Amerco Contracts
Employment.
(a)Owner
hereby retains Manager, and Manager agrees to act as manager of the Property
upon the terms and conditions hereinafter set forth.
(b)Owner
acknowledges that Manager, and/or Manager affiliates, is in the business
of
managing self-storage facilities and businesses conducted thereat, including,
but not limited to, the sale of packing supplies and rental of trucks and
equipment, both for its own account and for the account of others. It is
hereby
expressly agreed that notwithstanding this Agreement, Manager and such
affiliates may continue to engage in such activities, may manage facilities
other than those presently managed by Manager and its affiliates (whether
or not
such other facilities may be in direct or indirect competition with Owner)
and
may in the future engage in other business which may compete directly or
indirectly with activities of Owner.
(c)In
the
performance of its duties under this Agreement, Manager shall occupy the
position of an independent contractor with respect to Owner. Nothing contained
herein shall be construed as making the parties hereto (or any of them) partners
or joint venturors, nor construed as making Manager an employee of
Owner.
2.
Duties
and Authority of Manager.
Subject
to the terms and conditions of this Agreement:
1
(a)General
Duties and Authority.
Manager
shall have the sole and exclusive duty and authority to fully manage the
Property and supervise and direct the business and affairs associated or
related
to the daily operation thereof, to collect on behalf of Owner all revenues
related to the Property, to pay on behalf of Owner all expenses of the Property
(including payment of all debt service to the mortgage lender with respect
to
the Property) and to execute on behalf of Owner such documents and instruments
as, in the sole judgment of Manager, are reasonably necessary or advisable
under
the circumstances in order to fulfill Manager's duties hereunder. Such duties
and authority shall include, without limitation, those set forth
below.
(b)Renting
of the Property.
Manager
shall establish policies and procedures for the marketing activities for
the
Property, and shall advertise the Property through such media as Manager
deems
advisable, including, without limitation, advertising with the Yellow Pages.
Manager's marketing activities for the Property shall be consistent with
the
scope and quality implemented by Manager and its affiliates at any other
properties managed by Manager or its affiliates. Manager shall have the sole
discretion, which discretion shall be exercised in good faith, to establish
the
terms and conditions of occupancy by the Owners of the Property, and Manager
is
hereby authorized to enter into rental agreements on behalf and for the account
of Owner with such Owners and to collect rent from such Owners on behalf
and for
the account of Owner. Manager may jointly advertise the Property with other
properties owned or managed by Manager or its Affiliates, and in that event,
Manager shall reasonably allocate the cost of such advertising among such
properties.
(c)Repair,
Maintenance and Improvements.
Manager
shall make, execute, supervise and have control over the making and executing
of
all decisions concerning the acquisition of furniture, fixtures and supplies
for
the Property, and may purchase, lease or otherwise acquire the same on behalf
of
Owner. Manager shall make and execute, or supervise and have control over
the
making and executing of all decisions concerning the maintenance, repair,
and
landscaping of the Property, provided, however, that such maintenance, repair
and landscaping shall be consistent with the maintenance, repair and landscaping
implemented by Manager and its affiliates at any other properties managed
by
Manager or its affiliates. Manager shall, on behalf of Owner, negotiate and
contract for and supervise the installation of all capital improvements related
to the Property; provided, however, that Manager agrees to secure the prior
written approval of Owner on all such expenditures in excess of any threshold
amounts set forth in any loan documents relating to the Property (collectively,
“Loan Documents”) for any one item, except monthly or recurring operating
charges and/or emergency repairs if in the opinion of Manager such
emergency-related expenditures are necessary to protect the Property from
damage
or to maintain services to the Owners or self-storage licensees as called
for in
their respective leases or self-storage agreements.
2
(d)Personnel.
Manager
shall select all vendors, suppliers, contractors, subcontractors and employees
with respect to the Property and shall hire, discharge and supervise all
labor
and employees required for the operation and maintenance of the Property.
Any
employees so hired shall be employees of Manager, and shall be carried on
the
payroll of Manager. Employees may include, but need not be limited to, on-site
resident managers, on-site assistant managers, and relief managers located,
rendering services, or performing activities on the Property in connection
with
its operation and management. The cost of employing such persons shall not
exceed prevailing rates for comparable persons performing the same or similar
services with respect to real estate similar to the Property in the general
vicinity of each respective Property. Manager shall be responsible for all
legal
and insurance requirements relating to its employees.
(e)Service
Agreements.
Manager
shall negotiate and execute on behalf of Owner such agreements which Manager
deems necessary or advisable for the furnishing of utilities, services,
concessions and supplies, for the maintenance, repair and operation of the
Property and such other agreements which may benefit the Property or be
incidental to the matters for which Manager is responsible
hereunder.
(f)Other
Decisions.
Manager
shall make the decisions in connection with the day-to-day operations of
the
Property.
(g)Regulations
and Permits.
Manager
shall comply in all respects with any statute, ordinance, law, rule, regulation
or order of any governmental or regulatory body, having jurisdiction over
the
Property (collectively, "Laws"), respecting the use of the Property or the
maintenance or operation thereof, the non-compliance with which could reasonably
be expected to have a material adverse effect on Owner or any Property. Manager
shall apply for and obtain and maintain, on behalf of Owner, all licenses
and
permits required or advisable (in the reasonable judgment of Manager) in
connection with the management and operation of the Property. Notwithstanding
the foregoing, Manager shall be permitted to contest any Applicable Laws
to the
extent and pursuant to the same conditions that Owner is permitted to contest
any Laws under the Loan Documents.
(h)Records
and Reports of Disbursements and Collections.
Manager
shall establish, supervise, direct and maintain the operation of a system
of
record keeping and bookkeeping with respect to all receipts and disbursements
in
connection with the management and operation of the Property. The books,
records
and accounts shall be maintained at the Manager's office or at Owner's office,
or at such other location as Manager and Owner shall determine, and shall
be
available and open to examination and audit quarterly by Owner, its
representatives, and, subject to the terms of the Loan Documents, any mortgagee
of the Property, and such mortgagee's representative. On or before sixty
(60)
days after the close of each quarter, Manager shall cause to be prepared
and
delivered to Owner a monthly statement on a per-Property basis, of receipts,
expenses and charges, together with a statement, on a per-Property basis,
of the
disbursements made by Manager during such period on Owner's behalf.
