PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 18 day of May, 2001, by and
between AEI Real Estate Fund 85-A Limited Partnership
(hereinafter called "Co-Tenancy Manager"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇ and
▇▇▇ ▇. ▇▇▇▇, Trustees of the Wood Family Trust dated 3/15/93, as
amended 7/9/97 (hereinafter called "Wood") (Wood, 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 85.1644% interest
in and to, and to Wood presently owns an undivided 14.8356%
interest in and to the land, situated in the City of ▇▇▇▇▇▇▇,
County of ▇▇▇▇▇, and State of Oregon, (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
monitoring of performance by the present tenant of the Premises
under the triple net lease agreement for the Premises; if
necessary, upon a vacancy in the Premises, the operation and
management of the Premises; the continued leasing of space within
the Premises; and, the distribution of income from and the pro-
rata sharing in expenses of the Premises by Co-Tenancy Manager in
connection with Wood's interest in the Premises.
NOW THEREFORE, in consideration of the purchase by Wood 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. Wood, subject to the limitations and power of revocation
herein expressed, hereby designates Co-Tenancy Manager as its
sole and exclusive agent and delegates to Co-Tenancy Manager the
sole right to monitor and enforce on behalf of Wood the terms of
the present lease of the Premises, including but not limited to
any amendments, consents to assignment, sublet, releases or
modifications to the lease or guarantees of lease and to deal
with any property agent or tenant. Should the Premises become
vacant, the operation and management of the Premises, is
delegated by the Co-Tenants, subject to revocation on an
individual basis by an individual Co-Tenant as otherwise set
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
forth herein, to Co-Tenancy Manager, or its designated agent,
successors or assigns. Provided, however, if Co-Tenancy Manager
shall sell all of its interest in the Premises, (or shall no
longer be delegated the operation and management of the
Premises), the duties and obligations of Co-Tenancy Manager
respecting management of the Premises as set forth herein,
including but not limited to its duties and obligations
respecting paragraphs 2, 3, and 4 hereof, shall be exercised by
the holder or holders of a majority undivided co-tenancy
interests in the Premises. Subject to the approval of all Co-
Tenants evidenced by their written consent, Co-Tenancy Manager
shall negotiate and execute re-leases of the Premises upon
termination of the present lease of the Premises or negotiate and
execute easements affecting the Premises, may incur ordinary and
necessary operating expenses in connection with the management of
the Premises, and propose extraordinary or capital expenditures
to the Premises. Until Wood shall revoke such authority as
provided herein, Co-Tenancy Manager or Wood itself may obligate
Wood with respect to any ordinary and necessary operating expense
for the Premises. However, Co-Tenancy Manager has no right to
obtain a loan for which any other Co-Tenant would be liable, nor
may Co-Tenancy Manager finance or refinance the Premises by
secured by any lien or any pledge of the Premises. Wood agrees to
execute and deliver to Co-Tenancy Manager such written approval
of documents approved by Wood, such approval to take such form as
may be reasonably required by Co-Tenancy Manager to evidence its
authority to sign approved documents on behalf of Wood.
As further set forth in paragraph 2 hereof, Co-Tenancy Manager
agrees to require any lessee of the Premises to name Wood as an
insured or additional insured in all insurance policies provided
for, or contemplated by, any lease on the Premises. Co-Tenancy
Manager 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, Co-Tenancy Manager
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. Co-Tenancy Manager
may offset against, pay to itself and deduct from any payment due
to Co-Tenancy Manager under this Agreement, and may pay to itself
the amount of Wood's share of any reasonable expenses of the
Premises which are not paid by Wood to Co-Tenancy Manager or its
assigns, within ten (10) days after demand by Wood. In the event
there is insufficient operating income from which to deduct
Wood's unpaid share of operating expenses, Co-Tenancy Manager 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
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
tenant under terms of any lease agreement of the Premises.
Wood has no requirement to, but has, nonetheless elected to
retain, and agrees to annually compensate, Co-Tenancy Manager in
the amount of $790.00 or the expenses, direct and indirect,
incurred by Co-Tenancy Manager in providing Wood with quarterly
accounting and distributions of Wood's share of net income and
for tracking, reporting and assessing the calculation of Wood's
share of operating expenses incurred from the Premises. This
invoice amount shall be pro-rated for partial years and Wood
authorizes Co-Tenancy Manager to deduct such amount from Wood's
share of revenue from the Premises. Wood 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; Co-Tenancy Manager may
terminate its obligation under this paragraph upon 30 days
written notice to Wood 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 Co-
Tenancy Manager '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, Co-
Tenancy Manager 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, Wood shall be entitled to receive 14.8356% 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 Co-Tenancy Manager
shall, within fifteen (15) business days after receipt of notice,
make payment to Co-Tenancy Manager 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. All Co-Tenants shall have the
right to review all contracts that will have a material effect on
the Premises. All Co-Tenants shall have the right to approve
budgets and major capital expenditures affecting the Premises.
