EX-10.1 3 aspaara.txt ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT THIS ASSIGNMENT made and entered into this 24th day of October, 2005, by and between AEI FUND MANAGEMENT, INC., a Minnesota corporation, ("Assignor") and AEI INCOME & GROWTH FUND 25 LLC, a Delaware limited liability company ("Assignee"); WITNESSETH, that: WHEREAS, on the 21st day of September, 2005, Assignor entered into an Purchase Agreement (hereinafter referred to as the "Agreement") for that certain property located at 1016 North Route 59, Aurora., Illinois, which is more particularly described within the Agreement, (the "Property) with LaFayette Village, L.L.C., a Virginia limited liability company, as Seller; and WHEREAS, Assignor desires to assign to Assignee all of Assignor's rights, title and interest in, to and under the Agreement regarding the Property and Assignee desires to accept the assignment thereof and assume Assignor's right, title and interest in, to and under the Agreement regarding the Property as hereinafter provided; NOW, THEREFORE, for One Dollar ($1.00) and other good and valuable consideration, receipt of which is hereby acknowledged, it is hereby agreed between the parties as follows: 1. Assignor assigns all of its rights, title and interest in, to and under the Agreement regarding the Property to Assignee, to have and to hold the same unto the Assignee, its successors and assigns; 2. Assignee hereby assumes all rights, promises, covenants, conditions and obligations under the Agreement regarding the Property to be performed by the Assignor thereunder, and agrees to be bound for all of the obligations of Assignor under the Agreement; All other terms and conditions of the Agreement shall remain unchanged and continue in full force and effect. ASSIGNOR: AEI FUND MANAGEMENT, INC., a Minnesota corporation By: /s/ Robert P Johnson Name: Robert P Johnson Title: President ASSIGNEE: AEI INCOME & GROWTH FUND 25 LLC, a Delaware limited liability company By: AEI Fund Management XXI, Inc., a Minnesota corporation, its Managing Member By: /s/ Robert P Johnson Name: Robert P Johnson Title: President AGREEMENT OF PURCHASE AND SALE THIS AGREEMENT ("Agreement"), dated as of the 21 day of September, 2005, by and between LAFAYETTE VILLAGE, L.L.C., a Virginia limited liability company ("Seller") and AEI FUND MANAGEMENT, INC., a Minnesota corporation ("Purchaser"), recites and provides: RECITALS Seller is the owner of a parcel of real property, with improvements thereon known generally as 1016 North Route 59, Aurora, Illinois, currently leased for use as a Jared's Jewelry Store, such property being more particularly described on Exhibit "A" attached hereto (collectively, the "Property"). Seller wishes to sell and Purchaser wishes to purchase the Property on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of their mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties hereto covenant and agree as follows: 1. Recitals. The recitals above are incorporated herein by this reference as matters of contract, and not mere recital. 2. Contract. This Agreement shall constitute a binding contract for the purchase and sale of the Property, on the terms and conditions set forth herein. 3. Property. The Property includes all of Seller's right, title and interest in and to all buildings and other improvements on or within the Property and all appurtenances thereto, including easements and covenants and Seller's right, title and interest in and to the lease of the Property (together with all rents, charges and other matters arising or otherwise accruing thereunder) (the "Lease"). 4. Deposit. Upon execution hereof, Purchaser shall deposit the sum of $50,000 as a "Deposit", which will be held by First American Title Insurance Company Minneapolis, Minnesota, as the "Escrow Agent" in escrow pending "Settlement". If this Agreement is timely terminated pursuant to any right contained herein, the Deposit shall be returned to Purchaser. The Deposit shall be applied to the Purchase Price at Settlement or shall be paid to Purchaser or Seller in accordance with the provisions of Section 6 and/or 16 below. 5. Purchase Price. The purchase price (the "Purchase Price") for the Property shall be Two Million Two Hundred Thousand Dollars ($2,200,000.00). The Purchase Price shall be payable all in cash at settlement by wire transfer. 