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HomeMy WebLinkAboutPZ - Sundance L.L.LP Articles and Authorized agent DocuSign Envelope ID:082AOSFA-B5B5-4BAD-9F8D-B209047A36BA El (6of-ado MANAGEMENT AGREEMENT THIS AGREEMENT is made as of the 1st day of May, 2020, by and between, SUNDANCE INVESTMENTS,L.L.L.P.having its principal place of business at 3405 E.Overland Road,Suite 150,Meridian, ID 83642 (hereinafter, "Owner') and THE SUNDANCE COMPANY, an Idaho corporation, with its principal place of business at 3405 E. Overland Road, Suite 150, Meridian, ID 83642(hereinafter, "Manager"). WITNESSETH: In consideration of the mutual promises and covenants contained herein, Owner and Manager agree as follows: ARTICLE I Agency Owner hereby appoints Manager the sole and exclusive manager of the Property described on Exhibit A attached hereto (the "Property"), and Manager hereby accepts such appointment. Owner also hereby appoints Manager the exclusive leasing and rental agent of the Property and Manager hereby accepts such appointment. . ARTICLE II Term of Agreement,Termination A. The term of this Agreement('Term") shall commence as of the date of this Agreement, and shall continue for one(1)year. Thereafter,this Agreement shall automatically renew each year for successive one (1) year periods, unless canceled by either party, in writing, thirty days prior to the expiration of the then current term. B. Notwithstanding the provisions of Section II(A)above to the contrary,this Agreement may be terminated, and the obligations of the parties hereunder shall thereupon cease, upon the following events: 1. If a petition for bankruptcy, reorganization or arrangement is filed by either party, or if either party shall make an assignment for the benefit of creditors or take advantage of any insolvency act, the other party may terminate this Agreement upon ten(10)days prior written notice to the other party; 2. If Manager or Owner fails to comply with any material rule, order,determination,ordinance or law of any federal,state or municipal authority pertaining to the Property,the other party may terminate this Agreement upon ten (10) days prior written notice, unless such failure to comply is cured within the ten(10)day period. 3. At anytime during the term of this Agreement, Owner shall have the right to terminate this Agreement immediately upon giving written notice to Manager in the event of gross negligence, willful misconduct or fraud by Manager in the performance of any provision of this Agreement. In such event, all obligations of Owner and Manager shall immediately terminate, except for payment by Owner to Manager of all fees and commissions earned by Manager to the effective date of termination and as otherwise provided hereunder. 4. At any time during the term of this Agreement, Manager shall have the right but not the obligation to terminate this Agreement immediately upon giving written notice to Owner upon Property sale or assignment of this Agreement, the deliberate or willful default by Owner in the performance of any provision of this Agreement, or the failure to fund the Operating Account as requested by Manager. In such event all obligations of Owner and Manager shall immediately terminate except as otherwise provided hereunder. 5. Manager shall have the right to terminate this Agreement upon not less than thirty (30) Page 1 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-B209047A36BA days prior written notice in the event of loss or damage by fire or other casualty which shall result in the cancellation by tenants or leases covering fifty percent (50%) or more of the net rentable area of the Property, pursuant to the provisions of such leases. C. Upon termination of this Agreement, Manager shall forthwith: 1. Pay over to Owner all monies collected and held by Manager for the account of Owner pursuant to this Agreement; 2. Deliver to Owner a full accounting with respect to the Property in accordance with Article IV, Section J hereof,covering the period following the date of the last accounting furnished to Owner; 3. Deliver to Owner all books, records, leases, papers and other property and documents of Owner in Manager's custody with respect to the Property; and 4. Manager shall reasonably cooperate with Owner in notifying all tenants of the Property of the expiration and/or termination of this Agreement by written notice sent by certified mail, return receipt requested, and Manager shall reasonably cooperate with Owner to accomplish an orderly transfer of the operation and management of the Property to a party designated by Owner. ARTICLE III Rental of Property A. Duties of Manager 1. Manager shall use its good faith efforts to rent all space in the Property which is now vacant or may become vacant during the Term upon terms and conditions which have been approved in advance by Owner. 