PURCHASE AGREEMENT
CHAMPPS AT 11075 INTERSTATE HWY 10 W., SAN ANTONIO, TEXAS
This AGREEMENT, entered into effective as of the 6 of August, 2007.
l. PARTIES. Seller is AEI Income & Growth Fund XXI Limited
Partnership, a Minnesota 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"), commonly known as 11075 Interstate Hwy 10 W., San
Antonio, Texas. Buyer is Champps Operating Corporation, a
Minnesota corporation, the parent of the current lessee of the
property, Champps Entertainment of Texas, Inc ("Lessee") or its
assigns. Seller wishes to sell and Buyer wishes to buy the
Property.
2. PROPERTY. The Property to be sold to Buyer, or its assignee,
in this transaction consists of an undivided 100% interest in the
Property. Seller owns no interest in any personalty in
connection with the Property.
3. PURCHASE PRICE. The purchase price for this Property is
$3,150,100.00 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 $5,100.00 to
Seller (which shall be deposited into escrow according to the
terms hereof) (the "First Payment"). The First Payment will be
credited against the purchase price when and if escrow closes and
the sale is completed. One Hundred Dollars of the First Payment
shall be considered non-refundable, binding Option Consideration
as required under Texas law.
(b) Buyer will deposit the balance of the purchase price,
$3,145,000.00 (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 August 30,
2007. Without limitation of any other provisions contained
herein, Buyer may extend the Closing date for up to two 30 day
periods (not to exceed sixty (60) days by notice or notices to
the Seller) provided however, as a condition to being granted the
first thirty day extension, Buyer will be required to make a non-
refundable deposit, into escrow according to the terms hereof,
in the amount of Five Thousand Dollars ($5,000.00), and as a
condition to being granted the second thirty day extension, Buyer
will be required to make an additional non-refundable deposit,
into escrow according to the terms hereof, in the amount of Ten
Thousand Dollars ($10,000.00).
6. DUE DILIGENCE. Buyer or Lessee has been in continuous
possession and control of the property since March 14, 1997, and
as such, has had ample opportunity to conduct such due diligence
on the Property as it deems appropriate.
Buyer shall order at its own expense such title, survey, and
any other due diligence information as Buyer shall deem
necessary. Buyer may only object to those matters of title or
survey encumbering the Property and caused by Seller without
Buyer's or Lessee's knowledge and written consent.
7. ESCROW. Escrow shall be opened by Seller and the First Payment
deposited in escrow with Heritage Title Company of Austin, Inc,
401 Congress, Suite 1500, Austin Texas 78701. Attn: John P.
Bruce, Senior Vice President-Commercial Escrow (phone 512-505-
5012/fax: 512-380-8812).. 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. If there is any
conflict between these other instructions and this Agreement,
this Agreement will control.
8. CLOSING COSTS. Seller shall pay no closing costs in
connection with the transaction contemplated herein, except its
own legal fees. Each party will pay its own attorney's fees and
costs to document this transaction.
9. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Property is subject to a triple net lease (as
further set forth in paragraph 10(a)(i), the parties acknowledge
that there shall be no need for a real estate tax proration.
(b) All income and all operating expenses including rent 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 prior to the date of Closing, Buyer shall be
responsible for all operating expenses of the Property prior to
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.
(c) These provisions shall survive Closing.
10. SELLER'S REPRESENTATION AND AGREEMENTS.
(a) Seller represents and warrants as of this date that:
(i) Except for the Lease Agreement dated March 14, 1997, in
existence between Seller (as Lessor) and Champps Entertainment or
Texas, Inc. (as Tenant or Lessee), (the "Lease"), Seller is not
aware of any leases of the Property.
(ii) It is not aware of any pending litigation or condemnation
proceedings against the Property or Seller's interest in the
Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(iv) Seller is not now, nor at the Closing shall Seller be, a non-
resident alien or a foreign person, corporation, partnership,
trust, estate or entity, in each case within the purview of
Section 1445 of the Internal Revenue Code. Seller agrees to
comply with Section 1445 of the Internal Revenue Code and at the
Closing will complete and submit to Buyer such instruments in
connection therewith as Buyer and/or the Title Company may
require.
(v) 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.
(vi) 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 be reasonable in order to
consummate the transactions contemplated herein.
(vii) To Seller'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 Seller is a party or by which Seller is bound.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts 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.
