SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: September 30, 1999
Commission file number: 0-29274
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1789725
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of September 30, 1999 and December 31, 1998
Statements for the Periods ended September 30, 1999 and 1998:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
BALANCE SHEET
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 908,516 $ 557,646
Receivables 0 16,052
----------- -----------
Total Current Assets 908,516 573,698
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 6,719,763 6,921,884
Buildings and Equipment 11,528,125 11,350,021
Construction in Progress 0 289,014
Property Acquisition Costs 0 10,782
Accumulated Depreciation (1,149,973) (816,805)
----------- -----------
Net Investments in Real Estate 17,097,915 17,754,896
----------- -----------
Total Assets $18,006,431 $18,328,594
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 33,301 $ 54,136
Distributions Payable 390,971 451,171
----------- -----------
Total Current Liabilities 424,272 505,307
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (33,364) (30,953)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized and issued;
23,829 Units outstanding 17,615,523 17,854,240
----------- -----------
Total Partners' Capital 17,582,159 17,823,287
----------- -----------
Total Liabilities and Partners' Capital $18,006,431 $18,328,594
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Three Months Ended Nine Months Ended
9/30/99 9/30/98 9/30/99 9/30/98
INCOME:
Rent $ 465,581 $ 452,922 $1,420,395 $1,247,467
Investment Income 7,444 14,374 14,045 140,616
--------- --------- ---------- ----------
Total Income 473,025 467,296 1,434,440 1,388,083
--------- --------- ---------- ----------
EXPENSES:
Partnership Administration -
Affiliates 57,109 58,163 175,086 187,294
Partnership Administration
and Property Management -
Unrelated Parties 22,472 30,853 66,748 94,495
Depreciation 127,276 123,898 384,696 324,522
--------- --------- ---------- ----------
Total Expenses 206,857 212,914 626,530 606,311
--------- --------- ---------- ----------
OPERATING INCOME 266,168 254,382 807,910 781,772
GAIN ON SALE OF REAL ESTATE 163,463 65,440 163,463 235,377
--------- --------- ---------- ----------
NET INCOME $ 429,631 $ 319,822 $ 971,373 $1,017,149
========= ========= ========== ==========
NET INCOME ALLOCATED:
General Partners $ 4,296 $ 3,198 $ 9,714 $ 10,171
Limited Partners 425,335 316,624 961,659 1,006,978
--------- --------- ---------- ----------
$ 429,631 $ 319,822 $ 971,373 $1,017,149
========= ========= ========== ==========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(23,829 weighted average
Units outstanding in 1999
and 1998) $ 17.85 $ 13.29 $ 40.36 $ 42.26
========= ========= ========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 971,373 $ 1,017,149
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 384,696 324,522
Gain on Sale of Real Estate (163,463) (235,377)
Decrease in Receivables 16,052 159,343
Decrease in Payable to
AEI Fund Management, Inc. (20,835) (33,175)
Increase in Unearned Rent 0 24,200
----------- -----------
Total Adjustments 216,450 239,513
----------- -----------
Net Cash Provided By
Operating Activities 1,187,823 1,256,662
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (221,884) (2,475,090)
Proceeds from Sale of Real Estate 657,632 862,718
----------- -----------
Net Cash Used For
Investing Activities 435,748 (1,612,372)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable (60,200) 156,409
Distributions to Partners (1,212,501) (1,454,547)
----------- -----------
Net Cash Used For
Financing Activities (1,272,701) (1,298,138)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 350,870 (1,653,848)
CASH AND CASH EQUIVALENTS, beginning of period 557,646 2,506,790
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 908,516 $ 852,942
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED SEPTEMBER 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1997 $(24,706) $18,472,657 $18,447,951 23,828.87
Distributions (14,546) (1,440,001) (1,454,547)
Net Income 10,171 1,006,978 1,017,149
-------- ----------- ----------- ----------
BALANCE, September 30, 1998 $(29,081) $18,039,634 $18,010,553 23,828.87
======== =========== =========== ==========
BALANCE, December 31, 1998 $(30,953) $17,854,240 $17,823,287 23,828.87
Distributions (12,125) (1,200,376) (1,212,501)
Net Income 9,714 961,659 971,373
-------- ----------- ----------- ----------
BALANCE, September 30, 1999 $(33,364) $17,615,523 $17,582,159 23,828.87
======== =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Income & Growth Fund XXI Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XXI, 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 April 14, 1995 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 31, 1997, the
Partnership 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.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of the Partnership's properties which the General
Partners determine to distribute will, after provisions for
debts and reserves, be paid in the following manner: (i)
first, 99% to the Limited Partners and 1% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 10% 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.
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 10% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, the
balance of any remaining gain will then be allocated 90% to
the Limited Partners and 10% to the General Partners.
Losses will be allocated 98% to the Limited Partners and 2%
to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
On December 21, 1995, the Partnership purchased a 34.0%
interest in a Media Play retail store in Apple Valley,
Minnesota for $1,414,060. 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
$139,587.
In December, 1996, the Partnership and MGI reached an
agreement in which MGI would buy out and terminate the Lease
Agreement by making a payment of $800,000, which was equal
to approximately two years' rent. The Partnership's share
of such payment was $272,000. A specialist in commercial
property leasing has been retained to locate a new tenant
for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and
other costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of
the Partnership's interest in the Media Play was
approximately $748,000. In the fourth quarter of 1997, a
charge to operations for real estate impairment of $580,200
was recognized, which is the difference between the book
value at December 31, 1997 of $1,328,200 and the estimated
market value of $748,000. The charge was recorded against
the cost of the land, building and equipment.
On July 8, 1997, the Partnership purchased a parcel of land
in Livonia, Michigan for $1,074,384. The land is leased to
Champps under a Lease Agreement with a primary term of 20
years and annual rental payments of $75,207. Effective
January 3, 1998, the annual rent was increased to $115,496.
Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership advanced funds to Champps for
the construction of a Champps Americana restaurant on the
site. Initially, the Partnership charged interest on the
advances at a rate of 7.0%. Effective January 3, 1998, the
interest rate was increased to 10.75%. On May 19, 1998,
after the development was completed, the Lease Agreement was
amended to require annual rental payments of $429,135.
Total acquisition costs, including the cost of the land,
were $4,150,061.
On August 28, 1998, the Partnership purchased a 25% interest
in a parcel of land in Centerville, Ohio for $462,747. The
land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual
rental payments of $32,392. Effective December 25, 1998,
the annual rent was increased to $48,588. Simultaneously
with the purchase of the land, the Partnership entered into
a Development Financing Agreement under which the
Partnership advanced funds to ADC for the construction of a
Champps Americana restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of
7%. Effective December 25, 1998, the interest rate was
increased to 10.5%. On January 27, 1999, after the
development was completed, the Lease Agreement was amended
to require annual rental payments of $101,365. The
Partnership's share of the total acquisition costs,
including the cost of the land, was $984,426. The remaining
interests in the Fund property are owned by AEI Real Estate
Fund XVII Limited Partnership, AEI Real Estate Fund XVIII
Limited Partnership and AEI Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
Through December 31, 1998, the Partnership sold 40.7615% of
its interest in the Champps Americana restaurant in
Columbus, Ohio, in six separate transactions to unrelated
third parties. The Partnership received total net sale
proceeds of $1,383,508 which resulted in a total net gain of
$341,928. The total cost and related accumulated
depreciation of the interests sold was $1,087,502 and
$45,922, respectively. For the nine months ended September
30, 1998, the net gain was $235,377.
During the three months ended September 30, 1999, the
Partnership sold 63.4768% of its interest in the Arby's
restaurant in three separate transactions to unrelated third
parties. The Partnership received total net sale proceeds
of $657,632 which resulted in a total net gain of $163,463.
The total cost and related accumulated depreciation of the
interest sold was $545,697 and $51,528, respectively.
Subsequent to September 30, 1999, the Partnership sold an
additional 21.5614% of its interest in the ArbyOs restaurant
to an unrelated third party. The Partnership received net
sale proceeds of approximately $224,000 which resulted in a
net gain of approximately $56,000.
In September, 1999, the Partnership entered into an
agreement to sell the Caribou Coffee store to an unrelated
third party. On October 26, 1999, the sale closed with the
Partnership receiving net sale proceeds of approximately
$1,575,000 for its interest in the property, which resulted
in a net gain of approximately $323,000.
During the first nine months of 1999 and 1998, the
Partnership distributed $19,895 and $348,252 of the net sale
proceeds to the Limited and General Partners as part of
their regular quarterly distributions which represented a
return of capital of $0.83 and $14.47 per Limited
Partnership Unit, respectively.
(4) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the nine months ended September 30, 1999 and 1998, the
Partnership recognized rental income of $1,420,395 and
$1,247,467, respectively. During the same periods, the
Partnership earned investment income of $14,045 and $140,616,
respectively. In 1999, rental income increased primarily as a
result of rent received from the Champps Americana restaurants in
Livonia, Michigan and Centerville, Ohio. The increase in rental
income was partially offset by a decrease in investment income
earned on subscription and sale proceeds prior to the purchase of
the properties.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Musicland Group, Inc. (MGI), the lessee of the Media Play
retail store in Apple Valley, Minnesota experienced financial
difficulties and was aggressively restructuring its organization.
As part of the restructuring, the Partnership and MGI reached an
agreement in December, 1996 in which MGI would buy out and
terminate the Lease Agreement by making a payment of $800,000,
which is equal to approximately two years' rent. The
Partnership's share of such payment was $272,000. A specialist
in commercial property leasing has been retained to locate a new
tenant for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and other
costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of the
Partnership's interest in the Media Play was approximately
$748,000. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $580,200 was recognized, which is
the difference between the book value at December 31, 1997 of
$1,328,200 and the estimated market value of $748,000. The
charge was recorded against the cost of the land, building and
equipment.
