PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Timber Lodge Steakhouse - Rochester, MN)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of 3rd day of July, 2000, by and between
Xxxxxx X. Park and Xxxxx Xxx Xxxx, married as joint tenants
(hereinafter called "Park"), and AEI Real Estate Fund XVII
Limited Partnership (hereinafter called "Fund XVII"). Park, Fund
XVII (and any other Owner in Fee where the context so indicates)
being hereinafter sometimes collectively called "Co-Tenants" and
referred to in the neuter gender).
WITNESSETH:
WHEREAS, Fund XVII presently owns an undivided 89.9175% interest
in and to, and Park owns an undivided 10.0825% interest in and to
the land situated in the City of Rochester, County of Olmsted,
and State of MN, (legally described upon Exhibit A attached
hereto and hereby made a part hereof) and in and to the
improvements located thereon (hereinafter called "Premises");
WHEREAS, The parties hereto wish to provide for the orderly
operation and management of the Premises and Park's interest by
Fund XVII; the continued leasing of space within the Premises;
for the distribution of income from and the pro-rata sharing in
expenses of the Premises.
NOW THEREFORE, in consideration of the purchase by Park of an
undivided interest in and to the Premises, for at least One
Dollar ($1.00) and other good and valuable consideration by the
parties hereto to one another in hand paid, the receipt and
sufficiency of which are hereby acknowledged, and of the mutual
covenants and agreements herein contained, it is hereby agreed by
and between the parties hereto, as follows:
1. The operation and management of the Premises shall be
delegated to Fund XVII, or its designated agent, successors or
assigns. Provided, however, if Fund XVII shall sell all of its
interest in the Premises, the duties and obligations of Fund XVII
respecting management of the Premises as set forth herein,
including but not limited to paragraphs 2, 3, and 4 hereof, shall
be exercised by the holder or holders of a majority undivided co-
tenancy interest in the Premises. Except as hereinafter expressly
provided to the contrary, each of the parties hereto agrees to be
bound by the decisions of Fund XVII with respect to all
administrative, operational and management matters of the
property comprising the Premises, including but not limited to
the management of the net lease agreement for the Premises. Park
hereto hereby designates Fund XVII as its sole and exclusive
agent to deal with, and Fund XVII retains the sole right to deal
with, any property agent or tenant and to negotiate and enter
into, on terms and provisions satisfactory to Fund XVII, monitor,
execute and enforce the terms of leases of space within the
Premises, including but not limited to any amendments, consents
to assignment, sublet, releases or modifications to leases or
guarantees of lease or easements affecting the Premises, on
behalf of Park. As long as Fund XVII owns an interest in the
Premises, only Fund XVII may obligate Park with respect to any
expense for the Premises.
Co-Tenant Initial: /s/ TAP /s/ JLP
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
As further set forth in paragraph 2 hereof, Fund XVII agrees to
require any lessee of the Premises to name Park as an insured or
additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XVII shall use
its best efforts to obtain endorsements adding Co-Tenants to said
policies from lessee within 30 days of commencement of this
agreement. In any event, Fund XVII shall distribute any insurance
proceeds it may receive, to the extent consistent with any lease
on the Premises, to the Co-Tenants in proportion to their
respective ownership of the Premises.
2. Income and expenses shall be allocated among the Co-Tenants
in proportion to their respective share(s) of ownership. Shares
of net income shall be pro-rated for any partial calendar years
included within the term of this Agreement. Fund XVII may offset
against, pay to itself and deduct from any payment due to under
this Agreement, and may pay to itself the amount of Park's share
of any reasonable expenses of the Premises which are not paid by
Park to Fund XVII or its assigns, within ten (10) days after
demand by Fund XVII. In the event there is insufficient operating
income from which to deduct Park's unpaid share of operating
expenses, Fund XVII may pursue any and all legal remedies for
collection.
Operating Expenses shall include all normal and reasonable
operating expense, including but not limited to: maintenance,
utilities, supplies, labor, management, advertising and
promotional expenses, salaries and wages of rental and management
personnel, except as to managers above the level of property
manager, leasing commissions to unaffiliated third parties, a
monthly accrual to pay insurance premiums, real estate taxes,
installments of special assessments and for structural repairs
and replacements, management fees, legal fees and accounting
fees, but excluding all operating expenses paid by tenant under
terms of any lease agreement of the Premises. Any such expenses
which are not for the exclusive benefit of the premises shall be
equitably pro-rated.
Park has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XVII in the amount
of $700 for the expenses, direct and indirect, incurred by Fund
XVII in providing Park with quarterly accounting and
distributions of Park's share of net income and for tracking,
reporting and assessing the calculation of Park's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Park authorizes
Fund XVII to deduct such amount from Park's share of revenue from
the Premises. Park may terminate this agreement in this paragraph
respecting accounting and distributions at any time and attempt
to collect its share of rental income directly from the tenant;
however, enforcement of all other provisions of the lease remains
the sole right of Fund XVII pursuant to Section 1 hereof. Fund
XVII may terminate its obligation under this paragraph upon 30
days notice to Park prior to the end of each anniversary hereof,
unless agreed in writing to the contrary.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XVII's principal office, and each Co-Tenant shall have
access to such books and may inspect and copy any part thereof
during normal business hours. Within ninety (90) days after the
end of each calendar year during the term hereof, Fund XVII shall
prepare an accurate income statement for the ownership of the
Premises for said calendar
Co-Tenant Initial: /s/ TAP /s/ JLP
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
year and shall furnish copies of the same to all Co-Tenants.
