PROPERTY MANAGEMENT AGREEMENT
-----------------------------
THIS PROPERTY MANAGEMENT AGREEMENT (this "Agreement") is
entered into as of March 24, 2000 among Six-A SAC Self-Storage
Corporation, a Nevada corporation, with its principal place of
business at 000 Xxxxx Xxxxxxx Xxxx Xxxxx, Xxxx, XX 00000
("Owner"), and the property managers identified on Exhibit A
---------
attached hereto and incorporated herein by reference (each such
property manager is respectively referred to herein as "U-Haul").
RECITALS
--------
A. Owner owns the leasehold estate in the real property and
self-storage related improvements thereon located at the street
addresses identified on Exhibit A hereto (hereinafter,
collectively the "Property").
B. Owner intends that the Property be rented on a space-by-
space retail basis to corporations, partnerships, individuals
and/or other entities for use as self-storage facilities.
C. Owner desires that U-Haul manage the Property and U-Haul
desires to act as the property manager for the Property, all in
accordance with the terms and conditions of this Agreement and as
more specifically designated on Exhibit A hereto.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, Owner and U-Haul hereby agree as follows.
1. Employment.
----------
(a) Owner hereby retains U-Haul, and U-Haul agrees to act as
manager of the Property upon the terms and conditions hereinafter
set forth.
(b) Owner acknowledges that U-Haul, and/or U-Haul affiliates,
is in the business of managing self-storage facilities, both for
its own account and for the account of others. It is hereby
expressly agreed that notwithstanding this Agreement, U-Haul and
such affiliates may continue to engage in such activities, may
manage facilities other than those presently managed by U-Haul and
its affiliates (whether or not such other facilities may be in
direct or indirect competition with Owner) and may in the future
engage in other business which may compete directly or indirectly
with activities of Owner.
(c) In the performance of their respective duties under this
Agreement, each U-Haul property manager shall occupy the position
of an independent contractor with respect to Owner. Nothing
contained herein shall be construed as making the parties hereto
(or any of them) partners or joint venturors, nor (except as
expressly otherwise provided for herein) construed as making
U-Haul an agent or employee of Owner or of any other U-Haul property
manager hereunder.
2. Duties and Authority of U-Haul.
------------------------------
(a) GENERAL DUTIES AND AUTHORITY. Subject only to the
restrictions and limitations provided in paragraphs (o) and (p) of
this Section 2 and the right of Owner to terminate this Agreement
as provided in Section 6 hereof, U-Haul shall have the sole and
exclusive authority to fully manage the Property and supervise and
direct the business and affairs associated or related to the daily
operation thereof, and, to that end on behalf of Owner, to execute
such documents and instruments as, in the sole judgment of U-Haul,
are reasonably necessary or advisable under the circumstances in
order to fulfill U-Haul's duties hereunder. Such duties and
authority shall include, without limitation, those set forth
below.
(b) RENTING OF THE PROPERTY. U-Haul shall establish policies
and procedures for the marketing activities for the Property, and
may advertise the Property through such media as U-Haul deems
advisable, including, without limitation, advertising with the
Yellow Pages. U-Haul shall have the sole discretion, which
discretion shall be exercised in good faith, to establish the
terms and conditions of occupancy by the tenants of the Property,
and U-Haul is hereby authorized to enter into rental agreements on
behalf and for the account of Owner with such tenants and to
collect rent from such tenants. U-Haul may jointly advertise the
Property with other properties owned or managed by U-Haul, and in
that event, U-Haul shall reasonably allocate the cost of such
advertising among such properties.
(c) REPAIR, MAINTENANCE AND IMPROVEMENTS. U-Haul shall make,
execute, supervise and have control over the making and executing
of all decisions concerning the acquisition of furniture, fixtures
and supplies for the Property, and may purchase, lease or
otherwise acquire the same on behalf of Owner. U-Haul shall make
and execute, or supervise and have control over the making and
executing of all decisions concerning the maintenance, repair, and
landscaping of the Property. U-Haul shall, on behalf of Owner,
negotiate and contract for and supervise the installation of all
capital improvements related to the Property; provided, however,
that U-Haul agrees to secure the prior written approval of Owner
on all such expenditures in excess of $5,000.00 for any one item,
except monthly or recurring operating charges and/or emergency
repairs if in the opinion of U-Haul such emergency-related
expenditures are necessary to protect the Property from damage or
to maintain services to the tenants as called for in their
respective leases.