11. DISCLOSURES.
(a) Seller has not received any notice of any material,
physical, or mechanical defects of the Property, including
without limitation, the plumbing, heating, air conditioning,
ventilating, and electrical systems. To the best of Seller's
knowledge without inquiry, all such items are in good
operating condition and repair and in compliance with all
applicable governmental, zoning, and land use laws,
ordinances, regulations and requirements. If Seller shall
receive any notice to the contrary prior to Closing, Seller
will inform Buyer prior to Closing.
(b) Seller has not received any notice that the use and
operation of the Property is not in full compliance with
applicable building codes, safety, fire, zoning, and land
use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller
shall receive any notice to the contrary prior to Closing,
Seller will inform Buyer prior to Closing.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the Tenant from using and operating the Property
after the Closing in the manner in which the Property has
been used and operated prior to the date of this Agreement.
If Seller shall receive any notice to the contrary prior to
Closing, Seller will inform Buyer prior to Closing.
(d) Seller has not received any notice that the Property
is in violation of any federal, state or local law,
ordinance, or regulations relating to industrial hygiene or
the environmental conditions on, under, or about the
Property, including, but not limited to, soil, and
groundwater conditions. To the best of Seller's knowledge,
there is no proceeding or inquiry by any governmental
authority with respect to the presence of Hazardous
Materials on the Property or the migration of Hazardous
Materials from or to other property. To the best of
Seller's knowledge, without inquiry: the Property is not,
and at the time of the Closing shall not have been, used for
the generation, storage, transport or disposal of, or
contaminated or threatened with contamination from outside
sources by, any oil, hazardous waste (as defined in the
Resource Conversation and Recovery Act, as amended, 42
U.S.C. Section 6291 et seq.), hazardous substances (as
defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601 et seq.), or hazardous materials (as defined in
the Hazardous Material Transportation Act, 49 U.S.C. Section
1801 et. seq.) (or as any of the foregoing are defined in
any other federal law, in any applicable state or local law
or in any regulations adopted pursuant to any of the
foregoing statutes or other laws), and the Property has
never been used as, nor at the time of the Closing shall the
Property ever have been used as, a land fill or dump site.
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Property arising out of Seller's gross negligence or
intentional misconduct. If Seller shall receive any notice
to the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein or as caused by Seller's
gross negligence or intentional misconduct.
(f) Buyer acknowledges that, its wholly owned subsidiary,
Lessee, having been in possession of the Property and such
financial information on the Lessee and Guarantors of the
Lease as Buyer or its advisors shall require, Buyer is
relying solely on its own investigation of the Property and
not on any information provided by Seller or to be provided
except as set forth herein. Buyer further acknowledges that
the information, if any, to be provided by Seller with
respect to the Property, to the Lessee, and to the
Guarantors of Lease, was obtained from a variety of sources
and Seller neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information except as herein set forth. 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 in paragraph 11(a) and (b) above and this
paragraph 12, 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, or fitness for a particular
purpose, in respect of the Property.
The provisions of (a)-(c) above shall survive the closing
for a period of six (6) months. The provisions (d) - (f)
above shall survive Closing.
12. 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, or its assignee, subject to all exceptions of record
except those encumbering the Property and caused by Seller
without Buyer's or Lessee's knowledge and written consent. On or
before the closing date, Seller shall also deposit into escrow
and executed Assignment of Lease assigning all of Seller's
rights, title and interest in the Lease as Landlord to the Buyer,
and the written consent of Lessee and waiver of Lessee's Right of
First Refusal as set forth in the Lease.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the Purchase Price when required under
Section 4; any additional funds required of Buyer (pursuant to
this agreement or any other agreement executed by Buyer) to close
escrow. Both parties will 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.
13. 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. Provided, however, that in no event
shall Buyer be liable for any, punitive, consequential or
speculative damages arising out of any default by Buyer
hereunder.
If Seller shall default, Buyer may, at its option, in
addition to any other remedies provided herein, (1) terminate
this agreement and recover all earnest money and other amounts
paid hereunder, together with all expenses paid or incurred by
Buyer (including reasonable attorneys' fees) in contemplation of
Seller's performance hereunder, in which event this agreement
will be null and void and without recourse to any party in law or
in equity, (2) proceed with this agreement and purchase the
Property subject to an abatement in the Purchase Price
satisfactory to the parties, or (3) pursue any other legal or
equitable remedy, including without limitation, specific
performance. 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.
