PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Timber Lodge Steakhouse - St. Cloud, MN)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 6TH day of October, 2000, by and
between The Rynda Family Limited Partnership (hereinafter called
"Rynda"), and AEI Real Estate Fund XVII Limited Partnership
(hereinafter called "Fund XVII") Rynda, 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 1.9949% interest
in and to, and Rynda presently owns an undivided 15.2418%
interest in and to, and William Jay and Georgeann McNaughtan
presently own an undivided 11.7244% interest in and to, and
Marshall M. Kilduff and Pat S. Kilduff, Trustees of the Kilduff
1996 Revocable Trust presently own an undivided 9.5671% interest
in and to, and Kathleen DeVoe Hans presently owns an undivided
11.9502% interest in and to, and Kenneth F. Cairns 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
Catharine C. Whittenburg Testamentary Trust for J.A. Whittenburg
IV or assigns presently owns an undivided 11.9502% interest in
and to, and Charles R. Amos and Sharon L. Amos, Trustees of the
Charles R. and Sharon L. Amos Family Trust Dated March 21, 1995,
presently own an undivided 10.8030% interest in and to, and W. E.
and Hazel Mason of the Mason Living Trust presently own an
undivided 9.5601% interest in and to the land, situated in the
City of St. Cloud, County of Stearns, 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 Rynda'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 Rynda 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
Co-Tenant Initial: /s/ RRR /s/ CAR
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
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. Rynda 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
Rynda. As long as Fund XVII owns an interest in the
Premises, only Fund XVII may obligate Rynda 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 Rynda 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 Rynda's share
of any reasonable expenses of the Premises which are not paid by
Rynda 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 Rynda'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.
Rynda has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XVII in the amount
of $910 for the expenses, direct and indirect, incurred by Fund
XVII in providing Rynda with quarterly accounting and
distributions of Rynda's share of net income and for tracking,
reporting and assessing the calculation of Rynda's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Rynda authorizes
Fund XVII to deduct such amount from Rynda's share of revenue
from the Premises. Rynda 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
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Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
30 days notice to Rynda 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 year and shall furnish copies of the
same to all Co-Tenants. Quarterly, as its share, Rynda shall be
entitled to receive 15.2418% 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 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.
Co-Tenant Initial: /s/ RRR /s/ CAR
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
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
30 E. Seventh Street
St. Paul, Minnesota 55101
If to Rynda:
The Rynda Family Limited Partnership
8907 Vincent Place
Bloomington, MN 55431
If to McNaughtan:
William Jay and Georgeann McNaughtan
1695 E. Center Street
Heber City, UT 84032
If to Kilduff:
Marshall M. Kilduff, Trustee
Pat S. Kilduff, Trustee
321 Lake Street
San Francisco, CA 94118-1320
If to Hans:
Kathleen DeVoe Hans
310 Desert Meadow Court
Reno, NV 89502
If to Cairns:
Kenneth F. Cairns
24600 SE Ladd Hill Road
Sherwood, OR 97140
Co-Tenant Initial: /s/ RRR /s/ CAR
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
If to VTA :
VTA Building Company
12825 Falcon Drive
Apple Valley, MN 55124
If to Whittenburg:
The Catharine C. Whittenburg Testamentary Trust for
J. A. Whittenburg IV or Assigns
Post Office Box 26
Amarillo, TX 79105
If to Amos:
Charles R. Amos and Sharon L. Amos, Trustees
30033 Knoll View Drive
Rancho Palos Verdes, CA 90275
If to Mason:
Mason Living Trust
136 Baltusrol Road
Franklin, TN 37069
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
Co-Tenant Initial: /s/ RRR /s/ CAR
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
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.
The Rynda Family Limited Partnership
By:/s/ Robert R Rynda
Robert R. Rynda, general partner
By: /s/ Carol A Rynda
Carol A. Rynda, general partner
WITNESS:
(As to both signers)
(Print Name)
STATE OF MINNESOTA)
) ss
COUNTY OF HENNEPIN )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 2 day of October,
2000, Robert R. Rynda and Carol A. Rynda, who executed the
foregoing instrument in said capacity.
/s/ Dennis J Dietzler
Notary Public
[notary seal]
Co-Tenant Initial: /s/ RRR /s/ CAR
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/ Robert P Johnson
Robert P. Johnson, President
WITNESS:
/s/ Dawn Campbell
Dawn Campbell
(Print Name)
State of Minnesota )
) ss.
County of Ramsey )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 6 day of October,
2000, Robert P. Johnson, 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/ Heather Garcia
Notary Public
[notary seal]
Co-Tenant Initial: /s/ RRR /s/ CAR
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN
EXHIBIT A
That part of Lot Two (2), Block One (1) Fischer Addition, a duly
recorded plat in the office of the County Recorder/Registrar of
titles in Stearns 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, utilities 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, filed of record Dec. 13, 1996 as Document No.
835857, and in torrens as Document No. 24060.