(d) PERSONNEL. U-Haul shall select all vendors, suppliers,
contractors, subcontractors and employees with respect to the
Property and shall hire, discharge and supervise all labor and
employees required for the operation and maintenance of the
Property. Any employees so hired shall be employees of U-Haul,
and shall be carried on the payroll of U-Haul. Employees may
include, but will not be limited to, on-site resident managers,
on-site assistant managers, and relief managers located, rendering
services, or performing activities on the Property in connection
with its operation and management. The cost of employing such
persons shall not exceed prevailing rates for comparable persons
performing the same or similar services with respect to real
estate similar to the Property.
(e) AGREEMENTS. U-Haul shall negotiate and execute on behalf
of Owner such agreements which U-Haul deems necessary or advisable
for the furnishing of utilities, services, concessions and
supplies, for the maintenance, repair and operation of the
Property and such other agreements which may benefit the Property
or be incidental to the matters for which U-Haul is responsible
hereunder.
(f) OTHER DECISIONS. U-Haul shall make all decisions in
connection with the daily operation of the Property.
(g) REGULATIONS AND PERMITS. U-Haul shall comply in all
material respects with any statute, ordinance, law, rule,
regulation or order of any governmental or regulatory body, having
jurisdiction over the Property, respecting the use of the Property
or the maintenance or operation thereof. U-Haul shall apply for
and attempt to obtain and maintain, on behalf of Owner, all
licenses and permits required or advisable (in the sole judgment
of U-Haul) in connection with the management and operation of the
Property.
(h) RECORDS AND REPORTS OF DISBURSEMENTS AND COLLECTIONS.
U-Haul shall establish, supervise, direct and maintain the operation
of a system of record keeping and bookkeeping with respect to all
receipts and disbursements in connection with the management and
operation of the Property. The books, records and accounts shall
be maintained at the U-Haul office or at such other location as
U-Haul shall determine, and shall be available and open to
examination and audit quarterly by Owner, its representatives, any
mortgagee of the Property, and such mortgagee's representative.
On or before thirty (30) days after the close of each quarter,
U-Haul shall cause to be prepared and delivered to Owner, a monthly
statement of receipts, expenses and charges, together with a
statement of the disbursements made by U-Haul during such period
on Owner's behalf.
(i) [Reserved].
(j) COLLECTION. U-Haul shall be responsible for the billing
and collection of all accounts receivable and for payment of all
accounts payable with respect to the Property and shall be
responsible for establishing policies and procedures to minimize
the amount of bad debts.
(k) LEGAL ACTIONS. U-Haul shall cause to be instituted, on
behalf and in the name of Owner, any and all legal actions or
proceedings U-Haul deems necessary or advisable to collect
charges, rent or other income due to Owner with respect to the
Property and to oust or dispossess tenants or other persons
unlawfully in possession under any lease, license concession
agreement or otherwise, and to collect damages for breach thereof
or default thereunder by such tenant, licensee, concessionaire or
occupant.
(l) INSURANCE. U-Haul shall use its best efforts to assure
that there is obtained and maintained in force, fire,
comprehensive liability and other insurance policies in amounts
generally carried with respect to similar facilities. U-Haul may
in its discretion obtain employee theft or similar insurance in
amounts and with such deductibles as U-Haul deems appropriate.
U-Haul shall promptly provide Owner with such certificates of
insurance as Owner may reasonably request in writing, evidencing
such insurance coverage.
(m) TAXES. During the term of this Agreement, U-Haul shall
pay from Owner's funds, prior to delinquency, all real estate
taxes, personal property taxes, and all other taxes assessed to,
or levied upon, the Property. If required by the holder of any
note secured by the Property, U-Haul will set aside, from Owner's
funds, a reserve from each month's rent and other income
collected, in an amount required by said holder for purposes of
payment of real property taxes.
(n) RESTRICTIONS. Notwithstanding anything to the contrary
set forth in this Section 2, U-Haul shall not be required to do,
or cause to be done, anything for the account of Owner (i) which
may make U-Haul liable to third parties; (ii) which may not be
commenced, undertaken or completed because of insufficient funds
of Owner; or, (iii) which may not be commenced, undertaken or
completed because of acts of God, strikes, governmental
regulations of laws, acts of war or other types of events beyond
the control of U-Haul, whether similar or dissimilar to the
foregoing.
