Exhibit 10
AEI INCOME & GROWTH FUND 24 LLC
IMPOUNDMENT AGREEMENT
THIS IMPOUNDMENT AGREEMENT, made and entered
into this day of , 2000, by and among AEI
INCOME & GROWTH FUND 24 LLC, (the "Fund"), AEI
Securities Incorporated ("AEI") and Fidelity Bank,
Edina, Minnesota (the "Bank");
WITNESSETH THAT:
WHEREAS, the Fund proposes to issue and sell
to the public up to 24,000 units of limited liability
company interest (the "Units"), at a subscription
price of $1,000 per Unit, and has entered into an
agreement (the "Dealer-Manager Agreement") with AEI
Securities Incorporated (the "Dealer-Manager")
pursuant to which the Dealer-Manager and various
members of the National Association of Securities
Dealers, Inc. (collectively, the "Dealers") will offer
the Units for sale to the public for and on behalf of
the Fund; and
WHEREAS, the Dealer-Manager Agreement
provides that all funds received by Dealers in
connection with the sale of Units shall be transmitted
to the Dealer-Manager as processing broker-dealer and
promptly deposited in an escrow account with the Bank
until the offering of Units is terminated or until the
minimum $1,500,000 of subscription proceeds have been
obtained; and
WHEREAS, the Fund desires to have the Bank
deposit such funds in an escrow account until the
termination of the offering of Units, and the Bank has
agreed to serve as Impoundment Agent for such purpose.
NOW, THEREFORE, for and in consideration of
the covenants and agreements set forth below, the
parties agree as follows:
l. APPOINTMENT OF IMPOUNDMENT AGENT;
DELIVERY OF FUNDS TO ESCROW ACCOUNT.
The Fund hereby appoints the Bank as
Impoundment Agent to receive and hold all proceeds
from the sale of Units for the term of this
Impoundment Agreement, and to invest the same in such
manner as it shall be directed to in writing by the
Fund. Prior to initial release of funds in accordance
with Section 3(a), all proceeds will be invested in a
bank account, bank certificate of deposit or money
market account issued by a bank, or in short-term
securities issued by or guaranteed by the United
States Government. All subscription checks shall be
payable to "Fidelity Bank-AEI Real Estate Escrow."
Dealers shall transmit all subscription checks for
Units to the Dealer-Manager by noon of the business
day following receipt of such checks and the Dealer-
Manager shall transmit all such checks, or return
unaccepted checks to subscribers, as soon as
practicable thereafter but in any event by the end
of the second business day following receipt of
such checks by the Dealer-Manager.
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2. IDENTITY OF SUBSCRIBERS; OWNERSHIP OF
FUNDS DEPOSITED.
The Dealer-Manager shall deliver to the
Impoundment Agent, with each deposit of checks, a list
which contains the names and addresses of all persons
who have subscribed for Units, the amount of money
tendered by each subscriber and the date on which the
funds were received from each subscriber. The
Impoundment Agent shall hold all funds received for
the individual account of each subscriber identified
by the Dealer-Manager. The funds, as well as any
interest or income earned thereon, shall remain the
property of the subscribers until released to the Fund
as hereinafter provided, and shall not be subject to
any liens by the Impoundment Agent or judgments or
claims against Dealers, the Dealer-Manager or the
Fund.
3. DISBURSEMENT OF FUNDS.
(a) After such time as the Impoundment
Agent has received not less than $1,500,000 in
subscription amounts, the Impoundment Agent shall
forthwith notify the Commissioner of Securities for
the State of Minnesota or an agent thereof (the
"Commissioner") in writing of the escrow of such
amounts. Upon receipt by the Impoundment Agent of
written authorization from the Commissioner, said
Impoundment Agent, on demand of AFM, shall pay over to
the Fund all or any portion of the impounded funds.
If $1,500,000 in subscription amount is not received
by the Impoundment Agent during the term of this
Impoundment Agreement, then, within three business
days after the last day of the term of this
Impoundment Agreement, the Impoundment Agent shall
notify the Commissioner in writing that the conditions
of this Impoundment Agreement have not been satisfied,
and shall within a reasonable time, but in no event
more than thirty (30) days after the last day of the
term of this Impoundment Agreement refund to each
subscriber the face amount of payments made in
subscription for Units, together with his or her pro
rata share of interest or income, if any, earned on
the funds deposited in escrow, and shall then notify
the Commissioner in writing of such refund. After
receipt by the Impoundment Agent of written
authorization for the initial release of funds
hereunder, the Impoundment Agent shall release to the
Fund, from time to time, any funds deposited pursuant
to this Agreement, upon the written request of the
Fund and without any necessity of further
authorization from the Commission.
(b) The Fund shall send written notice of
each request for disbursement of funds which shall
specify the subscriptions that have been accepted on
behalf of the Fund, the commissions and nonaccountable
expenses payable on such subscriptions, the
subscriptions that have been rejected, and the
subscriptions that have been deposited in escrow but
upon which acceptance by the Fund remains pending. In
accordance with such notice, the Impoundment Agent
shall disburse funds:
(i) representing commissions and
nonaccountable expenses on accepted subscriptions
directly to the Dealer-Manager;
(ii) representing accepted subscription
proceeds net of commissions and nonaccountable
expenses-directly to the account of the Fund as
authorized in such notice;
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(iii) representing interest accrued on
accepted subscriptions proceeds-directly to the
subscribers; and
(iv) representing rejected subscription
proceeds and interest accrued thereon-directly to
the subscribers.
