PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT (“Agreement”) is made and entered into effective as of the ____ day of December, ______ (the “Effective Date”), by and between [*] (“Owner”), and [*] (“Manager”).
WHEREAS, Owner is the owner of certain real property and improvements thereon, located in [*] and known as [*] (the “Property”), as more particularly described on Exhibit A attached hereto; and
WHEREAS, Owner and Manager desire that Manager undertake and perform management functions relating to the Property.
NOW THEREFORE, in consideration of the covenants, terms and conditions hereinafter set forth, parties agree as follows:
APPOINTMENT AND ACCEPTANCE
Owner hereby appoints Manager, and Manager hereby accepts appointment, as Owner’s manager and agent to direct, supervise, manage, operate, lease and maintain the Property. Owner acknowledges and agrees that for period not to exceed one hundred twenty (120) days from the date hereof, Manager may enter into an agreement with [*], an affiliate and a member of Manager, pursuant to which [*], will provide necessary employees to perform the services and discharge the duties of Manager hereunder; provided, nothing contained in this Article 1 shall relieve Manager of its duties and obligations hereunder.
AUTHORITY AND DUTIES
Manager hereby agrees to, and Owner hereby grants to Manager the authority to do the following
1.1 Leasing. Manager shall have the authority and exclusive right to solicit and negotiate leases (together with all renewals and extensions thereof the “Leases”) for all available leasable space at the Property with existing and prospective tenants, and Manager shall use its reasonable best efforts to lease such space. Owner shall refer all inquiries for leases or renewals to Manager, and all negotiations for leases and renewals shall be conducted or controlled by Manager.
(1) In order to promote the leasing of the Property, Manager may engage in such activities as Manager deems appropriate, including, without limitation: placing newspaper advertising, posting rental signs, preparing circulars, and engaging in other forms of advertising all at Owner’s expense. In its discretion and from time to time, Manager shall have the right to make concessions including rental discounts, as inducements to prospective tenants to occupy the Property.
(2) Manager may cause references of prospective tenants to be investigated on behalf of Owner, and Manager is authorized to utilize the services of [*] locator services at Owner’s expense.
(3) Manager shall not enter into a Lease having a term in excess of twelve (12) months.
1.2 Employment of Personnel. Manager shall have the sole authority to hire, supervise and discharge, on behalf of Owner, all employees and/or independent contractors considered by Manager as necessary for the efficient operation of the Property. All salaries, wages and other compensation of on-site personnel employed by Manager hereunder, including, but not limited to, medical and health insurance, pension plans, payroll related taxes and Worker’s Compensation Insurance shall be paid by Manager on behalf of and as agent for Owner. All such salaries, wages, compensation and fringe benefits shall be Owner’s expenses, and Owner shall reimburse Manager for the cost thereof. Manager shall not be liable to Owner or to others for any act or omission on the part of any employee, provided Manager has exercised reasonable care in their employment. Any employees who handle or are responsible for the safekeeping of Owner’s funds shall, at Owner’s request, be bonded by fidelity bond. The amount of any such bond will be determined by Owner, and Owner shall pay or reimburse Manager for the cost thereof.
1.3 Collection and Enforcement. Manager shall use its reasonable best efforts to enforce the tenant’s obligations under the Leases and to require compliance with the terms of the Leases on the part of the tenants and occupants. At the expense of Owner, Manager shall take such actions as may be necessary to enforce Owner’s rights under the Leases.
(1) Manager shall use its reasonable best efforts to collect all rents and other charges payable by tenants under the terms of their Leases, users of garage or other covered parking spaces (if any), lessees of other nondwelling facilities in the Property and concessionaires in consequence of the authorized operation of facilities in the Property maintained primarily for the benefit of tenants and otherwise due Owner with respect to the Property in the ordinary course of business; provided, however, nothing contained herein shall be construed as Manager’s guarantee of, and Manager does not guarantee, the creditworthiness or collectability of amounts payable by tenants, users, lessees or concessionaires.
(2) Owner authorizes Manager to request, demand, collect, receive and receipt all such rent and other charges and to institute legal proceedings in the name of, and as an expense reimbursable by Owner for the collection thereof, and for the dispossession of tenants and other persons from the Property, and such expense may include the engaging of counsel for any such matter.
