EXHIBIT 10.6
MANAGEMENT AGREEMENT
(Quarry Lake Business Center, Austin, Texas)
THIS MANAGEMENT AGREEMENT (this "Agreement") is made and entered into
as of the 8 day of October, 1999 by and between REIT MANAGEMENT & RESEARCH,
INC., a Delaware corporation ("Managing Agent"), and QUARRY LAKE PROPERTIES
TRUST, a Maryland real estate investment trust ("Owner").
WHEREAS, Owner is the owner of certain premises located at 0000 Xxxxx
Xxxxxx Xxxxxxx in Austin, Texas, upon which are located a certain office
building and parking areas and facilities commonly known as Quarry Lake Business
Center (the "Managed Premises"); and
WHEREAS, Owner desires to retain Managing Agent, and Managing Agent is
willing to serve, as managing agent with respect to the Managed Premises, all
upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the agreements
herein contained, Owner and Managing Agent hereby agree as follows
1. Employment. Subject to the terms and conditions hereinafter set
forth, Owner hereby employs Managing Agent with respect to the Managed Premises.
2. Duties.
(a) Managing Agent hereby accepts such employment as managing
agent and agrees to devote such time, attention and effort as may be
appropriate to operate and manage the Managed Premises in a diligent,
orderly and efficient manner. Any or all services may be performed or
goods purchased by Managing Agent under arrangements jointly with or
for other properties owned or managed by Managing Agent and the costs
shall be reasonably apportioned. Managing Agent may employ personnel
who are assigned to work exclusively at the Building or partly at the
Building and other buildings owned and/or managed by Managing Agent.
The properly apportioned costs of such personnel shall be reimbursed by
Owner, in addition to the Fee.
(b) Without limitation, Managing Agent agrees to perform the
following specific duties:
(i) To seek tenants for the Managed Premises in
accordance with the rental schedule established by Owner and
to negotiate leases including renewals thereof and to lease in
Owner's name space on a lease form approved by the Owner, only
to tenants, at rentals, and for periods of occupancy all as
are approved in each case by Owner. To employ appropriate
means in order that the availability of rental space
is made known to potential tenants, provided, however, that
such means shall not include the employment of brokers unless
otherwise agreed by Owner. The legal expenses of negotiating
such leases and leasing such space shall be approved and paid
by Owner.
(ii) To collect all rents and other income from the
Managed Premises and to give receipts therefor, both on behalf
of Owner, and deposit such funds in such banks as are named,
from time to time, by Owner, in agency accounts for and under
the name of Owner. Managing Agent shall be empowered to sign
disbursement checks on these accounts.
(iii) To make contracts for and to supervise any
repairs and/or alterations to the Managed Premises, including
tenant improvements and decoration of rental space, as may be
approved by Owner.
(iv) For the Owner's account and at its expense, to
hire, supervise and discharge employees as required for the
efficient operation and maintenance of the Managed Premises.
(v) To obtain, at Owner's expense, appropriate
insurance for the Managed Premises protecting Owner and
Managing Agent while acting on behalf of Owner against all
normally insurable risks relating to the Managed Premises and
complying with the requirements of Owner's mortgagee, if any,
and, upon approval thereof, to cause the same to be provided
and maintained by all tenants with respect to the Managed
Premises to the extent required by the terms of such tenants'
leases.
(vi) To promptly notify Owner and Owner's insurance
carriers, as required by the applicable policies, of any
casualty or injury to person or property at the Managed
Premises, and complete customary reports in connection
therewith.
(vii) To procure seasonably all supplies and other
materials necessary for the proper operation of the Managed
Premises, at Owner's expense.
(viii) To pay promptly from rental receipts, other
income derived from the Managed Premises, or other monies made
available by Owner for such purpose, all costs incurred in the
operation of the Managed Premises which are expenses of Owner
hereunder, including wages or other payments for services
rendered, invoices for supplies or other items furnished in
relation to the Managed Premises, and pay over forthwith the
balance of such rental receipts, income and monies to Owner or
as Owner shall from time to time direct. (In the event that
the sum of the expenses to operate and the compensation due
the Managing Agent exceed gross receipts in any month and no
excess funds from prior months are available for payment of
such
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excess, Owner shall pay promptly the amount of the deficiency
thereof to Managing Agent upon receipt of statements
therefor.)
