PROPERTY MANAGEMENT AGREEMENT This Agreement is made this ____ day of 200__ between __________ (hereinafter referred to as "Owner") and ______________ (hereinafter referred to as "Manager"). NOW THEREFORE, in consideration of the premises, the parties agree as follows: RECITALS
Owner hereby retains the Manager to manage the Property in accordance with the terms and conditions hereof utilizing trained, experienced personnel and employing the real estate management practices and techniques typical of the industry. COMMENCEMENT DATE: TERM: The term of this Agreement shall commence as of the date hereof and shall continue until such time as either the Owner or the Manager elects to terminate this Agreement, which election shall be in writing and shall be effective on the date which is thirty (30) days after such notice is given, provided however, that the initial minimum term (the "Initial Term") shall be for one (1) year from the date hereof. If the Owner shall elect to terminate this Agreement in accordance with the terms hereof during the Initial Term, provided that the Manager is not in default, the Owner shall pay to the Manager, in addition to all fees due and owing, the termination allowance ("Termination Allowance"). TERMINATION ALLOWANCE: The Termination Allowance shall be calculated as follows:
MANAGER'S RESPONSIBILITIES MANAGEMENT: Manager shall manage, operate and maintain the Property in a manner in substantial conformance with the Annual Business Plan (as defined in Section 3.5 below) prepared by Manager and approved by owner. In performing such duties, manager shall act in a manner consistent with industry standards with respect to the proper protection of and accounting for Owner's assets. Manager shall deal at "arm's length" with all third parties. Manager shall use its best efforts to ensure tenant and Owner compliance with all leases and/or third party agreements. EMPLOYEES; INDEPENDENT CONTRACTOR. Manager shall have in its employ or under independent contract at all times a sufficient number, in manager's discretion, of capable persons to enable it properly, adequately, safely, and economically to manage, operate, maintain and account for the Property. All matters pertaining to the employment, contracting, supervision, compensation, promotion and discharge of such employees or contractors shall be the sole responsibility of Manager.. Manager shall, negotiate with any union lawfully entitled to represent any such employees, if any, and may execute in its own name, and not as agent for Owner, collective bargaining agreements or labor contracts resulting therefrom. Manager shall fully comply with all applicable laws and regulations having to do with worker's compensation, social security, unemployment insurance, hours of labor, wages, working conditions, and other employer-employee related subjects. Manager represents that it is and will continue to be an equal opportunity employer and, to the extent that Manager advertises for employees, will advertise as such. This Agreement is not one of general agency by Manager for Owner, but one with Manager engaged independently in the business of managing properties on its own behalf, as an independent contractor, and in that respect having only limited agency as specifically set forth in this Agreement. All employment arrangements are therefore solely Manager's concern and Owner shall have no liability with respect thereto. No party employed or under contract with Manager shall in any respect be deemed an employee of or under contract with Owner. SCHEDULE OF EMPLOYEES Attached hereto and made a part hereof as "Schedule B" Is a schedule of parties to be employed in the direct management of the Property. Schedule "B" may be amended by Manager from time to time as necessary to reflect changes in personnel; provided, however that the failure to amend "Schedule B" shall not be a default hereunder unless or until the Owner has requested a current list of such employees and Manager has not furnished same within thirty (30) days following the receipt of such request. COMPLIANCE WITH LAWS, MORTGAGES, ETC. Manager, at Owner's expense, shall be responsible for substantial compliance with material federal, state and municipal laws, ordinances, regulations and orders relative to the leasing, use, operation, repair, and maintenance of the Property, and with the rules, regulations, or orders of the local Board of fire underwriters or other similar bodies (collectively, the "Governmental REquirements". Manager shall promptly remedy, at Owner 's expense any violation of any such law, ordinance, rule, regulation or order which comes to its attention and which cure Manager is authorized hereby to perform. Expenses incurred in remedying violations shall be paid from the Operating Account described hereafter provided such expenses do not exceed five Thousand Dollars ($5,000) in any one instance. When more than such amount is required or if the violation is one for which the Property or Owner might be subject to monetary penalty, Manager shall notify owner by the end of the fifth business day following the day Manager has been notified of such violation to the end that prompt arrangements may be made to remedy the violation and to pay for such expense. Manager shall be responsible, at Owner's expense, for full compliance with all terms and conditions contained in any ground lease, space lease, mortgage, deed of trust or other security instruments affecting the Property of which true, correct, and complete copies it has been furnished (collectively, the "Mortgages"). ANNUAL BUSINESS PLAN Manager shall prepare and submit to Owner for Owner's approval an Annual Business Plan for the Property for the promotion, leasing, operations, repair and maintenance of the Property for each calendar year or fiscal year as designated by owner during which this Agreement is in effect. Such Annual Business Plan shall include a detailed budget of projected income and