PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Rio Bravo-St. ▇▇▇▇, MN)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 16th day of Sept, 1998, by and
between ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, Trustees of The ▇▇▇▇ ▇.
and Atsuko Revocable Trust, dated 12/30/74 (hereinafter called
"Obata"), and AEI Real Estate Fund 85-A Limited Partnership
(hereinafter called "Fund 85-A") (Obata, 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 26.7096% interest
in and to, and Obata presently owns an undivided 16.0589%
interest in and to, and ▇▇▇ ▇. ▇▇▇▇▇, Trustee of That Certain
"Living Trust" presently owns an undivided 16.0589% interest in
and to, and W.E. ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, Trustees of the ▇▇▇▇▇
Living Trust presently owns an undivided 12.5821% interest in and
to, and ▇▇▇▇▇▇ ▇. ▇▇▇▇ Family Trust presently owns an undivided
17.1199% interest in and to, and ▇▇▇▇ ▇▇▇▇▇▇, Inc. presently owns
an undivided 11.4706% interest in and to the land, situated in
the City of St. ▇▇▇▇, County of ▇▇▇▇▇▇, 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 Obata's 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 Obata 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 negotiate
and enter into, on terms and provisions satisfactory to Fund 85-
A, 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 Obata. As long as Fund 85-A owns an
interest in the Premises, only Fund 85-A may obligate Obata with
respect to any expense for the Premises.
Co-Tenant Initial: /s/ JSO /s/ AO
Co-Tenancy Agreement for Rio Bravo-St. ▇▇▇▇, MN
As further set forth in paragraph 2 hereof, Fund 85-A agrees to
require any lessee of the Premises to name Obata 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 Obata
under this Agreement, and may pay to itself the amount of Obata's
share of any reasonable expenses of the Premises which are not
paid by Obata 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 Obata's 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.
Obata has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund 85-A in the amount
of $821 for the expenses, direct and indirect, incurred by Fund
85-A in providing Obata with quarterly accounting and
distributions of Obata's share of net income and for tracking,
reporting and assessing the calculation of Obata's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Obata authorizes
Fund 85-A to deduct such amount from Obata's share of revenue
from the Premises. Obata 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 Obata 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
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, Obata shall be
entitled to receive 16.0589% 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
Co-Tenant Initial: /s/ JSO /s/ AO
Co-Tenancy Agreement for Rio Bravo-St. ▇▇▇▇, MN
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 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 December
31, 2026 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 85-A:
AEI Real Estate Fund 85-A Limited Partnership
1300 Minnesota World Trade Center
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Obata:
▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇▇▇▇▇, Trustees
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Obata:
▇▇▇ ▇. ▇▇▇▇▇, Trustee
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Co-Tenant Initial: /s/ JSO /s/ AO
Co-Tenancy Agreement for Rio Bravo-St. ▇▇▇▇, MN
If to ▇▇▇▇▇:
▇▇▇▇▇ Living Trust
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ Family Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇:
▇▇▇▇ ▇▇▇▇▇▇ Francesco
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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.
Co-Tenant Initial: /s/ JSO /s/ AO
Co-Tenancy Agreement for Rio Bravo-St. ▇▇▇▇, MN
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
OBATA ▇▇▇▇ ▇ ▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇, TRUSTEES OF THE ▇▇▇▇ ▇.
AND ▇▇▇▇▇▇ ▇▇▇▇▇ REVOCABLE TRUST, DATED 12/30/74
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ Trustee
▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ Trustee
▇▇▇▇▇▇ ▇▇▇▇▇, Trustee
STATE OF CA)
) ss
COUNTY OF SANTA ▇▇▇▇▇)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 10 day of September,
1998, ▇▇▇▇ ▇.▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, Trustees, who executed the
foregoing instrument in said capacity.
/s/ A Monk
Notary Public
[notary seal]
Co-Tenant Initial: /s/ JSO /s/ AO
Co-Tenancy Agreement for Rio Bravo-St. ▇▇▇▇, MN
Fund 85-A AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP, a Minnesota
limited partnership
By: Net Lease Management 85-A, Inc.,
its corporate general partner
By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
State of Minnesota )
) ss.
County of ▇▇▇▇▇▇ )
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 16th day of Sept,
1998, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Notary Public
[notary seal]
Co-Tenant Initial: /s/ JSO /s/ AO
Co-Tenancy Agreement for Rio Bravo-St. ▇▇▇▇, MN
EXHIBIT "A"
Those parts of Lots 5,6 and 7 and Lots B, I and J, all in
▇▇▇▇'▇ Rearrangement, St. ▇▇▇▇, Minn., according to the
recorded Partnership thereof, ▇▇▇▇▇▇ County, Minnesota,
described as beginning at the Northwest corner of the East
10.00 feet of said Lot 5; thence on an assumed bearing of
South, along the West line of said East 10.00 feet of Lot 5,
a distance of 336.83 feet, thence on a bearing of West a
distance of 281.00 feet; thence on a bearing of South a
distance of 178.96 feet to the Northerly right-of-way line
of Interstate ▇▇▇▇▇▇▇ ▇▇. ▇▇; thence South 89 degrees 53
minutes 38 seconds West along said Northerly right-of-way
line of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇ a distance of 20.00 feet;
thence on a bearing of North a distance of 153.00 feet;
thence on a bearing of West a distance of 182.64 feet to a
line of 135.00 feet Easterly of and parallel with the most
Westerly line of said Lot 6 and its Northerly extension;
thence North 0 degrees 02 minutes 00 seconds East along said
parallel line a distance of 79.54 feet, to the Northwesterly
line of said Lot 65; thence Northeasterly, along the
Northwesterly lines of said Lots 6, I, J and 5 to the point
of beginning.
Except the following described parcel:
That part of ▇▇▇ ▇, ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇.,
according to the plat thereof described as follows:
Beginning at the Northeast corner of said Lot 5; thence
on an assumed bearing of South 0 degrees 06 minutes 40
seconds East, along the East line of said Lot 5, a distance
of 13.16 feet; thence South 89 degrees 53 minutes 20 seconds
West a distance of 26.46 feet, to the Northwesterly line of
said Lot 5; thence Northeasterly, along said Northwesterly
line a distance of 29.55 feet to the point of beginning
except the East 10 feet thereof.