THIS AGREEMENT, made this 20th day of December, 1961, between THE FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, (an unincorporated Trust), having
offices at #477 Main Street, Hackensack, New Jersey, hereinafter referred to as
the "Trust", and S. HEKEMIAN & CO., INC. (now Hekemian & Co., Inc), a New Jersey
Corporation, having offices at #477 Main Street, Hackensack, New Jersey,
hereinafter referred to as the "Managing Agent";
W I T N E S S E T H:
WHEREAS, the Trust is about to engage in the business of investing in
improved and unimproved real estate and real estate mortgages and other
investments and will require and desires to retain the services of the Managing
Agent;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, IT IS UNDERSTOOD AND AGREED, as follows:
1. The Trust hereby retains and hires the Managing Agent as its sole
and exclusive agent to generally manage and service all of its
real estate properties and mortgages, and agrees during the term
of this Agreement to purchase, sell, exchange, rent, lease,
operate, maintain and service said investments only through and
by the Managing Agent.
2. The Managing Agent agrees to undertake said hiring and in
connection therewith and not in limitation or restriction thereof
specifically agrees to undertake the following:
(a) Seek out and recommend to the Trust investments suitable
for the Trust.
(b) At the request of the Trust to investigate any investments
that the Trust may contemplate making and report thereon
to the Trust.
(c) To rent or lease, on terms acceptable to the Trust, the
properties owned by the Trust.
(d) To collect and receive all rents, mortgage payments,
interest and all other income from real estate to which
the Trust is entitled, and to account monthly to the Trust
therefor. Managing Agent shall use its best effort to
collect rent
and other income from real estate interests of the Trust.
It may in it discretion compromise claims for such rent
and other income and may institute legal proceedings in
its own name or in the name of the Trust to collect same,
to oust or dispossess tenants or others occupying said
real estate interests and otherwise to enforce the rights
of the Trust with respect thereto. Managing Agent may in
its discretion compromise or settle such proceedings. The
foregoing authority to enforce the collection of rents and
to compromise or settle said proceedings except in
emergencies is subject to the prior approval of the
Trustees.
(e) To employ and supervise all labor and to purchase and
contract for all materials, supplies and services required
for the operation and ordinary maintenance, alteration,
improvement and repair of the Trust properties. Except in
those cases when, in the opinion of the Managing Agent, an
emergency necessitates so doing before the Trust approval
can be reasonably obtained, the Managing Agent shall not
make or incur extraordinary repairs, alterations or
improvements or expenditures without approval of the
Trust, and may, in connection with such extraordinary
repairs, alterations or improvements, hire or use its
employee or employees to coordinate and expedite said work
in addition to general contractors, sub-contractors and
architects as it may deem necessary, in which case the
salary or compensation of said employee or employees
attributable to the said work shall be chargeable to the
Trust.
(f) To periodically inspect all of the Trust properties and
make such recommendations for the maintenance and
improvement thereof as it deems advisable.
(g) From time to time to retain and cooperate with such
accountants, architects, engineers, contractors,
attorneys, and others, as it deems necessary for the
proper operation, maintenance and preservation of the
Trust properties and Trust affairs.
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(h) To purchase such insurance of every nature as it deems
advisable to protect the real estate interest of the
Trust, including but not limited to fire insurance with
extended coverage, boiler, elevator, public liability, and
workman's compensation insurance. The Trust shall be named
as a party in interest in such policies of insurance and
the policies or certificates of insurance shall be
delivered to the Trust. Managing Agent may receive from
others and retains its customary compensation for its
services as an insurance agent or broker in placing such
insurance.
(i) To check and present to the Trust for timely payment, all
payments due for taxes, insurance, mortgage payments and
all other obligations incurred in connection with the
operation, maintenance, alteration, improvement and repair
of Trust properties.
(j) In its discretion, to defend against and seek revision of,
or appeal from, any assessment or charge which it deems
improper. All such actions may be taken in the name of the
Trust or in Managing Agent's name, in the discretion of
the Managing Agent. Managing Agent may, if it deems
advisable, employ independent real estate experts for
appraisals and testimony in connection with such actions.
Managing Agent may also, in its discretion, pay any such
charges or assessments under protest and seek refunds
thereof, and compromise or settle any proceeding or claim
with respect thereto. Except in emergencies the foregoing
authority is to be exercised subject to the prior approval
of the Trustees.
(k) To service all mortgages owned by the Trust.
(l) To sell such of the real estate properties as the Trust
may, from time to time, decide to dispose of. To recommend
the sale and disposition of Trust properties as and when
it may deem advisable.
(m) To submit periodic and such special reports as the Trust
may require and request as to the properties managed by
the Managing Agent.
