Exhibit 5
PROPERTY MANAGEMENT AGREEMENT
This Agreement is made as of the 1st day of January, 1996 between the
undersigned XXXXX CASH PLUS LIMITED PARTNERSHIP, a Massachusetts Limited
Partnership (the "Owner") and the undersigned BERKSHIRE REALTY ENTERPRISES
LIMITED PARTNERSHIP (the "Agent").
1. APPOINTMENT AND ACCEPTANCE. The Owner appoints the Agent as exclusive
agent for the management of the property described in Section 2 of this
Agreement, and the Agent accepts the appointment, subject to the terms and
conditions set forth in this Agreement.
2. DESCRIPTION OF THE PROJECT. The shopping center to be managed by the Agent
under this Agreement is a shopping center consisting of the land, buildings, and
other improvements located in High Point, North Carolina and known as HIGH POINT
NATIONAL FURNITURE MART containing 241,650 square feet (the "Shopping Center").
3. BASIC INFORMATION. The Agent will thoroughly familiarize itself with the
character, location, construction, layout, plan and operation of the Shopping
Center, and especially the electrical, plumbing, air-conditioning and
ventilating systems, the elevators and all other mechanical equipment.
4. MARKETING. The Agent will carry out the marketing activities designed to
attract tenants as described below.
5. RENTALS. The Agent will offer for rent and will rent the dwelling units
and commercial space, if any, in the Project. Incident thereto, the following
provisions will apply:
a. The Agent will show the Shopping Center to prospective tenants.
b. A current list of prospective tenants will be maintained.
c. The Agent will prepare all Shopping Center leases and, unless
otherwise directed by Owner, will execute the same in its name,
identifying itself thereon as agent for the Owner. Shopping Center
leases will be in a form approved by the Owner.
d. The Owner will furnish the Agent with rent schedules, showing
contract rents for Shopping Center space, and other charges for
facilities and services. The Agent will periodically review such
rent schedules and make recommendations to the Owner with respect to
changes thereto.
e. The Agent will collect, deposit, and disburse security deposits, if
required, in accordance with the terms of each tenant's lease.
f. The Agent will perform periodic market surveys with respect to the
market area in which the project is located.
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6. COLLECTION OF RENTS AND OTHER RECEIPTS. The Agent will collect, when due, all
rents, charges and other amounts receivable for the Owner's account in
connection with the management and operation of the Shopping Center. Such
receipts will be deposited in an account, separate from all other accounts and
funds, with a bank whose deposits are insured by the Federal Deposit Insurance
Corporation. This account will be carried in the Owner's name and designated of
record as "HIGH POINT NATIONAL FURNITURE MART" (the "Shopping Center Rental
Account"). Subject to compliance with Section 11 hereof, the Agent is, however,
hereby authorized to make deposits to and withdrawals from the Shopping Center
Rental Account as agent for the Owner.
7. ENFORCEMENT OF LEASES. The Agent will secure full compliance by each tenant
with the terms of such tenant's lease. Voluntary compliance will be emphasized,
but the Agent may lawfully terminate any tenancy when, in the Agent's judgement,
sufficient cause (including but not limited to non-payment of rent) for such
termination occurs under the terms of the tenant's lease. For this purpose, the
Agent is authorized to consult with legal counsel to be designated by the Owner,
to bring actions for eviction against such tenants; provided, however, the Agent
shall keep the Owner informed of such actions and shall follow such instructions
as the Owner may prescribe for the conduct of any such action. Subject to the
Owner's approval, attorney fees and other necessary costs incurred in connection
with such actions will be paid out of the Shopping Center Rental Account as
Shopping Center expenses.
8. MAINTENANCE AND REPAIR. The Agent will maintain the Shopping Center in good
repair and in compliance with local codes, and in a condition at all times
acceptable to the Owner, including but not limited to cleaning, painting,
decorating, plumbing, carpentry, grounds care, and such other maintenance,
repair, remodeling and refurbishing work as may be necessary, subject to any
limitations imposed by the Owner in addition to those contained herein. The
Agent will also assist the Owner with respect to determination and
implementation of capital improvements to the Shopping Center.
The Agent will perform such periodic physical inspections as shall be
appropriate in connection therewith. Incident thereto, the following additional
provisions will apply:
a. Special attention will be given to preventive maintenance, and to
the extent feasible, the services of regular maintenance employees
will be used.
b. Subject to the Owner's prior approval, the Agent will negotiate,
review and sign on behalf of the Owner contracts with qualified
independent contractors for the maintenance and repair of heating
and air-conditioning systems and elevators, and for extraordinary
repairs to such items and other assets of the Shopping Center which
are beyond the capability of regular maintenance employees.
c. The Agent will systematically and promptly receive and investigate
all service requests from tenants, take such action thereon as may
be justified, and will keep records of the same. Emergency requests
will be received and serviced on a twenty-four (24) hour basis.
