HomeMy WebLinkAboutApplication (12-26)(-*if"
CITY OF COLLEGE STATION
Home of 7?Alti 1 Uniterslly'
ZONING BOARD OF ADJUSTMENT APPLICATION
qi MINIMUM SUBMITTAL REQUIREMENTS:
tr/ $350 Zoning Board of Adjustment Application Fee.
❑ Application completed in full. This application form provided by the City of College Station must be used
and may not be adjusted or altered. Please attach pages if additional information is provided.
❑ Additional materials may be required of the applicant such as site plans, elevation drawings, sign details,
and floor plans. The applicant shall be informed of any extra materials required,
Date of Optional Preapplicatlon Conference
ADDRESS 1915 Texas Avenue
LEGAL DESCRIPTION (Lot, Block, Subdivision)
Street Address
City Austin
P. 0. Box 41957
Phone Number 512/4764456
Action requested (check all that apply):
❑ Setback variance
❑ Parking variance
I Sign variance
❑ Lot dimension variance
Applicable ordinance section to vary from:
10/10
4r4riac'
Fax Number
Q Appeal of Written Interpretation
❑ Special Exception
❑ Drainage Variance
❑ Other
FOR OFF
CASE NO.: I
DATE SUBMI
TIME:
STAFF:
APPLICANT /PROJECT MANAGER'S INFORMATION (Primary contact for the project):
Name Ron Thrower Email ront @throwerdesign.com
State Texas Zip Code 78704
PROPERTY OWNER'S INFORMATION (Please attach an additional sheet for multiple owners):
Name PfIn up14 U■4 / 49)c has E -mail tV1 arrn,cbn,1. Oktq 05 fl . Gar►'
Street Address °t4! 6. m, )€:4c,1 B1t It a' 5 V
City { ku k' j‘ State - "r(.., Zip Code 1 % ../
Phone Number ( 54,4) 1 • el `$5 Fax Number (1,a) i ba . moll
Current zoning of subject property C.-1, General Commercial
UDC Section 7.4.1.3.- Attached Signs
Page 1 015
10/10
GENERAL VARIANCE REQUEST
1, The following specific variation from the ordinance is requested:
To allow for the division of building sign areas to be based on all allowable building sign areas of all
buildings located on the site and to allow for building signage to be located on any building on a site.
2. This variance is necessary due to the following special conditions:
Special Condition Definition: To justify a variance, the difficulty must be due to unique circumstances involving
the particular property. The unique circumstances must be related to a physical characteristic of the property itself,
not to the owner's personal situation. This Is because regardless of ownership, the variance will run with the land,
Example: A creek bisecting a lot, a smaller buildable area than is seen on surrounding lots, specimen trees.
Note: A cul -de -sac is a standard street layout in College Station. The shape of standard cul -de -sac lots are
generally not special conditions.
The allowable sign area for a tenant space does not account for the extreme distance from an arterial
roadway or for the limited view windows to allow for the traveling public to notice signs.
3. The unnecessary hardship(s) involved by meeting the provisions of the ordinance other than financial hardship isiare:
Hardship Definition: The inability to make reasonable use of the property in accord with the literal requirements
of the law. The hardship must be a direct result of the special condition.
Example: A hardship of a creek bisecting a lot could be the reduction of the buildable area on the lot, when
compared to neighboring properties.
The ability of the traveling public to see a sign at extreme distance is hampered by 1) The limited view
windows created by existing buildings and landscaping, and, 2) The speed of vehicles on the arterial
roadway.
4, The following alternatives to the requested variance are possible:
None are identified.
5. This variance will not be contrary to the public interest by virtue of the following facts:
No additional sign area is requested based on the allowable sign area per building footage.
The applicant has prepared this application and certifies that the facts stated herein and exhibits attached hereto are
true, correct, and complete. iF THIS APPLICATION iS FILED BY ANYONE OTHER THAN THE OWNER OF THE
PROPERTY, this application must be accompanied by a power of attorney statement from the owner, If there is
more than one owner, ali owners must sign the application or the power of attorney. If the owner is a company, the
application must be accompanied by proof of authority for the company's representative to sign the application on its
behalf.
Signature and title ■cor
p4r ("14- 4ger
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Date
Page 2 of 5
EXHIBIT A — LEGAL DESCRIPTION
Tract 1: Fee Simple
Metes and bounds description of all that certain tract or parcel of land lying and being situated in College Station,
Brazos County, Texas. Said tract being the remainder of Lot 3, Wolf Pen Plaza, according to the plat recorded in
Volume 3588, Page 47 of the Official Public Records of Brazos County, Texas.
Said tract being more particularly described by metes and bounds as follows:
BEGINNING at a 5/8 inch iron rod set on the southwest line of George Bush Drive (70' R.O.W.) marking the re-
established northeast comer of said Lot 3;
THENCE: S 48 deg. 08' 26" E along the southwest line of George Bush Drive for a distance of 89.71 feet to a 5/8 inch
iron rod set marking an angle point in said line;
THENCE: S 47 deg. 35' 46" E continuing along the southwest line of George Bush Drive for a distance of 453.03 feet
to a 5/8 inch iron rod set marking the beginning of a clockwise curve having a radius of 25.00 feet;
THENCE: Along said curve through a central angle of 22 deg. 41; 58" for an are distance of 9.90 feet (chord bears: S
36 deg. 14' 47" E-9.84 feet) to a 5/8 inch iron rod set on the northwest line of Holleman Drive (60' R.O.W. at this
point) marking the ending point of said curve;
THENCE: S 41 deg. 3 P 3 1 " W along the northwest line of Holleman Drive for a distance of 551.06 feet to a 5/8 inch
iron rod set marking the most easterly south comer of said Lot 3 and the east corner of Lot 2, Wolf Pen Plaza;
THENCE: Along the common line of said Lot 2 and Lot 3, Wolf Pen Plaza, for the following calls:
N 48 deg. 25' 19" W for a distance of 130.45 feet to a cotton spindle set in asphalt marking the north corner of said Lot
2, Wolf Pen Plaza;
S 41 deg. 34' 41 " W for a distance of 178.66 feet to a point marking the west corner of said Lot 2, Wolf Pen Plaza;
S 48 deg. 28' 34" E for a distance of 10.42 feet to a 5/8 inch iron found marking the north corner of Lot 2, Block 3,
Poch's Park Subdivision, according the plat recorded in Volume 419, Page 39 of the Deed Records of Brazos County,
Texas;
THENCE: 44 deg. 10' 08" W along the common line of said Lot 3, Wolf Pen Plaza, and said Lot 2, Poch's Park
Subdivision, for a distance of 13.47 feet to a 5/8 inch iron rod set marking the east comer of the remainder of Lot 1,
Wolf Pen Plaza;
THENCE: N 48 deg. 28' 29" W along the common line of said Lot 3 and Lot 1, Wolf Pen Plaza, for a distance of
153.50 feet to a 5/8 inch iron rod set marking the north comer of Lot 1, Wolf Pen Plaza;
THENCE: s 41 DEG. 34' 41" W continuing along the common line of said Lot 3 and Lot 1, Wolf Pen Plaza, for a
distance of 224.51 feet to an "X" set in concrete on the existing northeast line of Texas Avenue (variable width
R.O.W.) marking the most westerly south corner of this herein described tract;
THENCE: Through said Lot 3 and along the existing northeast line of Texas Avenue, same being the northeast line of
a called 0.313 acre tract as described by a deed to the State of Texas for right-of-way purposes recorded in Volume
4816, Page 217 of the Official Public Records of Brazos County, Texas, for the following calls:
N 50 deg. 23' 37" W for a distance of 117.19 feet to a 5/8 inch iron rod set;
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N 50 deg 22' 09" W for a distance of 163.23 feet to a 5/8 inch iron rod set;
N 50 deg 22' 24" W for a distance of 185.97 feet to a brass monument found on the southeast line of a called 1.00 acre
tract as described to Washington Chapel Church recorded in Volume 44, page 556 of the Deed Records of Brazos
County, Texas;
THENCE: Along the common line of said Lot 3, Wolf Pen Plaza, and said 1.00 acre tract for the following calls:
N 43 deg. 09' 1 I" E for a distance of 179.25 feet to a 5/8 inch iron rod set;
N 43 deg. 08' 04" E for a distance of 31.90 feet to a 5/8 inch iron rod set marking the east corner of said 1.00 acre
tract and an interior west corner of said Lot 3;
N 50 deg. 19 ` 49" W for a distance of 196.47 feet to a 5/8 inch iron rod found marking the northwest corner of said
Lot 3;
THENCE: Along the northerly line of Lot 3, Wolf Pen Plaza, same being the southerly line of a called 1.8278 acre
tract dedicated to the City of College Station according to the plat of Wolf Plan Plaza (3588/47), for the following
calls:
N 74 deg. 07' 4 1 " E for a distance of 78.09 feet to a 5/8 inch iron rod set;
N 76 deg. 50' 49" E for a distance of 100.81 feet to a point;
N 46 deg. 27' 57" E for a distance of 88.50 feet to appoint;
N 46 deg. 25' 00" E for a distance of 160.13 feet to a 5/8 inch iron rod set;
N 63 deg. 04' 45" E for a distance of 18.16 feet to a 5/8 inch iron rod set;
N 67 deg. 58' 24" E for a distance of 90.94 feet to a 5/8 inch iron rod set;
N 57 deg. 33' 07" E for a distance of 11.96 feet to a point;
N 34 deg. 21' 06" E for a distance of 69.26 feet to a point;
S 89 deg. 34' 44" E for distance of 28.79 feet to a point;
S 53 deg. 59' 07" E for a distance of 44.77 feet to a point;
S 64 deg. 15' 19" E for a distance of 51.50 feet to a point;
S 79 deg. 50' 52" E for a distance of 30.36 feet to a point;
N 87 deg. 20' 15" E for a distance of 49.65 feet to a point;
N 77 deg. 2 P 2 1 " E for a distance of 40.19 feet to a point;
N 55 deg. 53' 35" E for a distance of 58.48 feet to a point;
N 41 deg. 23' 10" E for a distance of 36.78 feet to the POINT OF BEGINNING containing 15.0416 acres of land,
more or less.
Tract 2: Easement
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The easement rights created under The Reciprocal Easement and Operating Agreements recorded in Volume 3735,
•Page 47 of the Official Records of Brazos County, Texas.
Tract 3: Easement
Cross easement for ingress and egress as described in Declaration of covenants and Restrictions as recorded in Volume
4675, Page 164 of the Official Records of Brazos County, Texas.
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This SUB -PROPERTY MANAGEMENT AGREEMENT (the "Agreement") is dated as of this 26th day of
June, 2007, by and between Principle Equity Properties, LP, a Delaware Limited Partnership (the "Property
Manager"), and TIG Central Texas Ltd (the "Subcontractor").
PEM University H, LLC a Delaware limited liability company and PEM University Tenants in
Common, LLC's all Delaware limited liability companies (together with their successors and assigns,
individually the "Owner" and collectively the "Owners"), own the commercial real estate located at 1901
Texas Avenue, College Station, TX 77840 as more particularly described in Exhibit"A" attached hereto and
incorporated herein (the "Project"). The Owners have engaged the Property Manager to supervise, manage;
lease, operate, and maintain the Project pursuant to a Property and Asset Management Agreement dated March
27'h, 2007 (the "Master Agreement"). The Property Manager desires to engage the Subcontractor to perform
certain of its duties under the Master Agreement and the Subcontractor wishes to perform such duties and
receive the fees and other consideration provided for herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
Commencement and Termination Dates; Authority of Owners.
1.1 Commencement and Termination. The Subcontractor's duties and responsibilities
under this Agreement shall begin on the date of this Agreement and shall terminate on the earlier of (i) the sale
of the Project or any portion thereof, as to such portion of the Project sold only (other than any sale of an
undivided interest held by an Owner to a party that will acquire such interest subject to the Tenants in
Common Agreement and this Agreement), (ii) the termination, expiration or the failure of renewal of the
Master Agreement, or (iii) the termination as provided in Section 10 hereof.
1.2 Authority of Owners. The parties hereto acknowledge and agree that this Agreement
is subject in all respects to the Master Agreement, as amended from time to time. Certain consents from the
Owners for the authority of the Property Manager to act are required under the Master Agreement. The parties
hereto agree to observe the requirement of such consents and to work together to receive such consents. The
Owners of the Project shall have the final authority to approve any Property Management or Subcontractor
action not covered by the Master Agreement. All communications to the Owners regarding such approvals
shall be made by the Property Manager. The Subcontractor shall have the power and authority to act on behalf
of the Property Manager with respect to such approvals.
2, Property Manager's Responsibilities.
2.1 Status of the Property Manager and Subcontractor. None of the Owners, the
Property Manager or the Subcontractor intends to form a joint venture, partnership or similar relationship.
Instead, the parties intend that the Property Manager shall act solely in the capacity of an independent
contractor for the Owners and the Subcontractor shall act solely in the capacity of an independent contractor
for the Property Manager of certain duties under the Master Agreement. Nothing in this Agreement shall
cause the Owners, Property Manager or Subcontractor to be joint venturers or partners of each other, and none
of such parties shall have the power to bind or obligate the other party. by virtue of this Agreement, except as
expressly provided in this Agreement. Nothing in this Agreement shall deprive or otherwise affect the right of
any party to own, invest in, manage, operate, or to conduct business activities which compete with the business
of the Project.
2.2 Management. The Subcontractor shall manage, operate and maintain the Project in
an efficient, economic and satisfactory manner and shall arrange the performance of everything reasonably
necessary for the proper operation of the Project for the tenants thereof, subject to (a) applicable governmental
2075663.2
and/or Owners, the Subcontractor shall keep the Project clean and in good repair, shall order and supervise the
completion of such repairs as may be required and shall generally do and perform, or cause to be done or
performed, all things necessary, required or desirable for the proper and efficient management, operation, and
maintenance of the Project provided the Property Manager and/or Owners, in a manner reasonably satisfactory
to the Subcontractor, make available to the Subcontractor such sums as are reasonably necessary to pay the
costs thereof. The Subcontractor shall perform all services in a diligent and professional manner.
2.3 Employees: Independent Contractor. The Subcontractor shall, subject to the
limitations of the Budget (as defined in Section 2.5.1) employ, directly or through third party contractors (e.g.
employee leasing company), at all times a sufficient number of capable employees to enable the Subcontractor
to properly, adequately, safely and economically manage, operate and maintain the Project. All matters
pertaining to the supervision of such employees shall be the responsibility of the Subcontractor. All salaries
and benefits and positions of employees who perform work in connection with the Project shall be consistent
with the Budget (as defined in Section 2.5.1) and specified therein.
2.4 Compliance with Laws, Mortgages and Other Matters.
2.4.1 To the extent Property Manager provides Subcontractor with copies of all
applicable documents, the Subcontractor shall use commercially reasonable efforts to comply with any deed of
trust, mortgage or other loan documents affecting the Project and all governmental requirements, including
Board of Fire Underwriters or other similar body, relative to the performance of its duties hereunder and cause
the Project to comply with any deed of trust, mortgage or other loan documents affecting the Project and all
governmental requirements, including Board of Fire Underwriters or other similar body, Subcontractor may
implement such procedures with respect to the Project as the Subcontractor may deem advisable for the more
efficient and economic management and operation thereof. The Subcontractor shall pay from the Operating
Account (defined in Section 6.1) expenses incurred to remedy violations.
2.4.2 The Subcontractor shall furnish to the Property Manager, promptly after
receipt, any notice of violation of any governmental requirement or order issued by any governmental entity,
any Board of Fire Underwriters or other similar body against the Project, any notice of default from the holder
of any mortgage or deed of trust encumbering the Project or any notice of termination or cancellation of any
insurance policy.
2.5 Budgets and Operating Plan.
2.5.1 The Subcontractor shall annually prepare and submit to the Property
Manager (in order that the Property Manager may submit it to the Owners) a detailed annual capital and
operating budget ("Budget") for the promotion, operation, #easing, repair, maintenance and improvement of the
Project for each calendar year (in a form directed by Property Manager) with all necessary supporting
documentation as set forth by Property Manager, The initial calendar year numbers are attached hereto as
Exhibit "C" and are hereby approved by the Property Manager. The Subcontractor shall deliver each
subsequent Budget for each subsequent calendar year on or before October I" of the calendar year before the
budget year. The Subcontractor shall use best efforts to promptly incorporate into the Budget any changes the
Property Manager may request. The Property Manager shall approve or disapprove of the Budget. The
Subcontractor may proceed under the terms of the proposed Budget for items that are not objected to and may
take any action with respect to items not approved for Emergency Expenditures (as defined in Section 2.5,2),
In the event that the items that are objected to are operational expenditures, as opposed to capital expenditures,
the Subcontractor shall be entitled to operate the Project using the prior year's Budget until the approval is
obtained. The Subcontractor shall provide the Property Manager with such information regarding the Budget
as may be, from time to time, reasonably requested by the Property Manager, The Subcontractor may at any
time submit a revised Budget to the Property Manager for its approval consistent with the terms of this
Section.
