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, 1999
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)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of March 31, 1999 and December 31, 1998
Statements for the Periods ended March 31, 1999 and 1998:
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, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,431,248 $ 884,555
Receivables 27,373 27,722
----------- -----------
Total Current Assets 1,458,621 912,277
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,570,902 5,746,501
Buildings and Equipment 9,888,421 10,038,667
Property Acquisition Costs 4,833 0
Accumulated Depreciation (1,403,995) (1,347,191)
----------- -----------
Net Investments in Real Estate 14,060,161 14,437,977
----------- -----------
Total Assets $15,518,782 $15,350,254
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 142,807 $ 65,196
Distributions Payable 362,376 366,812
Unearned Rent 14,149 0
----------- -----------
Total Current Liabilities 519,332 432,008
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (31,562) (32,375)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 21,152 Units issued;
20,768 Units outstanding 15,031,012 14,950,621
----------- -----------
Total Partners' Capital 14,999,450 14,918,246
----------- -----------
Total Liabilities and Partners' Capital $15,518,782 $15,350,254
=========== ===========
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)
1999 1998
INCOME:
Rent $ 477,781 $ 404,372
Investment Income 9,410 58,513
----------- -----------
Total Income 487,191 462,885
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 65,734 73,935
Partnership Administration and Property
Management - Unrelated Parties 26,951 38,675
Depreciation 85,802 71,851
----------- -----------
Total Expenses 178,487 184,461
----------- -----------
OPERATING INCOME 308,704 278,424
GAIN ON SALE OF REAL ESTATE 151,045 0
----------- -----------
NET INCOME $ 459,749 $ 278,424
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 4,598 $ 2,784
Limited Partners 455,151 275,640
----------- -----------
$ 459,749 $ 278,424
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(20,768 and 20,975 weighted average Units
outstanding in 1999 and 1998, respectively) $ 21.92 $ 13.14
=========== ===========
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)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 459,749 $ 278,424
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 85,802 71,851
Gain on Sale of Real Estate (151,045) 0
(Increase) Decrease in Receivables 349 (23,167)
Increase in Payable to
AEI Fund Management, Inc. 77,611 30,212
Increase in Unearned Rent 14,149 40,417
----------- -----------
Total Adjustments 26,866 119,313
----------- -----------
Net Cash Provided By
Operating Activities 486,615 397,737
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (4,833) (63,491)
Proceeds from Sale of Real Estate 447,892 0
Payments Received on Long-Term Notes Receivable 0 8,323
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 443,059 (55,168)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable (4,436) 29,344
Distributions to Partners (378,545) (382,925)
----------- -----------
Net Cash Used For
Financing Activities (382,981) (353,581)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 546,693 (11,012)
CASH AND CASH EQUIVALENTS, beginning of period 884,555 1,613,175
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,431,248 $ 1,602,163
=========== ===========
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, 1997 $ (27,166) $15,466,240 $15,439,074 20,974.63
Distributions (3,829) (379,096) (382,925)
Net Income 2,784 275,640 278,424
--------- ----------- ----------- ---------
BALANCE, March 31, 1998 $ (28,211) $15,362,784 $15,334,573 20,974.63
========= =========== =========== =========
BALANCE, December 31, 1998 $ (32,375) $14,950,621 $14,918,246 20,767.92
Distributions (3,785) (374,760) (378,545)
Net Income 4,598 455,151 459,749
--------- ----------- ----------- ---------
BALANCE, March 31, 1999 $ (31,562) $15,031,012 $14,999,450 20,767.92
========= =========== =========== =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission,
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 -
On December 23, 1997, the Partnership purchased a 23.95%
interest in a parcel of land in Troy, Michigan for $361,889.
The land is leased to Champps Entertainment, Inc. (Champps)
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $25,332. Effective June 20, 1998,
the annual rent was increased to $37,998. Simultaneously
with the purchase of the land, the Partnership entered into
a Development Financing Agreement under which the
Partnership advanced funds to Champps for the construction
of a Champps Americana restaurant on the site. Initially,
the Partnership charged interest on the advances at a rate
of 7%. Effective June 20, 1998, the interest rate was
increased to 10.5%. On September 3, 1998, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $122,605. The
Partnership's share of the total acquisition costs,
including the cost of the land, was $1,181,185. The
remaining interests in the property are owned by AEI Real
Estate Fund XV Limited Partnership, AEI Real Estate Fund
XVII Limited Partnership and AEI Real Estate Fund XVIII
Limited Partnership, affiliates of the Partnership.
In January, 1998, the Partnership entered into an Agreement
to purchase a 40% interest in a Tumbleweed restaurant in
Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $192,813. The land is
leased to Tumbleweed, Inc. (TWI) under a Lease Agreement
with a primary term of 15 years and annual rental payments
of $16,389. Effective August 10, 1998, the annual rent was
increased to $19,763. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership advanced
funds to TWI for the construction of a Tumbleweed restaurant
on the site. Initially, the Partnership charged interest on
the advances at a rate of 8.5%. Effective August 10, 1998,
the interest rate was increased to 10.25%. On November 20,
1998, after the development was completed, the Lease
Agreement was amended to require annual rental payments of
$50,946. The Partnership's share of the total acquisition
costs, including the cost of the land was $505,225. The
remaining interests in the property are owned by the
Individual General Partner and AEI Real Estate Fund XVIII
Limited Partnership.
Pursuant to the Partnership Agreement, Net Sale Proceeds may
be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units
terminated. This period expired on February 5, 1998. In
October, 1998, the Managing General Partner solicited by
mail a proxy statement to propose an Amendment to the
Limited Partnership Agreement that would allow the
Partnership to reinvest the majority of net sale proceeds in
additional properties. The Amendment passed with a majority
of Units voting in favor of the Amendment.
On December 28, 1998, the Partnership purchased a 60.0%
interest in a Tumbleweed restaurant in Columbus, Ohio for
$823,496. The property is leased to TWI under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $83,102. The remaining interest in the property
is owned by AEI Real Estate Fund XVIII Limited Partnership.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
During the first three months of 1999, the Partnership
incurred net costs of $4,833 related to the review of
potential property acquisitions. The costs have been
capitalized and will be allocated to property acquisitions
in future periods.
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 Red Line Burger property. Effective
December 1, 1995, the Leases were amended to reduce the
annual base rent from $43,742 to $15,000 for each property.
The Partnership could receive additional rent in the future
equal to 6.75% of the amount by which gross receipts exceed
$275,000. In 1997, the reorganization plan confirmed one
Red Line Lease and rejected the other two Leases. In
addition, the plan allowed the Rally's properties to be sold
and on February 14, 1997, the Partnership received net sale
proceeds of $500,000, which resulted in a net gain of
$16,092. The lessee has agreed to pay certain pre-petition
and post-petition rents due of $154,268 and other related
administrative and legal expenses. However, due to the
uncertainty of collection, the Partnership has not accrued
any of these amounts for financial reporting purposes.
Due to the rejection of the Leases, $82,563 of pre-petition
and post-petition rent related to the two properties will
not be collected by the Partnership. These amounts were not
accrued for financial reporting purposes. The Partnership,
in the fourth quarter of 1997, recorded a real estate
impairment on the three Red Line Burgers of $715,384, which
equaled the net book value of the properties at December 31,
1997. The charge was recorded against the cost of the
buildings and equipment. In addition, in the second quarter
of 1998, the Partnership elected to abandon one of the
properties in order to avoid ongoing expenses. The
Partnership is reviewing its available options for the
remaining Red Line Burger rejected in the reorganization
plan.
On December 21, 1995, the Partnership purchased a 33.0%
interest in a Media Play retail store in Apple Valley,
Minnesota for $1,389,367. The property was leased to The
Musicland Group, Inc. (MGI) under a Lease Agreement with a
primary term of 18 years and annual rental payments of
$135,482.