(ix) To advise Owner promptly of any material
developments in the operation of the Managed Premises that
might affect the profitable operation of the Managed Premises.
(x) To establish, in Owner's name and with Owner's
approval, reasonable rules and regulations for tenants of the
Managed Premises;
(xi) At the direction of Owner and with counsel
selected by Owner, to institute or defend, as the case may be,
any and all legal actions or proceedings (in the name of Owner
if necessary) relating to operation of the Managed Premises;
(xii) To maintain the books and records of Owner
reflecting the management and operation of the Managed
Premises, making available for reasonable inspection and
examination by Owner or its representatives, all books,
records and other financial data relating to the Managed
Premises.
(xiii) To prepare and deliver seasonably to tenants
of the Managed Premises such statements of expenses or other
information as shall be required on the landlord's part to be
delivered to such tenants for computation of rent, additional
rent, or any other reason.
(xiv) To aid, assist and cooperate with Owner in
matters relating to taxes and assessments and insurance loss
adjustments and notify the Owner of any tax increase or
special assessments relating to the Managed Premises.
(xv) To provide such emergency services as may be
required for the efficient management and operation of the
Managed Premises on a 24-hour basis.
(xvi) To enter into contracts for utilities
(including, without limitation, water, fuel, electricity and
telephone) and for building services (including, without
limitation, cleaning of windows, common areas and tenant
space, ash, rubbish and garbage hauling, snow plowing,
landscaping, carpet cleaning and vermin extermination), and
for other services as are appropriate to first class office,
retail and medical office space (as applicable).
(xvii) To seek the lowest competitive price
commensurate with desired quality for all items purchased or
services contracted by it under this Agreement.
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(xviii) To take such action generally consistent with
the provisions of this Agreement, as Owner might with respect
to the Managed Premises if personally present.
3. Authority. Owner gives to Managing Agent the authority and powers to
perform the foregoing duties on behalf of Owner subject, however, to Owner's
approval as specified. Owner further authorizes Managing Agent to incur such
reasonable expenses, specifically contemplated in Section 2, on behalf of Owner
as are necessary in the performance of those duties.
4. Special Authority of Agent. In addition to, and not in limitation
of, the duties and authority of Managing Agent contained herein, Managing Agent
shall perform the following duties, but only with Owner's prior approval in each
case:
(a) Terminate tenancies and sign and serve in the name of
Owner such notices therefor as may be required for the proper
management of the Managed Premises.
(b) With counsel selected by Owner, and at Owner's expense,
institute and prosecute actions to evict tenants and recover possession
of rental space, and recover rents and other sums due; and when
expedient, settle, compromise and release such actions or suits or
reinstate such tenancies.
5. Compensation.
(a) In consideration of the services to be rendered by the
Managing Agent hereunder, the Owner agrees to pay and the Managing
Agent agrees to accept as its sole compensation (i) a management fee
(the "Fee") equal to three percent (3%) of the gross collected rents
actually received by Owner from the Managed Premises, such gross rents
to include all fixed rents, percentage rents, additional rents,
operating expense and tax escalations, and any other charges paid to
Owner in connection with occupancy of the Managed Premises, but
excluding any amounts collected from tenants to reimburse Owner for the
cost of capital improvements or for expenses incurred in curing any
tenant default or in enforcing any remedy against any tenant; and (ii)
a construction supervision fee (the "Construction Fee") in connection
with all interior and exterior construction renovation or repair
activities at the Managed Premises, including, without limitation, all
tenant and capital improvements in, on or about the Managed Premises,
undertaken during the term of this Agreement, other than ordinary
maintenance and repair, equal to five percent (5%) of the cost of such
construction which shall include the costs of all related professional
services and the cost of general conditions.
(b) The Fee shall be due and payable monthly, in arrears based
on a reasonable annual estimate or budget with an annual reconciliation
within thirty (30) days after the end
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of such calendar year. The Construction Fee shall be due and payable
periodically, as agreed by Managing Agent and Owner, based on actual
costs incurred to date.
(c) Notwithstanding anything herein to the contrary, Owner
shall reimburse Managing Agent for reasonable travel explenses incurred
when traveling to and from the Managed Premises while performing its
duties in accordance with this Agreement; provided, however, that,
reasonable travel expenses shall not include expenses incurred for
travel to and from the Managed Premises by personnel assigned to work
exclusively at the Managed Premises.
