Independent Contractor Agreement

Agreement with Independent Contractor to Manage Office Building

Agreement made on the , between , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Owner, and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Manager.

Whereas, Owner holds title to premises on which there is situated this certain Property more specifically defined as , and referred to as the Property, and

Whereas, Manager is engaged in the business of managing, operating, leasing, and maintaining office buildings, apartment buildings, warehouses, office/service centers, and retail properties, and is experienced and competent in this business; and

Whereas, Owner desires to appoint Manager and Manager desires to accept appointment, as Owner's exclusive agent to manage, maintain, operate, and market available space in the Property.

Now, therefore, for and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Appointment of Agent and Acceptance

Owner appoints Manager as Owner's exclusive agent to manage, market, maintain, and operate the Property for the account of Owner, and Manager accepts the appointment, under and subject to the terms and conditions contained in this Agreement.

2. Term

The term of this Agreement will be for a period of beginning on and ending on , unless sooner terminated in accordance with the provisions of this Agreement.

3. Duties, Rights, and Responsibilities

A. General. Manager will have full responsibility for the management, operation, and maintenance of the Property during the term of this Agreement and Manager will perform these duties in an efficient and economical manner, subject to Owner's direction and the terms and provisions of this Agreement.

B. Tenant Relations. Manager will strive to develop and maintain good tenant relations in the Property.

C. Collections from Tenants. Manager will make diligent efforts to collect all rents and other charges, including escalations, which may, at any time, become due from any tenant occupying space in the Property or from any other person in connection with the use of all or any portion of the Property. All collections must be promptly deposited in the bank account to which Section I of this Agreement refers.

D. Condition of Property. At Owner's expense Manager will: keep the Property clean and in good repair at all times; order and supervise the completion of repairs that may be required; and generally do and perform or cause to be done and performed all things necessary, required, or desirable to provide for the proper and efficient management, operation, and maintenance of the Property. Manager will make or cause to be made any additional repairs to the Property or any part of it and to provide maintenance or other service for all or any part of the Property. Owner, in a manner satisfactory to Manager, must make available to Manager the sums necessary to pay the costs of repairs, maintenance, or service described in this Paragraph.

E. Tenant Complaints. Manager will receive complaints of tenants and occupants of the Property and will, at Owner's expense, adjust the complaints, subject to the limitations imposed by or pursuant to this Agreement.

F. Right to Subcontract. Manager, on behalf of and in the name of Owner, may subcontract the performance of any of its duties under this Agreement. Manager is expressly authorized to execute such subcontracts on behalf of Owner and Owner agrees that the name of Owner, rather than that of Manager, may appear on the face of such subcontracts, at the option of Manager. In the event of any such subcontract or agreement, Manager must include a provision in it requiring that the subcontractor carry Workers' Compensation Insurance in accordance with all applicable state and federal laws and Employer's Liability Insurance applicable to and covering all persons performing work under this section. Manager will require subcontractor to furnish Manager with certificates demonstrating current coverages as described in this paragraph.

G. Licenses and Permits: Compliance with Laws. At Owner's expense, Manager will endeavor, for the account of Owner, to obtain and renew, as necessary, all licenses and permits that may be required for operating and maintaining the Property and for complying with all laws and regulations of applicable governmental authorities in the course of operation and maintenance, except for sales tax permits which, by law, are the responsibility of Owner.

H. Capital Expenditures. Owner must specifically authorize any capital expenditure. With respect to the purchase and installation of major items of new or replacement equipment, Manager will recommend that Owner purchase these items when Manager determines the purchase to be necessary. All new or replacement equipment or other capital expenditure exceeding $ must be awarded on the basis of competitive bidding.

3-I. Property Expenditures Account

Manager must, within 30 days after the date of execution of this Agreement, open a commercial checking account (the Property Expenditures Account) for the Property at . This account will be in the name of Manager, but must be designated as a trust account in favor of Owner. Owner, at the commencement of the term of this Agreement, will advance to Manager the sum of $ for deposit in this account to be used for working capital. Manager will have the right to maintain petty cash funds not in excess of $. Owner further agrees that the following sequence of payments is acceptable: .

3-J. Funding Requirements

Should the expense of operating the Property show at any time that the sum deposited by Manager in the Property Expenditures Account is less than the amount needed to provide sufficient cash on hand to pay all recurring expense, plus any known nonrecurring expenditures anticipated to occur within the next 30 days, Manager must give written, telegraphic, or FAX notice to Owner of the sum actually needed.

3-K. Preparation of Budget

At least 30 days before the end of each calendar year during the term of this Agreement and for the calendar year during which the term commences, within 90 days of commencement or within 90 days after the date of execution, whichever is later, Manager must prepare and submit to Owner a proposed budget for the operation and maintenance of the Property during the coming calendar year.