In December, 1996, the Partnership and MGI reached an
agreement in which MGI would buy out and terminate the Lease
Agreement by making a payment of $800,000, which was equal
to approximately two years' rent. The Partnership's share
of such payment was $264,000. A specialist in commercial
property leasing has been retained to locate a new tenant
for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and
other costs required to maintain the property.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of
the Partnership's interest in the Media Play was
approximately $726,000. In the fourth quarter of 1997, a
charge to operations for real estate impairment of $595,100
was recognized, which is the difference between the book
value at December 31, 1997 of $1,321,100 and the estimated
market value of $726,000. The charge was recorded against
the cost of the land, building and equipment.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Covington, Louisiana,
filed for reorganization. GCR is continuing to make the
lease payments to the Partnership under the supervision of
the bankruptcy court while they develop a reorganization
plan. If the Lease is assumed, GCR must comply with all
Lease terms and any unpaid rent must be paid. If the Lease
is rejected, GCR will be required to return possession of
the property to the Partnership and past due amounts will be
dismissed and the Partnership will be responsible for re-
leasing the property. At March 31, 1999, GCR owed $27,373
for rent due prior to the date of the filing for
reorganization. An analysis of the operating statements of
this property indicate that it is generating profits and it
is management's belief that the Lease will be assumed by
GCR.
Through March 31, 1999, the Partnership sold 38.0691% of the
HomeTown Buffet restaurant in Tucson, Arizona, in four
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $649,249
which resulted in a total net gain of $195,304. The total
cost and related accumulated depreciation of the interests
sold was $490,096 and $36,151, respectively. For the three
months ended March 31, 1999, the net gain was $151,045.
During the first three months of 1998, the Partnership
distributed $32,650 of net sale proceeds to the Limited and
General Partners as part of their regular quarterly
distributions which represented a return of capital of $1.54
per Limited Partnership Unit. The remaining net sale
proceeds will either be re-invested in additional properties
or distributed to the Partners in the future.
(4) Long-Term Notes Receivable -
On July 26, 1995, the Partnership received a Promissory Note
from Jackson Shaw Partners No. 51 Ltd. from the sale of the
Black-Eyed Pea restaurant in Davie, Florida. 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 was
charged on the Note at the rate of 10% on the outstanding
principal balance. The Note was secured by the land,
building and equipment. As of March 31, 1998, the
outstanding principal due on the note was $1,484,472. On
April 8, 1998, the Partnership received the outstanding
principal and accrued interest due on the Note.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(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
For the three months ended March 31, 1999 and 1998, the
Partnership recognized rental income of $477,781 and $404,372,
respectively. During the same periods, the Partnership earned
investment income of $9,410 and $58,513, respectively. In 1999,
rental income increased as a result of additional rent received
from three property acquisitions in 1998, and rent increases on
ten properties. The increase in rental income was partially
offset by a decrease in investment income earned on net sale
proceeds prior to the purchase of the additional properties.
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
Red Line Burger property. Effective December 1, 1995, the Leases
were amended to reduce the annual base rent from $43,742 to
$15,000 for each property. The Partnership could receive
additional rent in the future equal to 6.75% of the amount by
which gross receipts exceed $275,000. In 1997, the
reorganization plan confirmed one Red Line Lease and rejected the
other two Leases. In addition, the plan allowed the Rally's
properties to be sold and on February 14, 1997, the Partnership
received net sale proceeds of $500,000, which resulted in a net
gain of $16,092. The lessee has agreed to pay certain pre-
petition and post-petition rents due of $154,268 and other
related administrative and legal expenses. However, due to the
uncertainty of collection, the Partnership has not accrued any of
these amounts for financial reporting purposes.
Due to the rejection of the Leases, $82,563 of pre-
petition and post-petition rent related to the two properties
will not be collected by the Partnership. These amounts were not
accrued for financial reporting purposes. The Partnership, in
the fourth quarter of 1997, recorded a real estate impairment on
the three Red Line Burgers of $715,384, which equaled the net
book value of the properties at December 31, 1997. The charge
was recorded against the cost of the buildings and equipment. In
addition, in the second quarter of 1998, the Partnership elected
to abandon one of the properties in order to avoid ongoing
expenses. The Partnership is reviewing its available options for
the remaining Red Line Burger rejected in the reorganization
plan.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Musicland Group, Inc. (MGI), the lessee of the Media Play
retail store in Apple Valley, Minnesota experienced financial
difficulties and was aggressively restructuring its organization.
As part of the restructuring, the Partnership and MGI reached an
agreement in December, 1996 in which MGI would buy out and
terminate the Lease Agreement by making a payment of $800,000,
which is equal to approximately two years' rent. The
Partnership's share of such payment was $264,000. A specialist
in commercial property leasing has been retained to locate a new
tenant for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and other
costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of the
Partnership's interest in the Media Play was approximately
$726,000. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $595,100 was recognized, which is
the difference between the book value at December 31, 1997 of
$1,321,100 and the estimated market value of $726,000. The
charge was recorded against the cost of the land, building and
equipment.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Covington, Louisiana,
filed for reorganization. GCR is continuing to make the lease
payments to the Partnership under the supervision of the
bankruptcy court while they develop a reorganization plan. If
the Lease is assumed, GCR must comply with all Lease terms and
any unpaid rent must be paid. If the Lease is rejected, GCR will
be required to return possession of the property to the
Partnership and past due amounts will be dismissed and the
Partnership will be responsible for re-leasing the property. At
March 31, 1999, GCR owed $27,373 for rent due prior to the date
of the filing for reorganization. An analysis of the operating
statements of this property indicate that it is generating
profits and it is management's belief that the Lease will be
assumed by GCR.
During the three months ended March 31, 1999 and 1998, the
Partnership paid Partnership administration expenses to
affiliated parties of $65,734 and $73,935, 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 $26,951 and $38,675, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The decrease
in these expenses in 1999, when compared to 1998, is the result
of expenses incurred in 1998 related to the Media Play situation
discussed above.
As of March 31, 1999, the Partnership's annualized cash
distribution rate was 7.5%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners 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)
The Year 2000 issue is the result of computer systems that
use two digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and has
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership intends to monitor and communicate with
tenants regarding Year 2000 compliance, although there can be no
assurance that the systems of the various tenants will be Year
2000 compliant.
Liquidity and Capital Resources
During the three months ended March 31, 1999, the
Partnership's cash balances increased $546,693 as a result of
cash generated from property sales and the Partnership
distributed less cash to the Partners than it generated from
operating activities. Net cash provided by operating activities
increased from $397,737 in 1998 to $486,615 in 1999 as the result
of an increase in income and a decrease in expenses in 1999 and
net timing differences in the collection of payments from the
lessees and the payment of expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the three months ended
March 31, 1999, the Partnership generated cash flow from the sale
of real estate of $447,892. During the three months ended March
31, 1999 and 1998, the Partnership expended $4,833 and $63,491,
respectively, to invest in real properties (inclusive of
acquisition expenses), as the Partnership continued to reinvest
the cash generated from the property sales.
