SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Under Section 13 or 15(d)
Of The Securities Exchange Act Of 1934
For the Fiscal Year Ended: December 31, 1999
Commission file number: 24003
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
(Name of Small Business Issuer in its Charter)
State of Minnesota 41-1848181
(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)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No
Check if disclosure of delinquent filers in response to Rule 405
of Regulation S-B is not contained in this Form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Issuer's revenues for year ended December 31, 1999 were
$984,858.
As of February 29, 2000, there were 16,786.184 Units of limited
partnership interest in the registrant outstanding and owned by
nonaffiliates of the registrant, which Units had an aggregate
market value (based solely on the price at which they were sold
since there is no ready market for such Units) of $16,786,184.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant has not incorporated any documents by reference
into this report.
Transitional Small Business Disclosure Format:
Yes No [X]
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
AEI Income & Growth Fund XXII Limited Partnership (the
"Partnership" or the "Registrant") is a limited partnership which
was organized pursuant to the laws of the State of Minnesota on
July 31, 1996. The registrant is comprised of AEI Fund
Management XXI, Inc. (AFM) as Managing General Partner, Robert P.
Johnson as the Individual General Partner, and purchasers of
partnership units as Limited Partners. The Partnership offered
for sale up to $24,000,000 of limited partnership interests (the
"Units") (24,000 Units at $1,000 per Unit) pursuant to a
registration statement effective January 10, 1997. The
Partnership commenced operations on May 1, 1997 when minimum
subscriptions of 1,500 Limited Partnership Units ($1,500,000)
were accepted. The Partnership's offering terminated January 9,
1999 when the extended offering period expired. The Partnership
received subscriptions for 16,917.222 Limited Partnership Units
($16,917,222).
The Partnership was organized to acquire existing and
newly constructed commercial properties located in the United
States, to lease such properties to tenants under triple net
leases, to hold such properties and to eventually sell such
properties. From subscription proceeds, the Partnership
purchased twelve properties, including partial interests in three
properties, at a total cost of $13,363,547. The balance of the
subscription proceeds was applied to organization and syndication
costs, working capital reserves and distributions, which
represented a return of capital. The properties are all
commercial, single tenant buildings leased under triple net
leases.
The Partnership's properties were purchased with
subscription proceeds without any indebtedness. The Partnership
will not finance properties in the future to obtain proceeds for
new property acquisitions. If it is required to do so, the
Partnership may incur short-term indebtedness, which may be
secured by a portion of the Partnership's properties, to finance
the day-to-day cash flow requirements of the Partnership
(including cash flow necessary to repurchase Units). The amount
of borrowings that may be secured by the Partnership's properties
is limited in the aggregate to 10% of the purchase price of all
Partnership properties. The Partnership will not incur
borrowings prior to application of the proceeds from sale of the
Units, will not incur borrowings to pay distributions, and will
not incur borrowings while there is cash available for
distributions.
The Partnership will hold its properties until the General
Partners determine that the sale or other disposition of the
properties is advantageous in view of the Partnership's
investment objectives. In deciding whether to sell properties,
the General Partners will consider factors such as potential
appreciation, net cash flow and income tax considerations. In
addition, certain lessees may be granted options to purchase
properties after a specified portion of the lease term has
elapsed. The Partnership expects to sell some or all of its
properties prior to its final liquidation and to reinvest the
proceeds from such sales in additional properties. The
Partnership reserves the right, at the discretion of the General
Partners, to either distribute proceeds from the sale of
properties to the Partners or to reinvest such proceeds in
additional properties, provided that sufficient proceeds are
distributed to the Limited Partners to pay federal and state
income taxes related to any taxable gain recognized as a result
of the sale. It is anticipated that the Partnership will
commence liquidation through the sale of its remaining properties
twelve to fifteen years after its formation, although final
liquidation may be delayed by a number of circumstances,
including market conditions and seller financing of properties.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
Leases
Although there are variations in the specific terms of the
leases, the following is a summary of the general terms of the
Partnership's leases. The properties are leased to various
tenants under triple net leases, which are classified as
operating leases. Under a triple net lease, the lessee is
responsible for all real estate taxes, insurance, maintenance,
repairs and operating expenses for the property. The initial
lease terms are for 15 to 20 years. The leases provide for base
annual rental payments, payable in monthly installments, and
contain rent clauses which entitle the Partnership to receive
additional rent in future years based on stated rent increases.
The leases provide the lessees with two to four five-year
renewal options subject to the same terms and conditions as the
initial lease. Certain lessees have been granted options to
purchase the property. Depending on the lease, the purchase
price is either determined by a formula, or is the greater of the
fair market value of the property or the amount determined by a
formula. In all cases, if the option were to be exercised by the
lessee, the purchase price would be greater than the original
cost of the property.
On December 10, 1997, the Partnership purchased a 40.0%
interest in a TGI Friday's restaurant in Greensburg, Pennsylvania
for $668,144. The property is leased to Ohio Valley Bistros,
Inc. under a Lease Agreement with a primary term of 15 years and
annual rental payments of $67,650. The remaining interest in the
property was purchased by AEI Real Estate Fund XVII Limited
Partnership, an affiliate of the Partnership.
On June 29, 1998, the Partnership purchased a parcel of
land in Centerville, Ohio for $1,850,988. On August 28, 1998,
the Partnership assigned, for diversification purposes, 77% of
its interest in the property to three affiliated partnerships.
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 $29,801. Effective December 25, 1998, the annual
rent was increased to $44,701. 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 7.0%. 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 $93,256. The Partnership's share of total
acquisition costs, including the cost of the land, was $924,843.
The remaining interests in the property are owned by AEI Real
Estate Fund XVII Limited Partnership, AEI Real Estate Fund XVIII
Limited Partnership and AEI Income & Growth Fund XXI Limited
Partnership, affiliates of the Partnership.
On November 20, 1998, the Partnership purchased a parcel
of land in Homewood, Alabama for $696,000. The land is leased to
RTM Alabama, Inc. (RTM) under a Lease Agreement with a primary
term of 20 years and annual rental payments of $46,980.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to RTM for the construction of an
Arby's restaurant on the site. The Partnership charged interest
on the advances at a rate of 6.75%. On July 9, 1999, after the
development was completed, the Lease Agreement was amended to
require annual rental payments of $87,135. Total acquisition
costs, including the cost of the land, were $1,392,592.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
On November 25, 1998, the Partnership purchased a parcel
of land in Fort Wayne, Indiana for $470,000. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $39,950.
Effective March 24, 1999, the annual rent was increased to
$48,175. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership advanced funds to TWI for the construction
of a Tumbleweed restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 8.5%.
Effective March 24, 1999, the interest rate was increased to
10.25%. On August 31, 1999, after the development was completed,
the Lease Agreement was amended to require annual rental payments
of $130,941. Total acquisition costs, including the cost of the
land, were $1,316,695.
On January 26, 1999, the Partnership purchased a Hollywood
Video store in Saraland, Alabama for $1,377,891. The property is
leased to Hollywood Entertainment Corp. under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$129,617.
On July 14, 1999, the Partnership purchased four
Children's World daycare centers located in Abingdon, Maryland,
Houston, Texas, Pearland, Texas and DePere, Wisconsin. The
properties were purchased for $1,051,772, $892,219, $943,415 and
$1,187,452, respectively. The properties are leased to ARAMARK
Educational Resources, Inc. under Lease Agreements with primary
terms of 15 years and annual rental payments of $91,677, $79,093,
$83,635 and $106,157, respectively.
On July 16, 1999, the Partnership purchased a Hollywood
Video store in Minot, North Dakota for $1,330,000. The property
is leased to Hollywood Entertainment Corporation under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $129,168.
On August 26, 1999, the Partnership purchased a Hollywood
Video store in Muscle Shoals, Alabama for $1,340,627. The
property is leased to Hollywood Entertainment Corporation under a
Lease Agreement with a primary term of 15 years and annual rental
payments of $129,659.
On September 28, 1999, the Partnership purchased a 53%
interest in a Marie Callender's restaurant in Henderson, Nevada
for $937,897. The property is leased to Marie Callender Pie
Shops, Inc. under a Lease Agreement with a primary term of 15
years and annual rental payments of $85,595. The remaining
interest in the property was purchased by AEI Net Lease Income &
Growth Fund XIX Limited Partnership, an affiliate of the
Partnership.
Subsequent to December 31, 1999, the Partnership sold
17.2104% of the Children's World in DePere, Wisconsin to an
unrelated third party. The Partnership received net sale
proceeds of approximately $238,000 which resulted in a net gain
of approximately $38,000.
Subsequent to December 31, 1999, the Partnership sold
26.161% of its interest in the Marie Callender's restaurant in
two separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of approximately
$516,000 which resulted in a total net gain of approximately
$57,000.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
Major Tenants
During 1999, four of the Partnership's lessees each
contributed more than ten percent of the Partnership's total
rental revenue. The major tenants in aggregate contributed 78%
of the Partnership's total rental revenue in 1999. It is
anticipated that, based on minimum rental payments required under
the leases, each major tenant will continue to contribute more
than ten percent of the Partnership's rental income in 2000 and
future years, except for Americana Dining Corporation which will
fall below the 10% level. Any failure of these major tenants
could materially affect the Partnership's net income and cash
distributions.
Competition
The Partnership is a minor factor in the commercial real
estate business. There are numerous entities engaged in the
commercial real estate business which have greater financial
resources than the Partnership. At the time the Partnership
elects to dispose of its properties, the Partnership will be in
competition with other persons and entities to find buyers for
its properties.
Employees
The Partnership has no direct employees. Management
services are performed for the Partnership by AEI Fund
Management, Inc., an affiliate of AFM.
Year 2000 Compliance
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
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership is not aware of any issues related to Year 2000
non compliance with AEI systems or the systems of the various
tenants.
ITEM 2. DESCRIPTION OF PROPERTIES.
Investment Objectives
The Partnership's investment objectives are to acquire
existing or newly-developed commercial properties throughout the
United States that offer the potential for (i) regular cash
distributions of lease income; (ii) growth in lease income
through rent escalation provisions; (iii) preservation of capital
through all-cash transactions; (iv) capital growth through
appreciation in the value of properties; and (v) stable property
performance through long-term lease contracts. The Partnership
does not have a policy, and there is no limitation, as to the
amount or percentage of assets that may be invested in any one
property. However, to the extent possible, the General Partners
attempt to diversify the type and location of the Partnership's
properties.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Description of Properties
The Partnership's properties are commercial, single tenant
buildings. The properties were acquired on a debt-free basis and
leased to various tenants under triple net leases, which will be
classified as operating leases. The Partnership holds an
undivided fee simple interest in the properties.
The Partnership's properties are subject to the general
competitive conditions incident to the ownership of single tenant
investment real estate. Since each property is leased under a
long-term lease, there is little competition until the
Partnership decides to sell the property. At this time, the
Partnership will be competing with other real estate owners, on
both a national and local level, in attempting to find buyers for
the properties. In the event of a tenant default, the
Partnership would be competing with other real estate owners, who
have property vacancies, to attract a new tenant to lease the
property. The Partnership's tenants operate in industries that
are very competitive and can be affected by factors such as
changes in regional or local economies, seasonality and changes
in consumer preference.
The following table is a summary of the property that the
Partnership acquired and owned as of December 31, 1999.
Total Property Annual Annual
Purchase Acquisition Lease Rent Per
Property Date Costs Lessee Payment Sq. Ft.
TGI Friday's Restaurant
Greensburg, PA Ohio Valley
(40.0%) 12/10/97 $ 668,144 Bistros, Inc. $ 68,414 $37.92
Hollywood
Hollywood Video Store Entertainment
Saraland, AL 1/26/99 $1,377,891 Corporation $129,617 $17.31
Champps Americana
Restaurant
Centerville, OH Americana
(23.0%) 1/27/99 $ 924,843 Dining Corp. $ 93,256 $43.28
Arby's Restaurant RTM
Homewood, AL 7/9/99 $1,392,592 Alabama, Inc. $ 87,135 $26.76
Children's World ARAMARK
Daycare Center Educational
Abingdon, MD 7/14/99 $1,051,772 Resources, Inc. $ 91,677 $12.36
Children's World ARAMARK
Daycare Center Educational
Houston, TX 7/14/99 $ 892,219 Resources, Inc. $ 79,093 $10.91
Children's World ARAMARK
Daycare Center Educational
Pearland, TX 7/14/99 $ 943,415 Resources, Inc. $ 83,635 $11.01
Children's World ARAMARK
Daycare Center Educational
DePere, WI 7/14/99 $1,187,452 Resources, Inc. $106,157 $10.43
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Total Property Annual Annual
Purchase Acquisition Lease Rent Per
Property Date Costs Lessee Payment Sq. Ft.
