MANAGEMENT SERVICES AGREEMENT OF
Exhibit 6.1
FORM OF
OF
XXXXX APP 3 LLC – [ ]
This Management Services Agreement (this “Agreement”) is made and entered into as of [ ] (the “Effective Date”) , by and between Xxxxx Holdings, Inc., a Delaware corporation (“Xxxxx Holdings”) and XXXXX APP 3 LLC – [ ] (the “Series”) a series of Xxxxx App 3 LLC (the “Company”).
WHEREAS, the Series holds a single residential or commercial rental property as its main source of income (the “Property”); and
WHEREAS, Xxxxx Holdings, by and through its officers, employees, agents, representatives and affiliates, has experience in property acquisition and management, legal and accounting services and with other services relating to the property rental business of the Series; and
WHEREAS, the Series acknowledges the expertise of Xxxxx Holdings and desires to engage Xxxxx Holdings for, among other things, property acquisition services, property management services, consulting services, legal and accounting services, services related to the Xxxxx Mobile Application and other related services, as described on Schedule A attached hereto (the “Services”), and Xxxxx Holdings is willing to provide the Services to the Series; and
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and conditions set forth herein, the parties hereto agree as follows:
| 1. | Appointment. The Series hereby appoints Xxxxx Holdings to act as its manager, and Xxxxx Holdings hereby agrees, upon the terms and subject to the conditions set forth herein, to act as the Series’ manager and provide the Services for the Series accordingly. |
| 2. | Fees and Expenses. In connection with the Services, the Series shall pay to Xxxxx Holdings the applicable fees (the “Fees”) and shall reimburse Xxxxx Holdings for certain expenses (“Expenses”), each as set forth on Schedule B attached hereto. |
| 3. | Term and Termination. |
| (a) | Term. Xxxxx Holdings shall provide the Services to the Series for a period commencing on the Effective Date and continuing for one (1) year (the “Initial Term”). The Initial Term shall renew automatically for additional one-year terms thereafter unless Xxxxx or the Series provides notice to the other party in writing at least ninety (90) days before the expiration of the Initial Term or any one-year renewal thereof of its desire to terminate this Agreement. |
| (b) | Termination. This Agreement may be terminated only upon the mutual written consent of both parties hereto. |
| (c) | Survival. Notwithstanding anything in this Agreement to the contrary, (i) the provisions of Section 2 shall survive the termination of this Agreement and (ii) no termination of this Agreement, whether pursuant to this Section 3 or otherwise, will affect the Series’ duty to pay any fees accrued, or reimburse any cost or expense incurred, pursuant to the terms of this Agreement prior to the effective date of that termination. |
| 4. | Independent Contractor. Nothing herein shall be construed to create a joint venture, partnership, or an employee/employer relationship between the Series and Xxxxx Holdings. Xxxxx Holdings shall be an independent contractor pursuant to this Agreement. Nothing in this Agreement shall be deemed or construed to enlarge the fiduciary duties and responsibilities, if any, of Xxxxx Holdings or any of its Related Parties (as defined herein). |
| 5. | Disclaimer; Limitation of Liability. |
| (a) | Xxxxx Holdings makes no representations or warranties, express or implied, with respect to the Services. |
| (b) | Neither Xxxxx Holdings nor any of its officers, directors, managers, principals, shareholders, partners, members, employees, agents, representatives and affiliates (each a “Related Party” and, collectively, the “Related Parties”) shall be liable to the Series or any of its affiliates for any loss, liability, damage or expense arising out of or in connection with the performance of any Services contemplated by this Agreement, unless such loss, liability, damage or expense shall be proven to result directly from the gross negligence, willful misconduct, fraud, material misrepresentation or material violation of the express terms of this Agreement. In no event will Xxxxx Holdings or any of its Related Parties be liable to the Series for special, indirect, punitive or consequential damages, including, without limitation, loss of profits or lost business, even if Xxxxx Holdings had been advised of the possibility of such damages. Under no circumstances will the liability of Xxxxx Holdings and the Related Parties exceed, in the aggregate, the fees actually paid to Xxxxx Holdings hereunder. |
| 6. | Indemnification. To the fullest extent permitted by law, and subject to the limitations set forth in this Section 6, and with, in each case, the Manager’s prior approval, (a) the Series shall indemnify the Manager and any director, officer, or employee of the Manager for the entirety of any actions, suits, proceedings, hearings, investigations, charges, complaints, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, liabilities, obligations, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses that the Manager or any director, officer, or employee of the Manager may suffer including, but not limited to, any Manager, director, officer, or employee who was, is or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (“Proceeding”), any appeal therein, or any inquiry or investigation preliminary thereto, solely by reason of the fact that he, she or it is or was a Manager or any director, officer, or employee of the Manager and was acting within scope of duties; (b) the Series shall pay, and advance or if the foregoing is not practicable, reimburse the Manager or any director, officer, or employee of the Manager for expenses incurred by it, him or her (1) in advance of any disposition of a Proceeding to which such Manager or any director, officer, or employee of the Manager was, is or is threatened to be made a party, and (2) in connection with his or her appearance as a witness or other participation in any Proceeding. Such indemnification shall also include reasonable counsel fees. The provisions of this Section 6 shall not be exclusive of any other right under any law, provision of the Certificate of Registered Series, the Certificate of Formation or this Agreement, or otherwise. Notwithstanding the foregoing, this indemnity shall not apply to actions constituting gross negligence, willful misconduct or bad faith, or involving a material breach of this Agreement or the duties set forth herein, which breach, in the Manager’s reasonable opinion, causes a substantial loss to the Series, but shall apply to actions constituting simple negligence. The Series may purchase and maintain insurance to protect itself and the Manager, or any director, officer, or employee of the Manager, employee or agent of the Series, whether or not the Series would have the power to indemnify such Person under this Section 6. |
