PURCHASE AGREEMENT
THIS AGREEMENT, entered into effective as of this 20th day
of September, 1999.
1. Parties. The buyer is Boulevard East, LLC or related
assigns, (such assignment to be effective only if buyer shall
remain liable for the full performance of Buyer hereunder),
("Buyer"), and the seller is AEI Income & Growth Fund XXI Limited
Partnership, a Minnesota limited partnership, and AEI
Institutional Net Lease Fund `93 Limited Partnership (together,
"Seller").
2. Property. The Property consists of the real property
legally described on Exhibit A attached hereto, all buildings and
improvements, and fixtures on the land, (including, but not
limited to, that certain approximately square foot building and
related improvements) appurtenances, mineral and similar rights
(to the extent owned by Seller), and personal property, if any,
presently owned by Seller and used by Seller in connection with
the land or the improvements, all of Seller's interest in all
leases, prepaid rents, security deposits and other contract
rights, guaranties and warranties or other rights related to the
use and operation of the Property and all assignable governmental
licenses and permits.
3. Purchase Price. The purchase price for the Property is
$1,697,089, 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 $5,000 to Seller
(the "First Payment"). The First Payment
will be forwarded to the Escrowee per
paragraph 7 hereof, and credited against the
purchase price when and if escrow closes and
the sale is completed.
(b) At the expiration of the Due
Diligence Period, buyer will deposit with
Escrowee an addition $20,000 (the ASecond
Payment@)
(c) Buyer will deposit the balance
of the purchase price, $1,672,089, (the
"Final Payment") into escrow in sufficient
time to allow escrow to close on the closing
date.
5. Closing Date. Escrow is scheduled to close (i.e., the
deed will be recorded and the purchase price transferred to
Seller) on November 15, 1999, or such earlier time as the parties
may mutually agree.
6. Due Diligence. Buyer will have until the latter of (i)
forty-five (45) days after the full execution of this Agreement
by both parties hereto, or (ii) forty-five (45) days after
delivery of each of the following items (the ADue Diligence
Period@) to conduct all of its inspections and due diligence and
satisfy itself regarding each item, the Property and this
transaction.
a. The original and one copy of a title insurance
commitment for an ALTA owner's title insurance policy
(see paragraph 8 below)
b. Copies of such "as built" plans and specifications
for the Property as Seller can locate after diligent
search.
c. Copies of an "as built" survey of the Property
done concurrent with Seller's acquisition of the
Property.
d. Current lease, and rent payment history showing
occupancy date, lease expiration date, rent, and
security deposit, if any, accompanied by such tenant
financial statements as may have been provided to
Seller by the Tenant.
Copies of any and all existing soil tests and
environmental tests previously done by or for Seller
relating to the Property.
During the Due Diligence Period, Buyer and Seller as a condition
to both parties' obligations hereunder, shall attempt to agree
upon a mutually acceptable form of assignment and assumption of
lease and personalty of Seller on the Property, if any, with
respective pre and post closing indemnification clauses, and an
Estoppel Certificate executed by existing tenant on such form
reasonably approved by Buyer, or if tenant is unwilling,
certified by Seller (to be submitted within thirty (30) days of
Closing).
Seller shall provide Buyer access to the Property from time to
time for the purpose of conducting inspections thereof including
mechanical, structural, electrical and other physical
inspections. Buyer has until the end of the Due Diligence Period
to complete such physical inspection.
Buyer shall indemnify Seller from and against any and all losses,
claims, causes of action, liabilities, and costs to the extent
caused by the actions of Buyer, its agents, employees,
contractors, or invitees, during any such entry upon the
Property. The foregoing duty of indemnification shall include
the duty to pay all reasonable attorney's fees incurred by the
Seller in responding to or defending any such claims or
proceedings.
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 overnight delivery service to
Seller and escrow holder before the expiration of the Due
Diligence 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 the 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.
