SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: June 30, 1996
Commission file number: 0-17467
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1603719
(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)
(612) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of June 30, 1996 and December 31, 1995
Statements for the Periods ended June 30, 1996 and 1995:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
BALANCE SHEET
JUNE 30, 1996 AND DECEMBER 31, 1995
(Unaudited)
ASSETS
1996 1995
CURRENT ASSETS:
Cash and Cash Equivalents $ 6,390,690 $ 6,467,946
Receivables 72,078 79,092
----------- -----------
Total Current Assets 6,462,768 6,547,038
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 4,590,681 4,852,325
Buildings and Equipment 9,642,206 10,154,639
Accumulated Depreciation (2,820,024) (2,796,130)
----------- -----------
11,412,863 12,210,834
Land Held for Resale 261,644 0
----------- -----------
Net Investments in Real Estate 11,674,507 12,210,834
----------- -----------
Total Assets $18,137,275 $18,757,872
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 74,707 $ 53,187
Distributions Payable 433,544 715,773
Security Deposit 37,307 37,307
Unearned Rent 41,118 0
----------- -----------
Total Current Liabilities 586,676 806,267
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (25,906) (21,896)
Limited Partners, $1,000 Unit value;
30,000 Units authorized; 23,389 Units
issued; 23,107 Units outstanding 17,576,505 17,973,501
----------- -----------
Total Partners' Capital 17,550,599 17,951,605
----------- -----------
Total Liabilities and Partners' Capital $18,137,275 $18,757,872
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Second Quarter Ended Six Months Ended
6/30/96 6/30/95 6/30/96 6/30/95
INCOME:
Rent $ 353,189 $ 571,212 $ 760,092 $ 1,154,026
Investment Income 82,215 883 163,308 1,692
Other Income 0 0 0 36,592
--------- --------- --------- -----------
Total Income 435,404 572,095 923,400 1,192,310
--------- --------- --------- -----------
EXPENSES:
Partnership Administration-
Affiliates 59,959 65,877 146,354 150,000
Partnership Administration
and Property Management-
Unrelated Parties 65,204 22,650 101,256 45,230
Interest 0 7,649 0 16,969
Depreciation 103,379 141,280 207,725 282,560
--------- --------- --------- -----------
Total Expenses 228,542 237,456 455,335 494,759
--------- --------- --------- -----------
OPERATING INCOME 206,862 334,639 468,065 697,551
GAIN ON DISPOSITION
OF REAL ESTATE 0 0 78,290 0
MINORITY INTEREST IN
OPERATING INCOME 0 (5,815) 0 (11,629)
--------- --------- --------- -----------
NET INCOME $ 206,862 $ 328,824 $ 546,355 $ 685,922
========= ========= ========= ===========
NET INCOME ALLOCATED:
General Partners $ 2,069 $ 3,288 $ 5,464 $ 6,859
Limited Partners 204,793 325,536 540,891 679,063
--------- --------- --------- -----------
$ 206,862 $ 328,824 $ 546,355 $ 685,922
========= ========= ========= ===========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(23,107 and 23,162 weighted average
Units outstanding in 1996 and 1995,
respectively) $ 8.86 $ 14.06 $ 23.41 $ 29.32
========= ========= ========= ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 546,355 $ 685,922
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 207,725 282,560
Gain on Disposition of Real Estate (78,290) 0
(Increase) Decrease in Receivables 7,014 (16,148)
Increase (Decrease) in Payable to
AEI Fund Management, Inc. 21,520 (42,611)
Decrease in Contract Payable 0 (17,059)
Increase in Unearned Rent 41,118 60,860
Minority Interest 0 (2,270)
----------- -----------
Total Adjustments 199,087 265,332
----------- -----------
Net Cash Provided By
Operating Activities 745,442 951,254
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Disposition of Real Estate 406,892 0
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in Distributions Payable (282,229) (108,211)
Distributions to Partners (947,361) (792,022)
Decrease in Long-Term Debt - Net 0 (12,893)
----------- -----------
Net Cash Used For
Financing Activities (1,229,590) (913,126)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (77,256) 38,128
CASH AND CASH EQUIVALENTS, beginning of period 6,467,946 106,795
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 6,390,690 $ 144,923
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid During the Year $ 0 $ 14,676
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1994 $ (39,245) $16,255,941 $16,216,696 23,161.79
Distributions (7,920) (784,102) (792,022)
Net Income 6,859 679,063 685,922
--------- ----------- ----------- -----------
BALANCE, June 30, 1995 $ (40,306) $16,150,902 $16,110,596 23,161.79
========= =========== =========== ===========
BALANCE, December 31, 1995 $ (21,896) $17,973,501 $17,951,605 23,106.79
Distributions (9,474) (937,887) (947,361)
Net Income 5,464 540,891 546,355
--------- ----------- ----------- -----------
BALANCE, June 30, 1996 $ (25,906) $17,576,505 $17,550,599 23,106.79
========= =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Real Estate Fund XVII Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVII, Inc. (AFM), the Managing
General Partner of the Partnership. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner of the Partnership. An affiliate
of AFM, AEI Fund Management, Inc., 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 February 10, 1988 when minimum
subscriptions of 2,000 Limited Partnership Units
($2,000,000) were accepted. The Partnership's offering
terminated on November 1, 1988 when the one-year offering
period expired. The Partnership received subscriptions for
23,388.7 Limited Partnership Units ($23,388,700).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$23,388,700 and $1,000, respectively. During the operation
of the Partnership, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of the Partnership's properties which the General
Partners determine to distribute will, after provisions for
debts and reserves, be paid in the following manner: (i)
first, 99% to the Limited Partners and 1% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 6% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) next, 99% to
the Limited Partners and 1% to the General Partners until
the Limited Partners receive an amount equal to 14% of their
Adjusted Capital Contribution per annum, cumulative but not
compounded, to the extent not previously distributed; (iii)
next, to the General Partners until cumulative distributions
to the General Partners under Items (ii) and (iii) equal 15%
of cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's
property, will be allocated first in the same ratio in
which, and to the extent, Net Cash Flow is distributed to
the Partners for such year. Any additional profits will be
allocated 90% to the Limited Partners and 10% to the General
Partners. In the event no Net Cash Flow is distributed to
the Limited Partners, 90% of each item of Partnership
income, gain or credit for each respective year shall be
allocated to the Limited Partners, and 10% of each such item
shall be allocated to the General Partners. Net losses from
operations will be allocated 98% to the Limited Partners and
2% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's property will be
allocated in accordance with the Partnership Agreement as
follows: (i) first, to those Partners with deficit balances
in their capital accounts in an amount equal to the sum of
such deficit balances; (ii) second, 99% to the Limited
Partners and 1% to the General Partners until the aggregate
balance in the Limited Partners' capital accounts equals the
sum of the Limited Partners' Adjusted Capital Contributions
plus an amount equal to 14% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, to the
General Partners until cumulative allocations to the General
Partners equal 15% of cumulative allocations. Any remaining
balance will be allocated 85% to the Limited Partners and
15% to the General Partners. Losses will be allocated 98%
to the Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the Partnership
or withdrawal by a General Partner, the General Partners
will contribute to the Partnership an amount equal to the
lesser of the deficit balances in their capital accounts or
1% of total Limited Partners' and General Partners' capital
contributions.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate -
In 1995, the Partnership elected early adoption of the
Statement of Financial Accounting Standards No. 121,
"Accounting for Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of." This standard requires the
Partnership to compare 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 Statement requires the
Partnership to recognize an impairment loss by the amount by
which the carrying amount of the property exceeds the fair
value of the property. Adoption of this Statement is not
expected to have a material effect on the Partnership's
financial statements.
On April 22, 1993, the Partnership sold a 13.4893% interest
in the Applebee's restaurant in Virginia Beach, Virginia to
an unrelated third party. The Partnership owned the
Virginia Beach property as tenants-in-common with the
unrelated third party. The management of the property was
governed by a co-tenancy agreement between the Partnership
and the unrelated third party, which granted the Partnership
the authority to control the management of the property.
The Partnership accounted for its interest under the full
consolidation method whereby the unrelated third party's
interest in the property is reflected in the Partnership's
financial statements as a minority interest.
In September, 1995, the lessee exercised an option in the
Lease Agreement to purchase the property. On November 8,
1995, the sale closed with the parties receiving net sale
proceeds of $1,741,224, which resulted in a net gain of
$679,964. At the time of sale, the cost and related
accumulated depreciation was $1,279,192 and $217,932,
respectively. The Partnership's share of the net sale
proceeds and net gain was $1,496,613 and $596,181,
respectively.
