PROPERTY CO-TENANCY
OWNERSHIP AGREEMENT
(Rio Bravo-St. Xxxx, MN)
THIS CO-TENANCY AGREEMENT,
Made and entered into as of the 29th day of Oct, 1998, by and
between Xxxx Xxx Xxxxxxxx, Trustee of The Xxxx Xxxxxxxx Trust,
dated 4/26/85 (hereinafter called "Xxxxxxxx"), and AEI Real
Estate Fund 85-A Limited Partnership (hereinafter called "Fund 85-
A") (Xxxxxxxx, 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 15.1443% interest
in and to, and Xxxxxxxx presently owns an undivided 11.5653%
interest in and to, and Xxxx X. Xxxxx and Atsuka Obata, Trustees
of the Xxxx X. and Atsuka Obata Revocable Trust presently owns an
undivided 16.0589% interest in and to, and Xxx X. Xxxxx, Trustee
of That Certain "Living Trust" presently owns an undivided
16.0589% interest in and to, and W.E. Xxxxx and Xxxxx Xxxxx,
Trustees of the Xxxxx Living Trust presently owns an undivided
12.5821% interest in and to, and Xxxxxx X. Xxxx Family Trust
presently owns an undivided 17.1199% interest in and to, and Xxxx
XxXxxx, Inc. presently owns an undivided 11.4706% interest in and
to the land, situated in the City of St. Xxxx, County of Xxxxxx,
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 Morrison'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 Xxxxxxxx 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 Xxxxxxxx. As long as Fund 85-A owns an
interest in the Premises, only Fund 85-A may obligate Xxxxxxxx
with respect to any expense for the Premises.
Co-Tenanct Initial: /s/ JAM
Co-Tenancy Agreement for Rio Bravo-St. Xxxx, MN
As further set forth in paragraph 2 hereof, Fund 85-A agrees to
require any lessee of the Premises to name Xxxxxxxx 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
Xxxxxxxx under this Agreement, and may pay to itself the amount
of Morrison's share of any reasonable expenses of the Premises
which are not paid by Xxxxxxxx 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
Morrison'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.
Xxxxxxxx has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund 85-A in the amount
of $591 for the expenses, direct and indirect, incurred by Fund
85-A in providing Xxxxxxxx with quarterly accounting and
distributions of Morrison's share of net income and for tracking,
reporting and assessing the calculation of Morrison's share of
operating expenses incurred from the Premises. This invoice
amount shall be pro-rated for partial years and Xxxxxxxx
authorizes Fund 85-A to deduct such amount from Morrison's share
of revenue from the Premises. Xxxxxxxx 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 Xxxxxxxx
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, Xxxxxxxx shall
be entitled to receive 11.5653% 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
Co-Tenanct Initial: /s/ JAM
Co-Tenancy Agreement for Rio Bravo-St. Xxxx, MN
exist, need to be made to the Premises, the Co-Tenants, upon
receipt of a written request therefor 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. Xxxxxxxx agrees to
notify Fund 85-A upon the appointment of any successor trustee,
or any amendment of the Xxxxxxxx Trust affecting the powers of
the Trustees to manage or dispose of the Xxxxxxxx Trust's
interest in the Premises.
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
00 X. Xxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
If to Xxxxxxxx:
Xxxx Xxx Xxxxxxxx
00000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
If to Obata:
Xxxx X. and Xxxxxx Xxxxx, Trustees
000 Xxxxxxxxxx
Xxxxxx, XX 00000
Co-Tenanct Initial: /s/ JAM
Co-Tenancy Agreement for Rio Bravo-St. Xxxx, MN
If to Obata:
Xxx X. Xxxxx, Trustee
0000 Xxx Xxxxx
Xxxx X
Xxxxxx, XX 00000
If to Xxxxx:
Xxxxx Living Trust
000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
If to Xxxx
Xxxxxx X. Xxxx Family Trust
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
If to XxXxxx:
Xxxx XxXxxx Francesco
X.X. Xxx 000
Xxxxxxx, 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.
Co-Tenanct Initial: /s/ JAM
Co-Tenancy Agreement for Rio Bravo-St. Xxxx, 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.
XXXXXXXX XXXX XXX XXXXXXXX, TRUSTEE OF THE XXXX XXXXXXXX TRUST,
DATED 4/26/85
By:/s/ Xxxx Xxx Xxxxxxxx
Xxxx Xxx Xxxxxxxx, Trustee
STATE OF CALIFORNIA)
) ss
COUNTY OF LOS ANGELES)
I, a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 27th day of October,
1998, Xxxx Xxx Xxxxxxxx, Trustee of The Xxxx Xxxxxxxx Trust, who
executed the foregoing instrument in said capacity.
/s/ Xxxxx Xxxxxxxx
Notary Public
[notary seal]
Co-Tenanct Initial: /s/ JAM
Co-Tenancy Agreement for Rio Bravo-St. Xxxx, 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/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
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 29th day of October,
1998, Xxxxxx X. Xxxxxxx, 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/ Xxxxx X Xxxxxx
Notary Public
[notary seal]
Co-Tenanct Initial: /s/ JAM
Co-Tenancy Agreement for Rio Bravo-St. Xxxx, MN
EXHIBIT "A"
Those parts of Lots 5,6 and 7 and Lots B, I and J, all in
Xxxx'x Rearrangement, St. Xxxx, Minn., according to the
recorded Partnership thereof, Xxxxxx 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 Xxxxxxx Xx. 00; thence South 89 degrees 53
minutes 38 seconds West along said Northerly right-of-way
line of Xxxxxxxxxx Xxxxxxx Xx. 00 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 Xxx 0, Xxxx'x Xxxxxxxxxxxxx, Xx. Xxxx, Xxxx.,
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.