2075663.2
specified in the Budget, provided that the Property Manager may reallocate savings from one line item to other
line items via a projection ("Projection"), The Subcontractor shall submit (subject to the same procedures as
set forth in Section 2.5.1) the Projection to the Property Manager before making any expenditure not within the
Budget or approved Projection unless the expenditure is (a) less than One Thousand Dollars ($1,000,00) or
(b) is, in the Subcontractor's reasonable judgment, required to avoid personal injury, significant. property
damage, a default under any loan encumbering the Project, a violation of applicable law or the suspension of a
service (collectively, "Emergency Expenditures").
2.5.3 During each calendar year, in the regular monthly reports sent to the
Property Manager, the Subcontractor shall inform the Property Manager of any material increases or decreases
in costs and expenses not foreseen and not included in the Budget within a reasonable time after the
Subcontractor learns of such changes. These variances will be included in the annual Projection provided to
the Property Manager in the regular monthly report. Subcontractor will also include variance explanations for
items that differ from the original Budget by $1,000 or 10%, whichever is greater.
2.5.4 Together with the submission of the Budget, the Subcontractor shall submit
each year to the Property Manager for information purposes only an operating plan for the general operation of
the Project, including a proposed list of improvements to the Project, general insurance plan, marketing plan
and plan for the general operation and maintenance of the Project (the "Operating Plan"). The Subcontractor
may submit a revised Operating Plan to the Property Manager at any time. The Subcontractor shall use
commercially reasonable efforts to operate the Project within such then current Operating Plan.
2.5.5 Any controversy between the parties hereto arising out of or related to any
dispute as set forth in Section 2.5.1 shall be settled by arbitration in College Station, Texas in accordance with
the rules of The American Arbitration Association. The arbitration panel shall consist of one member, and
shall be a person agreed to by each party to the dispute within 15 days following the end of the 15-day period
set forth in Section 2.5.1. If the parties are unable within such 15-day period to agree upon an arbitrator, then
the panel shall be one arbitrator selected by the Brazos County office of The American Arbitration
Association, which arbitrator shall be experienced in the area of real estate and who shall be knowledgeable
with respect to the subject matter area of the dispute. Each party shall pay 50% of any fees and expenses of the
arbitrator and other tribunal fees and expenses. Each party shall pay their legal and other fees. Each party
shall submit its proposal with respect to its issue in dispute. The arbitration panel shall render a decision
within 15 days following the close of presentation by the parties of their cases and any rebuttal. The arbitrator
shall be limited to picking either alternative submitted without any change. The parties shall proceed with the
alternative selected by the arbitrator.
2.5.6 The Subcontractor shall be required to provide Lender (as defined in the
Master Agreement, together with its successors and/or assigns) all budgets or reports required in any loan
documents ("Loan Documents") entered into with the Lender and comply with the provisions applicable to the
Subcontractor set forth in the Loan Documents.
2.6 Leasing. Intentionally deleted
2.7 Collection of Rents and Other Income. The Subcontractor shall bill all tenants and
shall use commercially reasonable efforts to collect all rent and other charges due and payable from any tenant
or from others for services provided in connection with the Project. The Subcontractor shall deposit all monies
so collected in the Operating Account (as defined in Section 6.1). The Subcontractor shall allocate all income,
revenue and expenses from the Project to the Property Manager. The Subcontractor shall maintain equity
positions for all Owners including segregating contributions and distributions.
2.8 Repairs and Maintenance. The Subcontractor shall maintain the buildings,
appurtenances and grounds of the Project, other than areas that are the responsibility of tenants, including,
2075663.2
including electrical, plumbing, carpentry, masonry, elevators and such other routine repairs as are necessary or
reasonably appropriate in the course of maintenance of the Project (subject to the limitations of this
Agreement). The Subcontractor shall pay actual and reasonable expenses for materials and labor for such
purposes from the Operating Account. The Subcontractor shall take reasonable precautions against fire,
vandalism, burglary and trespass to the Project.
2.9 Capital Expenditures. The Subcontractor may make any capital expenditure within
any Budget approved by the Property Manager and/or Owner without any further consent, provided that the
Subcontractor follows the bidding requirements set forth in this Section 2.9. All capital expenditures, other
than Emergency Expenditures, shall be subject to submittal of a revised Budget to the Property Manager (and
in turn to the Owners). Unless the Property Manager specifically waives such requirement, or approves a
particular contract, the Subcontractor shall award any contract for a capital improvement exceeding $5,000 in
cost on the basis of competitive bidding, solicited from a minimum of three (3) written bids. The
Subcontractor shall accept the bid of the lowest bidder, who, in the Subcontractor's reasonable opinion, is
responsible and qualified.
2.10 Service Contracts. Supplies and Equipment.
The Subcontractor, as an agent for the Property Manager, may enter into or renew any contract for cleaning,
maintaining, repairing or servicing the Project or any of the constituent parts of the Project (including contracts
for fuel oil, security or other protection, extermination, landscaping, architectural or engineering services)
contemplated by the Budget and consistent with the Operating Plan with any unrelated third party. Each such
service contract shall (a) be in the name of the Principle Equity Properties, LP on behalf of the Tenant in
Common Owners of University Shopping Center, in care of TIG Central Texas Ltd
2.10.1 , (b) be assignable to the nominee of the Property Manager and (c) be for a
term not to exceed one (1)year. Unless the Property Manager specifically waives such
requirement or approves a particular contract, all service contracts for amounts in excess of
$5,000 per year shall be subject to the bidding requirements specified in Section 2.9.
2.10.2 If this Agreement terminates or is not renewed pursuant to Section 10, the
Subcontractor, at the option of the Property Manager, shall assign to the Property Manager or
the nominee of the Owners all of the Subcontractor's interest in all service agreements
pertaining to the Project, if any.
2.10.3 At the expense of the Property Manager and/or Owners, the Subcontractor
shall purchase, provide, and pay for all needed janitorial and maintenance supplies, tools and
equipment, restroom and toilet supplies, light bulbs, paints, and similar supplies necessary to
the efficient and economical operation and maintenance of the Project. Such supplies and
equipment shall be the property of the Owners. All such supplies, tools, and equipment shall
be delivered to and stored at the Project and shall be used only in connection with the
management, operation, and maintenance of the Project.
2.10.4 The Subcontractor shall use reasonable efforts to purchase all goods,
supplies or services at the lowest cost reasonably available from reputable sources in the
metropolitan area where the Project is located. In making any contract or purchase hereunder,
€ the Subcontractor shall use reasonable efforts to obtain favorable discounts for the Property
Manager and/or Owners and all discounts, rebates or commissions under any contract or
purchase order made hereunder shall inure to the benefit of the Property Manager and/or
4
Owners. The Subcontractor shall make payments under any such contract or purchase order
to enable the Property Manager and/or Owners to take advantage of any such discount if the
Property Manager and/or Owners provide sufficient funds therefore.
2a75663.2
verify bills for real estate and personal property taxes, general and special real property assessments and other
like charges (collectively "Taxes") which are or may become liens against the Project. The Subcontractor, if
requested by the Property Manager, will cooperate to prepare an application for correction of the assessed
valuation (in cooperation with representatives of the Property Manager) to be filed with the appropriate
governmental agency. The Subcontractor shall pay, within the time required to obtain discounts, from funds
provided by the Property Manager and/or Owners or from the Operating Account, all utilities, Taxes and
payments due under each lease, mortgage, deed of trust or other security instrument, if any, affecting the
Project. To the extent contemplated by the Budget and in conformance with the Operating Plan (as either may
be revised from time to time), the Subcontractor may make any such payments.
2.12 Tenant Relations, The Subcontractor shall use reasonable efforts to develop and
maintain good tenant relations in the Project. At all times during the term hereof, the Subcontractor shall use
reasonable efforts to retain existing tenants in the Project and, after completion of the initial leasing activity, to
retain new tenants. The Subcontractor shall use its reasonable efforts to secure compliance by the tenants with
the terms and conditions of their respective Leases.
2.13 Miscellaneous Duties, The Subcontractor shall (a) maintain orderly files containing
rent records, insurance policies, leases and subleases, correspondence, receipted bills and vouchers, bank
statements, canceled checks, deposit slips, debit and credit memos, and all other documents and papers
pertaining to the Project or the operation thereof at the Subcontractor's office at Subcontractor's address as set
forth in Section 12 and all such records shall be readily accessible to the Property Manager; (b) provide reports
for the preparation and filing by the Property Manager of each income or other tax return required by any
governmental authority, including annual statements allocating the expenses of and income from the Project to
the Property Manager; (c) consider and record tenant service requests in systematic fashion showing the action
taken with respect to each, and thoroughly investigate and report to the Property Manager in a timely fashion
with appropriate recommendations all complaints of a nature that might have a material adverse effect on the
Project or the Budget; (d) supervise the moving in and out of tenants and subtenants; arrange, to the extent
possible, the dates thereof to minimize disturbance to the operation of the Project and inconvenience to other
tenants or subtenants; and render an inspection report, an assessment for damages and a recommendation on
the disposition of any deposit held as security for the performance by the tenant under its lease with respect to
each premises vacated; (e) check all bills received for the services, work and supplies ordered in connection
with maintaining and operating the Project and, except as otherwise provided in this Agreement, pay such bills
when due and payable; and (f) not knowingly permit the use of the Project for any purpose that might void any
policy of insurance held by the Property Manager or Owners or that might render any loss thereunder
uncollectible. All such records are the property of the Property Manager and will be delivered to the Property
Manager upon request.
Basic Insurance.
3.1 Insurance,
3.1.1 The Subcontractor, at the Property Manager and/or Owner's expense, will
obtain and keep in force adequate insurance against physical damage (such as fire with extended coverage
endorsement, boiler and machinery) and against liability for loss, damage or injury to property or persons that
might arise out of the occupancy, management, operation or maintenance of the Project, as contemplated by
the Operating Plan and to the extent available at commercially reasonable rates. The Subcontractor shall not
be required to maintain earthquake or flood insurance unless expressly directed to do so by a specific written
notice from the Property Manager, but may do so in the Subcontractor's reasonable discretion. The
Subcontractor shall be a named insured on all property damage insurance and an additional insured on all
liability insurance maintained with respect to the Project. In the event the Subcontractor receives insurance
proceeds for the Project, the Subcontractor will take any required actions as set forth in the Loan Documents.
In the event that the Subcontractor receives insurance proceeds that are not governed by the terms of the Loan
2015663.2
Documents, the u con rac or will either r use such proceeds to replace, repair or returbish the Project or
(ii) distribute such proceeds to the Owners, as directed by the Property Manager. Any insurance proceeds
distributed to the Property Manager will be distributed subject to the fees owed to the Subcontractor pursuant
to this Agreement.
3.1.2 As part of the Operating Plan, the Subcontractor shall advise the Property
Manager in writing and make recommendations with respect to the proper insurance coverage for the Project,
taking into account the insurance requirements set forth in any deed of trust or mortgage on the Project, shall
furnish such information as the Property Manager may reasonably request to obtain insurance coverage and
shall reasonably aid and cooperate with respect to such insurance and any loss thereunder. The Property
Manager acknowledges that the Subcontractor is not a licensed insurance agent or insurance expert.
Accordingly, the Subcontractor shall be entitled to rely on the advice of a reputable insurance broker or
consultant regarding the proper insurance for the Project.
3.1.3 The Subcontractor shall investigate and submit, as soon as reasonably
possible, a written report to the insurance carrier and the Property Manager as to all accidents, claims for
damage relating to the Subcontractor, operation and maintenance of the Project, any damage to or destruction
of the Project and the estimated costs of repair thereof, and prepare and file with the insurance company in a
timely manner required reports in connection therewith. Notwithstanding the foregoing, the Subcontractor
shall not be required to give such notice to the Property Manager if the amount of such claims, damage or
destruction, as reasonably estimated by the Subcontractor, does not exceed $5,000 for any one occurrence.
The Subcontractor shall settle all claims against insurance companies arising out of any policies, including the
execution of proofs of loss, the adjustment of losses, signing and collection of receipts and collection of
money, except that the Subcontractor shall not settle claims in excess of $5,000 without the prior approval of
the Property Manager,
3.2 Additional Insurance. Any insurance obtained by the Subcontractor for its own
account and not for the benefit of the Owners, Property Manager or the Project shall be at the Subcontractor's
own expense.
3.3 Contractor's and Subcontractor's Insurance. The Subcontractor shall require all
contractors and subcontractors entering upon the Project to perform services to have insurance coverage at the
contractor's or subcontractor's expense, in the following minimum amounts: (a) worker's compensation -
statutory amount; (b) employer's liability (if required under applicable law) - $500,000 (minimum); and
(c) comprehensive general liability insurance, including comprehensive auto liability insurance covering the
use of all owned, non -owned and hired automobiles, with bodily injury and property damage limits of
$1,000,000 per occurrence. The Subcontractor may waive such requirements in its reasonable discretion. The
Subcontractor shall obtain and keep on file a certificate of insurance that shows that each contractor and
subcontractor is so insured.
3.4 Waiver of Subrogation. To the extent available at commercially reasonable rates, all
property damage insurance policies required hereunder shall contain language whereby the insurance carrier
thereunder waives any right of subrogation it may have with respect to the Property Manager or the
Subcontractor.
4. Financial Reporting And Record Keepine.
4.1 Books of Accounts. The Subcontractor shall maintain adequate and separate books
and records for the Project with the entries supported by sufficient documentation to ascertain their accuracy
with respect to the Project. Stich books and records shall contain a separate allocation of income and expenses
to the Property Manager. The Property Manager agrees to provide to the Subcontractor any financial or other
information reasonably requested by the Subcontractor to carry out its services hereunder. The Subcontractor
shall maintain such books and records at the Subcontractor's office at the Subcontractor's address as set forth
w'arrFir�t�a
in Section 12. 1 fie u con rac or shall ensure that the books and records will a maintained in order to
successfully undergo an outside independent third party audit. The Subcontractor shall ensure such control
over accounting and financial transactions as is reasonably necessary to protect the Owners' property from
theft, error or fraudulent activity by the Subcontractor's employees. The Subcontractor shall bear losses
arising from such instances, including, without limitation, the following: (a)theft of property by the
Subcontractor's employees, principals, or officers or those individuals associated or affiliated with the
Subcontractor; (b) overpayment or duplicate payment of invoices arising from either fraud or gross negligence,
unless credit is subsequently received; (c) overpayment of labor costs arising from either fraud or gross
negligence, unless credit is subsequently received by the Property Manager and/or Owners; (d) overpayment
resulting from payment from suppliers to the Subcontractor's employees or associates arising from the
purchase of goods or services for the Project; and (e) unauthorized use of facilities by the Subcontractor,
Subcontractor's employees or associates.
4.2 Financial Reports. On or before the tenth (10"') day following each month, the
Subcontractor shall furnish to the Property Manager a report package as defined in Exhibit D. Utilizing a
monthly report format approved by Property Manager, these reports shall show all collections, delinquencies,
uncollectible items, vacancies and other matters pertaining to the management, operation, and maintenance of
the Project during the month. The Subcontractor shall also deliver to the Property Manager within thirty (30)
days after (i) the close of a calendar year and (ii) the termination of this Agreement, a balance sheet and a
statement of income and expenses for the Project. The statement of income and expenses, the balance sheet,
and all other financial statements and reports shall be prepared on an accrual basis and a modified cash basis
according to, to the extent possible, generally accepted accounting principles (except that footnote disclosures
are not required). The Subcontractor may, but shall not be required, to obtain audited financial statements for
the Project. Should an audit be required, Subcontractor will coordinate with such auditor and make available
to such auditor at Subcontractor's facilities any reasonably requested financial records and supporting
documents sufficient to the completion of such audit. The Subcontractor shall also comply with all reporting
requirements relating to the operation of the Project required under any deed of trust or mortgage affecting the
Project and will supply the Property Manager with a copy.
