SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: June 30, 1999
Commission file number: 0-14089
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Delaware 93-0926134
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of June 30, 1999 and December 31, 1998
Statements for the Periods ended June 30, 1999 and 1998:
Income 4
Cash Flows 5
Changes in Partners' Capital 6
Notes to Financial Statements 7 - 10
Item 2. Management's Discussion and Analysis
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
BALANCE SHEET
JUNE 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,388,071 $ 108,619
Receivables 7,019 29,698
----------- -----------
Total Current Assets 1,395,090 138,317
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 1,332,838 1,986,854
Buildings and Equipment 3,721,605 4,493,596
Property Acquisition Costs 23,490 0
Accumulated Depreciation (889,723) (1,246,791)
----------- -----------
Net Investments in Real Estate 4,188,210 5,233,659
----------- -----------
Total Assets $ 5,583,300 $ 5,371,976
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 23,871 $ 28,932
Distributions Payable 117,250 116,905
Deferred Income 11,981 15,480
----------- -----------
Total Current Liabilities 153,102 161,317
----------- -----------
DEFERRED INCOME - Net Of Current Portion 0 125,137
PARTNERS' CAPITAL (DEFICIT):
General Partners (9,159) (12,606)
Limited Partners, $1,000 Unit value;
7,500 Units authorized and issued;
7,337 outstanding 5,439,357 5,098,128
----------- -----------
Total Partners' Capital 5,430,198 5,085,522
----------- -----------
Total Liabilities and Partners' Capital $ 5,583,300 $ 5,371,976
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Three Months Ended Six Months Ended
6/30/99 6/30/98 6/30/99 6/30/98
INCOME:
Rent $ 297,901 $ 144,442 $ 468,552 $ 286,698
Investment Income 3,922 14,286 4,790 27,382
--------- --------- --------- ---------
Total Income 301,823 158,728 473,342 314,080
--------- --------- --------- ---------
EXPENSES:
Partnership Administration -
Affiliates 29,573 26,896 59,676 53,870
Partnership Administration
and Property Management -
Unrelated Parties 1,528 6,868 13,500 20,316
Depreciation 33,925 28,405 68,908 58,766
--------- --------- --------- ---------
Total Expenses 65,026 62,169 142,084 132,952
--------- --------- --------- ---------
OPERATING INCOME 236,797 96,559 331,258 181,128
GAIN ON SALE OF REAL ESTATE 274,272 0 274,272 0
--------- --------- --------- ---------
NET INCOME $ 511,069 $ 96,559 $ 605,530 $ 181,128
========= ========= ========= =========
NET INCOME ALLOCATED:
General Partners $ 5,110 $ 966 $ 6,055 $ 1,811
Limited Partners 505,959 95,593 599,475 179,317
--------- --------- --------- ---------
$ 511,069 $ 96,559 $ 605,530 $ 181,128
========= ========= ========= =========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(7,337 weighted average
Units outstanding in 1999
and 1998) $ 68.96 $ 13.03 $ 81.71 $ 24.44
========= ========= ========= =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 605,530 $ 181,128
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 68,908 58,766
Gain on Sale of Real Estate (274,272) 0
(Increase) Decrease in Receivables 22,679 (6,804)
Decrease in Payable to
AEI Fund Management, Inc. (5,061) (13,732)
Increase (Decrease) in Deferred Income (128,636) 6,252
----------- -----------
Total Adjustments (316,382) 44,482
----------- -----------
Net Cash Provided By
Operating Activities 289,149 225,610
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (23,490) (394,174)
Proceeds from Sale of Real Estate 1,274,303 0
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 1,250,813 (394,174)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 345 234
Distributions to Partners (260,854) (260,607)
----------- -----------
Net Cash Used For
Financing Activities (260,509) (260,373)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,279,452 (428,937)
CASH AND CASH EQUIVALENTS, beginning of period 108,619 939,969
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,388,071 $ 511,032
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1997 $ (9,783) $5,377,530 $5,367,747 7,336.55
Distributions (2,606) (258,001) (260,607)
Net Income 1,811 179,317 181,128
--------- ---------- ---------- ----------
BALANCE, June 30, 1998 $(10,578) $5,298,846 $5,288,268 7,336.55
========= ========== ========== ==========
BALANCE, December 31, 1998 $(12,606) $5,098,128 $5,085,522 7,336.55
Distributions (2,608) (258,246) (260,854)
Net Income 6,055 599,475 605,530
--------- ---------- ---------- ----------
BALANCE, June 30, 1999 $(9,159) $5,439,357 $5,430,198 7,336.55
========= ========== ========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Real Estate Fund XV Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management 86-A, Inc. (AFM), the Managing
General Partner of the Partnership. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner of the Partnership. An affiliate
of AFM, AEI Fund Management, Inc. (AEI), performs the
administrative and operating functions for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on October 3, 1986 when minimum
subscriptions of 1,300 Limited Partnership Units
($1,300,000) were accepted. On December 30, 1986, the
Partnership's offering terminated when the maximum
subscription limit of 7,500 Limited Partnership Units
