Exhibit 10.1
Management Agreement between CNL Income Fund, Ltd. and
CNL Investment Company
PROPERTY MANAGEMENT AGREEMENT
This Property Management Agreement (the "Agreement") is made and
entered into as of this ________ day of __________ 1986, by and between CNL
Income Fund, Ltd., a Florida limited partnership (the "Partnership"), and
Centennial Investment Company, a Florida corporation ("CIC").
WHEREAS, the Partnership intends to acquire, or enter into joint
ventures or partnerships which will acquire, certain real properties upon which
fast-food restaurants are to be located;
WHEREAS, the Partnership further intends to lease such properties, and
the buildings located thereon, on a "triple net" basis to operators or
franchisees of certain national or regional fast-food restaurants; and
WHEREAS, the Partnership desires to have CIC perform the property
management services specified in this Agreement with respect to such properties,
and CIC desires to perform such services.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Partnership and CIC agree as
follows.
1. Definitions. Whenever used in this Agreement, the following terms shall have
the following specified meanings. Unless the context otherwise clearly
indicates, all other terms used in this Agreement and having initial capital
letters shall have the same meanings as set forth in the Amended and Restated
Agreement and Certificate of Limited Partnership of CNL Income Fund, Ltd., a
form of which is attached hereto as Exhibit A.
1.1 "Expenses" shall mean the actual cost of any and all goods and
materials, other than overhead items, acquired by CIC from persons or entities
not affiliated with CIC or the general partners of the Partnership, which are
reasonably necessary for the performance of any of its obligations under this
Agreement.
1.2 "Joint Venture" shall mean any joint venture or partnership in
which the Partnership is a co-venturer or partner.
1.3 "Landlord" shall mean any person or entity designated as the
landlord or lessor under any Lease.
1.4. "Lease" shall mean any lease entered into by the Partnership or a
Joint Venture with a Tenant for the lease of any Property.
1.5 "Property" shall mean any real property owned by the Partnership or
a Joint Venture and described in Exhibit B, as such exhibit may be amended from
time to time by agreement of the parties, including any buildings located on
such real property and any equipment located therein or thereon to the extent
such equipment is owned by the Partnership or a Joint Venture.
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1.6 "Tenant" shall mean (i) any person or entity designated as a tenant
or lessee under a Lease, or (ii) any assignee or subtenant of a Tenant pursuant
to a valid assignment or subletting under a Lease. 2. Services. CIC shall
perform the following property management services for the Partnership with
respect to the Properties:
(a) assisting the Partnership and any Joint Venture in negotiating
Leases;
(b) visiting and inspecting each Property'upon request of the
Partnership and at such other time or times as CIC determines is
necessary or appropriate for the proper management of each such Property;
(c) with respect to Properties wholly owned by the Partnership,
collecting all rents payable under each Lease, depositing the rents so collected
in accounts designated by the Partnership, and rendering quarterly statements to
the Partnership of the rents so collected;
(d) at the request of the Partnership, inspecting the books, records or
financial statements of a Tenant to the extent permitted under the terms of the
applicable Lease, for the purpose of determining whether such Tenant has paid or
is paying the full amount of rent required to be paid under such Lease;
(e) notifying the Partnership of any material default by a Tenant under
a Lease; (f) except as otherwise directed by the Partnership, enforcing
any and all rights of
each Landlord under the applicable Lease, at such times and in such manner and
to such extent other than through the initiation of legal proceedings against a
Tenant, as CIC reasonably determines to be appropriate under the circumstances;
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(g) providing reasonable assistance to the Partnership in connection
with any legal action brought by a Landlord against a Tenant for default under a
Lease;
(h) notifying the Partnership of any request, submission, notice or
other communication from a Tenant (other than rental payments), and advising the
Partnership with respect to the appropriate response; and
(i) furnishing to the Partnership, within a reasonable time after its
request, such information with respect to any Property as the Partnership may
from time to time reasonably request.
3. Compensation.
3.1 Propertv Management Fee. Within sixty (60) days following the close
of each fiscal year of the Partnership in which the Limited Partners of the
Partnership have received or will receive an amount equal to their aggregate,
noncumulative 10% Preferred Return payable from Net Cash Flow, the Partnership
shall, to the extent of available Net Cash Flow, pay to CIC, an annual property
management fee equal to 1/2 of 1% of the Partnership assets (valued at cost)
under management pursuant to this Agreement; provided, however, that such fee-,
together with fees paid by the Partnership to persons or entities unaffiliated
with the general partners of the Partnership for property management services,
shall not exceed an amount equal to the lesser of (i) fees which are competitive
for similar services in the same geographic area, or (ii) 1% of the gross
revenues derived from Properties wholly owned by the Partnership plus, in the
case of Properties owned by any Joint Venture, the Partnership's
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allocable share, under the agreement governing the Joint Venture, of gross
operating revenues from any such Properties. CIC shall not receive a property
management fee under this paragraph 3.1 in any fiscal year of the Partnership in
which the Limited Partners do not receive an amount equal to their aggregate,
noncumulative 10% Preferred Return payable from Net Cash Flow. The property
management fee payable to CIC during the first and last years of this Agreement
shall be prorated based on the number of days during the Partnership's fiscal
year for which this Agreement is in effect.
3.2 Expenses. The Partnership shall within 30 days after receipt of a
request by CIC for reimbursement of Expenses, reimburse CIC for all such
Expenses. All such requests shall state in detail the nature of all Expenses for
which reimbursement is sought and shall be supported by appropriate
documentation. 4. Term of Agreement.