4.3 Supporting Documentation. As additional support to the monthly financial
statement, unless otherwise directed by the Property Manager, the Subcontractor shall maintain and make
available copies of the following: (a) all bank statements and bank reconciliations; (b) detailed cash receipts
and disbursement records; (c) rent roll of tenants; (d) paid invoices (or copies thereof); (a) market study of
competition (quarterly only), The Subcontractor shall deliver a copy of the documents described in (a) through
(e) above to the Property Manager. The Subcontractor shall maintain within such items separate income and
expense accounts for the Property Manager and /or Owners, where and as appropriate. Subcontractor shall
also provide the standard accounting services described in Exhibit "D" attached.
4.4 Tax Information. The Subcontractor shall provide the Property Manager with
sufficient information for the delivery to the Property Manager and/or Owners so that the Owners can prepare
their income tax returns with appropriate adjustments to convert the information prepared on an accrual basis
to the cash method of accounting.
S. Right to Audit. Each of the Property Manager and the Owners and their representatives may
examine all books, records and files maintained for the Property Manager by the Subcontractor. The Property
Manager may perform any audit or investigations relating to the Subcontractor's activities at any office of the
Subcontractor, where such books and records are maintained. Should any of the Property Manager or Owners
discover defects in internal control or errors in record keeping, the Subcontractor shall undertake with all
appropriate diligence to correct such discrepancies either upon discovery or within a reasonable period of time.
The Subcontractor shall inform the Property Manager and/or Owners in writing of the action taken to correct
any audit discrepancies.
6. Bank Accounts.
2075663.2
pursuant to the Loan Documents, the Subcontractor shall deposit all rents and other funds collected from the
operation of the Project in a reputable bank or financial institution in a special trust or depository account or
accounts for the Project maintained by the Subcontractor for the benefit of the Property Manager and/or
Owners, The Subcontractor shall maintain books and records of the funds deposited in the accounts and
withdrawals there from (including records of deposits and withdrawals credited and charged to the Property
Manager and/or Owners) (such accounts together with any interest earned thereon, shall collectively be
referred to herein as the "Operating Account"), The Property Manager and/or Owners shall maintain the
Operating Account so that an amount at least as great as the budgeted expenses for such month is in such
Operating Account as of the first of each month. The Subcontractor shall pay from the Operating Account the
operating expenses of the Project and any other payments relative to the Project as required by this Agreement.
If more than one account is necessary to operate the Project, each account shall have a unique name.
6.2 Security Deposit Account. If law or a Lender requires a segregated account of
security deposits, the Subcontractor will open a separate account at a reputable bank or other financial
institution. The Subcontractor shall maintain such account in accordance with applicable law and/or the
applicable loan agreement. The Subcontractor shall use the account only to maintain security deposits. The
Subcontractor shall inform the bank or financial institution to hold the funds in trust for the Property Manager
and/or Owners. The Subcontractor shall maintain detailed records of all security deposits deposited, and allow
the Property Manager, the Owners or their designees access to such records. The Subcontractor may return
such deposits to any tenant in the ordinary course of business in accordance with the terms of the applicable
lease.
6.3 Access to Account. As authorized by signature cards, representatives of the
Subcontractor shall have access to and may draw upon all funds in the accounts described in Sections 6,1 and
6.2 without the approval of the Property Manager or Owners. Additionally, representatives of the
Subcontractor shall have access to and may draw upon any funds escrowed or held in reserve for capital
expenditures without the approval of the Property Manager or Owners, provided that the requirements of
Section 2.9 and any additional Lender requirements with respect to such amounts are satisfied.
Expenses
7.1 Payments of Expenses. The Subcontractor shall pay all expenses of the operation,
maintenance and repair with respect to the Project contemplated by the Budget directly from the Operating
Account or shall be reimbursed by the Property Manager and/or Owners, subject to the conditions set forth in
Section 2, including the following: (a) if applicable, costs of the gross salary and wages or proportional shares
thereof, payroll taxes, worker's compensation insurance, and all other benefits of employees required to
manage, operate and maintain the Project properly, adequately, safely and economically, subject to this
Agreement, provided that the Subcontractor shall not pay such employees in advance; (b) cost to correct the
violation of any governmental requirement relating to the leasing, use, repair and maintenance of the Project,
or relating to the rules, regulations or orders of the local Board of Fire Underwriters or other similar body, if
such cost is not the result of the Subcontractor's gross negligence or willful misconduct; (c) actual and
reasonable cost of making all repairs, decorations and alterations if such cost is not the result of the
Subcontractor's gross negligence or willful misconduct; (d) cost incurred by the Subcontractor in connection
with all service agreements; (e) cost of collection of delinquent rents collected or attempted to be collected by
a collection agency or attorney; (f) legal fees of attorneys; (g) cost of capital expenditures subject to the
restrictions in Section 2.9 and in this Section; (h) cost of printed checks for each account required by the
Property Manager and/or Owners; (i) cost of utilities; Q) cost of advertising; (k) cost of printed forms and
supplies required for use at the Project; (1) management compensation set forth in Section 9; (m) the cost of
tenant improvements to the Project; (n) all hiring, relocation and termination costs for any employee, including
those individuals whose salaries and benefits are paid by the Property Manager or Owners; (o) broker
commissions; (p) debt service; (q) the cost of services, contractors and insurance; (r) reimbursement of the
Subcontractor's out-of-pocket costs and expenses to the extent not prohibited by Section 8; (s) general
2075663.2
Property Manager and Owners; (t) cost of forms, papers, ledgers, and other supplies and equipment used in the
Subcontractor's office; (u) cost of electronic data processing equipment, including personal computers located
at the Subcontractor's office off the Project for preparation of reports, information and returns to be prepared
by the Subcontractor under the terms of this Agreement; (v) cost of electronic data processing provided by
computer service companies for preparation of reports, information and returns to be prepared by the
Subcontractor under the terms of this Agreement; (w) travel and entertainment expenses intended to advance
the interests of the Project such as travel and entertainment for prospective new tenants or for brokers and
(x) all overhead and indirect expenses of the Subcontractor's office, including, but not limited to,
communication costs (telephone, postage, etc.), computer rentals or time, supplies (paper, envelopes, business
forms, checks, payroll forms and record cards, forms for governmental reports, etc.), printing, equipment,
insurance, fidelity bonds, taxes, bank fees and license fees, and general office expenses allocable to the Project,
All other amounts payable with respect to the Project shall be payable from the Operating Account only after a
revised Budget has been submitted to the Property Manager (and in turn, the Owners), as provided in this
Agreement. If there are not sufficient funds in the Operating Account to make any such payment, the
Subcontractor shall notify the Property Manager if possible, at least ten (10) days prior to any delinquency so
that the Property Manager has an opportunity to allow the Owners to deposit sufficient funds in the Operating
Account to allow for such payment before the imposition of any penalty or late charge, No later than the tenth
(10'h) day of each month, the Subcontractor shall cooperate with the Property Manager to remit to the Owners
all unexpended funds for the prior month, except for a reserve for contingencies reflected in the Budget or
required by Lender which shall remain in the Operating Account in the amount equal to the expenses budgeted
for the month in which the remittance is to be made.
7.2 Annual Rent Starts, The Subcontractor shall annually prepare and submit to Tenants
(with Property Manager's prior approval) on or before December I" of the calendar year before the budget
year, a rent start letter containing any necessary Rental increases_
7.3 Annual Operating Expense Reconciliation. The Subcontractor shall annually prepare
and submit to Tenants according to the terns of the Leases (with Property Manager's prior approval), an
annual operating expense reconciliation within two months after the start of a new calendar year.
Subcontractor shall reimburse Property Manager for any lost revenue caused by Subcontractor's delay in this
process,
8. Subcontractor's Costs Not to Be Reimbursed.
8.1 Non -reimbursable Costs, The following expenses or costs incurred by or on behalf
of the Subcontractor in connection with the management and leasing of the Project shall be at the sole cost and
expense of the Subcontractor and shall not be reimbursed by the Property Manager or the Owners: (a) costs
attributable to losses arising from gross negligence, willful misconduct or fraud on the part of the
Subcontractor, the Subcontractor's associates or employees; and (b) cost of insurance purchased by the
Subcontractor for its own account.
8.2 Lifl ate. The Subcontractor will be responsible for and hold the Property Manager
and Owners harmless from, all costs relating to disputes with Subcontractor's employees for worker's
compensation (to the extent not covered by insurance), discrimination or wrongful termination, including legal
fees and other expenses,
9. Compensation.
9.1 Property Management Fee. The Subcontractor shall receive, for its services in
managing the day-to-day operations of the Project in accordance with the terms of this Agreement, a monthly
property management fee (the "Subcontractor Fee") equal to the greater of Two thousand five hundred and
00/100Dollars ($2,5000.00) or two and one half percent (2.5%) of the Gross Revenues (defined below).
2075663.2
Gross Revenues- shall be all gross billings from the operations of the PrWjcci including rental recerp s, lease
buy-out payments, and reimbursements by tenants for common area expenses, operating expenses and taxes
and similar pass -through obligations paid by tenants, but excluding (i) security deposits received from tenants
and interest accrued thereon for the benefit of the tenant until such deposits or interest are included in the
taxable income of the Owners; (ii) advance rents (but not lease buy-out payments) until the month in which
payments are to apply as rental income; (iii) reimbursements by tenants for work done for that particular
tenant, (iv) proceeds from the sale or other disposition of all or any part of the Project, (v) insurance proceeds
received by the Property Manager and/or Owners as a result of any insured loss (except proceeds from rent
insurance or the excess of insurance proceeds for repairs over the actual costs of such repairs),,
(vi) condemnation proceeds not attributable to rent, (vii) capital contributions made by the Property Manager
and/or Owners; (viii) proceeds from capital, financing and any other transactions not in the ordinary course of
the operation of the Project, (ix) income derived from interest on investments or otherwise, (x) abatement of
taxes, awards arising out of takings by eminent domain, discounts and dividends on insurance policies, and (xi)
rental concessions not paid by third parties, The Subcontractor Fee shall be payable monthly from the
Operating Account or from other funds timely provided by the Property Manager and/or Owners.
9.2 Intentionally Omitted
9.3 Construction Management Fee: The Construction Management Fee shall be a
percentage of the cost of construction, payable one hundred percent (100%) upon completion, or periodically
based upon percentage of completion, as the parties may agree. As used herein, `cost of construction" shall
include: all labor and supervision costs; costs of materials and supplies; contract price for all construction
work performed by general contractors and subcontractors; fees, taxes or other charges levied by governmental
or quasi -governmental agencies in connection with the issuance of all authorizations, approvals, licenses and
permits necessary to undertake construction of the project; cost of all equipment and fixtures provided for in
drawings and specifications; concrete, welding and other testing expenses; and, all architectural and
engineering fees or costs.
Capital or tenant improvement projects that are contracted by the Subcontractor on behalf of the
Owners will be compensated pursuant to the following schedule:
COST OF CONSTRUCTION FEE
$0 — $100,000 q%
$100,001-$200,000 3.5%
$200,001 - $300,000 3%
Greater than $300,001 By negotiation
10. Termination,
10.1 Termination by the Property Manager. This Agreement shall commence on August
1, 2007, and shall continue for an initial term ending on July 31, 2008, unless sooner terminated or unless
present management company terminates the contract sooner than July 31, 2007. Unless written notice to
terminate is given by either party to the other at least thirty (30) days prior to the end of the initial term, this
Agreement shall be automatically renewed on August 1, 2008, on a month -to -month basis, upon and subject to
the terms and conditions set forth in this Agreement. The Property Manager shall have the right to terminate
this Agreement, at any time subsequent to the initial term, without cause, upon thirty (30) days prior written
notice to the Subcontractor.
10
20756612
emm�a .on y e u con rac or. -
10.2.1 The Subcontractor shall have the right to terminate this Agreement, provided
that the Property Manager is in default in the performance of any of their obligations hereunder, and such
default remains uncured for thirty (30) days following the Subcontractor's giving of written notice of such
default to the Property Manager.
10.2.2 The Subcontractor shall have the right to terminate this Agreement for any
reason upon 60 days written notice.
10.3 Final Accountine. Within thirty (30) days after termination of this Agreement for
any reason, the Subcontractor shall deliver to the Property Manager the following; (a) a final accounting,
setting forth the balance of income and expenses on the Project as of the date of termination; (b) transfer to any
account indicated by the Property Manager any balance or monies of the Property Manager, Owners or tenant
security deposits hold by the Subcontractor with respect to the Project; and (c) all materials and supplies, keys,
books and records, contracts, leases, receipts for deposits, unpaid bills and other papers or documents that
pertain to the Project. For a period of thirty (30) days after such expiration or cancellation for any reason other
than the Property Manager's default, the Subcontractor shall be available, through its senior executives
familiar with the Project, to consult with and advise the Property Manager or any person or entity succeeding
the Properly Manager as Property Manager of the Project or such other person or persons selected by the
Property Manager regarding the operation and maintenance of the Project. In addition, the Subcontractor shall
cooperate with the Property Manager in n6tifying all tenants of the Project of the expiration and termination of
this Agreement, and shall use reasonable efforts to cooperate with the Property Manager to accomplish an
orderly transfer of the operation and management of the Project to a party designated by the Property Manager.
The Subcontractor shall, at its cost and expense, promptly remove all signs wherever located indicating that it
is the Subcontractor and replace and repair any damage resulting there from. Termination of this Agreement
shall not release either party from liability for failure to perform any of the duties or obligations as expressed
herein and required to be performed by such party for the period before the termination.
11. Conflicts. The Subcontractor shall not deal with or engage, or purchase goods or services
from, any subsidiary or affiliated company of the Subcontractor in connection with the management of
the Project without prior consent of Property Manager.
12. Notices. Any notice to be given or other document or payment to be delivered by any party
to any other party hereunder may be delivered in person, or may be deposited in the United States
mail, duly certified or registered, with postage prepaid, or by Federal Express or other similar
overnight delivery service, and addressed to the party for whom intended, see exhibit E, and as
follows:
2075663.2
To the Subcontractor at:
Stan Ford
TIG Central Texas, LTD
901 S. Mopac Expressway
Barton Oaks Plaza IV, Suite 285
Austin, Texas 78746
and
To the Property Manager at:
Principle Equity Properties, LP
10303 NW Freeway, Suite 300
Houston, Texas 77092
Attention: Linda S. Larabee
Any party hereto may from time to time, by written notice to the others, designate a different address
which shall be substituted for the one above specified. Unless otherwise specifically provided for herein, all
notices, payments demands or other communications given hereunder shall be in writing and shall be deemed
to have been duly given and received (i) upon personal delivery, or (ii) as of the third business day after
mailing by United States registered or certified mail, postage prepaid, addressed as set forth above, or (iii) the
immediately succeeding business day after deposit with Federal Express or other similar overnight delivery
system.
13. Miscellaneous,
13.1 Assignment, The Subcontractor may not assign this Agreement without the prior
written consent of the Property Manager and Owners, except with respect to an assignment to an affiliate,
including, but not limited to a wholly -owned subsidiary, which shall be permissible under this Agreement,
which consent may be withheld in the Property Manager and/or Owner's sole and absolute discretion.
13.2 Gender. Each gender shall include each other gender. The singular shall include the
plural and vice -versa.
13.3 Amendments. Except as otherwise provided, each amendment, addition or deletion
to this Agreement shall not be effective unless approved by the parties in writing. Except for amendments
occurring as a result of a transfer of all or a portion of the Owners' Interest that is made pursuant to the Loan
Documents, any amendment to this Agreement must be consented to in writing by Lender, or after
securitization of the Loan, from each rating agency that provides a rating in connection with the Loan unless
the Property Manager shall have provided written confirmation from each rating agency that provides a rating
in connection with the Loan that such amendment shall not result in any withdrawal, qualification or
downgrade of such rating. The Lender is expressly intended to be a third party beneficiary of this Section and
shall have the right to enforce the obligations of the parties hereunder.
13.4 Attorneys' Fees. In any action or proceeding between the Subcontractor and the
Property Manager and/or Owners arising from or relating to this Agreement or the enforcement or
interpretation hereof, the party prevailing in such action or proceeding shall be entitled to recover from the
other party all of its reasonable attorneys' fees and other costs and expenses of the action or proceeding.
13.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Tennessee without regard to any choice of law rules.
12'
2075663.2
13.6 enue. Any action relating to or arising out of this Agreement shall a brought only
in a court of competent jurisdiction located in Nashville, Tennessee,
13.7 Headin¢s. All headings are only for convenience and ease of reference and are
irrelevant to the construction or interpretation of any provision of this Agreement.
