EXHIBIT 10.9
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this "Agreement") made this 22nd day of
April, 1994, between Mt. Pleasant Shopping Center, Angola Plaza and Shiloh
Plaza, each a Michigan co-partnership (collectively, the "Owner"), and AGREE
REALTY CORPORATION (the "Agent").
W I T N E S S E T H:
WHEREAS, Owner owns certain commercial properties in various areas
which are not being transferred to Agent pursuant to the transactions to be
entered into concurrently with Agent's initial public offering (the
"Formation");
WHEREAS, Owner is transferring to Agent as part of the Formation all
of the assets of the entity which prior to the Formation had provided
management services with respect to such properties; and
WHEREAS, Owner desires that Agent shall act as the management agent
for the Properties (as hereinafter defined), upon the terms and conditions
herein set forth, and Agent is willing to so act,
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the parties agree as follows:
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1. Appointment as Agent. Owner hereby appoints Agent as
the sole and exclusive management agent for the commercial properties
identified on Exhibit "A" attached hereto (the "Properties") for the term
of this Agreement.
2. Term. This Agreement shall remain in full force and
effect until the first to occur of the following events:
(a) Five (5) years from the date of the execution of this
Agreement, such agreement shall be automatically
renewed for an additional five-year term unless Agent
or Owner gives 90 days advance written notice to
terminate this Agreement.
(b) Owner sells or otherwise disposes of all of the
Properties.
(c) Agent, upon 30 days advance written notice to Owner,
elects to terminate this Agreement.
3. Management Functions. During the term of this Agreement,
Agent will provide the following services:
(a) Collect rents, including percentage rents and other
similar amounts to be paid by tenants of the Properties, and Agent
may give receipts for all amounts collected. Agent shall examine any
records of gross sales and any other reports submitted by tenants for
the purpose of computing the amounts of any percentage rents. Agent
shall have the right, in its own name or in the name of the Owner and
at the expense of Owner, to take any and all actions, which
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Agent deems advisable and which Owner might take, in the event of
breach by any tenant of any covenant, provision, or condition under
its lease with Owner. Agent shall not be required to institute legal
action against any tenant.
(b) Cause to be maintained (or cause the tenants to
maintain) the Properties and common areas thereof in good repair and
in a clean and orderly condition. Agent shall inform Owner in advance
of all anticipated, extraordinary expenditures in excess of $5,000
for any one item. Owner shall reimburse to Agent, pursuant to the
provisions of Section 5 hereof, all costs incurred by Agent in
performing its functions under this part (b) and Owner shall receive
credit for all rebates, commissions, discounts and allowances.
(c) Assist Owner in filling vacancies with new tenants and
obtain extensions and renewals of the leases of existing tenants. The
obligations of Agent and Owner under this part (c) shall extend to
the leasing of new space created by further improvement or
development of the Properties. Owner shall reimburse to Agent the
costs incurred by Agent in performing its functions under this part
(c).
(d) Maintain and prepare books and records showing all items
of income and expense in such detail and accuracy as will allow Owner
to prepare financial statements and tax returns in accordance with
generally accepted accounting principles consistently applied.
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(e) Delegate its duties under this Agreement to such
employees or other agents as Agent may select, but no such delegation
shall relieve Agent of its obligation to perform such duties.
(f) Perform such other services as are necessary or
customary for proper management and maintenance supervision of the
Properties.
4. Agent's Fees. For the services rendered by Agent, Owner shall
pay to Agent an annual sum equal to three and one-half percent (3-1/2%) of
the fixed monthly rent (plus percentage rent becoming due and payable under
the leases of all of the Properties). Such fees shall be deductible by Agent,
pursuant to the provisions of Section 5 hereof, from the rents collected.
5. Remittances to Owner. All funds collected by Agent in its
management of the Properties shall be deposited in a separate bank account.
After deduction of all costs, expenses and payments chargeable to Owner
pursuant to this Agreement (including the fees or other amounts owed or
otherwise payable to Agent pursuant to Sections 3(b), 4 or 7 herein), Agent
shall remit any balance to Owner within 10 calendar days following each month
during the terms of this Agreement.
6. Notice to Owner. Agent shall promptly advise Owner in
writing of the service upon Agent of any summons, subpoena or
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other similar documents setting forth any claimed liability of Owner or the
Properties.
7. Professional Fees. The Owner shall pay all legal and
other professional fees reasonably incurred by Agent in the management and
operation of the Properties.
8. Right of First Refusal.
(a) If the Owner receives and is willing to accept an
arms-length, bona fide, written offer (the "Third Party Offer") from an
unaffiliated third party (the "Third Party") to purchase all or any part of
the Properties (the "Subject Properties"), Agent shall have a right of first
refusal to buy the Subject Properties on the same terms and conditions as the
Third Party Offer. Owner shall send a written notice of such Third Party
Offer to the Agent, to which notice a copy of the Third Party Offer shall be
attached (the date of receipt of such notice by Agent is referred to herein
as the "Notice Date"). Such right shall be exercised, if at all, by the Agent
sending a written notice to the Owner within 30 days of the Notice Date (the
"Exercise Period").
(b) If the right of first refusal provided for in paragraph
8(a) above is not exercised within the Exercise Period or the Agent does not
consummate the transaction with respect to the Subject Properties within 120
days from and including the Notice Date, then the Owner may, at any time
during the 120 day period following the later of (i) the Exercise Period or
(ii) the
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120 day period following the Notice Date, transfer all or any part of the
Subject Properties to the Third Party in accordance with the Third Party
Offer; provided, however, such transfer shall be made to the Third Party only
on the terms and conditions of the Third Party Offer.
9. Indemnification. Owner shall indemnify and hold harmless Agent
from and against any and all claims, losses, fees and expenses (including
reasonable attorneys' fees and expenses) and liabilities arising from the
performance of its functions under this Agreement or arising out of damage to
property or injury to or death of persons at the Properties; provided,
however, this indemnification shall not apply to acts of willful misconduct
or gross negligence of Agent. Owner agrees to cause Agent to be named as an
additional insured under all public liability and Workmen's Compensation
Insurance maintained in connection with the Properties.
10. Assignment and Binding Effect. Agent shall have the right to
assign its rights under this Agreement with the written consent of Owner,
which consent shall not be unreasonably withheld. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto, their
respective legal representatives, heirs, successors and permitted assigns.
11. Notices. All notices relating to this Agreement shall
be in writing and shall be deemed to have been given at the time
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when delivered personally or sent in the United States by registered or
certified mail, return receipt requested, in a postpaid envelope, addressed
to the other party at the address set forth below, or to such changed address
as the other party may have fixed by notice; provided, however, that any
notice of change of address shall be effective only upon receipt:
To Owner:
c/o Agree Realty Corporation
31850 Northwestern Highway
Farmington Hills, Michigan 48334
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Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel
919 Third Avenue
New York, New York 10022
Attn: David P. Levin
To Agent:
31850 Northwestern Highway
Farmington Hills, Michigan 48334
12. Severability; Survival. If any provision of this Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall not
be affected thereby, and each provision hereof shall be enforced to the
fullest extent permitted by law.
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13. Governing Law. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Michigan
without regard to conflict of laws provisions.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
Mt. Pleasant Shopping Center
Angola Plaza
Shiloh Plaza,
each a Michigan co-partnership
By: its General Partner
/s/ Richard Agree
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Richard Agree
AGENT:
AGREE REALTY CORPORATION
By: /s/ Kenneth Howe
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Its Secretary
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