-----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, DtXEZhOoG6fI/gz/qYN8LscOB8t6+9k41OVeMk0J7x4JUAWiDu5O1kiOXQ6IHYJr 0y5aKpXeKqT3Zf1haIZjvQ== 0000793631-99-000035.txt : 19991115 0000793631-99-000035.hdr.sgml : 19991115 ACCESSION NUMBER: 0000793631-99-000035 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 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: 99746642 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: September 30, 1999 Commission file number: 0-29274 AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP (Exact Name of Small Business Issuer as Specified in its Charter) State of Minnesota 41-1789725 (State or other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1300 Minnesota World Trade Center, St. Paul, Minnesota 55101 (Address of Principal Executive Offices) (651) 227-7333 (Issuer's telephone number) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No Transitional Small Business Disclosure Format: Yes No [X] AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP INDEX PART I. Financial Information Item 1. Balance Sheet as of September 30, 1999 and December 31, 1998 Statements for the Periods ended September 30, 1999 and 1998: Income Cash Flows Changes in Partners' Capital Notes to Financial Statements Item 2. Management's Discussion and Analysis PART II.Other Information Item 1. Legal Proceedings Item 2. Changes in Securities Item 3. Defaults Upon Senior Securities Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP BALANCE SHEET SEPTEMBER 30, 1999 AND DECEMBER 31, 1998 (Unaudited) ASSETS 1999 1998 CURRENT ASSETS: Cash and Cash Equivalents $ 908,516 $ 557,646 Receivables 0 16,052 ----------- ----------- Total Current Assets 908,516 573,698 ----------- ----------- INVESTMENTS IN REAL ESTATE: Land 6,719,763 6,921,884 Buildings and Equipment 11,528,125 11,350,021 Construction in Progress 0 289,014 Property Acquisition Costs 0 10,782 Accumulated Depreciation (1,149,973) (816,805) ----------- ----------- Net Investments in Real Estate 17,097,915 17,754,896 ----------- ----------- Total Assets $18,006,431 $18,328,594 =========== =========== LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES: Payable to AEI Fund Management, Inc. $ 33,301 $ 54,136 Distributions Payable 390,971 451,171 ----------- ----------- Total Current Liabilities 424,272 505,307 ----------- ----------- PARTNERS' CAPITAL (DEFICIT): General Partners (33,364) (30,953) Limited Partners, $1,000 Unit Value; 24,000 Units authorized and issued; 23,829 Units outstanding 17,615,523 17,854,240 ----------- ----------- Total Partners' Capital 17,582,159 17,823,287 ----------- ----------- Total Liabilities and Partners' Capital $18,006,431 $18,328,594 =========== =========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP STATEMENT OF INCOME FOR THE PERIODS ENDED SEPTEMBER 30 (Unaudited) Three Months Ended Nine Months Ended 9/30/99 9/30/98 9/30/99 9/30/98 INCOME: Rent $ 465,581 $ 452,922 $1,420,395 $1,247,467 Investment Income 7,444 14,374 14,045 140,616 --------- --------- ---------- ---------- Total Income 473,025 467,296 1,434,440 1,388,083 --------- --------- ---------- ---------- EXPENSES: Partnership Administration - Affiliates 57,109 58,163 175,086 187,294 Partnership Administration and Property Management - Unrelated Parties 22,472 30,853 66,748 94,495 Depreciation 127,276 123,898 384,696 324,522 --------- --------- ---------- ---------- Total Expenses 206,857 212,914 626,530 606,311 --------- --------- ---------- ---------- OPERATING INCOME 266,168 254,382 807,910 781,772 GAIN ON SALE OF REAL ESTATE 163,463 65,440 163,463 235,377 --------- --------- ---------- ---------- NET INCOME $ 429,631 $ 319,822 $ 971,373 $1,017,149 ========= ========= ========== ========== NET INCOME ALLOCATED: General Partners $ 4,296 $ 3,198 $ 9,714 $ 10,171 Limited Partners 425,335 316,624 961,659 1,006,978 --------- --------- ---------- ---------- $ 429,631 $ 319,822 $ 971,373 $1,017,149 ========= ========= ========== ========== NET INCOME PER LIMITED PARTNERSHIP UNIT (23,829 weighted average Units outstanding in 1999 and 1998) $ 17.85 $ 13.29 $ 40.36 $ 42.26 ========= ========= ========== ========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS FOR THE PERIODS ENDED SEPTEMBER 30 (Unaudited) 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 971,373 $ 1,017,149 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation 384,696 324,522 Gain on Sale of Real Estate (163,463) (235,377) Decrease in Receivables 16,052 159,343 Decrease in Payable to AEI Fund Management, Inc. (20,835) (33,175) Increase in Unearned Rent 0 24,200 ----------- ----------- Total Adjustments 216,450 239,513 ----------- ----------- Net Cash Provided By Operating Activities 1,187,823 1,256,662 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Investments in Real Estate (221,884) (2,475,090) Proceeds from Sale of Real Estate 657,632 862,718 ----------- ----------- Net Cash Used For Investing Activities 435,748 (1,612,372) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase (Decrease) in Distributions Payable (60,200) 156,409 Distributions to Partners (1,212,501) (1,454,547) ----------- ----------- Net Cash Used For Financing Activities (1,272,701) (1,298,138) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 350,870 (1,653,848) CASH AND CASH EQUIVALENTS, beginning of period 557,646 2,506,790 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 908,516 $ 852,942 =========== =========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE PERIODS ENDED SEPTEMBER 30 (Unaudited) Limited Partnership General Limited Units Partners Partners Total Outstanding BALANCE, December 31, 1997 $(24,706) $18,472,657 $18,447,951 23,828.87 Distributions (14,546) (1,440,001) (1,454,547) Net Income 10,171 1,006,978 1,017,149 -------- ----------- ----------- ---------- BALANCE, September 30, 1998 $(29,081) $18,039,634 $18,010,553 23,828.87 ======== =========== =========== ========== BALANCE, December 31, 1998 $(30,953) $17,854,240 $17,823,287 23,828.87 Distributions (12,125) (1,200,376) (1,212,501) Net Income 9,714 961,659 971,373 -------- ----------- ----------- ---------- BALANCE, September 30, 1999 $(33,364) $17,615,523 $17,582,159 23,828.87 ======== =========== =========== ========== The accompanying Notes to Financial Statements are an integral part of this statement. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1999 (Unaudited) (1) The condensed statements included herein have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results of operations for the interim period, on a basis consistent with the annual audited statements. The adjustments made to these condensed statements consist only of normal recurring adjustments. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Partnership believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the summary of significant accounting policies and notes thereto included in the Partnership's latest annual report on Form 10-KSB. (2) Organization - AEI Income & Growth Fund XXI Limited Partnership (Partnership) was formed to acquire and lease commercial properties to operating tenants. The Partnership's operations are managed by AEI Fund Management XXI, Inc. (AFM), the Managing General Partner of the Partnership. Robert P. Johnson, the President and sole shareholder of AFM, serves as the Individual General Partner of the Partnership. An affiliate of AFM, AEI Fund Management, Inc. (AEI), performs the administrative and operating functions for the Partnership. The terms of the Partnership offering call for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer. The Partnership commenced operations on April 14, 1995 when minimum subscriptions of 1,500 Limited Partnership Units ($1,500,000) were accepted. On January 31, 1997, the Partnership offering terminated when the maximum subscription limit of 24,000 Limited Partnership Units ($24,000,000) was reached. Under the terms of the Limited Partnership Agreement, the Limited Partners and General Partners contributed funds of $24,000,000 and $1,000, respectively. During the operation of the Partnership, any Net Cash Flow, as defined, which the General Partners determine to distribute will be distributed 90% to the Limited Partners and 10% to the General Partners; provided, however, that such distributions to the General Partners will be subordinated to the Limited Partners first receiving an annual, noncumulative distribution of Net Cash Flow equal to 10% of their Adjusted Capital Contribution, as defined, and, provided further, that in no event will the General Partners receive less than 1% of such Net Cash Flow per annum. Distributions to Limited Partners will be made pro rata by Units. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Continued) (2) Organization - (Continued) Any Net Proceeds of Sale, as defined, from the sale or financing of the Partnership's properties which the General Partners determine to distribute will, after provisions for debts and reserves, be paid in the following manner: (i) first, 99% to the Limited Partners and 1% to the General Partners until the Limited Partners receive an amount equal to: (a) their Adjusted Capital Contribution plus (b) an amount equal to 10% of their Adjusted Capital Contribution per annum, cumulative but not compounded, to the extent not previously distributed from Net Cash Flow; (ii) any remaining balance will be distributed 90% to the Limited Partners and 10% to the General Partners. Distributions to the Limited Partners will be made pro rata by Units. For tax purposes, profits from operations, other than profits attributable to the sale, exchange, financing, refinancing or other disposition of the Partnership's property, will be allocated first in the same ratio in which, and to the extent, Net Cash Flow is distributed to the Partners for such year. Any additional profits will be allocated in the same ratio as the last dollar of Net Cash Flow is distributed. Net losses from operations will be allocated 99% to the Limited Partners and 1% to the General Partners. For tax purposes, profits arising from the sale, financing, or other disposition of the Partnership's property will be allocated in accordance with the Partnership Agreement as follows: (i) first, to those partners with deficit balances in their capital accounts in an amount equal to the sum of such deficit balances; (ii) second, 99% to the Limited Partners and 1% to the General Partners until the aggregate balance in the Limited Partners' capital accounts equals the sum of the Limited Partners' Adjusted Capital Contributions plus an amount equal to 10% of their Adjusted Capital Contributions per annum, cumulative but not compounded, to the extent not previously allocated; (iii) third, the balance of any remaining gain will then be allocated 90% to the Limited Partners and 10% to the General Partners. Losses will be allocated 98% to the Limited Partners and 2% to the General Partners. The General Partners are not required to currently fund a deficit capital balance. Upon liquidation of the Partnership or withdrawal by a General Partner, the General Partners will contribute to the Partnership an amount equal to the lesser of the deficit balances in their capital accounts or 1% of total Limited Partners' and General Partners' capital contributions. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Continued) (3) Investments in Real Estate - On December 21, 1995, the Partnership purchased a 34.0% interest in a Media Play retail store in Apple Valley, Minnesota for $1,414,060. The property was leased to The Musicland Group, Inc. (MGI) under a Lease Agreement with a primary term of 18 years and annual rental payments of $139,587. In December, 1996, the Partnership and MGI reached an agreement in which MGI would buy out and terminate the Lease Agreement by making a payment of $800,000, which was equal to approximately two years' rent. The Partnership's share of such payment was $272,000. A specialist in commercial property leasing has been retained to locate a new tenant for the property. While the property is vacant, the Partnership is responsible for the real estate taxes and other costs required to maintain the property. As of December 31, 1997, based on an analysis of market conditions in the area, it was determined the fair value of the Partnership's interest in the Media Play was approximately $748,000. In the fourth quarter of 1997, a charge to operations for real estate impairment of $580,200 was recognized, which is the difference between the book value at December 31, 1997 of $1,328,200 and the estimated market value of $748,000. The charge was recorded against the cost of the land, building and equipment. On July 8, 1997, the Partnership purchased a parcel of land in Livonia, Michigan for $1,074,384. The land is leased to Champps under a Lease Agreement with a primary term of 20 years and annual rental payments of $75,207. Effective January 3, 1998, the annual rent was increased to $115,496. Simultaneously with the purchase of the land, the Partnership entered into a Development Financing Agreement under which the Partnership advanced funds to Champps for the construction of a Champps Americana restaurant on the site. Initially, the Partnership charged interest on the advances at a rate of 7.0%. Effective January 3, 1998, the interest rate was increased to 10.75%. On May 19, 1998, after the development was completed, the Lease Agreement was amended to require annual rental payments of $429,135. Total acquisition costs, including the cost of the land, were $4,150,061. On August 28, 1998, the Partnership purchased a 25% interest in a parcel of land in Centerville, Ohio for $462,747. The land is leased to Americana Dining Corporation (ADC) under a Lease Agreement with a primary term of 20 years and annual rental payments of $32,392. Effective December 25, 1998, the annual rent was increased to $48,588. Simultaneously with the purchase of the land, the Partnership entered into a Development Financing Agreement under which the Partnership advanced funds to ADC for the construction of a Champps Americana restaurant on the site. Initially, the Partnership charged interest on the advances at a rate of 7%. Effective December 25, 1998, the interest rate was increased to 10.5%. On January 27, 1999, after the development was completed, the Lease Agreement was amended to require annual rental payments of $101,365. The Partnership's share of the total acquisition costs, including the cost of the land, was $984,426. The remaining interests in the Fund property are owned by AEI Real Estate Fund XVII Limited Partnership, AEI Real Estate Fund XVIII Limited Partnership and AEI Income & Growth Fund XXII Limited Partnership, affiliates of the Partnership. AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Continued) (3) Investments in Real Estate - (Continued) Through December 31, 1998, the Partnership sold 40.7615% of its interest in the Champps Americana restaurant in Columbus, Ohio, in six separate transactions to unrelated third parties. The Partnership received total net sale proceeds of $1,383,508 which resulted in a total net gain of $341,928. The total cost and related accumulated depreciation of the interests sold was $1,087,502 and $45,922, respectively. For the nine months ended September 30, 1998, the net gain was $235,377. During the three months ended September 30, 1999, the Partnership sold 63.4768% of its interest in the Arby's restaurant in three separate transactions to unrelated third parties. The Partnership received total net sale proceeds of $657,632 which resulted in a total net gain of $163,463. The total cost and related accumulated depreciation of the interest sold was $545,697 and $51,528, respectively. Subsequent to September 30, 1999, the Partnership sold an additional 21.5614% of its interest in the ArbyOs restaurant to an unrelated third party. The Partnership received net sale proceeds of approximately $224,000 which resulted in a net gain of approximately $56,000. In September, 1999, the Partnership entered into an agreement to sell the Caribou Coffee store to an unrelated third party. On October 26, 1999, the sale closed with the Partnership receiving net sale proceeds of approximately $1,575,000 for its interest in the property, which resulted in a net gain of approximately $323,000. During the first nine months of 1999 and 1998, the Partnership distributed $19,895 and $348,252 of the net sale proceeds to the Limited and General Partners as part of their regular quarterly distributions which represented a return of capital of $0.83 and $14.47 per Limited Partnership Unit, respectively. (4) Payable to AEI Fund Management, Inc. - AEI Fund Management, Inc. performs the administrative and operating functions for the Partnership. The payable to AEI Fund Management represents the balance due for those services. This balance is non-interest bearing and unsecured and is to be paid in the normal course of business. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations For the nine months ended September 30, 1999 and 1998, the Partnership recognized rental income of $1,420,395 and $1,247,467, respectively. During the same periods, the Partnership earned investment income of $14,045 and $140,616, respectively. In 1999, rental income increased primarily as a result of rent received from the Champps Americana restaurants in Livonia, Michigan and Centerville, Ohio. The increase in rental income was partially offset by a decrease in investment income earned on subscription and sale proceeds prior to the purchase of the properties. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) Musicland Group, Inc. (MGI), the lessee of the Media Play retail store in Apple Valley, Minnesota experienced financial difficulties and was aggressively restructuring its organization. As part of the restructuring, the Partnership and MGI reached an agreement in December, 1996 in which MGI would buy out and terminate the Lease Agreement by making a payment of $800,000, which is equal to approximately two years' rent. The Partnership's share of such payment was $272,000. A specialist in commercial property leasing has been retained to locate a new tenant for the property. While the property is vacant, the Partnership is responsible for the real estate taxes and other costs required to maintain the property. As of December 31, 1997, based on an analysis of market conditions in the area, it was determined the fair value of the Partnership's interest in the Media Play was approximately $748,000. In the fourth quarter of 1997, a charge to operations for real estate impairment of $580,200 was recognized, which is the difference between the book value at December 31, 1997 of $1,328,200 and the estimated market value of $748,000. The charge was recorded against the cost of the land, building and equipment. During the nine months ended September 30, 1999 and 1998, the Partnership paid Partnership administration expenses to affiliated parties of $175,086 and $187,294, respectively. These administration expenses include costs associated with the management of the properties, processing distributions, reporting requirements and correspondence to the Limited Partners. During the same periods, the Partnership incurred Partnership administration and property management expenses from unrelated parties of $66,748 and $94,495, respectively. These expenses represent direct payments to third parties for legal and filing fees, direct administrative costs, outside audit and accounting costs, taxes, insurance and other property costs. The decrease in these expenses in 1999, when compared to 1998, is the result of expenses incurred in 1998 related to the Media Play situation discussed above. As of September 30, 1999, the Partnership's cash distribution rate was 6.5% on an annualized basis. Distributions of Net Cash Flow to the General Partners are subordinated to the Limited Partners as required in the Partnership Agreement. As a result, 99% of distributions and income were allocated to Limited Partners and 1% to the General Partners. Inflation has had a minimal effect on income from operations. The Leases contain cost of living increases which will result in an increase in rental income over the term of the Leases. Inflation also may cause the Partnership's real estate to appreciate in value. However, inflation and changing prices may also have an adverse impact on the operating margins of the properties' tenants which could impair their ability to pay rent and subsequently reduce the Partnership's Net Cash Flow available for distributions. The Year 2000 issue is the result of computer systems that use two digits rather than four to define the applicable year, which may prevent such systems from accurately processing dates ending in the Year 2000 and beyond. This could result in computer system failures or disruption of operations, including, but not limited to, an inability to process transactions, to send or receive electronic data, or to engage in routine business activities. AEI Fund Management, Inc. (AEI) performs all management services for the Partnership. In 1998, AEI completed an assessment of its computer hardware and software systems and has replaced or upgraded certain computer hardware and software using the assistance of outside vendors. AEI has received written assurance from the equipment and software manufacturers as to Year 2000 compliance. The costs associated with Year 2000 compliance have not been, and are not expected to be, material. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) The Partnership intends to monitor and communicate with tenants regarding Year 2000 compliance, although there can be no assurance that the systems of the various tenants will be Year 2000 compliant. Liquidity and Capital Resources During the nine months ended September 30, 1999, the Partnership's cash balances increased $350,870 mainly as a result of proceeds received from the sale of property. Net cash provided by operating activities decreased from $1,256,662 in 1998 to $1,187,823 in 1999 mainly as a result of net timing differences in the collection of payments from the lessees and the payment of expenses, which were partially offset by an increase in income and a decrease in expenses in 1999. The major components of the Partnership's cash flow from investing activities are investments in real estate and proceeds from the sale of real estate. During the nine months ended September 30, 1999 and 1998, the Partnership expended $221,884 and $2,475,090, respectively, to invest in real properties (inclusive of acquisition expenses). During the same periods, the Partnership generated cash flow from the sale of real estate of $657,632 and $862,718, respectively. On July 8, 1997, the Partnership purchased a parcel of land in Livonia, Michigan for $1,074,384. The land is leased to Champps under a Lease Agreement with a primary term of 20 years and annual rental payments of $75,207. Effective January 3, 1998, the annual rent was increased to $115,496. Simultaneously with the purchase of the land, the Partnership entered into a Development Financing Agreement under which the Partnership advanced funds to Champps for the construction of a Champps Americana restaurant on the site. Initially, the Partnership charged interest on the advances at a rate of 7.0%. Effective January 3, 1998, the interest rate was increased to 10.75%. On May 19, 1998, after the development was completed, the Lease Agreement was amended to require annual rental payments of $429,135. Total acquisition costs, including the cost of the land, were $4,150,061. On August 28, 1998, the Partnership purchased a 25% interest in a parcel of land in Centerville, Ohio for $462,747. The land is leased to Americana Dining Corporation (ADC) under a Lease Agreement with a primary term of 20 years and annual rental payments of $32,392. Effective December 25, 1998, the annual rent was increased to $48,588. Simultaneously with the purchase of the land, the Partnership entered into a Development Financing Agreement under which the Partnership advanced funds to ADC for the construction of a Champps Americana restaurant on the site. Initially, the Partnership charged interest on the advances at a rate of 7%. Effective December 25, 1998, the interest rate was increased to 10.5%. On January 27, 1999, after the development was completed, the Lease Agreement was amended to require annual rental payments of $101,365. The Partnership's share of the total acquisition costs, including the cost of the land, was $984,426. The remaining interests in the Fund property are owned by AEI Real Estate Fund XVII Limited Partnership, AEI Real Estate Fund XVIII Limited Partnership and AEI Income & Growth Fund XXII Limited Partnership, affiliates of the Partnership. Through December 31, 1998, the Partnership sold 40.7615% of its interest in the Champps Americana restaurant in Columbus, Ohio, in six separate transactions to unrelated third parties. The Partnership received total net sale proceeds of $1,383,508 which resulted in a total net gain of $341,928. The total cost and related accumulated depreciation of the interests sold was $1,087,502 and $45,922, respectively. For the nine months ended September 30, 1998, the net gain was $235,377. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued) During the three months ended September 30, 1999, the Partnership sold 63.4768% of its interest in the Arby's restaurant in three separate transactions to unrelated third parties. The Partnership received total net sale proceeds of $657,632 which resulted in a total net gain of $163,463. The total cost and related accumulated depreciation of the interest sold was $545,697 and $51,528, respectively. Subsequent to September 30, 1999, the Partnership sold an additional 21.5614% of its interest in the ArbyOs restaurant to an unrelated third party. The Partnership received net sale proceeds of approximately $224,000 which resulted in a net gain of approximately $56,000. In September, 1999, the Partnership entered into an agreement to sell the Caribou Coffee store to an unrelated third party. On October 26, 1999, the sale closed with the Partnership receiving net sale proceeds of approximately $1,575,000 for its interest in the property, which resulted in a net gain of approximately $323,000. During the first nine months of 1999 and 1998, the Partnership distributed $19,895 and $348,252 of the net sale proceeds to the Limited and General Partners as part of their regular quarterly distributions which represented a return of capital of $0.83 and $14.47 per Limited Partnership Unit, respectively. After completion of the acquisition phase, the Partnership's primary use of cash flow is distribution and redemption payments to Partners. The Partnership declares its regular quarterly distributions before the end of each quarter and pays the distribution in the first week after the end of each quarter. The Partnership attempts to maintain a stable distribution rate from quarter to quarter. The redemption payments generally are funded with cash that would normally be paid as part of the regular quarterly distributions. As a result, total distributions and distributions payable have fluctuated from year to year due to cash used to fund redemption payments. Effective January 1, 1999, the PartnershipOs distribution rate was reduced from 7.5% to 7.0%. Effective April 1, 1999, the rate was reduced to 6.5%. As a result, distributions were higher during 1998 when compared to the same period in 1999. The Partnership may acquire Units from Limited Partners who have tendered their Units to the Partnership. Such Units may be acquired at a discount. The Partnership is not obligated to purchase in any year more than 5% of the number of Units outstanding at the beginning of the year. In no event shall the Partnership be obligated to purchase Units if, in the sole discretion of the Managing General Partner, such purchase would impair the capital or operation of the Partnership. On October 1, 1999, ten Limited Partners redeemed a total of 280.37 Partnership Units for $239,479 in accordance with the Partnership Agreement. The Partnership acquired these Units using Net Cash Flow from operations. In prior years, three Limited Partners redeemed a total of 171.1 Partnership Units for $154,021. The redemptions increase the remaining Limited Partners' ownership interest in the Partnership. The continuing rent payments from the properties, together with cash generated from property sales, should be adequate to fund continuing distributions and meet other Partnership obligations on both a short-term and long-term basis. PART II - OTHER INFORMATION ITEM 1.LEGAL PROCEEDINGS There are no material pending legal proceedings to which the Partnership is a party or of which the Partnership's property is subject. ITEM 2.CHANGES IN SECURITIES None. ITEM 3.DEFAULTS UPON SENIOR SECURITIES None. ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5.OTHER INFORMATION None. ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits - Description 10.1 Purchase Agreement dated August 4, 1999 between the Partnership and VTA Building Company relating to the property at 2719 Zelda Road, Montgomery, Alabama. 10.2 Co-Tenancy Agreement dated August 6, 1999 between the Partnership and VTA Building Company relating to the property at 2719 Zelda Road, Montgomery, Alabama. 10.3 Purchase Agreement dated September 20, 1999 between the Partnership, AEI Institutional Net Lease Fund '93 Limited Partnership and Boulevard East, LLC relating to the property at 1531 East Boulevard, Charlotte, North Carolina. 10.4 Purchase Agreement dated September 29, 1999 between the Partnership and The Barrett Family Trust relating to the property at 2719 Zelda Road, Montgomery, Alabama. 10.5 Co-Tenancy Agreement dated October 22, 1999 between the Partnership and The Barrett Family Trust relating to the property at 2719 Zelda Road, Montgomery, Alabama. 27 Financial Data Schedule for period ended September 30, 1999. b. Reports filed on Form 8-K - None. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: November 8, 1999 AEI Income & Growth Fund XXI Limited Partnership By: AEI Fund Management XXI, Inc. Its: Managing General Partner By: /s/ Robert P. Johnson Robert P. Johnson President (Principal Executive Officer) By: /s/ Mark E. Larson Mark E. Larson Chief Financial Officer (Principal Accounting Officer) EX-10.1 2 PURCHASE AGREEMENT Arby's Restaurant - Montgomery, AL This AGREEMENT, entered into effective as of the 4th of August, 1999. l. Parties. Seller is AEI Income & Growth Fund XXI Limited Partnership which owns an undivided 45.8039% interest in the fee title to that certain real property legally described in the attached Exhibit "A" (the "Entire Property") Buyer is VTA Building Company, a Minnesota general partnership ("Buyer"). Seller wishes to sell and Buyer wishes to buy a portion of Seller's tenant in common interest in the Entire Property. 2. Property. The Property to be sold to Buyer in this transaction consists of an undivided 21.5614 percentage interest (hereinafter, simply the "Property") as Tenant in Common in the Entire Property. 3. Purchase Price . The purchase price for this percentage interest in the Entire Property is $250,000, all cash. 4. TERMS. The purchase price for the Property will be paid by Buyer as follows: (a) When this agreement is executed, Buyer will pay $5,000 to Seller (which shall be deposited into escrow according to the terms hereof) (the "First Payment"). The First Payment will be credited against the purchase price when and if escrow closes and the sale is completed. (b) Buyer will deposit the balance of the purchase price, $245,000 (the "Second Payment") into escrow in sufficient time to allow escrow to close on the closing date. 5. CLOSING DATE. Escrow shall close on or before August 13, 1999. 6. DUE DILIGENCE. Buyer will have until the expiration of the tenth business day (The "Review Period") after delivery of each of following items, to be supplied by Seller, to conduct all of its inspections and due diligence and satisfy itself regarding each item, the Property, and this transaction. Buyer agrees to indemnify and hold Seller harmless for any loss or damage to the Entire Property or persons caused by Buyer or its agents arising out of such physical inspections of the Entire Property. (a) The original and one copy of a title insurance commitment for an Owner's Title insurance policy (see paragraph 8 below). (b) A copy of a Certificate of Occupancy or other such document certifying completion and granting permission to permanently occupy the improvements on the Entire Property as are in Seller's possession. (c) A copy of an "as built" survey of the Entire Property done concurrent with Seller's acquisition of the Property. (d) Lease (as further set forth in paragraph 11(a) below) of the Entire Property showing occupancy date, lease expiration date, rent, and Guarantys, if any, accompanied by such tenant financial statements as may have been provided most recently to Seller by the Tenant and/or Guarantors. Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL It is a contingency upon Seller's obligations hereunder that two (2) copies of Co-Tenancy Agreement in the form attached hereto duly executed by Buyer and Seller and dated on escrow closing date be delivered to the Seller on the closing date. Buyer may cancel this agreement for ANY REASON in its sole discretion by delivering a cancellation notice, via first class mail, return receipt requested, to Seller and escrow holder before the expiration of the Review Period. Such notice shall be deemed effective only upon receipt by Seller. If this Agreement is not cancelled as set forth above, the First Payment shall be non-refundable unless Seller shall default hereunder. If Buyer cancels this Agreement as permitted under this Section, except for any escrow cancellation fees and any liabilities under the first paragraph of sections 6 of this agreement (which will survive), Buyer (after execution of such documents reasonably requested by Seller to evidence the termination hereof) shall be returned its First Payment, and Buyer will have absolutely no rights, claims or interest of any type in connection with the Property or this transaction, regardless of any alleged conduct by Seller or anyone else. Unless this Agreement is canceled by Buyer pursuant to the terms hereof, if Buyer fails to make the Second Payment, Seller shall be entitled to retain the First Payment and Buyer irrevocably will be deemed to be in default under this Agreement. Seller may, at its option, retain the First Payment and declare this Agreement null and void, in which event Buyer will be deemed to have canceled this Agreement and relinquish all rights in and to the Property or Seller may exercise its rights under Section 14 hereof. If this Agreement is not canceled and the Second Payment is made when required, all of Buyer's conditions and contingencies will be deemed satisfied. 7. ESCROW. Escrow shall be opened by Seller and funds deposited in escrow upon acceptance of this agreement by both parties. The escrow holder will be a nationally-recognized escrow company selected by Seller. A copy of this Agreement will be delivered to the escrow holder and will serve as escrow instructions together with the escrow holder's standard instructions and any additional instructions required by the escrow holder to clarify its rights and duties (and the parties agree to sign these additional instructions). If there is any conflict between these other instructions and this Agreement, this Agreement will control. 