PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT ("Agreement") made as of January 1,
1995 by and between THE POINT ASSOCIATES, L.P., a Pennsylvania limited
partnership ("Owner") and SKR MANAGEMENT CORP., a New York corporation
("Agent").
BACKGROUND
A. Owner is the owner of the land and improvements known as Xxx Xxxxx
Xxxxxxxx Xxxxxx, 0000-0000 Xxxxx 83 and Union Deposit Road, Harrisburg,
Pennsylvania (the "Property").
B. Owner desires to retain Agent as its exclusive agent for the
purposes of leasing and managing the Property on behalf of Owner and Agent is
willing to act as agent for Owner with respect to the Property on the terms and
conditions of the Agreement as more fully set forth herein.
NOW THEREFORE, in consideration of the agreements and covenants herein
contained, and intending to be legally bound hereby, Owner and Agent agree as
follows:
1. Owner hereby employs Agent to manage and lease as the exclusive
broker the property upon the terms and conditions hereinafter set forth for an
initial term of three (3) years from the date hereof unless otherwise extended,
renewed or terminated as hereinafter set forth.
2. Agent agrees to perform the following:
2.1. Use its best efforts to lease or cause brokers or other agents to
lease on behalf of Owner all available space in the Property;
2.2. Diligently to collect rents, additional rents and all other sums
due from tenants when due and, where necessary or appropriate, and except as
directed otherwise by Owner (in which event Owner shall bear the administrative
costs of relieving Agent of such duty or duties), take all such actions as Agent
shall deem necessary or advisable to enforce all rights and remedies of Owner
under the leases relating to the Property (the "Leases") or to protect the
interest of Owner, including, without limitation, the preparation and delivery
to tenants under the Leases ("Tenants") of all "late payment", default, and
other appropriate notices, requests, bills, demands, and statements. Agent may
retain counsel, collection agencies, and such other persons and firms as Agent
shall deem appropriate or advisable to enforce, after notification to Owner, by
legal action the rights and remedies of Owner against any Tenant default in the
performance of its obligations under a Lease. Agent shall promptly notify Owner
of the progress of any such legal action;
2.3. To pay from the operating funds of the Property or such other
funds as are provided by Owner bills and expenses for the maintenance, repair
and operation of the Property, provided, however, that all expenditures in
excess of $5,000 in any single transaction or more than $50,000 in the aggregate
in any period of twelve (12) consecutive months shall be subject to Owner's
approval unless such expenditure is included in the operating budget for the
Property that has been approved by Owner, and provided further that Agent shall
notify Owner of any budget expenditures cumulatively exceeding ten percent (10%)
of any approved annual budget;
2.4. To establish and maintain such books of account, records, and
other documentation pertaining to the operation and maintenance of the Property
as are customarily maintained by managing agents of properties similar in
location and size to that of the Property. Agent shall prepare or cause to be
prepared and file all returns and other reports relating to the Property, other
than income tax returns and any reports or returns that may be required of any
foreign owner of U.S. real property, as may be required by any governmental
authority or otherwise under this Agreement. Agent shall periodically report to
Owner on the general operations, occupancy, physical condition, disbursements,
delinquencies, uncollectible accounts, and other matters relating to the
Property. Agent shall prepare and forward to Owner a written report each month
showing the receipts and expenditures for such month, the receipts and
expenditures year-to-date and the variations from the agreed upon budget. These
statements shall, upon Owner's request, be accompanied by appropriate
documentation of all expenditures made by Agent under this Agreement. As soon as
practicable after the end of each calendar year and after the expiration or
termination of this Agreement, Agent shall use reasonable efforts to prepare and
deliver to Owner statements pertaining to the operation and maintenance of the
Property during the preceding calendar year. Agent shall prepare and submit to
Owner for its approval no later than December 1st of each calendar year (or such
later date as the parties agree) a proposed pro forma budget for all costs
pertaining to the operation and maintenance of the Property during the ensuing
calendar year. Each such budget shall be substantially in the same form as the
approved budget in effect for the prior calendar year, shall set forth
expenditures on an annual and a monthly basis, and shall not, except for
informational purposes, include estimates for costs and expenses for which Owner