While Co-Tenancy Manager shall own an interest in the Premises,
Co-Tenants agree to delegate the determination of such budgets
and need for capital expenditures to Co-Tenancy Manager subject
to the power of any Co-Tenant to revoke such delegation in
accordance with the provisions hereof.
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, and shall not create any lien upon
their individual interest if by operation of law such lien shall
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
by law extend to the interest of 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 Wood 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. Any Co-Tenant may, at any time effective upon
written notice to Co-Tenancy Manager revoke the designation of Co-
Tenancy Manager as such Co-Tenant's agent for the purposes as set
forth herein. Any Co-Tenant revoking such designation of Co-
Tenancy Manager's agency shall notify Co-Tenancy Manager in
writing in accordance with the terms hereof and such revocation
shall be effective upon Co-Tenancy Manager's receipt of such
written revocation.
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 World Trade Center
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Wood:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Trustee
▇▇▇ ▇. ▇▇▇▇, Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
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. Any Co-Tenant
selling or transferring all or a portion of its interest in the
Premises shall provide, within a reasonable time after the
completion of such sale or transfer, written notice to all other
Co-Tenants of the name and address of such new Co-Tenant and the
interest held by such new Co-Tenant.
9. This Agreement shall not create any partnership or joint
venture among or between the Co-Tenants or any of them; no Co-
Tenant shall file any partnership tax returns nor otherwise take
any action respecting nor represent the relationship among the Co-
Tenants as other than co-tenants of undivided interests in real
property. 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.
12. To the extent that this agreement binds all Co-Tenants of
the Premises, such covenants are deemed to run with the land and
shall be evidenced in a Co-Tenancy Agreement entered into by any
Co-Tenant with any purchaser of all or any portion of its
interest in the Premises. Except as otherwise provided or
modified herein, Co-Tenants retain all rights otherwise available
under law to any Co-Tenant of an interest in Real Property.
13. Every Co-Tenant shall have a right of first refusal to
purchase the interest of any other Co-Tenant in the Premises,
upon the following limited terms and conditions. If and only
when a Co-Tenant shall give written notice to another Co-Tenant
(and only as to such Co-Tenant receiving such notice) of a desire
to be notified of any proposed sale "Notice of Desire to
Purchase"), Co-Tenants desiring notice of proposed sales of Co-
Tenancy interests shall receive notice of proposed sales of the
interest of the Co-Tenant who has received a Notice of Desire to
Purchase. Any Co-Tenant offering its interest or any portion
thereof for sale ("Selling Co-Tenant") shall first notify all Co-
Tenants who have provided a Notice of Desire to Purchase. Such
notice ("Selling Co-Tenant's Notice") shall give Selling Co-
Tenant's name and address and state a price at which Selling Co-
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
Tenant intends to sell and will sell a specified portion or all
of its interest in the fee simple to the Leased Premises.
If a Co-Tenant shall fail to exercise its Right of First Refusal
as set forth herein, those Co-Tenant's exercising their Right of
First Refusal shall buy all, but not less than all, of the
interest in the Premises offered for sale by the Selling Co-
Tenant, purchasing prorata in proportion that the purchasing Co-
Tenant's interests in the Premises shall bear to one another.
For ten (10) business days (the "Right of First Refusal Period")
following the giving of such notice, a Co-Tenant shall have the
option to purchase such portion of the fee interest of the
Selling Co-Tenant as set forth in Selling Co-Tenant's Notice at
the price in cash stated in the Selling Co-Tenant's Notice. A
written notice addressed to Selling Co-Tenant and signed by the
purchasing Co-Tenant shall be given, in accordance with the
provisions hereof respecting the giving of notice, within the
period set forth above for exercising the Right of First Refusal.
If no Co-Tenant shall exercise its Right of First Refusal,
Selling Co-Tenant shall be free to market its interest in the
Premises after expiration of the Right of First Refusal Period
and shall be free to sell all or any portion of its interest in
the Premises at a price prorata greater than, or equal to, that
which is set forth in the Selling Co-Tenant's Notice.
The above provisions shall not apply to the sale or transfer of a
Co-Tenant's interest in the Premises if such sale or transfer
shall be to an affiliate of the selling or transferring Co-Tenant
or to a trust established by such Co-Tenant for estate planning
purposes.
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Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.
▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇, Trustees of the Wood
Family Trust
dated 3/15/93, as amended 7/9/97.
