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: March 31, 1996
Commission file number: 0-19838
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1677062
(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 NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of March 31, 1996 and December 31, 1995
Statements for the Periods ended March 31, 1996 and 1995:
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 NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
BALANCE SHEET
MARCH 31, 1996 AND DECEMBER 31, 1995
(Unaudited)
ASSETS
1996 1995
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,006,437 $ 4,702,376
Receivables 177,842 240,611
Current Portion of Long-Term Note Receivable 25,630 26,614
----------- -----------
Total Current Assets 1,209,909 4,969,601
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 6,181,822 5,025,530
Buildings and Equipment 12,621,922 10,210,833
Property Acquisition Costs 8,304 56,182
Accumulated Depreciation (827,580) (736,227)
----------- -----------
Net Investments in Real Estate 17,984,468 14,556,318
----------- -----------
OTHER ASSETS:
Long-Term Note Receivable - Net of Current Portion
1,514,620 1,522,211
----------- -----------
Total Assets $20,708,997 $21,048,130
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 25,788 $ 102,248
Distributions Payable 423,191 499,106
----------- -----------
Total Current Liabilities 448,979 601,354
----------- -----------
MINORITY INTEREST 3,322,218 3,357,202
PARTNERS' CAPITAL (DEFICIT):
General Partners (11,044) (9,526)
Limited Partners, $1,000 Unit value;
30,000 Units authorized; 21,152
Units issued, 21,121 Units outstanding 16,948,844 17,099,100
----------- -----------
Total Partners' Capital 16,937,800 17,089,574
----------- -----------
Total Liabilities and Partners' Capital $20,708,997 $21,048,130
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
1996 1995
INCOME:
Rent $ 461,510 $ 603,198
Investment Income 97,522 22,953
----------- -----------
Total Income 559,032 626,151
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 67,280 68,149
Partnership Administration and Property
Management - Unrelated Parties 16,432 15,797
Depreciation 91,353 106,106
----------- -----------
Total Expenses 175,065 190,052
----------- -----------
OPERATING INCOME 383,967 436,099
GAIN ON SALE OF REAL ESTATE 0 84,425
MINORITY INTEREST IN OPERATING INCOME (94,168) (58,719)
----------- -----------
NET INCOME $ 289,799 $ 461,805
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 2,898 $ 4,618
Limited Partners 286,901 457,187
----------- -----------
$ 289,799 $ 461,805
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(21,121 and 21,152 weighted average Units
outstanding in 1996 and 1995, respectively) $ 13.58 $ 21.61
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 289,799 $ 461,805
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 91,353 106,106
Gain on Sale of Real Estate 0 (84,425)
(Increase) Decrease in Receivables 62,769 (225,586)
Increase (Decrease) in Payable to
AEI Fund Management, Inc. (76,460) 14,795
Increase in Unearned Rent 0 12,916
Minority Interest (34,984) (12,590)
----------- -----------
Total Adjustments 42,678 (188,784)
----------- -----------
Net Cash Provided By
Operating Activities 332,477 273,021
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (3,519,503) (8,104)
Proceeds from Sale of Real Estate 0 279,943
Payments Received on Long-Term Note Receivable 8,575 0
----------- -----------
Net Cash Provided By (Used For)
Investing Activities (3,510,928) 271,839
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable (75,915) 1
Distributions to Partners (441,573) (520,791)
----------- -----------
Net Cash Used For
Financing Activities (517,488) (520,790)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (3,695,939) 24,070
CASH AND CASH EQUIVALENTS,
beginning of period 4,702,376 1,399,581
----------- -----------
CASH AND CASH EQUIVALENTS,
end of period $ 1,006,437 $ 1,423,651
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1994 $ (11,223) $16,931,123 $16,919,900 21,151.93
Distributions (5,208) (515,583) (520,791)
Net Income 4,618 457,187 461,805
---------- ----------- ----------- -----------
BALANCE, March 31, 1995 $ (11,813) $16,872,727 $16,860,914 21,151.93
========== =========== =========== ===========
BALANCE, December 31, 1995 $ (9,526) $17,099,100 $17,089,574 21,121.43
Distributions (4,416) (437,157) (441,573)
Net Income 2,898 286,901 289,799
---------- ----------- ----------- ----------
BALANCE, March 31, 1996 $ (11,044) $16,948,844 $16,937,800 21,121.43
========== =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(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,
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 Net Lease Income & Growth Fund XIX Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XIX, Inc.
(AFM), the Managing General Partner of the Partnership.
Robert P. Johnson, the President and sole shareholder of
AFM, serves as the Individual General Partner of the
Partnership. An affiliate of AFM, AEI Fund Management, Inc.
(AEI) performs the administrative and operating functions
for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on May 31, 1991 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The Partnership's offering
terminated February 5, 1993 when the extended offering
period expired. The Partnership received subscriptions for
21,151.928 Limited Partnership Units ($21,151,928).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$21,151,928, 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 NET LEASE INCOME & GROWTH FUND XIX 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 12% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) any
remaining balance will be distributed 90% to the Limited
Partners and 10% 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 in the same ratio as the last dollar of Net Cash
Flow is distributed. 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 12% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, the
balance of any remaining gain will then be allocated 90% to
the Limited Partners and 10% 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 NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
The Partnership's properties are all commercial, single-
tenant buildings. For those properties in the table below
which do not have land costs, the lessee has entered into
long-term land leases with unrelated third parties. The
cost of the properties and related accumulated depreciation
at March 31, 1996 are as follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
Taco Cabana, Houston, TX $ 334,414 $ 212,908 $ 547,322 $ 33,119
Taco Cabana, San Antonio, TX 598,533 548,741 1,147,274 76,926
Taco Cabana, Waco, TX 323,707 496,012 819,719 34,985
Applebee's, Aurora, CO 425,212 767,193 1,192,405 49,107
Red Line Burger, Houston, TX 0 299,531 299,531 36,871
Red Line Burger, Houston, TX 0 303,629 303,629 37,331
Red Line Burger, Corpus Christi, TX 0 280,378 280,378 33,094
Applebee's, Crestwood, MO 0 803,418 803,418 83,706
Applebee's, Crestview Hills, KY 406,317 863,740 1,270,057 48,243
HomeTown Buffet, Tucson, AZ 417,651 357,356 775,007 33,254
Applebee's, Covington, LA 358,521 740,564 1,099,085 75,602
Rally's, Brownsville, TX 0 281,713 281,713 30,066
Rally's, Edinburg, TX 0 281,762 281,762 30,072
Applebee's, Temple Terrace, FL 489,971 568,281 1,058,252 38,015
Applebee's, Beaverton, OR 636,972 1,123,107 1,760,079 92,774
Denny's, Apple Valley, CA 461,013 716,642 1,177,655 48,214
Taco Cabana, Round Rock, TX 157,826 591,884 749,710 36,447
Media Play, Apple Valley, MN 415,393 973,974 1,389,367 9,754
Garden Ridge, Pineville, NC 1,156,292 2,411,089 3,567,381 0
--------- ---------- ---------- -----------
$6,181,822 $12,621,922 $18,803,744 $ 827,580
========= ========== ========== ===========
On March 28, 1996, the Partnership purchased a 40.75%
interest in a Garden Ridge store in Pineville, North
Carolina for $3,567,381. The property is leased to Garden
Ridge, Inc. under a Lease Agreement with a primary term of
20 years and annual rental payments of $383,973. The
remaining interest in the property was purchased by AEI Net
Lease Income & Growth Fund XX Limited Partnership and AEI
Income & Growth Fund XXI Limited Partnership, affiliates of
the Partnership.
