MANAGEMENT AGREEMENT
This Management Agreement, dated as of March 1, 1998 is entered into by and
between Watson&Taylor Management, Inc., a Texas corporation ("WTMI"), and
Prudential-Bache/Watson&Taylor, Ltd. - 2, a Texas limited partnership (the
"Partnership").
W I T N E S S E T H :
Whereas, the Partnership owns a combination retail, office-warehouse, office,
and self-service storage facility located in Capitol Heights, Prince George's
County, Maryland (the "Property"); and
Whereas, it is the intention of the Partnership that the Property be rented on
a space-by-space basis to corporations, partnerships, individuals, or other
entities for use as retail, office-warehouse, office, and storage facilities
for personal and business use; and
Whereas, WTMI is in the business of managing other facilities both similar and
dissimilar to the Property; and
Whereas, the Partnership desires that the Property be managed efficiently; and
Whereas, the Partnership desires to employ WTMI to manage the Property, and
WTMI desires to accept said employment, all in accordance with the terms of
this Agreement as hereinafter set forth;
Now, Therefore, in consideration for the mutual covenants herein contained, the
parties hereby agree as follows:
1. Employment.
(a) The Partnership hereby employs WTMI and WTMI hereby accepts such employment
as manager of the Property (subject to termination pursuant to Section 5
below), upon the terms and conditions hereinafter set forth.
(b) The Partnership acknowledges that WTMI is in the business of managing
mini-warehouse, office/showroom warehouse, and other properties both for its
own account and for others. It is hereby expressly agreed that WTMI and its
affiliates may continue to engage in such activities, may manage additional
facilities (whether or not such other facilities may be in direct or indirect
competition with the Partnership), and may in the future engage in other
business which may compete directly or indirectly with the Partnership.
(c) In the performance of its duties under this Agreement, WTMI shall occupy
the position of an independent contractor with respect to the Partnership.
Nothing contained herein shall be construed as making the parties hereto
partners or joint venturers, nor, except as expressly otherwise provided for
herein, construed as making WTMI an agent or employee of the Partnership.
2. Duties and Authority of WTMI.
(a) General Duties and Authority. Subject only to the restrictions and
limitations
provided in paragraphs (n) and (o) of this Section 2 and the right
of the Partnership to terminate this Agreement as provided in Section 5 hereof,
WTMI shall have the sole and exclusive authority to fully and completely
supervise the Property and supervise and direct the business and affairs
associated or related to the daily operation thereof and to that end to cause
or direct the Partnership to execute such documents or instruments and hire or
discharge such employees as may be deemed reasonably necessary or advisable.
Such duties and authority shall include those set forth as follows which are
not in limitation of the foregoing.
(b) Renting of Property. WTMI shall establish policies and procedures for
directing the marketing activities of personnel engaged by or on behalf of the
Partnership. WTMI shall have the sole discretion, which discretion shall be
exercised in good faith, to establish the terms and conditions of occupancy by
the tenants of the Property, and WTMI is hereby authorized to direct and
control the Partnership employees, or those employed on behalf of the
Partnership, in entering into rental agreements on behalf of, in the name of,
and for the account of the Partnership with such tenants and in collecting
rent from such tenants. WTMI shall cause the Partnership to advertise in such
media and to the extent that it deems necessary and appropriate.
(c) Repair, Maintenance, and Improvements. WTMI shall make and execute, or
supervise and have control over the making and executing of all decisions
concerning the acquisition of furniture, fixtures, equipment, and supplies for
the Property, and the purchase, lease, or other acquisition of the same on
behalf of, in the name of, and for the account of the Partnership. WTMI shall
make and execute, or supervise and have control over the making and executing,
of all decisions concerning the maintenance, repair, and landscaping of the
Property; and shall negotiate and contract for and supervise the installation
of all capital improvements related to the Property. However, all capital
improvements shall be subject to Partnership Approval.
(d) Personnel. WTMI, or personnel engaged on behalf of the Partnership acting
pursuant to the direction of WTMI, shall select all vendors, suppliers,
contractors, subcontractors, and employees with respect to the Property and
shall hire, discharge, and supervise all labor and employees required for the
operation (including billing and collections) and maintenance of the Property,
including attorneys, accountants, consultants, and clerical employees; all such
acts shall be on behalf of, in the name of, and for the account of the
Partnership and any employees so hired shall be carried on the payroll of
either WTMI or a corporation organized to employ such personnel. Employees
shall be limited to on-site resident managers and relief managers unless
agreed otherwise. All personnel employed on behalf of the Partnership shall
be supervised by WTMI
(e) Agreements. WTMI shall negotiate and execute on behalf of and in the name
of the Partnership such agreements which WTMI deems necessary or advisable for
the furnishing of utilities, services, concessions, and supplies, for the
maintenance, repair, and operation of the Property and such other agreements
which may benefit the Property or be incidental to the matters for which WTMI
is responsible hereunder. All contracts shall be limited to a period of one
year and shall be cancelable upon 30 days notice without penalty.
