EXHIBIT 6.10
THE XXXXXXX
PROPERTY MANAGEMENT AND LEASING AGREEMENT
-----------------------------------------
THIS PROPERTY MANAGEMENT AND LEASING AGREEMENT (this "Agreement") is made
as of _________, 1998 by and between THE XXXXXXX RESORT PARTNERSHIP, a Florida
general partnership having an address of 0000 XXX Xxxxxxxxx, Xxxx Xxxxx Xxxxxxx,
Xxxxxxx 00000 ("Owner"), and MHC MANAGEMENT LIMITED PARTNERSHIP, an Illinois
limited partnership having an address of c/o Manufactured Home Communities,
Inc., Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000 ("Agent").
RECITALS:
A. Owner is the beneficial owner of that certain parcel of real property
and certain improvements now or hereafter located thereon, being operated as a
manufactured home community commonly known as "The Xxxxxxx" and more
particularly described on Exhibit A attached hereto and made a part hereof (the
---------
"Property").
B. Owner desires (i) to engage Agent to perform the property management
and leasing services more particularly described in this Agreement, and (ii) to
appoint Agent as managing agent for the Property, and Agent desires to accept
such engagement and appointment and perform such services, all upon and subject
to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth hereinbelow, Owner and Agent agree as follows:
1. APPOINTMENT OF AGENT. Owner hereby appoints Agent as the managing and
leasing agent for the Property, and Agent hereby accepts such appointment, upon
and subject to the terms and conditions set forth in this Agreement. Agent
shall be deemed to be an independent contractor, and no partnership or joint
venture relationship between Owner and Agent is created or is intended by this
Agreement. Agent at all times shall act in a good faith manner towards Owner,
shall deal at arm's-length with all parties and shall serve Owner's best
interests; provided, however, with respect to funds of Owner, including Rent (as
such term is hereinafter defined), which come into the possession or control of
Agent, Agent shall be deemed to hold and deal with such funds in trust for the
benefit of Owner and will have the responsibilities of a trustee with respect to
such funds. Agent shall not take any action which is beyond the scope of its
rights and obligations under this Agreement.
2. TERM. This Agreement shall commence as of ______, 1998 and shall
remain in full force and effect until [_______], [and shall thereafter
automatically renew for successive one (1) month periods beginning on the first
day of each month and ending on the last day of such month unless terminated as
provided in Section 10 below].
----------
3. AGENT'S DUTIES AND POWERS AS MANAGING AGENT.
(a) GENERAL SCOPE. Agent shall manage, coordinate and supervise the
-------------
proper conduct of the operation, maintenance and management (including internal
accounting
functions) of the Property (all such activities being hereinafter
collectively referred to as "Management Activities"), consistent with good
industry practice and standards acceptable to Owner. Agent shall have such
responsibilities, and shall perform or take, or cause to be performed or taken,
all such services and actions customarily performed or taken by managing agents
of property of similar nature, location and character to that of the Property as
Agent shall reasonably deem necessary or advisable for the proper conduct of the
Management Activities, including, without limitation, the duties and powers set
forth in subsections (b) through (k) below. Unless otherwise specifically
provided in this Agreement, all services and actions which Agent is required or
permitted to perform or take, or cause to be performed or taken, under this
Agreement in connection with the Management Activities shall be performed or
taken, as the case may be, for and on behalf of Owner and at Owner's expense
(exclusive of Agent's overhead expenses, travel expenses, compensation of
Agent's executives and other home office employees, bookkeeping expenses, and
expenses relating to the preparation of management and leasing reports),
including, without limitation, Agent's contracting with third parties for
certain services as provided for hereinbelow. Notwithstanding the foregoing,
Agent shall be subject to the limitations of Agent's power and authority set
forth in Section 5 below. No business of Agent other than the Management
---------
Activities shall be transacted at the Property or from offices located thereon,
and the use of the Property by Agent or its employees shall be limited to the
conduct of the Management Activities.
(b) RENT BILLS AND COLLECTIONS.
--------------------------
(i) If applicable, Agent shall prepare and deliver to all
persons and/or entities occupying or using space in the Property (individually,
a "Resident"; collectively, "Residents") timely bills setting forth all fixed,
base or minimum rent and all other amounts payable to Owner by such Residents,
including, without limitation, if applicable to the Property, taxes,
electricity, natural gas and other utility services (all such fixed, base or
minimum rent and other amounts, if any, being sometimes hereinafter collectively
referred to as "Rent"; provided, however, that the term "Rent" shall not include
security deposits, if any, of Residents) under their respective leases or
license, occupancy or similar agreements (individually, a "Lease"; collectively;
"Leases"). Agent shall compute all components of Rent. Agent and Owner shall
direct all Residents to make payments of Rent into the Operating Account (as
such term is hereinafter defined). Any Rent collected directly by Agent shall be
promptly deposited by Agent into the Operating Account.