expenses. The Annual Business Plan shall be prepared in accordance with the schedule and requirements of Schedule "C" attached hereto and made a part hereof (which schedule and requirements may be revised by Owner from time to time and at any time, provided that such revisions do not materially or materially increase the Manager's responsibilities hereunder). If Owner does not submit any objections to the Annual Business Plan to Manager in writing within thirty (30) days of submission, Owner shall be deemed to have approved of such Annual Business Plan and waived any future objection thereto. Manager agrees to use diligence and to employ all reasonable efforts to ensure that the actual cost of maintaining and operating the Property shall not exceed the operating budget which is a part of the approved Annual Business Plan (the "Operating Budget") either in total or in any one accounting category. Any expense causing or likely to cause a variance of greater than ten percent (10%) or $200.00 in any one accounting category for the current month shall be promptly explained to Owner by Manager in writing. All expenses must be charged to the proper account as specified in the approved Schedule of Accounts attached hereto and made a part hereof as Schedule "D" and no expense may be classified or reclassified for the purposes of avoiding an excess in the annual budgeted amount of an accounting category. Manager shall secure Owner's prior written approval of any expenditure that will result in an excess of the greater of One Thousand Dollars ($1,000.00) or ten percent (10%) of the annual budgeted amount in any one accounting category of the Operating Budget; provided, however, that owner's consent shall not be required for an excess expenditure that is non-discretionary. Such non-discretionary expenditures shall include, but not be limited to mortgage payments, taxes, utilities and insurance (for the coverages required hereby). During the calendar year or fiscal year, if applicable, Manager shall inform Owner of any increases of decreases in costs, expenses and income that were not reflected in the Annual Business Plan which exceed the greater ten percent (10%) of the estimate included in the Annual Business Plan or $500.00. UTILITIES: Manager shall, on behalf of owner, enter into or renew contracts for electricity, gas, telephone, fuel oil and other necessary utility services for the Property. COLLECTION OF RENTS AND OTHER INCOME Manager shall use diligent efforts to collect all rents and other charges which may become due at any time from any tenant or from others for services provided in connection with or for the use of Property of any portion thereof. Manager shall collect and identify any income due to the Owner from miscellaneous services provided to tenants or the public including, but not limited to, parking income tenant storage, and coin operated machines of all types (e.g., washers, dryers, vending machines, pay telephones, etc.). All monies so collected shall be deposited in the Operating Account. Manager shall inform Owner in advance of its intent to write off any income items. Notwithstanding the foregoing, Manager need not bring a suit to collect monies or evict a tenant unless and until the Owner has agreed to pay the cost of suit, including attorneys fees. COMPETITIVE BIDDING All contracts for repairs, capital improvements, goods, and services except salaries for full time employees shall be awarded at no higher than prevailing market rates and for amounts exceeding Ten Thousand Dollars ($10,000.00) shall, unless otherwise required by Owner, be awarded on the basis of competitive bidding, solicited in the following manner: A minimum of three (3) bids shall be required. Each bid shall be solicited in a form prescribed by Owner, if any, so that uniformity will exist in bid quotes. Manager may accept a low bid without prior approval from owner, if the expenditure is for a budget approved item and will not result in an excess of the annual budgeted accounting category of the applicable approved operating Budget or the Capital Budget ("Budget)" which is a part of the approved Annual Business Plan. Otherwise, approval of a bid may be required by Owner before acceptance. Manager shall not accept other than the lowest bid without the prior approval of Owner. If Manager advised acceptance of other than the lowest bidder, Manager shall adequately support, in writing its recommendations to owner. Owner shall be free to accept or reject any and all bids. Manager may request Owner, but Owner is not compelled, to waive competitive bidding rules. Owner shall pay for all expenses of such bidding procedure and may pay for such expenses from its own resources or may authorize payment by Manager out of the Operational Account. Expenses incurred under this Section 3.8 shall not be charged to any account category. REPAIRS The Manager shall, at Owner's expense, attend to the making and supervision of all ordinary and extraordinary repairs, replacements, additions, improvement, maintenance, decorations and alterations, subject to the limits of the approved Annual Business Plan including expenditures to refurbish, rehabilitate, remodel, or otherwise prepare areas covered by new ].eases. Such activities shall be performed to the end that the Property is maintained and furnished as a first-class apartment project so long as adequate funds are available. To the extend that such work requires the services of an architect or licensed contractor, the cost to do same shall include the architect's or contractor's fees. All such activity shall be made with as little hindrance to the operation of the property as is reasonably possible. In case of an emergency, manager nay make expenditures for repairs which exceed the limits described in this Section 3 without prior written approval if it is necessary to prevent damage to the Property, injury to persons or damage to the property of third parties. Owner must be informed