M A N A G E M E N T A G R E E M E N T
---------------------------------------
OWNER: Secured Investment Resources Fund, L.P., III
AGENT: Maxus Properties, Inc.
PREMISES: Bicycle Club Apartments
0000 X. Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
BEGINNING: January 1, 1999
ENDING: January 1, 2004
IN CONSIDERATION of the covenants herein contained, Secured Investment
Resources Fund L.P., III, (hereinafter called "OWNER"), and Maxus Properties,
Inc. (hereinafter called "AGENT"), agree as follows:
1. The OWNER hereby employs the AGENT exclusively to rent and manage the
property known as Bicycle Club Apartments (hereinafter the "Premises") upon the
terms and conditions hereinafter set forth, for a term of 3 years beginning on
January 1, 1999 and ending on January 1, 2004, and thereafter for yearly periods
from time to time, unless on or before 30 days prior to the date last above
mentioned or on or before 30 days prior to the expiration of any such renewal
period, either party hereto shall notify the other in writing that it elects to
terminate this Agreement, in which case this Agreement shall be thereby
terminated on said last mentioned date. (See also Paragraph 6.3 below.)
2. THE AGENT AGREES:
2.1 To accept the management of the Premises, to the extent, for the period,
and upon the terms herein provided and agrees to furnish the services of its
organization for the rental operation and management of the Premises.
2.2 To prepare a monthly statement of receipts and disbursements and to
remit, on a monthly basis, the net cash flow generated by the Premises after
payment of all operating expenses, debt service and escrow payments if
applicable, to the following party:
Secured Investment Resources Fund L.P., III
c/o Xxxxx X. Xxxxxxx
P.O. Box 26730
Kansas City, MO 64196
In the event total monthly disbursements are in excess of total monthly
receipts, the OWNER shall promptly provide funds to cover such shortfalls.
Nothing contained herein shall obligate the AGENT to advance its own funds on
behalf of the OWNER to cover any shortfalls.
2.3 To cause all employees of the AGENT who handle or are responsible for the
safekeeping of any monies of the OWNER to be covered by a fidelity bond in an
amount and with a company determined by the AGENT.
2
3. THE OWNER AGREES:
To give the AGENT the following authority and powers (all or any of which may
be exercised in the name of the OWNER) and agrees to assume all expenses in
connection therewith:
3.1 To advertise the Premises or any part thereof; to display signs thereon
and to rent the same; to cause references of prospective tenants to be
investigated; to sign leases for terms not in excess of one year and to renew
and/or cancel the existing leases and prepare and execute the new leases without
additional charge to the OWNER; provided; however, that the AGENT may collect
from tenant all or any of the following: a late rent administrative charge, a
non-negotiable check charge, credit report fee, a subleasing administrative
charge and/or broker's commission and need not account for such charges and/or
commission to the OWNER; to terminate tenancies and to sign and serve such
notices as are deemed needful by the AGENT; to institute and prosecute actions
to oust tenants and to recover possession of the Premises; to sue for and
recover rent; and, when expedient, to settle, compromise, and release such
actions or suits, or reinstate such tenancies. OWNER shall reimburse AGENT for
all expenses of litigation including attorneys' fees, filing fees, and court
costs which AGENT does not recover from tenants. AGENT may select the attorney
of its choice to handle such litigation.
3.2 To hire, discharge, and pay all managers, engineers, janitors and other
employees; to make or cause to be made all ordinary repairs and replacements
necessary to preserve the Premises in its present condition and for the
operating efficiency thereof and all alterations required to comply with lease
requirements, and to do decorating on the Premises; to negotiate contracts for
nonrecurring items not exceeding $5,000 and to enter into agreements for all
necessary repairs, maintenance, minor alterations and utility services; and to
purchase supplies and pay bills. AGENT shall secure the approval of the OWNER
for items, except monthly or recurring operating charges and emergency repairs
in excess of the maximum, if, in the opinion of the AGENT, such repairs are
necessary to protect the property from damage or to maintain services to the
tenants as called for by their tenancy.
3.3 To collect rents and/or assessments and other items due or to become due
and give receipts therefor and to deposit all funds collected hereunder in the
AGENT's custodial account.
3.4 AGENT agrees to collect all tenant security deposits. OWNER instructs
AGENT to deposit all security deposits in the general operating accounts of the
property. AGENT is not to segregate the security deposits into a separate
account or into an escrow account.