On December 23, 1997, the Partnership purchased a 23.95%
interest in a parcel of land in Troy, Michigan for $361,889. The
land is leased to Champps Entertainment, Inc. (Champps) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $25,332. Effective June 20, 1998, the annual rent
was increased to $37,998. Simultaneously with the purchase of
the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to Champps
for the construction of a Champps Americana restaurant on the
site. Initially, the Partnership charged interest on the
advances at a rate of 7%. Effective June 20, 1998, the interest
rate was increased to 10.5%. On September 3, 1998, after the
development was completed, the Lease Agreement was amended to
require annual rental payments of $122,605. The Partnership's
share of the total acquisition costs, including the cost of the
land, was $1,181,185. The remaining interests in the property
are owned by AEI Real Estate Fund XV Limited Partnership, AEI
Real Estate Fund XVII Limited Partnership and AEI Real Estate
Fund XVIII Limited Partnership, affiliates of the Partnership.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In January, 1998, the Partnership entered into an
Agreement to purchase a 40% interest in a Tumbleweed restaurant
in Chillicothe, Ohio. On April 13, 1998, the Partnership
purchased its share of the land for $192,813. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $16,389.
Effective August 10, 1998, the annual rent was increased to
$19,763. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership advanced funds to TWI for the construction
of a Tumbleweed restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 8.5%.
Effective August 10, 1998, the interest rate was increased to
10.25%. On November 20, 1998, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $50,946. The Partnership's share of the total
acquisition costs, including the cost of the land was $505,225.
The remaining interests in the property are owned by the
Individual General Partner and AEI Real Estate Fund XVIII Limited
Partnership.
Pursuant to the Partnership Agreement, Net Sale Proceeds
may be reinvested in additional properties until a date five
years after the date on which the offer and sale of Units
terminated. This period expired on February 5, 1998. In
October, 1998, the Managing General Partner solicited by mail a
proxy statement to propose an Amendment to the Limited
Partnership Agreement that would allow the Partnership to
reinvest the majority of net sale proceeds in additional
properties. The Amendment passed with a majority of Units voting
in favor of the Amendment.
On December 28, 1998, the Partnership purchased a 60.0%
interest in a Tumbleweed restaurant in Columbus, Ohio for
$823,496. The property is leased to TWI under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$83,102. The remaining interest in the property is owned by AEI
Real Estate Fund XVIII Limited Partnership.
Through March 31, 1999, the Partnership sold 38.0691% of
the HomeTown Buffet restaurant in Tucson, Arizona, in four
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $649,249 which
resulted in a total net gain of $195,304. The total cost and
related accumulated depreciation of the interests sold was
$490,096 and $36,151, respectively. For the three months ended
March 31, 1999, the net gain was $151,045.
During the first three months of 1998, the Partnership
distributed $32,650 of net sale proceeds to the Limited and
General Partners as part of their regular quarterly distributions
which represented a return of capital of $1.54 per Limited
Partnership Unit. The remaining net sale proceeds will either be
re-invested in additional properties or distributed to the
Partners in the future.
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.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1998, eight Limited Partners redeemed a total of
206.7 Partnership Units for $145,775 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, a total of
sixteen Limited Partners redeemed 177.3 Partnership Units for
$139,225. 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.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
<BULLET> Market and economic conditions which affect
the value of the properties the Partnership owns and
the cash from rental income such properties generate;
<BULLET> the federal income tax consequences of rental
income, deductions, gain on sales and other items and
the affects of these consequences for investors;
<BULLET> resolution by the General Partners of
conflicts with which they may be confronted;
<BULLET> the success of the General Partners of
locating properties with favorable risk return
characteristics;
<BULLET> the effect of tenant defaults; and
<BULLET> the condition of the industries in which the
tenants of properties owned by the Partnership operate.
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 February
27, 1999 between the Partnership, AEI
Real Estate Fund XVIII Limited
Partnership and Terry Harsha, Sr. and
Janet Sue Harsha relating to the property
at 330 South Wilmot Road, Tucson,
Arizona.
10.2 Property Co-Tenancy Ownership
Agreement dated March 5, 1999 between the
Partnership, AEI Real Estate Fund XVIII
Limited Partnership and Terry Harsha, Sr.
and Janet Sue Harsha relating to the
property at 330 South Wilmot Road,
Tucson, Arizona.
10.3 Purchase Agreement dated March 25,
1999 between the Partnership and the
Eugene M. Hamilton Family Revocable Trust
relating to the property at 330 South
Wilmot Road, Tucson, Arizona.
10.4 Purchase Agreement dated March 25,
1999 between the Partnership and the Tom
S. Obata relating to the property at 330
South Wilmot Road, Tucson, Arizona.
10.5 Property Co-Tenancy Ownership
Agreement dated March 29, 1999 between
the Partnership and the Eugene M.
Hamilton Family Revocable Trust relating
to the property at 330 South Wilmot Road,
Tucson, Arizona.
PART II - OTHER INFORMATION
(Continued)
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K (Continued)
a. Exhibits -
Description
10.6 Property Co-Tenancy Ownership
Agreement dated March 31, 1999 between
the Partnership and the Tom S. Obata
relating to the property at 330 South
Wilmot Road, Tucson, Arizona.
27 Financial Data Schedule for period
ended March 31, 1999.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: May 7, 1999 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
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
PURCHASE AGREEMENT
Hometown Buffet Restaurant-Tucson, AZ
This AGREEMENT, entered into effective as of the 27 of February,
1999.
l. PARTIES. Seller is AEI Real Estate Fund XVIII Limited
Partnership which owns an undivided 24% interest and AEI Net
Lease Income & Growth Fund XIX Limited Partnership which owns and
undivided 47.4415% interest in the fee title to that certain real
property legally described in the attached Exhibit "A" (the
"Entire Property") Buyer is Terry Harsha, Sr. and Janet Sue
Harsha, as joint tenants ("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 9.9617 percentage interest (9.0574% from
Fund XVIII and .9043% from Fund XIX) (hereinafter, simply the
"Property") as Tenant in Common in the Entire Property.
3. PURCHASE PRICE . The purchase price for this percentage
interest in the Entire Property is $200,000 all cash. ($181,844
to Fund XVIII and $18,156 to Fund XIX)
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed.
(b) Buyer will deposit the balance of the purchase price,
$195,000 (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 March 1, 1999.
6. DUE DILIGENCE. Buyer will have until the expiration of the
tenth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) A copy 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) A copy of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
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 AEI Net Lease Income & Growth
Fund XIX Limited Partnership 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, via first class
mail, return receipt requested, to Seller and escrow holder
before the expiration of the Review Period. Such notice shall be
deemed effective only upon receipt by Seller. If this Agreement
is not cancelled as set forth above, the First Payment shall be
non-refundable unless Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under the first paragraph of section 9 of this
Agreement (which will survive), Buyer (after execution of such
documents reasonably requested by Seller to evidence the
termination hereof) shall be returned its First Payment, and
Buyer will have absolutely no rights, claims or interest of any
type in connection with the Property or this transaction,
regardless of any alleged conduct by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to be in default under this Agreement.
Seller may, at its option, retain the First Payment and declare
this Agreement null and void, in which event Buyer will be deemed
to have canceled this Agreement and relinquish all rights in and
to the Property or Seller may exercise its rights under Section
14 hereof. If this Agreement is not canceled and the 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 commitment of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed ten (10) 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. Seller has no obligation to spend any funds or make any
effort to satisfy Buyer's objections if any.
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
of satisfaction of Buyer's objections to the Buyer, the parties
shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid real estate taxes and unpaid
levied and pending special assessments existing on the date
of Closing shall be the responsibility of Buyer and Seller
in proportion to their respective Tenant in Common
interests, pro-rated, however, to the date of closing for
the period prior to closing, which shall be the
responsibility of Seller if Tenant shall not pay the same.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate share
of all operating expenses of the Entire 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 AEI Real
Estate Fund XVIII Limited Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, and AEI Institutional Net
Lease Fund '93 Limited Partnership (as "Landlord") and JB'S
Restaurants, Inc. now known as Summit Family Restaurants Inc.
("Tenant") dated June 16, 1993, and the Sublease Agreement
between JB's Restaurants, Inc. and HTB Restaurants, Inc., dated
June 16, 1993, Seller is not aware of any leases of the Property.
