EXHIBIT 10.3
FORM OF
MASTER MANAGEMENT AGREEMENT,
INCLUDING THE FORM OF
MANAGEMENT AGREEMENT
FOR EACH PROPERTY
MASTER MANAGEMENT AGREEMENT
This Master Management Agreement (this "Agreement") is entered into as
of the _______ day of ____________, 1998, by and between Inland Retail Real
Estate Trust, Inc., a Maryland corporation (the "Company") and Inland
Southeast Property Management Corp., a Delaware corporation (the "Agent").
WITNESSETH
WHEREAS, the Company intends to qualify as a "real estate investment
trust" (a "REIT") as defined in Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), and to make investments of the
type permitted to qualified REITs under the Code and not inconsistent with
the Articles of Incorporation of the Company, as amended (the "Articles") and
the Bylaws of the Company, as amended (such investments being referred to
herein collectively as the "Properties" and individually as a "Property"); and
WHEREAS, the Company desires to avail itself of the services,
experiences, sources of information, advice and assistance of the Agent and
to have the Agent manage the Properties and undertake the duties and
responsibilities hereinafter set forth; and
WHEREAS, the Agent is willing to undertake and render such services, on
the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the mutual covenants herein set
forth, the parties hereto agree as follows:
1. The Company will hire the Agent to manage each of its Properties.
The engagement of the Agent by the Company for each Property shall be
pursuant to the terms of a separate Management Agreement in the form of
Exhibit A attached hereto (the "Form Agreement").
2. The Agent will manage each of the Properties acquired by the
Company, according to the terms of the Form Agreement.
3. The initial term of the Management Agreement with respect to each
Property shall commence on the date of acquisition of such Property by the
Company and shall end on December 31st of the year in which such acquisition
occurred, with the three successive three year renewal periods occurring
immediately thereafter.
4. The parties may mutually agree to vary the terms of the Form
Agreement for any or all of the Properties or to not enter into a Form
Agreement with respect to any Property.
5. The Company shall have the option at any time after three years
from the initial date of effectiveness of the initial final Prospectus of the
Company for its initial public
offering, upon prior written notice, during the term of this Agreement
without any consent of the Management Agent or its Board of Directors or
shareholders to cause the business conducted by the Management Agent
(including all of its assets) to be acquired by or consolidated into the
Company. In such event, the Management Agent and/or its respective
shareholders will receive in connection with such an acquisition and in
exchange for terminating this Agreement and all Management Agreements entered
into pursuant hereto and the release or waiver of all fees payable under the
provisions of this Agreement and all Management Agreements entered into
pursuant hereto until its and their stated terminations, but not paid, a
determinable number of shares of common stock of the Company (the "Shares").
The Company will be obligated to pay any fees accrued under this Agreement
and all Management Agreements entered into pursuant hereto for services
rendered through the closing of such acquisition.
The number of Shares to be issued by the Company to the Management Agent
or its shareholders, as the case may be, shall be determined as follows. The
Company shall first send notice (the "Election Notice") to the Management
Agent of its election to proceed with such a transaction. Next, the net
income of the Management Agent for the six month period immediately preceding
the month in which the Election Notice is delivered, as determined by an
independent audit conducted in accordance with generally accepted auditing
standards, shall be annualized. The Management Agent shall bear the cost of
any such audit. Such amount shall then be multiplied by ninety percent (90%)
and then divided by the "Funds from Operations per Weighted Average Share" of
the Company. "Funds from Operations per Weighted Average Share" shall be
equal to the annualized Funds from Operations (I.E., four times the Funds
from Operations for the quarter immediately preceding the delivery of the
Election Notice) per weighted average Share of the Company for such quarter,
all based upon the quarterly report of the Company delivered to its
Stockholders for such quarter. The resulting quotient shall constitute the
number of Shares to be issued by the Company to the Management Agent or its
shareholders, with delivery thereof and the closing of the transaction to
occur within 90 days of delivery of the Election Notice. Any such
transaction will occur, if at all, only if the Board of Directors of the
Company obtains a fairness opinion from a recognized financial advisor or
institution providing valuation services to the effect that the consideration
to be paid therefor is fair, from a financial point of view, to the
Stockholders of the Company.
The Company shall not terminate this Agreement solely for the purpose of
avoiding such a business combination, such as in anticipation of the listing
of the Shares on a national stock exchange or their inclusion in a national
market system.
6. This Agreement may not be assigned by either party without the prior
written consent of the other party. This Agreement shall be effective as of
the date hereof and shall remain in effect until the earlier to occur of
(A) the event described in paragraph 5 hereof, or (B) December 31, 2020.
7. All notices required or permitted to be given hereunder shall be in
writing and shall be delivered at the following addresses of the parties
thereto:
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THE COMPANY:
Inland Retail Real Estate Trust, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: President
THE AGENT:
Inland Southeast Property Management Corp.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
With a copy to:
Inland Southeast Property Management Corp.