By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇. Trustee
WITNESS:
/s/ Brae Glensky
Brae Glensky
(Print Name)
By: /s/ ▇▇▇ ▇ ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇, Trustee
WITNESS:
/s/ Brae Glensky
Brae Glensky
(Print Name)
STATE OF California)
) ss
COUNTY OF Santa ▇▇▇▇▇▇▇)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 8th day of May,
2001, ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇, Trustees of the Wood Family
Trust dated 3/15/93, as amended 7/9/97, who executed the
foregoing instrument in said capacity.
/s/ Brae Grensky
Notary Public
[notary seal]
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
AEI Real Estate Fund 85-A Limited Partnership
By: Net Lease Management 85-A, Inc, its corporate general
partner
By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
WITNESS:
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇▇▇
(Print Name)
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 17 day of May, 2001,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Notary Public
[notary seal]
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
Co-Tenant Initial: /s/ SDW /s/ DBW
Co-Tenancy Agreement for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Pie Shops, Inc.
EXHIBIT "A"
Legal Description
(Gresham, Oregon)
PARCEL 1
A tract of land located in the ▇.▇. ▇▇▇▇▇▇ donation Land
Claim in ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇ 3 East of the
Willamette Meridan, in the City of ▇▇▇▇▇▇▇, County of
Multnomah and State of Oregon.
Beginning at the intersection of the Northerly right-of-way
of ▇▇ ▇▇▇▇▇▇▇▇ Road, with the Westerly right-of-way of SE
223rd Avenue, said point being 60 feet from the center line
of ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇) and 45 feet from
the center line of SE 223rd Avenue (County Road No 3807);
thence along the Northerly right-of-way line of ▇▇ ▇▇▇▇▇▇▇▇
Road along the arc of a 11,400 foot radius curve to the
right, an arc distance of 42.88 feet of which the long chord
bears right, an arc distance of 42.88 feet of which the long
chord bears North 67 10' 52" West; thence North 67 04' 24"
West 431.12 feet to the true point of beginning of the
hereinafter described land; thence North 67 04' 24" West
along the Northerly right-of-way line of ▇▇ ▇▇▇▇▇▇▇▇ Road, a
distance of 166.00 feet; thence North 22 55' 36" East 314.07
feet to a point on the Southwesterly right-of-way line of ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇; thence along the Southwesterly line of SE ▇▇▇
▇▇ ▇▇▇▇▇▇ 93.85 feet along the arc of a 761.20 foot radius
curve to the left through a central angle of 7 03' 50" (the
long chord bears South 39 08' 00" East 93.79 feet); thence
along said Southwest right-of-way line South 42 39' 55" East
148.41 feet; thence South 22 55' 36" West 96.80 feet; thence
North 67 04' 24" West 52.00 feet; thence South 22 55' 36"
West 112.00 feet to the true point of beginning.
PARCEL II
A nonexclusive easement for vehicular and pedistrian
ingress, egress and access to and use of parking spaces as
set forth in Easement Agreement recorded October 29, 1997 in
Fee No. 97 167113, over the following described land:
A portion of land located within a parcel, being described
by Deed recorded in Book 2417, Page 1767, Multnomah County
Deed Records; said parcel being in the Southwest one-quarter
of Section 3, township 1 South, Range 3 East, in the City of
▇▇▇▇▇▇▇, County of Multnomah and State of Oregon, said
portion being more particularly described as follows;
Beginning at a point being the most Southwesterly corner of
said parcel, said point also being on the Northerly right-of-
way line of ▇.▇. ▇▇▇▇▇▇▇▇ Street; thence leaving said
Northerly right-of-way line North 22 55' 36" East 112.00
feet; thence South 67 04' 24" East 10.99 feet; thence south
22 55' 36" West 112.00 feet to said Northerly right-of-way
line; thence tracing said Northerly right-of-way line North
67 04' 24" West 10.99 feet to the point of beginning.
TOGETHER WITH a portion that begins at a point that bears
South 22 55' 36" West 31.67 feet from the most Northerly
corner of said parcel; thence South 45 45' 15" East 60.92
feet; thence North 52 37' 55" East 25.65 feet to the
Southerly right-of-way line of N.W. Fairview Drive; thence
tracing said Southerly right-of-way line South 42 39' 55"
East 30.18 feet; thence leaving said Southerly right-of-way
line South 52 23' 08" West 16.19 feet; thence South 36 54'
33" West 115.27 feet; thence South 6 05' 13" East 22.82
feet; thence south 36 41' 37" West 19.45 feet to the
Northerly right-of-way line of ▇.▇. ▇▇▇▇▇▇▇▇ Street; thence
tracing said Northerly right-of-way line North 67 04' 24"
West 32.95 feet; thence leaving said Northerly right-of-way
line North 36 42' 41" East 4.70 feet; thence North 16 02;
36" East 31.02 feet; thence North 37 24' 30" East 95.12
feet; thence North 45 02' 30" West 60.20 feet; thence North
22 55' 36" East 27.11 feet to the point of beginning.