6. Feasibility. (a) During the fifteen (15) business day period following the latest of the dates on which Purchaser and Seller have both executed this Agreement (the "Feasibility Period"), Purchaser, its agents, employees and contractors shall have the right to enter the Property for the purpose of inspecting improvements, making surveys, updating the due diligence materials previously delivered to Purchaser pursuant to 6(b) below, and performing other tests, studies and examinations as Purchaser, in its sole discretion, desires and to confirm the availability of financing, on terms and conditions acceptable to Purchaser. If Purchaser is not satisfied, in its sole discretion, with the results of all updated tests including any materially adverse facts or conditions not shown in the Due Diligence Materials (defined below) which may be revealed by an updated Phase I Environmental report, survey or title examination, Purchaser shall have the right, upon written notice to Seller given prior to expiration of the Feasibility Period, to terminate this Agreement, in which event the Deposit shall be returned to Purchaser. (b) Purchaser acknowledges that Seller has delivered to Purchaser the materials listed on Exhibit B (the "Due Diligence Materials"), and that all matters disclosed by such deliveries are acceptable to Purchaser and shall not be the basis for any objection hereunder. The matters of title and survey reflected in the materials already delivered to Purchaser are "Permitted Exceptions" deemed acceptable to Purchaser. Seller shall promptly deliver to Purchaser such other due diligence materials in Seller's possession as Purchaser may specifically identify in writing, excluding any materials of a proprietary nature, not relating to the condition or performance of the Property or the tenant. All due diligence updates shall be at Purchaser's sole expense. (c) If notice of termination is not given prior to expiration of the Feasibility Period, all such matters shall be deemed acceptable and all such conditions satisfied and/or waived and the termination right under 6(a) shall be extinguished. (d) Purchaser agrees to repair any damage caused directly by exercise of the right of access granted to Purchaser in this paragraph, and to indemnify and hold the Seller harmless from any and all losses actually incurred as a direct result of the exercise of such right of access, other than as a result of the Seller's negligence or willful misconduct. Seller will cooperate and assist Purchaser's access to the buildings. 7. Conditions Precedent to Obligation of Purchaser. This Agreement and all of Purchaser's obligations hereunder are further subject to satisfaction of the following conditions on or before Settlement: (a) Seller's Representations and Deliveries. All representations and warranties of Seller made herein shall be true and correct in all material respects as of the date of Settlement and Seller shall have taken all action and delivered all documents and materials required by this Agreement. (b) No Litigation. As of Settlement, there shall be no litigation, proceeding or investigations pending, or to the knowledge of Purchaser or Seller threatened, which might prevent or adversely affect the use of the Property, or which questions the validity of any action taken or to be taken by Seller hereunder. (c) Lease. Purchaser shall have received an Estoppel Certificate from the tenant under the Lease, such Estoppel Certificate to be in the form specified by the Lease, confirming that the Lease is in full force and effect, that there are no modifications or amendments, other than those provided to Purchaser, the amount of rent and any security deposit, that amounts due under the Lease are current and not prepaid and that Seller is not in default under the Lease. Purchaser must determine during the Feasibility Period if this form of Estoppel is satisfactory to Purchaser. (d) Declaration for Meridian Business Campus. Purchaser shall have received a satisfactory resolution of the three (3) title issues reported from review of Due Diligence Materials as follows: (i) Estoppel confirmation as to what entity is authorized to bill and collect assessments for Meridian Business Campus Phase II and confirmation that no amounts are past due under the Declaration for Meridian Business Campus Phase II; (ii) Confirmation in the tenant estoppel that tenant pays amounts assessed against the Property under the Declaration; and (iii) Confirmation by the authorized billing party under the Declaration as to what specific common areas it makes assessments for (e.g., clarification as to the responsibilities of tenant and the billing party under the Declaration to maintain the "Access Drive" and "Shared Roadway", respectively as such terms are used in the Lease and/or the Declaration). In the event any of the foregoing conditions is not satisfied on the date of Settlement, then Purchaser, at its sole option, shall either: (i) waive such condition in writing and proceed to consummate Settlement; or (ii) terminate this Agreement by written notice to Seller, whereupon the Deposit shall be promptly repaid to Purchaser, subject to Purchaser's right to exercise its remedies hereunder in the event of a Seller default. Failure to select one of the foregoing on the date of Settlement shall constitute Purchaser's election not to terminate this Agreement and shall constitute waiver of all such conditions. 