Exhibit 6(i)
MANAGEMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the.30th Day of April , 1999
(hereinafter between Golden Opportunity Development Corporation, a Louisiana
corporation referred to as "Owner") and Diversified Holdings 1, Inc. a Nevada
corporation (hereinafter referred to as "Manager"). The subject matter of this
Agreement is the motel and retail buildings located in the city of Baton Rouge,
Louisiana owed by Owner (hereinafter referred to as the "Property").
Owner desires that the Property be managed and that accounting,
management and maintenance services be provided by Manager serving as an agent
for the Owner on the terms and conditions herein set forth.
In consideration for the terms, conditions and covenants set forth
herein, the parties mutually agree as follows:
AGENCY
Owner hereby appoints Manager as Owner's agent for the retail
management of the Property, commencing as of the date of this Agreement. Manager
shall serve in such capacity as an independent contractor and not as an employee
of Owner. Subject to such express restrictions or limitations on its authority
as are set forth below or as may be agreed upon by the parties hereto in
writing, Manager shall perform the services and have the powers as herein set
forth as to the property.
MANAGEMENT
So long as it manages the Property:
(a) Manager shall use all rents collected from the Property to pay all
items set forth herein which Manager is to pay at Owner's cost and expense. It
is the intent of the parties that Manager shall be reimbursed for all legitimate
expenses of the Property incurred by Manager.
(b) Manager shall use its best efforts to rent or lease all available
space within the Property. Manager shall, at owner's expense, promote such
leasing and rental of motel rooms by such reasonable use of advertising,
circulars and other promotional aids as it deems appropriate.
(c) As agent for the Owner, Manager shall select and obtain tenants,
arrange for and execute leases and extensions and renewals of leases on tenants
established by mutual agreement of the parties, terminate tenancies and leases,
and arrange and consent to assignments of leases and subletting of property,
subject to such instructions or directions from Owner as Owner may deem
necessary or appropriate.
(d) Manager shall use its best efforts to collect rent and other income
from the Property. It may in its discretion institute legal proceedings in the
name of Owner, or, in the cases of routine
51
matters, in its own name, to collect the same, to oust or dispossess tenants or
other occupying the Property, and otherwise to enforce the rights of Owner with
respect thereto. Manager may in its discretion compromise claims for rent and
other income or settle such legal proceedings.
(e) Manager shall at Owner's expense (except in cases where a tenant may
be obligated to do so) keep and maintain (i) the entire Property, including
without limitation: the roofs, walls, foundations and appurtenances, exterior
and interiors of the buildings, pipes, heating, cooling, lighting, plumbing and
electrical distribution systems and all other fixtures, machinery and equipment
forming part of the Property and (ii) the entire extent of the personal
property located on or within the Property, including without limitation: the
appliances, drapes, furniture, fixtures, machinery and equipment, in constant
good order, repair and condition, whether the necessity of such repairs may
arise from wear, tear, obsolescence, casualty or other cause, suffering no waste
or injury. To that end, Manager shall, at Owner's expense, promptly make all
needed repairs, replacements and renewals, ordinary and extraordinary,
structural or otherwise. Upon termination of this Agreement, Manager shall
deliver to Owner all real and personal property belonging to the Property in the
condition in which Manager is required to maintain it.
(f) Manager shall contract, in Owner's name, and shall pay from Owner's
accounts at Owner's expense all services to tenants which are usually or
customarily furnished or rendered in connection with the rental of the Property
with reference to the type of property involved and the area in which the
Property is located (hereinafter referred to as "customary services"). No
separate charge shall be made to the tenants by Manager for customary services
which are furnished except as set forth in the leases entered into with the
individual tenants.
(g) Manager shall, in Owner's name, engage and discharge such employees
and others as it deems necessary or appropriate for the maintenance, on site
management and operation of the Property to furnish customary services to the
tenants of the Property and to make repairs with respect to the real and
personal property located on the Property. All such employees shall be in the
employ of the Owner, Owner at it's expense and discretion maintain fidelity
insurance on those of its employees handling funds or assets of the Property.