Hollywood
Hollywood Video Store Entertainment
Minot, ND 7/16/99 $1,330,000 Corporation $129,168 $17.21
Hollywood
Hollywood Video Store Entertainment
Muscle Shoals, AL 8/26/99 $1,340,627 Corporation $129,659 $19.29
Tumbleweed Restaurant
Fort Wayne, IN 8/31/99 $1,316,695 Tumbleweed, Inc. $130,941 $23.50
Marie Callender's Restaurant
Henderson, NV Marie Callender's
(53.0%) 9/28/99 $ 937,897 Pie Shops, Inc. $ 85,595 $26.85
The properties listed above with a partial ownership
percentage are owned with affiliates of the Partnership. The
remaining interest in the TGI Friday's restaurant is owned by AEI
Real Estate Fund XVII Limited Partnership. The remaining
interests in the Champps Americana restaurant are owned by AEI
Real Estate Fund XVII Limited Partnership, AEI Real Estate Fund
XVIII Limited Partnership and AEI Income & Growth Fund XXI
Limited Partnership. The remaining interest in the Marie
Callender's restaurant is owned by AEI Net Lease Income & Growth
Fund XIX Limited Partnership.
Each Partnership owns a separate, undivided interest in
the property. No specific agreement or commitment exists between
the Partnerships as to the management of their respective
interests in the property, and the Partnership that holds more
than a 50% interest does not control decisions over the other
Partnership's interest.
The initial Lease terms are 15 years, except for the
Champps Americana and Arby's restaurants, which have Lease terms
of 20 years. The Leases contain renewal options which may extend
the Lease term an additional 15 years, except the TGI Friday's,
Arby's and Tumbleweed restaurants, which have renewal options
that may extend the Lease term an additional 10 years and the
Hollywood Video store in Saraland, Alabama which has renewal
options that may extend the Lease term an additional 20 years.
Pursuant to the Lease Agreement, the tenants are required
to provide proof of adequate insurance coverage on the properties
they occupy. The General Partners believe the properties are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
For tax purposes, the Partnership's properties are
depreciated under the Modified Accelerated Cost Recovery System
(MACRS). The largest depreciable component of a property is the
building which is depreciated, using the straight-line method,
over 39 years. The remaining depreciable components of a
property are personal property and land improvements which are
depreciated, using an accelerated method, over 5 and 15 years,
respectively. Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6) of the
Internal Revenue Code which requires a percentage of the
properties' depreciable components to be depreciated over longer
lives using the straight-line method. In general, the federal
tax basis of the properties for tax depreciation purposes is the
same as the basis for book depreciation purposes.
Through December 31, 1999, all properties were 100%
percent occupied by the lessees.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS.
As of December 31, 1999, there were 739 holders of record
of the registrant's Limited Partnership Units. There is no other
class of security outstanding or authorized. The registrant's
Units are not a traded security in any market. However, the
Partnership may 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 total number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1999, four Limited Partners redeemed a total of
109.04 Partnership Units for $87,231 in accordance with the
Partnership Agreement. In 1998, the Partnership did not redeem
any Units from the Limited Partners. The redemptions increase
the remaining Limited Partner's ownership interest in the
Partnership.
Cash distributions of $35,826 and $25,063 were made to the
General Partners and $1,071,123 and $810,404 were made to the
Limited Partners in 1999 and 1998, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined, and a partial return of contributed
capital. These distributions should not be compared with
dividends paid on capital stock by corporations.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
For the years ended December 31, 1999 and 1998, the
Partnership recognized rental income of $713,963 and $108,451,
respectively. During the same periods, the Partnership also
earned $270,895 and $437,260, respectively, in investment income
from subscription proceeds which were invested in a short-term
money market account. This investment income constituted 28% and
80% respectively, of total income. The percentage of total
income represented by investment income declines as subscription
proceeds are invested in properties.
During the years ended December 31, 1999 and 1998, the
Partnership paid Partnership administration expenses to
affiliated parties of $165,419 and $219,705, respectively. These
administration expenses include initial start-up costs and
expenses associated with processing distributions, reporting
requirements and correspondence to the Limited Partners. The
administrative expenses decrease after completion of the offering
and acquisition phases of the Partnership's operations. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $27,348 and $13,367, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, insurance and other property costs.
The Partnership distributes all of its net income during
the offering and acquisition phases, and if net income after
deductions for depreciation is not sufficient to fund the
distributions, the Partnership may distribute other available
cash that constitutes capital for accounting purposes.
As of December 31, 1999, the Partnership's cash
distribution rate was 6.0% on an annualized basis. Pursuant to
the Partnership Agreement, distributions of Net Cash Flow were
allocated 97% to the Limited Partners and 3% to the General
Partners.
Since the Partnership has only recently purchased its real
estate, inflation has had a minimal effect on income from
operations. The Leases may 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
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership is not aware of any issues related to Year 2000
non compliance with AEI systems or the systems of the various
tenants.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Liquidity and Capital Resources
The Partnership's primary sources of cash are from
proceeds from the sale of Units, investment income, rental income
and proceeds from the sale of property. Its primary uses of cash
are investment in real properties, payment of expenses involved
in the sale of units, the organization of the Partnership, the
acquisition of properties, the management of properties, the
administration of the Partnership, and the payment of
distributions.
The Partnership Agreement requires that no more than 15%
of the proceeds from the sale of Units be applied to expenses
involved in the sale of Units (including Commissions) and that
such expenses, together with acquisition expenses, not exceed 20%
of the proceeds from the sale of Units. To the extent
organization and offering expenses actually incurred exceed 15%
of proceeds, they are borne by the General Partners.
Before the acquisition of properties, cash flow from
operating activities is not significant. Net income, after
adjustment for depreciation, is lower during the first few years
of operations as administrative expenses remain high and a large
amount of the Partnership's assets remain invested on a short-
term basis in lower-yielding cash equivalents. Net income will
become the largest component of cash flow from operating
activities and the largest component of cash flow after the
completion of the acquisition phase.
The Partnership Agreement requires that all proceeds from
the sale of Units be invested or committed to investment in
properties by the later of two years after the date of the
Prospectus or six months after termination of the offer and sale
of Units. While the Partnership is purchasing properties, cash
flow from investing activities (investment in real property) will
remain negative and will constitute the principal use of the
Partnership's available cash flow.
On June 29, 1998, the Partnership purchased a parcel of
land in Centerville, Ohio for $1,850,988. On August 28, 1998,
the Partnership assigned, for diversification purposes, 77% of
its interest in the property to three affiliated partnerships.
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 $29,801. Effective December 25, 1998, the annual
rent was increased to $44,701. 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 7.0%. 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 $93,256. The Partnership's share of total
acquisition costs, including the cost of the land, was $924,843.
The remaining interests in the property are owned by AEI Real
Estate Fund XVII Limited Partnership, AEI Real Estate Fund XVIII
Limited Partnership and AEI Income & Growth Fund XXI Limited
Partnership, affiliates of the Partnership.
On November 20, 1998, the Partnership purchased a parcel
of land in Homewood, Alabama for $696,000. The land is leased to
RTM Alabama, Inc. (RTM) under a Lease Agreement with a primary
term of 20 years and annual rental payments of $46,980.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to RTM for the construction of an
Arby's restaurant on the site. The Partnership charged interest
on the advances at a rate of 6.75%. On July 9, 1999, after the
development was completed, the Lease Agreement was amended to
require annual rental payments of $87,135. Total acquisition
costs, including the cost of the land, were $1,392,592.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
On November 25, 1998, the Partnership purchased a parcel
of land in Fort Wayne, Indiana for $470,000. The land is leased
to Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $39,950.
Effective March 24, 1999, the annual rent was increased to
$48,175. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement under
which the Partnership advanced funds to TWI for the construction
of a Tumbleweed restaurant on the site. Initially, the
Partnership charged interest on the advances at a rate of 8.5%.
Effective March 24, 1999, the interest rate was increased to
10.25%. On August 31, 1999, after the development was completed,
the Lease Agreement was amended to require annual rental payments
of $130,941. Total acquisition costs, including the cost of the
land, were $1,316,695.
On January 26, 1999, the Partnership purchased a Hollywood
Video store in Saraland, Alabama for $1,377,891. The property is
leased to Hollywood Entertainment Corp. under a Lease Agreement
with a primary term of 15 years and annual rental payments of
$129,617.
On July 14, 1999, the Partnership purchased four
Children's World daycare centers located in Abingdon, Maryland,
Houston, Texas, Pearland, Texas and DePere, Wisconsin. The
properties were purchased for $1,051,772, $892,219, $943,415 and
$1,187,452, respectively. The properties are leased to ARAMARK
Educational Resources, Inc. under Lease Agreements with primary
terms of 15 years and annual rental payments of $91,677, $79,093,
$83,635 and $106,157, respectively.
On July 16, 1999, the Partnership purchased a Hollywood
Video store in Minot, North Dakota for $1,330,000. The property
is leased to Hollywood Entertainment Corporation under a Lease
Agreement with a primary term of 15 years and annual rental
payments of $129,168.
On August 26, 1999, the Partnership purchased a Hollywood
Video store in Muscle Shoals, Alabama for $1,340,627. The
property is leased to Hollywood Entertainment Corporation under a
Lease Agreement with a primary term of 15 years and annual rental
payments of $129,659.
On September 28, 1999, the Partnership purchased a 53%
interest in a Marie Callender's restaurant in Henderson, Nevada
for $937,897. The property is leased to Marie Callender Pie
Shops, Inc. under a Lease Agreement with a primary term of 15
years and annual rental payments of $85,595. The remaining
interest in the property was purchased by AEI Net Lease Income &
Growth Fund XIX Limited Partnership, an affiliate of the
Partnership.
Subsequent to December 31, 1999, the Partnership sold
17.2104% of the Children's World in DePere, Wisconsin to an
unrelated third party. The Partnership received net sale
proceeds of approximately $238,000 which resulted in a net gain
of approximately $38,000.
Subsequent to December 31, 1999, the Partnership sold
26.161% of its interest in the Marie Callender's restaurant in
two separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of approximately
$516,000 which resulted in a total net gain of approximately
$57,000.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
During the offering of Units, the Partnership's primary
source of cash flow will be from the sale of Limited Partnership
Units. The Partnership offered for sale up to $24,000,000 of
limited partnership interests (the "Units") (24,000 Units at
$1,000 per Unit) pursuant to a registration statement effective
January 10, 1997. From January 10, 1997 to May 1, 1997, the
minimum number of Limited Partnership Units (1,500) needed to
form the Partnership were sold and on May 1, 1997, a total of
1,629.201 Units ($1,629,201) were transferred into the
Partnership. Through December 31, 1998, the Partnership raised a
total of $15,945,163 from the sale of 15,945.163 Units. The
Partnership's offering terminated January 9, 1999 when the
extended offering period expired. The Partnership received
subscriptions for 16,917.222 Limited Partnership Units
($16,917,222). From subscription proceeds, the Partnership paid
organization and syndication costs (which constitute a reduction
of capital) of $2,454,602.
After completion of the acquisition phase, the
Partnership's primary use of cash flow is distribution and
redemption payments to Partners. The Partnership declares its
regular quarterly distributions before the end of each quarter
and pays the distribution in the first week after the end of each
quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners on a semi-annual basis.
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1999, four Limited Partners redeemed a total of
109.04 Partnership Units for $87,231 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1998, the Partnership
did not redeem any Units from the Limited Partners. The
redemptions increase the remaining Limited Partner's ownership
interest in the Partnership.
The continuing rent payments from the properties should be
adequate to fund continuing distributions and meet other
Partnership obligations on both a short-term and long-term basis.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
<BULLET> Market and economic conditions which affect
the value of the properties the Partnership owns and
the cash from rental income such properties generate;
<BULLET> the federal income tax consequences of rental
income, deductions, gain on sales and other items and
the affects of these consequences for investors;
<BULLET> resolution by the General Partners of
conflicts with which they may be confronted;
<BULLET> the success of the General Partners of
locating properties with favorable risk return
characteristics;
<BULLET> the effect of tenant defaults; and
<BULLET> the condition of the industries in which the
tenants of properties owned by the Partnership operate.
ITEM 7. FINANCIAL STATEMENTS.
