Document:

EXHIBIT 10.2
                                                     ------------
                        RELEASE AGREEMENT

     1.   The parties to this Release Agreement ("Release") are:
William P. Hobgood ("Hobgood") and United Air Lines, Inc.
("United").

     2.   Waiver and Release of All Claims.  In consideration for
the Letter Agreement dated February 24, 2000 between Hobgood and
United and all other good and valuable consideration, the receipt
and sufficiency of which are hereby expressly acknowledged,
hereby releases and forever discharges United and each and every
one of its past, present or future directors, officers,
successors, employees, subsidiaries, affiliates, sister and
parent companies, divisions and assigns of and from any and all
actions, causes of action, claims, suits, charges, damages and
costs, in relation to all claims which exist as of the date of
execution of this Release or which could have been alleged up to
the date of this Release.  Hobgood further agrees not to commence
or cause to be commenced on his behalf any administrative charge
or claims, administrative review or legal action of any kind
against United asserting any claim or charge arising from or in
any way relating to his employment with United up to the date of
this Release, including, but not limited to: claims which could
have arisen under Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991; the Americans With
Disabilities Act; the Illinois Human Rights Act, and/or any other
state, federal or municipal employment discrimination statutes
(including claims based on sex, sexual harassment, age, race,
national origin, religion, ancestry, harassment, marital status,
handicap, disability, retaliation and/or attainment of benefit
plan rights); and/or any other claim whatsoever including, but
not limited to, claims relating to implied or express employment
contracts, stock option agreements, public policy or tort claims,
intentional infliction of emotional distress claims, personal
injury claims, defamation claims, privacy claims, wrongful
discharge claims, common law claims, claims relating to legal
restriction on United's right to terminate employees or pursuant
to any other claim whatsoever, arising out of or relating to his
employment with United and/or any other occurrence to the date of
this Agreement, but excluding claims which Hobgood cannot by law
waive and claims for breach of the Letter Agreement dated
February 24, 2000.

     3.   Consideration.  The parties agree that the amounts to
be paid under the Letter
Agreement dated February 24, 2000 and other considerations are in
excess of any sum to which Hobgood might otherwise be entitled,
and that the same constitute an extra payment and benefit in
exchange for the signing of this Release.  Hobgood further agrees
that consideration exceeds any compensation, severance pay and/or
other benefits which Hobgood could claim were owed to him by
United or by United sponsored benefit plans, programs or
policies.

     4.   HOBGOOD UNDERSTANDS THAT THIS RELEASE INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

     5.   Entire Agreement.  This Release and the Letter
Agreement dated February 24, 2000 constitute the entire agreement
between United and Hobgood.  No other promises or agreement shall
be binding unless in writing and signed by both parties.  Hobgood
and United further agree that this Release may be executed in
counterparts and each executed counterpart shall be as effective
as a signed original.  Photographic or faxed copies of such
signed counterparts may be used in lieu of the originals for any
purpose.

     6.   Separability.  If any portion of this Release is found
to be unenforceable, the remainder of the Release shall remain in
full force and effect.

     7.   Time to Review, Attorney Consultation, and Full
Knowledge Consent and Voluntary Signing of Agreement.  Hobgood
acknowledges and agrees that United has advised and encouraged
him to consult with an attorney regarding this Release.  Hobgood
further acknowledges and agrees that: (a) he has carefully read
this Release and fully understands its meaning, intent and terms;
(b) he has full knowledge of its legal consequences; (c) he
agrees to all the terms of the Release and is voluntarily signing
below; (d) other than as stated herein, Hobgood attests that no
promise or inducement has been offered for this Release; and (e)
he is legally competent to execute this Release and accepts full
responsibility therefore.

     8.   Construction.  The Release shall be governed by the
laws of the State of Illinois.  If any of its provisions are held
to be invalid or unenforceable by a court of competent
jurisdiction, such holding shall not invalidate any of the other
provisions of the Release, it is being intended that the
provisions of the Release are severable.

     WHEREFORE, Hobgood agrees that he has read and voluntarily
entered into this Release with full knowledge of it significance.

