Exhibit 3
PRUDENTIAL BUSINESS CAMPUS
MAPLE PLAZA I AND II
MANAGEMENT AGREEMENT
BETWEEN
PRUDENTIAL REALTY - PRT
AS OWNER
AND
PREMISYS REAL ESTATE SERVICES, INC.
TABLE OF CONTENTS
Article I - Properties
Section 1.1 - List of Properties
1.2 - Withdrawal of a Particular Property
1.3 - Termination on Sale
Article 2 - Commencement Date
Article 3 - Manager's Responsibilities
Section 3.1 - Management
3.2 - Employees: Independent Contractor
3.3 - Schedule of Employees
3.4 - Compliance with Laws, Mortgages, etc.
3.5 - Approved Budgets
3.6 - Collection of Rents and Other Income
3.7 - Competitive Bidding
3.8 - Repairs
3.9 - Capital Improvements
3.10- Service Contracts
3.11- Non-Owned Properties
3.12- Taxes, Mortgages
Article 4 - Insurance
Section 4.1 - Liability Insurance
4.2 - Property Insurance
4.3 - Additional Insurance
Article 5 - Financial Reporting and Recordkeeping
Section 5.1 - Books of Accounts
5.2 - Account Classification
5.3 - Financial Reports
5.4 - Supporting Documentation
5.5 - Accounting Principals
5.6 - Tax Form Preparation
Article 6 - Owner's Right to Audit
Article 7 - Bank Accounts
Section 7.1 - Depository Account
7.2 - Concentration Account/
Short Term Investments
7.3 - Disbursement Account
7.4 - Transfer of Funds
7.5 - Security Deposit Account
7.6 - Change of Banks
7.7 - Access to Account
Article 8 - Payments of Expenses
Section 8.1 - Manager's Cost to be Reimbursed
8.2 - Costs Eligible for Payment
from Disbursement Account
Article 9 - Managers Cost Not to be Reimbursed
Article 10 - Deleted
Article 11 - Cooperation
Article 12 - Compensation
Article 13 - Termination
Section 13.1 - Termination on 30-day Notice
13.2 - Immediate Termination with Notice
13.3 - Authority to Execute Termination Notices
13.4 - Termination Without Notice
13.5 - Final Accounting
Article 14 - Subsidiaries and Affiliates
Article 15 - Notices
Article 16 - Non-Assignability, Etc.
Section 16.1 - No Assignment
16.2 - Consents and Approvals
16.3 - Pronouns
16.4 - Amendments
16.5 - Headings
16.6 - Representations
16.7 - Indemnification by Manager
16.8 - Complete Agreement
16.9 - Shareholder Responsibility
Schedules
A - Property Identification and Compensation
C - Monthly Report Forms
D - Reimbursable Employees
E - Subsidiaries and Affiliates
MANAGEMENT AGREEMENT
This AGREEMENT, dated this 31st day of December, 1990, by and between
Prudential Realty-PRT, hereinafter called "Owner" and Premisys Real
Estate Services, Inc., Property Manager, hereinafter called "Manager"
witnesseth that:
WHEREAS, the Owner owns a controlling interest in the entities which
own certain properties described in Schedule A hereto affixed and made
a part hereof, and desires to engage the Manager to manage and operate
the same.
NOW, THEREFORE, in consideration of the Premises the parties agree as
follows:
ARTICLE 1. PROPERTIES
1.1 List of Properties. Listed, described and identified
on Schedule A are the real properties to come under the terms of the
Agreement. As used in this Agreement, Schedule A shall also mean the
amended or revised list of all properties which may from time to time
be under the management of the Manager. Each property listed in
Schedule A, which may be amended from time to time, is hereinafter
referred to as a "Property" and more than on Property is referred to
as "Properties." No parcel of real property shall be subject to the
terms of this Agreement unless listed under Schedule A. Schedule A
indicates the nature of the rights of Owner with respect to each
Property, whether as Owner or otherwise, and also sets forth the
compensation payable (as provided in Section 12.1) to the Manager with
respect to each specific Property. Schedule A may be amended at any
time during the continuance of this Agreement with the mutual consent
of Owner and Manager by Owner's furnishing the Manager with a current
List of the Property(ies). This list shall contain the same
information as to each Property as in the case of other Properties
previously listed under Schedule A.
1.2 Withdrawal of a Particular Property. If Schedule A
lists more than one Property, the Owner may at any time withdraw any
Property listed on Schedule A by giving to the Manager at least thirty
(30) days notice in writing. Such withdrawal shall not affect or
impair any right which has accrued to either party prior to the date
when such withdrawal becomes effective. However, termination of this
entire Agreement, as provided in Article 13, shall be distinguished
from the withdrawal of individual Properties.
1.3 Termination on Sale. In addition to Owner's rights to
withdraw individual Properties upon notice, this Agreement shall
terminate automatically and immediately as to any specific Property
upon sale thereof by Owner or upon termination of the Owner's right to
collect the rents therefrom.
ARTICLE 2. COMMENCEMENT DATE
2.1 The Managers duties and responsibilities under this
Agreement shall begin the 20th day of August, 1990, and shall continue
until termination as provided in sections 1.2, 1.3 or ARTICLE 13.
ARTICLE 3. MANAGER'S RESPONSIBILITIES
3.1 Management. The Manager shall manage, operate and
maintain the Properties listed on Schedule A (and any amendments to
Schedule A) in an efficient and satisfactory manner. Manager shall
act in a fiduciary capacity with respect o the proper protection of
and accounting for Owner's assets. In this capacity, manager shall
deal at arms length with all third parties and Manager shall serve
Owner's interests at all times.
