PURCHASE AGREEMENT
Children's World Learning Center
Merrimack, NH
This AGREEMENT, entered into effective as of the
8th of May,
2005.
l. PARTIES. Seller is AEI Real Estate Fund XVII 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 Joan T.
Simpson. 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 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 $1,300,000.00, 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 $50,000
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,
$1,250,000.00 (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 65 days from
the Effective Date of this Agreement.
6. DUE DILIGENCE. Buyer will have 30 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
Seller immediately upon both parties hereto
having executed
this
agreement, and said commitment to be delivered to
Buyer as soon
as the third party title insurance company
provides it to Seller.
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.
E. Lease, and any amendments or modifications
thereto (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. 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.
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 funds 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 selected by Seller 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. Seller
will pay one-half of escrow fees. 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, the cost
of the title commitment and the cost of
an update to the Survey
in Sellers possession (if an update is
required by Buyer.)
Buyer
and Seller will each pay 1% of the sale price
at closing as
a
brokerage commission to Southeast Commercial
Real Estate.
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.
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 XVII Limited Partnership (as
Lessor) and
Knowledge
Learning Enterprises, Inc. ("Tenant"),
dated September 29,
1989,
the First Amendment to Net Lease Agreement
dated January 21,
2004, the Second Amendment to Net Lease
Agreement dated July
30,
2004, and the Third Amendment to Net Lease Agreement dated
October 1, 2004 (the "Lease"), Seller is
not aware of any
leases
of the Property.
2. If the Lease contains a Right of First
Refusal to the
benefit of the Lessee for the duration of the
Lease, including
any renewal terms, then Seller's obligations hereunder are
contingent upon Seller successfully
obtaining Lessee's waiver of
such right of first refusal with respect to
this transaction.
3. It is not aware of any pending
litigation or condemnation
proceedings against the Property or Seller's
interest in the
Property.
4. 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
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, safety, fire,
zoning, and
land use
laws, and other applicable local, state and federal laws,
ordinances, regulations