(3) Manager shall collect, hold and otherwise deal with tenants’ security deposits on Owner’s behalf to comply with applicable state and local laws concerning Owner’s responsibility for security deposits and the interest thereon, if any.
1.4 Service Contracts, Equipment, Tools, Appliances and Supplies. Manager shall negotiate, make and enter into all contracts for services and labor which Manager deems necessary or advisable in the ordinary course of operating the Property in accordance with sound management practices, including, without limitation, contracts for water, electricity, gas, fuel oil, telephone, vermin extermination, trash removal and other services that Manager deems necessary or advisable for the operation of the Property in accordance with sound management practices. Manager shall also order and purchase, or arrange for the purchase of, such equipment, tools, appliances, materials, and supplies as are reasonable and customary to properly maintain the Property in accordance with sound management practices.
(1) All such contracts and purchases shall be on Owner’s behalf and at Owner’s expense. At Manager’s option, any such contract or purchase may be made in Manager’s name but on Owner’s behalf.
(2) Owner agrees to pay or reimburse Manager for any and all costs, expenses and liabilities incurred by Manager under or as a result of this Section 2.4.
1.5 Maintenance And Repair of Property. At the expense of Owner, Manager shall use its reasonable best efforts to maintain the buildings, appurtenances and grounds of the Property in accordance with standards reasonably acceptable to Owner, including, but not limited to, interior and exterior cleaning, painting, decorating, carpentry and other normal maintenance and repair work. Except (a) in the case of an emergency where repairs are required to prevent damage or injury to person or the Property or (b) items included in any budget approved by Owner as provided in Section 4.2 hereof, Manager shall not undertake any single item of repair or replacement that will result in an expenditure in excess of $5,000 without the prior authorization of Owner. Notwithstanding the authority to make emergency repairs, Manager shall give prompt notice thereof to Owner and shall confer with Owner regarding such expenditure and its effect on the budget. Owner shall pay or reimburse Manager for all costs, expenses and liabilities incurred under this Section 2.5.
1.6 Supervision of Improvements. When requested by Owner, Manager shall supervise the construction, reconstruction, completion, addition, extension or modification of improvements to the Property. In such instance, Manager shall have the authority to negotiate contracts with all necessary contractors, subcontractors, materialmen, suppliers, architects, and engineers and may compromise and settle any dispute or claim arising therefrom; provided, however, Manager shall act in good faith and in the best interest of Owner at all times. Manager shall furnish all personnel necessary for proper supervision of the work, and may, without abating any fee payable hereunder, assign personnel located at the Property to such supervisory work.
(1) All such work and all such contracts or subcontracts shall be done, entered into and made on behalf of, at the sole cost and expense of, and in the name of, Owner.
(2) To the extent that such work constitutes other than normal maintenance and repair required under Section 2.5 hereof, Manager shall be paid the fee set forth under Section 5.2(b) hereof as compensation for such supervision, and such fee shall be in addition to the Base Management Fee (hereinafter defined).
1.7 Physical Alterations And Compliance.
(1) Owner expressly withholds from Manager any power or authority to make any structural changes in any building or to make any other major alterations or additions in or to any such building or equipment therein.
(2) Manager does not assume and is given no responsibility for compliance of any building on the Property or any equipment therein with the requirements of any statute, ordinance, law or regulation of any governmental body or of any public authority or official thereof having jurisdiction over the Property, except to notify Owner promptly of any complaints, warnings, notices or summonses received by it relating to such matters.
(3) Owner represents that to the best of its knowledge that the Property and all equipment therein comply with all applicable requirements of any statute, ordinance, law or regulation of any governmental body or of any public authority or official thereof having jurisdiction over the Property. Owner authorizes Manager to disclose the ownership of the Property to any person acting in an official capacity for any such governmental authority and agrees to indemnify, defend and hold harmless Manager, Manager’s affiliates, and each of their respective officers, directors, shareholders, partners, members, employees and agents from and against any and all loss, cost, damage, and liability (including, without limitation, fees and expenses of attorneys) incurred by Manager, its affiliates, and each of their respective officers, directors, shareholders, partners, members, employees by reason of any present or future violation or alleged violation of such laws, ordinances, statutes, or regulations.