will be reimbursed by Tenants under the Leases. Agent shall make such reasonable
modifications to each proposed pro forma budget it prepares in accordance with
this section until Owner shall have approved this budget in writing, which
approval shall not be unreasonably withheld or delayed. Such budget and
revisions shall be deemed to be accepted and approved by Owner unless
specifically rejected or accepted within fifteen (15) days of submission;
2.5. To account for all advance deposits of Tenants;
2.6. To refund to Tenants from escrow accounts, funds of the Property
or funds provided by Owner, as appropriate, pro-rated rents, rebates,
allowances, advance deposit refunds, and such other amounts as are legally due
Tenants;
2.7. To collect from Tenants all insurance policies, Tenant insurance
certificates, or other evidence of insurance required to be carried by Tenants;
2.8. Unless otherwise instructed by Owner, to secure for and on behalf
of and at the expense of Owner such insurance, including without limitation,
employee dishonesty insurance, fire and extended coverage property insurance,
public liability insurance and workers' compensation insurance, as may be deemed
by Owner (or any mortgagees) to be necessary or appropriate, in amounts
satisfactory to Owner and Agent and naming Owner and Agent as co-insureds and in
form and substance satisfactory to Owner, Agent and any mortgagees; provided,
however, that if Agent promptly notifies Owner of the insurance so secured on
behalf of Owner, and promptly complies with Owner's instructions regarding such
insurance, Owner releases and holds Agent harmless of and from any claims, loss,
damages and liability of any nature whatsoever based upon or in any way relating
to Agent's securing or failure to secure any insurance, or any decision made by
Agent with respect to the amount or extent of coverage thereof or the company or
companies issuing, brokering or negotiating such insurance;
2.9. To respond to complaints and inquiries by Tenants, prospective
tenants and others, and to take such corrective actions as Agent deems
appropriate;
2.10. To contract on behalf of and at the expense of Owner for such
supplies and services in reasonable quantities and at reasonable prices as may
be appropriate with respect to the Property, and to supervise and administer
such contracts, including, without limitation, contracts for mechanical
maintenance (including preventative maintenance), window and facade maintenance
and cleaning, metal maintenance, pest control, trash removal, janitorial and
maintenance supplies, building security, public relations, collection and credit
reporting, legal and accounting services, computer services, architectural and
engineering services, laundry services, and janitorial or cleaning services. In
so contracting, Agent may contract with entities or persons affiliated with it,
provided, however, that the rates and charges of the affiliated entity or person
are generally competitive and consistent with rates and charges by
non-affiliated entities and will obtain a minimum of two competitive bids from
nonaffiliated contractors respecting any contract exceeding Ten Thousand Dollars
($10,000.00);
2.11. To negotiate on behalf of Owner any applicable labor or
collective bargaining agreements related to employees of Owner at the Property;
2.12. To hire, discharge, promote or demote, and supervise the on-site
employees of Owner, if any, which employees may include, but are not necessarily
limited to, a building executive director or supervisor, building manager,
leasing specialist or leasing agent, secretarial and clerical staff, maintenance
personnel, porters, laborers, security staff and watchmen, provided, however,
that any personnel hired by Agent whose wages are not provided for in the
approved budget, or otherwise approved by Owner and shall be employees of Agent
and their wages and fringe benefits shall be paid by Agent without reimbursement
by Owner;
2.13. To supervise and coordinate the moving in and moving out of
Tenants to accomplish efficient and time saving use of personnel and elevators
and maintain appropriate public relations with Tenants and prospective tenants;
2.14. To prepare and file and/or cause to be prepared and filed on
behalf of Owner necessary forms for insurance, hospitalization, benefits, social
security taxes, union dues and contributions and such other forms, documents and
returns as may be required by any governmental authority, a collective
bargaining agreement, or otherwise with respect to employees of Owner at the
Property;
2.15. To prepare and file or cause to be prepared and filed on behalf
of Owner such applications for permits, and/or licenses as may be required for
the operation of the Property;
2.16. To prepare and, where appropriate, transmit payroll records,
accounting reports, vacancy and occupancy reports, delinquency reports, cash
flow reports, and disbursement ledgers. Agent may contract with others,
including but not limited to entities or persons affiliated with it, or provide