Buyer irrevocably will be deemed to have canceled this Agreement
and relinquish all rights in and to the Property unless Buyer
makes the Second Payment when required. Upon payment of the
Second Payment, Buyer shall have been deemed to have waived its
right to terminate this Agreement based upon the items received
by Buyer and its inspection of the property during the Due
Diligence Period. Buyer shall have ten (10) business days, from
written notice to Buyer, to review any adverse material changes
in any of the due diligence items received prior to the Closing
Date to terminate this Agreement. Except for the foregoing, if
this Agreement is not canceled and the Second Payment is made
when required, all of Buyer's conditions and contingencies will
be deemed satisfied.
7. Escrow. The escrow holder will be Centura Title Insurance
Agency, as agent for a nationally-recognized title insurance
company reasonably acceptable to Seller ("the Escrowee"), with
offices in or near Charlotte, North Carolina. A copy of this
Agreement and the First Payment 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 deemed opened only upon Seller's execution of this
Agreement and the deposit with Escrowee of the Buyer's First
Payment by Seller. The escrow is scheduled to close on November
15, 1999.
8. Title. Closing will be conditioned on the agreement of the
Escrowee to issue an ALTA 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; and other items of record disclosed to Buyer during
the contingency period.
Buyer shall be allowed ten (10) business days after receipt of
said commitment for examination and for the making of any
objections thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed sixty (60) days to remove or cure such objection to
Buyer's satisfaction and make such title marketable. If Seller
shall decide to make no efforts to make title marketable, or is
unable to make title marketable, (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.
Seller shall pay for the cost of issuing the title commitment and
Buyer shall pay the owner's title insurance premium for an
Owner's policy.
9. CLOSING COSTS. Subject to paragraph 4(c) above, Seller will
pay the deed stamp taxes and one-half of escrow fees, and any
brokerage commissions payable. Buyer will pay all recording
fees, one-half of the escrow fees, the costs of a survey or
survey update (if required by Buyer) and the title premium. 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) Because the Property is subject to a
triple net lease, the parties acknowledge that
there shall be no need for a real estate tax
prorations. However, Seller represents that to
the best of its 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. Unpaid levied and pending
special assessments existing on the date of
Closing shall be pro-rated between Buyer and
Seller as of the date of Closing. Buyer shall 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 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, and 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. To the extent any of said items cannot
be determined at Closing after reasonable efforts,
Seller and Buyer shall compute such prorations as
soon as possible after Closing and settle such
adjustment as of the Closing date.
11. SELLER'S COVENANTS, REPRESENTATIONS AND AGREEMENTS.
(a) Seller represents and warrants as of this date
that:
(i) Except for the Net Lease
Agreement with Caribou Coffee and its
sublessees or concessionaires, there are no
other leases of the property. The Caribou
Coffee Net Lease Agreement is in full force
and effect and neither party is in default
thereunder and the tenant is not entitled to
any credits or offsets thereunder.
(ii) It is not aware of any pending
litigation, condemnation, or rezoning
proceedings against the Property or Seller's
interest in the Property.
(iii) It is not aware of any contracts it
has executed that would be binding on Buyer
after the closing date.
(iv) Seller is validly existing and duly
qualified to transact business in the State
of North Carolina.
(v) To the best of Seller's knowledge the
Property is not subject to any claim, demand,
suit, unfiled lien or other proceeding of any
kind which affects or may affect the
Property.
(vi) There are no leasing commissions, fees
or other compensation owed in connection with
the leasing of the Property.
(vii) Provided that Buyer performs its
obligations when required, Seller agrees that
it will not enter into any new contracts or
amend or modify any current leases that would
materially affect the Property and be binding
on Buyer after the closing date without
Buyer's prior consent, which will not be
unreasonably withheld.
(viii) Seller is not a "foreign person"
which would subject Buyer to the withholding
tax provisions of Section 1445 of the
Internal Revenue Code.