INSURANCE AND INDEMNITY
1.8 Owner’s Insurance.
(1) At all times during the term hereof, Owner shall maintain, at Owner’s cost and expense, insurance as follows:
(1) Owner shall keep the Property insured against damage by fire and other hazards covered by standard extended coverage, all-risk insurance for the full insurable value thereof (without deduction for depreciation or co-insurance), and shall maintain such other casualty insurance as reasonably determined by Owner.
(2) If the Property is located in an area identified by the Federal Emergency Management Agency as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968 (and any successor act thereto) in an amount at least equal to the maximum limit of coverage available under said act.
(3) Owner shall maintain use and occupancy insurance covering, as applicable, rental income or business interruption, with coverage in an amount not less than the anticipated operating revenues attributable to the Property for a period of twelve (12) months.
(4) Owner shall maintain commercial general liability insurance with respect to the Property providing for limits of liability of not less than $5,000,000 per occurrence for both injury to or death of a person and for property damage, together with such other liability insurance as determined by Owner.
(2) All insurance policies required pursuant to Section 3.1(a)(iv) hereof shall be endorsed to include Manager as an additional named insured and shall be primary insurance and not excess over or contributory with any other valid, existing and applicable insurance carried by Owner. Certificates of all insurance required under Section 3.1 hereof shall be provided by Owner to Manager.
(3) If requested by Owner, Manager shall procure the insurance coverage required by Section 3.1 for the benefit of, and at the expense of Owner; provided, however, any such request nor the procurement of said insurance shall relieve Owner of its obligation to maintain the insurance required under Section 3.1 hereof. In the event that Manager procures any such insurance at the request of Owner, Owner shall have no claim against Manager with respect to such insurance, including, without limitation, claims based upon the company or companies selected, the amount of coverage, the limits of liability or the adequacy of coverage.
(4) In the event agent receives notification that any insurance required under Section 3.1 hereof will lapse, Manager may, but shall not be obligated to, procure similar insurance for the benefit of, and at the expense of Owner. In the event that Manager elects to procure any such insurance, Owner shall have no claim against Manager with respect to such insurance, including, without limitation, claims based upon the company or companies selected, the amount of coverage, the limits of liability or the adequacy of coverage.
(5) Owner acknowledges that, if Manager elects or is required to obtain any insurance for or on behalf of Owner hereunder, such insurance may be placed through an affiliate of Manager, as agent for one or more insurance companies, and that any such affiliate will receive commissions from such insurance companies.
(6) Owner and Manager shall cooperate with each other and with any insurer in the making and delivery of all reports, notices and other items required in connection with any of the insurance policies.
1.9 Settlement of Insurance Claims. Owner hereby authorizes Manager, on behalf of Owner, to use its best efforts to settle any and all claims under any policy of insurance pertaining to the Property, including, without limitation, execution of proofs of loss, adjustment of losses, execution of receipts and collection of funds. Manager is further authorized to contract for the repair of any physical damage to the Property. Manager shall be paid the fee set forth under Section 5.2(b) hereof as compensation for the services described in this Section 3.2, and such fee shall be in addition to the Base Management Fee (hereinafter defined). Nothing in this Section 3.2 nor any insurance obtained or applied for by Owner or Manager shall be construed to impose any liability upon Owner or Manager that would not otherwise be present.
1.10 Manager’s Insurance. At all times during the term hereof, Manager shall obtain and maintain the following insurance:
(1) Manager shall obtain Worker’s Compensation Insurance in an amount that will comply with any applicable statutory limits for all of Manager’s employees, and the cost of said insurance for all on-site employees shall be charged to Owner.
(2) Manager shall obtain and maintain commercial general liability insurance covering Manager’s premises and Manager’s business operations, written on an occurrence basis with a general aggregate minimum limit of not less than $5,000,000 per occurrence for both injury to or death of a person and for property damage.
(3) If requested by Owner, Manager shall maintain a fidelity bond or insurance coverage on all of its employees, agents, officers, directors, partners and managers who are involved in, or employed in connection with, the performance of Manager’s obligations under this Agreement, which such coverage shall be in such amounts as reasonably determined by Owner. Evidence of any such coverage shall be provided to Owner at Owner’s request. The cost of any such bond or insurance shall be the expense of Owner, and Owner shall promptly pay or reimburse Manager for such cost.