WILLIAM P. HOBGOOD                 UNITED AIR LINES, INC.:

/s/ William P. Hobgood             By: James E. Goodwin
----------------------             -------------------------
                                   Title:
Date:3/10/00                           Chairman and Chief Executive Officer
     ---------------               ----------------------------------------
                                   Date:
                                        3/10/00
                                   ----------------------------OCCUPANCY AGREEMENT

      3808 Towne Crossing Boulevard, Mesquite, TX ("Leased Premises")
          AEI Real Estate Fund XVI Limited Partnership
          AEI Real Estate Fund XVII Limited Partnership

           THIS AGREEMENT, effective as of February 17, 2000,  by
     and between AEI Real Estate Fund XVI Limited Partnership and
     AEI Real Estate Fund XVII Limited Partnership ("Lessor") and
     Nick Mehmeti and Duncan Burch ("Buyers").

           Whereas Buyers and Lessor have entered into a Purchase
     Agreement  for  the  Leased Premises,  subject  to  a  Lease
     (attached  hereto dated effective as of  March 15,  1997  by
     and  between Texas Sports City Cafe', LTD. and Lessor, which
     Lease is currently in default; and

           Whereas,  Buyers  wish to use and  occupy  the  Leased
     Premises  during  their  due  diligence  period  under   the
     Purchase  Agreement and have in fact been so  occupying  the
     Leased Premises since February 17, 2000;

           Now,  therefore, the parties hereto wish  to  evidence
     their  respective understanding and expectation arising  out
     of Buyers use and occupancy of the Leased Premises.

     1.    Buyer will immediately obtain insurance on the  Leased
     Premises in the amounts and under the terms specified by the
     Lease  as  if  Buyers were the Lessee thereunder,  and  will
     provide Lessor with a binder to prove it.  Insurance must be
     maintained while the Buyer is occupying the Leased Premises.

     2.    Buyer will pay $6,000 per month due and payable on the
     15th  of every month for each month or portion thereof Buyer
     is in occupancy of the Leased Premises. The rent will be pro-
     rated for February from Thursday, February 17, 2000. Rent is
     due in advance on the fifteenth of each month.

     3.    Taxes will be paid by Buyer while occupying our  site.
     Taxes  will  be pro-rated beginning Thursday,  February  17,
     2000 to the date of sale or termination of Buyer's occupancy
     of  the Leased Premises, whichever is earlier. The pro-rated
     taxes   will  be  due  and  payable  at  closing,  or   upon
     termination of the Buyer's occupancy of the Leased Premises.

     Buyer  is  responsible for all utilities and maintenance  of
     the  Leased Premises under the same terms and conditions  as
     set  forth  in  the Lease from Thursday, February  17,  2000
     until  the  date  Buyer  purchases the  Leased  Premises  or
     vacates the Leased Premises.

     Buyer  acknowledges and agrees that Buyer's  rights  to  use
     and  occupancy  of the Leased Premises are  subject  to  the
     Lease,  and  the  assertion of Lessee's  rights  thereunder,
     over  which  Lessor has no control.  While the Lease  is  in
     default,  and Buyer is in compliance with the terms  hereof,
     Lessor  shall  make no efforts to terminate  the  Lease  nor
     terminate  Buyer's right to occupancy, subject to the  terms
     hereof.   However,  termination of  the  Purchase  Agreement
     shall  operate to terminate this Occupancy Agreement, and  a
     default  under  this Occupancy Agreement by Buyer  shall  be
     grounds for termination of the Purchase Agreement.

     Nothing  herein shall grant Buyers any rights to the  Leased
     Premises  except as set forth herein,  or in the Lease,  nor
     shall  Lessor  be obligated to Buyers or be deemed  to  have
     made  any  representations to Buyers respecting  the  Leased
     Premises,  except  as set forth herein or  in  the  Purchase
     Agreement.

Executed As of March 29, 2000       Executed As of March 29, 2000

/s/ Nick Mehmeti                         /s/ Duncan Burch
    Nick Mehmeti                             Duncan Burch

Executed As of April 5, 2000

AEI Real Estate Fund XVI Limited Partnership

By:  AEI Fund Management XVI, Inc.

     By:/s/ Robert P Johnson
            Robert P. Johnson, President

Executed As of April 5, 2000

AEI Real Estate Fund XVII Limited Partnership

By:  AEI Fund Management XVII, Inc.