3
3.5 To execute and file all returns and other instruments and do and perform
all acts required of the OWNER as an employer with respect to the Premises under
the Federal Insurance Contributions Acts, the Federal Unemployment Tax Act and
Subtitle C of the Internal Revenue Code of 1954 with respect to wages paid by
the AGENT on behalf of the OWNER and under any similar federal and state law now
or hereafter in force (and in connection therewith the OWNER agrees upon request
to promptly execute and deliver to the AGENT all necessary powers of attorney,
notices of appointment, and the like).
3.6 The AGENT shall not be required to advance any monies for the care or
management of said property, and the OWNER agrees to advance all monies
necessary therefor. If the AGENT shall elect to advance any money in connection
with the property, the OWNER agrees to reimburse the AGENT forthwith and hereby
authorizes the AGENT to deduct such advances from any monies due the OWNER. The
AGENT, shall, upon instruction from the OWNER, impound reserves each month for
the payment of real estate taxes, insurance, or any other special expenditure.
In addition, the OWNER agrees to establish a permanent Operating Reserve Account
with the AGENT in the amount of $ Not Applicable .
4. THE OWNER FURTHER AGREES:
4.1 To indemnify, defend and save the AGENT harmless from all suits in
connection with the Premises and from liability for damage to property and
injuries to or death of any employee or other person whomsoever, and to carry at
his (its) own expense public liability, elevator liability (if elevators are
part of the equipment of the Premises), and workmen's compensation insurance
naming the OWNER and AGENT, adequate to protect their interests in form,
substance, and amounts reasonably satisfactory to the AGENT, and to furnish to
the AGENT certificates evidencing the existence of such insurance. Unless the
OWNER shall provide such insurance and furnish such certificate within 30 days
from the date of this Agreement, the AGENT may, but shall not be obligated to,
place said insurance and charge the cost thereof to the account of the OWNER.
All such insurance policies shall provide that the AGENT shall receive thirty
(30) days' written notice prior to cancellation of the policy.
4.2 To pay all expenses incurred by the AGENT, including, but not limited to,
reasonable attorneys' fees and AGENT's costs and time in connection with any
claim, proceeding, or suit involving an alleged violation by the AGENT or the
OWNER, or both, of any law pertaining to fair employment, fair credit reporting,
environmental protection, rent control, taxes, or fair housing, including, but
not limited to, any law prohibiting, or making illegal,
4
discrimination on the basis of race, sex, creed, color, religion, national
origin, or mental or physical handicap, provided, however, that the OWNER shall
not be responsible to the AGENT for any such expenses in the event the AGENT is
finally adjudicated to have personally, and not in a representative capacity,
violated any such law. Nothing contained herein shall obligate the AGENT to
employ counsel to represent the OWNER in any such proceeding or suit, and the
OWNER may elect to employ counsel to represent the OWNER in any such proceeding
or suit. The OWNER also agrees to pay reasonable expenses (or an apportioned
amount of such expenses where other employers of AGENT also benefit from the
expenditure) incurred by the AGENT in obtaining legal advice regarding
compliance with any law affecting the premises or activities related thereto.
4.3 To indemnify, defend, and save the AGENT harmless from all claims,
investigations, and suits, or from actions or failures to act of the OWNER, with
respect to any alleged or actual violation of state or federal labor laws, it
being expressly agreed and understood that as between the OWNER and the AGENT,
all persons employed in connection with the Premises are employees of the OWNER,
not the AGENT. However, it shall be the responsibility of the AGENT to comply
with all applicable state or federal labor laws. The OWNER's obligation under
this paragraph 4.3 shall include the payment of all settlements, judgements,
damages, liquidated damages, penalties, forfeitures, back pay awards, court
costs, litigation expense, and attorneys' fees.
4.4 To give adequate advance written notice to the AGENT if the OWNER desires
that the AGENT make payment, out of the proceeds from the premises, or mortgage
indebtedness, general taxes, special assessments, or fire, steam boiler, or any
other insurance premiums. In no event shall the AGENT be required to advance its
own money in payment of any such indebtedness, taxes, assessments, or premiums.