All such employees shall be covered as necessary with statutory Workmen's
Compensation coverage and shall be subject to all required federal, state and
local tax with holdings with respect to such employees.
(h) Manager shall make any necessary or appropriate rules and
regulations for the operation of the Property.
(i) Manager at Owner's expense shall pay all real property taxes,
special improvements and other assessments, water and sewer rents and charges,
and all other taxes, duties, charges, fees and payments imposed by and
governmental or public authority or which shall be imposed, assessed or levied
or arise in connection with the use, occupancy, or possession of the Property or
any part thereof during the term of this Agreement, all of which are called
"Governmental impositions". In each case, Manager shall deliver to Owner thirty
(30) days prior to the last day upon which Governmental impositions may be paid
without penalty or interest, a copy of the notice of such Governmental
imposition or a copy of a receipt showing payment thereof. Manager shall, upon
the written request of Owner, contest in good faith by appropriate proceedings
conducted promptly at Owner's expense, the validity and enforcement of any
52
Governmental impositions. Manager shall diligently prosecute such contest to
final determination by the court, department or governmental authority or body
having jurisdiction of such contest. Owner agrees to cooperate reasonably with
Manager and to execute any documents or pleadings required for such purpose and
any expense or liability in connection therewith shall be the expense or
liability of the Owner. Manager may defer payment of the contested Governmental
Imposition pending such contest so long as such deferment shall not subject the
interest of Owner in the Property to forfeiture.
(j) Manager shall, at Owner's expense, promptly comply with all present
and future laws, rules, and requirements, orders, directions, ordinances and
regulations of the United States of America or of the state, county and city
governments, or of any other municipal, governmental and lawful authority
whatsoever, affecting the Property or appurtenances of any part thereof, and of
all their departments, bureaus or officials (all of the foregoing being
hereinafter called "Requirements of Law"), whether such requirements may relate
to: (i) structural or other alterations, changes, additions, improvements; or
(ii) repairs, inside or outside, extraordinary or ordinary; or (iii) the manner
in which the Property may be used or occupied; or (iv) any other matter
affecting the Property, whether like or unlike the foregoing. Manager shall
immediately upon the discovery of any violation of a Requirement of Law which
might subject Owner to liability or forfeiture of any interest, take all
necessary steps, legal or equitable, to compel the discontinuance thereof and to
oust and remove any tenants, occupants or other persons guilty of such use.
Manager shall upon the written request of Owner, contest in good faith by
appropriate proceedings conducted promptly at Owner's expense, the validity or
enforcement of any Requirement of Law. Manager shall diligently prosecute such
contest to final determination by the court, department of governmental
authority or body having jurisdiction of such contest. Owner agrees to cooperate
reasonably with Manager, and to execute all documents and pleadings required for
the purpose of such contest and any expense or liability in connection therewith
shall be the expense or liability of the Property and the Owner. Manager may
defer compliance with any Requirement of Law pending such contest so long as
such noncompliance shall not constitute a crime or misdemeanor on the part of
Owner.
(k) Manager, at Owner's expense, shall keep the buildings, personal
property and all improvements included with the Property insured against loss by
fire and so-called extended coverage perils in an amount equal to the full
replacement cost, exclusive of foundations, including all buildings and the
personal property and equipment situated therein. Manager will, at Owner's
expense, obtain at no longer than three year intervals during the period of this
Agreement is in effect, successive appraisals of the building, personal property
and improvement included within the Property by a reliable insurance appraiser
and in the event an appraisal shows a valuation of such improvements in excess
of the valuation theretofore being used for insurance coverage purposes under
the provisions of this paragraph, Manger will increase said insurance coverage
so as to cover such increase in valuation. Manager at Owner's expense shall
provide and keep in force, for the protection of Owner, comprehensive general
public liability and property damage insurance against claims for bodily injury
or death or property damage occurring upon the Property and the sidewalks or
property adjacent thereto, in the limits of not less than $100,000 in respect of
bodily injury or death to any one person and not less than $ 1,000,000 for
bodily injury or death to any number of persons arising our of one accident or
disaster, and in limits of not less than $500,000 for damage to property, and if
53
higher limits shall at any time be customary to protect against possible tort
liability, such higher limits shall be carried. Manager at Owner's expense shall
carry insurance in such amounts as may from time to time be reasonably required
by Owner against other insurable hazards what are at the time commonly insured
against in the case of a similar property in Baton Rouge, Louisiana under this
paragraph shall be carried in the name of the Owner, Manager and the holder of
any indebtedness secured by the Property, as their respective interests shall
appear. Manager shall upon execution of this Agreement deliver such policies to
Owner with evidence of the payment of premiums thereon. Renewals of all policies
at any time in force, with such evidence of payments, shall be delivered to
Owner from time to time at least thirty (30) days before the expiration thereof.
