PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Arby's Restaurant - Hudsonville, MI)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 30th day of November, 2000, by
and between Xxxxx X. Xxxxxxx (hereinafter called "Xxxxxxx") and
AEI Real Estate Fund 85-A Limited Partnership (hereinafter called
"Fund 85-A") (Xxxxxxx, Fund 85-A (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 85-A presently owns an undivided 16.3319% interest
in and to, and Xxxxx X. Xxxxxxx presently owns an undivided
38.2745% interest in and to, Scorpion Enterprises, LLC presently
owns an undivided 21.4337% interest in and to, and Xxxxx Xxxx
Xxxxxxx and Xxxxx X. Xxxxxxx, married as joint tenants presently
own an undivided 23.9599% interest in and to the land situated in
the City of Hudsonville, County of Ottawa and State of MI,
(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 Xxxxxxx'x interest
by Fund 85-A; 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 Xxxxxxx 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 85-A, or its designated agent, successors or
assigns. Provided, however, if Fund 85-A shall sell all of its
interest in the Premises, the duties and obligations of Fund 85-A
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 85-A 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 85-A as their sole and
exclusive agent to deal with, and Fund 85-A retains the sole
right to deal with, any property agent or tenant and to monitor,
execute and enforce the terms of leases of space within the
Premises, including but not limited to any amendments, consents
Co-Tenant Initial: /s/ SS
Co-Tenancy Agreement for Arby's Restaurant-Hudsonville, MI
to assignment, sublet, releases or modifications to leases or
guarantees of lease or easements affecting the Premises, on
behalf of Xxxxxxx. As long as Fund 85-A owns an interest in the
Premises, only Fund 85-A may obligate Xxxxxxx with respect to any
expense for the Premises.
As further set forth in paragraph 2 hereof, Fund 85-A agrees to
require any lessee of the Premises to name Xxxxxxx as an insured
or additional insured in all insurance policies provided for, or
contemplated by, any lease on the Premises. Fund 85-A 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 85-A 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 85-A may offset
against, pay to itself and deduct from any payment due to Xxxxxxx
under this Agreement, and may pay to itself the amount of
Xxxxxxx'x share of any legitimate expenses of the Premises which
are not paid by Xxxxxxx to Fund 85-A or its assigns, within ten
(10) days after demand by Fund 85-A. In the event there is
insufficient operating income from which to deduct Xxxxxxx'x
unpaid share of operating expenses, Fund 85-A may pursue any and
all legal remedies for collection.
Operating Expenses shall include all normal operating expense,
including but not limited to: maintenance, utilities, supplies,
labor, management, advertising and promotional expenses, salaries
and wages of rental and management personnel, leasing commissions
to third parties, a monthly accrual to pay insurance premiums,
real estate taxes, installments of special assessments and for
structural repairs and replacements, management fees, legal fees
and accounting fees, but excluding all operating expenses paid by
Tenant under terms of any lease agreement of the Premises.
Xxxxxxx has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund 85-A in the amount
of $1,300 for the expenses, direct and indirect, incurred by Fund
85-A in providing Xxxxxxx with quarterly accounting and
distributions of Xxxxxxx'x share of net income and for tracking,
reporting and assessing the calculation of Xxxxxxx'x share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Xxxxxxx
authorizes Fund 85-A to deduct such amount from Xxxxxxx'x share
of revenue from the Premises. Xxxxxxx 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
85-A pursuant to Section 1 hereof. Fund 85-A may terminate its
obligation under this paragraph upon 30 days notice to Xxxxxxx
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 85-A'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
Co-Tenant Initial: /s/ SS
Co-Tenancy Agreement for Arby's Restaurant-Hudsonville, MI
end of each calendar year during the term hereof, Fund 85-A 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, Xxxxxxx shall be
entitled to receive 38.2745% 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 85-A, shall,
within fifteen (15) business days after receipt of notice, make
payment to Fund 85-A sufficient to pay said net operating losses
and to provide necessary operating capital for the premises and
to pay for said capital improvements, repairs and/or
replacements, all in proportion to their undivided interests in
and to the Premises.
5. Co-Tenants may, at any time, sell, finance, or otherwise
create a lien upon their interest in the Premises but only upon
their interest and not upon any part of the interest held, or
owned, by any other Co-Tenant. All Co-Tenants reserve the right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.
6. If any Co-Tenant shall be in default with respect to any of
its obligations hereunder, and if said default is not corrected
within thirty (30) days after receipt by said defaulting Co-
Tenant of written notice of said default, or within a reasonable
period if said default does not consist solely of a failure to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.
7. This property management agreement shall continue in full
force and effect and shall bind and inure to the benefit of the
Co-Tenant and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns until
September 30, 2029 or upon the sale of the entire Premises in
accordance with the terms hereof and proper disbursement of the
proceeds thereof, whichever shall first occur. Unless
specifically identified as a personal contract right or
obligation herein, this agreement shall run with any interest in
the Property and with the title thereto. Once any person, party
or entity has ceased to have an interest in fee in any portion of
the Entire Property, it shall not be bound by, subject to or
benefit from the terms hereof; but its heirs, executors,
administrators, personal representatives, successors or assigns,
as the case may be, shall be substituted for it hereunder.
8. Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be deemed
given or served in accordance with the provisions of this
Agreement, if said notice or elections addressed as follows;
Co-Tenant Initial: /s/ SS
Co-Tenancy Agreement for Arby's Restaurant-Hudsonville, MI
If to Fund 85-A:
AEI Real Estate Fund 85-A Limited Partnership
1300 Minnesota World Trade Center
00 X. Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
If to Xxxxxxx:
Xxxxx X. Xxxxxxx
0000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
If to Scorpion:
Scorpion Enterprises, LLC
0000 X. Xxxx Xxxx
Xxxxxxxxxx, XX 00000
If to Spillet:
Xxxxx Xxxx and Xxxxx X. Xxxxxxx
0000 Xxxxxxx 00 Xxxxx, Xxx 000
Xxxxxxxx, 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
Co-Tenant Initial: /s/ SS
Co-Tenancy Agreement for Arby's Restaurant-Hudsonville, MI
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.