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
THE COMPANY:
Inland Retail Real Estate Trust, Inc.
By:________________________________________
Its:_______________________________________
THE AGENT:
Inland Southeast Property Management Corp.
By:________________________________________
Its:_______________________________________
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CONSENT OF SHAREHOLDERS
The undersigned, being all of the shareholders of Inland Southeast Property
Management Corp. (the "Agent") hereby consent to the Agent entering into the
foregoing Master Management Agreement, and specifically agree to the provisions
of paragraph 5 thereof, as of the date of the Master Management Agreement.
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
_____________________________________ ________________________________________
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EXHIBIT A
MANAGEMENT AGREEMENT
IN CONSIDERATION of the mutual covenants and agreements herein contained,
Inland Retail Real Estate Limited Partnership, an Illinois limited partnership
("OWNER") and Inland Southeast Property Management Corp., a Delaware corporation
("AGENT"), agree as follows:
1. OWNER hereby employs the AGENT exclusively to rent, lease, operate and
manage the property commonly known as __________________ Shopping Center and
located in _______________, _______________, and legally described on
Exhibit "A" attached hereto and made a part hereof (the "Premises"), upon the
terms and conditions hereinafter set forth, for a term beginning on the ____ day
of _____________, 199_ and ending on the 31st day of December, 199_ and
thereafter for three successive three year renewal periods, with the first such
three year renewal period commencing on January 1st of __________ and ending on
December 31st of ___________, unless on or before thirty (30) days prior to the
date last above mentioned or on or before thirty (30) days prior to the
expiration of any such renewal period, AGENT shall notify OWNER in writing that
it elects to terminate this Agreement, in which case this Agreement shall be
thereby terminated on said last mentioned date. In addition, and
notwithstanding the foregoing, OWNER may terminate this Agreement at any time
upon delivery of written notice to AGENT not less than thirty (30) days prior to
the effective date of termination, in the event of (and only in the event of) a
showing by OWNER of willful misconduct, gross negligence, or deliberate
malfeasance by AGENT in the performance of AGENT'S duties hereunder. In the
event this Agreement is terminated for any reason prior to the expiration of its
original term or any renewal term, the OWNER shall
indemnify, protect, defend, save and hold the AGENT and all of its
shareholders, officers, directors, employees, agents, successors and assigns
(collectively, "Indemnified Parties") harmless from and against any and all
claims, causes of action, demands, suits, proceedings, loss, judgments,
damage, awards, liens, fines, costs, attorney's fees and expenses, of every
kind and nature whatsoever (collectively, "Losses"), which may be imposed on
or incurred by the AGENT by reason of the willful misconduct, gross
negligence and/or unlawful acts (such unlawfulness having been adjudicated by
a court of proper jurisdiction) of OWNER.
2. THE AGENT AGREES:
2.1 To accept the management of the Premises, to the extent, for the
period, and upon the terms herein provided and agrees to furnish the
services of its organization for the rental, leasing, operation and
management of the Premises, and, without limiting the generality of the
foregoing, the AGENT agrees to be responsible for those specific duties and
functions set forth in Section 3 hereof. AGENT shall be entitled at all
times to manage the Premises in accordance with the AGENT'S standard
operating policies and procedures, except to the extent that any specific
provisions contained herein are to the contrary, in which case AGENT shall
manage the Premises consistent with such specific provisions. AGENT agrees
to use its best efforts to maintain the highest occupancy at the highest
rents for each space comprising the Premises.
2.2 To render monthly reports for the Premises to the OWNER, to the
attention of the individual and address as directed by the OWNER from time
to time, and to remit to the OWNER the excess of Gross Income (as defined
in Section 3.3 hereof) over expenses paid per Section 3.4 hereof ("Net
Proceeds") for each month on
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or before the 15th day of the following month. AGENT will remit the Net
Proceeds to the OWNER at the address as stated in Section 6.1 hereof. The
reports to be submitted shall consist of the AGENT'S Consolidated Cash
Report and Budget Variance Report, (samples of which are attached as
"Exhibit B") and such other monthly, quarterly and annual reports as are
customary in commercial property management relationships and as reasonably
requested by OWNER in writing from time to time.
2.3 In case the expenses paid per Section 3.4 hereof shall be in
excess of the Gross Income for any monthly period, AGENT shall notify OWNER
of same and OWNER agrees to pay such excess immediately upon request from
the AGENT, but nothing herein contained shall obligate the AGENT to advance
its own funds on behalf of the OWNER. All advances by AGENT on behalf of
OWNER shall be paid to AGENT by OWNER within ten (10) days after request.
