SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Under Section 13 or 15(d)
Of The Securities Exchange Act Of 1934
For the Fiscal Year Ended: December 31, 1996
Commission file number: 0-23778
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
(Name of Small Business Issuer in its Charter)
State of Minnesota 41-1729121
(State or other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(612) 227-7333
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
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 past 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
Check if disclosure of delinquent filers in response to Rule 405
of Regulation S-B is not contained in this Form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Issuer's revenues for year ended December 31, 1996 were
$2,359,797.
As of February 28, 1997, there were 23,652.3 Units of limited
partnership interest in the registrant outstanding and owned by
nonaffiliates of the registrant, which Units had an aggregate
market value (based solely on the price at which they were sold
since there is no ready market for such Units) of $23,652,300.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant has not incorporated any documents by reference
into this report.
Transitional Small Business Disclosure Format:
Yes No [X]
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
AEI Net Lease Income & Growth Fund XX Limited Partnership
(the "Partnership" or the "Registrant") is a limited partnership
which was organized pursuant to the laws of the State of
Minnesota on September 2, 1992. The registrant is comprised of
AEI Fund Management XX, Inc. (AFM) as Managing General Partner,
Robert P. Johnson as the Individual General Partner, and
purchasers of partnership units as Limited Partners. The
Partnership offered for sale up to $24,000,000 of limited
partnership interests (the "Units") (24,000 Units at $1,000 per
Unit) pursuant to a registration statement effective January 20,
1993. The Partnership commenced operations on June 30, 1993 when
minimum subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 19, 1995, the
Partnership's offering terminated when the maximum subscription
limit of 24,000 Limited Partnership Units ($24,000,000) was
reached.
The Partnership was organized to acquire existing and
newly constructed commercial properties located in the United
States, to lease such properties to tenants under triple net
leases, to hold such properties and to eventually sell such
properties. As of December 31, 1996, from subscription proceeds,
the Partnership had purchased thirteen properties, including
partial interests in four properties, at a total cost of
$19,421,783. The balance of the subscription proceeds was
applied to organization and syndication costs, working capital
reserves and distributions, which represented a return of
capital. The properties are all commercial, single tenant
buildings leased under triple net leases.
The Partnership's properties will be purchased with
subscription proceeds without any indebtedness. The Partnership
will not finance properties in the future to obtain proceeds for
new property acquisitions. If it is required to do so, the
Partnership may incur short-term indebtedness, which may be
secured by a portion of the Partnership's properties, to finance
the day-to-day cash flow requirements of the Partnership
(including cash flow necessary to repurchase Units). The amount
of borrowings that may be secured by the Partnership's properties
is limited in the aggregate to 10% of the purchase price of all
Partnership properties. The Partnership will not incur
borrowings prior to application of the proceeds from sale of the
Units, will not incur borrowings to pay distributions, and will
not incur borrowings while there is cash available for
distributions.
The Partnership will hold its properties until the General
Partners determine that the sale or other disposition of the
properties is advantageous in view of the Partnership's
investment objectives. In deciding whether to sell properties,
the General Partners will consider factors such as potential
appreciation, net cash flow and income tax considerations. In
addition, certain lessees have been granted options to purchase
properties after a specified portion of the lease term has
elapsed. It is anticipated that the Partnership will sell its
properties twelve to fifteen years after acquisition.
Leases
Although there are variations in the specific terms of the
leases, the following is a summary of the general terms of the
Partnership's leases. The properties are leased to various
tenants under noncancelable triple net leases, which are
classified as operating leases. Under a triple net lease, the
lessee is responsible for all real estate taxes, insurance,
maintenance, repairs and operating expenses for the property.
The initial lease terms are for 10 to 20 years. The leases
provide for base annual rental payments, payable in monthly
installments, and contain rent clauses which entitle the
Partnership to receive additional rent in future years based on
stated rent increases.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
The leases provide the lessees with two to five five-year
renewal options subject to the same terms and conditions as the
initial lease. Certain lessees have been granted options to
purchase the property. Depending on the lease, the purchase
price is either determined by a formula, or is the greater of the
fair market value of the property or the amount determined by a
formula. In all cases, if the option were to be exercised by the
lessee, the purchase price would be greater than the original
cost of the property.
During 1995, the Partnership sold 59.8646% of the HomeTown
Buffet restaurant in Albuquerque, New Mexico, in four separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $988,838 which resulted in a
total net gain of $225,180. The total cost and accumulated
depreciation of the interests sold was $792,515 and $28,857,
respectively.
During 1996, the Partnership sold 31.7210% of the
Arby's/Mrs. Winner's restaurant in Smyrna, Georgia, in two
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $461,077 which
resulted in a total net gain of $87,281. The total cost and
accumulated depreciation of the interests sold was $393,493 and
$19,697, respectively.
On January 10, 1997, the Partnership sold an additional
15.8515% interest in the Arby's/Mrs. Winner's restaurant in
Smyrna, Georgia to an unrelated third party. The Partnership
received net sale proceeds of approximately $221,000 which
resulted in a net gain of approximately $35,000.
On December 21, 1995, the Partnership purchased a 33.0%
interest in a Media Play retail store in Apple Valley, Minnesota
for $1,422,701. 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. The remaining
interest in the property was purchased by AEI Net Lease Income &
Growth Fund XIX Limited Partnership and AEI Income & Growth Fund
XXI Limited Partnership, affiliates of the Partnership.
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 is equal to
approximately two years' rent. The Partnership's share of such
payment was $264,000. Under the Agreement, MGI remained in
possession of the property and performed all of its obligations
under the net lease agreement through January 31, 1997 at which
time it vacated the property and made it available for re-let to
another tenant. MGI was responsible for all maintenance and
management costs of the property through January 31, 1997 after
which date the Partnership became responsible for its share of
expenses associated with the property until it is re-let or sold.
A specialist in commercial property leasing has been retained to
locate a new tenant for the property.
Major Tenants
During 1996, four of the Partnership's lessees each
contributed more than ten percent of the Partnership's total
rental revenue. The major tenants in aggregate contributed 65%
of the Partnership's total rental revenue in 1996. Because the
Partnership has not completed its acquisition of properties, it
is not possible to determine which tenants will contribute more
than ten percent of the Partnership's rental income in 1997 and
future years. In the event that certain tenants contribute more
than ten percent of the Partnership's rental income in future
years, any failure of these major tenants could materially affect
the Partnership's net income and cash distributions.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
Competition
The Partnership is a minor factor in the commercial real
estate business. There are numerous entities engaged in the
commercial real estate business which have greater financial
resources than the Partnership. At the time the Partnership
elects to dispose of its properties, the Partnership will be in
competition with other persons and entities to find buyers for
its properties.
Employees
The Partnership has no direct employees. Management
services are performed for the Partnership by AEI Fund
Management, Inc., an affiliate of AFM.
ITEM 2. DESCRIPTION OF PROPERTIES.
Investment Objectives
The Partnership's investment objectives are to acquire
existing or newly-developed commercial properties throughout the
United States that offer the potential for (i) regular cash
distributions of lease income; (ii) growth in lease income
through rent escalation provisions; (iii) preservation of capital
through all-cash sale-leaseback transactions; (iv) capital growth
through appreciation in the value of properties; and (v) stable
property performance through long-term lease contracts. The
Partnership does not have a policy, and there is no limitation,
as to the amount or percentage of assets that may be invested in
any one property. However, to the extent possible, the General
Partners attempt to diversify the type and location of the
Partnership's properties.
Description of Properties
The Partnership's properties are all commercial, single
tenant buildings. The properties were acquired on a debt-free
basis and are leased to various tenants under noncancelable
triple net leases, which are classified as operating leases. The
Partnership holds an undivided fee simple interest in the
properties.
The Partnership's properties are subject to the general
competitive conditions incident to the ownership of single tenant
investment real estate. Since each property is leased under a
long-term lease, there is little competition until the
Partnership decides to sell the property. At this time, the
Partnership will be competing with other real estate owners, on
both a national and local level, in attempting to find buyers for
the properties. In the event of a tenant default, the
Partnership would be competing with other real estate owners, who
have property vacancies, to attract a new tenant to lease the
property. The Partnership's tenants operate in industries that
are very competitive and can be affected by factors such as
changes in regional or local economies, seasonality and changes
in consumer preference.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
The following table is a summary of the properties that
the Partnership acquired and owned as of December 31, 1996.
<TABLE>
<C> <S> <S> <S> <S> <S>
Total Property
Purchase Acquisition Annual Annual
Property Date Costs Lessee Lease Rent Per
Payment Sq. Ft.
HomeTown Buffet Restaurant
Albuquerque, NM JB's
(40.1354%) 9/30/93 $ 531,331 Restaurants, Inc. $ 71,090 $ 18.45
Red Robin Restaurant The Snyder
Colorado Springs, CO 2/24/94 $ 2,302,267 Group Company $ 263,911 $ 36.25
Red Robin Restaurant The Snyder
Colorado Springs, CO 2/24/94 $ 1,755,441 Group Company $ 199,128 $ 27.49
Arby's/Mrs. Winners Restaurant
Smyrna, GA RTM
(68.2790%) 5/16/94 $ 846,987 Georgia, Inc. $ 98,548 $ 35.74
Applebee's Restaurant
Middletown, OH Thomas &
(93.96628%) 7/15/94 $ 1,095,962 King, Inc. $ 121,785 $ 23.78
Huntington
Denny's Restaurant Restaurants
Burleson, TX 12/6/94 $ 923,480 Group, Inc. $ 102,052 $ 21.35
Renaissant
Applebee's Restaurant Development
McAllen, TX 12/8/94 $ 1,320,104 Corporation $ 146,625 $ 27.22
Southland Restaurant
Applebee's Restaurant Development
Lafayette, LA 1/17/95 $ 1,176,559 Company, L.L.C. $ 150,000 $ 27.61
Renaissant
Applebee's Restaurant Development
Brownsville, TX 8/31/95 $ 1,378,736 Corporation $ 151,800 $ 24.93
Huntington
Denny's Restaurant Restaurants
Grapevine, TX 11/21/95 $ 1,354,721 Group, Inc. $ 144,708 $ 29.28
Media Play Retail Store
Apple Valley, MN
(33.0%) 12/21/95 $ 1,422,701 (F1)
Garden Ridge Retail Store
Pineville, NC Garden
(18.50%) 3/28/96 $ 1,667,092 Ridge L.P. $ 174,319 $ 6.67
Champps Restaurant
Lyndhurst, OH Americana Dining
(90.71346%) 4/10/96 $ 2,460,394 Corporation $ 258,886 $ 34.93
<F1>
The property was vacated on January 31, 1997 and listed
for sale or lease.
</TABLE>
The properties listed above with a partial ownership
percentage are owned with affiliates of the Partnership or
unrelated third parties. The remaining interest in the
Applebee's in Middletown is owned by AEI Institutional Net Lease
Fund `93. The remaining interests in the Media Play and Garden
Ridge retail stores are owned by AEI Net Lease Income & Growth
Fund XIX Limited Partnership and AEI Income & Growth Fund XXI
Limited Partnership. The remaining interests in the Champps
property are owned by the Individual General Partner of the
Partnership and AEI Institutional Net Lease Fund '93. The
remaining interests in the HomeTown Buffet and the Arby's/Mrs.
Winner's properties are owned by unrelated third parties.
For properties owned with affiliates, each Partnership
owns a separate, undivided interest in the properties. No
specific agreement or commitment exists between the Partnerships
as to the management of their respective interests in the
properties, and the Partnership that holds more than a 50%
interest does not control decisions over the other Partnership's
interest.
The initial Lease terms are 20 years for the Garden Ridge
store and Champps, HomeTown Buffet, Arby's/Mrs. Winner's, Denny's
and Applebee's restaurants. The Red Robin restaurants' Lease
Agreements expire on November 30, 2004, and December 31, 2007.
The Leases contain renewal options which may extend the Lease
term an additional 10 years except for the Denny's restaurants
and the Applebee's and Champps restaurants in Ohio which have
renewal options that may extend the Lease term an additional 15
years and the Garden Ridge store, which has renewal options that
may extend the Lease term an additional 25 years.
Pursuant to the Lease Agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they occupy. The General Partners believe the properties are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
For tax purposes, the Partnership's properties are
depreciated under the Modified Accelerated Cost Recovery System
(MACRS). The largest depreciable component of a property is the
building which is depreciated, using the straight-line method,
over 40 years. The remaining depreciable components of a
property are personal property and land improvements which are
depreciated, using an accelerated method, over 5 and 15 years,
respectively. Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6) of the
Internal Revenue Code which requires a percentage of the
properties' depreciable components to be depreciated over longer
lives using the straight-line method. In general the federal tax
basis of the properties for tax depreciation purposes is the same
as the basis for book depreciation purposes.
Through December 31, 1996, all properties were 100 percent
occupied by the lessees.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS.
As of December 31, 1996, there were 1,605 holders of
record of the registrant's Limited Partnership Units. There is
no other class of security outstanding or authorized. The
registrant's Units are not a traded security in any market.
However, the Partnership may purchase Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1996, sixteen Limited Partners redeemed a total of
216.2 Partnership Units for $194,115 in accordance with the
Partnership Agreement. In 1995, five Limited Partners redeemed a
total of 131.5 Partnership Units for $118,350 in accordance with
the Partnership Agreement. The redemptions increase the
remaining Limited Partners' ownership interest in the
Partnership.
Cash distributions of $21,355 and $20,438 were made to the
General Partners and $1,919,995 and $1,905,001 were made to the
Limited Partners in 1996 and 1995, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined, and a partial return of contributed
capital. These distributions should not be compared with
dividends paid on capital stock by corporations.
As part of the Limited Partner distributions discussed
above, the Partnership distributed $99,565 and $481,512 of
proceeds from property sales in 1996 and 1995, respectively.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
For the years ended December 31, 1996 and 1995, the
Partnership recognized rental income of $2,160,177 and
$1,337,211, respectively. During the same periods, the
Partnership earned $199,620 and $515,081 in investment income
from subscription proceeds which were invested in short-term
money market accounts and construction advances. This investment
income constituted 8% and 28% of total income for the years ended
December 31, 1996 and 1995, respectively. The percentage of
total income represented by investment income declines as
subscription proceeds are invested in properties.
Musicland Group, Inc. (MGI), the lessee of the Media Play
retail store in Apple Valley, Minnesota has recently experienced
financial difficulties and has aggressively been 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. Under the
Agreement, MGI remained in possession of the property and
performed all of its obligations under the net lease agreement
through January 31, 1997 at which time it vacated the property
and made it available for re-let to another tenant. MGI was
responsible for all maintenance and management costs of the
property through January 31, 1997 after which date the
Partnership became responsible for its share of expenses
associated with the property until it is re-let or sold. A
specialist in commercial property leasing has been retained to
locate a new tenant for the property.