Through March 31, 1996, the Partnership sold 87.2636% of its
interest in the Applebee's restaurant in Aurora, Colorado in
seven separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,414,458
which resulted in a total net gain of $307,871. The total
cost and related accumulated depreciation of the interests
sold was $1,147,622 and $41,035, respectively. For the
three months ended March 31, 1995, the net gain was $35,902.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
Through March 31, 1996, the Partnership sold 97.5942% of the
Taco Cabana restaurant in Waco, Texas, in five separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $1,105,332 which
resulted in a total net gain of $337,012. The total cost
and related accumulated depreciation of the interests sold
was $799,998 and $31,678, respectively. For the three
months ended March 31, 1995, the net gain was $48,523.
Through March 31, 1996, the Partnership sold 59.2181% of the
Applebee's restaurant in Temple Terrace, Florida, in four
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $817,370
which resulted in a total net gain of $205,414. The total
cost and related accumulated depreciation of the interests
sold was $626,678 and $14,722, respectively.
Through March 31, 1996, the Partnership sold 67.8902% of the
Applebee's restaurant in Crestview Hills, Kentucky, in six
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,100,227
which resulted in a total net gain of $274,076. The total
cost and related accumulated depreciation of the interests
sold was $862,244 and $36,093, respectively.
On April 26, 1996, the Partnership sold an additional
4.9867% interest in the Applebee's restaurant in Crestview
Hills, Kentucky to an unrelated third party. The
Partnership received net sale proceeds of approximately
$86,000 which resulted in a net gain of approximately
$27,000.
On April 5, 1996, the Partnership sold a 12.7585% interest
in the HomeTown Buffet restaurant in Tucson, Arizona to an
unrelated third party. The Partnership received net sale
proceeds of approximately $201,000 which resulted in a net
gain of approximately $44,000.
The Partnership owns the above properties as tenants-in-
common with the unrelated third parties. The management of
the properties is governed by co-tenancy agreements between
the Partnership and the unrelated third parties, which grant
the Partnership the authority to control the management of
the properties. For properties owned as tenants-in-common
with third parties, other than affiliated partnerships, the
Partnership accounts for its interest under the full
consolidation method whereby the unrelated third parties'
interests in the properties are reflected in the
Partnership's financial statements as a minority interest.
For purposes of financial reporting, the Partnership
consolidates properties in which it is the controlling
tenant-in-common despite having only a minority equity
interest in the property.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
On May 19, 1994, the Partnership acquired a 92.74194%
interest in a SportsTown retail sporting goods megastore in
Greensboro, North Carolina. The remaining interest in the
property was purchased by AEI Fund Management XIX, Inc., the
Partnership's Managing General Partner and an officer of the
Managing General Partner. The property is leased to
SportsTown, Inc. under a Lease Agreement with a primary term
of 20 years and annual rental payments of $377,890. The
parties owned the property as tenants-in-common under a co-
tenancy agreement. On November 30, 1994, the Partnership
entered into a written contract to sell this property. The
sale was completed in April, 1995. As a condition to the
sale, the Partnership, and its affiliates, guaranteed and
escrowed the next twelve months of rent ($377,890), in the
event that the lessee fails to make the monthly rental
payments. At March 31, 1996, the escrowed receivable balance
is $28,475.
The parties received net sale proceeds of $3,541,409, which
resulted in a net gain of $454,849. At the time of sale,
the cost and related accumulated depreciation was $3,143,311
and $56,751, respectively. The Partnership's share of the
net sale proceeds and net gain was $3,284,233 and $419,619,
respectively.
On July 26, 1995, the Partnership sold the Black-Eyed Pea
restaurant in Davie, Florida to Jackson Shaw Partners No. 51
Ltd., an affiliate of the lessee. The Partnership
recognized net sale proceeds of $1,741,953 which resulted in
a net loss of $8,574. At the time of sale, the cost and
related accumulated depreciation was $1,781,075 and $30,548,
respectively. As part of the sale proceeds, the Partnership
received a Promissory Note from the buyer in the amount of
$1,556,982.
During the first three months of 1996 and the year ended
1995, the Partnership distributed net sale proceeds of
$112,035 and $419,246, respectively, to the Limited and
General Partners as part of their regular quarterly
distributions which represented a return of capital of $5.25
and $19.63 per Limited Partnership Unit, respectively. The
remaining net sale proceeds will either be re-invested in
additional properties or distributed to the Partners in the
future.
In August, 1995, the lessee of the three Red Line Burger and
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 Rally's
properties and one of the Red Line Burger properties.
Effective December 1, 1995, the Partnership amended the
Leases to reduce the base rent from the current annual rent
of $43,742 to $15,000 for each property. The Partnership
could receive additional rent in the future equal to 6.5% of
the amount by which gross receipts exceed $275,000. The
lessee has agreed to pay all post-petition rents due and the
Partnership's related administrative and legal expenses in
nine monthly installments. At March 31, 1996, the balance
due to the Partnership is $40,703. The Partnership is owed
$47,152 of pre-petition rent related to these three
properties, which was not accrued for financial reporting
purposes due to the uncertainty of collection.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
The Partnership has tentatively agreed to amended Lease
terms for the two Red Line Burger properties in Houston,
Texas. The tentative agreement requires annual base rental
payments of $15,000 and $21,000, effective March 1, 1996,
and requires the lessee to pay 6.5% of the amount by which
gross receipts exceed $275,000. As of March 31, 1996, the
Partnership is owed $85,563 of pre-petition and post-
petition rent related to the two Houston properties, which
was not accrued for financial reporting purposes due to the
uncertainty of collection. The Partnership is continuing to
negotiate with the lessee regarding the collection of rents
and other matters related to the properties.