8. Settlement. (a) Time and Place. Unless this Agreement has been terminated as provided above, Seller and Purchaser shall make settlement on the sale and purchase of the Property in accordance with the terms hereof ("Settlement") on the date which is ten (10) business days after the expiration of the Feasibility Period (the "Settlement Date"), time being of the essence. Settlement shall take place at the offices of the Escrow Agent, or as mutually agreed by the parties. (b) Purchaser's Deliveries. At Settlement, the Purchaser shall pay the purchase price to Seller and shall execute and deliver an instrument providing for Purchaser's assumption of the Lease and Purchaser's indemnity of Seller with respect to all matters occurring under the Lease or with respect to the Property from and after the date of Settlement. (c) Seller's Deliveries. Seller shall deliver the following to Purchaser: (i) the Deed (as defined in paragraph 10); (ii) an affidavit as to mechanics' liens and parties in possession in customary form as reasonably required to cause owner's title policy to be issued without exception for Mechanics Liens or parties in possession (other than the Lease); (iii) a Certificate of Non-Foreign Status as required by Section 1445 of the Internal Revenue Code of 1986 and any other certificates required by any governmental authority or agency; (iv) an assignment of all of Seller's right, title and interest in the Lease; (v) an assignment of all of Seller's right, title and interest in and to any warranties applicable to the Property, to the extent any are in effect and assignable; and (vi) a written notice from Seller to the tenant stating that the Property has been sold to Purchaser and directing tenant to regard Purchaser as its Landlord and make rental payments payable to Purchaser at the address specified by Purchaser and set forth in such notice. (d) Costs. The Seller shall pay the costs of preparing the Deed, the title insurance company's reasonable escrow settlement charges and any state transfer taxes, stamps and similar recording charges on the Deed. The Purchaser shall pay for the examination of title to the Property, local and county transfer taxes or documentary stamps, premiums charged by the title insurance company, and the cost of any updated survey, environmental report and other feasibility studies. Each party shall pay its own legal, accounting and other expenses incurred in connection with this Agreement or Settlement hereunder. It is the intent of the parties that Seller shall be entitled to all income for the period of time up to but not including the date of Settlement, and Purchaser shall be entitled to all income and shall be responsible for all expenses for the period of time from, after and including the date of Settlement. Such adjustments shall be shown on the Settlement Statement (with such supporting documentation as the parties hereto may require). Without limiting the generality of the foregoing, the items of income and expense allocated at Settlement shall include rent, maintenance charges, any other additional rent, real and personal property taxes, amounts due under contracts assigned to and assumed by Purchaser, if any, and utility charges, except for costs which the tenants under the Lease are responsible for, which shall not be prorated. In addition, any security deposit under the Lease shall be assigned and delivered to Purchaser at Settlement. For purposes of this Section, Settlement shall not be deemed to have occurred unless and until Seller's proceeds are received by Seller prior to 2:00 p.m. E.S.T. on such date. Settlement and any prorations shall be computed as of the following day in the event Seller's proceeds cannot be delivered by 2:00 p.m. EST on the date specified for Settlement. (e) Possession. Subject only to the rights of the tenant under the Lease, possession of the Property shall be delivered to Purchaser immediately upon consummation of Settlement. (f) Closing Documents. All closing documents to be executed and delivered by the parties pursuant hereto shall be in form, execution and substance as required herein. 