The above referenced lease agreement also has a first right of
refusal in favor of the Tenant as set forth in Article 34 of said
lease agreement, which right shall apply to any attempted
disposition of the Property by Buyer after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
(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) Seller has not received any notice of any material,
physical, or mechanical defects of the Entire Property,
including without limitation, the plumbing, heating, air
conditioning, ventilating, electrical system. To the best of
Seller's knowledge without inquiry, all such items are in
good operating condition and repair and in compliance with
all applicable governmental, zoning, and land use laws,
ordinances, regulations and requirements. If Seller shall
receive any notice to the contrary prior to Closing, Seller
will inform Buyer prior to Closing.
(b) Seller has not received any notice that the use and
operation of the Entire Property is not in full compliance
with applicable building codes, safety, fire, zoning, and
land use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller
shall receive any notice to the contrary prior to Closing,
Seller will inform Buyer prior to Closing.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the Tenant from using and operating the Entire
Property after the Closing in the manner in which the Entire
Property has been used and operated prior to the date of
this Agreement. If Seller shall receive any notice to the
contrary prior to Closing, Seller will inform Buyer prior to
Closing.
(d) Seller has not received any notice that the Entire
Property is in violation of any federal, state or local law,
ordinance, or regulations relating to industrial hygiene or
the environmental conditions on, under, or about the Entire
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 Entire 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
Entire Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Entire Property arising out of Seller's gross negligence or
intentional misconduct. If Seller shall receive any notice
to the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(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, if in Seller's
possession, 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
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
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 in
paragraph 11(a) and (b) above, Seller makes no Warranty or
representation, Express or Implied, or arising by operation
of law, including, but not limited to, any warranty or
condition, habitability, tenantability, suitability for
commercial purposes, merchantability, or fitness for a
particular purpose, in respect of the Property.
The provisions (d) - (f) above shall survive Closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into
escrow an executed special warranty deed warranting title
against lawful claims by, through, or under a conveyance
from Seller, but not further or otherwise, conveying
insurable title of the Property to Buyer, subject to the
exceptions contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. In addition, 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:
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
(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
should be destroyed or further damaged by fire, the
elements, or any cause, due to events occurring subsequent
to the date of this Agreement to the extent that the cost of
repair exceeds $10,000.00, this Agreement shall become null
and void, at Buyer's option exercised, if at all, by written
notice to Seller within ten (10) days after Buyer has
received written notice from Seller of said destruction or
damage. Seller, however, shall have the right to adjust or
settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived;
and (ii) any ten-day period provided for above in this
Subparagraph 16a for Buyer to elect to terminate this
Agreement has expired or Buyer has, by written notice to
Seller, waived Buyer's right to terminate this Agreement.
If Buyer elects to proceed and to consummate the purchase
despite said damage or destruction, there shall be no
reduction in or abatement of the purchase price, and Seller
shall assign to Buyer the Seller's right, title, and
interest in and to all insurance proceeds (pro-rata in
relation to the Entire Property) resulting from said damage
or destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of any
Tenant of the Entire Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(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).
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
17. BUYER'S 1031 TAX DEFERRED EXCHANGE.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax deferred
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 Western American Exchange
who will act as Accommodator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby
Western American Exchange will be an independent third party
purchasing the ownership interest in subject property from Seller
and selling the ownership interest in subject property to Buyer
under the same terms and conditions as documented in this
Purchase Agreement. Buyer asks the Seller, and Seller agrees to
cooperate in the perfection of such an exchange if at no
additional cost or expense to Seller or delay in time. Buyer
hereby indemnifies and holds Seller harmless from any claims
and/or actions resulting from said exchange. Pursuant to the
direction of Western American Exchange, Seller will deed the
property to Buyer.
18. CANCELLATION
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. MISCELLANEOUS.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by March 1, 1999, 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
Buyer Initial: /s/ TH /s/ JSH
Purchase Agreement for Hometown Buffet - Tucson, AZ
overnight delivery to the party at his or its address set
forth below, or to such other address as such party may
hereafter designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
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:
Terry Harsha, Sr. and Janet Sue Harsha
730 Chantry Circle
Simi Valley, CA 93065
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller. Seller has five (5) business days from
receipt within which to accept this offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: TERRY HARSHA, SR. AND JANET SUE HARSHA AS JOINT TENANTS
By: /s/ Terry Harsha Sr
Terry Harsha, Sr.
By: /s/ Janet Sue Harsha
Janet Sue Harsha
SELLER: AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP a Minnesota
limited partnership
By: AEI Fund Management XVIII Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
and
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
EXHIBIT "A"
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 00 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 00 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.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Hometown Buffet Restaurant - Tucson, AZ)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 5th day of March, 1999, by and
between Terry Harsha, Sr. and Janet Sue Harsha, as joint tenants
(hereinafter called "Harsha"), and AEI Net Lease Income & Growth
Fund XIX Limited Partnership (hereinafter called "Fund XIX")
Harsha, 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 46.5372% interest
in and to, and Harsha presently owns an undivided 9.9617%
interest in and to, and Sherrill L. Hossom, as trustee presently
owns an undivided 7.4713% interest in and to, and Linda L.
Landes, as trustee presently owns an undivided 7.4713% interest
in and to, and Marshall Kilduff presently owns an undivided
15.80% interest in and to, and Larry Z. White and Mary J. White
presently own an undivided 12.7585% interest in and to the land,
situated in the City of Tucson, County of Pima, and State of AZ,
(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 Harsha'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 Harsha 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, and Fund XIX retains the sole right
to deal with, any property agent or tenant and to negotiate and
enter into, on terms and provisions satisfactory to Fund XIX,
monitor, execute and enforce the terms of leases of space within
the Premises, including but not limited to any amendments,
consents to assignment, sublet, releases or modifications to
leases or guarantees of lease or easements affecting the
Premises, on behalf of Harsha. As long as Fund XIX owns an
interest in the Premises, only Fund XIX may obligate Harsha 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 Harsha 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-Tenant Initial:/s/ TH /s/ JSH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
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 and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XIX may offset
against, pay to itself and deduct from any payment due to Harsha
under this Agreement, and may pay to itself the amount of
Harsha's share of any reasonable expenses of the Premises which
are not paid by Harsha 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 Harsha'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
tenant under terms of any lease agreement of the Premises.
Harsha has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XIX in the amount
of $595 for the expenses, direct and indirect, incurred by Fund
XIX in providing Harsha with quarterly accounting and
distributions of Harsha's share of net income and for tracking,
reporting and assessing the calculation of Harsha's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Harsha authorizes
Fund XIX to deduct such amount from Harsha's share of revenue
from the Premises. Harsha may terminate this agreement in this
paragraph respecting accounting and distributions at any time and
attempt to collect its share of rental income directly from the
tenant; however, enforcement of all other provisions of the lease
remains the sole right of Fund XIX pursuant to Section 1 hereof.
Fund XIX may terminate its obligation under this paragraph upon
30 days notice to Harsha prior to the end of each anniversary
hereof, unless agreed in writing to the contrary.
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, Harsha shall be entitled
to receive 9.9617% of all items of income and expense generated
by the Premises. Upon receipt of said accounting, if the
payments received by each Co-Tenant pursuant to this Paragraph 3
do not equal, in the aggregate, the amounts which each are
entitled to receive proportional to its share of ownership with
respect to said calendar year pursuant to Paragraph 2 hereof, an
appropriate adjustment shall be made so that each Co-Tenant
receives the amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements, for which adequate reserves do not
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor from Fund 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,
Co-Tenant Initial:/s/ TH /s/ JSH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
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.