2.4 To prepare annualized budgets for operation of the Premises and
submit same to the OWNER for approval. Such budgets shall be for planning
and informational purposes only, and the AGENT shall have no liability to
the OWNER for any failure to meet any such budget. However, AGENT will use
its best efforts to operate the Premises within the approved budget. The
parties acknowledge that the first such annual budget has been prepared and
approved for the year commencing _______________, 199_ and ending on
______________, 199_. Notwithstanding the period covered by the first
annual budget, all subsequent annual budgets shall cover the period from
January 1st of each year through December 31st of such year. The proposed
annual budget for each calendar year shall be submitted by AGENT to the
OWNER by December 1st of the year preceding the year for which it applies.
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OWNER shall notify AGENT within fifteen (15) days as to whether OWNER has
approved the proposed annual budget or not. If the OWNER disapproves the
proposed budget, the OWNER shall notify the AGENT of what, specifically,
OWNER disapproves of, and the OWNER and AGENT shall make the necessary
amendments to the annual budget. During the time OWNER and AGENT are
preparing these amendments, AGENT will continue to operate the Premises
according to the last approved budget. The OWNER'S approval of the annual
budget shall constitute approval for the AGENT to expend sums for all
budgeted expenditures, without the necessity to obtain additional approval
of the OWNER under any other expenditure limitations as set forth elsewhere
in this Agreement.
3. THE OWNER AGREES:
And does hereby give the AGENT the following exclusive authority and powers
(all of which shall be exercised in the name of AGENT, as agent for the OWNER)
and the OWNER agrees to assume all expenses in connection therewith:
3.1 To advertise the Premises or any part thereof and to display
signs thereon, as permitted by law; and to rent the same; to pay all
expenses of leasing the Premises, including but not limited to, newspaper
and other advertising, signage, banners, brochures, referral commissions,
leasing commissions, finder's fees and salaries, bonuses and other
compensation of leasing personnel responsible for the leasing of the
Premises; to cause references of prospective tenants to be investigated, it
being understood and agreed by the parties hereto that the AGENT does not
guarantee the credit worthiness or collectibility of accounts receivable
from tenants, users or lessees; and to negotiate new leases and renewals
and cancellations of existing leases
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which shall be subject to the AGENT obtaining OWNER'S approval. The AGENT
may collect from tenants all or any of the following: a late rent
administrative charge, a non-negotiable check charge, credit report fee, a
subleasing administrative charge and/or broker's commission and need not
account for such charges and/or commission to the OWNER; to terminate
tenancies and to sign and serve in the name of the OWNER of the Premises
such notices as are deemed necessary by the AGENT; to institute and
prosecute actions to evict tenants and to recover possession of the
Premises or portions thereof; with the OWNER'S authorization, to xxx for
in the name of the OWNER of the Premises and recover rent and other sums
due; and to settle, compromise, and release such actions or suits, or
reinstate such tenancies. All expenses of litigation including, but not
limited to, attorneys' fees, filing fees, and court costs which AGENT
shall incur in connection with the collecting of rent and other sums, or
to recover possession of the Premises or any portion thereof shall be
deemed to be an operational expense of the Premises. AGENT and OWNER
shall concur on the selection of the attorney to handle such litigation.
3.2 To hire, supervise, discharge, and pay all labor required for the
operation and maintenance of the Premises including but not limited to on
site personnel, managers, assistant managers, leasing consultants,
engineers, janitors, maintenance supervisors and other employees required
for the operation and maintenance of the Premises, including personnel
spending a portion of their working hours (to be charged on a pro rata
basis) at the Premises (all of whom shall be deemed employees of the
Premises, not of the AGENT). All expenses of such employment shall be
deemed operational expenses of the Premises. To make or cause to be made
all
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ordinary repairs and replacements necessary to preserve the Premises in
its present condition and for the operating efficiency thereof and all
alterations required to comply with lease requirements, and to do
decorating on the Premises; to negotiate and enter into, as AGENT of the
OWNER of the Premises, contracts for all items on budgets that have been
approved by OWNER, any emergency services or repairs for items not
exceeding $5,000.00, appropriate service agreements and labor agreements
for normal operation of the Premises, which have terms not to exceed three
(3) years, and agreements for all budgeted maintenance, minor alterations,
and utility services, including, but not limited to, electricity, gas,
fuel, water, telephone, window washing, scavenger service, landscaping,
snow removal, pest exterminating, decorating and legal services in
connection with the leases and service agreements relating to the Premises,
and other services or such of them as the AGENT may consider appropriate;
and to purchase supplies and pay all bills. AGENT shall use its best
efforts to obtain the foregoing services and utilities for the Premises at
the most economical costs and terms available to AGENT. The OWNER hereby
appoints AGENT as OWNER'S authorized agent for the purpose of executing, as
managing agent for said OWNER, all such contracts. In addition, the OWNER
agrees to specifically assume in writing all obligations under all such
contracts so entered into by the AGENT, on behalf of the OWNER of the
Premises, upon the termination of this Agreement and the OWNER shall
indemnify, protect, save, defend and hold the AGENT and all of its
shareholders, officers, directors, employees, agents, successors and
assigns harmless from and against any and all claims, causes of action,
demands, suits, proceedings, loss, judgments, damage, awards, liens, fines,
costs, attorney's fees and expenses, of every
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kind and nature whatsoever, resulting from, arising out of or in any way
related to such contracts and which relate to or concern matters occurring
after termination of this Agreement, but excluding matters arising out of
AGENT's willful misconduct, gross negligence and/or unlawful acts. AGENT
shall secure the approval of, and execution of appropriate contracts by,
the OWNER for any non-budgeted and non-emergency/contingency capital items,
alterations or other expenditures in excess of $5,000.00 for any one item,
securing for each item at least three (3) written bids, if practicable, or
providing evidence satisfactory to OWNER that the contract amount is lower
than industry standard pricing, from responsible contractors. AGENT shall
have the right from time to time during the term hereof, to contract with
and make purchases from subsidiaries and affiliates of the AGENT, provided
that contract rates and prices are competitive with other available
sources. The AGENT may at any time and from time to time request and
receive the prior written authorization of the OWNER of the Premises of
any one or more purchases or other expenditures, notwithstanding that
the AGENT may otherwise be authorized hereunder to make such purchases or
expenditures.