2. Manager shall endeavor to procure tenants by all reasonable means available, as Manager deems prudent. Manager shall provide Owner with written reports in such format and at such time as Owner shall reasonably request detailing the status of the Property's operation, leasing activities, repairs, maintenance or any other activity taking place at the Property. 3. Manager shall prepare and submit to the Owner for review and approval, budgets for the Property for each calendar year during the term of this Agreement; and other reports as agreed upon between Owner and Manager. The Budget for the first year of operation shall be provided to Owner by Manager when and as reasonably requested by Owner, and thereafter shall endeavor to provide at least thirty(30) days prior to the first day of each fiscal year. B. Signaae Manager is authorized to place signs in and about the Property if, in Manager's opinion, such would facilitate the leasing of the Property. C. Owner Assistance 1. Owner shall accept or reject a lease presented by Manager within five (5) days of receipt thereof; 2. Owner shall fully cooperate with Manager in effectuating leases of the Property;and 3. Owner shall forward to Manager any inquiries of any sort received with regard to leasing of the Property or any portion thereof. D. Leasing Commission. Page 2 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-B209047A36BA New Leases. If a New Lease (as defined below) is executed and exchanged between Owner and a new Tenant, Owner shall pay to Manager a leasing commission ("Leasing Commissions") equal to Six Percent (6%)of the gross rental rate for the firm term of the Lease. This commission shall be paid with respect to leases into which Owner enters with new third party tenants (exclusive, therefore, of all existing Tenants)during the Term(each a"New Lease"and collectively, "New Leases"). Renewal or Extended Leases. For any leases involving current Tenants, or the extension or renewal of any existing Leases, renewal Leasing Commissions shall be included in the Management Fee for any such renewed areas. Lease expansions shall be paid at Six Percent(6%)of the gross rental rate for the firm term of the Lease. If the Owner terminates this Agreement during the final lease year of any current tenant or existing Lease and extends or renews such Tenant or Lease,then Owner shall pay Manager a commission for such extension or renewal in accordance with this Agreement, unless Owner's termination of this Agreement is for cause due to Manager's actions or omissions. All Leasing Commissions for New Leases due from Owner to Manager shall be paid on the date the applicable New Tenant takes possession of its leased premises,and pays the first month's rent and any applicable security deposit. Notwithstanding the extent to which negotiations may progress, if the Lease fails to be consummated, fully executed and unconditionally exchanged for any reason whatsoever, including without limitation Owner's arbitrary or intentional refusal to enter into the lease or to agree to any term or condition thereof,or if the Lease is not unconditionally approved by any mortgagee or ground lessor whose approval thereof is required in its mortgage or ground lease, as the case may be, for any reason whatsoever, Manager shall not be entitled to any commission whatsoever in connection with the Lease,and any negotiations with respect thereto. E. Exi?enses The expenses incurred by Manager and Owner in performance of this Article shall be paid as follows: 1. Direct expenses of the marketing of the Property, such as but not limited to: appraisals, marketing tools (brochures, direct mailings, interior design boards, signage, etc.), attorney's fees, and architectural fees for space planning shall be paid by Owner; provided however that Manager shall obtain the prior consent of Owner before incurring any such expenses in excess of five thousand dollars($5,000)annually to the extent the proposed expenses have not been included in the approved budget for the Property. ARTICLE IV Management of Property A. Duties of Manager Manager shall manage the Property in an efficient and businesslike manner having due regard for the age and physical condition of the Property. Manager, through its employees and independent contractors, shall supply those operational services for the Property set forth in this Agreement. Manager shall not be responsible for: 1. The planning, leasing, developing, financing or supervision of construction for any additional land which may hereafter be added to or become a part of the Property from time to time; 2. Services requiring a substantial expenditure of time in connection with litigation other than suits for the collection of rent or the enforcement of