3.2 Employees; Independent Contractor. The Manager shall
have in its employ at all times a sufficient number of capable
employees to enable it to properly, adequately, safely and
economically manage, operate, maintain, and account for each Property.
All matters pertaining to the employment, supervision, compensation,
promotion and discharge of such employees are the responsibility of
the Manager, which is in all respects the employer of such employees.
Manager will negotiate with any union lawfully entitled to represent
such employees and may execute in its own name, and not as agent for
Owner, collective bargaining agreements or labor contracts resulting
therefrom. Manager shall fully comply with all applicable laws and
regulations having to do with worker's compensation, social security,
unemployment insurance, hours of labor, wages, working conditions, and
other employer-employee related subject. Manager represents that it
is and will continue to be an equal opportunity employer and must
advertise as such. This Agreement is not one of agency by the Manager
for Owner but one with the Manager engaged independently in the
business of managing properties on its own behalf as an independent
contractor. All employment arrangements are therefore solely its
concern and Owner shall have no liability with respect thereto.
3.3 Schedule of Employees. Manager shall provide a
schedule of employees (in the format of Schedule D attached) to be
employed "on-site" in the direct management of each Property subject
to this Agreement. This schedule shall include the number of
employees and their title and salary range and shall also indicate
which employees are bonded or are covered under the Manager's
comprehensive crime insurance policy. Manager shall identify in the
same manner those additional employees whose salaries may from time to
time be charged pro rata to each Property or Properties for direct
services rendered to each Property or Properties. Employees whose
salaries are eligible to be charged pro rata include, but are not
limited to, engineers or others to be agreed upon. Employees whose
salaries may not be charged pro rata include, but are not limited to,
general management personnel, accountants and auditors. Schedule D
may be amended from time to time by mutual agreement.
3.4 Compliance with Laws, Mortgages, etc. Manager shall
be responsible for full compliance with federal, state and municipal
laws, ordinances, regulations and orders relative to the leasing, use,
operation, repair and maintenance of each property and with the rules,
regulations or orders of the local Board of Fire Underwriters or other
similar body. Manager shall promptly remedy any violation of any such
law, ordinance, rule, regulation or order which comes to its
attention.
Expenses incurred in remedying violations may be paid from
the Disbursement Account provided such expenses do not exceed $2,500
in any one instance. When more than such amount is required or if the
violation is one for which the Property title holder might be subject
to penalty, Manager shall notify Owner by the end of the next business
day to the end that prompt arrangements may be made to remedy the
violation.
Manager shall be responsible for full compliance with all
terms and conditions contained in any ground lease, space lease,
mortgage, deed or trust or other security instrument affecting each
Property, provided, however, Manager shall not be required to make any
payment or incur any liability on account thereof.
3.5 Approved Budgets. Manager shall prepare and submit to
Owner a proposed Operating Budget and a proposed Capital Budget for
the promotion, operation, repair and maintenance of each Property for
the forthcoming calendar year. Each proposed budget shall be
delivered to Owner no later than October 1 of each calendar year or,
with respect to a newly added property to Schedule A, no later than 90
days after the addition of a Property to Schedule A.
The Owner will consider the proposed budgets and then will
consult with the Manager in the ensuing period prior to the
commencement of the forthcoming calendar year in order to agree on an
"Approved Operating Budget" and an A "Approved Capital Budget."
Manager agrees to use diligence and to employ all reasonable
efforts to ensure that the actual costs of maintaining and operating
each Property shall not exceed either Approved Budget pertaining
thereto either in total or in any one accounting category. All
expenses must be charged to the proper account as specified in the
approved Chart of Accounts and no expense may be classified or
reclassified for the purpose of avoiding an excess in the annual
budgeted amount of an accounting category.
Manager shall secure Owner's prior written approval for any
expenditure that will result in any excess of the greater of $3,000 or
5% of the annual budgeted amount in any one accounting category of the
Approved Operating Budget.
During the calendar year the Manager shall inform Owner of
any major increases in costs and expenses that were not foreseen
during the budget preparation period and thus were not reflected in
either Approved Budget. Manager will provide Owner with monthly
variance reports and quarterly budget reforecasts.
3.6 Collection of Rents and Other Income. The Manager
shall use diligent efforts to collect all rents (including escalation
billings resulting from tenant participation in increases in
expenses, taxes and common area maintenance charges) and other charges
which may become due at any time from any tenant or from others for
services provided in connection with or for the use of any Property or
any portion thereof. Manager shall collect and identify any income
due the Owner from miscellaneous services provided to tenants or the
public including, but no limited to, parking income, tenant storage,
and coin operated machines of all types (e.g., vending machines, pay
telephone, etc.). All monies so collected shall be deposited in the
Depository Account. Manager may not, without the proper written
approval of Owner, terminate any lease, lock out a tenant, institute
suite for rent or for use and occupancy, or proceedings for recover of
possession. In connection with any collection efforts only legal
counsel or a collection firm designated by Owner shall be retained.
All legal expenses incurred in bringing such approved suit or
proceeding shall be submitted to Owner for its approval. Manager
shall not write off any income items without prior approval of Owner.