The Partnership has incurred net costs of $458,408 relating
to the review of potential property acquisitions. Of these
costs, $450,104 have been capitalized and allocated to land,
building and equipment. The remaining costs of $8,304 have
been capitalized and will be allocated to properties
acquired subsequent to March 31, 1996.
(4) Long-Term Note Receivable -
The Partnership received a Promissory Note from Jackson Shaw
Partners No. 51 Ltd. from the sale of the Black-Eyed Pea
restaurant as discussed in Note 4. The Note requires forty-
eight monthly principal and interest payments of $15,025
with a balloon payment for the outstanding principal and
interest due September 1, 1999. Interest is being charged
on the Note at the rate of 10% on the outstanding principal
balance. The Note is secured by the land, building and
equipment. As of March 31, 1996, the outstanding principal
due on the note was $1,540,250.
Scheduled maturities of the long-term note receivable are as
follows:
1996 $ 18,038
1997 29,416
1998 32,497
1999 1,460,299
-----------
$ 1,540,250
===========
(5) Payable to AEI Fund Management, Inc. -
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
The Partnership's rental income is derived from long-term,
triple net lease agreements on the Partnership's properties. For
the three months ended March 31, 1996 and 1995, total rental
income, which includes the minority interests' share of rental
income, was $461,510 and $603,198, respectively. The
Partnership's share of this rental income was $348,443 and
$531,698, respectively. During the same periods, the Partnership
earned investment income of $97,522 and $22,953, respectively.
In 1996, the Partnership's share of rental income decreased
mainly as a result of the property sales and the Rally's
situation discussed below. The decrease in rental income was
partially offset by rent increases on nine properties and
additional investment income earned on the net proceeds from the
property sales.
In August, 1995, the lessee of the three Red Line Burger
and 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 Rally's properties and one
of the Red Line Burger properties. Effective December 1, 1995,
the Partnership amended the Leases to reduce the base rent from
the current annual rent of $43,742 to $15,000 for each property.
The Partnership could receive additional rent in the future equal
to 6.5% of the amount by which gross receipts exceed $275,000.
The lessee has agreed to pay all post-petition rents due and the
Partnership's related administrative and legal expenses. The
Partnership is owed $47,152 of pre-petition rent related to these
three properties, which was not accrued for financial reporting
purposes due to the uncertainty of collection.
The Partnership has tentatively agreed to amended Lease
terms for the two Red Line Burger properties in Houston, Texas.
The tentative agreement requires annual base rental payments of
$15,000 and $21,000, effective March 1, 1996, and requires the
lessee to pay 6.5% of the amount by which gross receipts exceed
$275,000. As of March 31, 1996, the Partnership is owed $85,563
of pre-petition and post-petition rent related to the two Houston
properties, which was not accrued for financial reporting
purposes due to the uncertainty of collection. The Partnership
is continuing to negotiate with the lessee regarding the
collection of rents and other matters related to the properties.
During the three months ended March 31, 1996 and 1995, the
Partnership paid Partnership administration expenses to
affiliated parties of $67,280 and $68,149, 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 $16,432 and $15,797, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs.
As of March 31, 1996, the Partnership's annualized cash
distribution rate was 8.55%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners are 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.
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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Liquidity and Capital Resources
During the first three months of 1996, the Partnership's
cash balances decreased $3,695,939 mainly as a result of
reinvesting net sale proceeds in an additional property as
discussed below. For the three months ended March 31, net cash
provided by operating activities increased from $273,021 in 1995
to $332,477 in 1996. During the same periods, net income before
depreciation and gain on sale of real estate decreased from
$483,486 in 1995 to $381,152 mainly as the result of a decrease
in revenues as a result of the property sales discussed below.
Timing differences in the collection of payments from the lessees
and the payment of expenses resulted in an increase in net cash
provided by operating activities from 1995 to 1996.
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. In the three months ended March
31, 1996 and 1995, the Partnership generated cash flow from the
sale of real estate, as discussed below, of $0 and $279,943,
respectively. During the same periods, the Partnership expended
$3,519,503 and $8,104, respectively, to invest in real properties
(inclusive of acquisition expenses) as the Partnership continued
to reinvest the cash generated from the property sales.
On March 28, 1996, the Partnership purchased a 40.75%
interest in a Garden Ridge store in Pineville, North Carolina for
$3,567,381. The property is leased to Garden Ridge, Inc. under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $383,973. The remaining interest in the property was
purchased by AEI Net Lease Income & Growth Fund XX Limited
Partnership and AEI Income & Growth Fund XXI Limited Partnership,
affiliates of the Partnership.
Through March 31, 1996, the Partnership sold 87.2636% of
its interest in the Applebee's restaurant in Aurora, Colorado in
seven separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,414,458 which
resulted in a total net gain of $307,871. The total cost and
related accumulated depreciation of the interests sold was
$1,147,622 and $41,035, respectively. For the three months ended
March31, 1995, the net gain was $35,902.
Through March 31, 1996, the Partnership sold 97.5942% of
the Taco Cabana restaurant in Waco, Texas, in five separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $1,105,332 which resulted in
a total net gain of $337,012. The total cost and related
accumulated depreciation of the interests sold was $799,998 and
$31,678, respectively. For the three months ended March 31,
1995, the net gain was $48,523.
Through March 31, 1996, the Partnership sold 59.2181% of
the Applebee's restaurant in Temple Terrace, Florida, in four
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $817,370 which
resulted in a total net gain of $205,414. The total cost and
related accumulated depreciation of the interests sold was
$626,678 and $14,722, respectively.
Through March 31, 1996, the Partnership sold 67.8902% of
the Applebee's restaurant in Crestview Hills, Kentucky, in six
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,100,227 which
resulted in a total net gain of $274,076. The total cost and
related accumulated depreciation of the interests sold was
$862,244 and $36,093, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
On April 26, 1996, the Partnership sold an additional
4.9867% interest in the Applebee's restaurant in Crestview Hills,
Kentucky to an unrelated third party. The Partnership received
net sale proceeds of approximately $86,000 which resulted in a
net gain of approximately $27,000.