($7,500,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$7,500,000 and $1,000, respectively. During the operation
of the Partnership, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of the Partnership's properties which the General
Partners determine to distribute will, after provisions for
debts and reserves, be paid in the following manner: (i)
first, 99% to the Limited Partners and 1% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 6% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) next, 99% to
the Limited Partners and 1% to the General Partners until
the Limited Partners receive an amount equal to 14% of their
Adjusted Capital Contribution per annum, cumulative but not
compounded, to the extent not previously distributed; (iii)
next, to the General Partners until cumulative distributions
to the General Partners under Items (ii) and (iii) equal 15%
of cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's
property, will be allocated first in the same ratio in
which, and to the extent, Net Cash Flow is distributed to
the Partners for such year. Any additional profits will be
allocated 90% to the Limited Partners and 10% to the General
Partners. In the event no Net Cash Flow is distributed to
the Limited Partners, 90% of each item of Partnership
income, gain or credit for each respective year shall be
allocated to the Limited Partners, and 10% of each such item
shall be allocated to the General Partners. Net losses from
operations will be allocated 98% to the Limited Partners and
2% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's property will be
allocated in accordance with the Partnership Agreement as
follows: (i) first, to those Partners with deficit balances
in their capital accounts in an amount equal to the sum of
such deficit balances; (ii) second, 99% to the Limited
Partners and 1% to the General Partners until the aggregate
balance in the Limited Partners' capital accounts equals the
sum of the Limited Partners' Adjusted Capital Contributions
plus an amount equal to 14% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, to the
General Partners until cumulative allocations to the General
Partners equal 15% of cumulative allocations. Any remaining
balance will be allocated 85% to the Limited Partners and
15% to the General Partners. Losses will be allocated 98%
to the Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the Partnership
or withdrawal by a General Partner, the General Partners
will contribute to the Partnership an amount equal to the
lesser of the deficit balances in their capital accounts or
1% of total Limited Partners' and General Partners' capital
contributions.
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
On December 23, 1997, the Partnership purchased a 26.05%
interest in a parcel of land in Troy, Michigan for $393,620.
The land is leased to Champps Entertainment, Inc. (Champps)
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $27,553. Effective June 20, 1998,
the annual rent was increased to $41,330. Simultaneously
with the purchase of the land, the Partnership entered into
a Development Financing Agreement under which the
Partnership advanced funds to Champps for the construction
of a Champps Americana restaurant on the site. Initially,
the Partnership charged interest on the advances at a rate
of 7.0%. Effective June 20, 1998, the interest rate was
increased to 10.50%. On September 3, 1998, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $133,356. The
Partnership's share of the total acquisition costs,
including the cost of the land, was $1,330,265. The
remaining interests in the property are owned by AEI Real
Estate Fund XVII Limited Partnership, AEI Real Estate Fund
XVIII Limited Partnership and AEI Net Lease Income & Growth
Fund XIX Limited Partnership, affiliates of the Partnership.
The Partnership owned a 44.9042% interest in a restaurant in
Waco, Texas, which was previously closed. In June 1995, the
Partnership re-leased the restaurant to Tex-Mex Cocina of
Waco, L.C. The Lease Agreement had a primary term of
eighteen months with an annual rental payment of $24,248.
In December, 1997, the lessee elected not to exercise the
renewal option in the lease. The restaurant was closed and
listed for sale or lease. While the property was vacant,
the Partnership was responsible for the real estate taxes
and other costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of
the Partnership's interest in the Waco property was
approximately $314,400. In the fourth quarter of 1997, a
charge to operations for real estate impairment of $80,300
was recognized, which is the difference between the book
value at December 31, 1997 of $394,700 and the estimated
fair value of $314,400. The charge was recorded against the
cost of the land and building. In December, 1998, the
Partnership re-analyzed the market conditions in the area
and determined the fair value of the Partnership's interest
declined to approximately $126,000. In the fourth quarter
of 1998, a charge to operations for real estate impairment
of $180,000 was recognized, which is the difference between
the book value at December 31, 1998 of $306,000 and the
estimated fair value of $126,000. The charge was recorded
against the cost of the land and building.