3.7 Competitive Bidding. All contracts for repairs,
capital improvements, goods and services exceeding $2,500 shall be
awarded on the basis of competitive bidding, solicited in the
following manner:
(a) A minimum of 2 written bids shall be obtained for each
purchase up to $10,000. Purchases over $10,000 will
require a minimum of three bids.
(b) Each bid will be solicited in a form prescribed by
Owner so that uniformity will exist in the bid quotes.
(c) Manager may accept low bid without prior approval from
Owner, if the expenditure is for a budget approval item
and will not result in an excess of the annual budgeted
accounting category of the applicable Approved
Operating or Capital Budget. Prior approval of a bid
may be required by Owner.
(d) If Manager advises acceptance of other than the lowest
bidder, Manager shall adequately support, in writing
its recommendations to Owner.
(e) Owner shall be free to accept or reject any and all
bids.
(f) Manager may request Owner to waive competitive bidding
rules.
Owner may pay for such expenses from its own resources or
may authorize payment by Manager out of the Operating
Account.
3.8 Repairs. The Manager shall attend to the making and
supervision of all ordinary and extraordinary repairs, decorations and
alterations subject to the limits of the approved Operating Budget.
Excluded from this provision are expenditures to refurbish,
rehabilitate, remodel, or otherwise prepare areas covered by new
leases. Any lease requiring the expenditure of funds to refurbish,
rehabilitate, remodel or otherwise prepare the leased premises must be
submitted with the estimated cost for such work to owner for written
approval prior to commencement of any such work.
In cases of emergency Manager may make expenditures for
repairs which exceed the limits in Section 3.7 without prior written
approval if it is necessary to prevent damage or injury. Owner must
be informed of any such expenditures before the end of the next
business day.
3.9 Capital Improvements. The Approved Capital Budget
constitutes an authorization for Manage to expend money for projects
up to $50,000. With respect to the purchase and installation of major
items (cost in excess of $50,000) of new or replacement equipment, the
Manager shall recommend that Owner purchase these items when Manager
believes such purchase to be necessary or desirable. Owner may
arrange to purchase and install the same itself or may authorize
Manager to do so subject to prescribed supervision and specification
requirements and conditions.
The competitive bid rules outlined in 3.7 will be observed.
3.10 Service Contracts. Manager shall not enter into any
contract for cleaning, maintaining, repairing or servicing any
Property or any of the constituent parts of any Property that requires
annual payments in excess of $50,000 without the prior written consent
of Owner. As a condition to obtaining such consent, Manager shall
supply Owner with a copy of the proposed contract and shall state to
Owner the relationship, if any, between Manager (or the person or
persons in control of Manager) and the party proposed to supply such
goods or services, or both.
All service contracts shall: (a) be in the name of
Manager, (b) be assignable, at Owner's option, to Owner or Owner's
nominee, (c) include a provision for cancellation thereof by Owner or
Manager upon not more than 30 days written notice and (d) shall
require that all contractors provide evidence of sufficient insurance.
Unless Owner specifically waives such requirements, either by
memorandum or as an amendment to the procedure as specified in section
3.7. If a Property is withdrawn pursuant to specified to Section 1.2
or if this Agreement is terminated pursuant to Article 13, Manager
shall, at Owner's option, assign to Owner's nominee all services
agreements pertaining to the Property or Properties.
3.11 Non-Owner Properties. If Owner does not have title
to the Property, then notwithstanding the provisions of this Agreement
including the provisions relative to the making of repairs of
maintenance of the Properties, the Manager shall not incur any
expenses in any month in excess of the income for the individual
Property during that month. In any case in which their is doubt, the
Manager shall inform Owner of the situation so that Owner may have the
opportunity of determining what action should be taken under the
circumstances.
3.12 Taxes, Mortgages. The Manager shall, if so
requested, obtain and verify bills for real estate and personal
property taxes, improvement assessments and other like charges which
are or may become liens against each Property and recommend appeal as
in its best judgement it may decide. Manager shall pay such bills
receipted bills from the Disbursement Account and shall furnish Owner
with receipted bills therefor. Manager shall take advantage of any
discounts in paying such bills. At the direction of the Owner,
Manager shall make any payments on account of any ground lease,
mortgage, deed of trust or other security instrument, if any,
affecting any Property.
3.13 - 3.15 Intentionally Deleted
ARTICLE 4. INSURANCE
4.1 Insurance. Owner, at its expense, will obtain and
keep in force adequate insurance against physical damage (e.g., Fire
with extended coverage endorsement, boiler and machinery, etc.) and
against liability for loss, damage or injury to property or persons
which might arise out of the occupancy, management, operation or
maintenance of any of the Properties covered by this Agreement.
Manager and its officers and employees will be covered as additional
insured in all liability insurance maintained with respect to each
Property. Neither Owner nor Owner's insurance company shall be liable
for liability arising from the gross negligence, malice or willful
misconduct of Manager, its officers and employees. To the extent the
Owner self-insures, and subject to the exclusions in the preceding
sentence, Owner shall indemnify and save Manager, its officers and
employees harmless from any liability with respect to each Property
whether such lability is caused or contributed to by the negligence of
the indemnitee, which liability arises out of the occupancy,
management, operation or maintenance of any of the Properties. As a
prerequisite to indemnification, and in any event, Manager shall:
(a) notifies Owner and the insurance carrier within twenty-four
(24 hours) after Manager receives notice of any such loss,
damage or injury;
(b) takes no action (such as admission of liability) which might
bar Owner from obtaining any protection afforded by any
policy Owner may hold or which might prejudice Owner in its
defense to a claim based on such loss, damage or injury; and
(c) agrees that Owner shall have the exclusive right, at its
option, to conduct the defense to any claim, demand or suit
within limits prescribed by the policy or policies of
insurance.