3.3 To collect rents and/or assessments and other items, including
but not limited to tenant payments for real estate taxes, property
liability and other insurance, damages and repairs, common area
maintenance, tax reduction fees and all other tenant reimbursements,
administrative charges, proceeds of rental interruption insurance, parking
fees, income from coin operated machines and other miscellaneous income,
due or to become due (all such items being referred to herein as "Gross
Income") and give receipts therefor and to deposit all such Gross Income
collected hereunder in the
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AGENT'S custodial account which the AGENT will open and maintain, in a
state or national bank of the AGENT'S choice and whose deposits are
insured by the Federal Deposit Insurance Corporation, exclusively for
the Premises and any other properties owned by OWNER (or any entity that
is owned or controlled by the general partner of the OWNER) and managed
by AGENT. OWNER agrees that AGENT shall be authorized to maintain a
reasonable minimum balance (to be determined jointly from time to time)
in such account. AGENT may endorse any and all checks received in
connection with the operation of the Premises and drawn to the order of
the OWNER and the OWNER shall, upon request, furnish the AGENT'S depository
with an appropriate authorization for the AGENT to make such endorsement.
3.4 To pay all expenses of the Premises from the Gross Income
collected in accordance with 3.3 above, from the AGENT'S custodial account.
It is understood that the Gross Income will be used first to pay the
compensation to the AGENT as contained in Paragraph 5 below, then
operational expenses and then any mortgage indebtedness, including real
estate tax and insurance impounds, but only as directed by the OWNER in
writing and only if sufficient Gross Income is available for such payments.
3.5 Nothing in this Agreement shall be interpreted in such a manner
as to obligate the AGENT to pay from Gross Income, any expenses incurred by
OWNER prior to the commencement of this Agreement, except to the extent the
OWNER advances additional funds to pay such expenses.
3.6 To collect and handle tenants' security deposits, including the
right to apply such security deposits to unpaid rent, and to comply, on
behalf of the OWNER of
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the Premises, with applicable state or local laws concerning security
deposits and interest thereon, if any.
3.7 The AGENT shall not be required to advance any monies for the
care or management of the Premises, and the OWNER agrees to advance all
monies necessary therefor. If the AGENT shall elect to advance any money
in connection with the Premises, the OWNER agrees to reimburse the AGENT
forthwith and hereby authorizes the AGENT to deduct such advances from any
monies due the OWNER.
3.8 In connection with any insured losses or damages, to handle all
steps necessary regarding any such claim; provided that the AGENT will not
make any adjustments or settlements in excess of $10,000.00 without the
OWNER'S prior written consent.
3.9 Notwithstanding anything to the contrary contained in this
Agreement, OWNER acknowledges and agrees that any or all of the duties of
AGENT as contained herein may be delegated by AGENT and performed by a
person or entity ("Subagent") with whom AGENT contracts for the purpose of
performing such duties. OWNER specifically grants AGENT the authority to
enter into such a contract with a Subagent; provided that OWNER shall have
no liability or responsibility to any such Subagent for the payment of the
Subagent's fee or for reimbursement to the Subagent of its expenses or to
indemnify the Subagent in any manner for any matter; and provided further
that AGENT shall require such Subagent to agree, in the written agreement
setting forth the duties and obligations of such Subagent, to indemnify the
OWNER for all loss, damage or claims incurred by OWNER as a result of the
willful misconduct, gross negligence and/or unlawful acts of the Subagent.
