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, 1997
Commission file number: 0-18289
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1622463
(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)
(612) 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 XVIII LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of June 30, 1997 and December 31, 1996
Statements for the Periods ended June 30, 1997 and 1996:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
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 XVIII LIMITED PARTNERSHIP
BALANCE SHEET
JUNE 30, 1997 AND DECEMBER 31, 1996
(Unaudited)
ASSETS
1997 1996
CURRENT ASSETS:
Cash and Cash Equivalents $ 3,791,718 $ 2,359,926
Receivables 2,214 12,870
----------- -----------
Total Current Assets 3,793,932 2,372,796
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 3,894,201 4,374,569
Buildings and Equipment 8,457,354 9,198,045
Accumulated Depreciation (1,802,857) (1,706,567)
----------- -----------
10,548,698 11,866,047
Real Estate Held for Sale 772,958 792,877
----------- -----------
Net Investments in Real Estate 11,321,656 12,658,924
----------- -----------
Total Assets $15,115,588 $15,031,720
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 5,010 $ 121,697
Distributions Payable 323,835 323,784
Security Deposit 0 665
Unearned Rent 50,713 5,000
----------- -----------
Total Current Liabilities 379,558 451,146
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (48,104) (49,658)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 22,783 Issued;
21,764 Units outstanding 14,784,134 14,630,232
----------- -----------
Total Partners' Capital 14,736,030 14,580,574
----------- -----------
Total Liabilities and Partners' Capital $15,115,588 $15,031,720
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Three Months Ended Six Months Ended
6/30/97 6/30/96 6/30/97 6/30/96
INCOME:
Rent $ 340,839 $ 415,175 $ 704,088 $ 814,363
Investment Income 51,941 24,573 86,606 53,890
---------- ---------- ---------- ----------
Total Income 392,780 439,748 790,694 868,253
---------- ---------- ---------- ----------
EXPENSES:
Partnership Administration -
Affiliates 71,334 54,374 134,031 121,243
Partnership Administration
and Property Management -
Unrelated Parties 24,126 71,697 49,747 99,347
Depreciation 78,993 107,802 160,539 211,399
---------- ---------- ---------- ----------
Total Expenses 174,453 233,873 344,317 431,989
---------- ---------- ---------- ----------
OPERATING INCOME 218,327 205,875 446,377 436,264
GAIN ON SALE OF REAL ESTATE 0 254,305 376,462 254,305
MINORITY INTEREST IN
OPERATING INCOME 0 (5,687) 0 (7,714)
---------- ---------- ---------- ----------
NET INCOME $ 218,327 $ 454,493 $ 822,839 $ 682,855
========== ========== ========== ==========
NET INCOME ALLOCATED:
General Partners $ 2,183 $ 4,545 $ 8,228 $ 6,829
Limited Partners 216,144 449,948 814,611 676,026
---------- ---------- ---------- ----------
$ 218,327 $ 454,493 $ 822,839 $ 682,855
========== ========== ========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(21,764 and 22,078 weighted average
Units outstanding in 1997
and 1996, respectively) $ 9.93 $ 20.38 $ 37.43 $ 30.62
========== ========== ========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 822,839 $ 682,855
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 160,539 211,399
Gain on Sale of Real Estate (376,462) (254,305)
Decrease in Receivables 10,656 22,791
Increase (Decrease) in Payable to
AEI Fund Management, Inc. (116,687) 53,207
Increase (Decrease) in Security Deposit (665) 60,626
Increase in Unearned Rent 45,713 0
Minority Interest 0 (3,236)
----------- -----------
Total Adjustments (276,906) 90,482
----------- -----------
Net Cash Provided By
Operating Activities 545,933 773,337
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate 0 (1,089,986)
Proceeds from Sale of Real Estate 1,553,191 962,297
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 1,553,191 (127,689)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable 51 (82,544)
Distributions to Partners (667,383) (667,385)
----------- -----------
Net Cash Used For
Financing Activities (667,332) (749,929)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 1,431,792 (104,281)
CASH AND CASH EQUIVALENTS, beginning of period 2,359,926 2,332,974
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 3,791,718 $ 2,228,693
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII 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, 1995 $ (29,971) $16,380,078 $16,350,107 22,077.80
Distributions (6,674) (660,711) (667,385)
Net Income 6,829 676,026 682,855
---------- ----------- ----------- -----------
BALANCE, June 30, 1996 $ (29,816) $16,395,393 $16,365,577 22,077.80
========== =========== =========== ===========
BALANCE, December 31, 1996 $ (49,658) $14,630,232 $14,580,574 21,764.38
Distributions (6,674) (660,709) (667,383)
Net Income 8,228 814,611 822,839
---------- ----------- ----------- -----------
BALANCE, June 30, 1997 $ (48,104) $14,784,134 $14,736,030 21,764.38
========== =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(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 XVIII Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVIII, 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., 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 February 15, 1989 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The Partnership's offering
terminated December 4, 1990 when the extended offering
period expired. The Partnership received subscriptions for
22,783.05 Limited Partnership Units ($22,783,050).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$22,783,050, 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 XVIII 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 XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
The Partnership owns a 4.1022% interest in a Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a
Sizzler restaurant in Springboro, Ohio, and a 100% interest
in a Sizzler restaurant in Fairfield, Ohio. In November,
1993, after reviewing the lessee's operating results, the
Partnership determined that the lessee would be unable to
operate the restaurants in a manner capable of maximizing
the restaurants' sales. Consequently, at the direction of
the Partnership, a multi-unit restaurant operator assumed
operation of the restaurants while the Partnership reviewed
the available options. In January, 1994 and June, 1994, the
Partnership closed the restaurants in Cincinnati and
Springboro, respectively, and listed them for sale or lease.
While the properties are vacant, the Partnership is
responsible for the real estate taxes and other costs
required to maintain the properties.
On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield to Fairfield Foods, Inc. (Fairfield) under a Lease
Agreement with a primary term of 20 years and annual rental
payments based on a percentage of sales. Fairfield was not
able to profitably operate the restaurant and closed the
restaurant.
No rents were collected from the Sizzler restaurants in the
first six months of 1997 and 1996. The total amount of rent
not collected in 1997 and 1996 was $198,471 and $196,614,
respectively, for the three properties. These amounts were
not accrued for financial reporting purposes.
On January 23, 1997, the Partnership sold its interest in
the Cincinnati restaurant to an unrelated third party. The
Partnership received net sales proceeds of $19,867, which
resulted in a net loss of $31,700, which was recognized as a
real estate impairment in the fourth quarter of 1996.
In December, 1996, the Partnership, in order to avoid
additional property management expenses, decided to sell the
Sizzler properties in Springboro and Fairfield rather than
to continue to attempt to re-lease the properties. As a
result, the properties were reclassified on the balance
sheet to Real Estate Held for Sale. In addition, based on
an analysis of market conditions in the area, it was
determined that a sale of the properties would result in net
proceeds of approximately $800,000. The Partnership's share
of the proceeds would be approximately $773,000. A charge
to operations for real estate impairment of $1,654,600
($693,500 for the Springboro Sizzler, and $961,100 for the
Fairfield Sizzler) was recognized in the fourth quarter of
1996, which is the difference between book value at
December31, 1996 of $2,427,600 ($1,066,500 for the
Springboro Sizzler and $1,361,100 for the Fairfield Sizzler)
and the estimated market value of $773,000 ($373,000 for the
Springboro Sizzler and $400,000 for the Fairfield Sizzler).
The charge was recorded against the cost of the land,
building and equipment.
In May, 1997, the Partnership entered into an agreement to
sell the Sizzler restaurant in Fairfield, Ohio to an
unrelated third party. The sale price will be approximately
$530,000, which is in excess of the book value of the
property after the recognition of the real estate
impairment. As a result, the Partnership will recognize a
net gain of approximately $130,000.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
In August, 1995, the lessee of the two Rally's properties
filed for reorganization. After reviewing the operating
results of the lessee, the Partnership agreed to amend the
Leases of the two properties. Effective December 1, 1995,
the Partnership amended the Leases to reduce the annual base
rent from $47,498 and $48,392 to $15,000 for each property.
The Partnership could receive additional rent in the future
equal to 6.75% of the amount by which gross receipts exceed
$275,000. In 1997, the Leases, as amended, were confirmed
as part of the reorganization plan. The lessee has agreed
to pay all post-petition rents due and the Partnership's
related administrative and legal expenses. The Partnership
is owed $29,128 of pre-petition rent, which was not accrued
for financial reporting purposes due to the uncertainty of
collection.
In February, 1996, the Partnership called a letter of credit
for $109,393 related to the Taco Cabana restaurant in
Brownsville, Texas. The Partnership applied the funds to
satisfy rents and real estate taxes due. In 1997, the
Partnership took possession of the property and has listed
it for sale or re-lease. While the property is being sold
or re-leased, the Partnership has assumed the
responsibilities for real estate taxes and other costs
required to maintain the property.
The Partnership used the majority of the proceeds from two
property sales in 1995 to purchase two properties in 1996,
as discussed below. The remainder of the proceeds from
these sales were distributed to the Partners in 1995 and
1996.
On April 10, 1996, the Partnership purchased an 85.0%
interest in a Tractor Supply Company in Bristol, Virginia
for $1,094,367. The property is leased to Tractor Supply
Company under a Lease Agreement with a primary term of 14
years and annual rental payments of $116,686. The remaining
interest in the property was purchased by the Individual
General Partner of the Partnership.
On August 29, 1996, the Partnership purchased a 32.2%
interest in a Champps Americana restaurant in Columbus, Ohio
for $826,070. The property is leased to Americana Dining
Corporation under a Lease Agreement with a primary term of
20 years and annual rental payments of $90,834. The
remaining interest in the property was purchased by AEI
Income & Growth Fund XXI Limited Partnership, an affiliate
of the Partnership.
On May 10, 1996, the Partnership sold the Taco Cabana
restaurant in New Braunfels, Texas to an unrelated third
party. The Partnership received net sale proceeds of
$962,298, which resulted in a net gain of $254,305. At the
time of sale, the cost and related accumulated depreciation
of the property was $784,045 and $76,052, respectively.
Through June 30, 1997, the Partnership sold 62.0519% of the
Applebee's restaurant in Destin, Florida in five separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $933,902 which resulted
in a total net gain of $314,924. The total cost and related
accumulated depreciation of the interests sold was $694,224
and $75,246, respectively. For the six months ended June
30, 1997, the net gain was $153,716.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
Through June 30, 1997, the Partnership sold 49.2653% of a
Taco Cabana restaurant in San Antonio, Texas in four
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $800,103
which resulted in a total net gain of $276,406. The total
cost and related accumulated depreciation of the interests
sold was $567,495 and $43,798, respectively. For the six
months ended June 30, 1997, the net gain was $69,649.
Through June 30, 1997, the Partnership sold 47.3553% of the
Tractor Supply Company in Bristol, Virginia in five separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $709,795 which resulted
in a total net gain of $110,391. The total cost and related
accumulated depreciation of the interests sold was $609,695
and $10,291, respectively. For the six months ended June
30, 1997, the net gain was $72,607.
Through June 30, 1997, the Partnership sold 14.1798% of the
Champps Americana restaurant in Columbus, Ohio in two
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $439,635
which resulted in a total net gain of $80,490. The total
cost and related accumulated depreciation of the interests
sold was $363,773 and $4,628, respectively. For the six
months ended June 30, 1997, the net gain was $80,490.
On July 28, 1997, the Partnership sold an additional
11.8514% in the Champps Americana restaurant in Columbus,
Ohio to an unrelated third party. The Partnership received
net sale proceeds of approximately $365,000, which resulted
in a net gain of approximately $67,500.
Pursuant to the Partnership Agreement, net sale proceeds may
be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units is
terminated. This period expired on December 4, 1995. In
December, 1996, the Managing General Partner filed a proxy
statement to propose an Amendment to the Limited Partnership
Agreement that would allow the Partnership to reinvest the
majority of the sale proceeds from the Taco Cabana
restaurants, Tractor Supply Company and subsequent property
sales in additional properties. The Amendment passed with a
majority of Units voting in favor of the Amendment.
On July 30, 1997, the Partnership purchased a Fuddrucker's
restaurant in Thornton, Colorado for approximately
$1,380,000. The property is leased to Fuddrucker's, Inc.
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $148,387.
During the first six months of 1997 and the year 1996, the
Partnership distributed $60,467 and $372,366 of the net sale
proceeds to the Limited and General Partners as part of
their regular quarterly distributions, which represented a
return of capital of $2.75 and $16.85 per Limited
Partnership Unit, respectively.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the six months ended June 30, 1997 and 1996, the
Partnership recognized rental income of $704,088 and $814,363,
respectively. During the same periods, the Partnership earned
investment income of $86,606 and $53,890, respectively. In 1997,
rental income decreased mainly as a result of the property sales
and the Brownsville Taco Cabana situation discussed below. The
decrease in rental income was partially offset by rental income
received from two subsequent property acquisitions, rent
increases on ten properties and additional investment income
earned on the net proceeds from the property sales.
The Partnership owns a 4.1022% interest in a Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a Sizzler
restaurant in Springboro, Ohio, and a 100% interest in a Sizzler
restaurant in Fairfield, Ohio. In November, 1993, after
reviewing the lessee's operating results, the Partnership
determined that the lessee would be unable to operate the
restaurants in a manner capable of maximizing the restaurants'
sales. Consequently, at the direction of the Partnership, a
multi-unit restaurant operator assumed operation of the
restaurants while the Partnership reviewed the available options.
In January, 1994 and June, 1994, the Partnership closed the
restaurants in Cincinnati and Springboro, respectively, and
listed them for sale or lease. While the properties are vacant,
the Partnership is responsible for the real estate taxes and
other costs required to maintain the properties.
On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield to Fairfield Foods, Inc. (Fairfield) under a Lease
Agreement with a primary term of 20 years and annual rental
payments based on a percentage of sales. Fairfield was not able
to profitably operate the restaurant and closed the restaurant.
No rents were collected from the Sizzler restaurants in
the first six months of 1997 and 1996. The total amount of rent
not collected in 1997 and 1996 was $198,471 and $196,614,
respectively, for the three properties. These amounts were not
accrued for financial reporting purposes.
On January 23, 1997, the Partnership sold its interest in
the Cincinnati restaurant to an unrelated third party. The
Partnership received net sales proceeds of $19,867, which
resulted in a net loss of $31,700, which was recognized as a real
estate impairment in the fourth quarter of 1996.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In December, 1996, the Partnership, in order to avoid
additional property management expenses, decided to sell the
Sizzler properties in Springboro and Fairfield rather than to
continue to attempt to re-lease the properties. As a result, the
properties were reclassified on the balance sheet to Real Estate
Held for Sale. In addition, based on an analysis of market
conditions in the area, it was determined that a sale of the
properties would result in net proceeds of approximately
$800,000. The Partnership's share of the proceeds would be
approximately $773,000. A charge to operations for real estate
impairment of $1,654,600 ($693,500 for the Springboro Sizzler,
and $961,100 for the Fairfield Sizzler) was recognized in the
fourth quarter of 1996, which is the difference between book
value at December31, 1996 of $2,427,600 ($1,066,500 for the
Springboro Sizzler and $1,361,100 for the Fairfield Sizzler) and
the estimated market value of $773,000 ($373,000 for the
Springboro Sizzler and $400,000 for the Fairfield Sizzler). The
charge was recorded against the cost of the land, building and
equipment.
In May, 1997, the Partnership entered into an agreement to
sell the Sizzler restaurant in Fairfield, Ohio to an unrelated
third party. The sale price will be approximately $530,000,
which is in excess of the book value of the property after the
recognition of the real estate impairment. As a result, the
Partnership will recognize a net gain of approximately $130,000.
In August, 1995, the lessee of the two Rally's properties
filed for reorganization. After reviewing the operating results
of the lessee, the Partnership agreed to amend the Leases of the
two properties. Effective December 1, 1995, the Partnership
amended the Leases to reduce the annual base rent from $47,498
and $48,392 to $15,000 for each property. The Partnership could
receive additional rent in the future equal to 6.75% of the
amount by which gross receipts exceed $275,000. In 1997, the
Leases, as amended, were confirmed as part of the reorganization
plan. The lessee has agreed to pay all post-petition rents due
and the Partnership's related administrative and legal expenses.
The Partnership is owed $29,128 of pre-petition rent, which was
not accrued for financial reporting purposes due to the
uncertainty of collection.
In February, 1996, the Partnership called a letter of
credit for $109,393 related to the Taco Cabana restaurant in
Brownsville, Texas. The Partnership applied the funds to satisfy
rents and real estate taxes due. In 1997, the Partnership took
possession of the property and has listed it for sale or re-
lease. While the property is being sold or re-leased, the
Partnership has assumed the responsibilities for real estate
taxes and other costs required to maintain the property.
During the six months ended June 30, 1997 and 1996, the
Partnership paid Partnership administration expenses to
affiliated parties of $134,031 and $121,243, 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 $49,747 and $99,347, 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. The decrease
in these expenses in 1997, when compared to the same period in
1996, is the result of expenses incurred in 1996 related to the
Sizzler situation discussed above.
As of June 30, 1997, the Partnership's annualized cash
distribution rate was 6.1%, 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 term 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.
Liquidity and Capital Resources
During the six months ended June 30, 1997, the
Partnership's cash balances increased $1,431,792 mainly as the
result of the sale of properties discussed below. Net cash
provided by operating activities decreased from $773,337 in 1996
to $545,933 in 1997. The decrease was due to 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. For the six months ended June30,
1997 and 1996, the Partnership generated cash flow from the sale
of real estate, as discussed below, of $1,553,191 and $962,297,
respectively.
The Partnership used the majority of the proceeds from two
property sales in 1995 to purchase two properties in 1996, as
discussed below. The remainder of the proceeds from these sales
were distributed to the Partners in 1995 and 1996.
On April 10, 1996, the Partnership purchased an 85.0%
interest in a Tractor Supply Company in Bristol, Virginia for
$1,094,367. The property is leased to Tractor Supply Company
under a Lease Agreement with a primary term of 14 years and
annual rental payments of $116,686. The remaining interest in
the property was purchased by the Individual General Partner of
the Partnership.
On August 29, 1996, the Partnership purchased a 32.2%
interest in a Champps Americana restaurant in Columbus, Ohio for
$826,070. The property is leased to Americana Dining Corporation
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $90,834. The remaining interest in the
property was purchased by AEI Income & Growth Fund XXI Limited
Partnership, an affiliate of the Partnership.
On May 10, 1996, the Partnership sold the Taco Cabana
restaurant in New Braunfels, Texas to an unrelated third party.
The Partnership received net sale proceeds of $962,298, which
resulted in a net gain of $254,305. At the time of sale, the
cost and related accumulated depreciation of the property was
$784,045 and $76,052, respectively.
Through June 30, 1997, the Partnership sold 62.0519% of
the Applebee's restaurant in Destin, Florida in five separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $933,902 which resulted in a
total net gain of $314,924. The total cost and related
accumulated depreciation of the interests sold was $694,224 and
$75,246, respectively. For the six months ended June 30, 1997,
the net gain was $153,716.