(f) Other Decisions. WTMI shall make all policy decisions, and shall have
control over the making of all of the more routine decisions, in connection
with the daily operation of the Property.
(g) Regulations and Permits. WTMI shall use its best efforts to cause all
things to be done, on behalf of, in the name of, and for the account of the
Partnership, on the Property necessary to comply with any statute, ordinance,
law, regulation, or order of any governmental or regulatory body having
jurisdiction over the Property, respecting the use of the Property or the
maintenance and operation thereof, and with all orders and requirements of the
local fire ▇▇▇▇▇▇▇▇ or any other body which may hereafter exercise similar
functions. WTMI shall cause the Partnership to apply for and attempt to
obtain and maintain, on behalf of, in the name of, and for the account of the
Partnership, all licenses and permits required or advisable (in the sole
judgement of WTMI) in connection with the management and operation of the
Property.
(h) Accounting. WTMI shall establish, supervise, direct, and maintain the
operation of an accounting system and shall cause to be prepared and delivered
to the Partnership, financial statements as follows:
(i) On or before fifteen (15) days after the close of each month, a statement
of operations showing the results of operation of the Property for the
preceding month and of the fiscal year-to-date.
(ii) On or before thirty (30) days after the close of the fiscal year, a
balance sheet and related statement of operations showing the results of the
operation of the Property during said fiscal year.
(i) Deposits and Disbursements. WTMI shall establish bank accounts in the name
of the Partnership and shall deposit or cause personnel engaged on behalf of
the Partnership to deposit therein all receipts and monies arising from the
operation of the Property or otherwise received for and on behalf of the
Partnership. WTMI shall disburse Partnership funds from said accounts on
behalf and in the name of the Partnership in such amounts and at such times as
disbursement of such revenues for payment of payroll, or employee leasing
expense, and other obligations of the Partnership is required.
(j) Collection. WTMI shall supervise and direct personnel engaged on behalf of
the Partnership in the collection and billing of all accounts payable and due
to the Partnership with respect to the Property and shall be responsible for
establishing policies and procedures to minimize the amount of bad debts.
(k) Legal Actions. WTMI shall cause to be instituted, on behalf of, and in
the name of the Partnership any and all legal actions or proceedings WTMI
deems necessary or advisable to collect charges, rent, or other income due to
the Partnership with respect to the Property or to oust or dispossess tenants
or other persons unlawfully in possession under any lease, license, concession
agreement, or otherwise, and to collect damages for breach thereof or default
thereunder by such tenant, licensee, concessionaire, or occupant. The costs of
all such legal actions or proceedings shall be borne by the Partnership.
(l) Insurance. WTMI shall use its best efforts to assure that there is
obtained and kept in force, at the expense of the Partnership, fire,
comprehensive, liability, and other insurance policies in amounts generally
carried with respect to similar facilities.
(m) Taxes. WTMI shall disburse from Partnership funds all taxes, and
assessments properly levied on the Partnership with respect to the Property,
on behalf of, in the name of and
for the account of the Partnership. WTMI
shall use its best efforts to assure that the Partnership maintains and
implements a procedure for review by the Partnership of all amounts assessed
on the Property.
(n) Restrictions. Notwithstanding anything to the contrary set forth in this
Section 2, WTMI shall not be required to do, or cause to be done, anything for
the account of the Partnership (i) which may make WTMI liable to third parties;
(ii) which may not be commenced, undertaken, or completed because of
insufficient funds available in the accounts established pursuant to this
Section; or (iii) which may, under applicable law, constitute an impermissible
delegation of the General Partners' duties and responsibilities, including but
not limited to, the purchase or construction of capital improvements, the sale
or disposition of all or substantially all of the Partnership's assets, and
any action which may result in a change in the Partnership's primary business;
or (iv) which may not be commenced, undertaken, or completed because of acts
of God, strikes, governmental regulations or laws, acts of war, riots, or
other types of events beyond the control of WTMI whether similar or dissimilar
to the foregoing.