During the nine months ended September 30, 1999 and 1998,
the Partnership paid Partnership administration expenses to
affiliated parties of $175,086 and $187,294, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $66,748 and $94,495, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The decrease
in these expenses in 1999, when compared to 1998, is the result
of expenses incurred in 1998 related to the Media Play situation
discussed above.
As of September 30, 1999, the Partnership's cash
distribution rate was 6.5% on an annualized basis. Distributions
of Net Cash Flow to the General Partners are subordinated to the
Limited Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to Limited
Partners and 1% to the General Partners.
Inflation has had a minimal effect on income from
operations. The Leases contain cost of living increases which
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.
The Year 2000 issue is the result of computer systems that
use two digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and has
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership intends to monitor and communicate with
tenants regarding Year 2000 compliance, although there can be no
assurance that the systems of the various tenants will be Year
2000 compliant.
Liquidity and Capital Resources
During the nine months ended September 30, 1999, the
Partnership's cash balances increased $350,870 mainly as a result
of proceeds received from the sale of property. Net cash
provided by operating activities decreased from $1,256,662 in
1998 to $1,187,823 in 1999 mainly as a result of net timing
differences in the collection of payments from the lessees and
the payment of expenses, which were partially offset by an
increase in income and a decrease in expenses in 1999.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the nine months ended
September 30, 1999 and 1998, the Partnership expended $221,884
and $2,475,090, respectively, to invest in real properties
(inclusive of acquisition expenses). During the same periods,
the Partnership generated cash flow from the sale of real estate
of $657,632 and $862,718, respectively.
On July 8, 1997, the Partnership purchased a parcel of
land in Livonia, Michigan for $1,074,384. The land is leased to
Champps under a Lease Agreement with a primary term of 20 years
and annual rental payments of $75,207. Effective January 3,
1998, the annual rent was increased to $115,496. Simultaneously
with the purchase of the land, the Partnership entered into a
Development Financing Agreement under which the Partnership
advanced funds to Champps for the construction of a Champps
Americana restaurant on the site. Initially, the Partnership
charged interest on the advances at a rate of 7.0%. Effective
January 3, 1998, the interest rate was increased to 10.75%. On
May 19, 1998, after the development was completed, the Lease
Agreement was amended to require annual rental payments of
$429,135. Total acquisition costs, including the cost of the
land, were $4,150,061.
On August 28, 1998, the Partnership purchased a 25%
interest in a parcel of land in Centerville, Ohio for $462,747.
The land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $32,392. Effective December 25, 1998, the annual
rent was increased to $48,588. Simultaneously with the purchase
of the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to ADC for
the construction of a Champps Americana restaurant on the site.
Initially, the Partnership charged interest on the advances at a
rate of 7%. Effective December 25, 1998, the interest rate was
increased to 10.5%. On January 27, 1999, after the development
was completed, the Lease Agreement was amended to require annual
rental payments of $101,365. The Partnership's share of the
total acquisition costs, including the cost of the land, was
$984,426. The remaining interests in the Fund property are owned
by AEI Real Estate Fund XVII Limited Partnership, AEI Real Estate
Fund XVIII Limited Partnership and AEI Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.
Through December 31, 1998, the Partnership sold 40.7615%
of its interest in the Champps Americana restaurant in Columbus,
Ohio, in six separate transactions to unrelated third parties.
The Partnership received total net sale proceeds of $1,383,508
which resulted in a total net gain of $341,928. The total cost
and related accumulated depreciation of the interests sold was
$1,087,502 and $45,922, respectively. For the nine months ended
September 30, 1998, the net gain was $235,377.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
During the three months ended September 30, 1999, the
Partnership sold 63.4768% of its interest in the Arby's
restaurant in three separate transactions to unrelated third
parties. The Partnership received total net sale proceeds of
$657,632 which resulted in a total net gain of $163,463. The
total cost and related accumulated depreciation of the interest
sold was $545,697 and $51,528, respectively.
Subsequent to September 30, 1999, the Partnership sold an
additional 21.5614% of its interest in the ArbyOs restaurant to
an unrelated third party. The Partnership received net sale
proceeds of approximately $224,000 which resulted in a net gain
of approximately $56,000.
In September, 1999, the Partnership entered into an
agreement to sell the Caribou Coffee store to an unrelated third
party. On October 26, 1999, the sale closed with the Partnership
receiving net sale proceeds of approximately $1,575,000 for its
interest in the property, which resulted in a net gain of
approximately $323,000.
During the first nine months of 1999 and 1998, the
Partnership distributed $19,895 and $348,252 of the net sale
proceeds to the Limited and General Partners as part of their
regular quarterly distributions which represented a return of
capital of $0.83 and $14.47 per Limited Partnership Unit,
respectively.
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. The redemption
payments generally are funded with cash that would normally be
paid as part of the regular quarterly distributions. As a
result, total distributions and distributions payable have
fluctuated from year to year due to cash used to fund redemption
payments. Effective January 1, 1999, the PartnershipOs
distribution rate was reduced from 7.5% to 7.0%. Effective April
1, 1999, the rate was reduced to 6.5%. As a result,
distributions were higher during 1998 when compared to the same
period in 1999.
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.
On October 1, 1999, ten Limited Partners redeemed a total
of 280.37 Partnership Units for $239,479 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, three
Limited Partners redeemed a total of 171.1 Partnership Units for
$154,021. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated August 4,
1999 between the Partnership and VTA
Building Company relating to the property
at 2719 Zelda Road, Montgomery, Alabama.
10.2 Co-Tenancy Agreement dated August 6,
1999 between the Partnership and VTA
Building Company relating to the property
at 2719 Zelda Road, Montgomery, Alabama.
10.3 Purchase Agreement dated September
20, 1999 between the Partnership, AEI
Institutional Net Lease Fund '93 Limited
Partnership and Boulevard East, LLC
relating to the property at 1531 East
Boulevard, Charlotte, North Carolina.
10.4 Purchase Agreement dated September
29, 1999 between the Partnership and The
Barrett Family Trust relating to the
property at 2719 Zelda Road, Montgomery,
Alabama.
10.5 Co-Tenancy Agreement dated October
22, 1999 between the Partnership and The
Barrett Family Trust relating to the
property at 2719 Zelda Road, Montgomery,
Alabama.
27 Financial Data Schedule for period
ended September 30, 1999.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: November 8, 1999 AEI Income & Growth Fund XXI
Limited Partnership
By: AEI Fund Management XXI, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
PURCHASE AGREEMENT
Arby's Restaurant - Montgomery, AL
This AGREEMENT, entered into effective as of the 4th of August,
1999.
l. Parties. Seller is AEI Income & Growth Fund XXI Limited
Partnership which owns an undivided 45.8039% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property") Buyer is VTA
Building Company, a Minnesota general partnership ("Buyer").
Seller wishes to sell and Buyer wishes to buy a portion of
Seller's tenant in common interest in the Entire Property.
2. Property. The Property to be sold to Buyer in this transaction
consists of an undivided 21.5614 percentage interest
(hereinafter, simply the "Property") as Tenant in Common in the
Entire Property.
3. Purchase Price . The purchase price for this percentage
interest in the Entire Property is $250,000, all cash.
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed.
(b) Buyer will deposit the balance of the purchase price,
$245,000 (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 August 13,
1999.
6. DUE DILIGENCE. Buyer will have until the expiration of the
tenth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) A copy of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) A copy of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
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, via first class
mail, return receipt requested, to Seller and escrow holder
before the expiration of the Review Period. Such notice shall be
deemed effective only upon receipt by Seller. If this Agreement
is not cancelled as set forth above, the First Payment shall be
non-refundable unless Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under the first paragraph of sections 6 of this
agreement (which will survive), Buyer (after execution of such
documents reasonably requested by Seller to evidence the
termination hereof) shall be returned its First Payment, and
Buyer will have absolutely no rights, claims or interest of any
type in connection with the Property or this transaction,
regardless of any alleged conduct by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to be in default under this Agreement.
Seller may, at its option, retain the First Payment and declare
this Agreement null and void, in which event Buyer will be deemed
to have canceled this Agreement and relinquish all rights in and
to the Property or Seller may exercise its rights under Section
14 hereof. If this Agreement is not canceled and the Second
Payment is made when required, all of Buyer's conditions and
contingencies will be deemed satisfied.
7. ESCROW. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this agreement by both parties. The
escrow holder will be a nationally-recognized escrow company
selected by Seller. A copy of this Agreement will be delivered to
the escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. TITLE. Closing will be conditioned on the commitment of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed ten (10) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect. Seller has no obligation to spend any funds or make any
effort to satisfy Buyer's objections if any.
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
notice of satisfaction of Buyer's objections to the Buyer, the
parties shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid real estate taxes and unpaid
levied and pending special assessments existing on the date
of Closing shall be the responsibility of Buyer and Seller
in proportion to their respective Tenant in Common
interests, pro-rated, however, to the date of closing for
the period prior to closing, which shall be the
responsibility of Seller if Tenant shall not pay the same.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate share
of all operating expenses of the Entire Property incurred on
and after the date of closing.
11. SELLER'S REPRESENTATION AND AGREEMENTS.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between AEI Income
and Growth Fund XXI Limited Partnership and AEI Institutional
Net Lease Fund '93 Limited Partnership (as "Landlord") and
RTM Gulf Coast, Inc. ("Tenant") dated May 31, 1995, Seller is not
aware of any leases of the Property. The above referenced
lease agreement has a first right of refusal in favor of the
Tenant as set forth in Article 35 of said lease agreement, which
right shall apply to any attempted disposition of the Property
by Buyer after this transaction. The above lease also has an
option to purchase in favor of the tenant as set forth in article
34 of said lease.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
on Buyer after the Closing Date without Buyer's prior
consent, which will not be unreasonably withheld. However,
Buyer acknowledges that Seller retains the right both prior
to and after the Closing Date to freely transfer all or a
portion of Seller's remaining undivided interest in the
Entire Property, provided such sale shall not encumber the
Property being purchased by Buyer in violation of the terms
hereof or the contemplated Co-Tenancy Agreement.