Through June 30, 1997, the Partnership sold 49.2653% of a
Taco Cabana restaurant in San Antonio, Texas in four separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $800,103 which resulted in a
total net gain of $276,406. The total cost and related
accumulated depreciation of the interests sold was $567,495 and
$43,798, respectively. For the six months ended June 30, 1997,
the net gain was $69,649.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Through June 30, 1997, the Partnership sold 47.3553% of
the Tractor Supply Company in Bristol, Virginia in five separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $709,795 which resulted in a
total net gain of $110,391. The total cost and related
accumulated depreciation of the interests sold was $609,695 and
$10,291, respectively. For the six months ended June 30, 1997,
the net gain was $72,607.
Through June 30, 1997, the Partnership sold 14.1798% of
the Champps Americana restaurant in Columbus, Ohio in two
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $439,635 which
resulted in a total net gain of $80,490. The total cost and
related accumulated depreciation of the interests sold was
$363,773 and $4,628, respectively. For the six months ended June
30, 1997, the net gain was $80,490.
On July 28, 1997, the Partnership sold an additional
11.8514% in the Champps Americana restaurant in Columbus, Ohio to
an unrelated third party. The Partnership received net sale
proceeds of approximately $365,000, which resulted in a net gain
of approximately $67,500.
Pursuant to the Partnership Agreement, net sale proceeds
may be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units is
terminated. This period expired on December 4, 1995. In
December, 1996, the Managing General Partner filed a proxy
statement to propose an Amendment to the Limited Partnership
Agreement that would allow the Partnership to reinvest the
majority of the sale proceeds from the Taco Cabana restaurants,
Tractor Supply Company and subsequent property sales in
additional properties. The Amendment passed with a majority of
Units voting in favor of the Amendment.
On July 30, 1997, the Partnership purchased a Fuddrucker's
restaurant in Thornton, Colorado for approximately $1,380,000.
The property is leased to Fuddrucker's, Inc. under a Lease
Agreement with a primary term of 20 years and annual rental
payments of $148,387.
During the first six months of 1997 and the year 1996, the
Partnership distributed $60,467 and $372,366 of the net sale
proceeds to the Limited and General Partners as part of their
regular quarterly distributions, which represented a return of
capital of $2.75 and $16.85 per Limited Partnership Unit,
respectively.
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. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year. The redemption payments generally are funded with cash
that would normally be paid as part of the regular quarterly
distributions. As a result, total distributions and
distributions payable have fluctuated from year to year due to
cash used to fund redemption payments.
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 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
During 1996, fifteen Limited Partners redeemed a total of
313.42 Partnership Units for $233,227 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
forty-six Limited Partners redeemed 705 Partnership Units for
$602,632. The redemptions increase the remaining Limited
Partners' ownership interest 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 May 31,
1997 between the Partnership and Shun Cho
Young and Chung Hsi Ho relating to the
property at 6435 Dixie Highway,
Fairfield, Ohio.
10.2 Sale and Leaseback Financing
Commitment dated June 30, 1997 between
AEI Fund Management, Inc. and
Fuddrucker's, Inc. relating to the
property at 12020 Pennsylvania Street,
Thornton, Colorado.
10.3 Letter of Assignment dated July 15,
1997 between the Partnership and AEI Fund
Management, Inc. relating to the property
at 12020 Pennsylvania Street, Thornton,
Colorado.
PART II - OTHER INFORMATION
(Continued)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (Continued)
a. Exhibits -
Description
10.4 Purchase Agreement dated July 25,
1997 between the Partnership and
Calderwood Investments Limited
Partnership relating to the property at
161 E. Campus View Boulevard, Columbus,
Ohio.
10.5 Property Co-tenancy Ownership
Agreement dated July 28, 1997 between the
Partnership and Calderwood Investments
Limited Partnership relating to the
property at 161 E. Campus View Boulevard,
Columbus, Ohio.
10.6 Net Lease Agreement dated July 30,
1977 between the Partnership and
Fuddrucker's, Inc. relating to the
property at 12020 Pennsylvania Street,
Thornton, Colorado.
27 Financial Data Schedule for period
ended June 30, 1997.
b. Reports filed on Form 8-K - None.
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: August 5, 1997 AEI Real Estate Fund XVIII
Limited Partnership
By: AEI Fund Management XVIII, 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
Fairfield, Ohio
This AGREEMENT, entered into effective as of the 31 st of
May, 1997.
l. Parties. Seller is AEI Real Estate Fund XVIII Limited
Partnership ("Seller"). Seller holds an undivided 100% interest
in the fee title to that certain real property legally described
in the attached Exhibit "A" (the "Property"). Buyer is Shun Chu
Young and Chung Hsi Ho, as Tenants in Common ("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 9.
3. Purchase Price. The purchase price for this Property is
$560,000 cash, 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 $5,000
in cash or good funds (the "First Payment") to Escrowee
Lawyer's Title of Cincinnati, Inc. 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.
(b) Buyer will pay the balance of the purchase price for the
Property, $555,000 in cash or good funds (the "Second
Payment")(less the additional First Payment, if made, as set
forth in paragraph 5 below) at closing to the ("Escrowee")
who shall close the transaction according to the terms
hereof.
5. Closing Date. Escrow shall close on or before August 1,
1997.
6. Contingencies: Buyer agrees to use its best efforts to
secure a commitment for financing of the Purchase Price on terms
reasonably satisfactory to it and to execute all documents
reasonably required to consummate said financing. In the event
Buyer cannot secure a commitment for such financing on or before
August 1, 1997, and in the event Buyer delivers to Seller on or
before said date written notice of its failure to secure said
commitment, then in such event this agreement shall become null
and void and the First Payment paid herein shall be refunded to
Buyer. Absent delivery of said notice by Buyer to Seller, and
absent default by Seller hereunder, after August 1, 1997, this
contingency to Buyer's obligations hereunder shall be deemed
satisfied, the First Payment shall be non-refundable and shall be
the sole property of Seller, except as may otherwise be set forth
herein.
7. Due Diligence. Buyer will have until August 1, 1997 (the
"Review 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
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. 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 Review Period. Such
notice shall be deemed effective only upon receipt (as defined by
Subparagraph 19(d)) 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, except for any title insurance and/or escrow
cancellation fees and any liabilities under sections 16 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.
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.
8. Escrow. Escrow shall be opened by Buyer and the First
Payment shall be deposited by Buyer with Escrowee Lawyer's Title
of Cincinnati, Inc. ("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 (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.
9. Title. Closing will be conditioned on the commitment of a
nationally recognized title company selected by Buyer 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 Review
Period for examination of the commitment 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. Buyer
shall provide Seller with a copy of said title commitment. If
any objections thereto are so made by Buyer, the Seller shall be
allowed ten (10) 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.
10. Closing Costs. Seller will pay the deed stamp taxes, if
any, and one-half of escrow fees, and any brokerage commissions
payable except those brokerage commissions incurred by Buyer.
Seller shall pay for the cost of issuing the title commitment.
Buyer will pay the cost of the title insurance premium for an
Owner's policy, (if Buyer shall decide to purchase the same) all
recording fees, one-half of the escrow fees, (if an update is
required by Buyer). Each party will pay its own attorneys' fees
and costs to document and close of this transaction. Seller shall
pay the County Auditor transfer tax.
11. Real Estate Taxes, Special Assessments and Prorations.
Seller represents that to the best of its knowledge, all real
estate taxes and installments of special assessments due and pay
able 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.
12. Seller's Representation and Agreements.
(a) 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) Seller has not executed any contracts that would be
binding on Buyer after the closing date.
(iv) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Seller, Seller shall perform, execute and deliver or cause
to be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Buyer or the Title Company may require and
Buyer deems to be reasonable in order to consummate the
transactions contemplated herein.
(v) 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.
(vi) To Seller'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 Seller is a party or by which Seller is bound.
(vii) Seller agrees to indemnify and hold Buyer harmless
from any and all claim of any persons or entities claiming a
brokerage or other fee arising out of representation of
Seller or through or on behalf of Seller.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts prior to the Closing Date that would materially
affect the Property and be binding on Buyer after the
Closing Date without Buyer's prior consent, which consent
will not be unreasonably withheld or delayed.
13. Disclosures.
(a) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and ground water conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property
and there are no underground storage tanks on the Property.
Except as otherwise provided in this Agreement and except to
the extent that Seller has knowledge of any hazardous
substances or materials on or in connection with the
Property which Seller is not disclosing to Buyer hereunder,
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date.
(b) Subject to Seller's representations contained in the
Agreement, including subparagraphs 13(a) above, Buyer agrees
that it shall be purchasing the Property in its then present
condition, as is, where is, and Seller has no obligations to
construct or repair any improvements thereon or to perform
any other act regarding the Property, except as expressly
provided herein.
(c) Buyer acknowledges that, having been given the
opportunity to inspect the Property as Buyer or its advisors
shall request, Buyer is relying solely on its own
investigation of the Property and not on any information pro
vided by Seller or to be provided except as set forth
herein. Buyer expressly acknowledges that, in consideration
of the agreements of 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.
The provisions (a) through (c) shall survive closing.
14. Closing.
(a) Before the Closing Date, Seller will deposit into
escrow a standard Seller's Affidavit regarding liens and
judgments and an executed limited warranty deed conveying
insurable title of the Property to Buyer, subject to the
Permitted Exceptions, and will provide Buyer with an
affidavit that Seller is not a "foreign person", and a
customary owner's affidavit requested by the Escrowee
(limited where reflective of the state of Seller's knowledge
and belief) for purposes of deleting the standard
exceptions.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under paragraph 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.
15. 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 the First Payment 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 hin
der, 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, deposited the
balance of the Second Payment for the purchase price into escrow,
performed all of its other obligations and satisfied all condi
tions 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
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
16. Buyer's Representations and Warranties.
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.
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 $10,000 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, and the First Payment shall be returned to Buyer.
Seller, however, shall have the right to adjust or settle
any insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any ten day period provided for above in this Subparagraph
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
$10,000.00, Buyer shall be obligated to otherwise perform
hereunder 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.
(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 Buy
er'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 the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 17a or 17b, 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. 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.
19. 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. Buyer has the right to assign this
Agreement to another party without Seller's consent, but
shall not be binding upon Seller until receipt of written
notice thereof, and provided, further, that Buyer shall
remain liable for the obligations of Buyer hereunder until
the same are fulfilled or this Agreement is terminated
according to the provisions hereof.
(b) If escrow has not closed through no fault of Seller, by
August 1, 1997, Seller may either, at its election, extend
the closing date, exercise any remedy available to it by
law, including terminate 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:
Attention: Robert P. Johnson
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
with copy to:
Michael B. Daugherty
Attorney at Law
1300 Minnesota World Trade Center
St. Paul, MN. 55101
If to Buyer:
Mrs. Chung Hsi Ho
313 west McKinley Avenue
Mishawaka, Indiana 46545
with copy to:
Mr. Henry Martin
Attorney at Law
1732 Glen Echo Road
Nashville, Tennessee 37215
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 and Escrowee (along with the First
Payment to Escrowee. Seller has three (3) business days after
receipt of the executed offer within which to accept this offer
and to notify Escrowee of the same; if not accepted by Seller
within said three days, Escrowee shall immediately return the
First Payment to Buyer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
/s/ Shun Chu Young
Shun Chu Young
WITNESS:
/s/ Alberta N Martin
Alberta N Martin
(Print Name)
WITNESS:
/s/ Henry E Martin
Henry E Martin
(Print Name)
/s/ Chung Hsi Ho
Chung Hsi Ho
WITNESS:
/s/ Alberta N Martin
Alberta N Martin
(Print Name)
WITNESS:
/s/ Henry E Martin
Henry E Martin
(Print Name)
[Seller's signature on the following page]
SELLER:
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP, a Minnesota
limited partnership.
By: AEI Fund Management XVIII, Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
WITNESS:
/s/ Glen Ihle
Glen Ihle
(Print Name)
WITNESS:
/s/ Sadie-jo D Hansen
Sadie-jo D Hansen
(Print Name)
EXHIBIT "A"
Situate in the City of Fairfield, County of Butler and State
of Ohio and being Lot Numbered Eleven Thousand Five Hundred
Forty Eight (11548) as the same is known as designated on
the list of lots in the City of Fairfield, Butler County,
Ohio.
SALE AND LEASEBACK FINANCING COMMITMENT
("COMMITMENT")
FUDDRUCKER'S RESTAURANT
THORNTON, COLORADO
June 30, 1997
In reliance upon representations made by you in documents
you furnished to us as described on Exhibit "A" hereto, AEI Fund
Management, Inc., or its assigns, ("AEI"), agrees to purchase and
you agree to sell and lease from AEI a Fuddrucker's restaurant to
be located in Thornton, Colorado, by the Seller (the "Parcel"),
which Parcel will be subject to the provisions and conditions
herein contained.
A. SELLER
Name: Fuddrucker's, Inc.
Address: One Corporate Plaza
55 Ferncroft Road
Danvers, MA 01923-4001
Phone: (508) 774-9115
B. LESSEE
Name: Fuddrucker's, Inc.
Address: One Corporate Plaza
55 Ferncroft Road
Danvers, MA 01923-4001
Phone: (508) 774-9115
C. PREMISES
1. Type of Improvements: A Fuddrucker's restaurant (the
"Improvements").
2. Location: Thornton, Colorado
3. Land: __________ s.f.
4. Building: 4,800 S.f.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
D. FEES AND COSTS
1. An application and commitment fee equal to one
percent (1.0%) of the total Purchase Price, as defined
in Article E.1, of the Parcel (the "Commitment Fee")
will be payable to AEI upon Seller's and Lessee's
execution and return of this Commitment to AEI. The
Commitment Fee shall be considered earned upon AEI's
execution and delivery of this Commitment. At the
Seller's election, the Commitment Fee may be reimbursed
to Seller as a project cost funded by AEI.
2. All outstanding real estate taxes, and levied and
pending special assessments, due and payable prior to
the Closing Date, as defined in Art. E.2 hereof, shall
be paid by Seller or Lessee in full at or prior to the
Closing Date.
3. Seller or Lessee shall pay all expenses incident
to the closing and necessary to comply with the
requirements herein, as consistent with this
Commitment, including AEI's attorney's fees necessary
to complete this transaction. Such costs may be
included, at Lessee's option, as a project cost, to be
included in the Total Project Cost, as defined in
Article E.1, funded by AEI.
E. PURCHASE TERMS
1. Purchase Price: Not to exceed $ 1,428,445.00 (may
include all verifiable project costs, including those
costs shown on Exhibit "B" attached hereto, (the "Total
Project Cost"), but not to exceed approved MAI
appraised value (the "Purchase Price").
2. Closing Date: If Seller or Lessee has not
performed under this agreement by August 1, 1997 (the
"Closing Date"), this Commitment shall be null and void
at the option of AEI unless extended as agreed to
between the parties. In the event Seller or Lessee
requests an extension and said extension is approved by
AEI in its sole discretion, a written addendum to this
Commitment shall be required.
3. This Commitment shall not be assignable by Seller
or Lessee, by law, or otherwise, but may be assigned by
AEI at its option, in whole or in part, in such manner
as AEI may determine, to an affiliate or affilitates of
AEI, provided such assignment does not relieve AEI of
its obligations to perform under this Commitment.
4. Parcel Inspection: As a condition precedent to
AEI's obligation hereunder, the Parcel shall be
inspected and approved by AEI. Costs of said inspection
would be paid by Seller as reimbursement to AEI for its
actual costs of said inspection, to be paid at closing.
Said costs shall not exceed one thousand dollars
($1,000).
5. Management Review and Interview: AEI has conducted a
management review of Lessee and has approved such
management. As a condition precedent to AEI's
obligations hereunder, there shall be no material
change in the management of Lessee as of the Closing
Date.
6. Seller shall deliver to AEI, for its approval,
documents to support AEI's standard credit underwriting
requirements and financial documentation as required on
Exhibit "D" attached hereto:
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
7. Supporting Documents: As soon as possible, and as
a condition precedent to closing on the Parcel, the
supporting documentation listed below must be submitted
to AEI not less than ten (10) business days prior to
the Closing Date, in form and content satisfactory to
AEI and its counsel:
a. All documentation listed on Exhibit "C"
attached hereto.
b. A Commitment for an ALTA Owner's Policy of
Title Insurance insuring marketable title in the
Parcel. The policy shall be issued by a company
acceptable to AEI and shall contain such
endorsements as AEI may require including extended
coverage, owners comprehensive coverage, and
absent independent verification thereof
satisfactory to AEI, a zoning compliance
endorsement. Seller must provide, at its expense,
an original and a copy of an ALTA owner's
preliminary commitment for title insurance (ALTA
owner - 1970 Form B) insuring marketability and
subject only to such matters as AEI may approve.
The title commitment should list Seller as the
present fee owner and should show AEI as the fee
owner to be insured. The title commitment should
also include an itemization of all outstanding and
pending special assessments or should state that
there are none, if such is the case. It should
also state the manner in which any outstanding
assessments are payable, that is, whether they are
payable in monthly or yearly installments, setting
forth the amount of each such installment and its
duration. The commitment should also include an
itemization of taxes affecting the Parcel and the
tax year to which they relate; should state
whether taxes are current and, if not, should show
the amounts unpaid, the tax parcel numbers, and
whether the tax parcel includes property other
than the Parcel to be purchased. All easements,
restrictions, documents, and other items affecting
title should also be listed in Schedule "B" of the
title commitment. COPIES OF ALL INSTRUMENTS
CREATING SUCH EXCEPTIONS MUST BE ATTACHED TO THE
TITLE COMMITMENT.
c.Insurance policies issued by companies
acceptable to AEI for the following types of
coverage, with loss clauses in favor of AEI,
complying with the guidelines set forth on Exhibit
"E" attached hereto.
d.As-Built survey acceptable to AEI prepared
by a licensed surveyor reasonably acceptable to
AEI, complying with the guidelines set forth on
Exhibit "F" attached hereto.
e.Final plans and specifications for the
Improvements prepared by an architect or engineer
reasonably acceptable to AEI.
f.A soil report prepared by an engineer
reasonably acceptable to AEI.
g.Appraisal of the Parcel by an independent
M.A.I. or other appraiser reasonably acceptable to
AEI, which report shall include a land value
estimate, application of the three approaches to
value (sales comparison, income capitalization,
and cost), and a reconciliation of value.
h.Certificate of Occupancy, or its equiv
alent, issued by the appropriate authorities
indicating that the Parcel is in compliance with
building, zoning and subdivision, environmental
and energy laws and regulations. Also a
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
letter from the appropriate officer of the
municipality or county exercising land use control
over the Parcel stating: (a) the zoning code
affecting the Parcel; (b) that the Parcel and its
intended use complies with such zoning code, city
ordinances and building and use restrictions; (c)
that there are no variances, conditional use
permits or special use permits required for use of
the Improvements on the Parcel, or if such permits
are required, specifying the existence of same and
their terms, and (d) that the Parcel complies with
the platting ordinances affecting it and can be
conveyed without the requirement of a plat or
replat of the Parcel. If the Parcel falls within
any subdivision rules or regulations, evidence of
compliance with such subdivision regulations, or
waiver of the same by the appropriate officials,
is required. (Zoning compliance letter to be
ordered by AEI).
i.Written advice from all proper public
utilities and municipal authorities, that utility
services are available and connected to the Parcel
for gas, electricity, telephone, water and sewer.
