-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R1r5DTIbDrCvMk/krmRnZ/olujHE6Pkc4v7+LMG6EENekBL/S5OogizyCzCF+wv1 H8U5ZiwahcseyrPkiSk9+w== 0000785788-99-000016.txt : 19990813 0000785788-99-000016.hdr.sgml : 19990813 ACCESSION NUMBER: 0000785788-99-000016 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AEI INCOME & GROWTH FUND XXI LTD PARTNERSHIP CENTRAL INDEX KEY: 0000931755 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 411789725 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-85076 FILM NUMBER: 99684934 BUSINESS ADDRESS: STREET 1: 1300 MINNESOTA WORLD TRADE CENTER STREET 2: 30 EAST SEVENTH ST CITY: ST PAUL STATE: MN ZIP: 55101 BUSINESS PHONE: 6122277333 MAIL ADDRESS: STREET 1: 1300 MINNESOTA WORLD TRADE CENTER STREET 2: 30 EAST SEVENTH STREET CITY: ST PAUL STATE: MN ZIP: 55101 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of The Securities Exchange Act of 1934 For the Quarter Ended: June 30, 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 June 30, 1999 and December 31, 1998 Statements for the Periods ended June 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 AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP BALANCE SHEET JUNE 30, 1999 AND DECEMBER 31, 1998 (Unaudited) ASSETS 1999 1998 CURRENT ASSETS: Cash and Cash Equivalents $ 254,266 $ 557,646 Receivables 0 16,052 ----------- ----------- Total Current Assets 254,266 573,698 ----------- ----------- INVESTMENTS IN REAL ESTATE: Land 6,957,341 6,921,884 Buildings and Equipment 11,836,244 11,350,021 Construction in Progress 0 289,014 Property Acquisition Costs 0 10,782 Accumulated Depreciation (1,074,225) (816,805) ----------- ----------- Net Investments in Real Estate 17,719,360 17,754,896 ----------- ----------- Total Assets $17,973,626 $18,328,594 =========== =========== LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES: Payable to AEI Fund Management, Inc. $ 11,561 $ 54,136 Distributions Payable 390,971 451,171 Unearned Rent 24,431 0 ----------- ----------- Total Current Liabilities 426,963 505,307 ----------- ----------- PARTNERS' CAPITAL (DEFICIT): General Partners (33,719) (30,953) Limited Partners, $1,000 Unit Value; 24,000 Units authorized and issued; 23,829 Units outstanding 17,580,382 17,854,240 ----------- ----------- Total Partners' Capital 17,546,663 17,823,287 ----------- ----------- Total Liabilities and Partners' Capital $17,973,626 $18,328,594 =========== =========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP STATEMENT OF INCOME FOR THE PERIODS ENDED JUNE 30 (Unaudited) Three Months Ended Six Months Ended 6/30/99 6/30/98 6/30/99 6/30/98 INCOME: Rent $ 474,548 $ 414,491 $ 954,814 $ 794,545 Investment Income 1,516 53,809 6,601 126,242 ---------- ---------- ---------- ---------- Total Income 476,064 468,300 961,415 920,787 ---------- ---------- ---------- ---------- EXPENSES: Partnership Administration - Affiliates 60,531 62,471 117,977 129,131 Partnership Administration and Property Management - Unrelated Parties 19,145 29,609 44,276 63,641 Depreciation 127,918 107,804 257,420 200,625 ---------- ---------- ---------- ---------- Total Expenses 207,594 199,884 419,673 393,397 ---------- ---------- ---------- ---------- OPERATING INCOME 268,470 268,416 541,742 527,390 GAIN ON SALE OF REAL ESTATE 0 0 0 169,937 ---------- ---------- ---------- ---------- NET INCOME $ 268,470 $ 268,416 $ 541,742 $ 697,327 ========== ========== ========== ========== NET INCOME ALLOCATED: General Partners $ 2,685 $ 2,684 $ 5,418 $ 6,973 Limited Partners 265,785 265,732 536,324 690,354 ---------- ---------- ---------- ---------- $ 268,470 $ 268,416 $ 541,742 $ 697,327 ========== ========== ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT (23,829 weighted average Units outstanding in 1999 and 1998) $ 11.16 $ 11.15 $ 22.51 $ 28.97 ========== ========== ========== ========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED JUNE 30 (Unaudited) 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 541,742 $ 697,327 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 257,420 200,625 Gain on Sale of Real Estate 0 (169,937) Decrease in Receivables 16,052 162,677 Decrease in Payable to AEI Fund Management, Inc. (42,575) (5,196) Increase in Unearned Rent 24,431 100,206 ----------- ----------- Total Adjustments 255,328 288,375 ----------- ----------- Net Cash Provided By Operating Activities 797,070 985,702 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Investments in Real Estate (221,884) (1,927,989) Proceeds from Sale of Real Estate 0 635,663 ----------- ----------- Net Cash Used For Investing Activities (221,884) (1,292,326) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase (Decrease) in Distributions Payable (60,200) 156,409 Distributions to Partners (818,366) (969,698) ----------- ----------- Net Cash Used For Financing Activities (878,566) (813,289) ----------- ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS (303,380) (1,119,913) CASH AND CASH EQUIVALENTS, beginning of period 557,646 2,506,790 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 254,266 $ 1,386,877 =========== =========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE PERIODS ENDED JUNE 30 (Unaudited) Limited Partnership General Limited Units Partners Partners Total Outstanding BALANCE, December 