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Management Agreement Office Building
(Comprehensive -- Long Form)
1.01 Parties. This Agreement is made [date], between
[name], a [state] corporation having an office at [address]
(Owner), and [name], a [state] corporation having an office at
1.02. Premises. Owner is the fee owner and has sole control
over a parcel of land in [county, state], described in Exhibit A
[omitted], and all improvements located on it, which is generally
referred to as [address] (Property).
1.03. Employment as Manager. Owner agrees to employ Manager
to operate the Property as exclusive manager, and Manager agrees to
accept such employ, on the terms provided in this Agreement. Manager
shall be an independent contractor vis-a-vis Owner. No representation
will be made by either party to anyone that Manager is other than an
independent contractor. The obligations and expenses incurred by
Manager in accord with this Agreement are on behalf of and for the
account of Owner (except as this Agreement otherwise specifically
PROPERTY MANAGEMENT SERVICES AND DUTIES
a. Condition of Property. Manager shall cause the Property
to be maintained in a first-class condition at all times.
b. Expenditure Approval. Any expenditure in excess of
---------- dollars ($----------) shall be made by Manager only with the
prior written approval of Owner. However, any emergency
repairs--repairs immediately necessary for the preservation or safety of
the Property or its occupants, or required to avoid suspension of
necessary services to the Property or exposure to criminal
liability--may be made by Manager without Owner's prior written
approval. Owner shall, however, be immediately notified of such action.
2.02. Hire Personnel. Manager shall hire and supervise all
persons Manager deems necessary for proper maintenance and operation of
the Property. The expenses arising in connection with any such hiring
must, however, be in accord with the Operating Budget (as defined in
Section 4.01). All such persons shall be employees of Manager (and not
of Owner). Owner has no right to supervise or direct such employees.
All reasonable expenses of such employment (including fringe benefits)
are expenses of Manager and, to the extent provided in the Budget, shall
be reimbursed by Owner.
2.03. Renting of Premises.
a. Leasing Obligations. Manager shall use Manager's best
efforts to lease space in the Property on such terms as are agreed by
Owner [or, on such terms as are consistent with the Rent Schedule,
attached to this Agreement as Exhibit B [omitted], or as may later be
amended]. Specifically, Manager has the right and obligation to, among
i. Negotiate all leases, extensions, renewals,
licenses, or other agreements for the rental or
use of space in the Property;
ii. Execute and deliver all leases and agreements
with tenants, licensees, and concessionaires;
iii. Engage the services of any outside rental
agent or broker for customary commission fees.
Tenants will be screened for suitability in
accordance with written guidelines provided by
Owner; and if no such guidelines are furnished
to Manager, Manager may approve or reject
prospective tenants in good faith.
b. Nonpermissible Occupants. Under no circumstances shall
Manager permit any person or entity to occupy any space in the Building
without a written lease or agreement, and/or without paying any rent for
it, unless the prior consent of Owner has been obtained. Manager agrees
to notify Owner, in writing, immediately upon receiving knowledge that
any space is occupied by any person or entity that is not paying rent or
that does not have a lease or written agreement covering such space.
2.04. Rent Collection. Manager will use Manager's best
efforts to collect all rents and other charges due Owner from tenants,
licensees, and concessionaires of the Property. Manager may, with
Owner's prior written approval, commence legal proceedings for the
collection of such rents or charges and for the dispossession of
occupants of the Property.
2.05. Compliance With Law.
a. Best Efforts. Manager will use Manager's best efforts to
ensure the Property and its operation comply with all applicable laws,
orders, and regulations of governmental authorities (subject to the
expenditure restrictions contained in Section 2.01 and the provisions of
b. Notice. Each party will notify the other, in writing, of
any demand, order, or proceeding of any governmental authority regarding
the Property. Such notification is to be given within [number] days
of the party's receipt of notice of any demand, order, or proceeding.
c. Contest of Legal Requirements. Owner may stay Manager's
remedial action with respect to any demand, order, or proceeding of
governmental authorities as long as failure to comply promptly does not
expose Manager to criminal liability. Owner may stay such action by
promptly commencing legal process contesting any such demand, order, or
proceeding and promptly notifying Manager of Owner's intent to contest.
d. Compliance Procedures. Manager may prepare and execute
all applications, forms, and reports required by any governmental
authority. A copy of all such items shall be promptly sent to Owner.
If Owner does not object to such items within [number] days of their
receipt, then Owner is deemed to have consented to them, and Manager may
file them with the proper authority.
e. Appearances. In any legal proceeding involving the
Property, Manager may appear on Manager's own behalf at Manager's own
expense, and Manager may appear on behalf of Owner, but only after
receiving the express authorization of Owner.