1.11 Indemnification. Owner hereby agrees to indemnify, defend and hold harmless Manager, Manager’s affiliates, and each of their respective officers, directors, shareholders, partners, members, employees and agents from and against any and all loss, cost, damage, and liability (including, without limitation, fees and expenses of attorneys) incurred by Manager, its affiliates, and each of their respective officers, directors, shareholders, partners, members, employees and agents resulting from, arising out of or in any way related to the performance of Manager’s duties hereunder or the management and operation of the Property, including, without limitation, any and all claims, suits or proceedings:
(1) arising out of, related to or in connection with the Property, claims for liability for damage to Property and claims for injury to or death of any employee or other person whomsoever, whether or not any such loss, cost, damage, or liability is covered by insurance; and
(2) arising out of, related to or in connection with any alleged violation by Manager or Owner, or both, of any statute, ordinance, law or regulation of any governmental body pertaining to fair employment, including the Americans with Disabilities Act, Federal Fair Credit Reporting Act, environmental protection or fair housing, including, without limitation, those prohibiting or making illegal discrimination on the basis of race, creed, color, religion, familial status or national origin in the sale, rental or other disposition of housing or any services rendered in connection therewith (unless Manager is finally adjudicated to have personally and not in a representative capacity violated such statute, ordinance, law or regulation).
1.12 Environmental Representations and Indemnification.
(1) Owner hereby warrants and represents to Manager that to Owner’s actual knowledge the Property has not previously been nor is presently being used for the treatment, deposit, storage, or disposal of any Hazardous Substance (hereinafter defined). In the event a release of any Hazardous Substance on or about the Property occurs, or is threatened, or in the event Manager becomes aware of the presence of any hazardous waste or hazardous material, which release or threatened release, in Manager’s sole opinion, threatens to subject Manager to liability or claims under any Environmental Laws, in addition to any other rights granted herein, be entitled to immediately terminate this Agreement upon written notice to Owner.
(2) Owner hereby agrees to indemnify, defend and hold harmless Manager, Manager’s affiliates, and each of their respective officers, directors, shareholders, partners, members, employees and agents from and against any and all liabilities, costs, losses, damages or expenses penalties, fines, court costs, administrative service fees, response and remediation costs, stabilization costs, encapsulation costs, treatment, storage or disposal costs, groundwater monitoring or environmental study, sampling or monitoring costs, other causes of action, and any other costs and expenses (including, without limitation, attorneys’, experts’, and consultants’ fees and disbursements and investigating, laboratory and data review fees, all of which may be paid or reimbursed as incurred) imposed upon or incurred by Manager, its affiliates, and each of their respective officers, directors, shareholders, partners, members, employees and agents arising from and after the date of this Agreement directly or indirectly out of: (i) the past, present or future treatment, storage, disposal, generation, use, transport, movement, presence, release, threatened release, spill, installation, sale, emission, injection, leaching, dumping, escaping or seeping of any Hazardous Substances, material containing or alleged to contain Hazardous Substances at or from any past, present, or future properties or assets of the Company; and/or (ii) the violation or alleged violation by Manager of any Environmental Laws with regard to the past, present or future ownership, operation, use, or occupancy of the Property, except for any violation of Environmental Laws caused by the gross negligence or intentional misconduct of Manager.
(3) As used in this Section 3.5:
(1) “Environmental Laws” means any federal, state, or local statute, code, ordinance, rule, regulation, permit, consent, approval, license, judgment, order, writ, judicial decision, common law rule, decree, agency interpretation, injunction, or other authorization or requirement whenever promulgated, issued, or modified, including the requirement to register underground storage tanks, relating to: (i) emissions, discharges, spills, releases or threatened releases of pollutants, contaminants, Hazardous Substances (as hereinafter defined), materials containing Hazardous Substances, or hazardous or toxic materials or wastes into ambient air, surface water, groundwater, watercourses, publicly or privately owned treatment works, drains, sewer systems, wetlands, septic systems or onto land; (ii) the use, treatment, storage, disposal, handling, manufacturing, transportation, or shipment of Hazardous Substances, materials containing Hazardous Substances or hazardous and/or toxic wastes, materials, products, or by‑products (or of equipment or apparatus containing Hazardous Substances) as defined in or regulated under the following statutes and their implementing regulations: the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. § 9601 et seq., and/or the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., each as amended from time to time; or (iii) otherwise relating to pollution or the protection of human health or the environment.