Nothing herein shall be construed as indemnifying the
Manager or his employees, contractors or agents against any act or
omission for which insurance protection is not available, neither is
the foregoing intended to affect the general requirement of this
Agreement that each Property shall be managed, operated and maintained
in a safe condition and in a proper and careful manner. The Manager
shall furnish whatever information is requested by Owner for the
purpose of establishing the placement of insurance coverages and shall
aid and cooperate in every reasonable way with respect to such
insurance and any loss thereunder. Owner shall include in its hazard
policy covering each Property, personal property, fixtures and
equipment located thereon, and Manager shall include in any fire
policies for its furniture, furnishings or fixtures situated at each
Property, appropriate clauses pursuant to which the respective
insurance carriers shall waive all rights of subrogation with respect
to losses payable under such policies.
4.2 Additional Insurance. Manager must obtain and keep in
force the following insurance coverage:
(a) Worker's Compensation - statutory amount.
(b) Comprehensive General Liability coverage (to protect
Manager from their negligent acts not covered by
Owner).
(c) Employers' Liability in an amount not less than
$500,000.
(d) Automobile Liability in an amount not less than
$1,000,000.
(e) Blanket Crime Insurance in an amount not less than
$1,000,000.
(f) Umbrella/Excess insurance to be written as Employers'
Liability, Comprehensive General Liability, and Auto
Liability underlying limits with a minimum limit of
$10,000,000 each occurrence and aggregate.
Manager must obtain Owners' permission to waive any of the above
requirements. Certificates shall have attached thereto an endorsement
the Owner will be given at least 10 days prior to written notice of
cancellation of or any material change in policy. Owner will not
reimburse Manager for Manager's cost of such insurance, or for any and
all coverage that Manager obtains for its own account.
Manager shall indemnify, defend, and hold Owner and its officers and
employees harmless from any and all claims asserted against Owner, its
officers, and employees arising out of the Manager's breach of the
duties and obligations required by the contract between the two
parties.
The Managers' Worker's Compensation, Employer's Liability, and Auto
Insurance policies should waive all rights of subrogation against
Owner.
4.3 Subcontractor's Insurance. Manager shall require that
all subcontractors brought onto the Property(ies) have insurance
coverage at the subcontractor's expense, in the following minimum
amounts:
(a) Workers Compensation - Statutory Amount
(b) Employer's Liability $1,000,000 minimum;
(c) Comprehensive General Liability
(i) $100,000 Bodily Injury Per Person
$500,000 Per Occurrence
$100,000 Property Damage
OR
(ii) $500,000 Combined Single Limit
Manager must obtain the Owner's permission to waive any of
the above requirements. Higher amounts may be required if the work to
be performed is sufficiently hazardous. Manager shall obtain and keep
on file a certificate of insurance which shows that each subcontractor
is so insured.
ARTICLE 5. FINANCIAL REPORTING AND RECORDKEEPING
5.1 Books of Accounts. Manager, in the conduct of its
responsibilities to Owner, shall maintain adequate and separate books
and records for each Property, the entries to which shall be supported
by sufficient documentation to ascertain that said entries are
properly and accurately recorded to each Property. Such books and
records shall be maintained by Manager at Manager's address stated in
Article 15 or at such other location as may be mutually agreed upon in
writing. Manager shall ensure such control over accounting and
financial transactions as is reasonably required to protect Owner's
assets from theft, error or fraudulent activity on the part of
Manager's employees or other agents. Losses arising from such
instances are to be borne by Manager and shall include but not be
limited to:
(a) Theft of assets by Manager's employees or other agents,
(b) Penalties, interests, or loss of vendor discounts due
to delay in payment of invoices, bills or other like
charges,
(c) Overpayment of duplicate payment of invoices arising
from either fraud or error,
(d) Overpayment of labor costs arising from either fraud or
error,
(e) A sum equal to the value of any form of payment from
purveyors to Manager's employees or associates arising
from the purchase of goods or services for Owner's
Property, and
(f) Unauthorized use of facilities by manager's employees
or associates.
5.2 Account Classification. Manager shall adopt Owner's
Chart of Accounts.
5.3 Financial Reports. Manager shall furnish reports on
a calendar month basis, showing all collections, delinquencies,
uncollectible items, vacancies, and other matters pertaining to the
management, operation, and maintenance of each Property during the
month. The cash cutoff for the properties will be the 15th day of
each month with accurate accruals provided for the balance of the
month. The reports shall include the items listed on Schedule C
attached and a comparison of monthly and year-to date actual income
and expense with the approved operating Budget for each Property. All
reports shall be delivered to Owner no later than Manager's Premis
lockout date. A list of such dates shall be provided to Manager at
the beginning of each year. In addition, the Manager shall prepare
forms prescribed by the Owner to facilitate the input of such
financial information into the Owner's accounting system
5.4 Supporting Documentation. As additional support to
the monthly financial statement, Manager shall provide copies the
following:
(a) All bank statements, bank deposit slips and bank
reconciliations,
(b) Detailed cash receipts and disbursements records,
(c) Detailed trial balance (if available),
(d) General ledger listing (Periodically, Owner may request
copies of all invoices paid during a specified period),
(e) All invoices for capital expenditures and non-recurring
items,
(f) Summaries of adjusting journal entries, and
(g) Supporting documentation for payroll, payroll taxes and
employee benefits.
