EXHIBIT 10(F)
CUSTODIAL AGENCY AGREEMENT BETWEEN
XXXXX REAL ESTATE FUND XI, L.P.
AND
THE BANK OF NEW YORK
CUSTODIAL AGENCY AGREEMENT
--------------------------
GEORGIA, XXXXXX COUNTY
THIS AGREEMENT made and entered into as of the 15th day of September, 1997, by
and between XXXXX REAL ESTATE FUND XI, L.P., a Georgia limited partnership
(hereinafter called "Principal"), party of the first part, and THE BANK OF NEW
YORK, a national banking association with an office and place of business in
Atlanta, Xxxxxx County, Georgia (hereinafter called "Agent"), party of the
second part.
W I T N E S S E T H :
WHEREAS, Principal was formed for the purpose of acquiring, developing,
constructing, owning, operating, improving, leasing and otherwise managing for
investment purposes, either alone or in association with others, a diversified
portfolio of income-producing commercial or industrial properties; and
WHEREAS, in order to obtain funds to acquire such properties, Principal will
be conducting an offering of its limited partnership units; and
WHEREAS, Principal desires to place all funds obtained from investors
representing proceeds from the sale of its limited partnership units, all
properties to be acquired by Principal and the net proceeds from the resale of
all such properties in the custody of Agent to hold as agent for Principal; and
WHEREAS, Agent is willing to provide such services and undertake the duties
and responsibilities hereinafter set forth.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the delivery and receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Cash obtained from investors representing proceeds from the sale of
limited partnership units will be held and maintained as follows:
(a) All checks obtained from investors representing proceeds from the
sale of limited partnership units in Principal will be deposited
by or on behalf of Principal into an account entitled "The Bank
of New York, as Agent for Xxxxx Real Estate Fund XI, L.P." (the
"Custodial Account").
(b) Twenty percent (20%) of such proceeds (representing selling
commissions, organizational and offering expenses, acquisition
and advisory fees and certain acquisition expenses) shall
immediately be redeposited into a separate account in the name of
Principal (the "Partnership Account").
(c) The remaining eighty percent (80%) of such proceeds held in the
Custodial Account will be invested at the direction of Principal
in short-term, highly liquid investments such as government
obligations, bank or savings and loan association certificates of
deposit, short-term debt obligations and interest-bearing
accounts
(cash amounts in the Custodial Account and the principal amount
of such investments shall collectively be referred to herein as
"Liquid Proceeds Available for Investment").
(d) All interest and other income earned on the Liquid Proceeds
Available for Investment (the "Income Earned on Liquid Proceeds")
will be transferred to and deposited in the Partnership Account
on a monthly basis.
2. Liquid Proceeds Available for Investment held by Agent for Principal
for the purpose of acquiring properties on behalf of Principal shall
be disbursed as follows:
(a) At such time as a specific property to be acquired by Principal
is identified, Principal shall designate such property to Agent
by written instructions identifying the property to be acquired,
setting forth the seller and the purchase price and containing
specific instructions that Agent is authorized to disburse funds
to such seller for the acquisition of such property, as
contemplated by paragraph 2(b) below. In the event that such
property to be acquired by Principal will be owned in co-
ownership with a person or entity which has not entered into a
Custodial Agency Agreement with Agent, as provided in paragraphs
2(e) and 2(g) below, such written instructions to Agent shall
also specify whether such property is to be held in a joint
venture, in a partnership, as an undivided interest or as a co-
tenant and shall set forth Principal's percentage ownership
interest in such property, in which event Agent shall only be
obligated to disburse funds under this paragraph 2 in amounts
equalling Principal's percentage ownership interest therein.
(b) Upon obtaining written instructions from Principal, Agent shall
be authorized and required to disburse Liquid Proceeds Available
for Investment for the acquisition of such property; provided,
however, that Agent shall be prohibited from disbursing Liquid
Proceeds Available for Investment unless and until it has (i)
obtained written instructions from Principal and (ii) obtained a
copy of an appraisal from an independent appraiser for each
property to be purchased on behalf of Principal, with the
purchase price of each such property not to exceed its appraised
value.