In March 1995, the lessee of the Applebee's restaurant in
Columbia, South Carolina, exercised an option in the Lease
Agreement to purchase the property. On July 28, 1995, the
sale closed with the Partnership receiving net sale proceeds
of $715,545 which resulted in a net gain of $307,167. At
the time of sale, the cost and related accumulated
depreciation of the property was $534,974 and $126,596,
respectively.
In July 1995, the lessee of the Applebee's restaurant in
Hampton, Virginia, exercised an option in the Lease
Agreement to purchase the property. On August 31, 1995, the
sale closed with the Partnership receiving net sale proceeds
of $1,747,127 which resulted in a net gain of $661,866. At
the time of sale, the cost and related accumulated
depreciation of the property was $1,287,072 and $201,811,
respectively.
On October 25, 1995, the Partnership sold two of the Jiffy
Lube Auto Care Centers to the lessee. The Partnership
recognized net sale proceeds of $322,442, which resulted in
a net gain of $78,244 for the Jiffy Lube in Garland, Texas.
At the time of sale, the cost and related accumulated
depreciation was $303,108 and $58,910, respectively. The
Partnership recognized net sale proceeds of $483,653, which
resulted in a net gain of $112,985 for one of the Jiffy
Lube's in Dallas, Texas. At the time of sale, the cost and
related accumulated depreciation was $454,300 and $83,632,
respectively.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
In September, 1995, the lessee of the Applebee's restaurant
in Richmond, Virginia exercised an option in the Lease
Agreement to purchase the property. On October 30, 1995,
the sale closed with the Partnership receiving net sale
proceeds of $1,905,438, which resulted in a net gain of
$746,293. At the time of sale, the cost and related
accumulated depreciation was $1,375,732 and $216,587,
respectively. A portion of the net sale proceeds was used
to pay off the bank note and satisfy the mortgage on the
property.
In January, 1996, the Cheddar's restaurant in Indianapolis,
Indiana was destroyed by a fire. The Partnership reached an
agreement with the tenant and insurance company which called
for termination of the Lease, demolition of the building and
payment to the Partnership of $407,282 for the building and
equipment and $49,688 for lost rent. The property will not
be rebuilt and the Partnership listed the land for sale.
The Partnership recognized net disposition proceeds of
$406,892 which resulted in a net gain of $78,290. At the
time of disposition, the cost and related accumulated
depreciation was $512,433 and $183,831, respectively. The
Partnership's cost of the land is $261,644.
In June, 1996, the Partnership entered into an agreement to
sell the Danny's Family Car Wash in Phoenix, Arizona to the
lessee. The sale price will be approximately $1,700,000
which will result in a net gain of approximately $340,000.
The Partnership anticipates the sale will close on August
15, 1996.
During the first six months of 1996 and the year 1995, the
Partnership distributed $235,251 and $930,047 of the net
sale proceeds to the Limited and General Partners which
represented a return of capital of $10.08 and $39.82 per
Limited Partnership Unit, respectively. The Managing
General Partner is in the process of preparing a proxy
statement to propose an amendment to the Limited Partnership
Agreement that would allow the Partnership to reinvest the
majority of the sales proceeds in additional properties.
In May, 1990, Flagship, Inc. (Flagship), the lessee of the
J.T. McCord's property, filed for reorganization, after
occupying the property for approximately five years. In
March, 1993, the Partnership, along with affiliated
Partnerships which also own J.T. McCord's properties, filed
its own plan of reorganization (the "Plan") with the Court.
That Plan provided for an assignee of the Partnerships (a
replacement tenant) to purchase the assets of Flagship and
operate the restaurants with financial assistance from the
Partnerships. This Plan was expected to allow the
Partnerships to avoid closing these properties, allow
operations to continue uninterrupted, and avoid further
costly litigation with Flagship and its creditors. The Plan
was confirmed by the Court and the creditors April 16, 1993
and became effective July 20, 1993.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
To entice the assignee, WIM, Inc. (WIM), to operate the
restaurants and enter into the Lease Agreements, the
Partnership provided funds to renovate the restaurants and
paid for operating expenses. The Partnership's share of
renovation and operating expenses during this period was
$222,976, which was expensed in the fourth quarter of 1994.
However, WIM was not able to operate the properties
profitably and was unable to make rental payments as
provided in the Lease Agreements. To reduce expenses and
minimize the losses produced by this property, the
Partnership amended the agreement to provide for WIM to make
annual rental payments of the greater of $60,000 or 5.5% of
sales beginning October 1, 1994. In December, 1995, the
Partnership took possession of the property after WIM was
unable to perform under the terms of the Lease. While the
property is being re-leased or sold, the Partnership is
responsible for the real estate taxes and other costs
required to maintain the property.
As part of the plan, the Partnerships which own these
properties, were responsible for an annual payment to the
Creditors Trust of approximately $110,000 for the next five
years. The Partnership's share of the annual payment is
$23,833. In 1994, the Partnership expensed $103,595 to
record this liability and administrative costs related to
the bankruptcy.
In 1995, the Partnership negotiated a settlement, with the
trustee, for a lump sum payment of the minimum amount due
over the remaining term of the plan for release of the
Partnership and WIM from any other financial obligations and
reporting requirements to the trustee. The settlement of
$73,667 was completed in the fourth quarter of 1995.
In July, 1996, the Partnership entered into an agreement to
sell the J.T. McCord's in Mesquite, Texas to an unrelated
third party. The sale price for the Partnership's interest
in the property will be approximately $682,500, which will
result in a net loss of approximately $109,000. The
agreement calls for the purchase to be completed by August
30, 1996. The buyer is currently conducting an inspection
of the property and may terminate the agreement at any time,
without recourse.
The Partnership owns a 65.09% interest in the Sizzler
restaurant at the King's Island Theme Park near Cincinnati,
Ohio and a 100% interest in a Sizzler restaurant on Fields
Ertel Road in Cincinnati, Ohio. In January, 1994, the
Partnership closed the restaurant at King's Island and
listed it for sale or lease. While the property is being re-
leased or sold, the Partnership is responsible for the real
estate taxes and other costs required to maintain the
property. No rent was received in 1996 or 1995 from the
property.
In September, 1995, the Partnership re-leased the property
on Fields Ertel Road to FFT Cincinnati Ltd. under a triple
net lease agreement with a primary term of 20 years which
may be renewed for up to four consecutive five-year periods.
The annual base rent is $19,750 for the first lease year and
$75,000 for the second lease year, with rent increases each
subsequent lease year of two percent of the prior year's
rent. The Partnership may also receive percentage rent if
sales exceed certain amounts. The property is now operated
as a Bennigan's restaurant.
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(4) Payable to AEI Fund Management -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
(5) Long Term Debt -
On January 31, 1994, the Partnership entered into a five-
year bank term Note for $195,000 with interest at the prime
rate plus one half percent. Proceeds from the Note were
advanced to WIM for renovation and other restaurant costs
related to the J.T. McCord's property. The Partnership
provided a mortgage and a Lease Assignment Agreement on the
Applebee's restaurant in Richmond, Virginia as collateral
for the loan. On October 30, 1995, a portion of the net
proceeds from the sale of the Applebee's property was used
to pay off the outstanding principal balance of the bank
Note and satisfy the mortgage. In the first six months of
1995, interest expense on the Note was $7,962.
(6) Line of Credit -
In September, 1994, the Partnership established a $150,000
unsecured line of credit at Fidelity Bank of Edina,
Minnesota. On January 5, 1995, the line of credit was
increased to $400,000. The line of credit bears interest at
the prime rate plus one percent on the outstanding balance,
which was due on demand, but in any event no later than
January 5, 1996. The line of credit was established to
provide short-term financing to cover any temporary cash
deficits. In January, 1996, the line of credit expired. In
the first six months of 1995, interest expense related to
the line of credit was $6,089.
(7) Other Income -
In March, 1995, the Partnership received $36,592 of
insurance proceeds for vandalism to the Kings Island Sizzler
restaurant. Damage to the property was minor and the
Partnership has elected not to make repairs at this time.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the six months ended June 30, 1996 and 1995, the
Partnership recognized rental income of $760,092 and $1,154,026,
respectively. During the same periods, the Partnership earned
investment income of $163,308 and $1,692, respectively. In 1996,
rental income decreased $393,934 as a result of the property
sales discussed below. The decrease in rental income was
partially offset by rent increases on ten properties and
additional investment income earned on the net proceeds from the
property sales.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In March, 1995, the Partnership received $36,592 of
insurance proceeds for vandalism to the Kings Island Sizzler
restaurant. Damage to the property was minor and the Partnership
has elected not to make repairs at this time. The insurance
proceeds are shown as Other Income on the Income Statement.