31, 1997 $ (24,706) $18,472,657 $18,447,951 23,828.87 Distributions (9,697) (960,001) (969,698) Net Income 6,973 690,354 697,327 --------- ----------- ----------- ---------- BALANCE, June 30, 1998 $ (27,430) $18,203,010 $ 18,175,580 23,828.87 ========= =========== =========== ========== BALANCE, December 31, 1998 $ (30,953) $17,854,240 $17,823,287 23,828.87 Distributions (8,184) (810,182) (818,366) Net Income 5,418 536,324 541,742 --------- ----------- ----------- ---------- BALANCE, June 30, 1999 $ (33,719) $17,580,382 $17,546,663 23,828.87 ========= =========== =========== ========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS JUNE 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 six months ended June 30, 1998, the net gain was $169,937. Subsequent to June 30, 1999, the Partnership sold 41.9154% of its interest in the ArbyOs restaurant in two separate transactions to unrelated third parties. The Partnership received net sale proceeds of approximately $430,000 which resulted in a net gain of approximately $103,000. During the first six months of 1998, the Partnership distributed $241,683 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 $10.04 per Limited Partnership Unit. (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 six months ended June 30, 1999 and 1998, the Partnership recognized rental income of $954,814 and $794,545, respectively. During the same periods, the Partnership earned investment income of $6,601 and $126,242, respectively. In 1999, rental income increased primarily as a result of additional 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. 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. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) As of December 31, 1997, based on an analysis of market conditions in the area, it was determined the fair value of the Partnership's interest in the Media Play was approximately $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 six months ended June 30, 1999 and 1998, the Partnership paid Partnership administration expenses to affiliated parties of $117,977 and $129,131, 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 $44,276 and $63,641, 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 June 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. 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. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Liquidity and Capital Resources During the six months ended June 30, 1999, the Partnership's cash balances decreased $303,380 mainly as a result of cash used to purchase properties. Net cash provided by operating activities decreased from $985,702 in 1998 to $797,070 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 six months ended June 30, 1999 and 1998, the Partnership expended $221,884 and $1,927,989, 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 $- 0- and $635,663, 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 three months ended June 30, 1998, the net gain was $169,937. Subsequent to June 30, 1999, the Partnership sold 41.9154% of its interest in the ArbyOs restaurant in two separate transactions to unrelated third parties. The Partnership received net sale proceeds of approximately $430,000 which resulted in a net gain of approximately $103,000. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) During the first six months of 1998, the Partnership distributed $241,683 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 $10.04 per Limited Partnership Unit. 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. During 1999 and 1998, the Partnership did not redeem any Units from the Limited Partners. 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 PART II - OTHER INFORMATION (Continued) ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits - Description 10.1 Purchase Agreement dated July 20, 1999 between the Partnership and Catharine C. Whittenburg Testamentary Trust relating to the property at 2719 Zelda Road, Montgomery, Alabama. 10.2 Co-Tenancy Agreement dated July 27, 1999 between the Partnership and Catharine C. Whittenburg Testamentary Trust relating to the property at 2719 Zelda Road, Montgomery, Alabama. 10.3 Purchase Agreement dated July 27, 1999 between the Partnership and Terry Roland relating to the property at 2719 Zelda Road, Montgomery, Alabama. 10.4 Co-Tenancy Agreement dated July 28, 1999 between the Partnership and Terry Roland relating to the property at 2719 Zelda Road, Montgomery, Alabama. 27 Financial Data Schedule for period ended June 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: July 30, 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) EX-10.1 2 PURCHASE AGREEMENT Arby's Restaurant - Montgomery, AL This AGREEMENT, entered into effective as of the 20th of July, 1999. l. PARTIES. Seller is AEI Income & Growth Fund XXI Limited Partnership which owns an undivided 87.7193% interest in the fee title to that certain real property legally described in the attached Exhibit "A" (the "Entire Property") Buyer is The Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns ("Buyer"). Seller wishes to sell and Buyer wishes to buy a portion as Tenant in Common of Seller's interest in the Entire Property. 