Furthermore, Manager will secure Owner's prior written approval for all expenditures in excess of $ for any one item of operation, except for the specific monthly or recurring operation or maintenance charges that the budget may designate, and for items that would be deemed an emergency and required for maintaining tenancy.

3-L. Supplies and Equipment

At Owner's expense, Manager will purchase, provide, and pay for all janitorial and maintenance supplies, tools and equipment, restroom and toilet supplies, light bulbs, paints, uniforms, and stationery and office supplies necessary for the efficient and economical operation and maintenance of the Property.

3-M. Limitation on Agreements

Manager must not assume or enter into any contract or other agreement or obligation in connection with the management, operation, or maintenance of the Property that cannot be terminated without any liability for it against Owner or the Property on 30 days' written notice by Manager, or, on 30 days' written notice by Owner at any time after the termination of this Agreement by expiration or otherwise.

3-N. Property Personnel

At Owner's expense, Manager must employ, pay, furnish, train, supervise, discharge, and fix the compensation of those employees reasonably necessary for the efficient and economical management, maintenance, and operation of the Property. Exhibit A sets forth the positions and levels of compensation applicable to this Agreement.

3-O. Payment of Employees and Suppliers

At Owner's expense, Manager will promptly pay to all of its employees all monies due or to be paid to them and will promptly pay for all supplies, merchandise, materials, labor, or other items ordered, furnished, or used by it or for it in the performance of the duties of Manager under this Agreement. If such a lien, with or without merit, is filed against the Property, Manager must promptly notify Owner.

3-P. Payment of Other Costs

At Owner's expense, Manager must also pay the following expenses:

- cost of collection of delinquent rentals collected through an attorney or collection agency; cost of printed checks for each bank account required by Owner;

- cost of an on-site office (if required) including office furniture and equipment; cost of reproduction, telephone, postage or express mail service, supplies, and printed forms required to manage the Property;

- mileage reimbursement for on-site personnel as approved by budget;

- reasonable travel costs and incidental expenses necessitated through the normal or routine management of the Property or due to requests by Owner which require travel; and

- cost of any other item or items associated with the operation of the Property not specifically set out in this Agreement.

3-Q. Payroll Taxes

Manager will have full and exclusive responsibility and liability for payment of all federal, state, and local payroll taxes and for contributions for unemployment insurance, Social Security (F.I.C.A.) and other benefits imposed or assessed under any provision of law or by regulation, and which are measured by salaries, wages, or other remuneration paid or payable by Manager to its employees engaged in any work in connection with this Agreement or indicated in it, for the payment of which Owner must reimburse Manager.

3-R. Workers' Compensation and Employee's Liability Insurance

Manager must maintain Workers' Compensation Insurance and all other insurance necessary to meet federal and state requirements in accordance with the laws of the State of and Employer's Liability Insurance applicable to and covering all persons engaged in performance of the work to be performed under this Agreement. Owner must reimburse Manager for the cost of premiums, fees, or any other cost connected with same.

3-S. Other Insurance

Except for the insurance specified in this Paragraph 3, Owner must secure and maintain, in amounts mutually agreed on, These policies must name the Manager as a co-insured and Owner must furnish Manager with certificates evidencing that the insurance is in force.

3-T. Indemnity

Owner agrees to save Manager free and harmless from any and all liability, whether to Owner or other persons, from any and all claims for damages or injuries to persons or Property, including Property of Manager, from whatever cause, including the sole negligence of Manager in or about the Property described above. However, this clause may not be construed to release Manager from any liability to Owner for a breach of any of the covenants agreed to be performed by Manager under the terms of this Agreement.

4. Financial Management

A. Financial Services Provided by Manager. It is the responsibility of Manager to perform certain activities relative to the management of Owner funds and to provide Accounting and Reporting to Owner.

B. Financial and administrative services not set forth in this Agreement are not contemplated by Manager to be a part of services provided in this Agreement for the fee specified.

C. Books and Records. Manager must maintain or cause to be maintained at Manager's executive office in full, true, and accurate books of accounts fully reflecting all monies collected, paid out under this Agreement, reserved by Manager, or remitted to Owner.

D. Inspection and Audit of records Maintained by Manager. Owner has the right during reasonable business hours, and with reasonable notice, to inspect, audit, examine, and make copies of or extracts from the books of account and records maintained by Manager under this Agreement.

E. Reports. Manager must render to Owner reports for the purpose of showing net income from the Property and collections, disbursements, delinquencies, uncollectable accounts, vacancies, leases and renewals, and other matters relative to the management, operation, and maintenance of the Property.