During the years ended December 31, 1996 and 1995, the
Partnership paid Partnership administration expenses to
affiliated parties of $221,908 and $256,299, respectively. These
administration expenses include initial start-up costs and
expenses associated with the management of the properties,
processing distributions, reporting requirements and
correspondence to the Limited Partners. The administrative
expenses decrease after completion of the offering and
acquisition phases of the Partnership's operations. During the
same periods, the Partnership incurred Partnership administration
and property management expenses from unrelated parties of
$33,597 and $35,823, respectively. These expenses represent
direct payments to third parties for legal and filing fees,
direct administrative costs, outside audit and accounting costs,
insurance and other property costs.
The Partnership distributes all of its net income during
the offering and acquisition phases, and if net income after
deductions for depreciation is not sufficient to fund the
distributions, the Partnership may distribute other available
cash that constitutes capital for accounting purposes.
As of December 31, 1996, the Partnership's cash
distribution rate was 8.0% on an annualized basis. Distributions
of Net Cash Flow to the General Partners were subordinated to the
Limited Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to Limited
Partners and 1% to the General Partners.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Since the Partnership has only recently purchased its real
estate, inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants due to inflation and real sales growth, will result
in an increase in rental income over the term of the leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
The Partnership's primary sources of cash are from
proceeds from the sale of Units, investment income, rental income
and proceeds from the sale of property. Its primary uses of cash
are investment in real properties, payment of expenses involved
in the sale of units, the organization of the Partnership, the
acquisition of properties, the management of properties, the
administration of the Partnership, and the payment of
distributions.
While the Partnership is purchasing properties, cash flow
from investing activities (investment in real property) will
remain negative and will constitute the principal use of the
Partnership's available cash flow. This use of cash flow for
investing activities was partially offset by proceeds from the
sale of property.
During 1995, the Partnership sold 59.8646% of the HomeTown
Buffet restaurant in Albuquerque, New Mexico, in four separate
transactions to unrelated third parties. The Partnership
received total net sale proceeds of $988,838 which resulted in a
total net gain of $225,180. The total cost and accumulated
depreciation of the interests sold was $792,515 and $28,857,
respectively.
During 1996, the Partnership sold 31.7210% of the
Arby's/Mrs. Winner's restaurant in Smyrna, Georgia, in two
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $461,077 which
resulted in a total net gain of $87,281. The total cost and
accumulated depreciation of the interests sold was $393,493 and
$19,697, respectively.
On January 10, 1997, the Partnership sold an additional
15.8515% interest in the Arby's/Mrs. Winner's restaurant in
Smyrna, Georgia to an unrelated third party. The Partnership
received net sale proceeds of approximately $221,000 which
resulted in a net gain of approximately $35,000.
During 1996 and 1995, the Partnership distributed net sale
proceeds of $100,570 and $486,375, respectively, to the Limited
and General Partners as part of their regular quarterly
distributions which represented a return of capital of $4.17 and
$20.24 per Limited Partnership Unit, respectively. The remaining
net sale proceeds will either be re-invested in additional
properties or distributed to the Partners in the future.
Before the acquisition of properties, cash flow from
operating activities is not significant. Net income after
adjustment for depreciation, which becomes the largest component
of cash flow from operating activities and the largest component
of cash flow after the completion of the acquisition phase, is
lower during the first few years of operations as administrative
expenses remain high and a large amount of the Partnership's
assets remain invested on a short-term basis in lower-yielding
cash equivalents.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Until the offering of Units was completed, the
Partnership's primary source of cash flow was from the sale of
Limited Partnership Units. From January 20, 1993 to June 30,
1993, the minimum number of Limited Partnership Units (1,500)
needed to form the Partnership were sold and on June 30, 1993, a
total of 1,637.473 Units ($1,637,473) were transferred into the
Partnership. On January 19, 1995, the Partnership's offering
terminated when the maximum subscription limit of 24,000 Limited
Partnership Units ($24,000,000) was reached. From subscription
proceeds, the Partnership paid organization and syndication costs
(which constitute a reduction of capital) of $3,282,051.
After completion of the acquisition phase, the
Partnership's primary use of cash flow is distribution and
redemption payments to Partners. The Partnership declares its
regular quarterly distributions before the end of each quarter
and pays the distribution in the first week after the end of each
quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year.
The 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 1996, sixteen Limited Partners redeemed a total of
216.2 Partnership Units for $194,115 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using net cash flow from operations. In 1995, five Limited
Partners redeemed a total of 131.5 Partnership Units for $118,350
in accordance with the Partnership Agreement. 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.
ITEM 7. FINANCIAL STATEMENTS.
See accompanying index to financial statements.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report
Balance Sheet as of December 31, 1996 and 1995
Statements for the Years Ended December 31, 1996 and 1995:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Partners:
AEI Net Lease Income & Growth Fund XX Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI NET
LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP (a Minnesota
limited partnership) as of December 31, 1996 and 1995 and the
related statements of income, cash flows and changes in partners'
capital for the years then ended. These financial statements are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AEI Net Lease Income & Growth Fund XX Limited Partnership as
of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Minneapolis, Minnesota
January 31, 1997 /s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
Certified Public Accountants
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
1996 1995
CURRENT ASSETS:
Cash and Cash Equivalents $ 2,177,670 $ 4,833,630
Receivables 95 13,671
----------- -----------
Total Current Assets 2,177,765 4,847,301
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 6,809,341 6,075,887
Buildings and Equipment 11,426,434 9,218,410
Construction Advances 0 880,088
Property Acquisition Costs 54,410 174,903
Accumulated Depreciation (710,971) (352,389)
----------- -----------
Net Investments in Real Estate 17,579,214 15,996,899
----------- -----------
Total Assets $19,756,979 $20,844,200
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 77,446 $ 50,011
Distributions Payable 468,755 468,725
----------- -----------
Total Current Liabilities 546,201 518,736
----------- -----------
MINORITY INTEREST 0 789,000
PARTNERS' CAPITAL (DEFICIT):
General Partners (14,833) (11,576)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized and issued;
23,652 and 23,869 Units outstanding
in 1996 and 1995, respectively 19,225,611 19,548,040
----------- -----------
Total Partners' Capital 19,210,778 19,536,464
----------- -----------
Total Liabilities and Partners' Capital $19,756,979 $20,844,200
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31
1996 1995
INCOME:
Rent $ 2,160,177 $ 1,337,211
Investment Income 199,620 515,081
----------- -----------
Total Income 2,359,797 1,852,292
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 221,908 256,299
Partnership Administration and Property
Management - Unrelated Parties 33,597 35,823
Depreciation 381,794 251,092
----------- -----------
Total Expenses 637,299 543,214
----------- -----------
OPERATING INCOME 1,722,498 1,309,078
GAIN ON SALE OF REAL ESTATE 87,281 225,180
MINORITY INTEREST IN OPERATING INCOME 0 (19,454)
----------- -----------
NET INCOME $ 1,809,779 $ 1,514,804
=========== ===========
NET INCOME ALLOCATED:
General Partners 18,098 15,148
Limited Partners 1,791,681 1,499,656
----------- -----------
$ 1,809,779 $ 1,514,804
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(23,814 and 23,784 weighted average Units
outstanding in 1996 and 1995, respectively) $ 75.24 $ 63.05
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,809,779 $ 1,514,804
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 381,794 251,092
Gain on Sale of Real Estate (87,281) (225,180)
Decrease in Receivables 13,576 62,922
Increase (Decrease) in Payable to
AEI Fund Management, Inc. 27,435 (16,486)
Minority Interest 0 (3,515)
----------- -----------
Total Adjustments 335,524 68,833
----------- -----------
Net Cash Provided By
Operating Activities 2,145,303 1,583,637
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (3,126,905) (5,028,761)
Proceeds From Sale of Real Estate 461,077 988,838
----------- -----------
Net Cash Used For
Investing Activities (2,665,828) (4,039,923)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contributions from Limited Partners 0 1,942,224
Organization and Syndication Costs 0 (225,236)
Increase in Distributions Payable 30 90,330
Distributions to Partners (1,939,389) (1,924,243)
Redemption Payments (196,076) (119,546)
------------ -----------
Net Cash Used For
Financing Activities (2,135,435) (236,471)
------------ ----------
NET DECREASE IN CASH
AND CASH EQUIVALENTS (2,655,960) (2,692,757)
CASH AND CASH EQUIVALENTS, beginning of period 4,833,630 7,526,387
------------ -----------
CASH AND CASH EQUIVALENTS, end of period $ 2,177,670 $ 4,833,630
============ ===========
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Reclassification of minority interest and
investments in real estate due to use of
the proportionate consolidation method $ 789,000 $ 0
============ ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1994 $ (6,286) $18,354,747 $18,348,461 22,057.78
Capital Contributions 0 1,942,224 1,942,224 1,942.22
Organization & Syndication Costs 0 (225,236) (225,236)
Distributions (19,242) (1,905,001) (1,924,243)
Redemption Payments (1,196) (118,350) (119,546) (131.50)
Net Income 15,148 1,499,656 1,514,804
--------- ----------- ----------- ----------
BALANCE, December 31, 1995 $ (11,576) $19,548,040 $19,536,464 23,868.50
Distributions (19,394) (1,919,995) (1,939,389)
Redemption Payments (1,961) (194,115) (196,076) (216.20)
Net Income 18,098 1,791,681 1,809,779
--------- ----------- ----------- ----------
BALANCE, December 31, 1996 $ (14,833) $19,225,611 $19,210,778 23,652.30
========= =========== =========== ==========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(1) Organization -
AEI Net Lease Income & Growth Fund XX Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XX, 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 June 30, 1993 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 19, 1995, the
Partnership's offering terminated when the maximum
subscription limit of 24,000 Limited Partnership Units
($24,000,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$24,000,000 and $1,000, respectively. During the operation
of the Partnership, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
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 99% to the Limited Partners and 1% to the General
Partners.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(1) Organization - (Continued)
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.
(2) Summary of Significant Accounting Policies -
Financial Statement Presentation
The accounts of the Partnership are maintained on the
accrual basis of accounting for both federal income tax
purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing
these financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions may affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses.
Actual results could differ from those estimates.
The Partnership regularly assesses whether market events
and conditions indicate that it is reasonably possible to
recover the carrying amounts of its investments in real
estate from future operations and sales. A change in
those market events and conditions could have a material
effect on the carrying amount of its real estate
Cash Concentrations of Credit Risk
At times throughout the year, the Partnership's cash
deposited in financial institutions may exceed FDIC
insurance limits.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(2) Summary of Significant Accounting Policies - (Continued)
Statement of Cash Flows
For purposes of reporting cash flows, cash and cash
equivalents include cash in checking, cash invested in
money market accounts, certificates of deposit, federal
agency notes and commercial paper with a term of three
months or less.
Income Taxes
The income or loss of the Partnership for federal income
tax reporting purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has
been given to income taxes in the accompanying financial
statements.
The tax return, the qualification of the Partnership as
such for tax purposes, and the amount of distributable
Partnership income or loss are subject to examination by
federal and state taxing authorities. If such an
examination results in changes with respect to the
Partnership qualification or in changes to distributable
Partnership income or loss, the taxable income of the
partners would be adjusted accordingly.
Real Estate
The Partnership's real estate is or will be leased under
long-term triple net leases classified as operating
leases. The Partnership recognizes rental revenue on the
accrual basis according to the terms of the individual
leases. For leases which contain cost of living
increases, the increases are recognized in the year in
which they are effective.
Real estate is recorded at the lower of cost or estimated
net realizable value. The Financial Accounting Standards
Board issued Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" which is effective for the
Partnership's fiscal year ended December 31, 1996. This
standard requires the Partnership to compare the carrying
amount of its properties to the estimated future cash
flows expected to result from the property and its
eventual disposition. If the sum of the expected future
cash flows is less than the carrying amount of the
property, the Statement requires the Partnership to
recognize an impairment loss by the amount by which the
carrying amount of the property exceeds the fair value of
the property. Adoption of this Statement did not have a
material effect on the Partnership's financial
statements.
The Partnership has capitalized as Investments in Real
Estate certain costs incurred in the review and
acquisition of the properties. The costs will be
allocated to the land, buildings and equipment.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(2) Summary of Significant Accounting Policies - (Continued)
The buildings and equipment of the Partnership are
depreciated using the straight-line method for financial
reporting purposes based on estimated useful lives of 30
years and 10 years, respectively.
During the fourth quarter of 1996, as a result of changes
in certain agreements, the Partnership began accounting
for properties owned as tenants-in-common with unrelated
third parties using the proportionate consolidation
method. Each tenant-in-common owns a separate, undivided
interest in the properties. Any tenant-in-common that
holds more than a 50% interest does not control decisions
over the other tenant-in-common interests. The 1996
financial statements reflect only this Partnership's
percentage share of the property's land, building and
equipment, liabilities, revenues and expenses.
In fiscal 1995, for properties owned as tenants-in-common
with unrelated third parties, other than affiliated
partnerships, the Partnership accounted for its interest
under the full consolidation method whereby the unrelated
third parties' interests in the properties were reflected
in the Partnership's financial statements as a minority
interest. For purposes of financial reporting, the
Partnership consolidated properties in which it was the
controlling tenant-in-common despite having only a
minority equity interest in the property.
In both fiscal 1996 and 1995, properties owned in
conjunction with related Partnerships were accounted for
using the proportionate consolidation method.
(3) Related Party Transactions -
On July 15, 1994, the Partnership acquired a 93.96628%
interest in the Applebee's restaurant in Middletown, Ohio.
The remaining interest in the property is owned by AEI
Institutional Net Lease Fund '93, an affiliate of the
Partnership. On December 21, 1995, the Partnership acquired
a 33.0% interest in a Media Play retail store in Apple
Valley, Minnesota. On March 28, 1996, the Partnership
acquired an 18.5% interest in a Garden Ridge retail store in
Pineville, North Carolina. The remaining interests in the
Media Play and Garden Ridge stores are owned by AEI Net
Lease Income & Growth Fund XIX Limited Partnership and AEI
Income & Growth Fund XXI Limited Partnership, affiliates of
the Partnership. On April 10, 1996, the Partnership
acquired a 90.71346% interest in a Champps Americana
restaurant in Lyndhurst, Ohio. The remaining interest in
the property was purchased by the Individual General Partner
of the Partnership, and AEI Institutional Net Lease Fund
'93, an affiliate of the Partnership.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(3) Related Party Transactions - (Continued)
AFM, AEI and AEI Incorporated (AEI Inc.) received the
following compensation and reimbursements for costs and
expenses from the Partnership:
Total Incurred by the Partnership
for the Years Ended December 31
1996 1995
a.AEI and AFM are reimbursed for all costs
incurred in connection with managing the
Partnership's operations, maintaining the
Partnership's books and communicating
the results of operations to the Limited
Partners. $ 221,908 $ 256,299
======== ========
b.AEI and AFM are reimbursed for all direct
expenses they have paid on the Partnership's
behalf to third parties. These expenses included
printing costs, legal and filing fees, direct
administrative costs, outside audit and accounting
costs, insurance and other property costs. $ 33,597 $ 35,823
======== ========
c.AEI is reimbursed for all property acquisition
costs incurred by it in acquiring properties on
behalf of the Partnership. The amounts are net
of financing and commitment fees and expense
reimbursements received by the Partnership from
the lessees in the amount of $76,275 and $152,101
for 1996 and 1995, respectively. $ 8,634 $ 84,406
======== ========
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(3) Related Party Transactions - (Continued)
Total Incurred by the Partnership
for the Years Ended December 31
1996 1995
d.AEI Inc. was the underwriter of the Partnership
offering. Robert P. Johnson is the sole stockholder
of AEI Inc., which is a member of the National
Association of Securities Dealers, Inc. AEI Inc.
received, as underwriting commissions 8% for sale
of certain subscription Units ($80 per unit sold, of
which it re-allowed up to $80 per unit to other
participating broker/dealers). AEI Inc. also received
a 2% non-accountable expense allowance for all Units
it sold through broker/dealers. These costs are treated
as a reduction of partners' capital. $ 0 $ 194,222
======== ========
e.AEI is reimbursed for all costs incurred in
connection with managing the Partnership's
offering and organization. $ 0 $ 685
======== ========
f.AEI is reimbursed for all expenses it has paid
on the Partnership's behalf relating to the
offering and organization of the Partnership.