13.8 Representations. The Subcontractor represents and warrants that it is fully qualified
and licensed, to the extent required by law, to manage and lease real estate and perform all obligations
assumed by the Subcontractor hereunder. The Subcontractor shall use reasonable efforts to comply with all
such laws now or hereafter in effect.
13.9 Indemnification by the Subcontractor.
13.9.1 The Subcontractor shall indemnify, defend and hold the Property Manager
and Owners and their shareholders, members, partners, officers, directors, and employees harmless from any
and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses,
including reasonable attorneys' fees and court costs, sustained or incurred by or asserted against the Property
Manager or Owners by reason of the acts of the Subcontractor which arise out of the gross negligence, willful
misconduct or fraud of the Subcontractor, its agents or employees or the Subcontractor's breach of this
Agreement. If any person or entity makes a claim or institutes a suit against the Property Manager or Owners
on a matter for which the Property Manager or Owners claims the benefit of the foregoing indemnification,
then (a) the Property Manager shall give the Subcontractor prompt notice thereof in writing; (b) the
Subcontractor may defend such claim or action by counsel of its own choosing provided such counsel is
reasonably satisfactory to the Property Manager; and (c) neither the Property Manager, Owners nor the
Subcontractor shall settle any claim without the other's written consent.
13.9.2 The Subcontractor acknowledges that the Property Manager and/or Owners
have or will be entering into Loan Documents, which may include provisions for personal liability for the
Property Manager and/or Owners on certain "nonrecourse carve -outs." The Subcontractor hereby agrees that
to the extent that the Property Manager and/or Owners are required to make payments on such indemnification
as a direct result of (1) the Subcontractor's fraud or willful misconduct, (ii) the Subcontractor's commission of
a criminal act or (iii) damage or destruction to the Project caused by acts of the Subcontractor that arc grossly
negligent, the Subcontractor will indemnify the Property Manager and/or Owners for any such liability that
was caused by such actions.
13.10 Indemnification by the Property Manager and Owners. The Property Manager and
Owners shall indemnify, defend and hold the Subcontractor and its shareholders, members, partners, officers,
directors and employees harmless from any and all claims, demands, causes of action, losses, damages, fines,
penalties, liabilities, costs and expenses, including reasonable attorneys' fees and court costs, sustained or
incurred by or asserted against the Subcontractor by reason of the operation, management, and maintenance of
the Project and the performance by the Subcontractor of the Subcontractor's obligations under this Agreement,
except those which arise from the Subcontractor's gross negligence, willful misconduct or fraud. If any person
or entity makes a claim or institutes a suit against the Subcontractor on a matter for which the Subcontractor
claims the benefit of the foregoing indemnification, then (a) the Subcontractor shall give the Property Manager
prompt notice thereof in writing; (b) the Property Manager and Owners may defend such claim or action by
counsel of their own choosing provided such counsel is reasonably satisfactory to the Subcontractor;
(c) neither the Subcontractor, Owners nor the Property Manager shall settle any claim without the other's
written consent; and (d) this subsection shall not be so construed as to release the Subcontractor, Owner or the
Property Manager from any liability to the other for a breach of any of the covenants agreed to be perfornied
under the terms of this Agreement. The Property Manager and/or Owners agree that this Section 13.10 is
subject and subordinate to the Loan Documents and the liens created thereby and to all rights of Lender
thereunder.
13
20756612
13.11 Complete Agreement. is Agreement shall supersede ann take the place of any an
all previous agreements entered into between the parties with respect to the Project.
13.12 Severabilhy If any provisions of this Agreement or application 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, where the application of such provisions or circumstances other
than those as to which it is determined to be invalid or unenforceable shall not be affected thereby, and each
provision hereof shall be valid and shall be enforced to the fullest extent permitted by law.
13,13 No Waiver. The failure by either party to insist upon the strict performance of or to
seek remedy of any one of the terms or conditions of this Agreement or to exercise any right, remedy, or
election set forth herein or permitted by law shall not constitute or be construed as a waiver or relinquishment
for the future of such term, condition, right, remedy or election, but such item shall continue and remain in full
force and effect. All rights or remedies of the parties specified in this Agreement and all other rights or
remedies that they may have at law, in equity or otherwise shall be distinct, separate and cumulative rights or
remedies, and no one of them, whether exercised or not, shall be deemed to be in exclusion of any other right
or remedy of the parties.
13.14 Binding Effect, This Agreement shall be binding and inure to the benefit of the
parties and their respective successors and assigns.
13.15 Enforcement of the Subcontractor's Rights. In the enforcement of its rights under
this Agreement, the Subcontractor shall not seek or obtain a money judgment or any other right or remedy
against any shareholders or disclosed or undisclosed principals of the Property Manager or Owners. The
Subcontractor shall enforce its rights and remedies solely against the Property Manager or Owners.
13.16 Counterparts. This Agreement may be executed in several counterparts, and all so
executed shall constitute one Agreement, binding on all of the parties hereto, notwithstanding that all of the
parties are not signatory to the original or the same counterpart.
14
2075663.2
IN Wit NESS WHEREOF, e parties hereto Have executed :s Agreement the date and year first
above written.
SUBCONTRACTOR:
By: TIG Central Texas Ltd
By: L
Stan Ford, Principal
PROPERTY MANAGER:
By: Principle Equity Properties, LP, a Delaware
limited partnership
By: Principle Equity Properties, LLC, a Delaware
limited liability company; its general partner
By:
Michae ay, its member
15
2075663.2
To be Provided.
2075663.1
LEGAL DESCRIPTION
NOTICE
SUBCONTRACTOR:
Attention: Stan Ford
TIG Central Texas, LTD
901 S. Mopac Expressway
Barton Oaks Plaza IV, Suite 285
Austin, Texas 78746
and
PROPERTY MANAGER:
Principle Equity Properties, LP
10303 NW Freeway, Suite 300
Houston, Texas 77092
Attention: Linda S. Larabee
2075663.1
EXHIBIT "C"
INITIAL BUDGET
To be Provided.
2075663.1
EXHIBIT D
ACCOUNTING SERVICES
Standard Reporting
Subcontractor shall keep and maintain, or shall cause to be kept and maintained on a Calendar Year (unless
otherwise directed) proper and accurate books, records and accounts reflecting all of the financial affairs of the
Project transacted by Subcontractor. Subcontractor shall supply Property Manager with any information
necessary to determine the accuracy of the books, records and accounts. Property Manager shall have the right
from time -to -time at all times during normal business hours upon reasonable notice to examine such books and
accounts at the office of the Subcontractor's accounting department and to make such copies or extracts
thereof as Property Manager shall desire.. Subcontractor shall assist any audit firm employed by Property
Manager to oversee any audit or review of the property books.
Subcontractor's accounting records and reports will be provided in Subcontractor's standard report format
unless a format is given by Property Manager. Subcontractor shall prepare and submit the following reports
and statements, which reports shall (i) be on both an accrual and modified cash basis and, (ii) be prepared on
software previously approved by the Property Manager,
Subcontractor shall provide Property Manager an Accounts Receivable Report on the 5a', 101" and 20m of
every month.
On a monthly basis, the Subcontractor will furnish a report summarizing the financial operations of the Project
("Financial Report"). This report will be due to the Property Manager on or before the 10' of the month and
will include operations for the previous month ending on the last dray of the month'. The Financial Report will
include the following:
(a) Balance Sheet
(b) Actual vs. Budget Operating Statement
a. Month to Month
b. Year -to -Date
c. Annual Budget vs. Projection
(c) Variance Report describing variances in (b)
(d) Cash Flow Statement
(e) Accounts Receivable Aging Report
(f) Rent Roll
(g) Cash Receipts Detail
(h) Cash Disbursement Detail
(i) Security Deposit Ledger
0) Current Month General Ledger
(k) Prior Month Bank Reconciliation
(1) Lease Expiration Report
(m) Asset Manager, Property Manager and Subcontractor Fee Calculation
(n) Capitalization Schedule showing all Building Improvements, Tenant Improvements, Leasing
Costs
(o) Detailed Executive Summary/Narrative regarding Operations, Capital Expenditures, Leasing
Activity, and Market Conditions
2075663.1
PROPERTY AND ASSET MANAGEMENT AGREEMENT
This PROPERTY AND ASSET MANAGEMENT AGREEMENT (the "Agreement") is dated as
of this 27th day of March, 2007, by and among PEM University S, LP, a Delaware limited partnership
and PEM University H, LLC, a Delaware limited liability company (collectively, the "Tenants in
Common"), and Principle Equity Properties, LP, a Delaware limited partnership (the "Property
Manager").
The Tenants in Common own the commercial real estate located in College Station, Texas
commonly known as University Shopping Center and as more particularly described in Exhibit "A"
attached hereto and incorporated herein (the "Project"). The Tenants in Common desire to engage the
Property Manager to supervise, manage, lease, operate, and maintain the Project. The Tenants in
Common have entered into a Tenants in Common Agreement (the "Tenants in Common Agreement")
concurrently herewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Commencement and Termination Dates• Authority of Tenants in Common.
1.1 Commencement and Termination. The Property Manager's duties and
responsibilities under this Agreement shall begin on the date of this Agreement and shall terminate on the
earlier of (i) the sale of the Project or any portion thereof, as to such portion of the Project sold only (other
than any sale of an undivided interest held by a Tenant in Common to a party that will acquire such
interest subject to the Tenants in Common Agreement and this Agreement), (ii) termination or the failure
to renew as provided in Section 10, or (iii) December 31, 2050.
1.2 Authority of the Tenants in Common.
1.2.1 Consent of the Tenants in Common. The consent of the Tenants in
Common shall be as set forth in Sections 2.2 or 2.3 of the Tenants in Common Agreement.
1.2.2 Authority of Property Manage*. Upon the approval of any item by the
Tenants in Common pursuant to Sections 2.2 and 2.3 of the Tenants in Common Agreement, the Property
Manager shall have the power and authority to act on behalf of the Tenants in Common with respect to
such items.
2. ProVeM Manager's Responsibilities.
2.1 Status of the Property Manager. The Tenants in Common and the Property
Manager do not intend to form a joint venture, partnership or similar relationship. Instead, the parties
intend that the Property Manager shall act solely in the capacity of an independent contractor for the
Tenants in Common. Nothing in this Agreement shall cause the Property Manager and the Tenants in
Common to be joint venturers or partners of each other, and neither shall have the power to bind or
obligate the other party by virtue of this Agreement, except as expressly provided in this Agreement.
Nothing in this Agreement shall deprive or otherwise affect the right of either party to own, invest in,
manage, or operate, or to conduct business activities which compete with the business of the Project.
2.2 Management. The Property Manager shall manage, operate and maintain the
Project in an efficient, economic, and satisfactory manner and shall arrange the performance of everything
3802200.3
reasonably necessary for the proper operation of the Project for the tenants thereof, subject to
(a) applicable governmental requirements and (b) the terms and provisions of this Agreement. At the
expense of the Tenants in Common, the Property Manager shall keep the Project clean and in good repair,
shall order and supervise the completion of such repairs as may be required and shall generally do and
perform, or cause to be done or performed, all things necessary, required or desirable for the proper and
efficient management, operation, and maintenance of the Project; provided the Tenants in Common, in a
manner reasonably satisfactory to the Property Manager, make available to the Property Manager such
sums as are reasonably necessary to pay the costs thereof. In addition to the foregoing, Property Manager
shall have exclusive responsibility for interfacing and communicating with the owner and holder of any
deed of trust or mortgage upon the Project (a "Lender") in connection with the loan secured by such deed
of trust or mortgage ("Loan"), including, without limitation, PNC Bank, National Association (the "Initial
Lender") (the holder of the initial mortgage or deed of trust representing the initial Loan on the Project
(the "Initial Loan")) and its successors and assigns, and shall (i) make all day to day business decisions
customarily provided by a property manager and (ii) perform all services customarily provided by a
property manager, with respect to interfacing with a Lender, including, without limitation, designating
changes in address, receiving any and all notices including, without limitation default notices on behalf of
the Tenants in Common, requesting waivers of provisions in any documents, including any deed of trust
or mortgage in respect of a Loan ("Loan Documents") and negotiating conditions to any such requested
waivers that might be granted by any such owner and holder, depositing rents or other revenues in any
lockbox account maintained under such Loan Documents, receiving into an operating account to be
maintained by Property Manager for the benefit of the Tenants in Common all disbursements made out of
any such lockbox to the Tenants in Common as the borrower thereunder for the payment of operating
expenses of the Project, or otherwise to be made to or for the account of the Tenants in Common as such
borrower, requesting and receiving any amounts out of any reserve accounts or escrow accounts
maintained by such Lender on account of repairs, capital improvements, tenant improvements, leasing
commissions, real estate taxes and assessments and insurance proceeds or otherwise. The Property
Manager shall perform all services in a diligent and professional manner.
2.3 Employees; Independent Contractor. The Property Manager shall employ,
directly or through third party contractors (e.g. employee leasing company), at all times a sufficient
number of capable employees and/or independent contractors to enable the Property Manager to properly,
adequately; safely and economically manage, operate and maintain the Project. All matters pertaining to
the supervision of such employees shall be the responsibility of the Property Manager. All salaries and
benefits and positions of employees who perform work in connection with the Project shall be consistent
with the Budget (as defined in Section 2.5.1).
2.4 Compliance with Laws, Mortgages and Other Matters.
2.4.1 The Property Manager shall use reasonable efforts to comply with any
Loan Documents affecting the Project and all governmental requirements relative to the performance of
its duties hereunder and cause the Project to comply with any Loan Documents affecting the Project and
all governmental requirements. Property Manager may implement such procedures with respect to the
Project as the Property Manager may deem advisable for the more efficient and economic management
and operation thereof. The Property Manager shall pay from the Operating Account (defined in
Section 6.1) expenses incurred to remedy violations of laws. However, the Property Manager shall not be
obligated to remedy violations of law if sufficient funds are not available in the Operating Account or if
the Tenants in Common do not provide sufficient additional funds to do so.
2.4.2 The Property Manager shall furnish to the Tenants in Common, promptly
after receipt, any notice of violation of any material governmental requirement or order issued by any
3802200.3
2
governmental entity relating to the Project, any notice of default from a Lender or any notice of
termination or cancellation of any insurance policy.
2.5 , Budgets and Operating Plan.
2.5.1 The Property Manager shall prepare and submit to the Tenants in
Common annually an annual capital and operating budget ("Budget") for the promotion, operation,
leasing, repair, maintenance and improvement of the Project for each calendar year. The Budget for the
initial calendar year is attached hereto as Exhibit `B" and is hereby approved by each Tenant in Common.
The Property Manager shall deliver each subsequent Budget for each subsequent calendar year on or prior
to December 15th of the calendar year before the budget year, or as soon as possible thereafter. The
Tenants in Common shall approve or disapprove of the Budget as set forth in Section 2.3 of the Tenants
in Common Agreement and the Property Manager agrees to comply with the terms and conditions of
Section 2.3 of the Tenants in Common Agreement. The Property Manager may proceed under the terms
of the proposed Budget for items that are not objected to and may take any action with respect to items
not approved for Permitted Expenditures (as defined in Section 2.5.2). In the event that the items that are
objected to are operational expenditures, as opposed to capital expenditures, the Property Manager shall
be entitled to operate the Project using the prior year's Budget for such items until the approval is
obtained. The Property Manager shall provide the Tenants in Common with such information regarding
the Budget as may be, from time to time, reasonably requested by the Tenants in Common. The Property
Manager may at any time submit a revised Budget to the Tenants in Common for their approval
consistent with the terms of this Section.
2.5.2 The Property Manager shall charge all expenses to the proper account as
specified in the Budget, provided that the Property Manager may reallocate savings from one line item to
other line items. The Property Manager shall submit (subject to the same procedures as set forth in
Section 2.5.1) a revised Budget to the Tenants in Common before making any expenditure not within the
Budget unless the expenditure is (a) less than $50,000, or (b) is, in the Property Manager's reasonable
judgment, required to avoid personal injury, significant property damage, a default under any loan
encumbering the Project, a violation of applicable law or the suspension of a service (collectively,
"Permitted Expenditures").
2.5.3 Together with the submission of the Budget, the Property Manager shall
submit each year to the Tenants in Common for information purposes only an operating plan for the
general operation of the Project, including a proposed list of improvements to the Project, general
insurance plan, marketing plan and plan for the general operation and maintenance of the Project (the
"Operating Plan"). The Property Manager may submit a revised Operating Plan to the Tenants in
Common at any time.