12. DISCLOSURES.
(a) Seller has not received any notice of any material,
physical, or mechanical defects of the Entire Property,
including without limitation, the plumbing, heating, air
conditioning, ventilating, electrical system. To the best of
Seller's knowledge without inquiry, all such items are in
good operating condition and repair and in compliance with
all applicable governmental, zoning, and land use laws,
ordinances, regulations and requirements. If Seller shall
receive any notice to the contrary prior to Closing, Seller
will inform Buyer prior to Closing.
(b) Seller has not received any notice that the use and
operation of the Entire Property is not in full compliance
with applicable building codes, safety, fire, zoning, and
land use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller
shall receive any notice to the contrary prior to Closing,
Seller will inform Buyer prior to Closing.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the Tenant from using and operating the Entire
Property after the Closing in the manner in which the Entire
Property has been used and operated prior to the date of
this Agreement. If Seller shall receive any notice to the
contrary prior to Closing, Seller will inform Buyer prior to
Closing.
(d) Seller has not received any notice that the Entire
Property is in violation of any federal, state or local law,
ordinance, or regulations relating to industrial hygiene or
the environmental conditions on, under, or about the Entire
Property, including, but not limited to, soil, and
groundwater conditions. To the best of Seller's knowledge,
there is no proceeding or inquiry by any governmental
authority with respect to the presence of Hazardous
Materials on the Entire Property or the migration of
Hazardous Materials from or to other property. Buyer agrees
that Seller will have no liability of any type to Buyer or
Buyer's successors, assigns, or affiliates in connection
with any Hazardous Materials on or in connection with the
Entire Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Entire Property arising out of Seller's gross negligence or
intentional misconduct. If Seller shall receive any notice
to the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein.
(f) Buyer acknowledges that, having been given the
opportunity to inspect the Entire Property and such
financial information on the Lessee and Guarantors of the
Lease as Buyer or its advisors shall request, if in Seller's
possession, Buyer is relying solely on its own investigation
of the Property and not on any information provided by
Seller or to be provided except as set forth herein. Buyer
further acknowledges that the information provided and to be
provided by Seller with respect to the Property, the Entire
Property and to the Lessee and Guarantors of Lease was
obtained from a variety of sources and Seller neither (a)
has made independent investigation or verification of such
information,
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
or (b) makes any representations as to the accuracy or
completeness of such information except as herein set forth.
The sale of the Property as provided for herein is made on
an "AS IS" basis, and Buyer expressly acknowledges that, in
consideration of the agreements of Seller herein, except as
otherwise specified herein in paragraph 11(a) and (b) above
and this paragraph 12, Seller makes no Warranty or
representation, Express or Implied, or arising by operation
of law, including, but not limited to, any warranty of
condition, habitability, tenantability, suitability for
commercial purposes, merchantability, or fitness for a
particular purpose, in respect of the Property.
The provisions (d) - (f) above shall survive Closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into
escrow an executed special warranty deed warranting title
against lawful claims by, through, or under a conveyance
from Seller, but not further or otherwise, conveying
insurable title of the Property to Buyer, subject to the
exceptions contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. In addition, Seller shall retain all remedies available
to Seller at law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the Second Payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. BUYER'S REPRESENTATIONS AND WARRANTIES.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
acts, deeds and assurances as Seller or the Title Company
may require and be reasonable in order to consummate the
transactions contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. DAMAGES, DESTRUCTION AND EMINENT DOMAIN.
(a) If, prior to closing, the Property or any part thereof
should be destroyed or further damaged by fire, the
elements, or any cause, due to events occurring subsequent
to the date of this Agreement to the extent that the cost of
repair exceeds $10,000.00, this Agreement shall become null
and void, at Buyer's option exercised, if at all, by written
notice to Seller within ten (10) days after Buyer has
received written notice from Seller of said destruction or
damage. Seller, however, shall have the right to adjust or
settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived;
and (ii) any ten-day period provided for above in this
Subparagraph 16a for Buyer to elect to terminate this
Agreement has expired or Buyer has, by written notice to
Seller, waived Buyer's right to terminate this Agreement.
If Buyer elects to proceed and to consummate the purchase
despite said damage or destruction, there shall be no
reduction in or abatement of the purchase price, and Seller
shall assign to Buyer the Seller's right, title, and
interest in and to all insurance proceeds (pro-rata in
relation to the Entire Property) resulting from said damage
or destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of any
Tenant of the Entire Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
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
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
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 Dakota County Abstract and
Title which will act as Accommodator to perfect the 1031 exchange
by preparing an agreement of exchange of Real Property whereby
Dakota County Abstract and Title 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 Dakota County Abstract and Title, Seller will deed
the Property to Buyer.
18. CANCELLATION
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. MISCELLANEOUS.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by August 5, 1999,
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing 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.
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
If to Seller:
Attention: Robert P. Johnson
AEI Income & Growth Fund XXI Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
VTA Building Company
12825 Falcon Drive
Apple Valley, MN 55124
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: VTA Building Company, A Minnesota General Partnership
By: /s/ James R Knecht
James R. Knecht, Partner
By: /s/ Rosalee J Knecht
Rosalee J. Knecht, Partner
SELLER: AEI Income & Growth Fund XXI Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate
general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
Buyer Initial: /s/ JRK
Purchase Agreement for Arby's Restaurant - Montgomery, AL
EXHIBIT "A"
Commencing at the Northeast corner of the Southeast Quarter
of the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama, thence
West a distance of 535.66 feet, thence North 328.83 feet to
the Southwest corner of Lot 1-T, of the Taco Bell Plat No.
3, Zelda Road as recorded in the Montgomery County Probate
Office, said point being on the curve of the Norterly right
of way of Zelda Roas, said curve having a radius of 392.86
feet, a central angle of 30 13' 45" and a chord of 204.88
feet with a chord bearing of S 59 16' 00" E, thence
southeasterly along said curve to the end of said curve,
said point being the Southeast corner of said Lot 1-T, also
being the point of beginning. Thence N 39 28' 53" E, from
the point of beginning along the southeasterly line of said
Lot 1-T, a distance of 152.21 feet to an iron pin found on
the southerly right of way of Interstate Hiwhway I-85;
thence S 52 30' 39" E, along the southerly right of way of
Interstate Highway I-85 a distance of 311.90 feet to a found
iron pin; thence S 74 07' 41" W a distance of 270.89 feet to
a found iron pin on the northerly right of way of Zelda
Road; thence N 20 20' 05" W along the Northerly right of way
of Zelda Road a distance of 28.41 feet to the beginning of
the curve of the northerly right of way of Zelda Road, said
curve having a radius of 392.86 feet, a central angle of 20
38' 00" and a chord of 140.71 feet with a chord bearing of N
31 38' 47" W; thence Northwesterly along said curve to the
end of said curve, said point being the southeast corner of
said Lot 1-T, and also being the point of beginning. The
said tract of land is located in the Northeast Quarter of
the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Arby's Restaurant - Montgomery, AL)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 6th day of August, 1999, by and
between VTA Building Company, A Minnesota general partnership,
(hereinafter called "VTA") and AEI Income & Growth Fund XXI
Limited Partnership (hereinafter called "Fund XXI") VTA, Fund XXI
(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 XXI presently owns an undivided 24.2425% interest
in and to, and VTA owns an undivided 21.5614% interest in and to,
and Roland Terry owns an undivided 20.3540% interest in and to
and the Catharine C. Whittenburg Testamentary Trust for J. A.
Whittenburg IV or Assigns presently owns an undivided 21.5614%
interest in and to, and the Cheung Living Trust Dated July 27,
1989 presently owns an undivided 12.2807% interest in and to the
land, situated in the City of Montgomery, County of Montgomery,
and State of AL, (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 VTA's interest by
Fund XXI; 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 VTA 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 XXI, or its designated agent, successors or
assigns. Provided, however, if Fund XXI shall sell all of its
interest in the Premises, the duties and obligations of Fund XXI
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 XXI 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. VTA
hereto hereby designates Fund XXI as its sole and exclusive agent
to deal with, and Fund XXI retains the sole right to deal with,
any property agent or tenant and to negotiate and enter into, on
terms and provisions satisfactory to Fund XXI, monitor, execute
and enforce the terms of leases of space within the Premises,
including but not limited to any amendments, consents to
assignment, sublet, releases or modifications to leases or
guarantees of lease or easements affecting the Premises, on
behalf of VTA As long as Fund XXI owns an interest in the
Premises, only Fund XXI may obligate VTA with respect to any
expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XXI agrees to
require any lessee of the Premises to name VTA as an insured or
additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XXI shall use
its best efforts to obtain
Co-Tenant Initial: /s/ JRK
Co-Tenancy Agreement for Arby's - Montgomery, AL
endorsements adding Co-Tenants to said policies from lessee
within 30 days of commencement of this agreement. In any event,
Fund XXI shall distribute any insurance proceeds it may receive,
to the extent consistent with any lease on the Premises, to the
Co-Tenants in proportion to their respective ownership of the
Premises.
2. Income and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XXI may offset
against, pay to itself and deduct from any payment due to VTA
under this Agreement, and may pay to itself the amount of VTA's
share of any reasonable expenses of the Premises which are not
paid by VTA to Fund XXI or its assigns, within ten (10) days
after demand by Fund XXI. In the event there is insufficient
operating income from which to deduct VTA's unpaid share of
operating expenses, Fund XXI 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.