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(n) To maintain complete and accurate records of all its
transactions relating to real estate interests of the
Trust and make such records available for inspection by
the Trust or its representatives at reasonable times.
(o) To act as real estate consultant and adviser for the
Trust.
(p) To perform such other incidental duties in connection with
the proper operation, maintenance and improvement of the
real estate properties of the Trust as the Trust may
reasonably require and request.
3. The Trust hereby gives the Managing Agent the power and authority
necessary to perform the foregoing services and agrees to assume
the expenses and disbursements incurred in connection therewith,
and agrees to indemnify and save harmless the Managing Agent from
contractual or other liability claims, or other damages in the
performance of its duties hereunder to the extent that such
liability is not covered by insurance, and to the extent that it
does not arise by reason of the Managing Agent's gross
negligence, willful misconduct or actions committed by it in
violation of or beyond the scope of this Agreement, and to carry,
at its own expense, public liability, elevator liability, and
steam boiler insurance adequate to protect the interests of the
parties hereto, which policies shall be so written as to protect
the Managing Agent in the same manner and to the same extent as
the Trust. The Managing Agent agrees to indemnify and save the
Trust harmless from any claims or liability to the extent that
such liability is not covered by insurance and was incurred by
reason of the Managing Agent's gross negligence, willful
misconduct or actions committed by it in violation or beyond the
scope of this Agreement. The Managing Agent shall be entitled to
advice of counsel for the Trust with respect to any actions
undertaken by it or proposed to be undertaken by it under the
terms of this Agreement, and shall not be liable for any action
undertaken or omitted in good faith on the advice of such
counsel.
4. In consideration of the foregoing services to be performed by the
Managing Agent, the Trust agrees to pay to the Managing Agent,
the customary monthly management, rental and sales commissions
and fees in the manner and according to the recommended schedule
of commissions as adopted by the Bergen County Board of
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Realtors, or as set forth in a comparable schedule adopted by a
corresponding Board of Realtors of the area in which the property
affected is situate. Said commission may be reduced in such
amount as may be agreed upon between the Trust and the Managing
Agent as to be fair and reasonable in any transaction where its
size, nature or other factors, would, in the option of the
Trustees result in excessive compensation. Any services rendered
to the Trust for which a rate is not specified in the applicable
schedule will be compensated at the prevailing rates, or if there
is not prevailing rate, then at such rate as may be agreed upon
as fair and reasonable. In the case of purchases through the
Managing Agent where it is to the best interest of the Trust to
negotiate the purchase through a cooperating broker or on the
basis of a net purchase without compensation payable by the
Seller or at a commission payable by the Seller to the Managing
Agent at a rate less than the aforesaid applicable rates, the
Trust agrees to pay to the Managing Agent and the Managing Agent
agrees to accept such fair and reasonable compensation as to be
agreed upon between the Trust and the Managing Agent for the
Managing Agent's services in connection with said purchases. The
Managing Agent will receive no separate compensation from the
Trust for its advisory services, or for its services in acquiring
mortgages or in arranging financing. It may, however, receive and
retain compensation from mortgagees or others interested in such
financing, and in connection with insurance, it will retain
commissions from insurance companies on the placing of insurance
on trust properties.
5. At the termination or expiration of this Agreement, the Trust
shall pay to the Managing Agent, any deferred brokerage
commissions which otherwise would have become payable subsequent
to said termination or expiration and brokerage commissions on
acquisitions or dispositions of properties by the Trust with
respect to which negotiations are pending at the time of such
termination or expiration if and when such negotiations result in
an acquisition or disposition.
6. Managing Agent shall not make any claim under this Agreement
against the Trustees personally, or against the Beneficiaries of
the Trust, and shall look solely to the property of the Trust for
the payment of any claim hereunder.
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7. Managing Agent shall insert in all documents and agreements
prepared or executed by it on behalf of the Trust a provision
that the Trustees and the Beneficiaries shall not be personally
liable thereunder and that the other parties shall look solely to
the property of the Trust for the payment of any claim
thereunder, and reference shall be made to the Declaration of
Trust by which the Trust is constituted.
8. Managing Agent shall not, during the term of this Agreement,
acquire for its own account any real estate interest unless it
shall have first offered to the Trust the opportunity of making
such acquisition on the same terms and conditions.
9. The Trust agrees to refer to the Managing Agent all inquiries
received by it with reference to the rental or sale of all of its
real estate properties and all real estate properties offered to
the Trust for purchase, and the Managing Agent agrees to
investigate, report and recommend to the Trust thereon.
10. The Trust hereby authorizes the Managing Agent to affix on its
properties, appropriate sign or signs indicating, as the case may
be, that same are for sale, for rent, build to suit, or managed
by the Managing Agent.