9. Title and Survey Objections. The Purchaser shall have until expiration of the Feasibility Period to report to Seller in writing any survey or title defects or other objections regarding the Property that are disclosed by Purchaser's examinations, other than the Permitted Exceptions (as to which Purchaser has waived any objection), which, in Purchaser's sole discretion, materially adversely affect use of the Property as currently operated or make the title to the Property uninsurable or which impose restrictions on future use of the Property which are not acceptable to Purchaser. Seller shall have the right, but not the duty to cure any such title objections reported by Purchaser. If the Seller is unable or unwilling to cure objections to the Purchaser's satisfaction prior to Settlement then, notwithstanding anything herein to the contrary, the Purchaser shall, at its option, either (i) terminate this Agreement, in which event the Deposit shall be refunded; or (ii) waive such defects and proceed to Settlement, with no reduction in the Purchase Price; provided, however, that all mortgages, deeds of trusts and other monetary liens may be paid at Settlement, and the parties hereby authorize application of the Purchase Price proceeds to effect the same. If any additional matters of record are created after the date of the examination of title contemplated hereby, and prior to Settlement, Purchaser shall have the right to further delay Settlement a reasonable time to permit Seller to complete curative action. Any matters of title or survey not timely objected to by Purchaser or which are reported but not cured by Settlement shall be deemed waived. 10. The Deed. At the time specified in paragraph 8 above for Settlement the Seller shall deliver to Purchaser a Special Warranty Deed (the "Deed") conveying fee simple title to the Property, described according to the applicable legal description attached hereto as Exhibit A, subject to all liens, encumbrances, conditions, restrictions and other matters of record, unless otherwise agreed in writing. 11. Risk of Loss. The risk of loss or damage to the Property by fire or other casualty prior to Settlement thereon shall be on the Seller. If such loss or damage is substantial, materially and adversely affects the Purchaser's intended use and enjoyment of the Property as of Settlement or gives rise to the right of the tenant to terminate the Lease as a result of such casualty, the Purchaser shall have the option to (i) terminate this Agreement and have the Deposit refunded, in which event the parties hereto shall have no further obligations or liabilities to one another hereunder; or (ii) proceed to Settlement with an assignment of any right of Seller in and to the proceeds of insurance. 12. Condemnation. If all or any portion of the Property is subject to actual or threatened taking pursuant to the power of eminent domain prior to Settlement, the Purchaser shall be entitled to elect either to (a) terminate this Agreement and have the Deposit refunded in which event the parties shall have no further obligations hereunder, or (b) proceed to Settlement, in which event, at Purchaser's Option all proceeds, awards and other payments arising from any such taking or sale shall be assigned and paid to the Purchaser. 13. Covenants. (a) Seller's Covenants. Seller covenants and agrees with Purchaser that, prior to Settlement: (i) Seller, as Landlord, shall not violate the provisions of the Lease and shall use reasonable efforts to cause tenant to fully comply with the terms and provisions of the Lease. (ii) Seller shall continue to maintain all of Seller's existing insurance policies relating to the Property, or any part thereof, if any, in full force and effect until the Settlement has occurred, and shall cause tenant to maintain all of tenant's policies relating to the Property as required under the Lease. (iii) Seller shall provide Purchaser with a copy of any written notice hereafter received by Seller relating to any violations or alleged violations of any federal, state or municipal laws, ordinances, rules and regulations affecting the Property, or any pending or threatened actions, proceedings or claims affecting the Property. (iv) From and after the date hereof, Seller shall not (A) make or authorize to be made any alterations to the Property, (B) enter into any agreements, leases or undertakings with respect to the Property or any part thereof, (C) submit or file any applications with governmental authorities to change the zoning or the Property, or (D) record or consent to the recordation of any liens, mortgages, or encumbrances of any kind affecting the Property, except as would be discharged at Settlement, without the prior written consent of Purchaser. 14. Representations and Warranties of the Seller. The Seller represents and warrants as of the date hereof that to the best of its actual knowledge without investigation: (a) Repairs. No governmental agency has served any written notice on the Seller regarding any repairs, alterations or corrections of any existing condition on the Property. (b) Condemnation. There is no pending or threatened proceedings for condemnation or the exercise of the right of eminent domain as to any part of the Property or for the limiting or denying of any right of access thereto. (c) Authorization and Execution. This Agreement has been duly authorized by all necessary action on the part of the Seller and has been duly executed and delivered by the Seller. Seller shall deliver to Purchaser, prior to Settlement, all organizational