(c) Upon obtaining written instructions from Principal to such
effect, Agent shall also be authorized and required to disburse
Liquid Proceeds Available for Investment to pay any and all deed
taxes, transfer taxes, recording costs, title insurance premiums,
fees of Principal's attorneys, appraisers, surveyors or other
agents and other closing costs relating to the acquisition of
properties, or to reimburse or pay Agent for costs and expenses
required to be reimbursed or paid pursuant to paragraph 8(b)
below. In addition, in connection with contracting to acquire
properties, upon obtaining written instructions from Principal to
such effect, Agent shall be authorized and required to disburse
Liquid Proceeds Available for Investment to fund any and all
xxxxxxx money payments or xxxxxxx money deposits required
pursuant to the terms of any contract to acquire property entered
into by Principal. Anything herein to the contrary
notwithstanding,
2
Agent shall not be required to advance its own funds to pay any
of such costs and expenses.
(d) In connection with the acquisition of properties on behalf of
Principal, Agent shall be required to execute and deliver such
contracts, agreements (including in the case of properties
acquired as a co-tenant, co-tenancy agreements), leases,
assignments, assumptions, certificates, closing statements and
other real estate acquisition documents as may be reasonably
necessary or appropriate in connection with such property
acquisitions. At least five (5) business days prior to the
closing of any acquisition of properties hereunder, Principal
shall deliver to Agent proof of insurance, copies of
environmental reports and title commitments and drafts of all
closing documents which Agent shall be required to execute and
deliver hereunder. At closing, Principal shall obtain title
insurance insuring Agent's interest in the property acquired.
Anything herein to the contrary notwithstanding, Agent shall not
be required to execute any documents hereunder unless such
documents are satisfactory in form and content to Agent and its
counsel.
(e) Title to properties acquired on behalf of Principal shall be held
in the name of "The Bank of New York, as Agent for Xxxxx Real
Estate Fund XI, L.P." It is the intent of the parties hereto (i)
that while legal title may be held in the name of Agent, Agent
will be holding legal title as agent for Principal only, and
equitable title and all beneficial ownership of the properties
acquired and held hereunder shall remain in Principal, and (ii)
that Principal, not Agent, shall be responsible for any and all
liabilities and obligations, including specifically any
environmental liabilities, relating to properties acquired and
held hereunder. Agent shall be authorized to hold title to real
properties on behalf of Principal in any legally recognized form,
including without limitation, in fee simple, undivided interests,
as a co-tenant, or as a lessee. Agent shall be authorized to
hold title to an undivided interest in property or as a co-tenant
without regard to whether or not the other party or parties
holding title to undivided interests or as a co-tenant in such
property has entered into a Custodial Agency Agreement with
Agent.
(f) Upon obtaining written instructions from Principal, Agent shall
be authorized and required to disburse Liquid Proceeds Available
for Investment for the acquisition of properties to be acquired
on behalf of any joint venture between Principal and any
affiliated limited partnership or other person or entity, which
shall have also executed a Custodial Agency Agreement with Agent.
Title to properties acquired on behalf of any such joint venture
or partnership or title to Principal's joint venture or
partnership interest shall be held in the name of "The Bank of
New York, as Agent for [insert name of joint venture or Principal
-----------------------------------------
(as appropriate)]." Notwithstanding the foregoing, all fees
----------------
payable to Agent hereunder shall continue to be the ultimate
responsibility of Principal and any such affiliated limited
partnership or other person or entity pursuant to the terms of
its Custodial Agency Agreement with Agent.