(To be ordered by AEI).
j.Certificate of Completion executed by the
project architect, general contractor and owner
certifying that the Improvements have been
completed in accordance with the plans and
specifications and comply with all applicable
building, zoning, energy, environmental laws and
regulations, and the Americans with Disabilities
Act.
k.Copies of any and all certificates, pe
rmits, licenses and other authorizations of any
governmental body or authority which are necessary
to permit the use and occupancy of the
Improvements on the Parcel, specifically
including, but not limited to, liquor licenses.
l.Certified cost statement showing the cost
of the land and of the Improvements constructed on
the Parcel, signed by the owner and general
contractor, and an item by item list of the
components comprising the Improvements.
m.Fully executed License Agreement(s) for
development of the Parcel as a Fuddruckers
Restaurant in the State of Colorado.
n.Photographs of all sides of the exterior
and interior of the completed Improvements.
o.Certified copies of the Articles of In
corporation, By-Laws and Good Standing Certificate
for the Seller and Lessee, together with all other
documents AEI deems necessary to support the
authority of the persons executing any documents
on behalf of the corporation, including
encumbrancy certificates and corporate resolutions
of the directors and shareholders.
p.UCC searches on Seller and Lessee from the
offices of Secretary of State and the County
Recorder for the state and county in which the
Parcel is located.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
q.Environmental Assessment Report prepared by
an engineer satisfactory to AEI containing
evidence satisfactory to AEI that the Parcel
complies with all federal, state and local
environmental regulations.
r.Execution of: Lease; Opinion of Seller's,
Lessee's and Guarantor's Counsel; Hazardous
Substance Indemnity Agreement of Seller, Lessee
and Guarantor; Seller's, Lessee's and Guarantor's
Affidavit; all in form and substance satisfactory
to AEI, consistent with the terms hereof.
F. LEASE TERMS
1. Base Rent:
a.Initial Annual Rental Rate as Percentage of
Purchase Price: 10.75%
Rent shall be payable in advance of the first
day of each month in equal monthly installments.
b.Beginning in the fourth (4th) lease year
and every third (3rd) lease year thereafter, in
the 7th, 10th, 13th, 16th and 19th lease years,
and including any renewal terms, such annual rent
will increase by an amount equal to the sum of the
increase in the prior three years' consumer price
index ("CPI"), such rental rate increase not to
exceed seven and thirty five one-hundredths
percent (7.35%). "CPI" referred to herein is
defined as the Consumers Price Index value for all
Urban Consumers published by the Bureau of Labor
Statistics of the United States Department of
Labor for U.S. City Average, All Items (1982-
1984=100)."
2. Initial Lease Term: 20 years.
3. Renewal Terms: Three (3) terms of five (5)
years each.
4. Type of Use: Casual Dining Restaurant.
5. The lease between AEI and Lessee, which shall
be in a substantially similar form to the lease, dated
June 10, 1996, executed between Americana Dining Corp.
and AEI for the Champps, Lyndhurst, OH property (the
"Lease"), shall be prepared by AEI and acceptable to
AEI and to Lessee subject to Article L. hereof and also
include, but not be limited to, the following clauses:
6. It is the intent of the parties that the Lease
shall be a net lease in all respects and that the Rent
shall be a net rent paid to AEI; any and all other
expenses including, but not limited to, maintenance,
repair, insurance, utilities, costs, taxes and
assessments shall be paid by Lessee.
7. The Lease will be guaranteed by the party listed
in Article G. below, in accordance with a Guarantee, in
the a substantially similar form in accordance with
that Guarantee executed between DAKA International and
AEI for the Champps, Lyndhurst, OH property (the
"Guaranty"), to be prepared by AEI and acceptable to
AEI and to Seller subject to Article L. hereof.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
G. GUARANTOR(S) OF LEASE
Name: Unique Casual Restaurants, Inc.
Address: One Corporate Place
55 Ferncroft Road
Danvers, MA 01923-4001
Phone: (508) 774-9115
During the term of the Lease, Guarantor(s) shall provide
audited financial statements, annually and quarterly
statements as may be reasonably required by the Guarantee.
Guarantor may be released from the Guaranty upon terms
mutually agreed upon by both parties to this Commitment as
set forth in the Guaranty.
H. DOCUMENTS
The documents listed below shall be prepared by AEI's
counsel in accordance with the terms hereof and executed at,
or prior to, the Closing Date in form and substance
satisfactory to AEI:
1. Net Lease Agreement.
2. Attorney's Opinion Letter to be given by Seller's,
Lessee's and Guarantor's in-house counsel necessarily
familiar with the conduct of Seller's, Lessee's and
Guarantor's business and due authority of the
signatories to render such opinion and an opinion from
an attorney in the state in which the Parcel is
situated as to, inter alia, the enforceability of the
Lease.
3. Lessee's Estoppel Letter.
4. Affidavit of Seller, Lessee and Guarantor.
5. Hazardous Substances Indemnification Agreement of
Seller, Lessee and Guarantor.
6. FIRPTA Affidavit of Seller.
Seller shall furnish a proposed Warranty Deed to AEI's
counsel for its review and approval.
I. FAIR CREDIT REPORTING ACT
Seller and Lessee warrants that all credit information
submitted is true and correct, and authorizes AEI to make
credit investigations and obtain credit reports and other
financial information, written or oral, respecting Seller
and Lessee's credit and financial position, as it may deem
necessary or expedient at Seller and Lessee's cost and
expense.
J. INTERPRETATION
This Commitment, and the terms of the transaction
contemplated to be made in conformity herewith, shall be
construed in accordance with all applicable governmental
regulations and in accordance with the laws of the State of
Colorado.
K. CERTIFICATION
Seller and Lessee hereby certify that:
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
1. It does not have any actions or proceedings
pending, which would materially affect the Parcel, or
Lessee, except matters fully covered by insurance;
2. The consummation of the transactions contemplated
hereby, and the performance of this Commitment and the
delivery of the Lease and other security and credit
instruments, will not result in any breach of, or
constitute a default under, any indenture, bank loan or
credit agreement, or other instruments to which Seller
or Lessee is a party or by which it may be bound or
affected;
3. All of both Seller's and Lessee's covenants,
agreements, and representations made herein, and in any
and all documents which may be delivered pursuant
hereto, shall survive the delivery to AEI of the Lease
and other documents furnished in accordance herewith,
and the provisions hereof shall continue to inure to
AEI's benefit, and its successors and assigns;
4. Upon the date of execution of the other documents
contemplated by this Commitment, the Parcel shall be in
good condition, substantially undamaged by fire and
other hazards, and the same shall not have been made
the subject of any condemnation proceedings.
L. TERMINATION
This Commitment may be terminated prior to closing at AEI's
option (but reserving to AEI its right to pursue its
remedies at law or equity for Seller or Lessee's breach
hereof) in such manner as AEI may determine, if: 1) Seller
or Lessee fails to comply with any of the terms hereof,
including but not limited to, obtaining AEI's approval of
the Supporting Documents listed in Paragraph E.6. above, and
does not satisfactorily cure the same on or before the
Closing Date; 2) a material default exists in any financial
obligation of Seller, Lessee or Guarantor which would have a
material adverse effect on Seller, Lessee or Guarantor's
performance under this Commitment; 3) any representation
made in any submission proves to be untrue, substantially
false or misleading at any time prior to the Closing Date
which would have a material adverse effect on Seller, Lessee
or Guarantor's performance under this Commitment; 4) there
has been a material adverse change in the financial
condition of Seller, Lessee or Guarantor since the date of
execution of the Commitment or there shall exist a material
action, suit or proceeding pending or threatened against
Seller, Lessee or Guarantor which would have a material
adverse effect on Seller, Lessee or Guarantor's performance
under this Commitment; 5) any bankruptcy, reorganization,
insolvency, withdrawal, or similar proceeding is instituted
by or against Seller, Lessee or Guarantor.
In the event Seller or Lessee and AEI do not reach mutual
agreement on the documents contemplated to be executed by
either party hereunder, this Commitment may be terminated at
the option of either party; AEI shall in such event refund
the Commitment Fee to Seller, less AEI's out-of-pocket
expenses incurred hereunder, including but not limited to
attorney's fees.
AEI, Seller and Lessee acknowledge the unique nature of the
Parcel and agree that the mutual remedies of any party
hereunder shall be limited to the liquidated damages equal
to the amount of the Commitment Fee plus the outside
counsel's fees incurred by the party in connection with this
Commitment prior to the date of termination.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
M. INCORPORATION OF SUBMITTED WRITTEN MATERIALS AND AMENDMENTS
This Commitment is issued by AEI pursuant to all written
materials previously submitted to AEI by Seller, Lessee or
Guarantor as described on Exhibit "A" hereto (the "Submitted
Written Materials") and it is a proviso hereof that the
terms and provisions of said Submitted Written Materials are
by express and specific reference incorporated herein and
made a part hereof. Provided, however, in the case of any
contradiction, variance, or ambiguity between any of the
terms and provisions hereof and those of the Submitted
Written Materials, the terms specifically delineated in this
Commitment shall govern and shall supersede the conditions
of the Submitted Written Materials. Neither this Commitment
nor any provision hereof may be changed, waived, discharged
or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought, and in the case
of AEI, signed by Robert P. Johnson, President of AEI, or
his designee in writing signed by Mr. Johnson authorizing
such other party to execute a specific change, waiver,
discharge or termination instrument on behalf of AEI.
N. EXPIRATION
This Commitment must be executed and returned by registered
or certified mail to AEI no later than July 7, 1997 for the
terms herein to be effective for the Parcel.
AEI Fund Management, Inc. (AEI)
By: /s/ Robert P Johnson
Robert P. Johnson
President
STATE OF MINNESOTA )
) ss
COUNTY OF RAMSEY )
On this 7th day of July, 1997, before me, the undersigned, a
Notary Public in and for said State, personally appeared Robert
P. Johnson, personally known to me to be the person who executed
the within instrument as the President of AEI Fund Management,
Inc., a Minnesota corporation, on behalf of said corporation.
/s/ Barbara J Kochevar
Notary Public
[notary seal]
This Commitment is accepted and agreed to
this 1st day of July, 1997.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
FUDDRUCKERS, INC. FUDDRUCKERS, INC.
(Seller) (Lessee)
By: /s/ Donald C Moore By: /s/ Donald C Moore
Its: Sr. Vice Pres Its: Sr Vice Pres
STATE OF Massachusetts )
) ss
COUNTY OF Essex )
On this 1st day of July, 1997, before me, the undersigned, a
Notary Public in and for said State, personally appeared Donald C
Moore, personally known to me to be the person who executed the
within instrument as the Sr Vice Pres of Fuddruckers, Inc a Texas
corporation, on behalf of said corporation.
/s/ Jane Blanchette
Notary Public /s/ my commission expires 4-8-99
STATE OF Massachusetts )
) ss
COUNTY OF Essex )
On this 1st day of July, 1997, before me, the undersigned, a
Notary Public in and for said State, personally appeared Donald C
Moore, personally known to me to be the person who executed the
within instrument as the Sr Vice Pres of Fuddruckers Inc, a Texas
corporation, on behalf of said corporation.
/s/ Jane Blanchette
Notary Public
I/We authorize the release of any information deemed
necessary by AEI to verify any and all information supplied to
AEI. I/We shall hold AEI harmless for any damages arising from
verification of said information.
Fuddruckers Inc.
BY: /s/ Charles Redepenning Dated: July 1, 1997
Title: (Seller)Sr. Vice Pres
Fuddruckers, Inc.
BY: /s/ Charles Redepenning Dated: July 1, 1997
Title: (Lessee)Sr Vice Pres
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
EXHIBIT `A'
DOCUMENTS PROVIDED TO AEI PRIOR TO THE COMMITMENT
1. Demographics for the site.
2. Site plan.
3. Information regarding area competition.
4. Budget
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
EXHIBIT "B"
(Costs which may be included in the purchase.)
01. Land Costs or Site Acquisition Costs at Seller's or Lessee's
actual cost from unaffiliated parties.
02. Demolition Costs and Site Preparation Costs.
03. Architectural and Engineering Fees paid to non-affiliates.
04. Outside Labor Costs.
05. Material Costs.
06. Soil Tests Costs.
07. Surveying Costs paid to non-affiliates.
08. Building permits, use permits and other governmental
charges.
09. Contractor Fees to non-affiliates.
10. Builders' Risk Insurance and Public Liability Insurance
Premiums during the
construction period.
11. Utility Charges during construction.
12. Construction Interest.
13. AEI's one percent (1%) Commitment Fee.
14. Title Insurance Fees and Charges.
15. Recording Fees and Registration or Conveyancing Taxes, Fees,
or Charges.
16. Real Estate Taxes due and payable, or actually paid by
Seller as of the date of
closing.
17. Special Assessments levied and pending and actually paid by
Seller as of the date of
closing.
18. Appraisal Fees paid to non-affiliates (maximum $5,000).
19. Attorneys' Fees of Seller and Lessee.
20. Attorneys' Fees of AEI: As long as Seller and/or Lessee is
not in default hereunder, a fixed flat fee of $5,500 to
close the transaction, unless additional fees or costs are
incurred for extraordinary matters not reasonably
anticipated or evident from the information available to AEI
as of the date hereof.
21. Attached, Permanent Equipment, not including signage, not to
exceed nine percent (9.0%) of the Purchase Price.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
EXHIBIT "C"
PRELIMINARY DOCUMENTATION CHECKLIST
Prior to funding, the following must be received and approved by
AEI, along with those items specified more fully in the Sale and
Leaseback Financing Commitment.
1. Current financial statements as described on
Exhibit "D" attached hereto.
2. Site plan.
3. Itemized Budget of total project cost.
4. Site demographics.
5. Area competition.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
EXHIBIT "D"
FINANCIAL DOCUMENTATION REQUIREMENTS
Lessee shall deliver to AEI, for its approval, the following
documents to support AEI's standard credit underwriting
requirements:
I. Lessee's consolidated financial statements, to
include at a minimum a balance sheet and operating
statement, for Lessee's most recent reporting
period, year-to-date period and prior three fiscal
year periods. Said financial statements must be
represented and warranted by Lessee's Chief
Financial Officer, or other authorized individual,
using the certification language appearing below.
II.Financial statements of the Parcel to be
purchased, to include at a minimum a balance sheet
and operating statement for the Parcel's most
recent reporting period and year-to-date period.
Said financial statements must be represented and
warranted by Lessee's Chief Financial Officer, or
other authorized individual, using the
certification language appearing below.
III. Guarantor's, or its predecessor's,
Form 10-K reports as filed with the Securities and
Exchange Commission (hereafter "SEC") for each of
its past three fiscal years.
IV.Guarantor's, or its predecessor's, current
fiscal year Form 10-Q reports as filed with the
Securities and Exchange Commission.
V. Guarantor's, or its predecessor's, Annual
Shareholder reports for its past three fiscal
years, if available.
VI.Guarantor's, or its predecessor's, Quarterly
Shareholder reports for its current fiscal year, if
available.
VII. If available, Seller's consolidated
financial statements, to include at a minimum a
balance sheet and operating statement, for Seller's
most recent reporting period, year-to-date period
and prior fiscal year period. Said financial
statements should be certified by Seller's Chief
Financial Officer, or other authorized individual,
as being true and correct.
VIII. Pro forma of first year's operations for the
property to be purchased.
IX.Itemized budget of total project cost for the
property to be purchased.
Lessee's and Guarantor's financial statements shall be
prepared in accordance with current GAAP guidelines and, if
not audited or submitted to the SEC as either Form 10-K's or
Form 10-Q's, signed by Lessee's and Guarantor's Chief
Financial Officers, or other authorized individuals, who
must represent and warrant the accuracy thereof. The
certification language must read as follows:
"The undersigned hereby represents and warrants that
the information contained in these unaudited
financial statements
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
is true and correct in all material respects,
understands that AEI is relying upon such
information as an inducement for entering into a
purchase and lease transaction with the undersigned,
and expressly represents that AEI may have reliance
upon such information."
Please direct all questions regarding the foregoing to the
property acquisitions department. The toll-free number is 1
800-328-3519.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
EXHIBIT "E"
INSURANCE REQUIREMENTS
(SALE AND LEASEBACK)
The following instructions should be followed with respect to
requesting insurance policies on the Parcel:
1. An original property insurance policy for "All Risk" or
"Special Form" coverage perils, including all exclusions and
endorsements, will be required. The policy(s) shall be written
with a coverage amount at full Replacement Cost of the Parcel,
annually updated, including Improvements. The insured Parcel
shall be described by the address of the Parcel. In the event
that it is impossible to furnish the original policy in time for
the closing on AEI's purchase of the Parcel, an Insurance
Certificate, form ACORD 27, detailing the policy coverage forms,
with a paid receipt shall be acceptable. The original policy
shall be forwarded to AEI without delay.
2. If the coverage referred to in Item 1. above is written via
a blanket insurance policy, a Certificate of Insurance with a
Statement of Values attached will be acceptable.
3. All property insurance policies shall include a Building
Ordinance Compliance Endorsement.
4. All property insurance policies shall be written with no
coinsurance.
5. The maximum deductible for any property insurance policy
shall be $1,000.
6. Property insurance shall include Loss of Rents insurance in
an amount to cover at least a 12 month period with the loss
proceeds payable to AEI.
7. Flood insurance shall be required, in amounts acceptable to
AEI, unless evidence is provided that the Parcel is not located
in a designated Federal flood or storm surge area. Satisfactory
evidence to determine if coverage is necessary shall be a Base
Flood Elevation Certificate and/or a National Geodetick Vertical
Datum (NGDV)-National standard reference datum for elevations,
formerly referred to as Mean Sea Level (MSL) of 1929. If flood
insurance coverage is required, it shall be in amounts of __
with deductibles of ____________ .
8. Earthquake insurance shall be required, in amounts
acceptable to AEI, unless evidence is provided that the Parcel is
not located in a federally designated earthquake prone area or is
not in an ISO High Risk Earthquake Zone. If earthquake coverage
is required, it shall be in the amounts of ______________ with
deductibles of ______________ .
9. Comprehensive General Liability coverage shall be written,
with limits of $2,000,000 per occurrence and $5,000,000
aggregate. These limits can be accomplished either by underlying
liability policies or by the sum of the underlying policy plus an
excess or umbrella policy. The coverage shall include an
endorsement in favor of AEI which is ISO Form CG 20 11 11 85
Additional Insured - Managers Or Lessors Of Premises", or an
equivalent endorsement. The coverage shall by written on an
Occurrence Form basis and shall include Broad Form Contractual
Liability coverage. The Claims Made form of coverage is not
acceptable. The maximum deductible for any liability insurance
policy shall be _____________.
10. If liquor is sold on the premises of the Parcel, Liquor
Liability coverage (also known as Dram Shop coverage) shall be
required. The coverage shall be written in the statutory amount
which is required by the State in which the Parcel is located, if
said State has a maximum recovery statute. Otherwise,
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
the coverage shall be written with limits of $2,000,000 per
occurrence and $5,000,000 aggregate.