See accompanying index to financial statements.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet as of December 31, 1999 and 1998
Statements for the Years Ended December 31, 1999 and 1998:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
REPORT OF INDEPENDENT AUDITORS
To the Partners:
AEI Income & Growth Fund XXII Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI Income
& Growth Fund XXII Limited Partnership (a Minnesota limited
partnership) as of December 31, 1999 and 1998 and the related
statements of income, cash flows and changes in partners' capital
for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AEI Income & Growth Fund XXII Limited Partnership as of
December 31, 1999 and 1998, and the results of its operations and
its cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Minneapolis, Minnesota
January 25, 2000 Boulay, Heutmaker, Zibell & Co. P.L.L.P.
Certified Public Accountants
<PAGE>
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 247,401 $10,206,442
Receivables 0 46,634
----------- -----------
Total Current Assets 247,401 10,253,076
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 4,981,547 1,886,747
Buildings and Equipment 8,382,000 373,124
Construction in Progress 0 340,620
Property Acquisition Costs 0 460,047
Accumulated Depreciation (201,635) (16,693)
----------- -----------
Net Investments in Real Estate 13,161,912 3,043,845
----------- -----------
Total Assets $13,409,313 $13,296,921
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 14,979 $ 144,805
Distributions Payable 256,847 255,963
----------- -----------
Total Current Liabilities 271,826 400,768
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (38,746) (21,135)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized; 16,917 Units issued;
16,808 and 15,945 Units outstanding in
1999 and 1998, respectively 13,176,233 12,917,288
----------- -----------
Total Partners' Capital 13,137,487 12,896,153
----------- -----------
Total Liabilities and Partners' Capital $13,409,313 $13,296,921
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31
1999 1998
INCOME:
Rent $ 713,963 $ 108,451
Investment Income 270,895 437,260
----------- -----------
Total Income 984,858 545,711
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 165,419 219,705
Partnership Administration and Property
Management - Unrelated Parties 27,348 13,367
Depreciation 184,942 16,025
----------- -----------
Total Expenses 377,709 249,097
----------- -----------
NET INCOME $ 607,149 $ 296,614
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 18,215 $ 8,898
Limited Partners 588,934 287,716
----------- -----------
$ 607,149 $ 296,614
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(16,779 and 11,627 weighted average Units
outstanding in 1999 and 1998, respectively) $ 35.10 $ 24.75
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 607,149 $ 296,614
Adjustments To Reconcile Net Income (Loss)
To Net Cash Provided By Operating Activities:
Depreciation 184,942 16,025
(Increase) Decrease in Receivables 46,634 (46,634)
Decrease in Payable to
AEI Fund Management, Inc. (129,826) (16,641)
----------- -----------
Total Adjustments 101,750 (47,250)
----------- -----------
Net Cash Provided By
Operating Activities 708,899 249,364
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (10,303,009) (2,298,534)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contributions from Limited Partners 972,059 8,289,167
Organization and Syndication Costs (143,694) (1,162,508)
Increase in Distributions Payable 884 155,628
Distributions to Partners (1,104,251) (835,467)
Redemption Payments (89,929) 0
----------- -----------
Net Cash Provided By (Used For)
Financing Activities (364,931) 6,446,820
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (9,959,041) 4,397,650
CASH AND CASH EQUIVALENTS, beginning of period 10,206,442 5,808,792
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 247,401 $10,206,442
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1997 $ (4,970) $ 6,313,317 $ 6,308,347 7,656.00
Capital Contributions 0 8,289,167 8,289,167 8,289.16
Organization &
Syndication Costs 0 (1,162,508) (1,162,508)
Distributions (25,063) (810,404) (835,467)
Net Income 8,898 287,716 296,614
--------- ----------- ----------- -----------
BALANCE, December 31, 1998 (21,135) 12,917,288 12,896,153 15,945.16
Capital Contributions 0 972,059 972,059 972.06
Organization &
Syndication Costs 0 (143,694) (143,694)
Distributions (33,128) (1,071,123) (1,104,251)
Redemption Payments (2,698) (87,231) (89,929) (109.04)
Net Income 18,215 588,934 607,149
--------- ----------- ----------- -----------
BALANCE, December 31, 1999 $(38,746) $13,176,233 $13,137,487 16,808.18
========= =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Organization -
AEI Income & Growth Fund XXII 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. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner and 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 May 1, 1997 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The offering terminated January
9, 1999 when the extended offering period expired. The
Partnership received subscriptions for 16,917.222 Limited
Partnership Units ($16,917,222).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$16,917,222 and $1,000, respectively. During operations,
any Net Cash Flow, as defined, which the General Partners
determine to distribute will be distributed 97% to the
Limited Partners and 3% to the General Partners.
Distributions to Limited Partners will be made pro rata by
Units.
Any Net Proceeds of Sale, as defined, from the sale or
financing of 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 9%
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 property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated in the
same ratio as the last dollar of Net Cash Flow is
distributed. Net losses from operations will be allocated
99% to the Limited Partners and 1% to the General Partners.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(1) Organization - (Continued)
For tax purposes, profits arising from the sale, financing,
or other disposition of 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 9% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, the balance of any
remaining gain will then be allocated 90% to the Limited
Partners and 10% to the General Partners. Losses will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(2) Summary of Significant Accounting Policies -
Financial Statement Presentation
The accounts of the Partnership are maintained on the
accrual basis of accounting for both federal income tax
purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing
these financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions may affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses.
Actual results could differ from those estimates.
The Partnership regularly assesses whether market events
and conditions indicate that it is reasonably possible to
recover the carrying amounts of its investments in real
estate from future operations and sales. A change in
those market events and conditions could have a material
effect on the carrying amount of its real estate.
Cash Concentrations of Credit Risk
At times throughout the year, the Partnership's cash
deposited in financial institutions may exceed FDIC
insurance limits.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(2) Summary of Significant Accounting Policies - (Continued)
Statement of Cash Flows
For purposes of reporting cash flows, cash and cash
equivalents may include cash in checking, cash invested
in money market accounts, certificates of deposit,
federal agency notes and commercial paper with a term of
three months or less.
Income Taxes
The income or loss of the Partnership for federal income
tax reporting purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has
been given to income taxes in the accompanying financial
statements.
The tax return, the qualification of the Partnership as
such for tax purposes, and the amount of distributable
Partnership income or loss are subject to examination by
federal and state taxing authorities. If such an
examination results in changes with respect to the
Partnership qualification or in changes to distributable
Partnership income or loss, the taxable income of the
partners would be adjusted accordingly.
Real Estate
The Partnership's real estate is leased under long-term
triple net leases classified as operating leases. The
Partnership recognizes rental revenue on the accrual
basis according to the terms of the individual leases.
For leases which contain rental increases based on cost
of living increases, the increases are recognized in the
year in which they are effective.
Real estate is recorded at the lower of cost or estimated
net realizable value. The Partnership compares the
carrying amount of its properties to the estimated future
cash flows expected to result from the property and its
eventual disposition. If the sum of the expected future
cash flows is less than the carrying amount of the
property, the Partnership recognizes an impairment loss
by the amount by which the carrying amount of the
property exceeds the fair value of the property.
The Partnership has capitalized as Investments in Real
Estate certain costs incurred in the review and
acquisition of the properties. The costs will be
allocated to the land, buildings and equipment.
The buildings and equipment of the Partnership are
depreciated using the straight-line method for financial
reporting purposes based on estimated useful lives of 25
years and 5 years, respectively.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(3) Related Party Transactions -
The Partnership owns a 40.0% interest in a TGI Friday's
restaurant. The remaining interest in this property is
owned by AEI Real Estate Fund XVII Limited Partnership, an
affiliate of the Partnership. The Partnership owns a 23.0%
interest in a Champps Americana restaurant. The remaining
interests in this property are owned by AEI Real Estate Fund
XVII Limited Partnership, AEI Real Estate Fund XVIII Limited
Partnership and AEI Income & Growth Fund XXI Limited
Partnership, affiliates of the Partnership. The Partnership
owns a 53.0% interest in a Marie Callender's restaurant.
The remaining interest in this property is owned by AEI Net
Lease Income & Growth Fund XIX Limited Partnership, an
affiliate of the Partnership.
Each Partnership owns a separate, undivided interest in the
property. No specific agreement or commitment exists
between the Partnerships as to the management of their
respective interests in the property, and the Partnership
that holds more than a 50% interest does not control
decisions over the other Partnership's interest. The
financial statements reflect only this Partnership's
percentage share of the property's land, building and
equipment, liabilities, revenues and expenses.
AEI, AFM and AEI Securities, Inc. (ASI) received the
following compensation and reimbursements for costs and
expenses from the Partnership:
Total Incurred by the Partnership
for the Years Ended December 31
1999 1998
a.AEI and AFM are reimbursed for all costs
incurred in connection with managing the
Partnership's operations, maintaining the
Partnership's books and communicating
the results of operations to the Limited
Partners. $ 165,419 $ 219,705
========= =========
b.AEI and AFM are reimbursed for all direct
expenses they have paid on the Partnership's
behalf to third parties. These expenses included
printing costs, legal and filing fees, direct
administrative costs, outside audit and accounting
costs, insurance and other property costs. $ 27,348 $ 13,367
========= =========
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(3) Related Party Transactions - (Continued)
Total Incurred by the Partnership
for the Years Ended December 31
1999 1998
c.AEI is reimbursed for all property acquisition
costs incurred by it in acquiring properties on
behalf of the Partnership. The amounts are net
of financing and commitment fees and expense
reimbursements received by the Partnership from
the lessees in the amount of $313,652 and $69,323
for 1999 and 1998, respectively. $(125,292) $ 366,187
========= =========
d.ASI was the underwriter of the Partnership offering.
Robert P. Johnson is the sole stockholder of ASI,
which is a member of the National Association of
Securities Dealers, Inc. ASI received, as
underwriting commissions 8% for sale of certain
subscription Units ($80 per unit sold, of which it
re-allowed up to $80 per unit to other participating
broker/dealers). ASI also received a 2%
non-accountable expense allowance for all Units
it sold through broker/dealers. These costs
are treated as a reduction of partners' capital. $ 97,205 $ 828,917
========= =========
e.AEI is reimbursed for all costs incurred in
connection with managing the Partnership's
offering and organization. $ 43,726 $ 96,901
========= =========
f.AEI is reimbursed for all expenses it has paid
on the Partnership's behalf relating to the
offering and organization of the Partnership.
These expenses included printing costs, legal
and filing fees, direct administrative costs,
underwriting costs and due diligence fees. $ 2,763 $ 236,690
========= =========
The payable to AEI Fund Management, Inc. represents the
balance due for the services described in 3a, b, c, d, e and f.
This balance is non-interest bearing and unsecured and is to
be paid in the normal course of business.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate -
The Partnership leases its properties to various tenants
through triple net leases, which are classified as operating
leases. Under a triple net lease, the lessee is responsible
for all real estate taxes, insurance, maintenance, repairs
and operating expenses of the property. The initial Lease
terms are 15 years, except for the Champps Americana and
Arby's restaurants which have Lease terms of 20 years. The
Leases contain renewal options which may extend the Lease
term an additional 15 years, except the TGI Friday's, Arby's
and Tumbleweed restaurants, which have renewal options that
may extend the Lease term an additional 10 years, and the
Hollywood Video store in Saraland, Alabama which has renewal
options that may extend the Lease term an additional 20
years. The Leases contain rent clauses which entitle the
Partnership to receive additional rent in future years based
on stated rent increases.
The Partnership's properties are all commercial, single-
tenant buildings and were constructed and acquired in 1997,
1998 or 1999. There have been no costs capitalized as
improvements subsequent to the acquisition.
The cost of the property and related accumulated
depreciation at December 31, 1999 are as follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
TGI Friday's, Greensburg, PA $ 295,020 $ 373,124 $ 668,144 $ 32,718
Hollywood Video, Saraland, AL 573,203 804,688 1,377,891 30,846
Champps Americana,
Centerville, OH 468,050 456,793 924,843 19,298
Arby's, Homewood, AL 748,169 644,423 1,392,592 16,109
Children's World, Abingdon, MD 208,416 843,356 1,051,772 15,462
Children's World, Houston, TX 124,577 767,642 892,219 14,073
Children's World, Pearland, TX 204,105 739,310 943,415 13,554
Children's World, DePere, WI 264,185 923,267 1,187,452 16,927
Hollywood Video, Minot, ND 619,597 710,403 1,330,000 13,024
Hollywood Video,
Muscle Shoals, AL 600,315 740,312 1,340,627 11,105
Tumbleweed, Fort Wayne, IN 489,027 827,668 1,316,695 13,009
Marie Callender's, Henderson, NV 386,883 551,014 937,897 5,510
----------- ----------- ----------- -------
$ 4,981,547 $ 8,382,000 $13,363,547 $201,635
=========== =========== =========== =======
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
On June 29, 1998, the Partnership purchased a parcel of land
in Centerville, Ohio for $1,850,988. On August 28, 1998,
the Partnership assigned, for diversification purposes, 77%
of its interest in the property to three affiliated
partnerships. 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 $29,801.