7. This Co-Tenancy 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 June 30,
2023 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 any portion of 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 given
to all known Co-Tenants and 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 Income and Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Harsha:
Terry Harsha, Sr. and Janet Sue Harsha
730 Chantry Circle
Simi Valley, CA 93065
If to Hossom:
Sherrill L. Hossom, Trustee
19695 Ridgewood Drive
Bend, OR 97701
Co-Tenant Initial:/s/ TH /s/ JSH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
If to Landes:
Linda L. Landes, Trustee
5621 Corso Di Napoli
Long Beach, CA 90803
If to Kilduff:
Marshall Kilduff
321 Lake Street
San Francisco, CA 94118-1320
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. 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.
The remainder of this page intentionally left blank.
Co-Tenant Initial:/s/ TH /s/ JSH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Harsha TERRY HARSHA, SR. AND JANET SUE HARSHA AS JOINT TENANTS
By: /s/ Terry Harsha Sr.
Terry Harsha, Sr.
By: /s/ Janet Sue Harsha
Janet Sue Harsha [notary seal]
State of California)
) ss.
County of Ventura)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 27 day of February,
1999, Terry Harsha, Sr., who executed the foregoing instrument in
said capacity.
/s/Ed Coyle
Notary Public [notary seal]
State of California)
) ss.
County of Ventura)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 27 day of February,
1999, Janet Sue Harsha, who executed the foregoing instrument in
said capacity.
/s/ Ed Coyle
Notary Public
Co-Tenant Initial:/s/ TH /s/ JSH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
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
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 5th day of March,
1999, Robert P. Johnson, President of AEI Fund Management XIX,
Inc., corporate general partner of AEI 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/ Laura M Steidl
Notary Public
[notary seal]
Co-Tenant Initial:/s/ TH /s/ JSH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
EXHIBIT "A"
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 00 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 00 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
Hometown Buffet Restaurant-Tucson, AZ
This AGREEMENT, entered into effective as of the 25 of March,
1999.
l. PARTIES. Seller is AEI Net Lease Income & Growth Fund XIX
Limited Partnership which owns and undivided 46.5372% interest in
the fee title to that certain real property legally described in
the attached Exhibit "A" (the "Entire Property") Buyer is Eugene
M. Hamilton and Carma Rae Hamilton, Trustees of the Eugene M.
Hamilton Family Revocable Trust, dated 10/29/81 ("Buyer"). Seller
wishes to sell and Buyer wishes to buy a portion as Tenant in
Common of Seller's interest in the Entire Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
consists of an undivided 11.8047 percentage interest
(hereinafter, simply the "Property") as Tenant in Common in the
Entire Property.
3. PURCHASE PRICE . The purchase price for this percentage
interest in the Entire Property is $237,000 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 (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed.
(b) Buyer will deposit the balance of the purchase price,
$232,000 (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 March 30, 1999.
6. DUE DILIGENCE. Buyer will have until the expiration of the
tenth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) A copy 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) A copy of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
Buyer Initial: /s/EMH /s/ CRH
Purchase Agreement for Hometown Buffet - Tucson, AZ
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 AEI Net Lease Income & Growth
Fund XIX Limited Partnership 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, via first class
mail, return receipt requested, to Seller and escrow holder
before the expiration of the Review Period. Such notice shall be
deemed effective only upon receipt by Seller. If this Agreement
is not cancelled as set forth above, the First Payment shall be
non-refundable unless Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under the first paragraph of section 6 of this
Agreement (which will survive), Buyer (after execution of such
documents reasonably requested by Seller to evidence the
termination hereof) shall be returned its First Payment, and
Buyer will have absolutely no rights, claims or interest of any
type in connection with the Property or this transaction,
regardless of any alleged conduct by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to be in default under this Agreement.
Seller may, at its option, retain the First Payment and declare
this Agreement null and void, in which event Buyer will be deemed
to have canceled this Agreement and relinquish all rights in and
to the Property or Seller may exercise its rights under Section
14 hereof. If this Agreement is not canceled and the 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 commitment of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed ten (10) 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. Seller has no obligation to spend any funds or make any
effort to satisfy Buyer's objections if any.
Buyer Initial:
Purchase Agreement for Hometown Buffet - Tucson, AZ
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
of satisfaction of Buyer's objections to the Buyer, the parties
shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid real estate taxes and unpaid
levied and pending special assessments existing on the date
of Closing shall be the responsibility of Buyer and Seller
in proportion to their respective Tenant in Common
interests, pro-rated, however, to the date of closing for
the period prior to closing, which shall be the
responsibility of Seller if Tenant shall not pay the same.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate share
of all operating expenses of the Entire 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 AEI Real
Estate Fund XVIII Limited Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, and AEI Institutional Net
Lease Fund '93 Limited Partnership (as "Landlord") and JB'S
Restaurants, Inc. now known as Summit Family Restaurants Inc.
("Tenant") dated June 16, 1993, and the Sublease Agreement
between JB's Restaurants, Inc. and HTB Restaurants, Inc., dated
June 16, 1993, Seller is not aware of any leases of the Property.
The above referenced lease agreement also has a first right of
refusal in favor of the Tenant as set forth in Article 34 of said
lease agreement, which right shall apply to any attempted
disposition of the Property by Buyer after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
Buyer Initial:
Purchase Agreement for Hometown Buffet - Tucson, AZ
(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) Seller has not received any notice of any material,
physical, or mechanical defects of the Entire Property,
including without limitation, the plumbing, heating, air
conditioning, ventilating, electrical system. To the best of
Seller's knowledge without inquiry, all such items are in
good operating condition and repair and in compliance with
all applicable governmental, zoning, and land use laws,
ordinances, regulations and requirements. If Seller shall
receive any notice to the contrary prior to Closing, Seller
will inform Buyer prior to Closing.
(b) Seller has not received any notice that the use and
operation of the Entire Property is not in full compliance
with applicable building codes, safety, fire, zoning, and
land use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller
shall receive any notice to the contrary prior to Closing,
Seller will inform Buyer prior to Closing.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the Tenant from using and operating the Entire
Property after the Closing in the manner in which the Entire
Property has been used and operated prior to the date of
this Agreement. If Seller shall receive any notice to the
contrary prior to Closing, Seller will inform Buyer prior to
Closing.
(d) Seller has not received any notice that the Entire
Property is in violation of any federal, state or local law,
ordinance, or regulations relating to industrial hygiene or
the environmental conditions on, under, or about the Entire
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 Entire 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
Entire Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Entire Property arising out of Seller's gross negligence or
intentional misconduct. If Seller shall receive any notice
to the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(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 Entire Property and such financial information on
the Lessee and Guarantors of the Lease as Buyer or its advisors
shall request, if in Seller's possession, 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
Buyer Initial: Purchase Agreement for Hometown Buffet -
Tucson, AZ
provided by Seller with respect to the Property, the Entire
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 except as
herein set forth. 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 in
paragraph 11(a) and (b) above and this paragraph 12, Seller
makes no Warranty or representation, Express or Implied, or
arising by operation of law, including, but not limited to,
any warranty of condition, habitability, tenantability,
suitability for commercial purposes, merchantability, or
fitness for a particular purpose, in respect of the
Property.
The provisions (d) - (f) above shall survive Closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into
escrow an executed special warranty deed warranting title
against lawful claims by, through, or under a conveyance
from Seller, but not further or otherwise, conveying
insurable title of the Property to Buyer, subject to the
exceptions contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. The foregoing sentence notwithstanding, Seller shall
strictly comply with the last sentence of Section 6.
In addition, 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. If Seller shall default, Buyer
shall have the option to require the return of all of the
First and Second payments which have been made or deposited
into escrow.
