8 ENVIRONMENTAL I REPORTS. Seller has delivered (or
will deliver in accordance with the terms of this Agreement)
all existing or updated environmental reports (Phase I or
otherwise) in Seller's possession which relate to the
Properties.
6. AS IS. Except for the express representations
and warranties contained in this Article 12, Seller has made
no representations or warranties of any kind, and will at
the Closing make no representations or warranties of any
kind, in connection with the physical condition of the
Properties. Except for the representations and warranties
contained in Section 15 and the covenants and warranties to
be contained in the Deed, Seller shall have no
responsibility, liability or obligations subsequent to the
Closing with respect to any conditions or as to any matters
whatsoever respecting in any way the Properties, which
Purchaser acknowledges is being purchased in an "AS IS,
WHERE IS" condition.
17. RISK OF LOSS. If prior to the Closing all of any
Property shall be taken by condemnation or eminent domain,
this Agreement shall be automatically canceled, the Property
Earnest Money Deposit and any interest earned thereon shall
be returned to Purchaser, and thereupon neither party shall,
except as otherwise provided herein, have any further
liability or obligation to the other. If prior to the
Closing, less than all of any Property shall be taken by
condemnation or eminent domain, then Purchaser may, at its
option, cancel this Agreement as to such Property only, in
which event Escrow Agent shall return to Purchaser its
Property Earnest Money Deposit, and any interest earned
thereon, as to such Property [i.e., twenty thousand dollars
($20.000) plus interest] and thereupon neither party shall
have any further liability or obligation to each other
(except as otherwise stated herein) as to such Property, or
Purchaser may accept title subject to the taking, in which
event after the Closing for such Property the proceeds of
the award or payment shall be assigned by Seller to
Purchaser and any money theretofore received by Seller in
connection with such taking shall be paid over to Purchaser.
In the event any Property shall be damaged by fire or other
casualty prior to the time of Closing in an amount of more
than ten percent (10%) of the total Purchase Price of said
Property, either party shall have the option to terminate
this Agreement as to such Property. Should the parties elect
to carry out this Agreement regarding such Property despite
such damage, Purchaser shall be entitled to a credit for the
insurance proceeds resulting from such damage to the
Property not exceeding, however, the total Purchase Price of
said Property. In all other regards, the risk of loss or
damage to the Property until the Closing shall be borne by
Seller.
18. NOTICES. All notices required or permitted to be given
under this Agreement shall be in writing and shall be given
by personal delivery, recognized overnight courier services
or by deposit in the United States mail, certified mail,
return receipt requested, postage prepaid, addressed to
Seller and Purchaser at the addresses set forth on the first
page of this Agreement or at such other address as a party
may designate by notice similarly given. Notices shall be
deemed effective upon delivery; if personally delivered: on
the next business day after deposit with a recognized
overnight courier service; or on the expiration of three (3)
days after deposit in the US mail, as described above. A
copy of any notice shall be given to Escrow Agent.
Copies shall be given to:
Leslie Armstrong, Esq.
ARAMARK Educational Resources, Inc.
573 Opark Point Drive
Golden, CO 80401
Ph No.: 303 526-3381
19. MISCELLANEOUS.
19.1 INCORPORATION OF RECITALS. The recitals of this
Agreement are hereby affirmed by the parties as true and
correct and are incorporated herein by this reference.
19.2 WAIVERS. No waiver of any of the provisions of
this Agreement shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver be a
continuing waiver. Except as expressly provided in this
Agreement, no waiver shall be binding unless executed in
writing by the party making the waiver. Either party may
waive any provision of this Agreement intended for its sole
benefit; however, unless otherwise provided for herein, such
waiver shall in no way excuse the other party from the
performance of any of its other obligations under this
Agreement.
19.3 CONSTRUCTION. This Agreement shall be interpreted
according to the law of the state where the Properties are
located, and shall be construed as a whole and in accordance
with its fair meaning and without regard to, or taking into
account, any presumption or other rule of law requiring
construction against the party preparing this Agreement or
any part hereof.
19.4 TIME. Time is of the essence of this
Agreement.
19.5 ATTORNEY'S FEES. If any action is brought by
either party in respect to its rights under this Agreement,
the prevailing party shall be entitled to reasonable
attorneys' fees and court costs as determined by the court.
19.6 ASSIGNMENT. Purchaser may assign its rights
under this Agreement prior to Closing without the prior
written consent of Seller. However, Purchaser shall remain
liable to Seller pursuant to the terms of Article 5.6
Restoration of Property, regardless of such assignment.
19.7 BINDING EFFECT. This Agreement and all
instruments or documents entered into pursuant hereto are
binding upon and shall inure to the benefit of the parties
and their respective successors and assigns.
19.8 FURTHER ASSURANCES AND DOCUMENTATION. Each party
agrees in good faith to take such further actions and
execute such further documents as may be necessary or
appropriate to fully carry out the intent and purpose of
this Agreement.
19.9 TIME PERIODS. If the time for the performance of
any obligation under this agreement expires on a Saturday,
Sunday or legal holiday, the time for performance shall be
extended to the next succeeding day which is not a Saturday,
Sunday or legal holiday.
19.10 HEADINGS. The headings of this Agreement are
for purposes of reference only and shall not limit or define
the meaning of any provision of this Agreement.
19.11 ENTIRE AGREEMENT. This Agreement, together
with all exhibits referred to herein, which are incorporated
herein are made a part hereof by this reference and the
Lease between the parties, constitutes the entire agreement
between the parties pertaining to the subject matter
contained in this Agreement. No supplement, modification or
amendment of this Agreement shall be binding unless in
writing and executed by Purchaser and Seller.
19.12 COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed
an original, but all of which shall constitute one and the
same instrument.
19.13 SURVIVAL. Each of the terms and provisions of
this Agreement, including the representations and warranties
contained in Section 15, which are not incorporated into the
Deed, or which are not satisfied by the execution and
delivery of the Deed, or which by their nature require the
parties to perform certain acts subsequent to the Closing,
shall survive the Closing, except that the representations
and warranties contained in Section 15 shall survive the
Closing for a period of only six (6) months only.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
SELLER:
Date: 4/12/02
ARAMARK Educational Resources, Inc., d/b/a Children's World
Learning Centers, Inc., a Delaware Corporation
By: /s/ Leslie A Armstrong
Printed Name: Leslie A Armstrong
Its: National Director of Real Estate
PURCHASER:
Date: April 11, 2002
AEI Fund Management, Inc.
/s/ Robert P Johnson
Robert P. Johnson, President
ACCEPTANCE BY ESCROW AGENT
Escrow Agent hereby (a) acknowledges receipt of a fully
executed copy or counterpart copies of this Agreement on
this 18th day of April, 2002 and has inserted said date on
the first page of this Agreement, and (b) hereby agrees to
establish an escrow (Escrow No.No1-40385*) and to administer
the same in accordance with the provisions hereof. Escrow
Agent further agrees to immediately deliver to Purchaser and
Seller copies or counterpart of this fully executed
Agreement. Escrow agent acknowledges receipt of earnest
money deposit in the amount of $200,000.
Lawyers Title Insurance Corporation
*Master File No.
By: /s/ David D Nowlin
Its: National Title Officer