Effective December 25, 1998, the annual rent was increased
to $44,701. 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 7.0%. 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
$93,256. The Partnership's share of total acquisition
costs, including the cost of the land, was $924,843.
On November 20, 1998, the Partnership purchased a parcel of
land in Homewood, Alabama for $696,000. The land is leased
to RTM Alabama, Inc. (RTM) under a Lease Agreement with a
primary term of 20 years and annual rental payments of
$46,980. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership advanced funds to RTM for the
construction of an Arby's restaurant on the site. The
Partnership charged interest on the advances at a rate of
6.75%. On July 9, 1999, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $87,135. Total acquisition costs,
including the cost of the land, were $1,392,592.
On November 25, 1998, the Partnership purchased a parcel of
land in Fort Wayne, Indiana for $470,000. The land is
leased to Tumbleweed, Inc. (TWI) under a Lease Agreement
with a primary term of 15 years and annual rental payments
of $39,950. Effective March 24, 1999, the annual rent was
increased to $48,175. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership advanced
funds to TWI for the construction of a Tumbleweed restaurant
on the site. Initially, the Partnership charged interest on
the advances at a rate of 8.5%. Effective March 24, 1999,
the interest rate was increased to 10.25%. On August 31,
1999, after the development was completed, the Lease
Agreement was amended to require annual rental payments of
$130,941. Total acquisition costs, including the cost of
the land, were $1,316,695.
On January 26, 1999, the Partnership purchased a Hollywood
Video store in Saraland, Alabama for $1,377,891. The
property is leased to Hollywood Entertainment Corp. under a
Lease Agreement with a primary term of 15 years and annual
rental payments of $129,617.
On July 14, 1999, the Partnership purchased four Children's
World daycare centers located in Abingdon, Maryland,
Houston, Texas, Pearland, Texas and DePere, Wisconsin. The
properties were purchased for $1,051,772, $892,219, $943,415
and $1,187,452, respectively. The properties are leased to
ARAMARK Educational Resources, Inc. under Lease Agreements
with primary terms of 15 years and annual rental payments of
$91,677, $79,093, $83,635 and $106,157, respectively.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(4) Investments in Real Estate - (Continued)
On July 16, 1999, the Partnership purchased a Hollywood
Video store in Minot, North Dakota for $1,330,000. The
property is leased to Hollywood Entertainment Corporation
under a Lease Agreement with a primary term of 15 years and
annual rental payments of $129,168.
On August 26, 1999, the Partnership purchased a Hollywood
Video store in Muscle Shoals, Alabama for $1,340,627. The
property is leased to Hollywood Entertainment Corporation
under a Lease Agreement with a primary term of 15 years and
annual rental payments of $129,659.
On September 28, 1999, the Partnership purchased a 53%
interest in a Marie Callender's restaurant in Henderson,
Nevada for $937,897. The property is leased to Marie
Callender Pie Shops, Inc. under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$85,595.
Subsequent to December 31, 1999, the Partnership sold
17.2104% of the Children's World in DePere, Wisconsin to an
unrelated third party. The Partnership received net sale
proceeds of approximately $238,000 which resulted in a net
gain of approximately $38,000.
Subsequent to December 31, 1999, the Partnership sold
26.161% of its interest in the Marie Callender's restaurant
in two separate transactions to unrelated third parties.
The Partnership received total net sale proceeds of
approximately $516,000 which resulted in a total net gain of
approximately $57,000.
The minimum future rentals on the Lease for years subsequent
to December 31, 1999 are as follows:
2000 $ 1,229,083
2001 1,249,981
2002 1,252,136
2003 1,254,315
2004 1,257,589
Thereafter 12,925,833
-----------
$19,168,937
===========
There were no contingent rents recognized in 1999 or 1998.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(5) Major Tenants -
The following schedule presents rent revenue from individual
tenants, or affiliated groups of tenants, who each
contributed more than ten percent of the Partnership's total
rent revenue for the years ended December 31:
1999 1998
Tenants Industry
Hollywood
Entertainment Corporation Restaurant $ 225,593 $ 0
ARAMARK Educational
Resources, Inc. Child Care 167,682 0
Americana Dining Corp. Restaurant 89,862 31,456
Tumbleweed, Inc. Restaurant 74,106 N/A
Ohio Valley Bistros, Inc. Restaurant N/A 67,650
--------- ---------
Aggregate rent revenue of major tenants $ 557,243 $ 99,106
========= =========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 78% 91%
========= =========
(6) Partners' Capital -
Cash distributions of $35,826 and $25,063 were made to the
General Partners and $1,071,123 and $810,404 were made to
the Limited Partners for the years ended December 31, 1999
and 1998, respectively. The Limited Partners' distributions
represent $63.84 and $69.70 per Limited Partnership Unit
outstanding using 16,779 and 11,627 weighted average Units
in 1999 and 1998, respectively. The distributions represent
$29.91 and $24.75 per Unit of Net Income and $33.93 and
$44.95 per Unit of return of contributed capital in 1999 and
1998, respectively.
The Partnership may acquire Units from Limited Partners who
have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated
to purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall
the Partnership be obligated to purchase Units if, in the
sole discretion of the Managing General Partner, such
purchase would impair the capital or operation of the
Partnership.
During 1999, four Limited Partners redeemed a total of
109.04 Partnership Units for $87,231 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1998, the
Partnership did not redeem any Units from the Limited
Partners. The redemptions increase the remaining Limited
Partner's ownership interest in the Partnership.
After the effect of redemptions, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$1,006.49 per original $1,000 invested.
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(7) Income Taxes -
The following is a reconciliation of net income for
financial reporting purposes to income reported for federal
income tax purposes for the years ended December 31:
1999 1998
Net Income for Financial
Reporting Purposes $ 607,149 $ 296,614
Depreciation for Tax Purposes
Under Depreciation for Financial
Reporting Purposes 36,822 2,236
Capitalized Start-Up Costs
Under Section 195 0 208,386
Amortization of Start-Up and
Organization Costs (47,298) (6,319)
--------- ---------
Taxable Income to Partners $ 596,673 $ 500,917
========= =========
The following is a reconciliation of Partners' capital for
financial reporting purposes to Partners' capital reported
for federal income tax purposes for the years ended December
31:
1999 1998
Partners' Capital for
Financial Reporting Purposes $13,137,487 $12,896,153
Depreciation for Tax Purposes
Under Depreciation for Financial
Reporting Purposes 38,670 1,848
Capitalized Start-Up Costs
Under Section 195 346,411 346,410
Amortization of Start-Up and
Organization Costs (53,784) (6,486)
Organization and Syndication Costs
Treated as Reduction of Capital
for Financial Reporting Purposes 2,424,726 2,281,032
----------- -----------
Partners' Capital for
Tax Reporting Purposes $15,893,510 $15,518,957
=========== ===========
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(8) Fair Value of Financial Instruments -
The estimated fair values of the financial instruments, none
of which are held for trading purposes, for the years ended
December 31:
1999 1998
Carrying Fair Carrying Fair
Amount Value Amount Value
Cash $ 1,835 $ 1,835 $ 188 $ 188
Money Market Funds 245,566 245,566 10,206,254 10,206,254
--------- --------- ----------- ----------
Total Cash and
Cash Equivalents $ 247,401$ 247,401 $10,206,442 $10,206,442
========= ========= =========== ==========
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The registrant is a limited partnership and has no
officers, directors, or direct employees. The General Partners
of the registrant are Robert P. Johnson and AFM. The General
Partners manage and control the Partnership's affairs and have
general responsibility and the ultimate authority in all matters
affecting the Partnership's business. The director and officers
of AFM are as follows:
Robert P. Johnson, age 55, is Chief Executive Officer,
President and Director and has held these positions since the
formation of AFM in August, 1994, and has been elected to
continue in these positions until December, 2000. From 1970 to
the present, he had been employed exclusively in the investment
industry, specializing in tax-advantaged limited partnership
investments. In that capacity, he has been involved in the
development, analysis, marketing and management of public and
private investment programs investing in net lease properties as
well as public and private investment programs investing in
energy development. Since 1971, Mr. Johnson has been the
president, a director and a registered principal of AEI
Securities, Inc. (formerly AEI Incorporated), which is registered
with the Securities and Exchange Commission as a securities
broker-dealer, is a member of the National Association of
Securities Dealers, Inc. (NASD) and is a member of the Security
Investors Protection Corporation (SIPC). Mr. Johnson has been
president, a director and the principal shareholder of AEI Fund
Management, Inc., a real estate management company founded by
him, since 1978. Mr. Johnson is currently a general partner or
principal of the general partner in fifteen other limited
partnerships.
Mark E. Larson, age 47, is Executive Vice President,
Secretary, Treasurer and Chief Financial Officer and has held
these positions since the formation of AFM in August, 1994, and
has been elected to continue in these positions until December,
2000. Mr. Larson has been employed by AEI Fund Management, Inc.
and affiliated entities since 1985. From 1979 to 1985, Mr.
Larson was with Apache Corporation as manager of Program
Accounting responsible for the accounting and reports for
approximately 46 public partnerships. Mr. Larson is responsible
for supervising the accounting functions of AFM and the
registrant.
ITEM 10. EXECUTIVE COMPENSATION.
The General Partner and affiliates are reimbursed at cost
for all services performed on behalf of the registrant and for
all third party expenses paid on behalf of the registrant. The
cost for services performed on behalf of the registrant is actual
time spent performing such services plus an overhead burden.
These services include organizing the registrant and arranging
for the offer and sale of Units, reviewing properties for
acquisition and rendering administrative and management services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth information pertaining to
the ownership of the Units by each person known by the
Partnership to beneficially own 5% or more of the Units, by each
General Partner, and by each officer or director of the Managing
General Partner as of February 29, 2000:
Name and Address Number of Percent
of Beneficial Owner Units Held of Class
AEI Fund Management XXI, Inc. 22 *
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
Robert P. Johnson 0 0%
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
Mark E. Larson 0 0%
1300 Minnesota World Trade Center
30 East 7th Street, St. Paul, Minnesota 55101
* Less than 1%
The persons set forth in the preceding table hold sole voting
power and power of disposition with respect to all of the Units
set forth opposite their names. The General Partners know of no
holders of more than 5% of the outstanding Units.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The registrant, AFM and its affiliates have common
management and utilize the same facilities. As a result, certain
administrative expenses are allocated among these related
entities. All of such activities and any other transactions
involving the affiliates of the General Partner of the registrant
are governed by, and are conducted in conformity with, the
limitations set forth in the Limited Partnership Agreement of the
registrant.
The following table sets forth the forms of compensation,
distributions and cost reimbursements paid by the registrant to
the General Partners or their Affiliates in connection with the
operation of the Fund and its properties for the period from
inception through December 31, 1999.
Person or Entity Amount Incurred From
Receiving Form and Method Inception (July 31, 1996)
Compensation of Compensation To December 31, 1999
AEI Securities, Inc. Selling Commissions equal to 8% $1,691,722
of proceeds plus a 2% nonaccountable
expense allowance, most of which was
reallowed to Participating Dealers.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. (Continued)
Person or Entity Amount Incurred From
Receiving Form and Method Inception (July 31, 1996)
Compensation of Compensation To December 31, 1999
General Partners and Reimbursement at Cost for other $ 762,880
Affiliates Organization and Offering Costs.
General Partners and Reimbursement at Cost for all $ 342,899
Affiliates Acquisition Expenses
General Partners 3% of Net Cash Flow in any fiscal $ 66,220
year.
General Partners and Reimbursement at Cost for all $ 522,823
Affiliates Administrative Expenses attributable
to the Fund, including all expenses
related to management and disposition
of the Fund's properties and all other
transfer agency, reporting, partner
relations and other administrative
functions.
General Partners 1% of distributions of Net Proceeds $ 0
of Sale until Limited Partners have
received an amount equal to (a) their
Adjusted Capital Contributions, plus
(b) an amount equal to 9% of their
Adjusted Capital Contributions per
annum, cumulative but not compounded,
to the extent not previously
distributed. 10% of distributions
of Net Proceeds of Sale thereafter.