(ii) Except as otherwise directed by Owner, Agent shall take
all such actions as Agent shall deem necessary or advisable to collect the Rent,
to enforce all rights and remedies of Owner under the Leases and to protect the
interests of Owner, including, without limitation, the preparation and delivery
to Residents of all "late payment", default and other appropriate notices,
requests, bills, demands and statements. Unless and to the extent otherwise
directed by Owner, Agent may retain counsel, collection agencies and such other
persons and firms as Agent shall deem appropriate or advisable, to enforce by
legal action the rights and remedies of Owner against any Resident in default in
the performance of such Resident's obligations under a Lease. Agent shall
promptly notify Owner of any such legal action and the progress of same. Owner
shall have the right at all times to control or direct Owner's representation in
any legal action.
2
(c) EMPLOYEES.
---------
(i) To the extent Agent deems necessary for the conduct of
the Management Activities, Agent shall hire personnel who, in each instance,
shall be employees of Agent; provided, however, that Agent shall not employ any
entity or person with whom Agent or its principals has any financial, ownership
or similar affiliation, without first disclosing the nature of such affiliation
to Owner and obtaining Owner's prior consent. The wages and benefits of all
personnel hired by Agent whose wages are not provided for in the Approved Budget
(as such term is hereinafter defined) or otherwise consented to by Owner to
perform services at the Property shall be paid by Agent without reimbursement by
Owner; provided, however, if Agent reasonably believes that additional personnel
(or overtime not provided for in the Approved Budget) is required for the
performance of the Management Activities hereunder, then with Owner's approval
(which shall not be unreasonably withheld) Agent may employ such additional
personnel (or approve such overtime). Agent shall direct and supervise all
personnel hired by Agent in the performance of their duties and shall discharge
all personnel whose employment Agent or Owner shall determine to be unnecessary
or undesirable. Agent shall use all reasonable efforts to avoid duplication of
services among its personnel and the payment of overtime whenever reasonably
possible. Agent shall use due care in the selection of personnel it employs to
perform the Management Activities.
(ii) Agent shall (A) pay all wages and other benefits properly
payable to the personnel hired by Agent pursuant to Section 3(c)(i) above, (B)
---------------
maintain accurate payroll records, (C) remit to the proper authorities all
required income and social security withholding taxes, unemployment insurance
payments, worker's compensation payments and such other amounts with respect to
the wages and other benefits payable to such personnel as may be required under
applicable laws, together in each case with all required reports or other
filings, and (D) obtain, maintain and administer all medical, disability and
other insurance benefits and other benefits as may from time to time be required
under any union or other agreements or arrangements pertaining to Owner's or
Agent's employment, as the case may be, of such personnel.
(iii) Agent shall give Owner notice of any disputes with
employees who are subject to union or other labor contracts. Agent may conduct
negotiations in connection with union and other labor contracts affecting the
employees of Agent who are rendering services in connection with the Management
Activities, and shall use all reasonable efforts to settle and compromise all
controversies and disputes arising under such contracts upon such terms and
conditions as shall be approved by Owner. Agent shall perform all of its
obligations under such contracts and shall monitor and enforce all of Owner's
rights thereunder.
(d) PROFESSIONALS AND CONTRACTORS. To the extent Agent deems
-----------------------------
necessary in connection with the Management Activities, Agent shall (i) identify
and enter into contracts with reputable architects, engineers, accountants,
attorneys, tradesmen and other independent contractors to perform services at
the Property; provided, however, that Agent shall not enter into any contract
with any entity or person with whom Agent or its principals has any financial,
ownership or similar affiliation without first disclosing the nature of such
affiliation to Owner and obtaining Owner's prior consent, and (ii) supervise the
administration, and monitor the performance, of all work to be performed and
services to be rendered under all such contracts.
3
Except where necessary for the preservation or protection of the Property or the
safety of Residents or required to avoid the suspension of any services at the
Property, Agent shall not enter into any agreement with any such professional or
other independent contractor which would require the payment of more than
$500.00 in any twelve (12) month period unless such agreement is provided for in
an Approved Budget (either as an identified "line item" thereof or as an
unidentified portion of an identified "line item" thereof) or is otherwise
consented to by Owner. Each such contract shall to the extent commercially
reasonable (i) be in the name of Agent, (ii) be for a period of time not to
exceed twelve (12) months, (iii) be assignable at Owner's option to Owner or
Owner's nominee and (iv) require all contractors to provide evidence of
insurance in such amounts and covering such losses as Agent deems reasonably
necessary or as otherwise directed by Owner. In negotiating such contracts,
Agent shall seek to include a provision for cancellation thereof by Owner on not
less than thirty (30) days' written notice without penalty (unless such a
cancellation provision is not commercially feasible given the subject matter of
the contract, in which case, with Owner's prior approval, Agent may agree to
other cancellation terms). Upon termination of this Agreement, Owner agrees that
any such contract which has been entered into in the name of Agent and otherwise
in accordance with the terms hereof shall be assigned to, and the obligations
thereunder arising after the date of such assignment, will be assumed by Owner.
Agent shall make available to Owner, without cost to Owner, the advice and
consultation of Agent's staff in connection with the Property. Agent shall deal
at arm's-length with all third parties and shall act consistent with the
interests of Owner at all times in performance of the Management Activities.