Buyer Initial:
Purchase Agreement for Hometown Buffet - Tucson, AZ
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
should be destroyed or further damaged by fire, the
elements, or any cause, due to events occurring subsequent
to the date of this Agreement to the extent that the cost of
repair exceeds $10,000.00, this Agreement shall become null
and void, at Buyer's option exercised, if at all, by written
notice to Seller within ten (10) days after Buyer has
received written notice from Seller of said destruction or
damage. Seller, however, shall have the right to adjust or
settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived;
and (ii) any ten-day period provided for above in this
Subparagraph 16a for Buyer to elect to terminate this
Agreement has expired or Buyer has, by written notice to
Seller, waived Buyer's right to terminate this Agreement.
If Buyer elects to proceed and to consummate the purchase
despite said damage or destruction, there shall be no
reduction in or abatement of the purchase price, and Seller
shall assign to Buyer the Seller's right, title, and
interest in and to all insurance proceeds (pro-rata in
relation to the Entire Property) resulting from said damage
or destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of any
Tenant of the Entire Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(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).
Buyer Initial:
Purchase Agreement for Hometown Buffet - Tucson, AZ
17. BUYER'S 1031 TAX DEFERRED EXCHANGE.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax deferred
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 1031 Real Estate Services
who will act as Accommodator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby 1031
Real Estate Services will be an independent third party
purchasing the ownership interest in subject property from Seller
and selling the ownership interest in subject property to Buyer
under the same terms and conditions as documented in this
Purchase Agreement. Buyer asks the Seller, and Seller agrees to
cooperate in the perfection of such an exchange if at no
additional cost or expense to Seller or delay in time. Buyer
hereby indemnifies and holds Seller harmless from any claims
and/or actions resulting from said exchange. Pursuant to the
direction of 1031 Real Estate Services, Seller will deed the
property to Buyer.
18. CANCELLATION
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. MISCELLANEOUS.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by March 30, 1999,
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
Buyer Initial:
Purchase Agreement for Hometown Buffet - Tucson, AZ
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:
Eugene Hamilton, Trustee
Carma Rae Hamilton, Trustee
21 East 1700 South
Bountiful, UT 84010
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller. Seller has five (5) business days from
receipt within which to accept this offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: EUGENE M. HAMILTON AND CARMA RAE HAMILTON, TRUSTEES OF
THE EUGENE M. HAMILTON FAMILY REVOCABLE TRUST, DATED
10/29/81.
By: /s/ Eugene M Hamilton
Eugene M. Hamilton, Trustee
By: /s/ Carma Rae Hamilton
Carma Rae Hamilton, Trustee
Buyer Initial: /s/EMH /s/ CRH
Purchase Agreement for Hometown Buffet - Tucson, AZ
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:
Purchase Agreement for Hometown Buffet - Tucson, AZ
EXHIBIT "A"
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 00 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 00 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
Hometown Buffet Restaurant-Tucson, AZ
This AGREEMENT, entered into effective as of the 25 of March,
1999.
l. PARTIES. Seller is AEI Net Lease Income & Growth Fund XIX
Limited Partnership which owns and undivided 46.5372% interest in
the fee title to that certain real property legally described in
the attached Exhibit "A" (the "Entire Property") Buyer is Tom S.
Obata ("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 12.6016 percentage interest
(hereinafter, simply the "Property") as Tenant in Common in the
Entire Property.
3. PURCHASE PRICE . The purchase price for this percentage
interest in the Entire Property is $253,000 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 (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed.
(b) Buyer will deposit the balance of the purchase price,
$248,000 (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 March 31, 1999.
6. DUE DILIGENCE. Buyer will have until the expiration of the
tenth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) A copy 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) A copy of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
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 AEI Net Lease Income & Growth
Fund XIX Limited Partnership and dated
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
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, via first class
mail, return receipt requested, to Seller and escrow holder
before the expiration of the Review Period. Such notice shall be
deemed effective only upon receipt by Seller. If this Agreement
is not cancelled as set forth above, the First Payment shall be
non-refundable unless Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under the first paragraph of section 9 of this
Agreement (which will survive), Buyer (after execution of such
documents reasonably requested by Seller to evidence the
termination hereof) shall be returned its First Payment, and
Buyer will have absolutely no rights, claims or interest of any
type in connection with the Property or this transaction,
regardless of any alleged conduct by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to be in default under this Agreement.
Seller may, at its option, retain the First Payment and declare
this Agreement null and void, in which event Buyer will be deemed
to have canceled this Agreement and relinquish all rights in and
to the Property or Seller may exercise its rights under Section
14 hereof. If this Agreement is not canceled and the 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 commitment of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed ten (10) 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. Seller has no obligation to spend any funds or make any
effort to satisfy Buyer's objections if any.
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
of satisfaction of Buyer's
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
objections to the Buyer, the parties shall perform this Agreement
according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid real estate taxes and unpaid
levied and pending special assessments existing on the date
of Closing shall be the responsibility of Buyer and Seller
in proportion to their respective Tenant in Common
interests, pro-rated, however, to the date of closing for
the period prior to closing, which shall be the
responsibility of Seller if Tenant shall not pay the same.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate share
of all operating expenses of the Entire 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 AEI Real
Estate Fund XVIII Limited Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, and AEI Institutional Net
Lease Fund '93 Limited Partnership (as "Landlord") and JB'S
Restaurants, Inc. now known as Summit Family Restaurants Inc.
("Tenant") dated June 16, 1993, and the Sublease Agreement
between JB's Restaurants, Inc. and HTB Restaurants, Inc., dated
June 16, 1993, Seller is not aware of any leases of the Property.
The above referenced lease agreement also has a first right of
refusal in favor of the Tenant as set forth in Article 34 of said
lease agreement, which right shall apply to any attempted
disposition of the Property by Buyer after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
(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) Seller has not received any notice of any material,
physical, or mechanical defects of the Entire Property,
including without limitation, the plumbing, heating, air
conditioning, ventilating, electrical system. To the best of
Seller's knowledge without inquiry, all such items are in
good operating condition and repair and in compliance with
all applicable governmental, zoning, and land use laws,
ordinances, regulations and requirements. If Seller shall
receive any notice to the contrary prior to Closing, Seller
will inform Buyer prior to Closing.
(b) Seller has not received any notice that the use and
operation of the Entire Property is not in full compliance
with applicable building codes, safety, fire, zoning, and
land use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller
shall receive any notice to the contrary prior to Closing,
Seller will inform Buyer prior to Closing.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the Tenant from using and operating the Entire
Property after the Closing in the manner in which the Entire
Property has been used and operated prior to the date of
this Agreement. If Seller shall receive any notice to the
contrary prior to Closing, Seller will inform Buyer prior to
Closing.
(d) Seller has not received any notice that the Entire
Property is in violation of any federal, state or local law,
ordinance, or regulations relating to industrial hygiene or
the environmental conditions on, under, or about the Entire
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 Entire 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
Entire Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Entire Property arising out of Seller's gross negligence or
intentional misconduct. If Seller shall receive any notice
to the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(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, if in Seller's possession, 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
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
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 in
paragraph 11(a) and (b) above, Seller makes no Warranty or
representation, Express or Implied, or arising by operation
of law, including, but not limited to, any warranty or
condition, habitability, tenantability, suitability for
commercial purposes, merchantability, or fitness for a
particular purpose, in respect of the Property.