In May, 1990, Flagship, Inc. (Flagship), the lessee of the
J.T. McCord's property, filed for reorganization, after occupying
the property for approximately five years. In March, 1993, the
Partnership, along with affiliated Partnerships which also own
J.T. McCord's properties, filed its own plan of reorganization
(the "Plan") with the Court. That Plan provided for an assignee
of the Partnerships (a replacement tenant) to purchase the assets
of Flagship and operate the restaurants with financial assistance
from the Partnerships. This Plan was expected to allow the
Partnerships to avoid closing these properties, allow operations
to continue uninterrupted, and avoid further costly litigation
with Flagship and its creditors. The Plan was confirmed by the
Court and the creditors April 16, 1993 and became effective July
20, 1993.
To entice the assignee, WIM, Inc. (WIM), to operate the
restaurants and enter into the Lease Agreements, the Partnership
provided funds to renovate the restaurants and paid for operating
expenses. The Partnership's share of renovation and operating
expenses during this period was $222,976, which was expensed in
the fourth quarter of 1994. However, WIM was not able to operate
the properties profitably and was unable to make rental payments
as provided in the Lease Agreements. To reduce expenses and
minimize the losses produced by this property, the Partnership
amended the agreement to provide for WIM to make annual rental
payments of the greater of $60,000 or 5.5% of sales beginning
October 1, 1994. In December, 1995, the Partnership took
possession of the property after WIM was unable to perform under
the terms of the Lease. While the property is being re-leased or
sold, the Partnership is responsible for the real estate taxes
and other costs required to maintain the property.
As part of the Plan, the Partnerships which own these
properties, were responsible for an annual payment to the
Creditors Trust of approximately $110,000 for the next five
years. The Partnership's share of the annual payment is $23,833.
In 1994, the Partnership expensed $103,595 to record this
liability and administrative costs related to the bankruptcy.
In 1995, the Partnership negotiated a settlement, with the
trustee, for a lump sum payment of the minimum amount due over
the remaining term of the plan for release of the Partnership and
WIM from any other financial obligations and reporting
requirements to the trustee. The settlement of $73,667 was
completed in the fourth quarter of 1995.
In July, 1996, the Partnership entered into an agreement
to sell the J.T. McCord's in Mesquite, Texas to an unrelated
third party. The sale price for the Partnership's interest in
the property will be approximately $682,500, which will result in
a net loss of approximately $109,000. The agreement calls for
the purchase to be completed by August 30, 1996. The buyer is
currently conducting an inspection of the property and may
terminate the agreement at any time, without recourse.
The Partnership owns a 65.09% interest in the Sizzler
restaurant at the King's Island Theme Park near Cincinnati, Ohio
and a 100% interest in a Sizzler restaurant on Fields Ertel Road
in Cincinnati, Ohio. In January, 1994, the Partnership closed
the restaurant at King's Island and listed it for sale or lease.
While the property is being re-leased or sold, the Partnership is
responsible for the real estate taxes and other costs required to
maintain the property. No rent was received in 1996 or 1995 from
the property.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In September, 1995, the Partnership re-leased the property
on Fields Ertel Road to FFT Cincinnati Ltd. under a triple net
lease agreement with a primary term of 20 years which may be
renewed for up to four consecutive five-year periods. The annual
base rent is $19,750 for the first lease year and $75,000 for the
second lease year, with rent increases each subsequent lease year
of two percent of the prior year's rent. The Partnership may
also receive percentage rent if sales exceed certain amounts.
The property is now operated as a Bennigan's restaurant.
During the six months ended June 30, 1996 and 1995, the
Partnership paid Partnership administration expenses to
affiliated parties of $146,354 and $150,000, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $101,256 and $45,230, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The increase
in these expenses in 1996, when compared to 1995, is the result
of expenses incurred in 1996 related to the J.T. McCord's and
Sizzler situations discussed above.
As of June 30, 1996, the Partnership's annualized cash
distribution rate was 7.18%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants, due to inflation and real sales growth, 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.
Liquidity and Capital Resources
During the six months ended June 30, 1996, the
Partnership's cash balances decreased $77,256. Net cash provided
by operating activities decreased from $951,254 in 1995 to
$745,442 in 1996 mainly as the result of a decrease in revenues
as a result of the property sales discussed below and an increase
in expenses in 1996.
For the six months ended June 30, 1996, net cash provided
by investing activities was $406,892, which represents net
insurance proceeds received related to the Cheddar's restaurant
in Indianapolis, Indiana as discussed below.
In March 1995, the lessee of the Applebee's restaurant in
Columbia, South Carolina, exercised an option in the Lease
Agreement to purchase the property. On July 28, 1995, the sale
closed with the Partnership receiving net sale proceeds of
$715,545 which resulted in a net gain of $307,167. At the time
of sale, the cost and related accumulated depreciation of the
property was $534,974 and $126,596, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
In July 1995, the lessee of the Applebee's restaurant in
Hampton, Virginia, exercised an option in the Lease Agreement to
purchase the property. On August 31, 1995, the sale closed with
the Partnership receiving net sale proceeds of $1,747,127 which
resulted in a net gain of $661,866. At the time of sale, the
cost and related accumulated depreciation of the property was
$1,287,072 and $201,811, respectively.
On October 25, 1995, the Partnership sold two of the Jiffy
Lube Auto Care Centers to the lessee. The Partnership recognized
net sale proceeds of $322,442, which resulted in a net gain of
$78,244 for the Jiffy Lube in Garland, Texas. At the time of
sale, the cost and related accumulated depreciation was $303,108
and $58,910, respectively. The Partnership recognized net sale
proceeds of $483,653, which resulted in a net gain of $112,985
for one of the Jiffy Lube's in Dallas, Texas. At the time of
sale, the cost and related accumulated depreciation was $454,300
and $83,632, respectively.
In September, 1995, the lessee of the Applebee's
restaurant in Richmond, Virginia exercised an option in the Lease
Agreement to purchase the property. On October 30, 1995, the
sale closed with the Partnership receiving net sale proceeds of
$1,905,438, which resulted in a net gain of $746,293. At the
time of sale, the cost and related accumulated depreciation was
$1,375,732 and $216,587, respectively. A portion of the net sale
proceeds was used to pay off the bank note and satisfy the
mortgage on the property as discussed below.
On April 22, 1993, the Partnership sold a 13.4893%
interest in the Applebee's restaurant in Virginia Beach, Virginia
to an unrelated third party. The Partnership owned the Virginia
Beach property as tenants-in-common with the unrelated third
party. The management of the property was governed by a co-
tenancy agreement between the Partnership and the unrelated third
party, which granted the Partnership the authority to control the
management of the property. The Partnership accounted for its
interest under the full consolidation method whereby the
unrelated third party's interest in the property is reflected in
the Partnership's financial statements as a minority interest.
In September, 1995, the lessee exercised an option in the
Lease Agreement to purchase the property. On November 8, 1995,
the sale closed with the parties receiving net sale proceeds of
$1,741,224, which resulted in a net gain of $679,964. At the time
of sale, the cost and related accumulated depreciation was
$1,279,192 and $217,932, respectively. The Partnership's share of
the net sale proceeds and net gain was $1,496,613 and $596,181,
respectively.
In January, 1996, the Cheddar's restaurant in
Indianapolis, Indiana was destroyed by a fire. The Partnership
reached an agreement with the tenant and insurance company which
called for termination of the Lease, demolition of the building
and payment to the Partnership of $407,282 for the building and
equipment and $49,688 for lost rent. The property will not be
rebuilt and the Partnership listed the land for sale. The
Partnership recognized net disposition proceeds of $406,892 which
resulted in a net gain of $78,290. At the time of disposition,
the cost and related accumulated depreciation was $512,433 and
$183,831, respectively. The Partnership's cost of the land is
$261,644.
In June, 1996, the Partnership entered into an agreement
to sell the Danny's Family Car Wash in Phoenix, Arizona to the
lessee. The sale price will be approximately $1,700,000 which
will result in a net gain of approximately $340,000. The
Partnership anticipates the sale will close on August 15, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
During the first six months of 1996 and the year 1995, the
Partnership distributed $235,251 and $930,047 of the net sale
proceeds to the Limited and General Partners which represented a
return of capital of $10.08 and $39.82 per Limited Partnership
Unit, respectively. The Managing General Partner is in the
process of preparing a proxy statement to propose an amendment to
the Limited Partnership Agreement that would allow the
Partnership to reinvest the majority of the sales proceeds in
additional properties.
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 in the fourth quarter of each
year. During 1996, the Partnership will be distributing
approximately $354,000 of net sale proceeds in addition to the
regular quarterly distributions of net cash flow. The
distributions will be made in equal quarterly installments. As a
result, distributions are higher in 1996, when compared to 1995.
For the six months ended June 30, 1996, the other use of cash
flow for financing activities was related to the decrease in
distributions payable which was mainly the result of a special
distribution of net sale proceeds of approximately $354,000 which
was accrued in December 1995, but not paid until January 1996.