8. TITLE. Closing will be conditioned on the commitment of a title company selected by Seller to issue an Owner's policy of title insurance, dated as of the close of escrow, in an amount equal to the purchase price, insuring that Buyer will own insurable title to the Property subject only to: the title company's standard exceptions; current real property taxes and assessments; survey exceptions; the rights of parties in possession pursuant to the lease defined in paragraph 11 below; and other items of record disclosed to Buyer during the Review Period. Buyer shall be allowed ten (10) days after receipt of said commitment for examination and the making of any objections to marketability thereto, said objections to be made in writing or deemed waived. If any objections are so made, the Seller shall be allowed eighty (80) days to make such title marketable or in the alternative to obtain a commitment for insurable title insuring over Buyer's objections. If Seller shall decide to make no efforts to make title marketable, or is unable to make title marketable or obtain insurable title, (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof) Buyer's First Payment shall be returned and this Agreement shall be null and void and of no further force and effect. Seller has no obligation to spend any funds or make any effort to satisfy Buyer's objections if any. Pending satisfaction of Buyer's objections, the payments hereunder required shall be postponed, but upon satisfaction of Buyer's objections and within ten (10) days after written Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL notice of satisfaction of Buyer's objections to the Buyer, the parties shall perform this Agreement according to its terms. 9. CLOSING COSTS. Seller will pay one-half of escrow fees, the cost of the title commitment and any brokerage commissions payable. The Buyer will pay the cost of issuing a Standard Owners Title Insurance Policy in the full amount of the purchase price, if Buyer shall decide to purchase the same. Buyer will pay all recording fees, one-half of the escrow fees, and the cost of an update to the Survey in Sellers possession (if an update is required by Buyer.) Each party will pay its own attorney's fees and costs to document and close this transaction. 10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS. (a) Because the Entire Property (of which the Property is a part) is subject to a triple net lease (as further set forth in paragraph 11(a)(i), the parties acknowledge that there shall be no need for a real estate tax proration. However, Seller represents that to the best of its knowledge, all real estate taxes and installments of special assessments due and payable in all years prior to the year of Closing have been paid in full. Unpaid real estate taxes and unpaid levied and pending special assessments existing on the date of Closing shall be the responsibility of Buyer and Seller in proportion to their respective Tenant in Common interests, pro-rated, however, to the date of closing for the period prior to closing, which shall be the responsibility of Seller if Tenant shall not pay the same. Seller and Buyer shall likewise pay all taxes due and payable in the year after Closing and any unpaid installments of special assessments payable therewith and thereafter, if such unpaid levied and pending special assessments and real estate taxes are not paid by any tenant of the Entire Property. (b) All income and all operating expenses from the Entire Property shall be prorated between the parties and adjusted by them as of the date of Closing. Seller shall be entitled to all income earned and shall be responsible for all expenses incurred prior to the date of Closing, and Buyer shall be entitled to its proportionate share of all income earned and shall be responsible for its proportionate share of all operating expenses of the Entire Property incurred on and after the date of closing. 11. SELLER'S REPRESENTATION AND AGREEMENTS. (a) Seller represents and warrants as of this date that: (i) Except for the lease in existence between AEI Income and Growth Fund XXI Limited Partnership and AEI Institutional Net Lease Fund '93 Limited Partnership (as "Landlord") and RTM Gulf Coast, Inc. ("Tenant") dated May 31, 1995, Seller is not aware of any leases of the Property. The above referenced lease agreement has a first right of refusal in favor of the Tenant as set forth in Article 35 of said lease agreement, which right shall apply to any attempted disposition of the Property by Buyer after this transaction. The above lease also has an option to purchase in favor of the tenant as set forth in article 34 of said lease. (ii) It is not aware of any pending litigation or condemnation proceedings against the Property or Seller's interest in the Property. (iii) Except as previously disclosed to Buyer and as permitted in paragraph (b) below, Seller is not aware of any contracts Seller has executed that would be binding on Buyer after the closing date. (b) Provided that Buyer performs its obligations when required, Seller agrees that it will not enter into any new contracts that would materially affect the Property and be binding Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL on Buyer after the Closing Date without Buyer's prior consent, which will not be unreasonably withheld. However, Buyer acknowledges that Seller retains the right both prior to and after the Closing Date to freely transfer all or a portion of Seller's remaining undivided interest in the Entire Property, provided such sale shall not encumber the Property being purchased by Buyer in violation of the terms hereof or the contemplated Co-Tenancy Agreement. 12. DISCLOSURES. (a) Seller has not received any notice of any material, physical, or mechanical defects of the Entire Property, including without limitation, the plumbing, heating, air conditioning, ventilating, electrical system. To the best of Seller's knowledge without inquiry, all such items are in good operating condition and repair and in compliance with all applicable governmental, zoning, and land use laws, ordinances, regulations and requirements. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (b) Seller has not received any notice that the use and operation of the Entire Property is not in full compliance with applicable building codes, safety, fire, zoning, and land use laws, and other applicable local, state and federal laws, ordinances, regulations and requirements. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (c) Seller knows of no facts nor has Seller failed to disclose to Buyer any fact known to Seller which would prevent the Tenant from using and operating the Entire Property after the Closing in the manner in which the Entire Property has been used and operated prior to the date of this Agreement. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (d) Seller has not received any notice that the Entire Property is in violation of any federal, state or local law, ordinance, or regulations relating to industrial hygiene or the environmental conditions on, under, or about the Entire Property, including, but not limited to, soil, and groundwater conditions. To the best of Seller's knowledge, there is no proceeding or inquiry by any governmental authority with respect to the presence of Hazardous Materials on the Entire Property or the migration of Hazardous Materials from or to other property. Buyer agrees that Seller will have no liability of any type to Buyer or Buyer's successors, assigns, or affiliates in connection with any Hazardous Materials on or in connection with the Entire Property either before or after the Closing Date, except such Hazardous Materials on or in connection with the Entire Property arising out of Seller's gross negligence or intentional misconduct. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (e) Buyer agrees that it shall be purchasing the Property in its then present condition, as is, where is, and Seller has no obligations to construct or repair any improvements thereon or to perform any other act regarding the Property, except as expressly provided herein. (f) Buyer acknowledges that, having been given the opportunity to inspect the Entire Property and such financial information on the Lessee and Guarantors of the Lease as Buyer or its advisors shall request, if in Seller's possession, Buyer is relying solely on its own investigation of the Property and not on any information provided by Seller or to be provided except as set forth herein. Buyer further acknowledges that the information provided and to be provided by Seller with respect to the Property, the Entire Property and to the Lessee and Guarantors of Lease was obtained from a variety of sources and Seller neither (a) has made independent investigation or verification of such information, Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL or (b) makes any representations as to the accuracy or completeness of such information except as herein set forth. The sale of the Property as provided for herein is made on an "AS IS" basis, and Buyer expressly acknowledges that, in consideration of the agreements of Seller herein, except as otherwise specified herein in paragraph 11(a) and (b) above and this paragraph 12, Seller makes no Warranty or representation, Express or Implied, or arising by operation of law, including, but not limited to, any warranty of condition, habitability, tenantability, suitability for commercial purposes, merchantability, or fitness for a particular purpose, in respect of the Property. The provisions (d) - (f) above shall survive Closing. 13. CLOSING. (a) Before the closing date, Seller will deposit into escrow an executed special warranty deed warranting title against lawful claims by, through, or under a conveyance from Seller, but not further or otherwise, conveying insurable title of the Property to Buyer, subject to the exceptions contained in paragraph 8 above. (b) On or before the closing date, Buyer will deposit into escrow: the balance of the purchase price when required under Section 4; any additional funds required of Buyer, (pursuant to this agreement or any other agreement executed by Buyer) to close escrow. Both parties will sign and deliver to the escrow holder any other documents reasonably required by the escrow holder to close escrow. (c) On the closing date, if escrow is in a position to close, the escrow holder will: record the deed in the official records of the county where the Property is located; cause the title company to commit to issue the title policy; immediately deliver to Seller the portion of the purchase price deposited into escrow by cashier's check or wire transfer (less debits and prorations, if any); deliver to Seller and Buyer a signed counterpart of the escrow holder's certified closing statement and take all other actions necessary to close escrow. 14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights and claims and Seller will be relieved of all obligations and will be entitled to retain all monies heretofore paid by the Buyer. In addition, Seller shall retain all remedies available to Seller at law or in equity. If Seller shall default, Buyer irrevocably waives any rights to file a lis pendens, a specific performance action or any other claim, action or proceeding of any type in connection with the Property or this or any other transaction involving the Property, and will not do anything to affect title to the Property or hinder, delay or prevent any other sale, lease or other transaction involving the Property (any and all of which will be null and void), unless: it has paid the First Payment, deposited the balance of the Second Payment for the purchase price into escrow, performed all of its other obligations and satisfied all conditions under this Agreement, and unconditionally notified Seller that it stands ready to tender full performance, purchase the Property and close escrow as per this Agreement, regardless of any alleged default or misconduct by Seller. Provided, however, that in no event shall Seller be liable for any actual, punitive, consequential or speculative damages arising out of any default by Seller hereunder. 15. BUYER'S REPRESENTATIONS AND WARRANTIES. a. Buyer represents and warrants to Seller as follows: (i) In addition to the acts and deeds recited herein and contemplated to be performed, executed, and delivered by Buyer, Buyer shall perform, execute and deliver or cause to be performed, executed, and delivered at the Closing or after the Closing, any and all further Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL acts, deeds and assurances as Seller or the Title Company may require and be reasonable in order to consummate the transactions contemplated herein. (ii) Buyer has all requisite power and authority to consummate the transaction contemplated by this Agreement and has by proper proceedings duly authorized the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby. (iii) To Buyer's knowledge, neither the execution and delivery of this Agreement nor the consummation of the transaction contemplated hereby will violate or be in conflict with (a) any applicable provisions of law, (b) any order of any court or other agency of government having jurisdiction hereof, or (c) any agreement or instrument to which Buyer is a party or by which Buyer is bound. 16. DAMAGES, DESTRUCTION AND EMINENT DOMAIN. (a) If, prior to closing, the Property or any part thereof should be destroyed or further damaged by fire, the elements, or any cause, due to events occurring subsequent to the date of this Agreement to the extent that the cost of repair exceeds $10,000.00, this Agreement shall become null and void, at Buyer's option exercised, if at all, by written notice to Seller within ten (10) days after Buyer has received written notice from Seller of said destruction or damage. Seller, however, shall have the right to adjust or settle any insured loss until (i) all contingencies set forth in Paragraph 6 hereof have been satisfied, or waived; and (ii) any ten-day period provided for above in this Subparagraph 16a for Buyer to elect to terminate this Agreement has expired or Buyer has, by written notice to Seller, waived Buyer's right to terminate this Agreement. If Buyer elects to proceed and to consummate the purchase despite said damage or destruction, there shall be no reduction in or abatement of the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to all insurance proceeds (pro-rata in relation to the Entire Property) resulting from said damage or destruction to the extent that the same are payable with respect to damage to the Property, subject to rights of any Tenant of the Entire Property. If the cost of repair is less than $10,000.00, Buyer shall be obligated to otherwise perform hereinunder with no adjustment to the Purchase Price, reduction or abatement, and Seller shall assign Seller's right, title and interest in and to all insurance proceeds pro-rata in relation to the Entire Property, subject to rights of any Tenant of the Entire Property. (b) If, prior to closing, the Property, or any part thereof, is taken by eminent domain, this Agreement shall become null and void, at Buyer's option. If Buyer elects to proceed and to consummate the purchase despite said taking, there shall be no reduction in, or abatement of, the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to any award made, or to be made, in the condemnation proceeding pro-rata in relation to the Entire Property, subject to rights of any Tenant of the Entire Property. In the event that this Agreement is terminated by Buyer as provided above in Subparagraph 16a or 16b, the First Payment shall be immediately returned to Buyer (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof). 17. BUYER'S 1031 TAX FREE EXCHANGE. While Seller acknowledges that Buyer is purchasing the Property as "replacement property" to accomplish a tax free exchange, Buyer acknowledges that Seller has made no representations, warranties, or agreements to Buyer or Buyer's agents that the transaction contemplated by the Agreement will qualify for such tax treatment, nor has there been any Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL reliance thereon by Buyer respecting the legal or tax implications of the transactions contemplated hereby. Buyer further represents that it has sought and obtained such third party advice and counsel as it deems necessary in regards to the tax implications of this transaction. Buyer wishes to novate/assign the ownership rights and interest of this Purchase Agreement to Dakota County Abstract and Title which will act as Accommodator to perfect the 1031 exchange by preparing an agreement of exchange of Real Property whereby Dakota County Abstract and Title will be an independent third party purchasing the ownership interest in subject property from Seller and selling the ownership interest in subject property to Buyer under the same terms and conditions as documented in this Purchase Agreement. Buyer asks the Seller, and Seller agrees to cooperate in the perfection of such an exchange if at no additional cost or expense to Seller or delay in time. Buyer hereby indemnifies and holds Seller harmless from any claims and/or actions resulting from said exchange. Pursuant to the direction of Dakota County Abstract and Title, Seller will deed the Property to Buyer. 18. CANCELLATION If any party elects to cancel this Contract because of any breach by another party or because escrow fails to close by the agreed date, the party electing to cancel shall deliver to escrow agent a notice containing the address of the party in breach and stating that this Contract shall be cancelled unless the breach is cured within 13 days following the delivery of the notice to the escrow agent. Within three days after receipt of such notice, the escrow agent shall send it by United States Mail to the party in breach at the address contained in the Notice and no further notice shall be required. If the breach is not cured within the 13 days following the delivery of the notice to the escrow agent, this Contract shall be cancelled. 