In March, 1999, the Partnership entered into an agreement to
sell the Waco property to an unrelated third party. On May
10, 1999, the sale closed with the Partnership receiving net
sale proceeds of $128,879 which resulted in a net gain of
$4,228. At the time of sale, the cost and related
accumulated depreciation was $287,710 and $163,059,
respectively.
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
In February, 1999, the Partnership entered into an agreement
to sell the Fuddruckers property to an unrelated third
party. On June 16, 1999, the sale closed with the
Partnership receiving net sale proceeds of $1,145,424 which
resulted in a net gain of $270,044. At the time of sale,
the cost and related accumulated depreciation was $1,138,297
and $262,917, respectively.
On July 14, 1999, the Partnership purchased a Children's
World daycare center in West Chester, Ohio for approximately
$1,022,000. The property is leased to ARAMARK Educational
Resources, Inc. under a Lease Agreement with a primary term
of 15 years and annual rental payments of $93,162. The
Partnership has incurred net costs of $23,490 related to the
acquisition of the property. The costs have been
capitalized and will be allocated to land, building and
equipment.
(4) Payable to AEI Fund Management -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
(5) Deferred Income -
In June, 1994, Fuddruckers, Inc., the restaurant concept's
franchisor, acquired the operations of the Fuddruckers
restaurant in St. Louis, Missouri, and assumed the lease
obligations from the original lessee. As part of the
agreement, the Partnership amended the Lease to reduce the
annual base rent from $163,550 to $138,246. In
consideration for the lease assumption and amendment, the
Partnership received a lump sum payment from the original
lessee of $210,277. The lump sum payment was recognized as
income over the Lease term, which was scheduled to expire
January 31, 2008, using the straight line method. As of
March 31, 1999 and December 31, 1998, the Partnership had
recognized $73,530 and $69,660, respectively, of this
payment as income. On June 16, 1999, the Partnership sold
the Fuddruckers restaurant and the Lease Agreement was
terminated. As a result, the Partnership recognized the
balance of the deferred income of $136,747 in the second
quarter of 1999. At June 30, 1999, deferred income of
$11,981 was prepaid rent related to certain other
Partnership properties.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the six months ended June 30, 1999 and 1998, the
Partnership recognized rental income of $468,552 and $286,698,
respectively. During the same periods, the Partnership earned
investment income of $4,790 and $27,382, respectively. In 1999,
rental income increased as a result of rental income received
from the Champps Americana restaurant and deferred income
recognized as a result of the sale of the Fuddruckers restaurant
discussed below. The increase in rental income was partially
offset by a decrease in investment income earned on net sale
proceeds prior to the purchase of the additional property.
The Partnership owned a 44.9042% interest in a restaurant
in Waco, Texas, which was previously closed. In June 1995, the
Partnership re-leased the restaurant to Tex-Mex Cocina of Waco,
L.C. The Lease Agreement had a primary term of eighteen months
with an annual rental payment of $24,248. The Partnership could
also receive additional rent if gross receipts from the property
exceeded certain specified amounts. In December, 1997, the
lessee elected not to exercise the renewal option in the lease.
The restaurant was closed and listed for sale or lease. While
the property was vacant, the Partnership was responsible for the
real estate taxes and other costs required to maintain the
property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of the
Partnership's interest in the Waco property was approximately
$314,400. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $80,300 was recognized, which is
the difference between the book value at December 31, 1997 of
$394,700 and the estimated fair value of $314,400. The charge
was recorded against the cost of the land and building. In
December, 1998, the Partnership re-analyzed the market conditions
in the area and determined the fair value of the Partnership's
interest declined to approximately $126,000. In the fourth
quarter of 1998, a charge to operations for real estate
impairment of $180,000 was recognized, which is the difference
between the book value at December 31, 1998 of $306,000 and the
estimated fair value of $126,000. The charge was recorded
against the cost of the land and building.
In March, 1999, the Partnership entered into an agreement
to sell the Waco property to an unrelated third party. On May
10, 1999, the sale closed with the Partnership receiving net sale
proceeds of $128,879 which resulted in a net gain of $4,228. At
the time of sale, the cost and related accumulated depreciation
was $287,710 and $163,059, respectively.