of any such expenditures before the end of the next business day. CAPITAL IMPROVEMENTS The approved Annual Business Plan constitutes authorization for Manager to expend money for authorize Capital projects. With respect to the purchase and installation of major items (cost in excess of Twenty-Five Thousand Dollars ($25,000.00)) and new or replacement equipment, Manager shall recommend that owner purchase those items when Manager believes such purchase to be necessary or desirable. Owner may arrange to purchase and install the same itself or may authorize manager to do so subject to prescribed supervision and specification requirements and conditions. The competitive bid rules outlined in this Section 3 will be observed in all capital projects involving in excess of Twenty-Five Thousand Dollars ($25,000.00). SERVICE CONTRACTS The Manager shall not enter into any contract ( or contracts if they are for a substantially similar purpose) for cleaning, maintaining, repairing or servicing the Property or any of its constituent parts that requires annual payments in excess of five percent (5%) of the amount approved in appropriate budget category of the Annual Business Plan without prior written consent of owner. As a condition to obtaining such consent, Manager shall supply owner with a copy of the proposed contract and shall state to Owner the relationship, if any, between Manager (or the person or persons in control of Manager) and the party proposed to supply such goods or services, or both. All service contracts shall: (a) be in the name of, and executed by, the Manager; (b) be assignable, at Owner's option, to owner's nominee; (c) include a provision for cancellation thereof by owner, without the payment of any premium, fee or penalty, upon not more than thirty (30) days' written notice (any exception to this provision must have the prior written consent of Owner); and (d) shall require that all contractors provide evidence of insurance sufficient to meet the requirements of section 4.3. Unless Owner specifically waives such requirements either by memorandum or as an amendment to the contract, all service contracts shall be subject to bid under procedure as specified in this Section 3. TAXES, MORTGAGES TAXES Manager shall obtain and verify bills for real estate and personal property taxes, improvement assessments, water rent and other like charges which are, or may become a lien against the Property and recommend payment or appeal as in its best judgement it shall determine. Such recommendations shall be supported by Manager's completion of data on the assessments on comparable properties determined on a net rentable, usable or gross building area basis. manager shall, etc) the extent funds are available in the operating account pay such bills promptly avoiding penalty for late payment and taking advantage of discounts. In the event that any tax is due or imposed in respect to any such payments and such tax is the obligation of Owner, Manager shall make 'the required tax payment after verification of the amount due. When requested by owner, Manager shall, without charge, except for out-of-pocket expenses (which may include an appropriate tax consultant), render advice and assistance to Owner in the negotiation and prosecution of all claims for the abatement of property taxes and other taxes affecting the Property, for awards for any taking by eminent domain affecting the Property, and all other government regulations affecting the Property which Owner elects to contest. MORTGAGES Following Owner's written request, Manager shall make all payments on or before the due date therefor required under any Mortgage, provided a copy of any such Mortgage has previously been delivered by owner to Manager, and provided further that funds adequate for such payments are in the Operating Account. Subject to the provisions hereof, Manager shall deliver to Owner, not later than the due date, evidence that such Mortgage payments have been made, and perform all covenants (which manager has the authority hereunder to perform) required to be performed or observed by Owner under any such Mortgage. USE AND MAINTENANCE OF PREMISES Manager agrees not to knowingly permit the use of the Property for any purpose which might void any policy of insurance relating to the Property or which might render any loss thereunder uncollectible or which would be in violation of any Governmental Requirement. OTHER Manager shall be expected to perform such other acts and deeds as are reasonable, necessary and proper in the discharge of its duties under this Agreement so long as such acts and deeds are authorized hereby. NOTICE TO OWNER Manager shall promptly notify Owner: (a) in the event that the condition of the Property or any part thereof fails (to the knowledge of the Manager) to meet the standards of the Mortgage or any other agreement relating to the Property, or to meet the standards of the Governmental Requirements; (b) upon receipt by Manager of any notice, demand or similar communication with respect to any obligation of Owner under the Governmental Requirements, the Mortgage, or other agreement involving Owner, the Property, or any portion thereof; (c) upon receipt by Manager of any summons, notice, demand or similar communication regarding any action at law or in equity or before any regulatory body in connection with or involving Owner, the Property, or any portion thereof; (d) upon receipt by Manager of any notice or communication from an insurance carrier regarding insurance coverages or the insurability of the Property; or (e) upon receipt by manager of any notice or communication of any nature, written or oral, which, in the opinion of Manager may have a material adverse effect on the Owner or the Property. ADEQUATE FUNDS Wherever the Manager is obligated to make a payment, and such obligation is qualified by there being adequate funds for such payments, the Manager shall halve the right to choose which payments