its own personnel for the performance of accounting, bookkeeping and computer
services in connection with such preparation and transmittal, all without any
additional charge to Owner;
2.17. To institute and prosecute on behalf of Owner such legal actions
or proceedings as the Agent deems appropriate; to collect sums due Owner; with
Owners approval, to evict a Tenant, former Tenant or occupant of the Property;
to regain possession of the Property or any part thereof; to contest any xxxx or
charge asserted against or with respect to the Property; to defend any
administrative or legal action brought against Agent and/or Owner with respect
to the Property; with Owner's approval, to commence litigation pertaining to any
labor or employment related dispute; to administratively process or litigate any
tax related issue or other issues relating to the Property; to appeal all such
proceedings and law suits; and to settle or compromise any claims, law suits,
judgments and proceedings relating to the Property, provided however that Agent
shall first notify Owner of any compromise which would result in an expenditure
by or loss to Owner in excess of $10,000;
2.18. To maintain such bank or similar accounts on behalf of Owner as
are necessary or appropriate in the operation of the Property, including such
reserve, investment, security, escrow and other accounts;
2.19. To open and maintain accounts on behalf of Owner with such
suppliers and vendors as are necessary or appropriate for the efficient
operation of the Property;
2.20. Subject to the approval by the Owner, to join and participate on
Owner's behalf in such professional, trade or industry organizations and
associations relating to office buildings as is necessary or appropriate with
respect to the operation of the Property;
2.21. To notify Owner of any violations of any laws, orders, rules, or
determinations of any governmental authority or agency affecting the Property
promptly after such occurrence is known to Agent;
2.22. To notify Owner of any catastrophe or major loss or damage or
other material adverse change with respect to the property, and to similarly
notify all appropriate insurance authorities of the same, promptly upon Agent's
knowledge thereof;
2.23. To supervise and arrange for all construction work performed on
behalf of Owner at, in or about the Property, provided, however, that with
respect to any construction work in excess of $10,000, Agent shall be paid a
construction supervision fee in the amount of five percent (5%) of the total
construction costs or such greater amount as is negotiated and agreed upon by
Agent and Owner;
2.24. Upon request of Owner, to provide or arrange for such
engineering, architectural, design or consulting services with respect to
construction, rehabilitation or decorating work or proposed construction,
rehabilitation or design work at the Property, all such services to be paid for
by Owner;
2.25. To handle on behalf of Owner the submission to appropriate
insurance officials of insurance claims and the settlement thereof, provided
however, that with respect to any proceeds or reimbursements with respect to
such claim which is in excess of Twenty Five Thousand Dollars ($25,000), Agent
shall be paid a processing fee, in addition to all other fees set forth herein,
in an amount equivalent to three percent (3%) of the amount received by the
Owner with respect to that claim;
2.26. To prepare such reports, data, presentations, market surveys or
other material as Owner requests in connection with the sale, refinancing,
disposition or master leasing of the Property;
2.27. To institute at Owner's expense, advertising, marketing and
public relations campaigns pertaining to the Property;
2.28. To recommend to Owner, where Agent deems it appropriate, programs
for the rehabilitation, remodeling, repairs and marketing of the Property; and
2.29. To perform such other services on behalf of Owner with respect to
the Property customarily performed by agents within the Property's geographical
area as shall be reasonably requested from time to time by Owner. If Owner and
Agent disagree as to which services are customarily performed by agents as
aforesaid, Agent shall not be required to perform such service until resolution
of such dispute, and such non-performance shall not be the basis of termination
by Owner of this Agreement.
3. Owner expressly withholds from Agent any power or authority to make
any structural changes in any building or to make any other major alterations or
additions in or to any such building or equipment therein, or to incur any
expense chargeable to Owner other than expenses related to exercising the
express powers above vested in Agent without the prior written direction of
Owner (or any party that Owner shall direct), except such emergency repairs as
may be required because of danger to life or property or which are immediately
necessary for the preservation and safety of the Property or the safety of the
occupants thereof or are required to avoid the suspension of any necessary
service to the Property.