(2) “Hazardous Substances” means (i) hazardous materials, hazardous wastes, and hazardous substances as those terms are defined under the following statutes and their implementing regulations as they may be amended from time to time: the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. §9601 et seq., the Clean Water Act, 33 U.S.C. §1251 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., (ii) petroleum and petroleum products including crude oil and any fractions thereof, (iii) natural gas, synthetic gas, and any mixtures thereof, (iv) asbestos and/or any material which contains any hydrated mineral silicate, including but not limited to chrysolite, amosite, crocidolite, tremolite, anthophylite and/or actinolite, whether friable or non‑friable, (v) PCBs, or PCB‑containing materials or fluids, (vi) radon, (vii) any other hazardous radioactive, toxic or noxious substance, material, pollutant, or solid, liquid, or gaseous waste, and (viii) any substance with respect to which a federal, state, or local agency requires environmental investigation, monitoring, or remediation.
RECORDS AND REPORTS
1.13 Operating Statements. On or before the fifteenth (15th) day of each month during the term of this Agreement, Manager shall render to Owner an operating statement respecting the Property (on an accrual basis) for the preceding fiscal month and fiscal year-to-date. All notices received by Manager from any mortgagee claiming any default in any mortgage on the Property and any other notice from any lender or mortgagee not of a routine nature, shall be forthwith delivered by Manager to Owner. Owner agrees to furnish Manager copies of any notices from any lender or mortgagee, not of a routine nature, promptly following receipt thereof by Owner.
1.14 Budget. Manager will prepare, with the assistance of an accountant if required, a budget for the operation of the Property setting forth an itemized statement, in reasonable detail, of the anticipated receipts and disbursements for the ensuing fiscal year. Owner’s approval of the budget shall authorize Manager to make all expenditures set forth on the budget without further approval. The budget shall be reviewed, approved, and returned to Manager within thirty (30) days of submittal to Owner. The failure of Owner to respond within said thirty (30) day period shall constitute Owner’s approval of the budget.
1.15 Ownership of Records. All corporate statements, receipts, invoices, checks, contracts, worksheets, financial statements, books and records, and all other instruments and documents relating to or arising from the operation or management of the Property shall be and remain the property of Manager, provided, however, Owner shall have the right to inspect and to copy all such records, at Owner’s sole cost and expense, at all reasonable times during the term of this Agreement and for a reasonable time thereafter not to exceed three (3) years. All on-site records, including leases, rent rolls, and other related documents shall be and remain at the Property as property of Owner.
FEES, EXPENSES AND DISBURSEMENTS
1.16 Expense of Owner. All actions by Manager under the provisions of this Agreement shall be done as the agent of Owner. Except as otherwise expressly provided herein, all obligations, costs or expenses incurred by Manager hereunder, or otherwise related to the Property in any manner whatsoever, shall be for the account of, on behalf of, and at the expense of, Owner; provided, however, Owner shall not be obligated to reimburse Manager for: Manager’s home office employees, salaries paid to any executive officer of Manager, Manager’s overhead, home office administrative expenses or for any salaries or wages allocable to time spent on projects other than the Property. A property or resident manager employed at the Property and any other persons performing functions substantially similar to those of a resident manager, including but not limited to assistant managers, leasing directors, leasing agents, sales directors, sales agents, bookkeepers, and other administrative and/or maintenance personnel employed at the Property, shall not be considered executive employees of Manager, and all costs associated with such personnel shall be the expense of Owner.
1.17 Compensation of Manager. As compensation for the services rendered to or on behalf of Owner by Manager pursuant to this Agreement, Manager shall be paid compensation as follows:
(1) Owner shall pay to Manager a fee (the “Base Management Fee”) equal to five percent (5%) of the gross monthly revenues from the operation of the Property. The Base Management Fee shall be earned as and when such revenue is collected and shall be paid in arrears on or before the last day of month in which the gross monthly revenues are collected. Manager is authorized to deduct and pay the Base Management Fee from such revenues, and at Manager’s option, the Base Management Fee may be deducted and paid as and when such revenue is collected.