The provisions (d) - (f) above shall survive Closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into
escrow an executed special warranty deed warranting title
against lawful claims by, through, or under a conveyance
from Seller, but not further or otherwise, conveying
insurable title of the Property to Buyer, subject to the
exceptions contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. In addition, 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,
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
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
should be destroyed or further damaged by fire, the
elements, or any cause, due to events occurring subsequent
to the date of this Agreement to the extent that the cost of
repair exceeds $10,000.00, this Agreement shall become null
and void, at Buyer's option exercised, if at all, by written
notice to Seller within ten (10) days after Buyer has
received written notice from Seller of said destruction or
damage. Seller, however, shall have the right to adjust or
settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived;
and (ii) any ten-day period provided for above in this
Subparagraph 16a for Buyer to elect to terminate this
Agreement has expired or Buyer has, by written notice to
Seller, waived Buyer's right to terminate this Agreement.
If Buyer elects to proceed and to consummate the purchase
despite said damage or destruction, there shall be no
reduction in or abatement of the purchase price, and Seller
shall assign to Buyer the Seller's right, title, and
interest in and to all insurance proceeds (pro-rata in
relation to the Entire Property) resulting from said damage
or destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of any
Tenant of the Entire Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(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).
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
17. BUYER'S 1031 TAX DEFERRED EXCHANGE.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax deferred
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 Starker Services, Inc. who
will act as Accommodator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby
Starker Services, Inc. will be an independent third party
purchasing the ownership interest in subject property from Seller
and selling the ownership interest in subject property to Buyer
under the same terms and conditions as documented in this
Purchase Agreement. Buyer asks the Seller, and Seller agrees to
cooperate in the perfection of such an exchange if at no
additional cost or expense to Seller or delay in time. Buyer
hereby indemnifies and holds Seller harmless from any claims
and/or actions resulting from said exchange. Pursuant to the
direction of Starker Services, Inc., Seller will deed the
property to Buyer.
18. CANCELLATION
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. MISCELLANEOUS.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by March 31, 1999,
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
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
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:
Tom S. Obata
2395 Ric Drive
Gilroy, CA 95020
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller. Seller has five (5) business days from
receipt within which to accept this offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: TOM S. OBATA
By:/s/ Tom S. Obata
Tom S. Obata
Buyer Initial: /s/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
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/ TSO
Purchase Agreement for Hometown Buffet - Tucson, AZ
EXHIBIT "A"
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 00 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 00 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.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Hometown Buffet Restaurant - Tucson, AZ)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 29 day of March, 1999, by and
between Eugene M. Hamilton and Carma Rae Hamilton, Trustees of
the Eugene M. Hamilton Family Revocable Trust, dated 10/29/81
(hereinafter called "Hamilton"), and AEI Net Lease Income &
Growth Fund XIX Limited Partnership (hereinafter called "Fund
XIX") Hamilton, 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 34.7325% interest
in and to, and Hamilton presently owns an undivided 11.8047%
interest in and to, and Terry Harsha, Sr. and Janet Sue Harsha
presently own an undivided 9.9617% interest in and to, and
Sherrill L. Hossom, as trustee presently owns an undivided
7.4713% interest in and to, and Linda L. Landes, as trustee
presently owns an undivided 7.4713% interest in and to, and
Marshall Kilduff presently owns an undivided 15.80% interest in
and to, and Larry Z. White and Mary J. White presently own an
undivided 12.7585% interest in and to the land, situated in the
City of Tucson, County of Pima, and State of AZ, (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 Hamilton'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 Hamilton 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 good faith 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, and Fund XIX retains the sole right
to deal with, any property agent or tenant and to negotiate and
enter into, on terms and provisions satisfactory to Fund XIX,
monitor, execute and enforce the terms of leases of space within
the Premises, including but not limited to any amendments,
consents to assignment, sublet, releases or modifications to
leases or guarantees of lease or easements affecting the
Premises, on behalf of Hamilton. As long as Fund XIX owns an
interest in the Premises, only Fund XIX may obligate Hamilton
with respect to any expense for the Premises.
Co-Tenant Initial: /s/ EMH /s/ CRH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
As further set forth in paragraph 2 hereof, Fund XIX agrees to
require any lessee of the Premises to name Hamilton 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 and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XIX may offset
against, pay to itself and deduct from any payment due to
Hamilton under this Agreement, and may pay to itself the amount
of Hamilton's share of any reasonable expenses of the Premises
which are not paid by Hamilton 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 Hamilton'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
tenant under terms of any lease agreement of the Premises.
Hamilton has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XIX in the amount
of $705 for the expenses, direct and indirect, incurred by Fund
XIX in providing Hamilton with quarterly accounting and
distributions of Hamilton's share of net income and for tracking,
reporting and assessing the calculation of Hamilton's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Hamilton
authorizes Fund XIX to deduct such amount from Hamilton's share
of revenue from the Premises. Hamilton may terminate this
agreement in this paragraph respecting accounting and
distributions at any time and attempt to collect its share of
rental income directly from the tenant; however, enforcement of
all other provisions of the lease remains the sole right of Fund
XIX pursuant to Section 1 hereof. Fund XIX may terminate its
obligation under this paragraph upon 30 days notice to Hamilton
prior to the end of each anniversary hereof, unless agreed in
writing to the contrary.
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, Hamilton shall be
entitled to receive 11.8047% of all items of income and expense
generated by the Premises. Upon receipt of said accounting, if
the payments received by each Co-Tenant pursuant to this
Paragraph 3 do not equal, in the aggregate, the amounts which
each are entitled to receive proportional to its share of
ownership with respect to said calendar year pursuant to
Paragraph 2 hereof, an appropriate adjustment shall be made so
that each Co-Tenant receives the amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements,
for which adequate reserves do not exist, need to be made to the
Premises, the
Co-Tenant Initial: /s/ EMH /s/ CRH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
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.
7. This Co-Tenancy 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 June 30,
2023 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 any portion of 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. Hamilton agrees to notify Fund XIX upon the
appointment of any successor trustee, or any amendment of the
Eugene M. Hamilton Family Revocable Trust affecting the powers of
the Trustees to manage or dispose of the Eugene M. Hamilton
Family Revocable Trust's interest in the Premises.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be given
to all known Co-Tenants and 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 Income and Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Hamilton:
Eugene M. Hamilton, Trustee
Carma Rae Hamilton, Trustee
21 East 1700 South
Bountiful, UT 84010
Co-Tenant Initial: /s/ EMH /s/ CRH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
If to Harsha:
Terry Harsha, Sr. and Janet Sue Harsha
730 Chantry Circle
Simi Valley, CA 93065
If to Hossom:
Sherrill L. Hossom, Trustee
19695 Ridgewood Drive
Bend, OR 97701
If to Landes:
Linda L. Landes, Trustee
5621 Corso Di Napoli
Long Beach, CA 90803
If to Kilduff:
Marshall Kilduff
321 Lake Street
San Francisco, CA 94118-1320
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. 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/ EMH /s/ CRH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Hamilton EUGENE M. HAMILTON AND CARMA RAE HAMILTON, TRUSTEES OF
THE EUGENE M. HAMILTON FAMILY REVOCABLE TRUST, DATED
10/29/81.
By:/s/ Eugene M Hamilton
Eugene M. Hamilton, Trustee
State of Jamaica)
City of Kingston ) ss.
County of Embassy of the United States )
Of America
I hereby certify there appeared before me this 25th day of March,
1999, Eugene M. Hamilton, Trustee, who executed the foregoing
instrument in said capacity.
/s/ Glenn W Carey
Consul of the United States
of America
By: /s/ Carma Rae Hamilton
Carma Rae Hamilton, Trustee
State of Jamaica)
City of Kingston ) ss.
County of Embassy of the United States )
Of America
I hereby certify there appeared before me this 25th day of March,
1999, Carma Rae Hamilton, Trustee, who executed the foregoing
instrument in said capacity.