3
(i)Collection.
Manager
shall be responsible for the billing and collection of all accounts receivable
and for payment of all accounts payable with respect to the Property and
shall
be responsible for establishing policies and procedures to minimize the amount
of bad debts.
(j)Legal
Actions.
Manager
shall cause to be instituted, on behalf and in its name or in the name of
Owner
as appropriate, any and all legal actions or proceedings Manager deems necessary
or advisable to collect charges, rent or other income due to Owner with respect
to the Property and to oust or dispossess Owners or other persons unlawfully
in
possession under any lease, license, concession agreement or otherwise, and
to
collect damages for breach thereof or default thereunder by such Owner,
licensee, concessionaire or occupant.
(k)Insurance.
Manager
shall obtain and maintain (or cause to be obtained and maintained) in full
force
and effect the insurance with respect to the Property and the operation of
Owner's and Manager's business operations thereat, and Manager's employees,
as
required by the Loan Documents.
(l)Taxes.
During
the term of this Agreement, Manager shall pay on behalf of Owner, prior to
delinquency, all real estate taxes, personal property taxes, and all other
taxes
assessed to, or levied upon, the Property. If required by the holder of any
note
secured by the Property, Manager will set aside, from Owner's funds, a reserve
from each month's rent and other income collected, in an amount required
by said
holder for purposes of payment of real property taxes.
(m)Limitations
on Manager Authority.
Notwithstanding anything to the contrary set forth in this Section 2, Manager
shall not, without obtaining the prior written consent of Owner, (i) rent
storage space in the Property by written lease or agreement for a stated
term in
excess of one year unless such lease or agreement is terminable by the giving
of
not more than thirty (30) days written notice, (ii) alter the building or
other
structures of the Property in violation of the Loan Documents; (iii) make
any
other agreements which exceed a term of one year and are not terminable on
thirty day's notice at the will of Owner, without penalty, payment or surcharge;
(iv) act in violation of any Law, or (v) violate any term or condition of
the
Loan Documents.
(n)Shared
Expenses.
Owner
acknowledges that certain economies may be achieved with respect to certain
expenses to be incurred by Manager on behalf of Owner hereunder if materials,
supplies, insurance or services are purchased by Manager in quantity for
use not
only in connection with Owner's business at the Property but in connection
with
other properties owned or managed by Manager or its affiliates. Manager shall
have the right to purchase such materials, supplies, insurance and/or services
in its own name and charge Owner a pro rata allocable share of the cost of
the
foregoing; provided, however, that the pro rata cost of such purchase to
Owner
shall not result in expenses that are either inconsistent with the expenses
of
other "U-Haul branded" locations in the general vicinity of the applicable
Property or greater than would otherwise be incurred at competitive prices
and
terms available in the area where the Property is located; and provided further,
Manager shall give Owner access to records (at no cost to Owner) so Owner
may
review any such expenses incurred.
4
(o)Deposit
of Gross Revenues.
All
Gross Revenues (as hereinafter defined) shall be deposited into a bank account
maintained by U-Haul (or its parent company) as for the benefit of the Owner.
To
the extent that the Gross Revenues are deposited into a collective account
maintained by U-Haul (or its parent company) for the benefit of multiple
property owners, U-Haul (or its parent company) shall reconcile such account
daily and maintain such records as shall clearly identify each day the
respective interest of each owner in such collective account. Gross Revenues
of
the Owner shall be applied first to the repayment of Owner’s senior debt with
respect to the Property, and then to U-Haul in reimbursement of expenses
and for
management fees as provided under Section 4 below.
(p)Obligations
under Loan Documents and other Material Contracts.
Manager
shall take such actions as are necessary or appropriate under the circumstances
to ensure that Owner is in compliance with the terms of the Loan Documents
and
any other material agreement relating to the Property to which Owner is a
party.
Nothing herein contained shall be deemed to obligate Manager to fund from
its
own resources any payments owed by Owner under the Loan Documents or otherwise
be deemed to make Manager a direct obligor under the Loan Documents, except
as
may otherwise be expressly provided therein.
(q)Obligations
notwithstanding other Tenancy at the Property.
Manager
shall perform all of its obligations under this Agreement in a professional
manner consistent with the standards it employs at all of its managed locations.
3.
Duties
of Owner.
Owner
shall cooperate with Manager in the performance of Manager's duties under
this
Agreement and to that end, upon the request of Manager, to provide, at such
rental charges, if any, as are deemed appropriate, reasonable office space
for
Manager employees on the premises of the Property (to the extent available)
and
to give Manager access to all files, books and records of Owner relevant
to the
Property. Owner shall not unreasonably withhold or delay any consent or
authorization to Manager required or appropriate under this Agreement.
4.
Compensation
of Manager.
(a)Reimbursement
of Expenses.
Manager
shall be entitled to reimbursement, on a quarterly basis, for all out-of-pocket
reasonable and customary expenses actually incurred by Manager in the discharge
of its duties hereunder. Such reimbursement shall be the obligation of Owner,
whether or not Gross Revenues are sufficient to pay such amounts. If and
to the
extent Gross Revenue for any fiscal quarter shall be in excess of the amounts
necessary to pay current expenses (after payment of all obligations under
the
Loan Documents), at Owner's option the Manager shall hold all or a portion
of
such excess in an interest-bearing escrow account to be applied at Owner's
direction to cover future expenses. Any interest earned thereon shall be
added
to and treated as part of such account.
5
(b)Management
Fee.