leases, whether such litigation shall be instituted by Owner, by a tenant, or by others. B. Repairs Manager shall, in the name of and at the expense of Owner, make or cause to be made such ordinary repairs and alterations as Manager may deem advisable or necessary. Not more than five thousand dollars ($5,000) per month, however, shall be expended for any one item of repair or alteration without Owner's prior written approval, except for emergency repairs if, in the opinion of Manager, such repairs are necessary to Page 3 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-B209047A36BA protect the Property from damage or to maintain services to tenants as called for in their leases. This section shall not apply to repairs that have been included in the approved budget for the Property. C. Service Contracts Manager shall, in the name of and at the expense of Owner, contract for those utilities and other building operation and maintenance services Manager shall deem advisable; provided however that no service contract shall be entered into for a term exceeding one year without the prior written approval of Owner. Manager shall, at Owner's expense, purchase and keep the Property furnished with all necessary supplies. All expenses shall be charged to Owner at cost and Owner shall be credited with all rebates, refunds,allowances and discounts allowed to Manager. D. Employees Except for third party service contracts or as otherwise provided,all persons employed in the operation of the Property(such as but not limited to on-site maintenance staff)shall be employees of Manager or a legal entity owned or controlled by Manager. Manager shall make disbursements and deposits for all compensation and other amounts payable with respect to persons who are employed in the operation of the Property, including, but not limited to, unemployment insurance, social security, workmen's compensation and other charges imposed by a governmental authority or provided for in a union agreement. Manager shall maintain complete payroll records. Manager's employees may complete maintenance, repair and replacement, and services required at the Property, and the charges must be reasonable for like services. E. Bonding Employees All employees of Manager who handle or are responsible for Owner's funds shall be bonded by a fidelity bond in an adequate amount of not less than two months gross rental income generated by the Property. Manager shall provide Owner with proof of the required coverage at least annually or upon written request of Owner. F. Expenditures All expenditures authorized by this Agreement shall be considered operating expenses to be paid from Owner's funds received by Manager. In the event disbursements shall be in excess of the rents collected, Owner agrees to pay such excess promptly on demand. G. Reimbursement Owner agrees to reimburse Manager for all out-of-pocket expenses, including, but not limited to, long distance telephone calls and,with Owner's prior approval,the cost of out-of-town travel. H. Collection and Segregation of Funds Manager shall collect the rent and other income from tenants of the Property. All funds received by Manager for or on behalf of Owner (less any sums properly deducted by Manager pursuant to any of the provisions of this Agreement)shall be deposited in a bank in a special account maintained by Manager for the deposit of funds of Owner.The account may be swept by Owner from time to time, provided that Owner agrees to maintain sufficient funds necessary to cover the operating costs of the Property. Whenever Manager shall determine that there are insufficient funds in the Operating Account to pay the anticipated costs and expenses from the Property during the ensuing thirty-day period (after taking into account the sums then on deposit in the Operating Account), Manager shall provide written notice thereof to Owner, and Owner shall, within five (5) days following the delivery of such notice, deposit in the Operating Account an amount equal to the shortfall. Following Owner's approval of a Budget (including revisions thereto), Manager may make any expenditure authorized thereunder without obtaining any further consent or approval from Owner. Manager shall obtain Owner's prior consent with respect to any expenditure in excess of Three Thousand Dollars ($3,000)which is not authorized by an approved Budget (including revisions thereto.) Page 4 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-B209047A36BA Manager shall not be required to advance its own funds for Owner's account. Notwithstanding any other provision in this Agreement, Manager's obligations under this Agreement shall be conditioned upon the availability of all funds required therefore in the Operating Account. I. Budgets Manager shall prepare and submit to the Owner