Exhibit 10.20
PROPERTY MANAGEMENT AGREEMENT
This PROPERTY MANAGEMENT AGREEMENT (this "AGREEMENT") is made and entered
into as of the first day of September 2003, by and between Infinity Equities,
LLC, a California limited liability company, hereinafter referred to as "OWNER,"
and Standard Parking Corporation, a Delaware corporation, hereinafter referred
to as "OPERATOR."
W I T N E S S E T H:
THAT, WHEREAS, Owner presently owns or controls a residential apartment
complex (described herein below) of approximately 156 units and has the
authority to contract for the management of said apartment complex; and
WHEREAS, Owner and Operator desire to enter into an agreement whereby
Operator will manage the apartment complex upon the terms, covenants and
conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. APPOINTMENT. Owner hereby appoints and retains Operator, and Operator
hereby accepts such appointment and retention, as the exclusive operator and
manager of the residential apartment complex known as the Elmwood Villas and
located at 000 Xxxxx 00xx Xxxxxx in Las Vegas, Nevada, hereinafter referred to
as the "PREMISES."
2. TERM. The term of this Agreement shall be for month to month
commencing on September 1, 2003 (the "COMMENCEMENT DATE") and continuing (a)
until terminated by either party, without cause or penalty, upon not less than
thirty (30) days prior written notice, with the effective date of termination to
be on the last day of the first calendar month following the month in which said
notice is received, or (b) until terminated under any other provision hereof.
3. OPERATOR'S OBLIGATIONS AND SERVICES; OPERATING EXPENSES.
Operator hereby covenants and agrees that it will:
(a) Manage the operation of the Premises and render the usual and
customary services incidental thereto, in a professional,
businesslike and efficient manner, with discretion as to the
specifics thereof as the Operator deems advisable, subject only
to the limitations contained in this Agreement, and provide
supervision and inspection adequate to properly manage the
Premises. Owner reserves the right to establish all rental
rates to be charged
tenants of the Premises ("Tenants") and to determine the form
of leases to be entered into with said Tenants ("Tenant
Leases").
(b) Advertise the availability of units, display "for lease" signs,
cancel existing Tenant Leases and negotiate Tenant Leases with
existing and prospective tenants, all upon term and conditions
outlined by Owner. All Tenant Leases shall be on Owner's
standard lease form or on a lease form approved by Owner.
Tenant Leases may be signed by Operator provided Owner's form
of Tenant Lease and Owner's rent schedule are used.
(c) Xxxx and take all reasonably necessary action to collect all
rents and other amounts due Owner under the Tenant Leases in
accordance with the terms of the Tenant Leases.
(d) Hire, pay, provide customary benefits for and supervise
sufficient experienced and qualified personnel who will render
the services required by this Agreement for the professional,
businesslike and efficient operation of the Premises. Such
employees will be neatly uniformed and courteous to the public.
All persons so employed shall be employees of Operator and not
of Owner, and shall have no authority to act as the agent of
Owner.
(e) Undertake periodic physical inspections of the Premises.
(f) Handle and promptly respond to all Tenant requests and
negotiations.
(g) Perform repairs and maintenance of a custodial nature and
arrange and supervise routine improvements, alterations and
repairs as may be required by Owner and good management
standards.
(h) With Owner's prior written approval as to any contracts over
$500.00, bid, negotiate and enter into, and supervise, all
repair, maintenance service, material and utility contracts on
behalf of Owner and the Premises.
(i) Promptly notify Owner of any matter that in Operator's
reasonable judgment requires Owner's attention.
(j) Advise and cooperate with Owner in the development and
implementation of rules and regulations applicable to the
Premises, and enforce such applicable rules and regulations as
Owner shall adopt.
(k) Obtain and maintain the policies of insurance specified in
Section 7(a) hereof.