During the six months ended June 30, 1999 and 1998, the
Partnership paid Partnership administration expenses to
affiliated parties of $59,676 and $53,870, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $13,500 and $20,316, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
As of June 30, 1999, the Partnership's annualized cash
distribution rate was 7.5%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants, due to inflation and real sales growth, will result
in an increase in rental income over the terms of the leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
The Year 2000 issue is the result of computer systems that
use two digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and has
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership intends to monitor and communicate with
tenants regarding Year 2000 compliance, although there can be no
assurance that the systems of the various tenants will be Year
2000 compliant.
Liquidity and Capital Resources
During the six months ended June 30, 1999, the
Partnership's cash balances increased $1,279,452 mainly as a
result of cash generated from the sale of two properties. Net
cash provided by operating activities increased from $225,610 in
1998 to $289,149 in 1999 mainly as a result of an increase in
income in 1999, which was partially offset by net timing
differences in the collection of payments from the lessees and
the payment of expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the six months ended June
30, 1999, the Partnership generated cash flow from the sale of
real estate of $1,274,303. During the six months ended June 30,
1999 and 1998, the Partnership expended $23,490 and $394,174,
respectively, to invest in real properties (inclusive of
acquisition expenses) as the Partnership reinvested the cash
generated from the property sales.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On December 23, 1997, the Partnership purchased a 26.05%
interest in a parcel of land in Troy, Michigan for $393,620. The
land is leased to Champps Entertainment, Inc. (Champps) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $27,553. Effective June 20, 1998, the annual rent
was increased to $41,330. Simultaneously with the purchase of
the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to Champps
for the construction of a Champps Americana restaurant on the
site. Initially, the Partnership charged interest on the
advances at a rate of 7.0%. Effective June 20, 1998, the
interest rate was increased to 10.50%. On September 3, 1998,
after the development was completed, the Lease Agreement was
amended to require annual rental payments of $133,356. The
Partnership's share of the total acquisition costs, including the
cost of the land, was $1,330,265. The remaining interests in the
property are owned by AEI Real Estate Fund XVII Limited
Partnership, AEI Real Estate Fund XVIII Limited Partnership and
AEI Net Lease Income & Growth Fund XIX Limited Partnership,
affiliates of the Partnership.
In February, 1999, the Partnership entered into an
agreement to sell the Fuddruckers property to an unrelated third
party. On June 16, 1999, the sale closed with the Partnership
receiving net sale proceeds of $1,145,424 which resulted in a net
gain of $270,044. At the time of sale, the cost and related
accumulated depreciation was $1,138,297 and $262,917,
respectively.
In June, 1994, the Partnership received a lump sum payment
of $210,277 as compensation for certain modifications made to the
Fuddruckers' Lease. The lump sum payment was recognized as
income over the Lease term using the straight line method. As a
result of the sale, the Lease Agreement was terminated and the
Partnership recognized the balance of the deferred income of
$136,747 in the second quarter of 1999.
On July 14, 1999, the Partnership purchased a Children's
World daycare center in West Chester, Ohio for approximately
$1,022,000. The property is leased to ARAMARK Educational
Resources, Inc. under a Lease Agreement with a primary term of 15
years and annual rental payments of $93,162.
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter.
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1999 and 1998, the Partnership did not redeem any
Units from the Limited Partners. In prior years, a total of
twenty-one Limited Partners redeemed 163.5 Units for $115,460.
The redemptions increase the remaining Limited Partners'
ownership in the Partnership.
The continuing rent payments from the properties, together
with cash generated from the property sales, should be adequate
to fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated March 24,
1999 between the Partnership, AEI Real
Estate Fund XVI Limited Partnership and
Tom Salome relating to the property at
1812 North Valley Mills Drive, Waco,
Texas.
10.2 Purchase Agreement dated February 4,
1999 between the Partnership, AEI Real
Estate Fund XVI Limited Partnership and
Elizabeth Cockrum relating to the
property at 2175 Barrett Station Road,
St. Louis, Missouri (incorporated by
reference to Exhibit 10.1 of Form 8-K
filed with the Commission on June 21,
1999).
10.3 Amendment to Purchase Agreement
dated May 19, 1999 between the
Partnership, AEI Real Estate Fund XVI
Limited Partnership and Elizabeth Cockrum
relating to the property at 2175 Barrett
Station Road, St. Louis, Missouri
(incorporated by reference to Exhibit
10.2 of Form 8-K filed with the
Commission on June 21, 1999).