3.1. Agent agrees to remit promptly to the account designated by Owner,
all receipts received in the prior calendar month with respect to the Property
in excess of budgeted operating expenses and reserves.
4. Owner shall, at all times, provide necessary funds to maintain and
operate the Property as efficiently as possible and in a first class manner in
keeping with the standards of operations for similarly situated shopping centers
in the area. Owner shall advance such funds to Agent no later than fifteen (15)
days after its receipt from Agent of notice of the necessity for such advance.
Owner agrees to provide any anticipated cash deficits fifteen (15) days prior to
its occurrence.
5. Except as otherwise provided for herein, Owner shall pay to Agent a
property management fee in an amount equal to four percent (4 %) of the gross
receipts of the Property. This fee shall be payable in monthly installments from
the operating accounts maintained pursuant to Section 2.17 hereof Gross receipts
of the Property shall include all rents, percentage rents, tenant charges,
reimbursements from Tenants for common area maintenance charges, insurance,
utilities and real estate taxes and such other amounts as are collected from
Tenants and shall exclude the proceeds from any sale or refinancing of the
Property or any portion thereof and the proceeds of any settlements, insurance
award (except as provided in Section 2.24) or condemnation award. This fee does
not include payment for leasing services.
5.1. To the extent that operating revenues of the Property are
insufficient to pay the management fee in full when due, and to the extent that
Agent agrees in writing in advance to defer receipt by it of any part of the
management fee due it, the amount so deferred shall bear interest at the rate of
two percentage points in excess of the "prime rate" or "base rate" from time to
time announced by Citibank N.A., New York New York compounded monthly. Nothing
herein contained, however, shall be construed to obligate Agent to defer receipt
by it of any management fee or other fees whatsoever.
5.2. Agent or its affiliate shall be the leasing agent for the
Property. Owner shall pay brokerage commissions to outside brokers, if used in
connection with negotiating a lease, at the rates annexed hereto as Schedule of
Brokerage Commissions. Owner shall pay Agent or its affiliate a leasing
commission for each lease signed during the term of this Agreement upon
occupancy by the tenant pursuant thereto in an amount equal to ninety percent
(90%) of the full leasing commission; provided however, the leasing commission
to Agent or its affiliate shall be reduced to forty five percent (45%) of a full
commission in the event that an outside broker is the procuring broker and is
paid a full commission. In the event of a renewal, the commission payable to
Agent shall be one-half of the commission otherwise payable. This limitation
shall not apply to commissions for the expansion of an existing tenant.
5.3. Owner agrees to pay to Agent or its affiliate a sales commission
equal to 1% of the sales price of the Property, not to exceed $100,000 provided
that no outside broker is involved. However, if there is an outside broker
involved, then Owner shall pay Agent an amount equal to one-half of the
difference between 3% of the sales price and the commission payable to the
outside broker, not to exceed $100,000.
5.4. Owner agrees to pay to Agent or its affiliate a commission equal
to 1% of the principal amount of any financing/refinancing arranged for the
Property, not to exceed $100,000, provided that aggregate commissions for
financing to all involved parties shall not exceed 2%.
6. Owner shall reimburse Agent for reasonable, actual out-of-pocket
expenses including telephone and facsimile charges, postage and express mail
service and travel and food expenses incurred by Agent in connection with
Agent's on site supervision of the Property by Agent's officers and personnel
(evidenced by receipts submitted to Owner).
7. The Agent, on behalf of Owner, shall engage Xxxxxx X. Xxxxxxxx,
Esq., or his successor, as legal counsel to provide legal services for Owner and
the Property. Such services shall be provided as required and at a rate of $150
per hour unless otherwise agreed to by Owner or Agent.
8. In performing its obligations hereunder, Agent shall comply with all
applicable federal, state and local laws and regulations.