On April 5, 1996, the Partnership sold a 12.7585% interest
in the HomeTown Buffet restaurant in Tucson, Arizona to an
unrelated third party. The Partnership received net sale
proceeds of approximately $201,000 which resulted in a net gain
of approximately $44,000.
The Partnership owns the above properties as tenants-in-
common with the unrelated third parties. The management of the
properties is governed by co-tenancy agreements between the
Partnership and the unrelated third parties, which grant the
Partnership the authority to control the management of the
properties. For all properties owned as tenants-in-common with
third parties, other than affiliated partnerships, the
Partnership accounts for its interest under the full
consolidation method whereby the unrelated third parties'
interests in the properties are reflected in the Partnership's
financial statements as a minority interest.
On May 19, 1994, the Partnership acquired a 92.74194%
interest in a SportsTown retail sporting goods megastore in
Greensboro, North Carolina. The remaining interest in the
property was purchased by AEI Fund Management XIX, Inc., the
Partnership's Managing General Partner and an officer of the
Managing General Partner. The property is leased to SportsTown,
Inc. under a Lease Agreement with a primary term of 20 years and
annual rental payments of $377,890. The parties owned the
property as tenants-in-common under a co-tenancy agreement. The
Partnership accounts for its interest using the full
consolidation method. On November 30, 1994, the Partnership
entered into a written contract to sell this property. The sale
was completed in April, 1995. As a condition to the sale, the
Partnership, and its affiliates, guaranteed and escrowed the next
twelve months of rent ($377,890), in the event that the lessee
fails to make the monthly rental payments. At March31, 1996, the
escrowed receivable balance is $28,475.
The parties received net sale proceeds of $3,541,409,
which resulted in a net gain of $454,849. At the time of sale,
the cost and related accumulated depreciation was $3,143,311 and
$56,751, respectively. The Partnership's share of the net sale
proceeds and net gain was $3,284,233 and $419,619, respectively.
On July 26, 1995, the Partnership sold the Black-Eyed Pea
restaurant in Davie, Florida to Jackson Shaw Partners No. 51
Ltd., an affiliate of the lessee. The Partnership recognized net
sale proceeds of $1,741,953 which resulted in a net loss of
$8,574. At the time of sale, the cost and related accumulated
depreciation was $1,781,075 and $30,548, respectively. As part
of the sale proceeds, the Partnership received a Promissory Note
from the buyer in the amount of $1,556,982.
During the first three months of 1996 and the year ended
1995, the Partnership distributed net sale proceeds of $112,035
and $419,246, respectively, to the Limited and General Partners
as part of their regular quarterly distributions which
represented a return of capital of $5.25 and $19.63 per Limited
Partnership Unit, respectively. The remaining net sale proceeds
will either be re-invested in additional properties or
distributed to the Partners in the future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
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. In the first three months of 1995, the Partnership made
distributions at an 9.75% rate which resulted in distributions to
the Partners of $520,791. Effective January 1, 1996, the
distribution rate was reduced to 8.55% which resulted in
distributions of $441,573 to the Partners for the first three
months of 1996.
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 and in no event,
obligated to purchase Units if such purchase would impair the
capital or operation of the Partnership.
During, 1995, three Limited Partners redeemed a total of
30.5 Partnership Units for $25,466 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. 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
April 4, 1996 between the Partnership,
Larry Z. White and Mary J. White relating
to the property at 330 South Wilmot Road,
Tucson, Arizona.
10.2 Property Co-Tenancy
Ownership Agreement dated April 5, 1996
between the Partnership, Larry Z. White
and Mary J. White relating to the
property at 330 South Wilmot Road,
Tucson, Arizona.
10.3 Purchase Agreement dated
April 19, 1996 between the Partnership
and the Gummersheimer Living Trust
relating to the property at 30 Crestview
Hills Mall Road, Crestview Hills,
Kentucky.
10.4 Property Co-Tenancy
Ownership Agreement dated April 26, 1996
between the Partnership and the
Gummersheimer Living Trust relating to
the property at 30 Crestview Hills Mall
Road, Crestview Hills, Kentucky.
b. Reports filed on Form 8-K - See previously filed
report dated March 28, 1996.
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: May 13, 1996 AEI Net Lease Income & Growth Fund XIX
Limited Partnership
By: AEI Fund Management XIX, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000868740
<NAME> AEI NET LEASE INCOME & GROWTH FUND XIX LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,006,437
<SECURITIES> 0
<RECEIVABLES> 203,472
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,209,909
<PP&E> 18,812,048
<DEPRECIATION> (827,580)
<TOTAL-ASSETS> 20,708,997
<CURRENT-LIABILITIES> 448,979
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,937,800
<TOTAL-LIABILITY-AND-EQUITY> 20,708,997
<SALES> 0
<TOTAL-REVENUES> 559,032
<CGS> 0
<TOTAL-COSTS> 175,065
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 289,799
<INCOME-TAX> 0
<INCOME-CONTINUING> 289,799
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 289,799
<EPS-PRIMARY> 13.58
<EPS-DILUTED> 13.58
</TABLE>
PURCHASE AGREEMENT
Hometown Buffet, Tucson, AZ
This AGREEMENT, entered into effective as of the 4th of
April, 1996 .
l. Parties. Seller is AEI Net Lease Income & Growth Fund XIX
Limited Partnership ("Seller"), Seller presently holds an
undivided 60.20% interest in the fee title to that certain real
property legally described in the attached Exhibit "A". (the
"Entire Property") Buyer is Larry Z. White and Mary J. White,
husband and wife as community property, but as tenant in common
owners with other owners in the Entire Property ("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 12.7585% percentage interest
(hereinafter, simply the "Property") as Tenant in Common and in
all improvements located on the Entire Property. The Entire
Property is currently owned as Tenant in Common by AEI Real
Estate Fund XIX Limited Partnership which owns an undivided
60.20% interest in the Entire Property and AEI Real Estate Fund
XVIII Limited Partnership which currently owns an undivided 24%
interest in the Entire Property and AEI Institutional Net Lease
Fund '93 Limited Partnership which currently owns an undivided
15.80% interest in the Entire Property.
3. Purchase Price . The purchase price for this percentage
interest in the Property is $235,000 all cash.
4. Terms. The purchase price for the Property will be paid by
Buyer as follows:
Buyer will deposit the purchase price, $235,000, into escrow
in sufficient time to allow escrow to close on the closing
date.
