PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Taco Cabana - San Antonio, TX)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 5th day of Aug, 1996, by and
between The Xxxxxxx X. Xxxxxxxx (hereinafter called "Davidson"),
and AEI Real Estate Fund XVIII Limited Partnership (hereinafter
called "Fund XVIII") (Davidson, Fund XVIII (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 XVIII presently owns an undivided 86.2454% interest
in and to, and Davidson presently owns and undivided 13.7546%
interest in and to the land, situated in the City of San Antonio,
County of Bexar, and State of Texas, (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 Davidson's interest
by Fund XVIII; 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 Davidson 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 XVIII, or its designated agent, successors or
assigns. Provided, however, if Fund XVIII shall sell all of its
interest in the Premises, the duties and obligations of Fund
XVIII 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 XVIII with respect to all
administrative, operational and management matters of the
property comprising the Premises, including but not limited to
the management of the net lease agreement for the Premises. The
parties hereto hereby designate Fund XVIII as their sole and
exclusive agent to deal with any property agent and to execute
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 all present or future Co-
Tenants. Only Fund XVIII may obligate any Co-Tenant with respect
to any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XVIII agrees to
require any lessee of the Premises to name Davidson as an insured
or additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund XVIII 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 XVIII 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.
Co-Tenant Initial: /s/ CWD
Co-Tenancy Agreement for Taco Cabana - San Antonio, TX
2. Income, expenses and any net proceeds from a sale of the
Premises 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 XVIII may offset against, pay to
itself and deduct from any payment due to Davidson under this
Agreement, and may pay to itself the amount of Davidson's share
of any legitimate expenses of the Premises which are not paid by
Davidson to Fund XVIII or its assigns, within ten (10) days after
demand by Fund XVIII. In the event there is insufficient
operating income from which to deduct Davidson's unpaid share of
operating expenses, Fund XVIII may pursue any and all legal
remedies for collection.
Operating Expenses shall include all normal operating expense,
including but not limited to: maintenance, utilities, supplies,
labor, management, advertising and promotional expenses, salaries
and wages of rental and management personnel, leasing commissions
to third parties, a monthly accrual to pay insurance premiums,
real estate taxes, installments of special assessments and for
structural repairs and replacements, management fees, legal fees
and accounting fees, but excluding all operating expenses paid by
Lessee under terms of any triple net lease agreement initiated
concurrently with, or subsequent to, this agreement.
Davidson has elected to retain, and agrees to annually reimburse,
Fund XVIII in the amount of $744 for the expenses, direct and
indirect, incurred by Fund XVIII in providing quarterly
accounting and distributions of Davidson's share of net income
and for tracking, reporting and assessing the calculation of
Davidson's share of operating expenses incurred from the
Premises. This invoice amount shall be pro-rated for partial
years and Davidson authorizes Fund XVIII to deduct such amount
from Davidson's share of revenue. Davidson may terminate this
agreement at any time and collect it's share of rental stream
directly from the tenant.
3. Full, accurate and complete books of account shall be kept
in accordance with generally accepted accounting principles at
Fund XVIII'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 XVIII
shall prepare an accurate income statement for the ownership of
the Premises for said calendar year and shall furnish copies of
the same to all Co-Tenants. Quarterly, as its share, Davidson
shall be entitled to receive 13.7546% of all items of income and
expense generated by the Premises, and Fund XVIII shall be
entitled to receive 86.2454% as its share. 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 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 XVIII, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund XVIII 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.
Co-Tenant Initial: /s/ CWD
Co-Tenancy Agreement for Taco Cabana - San Antonio, TX
6. If any Co-Tenant shall be in default with respect to any of
its obligations hereunder, and if said default is not corrected
within thirty (30) days after receipt by said defaulting Co-
Tenant of written notice of said default, or within a reasonable
period if said default does not consist solely of a failure to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.
7. This property management agreement shall continue in full
force and effect and shall bind and inure to the benefit of the
Co-Tenant and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns until
the expiration date plus extensions of the net lease agreement
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 Premises and with the title
thereto. Once any person, party or entity has ceased to have an
interest in fee in the Premises, it shall not be bound by,
subject to or benefit from the terms hereof; but its heirs,
executors, administrators, personal representatives, successors
or assigns, as the case may be, shall be substituted for it
hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be deemed
given or served in accordance with the provisions of this
Agreement, if said notice or elections addressed as follows;
If to Fund XVIII:
AEI Real Estate Fund XVIII Limited Partnership
1300 Minnesota World Trade Center
00 X. Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
If to Davidson:
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx, 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.
10. 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.
11. 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.
Co-Tenant Initial: /s/ CWD
Co-Tenancy Agreement for Taco Cabana - San Antonio, TX
12. 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.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Xxxxxxxx Xxxxxxx X. Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Witness By: /s/ Xxxx X. Xxxxxxxx Xx
STATE OF )
) ss [notary seal]
COUNTY OF )
The foregoing instrument was acknowledged before me, a
Notary Public in and for the County and State aforesaid,
this 23rd day of July ,1996, by Xxxx X. Xxxxx, Xx, Notary
Public. /s/ Xxxx X. Xxxxx Xx.
Fund XVIII AEI Real Estate Fund XVIII Limited Partnership
By: AEI Fund Management XVIII, Inc.,
its corporate general partner
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
Witness By: /s/ Xxxxx X. Xxxxxx
Witness By: /s/ Xxxxxxxx X. Xxxxxxx
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 5th day of August,
1996, Xxxxxx X. Xxxxxxx, President of AEI Fund Management XVIII,
Inc., corporate general partner of AEI Real Estate Fund XVIII
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. Xxxxxxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ CWD
Co-Tenancy Agreement for Taco Cabana - San Antonio, TX
Exhibit A
Legal Description
Xxx 00, Xxxxx 0, Xxx Xxxx Xxxxx 00000, XXX Subdivision, Unit 3,
an addition to the City of San Antonio, Bexar County, Texas,
according to the map or plat thereof, recorded in Volume 9504,,
Page 182, Deed and Plat Records of Bexar County, Texas.
