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EXHIBIT 10(j)
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") is made as of this 16th
day of June, 2000, between XXXXX EQUITY, INC., a Florida corporation (the
"Manager") and XXXXXXX REALTY TRUST, L.P., a Delaware limited partnership (the
"Owner").
WITNESSETH:
WHEREAS, Owner and its affiliates are the owners of those certain
properties more particularly described on Exhibit "A" (each, a "Property," and
together, the "Properties");
WHEREAS, certain of the Properties are managed by independent
management companies and three of the properties located in Charlotte, North
Carolina are managed by Manager, all pursuant to management agreements between
Owner and such independent management companies and Manager (such management
agreements, the "Property Management Agreements");
WHEREAS, the Properties which are not managed by independent management
companies and Manager are managed by personnel employed by Owner's affiliate,
Xxxxxxx & Associates, L.P., which also employs various accounting and
administrative personnel which provide accounting and other services to the
Properties and Owner (such personnel, "Owner's Personnel");
WHEREAS, Manager is an experienced real estate manager; and
WHEREAS, Owner desires to retain Manager as the manager of various
aspects of its business.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, Manager and Owner hereby agree as
follows:
1. Retention of Manager. Owner hereby retains Manager for the purpose of
providing management services, which services shall include, without limitation,
(i) acting as Owner's representative in connection with the negotiation,
administration and monitoring of the Property Management Agreements, (ii)
assisting Owner with the review, approval and monitoring of business plans,
budgets and monthly management reports, (iii) providing senior level management
for the supervision and oversight of Owner's Personnel in the management and
operation of the Owner's business, (iv) assisting Owner in hiring, terminating
and making other personnel decisions regarding Owner's senior property,
accounting and administration managers and consulting with such managers
regarding personnel decisions relating to their subordinates and the management
and operation of the Owner's business, (v) supervising Owner's senior property
managers in the negotiation of, and reviewing and approving, leases and other
agreements related to the Properties to the extent that Owner's senior property
managers have historically performed such services with respect to the
Properties, (vi) supervising Owner's senior accounting personnel in the
performance of Owner's accounting function, which functions
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may include but are not limited to the preparation of, and reviewing and
approving, financial analysis and reports and tax returns, (vii) supervising
Owner's senior administrative personnel in administering Owner's insurance
program and loan agreements, (viii) reporting to, and consulting with, the
officers of Owner regarding the performance of the Properties, (ix) assisting
Owner in the sale of the Properties as herein provided and (x) performing such
other management, supervisory and oversight functions as the parties may agree
from time to time (collectively, the "Services"). Manager acknowledges that
Owner is in the process of selling the Properties and liquidating its business.
Owner shall have the primary responsibility for such sale, including but not
limited to the preparation of sales materials and financial analysis. Manager
shall assist Owner in such process by consulting with Owner regarding financial
analysis and providing Owner with information regarding the Properties. The
Manger shall not, however, be responsible for the preparation and distribution
of marketing materials, for on-going follow-up with principals and brokers
interested in obtaining additional information about or touring the properties,
for the receipt and negotiation of offers to purchase any or all of the
properties or for coordinating the final due diligence and closing process with
respect to the asset sales.
2. Compensation. In consideration for the provision of the
Services, Owner agrees to pay Manager (i) an annual fee equal to .1% of the
value of the Properties as provided on Exhibit "A" hereto (the "Asset Value")
for the first year of the Term, (ii) an annual fee equal to .125% of the Asset
Value for the second year of the Term, (iii) an annual fee equal to .1875% of
the Asset Value for the third year of the Term and (iv) an annual fee equal to
.25% of the Asset Value for the fourth and each subsequent year of the Term (as
applicable, the "Management Fee"); provided, however, in no event shall the
Management Fee be less than $8,333.33 per month (the "Minimum Fee"). In addition
Owner shall promptly reimburse Manager for third party expenses incurred by
Manager in the performance of the Services. The Management Fee shall be payable
on a monthly basis in arrears on or before the tenth (10th) day of each month
and shall be prorated for partial months or years, as applicable. If any of the
Properties are sold, the Management Fee will be adjusted according to the values
set forth on said Exhibit "A" commencing on the date of such sale.