The Partnership may purchase 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 1995, eleven Limited Partners redeemed a total of
55 Partnership Units for $35,807 in accordance with the
Partnership Agreement. The Partnership acquired these Units using
Net Cash Flow from operations. In prior years, a total of twelve
Limited Partners redeemed 227 Partnership Units for $192,222.
The redemptions increase the remaining Limited Partners'
ownership interest in the Partnership.
On January 31, 1994, the Partnership entered into a five-
year bank term Note for $195,000 with interest equal to the prime
rate plus one half percent. Proceeds from the Note were advanced
to WIM for renovation and other restaurant operating costs
related to the J.T. McCord's property. The Partnership provided
a mortgage and a Lease Assignment Agreement on its Applebee's
restaurant in Richmond, Virginia as collateral for the loan. On
October 30, 1995, the Partnership sold the property and a portion
of the net proceeds was used to pay off the outstanding principal
balance of the bank Note and satisfy the mortgage. In the first
six months of 1995, interest expense on the Note was $7,962.
In September, 1994, the Partnership established a $150,000
unsecured line of credit at Fidelity Bank of Edina, Minnesota.
On January 5, 1995, the line of credit was increased to $400,000.
The line of credit bears interest at the prime rate plus one
percent on the outstanding balance, which was due on demand, but
in any event no later than January 5, 1996. The line of credit
was established to provide short-term financing to cover any
temporary cash deficits. In January, 1996, the line of credit
expired. In the first six months of 1995, interest expense
related to the line of credit was $6,089.
The continuing rent payments from the properties, together
with cash generated from the property sales, should be adequate
to fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Real Estate Purchase Agreement dated June 30, 1996
between the Partnership and 43rd & Indian School,
Inc. relating to the property at 43rd Avenue & W.
Indian School Road, Phoenix, Arizona.
10.2 Purchase Agreement dated July 10, 1996 between the
Partnership, AEI Real Estate Fund XVI Limited
Partnership, and BW, Incorporated relating to the
property at 3808 Town Crossing Boulevard, Mesquite,
Texas.
27 Financial Data Schedule for period
ended June 30, 1996.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Dated: August 8, 1996 AEI Real Estate Fund XVII
Limited Partnership
By: AEI Fund Management XVII, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
REAL ESTATE PURCHASE AGREEMENT
1. PARTIES. The parties to this Real Estate Purchase Agreement
(this "Agreement") are AEI Real Estate Fund XVII Limited
Partnership, a Minnesota limited partnership ("Seller"), whose
address is 1300 Minnesota World Trade Center, 30 East Seventh
Street, St. Paul, MN 55101, and 43rd & Indian School, Inc., an
Arizona corporation (the "Purchaser"), whose address is 12621 N.
Paradise Village Parkway West, Phoenix, AZ 85032.
2. PURPOSE/PROPERTY. Pursuant to the terms of this Agreement,
Seller will sell and the Purchaser will purchase that certain
tract of land identified as:
4348 W. Indian School Road, Phoenix, Arizona,
(which is called a "Property" in this Agreement), being more
fully described in Exhibit A attached hereto and made a part
hereof for all purposes, together with any and all personal
property located thereon as of the date of closing.
3. PURCHASE PRICE. The total purchase price for the Property
(including the consideration for any improvements or fixtures
located at the Property, if any) is ONE MILLION SEVEN HUNDRED
THOUSAND and NO/100 DOLLARS ($1,700,000) (the "Purchase Price"),
is to be paid by wire transfer into Seller's account, subject to
the adjustments described below, if any, at closing.
4. EARNEST MONEY DEPOSIT AND RATIFICATION OF LEASE. In lieu of
Earnest Money Deposit, both Seller and Purchaser ratify and
confirm that the Property is currently encumbered by a Net Lease
Agreement ("Lease") dated February 9, 1989 by and between Seller
(as "Lessor") and Purchaser (as "Lessee"). Further, the Property
is Subleased pursuant to a Sublease Agreement dated December 14,
1989, by and between Purchaser as sublessor and Albert and Anna
Lankes, as Sublessees ("Sublease"). In accordance with Paragraph
15 herein, should this Agreement terminate for any reason, the
Lease shall continue in full force and effect throughout the term
of the Lease, according to the terms thereof, and nothing herein
is intended to affect the terms and full force and effect of the
Sublease, subject to the determination of the United States
Bankruptcy Court for the District of Arizona, which has pending
before it disputes with regard to the Sublease. The parties
confirm that the Lease shall remain in full force and effect from
the date hereof until this Agreement is either terminated or
Closing shall occur as contemplated hereunder. Upon Closing and
the transfer of fee title to Purchaser, Purchaser shall have no
further obligations under the Lease to Seller, but the Lease as
regards the Sublessee and the sublessee's obligations to
Purchaser shall continue in full force and effect, with Purchaser
assuming the position of Seller as Lessor under the Lease, and as
sublessor under the Sublease.
5. TITLE. Title to the Property is to be conveyed by a Limited
Warranty Deed, in a form commonly used in Arizona. The Property
will be conveyed in fee simple, subject to:
(a) local and/or municipal zoning regulations,
ordinances, building restrictions, regulations and any
violations thereof:
(b) all assessments, costs and charges for any and all
municipal improvements affecting of benefiting the
Property; and
(c) covenants, restrictions, easements, agreements,
and encumbrances of record.
6. TITLE REPORT/COMMITMENT. Seller shall deliver to Purchaser,
at Seller's sole cost and expense, a Commitment for Title
Insurance (the "Title Commitment") indicating the present status
of the title to the Property within thirty (30) days of the
effective date of this Agreement. The Title Commitment shall show
all matters affecting title to the Property, including all
exceptions, easements, restrictions, right-of ways, covenants,
reservations, encumbrances, and other conditions affecting the
Property which will appear in the Title Commitment ("Permitted
Exceptions"). Within fifteen (15) days of the receipt of such
Title Policy, Purchaser, if unsatisfied with the status of
marketability of title, shall provide Seller with a written
statement setting forth Purchaser's title objections (the "Notice
of Title Objections"). In the event Seller elects to so, Seller
shall have one hundred twenty (120) days from the receipt of the
Notice of Title Objection within which to take such actions as
are necessary to make title marketable or insure over them. If
Seller is unable or unwilling to make title marketable within the
aforesaid one hundred twenty (120) day period, Purchaser shall
elect to (a) accept such title as Seller may be able to deliver
or (b) terminate this Agreement by providing Seller with written
notice of termination. Upon Seller's receipt of a notice of
termination, this Agreement shall be deemed null and void, with
neither party having any further rights, obligations or
liabilities hereunder, and thereafter the Lease shall continue in
full force and effect throughout the term of the Lease. If Seller
does not receive a Notice of Title Objections within the
aforementioned fifteen (15) day review period, then it shall be
conclusively deemed that Purchaser is satisfied with the
condition of title as shown on the Title Report and Purchaser
shall waive its right to object to the status of title.
7. HAZARDOUS MATERIALS. (a) DEFINITION. As used in this Section
7, the phrase "Hazardous Materials" shall mean (1) any "hazardous
waste" as defined by the resource Conversation and Recovery Act
of 1976, as amended from time to time, and the regulations
promulgated under that act; (2) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time, and the
regulations promulgated under that act; (3) any oil, petroleum
products, or their by-products; and (4) any substance now
regulated by any federal, state, or local governmental authority.
(b) PURCHASER'S INDEMNITY. The Purchaser shall defend,
indemnify and hold the Seller harmless from any and all claims,
demands, actions and causes of action, including reasonable
attorney's fees, connected with or related to contamination of
the Property by any Hazardous Materials which occurs or occurred
at any time before the Purchaser sells such Property to a third
party unrelated to Purchaser, Provided the Seller gives Purchaser
timely notice of such claims and a reasonable opportunity to
defend against such claim and/or to conduct appropriate remedial
measures, and provided further that under no circumstances shall
the Purchaser be required to conduct remediation efforts not
required by applicable governmental regulation.
(c) NO SELLER WARRANTY. SELLER MAKES NO WARRANTY OF ANY
KIND OR NATURE RESPECTING HAZARDOUS MATERIALS ON, UNDER, OR ABOUT
THE PROPERTY. PURCHASER ALSO AGREES THAT SELLER WILL HAVE NO
LIABILITY OF ANY TYPE, DIRECT OR INDIRECT, TO PURCHASER OR
PURCHASER'S SUCCESSORS, ASSIGNS, LENDERS OR AFFILIATES IN
CONNECTION WITH ANY HAZARDOUS, TOXIC, DANGEROUS, FLAMMABLE,
EXPLOSIVE OR CHEMICAL MATERIALS OR SUBSTANCES OF ANY TYPE
(WHETHER OR NOT DEFINED AS SUCH UNDER ANY APPLICABLE LAWS) ON OR
IN CONNECTION WITH THE PROPERTY EITHER BEFORE OR AFTER THE
CLOSING DATE.