These expenses included printing costs, legal
and filing fees, direct administrative costs,
underwriting costs and due diligence fees. $ 0 $ 30,329
======== ========
The payable to AEI Fund Management, Inc. represents the
balance due for the services described in 3a, b, c, e and f.
This balance is non-interest bearing and unsecured and is to
be paid in the normal course of business.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(4) Investments in Real Estate -
The Partnership leases its properties to various tenants
through non-cancelable triple net leases, which are
classified as operating leases. Under a triple net lease,
the lessee is responsible for all real estate taxes,
insurance, maintenance, repairs and operating expenses of
the property. The initial Lease terms are 20 years for the
Garden Ridge store and Champps, HomeTown Buffet, Arby's/Mrs.
Winner's, Denny's and Applebee's restaurants. The Red Robin
restaurants' Lease Agreements expire on November 30, 2004,
and December 31, 2007. The Leases contain renewal options
which may extend the Lease term an additional 10 years
except for the Denny's restaurants and the Applebee's and
Champps restaurants in Ohio which have renewal options that
may extend the Lease term an additional 15 years and the
Garden Ridge retail store which has renewal options that may
extend the Lease term an additional 25 years. The Leases
contain rent clauses which entitle the Partnership to
receive additional rent in future years based on stated rent
increases. Certain lessees have been granted options to
purchase the property. Depending on the lease, the purchase
price is either determined by a formula, or is the greater
of the fair market value of the property or the amount
determined by a formula. In all cases, if the option were
to be exercised by the lessee, the purchase price would be
greater than the original cost of the property.
The Partnership's properties are all commercial, single-
tenant buildings. The properties were constructed in 1993,
1994, 1995 and 1996, except the Red Robins in Colorado
Springs, Colorado which were constructed in 1984 and 1987.
The Partnership acquired all properties in 1993, 1994, 1995
and 1996. There have been no costs capitalized as
improvements subsequent to the acquisitions.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(4) Investments in Real Estate - (Continued)
The cost of the property and related accumulated
depreciation at December 31, 1996 are as follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
HomeTown Buffet,
Albuquerque, NM $ 241,960 $ 289,371 $ 531,331 $ 31,349
Red Robin,
Colorado Springs, CO 979,057 1,323,210 2,302,267 126,808
Red Robin,
Colorado Springs, CO 721,168 1,034,273 1,755,441 99,118
Arby's/Mrs. Winner's,
Smyrna, GA 352,801 494,186 846,987 44,475
Applebee's, Middletown, OH 330,557 765,405 1,095,962 73,275
Denny's, Burleson, TX 374,721 548,759 923,480 39,149
Applebee's, McAllen, TX 463,553 856,551 1,320,104 67,782
Applebee's, Lafayette, LA 416,197 760,362 1,176,559 53,212
Applebee's, Brownsville, TX 523,042 855,694 1,378,736 44,919
Denny's, Grapevine, TX 722,668 632,053 1,354,721 25,050
Media Play, Apple Valley, MN 425,360 997,341 1,422,701 35,671
Garden Ridge, Pineville, NC 540,354 1,126,738 1,667,092 28,168
Champps, Lyndhurst, OH 717,903 1,742,491 2,460,394 41,995
----------- ----------- ----------- -----------
$ 6,809,341 $11,426,434 $18,235,775 $ 710,971
=========== =========== =========== ===========
On March 28, 1996, the Partnership purchased a 18.50%
interest in a Garden Ridge store in Pineville, North
Carolina for $1,667,092. The property is leased to Garden
Ridge, L.P. under a Lease Agreement with a primary term of
20 years and annual rental payments of $174,319.
On April 10, 1996, the Partnership purchased a 90.71346%
interest in a Champps Americana restaurant in Lyndhurst,
Ohio for $2,460,394. The property is leased to Americana
Dining Corporation under a Lease Agreement with a primary
term of 20 years and annual rental payments of $258,886.
In August, 1995, the Partnership entered into an Agreement
to purchase an Italianni's restaurant in Columbus, Ohio for
approximately $1,440,000. The Agreement with Ristoranti
Karlo, Inc. included a Lease Agreement with a primary term
of 15 years and annual rental payments of approximately
$162,000. The Partnership advanced $1,215,483 for the
construction of the property and was charging interest on
the Note at the rate of 7.0%. On May 1, 1996, the
Partnership began charging interest on the Note at the rate
of 11.25%.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(4) Investments in Real Estate - (Continued)
In October, 1996, the parties agreed to terminate the
Agreement. Ristoranti Karlo, Inc. reimbursed the
Partnership for all construction advances, accrued interest
and for certain expenses.
During 1995, the Partnership sold 59.8646% of the HomeTown
Buffet restaurant in Albuquerque, New Mexico, in four
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $988,838
which resulted in a total net gain of $225,180. The total
cost and accumulated depreciation of the interests sold was
$792,515 and $28,857, respectively.
During 1996, the Partnership sold 31.7210% of the
Arby's/Mrs. Winner's restaurant in Smyrna, Georgia, in two
separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $461,077
which resulted in a total net gain of $87,281. The total
cost and accumulated depreciation of the interests sold was
$393,493 and $19,697, respectively.
On January 10, 1997, the Partnership sold an additional
15.8515% interest in the Arby's/Mrs. Winner's restaurant in
Smyrna, Georgia to an unrelated third party. The
Partnership received net sale proceeds of approximately
$221,000 which resulted in a net gain of approximately
$35,000.
On December 21, 1995, the Partnership purchased a 33.0%
interest in a Media Play retail store in Apple Valley,
Minnesota for $1,422,701. 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 is equal to
approximately two years' rent. The Partnership's share of
such payment was $264,000. Under the Agreement, MGI
remained in possession of the property and performed all of
its obligations under the net lease agreement through
January 31, 1997 at which time it vacated the property and
made it available for re-let to another tenant. MGI was
responsible for all maintenance and management costs of the
property through January 31, 1997 after which date the
Partnership became responsible for its share of expenses
associated with the property until it is re-let or sold. A
specialist in commercial property leasing has been retained
to locate a new tenant for the property.
During 1996 and 1995, the Partnership distributed net sale
proceeds of $100,570 and $486,375, respectively, to the
Limited and General Partners as part of their regular
quarterly distributions which represented a return of
capital of $4.17 and $20.24 per Limited Partnership Unit,
respectively. The remaining net sale proceeds will either
be re-invested in additional properties or distributed to
the Partners in the future.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(4) Investments in Real Estate - (Continued)
The Partnership has incurred net costs of $762,496 relating
to the review of potential property acquisitions. Of these
costs, $708,086 have been capitalized and allocated to land,
building and equipment. The remaining costs of $54,410 have
been capitalized and will be allocated to properties
acquired subsequent to December 31, 1996.
The minimum future rentals on the non-cancelable Leases for
years subsequent to December 31, 1996 are as follows:
1997 $ 1,904,348
1998 1,931,719
1999 1,969,705
2000 2,004,457
2001 2,046,176
Thereafter 26,865,620
-----------
$ 36,722,025
===========
There were no contingent rents recognized in 1996 or 1995.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(5) Major Tenants -
The following schedule presents rent revenue from individual
tenants, or affiliated groups of tenants, who each
contributed more than ten percent of the Partnership's total
rent revenue for the years ended December 31:
1996 1995
Tenants Industry
The Snyder Group Company Restaurant $ 458,587 $ 453,839
The Musicland Group, Inc. Retail 399,482 N/A
Renaissant Development
Corporation Restaurant 298,425 197,633
Huntington Restaurants
Group, Inc. Restaurant 244,255 N/A
JB's Restaurants, Inc. Restaurant N/A 162,500
Southland Restaurant
Development Company, L.L.C. Restaurant N/A 143,548
RTM Georgia, Inc. Restaurant N/A 138,000
----------- -----------
Aggregate rent revenue of major tenants $ 1,400,749 $ 1,095,520
=========== ===========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 65% 82%
=========== ===========
(6) Partners' Capital -
Cash distributions of $21,355 and $20,438 were made to the
General Partners and $1,919,995 and $1,905,001 were made to
the Limited Partners for the years ended December 31, 1996
and 1995, respectively. The Limited Partners' distributions
represent $80.62 and $80.10 per Limited Partnership Unit
outstanding using 23,814 and 23,784 weighted average Units
in 1996 and 1995, respectively. The distributions represent
$67.03 and $58.09 per Unit of Net Income and $13.59 and
$22.01 per Unit of return of contributed capital in 1996 and
1995, respectively.
As part of the Limited Partner distributions discussed
above, the Partnership distributed $99,565 and $481,512 of
proceeds from property sales in 1996 and 1995, respectively.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(6) Partners' Capital - (Continued)
Distributions of Net Cash Flow to the General Partners
during 1996 and 1995 were subordinated to the Limited
Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to
the Limited Partners and 1% to the General Partners.
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 1996, sixteen Limited Partners redeemed a total of
216.2 Partnership Units for $194,115 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using net cash flow from operations. In 1995, five Limited
Partners redeemed a total of 131.5 Partnership Units for
$118,350. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
After the effect of redemptions, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$1,014.70 per original $1,000 invested.
(7) Income Taxes -
The following is a reconciliation of net income for
financial reporting purposes to income reported for federal
income tax purposes for the years ended December 31:
1996 1995
Net Income for Financial
Reporting Purposes $ 1,809,779 $ 1,514,804
Depreciation for Tax Purposes
Under Depreciation for Financial
Reporting Purposes 53,434 16,652
Amortization of Start-Up and
Organization Costs (55,606) (30,449)
Gain on Sale of Real Estate for Tax Purposes
Under Gain for Financial Reporting Purposes (1,641) (1,724)
----------- -----------
Taxable Income to Partners $ 1,805,966 $ 1,499,283
=========== ===========
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(7) Income Taxes - (Continued)
The following is a reconciliation of Partners' capital for
financial reporting purposes to Partners' capital reported
for federal income tax purposes for the years ended December
31:
1996 1995
Partners' Capital for
Financial Reporting Purposes $19,210,778 $19,536,464
Adjusted Tax Basis of Investments
in Real Estate Under Net Investments
in Real Estate for Financial
Reporting Purposes 69,362 17,569
Capitalized Start-Up Costs
Under Section 195 303,182 303,182
Amortization of Start-Up and
Organization Costs (99,210) (43,604)
Organization and Syndication Costs
Treated as Reduction of Capital
for Financial Reporting Purposes 3,277,272 3,277,273
----------- -----------
Partners' Capital for
Tax Reporting Purposes $22,761,384 $23,090,884
=========== ===========
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(8) Fair Value of Financial Instruments -
The estimated fair values of the financial instruments, none
of which are held for trading purposes, are as follows at
December 31:
1996 1995
Carrying Fair Carrying Fair
Amount Value Amount Value
Cash $ 110 $ 110 $ 999 $ 999
Money Market Funds 2,177,560 2,177,560 1,852,270 1,852,270
Federal Agency Notes
(held to maturity) 0 0 1,985,464 1,985,464
Commercial Paper
(held to maturity) 0 0 994,897 994,897
----------- ----------- ----------- -----------
Total Cash and
Cash Equivalents $ 2,177,670 $ 2,177,670 $ 4,833,630 $ 4,833,630
=========== =========== =========== ===========
The amortized cost basis of the federal agency notes and
commercial paper, is not materially different from its
carrying amount or fair value.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The registrant is a limited partnership and has no
officers, directors, or direct employees. The General Partners
of the registrant are Robert P. Johnson and AFM. The General
Partners manage and control the Partnership's affairs and have
general responsibility and the ultimate authority in all matters
affecting the Partnership's business. The director and officers
of AFM are as follows:
Robert P. Johnson, age 52, is Chief Executive Officer,
President and Director and has held these positions since the
formation of AFM in September, 1992, and has been elected to
continue in these positions until September, 1997. From 1970 to
the present, he had been employed exclusively in the investment
industry, specializing in tax-advantaged limited partnership
investments. In that capacity, he has been involved in the
development, analysis, marketing and management of public and
private investment programs investing in net lease properties as
well as public and private investment programs investing in
energy development. Since 1971, Mr. Johnson has been the
president, a director and a registered principal of AEI
Incorporated, which is registered with the Securities and
Exchange Commission as a securities broker-dealer, is a member of
the National Association of Securities Dealers, Inc. (NASD) and
is a member of the Security Investors Protection Corporation
(SIPC). Mr. Johnson has been president, a director and the
principal shareholder of AEI Fund Management, Inc., a real estate
management company founded by him, since 1978. Mr. Johnson is
currently a general partner or principal of the general partner
in fifteen other limited partnerships.
Mark E. Larson, age 44, is Executive Vice President,
Treasurer and Chief Financial Officer and has held these
positions since the formation of AFM in September, 1992, and has
been elected to continue in these positions until September,
1997. In January, 1993, Mr. Larson was elected to serve as
Secretary of AFM and will continue to serve until September,
1996. Mr. Larson has been employed by AEI Fund Management, Inc.
and affiliated entities since 1985. From 1979 to 1985, Mr.
Larson was with Apache Corporation as manager of Program
Accounting responsible for the accounting and reports for
approximately 46 public partnerships. Mr. Larson is responsible
for supervising the accounting functions of AFM and the
registrant.
ITEM 10. EXECUTIVE COMPENSATION.
The General Partner and affiliates are reimbursed at cost
for all services performed on behalf of the registrant and for
all third party expenses paid on behalf of the registrant. The
cost for services performed on behalf of the registrant is actual
time spent performing such services plus an overhead burden.