5.5 Accounting Principals. All financial statements and
reports required by Owner will be prepared in accordance with
generally accepted accounting principles.
5.6 Tax Form Preparation. Contract Manger shall prepare
and distribute to all required persons IRS from 1099, copies of which
shall be sent to Owner.
ARTICLE 6. OWNER'S RIGHT TO AUDIT
6.1 Owner reserves the right for Owner's employees, or
others appointed by Owner, to conduct examination, without
notification, of the books and records maintained for Owner by Manager
no matter where books and records are located. Owner also reserves
the right to perform any and all additional audit tests relating to
Manager's activities either at the Property or at any office of the
Manager; provided such audit tests are related to those activities
performed by Manager for Owner.
Should Owners employees or appointees discover either
weaknesses in internal control or errors in recordkeeping, Manager
shall correct such discrepancies either upen discovery or within a
reasonable period of time. Manager shall within 30 days inform Owner
in writing, of the action taken to correct such audit discrepancies.
Any and all such audits conducted either by Owner's
employees or appointees will be at the sole expense of Owner.
ARTICLE 7. BANK ACCOUNTS
7.1 Depository Account. The Manager shall deposit all
rents, security deposits, and other funds collected from the operation
of each Property, including any and all advance rents, in a bank
approved by Owner in a special account or accounts (the "Depository
Account") in the name of:
PREMISYS Real Estate Services, Inc. as Managing Agent for
Maple Plaza I, Rep Account
PREMISYS Real Estate Services, Inc. as Managing Agent for
Maple Plaza II, Rep Account
Prudential/Premisys Real Estate Services, Inc. as Managing Agent
for PBC Association Inc., Rep Account
The bank shall be informed in writing that the funds are held in trust
for the Owner. Separate and exclusive account shall be created with
a name designated by Owner for all Properties within the Owner's given
Property portfolios.
7.2 Concentration Account/Short Term Investments. A
Concentration Account shall be maintained by Manager. The bank shall
be informed in writing that the funds are held in trust for the Over.
When any Depository Account reaches the Trigger Balance as listed
below for each account, Manager shall cease all funds in the account,
except for the minimum balance as listed below for each account, to be
wire transferred to the Concentration Account where the funds will be
commingled with those of other properties which are managed by
Manager. Manager will make short term investments with funds from the
Concentration Account. Manager will keep complete and accurate
records of each Property with its proportionate share of earnings from
investments. Funds shall be invested in accordance with the
guidelines of the Prudential Treasury Department.
Depository Account Trigger Balance Minimum Balance
Maple Plaza I $ 15,000 $ 5,000
Maple Plaza II $ 15,000 $ 5,000
7.3 Disbursement Account. Disbursement Accounts for each of
the Owner's portfolios will be created by the Owner. The Manager
shall pay out of the appropriate account the operating expenses of
respective Properties and any other payments relative to the Property
as required by terms of the Agreement.
7.4 Transfer of Funds. On the 15th of each month, Manager
shall remit to Owner excess funds from the Concentration Account
determined by the following calculation for each property:
Cash Balance +$
Accounts Payable as of
15th of current month -$ (1)
Accrual for anticipated
bills not received by 15th
of current month but due
before current month end
(i.e., light bill) -$ (2)
Imprest Balance (3)
Due to Owner $
The Imprest Balance for Maple Plaza I and II shall be $5,000.
The ending cash balance as of the 15th would be the sum of (1) + (2)
+ (3).
Checks for remittances should be delivered to Owner, independent of
required financial reports, in the most expeditious manner as possible
as directed by Owner.
Schedule for transfer of funds and balance permitted to remain in the
Operating Account may be changed from time to time by written
instructions from the Owner.
At the option of the Owner, final monthly remittance shall be net of
Manager's fee. Check for the Manager's fee to be written no earlier
than the 15th of the month.
Owner reserves the right to require transfers of funds to Owner be
made by wire transfers of immediately available funds.
7.5 Security Deposit Account. Security deposits will be
deposited in the appropriate depository accounts as listed in 7.1
above. Where law requires that tenant security deposits be separately
maintained, a separate account (or separate interest bearing account)
will be opened by Manager at a bank approved by Owner. Such account
shall be maintained in accordance with applicable laws.
Manager shall maintain detailed records of all security deposits
deposited in each account, and such records will be open for
inspection by Owner's employees or appointees. Manager shall obtain
approval of Owner prior to the return of such deposits to any
particular tenant.
7.6 Change of Banks. Owner may direct the Manager to change
a depository bank or the depository arrangements.
7.7 Access to Account. Through the use of signature cards,
authorized representatives of the Owner shall be permitted access to
any and all funds in the bank accounts described in Sections 7.1, 7.2,
7.3 and 7.4. Manager's authority to draw against such accounts may be
terminated at any time by Owner without notice to Manager.
ARTICLE 8. PAYMENTS OF EXPENSES
8.1 Manager's Costs to be Reimbursed. After initial payment by
Manager, Manager may be reimbursed out of the Disbursement Account for
costs of the gross salary and wages or pro rata share thereof, payroll
taxes, insurance, worker's compensation and other benefits of
Manager's employees required to properly, adequately, safely and
economically manage, operate and maintain each Property subject to
this Agreement, provided that such employees have been identified and
enumerated on Schedule D of this Agreement.