(e) MAINTENANCE.
-----------
(i) Agent shall cause the Property, including, without
limitation, common areas thereof, roadways, sidewalks, signs, parking areas and
landscaping, to be maintained in good and safe condition comparable to that of
other properly maintained properties of similar type and location to the
Property and in accordance with standards prescribed by Owner.
(ii) Agent shall cause all equipment and systems located at
or servicing the Property, including the potable water and/or wastewater
treatment plant(s), if any, to be operated as effectively as their respective
conditions will permit and in full compliance with all applicable laws, rules
and legal requirements and maintained in good repair. Agent shall immediately
notify Owner of its receipt of any notices or other communication from any
governmental authority concerning the operation of any such potable water and/or
wastewater treatment plant(s), and shall promptly deliver to Owner copies of any
such notices or other communications. Further, Agent shall provide or make
available, or cause to be provided or made available, to Residents those
services which Owner is required to provide or to make available under Leases.
(iii) Agent shall enter into such service and maintenance
contracts (in Agent's name) as Agent shall deem necessary or appropriate for the
operation and maintenance of the Property (or if applicable Agent will submit or
cause such contracts to be submitted to Owner for execution), including, without
limitation, the equipment and systems located at or servicing the Property,
contracts for utilities, telephone service, landscape maintenance, rubbish
removal, fuel, security, food vending and vermin extermination. Agent shall
purchase in reasonable quantities and at reasonable prices all supplies,
materials, tools
4
and equipment which are necessary or appropriate for the proper operation and
maintenance of the Property.
(iv) Agent shall take all reasonably necessary precautions
against fire, vandalism and trespass to the Property.
(v) In addition to the foregoing, to the extent provided for
in the Approved Budget or to the extent Owner has otherwise made adequate
monetary provision therefor, Agent shall cause all roadways, sidewalks, parking
areas and all other common areas of the Property to be kept free from cracks,
excess water, debris and other accumulations to the extent any of the foregoing
could (A) materially adversely affect the operation of the Property or (B)
create a safety hazard, and shall cause any rubbish, excess water, debris and
other accumulations to be removed therefrom.
(f) REPAIRS. Agent shall cause such ordinary and necessary repairs
-------
and replacements to be made to the Property (in accordance with the Approved
Budget) and all equipment and systems located at or servicing the Property, and
shall cause such infrastructure alterations to be made at the Property (in
accordance with the Approved Budget), as Agent shall deem necessary or advisable
for the proper operation and maintenance of the Property. Notwithstanding the
cost limitations set forth in Section 5 below, Agent shall cause to be made all
---------
repairs which are immediately necessary for the preservation or protection of
the Property or the safety of Residents and required to avoid the suspension of
any necessary services at the Property, without Owner's prior approval and
without limitation as to cost; provided, however, that in each instance Agent
shall, before causing any such emergency repair to be made, use reasonable
efforts and all practicable means under the circumstances to notify Owner of the
emergency repair.
(g) SUPERVISION OF RESIDENTS.
------------------------
(i) Agent shall plan and coordinate the moving in and moving
out of Residents at the Property in order to ensure a minimum of disturbance to
the operation of the Property and to other Residents then occupying or preparing
to occupy space at the Property.
(ii) Agent shall receive and use all reasonable efforts to
attend to and resolve any complaints, disputes or disagreements by or among
Residents (except with respect to evictions which are covered under sub-
paragraph (iv) below) but shall not settle any dispute with a Resident relating
to an amount in excess of $500.00 (per dispute) without the prior consent of
Owner.
(iii) Agent shall monitor all Residents and shall take
commercially reasonable steps to cause their compliance with the terms and
provisions of their respective Leases and the rules and regulations of the
Property.
(iv) Unless and to the extent otherwise directed by Owner,
Agent may terminate tenancies, evict Residents, enforce landlord's liens and
recover possession of premises occupied by Residents, and xxx in Owner's name
under Owner's supervision to
5
recover Rent and other sums due to the extent necessary to remedy illegal or
harmful conduct, a default under any Lease or a violation of the rules and
regulations of the Property.
(h) INSURANCE.
---------
(i) During the term of this Agreement and all renewals
thereof, Owner, at Owner's expense, shall carry and maintain primary general
liability insurance for the benefit of Owner and Agent naming Agent as an
additional insured ("Owner's Liability Insurance"). Owner's Liability Insurance
shall include coverage for losses arising from the ownership, management and
operation of the Property, including the utilization of independent contractors.
If Owner's Liability Insurance has a deductible, or similar clause, Owner shall
be responsible for paying any losses that are not covered by Owner's Liability
Insurance because of said deductible or similar clause. Owner shall also
maintain any insurance required by the Leases.
(ii) During the term of this Agreement and all renewals
thereof, Agent, at Agent's expense, shall carry and maintain general liability
insurance for the benefit of Agent and Owner naming Owner as additional insured
("Agent's Liability Insurance"). If Agent's Liability Insurance has a
deductible, or similar clause, Agent shall be responsible for paying any losses
not covered by Agent's Liability Insurance because of said deductible or similar
clause.