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4. THE OWNER FURTHER AGREES:
4.1 To indemnify, defend, protect, save and hold the AGENT and all of
its shareholders, officers, directors, employees, agents, successors and
assigns (collectively, "Indemnified Parties") harmless from any and all
claims, causes of action, demands, suits, proceedings, loss, judgments,
damage, awards, liens, fines, costs, attorney's fees and expenses, of every
kind and nature whatsoever (collectively, "Losses") in connection with or
in any way related to the Premises and from liability for damage to the
Premises and injuries to or death of any person whomsoever, and damage to
property; provided, however, that such indemnification shall not extend to
any such Losses arising out of the willful misconduct, gross negligence
and/or unlawful acts (such unlawfulness having been adjudicated by a court
of proper jurisdiction) of AGENT or any of the other Indemnified Parties.
OWNER agrees to procure and carry at its own expense Public Liability
Insurance, Fire and Extended Coverage Insurance, Burglary and Theft
Insurance, Rental Interruption Insurance, Flood Insurance (if appropriate)
and Boiler Insurance (if appropriate) naming the OWNER and the AGENT as
insureds and adequate to protect their interests and in form, substance,
and amounts reasonably satisfactory to the AGENT, and to furnish to the
AGENT certificates and policies evidencing the existence of such insurance.
The premiums for all such insurance maintained by the OWNER shall be paid
by either the OWNER directly or, provided sufficient Gross Income is
available, by the AGENT from such Gross Income. Unless the OWNER shall
provide such insurance and furnish such certificate and policy within ten
(10) days from the date of this Agreement, the AGENT may, in its sole
discretion, but shall not be obligated to, place said insurance and charge
the cost thereof
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to the account of the OWNER. All such insurance policies shall provide
that the AGENT shall receive thirty (30) days' written notice prior to
cancellation of the policy. AGENT shall not be liable for any error of
judgment or for any mistake of fact or law, or for any thing which it may
do or refrain from doing, except in cases of willful misconduct, gross
negligence and/or unlawful acts (such unlawfulness having been
adjudicated by a court of proper jurisdiction).
4.2 OWNER hereby warrants and represents to AGENT that to the best of
OWNER'S knowledge, neither the Premises, nor any part thereof, has
previously been or is presently being used to treat, deposit, store,
dispose of or place any hazardous substance, that may subject AGENT to
liability or claims under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C.A. Section 9607) or any
constitutional provision, statute, ordinance, law, or regulation of any
governmental body or of any order or ruling of any public authority or
official thereof, having or claiming to have jurisdiction thereover.
Furthermore, OWNER agrees to indemnify, protect, defend, save and hold the
AGENT and all of its shareholders, officers, directors, employees, agents,
successors and assigns harmless from any and all claims, causes of action,
demands, suits, proceedings, loss, judgments, damage, awards, liens, fines,
costs, attorney's fees and expenses, of every kind and nature whatsoever,
involving, concerning or in any way related to any past, current or future
allegations regarding treatment, depositing, storage, disposal or placement
by any party other than AGENT of hazardous substances on the Premises.
4.3 To give adequate advance written notice to the AGENT if the OWNER
desires that the AGENT make payment, out of Gross Income, to the extent
funds are
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available after the payment of the AGENT'S compensation as contained in
Paragraph 5 and all operational expenses, of mortgage indebtedness,
general taxes, special assessments, or fire, boiler or any other
insurance premiums. In no event shall the AGENT be required to advance
its own money in payment of any such indebtedness, taxes, assessments or
premiums.
5. THE OWNER AGREES TO PAY THE AGENT, AS A MONTHLY MANAGEMENT FEE
HEREUNDER, an amount no greater than four and one half percent (4 1/2%) of Gross
Income for the month for which the payment is made, which shall be deducted
monthly by the AGENT and retained by the AGENT from Gross Income prior to
payment to OWNER of Net Proceeds. Such Management Fee shall be compensation for
those services specified herein. Any services beyond those specified herein,
such as sales brokerage, construction management, loan origination and
servicing, property tax reduction and risk management services, shall be
performed by AGENT and compensated by OWNER only if the parties agree on the
scope of such work and provided that the compensation to be paid therefor will
not exceed 90% of that which would be paid to unrelated parties providing such
services and provided further that all such compensation must be approved by a
majority of the independent directors of OWNER. OWNER acknowledges and agrees
that AGENT may pay or assign all or any portion of its Management Fee to a
Subagent as described in Section 3.9 hereof.
5.1 AGENT shall retain all administrative charges actually collected
from tenants in connection with annual common area maintenance
reconciliations and tenant chargebacks for same.
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6. IT IS MUTUALLY AGREED THAT:
6.1 OWNER shall designate one (1) person to serve as OWNER'S
Representative in all dealings with AGENT hereunder. Whenever the
notification and reporting to OWNER or the approval, consent or other
action of OWNER is called for hereunder, any such notification and
reporting if sent to or specified in writing to the OWNER'S Representative,
and any such approval, consent or action if executed by OWNER'S
Representative, shall be binding on OWNER. The OWNER'S Representative
shall be:
Name Address
---- -------
Xxxxxxx X. Xxxxxx 0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
The OWNER'S Representative may be changed at the discretion of the OWNER,
at any time and from time to time, and shall be effective upon AGENT'S receipt
of written notice of the new OWNER'S Representative.