8.2 Costs Eligible for Payment from Disbursement Account.
Manager may pay the following expenses directly from the Disbursement
Account subject to the conditions outlined in Article 3:
(a) Costs to correct any violation of Federal, State and
Municipal laws, ordinances, regulations and orders relative
to the leasing, use, repair and maintenance of such
Properties, or relative to the rules, regulations or orders
of the local Board of Fire Underwriters or other similar
body, provided such cost is not the result of Manager's
negligence.
(b) Actual and reasonable cost of making all repairs,
decorations and alterations provided such cost is not the
result of Manager's negligence.
(c) Cost incurred by Manager in connection with all service
agreements approved of by Owner.
(d) Cost of collection of delinquent rentals collected through
a collection agency which has been approved in writing in
advance by Owner.
(e) Legal fees of attorneys provided such attorneys have been
approved of (or designated as provided in Article 3.6) by
Owner in writing in advance of retention and the specific
amount of such attorney's fee has been approved of by Owner
in writing in advance of payment.
(f) Cost of capital expenditures subject to the restrictions in
Article 3.9.
(g) Cost of printed checks for each bank account required by
Owner.
(h) Cost of cash register, adding machines, personal computers
and other equipment of such type and use located a Property
and owned by the Owner.
(i) Leasing commissions payable to third parties.
(j) cost of service contracts approved by Owner and cost of
utilities.
(k) Cost of Owner approved advertising.
(l) Cost of printed forms and supplies required for use at a
Property.
ARTICLE 9. MANAGER'S COSTS NOT BE REIMBURSED
9.1 Non-reimbursable Costs. The following expenses or costs
incurred by or on behalf of Manager in connection with the
Management and leasing of any particular Property shall be
at the sole cost and expense of Manager and shall not be
reimbursed by Owner.
(a) Cost of gross salary and wages, payroll taxes, insurance,
workmen's compensation, and other benefits of Manager's
office personnel not identified in Schedule D.
ARTICLE 10. DELETED
ARTICLE 11. COOPERATION
Cooperation. Should any claims, demands, suits or other
legal proceedings be made or instituted by any person
against Owner or title holder of the Property which arise
out of any of the matters relating to this Agreement, the
Manager shall give Owner all Pertinent information and
reasonable assistance in the defense or other disposition
thereof.
ARTICLE 12. COMPENSATION
Compensation. Each month the Manager shall receive
remuneration for its services in managing and leasing the
respective Properties in accordance with the terms and tenor
of this Agreement. Either or both of the following fees may
be specified:
(a) An Annual fee, independent of income, payable in equal
monthly installments. The amount of such fee, if any is
payable, will be shown in Schedule A.
(b) A Management Fee based on income, amounting to a percentage
of the rents actually collected and remitted during the
month. Such percentage will be shown in Schedule A.
Rent for the purpose of Management Fee computation will
include all income except:
(1) Security deposits unless and not until such deposits
are applied as rental income upon termination of a
lease.
(2) Rents paid more than 30 days in advance of the due date
until the month in which such payments are to apply as
rental income.
(3) Monies collected for capital items which are paid for
by tenants.
(c) Upon remission of each Property's net cash and financial
statements as required by Section 5.3, Manager shall submit
a calculation of its fee to Owner.
ARTICLE 13. TERMINATION
13.1 Termination on 30-day Notice. In addition to the provisions
of Articles 1.2 and 1.3, either party may terminate this Agreement
without cause by giving the other party at least thirty (30) days
notice in writing.
13.2 Immediate Termination With Notice. In addition to the
provisions of Section 13.4, Owner may immediately terminate this
Agreement by the service of a written notice to that effect on the
Manager. In such cases, if Manager is entitled to a management fee
pursuant to: (a) Section 12.1 (a), Owner shall pay Manager an amount
equal to the next monthly installment of the management fee which
would normally have accrued to it on the collection of rents during
the ensuing thirty (30) days immediately following the termination
date. The foregoing provisions for payment in lieu of actual
management fee shall apply only in the case of immediate termination
pursuant to this Section 13.2.
13.3 Authority to Execute Termination Notices. Notice of
termination for the purpose of either Article 13.1 or 13.2 must be
signed by persons holding a rank or position in the Owner's company
equal to or higher than that of the individuals who signed this
Agreement on behalf of Owner.
13.4 Termination Without Notice. Dissolution or termination of
the corporate or partnership existence of the Manager by merger,
consolidation or otherwise; or termination or suspension of Manager's
real estate brokerage license, if such license is required as a
condition to managing the Property; or death of the Manager, if an
individual, or death of general partner or Manager, if partnership; or
cessation on the Managers part to continue to do business; or failure
of the Manager to properly deal with and account for trust funds; or
bankruptcy, insolvency, or assignment for the benefit of the creditors
of the Manager shall effect an immediate termination of the Agreement
without notice. Action having for its purpose a reorganization or
reconstitution of the Manager shall likewise effect an immediate
termination.
13.5 Final Accounting. Upon termination of this Agreement for
any reason or the withdrawal of any Property, Manager shall deliver to
Owner the following with respect to each Property or with respect to
the Property withdrawn, as the case may be:
(a) a final accounting, reflecting the balance of income and
expenses on each such Property as of the date of termination
or withdrawal to be delivered within thirty (30) days after
such termination or withdrawal.
(b) Any balance or monies of Owner or tenant security deposits,
or both, held by Manager with respect to each such Property
to be delivered immediately upon such termination or
withdrawal.