(iii) In connection with claims by third parties, as between
Owner's Liability Insurance and Agent's Liability Insurance, Owner's Liability
Insurance shall for all purposes be considered the primary coverage. No claim
shall be made by Owner or its insurance company under or with respect to any
insurance maintained by Agent except in the event that Owner's Liability
Insurance is exhausted or in the event such claim is caused by negligence or
misconduct on the part of Agent or Agent's employees.
(iv) Each insurance policy maintained by Owner or by Agent with
respect to the Property shall contain a waiver of subrogation clause, so that no
insurer shall have any claim over or against Owner or Agent, as the case may be,
by way of subrogation or otherwise, with respect to any claims that are insured
under such policy. All insurance relating to the Property shall be only for the
benefit of the party securing said insurance and all others named as insured.
Owner and Agent hereby release each other from all rights of recovery under or
through subrogation or otherwise for any and all losses and damages to the
extent of such insurance coverage and agree that no insurer shall have a right
to recover any amounts paid with respect to any claim against Owner or Agent by
subrogation, assignment or otherwise.
(v) Owner shall cause to be placed and kept in force fire and
extended coverage insurance and such other insurance as Owner may elect, at
Owner's expense.
(vi) Agent shall cause, at Owner's expense pursuant to the
Approved Budget, for all employees working at the Property (except with respect
to Agent's officers, directors and home office employees, with respect to whom
insurance shall be placed and kept in force by Agent at Agent's expense), to be
placed and kept in force worker's compensation
6
insurance in compliance with all applicable federal, state and local laws and
regulations and employer's liability coverage covering all employees of Agent,
and Agent shall furnish Owner certificates evidencing such insurance and Agent's
Liability Insurance (each of which shall contain a provision requiring the
insurer to give Owner thirty (30) days' prior written notice before
cancellation, and shall name Owner as an insured).
(vii) Agent, at its expense, shall furnish employee dishonesty
insurance with limits of at least $500,000.00 per loss and in an amount
sufficient to cover all employees (whether on-site or off-site) employed by
Agent who shall be responsible for handling any moneys belonging to Owner that
come under the custody or control of Agent. Agent shall be responsible for the
amount of any deductible under such insurance.
(viii) Unless a service agreement has been established as part
of Owner's insurance program or separate agreement has been otherwise reached
with Owner, Agent shall promptly investigate and make a full written report to
Owner and the applicable insurance carrier(s) as to all alleged accidents and/or
alleged claims for damages relating to the ownership, operation, management and
maintenance of the Property as well as (and including) any damage or destruction
to the Property and the estimated cost of repair. Agent shall promptly report
to Owner in writing (A) the existence of any asserted claims or lawsuits
relating to the Property and (B) the incurrence of any damage to the Property.
(ix) Upon commencement of the term of this Agreement, (A) Agent
shall provide Owner with certificates of insurance and loss payable endorsements
evidencing compliance with the terms of this Agreement and (B) Owner shall
provide Agent with certificates of insurance (showing Agent as additional
insured) and loss payable endorsements evidencing compliance with the terms of
this Agreement.
(i) ADVERTISING - PUBLIC RELATIONS.
------------------------------
(i) Agent shall hire such advertising services, shall place
such advertisements and shall generally supervise and attend to all promotional
matters pertaining to the operation of the Property as Agent shall deem
advisable consistent with and subject to the cost limitations set forth in the
Approved Budget.
(ii) Agent shall represent Owner in connection with all matters
of general public interest which pertain to the Property and shall attempt to
resolve amicably any complaints, disputes or disagreements in connection
therewith as promptly as is reasonably possible; provided, however, that Agent
shall not expend in excess of $500.00, per dispute, to resolve such complaints,
disputes or disagreements without first obtaining Owner's approval.
(j) COMPLIANCE. Agent shall take or cause to be taken all such
----------
appropriate actions in and about or affecting the Property as necessary to
comply with all laws, rules, regulations and other legal requirements applicable
to the Property, including in connection with any financing secured by the
Property so long as the terms of such financing to be complied with by Agent are
fully disclosed to Agent. Agent, however, shall not take any such action as long
as Owner is contesting, or has affirmed its intention to contest any such
requirement.
7
Notwithstanding the cost limitations set forth in Section 5 below,
---------
Agent may, without Owner's prior written approval, take or cause to be taken any
such actions without limitation as to cost if failure to do so would or might,
in Agent's reasonable judgment, expose Owner or Agent to criminal liability;
provided, however, that in each such instance Agent shall, if reasonably
possible, before taking or causing to be taken any such action, notify Owner of
the need for such action and obtain Owner's approval. Agent and Owner shall
each promptly notify the other of any violation, order, rule or determination
affecting the Property of any governmental authority or agency.
Agent shall take or cause to be taken all such appropriate actions in
and about or affecting the Property reasonably necessary to comply with all
terms and conditions contained in any ground lease, space lease, mortgage, deed
of trust or other security instrument affecting the Property.