6.2 The OWNER expressly withholds from the AGENT any power or
authority to make any structural changes in any building or to make any
other major alterations or additions in or to any such building or
equipment therein, or to incur any expense chargeable to the OWNER, other
than expenses related to exercising the express powers above vested in the
AGENT without the prior written direction of the OWNER'S Representative,
except such emergency repairs as may be required to ensure the safety of
persons or property or which are immediately necessary for the preservation
and safety of the Premises or the safety of the tenants and occupants
thereof or are required to avoid the suspension of any necessary service to
the
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Premises. The person identified above as the OWNER'S Representative
(and any designated successor or successors to such OWNER'S Representative)
shall be the OWNER'S exclusive representative for all purposes hereof, and
the AGENT shall have the absolute right to rely upon all decisions,
approvals and directions of such person. Such representative shall have
the right to designate a successor representative by written notice to the
AGENT.
6.3 The AGENT shall be responsible for notifying OWNER in the event
it receives notice that any building on the Premises or any equipment
therein does not comply with the requirements of any statute, ordinance,
law or regulation of any governmental body or of any public authority or
official thereof having or claiming to have jurisdiction thereover. AGENT
shall promptly forward to the OWNER any complaints, warnings, notices or
summonses received by it relating to such matters. The OWNER represents
that to the best of its knowledge the Premises and such equipment comply
with all such requirements and authorizes the AGENT to disclose the OWNER
of the Premises to any such officials and agrees to indemnify, protect,
defend, save and hold the AGENT and the other Indemnified Parties harmless
of and from any and all Losses which may be imposed on them or any of them
by reason of the failure of OWNER to correct any present or future
violation or alleged violation of any and all present or future laws,
ordinances, statutes, or regulations of any public authority or official
thereof, having or claiming to have jurisdiction thereover, of which it has
actual notice.
6.4 In the event it is alleged or charged that any building on the
Premises or any equipment therein or any act or failure to act by the OWNER
with respect to the
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Premises or the sale, rental, or other disposition thereof fails to comply
with, or is in violation of, any of the requirements of any constitutional
provision, statute, ordinance, law, or regulation of any governmental body
or any order or ruling of any public authority or official thereof having
or claiming to have jurisdiction thereover, and the AGENT, in its sole and
absolute discretion, considers that the action or position of the OWNER,
with respect thereto may result in damage or liability to the AGENT, the
AGENT shall have the right to cancel this Agreement at any time by written
notice to the OWNER of its election so to do, which cancellation shall be
effective upon the service of such notice. Such notice may be served
personally or by registered mail, on or to the person named to receive
the AGENT'S monthly statement at the address designated for such person
as provided in Paragraph 6.1 above, and if served by mail shall be deemed
to have been served when deposited in the mails. Such cancellation shall
not release the indemnities of the OWNER set forth in this Agreement,
including, but not limited to, those set forth in Paragraphs 1, 3.2, 4.1,
4.2 and 6.3 above and shall not terminate any liability or obligation of
the OWNER to the AGENT for any payment, reimbursement, or other sum of
money then due and payable to the AGENT hereunder.
6.5 All personnel expenses, including but not limited to, wages,
salaries, insurance, fringe benefits, employment related taxes and other
governmental charges, shall be charges incurred in connection with the
Premises for purposes of Paragraph 3.4 hereof, to the extent such expenses
are apportioned by the AGENT to services rendered for the benefit of the
Premises. The number and classification of employees serving the Premises
shall be as determined by the AGENT to be appropriate for the proper
15
operation of the Premises; provided that the OWNER may request changes in
the number and/or classifications of employees, and the AGENT shall make
such changes unless in its judgment the resulting level of operation and/or
maintenance of the Premises will be inadequate. The AGENT shall honor any
collective bargaining contract covering employment at the Premises which is
in effect upon the date of execution of this Agreement; provided that the
AGENT shall not assume or otherwise become a party to such contract for any
purpose whatsoever and all personnel subject to such contract shall be
considered the employees of the Premises and not the AGENT.
7. The OWNER shall pay or reimburse the AGENT for any sums of money due
it under this Agreement for services and advances prior to termination of this
Agreement. All provisions of this Agreement that require the OWNER to have
insured, or to protect, defend, save, hold and indemnify or to reimburse the
AGENT shall survive any expiration or termination of this Agreement and, if
AGENT is or becomes involved in any claim, proceeding or litigation by reason of
having been the AGENT of the OWNER, such provisions shall apply as if this
Agreement were still in effect. The parties understand and agree that the AGENT
may withhold funds for sixty (60) days after the end of the month in which this
Agreement is terminated to pay bills previously incurred but not yet invoiced
and to close accounts. Should the funds withheld be insufficient to meet the
obligation of the AGENT to pay bills previously incurred, the OWNER will upon
demand advance sufficient funds to the AGENT to ensure fulfillment of AGENT'S
obligation to do so, within ten (10) days of receipt of notice and an
itemization of such unpaid bills.