5 Closing Date. Escrow shall close on or before April 5, 1996.
6. Due Diligence. Buyer will have until the expiration of the
fifth business day 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.
(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 Property done
concurrent with Seller's acquisition of the Property.
Buyer Initial /s/ LW /s/ MW
Purchase Agreement for Hometown Buffet, Tucson, AZ
(d) Lease 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.
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
any review period or inspection period. Such notice shall be
deemed effective only upon receipt by Seller.
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.
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; and other items of record
disclosed to Buyer during the contingency 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. If Seller shall decide to make
Buyer Initial: /s/ LW /s/ MW
Purchase Agreement for Hometown Buffet, Tuscon, AZ
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.
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. 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 isrequired 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 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. 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 therafter, 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 Property incurred on and
after the date of closing.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between Seller and JB
Restaurants, Inc. dated June 16, 1993, Seller is not aware
of any leases of the Property.
(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/ LW /s/ MW
(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.
(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 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
Buyer Initial: /s/ LW /s/ MW
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.
13. Closing.
(a) Before the closing date, Seller will deposit into
escrow an executed warranty deed conveying insurable title
of the Property to Buyer.
(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
transaction involving the Property (any and all of which will be
Buyer Initial: /s/ LW /s/ MW
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 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 five-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.
Buyer Initial: /s/ LW /s/ MW
Purchase Agreement for Hometown Buffet, Tuscon, AZ
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.
(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 DAVID M. BOHR who will act
as Facilitator to perfect the 1031 exchange by preparing an
agreement of exchange of Real Property whereby DAVID M. BOHR,
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 to cooperate in the perfection of such an
exchange at no additional cost or expense 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 DAVID M. BOHR, 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
Buyer Initial: /s/ LW /s/ MW
Purchase Agreement for Hometown Buffet, Tuscon, AZ
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.
(b) If this escrow has not closed by April 5, 1996 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 Net Lease Income & Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
Larry Z. White and Mary J. White
2587 Calypso Drive
Lake Havasu City, AZ 86406
Buyer Initial: /s/ LW /s/ MW
Purchase Agreement for Hometown Buffet, Tuscon, AZ
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller along with the $5,000 First Payment,
which, if accepted, will be deposited in to escrow by 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: Larry Z. White and Mary J. White
By: /s/ Larry Z. White
Larry Z. White
By: /s/ Mary J. White
Mary J. White
SELLER: AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED
PARTNERSHIP, a Minnesota limited partnership.
By: AEI Fund Management XIX, Inc., its corporate general partner
By: /s/ Mark E. Larson
Mark E. Larson, Chief Financial Officer
Buyer Initial: /s/ LW /s/ MW
Purchase Agreement for Hometown Buffet, Tuscon, AZ
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Hometown Buffet, Tucson, AZ)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 5th day of April, 1996, by and
between Larry Z. White and Mary J. White, Husband and Wife as
Community Property (hereinafter called "White"), and AEI Net
Lease Income & Growth Fund XIX Limited Partnership (hereinafter
called "Fund XIX") White, Fund XIX (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 XIX presently owns an undivided 47.4415% interest
in and to, and White presently owns an undivided 12.7585%
interest in and to, and AEI Real Estate Fund XVIII Limited
Partnership presently owns an undivided 24.00% interest in and
to (also referred to herein as Co-Tenant") and AEI Institutional
Net Lease Fund 93 Limited Partnership presently owns an undivided
15.800% interest in and to (also referred to here in as Co-
Tenant") interest in and to the land, situated in the City of
Tucson, County of Pima, and State of Arizona, (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 White's interest by
Fund XIX; 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 White 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 XIX, or its designated agent, successors or
assigns. Provided, however, if Fund XIX shall sell all of its
interest in the Premises, the duties and obligations of Fund XIX
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 XIX 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 XIX as their sole and
exclusive agent to deal with any property agent and to execute
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 all present or future Co-
Tenants. Only Fund XIX may obligate any Co-Tenant with respect to
any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XIX agrees to
require any lessee of the Premises to name White as an insured or
additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XIX shall use
its best efforts to obtain endorsements adding Co-Tenants to said
policies from lessee within 30 days of commencement of this
agreement. In any event, Fund XIX shall distribute any insurance
proceeds it may receive, to the extent consistent with any lease
Co-Tenant Initial: /s/ LW /s/ MW
Co-Tenancy Agreement for Hometown Buffet, Tucson, AZ
on the Premises, to the Co-Tenants in proportion to their
respective ownership of the Premises.
2. Income, expenses and any net proceeds from a sale of the
Premises 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.
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
Lessee under terms of any triple net lease agreement initiated
concurrently with, or subsequent to, this agreement.
White has elected to retain, and agrees to annually reimburse,
Fund XIX in the amount of $700 for the expenses, direct and
indirect, incurred by Fund XIX in providing quarterly accounting
and distributions of White's share of net income and for
tracking, reporting and assessing the calculation of White's
share of operating expenses incurred from the Premises. This
invoice amount shall be pro-rated for partial years and White
authorizes Fund XIX to deduct such amount from White's share of
revenue. White may terminate this agreement at any time and
collect it's share of rental stream directly from the tenant.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XIX'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 XIX 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, White shall be entitled
to receive 12.7585% of all items of income and expense generated
by the Premises, and Fund XIX shall be entitled to receive
47.4415% as its share. 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 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 XIX, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XIX 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.
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.
Co-Tenant Initial: /s/ LW /s/ MW
Co-Tenancy Agreement for Hometown Buffet, Tucson, AZ
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 representative, successors and permitted assigns until
the expiration date plus extensions of the net lease agreement 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 representative, 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 XIX:
AEI Net Lease Income & Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to White:
Larry Z. White and Mary J. White
2587 Calypso Drive
Lake Havasu City, AZ 86406
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. Fund XIX may offset against, pay to itself and deduct from
any payment due to White under this Agreement, and may pay to
itself the amount of White's share of any legitimate expenses of
the Premises which are not paid by White to Fund XIX or its
assigns, within ten (10) days after demand by Fund XIX. In the
event there is insufficient operating income from which to deduct
White's unpaid share of operating expenses, Fund XIX may pursue
any and all legal remedies for collection.