(l) Prepare and file all necessary returns, reports and forms
required by law in connection with unemployment insurance,
social security taxes, worker's
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compensation insurance, disability benefits, Federal and state
income tax withholding and other similar taxes and all other
returns and reports required by any Federal, state or municipal
authority (other than income and property tax returns of the
Owner) and pay or make all deposits required for such taxes.
(m) Annually during the term, Operator shall prepare and deliver to
Owner a budget, for Owner's reasonable approval, reflecting the
Gross Receipts and Operating Expenses (defined below) which
Operator expects to receive and incur, respectively, during
Owner's forthcoming fiscal year (the "BUDGET"), it being agreed
that if Owner for any reason does not respond to any proposed
Budget within thirty (30) days after Owner's receipt thereof,
said Budget shall be deemed approved. If at any time during the
period covered by an approved Budget it appears to Operator
that the actual total of all Operating Expenses likely to be
incurred during said period will exceed the Budget's projected
total by more than ten percent (10%), Operator shall promptly
so advise Owner, and Owner and Operator shall jointly discuss
what actions, if any, could be taken to minimize the Operating
Expenses without substantially impairing operations hereunder.
The Owner shall pay Operator for expenses incurred by Operator in the
performance of its duties, obligations and services pursuant to this Agreement
(collectively, "OPERATING EXPENSES"). Operating Expenses shall include, without
limitation, all cost, charges and administrative expenses for: salaries and
wages and associated payroll burden (including, without limitation, payroll
taxes and fringe benefits); license and permit fees; uniforms, supplies, tools
and cleaning; maintenance and repair to be performed by Operator; telephone and
pagers; utility charges (except to the extent paid directly by Owner);
bookkeeping and administrative services; health insurance and workers'
compensation. Owner shall procure the property insurance specified in Section 11
herein, but the cost shall be deemed an Operating Expense. In addition, certain
Owner's costs as designated in Section 9 herein below may be deemed Operating
Expenses at Owner's option. Such Operating Expenses shall be paid from the
Premises Account (defined in Section 4 below).
Operating Expenses shall not include (i) the costs of maintenance and
repair required of Owner hereunder, or (ii) Owner's various costs associated
with its ownership and/or occupancy of the Premises, including without
limitation depreciation, real estate taxes and assessments, taxes on Owner's
personal property, debt retirement (including without limitation mortgage
interest), rent and such costs and expenses as may be necessitated to comply
with the Americans with Disabilities Act of 1990). Payment of such expenses and
costs are the sole obligation of Owner.
"REIMBURSABLE COSTS" are any expenses which are not deemed Operating
Expenses and are approved by Owner prior to expenditure.
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If Owner disputes any Operating Expense or Reimbursable Cost, Owner
shall give Operator written notice specifying the item disputed and the reason
therefor. Payment for any Operating Expense or Reimbursable Cost which is not
disputed shall not be withheld. The parties shall, in good faith, diligently
pursue resolution of any disputed item within thirty (30) days of said notice.
4. GROSS RECEIPTS; NET PROFIT. All Gross Receipts collected by Operator
shall be deposited in an account in the State of Nevada (the "Premises Account")
established at a federally insured bank or trust company, and Operator shall be
under no liability or responsibility for any loss resulting from the insolvency
of any such depository.
"GROSS RECEIPTS" shall mean (a) all cash collected by Operator from Tenants
for amounts due under the Tenant Leases, whether rent, reimbursable charges, or
other amounts, provided all said amounts are amounts that are under the Tenant
Leases and (b) all cash collected from all other operations whatsoever at the
Premises including, without limitation, and as applicable, laundry and vending
machines and billboard and other advertising.
"NET PROFIT" is the balance remaining after deducting all Operating
Expenses and Reimbursable Costs from Gross Receipts. All Net Profit [less
deductions for Operator's Management Fee and the amount necessary to maintain
the Working Capital Level (defined in Section 6 herein below) in the Premises
Account] shall be paid to Owner concurrently with the delivery of the monthly
statement required in Section 8 of this Agreement.