for review and approval, budgets for the Property for each fiscal year during the term of this Agreement; and other reports as agreed upon between Owner and Manager. A fiscal year shall be for a period from January 1 to December 31. The parties agree to use reasonable efforts to prepare and adopt a budget no later thirty(30) days prior to the first day of each fiscal year. J. Monthly Statements Manager shall use all reasonable efforts to maintain accurate books and records in accordance with generally accepted accounting principles,with respect to the Property, reflecting all funds received or disbursed in connection with the Manager's operation of the Property.All such reports and records shall be kept on the basis of a calendar year.All such books and records shall be kept at the Property or Manager's main office, and shall be available for inspection by the Owner at all reasonable times. Manager shall maintain records at its principal office in Boise, Idaho, related to its operation, management,and maintenance of the Property.Owner shall at all reasonable times upon 24 hours advance notice,have access to such records during normal business hours for the purpose of review,copying and/or audit. Owner shall have the right to duplicate such records. Owner acknowledges that the certification of property financials is not included as part of Duties of Manager. Manager shall provide to Owner on or before the 30th day of each calendar month an accounting for the previous month of all rents and other income collected, and disbursements,with vouchers therefore (upon request)of all funds related to the operation, management and maintenance of the Property for the month preceding the first day of the month during which the accounting is rendered. The receipts and disbursements shall be compared by Manager to the submitted and approved Budget. Manager shall provide Owner with written reports in such format and at such time as Owner shall reasonably request detailing property operation, leasing activities, repairs, maintenance or any other activity taking place at the Property. K. Interest and Tax Payments Manager shall pay on behalf of Owner,from Owners'funds interest and principal on mortgages,taxes, assessments,premiums on insurance or reserves for such items only if designated in writing by Owner. Income tax returns are not included. L. Leaal Proceedincs Manager shall, at Owner's request and expense, engage counsel and cause such legal proceedings to be instituted as may be necessary to enforce payment of rent or to dispossess tenants. Manager shall have the authority to compromise disputes with tenants involving setoffs or damage claims so long as the amount involved does not exceed one month's rent payable by such tenant.All such actions shall be commenced and prosecuted in the name of Owner and Owner shall indemnify and hold Manager harmless from all liabilities and obligations arising therefrom. M. Compensation As compensation for management of the Property, Owner shall pay Manager a fee equal to five percent(5%) of Gross Monthly Rentals. The"Gross Monthly Rentals"shall be deemed to include all amounts due from all tenants or past tenants of the Property in any given month including but not limited to:base or minimum rentals; Page 5 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-B209047A36BA reimbursement of operating expenses and real estate taxes; additional rents; uncollected rents and/or percentage rents. A minimum monthly fee equal to Five Percent(5%)of sixty percent(60%)of the Property's gross rental potential(using market rents for vacant space) is to be paid to Manager for those months in which five percent(5%)of the Gross Monthly Rentals for such month are below said minimum fee. Manager will,at Owner's request, provide Construction Management services at then current fair market costs. ARTICLE V Indemnification A. Owner shall defend with counsel reasonably acceptable to Manager, indemnify, and hold harmless Manager and its officers, directors, partners, agents and employees from and against all damages, losses, costs and expenses(including reasonable attorney fees) arising from and related to claims, causes of action, and assertions of liability raised by any person or entity not a party to this Agreement,which are based wholly or in part on 1) Owner(or its officers', directors', employees' or agents')gross negligence, willful misconduct, unlawful misconduct,failure to act in good faith, and actions in breach of the terms of this Agreement,or on 2) Manager's (or its officers', directors', employees', or agents') performance of its obligations under this Agreement, provided,however,that Owner shall have no obligation to indemnify Manager against such claims to the extent based upon Manager's(or its officers',directors',employees',or