Co-Tenant Initial: /s/ LW /s/ MW
Co-Tenancy Agreement for Hometown Buffet, Tucson, AZ
12. 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.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
By: /s/ Larry Z. White
Larry Z. White
By: /s Mary J. White
Mary J. White
Witness
STATE OF ARIZONA)
) ss
COUNTY OF MOHAVE)
The foregoing instrument was acknowledged before me, a
Notary Public in and for the County and State aforesaid,
this 3 day of April,1996, by Tamara K. Wooster
Fund XIX AEI Net Lease Income & Growth Fund XIX Limited Partnership
By: AEI Fund Management XIX, Inc., its corporate general partner
By: /s/ Mark E. Larson
Mark E. Larson, Chief Financial Officer
Witness By: /s/ Dawn Campbell
Witness By: /s/ Laura Steidl
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 4th day of April,
1996, Mark E. Larson, Chief Financial Officer of AEI Fund
Management XIX, Inc., corporate general partner of AEI Net Lease
Income & Growth Fund XIX 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/ Lorraine M. Prindle
Notary Public
[notary stamp]
Co-Tenant Initial: /s/ LW /s/ MW
Co-Tenancy Agreement for Hometown Buffet, Tucson, AZ
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
That portion of Section 13, Township 14 South Range 14 East,
Gila and Salt River Base and Meridian, Pima County, Arizona,
described as follows:
BEGINNING at the Northeast corner of BRYANT ADDITION
SUBDIVISION as recorded in Book 12, Page 23, of Maps and
Plats, in the office of the Pima County Recorder;
THENCE North 89 degrees 06 minutes 27 seconds East, along the
south right of way line of East 14th STREET, as it now
exists, a distance of 319.42 feet, to the TRUE POINT OF
BEGINNING;
THENCE continue North 89 degrees 06 minutes 27 seconds East,
along the South right of way, a distance of 263.76 feet to a
point of curvature;
THENCE Southeasterly along a circular arc whose central angle
is 90 degrees 07 minutes 31 seconds, and a radius of 25 feet,
a distance of 39.32 feet to a point of tangency;
THENCE South 0 degrees 46 minutes 02 seconds West, along the
Westerly right of way line of SOUTH WILMOT ROAD, as it now
exists, a distance of 210.86 feet to a point of curvature;
THENCE Southwesterly along a circular arc whose central angle
is 90 degrees 15 minutes 03 seconds, and a radius of 25 feet
a distance of 39.38 feet to a point of tangency;
THENCE South 89 degrees 29 minutes 01 seconds West, along the
Northerly right of way line of EAST TIMROD STREET, as it now
exists, a distance of 158 feet to a point;
THENCE North 0 degrees 30 minutes 59 seconds West, a distance
of 65 feet to a point;
THENCE South 89 degrees 29 minutes 01 seconds West, a
distance of 55.24 feet to a point;
THENCE North 32 degrees 17 minutes 15 seconds West, a
distance of 40.77 feet to a point;
THENCE North 01 degrees 42 minutes 45 seconds East, a
distance of 103.95 feet to a point;
THENCE South 87 degrees 51 minutes 50 seconds West, a
distance of 32.60 feet to a point;
THENCE North 02 degrees 08 minutes 10 seconds West, a
distance of 56.54 feet to the TRUE POINT OF BEGINNING.
PURCHASE AGREEMENT
Applebee's, Crestview Hills, KY
This AGREEMENT, entered into effective as of the 19th of April,
1996 .
l. Parties. Seller is AEI Net Lease Income & Growth Fund XIX
Limited Partnership ("Seller"), Seller presently holds an
undivided 32.1098% interest in the fee title to that certain real
property legally described in the attached Exhibit "A". (the
"Entire Property") Buyer is Gummersheimer Living Trust
("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 4.9867 percentage interest (hereinafter,
simply the "Property") as Tenant in Common and in all
improvements located on the Entire Property.
3. Purchase Price . The purchase price for this percentage
interest in the Property is $100,000, 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 (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,
$95,000 (the "Second Payment") into escrow in sufficient
time to allow escrow to close on the closing date.
5 Closing Date. Escrow shall close on or before May 7, 1996.
6. Due Diligence. Buyer will have until the expiration of the
fifth business day 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.
(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 Property done
concurrent with Seller's acquisition of the Property.
(d) Lease 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.
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 Initial: /s/ AHG /s/ DLG
Purchase Agreement for Applebee's, Crestview Hills, KY
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
any review period or inspection period. Such notice shall be
deemed effective only upon receipt by Seller.
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.
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; and other items of record
disclosed to Buyer during the contingency 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. 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.
9. Closing Costs. Seller will pay the deed stamp taxes and
one-half of escrow fees, and any brokerage commissions payable.
Seller shall pay for the cost of issuing the title commitment.
Buyer will pay all recording fees, one-half of the escrow fees,
the costs of an update to the Survey in Seller's possession (if
an update is required by Buyer) and the title insurance premium
for an Owner's policy if Buyer wishes to purchase one. Each party
will pay its own attorneys' fees and costs to document and close
this transaction.
Buyer Initial: /s/ AHG /s/ DLG
Purchase Agreement for Applebee's, Crestview Hills, KY
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 levied and pending special
assessments existing on the date of Closing the
responsibility of Buyer and Seller in proportion to their
respective Tenant in Common interests. 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 therafter, 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 Property incurred on and
after the date of closing.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between Seller and
Thomas & King, Inc. dated June 15, 1993, Seller is not aware
of any leases of the Property.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (c) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(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.
Buyer Initial: /s/ AHG /s/ DLG
Purchase Agreement for Applebee's Crestview Hills, KY
(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 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.
(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.
13. Closing.
(a) Before the closing date, Seller will deposit into
escrow an executed warranty deed conveying insurable title
of the Property to Buyer.
(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
Buyer Initial: /s/ AHG /s/ DLG
Purchase Agreement for Applebee's, Crestview Hills, KY
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
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 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 five-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
Buyer Initial: /s/ AHG /s/ DLG
Purchase Agreement for Applebee's, Crestview Hills, KY
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.
(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
Corp. who will act as Facilitator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby
Chicago Deferrred Exchange Corp. 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 to cooperate in the
perfection of such an exchange at no additional cost or expense
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
Exchangre Corp., Seller will deed the property to Buyer.
18. 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/ AHG /s/ DLG
Purchase Agreement for Applebee's, Crestview Hills, KY
(b) If this escrow has not closed by May 7, 1996 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 Net Lease Income & Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center, 30 E. 7th St.