10.4 Purchase and Sale Agreement and
Escrow Instructions dated May 20, 1999
between AEI Fund Management, Inc. and
ARAMARK Educational Resources, Inc.
relating to the property at 7236 Tylers
Corner, West Chester, Ohio (incorporated
by reference to Exhibit 10.1 of Form 8-K
filed with the Commission on July 26,
1999).
PART II - OTHER INFORMATION
(Continued)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (Continued)
a. Exhibits -
Description
10.5 Second Assignment of Purchase and
Sale Agreement and Escrow Instructions
dated June 18, 1999 between the
Partnership, AEI Fund Management, Inc.
and ARAMARK Educational Resources, Inc.
relating to the property at 7236 Tylers
Corner, West Chester, Ohio (incorporated
by reference to Exhibit 10.2 of Form 8-K
filed with the Commission on July 26,
1999).
10.6 Net Lease Agreement dated July 14,
1999 between the Partnership and ARAMARK
Educational Resources, Inc. relating to
the property at 7236 Tylers Corner, West
Chester, Ohio (incorporated by reference
to Exhibit 10.3 of Form 8-K filed with
the Commission on July 26, 1999).
27 Financial Data Schedule for period
ended June 30, 1999.
b. Reports filed on Form 8-K -
During the quarter ended June 30,
1999, the Partnership filed a From
8-K dated June 21, 1999 reporting
the disposition of the Fuddruckers
restaurant in St. Louis, Missouri.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: July 30, 1999 AEI Real Estate Fund XV
Limited Partnership
By: AEI Fund Management 86-A, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
PURCHASE AGREEMENT
1812 N Valley Mills
Waco, TX 76710
This AGREEMENT, entered into effective as of the 24th of March,
1999.
l. PARTIES. Sellers are AEI Real Estate Fund XV Limited
Partnership and AEI Real Estate Fund XVI Limited Partnership
(collectively "Seller"). AEI Real Estate Fund XV Limited
Partnership holds an undivided 44.9042% and AEI Real Estate Fund
XVI Limited Partnership holds an undivided 55.0958% interest in
the fee title to that certain real property legally described in
the attached Exhibit "A" (the "Property"). Buyer is Tom Salome,
and/or its assigns ("Buyer"). Seller wishes to sell and Buyer
wishes to buy the Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
is legally described on Exhibit "A" attached hereto, subject to
all easements, covenants, conditions, restrictions and agreements
of record that do not affect marketability of title or affect
adversely the use of the Property ("Permitted Exceptions"),
subject to the provisions of Buyer review of title as set forth
below in paragraph 8.
3. PURCHASE PRICE. The purchase price for this Property is
$310,000 cash plus $50 independent consideration, based on the
following terms:
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $10,000
in cash or good funds (the "First Payment") to Chicago Title
Insurance Company, attention Mary Furgason, 14607 San Pedro
Avenue, Suite 175, San Antonio, TX 78232("Escrowee"). The First
Payment will be credited against the purchase price when and if
escrow closes and the sale is completed, or otherwise
disbursed pursuant to the terms of this Agreement. After the
expiration of the Review Period as defined in paragraph 6 below,
the First Payment held for the account of Seller shall become
non-refundable.
(b) Buyer will pay the balance of purchase price for the
Property, $300,000 in cash or good funds (the "Second
Payment"), at closing to the Escrowee who shall close the
transaction according to the terms hereof.
(c) When this Agreement is executed, Buyer will also pay $50
in cash in good funds directly to Seller ("Option
Consideration"), which shall be in consideration for Seller's
execution of this Agreement, but will be credited against the
purchase price when and if escrow closes and the sale is
completed. The Option Consideration shall be considered non-
refundable if this Agreement is terminated for any reason.
5. CLOSING DATE. Escrow shall close on or before the fifteenth
day after the Inspection and Feasibility Study is completed.
