EXHIBIT 10.11
MASTER PROPERTY DEVELOPMENT AND MANAGEMENT
SERVICES AGREEMENT
BETWEEN WESTERN UNITED LIFE ASSURANCE COMPANY AND
SUMMIT PROPERTY DEVELOPMENT, INC.
This Master Property Development and Management Services Agreement (the
"Agreement") between Western United Life Assurance Company, a Washington
corporation with its principal offices at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 ("Western United") and Summit Property Development, Inc., an
Idaho corporation with its principal offices at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 ("Summit PD" and, together with Western United, the
"Participants") (the "Agreement"), is effective this 28th day of May, 2003.
WITNESSETH
WHEREAS, Western United owns certain real properties (the "Properties,"
and in the singular the "Property");
WHEREAS, Western United desires that Summit PD provide development
services with regard to certain of such Properties as shall be identified by
Western United pursuant to Section 3 herein (the "Property Development
Services");
WHEREAS, Western United desires that Summit PD provide management
services with regard to certain of such Properties as shall be identified by
Western United pursuant to Section 3 herein (the "Property Management
Services"); and
WHEREAS, Summit PD is desirous and capable of providing such Property
Development Services and Property Management Services (collectively, the
"Property Services") to Western United.
NOW, THEREFORE, in consideration of the recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Western United and Summit PD hereby agree as follows:
SECTION 1. DESCRIPTION OF SERVICES
As used in this Agreement, words of the masculine gender shall be
deemed and construed to include correlative words of the feminine and neuter
genders. Words imparting the singular number shall include the plural numbers
and vice versa, unless the context shall otherwise dictate.
A. Property Development Services. Summit PD shall provide
Property Development Services to Western United for the development of those
Western United Properties indicated by Western United pursuant to Section 3
hereinafter. The Property Development Services to be provided for each Property
shall be set forth in detail in specific property development agreements and/or
approved budgets, in forms to be developed by and acceptable to the parties
hereto (the "Development Project Agreement"). Each Development Project Agreement
shall be governed by the terms of this Agreement, unless agreed to in writing in
a specific Development Project Agreement. In the event of discrepancies between
this Agreement and a Development Project Agreement, the terms of this Agreement
shall prevail.
B. Property Management Services. Summit PD shall provide
Property Management Services to Western United for the management of those
Western United Properties indicated by Western United pursuant to Section 3
hereinafter. The Property Management Services to be provided for each Property
shall be set forth in detail in specific property management agreements and/or
approved budgets in forms to be developed by and acceptable to the parties
hereto (the "Management Project Agreements," and together with the Development
Project Agreements, the "Services Agreements"). Each Management Project
Agreement shall be governed by the terms of this Agreement, unless agreed to in
writing in a specific Management Project Agreement. In the event of
discrepancies between this Agreement and a Management Project Agreement, the
terms of this Agreement will prevail.
SECTION 2. COMPENSATION
A. Property Development Services and Property Management
Services Fees. Each month, Western United shall pay a fee for performance of the
Property Development Services, (the "Development Fee") and a fee for performance
of the Property Management Services, (the "Management Fee," and collectively
with the Development Fee, the "Property Services Fee"), in an amount equal to
Summit PD's actual monthly payroll attributable to the Property Services
provided pursuant to each Development Project Agreement and each Management
Project Agreement. For the purposes of this paragraph, actual payroll shall be
the amount of wages, salaries and bonuses Summit PD pays to its professional
employees for services related to Development Project Agreements and Management
Project Agreements. Burden rate shall include the cost of payroll taxes,
insurance premiums, sick leave, vacation, short- or long-term disability,
professional licenses, continuing education, commissions, and professional
equipment and/or supplies. Pursuant to chapters 48.05 and 48.31B RCW, Summit PD
shall keep full and adequate accounts and records, and shall ensure all Property
Development Fees are fair and reasonable.
(i) The books, accounts, and records of the Services
shall be so maintained as to clearly and accurately disclose
the nature and details of the Property Development Services
and Property Management Services, including such accounting
information as is necessary to support the reasonableness of
the charges or Fees to Western United.
B. Reimbursement of Expenses. In addition to the Property
Services Fees owed to Summit PD by Western United for the Property Services,
Western United shall reimburse Summit PD for any direct expenses related to
Property Development Services (the "Development Expenses") and Property
Management Services (the "Management Expenses," and together with Development
Expenses, the "Property Services Expenses"). Property Services Expenses shall be
those necessary costs and charges incurred and paid for by Summit PD as a result
of Summit PD performing the Property Services. Expenses shall include, but not
be limited to, the direct costs of transportation, meals, lodging, postage,
equipment, supplies, word processing, printing, telecommunications, premiums for
insurance (as required under Section 7 of this Agreement), laboratory tests and
any outside services subcontracted for by Summit PD directly related to the
performance of Property Services.