2.06. Contracts and Purchases.
a. Manager's Authority. In accord with the Budget, Manager
shall (i) enter and renew contracts for electricity, gas, steam, fuel
oil, water, telephone, cleaning, pest control, garbage removal, and
other services required for the Property in the ordinary course and (ii)
purchase all supplies and equipment Manager deems necessary to maintain
and operate the Property.
b. Terms. Manager will use Manager's best efforts to
include as a condition of any contract Manager executes that (i) Manager
may terminate such contract on [number] days' prior written notice and
(ii) Manager is entitled to discounts on prompt payment.
c. Interested Party Transactions. If Manager wishes to
select itself or any entity in which Manager, or Manager's principal,
has a financial interest as the party with whom to contract for any
supplies, equipment, or services, Manager may do so only if:
i. Manager provides prior notice to Owner of the
terms of the proposed agreement with itself or
such interested entity, the terms on which
independent third parties have offered to supply
or perform, and the reasons(s) for preferring
itself or such interested entity over a third
ii. Owner does not disapprove of such contract
within [number] days of receipt of such
2.07. Fidelity Bond. Manager shall maintain in effect a
fidelity bond of ---------- dollars ($----------) per employee of
Manager to secure the faithful performance of the obligations contained
in this Agreement.
a. Owner's Obligations. Owner agrees to carry and keep in
effect free and extended coverage, public liability, elevator liability,
and contractual liability insurance (insuring in accord with the
indemnity provisions contained in Section 6.04).
Manager shall be designated as a party insured in addition to
Owner. Owner will furnish a copy of each such policy of insurance to
b. Manager's Obligations. Manager will make a timely
written report to the insurance carrier concerning all accidents and
claims relating to the Property or its operation that are insured
against (by Owner or by Manager).
Manager agrees to carry and keep in effect workers' compensation
insurance and employer liability insurance in amounts not less than is
required by the laws of [state].
INCOME ACCOUNTS AND DISBURSEMENTS
3.01. Bank Accounts.
a. Income Account. Owner shall open and maintain an account
at [name and address of bank], which is designated as an Income
Account. Manager shall deposit all funds collected on Owner's behalf,
including all monies collected from tenants, into the Income Account.
Such monies collected shall at all times be the sole property of Owner.
b. Operating Account. Owner shall open and maintain an
account at [name and address of bank], which is designated as an
Operating Account. Manager shall have the power to withdraw from such
account. During the term of this Agreement, Owner shall deposit
sufficient funds in the Operating Account to provide Manager with
sufficient funds for maintenance and operation of the Property in
accordance with this Agreement. [Optional clause: In no event will the
amount on deposit in the Operating Account be less than ----------
c. Change of Depository. Owner may, from time to time upon
prior notice to Manager, designate an alternative bank or branch for
maintenance of the Income Account or Operating Account.
3.02. Manager's Disbursements. Manager will pay when due, out
of the funds contained in the Operating Account, in the following order
a. All amounts payable by Owner under the terms of this
b. All taxes, insurance, and similar items relating to
the Property that are directly payable by Owner; and
c. All payments required to be made under any mortgage
covering the Property.
Manager is not obligated to make any advance to or on behalf of Owner.
If Manager voluntarily advances any sums for Owner's account to pay any
obligation that is a submitted item of disbursement (as defined
previously), then Owner will promptly reimburse Manager on demand.
FINANCIAL MANAGEMENT ACTIVITIES
4.01. Operating Budget and Rent Schedule.
a. Agreement of Parties. Attached to this Agreement, as
Exhibits B and C [omitted], are an Operating Budget and a Rent
Schedule for calendar year [year]. On or before [month and day] of
each calendar year during the term of this Agreement, Owner and Manager
will agree upon an Operating Budget and Rent Schedule for the subsequent
calendar year. The Operating Budget shall be set forth on a monthly
b. Changes. Manager will operate the Property in accordance
with the applicable Rent Schedule and Operating Budget. Manager must
obtain the prior written approval of Owner to any change in the Rent
Schedule. Manager must obtain the prior written approval of Owner to
any increase in any item of the Operating Budget that exceeds ----------
percent (----------%). Manager need not obtain the prior approval of
Owner for increases in any item of the Operating Budget of less than
---------- percent (----------%) if, but only if, the total operating
expenses of the Property do not increase (due to corresponding decreases
in other items of the Operating Budget).
4.02. Books and Records. Manager will maintain accurate books
and records of all funds received and disbursed in connection with
Manager's management of the Property, and all leases, rent records,
correspondence, and other papers and documents relating to the Property.
