PURCHASE AGREEMENT
Cheddar's Restaurant
Clive, Iowa
This AGREEMENT, entered into effective as of the 15th of October,
2003.
1. Parties. Seller is AEI Real Estate Fund XVIII Limited
Partnership which owns an undivided 100% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Property") Buyer is ▇▇▇▇▇▇▇ Real
Estate Services, LLC, or assignee. Seller wishes to sell and
Buyer wishes to buy the Property.
2. Property. The Property to be sold to Buyer in this
transaction consists of an undivided 100% percentage interest the
Property. See attached Exhibit B for any personalty in connection
with the Property.
3. Purchase Price. The purchase price for this percentage
interest in the Property is $2,264,790, 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, within three
(3) business days, deposit $25,000 with the Escrow Agent as
provided in Paragraph 7 of this contract, (the "▇▇▇▇▇▇▇ Money").
The ▇▇▇▇▇▇▇ Money will be credited against the purchase price
when and if escrow closes and the sale is completed.
(B). Buyer will deposit the balance of the purchase price,
$2,239,790 into escrow in sufficient time to allow escrow to
close on the closing date.
5. Closing Date. Escrow shall close on or before thirty days
after the end of the Review Period.
6. Due Diligence. Buyer will have 45 days from the effective
date of this Agreement (The "Review Period"), to conduct all of
its inspections and due diligence and satisfy itself regarding
the Property and this transaction, including obtaining approval
from Buyer's Real Estate Committee. Buyer agrees to indemnify and
hold Seller harmless for any loss or damage to the Property or
persons caused by Buyer or its agents arising out of such
physical inspections of the Property. Within fifteen (15) days of
the date of this contract, Seller shall provide:
A. One copy of a title insurance commitment for an Owner's
Title insurance policy (see paragraph 8 below).
B. A copy of a Certificate of Occupancy or other such document
granting permission to permanently occupy the improvements on the
Property as are in Seller's possession.
C. A copy of an "as built" survey of the Property completed
concurrent with Seller's acquisition of the Property, if
available in Seller's possession.
D. A copy of any Phase I Environmental Report on the Property,
if available in Seller's possession.
E. Lease (as further set forth in paragraph 11(a) below) of the
Property showing occupancy date, lease expiration date, rent, and
Guarantees, if any, accompanied by such tenant financial
statements as may have been provided most recently to Seller by
the Tenant and/or Guarantors.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
the Review Period. If this Agreement is not cancelled as set
forth above, the ▇▇▇▇▇▇▇ Money shall be non-refundable unless
Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this Section,
except for any escrow cancellation fees and any liabilities under
the first paragraph of section 6 of this Agreement (which will
survive), Seller (after execution of such documents reasonably
requested by Seller to evidence the termination hereof) shall
return to Buyer its ▇▇▇▇▇▇▇ Money without further liability to
either party and Buyer will have absolutely no rights, claims or
interest of any type in connection with the Property.
Unless this Agreement is canceled by Buyer pursuant to the terms
hereof, Seller shall be entitled to retain the ▇▇▇▇▇▇▇ Money and
Buyer irrevocably will be deemed to be in default under this
Agreement. Seller may, at its option, retain the ▇▇▇▇▇▇▇ Money
and declare this Agreement null and void, in which event Buyer
will be deemed to have canceled this Agreement and relinquish all
rights in and to the Property, or Seller may exercise its rights
under Section 14 hereof If this Agreement is not canceled, as
herein provided, all of Buyer's conditions and contingencies will
be deemed satisfied.
7. Escrow. Escrow shall be opened with Lawyers Title Insurance
Company. A copy of this Agreement will be delivered to the escrow
holder and will serve as escrow instructions together with the
escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. Title. Closing will be conditioned on the agreement of
Lawyers Title Insurance Company to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company s standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
all matters of public record; and other items disclosed to Buyer
during the Review Period.
Buyer shall be allowed fifteen (15) business days after receipt
of said commitment for examination and the making of any
objections to marketability thereto, said objections to be made
in writing or deemed waived. If any objections are so made,
Seller shall be allowed thirty (30) days to cure such objections
and make such title marketable or, in the alternative, to obtain
a commitment for insurable title insuring over Buyer's
objections. If Seller shall decide to make no efforts to make
title marketable, or is unable to make title marketable or obtain
insurable title, (after execution by Buyer of such documents
reasonably requested by Seller to evidence the termination
hereof) Buyer's ▇▇▇▇▇▇▇ Money will be returned and this Agreement
shall be null and void and of no further force and effect. Seller
has no obligation to spend any funds or make any effort to
satisfy Buyer's objections, if any.
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
to the Buyer of satisfaction of Buyer's objections, the parties
shall perform this Agreement according to its terms.