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C. Payment. Summit PD shall submit to Western United a monthly
invoice (the "Invoice") for the Property Services Fees and Property Services
Expenses, along with documentation, in a form acceptable to Western United,
supporting the Invoice. Provided the Invoice is received by Western United on or
before the tenth (10th) day of the month following the month covered by the
Invoice, Western United shall make payment to Summit PD not later than ten (10)
business days after receiving such Invoice. In the event the Invoice is received
by Western United later than the date fixed above, payment shall be made by
Western United to Summit PD not later than twenty (20) business days after
Western United receives the Invoice.
D. Maximum Expenses Without Authority. Notwithstanding any
other provision contained in this Agreement or in any Services Agreement,
Western United shall not be required to pay any Property Services Expenses which
exceed the approved project budget by Five Thousand Dollars ($5,000.00) or more
for any single item, unless Summit PD receives prior written authorization for
such expenditures from Western United. If prior written authorization for any
such expenditure is not obtained from Western United by Summit PD, Western
United may, at its discretion, approve and pay any such amounts as are fair and
reasonable subsequent to the expenditure having been made.
SECTION 3. WESTERN UNITED'S OBLIGATIONS
A. Identification of Properties; information. Western United
will from time to time identify Properties for which Western United determines
that it desires Summit PD to perform Property Development Services and/or
Property Management Services. Both Western United and Summit PD will maintain a
current list of all such Properties which are the subject of this Agreement.
Furthermore, Western United shall provide Summit PD with full information
regarding requirements for the Property Development Services including, but not
limited to, Western United's design objectives, constraints, and criteria for
the development of its Properties. Western United shall provide Summit PD with
full information regarding requirements for the Property Management Services,
including, but not limited to, Western United's management principles and
policies for both physical maintenance of Properties and financial
administration related thereto.
B. Authorized Representative. Western United shall designate,
and make such designation known to Summit PD, a representative authorized to act
on Western United's behalf with respect to the Property Services. Western United
may designate new or additional authorized representatives at any time by
written notice to Summit PD. Western United, through such authorized
representatives, shall render decisions with regard to Property Services in a
timely manner.
C. Western United's Actions. Western United shall be able to
take any action or actions Western United believes are necessary to properly
develop and manage Western United's Properties. To the extent Western United's
actions impact Summit PD's ability to provide the Property Services, Western
United shall keep Summit PD apprised of such actions. To the extent Western
United's actions increase, reduce, modify, or otherwise affect the Property
Services provided by Summit PD, Western United shall notify Summit PD in advance
of initiating such actions.
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SECTION 4. Summit PD's Obligations
A. Undertakings. Summit PD shall, in compliance with the terms
of this Agreement and applicable Services Agreements:
(i) Develop, operate and maintain the Properties
within reasonable tolerance of the Property Expenses category
subtotals contained in the Services Agreements.
(ii) Purchase all materials, equipment, tools,
appliances, supplies, and services, subject to Section 2(D) of
this Agreement, necessary for the proper development,
maintenance, and repair of the Properties, as stipulated by
Western United in the applicable Services Agreements.
B. Designation of Manager. The Property Services shall be
managed on behalf of Summit PD by an individual or individuals designated by
Summit PD (the "Manager") and shall be performed by the Manager and by such
other employees of Summit PD as may reasonably be required from time to time for
the performance of Summit PD's obligations pursuant to this Agreement. Summit PD
shall make such designation known to Western United. In the event the person
designated by Summit PD as Manager shall be replaced by Summit PD, Summit PD
shall provide Western United with notice of such change no later than five (5)
business days after such change.
C. Best Efforts. Summit PD shall use its best efforts to
provide the Property Services. Summit PD shall diligently work to complete, to
the extent reasonably possible, the Property Services within the time frame set
forth by Western United.
D. Confidentiality. Summit PD acknowledges that any
information provided by Western United, or any information Summit PD acquired
regarding Western United, the Properties, and Western United's intentions and
plans with regard to such properties, during the performance of the Property
Services, shall be deemed confidential. Summit PD shall not divulge or
disseminate such confidential information to any other person and shall use such
confidential information only for the purposes of performing the Property
Services. Should this Agreement terminate for any reason, Summit PD shall
promptly return all information acquired as a result of this Agreement to
Western United. Summit PD shall indemnify and hold Western United harmless for
any damages resulting from a breach by Summit PD of this confidentiality
provision. Summit PD's obligations contained in this confidentiality provision
shall survive termination of this Agreement.