8. Nothing contained herein shall be construed as creating any rights in
third parties who are not the parties to this Agreement, nor shall anything
contained herein be
16
construed to impose any liability upon OWNER or AGENT for the performance by
the OWNER or AGENT under any other agreement they have entered into or may in
the future enter into, without the express written consent of the other having
been obtained. Nothing contained in this Agreement shall be deemed or construed
to create a partnership or joint venture between OWNER and AGENT or to cause
either party to be responsible in any way for the debts or obligations of the
other or any other party (but nothing contained herein shall affect AGENT'S
responsibility to transmit payments for the account of OWNER as provided
herein), it being the intention of the parties that the only relationship
hereunder is that of AGENT and principal.
9. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited or invalid under such
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement. This Agreement, its validity,
performance and enforcement shall be construed in accordance with, and governed
by, the laws of the State in which the Premises are located.
10. This Agreement shall be binding upon the successors and assigns of the
AGENT and the heirs, administrators, executors, successors, and assignees of the
OWNER. This Agreement contains the entire Agreement of the parties relating to
the subject matter hereof, and there are no understandings, representations or
undertakings by either party except as herein contained. This Agreement may be
modified solely by a written agreement executed by both parties hereto.
17
11. If any party hereto defaults under the terms or conditions of this
Agreement, the defaulting party shall pay the non-defaulting party's court costs
and attorney's fees incurred in the enforcement of any provision of this
Agreement.
12. The failure of either party to this Agreement to, in any one or more
instances, insist upon the performance of any of the terms, covenants or
conditions of this Agreement, or to exercise any rights or privileges conferred
in this Agreement, shall not be construed as thereafter waiving any such terms,
covenants, conditions, rights or privileges, but the same shall continue in full
force and effect as if no such forbearance or waiver had occurred.
13. This Agreement is deemed to have been drafted jointly by the parties,
and any uncertainty or ambiguity shall not be construed for or against either
party as an attribution of drafting to either party.
14. All notices given under this Agreement shall be sent by certified
mail, return receipt requested, sent by facsimile transmission, or hand
delivered at:
FOR OWNER: FOR AGENT:
Inland Retail Real Estate Inland Southeast Property Management Corp.
Limited Partnership ATTN: Xxxxx Xxxxxxx, President
ATTN: Xxxxxxx X. Xxxxxx 0000 Xxxxxxx Xxxxx
0000 Xxxxxxxxxxx Xxxx Xxxxxxxx, Xxxxxxx 00000
Xxx Xxxxx, Xxxxxxxx 00000 Fax: 941/000-0000
Fax: 630/000-0000
18
IN WITNESS WHEREOF, the parties hereto have affixed or caused to be affixed
their respective signatures this ____ day of _______________, 199_.
AGENT: OWNER:
INLAND SOUTHEAST PROPERTY INLAND RETAIL REAL ESTATE
MANAGEMENT CORP. LIMITED PARTNERSHIP
By: BY: INLAND RETAIL REAL ESTATE TRUST,
----------------------------- INC., its general partner
----------------------------- By:
--------------------------------
Its:
----------------------------
19
EXHIBIT "A"
Legal Description for:
EXHIBIT "B"
COMMERCIAL PROPERTY MANAGEMENT SYSTEM
BUDGET VARIANCE REPORT
SAMPLE REPORT
MONTH-TO-DATE YEAR-TO-DATE
------------- ------------
MONTH-TO-DATE:
YEAR TO DATE: ACTUAL ($) BUDGET ($) VARIANCE ($) VAR. (%) ACTUAL ($) BUDGET ($) VARIANCE ($) VAR. (%)
---------- ---------- ------------ -------- ---------- ---------- ------------ --------
INCOME
------
------
1001 Gross Unit Rent
1002 Add'l Unit Rent
TOTAL GROSS POSSIBLE
1011 Vacancy Loss
1012 Marketing Concessions
1013 Offices/Models/Shop
Unpaid
NET RENT COLLECTIONS
1024/1025 Damages & Late Charge
1031 Vending Income
1033/1035 Miscellaneous Income