2.5.4 Any controversy between the parties hereto arising out of or related to
the Budget shall be settled as set forth in Section 2.3 of the Tenants in Common Agreement.
2.5.5 The Property Manager shall be required to provide the Lender copies of
all budgets or reports relating to the Project in any Loan Documents and comply with the provisions
applicable to the Property Manager set forth in the Loan Documents,
2.5.6 During each calendar year, in the regular quarterly reports sent to the
Tenants in Common, the Property Manager shall inform the Tenants in Common of any, material
increases in costs and expenses not foreseen and not included in the Budget within a reasonable time after
the Property Manager learns of such changes.
3802200.3
2.6 Leasine.
2.6.1 Each Tenant in Common hereby approves all Leases (as defined in
Section 2.6.2) presently in effect on the date hereof and the Property Manager's standard lease form, a
copy of which is attached hereto and incorporated herein as Exhibit "C."
2.6.2 The Property Manager shall use commercially reasonable efforts to
obtain tenants for all leasable space in the Project and to renew leases and rental agreements (collectively,
"Leases") as provided herein. The Property Manager shall have the authority to negotiate new and
renewal Leases on behalf of the Tenants in Common and to execute and deliver on behalf of the Tenants
in Common any Leases that are approved by the Tenants in Common pursuant to Section 2.2 of the
Tenants in Common Agreement. In connection with its leasing efforts, the Property Manager may
advertise the Project for lease.
2.6.3 The Property Manager shall not, without the prior written approval of the
Tenants in Common, give free rental or discounts or rental concessions to any employees, officers or
shareholders of the Property Manager or anyone related to such employees, officers or shareholders
unless such discounts or concessions are in lieu of salaries or other benefits to which they would be
contractually entitled. The Property Manager shall not lease any space in the Project to itself or to any of
its affiliates or subsidiaries.
2.6.4 The Property Manager shall reasonably investigate all prospective
tenants, and shall not rent to persons not meeting credit standards reasonable for the market. The
Property Manager may, in its discretion, obtain a credit check for all prospective tenants through a credit
check company. The Property Manager shall retain such information for the duration of the tenancy, and
shall make it available to the Tenants in Common upon reasonable notice, subject to compliance with any
confidentiality restrictions required by any tenant or any credit check company. The Property Manager
does not guarantee the accuracy of any such information or the financial condition of any tenant.
2.6.5 The Property Manager and the Tenants in Common agree that there shall
be no discrimination against or segregation of any person or group of persons on account of age, race,
color, religion, creed, handicap, sex or national origin in the leasing of the Project, nor shall the Tenants
in Common or the Property Manager permit any such practice or practices of discrimination or
segregation with respect to the selection, location, number or occupancy of tenants.
2.6.6 The Property Manager is hereby authorized to execute any and all
Subordination and Non -Disturbance Agreements, Tenant Estoppel Certificates and Tenant Notices with
respect to the Project, and any and all property tax declaration forms with respect to the acquisition of the
Proj ect.
2.6.7 The Property Manager shall engage contractors, engineers, architects and
other consultants on behalf of the Tenants in Common to design and construct customary tenant
improvements contemplated by the Leases that are in accordance with the approved leases or the Budget.
The Property Manager shall oversee the design and construction of such tenant improvements. For any
contract requiring payment in excess of $50,000, the Property Manager shall follow the bidding
requirements specified in Section 2.9.
2.6.8 The Property Manager is hereby authorized to execute any and all
Subordination and Non -Disturbance Agreements, Tenant Estoppel Certificates and Tenant Notices with
respect to the Project, and any and all property tax declaration forms with respect to the acquisition of the
Project.
3802200.3
2.7 Collection of Rents and Other Income. Unless otherwise required by any Loan
Documents affecting the Project, the Property Manager shall bill all tenants and shall use its commercially
reasonable efforts to collect all rent and other charges due and payable from any tenant or from others for
services provided in connection with the Project. The Property Manager shall deposit all monies so
collected in the Operating Account (as defined in Section 6.1). The Property Manager shall allocate all
income, revenue and expense from the Project to the Tenants in Common as set forth in the Tenants in
Common Agreement.
2.8 Repairs and Maintenance. The Property Manager shall maintain the buildings,
appurtenances and common areas of the Project, other than areas that are the responsibility of the tenants.
The Property Manager shall pay actual and reasonable expenses for materials and labor for such purposes
from the Operating Account. The Property Manager shall take reasonable precautions against fire,
vandalism, burglary and trespass to the Project.
2.9 Capital Expenditures. The Property Manager may make any capital expenditure
within any Budget approved by the Tenants in Common without any further consent. All other capital
expenditures other than Permitted Expenditures shall be subject to submittal of a revised Budget to the
Tenants in Common. Unless the Tenants in Common specifically waive such requirements, or approve a
particular contract, the Property Manager shall award any contract for a capital improvement exceeding
$50,000 in cost on the basis of competitive bidding, selected from a minimum of two (2) written bids.
The Property Manager shall accept the bid of the lowest bidder determined by the Property Manager in its
sole discretion to be responsible, qualified, and capable of completing such improvements on a reasonable
schedule and as bid.
2.10 Service Contracts Supplies and E uipment.
2.10.1 The Property Manager may enter into or renew any contract for cleaning,
maintaining, repairing or servicing the Project or any of the constituent parts of the Project (including
contracts for fuel oil, security or other protection, extermination, landscaping, architectural or engineering
services) contemplated by the Budget and consistent with the Operating Plan with any unrelated third
party without the consent of the Tenants in Common. Each such service contract shall (a) be in the name
of the Tenants in Common or in the name of the Property Manager as agent for the Tenants in Common,
(b) be assignable to the nominee of the Tenants in Common and (c) be for a term not to exceed one
(1) year. Unless the Tenants in Common specifically waive such requirements or approve a particular
contract, all service contracts for amounts in excess of $50,000 per year shall be subject to the bidding
requirements specified in Section 2.9.
2.10.2 If this Agreement terminates or is not renewed pursuant to Section 10,
the Property Manager, at the option of the Tenants in Common, shall assign to the nominee of the Tenants
in Common all of the Property Manager's interest in all service agreements pertaining to the Project, if
any.
2.10.3 At the expense of the Tenants in Common, the Property Manager may
purchase, provide, and pay for all needed janitorial and maintenance supplies, tools and equipment,
restroom and toilet supplies, light bulbs, paints, and similar supplies necessary for the efficient and
economical operation and maintenance of the Project. Such supplies and equipment shall be the property
of the Tenants in Common. All such supplies, tools, and equipment shall be delivered to and stored at the
Project and shall be used only in connection with the management, operation, and maintenance of the
Project.
3802200.3
2.11 Taxes, Mortea¢es. The Property Manager, unless otherwise requested, shall
obtain and verify bills for real estate and personal property taxes, general and special real property
assessments and other like charges (collectively "Taxes') which are or may become liens against the
Project and appeal such Taxes as the Property Manager may decide in its reasonable judgment. The
Property Manager, if requested by the Tenants in Common, will cooperate to prepare an application for
correction of the assessed valuation (in cooperation with representatives of the Tenants in Common) to be
filed with the appropriate governmental agency. The Property Manager shall pay, within the time
required to obtain discounts, from funds provided by the Tenants in Common or from the Operating
Account, all utilities, Taxes and payments due under each lease, mortgage, deed of trust or other security
instrument, if any, affecting the Project. To the extent contemplated by the Budget and in conformance
with the Operating Plan (as either may be revised from time to time), the Property Manager may make
any such payments.
2.12 Miscellaneous Duties. The Property Manager shall (a) maintain at the Property
Manager's office at the Property Manager's address as set forth in Section 12 and readily accessible to the
Tenants in Common orderly files containing rent records, insurance policies, leases and subleases,
correspondence, bank statements, canceled checks and all other documents and papers pertaining to the
Project or the operation thereof; (b) provide information about the Project necessary for the preparation
and filing by each of the Tenants in Common of their individual income or other tax returns required by
any governmental authority, including annual statements, identifying each Tenant in Common's
undivided percentage of all expenses paid and income received by such Tenant in Common (or, if
requested by a Tenant in Common, all expenses of and income from the Project allocable to such Tenant
in Common's undivided interest in the Project); (c) consider and record tenant service requests in
systematic fashion showing the action taken with respect to each, and thoroughly investigate all
complaints of a nature which might have a material adverse effect on the Project or the Budget; (d)
supervise the moving in and out of tenants and subtenants; arTange, to the extent possible, the dates
thereof to minimize disturbance to the operation of the Project and inconvenience to other tenants or
subtenants; (e) check all bills received for the services, work and supplies ordered in connection with
maintaining and operating the Project and, except as otherwise provided in this Agreement, pay such bills
when due and payable; and (f) not knowingly permit the use of the Project for any purpose that might
void any policy of insurance held by the Tenants in Common or which might render any loss thereunder
uncollectable. All such records are the property of the Tenants in Common and will be delivered to the
Tenants in Common upon request.
2.13 Limitation. Notwithstanding anything to the contrary contained herein, the
Property Manager shall only provide customary services to tenants of the Project and shall provide no
other services to the tenants on behalf of the Tenants in Common.
3. Basic Insurance,
3.1 Insurance,
3.1.1 The Property Manager, at the Tenants in Common's expense, will obtain
and keep in force adequate insurance against physical damage (such as fire with extended coverage
endorsement, boiler and machinery) and against liability for loss, damage or injury to property or persons
that might arise out of the occupancy, management, operation or maintenance of the Project, as
contemplated by the Operating Plan and any Loan Documents affecting the Project (including the Initial
Loan Documents) and to the extent available at commercially reasonable rates. The Property Manager
shall not be required to maintain earthquake or flood insurance unless expressly directed to do so by a
specific written notice from the Tenants in Common or as required by any Loan Documents affecting the
Project, but may do so in the Property Manager's reasonable discretion. The Property Manager shall be a
3802200.3
named insured on all property damage insurance and an additional insured on all liability insurance
maintained with respect to the Project. hi the event the Property Manager receives insurance proceeds for
the Project, the Property Manager will take any required actions as set forth in any Loan Documents
affecting the Project. In the event that the Property Manager receives insurance proceeds that are not
governed by the terms of any Loan Documents affecting the Project, the Property Manager will either
(i) use such proceeds to replace, repair or refurbish the Project or (ii) distribute such proceeds to the
Tenants in Common, as directed by the Tenants in Common. Any insurance proceeds distributed to the
Tenants in Common will be distributed subject to the fees owed to the Property Manager pursuant to this
Agreement. The foregoing notwithstanding, in all events the Property Manager will obtain on behalf of
the Tenants in Common, at the Tenants in Common's expense, all applicable insurance coverage as may
be required by the terms of any Loan Documents.
3.1.2 The Property Manager shall investigate and submit, as soon as
reasonably possible, a written report to the insurance carrier and the Tenants in Common as to all
accidents, claims for damage relating to the ownership, operation and maintenance of the Project, any
damage to or destruction of the Project and the estimated costs of repair thereof, and prepare and file with
the insurance company in a timely manner required reports in connection therewith. Notwithstanding the
foregoing, the Property Manager shall not be required to give such notice to the Tenants in Common if
the amount of such claims, damage or destruction, as reasonably estimated by the Property Manager, does
not exceed $50,000 for any one occurrence. The Property Manager shall settle all claims against
insurance companies arising out of any policies, including the execution of proofs of loss, the adjustment
of losses, signing and collection of receipts and collection of money, except that the Property Manager
shall not settle claims in excess of $50,000 without the prior approval of the Tenants in Common as set
forth in Section 2.2.2 of the Tenants in Common Agreement.
3.1.3 As part of the Operating Plan, the Property Manager shall advise the
Tenants in Common in writing and make recommendations with respect to the proper insurance coverage
for the Project, taking into account the insurance requirements set forth in any deed of trust or mortgage
on the Project, shall furnish such information as the Tenants in Common may reasonably request to obtain
insurance coverage and shall reasonably aid and cooperate with respect to such insurance and any loss
thereunder. The Tenants in Common acknowledge that the Property Manager is not a licensed insurance
agent or insurance expert. Accordingly, the Property Manager shall be entitled to rely on the advice of a
reputable insurance broker or consultant regarding the proper insurance for the Project.
3.2 Additional Insurance. Any insurance obtained by the Property Manager for its
own account and not for the benefit of the Tenants in Common or the Project shall be at the Property ..
Manager's own expense, and for its sole benefit.
3.3 Contractor's and Subcontractor's Insurance. The Property Manager shall require
all contractors and subcontractors entering upon the Project to perform services to have insurance
coverage at the contractor's or subcontractor's expense, in the following minimum amounts: (a) worker's
compensation - statutory amount; (b) employer's liability (if required under applicable law) - $500,000
(minimum); and (c) comprehensive general liability insurance, including comprehensive auto liability
insurance covering the use of all owned, non -owned and hired automobiles, with bodily injury and
property damage limits of $1,000,000 per occurrence. The Property Manager may waive such
requirements in its reasonable discretion. The Property Manager shall obtain and keep on file a certificate
of insurance that shows that each contractor and subcontractor is so insured.
3.4 Waiver of Subroeation. To the extent available at commercially reasonable rates,
all property damage insurance policies required hereunder shall contain language whereby the insurance
3802200.3
7
carrier thereunder waives any right of subrogation it may have with respect to the Tenants in Common or
the Property Manager.
4. Financial Reporting And Record Keeping.
4.1 Books of Accounts. The Property Manager shall maintain adequate and separate
books and records for the Project with the entries supported by sufficient documentation to ascertain their
accuracy with respect to the Project. Such books and records shall contain a separate accounting of all
items of income and expenses for each Tenant in Common. The Tenants in Common agree to provide to
the Property Manager any financial or other information reasonably requested by the Property Manager to
carry out its services hereunder. The Property Manager shall maintain such books and records at the
Property Manager's office at the Property Manager's address as set forth in Section 12 or at the
subcontractor to the Property Manager or at the Project. The Property Manager shall bear losses arising
from the fraud or gross negligence of the Property Manager or any of its employees or agents. The
Property Manager shall keep sufficient records so that each Tenant in Common can determine its separate
income and expenses relating to the Project.
4.2 Financial Reports. On or about the forty-fifth (45th) day following each calendar
quarter, the Property Manager shall furnish to the Tenants in Common a report of all significant
transactions occurring during the prior quarter. These reports shall include a cash flow statement, a
current rent roll and a Property Manager update on the status of the Project. The Property Manager also
shall deliver to the Tenants in Common within a reasonable time after (i) the close of a calendar year and
(ii) the termination of this Agreement, a balance sheet and a statement of income and expenses for the
Project. The statement of income and expenses, the balance sheet, and all other financial statements and
reports shall be prepared on an accrual basis according, to the extent possible, to generally accepted
accounting principles (except that footnote disclosures are not required). The Property Manager may, but
shall not be required, to obtain audited financial statements for the Project. The Property Manager shall
also comply with all reporting requirements relating to the operation of the Project required under any
deed of trust or mortgage affecting the Project.
4.3 Supporting Documentation. At the expense of the Tenants in Common, the
Property Manager shall maintain and make available at the Property Manager's office at the Property
Manager's address as set forth in Section 12, at the office of the subcontractor to the Property Manager or
at the Project, copies of the following: (a) all bank statements and bank reconciliations; (b) detailed cash
receipts and disbursement records; (c) rent roll of tenants; (d) paid invoices (or copies thereof); and (e)
market study of competition (annually). Property Manager shall deliver a copy of the documents
described above to any Tenant in Common upon written request.
4.4 Tax Information. The Property Manager shall provide the Tenants in Common
with sufficient information so that the Tenants in Common can prepare their income tax returns with
appropriate adjustments to convert the information prepared on an accrual basis to the cash method of
accounting.
5. Right to Audit. Each of the Tenants in Common and their representatives may examine
all books, records and files maintained for the Tenants in Common by the Property Manager. The
Tenants in Common may perform any audit or investigations relating to the Property Manager's activities
at the appropriate office of the Property Manager if such audit or investigation relates to the Property
Manager's activities for the Tenants in Common. Should any of the Tenants in Common discover defects
in internal control or errors in record keeping, the Property Manager shall undertake, with all appropriate
diligence, to correct such discrepancies either upon discovery or within a reasonable period of time. The
3802200.3
Property Manager shall inform the Tenants in Common in writing of the action taken to correct any audit
discrepancies.