Owner
shall pay to Manager as the full amount due for the services herein provided
a
quarterly fee (the "Management Fee") which shall be four percent (4%) of
the
Property's trailing twelve month Gross Revenue divided by four (4) ("Base
Fee"),
plus an annual incentive fee (the "Incentive Fee") based upon the performance
of
the Property as set forth on Exhibit B hereto. For purposes of this Agreement,
the term "Gross Revenue" shall mean all receipts (excluding security deposits
unless and until Owner recognizes the same as income) of Manager or Owner
(whether or not received by Manager on behalf or for the account of Owner)
arising from the operation of Owner's business at the Property, including
without limitation, rental payments of self-storage customers at the Property,
vending machine or concessionaire revenues, maintenance charges, if any,
paid by
the Owners of the Property in addition to basic rent and parking fees, if
any.
Gross Revenue shall be determined on a cash basis. Subject to the terms of
Sections 2(o), the Management Fee shall be paid promptly, in arrears, within
thirty (30) days of Owner's receipt of the invoice therefor, which invoice
shall
be sent from Manager to Owner following the end of each calendar quarter.
Such
invoice shall be itemized and shall include reasonable detail.
Except
as
provided in this Section 4, it is further understood and agreed that Manager
shall not be entitled to additional compensation of any kind in connection
with
the performance by it of its duties under this Agreement.
(c)Inspection
of Books and Records.
Owner
shall have the right, upon prior reasonable notice to Manager, to inspect
Manager's books and records with respect to the Property, to assure that
proper
fees and charges are assessed hereunder. Manager shall cooperate with any
such
inspection. Owner shall bear the cost of any such inspection; provided, however,
that if it is ascertained that Manager has overcharged Owner by more than
5% in
any given quarter, the cost of such inspection shall be borne by Manager.
Manager shall promptly reimburse Owner for any overpayment.
6
5.
Use
of Trademarks, Service Marks and Related
Items.
Owner
acknowledges the significant value of the "U-Haul" name in the operations
of
Owner's property and it is therefore understood and agreed that the name,
trademark and service mark "U-Haul", and related marks, slogans, caricatures,
designs and other trade or service items (the "Manager
Trade Marks")
shall
be utilized for the non-exclusive benefit of Owner in the rental and operation
of the Property, and in comparable operations elsewhere. It is further
understood and agreed that this name and all such marks, slogans, caricatures,
designs and other trade or service items shall remain and be at all times
the
property of Manager and its affiliates, and that, except as expressly provided
in this Agreement, Owner shall have no right whatsoever therein. Owner agrees
that during the term of this agreement the sign faces at the property will
have
the name "U-Haul." The U-Haul sign faces will be paid for by Owner. Unless
Owner
has elected to continue to use the Manager Trade Marks as provided in Section
6
of this Agreement, upon termination of this agreement at any time for any
reason, all such use by and for the benefit of Owner of any such name, mark,
slogan, caricature, design or other trade or service item in connection with
the
Property shall be terminated and any signs bearing any of the foregoing shall
be
removed from view and no longer used by Owner. In addition, upon termination
of
this Agreement at any time for any reason, Owner shall not enter into any
new
leases of Property using the Manager lease form or use other forms prepared
by
Manager. It is understood and agreed that Manager will use and shall be
unrestricted in its use of such name, mark, slogan, caricature, design or
other
trade or service item in the management and operation of other storage
facilities both during and after the expiration or termination of the term
of
this Agreement.
6.
Default;
Termination.
(a)Any
material failure by Manager or Owner (a "Defaulting
Party")
to
perform their respective duties or obligations hereunder (other than a default
by Owner under Section 4 of this Agreement), which material failure is not
cured
within thirty (30) calendar days after receipt of written notice of such
failure
from the non-defaulting party, shall constitute an event of default hereunder;
provided, however, the foregoing shall not constitute an event of default
hereunder in the event the Defaulting Party commences cure of such material
failure within such thirty (30) day period and diligently prosecutes the
cure of
such material failure thereafter but in no event shall such extended cure
period
exceed ninety (90) days from the date of receipt by the non-defaulting party
of
written notice of such material default; provided further, however, that
in the
event such material failure constitutes a default under the terms of the
Loan
Documents and the cure period for such matter under the Loan Documents is
shorter than the cure period specified herein, the cure period specified
herein
shall automatically shorten such that it shall match the cure period for
such
matter as specified under the Loan Documents. In addition, following notice
to
Manager of the existence of any such material failure by Manager, Owner shall
each have the right to cure any such material failure by Manager, and any
sums
so expended in curing shall be owed by Manager to such curing party and may
be
offset against any sums owed to Manager under this Agreement.
7
(b)Any
material failure by Owner to perform its duties or obligations under Section
4,
which material failure is not cured within ten (10) calendar days after receipt
of written notice of such failure from Manager, shall constitute an event
of
default hereunder.
(c)Owner
shall have the right to terminate this Agreement, with or without cause,
by
giving not less than thirty (30) days' written notice to Manager pursuant
to
Section 14 hereof. Manager shall have the right to terminate this Agreement,
with or without cause, by giving not less than ninety (90) days' written
notice
to Owner pursuant to Section 14 hereof.
(d)Upon
termination of this Agreement, (x) Manager shall promptly return to Owner
all
monies, books, records and other materials held by Manager for or on behalf
of
Owner and shall otherwise cooperate with Owner to promote and ensure a smooth
transition to the new manager and (y) Manager shall be entitled to receive
its
Management Fee and reimbursement of expenses through the effective date of
such
termination, including the reimbursement of any prepaid expenses for periods
beyond the date of termination (such as Yellow Pages advertising).
7.
Indemnification.
Manager
hereby agrees to indemnify, defend and hold Owner, all persons and companies
affiliated with Owner, and all officers, shareholders, directors, employees
and
agents of Owner and of any affiliated companies or persons (collectively,
the
"Indemnified Persons") harmless from any and all costs, expenses, attorneys'
fees, suits, liabilities, judgments, damages, and claims in connection with
the
management of the Property and operations thereon (including the loss of
use
thereof following any damage, injury or destruction), arising from any cause
or
matter whatsoever, including, without limitation, any environmental condition
or
matter, except to the extent attributable to the willful misconduct or gross
negligence on the part of the Indemnified Persons.