     By:/s/ Robert P Johnson
            Robert P. Johnson, President

Occupancy Agreement, Mesquite, Tx.PURCHASE AGREEMENT

     THIS AGREEMENT, entered into effective as of this 5th day of
April, 2000.

     1.   PARTIES.  The buyer is Nick Mehmeti and Duncan Burch or
related  assigns, (such assignment to be effective only if  buyer
shall remain liable for the full performance of Buyer hereunder),
("Buyer"),  and  the seller is AEI Real Estate Fund  XVI  Limited
Partnership  and  AEI  Real Estate Fund XVII Limited  Partnership
("Seller").

      2.    PROPERTY.  The Property consists of the real property
legally described on Exhibit A attached hereto, all buildings and
improvements,  and  fixtures on the  land,  (including,  but  not
limited  to,  that  certain  building and  related  improvements)
appurtenances, mineral and similar rights (to the extent owned by
Seller), and personal property, if any, presently owned by Seller
and   used  by  Seller  in  connection  with  the  land  or   the
improvements,  all  of Seller's interest in all  leases,  prepaid
rents,  security  deposits and other contract rights,  guaranties
and  warranties or other rights related to the use and  operation
of  the  Property  and all assignable governmental  licenses  and
permits.

     3.   PURCHASE PRICE.  The purchase price for the Property is
$900,100, all cash.

      4.    TERMS.  The purchase price for the Property  will  be
paid by Buyer as follows:

                          When  this agreement is executed, Buyer
               will  pay $50,100 to Seller by depositing the same
               into  escrow  with  the  escrowee  set  forth   in
               paragraph  7  hereof (the "First  Payment").   The
               First Payment will be forwarded to the Seller  per
               paragraph  7  hereof,  and  credited  against  the
               purchase price when and if escrow closes  and  the
               sale  is  completed.  One Hundred Dollars of  such
               First   Payment   shall   be   considered   Option
               Consideration  and be  immediately  non-refundable
               even  if  this  Agreement is  terminated  for  any
               reason.

                     (b)   Buyer will deposit the balance of  the
               purchase  price,  $850,000, (the "Final  Payment")
               into escrow in sufficient time to allow escrow  to
               close on the closing date.

      5.   CLOSING DATE.  Escrow is scheduled to close (i.e., the
deed  will  be  recorded and the purchase  price  transferred  to
Seller) the later of  May 15, 2000, or ninety days after the date
the  last  party to sign this agreement has signed, such  earlier
time as the parties may mutually agree.  Time is of the essence.

     6.   DUE DILIGENCE.  Buyer will have until the latter of (i)
sixty  (60)  days after the full execution of this  Agreement  by
both  parties hereto, or (ii) sixty (60) days after  delivery  of
each  of  the  following  items (the "Due Diligence  Period")  to
conduct  all  of  its inspections and due diligence  and  satisfy
itself regarding each item, the Property and this transaction.

          a.    The  original  and one copy of a title  insurance
          commitment  for an TLTA owner's title insurance  policy
          (see paragraph 8 below)

          b.   Copies of such "as built" plans and specifications
          for  the  Property as Seller can locate after  diligent
          search.

          c.    Copies  of  an "as built" survey of the  Property
          done  concurrent  with  Seller's  acquisition  of   the
          Property.

          d.    Copies  of  any and all existing soil  tests  and
          environmental  tests previously done by or  for  Seller
          relating to the Property.

      Seller shall provide Buyer access to the Property from time
to  time,  after Seller shall have coordinated the same with  the
present  occupant of the Property, for the purpose of  conducting
inspections thereof including mechanical, structural,  electrical
and  other physical inspections.  Buyer has until the end of  the
Due Diligence Period to complete such physical inspection.

      Buyer  shall indemnify Seller from and against any and  all
losses, claims, causes of action, liabilities, and costs  to  the
extent  caused  by  the actions of Buyer, its agents,  employees,
contractors,  or  invitees,  during  any  such  entry  upon   the
Property.   The  foregoing duty of indemnification shall  include
the  duty to pay all reasonable attorney's fees incurred  by  the
Seller  in  responding  to  or  defending  any  such  claims   or
proceedings.