11. At any time, at the discretion of AEI, Pollution Liability
coverage may be required.
12. The "Additional Requirements For All Insurance Policies" are
as follows:
a. Definition of "AEI" regarding Additional Insured and Loss
Payee Endorsements:
"AEI _______________________ Limited Partnership, AEI
______________, Inc., the Corporate General Partner,
Robert P. Johnson, as the Individual General Partner
and its successors and assigns as their respective
interests may appear. "
b. Each policy shall be accompanied a proof of payment of
the first annual premium.
c. All property policies shall name AEI as Loss Payee and
Additional Insured.
d. All liability policies shall name AEI as Additional
Insured.
e. All property and liability insurance policies shall
contain Waiver of Subrogation Endorsements waiving all
rights of subrogation, if any, against AEI.
f. AEI shall receive a thirty (30) day written notice in the
event of cancellation, material amendment, or expiration
without renewal of the policies. The certificate of
insurance must not contain the following language: "will
endeavor to mail" and "but failure to mail such notice shall
impose no obligation or liability of any kind upon the
company, its agents or representatives".
g. All insurance companies shall be approved in writing by
AEI.
h. All property and liability insurance policies will be
analyzed at least quarterly regarding their coverages and
adjusted at any time at the option of AEI.
13. At the discretion of AEI, key man insurance can be required
as called for in Lessee's Sale and Leaseback Financing Commitment
with AEI as owner of the policy or sole and irrevocable
beneficiary.
* Please call in AEI's Insurance Analyst in the Lease Management
Department to determine amounts, 1-800-328-3519.
6/97
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
EXHIBIT "F"
Survey Requirements
1. The plat or map of such survey must bear the name, address
and signature of the licensed land surveyor who made the
survey, that surveyor's official seal and license number (if
any, or both), and the date of the survey, with the
following certification:
I, _________________________, a registered land surveyor, in
and for the State of Colorado, do hereby certify to (AEI
Fund to be specified), ____________________________ a
Minnesota limited partnership, or their assigns Lawyers
Title Insurance Corporation and Fuddrucker's Inc. (PLEASE
CONTACT ACQUISITIONS CLOSING MANAGER AT 1-800-328-3519 FOR
INFORMATION), and Lawyer's Title Insurance Corporation, that
this is a true and correct plat of a survey of
(Insert Legal Description)
which correctly shows the location of all buildings,
structures and improvements on said described property; that
there are no visible encroachments onto adjoining
properties, streets, alleys, easements or setback lines by
any of said buildings, structures or improvements; that
there are no recorded or visible right of ways or easements
on said described property, except as shown on said survey;
that there are no party walls or visible encroachments on
said described property by buildings, structures or other
improvements situated on adjoining property, except as shown
on said plat or survey; and that the described property has
direct access to a publicly dedicated right-of-way at the
location shown on said plat or survey.
By: _________________________
Dated: _______________________
2. If the street address of the Parcel is available, it should
be noted on the survey.
3. The survey boundary should be drawn to a convenient scale,
with that scale clearly indicated. If feasible, a graphic
scale should be indicated. When practical, the plat or map
of survey should be oriented so that North is at the top of
the drawing. Supplementary or exaggerated scale diagrams
should be presented accurately on the plat or map and drawn
to scale. No plat or map drawing less than the minimum size
of 8-1/2" by 11" will be acceptable.
4. The plat or map of survey should meet with the minimum
Standard Detail Requirements for Land Title Surveys as
adopted by the American Title Association and American
Congress on Surveying and Mapping.
5. The character and location of all buildings upon the plot or
parcel must be shown and their location given with reference
to boundaries. Proper street numbers should be shown where
available. Physical evidence of easements and/or servitudes
of all kinds, including but not limited to those created by
roads, rights of way, water courses, drains, telephone,
telegraph or electric lines, water, sewer, oil or gas
pipelines, etc., on or across the surveyed property and on
adjoining properties if they appear to affect the enjoyment
of the surveyed property should be
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
located and noted. If the surveyor has knowledge of any
such easements and/or servitudes, not physically evidenced
at the time the present survey is made, such physical non-
evidence should be noted. All recorded easements, rights of
way and other record matters affecting the Parcel should be
located and identified by recording date. Surface
indications, if any, of underground easements and/or
servitudes should also be shown. If there are no buildings
erected on the property being surveyed, the plat or map of
survey should bear the statement "No Buildings". Curb cuts
and adjoining streets should be shown.
6. Joint or common driveways and alleys must be indicated.
Independent driveways along the boundary must be shown
together with the width thereof. Encroaching driveways,
strips, ribbons, aprons, etc., should be noted. Rights of
access to public highways should be shown. The right-of-way
line of any public street must be shown in relationship to
the property surveyed and the street must be labeled
"Publicly Dedicated" or "Private Thoroughfare" as the case
may be.
7. As minimum requirement, at least two (2) sets of prints of
the plat or map of survey should be furnished to AEI, 1300
Minnesota World Trade Center, 30 E. Seventh Street, St.
Paul, MN 55101, attention: Acquisitions Closing Manager,
and one (1) copy to the title company.
8. The survey should certify as to the total square footage of
the area surveyed and as to the square footage at the
exterior walls of any improvements on the Parcel. The
survey should note the absence of, or indicate the existence
of, any building restriction or setback lines. Paved areas
should be shown and the survey should designate the area for
parking and its dimensions. If completed, the survey should
indicate the actual number of parking spaces and, if
possible, the actual parking spaces should be outlined on
the survey.
Seller/Lessee Initial: /s/ cr
Commitment For: Fuddrucker's Restaurant/Thornton, Co
June 30,1997
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 East 7th Street
St. Paul, MN 55101
RE: Fuddrucker's/Thornton, CO
To Whom It May Concern:
AEI Fund Management, Inc. hereby assigns all rights, title
and interest in that certain Sale and Leaseback Financing
Commitment dated June 30, 1997 to AEI Real Estate Fund XVIII
Limited Partnership.
Sincerely,
AEI FUND MANAGEMENT, INC.
/s/ Robert P. Johnson President
PURCHASE AGREEMENT
Champps Restaurant - Columbus, OH
This AGREEMENT, entered into effective as of the 25th of July,
1997 .
l. Parties. Seller is AEI Real Estate Fund XVIII Limited
Partnership which owns an undivided 18.0202% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property") Buyer is Calderwood
Investments Limited Partnership, ("Buyer"). Seller wishes to sell
and Buyer wishes to buy a portion as Tenant in Common of Seller's
interest in the Entire Property.
2. Property. The Property to be sold to Buyer in this transaction
consists of an undivided 11.8514 percentage interest
(hereinafter, simply the "Property") as Tenant in Common in the
Entire Property.
3. Purchase Price . The purchase price for this percentage
interest in the Entire Property is $417,900 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 $5,000
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,
$412,900 (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 July 31, 1997.
6. Due Diligence. Buyer will have until the expiration of the
fifth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) Copies of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) Copies of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors. Buyer
understands that the Guaranty of Daka International, Inc.
("Daka") may be assumed by Unique Casual Restaurants, Inc.,
pursuant to merger, and Daka may be released from the
Guaranty under the terms of such assumption and copies of
such assumption will be provided to Buyer.
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
(e) Evidence of zoning compliance.
(f) Soils report.
(g) Environmental report.
It is a contingency upon Seller's obligations hereunder that
two (2) copies of Co-Tenancy Agreement in the form attached
hereto duly executed by Buyer and Seller and dated on escrow
closing date be delivered to the Seller on the closing date.
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 sections 15(a) 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 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 unless Buyer makes
the Second Payment when required. 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 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
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 definded in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed five (5) 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, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections in a manner satisfactory to
Buyer. 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
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
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.
9. Closing Costs. Seller will pay one-half of escrow fees,
the cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. Real Estate Taxes, Special Assessments and Prorations.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, 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 and Seller
in proportion to their respective Tenant in Common
interests, 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.
Seller and 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 Entire Property.
(b) All income and all operating expenses from the Entire
Property 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, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate shall
of all operating expenses of the Entire Property incurred on
and after the date of closing.
The provisions of (a) and (b) above shall survive closing.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date (and
such shall survive closing for a period of 18 months
thereafter) that:
(i) Except for the lease in existence between AEI Income &
Growth Fund XXI Limited Partnership and AEI Real Estate Fund
XVIII Limited Partnership and Americana Dining Corporation,
dated August 29, 1996, Seller is not aware of any leases of
the Property. The above referenced lease agreement also has
a first right of refusal in favor of the Tenant as set forth
in Article 34 of said lease agreement, which right shall
apply to any attempted disposition of the Property by Buyer
after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(iv) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Seller, Seller shall perform, execute and deliver or cause
to be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Buyer or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(v) 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.
(vi) To Seller'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 Seller is a party or by which Seller is bound.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding on Buyer after the Closing Date without Buyer's
prior consent, which will not be unreasonably withheld.
However, Buyer acknowledges that Seller retains the right
both prior to and after the Closing Date to freely transfer
all or a portion of Seller's remaining undivided interest in
the Entire Property, provided such sale shall not encumber
the Property being purchased by Buyer in violation of the
terms hereof or the contemplated Co-Tenancy Agreement.
12. Disclosures.
(a) To the best of Seller's knowledge: there are now, and
at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and 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.
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent Buyer from using and operating the Property after
the Closing in the manner in which the Property has been
used and operated prior to the date of this Agreement.
(d) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and groundwater conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property.
Buyer agrees that Seller will have no liability
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
of any type to Buyer or Buyer's successors, assigns, or
affiliates in connection with any Hazardous Materials on or
in connection with the Property either before or after the
Closing Date, except such Hazardous Materials on or in
connection with the Property arising out of Seller's
negligence or intentional misconduct in violation of
applicable state or federal law or regulation.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein.
(f) Buyer acknowledges that, having been given the
opportunity to inspect the Property and such financial
information on the Lessee and Guarantors of the Lease as
Buyer or its advisors shall request, 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 further acknowledges that the
information provided and to be provided by Seller with
respect to the Property and to the Lessee and Guarantors of
Lease was obtained from a variety of sources and Seller
neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information. The sale of the Property as provided for
herein is made on an "AS IS" basis, and Buyer expressly
acknowledges that, in consideration of the agreements of
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, or
fitness for a particular purpose, in respect of the
Property.
The provisions (d) - (f) above shall survive closing.
13. Closing.
(a) Before the closing date, Seller will deposit into
escrow an executed limited warranty deed conveying insurable
title of the Property to Buyer, subject to the encumbrances
contained in paragraph 8 above.
(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 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
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the Second Payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants (and such shall survive
closing for a period of 18 months) to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(ii) 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.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$10,000.00, this Agreement shall become null and void, at
Buyer's option exercised, if at all, by written notice to
Seller within ten (10) days after Buyer has received written
notice from Seller of said destruction or damage. Seller,
however, shall have the right to adjust or settle any
insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any ten-day period provided for above in this Subparagraph
16a for Buyer to elect to terminate this Agreement has
expired or Buyer has, by written notice to Seller, waived
Buyer's right to terminate this Agreement. If Buyer elects
to proceed and to consummate the purchase despite said
damage or destruction, there shall be no reduction in or
abatement of the purchase price, and Seller shall assign to
Buyer the Seller's right, title, and interest in and to all
insurance proceeds (pro-rata in relation to the Entire
Property) resulting from said damage or destruction to the
extent that the same are payable with respect to damage to
the Property, subject to rights of any Tenant of the Entire
Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed 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 the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. Buyer's 1031 Tax Free Exchange.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to Chicago Deferred Exchange
Corporation who will act as Accommodator to perfect the 1031
exchange by preparing an agreement of exchange of Real Property
whereby Chicago Deferred Exchange Corporation will be an
independent third party purchasing the ownership interest in
subject property from Seller and selling the ownership interest
in subject property to Buyer under the same terms and conditions
as documented in this Purchase Agreement. Buyer asks the Seller,
and Seller agrees to cooperate in the perfection of such an
exchange if at no additional cost or expense to Seller or delay
in time. Buyer hereby indemnifies and holds Seller harmless from
any claims and/or actions resulting from said exchange. Pursuant
to the direction of Chicago Deferred Exchange Corporation, Seller
will deed the property to Buyer.
18. Cancellation
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. 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.
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
(b) If this escrow has not closed by July 31, 1997, through
no fault of Seller, Seller may either, at its election,
extend the closing date or exercise any remedy available to
it by law, including terminating this Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(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:
Attention: Robert P. Johnson
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
If to Buyer:
Calderwood Investments Limited Partnership
Vickie L. Hegebush, General Partner
Mary C. Calderwood, General Partner
Attn: Vickie Hegebush
228 E. Fleet Drive
Tempe, AZ 85283
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller. Seller has five (5) business days from
receipt within which to accept this offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: Calderwood Investments Limited Partnership
By:/s/ Vicki Hegebush, g.p.
Vickie L. Hegebush, general partner
WITNESS:
/s/ Marilyn Schmickley
Marilyn Schmickley
(Print Name)
WITNESS:
/s/ J. Moss
A. James Moss
(Print Name)
By: /s/ Mary C Calderwood g.p.
Mary C. Calderwood, general partner
WITNESS:
/s/ Marilyn Schmickley
Marilyn Schmickley
(Print Name)
WITNESS:
/s/ J. Moss
A. James Moss
(Print Name)
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
SELLER: AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP a Minnesota
limited partnership
By: AEI Fund Management XVIII Inc., its corporate general partner
By:/s/ Robert P Johnson
Robert P. Johnson, President
WITNESS:
/s/ Laura M Steidl
Laura M Steidl
(Print Name)
WITNESS:
/s/ Dawn E Campbell
Dawn E Campbell
(Print Name)
Buyer Initial: /s/ Vh /s/ MCC
Purchase Agreement for Champps-Columbus, OH
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Champps Restaurant - Columbus, OH)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 28 day of July, 1997, by and
between Calderwood Investments Limited Partnership, (hereinafter
called "Calderwood"), and AEI Real Estate Fund XVIII Limited
Partnership (hereinafter called "Fund XVIII") (Calderwood, Fund
XVIII (and any other Owner in Fee where the context so indicates)
being hereinafter sometimes collectively called "Co-Tenants" and
referred to in the neuter gender).
WITNESSETH:
WHEREAS, Fund XVIII presently owns an undivided 6.1688% interest
in and to, and AEI Income and Growth Fund XXI Limited Partnership
("Fund XXI") presently owns an undivided 67.80% interest in and
to, and Calderwood presently owns an undivided 11.8514% interest
in and to, and Adamson presently owns an undivided 14.1798%
interest in and to the land, situated in the City of Columbus,
County of Franklin, and State of OH, (legally described upon
Exhibit A attached hereto and hereby made a part hereof) and in
and to the improvements located thereon (hereinafter called
"Premises");
WHEREAS, The parties hereto wish to provide for the orderly
operation and management of the Premises and Calderwood's
interest by Fund XVIII; the continued leasing of space within the
Premises; for the distribution of income from and the pro-rata
sharing in expenses of the Premises.
NOW THEREFORE, in consideration of the purchase by Calderwood of
an undivided interest in and to the Premises, for at least One
Dollar ($1.00) and other good and valuable consideration by the
parties hereto to one another in hand paid, the receipt and
sufficiency of which are hereby acknowledged, and of the mutual
covenants and agreements herein contained, it is hereby agreed by
and between the parties hereto, as follows:
1. The operation and management of the Premises shall be
delegated to Fund XVIII, or its designated agent, successors or
assigns. Provided, however, if Fund XVIII shall sell all of its
interest in the Premises, the duties and obligations of Fund
XVIII respecting management of the Premises as set forth herein,
including but not limited to paragraphs 2, 3, and 4 hereof, shall
be exercised by the holder or holders of a majority undivided co-
tenancy interest in the Premises. Except as hereinafter expressly
provided to the contrary, each of the parties hereto agrees to be
bound by the decisions of Fund XVIII with respect to all
administrative, operational and management matters of the
property comprising the Premises, including but not limited to
the management of the net lease agreement for the Premises. The
parties hereto hereby designate Fund XVIII as their sole and
exclusive agent to deal with, and Fund XVIII retains the sole
right to deal with, any property agent or tenant and to monitor,
execute and enforce the terms of leases of space within the
Premises, including but not limited to any amendments, consents
to assignment, sublet, releases or modifications to leases or
guarantees of lease or easements affecting the Premises, on
behalf of Calderwood. Only Fund XVIII may obligate Calderwood
with respect to any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XVIII agrees to
require any lessee of the Premises to name Calderwood as an
insured or additional insured in all insurance policies provided
for, or contemplated by, any lease on the Premises. Fund XVIII
shall use its best efforts to obtain endorsements adding Co-
Tenants to said policies from lessee within 30 days of
commencement of this
Co-Tenant Initial: /s/ vh /s/ M.C.C
Co-Tenancy Agreement for Champps, Columbus, OH
agreement. In any event, Fund XVIII shall distribute any
insurance proceeds it may receive, to the extent consistent with
any lease on the Premises, to the Co-Tenants in proportion to
their respective ownership of the Premises.
2. Income and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XVIII may offset
against, pay to itself and deduct from any payment due to
Calderwood under this Agreement, and may pay to itself the amount
of Calderwood's share of any legitimate expenses of the Premises
which are not paid by Calderwood to Fund XVIII or its assigns,
within ten (10) days after demand by Fund XVIII. In the event
there is insufficient operating income from which to deduct
Calderwood's unpaid share of operating expenses, Fund XVIII may
pursue any and all legal remedies for collection.
Operating Expenses shall include all normal operating expense,
including but not limited to: maintenance, utilities, supplies,
labor, management, advertising and promotional expenses, salaries
and wages of rental and management personnel, leasing commissions
to third parties, a monthly accrual to pay insurance premiums,
real estate taxes, installments of special assessments and for
structural repairs and replacements, management fees, legal fees
and accounting fees, but excluding all operating expenses paid by
Tenant under terms of any lease agreement of the Premises.
Calderwood has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XVIII in the
amount of $1,170 for the expenses, direct and indirect, incurred
by Fund XVIII in providing Calderwood with quarterly accounting
and distributions of Calderwood's share of net income and for
tracking, reporting and assessing the calculation of Calderwood's
share of operating expenses incurred from the Premises. This
invoice amount shall be pro-rated for partial years and
Calderwood authorizes Fund XVIII to deduct such amount from
Calderwood's share of revenue from the Premises. Calderwood may
terminate this agreement in this paragraph respecting accounting
and distributions at any time and attempt to collect its share of
rental income directly from the tenant; however, enforcement of
all other provisions of the lease remains the sole right of Fund
XVIII pursuant to Section 1 hereof.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XVIII's principal office, and each Co-Tenant shall have
access to such books and may inspect and copy any part thereof
during normal business hours. Within ninety (90) days after the
end of each calendar year during the term hereof, Fund XVIII
shall prepare an accurate income statement for the ownership of
the Premises for said calendar year and shall furnish copies of
the same to all Co-Tenants. Quarterly, as its share, Calderwood
shall be entitled to receive 11.8514% of all items of income and
expense generated by the Premises. Upon receipt of said
accounting, if the payments received by each Co-Tenant pursuant
to this Paragraph 3 do not equal, in the aggregate, the amounts
which each are entitled to receive proportional to its share of
ownership with respect to said calendar year pursuant to
Paragraph 2 hereof, an appropriate adjustment shall be made so
that each Co-Tenant receives the amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements, for which adequate reserves do not
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor from Fund XVIII, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XVIII sufficient to pay said net operating losses
and to provide necessary operating capital for the premises and
to pay for said capital improvements, repairs and/or
replacements, all in proportion to their undivided interests in
and to the Premises.