8.
Assignment.
Manager
shall not assign this Agreement to any party without the consent of
Owner.
9.
Standard
for Property Manager's
Responsibility.
Manager
agrees that it will perform its obligations hereunder according to industry
standards, in good faith, and in a commercially reasonable manner.
10.
Estoppel
Certificate.
Each
of
Owner and Manager agree to execute and deliver to one another, from time
to
time, within ten (10) business days of the requesting party's written request,
a
statement in writing certifying, to the extent true, that this Agreement
is in
full force and effect, and acknowledging that there are not, to such parties
knowledge, any uncured defaults or specifying such defaults if they are claimed
and any such other matters as may be reasonably requested by such requesting
party.
8
11.
Term;
Scope.
Subject
to the provisions hereof, this Agreement shall have an initial term (such
term,
as extended or renewed in accordance with the provisions hereof, being called
the "Term")
commencing on the date hereof (the "Commencement
Date")
and
ending on the last day of the one hundred and twentieth (120th) calendar
month
next following the date hereof (the "Expiration
Date"),
provided however, the Term shall expire with respect to any individual Property
as to which the Loan Documents have terminated in accordance with the terms
of
the Loan Documents (for instance due to a significant casualty or condemnation).
12.
Headings.
The
headings contained herein are for convenience of reference only and are not
intended to define, limit or describe the scope or intent of any provision
of
this Agreement.
13.
Governing
Law.
The
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties shall be governed by the internal
laws
of the State of Arizona.
14.
Notices.
Any
notice required or permitted herein shall be in writing and shall be personally
delivered or mailed first class postage prepaid or delivered by an overnight
delivery service to the respective addresses of the parties set forth above
on
the first page of this Agreement, or to such other address as any party may
give
to the other in writing. Any notice required by this Agreement will be deemed
to
have been given when personally served or one day after delivery to an overnight
delivery service or five days after deposit in the first class mail. Any
notice
to Owner shall be to the attention of President, 715 South Country Club Drive,
Mesa, AZ 85210. Any notice to Manager shall be to the attention of c/o U-Haul
International, Inc. Legal Dept, 2721 North Central Avenue, Phoenix, AZ 85004,
Attn: Secretary.
15.
Severability.
Should
any term or provision hereof be deemed invalid, void or unenforceable either
in
its entirety or in a particular application, the remainder of this Agreement
shall nonetheless remain in full force and effect and, if the subject term
or
provision is deemed to be invalid, void or unenforceable only with respect
to a
particular application, such term or provision shall remain in full force
and
effect with respect to all other applications.
16.
Successors.
This
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their permitted assigns and successors in
interest.
9
17.
Attorneys'
Fees.
If
it
shall become necessary for any party hereto to engage attorneys to institute
legal action for the purpose of enforcing their respective rights hereunder
or
for the purpose of defending legal action brought by the other party hereto,
the
party or parties prevailing in such litigation shall be entitled to receive
all
costs, expenses and fees (including reasonable attorneys' fees) incurred
by it
in such litigation (including appeals).
18.Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
10
IN
WITNESS WHEREOF, the undersigned execute this Agreement as of the date set
forth
above.
Owner:
Five
SAC
RW MS, LLC, a
Delaware
limited liability Company
By:
_/s/ Bruce Brockhagen__________
Bruce
Brockhagen, Secretary
Manager:
U-Haul
Co. of Arizona, Inc.
U-Haul
Co. of Ohio, Inc.
U-Haul
Co. of Michigan, Inc.
U-Haul
Co. of Texas, Inc.
U-Haul
Co. of Washington DC, Inc.
U-Haul
Co. of Maryland, Inc.
U-Haul
Co. of Illinois, Inc.
U-Haul
Co. of Georgia, Inc.
U-Haul
Co. of Florida
By: /s/
Jennifer M. Settles____________
Jennifer
M. Settles,
Secretary
11
Exhibit
A
U-HAUL
CTR AZ AVE & RIGGS RD, Chandler, AZ
723027
U-HAUL
CENTER RIVER VALLEY, Lancaster, OH
769057
U-HAUL
CTR OF TEL-WICK, Taylor, MI
752023
UHAULCENTER
OF NORTH PLANO, Plano, TX
741045
U-HAUL
OF SO CAPITOL ST, Washington, DC
818037
U-HAUL
CTR SNOUFFER SCHOOL RD, Gaithersburg, MD
818025
U-HAUL
CENTER OF BOLINGBROOK, Bolingbrook, IL
757023
U-HAUL
CENTER OF DOUGLASVLLE, Douglasville, GA
777027
U-HAUL
OF TOWN & CNTRY, Tampa, FL
786023
12
Exhibit
B
Management
Fee Incentives
The
following Incentive Fee shall be calculated and, if and to the extent earned,
paid, annually after the end of each fiscal year of Owner:
In
the
event that net operating income of the Property equals or exceeds 110% (but
less
than 120%) of principal and interest under the Loan Documents (“P&I”) for
the prior fiscal year being calculated, the Incentive Fee for such period
shall
be 1% of the Property's Gross Revenue for such fiscal year.
In
the
event that net operating income of the Property equals or exceeds 120% (but
less
than 130%) of P&I for the prior fiscal year being calculated, the Incentive
Fee for such period shall be 2% of the Property's Gross Revenue for such
fiscal
year.
In
the
event that net operating income of the Property equals or exceeds 130% (but
less
than 140%) of P&I for the prior fiscal year being calculated, the Incentive
Fee for such period shall be 3% of the Property's Gross Revenue for such
fiscal
year.
In
the
event that net operating income of the Property equals or exceeds 140% (but
less
than 150%) of P&I for the prior fiscal year being calculated, the Incentive
Fee for such period shall be 4% of the Property's Gross Revenue for such
fiscal
year.
In
the
event that net operating income of the Property equals or exceeds 150% of
P&I for the prior fiscal year being calculated, the Incentive Fee for such
period shall be 6% of the Property's Gross Revenue for such fiscal
year.