are made and shall have' no liability for preferring one creditor over another. INSURANCE OWNER'S INSURANCE The Owner, as a property operating expense, shall obtain and keep in force insurance against physical damage (e.g., fire with extended coverage endorsement, boiler and machinery, etc.) and against liability for loss, damage or injury to property or persons which might arise out of the ownership Or occupancy or the Property in the following amounts: All-Risk Hazard Insurance - $ ; and, General Public Liability- $ ; Manager shall furnish whatever information is reasonably requested by Owner for the purpose of establishing the placement of insurance coverages and shall aid and cooperate in every reasonable way with respect to such insurance and any loss thereunder. Owner shall include in its hazard policy covering the Property, personal property, fixtures and *equipment located thereon, and manager shall include in any fire policies for its furniture, furnishings or fixtures situated at each Property, appropriate clauses pursuant to which the respective insurance carrier shall waive all rights of subrogation with respect to losses payable under such Policies. MANAGER'S INSURANCE The Manager shall maintain, at its expense, insurance coverage in the following minimal amounts:
SUBCONTRACTOR'S INSURANCE Manager shall require that all parties, except for lawn and pool maintenance, performing work on or with respect to the Property, including, without limitation, subcontractors and service vendors, maintain insurance coverage at such parties, expense, in the following minimum amounts:
The limits provided for in this Section 5 may be increased from time to time and at any time upon mutual consent of the Owner and the Manager to give effect to increases in current liability exposure and inflationary cost increases;. changes in the amounts and types of insurance provided for hereunder shall be made as part of the Annual Business Plan. INDEMNIFICATION. Each party hereto shall defend and save the other harmless from any liability on account of loss, damage or injury arising out of the other's gross negligence or willful misconduct, provided; The indemnified party (the "Indemnified Party") promptly notifies the indemnifying party (the "Indemnifying Party") and the insurance carrier after the Indemnified Party receives notice or becomes aware of any such loss, damage, or injury. The Indemnified Party cooperates completely with the indemnifying Party and its insurers in the defense of such injury or claims. The Indemnified Party and its employees, contractors and agents take no action (such as admission of liability) which might bar the indemnifying Party from obtaining any protection afforded by an policy the Indemnifying Party may hold or which might prejudice the Indemnifying Party in its defense to a claim based on such loss, damage or injury. The Indemnified Party is not in breach of its responsibilities under this Agreement. Notwithstanding anything to the contrary contained in this section 5, neither party shall be required to indemnify the other for or defend or hold it harmless from any claims, actions or proceedings resulting from acts or omissions which: (a) constitute gross negligence or willful misconduct on the part of the Indemnified Party, its employees, agents, guest, invitees or contractors; (b) are outside the scope of Indemnified Party's authority or responsibility hereunder; (c) are in breach of any duties hereunder; or (d) constitute intentional torts on the part of the Indemnified Party, its employees, agents, guest, invitees or contractors. Manager agrees that Owner shall have the exclusive right, at its option, to conduct the defense to any claim, demand or suit within limits prescribed by the policy or policies of insurance required by this Agreement. The provisions of this Section shall survive the expiration or termination of this Agreement. it is the intention of the parties that this indemnity merely requires establishing liability by a court of competent jurisdiction or by settlement agreed to by both parties and does not require payment as a condition precedent to recovery by the Indemnified Party under this indemnity. To the extent permitted by law each party, one to the other, waives the right of subrogation that any insurance company may have by reason of having paid an insured claim with respect to this Agreement on the Property. FINANCIAL REPORTING AND RECORD KEEPING BOOKS OF ACCOUNTS Manager shall maintain adequate and separate books and records for the Property, the entries to which shall be supported by sufficient documentation to ascertain that said entries are accurate. Such books and records shall be maintained by Manager at Manager's offices located at ______________________* or at such other location as may be mutually agreed upon in writing. Manager shall ensure such control over accounting and financial transactions as is reasonably required to protect Owner's assets from theft, negligence or fraudulent activity on the part of Manager's employees or other agents. FINANCIAL REPORTS The Manager shall furnish reports of all transactions occurring from the 1st day of the month to the last day of the month. These reports are to be received by Owner no later than twenty (20) calendar days after the end of each month. In addition, Manager shall furnish a summary report of all transactions occurring within each calendar year, which summary report shall be delivered to Owner within forty-five (45) days of the end of each calendar year. All such reports must show all collections, delinquencies, uncollectible items, vacancies, and other matters requested by owner pertaining to the management, operation, and maintenance of the Property during the month. The reports shall include any other items specified in the Annual Business Plan. Manager shall prepare such information on forms reasonably acceptable to owner to facilitate the input of financial information