PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Timber Lodge Steakhouse - Rochester, MN)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 27 day of September, 2000, by and
between Garden Ridge Development LLC (hereinafter called "Garden
Ridge"), and AEI Real Estate Fund XVII Limited Partnership
(hereinafter called "Fund XVII"). Garden Ridge, 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 76.8102% interest
in and to, and Garden Ridge presently owns an undivided 13.1073%
interest in and to, and Xxxxxx X. Park and Xxxxxx Xxx Xxxx,
married as joint tenants presently own 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 Garden Ridge
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 Garden Ridge.
13.1073% 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. Garden Ridge hereto hereby
designates und 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
Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
of Garden Ridge. As long as Fund XVII owns an interest in
the Premises, only Fund XVII may obligate Garden Ridge trust
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 Garden Ridge 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 Garden
Ridge's share of any reasonable expenses of the Premises which
are not paid by Garden Ridges 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 Garden Ridge'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.
Garden Ridges has no requirement to, but has, nonetheless elected
to retain, and agrees to annually reimburse, Fund XVII in the
amount of $910.00 for the expenses, direct and indirect, incurred
by Fund XVII in providing Garden Ridge with quarterly accounting
and distributions of Garden Ridge's share of net income and for
tracking, reporting and assessing the calculation of Garden
Ridge's share of operating expenses incurred from the Premises.
This invoice amount shall be pro-rated for partial years and
Garden Ridge authorizes Fund XVII to deduct such amount from
Garden Ridge's share of revenue from the Premises. Garden Ridge
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 Garden Ridge prior to the end of each anniversary hereof,
unless agreed in writing to the contrary.
2. 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/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
year and shall furnish copies of the same to all Co-Tenants.
Quarterly, as its share, Garden Ridge shall be entitled to
receive 13.1073% 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 therefore 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/ NAL
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 Garden Ridge Development LLC:
Xxxxx Xxxxxxxxx
0000 X 000xx Xxxxxx
Xxxxxxxxx, 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.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
Co-Tenant Initial: /s/ NAL
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
Garden Ridge Development LLC
By: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx,
Chief Financial Manager
Garden Ridge Development LLC
By: /s/ C. Xxxx Xxxxxx
C. Xxxx Xxxxxx
Chief Manager
STATE OF MINNESOTA)
) ss
COUNTY OF DAKOTA)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 26th day of
September, 2000, , Xxxxx Xxxxxxxxx, Chief
Financial Manager and C. Xxxx Xxxxxx, Chief Manager of Garden
Ridge Development LLC , a corporation, who executed the foregoing
instrument in said capacity.
/s/ Xxxxxx X Xxxxxxxx
Notary Public
[notary seal]
WITNESS:
/s/ Xxxxxxx X Xxxxxx
Xxxxxxx X Xxxxxx
(Print Name)
Co-Tenant Initial: /s/ NAL
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 27 day of September,
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/ Xxxxxxx X Xxxxxx
Notary Public
[notary seal]
Co-Tenant Initial:
Co-Tenancy Agreement for Timber Lodge-Rochester, MN
EXHIBIT "A"
An undivided 13.1073% tenant in common interest in:
Xxx 0, Xxxxx 0, Xxxxxxxxxx First Subdivision, in the City of
Rochester, Olmsted County, Minnesota, together with Cross
Easement Agreement dated December 30, 1996, recorded January 23,
1997, as Document No. 744314.