13
Sample Business Contracts
Property Management Agreement - Five SAC RW MS LLC and U-Haul
Management Forms
Employment.
(a)Owner
hereby retains Manager, and Manager agrees to act as manager of the Property
upon the terms and conditions hereinafter set forth.
(b)Owner
acknowledges that Manager, and/or Manager affiliates, is in the business
of
managing self-storage facilities and businesses conducted thereat, including,
but not limited to, the sale of packing supplies and rental of trucks and
equipment, both for its own account and for the account of others. It is
hereby
expressly agreed that notwithstanding this Agreement, Manager and such
affiliates may continue to engage in such activities, may manage facilities
other than those presently managed by Manager and its affiliates (whether
or not
such other facilities may be in direct or indirect competition with Owner)
and
may in the future engage in other business which may compete directly or
indirectly with activities of Owner.
(c)In
the
performance of its duties under this Agreement, Manager shall occupy the
position of an independent contractor with respect to Owner. Nothing contained
herein shall be construed as making the parties hereto (or any of them) partners
or joint venturors, nor construed as making Manager an employee of
Owner.
2.
Duties
and Authority of Manager.
Subject
to the terms and conditions of this Agreement:
1
(a)General
Duties and Authority.
Manager
shall have the sole and exclusive duty and authority to fully manage the
Property and supervise and direct the business and affairs associated or
related
to the daily operation thereof, to collect on behalf of Owner all revenues
related to the Property, to pay on behalf of Owner all expenses of the Property
(including payment of all debt service to the mortgage lender with respect
to
the Property) and to execute on behalf of Owner such documents and instruments
as, in the sole judgment of Manager, are reasonably necessary or advisable
under
the circumstances in order to fulfill Manager's duties hereunder. Such duties
and authority shall include, without limitation, those set forth
below.
(b)Renting
of the Property.
Manager
shall establish policies and procedures for the marketing activities for
the
Property, and shall advertise the Property through such media as Manager
deems
advisable, including, without limitation, advertising with the Yellow Pages.
Manager's marketing activities for the Property shall be consistent with
the
scope and quality implemented by Manager and its affiliates at any other
properties managed by Manager or its affiliates. Manager shall have the sole
discretion, which discretion shall be exercised in good faith, to establish
the
terms and conditions of occupancy by the Owners of the Property, and Manager
is
hereby authorized to enter into rental agreements on behalf and for the account
of Owner with such Owners and to collect rent from such Owners on behalf
and for
the account of Owner. Manager may jointly advertise the Property with other
properties owned or managed by Manager or its Affiliates, and in that event,
Manager shall reasonably allocate the cost of such advertising among such
properties.
(c)Repair,
Maintenance and Improvements.
Manager
shall make, execute, supervise and have control over the making and executing
of
all decisions concerning the acquisition of furniture, fixtures and supplies
for
the Property, and may purchase, lease or otherwise acquire the same on behalf
of
Owner. Manager shall make and execute, or supervise and have control over
the
making and executing of all decisions concerning the maintenance, repair,
and
landscaping of the Property, provided, however, that such maintenance, repair
and landscaping shall be consistent with the maintenance, repair and landscaping
implemented by Manager and its affiliates at any other properties managed
by
Manager or its affiliates. Manager shall, on behalf of Owner, negotiate and
contract for and supervise the installation of all capital improvements related
to the Property; provided, however, that Manager agrees to secure the prior
written approval of Owner on all such expenditures in excess of any threshold
amounts set forth in any loan documents relating to the Property (collectively,
“Loan Documents”) for any one item, except monthly or recurring operating
charges and/or emergency repairs if in the opinion of Manager such
emergency-related expenditures are necessary to protect the Property from
damage
or to maintain services to the Owners or self-storage licensees as called
for in
their respective leases or self-storage agreements.
2
(d)Personnel.
Manager
shall select all vendors, suppliers, contractors, subcontractors and employees
with respect to the Property and shall hire, discharge and supervise all
labor
and employees required for the operation and maintenance of the Property.
Any
employees so hired shall be employees of Manager, and shall be carried on
the
payroll of Manager. Employees may include, but need not be limited to, on-site
resident managers, on-site assistant managers, and relief managers located,
rendering services, or performing activities on the Property in connection
with
its operation and management. The cost of employing such persons shall not
exceed prevailing rates for comparable persons performing the same or similar
services with respect to real estate similar to the Property in the general
vicinity of each respective Property. Manager shall be responsible for all
legal
and insurance requirements relating to its employees.
(e)Service
Agreements.
Manager
shall negotiate and execute on behalf of Owner such agreements which Manager
deems necessary or advisable for the furnishing of utilities, services,
concessions and supplies, for the maintenance, repair and operation of the
Property and such other agreements which may benefit the Property or be
incidental to the matters for which Manager is responsible
hereunder.
(f)Other
Decisions.
Manager
shall make the decisions in connection with the day-to-day operations of
the
Property.
(g)Regulations
and Permits.
Manager
shall comply in all respects with any statute, ordinance, law, rule, regulation
or order of any governmental or regulatory body, having jurisdiction over
the
Property (collectively, "Laws"), respecting the use of the Property or the
maintenance or operation thereof, the non-compliance with which could reasonably
be expected to have a material adverse effect on Owner or any Property. Manager
shall apply for and obtain and maintain, on behalf of Owner, all licenses
and
permits required or advisable (in the reasonable judgment of Manager) in
connection with the management and operation of the Property. Notwithstanding
the foregoing, Manager shall be permitted to contest any Applicable Laws
to the
extent and pursuant to the same conditions that Owner is permitted to contest
any Laws under the Loan Documents.
(h)Records
and Reports of Disbursements and Collections.
Manager
shall establish, supervise, direct and maintain the operation of a system
of
record keeping and bookkeeping with respect to all receipts and disbursements
in
connection with the management and operation of the Property. The books,
records
and accounts shall be maintained at the Manager's office or at Owner's office,
or at such other location as Manager and Owner shall determine, and shall
be
available and open to examination and audit quarterly by Owner, its
representatives, and, subject to the terms of the Loan Documents, any mortgagee
of the Property, and such mortgagee's representative. On or before sixty
(60)
days after the close of each quarter, Manager shall cause to be prepared
and
delivered to Owner a monthly statement on a per-Property basis, of receipts,
expenses and charges, together with a statement, on a per-Property basis,
of the
disbursements made by Manager during such period on Owner's behalf.