      Buyer may cancel this agreement for ANY REASON in its  sole
discretion by delivering a cancellation notice by certified mail,
return  receipt  requested, or by overnight delivery  service  to
Seller  and  escrow  holder  before the  expiration  of  the  Due
Diligence  Period.   Such notice shall be deemed  effective  only
upon receipt by Seller.

      If  Buyer  cancels this Agreement as permitted  under  this
Section,  except  for  any  escrow  cancellation  fees  and   any
liabilities  under Sections 15(a) of this Agreement  (which  will
survive),  Buyer  (after execution of such  documents  reasonably
requested by Seller to evidence the termination hereof) shall  be
returned  the  First Payment only if the reason  for  termination
shall  be  the  existence  of  a  non-curable  objection  to  the
marketability of title or the presence of Hazardous Substances on
the  Property  as  revealed  by a Phase  I  Environmental  report
prepared   by   a  third  party  environmental  engineer.    Upon
termination  of  this  Agreement  by  Buyer,  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.  Otherwise  Buyer
may terminate this Agreement during the Due Diligence Period, but
its First Payment in its entirety shall be non-refundable.

      Upon  the  expiration of the Due Diligence  Period,   Buyer
shall have been deemed to have waived its right to terminate this
Agreement  based  upon  the  items  received  by  Buyer  and  its
inspection  of  the  property during the  Due  Diligence  Period.
Buyer  shall have ten (10) business days, from written notice  to
Buyer,  to review any adverse material changes in any of the  due
diligence  items received prior to the Closing Date to  terminate
this  Agreement. Except for the foregoing, if this  Agreement  is
not canceled and the Second Payment is made when required, all of
Buyer's conditions and contingencies will be deemed satisfied.

      7.    ESCROW.   The escrow holder will be an  agent  for  a
nationally-recognized title insurance company  of  Chicago  Title
Insurance  Company  ("the Escrowee"), with  offices  in  or  near
Mesquite,  Texas.  A copy of this Agreement will be delivered  to
the  escrow holder and will serve as escrow instructions together
with the escrow holder's standard instructions and any additional
instructions required by the escrow holder to clarify its  rights
and  duties  (and  the  parties agree to  sign  these  additional
instructions).   If  there is any conflict  between  these  other
instructions  and  this Agreement, this Agreement  will  control.
Escrow will be deemed opened only upon Seller's execution of this
Agreement.

     8.   TITLE.  Closing will be conditioned on the agreement of
the  Escrowee to issue an TLTA 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; other items of record; other items disclosed to Buyer
during the Due Diligence Review Period.

      Buyer shall be allowed ten (10) business days after receipt
of  said  commitment for examination and for the  making  of  any
objections  thereto, said objections to be  made  in  writing  or
deemed  waived.  If any objections are so made, the Seller  shall
be  allowed  fifty (50) days to remove or cure such objection  to
Buyer's  satisfaction and make such title marketable.  If  Seller
shall  decide to make no efforts to make title marketable, or  is
unable  to  make title marketable, (after execution by  Buyer  of
such  documents  reasonably requested by Seller to  evidence  the
termination  hereof) Buyer's First Payment shall be returned  and
this Agreement shall be null and void and of no further force and
effect.

     Pending correction of title, the payments hereunder required
shall  be postponed, but upon correction of title and within  ten
(10)  days  after written notice of correction to the Buyer,  the
parties  shall  perform this agreement according  to  its  terms.
Seller shall pay for the cost of issuing the title commitment and
shall  pay  the  owner's title insurance premium for  an  Owner's
policy.

     9.   CLOSING COSTS.  Subject to paragraph 4(c) above, Seller
will  pay the deed stamp taxes and one-half of escrow fees, title
insurance  premium  and  any brokerage  commissions  payable  and
commissioned by Seller.  Buyer will pay all recording fees,  one-
half  of the escrow fees, the costs of a survey or survey  update
(if  required by Buyer).  Each party will pay its own  attorneys'
fees and costs to document and close of this transaction.

