PURCHASE AGREEMENT
6040 Lima Road
Fort Wayne, Indiana
This AGREEMENT,
entered into effective
as of the 11 of May,
2006.
l.
PARTIES. Seller is AEI
INCOME & GROWTH FUND XXII LIMITED
PARTNERSHIP, which
owns an undivided 100% interest in the fee
simple title to that
certain real property legally described in
the attached Exhibit
"A" (the "Property"). Buyer is TUMBLEWEED,
INC. 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% interest in the
Property.
Seller owns
no interest in any personalty in
connection with the Property.
3. PURCHASE
PRICE. The purchase price for this 100% interest in
the Property is
$1,200,000, payable as set forth in paragraph 4
below.
4. TERMS.
The purchase price for the Property will be paid by
Buyer as follows:
(A). When this agreement is executed, Buyer
will pay $100,000
cash 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.
(B). Buyer will deposit the balance of the purchase price in
the
following manner,
$936,000 cash, and
a Promissory Note from
Tumbleweed, Inc.
(and NOT any assignee
of Buyer's interest
in
this Agreement) in the
amount of $164,000, payable according to
the terms of the Promissory Note attached
hereto as Exhibit
B
(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 May 11, 2006.
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. Buyer agrees to indemnify and
hold Seller
harmless for any loss
or damage to the Property or
persons caused
by Buyer or its agents arising out of such
physical inspections
of the Property.
Within ten days
of the
Effective Date of this Agreement, Seller shall provide (except
as
explained below, in Item A):
A. One
copy of a title insurance commitment
for an Owner's
Title insurance policy (see paragraph 8 below), to be ordered
by
Buyer at Buyer's expense immediately upon
both parties
hereto
having executed this
agreement, with a copy of the same being
delivered to
Seller as soon as the
third party title
insurance
company provides it to Buyer.
B. A copy
of a Certificate of Occupancy or other such document
certifying completion
and granting permission to permanently
occupy the
improvements
on the Property
as are in Seller's
possession.
C. A
copy of an "as built" survey of the
Property completed
concurrent with
Seller's acquisition of the Property, if
available in Seller's possession.
D. A copy
of any Phase I Environmental Report on the Property,
if available in Seller's possession.
Buyer may cancel this agreement for ANY
REASON in its sole
discretion by
delivering a
cancellation notice, return receipt
requested, to Seller
and escrow holder before the expiration of
the Review
Period. Such notice
shall be deemed
effective only
upon receipt by Seller. If this Agreement is not cancelled as
set
forth above,
the First Payment shall be
non-refundable
unless
Seller shall default hereunder.
Notwithstanding anything in this Agreement to the contrary, the
Buyer's obligations under this Agreement shall be conditioned
on
the full and complete performance by Tony
& Stan, LLC (the
"Assignee") under
that certain Purchase
Agreement dated
April
___, 2006 (the "Other Purchase Agreement") by
and among the
Assignee as buyer and Buyer as seller, by which the Buyer
agrees
to sell the Property to the Assignee immediately upon the
consummation of
the transactions set
forth in this
Agreement.
Seller agrees
to consent to the
assignment of Buyer's
purchase
rights hereunder to the Assignee simultaneously with closing,
and
to deed the property directly to such Assignee at Buyer's
direction.
If at any time prior to closing,
Buyer notifies
Seller that the
Assignee is unable to perform any of Assignee's
obligations under
the Other Purchase Agreement, (i) this
Agreement shall be cancelled and of no further force and
effect,
(ii) the Seller shall
return immediately the First Payment, and
(iii) neither Buyer
nor Seller shall have any further liability
or obligation under this Agreement.
If Buyer cancels this
Agreement as permitted under this Section,
except for any escrow cancellation fees and any liabilities
under
the first paragraph of section 6 of this
Agreement (which
will
survive), Seller
(after execution of
such documents
reasonably
requested by
Seller to evidence the
termination hereof)
shall
return to Buyer its
First Payment and Buyer will have absolutely
no rights, claims or
interest of any type in connection with the
Property or this
transaction, regardless of any alleged conduct
by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms
hereof, if Buyer fails to make the Second Payment Seller shall
be
entitled to retain the
First Payment and Buyer irrevocably will
be deemed to be in default under this Agreement. Seller then
may,
at its option, retain the First Payment and declare this
Agreement null and
void, in which event Buyer will be deemed to
have canceled this Agreement and relinquish all rights in and
to
the Property, or Seller may exercise its rights under Section
14
hereof. If this
Agreement is not canceled and the First Payment
and the Second Payment is made when required, all
of Buyer's
conditions and contingencies will be deemed satisfied.
7. ESCROW.
Escrow shall be opened by Seller and the funds will
be deposited in escrow
upon acceptance of this Agreement by both
parties. The escrow holder will be a nationally-recognized
escrow
company selected
by Seller. A copy of
this Agreement
will be
delivered to
the escrow holder and will serve as escrow
instructions
together with
the escrow holder's standard
instructions and
any additional
instructions required
by the
escrow holder to
clarify its rights and duties (and the parties
agree to sign these additional
instructions). If there is any
conflict between
these other
instructions and this
Agreement,
this Agreement will control.
8. TITLE.
Closing will be
conditioned on the agreement of a
national title
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
five (5) business days after receipt of
said commitment for
examination and the making of any objections
to marketability
thereto, said objections to be made in writing
or deemed waived. If
any objections are so made, Seller shall be
allowed sixty
(60) days to cure such
objections and make
such
title marketable or,
in the alternative, to obtain a commitment
for insurable title
insuring over Buyer's objections. If Seller
shall decide to make
no efforts to make title marketable, or is
unable to make title marketable or obtain insurable title,
(after
execution by
Buyer of such documents reasonably
requested by
Seller to evidence the
termination hereof) Buyer's First Payment
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. 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, the escrow
fees, the cost of the
title commitment and the cost of an update
to the Survey in Seller's possession (if an update is required
by
Buyer.) Seller
will pay 3% of the sale price at closing as a
brokerage commission
to Houston Jones. 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 11(A)(1)), the parties
acknowledge
that there
shall be no need for a real estate
tax proration.
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 Lessee and not Seller. Buyer or Assignee 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
Lessee 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 prior to the
date of Closing. Buyer or Assignee shall be
entitled to all income earned on or after the date of closing
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 Agre