9. Closing Costs. Seller will pay one-half of escrow fees, the
cost of the title commitment and a brokerage commissions of four
percent of the selling price paid by Seller to Iowa Realty
Commercial. Seller acknowledges that ▇▇▇▇▇▇▇ Real Estate
Services, LLC is a licensed Real Estate Broker in the State of
Missouri, and will receive a portion of the brokerage commission
paid to Iowa Realty Commercial as a referral fee. If Buyer shall
decide to purchase title insurance, then Buyer will pay the cost
of obtaining a Standard Owners Title Insurance Policy in the full
amount of the purchase price. Buyer will pay all recording fees,
transfer taxes and clerk's fees imposed upon the recording of the
deed, one-half of the escrow fees, and the cost of an update to
the Survey or Phase I Environmental Report in Sellers possession
(if an update is required by Buyer.) Each party will pay its own
attorney's fees and costs to document and close this transaction.
10. Real Estate Taxes, Special Assessments and Prorations.
(A). Because the Property is subject to a net lease (as further
set forth in paragraph 1 l(a)(i), the parties acknowledge that
there shall be no need for a real estate tax proration. However,
Seller warrants that 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 real estate taxes
and unpaid levied and pending special assessments existing on the
date of Closing shall be the responsibility of Buyer, pro-rated,
however, to the date of closing for the period prior to closing,
which shall be the responsibility of Seller if Tenant shall not
pay the same. Buyer shall likewise pay all taxes due and payable
in the year after Closing and any unpaid installments of special
assessments payable therewith and thereafter, if such unpaid
levied and pending special assessments and real estate taxes are
not paid by any tenant of the Property.
(B). All income and all operating expenses from the Property, if
any, shall be prorated between the parties and adjusted by them
as of the date of Closing. Seller shall be entitled to all income
earned, and shall be responsible for all expenses incurred, prior
to the date of Closing. Buyer shall be entitled to all income
earned and shall be responsible for all operating expenses of the
Property incurred on and after the date of closing.
11. Seller's Representation and Agreements.
(A). Seller represents and warrants as of this date that:
1. Except for the Lease Agreement in existence between AEI Real
Estate Fund XVIII Limited Partnership (as Lessor) and Heartland
Restaurant Corporation, a Florida corporation ("Lessee"), dated
January 22, 1991, the Guarantee of Lease dated January 22, 1991,
and a Settlement Agreement dated February 25, 2003, Seller is not
aware of any leases of the Property.
2. It is not aware of any pending litigation or condemnation
proceedings against the Property or Seller's interest in the
Property.
3. Except as previously disclosed to Buyer, Seller is not aware
of any contracts Seller has executed that would be binding on
Seller after the closing date.
(B). Provided that Buyer performs its obligations as required,
Seller agrees that it will not enter into any new contracts that
would materially affect the Property and be binding on Seller
after the Closing Date without Buyer's prior consent, which will
not be unreasonably withheld.
12. 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, and
ventilating, electrical system. 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 (including ADA), safety, fire, zoning,
and land use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller shall
receive any such notice 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. 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
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.
(F). BUYER ACKNOWLEDGES THAT, HAVING BEEN GIVEN THE OPPORTUNITY
TO INSPECT THE PROPERTY AND SUCH FINANCIAL INFORMATION CONCERNING
THE LESSEE AND ANY GUARANTORS OF THE LEASE AS BUYER OR ITS
ADVISORS SHALL REQUEST AND AS MAY BE IN SELLER'S POSSESSION,
BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY
AND NOT ON ANY REPRESENTATIONS OR INFORMATION PROVIDED BY SELLER
OR TO BE PROVIDED BY SELLER, EXCEPT AS SET FORTH HEREIN. BUYER
FURTHER ACKNOWLEDGES THAT THE INFORMATION PROVIDED, OR TO BE
PROVIDED, BY SELLER WITH RESPECT TO THE PROPERTY, THE PROPERTY
AND TO THE LESSEE AND ANY GUARANTORS OF LEASE, WAS OBTAINED FROM
A VARIETY OF SOURCES AND SELLER HAS NOT (A) MADE INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION, AND (B) MAKES
NO 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 - WHERE 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, SUITABILITY FOR LEASE,
SUITABILITY FOR COMMERCIAL PURPOSES, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE, IN RESPECT OF THE PROPERTY.
The provisions (D) - (F) above shall survive Closing.
13. 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, subject to the exceptions contained in paragraph 8
above. Seller will also deliver an Estoppel Certificate certified
by Seller (or if available, by Lessee) as to the absence of known
defaults by Lessee and Lessor under 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 and any additional funds required of Buyer (pursuant to
this agreement or any other agreement executed by Buyer) to close
escrow. Both parties will deliver to the escrow holder any other
documents reasonably required by the escrow holder to close
escrow.
(C). On the closing date, if escrow is ready to close, the escrow
holder will: record the deed in the official records of the
county where the Property is located; cause the title company to
commit to issue the title policy; immediately deliver to Seller
the portion of the purchase price deposited into escrow by
cashier's check or wire transfer (less debits and prorations, if
any); deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all other
actions necessary to close escrow.