2. PROPERTY. The Property to be sold to Buyer in this transaction consists of an undivided 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 2, 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/ DEB /s/ JFT /s/ JAW IV 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/ DEB /s/ JFT /s/ JAW IV 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/ DEB /s/ JFT /s/ JAW IV 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/ DEB /s/ JFT /s/ JAW IV 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/ DEB /s/ JFT /s/ JAW IV 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. (iv) Buyer certifies that the office of the Trustee shall consist of five Trustees, any three of whom may act on any matter. 16. DAMAGES, DESTRUCTION AND EMINENT DOMAIN. (a) If, prior to closing, the Property or any part thereof should be destroyed or further damaged by fire, the elements, or any cause, due to events occurring subsequent to the date of this Agreement to the extent that the cost of repair exceeds $10,000.00, this Agreement shall become null and void, at Buyer's option exercised, if at all, by written notice to Seller within ten (10) days after Buyer has received written notice from Seller of said destruction or damage. Seller, however, shall have the right to adjust or settle any insured loss until (i) all contingencies set forth in Paragraph 6 hereof have been satisfied, or waived; and (ii) any ten-day period provided for above in this Subparagraph 16a for Buyer to elect to terminate this Agreement has expired or Buyer has, by written notice to Seller, waived Buyer's right to terminate this Agreement. If Buyer elects to proceed and to consummate the purchase despite said damage or destruction, there shall be no reduction in or abatement of the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to all insurance proceeds (pro-rata in relation to the Entire Property) resulting from said damage or destruction to the extent that the same are payable with respect to damage to the Property, subject to rights of any Tenant of the Entire Property. If the cost of repair is less than $10,000.00, Buyer shall be obligated to otherwise perform hereinunder with no adjustment to the Purchase Price, reduction or abatement, and Seller shall assign Seller's right, title and interest in and to all insurance proceeds pro-rata in relation to the Entire Property, subject to rights of any Tenant of the Entire Property. (b) If, prior to closing, the Property, or any part thereof, is taken by eminent domain, this Agreement shall become null and void, at Buyer's option. If Buyer elects to proceed and to consummate the purchase despite said taking, there shall be no reduction in, or abatement of, the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to any award made, or to be made, in the condemnation proceeding pro-rata in relation to the Entire Property, subject to rights of any Tenant of the Entire Property. In the event that this Agreement is terminated by Buyer as provided above in Subparagraph 16a or 16b, the First Payment shall be immediately returned to Buyer (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof). Buyer Initial: /s/ DEB /s/ JFT /s/ JAW IV Purchase Agreement for Arby's Restaurant-Montgomery, AL 17. BUYER'S 1031 TAX FREE EXCHANGE. While Seller acknowledges that Buyer is purchasing the Property as "replacement property" to accomplish a tax free exchange, Buyer acknowledges that Seller has made no representations, warranties, or agreements to Buyer or Buyer's agents that the transaction contemplated by the Agreement will qualify for such tax treatment, nor has there been any reliance thereon by Buyer respecting the legal or tax implications of the transactions contemplated hereby. Buyer further represents that it has sought and obtained such third party advice and counsel as it deems necessary in regards to the tax implications of this transaction. Buyer wishes to novate/assign the ownership rights and interest of this Purchase Agreement to Amarillo National Bank will act as Accommodator to perfect the 1031 exchange by preparing an agreement of exchange of Real Property whereby Amarillo National Bank 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 Amarillo National Bank, 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 2, 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. Buyer Initial: /s/ DEB /s/ JFT /s/ JAW IV Purchase Agreement for Arby's Restaurant-Montgomery, AL (d) All notices from either of the parties hereto to the other shall be in writing and shall be considered to have been duly given or served if sent by first class certified mail, return receipt requested, postage prepaid, or by a nationally recognized courier service guaranteeing overnight delivery to the party at his or its address set forth below, or to such other address as such party may hereafter designate by written notice to the other party. If to Seller: Attention: Robert P. Johnson AEI Institutional Net Lease Fund '93 Limited Partnership 1300 Minnesota World Trade Center 30 E. 7th Street St. Paul, MN 55101 If to Buyer: The Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns Post Office Box 26 Amarillo, TX 79105 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. Buyer Initial: /s/ DEB /s/ JFT /s/ JAW IV Purchase Agreement for Arby's Restaurant-Montgomery, AL IN WITNESS