(ix) To Seller's best knowledge, the Property
and all business operations thereon are in
compliance with all applicable federal, state
and local statutes, laws and regulations.
(x) Seller is not aware of, and has received
no notice of, the presence, disposal, leakage
or migration on to the Property of any
hazardous waste or toxic substances regulated
by any federal, state or local governmental
authorities which may be in violation of any
applicable law, rule or regulation.
(xi) In addition to the acts and
deeds recited herein and contemplated to be
performed, executed, and delivered by Seller,
Seller 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 Buyer or the Title Company may
require and Seller deems to be reasonable in
order to consummate the transactions
contemplated herein.
(xii) Seller has all requisite power and
authority to consummate the transaction
contemplated by this Agreement and has by
proper proceedings duly authorized the
execution and delivery of this Agreement and
the consummation of the transaction
contemplated hereby.
(b) All covenants, representations and warranties
of Seller contained herein are true and correct as
of the date hereof and shall be true and correct
as of the date of Closing.
12. Disclaimer. Seller and Buyer acknowledge and agree
that Seller acquired the Property through a sale\leaseback with
the present tenant. 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 this
Agreement, Seller hereby specifically disclaims any warranty,
guaranty, or representation, oral or written, past, present, or
future of, as to, or concerning (i) the nature and condition of
the Property, including, without limitation, the water, soil, and
geology, and the suitability thereof and of the Property for any
and all activities and uses which Buyer may elect to conduct
thereon; (ii) except for the warranty 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.
Buyer acknowledges that having been given the opportunity to
inspect the Property, Buyer is relying solely on its own
investigation of the Property and not on any information
provided or to be provided by Seller except as set forth herein.
Buyer further acknowledges that the information provided and to
be provided with respect to the Property by Seller 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. The sale of the Property as provided for
herein is made on an "AS IS" basis, and 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, or fitness for a particular
purpose, in respect of the Property.
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, EXCEPT AS EXPRESSLY
PROVIDED HEREIN.
13. CLOSING.
a. Before the closing date, Seller will deposit
into escrow: an executed general warranty deed on
the form attached hereto as Exhibit B conveying
fee simple, insurable title of the Property to
Buyer; and
i) Assignment and Assumption of the Caribou
Coffee Lease, and any other intangible
personal property.
ii) Bill of sale to personal property, if any, of
Seller, on the property.
iii) Lien waiver affidavit
iv) Form 10995
v) FIRPTA Certificate
vi) Delivery of ORIGINAL Caribou
Coffee lease, warranties/guaranties, if any
in Seller's possession, permits/licenses,
keys, if any, in Seller's possession.
vii) Certified copy of Partnership Agreement
for the Seller
viii) Notice of transfer to tenant jointly
signed by Buyer and Seller.
ix) Estoppel dated no more than 30
days prior to the Closing from Caribou Coffee
in form and substance reasonably satisfactory
to Buyer. If Buyer and Seller cannot agree
prior to the end of the Due Diligence Period
on the form of Estoppel to be delivered, this
Agreement shall be null and void and of no
further force and effect and Buyer's First
(and Second, if made) Payment shall be
returned to Buyer.
(b) On or Before the closing date, Buyer
will deposit into escrow: the Assignment and
Assumption of Lease signed by Buyer; the balance
of the purchase price when required under Section
4; any additional funds required to close escrow.
Both parties will sign and deliver to the escrow
holder any other documents reasonably required by
the escrow holder to close escrow.
(c) On the closing date, if escrow is in a
position to close, the escrow holder will: record
the deed in the official records of the county
where the Property is located; cause the title
company to commit to issue the title policy;
immediately deliver to Seller the portion of the
purchase price deposited into escrow by cashier's
check or wire transfer (less debits and
prorations, if any); deliver to Seller and Buyer a
signed counterpart of the escrow holder's
certified closing statement; and take all other
actions necessary to close escrow.