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E. Summit PD's Status and Authority. Summit PD, with regard to
this Agreement, is and shall be considered an independent contractor for all
purposes. Summit PD is neither authorized to execute contracts on behalf of
Western United nor to commit Western United to the expenditure of money, other
than as provided for in Section 2(B) of this Agreement. Summit PD shall at all
times conduct itself and identify itself and its relationship with Western
United in an accurate manner, including the existence of separate legal
entities, the existence of an independent contractor relationship, and the
existence of limitations of Summit PD's authority, as contained in this
Agreement. Summit PD holds, and will hold during the term of this Agreement, all
material licenses, certificates, and permits from all governmental authorities
necessary for the conduct of its business. Summit PD has the full power and
authority to execute, deliver, perform, and enter into and consummate all
transactions contemplated by this Agreement.
F. Compliance with Government Orders. Summit PD shall take
such actions as may be necessary to comply promptly with any and all
governmental orders or other requirements affecting Property Management Services
or Property Development Services, whether imposed by federal, state, county, or
municipal authority. Summit PD shall notify Western United in writing of all
notices of such orders or other requirements within three business days after
Summit PD's receipt thereof.
G. Personnel Policies and Staffing. All hiring by Summit PD
for the performance of its obligations under this Agreement will conform with
all federal, state, and local laws pertaining to equal opportunity. Decisions
regarding personnel policies and conditions of employment shall be made by
Summit PD, who shall hire any necessary personnel associated with its conduct of
Property Services. Summit PD shall ensure that all on-site personnel receive
adequate training to enable them to perform their duties. Summit PD has full
responsibility to oversee the day-to-day conduct of the Property Services and to
ensure compliance with the terms of this Agreement and with applicable Services
Agreements.
H. Accounting and Financial Management. Summit PD shall
implement an accounting and management system to keep full and adequate accounts
and records including, but not limited to, the following:
1. Summit PD shall adopt procedures and maintain a
system of records and accounts with regard to its obligations
under this Agreement which conform with generally accepted
accounting principles and to the standards set forth in RCW
48.31B.030(1)(a)(iii) and (iv).
2. All rental payments related to Property Management
Services shall be recorded on a schedule that shows a complete
breakdown of every payment record. The schedule shall be
attached to an Income Statement that shows total amounts for
payments related to Property Management Services. The
statement will also show, as applicable, a tenant's address,
lot number, name, rent amount, other costs paid, next rent due
date, amount collected, and tenant's balance due.
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3. Summit PD shall pay all approved invoices on a
timely basis, within the availability of funds, and will take
advantage, as appropriate, of all discounts for timely
payment.
4. In addition to payment of wages, Summit PD shall
file all required federal, state, and local reports relating
to employee compensation including, but not limited to,
reports related to employment taxes and worker's and
unemployment compensation and records concerning vacation and
sick leave.
SECTION 5. TERMINATION
A. Termination for Cause. This Agreement may be terminated by
either party in the event that the other party hereto has breached a material
term of this Agreement or failed to substantially perform in accordance with the
terms and conditions contained herein and has also failed to cure or take
reasonable steps to cure such breach or failure within thirty (30) days of
written notice from the other party of the breach or failure. Termination shall
be in addition to any other rights or remedies available to either Western
United or Summit PD at law or equity.
B. Termination Due to Financial Status. Either party may
terminate this Agreement should the other party; (i) admit in writing its
inability to pay its debts; (ii) make a general assignment for the benefit of
creditors; (iii) suffer a decree or order appointing a receiver or trustee for
it; (iv) suffer proceedings under any law relating to bankruptcy, insolvency or
the reorganization or relief of debtors to be instituted by or against it; or
(v) suffer any judgment, writ of attachment, or execution or any similar
process.
C. Termination Without Cause. Western United may terminate
this Agreement at Western United's discretion on ninety (90) days written notice
to Summit PD. In the event of such termination, Summit PD shall be paid any
earned Property Services Fees and fair and unpaid Property Services Expenses.
Summit PD may terminate this Agreement at Summit PD's discretion upon sixty (60)
days prior written notice to Western United. Should Summit PD choose to
terminate this Agreement, Summit PD shall use its best efforts to fulfill all
outstanding Property Services Agreement obligations which it may have.
SECTION 6. INDEMNIFICATION
A. Summit PD's Indemnification. To the fullest extent
permitted by law, Summit PD shall defend, indemnify, and hold harmless Western
United and Western United's officers, directors, employees, agents, and
representatives, from and against any claims, losses, costs, damages, expenses,
liabilities, judgments, or awards caused by, arising from or made in connection
with Summit PD's performance of or failure to perform the Property Services.
This indemnification shall not apply to any claims, losses, costs, damages,
expenses, liabilities, judgments or awards caused by, arising from, or made in
connection with Western United's negligence.