8. LETTER OF CREDIT/LANKES BANKRUPTCY. The Seller/Lessor holds
the proceeds of the Letter of Credit (as set forth in the Lease)
in the amount of $37,307.00. These funds will be held by Seller
until the issuance of a final order in the adversary proceeding #
94-01076, Chapter 11 Bankruptcy In Re: Lankes, Case pending in
the United States Bankruptcy Court, District of Arizona, Case
Number B-94-1362-PHX-GBN. The funds held by Seller will be
released in compliance with such order, at which time Seller's
claims against Purchaser in such proceeding shall be dismissed
with prejudice. The Purchaser shall defend, indemnify and hold
Seller/Lessor harmless from any and all claims, demands, actions
and causes of action, including reasonable attorney's fees,
connected with or related to any Bankruptcy proceedings, claims,
motions or demands of Albert J. Lankes, Sr. or Anna Lankes or any
suits related to the proceeds of the Letter of Credit, Lankes's
claims for rent or any other damages relating to Lankes's use or
occupancy of the Property.
9. DEFAULT; REMEDIES. If the conditions, if any, to Purchaser's
obligation to close this transaction are satisfied or waived by
Purchaser and Purchaser nevertheless fails, through no fault of
Seller, to close the purchase of the Property, Seller's sole
remedy shall consist of the termination of this Agreement and
thereafter the Lease Agreement shall continue in full force and
effect throughout the term of the Lease. In the event Seller
fails, through no fault of Purchaser, to close the sale of the
Property, Purchaser shall have the right to sue for specific
performance of this Agreement, except as otherwise specifically
set forth in this Agreement. In any event of termination hereof,
the Lease Agreement shall continue in full force and effect
throughout the term of the Lease.
10. POSSESSION. Purchaser is currently in possession of the
Property as Lessee under the Lease. Seller will transfer title of
ownership at closing subject to the Lease, Sublease, and the
Permitted Exceptions. Purchaser desires that the transfer of fee
title to Purchaser shall not effect a merger of the Lease into
the fee title, and that the Lease shall remain in full force an
effect without the need for the parties to execute any further
documentation, unless otherwise agreed to by the Parties, and
subject to the provisions of paragraph 4 above, it being the
intent of the parties that the obligations of lessor(after
closing to be Purchaser), lessee, and sublessee shall continue as
before the closing, subject to the determination of the United
States Bankruptcy Court for the District of Arizona.
11. TAXES AND UTILITY ASSESSMENTS. Real and personal property
taxes, water and sewer assessments are currently paid by
Purchaser, as Lessee under the Lease. Seller shall assist
Purchaser with changing all taxes and utilities over to
Purchaser's name.
12. TRANSFER TAXES AND OTHER CHARGES. Seller will pay the cost of
issuing the title commitment, the deed stamp taxes, if any, and
one-half of escrow fees. Purchaser will pay the cost of the title
insurance premium for an Owner's policy (if required by
Purchaser), all recording fees, one-half of the escrow fees, and
the costs of an update to the Survey in Seller's possession (if
an update is required by Purchaser). Each party will pay its own
attorneys' fees and costs to document and close this transaction.
13. BROKER'S COMMISSION. Both Seller and Purchaser represent that
there is no real estate broker involved in this transaction and
no commission is due any party.
14. CLOSING. The closing of title to the Property will be
conditioned on the commitment of a nationally recognized title
company selected by Seller and acceptable to Purchaser to issue
an Owner's policy of title insurance and may be completed via the
wire transfer of funds and the over night mail transmittal of
documentation at a time set forth in a written notice to close
("Notice to Close") sent to Seller and Purchaser by the title
company. The Notice to Close shall set forth a closing date which
shall not be more than thirty (30) days after all contingencies
have been met, subject to fulfillment of the requirements of this
Agreement. In any case, the Closing Date shall not be more than
ninety (90) days after this Agreement, unless mutually extended
by both parties.
(a) Before the closing date, Seller will
deposit into escrow: an executed limited warranty
deed conveying insurable title of the Property to
Purchaser;
(b) On or Before the closing date, Purchaser
will deposit into escrow: the balance of the
purchase price when required under Section 4; any
additional funds required to close escrow. Both
parties will sign and deliver to the escrow holder
any other documents reasonably required by the
escrow holder to close escrow.
(c) On the closing date, if escrow is in a
position to close, the escrow holder will: record
the deed in the official records of the county
where the Property is located; cause the title
company to commit to issue the title policy;
immediately deliver to Seller the portion of the
purchase price deposited into escrow by cashier's
check or wire transfer (less debits and
prorations, if any); deliver to Seller and
Purchaser a signed counterpart of the escrow
holder's certified closing statement; and take all
other actions necessary to close escrow.
15. TERMINATION/RISK OF LOSS AND CONDEMNATION. This Agreement
will expire if there is no closing within the time specified in
the Notice of Closing, plus any mutually agreed extensions of
such time. In addition to other provisions for termination
provided for herein, this Agreement may be terminated by the
Purchaser prior to closing if:
(a) all or part of the building, fixtures, equipment
or improvements to be conveyed pursuant to this
Agreement (excluding any equipment which is not
repairable as of the date of this Agreement or
constitutes Seller's Property) are destroyed or damaged
beyond repair prior to closing; provided that such
damage is not the result of the negligence or willful
acts or omissions of Purchaser, its agents,
representatives or visitors; or
(b) all or a substantial part of the Property is
condemned or Seller receives notice of an intended
condemnation by any governmental authority prior to
closing.
If the Purchaser proceeds to closing without terminating this
Agreement, Purchaser shall be deemed to have waived any grounds
upon which it could have terminated this Agreement; provided,
however, in the event Purchaser proceeds with the purchase of the
Property despite a notice of condemnation having been served on
Seller, at closing Seller shall execute any and all documentation
necessary to convey to Purchaser any and all rights Seller may
have regarding recovery in any condemnation proceeding relating
to the Property commenced after closing. If Purchaser terminates
this Agreement pursuant to the provisions of this Agreement,
neither party shall have any claim for damages against the other
for breach of this Agreement except that each party shall be
responsible for its own out-of-pocket expenses incurred in
connection with this transaction. Should this Agreement
terminate for any reason, the Lease (as defined in Paragraph 4)
shall remain in full force and effect.
16. WARRANTIES AND REPRESENTATIONS. Each party represents,
warrants and covenants to the other party that; (i) it has full
authority to enter into this Agreement (ii) it agrees to be bound
by the terms and conditions of this Agreement, and (iii) it
agrees to perform its respective obligations.
Disclaimer. Seller and Purchaser acknowledge and agree that
Seller acquired the Property through a sale\leaseback with
Purchaser. Seller has been an absentee landlord. Consequently,
Seller has little, if any, knowledge of the physical
characteristics of the Property.
Accordingly, except as otherwise specifically stated in this
Agreement, Seller hereby specifically disclaims any warranty,
guaranty, or representation, oral or written, past, present, or
future of, as to, or concerning (i) the nature and condition of
the Property, including, without limitation, the water, soil, and
geology, and the suitability thereof and of the Property for any
and all activities and uses which Purchaser may elect to conduct
thereon; (ii) except for the warranty contained in the Deed to be
delivered by Seller at the Closing, the nature and extent of any
right of way, Lease, possession, lien, encumbrance, license,
reservation, condition, or otherwise, and (iii) the compliance of
the Property or its operation with any laws, ordinances, or
regulations of any government or other body.
Purchaser acknowledges that having been given the
opportunity to inspect the Property, Purchaser is relying solely
on its own investigation of the Property and not on any
information provided or to be provided by Seller except as set
forth herein. Purchaser further acknowledges that the
information provided and to be provided with respect to the
Property by Seller was obtained from a variety of sources and
Seller neither (a) has made independent investigation or
verification of such information, or (b) makes any
representations as to the accuracy or completeness of such
information. The sale of the Property as provided for herein is
made on an "AS IS" basis, and Purchaser 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.
17. NOTICES. All notices and other communications required or
permitted to be given or delivered hereunder shall be in writing
and shall be delivered personally, transmitted by fax, sent by
overnight courier, or by certified mail, postage prepaid and
return receipt requested, directed to the party intended at the
address set forth below, or at such other address as may be
designated by such party by notice given to the other party in
the manner described above, and shall be effective upon receipt:
Seller: Purchaser:
AEI Real Estate Fund XVII 43rd & Indian School, Inc.