6. Bank Accounts.
6.1 Operating Account. To the extent funds are not required to be placed in a
lockbox pursuant to any Loan Documents affecting the Project, the Property Manager shall deposit all
rents and other funds collected from the operation of the Project in a reputable bank or financial
institution in a special trust or depository account or accounts for the Project maintained by the Property
Manager for the benefit of the Tenants in Common. The Property Manager shall maintain books and
records of the funds deposited in the accounts and withdrawals therefrom (including records of deposits
and withdrawals credited and charged to each Tenant in Common) (such accounts together with any
interest earned thereon, shall collectively be referred to herein as the "Operating Account"). The Property
Manager shall maintain, with funds from the Tenants in Common, the Operating Account so that an
amount at least as great as the budgeted expenses for such month is in such Operating Account as of the
first of each month. The Property Manager shall pay from the Operating Account the operating expenses
of the Project and any other payments relative to the Project as required by this Agreement. If more than
one account is necessary to operate the Project, each account shall have a unique name, except to the
extent any Lender requires sub -accounts within any account. Within three (3) months after receipt by the
Property Manager, all rents and other funds collected in the Operating Account after payment of all
operating expenses, debt service and such amounts as may be determined by the Property Manager to be
retained for reserves or improvements, shall be paid to the Tenants in Common in proportion to their
respective interests in the Project.
6.2 Security Deposit Account. . If applicable law or a Lender requires a segregated
account of security deposits, the Property Manager will open a separate account at a reputable bank or
other financial institution. The Property Manager shall maintain such account in accordance with
applicable law and/or the applicable Loan Documents. The Property Manager may return such deposits
to any tenant in the ordinary course of business in accordance with the terms of the applicable lease.
6.3 Access to Account. As authorized by signature cards, representatives of the
Property Manager shall have access to and may draw upon all funds in the accounts described in Sections
6.1 and 6.2 without the approval of the Tenants in Common. Additionally, representatives of the Property
Manager shall have access to and may draw upon any funds escrowed or held in reserve for capital
expenditures without the approval of the Tenants in Common, provided that the requirements of Section
2.9 and any additional Lender requirements with respect to such amounts are satisfied. The Tenants in
Common may not withdraw funds from such accounts without the Property Manager's prior written
consent, except following the Property Manager's default after expiration of all applicable notice and
cure periods or the termination of this Agreement.
Payments of Expenses.
7.1 Eligible Costs. The Property Manager shall pay all expenses of the operation,
maintenance and repair of the Project contemplated by the Budget directly from the Operating Account or
shall be reimbursed by the Tenants in Common, subject to the conditions set forth in Section 2, including
the following: (a) costs of the gross salary and wages or proportional shares thereof, payroll taxes,
worker's compensation insurance, and all other benefits of employees required to manage, operate and
maintain the Project properly, adequately, safely and economically, subject to this Agreement, provided
that the Property Manager shall not pay such employees in advance; (b) cost to correct the violation of
any governmental requirement relating to the leasing, use, repair and maintenance of the Project, or
relating to the rules, regulations or orders of the local Board of Fire Underwriters or other similar body, if
3802200.3
such cost is not the result of the, Property Manager's gross negligence or willful misconduct; (c) actual
and reasonable cost of making all repairs, decorations and alterations if such cost is not the result of the
Property Manager's gross negligence or willful misconduct; (d) cost incurred by the Property Manager in
connection with all service agreements; (e) cost of collection or attempted collection of delinquent rents
collected by a collection agency or attorney; (f) legal fees of attorneys; (g) cost of capital expenditures
subject to the restrictions in Section 2.9 and in this Section; (h) cost of printed checks for each account
required by the Tenants in Common; (i) cost of utilities; 0) cost of advertising; (k) cost of printed forms
and supplies required for use at the Project; (1) management compensation set forth in Section 9; (m) the
cost of tenant improvements to the Project; (n) all hiring, relocation and termination costs' for any
employee, including those individuals whose salaries and benefits are paid by the Tenants in Common;
(o) broker commissions; (p) debt service; (q) the cost of utilities, services, contractors and insurance;
(r) reimbursement of the Property Manager's out-of-pocket costs and expenses to the extent not
prohibited by Section 8; (s) general accounting and reporting services within the reasonable scope of the
Property Manager's responsibility to the Tenants in Common; (t) cost of forms, papers, ledgers, and other
supplies and equipment used in the Property Manager's office at any location; (u) cost of electronic data
processing equipment, including personal computers located at the Property Manager's office off the
Project for preparation of reports, information and returns to be prepared by the Property Manager under
the terms of this Agreement; (v) cost of electronic data processing provided by computer service
companies for preparation of reports, information and returns to be prepared by the Property Manager
under the terms of this Agreement; (w) travel and entertainment expenses intended to advance the
interests of the Project such as travel and entertainment for prospective new tenants or for brokers; and
(x) all overhead and indirect expenses of the Property Manager's office, and (y) all other costs directly
related to the Project, including, but not limited to, communication costs (telephone, postage, etc.),
computer rentals or time, supplies (paper, envelopes, business forms, checks, payroll forms and record
cards, forms for governmental reports, etc.), printing, equipment, insurance, fidelity bonds, taxes and
license fees, and general office expenses allocable to the Project. Except with respect any expenses that
are determined to be properly allocable on other than a pro rata basis, all expenses of the Project shall be
allocated to the Tenants in Common on a pro rata basis.
7.2 Operating Account Deficiency. If there are not sufficient funds in the Operating
Account to make any such payment, Property Manager shall notify the Tenants in Common, if possible,
at least ten (10) days prior to any delinquency so that the Tenants in Common have an opportunity, based
on their interests in the Project, to deposit sufficient funds in the Operating Account to allow for such
payment prior to the imposition of any penalty or late charge. In no event shall the Property Manager be
required to expend any of its own funds for the operation or maintenance of the Project; however, should
it do so, the Property Manager shall be entitled to reimbursement from the Tenants in Common within
thirty (30) days after such advance.
8. Property Manager's Costs Not to Be Reimbursed.
8.1 Non -reimbursable Costs. The following expenses or costs incurred by or on
behalf of the Property Manager in connection with the management and leasing of the Project shall be at
the sole cost and expense of the Property Manager and shall not be reimbursed by the Tenants in
Common: (a) costs attributable to losses arising from gross negligence, willful misconduct or fraud on
the part of the Property Manager, the Property Manager's associates or employees; and (b)cost of
insurance purchased by the Property Manager for its own account.
8.2 Litigation. The Property Manager will be responsible for and hold the Tenants in
Common harmless from, all costs relating to disputes with employees for worker's compensation (to the
extent not covered by insurance), discrimination or wrongful termination, including legal fees and other
expenses.
3802200.3
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9. Compensation
9.1 Property Management Fee. The Property Manager shall receive, for its services
in managing the day-to-day operations of the Project in accordance with the terms of this Agreement, a
monthly property management fee (the "Property Management Fee") equal to 6% of the Gross Revenues
(defined below), which Property Management Fee shall be in addition to the Asset Management Fee
(defined in Section 9.2) and any out-of-pocket and on -site personnel costs that are reimbursable pursuant
to Section 7. "Gross Revenues" shall be all gross billings from the operations of the Project including
rental receipts, late fees, application fees, pet fees, damages, lease buy-out payments, and reimbursements
by tenants for common area expenses, operating expenses and taxes and similar pass -through obligations
paid by tenants, but excluding (i) security deposits received from tenants and interest accrued thereon for
the benefit of the tenant until such deposits or interest are included in the taxable income of the Tenants in
Common; (ii) advance rents (but not lease buy-out payments) until the month in which payments are to
apply as rental income; (iii) reimbursements by tenants for work done for that particular tenant;
(iv) proceeds from the sale or other disposition of all or any part of the Project; (v) insurance proceeds
received by the Tenants in Common as a result of any insured loss (except proceeds from rent insurance
or the excess of insurance proceeds for repairs over the actual costs of such repairs); (vi) condemnation
proceeds not attributable to rent; (vii) capital contributions made by the Tenants in Common;
(viii) proceeds from capital, financing and any other transactions not in the ordinary course of the
operation of the Project; (ix) income derived from interest on investments or otherwise; (x) abatement of
taxes, awards arising out of takings by eminent domain, discounts and dividends on insurance policies;
and (xi) rental concessions not paid by third parties. The Property Management Fee shall be payable
monthly from the Operating Account or from other funds timely provided by the Tenants in Common.
Upon termination of this Agreement, the parties will prorate the Property Management Fee on a daily
basis to the effective date of such cancellation or termination. Upon a sale of the Project, the Property
Manager shall receive additional compensation equal to the previous month's Property Management Fee
as compensation for work to be performed in connection with the sale or completion of managing matters
relating to each tenant.
9.2 Asset Management Fee. The Property Manager shall receive, for its services in
supervising the overall management and operation of the Project in accordance with the terms of this
Agreement, an annual asset management fee (the "Asset Management Fee") equal to 2% of Gross
Revenues for each calendar year and pro rated for any partial year, which Asset Management Fee shall be
in addition to the Property Management Fee (defined in Section 9.1) and shall be payable pro rata on a
monthly basis on the first day of each month (or in the case of the first partial month beginning on the
date hereof a pro rats amount payable on the date hereof) plus any out-of-pocket and on -site personnel
costs that are reimbursable pursuant to Section 7. The Property Manager may defer, in its sole discretion,
all or any portion of such annual Asset Management Fee. Any such unpaid Asset Management Fees
shall, in all events, be paid upon the earliest to occur of the following events: (i) the termination of this
Agreement, (ii) the sale of the Project or (iii) 10 years from the accrual of any such unpaid Asset
Management Fee. Upon termination of this Agreement or upon a sale of the Project, the parties will
prorate the Asset Management Fee on a daily basis to the effective date of such cancellation or
termination. In the event the Property Manager hires a local property manager to assist in the
management of the Project, the Property Manager will be responsible for the compensation of such local
property manager.
9.3 Leasing Commissions. The Properly Manager, or an affiliate, shall receive, for
its services in leasing the Project in accordance with the terms of this Agreement, a leasing commission
(the "Leasing Commission") as set forth on the Schedule of Leasing Commissions attached hereto as
Exhibit "D."
3802200.3
11
9.4 Construction Management Fee. The Property Manager, or an affiliate, shall
receive, for its services in supervising any construction or repair project in or about the Project, a
construction management fee (the "Construction Management Fee") equal to five percent (5%) of any
amount (including related professional services) that is expended for construction, tenant improvement or
repair projects.
9.5 Financing Fee. The Property Manager, or an affiliate, will receive from the
Tenants in Common, a fee equal to 1.0% of the principal amount of any Loan ("Financing Fee");
provided, however, no separate Financing Fee shall be paid with respect to the Initial Loan. The
Financing Fee will be payable to the Property Manager or its affiliate whether or not an outside loan
broker is used. If an outside loan broker is used, the Tenants in Common shall separately pay any fees of
such outside loan broker. The Financing Fee, and any fees payable to an outside broker, if applicable,
will be pro rated among the Tenants in Common.
9.6 Selling Commission. If, during the tern of this Agreement, the Tenants in
Common determine to sell or exchange the Project, or any portion thereof (including an undivided interest
of a single Tenant in Common in the event the Property Manager participates in such sale), the Tenants in
Common hereby grant the Property Manager, or an affiliate, for a 180-day term, the right to participate in
the marketing of the Project on terms acceptable to the Tenants in Common. The Tenants in Common
shall notify the Property Manager in writing of the determination to sell or exchange, which notification
shall specify the commencement and termination date of such 180-day term. If the Project is sold,
exchanged or otherwise disposed of as a result of offers received during such 180-day term, and the
Property Manager or its designee, subcontractor or assignee participated in the sale, a commission shall
be paid by the Tenants in Common to the Property Manager equal to 4.0% of the sales price. In addition
to the foregoing, the Property Manager may at any time negotiate with potential purchasers and submit
offers to purchase to the Tenants in Common for approval. If the Project is sold, exchanged or otherwise
disposed of as a result of any such offers, the Property Manager shall be entitled to a commission paid by
the Tenants in Common in an amount equal to 4.0% of the sales price. If another broker participates in
the transaction, then the Property Manager may cooperate with that broker, on terms and conditions
acceptable to the Property Manager, with commissions to the other broker to be paid by the Property
Manager. Notwithstanding the foregoing, if an undivided interest in the Project of a single Tenant in
Common is sold or exchanged, as opposed to a sale of the Project as a whole, then a commission shall be
,paid by such Tenant in Common to the Property Manager in an amount equal to 3.09/0 of the sales price if
the Property Manager or its designee, subcontractor or assignee participated in the sale, and such Tenant
in Common shall pay any commissions owed to any other broker in connection with such sale.
9.7 Application of Fees. Each Tenant in Common shall be responsible for his or her
percentage share, based on percentage ownership interests in the Project, of all of the fees set forth in this
Agreement.
9.8 Payment of Fees. The Property Management Fee and Asset Management Fee
shall be paid monthly in arrears. The Leasing Commissions shall be paid when the lease is signed. The
Construction Management fee shall be paid when the related construction is complete. The Financing Fee
shall be paid when the related refinancing has closed escrow. The Selling Commission shall be paid upon
the related close of escrow.
10. Termination.
10.1 Termination by the Tenants in Common. This Agreement shall terminate on
December 31, 2050; provided, however, that this Agreement shall terminate on December 31, 2007 and
3802200.3
12
each anniversary of such date unless all of the Tenants in Common consent to the extension of this
Agreement pursuant to Section 1.2.1.
10.2 Termination by the Propea Manager.
10.2.1 The Property Manager shall have the right to terminate this Agreement,
provided that the Tenants in Common are in default in the performance of any of their obligations
hereunder, and such default remains uncured for thirty (30) days following the Property Manager's giving
of written notice of such default to the Tenants in Common.
10.2.2 The Property Manager shall have the right to terminate this Agreement
for any reason upon 60 days written notice.
10.3 Final Accounting. Within forty-five (45) days after termination of this
Agreement for any reason, the Property Manager shall: (a) deliver to the Tenants in Common a final
accounting, setting forth the balance of income and expenses on the Project as of the date of termination;
(b) transfer to any account indicated by the Tenants in Common any balance or monies of the Tenants in
Common or tenant security deposits held by the Property Manager with respect to the Project (or transfer
the accounts in which such sums are held as instructed by the Tenants in Common); and (c) deliver to a
subsequent property manager or other agent indicated by the Tenants in Common all materials and
supplies, keys, books and records, contracts, leases, receipts for deposits, unpaid bills and other papers or
documents that pertain to the Project. For a period of forty-five (45) days after such expiration or
cancellation for any reason other than the Tenants in Common's default, the Property Manager shall be
available, through its senior executives familiar with the Project, to consult with and advise the Tenants in
Common or any person or entity succeeding to the Tenants in Common as owner of the Project or such
other person or persons selected by the Tenants in Common regarding the operation and maintenance of
the Project. In addition, the Property Manager shall cooperate with the Tenants in Common in notifying
all tenants of the Project of the expiration and termination of this Agreement, and shall use reasonable
efforts to cooperate with the Tenants in Common to accomplish an orderly transfer of the operation and
management of the Project to a party designated by the Tenants in Common. The Property Manager shall
receive its monthly Property Management Fee for such services. The Property Manager shall, at its cost
and expense, promptly remove all signs wherever located indicating that it is the Property Manager and
replace and repair any damage resulting therefrom. Termination of this Agreement shall not release either
party from liability for failure to perform any of the duties or obligations as expressed herein and required
to be performed by such party for the period before the termination.
11. Conflicts. The Property Manager shall not deal with or engage, or purchase goods or
services from, any subsidiary or affiliated company of the Property Manager in connection with the
management of the Project for amounts above market rates.
12. Notices. Any notice to be given or other document or payment to be delivered by any
party to any other parry hereunder shall be addressed to the party for whom intended, as follows:
To the Property Manager at:
Principle Equity Properties, LP
10303 NW Freeway, Suite 300
Houston, TX 77092
3802200.3,
13
To the Tenants in Common at;
c/o PEM University H, LLC
10303 NW Freeway, Suite 300
Houston, TX 77092
With a copy to the Tenants in Common at the addresses specified on Exhibit "A" of the
Tenants in Common Agreement.