Co-Tenant Initial: /s/ vh /s/ M.C.C
Co-Tenancy Agreement for Champps, Columbus, OH
5. Co-Tenants may, at any time, sell, finance, or otherwise
create a lien upon their interest in the Premises but only upon
their interest and not upon any part of the interest held, or
owned, by any other Co-Tenant. All Co-Tenants reserve the right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.
6. If any Co-Tenant shall be in default with respect to any of
its obligations hereunder, and if said default is not corrected
within thirty (30) days after receipt by said defaulting Co-
Tenant of written notice of said default, or within a reasonable
period if said default does not consist solely of a failure to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.
7. This property management agreement shall continue in full
force and effect and shall bind and inure to the benefit of the
Co-Tenant and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns until
August 29, 2031 or upon the sale of the entire Premises in
accordance with the terms hereof and proper disbursement of the
proceeds thereof, whichever shall first occur. Unless
specifically identified as a personal contract right or
obligation herein, this agreement shall run with any interest in
the Premises and with the title thereto. Once any person, party
or entity has ceased to have an interest in fee in the Premises,
it shall not be bound by, subject to or benefit from the terms
hereof; but its heirs, executors, administrators, personal
representatives, successors or assigns, as the case may be, shall
be substituted for it hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be deemed
given or served in accordance with the provisions of this
Agreement, if said notice or elections addressed as follows;
If to Fund XVIII:
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Calderwood:
Calderwood Investments Limited Partnership
Vickie L. Hegebush, general partner
Mary C. Calderwood, general partner
ATTN: VICKI
228 E. Fleet Drive
Tempe, AZ 85283
If to Adamson:
The Thomas W. Adamson Family Limited Partnership
Gerald Adamson
206 Palm Avenue
Bullhead City, AZ 86430
Co-Tenant Initial: /s/ vh /s/ M.C.C
Co-Tenancy Agreement for Champps, Columbus, OH
Wayne Adamson
1400 W. Walnut
Marion, IL 62959
Each mailed notice or election shall be deemed to have been given
to, or served upon, the party to which addressed on the date the
same is deposited in the United States certified mail, return
receipt requested, postage prepaid, or given to a nationally
recognized courier service guaranteeing overnight delivery as
properly addressed in the manner above provided. Any party hereto
may change its address for the service of notice hereunder by
delivering written notice of said change to the other parties
hereunder, in the manner above specified, at least ten (10) days
prior to the effective date of said change.
9. This Agreement shall not create any partnership or joint
venture among or between the Co-Tenants or any of them, and the
only relationship among and between the Co-Tenants hereunder
shall be that of owners of the premises as tenants in common
subject to the terms hereof.
10. The unenforceability or invalidity of any provision or
provisions of this Agreement as to any person or circumstances
shall not render that provision, nor any other provision hereof,
unenforceable or invalid as to any other person or circumstances,
and all provisions hereof, in all other respects, shall remain
valid and enforceable.
11. In the event any litigation arises between the parties
hereto relating to this Agreement, or any of the provisions
hereof, the party prevailing in such action shall be entitled to
receive from the losing party, in addition to all other relief,
remedies and damages to which it is otherwise entitled, all
reasonable costs and expenses, including reasonable attorneys'
fees, incurred by the prevailing party in connection with said
litigation.
Co-Tenant Initial: /s/ vh /s/ M.C.C
Co-Tenancy Agreement for Champps, Columbus, OH
The remainder of this page intentionally left blank
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Calderwood Calderwood Investments Limited Partnership
By: /s/ Vicki L Hegebush gp.
Vickie L. Hegebush, general partner
WITNESS:
/s/ Marilyn Schmickley [notary seal]
Marilyn Schmickley /s/ J. Moss
(Print Name)
WITNESS:
(Print Name)
STATE OF Arizona)
) ss
COUNTY OF Maricopa)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 25th day of July,
1997, Vickie L. Hegebush, general partner, who executed the
foregoing instrument in said capacity and on behalf of the said
limited partnership.
By:/s/ Mary C Calderwood g.p
Mary C. Calderwood, general partner
WITNESS:
/s/ Marilyn Schmickley
Marilyn Schmickley
(Print Name)
WITNESS:
(Print Name)
STATE OF Arizona)
) ss
COUNTY OF Maricopa)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 25th day of July,
1997, Mary C. Calderwood, general partner, who executed the
foregoing instrument in said capacity and on behalf of the said
limited partnership.
[notary seal[
/s/ J. Moss
Co-Tenant Initial: /s/ vh /s/ M.C.C
Co-Tenancy Agreement for Champps, Columbus, OH
Fund XVIII AEI Real Estate Fund XVIII Limited Partnership
By: AEI Fund Management XVIII, Inc., its corporate
general partner
By:/s/ Robert P Johnson
Robert P. Johnson, President
WITNESS:
/s/ Debra L Achman
Debra L Achman
(Print Name)
WITNESS:
/s/ Jeni K Henrickson
Jeni K Henrickson
(Print Name)
State of Minnesota )
) ss.
County of Ramsey )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 28th day of Jully,
1997, Robert P. Johnson, President of AEI Fund Management XVIII,
Inc., corporate general partner of AEI Real Estate Fund XVIIII
Limited Partnership who executed the foregoing instrument in said
capacity and on behalf of the corporation in its capacity as
corporate general partner, on behalf of said limited partnership.
/s/ Laura M Steidl
Notary Public
Co-Tenant Initial: /s/ vh /s/ M.C.C
Co-Tenancy Agreement for Champps, Columbus, OH
LEGAL DESCRIPTION
Situated in the State of Ohio, County of Franklin, City of
Columbus, being located in Section 2, Township 2, Range 18,
United States Military Lands, and being part of a 43. 161
acre tract of land (Parcel No. 610-146452) conveyed to Forty-
One Corporation (the Grantor), by deed of record in Official
Record 15500 A-G, all references being to records in the
Recorder's Office, Franklin County Ohio, and being more
particularly described as follows:
Beginning for reference at the intersection of North High
Street (US 23) and East Campus View Boulevard (80.00 feet in
width) as shown in Plat Book 60, Page 26:
thence S 86 49' 53" E, along the centerline of said East
Campus View Boulevard, a distance of 900.00 feet to a point
of curvature,
thence along the centerline of said East Campus View
Boulevard, with a curve tot he left having a radius of
1350.00 feet, a chord bearing of N 89 27' 50" E, and a chord
distance of 174.45 feet to the intersection with centerline
of High Cross Boulevard (80.00 feet in width);
thence S 1 53'32" E, along the centerline of said High cross
Boulevard a distance of 74.72 feet to a point;
thence N 88 06'28" E, a distance of 40.00 feet to an iron
pin set in the easterly right of way line of said High Cross
Boulevard, said point being the True Point of Beginning of
herein described tract;
thence along the easterly right of way line of said High
Cross Boulevard, with a curve to the right, having a radius
of 40.00 feet, a chord bearing of N 40 23'34" E, and a chord
distance of 53.83 feet to an iron pin set in the southerly
right of way line of said East Campus View Boulevard;
thence along the southerly right of way line of said East
Campus View Boulevard and the northerly line of herein
described tract, with a curve to the left, having a radius
of 1390.00 feet, a chord bearing of N 82 25'24" E, and a
chord distance of 12.36 feet to an iron pin set;
thence N 82 10' 07" E, along the southerly right of way line
of said East Campus View boulevard and the northerly line of
herein described tract, a distance of 209.28 feet to an iron
pin set at the northeasterly corner of herein described
tract;
thence s 7 49' 49" E, along the easterly line of herein
described tract, a distance of 312.60 feet to an iron pin
set at the southeasterly corner of herein described tract;
thence S 82 10'11" W, along the southerly line of herein
described tract, a distance of 318.01 feet to an iron pin
set in the easterly right of way line of said High Cross
Boulevard at the southwesterly corner of herein described
tract;
thence along the easterly right of way line of said High
Cross Boulevard and the westerly line of herein described
tract, with a curve to the right, having a radius of 2960.00
feet, a chord bearing of N 9 21' 59" E, and a chord distance
of 10/.64 feet to an iron pin set;
thence N 9 28'10" E, along the easterly right of way line of
said High Cross Boulevard and the westerly line of herein
described tract a distance of 89.24 feet to an iron pin set;
thence along the easterly right of way line of said High
Cross Boulevard and the westerly line of herein described
tract, with a curve to the left, having a radius of 390.00
feet, a chord bearing at N 3 47' 19" E, and a chord distance
of 77.21 feet to an iron pin set;
thence N 53' 32" W, along the easterly right of way line of
said High Cross Boulevard and the westerly line of herein
described tract a distance of 106/36 feet to the True Point
of Beginning containing 2,005 acres, more or less, and
subject to any rights of way, easements, and restrictions of
record.
The Basis of Bearing in this description is the centerline
of East Campus View Boulevard, being S 86 49' 53" E, as
shown in Plat Book 61, Page 79, Recorder's Office, Franklin
County, Ohio.
NET LEASE AGREEMENT
THIS LEASE, made and entered into effective as of the
30 day of July, 1997, by and between AEI REAL ESTATE FUND
XVIII LIMITED PARTNERSHIP ("Fund XVIII), a Minnesota limited
partnership, whose corporate general partner is AEI Fund
Management XVIII, Inc., all of whose principal business
address is 1300 Minnesota World Trade Center, 30 East
Seventh Street, St. Paul, Minnesota 55101 ("Lessor"), and
Fuddruckers, Inc., a Texas corporation ("Lessee"), whose
principal business address is One Corporate Place, 55
Ferncroft Road, Danvers, Ma. 01923;;
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of
real property and improvements located in Thornton,
Colorado, and legally described in Exhibit "A", which is
attached hereto and incorporated herein by reference; and
WHEREAS, Lessee constructed the building and
improvements (together the "Building") on the real property
described in Exhibit "A", which Building is described in the
plans and specifications heretofore submitted to Lessor; and
WHEREAS, Lessee desires to lease said real property and
Building (said real property and Building hereinafter
referred to as the "Leased Premises"), from Lessor upon the
terms and conditions hereinafter provided;
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described
to be paid, kept, and performed by Lessee, Lessor does
hereby grant, demise, lease, and let unto Lessee, and Lessee
does hereby take and hire from Lessor and does hereby
covenant, promise, and agree as follows:
ARTICLE 1. LEASED PREMISES
Lessor hereby leases to Lessee, and Lessee leases and
takes from Lessor, the Leased Premises subject to the
conditions of this Lease.
ARTICLE 2. TERM
(A) The term of this Lease ("Term") shall be Twenty
(20) consecutive "Lease Years", as hereinafter defined,
commencing on July , 1997 ("Occupancy Date").
(B) The first "Lease Year" of the Term shall be for a
period of twelve (12) consecutive calendar months from the
Occupancy Date. If the Occupancy Date shall be other than
the first day of a calendar month, the first "Lease Year"
shall be the period from the Occupancy Date to the end of
the calendar month of the Occupancy Date, plus the following
twelve (12) calendar months. Each Lease Year after the
first Lease Year shall be a successive period of twelve
(12) calendar months.
(C) The parties agree that once the Occupancy Date has
been established, upon the request of either party, a short
form or memorandum of this Lease will be executed for
recording purposes. That short form or memorandum of this
Lease will set forth the actual occupancy and termination
dates of the Term and optional Renewal Terms, as defined in
Article 28 hereof, and the existence of any right of first
refusal, and that said right shall terminate when the Lessee
shall lose right to possession or this Lease is terminated,
whichever occurs first.
ARTICLE 3. CONSTRUCTION OF IMPROVEMENTS
(A) Lessee warrants and agrees that the Building has
been constructed on the Leased Premises, and all other
improvements to the land, including the parking lot,
approaches, and service areas, have been constructed in all
material respects by Lessee substantially in accordance with
the plot, plans, and specifications heretofore submitted to
Lessor.
(B) Lessee warrants that the Building and all other
improvements to the land do comply with the laws,
ordinances, rules, and regulations of all state and local
governments.
(C) Lessee agrees to pay, if not already paid in full,
for all architectural fees and actual construction costs
relating to the Building and other related improvements on
the Leased Premises, in the past, present or future, which
shall include, but not be limited to, plans and
specifications, general construction, carpentry, electrical,
plumbing, heating, ventilating, air conditioning,
decorating, equipment installation, outside lighting,
curbing, landscaping, blacktopping, electrical sign hookup,
conduit and wiring from building, fencing, and parking
curbs, builder's risk insurance (naming Lessor, Lessee, and
contractor as co-insured), and all construction bonds for
improvements made by or at the direction of Lessee.
(D) Opening for business in the Leased Premises by
Lessee shall constitute an acceptance of the Leased Premises
and an acknowledgment by Lessee that the premises are in the
condition described under this Lease.
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable for the first, second, and
third Lease Years: Lessee shall pay to Lessor an annual
Base Rent of $148,386.73, which amount shall be payable in
advance on the first day of each month in equal monthly
installments of $12,365.56. If the first day of the Lease
Term is not the first day of a calendar month, then the
monthly Rent payable for that partial month shall be a
prorated portion of the equal monthly installment of Base
Rent.
(B) Annual Rent Payable beginning in the fourth,
seventh, tenth, thirteenth, sixteenth, nineteenth, and if
renewed according to the terms hereof, the twenty-second,
twenty-fifth, twenty-eighth, thirty-first, and thirty-fourth
Lease Year:
1. In the fourth and every third
Lease Year thereafter, the annual Base Rent due and payable
shall increase by an amount equal to the lesser of: a) Seven
and 35/100 Percent (7.35%) of the Base Rent payable for the
immediately prior Lease Year, or b) The "CPI-U Percentage
Increase" of the Base Rent payable for the prior Lease Year.
"CPI-U" shall mean the
Consumer Price Index for All Urban Consumers, (all items),
published by the United States Department of Labor, Bureau
of Labor Statistics (BLS) (1982-84 equal 100), U.S. Cities
Average, or, in the event said index ceases to be published,
by any successor index recommended as a substitute therefor
by the United States Government or a comparable, nonpartisan
substitute reasonably designated by Lessor. If the BLS
changes the base reference period for the Price Index from
198- 84=100, the CPI-U Percentage Increase shall be
determined with the use of such conversion formula or table
as may be published by the BLS.
The term "CPI-U Percentage
Increase" shall mean the percentage increase in the CPI-U
determined by reference to the increase, if any, in the
latest monthly CPI-U issued prior to the first day of the
Lease Year for which Base Rent is being increased, over the
CPI-U issued for the same month in the third year prior
(e.g., the July CPI-U for the year 2000 over the July CPI-U
for the year 1997.) Said month's CPI-U shall be used even
though that CPI-U will not be for the month in which the
renewal term commences. In no event shall the CPI-U
Percentage Increase be less than zero.
(C) Overdue Payments.
Lessee shall pay interest on all overdue payments of
Rent or other monetary amounts due hereunder at the rate of
fifteen percent (15%) per annum or the highest rate allowed
by law, whichever is less, accruing from the date such Rent
or other monetary amounts were properly due and payable.
ARTICLE 5. INSURANCE AND INDEMNITY
(A) Lessee shall, throughout the Term or Renewal
Terms, if any, of this Lease, at its own cost and expense,
procure and maintain insurance which covers the Leased
Premises and improvements against fire, wind, and storm
damage (including flood insurance if the Leased Premises is
in a federally designated flood prone area) and such other
risks (including earthquake insurance, if the Leased
Premises is located in a federally designated earthquake
zone or in an ISO high risk earthquake zone) as may be
included in the broadest form of all risk, extended coverage
insurance as may, from time to time, be available in amounts
sufficient to prevent Lessor or Lessee from becoming a co-
insurer within the terms of the applicable policies. In any
event, the insurance shall not be less than one hundred
percent (100%) of the then insurable value, with such
commercially reasonable deductibles as Lessor may reasonably
require from time to time. Additionally, replacement cost
endorsements, vandalism endorsement, malicious mischief
endorsement, waiver of subrogation endorsement, waiver of co-
insurance or agreed amount endorsement (if available), and
Building Ordinance Compliance endorsement and Rent loss
endorsements (for a period of 90 days) must be obtained.
(B) Lessee agrees to place and maintain throughout the
Term or Renewal Terms, if any, of this Lease, at Lessee's
own expense, public liability insurance with respect to
Lessee's use and occupancy of said premises, including "Dram
Shop" or liquor liability insurance, if the same shall be or
become available in the State of Colorado, with initial
limits of at least $1,000,000 per occurrence/$3,000,000
general aggregate (inclusive of umbrella coverage), or such
additional amounts as Lessor shall reasonably require from
time to time.
(C) Lessee agrees to notify Lessor in writing if
Lessee is unable to procure all or some part of the
aforesaid insurance. In the event Lessee fails to provide
all insurance required under this Lease, Lessor shall have
the right, but not the obligation, to procure such insurance
on Lessee's behalf, following five (5) business days written
notice to Lessee of Lessor's intent to do so (unless
insurance then in place would during such period, or already
has, lapsed, in which case no notice need be given) and
Lessee may obtain such insurance during said five day period
and not then be in default hereunder. If Lessor shall
obtain such insurance, Lessee will then, within five (5)
business days from receiving written notice, pay Lessor the
amount of the premiums due or paid, together with interest
thereon at the lesser of 15% per annum or the highest rate
allowable by law, which amount shall be considered Rent
payable by Lessee in addition to the Rent defined at Article
4 hereof.
(D) All policies of insurance provided for or
contemplated by this Article can be under Lessee's blanket
insurance coverage and shall name Lessor, AEI Fund
Management XVIII, Inc., a Minnesota corporation, and Robert
P. Johnson, as the general partners of Lessor, and Lessee as
additional insured and loss payee, as their respective
interests (as landlord and lessee, respectively) may appear,
and shall provide that the policies cannot be canceled,
terminated, changed, or modified without thirty (30) days
written notice to the parties. In addition, all of such
policies shall be in place on or before the Occupancy Date
and contain endorsements by the respective insurance
companies waiving all rights of subrogation, if any, against
Lessor. All insurance companies providing coverages must be
rated "A" or better by Best's Key Rating Guide (the most
current edition), or similar quality under a successor guide
if Best's Key Rating shall cease to be published. Lessee
shall maintain legible copies of any and all policies and
endorsements required herein, to be made available for
Lessor's review and photocopy upon Lessor's reasonable
request from time to time. On the Occupancy Date and no
less than fifteen (15) business days prior to expiration of
such policies, Lessee shall provide Lessor with legible
copies of any and all renewal Certificates of Insurance
reflecting the above terms of the Policies (including
endorsements). Lessee agrees that it will not settle any
property insurance claims affecting the Leased Premises in
excess of $25,000 without Lessor's prior written consent,
such consent not to be unreasonably withheld or delayed.