documents, resolutions, certificates and other materials reasonably required by Purchaser to confirm the foregoing. (d) Hazardous Materials. No hazardous materials, as hereinafter defined, are located on or about the Property nor has Seller used the Property for the storage, manufacture or disposal of hazardous materials. For the purposes of this Agreement, "hazardous materials" shall mean any "hazardous substance", "hazardous waste" and "hazardous material", as defined in the Comprehensive Environmental Response Compensation and Liability Act of 1984, 42 U.S.C. Section 9601 et. seq., as amended, the Resource Conservation and Recovery Act of 1976, as amended, and the Hazardous and Solid Waste Amendment of 1984, as amended, the regulations adopted pursuant thereto and any other federal, state and local law, statute or ordinance or any court or administrative decree or any private agreement with any governmental authority pertaining to hazardous or toxic materials, substances, pollutants, contaminants or waste to Seller's knowledge. (e) Leases. There are no leases, tenancies, licenses or other rights of occupancy or use for any portion of the Property other than the Lease, the Permitted Exceptions and title matters of record. Neither tenant nor Seller is in default in performing its obligations under the Lease. (f) Seller has not entered into any agreements affecting the Property other than the Lease and other matters that would be revealed by inquiry and proper search of the land records and/or zoning and planning records in the local jurisdiction. Except for the foregoing representations, Seller makes no representations or warranties with respect to the Property and Purchaser acknowledges and agrees that the Property is being sold "AS IS, WHERE IS" and that Purchaser is relying on its own inspections, consultants and inquiries with respect to the Property, the Lease and all related matters. The "best of Seller's knowledge" as used herein shall be deemed to mean the actual knowledge, without investigation, of Marvin Bolinger and Dennis Weiss. 15. Representations and Warranties of the Purchaser. The Purchaser represents and warrants as of the date hereof and shall be deemed to represent and warrant as of Settlement that: (a) Organization Purchaser is a corporation duly organized and in good standing under the laws of Minnesota, and has qualified (or will be qualified) to do business in all jurisdictions in which such qualification is necessary to consummate the transactions described herein. (b) Authorization and Execution. The execution, delivery and performance of this Agreement by Purchaser has been duly authorized by all necessary action, if any, as applicable, and has been duly executed and delivered by the Purchaser. This Agreement is enforceable against Purchaser in accordance with its terms and does not conflict with any indenture, operating agreement, bylaw, or any other agreement to which Purchaser is bound. The individual signing on behalf of Purchaser is authorized to act for and on behalf of and to bind Purchaser in connection with this Agreement. (c) Agreements. There is no agreement to which Purchaser is a party or, to Purchaser's knowledge, is binding on Purchaser, which adversely affects Purchaser's ability to perform its obligations under this Agreement. 16. Default. In the event of a default by Purchaser, Seller's sole and exclusive remedy, in lieu of all other remedies, shall be to retain the Deposit as liquidated damages, and Seller hereby specifically waives the right to seek specific performance of this Agreement by Purchaser. If Seller defaults hereunder, Purchaser may terminate this Agreement, in which event the Deposit shall be promptly refunded to Purchaser or Purchaser may seek specific performance of this Agreement as its sole remedy at law or in equity. 17. Agents and Brokers. Each party hereunder represents and warrants that it did not consult or deal with any broker or agent, real estate or otherwise, with regard to this Agreement or the transactions contemplated hereby. Each party hereto agrees to indemnify and hold harmless the other party from all liability, expense, loss, cost or damage, including reasonable attorneys' fees, that may arise by reason of any claim, demand or suit of any agent or broker arising out of facts constituting a breach of the foregoing representations and warranties. 