into the Owner's accounting system. Manager shall provide Owner with such other reports, summaries, projections, estimates and information as owner shall reasonably request. In addition, Manager shall cooperate to the extent reasonably possible with the owner's accountants in the preparation of annual financial statements (and related management letters). Such annual financial statement and management letters are to be issued within one hundred twenty (120) days after the end of each fiscal year. SUPPORTING DOCUMENTATION: As additional support to the monthly financial statements, Manager shall, at Owner's reasonable request and at Owner's cost, not more often than quarter annually, provide copies of the following: All bank statements, bank deposit slips and bank reconciliations, Detailed cash receipts and disbursement records, General ledger listing (periodically, Owner may request copies of all invoices paid during a specific period); All invoices for capital expenditures and non-recurring items, Summaries of adjusting journal entries; and Copies of paid bills. In addition, Manager shall maintain the following items for inspection in its offices: *Detailed trial balance (if available); and *Supporting documentation for payroll, payroll taxes and employee benefits. TRANSFER OF FUNDS All cash balances shall be maintained by Manager in the Operating Account to be used in accordance with the terms and provisions of this Agreement. To the extent that funds are available, all operating expenses shall be paid by Manager from the Operating Account. Each month Manager shall pay all operating expenses, its management fee and then remit the excess remaining, if any, to Owner by the twentieth day of the following month. Checks for remittances should be delivered to Owner, independent of required financial reports, in the most expeditious manner possible. The schedule for transfer of funds and balance permitted to remain in the Operating Account (as hereinafter defined) may be changed from time-to-time by the mutual agreement of the parties. ACCOUNTING PRINCIPALS All financial statements and reports required by Owner shall be prepared in accordance with generally accepted accounting principles with the exception that owner may specify that the statements be prepared on a cash basis. OWNER'S PROPERTY All books, records, invoices and other documents received by Manager pursuant to its obligations hereunder shall be the property of Owner and shall be promptly delivered to Owner upon termination hereof. FAILURE TO MAINTAIN RECORDS The failure by the Manager to maintain the books and records shall not result in consequential damages to the Owner unless such failure is due to gross negligence and willful misconduct. OWNER'S RIGHT TO AUDIT The Owner reserves the right for Owner's employees or other agents appointed by Owner, to conduct examinations during regular business hours, upon twenty-four (24) hours' notice to Manager, of the books and records maintained for Owner by Manager. Owner also reserves the right to perform any and all reasonable additional audit tests relating to Manager's activities either at the Property or at any office of the Manager provided such audit tests are related to those activities performed by Manager for Owner, and further provided that such examinations do not interfere with the other business of the Manager. Should Owner's employees or appointees discover either weaknesses in internal control as established by generally accepted accounting standards or errors in record keeping, Manager shall correct such discrepancies either upon discovery or within a reasonable period of time after notice from Owner specifying such weaknesses or errors. Manager shall inform Owner, in writing, of the action taken to correct such audit discrepancies. Any and all audits conducted either by Owner's employees or appointees will be at the sole expense of Owner. BANK ACCOUNTS OPERATING ACCOUNT The Manager shall deposit all rents and other funds collected from the operation of the Property, including any and all advance rents, in a bank or banks designated by manager and approved by owner in its reasonable discretion, in a special account or accounts (the "Operating Account") for the Property. Owner shall be given written notice of each such account number and location. If more than one account is required to operate the Property, each account shall have a distinct name. The funds in the Operating Account shall be segregated from all funds of Manager. Manager shall be entitled to draw against the Operating Account for Operating Budget items upon the signature of two or more duly authorized bonded employees of Manager, one of which shall be an authorized officer of Manager approved by the Owner. All disbursements for capital expenditures shall be made directly by Owner to Manager upon receipt of a written request for same by Manager supported by original invoices or other documents as required by Owner. Funds advanced for capital expenditures shall be accounted for separately from operating funds and shall be disbursed by Manager to the respective vendors. SECURITY DEPOSIT ACCOUNT Unless otherwise required by law, a separate none interest bearing account shall be opened by the Manager at a bank designated by Manager which has been approved by the Owner in its reasonable discretion for tenant security accounts. CHANGE OF BANKS The Owner may direct Manager to change a depository bank or the depository arrangements for any reasonable business purpose agreed upon by the parties. ACCESS TO ACCOUNTS Through the use of signature cards, authorized representatives of the Owner shall be permitted access to any and all funds in the bank accounts described in this Agreement; provided, however, that the Owner shall give prior written notice of its intention to draw upon such account and shall not draw money from such account, which is to be used for salary, FICA taxes, Social Security payments or any other payment