These services include organizing the registrant and arranging
for the offer and sale of Units, reviewing properties for
acquisition and rendering administrative and management services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
AFM, the Managing General Partner of the registrant, and
Robert P. Johnson, its Individual General Partner, contributed
$1,000 in total for their interest in the registrant. See Item 1
for a discussion of their share of the registrant's profits and
losses. Neither the General Partners nor their affiliates have
purchased Limited Partnership Units.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The registrant, AFM and its affiliates have common
management and utilize the same facilities. As a result, certain
administrative expenses are allocated among these related
entities. All of such activities and any other transactions
involving the affiliates of the General Partner of the registrant
are governed by, and are conducted in conformity with, the
limitations set forth in the Limited Partnership Agreement of the
registrant.
The following table sets forth the forms of compensation,
distributions and cost reimbursements paid by the registrant to
the General Partners or their Affiliates in connection with the
operation of the Fund and its properties for the period from
inception through December 31, 1996.
Person or Entity Amount Incurred From
Receiving Form and Method Inception (September 2, 1992)
Compensation of Compensation To December 31, 1996
AEI Incorporated Selling Commissions equal to 8% $ 2,398,039
of proceeds plus a 2% nonaccountable
expense allowance, most of which was
reallowed to Participating Dealers.
General Partners
and Affiliates Reimbursement at Cost for other $ 884,013
Organization and Offering Costs.
General Partners
and Affiliates Reimbursement at Cost for all $ 762,496
Acquisition Expenses
General Partners 1% of Net Cash Flow in any fiscal $ 48,898
year until the Limited Partners have
received annual, non-cumulative
distributions of Net Cash Flow equal
to 10% of their Adjusted Capital
Contributions and 10% of any remaining
Net Cash Flow in such fiscal year.
General Partners
and Affiliates Reimbursement at Cost for all $ 852,092
Administrative Expenses attributable
to the Fund, including all expenses
related to management and disposition
of the Fund's properties and all other
transfer agency, reporting, partner
relations and other administrative
functions.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(Continued)
Person or Entity Amount Incurred From
Receiving Form and Method Inception (September 2, 1992)
Compensation of Compensation To December 31, 1996
General Partners 1% of distributions of Net Proceeds $ 5,869
of Sale until Limited Partners have
received an amount equal to (a) their
Adjusted Capital Contributions, plus
(b) an amount equal to 12% of their
Adjusted Capital Contributions per
annum, cumulative but not compounded,
to the extent not previously distributed.
10% of distributions of Net Proceeds of
Sale thereafter.
The limitations included in the Partnership Agreement
require that the cumulative reimbursements to the General
Partners and their affiliates for administrative expenses not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the sum of (i) the front-end fees allowed by the Guidelines less
the front-end fees paid, (ii) the cumulative property management
fees allowed but not paid, (iii) any real estate commission
allowed under the Guidelines, and (iv) 10% of Net Cash Flow less
the Net Cash Flow actually distributed. The reimbursements not
allowed under the guidelines include a controlling person's
salary and fringe benefits, rent and depreciation. As of
December 31, 1996, the cumulative reimbursements to the General
Partners and their affiliates did not exceed these amounts.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
A. Exhibits -
Description
3.1 Certificate of Limited
Partnership (incorporated by reference to
Exhibit 3.1 of the registrant's
Registration Statement on Form SB-2 filed
with the Commission on November 9, 1992
[File No. 3354354-C]).
3.2 Limited Partnership
Agreement (incorporated by reference to
Exhibit 3.2 of the registrant's
Registration Statement on Form SB-2 filed
with the Commission on November 9, 1992
[File No. 3354354-C]).
10.1 Form of Impoundment
Agreement with Fidelity Bank (incorporated
by reference to Exhibit 10.1 of the
registrant's Registration Statement on Form
SB-2 filed with the Commission on November
9, 1992 [File No. 3353354-C]).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(A) Exhibits - (Continued)
Description
10.2 Net Lease Agreement dated
September 30, 1993 between the Partnership
and HTB Restaurants, Inc. and JB's
Restaurants, Inc. relating to the property
at 1528 Eubank, N.E., Albuquerque, New
Mexico (incorporated by reference to
Exhibit A of Form 8-K filed with the
Commission on October 8, 1993).
10.3 Assignment of Lease dated
February 24, 1994 between the Partnership
and Bird Food, Inc., and the Lease Option
Agreement dated October 5, 1983, relating
to the property at 3680 Citadel Drive
North, Colorado Springs, Colorado
(incorporated by reference to Exhibit A of
Form 8-K filed with the Commission on March
8, 1994).
10.4 Assignment of Lease dated
February 24, 1994 between the Partnership
and Retlen Corporation, Inc., and the Lease
Agreement dated May 11, 1987, relating to
the property at 1410 Jamboree Drive,
Colorado Springs, Colorado (incorporated by
reference to Exhibit B of Form 8-K filed
with the Commission on March 8, 1994).
10.5 Net Lease Agreement dated
May 16, 1994 between the Partnership and
RTM Georgia, Inc. relating to the property
at 4950 South Cobb Drive, Smyrna, Georgia
(incorporated by reference to Exhibit 10.11
of Form 10-KSB filed with the Commission on
March 27, 1995).
10.6 Net Lease Agreement dated
July 15, 1994 between the Partnership and
Thomas and King, Inc. relating to the
property at 3240 Towne Boulevard,
Middletown, Ohio (incorporated by reference
to Exhibit 10.12 of Form 10-KSB filed with
the Commission on March 27, 1995).
10.7 Agreement to Joint
Acquisition of Property dated July 15, 1994
between the Partnership and AEI
Institutional Net Lease Fund '93 Limited
Partnership relating to the property at
3240 Towne Boulevard, Middletown, Ohio
(incorporated by reference to Exhibit 10.13
of Form 10-KSB filed with the Commission on
March 27, 1995).
10.8 Net Lease Agreement dated
November 30, 1994 between the Partnership
and Renaissant Development Corporation
relating to the property at 4601 N. 10th
Street, McAllen, Texas (incorporated by
reference to Exhibit 10.16 of Form 10-KSB
filed with the Commission on March 27,
1995).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(3) Exhibits - (Continued)
Description
10.9 Net Lease Agreement dated
December 6, 1994 between the Partnership
and Huntington Restaurants Group, Inc.
relating to the property at 868 N.E.
Alsbury Boulevard, Burleson, Texas
(incorporated by reference to Exhibit 10.17
of Form 10-KSB filed with the Commission on
March 27, 1995).
10.10 Net Lease Agreement
dated January 17, 1995 between the
Partnership and Southland Restaurant
Development Company, L.L.C. relating to the
property at 5630 Johnson Street, Lafayette,
Louisiana (incorporated by reference to
Exhibit 10.18 of Form 10-KSB filed with the
Commission on March 27, 1995).
10.11 Purchase and Leaseback
Commitment dated March 21, 1995 between AEI
Fund Management, Inc., Renaissant
Development Corporation, and Anthony and
Estella Alvarez relating to the property at
2960 Boca Chica Boulevard, Brownsville,
Texas (incorporated by reference to Exhibit
10.14 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.12 Purchase and Leaseback
Commitment dated May 1, 1995 between the
Partnership and Huntington Restaurants
Group, Inc. relating to the property at
1505 William D. Tate Boulevard, Grapevine,
Texas (incorporated by reference to Exhibit
10.15 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.13 Construction Loan
Commitment dated May 1, 1995 between the
Partnership and Huntington Restaurants
Group, Inc. relating to the property at
1505 William D. Tate Boulevard, Grapevine,
Texas (incorporated by reference to Exhibit
10.16 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.14 Promissory Note dated
May 5, 1995 between the Partnership and
Huntington Restaurants Group, Inc. relating
to the property at 1505 William D. Tate
Boulevard, Grapevine, Texas (incorporated
by reference to Exhibit 10.17 of Form
10-KSB filed with the Commission on March
21, 1996).
10.15 Purchase Agreement
dated August 4, 1995 between the
Partnership and Bruce R. Logan relating to
the property at 1528 Eubank, N.E.,
Albuquerque, New Mexico (incorporated by
reference to Exhibit 10.18 of Form 10-KSB
filed with the Commission on March 21,
1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(3) Exhibits - (Continued)
Description
10.16 Amendment to Sale and
Leaseback Financing Commitment dated August
11, 1995 between the Partnership, AEI Fund
Management, Inc. and Renaissant Development
Corporation relating to the property at
2960 Boca Chica Boulevard, Brownsville,
Texas (incorporated by reference to Exhibit
10.19 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.17 Contruction Loan
Commitment dated August 11, 1995 between
AEI Fund Management, Inc. and Ristoranti
Karlo, Inc. relating to the property at
4522 Kenny Road, Columbus, Ohio
(incorporated by reference to Exhibit 10.20
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.18 Sale and Leaseback
Financing Commitment dated August 11, 1995
between AEI Fund Management, Inc. and
Ristoranti Karlo, Inc. relating to the
property at 4522 Kenny Road, Columbus, Ohio
(incorporated by reference to Exhibit 10.21
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.19 Property Co-Tenancy
Ownership Agreement dated August 21, 1995
between the Partnership and Bruce R. Logan
relating to the property at 1528 Eubank,
N.E., Albuquerque, New Mexico (incorporated
by reference to Exhibit 10.22 of Form
10-KSB filed with the Commission on March
21, 1996).
10.20 Net Lease Agreement
dated August 30, 1995 between the
Partnership and Renaissant Development
Corporation relating to the property at
2960 Boca Chica Boulevard, Brownsville,
Texas (incorporated by reference to Exhibit
10.23 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.21 Sale and Leaseback
Financing Commitment dated September 5,
1995 between AEI Fund Management, Inc. and
Americana Dining Corporation relating to
the property at 5835 Landerbrook Drive,
Lyndhurst, Ohio (incorporated by reference
to Exhibit 10.24 of Form 10-KSB filed with
the Commission on March 21, 1996).
10.22 Purchase Agreement
dated September 22, 1995 between the
Partnership and Highgrove Consulting
Agency, Inc. relating to the property at
1528 Eubank, N.E., Albuquerque, New Mexico
(incorporated by reference to Exhibit 10.25
of Form 10-KSB filed with the Commission on
March 21, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(3) Exhibits - (Continued)
Description
10.23 Amendment to Sale and
Leaseback Financing Commitment dated
October 17, 1995 between the Partnership,
AEI Fund Management, Inc. and Ristoranti
Karlo, Inc. relating to the property at
4522 Kenny Road, Columbus, Ohio
(incorporated by reference to Exhibit 10.26
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.24 Amendment to
Construction Loan Commitment dated October
17, 1995 between the Partnership, AEI Fund
Management, Inc. and Ristoranti Karlo, Inc.
relating to the property at 4522 Kenny
Road, Columbus, Ohio (incorporated by
reference to Exhibit 10.27 of Form 10-KSB
filed with the Commission on March 21,
1996).
10.25 Property Co-Tenancy
Ownership Agreement dated October 18, 1995
between the Partnership and Highgrove
Consulting Agency, Inc. relating to the
property at 1528 Eubank, N.E., Albuquerque,
New Mexico (incorporated by reference to
Exhibit 10.28 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.26 Purchase Agreement
dated October 20, 1995 between the
Partnership and The Mark A. Benson Living
Trust relating to the property at 1528
Eubank, N.E., Albuquerque, New Mexico
(incorporated by reference to Exhibit 10.29
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.27 Property Co-Tenancy
Ownership Agreement dated October 20, 1995
between the Partnership and The Mark A.
Benson Living Trust relating to the
property at 1528 Eubank, N.E., Albuquerque,
New Mexico (incorporated by reference to
Exhibit 10.30 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.28 Net Lease Agreement
dated November 21, 1995 between the
Partnership and Huntington Restaurants
Group, Inc. relating to the property at
1505 William D. Tate Boulevard, Grapevine,
Texas (incorporated by reference to Exhibit
10.31 of Form 10-KSB filed with the
Commission on March 21, 1996).
10.29 Amendment to Sale and
Leaseback Financing Commitment dated
November 30, 1995 between the Partnership,
AEI Fund Management, Inc. and Americana
Dining Corporation relating to the property
at 5835 Landerbrook Drive, Lyndhurst, Ohio
(incorporated by reference to Exhibit 10.32
of Form 10-KSB filed with the Commission on
March 21, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(3) Exhibits - (Continued)
Description
10.30 Purchase Agreement
dated December 2, 1995 between the
Partnership and The Joan Koller Trust
relating to the property at 1528 Eubank,
N.E., Albuquerque, New Mexico (incorporated
by reference to Exhibit 10.33 of Form
10-KSB filed with the Commission on March
21, 1996).
10.31 Property Co-Tenancy
Ownership Agreement dated December 6, 1995
between the Partnership and The Joan Koller
Trust relating to the property at 1528
Eubank, N.E., Albuquerque, New Mexico
(incorporated by reference to Exhibit 10.34
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.32 Purchase Agreement
dated November 16, 1995 between the
Partnership, AEI Net Lease Income & Growth
Fund XIX Limited Partnership, AEI Income &
Growth Fund XXI Limited Partnership and The
Musicland Group, Inc. relating to the
property at 7370 153rd Street West, Apple
Valley, Minnesota (incorporated by
reference to Exhibit 10.35 of Form 10-KSB
filed with the Commission on March 21,
1996).
10.33 Lease Agreement dated
December 21, 1995 between the Partnership,
AEI Net Lease Income & Growth Fund XIX
Limited Partnership, AEI Income & Growth
Fund XXI Limited Partnership, and The
Musicland Group, Inc. relating to the
property at 7370 153rd Street West, Apple
Valley, Minnesota (incorporated by
reference to Exhibit 10.36 of Form 10-KSB
filed with the Commission on March 21,
1996).
10.34 Promissory Note and
Open-End Mortgage Agreement dated December
29, 1995 between the Partnership and
Ristoranti Karlo, Inc. relating to the
property at 4522 Kenny Road, Columbus, Ohio
(incorporated by reference to Exhibit 10.37
of Form 10-KSB filed with the Commission on
March 21, 1996).
10.35 Purchase Agreement
dated January 10, 1996 between the
Partnership, AEI Net Lease Income & Growth
Fund XIX Limited Partnership, AEI Income &
Growth Fund XXI and TKC X, LLC relating to
the property at 11415 Carolina Place
Parkway, Pineville, North Carolina
(incorporated by reference to Exhibit 10.38
of Form 10-KSB filed with the Commission on
March 21, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(3) Exhibits - (Continued)
Description
10.36 Net Lease Agreement
dated August 2, 1995, between TKC X, LLC
and Garden Ridge, Inc. relating to the
property at 11415 Carolina Place Parkway,
Pineville, North Carolina (incorporated by
reference to Exhibit 10.1 of Form 8-K filed
with the Commission on April 10, 1996).
10.37 Purchase and Sale
Agreement dated January 10, 1996 between
the Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, AEI
Income & Growth Fund XXI Limited
Partnership, and TKC X, LLC relating to the
Garden Ridge store in Pineville, North
Carolina (incorporated by reference to
Exhibit 10.2 of Form 8-K filed with the
Commission on April 10, 1996).