6. DUE DILIGENCE. Buyer will have until the expiration of the
thirtieth day after delivery of the signed "Agreement" (the
"Inspection and Feasibility Study Period"), to conduct all of its
inspections and due diligence and satisfy itself regarding title
to the Property, and to inspect the Property. Buyer agrees to
indemnify and hold 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. Buyer expressly
acknowledges that the sale of the Property as provided for herein
is made on an "AS IS" basis, and such provision shall survive
closing.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice by certified mail,
return receipt requested, or by personal delivery to Seller and
escrow holder before the expiration of the Inspection and
Feasibility Study Period or Inspection Period as defined in
Section 16. Such notice shall be deemed effective only upon
receipt by Seller. If this Agreement is not canceled as set forth
herein, the First Payment shall be non-refundable unless Seller
shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section or Section 16, except for any title insurance and/or
escrow cancellation fees of the escrowee which will be paid by
the Buyer, and any liabilities under sections 15(a)(iii) and
16(b) of this Agreement (which will survive), Buyer (after
execution of such documents reasonably requested by Seller to
evidence the termination hereof) shall be returned 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 Seller shall be in default of any obligation
hereunder, or 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 have canceled this Agreement and
relinquish all rights in and to the Property. If this Agreement
is not canceled 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 Buyer and the First Payment
shall be deposited by Buyer with Escrowee. 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. The parties
agree to sign these additional instructions of the Escrowee, if
any. If there is any conflict between these other instructions
and this Agreement, this Agreement will control.
8. TITLE. Closing will be conditioned on the commitment of a
nationally recognized 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 marketable and insurable fee simple title to the
Property subject only to: the Permitted Exceptions as defined in
paragraph 2 above; current real property taxes and assessments;
and survey exceptions.
Buyer shall be allowed until the expiration of the
"Inspection and Feasibility Study Period" for examination and the
making of any objections to marketability of title thereto, or
that an exception to title adversely affects the use of the
Property, said objections to be made in writing or deemed waived.
If any objections are so made, the Seller shall be allowed sixty
(60) days to make such title marketable or cure Buyer's
objections, 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
shall be returned and this agreement shall be null and void and
of no further force and effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this agreement according to its terms.
If Buyer shall make no written objection to Seller within
the Review Period setting forth Buyer's objections to the status
of title, Buyer shall have been deemed to have waived any such
objections.
9. CLOSING COSTS. Seller will pay the deed stamp taxes, if any,
and one-half of escrow fees attributable to the closing services
for this transaction, and any brokerage commissions payable to
Jim Stewart, Realtors only. Seller shall pay for the cost of
issuing the title policy. Buyer will pay all recording fees, one-
half of the escrow fees, the costs of an update to the Survey in
Seller's possession (if an update is required by Buyer). Each
party will pay its own attorneys' fees and costs to document and
close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
Seller represents that to the best of its knowledge, all real
estate taxes and assessments due and payable in all years prior
to the year of Closing have been paid in full. Responsibility
for real estate taxes and special assessments shall be prorated
as of the date of closing based upon the most recently available
tax bill with no readjustment for the taxes due for the year in
which closing shall occur. All real estate taxes and special
assessments due and payable in the years following the year in
which closing occurs shall otherwise be the responsibility of
Buyer.
11. SELLER'S REPRESENTATION AND AGREEMENTS.
Seller represents and warrants as of this date that:
(i) The Property is not subject to any leases.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property that have not been disclosed to
Buyer.
(iii) It is not aware of any contracts affecting this
Property and potentially or actually binding on Buyer after
the closing date.
(iv) 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.
12. DISCLOSURES.
(a) Seller has been an absentee landlord. Consequently,
Seller has little, if any, knowledge of the physical
characteristics of the Property.
Accordingly, except as otherwise specifically stated in the
Agreement, Seller hereby specifically disclaims any
warranty, guaranty, or representation, oral or written,
past, present, or future of, as to, or concerning (i) the
nature and condition of the Property, including, without
limitation, the water, soil, and geology, and the
suitability thereof and of the Property for any and all
activities and uses which Buyer may elect to conduct
thereon; (ii) except for the warranty of title contained in
the Deed to be delivered by Seller at the closing, the
nature and extent of any right of way, lease, possession,
lien, encumbrance, license, reservation, condition, or
otherwise, and (iii) the compliance of the Property or its
operation with any laws, ordinances, or regulations of any
government or other body.
(b) This Agreement is subject to an inspection contingency
as set forth in Section 16. Buyer acknowledges and agrees
that Buyer is not relying upon any representation or
warranties made by Seller or Seller's Agent.
(c) Buyer acknowledges that, having been given the
opportunity to inspect the Property, 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 expressly acknowledges that, in
consideration of the agreements of the Seller herein, except
as otherwise specified herein, Seller makes no Warranty or
representation, express or implied, or arising by operation
of law, including, but not limited to, any warranty or
condition, habitability, tenantability, suitability for
commercial purposes, merchantability, profitability, or
fitness for a particular purpose, in respect of the
Property.