(k) PAYMENT OF EXPENSES. Agent shall pay with funds from the
-------------------
Operating Account all expenses of the Property, including, without limitation,
Agent's compensation under the Agreement. Agent shall not be required to make
any expenditure of funds if such funds are not available from the Operating
Account or from contributions by Owner. Agent shall at all times use all
reasonable efforts to obtain for Owner, and shall credit to the account of Owner
in each case, all discounts, rebates and other favorable financial terms which
may be available in connection with any costs or expenses Agent shall incur
under this Agreement.
4. AGENT'S DUTIES AND POWERS AS LEASING AGENT.
(a) DUTIES. Agent shall use all reasonable efforts consistent with
------
normal and customary practices in the residential leasing business, to negotiate
and, whenever possible, consistent with this Section 4(a), consummate Leases for
------------
manufactured home sites at the Property which become available for rent from
time to time after the date of execution of the general partnership agreement of
The Xxxxxxx Resort Partnership, at rentals and upon such other terms and
conditions as shall be consistent with the relevant market for the Property and
as may be designated by Owner from time to time. Without limiting the
foregoing, Agent hereby agrees that (i) all Leases shall be on Owner's standard
lease form or other form approved by Owner, (ii) Leases for all spaces in the
Property shall be entered into with creditworthy residents which
creditworthiness Agent shall determine by making customary inquiries with
reputable credit rating agencies, and (iii) each manufactured home located at
the Property shall meet the standards of Owner (i.e., with respect to age, model
and manufacturer), as set forth in writing to Agent by Owner from time to time
(it being understood that if Owner revises its standards such revised standards
shall only apply prospectively).
(b) POWERS. Subject to the terms and conditions of this Agreement and
------
to the provisions of any mortgage financing entered into by Owner, Agent shall
have the power to:
(i) negotiate and prepare or cause to be prepared all new Leases
on Owner's standard form or other form approved by Owner and modifications (so
long as such modifications do not materially impact the rights, remedies and
economic benefits of Owner under the Leases) or terminations of existing Leases
(which terminations must be on terms approved by Owner); and
8
(ii) authorize or provide for advertisements and other promotional
activities, including renting plans and signs and circular matter,
contemplated under the marketing and promotional program developed by Owner
and Agent, consistent with and subject to the cost limitations as set forth
in the Approved Budget (as defined below).
5. LIMITATIONS OF AGENT'S POWERS AND AUTHORITY. Except to the extent
provided for in any Approved Budget (either as an identified "line item" thereof
or as an unidentified portion of an identified "line item" thereof) or as
otherwise specifically provided in this Agreement with respect to emergency
situations, Agent shall not, without the prior approval of Owner, incur any
single expense for a repair, alteration, service, supply or other matter
whatsoever which would involve a cost in excess of $500.00 or such other sum as
Owner may from time to time designate in writing. Agent shall be relieved of its
obligations under this Agreement to the extent such obligations are not
performed because of Owner's failure or refusal to make funds available for the
performance of such obligations.
6. OPERATING BUDGETS.
(a) BUDGET FOR FIRST OPERATING YEAR. Owner has received a copy of
-------------------------------
Agent's Budget Summary for 1998 ("1998 Budget"). Agent shall manage the
Property consistent with and subject to the cost limitations set forth in such
1998 Budget.
(b) ANNUAL BUDGETS AFTER FIRST OPERATING YEAR. Agent shall prepare
-----------------------------------------
annually for Owner's review and approval (which shall not be unreasonably
withheld or delayed) a pro forma income forecast and proposed operating budget
for all costs pertaining to the operation and maintenance of the Property during
each Operating Year (as defined below). Agent shall manage the Property
consistent with and subject to the cost limitations set forth in each Approved
Budget.
(c) APPROVED BUDGETS AND OPERATING YEARS. The 1998 Budget, each pro
------------------------------------
forma income forecast and operating budget prepared by Agent in accordance with
Section 6(b) above, together with any adjustments thereto, is referred to in
-------------
this Agreement and shall be deemed to be the "Approved Budget" for the period
covered thereby. Each Approved Budget shall cover a calendar year, which
calendar year is referred to in this Agreement as the "Operating Year".
(d) LIMITATIONS OF APPROVED BUDGET. Except as otherwise specifically
------------------------------
provided in this Agreement, Agent shall use all reasonable efforts to incur
costs and expenses in connection with the operation and maintenance of the
Property during any Operating Year within the limitations established by the
Approved Budget for such Operating Year. Agent shall give Owner notice if Agent
expects to exceed any item in the Approved Budget by an amount in excess of ten
percent (10%) of the amount budgeted for such item. Notwithstanding the
foregoing, Agent shall not be required to obtain Owner's prior approval with
respect to, and the calculation of any Operating Budget overages shall not take
into consideration, the following:
9
(i) costs and expenses relating to utility charges, real estate
taxes, insurance or otherwise which are not within Agent's reasonable
control and which, if not incurred, would or might, in Agent's reasonable
judgment, adversely and materially affect the operation and maintenance of
the Property; and
(ii) other costs and expenses (including costs and expenses relating
to a Lease or service contract approved by Owner) which this Agreement
specifically provides Agent may incur.