(o) Limitations on WTMI's Authority. Notwithstanding anything to the contrary
set forth in this Section 2, WTMI shall not, without obtaining the prior
written consent of the Partnership, (i) rent space at the Property by written
lease agreement for a term in excess of two years; or (ii) alter the buildings
or other structures of the Property in any material manner.
3. Duties of the Partnership.
The Partnership hereby agrees to cooperate with WTMI in the performance of its
duties under this Agreement and to that end, upon the request of WTMI, to
provide reasonable temporary office space for WTMI on the premises of the
Property, give WTMI access to all files, books, and records of the Partnership
relevant to the Property, and execute all documents or instruments and hire and
discharge such employees as WTMI in its sole judgement deems necessary or
advisable to enable it to fulfill its duties under this Agreement. Such
employees shall include, but not necessarily be limited to resident managers,
relief managers, and administrative personnel.
4. Compensation of WTMI.
Management Fee. Except as otherwise provided in paragraph (b) hereof, the
Partnership shall pay to WTMI as the full amount due for the services herein
provided a management fee equal to 4.5% of the "Gross Revenue" derived from or
connected with the Property. The Term "Gross Revenue" shall mean all receipts
of the Property (whether or not received by WTMI on behalf of or for the
account of the Property or Partnership) arising from the operation of the
Property, including without limitation, rental payments of leasers of space in
the Property, vending machine or concessionaire net revenues, maintenance
charges, if any, paid by the tenants of the Property in addition to basic
rent, parking fees, if any, and all money, whether or not described herein,
paid for the use of the Property. Gross Revenue shall be determined on a cash
basis. Gross Revenue shall not include security deposits collected until such
time as the security deposits or the portion thereof is forfeited and applied
to rent and other charges. The management fee for each month shall be paid
promptly after the end of such month and shall be calculated on the basis of
the Gross Revenue for such month.
5. Termination.
Upon 60 Days written notice to the other party, either party may terminate this
Agreement with or without cause. Additionally, the Partnership may terminate
this Agreement upon the Partnership's sale of the Property.
6. Indemnification.
The Partnership hereby agrees to indemnify and hold WTMI, all companies
affiliated with WTMI; all officers, directors, and employees of WTMI harmless
from any and all reasonable costs and expenses, reasonable attorney's fees,
suits, liabilities, judgments, damages, and claims in connection with the
management of the Property (including the loss of use thereof following any
damage, injury, or destruction), arising from any cause except for the
misconduct, negligence, or negligent omissions on the part of WTMI or such
other persons and entities. WTMI; all persons affiliated with WTMI; all
officers, directors and employees of WTMI; and any affiliated persons also
shall not be liable for any error of judgement or for any mistake of fact
or law, or for anything which it may do or refrain from doing hereinafter,
except in cases of willful misconduct or negligence. WTMI hereby agrees to
indemnify and hold the Partnership harmless from any and all reasonable costs
and expenses, reasonable attorney's fees, suits, liabilities, judgments,
damages, and claims in connection with the management of the Property arising
from the willful misconduct or negligence of WTMI or any of its affiliates.
7. Assignment.
Neither this Agreement nor any right hereunder shall be assignable by the
Partnership and any attempt to do so shall be void ab initio.
8. Headings.
The headings contained herein are for convenience or reference only and are
not intended to define, limit, or describe the scope or intent of any
provision of this Agreement.
9. Governing Law.
The validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties shall be governed by
the laws of the State of New York.
10. Notices.
Any notice required or permitted herein to be given in writing and shall be
deemed given when personally delivered or when placed in the United States
mails, first class postage prepaid, to the respective addresses of the parties
set forth below their signatures on the signature page hereof, or to such other
address as any party may give to the other in writing, or by facsimile.
11. Severability.
Should any term or provision hereof be deemed invalid, void, or unenforceable
either in its entirety or in a particular application, the remainder of the
Agreement shall nonetheless remain in full force and effect and, if the subject
term or provision is deemed to be invalid,
void, or unenforceable only with
respect to a particular application, such term or provision shall remain in
full force and effect with respect to all other applications.
12. Successors.
This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto and their permitted assigns and successors in
interest.
In Witness Whereof, the parties hereto have executed this Agreement as of the
date first above written.
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Management, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Prudential-Bache/▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd. - 2
By: Prudential-Bache Properties, Inc.
Managing General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