As used herein, the term “gross monthly revenues” shall mean and include all rents (except prepaid rents), revenues, receipts and payments (including, without limitation, all late charges, all proceeds from any insurance rental or business interruption insurance, all tenant fees, special charges and deposit forfeitures, all funds derived from vending, laundry and similar machines, and all other income or revenue generated by the Property from whatever source), together with the rental value of all employee and model units, which such value shall be deemed to equal the then current market rent.
(2) In addition to the Base Management Fee, if Manager renders the services described in Sections 2.6 or 3.2 hereof, Manager shall receive a fee equal to five percent (5%) of the actual cost of the work supervised, including, without limitation, fees of architects and engineers, legal fees, and costs of labor and material, but excluding the cost of acquisition of land or easements. All payments to Manager required by this Section 5.2(b) shall be paid within ten (10) days from the date of the invoice therefor.
1.18 Disbursements. Owner hereby authorizes and directs Manager to withdraw or withhold from the gross revenues collected with respect to the Property all disbursements which, under this Agreement, are to be made at the expense of Owner, including compensation of Manager as set forth in Section 5.2 hereof . Manager shall pay all operating expenses and such other expenses as may be directed by Owner, subject to the provisions of Sections 2.5 and 5.1 hereof.
(1) At Owner’s request, Manager shall establish, and make deposits into, a reserve or escrow account for payment of all real estate taxes or similar levies or assessments (“Real Estate Taxes”). From gross revenues received with respect to the Property (but only to the extent such revenues are sufficient to make such deposits), Manager shall make monthly deposits into such account in an amount equal to one-twelfth (1/12) of estimated Real Estate Taxes or such other amount as Owner may direct. If the gross revenues received with respect to the Property are not sufficient to fund such deposits, Owner shall make such deposit within fifteen (15) days following Manager’s written request.
(2) Owner agrees to provide sufficient working capital funds to Manager so that all fees, expenses, costs and liabilities may be paid by Manager as and when the same become due and payable. If at any time there is not sufficient cash in any account maintained by Manager with respect to the Property with which to pay such fees, expenses, costs and liabilities as and when they become due and payable, Owner will deliver to Manager such additional funds as Manager may reasonably request on or before five (5) days following Manager’s written request therefor.
(3) Nothing herein shall obligate Manager to advance its own funds on behalf of Owner, and Owner shall hold Manager harmless against any loss, cost, damage or liability resulting from the failure to pay any fees, expenses, costs and liabilities (including, without limitation, debt service on mortgage indebtedness, insurance premiums and other expenses).
1.19 Certain Acknowledgments and Covenants of Manager. Manager acknowledges that the compensation payable to Manager under Section 5.2 hereof may be limited or restricted pursuant to agreements between Owner and the lender or lenders holding the mortgage indebtedness on the Property, and that any such mortgage lender may have restrictions or requirements respecting the deposit and expenditure of revenues generated by the Property. Owner shall furnish a copy of any documents (the “Loan Documents”) setting forth any such limitations or requirements. Unless Manager notifies Owner to the contrary withing fifteen (15) days following receipt of the Loan Documents, Manager shall fully comply with the terms, conditions, limitations and requirements set forth in the Loan Documents; and in the event of any conflict between the terms of this Agreement and the terms of the Loan Documents, the terms of the Loan Documents shall control.
TERM AND TERMINATION
1.20 Term. The term of this Agreement shall commence effective on the Effective Date, and shall terminate on a date twelve (12) months thereafter (the “Expiration Date”), unless otherwise earlier terminated in accordance with the provisions contained herein.
1.21 Renewal. Unless either party gives written notice of its intention to terminate to the other party at least sixty (60) days prior to the Expiration Date, this Agreement shall be automatically renewed for an additional term of twelve (12) months. During such renewal term, either party may terminate this Agreement by written notice given at least sixty (60) days prior to the effective date of any such termination.
1.22 Termination by Owner. Owner may terminate this Agreement, with or without cause, upon not less than sixty (60) days prior written notice to Manager. In such event Owner shall pay Manager a termination fee (the “Termination Fee”) equal to the Base Management Fee paid to Manager for the two (2) calendar months immediately preceding such notice of termination, and such fee shall be paid to Manager not later than the effective date of such termination (the “Without Cause Termination Date”).