Lessor shall consent to any settlement of an insurance claim
wherein Lessee shall confirm in writing with evidence
reasonably satisfactory to Lessor that Lessee has sufficient
funds available to complete the rebuilding of the Premises.
(E) Lessee shall defend, indemnify, and hold Lessor
harmless against any and all claims, damages, and lawsuits
arising after the Occupancy Date of this Lease and any
orders, decrees or judgments which may be entered therein,
brought for damages or alleged damages resulting from any
injury to person or property or from loss of life sustained
in or about the Leased Premises, unless such damage or
injury results from the intentional misconduct or the gross
negligence of Lessor and Lessee agrees to save Lessor
harmless from, and indemnify Lessor against, any and all
injury, loss, or damage, of whatever nature, to any person
or property caused by, or resulting from any act, omission,
or negligence of Lessee or any employee or agent of Lessee.
In addition, Lessee hereby releases Lessor from any and all
liability for any loss or damage caused by fire or any of
the extended coverage casualties, unless such fire or other
casualty shall be brought about by the intentional
misconduct or negligence of Lessor. In the event of any
loss, damage, or injury caused by the joint negligence or
willful misconduct of Lessor and Lessee, they shall be
liable therefor in accordance with their respective degrees
of fault.
(F) Lessor hereby waives any and all rights that it
may have to recover from Lessee damages for any loss
occurring to the Leased Premises by reason of any act or
omission of Lessee; provided, however, that this waiver is
limited to those losses for which Lessor is compensated by
its insurers, if the insurance required by this Lease is
maintained. Lessee hereby waives any and all right that it
may have to recover from Lessor damages for any loss
occurring to the Leased Premises by reason of any act or
omission of Lessor; provided, however, that this waiver is
limited to those losses for which Lessee is, or should be if
the insurance required herein is maintained, compensated by
its insurers.
ARTICLE 6. TAXES, ASSESSMENTS AND UTILITIES
(A) Lessee shall be liable and agrees to pay the
charges for all public utility services rendered or
furnished to the Leased Premises, including heat, water,
gas, electricity, sewer, sewage treatment facilities and the
like, all personal property taxes, real estate taxes,
special assessments, and municipal or government charges,
general, ordinary and extraordinary, of every kind and
nature whatsoever, which may be levied, imposed, or assessed
against the Leased Premises, or upon any improvements
thereon, at any time after the Occupancy Date of this Lease
for the period prior to the expiration of the term hereof,
or any Renewal Term, if exercised.
(B) Lessee shall pay all real estate taxes,
assessments for public improvements or benefits, and other
governmental impositions, duties, and charges of every kind
and nature whatsoever which shall or may, during the term of
this Lease, be charged, laid, levied, assessed, or imposed
upon, or become a lien or liens upon the Leased Premises or
any part thereof. Such payments shall be considered as Rent
paid by Lessee in addition to the Rent defined at Article 4
hereof. If due to a change in the method of taxation, a
franchise tax, Rent tax, or income or profit tax shall be
levied against Lessor in substitution for or in lieu of any
tax which would otherwise constitute a real estate tax, such
tax shall be deemed a real estate tax for the purposes
herein and shall be paid by Lessee; otherwise Lessee shall
not be liable for any such tax levied against Lessor.
(C) All real estate taxes, assessments for public
improvements or benefits, water rates and charges, sewer
rents, and other governmental impositions, duties, and
charges which shall become payable for the first and last
tax years of the term hereof shall be apportioned pro rata
between Lessor and Lessee in accordance with the respective
number of months during which each party shall be in
possession of the Leased Premises (or through the expiration
of the term hereof, if longer) in said respective tax years.
Lessee shall pay within 60 days of the expiration of the
term hereof Lessor's reasonable estimate of Lessee's pro-
rata share of real estate taxes for the last tax year of the
term hereof, based upon the last available tax bill. Lessor
shall give Lessee notice of such estimated pro-rata real
estate taxes no later than 75 days from the end of the term
hereof. Upon receipt of the actual statement of real estate
taxes for such prorated period, Lessor shall either refund
to Lessee any over payment of the pro-rata Lessee
obligation, or shall assess and Lessee shall pay promptly
upon notice any remaining portion of the Lessee's pro-rata
obligation for such real estate taxes.
(D) Lessee shall have the right to contest or review
by legal proceedings or in such other manner as may be legal
(which, if instituted, shall be conducted solely at Lessee's
own expense) any tax, assessment for public improvements or
benefits, or other governmental imposition aforementioned,
upon condition that, before instituting such proceeding
Lessee shall pay (under protest) such tax or assessments for
public improvements or benefits, or other governmental
imposition, duties and charges aforementioned, unless such
payment would act as a bar to such contest or interfere
materially with the prosecution thereof and in such event
Lessee shall post with Lessor alternative security
reasonably satisfactory to Lessor. All such proceedings
shall be begun as soon as reasonably possible after the
imposition or assessment of any contested items and shall
be prosecuted to final adjudication with reasonable
dispatch. In the event of any reduction, cancellation, or
discharge, Lessee shall pay the amount that shall be finally
levied or assessed against the Leased Premises or
adjudicated to be due and payable, and, if there shall be
any refund payable by the governmental authority with
respect thereto, if Lessee has paid the expense of Lessor in
such proceedings, Lessee shall be entitled to receive and
retain the refund, subject, however, to apportionment as
provided during the first and last years of the term of this
Lease.
(E) Lessor, within sixty (60) days after notice to
Lessee if Lessee fails to commence such proceedings, may,
but shall not be obligated to, contest or review by legal
proceedings, or in such other manner as may be legal, and at
Lessor's own expense, any tax, assessments for public
improvements and benefits, or other governmental imposition
aforementioned, which shall not be contested or reviewed, as
aforesaid, by Lessee, and unless Lessee shall promptly join
with Lessor in such contest or review, Lessor shall be
entitled to receive and retain any refund payable by the
governmental authority with respect thereto.
(F) Lessor shall not be required to join in any
proceeding referred to in this Article, unless in Lessee's
reasonable opinion, the provisions of any law, rule, or
regulation at the time in effect shall require that such a
proceeding be brought by and/or in the name of Lessor, in
which event Lessor shall upon written request, join in such
proceedings or permit the same to be brought in its name,
all at no cost or expense to Lessor.
(G) Within thirty (30) days after Lessor notifies
Lessee in writing that Lessor has paid such amount, Lessee
shall also pay to Lessor, as additional Rent, the amount of
any sales tax, franchise tax, excise tax, on Rents imposed
by the State where the Leased Premises are located. At
Lessor's option, Lessee shall deposit with Lessor on the
first day of each and every month during the term hereof, an
amount equal to one-twelfth (1/12) of any estimated sales
tax payable to the State in which the property is situated
for Rent received by Lessor hereunder ("Deposit"). From
time to time out of such Deposit Lessor will pay the sales
tax to the State in which the property is situated as
required by law. In the event the Deposit on hand shall not
be sufficient to pay said tax when the same shall become due
from time to time, or the prior payments shall be less than
the current estimated monthly amounts, then Lessee shall pay
to Lessor on demand any amount necessary to make up the
deficiency. The excess of any such Deposit shall be
credited to subsequent payments to be made for such items.
If a default or an event of default shall occur under the
terms of this Lease, Lessor may, at its option, without
being required so to do, apply any Deposit on hand to cure
such default, in such order and manner as Lessor may elect.
ARTICLE 7. PROHIBITION ON ASSIGNMENTS AND SUBLETTING;TAKE-BACK
RIGHTS
(A) Except as otherwise expressly provided in this
Article, Lessee shall not, without obtaining the prior
written consent of Lessor, in each instance:
1. assign or otherwise transfer this Lease, or
any part of Lessee's right, title or interest therein;
2. sublet all or any part of the Leased Premises
or allow all or any part of the Leased Premises to be used
or occupied by any other Persons (herein defined as a Party
other than Lessee, be it a corporation, a partnership, an
individual or other entity); or
3. mortgage, pledge or otherwise encumber this
Lease, or the Leased Premises.
(B) For the purposes of this Article:
1. the transfer of voting control of any class
of capital stock of any corporate Lessee or sublessee, or
the transfer voting control of the total interest in any
other person which is a Lessee or sublessee, however
accomplished, whether in a single transaction or in a series
of related or unrelated transactions, shall be deemed an
assignment of this Lease, or of such sublease, as the case
may be;
2. an agreement by any other Person, directly or
indirectly, to assume Lessee's obligations under this Lease
shall be deemed an assignment;
3. any Person to whom Lessee's interest under
this Lease passes by operation of law, or otherwise, shall
be bound by the provisions of this Article;
4. each material modification, amendment or
extension or any sublease to which Lessor has previously
consented shall be deemed a new sublease; and
5. Lessee shall present the signed consent to
such assignment and/or subletting from any guarantors of
this Lease, such consent to be in form and substance
reasonably satisfactory to Lessor.
Lessee agrees to furnish to Lessor within five (5)
business days following demand at any time such information
and assurances as Lessor may reasonably request that neither
Lessee, nor any previously permitted sublessee or assignee,
has violated the provisions of this Article.
(C) If Lessee agrees to assign this Lease or to sublet
all or any portion of the Leased Premises, Lessee shall,
prior to the effective date thereof (the "Effective Date"),
deliver to Lessor executed counterparts of any such
agreement and of all ancillary agreements with the proposed
assignee or sublessee, as applicable. If Lessee shall fail
to do so, and shall have surrendered possession of the
Leased Premises in violation of its duty of prior notice and
failed to obtain Lessor's prior consent (if and where
required herein), and, if in such event, Lessor in its sole
discretion (except as otherwise specifically limited herein)
shall not consent to a proposed sublease or assignment,
Lessor shall then have all of the following rights, any of
which Lessor may exercise by written notice to Lessee given
within thirty (30) days after Lessor receives the
aforementioned documents:
1. with respect to a proposed assignment of this
Lease, the right to terminate this Lease on the Effective
Date as if it were the Expiration Date of this Lease;
2. with respect to a proposed subletting of the
entire Leased Premises, the right to terminate this Lease on
the Effective Date as if it were the Expiration Date; or
3. with respect to a proposed subletting of less
than the entire Leased Premises, the right to terminate this
Lease as to the portion of the Leased Premises affected by
such subletting on the Effective Date, as if it were the
Expiration Date, in which case Lessee shall promptly execute
and deliver to Lessor an appropriate modification of this
Lease in form satisfactory to Lessor in all respects.
4. with respect to a proposed subletting or
proposed assignment of this Lease, impose such conditions
upon Lessor's consent as Lessor shall determine in its sole
discretion.
(D) If Lessor exercises any of its options under
Article 7(C) above, (and if Lessor shall impose conditions
upon its consent and Lessee shall fail to meet any
conditions Lessor may impose upon its consent), Lessor may
then lease the Leased Premises or any portion thereof to
Lessee's proposed assignee or sublessee, as the case may be,
without liability whatsoever to Lessee.
(E) Notwithstanding anything above to the contrary,
Lessor agrees to consent to any assignment or sublease all
or any portion of the Lessee's interests herein to Unique
Casual Restaurants, Inc. or a franchisee or licensee in good
standing of Fuddruckers, Inc, for the Fuddruckers restaurant
concept, provided Lessor is given prior written notice of
such sublease or assignment, accompanied by a copy of such
sublease or assignment, and the consents of Lessee and
Guarantors (such consent to be in form and substance
satisfactory to Lessor) to such assignment or sublet,
affirming their continued liability hereunder (or under
their guaranty, respectively).
Lessor agrees that its consent to any other proposed
assignment or sublet shall not be unreasonably withheld or
delayed, provided Lessor is given prior written notice of
such sublease or assignment, accompanied by a copy of such
sublease or assignment, and the consents of Lessee and
Guarantors (such consent to be in form and substance
satisfactory to Lessor) to such assignment or sublet,
affirming their continued liability hereunder (or under
their guaranty, respectively).
ARTICLE 8. REPAIRS AND MAINTENANCE
(A) Lessee covenants and agrees to keep and maintain
in good order, condition and repair the interior and
exterior of the Leased Premises during the term of the
Lease, or any renewal terms, and further agrees that Lessor
shall be under no obligation to make any repairs or perform
any maintenance to the Leased Premises. Lessee covenants
and agrees that it shall be responsible for all repairs,
alterations, replacements, or maintenance of, including but
without limitation to or of: The interior and exterior
portions of all doors; door checks and operators; windows;
plate glass; plumbing; water and sewage facilities;
fixtures; electrical equipment; interior walls; ceilings;
signs; roof; structure; interior building appliances and
similar equipment; heating and air conditioning equipment;
and any equipment owned by Lessor and leased to Lessee
hereunder, as itemized on Exhibit B attached hereto and
incorporated herein by reference; and further agrees to
replace any of said equipment when necessary. Lessee
further agrees to be responsible for, at its own expense,
snow removal, lawn maintenance, landscaping, maintenance of
the parking lot (including parking lines, seal coating, and
blacktop surfacing), and other similar items.
(B) If Lessee refuses or neglects to commence or
complete repairs promptly and adequately, after prior
written notice as required under Article 16(B) (except in
cases of emergency to prevent waste or preserve the safety
and integrity of the Leased Premises, in which case no
notice need be given), Lessor may cause such repairs to be
made, but shall not be required to do so, and Lessee shall
pay the cost thereof to Lessor within five (5) business days
following demand. It is understood that Lessee shall pay
all expenses and maintenance and repair during the term of
this Lease. If Lessee is not then in default hereunder,
Lessee shall have the right to make repairs and improvements
to the Leased Premises without the consent of Lessor if such
repairs and improvements do not exceed Fifty Thousand
Dollars ($50,000.00), provided such repairs or improvements
do not affect the structural integrity of the Leased
Premises. Any repairs or improvements in excess of Fifty
Thousand Dollars ($50,000.00) or affecting the structural
integrity of the Leased Premises may be done only with the
prior written consent of Lessor, such consent not to be
unreasonably withheld or delayed. All alterations and
additions to the Leased Premises shall be made in accordance
with all applicable laws and shall remain for the benefit of
Lessor, except for Lessee's moveable trade fixtures. In the
event of making such alterations as herein provided, Lessee
further agrees to indemnify and save harmless Lessor from
all expense, liens, claims or damages to either persons or
property or the Leased Premises which may arise out of or
result from the undertaking or making of said repairs,
improvements, alterations or additions, or Lessee's failure
to make said repairs, improvements, alterations or
additions.
ARTICLE 9. COMPLIANCE WITH LAWS AND REGULATIONS
Lessee will comply with all statutes, ordinances,
rules, orders, regulations and requirements of all federal,
state, city and local governments, and with all rules,
orders and regulations of the applicable Board of Fire
Underwriters which affect the use of the improvements.
Lessee will comply with all easements, restrictions, and
covenants of record against or affecting the Leased Premises
and any franchise or license agreements required for
operation of the Leased Premises in accordance with Article
14 hereof.
ARTICLE 10. SIGNS
Lessee shall have the right to install and maintain a
sign or signs advertising Lessee's business, provided that
the signs conform to law, and further provided that the sign
or signs conform specifically to the written requirements of
the appropriate governmental authorities.
ARTICLE 11. SUBORDINATION
(A) Lessor reserves the right and privilege to subject
and subordinate this Lease at all times to the lien of any
mortgage or mortgages now or hereafter placed upon Lessor's
interest in the Leased Premises and on the land and
buildings of which said premises are a part, or upon any
buildings hereafter placed upon the land of which the Leased
Premises are a part, provided such mortgagee shall execute
its standard form, commercially reasonable subordination,
attornment and non-disturbance agreement. Lessor also
reserves the right and privilege to subject and subordinate
this Lease at all times to any and all advances to be made
under such mortgages, and all renewals, modifications,
extensions, consolidations, and replacements thereof,
provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement.
(B) Lessee covenants and agrees to execute and
deliver, upon demand, such further instrument or instruments
subordinating this Lease on the foregoing basis to the lien
of any such mortgage or mortgages as shall be desired by
Lessor and any proposed mortgagee or proposed mortgagees,
provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement.
ARTICLE 12. CONDEMNATION OR EMINENT DOMAIN
(A) If the whole of the Leased Premises are taken by
any public authority under the power of eminent domain, or
by private purchase in lieu thereof, then this Lease shall
automatically terminate upon the date possession is
surrendered, and Rent shall be paid up to that day. If any
part of the Leased Premises shall be so taken as to render
the remainder thereof materially unusable in the opinion of
a licensed third party architect reasonably approved by
Lessor and Lessee, for the purposes for which the Leased
Premises were leased, then Lessor and Lessee shall each have
the right to terminate this Lease on thirty (30) days notice
to the other given within ninety (90) days after the date of
such taking. In the event that this Lease shall terminate
or be terminated, the Rent shall, if and as necessary, be
paid up to the day that possession was surrendered.
(B) If any part of the Leased Premises shall be so
taken such that it does not materially interfere with the
business of Lessee, then Lessee shall, with the use of the
condemnation proceeds to be made available by Lessor, but
otherwise at Lessee's own cost and expense, restore the
remaining portion of the Leased Premises to the extent
necessary to render it reasonably suitable for the purposes
for which it was leased. Lessee shall make all repairs to
the building in which the Leased Premises is located to the
extent necessary to constitute the building a complete
architectural unit. Provided, however, that such work shall
not exceed the scope of the work required to be done by
Lessee in originally constructing such building unless
Lessee shall demonstrate to Lessor's reasonable satisfaction
the availability of funds to complete such work. Provided,
further, the cost thereof to Lessor shall not exceed the
proceeds of its condemnation award, all to be done without
any adjustments in Rent to be paid by Lessee. This lease
shall be deemed amended to reflect the taking in the legal
description of the Leased Premises.
(C) All compensation awarded or paid upon such total
or partial taking of the Leased Premises shall belong to and
be the property of Lessor without any participation by
Lessee, whether such damages shall be awarded as
compensation for diminution in value to the leasehold or to
the fee of the premises herein leased. Nothing contained
herein shall be construed to preclude Lessee from
prosecuting any claim directly against the condemning
authority in such proceedings for: Loss of business; damage
to or loss of value or cost of removal of inventory, trade
fixtures, furniture, and other personal property belonging
to Lessee; provided, however, that no such claim shall
diminish or otherwise adversely affect Lessor's award or the
award of any fee mortgagee.
ARTICLE 13. RIGHT TO INSPECT
Lessor reserves the right to enter upon, inspect and
examine the Leased Premises at any time during business
hours, after reasonable notice to Lessee, and Lessee agrees
to allow Lessor free access to the Leased Premises to show
the premises. Upon default by Lessee or at any time within
ninety (90) days of the expiration or termination of the
Lease, Lessee agrees to allow Lessor to then place "For
Sale" or "For Rent" signs on the Leased Premises. Lessor
and Lessor's representatives shall at all times while upon
or about the Leased Premises observe and comply with
Lessee's reasonable health and safety rules, regulations,
policies and procedures. Lessor agrees to indemnify and
hold Lessee, its successors, assigns, agents and employees
from and against any liability, claims, demands, cause of
action, suits and other litigation or judgements of every
kind and character, including injury to or death of any
person or persons, or trespass to, or damage to, or loss or
destruction of, any property, whether real or personal, to
the extent resulting from the negligence or willful
misconduct or Lessor or Lessor's representatives while upon
or about the Leased Premises.
