PROPERTY MANAGEMENT AGREEMENT
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- Gertrude Quinn
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1 , LLC 1921 S. Alma School Rd., #307 Mesa, Arizona (480) (office) (480) (fax) PROPERTY MANAGEMENT AGREEMENT THIS PROPERTY MANAGEMENT AGREEMENT (this "Agreement") is made and entered into as of, by and between, an Arizona, (""),, LLC, an Arizona limited liability company (""), with reference to the following: RECITALS A. is the owner of that certain commonly known as _ in the City of, in the State of, zip code, (The "Property"). B. desires to appoint as 's sole and exclusive agent to perform certain services for with respect to the Property, and desire to accept said appointments and to perform said services, all on the terms, provisions and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing Recitals, incorporated herein by this reference, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Exclusive Manager. hereby appoints to act as 's sole and exclusive manager of the Property ( Manager ) on behalf of and in the name of and as such to perform the services described in Paragraph 3 hereof. 2. Term. This Agreement shall be for one year effective and binding upon the parties hereto as of the date hereof; provided, however, that the services of hereunder, its right to compensation therefor, and the term hereof with respect to such services and compensation shall commence on, (The "Commencement Date"), and expire on _ (said period being referred to herein as the "Initial Term"). Thereafter, this Agreement shall automatically renew for successive one-term terms from the date of the expiration of the Initial Term (said period being referred to herein as the New Term ). If intends to terminate this Agreement upon the expiration of the Initial Term (or the expiration of any subsequent New Term), must provide written notice to of its intention to terminate this Agreement not less than thirty (30) days prior to the commencement of the New Term. The same renewal procedure shall apply during each successive New Term until fifteen (15) years following the Commencement Date, at which time this Agreement shall automatically terminate. (See Article 7, entitled Early Termination for more information about options to terminate this Agreement early.) 3. as Manager. In its capacity as Manager hereunder, shall use reasonable efforts to manage the Property in accordance with such management practices as are normal and customary for commercial properties substantially similar to the Property, and hereby grants to as Manager the power and authority to do and perform the following services for, on behalf of and in the name of : (a) To monitor, supervise, and keep original files and records on the operations of the Property and in connection therewith; to collect rents and other charges from tenants and third parties as and when the same become due and payable under their respective leases and contracts; to negotiate, execute and deliver contracts with third parties providing additional income in connection with the use of the Property including, as examples but without limitation, contracts respecting public telephones, vending machines or news stands; to notify as and when becomes aware of any default by any tenant; to prepare and deliver to within twenty (20) days after the end of each month a report (the "Monthly Report") showing the rental receipts, expenses and charges relating to the operations of the Property for the immediately preceding month; to maintain a trust account (the "Trust Account") in the name of as trustee for at a national or state-chartered banking institution and to deposit therein all rents and other charges paid by tenants and other parties to and collected by ; to make available to copies of all notices, requests or other demands from tenants received by and to discuss with appropriate responses thereto; to maintain files with originals, to the extent available, of all leases and amendments, modifications, extensions and renewals thereof, all assignments, subleases and all consents thereto, and all other instruments and agreements affecting the Property; (b) To monitor and attend to the physical condition of the Property and in connection therewith; to cause the common areas of the Property to be maintained and kept in good condition and repair; to negotiate, execute and deliver contracts for utilities and services for the Property including, for example, electricity, gas, fuel, water, telephone, window cleaning, trash or rubbish hauling, sweeping, landscape gardening, vermin extermination, and such other services as may deem appropriate or advisable for the proper maintenance of the Property; to notify whenever capital improvements or major repairs are appropriate or 1
