LA 1613: MANAGEMENT AND LEASING AGREEMENT FOR LARGE OFFICE PROJECT WITH BASE MANAGEMENT, LEASING AND INCENTIVE FEES $99.95
|Management and Leasing Agreement
|Large Office Complex
|Compensation to Manager
|Base Management Fees, Incentive Management Fees, and Leasing Commissions
|Base Management Fees
|Calculated on a percentage of Project Income
|Incentive Management Fees
|Calculated on a percentage of Project Net Cash Flow and Net Capital Proceeds
|Specified in a schedule covering computation of commissions, treatment of lease renewal options and cancellation clauses, and payments to outside brokers
|Manager also receives a fee for coordinating capital improvements and tenant improvements, calculated as a percentage of the cost of such items
|Number of Single Spaced Pages
THIS PROPERTY MANAGEMENT AND LEASING AGREEMENT (the "Agreement") is made as of the ____ day of _____, 20___, by and between LARGE OFFICE PROJECT OWNER, a ________ limited liability company (hereinafter referred to as "Owner"), and PROFESSIONAL MANAGEMENT AND LEASING., a _________ limited liability company (hereinafter referred to as "Manager"), with respect to the following:
WHEREAS, Owner owns the land and improvements commonly known as ____________ located in ____________, ____________, and more particularly described on Schedule 1 attached hereto (the "Property"),
WHEREAS, Owner desires to engage Manager to manage, operate and lease the Project, and Manager desires to accept such engagement upon the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants contained herein, Owner and Manager hereby agree as follows:
ARTICLE I. EXCLUSIVE AGENCY
Owner hereby appoints Manager as the sole and exclusive leasing agent, rental agent and manager of the Project and Manager hereby accepts such appointment, upon the terms set forth herein.
ARTICLE II TERM OF AGREEMENT
The term of this Agreement (the "Term") shall commence on _____________________, and shall continue until ___________________.
This Agreement may be terminated prior to the expiration of the Term only upon the occurrence of one of the events set forth in Section 11.1 below.
ARTICLE III. ANNUAL PLAN
3.1 Annual Plan. On or before November 1 of each calendar year during the Term, Manager shall prepare and submit to Owner for its approval a proposed annual plan for the promotion, operation, leasing, repair and maintenance of the Project for each calendar year (the "Proposed Annual Plan"). For purposes of this Agreement, a "Fiscal Year" shall mean a calendar year beginning on the first day of January and ending on the last day of December. The Annual Plan for the remaining portion of Fiscal Year 20__ is attached hereto as Exhibit "A".
3.2 Each Proposed Annual Plan shall include, among other matters:
(a) an "Operating Budget" which shall set forth, among other matters, anticipated cash income and expenditures and reserve additions for such Fiscal Year;
(b) a "Capital Budget" which shall set forth, among other matters, anticipated and proposed capital expenditures for such year and the source of funds in respect thereto;
(c) a "Reimbursement Schedule" of anticipated reimbursements as contemplated by this Agreement;
(d) a "Leasing Plan" which shall include, among other matters, a statement of the space that Manager projects to be leased during such year, the projected minimum rent to be obtained for such space and the other financial provisions of such projected leases (including free-rent periods, rent abatements, contributions towards taxes and expenses and escalation provisions);
(e) a "Capital Expense Timeline" setting forth anticipated estimated capital advances by Owner to Manager;
(f) a "Contingency Reserve" estimating funds necessary to cover any reasonably anticipated capital and operating expenditures in excess of the Annual Plan;
(g) an allocation of employment of personnel among Manager (either directly or through subcontracts) and Owner; and
(h) a summary of any other significant activity Manager expects to undertake during such Fiscal Year.
3.3 Approval of Proposed Annual Plan. Within in thirty (30) days of Owner's receipt of the Proposed Annual Plan, Owner shall deliver to Manager in writing its approval or disapproval of all matters contained in the Proposed Annual Plan for the succeeding year. Any disapproval by Owner of a Proposed Annual Plan shall include a reasonably detailed explanation of the reasons for such disapproval. If Owner disapproves of any Proposed Annual Plan, Manager shall submit to Owner a revised annual plan within twenty (20) days of its receipt of Owner's written disapproval. Manager shall make a good faith effort to have such revised annual plan satisfy each of the objections set forth in Owner's written disapproval. Upon written approval of a proposed or revised annual plan by Owner, such plan shall thereafter be the "Annual Plan" for the succeeding year for the purposes of this Agreement; provided, however, that if Owner and Manager cannot agree upon an Annual Plan or certain aspects thereof prior to January 1 of the succeeding year, the Annual Plan from the prior year shall govern to the extent of such disputed items (with appropriate adjustments based on increases or decreases in the yearly Consumer Price Index as published each January by the U.S. Department of Labor, Bureau of Labor Statistics and the actual amount of expenses not within the control of Owner or Manager such as real property taxes and personal property taxes). The parties acknowledge and agree that each Annual Plan shall provide sufficient funds for Manager to operate the Project in a manner consistent with that for the operation of similar first-class office buildings in ____________, ____________.
3.4 Amendments to Annual Plan. Manager shall submit to Owner any proposed revisions in the Annual Plan, all of which shall be subject to Owner's approval. Any approved changes will be reflected in an amended Annual Plan which shall be applicable for the remainder of the applicable Fiscal Year. However, nothing in this Section 3.4 shall be construed as releasing Manager from its obligation to manage the Project in accordance with the Annual Plan.
3.5 Obligation and Authority to Implement Annual Plan. Once approved, Manager shall implement the Annual Plan, and shall be authorized without the need of further approvals to make the expenditures and incur the obligations provided for in such Annual Plan.
3.6 Performance Within Annual Plan. Manager shall use reasonable diligence and employ commercially reasonable efforts to ensure that the actual costs of maintaining and operating the Project shall not exceed the Annual Plan either in total or in any accounting category. All expenses must be charged to the proper account on either the operating budget or capital budget reflected in the Annual Plan, and no expense may be classified or reclassified for the purpose of avoiding an excess in the annual budgeted amount of an accounting category. Pursuant to Section 6.5 below, Manager shall obtain Owner's prior written consent to any expenditure which costs (i) in excess of 5% for any line item in the budgets included in the Annual Plan, or (ii) $25,000, whichever is less, and is not reasonably contemplated in the Annual Plan.
End of Excerpt
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