(d) BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN
ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER HAS
NO OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
THEREON, OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ALSO
AGREES THAT SELLER WILL HAVE NO LIABILITY OF ANY TYPE,
DIRECT OR INDIRECT, TO BUYER OR BUYER'S SUCCESSORS, ASSIGNS,
LENDERS OR AFFILIATES IN CONNECTION WITH ANY HAZARDOUS,
TOXIC, DANGEROUS, FLAMMABLE, EXPLOSIVE OR CHEMICAL
SUBSTANCES OF ANY TYPE (WHETHER OR NOT DEFINED AS SUCH UNDER
ANY APPLICABLE LAWS) ON OR IN CONNECTION WITH THE PROPERTY
EITHER BEFORE OR AFTER THE CLOSING DATE.
The provisions (a) through (d) shall survive closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into escrow
an executed special warranty deed subject to Permitted
Exceptions conveying insurable title of the Property to
Buyer. At Closing, Seller shall deliver to Buyer a standard
Seller's Affidavit regarding liens and judgments.
(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 sign and
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.
14. 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 (First, and if made, the
final Payments) heretofore paid by the Buyer. Seller shall
retain all remedies available to Seller at law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance 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 paid the First Payment, performed
all of its other obligations and satisfied all conditions under
this Agreement, and unconditionally notifies Seller that it
stands ready to tender full performance, purchase the Property
and close escrow as per this Agreement. Provided, however, that
in no event shall Seller be liable for any consequential,
punitive or speculative damages arising out of any default by
Seller hereunder.
15. BUYER'S REPRESENTATIONS AND WARRANTIES.
a. Buyer represents and warrants to Seller as follows:
(i) 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.
(ii) 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.
(iii) Buyer agrees to indemnify and hold Seller harmless
from any and all claim of any persons or entities claiming a
brokerage or other fee arising out of representation of
Buyer.
16. PROPERTY INSPECTION AND ENVIRONMENTAL.
(a) Seller shall provide Buyer access to the Property from
time to time for the purpose of conducting inspections
thereof including mechanical, structural, electrical and
other physical inspections. Buyer has until thirty (30) days
after the signing of the agreement by Seller to complete
such physical inspection (the "Inspection and Feasibility
Study").
(b) Buyer shall indemnify, defend, and hold harmless Seller
from and against any and all losses, claims, causes of
action, liabilities, and costs to the extent caused by the
actions of Buyer, its agents, employees, contractors, or
invitees, during any such entry upon the Property. The
foregoing duty of indemnification shall include the duty to
pay all reasonable attorney's fees incurred by the Seller in
responding to or defending any such claims or proceedings.
(c) Buyer shall pay for any Phase I Environmental studies it
wants to be performed on the Property. If Buyer desires a
Phase I Environmental, Buyer shall obtain and review the
same within thirty (30) days from the date this agreement is
signed by Seller. The Buyer may terminate this Agreement
within said thirty (30) day period and receive a full refund
of the Earnest Money. However, if Buyer terminates, Buyer
prior to termination will provide Seller with copies of all
reports and test results Buyer had performed on the
Property.
(d) Seller shall provide Buyer the most recent inspection in
Seller's possession performed on the Property by Kizer
Inspection Service on February 18, 1999.
17. 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
$20,000, 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 period provided for above in this Subparagraph 17a 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 resulting from said damage or destruction to the
extent that the same are payable with respect to damage to
the Property.
If the cost of repair is less than $20,000.00, 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 in relation to the
Property.
(b) If, prior to closing, the Property, or any part thereof,
is taken (other than as disclosed in writing to Buyer prior
to the date of this Agreement) by eminent domain, this
Agreement shall become null and void, at Buyer's option. If
Buyer elects to proceed and 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 all the Seller's right, title, and interest in and to
any award made, or to be made, in the condemnation
proceeding in relation to the Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 17(a) or 17(b), 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).
18. SELLER'S AND BUYER'S BROKERS. Other than Jim Stewart,
Realtors, whose six percent (6%) commission is to be paid solely
by Seller, both parties represent and warrant that no other
broker has been involved on behalf of the warranting party, and
both parties agree to indemnify the other and hold harmless from
any claim through or on behalf of such other party.