which Manager is obligated to make pursuant to this Agreement. The Manager's authority to draw against such accounts may be terminated at any time by the Owner after ten (10) days prior written notice to the Manager. PAYMENT OF EXPENSES EMPLOYMENT COST TO BE REIMBURSED The Owner shall reimburse the Manager for the total compensation and related expenses of any of Manager's employees who are stationed at the Project and do work solely for the Project if such compensation and related expenses are set forth in the Annual Business Plan approved by the Owner. It is agreed that costs of such related expenses shall include cost of group insurance at the single employee rate for Manager's policies, and the employer's pro rata share of FICA taxes, state and federal unemployment assessments and worker's compensation premiums or assessment, which may be payable based on the gross pay and taxable income of employee. Manager shall preserve all records supporting the basis for such charges to Owner, and shall, prior to reimbursement, submit this documentation to the Owner upon request. All matters pertaining to the employment of such employees are the responsibility of Manager, who shall be, in all respects, the employer of such employees and who shall fully comply with all applicable laws and regulations affecting the employer/employee relationship, including, without limitation, laws and regulations having to do with payroll withholdings, worker's compensation, discrimination, social security, unemployment insurance, hours of labor, wages, and working conditions. Since this Agreement is not one of agency by Manager for Owner but one with Manager engaged independently in the business of managing properties on its own behalf, all employment arrangements are therefore solely its concern. COSTS ELIGIBLE FOR PAYMENT FROM OPERATING ACCOUNT The Manager may and shall pay the following expenses directly from the Operating Account subject to the conditions outlined earlier in this Agreement under the heading of "Manager's Responsibilities" Costs to correct any violation of Federal, State and Municipal laws, ordinances, regulations and orders relative to the leasing, use, repair and maintenance of the Property, or relative to the rules, regulations or orders of the local Board of Fire Underwriters or other similar body, provided that such costs are not the result of Manager's gross negligence or willful misconduct. Actual and reasonable costs of making all repairs, decorations and alterations, provided that such cost is not the result of Manager's gross negligence or willful misconduct. Costs incurred by Manager in connection with all service agreements approved by Owner. Cost of collection of delinquent rentals collected through a collection agency. Reasonable legal fees of attorneys. Cost of capital expenditures subject to the restrictions outlined earlier in this Agreement under the heading of "Manager's Responsibilities" Cost of printing checks for each bank account required by Owner Leasing commissions and consultant fees payable by Owner to third parties Cost of service contracts and cost of utilities The cost of advertising and promotional activities Cost of printed forms and supplies required for use at the Property. Cost of long distance telephone charges and special postage charges. The cost of travel expenses for Property supervision and training seminars incurred by Manager or its employees in connection with the Property. NON-REIMBURSABLE COSTS The following expenses or costs incurred by or on behalf of Manager in connection with the management of the Property shall be at the sole cost and expense of Manager and shall not be reimbursed by owner: The of gross salaries and wages, payroll taxes, insurance, worker's compensation, and other benefits of Manager's management, accounting and office personnel and independent contractors. General accounting and reporting services which are considered to be within the reasonable scope of the Manager's responsibility to Owner. The cost of forms, paper, ledgers, and other supplies and equipment used in Manager's office at any location off the Property. The cost of electronic data processing equipment, or any pro-rata charge thereon, whether located at the Property or at Manager's office off of the Property. The cost of electronic data processing, or any pro-rata charge thereof, for data processing provided by computer service companies. Political or charitable contributions. Cost of advances made to employees and travel by Manager's employees or agents to and from the Property except for supervisory personnel. Costs attributable to losses arising from gross negligence, willful misconduct or fraud on the part of Manager, Manager's associates or Manager's employees. Cost of comprehensive crime insurance or fidelity bonds purchased by the Manager for its own account. Employment fees (unless specifically approved by the Owner). Advertising expenses of Manager except for help wanted advertising in connection with the Property. Any expenses of Manager's principal or branch offices. Any part of Manager's capital expenses. Manager's overhead or general expenses. OPERATING ACCOUNT PRIORITIES Items shall be paid out of the Operating Account in the following order of priority: First, bills and charges which could become a lien againstthe Property. Second, bills and charges, if any, incurred by Manager for Manager's services provided to Owner exclusive of Manager's fee. Third, the Management Fee payable to the Manager described in the Section of this Agreement labeled "Compensation". Fourth, bills and charges of third parties STATEMENT OF UNPAID ITEMS After the Manager has paid, to the extent of available gross income, all bills and charges based upon the ordered priorities set forth in above paragraphs, the Manager shall submit to Owner a statement of all remaining unpaid bills, which Owner shall promptly provide funds for. STATEMENT OF ACCOUNTS In each instance where