F. Method of Accounting, Dates and Other Matters.

1. Accounting Basis: Books of account will be maintained on the basis .

2. Reporting Month End: Date will be calendar month end.

G. Reporting Year End: Date will be .

H. Chart of Accounts: Manager will use Manager's standard chart of accounts (attached as Exhibit C) to categorize the balance in the books of account maintained for Owner.

I. Beginning Balances and Information: Owner or designated agents of Owner will provide initial balances and other information to be used in books of account to be maintained by Manager and in operation of the Property, on or before .

J. Security Deposit Funds: Owner hereby instructs that Manager to segregate security deposit funds in a separate trust bank account.

K. Property of Manager. The records, reports, books of account, and other documents and materials relating to the management, operation, and maintenance of the Property will be the Property of Manager.

L. Settlements. Within Sixty (60) days after the effective date of termination of this Agreement, by expiration or otherwise, Manager must render to Owner a final accounting for all Owner funds handled by Manager and must pay to Owner an amount equal to the sum of all deposits made to the Property Expenditures Account in accordance with this Agreement, less the sum of all amounts previously paid out of that account in accordance with this Agreement. Additionally, Owner must pay to Manager a closeout fee equal to one month's minimum monthly management fee as provided for in Paragraph 5-A.

5. Compensation of Manager

A. Management Compensation.

1. A management fee equal to $ per month;

2. At such time as the base rent received reaches $ per month, the management fee will become % of the gross income per month.

B. The monthly compensation amount will be paid to Manager by check drawn by Manager on the Property Expenditures Account.

C. Marketing. All matters related to marketing are contained in Exhibits D, E, and F attached to and made a part of this agreement.

D. Construction and Remodeling Supervision. In addition to the fees set out above, Manager will receive a fee for the supervision of all remodeling and construction in excess of $ per payment which occur in the Property, including tenant and public areas. The fee for supervision of remodeling and construction will equal percent of the total cost of the work performed.

E. Execution of Leases. All leases are to be prepared by Manager in accordance with the leasing guidelines established by Owner, as set forth in Exhibit G, with respect to the Property covered by this Agreement.

F. Advertising and Promotional Matters. Manager may publish advertisements, post renting signs, prepare and circulate brochures, and engage in such other forms of advertising and incentive programs and promotional activities as Manager feels are appropriate and that Owner approves in advance. Owner agrees to reimburse Manager for such advertising and promotional expenses.

6. Termination of Agreement

A. Renewals of Agreement. This Agreement will be deemed renewed from year to year unless, at least sixty (60) days before its expiration, either party gives to the other written notice of its election not to renew this Agreement.

B. Owner Termination. This Agreement may also be terminated at Owner's sole option with sixty (60) days' prior written notice to Manager in the following circumstances:

1. If Manager materially breaches any of the terms and provisions of this Agreement and such breach continues for a period of ten (10) days after written notice of the breach from Owner to Manager;

2. In the event of the filing of a petition in bankruptcy or an assignment for the benefit of creditors with respect to Manager.

C. Manager Termination. This Agreement may be terminated at Manager's sole option with sixty (60) days' prior written notice in the following circumstances:

1. If Owner materially breaches any of the terms and provisions of this Agreement and the breach continues for a period of ten (10) days, after written notice of the breach from Manager to Owner;

2. In the event of the filing of a petition in bankruptcy or an assignment for the benefit of creditors with respect to Owner.

D. Effect of Termination on Accrued Rights. Termination of this Agreement will in no way affect or impair any right that has accrued to either party to this agreement prior to the date when the termination became effective.

7. Independent Contractor

Manager is an independent contractor and is not an employee, servant, partner or joint venturer of Owner.

8. Suits and Claims

Manager must notify Owner and Owner's insurance carrier in writing as soon as possible, after receipt of notice of any injury occurring in the Property, of any claim against Owner and/or Manager or which involves the Property.

9. Sale of the Property

Owner is obligated to inform Manager of its intention to sell the Property described in this Agreement and to furnish the terms and conditions of the sale before listing the Property with a broker other than Manager. In addition, Owner agrees to pay Manager a disposition fee of $ to compensate Manager for the additional work required by a sale and to provide for a cash-out of any fees due at the time of sale.

10. Severability

The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision.

11. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions.

12. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

13. Notices

Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

14. Attorney’s Fees

In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees.

15. Mandatory Arbitration

Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto.

16. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

17. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

18. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

19. In this Agreement, any reference to a party includes that party's heirs, executors, administrators, successors and assigns, singular includes plural and masculine includes feminine.

WITNESS our signatures as of the day and date first above stated.