1
EXHIBIT 10.3
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT (this "Agreement") is made and entered into
as of the 1st day of July, 1997, by and between SUN COMMUNITIES, INC., a
Maryland corporation ("Sun"), and XXXXXXX FINANCIAL SERVICES CORPORATION, a
Michigan corporation (the "Company").
R E C I T A L S:
A. Sun's principal office is located at 00000 Xxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx Xxxxx, Xxxxxxxx, 00000 (the "Premises"). In connection with its
business operations at the Premises, Sun incurs administrative and operating
costs and expenses including those for management and employee compensation and
benefits, utilities, accounting, tax return preparation services, accounts
payable and receivable processing, information management systems, office and
Premises management, insurance, storage, purchasing and/or leasing equipment,
tools, supplies and other personal property, real and personal property taxes,
rental charges, repairs and maintenance charges and for other costs and
expenses (collectively, the "Services").
B. The Company desires to lease and share in the use of a portion of the
Premises (the "Leased Premises") from Sun and to use and share the benefits of
some of the Services (the "Shared Services") with Sun. Sun desires to lease
the Leased Premises to, and provide and share the Shared Services with, the
Company in accordance with the terms and subject to the conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereunder contained, the adequacy and receipt of which are hereby acknowledged,
the parties agree as follows:
1. THE LEASED PREMISES. The Leased Premises shall consist of such portion
of the Premises as the Company shall need and deem desirable and necessary to
conduct its business, but only to the extent such Leased Premises do not
interfere with Sun's business at the Premises, all as mutually determined and
agreed upon by the parties from time to time. The Company hereby rents from
Sun, and Sun hereby demises and leases to the Company, the Leased Premises as
mutually determined and agreed upon by the parties from time to time and in
accordance with the terms and subject to the conditions of this Agreement.
2. THE SHARED SERVICES. The Shared Services shall include such portion of
the Services as the Company shall need and deem desirable and necessary to
conduct its business, all as reasonably requested by the Company from time to
time, in accordance with the terms and subject to the conditions of this
Agreement.
3. ADMINISTRATIVE CHARGES. The Company shall reimburse Sun for its share
of Sun's costs attributable to the Leased Premises and the Shared Services
provided by Sun. The payment by the Company to Sun for the first year of this
Agreement is estimated to be and shall not exceed $75,000. After the first
year, any increase in occupancy or Shared Services or otherwise in the
amount to be paid to Sun hereunder shall require the approval of the Company's
non-employee directors. Costs incurred by the Company hereunder shall be
billed to the Company by Sun not more frequently than quarterly and shall be
payable within 15 days of billing.
4. TERM. The initial term of this Agreement shall be three (3) years from
the date hereof, and shall be automatically extended for successive one year
periods thereafter unless
2
either party gives written notice to the other party not less than sixty (60)
days prior to the end of any such initial or subsequent term of its intention
to terminate the Agreement as of the last day of such initial or subsequent
term, or unless terminated earlier by either party in accordance with
Section 5.
5. EARLY TERMINATION. In the event that the Company fails to make timely
payment to Sun for costs incurred hereunder and such failure to make payment is
not cured within twenty-five (25) business days after the date such payment is
due, Sun may terminate this Agreement by giving the Company notice of
termination which termination by Sun shall become effective ten (10) days from
the date of such notice. In the event that Sun fails to observe and perform in
any material respect any of its duties and obligations under this Agreement
which failure has material effect on the Company's business and continues
unremedied for a period of thirty (30) days after the date on which notice of
such failure shall have been given by the Company to Sun, the Company may
terminate this Agreement by giving Sun notice of termination which termination
by the Company shall become effective ten (10) days from the date of such
notice. Notwithstanding any of the foregoing to the contrary, Sun shall have
the right to terminate this Agreement (a) upon the undertaking and completion
by Sun or its successor, whether in one transaction or a series of
transactions, of (i) the sale, lease, transfer or other disposition of all or
substantially all of Sun's assets, or (iii) other significant financing or
refinancing, reorganization, recapitalization, merger, share exchange or any
other significant business combination permitted under applicable law, or (b)
upon moving Sun's main offices or business operations out of the Premises.
6. RELEASE OF LIABILITY. Each party hereby releases the other in respect
of any claim (including a claim for negligence) that it might otherwise have
against the other party for loss, damage or destruction with respect to its
property by fire or other casualty occurring during the term of this Agreement
if, and to the extent, covered under the fire insurance policy covering the
Premises or any other insurance policy carried by Sun or the Company. Sun and
the Company shall both be named insureds under any fire and extended coverage
and "all risk" insurance covering the Premises and any other insurance carried
by Sun or the Company in respect of the Premises.
7. ENTIRE AGREEMENT. This Agreement sets forth all of the covenants,
agreements, stipulations, promises, conditions and understandings between Sun
and the Company concerning the Leased Premises and the Shared Services and the
terms hereof, and there are no covenants, agreements, stipulations, promises,
conditions or understanding, either oral or written, between them other
than set forth herein.
8. CHOICE OF LAW. This Agreement is being entered into and executed in the
State of Michigan, and all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties shall be determined in
accordance with the provisions of the laws of the State of Michigan, without
regard to principles of conflicts of laws.
9. GENERAL PROVISIONS.
a) This Agreement shall bind and inure
to the benefit of the respective successors and assigns
of the parties; provided, however, that neither party
may assign this Agreement or any rights hereunder
without the prior written consent of the other, and any
prohibited assignment shall be absolutely void.
-2-
3
b) Section headings and numbers have
been set forth herein for convenience only.
c) Each provision of this Agreement
shall be severable from every other provision of this
Agreement for the purpose of determining the legal
enforceability of any specific provision.
d) This Agreement may be changed or
amended only in writing signed by the parties hereto.
e) Nothing contained in this Agreement
shall be construed to be or create a partnership or
joint venture between the parties hereto, their
respective successors or assigns.
10. NOTICES. All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be personally delivered or sent by registered or certified
mail, postage prepaid and, if mailed, shall be deemed to be received for
purposes of this Agreement five (5) business days after mailing by the sender.
Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 10, notice, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto at the following addresses:
If to Sun: Xxxx X. Xxxxxxxx
00000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
With a Copy to: Xxxxxx X. Xxxxx
Jaffe, Raitt, Heuer & Xxxxx, Professional Corporation
Xxxxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
If to the Company: Xxxxxxx X. Xxxxxxxx
00000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
With a Copy to: Xxxxx Sugar
Jaffe, Raitt, Heuer & Xxxxx, Professional Corporation
Xxxxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
-3-
4
IN WITNESS WHEREOF Sun and the Company have executed this Agreement as of
the date and year first above written.
SUN COMMUNITIES, INC., a Maryland
corporation
By:
----------------------------------------
Xxxx X. Xxxxxxxx, President
XXXXXXX FINANCIAL SERVICES CORPORATION, a
Michigan corporation
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx, President
-4-