Any party hereto may from time to time, by written notice to the others, designate a different address
which shall be substituted for the one above specified. Unless otherwise specifically provided for herein,
all notices, payments, demands or other communications given hereunder shall be in writing and shall be
deemed to have been duly given and received (i) upon personal delivery, or (ii) as of the third business
day after mailing by United States mail, with postage prepaid, addressed as set forth above, or (iii) the
immediately succeeding business day after deposit with Federal Express or other similar overnight
delivery system.
13. Miscellaneous.
13.1 Assignment. The Property Manager may not assign this Agreement without the
prior written consent of the Tenants in Common, except with respect to an assignment to an affiliate,
including, but not limited to a wholly -owned subsidiary, which shall be permissible under this
Agreement, which consent may be withheld in the Tenants in Common's sole and absolute discretion;
provided, however, that the Property Manager may assign, subcontract or delegate the day-to-day
management responsibilities, leasing services and/or disposition services to one or more local property
managers or leasing companies in its sole discretion so long as the Property Manager continues to
supervise the overall management of the Project. Subject to the Tenants in Common Agreement, a
Tenant in Common may assign its rights under this Agreement to a party acquiring its undivided interest
in the Project ("Successor Tenant in �ommon"). A Successor Tenant in Common shall take such interest
subject to this Agreement, and the Tenant in Common and Successor Tenant in Common shall execute an
agreement whereby (i) the assigning Tenant in Common assigns to the Successor Tenant in Common all
of its right, title and interest in and to this Agreement; and (ii) the Successor Tenant in Common assumes
and agrees to perform faithfully and to be bound by all of the terms, covenants, conditions, provisions and
agreements of this Agreement with respect to the undivided interest to be transferred. Upon execution of
such assignment and assumption agreement, the assigning Tenant in Common shall be relieved of all
liability accruing after the effective date of the assignment and, without further action by the Property
Manager or the other Tenants in Common, the Successor Tenant in Common shall become a party to this
Agreement.
13.2 Gender. Each gender shall include each other gender. The singular shall include
the plural and vice -versa.
13.3 Amendments. Except as otherwise provided, each amendment, addition or
deletion to this Agreement shall not be effective unless approved by the parties in writing.
13.4 Attorneys' Fees. In any action or proceeding between the Property Manager and
the Tenants in Common arising from or relating to this Agreement or the enforcement or interpretation
hereof, the party prevailing in such action or proceeding shall be entitled to recover from the other party
all of its reasonable attorneys' fees and other costs and expenses of the action or proceeding.
3802200.3
14
13.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas without regard to any choice of law rules.
13.6 Venue.Any action relating to or arising out of this Agreement shall be brought
only in a court of competent jurisdiction located in Houston, Texas.
13.7 Headings. All headings are only for convenience and ease of reference and are
irrelevant to the construction or interpretation of any provision of this Agreement.
13.8 Representations. The Property Manager represents and warrants that it is fully
qualified and licensed, to the extent required by law, to manage and lease real estate and perform all
obligations assumed by the Property Manager hereunder. The Property Manager shall use reasonable
efforts to comply with all such laws now or hereafter in effect.
13.9 Indemnification by the Property Manager.
13.9.1 The Property Manager shall indemnify, defend and hold the Tenants in
Common and their shareholders, officers, directors, members, partners and employees harmless from any
and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses,
including reasonable attorneys' fees .and court costs, sustained or incurred by or asserted against the
Tenants in Common where it is determined by final judicial determination that such loss, cost or expense
was the result of the acts of the Property Manager which arise out of the gross negligence, willful
misconduct or fraud of the Property Manager, its agents or employees or the Property Manager's breach
of this Agreement. If any person or entity makes a claim or institutes a suit against the Tenants in
Common on a matter for which the Tenants in Common claim the benefit of the foregoing
indemnification, then (a) the Tenants in Common shall give the Property Manager prompt notice thereof
in writing; (b) the Property Manager may defend such claim or action by counsel of its own choosing
provided such counsel is reasonably satisfactory to the Tenants in Common; and (c) neither the Tenants in
Common nor the Property Manager shall settle any claim without the other's written consent.
13.9.2 The Property Manager acknowledges that the Tenants in Common have
or will be entering into Loan Documents, which may include provisions for personal liability for the
Tenants in Common on certain "nonrecourse carve -outs." The Property Manager hereby agrees that to
the extent that the Tenants in Common are required to make payments on such indemnification as a direct
result of (i) the Property Manager's fraud, willful misconduct or misappropriation, (ii) the Property
Manager's commission of a criminal act, (iii) the misapplication by Property Manager of any funds
derived from the Project received by the Property Manager, including any failure to apply such proceeds
in accordance with the requirements of any existing Loan Documents applicable to the Project, or
(iv) damage or destruction to the Project caused by acts of the Property Manager that are grossly
negligent, the Property Manager will indemnify the Tenants in Common for any such liability that was
caused by such actions.
13.10 Indemnification by the Tenants in Common. The Tenants in Common shall
indemnify, defend and hold the Property Manager and its shareholders, members, partners, officers,
directors, managers and employees harmless from any and all claims, demands, causes of action, losses,
damages, fines, penalties, liabilities, costs and expenses, including reasonable attorneys' fees and court
costs, sustained or incurred by or asserted against the Property Manager by reason of the operation,
management, and maintenance of the Project and the performance by the Property Manager of the
Property Manager's obligations under this Agreement but only to the extent of each Tenants in
Common's interest in the Project, except those which arise from the Property Manager's gross
negligence, willful misconduct or fraud. If any person or entity makes a claim or institutes a suit against
3802200.3
15
the Property Manager on a matter for which the Property Manager claims the benefit of the foregoing
indemnification, then (a) the Property Manager shall give the Tenants in Common prompt notice thereof
in writing; (b) the Tenants in Common may defend such claim or action by counsel of their own choosing
provided such counsel is reasonably satisfactory to the Property Manager; (c) neither the Property
Manager nor the Tenants in Common shall settle any claim without the other's written consent; and
(d) this subsection shall not be so construed as to release the Tenants in Common or the Property
Manager from any liability to the other for a breach of any of the covenants agreed to be performed under
the terms of this Agreement. Each Tenant in Common agrees that this Section 13.10 is subject and
subordinate to any Lender's Loan Documents and the liens created thereby and to all rights of the Lender
thereunder.
13.11 Complete Agreement. This Agreement shall supersede and take the place of any
and all previous agreements entered into between the parties with respect to the Project.
13.12 Severability. If any provisions of this Agreement or application 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, where the application of such provisions or circumstances
other than those as to which it is determined to be invalid or unenforceable shall not be affected thereby,
and each provision hereof shall be valid and shall be enforced to the fullest extent permitted by law.
13.13 No Waiver. The failure by either party to insist upon the strict performance of or
to seek remedy of any one of the terms or conditions of this Agreement or to exercise any right, remedy,
or election set forth herein or permitted by law shall not constitute or be construed as a waiver or
relinquishment for the future of such term, condition, right, remedy or election, but such item shall
continue and remain in full force and effect. All rights or remedies of the parties specified in this
Agreement and all other rights or remedies that they may have at law, in equity or otherwise shall be
distinct, separate and cumulative rights or remedies, and no one of them, whether exercised or not, shall
be deemed to be in exclusion of any other right or remedy of the parties.
13.14 Binding Effect. This Agreement shall be binding and inure to the benefit of the
parties and their respective successors and assigns.
13.15 Enforcement of the Property Manager's Rights. In the enforcement of its rights
under this Agreement, the Property Manager shall not seek or obtain a money judgment or any other right
or remedy against any shareholders or disclosed or undisclosed principals of the Tenants in Common.
The Property Manager shall enforce its rights and remedies solely against the estate of the Tenants in
Common in the Project or the proceeds of any sale of all or any portion of the Tenants in Common's
interest therein.
13.16 Counter arts. This Agreement may be executed in several counterparts, and all
so executed shall constitute one Agreement, binding on all of the parties hereto, notwithstanding that all
of the parties are not signatory to the original or the same counterpart.
3802200.3
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year
first above written.
PROPERTY MANAGER:
PRINCIPLE EQUITY PROPERTIES, LP, a Delaware limited
partnership
By: Principle Equity Properties, LLC, a Delaware limited liability
company, its general partner
By: /J2 a,
ndolph A. McQ, ember
TENANTS IN COMMON:
PEM UNIVERSITY S, LP, a Delaware limited partnership
By: PEM UNIVERSITY S GP, LLC, a Delaware limited liability
company, its general partner
By: PEM UNIVERSITY M, LP, a Delaware limited partnership,
its sole member
By: PEM UNIVERSITY M GP, LLC, a Delaware limited
liability company, its general partner
By: UNIVERSITY ACQUISITIONS E, LP, a
Delaware limited partnership, its sole member
By: PRINCIPLE EQUITY MANAGEMENT, LP,
a Delaware limited partnership, its general
partner
By: PRINCIPLE EQUITY MANAGEMENT,
LLC, a Delaware limited liability company,
its general partner
By:
Michael A, ua member
By:
ndol r A. Me aay, its member
3802200.3
17
PEM UNIVERSITY H, LLC, a Delaware limited
liability company
By: PRINCIPLE EQUITY MANAGEMENT, LP, a
Delaware limited partnership, its sole member
By: PRINCIPLE EQUITY MANAGEMENT,
LLC, a Delaware limited liability com
general partner
member
B�fdolph
A. uay, its member
3802200.3
18
This SUB -PROPERTY MANAGEMENT AGREEMENT (the "Agreement") is dated as of this 26th day of
June, 2007, by and between Principle Equity Properties, LP, a Delaware Limited Partnership (the "Property
Manager"), and TIG Central Texas Ltd (the "Subcontractor").
PEM University H, LLC a Delaware limited liability company and PEM University Tenants in
Common, LLC's all Delaware limited liability companies (together with their successors and assigns,
individually the "Owner" and collectively the "Owners"), own the commercial real estate located at 1901
Texas Avenue, College Station, TX 77840 as more particularly described in Exhibit"A" attached hereto and
incorporated herein (the "Project"). The Owners have engaged the Property Manager to supervise, manage,
operate, and maintain the Project pursuant to a Property and Asset Management Agreement dated March
271h, 2007 (the "Master Agreement"). The Property Manager desires to engage the Subcontractor to perform
certain of its duties under the Master Agreement and the Subcontractor wishes to perform such duties and
receive the fees and other consideration provided for herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
Commencement and Termination Dates; Authority of Owners.
1.1 Commencement and Termination. The Subcontractor's duties and responsibilities
under this Agreement shall begin on the date of this Agreement and shall terminate on the earlier of (i) the sale
of the Project or any portion thereof, as to such portion of the Project sold only (other than any sale of an
undivided interest held by an Owner to a parry that will acquire such interest subject to the Tenants in
Common Agreement and this Agreement), (ii) the termination, expiration or the failure of renewal of the
Master Agreement, or (iii) the termination as provided in Section 10 hereof.
1.2 Authority of Owners. The parties hereto acknowledge and agree that this Agreement
is subject in all respects to the Master Agreement, as amended from time to time. Certain consents from the
Owners for the authority of the Property Manager to act are required under the Master Agreement. The parties
hereto agree to observe the requirement of such consents and to work together to receive such consents. The
Owners of the Project shall have the final authority to approve any Property Management or Subcontractor
action not covered by the Master Agreement. All communications to the Owners regarding such approvals
shall be made by the Property Manager. The Subcontractor shall have the power and authority to act on behalf
of the Property Manager with respect to such approvals.
2. Property Manager's Responsibilities.
2.1 Status of the Property Manager and Subcontractor. None of the Owners, the
Property Manager or the Subcontractor intends to form a joint venture, partnership or similar relationship.
Instead, the parties intend that the Property Manager shall act solely in the capacity of an independent
contractor for the Owners and the Subcontractor shall act solely in the capacity of an independent contractor
for the Property Manager of certain duties under the Master Agreement. Nothing in this Agreement shall
cause the Owners, Property Manager or Subcontractor to be joint venturers or partners of each other, and none
of such parties shall have the power to bind or obligate the other party, by virtue of this Agreement, except as
expressly provided in this Agreement. Nothing in this Agreement shall deprive or otherwise affect the right of
any party to own, invest in, manage, operate, or to conduct business activities which compete with the business
of the Project.
2.2 Management. The Subcontractor shall manage, operate and maintain the Project in
an efficient, economic and satisfactory manner and shall arrange the performance of everything reasonably
necessary for the proper operation of the Project for the tenants thereof, subject to (a) applicable governmental
2075663.2
and/or Owners, the Subcontractor shall keep the Project clean and in good repair, shall order and supervise the
completion of such repairs as may be required and shall generally do and perform, or cause to be done or
performed, all things necessary, required or desirable for the proper and efficient management, operation, and
maintenance of the Project provided the Property Manager and/or Owners, in a manner reasonably satisfactory
to the Subcontractor, make available to the Subcontractor such sums as are reasonably necessary to pay the
costs thereof. The Subcontractor shall perform all services in a diligent and professional manner.
2.3 Employees: Independent Contractor. The Subcontractor shall, subject to the
limitations of the Budget (as defined in Section 2.5.1) employ, directly or through third party contractors (e,g,
employee leasing company), at all times a sufficient number of capable employees to enable the Subcontractor
to properly, adequately, safely and economically manage, operate and maintain the Project. All matters
pertaining to the supervision of such employees shall be the responsibility of the Subcontractor. All salaries
and benefits and positions of employees who perform work in connection with the Project shall be consistent
with the Budget (as defined in Section 2.5,1) and specified therein,
2.4 Compliance with Laws, Mortgages and Other Matters,
2.4.1 To the extent Property Manager provides Subcontractor with copies of all
applicable documents, the Subcontractor shall use commercially reasonable efforts to comply with any deed of
trust, mortgage or other loan documents affecting the Project and all governmental requirements, including
Board of Fire Underwriters or other similar body, relative to the performance of its duties hereunder and cause
the Project to comply with any deed of trust, mortgage or other loan documents affecting the Project and all
governmental requirements, including Board of Fire Underwriters or other similar body. Subcontractor may
implement such procedures with respect to the Project as the Subcontractor may deem advisable for the more
efficient and economic management and operation thereof. The Subcontractor shall pay from the Operating
Account (defined in Section 6.1) expenses incurred to remedy violations,
2.4.2 The Subcontractor shall furnish to the Property Manager, promptly after
receipt, any notice of violation of any governmental requirement or order issued by any governmental entity,
any Board of Fire Underwriters or other similar body against the Project, any notice of default from the holder
of any mortgage or deed of trust encumbering the Project or any notice of termination or cancellation of any
insurance policy.
2.5 Budgets and Operating Plan:
2.5.1 The Subcontractor shall annually prepare and submit to the Property
Manager (in order that the Property Manager may submit it to the Owners) a detailed annual capital and
operating budget ("Budget") for the promotion, operation, #easirrg, repair, maintenance and improvement of the
Project for each, calendar year (in a form directed by Property Manager) with all necessary supporting
documentation as set forth by Property Manager, The initial calendar year numbers are attached hereto as
Exhibit "C" and are hereby approved by the Property Manager. The Subcontractor shall deliver each
subsequent Budget for each subsequent calendar year on or before October I" of the calendar year before the
budget year. The Subcontractor shall use best efforts to promptly incorporate into the Budget any changes the
Property Manager may request. The Property Manager shall approve or disapprove of the Budget. The
Subcontractor may proceed under the terms of the proposed Budget for items that are not objected to and may
take any action with respect to items not approved for Emergency Expenditures (as defined in Section 2,5,2).
In the event that the items that are objected to are operational expenditures, as opposed to capital expenditures,
the Subcontractor shall be entitled to operate the Project using the prior year's Budget until the approval is
obtained. The Subcontractor shall provide the Property Manager with such information regarding the Budget
as may be, from time to time, reasonably requested by the Property Manager. The Subcontractor may at any
time submit a revised Budget to the Property Manager for its approval consistent with the terms of this
Section.
2075663.2
e Subcommacror snail Unargo diii CAP01INUS to the proper account as
specified in the Budget, provided that the Property Manager may reallocate savings from one line item to other
line items via a projection ("Projection"), The Subcontractor shall submit (subject to the same procedures as
set forth in Section 2.5.1) the Projection to the Property Manager before making any expenditure not within the
Budget or approved Projection unless the expenditure is (a) less than One Thousand Dollars ($1,000.00) or
(b) is, in the Subcontractor's reasonable judgment, required to avoid personal injury, significant property
damage, a default under any loan encumbering the Project, a violation of applicable law or the suspension of a
service (collectively, "Emergency Expenditures").