     10.  REAL ESTATE TAXES, SPECIAL ASSESSMENTS AND PRORATIONS.

                     (a)   The  property shall be subject  to  an
               occupancy  agreement  between  Buyer  and  Seller,
               which   occupancy  agreement  shall  address   the
               payment  of  taxes  and  installments  of  special
               assessments  due  and payable  during  the  period
               prior  to  the  date of closing.  Buyer  shall  be
               responsible  for a prorata share  of  real  estate
               taxes  from February 17,  2000, regardless of  the
               date  of closing, and Seller shall be  responsible
               for  real  estate  taxes prior thereto,  reserving
               unto   Seller  the  right  to  pursue  the  former
               occupant  for the same. However, Seller represents
               that  all  real  estate taxes and installments  of
               special  assessments due and payable in all  years
               prior  to  the year of Closing have been  paid  in
               full,  or  shall be as of closing.  Unpaid  levied
               and  pending special assessments existing  on  the
               date  of Closing shall be pro-rated between  Buyer
               and Seller as of the date of Closing.  Buyer shall
               pay  all  taxes due and payable in the year  after
               Closing  and  any unpaid installments  of  special
               assessments payable therewith and thereafter.

                     (b)   The  property shall be subject  to  an
               occupancy  agreement  between  Buyer  and  Seller,
               which   occupancy  agreement  shall  address   the
               payment of rent and responsibility for expenses of
               maintenance  during the period prior  to  closing.
               Subject to such agreement and terms therein to the
               contrary,   all income and all operating  expenses
               from  the  Property shall be prorated between  the
               parties  and  adjusted by them as of the  date  of
               Closing.   Seller shall be entitled to all  income
               earned  and shall be responsible for all  expenses
               not   allocated  to  Buyer  under  the   Occupancy
               Agreement  incurred prior to the date of  Closing,
               and  Buyer shall be entitled to all income  earned
               and   shall   be  responsible  for  all  operating
               expenses of the Property incurred on and after the
               date  of  closing, except as otherwise  set  forth
               herein  or  in  the Occupancy Agreement.   To  the
               extent  any of said items cannot be determined  at
               Closing after reasonable efforts, Seller and Buyer
               shall  compute such prorations as soon as possible
               after Closing and settle such adjustment as of the
               Closing date.

     11.  SELLER'S COVENANTS, REPRESENTATIONS AND AGREEMENTS.

           (a)   Seller represents and warrants as of  this  date
that:

                               (i)   Except  for  the  Net  Lease
                    Agreement  with  Sports  City  Cafe  and  its
                    sublessees or concessionaires, there  are  no
                    other leases of the property.

                              (ii) It is not aware of any pending
                    litigation,    condemnation,   or    rezoning
                    proceedings against the Property or  Seller's
                    interest in the Property.

                                     It   is  not  aware  of  any
                    contracts  it  has  executed  that  would  be
                    binding on Buyer after the closing date.

                                   Seller is validly existing and
                    duly  qualified to transact business  in  the
                    State of Texas.

                                     To   the  best  of  Seller's
                    knowledge the Property is not subject to  any
                    claim,  demand, suit, unfiled lien  or  other
                    proceeding of any kind which affects  or  may
                    affect the Property.

                                      There    are   no   leasing
                    commissions, fees or other compensation  owed
                    in   connection  with  the  leasing  of   the
                    Property.

                                    Seller agrees that as long as
                    Buyer  abides  by the terms of the  Occupancy
                    Agreement, Seller will not enter into any new
                    contracts  or  amend  or modify  any  current
                    leases   (except  to  the  extent  that   the
                    existing Lease may be considered modified  by
                    the    Occupancy   Agreement)   that    would
                    materially affect the Property and be binding
                    on  Buyer  after  the  closing  date  without
                    Buyer's  prior  consent, which  will  not  be
                    unreasonably withheld.

                                     Seller  is  not  a  "foreign
                    person"  which  would subject  Buyer  to  the
                    withholding tax provisions of Section 1445 of
                    the Internal Revenue Code.

                                    To  Seller's best  knowledge,
                    the  Property  and  all  business  operations
                    thereon are in compliance with all applicable
                    federal,  state and local statutes, laws  and
                    regulations.