19. MISCELLANEOUS. (a) This Agreement may be amended only by written agreement signed by both Seller and Buyer, and all waivers must be in writing and signed by the waiving party. Time is of the essence. This Agreement will not be construed for or against a party whether or not that party has drafted this Agreement. If there is any action or proceeding between the parties relating to this Agreement the prevailing party will be entitled to recover attorney's fees and costs. This is an integrated agreement containing all agreements of the parties about the Property and the other matters described, and it supersedes any other agreements or understandings. Exhibits attached to this Agreement are incorporated into this Agreement. (b) If this escrow has not closed by August 5, 1999, through no fault of Seller, Seller may either, at its election, extend the closing date or exercise any remedy available to it by law, including terminating this Agreement. (c) Funds to be deposited or paid by Buyer must be good and clear funds in the form of cash, cashier's checks or wire transfers. (d) All notices from either of the parties hereto to the other shall be in writing and shall be considered to have been duly given or served if sent by first class certified mail, return receipt requested, postage prepaid, or by a nationally recognized courier service guaranteeing overnight delivery to the party at his or its address set forth below, or to such other address as such party may hereafter designate by written notice to the other party. Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL If to Seller: Attention: Robert P. Johnson AEI Income & Growth Fund XXI Limited Partnership 1300 Minnesota World Trade Center 30 E. 7th Street St. Paul, MN 55101 If to Buyer: VTA Building Company 12825 Falcon Drive Apple Valley, MN 55124 When accepted, this offer will be a binding agreement for valid and sufficient consideration which will bind and benefit Buyer, Seller and their respective successors and assigns. Buyer is submitting this offer by signing a copy of this offer and delivering it to Seller. Seller has five (5) business days from receipt within which to accept this offer. IN WITNESS WHEREOF, the Seller and Buyer have executed this Agreement effective as of the day and year above first written. BUYER: VTA Building Company, A Minnesota General Partnership By: /s/ James R Knecht James R. Knecht, Partner By: /s/ Rosalee J Knecht Rosalee J. Knecht, Partner SELLER: AEI Income & Growth Fund XXI Limited Partnership By: AEI Fund Management XXI, Inc., its corporate general partner By: /s/ Robert P Johnson Robert P. Johnson, President Buyer Initial: /s/ JRK Purchase Agreement for Arby's Restaurant - Montgomery, AL EXHIBIT "A" Commencing at the Northeast corner of the Southeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama, thence West a distance of 535.66 feet, thence North 328.83 feet to the Southwest corner of Lot 1-T, of the Taco Bell Plat No. 3, Zelda Road as recorded in the Montgomery County Probate Office, said point being on the curve of the Norterly right of way of Zelda Roas, said curve having a radius of 392.86 feet, a central angle of 30 13' 45" and a chord of 204.88 feet with a chord bearing of S 59 16' 00" E, thence southeasterly along said curve to the end of said curve, said point being the Southeast corner of said Lot 1-T, also being the point of beginning. Thence N 39 28' 53" E, from the point of beginning along the southeasterly line of said Lot 1-T, a distance of 152.21 feet to an iron pin found on the southerly right of way of Interstate Hiwhway I-85; thence S 52 30' 39" E, along the southerly right of way of Interstate Highway I-85 a distance of 311.90 feet to a found iron pin; thence S 74 07' 41" W a distance of 270.89 feet to a found iron pin on the northerly right of way of Zelda Road; thence N 20 20' 05" W along the Northerly right of way of Zelda Road a distance of 28.41 feet to the beginning of the curve of the northerly right of way of Zelda Road, said curve having a radius of 392.86 feet, a central angle of 20 38' 00" and a chord of 140.71 feet with a chord bearing of N 31 38' 47" W; thence Northwesterly along said curve to the end of said curve, said point being the southeast corner of said Lot 1-T, and also being the point of beginning. The said tract of land is located in the Northeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama. 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 6th day of August, 1999, by and between VTA Building Company, A Minnesota general partnership, (hereinafter called "VTA") and AEI Income & Growth Fund XXI Limited Partnership (hereinafter called "Fund XXI") VTA, Fund XXI (and any other Owner in Fee where the context so indicates) being hereinafter sometimes collectively called "Co-Tenants" and referred to in the neuter gender). WITNESSETH: WHEREAS, Fund XXI presently owns an undivided 24.2425% interest in and to, and VTA owns an undivided 21.5614% interest in and to, and Roland Terry owns an undivided 20.3540% interest in and to and the Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns presently owns an undivided 21.5614% interest in and to, and the Cheung Living Trust Dated July 27, 1989 presently owns an undivided 12.2807% interest in and to the land, situated in the City of Montgomery, County of Montgomery, and State of AL, (legally described upon Exhibit A attached hereto and hereby made a part hereof) and in and to the improvements located thereon (hereinafter called "Premises"); WHEREAS, The parties hereto wish to provide for the orderly operation and management of the Premises and VTA's interest by Fund XXI; the continued leasing of space within the Premises; for the distribution of income from and the pro-rata sharing in expenses of the Premises. NOW THEREFORE, in consideration of the purchase by VTA of an undivided interest in and to the Premises, for at least One Dollar ($1.00) and other good and valuable consideration by the parties hereto to one another in hand paid, the receipt and sufficiency of which are hereby acknowledged, and of the mutual covenants and agreements herein contained, it is hereby agreed by and between the parties hereto, as follows: 1. The operation and management of the Premises shall be delegated to Fund XXI, or its designated agent, successors or assigns. Provided, however, if Fund XXI shall sell all of its interest in the Premises, the duties and obligations of Fund XXI respecting management of the Premises as set forth herein, including but not limited to paragraphs 2, 3, and 4 hereof, shall be exercised by the holder or holders of a majority undivided co- tenancy interest in the Premises. Except as hereinafter expressly provided to the contrary, each of the parties hereto agrees to be bound by the decisions of Fund XXI with respect to all administrative, operational and management matters of the property comprising the Premises, including but not limited to the management of the net lease agreement for the Premises. VTA hereto hereby designates Fund XXI as its sole and exclusive agent to deal with, and Fund XXI retains the sole right to deal with, any property agent or tenant and to negotiate and enter into, on terms and provisions satisfactory to Fund XXI, monitor, execute and enforce the terms of leases of space within the Premises, including but not limited to any amendments, consents to assignment, sublet, releases or modifications to leases or guarantees of lease or easements affecting the Premises, on behalf of VTA As long as Fund XXI owns an interest in the Premises, only Fund XXI may obligate VTA with respect to any expense for the Premises. As further set forth in paragraph 2 hereof, Fund XXI agrees to require any lessee of the Premises to name VTA as an insured or additional insured in all insurance policies provided for, or contemplated by, any lease on the Premises. Fund XXI shall use its best efforts to obtain Co-Tenant Initial: /s/ JRK Co-Tenancy Agreement for Arby's - Montgomery, AL endorsements adding Co-Tenants to said policies from lessee within 30 days of commencement of this agreement. In any event, Fund XXI shall distribute any insurance proceeds it may receive, to the extent consistent with any lease on the Premises, to the Co-Tenants in proportion to their respective ownership of the Premises. 2. Income and expenses shall be allocated among the Co-Tenants in proportion to their respective share(s) of ownership. Shares of net income shall be pro-rated for any partial calendar years included within the term of this Agreement. Fund XXI may offset against, pay to itself and deduct from any payment due to VTA under this Agreement, and may pay to itself the amount of VTA's share of any reasonable expenses of the Premises which are not paid by VTA to Fund XXI or its assigns, within ten (10) days after demand by Fund XXI. In the event there is insufficient operating income from which to deduct VTA's unpaid share of operating expenses, Fund XXI may pursue any and all legal remedies for collection. Operating Expenses shall include all normal operating expense, including but not limited to: maintenance, utilities, supplies, labor, management, advertising and promotional expenses, salaries and wages of rental and management personnel, leasing commissions to third parties, a monthly accrual to pay insurance premiums, real estate taxes, installments of special assessments and for structural repairs and replacements, management fees, legal fees and accounting fees, but excluding all operating expenses paid by tenant under terms of any lease agreement of the Premises. VTA has no requirement to, but has, nonetheless elected to retain, and agrees to annually reimburse, Fund XXI in the amount of $ 710.00 for the expenses, direct and indirect, incurred by Fund XXI in providing VTA with quarterly accounting and distributions of VTA's share of net income and for tracking, reporting and assessing the calculation of VTA's share of operating expenses incurred from the Premises. This invoice amount shall be pro-rated for partial years and VTA authorizes Fund XXI to deduct such amount from VTA's share of revenue from the Premises. VTA may terminate this agreement in this paragraph respecting accounting and distributions at any time and attempt to collect its share of rental income directly from the tenant; however, enforcement of all other provisions of the lease remains the sole right of Fund XXI pursuant to Section 1 hereof. Fund XXI may terminate its obligation under this paragraph upon 30 days notice to VTA prior to the end of each anniversary hereof, unless agreed in writing to the contrary. 3. Full, accurate and complete books of account shall be kept in accordance with generally accepted accounting principles at Fund XXI's principal office, and each Co-Tenant shall have access to such books and may inspect and copy any part thereof during normal business hours. Within ninety (90) days after the end of each calendar year during the term hereof, Fund XXI shall prepare an accurate income statement for the ownership of the Premises for said calendar year and shall furnish copies of the same to all Co-Tenants. Quarterly, as its share, VTA shall be entitled to receive 21.5614% of all items of income and expense generated by the Premises. Upon receipt of said accounting, if the payments received by each Co-Tenant pursuant to this Paragraph 3 do not equal, in the aggregate, the amounts which each are entitled to receive proportional to its share of ownership with respect to said calendar year pursuant to Paragraph 2 hereof, an appropriate adjustment shall be made so that each Co-Tenant receives the amount to which it is entitled. 4. If Net Income from the Premises is less than $0.00 (i.e., the Premises operates at a loss), or if capital improvements, repairs, and/or replacements, for which adequate reserves do not exist, need to be made to the Premises, the Co-Tenants, upon receipt of a written request therefor from Fund XXI, shall, within fifteen (15) business days after receipt of notice, make payment to Fund XXI sufficient to pay said net operating losses and to provide necessary operating capital Co-Tenant Initial: /s/ JRK Co-Tenancy Agreement for Arby's - Montgomery, AL for the premises and to pay for said capital improvements, repairs and/or replacements, all in proportion to their undivided interests in and to the Premises. 5. Co-Tenants may, at any time, sell, finance, or otherwise create a lien upon their interest in the Premises but only upon their interest and not upon any part of the interest held, or owned, by any other Co-Tenant. All Co-Tenants reserve the right to escrow proceeds from a sale of their interests in the Premises to obtain tax deferral by the purchase of replacement property. 6. If any Co-Tenant shall be in default with respect to any of its obligations hereunder, and if said default is not corrected within thirty (30) days after receipt by said defaulting Co- Tenant of written notice of said default, or within a reasonable period if said default does not consist solely of a failure to pay money, the remaining Co-Tenant(s) may resort to any available remedy to cure said default at law, in equity, or by statute. 7. This Co-Tenancy agreement shall continue in full force and effect and shall bind and inure to the benefit of the Co-Tenant and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns until June 1, 2025 or upon the sale of the entire Premises in accordance with the terms hereof and proper disbursement of the proceeds thereof, whichever shall first occur. Unless specifically identified as a personal contract right or obligation herein, this agreement shall run with any interest in the Premises and with the title thereto. Once any person, party or entity has ceased to have an interest in fee in any portion of the Premises, it shall not be bound by, subject to or benefit from the terms hereof; but its heirs, executors, administrators, personal representatives, successors or assigns, as the case may be, shall be substituted for it hereunder. 8. Any notice or election required or permitted to be given or served by any party hereto to, or upon any other, shall be given to all known Co-Tenants and deemed given or served in accordance with the provisions of this Agreement, if said notice or elections addressed as follows; If to Fund XXI: AEI Income and Growth Fund XXI Limited Partnership 1300 Minnesota World Trade Center 30 E. Seventh Street St. Paul, Minnesota 55101 If to VTA: VTA Building Company 12825 Falcon Drive Apple Valley, MN 55124 If to Cheung: Howard Owyoung Cheung Rosemarie Cheung 10 Live Oak Court Hillsborough, CA 94010 Co-Tenant Initial: /s/ JRK Co-Tenancy Agreement for Arby's - Montgomery, AL If to Whittenburg: The Catharine C. Whittenburg Testamentary Trust Post Office Box 26 Amarillo, TX 79105 If to Terry: Roland Terry 154 Little Hendricks Pk #20612 Jasper, GA 30143 Each mailed notice or election shall be deemed to have been given to, or served upon, the party to which addressed on the date the same is deposited in the United States certified mail, return receipt requested, postage prepaid, or given to a nationally recognized courier service guaranteeing overnight delivery as properly addressed in the manner above provided. Any party hereto may change its address for the service of notice hereunder by delivering written notice of said change to the other parties hereunder, in the manner above specified, at least ten (10) days prior to the effective date of said change. 9. This Agreement shall not create any partnership or joint venture among or between the Co-Tenants or any of them, and the only relationship among and between the Co-Tenants hereunder shall be that of owners of the premises as tenants in common subject to the terms hereof. 10. The unenforceability or invalidity of any provision or provisions of this Agreement as to any person or circumstances shall not render that provision, nor any other provision hereof, unenforceable or invalid as to any other person or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 11. In the event any litigation arises between the parties hereto relating to this Agreement, or any of the provisions hereof, the party prevailing in such action shall be entitled to receive from the losing party, in addition to all other relief, remedies and damages to which it is otherwise entitled, all reasonable costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in connection with said litigation. REST OF PAGE INTENTIONALLY LEFT BLANK Co-Tenant Initial: /s/ JRK Co-Tenancy Agreement for Arby's - Montgomery, AL VTA Building Company By: /s/ James R Knecht James R. Knecht, Partner STATE OF MINNESOTA) ) ss COUNTY OF Ramsey) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 4th day of August, 1999, James R Knecht who executed the foregoing instrument in said capacity. [notary seal] /s/ Barbara J Kochevar Notary Public By: /s/ Rosalee J Knecht Rosalee J. Knecht, Partner STATE OF MINNESOTA) ) ss [notary seal] COUNTY OF Ramsey) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 4th day of August, 1999, Rosalee J Knecht who executed the foregoing instrument in said capacity. /s/ Barbara J Kochevar Notary Public Co-Tenant Initial: /s/ JRK Co-Tenancy Agreement for Arby's - Montgomery, AL Fund XXI AEI Income & Growth Fund XXI Limited Partnership By: AEI Fund Management XXI, Inc., its corporate general partner By: /s/ Robert P Johnson Robert P. Johnson, President State of Minnesota ) ) ss. County of Ramsey ) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 4th day of August, 1999, Robert P. Johnson, President of AEI Fund Management XXI, Inc., corporate general partner of AEI Income & Growth Fund XXI Limited Partnership who executed the foregoing instrument in said capacity and on behalf of the corporation in its capacity as corporate general partner, on behalf of said limited partnership. /s/ Linda A Bisdorf Notary Public [notary seal] Co-Tenant Initial: /s/ JRK Co-Tenancy Agreement for Arby's - Montgomery, AL EXHIBIT "A" Commencing at the Northeast corner of the Southeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama, thence West a distance of 535.66 feet, thence North 328.83 feet to the Southwest corner of Lot 1-T, of the Taco Bell Plat No. 3, Zelda Road as recorded in the Montgomery County Probate Office, said point being on the curve of the Norterly right of way of Zelda Roas, said curve having a radius of 392.86 feet, a central angle of 30 13' 45" and a chord of 204.88 feet with a chord bearing of S 59 16' 00" E, thence southeasterly along said curve to the end of said curve, said point being the Southeast corner of said Lot 1-T, also being the point of beginning. Thence N 39 28' 53" E, from the point of beginning along the southeasterly line of said Lot 1-T, a distance of 152.21 feet to an iron pin found on the southerly right of way of Interstate Hiwhway I-85; thence S 52 30' 39" E, along the southerly right of way of Interstate Highway I-85 a distance of 311.90 feet to a found iron pin; thence S 74 07' 41" W a distance of 270.89 feet to a found iron pin on the northerly right of way of Zelda Road; thence N 20 20' 05" W along the Northerly right of way of Zelda Road a distance of 28.41 feet to the beginning of the curve of the northerly right of way of Zelda Road, said curve having a radius of 392.86 feet, a central angle of 20 38' 00" and a chord of 140.71 feet with a chord bearing of N 31 38' 47" W; thence Northwesterly along said curve to the end of said curve, said point being the southeast corner of said Lot 1-T, and also being the point of beginning. The said tract of land is located in the Northeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama. EX-10.3 4 PURCHASE AGREEMENT THIS AGREEMENT, entered into effective as of this 20th day of September, 1999. 