St. Paul, MN 55101
If to Buyer:
Archibald H. and Diann L. Gummersheimer, Trustees
Gummersheimer Living Trust
600 N. Main St.
Dupo, IL 62239-1127
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller along with the $5,000 First Payment,
which, if accepted, will be deposited in to escrow by 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: Gummersheimer Living Trust
By: /s/ Archibald H. Gummersheimer, TTEE
Archibald H. Gummersheimer, Trustee
By: /s/ Diann L. Gummersheimer TTEE
Diann L. Gummersheimer, Trustee
SELLER: AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP, a
Minnesota limited partnership.
By: AEI Fund Management XIX, Inc., its corporate general partner
By: /s/ Robert P. Johnson
Robert P. Johnson, President
Buyer Initial: /s/ AHG /s/ DLG
Purchase Agreement for Applebee's, Crestview Hills, KY
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Applebee's Restaurant, Crestview Hills, KY)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 26th day of April, 1996, by and
between Gummersheimer Living Trust (hereinafter called
"Gummersheimer"), and AEI Net Lease Income & Growth Fund XIX
Limited Partnership (hereinafter called "Fund XIX")
(Gummersheimer, Fund XIX (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 XIX presently owns an undivided 27.1231% (14.6563% changed to
conform to the facts) interest in and to, and Gummersheimer presently
owns and undivided 4.9867% interest in and to(and Marshall Kilduff presently
owns an undivided 12.4668% (also referred to herein as "Co-Tenant")
interest in and to), changed to conform to the facts /s/ AHG /s/ DLG)
and The Nicoletta Trust presently owns an undivided 10.5969% (also
referred to herein as "Co-Tenant") interest in and to, and The Joan
Koller Trust presently owns an undivided 10.5969% (also referred to
herein as "Co-Tenant") in and to, and Menzel Polzin Partners presently
owns an undivided 14.5707% (also referred to herein as "Co-Tenant"),interest
in and to and Dorothy and Andrew Potloff presently own an undivided
13.7097% (also referred to herein as "Co-Tenant"),interest in and
to, and Richard Bagot presently owns an undivided 12.1741% (also
referred to herein as "Co-Tenant") interest in and to, and the
Tilson Trust presently owns an undivided 6.2419% (also referred
to herein as "Co-Tenant") interest in and to, the land, situated
in the City of Crestview Hills, County of Kenton, and State of
Kentucky, (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 Gummersheimer's
interest by Fund XIX; 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 Gummersheimer
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 XIX, or its designated agent, successors or
assigns. Provided, however, if Fund XIX shall sell all of its
interest in the Premises, the duties and obligations of Fund XIX
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 XIX 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 XIX as their sole and
exclusive agent to deal with any property agent and to execute
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
Co-Tenant Initial: /s/ AHG /s/ DLG
Co-Tenancy Agreement for Applebee's, Crestview Hills, KY
affecting the Premises, on behalf of all present or future Co-
Tenants. Only Fund XIX may obligate any Co-Tenant with respect to
any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XIX agrees to
require any lessee of the Premises to name Gummersheimer as an
insured or additional insured in all insurance policies provided
for, or contemplated by, any lease on the Premises. Fund XIX
shall use its best efforts to obtain endorsements adding Co-
Tenants to said policies from lessee within 30 days of
commencement of this agreement. In any event, Fund XIX 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, expenses and any net proceeds from a sale of the
Premises 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 XIX may offset against, pay to
itself and deduct from any payment due to Gummersheimer under
this Agreement, and may pay to itself the amount of
Gummersheimer's share of any legitimate expenses of the Premises
which are not paid by Gummersheimer to Fund XIX or its assigns,
within ten (10) days after demand by Fund XIX. In the event there
is insufficient operating income from which to deduct
Gummersheimer's unpaid share of operating expenses, Fund XIX 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
Lessee under terms of any triple net lease agreement initiated
concurrently with, or subsequent to, this agreement.
Gummersheimer has elected to retain, and agrees to annually
reimburse, Fund XIX in the amount of $280 for the expenses,
direct and indirect, incurred by Fund XIX in providing quarterly
accounting and distributions of Gummersheimer's share of net
income and for tracking, reporting and assessing the calculation
of Gummersheimer's share of operating expenses incurred from the
Premises. This invoice amount shall be pro-rated for partial
years and Gummersheimer authorizes Fund XIX to deduct such amount
from Gummersheimer's share of revenue. Gummersheimer may
terminate this agreement at any time and collect it's share of
rental stream directly from the tenant.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XIX'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 XIX 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, Gummersheimer shall be
entitled to receive 4.9867% of all items of income and expense
generated by the Premises, and Fund XIX shall be entitled to
receive 14.6563% as its share. 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 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 XIX, shall,
Co-Tenant Initial: /s/ AHG /s/ DLG
Co-Tenancy Agreement for Applebee's, Crestview Hills, KY
within fifteen (15) business days after receipt of notice, make
payment to Fund XIX 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.
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 (including Co-Tenant Tilson Trust which
owns an undivided 6.2419 percent interest in the Premises,
subject to a Co-Tenancy Agreement with Fund XIX dated May 25,
1994, and including Co-Tenant Richard Bagot which owns an
undivided 12.1741% interest in the Premises, subject to a Co-
Tenancy Agreement with Fund XIX dated July 15, 1994 and including
Co-Tenant Potloff Living Trust which owns an undivided 13.7097%
interest in the Premises, subject to a Co-Tenancy Agreement with
Fund XIX dated September 9, 1994 and including Co-Tenant Menzel
Polzin Partners which owns and undivided 14.5707% interest in the
Premises, subject to a Co-Tenancy Agreement with Fund XIX dated
July 14, 1995 and including Co-Tenant Joan Koller Trust which
owns an undivided 10.5969% interest in the Premises, subject to a
Co-Tenancy Agreement with Fund XIX dated December 4, 1995 and
including Co-Tenant The Nicoletta Trust which owns an undivided
10.5969% interest in the Premises, subject to a Co-Tenancy
Agreement dated December 4, 1995 (and including Co-Tenant Marshall
Kilduff which owns an undivided 12.4668% interest in the
Premises, subject to a Co-Tenancy Agreement with Fund XIX dated
changed to conform to the facts /s/ AHG /s/ DLG)
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
the expiration date plus extensions of the net lease agreement
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 XIX:
AEI Net Lease Income & Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
Co-Tenant Initial: /s/ AHG /s/ DLG
Co-Tenancy Agreement for Applebee's, Crestview Hills, KY
If to Gummersheimer:
Archibald and Diane Gummersheimer, Trustees
600 N. Main Street
Dupo, IL 62239-1127
(If to Kilduff:
321 Lake Street
San Francisco, CA 94118-1320 changed to conform to the
facts /s/ AHG /s/ DLG)
If to Nicoletta:
Joe Nicoletta, Trustee
5727 Camellia
North Hollywood, CA 91601
If to Koller:
Joan Koller, Trustee
16001 Ballantine Lane
Huntington Beach, CA 92647
If to Tilson:
Joseph and Mary Jane Tilson, Trustees
of the Tilson Trust
605 W. Sunset Drive
Redlands, CA 92373
If to Bagot:
Richard Bagot
1518 S. Beverly
Amarillo, TX 79106
If to Potloff:
Andrew and Dorothy Potloff
747 Oxidental Avenue
San Mateo, CA 94402-1056
If to Menzel Polzin Partners:
Robert Menzel, Partner
121 E. Main St., Suite #308
Mankato, MN 56001
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
Co-Tenant Initial: /s/ AHG /s/ DLG
Co-Tenancy Agreement for Applebee's, Crestview Hills, KY
hereunder, in the manner above specified, at least ten (10) days
prior to the effective date of said change.