VTA has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XXI in the amount
of $ 710.00 for the expenses, direct and indirect, incurred by
Fund XXI in providing VTA with quarterly accounting and
distributions of VTA's share of net income and for tracking,
reporting and assessing the calculation of VTA's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and VTA authorizes
Fund XXI to deduct such amount from VTA's share of revenue from
the Premises. VTA may terminate this agreement in this paragraph
respecting accounting and distributions at any time and attempt
to collect its share of rental income directly from the tenant;
however, enforcement of all other provisions of the lease remains
the sole right of Fund XXI pursuant to Section 1 hereof. Fund
XXI may terminate its obligation under this paragraph upon 30
days notice to VTA prior to the end of each anniversary hereof,
unless agreed in writing to the contrary.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XXI'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 XXI 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, VTA shall be entitled to
receive 21.5614% of all items of income and expense generated by
the Premises. Upon receipt of said accounting, if the payments
received by each Co-Tenant pursuant to this Paragraph 3 do not
equal, in the aggregate, the amounts which each are entitled to
receive proportional to its share of ownership with respect to
said calendar year pursuant to Paragraph 2 hereof, an appropriate
adjustment shall be made so that each Co-Tenant receives the
amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements, for which adequate reserves do not
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor from Fund XXI, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XXI sufficient to pay said net operating losses
and to provide necessary operating capital
Co-Tenant Initial: /s/ JRK
Co-Tenancy Agreement for Arby's - Montgomery, AL
for the premises and to pay for said capital improvements,
repairs and/or replacements, all in proportion to their undivided
interests in and to the Premises.
5. Co-Tenants may, at any time, sell, finance, or otherwise
create a lien upon their interest in the Premises but only upon
their interest and not upon any part of the interest held, or
owned, by any other Co-Tenant. All Co-Tenants reserve the right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.
6. If any Co-Tenant shall be in default with respect to any of
its obligations hereunder, and if said default is not corrected
within thirty (30) days after receipt by said defaulting Co-
Tenant of written notice of said default, or within a reasonable
period if said default does not consist solely of a failure to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.
7. This Co-Tenancy agreement shall continue in full force and
effect and shall bind and inure to the benefit of the Co-Tenant
and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns until June 1,
2025 or upon the sale of the entire Premises in accordance with
the terms hereof and proper disbursement of the proceeds thereof,
whichever shall first occur. Unless specifically identified as a
personal contract right or obligation herein, this agreement
shall run with any interest in the Premises and with the title
thereto. Once any person, party or entity has ceased to have an
interest in fee in any portion of the Premises, it shall not be
bound by, subject to or benefit from the terms hereof; but its
heirs, executors, administrators, personal representatives,
successors or assigns, as the case may be, shall be substituted
for it hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be given
to all known Co-Tenants and deemed given or served in accordance
with the provisions of this Agreement, if said notice or
elections addressed as follows;
If to Fund XXI:
AEI Income and Growth Fund XXI Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to VTA:
VTA Building Company
12825 Falcon Drive
Apple Valley, MN 55124
If to Cheung:
Howard Owyoung Cheung
Rosemarie Cheung
10 Live Oak Court
Hillsborough, CA 94010
Co-Tenant Initial: /s/ JRK
Co-Tenancy Agreement for Arby's - Montgomery, AL
If to Whittenburg:
The Catharine C. Whittenburg Testamentary Trust
Post Office Box 26
Amarillo, TX 79105
If to Terry:
Roland Terry
154 Little Hendricks Pk #20612
Jasper, GA 30143
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.
REST OF PAGE INTENTIONALLY LEFT BLANK
Co-Tenant Initial: /s/ JRK
Co-Tenancy Agreement for Arby's - Montgomery, AL
VTA Building Company
By: /s/ James R Knecht
James R. Knecht, Partner
STATE OF MINNESOTA)
) ss
COUNTY OF Ramsey)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 4th day of August,
1999, James R Knecht who executed the foregoing instrument in
said capacity.
[notary seal]
/s/ Barbara J Kochevar
Notary Public
By: /s/ Rosalee J Knecht
Rosalee J. Knecht, Partner
STATE OF MINNESOTA)
) ss [notary seal]
COUNTY OF Ramsey)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 4th day of August,
1999, Rosalee J Knecht who executed the foregoing instrument in
said capacity.
/s/ Barbara J Kochevar
Notary Public
Co-Tenant Initial: /s/ JRK
Co-Tenancy Agreement for Arby's - Montgomery, AL
Fund XXI AEI Income & Growth Fund XXI Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate general
partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
State of Minnesota )
) ss.
County of Ramsey )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 4th day of August,
1999, Robert P. Johnson, President of AEI Fund Management XXI,
Inc., corporate general partner of AEI Income & Growth Fund XXI
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/ JRK
Co-Tenancy Agreement for Arby's - Montgomery, AL
EXHIBIT "A"
Commencing at the Northeast corner of the Southeast Quarter
of the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama, thence
West a distance of 535.66 feet, thence North 328.83 feet to
the Southwest corner of Lot 1-T, of the Taco Bell Plat No.
3, Zelda Road as recorded in the Montgomery County Probate
Office, said point being on the curve of the Norterly right
of way of Zelda Roas, said curve having a radius of 392.86
feet, a central angle of 30 13' 45" and a chord of 204.88
feet with a chord bearing of S 59 16' 00" E, thence
southeasterly along said curve to the end of said curve,
said point being the Southeast corner of said Lot 1-T, also
being the point of beginning. Thence N 39 28' 53" E, from
the point of beginning along the southeasterly line of said
Lot 1-T, a distance of 152.21 feet to an iron pin found on
the southerly right of way of Interstate Hiwhway I-85;
thence S 52 30' 39" E, along the southerly right of way of
Interstate Highway I-85 a distance of 311.90 feet to a found
iron pin; thence S 74 07' 41" W a distance of 270.89 feet to
a found iron pin on the northerly right of way of Zelda
Road; thence N 20 20' 05" W along the Northerly right of way
of Zelda Road a distance of 28.41 feet to the beginning of
the curve of the northerly right of way of Zelda Road, said
curve having a radius of 392.86 feet, a central angle of 20
38' 00" and a chord of 140.71 feet with a chord bearing of N
31 38' 47" W; thence Northwesterly along said curve to the
end of said curve, said point being the southeast corner of
said Lot 1-T, and also being the point of beginning. The
said tract of land is located in the Northeast Quarter of
the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama.
PURCHASE AGREEMENT
THIS AGREEMENT, entered into effective as of this 20th day
of September, 1999.
1. Parties. The buyer is Boulevard East, LLC or related
assigns, (such assignment to be effective only if buyer shall
remain liable for the full performance of Buyer hereunder),
("Buyer"), and the seller is AEI Income & Growth Fund XXI Limited
Partnership, a Minnesota limited partnership, and AEI
Institutional Net Lease Fund `93 Limited Partnership (together,
"Seller").
2. Property. The Property consists of the real property
legally described on Exhibit A attached hereto, all buildings and
improvements, and fixtures on the land, (including, but not
limited to, that certain approximately square foot building and
related improvements) appurtenances, mineral and similar rights
(to the extent owned by Seller), and personal property, if any,
presently owned by Seller and used by Seller in connection with
the land or the improvements, all of Seller's interest in all
leases, prepaid rents, security deposits and other contract
rights, guaranties and warranties or other rights related to the
use and operation of the Property and all assignable governmental
licenses and permits.
3. Purchase Price. The purchase price for the Property is
$1,697,089, 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 forwarded to the Escrowee per
paragraph 7 hereof, and credited against the
purchase price when and if escrow closes and
the sale is completed.
(b) At the expiration of the Due
Diligence Period, buyer will deposit with
Escrowee an addition $20,000 (the ASecond
Payment@)
(c) Buyer will deposit the balance
of the purchase price, $1,672,089, (the
"Final Payment") into escrow in sufficient
time to allow escrow to close on the closing
date.
5. Closing Date. Escrow is scheduled to close (i.e., the
deed will be recorded and the purchase price transferred to
Seller) on November 15, 1999, or such earlier time as the parties
may mutually agree.
6. Due Diligence. Buyer will have until the latter of (i)
forty-five (45) days after the full execution of this Agreement
by both parties hereto, or (ii) forty-five (45) days after
delivery of each of the following items (the ADue Diligence
Period@) to conduct all of its inspections and due diligence and
satisfy itself regarding each item, the Property and this
transaction.
a. The original and one copy of a title insurance
commitment for an ALTA owner's title insurance policy
(see paragraph 8 below)
b. Copies of such "as built" plans and specifications
for the Property as Seller can locate after diligent
search.
c. Copies of an "as built" survey of the Property
done concurrent with Seller's acquisition of the
Property.
d. Current lease, and rent payment history showing
occupancy date, lease expiration date, rent, and
security deposit, if any, accompanied by such tenant
financial statements as may have been provided to
Seller by the Tenant.
Copies of any and all existing soil tests and
environmental tests previously done by or for Seller
relating to the Property.
During the Due Diligence Period, Buyer and Seller as a condition
to both parties' obligations hereunder, shall attempt to agree
upon a mutually acceptable form of assignment and assumption of
lease and personalty of Seller on the Property, if any, with
respective pre and post closing indemnification clauses, and an
Estoppel Certificate executed by existing tenant on such form
reasonably approved by Buyer, or if tenant is unwilling,
certified by Seller (to be submitted within thirty (30) days of
Closing).
Seller shall provide Buyer access to the Property from time to
time for the purpose of conducting inspections thereof including
mechanical, structural, electrical and other physical
inspections. Buyer has until the end of the Due Diligence Period
to complete such physical inspection.