WHEREOF, the Seller and Buyer have executed this Ageement effective as of the day and year above first written. BUYER: The Catharine C. Whittenburg Testamentary Trust for J.A. Whittenburg IV or Asigns By: /s/ Diane E Bowes A Trustee Diane E Bowes (Type or Print Name) By: /s/ Jack F Turner A Trustee Jack F Turner (Type or Print Name) By J.A. Whittenburg IV A Trustee J. A. Whittenburg IV (Type or Print Name) By: A Trustee (Type or Print Name) By: A Trustee (Type or Print Name) Buyer Initial: /s/ DEB /s/ JFT /s/ JAW IV Purchase Agreement for Arby's Restaurant-Montgomery, AL 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 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 Northerly right of way of Zelda Road, 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 Highway 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. EX-10.2 3 PROPERTY CO-TENANCY OWNERSHIP AGREEMENT (Arby's Restaurant - Montgomery, AL) THIS CO-TENANCY AGREEMENT, Made and entered into as of the 27th day of July, 1999, by and between The Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns as joint tenants, (hereinafter called "Whittenburg"), and AEI Income & Growth Fund XXI Limited Partnership (hereinafter called "Fund XXI") Whittenburg, 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 66.1579% interest in and to, and Whittenburg 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 Whittenburg'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 Whittenburg 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. Whittenburg 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 Whittenburg As long as Fund XXI owns an interest in the Premises, only Fund XXI may obligate Whittenburg 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 Whittenburg 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/ DEB /s/ JFT /s/ JAW IV 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 Whittenburg under this Agreement, and may pay to itself the amount of Whittenburg's share of any reasonable expenses of the Premises which are not paid by Whittenburg 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 Whittenburg'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. Whittenburg has no requirement to, but has, nonetheless elected to retain, and agrees to annually reimburse, Fund XXI in the amount of $ 826 [changed to $700 to conform to the facts /s/ DEB /s/ JFT /s/ JAW IV /s/ RPJ] for the expenses, direct and indirect, incurred by Fund XXI in providing Whittenburg with quarterly accounting and distributions of Whittenburg's share of net income and for tracking, reporting and assessing the calculation of Whittenburg's share of operating expenses incurred from the Premises. This invoice amount shall be pro-rated for partial years and Whittenburg authorizes Fund XXI to deduct such amount from Whittenburg's share of revenue from the Premises. Whittenburg 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 Whittenburg 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, Whittenburg 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/ DEB /s/ JFT /s/ JAW IV 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. Whittenburg agrees to notify Fund XXI upon the appointment of any successor trustee, or any amendment of the Catharine C Whittenburg Testamentary Trust affecting the powers of the trustees to manage or dispose of the Catharine C Whittenburg Testamentary 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 Cheung: Howard Owyoung Cheung Rosemarie Cheung 10 Live Oak Court Hillsborough, CA 94010 Co-Tenant Initial: /s/ DEB /s/ JFT /s/ JAW IV Co-Tenancy Agreement for Arby's-Montgomery, AL If to Whittenburg: The Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns Post Office Box 26 Amarillo, TX 79105 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. 12. Whittenburg certifies that the office of the Trustee shall consist of five Trustees, any three of whom may act on any matter. Co-Tenant Initial: /s/ DEB /s/ JFT /s/ JAW IV Co-Tenancy Agreement for Arby's-Montgomery, AL The Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns By:/s/ Diane E Bowes A Trustee Diane E Bowes (Type or Print Name) STATE OF TEXAS) ) ss COUNTY OF POTTER) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 20th day of July, 1999, Diane E Bowes who executed the foregoing instrument in said capacity. /s/ Carol E Scott Notary Public [notary seal] and By:/s/ Jack F Turner A Trustee Jack F Turner (Type or Print Name) STATE OF TEXAS) ) ss COUNTY OF POTTER) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 20th day of July, 1999, Jack F Turner who executed the foregoing instrument in said capacity. /s/ Carol E Scott Notary Public [notary seal] Co-Tenant Initial: /s/ DEB /s/ JFT /s/ JAW IV Co-Tenancy Agreement for Arby's-Montgomery, AL and By:/s/ J.A. Whittenburg IV A Trustee J.A. Whittenburg IV (Type or Print Name) STATE OF ) ) ss COUNTY OF ) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this _______ day of ________________, 1999, ___________ who executed the foregoing instrument in said capacity. Notary Public and By: A Trustee (Type or Print Name) STATE OF ) ) ss COUNTY OF ) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this _______ day of ________________, 1999, ___________ who executed the foregoing instrument in said capacity. Notary