In addition, if any Operating Year shall commence before Owner shall have
reviewed and adjusted the Approved Budget for such year, Agent shall use its
reasonable judgment in incurring costs and expenses relating to the operation
and maintenance of the Property until such review and adjustment of the Approved
Budget for such Operating Year shall have taken place and in doing so shall be
guided by the Approved Budget for such Operating Year in effect without
adjustment. In such a case, Agent shall be subject to the same financial
limitations established in the Approved Budget as if such budget had been
reviewed and adjusted by Owner for the then current Operating Year.
7. BOOKS, ACCOUNTS, RECORDS, REPORTS AND REMITTANCES.
(a) BOOKS AND RECORDS. Agent shall establish and maintain such books
-----------------
of account, records and other documentation pertaining to the operation and
maintenance of the Property as Owner may prescribe from time to time and
otherwise as are customarily maintained by managing agents of properties similar
in location and size to that of the Property. Owner and any representative of
Owner shall have the right to inspect such records and audit any and all
statements at any reasonable time, and make photocopies of same and such right
of inspection, audit and photocopying shall survive the expiration or
termination of this Agreement. Agent agrees that all such records shall be and
shall at all times remain the property of Owner except for software, and shall
be delivered to Owner at its request, and Agent shall not destroy any records
without first obtaining Owner's prior written approval.
(b) OPERATING ACCOUNT. Except as otherwise directed by Owner, Agent
-----------------
shall open and maintain an account separate from Agent's personal account (the
"Operating Account") in a banking institution acceptable to Owner. The Operating
Account shall be in the name of Owner, and shall be the property of Owner. The
designation of those employees of Agent who are authorized to sign checks on the
Operating Account, in addition to representatives of Owner, shall be subject to
the prior approval of Owner. All amounts collected from operation of the
Property shall be deposited by Agent into the Operating Account. If such amounts
are not sufficient to pay the expenses of the Property, Owner shall make monthly
deposits into the Operating Account in an amount necessary to pay such monthly
expenses of the Property as shown in the Approved Budget. Agent shall then make
withdrawals from the Operating Account as Agent shall deem necessary or
advisable in connection with the Management Activities. On or after the twenty-
fifth (25th) day of each month (or the next business day if the 25th is not a
business day), Owner shall notify Agent if Owner wishes to have Agent distribute
to Owner out of the Operating Account any net amounts remaining from the prior
month's collections. Upon receipt of such notice, Owner and Agent
10
shall agree on the amount and Agent shall make the distribution to such account
as directed by Owner.
Owner and Agent agree that a xxxxx cash fund (not to exceed $200.00)
will be maintained at the Property. Upon commencement of this Agreement, all
amounts in the xxxxx cash fund are the property of Owner and to the extent
amounts in the xxxxx cash fund are expended for Property related items, Owner
shall replenish amounts so spent from time-to-time (up to $200.00) upon receipt
of evidence of such expenditures. At the end of the term of this Agreement, all
amounts in the xxxxx cash fund shall be retained by Owner.
(c) SECURITY DEPOSITS. Agent shall retain all security deposits, if
-----------------
any, of Residents received by Agent, and apply such in accordance with the
Leases. Owner shall remit to Agent or otherwise provide Agent direct access to
all other security deposits with respect to the Property.
(d) MONTHLY REPORTS. Agent shall prepare and deliver to Owner, not
---------------
later than the sixth (6th) day of each month, monthly reports setting forth
detailed statements of income and collections, expenses and disbursements,
balance of the Operating Account, Leases signed during the month and other
matters requested by Owner relating to the Management Activities (all in
accordance with the method of accounting designated by Owner) for the preceding
month. Agent shall furnish Owner with a general ledger and such further
information covering the operation and maintenance of the Property as Owner may
require. Such statements shall list accounts payable over thirty (30) days past
due and will break down expenses and charges into major categories. In addition
such monthly statements will show the amount each Resident was billed that
month, and the amount each Resident paid. Upon Owner's request, such statements
shall be accompanied by appropriate documentation of all expenditures made by
Agent on behalf of Owner under this Agreement.
(e) INTERIM REPORTS. Within twenty (20) days after the end of each
---------------
calendar quarter, Agent shall prepare and deliver to Owner a report as of the
last day of the preceding quarterly period, setting forth detailed statements of
collections, disbursements, delinquencies, balance of the Operating Account,
accounts payable and other matters requested by Owner relating to the Management
Activities (all in accordance with the method of accounting designated by Owner)
for the preceding quarter. Such statements shall, upon Owner's request, be
accompanied by appropriate documentation of all expenditures made by Agent under
this Agreement. Such quarterly statements shall be accompanied by Agent's
written estimates of the amounts, if any, by which any major categories of the
Approved Budget must be adjusted to fund adequately the operation and
maintenance of the Property for the then current quarter. Agent shall also
furnish Owner with such further information covering the operation and
maintenance of the Property as Owner may reasonably require.