Buyer shall indemnify Seller from and against any and all losses,
claims, causes of action, liabilities, and costs to the extent
caused by the actions of Buyer, its agents, employees,
contractors, or invitees, during any such entry upon the
Property. The foregoing duty of indemnification shall include
the duty to pay all reasonable attorney's fees incurred by the
Seller in responding to or defending any such claims or
proceedings.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice by certified mail,
return receipt requested, or by overnight delivery service to
Seller and escrow holder before the expiration of the Due
Diligence 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 the First
Payment, and Buyer will have absolutely no rights, claims or
interest of any type in connection with the Property or this
transaction, regardless of any alleged conduct by Seller or
anyone else.
Buyer irrevocably will be deemed to have canceled this Agreement
and relinquish all rights in and to the Property unless Buyer
makes the Second Payment when required. Upon payment of the
Second Payment, Buyer shall have been deemed to have waived its
right to terminate this Agreement based upon the items received
by Buyer and its inspection of the property during the Due
Diligence Period. Buyer shall have ten (10) business days, from
written notice to Buyer, to review any adverse material changes
in any of the due diligence items received prior to the Closing
Date to terminate this Agreement. Except for the foregoing, 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. The escrow holder will be Centura Title Insurance
Agency, as agent for a nationally-recognized title insurance
company reasonably acceptable to Seller ("the Escrowee"), with
offices in or near Charlotte, North Carolina. A copy of this
Agreement and the First Payment 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.
Escrow will be deemed opened only upon Seller's execution of this
Agreement and the deposit with Escrowee of the Buyer's First
Payment by Seller. The escrow is scheduled to close on November
15, 1999.
8. Title. Closing will be conditioned on the agreement of the
Escrowee to issue an ALTA Owner's policy of title insurance,
dated as of the close of escrow, in an amount equal to the
purchase price, insuring that Buyer will own insurable title to
the property subject only to: the title company's standard
exceptions; current real property taxes and assessments; survey
exceptions; and other items of record disclosed to Buyer during
the contingency period.
Buyer shall be allowed ten (10) business days after receipt of
said commitment for examination and for the making of any
objections thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed sixty (60) days to remove or cure such objection to
Buyer's satisfaction and make such title marketable. If Seller
shall decide to make no efforts to make title marketable, or is
unable to make title marketable, (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.
Seller shall pay for the cost of issuing the title commitment and
Buyer shall pay the owner's title insurance premium for an
Owner's policy.
9. CLOSING COSTS. Subject to paragraph 4(c) above, Seller will
pay the deed stamp taxes and one-half of escrow fees, and any
brokerage commissions payable. Buyer will pay all recording
fees, one-half of the escrow fees, the costs of a survey or
survey update (if required by Buyer) and the title premium. Each
party will pay its own attorneys' fees and costs to document and
close of this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Property is subject to a
triple net lease, the parties acknowledge that
there shall be no need for a real estate tax
prorations. 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 pro-rated between Buyer and
Seller as of the date of Closing. Buyer shall pay
all taxes due and payable in the year after
Closing and any unpaid installments of special
assessments payable therewith and thereafter.
(b) All income and all operating expenses
from the 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 all income earned and shall
be responsible for all operating expenses of the
Property incurred on and after the date of
closing. To the extent any of said items cannot
be determined at Closing after reasonable efforts,
Seller and Buyer shall compute such prorations as
soon as possible after Closing and settle such
adjustment as of the Closing date.
11. SELLER'S COVENANTS, REPRESENTATIONS AND AGREEMENTS.
(a) Seller represents and warrants as of this date
that:
(i) Except for the Net Lease
Agreement with Caribou Coffee and its
sublessees or concessionaires, there are no
other leases of the property. The Caribou
Coffee Net Lease Agreement is in full force
and effect and neither party is in default
thereunder and the tenant is not entitled to
any credits or offsets thereunder.
(ii) It is not aware of any pending
litigation, condemnation, or rezoning
proceedings against the Property or Seller's
interest in the Property.
(iii) It is not aware of any contracts it
has executed that would be binding on Buyer
after the closing date.
(iv) Seller is validly existing and duly
qualified to transact business in the State
of North Carolina.
(v) To the best of Seller's knowledge the
Property is not subject to any claim, demand,
suit, unfiled lien or other proceeding of any
kind which affects or may affect the
Property.
(vi) There are no leasing commissions, fees
or other compensation owed in connection with
the leasing of the Property.
(vii) Provided that Buyer performs its
obligations when required, Seller agrees that
it will not enter into any new contracts or
amend or modify any current leases 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.
(viii) Seller is not a "foreign person"
which would subject Buyer to the withholding
tax provisions of Section 1445 of the
Internal Revenue Code.
(ix) To Seller's best knowledge, the Property
and all business operations thereon are in
compliance with all applicable federal, state
and local statutes, laws and regulations.
(x) Seller is not aware of, and has received
no notice of, the presence, disposal, leakage
or migration on to the Property of any
hazardous waste or toxic substances regulated
by any federal, state or local governmental
authorities which may be in violation of any
applicable law, rule or regulation.
(xi) In addition to the acts and
deeds recited herein and contemplated to be
performed, executed, and delivered by Seller,
Seller shall perform, execute, and deliver or
cause to be performed, executed, and
delivered at the Closing or after the
Closing, any and all further acts, deeds, and
assurances, as Buyer or the Title Company may
require and Seller deems to be reasonable in
order to consummate the transactions
contemplated herein.
(xii) Seller has all requisite power and
authority to consummate the transaction
contemplated by this Agreement and has by
proper proceedings duly authorized the
execution and delivery of this Agreement and
the consummation of the transaction
contemplated hereby.
(b) All covenants, representations and warranties
of Seller contained herein are true and correct as
of the date hereof and shall be true and correct
as of the date of Closing.
12. Disclaimer. Seller and Buyer acknowledge and agree
that Seller acquired the Property through a sale\leaseback with
the present tenant. Seller has been an absentee landlord.
Consequently, Seller has little, if any, knowledge of the
physical characteristics of the Property.
Accordingly, except as otherwise specifically stated in this
Agreement, Seller hereby specifically disclaims any warranty,
guaranty, or representation, oral or written, past, present, or
future of, as to, or concerning (i) the nature and condition of
the Property, including, without limitation, the water, soil, and
geology, and the suitability thereof and of the Property for any
and all activities and uses which Buyer may elect to conduct
thereon; (ii) except for the warranty contained in the Deed to be
delivered by Seller at the Closing, the nature and extent of any
right of way, Lease, possession, lien, encumbrance, license,
reservation, condition, or otherwise, and (iii) the compliance
of the Property or its operation with any laws, ordinances, or
regulations of any government or other body.
Buyer acknowledges that having been given the opportunity to
inspect the Property, Buyer is relying solely on its own
investigation of the Property and not on any information
provided or to be provided by Seller except as set forth herein.
Buyer further acknowledges that the information provided and to
be provided with respect to the Property by Seller 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.
BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN ITS
THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER HAS NO
OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS THEREON, OR TO
PERFORM ANY OTHER ACT REGARDING THE PROPERTY, EXCEPT AS EXPRESSLY
PROVIDED HEREIN.
13. CLOSING.
a. Before the closing date, Seller will deposit
into escrow: an executed general warranty deed on
the form attached hereto as Exhibit B conveying
fee simple, insurable title of the Property to
Buyer; and
i) Assignment and Assumption of the Caribou
Coffee Lease, and any other intangible
personal property.
ii) Bill of sale to personal property, if any, of
Seller, on the property.
iii) Lien waiver affidavit
iv) Form 10995
v) FIRPTA Certificate
vi) Delivery of ORIGINAL Caribou
Coffee lease, warranties/guaranties, if any
in Seller's possession, permits/licenses,
keys, if any, in Seller's possession.
vii) Certified copy of Partnership Agreement
for the Seller
viii) Notice of transfer to tenant jointly
signed by Buyer and Seller.
ix) Estoppel dated no more than 30
days prior to the Closing from Caribou Coffee
in form and substance reasonably satisfactory
to Buyer. If Buyer and Seller cannot agree
prior to the end of the Due Diligence Period
on the form of Estoppel to be delivered, this
Agreement shall be null and void and of no
further force and effect and Buyer's First
(and Second, if made) Payment shall be
returned to Buyer.
(b) On or Before the closing date, Buyer
will deposit into escrow: the Assignment and
Assumption of Lease signed by Buyer; the balance
of the purchase price when required under Section
4; any additional funds required to close escrow.
Both parties will sign and deliver to the escrow
holder any other documents reasonably required by
the escrow holder to close escrow.
(c) On the closing date, if escrow is in a
position to close, the escrow holder will: record
the deed in the official records of the county
where the Property is located; cause the title
company to commit to issue the title policy;
immediately deliver to Seller the portion of the
purchase price deposited into escrow by cashier's
check or wire transfer (less debits and
prorations, if any); deliver to Seller and Buyer a
signed counterpart of the escrow holder's
certified closing statement; and take all other
actions necessary to close escrow.
14. DEFAULT. If Buyer defaults and Seller has fully
performed all obligations of Seller hereunder and satisfied all
conditions to Closing to be performed by Seller, Buyer will
forfeit all rights and claims and Seller will be relieved of all
obligations and will be entitled as its sole and exclusive
remedy, to retain all monies heretofore paid by the Buyer as
liquidated damages, actual damages being difficult if not
impossible to calculate and the parties having made a good faith
effort to determine the same.
If Seller shall default, Buyer irrevocably waives any right
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 and Second
Payment, performed all of its other obligations and satisfied
all conditions under this Agreement within the required time
periods, 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 punitive, consequential or
speculative damages arising out of any default by Seller
hereunder. Upon a default by Seller hereunder, Buyer shall have
the right to enforce an action in equity for specific
performance, sue for damages available at law or terminate this
Agreement by written notice to Seller and receive the immediate
return of the First and Second Payment.
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 Buyer deems to 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,
(ii) any order of any court or other agency of
government having jurisdiction hereof, or (iii) any
agreement or instrument to which Buyer is a party or by
which Buyer is bound.