agents') gross negligence,willful misconduct,unlawful misconduct,failure to act in good faith,or actions in breach of the terms of this Agreement. B. Manager shall defend with counsel reasonably acceptable to Owner, indemnify, and hold harmless Owner and its officers,directors,partners,agents,and employees form and against all damages, losses,costs and expenses (including reasonable attorney fees) arising from or related to claims, causes of action, and assertions of liability raised by any person or entity not a party to this Agreement, to the extent the claims are based upon Manager's(or its officers',directors',employees',or agents')gross negligence,willful misconduct, unlawful misconduct,failure to act in good faith,or actions in breach of the terms of this Agreement. C. The foregoing provisions of this Article shall survive the termination of this Agreement for a period of two years and thereafter neither party shall have any obligation to indemnify or hold the other harmless pursuant to the terms of this Article. Nothing contained in this Article shall relieve either party from responsibility to the other party for damage caused by one party's failure to fulfill the terms of this Agreement. ARTICLE VI Insurance Manager agrees to carry public liability and workers compensation insurance for all employees of Manager entering onto the Property for whatever reason and automobile liability insurance for each vehicle used by Manager and operated at the property. Manager shall provide proof of such insurance,within ten(10) business days of any request by Owner. ARTICLE VII Independent Contractors It is expressly understood and agreed that Manager will act as an independent contractor in performance of this Agreement. No provision hereunder shall be intended to create a partnership or a joint venture with respect to the Property or otherwise. ARTICLE VIII Notice Any notice required or permitted under the Agreement shall be given when actually delivered or when deposited in the United States mail as certified mail addressed as follows: To Owner: Sundance Investments, L.L.L.P. 3405 E. Overland Road, Suite 150 Meridian, ID 83642 To Manager: The Sundance Company Page 6 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-B209047A36BA 3405 E Overland Road, Suite 150 Meridian, ID 83642 Fax No. (208)322-7307 Attn: Michael A. Reich or to such other address as may be specified from time-to-time by either party in writing. ARTICLE IX Governing Law This Agreement shall be governed by the laws of Idaho. ARTICLE X Suit or Action If suit or action is instituted in connection with any controversy arising out of this Agreement, the prevailing party shall be entitled to recover its costs, including reasonable attorneys'fees incurred in such suit or action and on any appeal from any judgment or decree entered therein. ARTICLE XI Assignment and Amendment All terms and conditions of this Agreement shall be binding upon the parties hereto and their respective successors and assigns. This Agreement may not be modified or amended except by written agreement of the parties. ARTICLE XII Facsimile and Counterpart Signatures A signature transmitted by facsimile or other electronic means will be enforceable against any party who executes this Agreement and transmits the signature. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one of the same Agreement. In addition,this Agreement may contain more than one counterpart of the signature page and this Agreement may be executed by affixing the signatures of each of the parties to one of such counterpart signature pages; all of such signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. IN WITNESS WHEREOF,the parties hereto have executed this Agreement in duplicate as of the date first hereinabove written. OWNER: Sundance Investments, L.L.L.P. DocuSigned by: I ByJ TAxAtS �. 9V'A'.J 61& Travls n"arson,XUthorized Agent MANAGER: THE SUNDANCE COMPANY DocuSigned by: By:_ Michael 77 Its:Authorized Agent Page 7 of 8 DocuSign Envelope ID:082A08FA-B5B5-4BAD-9F8D-8209047A36BA Exhibit A Building Name:The Shops at El Dorado Address:2845 E Overland Road, Meridian, ID 83642 Tax Parcel Number(s): R1022760210 Approximate Square Footage: 18,180 Building Name: Monterey Place Address: 1965 S Eagle Road, Meridian, ID 83642 Tax Parcel Number(s): R1022770020 Approximate Square Footage:25,139 Building Name:Ventura Place Address: 3006 E Goldstone Drive, Meridian, ID 83642 Tax Parcel Number(s): R1022770050 Approximate Square Footage: 9,150 Building Name:Santa Fe Square Address:2275 S Eagle Road, Meridian, ID 83642 Tax Parcel Number(s): R1022760120 Approximate Square Footage: 22,319 Building Name:Granada Square Address:2264 S Bonito Way, Meridian, ID 83642 Tax Parcel Number(s): R1022760162 Approximate Square Footage:25,119 Page 8 of 8