3. Authority. Owner hereby grants Manager the power and authority
for Manager to carry out Manager's duties under this Agreement, including,
without limitation, to expend funds, and incur obligations, on behalf of Owner
as required in connection with the performance by Manager of its duties
hereunder. Notwithstanding the foregoing, Manager is subject to Owner's
supervision and agrees to consult with Owner in connection with significant
policy decisions for the Properties.
4. Insurance.
4.1 Manager's Insurance. Manager shall maintain, at
Owner's expense, errors and omissions insurance coverage in an amount not less
than One Million Dollars ($1,000,000) (with deductibles, if applicable, in
amounts reasonably acceptable to Manager and Owner) as well as a fidelity bond
in an amount not less than Five Hundred Thousand Dollars ($500,000) (with a
surety company reasonably acceptable to Manager and Owner) at all times during
the
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Term. Said policy and bond shall name Owner as an additional insured, if
applicable, and provide that Owner be given not less than thirty (30) days'
advance notice of any proposed cancellation, non-renewal or material change of
the same.
4.2 Owner's Insurance. All liability insurance policies
maintained by Owner shall name Manager as an additional insured and shall
provide that Manager be given not less than thirty (30) days' advance notice of
any proposed cancellation, non-renewal or material change of the same.
4.3 Waiver of Subrogation. All policies of insurance
maintained by Owner and Manager shall include a waiver of subrogation in favor
of the other party and shall contain a provision to the effect that such
insurance shall not be invalidated or limited if any one or more of the insureds
thereunder waive any or all claims for recovery from the other insured
thereunder to the extent of any recovery collected; and, in addition to any
other limitation of liability expressly set forth in this Agreement, so long as
such provision is in effect, Manager and Owner hereby waive all claims for
recovery from the other parties for any loss or damage insured under such
policies to the extent of any recovery collected by Manager or Owner under such
policies for such loss or damage.
5. Term and Termination.
5.1 Duration. This Agreement shall commence on the date
hereof and continue unless terminated by either party: (i) by ninety (90) days
prior written notice or (ii) otherwise as set forth in this Section 5. The
period during which this Agreement is in effect is referred to hereafter as the
"Term".
5.2 Termination by Owner. Owner may terminate this
Agreement after the occurrence of any of the following (each a "Owner
Termination Event"):
5.2.1 Transfer of Properties. The transfer
(directly or indirectly) to any person or entity other than an
Affiliate of Owner, including, without limitation, a sale of all or
substantially all of the partnership interests in Owner, of all or a
portion of the Properties; provided, however, if such transfer relates
to a portion of the Properties, this Agreement shall only be terminated
with respect to such portion.
5.2.2 Bankruptcy Event. The occurrence of any
Bankruptcy Event with respect to the Manager.
5.2.3 Discontinuance. Owner permanently
discontinues the operation of all or a portion of the Properties
whether on account of damage to or destruction of the Properties, a
taking by (or sale under threat of) eminent domain of a substantial
part of the Properties or otherwise; provided, however, if such
discontinuance relates to a portion of the Properties, this Agreement
shall only be terminated with respect to such portion.
5.2.4 For "Cause". The occurrence of a fraudulent
act by Manager, Manager's misappropriation of funds or the occurrence
of any act or omission which constitutes gross negligence or willful
misconduct by Manager.
5.3 Termination by Manager. Manager may terminate this
Agreement after the occurrence of any of the following (each a "Manager
Termination Event"):
5.3.1 Bankruptcy Event. The occurrence of any
Bankruptcy Event with respect to the Owner.
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5.3.2. Failure to Pay. The failure by Owner to pay
any amount due hereunder when due, provided Manager has provided Owner
with five (5) days written notice of such failure.
5.3.3 For "Cause". The occurrence of a fraudulent
act by Owner or the occurrence of any act or omission which constitutes
gross negligence or willful misconduct by Owner.
5.4. Effect of Termination. Upon the expiration or earlier
termination of this Agreement, Manager shall deliver to Owner all books, records
and materials related to the Properties (provided, however, that Manager shall
be entitled to retain such copies thereof as Manager deems appropriate) and
Owner and Manager shall account to each other with respect to all matters
outstanding and all sums owing each other as of the effective date of
termination.