16. DAMAGE, 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, 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 resulting from said
damage or destruction to the extent that the same are
payable with respect to damage to the Property, and are
so payable to Seller under the Caribou Coffee Lease.
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 all the Seller's right,
title and interest in and to any award made, or to be
made, in the condemnation proceeding.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First and Second
Payment shall be immediately returned to Buyer (after execution
by Buyer of such documents reasonably requested by Seller to
evidence the termination hereof).
17. MISCELLANEOUS.
(a) This Agreement may be amended only by a
written agreement signed by both Seller and Buyer,
and all waivers must be in writing and signed by
the waiving party.
(b) 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.
(c) If this escrow has not closed by thirty
(30) days after the end of the Due Diligence
Period, through no fault of Seller, Seller may
either, at its election, extend the closing date,
exercise any remedy available to it by law, or
terminate this Agreement and return all funds
theretofore paid by Buyer.
(d) Funds to be deposited or paid by Buyer
will be good and clear funds in the form of cash,
cashier's checks or wire transfers. All funds
deposited into escrow and held by the escrow
holder will be held in an interest-bearing
account. Interest on the funds in this account
will accrue for Buyer's benefit, but if Buyer
defaults, interest will accrue for Seller's
benefit.
(e) 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 Fund Management, Inc.
1300 Minnesota World Trade Center
Saint Paul, Minnesota 55101
Facsimile: (651) 227-7705
If to Buyer:
Attention: Ralph H. Falls, III CCIM
320 South Tryon Street
Suite 202
Charlotte, North Carolina 28202
Facsimile: (704) 333-6092
(f) Further Conditions to Closing:
i) Seller has complied with
and otherwise performed each of the
covenants and obligations of Seller set
forth herein;
ii) No adverse change to the
title or to the environmental condition
of the Property occurs after the Due
Diligence Period.
(g) All representations, warranties and
covenants contained herein shall, as applicable,
survive the Closing and delivery of the deed for a
period of one (1) year.
(h) This Agreement shall be governed by end
construed in accordance with the laws of the State
of North Carolina.
(i) This Agreement may be executed in
multiple counterparts, each of which shall be an
original copy and together which shall constitute
one instrument.
(j) Buyer intends to effect a tax-deferred
exchange under Section 1031 of the Internal
Revenue Code in connection with the purchase of
the Property and Seller agrees to cooperate with
Buyer in carrying out said exchange; provided
that, seller shall not be responsible for any
costs associated therewith or assume any
liabilities in connection therewith. Seller
agrees to execute such additional documents as may
be required to give effect to this provision.
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller along with the $5,000 First Payment,
which, if accepted, will be deposited into escrow by Seller.
Seller has five (5) business days within which to accept this
offer.
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year first above written.
BUYER: BOULEVARD EAST, LLC
By: /s/ Ralph H Falls
Its: Manager
Accepted and agreed this ______ day of September, 1999.
SELLER: AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP, a
Minnesota limited partnership
By: AEI Fund Management XXI, Inc., its
corporate general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
AEI INSTITUTIONAL NET LEASE FUND `93 LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
By: /s/ Robert P Johnson
Robert P. Johnson, President
EXHIBIT A
Being all of Lots 1, 2, and 3, Garden Terrace Subdivision,
as shown on plat recorded in book of Maps 332, Page 339,
Mecklenburg County Registry, North Carolina.
PURCHASE AGREEMENT
Arby's Restaurant - Montgomery, AL
This AGREEMENT, entered into effective as of the 29 of September,
1999.
l. PARTIES. Seller is AEI Income & Growth Fund XXI Limited
Partnership which owns an undivided 24.2425% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property") Buyer is Beryl B.
Barrett, Trustee of The Barrett Family Trust Dated 4-14-94
("Buyer"). Seller wishes to sell and Buyer wishes to buy a
portion of Seller's tenant in common interest in the Entire
Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
consists of an undivided 21.5614 percentage interest
(hereinafter, simply the "Property") as Tenant in Common in the
Entire Property.
3. PURCHASE PRICE . The purchase price for this percentage
interest in the Entire Property is $250,000, all cash.
4. TERMS. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $5,000
to Seller (which shall be deposited into escrow according to
the terms hereof) (the "First Payment"). The First Payment
will be credited against the purchase price when and if
escrow closes and the sale is completed.
(b) Buyer will deposit the balance of the purchase price,
$245,000 (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 October 30,
1999. Close of escrow is contingent on the closing of the sale
of 315 South 100 West, Logan Utah and 120 West 300 South, Logan
Utah .
6. DUE DILIGENCE. Buyer will have until the expiration of the
tenth business day (The "Review Period") after delivery of each
of following items, to be supplied by Seller, to conduct all of
its inspections and due diligence and satisfy itself regarding
each item, the Property, and this transaction. Buyer agrees to
indemnify and hold Seller harmless for any loss or damage to the
Entire Property or persons caused by Buyer or its agents arising
out of such physical inspections of the Entire Property.
(a) The original and one copy of a title insurance
commitment for an Owner's Title insurance policy (see
paragraph 8 below).
(b) A copy of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) A copy of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
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, via first class
mail, return receipt requested, to Seller and escrow holder
before the expiration of the Review Period. Such notice shall be
deemed effective only upon receipt by Seller. If this Agreement
is not cancelled as set forth above, the First Payment shall be
non-refundable unless Seller shall default hereunder.
If Buyer cancels this Agreement as permitted under this
Section, except for any escrow cancellation fees and any
liabilities under the first paragraph of sections 6 of this
agreement (which will survive), Buyer (after execution of such
documents reasonably requested by Seller to evidence the
termination hereof) shall be returned its First Payment, and
Buyer will have absolutely no rights, claims or interest of any
type in connection with the Property or this transaction,
regardless of any alleged conduct by Seller or anyone else.
Unless this Agreement is canceled by Buyer pursuant to the
terms hereof, if Buyer fails to make the Second Payment, Seller
shall be entitled to retain the First Payment and Buyer
irrevocably will be deemed to be in default under this Agreement.
Seller may, at its option, retain the First Payment and declare
this Agreement null and void, in which event Buyer will be deemed
to have canceled this Agreement and relinquish all rights in and
to the Property or Seller may exercise its rights under Section
14 hereof. If this Agreement is not canceled and the Second
Payment is made when required, all of Buyer's conditions and
contingencies will be deemed satisfied.
7. ESCROW. Escrow shall be opened by Seller and funds deposited
in escrow upon acceptance of this agreement by both parties. The
escrow holder will be a nationally-recognized escrow company
selected by Seller. A copy of this Agreement will be delivered to
the escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its rights
and duties (and the parties agree to sign these additional
instructions). If there is any conflict between these other
instructions and this Agreement, this Agreement will control.
8. TITLE. Closing will be conditioned on the commitment of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record disclosed to Buyer during the Review
Period.
Buyer shall be allowed ten (10) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect. Seller has no obligation to spend any funds or make any
effort to satisfy Buyer's objections if any.
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
of satisfaction of Buyer's objections to the Buyer, the parties
shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Sellers possession (if an update is
required by Buyer.) Each party will pay its own attorney's fees
and costs to document and close this transaction.
10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.
(a) Because the Entire Property (of which the Property is a
part) is subject to a triple net lease (as further set forth
in paragraph 11(a)(i), the parties acknowledge that there
shall be no need for a real estate tax proration. However,
Seller represents that to the best of its knowledge, all
real estate taxes and installments of special assessments
due and payable in all years prior to the year of Closing
have been paid in full. Unpaid real estate taxes and unpaid
levied and pending special assessments existing on the date
of Closing shall be the responsibility of Buyer and Seller
in proportion to their respective Tenant in Common
interests, pro-rated, however, to the date of closing for
the period prior to closing, which shall be the
responsibility of Seller if Tenant shall not pay the same.
Seller and Buyer shall likewise pay all taxes due and
payable in the year after Closing and any unpaid
installments of special assessments payable therewith and
thereafter, if such unpaid levied and pending special
assessments and real estate taxes are not paid by any tenant
of the Entire Property.
(b) All income and all operating expenses from the Entire
Property shall be prorated between the parties and adjusted
by them as of the date of Closing. Seller shall be entitled
to all income earned and shall be responsible for all
expenses incurred prior to the date of Closing, and Buyer
shall be entitled to its proportionate share of all income
earned and shall be responsible for its proportionate share
of all operating expenses of the Entire Property incurred on
and after the date of closing.
11. SELLER'S REPRESENTATION AND AGREEMENTS.
(a) Seller represents and warrants as of this date that:
(i) Except for the lease in existence between AEI Income
and Growth Fund XXI Limited Partnership and AEI Institutional
Net Lease Fund '93 Limited Partnership (as "Landlord") and
RTM Gulf Coast, Inc. ("Tenant") dated May 31, 1995, Seller is not
aware of any leases of the Property. The above referenced
lease agreement has a first right of refusal in favor of the
Tenant as set forth in Article 35 of said lease agreement, which
right shall apply to any attempted disposition of the Property
by Buyer after this transaction. The above lease also has an
option to purchase in favor of the tenant as set forth in article
34 of said lease.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding on Buyer after the Closing Date without Buyer's
prior consent, which will not be unreasonably withheld.
However, Buyer acknowledges that Seller retains the right
both prior to and after the Closing Date to freely transfer
all or a portion of Seller's remaining undivided interest in
the Entire Property, provided such sale shall not encumber
the Property being purchased by Buyer in violation of the
terms hereof or the contemplated Co-Tenancy Agreement.
12. DISCLOSURES.
(a) Seller has not received any notice of any material,
physical, or mechanical defects of the Entire Property,
including without limitation, the plumbing, heating, air
conditioning, ventilating, electrical system. To the best of
Seller's knowledge without inquiry, all such items are in
good operating condition and repair and in compliance with
all applicable governmental, zoning, and land use laws,
ordinances, regulations and requirements. If Seller shall
receive any notice to the contrary prior to Closing, Seller
will inform Buyer prior to Closing.