                                    Seller  is not aware of,  and
                    has  received  no  notice of,  the  presence,
                    disposal,  leakage  or migration  on  to  the
                    Property  of  any hazardous  waste  or  toxic
                    substances regulated by any federal, state or
                    local  governmental authorities which may  be
                    in  violation of any applicable law, rule  or
                    regulation.

                                    In  addition to the acts  and
                    deeds  recited herein and contemplated to  be
                    performed, executed, and delivered by Seller,
                    Seller shall perform, execute, and deliver or
                    cause   to   be   performed,  executed,   and
                    delivered   at  the  Closing  or  after   the
                    Closing, any and all further acts, deeds, and
                    assurances, as Buyer or the Title Company may
                    require and Seller deems to be reasonable  in
                    order    to   consummate   the   transactions
                    contemplated herein.

                                   Seller has all requisite power
                    and  authority to consummate the  transaction
                    contemplated  by this Agreement  and  has  by
                    proper   proceedings  duly   authorized   the
                    execution and delivery of this Agreement  and
                    the    consummation   of   the    transaction
                    contemplated hereby.

                                   To Seller'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 Seller is a party or by which Seller is
                    bound.

               (b)  All covenants, representations and warranties
               of Seller contained herein are true and correct as
               of  the  date hereof and shall be true and correct
               as of the date of Closing.

      12.   DISCLAIMER.  Seller and Buyer acknowledge  and  agree
that Seller acquired the Property through a sale\leaseback with a
prior   tenant.    Seller   has  been   an   absentee   landlord.
Consequently,  Seller  has  little,  if  any,  knowledge  of  the
physical characteristics of the Property.

     Accordingly, except as otherwise specifically stated in this
Agreement,  Seller  hereby specifically disclaims  any  warranty,
guaranty,  or representation, oral or written, past, present,  or
future  of, as to, or concerning (i) the nature and condition  of
the Property, including, without limitation, the water, soil, and
geology, and the suitability thereof and of the Property for  any
and  all  activities and uses which Buyer may  elect  to  conduct
thereon; (ii) except for the warranty contained in the Deed to be
delivered by Seller at the Closing, the nature and extent of  any
right  of  way,  Lease,  possession, lien, encumbrance,  license,
reservation, condition, or otherwise, and (iii) the compliance of
the  Property  or  its  operation with any laws,  ordinances,  or
regulations of any government or other body.

     Buyer acknowledges that having been given the opportunity to
inspect  the  Property,  Buyer  is  relying  solely  on  its  own
investigation  of  the  Property  and  not  on  any   information
provided or to be provided by Seller except as set forth  herein.
Buyer  further acknowledges that the information provided and  to
be  provided with respect to the Property by Seller was  obtained
from  a  variety  of  sources and Seller  neither  (a)  has  made
independent investigation or verification of such information, or
(b)  makes any representations as to the accuracy or completeness
of  such  information.  The sale of the Property as provided  for
herein  is  made  on  an  "AS  IS"  basis,  and  Buyer  expressly
acknowledges that, in consideration of the   agreements of Seller
herein,  except  as otherwise specified herein, Seller  makes  no
Warranty  or  representation, Express or Implied, or  arising  by
operation of law, including, but not limited to, any warranty  or
condition,    habitability,   tenantability,   suitability    for
commercial purposes, merchantability, or fitness for a particular
purpose, in respect of the Property.

     BUYER AGREES THAT IT SHALL BE PURCHASING THE PROPERTY IN ITS
THEN  PRESENT  CONDITION, AS IS, WHERE  IS,  AND  SELLER  HAS  NO
OBLIGATION TO CONSTRUCT OR REPAIR ANY IMPROVEMENTS THEREON, OR TO
PERFORM ANY OTHER ACT REGARDING THE PROPERTY, EXCEPT AS EXPRESSLY
PROVIDED HEREIN.

     13.  CLOSING.

                          Before  the  closing date, Seller  will
               deposit  into escrow: an executed special warranty
               deed conveying fee simple, insurable title of  the
               Property to Buyer; and

                              the original Sports City Cafe Lease
                    and all amendments thereto;

                              Lien waiver affidavit

                              Form 10995

                              FIRPTA Certificate

                               Delivery  of  original  warranties
                    pertaining   to  the  improvements   if   any
                    warranties   be   in   Seller's   possession,
                    permits/licenses, keys, if any,  in  Seller's
                    possession.