The limitations included in the Partnership Agreement
require that the cumulative reimbursements to the General
Partners and their affiliates for administrative expenses not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the sum of (i) the front-end fees allowed by the Guidelines less
the front-end fees paid, (ii) the cumulative property management
fees allowed but not paid, (iii) any real estate commission
allowed under the Guidelines, and (iv) 10% of Net Cash Flow less
the Net Cash Flow actually distributed. The reimbursements not
allowed under the Guidelines include a controlling person's
salary and fringe benefits, rent and depreciation. As of
December 31, 1999, the cumulative reimbursements to the General
Partners and their affiliates did not exceed these amounts.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.
A. Exhibits -
Description
3.1 Certificate of Limited
Partnership (incorporated by reference to
Exhibit 3.1 of the registrant's
Registration Statement on Form SB-2 filed
with the Commission on September 13, 1996
[File No. 333-5604]).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
3.2 Restated Limited Partnership
Agreement to the Prospectus (incorporated
by reference to Exhibit A of Amendment No.
2 of the registrant's Registration
Statement on Form SB-2 filed with the
Commission on August 21, 1997 [File No. 333-
5604]).
10.1 Net Lease Agreement dated
December 10, 1997 between the Partnership,
and AEI Real Estate Fund XVII Limited
Partnership and Ohio Valley Bistros, Inc.
relating to the property at #1507, Rural
Route #6, Greensburg, Pennsylvania
(incorporated by reference to Exhibit 10.1
of Form 8-K filed with the Commission on
December 18, 1997).
10.2 Development Financing Agreement dated
June 29, 1998 between the Partnership and
Americana Dining Corp. relating to the
property at 7880 Washington Village Drive,
Centerville, Ohio (incorporated by
reference to Exhibit 10.1 of Form 10-QSB
filed with the Commission on July 31,
1998).
10.3 Net Lease Agreement dated June 29,
1998 between the Partnership and Americana
Dining Corp. relating to the property at
7880 Washington Village Drive, Centerville,
Ohio (incorporated by reference to Exhibit
10.2 of Form 10-QSB filed with the
Commission on July 31, 1998).
10.4 Assignment of the Development
Financing Agreement and Net Lease Agreement
dated August 27, 1998 between the
Partnership, AEI Real Estate Fund XVII
Limited Partnership, AEI Real Estate Fund
XVIII Limited Partnership, AEI Income &
Growth Fund XXI Limited Partnership, and
Americana Dining Corp. relating to the
property at 7880 Washington Village Drive,
Centerville, Ohio (incorporated by
reference to Exhibit 10.1 of Form 10-QSB
filed with the Commission on November 9,
1998).
10.5 Purchase Agreement dated October 8,
1998 between AEI Fund Management and
Centurion Video, Ltd. relating to the
property at 1097 Industrial Parkway,
Saraland, Alabama (incorporated by
reference to Exhibit 10.2 of Form 10-QSB
filed with the Commission on November 9,
1998).
10.6 Assignment of Purchase Agreement dated
November 2, 1998 between the Partnership
and AEI Fund Management relating to the
property at 1097 Industrial Parkway,
Saraland, Alabama (incorporated by
reference to Exhibit 10.3 of Form 10-QSB
filed with the Commission on November 9,
1998).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.7 Development Financing Agreement dated
November 20, 1998 between the Partnership
and RTM Alabama, Inc. relating to the
property at 159 State Farm Parkway,
Homewood, Alabama (incorporated by
reference to Exhibit 10.10 of Form 10-KSB
filed with the Commission on March 12,
1999).
10.8 Net Lease Agreement dated November 20,
1998 between the Partnership and RTM
Alabama, Inc. relating to the property at
159 State Farm Parkway, Homewood, Alabama
(incorporated by reference to Exhibit 10.11
of Form 10-KSB filed with the Commission on
March 12, 1999).
10.9 Development Financing Agreement dated
November 25, 1998 between the Partnership
and Tumbleweed, Inc. relating to the
property at 6040 Lima Road, Fort Wayne,
Indiana (incorporated by reference to
Exhibit 10.12 of Form 10-KSB filed with the
Commission on March 12, 1999).
10.10 Net Lease Agreement dated
November 25, 1998 between the Partnership
and Tumbleweed, Inc. relating to the
property at 6040 Lima Road, Fort Wayne,
Indiana (incorporated by reference to
Exhibit 10.13 of Form 10-KSB filed with the
Commission on March 12, 1999).
10.11 Assignment of Lease Agreement
dated January 12, 1999 between the
Partnership and Centurion Video, Ltd.
relating to the property at 1097 Industrial
Parkway, Saraland, Alabama (incorporated by
reference to Exhibit 10.14 of Form 10-KSB
filed with the Commission on March 12,
1999).
10.12 First Amendment to Net Lease
Agreement dated January 27, 1999 between
the Partnership, AEI Real Estate Fund XVII
Limited Partnership, AEI Real Estate Fund
XVIII Limited Partnership, AEI Income &
Growth Fund XXI Limited Partnership and
Americana Dining Corp. relating to the
property at 7880 Washington Drive,
Centerville, Ohio (incorporated by
reference to Exhibit 10.15 of Form 10-KSB
filed with the Commission on March 12,
1999).
10.13 Purchase Agreement dated March
10, 1999 between AEI Fund Management, Inc.
and Magnum Video I, Inc. relating to the
property at 1700 South Broadway, Minot,
North Dakota (incorporated by reference to
Exhibit 10.1 of Form 10-QSB filed with the
Commission on May 7, 1999).
10.14 Purchase Agreement dated April
19, 1999 between AEI Fund Management, Inc.
and NOM Muscle Shoals, Ltd. relating to the
property at 1304 Woodward Avenue, Muscle
Shoals, Alabama (incorporated by reference
to Exhibit 10.2 of Form 10-QSB filed with
the Commission on May 7, 1999).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.15 Assignment of Purchase Agreement
dated April 27, 1999, between the
Partnership and AEI Fund Management, Inc.
relating to the property at 1700 South
Broadway, Minot, North Dakota (incorporated
by reference to Exhibit 10.3 of Form 10-QSB
filed with the Commission on May 7, 1999).
10.16 Assignment of Purchase Agreement
dated April 27, 1999, between the
Partnership and AEI Fund Management, Inc.
relating to the property at 1304 Woodward
Avenue, Muscle Shoals, Alabama
(incorporated by reference to Exhibit 10.4
of Form 10-QSB filed with the Commission on
May 7, 1999).
10.17 First Amendment to Purchase
Agreement dated April 27, 1999, between AEI
Fund Management, Inc. and NOM Muscle
Shoals, Ltd. relating to the property at
1304 Woodward Avenue, Muscle Shoals,
Alabama (incorporated by reference to
Exhibit 10.5 of Form 10-QSB filed with the
Commission on May 7, 1999).
10.18 Purchase and Sale Agreement and
Escrow Instructions dated May 20, 1999
between AEI Fund Management, Inc. and
ARAMARK Educational Resources, Inc.
relating to the properties at 3325 Trellis
Lane, Abingdon, Maryland, 2325 County Road
90, Pearland, Texas, 1553 Arcadian Drive,
DePere, Wisconsin, and 18035 Forrest Height
Drive, Houston, Texas (incorporated by
reference to Exhibit 10.3 of Form 8-K filed
with the Commission on July 26, 1999).
10.19 Assignment of Purchase and Sale
Agreement and Escrow Instructions dated
June 16, 1999 between the Partnership, AEI
Fund Management, Inc. and ARAMARK
Educational Resources, Inc. relating to the
properties at 3325 Trellis Lane, Abingdon,
Maryland, 2325 County Road 90, Pearland,
Texas, 1553 Arcadian Drive, DePere,
Wisconsin, and 18035 Forrest Height Drive,
Houston, Texas (incorporated by reference
to Exhibit 10.4 of Form 8-K filed with the
Commission on July 26, 1999).
10.20 Assignment and Assumption of
Lease dated June 29, 1999 between the
Partnership and Magnum Video I, Inc.
relating to the property at 1700 South
Broadway, Minot, North Dakota (incorporated
by reference to Exhibit 10.9 of Form 8-K
filed with the Commission on July 26,
1999).
10.21 Net Lease Agreement dated July
14, 1999 between the Partnership and
ARAMARK Educational Resources, Inc.
relating to the property at 3325 Trellis
Lane, Abingdon, Maryland (incorporated by
reference to Exhibit 10.5 of Form 8-K filed
with the Commission on July 26, 1999).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.22 Net Lease Agreement dated July
14, 1999 between the Partnership and
ARAMARK Educational Resources, Inc.
relating to the property at 2325 County
Road 90 Pearland, Texas (incorporated by
reference to Exhibit 10.6 of Form 8-K filed
with the Commission on July 26, 1999).
10.23 Net Lease Agreement dated July
14, 1999 between the Partnership and
ARAMARK Educational Resources, Inc.
relating to the property at 1553 Arcadian
Drive, DePere, Wisconsin (incorporated by
reference to Exhibit 10.7 of Form 8-K filed
with the Commission on July 26, 1999).
10.24 Net Lease Agreement dated July
14, 1999 between the Partnership and
ARAMARK Educational Resources, Inc.
relating to the property at 18035 Forrest
Height Drive, Houston, Texas (incorporated
by reference to Exhibit 10.8 of Form 8-K
filed with the Commission on July 26,
1999).
10.25 Sale and Purchase Agreement and
Escrow Instructions dated June 2, 1999
between AEI Fund Management, Inc. and Marie
Callender Pie Shops, Inc. relating to the
property at Warm Springs Road, Henderson,
Nevada (incorporated by reference to
Exhibit 10.1 of Form 10-QSB filed with the
Commission on July 30, 1999).
10.26 First Amendment to Sale and
Purchase Agreement and Escrow Instructions
dated July 8, 1999 between AEI Fund
Management, Inc. and Marie Callender Pie
Shops, Inc. relating to the property at
Warm Springs Road, Henderson, Nevada
(incorporated by reference to Exhibit 10.2
of Form 10-QSB filed with the Commission on
July 30, 1999).
10.27 First Amendment to Net Lease
Agreement dated July 9, 1999 between the
Partnership and RTM Alabama, Inc. relating
to the property at 159 State Farm Parkway,
Homewood, Alabama (incorporated by
reference to Exhibit 10.2 of Form 8-K filed
with the Commission on July 20, 1999).
10.28 Assignment of Purchase and Sale
Agreement and Escrow Instructions dated
July 23, 1999 between the Partnership, AEI
Net Lease Income & Growth Fund XIX Limited
Partnership and AEI Fund Management, Inc.
and Marie Callender Pie Shops, Inc.
relating to the property at Warm Springs
Road, Henderson, Nevada (incorporated by
reference to Exhibit 10.3 of Form 10-QSB
filed with the Commission on July 30,
1999).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A. (Continued)
A. Exhibits -
Description
10.29 Assignment of Lease dated August
26, 1999 between the Partnership and NOM
Muscle Shoals, Ltd. relating to the
property at 1304 Woodward Avenue, Muscle
Shoals, Alabama (incorporated by reference
to Exhibit 10.11 of Form 10-QSB filed with
the Commission on November 8, 1999).
10.30 First Amendment to Net Lease
Agreement dated August 31, 1999, between
the Partnership and Tumbleweed, Inc.
relating to the property at 6040 Lima Road,
Fort Wayne, Indiana (incorporated by
reference to Exhibit 10.1 of Form 8-K filed
with the Commission on September 1, 1999).
10.31 Lease Agreement dated September
28, 1999 between the Partnership, AEI Net
Lease Income & Growth Fund XIX Limited
Partnership and Marie Callender Pie Shops,
Inc. relating to the property at 530 North
Stephanie Street, Henderson, Nevada
(incorporated by reference to Exhibit 10.13
of Form 10-QSB filed with the Commission on
November 8, 1999).
10.32 Purchase Agreement dated February
14, 2000 between the Partnership and George
M. Kunitake and Kay H. Kunitake, husband
and wife, and Steven T. Kunitake relating
to the property at 530 North Stephanie
Street, Henderson, Nevada.
10.33 Purchase Agreement dated February
28, 2000 between the Partnership and the D
& R Family Limited Partnership relating to
the property at 1553 Arcadian Drive,
DePere, Wisconsin.
10.34 Property Co-Tenancy Ownership
Agreement dated February 29, 2000 between
the Partnership and the D & R Family
Limited Partnership relating to the
property at 1553 Arcadian Drive, DePere,
Wisconsin.
10.35 Purchase Agreement dated February
29, 2000 between the Partnership and George
Richard Swanson and Christine Marie Orth
relating to the property at 530 North
Stephanie Street, Henderson, Nevada.