14. 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 be
reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
15. 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 September 30, 2007
through no fault of Seller, Seller may either, 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 Fund Management XXI, Inc.
Attention: Robert P. Johnson and George Rerat
1300 Wells Fargo Place
30 East Seventh Street
St. Paul, MN 55101
If to Buyer:
Champps Operating Corporation
Attention: Dave Womack and Donna Depoian
10375 Park Meadows Drive, Suite 560
Littleton, Colorado 80124-64791
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 Texas.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: Champps Operating Corporation
By: /s/ Dave Womack
Its: CFO
SELLER: AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: AEI Fund Management XXI, Inc. , a Minnesota
corporation
By: /s/ Robert P Johnson
Robert P. Johnson, its President
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)
Exhibit A
Lot 14, Block 1, New City Block 16841, Huebner Oaks Commons Unit-
2, in the City of San Antonio, Texas, according to the plat
thereof recorded in Volume 9534, Pages 204-205, Deed and Plat
Records of Bexar County, Texas;.
LEGAL DESCRIPTION OF PROPERTY
A 1.545 acre (67,300 square feet) tract of land, being out of the
B.B.B. and C.R.R. Survey No. 400, Abstract 99, County Block 4767,
consisting of Lot 14, Block 1, New City Block 16841, Huebner Oaks
Commons Unit 2, in the City of San Antonio, Bexar County, Texas
according to the plat thereof recorded in Volume 9534, Page 204
and 205 of the Deed and Plat Records of Bexar County, Texas, and
being more particularly described by metes and bounds as follows:
COMMENCING: At a found 1/2" iron rod with yellow cap marked
"Pape-Dawson," said point being the southwest
corner of Lot 12, Block 1, New City Block 16841,
Huebner Oaks Commons Unit 2 as recorded in Volume
9534, Page 204 and 205, said point also being on
the east right-of-way of interstate Highway 10, an
expressway with a variable width right-of-way.
THENCE: N 54 28 52 W, along said east right-of-way of
Interstate Highway 10, a distance of 66.48 feet,
to a found 1/2" iron rod with yellow cap marked
"Pape-Dawson," for the POINT OF BEGINNING and the
south corner of this tract:
THENCE: N 54 28 52 W, a distance of 150.34 feet along said
east right-of-way line of Interstate Highway 10,
to a found 1/2" iron rod with yellow cap marked
"Pape-Dawson," for the point of curvature of a
curve to the right.
THENCE: Continuing along said Interstate Highway 10 with
said curve to the right having a radius of 2748.75
feet, a central angle of 02 02 15, a chord bearing
and distance of N 53 23 14 W, 100.15 feet, and an
arc length of 100.15 feet in a found 1/2" iron rod
with yellow cap marked "Pape-Dawson," for the
north west corner of this tract, said point also
being the south corner of Lot 13, as recorded in
the aforementioned Huebner Oaks Commons Unit 2.
THENCE: N 43 40 21 E, departing said east right-of-way
line of Interstate Highway 10, along the common
property line of Lot 13 and this tract, a distance
of 426.65 feet to a found 1/2" iron rod with
yellow cap marked "Pape-Dawson," for the north
corner of this tract, said point also being on the
southwest property line of Lot 12 as recorded in
the aforementioned Huebner Oaks Commons Unit 2.
THENCE: S 45 51 53 E, departing said common line of Lots
13 and 14, along the common property line of Lot
12 and this tract a distance of 73.50 feet, to a
found 1/2" iron rod with yellow cap marked "Pape-
Dawson,".
THENCE: S 43 40 21 W, along said common property line, a
distance of 159.42 feet to a found 1/2" iron rod
with yellow cap marked "Pape-Dawson" for an
interior corner of this tract and a southwesterly
corner of said Lot 12;
THENCE: S 45 50 51 E, continuing along said commons
property line, a distance of 139.26 feet to a
found 1/2" iron rod with yellow cap marked "Pape-
Dawson," for the east corner of this tract and an
interior southwesterly corner of said Lot 12, and
point of curvature of a non-tangent curve to the
left;
THENCE: With said curve to the left having a radial
bearing of S 40 14 09 E, a radius of 459.29 feet,
central angle of 29 34 26, a chord bearing and
istance of S 34 58 38 W, 234.45 feet and an arc
length of 237.07 feet to the POINT OF BEGINNING
and containing 1.545 acres of land in the City of
San Antonio, Bexar County, Texas