Public and By: A Trustee (Type or Print Name) STATE OF ) ) ss COUNTY OF ) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this _______ day of ________________, 1999, ___________ who executed the foregoing instrument in said capacity. Notary Public Co-Tenant Initial: /s/ DEB /s/ JFT /s/ JAW IV 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 27th day of July, 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/ DEB /s/ JFT /s/ JAW IV 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 Northerly right of way of Zelda Road, 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 Highway 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. EX-10.3 4 PURCHASE AGREEMENT Arby's Restaurant - Montgomery, AL This AGREEMENT, entered into effective as of the 27 of July, 1999. l. PARTIES. Seller is AEI Income & Growth Fund XXI Limited Partnership which owns an undivided 66.1579% interest in the fee title to that certain real property legally described in the attached Exhibit "A" (the "Entire Property") Buyer is Roland Terry ("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 20.3540 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 $236,000, all cash. 4. TERMS. The purchase price for the Property will be paid by Buyer as follows: Buyer will deposit the purchase price, $236,000, into escrow in sufficient time to allow escrow to close on the closing date. 5. CLOSING DATE. Escrow shall close on or before August 5, 1999. 6. DUE DILIGENCE. Buyer will have until the expiration of the tenth business day (The "Review Period") after delivery of each of following items, to be supplied by Seller, to conduct all of its inspections and due diligence and satisfy itself regarding each item, the Property, and this transaction. Buyer agrees to indemnify and hold Seller harmless for any loss or damage to the Entire Property or persons caused by Buyer or its agents arising out of such physical inspections of the Entire Property. (a) The original and one copy of a title insurance commitment for an Owner's Title insurance policy (see paragraph 8 below). (b) A copy of a Certificate of Occupancy or other such document certifying completion and granting permission to permanently occupy the improvements on the Entire Property as are in Seller's possession. (c) A copy of an "as built" survey of the Entire Property done concurrent with Seller's acquisition of the Property. (d) Lease (as further set forth in paragraph 11(a) below) of the Entire Property showing occupancy date, lease expiration date, rent, and Guarantys, if any, accompanied by such tenant financial statements as may have been provided most recently to Seller by the Tenant and/or Guarantors. It is a contingency upon Seller's obligations hereunder that two (2) copies of Co-Tenancy Agreement in the form attached hereto duly executed by Buyer and 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 Buyer Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL 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 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 Buyer Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL 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 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. Buyer Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL 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, 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 Buyer Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL 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 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 Buyer Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL 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 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 Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL Buyer wishes to novate/assign the ownership rights and interest of this Purchase Agreement to Metro Exchange Corporation will act as Accommodator to perfect the 1031 exchange by preparing an agreement of exchange of Real Property whereby Metro Exchange Corporation will be an independent third party purchasing the ownership interest in subject property from Seller and selling the ownership interest in subject property to Buyer under the same terms and conditions as documented in this Purchase Agreement. Buyer asks the Seller, and Seller agrees to cooperate in the perfection of such an exchange if at no additional cost or expense to Seller or delay in time. Buyer hereby indemnifies and holds Seller harmless from any claims and/or actions resulting from said exchange. Pursuant to the direction of Metro Exchange Corporation, Seller will deed the property to Buyer. 18. CANCELLATION If any party elects to cancel this Contract because of any breach by another party or because escrow fails to close by the agreed date, the party electing to cancel shall deliver to escrow agent a notice containing the address of the party in breach and stating that this Contract shall be cancelled unless the breach is cured within 13 days following the delivery of the notice to the escrow agent. Within three days after receipt of such notice, the escrow agent shall send it by United States Mail to the party in breach at the address contained in the Notice and no further notice shall be required. If the breach is not cured within the 13 days following the delivery of the notice to the escrow agent, this Contract shall be cancelled. 