Limited Partnership 12621 N. Paradise Village Parkway West
1300 Minnesota World Trade Center Phoenix, Arizona 85032
30 East 7th Street
St. Paul, MN 55101
18. SURVIVAL. Upon execution of this Agreement, this Agreement
shall survive the consummation of the transaction and the
delivery of the Limited Warranty Deed and any other conveyance
documents from Seller to Purchaser on the Closing Date, and all
terms and conditions hereof shall remain in full force and effect
between the parties.
19. MODIFICATION. This Agreement supersedes any and all prior
discussions and agreements Seller and Purchaser with respect to
the purchase of the Property and other matters contained herein,
and this Agreement contains the sole and entire understanding
between the parties hereto with respect to the transaction
contemplated herein. This Agreement shall not be modified or
amended, except by written agreement executed by both parties.
20. APPLICABLE LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the state
in which the Property is located.
21. TIME. Time is and shall be the essence of this Agreement.
22. EXECUTION. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same
instrument.
23. EFFECTIVE DATE. This Agreement shall be effective as of the
date on which it has been completely executed on behalf of both
Seller and the Purchaser, and null and void if not signed by both
parties before June 30, 1996.
AEI REAL ESTATE FUND XVII 43RD & INDIAN SCHOOL, INC.
LIMITED PARTNERSHIP
By: AEI Fund Management XVII, Inc. By: /s/ Daniel Hendon
its corporate general partner Daniel L. Hendon
Its: President
By: /s/ Mark E. Larson
Mark Larson
Its: /s/ CFO
EXHIBIT "A"
PARCEL NO. 1:
A portion of the Southeast quarter of the Southeast quarter of Section 21,
Township 2 North, Range 2 East of the Gila and Salt River Base and Meridian,
Maricopa County, Arizona, more particularly described as follows:
COMMENCING at the Southeast corner of said Section 21, which is at the
intersection of North 43rd Avenue and West Indian School Road;
thence South 89 degrees 57 minutes 08 seconds West along the
South line of Section 21, the assumed basis of bearing for this
legal description, a distance of 651.27 feet to a point;
thence North 00 degree 02 minutes 52 seconds West, on a line
perpendicular to the South line of said Section 21, a distance of
63.36 feet to a point on the North right of way of Indian School
Road and the TRUE POINT of BEGINNING;
thence South 00 degrees 02 minutes 52 seconds East, along said
right of way, a distance of 1.87 feet to a point of tangency of a
circular curve to the right;
thence along the arc of said circular curve having a radius of
12.00 feet, a central angle of 88 degrees 33 minutes 55 seconds,
a chord bearing of South 44 degrees 14 minutes 06 seconds West,
and an arc length of 18.55 feet to a point of tangency of the
curve;
thence South 88 degrees 31 minutes 03 seconds West, a distance of
171.69 feet to a point;
thence North 00 degrees 09 minutes 20 seconds East, departing
from said North right of way line of Indian School Road, a
distance of 7.51 feet to a point;
thence North 18 degrees 53 minutes 35 seconds West, a distance of
44.70 feet to a point;
thence North 00 degrees 02 minutes 52 seconds West, a distance of
183.67 feet to a point;
thence North 89 degrees 57 minutes 08 seconds East, a distance of
41.50 feet to a point on a circular curve;
thence along the arc of said circular curve having a radius of
316.03 feet, a central angle of 5 degrees 41 munutes 12 seconds,
a chord bearing of South 18 degrees 24 minutes 17 seconds East,
and an arc length of 31.37 feet to a point of tangency of the
curve;
thence South 21 degrees 08 minutes 54 seconds East, a distance of
49.19 feet to a point;
thence North 89 degrees 57 minutes 08 seconds East, a distance of
132.54 feet to a point;
thence South 01 degrees 32 minutes 34 seconds West, a distance of
139.71 feet to the TRUE POINT OF BEGINNING;
EXCEPT all minerals, coal, gases, hydrocarbon substances,
fissiconable materials, metallic minerals and all non-metallic
minerals below 500 feet, as reserved in Deed recorded in Document
No. 85621832, records of Maricopa County, Arizona.
PARCEL NO. 2
A reciprocal easement appurtenant to Parcel 1 as more fully set
forth in Document No. 87416903.
PURCHASE AGREEMENT
3808 Towne Crossing Blvd.
Mesquite, TX
This AGREEMENT, entered into effective as of the 10 of July, 1996.
l. Parties. Seller is AEI Real Estate Fund XVI Limited
Partnership as to an undivided 35% interest, and AEI Real Estate
Fund XVII Limited Partnership as to an undivided 65% interest,
("Seller"). Seller holds an undivided 100% interest in the fee
title to that certain real property legally described in the
attached Exhibit "A" (the "Property"). Buyer is BW,
Incorporated, a Texas corporation, ("Buyer"). Seller wishes to
sell and Buyer wishes to buy the Property.
2. Property. The Property to be sold to Buyer in this transaction
is legally described on Exhibit A attached hereto, subject to all
easements, covenants, conditions, restrictions and agreements of
record ("Permitted Exceptions"). Additionally, Seller makes no
claim of the items of personalty listed on Exhibit A-1, but
Seller will provide Buyer with a Quit Claim Bill of Sale,
(without warranty of title of any kind) as to the items of
personalty listed on Exhibit A-1.
3. Purchase Price. The purchase price for this Property is
$1,050,000, based on the following terms:
4. Terms. The purchase price for the Property will be paid by
Buyer as follows:
(a) When this agreement is executed, Buyer will pay $25,000
to be deposited into Escrow (the "First Payment"), and
independent consideration of $50 which the parties have
bargained for and agreed upon as consideration for Seller's
execution and delivery of this agreement. The independent
consideration is independent of any other consideration and
is non-refundable and shall be retained by seller. The First
Payment will be credited against the purchase price when and
if escrow closes and the sale is completed. After the
expiration of the Review Period as defined in paragraph 6
below, the First Payment held for the account of Seller
shall become non-refundable.
(b) Balance of purchase price, $1,024,950, to be deposited
into escrow on or before the closing date.
5. Closing Date. Escrow shall close on or before August 30, 1996.
6. Due Diligence. Buyer will have until the expiration of the
forty-fifth day after delivery (the "Review Period") of each of
following items as set forth in 6(a) - (b), 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.
(a) A title insurance commitment for an Owner's Title
insurance policy (see paragraph 8 below).
Buyer Initial: /s/ R.B. /s/ J.W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
(b) Copy of the survey of the Property done concurrent with
Seller's acquisition of the Property.
Buyer acknowledges that the information provided and to be
provided by Seller with respect to the Property was obtained
from outside 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. Seller is not
aware that such information is inaccurate or misleading.
At closing, Seller shall provide Buyer with an affidavit
under penalty of perjury, that Seller is not a "foreign
person".
Buyer may cancel this agreement for ANY REASON in its sole
discretion by delivering a cancellation notice by certified mail,
return receipt requested, or by personal delivery to Seller and
escrow holder before the expiration of the Review Period or
Inspection Period as defined in Section 16. Such notice shall be
deemed effective only upon receipt by Seller.
If Buyer cancels this Agreement as permitted under this
Section or Section 16, except for any escrow cancellation fees of
the escrowee which will be split equally between the Buyer and
Seller, and any liabilities under sections 15(a) of this
Agreement (which will survive), Buyer (after execution of such
documents reasonably requested by Seller to evidence the
termination hereof) shall be returned 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.
7. Escrow. Escrow shall be opened by Seller and funds deposited
upon acceptance of this agreement. The Escrowee will be a
nationally recognized escrow company selected by Seller and
reasonably acceptable to Buyer. 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. The parties
agree to sign these additional instructions of the Escrowee, if
any. If there is any conflict between these other instructions
and this Agreement, this Agreement will control. Escrow will be
opened upon acceptance of this Agreement by Seller.
8. Title. Closing will be conditioned on the commitment of a
nationally recognized title company selected by Seller and
acceptable to Buyer 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; and other items of record not affecting marketability
disclosed to Buyer during the Review Period ("Permitted
Exceptions").
Buyer shall be allowed ten (10) days after receipt of said
commitment for examination and the making of any objections to
marketability of
Buyer Initial:
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
exceptions to title thereto, said objections to be made in
writing or deemed waived. If any objections are so made, the
Seller shall be allowed sixty (60) days to make such title
marketable or cure Buyer's objections, 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 the deed stamp taxes, if any,
and one-half of escrow fees attributable to the closing services
for this transaction, and any brokerage commissions payable to
The Forman Company only. Seller shall pay for the cost of
issuing the title commitment. Buyer will pay the cost of the
title insurance premium for an Owner's policy (if desired by
Buyer), all recording fees, one-half of the escrow fees, the
costs of a update to the Survey in Seller's possession (if an
update is required by Buyer). Each party will pay its own
attorneys' fees and costs to document and close this transaction.