(1) In order for Manager to have sufficient funds available to pay expenses incurred prior to such termination and close out accounts opened in connection with Manager’s performance of its obligations hereunder prior to the Without Cause Termination Date (including compensation payable to Manager under Section 5.2 hereof and the Termination Fee, if not otherwise paid), Owner agrees that on the Without Cause Termination Date, Manager may withhold, out of funds that would otherwise be payable by Manager to Owner, funds reasonably estimated by Manager to be sufficient for such purposes, including the payment of compensation of Manager pursuant to Section 5.2 hereof and the Termination Fee, if not otherwise paid.
(2) Following the Without Cause Termination Date, Manager shall promptly pay all expenses, close out all accounts opened in connections with Manager’s performance hereunder, and remit to Owner the remaining funds, if any, not later than sixty (60) days after the Without Cause Termination Date.
(3) Owner acknowledges and agrees that the foregoing procedure is for administrative convenience and shall not relieve Owner of its obligation to pay all such expenses; and Manager acknowledges and agrees that its sole authority with respect to all such withheld funds shall be either to pay expenses or to remit the remaining funds, if any, to Owner.
1.23 Damage or Destruction. In the event of damage or destruction of the Property so that the same shall become untenable or in the event of taking by condemnation, or a similar proceeding of a substantial portion of the Property, this Agreement may be terminated by either party upon thirty (30) days prior written notice to the other party.
1.24 Default. If either party defaults in the performance of its obligations hereunder and such default remains uncured for a period of fifteen (15) days following written notice to the defaulting party, setting forth the nature of such default, the non-defaulting party may immediately terminate this Agreement by written notice to the defaulting party.
1.25 Bankruptcy, etc. Notwithstanding any other provision of this Agreement to the contrary, if a receiver, liquidator or trustee of either party shall be appointed by court order, or if a petition shall be filed by or against either party under any bankruptcy, reorganization or insolvency laws, or if either party makes any assignment for the benefit of its creditors, the other party may immediately terminate this Agreement by written notice to the bankrupt or insolvent party.
1.26 Notice. All notices, demands, requests and other communications required or permitted to be given by any provision of this Agreement shall be in writing and sent by first class, regular, registered or certified mail, commercial delivery service, overnight courier, telegraph, telex, telecopier or facsimile transmission, air or other courier, or hand delivery, to the party to be notified addressed as follows:
If to Manager:
If to Owner:
Any such notice, demand, request or communication shall be deemed to have been given and received for all purposes under this Agreement: (i) three (3) Business Days after the same is deposited in any official depository or receptacle of the United States Postal Service first class certified mail, return receipt requested, postage prepaid; (ii) on the date of confirmed transmission when delivered by telecopier or facsimile transmission, telex, telegraph or other telecommunication device; (iii) on the next Business Day after the same is deposited with a nationally recognized overnight delivery service that guarantees overnight delivery; and (iv) on the date of actual delivery to such party or any other means; provided, however, if the day such notice, demand, request or communication shall be deemed to have been given and received as aforesaid is not a Business Day, (or if delivery is made after 5:00 p.m. (recipient’s local time) on any Business Day), such notice, demand, request or communication shall be deemed to have been given and received on the next Business Day.
Any party to this Agreement may change such party’s address for the purpose of notice, demands, requests and communications required or permitted under this Agreement by providing written notice of such change of address to all of the parties by written notice as provided herein.
1.27 Benefits of Agreement. Except as otherwise expressly provided herein, the covenants, stipulations and agreements contained in this Agreement are and shall be for the sole and exclusive benefit of the parties hereto and their respective successors and assigns and, nothing contained in this Agreement, expressed or implied, shall be construed to confer upon, or give to, any other person any right, remedy or claim under or by reason of this Agreement.
1.28 Incorporation. All exhibits and schedules attached hereto, or to be attached hereto, and all other agreements and instruments referred to herein are hereby incorporated by reference into this Agreement as fully as if copied herein verbatim.