5. MANAGEMENT FEE. As compensation for Operator's services hereunder,
Owner shall pay Operator a management fee of $1,500.00 per month (the
"MANAGEMENT FEE"), which fee may be deducted by Operator from the Premises
Account. Provided this Agreement is still in effect, on August 1, 2004, and on
each August 1 thereafter during the term of this Agreement, the Management Fee
shall be increased annually by the greater of (a) two percent (2%) or (b) the
annual percentage increase in the U.S. Consumer Price Index for Urban Consumers
- Las Vegas area ("CPI") (1982-84 = 100).
6. WORKING CAPITAL LEVEL. Operator is hereby authorized to and shall
disburse amounts in the Premises Account to pay Operating Expenses, Reimbursable
Costs and Operator's Management Fee. Owner agrees that the balance in the
Premises Account (the Account Balance") shall at all times be maintained at no
less than an amount (the "Working Capital Level") sufficient to pay for all
Operating Expenses reasonably projected and/or anticipated by Operator to be
required in connection with operations hereunder of and the performance of
Operator's duties hereunder for the immediately succeeding eight (8) week
period. If the Account Balance should at any given time be less than the Working
Capital Level, Owner shall deposit into the Premises Account the amount of the
deficiency within five (5) days after receiving written notice thereof from
Operator. If Owner fails to deposit the deficiency within said five (5) day
period, Owner agrees to reimburse Operator for any and all Operating
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expenses and Reimbursable Costs paid by Operator from its own funds (it being
expressly agreed and understood, however, that Operator shall not be under any
obligation to do so) together with interest thereon at the highest legal rate
permitted by law on the unpaid balance from the date such payment became due and
payable. In addition, at its option, Operator may terminate this Agreement upon
written notice without waiving or limiting any of its legal remedies (including
the right to recover attorneys fees and any other expenses incurred) which
Operator may pursue to collect the amount owed.
7. OPERATOR'S INSURANCE COVERAGES.
(a) Operator shall carry and maintain, as an Operating Expense, the
following insurance coverages:
(1) Worker's Compensation insurance in compliance with the
Worker's Compensation Act of the State of Nevada.
(2) Employer's liability insurance on all employees for the
Premises not covered by the Worker's Compensation Act,
for occupational accidents or disease, for limits of not
less than $1,000,000 for any one occurrence.
(b) Owner shall carry and maintain, at its expense, the following
insurance coverages:
(1) Commercial general liability insurance on an occurrence
form basis with limits of not less than $2,000,000 per
occurrence with an annual aggregate limit of $2,000,000
per location.
(2) Automobile liability insurance (if applicable) covering
losses for owned, non-owned or hired vehicles including
comprehensive and collision coverage with a limit of not
less than $2,000,000 per occurrence.
(3) Comprehensive crime insurance including employee theft,
premise, transmit and depositor's forgery coverage with
limits as to any given occurrence of $1,000,000.
(4) Umbrella liability insurance with an annual aggregate
limit of not less than $20,000,000.
(c) The liability policies affording the coverages described in
Subsection (b) above shall be primary and non-contributory to
any insurance carried by Operator and endorsed (1) to cover
Operator and its employees, agents, directors and officers as
additional insureds and (2) to cover liability
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arising out of the acts or omission of said additional
insureds, but only in connection with the additional insureds'
occupying, managing and/or operating the Premises.
(d) As evidence of the insurance required pursuant to Subsection
(b) above, Owner shall deliver certificates of insurance to
Operator. Renewal policies shall be timely obtained so that
there shall never be a lapse in coverage, and Owner shall
endeavor to provide Operator with certificates of renewal
policies at least thirty (30) days prior to expiration. The
certificates of insurance shall state that the issuing company
shall mail thirty (30) days' prior written notice to the
certificate holder should any of the policies be cancelled
prior to the expiration date.
8. MONTHLY REPORTING. Within ten (10) days after the end of each calendar
month, Operator shall mail to Owner a statement showing all Gross Receipts,
Operating Expenses, Reimbursable Costs, the Management Fee and Net Profit for
the preceding calendar month. The report of Gross Receipts shall include a
schedule summarizing the status of rent payments for each Tenant Lease. Within
ninety (90) days following the last month of the term of this Agreement,
Operator shall mail a like final statement.