(d) Managing Agent shall also receive the amount of any lump
sum reimburseables paid by tenants of the Managed Premises to the
extent amounts paid exceed costs incurred by Owner for work performed
with respect thereto.
(e) Managing Agent shall be entitled to no other additional
compensation, whether in the form of commission, bonus or the like for
its services under this Agreement. Except as otherwise specifically
provided herein with respect to payment by Owner of legal fees,
accounting fees, salaries, wages, fees and charges of parties hired by
the Managing Agent on behalf of Owner to perform operating and
maintenance functions in the Managed Premises, and the like, if
Managing Agent hires third parties to perform services required to be
performed hereunder by Managing Agent without additional charge to
Owner, Managing Agent shall (except to the extent the same are
reasonably attributable to an emergency at the Managed Premises) be
responsible for the charges of such third parties.
6. Contracts. Managing Agent shall not, without the prior consent of
Owner, enter into any contracts on behalf of Owner which extend beyond the then
current term of this Agreement.
7. Term of Agreement. The term of this Agreement shall begin on the
date hereof and, unless sooner terminated as herein provided, shall end on that
date which is thirty (30) days following written notice of termination given by
either Owner or Managing Agent to the other.
8. Termination or Expiration. Upon termination or expiration of this
Agreement for any reason whatsoever, Managing Agent shall promptly turn over to
Owner all books, papers, funds, records, keys and other items relating to the
management and operation of the Managed Premises, including, without limitation,
all leases in the possession of the Managing Agent and shall render to Owner a
final accounting through the date of termination.
9. Assignment of Rights and Obligations.
(a) Without Owner's prior written consent, Managing Agent
shall not sell, transfer, assign or otherwise dispose of or mortgage,
hypothecate or otherwise encumber or permit or suffer any encumbrance
of all or any part of its rights and obligations hereunder, and any
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transfer, encumbrance or other disposition of an interest herein made
or attempted in violation of this paragraph shall be void and
ineffective, and shall not be binding upon Owner.
(b) Owner, without Managing Agent's consent, may assign its
rights and obligations hereunder to any mortgagee with respect to, or
successor owner of, the Managed Premises, but not otherwise.
(c) Consistent with the foregoing paragraphs (a) and (b), the
terms "Owner" and "Managing Agent" as used in this Agreement shall mean
the original parties hereto and their respective mortgagees,
successors, assigns, heirs and legal representatives.
10. Termination for Cause. Either party (the "Non- Defaulting Party")
may terminate this Agreement at any time in the event that the other party
("Defaulting Party") shall fail to keep, observe or perform any covenant,
agreement, term or provision of this Agreement to be kept, observed or performed
by such Defaulting Party, and such default shall continue for a period of seven
(7) days after written notice thereof from the Non-Defaulting Party, or if such
default is not of a monetary nature and cannot be cured within seven (7) days
then such additional period as shall be reasonable provided that Defaulting
Party is proceeding diligently to cure such default.
11. Termination for Insolvency. Either party may terminate this
Agreement by giving written notice to the other party if the other party:
(a) files a voluntary petition in bankruptcy or is adjudicated
a bankrupt or insolvent or files any petition or answer seeking
arrangement, composition, readjustment, or similar relief under the
present or any future bankruptcy act or any other present or future
applicable federal or state law relative to bankruptcy, insolvency or
other relief for debtors; or
(b) consents to an involuntary petition seeking arrangement,
composition, readjustment, liquidation or similar relief under the
present of any future federal bankruptcy act or any other federal or
state law relative to bankruptcy, insolvency or other relief for
debtors or fails to vacate within sixty (60) days from the date of
entry thereof any order approving such involuntary petition; or
(c) makes an assignment for the benefit of creditors or takes
any other similar action for the protection or benefit of creditors.
12. Fidelity Bond. Owner, at Owner's expense, may require that
employees of Managing Agent who handle or are responsible for Owner's money to
be bonded by a fidelity bond in an amount sufficient in Owner's determination to
cover any loss which may occur in the management and operation of the Managed
Premises.
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13. Indemnification.