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B. Western United's Indemnification. To the fullest extent
permitted by law, Western United shall defend, indemnify, and hold harmless
Summit PD and Summit PD's officers, directors, employees, agents, and
representatives, from and against any claims, losses, costs, damages, expenses,
liabilities, judgments or awards causes by, arising from or made in conjunction
with Western United's negligence.
C. Proportionate Negligence. In the event of contributory
negligence by Western United or Summit PD with regard to any claim made by a
party under the provisions of Section 4(A) or 4(B), the indemnification
obligations contained herein shall be limited to an amount proportionate to each
party's contributory negligence.
SECTION 7. INSURANCE
Summit PD shall obtain policies of insurance in the amounts listed
below. Summit PD shall cause Western United to be named as an additional insured
on such policies. Summit PD shall provide Western United with certificates of
insurance upon execution of this Agreement and as necessary thereafter to
demonstrate compliance with this paragraph.
- Workers' compensation (as required by applicable state law);
- Employer's or Stop-Gap Liability ($1,000,000 per occurrence or
event);
- Commercial General Liability (Bodily Injury $1,000,000 per person;
property Damage $1,000,000 per occurrence or event and including
contractual liability applicable to Summit PD's obligations under
this Agreement); and
- Automobile Liability (covering owned, non-owned, hired and
borrowed vehicles with limits for Bodily Injury of $1,000,000 per
person; property Damage of $1,000,000 per occurrence or event).
Western United may require that Summit PD carry higher limits and
additional coverages for any particular Management Project Agreement(s) or
Development Project Agreement subject to this Agreement. In such event, the
added cost of coverage shall be a Property Services Expense, subject to
pre-approval in writing by Western United, pursuant to Section 2(B) of this
Agreement. Summit PD shall investigate and furnish Western United with full
reports as to all accidents, claims and potential claims for damage relating to
the Properties, and will cooperate with Western United's insurers in connection
therewith.
SECTION 8. MISCELLANEOUS
A. Governing Law. This Agreement shall be governed by the laws
of the state of Washington.
B. Mediation. Should any controversy or claim between Western
United and Summit PD arise out of or relate to this Agreement, the parties
hereto shall meet and, using best efforts, attempt to resolve such controversy
or claim. Should such good-faith efforts fail to resolve the controversy or
claim, such controversy or claim shall be decided by arbitration, pursuant to
the Construction Industry Arbitration Rules. Notice to a party of the other
party's demand for arbitration shall be made in writing by the demanding party.
The location of the arbitration proceeding shall be Spokane, Washington. Any
monetary award or order made by the arbitrator shall be final, and judgment may
be entered upon it in accordance with applicable law in any court having
jurisdiction.
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C. Assignment. Summit PD shall not assign or transfer any
interest in this Agreement without the prior written consent of Western United.
D. Headings. The headings of paragraphs in this Agreement are
for reference and convenience only and shall not modify or affect the rights and
obligations of any party, as created by this Agreement.
E. Entire Agreement. This Agreement represents the entire and
integrated Agreement between Western United and Summit PD and supersedes all
prior negotiations, representations, or agreements, either written or oral. This
Agreement may be amended or modified only by written document signed by
authorized representatives of both Western United and Summit PD.
F. Severability. If any provision of this Agreement is deemed
to be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not be affected thereby, and
such provision shall be construed so as to effectuate the purposes of this
Agreement, to the greatest extent possible.
G. Third-Party Beneficiary. Nothing contained in this
Agreement shall be deemed or construed as giving any third party any claim or
right of action against Western United or Summit PD.
H. Notices. Any notice required or permitted to be delivered
hereunder shall be in writing and shall be deemed delivered when: (i) personally
delivered, one day following deposit with an overnight courier service; (ii)
when sent by facsimile with receipt confirmed by telephone; or (iii) on the
third day following deposit with the United States Mail, return receipt
requested, when such notice is sent certified to the following addresses.
IF TO WESTERN UNITED:
Western United Life Assurance Company
Attn: President
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to Western United's Secretary
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IF TO SUMMIT PD:
Summit Property Development, Inc.
Attn: President
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to Summit PD's Secretary
I. This Agreement may be executed in several counterparts,
each of which shall constitute a complete original Agreement, which may be
introduced in evidence or used for any other purpose without production of any
of the other counterparts.
WESTERN UNITED LIFE ASSURANCE COMPANY
/s/ Xxxx Xxx Xxxxxx
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By: Xxxx Xxx Xxxxxxx
President
SUMMIT PROPERTY DEVELOPMENT, INC.
/s/ Xxx Xxxxxx
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By: Xxx Xxxxxx
President
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