9. The initial term of this Agreement shall be for a period of three
(3) years from the date hereof and this Agreement shall automatically renew from
year to year thereafter unless and until terminated by either party upon ninety
(90) days' prior written notice thereof. Notwithstanding the foregoing, Owner
shall be entitled to terminate this Agreement (with no additional compensation)
at any time upon fifteen (15) days' notice to Agent in the event of the
malfeasance or breach of this Agreement by Agent or upon the filing of a
bankruptcy petition against or by Agent. This Agreement shall terminate
automatically (with no additional compensation) if:
(i) all or substantially all of the Property is condemned or
acquired by eminent domain; or
(ii) all or substantially all of the Property is destroyed by
fire or other casualty as a result of which all or substantially all of Tenants
are unable to continue the normal conduct of their business in their respective
occupied spaces and are permanently released under their respective leases from
the payment of all rent thereunder; or
(iii) all of the Property is sold to an unrelated, third-party
purchaser; or
(iv) in the event of the death, disability (for a period of
180 days during any 365 consecutive days) or incompetency of Xxx X. Xxxxxx, or
if Xxx X. Xxxxxx is no longer chief executive officer of the Agent or the
Agent's permitted assign.
10. Owner shall pay or reimburse Agent for any monies due it under
this Agreement for services prior to termination, notwithstanding termination of
this Agreement. All provisions of this Agreement that require Owner to have
insured or to defend, reimburse or indemnify Agent shall survive any termination
and, if Agent is or becomes involved in any proceeding or litigation by reason
of having been Owner's Agent, such provisions shall apply as if this Agreement
were still in effect. Owner agrees that Agent may withhold funds for thirty (30)
days after the end of the month in which this Agreement is terminated to pay
bills previously incurred but not yet invoiced, and to close accounts.
11. Owner agrees to release, indemnify, defend, and save the Agent,
its officers and employees harmless from and against all claims, disputes,
losses, liabilities and suits (including but not limited to all attorneys' fees
and litigation expenses and Agent's costs in connection therewith) in any way:
(i) relating to or arising in connection with the Property
and/or damage to property and injuries to or death of any employee, invitee or
other person whomsoever, and/or Agent's performance of its duties hereunder;
(ii) relating to any proceeding or suit involving an alleged
violation by Owner of any law applicable to the Property or operations thereof;
and
(iii) relating to obligations assumed by Agent, its officers
or employees in connection with any financing or refinancing entered into in
connection with the Property.
11.1. The obligations of Owner to indemnify, hold harmless, and
reimburse Agent are subject to the following conditions:
(i) Agent shall promptly notify Owner of any matter with
respect to which Owner is required to indemnify, hold harmless, or reimburse
Agent; and
(ii) Agent shall not take or fail to take any actions,
including an admission of liability, which would bar Owner from enforcing any
applicable coverage under policies of insurance held by Owner 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, provided such action or failure to act resulted from the gross
negligence or willful malfeasance of Agent.
Notwithstanding the foregoing, Owner shall not be required to
indemnify, hold harmless, or reimburse Agent with respect to any matter to the
extent the same resulted from the gross negligence or willful malfeasance of
Agent or actions taken by Agent outside of the scope of Agent's authority under
this Agreement or any express or implied direction of Owner.
The provisions of this section shall survive the expiration
and any termination of this Agreement.
12. Owner and Agent shall each waive any claim for loss or damage
against the other and mutually agree to hold each other harmless for loss to the
Property to the extent that either party is reimbursed or indemnified by
insurance coverage.
13. Agent will promptly notify Owner of any violations of any
requirements of any statute, ordinance, law or regulation of any Governmental
body or any public authority or official thereof having jurisdiction and shall
promptly take all actions necessary to cure such violations and to prevent any
civil or criminal liability from being imposed.