10. 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.
11. 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.
12. 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/ AHG /s/ DLG
Co-Tenancy Agreement for Applebee's, Crestview Hills, KY
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Gummersheimer Gummersheimer Living Trust
By: /s/ Archibald H. Gummersheimer, TTEE
Archibald H.Gummersheimer, Trustee
By: /s/ Diann L. Gummersheimer, TTEE
Diann L. Gummersheimer, Trustee
Witness By: /s/ R. Michael Rose
STATE OF MISSOURI )
) ss [notary stamp]
COUNTY OF St. Louis )
The foregoing instrument was acknowledged before me, a
Notary Public in and for the County and State aforesaid,
this 25 day of April , 1996, by Deanna L. Clayton,
Notary Public.
Fund XIX AEI Net Lease Income & Growth Fund XIX Limited Partnership
By: AEI Fund Management XIX, Inc., its corporate general partner
By: /s/ Robert P. Johnson
Robert P. Johnson, President
Witness By: /s/ Laura M Steidl
Witness By: /s/ Ketih Dennler
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 26th /s/ LP (25th
changed to conform to the facts) day of /s/ April /s/ LP (/s/ April
changed to conform to the facts), 1996, Robert P. Johnson, President
of AEI Fund Management XIX, Inc., corporate general partner of AEI
Net Lease Income & Growth Fund XIX 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/ Deanna L. Clayton (changed to conform
Notary Public to the facts)
/s/ Lorraine M. Prindle
[notary stamp] Notary Public
Co-Tenant Initial: /s/ AHG /s/ DLG
Co-Tenancy Agreement for Applebee's, Crestview Hills, KY
EXHIBIT A
A certain tract or parcel of land situated in the County of
Kenton, in the Commonwealth of Kentucky, and in the City of
Crestview Hills, commencing at a corner formed by the
intersection of the northwesterly right-of-way of Turkeyfoot
Road, also known as the State Route 1303, with the southerly
right-of-way of Interstate Route 275; thence from said corner
South 34 42' 34" West, along the Northwesterly right-of-way of
Turkeyfoot Road 372.64 feet to an iron pin; thence leaving said
right-of-way, North 41 57' 00" West 309.17 feet to a point; said
point being the TRUE POINT OF BEGINNING; thence along a new
division line, south 48 03' 00" West, 160.11 feet; thence North
83 42' 30" West 21.31 feet to a point on the Northeasterly right-
of-way of Crestview Hills Mall; thence along said right-of-way,
North 35 28' 00" West, 169.31 feet' thence along a curve to the
left, having a radius of 454.41 feet, chord bearing of North 45
17' 42" West 155.13 feet, and a total arc length of 155.89 feet,
to an iron pin; thence leaving said right-of-way and with the
East line of the City of Crestview Hills Property, Deed Book 855,
Page 45, North 34 52' 37" East, 128.49 feet to an iron pin;
thence leaving the East line of said City of Crestview Hills
Property, and with the South right-of-way of Interstate 275
Eastbound Ramp "D", South 61 22' 45" East 99.39 feet to an iron
pin; thence continuing with said right-of-way, South 72 52' 01"
East, 108.09 feet to an iron pin; thence North 84 20' 21" East,
90.33 feet to an iron pin; thence leaving said right-of-way and
with the West line of J. Thomas Gallenstein et al. Property, Deed
Book 952, Page 314, South 48 03' 00" West 122.28 feet to an iron
pin; thence along the South line of said J. Thomas Gallenstein et
al., South 41 57' 00 East 128.34 feet to the TRUE POINT OF BEGINNING.
The parcel contains 1.4205 acres of land and is subject to all
legal easements and rights-of-way of record.
The above description was prepared by Jay F. Bayer, Kentucky Land
Surveyor #2916.
Being the same property conveyed to Thomas and King, Inc., a
South Carolina corporation, by West Shell, Inc., a Kentucky
corporation, by deed dated December 15, 1992, and of record in
Deed Book 1089, Page 346, in the Kenton County Clerk's Office.
Provided, however, that the Grantor retains a fifteen foot (15')
storm sewer easement upon the above-described 1.4205-acre parcel,
the centerline of said easement being described as follows:
Situated in the city of Crestview Hills, County of Kenton,
Commonwealth of Kentucky, and being a 15-foot wide strip of land
extending 7.5 feet on each side of the following described
centerline:
Beginning at a point in the grantor's Southeast boundary line
found by measuring from the intersection of the South right-of-
way line of Interstate 275 and the Northwest right-of-way line of
State Route 1303 (Turkeyfoot Road), South 34 42'34" West, 372.64
feet along said right-of-way of State Route 1303, North 41 57'00"
West, 309.17 feet, thence South 48 03' 00" West, 54.00 feet along
the grantor's Southeast boundary line, said point being the TRUE
POINT OF BEGINNING;
thence North 12 57' 00" West, 60.00 feet;
The above description was prepared by Jay F. Bayer, Registered
Land Surveyor #2916 in the Commonwealth of Kentucky.
TOGETHER WITH a certain License Agreement between West Shell,
Inc. As Licensor and Thomas and King, Inc. d/b/a Applebee's
Restaurant as Licensee, dated December 1, 1992, and recorded
December 18, 1992, in Book 105, Page 59 of the Clerk's Office of
Kenton County, Kentucky.