4.1 Commencement and Expiration. This Agreement shall commence as of
the date of this Agreement and, unless sooner terminated pursuant to Paragraph
4.2 hereof, or by operation of law, or otherwise, shall expire at such time as
the Partnership no longer has an ownership interest in any Property.
4.2 Termination. Either party may terminate this Agreement, without
penalty, by giving sixty (60) days' prior written notice to the other party.
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4.3 Obligations Surviving Expiration or Termination.
(a) In addition to any other obligations of the Partnership
which survive the expiration or termination of this Agreement, the Partnership
shall upon the expiration or termination of this Agreement (i) promptly
reimburse CIC for all Expenses for which CIC seeks reimbursement, and (ii) pay
to CIC the property management fee payable under Paragraph 3.1 as soon after
expiration or termination of this Agreement as is consistent with payment to the
Limited Partners of the Partnership an amount equal to their aggregate,
noncumulative 10% Preferred Return payable from Net Cash Flow.
(b) In addition to any other obligations of CIC which survive
the expiration or termination of this Agreement, CIC shall upon the expiration
or termination of this Agreement (i) promptly cause all funds received from
Tenants as payments under a Lease to be deposited in the appropriate accounts
designat'ed by the Partnership, and (ii) promptly deliver to the Partnership all
records and documents in its possession relating to the Properties. CIC-shall
use its best efforts to cooperate with the Partnership to accomplish an orderly
transfer of the management of the Properties to a party or parties designated by
the Partnership. 5. Indemnification.
5.1 By the Partnership. The Partnership releases and shall defend,
indemnify and hold harmless CIC from all claims, losses, harm, costs,
liabilities, damages and expenses (including, but not limited to, attorneys'
fees) arising, whether before or after the expiration
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or termination of this Agreement, out of or in connection with (a) CIC's
management of any Property, or (b) any accident or injury (including death) to
any person or damage to any property or environment occurring in or about any
Property or in connection with the possession, use, or occupancy of any
Property; provided, however, that the Partnership shall have no obligation under
this Paragraph 5.1 to release, defend, indemnify or hold harmless CIC from any
such claim, loss, harm, cost, liability, damage or expense, if the same arises
out of (i) an act by CIC which is not taken in good faith or in a manner
reasonably believed to be in the best interests of the Partnership, or (ii)
conduct by CIC constituting negligence, willful misconduct or breach of any of
its obligations under this Agreement.
5.2 Indemnification by CIC. CIC releases and shall defend, indemnify
and hold harmless the Partnership from all claims, losses, harm, costs,
liabilities, damages and expenses (including, but not limited to, attorneys'
fees) arising, whether before or after the expiration or termination of this
Agreement, solely out of conduct by CIC constituting negligence, willful
misconduct or breach of any of its obligations under this Agreement.
6. Miscellaneous.
6.1 Survival. Paragraphs 4.3 and 5 and all provisions of this Agreement
which may reasonably be interpreted or construed as surviving the expiration or
termination of this Agreement shall survive the expiration or termination of
this Agreement for a period of ten years.
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6.2 Independent Contractor. The parties hereby recognize that CIC is
serving as an independent contractor under this Agreement. Nothing contained in
this Agreement shall be interpreted or construed to create a partnership
relationship between CIC and the Partnership.
6.3 Notices. Any notice, approval, request, authorization, consent,
direction or other communication required or permitted under this Agreement
shall be given in writing and shall be deemed to be delivered when delivered in
person or deposited in the United States mail, properly addressed and stamped
with the required postage, registered or certified mail, return receipt
requested, to the intended recipient as follows:
If to the Partnership: CNL Income Fund, Ltd.
000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx.
If to CIC: Centennial Investment Company
000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Either party may change its address specified above by giving the other party
notice of such change in accordance with this Paragraph 6.3.
6.4 No Third Party Beneficiaries. Notwithstanding anything to the
contrary in this Agreement, the parties do not intend any person or entity not a
party to this Agreement to be a beneficiary of any provision of this Agreement,
and no pro'vision of this Agreement shall be interpreted or construed as being
for the benefit of any third party. Further, no third party shall by virtue of
any provision of this Agreement have a right of action or an enforceable legal
remedy against either party to this Agreement.
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6.5 Nonwaiver. The failure of either party to insist upon or enforce
strict performance by the other party of any provision of this Agreement or to
exercise any right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such party's right to assert or rely upon any
such provision or right in that or any other instance; rather, such provision or
right shall be and remain in full force and effect.
6.6 Successors and Assigns. Neither party shall assign (voluntarily, by
operation of law or otherwise) this Agreement or any right, interest or benefit
under this Agreement without the prior written consent of the other party.
Subject to the foregoing, this Agreement shall be fully binding upon, inure to
the benefit of, and be enforceable by, the parties hereto and their respective
successors and assigns.
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EXHIBIT B
(Provide name and address of each property under
management.)
(List of Properties Omitted)
6.7 Entire Agreement. This Agreement sets forth the entire agreement of
the parties with regard to the subject matter hereof, and supersedes any and all
prior agreements of the parties with respect thereto.
6.8 Amendment. No change, amendment or-modification of any provision of
this Agreement shall be valid unless set forth in a written instrument signed by
the party to be bound thereby.
6.9 Applicable Law. This Agreement shall be interpreted, construed and
enforced in all respects in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first-above written.
The Partnership: CNL Income Fund, Ltd.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------
Xxxxx X. Xxxxxx, Xx.
General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx
General Partner
CIC: Centennial Investment Company
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Title: President
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