Xxxxxxx: Xxxxx X. Xxxxxxx
By: /s/ Xxxxx X Xxxxxxx
Xxxxx X. Xxxxxxx
WITNESS:
/s/ Xxxxxxxx X Xxxxxxx
Xxxxxxxx X Xxxxxxx
(Print Name)
State of Minnesota)
) ss.
County of Isanti )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 29th day of
November, 2000, Xxxxx X. Xxxxxxx, who executed the foregoing
instrument in said capacity.
/s/ Xxxxxx X Xxxxxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ SS
Co-Tenancy Agreement for Arby's Restaurant-Hudsonville, MI
Fund 85-A: AEI Real Estate Fund 85-A Limited Partnership
By: Net Lease Management 85-A, 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 30th day of
November, 2000, Xxxxxx X. Xxxxxxx, President of Net Lease
Management 85-A, Inc., corporate general partner of AEI Real
Estate Fund 85-A 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/ Xxxxxxx X Xxxxxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ SS
Co-Tenancy Agreement for Arby's Restaurant-Hudsonville, MI
EXHIBIT "A"
[Hudsonville, Michigan]
Part of the Northeast fractional 1/4 of Xxxxxxx 0, Xxxx
0 Xxxxx, Xxxxx 00 Xxxx, Xxxx of Hudsonville, Michigan,
described as:
COMMENCING at the Northeast corner of said Section,
thence South 02 degrees 21 minutes 30 seconds West 995.20
feet along the East line of said Section; thence North 89
degrees 26 minutes 38 seconds West 33.02 feet; thence South
02 degrees 21 minutes 30 seconds West 28.51 feet; thence
North 87 degrees 28 minutes 30 seconds West 17.00 feet to
the PLACE OF BEGINNING; thence South 02 degrees 21 minutes
30 seconds West 147.02 feet along the West right-of-way line
of 32nd Avenue; thence North 89 degrees 26 minutes 38
seconds West 250.00 feet; thence North 02 degrees 21 minutes
30 seconds East 175.00 feet; thence South 89 degrees 26
minutes 28 seconds East 250.00 feet; thence South 02 degrees
21 minutes 30 seconds West 27.98 feet to the PLACE OF
BEGINNING.
SUBJECT TO AND TOGETHER WITH an easement for ingress and
egress over part of the Northeast fractional 1/4, Xxxxxxx 0,
Xxxx 0 Xxxxx, Xxxxx 00 Xxxx, Xxxx of Hudsonville, Ottawa
County, Michigan, described as:
COMMENCING at the Northeast corner of said Section, thence
South 02 degrees 21 minutes 30 seconds West 1170.20 feet
along the East line of said Section; thence North 89 degrees
26 minutes 38 seconds West 93.88 feet to the POINT OF
BEGINNING; thence South 00 degrees, 33 minutes 22 seconds
West 10.52 feet; thence South 88 degrees 27 minutes 06
seconds East 43.52 feet; thence South 02 degrees 21 minutes
30 seconds West 26.00 feet along the West Right-of-Way line
of 32nd Avenue; thence North 88 degrees 27 minutes 06
seconds West 42.86 feet; thence South 02 degrees 21 minutes
20 seconds West 136.00 feet; thence North 87 degrees 38
minutes 05 seconds West 76.54 feet; thence South 47 degrees
38 minutes 40 seconds West 14.21 feet; thence South 02
degrees 55 minutes 25 seconds West 20.20 feet; thence North
89 degrees 26 minutes 38 seconds West 16.01 feet along the
North Right-of-Way line of Highland Drive; thence North 02
degrees 55 minutes 25 seconds East 30.70 feet; thence North
87 degrees 38 minutes 05 seconds West 9.00 feet; thence
South 47 degrees 38 minutes 40 seconds West 7.11 feet;
thence South 02 degrees 55 minutes 25 seconds West 26.15
feet; thence North 89 degrees 26 minutes 38 seconds West
16.01 feet along said North Right-of-Way line; thence North
02 degrees 55 minutes 25 seconds East 55.65 feet; thence
South 87 degrees 38 minutes 05 seconds East 106.31 feet;
thence North 02 degrees 21 minutes 20 seconds East 116.81
feet; thence North 00 degrees 33 minutes 22 seconds East
30.90 feet; thence South 89 degrees 26 minutes 38 seconds
East 26.00 feet to the POINT OF BEGINNING.
SUBJECT TO AND TOGETHER WITH an easement over part of the
Northeast fractional 1/4 of Xxxxxxx 0, Xxxx 0 Xxxxx, Xxxxx 00
Xxxx, Xxxx of Hudsonville, Ottawa County, Michigan, described as:
COMMENCING at the Northeast corner of said Section; thence South
02 degrees 21 minutes 30 seconds West 929.17 feet along the East
line of said Section; thence North 89 degrees 26 minutes 38
seconds West 50.03 feet to the POINT OF BEGINNING; thence North
89 degrees 26 minutes 38 seconds West 115.00 feet; thence South
02 degrees 21 minutes 30 seconds East 66.03 feet; thence South 89
degrees 26 minutes 38 seconds East 115.00 feet; thence North 02
degrees 21 minutes 30 seconds East 66.03 feet to the POINT OF
BEGINNING.