All books and records are to be prepared and kept in accordance with
generally accepted accounting principles consistently applied. All
books, records, and files are open for inspection and audit by Owner.
Manager shall ensure adequate control over all books, records, and
files. Manager shall preserve all such books and records for at least
[number] years after the close of the calendar year to which they
relate. All files must be preserved until termination of this
Agreement, at which time they are to be delivered to Owner.
4.03. Monthly Reports. Manager will, during the term of this
Agreement, deliver to Owner the following monthly reports, on or before
the [number] day of the following month:
a. An income and expense statement, by predetermined
b. A statement of disbursements, itemizing each
disbursement by check number and party paid;
c. A statement of receipts, listing all monies
collected and grouping such monies by type;
d. A schedule of accounts receivable, itemizing all
sums outstanding as of t he close of the accounting
e. A copy of all paid invoices; and
f. A payroll register listing with earnings, taxes, and
deductions for each employee.
Manager will prepare such reports on a cash basis, in accordance with
generally accepted accounting principles.
4.04. Annual Reports. Within [number] days after the end of
each calendar year (and after the termination of this Agreement),
Manager shall deliver to Owner (a) a profit and loss statement for that
year and (b) a balance sheet for the Property as of the end of that year
(or the termination date). Both reports are to be prepared in
accordance with generally accepted accounting principles consistently
applied by such independent certified public accountants as Manager
4.05. Additional Reports. Owner may request additional
accounting reports and records from time to time. Manager will provide
such additional reports and records at Owner's expense.
5.01. Reimbursement of Expenses. Owner shall reimburse
Manager for all direct expenses of managing the Property that are set
out in the Budget. Owner shall not include expenses incurred by Manager
at Owner's general offices.
5.02. Management Fee. Owner shall pay Manager a monthly
management fee for all services provided under this Agreement of
---------- dollars ($----------)
5.02. Management Fee.
a. Amount. Owner shall pay Manager a monthly management fee
for all services provided under this Agreement equal to ----------
percent (----------%) of Gross Receipts (as defined in Section 5.02(b)).
b. Definition. The term "Gross Receipts" means all amounts
actually collected by Manager, as rents or other charges for use or
occupancy of space or facilities, including furniture rental, parking,
forfeited amounts collected as security, income from coin-operated
machines, escalations, and other miscellaneous income relating to the
Property. However, the term "Gross Receipts" shall not include other
receipts, such as interest or investment income, tenants' utility
income, insurance proceeds other than proceeds from rental interruption
insurance, tax refunds, eminent domain awards, and dividends on
5.03. Leasing Commissions. Owner shall pay Manager a leasing
commission for leases affecting the Property that are contracted by
Manager equal to (a) ---------- percent (----------%) of the base rent,
for leases of space not then occupied by an existing tenant, or (b)
---------- percent (----------%) of the base rent for renewals of leases
of space then occupied by an existing tenant. If an outside cooperating
broker is involved in any lease transaction, Owner will pay Manager an
additional ---------- percent (----------%) of the base rent payable
under the lease or renewal lease. On cancellation of this Agreement,
all outstanding leasing commissions shall be due and payable.
TERM AND TERMINATION
6.01. Initial Term. This Agreement shall commence on [date]
and continue until [date], unless renewed or unless terminated sooner
in accord with its provisions.
6.02. Automatic Renewal. Unless either Owner or Manager gives
the other written notice of its intention not to renew this Agreement at
least [number] days before expiration of the term, this Agreement
shall be renewed and extended automatically, on the same terms and
conditions (including the monthly management fees and/or commissions
contained in Sections 5.02 and 5.03), on a month-to-month basis.
Thereafter, this Agreement shall terminate when either Owner or Manager
gives written notice to the other of its intention to terminate this
Agreement at least [number] days in advance.
6.03. Default and Termination.
a. Conditions. This Agreement shall terminate in the
following circumstances (and on the following dates):
i. Expiration of its term, as provided in
Sections 6.01 and 6.02.
ii. When either party gives the other notice of
its intent to terminate the Agreement due to a
Default by the other. A Default, as used in
this Agreement, means:
A. The failure of either party to comply with
the express terms and conditions of this
Agreement, and such failure not being
corrected within [number] days following
receipt of notice of such failure given by
one party to the other;
B. The failure of Manager to follow the
express terms of any written instruction or
direction delivered by Owner to Manager
pursuant to this Agreement, and such failure
not being corrected within [number] days
following receipt of notice of such failure
given by Owner to Manager;
C. The intentional making of any false or
misleading material statement of fact by one
party to the other; or
D. Negligence committed by either party in carrying
out the provisions of this Agreement.
The termination shall be effective [number] days
following receipt by the receiving party of a
notice from the other party detailing a Default.