3
(g) Upon obtaining written instructions from Principal, Agent shall
be authorized and required to disburse Liquid Proceeds Available
for Investment for the acquisition of properties to be acquired
by a joint venture or partnership between Principal and a person
or entity which has not entered into a Custodial Agency Agreement
with Agent, under the following conditions: (i) Title to the real
estate shall be in the name of the joint venture or partnership,
and title to the joint venture or partnership interest of
Principal shall be held in the name of "The Bank of New York, as
Agent for Xxxxx Real Estate Fund XI, L.P.;" and (ii) Principal
hereby represents, warrants, covenants and agrees with Agent that
it will not enter into any such joint venture or partnership
unless the joint venture or partnership agreement governing any
such joint venture or partnership contains the following
provisions: (a) the sale of any Acquired Property owned by any
such joint venture or partnership shall require Principal's
consent, (b) the net proceeds from the sale of any Acquired
Property owned by any such joint venture or partnership shall be
allocated to the joint venturers or the partners, as the case may
be, in accordance with their respective capital contributions to
the joint venture or the partnership, and (c) Principal's pro
rata share of any such net proceeds from any such sale of an
Acquired Property owned by any such joint venture or partnership
shall be delivered to Agent to be disbursed pursuant to the terms
and conditions of this Agreement.
(h) In connection with the acquisition of a property which is to be
constructed, developed or completed, upon obtaining written
instructions from Principal, Agent shall be authorized and
required to disburse Liquid Proceeds Available for Investment for
the acquisition, construction, development and completion of such
property, including without limitation, disbursements to
contractors, developers and suppliers, payments for bonds,
progress payments or other cash advances to developers and
builders, so long as the aggregate amount disbursed with respect
to such property to be constructed, developed or completed does
not exceed the appraised value of such property as indicated by
an "as built" appraisal provided to Agent pursuant to paragraph
2(b) above or any revision or amendment to any such appraisal.
Such written instructions from Principal shall be made by
delivery to Agent of a written requisition in the form attached
as Exhibit "A" hereto. Agent shall be entitled to rely upon any
such requisition from Principal, and Agent shall have no
liability for disbursements made in accordance with any such
requisition received from Principal.
(i) Liquid Proceeds Available for Investment, which are not disbursed
by Agent for the purchase of properties, shall continue to be
held by Agent in the Custodial Account, or upon receiving written
instructions from Principal to such effect, will be disbursed to
the partners of Principal by Agent upon receipt of and pursuant
to a list from Principal setting forth the names, amounts to be
disbursed and addresses of the partners of Principal pursuant to
the procedures described in paragraph 4(e) below. Agent shall
incur no liability for disbursements made in accordance with the
provisions of this paragraph 2(i).
3. Properties acquired and held by Agent for Principal or acquired and
held by any joint venture or partnership in which Agent holds title to
Principal's joint venture or
4
partnership interest during the term of this Agreement (Principal's
interest in any and all properties acquired pursuant to the terms of
this Agreement, whether acquired in fee simple, an undivided interest
therein, as a co-tenant, as a lessee, in a joint venture, in a
partnership or otherwise, shall collectively be referred to herein as
the "Acquired Properties") shall be managed and operated as follows:
(a) The Acquired Properties shall be managed by Xxxxx Management
Company or by such other management company as may be designated
by Principal.
(b) During the holding period of the Acquired Properties, all
management duties and obligations will be the responsibility of
Principal, and it is agreed that Agent shall have no management
duties or responsibilities with regard to the Acquired
Properties. It is hereby acknowledged and agreed that Agent
shall not be obligated or required to inspect any of the Acquired
Properties or to monitor performance of the manager with respect
to any of the Acquired Properties. During the holding period of
the Acquired Properties, it shall be the responsibility of
Principal, rather than Agent, to execute and enter into leases
and all other agreements with tenants at the Acquired Properties,
and it is agreed that Principal shall be authorized to execute
and enter into leases, lease modifications, amendments to leases,
lease renewals and extensions and any and all other contracts and
agreements with tenants or others relating to the leasing,
management and operations of the Acquired Properties and that
Principal shall have the authority to grant leasehold interests
in the Acquired Properties to tenants, without any action being
required by Agent.
(c) During the holding period of the Acquired Properties, all rents,
revenues and other income relating to the Acquired Properties
shall be payable directly to Principal, and Principal shall be
responsible for paying all operating expenses, maintenance,
repairs, taxes, insurance and liabilities relating to the
Acquired Properties and for making all cash flow distributions to
its partners.