Manager manages several properties for Owner, the Manager shall segregate the income and expenses of each property so that gross income from each property will be applied only to the bills and charges from such property. SALE OF PROPERTY COOPERATION WITH SALES BROKER If the Owner executes a listing agreement with a broker (other than Manager) for the sale of the Property, the Manager shall cooperate with such broker to the end that the respective activities of the Manager and the broker may be carried on without interference with tenants and occupants. Manager shall permit the broker to exhibit the Property during reasonable business hours provided that the broker has secured the Manager's permission in advance. EXECUTION OF INQUIRY MEMORANDUM In the event that the Owner elects to sell the Property, the Manager agrees: (a) to assist Owner in the evaluation of the truth, correctness and completeness of any and all facts (collectively, "Representations") requested by a prospective buyer concerning the Property, its operation, maintenance repair, servicing and compliance with Governmental Requirements; (b) to conduct a good faith review of its files to determine which Representations can be made and to disclose to the buyer which Representations can be made; and (c) to execute and deliver to the Owner (Owner shall be entitled to deliver an *original thereof to said buyer) an inquiry memorandum which identifies the Manager's role in ascertaining the truthfulness of the Representations, which confirms or rejects the truthfulness of the Representations based upon the Manager's investigations and which includes other information reasonably requested by the Owner; Provided, however, that the Manager shall have no liability with respect to the foregoing. COOPERATION Should any claims, demands, suits or other legal proceedings be made or instituted by any person against Owner which arise out of any of the matters relating to this Agreement, the Manager shall give the Owner all pertinent information possessed by Manager and reasonable assistance in the defense or other disposition thereof. COMPENSATION The Manager shall receive renumeration for its services in managing the Property in accordance with the terms and tenor of this Agreement as follows: Manager's renumeration shall be payable in arrears and equal to twenty Dollars Per Unit Per Month times ____ units which equals $____* per month (the "Management Fee"). Any excise or sales taxes due or imposed upon payment of such fee shall be the responsibility of Owner. TERMINATION TERMINATION UPON SALE OR DESTRUCTION This Agreement shall terminate thirty (30) days after written notice by Owner to Manager of: (a)a sale of the Property by Owner to any person or entity other than an Affiliate (an entity owning or controlling, owned or controlled by, or under common control with Owner); (b) the substantial destruction of the Property; or (c) the taking, by eminent domain, of a substantial part of the Property. AUTHORITY TO EXECUTE TERMINATION NOTICES Notice of termination shall be signed by an officer or other authorized agent of the Owner. TERMINATION BY OWNER (a) Termination or suspension of Manager's real estate brokerage license, if such license is required as a condition to managing the Property; or (b) complete cessation on Manager's part to do business, or (c) bankruptcy, insolvency, or assignment for the benefit of the creditors of Manager shall, at the sole election of Owner, effect a termination of this Agreement thirty (30) days after written notice from the Owner to the Manager. TERMINATION FOR CAUSE The Owner may terminate this Agreement at any time during the term hereof for any of the following causes: Manager fails to pay any material sum payable when sufficient funds are available in the Operating Account under this Agreement when due or fails to perform or comply with any of its obligations hereunder at the time or times and in the manner required under this Agreement provided that the Owner first gives the Manager thirty (30) days written notice of such default or breach and the Manager, when the default or breach is the failure to pay a sum payable hereunder, fails to pay such sum within five (5) days thereafter, and when the default or breach is other than the failure to pay a sum payable hereunder, fails to commence curing such default or breach within five (5) days, or after commencing the same fails to diligently pursue the curing of such default to completion within ten (10) days after commencement of the cure; or A default occurs under any Mortgage caused by Manager's act or omission or commission which occurrence is not timely cured by the Manager. FINAL ACCOUNTING Upon termination of this Agreement, the Manager shall deliver to the Owner within thirty (30) days: A final accounting, reflecting the balance of income and expenses of the Property as of the date of termination or withdrawal, to be delivered within thirty (30) days after such termination. Any balance or monies of the Owner or tenant security deposits, or both, held by the Manager with respect to the Property, to be delivered immediately upon such termination. All keys, garage cards, parking permits and passes, records, contracts, lease, receipts or deposits, unpaid bills and other papers or documents which pertain to the Property, to be delivered immediately upon such termination. Upon such termination, the Owner will assume responsibility for payment of all approved or authorized unpaid bills. OBLIGATION TO VACATE Upon termination of this Agreement, the Manager shall promptly vacate any office space provided by the Owner for the location of Manager's personnel, and shall restore any such office space to the same condition that it was in at the time such space was first provided to Manager. SUBSIDIARIES AND AFFILIATES Any contract or lease of any kind whatsoever between Manager and any other person, corporation or other entity owned or controlled by the Manager