3
(i)Collection.
Manager
shall be responsible for the billing and collection of all accounts receivable
and for payment of all accounts payable with respect to the Property and
shall
be responsible for establishing policies and procedures to minimize the amount
of bad debts.
(j)Legal
Actions.
Manager
shall cause to be instituted, on behalf and in its name or in the name of
Owner
as appropriate, any and all legal actions or proceedings Manager deems necessary
or advisable to collect charges, rent or other income due to Owner with respect
to the Property and to oust or dispossess Owners or other persons unlawfully
in
possession under any lease, license, concession agreement or otherwise, and
to
collect damages for breach thereof or default thereunder by such Owner,
licensee, concessionaire or occupant.
(k)Insurance.
Manager
shall obtain and maintain (or cause to be obtained and maintained) in full
force
and effect the insurance with respect to the Property and the operation of
Owner's and Manager's business operations thereat, and Manager's employees,
as
required by the Loan Documents.
(l)Taxes.
During
the term of this Agreement, Manager shall pay on behalf of Owner, prior to
delinquency, all real estate taxes, personal property taxes, and all other
taxes
assessed to, or levied upon, the Property. If required by the holder of any
note
secured by the Property, Manager will set aside, from Owner's funds, a reserve
from each month's rent and other income collected, in an amount required
by said
holder for purposes of payment of real property taxes.
(m)Limitations
on Manager Authority.
Notwithstanding anything to the contrary set forth in this Section 2, Manager
shall not, without obtaining the prior written consent of Owner, (i) rent
storage space in the Property by written lease or agreement for a stated
term in
excess of one year unless such lease or agreement is terminable by the giving
of
not more than thirty (30) days written notice, (ii) alter the building or
other
structures of the Property in violation of the Loan Documents; (iii) make
any
other agreements which exceed a term of one year and are not terminable on
thirty day's notice at the will of Owner, without penalty, payment or surcharge;
(iv) act in violation of any Law, or (v) violate any term or condition of
the
Loan Documents.
(n)Shared
Expenses.
Owner
acknowledges that certain economies may be achieved with respect to certain
expenses to be incurred by Manager on behalf of Owner hereunder if materials,
supplies, insurance or services are purchased by Manager in quantity for
use not
only in connection with Owner's business at the Property but in connection
with
other properties owned or managed by Manager or its affiliates. Manager shall
have the right to purchase such materials, supplies, insurance and/or services
in its own name and charge Owner a pro rata allocable share of the cost of
the
foregoing; provided, however, that the pro rata cost of such purchase to
Owner
shall not result in expenses that are either inconsistent with the expenses
of
other "U-Haul branded" locations in the general vicinity of the applicable
Property or greater than would otherwise be incurred at competitive prices
and
terms available in the area where the Property is located; and provided further,
Manager shall give Owner access to records (at no cost to Owner) so Owner
may
review any such expenses incurred.
4
(o)Deposit
of Gross Revenues.
All
Gross Revenues (as hereinafter defined) shall be deposited into a bank account
maintained by U-Haul (or its parent company) as for the benefit of the Owner.
To
the extent that the Gross Revenues are deposited into a collective account
maintained by U-Haul (or its parent company) for the benefit of multiple
property owners, U-Haul (or its parent company) shall reconcile such account
daily and maintain such records as shall clearly identify each day the
respective interest of each owner in such collective account. Gross Revenues
of
the Owner shall be applied first to the repayment of Owner’s senior debt with
respect to the Property, and then to U-Haul in reimbursement of expenses
and for
management fees as provided under Section 4 below.
(p)Obligations
under Loan Documents and other Material Contracts.
Manager
shall take such actions as are necessary or appropriate under the circumstances
to ensure that Owner is in compliance with the terms of the Loan Documents
and
any other material agreement relating to the Property to which Owner is a
party.
Nothing herein contained shall be deemed to obligate Manager to fund from
its
own resources any payments owed by Owner under the Loan Documents or otherwise
be deemed to make Manager a direct obligor under the Loan Documents, except
as
may otherwise be expressly provided therein.
(q)Obligations
notwithstanding other Tenancy at the Property.
Manager
shall perform all of its obligations under this Agreement in a professional
manner consistent with the standards it employs at all of its managed locations.
3.
Duties
of Owner.
Owner
shall cooperate with Manager in the performance of Manager's duties under
this
Agreement and to that end, upon the request of Manager, to provide, at such
rental charges, if any, as are deemed appropriate, reasonable office space
for
Manager employees on the premises of the Property (to the extent available)
and
to give Manager access to all files, books and records of Owner relevant
to the
Property. Owner shall not unreasonably withhold or delay any consent or
authorization to Manager required or appropriate under this Agreement.
4.
Compensation
of Manager.
(a)Reimbursement
of Expenses.
Manager
shall be entitled to reimbursement, on a quarterly basis, for all out-of-pocket
reasonable and customary expenses actually incurred by Manager in the discharge
of its duties hereunder. Such reimbursement shall be the obligation of Owner,
whether or not Gross Revenues are sufficient to pay such amounts. If and
to the
extent Gross Revenue for any fiscal quarter shall be in excess of the amounts
necessary to pay current expenses (after payment of all obligations under
the
Loan Documents), at Owner's option the Manager shall hold all or a portion
of
such excess in an interest-bearing escrow account to be applied at Owner's
direction to cover future expenses. Any interest earned thereon shall be
added
to and treated as part of such account.
5
(b)Management
Fee.