14. DEFAULT. If Buyer defaults and Seller has fully
performed all obligations of Seller hereunder and satisfied all
conditions to Closing to be performed by Seller, Buyer will
forfeit all rights and claims and Seller will be relieved of all
obligations and will be entitled as its sole and exclusive
remedy, to retain all monies heretofore paid by the Buyer as
liquidated damages, actual damages being difficult if not
impossible to calculate and the parties having made a good faith
effort to determine the same.
If Seller shall default, Buyer irrevocably waives any right
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 and Second
Payment, performed all of its other obligations and satisfied
all conditions under this Agreement within the required time
periods, 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 punitive, consequential or
speculative damages arising out of any default by Seller
hereunder. Upon a default by Seller hereunder, Buyer shall have
the right to enforce an action in equity for specific
performance, sue for damages available at law or terminate this
Agreement by written notice to Seller and receive the immediate
return of the First and Second Payment.
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,
(ii) any order of any court or other agency of
government having jurisdiction hereof, or (iii) any
agreement or instrument to which Buyer is a party or by
which Buyer is bound.
16. DAMAGE, 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, 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 ten-day 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, and are
so payable to Seller under the Caribou Coffee Lease.
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.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First and Second
Payment shall be immediately returned to Buyer (after execution
by Buyer of such documents reasonably requested by Seller to
evidence the termination hereof).
17. MISCELLANEOUS.
(a) This Agreement may be amended only by a
written agreement signed by both Seller and Buyer,
and all waivers must be in writing and signed by
the waiving party.
(b) 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.
(c) If this escrow has not closed by thirty
(30) days after the end of the Due Diligence
Period, 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
theretofore paid by Buyer.
(d) 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. All funds
deposited into escrow and held by the escrow
holder will be held in an interest-bearing
account. Interest on the funds in this account
will accrue for Buyer's benefit, but if Buyer
defaults, interest will accrue for Seller's
benefit.
(e) 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: Robert P. Johnson
AEI Fund Management, Inc.
1300 Minnesota World Trade Center
Saint Paul, Minnesota 55101
Facsimile: (651) 227-7705
If to Buyer:
Attention: Ralph H. Falls, III CCIM
320 South Tryon Street
Suite 202
Charlotte, North Carolina 28202
Facsimile: (704) 333-6092
(f) Further Conditions to Closing:
i) Seller has complied with
and otherwise performed each of the
covenants and obligations of Seller set
forth herein;
ii) No adverse change to the
title or to the environmental condition
of the Property occurs after the Due
Diligence Period.
(g) All representations, warranties and
covenants contained herein shall, as applicable,
survive the Closing and delivery of the deed for a
period of one (1) year.
(h) This Agreement shall be governed by end
construed in accordance with the laws of the State
of North Carolina.
(i) This Agreement may be executed in
multiple counterparts, each of which shall be an
original copy and together which shall constitute
one instrument.
(j) Buyer intends to effect a tax-deferred
exchange under Section 1031 of the Internal
Revenue Code in connection with the purchase of
the Property and Seller agrees to cooperate with
Buyer in carrying out said exchange; provided
that, seller shall not be responsible for any
costs associated therewith or assume any
liabilities in connection therewith. Seller
agrees to execute such additional documents as may
be required to give effect to this provision.
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 into escrow by Seller.
Seller has five (5) business days within which to accept this
offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year first above written.
BUYER: BOULEVARD EAST, LLC
By: /s/ Ralph H Falls
Its: Manager
Accepted and agreed this ______ day of September, 1999.
SELLER: AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: AEI Fund Management XXI, Inc., its
corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
AEI INSTITUTIONAL NET LEASE FUND `93 LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
By: /s/ Robert P Johnson
Robert P. Johnson, President
EXHIBIT A
Being all of Lots 1, 2, and 3, Garden Terrace Subdivision,
as shown on plat recorded in book of Maps 332, Page 339,
Mecklenburg County Registry, North Carolina.