27 Financial Data Schedule for
year ended December 31, 1999.
B. Reports on Form 8-K - None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AEI INCOME & GROWTH FUND XXII
Limited Partnership
By: AEI Fund Management XXI, Inc.
Its Managing General Partner
March 10, 2000 By: /s/ Robert P. Johnson
Robert P. Johnson, President and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Name Title Date
/s/ Robert P. Johnson President (Principal Executive Officer) March 10, 2000
Robert P. Johnson and Sole Director of Managing General
Partner
/s/ Mark E. Larson Executive Vice President, Treasurer March 10, 2000
Mark E. Larson and Chief Financial Officer
(Principal Accounting Officer)
PURCHASE AGREEMENT
Marie Callender's - Henderson, NV
This AGREEMENT, entered into effective as of the 14 of February,
2000.
l. PARTIES. Seller is AEI Income & Growth Fund XXII Limited
Partnership which presently owns an undivided 53% interest in the
fee title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property"). Buyer is George M.
Kunitake and Kay H. Kunitake, husband and wife, and Steven T.
Kunitake, as joint tenants ("Buyer"). Seller wishes to sell and
Buyer wishes to buy a portion as Tenant in Common of Seller's
interest in the Entire Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
consists of an undivided 11.9969 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 February 7,
2000.
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 Sellers, 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 Sellers 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.
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
It is a contingency upon Seller's obligations hereunder that two
(2) copies of Co-Tenancy Agreement in the form attached hereto
duly executed by Buyer and AEI Real Estate Fund XIX Limited
Partnership and dated on escrow closing date be delivered to the
Seller on the closing date.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
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 section 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 Sellers 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 Sellers 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 agreement of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record.
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Sellers shall decide to
make no efforts to make title marketable, or is unable to make
title marketable or obtain insurable title, (after execution by
Buyer of such documents reasonably requested by Seller to
evidence the termination hereof) Buyer's First Payment shall be
returned and this Agreement shall be null and void and of no
further force and effect. Seller has no obligation to spend any
funds or make any effort to satisfy Buyer's objections, if any.
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
of satisfaction of Buyer's objections to the Buyer, the parties
shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Seller 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.
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
11. SELLER'S REPRESENTATION AND AGREEMENTS.
(a) Seller represents and warrants as of this date that:
(i) Except for the Lease Agreement in existence between AEI
Net Lease Income & Growth Fund XIX Limited Partnership, AEI
Income & Growth Fund XXII Limited Partnership (as
"Landlord") and Marie Callender Pie Shops Inc.("Tenant"),
dated September 27, 1999, Seller is not aware of any leases
of the Property. The above referenced lease agreement has a
right of first refusal in favor of the Tenant as set forth
in Article 34 of said lease agreement, which right will
apply to any attempted disposition of Property by Buyer
after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding on Buyer after the Closing Date without Buyer's
prior consent, which will not be unreasonably withheld.
However, Buyer acknowledges that Seller retains the right
both prior to and after the Closing Date to freely transfer
all or a portion of Seller's remaining undivided interest in
the Entire Property, provided such sale shall not encumber
the Property being purchased by Buyer in violation of the
terms hereof or the contemplated Co-Tenancy Agreement.
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
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
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 after the Closing Date. Seller shall
indemnify Buyer for any liability arising due to Hazardous
Materials on or in connection with the Entire Property prior
to the Closing Date. If Seller shall receive any notice to
the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(E) BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY
IN ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER
HAS NO OBLIGATIONS TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
THEREON OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY,
EXCEPT AS EXPRESSLY PROVIDED HEREIN.
(F) BUYER ACKNOWLEDGES THAT, HAVING BEEN GIVEN THE
OPPORTUNITY TO INSPECT THE ENTIRE PROPERTY AND SUCH
FINANCIAL INFORMATION ON THE LESSEE AND GUARANTORS OF THE
LEASE AS BUYER OR ITS ADVISORS SHALL REQUEST, IF IN SELLER'S
POSSESSION, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION
OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED BY
SELLER OR TO BE PROVIDED EXCEPT AS SET FORTH HEREIN. BUYER
FURTHER ACKNOWLEDGES THAT THE INFORMATION PROVIDED AND TO BE
PROVIDED BY SELLER WITH RESPECT TO THE PROPERTY, THE ENTIRE
PROPERTY AND TO THE LESSEE AND GUARANTORS OF LEASE WAS
OBTAINED FROM A VARIETY OF SOURCES AND SELLER NEITHER (A)
HAS MADE INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION, OR (B) MAKES ANY REPRESENTATIONS AS TO THE
ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS
HEREIN SET FORTH. THE SALE OF THE PROPERTY AS PROVIDED FOR
HEREIN IS MADE ON AN "AS IS" BASIS, AND BUYER EXPRESSLY
ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF
SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED HEREIN IN
PARAGRAPH 11(A) AND (B) ABOVE AND THIS PARAGRAPH 12, SELLER
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTY OF 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.
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
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
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/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
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
is 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.
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
17. BUYER'S 1031 TAX FREE EXCHANGE.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to First Guaranty Exchange
which will act as Accommodator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby First
Guaranty Exchange 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 First Guaranty
Exchange, 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 10 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 10 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
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
other agreements or understandings. Exhibits attached
to this Agreement are incorporated into this Agreement.
(b) If this escrow has not closed by February 7, 2000,
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Income & Growth Fund XXII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
George M. and Kay H. Kunitake
Steven T. Kunitake
153 Exeter
San Carlos, CA 94070
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.
REST OF PAGE INTENTIONALLY LEFT BLANK.
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: George M. Kunitake and Kay H. Kunitake, husband
and wife and Steven T. Kunitake, as joint tenants
By:/s/ George M Kunitake, by Steven T Kunitake his atty in fact
George M. Kunitake
By:/s/ Kay H Kunitake, by Steven T Kunitake her atty in fact
Kay H. Kunitake
By:/s/ Steven T Kunitake
Steven T. Kunitake
SELLER: AEI Income & Growth Fund XXII Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate
general partner
By:/s/ Robert P Johnson
Robert P. Johnson, President
Buyer Initial: /s/ SK
Purchase Agreement for Marie Callender's - Henderson, NV
EXHIBIT "A"
Being a division of Lot One (1) as shown upon the FINAL MAP
OF GALLERIA COMMONS ( a commercial subdivision) as depicted
in Book 79, Page 48 of Plats, Official Records, Clark
County, Nevada, also being a portion of the West Half (w 1/2)
of the Southwest Quarter (SW 1/4) of Section 3, Township 22
South, Range 62 East, M.D.M., City of Henderson, Clark
County, Nevada, more particularly described as follows:
Commencing at the West Quarter Corner (W 1/4 Cor.) of said
Section 3, said corner being common to Sections 3 & 4;
Thence South 00 14' 06" West along the West line of said
Section 3, a distance of 808.13 feet;
Thence North 88 55' 32" East, a distance of 50.01 feet to a
point on the Easterly right of way line of Stephanie Street;
Thence south 00 14' 06" West along said Easterly right of
way line, a distance of 585.62 feet;
Thence South 89 45' 54" East, a distance of 20.00 feet to
the Point of Beginning;
Thence North 88 51' 28" East, a distance of 147.22 feet;
Thence South 01 05' 43" East, a distance of 108.33 feet;
Thence South 88 51' 28" West, a distance of 2.92 feet;
Thence South 00 36' 35" East, a distance of 179.31 feet;
Thence south 89 56' 32" West, a distance of 149.41 feet;
Thence North 00 14' 06" East, a distance of 284.89 feet to
the POINT OF BEGINNING.
PURCHASE AGREEMENT
Children's World - DePere, WI
This AGREEMENT, entered into effective as of the 28 of February,
2000.
l. PARTIES. Seller is AEI Income & Growth Fund XXII Limited
Partnership which owns an undivided 100% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property"). Buyer is D & R
Family Limited Partnership, a Nevada Limited Partnership dated
12/24/92 ("Buyer"). Seller wishes to sell and Buyer wishes to buy
a portion as Tenant in Common of Seller's interest in the Entire
Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
consists of an undivided 17.2104 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 $253,200, 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,
$248,200 (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 February 29,
2000.
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) Copies of a Certificate of Occupancy or other such
document certifying completion and granting permission to
permanently occupy the improvements on the Entire Property
as are in Seller's possession.
(c) Copies of an "as built" survey of the Entire Property
done concurrent with Seller's acquisition of the Property.
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
It is a contingency upon Seller's obligations hereunder that
two (2) copies of Co-Tenancy Agreement in the form attached
hereto duly executed by Buyer and Seller and dated on escrow
closing date be delivered to the Seller on the closing date.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, 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 section 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
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
to the lease defined in paragraph 11 below; all matters of public
record; and other items disclosed to Buyer during the Review
Period.
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to make title marketable, or is unable to make title
marketable or obtain insurable title, (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof) Buyer's First Payment shall be returned and
this Agreement shall be null and void and of no further force and
effect.
Pending correction of title, the payments hereunder required
shall be postponed, but upon correction of title and within ten
(10) days after written notice of correction to the Buyer, the
parties shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. 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 for the year 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.
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
11. SELLER'S REPRESENTATION AND AGREEMENTS.
(a) Seller represents and warrants as of this date that:
(i) Except for the Net Lease Agreement in existence between
AEI Income & Growth Fund XXII Limited Partnership and
ARAMARK Educational Resources, Inc., f/k/a Children's World
Learning Centers, Inc., dated July 14, 1999, Seller is not
aware of any leases of the Property.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as set
forth in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding on Buyer after the Closing Date without Buyer's
prior consent, which will not be unreasonably withheld.
However, Buyer acknowledges that Seller retains the right
both prior to and after the Closing Date to freely transfer
all or a portion of Seller's remaining undivided interest in
the Entire Property, provided such sale shall not encumber
the Property being purchased by Buyer in violation of the
terms hereof or the contemplated Co-Tenancy Agreement.
12. DISCLOSURES.
(a) To the best of Seller's knowledge: there are now, and
at the Closing there will be, no material, physical or
mechanical defects of the Property, including, without
limitation, the plumbing, heating, air conditioning,
ventilating, electrical systems, and all such items are in
good operating condition and repair and in compliance with
all applicable governmental, zoning and land use laws,
ordinances, regulations and requirements.
(b) To the best of Seller's knowledge: the use and
operation of the Property now is, and at the time of Closing
will be, in full compliance with applicable building codes,
safety, fire, zoning, and land use laws, and other
applicable local, state and federal laws, ordinances,
regulations and requirements.
(c) Seller knows of no facts nor has Seller failed to
disclose to Buyer any fact known to Seller which would
prevent Buyer from using and operating the Property after
the Closing in the manner in which the Property has been
used and operated prior to the date of this Agreement.
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
(d) To the best of Seller's knowledge: the Property is not,
and as of the Closing will not be, in violation of any
federal, state or local law, ordinance or regulations
relating to industrial hygiene or to the environmental
conditions on, under, or about the Property including, but
not limited to, soil and groundwater conditions. To the
best of Seller's knowledge: there is no proceeding or
inquiry by any governmental authority with respect to the
presence of Hazardous Materials on the Property or the
migration of Hazardous Materials from or to other property.
Buyer agrees that Seller will have no liability of any type
to Buyer or Buyer's successors, assigns, or affiliates in
connection with any Hazardous Materials on or in connection
with the Property either before or after the Closing Date,
except as provided under applicable state or federal laws or
regulations.
(E) BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY
IN ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER
HAS NO OBLIGATIONS TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
THEREON OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY,
EXCEPT AS EXPRESSLY PROVIDED HEREIN.
(F) BUYER ACKNOWLEDGES THAT, HAVING BEEN GIVEN THE OPPORTUNITY
TO INSPECT THE PROPERTY AND SUCH FINANCIAL INFORMATION ON THE
LESSEE AND GUARANTORS OF THE LEASE AS BUYER OR ITS ADVISORS SHALL
REQUEST, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE
PROPERTY AND NOT ON ANY INFORMATION PROVIDED BY SELLER OR TO BE
PROVIDED EXCEPT AS SET FORTH HEREIN. BUYER FURTHER ACKNOWLEDGES
THAT THE INFORMATION PROVIDED AND TO BE PROVIDED BY SELLER WITH
RESPECT TO THE PROPERTY AND TO THE LESSEE AND GUARANTORS OF LEASE
WAS OBTAINED FROM A VARIETY OF SOURCES AND SELLER NEITHER (A) HAS
MADE INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION, OR (B) MAKES ANY REPRESENTATIONS AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION. THE SALE OF THE PROPERTY AS
PROVIDED FOR HEREIN IS MADE ON AN "AS IS" BASIS, AND BUYER
EXPRESSLY ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS
OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED HEREIN, SELLER
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OR CONDITION, HABITABILITY, TENANTABILITY, SUITABILITY
FOR COMMERCIAL PURPOSES, MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR PURPOSE, IN RESPECT OF THE PROPERTY.