2 necessary at the Property; if requested by, to seek to obtain and maintain (to the extent not separately maintained by ) extended coverage insurance for casualty, fire, liability, steam boiler, pressure vessel, rental loss and other appropriate insurance; (c) To assist and attorneys retained by with respect to any action, suit or other legal proceeding which may wish to initiate in order to evict any tenant in breach or default of its lease or to terminate such lease and in connection therewith; to prepare, execute and serve such notices as or 's attorneys may specify; to recover possession of tenant space as and when directed by or 's attorneys and in connection therewith to appear and represent before any court or other tribunal as requested by or 's attorneys; to negotiate any settlement, compromise or release or to reinstate any tenancy on terms approved by or 's attorneys; (d) To cause to be paid the following costs, fees and expenses associated with the ownership, operation and management of the Property as and when the same become due and payable and, in connection therewith, to draw upon the funds on deposit in the Trust Account in order to do so and to maintain reserves in the Trust Account for payment of the same in such amounts as, in its sole discretion, may determine to be appropriate or necessary: (i) ' compensation specified in Paragraph 6 hereof including, but not limited to, payment of the management fee payable to ; (ii) Any deposits under any contract or agreement; real property taxes; personal property taxes; special assessments and bonds which are a lien on the Property; mortgage indebtedness; insurance premiums; all common area maintenance, repair and service fees, costs, expenses and charges; all other costs, fees or expenses (other than ' overhead expenses) incurred by in the performance of its services hereunder; and (iii) Such other costs, fees or expenses as may hereafter specify in writing; provided, however, that shall only be obligated to pay so much of the foregoing as can be actually paid from funds on deposit in the Trust Account and if such funds are insufficient to pay all of the foregoing, then shall pay any deficiency to or deposit sufficient additional funds into the Trust Account with which to pay the same within five (5) days after ' demand therefor. shall, under no circumstances, be liable for late charges or penalties incurred as a result of late payments, which are not due to ' own negligence; and (e) services as Manager hereunder shall not include, modernization of the property or major rehabilitations, restoration due to fire or other damage or destruction, supervision or installation of tenant improvements (except that which is addressed in Article 6g.), obtaining income tax or other legal advice, preparation of annual statements or tax returns, presenting petitions to planning and zoning commissions or boards, obtaining conditional use permits or variances, advising of any new or proposed legislation, rule or ordinance having any effect on the use or occupancy of the Property or the relationship between as landlord and tenants of the Property, or any counseling or advisory services of a similar nature. 4. Limitations on Authorities. Notwithstanding any other provision of this Agreement to the contrary, shall have no authority to: (a) Do any act which would make it impossible to carry on the ordinary business of operating the Property; (b) Confess a judgment against ; (c) Borrow money in the name of or encumber the Property; (d) Retain a substitute entity or person to manage the Property in the place of ; or (e) Without obtaining s prior consent, expend funds or commit to any expense for capital improvements or repairs in excess of Five Thousand Dollars ($5,000.00) for any one item. Notwithstanding the foregoing, Borg Property Services shall be permitted to expend funds or commit to an expense in excess of Five Thousand Dollars ($5,000.00) for monthly or recurring charges and emergency repairs if, in the reasonable judgment of, such repairs are necessary to protect persons or property from damage or to avoid suspension of necessary services to tenants as required under their leases. 5. Other Covenants of and. Notwithstanding the provisions of Paragraphs 4, and 5 hereof, it is understood and agreed by and that: (a) shall be liable for all costs, fees, and expenses (other than overhead expenses) incurred by in connection with the performance of its services hereunder, and shall not be obligated to continue to perform such services in the event that the Trust Account has insufficient funds to pay any such cost, fee or expense or ' compensation hereunder and the same remains unpaid by five (5) days after ' written demand therefor. 2
3 (b) The Trust Account shall be maintained only at an institution acceptable to and to, and is hereby released from all liability in connection with said Trust Account in the event of the bankruptcy or failure of any such depository so selected by and. (c) Upon the request of, shall provide to a list of all laborers and thirdparty contractors hired by to perform services to or for the Property, and shall have the right to discharge or discontinue any and all such services upon notice to the laborer or third-party contractor and to. (d) After the Commencement Date, shall not: (i) Collect rents or other sums from tenants or third parties; or (ii) Do any other act which could or would make it difficult or impossible for to perform its covenants or obligations hereunder. (e) Upon the termination of this Agreement, shall assume, and shall release from all liability with respect to all contracts and other obligations for utilities and services provided to the Property. (f) shall indemnify, defend and hold harmless for, from, and against any and all claims, demands, costs, fees, expenses, damages, suits, actions, losses, and liabilities (collectively, "Claims") which may arise in connection with the performance by of its services hereunder or which result from injury or damage suffered