All such insurance shall be taken in such responsible companies as Owner shall
reasonably approve, and each policy shall provide that no cancellation thereof
may be made by the insurance carrier without having first given ten days notice
in writing thereof to Owner, Manager and the holder of any indebtedness secured
by the Property.
(l) Any funds required to be paid by Manager for Governmental
Impositions or for insurance under which any holder of any indebtedness secured
by the Project shall require Owner to pay the same amount over to Manager upon
notice of such payment by Manager of Owner's obligation.
(m) Manager shall in its discretion and at Owner's expense engage
counsel acceptable to Owner to advise on legal matters and conduct legal
proceedings arising in the performance of Manager's duties hereunder.
(n) Manager shall maintain complete and accurate records of all
transactions relating to the Property, including disbursements, receipts and all
correspondence and data relating to the supervision, management and operation of
the Property, and shall make such records available for inspection and copying
by owner or its representatives at reasonable times. Such books and records
shall be separate from those recording Manager's own accounts and those of any
other principal. Owner, at its expense may cause such books, records and data to
be audited by a firm of independent certified public accountants which it shall
designate. Manager shall comply with such instructions as may be given to it by
Owner concerning the specific form or content of such records.
(o) If specifically instructed to do so, Manager shall pay at Owner's
expense, all sums that become due as they become due on indebtedness secured by
the Property.
(p) Manager shall render to Owner, within fifteen (I 5) days after the
end of each month, a monthly statement of receipts and disbursements during the
preceding month with respect to the Property, showing the revenues and expenses
of the Property. Along with each monthly statement Manager shall remit to Owner
a statement of "net income" of the Property for the preceding month. For the
purposes of this Agreement, "net income" shall mean all rent monies collected
for the month minus all expenses incurred and payments made by Manager on behalf
of Owner under this Agreement and minus any compensation due Manager which
Manager is entitled to deduct from "net income" under Compensation. In any month
in which the expenses incurred by Manager on behalf of Owner exceed the net
income of the Property, the amount of the expenses in excess of the net income
54
shall be billed to Owner and paid by Owner within fifteen (15) days after
receipt of such xxxx. Manager shall also render to Owner, within thirty (30)
days after the end of the calendar year, an annual report which shall include a
statement of receipts and disbursements during the preceding calendar year with
respect to the Property and a brief report of Manager's activities in regard to
the Property during the preceding calendar year.
(q) Manager shall perform such additional administrative and managerial
duties in connection with the Property as Owner may request in writing from time
to time.
COMPENSATION
As compensation for its services Manager shall be entitled to a
professional management fee which shall be the sum of Ten Thousand ($ 1 0,000)
dollars per month and 5 % of the effective monthly net income, if any, in excess
of Five Thousand ($5,000) dollars, payable monthly. Manager may deduct these
fees from any amounts due Owner hereunder.
INDEMNITY
Manager shall indemnify, defend and save harmless Owner from any and
all liabilities, damages, penalties, costs, expenses, claims, suits or actions
due to or arising out of any breach, violation or nonperformance of any
obligation of Manager hereunder. Manager shall indemnify and hold harmless Owner
from contract of other liability, claims or damages, or act committed by Manager
beyond the scope of this Agreement to the extent that such liability is not
covered by insurance.