NET OPERATIONAL INCOME
EXPENSE
-------
-------
1400 Repair & Maintenance
1500 Salaries
1600 Health & Welfare Payments
2100 Security Deposit - Interest
2200 Fees
2300 Capital Expenditure -
Appliance
2400 Capital Expenditure -
Common
2500 Capital Expenditure -
Carpeting
2600 Landscaping & Snow Removal
2700 Painting & Decorating
MONTH-TO-DATE YEAR-TO-DATE
------------- ------------
MONTH-TO-DATE:
YEAR TO DATE: ACTUAL ($) BUDGET ($) VARIANCE ($) VAR. (%) ACTUAL ($) BUDGET ($) VARIANCE ($) VAR. (%)
---------- ---------- ------------ -------- ---------- ---------- ------------ --------
2800 Marketing
2900 Elevators
3000 Rentals
3100 Pool
3200 Scavenger
3300 Telephone/Answering
Service
3500 Supplies
3600 Electricity
3700 Water
3800 Gas, Fuel & Oil
3900 Exterminating
REPORT TOTAL
4000 Miscellaneous Expenses
4100 Management Fee
TOTAL OPERATIONAL EXPENSES
1200 Insurance
1300 Real Estate Tax
TOTAL EXPENSE
NET BEFORE DEBT
1100 Debt Service
3400 Ground Rent
NET BEFORE S/D ACTIVITY
1023 Security Deposit Income
1701 Security Deposit - Rent
1801 Security Deposit - Damage
1901 Security Deposit - Returns
2001 Security Deposit - Transfers
2
MONTH-TO-DATE YEAR-TO-DATE
------------- ------------
MONTH-TO-DATE:
YEAR TO DATE: ACTUAL ($) BUDGET ($) VARIANCE ($) VAR. (%) ACTUAL ($) BUDGET ($) VARIANCE ($) VAR. (%)
---------- ---------- ------------ -------- ---------- ---------- ------------ --------
NET SECURITY DEPOSITS
**CASH FLOW AFTER S/D ACTIVITY
1030 Upgrade Income
4500 Upgrade Expenses
4200 Pship Level Debt
1060 Owner Advances
5001 Owner Distributions
1032/1036 Non-Operating Income
4600 Non-Operating Expense
NET, NET CASH FLOW
REPORT TOTAL
END OF REPORT
3
COMMERCIAL PROPERTY MANAGEMENT SYSTEM
CONSOLIDATED CASH REPORT
SAMPLE REPORT
% OF YEAR TO DATE % OF
ACCT # ACCOUNT DESCRIPTION ACTUAL GROSS POS. PER UNIT ACTUAL GROSS POS. PER UNIT
------ ------------------- ------ ---------- -------- ------------ ---------- --------
INCOME
------
------
1001 Gross Unit Rent
1002 Add'l Unit Rent
-----------------------
TOTAL GROSS POSSIBLE
-----------------------
1011 Vacancy Loss
1012 Marketing Concessions
1013 Offices/Models/Shop
Unpaid
NET RENT COLLECTIONS
1024/1025 Damages & Late Charge
1031 Vending Income
1033/1035 Miscellaneous Income
NET OPERATIONAL INCOME
----------------------
----------------------
EXPENSE
-------
-------
1400 Repair & Maintenance
1500 Salaries
1600 Health & Welfare Payments
2100 Security Deposit -
Interest
4
% OF YEAR TO DATE % OF
ACCT # ACCOUNT DESCRIPTION ACTUAL GROSS POS. PER UNIT ACTUAL GROSS POS. PER UNIT
------ ------------------- ------ ---------- -------- ------------ ---------- --------
2200 Fees
2300 Capital Expenditure -
Appliances
2400 Capital Expenditure -
Common
2500 Capital Expenditure -
Carpeting
2600 Landscaping & Snow Removal
2700 Painting & Decorating
2800 Marketing
2900 Elevators
3000 Rentals
3100 Pool
3200 Scavenger
3300 Telephone/Answering
Service
3500 Supplies
3600 Electricity
3700 Water
3800 Gas, Fuel & Oil
3900 Exterminating
4000 Miscellaneous Expense
4100 Management Fee
----------------------------
TOTAL OPERATIONAL EXPENSES
----------------------------
----------------------------
1200 Insurance
1300 Real Estate Tax
TOTAL EXPENSE
----------------------------
----------------------------
NET BEFORE DEBT
1100 Debt Service
3400 Ground Rent
---------------------------
5
% OF YEAR TO DATE % OF
ACCT # ACCOUNT DESCRIPTION ACTUAL GROSS POS. PER UNIT ACTUAL GROSS POS. PER UNIT
------ ------------------- ------ ---------- -------- ------------ ---------- --------
NET BEFORE S/D ACTIVITY
1023 Security Deposit Income
1701 Security Deposit - Rent
1801 Security Deposit - Damage
1901 Security Deposit - Returns
2001 Security Deposit -
Transfers
NET SECURITY DEPOSITS
**CASH FLOW AFTER S/D ACTIVITY
------------------------------
------------------------------
1030 Upgrade Income
4500 Upgrade Expenses
4200 Pship Level Debt
1060 Owner Advances
5001 Owner Distributions
1032 & 1036 Non-operating Income
4600 Non-operating Expense
NET, NET CASH FLOW
-------------------------
-------------------------
REPORT TOTAL
END OF REPORT
6