(d) During the holding period of the Acquired Properties and upon
receiving written instructions from Principal, Agent shall be
required to execute, deliver and file any property tax returns or
other instruments or documents which may be reasonably necessary
or appropriate in connection with the management and operation of
the Acquired Properties which are satisfactory to Agent in form
and content.
(e) Principal shall provide Agent with evidence of insurance and
evidence of payment of property taxes with respect to each of the
Acquired Properties on an annual basis. Agent shall be named as
an additional insured on all policies relating to Acquired
Properties. The type, amount and insurer of such policies must
be satisfactory to Agent.
5
4. Acquired Properties shall be resold as follows:
(a) At such time as Principal determines to sell one of the Acquired
Properties, Principal shall provide written instructions to Agent
identifying the property and setting forth the purchaser and the
sales price.
(b) Upon obtaining written instructions from the Principal that one
of the Acquired Properties will be sold, Agent shall be
authorized and required to attend the closing of such sale (if
required), to execute and deliver such deeds, assignments,
affidavits, certificates, contracts, agreements, closing
statements and other real estate transfer documents as may be
reasonably necessary or appropriate in connection with any such
sale, which are satisfactory to Agent in form and content, and to
provide such authorizations, consents (which authorizations and
consents are satisfactory in form and content to Agent) and legal
opinions as the purchaser of any property to be sold or title
insurance company may reasonably require; provided, however, that
Agent shall be prohibited from causing any of the Acquired
Properties to be sold until it has (i) obtained written
instructions from Principal, and (ii) obtained a copy of an
appraisal from an independent appraiser for each property to be
sold, with the sales price of each such property to be sold to be
not less than ninety percent (90%) of its appraised value.
Anything herein to the contrary notwithstanding, Agent shall not
be required to disburse or advance any of its own funds
hereunder.
(c) In connection with any sale of one of the Acquired Properties,
all transfer taxes, deed taxes, intangible taxes, stamp taxes,
recording fees, title insurance premiums, attorneys' fees of
Principal, costs required to be paid or reimbursed to Agent
pursuant to paragraph 8(a) below and other closing costs
(collectively, the "Closing Costs") will normally be paid or
reimbursed at closing out of the net proceeds from any such sale;
however, pursuant to the written instructions of Principal, Agent
shall be authorized to pay any Closing Costs not paid out of the
net proceeds from any such sale of one of the Acquired Properties
out of funds in the Custodial Account, and any excess of such
Closing Costs not paid out of the net proceeds from such sale or
from the Custodial Account shall be paid by Principal. Anything
herein to the contrary notwithstanding, in no event shall Agent
be obligated or required to disburse or advance its own funds
hereunder.
(d) Upon the closing of any sale of an Acquired Property, Principal's
allocable share of the net proceeds from any sale of an Acquired
Property (the "Net Sale Proceeds") shall be delivered to Agent
and immediately deposited into the Custodial Account.
(e) Net Sale Proceeds will be disbursed to the partners of Principal
directly by Agent upon receipt of and pursuant to a list from
Principal setting forth the names, amounts to be disbursed and
addresses of the partners of Principal, accompanied by an agreed
upon procedures letter from the accounting firm currently being
engaged by Principal, which shall include agreed upon procedures
substantially similar to the following: (i) confirmation of
their original investment amounts
6
with all individual investors holding investments of $100,000 or
greater in Principal and a sample of the remaining investors as
of the transaction date; (ii) recalculation of each investor's
proportionate ownership percentage in Principal based upon each
investor's original investment; and (iii) recalculation of the
amount of Net Sale Proceeds to be disbursed to each investor
based upon such investor's proportionate ownership percentage in
Principal. Agent shall be entitled to rely on such list from
Principal and agreed upon procedures letter and shall incur no
liability for disbursements made in accordance with the
provisions of this paragraph 4(e). Principal shall furnish to
Agent all information which Agent shall reasonably request in
order to enable Agent to prepare the information which Agent is
required to report, if any, on an Internal Revenue Service Form
1099. Agent shall have no responsibility for tax reporting except
to the extent specifically required under the Internal Revenue
Code. Agent shall be entitled to reasonable fees and expenses in
performing its obligations under this paragraph 4(e) which shall
be in addition to its ordinary fees and expenses hereunder, and
Principal hereby agrees to pay such additional fees and expenses,
if any.
5. Duties of Agent:
(a) Agent shall in all instances hold itself out as agent and not as
principal in all dealings with third parties.
(b) Agent hereby agrees that all funds, assets and properties held by
Agent on behalf of Principal pursuant to this Agreement,
including without limitation, funds in the Custodial Account,
Liquid Proceeds Available for Investment, the Acquired Properties
and Net Sale Proceeds, are assets of Principal and shall not be
subject to the rights of any creditors of Agent.
(c) It is understood and agreed that, by entering into this Agreement
with Agent, neither Principal nor its general partners are in any
way contracting away their fiduciary duties to their partners
under Principal's partnership agreement or under common law.
Agent shall not be bound to make any investigation into the facts
or matters stated in any certificate, statement, instrument,
opinion, report, notice, request, direction or other paper or
document, but Agent, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may
deem appropriate. Agent shall not be held to take notice of the
terms of the limited partnership agreement of Principal or any
other agreement, document, instrument or writing to which
Principal is bound, and Agent shall have no responsibility for
providing tax returns, tax information or other reports to the
limited partners of Principal.
(d) With respect to all funds, assets and properties held by Agent on
behalf of Principal pursuant to this Agreement, Agent shall use
and apply such assets, funds or properties only for the exclusive
benefit of Principal. Agent shall hold and safekeep funds
received as proceeds from the sale of limited partnership units
in Principal, together with such other funds as may come into its
hands by reason of additions made thereto by Principal, in its
custody and control.
7
(e) With respect to funds received as proceeds from the sale of
limited partnership units, Agent shall collect the interest,
dividends, issues and income therefrom, as the same become due
and payable, and transfer or deposit same into the Partnership
Account as set forth in paragraph 1(d) above.
(f) With respect to Liquid Proceeds Available for Investment, as
defined in paragraph 1(c) above, Agent shall hold and safekeep
such funds, together with such other funds as may come into its
hands by reason of additions made thereto by Principal, in its
custody and control, and Agent's sole duty with respect thereto
shall be to disburse said funds pursuant to paragraph 2 above.
(g) With respect to Net Sale Proceeds, as defined in paragraph 4(d)
above, Agent shall hold and safekeep such funds, together with
such other funds as may come into its hands by reason of
additions made thereto by Principal, in its custody and control,
and Agent's sole duty with respect thereto shall be to disburse
said funds pursuant to paragraph 4 above.
(h) Agent shall have no duty with respect to any stock rights or
warrants, proxies, ballots, annual statements or other papers or
documents received by reason of its holding of securities, if
any, subject to this Agreement except that Agent shall promptly
notify Principal of the receipt of any such stock rights,
warrants, proxies, statements or other papers or documents and
shall thereafter take such action as Principal may direct.
(i) Agent shall be authorized to register any stock, bond,
partnership interest or other security in the name of nominee, or
to deposit any such security with a registered securities
depository or in the book entry system of the Federal Reserve
System with or without disclosure of any custodian relationship,
but accurate records shall be maintained showing that such
security is a custodial asset.
(j) With respect to the management and operation of the Acquired
Properties, Agent shall have no obligation whatsoever with
respect to maintaining the Acquired Properties, and it is agreed
that Agent shall have no management duties or responsibilities
whatsoever with regard to the management or operation of the
Acquired Properties. Agent's sole duty with regard to the
management and operation of the Acquired Properties shall be to
hold title as agent for Principal and to convey, assign or
encumber the Acquired Properties and disburse proceeds therefrom
only as directed by Principal pursuant to paragraph 4 above.
(k) No provision of this Agreement shall require Agent to expend or
risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder.
6. Indemnification:
(a) In performing its duties, Agent will serve Principal's interest
with loyalty. Agent, however, shall not be required to render
any legal services or to institute
8
or defend any legal proceedings in connection with this Agreement
or any of the properties held by Agent. Agent undertakes to
perform such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations
shall be read into this Agreement against Agent.
(b) In performing any of its duties hereunder, Agent shall not incur
any liability to anyone for damages or losses, and Agent shall
not be liable for any damages with respect to any matter in
connection herewith, except for gross negligence or willful
misconduct by Agent. Agent shall have no liability in connection
with any act taken or omitted in good faith at the request or
instruction of Principal. Agent shall have no liability for or
in connection with any financial losses due to the investment of
any funds in any accounts approved by Principal pursuant hereto.
(c) Principal agrees to protect, indemnify and save Agent and its
officers, agents, directors and employees (each, an "Indemnified
Party" and collectively, the "Indemnified Parties") harmless from
and against all liability, losses, damages, costs, expenses
(including reasonable attorneys' fees and expenses), taxes,
causes of action, suits, claims, demands and judgments of any
nature or form, by or on behalf of any person, firm or
corporation, arising in any manner out of or in connection with:
(i) any of the Acquired Properties or any part thereof or
any work done on any of the Acquired Properties or the
operation of any of the Acquired Properties, or
(ii) any breach or default on the part of Principal in the
performance of any of its obligations hereunder, or
(iii) any act of negligence of any person or entity in
connection with their use, occupancy or operation of any of
the Acquired Properties, or
(iv) any violation of law, ordinance or regulation affecting
any of the Acquired Properties or the ownership, occupancy
or use thereof, or
(v) any condition of any part of the improvements on any of
the Acquired Properties or the adjoining sidewalks and
passageways, or
(vi) any accident, injury or damage whatsoever caused to any
person, firm or corporation in or about any of the Acquired
Properties, or
(vii) any untrue statement or misleading statement or alleged
untrue statement or alleged misleading statement of a
material fact contained in any disclosure materials
prepared in connection with any transaction contemplated in
this Agreement, or any omission or alleged omission from
such disclosure materials of any material fact necessary to
be stated therein in order to make the statements made
therein, in light of the circumstances under which they
were made, not misleading, or
9
(viii) performance by Agent of its duties hereunder or the
failure by Agent to perform its duties hereunder.
Anything herein to the contrary notwithstanding, the indemnity
provided herein shall not cover losses resulting from the gross
negligence or willful misconduct of Agent. If any of the
Indemnified Parties is made a party defendant to any litigation
concerning any of the Acquired Properties or the occupancy
thereof or concerning this Agreement, in any way, Principal
hereby agrees to protect, indemnify, defend and hold the
Indemnified Parties harmless from and against any and all
liability by reason of such litigation, including reasonable
attorneys' fees and expenses incurred by each of the Indemnified
Parties, whether or not such litigation is prosecuted to
judgment. If any Indemnified Party commences an action against
Principal to enforce any of the terms of this Agreement or any
document executed and delivered in connection herewith, as a
result of the breach by Principal of any of such terms, Principal
agrees to pay to such Indemnified Party reasonable attorneys'
fees and expenses in connection with such action, and the right
to such attorneys' fees and expenses shall be enforceable whether
or not such action is prosecuted to judgment; provided, however,
the right to such attorneys' fees and expenses shall not apply to
any action that is voluntarily dismissed with prejudice by the
Indemnified Party or that is decided adversely to such
Indemnified Party. If Principal breaches any terms of this
Agreement or any of the documents executed in connection herewith
and an Indemnified Party should employ an attorney or attorneys
to protect its rights in connection with any such breach (to
which employment Principal hereby consents), Principal agrees to
pay the attorneys' fees and expenses of the Indemnified Party so
incurred, whether or not any action is actually commenced against
Principal by reason of such breach.