TERM
This Agreement shall commences on the date of its execution and
continue in full force and effect for a period of one (1) year after the date of
its execution. After such initial term, this Agreement shall automatically
continue until canceled by Owner or Manager upon thirty (30) days prior written
notice given to the other Party. Upon termination of this Agreement, Manager
shall be entitled to any compensation specified herein which has accrued and
become payable but has not been paid to manager hereunder as of the date of such
termination.
PERFORMANCE OF MANAGER'S OBLIGATION BY OWNER
Owner may make any payment or perform or cause to be performed or all
obligation of Manager under this Agreement which Manager may neglect or refuse
to perform. All costs in excess of amounts normally paid on behalf of Owner
incurred by Owner in connection therewith shall be paid to Owner by Manager. The
provisions contained in this section shall not limit Manager's obligations under
this Agreement and the right and authority hereby reserved does not impose upon
Owner any responsibility for the care, repair or supervision of the Property or
any building, personal property, equipment, fixture or appurtenance. Owner shall
h
55
ave the right without terminating this Agreement to xxx for and recover all
sums payable hereunder.
DAMAGE OR DESTRUCTION
In the event of damage to or destruction of the Property or any part
thereof, Owner may at its election proceed to repair or rebuild. If Owner elects
to repair or rebuild the Property, the Agreement shall not be terminated or
affected in any manner by reason of the destruction or damage in whole or in
part of the Property or any such building or improvement located thereon, or by
reason of the untenantability of the Property or any such building or
improvements, and the payments to Owner under this Agreement as well as all
other charges payable hereunder shall be paid by Manager in accordance with the
terms, covenants and conditions of this Agreement without abatement, diminution
or reduction, provided the funds therefore are available from the Property or
otherwise provided to Manager by Owner. If Owner within sixty (60) days after
such damage or destruction elects not to repair or rebuild the Property, this
Agreement shall terminate as of the date of such damage or destruction. If under
the terms of any mortgage, deed of trust or other such instrument covering the
Property, the holder of the indebtedness secured thereby has the right to apply
any insurance proceeds to the reduction of such indebtedness or to the
restoration of the Property, and the holder of such indebtedness has not made
such decision within sixty (60) days after such damage or destruction, the
period of time under this section in which Owner shall decide whether to repair
or rebuild shall be extended until ten (1O) days after the holder of such
indebtedness shall have made its decision.
SCOPE OF MANAGER'S AUTHORITY
The scope of Manager's authority to bind Owner shall be determined by
provisions of this Agreement and any amendments hereto. Manager may not bind
Owner to make any expenditure or bind Owner to any contract calling for any
expenditure except pursuant to the terms of this Agreement.
AMENDMENTS
This Agreement may be amended only by the mutual consent in writing of
the Parties.
NOTICE
All notices, requests, consents, approval, written instructions,
reports or other communication by Owner and Manager under this Agreement shall
be in writing and shall be deemed to have been given or served if delivered or
if mailed by certified mail, postage prepaid, addressed as follows:
To Owner: Golden Opportunity Development Corp.
000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000-0000
(000) 000-0000
56
To Manager: Diversified Holdings 1, Inc.
000 Xxxx 000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
801) 575-8073
Either party may change the address to which notice, requests, consents,
approvals, written instruction, reports or other communications are to be given
by a notice of change of address given in the manner set forth in this section.
NONASSIGNABILITY
Owner has entered into this Agreement in reliance upon the experience,
ability and financial worth of Manager and Manager shall not assign or transfer
any interest in this Agreement without the prior written consent of Owner.
APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the laws of
the state of Utah
EXECUTED as of the date first set forth above.
GOLDEN OPPORTUNITY DEVELOPMENT CORP. - "OWNER"
BY: /s/ XxxxxxXxxx X Xxxxxxxx TITLE: Sec
--------------------------
DIVERSIFIED HOLDINGS I, INC. - "MANAGER"
BY: /s/ Xxxxxxx Xxxxxx TITLE: President
---------------------------
57