(o) LIMITATIONS ON U-HAUL AUTHORITY. Notwithstanding
anything to the contrary set forth in this Section 2, U-Haul shall
not, without obtaining the prior written consent of Owner, (i)
rent storage space in the Property by written lease or agreement
for a stated term in excess of one year, (ii) alter the building
or other structures of the Property in any material manner; (iii)
make any other agreements which exceed a term of one year and are
not terminable on thirty day's notice at the will of Owner,
without penalty, payment or surcharge; (iv) act in violation of
any law; or (v) act in violation of any duty or responsibility of
Owner under any mortgage loan secured by the Property.
(p) SHARED EXPENSES. Owner acknowledges that certain
economies may be achieved with respect to certain expenses to be
incurred by U-Haul on behalf of Owner hereunder if materials,
supplies, insurance or services are purchased by U-Haul in
quantity for use not only in connection with the Property but in
connection with other properties owned or managed by U-Haul or its
affiliates. U-Haul shall have the right to purchase such
materials, supplies, insurance and/or services in its own name and
charge Owner a pro rata allocable share of the cost of the
foregoing; provided, however, that the pro rata cost of such
purchase to Owner shall not result in expenses greater than would
otherwise be incurred at competitive prices and terms available in
the area where the Property is located; and provided further,
U-Haul shall give Owner access to records so Owner may review any
such expenses incurred.
(q) DEPOSITS OF GROSS REVENUES. All Gross Revenues (as
hereinafter defined) shall be deposited into a trust bank account
maintained by U-Haul (or its parent company) as trustee for the
benefit of the Owner. To the extent that the Gross Revenues are
deposited into a collective trust account maintained by U-Haul (or
its parent company) for the benefit of multiple property owners,
such trust account will clearly identify the beneficiaries and
U-Haul (or its parent company) shall reconcile such account daily
and maintain such records as shall clearly identify each day the
respective interest of each beneficiary in such collective trust
account. Gross Revenues of the Owner shall be applied first to
the repayment of Owner's senior debt with respect to the Property,
and then to U-Haul in reimbursement of expenses and for management
fees as provided under Section 4 below.
3. Duties of Owner.
---------------
Owner hereby agrees to cooperate with U-Haul in the
performance of U-Haul's duties under this Agreement and to that
end, upon the request of U-Haul, to provide, at such rental
charges, if any, as are deemed appropriate, reasonable office
space for U-Haul employees on the premises of the Property and to
give U-Haul access to all files, books and records of Owner
relevant to the Property. Owner shall not unreasonably withhold
or delay any consent or authorization to U-Haul required or
appropriate under this Agreement.
4. Compensation of U-Haul.
----------------------
(a) MANAGEMENT FEE. Owner shall pay to U-Haul as the full
amount due for the services herein provided a fee (the "Management
Fee") equal to six percent (6%) of the "Gross Revenue" derived
from or connected with the Property so managed by U-Haul
hereunder. The term "Gross Revenue" shall mean all receipts
(excluding security deposits unless and until Owner recognizes the
same as income) of Owner (whether or not received by U-Haul on
behalf or for the account of Owner) arising from the operation of
the Property, including without limitation, rental payments of
lessees of space in the Property, vending machine or
concessionaire revenues, maintenance charges, if any, paid by the
tenants of the Property in addition to basic rent, parking fees,
if any, and all monies whether or not otherwise described herein
paid for the use of the Property. "Gross Revenue" shall be
determined on a cash basis. The Management Fee shall be paid
promptly at the end of each calendar quarter and shall be
calculated on the basis of the "Gross Revenue" of such preceding
quarter. The Management Fee shall be paid to each U-Haul property
manager herein identified based on the Gross Revenue of each
respective Property for which such property manager is responsible
as set forth on Exhibit A hereto. Each property manager agrees
---------
that its monthly Management Fee shall be subordinate to that
month's principal balance and interest payment on any first lien
position mortgage loan on the Property.
It is understood and agreed that the Management Fee will not
be reduced by the cost to Owner of those employees and independent
contractors engaged by or for Owner, including but not limited to
the categories of personnel specifically referred to in Section
2(d). Except as provided in this Section 4, it is further
understood and agreed that U-Haul shall not be entitled to
additional compensation of any kind in connection with the
performance by it of its duties under this Agreement.
(b) REIMBURSEMENT OF CERTAIN EXPENSES. In addition to the
Management Fee described above, U-Haul shall be entitled to
reimbursement from Owner, on a quarterly basis, for all out-of-
pocket expenses incurred by U-Haul hereunder in connection with
the management and operation of the Property, including, without
limitation, taxes, insurance, operational expenses, overhead,
litigation and dispute resolution related expenses, capital
improvement expenses, and costs of sales.