Owner
shall pay to Manager as the full amount due for the services herein provided
a
quarterly fee (the "Management Fee") which shall be four percent (4%) of
the
Property's trailing twelve month Gross Revenue divided by four (4) ("Base
Fee"),
plus an annual incentive fee (the "Incentive Fee") based upon the performance
of
the Property as set forth on Exhibit B hereto. For purposes of this Agreement,
the term "Gross Revenue" shall mean all receipts (excluding security deposits
unless and until Owner recognizes the same as income) of Manager or Owner
(whether or not received by Manager on behalf or for the account of Owner)
arising from the operation of Owner's business at the Property, including
without limitation, rental payments of self-storage customers at the Property,
vending machine or concessionaire revenues, maintenance charges, if any,
paid by
the Owners of the Property in addition to basic rent and parking fees, if
any.
Gross Revenue shall be determined on a cash basis. Subject to the terms of
Sections 2(o), the Management Fee shall be paid promptly, in arrears, within
thirty (30) days of Owner's receipt of the invoice therefor, which invoice
shall
be sent from Manager to Owner following the end of each calendar quarter.
Such
invoice shall be itemized and shall include reasonable detail.
Except
as
provided in this Section 4, it is further understood and agreed that Manager
shall not be entitled to additional compensation of any kind in connection
with
the performance by it of its duties under this Agreement.
(c)Inspection
of Books and Records.
Owner
shall have the right, upon prior reasonable notice to Manager, to inspect
Manager's books and records with respect to the Property, to assure that
proper
fees and charges are assessed hereunder. Manager shall cooperate with any
such
inspection. Owner shall bear the cost of any such inspection; provided, however,
that if it is ascertained that Manager has overcharged Owner by more than
5% in
any given quarter, the cost of such inspection shall be borne by Manager.
Manager shall promptly reimburse Owner for any overpayment.
6
5.
Use
of Trademarks, Service Marks and Related
Items.
Owner
acknowledges the significant value of the "U-Haul" name in the operations
of
Owner's property and it is therefore understood and agreed that the name,
trademark and service mark "U-Haul", and related marks, slogans, caricatures,
designs and other trade or service items (the "Manager
Trade Marks")
shall
be utilized for the non-exclusive benefit of Owner in the rental and operation
of the Property, and in comparable operations elsewhere. It is further
understood and agreed that this name and all such marks, slogans, caricatures,
designs and other trade or service items shall remain and be at all times
the
property of Manager and its affiliates, and that, except as expressly provided
in this Agreement, Owner shall have no right whatsoever therein. Owner agrees
that during the term of this agreement the sign faces at the property will
have
the name "U-Haul." The U-Haul sign faces will be paid for by Owner. Unless
Owner
has elected to continue to use the Manager Trade Marks as provided in Section
6
of this Agreement, upon termination of this agreement at any time for any
reason, all such use by and for the benefit of Owner of any such name, mark,
slogan, caricature, design or other trade or service item in connection with
the
Property shall be terminated and any signs bearing any of the foregoing shall
be
removed from view and no longer used by Owner. In addition, upon termination
of
this Agreement at any time for any reason, Owner shall not enter into any
new
leases of Property using the Manager lease form or use other forms prepared
by
Manager. It is understood and agreed that Manager will use and shall be
unrestricted in its use of such name, mark, slogan, caricature, design or
other
trade or service item in the management and operation of other storage
facilities both during and after the expiration or termination of the term
of
this Agreement.
6.
Default;
Termination.
(a)Any
material failure by Manager or Owner (a "Defaulting
Party")
to
perform their respective duties or obligations hereunder (other than a default
by Owner under Section 4 of this Agreement), which material failure is not
cured
within thirty (30) calendar days after receipt of written notice of such
failure
from the non-defaulting party, shall constitute an event of default hereunder;
provided, however, the foregoing shall not constitute an event of default
hereunder in the event the Defaulting Party commences cure of such material
failure within such thirty (30) day period and diligently prosecutes the
cure of
such material failure thereafter but in no event shall such extended cure
period
exceed ninety (90) days from the date of receipt by the non-defaulting party
of
written notice of such material default; provided further, however, that
in the
event such material failure constitutes a default under the terms of the
Loan
Documents and the cure period for such matter under the Loan Documents is
shorter than the cure period specified herein, the cure period specified
herein
shall automatically shorten such that it shall match the cure period for
such
matter as specified under the Loan Documents. In addition, following notice
to
Manager of the existence of any such material failure by Manager, Owner shall
each have the right to cure any such material failure by Manager, and any
sums
so expended in curing shall be owed by Manager to such curing party and may
be
offset against any sums owed to Manager under this Agreement.
7
(b)Any
material failure by Owner to perform its duties or obligations under Section
4,
which material failure is not cured within ten (10) calendar days after receipt
of written notice of such failure from Manager, shall constitute an event
of
default hereunder.
(c)Owner
shall have the right to terminate this Agreement, with or without cause,
by
giving not less than thirty (30) days' written notice to Manager pursuant
to
Section 14 hereof. Manager shall have the right to terminate this Agreement,
with or without cause, by giving not less than ninety (90) days' written
notice
to Owner pursuant to Section 14 hereof.
(d)Upon
termination of this Agreement, (x) Manager shall promptly return to Owner
all
monies, books, records and other materials held by Manager for or on behalf
of
Owner and shall otherwise cooperate with Owner to promote and ensure a smooth
transition to the new manager and (y) Manager shall be entitled to receive
its
Management Fee and reimbursement of expenses through the effective date of
such
termination, including the reimbursement of any prepaid expenses for periods
beyond the date of termination (such as Yellow Pages advertising).
7.
Indemnification.
Manager
hereby agrees to indemnify, defend and hold Owner, all persons and companies
affiliated with Owner, and all officers, shareholders, directors, employees
and
agents of Owner and of any affiliated companies or persons (collectively,
the
"Indemnified Persons") harmless from any and all costs, expenses, attorneys'
fees, suits, liabilities, judgments, damages, and claims in connection with
the
management of the Property and operations thereon (including the loss of
use
thereof following any damage, injury or destruction), arising from any cause
or
matter whatsoever, including, without limitation, any environmental condition
or
matter, except to the extent attributable to the willful misconduct or gross
negligence on the part of the Indemnified Persons.