14. In the event it is alleged or charged that the Property or any
equipment therein or any act or failure to act by the Owner or its agents with
respect to the Property or the sale, rental, or other disposition thereof fails
to comply with, or is in violation of, any of the requirements of any provision,
statute, ordinance, law, or regulation of any Governmental body or any order or
ruling of any public authority or official thereof having or claiming to have
jurisdiction thereover, and Agent, in its sole and absolute discretion'
considers that the action or position of Owner may result in damage or liability
to Agent, Agent shall have the right to cancel this Agreement at any time by
giving not less than thirty (30) days' prior written notice to Owner of its
election so to do, which cancellation shall be effective upon the service of
such notice. Such notice may be served personally or by United States certified
mail, and if served by mail shall be deemed to have been served when deposited
in the United States mail system. Such cancellation shall not release the
indemnities of Owner and Agent set forth herein and shall not terminate (i) any
liability or obligation of Owner to Agent for any payment, reimbursement, or
other sum of money then due and payable to Agent hereunder as of the date of
such cancellation, or (ii) any obligation of Agent to remit moneys to Owner or
to complete its obligations hereunder to the date of such cancellation. Agent
shall cooperate with Owner to ensure a smooth and efficient transition to a new
managing agent, including but not limited to, prompt delivery of files relating
to the Property.
15. Agent agrees to release, indemnify, defend and save Owner harmless
from and against all claims, disputes, losses, liabilities and suits (including
but not limited to all attorneys' fees and litigation expenses and Owner's costs
in connection therewith) in any way resulting from the gross negligence or
willful malfeasance of Agent, or its employees:
(i) Relating to or arising in connection with the Property
and/or damage to property and injuries to or death of any employee, invitee or
other person whomsoever, and/or Agent's performance of its duties hereunder; and
(ii) Relating to any proceeding or suit involving an alleged
violation by Agent of any law applicable to the Property or operations thereof.
16. It is expressly agreed by the parties that:
16.1. The parties have entered into this Agreement without any
inducements, representations, statements, warranties or agreements made by
either party other than those expressly stated herein.
16.2. This Agreement embodies the entire understanding of the parties
with respect to the subject matters stated herein and there are no other
understandings or undertakings related to the within subject matters. This
Agreement may be modified only by a written agreement signed by the parties
hereto.
16.3. The provisions of this Agreement are severable and to the extent
that any provision herein is determined by court order, law or rule to be
invalid, such invalidity shall in no way affect nor invalidate the other
provisions of this Agreement.
16.4. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16.5. With respect to any and all disputes under or relating to this
Agreement, the parties consent to the exclusive jurisdiction and venue of the
Supreme Court of the State of New York Nassau County and the United States
District Court for the Eastern District of New York and the appellate courts
with supervisory powers thereover.
16.6. The parties agree that in any litigation or proceeding commenced
by either party against the other, service of process shall be deemed to be
effective either by hand delivery thereof or by the mailing thereof via
certified mail, postage prepaid, with a proof of mailing receipt validated by
the U.S. Postal Service constituting the sufficient evidence of service of
process.
16.7. With respect to any notices that are required or permitted to be
made pursuant to this Agreement, they shall be in writing and either delivered
personally or sent by United States mail addressed as follows:
As to Owner:
THE POINT ASSOCIATES, L.P.
c/o SKR Management Corp.
00 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxx
As to Agent:
SKR Management Corp.
00 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
16.8. This Agreement may not be assigned by Agent without the prior
written consent of Owner, provided, however, that Owner consents to Agent's
designating a subsidiary or affiliate of Agent to act on behalf of Agent as
leasing and rental agent for the Property. This Agreement shall be binding upon
and benefit the parties hereto and their respective successors and permitted
assigns.
17. Owner expressly consents to the assignment of Agent's rights and
obligations hereunder to Acadia Management Company.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties have executed this Property Management Agreement as of the day and year
first set forth above.
AGENT
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SKR MANAGEMENT CORP.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx
Vice President
OWNER
THE POINT ASSOCIATES, L.P.
By: Selbridge Corporation N.V.
General Partner
By: /s/ Xxx X. Xxxxxx
-----------------------------
Xxx X. Xxxxxx
President
EXHIBIT A
Long Island Leasing Commissions
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7% per annum - first three years
3% per annum each year thereafter
New York City
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6% per annum - first year
5% per annum - second year
4% per annum - third year
3.5% per annum - fourth year
3.5% per annum - fifth year
2.5% per annum - sixth year
2% per annum - each additional year
Westchester, Goshen and Monticello
----------------------------------
Same as Long Island
New Jersey and Pennsylvania
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5% per annum
Ground Leases
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10% (whole term)