Quarterly, as its share, Park shall be entitled to receive
10.0825% of all items of income and expense generated by the
Premises. Upon receipt of said accounting, if the payments
received by each Co-Tenant pursuant to this Paragraph 3 do not
equal, in the aggregate, the amounts which each are entitled
to receive proportional to its share of ownership with respect
to said calendar year pursuant to Paragraph 2 hereof, an
appropriate adjustment shall be made so that each Co-Tenant
receives the amount to which it is entitled.
4. If Net Income from the Premises is less than $0.00 (i.e.,
the Premises operates at a loss), or if capital improvements,
repairs, and/or replacements, for which adequate reserves do not
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor from Fund XVII, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XVII sufficient to pay said net operating losses
and to provide necessary operating capital for the premises and
to pay for said capital improvements, repairs and/or
replacements, all in proportion to their undivided interests in
and to the Premises.
5. Co-Tenants may, at any time, sell, finance, or otherwise
create a lien upon their interest in the Premises but only upon
their interest and not upon any part of the interest held, or
owned, by any other Co-Tenant. All Co-Tenants reserve the right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.
6. If any Co-Tenant shall be in default with respect to any of
its obligations hereunder, and if said default is not corrected
within thirty (30) days after receipt by said defaulting Co-
Tenant of written notice of said default, or within a reasonable
period if said default does not consist solely of a failure to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.
7. This Co-Tenancy agreement shall continue in full force and
effect and shall bind and inure to the benefit of the Co-Tenant
and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns until January
15, 2028, or upon the sale of the entire Premises in accordance
with the terms hereof and proper disbursement of the proceeds
thereof, whichever shall first occur. Unless specifically
identified as a personal contract right or obligation herein,
this agreement shall run with any interest in the Property and
with the title thereto. Once any person, party or entity has
ceased to have an interest in fee in any portion of the Entire
Property, it shall not be bound by, subject to or benefit from
the terms hereof; but its heirs, executors, administrators,
personal representatives, successors or assigns, as the case may
be, shall be substituted for it hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be given
to all known Co-Tenants and deemed given or served in accordance
with the provisions of this Agreement, if said notice or
elections addressed as follows;
Co-Tenant Initial: /s/ TAP /s/ JLP
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
If to Fund XVII:
AEI Real Estate Fund XVII Limited Partnership
1300 Minnesota World Trade Center
00 X. Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
If to Park:
Xxxxxx X. and Xxxxx Xxx Xxxx
000 Xxx Xxxxx
Xxxxxx, XX 00000
Each mailed notice or election shall be deemed to have been given
to, or served upon, the party to which addressed on the date the
same is deposited in the United States certified mail, return
receipt requested, postage prepaid, or given to a nationally
recognized courier service guaranteeing overnight delivery as
properly addressed in the manner above provided. Any party hereto
may change its address for the service of notice hereunder by
delivering written notice of said change to the other parties
hereunder, in the manner above specified, at least ten (10) days
prior to the effective date of said change.
9. This Agreement shall not create any partnership or joint
venture among or between the Co-Tenants or any of them, and the
only relationship among and between the Co-Tenants hereunder
shall be that of owners of the premises as tenants in common
subject to the terms hereof.
10. The unenforceability or invalidity of any provision or
provisions of this Agreement as to any person or circumstances
shall not render that provision, nor any other provision hereof,
unenforceable or invalid as to any other person or circumstances,
and all provisions hereof, in all other respects, shall remain
valid and enforceable.
11. In the event any litigation arises between the parties
hereto relating to this Agreement, or any of the provisions
hereof, the party prevailing in such action shall be entitled to
receive from the losing party, in addition to all other relief,
remedies and damages to which it is otherwise entitled, all
reasonable costs and expenses, including reasonable attorneys'
fees, incurred by the prevailing party in connection with said
litigation.
REST OF PAGE INTENTIONALLY LEFT BLANK
Co-Tenant Initial: /s/ TAP /s/ JLP
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Park: Xxxxxx X. Park and Xxxxx Xxx Xxxx, married
as joint tenants
By:/s/ Xxxxxx X Xxxx
Xxxxxx X. Park
By:/s/ Xxxxx Xxx Xxxx
Xxxxx Xxx Xxxx
WITNESS:
(as to both signers)
/s/ XX Xxxxx
XX Xxxxx
(Print name)
STATE OF )
) ss
COUNTY OF )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this day of
, 2000, Xxxxxx X. Park, who executed the foregoing
instrument in said capacity.
/s/ Xxxxxxx Xxx
Notary Public
[notary seal]
STATE OF )
) ss
COUNTY OF )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this day of
, 2000, Xxxxx Xxx Xxxx, who executed the foregoing
instrument in said capacity.
/s/ Xxxxxxx Xxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ TAP /s/ JLP
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
Fund XVII: AEI Real Estate Fund XVII Limited Partnership
By: AEI Fund Management XVII, Inc., its corporate general
partner
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
WITNESS:
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
(Print Name)
State of Minnesota )
) ss.
County of Xxxxxx )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 23rd day of July,
2000, Xxxxxx X. Xxxxxxx, President of AEI Fund Management XVII,
Inc., corporate general partner of AEI Real Estate Fund XVII
Limited Partnership who executed the foregoing instrument in said
capacity and on behalf of the corporation in its capacity as
corporate general partner, on behalf of said limited partnership.
/s/ Xxxxx X Xxxxxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ TAP /s/ JLP
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
EXHIBIT A
Xxx 0, Xxxxx 0, Xxxxxxxxxx First Subdivision, in the City of
Rochester, Xxxxxxxx County, Minnesota, together with Cross
Easement Agreement dated December 30, 1996, recorded January 23,
1997, as Document No. 744314.