The provisions (d) - (f) above shall survive closing.
13. CLOSING.
(a) Before the closing date, Seller will deposit into
escrow an executed limited warranty deed conveying insurable
title of the Property to Buyer, subject to the encumbrances
contained in paragraph 8 above.
(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
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
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
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. BUYER'S REPRESENTATIONS AND WARRANTIES.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in conflict
with (a) any applicable provisions of law, (b) any order of any
court or other agency of
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
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
is destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$10,000.00, this Agreement shall become null and void, at
Buyer's option exercised, if at all, by written notice to
Seller within ten (10) days after Buyer has received written
notice from Seller of said destruction or damage. Seller,
however, shall have the right to adjust or settle any
insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any ten-day period provided for above in this Subparagraph
16a for Buyer to elect to terminate this Agreement has
expired or Buyer has, by written notice to Seller, waived
Buyer's right to terminate this Agreement. If Buyer elects
to proceed and to consummate the purchase despite said
damage or destruction, there shall be no reduction in or
abatement of the purchase price, and Seller shall assign to
Buyer the Seller's right, title, and interest in and to all
insurance proceeds (pro-rata in relation to the Entire
Property) resulting from said damage or destruction to the
extent that the same are payable with respect to damage to
the Property, subject to rights of any Tenant of the Entire
Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
17. BUYER'S 1031 TAX FREE EXCHANGE.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to Real Estate Exchange, Inc.
which will act as Accommodator to perfect the 1031 exchange by
preparing an agreement of exchange of Real Property whereby Real
Estate Exchange, 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 Real Estate Exchange 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 10 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 10 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.
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
(b) If this escrow has not closed by February 29, 2000,
through no fault of Seller, Seller may either, at its
election, extend the closing date or exercise any remedy
available to it by law, including terminating this
Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Income & Growth Fund XXII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
Robert DeKlotz, Partner
D& R Family Limited Partnership
1760 E. North Hills Drive
LaHabra, CA 90631
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.
REST OF PAGE INTENTIONALLY LEFT BLANK
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: D & R Family Limited Partnership, a Nevada
Limited Partnership, dated 12/24/92
By: PTL Funding, Inc., its general partner
By:/s/ Robert DeKlotz Pres
Robert DeKlotz, President
WITNESS:
/s/ Cathy Guarnacci
Cathy Guarnacci
(Print Name)
SELLER: AEI Income & Growth Fund XXII 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
WITNESS:
/s/ Jill Rayburn
Jill Rayburn
(Print Name)
Buyer Initial: /s/ RD
Purchase Agreement for Children's World, DePere, Wi
EXHIBIT "A"
LEGAL DESCRIPTION
All of Lot One (1) of Volume 34 Certified Survey Maps, Page
125, Brown County Records, and is located in part of
Government Lots 1 and 2, Section Thirty-five (35) and part
of Government Lot 1 and part of the Southeast One-quarter of
the Northeast One-quarter (SE 1/4 - NE 1/4), Section Thirty-four
(34), all being in Township Twenty-three (23) North, Range
Twenty (20) East, in the Town of Ledgeview, Brown County,
Wisconsin.
and
Part of Lot One (1) of Volume 30 Certified Survey Maps, Page
71, Brown County Records, being part of Government Lots 1
and 2, Section Thirty-five (35), Township Twenty-three (23)
North, Range Twenty (20) East, in the Town of Ledgeview,
Brown County, Wisconsin, more fully described as follows:
Commencing at the West 1/4 corner, Section 35, T23N, R20E,
thence N01 36' 23" West, 1763.33 feet along the West line of
said Section 35, to the South right-of-way of Heritage Road,
also know as C.T.H. "X"; thence N89 02'44" East, 82.54 feet
along said right-of-way to the point of beginning; thence
N89 02'44" East, 53.61 feet along said right-of-way; thence
167.98 feet along said right-of-way, being the arc of a
1095.92 foot radius curve to the right, whose long chord
bears S86 33'48" East, 167.82 feet; thence S136'23" East,
539.93 feet along the East line of Lot 1, Volume 30
Certified Survey Maps, Page 71, Brown County Records, to the
North right-of-way of Swan Road; thence S88 33'16" West,
220.77 feet along said right-of-way; thence N136;23" West,
554.67 feet along the East line of Lot 1, Volume 34
Certified Survey Maps, Page 125, Brown County Records, to
the point of beginning.
Tax Parcel No. D-50-1 and D-84-1 Arcadian
Lane/Heritage Road
DePere, Wi 54115
PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Children's World - DePere, WI)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 29 day of February, 2000, by and
between D & R Family Limited Partnership, a Nevada Limited
Partnership dated 12/24/92 (hereinafter called "D & R") and AEI
Income & Growth Fund XXII Limited Partnership (hereinafter called
"Fund XXII") ("D & R", Fund XXII (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 XXII presently owns an undivided 82.7896% interest
in and to, and D & R presently owns an undivided 17.2104%
interest in and to the land situated in the City of DePere,
County of Brown and State of WI, (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 D & R's interest by
Fund XXII; 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 D & R 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 XXII, or its designated agent, successors or
assigns. Provided, however, if Fund XXII shall sell all of its
interest in the Premises, the duties and obligations of Fund XXII
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 XXII with respect to all
administrative, operational and management matters of the
property comprising the Premises, including but not limited to
the management of the net lease agreement for the Premises. The
parties hereto hereby designate Fund XXII as their sole and
exclusive agent to deal with, and Fund XXII retains the sole
right to deal with, any property agent or tenant and to 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 D & R. As long as Fund XXII owns an interest in the
Premises, only Fund XXII may obligate D & R with respect to any
expense for the Premises.
Co-Tenant Initial: /s/ RD
Co-Tenancy Agreement for Children's World, DePere, WI
As further set forth in paragraph 2 hereof, Fund XXII agrees to
require any lessee of the Premises to name D & R as an insured or
additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XXII shall use
its best efforts to obtain endorsements adding Co-Tenants to said
policies from lessee within 30 days of commencement of this
agreement. In any event, Fund XXII 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 XXII may offset
against, pay to itself and deduct from any payment due to D & R
under this Agreement, and may pay to itself the amount of D & R's
share of any legitimate expenses of the Premises which are not
paid by D & R to Fund XXII or its assigns, within ten (10) days
after demand by Fund XXII. In the event there is insufficient
operating income from which to deduct D & R's unpaid share of
operating expenses, Fund XXII 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.
D & R has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XXII in the amount
of $639 for the expenses, direct and indirect, incurred by Fund
XXII in providing D & R with quarterly accounting and
distributions of D & R 's share of net income and for tracking,
reporting and assessing the calculation of D & R 's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and D & R authorizes
Fund XXII to deduct such amount from D & R 's share of revenue
from the Premises. D & R 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 XXII pursuant to Section 1 hereof.
Fund XXII may terminate its obligation under this paragraph upon
30 days notice to D & R 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 XXII'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 XXII 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, D & R shall be
entitled to receive 17.2104% of all items of income and expense
generated by the Premises. Upon receipt of said accounting, if
the payments received by each Co-Tenant
Co-Tenant Initial: /s/ RD
Co-Tenancy Agreement for Children's World, DePere, WI
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 XXII, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XXII sufficient to pay said net operating losses
and to provide necessary operating capital for the premises and
to pay for said capital improvements, repairs and/or
replacements, all in proportion to their undivided interests in
and to the Premises.
5. Co-Tenants may, at any time, sell, finance, or otherwise
create a lien upon their interest in the Premises but only upon
their interest and not upon any part of the interest held, or
owned, by any other Co-Tenant. All Co-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 property management 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
July 14, 2029 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 Property and with the title thereto. Once any person, party
or entity has ceased to have an interest in fee in any portion of
the Entire Property, it shall not be bound by, subject to or
benefit from the terms hereof; but its heirs, executors,
administrators, personal representatives, successors or assigns,
as the case may be, shall be substituted for it hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be deemed
given or served in accordance with the provisions of this
Agreement, if said notice or elections addressed as follows;
Co-Tenant Initial: /s/ RD
Co-Tenancy Agreement for Children's World, DePere, WI
If to Fund XXII:
AEI Income & Growth Fund XXII Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota 55101
If to D & R:
Robert DeKlotz, Partner
D & R Family Limited Partnership
1760 E. North Hills Drive
LaHabra, CA 90631
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.
Co-Tenant Initial: /s/ RD
Co-Tenancy Agreement for Children's World, DePere, WI
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
D & R: D & R Family Limited Partnership, a Nevada Limited
Partnership dated 12/24/92
By: PTL Funding, Inc., its general partner
By:/s/ Robert DeKlotz Pres
Robert DeKlotz, President
WITNESS:
/s/ Jimmy Sepulvedd
Jimmy Sepulvedd
(Print Name)
State of CALIF)
) ss.
County of Orange)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 28 day of February,
2000, Robert DeKlotz, who executed the foregoing instrument in
said capacity.
/s/ Cathy Guarnacci
Notary Public
[notary seal]
Co-Tenant Initial: /s/ RD
Co-Tenancy Agreement for Children's World, DePere, WI
Fund XXII: AEI Income & Growth Fund XXII Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate general
partner
By:/s/ Robert P Johnson
Robert P. Johnson, President
WITNESS:
/s/ Jill Rayburn
Jill Rayburn
(Print Name)
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 29th day of
February, 2000, Robert P. Johnson, President of AEI Fund
Management XXI Inc., corporate general partner of AEI Income &
Growth Fund XXII 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/ RD
Co-Tenancy Agreement for Children's World, DePere, WI
EXHIBIT "A"
LEGAL DESCRIPTION
All of Lot One (1) of Volume 34 Certified Survey Maps, Page 125,
Brown County Records, and is located in part of Government Lots 1
and 2, Section Thirty-five (35) and part of Government Lot 1 and
part of the Southeast One-quarter of the Northeast One-quarter
(SE 1/4 -NE 1/4), Section Thirty-four (34), all being in Township
Twenty-three (23) North, Range Twenty (20) East, in the Town of
Ledgeview, Brown County, Wisconsin.
And
Part of Lot One (1) of Volume 30 Certified Survey Maps, Page 71,
Brown County Records, being part of Government Lots 1 and 2,
Section Thirty-five (35), Township Twenty-three (23) North, Range
Twenty (20) East, in the Town of Ledgeview, Brown County,
Wisconsin, more fully described as follows:
Commencing at the West 1/4 corner, Section 35, T23N, R20E; thence
N01 36' 23" West, 1763.33 feet along the West line of said
Section 35, to the South right-of-way of Heritage Road, also
known as C.T.H. "X"; thence N 89 02' 44" East 82.54 feet along
said right-of-way to the point of beginning; thence N 89 02' 44"
East, 53.61 feet along said right-of-way; thence 167.98 feet
along said right-of-way, being the arc of a 1095.92 foot radius
curve to the right, whose long chord bears S86 33' 48" East,
167.82 feet; thence S1 36' 23" East 539.93 feet along the East
line of Lot 1, Volume 30 Certified Survey Maps, Page 71, Brown
County Records, to the North right-of-way of Swan Road; thence
S88 33' 16" West, 220.77 feet along said right-of-way; thence N 1
36' 23" West, 554.67 feet along the East line of Lot 1, Volume 34
Certified Survey Maps, Page 125, Brown County Records, to the
point of beginning.
Tax Parcel No. D-50-1 and D-84-1 Arcadian Lane/Heritage
Road
DePere, WI 54115
PURCHASE AGREEMENT
Marie Callender's - Henderson, NV
This AGREEMENT, entered into effective as of the 29 of February,
2000.
l. PARTIES. Seller is AEI Income & Growth Fund XXII Limited
Partnership which presently owns an undivided 53% interest in the
fee title to that certain real property legally described in the
attached Exhibit "A" (the "Entire Property"). Buyer is George
Richard Swanson and Christine Marie Orth, married with rights of
survivorship ("Buyer"). Seller wishes to sell and Buyer wishes to
buy a portion as Tenant in Common of Seller's interest in the
Entire Property.
2. PROPERTY. The Property to be sold to Buyer in this transaction
consists of an undivided 14.1641 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 $305,000, 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,
$300,000 (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 March 3, 2000.
