PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Timber Lodge Steakhouse - St. Cloud, MN)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 9th day of December, 1999, by and
between Xxxxxxx Xxx XxXxxxxxxx and Xxxxxxxxx XxXxxxxxxx, married
with rights of survivorship, (hereinafter called "McNaughtan"),
and AEI Real Estate Fund XVII Limited Partnership (hereinafter
called "Fund XVII") (McNaughtan, 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 17.2367% interest
in and to, and McNaughtan presently owns an undivided 11.7244%
interest in and to, and Xxxxxxxx X. Xxxxxxx and Xxx X. Xxxxxxx,
Trustees of the Xxxxxxx 1996 Revocable Trust presently own an
undivided 9.5671% interest in and to, and Xxxxxxxx XxXxx Xxxx
presently owns an undivided 11.9502% interest in and to, and
Xxxxxxx X. Xxxxxx presently owns an undivided 5.2581% interest in
and to, and VTA Building Company presently owns an undivided
11.9502% interest in and to, and the Xxxxxxxxx X. Xxxxxxxxxxx
Testamentary Trust for X.X. Xxxxxxxxxxx XX or assigns presently
owns an undivided 11.9502% interest in and to, and Xxxxxxx X.
Xxxx and Xxxxxx X. Xxxx, Trustees of the Xxxxxxx X. and Xxxxxx X.
Xxxx Family Trust Dated March 21, 1995, presently owns an
undivided 10.8030% interest in and to, and W. E. and Xxxxx Xxxxx
of the Xxxxx Living Trust presently own an undivided 9.5601%
interest in and to the land, situated in the City of St. Cloud,
County of Xxxxxxx, 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 McNaughtan'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 McNaughtan 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.
McNaughtan 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
Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
or modifications to leases or guarantees of lease or easements
affecting the Premises, on behalf of McNaughtan. As long as Fund
XVII owns an interest in the Premises, only Fund XVII may
obligate McNaughtan with respect to any expense for the Premises.
As further set forth in paragraph 2 hereof, Fund XVII agrees to
require any lessee of the Premises to name McNaughtan 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 McNaughtan's
share of any reasonable expenses of the Premises which are not
paid by McNaughtan 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 McNaughtan's
unpaid share of operating expenses, Fund XVII 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.
McNaughtan 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 McNaughtan with quarterly accounting and
distributions of McNaughtan's share of net income and for
tracking, reporting and assessing the calculation of McNaughtan's
share of operating expenses incurred from the Premises. This
invoice amount shall be pro-rated for partial years and
McNaughtan authorizes Fund XVII to deduct such amount from
McNaughtan's share of revenue from the Premises. McNaughtan 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 agrees to perform
its obligation under this paragraph throughout the term of this
agreement.
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 year and shall furnish copies of the
same to all Co-Tenants. Quarterly, as its share, McNaughtan shall
be entitled to receive 11.7244% 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.
Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
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 November
30, 2032 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;
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 McNaughtan:
Xxxxxxx Xxx XxXxxxxxxx and Xxxxxxxxx XxXxxxxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
If to Xxxxxxx:
Xxxxxxxx X. Xxxxxxx, Trustee
Xxx X. Xxxxxxx, Trustee
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
If to Hans:
Xxxxxxxx XxXxx Xxxx
000 Xxxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
If to Cairns:
Xxxxxxx X. Xxxxxx
00000 XX Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
If to VTA :
VTA Building Company
00000 Xxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
If to Xxxx:
Xxxxxxx X. Xxxx and Xxxxxx X. Xxxx, Trustees
00000 Xxxxx Xxxx Xxxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
If to Xxxxx:
Xxxxx Living Trust
000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
If to Xxxxxxxxxxx:
The Xxxxxxxxx X. Xxxxxxxxxxx Testamentary Trust for
X. X. Xxxxxxxxxxx XX or Assigns
Xxxx Xxxxxx Xxx 00
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.
Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
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.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
McNaughtan
By:/s/ Xxxxxxx Xxx XxXxxxxxxx
Xxxxxxx Xxx XxXxxxxxxx
, By:/s/ Xxxxxxxxx XxXxxxxxxx
Xxxxxxxxx XxXxxxxxxx
WITNESS:
(as to both signers)
/s/ Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
(Print Name)
STATE OF UTAH)
) ss
COUNTY OF WASATCH)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 6 day of December,
1999, Xxxxxxx Xxx XxXxxxxxxx and Xxxxxxxxx XxXxxxxxxx who
executed the foregoing instrument in said capacity.
/s/ Xxxx Xxxxxxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, 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 9th day of November,
1999, 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 Xxxxxxx
Notary Public
[notary seal]
Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
EXHIBIT A
That part of Lot Two (2), Block One (1) Xxxxxxx
Additions, a duly recorded plat in the office of the County
Recorder/Registar of titles in Xxxxxxx County, Minnesota,
lying North of a line drawn parallel with and 327.20 feet
Southerly of, as measured at right angles to, the most
Northerly line of said Lot Two (2); together with the rights
of ingress, egress, utilites easements and such other rights
which constitute an interest in real property as created in
that certain Easement and Maintenance Agreement dated Dec.
10, 1996, file of record Dec. 13, 1996 as Document Xx.
000000, xxx xx xxxxxxx xx Xxxxxxxx Xx. 00000.