ARTICLE 14. EXCLUSIVE USE
(A) After the Occupancy Date, Lessee expressly agrees
and warrants that the Leased Premises will be used
exclusively as a Champps Restaurant or other casual dining
sit-down restaurant. In any other such case, after
obtaining Lessor's prior written consent, such consent not
to be unreasonably withheld or delayed, Lessee may conduct
any lawful business from the Leased Premises. Lessee
acknowledges and agrees that any other use without the prior
written consent of Lessor will constitute a default under
and a violation and breach of this Lease. Lessee agrees:
To open for business on the first day in respect of which
Rent is payable; to operate all of the Leased Premises
during the Term or Renewal Terms during regular and
customary hours for businesses similar to the permitted
exclusive use stated herein, unless prevented from doing so
by causes beyond Lessee's control or due to remodeling; and
to conduct its business in a professional and reputable
manner.
(B) If the Leased Premises are not operated as a
Champps Restaurant or other casual dining sit-down
restaurant or other permitted use hereunder, or remain
closed for thirty (30) consecutive days (unless such closure
results from reasons beyond Lessee's reasonable control) and
in the event Lessee fails to pay Rent when due or fulfill
any other obligation hereunder, then Lessee shall be in
default hereunder and Lessor may, at its option, cancel this
Lease by giving written notice to Lessee or exercise any
other right or remedy that Lessor may have; provided,
however, that closings shall be reasonably permitted for
replacement of trade fixtures or during periods of repair
after destruction or due to remodeling.
ARTICLE 15. DESTRUCTION OF PREMISES
If, during the term of this Lease, the Leased Premises
are totally or partially destroyed by fire or other
elements, within a reasonable time (but in no event longer
than one hundred eighty (180) days and subject to the
provisions herein below), Lessee shall repair and restore
the improvements so damaged or destroyed as nearly as may be
practical to their condition immediately prior to such
casualty. All rents payable by Lessee shall be abated
during the period of repair and restoration to the extent
that Lessor shall be compensated by the proceeds of the rent
loss insurance required to be maintained by Lessee
hereunder.
Provided Lessee is not in default hereunder (and
retains according to the terms hereof the right to rebuild)
with the Lessor's prior written consent, which consent shall
not be unreasonably withheld or delayed, Lessee shall have
the right to promptly and in good faith settle and adjust
any claim under such insurance policies with the insurance
company or companies on the amounts to be paid upon the
loss. The insurance proceeds shall be used to reimburse
Lessee for the cost of rebuilding or restoration of the
Leased Premises. Risk that the insurance company shall be
insolvent or shall refuse to make insurance proceeds
available shall be with Lessee. The Leased Premises shall be
so restored or rebuilt so as to be of at least equal value
and substantially the same character as prior to such damage
or destruction. If the insurance proceeds are less than
Fifty Thousand Dollars ($50,000), they shall be paid to
Lessee for such repair and restoration. If the insurance
proceeds are greater than or equal to Fifty Thousand Dollars
($50,000), they shall be deposited by Lessee and Lessor into
a customary construction escrow at a nationally recognized
title insurance company, or at Lessee's option, with Lessor
("Escrowee") and shall be made available from time to time
to Lessee for such repair and restoration. Such proceeds
shall be disbursed in conformity with the terms and
conditions of a commercially reasonable construction loan
agreement. Lessee shall, in either instance, deliver to
Lessor or Escrowee (as the case may be) satisfactory
evidence of the estimated cost of completion together with
such architect's certificates, waivers of lien, contractor's
sworn statements and other evidence of cost and of payments
as the Lessor or Escrowee may reasonably require and
approve. If the estimated cost of the work exceeds One
Hundred Thousand Dollars ($100,000), all plans and
specifications for such rebuilding or restoration shall be
subject to the reasonable approval of Lessor.
Any insurance proceeds remaining with Escrowee after
the completion of the repair or restoration shall be paid to
Lessor to reduce the sum of monies expended by Lessor to
acquire its interest in the Lease Premises and rent
hereunder shall be reduced by 11% of such amount.
If the proceeds from the insurance are insufficient,
after review of the bids for completion of such
improvements, or should become insufficient during the
course of construction, to pay for the total cost of repair
or restoration, Lessee shall, prior to commencement of work,
demonstrate to Escrowee and Lessor's reasonable
satisfaction, the availability of such funds necessary to
completion construction and Lessee shall deposit the same
with Escrowee for disbursement under the construction escrow
agreement.
Provided, further, that should the Leased Premises be
damaged or destroyed to the extent of fifty (50%) percent of
its value or such that Lessee cannot carry on business as a
casual dining restaurant without (in the opinion of a
licensed third party architect reasonably approved by Lessor
and Lessee) being closed for more than sixty (60) days
(which duration of closure may be established by Lessee by
the affidavit of the approved independent third party
architect as to the estimated time of repair) during the
last two (2) years of the remaining term of this Lease or
any of the option terms of this Lease, if any further
options to renew remain, Lessee may elect within 30 days of
such damage, to then exercise at least one (1) option to
renew this Lease so that the remaining term of the Lease is
not less than five (5) years in order to be entitled to such
insurance proceeds for restoration or rebuilding. Absent
such election, this Lease shall terminate upon Lessor's
receipt of the insurance proceeds at least equal to the
estimated cost of such repair or restoration.
ARTICLE 16. ACTS OF DEFAULT
Each of the following shall be deemed a default by
Lessee and a breach of this Lease:
(A) Failure to pay the Rent or any monetary
obligation herein reserved, or any part thereof when the
same shall be due and payable. Interest and late charges
for failure to pay Rent when due shall accrue from the first
date such Rent was due and payable; provided, however,
Lessee shall have five (5) business days after written
notice from Lessor within which to cure the failure to pay
the Rent or any monetary obligation herein reserved.
(B) Failure to do, observe, keep and perform any
of the other terms, covenants, conditions, agreements and
provisions in this Lease to be done, observed, kept and
performed by Lessee; provided, however, that Lessee shall
have Thirty (30) days after written notice from Lessor
within which to cure such default, or such longer time as
may be reasonably necessary if such default cannot
reasonably be cured within Thirty (30) days, if Lessee is
diligently pursuing a course of conduct that in Lessor's
reasonable opinion is capable of curing such default, but in
any event such longer time shall not exceed 120 days after
written notice from Lessor of the default hereunder.
(C) The abandonment of the premises by Lessee,
the adjudication of Lessee as a bankrupt, the making by
Lessee of a general assignment for the benefit of creditors,
the taking by Lessee of the benefit of any insolvency act
or law, the appointment of a permanent receiver or trustee
in bankruptcy for Lessee property, or the appointment of a
temporary receiver which is not vacated or set aside within
sixty (60) days from the date of such appointment; provided,
however, that the foregoing shall not constitute events of
default so long as Lessee continues to otherwise satisfy its
obligations (including but not limited to the payment of
Rent) hereunder.
ARTICLE 17. TERMINATION FOR DEFAULT
In the event of any uncured default by Lessee and at
any time thereafter, Lessor may serve a written notice upon
Lessee that Lessor elects to terminate this Lease. This
Lease shall then terminate on the date so specified as if
that date had been originally fixed as the expiration date
of the term herein granted, provided, however, that Lessee
shall have continuing liability for future rents for the
remainder of the original term and any exercised renewal
term as set forth in Article 19, notwithstanding any earlier
termination of the Lease hereunder (except where Lessee has
exercised a right to terminate where granted herein),
preserving unto Lessor the benefit of its bargained-for
rental payments.
ARTICLE 18. LESSOR'S RIGHT OF RE-ENTRY
In the event that this Lease shall be terminated as
hereinbefore provided, or by summary proceedings or
otherwise, or in the event of an uncured default hereunder
by Lessee, or in the event that the premises or any part
thereof, shall be abandoned by Lessee and Rent shall not be
paid or other obligations (including but not limited to
repair and maintenance obligations) of Lessee hereunder
shall not be met, then Lessor or its agents, servants or
representatives, may immediately or at any time thereafter,
re-enter and resume possession of the premises or any part
thereof, and remove all persons and property therefrom,
either by summary dispossess proceedings or by a suitable
action or proceeding at law, or by force or otherwise
without being liable for any damages therefor, except for
damages resulting from Lessor's negligence or willful
misconduct. Notwithstanding anything above to the contrary,
if Lessee is still in possession of the Leased Premises,
Lessor agrees to use such legal proceedings (summary or
otherwise) prescribed by law to regain possession of the
Leased Premises.
ARTICLE 19. LESSEE'S CONTINUING LIABILITY
(A) Should Lessor elect to re-enter as provided in
this Lease or should it take possession pursuant to legal
proceedings or pursuant to any notice provided for by law,
Lessor shall undertake commercially reasonable efforts to
mitigate Lessee's continuing liability hereunder as such
efforts may be prescribed by law or statute (which shall
include listing the Leased Premises with a licensed
commercial real estate broker and securing the property
against waste, but shall not otherwise include the
expenditure of Lessor's funds, unless the same be required
by law or statute), and in addition, Lessor may either (i)
terminate this Lease or (ii) it may from time to time,
without terminating the contractual obligation of Lessee to
pay Rent under this Lease, make such alterations and repairs
as may be necessary to relet the Leased Premises or any part
thereof for the remainder of the original Term or any
exercised Renewal Terms, at such Rent or Rents, and upon
such other terms and conditions as Lessor in its sole
discretion may deem advisable. Termination of Lessee's
right to possession by Court Order shall be sufficient
evidence of the termination of Lessee's possessory rights
under this Lease, and the filing of such an Order shall be
notice of the termination of Lessee's Right of First Refusal
as set forth in any Memorandum of Lease of record.
(B) Upon each such reletting, without termination of
the contractual obligation of Lessee to pay Rent under this
Lease, all Rents received by Lessor shall be applied as
follows:
1. First, to the payment of any indebtedness
other than Rent due hereunder from Lessee to Lessor;
2. Second, to the payment of any costs and
expenses of such reletting, including brokerage fees and
attorney's fees and of costs of such alterations and
repairs;
3. Third, to the payment of Rent and other
monetary obligations due and unpaid hereunder;
4. Finally, the residue, if any, shall be held
by Lessor and applied in payment of future Rent as the same
may become due and payable hereunder.
If such Rents received from such reletting during any month
are less than that to be paid during that month by Lessee
hereunder, Lessee shall pay any such deficiency to Lessor.
Such deficiency shall be calculated and paid monthly. No
such re-entry or taking possession of such Leased Premises
by Lessor shall be construed as an election on its part to
terminate Lessee's contractual obligations under this Lease
respecting the payment of rent and obligations for the costs
of repair and maintenance unless a written notice of such
intention be given to Lessee.
(C) Notwithstanding any such reletting without
termination, Lessor may at any time thereafter elect to
terminate this Lease for any uncured breach.
(D) In addition to any other remedies Lessor may have
with this Article 19, Lessor may recover from Lessee all
damages it may incur by reason of any uncured breach,
including: The cost of recovering and reletting the Leased
Premises; reasonable attorney's fees; and, the present value
(discounted at a rate of 8% per annum) of the excess of the
amount of Rent and charges equivalent to Rent reserved in
this Lease for the remainder of the Term over the then
reasonable Rent value of the Leased Premises (or the actual
Rents receivable by Lessor, if relet), (the Lessee bearing
the burden of proof to demonstrate the amount of rental loss
for the same period, that through reasonable efforts to
mitigate damages, could have been avoided) for the remainder
of the Term, all of which amounts shall be immediately due
and payable from Lessee to Lessor in full. In the event
that the Rent obtained from such alternative or substitute
tenant is more than the Rent which Lessee is obligated to
pay under this Lease, then such excess shall be paid to
Lessor provided that Lessor shall credit such excess against
the outstanding obligations of Lessee due pursuant hereto,
if any.
(E) It is the object and purpose of this Article 19
that Lessor shall be kept whole and shall suffer no damage
by way of non-payment of Rent or by way of diminution in
Rent. Lessee waives and will waive all rights to trial by
jury in any summary proceedings or in any action brought to
recover Rent herein which may hereafter be instituted by
Lessor against Lessee in respect to the Leased Premises.
Lessee hereby waives any rights of re-entry it may have or
any rights of redemption or rights to redeem this Lease upon
a termination of this Lease.
ARTICLE 20. PERSONALTY, FIXTURES AND EQUIPMENT
(A) All building fixtures, building machinery, and
building equipment used in connection with the operation of
the Leased Premises including, but not limited to, heating,
electrical wiring, lighting, ventilating, plumbing, walk-in
refrigerators/coolers, walk-in freezers, air conditioning
systems, and the equipment owned by Lessor and leased to
Lessee hereunder as specifically set forth on Exhibit B
attached hereto and incorporated herein by reference shall
be the property of Lessor. All other trade fixtures and all
other articles of personal property owned by Lessee shall
remain the property of Lessee.
(B) Lessee shall furnish and pay for any and all
equipment, furniture, trade fixtures, and signs, except for
such items, if any, described in Article 20(A) above, as
owned by Lessor. Lessee agrees that Lessor shall have a
lien on all Lessee's equipment, furniture, trade fixtures,
furnishings, and signs as security for the performance of
and compliance with this Lease, subject to the rights of any
bona fide third party's security interest in such property.
Provided Lessee is not in default hereunder, Lessor will
agree that its interest in the personal property of Lessee
will be subordinated to financing which may exist or which
Lessee may cause to exist in the future on that same
personal property.
(C) At the end of the term of this Lease, the property
described at Article 20(B) above, after written notice to
Lessor given at least ten (10) business days prior to any
proposed removal, may be removed from the Leased Premises by
Lessee regardless of whether or not such property is
attached to the Leased Premises so as to constitute a
"fixture" within the meaning of the law; however, all
damages and repairs to the Leased Premises which may be
caused by the removal of such property shall be paid for by
Lessee.
ARTICLE 21. LIENS
Lessee shall not do or cause anything to be done
whereby the Leased Premises may be encumbered by any
mechanic's or other liens. Whenever and as often as any
mechanic's or other lien is filed against said Leased
Premises purporting to be for labor or materials furnished
or to be furnished to Lessee, Lessee shall remove the lien
of record by payment or by bonding with a surety company
authorized to do business in the state in which the property
is located, within forty-five (45) days from the date of the
filing of said mechanic's or other lien and delivery of
notice thereof to Lessee. Should Lessee fail to take the
foregoing steps within said forty-five (45) day period (or
in any event, prior to the expiration of the time within
which Lessee may bond over such lien to remove it as a lien
upon the Leased Premises), Lessor shall have the right,
among other things, to pay said lien without inquiring into
the validity thereof, and Lessee shall forthwith reimburse
Lessor for the total expense incurred by it in discharging
said lien as additional Rent hereunder.
ARTICLE 22. NO WAIVER BY LESSOR EXCEPT IN WRITING
No agreement to accept a surrender of the Leased
Premises or termination of this Lease shall be valid unless
in writing signed by Lessor. The delivery of keys to any
employee of Lessor or Lessor's agents shall not operate as a
termination of the Lease or a surrender of the premises.
The failure of Lessor to seek redress for violation of any
rule or regulation, shall not prevent a subsequent act,
which would have originally constituted a violation, from
having all the force and effect of an original violation.
Neither payment by Lessee or receipt by Lessor of a lesser
amount than the Rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated Rent. Nor
shall any endorsement or statement on any check nor any
letter accompanying any check or payment as Rent be deemed
an accord and satisfaction. Lessor may accept such check or
payment without prejudice to Lessor's right to recover the
balance of such Rent or pursue any other remedy provided in
this Lease. This Lease contains the entire agreement
between the parties, and any executory agreement hereafter
made shall be ineffective to change it, modify it or
discharge it, in whole or in part, unless such executory
agreement is in writing and signed by the party against whom
enforcement of the change, modification or discharge is
sought.
ARTICLE 23. QUIET ENJOYMENT
Lessor covenants that Lessee, upon paying the Rent set
forth in Article 4 and all other sums herein reserved as
Rent and upon the due performance of all the terms,
covenants, conditions and agreements herein contained on
Lessee's part to be kept and performed, shall have, hold and
enjoy the Leased Premises free from molestation, eviction,
or disturbance by Lessor, or by any other person or persons
lawfully claiming the same, and that Lessor has good right
to make this Lease for the full term granted, including
renewal periods.
ARTICLE 24. BREACH - PAYMENT OF COSTS AND ATTORNEYS' FEES
Each party agrees to pay and discharge all reasonable
costs, and actual attorneys' fees, including but not limited
to attorney's fees incurred at the trial level and in any
appellate or bankruptcy proceeding, and expenses that shall
be incurred by the prevailing party in enforcing the
covenants, conditions and terms of this Lease or defending
against an alleged breach, including the costs of reletting.
Such costs, attorneys fees, and expenses if incurred by
Lessor shall be considered as Rent as due and owing in
addition to any Rent defined in Article 4 hereof.
ARTICLE 25. ESTOPPEL CERTIFICATES
Either party to this Lease will, at any time, upon not
less than ten (10) business days prior request by the other
party, execute, acknowledge and deliver to the requesting
party a statement in writing, executed by an executive
officer of such party, certifying that: (a) this Lease is
unmodified (or if modified then disclosure of such
modification shall be made); (b) this Lease is in full force
and effect; (c) the date to which the Rent and other charges
have been paid; and (d) to the knowledge of the signer of
such certificate that the other party is not in default in
the performance of any covenant, agreement or condition
contained in this Lease, or if a default does exist,
specifying each such default of which the signer may have
knowledge. It is intended that any such statement delivered
pursuant to this Article may be relied upon by any
prospective purchaser or mortgagee of the Leased Premises or
any assignee of such mortgagee or a purchaser of the
leasehold estate.
ARTICLE 26. FINANCIAL STATEMENTS
During the term of this Lease, Lessee will, within
ninety (90) days after the end of Lessee's fiscal year,
furnish its financial statements to Lessor. Lessee's
financial statements shall include, at a minimum, a
consolidated balance sheet and statement of operations, and
do not need to be prepared by an independent certified
public accountant, but shall be prepared in conformity with
generally accepted accounting principles (hereafter "GAAP")
and be represented and warranted in writing as true and
correct by the chief financial officer or other authorized
officer of Lessee. Additionally, during the term of the
Lease, Lessee will within forty-five (45) days from the end
of each quarter of each fiscal year, furnish Lessor with
Lessee's financial statements and operating statements of
the Leased Premises for such quarter. Lessor shall have the
right to require such financial statements and operating
statements on a monthly basis after the occurrence of a
default. Said quarterly (or monthly, if requested by
Lessor) statements do not need to be prepared by an
independent certified public accountant, but shall be
represented and warranted in writing as true and correct by
the chief financial officer or other authorized officer of
Lessee. The financial statements shall conform to GAAP, and
include, at a minimum, a balance sheet and statement of
operations.
ARTICLE 27. MORTGAGE
Lessee does hereby agree to make reasonable
modifications of this Lease requested by any Mortgagee of
record from time to time, provided such modifications are
not substantial and do not increase any of the Rents or
obligations of Lessee under this Lease or substantially
modify any of the business elements of this Lease.