10.38 First Amendment to
Lease Agreement dated March 1, 1996 between
TKC X, LLC and Garden Ridge, L.P. relating
to the property at 11415 Carolina Place
Parkway, Pineville, North Carolina
(incorporated by reference to Exhibit 10.3
of Form 8-K filed with the Commission on
April 10, 1996).
10.39 Assignment and
Assumption of Lease dated March 28, 1996
between the Partnership, AEI Net Lease
Income & Growth Fund XIX Limited
Partnership, AEI Income & Growth Fund XXI
Limited Partnership, and TKC X, LLC
relating to the property at 11415 Carolina
Place Parkway, Pineville, North Carolina
(incorporated by reference to Exhibit 10.4
of Form 8-K filed with the Commission on
April 10, 1996).
10.40 Net Lease Agreement
dated April 10, 1996 between the
Partnership, Robert P. Johnson, AEI
Institutional Net Lease Fund '93 Limited
Partnership and Americana Dining
Corporation relating to the property at
5835 Landerbrook Drive, Lyndhurst, Ohio
(incorporated by reference to Exhibit 10.3
of Form 8-K filed with the Commission on
April 17, 1996).
10.41 Purchase Agreement
dated September 10, 1996 between the
Partnership and the Margaret E. Brust
Irrevocable Trust relating to the property
at 4950 South Cobb Drive, Smyrna, Georgia
(incorporated by reference to Exhibit 10.1
of Form 10-QSB filed with the Commission on
November 13, 1996).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
(Continued)
(3) Exhibits - (Continued)
Description
10.42 Property Co-Tenancy
Ownership Agreement dated September 27,
1996 between the Partnership and the
Margaret E. Brust Irrevocable Trust
relating to the property at 4950 South Cobb
Drive, Smyrna, Georgia (incorporated by
reference to Exhibit 10.2 of Form 10-QSB
filed with the Commission on November 13,
1996).
10.43 Surrender and
Termination of Lease Agreement dated
November 22, 1996 between the Partnership,
AEI Net Lease Income & Growth Fund XIX
Limited Partnership, AEI Income & Growth
Fund XXI Limited Partnership and The
Musicland Group, Inc. relating to the
property at 7370 W. 153rd Street, Apple
Valley, Minnesota.
10.44 Purchase Agreement
dated October 21, 1996 between the
Partnership and the John J. Zeller Living
Trust relating to the property at 4950
South Cobb Drive, Smyrna, Georgia.
10.45 Property Co-Tenancy
Ownership Agreement dated December 6, 1996
between the Partnership and the John J.
Zeller Living Trust relating to the
property at 4950 South Cobb Drive, Smyrna,
Georgia.
10.46 Purchase Agreement
dated December 27, 1996 between the
Partnership and the Mark A. Benson Living
Trust relating to the property at 4950
South Cobb Drive, Smyrna, Georgia.
10.47 Property Co-Tenancy
Ownership Agreement dated January 10, 1997
between the partnership and the Mark A.
Benson Living Trust relating to the
property at 4950 South Cobb Drive, Smyrna,
Georgia.
27 Financial Data Schedule for
period ended December 31, 1996.
B. Reports on Form 8-K - None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AEI NET LEASE INCOME & GROWTH FUND XX
Limited Partnership
By: AEI Fund Management XX, Inc.
Its Managing General Partner
March 21, 1997 By: /s/ Robert P Johnson
Robert P. Johnson,President and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
/s/ Robert P Johnson President (Principal Executive Officer) March 21, 1997
Robert P. Johnson and Sole Director of Managing General
Partner
/s/ Mark E Larson Executive Vice President, Treasurer March 21, 1997
Mark E. Larson and Chief Financial Officer
(Principal Accounting Officer)
SURRENDER AND TERMINATION OF LEASE AGREEMENT (#8228)
THIS AGREEMENT made this 22nd day of November, 1996, by and
between AEI NET LEASE INCOME AND GROWTH FUND XIX LIMITED
PARTNERSHIP, a Minnesota limited partnership, AEI NET LEASE
INCOME AND & GROWTH FUND XX LIMITED PARTNERSHIP, a Minnesota
limited partnership, and AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP, a Minnesota limited partnership, each
having its principal place of business at 1300 Minnesota
World Trade Center, 30 East 7th Street, St. Paul, MN 55101
(hereinafter collectively called "Landlord") and the
Musicland Group, Inc., a Delaware corporation and Media
Play, Inc., a Delaware corporation, each having an office
10400 Yellow Circle Drive, Minnetonka, Minnesota 55343
(hereinafter collectively called "Tenant").
WITNESSETH:
WHEREAS, Landlord and The Musicland Group, Inc. entered
into that certain written Lease Agreement dated December 21,
1995 (hereinafter referred to as the "Lease") demising
certain premises containing approximately 48,944 square feet
located in the City of Apple Valley and State of Minnesota
(hereinafter referred to as the "Premises") and more
particularly described in said Lease; and
WHEREAS, The Musicland Group, Inc. assigned its
interest in the Lease to Media Play, Inc. pursuant to that
certain Assignment and Assumption of Lease Agreement dated
December 21, 1995; and
WHEREAS, Landlord and Tenant hereby mutually desire and
intend to terminate, cancel, and surrender said Lease and
any and all Agreements with respect to the Premises,
conditioned upon the faithful observation of the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the above premises
which by this reference are incorporated herein, the mutual
covenants and conditions contained herein and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Landlord and Tenant hereby agree as
follows:
1. (a) The Lease shall be terminated on January 31,
1997 (the "Termination Date"). Tenant shall cease doing
business in the Premises and vacate the Premises on or
before the Termination Date and as of the Termination Date,
Tenant shall surrender the possession of the Premises to
Landlord and relinquish any claim of a right of possession
of said Premises as if the Termination Date were originally
set forth in the Lease as the termination of the term
therein and the parties hereto agree that the Lease shall be
terminated and canceled as of the Termination Date. Tenant,
as of the Termination Date, relinquishes and waives any
right of redemption, statutory or otherwise, including but
not limited to such rights of redemption as set forth in MSA
Sec. 504.02. All rental obligations pursuant to the Lease
(including but not limited to accrued but unpaid year end
adjustments to additional rent charges) shall cease as of
the Termination Date. Within five (5) business days after
Tenant receives a fully-executed copy of this Agreement, to
make the foregoing binding upon the Landlord, Tenant shall
deliver to Landlord's offices (by messenger, overnight mail
or wire transfer) good funds in the amount of Eight Hundred
Thousand and No/100 Dollars ($800,000.00) as a Termination
Fee which shall thereafter release Tenant from all
liabilities arising under the Lease, subject to Tenant's
obligations hereunder.
(b) Tenant shall make all payments of rent and
other charges due under the Lease for the months of December
1996 and January 1997 on December 1, 1996 and January 1,
1997 respectively.
(c) Tenant represents and warrants to Landlord
that all real estate taxes due and owing for the calendar
year 1996 have been paid in full. Together with the January
1, 1997 rent payment, Tenant shall pay an amount equal to
$16,130.00 as a good faith estimate of its prorate share of
real estate taxes for 1997. There shall be no adjustments
in the event that the actual real estate taxes for 1997 are
different than currently anticipated.
2. Tenant agrees to vacate the Premises no later than
the Termination Date. Tenant shall leave the Premises in
broom clean condition and in the same condition as the
Premises were accepted in at commencement of the Lease,
subject to ordinary wear and tear. Landlord may conduct an
inspection of the Premises on January 31, 1997 and may, by
written notice to Tenant delivered no later than 5:00 P.M.
on February 7, 1997, reserve any claim that Landlord may
have for Tenant's violation of the foregoing sentence.
Failure of Landlord to deliver said reservation of claim in
writing to Tenant by said date shall be deemed conclusive
evidence that no such claims have been reserved. Subject to
the foregoing, on the Termination Date. Landlord shall
accept delivery and surrender of the Premises in "as-is"
condition and agrees that Tenant's obligations under said
Lease are thereafter terminated.
3. Subject to Paragraph 11 below, said Lease is
hereby terminated and canceled as of the Termination Date
and Landlord and Tenant shall be mutually released from any
and all further and past liability and obligations
thereunder. Further, Landlord and Tenant covenant that all
obligations of the part of the other party, including but
not limited to past and/or future rent, all other sums due
or accrued under the Lease have been satisfied as of the
date of this Agreement neither party has any further
liability to the other party as a result of said Lease
Agreement except pursuant to the terms of this Surrender and
Termination Agreement.
4. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their respective
successors and assigns.
5. Subject to Paragraph 11 below, Landlord and Tenant
do hereby mutually release and discharge each of the other
and its employees, officers and directors (both past and
present), agents, heirs, successors, assigns, and personal
representatives from all claims, demands, and causes of
action of every kind, nature and character whatsoever,
whether known or unknown, suspected or unsuspected, which
each of them may have now or hereafter have, or claim to
have against the other, by reason of any act, thing or
matter up to the date of this Agreement.
6. The parties hereby warrant and represent to each
other that there are no other parties who have any interest
in the Lease, the rent nor any other charges payable
thereunder, nor any interest in the Premises or the building
in which the Demised Premises are located, including any
interest therein as mortgagee, which interest could
otherwise nullify the purpose and intent of this Agreement,
and all such parties with any such interest are either
parties to the Surrender and Termination Agreement, or their
consent to the Surrender and Termination Agreement is not
required under any instrument.
7. Other than the Memorandum of Lease dated March 18,
1996 and filed April 18, 1996, Tenant hereby warrants and
represents to Landlord that Tenant has not done or suffered
anything to be done nor will tenant in the future do
anything whereby the Premises or the title thereto have been
or will be encumbered in any way whatsoever, nor has Tenant
caused, permitted, or suffered any such lien or encumbrance
to accrue.
8. The parties have read this Agreement and the
mutual release contained therein, and upon the advice of
counsel, they have freely and voluntarily entered into the
Agreement. If either party commences an action against the
other party arising out of or in connection with this
Agreement, the prevailing party shall be entitled to recover
from the losing party all reasonable attorney's fees and
costs of suit.
9. This Agreement sets forth all terms, conditions,
and understandings between the parties, and there are no
terms, conditions or understandings, either oral or written,
between said parities other than as set forth herein. No
alteration, amendment, change or addition to this Agreement
shall be binding unless reduced to writing and signed by
each of the parties hereto.
10. In the event this document has not been executed
by both Landlord and Tenant (such that each party is in
receipt of at least one (1) original fully-executed
counterpart) on or before November 22, 1996, this Agreement
shall be null and void.
11. Notwithstanding anything to the contrary contained
in this Agreement Landlord expressly reserves any rights it
may have in connection with:
(i) obligations of Tenant under this Agreement,
including but not limited to the obligation to make payments
of rent due on December 1, 1996 and rent and 1/12th of the
estimated real estate taxes for 1997 on January 1, 1997 and
obligations to deliver the Premises in accordance with the
provisions of Paragraph 2 above;
(ii) obligations of Tenant regarding hazardous
materials in the Lease;
(iii) obligations of Tenant in connection with its
representations and warranties contained in Paragraphs 1(c)
and 7 hereof;
(iv) obligations of Tenant under the Lease to keep the
Premises free and clear of all liens and encumbrances;
(v) obligations of Tenant under the Lease to indemnify
and hold Landlord harmless from any and all loss, damage,
costs, or expenses arising out of claims of third parties
alleging damage to persons or property for acts occurring on
or prior to the Termination Date;
(vi) obligation of Tenant to maintain the insurance
required in the Lease through the Termination Date and
rights of Landlord to the application of insurance proceeds
and condemnation proceeds under the Lease. In this regard,
Tenant agrees that any insurance proceeds payable in the
event of damage or destruction to the Leased Premises and
Improvements owned by Landlord on or prior to the
Termination Date (even if such proceeds shall be paid after
the Termination Date) shall belong solely to Landlord, and
Tenant agrees to cooperate with Landlord to obtain such
proceeds from Tenant's insurers in the event of a claim
therefore; and
(vii) any third party warranties and the
enforcement thereof by or through Tenant respecting roof,
HVAC, electrical, and structure of the Improvements on the
Leased Premises constructed on behalf of Tenant. In this
regard, Tenant agrees to provide an assignment of any such
warranties known to Tenant, and to cooperate with Landlord
in the assertion of any claim under such warranties (all at
no cost and expense to Tenant).
(viii)obligations of Tenant under the Lease to comply
or be in compliance, at or prior to the Termination Date,
with applicable laws, rules, or regulations of governmental
authorities, which failure to so comply results in loss,
damage, cost or expense to Landlord, provided that Tenant
had actual knowledge of any such failure to comply prior to
the termination date [changed to conform to the facts /s/
GAR], and further provided that any claims of Landlord under
this subsection (viii) must be made prior to March 31, 1997.
12. Within five (5) business days after Tenant
receives a fully-executed copy of this Agreement, Tenant
shall executed and deliver to Landlord's attorney, Michael
B. Daugherty, at 1300 Minnesota World Trade Center, 30 East
Seventh Street, Saint Paul, Minnesota 55101, a Quit Claim
Deed in recordable form, which shall be held in escrow until
the Termination Date.
IN WITNESS WHEREOF, the parties have signed, sealed and
delivered the instrument on the date first written above.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
By: AEI FUND MANAGEMENT XIX, INC.
By: /s/ Robert P Johnson
Robert P. Johnson, President
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
By: AEI FUND MANAGEMENT XX, INC.
By: /s/ Robert P Johnson
Robert P. Johnson, President
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
By: AEI FUND MANAGEMENT XXI, INC.
By: /s/ Robert P Johnson
Robert P. Johnson, President
MEDIA PLAY, INC.
("Tenant")
By: /s/ Gary A. Ross
Gary A. Ross
President, Superstores Division
THE MUSICLAND GROUP, INC.
(Tenant")
By: /s/ Reid Johnson
Reid Johnson
Executive Vice President
And CFO
PURCHASE AGREEMENT
Arby's/Mrs. Winners Restaurant - Smyrna, GA
This AGREEMENT, entered into effective as of the 21 of October,
1996 .
l. Parties. Seller is AEI Net Lease Income & Growth Fund XX
Limited Partnership which owns an undivided 87.6812% interest in
the fee title to that certain real property legally described in
the attached Exhibit "A" (the "Entire Property") Buyer is John
J. Zeller Living Trust, John J. Zeller, Trustee ("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 19.4022 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 Property is $315,000 all cash.
4. Terms. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (the "First Payment"). The First Payment will be
credited against the purchase price when and if escrow
closes and the sale is completed, or otherwise dispersed
pursuant to the terms of this Agreement.
(b) Buyer will deposit the balance of the purchase price,
$310,000 (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 November 21,
1996.
6 . Due Diligence. Buyer will have until the expiration of the
fifth business day after delivery of each of following items, to
be supplied by Seller, to conduct all of its inspections and due
diligence and satisfy itself regarding each item, the Property,
and this transaction. Buyer agrees to indemnify and hold Seller
harmless for any loss or damage to the Leased Premises or persons
caused by Buyer or its agents arising out of such physical
inspections of the Entire Property. (The "Review Period")
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) Copies of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) Copies of an "as built" survey of the Property done
concurrent with Seller's acquisition of the Property.