Operator shall keep complete and accurate reports and records
(collectively the "RECORDS") of all Gross Receipts, Operating Expenses,
Reimbursable Costs and Net Profit relating to the Premises. Such Records shall
be kept in accordance with good accounting practices. Operator shall permit
Owner to inspect Operator's Records at Operator's offices during reasonable
business hours and at Owner's expense.
9. OWNER'S OBLIGATIONS. Owner shall, at its expense, be responsible for
performance of the following:
(a) Maintaining the Working Capital Level in the Premises Account
and maintaining the insurance required of Owner by this
Agreement.
(b) Except for Operator's obligations pursuant to Section 3 above,
repair and maintenance of the Premises, systems and
improvements in good condition and repair, including (as
applicable): heating, air conditioning, ventilating, exhaust,
fire protection, alarm, utility, plumbing (including lavatory
facilities), sewage, drainage, security and lighting systems;
paving; painting; striping; directional signs, fencing;
landscaping; windows and doors; plate glass; driveways,
sidewalks and curbs (including curb cuts); elevators; sealing
and waterproofing; electrical or mechanical equipment,
including traffic control devices used at or in the Premises;
and all structural repairs. Notwithstanding any contrary
provision in this Agreement Owner's costs
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under this subsection, at Owner's election, may be paid from
the Premises Account.
(c) Providing Operator with full and complete copies of all Tenant
Leases, as same may be modified or renewed from time to time,
and all other documents or records necessary or desirable to
properly manage the Premises, including but not limited to all
correspondence regarding Tenant Leases, reports of the status
of rent payments, and copies of existing service contracts.
(d) Alterations, improvements and additions that Owner deems
necessary and/or as may be required by the Americans With
Disabilities Act of 1990, and payment of architectural,
engineering or consulting fees with respect thereto.
Notwithstanding any contrary provision in this Agreement,
Owner's costs under this subsection, at Owner's election, may
be paid from the Premises Account.
(e) Safety and/or security personnel and equipment. Notwithstanding
any contrary provision in this Agreement, Owner's costs under
this subsection, at Owner's election, may be paid from the
Premises Account.
With respect to Subsection (e) above, Owner expressly acknowledges
that Operator does not have knowledge or expertise as a guard or security
service, and does not employ personnel for that purpose, nor do Operator's
employees undertake the obligation to guard or protect customers against the
intentional acts of third parties. Owner shall determine, at Owner's discretion,
whether and to what extent any precautionary warnings, security devices, or
security services may be required to protect patrons in and about the Premises.
Owner further agrees to indemnify and to hold harmless Operator from and against
any claims, demand, suits, liabilities, or judgments arising from Operator's
alleged failure to warn, to guard, or to protect persons in or about the
Premises from and against intentional threats, harm, or injury, except for the
negligent or intentionally committed acts of or by Operator or Operator's
employees.
Owner agrees that any contract between Owner and a third party
contractor for work on behalf of Owner at the Premises shall require (i) the
third party contractor to indemnify, save and hold Owner and Operator harmless
from and against and free and clear of all claims, suits, actions, and damages
which may arise, occur or result from work performed by said third party
contractor, and (ii) to require the third party contractor to name Owner and
Operator as additional insureds on the third party contractor's policy of
insurance and furnish Owner and Operator with a certificate of insurance
evidencing such coverages.