ARTICLE 28. OPTION TO RENEW
If this Lease is not previously canceled or terminated
and if Lessee has materially complied with and performed all
of the covenants and conditions in this Lease after
applicable cure periods and is not currently in default,
then Lessee shall have the option to renew this Lease upon
the same conditions and covenants contained in this Lease
for Three (3) consecutive periods of Five (5) years each
(singularly "Renewal Term"). Rent during the Twenty-Second,
Twenty-Fifth, Twenty-Eighth, Thirty-First, and Thirty-Fourth
Lease Year of the Renewal Term shall increase by Seven and
Thirty-Five One Hundredths Percent (7.35%) of the Rent
payable for the preceding Lease Year.
The first Renewal Term will commence on the day
following the date the original Term expires and successive
Renewal Terms would commence on the day of following the
last day of the then expiring Renewal Term. Except as
otherwise provided in Article 15 hereof, Lessee must give
ninety (90) days written notice to Lessor of its intent to
exercise this option prior to the expiration of the original
Term of this Lease or any Renewal Term, as the case may be.
ARTICLE 29. MISCELLANEOUS PROVISIONS
(A) All written notices shall be given to Lessor or
Lessee by certified mail or nationally recognized overnight
mail. Notices to either party shall be addressed to the
person and address given on the first page hereof. Lessor
and Lessee may, from time to time, change these addresses by
notifying each other of this change in writing. Notices of
overdue Rent may be sent to Lessee by regular, special
delivery, or nationally recognized overnight mail.
(B) The terms, conditions and covenants contained in
this Lease and any riders and plans attached hereto shall
bind and inure to the benefit of Lessor and Lessee and their
respective successors, heirs, legal representatives, and
assigns.
(C) This Lease shall be governed by and construed
under the laws of the State where the Leased Premises are
situate.
(D) In the event that any provision of this Lease
shall be held invalid or unenforceable, no other provisions
of this Lease shall be affected by such holding, and all of
the remaining provisions of this Lease shall continue in
full force and effect pursuant to the terms hereof.
(E) The Article captions are inserted only for
convenience and reference, and are not intended, in any way,
to define, limit, describe the scope, intent, and language
of this Lease or its provisions.
(F) In the event Lessee remains in possession of the
premises herein leased after the expiration of this Lease
and without the execution of a new lease and without
Lessor's written permission, Lessee shall be deemed to be
occupying said premises as a tenant from month-to-month,
subject to all the conditions, provisions, and obligations
of this Lease insofar as the same can be applicable to a
month-to-month tenancy except that the monthly installment
of Rent shall be One Hundred Fifty percent (150%) the amount
due on the last month prior to such expiration.
(G) If any installment of Rent (whether lump sum,
monthly installments, or any other monetary amounts required
by this Lease to be paid by Lessee and deemed to constitute
Rent hereunder) shall not be paid when due, or non-monetary
default shall remain uncured after the expiration of any
applicable cure period, Lessor shall have the right to
charge Lessee a late charge of $250.00 per month for each
month that any amount of Rent installment remains unpaid or
non- monetary default shall go uncured after the first such
occurrence in any 12 month period. Said late charge shall
commence after such installment is due or non-monetary
default goes uncured after the expiration of any applicable
cure period and continue until said installment, interest
and all accrued late charges are paid in full or such non-
monetary default is cured.
(H) Any part of the Leased Premises may be conveyed by
Lessor for private or public non-exclusive easement purposes
at any time, provided such easement does not interfere with
the access to the Leased Premises, visibility, or operations
of the business of Lessee. In such event Lessor shall, at
its own cost and expense, restore the remaining portion of
the Leased Premises to the extent necessary to render it
reasonably suitable for the purposes for which it was
leased, all to be done without adjustments in Rent to be
paid by Lessee. All proceeds from any conveyance of an
easement shall belong solely to Lessor.
(I) For the purpose of this Lease, the term "Rent"
shall be defined as Rent under Article 4, and any other
monetary amounts required by this Lease to be paid by
Lessee.
(J) Lessee agrees to cooperate with Lessor to allow
Lessor to obtain and use at Lessor's expense promotional
photographs of the Leased Premises, to the extent permitted
by Lessee's franchisor or licensor.
ARTICLE 30. REMEDIES
NON-EXCLUSIVITY. Notwithstanding anything contained
herein it is the intent of the parties that the rights and
remedies contained herein shall not be exclusive but rather
shall be cumulative along with all of the rights and
remedies of the parties which they may have at law or
equity.
ARTICLE 31. HAZARDOUS MATERIALS INDEMNITY
Lessee covenants, represents and warrants to Lessor,
its successors and assigns, (i) that it has not used or
permitted and will not use or permit the Leased Premises to
be used, whether directly or through contractors, agents or
tenants, and to the best of Lessee's knowledge and except as
disclosed to Lessor in writing, the Leased Premises has not
at any time been used for the generating, transporting,
treating, storage, manufacture, emission of, or disposal of
any dangerous, toxic or hazardous pollutants, chemicals,
wastes or substances as defined in the Federal Comprehensive
Environmental Response Compensation and Liability Act of
1980 ("CERCLA"), the Federal Resource Conservation and
Recovery Act of 1976 ("RCRA"), or any other federal, state
or local environmental laws, statutes, regulations,
requirements and ordinances ("Hazardous Materials"); (ii)
that there have been no investigations or reports involving
Lessee, or the Leased Premises by any governmental authority
which in any way pertain to Hazardous Materials (iii) that
the operation of the Leased Premises has not violated and is
not currently violating any federal, state or local law,
regulation, ordinance or requirement governing Hazardous
Materials; (iv) that the Leased Premises is not listed in
the United States Environmental Protection Agency's National
Priorities List of Hazardous Waste Sites nor any other list,
schedule, log, inventory or record of Hazardous Materials or
hazardous waste sites, whether maintained by the United
States Government or any state or local agency; and (v) that
the Leased Premises will not contain any formaldehyde, urea
or asbestos, except as may have been disclosed in writing to
Lessor by Lessee at the time of execution and delivery of
this Lease. Lessee agrees to indemnify and reimburse
Lessor, its successors and assigns, for:
(a) any breach of these representations and
warranties, and
(b) any loss, damage, expense or cost arising out of
or incurred by Lessor which is the result of a breach of,
misstatement of or misrepresentation of the above covenants,
representations and warranties, and
(c) any and all liability of any kind whatsoever which
Lessor may, for any cause and at any time, sustain or incur
by reason of Hazardous Materials discovered on the Leased
Premises during the term hereof or placed or released on the
Leased Premises by Lessee;
together with all attorneys' fees, costs and disbursements
incurred in connection with the defense of any action
against Lessor arising out of the above. These covenants,
representations and warranties shall be deemed continuing
covenants, representations and warranties for the benefit of
Lessor, and any successors and assigns of Lessor and shall
survive expiration or sooner termination of this Lease. The
amount of all such indemnified loss, damage, expense or
cost, shall bear interest thereon at the lesser of 15% or
the highest rate of interest allowed by law and shall become
immediately due and payable in full on demand of Lessor, its
successors and assigns.
ARTICLE 32. ESCROWS
Upon a default by Lessee which is uncured after the
expiration of any applicable notice and cure period, or upon
the request of Lessor's Mortgagee, if any, Lessee shall
deposit with Lessor on the first day of each and every
month, an amount equal to one-twelfth (1/12th) of the
estimated annual real estate taxes, assessments and
insurance (if the insurance is to be purchased by Lessor)
("Charges") due on the Leased Premises, or such higher
amounts reasonably determined by Lessor as necessary to
accumulate such amounts to enable Lessor to pay all charges
due and owing at least thirty (30) days prior to the date
such amounts are due and payable. From time to time out of
such deposits Lessor will, upon the presentation to Lessor
by Lessee of the bills therefor, pay the Charges or at
Lessee's option, will upon presentation of receipted bills
therefor, reimburse Lessee for such payments made by Lessee.
In the event the deposits on hand shall not be sufficient to
pay all of the estimated Charges when the same shall become
due from time to time or the prior payments shall be less
than the currently estimated monthly amounts, then Lessee
shall pay to Lessor on demand any amount necessary to make
up the deficiency. The excess of any such deposits shall be
credited to subsequent payments to be made for such items.
If a default or an event of default shall occur under the
terms of this Lease, Lessor may, at its option, without
being required so to do, apply any Deposit on hand to cure
the default, in such order and manner as Lessor may elect.
ARTICLE 33. NET LEASE
Notwithstanding anything contained herein to the
contrary it is the intent of the parties hereto that this
Lease shall be a net lease and that the Rent defined
pursuant to Article 4 should be a net Rent paid to Lessor.
Any and all other expenses including but not limited to,
maintenance, repair, insurance, taxes, and assessments,
shall be paid by Lessee.
ARTICLE 34. RIGHT OF FIRST REFUSAL
Lessor, for itself, its successors and assigns, hereby
gives and grants to Lessee a right of first refusal (the
"Right of First Refusal") to purchase the Leased Premises,
subject to the following terms and conditions:
(A) Duration of Right of First Refusal. The Right of
First Refusal and all rights and privileges of Lessee
hereunder shall be in force for the term of this Lease until
the expiration of Lessee's right to possession.
(B) Manner of Exercising Right of First Refusal. If
Lessor ("Selling Lessor") shall desire to sell all or any
portion of its interest in the Leased Premises (subject to
the terms of this Lease), Selling Lessor shall give Lessee
written notice of Selling Lessor's intention to sell Selling
Lessor's interest (partial or whole) in the Leased Premises.
Such notice ("Lessor's Notice") shall give Selling Lessor's
name and address and state a price at which Selling Lessor
intends to sell and will sell a specified portion or all of
its interest in the fee simple to the Leased Premises. If
Lessee shall fail to exercise its Right of First Refusal as
set forth herein, the terms of Article 34(E) shall apply.
For twenty (20) business days following the giving of such
notice, Lessee shall have the option to purchase such
portion of the fee interest of the Selling Lessor as set
forth in Lessor's Notice at the price in cash stated in the
Lessor's Notice. A written notice in substantially the
following form, addressed to Selling Lessor and signed by
Lessee and given, in accordance with the provisions of
Article 29(A) hereof, within the period for exercising the
Right of First Refusal, submitted with a bank cashier's
check or money order payable to the order of Selling Lessor
in the amount of $5,000.00 (the "Earnest Money") shall be an
effective exercise of Lessee's Right of First Refusal, to
wit:
(date)
"We hereby exercise the Right of First Refusal to purchase
such portion of the fee interest of the Selling Lessor (as
set forth in Lessor's Notice) in the property commonly known
as Champps, Thornton, CO, pursuant to the Right of First
Refusal contained in that certain Net Lease Agreement
between us pertaining to said premises."
(C) Terms of Sale if Right of First Refusal Exercised.
Upon Lessee's exercise of the Right of First Refusal in
accordance with the provisions of subparagraph (B) hereof,
Selling Lessor shall be obligated to sell and convey by
recordable general warranty deed, good and indefeasible
title to its interest in the Leased Premises (or such
portion thereof as set forth in Lessor's Notice) subject
only to the matters affecting title which were of record at
the time Selling Lessor came into title to the Leased
Premises and those matters which Lessee created, suffered or
permitted to accrue during the term hereof, and Lessee shall
be obligated to purchase such Lessor's interest upon the
following terms and conditions:
(i) Price. The price "Purchase Price" at which
Selling Lessor shall sell and Lessee shall purchase the
Leased Premises shall be the price stated in Lessor's
Notice.
(ii) Closing. Closing shall be sixty (60) days after
the expiration of the twenty days within which Lessee may
exercise its Right of First Refusal, unless the parties
mutually agree otherwise. The Purchase Price less credit
for the Earnest Money and any other credits to which Lessee
is entitled hereunder shall be tendered in cash or other
certified funds by Lessee at Closing.
(iii) Evidence of Title. Not less than ten (10)
days prior to closing, Selling Lessor shall obtain a
commitment for an ALTA owner's policy of title insurance
dated within thirty (30) days of the closing date, issued by
a nationally recognized title insurance company selected by
Selling Lessor (the "Title Company") in the amount of the
Purchase Price determined pursuant to subparagraph (C)(i)
above, naming Lessee as the proposed insured, and covering
the fee simple title to the Leased Premises, and showing
Selling Lessor vested with good title to portion of the
Leased Premises being sold, subject only to the matters
affecting title which were of record at the time Selling
Lessor came into title to the Leased Premises and those
matters which Lessee created, suffered or permitted to
accrue during the term hereof. Such title commitment shall
be conclusive evidence of good title. If Lessee shall make
objection to the marketability of title, Selling Lessor
shall have no obligation to make title marketable, but may
withdraw Lessor's notice of intent to market the Premises.
(iv) Prorations. Selling Lessor shall pay the cost of
the aforesaid title policy and any and all state and
municipal taxes imposed by law on the transfer of the title
to the Leased Premises, or the transaction pursuant to which
such transfer occurs. Water, sewer and other utility
charges, if any, which are not metered, driveway permit
charges, if any, general real estate taxes, and other
similar items, shall be adjusted ratably as of the Closing,
except to the extent otherwise settled between the parties
pursuant to other provisions of this Lease. A prorated
portion of the Rent prepaid by Lessee for the month of
closing shall be credited toward the Purchase Price and
Lessee shall be given a credit for rent prepaid for any
period after the month in which the Closing occurs.
Otherwise, Lessee shall not receive a credit against the
Purchase Price for Rent paid hereunder.
(v) Escrow Closing. At the election of Selling Lessor
or Lessee upon notice to the other party not less than five
(5) days prior to the Closing, this sale shall be closed
through an escrow with the Title Company, in accordance with
the general provisions of the usual form of Deed and Money
Escrow Agreement then is use by said company, with such
special provisions inserted in the escrow agreement as may
be required to conform with this agreement. Upon the
creation of such an escrow, anything herein to the contrary
notwithstanding, paying of the purchase price and delivery
of the deed shall be made through the escrow. The cost of
the escrow shall be divided equally between the Selling
Lessor and Lessee. If for any reason other than Lessee's
default, the transaction fails to close, the Earnest Money
shall be returned to Lessee forthwith.
(vi) Remedies on Default. If Lessee defaults under the
provisions of this subparagraph 34(C), Selling Lessor shall
have the right to annul the provisions of this paragraph 34
by giving Lessee notice of such election, provided that
Selling Lessor has first notified Lessee of such default and
Lessee has failed to cure the same within ten (10) days
after such notice. Upon Selling Lessor's notice of
annulment in accordance herewith, the Earnest Money shall be
forfeited and paid to Selling Lessor as liquidated damages,
which shall be Selling Lessor's sole and exclusive remedy.
If Selling Lessor defaults under the provisions of this
subparagraph 34(C) and fails to cure such default within ten
(10) days after being notified of the same by Lessee, then
in such event, (i) the Earnest Money at Lessee's election
and immediately upon its demand shall be returned to Lessee,
which return shall not, however, in any way release or
absolve Selling Lessor from its obligations hereunder and
(ii) Lessee shall be entitled to all remedies (both legal
and equitable) the law (both statutory and decisional) of
the state in which the Leased Premises are situated provides
without first having to tender the balance of the purchase
price as a condition precedent thereof and without having to
make any election of such remedies.
(D) Effect of Right of First Refusal on Lease. If the
Right of First Refusal is exercised by Lessee and is
exercisable in Lessor's Notice as to the entire fee simple,
this Lease shall continue in full force and effect until the
Closing hereinabove specified. If the Right of First
Refusal is exercised only as to all of an undivided portion
of the fee simple to the Leased Premises, the Lease shall
remain in full force and effect without merger or
termination of this Lease because of such purchase. If for
any reason such Closing fails to occur, this Lease shall
continue in full force and effect, except that if the
provisions of this paragraph 34 are annulled by Selling
Lessor, in accordance with subparagraph 34(C)(vi), by reason
of a default by Lessee, this Lease shall continue but
without the provisions of this paragraph 34 being a part
hereof.
(E) If Lessee fails to exercise its Right of First
Refusal, Selling Lessor shall be free to sell all or any
portion of its interest in the Leased Premises for six
months following the expiration of the twenty days within
which Lessee may exercise its Right of First Refusal,
provided that the Selling Lessor giving such Lessor's Notice
shall sell its interest (or a portion thereof) for a price
equal to or greater than the price (or the pro-rata portion
thereof if a portion of the Selling Lessor's interest in the
Leased Premises is sold) set forth in Lessor's Notice. This
Right of First Refusal shall survive any sale of the Leased
Premises and shall apply to any subsequent sale or potential
sale by Lessor or its successors and assigns.
IN WITNESS WHEREOF, Lessor and Lessee have respectively
signed and sealed this Lease as of the day and year first
above written.
LESSEE: FUDDRUCKERS, INC.
By: /s/ Charles Redepenning
Its: Senior Vice President
STATE OF Mass)
)SS.
COUNTY OF Essex)
The foregoing instrument was acknowledged before me
this 28 day of July, 1997, by Charles W Redepenning Jr., as
Sr. Vice Pres of Fuddruckers, Inc. on behalf of said
corporation.
/s/ Christine M Smith
Notary Public
[notary seal]
LESSOR: AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI FUND MANAGEMENT XVIII, INC., a Minnesota corporation
By: /s/ Robert P Johnson
Robert P. Johnson, President
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the
31st day of July, 1997, by Robert P. Johnson, the President
of AEI Fund Management XVIII, Inc., a Minnesota corporation,
corporate general partner of AEI Real Estate Fund XVIII
Limited Partnership, on behalf of said limited partnership.
/s/ Michael B Daugherty
Notary Public
Exhibit A
Lot 2, Block 2
WASHINGTON SQUARE SUBDIVISION FILING NO. 6.,
County of Adams,
State of Colorado.
Together with those beneficial easements and rights of way
as set forth in instruments entitled Declaration of
Restrictions and Grant of Easements recorded April 26, 1995
in Book 4502, at Page 556 and Reciprocal Access Easement
Agreement recorded March 18, 1992 in Book 3879, at Page 785
and Amendment to Reciprocal Access Easement Agreement
recorded April 19, 1995 in Book 4498. at Page 799.
Also together with the 30 foot public access easement as
shown on the plat of Washington Square Subdivision Filing
No. 6 recorded March 24, 1995 in Plat File 17, at Page 362,
and as shown on the plat of survey done by Carroll and Lange
Inc. dated February 6, 1995 as job no 1267.
Exhibit B
None
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000840459
<NAME> AEI REAL ESTATE FUND XVIII LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,791,718
<SECURITIES> 0
<RECEIVABLES> 2,214
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,793,932
<PP&E> 13,615,781
<DEPRECIATION> (2,294,125)
<TOTAL-ASSETS> 15,115,588
<CURRENT-LIABILITIES> 379,558
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,736,030
<TOTAL-LIABILITY-AND-EQUITY> 15,115,588
<SALES> 0
<TOTAL-REVENUES> 790,694
<CGS> 0
<TOTAL-COSTS> 344,317
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 822,839
<INCOME-TAX> 0
<INCOME-CONTINUING> 822,839
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 822,839
<EPS-PRIMARY> 37.43
<EPS-DILUTED> 37.43
</TABLE>