(d) Lease of the Entire Property showing occupancy date,
lease expiration date, rent, and Guarantys, if any,
accompanied by such tenant financial statements as may have
been provided most recently to Seller by the Tenant and/or
Guarantors.
It is a contingency upon Seller's obligations hereunder that
two (2) copies of Co-Tenancy Agreement in the form attached
hereto duly executed by Buyer and Seller and dated on escrow
closing date be delivered to the Seller on the Closing date.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
any review period or inspection period. Such notice shall be
deemed effective only upon receipt by Seller.
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under sections 15(a) of this agreement (which will
survive), Buyer (after execution of such documents reasonably
requested by Seller to evidence the termination hereof) shall be
returned its First Payment, and Buyer will have absolutely no
rights, claims or interest of any type in connection with the
Property or this transaction, regardless of any alleged conduct
by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to have canceled this Agreement and
relinquish all rights in and to the Property unless Buyer makes
the Second Payment when required. If this Agreement is not
canceled and the Second Payment is made when required, all of
Buyer's conditions and contingencies will be deemed satisfied.
7. Escrow. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this Agreement by both parties.. The
escrow holder will be a nationally-recognized escrow company
selected by Seller. A copy of this Agreement will be delivered to
the escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. Title. Closing will be conditioned on the agreement of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the
contingency period.
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this Agreement according to its terms.
9. Closing Costs. Seller will pay one-half of escrow fees,
the cost of the title commitment and any brokerage commissions
payable except those brokerage commissions incurred by Buyer.
The Buyer will pay the cost of issuing a Standard Owners Title
Insurance Policy in the full amount of the purchase price. Buyer
will pay all recording fees, one-half of the escrow fees, and the
cost of an update to the Survey in Sellers possession (if an
update 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
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
assessments due and payable in all years prior to the year
of Closing have been paid in full. Unpaid levied and
pending special assessments existing on the date of Closing
shall be the responsibility of Buyer and Seller in
proportion to their respective Tenant in Common interests.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate shall
of all operating expenses of the 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 Net Lease
Income & Growth Fund XX Limited Partnership and RTM Georgia,
Inc.("lessee"), dated May 16, 1994, Seller is not aware of
any leases of the Property. The above referenced lease
agreement has an option to purchase in favor of the Tenant
as set forth in article 34 of said lease agreement.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts prior to the Closing Date that would materially
affect the Property and be binding on Buyer after the
closing date without Buyer's prior consent, which will not
be unreasonably withheld. However, Buyer acknowledges that
Seller retains the right both prior to and after the Closing
Date to freely transfer all or a portion of Seller's
remaining undivided interest in the Entire Property provided
such sale shall not encumber the Property being purchased by
Buyer in violation of the terms hereof or the contemplated
Co-Tenancy Agreement.
12. Disclosures.
(a) To the best of Seller's knowledge: there are now, and
at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and all such items are in
good operating condition and repair and in compliance with
all applicable governmental , zoning and land use laws,
ordinances, regulations and requirements.
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the use and operation
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
of the Property after the Closing in the manner in which the
Property has been used and operated prior to the date of
this Agreement.
(d) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and groundwater conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property.
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Property arising out of Seller's negligence or intentional
misconduct in violation of applicable state or federal law
or regulation.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein.
(f) Buyer acknowledges that, having been given the
opportunity to inspect the Property and such financial
information on the Lessee and Guarantors of the Lease as
Buyer or its advisors shall request, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided except as
set forth herein. Buyer further acknowledges that the
information provided and to be provided by Seller with
respect to the Property and to the Lessee and Guarantors of
Lease was obtained from a variety of sources and Seller
neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information. The sale of the Property as provided for
herein is made on an "AS IS" basis, and Buyer expressly
acknowledges that, in consideration of the agreements of
Seller herein, except as otherwise specified herein, Seller
makes no warranty or representation, express or implied, or
arising by operation of law, including, but not limited to,
any warranty or condition, habitability, tenantability,
suitability for commercial purposes, merchantability, or
fitness for a particular purpose, in respect of the
Property. This provision shall survive closing.
13. Closing.
(a) Before the closing date, Seller will deposit into
escrow an executed limited warranty deed conveying insurable
title of the Property to Buyer, subject to the encumbrances
contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign the Co-
Tenancy Agreement, 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.
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
14. Defaults. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. Seller shall retain all remedies available to Seller at
law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the Second Payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$10,000.00, this Agreement shall become null and void, at
Buyer's option exercised, if at all, by written notice to
Seller within ten (10) days after Buyer has received written
notice from Seller of said destruction or damage. Seller,
however, shall have the right to adjust or settle any
insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any 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.
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. Buyer's 1031 Tax Free Exchange.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to who will act as
Facilitator to perfect the 1031 exchange by preparing an
agreement of exchange of Real Property whereby 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 , Seller will
deed the Property to Buyer.
18. Cancellation
If any party elects to cancel this Contract because of any
breach by another party, the party electing to cancel shall
deliver to escrow agent a notice containing the address of
the party in breach and stating that this Contract shall be
canceled unless the breach is cured within 13 days following
the delivery of the notice to the escrow agent. Within
three days after receipt of such notice, the escrow agent
shall send it by United States Mail to the party in breach
at the address contained in the Notice and no further notice
shall be required. If the breach is not cured within the 13
days following the delivery of the notice to the escrow
agent, this Contract shall be canceled.
19. Miscellaneous.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
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 November 21, 1996
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Net Lease Income & Growth Fund XX Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
John J. Zeller, Trustee
522 U.S. Highway 89
Vaughn, Montana 59487
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
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: John J. Zeller Living Trust
By: /s/ John J Zeller
John J. Zeller, Trustee
SELLER: AEI NET LEASE INCOME & GROWTH FUND XX LIMITED
PARTNERSHIP, a Minnesota limited partnership.
By: AEI Fund Management XX, Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
Buyer Initial: /s/ JJZ
Purchase Agreement for Arby's/Mrs. Winners - Smyrna, GA
EXHIBIT A
ALL THAT TRACT or parcel of land lying and being in Land
Lots 688, 689,752 and 753 of the 17th District, 2nd
Section of Cobb County, Georgia, containing 1.071 acres,
same being more particularly described as follows:
TO FIND THE TRUE POINT OF BEGINNING, begin at the
point of intersection of the westerly Right-of-Way
Line of South Cobb Drive (Two-hundred (200') foot
Right-of-Way) and of the southerly Right-of-Way Line
of Kenwood Road (Fifty (50') foot Right-of Way); thence
traveling along the westerly Right-of-Way Line of said
South Cobb Drive south 11 degrees 59 minutes 32 seconds
east a distance of 36.03 feet to a point on said Right-of-
Way Line; thence continuing along said Right-of-Wayline
south 09 degrees 19 minutes 41 seconds east a distance of
166.01 feet to a point on said Right-of-Way Line; thence
continuing along said Right-of-Way Line along a curve to
the left an arc distance of 18.12 feet (said arc being of
18.12 feet and having a radius of 2,964.79 feet) to an iron
pin set on said Right-of-Way Line and at the southeast
corner of property now or formerly owned by Wendy's
International, Inc., which iron pin set is the TRUE POINT
OF BEGINNING; FROM THE TRUE POINT OF BEGINNING as thus
established continuing along said Right-of Way Line along
a curve to the left an arc distance of 161.96 feet
(said arc being subtended by a chord bearing south 12
degrees 56 minutes 36 seconds east a chord distance of
161.94 feet and having a radius of 2,964.79 feet) to an
iron pin set on said Right-of Way Line and the northeast
corner of the property now or formerly owned by Checkers
Restaurant; thence leaving said Right-of Way Line and
traveling along the northwesterly line of said Checkers
property south 71 degrees 15 minutes 52 seconds west a
distance 221.74 feet to an iron pin set; thence
traveling north 18 degrees 44 minutes 08 seconds west a
distance of 132.30 feet to an iron pin set; thence traveling
north 07 degrees 31 minutes 35 seconds east a distance of
131.18 feet to an iron pin set at the southwest corner of
said Wendy's property; thence traveling along the southeasterly
line of said Wendy's property south 82 degrees 28 minutes 25
seconds east a distance of 200.76 feet to an iron pin set, and
the TRUE POINT OF BEGINNING.
ALL AS SHOWN on that certain survey for RTM Georgia, Inc.,
prepared by Federer-Ruppert & Associates, bearing the
seal of James W. Woolley, Georgia Registered Land Surveyor
Number 1478, dated January 17, 1994, last revised May 10,1994.
TOGETHER WITH all rights with respect to the above property
reserved in Limited Warranty Deed from Wilson Financial
Corporation, a Florida Corporation to Wendy's International,
Inc. an Ohio Corporation, dated December 26, 1989, filed for
record December 28, 1989 at 2:01 p.m., recorded in Deed Book
5590, Page 288, Records of Cobb County, Georgia.
TOGETHER WITH all rights with respect to the above property
reserved in that certain Limited Warranty Deed from American
Founders Life Insurance Company, a Texas corporation to
Robert G. Brown, dated June 8,1992, filed for record June
9,1992 at 10:21 a.m., recorded in Deed Book 6682, Page 118,
aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth in Easement Grant by and between Wilson Financial
Corporation, a Florida corporation and Wendy's
International, Inc., an Ohio corporation, dated December 26,
1989, filed for record December 28, 1989 at 2:01 p.m.,
recorded in Deed Book 5590, Page 291, aforesaid Records; as
amended by that certain Amendment to Easement Grant, dated
June 30, 1993, filed for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 421, aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth I Easement Agreement by and between American
Founders Life Insurance Company, a Texas corporation and
Robert G. Brown, dated June 8,1992, filed for record June 9,
1992 at 10:21 a.m., recorded in Deed Book 6682, Page 123,
aforesaid Records; as amended by that certain Amendment to
Easement Agreement, dated June 30, 1993, filed for July 1,
1993 at 2:15 p.m., recorded in Deed Book 7448, Page 433,
aforesaid Records.
TOGETHER WITH all rights granted in that certain Sign
Easement by and between American Founders Life Insurance
Company, a Texas corporation and RTM Georgia, Inc.,
dated June 30, 1993, file for record July 1, 1993 at 2:15
p.m., recorded in Deed Book 7448, Page 467, aforesaid
Records.
TOGETHER WITH all rights granted in that certain New
Driveway Easement Grant by and between American Founders
Life Insurance Company and RTM Georgia, Inc., dated
June 30, 1993, filed for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 450, aforesaid Records.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Arby's/Mrs. Winners Restaurant - Smyrna, GA)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 6th day of Dec, 1996, by and
between John J. Zeller Living Trust, (hereinafter called
"Zeller"), and AEI Net Lease Income & Growth Fund XX Limited
Partnership (hereinafter called "Fund XX") (Zeller, Fund XX (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 XX presently owns an undivided 68.2790% interest in
and to, and Zeller presently owns an undivided 19.4022% interest
in and to, and Margaret E. Brust Irrevocable Trust presently owns
an undivided 12.3188% interest (also referred to herein as Co-
Tenant) in and to, the land, situated in the City of Smyrna,
County of Cobb, and State of Georgia, (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 Zeller's interest by
Fund XX; 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 Zeller 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 XX, or its designated agent, successors or
assigns. Provided, however, if Fund XX shall sell all of its
interest in the Premises, the duties and obligations of Fund XX
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 XX 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 XX as their sole and
exclusive agent to deal with any property agent and to execute
leases of space within the Premises, including but not limited to
any amendments, consents to assignment, sublet, releases or
modifications to leases or guarantees of lease or easements
affecting the Premises, on behalf of all present or future Co-
Tenants. Only Fund XX may obligate any Co-Tenant with respect to
any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XX agrees to
require any lessee of the Premises to name Zeller as an insured
or additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XX 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 XX shall distribute any insurance
proceeds it
Co-Tenant Initial: /s/ JJZ
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
may receive, to the extent consistent with any lease on the
Premises, to the Co-Tenants in proportion to their respective
ownership of the Premises.
2. Income, expenses and any net proceeds from a sale of the
Premises shall be allocated among the Co-Tenants in proportion to
their respective share(s) of ownership. Shares of net income
shall be pro-rated for any partial calendar years included within
the term of this Agreement. Fund XX may offset against, pay to
itself and deduct from any payment due to Zeller under this
Agreement, and may pay to itself the amount of Zeller's share of
any legitimate expenses of the Premises which are not paid by
Zeller to Fund XX or its assigns, within ten (10) days after
demand by Fund XX. In the event there is insufficient operating
income from which to deduct Zeller's unpaid share of operating
expenses, Fund XX may pursue any and all legal remedies for
collection.
Operating Expenses shall include all normal operating expense,
including but not limited to: maintenance, utilities, supplies,
labor, management, advertising and promotional expenses, salaries
and wages of rental and management personnel, leasing commissions
to third parties, a monthly accrual to pay insurance premiums,
real estate taxes, installments of special assessments and for
structural repairs and replacements, management fees, legal fees
and accounting fees, but excluding all operating expenses paid by
Lessee under terms of any triple net lease agreement initiated
concurrently with, or subsequent to, this agreement.
Zeller has elected to retain, and agrees to annually reimburse,
Fund XX in the amount of $930 for the expenses, direct and
indirect, incurred by Fund XX in providing quarterly accounting
and distributions of Zeller's share of net income and for
tracking, reporting and assessing the calculation of Zeller's
share of operating expenses incurred from the Premises. This
invoice amount shall be pro-rated for partial years and Zeller
authorizes Fund XX to deduct such amount from Zeller's share of
revenue from the Premises. Zeller may terminate this agreement at
any time and collect it's share of rental stream directly from
the tenant.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XX'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 XX 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, Zeller shall be entitled
to receive 19.4022% of all items of income and expense generated
by the Premises, and Fund XX shall be entitled to receive
68.2790% as its share. Upon receipt of said accounting, if the
payments received by each Co-Tenant pursuant to this Paragraph 3
do not equal, in the aggregate, the amounts which each are
entitled to receive with respect to said calendar year pursuant
to Paragraph 2 hereof, an appropriate adjustment shall be made so
that each Co-Tenant receives the amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements, for which adequate reserves do not
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor from Fund XX, shall, within
fifteen (15) business days after receipt of notice, make payment
to Fund XX 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-
Co-Tenant Initial: /s/ JJZ
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
Tenants reserve the right to escrow proceeds from a sale of their
interests in the Premises to obtain tax deferral by the purchase
of replacement property.
6. If any Co-Tenant (including Co-Tenant Margaret E. Brust
Irrevocable Trust which owns an undivided 12.3188% interest in
the property, Subject to a co-tenancy agreement with Fund XX
dated September 27, 1996), 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 Agreement shall continue in full force and effect and
shall bind and inure to the benefit of the Co-Tenant and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns until the
expiration date plus extensions of the net lease agreement or
upon the sale of the entire Premises in accordance with the terms
hereof and proper disbursement of the proceeds thereof, whichever
shall first occur. Unless specifically identified as a personal
contract right or obligation herein, this agreement shall run
with any interest in the Premises and with the title thereto.