10. INDEMNIFICATION. Except to the extent covered by the insurance
required of Owner pursuant to Section 7(b) above, Operator shall indemnify and
hold harmless Owner from any and all loss and liability on account of any damage
or injury and from all losses, claims and demands caused by the negligence of
the Operator. Owner shall indemnify and hold harmless
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Operator from all loss or liability on account of any damage or injury, claims
and demands arising out of any failure by Owner to provide the insurance
required pursuant to Section 7(b) above, or the acts or omissions of the Owner,
its agents or employees, or by reason of the physical or structural condition of
the Premises, or equipment contained therein, or by failure to keep said
Premises or equipment in good order and repair, or by fire, gas, water,
electricity failure or malfunction, or by the breaking overflowing or leaking of
roofs, pipes, or walls of said Premises, or for such other damage or injury
caused by any acts or events whatsoever.
11. OWNERS INSURANCE. Owner shall, at its expense, provide and maintain
fire and extended coverage, vandalism and malicious mischief, and all-risk
insurance coverages for buildings, improvements and any other real or personal
property of Owner located on the Premises in an amount equal to the full
replacement cost thereof.
12. RELEASE AND WAIVER OF SUBROGATION. In the event all or any part of the
Premises (including any buildings, improvements or other real or personal
property thereon) are damaged or destroyed by fire or other casualty, the rights
or claims of either party or its employees, agents, successors or assigns,
against the other with respect to liability for such loss, destruction or damage
resulting therefrom, including loss, destruction or damage suffered as a result
of negligence of either party or their employees or agents, are hereby released
and discharged, and any and all subrogation rights or claims are hereby waived
to the extent of the actual insurance coverage carried by the parties or which
is commonly covered under an all-risk insurance policy, in either case
irrespective of applicable deductibles.
All such insurance policies shall contain a clause or endorsement providing
that the insurance shall not be prejudiced if the insured has waived its rights
of recovery (including subrogation rights) against any person or company prior
to the date of loss, destruction or damage.
13. LICENSES AND PERMITS. Operator shall obtain and maintain all licenses
and permits required by an operator of apartment complexes by any governmental
body or agency having jurisdiction over Operator's operations at the Premises
and will aide by the terms of such licenses and permits. Any license or permit
fees incurred by Operator shall be deemed an Operating Expense.
14. LAWS AND ORDINANCES. Operator shall not use all or any part of the
Premises for any use or purpose which is (i) forbidden by or in violation of any
law of the United States, any state law or any city ordinance, or (ii) may be
dangerous to life, limb or property.
15. LOSS OR DAMAGE TO PREMISES. In case of any substantial loss of or
damage to the Premises as the result of a taking under the power of eminent
domain, or by fire, storm or other casualty, Owner may (i) repair or restore the
Premises at Owner's expense, or (ii)
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abandon the operation and terminate this Agreement by giving at least ten
(10) day's prior written notice to Operator. If Owner so terminates, Owner
shall not be liable to Operator for Management Fees arising after the date of
taking or casualty; provided, however, if any portion of the Premises remains
suitable for rental housing and Operator, with Owner's prior written
approval, continues its operations, Operator shall be entitled to receive its
Management Fees for the period during which such operations are continued. If
Owner repairs and restores the Premises, no Management Fees shall be due for
the period the Premises are unsuitable for rental housing, and Operator shall
not be required to provide services hereunder, but this Agreement shall
continue in effect and the term shall be extended for a period equal to the
period needed for repair and restoration.
16. RELATIONSHIP OF THE PARTIES. No partnership or joint venture between
the parties is created by this Agreement, it being agreed that Operator is an
independent contractor.
17. FORCE MAJEURE. Neither party shall be in violation of this Agreement
for failure to perform any of its obligations by reason of strikes, boycotts,
labor disputes, embargoes, shortages of materials, acts of God, acts of the
public enemy, acts of public authority, weather conditions, riots, rebellion,
accidents, sabotage or any other circumstances for which it is not responsible
and which are not within its control. No Management Fee shall be due to Operator
if it suspends operations for any such cause or event.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
19. APPROVALS. Whenever the approval of either party is required herein,
such approval shall not be unreasonably withheld or delayed.
20. WAIVERS. No waiver of default by either party of any term, covenant or
condition hereof to be performed or observed by the other party shall be
construed as, or operate as, a waiver of any subsequent default of the same or
any other term, covenant or condition hereof.