All subscription proceeds upon which acceptance
remains pending shall be held by the Impoundment Agent
for disbursement in accordance with the direction
contained in the next succeeding notice.
4. TERM OF IMPOUNDMENT.
This Impoundment Agreement shall terminate
on the 365th day following the effective date of the
registration statement relating to the Units or on
such earlier date as all funds are released to the
Fund as provided in Section 3 above; provided,
however, that if $1,500,000 in subscription amounts
have been received prior to the 365th day and the Fund
elects to extend the offering of Units in accordance
with the registration statement relating thereto, this
Impoundment Agreement shall terminate upon the
expiration of such extension (but not, in any event,
later than the 730th day after the effective date).
The Fund and the Dealer-Manager may also terminate
this Impoundment Agreement at any time upon notice to
the Impoundment Agent that the Fund has made a
decision to terminate the offer and sale of Units.
6. CONSENT OF COMMISSIONER TO RELEASE
FUNDS.
Until the Impoundment Agent has received
$1,500,000 in subscription amounts no funds shall be
released to the Fund hereunder except upon the express
written authorization of the Commissioner. If the
Commissioner finds that any conditions of this
Impoundment Agreement have not been satisfied, or that
any provisions of the Minnesota Securities Laws or
regulations have not been complied with, then he may
withhold such authorization for release of funds by
the Impoundment Agent to the Fund and may direct the
Impoundment Agent to return the funds to the
subscribers. After the initial release of funds is
authorized by the Commissioner, the Impoundment Agent
shall release funds, from time to time, to the Fund
upon written request.
7. FEE OF IMPOUNDMENT AGENT.
The Impoundment Agent shall receive
reasonable compensation for its services as
Impoundment Agent. Such compensation shall be paid by
the Fund and shall not be subtracted from the funds
held in escrow by the Impoundment Agent. The fee
agreed upon for services rendered hereunder shall
constitute full compensation for the services of the
Impoundment Agent performed pursuant to this
Impoundment Agreement; provided, however, that if the
Impoundment Agent renders any material services not
contemplated by this Impoundment Agreement, the
Impoundment Agent shall be reasonably compensated for
such services.
8. REPRESENTATIONS OF IMPOUNDMENT AGENT.
The Impoundment Agent represents and warrants that:
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(a) subscription proceeds deposited on
behalf of each subscriber will be insured by the
Federal Deposit Insurance Corporation to the
maximum extent such proceeds would be insured if
deposited in individual accounts for each such
subscriber; and
(b) it will distribute to subscribers
within the time period prescribed by the Internal
Revenue Code of 1986, as amended, reports of all
interest income earned on escrowed funds.
Except as provided in this Section 8, the sole duty of
the Impoundment Agent shall be to receive funds from
the sale of the Units and hold them for release in
accordance with the terms of this Impoundment
Agreement.
9. LIABILITY OF IMPOUNDMENT AGENT.
The Impoundment Agent may conclusively rely
upon and shall have no duty to verify any statement,
certificate, notice, request, consent, order or other
document believed by it to be genuine and to have been
signed or presented by the proper party or parties.
The Impoundment Agent shall be under no obligation to
institute or defend any action, suit or proceeding in
connection with this Impoundment Agreement unless
first indemnified to its satisfaction by the Fund.
The Impoundment Agent may consult counsel with respect
to any question arising under this Impoundment
Agreement, and the Impoundment Agent shall not be
liable for any action taken or omitted in good faith
on advice of such counsel. All funds held by the
Impoundment Agent pursuant to this Impoundment
Agreement shall constitute trust property for the
purposes for which they are held.
10. INSPECTION OF RECORDS.
Either the Fund or the Commissioner may, at
any time during regular business hours, inspect the
records of the Impoundment Agent, insofar as they
relate to this Impoundment Agreement, for the purpose
of determining that the Impoundment Agent is acting in
compliance with the provisions of this Impoundment
Agreement.
11. BINDING EFFECT AND SUBSTITUTION OF
IMPOUNDMENT AGENT.
The terms and conditions of this Impoundment
Agreement shall be binding upon the parties hereto and
their respective creditors, transferees, successors in
interest and assigns, whether by operation of law or
otherwise. If for any reason the Bank should be
unable or unwilling to continue to assume its duties
as Impoundment Agent, nothing in this Impoundment
Agreement shall prevent the Fund from appointing an
alternative Impoundment Agent.
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IN WITNESS WHEREOF, the parties hereto have
executed this Impoundment Agreement on the date first
above written.
AEI INCOME & GROWTH FUND 24 LLC
By AEI Fund Management XXI, Inc.
By
Its President
FIDELITY BANK
By
Its
AEI Securities Incorporated
By
Its President
Accepted for filing
Commissioner of Commerce
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