14. Defaults. If this contract shall not be closed for the fault
of Buyer, then the ▇▇▇▇▇▇▇ money amount shall be kept by Seller
as liquidated damages, it being agreed that actual damages are
difficult, if not impossible, to ascertain.
If Seller shall default, Buyer irrevocably waives any rights to
file a us pendens, a specific perfonnance 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 performed all of its obligations
and satisfied all conditions under this Agreement, and
unconditionally notified Seller that it stands ready to tender
full performance, purchase the Property and close escrow as per
this Agreement, regardless of any alleged default or misconduct
by Seller. Provided, however, that Seller's responsibility shall
be limited to actual damages, and in no event shall Seller be
liable to any punitive, consequential or speculative damages
arising out of any default by Seller hereunder.
If legal action is brought arising out of this contract, the
prevailing party shall be entitled to a reasonable attorney fee.
15. Buyer's Representations and Warranties.
(A). Buyer represents and warrants to Seller as follows:
(1). In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by Buyer,
Buyer shall perform, execute and deliver or cause to be
performed, executed, and delivered at the Closing or after the
Closing, any and all further acts, deeds and assurances as Seller
or the Title Company may require and be reasonable in order to
consummate the transactions contemplated herein.
(2). Buyer has all requisite power and authority to consummate
the transaction contemplated by this Agreement and has by proper
proceedings duly authorized the execution and delivery of this
Agreement and the consummation of the transaction contemplated
hereby.
(3). To Buyer's knowledge, neither the execution and delivery of
this Agreement nor the consummation of the transaction
contemplated hereby will violate or be in conflict with (a) any
applicable provisions of law, (b) any order of any court or other
agency of government having jurisdiction hereof, or (c) any
agreement or instrument to which Buyer is a party or by which
Buyer is bound.
16. Damages. Destruction and Eminent Domain.
(A). If, prior to closing, the Property or any part thereof be
destroyed or further damaged by fire, the elements, or any cause,
due to events occurring subsequent to the date of this Agreement
to the extent that the cost of repair exceeds $10,000.00, this
Agreement shall become null and void, at Buyer's option
exercised, if at all, by written notice to Seller within ten (10)
days after Buyer has received written notice from Seller of said
destruction or damage. Seller, however, shall have the right to
adjust or settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived; and
(ii) any ten-day period provided for above in this Subparagraph I
6a for Buyer to elect to terminate this Agreement has expired or
Buyer has, by written notice to Seller, waived Buyer's right to
terminate this Agreement. If Buyer elects to proceed and to
consummate the purchase despite said damage or destruction,
there shall be no reduction in or abatement of the purchase
price, and Seller shall assign to Buyer the Seller's right,
title, and interest in and to all insurance proceeds (pro-rata in
relation to the Property) resulting from said damage or
destruction to the extent that the same are payable with respect
to damage to the Property, subject to rights of any Tenant of the
Property.
If the cost of repair is less than $10,000.00, Buyer shall be
obligated to otherwise perform hereinunder with no adjustment to
the Purchase Price, reduction or abatement, and Seller shall
assign Seller's right, title and interest in and to all insurance
proceeds pro-rata in relation to the Property, subject to rights
of any Tenant of the Property.
(B). If, prior to closing, the Property, or any part thereof, is
taken by eminent domain, this Agreement shall become null and
void at Buyer's option. If Buyer elects to proceed to consummate
the purchase despite said taking, there shall be no reduction in,
or abatement of, the purchase price, and Seller shall assign to
Buyer the Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata in
relation to the Property, subject to rights of any Tenant of the
Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph I 6A or I 6B, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof)
17. Cancellation
If any party elects to cancel this Contract because of any breach
by another party or because escrow fails to close by the agreed
date, the party electing to cancel shall deliver to escrow agent
a notice containing the address of the party in breach and
stating that this Contract shall be cancelled unless the breach
is cured within 13 days following the delivery of the notice to
the escrow agent. Within three days after receipt of such notice,
the escrow agent shall send it by United States Mail to the party
in breach at the address contained in the Notice and no further
notice shall be required. If the breach is not cured within the
13 days following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
18. Miscellaneous.
(A) Buyer shall have the right to assign this contract.
(B). 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.
(C). If this escrow has not closed within one hundred twenty
(120) days of the Effective Date of this contract through no
fault of Seller, Seller may, at its election, extend the closing
date or exercise any remedy available to it by law, including
terminating this Agreement.
(D). 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.
(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:
AEI Real Estate Fund XVIII Limited Partnership
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Buyer:
▇▇▇▇▇▇▇ Real Estate Services, LLC, or assignee
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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 Iowa.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
▇▇▇▇▇▇▇ Real Estate Services, LLC, or assignee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President
SELLER:
AEI Real Estate Fund XV Limited Partnership
By: AEI Fund Management XVIII, Inc.
By:/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer
(THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK)