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EXHIBIT 10.3
EXCLUSIVE LEASING
AND
MANAGEMENT AGREEMENT
This EXCLUSIVE LEASING AND MANAGEMENT AGREEMENT (the "Agreement") is made
and entered into this 1st day of October, 1994, by and between XXXXXXX
PROPERTIES, INC. (hereinafter referred to as "Agent"), and XXXXX XXXXXXX PUBLIC
FUND LIMITED PARTNERSHIP (hereinafter referred to as "Owner").
Owner is the owner of a tract of real property and improvements, including
a two-story office building containing approximately 39,000 square feet of
rentable space and a paved and lighted parking area, the real property and
improvements being known and designated as United Carolina Bank Building being
located at 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxxxx
(hereinafter referred to as the "Premises").
Owner wishes to employ Agent to render professional services in the
leasing, operation, and management of the Premises.
In consideration of the mutual covenants, conditions, and promises set
forth herein, Owner and Agent agree as follows:
1. Appointment of Agent. Owner hereby appoints Agent as its exclusive
agent to lease, manage, operate and maintain the Premises in accordance with
the terms of this Agreement.
2. Term of Appointment. This Agreement shall become effective as of the
date of this Agreement, and shall continue in full force and effect until
December 31, 1995. Thereafter, the term of this Agreement shall continue and
be extended, without notice or any further action by either of the parties, for
consecutive periods of one (1) year each unless either Owner or Agent shall, by
written notice given to the other party at least thirty (30) days prior to the
expiration of the original term or the then existing extension term thereof,
cancel this Agreement.
Notwithstanding the above, either Owner or Agent shall have the express
right to terminate this Agreement for any reason at any time upon the giving of
at least sixty (60) days written notice to the other party of said terminating
party's intent to terminate the Agreement (the "Termination Notice"). In the
event such Termination Notice is given, this Agreement shall terminate on the
date specified in such Termination Notice, but not less than sixty (60) days
from the date of said Termination Notice.
3. Duties of Agent. Agent agrees to lease, operate and manage the
Premises on the terms provided herein for and on behalf of Owner and to
perform the following duties in connection with the lease, operation and
management of the Premises:
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3.1 Budgets. Agent will prepare and submit to Owner a proposed budget for
the next calendar year following the date of this Agreement, showing estimated
monthly gross receipts and disbursements. Thereafter, during the term of each
calendar year of this agreement, Agent shall prepare and submit a budget for on
or before November 1 of each year for the following calendar year. When
approved by Owner, Agent shall implement such budgets and shall be authorized,
without any further approval by Owner, to make the expenditures and incur the
obligations provided for in such budgets. In the event Owner fails to notify
Agent of Owner's approval or disapproval of a budget within thirty (30) days
following the submission of such budget by Agent, the budget shall be deemed
approved by Owner in the form submitted until otherwise agreed to by Owner and
Agent.
3.2 Reports. Agent will render a monthly statement of receipts,
disbursements and charges to Owner to the attention of the following person(s)
at the address(es) shown:
Name Address
----------------- -----------------------------
Xxxxxxx X. Xxxxxx Internet Services Corporation
P. O. Xxx 000000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
3.3 Maintenance and Repairs. Agent shall at Owner's expense maintain the
Premises in accordance with the obligations of Owner to tenants of the Premises
as set forth in the leases entered into by and between Owner and such tenants
and shall make or cause to be made such ordinary repairs to the Premises as
Agent shall deem necessary and proper. All such maintenance and repairs shall
be at the sole cost and expense of Owner and may be deducted by Agent from the
gross revenues derived from the operation of the Premises. In the event
disbursements by Agent for such maintenance and repairs exceed gross revenues,
Owner shall promptly reimburse Agent for such excess on demand. Nothing herein
shall require Agent to advance its own funds for such maintenance and repairs.
Agent's duties shall not include the obligation to repair damage to the
Premises caused by fire, wind, flood or other casualty if the cost of such
repairs exceeds the sum of $1,000. In the event that Agent hereafter agrees to
supervise any such repairs in excess of the sum of $1,000, Agent shall be
compensated for such supervision as provided in Paragraph 5 hereof.
3.4 Collection of Monies. Agent will take all proper and necessary action
to enforce leases with tenants of the Premises and to collect rent and other
charges due from such tenants. No provision hereof shall constitute a
guarantee by Agent of the payment of rent or of the performance of any other
obligation by any tenant of the Premises. All monies collected by Agent on
behalf of Owner shall be deposited in Agent's trust account as described below.
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3.5 Accounting Records. Agent shall maintain in a manner consistent with
good accounting practices a system of books and records in to which shall be
entered each financial transaction with respect to the operation of the
Premises. Owner shall have access to such records during Agent's regular
office hours, and Owner's accountant shall have the right to audit such books
and records. The records maintained by Agent shall include (1) operation
budgets, (2) statements of monthly operations, (3) record of budget to actual
expenditures, both monthly and year-to-date, (4) variance reports, and (5)
monthly income statements.
3.6 Trust Account. Agent shall deposit all funds collected from tenants
or other sources with respect to the leasing, operation, and management of the
Premises in a trust account, separate from Agent's personal accounts. The
trust account may be used by Agent for operation and maintenance of the
Premises. All monies deposited by Agent from time to time shall be deemed to
be trust funds and shall be and remain the property of Owner and shall be
disbursed by Agent for the account of Owner only as permitted by this
Agreement. Agent may endorse any and all checks drawn to the order of Owner
for deposit in the trust account. Owner shall at its expense cause a
reasonable reserve of not less than $1,500 to be maintained in Agent's trust
account at all times for payment of anticipated operating expenses.
3.7 Fidelity Insurance. Agent shall procure fidelity insurance coverage
in an amount determined by Agent conditioned upon the performance of Agent's
duties and the due accounting for all funds received or collected by Agent for
Owner and for other clients of Agent. Owner shall be named as an insured under
such fidelity insurance policy.
3.8 Leasing. Agent shall perform on behalf of Owner all services
necessary for the leasing of space in the Premises to tenants including:
preparing rental rates; preparing lease documents; procuring and investigating
prospective tenants; conducting preliminary negotiations and preparing and
obtaining execution by prospective tenants of all proposed leases.
3.9 Advertising. Agent shall be responsible for marketing and advertising
the Premises during the term of this Agreement, including preparation of rental
signs and other forms of advertising.
Agent shall have no responsibility to perform any of the duties stipulated
herein requiring payment of monies in excess of the balance of the Agent's
trust account described in Paragraph 3.6 hereof. Owner agrees that should
Agent make expenditures in excess of such balance performing its duties, Owner
shall promptly
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reimburse Agent. Owner agrees to provide sufficient funds to Agent such that
all amounts due and owing in connection with the operation of the Premises and
the performance of Agent's duties hereunder may be promptly paid by Agent.
Owner agrees to provide such funds as are necessary for the maintenance of the
reserve in Agent's trust account.
4. Agent's Authority. Owner hereby grants to Agent the power and
authority necessary and reasonable to carry out the duties of Agent under this
Agreement. Such authority shall include, without limitation, the following:
4.1 Expenditures. Agent shall have the power and authority to make such
expenditures as are provided for in the budget approved by Owner in accordance
with Paragraph 3.1 hereof, and to make such further expenditures as are
necessary to carry out its duties hereunder including payment to Agent of its
compensation pursuant to paragraph 5 hereof. The approval of Owner shall be
required for expenditure of an amount in excess of $3,000 for any one item not
set forth in such approved budget except for emergency repairs if in the
opinion of Agent such repairs are necessary to protect the Premises from damage
or to maintain services to tenants.
4.2 Contracts for Utilities and Other Services. Agent shall have the
power and authority to make contracts on behalf of Owner and at Owner's expense
for electricity, vermin extermination, trash collection, security, water,
sewer, ad valorem tax service and any other utilities and operating services as
are required under leases between Owner and tenants of the Premises, or as
Agent shall reasonably deem necessary in the operation and maintenance of the
Premises; provided that such contracts are terminable with thirty (30) days
written notice by either party, or otherwise agreed to in writing by Owner.
4.3 Lease Agreements. Agent shall have the power and authority to enter
into lease agreements on behalf of Owner as principal, and to institute and
prosecute actions for the enforcement thereof, to terminate tenancies for
cause, and to xxx for and in the name of Owner to recover rents and other sums
due.
4.4 Employees. Agent shall have the right and duly investigate, hire, pay
supervise and discharge all personnel necessary to be employed by it in order
to maintain and operate the Premises, including without limitation a property
manager at the Premises. Such personnel shall be deemed agents or employees as
the case may be of Agent and not of Owner if such persons or agents are
employees of some party to this Agreement. Owner shall have no right to
supervise or direct such agents or employees. Agent shall have the right to
determine all salaries, wages and other compensation of personnel employed by
Agent hereunder; provided, that such salaries and wages are within the limits
contained in the
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approved budget. Agent shall be reimbursed by Owner for all wages, fringe
benefits, payroll taxes, union welfare and pension costs and worker's
compensation premiums paid by Agent to its employees or independent contractors
to the extent their services are attributable to the maintenance and operation
of the Premises, and to the extent such payments are included in the approved
budget submitted by Agent.
5. Compensation.
5.1 Management. Owner shall pay Agent as compensation for management
services rendered hereunder $1,500 per month or four percent (4%) of the
monthly gross receipts from the operation of the Premises during the term of
this Agreement, whichever is the greater amount. Gross receipts are all
amounts received from the operation of the Premises, including, but not limited
to, rents, parking fees, forfeited security deposits, and other fees.
5.2 Leasing. Owner shall pay Agent as compensation for leasing services
rendered hereunder four percent (4%) of the total gross rental payments payable
by tenants during the initial term of leases procured by Agent, provided, if
another broker or leasing agent participates in the negotiation or procuring of
a lease, the commission payable to Agent with respect to such lease shall be
six percent (6%) of the total gross rental payments payable during the initial
term of any such lease. Any additional compensation as if such lease were by a
new tenant. The leasing commissions determined as set forth above shall be due
and payable in full on execution of the lease.
Owner shall pay Agent additional compensation equal to two percent (2%)
of the gross rental payments payable by the tenant pursuant to any new lease
with an existing tenant procured by Agent, or any extension or renewal of a
lease by an existing tenant procured by Agent. All such commissions shall be
due and payable in full upon execution of the new lease, extension or renewal,
as applicable. On a tenant's exercise of any renewal option clause in a lease,
Agent shall receive a leasing commission on the same basis as if such exercise
were a renewal lease.
Agent's right to receive and the obligation by Owner to pay leasing
commissions shall survive any termination of this Agreement.
5.3 Fire or Casualty Restoration. Agent's duties shall not include the
obligation to repair damage to the Premises caused by fire, wind, flood, or
other casualty if the cost of such repairs exceeds the sum of $1,000. However,
if Agent hereafter agrees to supervise such repairs at Owner's request, Owner
shall pay Agent as additional compensation for supervising such repairs an
amount equal to ten percent (10%) of the gross expenses of repair.
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5.4 Renovation. Owner shall pay Agent as compensation for supervising any
capital improvement, renovation or rehabilitation approved by Owner an amount
equal to ten percent (10%) of the gross expenses incurred in any such capital
improvement, renovation or rehabilitation; provided that Owner requests that
Agent supervise and manage such renovations.
6. Relationship of Agent to Owner. Agent and Owner agree that Agent's
relationship to Owner is that of an independent contractor, that Agent is not
an employee of Owner, and that Agent and Owner are not partners or joint
venturers.
7. Indemnification. Owner agrees to indemnify and hold harmless Agent,
its representatives, agents and employees from any claim, loss, expense or
liability, including reasonable attorney's fees of counsel selected by Owner,
arising out of or in connection with the good faith performance of Agent's
duties under this Agreement or in connection with the Premises, except for
damage resulting from Agent's negligence or willful acts. Agent agrees to
indemnify and hold Owner, its representatives, agents and employees, harmless
from any claim, loss, expense or liability arising out of Agent's negligence or
willful acts.
8. Termination. If either Owner or Agent terminates this Agreement, Agent
shall within sixty (60) days: (a) surrender and deliver up to Owner all
security deposits (with a complete accounting for such deposits), rents and
other charges collected from tenants of the Premises, and any other monies of
Owner which are on hand or in any bank account maintained by Agent after
payment of any expenses as authorized in this Agreement, including but not
limited to outstanding obligations of the Owner contracted for in the Agent's
name; (b) deliver to Owner as received any monies due to Owner under this
Agreement, but received after such termination; (c) deliver to Owner all
materials and supplies, fees, contracts and documents and such other
accountings, papers and records pertaining to this Agreement as Owner shall
reasonably request; and (d) assign such existing contracts relating to the
operation and maintenance of the Premises as Owner shall require, providing
that owner shall agree to assume all liability thereunder accruing after the
termination of this Agreement. Within sixty (60) days after such termination,
Agent shall further deliver to Owner all income and expense reports not covered
by an existing report as of the time of termination. Agent shall be entitled
to receive all compensation earned through the date of termination within sixty
(60) days after termination. Upon such termination, neither party shall have
any further or continuing liability to the other party.
9. Office. Owner agrees to provide, equip and maintain at Owner's expense
a suitable office in the Premises for the use of Agent in the discharge of
Agent's duties.
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10. Signs. Owner hereby grants Agent the right to display signs in and
upon the Premises stating that the Premises are under Agent's management.
11. Compliance with Applicable Laws. Agent assumes no responsibility for
compliance of the Premises or any equipment therein with any statute,
ordinance, law, or regulation except to forward to the Owner promptly any
complaints, warnings, notices, or summons received by it relating to such
matters. Owner represents that to the best of its knowledge the Premises and
such equipment comply with all requirements and agrees to indemnify and hold
harmless Agent, its representatives, agents, and employees from all loss, cost,
expense, and liability whatsoever which may be imposed on them by reason of any
violation or alleged violation of such laws, ordinances, statutes, or
regulations relating to the Premises.
In the event it is alleged or charged by any governmental authority that
the Premises or any equipment therein or any act or failure to act by the Owner
with respect to the Premises violates any statute, ordinance, law, or
regulation or any order or ruling of any public authority or official, and
Agent, Agent shall have the right to terminate this Agreement by ten (10) days
prior written notice to Owner. Such termination shall not affect any liability
or obligation of Owner to Agent for any payment, reimbursement, or other sum of
money due and payable to Agent hereunder.
12. Insurance. Throughout the term of this Agreement, Owner shall at its
expense carry and maintain upon and with respect to the Premises: general
public liability insurance including blanket contractual liability coverage
(without exclusion for bodily injury to any employee of any contractor or
subcontractor) with limits of liability of not less than $500,000 per person
and $500,000 per occurrence for injury to persons including deaths resulting
therefrom and $100,000 per occurrence for damage to property; fire and extended
coverage insurance including endorsements for burglary, theft, vandalism and
malicious mischief and plate glass; and such other insurance as shall be
necessary and proper in connection with the operation and maintenance of the
Premises. All premiums for said policies shall be paid by Owner. Each such
policy shall name Agent as an additional insured thereunder. Owner agrees to
provide Agent with a certificate of insurance or a policy of insurance
reflecting such coverages, upon request by Agent. Unless Owner shall provide
such insurance and furnish such certificates within thirty (30) days from the
date of this Agreement, Agent may, but shall not be obligated to, obtain such
insurance and charge the cost thereof to the account of Owner. Owner and Agent
agree to notify each other promptly of any notification received by either
Agent or Owner concerning a change in status or claim upon any such policy.
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13. Miscellaneous.
13.1 Successors and Assigns. This Agreement shall be binding upon the
parties hereto, their legal representatives, successors and assigns.
13.2 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of North Carolina.
13.3 Notice. All notices provided for or allowed by this Agreement
shall be in writing and shall be deemed to be given when sent by registered
or certified mail, postage prepaid, return receipt requested (a) to Agent at
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, and (b) to Owner
at Internet Services Corporation, Xxxx Xxxxxx Xxx 000000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000. Agent and Owner may from time to time by notice as
herein provided designate a different address to which notices to it shall
be sent.
13.4 Entire Agreement; Amendment. This Agreement constitutes the
entire agreement of Owner and Agent with respect to the leasing and management
of the Premises. Neither this Agreement nor any provision hereof may be changed
except by the instrument in writing signed by the party against whom
enforcement of the change is sought. This Agreement terminates, replaces and
supersedes and renders null and void any and all prior agreements between the
parties.
IN WITNESS WHEREOF, Agent and Owner have caused this Agreement to be
executed as of the day and year first above written,
AGENT:
ATTEST: XXXXXXX PROPERTIES, INC., a North
Carolina corporation
/s/ Xxxxx X. Xxxxxxx
-------------------- /s/ Faison X. Xxxxxxx, Xx.
Assistant Secretary -------------------------------------------
Faison X. Xxxxxxx, Xx., President
[CORPORATE SEAL]
OWNER:
XXXXX-XXXXXXX PUBLIC FUND LIMITED
PARTNERSHIP, a North Carolina limited
partnership
By: /s/ Xxxxxx X. Xxxxxxx, Xx. (SEAL)
---------------------------------------
Faison X. Xxxxxxx, Xx., GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxx, Xx. (SEAL)
---------------------------------------
Xxxxxx X. Xxxxx, Xx., GENERAL PARTNER
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