5. THE OWNER AGREES TO PAY THE AGENT EACH MONTH:
5.1 MANAGEMENT: OWNER agrees to pay AGENT for the ordinary management of the
Premises Five percent (5.0%) of the monthly gross receipts from the operation of
the Premises during the period this Agreement remains in full force and effect.
Gross receipts are all amounts received from the operation of the Premises
including, but not limited to, rents, parking fees, deposits, laundry income and
fees.
5.2 OTHER ITEMS OF MUTUAL AGREEMENT: In the event OWNER requests and AGENT
agrees to perform services outside the scope of ordinary management of the
Premises, the parties will agree to a fee and payment structure for these
services prior to commencement of the work.
5
6. IT IS MUTUALLY AGREED THAT:
6.1 The OWNER expressly withholds from the AGENT 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, or to
incur any expense chargeable to OWNER other than expenses related to exercising
the express powers above vested in AGENT without the prior written direction of
an authorized representative of OWNER. AGENT is granted the authority to make
structural changes or major alterations if such actions are required because of
danger to life or which are immediately necessary for the preservation and
safety of the Premises or the safety of the occupants thereof or are required to
avoid the suspension of any necessary service to the Premises.
6.2 The AGENT does not assume and is given no responsibility for compliance
of any building on the Premises 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, except to notify the OWNER promptly or
forward to the OWNER promptly any complaints, warnings, notices, or summonses
received by it relating to such matters. The OWNER represents that to the best
of his (its) knowledge the Premises and such equipment comply with all such
requirements and authorizes the AGENT, its representatives, servants, and
employees, of and from all loss, cost, expense, and liability whatsoever which
may be imposed on them or any of them by reason of any present or future
violation or alleged violation of such laws, ordinances, statutes, or
regulations.
6.3 In the event it is alleged or charged that any building on the Premises
or any equipment therein or any act or failure to act by the OWNER with respect
to the Premises or the sale, rental or other disposition thereof fails to comply
with, or is in violation of, any of the requirements of a constitutional
provision, statute, ordinance, law or regulation of any governmental body or any
order or ruling of any public authority or official thereof having or claiming
to have jurisdiction thereover, and the AGENT, in its sole and absolute
discretion, considers that the action or position of the OWNER or registered
managing AGENT with respect thereto may result in damage or liability to the
AGENT, the AGENT shall have the right to cancel this Agreement at any time by
written notice to the OWNER of its election so to do, which cancellation shall
be effective upon the service of such notice. Such notice may be served
personally or by registered mail, on or to the person named to receive the
AGENT's monthly statement at the address designated for such person as provided
in Paragraph 2.2 above, and if service by mail shall be deemed to have
6
been served when deposited in the U.S. Mail. Such cancellation shall not release
the indemnities of the OWNER set forth in Paragraph 4 and 6.2 above and shall
not terminate any liability or obligation of the OWNER to the AGENT for any
payment, reimbursement, or other sum of money then due and payable to the AGENT
hereunder.
7. This Agreement may be cancelled by OWNER before the termination date
specified in Paragraph 1 on not less than 30 days' prior written notice to the
AGENT.
8. The OWNER shall pay or reimburse the AGENT for any sums of money due it
under this Agreement for service for actions prior to termination,
notwithstanding any termination of this Agreement. All provisions of this
Agreement that require the OWNER to have insured or to defend, reimburse, or
indemnify the AGENT (including, but not limited to, Paragraphs 4.1, 4.2, and
4.3) shall survive any termination and, if AGENT is or becomes involved in any
proceeding or litigation by reason of having been the OWNER's agent, such
provisions shall apply as if this Agreement were still in effect. The parties
understand and agree that the AGENT may withhold funds for thirty (30) days
after the end of the month in which the Agreement is terminated to pay bills
previously incurred but not yet invoiced and to close accounts.
This Agreement shall be binding upon the successors and assigns of the AGENT
and their heirs, administrators, executors, successors, and assigns of the
OWNER.
7
IN WITNESS THEREOF, the parties hereto have affixed or caused to be affixed
their respective signatures effective this 1st day of January, 1999.
OWNER: Secured Investment Resources Fund, L.P. III
By: /s/ Xxxxxxxxx Xxxxxxxx
Xxxxxxxxx Xxxxxxxx, President
Xxxxxxx Resources, Ltd.
General Partner of
Secured Investment Resources
Fund, L.P. III
AGENT: Firm: Maxus Properties, Inc.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
President
8