                                Certified   copy  of  Partnership
                    Agreement for the Seller

                     (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 to close escrow.   Both
               parties will sign and deliver to the escrow holder
               any  other  documents reasonably required  by  the
               escrow holder to close escrow.

                     (c)  On the closing date, if escrow is in  a
               position to close, the escrow holder will:  record
               the  deed  in the official records of  the  county
               where  the  Property is located; cause  the  title
               company  to  commit  to issue  the  title  policy;
               immediately deliver to Seller the portion  of  the
               purchase  price deposited into escrow by cashier's
               check   or   wire   transfer  (less   debits   and
               prorations, if any); deliver to Seller and Buyer a
               signed   counterpart   of  the   escrow   holder's
               certified  closing statement; and take  all  other
               actions necessary to close escrow.

      14.   DEFAULT.   If  Buyer defaults and  Seller  has  fully
performed  all obligations of Seller hereunder and satisfied  all
conditions  to  Closing  to be performed by  Seller,  Buyer  will
forfeit all rights and claims and Seller will be relieved of  all
obligations  and  will  be entitled as  its  sole  and  exclusive
remedy,  to  retain all monies heretofore paid by  the  Buyer  as
liquidated  damages,  actual  damages  being  difficult  if   not
impossible to calculate and the parties having made a good  faith
effort to determine the same.

      If Seller shall default, Buyer irrevocably waives any right
to file a lis pendens, a specific performance action or any other
claim,  action or proceeding of any type in connection  with  the
Property or this or any other transaction involving the Property,
and  will  not  do  anything to affect title to the  Property  or
hinder,  delay  or  prevent  any  other  sale,  lease  or   other
transaction involving the Property (any and all of which will  be
null  and  void),  unless:   it has paid  the  First  and  Second
Payment,   performed all of its other obligations  and  satisfied
all  conditions  under this Agreement within  the  required  time
periods, and unconditionally notified Seller that it stands ready
to  tender  full  performance, purchase the  Property  and  close
escrow  as per this Agreement, regardless of any alleged  default
or  misconduct by Seller.  Provided, however, that  in  no  event
shall  Seller  be  liable  for  any  punitive,  consequential  or
speculative  damages  arising  out  of  any  default  by   Seller
hereunder.

     15.  BUYER'S REPRESENTATIONS AND WARRANTIES.

     a.   Buyer represents and warrants to Seller as follows:

          (i)   In  addition to the acts and deeds recited herein
          and   contemplated  to  be  performed,  executed,   and
          delivered  by Buyer, Buyer shall perform, execute,  and
          deliver  or  cause  to  be  performed,  executed,   and
          delivered at the Closing or after the Closing, any  and
          all  further acts, deeds, and assurances as  Seller  or
          the  Title  Company may require and Buyer deems  to  be
          reasonable  in  order  to consummate  the  transactions
          contemplated herein.

          (ii)  Buyer  has all requisite power and  authority  to
          consummate   the  transaction  contemplated   by   this
          Agreement and has by proper proceedings duly authorized
          the  execution and delivery of this Agreement  and  the
          consummation of the transaction contemplated hereby.

          (iii)      To  Buyer's knowledge, neither the execution
          and delivery of this Agreement nor the consummation  of
          the transaction contemplated hereby will violate or  be
          in  conflict with (a) any applicable provisions of law,
          (ii)  any  order  of  any  court  or  other  agency  of
          government  having jurisdiction hereof,  or  (iii)  any
          agreement or instrument to which Buyer is a party or by
          which Buyer is bound.