or sustained by or to the person or property of any employee, independent contractor or any other person or entity, provided, however, that the foregoing indemnity shall not apply to Claims attributable to willful misconduct or gross negligence. (g) In the course of rendering its services hereunder, shall not be liable to or to any other person or entity for any error in judgment or any mistake of fact or law or any act of omission other than for Borg Property Services willful misconduct or gross negligence. (h) shall at all times keep in full force and effect and at 's sole cost and expense such public liability and workers' compensation insurance as may be appropriate or necessary to protect fully the interests of and Borg Property Services, said policies of insurance to name as an additional insured, to provide to coverage identical to that afforded to thereunder, and to provide that the same cannot be canceled or modified except upon twenty (20) days prior written notice to ; and upon the request of, shall provide proof of such insurance and payment of the premium therefor to the requesting party. (i) shall not be responsible or liable for Claims relating to 's use, occupancy, ownership, management, operation or control of the Property to the extent that the same occurred or may occur prior to the Commencement Date or after the date on which this Agreement expires or terminates. (j) acknowledges and agrees that, and none of its officers, directors, shareholders, or employees have made any promises or representations to except as expressly set forth herein. (k) shall be entitled to receive reimbursements from for overhead expenses incurred by in connection with the performance by of its services hereunder, and Borg Property Services shall provide office space, telephone service, file and record keeping, supplies and general clerical assistance without charge to. (l) Together with the Monthly Report, shall deliver to each month the fixed rents and percentage rents paid to during the prior month by tenants of the Property less ' compensation as Manager hereunder and less an appropriate reserve as established by in its sole discretion for those costs, fees or expenses (such as taxes, insurance, repairs and maintenance) associated with the operations and management of the Property that cannot be fully paid from the common area maintenance charges paid by tenants. (m) Designated Broker is Bret C. Borg, who represents to be the licensed real estate broker through whom is licensed by the Arizona Department of Real Estate, and who is hereby authorized by to act as a signatory on, and to draw on funds or deposit in, the Trust Account. (n) Upon the expiration or earlier termination of this Agreement, shall remain fully liable to Borg Property Services for any compensation due to under this Agreement to the extent that the same is then due and owing to or thereafter accrues to the benefit of. 3
4 6. ' Compensation. shall pay to, in consideration of the services rendered by pursuant hereto, the following fees for acting as Manager: (a) A base monthly fee of a minimum $ versus % of the gross income (which includes rent, common area maintenance, and miscellaneous income) of the Property, whichever is greater; shall pay a one-time start-up fee of $, payable within 30 days after the Commencement Date; (b) One Hundred Fifty Dollars ($150.00) per hour for court appearances made on behalf of ; (c) A Lease renewal commission with a tenant for space at the Property (other than a lease for a month-tomonth term), shall pay a lease renewal commission fee in the amount of the greater of (i) _ Dollars ($ ) per square foot of space leased under such lease, or (ii) ( %) of the net aggregate lease value (sum total of the Base Rent during the initial lease term), which commission fee shall be 100% payable upon completion (full execution of the lease document). If an existing tenant renewal includes an Expansion or Relocation within the property for a fully executed lease with a tenant for space at the Property shall pay a leasing commission fee in the amount of the greater of (i) Dollars ($ ) per square foot of space leased under such lease, or (ii) ( %) of the net aggregate lease value, which commission fee shall be payable upon completion. Commissions shall be 100% earned and payable upon full execution of the lease document between the and the tenant. (d) In the event of a property sale, will pay disposition fee of $ at closing for coordinating tenant estoppel certificates and working with the Buyer during due diligence. (e) In the event of a property re-finance, will pay a refinance fee of $ for coordinating tenant estoppel certificates and lender due diligence. (f) Real estate tax consulting services will be performed each year for a fixed fee of $500 plus 25% of the estimated real estate tax savings. may contract these services out to a third party to complete, but will involve the following: review of the County Assessor s property valuation each year, if determined by that an administrative appeal will be filed and completed, and a review of the annual real estate tax statements. (g) Construction management fees equal to percent ( %) of the total cost of the job shall be paid to, as may be necessary, to coordinate the completion of any large capital improvement projects, including but not limited to roof replacements, common area remodeling, parking lot