(c) All records, contracts, leases, receipts for deposits,
unpaid bills and other papers or documents which pertain to
each such Property to be delivered immediately upon such
termination or withdrawal. Upon such termination or
withdrawal Owner will assume authorized unpaid bills.
ARTICLE 14. SUBSIDIARIES AND AFFILIATES
14.1 On Schedule E Manager has set forth all of its subsidiary
corporations, if any, and all persons corporations or other entities,
if any, controlling Manager and all persons, corporations or other
entities, if any, owned or controlled by such persons, corporations or
other persons, if any, which control Manager. During the continuance
of this Agreement, Manager shall promptly notify Owner of any changes
or additions to the information required to be set forth on Schedule
E. Any contract or lease of any kind whatsoever between Manager and
any persons, corporation or other entity listed or to be listed on
Schedule E shall be subject to the prior written approval of Owner,
and at Owner's sole discretion approval may be withheld.
ARTICLE 15. NOTICES.
Notices. All notices, demands, consents and reports provided
for in this Agreement shall be in writing and shall be given to the
Owner or Manager at the address set forth below or at such other
address as they individually may specify thereafter in writing:
OWNER: Prudential Realty-PRT
Attention General Manager-P.B.C.
3 Gateway Center, 13th Floor
Newark, New Jersey 07102-4082
MANAGER: PREMISYS Real Estate Services, Inc.
2500 CityWest Blvd., Suite 1300
Houston, Texas 77042
Such notice or other communication may be mailed by United States
registered or certified mail, return receipt requested, postage
prepaid and may be deposited in a United States Post Office or a
depository for the receipt of mail regularly maintained by the post
office. Such notices, demands, consents and reports may also be
delivered by hand, or by any other method or means permitted by law.
For purposes of this Agreement notices will be deemed to have been
"given" upon personal delivery thereof or 48 hours after having been
deposited in the United States mails as provided above.
ARTICLE 16. NON-ASSIGNABLE, ETC.
16.1 No Assignment. This Agreement and all rights hereunder,
shall not be assignable by either party hereto (except as may be
required by a surety company in a matter of subrogation).
16.2 Consent and Approvals. Owner's consents or approvals may
be given only by representatives of Owner from time to time designated
in writing by Owner's Regional Vice President located at the address
provided in or pursuant to Article 15.1. All such consents or
approvals shall also be in writing.
16.3 Pronouns. The pronouns used in this Agreement referring to
the Manager shall be understood and construed to apply whether the
Manager be an individual, partnership, corporation or an individual or
individuals doing business under a firm or trade name.
16.4 Amendments. Except as otherwise herein provided, any and
all amendments, additions or deletions to this Agreement shall be null
and void unless approved by the parties in writing. If, however, the
only change made is in the Manger's commission or fee, the new
commission or fee shall become effective upon written notice thereof
by Owner to the Manager. Upon receipt of such notice by the Manager,
Schedule A shall be deemed to have been amended to conform. A change
in the Leasing Guidelines set forth in Schedule C may similarly be
made by Owner. A change in Schedule E may similarly be made by
Manager.
16.5 Headings. All headings herein are inserted only for
convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.
16.6 Representations. Manager represents and warrants that it
is fully qualified and licensed, to the extent required by law, to
manage real estate and perform all obligations assumed by Manager
hereunder. Manager agrees to comply with all such laws now or
hereafter in effect.
16.7 Indemnification by Manager. Manager shall indemnify,
defend and hold Owner harmless from any and all claims, demands,
causes of action, losses, damages, fines, penalties, liabilities,
costs and expenses, including attorney's fees and court costs, (except
to the extent covered by insurance carried by Owner pursuant to
Article 4.1) sustained or incurred by or asserted against Owner, by
reason of or arising out of Manager's breach of the duties and
obligations required by this Agreement to be performed by it.
16.8 Complete Agreement. This Agreement and Schedules A, C, D
and E, attached hereto and made a part hereof, supersedes and takes
the place of any and all previous management agreements entered into
between the parties hereto relating to the Properties covered by this
Agreement.
16.9 Shareholder Responsibility. Neither the Shareholders nor
the Trustees nor officers, employees or agents of the Trust shall be
liable hereunder and Manager shall look solely to the Trust Estate for
the payment of any amounts due hereunder or for the performance of any
term hereunder.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement the date and year first above written.
PRUDENTIAL REALTY-PRT
BY: THE PRUDENTIAL PROPERTY COMPANY
ATTEST: BY: /s/ John Gregorits
John Gregorits,
/s/ Richard E. Pigott ITS General Manager
Richard E. Pigott
PREMISYS REAL ESTATE SERVICES, INC.
WITNESS: BY: /s/ Joe M. Hudec
Joe M. Hudec
/s/ Michael G. Mire ITS President/CEO
Michael G. Mire
STATE OF NEW JERSEY}
}SS.:
COUNTY OF ESSEX }
BE IT REMEMBERED that on this 10th day of January , 1991, before
me, the subscriber, a Notary Public of the State of New Jersey,
personally appeared John S. Gregorits, General Manager of PRUDENTIAL
REALTY-PRT, who, I am satisfied, is the person who has signed the
within Instrument; and I having first made known to him the contents
thereof, he thereupon acknowledged that he signed and delivered the
said instrument as such officer aforesaid, that the within Instrument
is the voluntary act and deed of said Trust made by virtue of
authority contained in the Declaration of Trust dated June 9, 1985.