21. SEVERABILITY. If any provision hereof is held to be invalid by a court
of competent jurisdiction, such invalidity shall not affect any other provision
hereof, provided such invalidity does not materially prejudice either party in
its rights and obligations contained in the valid provisions of this Agreement.
22. TERMINATION. In addition to all other termination rights hereunder,
either party may terminate this Agreement upon the breach by the other party of
any covenant, term or condition hereof, provided the breaching party first
receives written notice of such breach and fails
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to remedy same, within ten (10) days if a monetary breach or within twenty (20)
days if a non-monetary breach, after receipt of written notice thereof, or if
the breaching party fails to commence remedying such non-monetary breach within
said 20-day period if such breach cannot be reasonably remedied within twenty
(20) days. Either party may terminate this Agreement in the event the other
party files a voluntary petition or similar pleading for bankruptcy, insolvency,
receivership or makes an assignment for the benefit of creditors, with such
termination to be effective upon giving notice thereof.
23. SALE OF PREMISES. Subject and subordinate to all termination rights
hereunder, in the event of a sale of the Premises, in whole or in part, this
Agreement and Operator's rights hereunder shall not be disturbed so long as
Operator keeps and performs its agreements contained herein.
24. ASSIGNMENT. Operator shall not assign or transfer this Agreement or
its right, title or interest herein without the prior written consent of Owner,
which consent shall not be unreasonably withheld. Operator is hereby given the
right to assign this Agreement to an affiliate of Operator or to a corporation
substantially all of the stock of which is owned by Operator and/or collaterally
assign its right, title and interest herein to a financial institution as
security for any present or future loans to Operator.
25. NOTICES. Any notice or communication required to be given to or served
upon either party hereto shall be given or served by personal service or by
express delivery or by mailing the same, postage prepaid, by United States
registered or certified mail, return receipt request, to the following
addresses:
TO OWNER: INFINITY EQUITIES, LLC
Attn: Xxxx Xxxxx, Managing Member
000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
TO OPERATOR: STANDARD PARKING CORPORATION
Attn: Legal Department
Suite 1600
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
With copy (by regular mail) to: Standard Parking Corporation
Attn: Xx Xxxxxxx, Executive Vice President
000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
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Either party may designate a substitute address at any time hereafter
by written notice thereof to the other party.
26. ENTIRE AGREEMENT. This Agreement, together with all exhibits hereto,
constitutes the entire agreement between the parties, and supercedes all
representations, statements or prior agreements and understandings both written
and oral with respect to the matters contained in this Agreement and exhibits
hereto. No person has been authorized to give any information or make any
representation not contained in this Agreement. This Agreement may be amended
only by written agreement of the parties.
27. PARTIES BOUND. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their heirs, successors, executors,
administrators, legal representatives and permitted assigns.
28. NEITHER PARTY DEEMED DRAFTER. The parties to this Agreement have had
sufficient time to consult legal counsel and negotiate changes regarding the
terms hereof. Therefore, neither party shall be deemed the drafter of this
Agreement and, as such, this Agreement shall not be construed against either
party due to the drafting hereof.
29. ATTORNEY FEES. In the event that either party hereto should (i) retain
legal counsel and/or institute any suit against the other for violation of this
Agreement or to enforce any of the covenants or conditions herein, or (ii)
intervene in any suit in which the other is a party to enforce or protect its
interest or rights hereunder, the prevailing party in any such suit shall be
entitled to all of its costs, expenses and reasonable fees of its attorney(s)
(if and to the extent permitted by law) in connection therewith. The rights and
obligations of this Section shall survive the termination or expiration of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
OWNER; OPERATOR:
INFINITY EQUITIES, LLC
STANDARD PARKING CORPORATION
By: /s/ Xxxx Xxxxx By: /s/ Xx Xxxxxxx
----------------------------------- --------------------------------------
Xxxx Xxxxx Xx Xxxxxxx
Managing Member Executive Vice President
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