(f) YEAR-END AND FINAL REPORTS. As soon as practicable after the end
--------------------------
of each Operating Year but in no event later than forty-five (45) days after the
end of each Operating Year, and after the expiration or termination of this
Agreement, Agent shall prepare and deliver to Owner detailed statements
(prepared in accordance with the accrual basis of accounting) of all receipts,
expenses and charges pertaining to the operation and maintenance of the Property
during the preceding Operating Year.
11
8. COMPENSATION - MANAGEMENT AND LEASING FEES. Owner shall pay Agent as
Agent's sole and exclusive fee ("Agent's Fee") for its performance of the
Management Activities and its activities pursuant to Section 4 hereof, an annual
---------
amount equal to four percent (4%) of the Rent actually collected by or for the
account of Owner in each calendar year, or portion thereof, during the term of
this Agreement. Owner shall pay Agent's fee monthly, on or about the final day
of each calendar month based upon Rent actually collected during such month.
9. ADJUSTMENTS. If after the end of each Operating Year, or the
termination of this Agreement, it is determined that the sums theretofore paid
to Agent under Section 8 above are greater or less than the sums required to be
---------
paid by Owner to Agent under Section 8 above, then there shall promptly be an
---------
adjustment, and payment or reimbursement, as applicable, between Owner and
Agent.
10. DEFAULT - TERMINATION
(a) RIGHT TO TERMINATE. During the initial term of this Agreement
-------------------
commencing on ______, 1998 and ending on _______, (i) Owner shall have the right
to terminate this Agreement, for cause only, at any time upon thirty (30) days'
prior written notice to Agent and (ii) Agent shall have the right to terminate
this Agreement, for cause only, at any time upon thirty (30) days' prior written
notice. After said initial term of this Agreement, either party shall have the
right to terminate this Agreement, with or without cause, for any reason, at any
time upon thirty (30) days' prior written notice to the other party.
(b) AUTOMATIC TERMINATION. This Agreement shall terminate immediately
---------------------
and automatically (i) if all or substantially all of the Property is sold or
condemned or acquired by eminent domain, or (ii) if Agent or any of its
principals files a petition for bankruptcy, reorganization or arrangement under
any statute, or makes an assignment for the benefit of creditors, or takes
advantage of any insolvency statute.
(c) SURVIVAL OF OBLIGATIONS. Upon the expiration or termination of
-----------------------
this Agreement, (i) Owner's appointment of Agent hereunder shall cease and
terminate and, except as otherwise specifically provided hereunder, Owner and
Agent shall have no further obligation or liability to the other, (ii) Agent
shall no longer have any authority to represent Owner or take or cause to be
taken any actions on Owner's behalf and (iii) Owner shall pay Agent all fees
payable to Agent hereunder which shall have accrued through the date of such
expiration or termination. The provisions of this Section 10(c) shall survive
-------------
any such expiration or termination.
(d) RETURN OF OWNER'S PROPERTY. Promptly upon the expiration or
--------------------------
termination of this Agreement, Agent shall (i) pay over to Owner any balance of
funds held by Agent on Owner's account pursuant to this Agreement and (ii)
return to Owner all books, records, Leases, agreements and other documents
pertaining to the management, leasing and operation of the Property.
12
11. INDEMNIFICATION.
(a) SCOPE. Owner shall defend, indemnify and hold harmless Agent, its
-----
principals, officers, directors, shareholders, partners, employees and agents
(individually and collectively, "Owner's Indemnitees") from and against all
liabilities, claims, suits, damages, judgments, reasonable costs and expenses of
whatever nature, including reasonable counsel fees incurred by reason of or
arising out of any injury to or death of any person(s), damage to property
(including environmental contamination of any kind), loss or use of any property
or otherwise in connection with (i) the proper performance by Agent of Agent's
obligations under this Agreement, (ii) Owner's officers' and/or directors' or
employees' negligence, willful misconduct or fraud and (iii) actions taken by
Owner which are not permitted or are prohibited by this Agreement. Owner shall
not be required to defend, indemnify, hold harmless or reimburse Owner's
Indemnitees with respect to any matter arising out of Agent's, Agent's officers'
and/or directors' or employees' negligence, willful misconduct or fraud. With
respect to Owner's obligation to defend Agent in third-party lawsuits covered by
the terms of this Section 11, Owner shall be permitted to hire counsel of its
----------
own choosing and Owner will not be responsible for counsel fees of Agent if
Agent seeks separate legal representation; provided, however, in the event that
the interests of Agent and Owner in any third-party lawsuit are so divergent
that representation of each by the same counsel would create a clear conflict,
then Owner shall be responsible for the reasonable fees and expenses of Agent's
separate attorneys.
(b) CONDITIONS. The obligation of Owner to indemnify, hold harmless
-----------
and reimburse Agent under Section 11(a) above is subject to the condition that
-------------
Agent shall not take or fail to take any actions, including the failure to
promptly notify Owner or an admission of liability, which would bar Owner from
enforcing any applicable coverage under policies of insurance or would prejudice
any defense of Owner in any appropriate legal proceedings pertaining to any such
matter or otherwise prevent Owner from defending itself with respect to any such
matter.