The indemnity provided herein shall extend, without limitation,
to any and all expenses whatsoever reasonably incurred by the
Indemnified Party in connection with investigating, preparing for
or defending against, or providing evidence, producing documents
or taking any other reasonable action in respect of any suit,
claim, demand or judgment, whether or not resulting in any
liability, and shall include any loss to the extent of the
aggregate amount paid in settlement of any litigation, commenced
or threatened, of any claim whatsoever as set forth herein if
such settlement is effected with the written consent of
Principal. The indemnity provided herein shall survive any
termination of this Agreement and shall continue in full force
and effect following any such termination.
(d) Whenever in the administration of its duties under this
Agreement, Agent shall deem it desirable that a matter be proved
or established prior to taking, suffering or admitting any action
hereunder, Agent (unless other evidence herein be prescribed)
may, in the absence of bad faith on its part, rely upon a
certificate from Principal. In connection with any instructions
or directions from Principal, Agent shall be entitled to rely
upon instructions or directions from any general partner of
Principal. Except as specifically set forth herein, any
direction by Principal to Agent pursuant to the terms of this
Agreement may be oral or written, but all oral instructions shall
be confirmed in writing immediately.
10
Cables, bank wire messages, telegrams, facsimile transmissions
and other such communication forms shall be deemed to be in
writing. Agent is hereby relieved from all liability for acting
upon any such direction received by Agent and believed by Agent
to be from a general partner of Principal and to be genuine.
(e) Agent may rely and shall be protected in acting or refraining
from acting upon any certificate, statement, instrument, opinion,
report, notice, request or direction believed by it to be genuine
and to have been signed and presented by the proper party or
parties. Agent may consult with counsel with respect to any
action taken or to be taken hereunder, and an opinion of counsel
or the written advice from such counsel shall be full and
complete authorization and protection with respect to any action
taken, suffered or admitted by it hereunder in good faith and in
reliance thereon. Principal shall be required to pay reasonable
fees and expenses of counsel retained by Agent hereunder.
(f) Principal hereby indemnifies and holds Agent and its officers,
directors, employees and agents (each, an "Indemnified Party" and
collectively, the "Indemnified Parties") harmless from and
against any and all damages, penalties, fines, claims, liens,
suits, liabilities, costs (including clean-up costs), judgments
and expenses (including reasonable fees and expenses of
attorneys, consultants or experts) of every kind and nature
suffered by or asserted against Agent and relating to any of the
Acquired Properties and any Environmental Laws or the violation
or alleged violation of any Environmental Laws. For purposes of
this Agreement, "Environmental Laws" shall mean the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 42
U.S.C., Section 9601 et seq., as amended, the Hazardous Materials
Transportation Act 49 U.S.C., Section 1801 et seq., as amended,
the Resource Conservation and Recovery Act, 42 U.S.C., Section
6901 et seq., as amended, the Toxic Substance Control Act of 1976
14 U.S.C., Section 2601 et seq., as amended, the Clean Water Act,
33 U.S.C., Section 466 et seq., as amended, the Clean Air Act, 42
U.S.C., Section 7401 et seq., as amended, and any other federal,
state or local law, statute, ordinance or regulation similar to
those set forth in this definition. The indemnity provided
herein shall survive any termination of this Agreement and shall
continue in full force and effect following any such termination.
7. As compensation for its services hereunder, Agent shall receive the
fees set forth in Schedule A hereto.
8. Costs and Expenses of Agent:
(a) Agent shall be entitled to retain counsel to review documentation
involved in connection with the acquisition or sale of Acquired
Properties and to advise Agent in connection with the performance
of its duties hereunder, with reasonable attorneys' fees of Agent
to be payable or reimbursed by Principal pursuant to the
provisions of paragraph 8(b) below.
(b) All reasonable out-of-pocket expenses of Agent and its attorneys,
such as the cost of checks, postage, insurance, telephone,
telegraph, etc., and reasonable
11
attorneys' fees of Agent (subject to the approval of Principal,
which approval shall not be unreasonably withheld) shall be paid
by Principal, or if not paid directly by Principal, shall be
reimbursed out of Liquid Proceeds Available for Investment, in
the case of property acquisitions, or out of the net proceeds
from any sale of an Acquired Property, in the case of sales of
Acquired Properties. In no event shall Agent be obligated or
required to disburse or advance its own funds hereunder.
(c) In the event of a disagreement between the parties to this
Agreement or in the event that Agent shall receive notice of
conflicting claims to any monies, properties, securities or other
amounts held by Agent hereunder, Agent shall have the right, in
addition to all other rights described herein, at the option of
Agent, to tender into the registry or custody of any court having
jurisdiction, all such monies, properties, securities and other
amounts and to take such other legal action as Agent may deem
necessary or appropriate.
9. Term:
(a) The term of this Agreement between Principal and Agent shall be
until the sale or other disposition of the last of the Acquired
Properties and the disbursement by Agent of the Net Sale Proceeds
obtained therefrom.
(b) Subject to the provisions of paragraph 9(c) below, either party
shall have the right to terminate this Agreement upon providing
at least ninety (90) days prior written notice to the other
party.
(c) Notwithstanding the foregoing, no termination of this Agreement
by Agent shall be effective unless and until a successor agent
acceptable to Principal is obtained. In the event this Agreement
is terminated by Agent, Agent agrees to continue to act as agent
for Principal hereunder until a suitable successor is obtained.
Upon the obtaining of a suitable successor, Agent will then
transfer to such successor all Acquired Properties, Liquid
Proceeds Available for Investment and other funds, assets and
properties held as agent for Principal hereunder. In the event a
successor agent has not been appointed within ninety (90) days
following written notice to Principal of Agent's intention to
resign, the resigning Agent shall be entitled to petition a court
of competent jurisdiction for the appointment of a successor
agent hereunder.
10. All constructions and interpretations of this Agreement and the
rights, duties and liabilities of the parties hereunder shall be
determined in accordance with the laws of Georgia.
12
IN WITNESS WHEREOF, the parties have hereunto set their hands and affixed
their seals the day and year first above written.
PRINCIPAL:
---------
XXXXX REAL ESTATE FUND XI, L.P.
A Georgia Limited Partnership
By: Xxxxx Partners, L.P.
A Georgia Limited Partnership
(General Partner)
By: Xxxxx Capital, Inc.
A Georgia Corporation
Attest: (General Partner)
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxx X. Xxxxx, III
--------------------------- -------------------------------------
Name: Xxxxx X. Xxxxxx Xxx X. Xxxxx, III
Title: Assistant Secretary President
By: /s/ Xxx X. Xxxxx, III
-------------------------------------
Xxx X. Xxxxx, III
General Partner
AGENT:
-----
Attest: THE BANK OF NEW YORK
By: /s/ Julz Xxxxxxx By: /s/ Xxxxx X. XxXxxxxxx
--------------------------- -------------------------------------
Name: Julz Xxxxxxx Name: Xxxxx X. XxXxxxxxx
Title: As Agent Title: As Agent
13
SCHEDULE A
TO
CUSTODIAL AGENCY AGREEMENT
SCHEDULE OF FEES
XXXXX REAL ESTATE FUND XI, L.P.
$500.00 Acceptance Fee
Five Basis Points of Market Value Annual Administration
($500 per $1,000,000 held)
$800.00 Minimum Annual
Administration
Fees payable annually in advance upon funding of account.
An investment fee of $35.00 per purchase/sale transaction. If no-load money
market funds are utilized, the charge for buying into or redeeming from the
funds is waived. An automated cash management fee of .35% on assets held in the
fund is charged for automatic same day's movement of uninvested cash into the
funds and automatic withdrawal from the funds to cover disbursement. This fee
is posted to the account as a debit to income earned.
Charges for filing reports or information as may be required by Internal Revenue
Service regulations, or for the performance of any services not contemplated at
the time of opening account, or not of a routine administrative nature, or not
specifically covered in this schedule, will be determined by appraisal.
Actual out-of-pocket expenses such as counsel fees, cost of special checks,
postage, insurance, telephone, telegraph, etc. will be billed at cost.
Fee structure subject to review in three years.