19. CANCELLATION If any party elects to cancel this Contract
because of any breach by another party, 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 canceled 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 canceled.
20. 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 through no fault of
Seller, by the fifteenth day after the completion of the
Inspection and Feasibility Study, Seller may either, at its
election, extend the closing date, exercise any remedy
available to it by law, including but not limited to
terminating this Agreement.
(c) Funds to be deposited or paid by Buyer will 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 Real Estate Fund XV Limited Partnerships
AEI Real Estate Fund XVI Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
Tom Salome
c\o Brad Davis, CCIM
Jim Stewart, Realtors
500 North Valley Mills Drive
Waco, TX 76710
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 along with the Option Consideration, and
delivering a copy of this Agreement signed by Buyer and the
$10,000.00 First Payment to Escrowee; Escrowee shall sign below
acknowledging receipt of this Agreement signed by Buyer and the
First Payment, which, will be deposited in to escrow by Escrowee.
Seller has five (5) business days after receipt of the executed
offer, Option Consideration, and acknowledgment of receipt of the
First Payment by Escrowee within which to accept this offer; if
not accepted by Seller, Escrowee shall immediately return the
First Payment to Buyer and Seller shall refund the Option
Consideration directly to Buyer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
Tom Salome
By: /s/ Tom Salome
Its:
SELLER:
AEI REAL ESTATE FUND XV LIMITED PARTNERSHIP, a Delaware
limited partnership.
By: AEI Fund Management 86-A, Inc., its corporate general
partner
By: /s/ Mark E Larson
Its: Chief Financial Officer
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP, a Minnesota
limited partnership.
By: AEI Fund Management XVI, Inc., its corporate general
partner
By: /s/ Mark E Larson
Its: Chief Financial Officer
ESCROWEE:
The Title Company hereby acknowledges receipt of a fully
executed copy of this Agreement and the First Payment referred to
in the Agreement on 2/19/99, 1999, and agrees to accept, hold,
deliver and disburse the First Payment and Second Payment,
together with all interest accrued thereon and received by the
Title Company, strictly in accordance with the terms and
provisions of this Agreement. In performing any of its duties
hereunder, the Title Company shall not incur any liability to
anyone for any damages, losses or expenses, except for
negligence, willful default or breach of trust, and it shall
accordingly not incur any liability with respect (i) to any
action taken or omitted in good faith upon advice of its counsel,
or (ii) to any action taken or omitted in reliance upon any
instrument, including any written notice or instruction provided
for in this Agreement, not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which
the Title Company shall in good faith believe to be genuine, to
have been signed or presented by a proper person or persons and
to conform with the provisions of this Agreement. Seller and
Buyer hereby agree to indemnify and hold harmless the Title
Company against any and all losses, claims, damages, liabilities
and expenses, imposed upon the Title Company or incurred by the
Title Company in connection with its acceptance or the
performance of its duties hereunder, including any litigation
arising from this Agreement or involving the subject matter
hereof, unless such losses, claims, damages, liabilities and
expenses arise out of Title Company's negligence, willful default
or breach of trust. In the event of a dispute between Seller and
Buyer sufficient in the discretion of the Title Company to
justify its doing so, the Title Company shall be entitled to
tender into the registry of the District Court of McLennan
County, Texas, all money or property in its hands under this
Agreement, together with such legal pleadings as it deems
appropriate, and thereupon be discharged from all further duties
and liabilities under this Agreement. Seller and Buyer shall
bear all costs and expenses of such legal proceedings.
Chicago Title Insurance Company
By: /s/ Mary Furgason
EXHIBITA "A"
Legal Description
Lot 3, Block 1 of the Skaggs Addition Part 2 to the City of Waco,
McLennan County, Texas, Plat Recorded in Volume 1296, Page 678 of
the McLennan County, Texas Deed Records.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000793631
<NAME> AEI REAL ESTATE FUND XV LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,388,071
<SECURITIES> 0
<RECEIVABLES> 7,019
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<CURRENT-ASSETS> 1,395,090
<PP&E> 5,077,933
<DEPRECIATION> (889,723)
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<CURRENT-LIABILITIES> 153,102
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,430,198
<TOTAL-LIABILITY-AND-EQUITY> 5,583,300
<SALES> 0
<TOTAL-REVENUES> 473,342
<CGS> 0
<TOTAL-COSTS> 142,084
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 605,530
<INCOME-TAX> 0
<INCOME-CONTINUING> 605,530
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 605,530
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