18. Notices. Any notice, request or demand required or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed sufficiently given if delivered by hand by messenger at the address of the intended recipient, sent prepaid by Federal Express (or a comparable guaranteed overnight delivery service), or deposited in the United States first class mail (registered or certified, postage prepaid, with return receipt requested), addressed as follows: For the Purchaser: c/o George Rerat Managing Director of Acquisitions 1300 Wells Fargo Place 30th Seventh Street East St. Paul, MN 55101 Fax No.: (651) 227-7705 Phone No.: (651) 227-7333 Copy to: Robert Johnson, President with a copy to: Michael B. Daugherty, Esquire 30 East Seventh Street Suite 1300 Saint Paul, Minnesota 55101 Fax No.: (612) 677-3181 Phone No.: (612) 720-0777 For the Seller: Silver Capital LLC Sabre Center II, Suite 600 6001 Broken Sound Parkway Boca Raton, FL 33487 Attn: Larry D. Silver Fax No.: (561) 997-1094 Phone No.: (561) 981-5252 with a copy to: Denny Weiss Sabre Center II, Suite 600 6001 Broken Sound Parkway Boca Raton, FL 33487 Fax No.: (561) 997-1094 Phone No.: (561)-981-5252 with a copy to: John W. Steele, Esquire Hirschler Fleischer Federal Reserve Bank Building 701 E. Byrd Street, Floor 16 Richmond, VA 23219 Fax No.: (804) 644-0957 Phone No.: (804) 771-9565 Notice may also be given by facsimile transmission, provided notice is also sent subsequently by one of the methods specified above. Notice shall be deemed given on the date of the receipt if delivered by hand or mail, one day after posting with FedEx or other comparable carrier or upon confirmed facsimile transmission to the party named therein at the applicable fax number above. 19. Applicable Law. This Agreement shall be construed, performed and enforced in accordance with the laws of the State of Illinois. 20. Entire Agreement; Modification. This Agreement contains the entire agreement between the parties hereto relating to the Property and supersedes all prior and contemporaneous negotiations, understandings and agreements, written or oral, between the parties hereto. This Agreement shall not be amended or modified and no waiver of any provision hereof shall be effective unless set forth in a written instrument executed with the same formality as this Agreement. 21. Survival. The provisions of this Agreement shall not survive Settlement hereunder and shall be deemed merged into the deed at Settlement. 22. Time of the Essence. The parties expressly acknowledge and agree that TIME IS OF THE ESSENCE with respect to each and every provision of this Agreement; provided, however, that if the final date of any period which is set out in any provision of this Agreement falls on a Saturday, Sunday or legal holiday under the laws of the United States, then such time period shall be extended to the next day which is not a Saturday, Sunday or legal holiday. 23. Severability. In the event any one or more of the provisions contained in this Agreement are held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had not been contained herein. 24. Captions. Any paragraph headings or captions contained in this Agreement shall be for convenience of reference only and shall not affect the construction or interpretation of any provision of this Agreement. 25. Counterparts. Upon written notice to Seller, this Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. 26. Tax-Free Exchange. The parties acknowledges that Purchaser and/or Seller may wish to close this transaction as part of a tax-free exchange. The parties shall cooperate with the other and take any reasonable actions necessary, including the execution of appropriate documents, to assist the other so to acquire or sell the Property as part of a 1031 deferred exchange provided that: (a) neither party shall not be required to incur any liability or expense in connection with the others exchange; and (b) the exchange does not delay Settlement. 27. Assignment. This Agreement shall not be assignable by Purchaser without Seller's prior written consent, which consent shall not be unreasonably withheld or delayed. Provided, however, if Purchaser shall remain primarily liable hereunder, the Purchaser may assign, with written notice to the Seller, all or a portion of its interest herein to an affiliate of Purchaser. No assignment by Purchaser shall relieve him of his obligations and liabilities hereunder. [SIGNATURE PAGE TO FOLLOW.] IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name pursuant to due authority as of the dates set forth below. PURCHASER: AEI FUND MANAGEMENT, INC., a Minnesota corporation By: /s/ Robert P Johnson Name: Robert P Johnson Title: President Date: September 21, 2005 SELLER: LAFAYETTE VILLAGE, L.L.C., a Virginia limited liability company By /s/ Larry D Silver Title: Larry D. Silver,Member/CEO Date: September 26, 2005 EXHIBIT A Parcel 1: Lot 1 in Meridian Business Campus Phase 2 Unit 8, being a subdivision in Section 16, Township 38 North, Range 9, east of the third principal meridian, according to the plat thereof recorded October 30, 1998 as Document No. R98- 226549, in DuPage County, Illinois. EXHIBIT B 1. Existing survey 2. Existing title policy and copies of all exceptions 3. Existing Phase I Environmental Report 4. Certificate of Occupancy 5. Lease 6. Tenant's insurance information 7. Real estate tax bills for current year