     16.  DAMAGE, DESTRUCTION AND EMINENT DOMAIN.

                a.    If, prior to closing, the Property  or  any
          part  thereof be destroyed or further damaged by  fire,
          the  elements,  or  any cause, due to events  occurring
          subsequent   to  the  date  of  this  Agreement,   this
          Agreement shall become null and void, at Buyer's option
          exercised,  if  at  all, by written  notice  to  Seller
          within  ten (10) days after Buyer has received  written
          notice  from  Seller  of  said destruction  or  damage.
          Seller,  however,  shall have the right  to  adjust  or
          settle any insured loss until (i) all contingencies set
          forth  in  Paragraph 6 hereof have been  satisfied,  or
          waived; and (ii) any ten-day period provided for  above
          in   this  Subparagraph  16a  for  Buyer  to  elect  to
          terminate this Agreement has expired or Buyer  has,  by
          written  notice  to  Seller, waived  Buyer's  right  to
          terminate  this Agreement.  If Buyer elects to  proceed
          and  to consummate the purchase despite said damage  or
          destruction,  there  shall  be  no  reduction   in   or
          abatement  of  the  purchase price,  and  Seller  shall
          assign to Buyer the Seller's right, title, and interest
          in  and  to all insurance proceeds resulting from  said
          damage  or destruction to the extent that the same  are
          payable with respect to damage to the Property, and are
          so payable to Seller under the Sports City Cafe Lease.

                b.    If, prior to closing, the Property, or  any
          part   thereof,  is  taken  by  eminent  domain,   this
          Agreement  shall  become  null  and  void,  at  Buyer's
          option.   If  Buyer elects to proceed and to consummate
          the  purchase despite said taking, there  shall  be  no
          reduction in, or abatement of, the purchase price,  and
          Seller  shall  assign to Buyer all the Seller's  right,
          title  and interest in and to any award made, or to  be
          made, in the condemnation proceeding.

      In the event that this Agreement is terminated by Buyer  as
provided  above  in  Subparagraph 16a or 16b, the  First  Payment
shall  be immediately returned to Buyer (after execution by Buyer
of  such documents reasonably requested by Seller to evidence the
termination hereof).

     17.  MISCELLANEOUS.

                     (a)  This Agreement may be amended only by a
               written agreement signed by both Seller and Buyer,
               and  all waivers must be in writing and signed  by
               the waiving party.

                          Time is of the essence.  This Agreement
               will  not  be  construed for or  against  a  party
               whether  or  not  that  party  has  drafted   this
               agreement.   If there is any action or  proceeding
               between the parties relating to this Agreement the
               prevailing  party  will  be  entitled  to  recover
               attorney's  fees and costs.  This is an integrated
               agreement containing all agreements of the parties
               about   the   Property  and  the   other   matters
               described,  and it supersedes any other agreements
               or  understandings.   Exhibits  attached  to  this
               Agreement are incorporated into this Agreement.

                     (b)  If this escrow has not closed by thirty
               (30)  days  after  the end of  the  Due  Diligence
               Period,  through  no fault of Seller,  Seller  may
               either, at its election, extend the closing  date,
               exercise  any remedy available to it  by  law,  or
               terminate this Agreement .

                     (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.

                          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.

                         Further Conditions to Closing:

                                    Seller has complied with  and
                    otherwise performed each of the covenants and
                    obligations of Seller set forth herein;

                                   No adverse change to the title
                    or  to  the  environmental condition  of  the
                    Property   occurs  after  the  Due  Diligence
                    Period.

                           All  representations,  warranties  and
               covenants  contained herein shall, as  applicable,
               survive the Closing and delivery of the deed for a
               period of one (1) year.

                          This Agreement shall be governed by end
               construed in accordance with the laws of the State
               of  Texas.

                           This  Agreement  may  be  executed  in
               multiple counterparts, each of which shall  be  an
               original  copy and together which shall constitute
               one instrument.

                         Notices:
               If to Seller:

                  Attention: Robert P. Johnson
                             AEI Fund Management XVI, Inc.
                             1300 Minnesota World Trade Center
                             Saint Paul, Minnesota  55101
                             Facsimile: (651) 227-7705

               If to Buyer:

                 Attention:

       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,  and tendering  the    $50,100  First
Payment  to  the  Escrowee.  Seller has five  (5)  business  days
within which to accept this offer.

      IN WITNESS WHEREOF, the Seller and Buyer have executed this
Agreement effective as of the day and year first above written.

BUYER:

               /s/ Nick Mehmeti
                   Nick Mehmeti

                /s/ Duncan Burch
                    Duncan Burch

Accepted and agreed this 5th day of April, 2000.

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

Purchase Agreement, Mesquite, Texas Property, 3808 Towne Crossing
Boulevard

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