1.29 Attorney’s Fees. If any legal action or other proceeding is brought for the enforcement of this Agreement, or because of any alleged dispute, breach, default or misrepresentation in connection with any provisions of this Agreement and such action is successful, the prevailing parties shall be entitled to recover reasonable attorney’s fees, court costs and all reasonable expenses, even if not taxable or assessable as court costs (including, without limitation, all such fees, costs and expenses incident to appeal) incurred in that action or proceeding in addition to any other relief to which such party may be entitled.
1.30 No Waiver. Each and every waiver of any covenant, representation, warranty or other provision of this Agreement must be in writing and signed by each party whose interests are adversely affected by such waiver. No waiver granted in any one instance shall be construed as a continuing waiver applicable in any other instance. No consent or waiver expressed or implied by any party to this Agreement to or of any breach or default by any other party to this Agreement in the performance by such other party of its obligations hereunder, shall be deemed or construed to be a consent or waiver to, or of, any breach or default of any other party of the same or any subsequent obligations hereunder. Failure on the part of any party to this Agreement to complain of any act or failure to act of any party to this Agreement or to declare such party in default, irrespective of how long such failure continues, shall not constitute a waiver by the non-defaulting parties of their rights hereunder.
1.31 Section Headings. The Section headings contained in this Agreement are for reference purposes only and shall not affect the interpretation of this Agreement.
1.32 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect by, and shall be enforceable in accordance with the internal laws of the State of [*] without regard to conflicts of laws principles.
1.33 Severability. If any provision of this Agreement is held to be unlawful, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, and this Agreement shall be construed and enforced without giving effect to such unlawful, invalid or unenforceable provision. Furthermore, if any provision of this Agreement is capable of two (2) constructions, one of which would render the provision void, and the other which would render the provision valid, then the provision shall have the meaning which renders it valid.
1.34 Counterpart Execution. This Agreement may be executed in multiple counterparts, each one of which shall be deemed an original, but all of which shall be considered together as one and the same instrument. Further, in making proof of this Agreement, it shall not be necessary to produce or account for more than one (1) such counterpart. Execution by party of a signature page hereto shall constitute due execution and shall create a valid, binding obligation of the party so signing, and it shall not be necessary or required that the signatures of all parties appear on a single signature page hereto.
1.35 Successors and Assigns. This Agreement is binding on the successors and assigns of all parties hereto.
1.36 Amendments. This Agreement may be modified or amended as herein provided; however, each and every modification and amendment of this Agreement must be in writing and except as otherwise provided herein, signed by all the parties hereto.
1.37 Governing Laws. This Agreement shall be governed and construed in accordance with the internal laws of the State of [*].
1.38 Calculation of Time Periods. Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designed period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday, or legal holiday. The last day of any period of time described herein shall be deemed to end at 5 p.m. Central Standard Time or Central Daylight Time, as applicable.
1.39 Rules of Construction. As used in this Agreement:
(1) All defined terms in the singular and plural shall have comparable meanings when used in the plural and vice-versa, unless otherwise specified.
(2) Any reference to a “person” shall mean and refer to any individual, partnership, firm, corporation, limited liability company, association, joint venture, trust or other entity, or any governmental or political subdivision or agency department or instrumentality thereof.
(3) All pronouns and any variations thereof shall be deemed to refer to masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.
(4) The words “hereof”, “herein”, “hereunder” and words of similar import shall refer to this Agreement as a whole and not any particular provision of this Agreement.
(5) The word “party” or “parties” when used in this Agreement means only those persons or entities who are signatories to this Agreement.
(6) The words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation”.
(7) Unless otherwise specified in the computation of a period of time from a date to a later specified date, the word “from” means “from and including”, and the words “to” and “until” each mean “to but excluding”.
(8) References to all documents, contracts, agreements or instruments shall include any and all supplements and amendments thereto.
1.40 Entire Agreement. This Agreement contains the entire agreement between the parties regarding the subject matter hereof. Any prior agreements, discussions or representations not expressly contained herein shall be deemed to be replaced by the provisions hereof, and no party has relied on any such prior agreements, discussions or representations as an inducement to the execution hereof.
1.41 Replacement of Prior Agreements. This Agreement replaces and supersedes any prior management agreements or contracts between the parties with respect to the management of the Property, and any such prior agreement is terminated as of the Effective Date.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed by its duly authorized representative as of the date first above written.
DESCRIPTION OF PROPERTY