8.
Assignment.
Manager
shall not assign this Agreement to any party without the consent of
Owner.
9.
Standard
for Property Manager's
Responsibility.
Manager
agrees that it will perform its obligations hereunder according to industry
standards, in good faith, and in a commercially reasonable manner.
10.
Estoppel
Certificate.
Each
of
Owner and Manager agree to execute and deliver to one another, from time
to
time, within ten (10) business days of the requesting party's written request,
a
statement in writing certifying, to the extent true, that this Agreement
is in
full force and effect, and acknowledging that there are not, to such parties
knowledge, any uncured defaults or specifying such defaults if they are claimed
and any such other matters as may be reasonably requested by such requesting
party.
8
11.
Term;
Scope.
Subject
to the provisions hereof, this Agreement shall have an initial term (such
term,
as extended or renewed in accordance with the provisions hereof, being called
the "Term")
commencing on the date hereof (the "Commencement
Date")
and
ending on the last day of the one hundred and twentieth (120th) calendar
month
next following the date hereof (the "Expiration
Date"),
provided however, the Term shall expire with respect to any individual Property
as to which the Loan Documents have terminated in accordance with the terms
of
the Loan Documents (for instance due to a significant casualty or condemnation).
12.
Headings.
The
headings contained herein are for convenience of reference only and are not
intended to define, limit or describe the scope or intent of any provision
of
this Agreement.
13.
Governing
Law.
The
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties shall be governed by the internal
laws
of the State of Arizona.
14.
Notices.
Any
notice required or permitted herein shall be in writing and shall be personally
delivered or mailed first class postage prepaid or delivered by an overnight
delivery service to the respective addresses of the parties set forth above
on
the first page of this Agreement, or to such other address as any party may
give
to the other in writing. Any notice required by this Agreement will be deemed
to
have been given when personally served or one day after delivery to an overnight
delivery service or five days after deposit in the first class mail. Any
notice
to Owner shall be to the attention of President, 715 South Country Club Drive,
Mesa, AZ 85210. Any notice to Manager shall be to the attention of c/o U-Haul
International, Inc. Legal Dept, 2721 North Central Avenue, Phoenix, AZ 85004,
Attn: Secretary.
15.
Severability.
Should
any term or provision hereof be deemed invalid, void or unenforceable either
in
its entirety or in a particular application, the remainder of this Agreement
shall nonetheless remain in full force and effect and, if the subject term
or
provision is deemed to be invalid, void or unenforceable only with respect
to a
particular application, such term or provision shall remain in full force
and
effect with respect to all other applications.
16.
Successors.
This
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto and their permitted assigns and successors in
interest.
9
17.
Attorneys'
Fees.
If
it
shall become necessary for any party hereto to engage attorneys to institute
legal action for the purpose of enforcing their respective rights hereunder
or
for the purpose of defending legal action brought by the other party hereto,
the
party or parties prevailing in such litigation shall be entitled to receive
all
costs, expenses and fees (including reasonable attorneys' fees) incurred
by it
in such litigation (including appeals).
18.Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
10
IN
WITNESS WHEREOF, the undersigned execute this Agreement as of the date set
forth
above.
Owner:
Five
SAC
RW MS, LLC, a
Delaware
limited liability Company
By:
_/s/ Bruce Brockhagen__________
Bruce
Brockhagen, Secretary
Manager:
U-Haul
Co. of Arizona, Inc.
U-Haul
Co. of Ohio, Inc.
U-Haul
Co. of Michigan, Inc.
U-Haul
Co. of Texas, Inc.
U-Haul
Co. of Washington DC, Inc.
U-Haul
Co. of Maryland, Inc.
U-Haul
Co. of Illinois, Inc.
U-Haul
Co. of Georgia, Inc.
U-Haul
Co. of Florida
By: /s/
Jennifer M. Settles____________
Jennifer
M. Settles,
Secretary
11
Exhibit
A
U-HAUL
CTR AZ AVE & RIGGS RD, Chandler, AZ
723027
U-HAUL
CENTER RIVER VALLEY, Lancaster, OH
769057
U-HAUL
CTR OF TEL-WICK, Taylor, MI
752023
UHAULCENTER
OF NORTH PLANO, Plano, TX
741045
U-HAUL
OF SO CAPITOL ST, Washington, DC
818037
U-HAUL
CTR SNOUFFER SCHOOL RD, Gaithersburg, MD
818025
U-HAUL
CENTER OF BOLINGBROOK, Bolingbrook, IL
757023
U-HAUL
CENTER OF DOUGLASVLLE, Douglasville, GA
777027
U-HAUL
OF TOWN & CNTRY, Tampa, FL
786023
12
Exhibit
B
Management
Fee Incentives
The
following Incentive Fee shall be calculated and, if and to the extent earned,
paid, annually after the end of each fiscal year of Owner:
In
the
event that net operating income of the Property equals or exceeds 110% (but
less
than 120%) of principal and interest under the Loan Documents (“P&I”) for
the prior fiscal year being calculated, the Incentive Fee for such period
shall
be 1% of the Property's Gross Revenue for such fiscal year.
In
the
event that net operating income of the Property equals or exceeds 120% (but
less
than 130%) of P&I for the prior fiscal year being calculated, the Incentive
Fee for such period shall be 2% of the Property's Gross Revenue for such
fiscal
year.
In
the
event that net operating income of the Property equals or exceeds 130% (but
less
than 140%) of P&I for the prior fiscal year being calculated, the Incentive
Fee for such period shall be 3% of the Property's Gross Revenue for such
fiscal
year.
In
the
event that net operating income of the Property equals or exceeds 140% (but
less
than 150%) of P&I for the prior fiscal year being calculated, the Incentive
Fee for such period shall be 4% of the Property's Gross Revenue for such
fiscal
year.
In
the
event that net operating income of the Property equals or exceeds 150% of
P&I for the prior fiscal year being calculated, the Incentive Fee for such
period shall be 6% of the Property's Gross Revenue for such fiscal
year.
13