1. Parties. The buyer is Boulevard East, LLC or related assigns, (such assignment to be effective only if buyer shall remain liable for the full performance of Buyer hereunder), ("Buyer"), and the seller is AEI Income & Growth Fund XXI Limited Partnership, a Minnesota limited partnership, and AEI Institutional Net Lease Fund `93 Limited Partnership (together, "Seller"). 2. Property. The Property consists of the real property legally described on Exhibit A attached hereto, all buildings and improvements, and fixtures on the land, (including, but not limited to, that certain approximately square foot building and related improvements) appurtenances, mineral and similar rights (to the extent owned by Seller), and personal property, if any, presently owned by Seller and used by Seller in connection with the land or the improvements, all of Seller's interest in all leases, prepaid rents, security deposits and other contract rights, guaranties and warranties or other rights related to the use and operation of the Property and all assignable governmental licenses and permits. 3. Purchase Price. The purchase price for the Property is $1,697,089, all cash. 4. Terms. The purchase price for the Property will be paid by Buyer as follows: (a) When this agreement is executed, Buyer will pay $5,000 to Seller (the "First Payment"). The First Payment will be forwarded to the Escrowee per paragraph 7 hereof, and credited against the purchase price when and if escrow closes and the sale is completed. (b) At the expiration of the Due Diligence Period, buyer will deposit with Escrowee an addition $20,000 (the ASecond Payment@) (c) Buyer will deposit the balance of the purchase price, $1,672,089, (the "Final Payment") into escrow in sufficient time to allow escrow to close on the closing date. 5. Closing Date. Escrow is scheduled to close (i.e., the deed will be recorded and the purchase price transferred to Seller) on November 15, 1999, or such earlier time as the parties may mutually agree. 6. Due Diligence. Buyer will have until the latter of (i) forty-five (45) days after the full execution of this Agreement by both parties hereto, or (ii) forty-five (45) days after delivery of each of the following items (the ADue Diligence Period@) to conduct all of its inspections and due diligence and satisfy itself regarding each item, the Property and this transaction. a. The original and one copy of a title insurance commitment for an ALTA owner's title insurance policy (see paragraph 8 below) b. Copies of such "as built" plans and specifications for the Property as Seller can locate after diligent search. c. Copies of an "as built" survey of the Property done concurrent with Seller's acquisition of the Property. d. Current lease, and rent payment history showing occupancy date, lease expiration date, rent, and security deposit, if any, accompanied by such tenant financial statements as may have been provided to Seller by the Tenant. Copies of any and all existing soil tests and environmental tests previously done by or for Seller relating to the Property. During the Due Diligence Period, Buyer and Seller as a condition to both parties' obligations hereunder, shall attempt to agree upon a mutually acceptable form of assignment and assumption of lease and personalty of Seller on the Property, if any, with respective pre and post closing indemnification clauses, and an Estoppel Certificate executed by existing tenant on such form reasonably approved by Buyer, or if tenant is unwilling, certified by Seller (to be submitted within thirty (30) days of Closing). Seller shall provide Buyer access to the Property from time to time for the purpose of conducting inspections thereof including mechanical, structural, electrical and other physical inspections. Buyer has until the end of the Due Diligence Period to complete such physical inspection. Buyer shall indemnify Seller from and against any and all losses, claims, causes of action, liabilities, and costs to the extent caused by the actions of Buyer, its agents, employees, contractors, or invitees, during any such entry upon the Property. The foregoing duty of indemnification shall include the duty to pay all reasonable attorney's fees incurred by the Seller in responding to or defending any such claims or proceedings. Buyer may cancel this agreement for ANY REASON in its sole discretion by delivering a cancellation notice by certified mail, return receipt requested, or by overnight delivery service to Seller and escrow holder before the expiration of the Due Diligence Period. Such notice shall be deemed effective only upon receipt by Seller. If Buyer cancels this Agreement as permitted under this Section, except for any escrow cancellation fees and any liabilities under Sections 15(a) of this Agreement (which will survive), Buyer (after execution of such documents reasonably requested by Seller to evidence the termination hereof) shall be returned the First Payment, and Buyer will have absolutely no rights, claims or interest of any type in connection with the Property or this transaction, regardless of any alleged conduct by Seller or anyone else. Buyer irrevocably will be deemed to have canceled this Agreement and relinquish all rights in and to the Property unless Buyer makes the Second Payment when required. Upon payment of the Second Payment, Buyer shall have been deemed to have waived its right to terminate this Agreement based upon the items received by Buyer and its inspection of the property during the Due Diligence Period. Buyer shall have ten (10) business days, from written notice to Buyer, to review any adverse material changes in any of the due diligence items received prior to the Closing Date to terminate this Agreement. Except for the foregoing, if this Agreement is not canceled and the Second Payment is made when required, all of Buyer's conditions and contingencies will be deemed satisfied. 7. Escrow. The escrow holder will be Centura Title Insurance Agency, as agent for a nationally-recognized title insurance company reasonably acceptable to Seller ("the Escrowee"), with offices in or near Charlotte, North Carolina. A copy of this Agreement and the First Payment will be delivered to the escrow holder and will serve as escrow instructions together with the escrow holder's standard instructions and any additional instructions required by the escrow holder to clarify its rights and duties (and the parties agree to sign these additional instructions). If there is any conflict between these other instructions and this Agreement, this Agreement will control. Escrow will be deemed opened only upon Seller's execution of this Agreement and the deposit with Escrowee of the Buyer's First Payment by Seller. The escrow is scheduled to close on November 15, 1999. 8. Title. Closing will be conditioned on the agreement of the Escrowee to issue an ALTA Owner's policy of title insurance, dated as of the close of escrow, in an amount equal to the purchase price, insuring that Buyer will own insurable title to the property subject only to: the title company's standard exceptions; current real property taxes and assessments; survey exceptions; and other items of record disclosed to Buyer during the contingency period. Buyer shall be allowed ten (10) business days after receipt of said commitment for examination and for the making of any objections thereto, said objections to be made in writing or deemed waived. If any objections are so made, the Seller shall be allowed sixty (60) days to remove or cure such objection to Buyer's satisfaction and make such title marketable. If Seller shall decide to make no efforts to make title marketable, or is unable to make title marketable, (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof) Buyer's First Payment shall be returned and this Agreement shall be null and void and of no further force and effect. Pending correction of title, the payments hereunder required shall be postponed, but upon correction of title and within ten (10) days after written notice of correction to the Buyer, the parties shall perform this agreement according to its terms. Seller shall pay for the cost of issuing the title commitment and Buyer shall pay the owner's title insurance premium for an Owner's policy. 9. CLOSING COSTS. Subject to paragraph 4(c) above, Seller will pay the deed stamp taxes and one-half of escrow fees, and any brokerage commissions payable. Buyer will pay all recording fees, one-half of the escrow fees, the costs of a survey or survey update (if required by Buyer) and the title premium. Each party will pay its own attorneys' fees and costs to document and close of this transaction. 10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS. (a) Because the Property is subject to a triple net lease, the parties acknowledge that there shall be no need for a real estate tax prorations. However, Seller represents that to the best of its knowledge, all real estate taxes and installments of special assessments due and payable in all years prior to the year of Closing have been paid in full. Unpaid levied and pending special assessments existing on the date of Closing shall be pro-rated between Buyer and Seller as of the date of Closing. Buyer shall pay all taxes due and payable in the year after Closing and any unpaid installments of special assessments payable therewith and thereafter. (b) All income and all operating expenses from the Property shall be prorated between the parties and adjusted by them as of the date of Closing. Seller shall be entitled to all income earned and shall be responsible for all expenses incurred prior to the date of Closing, and Buyer shall be entitled to all income earned and shall be responsible for all operating expenses of the Property incurred on and after the date of closing. To the extent any of said items cannot be determined at Closing after reasonable efforts, Seller and Buyer shall compute such prorations as soon as possible after Closing and settle such adjustment as of the Closing date. 11. SELLER'S COVENANTS, REPRESENTATIONS AND AGREEMENTS. (a) Seller represents and warrants as of this date that: (i) Except for the Net Lease Agreement with Caribou Coffee and its sublessees or concessionaires, there are no other leases of the property. The Caribou Coffee Net Lease Agreement is in full force and effect and neither party is in default thereunder and the tenant is not entitled to any credits or offsets thereunder. (ii) It is not aware of any pending litigation, condemnation, or rezoning proceedings against the Property or Seller's interest in the Property. (iii) It is not aware of any contracts it has executed that would be binding on Buyer after the closing date. (iv) Seller is validly existing and duly qualified to transact business in the State of North Carolina. (v) To the best of Seller's knowledge the Property is not subject to any claim, demand, suit, unfiled lien or other proceeding of any kind which affects or may affect the Property. (vi) There are no leasing commissions, fees or other compensation owed in connection with the leasing of the Property. (vii) Provided that Buyer performs its obligations when required, Seller agrees that it will not enter into any new contracts or amend or modify any current leases that would materially affect the Property and be binding on Buyer after the closing date without Buyer's prior consent, which will not be unreasonably withheld. (viii) Seller is not a "foreign person" which would subject Buyer to the withholding tax provisions of Section 1445 of the Internal Revenue Code. (ix) To Seller's best knowledge, the Property and all business operations thereon are in compliance with all applicable federal, state and local statutes, laws and regulations. (x) Seller is not aware of, and has received no notice of, the presence, disposal, leakage or migration on to the Property of any hazardous waste or toxic substances regulated by any federal, state or local governmental authorities which may be in violation of any applicable law, rule or regulation. (xi) In addition to the acts and deeds recited herein and contemplated to be performed, executed, and delivered by Seller, Seller shall perform, execute, and deliver or cause to be performed, executed, and delivered at the Closing or after the Closing, any and all further acts, deeds, and assurances, as Buyer or the Title Company may require and Seller deems to be reasonable in order to consummate the transactions contemplated herein. (xii) Seller has all requisite power and authority to consummate the transaction contemplated by this Agreement and has by proper proceedings duly authorized the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby. (b) All covenants, representations and warranties of Seller contained herein are true and correct as of the date hereof and shall be true and correct as of the date of Closing. 12. Disclaimer. Seller and Buyer acknowledge and agree that Seller acquired the Property through a sale\leaseback with the present tenant. Seller has been an absentee landlord. Consequently, Seller has little, if any, knowledge of the physical characteristics of the Property. Accordingly, except as otherwise specifically stated in this Agreement, Seller hereby specifically disclaims any warranty, guaranty, or representation, oral or written, past, present, or future of, as to, or concerning (i) the nature and condition of the Property, including, without limitation, the water, soil, and geology, and the suitability thereof and of the Property for any and all activities and uses which Buyer may elect to conduct thereon; (ii) except for the warranty contained in the Deed to be delivered by Seller at the Closing, the nature and extent of any right of way, Lease, possession, lien, encumbrance, license, reservation, condition, or otherwise, and (iii) the compliance of the Property or its operation with any laws, ordinances, or regulations of any government or other body. Buyer acknowledges that having been given the opportunity to inspect the Property, Buyer is relying solely on its own investigation of the Property and not on any information provided or to be provided by Seller except as set forth herein. Buyer further acknowledges that the information provided and to be provided with respect to the Property by Seller was obtained from a variety of sources and Seller neither (a) has made independent investigation or verification of such information, or (b) makes any representations as to the accuracy or completeness of such information. The sale of the Property as provided for herein is made on an "AS IS" basis, and Buyer expressly acknowledges that, in consideration of the agreements of Seller herein, except as otherwise specified herein, Seller makes no Warranty or representation, Express or Implied, or arising by operation of law, including, but not limited to, any warranty or condition, habitability, tenantability, suitability for commercial purposes, merchantability, or fitness for a particular purpose, in respect of the Property. BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER HAS NO OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS THEREON, OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY, EXCEPT AS EXPRESSLY PROVIDED HEREIN. 13. CLOSING. a. Before the closing date, Seller will deposit into escrow: an executed general warranty deed on the form attached hereto as Exhibit B conveying fee simple, insurable title of the Property to Buyer; and i) Assignment and Assumption of the Caribou Coffee Lease, and any other intangible personal property. ii) Bill of sale to personal property, if any, of Seller, on the property. iii) Lien waiver affidavit iv) Form 10995 v) FIRPTA Certificate vi) Delivery of ORIGINAL Caribou Coffee lease, warranties/guaranties, if any in Seller's possession, permits/licenses, keys, if any, in Seller's possession. vii) Certified copy of Partnership Agreement for the Seller viii) Notice of transfer to tenant jointly signed by Buyer and Seller. ix) Estoppel dated no more than 30 days prior to the Closing from Caribou Coffee in form and substance reasonably satisfactory to Buyer. If Buyer and Seller cannot agree prior to the end of the Due Diligence Period on the form of Estoppel to be delivered, this Agreement shall be null and void and of no further force and effect and Buyer's First (and Second, if made) Payment shall be returned to Buyer. (b) On or Before the closing date, Buyer will deposit into escrow: the Assignment and Assumption of Lease signed by Buyer; the balance of the purchase price when required under Section 4; any additional funds required to close escrow. Both parties will sign and deliver to the escrow holder any other documents reasonably required by the escrow holder to close escrow. (c) On the closing date, if escrow is in a position to close, the escrow holder will: record the deed in the official records of the county where the Property is located; cause the title company to commit to issue the title policy; immediately deliver to Seller the portion of the purchase price deposited into escrow by cashier's check or wire transfer (less debits and prorations, if any); deliver to Seller and Buyer a signed counterpart of the escrow holder's certified closing statement; and take all other actions necessary to close escrow. 