5. Use of Trademarks, Service Marks and Related Items.
--------------------------------------------------
Owner acknowledges the significant value of the "U-Haul" name
in the operations of Owner's property and it is therefore
understood and agreed that the name, trademark and service xxxx,
"U-Haul", and related marks, slogans, caricatures, designs and
other trade or service items shall be utilized for the non-
exclusive benefit of Owner in the rental and operation of the
Property, and in comparable operations elsewhere. It is further
understood and agreed that this name and all such marks, slogans,
caricatures, designs and other trade or service items shall remain
and be at all times the property of U-Haul and its affiliates, and
that, except during the term hereof and as expressly provided
herein, Owner shall have no right whatsoever therein. Owner
agrees that during the term of this agreement the sign faces at
the property will have the name "U-Haul." The U-Haul sign faces
will be paid for by Owner. Upon termination of this agreement at
any time for any reason, all such use by and for the benefit of
Owner of any such name, xxxx, slogan, caricature, design or other
trade or service item in connection with the Property shall, in
any event, be terminated and any signs bearing any of the
foregoing shall be removed from view and no longer used by Owner.
In addition, upon termination of this Agreement at any time for
any reason, Owner shall not enter into any new leases of Property
using the U-Haul lease form or use other forms prepared by U-Haul.
It is understood and agreed that U-Haul will use and shall be
unrestricted in its use of such name, xxxx, slogan, caricature,
design or other trade or service item in the management and
operation of other storage facilities both during and after the
expiration or termination of the term of this Agreement.
6. Termination.
-----------
Owner or U-Haul may terminate this Agreement with or without
cause by giving not less than thirty days' written notice to the
other party pursuant to Section 11 hereof. In addition, if Owner
fails to pay U-Haul any amounts owed under this Agreement when
due, U-Haul may terminate this Agreement by giving Owner not less
than ten days written notice pursuant to Section 11 hereof.
Notwithstanding the foregoing, however, U-Haul shall not resign as
property manager of the Property until a nationally recognized and
reputable successor property manager is available and prepared to
assume property management responsibilities with respect to the
Property in question Upon termination of this Agreement, U-Haul
shall promptly return to Owner all monies, books, records and
other materials held by U-Haul for or on behalf of Owner. In
addition, if U-Haul has contracted to advertise the Property in
the Yellow Pages, Owner shall, at the option of U-Haul, continue
to be responsible for the cost of such advertisement and shall
either (i) pay U-Haul the remaining amount due under such contract
in a lump sum; or (ii) pay U-Haul monthly for the amount due under
such contract.
7. Indemnification.
---------------
Owner hereby agrees to indemnify and hold each of U-Haul, all
persons and companies affiliated with U-Haul, and all officers,
shareholders, directors, employees and agents of U-Haul and of any
affiliated companies or persons (collectively, the "Indemnified
Persons") harmless from any and all costs, expenses, attorneys'
fees, suits, liabilities, judgments, damages, and claims in
connection with the management of the Property (including the loss
of use thereof following any damage, injury or destruction),
arising from any cause except for the willful misconduct or gross
negligence on the part of the Indemnified Persons. In addition,
no Indemnified Person shall be liable for any error of judgment or
for any mistake of fact or law, or for anything which it may do or
refrain from doing hereafter, except in cases of willful
misconduct or gross negligence. U-Haul hereby agrees to indemnify
and hold Owner harmless from any and all costs, expenses,
attorneys' fees, suits, liabilities, judgments, damages and claims
in connection with the management of the Property arising from the
willful misconduct of, gross negligence of, or breach of this
Agreement by the Indemnified Persons. In addition, U-Haul shall
not be liable to Owner for the acts or omissions of U-Haul's
officers, shareholders, directors, employees, and agents except
for U-Haul's own gross negligence or willful misconduct.
8. Assignment.
----------
This Agreement may be assigned by Owner in connection with
any mortgage loan on the Property, whether pursuant to a
conditional or unconditional, absolute assignment. U-Haul shall
have the right to assign this Agreement to an affiliate or a
wholly or majority owned subsidiary; provided, however, any such
assignee must assume all obligations of U-Haul hereunder, Owner's
rights hereunder will be enforceable against any such assignee and
U-Haul shall not be released from its liabilities hereunder unless
Owner shall expressly agree thereto in writing.
9. Headings.
--------
The headings contained herein are for convenience of
reference only and are not intended to define, limit or describe
the scope or intent of any provision of this Agreement.