Once any person, party or entity has ceased to have an interest
in fee in the Premises, it shall not be bound by, subject to or
benefit from the terms hereof; but its heirs, executors,
administrators, personal representatives, successors or assigns,
as the case may be, shall be substituted for it hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be deemed
given or served in accordance with the provisions of this
Agreement, if said notice or elections addressed as follows;
If to Fund XX:
AEI Net Lease Income & Growth Fund XX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Brust:
Margaret E. Brust, Trustee
772 N. Craven St.
Monmouth, OR 97361
If to Zeller:
John J. Zeller, Trustee
522 U.S. Highway 89
Vaughn, Montana 59487
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.
Co-Tenant Initial: /s/ JJZ
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
10. This Agreement shall not create any partnership or joint
venture among or between the Co-Tenants or any of them, and the
only relationship among and between the Co-Tenants hereunder
shall be that of owners of the premises as tenants in common
subject to the terms hereof.
11. The unenforceability or invalidity of any provision or
provisions of this Agreement as to any person or circumstances
shall not render that provision, nor any other provision hereof,
unenforceable or invalid as to any other person or circumstances,
and all provisions hereof, in all other respects, shall remain
valid and enforceable.
12. In the event any litigation arises between the parties
hereto relating to this Agreement, or any of the provisions
hereof, the party prevailing in such action shall be entitled to
receive from the losing party, in addition to all other relief,
remedies and damages to which it is otherwise entitled, all
reasonable costs and expenses, including reasonable attorneys'
fees, incurred by the prevailing party in connection with said
litigation.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Zeller John J. Zeller Living Trust
By: /s/ John J Zeller
John J. Zeller, Trustee
STATE OF Montana)
) ss [notary seal]
COUNTY OF Cascade)
The foregoing instrument was acknowledged before me, a
Notary Public in and for the County and State aforesaid,
this 18th day of November,1996, by Timothy J. Wylder,
Notary Public. /s/ for Montana /s/ Timothy J. Wyler
Fund XX AEI Net Lease Income & Growth Fund XX Limited Partnership
By: AEI Fund Management XX, Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
Witness By: /s/ Laura M Steidl
Witness By: /s/ Dawn E. Campbell
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 9th day of December,
1996, Robert P. Johnson, President of AEI Fund Management XX,
Inc., corporate general partner of AEI Real Estate Fund XX
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/ Linda A. Bisdorf
Notary Public
[notary seal]
Co-Tenant Initial: /s/ JJZ
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
EXHIBIT A
ALL THAT TRACT or parcel of land lying and being in Land
Lots 688, 689,752 and 753 of the 17th District, 2nd Section
of Cobb County, Georgia, containing 1.071 acres, same being
more particularly described as follows:
TO FIND THE TRUE POINT OF BEGINNING, begin at the point of
intersection of the westerly Right-of-Way Line of South Cobb
Drive (Two-hundred (200') foot Right-of-Way) and of the
southerly Right-of-Way Line of Kenwood Road (Fifty (50')
foot Right-of Way); thence traveling along the westerly
Right-of-Way Line of said South Cobb Drive south 11 degrees
59 minutes 32 seconds east a distance of 36.03 feet to a
point on said Right-of-Way Line; thence continuing along
said Right-of-Way line south 09 degrees 19 minutes 41
seconds east a distance of 166.01 feet to a point on said
Right-of-Way Line; thence continuing along said Right-of-Way
Line along a curve to the left an arc distance of 18.12 feet
(said arc being of 18.12 feet and having a radius of
2,964.79 feet) to an iron pin set on said Right-of-Way Line
and at the southeast corner of property now or formerly
owned by Wendy's International, Inc., which iron pin set is
the TRUE POINT OF BEGINNING; FROM THE TRUE POINT OF
BEGINNING as thus established continuing along said Right-of
Way Line along a curve to the left an arc distance of 161.96
feet (said arc being subtended by a chord bearing south 12
degrees 56 minutes 36 seconds east a chord distance of
161.94 feet and having a radius of 2,964.79 feet) to an iron
pin set on said Right-of Way Line and the northeast corner
of the property now or formerly owned by Checkers
Restaurant; thence leaving said Right-of Way Line and
traveling along the northwesterly line of said Checkers
property south 71 degrees 15 minutes 52 seconds west a
distance 221.74 feet to an iron pin set; thence traveling
north 18 degrees 44 minutes 08 seconds west a distance of
132.30 feet to an iron pin set; thence traveling north 07
degrees 31 minutes 35 seconds east a distance of 131.18 feet
to an iron pin set at the southwest corner of said Wendy's
property; thence traveling along the southeasterly line of
said Wendy's property south 82 degrees 28 minutes 25 seconds
east a distance of 200.76 feet to an iron pin set, and the
TRUE POINT OF BEGINNING.
ALL AS SHOWN on that certain survey for RTM Georgia, Inc.,
prepared by Federer-Ruppert & Associates, bearing the seal
of James W. Woolley, Georgia Registered Land Surveyor Number
1478, dated January 17, 1994, last revised May 10,1994.
TOGETHER WITH all rights with respect to the above property
reserved in Limited Warranty Deed from Wilson Financial
Corporation, a Florida Corporation to Wendy's International,
Inc. an Ohio Corporation, dated December 26, 1989, filed for
record December 28, 1989 at 2:01 p.m., recorded in Deed Book
5590, Page 288, Records of Cobb County, Georgia.
TOGETHER WITH all rights with respect to the above property
reserved in that certain Limited Warranty Deed from American
Founders Life Insurance Company, a Texas corporation to
Robert G. Brown, dated June 8,1992, filed for record June
9,1992 at 10:21 a.m., recorded in Deed Book 6682, Page 118,
aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth in Easement Grant by and between Wilson Financial
Corporation, a Florida corporation and Wendy's
International, Inc., an Ohio corporation, dated December 26,
1989, filed for record December 28, 1989 at 2:01 p.m.,
recorded in Deed Book 5590, Page 291, aforesaid Records; as
amended by that certain Amendment to Easement Grant, dated
June 30, 1993, filed for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 421, aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth I Easement Agreement by and between American
Founders Life Insurance Company, a Texas corporation and
Robert G. Brown, dated June 8,1992, filed for record June 9,
1992 at 10:21 a.m., recorded in Deed Book 6682, Page 123,
aforesaid Records; as amended by that certain Amendment to
Easement Agreement, dated June 30, 1993, filed for July 1,
1993 at 2:15 p.m., recorded in Deed Book 7448, Page 433,
aforesaid Records.
TOGETHER WITH all rights granted in that certain Sign
Easement by and between American Founders Life Insurance
Company, a Texas corporation and RTM Georgia, Inc., dated
June 30, 1993, file for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 467, aforesaid Records.
TOGETHER WITH all rights granted in that certain New
Driveway Easement Grant by and between American Founders
Life Insurance Company and RTM Georgia, Inc., dated June 30,
1993, filed for record July 1, 1993 at 2:15 p.m., recorded
in Deed Book 7448, Page 450, aforesaid Records.
PURCHASE AGREEMENT
Arby's/Mrs. Winners Restaurant - Smyrna, GA
This AGREEMENT, entered into effective as of the 27 of Dec, 1996.
l. Parties. Seller is AEI Net Lease Income & Growth Fund XX
Limited Partnership which owns an undivided 68.2790% interest in
the fee title to that certain real property legally described in
the attached Exhibit "A" (the "Entire Property") Buyer is Mark
A. Benson, Trustee of the Mark A. Benson Living Trust dated
12/21/93 (added to conform to the facts), ("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 15.8515 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 Property is $243,750.00 all cash.
4. Terms. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (the "First Payment"). The First Payment will be
credited against the purchase price when and if escrow
closes and the sale is completed, or otherwise disbursed
pursuant to the terms of this Agreement.
(b) Buyer will deposit the balance of the purchase price,
$238,750 (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 January 10,
1997.
6 . Due Diligence. Buyer will have until the expiration of the
fifth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Leased Premises or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) Copies of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) Copies of an "as built" survey of the Property done
concurrent with Seller's acquisition of the Property.
(d) Lease of the Entire Property showing occupancy date,
lease expiration date, rent, and Guarantys, if any,
accompanied by such tenant financial statements as may have
been provided most recently to Seller by the Tenant and/or
Guarantors.
It is a contingency upon Seller's obligations hereunder that
two (2) originals of Co-Tenancy Agreement in the form attached
hereto duly executed by Buyer and Seller and dated on escrow
closing date be delivered to the Seller on the Closing date.
Buyer Initial:
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
any review period or inspection period. Such notice shall be
deemed effective only upon receipt by Seller.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under sections 15(a) of this Agreement (which will
survive), Buyer (after execution of such documents reasonably
requested by Seller to evidence the termination hereof) shall be
returned its First Payment, and Buyer will have absolutely no
rights, claims or interest of any type in connection with the
Property or this transaction, regardless of any alleged conduct
by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to have canceled this Agreement and
relinquish all rights in and to the Property unless Buyer makes
the Second Payment when required. If this Agreement is not
canceled and the Second Payment is made when required, all of
Buyer's conditions and contingencies will be deemed satisfied.
7. Escrow. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this Agreement by both parties. The
escrow holder will be a nationally-recognized escrow company
selected by Seller. A copy of this Agreement will be delivered to
the escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. Title. Closing will be conditioned on the agreement of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the
contingency period.
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this Agreement according to its terms.
9. Closing Costs. Seller will pay one-half of escrow fees,
the cost of the title commitment and any brokerage commissions
payable except those brokerage commissions incurred by Buyer.
The Buyer will pay the cost of
Buyer Initial: /s/ MB
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
issuing a Standard Owners Title Insurance Policy in the full
amount of the purchase price. Buyer will pay all recording fees,
one-half of the escrow fees, and the cost of an update to the
Survey in Sellers possession (if an update 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 levied and pending special
assessments existing on the date of Closing shall be the
responsibility of Buyer and Seller in proportion to their
respective Tenant in Common interests. Seller and Buyer
shall likewise pay all taxes due and payable in the year
after Closing and any unpaid installments of special
assessments payable therewith and thereafter, if such unpaid
levied and pending special assessments and real estate taxes
are not paid by any tenant of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate shall
of all operating expenses of the 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 Net Lease
Income & Growth Fund XX Limited Partnership and RTM Georgia,
Inc.("Tenant"), dated May 16, 1994, Seller is not aware of
any leases of the Property. The above referenced lease
agreement has an option to purchase in favor of the Tenant
as set forth in article 34 of said lease agreement.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts prior to the Closing Date that would materially
affect the Property and be binding on Buyer after the
closing date without Buyer's prior consent, which will not
be unreasonably withheld. However, Buyer acknowledges that
Seller retains the right both prior to and after the Closing
Date to freely transfer all or a portion of Seller's
remaining undivided interest in the Entire Property provided
such sale shall not encumber the Property being purchased by
Buyer in violation of the terms hereof or the contemplated
Co-Tenancy Agreement.
12. Disclosures.
(a) To the best of Seller's knowledge: there are now, and
at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and all such items are in
Buyer Initial: /s/ MB
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
good operating condition and repair and in compliance with
all applicable governmental , zoning and land use laws,
ordinances, regulations and requirements.
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the use and operation of the Property after the
Closing in the manner in which the Property has been used
and operated prior to the date of this Agreement.
(d) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and groundwater conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property.
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Property arising out of Seller's negligence or intentional
misconduct in violation of applicable state or federal law
or regulation.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
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 Tenant and Guarantors of the Lease as
Buyer or its advisors shall request, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided except as
set forth herein. Buyer further acknowledges that the
information provided and to be provided by Seller with
respect to the Property and to the Tenant and Guarantors of
Lease was obtained from a variety of sources and Seller
neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information. The sale of the Property as provided for
herein is made on an "AS IS" basis, and Buyer expressly
acknowledges that, in consideration of the agreements of
Seller herein, except as otherwise specified herein, Seller
makes no warranty or representation, express or implied, or
arising by operation of law, including, but not limited to,
any warranty or condition, habitability, tenantability,
suitability for commercial purposes, merchantability, or
fitness for a particular purpose, in respect of the
Property.
The provisions (d) - (f) above shall survive closing.
13. Closing.
(a) Before the closing date, Seller will deposit into
escrow an executed limited warranty deed conveying insurable
title of the Property to Buyer, subject to the encumbrances
contained in paragraph 8 above.
Buyer Initial: /s/ MB
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
(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 the Co-
Tenancy Agreement, and deliver to the escrow holder any
other documents reasonably required by the escrow holder to
close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. Defaults. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. Seller shall retain all remedies available to Seller at
law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the Second Payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to
Buyer Initial: /s/MB
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
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).
17. Buyer's 1031 Tax Free Exchange.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer intends that this transaction qualify as an exchange
under Section 1031 of the Internal Revenue Code of 1986 and
regulations thereunder. Buyer intends to perfect the 1031
exchange by way of a simultaneous exchange of properties through
concurrently conditional closing escrows conducted under escrow
instructions that will qualify the transaction under Section
1031.
18. Cancellation
If any party elects to cancel this Contract because of any
breach by another party, the party electing to cancel shall
deliver to escrow agent a notice containing the address of
the party in breach and stating that this Contract shall be
canceled unless the breach is cured within 13 days following
the delivery of the notice to the escrow agent. Within
three days after receipt of such notice, the escrow agent
shall send it by United States Mail to the party in breach
at the address contained in the Notice and no further notice
shall be required. If the
Buyer Initial: /s/ MB
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
breach is not cured within the 13 days following the
delivery of the notice to the escrow agent, this Contract
shall be canceled.
19. Miscellaneous.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by December 31, 1996
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Net Lease Income & Growth Fund XX Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
Mark A. Benson, Trustee
745 Bowhill Rd.
Hillsborough, CA 94010
Buyer Initial: /s/ MB
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
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: Mark A. Benson Living Trust
By:/s/ Mark A. Benson, Trustee
Mark A. Benson, Trustee
SELLER: AEI NET LEASE INCOME & GROWTH FUND XX LIMITED
PARTNERSHIP, a Minnesota limited partnership.