with respect to the Property shall be subject to the prior written approval of owner. NOTICES All notices, demands, consents and reports provided for in this Agreement shall be in writing and shall be given to the Owner or Manager at the addresses set forth below or at such other address as they individually may specify thereafter in writing: OWNER: MANAGER: Such notice or other communication may be mailed by United States registered or certified mail, return receipt requested, postage prepaid and may be deposited in a United States Post Office or a depository for the receipt of mail regularly maintained by the post office. Such notices, demands, consents and reports may also be delivered by hand. For purposes of this Agreement, notices will be deemed to have been "given" upon personal delivery thereof or forty-eight (48) hours after having been deposited in the United States mail as provided above. OWNER'S PERFORMANCE OF MANAGER'S OBLIGATION In the event that the Manager fail to perform any of its obligations and undertakings hereunder, the Owner may, after giving Manager ten (10) days' notice thereof (unless such default creates an emergency in Owner's judgment, in which case no notice need be given by owner), perform any of Manager's obligations (including payment of any monies due) and Owner shall be immediately reimbursed by the Manager for any monies so expended (to the extent there are funds in the Operating Account); provided, however, that any part of such monies expended by Owner which represent penalties, interest or Owner's expenses or costs (including attorney's fees) incurred wholly or in part by reason of Manager's default under this Agreement shall not be charged to the Operating Account, but shall be paid by Manager to Owner. Any performance by Owner of any obligation of Manager hereunder shall not be deemed a waiver by Owner of any other right or remedy that the Owner has under this Agreement or in law or equity by reason of such default or waiver of any such rights or remedies that the Owner has by reason of a future default by the Manager. MISCELLANEOUS NO ASSIGNMENT The Owner has entered into this Agreement in reliance upon the experience and ability of the Manager and, therefore, this Agreement and all rights hereunder, shall not be assignable by the Manager without the prior written consent of the Owner. CONSENT AND APPROVALS The Owner's consents or approvals may be given only by representatives of the Owner from time to time designated in writing by the Owner. All such consents or approvals shall also be in writing. PRONOUNS The pronouns used in this Agreement referring to Manager shall be understood and construed to apply whether Manager be an individual, partnership, corporation or any other entity or individual or individuals doing business under a firm or trade name. AMENDMENTS Except as otherwise herein provided, any and all amendments and additions or deletions to this Agreement shall be null and void unless approved by both parties in writing. HEADINGS All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of this Agreement. TIME IS OF THE ESSENCE Time is of the essence in this Agreement. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. NO ADVERTISING No publication, announcement or other public advertisement of Owner's name in connection with the Property shall be made by the Manager, except in connection with leases or agreements entered into by the Manager in the Owner's name as expressly provided for herein, or as may be required by applicable law. SEVERABILITY Every provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such provision shall be severed from the Agreement and shall not affect the validity of the remainder of this Agreement. RELATIONSHIP OF THE PARTIES The Manager is an independent contractor hired by the Owner pursuant to the terms hereof. Nothing contained in the Agreement, nor any acts of the parties hereto, shall be deemed or construed by the parties hereto, or either of them, or any third part, to create: (a) a principal and agent relationship (except as specifically provided above); or (b) a partnership or a joint venture, between the parties hereto. NO THIRD PARTY BENEFICIARIES The Owner and Manager acknowledge that this Agreement is solely for their own benefit and, except as provided in cases where assignment is permitted herein, that no third party shall have any rights or claims arising hereunder. WAIVER, ENTIRE AGREEMENT No modification, amendment, discharge or change of this Agreement, except as otherwise provided herein, shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, amendment, discharge or change is sought. No waiver of any breach of any covenant, condition or agreement contained herein shall be construed to be a subsequent waiver of that covenant, condition or agreement or of any subsequent breach thereof or of this Agreement. INTERPRETATION In interpreting this Agreement, the provisions in the Agreement shall not be construed against or in favor of either party on the basis of which party drafted this Agreement. ATTORNEY'S FEES In the event that either party hereto institutes legal action against the other party to interpret or enforce this Agreement or to obtain damages for any alleged breach hereof, the prevailing party in such action shall entitled to an award of reasonable attorneys' fees. REPRESENTATIONS The Manager represents and warrants that it is fully qualified and licensed. COMPLETE AGREEMENT This Agreement and the attached Schedules supersedes and takes the place of any and all previous management, leasing and consulting agreements between the parties hereto relating to the Property. IN WITNESS WHEREOF, the parties hereto agree to the above terms and have caused this Agreement to be executed in their names either by themselves or by their duly authorized officers. MANAGER By____________________________ date:___________ President OWNER By____________________________ date:___________ President |