(c) SURVIVAL. The provisions of this Section 11 shall survive the
-------- ----------
expiration and any termination of this Agreement.
(d) RELEASE FROM LIABILITY. Each party hereby releases the other in
----------------------
respect of any claim (including a claim for negligence) that it might otherwise
have against the other party for loss, damage or destruction with respect to its
property by fire or other casualty occurring during the term of this Agreement
if, and to the extent, covered under the fire insurance policy covering the
Property or any other insurance policy carried by Owner or Agent. Owner and
Agent shall both be named insureds under the fire and extended coverage, rent
insurance and "all risk" insurance covering the Property, as well as any other
insurance carried by Owner or Agent with respect to the Property.
12. TIMELY PERFORMANCE. Owner and Agent shall each perform all of their
respective obligations under this Agreement in a proper, prompt and timely
manner. Each shall furnish the other with such information and assistance as
the other may from time to time reasonably request in order to perform its
responsibilities hereunder. Owner and Agent each shall take all such actions as
the other may from time to time reasonably request and otherwise
13
cooperate with the other so as to avoid or minimize any delay or impairment of
either party's performance of its obligations under this Agreement.
13. ASSIGNMENT.
(a) PERMISSIBLE ASSIGNMENTS. Agent may not assign this Agreement or
------------------------
delegate its responsibilities hereunder except as contemplated by this Agreement
without the prior consent of Owner.
(b) ASSUMPTION AND RELEASE. Each permitted assignee of this Agreement
-----------------------
shall agree in writing to personally assume, perform and be bound by all of the
terms, covenants, conditions and agreements contained in this Agreement, and
thereupon the assignor of this Agreement shall be relieved of all obligations
hereunder except those which shall have accrued prior to the effectiveness of
such assignment.
14. NOTICES.
(a) GENERAL. Any and all notices, consents, approvals or other
--------
communications given under this Agreement shall be deemed to have been properly
given when delivered, if personally delivered, or when received, if sent
certified or registered mail, return receipt requested and postage prepaid, and
addressed to the parties at the following address:
a) If to Owner, to: XXXXXXX PRESERVATION, INC.
0000 XXX Xxxxxxxxx
Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000
Attn: President
and: BLUE RIBBON COMMUNITIES LIMITED
PARTNERSHIP
c/o Manufactured Home Communities, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
b) If to Agent, to: MHC MANAGEMENT LIMITED PARTNERSHIP
c/o Manufactured Home Communities, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
14
with a copy to: Manufactured Home Communities, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Any notice delivered by either party in any manner other than those
described above shall be deemed properly given when received. Either party may
change its address for the giving of notices under this Agreement by delivering
to the other party ten (10) days' written notice of such change of address.
(b) EMERGENCY NOTICES. Either party may give notice of emergency
------------------
situations orally (personally, by telephone or otherwise) or by telecopy, telex,
telegram or other method, provided that the party giving any such emergency
notice shall confirm the same by written notice in accordance with Section 14(a)
-------------
above.
15. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed in the State of Florida.
16. COMPLIANCE WITH LAWS. Agent, in fulfilling its obligations under this
Agreement, shall comply with all applicable law, rules, regulations and other
legal requirements.
17. GOVERNMENTAL ORDERS. In the event that any governmental agency,
authority or department should order the repair, alteration or removal of any
structure or condition at the Property, and if after written notice of the same
to Owner by such body or by Agent, Owner fails to authorize Agent or others to
make such repairs, alterations or removal, Agent shall be released from any
responsibility in connection therewith, and Owner shall be answerable to such
body for any and all penalties and fines whatsoever imposed because of such
failure on Owner's part.
18. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof. This Agreement shall be
construed without regard to any presumption or other rule requiring construction
against the party causing this Agreement to be drafted. This Agreement may not
be modified, amended or terminated (except as provided in this Agreement), nor
may any term or provision hereof be waived or discharged, except by instrument
signed by Owner and Agent. All of the terms of this Agreement, whether so
expressed or not, shall be binding upon the respective successors and permitted
assigns of the parties hereto and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns. If any of the provisions of this Agreement shall to any extent be
invalid or unenforceable, the remaining provisions of this Agreement shall not
be affected thereby and every provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law. The headings of this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which
15
together shall constitute one and the same instrument. Any references in this
Agreement to any one gender, masculine, feminine or neuter, includes the other
two, and the singular includes the plural, and vice versa, unless the context
otherwise requires.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
OWNER:
THE XXXXXXX RESORT PARTNERSHIP
a Florida general partnership
By: Blue Ribbon Communities Limited
Partnership, its General Partner
By: MHC-QRS Blue Ribbon
Communities, Inc., General Partner
By: __________________________
Name: ___________________
Title: ___________________
AGENT:
MHC MANAGEMENT LIMITED PARTNERSHIP,
an Illinois limited partnership
By: MHC Operating Limited Partnership,
an Illinois limited partnership
Its: General Partner
By: Manufactured Home Communities, Inc.,
a Maryland corporation
Its: General Partner
By: __________________________
Name: ___________________
Title: ___________________
16