/s/Teresa E. Miller
TERESA E. MILLER
A NOTARY PUBLIC OF NEW JERSEY
My Commission Expired March 12, 1995
PRUDENTIAL BUSINESS CAMPUS
MAPLE PLAZA I AND II
SCHEDULE A
MANAGEMENT FEES
Property Identification Annual Fee
And/Or (Street Address) Type of Legal Monthly Fee 1991 &
Loan No. City Building Status 1990 Beyond
RT01-01 4 Campus Drive Office GA 2% of $1500/mo vs
Maple Plaza I collections formula below
Parsippany, NJ whichever is
greater
RT01-02 6 Campus Drive Office GA 2% of $1500/mo vs
Maple Plaza II collections formula below
Parsippany, NJ whichever is
greater
Management Fee Formula
First $ 3,000,000 of collections * 2%
Next 1,000,000 of collections 1 1/2%
Over 4,000,000 of collections 1 1/4%
* Collections as defined here is the total revenue collections of 4 & 6
Campus Drive. Fee is calculated per above formula then allocated to
buildings on a pro-rate.
SCHEDULE C
MONTHLY REPORT FORM
1. BALANCE SHEET
2. STATEMENT OF OPERATION (including budget to actual comparison with
variance explanation).
3. ACCTS. RECEIVABLE AGING
4. ACCTS. PAYABLE - Detail listing that agrees with general ledger
trial balance.
5. RENT ROLL SUMMARY
6. GENERAL LEDGER
7. SECURITY DEPOSITS
8. CASH MANAGEMENT REPORTS
(a) Monthly Collections/Delinquencies (Monthly)
(b) Recovery of Fixed and Operating Expenses (Collections)
(Quarterly)
(c) Tenant Audit Program (retail properties only) (Yearly)
9. BANK STATEMENTS AND RECONCILIATIONS FOR ALL PROPERTY BANK
ACCOUNTS.
10. COPIES OF ALL INVOICES FOR CAPITAL EXPENDITURES.
SCHEDULE D
REIMBURSABLE EMPLOYEES
PRUDENTIAL BUSINESS CAMPUS
Effective Date 01-01-91
PROPERTY NAME PROPERTY NO. LOCATION (CITY, STATE)
1) 7 Campus Drive REC 528.2 Parsippany, New Jersey
2) 8 Campus Drive REC 528.5 Parsippany, New Jersey
3) 9 Campus Drive REC 528.3 Parsippany, New Jersey
4) 7 Sylvan Way REC 528.4 Parsippany, New Jersey
5) Two Hilton Court REC 528.6 Parsippany, New Jersey
6) 4 Campus Drive RT01-01 Parsippany, New Jersey
7) 6 Campus Drive RT01-02 Parsippany, New Jersey
8) P.B.C. Association REC 528.10 Parsippany, New Jersey
ALLOCATION BETWEEN PROPERITES
AS A PERCENTAGE
No.
With Salary 1 2 3 4 5
1)Sr. Prop. Manager 1 80,000-90,000 5.0 15.6 15.7 15.6 15.7
2)Asst. Prop. Manager 1 28,000-38,000 5.0 15.6 15.7 15.6 15.7
3)Chief Engineer 1 48,000-60,000 - 23.5 17.0 16.0 16.8
4)Admin. Assistant 1 22,000-27,000 - 16.6 16.7 16.6 16.7
5)Maint. Engineer 3 28,000-37,000 - 23.5 17.0 16.0 16.8
6)Maint. Mechanic 2 21,000-25,000 - 23.5 17.0 16.0 16.8
7)Secretary/Recp. 1 19,000-25,000 - 16.6 16.7 16.6 16.7
8)Maint. Helper 1 17,000-21,000 - 23.5 17.0 16.0 16.8
No.
With Salary 6 7 8 Bonded
1)Sr. Prop. Manager 1 80,000-90,000 15.7 15.7 1.0 Yes
2)Asst. Prop. Manager 1 28,000-38,000 15.7 15.7 1.0 Yes
3)Chief Engineer 1 48,000-60,000 10.7 16.0 - No
4)Admin. Assistant 1 22,000-27,000 16.7 16.7 - Yes
5)Maint. Engineer 3 28,000-37,000 10.7 16.0 - No
6)Maint. Mechanic 2 21,000-25,000 10.7 16.0 - No
7)Secretary/Recp. 1 19,000-25,000 16.7 16.7 - Yes
8)Maint. Helper 1 17,000-21,000 10.7 16.0 - No
100% Prudential /PruBeta-3 Reimbursable Employees As A Payroll Accommodations
1 2 3 4 5 6 7 8 Bonded
1)Marketing Director 1 82,000-95,000 - - - - - - - - NO
2)Const. Sec/Recep. 1 20,000-25,000 - - - - - - - - NO
1. With OWNER'S prior written approval, Manager may pay, in addition to
base salary and outside of Schedule D Range, a "Year End Bonus" to
recommended employees. Said bonus shall be awarded based on the
employees' performance to defined objectives and the financial
performance of the project.
2. On-site employees' salaries do not include PT&I costs and other
employee benefits.
OWNER APPROVAL: MANAGER APPROVAL:
BY: BY:
/s/ John S. Gregorits, Vice President
TITLE: VICE PRESIDENT TITLE: PRESIDENT
DATE: 1/10/91 DATE: 12/14/90
SCHEDULE E
SUBSIDIARIES AND AFFILIATES
None.