10. Real Estate Taxes, Special Assessments and Prorations. Taxes
for the year of the Closing shall be prorated to the Date of
Closing. If the Closing shall occur before the tax rate is fixed
for the then current year, the appointment of taxes shall be upon
the basis of the tax rate for the preceding year applied to the
latest assessed valuation. Subsequent to the Closing, when the
tax rate is fixed for the year in which Closing occurs, Seller
and Buyer agree to adjust the proration of taxes and, if
necessary, to refund or pay (as the case may be) such sums as
shall be necessary to effect such adjustment. Seller agrees to
cooperate with Buyer in connection with any tax protest by Buyer,
but Seller shall not be required to expend any funds in
connection with such protest.
11. Seller's Representation and Agreements.
(a) Seller represents and warrants as of this date that:
(i) The Property is vacant.
(ii) It is not aware of any pending litigation or
condemnation proceedings against the Property or Seller's
interest in the Property.
(iii) It is not aware of any contracts affecting this
Property and potentially or actually binding on Buyer after
the closing date.
Buyer Initial: /s/ R.B. /s/ J.W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
12. Disclosures.
(a) Seller and Buyer acknowledge and agree that Seller
acquired the Property through a sale/leaseback with a former
tenant. Seller has been an absentee landlord. Consequently,
Seller has little, if any, knowledge of the physical
characteristics of the Property.
Accordingly, except as otherwise specifically stated in the
Agreement, Seller hereby specifically disclaims any
warranty, guaranty, or representation, oral or written,
past, present, or future of, as to, or concerning (i) the
nature and condition of the Property, including, without
limitation, the water, soil, and geology, and the
suitability thereof and of the Property for any and all
activities and uses which Buyer may elect to conduct
thereon; (ii) except for the warranty of title contained in
the Deed to be delivered by Seller at the closing, the
nature and extent of any right of way, lease, possession,
lien, encumbrance, license, reservation, condition, or
otherwise, and (iii) the compliance of the Property or its
operation with any laws, ordinances, or regulations of any
government or other body.
(b) This Agreement is subject to an inspection contingency
as set forth in Section 16. Buyer acknowledges and agrees
that Buyer is not relying upon any representation or
warranties made by Seller or Seller's Agent.
(c) Buyer acknowledges that, having been given the
opportunity to inspect the Property, Buyer is relying solely
on its own investigation of the Property and not on any
information provided by Seller or to be provided by Seller
except as set forth herein. Buyer further acknowledges that
the information provided and to be provided with respect to
the Property by Seller was obtained from a variety of
sources and Seller neither (a) has made independent
investigation or verification of such information, or (b)
makes any representation 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 the
Seller herein, except as otherwise specified herein, Seller
maker 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.
(d) BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN
ITS THEN PRESENT CONDITION, AS IS, WHERE IS, AND SELLER HAS
NO OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS
THEREON, OR TO PERFORM ANY OTHER ACT REGARDING THE PROPERTY.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ALSO
AGREES THAT SELL WILL HAVE NO LIABILITY OF ANY TYPE, DIRECT
OR INDIRECT, TO BUYER OR BUYER'S SUCCESSORS, ASSIGNS,
LENDERS OR AFFILIATES IN CONNECTION WITH ANY HAZARDOUS,
TOXIC, DANGEROUS, FLAMMABLE, EXPLOSIVE OR CHEMICAL
SUBSTANCES OF ANY TYPE
Buyer Initial: /s/ R.B. /s/ J. W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
(WHETHER OR NOT DEFINED AS SUCH UNDER ANY APPLICABLE LAWS)
ON OR IN CONNECTION WITH THE PROPERTY EITHER BEFORE OR AFTER
THE CLOSING DATE.
13. Closing.
(a) Before the closing date, Seller will deposit into escrow
an executed limited warranty deed subject to Permitted
Exceptions conveying insurable title of the Property to
Buyer, and a Quit Claim Bill of Sale to the items of
personalty listed on Exhibit A-1. At Closing, Seller shall
deliver to Buyer a standard Seller's Affidavit regarding
liens and judgments.
(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 (First, and if made, the
final Payments) heretofore paid by the Buyer. 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, performed
all of its other obligations and satisfied all conditions under
this Agreement, and unconditionally notifies Seller that it
stands ready to tender full performance, purchase the Property
and close escrow as per this Agreement. Provided, however, that
in no event shall Seller be liable for any punitive or
speculative damages arising out of any default by Seller
hereunder.
15. Buyer's Representations and Warranties.
a. Buyer represents and warrants to Seller as follows:
Buyer Initial: /s/ R.B. /s/ J.W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
(i) In addition to the acts and deeds recited herein and
contemplated to be performed, executed, and delivered by
Buyer, Buyer shall perform, execute and deliver or cause to
be performed, executed, and delivered at the Closing or
after the Closing, any and all further acts, deeds and
assurances as Seller or the Title Company may require and
Buyer deems to be reasonable in order to consummate the
transactions contemplated herein.
(ii) Buyer has all requisite power and authority to
consummate the transaction contemplated by this Agreement
and has by proper proceedings duly authorized the execution
and delivery of this Agreement and the consummation of the
transaction contemplated hereby.
(iii) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereby will violate or be in
conflict with (a) any applicable provisions of law, (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. Property Inspection and Environmental.
(a) Seller shall provide Buyer access to the Property from
time to time for the purpose of conducting inspections
thereof including mechanical, structural, electrical and
other physical inspections. Buyer has until forty-five (45)
days after the signing of the agreement by Seller to
complete such physical inspection (the "Inspection Period").
(b) Buyer shall indemnify, defend, and hold harmless Seller
from and against any and all losses, claims, causes of
action, liabilities, and costs to the extent caused by the
actions of Buyer, its agents, employees, contractors, or
invitees, during any such entry upon the Property. The
foregoing duty of indemnification shall include the duty to
pay all reasonable attorney's fees incurred by the Seller in
responding to or defending any such claims or proceedings.
(c) Buyer shall pay for any Phase I Environmental studies it
wants to be performed on the Property. If Buyer desires a
Phase I Environmental, Buyer shall obtain and review the
same within forty-five (45) days from the date this
agreement is signed by Seller. If the Phase I Environmental
report does not meet hazardous material standards as
required by the ruling state and Federal agencies, the Buyer
may terminate this Agreement within said forty-five (45) day
period and receive a full refund of the Earnest Money.
However, if Buyer terminates, Buyer prior to termination
will provide Seller with copies of all reports and test
results Buyer had performed on the Property.
17. Damages, Destruction and Eminent Domain.
(a) If, prior to closing, the Property or any part thereof
be destroyed or further damaged by fire, the elements, or
any cause, due to events
Buyer Initial: /s/ R.B. /s/ J.W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
occurring subsequent to the date of this Agreement to the
extent that the cost of repair exceeds $20,000, 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 period provided
for above in this Subparagraph 16a for Buyer to elect to
terminate this Agreement has expired or Buyer has, by
written notice to Seller, waived Buyer's right to terminate
this Agreement. If Buyer elects to proceed and to
consummate the purchase despite said damage or destruction,
there shall be no reduction in or abatement of the purchase
price, and Seller shall assign to Buyer the Seller's right,
title, and interest in and to all insurance proceeds
resulting from said damage or destruction to the extent that
the same are payable with respect to damage to the Property.
If the cost of repair is less than $20,000.00, 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 in relation to the
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 all the Seller's right, title,
and interest in and to any award made, or to be made, in the
condemnation proceeding in relation to the 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).
18. Seller's and Buyer's Brokers. Howard Forman of The Forman
Company is the broker representing the Seller (and the Seller
only) in this transaction. The Buyer is not represented by a
broker in this transaction.
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
Buyer Initial: /s/ R.B. /s/ J.W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
understandings. Exhibits attached to this Agreement are
incorporated into this Agreement.
(b) If this escrow has not closed by August 30, 1996,
through no fault of Seller, Seller may either, at its
election, extend the closing date, exercise any remedy
available to it by law, including but not limited to
terminating this Agreement.
(c) Funds to be deposited or paid by Buyer will be good and
clear funds in the form of cash, cashier's checks or wire
transfers.
(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 Real Estate Funds XVI & XVII Limited Partnerships
1300 Minnesota World Trade Center
30 E. 7th Street
St. Paul, MN 55101
If to Buyer:
BW, Incorporated
20 I-30
Rockwall, Texas 75087
When accepted, this offer will be a binding agreement for
valid and sufficient consideration which will bind and benefit
Buyer, Seller and their respective successors and assigns. Buyer
is submitting this offer by signing a copy of this offer and
delivering it to Seller along with the $25,000 First Payment,
which, if accepted, will be deposited in to escrow by Seller.