(b) Seller has not received any notice that the use and
operation of the Entire Property is not in full compliance
with applicable building codes, safety, fire, zoning, and
land use laws, and other applicable local, state and federal
laws, ordinances, regulations and requirements. If Seller
shall receive any notice to the contrary prior to Closing,
Seller will inform Buyer prior to Closing.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent the Tenant from using and operating the Entire
Property after the Closing in the manner in which the Entire
Property has been used and operated prior to the date of
this Agreement. If Seller shall receive any notice to the
contrary prior to Closing, Seller will inform Buyer prior to
Closing.
(d) Seller has not received any notice that the Entire
Property is in violation of any federal, state or local law,
ordinance, or regulations relating to industrial hygiene or
the environmental conditions on, under, or about the Entire
Property, including, but not limited to, soil, and
groundwater conditions. To the best of Seller's knowledge,
there is no proceeding or inquiry by any governmental
authority with respect to the presence of Hazardous
Materials on the Entire Property or the migration of
Hazardous Materials from or to other property. Buyer agrees
that Seller will have no liability of any type to Buyer or
Buyer's successors, assigns, or affiliates in connection
with any Hazardous Materials on or in connection with the
Entire Property either before or after the Closing Date,
except such Hazardous Materials on or in connection with the
Entire Property arising out of Seller's gross negligence or
intentional misconduct. If Seller shall receive any notice
to the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(e) Buyer agrees that it shall be purchasing the Property
in its then present condition, as is, where is, and Seller
has no obligations to construct or repair any improvements
thereon or to perform any other act regarding the Property,
except as expressly provided herein.
(f) Buyer acknowledges that, having been given the
opportunity to inspect the Entire Property and such
financial information on the Lessee and Guarantors of the
Lease as Buyer or its advisors shall request, if in Seller's
possession, Buyer is relying solely on its own investigation
of the Property and not on any information provided by
Seller or to be provided except as set forth herein. Buyer
further acknowledges that the information provided and to be
provided by Seller with respect to the Property, the Entire
Property
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
and to the Lessee and Guarantors of Lease was obtained from
a variety of sources and Seller neither (a) has made
independent investigation or verification of such
information, or (b) makes any representations as to the
accuracy or completeness of such information except as
herein set forth. The sale of the Property as provided for
herein is made on an "AS IS" basis, and Buyer expressly
acknowledges that, in consideration of the agreements of
Seller herein, except as otherwise specified herein in
paragraph 11(a) and (b) above and this paragraph 12, Seller
makes no Warranty or representation, Express or Implied, or
arising by operation of law, including, but not limited to,
any warranty of condition, habitability, tenantability,
suitability for commercial purposes, merchantability, or
fitness for a particular purpose, in respect of the
Property.
The provisions (d) - (f) above shall survive Closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into
escrow an executed special warranty deed warranting title
against lawful claims by, through, or under a conveyance
from Seller, but not further or otherwise, conveying
insurable title of the Property to Buyer, subject to the
exceptions contained in paragraph 8 above.
(b) On or before the closing date, Buyer will deposit into
escrow: the balance of the purchase price when required
under Section 4; any additional funds required of Buyer,
(pursuant to this agreement or any other agreement executed
by Buyer) to close escrow. Both parties will sign and
deliver to the escrow holder any other documents reasonably
required by the escrow holder to close escrow.
(c) On the closing date, if escrow is in a position to
close, the escrow holder will: record the deed in the
official records of the county where the Property is
located; cause the title company to commit to issue the
title policy; immediately deliver to Seller the portion of
the purchase price deposited into escrow by cashier's check
or wire transfer (less debits and prorations, if any);
deliver to Seller and Buyer a signed counterpart of the
escrow holder's certified closing statement and take all
other actions necessary to close escrow.
14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights
and claims and Seller will be relieved of all obligations and
will be entitled to retain all monies heretofore paid by the
Buyer. In addition, Seller shall retain all remedies available
to Seller at law or in equity.
If Seller shall default, Buyer irrevocably waives any rights
to file a lis pendens, a specific performance action or any other
claim, action or proceeding of any type in connection with the
Property or this or any other transaction involving the Property,
and will not do anything to affect title to the Property or
hinder, delay or prevent any other sale, lease or other
transaction involving the Property (any and all of which will be
null and void), unless: it has paid the First Payment, deposited
the balance of the Second Payment for the purchase price into
escrow, performed all of its other obligations and satisfied all
conditions under this Agreement, and unconditionally notified
Seller that it stands ready to tender full performance, purchase
the Property and close escrow as per this Agreement, regardless
of any alleged default or misconduct by Seller. Provided,
however, that in no event shall Seller be liable for any actual,
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. BUYER'S REPRESENTATIONS AND WARRANTIES.
a. Buyer represents and warrants to Seller as follows:
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (b) any
order of any court or other agency of government having
jurisdiction hereof, or (c) any agreement or instrument to
which Buyer is a party or by which Buyer is bound.
16. DAMAGES, DESTRUCTION AND EMINENT DOMAIN.
(a) If, prior to closing, the Property or any part thereof
should be destroyed or further damaged by fire, the
elements, or any cause, due to events occurring subsequent
to the date of this Agreement to the extent that the cost of
repair exceeds $10,000.00, this Agreement shall become null
and void, at Buyer's option exercised, if at all, by written
notice to Seller within ten (10) days after Buyer has
received written notice from Seller of said destruction or
damage. Seller, however, shall have the right to adjust or
settle any insured loss until (i) all contingencies set
forth in Paragraph 6 hereof have been satisfied, or waived;
and (ii) any ten-day period provided for above in this
Subparagraph 16a for Buyer to elect to terminate this
Agreement has expired or Buyer has, by written notice to
Seller, waived Buyer's right to terminate this Agreement.
If Buyer elects to proceed and to consummate the purchase
despite said damage or destruction, there shall be no
reduction in or abatement of the purchase price, and Seller
shall assign to Buyer the Seller's right, title, and
interest in and to all insurance proceeds (pro-rata in
relation to the Entire Property) resulting from said damage
or destruction to the extent that the same are payable with
respect to damage to the Property, subject to rights of any
Tenant of the Entire Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. BUYER'S 1031 TAX FREE EXCHANGE.
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
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 Starker Services, Inc.
which will act as Accommodator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby
Starker Services, Inc. will be an independent third party
purchasing the ownership interest in subject property from Seller
and selling the ownership interest in subject property to Buyer
under the same terms and conditions as documented in this
Purchase Agreement. Buyer asks the Seller, and Seller agrees to
cooperate in the perfection of such an exchange if at no
additional cost or expense to Seller or delay in time. Buyer
hereby indemnifies and holds Seller harmless from any claims
and/or actions resulting from said exchange. Pursuant to the
direction of Starker Services, Inc., Seller will deed the
Property to Buyer.
18. CANCELLATION
If any party elects to cancel this Contract because of any
breach by another party or because escrow fails to close by
the agreed date, the party electing to cancel shall deliver
to escrow agent a notice containing the address of the party
in breach and stating that this Contract shall be cancelled
unless the breach is cured within 13 days following the
delivery of the notice to the escrow agent. Within three
days after receipt of such notice, the escrow agent shall
send it by United States Mail to the party in breach at the
address contained in the Notice and no further notice shall
be required. If the breach is not cured within the 13 days
following the delivery of the notice to the escrow agent,
this Contract shall be cancelled.
19. MISCELLANEOUS.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the
essence. This Agreement will not be construed for or
against a party whether or not that party has drafted this
Agreement. If there is any action or proceeding between the
parties relating to this Agreement the prevailing party will
be entitled to recover attorney's fees and costs. This is
an integrated agreement containing all agreements of the
parties about the Property and the other matters described,
and it supersedes any other agreements or understandings.
Exhibits attached to this Agreement are incorporated into
this Agreement.
(b) If this escrow has not closed by October 30, 1999,
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage 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.
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
If to Seller:
Attention: Robert P. Johnson
AEI Income & Growth Fund XXI Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
Beryl B. Barrett, Trustee
The Barrett Family Trust
Dated 4-14-94
177 Boynton Road
Layton, UT 84040
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: The Barrett Family Trust Dated 4-14-94
By: /s/ Beryl B Barrett, Trustee
Beryl B. Barrett, Trustee
SELLER: AEI Income & Growth Fund XXI Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate
general partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
Buyer Initial: /s/ BB
Purchase Agreement for Arby's Restaurant - Montgomery, AL
EXHIBIT "A"
Commencing at the Northeast corner of the Southeast Quarter
of the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama, thence
West a distance of 535.66 feet, thence North 328.83 feet to
the Southwest corner of Lot 1-T, of the Taco Bell Plat No.
3, Zelda Road as recorded in the Montgomery County Probate
Office, said point being on the curve of the Norterly right
of way of Zelda Roas, said curve having a radius of 392.86
feet, a central angle of 30 13' 45" and a chord of 204.88
feet with a chord bearing of S 59 16' 00" E, thence
southeasterly along said curve to the end of said curve,
said point being the Southeast corner of said Lot 1-T, also
being the point of beginning. Thence N 39 28' 53" E, from
the point of beginning along the southeasterly line of said
Lot 1-T, a distance of 152.21 feet to an iron pin found on
the southerly right of way of Interstate Hiwhway I-85;
thence S 52 30' 39" E, along the southerly right of way of
Interstate Highway I-85 a distance of 311.90 feet to a found
iron pin; thence S 74 07' 41" W a distance of 270.89 feet to
a found iron pin on the northerly right of way of Zelda
Road; thence N 20 20' 05" W along the Northerly right of way
of Zelda Road a distance of 28.41 feet to the beginning of
the curve of the northerly right of way of Zelda Road, said
curve having a radius of 392.86 feet, a central angle of 20
38' 00" and a chord of 140.71 feet with a chord bearing of N
31 38' 47" W; thence Northwesterly along said curve to the
end of said curve, said point being the southeast corner of
said Lot 1-T, and also being the point of beginning. The
said tract of land is located in the Northeast Quarter of
the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama.