10. Governing Law.
-------------
The validity of this Agreement, the construction of its terms
and the interpretation of the rights and duties of the parties
shall be governed by the internal laws of the State of Arizona.
11. Notices.
-------
Any notice required or permitted herein shall be in writing
and shall be personally delivered or mailed first class postage
prepaid or delivered by an overnight delivery service to the
respective addresses of the parties set forth below their
signatures on the signature page thereof, or to such other address
as any party may give to the other in writing. Any notice
required by this Agreement will be deemed to have been given when
personally served or one day after delivery to an overnight
delivery service or five days after deposit in the first class
mail.
12. Severability.
------------
Should any term or provision hereof be deemed invalid, void
or unenforceable either in its entirety or in a particular
application, the remainder of this Agreement shall nonetheless
remain in full force and effect and, if the subject term or
provision is deemed to be invalid, void or unenforceable only with
respect to a particular application, such term or provision shall
remain in full force and effect with respect to all other
applications.
13. Successors.
----------
This Agreement shall be binding upon and inure to the benefit
of the respective parties hereto and their permitted assigns and
successors in interest.
14. Attorneys' Fees.
---------------
If it shall become necessary for any party hereto to engage
attorneys to institute legal action for the purpose of enforcing
their respective rights hereunder or for the purpose of defending
legal action brought by the other party hereto, the party or
parties prevailing in such litigation shall be entitled to receive
all costs, expenses and fees (including reasonable attorneys'
fees) incurred by it in such litigation (including appeals).
15. Counterparts.
------------
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Scope of Property Manager Responsibility.
----------------------------------------
The duties, obligations and liability of each property
manager identified herein shall extend only so far as to relate to
the Property for which such property manager is managing located
in the domicile state of such property manager, as more
specifically described on Exhibit A hereto, and no individual
property manager hereunder shall be liable for the acts or
omissions of any other property manager hereunder. Each property
manager shall use its best efforts to assist Owner in fulfilling
Owner's obligations arising under any loan to Owner that is
secured by the Property, including but not limited to preparing
and providing financial and accounting reports, and maintaining
the Property. Each property manager agrees that it will perform
its obligations hereunder according to reasonable industry
standards, in good faith, and in a commercially reasonable manner.
U-Haul agrees that, in discharging its duties hereunder, it will
not have any relationship with any of its affiliates that would be
less favorable to Owner than would reasonably be available in a
transaction with an unaffiliated party.
[Rest of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto execute this Agreement
as of the date first above written.
"Owner"
Six-A SAC Self-Storage Corporation,
a Nevada corporation
By: /S/ XXXX X. XXXXX
----------------------------
Xxxx X. Xxxxx, President
"U-Haul"
U-Haul Co. of Maryland, Inc.,
a Maryland corporation
By: /S/ XXXX X. XXXXXXXXXXX
----------------------------------
Xxxx X. Xxxxxxxxxxx, Secretary
U-Haul Co. of Texas, Inc.,
a Texas corporation
By: /S/ XXXX X. XXXXXXXXXXX
----------------------------------
Xxxx X. Xxxxxxxxxxx, Secretary
U-Haul Co. of Oregon, Inc.,
An Oregon corporation
By: /S/ XXXX X. XXXXXXXXXXX
----------------------------------
Xxxx X. Xxxxxxxxxxx, Secretary
U-Haul Co. of New Hampshire, Inc.,
a New Hampshire corporation
By: /S/ XXXX X. XXXXXXXXXXX
------------------------------
Xxxx X. Xxxxxxxxxxx, Secretary
SIX SAC SELF-STORAGE CORPORATION, a Nevada corporation, fee owner of each
Property, hereby consents to this Agreement and the transactions contemplated
hereby.
DATED: March __ 2000
SIX SAC Self-Storage Corporation,
a Nevada corporation
By: /S/ XXXX X. XXXXX
------------------------
Xxxx X. Xxxxx, President
EXHIBIT A
---------
Address: Name of Property Manager:
U-Haul Hyattsville, 0000 Xxxxxxx Xx. Xxxxxxxxxxx, XX U-Haul Co. of Maryland, Inc.
U-Haul Center Research, 0000 Xxxxxx Xx., Xxxxxx, XX U-Haul Co. of Texas, Inc.
U-Haul Beaverton, 00000 XX XX Xxxxxxx, Xxxxxxxxx, XX U-Haul Co. of Oregon, Inc.
U-Haul S. Willow, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX U-Haul Co of New Hampshire, Inc.