/s/ Glenn W Carey
Co-Tenant Initial: /s/ EMH /s/ CRH
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
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
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 29 day of March,
1999, Robert P. Johnson, President of AEI Fund Management XIX,
Inc., corporate general partner of AEI 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/ Laura M Steidl
Notary Public
[notary seal]
Co-Tenant Initial:
Co-Tenancy Agreement for Hometown Buffet - Tucson, AZ
EXHIBIT "A"
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 00 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 00 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.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Hometown Buffet Restaurant - Tucson, AZ)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 31st day of March, 1999, by and
between Tom S. Obata (hereinafter called "Obata"), and AEI Net
Lease Income & Growth Fund XIX Limited Partnership (hereinafter
called "Fund XIX") Obata, 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 22.1309% interest
in and to, and Obata presently owns an undivided 12.6016%
interest in and to, and Eugene M. Hamilton, as trustee presently
owns an undivided 11.8047% interest in and to, and Terry Harsha,
Sr. and Janet Sue Harsha presently own an undivided 9.9617%
interest in and to, and Sherrill L. Hossom, as trustee presently
owns an undivided 7.4713% interest in and to, and Linda L.
Landes, as trustee presently owns an undivided 7.4713% interest
in and to, and Marshall Kilduff presently owns an undivided
15.80% interest in and to, and Larry Z. White and Mary J. White
presently own an undivided 12.7585% interest in and to the land,
situated in the City of Tucson, County of Pima, and State of AZ,
(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 Obata'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 Obata 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, and Fund XIX retains the sole right
to deal with, any property agent or tenant and to negotiate and
enter into, on terms and provisions satisfactory to Fund XIX,
monitor, execute and enforce the terms of leases of space within
the Premises, including but not limited to any amendments,
consents to assignment, sublet, releases or modifications to
leases or guarantees of lease or easements affecting the
Premises, on behalf of Obata. As long as Fund XIX owns an
interest in the Premises, only Fund XIX may obligate Obata with
respect to any expense for the Premises.
Co-Tenant Initial: /s/ TSO
Co-Tenancy Agreement for Hometown Buffet - Tucson,AZ
As further set forth in paragraph 2 hereof, Fund XIX agrees to
require any lessee of the Premises to name Obata 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 and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XIX may offset
against, pay to itself and deduct from any payment due to Obata
under this Agreement, and may pay to itself the amount of Obata's
share of any reasonable expenses of the Premises which are not
paid by Obata 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 Obata'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
tenant under terms of any lease agreement of the Premises.
Obata has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XIX in the amount
of $753 for the expenses, direct and indirect, incurred by Fund
XIX in providing Obata with quarterly accounting and
distributions of Obata's share of net income and for tracking,
reporting and assessing the calculation of Obata's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Obata authorizes
Fund XIX to deduct such amount from Obata's share of revenue from
the Premises. Obata may terminate this agreement in this
paragraph respecting accounting and distributions at any time and
attempt to collect its share of rental income directly from the
tenant; however, enforcement of all other provisions of the lease
remains the sole right of Fund XIX pursuant to Section 1 hereof.
Fund XIX may terminate its obligation under this paragraph upon
30 days notice to Obata prior to the end of each anniversary
hereof, unless agreed in writing to the contrary.
2. 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, Obata shall be entitled
to receive 12.6016% of all items of income and expense generated
by the Premises. Upon receipt of said accounting, if the
payments received by each Co-Tenant pursuant to this Paragraph 3
do not equal, in the aggregate, the amounts which each are
entitled to receive proportional to its share of ownership with
respect to said calendar year pursuant to Paragraph 2 hereof, an
appropriate adjustment shall be made so that each Co-Tenant
receives the amount to which it is entitled.
Co-Tenant Initial: /s/ TSO
Co-Tenancy Agreement for Hometown Buffet - Tucson,AZ
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.
7. This Co-Tenancy 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 June 30,
2023 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 any portion of 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 given
to all known Co-Tenants and 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 Income and Growth Fund XIX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Obata:
Tom S. Obata
2395 Ric Drive
Gilroy, CA 95020
Co-Tenant Initial: /s/ TSO
Co-Tenancy Agreement for Hometown Buffet - Tucson,AZ
If to Hamilton:
Eugene M. Hamilton, Trustee
21 East 1700 South
Bountiful, UT 84010
If to Harsha:
Terry Harsha, Sr. and Janet Sue Harsha
730 Chantry Circle
Simi Valley, CA 93065
If to Hossom:
Sherrill L. Hossom, Trustee
19695 Ridgewood Drive
Bend, OR 97701
If to Landes:
Linda L. Landes, Trustee
5621 Corso Di Napoli
Long Beach, CA 90803
If to Kilduff:
Marshall Kilduff
321 Lake Street
San Francisco, CA 94118-1320
If to White:
Larry Z. White and Mary J. White
2587 Calypso Drive
Lake Havasu City, AZ 86406
The remainder of this page intentionally left blank
Co-Tenant Initial: /s/ TSO
Co-Tenancy Agreement for Hometown Buffet - Tucson,AZ
Each mailed notice or election shall be deemed to have been given
to, or served upon, the party to which addressed on the date the
same is deposited in the United States certified mail, return
receipt requested, postage prepaid, or given to a nationally
recognized courier service guaranteeing overnight delivery as
properly addressed in the manner above provided. Any party hereto
may change its address for the service of notice hereunder by
delivering written notice of said change to the other parties
hereunder, in the manner above specified, at least ten (10) days
prior to the effective date of said change.
9. This Agreement shall not create any partnership or joint
venture among or between the Co-Tenants or any of them, and the
only relationship among and between the Co-Tenants hereunder
shall be that of owners of the premises as tenants in common
subject to the terms hereof.
10. The unenforceability or invalidity of any provision or
provisions of this Agreement as to any person or circumstances
shall not render that provision, nor any other provision hereof,
unenforceable or invalid as to any other person or circumstances,
and all provisions hereof, in all other respects, shall remain
valid and enforceable.
11. In the event any litigation arises between the parties
hereto relating to this Agreement, or any of the provisions
hereof, the party prevailing in such action shall be entitled to
receive from the losing party, in addition to all other relief,
remedies and damages to which it is otherwise entitled, all
reasonable costs and expenses, including reasonable attorneys'
fees, incurred by the prevailing party in connection with said
litigation.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Obata TOM S. OBATA
By: /s/ Tom S Obata
Tom S. Obata
State of California)
) ss.
County of Santa Cruz)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 25 day of March,
1999, Tom S. Obata, who executed the foregoing instrument in said
capacity.
/s/ Colleen Winston
Notary Public
[notary seal]
Co-Tenant Initial: /s/ TSO
Co-Tenancy Agreement for Hometown Buffet - Tucson,AZ
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
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 31st day of March,
1999, Robert P. Johnson, President of AEI Fund Management XIX,
Inc., corporate general partner of AEI 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/ Laura M Steidl
Notary Public
[notary seal]
Co-Tenant Initial: /s/ TSO
Co-Tenancy Agreement for Hometown Buffet - Tucson,AZ
EXHIBIT "A"
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 00 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 00 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.
<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-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,431,248
<SECURITIES> 0
<RECEIVABLES> 27,373
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,458,621
<PP&E> 15,464,156
<DEPRECIATION> (1,403,995)
<TOTAL-ASSETS> 15,518,782
<CURRENT-LIABILITIES> 519,332
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 14,999,450
<TOTAL-LIABILITY-AND-EQUITY> 15,518,782
<SALES> 0
<TOTAL-REVENUES> 487,191
<CGS> 0
<TOTAL-COSTS> 178,487
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 459,749
<INCOME-TAX> 0
<INCOME-CONTINUING> 459,749
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 459,749
<EPS-PRIMARY> 21.92
<EPS-DILUTED> 21.92
</TABLE>