With respect to any failure delineated in (A) or
(B) above, if such failure cannot reasonably be
cured within such [number]-day period and if
reasonable efforts to cure such failure are
commenced within such [number]day period and are
pursued with due diligence to conclusion, then
there shall be no right to terminate this
Agreement unless the failure is not cured within
[number] days after the receipt of notice of the
failure to comply with this Agreement.
iii. At the option of Owner, upon a sale of the
Property. The termination is effective on the
date of closing.
iv. If a receiver, liquidator, or trustee for
either party is appointed by court order; or a
bona fide petition is filed against either party
under any bankruptcy, reorganization, or
insolvency law; or either party files a petition
in voluntary bankruptcy or requests
reorganization under any provision of
involuntary bankruptcy, reorganization, or
insolvency law; or if either party makes an
assignment for the benefit of creditors. In any
such event, the other party may deliver written
notice of termination, and termination shall be
effective immediately upon its receipt.
b. Manager's Obligations. Termination of this Agreement
under any of the provisions of this Section shall not release either
party from liability for any period before termination. On termination:
i. Manager's right to utilize Owner's property,
as described in Sections 3.01 and 3.02, shall
immediately cease, but Owner agrees to pay
Manager all amounts then owed by Owner to
Manager under this Agreement;
ii. Manager shall deliver to Owner, as received,
any monies due Owner under this Agreement;
iii. Manager shall deliver to Owner all materials
and supplies, originals of books and records,
keys, contracts,'and documents, and such other
accountings, paper, and records pertaining to
the Agreement or the Property as Owner
reasonably requests (with Owner to pay for the
reproduction or copying expenses for the making
of such copies); and
iv. Manager shall assign such existing contracts
relating to the operation and maintenance of the
Property as Owner shall require (which by their
terms are assignable), provided Owner agrees to
assume all liability under such contracts.
a. Owner's Obligation. Manager agrees to exercise Manager's
best efforts to perform Manager's obligations under this Agreement.
However, Manager, Manager's directors, officers, and employees, when
carrying out the provisions of the Agreement or the directions of Owner,
shall not be liable to Owner or to any other person for any act or
omission except in cases of fraud, gross negligence, or intentional or
grossly negligent failure to comply with laws, regulations, or orders of
governmental authorities. Owner agrees to indemnify and hold harmless
Manager, Owner's directors, officers, and employees from and against any
liability, loss, damage, cost, or expense (including attorney fees) by
reason of any act or omission, in the circumstances provided in this
b. Manager's Obligation. Manager shall indemnify and hold
Owner, Owner's officers, employers, directors, and attorneys-in-fact
harmless from and against any and all claims, damages, losses, and
expenses (including attorney fees) arising out of or resulting from
gross negligence or willful misconduct on the part of Manager, Manager's
officers, agents, and employees in the performance of Manager's duties
under this Agreement.
c. Third Parties. Nothing contained in this Section 6.04
shall be deemed to create any rights in any person or entity that is not
a party to this Agreement.
6.05. Right to Assign. Manager shall not, without Owner's
prior written consent, assign any of Manager's rights or obligations
under this Agreement. Owner may assign Owner's rights and obligations
under this Agreement to any successor entitled to the Property, and upon
such assignment, Owner shall be relieved of all liability accruing after
the effective date of such assignment.
6.06. Notices. Any notice to be given or to be served upon
any party hereto must be in writing and may be given by certified or
registered mail, but shall be deemed to have been given and received
when a certified or registered letter containing such notice, properly
addressed with postage prepaid, is deposited in the U.S. mail. If
notice is given in some manner other than by certified or registered
mail, it shall be deemed to have been given when delivered to and
received by the party to whom it is addressed, Such notices shall be
given to the parties hereto at the following addresses:
If to Owner: [name and address].
If to Manager: [name and address].
Either party may change its address for notice under this
Agreement, or may add additional addresses for notices, by giving
[number] days' prior notice to the other in the manner set forth in
6.07. Entire Agreement. This Agreement shall constitute the
entire agreement between the parties, and no modification of it shall be
effective unless made by supplemental agreement in writing executed by
6.08. Severability. If any one or more of the provisions of
this Agreement, or the applicability of any such provision to a specific
situation, is deemed invalid or unenforceable, then such provision shall
be modified to the minimum extent necessary to make it or its
application valid or enforceable, and the validity and enforceability of
all other provisions of this Agreement, and all other applications of
such provisions, shall not be affected.
[name of Owner]
[name of Manager]
This Section for Notary:
STATE OF -------)
) ss: [date]
COUNTY OF ------)
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
[Name of Notary Public]
My commission expires: [date]