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Arby's Restaurant - Montgomery, AL)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 22nd day of October, 1999, by and
between Beryl B. Barrett, Trustee of The Barrett Family Trust
Dated 4-14-94, (hereinafter called "Barrett") and AEI Income &
Growth Fund XXI Limited Partnership (hereinafter called "Fund
XXI") Barrett, Fund XXI (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 XXI presently owns an undivided 2.6811% interest in
and to,and Barrett owns an undivided 21.5614% interest in and to,
and VTA owns an undivided 21.5614% interest in and to, and
Roland Terry owns an undivided 20.3540% interest in and to and
the Catharine C. Whittenburg Testamentary Trust for J. A.
Whittenburg IV or Assigns presently owns an undivided 21.5614%
interest in and to, and the Cheung Living Trust Dated July 27,
1989 presently owns an undivided 12.2807% interest in and to the
land, situated in the City of Montgomery, County of Montgomery,
and State of AL, (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 Barrett's interest
by Fund XXI; 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 Barrett 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 XXI, or its designated agent, successors or
assigns. Provided, however, if Fund XXI shall sell all of its
interest in the Premises, the duties and obligations of Fund XXI
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 XXI 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.
Barrett hereto hereby designates Fund XXI as its sole and
exclusive agent to deal with, and Fund XXI retains the sole right
to deal with, any property agent or tenant and to negotiate and
enter into, on terms and provisions satisfactory to Fund XXI,
monitor, execute and enforce the terms of leases of space within
the Premises, including but not limited to any amendments,
consents to assignment, sublet, releases or modifications to
leases or guarantees of lease or easements affecting the
Premises, on behalf of Barrett As long as Fund XXI owns an
interest in the Premises, only Fund XXI may obligate Barrett with
respect to any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XXI agrees to
require any lessee of the Premises to name Barrett as an insured
or additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XXI shall use
its best efforts to obtain
Co-Tenant Initial: /s/ BB
Co-Tenancy Agreement for Arby's - Montgomery, AL
endorsements adding Co-Tenants to said policies from lessee
within 30 days of commencement of this agreement. In any event,
Fund XXI shall distribute any insurance proceeds it may receive,
to the extent consistent with any lease on the Premises, to the
Co-Tenants in proportion to their respective ownership of the
Premises.
2. Income and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XXI may offset
against, pay to itself and deduct from any payment due to Barrett
under this Agreement, and may pay to itself the amount of
Barrett's share of any reasonable expenses of the Premises which
are not paid by Barrett to Fund XXI or its assigns, within ten
(10) days after demand by Fund XXI. In the event there is
insufficient operating income from which to deduct Barrett's
unpaid share of operating expenses, Fund XXI 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.
Barrett has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XXI in the amount
of $700.00 for the expenses, direct and indirect, incurred by
Fund XXI in providing Barrett with quarterly accounting and
distributions of Barrett's share of net income and for tracking,
reporting and assessing the calculation of Barrett's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Barrett
authorizes Fund XXI to deduct such amount from Barrett's share of
revenue from the Premises. Barrett may terminate this agreement
in this paragraph respecting accounting and distributions at any
time and attempt to collect its share of rental income directly
from the tenant; however, enforcement of all other provisions of
the lease remains the sole right of Fund XXI pursuant to Section
1 hereof. Fund XXI may terminate its obligation under this
paragraph upon 30 days notice to Barrett prior to the end of each
anniversary hereof, unless agreed in writing to the contrary.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XXI'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 XXI 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, Barrett shall be
entitled to receive 21.5614% of all items of income and expense
generated by the Premises. Upon receipt of said accounting, if
the payments received by each Co-Tenant pursuant to this
Paragraph 3 do not equal, in the aggregate, the amounts which
each are entitled to receive proportional to its share of
ownership with respect to said calendar year pursuant to
Paragraph 2 hereof, an appropriate adjustment shall be made so
that each Co-Tenant receives the amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements, for which adequate reserves do not
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor from Fund XXI, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XXI sufficient to pay said net operating losses
and to provide necessary operating capital
Co-Tenant Initial: /s/ BB
Co-Tenancy Agreement for Arby's - Montgomery, AL
for the premises and to pay for said capital improvements,
repairs and/or replacements, all in proportion to their undivided
interests in and to the Premises.
5. Co-Tenants may, at any time, sell, finance, or otherwise
create a lien upon their interest in the Premises but only upon
their interest and not upon any part of the interest held, or
owned, by any other Co-Tenant. All Co-Tenants reserve the right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.
6. If any Co-Tenant shall be in default with respect to any of
its obligations hereunder, and if said default is not corrected
within thirty (30) days after receipt by said defaulting Co-
Tenant of written notice of said default, or within a reasonable
period if said default does not consist solely of a failure to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.
7. This Co-Tenancy agreement shall continue in full force and
effect and shall bind and inure to the benefit of the Co-Tenant
and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns until June 1,
2025 or upon the sale of the entire Premises in accordance with
the terms hereof and proper disbursement of the proceeds thereof,
whichever shall first occur. Unless specifically identified as a
personal contract right or obligation herein, this agreement
shall run with any interest in the Premises and with the title
thereto. Once any person, party or entity has ceased to have an
interest in fee in any portion of the Premises, it shall not be
bound by, subject to or benefit from the terms hereof; but its
heirs, executors, administrators, personal representatives,
successors or assigns, as the case may be, shall be substituted
for it hereunder. Barrett agrees to notify Fund XXI upon the
appointment of any successor trustee, or any amendment of The
Barrett Family Trust affecting the powers of the trustees to
manage or dispose of The Barrett Family Trust's interest in the
premises.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be given
to all known Co-Tenants and deemed given or served in accordance
with the provisions of this Agreement, if said notice or
elections addressed as follows;
If to Fund XXI:
AEI Income and Growth Fund XXI Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Barrett:
Beryl B. Barrett, Trustee
The Barrett Family Trust Dated 4-14-94
177 Boynton Road
Layton, UT 84040
If to VTA:
VTA Building Company
12825 Falcon Drive
Apple Valley, MN 55124
If to Cheung:
Co-Tenant Initial: /s/ BB
Co-Tenancy Agreement for Arby's - Montgomery, AL
Howard Owyoung Cheung
Rosemarie Cheung
10 Live Oak Court
Hillsborough, CA 94010
If to Whittenburg:
The Catharine C. Whittenburg Testamentary Trust
Post Office Box 26
Amarillo, TX 79105
If to Terry:
Roland Terry
154 Little Hendricks Pk #20612
Jasper, GA 30143
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.
REST OF PAGE INTENTIONALLY LEFT BLANK
Co-Tenant Initial: /s/ BB
Co-Tenancy Agreement for Arby's - Montgomery, AL
The Barrett Family Trust Dated 4-14-94
By: /s/ Beryl B Barrett
Beryl B. Barrett, Trustee
STATE OF UTAH) [notary seal]
) ss
COUNTY OF Davis)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 29 day of September,
1999, Beryl B Barrett who executed the foregoing instrument in
said capacity.
/s/ Teri L Short
Notary Public
Fund XXI AEI Income & Growth Fund XXI Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate general
partner
By: /s/ Robert P Johnson
Robert P. Johnson, President
State of Minnesota )
) ss.
County of Ramsey )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 22nd day of October,
1999, Robert P. Johnson, President of AEI Fund Management XXI,
Inc., corporate general partner of AEI Income & Growth Fund XXI
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/ Barbara J Kochevar
Notary Public
[notary seal]
Co-Tenant Initial: /s/ BB
Co-Tenancy Agreement for Arby's - Montgomery, AL
EXHIBIT "A"
Commencing at the Northeast corner of the Southeast Quarter
of the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama, thence
West a distance of 535.66 feet, thence North 328.83 feet to
the Southwest corner of Lot 1-T, of the Taco Bell Plat No.
3, Zelda Road as recorded in the Montgomery County Probate
Office, said point being on the curve of the Norterly right
of way of Zelda Roas, said curve having a radius of 392.86
feet, a central angle of 30 13' 45" and a chord of 204.88
feet with a chord bearing of S 59 16' 00" E, thence
southeasterly along said curve to the end of said curve,
said point being the Southeast corner of said Lot 1-T, also
being the point of beginning. Thence N 39 28' 53" E, from
the point of beginning along the southeasterly line of said
Lot 1-T, a distance of 152.21 feet to an iron pin found on
the southerly right of way of Interstate Hiwhway I-85;
thence S 52 30' 39" E, along the southerly right of way of
Interstate Highway I-85 a distance of 311.90 feet to a found
iron pin; thence S 74 07' 41" W a distance of 270.89 feet to
a found iron pin on the northerly right of way of Zelda
Road; thence N 20 20' 05" W along the Northerly right of way
of Zelda Road a distance of 28.41 feet to the beginning of
the curve of the northerly right of way of Zelda Road, said
curve having a radius of 392.86 feet, a central angle of 20
38' 00" and a chord of 140.71 feet with a chord bearing of N
31 38' 47" W; thence Northwesterly along said curve to the
end of said curve, said point being the southeast corner of
said Lot 1-T, and also being the point of beginning. The
said tract of land is located in the Northeast Quarter of
the Southwest Quarter of Section 16, Township 16 North,
Range 18 East, Montgomery City and County, Alabama.
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<NAME> AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
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<CURRENT-ASSETS> 908,516
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0
0
<COMMON> 0
<OTHER-SE> 17,582,159
<TOTAL-LIABILITY-AND-EQUITY> 18,006,431
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<NET-INCOME> 971,373
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