11. The Trust has entered into this Agreement in reliance upon the
experience and ability of Managing Agent, and Managing Agent
shall not assign or transfer this Agreement. Nothing herein
contained, however, shall preclude the assignment or transfer of
this Agreement in connection with a reorganization or merger of
Managing Agent, nor the assignment by Managing Agent or any of
its duties of management under this Agreement to a wholly-owned
subsidiary.
12. In the event that the terms of this Agreement at any time shall
impair the status of the Trust as a "real estate investment
trust" within the meaning of the Amendment to the Internal
Revenue Code of 1954 #856 et seq., which became effective January
9, 1961, as now enacted or hereafter amended, the parties hereto
agree to negotiate such amendments to this Agreement as may be
necessary to restore or maintain such status. If for any reason
other than the terms of this Agreement, the Managing Agent shall
at any time during the terms of this Agreement not be an
"independent contractor" within the meaning of such provisions of
the Internal Revenue Code, the
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Managing Agent shall take such steps as may be necessary to be an
"independent contractor".
13. This Agreement shall be for a term of fifteen years and may be
terminated at the expiration of the term by not less than one
year prior written notice by either party to the other. In
default of such notice, this Agreement shall continue for
successive terms of two years on the same terms and conditions,
until terminated by notice in writing of either party to the
other not less than one year prior to the expiration of the then
current term.
In the event that the Trust shall terminate during the term of
this Agreement, this Agreement shall terminate at such time as the
liquidation and distribution of the assets of the Trust has been
substantially completed.
14. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, their successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed by their proper respective officers and caused their proper respective
seals to be hereunto affixed, the day and year first above written.
THE FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
By: /s/Wilton T. Barney
-----------------------
Wilton T. Barney, President
ATTEST: /s/Jack Charshafian
----------------------------
Jack Charshafian, Secretary
S. HEKEMIAN & CO., INC.
By: /s/Samuel Hekemian, Jr.
-----------------------
Samuel Hekemian, Jr., President
ATTEST: /s/Robert Hekemian
--------------------------
Robert Hekemian, Sec'y.
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This amendment made this 8th day of May, 1963 to an agreement made the
20th day of December 1961, between the first Real Estate Investment Trust of New
Jersey, a business Trust having offices at 477 Main Street, Hackensack, New
Jersey, hereinafter referred to as the "Trust", and S. Hekemian and Co., Inc.,
(now Hekemian & Co., Inc.), a New Jersey corporation having offices at 477 Main
Street, Hackensack, New Jersey, hereinafter referred to as the "Managing Agent".
There shall be added to the agreement the following provision:
15. Upon default under any regulatory agreement with the Federal
Housing agreement with the Federal Housing Commissioner, which
agreement is executed in connection with an F.H.A. insured
mortgage loan, and upon request from the Commissioner, this
agreement may be terminated as to the property covered by such
regulatory agreement upon thirty days written notice.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed by their proper officers and cause their proper seals to be hereunto
affixed, the day and year first above written.
FIRST REAL ESTATE INVESTMENT TRUST
OF NEW JERSEY
BY:/s/Wilton T. Barney
----------------------
Wilton T. Barney, President
ATTEST:
/s/Jack Charshafian
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Jack Charshafian, Secretary
S. HEKEMIAN & CO., INC.
BY:/s/Samuel Hekemian, Jr.
--------------------------
Samuel Hekemian, Jr., President
ATTEST:
/s/Robert Hekemian
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Robert Hekemian, Secretary
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RE: R.E.I.T. - S. HEKEMIAN & CO., INC.
MANAGEMENT AGREEMENT:
Paragraph 4 of the Management Agreement provides for compensation to be paid to
S. Hekemian & Co., Inc. for its services "the customary monthly management,
rental and sales commissions and fees in the manner and according to the
recommended schedule of commissions as adopted by the Bergen County Board of
Realtors, or as set forth in a comparable schedule adopted by a corresponding
Board of Realtors of the area in which the property affected is situate."
"Said commission may be reduced in such amount as may be agreed upon between the
Trust and the Managing Agent as to be fair and reasonable in any transaction
which its size, nature or other factors, would, in the option of the Trustees,
result in excessive compensation."
If there is no schedule of charges approved by the Real Estate Board then fair
and reasonable compensation is to be negotiated.
In the case of purchase of properties where there is a cooperative broker and
therefore the compensation to the Managing Agent would be reduced, a fair and
reasonable negotiated fee is to be agreed upon.
Therefore, from the above it would appear that it was contemplated and agreed
that the Agent is entitled to management and leasing fees based upon approved
Real Estate Board rates.
(Attached to Page 5)
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