(a) Owner agrees to defend, indemnify and hold harmless
Managing Agent from and against all costs, claims, expenses and
liabilities (including reasonable attorneys' fees) arising out of
Managing Agent's performance of its duties in accordance with this
Agreement including, without limitation, injury or damage to persons or
property occurring in, on or about the Managed Premises and violations
or alleged violations of any law, ordinance, regulation or order of any
governmental authority regarding the Managed Premises except any
injury, damage or violation resulting from Managing Agent's default
hereunder, or from Managing Agent's fraud, gross negligence or willful
misconduct in the performance of its duties hereunder.
(b) Owner agrees that required insurance shall include, at
Owner's expense, public liability and workmen's compensation insurance
upon the following terms and conditions:
(i) policies shall be so written as to protect the
Agent in the manner and to the same extent as the Owner.
(ii) Workmen's compensation policies shall be written
to conform to Massachusetts statutory coverage requirements,
and shall include employee liability insurance with limits of
not less than One Hundred Thousand Dollars ($100,000).
(iii) The public liability insurance shall be written
in limits of not less than One Million Dollars ($1,000,000)
per occurrence for bodily injury and Five Hundred Thousand
($500,000) Dollars per occurrence for property damage.
(iv) Such public liability insurance shall include
the standard extensions of liability coverage as may be
mutually agreed upon from time to time, and shall name both
parties and their respective employees as additional insureds.
14. Notices. Whenever notice is to be sent pursuant to this Agreement
to either party to this Agreement, it is expressly understood that same shall be
sent postage prepaid, certified mail, return receipt requested to either party
at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to any such address that
either party may hereinafter designate.
15. Limitation of Liability. No partner of Owner or Managing Agent
shall be personally liable hereunder, all such liability being limited in the
case of Owner to the interest of Owner in the Managed Premises and in the case
of Managing Agent, to its interest hereunder.
16. Modification of Agreement. This Agreement may not be modified,
altered or amended in manner except by an amendment in writing, duly executed by
the parties hereto.
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17. Independent Contractor. This Agreement is not one of general agency
by Managing Agent for Owner, but one with Managing Agent engaged as an
independent contractor. Nothing in this Agreement is intended to create a joint
venture, partnership, tenancy-in-common or other similar relationship between
Owner and Managing Agent for any purposes whatsoever.
18. Law Governing. This Agreement shall be governed by and in
accordance with the laws of The Commonwealth of Massachusetts.
19. Nature of Owner's Obligations. THE DECLARATION OF TRUST
ESTABLISHING OWNER, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME "QUARRY LAKE
PROPERTIES TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS
TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER,
SHAREHOLDER, EMPLOYEE OR AGENT OF OWNER SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, OWNER. MANAGING
AGENT AND ALL OTHER PERSONS DEALING WITH OWNER, IN ANY WAY, SHALL LOOK ONLY TO
THE ASSETS OF OWNER FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION, AND NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF OWNER
SHALL HAVE ANY LIABILITY HEREUNDER OR OTHERWISE FOR ANY ACT OR OBLIGATION OF
OWNER.
Executed as a sealed instrument.
MANAGING AGENT:
REIT MANAGEMENT & RESEARCH, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
OWNER:
QUARRY LAKE PROPERTIES TRUST
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
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S-10
SCHEDULE TO EXHIBIT 10.6
Pursuant to Instruction 2 to Item 601 of Regulation S-K, the following
Management Agreements, which are substantially identical in all material
respects to the Management Agreement for property located at 0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxx, Xxxxx, are omitted. The following list sets forth the material
differences in the property name, street address, date of the Management
Agreement, and owner from the Management Agreement filed herewith:
Street Address of
Property Name Property Date Owner
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Xxxxxxxx Xxxxxxxxx Xxxxx 000 Xxx Xxxxxxx Xxxxxx December 1, 1999 Rosedale Properties Limited
Austin Texas Liability Company
Park at San Antonio Unit 1 at 2685 Long Lake August 18, 1999 Park San Antonio Properties
Road, Unit 2 at 0000 Xxxx Xxxxx
Xxxx Xxxx, Xxxx 0 at 0000
Xxxx Xxxx Xxxx, Xxxx 0 at
0000 Xxxx Xxxx Xxxx, and
Xxxx 0 xx 0000 Xxxx Xxxx
Xxxx in Rosedale, Minnesoata
In addition, the Management Agreement for the Rosedale Corporate Plaza does not
have a Section 19.
In addition, the Management Agreement for the Park at San Antonio Company does
not have a Section 2(c).