Seller has two (2) business days after receipt of the executed
offer and First Payment within which to accept this offer; if not
accepted by Seller, Seller shall immediately return the First
Payment to Buyer.
Buyer Inital: /s/ R.B. /s/ J.W.
Purchase Agreement for: 3808 Towne Crossing Blvd., Mesquite,
Texas
IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
BUYER:
BW, Incorporated, a Texas corporation
By: /s/ Rickey Byrum By: /s/ Joseph Willis
Rickey Byrum Joseph Willis
Its: President Its: Vice President/Secretary
SELLER:
AEI REAL ESTATE FUND XVI LIMITED PARTNERSHIP, a Minnesota limited
partnership.
By: AEI Fund Management XVI, Inc., its corporate general partner
By: /s/ Robert P. Johnson
Robert P. Johnson, President
AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP, a Minnesota
limited partnership.
By: AEI Fund Management XVII, Inc., its corporate general partner
By: /s/ Robert P. Johnson
Robert P. Johnson, President
EXHIBIT "A"
Legal Description
Lot 2-A, Block B, TOWNE CROSSING, an Addition to the City of
Mesquite, Dallas County, Texas, according to the Plat recorded in
Volume 85051, Page 5143, Map Records, Dallas County, Texas.
QUOTATION/PROPOSAL
EXHIBIT A-1
AFFORDABLE EQUIPMENT CO. NO. 224
P.O. BOX 710094 DATE 1-22-96
DALLAS, TX 75371-0094 INQUIRY NO.
PHONE (214) 320-1085
FAX (214) 320-2377
INVENTORY AND VALUE OF EQUIPMENT AT CLOSED
TO: ESTIMATED DELIVERY
J T MC CORD'S RESTAURANT TERMS
MESQUITE, TEXAS
SALESMAN FOB FOLLOW UP DATE
Robert Roznovsky
QUANTITY DESCRIPTION
17 Booth openings w/tables
5 Booths 3/4 circle w/tables
56 Chairs, wood
12 Tables, 30x60
2 Tables, 30x40
6 Children booster chairs, wood
9 Fans, cealing
28 Pictures, various sizes
1 Picture, large
7 Hitachi TVs
1 Bicycle
1 Hitachi TV, large
1 Menu display board, lighted
2 Booths, 1/2 circle
9 Tables, wood, bar height
26 Bar stools, wood
12 Bar stools, wood, black
7 Booster chairs, plastic
1 Ice cream freezer, 2-door
1 SS drain board w/sink
1 SS ice chest 2"
1 SS cocktail station w/dump & blender station
1 SS sink, 3-comp, 10'L.
1 Bev Air, 27", work top refig.
1 Perlick mug froster, 2'L.
1 SS work table, 3'L.
1 Taylor margarita freezer, counter model
1 Back bar cooler, custom made
1 SS ice chest
1 Beverage Air, 27", work top refrig.
1 Bev Air mug froster, 3'L.
1 SS counter top covers, 25'L.
1 Long draw draft beer system, 2 station, 3-beer
1 Bar mix dispensers, 2-station
AFFORDABLE EQUIPMENT CO. NO. 225
P.O. BOX 710094 DATE
DALLAS, TX 75371-0094 INQUIRY NO.
PAGE NO. 2
INVENTORY OF CLOSED RESTAURANT
TO: ESTIMATED DELIVERY
J T MC CORD'S TERMS
MESQUITE, TEXAS
SALESMAN FOB FOLLOW UP DATE
QUANTITY DESCRIPTION
1 Lot Beer pitchers
1 Lot Glasses
1 Heat lamp, 2-bulb
1 Cash register, computer
20 Computer boards, remote
1 Jukebox, vending
1 Dart Video game, vending
1 Wet mop sign
1 Ash tray can
5 Waitress stands
1 Cecilware, coffee brewer, 3-pot
1 Carafe, insulated
1 Silver holder
1 Cecialware, tea-brewer-w/3 pots
1 Post mix soda system, 5 valve, refrigerated
1 SS work top waitress station, 13'L.
1 Metro wire wall shelf, 12"x13'
1 SS work top ice storage bin, 5'
1 Bev Air, 2-glass door refrigerator
1 Lot SS pans
1 SS table, 3'
1 Bus cart
1 Lot Coffee cups
1 SS Dessert work station, 8'
1 Panisonic micro wave
2 SS wall shelves
Well warmer, 2-drawer
SS chef counter pick up station
SS hand sink
SS table, 3'
SS wall shelf, 8'
SS Soil dish table, dish washer
SS Clean dish table, " "
SS Wall shelf
SS table, 3'
AFFORDABLE EQUIPMENT CO. NO. 226
P.O. BOX 710094 DATE
DALLAS, TX 75371-0094 INQUIRY NO.
PAGE NO. 3
INVENTORY OF CLOSED RESTAURANT
TO: ESTIMATED DELIVERY
J T MC CORD'S TERMS
MESQUITE, TEXAS
SALESMAN FOB FOLLOW UP DATE
QUANTITY DESCRIPTION
1 Pan rack, 1/2 size
1 SS hand sink
2 Scotsman cubers, 2400 lbs. Cap., & 1000 lb.cap.
1 Metro shelves, 24x72x4 tier
1 Moble bun rack rack
1 U S Range gas griddle, 6' W/ 2-burners & stand
1 SS Vent-A-hood, 7', class 1, w/fire system
1 Pan rack, 1/2 size
1 SS Vent-A-hood, class-1, 8', W/fire system
3 Picto gas fryers, 50 lb cap.
2 Lang elect. Cheese melters, 3'ea.
1 McCall refrigerator w/4-1/2 doors
1 SS work table, 10' w/1-hot & 3-cold wells
1 Toastwell elect. griddle
1 SS hand sink
1 Wolf gas char broiler 3', w/stand
1 Traulsen refrigerated equipment stand, 78"
Wolf stove, 2-burner
US Range gas griddle, 3'
SS stand 20x30
McCall refrigerator w/4-1/2 doors
SS Vent-A-Hood, 7', class 1, w/fire system
SS micro wave wall shelf
Metal dry storage shelves, 10'x24"x4 tier
New age can rack
Shelves for beverage boxes & Co2 tanks
Sink, mop dump
Plastic trash receptacles
Trash bins
Fryer, gas, 35 lb. Cap.
Traulsen refrigerator, 2-door, roll-in, 6'
SS Work tables w/SS under shelf & 5" splash
SS Wall shelf, 5'
Pot rack, double, 5' wall mount
Groen, steam kettle, elect., 20 gal. W/stand
AFFORDABLE EQUIPMENT CO. NO. 227
P.O. BOX 710094 DATE
DALLAS, TX 75371-0094 INQUIRY NO.
PAGE NO. 4
INVENTORY OF CLOSED RESTAURANT
TO: ESTIMATED DELIVERY
J T MC CORD'S TERMS
MESQUITE, TEXAS
SALESMAN FOB FOLLOW UP DATE
QUANTITY DESCRIPTION
1 Wolf elect. Convection oven, full size w/stand
1 SS Vent-A-Hood, class 2, 7'
2 Metro shelves, 24x48x4 tier
1 Metro shelve, 24x72x4 tier
1 SS sink, 2-comp., 6'
2 SS Eduland, knife holders
1 Ss hand sink
1 Metro shelf, 24x48x4 tier
1 Metro shelf, 24x60x4 tier
1 Mars air screen, 4'
1 Fly trap, electric
9 Soda pumps
1 Dunnage rack, 5'
1 Walk-in cooler-freezer combo w/shelving
Cooler, 13'x11'x7.5'
Freezer,, 13'x10'x7.5'
1 Bun pan rack, full size
2 Plastic shelves, 18x48x5
2 File cabinets, 4 drawer each
3 Booth openings
6 Booth openings
3 Tables, 4x30
14 Chairs, wood
1 Table, wood, 5x30
1 Change machine, vending
2 Pen ball game machine
3 Video game machines, vending
25 Pictures
1 Gum vending machine, vending
1 Candy vending machine, counter model
1 Gum ball vending machine, large
TOTAL
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<CIK> 0000819577
<NAME> AEI REAL ESTATE FUND XVII LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,390,690
<SECURITIES> 0
<RECEIVABLES> 72,078
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,462,768
<PP&E> 14,494,531
<DEPRECIATION> (2,820,024)
<TOTAL-ASSETS> 18,137,275
<CURRENT-LIABILITIES> 586,676
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 17,550,599
<TOTAL-LIABILITY-AND-EQUITY> 18,137,275
<SALES> 0
<TOTAL-REVENUES> 923,400
<CGS> 0
<TOTAL-COSTS> 455,335
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 546,355
<INCOME-TAX> 0
<INCOME-CONTINUING> 546,355
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 546,355
<EPS-PRIMARY> 23.41
<EPS-DILUTED> 23.41
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