14. DEFAULT. If Buyer defaults and Seller has fully performed all obligations of Seller hereunder and satisfied all conditions to Closing to be performed by Seller, Buyer will forfeit all rights and claims and Seller will be relieved of all obligations and will be entitled as its sole and exclusive remedy, to retain all monies heretofore paid by the Buyer as liquidated damages, actual damages being difficult if not impossible to calculate and the parties having made a good faith effort to determine the same. If Seller shall default, Buyer irrevocably waives any right to file a lis pendens, a specific performance action or any other claim, action or proceeding of any type in connection with the Property or this or any other transaction involving the Property, and will not do anything to affect title to the Property or hinder, delay or prevent any other sale, lease or other transaction involving the Property (any and all of which will be null and void), unless: it has paid the First and Second Payment, performed all of its other obligations and satisfied all conditions under this Agreement within the required time periods, and unconditionally notified Seller that it stands ready to tender full performance, purchase the Property and close escrow as per this Agreement, regardless of any alleged default or misconduct by Seller. Provided, however, that in no event shall Seller be liable for any punitive, consequential or speculative damages arising out of any default by Seller hereunder. Upon a default by Seller hereunder, Buyer shall have the right to enforce an action in equity for specific performance, sue for damages available at law or terminate this Agreement by written notice to Seller and receive the immediate return of the First and Second Payment. 15. BUYER'S REPRESENTATIONS AND WARRANTIES. a. Buyer represents and warrants to Seller as follows: (i) In addition to the acts and deeds recited herein and contemplated to be performed, executed, and delivered by Buyer, Buyer shall perform, execute, and deliver or cause to be performed, executed, and delivered at the Closing or after the Closing, any and all further acts, deeds, and assurances as Seller or the Title Company may require and Buyer deems to be reasonable in order to consummate the transactions contemplated herein. (ii) Buyer has all requisite power and authority to consummate the transaction contemplated by this Agreement and has by proper proceedings duly authorized the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby. (iii) To Buyer's knowledge, neither the execution and delivery of this Agreement nor the consummation of the transaction contemplated hereby will violate or be in conflict with (a) any applicable provisions of law, (ii) any order of any court or other agency of government having jurisdiction hereof, or (iii) any agreement or instrument to which Buyer is a party or by which Buyer is bound. 16. DAMAGE, DESTRUCTION AND EMINENT DOMAIN. a. If, prior to closing, the Property or any part thereof be destroyed or further damaged by fire, the elements, or any cause, due to events occurring subsequent to the date of this Agreement, this Agreement shall become null and void, at Buyer's option exercised, if at all, by written notice to Seller within ten (10) days after Buyer has received written notice from Seller of said destruction or damage. Seller, however, shall have the right to adjust or settle any insured loss until (i) all contingencies set forth in Paragraph 6 hereof have been satisfied, or waived; and (ii) any ten-day period provided for above in this Subparagraph 16a for Buyer to elect to terminate this Agreement has expired or Buyer has, by written notice to Seller, waived Buyer's right to terminate this Agreement. If Buyer elects to proceed and to consummate the purchase despite said damage or destruction, there shall be no reduction in or abatement of the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to all insurance proceeds resulting from said damage or destruction to the extent that the same are payable with respect to damage to the Property, and are so payable to Seller under the Caribou Coffee Lease. b. If, prior to closing, the Property, or any part thereof, is taken by eminent domain, this Agreement shall become null and void, at Buyer's option. If Buyer elects to proceed and to consummate the purchase despite said taking, there shall be no reduction in, or abatement of, the purchase price, and Seller shall assign to Buyer all the Seller's right, title and interest in and to any award made, or to be made, in the condemnation proceeding. In the event that this Agreement is terminated by Buyer as provided above in Subparagraph 16a or 16b, the First and Second Payment shall be immediately returned to Buyer (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof). 17. MISCELLANEOUS. (a) This Agreement may be amended only by a written agreement signed by both Seller and Buyer, and all waivers must be in writing and signed by the waiving party. (b) Time is of the essence. This Agreement will not be construed for or against a party whether or not that party has drafted this agreement. If there is any action or proceeding between the parties relating to this Agreement the prevailing party will be entitled to recover attorney's fees and costs. This is an integrated agreement containing all agreements of the parties about the Property and the other matters described, and it supersedes any other agreements or understandings. Exhibits attached to this Agreement are incorporated into this Agreement. (c) If this escrow has not closed by thirty (30) days after the end of the Due Diligence Period, through no fault of Seller, Seller may either, at its election, extend the closing date, exercise any remedy available to it by law, or terminate this Agreement and return all funds theretofore paid by Buyer. (d) Funds to be deposited or paid by Buyer will be good and clear funds in the form of cash, cashier's checks or wire transfers. All funds deposited into escrow and held by the escrow holder will be held in an interest-bearing account. Interest on the funds in this account will accrue for Buyer's benefit, but if Buyer defaults, interest will accrue for Seller's benefit. (e) All notices from either of the parties hereto to the other shall be in writing and shall be considered to have been duly given or served if sent by first class certified mail, return receipt requested, postage prepaid, or by a nationally recognized courier service guaranteeing overnight delivery, to the party at his or its address set forth below, or to such other address as such party may hereafter designate by written notice to the other party. If to Seller: Attention: Robert P. Johnson AEI Fund Management, Inc. 1300 Minnesota World Trade Center Saint Paul, Minnesota 55101 Facsimile: (651) 227-7705 If to Buyer: Attention: Ralph H. Falls, III CCIM 320 South Tryon Street Suite 202 Charlotte, North Carolina 28202 Facsimile: (704) 333-6092 (f) Further Conditions to Closing: i) Seller has complied with and otherwise performed each of the covenants and obligations of Seller set forth herein; ii) No adverse change to the title or to the environmental condition of the Property occurs after the Due Diligence Period. (g) All representations, warranties and covenants contained herein shall, as applicable, survive the Closing and delivery of the deed for a period of one (1) year. (h) This Agreement shall be governed by end construed in accordance with the laws of the State of North Carolina. (i) This Agreement may be executed in multiple counterparts, each of which shall be an original copy and together which shall constitute one instrument. (j) Buyer intends to effect a tax-deferred exchange under Section 1031 of the Internal Revenue Code in connection with the purchase of the Property and Seller agrees to cooperate with Buyer in carrying out said exchange; provided that, seller shall not be responsible for any costs associated therewith or assume any liabilities in connection therewith. Seller agrees to execute such additional documents as may be required to give effect to this provision. When accepted, this offer will be a binding agreement for valid and sufficient consideration which will bind and benefit Buyer, Seller and their respective successors and assigns. Buyer is submitting this offer by signing a copy of this offer and delivering it to Seller along with the $5,000 First Payment, which, if accepted, will be deposited into escrow by Seller. Seller has five (5) business days within which to accept this offer. IN WITNESS WHEREOF, the Seller and Buyer have executed this Agreement effective as of the day and year first above written. BUYER: BOULEVARD EAST, LLC By: /s/ Ralph H Falls Its: Manager Accepted and agreed this ______ day of September, 1999. SELLER: AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP, a Minnesota limited partnership By: AEI Fund Management XXI, Inc., its corporate general partner By: /s/ Robert P Johnson Robert P. Johnson, President AEI INSTITUTIONAL NET LEASE FUND `93 LIMITED PARTNERSHIP By: AEI Fund Management XVIII, Inc. By: /s/ Robert P Johnson Robert P. Johnson, President EXHIBIT A Being all of Lots 1, 2, and 3, Garden Terrace Subdivision, as shown on plat recorded in book of Maps 332, Page 339, Mecklenburg County Registry, North Carolina. EX-10.4 5 PURCHASE AGREEMENT Arby's Restaurant - Montgomery, AL This AGREEMENT, entered into effective as of the 29 of September, 1999. l. PARTIES. Seller is AEI Income & Growth Fund XXI Limited Partnership which owns an undivided 24.2425% interest in the fee title to that certain real property legally described in the attached Exhibit "A" (the "Entire Property") Buyer is Beryl B. Barrett, Trustee of The Barrett Family Trust Dated 4-14-94 ("Buyer"). Seller wishes to sell and Buyer wishes to buy a portion of Seller's tenant in common interest in the Entire Property. 2. PROPERTY. The Property to be sold to Buyer in this transaction consists of an undivided 21.5614 percentage interest (hereinafter, simply the "Property") as Tenant in Common in the Entire Property. 3. PURCHASE PRICE . The purchase price for this percentage interest in the Entire Property is $250,000, all cash. 4. TERMS. The purchase price for the Property will be paid by Buyer as follows: (a) When this agreement is executed, Buyer will pay $5,000 to Seller (which shall be deposited into escrow according to the terms hereof) (the "First Payment"). The First Payment will be credited against the purchase price when and if escrow closes and the sale is completed. (b) Buyer will deposit the balance of the purchase price, $245,000 (the "Second Payment") into escrow in sufficient time to allow escrow to close on the closing date. 5. CLOSING DATE. Escrow shall close on or before October 30, 1999. Close of escrow is contingent on the closing of the sale of 315 South 100 West, Logan Utah and 120 West 300 South, Logan Utah . 6. DUE DILIGENCE. Buyer will have until the expiration of the tenth business day (The "Review Period") after delivery of each of following items, to be supplied by Seller, to conduct all of its inspections and due diligence and satisfy itself regarding each item, the Property, and this transaction. Buyer agrees to indemnify and hold Seller harmless for any loss or damage to the Entire Property or persons caused by Buyer or its agents arising out of such physical inspections of the Entire Property. (a) The original and one copy of a title insurance commitment for an Owner's Title insurance policy (see paragraph 8 below). (b) A copy of a Certificate of Occupancy or other such document certifying completion and granting permission to permanently occupy the improvements on the Entire Property as are in Seller's possession. (c) A copy of an "as built" survey of the Entire Property done concurrent with Seller's acquisition of the Property. (d) Lease (as further set forth in paragraph 11(a) below) of the Entire Property showing occupancy date, lease expiration date, rent, and Guarantys, if any, accompanied by such tenant financial statements as may have been provided most recently to Seller by the Tenant and/or Guarantors. Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL It is a contingency upon Seller's obligations hereunder that two (2) copies of Co-Tenancy Agreement in the form attached hereto duly executed by Buyer and Seller and dated on escrow closing date be delivered to the Seller on the closing date. Buyer may cancel this agreement for ANY REASON in its sole discretion by delivering a cancellation notice, via first class mail, return receipt requested, to Seller and escrow holder before the expiration of the Review Period. Such notice shall be deemed effective only upon receipt by Seller. If this Agreement is not cancelled as set forth above, the First Payment shall be non-refundable unless Seller shall default hereunder. If Buyer cancels this Agreement as permitted under this Section, except for any escrow cancellation fees and any liabilities under the first paragraph of sections 6 of this agreement (which will survive), Buyer (after execution of such documents reasonably requested by Seller to evidence the termination hereof) shall be returned its First Payment, and Buyer will have absolutely no rights, claims or interest of any type in connection with the Property or this transaction, regardless of any alleged conduct by Seller or anyone else. Unless this Agreement is canceled by Buyer pursuant to the terms hereof, if Buyer fails to make the Second Payment, Seller shall be entitled to retain the First Payment and Buyer irrevocably will be deemed to be in default under this Agreement. Seller may, at its option, retain the First Payment and declare this Agreement null and void, in which event Buyer will be deemed to have canceled this Agreement and relinquish all rights in and to the Property or Seller may exercise its rights under Section 14 hereof. If this Agreement is not canceled and the Second Payment is made when required, all of Buyer's conditions and contingencies will be deemed satisfied. 7. ESCROW. Escrow shall be opened by Seller and funds deposited in escrow upon acceptance of this agreement by both parties. The escrow holder will be a nationally-recognized escrow company selected by Seller. A copy of this Agreement will be delivered to the escrow holder and will serve as escrow instructions together with the escrow holder's standard instructions and any additional instructions required by the escrow holder to clarify its rights and duties (and the parties agree to sign these additional instructions). If there is any conflict between these other instructions and this Agreement, this Agreement will control. 8. TITLE. Closing will be conditioned on the commitment of a title company selected by Seller to issue an Owner's policy of title insurance, dated as of the close of escrow, in an amount equal to the purchase price, insuring that Buyer will own insurable title to the Property subject only to: the title company's standard exceptions; current real property taxes and assessments; survey exceptions; the rights of parties in possession pursuant to the lease defined in paragraph 11 below; and other items of record disclosed to Buyer during the Review Period. Buyer shall be allowed ten (10) days after receipt of said commitment for examination and the making of any objections to marketability thereto, said objections to be made in writing or deemed waived. If any objections are so made, the Seller shall be allowed eighty (80) days to make such title marketable or in the alternative to obtain a commitment for insurable title insuring over Buyer's objections. If Seller shall decide to make no efforts to make title marketable, or is unable to make title marketable or obtain insurable title, (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof) Buyer's First Payment shall be returned and this Agreement shall be null and void and of no further force and effect. Seller has no obligation to spend any funds or make any effort to satisfy Buyer's objections if any. Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL Pending satisfaction of Buyer's objections, the payments hereunder required shall be postponed, but upon satisfaction of Buyer's objections and within ten (10) days after written notice of satisfaction of Buyer's objections to the Buyer, the parties shall perform this Agreement according to its terms. 9. CLOSING COSTS. Seller will pay one-half of escrow fees, the cost of the title commitment and any brokerage commissions payable. The Buyer will pay the cost of issuing a Standard Owners Title Insurance Policy in the full amount of the purchase price, if Buyer shall decide to purchase the same. Buyer will pay all recording fees, one-half of the escrow fees, and the cost of an update to the Survey in Sellers possession (if an update is required by Buyer.) Each party will pay its own attorney's fees and costs to document and close this transaction. 10. REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS. (a) Because the Entire Property (of which the Property is a part) is subject to a triple net lease (as further set forth in paragraph 11(a)(i), the parties acknowledge that there shall be no need for a real estate tax proration. However, Seller represents that to the best of its knowledge, all real estate taxes and installments of special assessments due and payable in all years prior to the year of Closing have been paid in full. Unpaid real estate taxes and unpaid levied and pending special assessments existing on the date of Closing shall be the responsibility of Buyer and Seller in proportion to their respective Tenant in Common interests, pro-rated, however, to the date of closing for the period prior to closing, which shall be the responsibility of Seller if Tenant shall not pay the same. Seller and Buyer shall likewise pay all taxes due and payable in the year after Closing and any unpaid installments of special assessments payable therewith and thereafter, if such unpaid levied and pending special assessments and real estate taxes are not paid by any tenant of the Entire Property. (b) All income and all operating expenses from the Entire Property shall be prorated between the parties and adjusted by them as of the date of Closing. Seller shall be entitled to all income earned and shall be responsible for all expenses incurred prior to the date of Closing, and Buyer shall be entitled to its proportionate share of all income earned and shall be responsible for its proportionate share of all operating expenses of the Entire Property incurred on and after the date of closing. 11. SELLER'S REPRESENTATION AND AGREEMENTS. (a) Seller represents and warrants as of this date that: (i) Except for the lease in existence between AEI Income and Growth Fund XXI Limited Partnership and AEI Institutional Net Lease Fund '93 Limited Partnership (as "Landlord") and RTM Gulf Coast, Inc. ("Tenant") dated May 31, 1995, Seller is not aware of any leases of the Property. The above referenced lease agreement has a first right of refusal in favor of the Tenant as set forth in Article 35 of said lease agreement, which right shall apply to any attempted disposition of the Property by Buyer after this transaction. The above lease also has an option to purchase in favor of the tenant as set forth in article 34 of said lease. (ii) It is not aware of any pending litigation or condemnation proceedings against the Property or Seller's interest in the Property. (iii) Except as previously disclosed to Buyer and as permitted in paragraph (b) below, Seller is not aware of any contracts Seller has executed that would be binding on Buyer after the closing date. Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL (b) Provided that Buyer performs its obligations when required, Seller agrees that it will not enter into any new contracts that would materially affect the Property and be binding on Buyer after the Closing Date without Buyer's prior consent, which will not be unreasonably withheld. However, Buyer acknowledges that Seller retains the right both prior to and after the Closing Date to freely transfer all or a portion of Seller's remaining undivided interest in the Entire Property, provided such sale shall not encumber the Property being purchased by Buyer in violation of the terms hereof or the contemplated Co-Tenancy Agreement. 12. DISCLOSURES. (a) Seller has not received any notice of any material, physical, or mechanical defects of the Entire Property, including without limitation, the plumbing, heating, air conditioning, ventilating, electrical system. To the best of Seller's knowledge without inquiry, all such items are in good operating condition and repair and in compliance with all applicable governmental, zoning, and land use laws, ordinances, regulations and requirements. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (b) Seller has not received any notice that the use and operation of the Entire Property is not in full compliance with applicable building codes, safety, fire, zoning, and land use laws, and other applicable local, state and federal laws, ordinances, regulations and requirements. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (c) Seller knows of no facts nor has Seller failed to disclose to Buyer any fact known to Seller which would prevent the Tenant from using and operating the Entire Property after the Closing in the manner in which the Entire Property has been used and operated prior to the date of this Agreement. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (d) Seller has not received any notice that the Entire Property is in violation of any federal, state or local law, ordinance, or regulations relating to industrial hygiene or the environmental conditions on, under, or about the Entire Property, including, but not limited to, soil, and groundwater conditions. To the best of Seller's knowledge, there is no proceeding or inquiry by any governmental authority with respect to the presence of Hazardous Materials on the Entire Property or the migration of Hazardous Materials from or to other property. Buyer agrees that Seller will have no liability of any type to Buyer or Buyer's successors, assigns, or affiliates in connection with any Hazardous Materials on or in connection with the Entire Property either before or after the Closing Date, except such Hazardous Materials on or in connection with the Entire Property arising out of Seller's gross negligence or intentional misconduct. If Seller shall receive any notice to the contrary prior to Closing, Seller will inform Buyer prior to Closing. (e) Buyer agrees that it shall be purchasing the Property in its then present condition, as is, where is, and Seller has no obligations to construct or repair any improvements thereon or to perform any other act regarding the Property, except as expressly provided herein. (f) Buyer acknowledges that, having been given the opportunity to inspect the Entire Property and such financial information on the Lessee and Guarantors of the Lease as Buyer or its advisors shall request, if in Seller's possession, Buyer is relying solely on its own investigation of the Property and not on any information provided by Seller or to be provided except as set forth herein. Buyer further acknowledges that the information provided and to be provided by Seller with respect to the Property, the Entire Property Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL and to the Lessee and Guarantors of Lease was obtained from a variety of sources and Seller neither (a) has made independent investigation or verification of such information, or (b) makes any representations as to the accuracy or completeness of such information except as herein set forth. The sale of the Property as provided for herein is made on an "AS IS" basis, and Buyer expressly acknowledges that, in consideration of the agreements of Seller herein, except as otherwise specified herein in paragraph 11(a) and (b) above and this paragraph 12, Seller makes no Warranty or representation, Express or Implied, or arising by operation of law, including, but not limited to, any warranty of condition, habitability, tenantability, suitability for commercial purposes, merchantability, or fitness for a particular purpose, in respect of the Property. The provisions (d) - (f) above shall survive Closing. 13. CLOSING. (a) Before the closing date, Seller will deposit into escrow an executed special warranty deed warranting title against lawful claims by, through, or under a conveyance from Seller, but not further or otherwise, conveying insurable title of the Property to Buyer, subject to the exceptions contained in paragraph 8 above. (b) On or before the closing date, Buyer will deposit into escrow: the balance of the purchase price when required under Section 4; any additional funds required of Buyer, (pursuant to this agreement or any other agreement executed by Buyer) to close escrow. Both parties will sign and deliver to the escrow holder any other documents reasonably required by the escrow holder to close escrow. (c) On the closing date, if escrow is in a position to close, the escrow holder will: record the deed in the official records of the county where the Property is located; cause the title company to commit to issue the title policy; immediately deliver to Seller the portion of the purchase price deposited into escrow by cashier's check or wire transfer (less debits and prorations, if any); deliver to Seller and Buyer a signed counterpart of the escrow holder's certified closing statement and take all other actions necessary to close escrow. 14. DEFAULTS. If Buyer defaults, Buyer will forfeit all rights and claims and Seller will be relieved of all obligations and will be entitled to retain all monies heretofore paid by the Buyer. In addition, Seller shall retain all remedies available to Seller at law or in equity. If Seller shall default, Buyer irrevocably waives any rights to file a lis pendens, a specific performance action or any other claim, action or proceeding of any type in connection with the Property or this or any other transaction involving the Property, and will not do anything to affect title to the Property or hinder, delay or prevent any other sale, lease or other transaction involving the Property (any and all of which will be null and void), unless: it has paid the First Payment, deposited the balance of the Second Payment for the purchase price into escrow, performed all of its other obligations and satisfied all conditions under this Agreement, and unconditionally notified Seller that it stands ready to tender full performance, purchase the Property and close escrow as per this Agreement, regardless of any alleged default or misconduct by Seller. Provided, however, that in no event shall Seller be liable for any actual, punitive, consequential or speculative damages arising out of any default by Seller hereunder. 15. BUYER'S REPRESENTATIONS AND WARRANTIES. a. Buyer represents and warrants to Seller as follows: Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL (i) In addition to the acts and deeds recited herein and contemplated to be performed, executed, and delivered by Buyer, Buyer shall perform, execute and deliver or cause to be performed, executed, and delivered at the Closing or after the Closing, any and all further acts, deeds and assurances as Seller or the Title Company may require and be reasonable in order to consummate the transactions contemplated herein. (ii) Buyer has all requisite power and authority to consummate the transaction contemplated by this Agreement and has by proper proceedings duly authorized the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby. (iii) To Buyer's knowledge, neither the execution and delivery of this Agreement nor the consummation of the transaction contemplated hereby will violate or be in conflict with (a) any applicable provisions of law, (b) any order of any court or other agency of government having jurisdiction hereof, or (c) any agreement or instrument to which Buyer is a party or by which Buyer is bound. 16. DAMAGES, DESTRUCTION AND EMINENT DOMAIN. (a) If, prior to closing, the Property or any part thereof should be destroyed or further damaged by fire, the elements, or any cause, due to events occurring subsequent to the date of this Agreement to the extent that the cost of repair exceeds $10,000.00, this Agreement shall become null and void, at Buyer's option exercised, if at all, by written notice to Seller within ten (10) days after Buyer has received written notice from Seller of said destruction or damage. Seller, however, shall have the right to adjust or settle any insured loss until (i) all contingencies set forth in Paragraph 6 hereof have been satisfied, or waived; and (ii) any ten-day period provided for above in this Subparagraph 16a for Buyer to elect to terminate this Agreement has expired or Buyer has, by written notice to Seller, waived Buyer's right to terminate this Agreement. If Buyer elects to proceed and to consummate the purchase despite said damage or destruction, there shall be no reduction in or abatement of the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to all insurance proceeds (pro-rata in relation to the Entire Property) resulting from said damage or destruction to the extent that the same are payable with respect to damage to the Property, subject to rights of any Tenant of the Entire Property. If the cost of repair is less than $10,000.00, Buyer shall be obligated to otherwise perform hereinunder with no adjustment to the Purchase Price, reduction or abatement, and Seller shall assign Seller's right, title and interest in and to all insurance proceeds pro-rata in relation to the Entire Property, subject to rights of any Tenant of the Entire Property. (b) If, prior to closing, the Property, or any part thereof, is taken by eminent domain, this Agreement shall become null and void, at Buyer's option. If Buyer elects to proceed and to consummate the purchase despite said taking, there shall be no reduction in, or abatement of, the purchase price, and Seller shall assign to Buyer the Seller's right, title, and interest in and to any award made, or to be made, in the condemnation proceeding pro-rata in relation to the Entire Property, subject to rights of any Tenant of the Entire Property. In the event that this Agreement is terminated by Buyer as provided above in Subparagraph 16a or 16b, the First Payment shall be immediately returned to Buyer (after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof). 17. BUYER'S 1031 TAX FREE EXCHANGE. Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL While Seller acknowledges that Buyer is purchasing the Property as "replacement property" to accomplish a tax free exchange, Buyer acknowledges that Seller has made no representations, warranties, or agreements to Buyer or Buyer's agents that the transaction contemplated by the Agreement will qualify for such tax treatment, nor has there been any reliance thereon by Buyer respecting the legal or tax implications of the transactions contemplated hereby. Buyer further represents that it has sought and obtained such third party advice and counsel as it deems necessary in regards to the tax implications of this transaction. Buyer wishes to novate/assign the ownership rights and interest of this Purchase Agreement to Starker Services, Inc. which will act as Accommodator to perfect the 1031 exchange by preparing an agreement of exchange of Real Property whereby Starker Services, Inc. will be an independent third party purchasing the ownership interest in subject property from Seller and selling the ownership interest in subject property to Buyer under the same terms and conditions as documented in this Purchase Agreement. Buyer asks the Seller, and Seller agrees to cooperate in the perfection of such an exchange if at no additional cost or expense to Seller or delay in time. Buyer hereby indemnifies and holds Seller harmless from any claims and/or actions resulting from said exchange. Pursuant to the direction of Starker Services, Inc., Seller will deed the Property to Buyer. 18. CANCELLATION If any party elects to cancel this Contract because of any breach by another party or because escrow fails to close by the agreed date, the party electing to cancel shall deliver to escrow agent a notice containing the address of the party in breach and stating that this Contract shall be cancelled unless the breach is cured within 13 days following the delivery of the notice to the escrow agent. Within three days after receipt of such notice, the escrow agent shall send it by United States Mail to the party in breach at the address contained in the Notice and no further notice shall be required. If the breach is not cured within the 13 days following the delivery of the notice to the escrow agent, this Contract shall be cancelled. 19. MISCELLANEOUS. (a) This Agreement may be amended only by written agreement signed by both Seller and Buyer, and all waivers must be in writing and signed by the waiving party. Time is of the essence. This Agreement will not be construed for or against a party whether or not that party has drafted this Agreement. If there is any action or proceeding between the parties relating to this Agreement the prevailing party will be entitled to recover attorney's fees and costs. This is an integrated agreement containing all agreements of the parties about the Property and the other matters described, and it supersedes any other agreements or understandings. Exhibits attached to this Agreement are incorporated into this Agreement. (b) If this escrow has not closed by October 30, 1999, through no fault of Seller, Seller may either, at its election, extend the closing date or exercise any remedy available to it by law, including terminating this Agreement. (c) Funds to be deposited or paid by Buyer must be good and clear funds in the form of cash, cashier's checks or wire transfers. (d) All notices from either of the parties hereto to the other shall be in writing and shall be considered to have been duly given or served if sent by first class certified mail, return receipt requested, postage prepaid, or by a nationally recognized courier service guaranteeing overnight delivery to the party at his or its address set forth below, or to such other address as such party may hereafter designate by written notice to the other party. Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL If to Seller: Attention: Robert P. Johnson AEI Income & Growth Fund XXI Limited Partnership 1300 Minnesota World Trade Center 30 E. 7th Street St. Paul, MN 55101 If to Buyer: Beryl B. Barrett, Trustee The Barrett Family Trust Dated 4-14-94 177 Boynton Road Layton, UT 84040 When accepted, this offer will be a binding agreement for valid and sufficient consideration which will bind and benefit Buyer, Seller and their respective successors and assigns. Buyer is submitting this offer by signing a copy of this offer and delivering it to Seller. Seller has five (5) business days from receipt within which to accept this offer. IN WITNESS WHEREOF, the Seller and Buyer have executed this Agreement effective as of the day and year above first written. BUYER: The Barrett Family Trust Dated 4-14-94 By: /s/ Beryl B Barrett, Trustee Beryl B. Barrett, Trustee SELLER: AEI Income & Growth Fund XXI Limited Partnership By: AEI Fund Management XXI, Inc., its corporate general partner By: /s/ Robert P Johnson Robert P. Johnson, President Buyer Initial: /s/ BB Purchase Agreement for Arby's Restaurant - Montgomery, AL EXHIBIT "A" Commencing at the Northeast corner of the Southeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama, thence West a distance of 535.66 feet, thence North 328.83 feet to the Southwest corner of Lot 1-T, of the Taco Bell Plat No. 3, Zelda Road as recorded in the Montgomery County Probate Office, said point being on the curve of the Norterly right of way of Zelda Roas, said curve having a radius of 392.86 feet, a central angle of 30 13' 45" and a chord of 204.88 feet with a chord bearing of S 59 16' 00" E, thence southeasterly along said curve to the end of said curve, said point being the Southeast corner of said Lot 1-T, also being the point of beginning. Thence N 39 28' 53" E, from the point of beginning along the southeasterly line of said Lot 1-T, a distance of 152.21 feet to an iron pin found on the southerly right of way of Interstate Hiwhway I-85; thence S 52 30' 39" E, along the southerly right of way of Interstate Highway I-85 a distance of 311.90 feet to a found iron pin; thence S 74 07' 41" W a distance of 270.89 feet to a found iron pin on the northerly right of way of Zelda Road; thence N 20 20' 05" W along the Northerly right of way of Zelda Road a distance of 28.41 feet to the beginning of the curve of the northerly right of way of Zelda Road, said curve having a radius of 392.86 feet, a central angle of 20 38' 00" and a chord of 140.71 feet with a chord bearing of N 31 38' 47" W; thence Northwesterly along said curve to the end of said curve, said point being the southeast corner of said Lot 1-T, and also being the point of beginning. The said tract of land is located in the Northeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama. EX-10.5 6 PROPERTY CO-TENANCY OWNERSHIP AGREEMENT (Arby's Restaurant - Montgomery, AL) THIS CO-TENANCY AGREEMENT, Made and entered into as of the 22nd day of October, 1999, by and between Beryl B. Barrett, Trustee of The Barrett Family Trust Dated 4-14-94, (hereinafter called "Barrett") and AEI Income & Growth Fund XXI Limited Partnership (hereinafter called "Fund XXI") Barrett, Fund XXI (and any other Owner in Fee where the context so indicates) being hereinafter sometimes collectively called "Co-Tenants" and referred to in the neuter gender). WITNESSETH: WHEREAS, Fund XXI presently owns an undivided 2.6811% interest in and to,and Barrett owns an undivided 21.5614% interest in and to, and VTA owns an undivided 21.5614% interest in and to, and Roland Terry owns an undivided 20.3540% interest in and to and the Catharine C. Whittenburg Testamentary Trust for J. A. Whittenburg IV or Assigns presently owns an undivided 21.5614% interest in and to, and the Cheung Living Trust Dated July 27, 1989 presently owns an undivided 12.2807% interest in and to the land, situated in the City of Montgomery, County of Montgomery, and State of AL, (legally described upon Exhibit A attached hereto and hereby made a part hereof) and in and to the improvements located thereon (hereinafter called "Premises"); WHEREAS, The parties hereto wish to provide for the orderly operation and management of the Premises and Barrett's interest by Fund XXI; the continued leasing of space within the Premises; for the distribution of income from and the pro-rata sharing in expenses of the Premises. NOW THEREFORE, in consideration of the purchase by Barrett of an undivided interest in and to the Premises, for at least One Dollar ($1.00) and other good and valuable consideration by the parties hereto to one another in hand paid, the receipt and sufficiency of which are hereby acknowledged, and of the mutual covenants and agreements herein contained, it is hereby agreed by and between the parties hereto, as follows: 1. The operation and management of the Premises shall be delegated to Fund XXI, or its designated agent, successors or assigns. Provided, however, if Fund XXI shall sell all of its interest in the Premises, the duties and obligations of Fund XXI respecting management of the Premises as set forth herein, including but not limited to paragraphs 2, 3, and 4 hereof, shall be exercised by the holder or holders of a majority undivided co- tenancy interest in the Premises. Except as hereinafter expressly provided to the contrary, each of the parties hereto agrees to be bound by the decisions of Fund XXI with respect to all administrative, operational and management matters of the property comprising the Premises, including but not limited to the management of the net lease agreement for the Premises. Barrett hereto hereby designates Fund XXI as its sole and exclusive agent to deal with, and Fund XXI retains the sole right to deal with, any property agent or tenant and to negotiate and enter into, on terms and provisions satisfactory to Fund XXI, monitor, execute and enforce the terms of leases of space within the Premises, including but not limited to any amendments, consents to assignment, sublet, releases or modifications to leases or guarantees of lease or easements affecting the Premises, on behalf of Barrett As long as Fund XXI owns an interest in the Premises, only Fund XXI may obligate Barrett with respect to any expense for the Premises. As further set forth in paragraph 2 hereof, Fund XXI agrees to require any lessee of the Premises to name Barrett as an insured or additional insured in all insurance policies provided for, or contemplated by, any lease on the Premises. Fund XXI shall use its best efforts to obtain Co-Tenant Initial: /s/ BB Co-Tenancy Agreement for Arby's - Montgomery, AL endorsements adding Co-Tenants to said policies from lessee within 30 days of commencement of this agreement. In any event, Fund XXI shall distribute any insurance proceeds it may receive, to the extent consistent with any lease on the Premises, to the Co-Tenants in proportion to their respective ownership of the Premises. 2. Income and expenses shall be allocated among the Co-Tenants in proportion to their respective share(s) of ownership. Shares of net income shall be pro-rated for any partial calendar years included within the term of this Agreement. Fund XXI may offset against, pay to itself and deduct from any payment due to Barrett under this Agreement, and may pay to itself the amount of Barrett's share of any reasonable expenses of the Premises which are not paid by Barrett to Fund XXI or its assigns, within ten (10) days after demand by Fund XXI. In the event there is insufficient operating income from which to deduct Barrett's unpaid share of operating expenses, Fund XXI may pursue any and all legal remedies for collection. Operating Expenses shall include all normal operating expense, including but not limited to: maintenance, utilities, supplies, labor, management, advertising and promotional expenses, salaries and wages of rental and management personnel, leasing commissions to third parties, a monthly accrual to pay insurance premiums, real estate taxes, installments of special assessments and for structural repairs and replacements, management fees, legal fees and accounting fees, but excluding all operating expenses paid by tenant under terms of any lease agreement of the Premises. Barrett has no requirement to, but has, nonetheless elected to retain, and agrees to annually reimburse, Fund XXI in the amount of $700.00 for the expenses, direct and indirect, incurred by Fund XXI in providing Barrett with quarterly accounting and distributions of Barrett's share of net income and for tracking, reporting and assessing the calculation of Barrett's share of operating expenses incurred from the Premises. This invoice amount shall be pro-rated for partial years and Barrett authorizes Fund XXI to deduct such amount from Barrett's share of revenue from the Premises. Barrett may terminate this agreement in this paragraph respecting accounting and distributions at any time and attempt to collect its share of rental income directly from the tenant; however, enforcement of all other provisions of the lease remains the sole right of Fund XXI pursuant to Section 1 hereof. Fund XXI may terminate its obligation under this paragraph upon 30 days notice to Barrett prior to the end of each anniversary hereof, unless agreed in writing to the contrary. 3. Full, accurate and complete books of account shall be kept in accordance with generally accepted accounting principles at Fund XXI's principal office, and each Co-Tenant shall have access to such books and may inspect and copy any part thereof during normal business hours. Within ninety (90) days after the end of each calendar year during the term hereof, Fund XXI shall prepare an accurate income statement for the ownership of the Premises for said calendar year and shall furnish copies of the same to all Co-Tenants. Quarterly, as its share, Barrett shall be entitled to receive 21.5614% of all items of income and expense generated by the Premises. Upon receipt of said accounting, if the payments received by each Co-Tenant pursuant to this Paragraph 3 do not equal, in the aggregate, the amounts which each are entitled to receive proportional to its share of ownership with respect to said calendar year pursuant to Paragraph 2 hereof, an appropriate adjustment shall be made so that each Co-Tenant receives the amount to which it is entitled. 4. If Net Income from the Premises is less than $0.00 (i.e., the Premises operates at a loss), or if capital improvements, repairs, and/or replacements, for which adequate reserves do not exist, need to be made to the Premises, the Co-Tenants, upon receipt of a written request therefor from Fund XXI, shall, within fifteen (15) business days after receipt of notice, make payment to Fund XXI sufficient to pay said net operating losses and to provide necessary operating capital Co-Tenant Initial: /s/ BB Co-Tenancy Agreement for Arby's - Montgomery, AL for the premises and to pay for said capital improvements, repairs and/or replacements, all in proportion to their undivided interests in and to the Premises. 5. Co-Tenants may, at any time, sell, finance, or otherwise create a lien upon their interest in the Premises but only upon their interest and not upon any part of the interest held, or owned, by any other Co-Tenant. All Co-Tenants reserve the right to escrow proceeds from a sale of their interests in the Premises to obtain tax deferral by the purchase of replacement property. 6. If any Co-Tenant shall be in default with respect to any of its obligations hereunder, and if said default is not corrected within thirty (30) days after receipt by said defaulting Co- Tenant of written notice of said default, or within a reasonable period if said default does not consist solely of a failure to pay money, the remaining Co-Tenant(s) may resort to any available remedy to cure said default at law, in equity, or by statute. 7. This Co-Tenancy agreement shall continue in full force and effect and shall bind and inure to the benefit of the Co-Tenant and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns until June 1, 2025 or upon the sale of the entire Premises in accordance with the terms hereof and proper disbursement of the proceeds thereof, whichever shall first occur. Unless specifically identified as a personal contract right or obligation herein, this agreement shall run with any interest in the Premises and with the title thereto. Once any person, party or entity has ceased to have an interest in fee in any portion of the Premises, it shall not be bound by, subject to or benefit from the terms hereof; but its heirs, executors, administrators, personal representatives, successors or assigns, as the case may be, shall be substituted for it hereunder. Barrett agrees to notify Fund XXI upon the appointment of any successor trustee, or any amendment of The Barrett Family Trust affecting the powers of the trustees to manage or dispose of The Barrett Family Trust's interest in the premises. 8. Any notice or election required or permitted to be given or served by any party hereto to, or upon any other, shall be given to all known Co-Tenants and deemed given or served in accordance with the provisions of this Agreement, if said notice or elections addressed as follows; If to Fund XXI: AEI Income and Growth Fund XXI Limited Partnership 1300 Minnesota World Trade Center 30 E. Seventh Street St. Paul, Minnesota 55101 If to Barrett: Beryl B. Barrett, Trustee The Barrett Family Trust Dated 4-14-94 177 Boynton Road Layton, UT 84040 If to VTA: VTA Building Company 12825 Falcon Drive Apple Valley, MN 55124 If to Cheung: Co-Tenant Initial: /s/ BB Co-Tenancy Agreement for Arby's - Montgomery, AL Howard Owyoung Cheung Rosemarie Cheung 10 Live Oak Court Hillsborough, CA 94010 If to Whittenburg: The Catharine C. Whittenburg Testamentary Trust Post Office Box 26 Amarillo, TX 79105 If to Terry: Roland Terry 154 Little Hendricks Pk #20612 Jasper, GA 30143 Each mailed notice or election shall be deemed to have been given to, or served upon, the party to which addressed on the date the same is deposited in the United States certified mail, return receipt requested, postage prepaid, or given to a nationally recognized courier service guaranteeing overnight delivery as properly addressed in the manner above provided. Any party hereto may change its address for the service of notice hereunder by delivering written notice of said change to the other parties hereunder, in the manner above specified, at least ten (10) days prior to the effective date of said change. 9. This Agreement shall not create any partnership or joint venture among or between the Co-Tenants or any of them, and the only relationship among and between the Co-Tenants hereunder shall be that of owners of the premises as tenants in common subject to the terms hereof. 10. The unenforceability or invalidity of any provision or provisions of this Agreement as to any person or circumstances shall not render that provision, nor any other provision hereof, unenforceable or invalid as to any other person or circumstances, and all provisions hereof, in all other respects, shall remain valid and enforceable. 11. In the event any litigation arises between the parties hereto relating to this Agreement, or any of the provisions hereof, the party prevailing in such action shall be entitled to receive from the losing party, in addition to all other relief, remedies and damages to which it is otherwise entitled, all reasonable costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in connection with said litigation. REST OF PAGE INTENTIONALLY LEFT BLANK Co-Tenant Initial: /s/ BB Co-Tenancy Agreement for Arby's - Montgomery, AL The Barrett Family Trust Dated 4-14-94 By: /s/ Beryl B Barrett Beryl B. Barrett, Trustee STATE OF UTAH) [notary seal] ) ss COUNTY OF Davis) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 29 day of September, 1999, Beryl B Barrett who executed the foregoing instrument in said capacity. /s/ Teri L Short Notary Public Fund XXI AEI Income & Growth Fund XXI Limited Partnership By: AEI Fund Management XXI, Inc., its corporate general partner By: /s/ Robert P Johnson Robert P. Johnson, President State of Minnesota ) ) ss. County of Ramsey ) I, a Notary Public in and for the state and county of aforesaid, hereby certify there appeared before me this 22nd day of October, 1999, Robert P. Johnson, President of AEI Fund Management XXI, Inc., corporate general partner of AEI Income & Growth Fund XXI Limited Partnership who executed the foregoing instrument in said capacity and on behalf of the corporation in its capacity as corporate general partner, on behalf of said limited partnership. /s/ Barbara J Kochevar Notary Public [notary seal] Co-Tenant Initial: /s/ BB Co-Tenancy Agreement for Arby's - Montgomery, AL EXHIBIT "A" Commencing at the Northeast corner of the Southeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama, thence West a distance of 535.66 feet, thence North 328.83 feet to the Southwest corner of Lot 1-T, of the Taco Bell Plat No. 3, Zelda Road as recorded in the Montgomery County Probate Office, said point being on the curve of the Norterly right of way of Zelda Roas, said curve having a radius of 392.86 feet, a central angle of 30 13' 45" and a chord of 204.88 feet with a chord bearing of S 59 16' 00" E, thence southeasterly along said curve to the end of said curve, said point being the Southeast corner of said Lot 1-T, also being the point of beginning. Thence N 39 28' 53" E, from the point of beginning along the southeasterly line of said Lot 1-T, a distance of 152.21 feet to an iron pin found on the southerly right of way of Interstate Hiwhway I-85; thence S 52 30' 39" E, along the southerly right of way of Interstate Highway I-85 a distance of 311.90 feet to a found iron pin; thence S 74 07' 41" W a distance of 270.89 feet to a found iron pin on the northerly right of way of Zelda Road; thence N 20 20' 05" W along the Northerly right of way of Zelda Road a distance of 28.41 feet to the beginning of the curve of the northerly right of way of Zelda Road, said curve having a radius of 392.86 feet, a central angle of 20 38' 00" and a chord of 140.71 feet with a chord bearing of N 31 38' 47" W; thence Northwesterly along said curve to the end of said curve, said point being the southeast corner of said Lot 1-T, and also being the point of beginning. The said tract of land is located in the Northeast Quarter of the Southwest Quarter of Section 16, Township 16 North, Range 18 East, Montgomery City and County, Alabama. EX-27 7
5 0000931755 AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP 9-MOS DEC-31-1999 SEP-30-1999 908,516 0 0 0 0 908,516 18,247,888 (1,149,973) 18,006,431 424,272 0 0 0 0 17,582,159 18,006,431 0 1,434,440 0 626,530 0 0 0 971,373 0 971,373 0 0 0 971,373 40.36 40.36
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