Complaints of a serious nature will be reported to the Owner after
investigation.
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d. The Agent is authorized to purchase all materials, equipment, tools,
appliances, supplies and services necessary for proper maintenance
and repair of the shopping center.
e. Notwithstanding any of the foregoing provisions, the prior approval
of the Owner will be required for any expenditure which exceeds Five
Thousand Dollars ($5,000) in any one instance for labor, materials
or otherwise, in connection with the maintenance and repair of the
Shopping Center, except for recurring expenses within the limits of
the operating budget and emergency repairs involving manifest danger
to persons or property or required to avoid suspension of any
necessary service to the Shopping Center. In the latter event, the
Agent will inform the Owner of the facts as promptly as possible.
9. UTILITIES AND SERVICES. In accordance with the operating budget, the Agent
will make arrangements for water, electricity, gas, sewage and trash disposal,
vermin extermination, decorating, and telephone service. Subject to the Owner's
prior approval, the Agent will make such contracts as may be necessary to secure
such utilities and services.
10. NONCUSTOMARY SERVICES. Notwithstanding any contrary provision in this
Agreement, the Owner shall cause any services, in connection with the rental of
the Project, that are not customarily furnished to tenants of comparable
buildings in the region (including, but not limited to, the provision of maid
service and the furnishing of parking facilities, other than on a complimentary,
unreserved basis), to be performed by an entity qualifying as an independent
contractor.
11. EMPLOYEES. Except as otherwise agreed, all on-site personnel will be
employees of the Owner and not the Agent, but will be hired, paid, supervised,
and discharged through the Agent, in the Agent's sole discretion, subject to the
following conditions:
a. The Regional Director will have duties of the type usually
associated with such position.
b. Compensation (including fringe benefits) of bookkeeping, clerical,
and managerial personnel will be within the Agent's sole discretion,
provided minimum wage standards are met.
c. The Owner will reimburse the Agent for compensation (including
fringe benefits) payable to the on-site management and maintenance
employees, and for all local, state and federal taxes and
assessments (including but not limited to Social Security taxes,
unemployment insurance, and Xxxxxxx'x Compensation insurance)
incident to the employment of such personnel. Such reimbursements
will be paid out of the Shopping Center Rental Account and will be
treated as Shopping Center expenses. The rental value of any
dwelling unit furnished rent-free to on-site personnel will be
treated as a cost of the Shopping Center.
d. Compensation (including fringe benefits) payable to all bookkeeping,
clerical and other managerial personnel, plus all local, state and
federal taxes and assessments incident to the employment of such
personnel will be charged to the Shopping Center in accordance
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with appropriate accounting procedures, and will not be paid out of
the Agent's management fee.
12. DISBURSEMENTS FROM PROJECT RENTAL ACCOUNT.
a. From the funds collected and deposited by the Agent in the Shopping
Center Rental Account, either the Owner or the Agent, as shall be
determined from time to time by the Owner, will make the following
disbursements when payable in the following order.
1. Reimbursement to the Agent for compensation payable to the
employees specified in Section 10 above, and for the taxes and
assessments payable to local, state and federal authorities
and for any monies it has advanced or become personally liable
therefor in discharging its duties hereunder.
2. All sums otherwise due and payable by the Owner as expenses of
the Shopping Center authorized to be incurred by the Agent
under the terms of this Agreement, including compensation
payable to the Agent for its services hereunder and expenses
of the Shopping Center incurred by the Agent under the terms
of this Agreement.
3. Any payment required to be made monthly by the Owner to any
mortgage holder respecting the Project, including the amounts
due under the mortgage for principal amortization, interest,
ground rents, taxes and assessments, and fire and other hazard
insurance premiums.
b. Except for the disbursements mentioned above, funds will be
disbursed or transferred from the Shopping Center Rental Account
only as the Owner may from time to time direct.
c. In the event the balance in the Shopping Center Rental Account is at
any time insufficient to pay disbursements due and payable under
Section 11 (a) above, the Agent will inform the Owner of that fact.
In no event will the Agent be required to use its own funds to pay
such disbursements.