19. MISCELLANEOUS. (a) This Agreement may be amended only by written agreement signed by both Seller and Buyer, and all waivers must be in writing and signed by the waiving party. Time is of the essence. This Agreement will not be construed for or against a party whether or not that party has drafted this Agreement. If there is any action or proceeding between the parties relating to this Agreement the prevailing party will be entitled to recover attorney's fees and costs. This is an integrated agreement containing all agreements of the parties about the Property and the other matters described, and it supersedes any other agreements or understandings. Exhibits attached to this Agreement are incorporated into this Agreement. (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/ RT 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: Roland Terry 154 Little Hendricks Pk #20612 Jasper, GA 30143 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: Roland Terry By:/s/ Roland Terry Roland Terry Buyer Initial: /s/ RT Purchase Agreement for Arby's Restaurant-Montgomery, AL 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/ RT 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 Northerly right of way of Zelda Road, 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 Highway 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. EX-10.4 5 PROPERTY CO-TENANCY OWNERSHIP AGREEMENT (Arby's Restaurant - Montgomery, AL) THIS CO-TENANCY AGREEMENT, Made and entered into as of the 28th day of July, 1999, by and between Roland Terry, (hereinafter called "Terry") and AEI Income & Growth Fund XXI Limited Partnership (hereinafter called "Fund XXI") Terry, 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 45.8039% 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 Terry'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 Terry 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. Terry 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 Terry As long as Fund XXI owns an interest in the Premises, only Fund XXI may obligate Terry 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 Terry 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 endorsements adding Co-Tenants to said policies from lessee within 30 days of commencement Co-Tenant Initial: /s/ RT Co-Tenancy Agreement for Arby's-Montgomery 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 Terry under this Agreement, and may pay to itself the amount of Terry's share of any reasonable expenses of the Premises which are not paid by Terry 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 Terry'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. Terry has no requirement to, but has, nonetheless elected to retain, and agrees to annually reimburse, Fund XXI in the amount of $ 826 for the expenses, direct and indirect, incurred by Fund XXI in providing Terry with quarterly accounting and distributions of Terry's share of net income and for tracking, reporting and assessing the calculation of Terry's share of operating expenses incurred from the Premises. This invoice amount shall be pro-rated for partial years and Terry authorizes Fund XXI to deduct such amount from Terry's share of revenue from the Premises. Terry 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 Terry 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, Terry shall be entitled to receive 20.3540% 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 for the premises and to pay for said capital improvements, repairs and/or replacements, all in proportion to their undivided interests in and to the Premises. Co-Tenant Initial: /s/ RT Co-Tenancy Agreement for Arby's-Montgomery 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 Cheung: Howard Owyoung Cheung Rosemarie Cheung 10 Live Oak Court Hillsborough, CA 94010 If to Whittenburg: Diane E. Bowes Jack F. Turner J. A. Whittenburg III K. K. Davidson J. A. Whittenburg IV Post Office Box 26 Amarillo, TX 79105 Co-Tenant Initial: /s/ RT Co-Tenancy Agreement for Arby's-Montgomery 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/ RT Co-Tenancy Agreement for Arby's-Montgomery TERRY ROLAND TERRY By:/s/ Roland Terry Roland Terry STATE OF Georgia) ) ss COUNTY OF Cherokee ) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 27 day of July, 1999, Roland Terry who executed the foregoing instrument in said capacity. /s/ Angela J Garland Notary Public [notary seal] Co-Tenant Initial: /s/ RT Co-Tenancy Agreement for Arby's-Montgomery 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 28th day of July, 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] 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 Northerly right of way of Zelda Road, 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 Highway 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. EX-27 6
5 0000931755 AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP 6-MOS DEC-31-1999 JUN-30-1999 254,266 0 0 0 0 254,266 18,793,585 (1,074,225) 17,973,626 426,963 0 0 0 0 17,546,663 17,973,626 0 961,415 0 419,673 0 0 0 541,742 0 541,742 0 0 0 541,742 22.51 22.51
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