6. Indemnification.
6.1. Owner Indemnification. Owner agrees to indemnify
Manager against liabilities, losses, interest, damages (excluding consequential
or punitive damages), costs or expenses (including, without limitation,
reasonable attorneys' fees, whether suit is instituted or not, and if
instituted, whether incurred at any trial or appellate level or post judgment)
threatened or assessed against, levied upon, or collected from Manager, arising
out of, from, or in any way related to Manager's performance of its duties under
this Agreement if such liabilities, losses, interest, damages, costs or expenses
were not the result of Manager's negligence, gross negligence or willful
misconduct and if Manager, in good faith, believed that the course of conduct
which caused the liabilities, losses, interest, damages, costs or expenses was,
at the time of such conduct, in the best interests of the Owner.
6.2. Manager Indemnification. Manager agrees to indemnify
and hold the Owner harmless from all liabilities, losses, interest, damages
(excluding consequential or punitive damages), costs or expenses (including,
without limitation, reasonable attorneys' fees, whether suit is instituted or
not and if instituted, whether incurred at any trial or appellate level),
threatened or assessed against, levied upon, or collected from, the Owner
arising from the negligence, gross negligence or willful misconduct of Manager
or any of the agents or employees of Manager. Notwithstanding the foregoing,
Manager shall not be required to indemnify the Owner with respect to any
liability, loss, damage, cost or expense to the extent that the same may be
covered by proceeds of insurance maintained on the Properties by the Owner.
6.3. Indemnification Procedures. A party's duty to
indemnify pursuant to the provision of this Section 6 shall be conditioned upon
the giving of notice by such party of any suit or proceeding and upon the
indemnifying party being permitted to assume in conjunction with the indemnitor,
the defense of any such action, suit or proceeding.
7. Miscellaneous.
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7.1. No Joint Venture. Manager shall not be deemed to be a
partner or a joint venturer with the Owner, nor shall Manager have any
obligation or liability, in tort or in contract, with respect to the Properties,
either by virtue of this Agreement or otherwise.
7.2. Assignment. Neither the Owner nor Manager may assign
this Agreement without the prior written consent of the other unless such
assignment is to an Affiliate thereof with the capacity to carry out the terms
of this Agreement.
7.3. Severability. If any provision of this Agreement, or
the application of such provision to any person or circumstances, shall be held
invalid, the remainder of the Agreement, or the application of such provision to
persons or circumstances other than those to which it is held invalid, shall not
be affected thereby.
7.4. Successors. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns.
7.5. Pronouns. Whenever from the context it appears
appropriate, each term stated in either the singular or the plural shall include
the singular and the plural, and pronouns stated in either the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
7.6. Captions Not Part of Agreement. Captions contained in
this Agreement are inserted only as a matter of convenience and in no way
define, limit or extend the scope or intent of this Agreement or any provisions
hereof.
7.7. Entire Agreement and Amendment. This Agreement
constitutes the entire Agreement between the parties. The parties hereto may
amend this Agreement at any time during the term of this Agreement, but no
amendment shall be effective unless it is in writing by the parties hereto.
7.8. Attorneys' Fees. If any party commences an action
against the other party to interpret or enforce any of the terms of this
Agreement or as the result of a breach by the other party of any terms hereof,
the losing (or defaulting) party shall pay to the prevailing party all
reasonable attorneys' fees, costs and expenses incurred in connection with the
prosecution or defense of such action, including those incurred in any appellate
proceedings, and whether or not the action is prosecuted to a final judgment.
7.9. Further Assurances. Each party agrees to execute and
deliver any and all additional instruments and documents and do any and all acts
and things as may be necessary or expedient to more fully effectuate this
Agreement and carry on the business contemplated hereunder.
7.10. Equitable Remedies. In the event of a breach or
threatened breach of this Agreement by any party, the remedy at law in favor of
the other party may be inadequate and such other party, in addition to any and
all other rights which may be available, shall accordingly
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have the right of specific performance in the event of any breach, or injunction
in the event of any threatened breach of this Agreement by any party.