overlays, and tenant improvements. Construction management services may include the following: completion of contracts, coordinating working drawings and permits, contractor certificate of insurance compliance, processing payments and securing all applicable lien waivers. (h) Lease assignment and subletting fees equal to the amounts allowed to be charged to each tenant under the lease. By this Agreement, hereby allows to collect any such fees directly from the tenant to handle the paperwork and tasks associated with any such lease assignment or sublet agreement. Any such lease assignment or sublease is subject to the s approval as may be outlined more specifically in the lease. (i) Late Fees. In the event that fails to pay within ten (10) days for services rendered, fees earned or reimbursable expenses per this Agreement, a late fee of $200 or ten percent (10%) of the amount owed, whichever is greater, shall be immediately due and payable. Thereafter, in addition to this Late Fee, interest shall accrue at a rate of eighteen percent (18%) per year. In the event that requests to perform services which exceed or are other than those described hereunder, shall not be obligated to render the same unless and until a fee therefore shall be agreed upon by the parties hereto. 7. Early Termination. Notwithstanding the provisions hereinabove, this Agreement may be terminated early as follows: (a) may resign as Manager at any time upon thirty (30) days' prior written notice to, and upon the effective date of such resignation, ' compensation hereunder and this Agreement shall cease and terminate. (b) may terminate this Agreement upon the breach or default by of its covenants or obligations hereunder, and upon such termination shall be liable to for any and all damages suffered by as a result thereof as well as all compensation, costs, fees and expenses then remaining unpaid or thereafter accruing to. (c) may terminate this Agreement upon thirty (30) days written notice to, and upon the effective date of such termination, compensation hereunder and this Agreement shall cease and terminate. 4
5 8. Miscellaneous Provisions. The following shall constitute miscellaneous provisions under which this Agreement shall be interpreted and performed: (a) Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties relating to the subject matter hereof, and all prior or contemporaneous written or oral statements and agreements are merged herein. This Agreement may not be amended or modified except by a writing signed by the parties thereto. (b) Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of and be enforceable by and against, the successors and assigns of the parties hereto. (c) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof shall nevertheless continue in full force and effect without being impaired or invalidated in any way. (d) Attorneys Fees. Should any party to this Agreement initiate any suit or proceeding to enforce the terms or provisions hereof, the prevailing party in any such suit shall be entitled to recover its reasonable costs and expenses with respect thereto, including reasonable attorneys fees, regardless of whether an actual lawsuit is commenced or not. The parties agree that any such award of attorneys fees shall not be restricted by court, schedules or agency procedures, it being intended that such prevailing party be entitled to recover the full value of its reasonable attorneys fees so incurred. (e) Waiver. The waiver by any party of any breach or default by any other party of its covenants or obligations hereunder shall not operate as or be construed to be a waiver of any subsequent breach or default. (f) Additional Documents. Each of the parties hereto specifically agrees to execute such other and further instruments and documents as may be reasonably required to effectuate the terms, provisions and objectives of this Agreement. (g) Notices. Any notice to be given hereunder by one party to the other shall be given in writing and shall be effected by personal delivery (including courier service), or by registered or certified mail, postage prepaid, with return receipt requested, and the same shall be deemed given upon receipt. Each such notice shall be addressed as set forth below next to the signature of the parties. The parties may change their addresses by giving written notice pursuant to the terms of this Paragraph. (h) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be a duplicate original by all of which together shall constitute one and the same instrument.. (j) Signs. may place managed by signs on the Property in locations determined by 9. Deposit. hereby acknowledges receipt of a deposit from in the amount of $5,000.00, which is authorized to use in order to open the Trust Account and to establish an initial reserve for the operational and management costs associated with the Property. IN WITNESS WHEREOF, each of the parties hereto acknowledges that they have read this Agreement prior to its execution, they have received a duplicate executed original hereof, and have caused the same to be executed by their duly authorized agents, officers, partners or representatives, as the case may be, as of the date first written above., LLC By: Bret C. Borg Its: Designated Broker By: Its:, LLC 1921 S. Alma School Rd., #307 Mesa, Arizona Toll Free Phone Fax Federal Tax ID Number 5
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