By: AEI Fund Management XX, Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
Buyer Initial:
Purcase Agreement for Arby's/Mrs. Winners - Smyrna, GA
EXHIBIT A
ALL THAT TRACT or parcel of land lying and being in Land
Lots 688, 689,752 and 753 of the 17th District, 2nd Section
of Cobb County, Georgia, containing 1.071 acres, same being
more particularly described as follows:
TO FIND THE TRUE POINT OF BEGINNING, begin at the point of
intersection of the westerly Right-of-Way Line of South Cobb
Drive (Two-hundred (200') foot Right-of-Way) and of the
southerly Right-of-Way Line of Kenwood Road (Fifty (50')
foot Right-of Way); thence traveling along the westerly
Right-of-Way Line of said South Cobb Drive south 11 degrees
59 minutes 32 seconds east a distance of 36.03 feet to a
point on said Right-of-Way Line; thence continuing along
said Right-of-Way line south 09 degrees 19 minutes 41
seconds east a distance of 166.01 feet to a point on said
Right-of-Way Line; thence continuing along said Right-of-Way
Line along a curve to the left an arc distance of 18.12 feet
(said arc being of 18.12 feet and having a radius of
2,964.79 feet) to an iron pin set on said Right-of-Way Line
and at the southeast corner of property now or formerly
owned by Wendy's International, Inc., which iron pin set is
the TRUE POINT OF BEGINNING; FROM THE TRUE POINT OF
BEGINNING as thus established continuing along said Right-of
Way Line along a curve to the left an arc distance of 161.96
feet (said arc being subtended by a chord bearing south 12
degrees 56 minutes 36 seconds east a chord distance of
161.94 feet and having a radius of 2,964.79 feet) to an iron
pin set on said Right-of Way Line and the northeast corner
of the property now or formerly owned by Checkers
Restaurant; thence leaving said Right-of Way Line and
traveling along the northwesterly line of said Checkers
property south 71 degrees 15 minutes 52 seconds west a
distance 221.74 feet to an iron pin set; thence traveling
north 18 degrees 44 minutes 08 seconds west a distance of
132.30 feet to an iron pin set; thence traveling north 07
degrees 31 minutes 35 seconds east a distance of 131.18 feet
to an iron pin set at the southwest corner of said Wendy's
property; thence traveling along the southeasterly line of
said Wendy's property south 82 degrees 28 minutes 25 seconds
east a distance of 200.76 feet to an iron pin set, and the
TRUE POINT OF BEGINNING.
ALL AS SHOWN on that certain survey for RTM Georgia, Inc.,
prepared by Federer-Ruppert & Associates, bearing the seal
of James W. Woolley, Georgia Registered Land Surveyor Number
1478, dated January 17, 1994, last revised May 10,1994.
TOGETHER WITH all rights with respect to the above property
reserved in Limited Warranty Deed from Wilson Financial
Corporation, a Florida Corporation to Wendy's International,
Inc. an Ohio Corporation, dated December 26, 1989, filed for
record December 28, 1989 at 2:01 p.m., recorded in Deed Book
5590, Page 288, Records of Cobb County, Georgia.
TOGETHER WITH all rights with respect to the above property
reserved in that certain Limited Warranty Deed from American
Founders Life Insurance Company, a Texas corporation to
Robert G. Brown, dated June 8,1992, filed for record June
9,1992 at 10:21 a.m., recorded in Deed Book 6682, Page 118,
aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth in Easement Grant by and between Wilson Financial
Corporation, a Florida corporation and Wendy's
International, Inc., an Ohio corporation, dated December 26,
1989, filed for record December 28, 1989 at 2:01 p.m.,
recorded in Deed Book 5590, Page 291, aforesaid Records; as
amended by that certain Amendment to Easement Grant, dated
June 30, 1993, filed for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 421, aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth I Easement Agreement by and between American
Founders Life Insurance Company, a Texas corporation and
Robert G. Brown, dated June 8,1992, filed for record June 9,
1992 at 10:21 a.m., recorded in Deed Book 6682, Page 123,
aforesaid Records; as amended by that certain Amendment to
Easement Agreement, dated June 30, 1993, filed for July 1,
1993 at 2:15 p.m., recorded in Deed Book 7448, Page 433,
aforesaid Records.
TOGETHER WITH all rights granted in that certain Sign
Easement by and between American Founders Life Insurance
Company, a Texas corporation and RTM Georgia, Inc., dated
June 30, 1993, file for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 467, aforesaid Records.
TOGETHER WITH all rights granted in that certain New
Driveway Easement Grant by and between American Founders
Life Insurance Company and RTM Georgia, Inc., dated June 30,
1993, filed for record July 1, 1993 at 2:15 p.m., recorded
in Deed Book 7448, Page 450, aforesaid Records.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Arby's/Mrs. Winners Restaurant - Smyrna, GA)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 10th day of Jan, 1997, by and
between Mark A. Benson, Trustee of the Mark A. Benson Living
Trust dated 12/21/93 (added to conform to the facts),,
(hereinafter called "Benson"), and AEI Net Lease Income & Growth
Fund XX Limited Partnership (hereinafter called "Fund XX")
(Benson, Fund XX (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 XX presently owns an undivided 52.4275% interest in
and to, and Benson presently owns an undivided 15.8515% interest
in and to and the John J. Zeller Living Trust presently owns an
undivided 19.4022% interest in and to, and Margaret E. Brust
Irrevocable Trust presently owns an undivided 12.3188% interest
(also referred to herein as Co-Tenant) in and to, the land,
situated in the City of Smyrna, County of Cobb, and State of
Georgia, (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 Benson's interest by
Fund XX; 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 Benson 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 XX, or its designated agent, successors or
assigns. Provided, however, if Fund XX shall sell all of its
interest in the Premises, the duties and obligations of Fund XX
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 XX 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 XX as their sole and
exclusive agent to deal with any property agent and to execute
leases of space within the Premises, including but not limited to
any amendments, consents to assignment, sublet, releases or
modifications to leases or guarantees of lease or easements
affecting the Premises, on behalf of all present or future Co-
Tenants. Only Fund XX may obligate any Co-Tenant with respect to
any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XX agrees to
require any Tenant of the Premises to name Benson as an insured
or additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XX shall use its
best efforts to obtain endorsements adding Co-Tenants to said
policies from Tenant within 30 days of commencement of this
agreement. In any event, Fund XX shall distribute any insurance
proceeds it
Co-Tenant Initial:
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
may receive, to the extent consistent with any lease on the
Premises, to the Co-Tenants in proportion to their respective
ownership of the Premises.
2. Income, expenses and any net proceeds from a sale of the
Premises shall be allocated among the Co-Tenants in proportion to
their respective share(s) of ownership. Shares of net income
shall be pro-rated for any partial calendar years included within
the term of this Agreement. Fund XX may offset against, pay to
itself and deduct from any payment due to Benson under this
Agreement, and may pay to itself the amount of Benson's share of
any legitimate expenses of the Premises which are not paid by
Benson to Fund XX or its assigns, within ten (10) days after
demand by Fund XX. In the event there is insufficient operating
income from which to deduct Benson's unpaid share of operating
expenses, Fund XX 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.
Benson has elected to retain, and agrees to annually reimburse,
Fund XX in the amount of $547 for the expenses, direct and
indirect, incurred by Fund XX in providing quarterly accounting
and distributions of Benson's share of net income and for
tracking, reporting and assessing the calculation of Benson's
share of operating expenses incurred from the Premises. This
invoice amount shall be pro-rated for partial years and Benson
authorizes Fund XX to deduct such amount from Benson's share of
revenue from the Premises. Benson may terminate this agreement
respecting quarterly accounting and distributions in this
paragraph at any time and seek to collect its share of rental
stream directly from the tenant.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XX'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 XX 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, Benson shall be entitled
to receive 15.8515% 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 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 XX, shall, within
fifteen (15) business days after receipt of notice, make payment
to Fund XX 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-
Co-Tenant Initial:
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
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, or
set forth herein.
7. This Agreement shall continue in full force and effect and
shall bind and inure to the benefit of the Co-Tenant and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns until the
expiration date plus extensions of the net lease agreement or
upon the sale of the entire Premises in accordance with the terms
hereof and proper disbursement of the proceeds thereof, whichever
shall first occur. Unless specifically identified as a personal
contract right or obligation herein, this agreement shall run
with any interest in the Premises and with the title thereto.
Once any person, party or entity has ceased to have an interest
in fee in the Premises, it shall not be bound by, subject to or
benefit from the terms hereof; but its heirs, executors,
administrators, personal representatives, successors or assigns,
as the case may be, shall be substituted for it hereunder.
Benson agrees to notify Fund XX upon the appointment of any
successor trustee, or any amendment of the Mark A. Benson Living
Trust affecting the powers of the Trustee to manage or dispose of
the Benson'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 deemed
given or served in accordance with the provisions of this
Agreement, if said notice or elections addressed as follows;
If to Fund XX:
AEI Net Lease Income & Growth Fund XX Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Brust:
Margaret E. Brust, Trustee
772 N. Craven St.
Monmouth, OR 97361
If to Zeller:
John J. Zeller, Trustee
If to Benson:
Mark A. Benson, Trustee
745 Bowhill Rd.
Hillsborough, CA 94010
Co-Tenant Initial: /s/ MB
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
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.
Benson Mark A. Benson Living Trust
By: /s/ Mark A Benson Trustee
Mark A. Benson, Trustee
Witness By: /s/ Ryan A. Smith
Witness By:
STATE OF California)
) ss
COUNTY OF San Mateo)
The foregoing instrument was acknowledged before me, a
Notary Public in and for the County and State aforesaid,
this 24th day of December,1996, by M. Wellsman, Notary
Public.
[notary seal]
Co-Tenant Initial:/s/MB
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
Fund XX AEI Net Lease Income & Growth Fund XX Limited Partnership
By: AEI Fund Management XX, Inc., its corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
Witness By: /s/ Laura M Steidl
Witness By: /s/ Joan M Picquet
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 10th day of Jan,
1997, Robert P. Johnson, President of AEI Fund Management XX,
Inc., corporate general partner of AEI Real Estate Fund XX
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/ Liand A Bisdorf
Notary Public
[notary seal]
Co-Tenant Initial:
Co-Tenancy Agreement for Arby's/Mrs. Winners - Smyrna, GA
EXHIBIT A
ALL THAT TRACT or parcel of land lying and being in Land
Lots 688, 689,752 and 753 of the 17th District, 2nd Section
of Cobb County, Georgia, containing 1.071 acres, same being
more particularly described as follows:
TO FIND THE TRUE POINT OF BEGINNING, begin at the point of
intersection of the westerly Right-of-Way Line of South Cobb
Drive (Two-hundred (200') foot Right-of-Way) and of the
southerly Right-of-Way Line of Kenwood Road (Fifty (50')
foot Right-of Way); thence traveling along the westerly
Right-of-Way Line of said South Cobb Drive south 11 degrees
59 minutes 32 seconds east a distance of 36.03 feet to a
point on said Right-of-Way Line; thence continuing along
said Right-of-Way line south 09 degrees 19 minutes 41
seconds east a distance of 166.01 feet to a point on said
Right-of-Way Line; thence continuing along said Right-of-Way
Line along a curve to the left an arc distance of 18.12 feet
(said arc being of 18.12 feet and having a radius of
2,964.79 feet) to an iron pin set on said Right-of-Way Line
and at the southeast corner of property now or formerly
owned by Wendy's International, Inc., which iron pin set is
the TRUE POINT OF BEGINNING; FROM THE TRUE POINT OF
BEGINNING as thus established continuing along said Right-of
Way Line along a curve to the left an arc distance of 161.96
feet (said arc being subtended by a chord bearing south 12
degrees 56 minutes 36 seconds east a chord distance of
161.94 feet and having a radius of 2,964.79 feet) to an iron
pin set on said Right-of Way Line and the northeast corner
of the property now or formerly owned by Checkers
Restaurant; thence leaving said Right-of Way Line and
traveling along the northwesterly line of said Checkers
property south 71 degrees 15 minutes 52 seconds west a
distance 221.74 feet to an iron pin set; thence traveling
north 18 degrees 44 minutes 08 seconds west a distance of
132.30 feet to an iron pin set; thence traveling north 07
degrees 31 minutes 35 seconds east a distance of 131.18 feet
to an iron pin set at the southwest corner of said Wendy's
property; thence traveling along the southeasterly line of
said Wendy's property south 82 degrees 28 minutes 25 seconds
east a distance of 200.76 feet to an iron pin set, and the
TRUE POINT OF BEGINNING.
ALL AS SHOWN on that certain survey for RTM Georgia, Inc.,
prepared by Federer-Ruppert & Associates, bearing the seal
of James W. Woolley, Georgia Registered Land Surveyor Number
1478, dated January 17, 1994, last revised May 10,1994.
TOGETHER WITH all rights with respect to the above property
reserved in Limited Warranty Deed from Wilson Financial
Corporation, a Florida Corporation to Wendy's International,
Inc. an Ohio Corporation, dated December 26, 1989, filed for
record December 28, 1989 at 2:01 p.m., recorded in Deed Book
5590, Page 288, Records of Cobb County, Georgia.
TOGETHER WITH all rights with respect to the above property
reserved in that certain Limited Warranty Deed from American
Founders Life Insurance Company, a Texas corporation to
Robert G. Brown, dated June 8,1992, filed for record June
9,1992 at 10:21 a.m., recorded in Deed Book 6682, Page 118,
aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth in Easement Grant by and between Wilson Financial
Corporation, a Florida corporation and Wendy's
International, Inc., an Ohio corporation, dated December 26,
1989, filed for record December 28, 1989 at 2:01 p.m.,
recorded in Deed Book 5590, Page 291, aforesaid Records; as
amended by that certain Amendment to Easement Grant, dated
June 30, 1993, filed for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 421, aforesaid Records.
TOGETHER WITH all rights with respect to the above property
set forth I Easement Agreement by and between American
Founders Life Insurance Company, a Texas corporation and
Robert G. Brown, dated June 8,1992, filed for record June 9,
1992 at 10:21 a.m., recorded in Deed Book 6682, Page 123,
aforesaid Records; as amended by that certain Amendment to
Easement Agreement, dated June 30, 1993, filed for July 1,
1993 at 2:15 p.m., recorded in Deed Book 7448, Page 433,
aforesaid Records.
TOGETHER WITH all rights granted in that certain Sign
Easement by and between American Founders Life Insurance
Company, a Texas corporation and RTM Georgia, Inc., dated
June 30, 1993, file for record July 1, 1993 at 2:15 p.m.,
recorded in Deed Book 7448, Page 467, aforesaid Records.
TOGETHER WITH all rights granted in that certain New
Driveway Easement Grant by and between American Founders
Life Insurance Company and RTM Georgia, Inc., dated June 30,
1993, filed for record July 1, 1993 at 2:15 p.m., recorded
in Deed Book 7448, Page 450, aforesaid Records.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000894245
<NAME> AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,177,670
<SECURITIES> 0
<RECEIVABLES> 95
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,177,765
<PP&E> 18,290,185
<DEPRECIATION> (710,971)
<TOTAL-ASSETS> 19,756,979
<CURRENT-LIABILITIES> 546,201
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,210,778
<TOTAL-LIABILITY-AND-EQUITY> 19,756,979
<SALES> 0
<TOTAL-REVENUES> 2,359,797
<CGS> 0
<TOTAL-COSTS> 637,299
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,809,779
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,809,779
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,809,779
<EPS-PRIMARY> 75.24
<EPS-DILUTED> 75.24
</TABLE>