7.11. Force Majeure. Inability of either party to commence
or complete its obligations hereunder by the dates herein required resulting
from delays caused by strikes, picketing, acts of God, war, emergencies,
shortages or unavailability of materials or other causes beyond either party's
reasonable control which shall have been timely communicated to the other party,
shall extend the period for the performance of the obligations for the period
equal to the period(s) of any such delay(s).
7.12. Third Party Rights. The provisions of this Agreement
are for the exclusive benefit of the parties to this Agreement and no other
party (including without limitation, any creditor of the Owner or Manager) shall
have any right or claim against the Owner by reason of those provisions or be
entitled to enforce any of those provisions against the Owner or Manager.
7.13. Survival. All covenants, agreements, representations
and warranties made herein or otherwise made in writing by any party pursuant
hereto shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
7.14. Remedies Cumulative. The rights and remedies given in
this Agreement and by law to a non-defaulting party shall be deemed cumulative,
and the exercise of one of such remedies shall not operate to bar the exercise
of any other rights and remedies reserved to a non-defaulting party under the
provisions of this Agreement or given to a non-defaulting party by law.
7.15. No Waiver. One or more waivers of the breach of any
provision of this Agreement by any party shall not be construed as a waiver of a
subsequent breach of the same or any other provision, nor shall any delay or
omission by a non-defaulting party to seek a remedy for any breach of this
Agreement or to exercise the rights accruing to a non-defaulting party of its
remedies and rights with respect to such breach.
7.16. Construction. This Agreement shall be interpreted
without regard to any presumption or rule requiring construction against the
party causing this Agreement to be drafted.
7.17. Notice. All notices, requests, consents, and other
communications required or permitted under this Agreement shall be in writing
(including telex and telegraphic communication) and shall be (as elected by the
person giving such notice) telecommunicated, or mailed (airmail if
international) by registered or certified mail (postage prepaid), return receipt
requested, addressed to:
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If to Manager:
Xxxxx Equity, Inc.
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Attention:
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Telecopy No.
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Confirmation No.
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If to Owner:
Xxxxxxx Realty Trust, L.P.
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Attention:
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Telecopy No.
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Confirmation No.
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Each such notice shall be deemed delivered (a) on the date
telecommunicated if by telegraph, (b) on the date of transmission with confirmed
answer back by telex, and (c) on the date upon which the return receipt is
signed or delivery is refused or the notice is designated by the postal
authorities as not deliverable, as the case may be, if mailed.
7.18. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one and the same instrument.
7.19. Governing Law. The nature, validity and effect of
this Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Florida.
7.20. Definitions.
7.20.1 "Affiliate" shall mean an entity, directly
or indirectly, controlling, controlled by or under common control with
such other entity. The term "control" as used in the immediately
preceding sentence, shall mean, with respect to any entity, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management, policies or business of the controlled
entity, including, but not limited to, with respect to a corporation,
ownership of fifty percent (50%) or more of the outstanding shares
thereof or the option to acquire such ownership.
7.20.2 "Bankruptcy Event" means the commencement or
occurrence of any of the following: (a) a case under Title 11 of the
U.S. Code, as now constituted or hereafter amended, or under any other
applicable federal or state bankruptcy law or other similar law, (b)
the appointment of (or a proceeding to appoint) a trustee or receiver
of any property interest, (c) an attachment, execution or other
judicial seizure of (or a proceeding to attach, execute or seize) a
substantial property interest, (d) an assignment
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for the benefit of creditors, (e) the taking of, failure to take, or
submission to any action indicating (after reasonable investigation) an
inability to meet its financial obligations as they accrue or (f) a
dissolution or liquidation; provided, however, that the events
described in subsections (a), (b) or (c) shall not be included if the
same are (i) involuntary and not at any time consented to, (ii)
contested within thirty (30) days of commencement and thereafter
diligently and continuously contested and (iii) dismissed or set aside,
as the case may be, within ninety (90) days of commencement.
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IN WITNESS WHEREOF, the parties have executed this agreement on the
date and year mentioned above.
OWNER:
XXXXXXX REALTY TRUST, L.P.
By: CRT-GP, LLC, its general partner
By: Xxxxxxx Operating Partnership, L.P.,
its member
By: Xxxxxxx Realty Trust Inc., its
general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President
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MANAGER:
XXXXX EQUITY, INC., a Florida corporation
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Chief Executive Officer
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