13. RECORDS AND REPORTS. The Agent will have the following responsibilities
with respect to records and reports.
a. The Agent will establish and maintain a comprehensive system of
records, books and accounts in a manner satisfactory to the Owner
acting reasonably.
b. With respect to each fiscal year ending during the term of this
Agreement, the Agent will furnish an annual financial report. The
Agent will also prepare and review budgets and
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cash flow projections for the Shopping Center in such manner and at
such times as may be agreed with the Owner.
c. The Agent will furnish such information (including occupancy
reports) as may be reasonably requested by the Owner from time to
time with respect to the financial, physical, or operating condition
of the Shopping Center.
d. By the twenty-fifth (25th) day of each month, the Agent will furnish
the Owner with a statement of receipts and disbursements during the
previous month, together with a schedule of accounts receivable and
payable, and reconciled bank statements for the Shopping Center
Rental Account as of the end of the previous month.
14. ON-SITE MANAGEMENT FACILITIES. Subject to further agreement of the Owner and
the Agent as to more specific terms, the Agent may maintain a management office
within the Shopping Center, and the Owner will make no rental charge for the
same.
15. INSURANCE. The Owner will inform the Agent of insurance to be carried with
respect to the Project and its operations, and the Agent, when authorized by the
Owner, will cause such insurance to be placed and kept in effect at all times.
The Agent will pay premiums out of the Shopping Center Rental Account, as an
expense of the Shopping Center. All insurance will be placed with such
companies, on such conditions, in such amounts, and with such beneficial
interests appearing thereon as shall be acceptable to the Owner and shall be
otherwise in conformity with the Mortgage related to the Shopping Center,
provided that the same will include public liability coverage, with the Agent
designated as one of the insureds, in amounts acceptable to the Owner, Agent and
any mortgagee of the Shopping Center. The Agent will investigate and furnish the
Owner with full reports as to all accidents, claims, and potential claims for
damage relating to the Project, and will cooperate with the Owner's insurers in
connection therewith.
16. AGENT'S COMPENSATION. The Agent will be compensated for its services under
this Agreement by monthly fees to be paid out of the Shopping Center Rental
Account to be treated as Shopping Center expenses. Such fees will be payable
monthly. Each such monthly fee will be an amount equal to SIX PERCENT (6%) of
the gross receipts (including rentals and other operating income of the Shopping
Center) actually received during the applicable month. In addition, the Agent
shall receive reimbursement for all proper expenditures, obligations and
liabilities incurred by the Agent in connection with the operation of the
Shopping Center. Such reimbursement shall be limited to the actual cost of
goods, services and materials used for or by the Shopping Center, and in no
event shall such cost exceed the cost of such items if supplied by persons or
entities other than the Agent or its affiliates. Such reimbursement shall not
include reimbursement for costs of services rendered by employees who are not
employed in the operation of the Shopping Center (except that employees
servicing more than one property (whether or not owned by the Owner) may have
their costs prorated based upon the respective number of units or square footage
in each property), or other expenses for which managing agents of real estate
would not customarily receive reimbursement in addition to stated compensation.
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17. INDEMNIFICATION BY THE OWNER. The Owner shall indemnify and hold harmless
the Agent from all liability, claims, damages or loss arising out of the
performance of its duties hereunder, and related expenses, including reasonable
attorneys' fees, to the extent such liability, claims, damages or losses and
related expenses are not fully reimbursed by insurance; provided, however, that
the Agent shall be entitled to indemnification, under this Section 17, only if
the Agent, in connection with any liability, damages, claim or loss for which it
seeks indemnity, acted in a manner which would not constitute gross negligence
or wilful misfeasance.
18. INDEMNIFICATION BY THE AGENT. The Agent shall indemnify and hold harmless
the Owner from contract or other liability, claims, damages, losses and related
expenses, including attorneys' fees, to the extent that such liability, claims,
damages, losses and related expenses are not fully reimbursed by insurance and
are incurred by the Owner by reason of the Agent's deliberate dishonesty or
gross negligence.
19. RIGHT TO ASSIGN. The Agent may assign some or all of its rights or
obligations under this Agreement provided Agent remains principally responsible
hereunder, and Owner is given notice of such assignment. Owner may assign its
rights and obligations under this Agreement to any successor in title to the
Property, and upon such assignment, Owner shall be relieved of all liability
accruing after the effective date of such assignment.
20. TERM OF AGREEMENT. This Agreement shall be in effect for a period commencing
on the date hereof. This Agreement may be terminated, without penalty, by
written notice of either party to the other as of the end of any calendar month,
provided at least sixty (60) days advance written notice thereof is given.
IN WITNESS WHEREOF, the parties hereto (by their duly authorized
representatives) have executed this Agreement as of the date first above
written.
OWNER: AGENT:
XXXXX CASH PLUS BERKSHIRE REALTY ENTERPRISES
LIMITED PARTNERSHIP LIMITED PARTNERSHIP
By: The Xxxxx Corporation
a General Partner
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxx Xxxxxx
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Xxxxxxxx Xxxxxx, Xxx Xxxxxx
President Vice President Operations
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