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 Sellers, 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 Sellers 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.
Buyer Initial: /s/ GRS
Purchase Agreement for Marie Callender's - Henderson, NV
(d) Lease (as further set forth in paragraph 11(a) below) of
the Entire Property showing occupancy date, lease expiration
date, rent, and Guarantys, if any, accompanied by such
tenant financial statements as may have been provided most
recently to Seller by the Tenant and/or Guarantors.
It is a contingency upon Seller's obligations hereunder that two
(2) copies of Co-Tenancy Agreement in the form attached hereto
duly executed by Buyer and AEI Real Estate Fund XIX Limited
Partnership and dated on escrow closing date be delivered to the
Seller on the closing date.
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and escrow holder before the expiration of
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 section 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 Sellers 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 Sellers 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 agreement of a
title company selected by Seller to issue an Owner's policy of
title insurance, dated as of the close of escrow, in an amount
equal to the purchase price, insuring that Buyer will own
insurable title to the Property subject only to: the title
company's standard exceptions; current real property taxes and
assessments; survey exceptions; the rights of parties in
possession pursuant to the lease defined in paragraph 11 below;
and other items of record.
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
Buyer shall be allowed five (5) days after receipt of said
commitment for examination and the making of any objections to
marketability thereto, said objections to be made in writing or
deemed waived. If any objections are so made, the Seller shall
be allowed eighty (80) days to make such title marketable or in
the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Sellers shall decide to
make no efforts to make title marketable, or is unable to make
title marketable or obtain insurable title, (after execution by
Buyer of such documents reasonably requested by Seller to
evidence the termination hereof) Buyer's First Payment shall be
returned and this Agreement shall be null and void and of no
further force and effect. Seller has no obligation to spend any
funds or make any effort to satisfy Buyer's objections, if any.
Pending satisfaction of Buyer's objections, the payments
hereunder required shall be postponed, but upon satisfaction of
Buyer's objections and within ten (10) days after written notice
of satisfaction of Buyer's objections to the Buyer, the parties
shall perform this Agreement according to its terms.
9. CLOSING COSTS. Seller will pay one-half of escrow fees, the
cost of the title commitment and any brokerage commissions
payable. The Buyer will pay the cost of issuing a Standard
Owners Title Insurance Policy in the full amount of the purchase
price, if Buyer shall decide to purchase the same. Buyer will
pay all recording fees, one-half of the escrow fees, and the cost
of an update to the Survey in Seller 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.
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
11. SELLER'S REPRESENTATION AND AGREEMENTS.
(a) Seller represents and warrants as of this date that:
(i) Except for the Lease Agreement in existence between AEI
Net Lease Income & Growth Fund XIX Limited Partnership, AEI
Income & Growth Fund XXII Limited Partnership (as
"Landlord") and Marie Callender Pie Shops Inc.("Tenant"),
dated September 27, 1999, Seller is not aware of any leases
of the Property. The above referenced lease agreement has a
right of first refusal in favor of the Tenant as set forth
in Article 34 of said lease agreement, which right will
apply to any attempted disposition of Property by Buyer
after this transaction.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) Except as previously disclosed to Buyer and as
permitted in paragraph (b) below, Seller is not aware of any
contracts Seller has executed that would be binding on Buyer
after the closing date.
(b) Provided that Buyer performs its obligations when
required, Seller agrees that it will not enter into any new
contracts that would materially affect the Property and be
binding on Buyer after the Closing Date without Buyer's
prior consent, which will not be unreasonably withheld.
However, Buyer acknowledges that Seller retains the right
both prior to and after the Closing Date to freely transfer
all or a portion of Seller's remaining undivided interest in
the Entire Property, provided such sale shall not encumber
the Property being purchased by Buyer in violation of the
terms hereof or the contemplated Co-Tenancy Agreement.
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
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
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 after the Closing Date. Seller shall
indemnify Buyer for any liability arising due to Hazardous
Materials on or in connection with the Entire Property prior
to the Closing Date. If Seller shall receive any notice to
the contrary prior to Closing, Seller will inform Buyer
prior to Closing.
(E) BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY
IN ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER
HAS NO OBLIGATIONS TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
THEREON OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY,
EXCEPT AS EXPRESSLY PROVIDED HEREIN.
(F) BUYER ACKNOWLEDGES THAT, HAVING BEEN GIVEN THE
OPPORTUNITY TO INSPECT THE ENTIRE PROPERTY AND SUCH
FINANCIAL INFORMATION ON THE LESSEE AND GUARANTORS OF THE
LEASE AS BUYER OR ITS ADVISORS SHALL REQUEST, IF IN SELLER'S
POSSESSION, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION
OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED BY
SELLER OR TO BE PROVIDED EXCEPT AS SET FORTH HEREIN. BUYER
FURTHER ACKNOWLEDGES THAT THE INFORMATION PROVIDED AND TO BE
PROVIDED BY SELLER WITH RESPECT TO THE PROPERTY, THE ENTIRE
PROPERTY AND TO THE LESSEE AND GUARANTORS OF LEASE WAS
OBTAINED FROM A VARIETY OF SOURCES AND SELLER NEITHER (A)
HAS MADE INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH
INFORMATION, OR (B) MAKES ANY REPRESENTATIONS AS TO THE
ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS
HEREIN SET FORTH. THE SALE OF THE PROPERTY AS PROVIDED FOR
HEREIN IS MADE ON AN "AS IS" BASIS, AND BUYER EXPRESSLY
ACKNOWLEDGES THAT, IN CONSIDERATION OF THE AGREEMENTS OF
SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED HEREIN IN
PARAGRAPH 11(A) AND (B) ABOVE AND THIS PARAGRAPH 12, SELLER
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTY OF 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.
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
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
punitive, consequential or speculative damages arising out of any
default by Seller hereunder.
15. BUYER'S REPRESENTATIONS AND WARRANTIES.
a. Buyer represents and warrants to Seller as follows:
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and be
reasonable in order to consummate the transactions
contemplated herein.
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
(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
is destroyed or further damaged by fire, the elements, or
any cause, due to events occurring subsequent to the date of
this Agreement to the extent that the cost of repair exceeds
$10,000.00, this Agreement shall become null and void, at
Buyer's option exercised, if at all, by written notice to
Seller within ten (10) days after Buyer has received written
notice from Seller of said destruction or damage. Seller,
however, shall have the right to adjust or settle any
insured loss until (i) all contingencies set forth in
Paragraph 6 hereof have been satisfied, or waived; and (ii)
any ten-day period provided for above in this Subparagraph
16a for Buyer to elect to terminate this Agreement has
expired or Buyer has, by written notice to Seller, waived
Buyer's right to terminate this Agreement. If Buyer elects
to proceed and to consummate the purchase despite said
damage or destruction, there shall be no reduction in or
abatement of the purchase price, and Seller shall assign to
Buyer the Seller's right, title, and interest in and to all
insurance proceeds (pro-rata in relation to the Entire
Property) resulting from said damage or destruction to the
extent that the same are payable with respect to damage to
the Property, subject to rights of any Tenant of the Entire
Property.
If the cost of repair is less than $10,000.00, Buyer shall
be obligated to otherwise perform hereinunder with no
adjustment to the Purchase Price, reduction or abatement,
and Seller shall assign Seller's right, title and interest
in and to all insurance proceeds pro-rata in relation to the
Entire Property, subject to rights of any Tenant of the
Entire Property.
(b) If, prior to closing, the Property, or any part
thereof, is taken by eminent domain, this Agreement shall
become null and void, at Buyer's option. If Buyer elects to
proceed and to consummate the purchase despite said taking,
there shall be no reduction in, or abatement of, the
purchase price, and Seller shall assign to Buyer the
Seller's right, title, and interest in and to any award
made, or to be made, in the condemnation proceeding pro-rata
in relation to the Entire Property, subject to rights of any
Tenant of the Entire Property.
In the event that this Agreement is terminated by Buyer as
provided above in Subparagraph 16a or 16b, the First Payment
shall be immediately returned to Buyer (after execution by Buyer
of such documents reasonably requested by Seller to evidence the
termination hereof).
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
17. BUYER'S 1031 TAX FREE EXCHANGE.
While Seller acknowledges that Buyer is purchasing the
Property as "replacement property" to accomplish a tax free
exchange, Buyer acknowledges that Seller has made no
representations, warranties, or agreements to Buyer or Buyer's
agents that the transaction contemplated by the Agreement will
qualify for such tax treatment, nor has there been any reliance
thereon by Buyer respecting the legal or tax implications of the
transactions contemplated hereby. Buyer further represents that
it has sought and obtained such third party advice and counsel as
it deems necessary in regards to the tax implications of this
transaction.
Buyer wishes to novate/assign the ownership rights and
interest of this Purchase Agreement to Independent Exchange
Service which will act as Accommodator to perfect the 1031
exchange by preparing an agreement of exchange of Real Property
whereby Independent Exchange Service 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 Independent Exchange Service, 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 10 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 10 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.
Buyer Initial: /s/ GRS /s/ CMO
Purchase Agreement for Marie Callender's - Henderson, NV
(b) If this escrow has not closed by March 3, 2000, through
no fault of Seller, Seller may either, at its election,
extend the closing date or exercise any remedy available to
it by law, including terminating this Agreement.
(c) Funds to be deposited or paid by Buyer must be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(d) All notices from either of the parties hereto to the
other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified
mail, return receipt requested, postage prepaid, or by a
nationally recognized courier service guaranteeing overnight
delivery to the party at his or its address set forth below,
or to such other address as such party may hereafter
designate by written notice to the other party.
If to Seller:
Attention: Robert P. Johnson
AEI Income & Growth Fund XXII Limited Partnership
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
George R. Swanson and Christine M. Orth
160 Kipling Drive
Mill Valley, CA 94941
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.
REST OF PAGE INTENTIONALLY LEFT BLANK.
Buyer Initial: /s/ GRS /s/CMO
Purchase Agreement for Marie Callender's - Henderson, NV
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER: George Richard Swanson and Christine Marie
Orth, married with rights of survivorship
By:/s/ George R Swanson
George Richard Swanson
By:/s/ Christine M Orth
Christine Marie Orth
SELLER: AEI Income & Growth Fund XXII Limited Partnership
By: AEI Fund Management XXI, Inc., its corporate
general partner
By:/s/ Robert P Johnson
Robert P. Johnson, President
Buyer Initial: /s/ GRS /s/ CMO
Purchase Agreement for Marie Callender's - Henderson, NV
EXHIBIT "A"
Legal Description
(Henderson, Nevada)
Being a division of Lot One (1) as shown upon the FINAL MAP
OF GALLERIA COMMONS (a commercial subdivision) as depicted
in Book 79, Page 48 of Plats, Official Records, Clark
County, Nevada, also being a portion of the West Half (W 1/2)
of the Southwest Quarter (SW 1/4) of Section 3, Township 22
South, Range 62 East, M.D.M., City of Henderson, Clark
County, Nevada, more particularly described as follows:
Commencing at the West Quarter Corner (W 1/4 Cor.) of said
Section 3, said corner being common to Sections 3 and 4;
Thence South 00 14; 06: West along the West line of said
Section 3, a distance of 808.13 feet;
Thence North 88 55; 32: East, a distance of 50.01 feet to a
point on the Easterly right of way line of Stephanie Street;
Thence South 00 14; 06" West along said Easterly right of
way line, a distance of 585.62 feet;
Thence south 89 45; 54: East, a distance of 20.00 feet to
the Point of Beginning;
Thence North 88 51' 28" East, a distance of 147.22 feet;
Thence South 01 05' 43" East, a distance of 108.33 feet;
Thence South 88 51' 28" West, a distance of 2.92 feet;
Thence South 00 36' 35" East, a distance of 179.31 feet;
Thence south 89 56' 32" West, a distance of 149.41 feet;
Thence North 00 14' 06" East, a distance of 284.89 feet to
the POINT OF BEGINNING.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001023458
<NAME> AEI INCOME & GROWTH FUND XXII LTD PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 247,401
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 247,401
<PP&E> 13,363,547
<DEPRECIATION> (201,635)
<TOTAL-ASSETS> 13,409,313
<CURRENT-LIABILITIES> 271,826
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13,137,487
<TOTAL-LIABILITY-AND-EQUITY> 13,409,313
<SALES> 0
<TOTAL-REVENUES> 984,858
<CGS> 0
<TOTAL-COSTS> 377,709
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 607,149
<INCOME-TAX> 0
<INCOME-CONTINUING> 607,149
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 607,149
<EPS-BASIC> 35.10
<EPS-DILUTED> 35.10
</TABLE>