2
| 7. | Miscellaneous. |
| (a) | Amendments and Waivers. The terms of this Agreement may be amended or waived only with the written consent of the parties. |
| (b) | Entire Agreement. This Agreement, including the schedules attached hereto, constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all oral negotiations and prior writings with respect to the subject matter hereof and thereof, as applicable. |
| (c) | Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. However, neither this Agreement nor any of the rights of the parties hereunder may be transferred or assigned by any party hereto, except (i) if the Company or Series shall merge or consolidate with or into, or sell or otherwise transfer substantially all its assets to, another company which assumes the Company’s or Series’ obligations under this Agreement, the Series may assign its rights hereunder to that company and (ii) Xxxxx Holdings may assign its rights and obligations hereunder to any affiliate. Any attempted transfer or assignment in violation of this Section 7(c) shall be void. |
| (d) | Notices. All notices and other communications provided for herein must be in writing and must be delivered by hand or overnight courier service, mailed by certified or registered mail, or e-mailed. Notices sent by hand or overnight courier service, or mailed by certified or registered mail, will be deemed to have been given when received (except that, if not given during normal business hours for the recipient, will be deemed to have been given at the opening of business on the next business day for the recipient). |
| (e) | Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflict of laws. |
| (f) | Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties hereto agree to renegotiate such provision(s) in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision(s), then: (i) such provision(s) shall be excluded from this Agreement, (ii) the balance of this Agreement shall be interpreted as if such provision(s) were so excluded and (iii) the balance of this Agreement shall be enforceable in accordance with its terms. |
| (g) | Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. |
| (h) | Attorneys’ Fees. In the event any legal action or arbitration or other proceeding between Xxxxx and the Series is brought for the enforcement of this Agreement, the primarily prevailing party in such proceeding shall be entitled to recover, in addition to any other appropriate amounts, its reasonable costs and expenses in connection with such proceeding, including, but not limited to, reasonable attorneys’ fees and court costs. |
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the Effective Date.
| XXXXX HOLDINGS, INC. | ||
| By: | ||
| Name: | Xxxxxx Xxxxx | |
| Title: | Chief Executive Officer and President | |
| XXXXX APP 3 LLC – [ ] | ||
| By Xxxxx Holdings, Inc., as Manager | ||
| By: | ||
| Name: | Xxxxxx Xxxxx | |
| Title: | Chief Executive Officer and President | |
[Signature Page to Management Services Agreement]
4
SCHEDULE A
DESCRIPTION OF SERVICES
1. Property Acquisition/Disposition Services
Xxxxx Holdings is responsible for identifying the residential or commercial rental property that the Series will attempt to acquire and hold as its primary asset (the “Property”). Additional acquisition services provided include but are not limited to: (i) conducting required due diligence, (ii) obtaining Property appraisals, (iii) coordinating Property inspections, and (iv) negotiating the purchase of the Property on behalf of the Series.
In addition, Xxxxx Holdings may market and solicit offers to sell the Series’ Property in its sole discretion.
2. Property Management Services
Xxxxx Holdings will market the Property and solicit tenants to rent the Property, coordinate the maintenance and upkeep of the Property, and otherwise manage (or arrange for the management of) the Property.
3. Consulting Services
Xxxxx Holdings will provide customized advisory services to the Series.
4. Personnel
Xxxxx Holdings will provide a management team and the necessary support personnel (including legal and accounting services providers) to assist the Company and the Series with, among other things, its operational needs and assist the Company in its compliance with any legal and regulatory requirements.
5. Xxxxx Mobile Application Services
Xxxxx Holdings will provide Xxxxx Mobile App hosting, support and other technical services; provided, however, that, in the event that Xxxxx Holdings engages a third-party service provider in connection with the Xxxxx Mobile App, the Company and each Series shall comply with any terms and conditions of such third party service provider agreed in writing by Xxxxx Holdings, solely to the extent the applicable terms and conditions require that such terms be passed through to the Company and/or the Series, as applicable.
5
SCHEDULE B
FEES AND EXPENSES
1. FEES:
| a. | Acquisition Fee: $[ ] (equal to [6]% of the purchase price of the Property) |
| b. | Monthly Management Fee: [8]% of the gross monthly rental income of the Property. |
2. EXPENSES:
| a. | Special Servicing of Non-Performing Properties and Liquidation: The Series will reimburse Xxxxx Holdings for any out-of-pocket expenses in connection with the special servicing of non-performance of the Property and the liquidation of the Property. |
| b. | Fixture/Capital Repair Services: The Series will reimburse Xxxxx Holdings for any out-of-pocket expenses paid to third parties in connection with providing fixture and capital repair services for the Property. This does not include Xxxxx Holding’s overhead and administrative costs, employee costs borne by Xxxxx Holdings, or utilities or technology costs. |
| c. | Reimbursement of Acquisition Expenses: The Series will reimburse Xxxxx Holdings for actual expenses in connection with the evaluation, discovery, investigation, development and acquisition of the Property. |