2.5.3 During each calendar year, in the regular monthly reports sent to the
Property Manager, the Subcontractor shall inform the Property Manager of any material increases or decreases
in costs and expenses not foreseen and not included in the Budget within a reasonable time after the
Subcontractor learns of such changes. These variances will be included in the annual Projection provided to
the Property Manager in the regular monthly report. Subcontractor will also include variance explanations for
items that differ from the original Budget by $1,000 or 10%, whichever is greater,
2.5.4 Together with the submission of the Budget, the Subcontractor shall submit
each year to the Property Manager for information purposes only an operating plan for the general operation of
the Project, including a proposed list of improvements to the Project, general insurance plan, marketing plan
and plan for the general operation and maintenance of the Project (the "Operating Plan"). The Subcontractor
may submit a revised Operating Plan to the Property Manager at any time. The Subcontractor shall use
commercially reasonable efforts to operate the Project within such then current Operating Plan.
2.5.5 Any controversy between the parties hereto arising out of or related to any
dispute as set forth in Section 2.5.1 shall be settled by arbitration in College Station, Texas in accordance with
the rules of The American Arbitration Association. The arbitration panel shall consist of one member, and
shall be a person agreed to by each party to the dispute within 15 days following the end of the 15-day period
set forth in Section 2.5.1. If the parties are unable within such 15-day period to agree upon an arbitrator, then
the panel shall be one arbitrator selected by the Brazos County office of The American Arbitration
Association, which arbitrator shall be experienced in the area of real estate and who shall be knowledgeable
with respect to the subject matter area of the dispute. Each party shall pay 50% of any fees and expenses of the
arbitrator and other tribunal fees and expenses. Each party shall pay their legal and other fees, .Each party
shall submit its proposal with respect to its issue in dispute. The arbitration panel shall render a decision
within 15 days following the close of presentation by the parties of their cases and any rebuttal. The arbitrator
shall be limited to picking either alternative submitted without any change. The parties shall proceed with the
alternative selected by the arbitrator.
2.5.6 The Subcontractor shall be required to provide Lender (as defined in the
Master Agreement, together with its successors and/or assigns) all budgets or reports required in any loan
documents ("Loan Documents") entered into with the Lender and comply with the provisions applicable to the
Subcontractor set forth in the Loan Documents.
2.6 Leasing. Intentionally deleted
2.7 Collection of Rents and Other Income. The Subcontractor shall bill all tenants and
shall use commercially reasonable efforts to collect all rent and other charges due and payable from any tenant
or from others for services provided in connection with the Project. The Subcontractor shall deposit all monies
so collected in the Operating Account (as defined in Section 6.1). The Subcontractor shall allocate all income,
revenue and expenses from the Project to the Property Manager. The Subcontractor shall maintain equity
positions for all Owners including segregating contributions and distributions.
2.8 Repairs and Maintenance, The Subcontractor shall maintain the buildings,
appurtenances and grounds of the Project, other than areas that are the responsibility of tenants, including,
2075663.2
including electrical, plumbing, carpentry, masonry, elevators and such other routine repairs as are necessary or
reasonably appropriate in the course of maintenance of the Project (subject to the limitations of this
Agreement). The Subcontractor shall pay actual and reasonable expenses for materials and labor for such
purposes from the Operating Account. The Subcontractor shall take reasonable precautions against fire,
vandalism, burglary and trespass to the Project.
2.9 Capital Expenditures. The Subcontractor may make any capital expenditure within
any Budget approved by the Property Manager and/or Owner without any further consent, provided that the
Subcontractor follows the bidding requirements set forth in this Section 2.9. All capital expenditures, other
than Emergency Expenditures, shall be subject to submittal of a revised Budget to the Property Manager (and
in turn to the Owners). Unless the Property Manager specifically waives such requirement, or approves a
particular contract, the Subcontractor shall award any contract for a capital improvement exceeding $5,000 in
cost on the basis of competitive bidding, solicited from a minimum of three (3) written bids. The
Subcontractor shall accept the bid of the lowest bidder, who, in the Subcontractor's reasonable opinion, is
responsible and qualified.
2.10 Service Contracts, Supplies and Equipment.
The Subcontractor, as an agent for the Property Manager, may enter into or renew any contract for cleaning,
maintaining, repairing or servicing the Project or any of the constituent parts of the Project (including contracts
for fuel oil, security or other protection, extermination, landscaping, architectural or engineering services)
contemplated by the Budget and consistent with the Operating Plan with any unrelated third party. Each such
service contract shall (a) be in the name of the Principle Equity Properties, LP on behalf of the Tenant in
Common Owners of University Shopping Center, in care of TIG Central Texas Ltd
2.10.-1 , (b) be assignable to the nominee of the Property Manager and (c) be for a
term not to exceed one (1)year, Unless the Property Manager specifically waives such
requirement or approves a particular contract, all service contracts for amounts in excess of
$5,000 per year shall be subject to the bidding requirements specified in Section 2.9,
2.10.2 If this Agreement terminates or is not renewed pursuant to Section 10, the
Subcontractor, at the option of the Property Manager, shall assign to the Property Manager or
the nominee of the Owners all of the Subcontractor's interest in all service agreements
pertaining to the Project, if any.
2.10.3 At the expense of the Property Manager and/or Owners, the Subcontractor
shall purchase, provide, and pay for all needed janitorial and maintenance supplies, tools and
equipment, restroom and toilet supplies, light bulbs, paints, and similar supplies necessary to
the efficient and economical operation and maintenance of the Project. Such supplies and
equipment shall be the property of the Owners. All such supplies, tools, and equipment shall
be delivered to and stored at the Project and shall be used only in connection with the
management, operation, and maintenance of the Project.
2.10.4 The Subcontractor shall use reasonable efforts to purchase all goods,
supplies or services at the lowest cost reasonably available from reputable sources in the
metropolitan area where the Project is located. In making any contract or purchase hereunder,
the Subcontractor shall use reasonable efforts to obtain favorable discounts for the Property
Manager and/or Owners and all, discounts, rebates or commissions under any contract or
purchase order made hereunder shall in to the benefit of the Property Manager and/or
Owners, The Subcontractor shall make payments under any such contract or purchase order
to enable the Property Manager and/or Owners to take advantage of any such discount if the
Property Manager and/or Owners provide sufficient funds therefore.
2075663.2
verify bills for real estate and personal property taxes, general and special real property assessments and other
like charges (collectively "Taxes") which are or may become liens against the Project. The Subcontractor, if
requested by the Property Manager, will cooperate to prepare an application for correction of the assessed
valuation (in cooperation with representatives of the Property Manager) to be filed with the appropriate
governmental agency. The Subcontractor shall pay, within the time required to obtain discounts, from funds
provided by the Property Manager and/or Owners or from the Operating Account, all utilities, Taxes and
payments due under each lease, mortgage, deed of trust or other security instrument, if any, affecting the
Project. To the extent contemplated by the Budget and in conformance with the Operating Plan (as either may
be revised from time to time), the Subcontractor may make any such payments.
2.12 Tenant Relations, The Subcontractor shall use reasonable efforts to develop and
maintain good tenant relations in the Project. At all times during the term hereof, the Subcontractor shall use
reasonable efforts to retain existing tenants in the Project and, after completion of the initial leasing activity, to
retain new tenants. The Subcontractor shall use its reasonable efforts to secure compliance by the tenants with
the terms and conditions of their respective Leases.
2.13 Miscellaneous Duties. The Subcontractor shall (a) maintain orderly files containing
rent records, insurance policies, leases and subleases, correspondence, receipted bills and vouchers, bank
statements, canceled checks, deposit slips, debit and credit memos, and all other documents and papers
pertaining to the Project or the operation thereof at the Subcontractor's office at Subcontractor's address as set
forth in Section 12 and all such records shall be readily accessible to the Property Manager; (b) provide reports
for the preparation and filing by the Property Manager of each income or other tax return required by any
governmental authority, including annual statements allocating the expenses of and income from the Project to
the Property Manager; (c) consider and record tenant service requests in systematic fashion showing the action
taken with respect to each, and thoroughly investigate and report to the Property Manager in a timely fashion
with appropriate recommendations all complaints of a nature that might have a material adverse effect on the
Project or the Budget; (d) supervise the moving in and out of tenants and subtenants; arrange, to the extent
possible, the dates thereof to minimize disturbance to the operation of the Project and inconvenience to other
tenants or subtenants; and render an inspection report, an assessment for damages and a recommendation on
the disposition of any deposit held as security for the performance by the tenant under its lease with respect to
each premises vacated; (e) check all bills received for the services, work and supplies ordered in connection
with maintaining and operating the Project and, except as otherwise provided in this Agreement, pay such bills
when due and payable; and (f) not knowingly permit the use of the Project for any purpose that might void any
policy of insurance held by the Property Manager or Owners or that might render any loss thereunder
uncollectible. All such records are the property of the Property Manager and will be delivered to the Property
Manager upon request.
Basic Insurance.
3.1 Insurance.
3.1.1 The Subcontractor, at the Property Manager and/or Owner's expense, will
obtain and keep in force adequate insurance against physical damage (such as fire with extended coverage
endorsement, boiler and machinery) and against liability for loss, damage or injury to property or persons that
might arise out of the occupancy, management, operation or maintenance of the Project, as contemplated by
the Operating Plan and to the extent available at commercially reasonable rates. The Subcontractor shall not
be required to maintain earthquake or flood insurance unless expressly directed to do so by a specific written
notice from the Property Manager, but may do so in the Subcontractor's reasonable discretion, The
Subcontractor shall be a named insured on all property damage insurance and an additional insured on all
liability insurance maintained with respect to the Project. In the event the Subcontractor receives insurance
proceeds for the Project, the Subcontractor will take any required actions as set forth in the Loan Documents.
In the event that the Subcontractor receives insurance proceeds that are not governed by the terms of the Loan
2075663.2
(ii) distribute such proceeds to the Owners, as directed by the Property Manager. Any insurance proceeds
distributed to the Property Manager will be distributed subject to the fees owed to the Subcontractor pursuant
to this Agreement.
3.1.2 As part of the Operating Plan, the Subcontractor shall advise the Property
Manager in writing and make recommendations with respect to the proper insurance coverage for the Project,
taking into account the insurance requirements set forth in any deed of trust or mortgage on the Project, shall
furnish such information as the Property Manager may reasonably request to obtain insurance coverage and
shall reasonably aid and cooperate with respect to such insurance and any loss thereunder. The Property
Manager acknowledges that the Subcontractor is not a licensed insurance agent or insurance expert.
Accordingly, the Subcontractor shall be entitled to rely on the advice of a reputable insurance broker or
consultant regarding the proper insurance for the Project.
3.1.3 The Subcontractor shall investigate and submit, as soon as reasonably
possible, a written report to the insurance carrier and the Property Manager as to all accidents, claims for
damage relating to the Subcontractor, operation and maintenance of the Project, any damage to or destruction
of the Project and the estimated costs of repair thereof, and prepare and file with the insurance company in a
timely manner required reports in connection therewith, Notwithstanding the foregoing, the Subcontractor
shall not be required to give such notice to the Property Manager if the amount of such claims, damage or
destruction, as reasonably estimated by the Subcontractor, does not exceed $5,000 for any one occurrence.
The Subcontractor shall settle all claims against insurance companies arising out of any policies, including the
execution of proofs of loss, the adjustment of losses, signing and collection of receipts and collection of
money, except that the Subcontractor shall not settle claims in excess of $5,000 without the prior approval of
the Property Manager,
3.2 Additional Insurance. Any insurance obtained by the Subcontractor for its own
account and not for the benefit of the Owners, Property Manager or the Project shall be at the Subcontractor's
own expense.
3.3 Contractor's and Subcontractor's Insurance. The Subcontractor shall require all
contractors and subcontractors entering upon the Project to perform services to have insurance coverage at the
contractor's or subcontractor's expense, in the following minimum amounts: (a) worker's compensation -
statutory amount; (b) employer's liability (if required under applicable law) - $500,000 (minimum); and
(c) comprehensive general liability insurance, including comprehensive auto liability insurance covering the
use of all owned, non -owned and hired automobiles, with bodily injury and property damage limits of
$1,000,000 per occurrence. The Subcontractor may waive such requirements in its reasonable discretion. The
Subcontractor shall obtain and keep on file a certificate of insurance that shows that each contractor and
subcontractor is so insured.
3.4 Waiver of Subrogation. To the extent available at commercially reasonable rates, all
property damage insurance policies required hereunder shall contain language whereby the insurance carrier
thereunder waives any right of subrogation it may have with respect to the Property Manager or the
Subcontractor.
4. Financial Reporting And Record Keeping.
4.1 Books of Accounts. The Subcontractor shall maintain adequate and separate books
and records for the Project with the entries supported by sufficient documentation to ascertain their accuracy
with respect to the Project. Such books and records shall contain a separate allocation of income and expenses
to the Property Manager. The Property Manager agrees to provide to the Subcontractor any financial or other
information reasonably requested by the Subcontractor to carry out its services hereunder. The Subcontractor
shall maintain such books and records at the Subcontractor's office at the Subcontractor's address as set forth
2075663.2
successfully undergo an outside independent third party audit. The Subcontractor shall ensure such control
over accounting and financial transactions as is reasonably necessary to protect the Owners' property from
theft, error or fraudulent activity by the Subcontractor's employees. The Subcontractor shall bear losses
arising from such instances, including, without limitation, the following: (a)theft of property by the
Subcontractor's employees, principals, or officers or those individuals associated or affiliated with the
Subcontractor; (b) overpayment or duplicate payment of invoices arising from either fraud or gross negligence,
unless credit is subsequently received; (c) overpayment of labor costs arising from either fraud or gross
negligence, unless credit is subsequently received by the Property Manager and/or Owners; (d) overpayment
resulting from payment from suppliers to the Subcontractor's employees or associates arising from the
purchase of goods or services for the Project; and (e) unauthorized use of facilities by the Subcontractor,
Subcontractor's employees or associates.
4.2 Financial Reports. On or before the tenth (10"') day following each month, the
Subcontractor shall furnish to the Property Manager a report package as defined in Exhibit D. Utilizing a
monthly report format approved by Property Manager, these reports shall show all collections, delinquencies,
uncollectible items, vacancies and other matters pertaining to the management, operation, and maintenance of
the Project during the month. The Subcontractor shall also deliver to the Property Manager within thirty (30)
days after (i) the close of a calendar year and (ii) the termination of this Agreement, a balance sheet and a
statement of income and expenses for the Project. The statement of income and expenses, the balance sheet,
and all other financial statements and reports shall be prepared on an accrual basis and a modified cash basis
according to, to the extent possible, generally accepted accounting principles (except that footnote disclosures
are not required). The Subcontractor may, but shall not be required, to obtain audited financial statements for
the Project. Should an audit be required, Subcontractor will coordinate with such auditor and make available
to such auditor at Subcontractor's facilities any reasonably requested financial records and supporting
documents sufficient to the completion of such audit. The Subcontractor shall also comply with all reporting
requirements relating to the operation of the Project required under any deed of trust or mortgage affecting the
Project and will supply the Property Manager with a copy.
4.3 Supporting Documentation. As additional support to the monthly financial
statement, unless otherwise directed by the Property Manager, the Subcontractor shall maintain and make
available copies of the following: (a) all bank statements and bank reconciliations; (b) detailed cash receipts
and disbursement records; (c) rent roll of tenants; (d) paid invoices (or copies thereof); (e) market study of
competition (quarterly only). The Subcontractor shall deliver a copy of the documents described in (a) through
(e) above to the Property Manager. The Subcontractor shall maintain within such items separate income and
expense accounts for the Property Manager and /or Owners, where and as appropriate. Subcontractor shall
also provide the standard accounting services described in Exhibit "D" attached.
4.4 Tax Information. The Subcontractor shall provide the Property Manager with
sufficient information for the delivery to the Property Manager and/or Owners so that the Owners can prepare
their income tax returns with appropriate adjustments to convert the information prepared on an accrual basis
to the cash method of accounting.
S. Right to Audit. Each of the Property Manager and the Owners and their representatives may
examine all books, records and files maintained for the Property Manager by the Subcontractor. The Property
Manager may perform any audit or investigations relating to the Subcontractor's activities at any office of the
Subcontractor, where such books and records are maintained. Should any of the Property Manager or Owners
discover defects in internal control or errors in record keeping, the Subcontractor shall undertake with all
appropriate diligence to correct such discrepancies either upon discovery or within a reasonable period of time.
The Subcontractor shall inform the Property Manager and/or Owners in writing of the action taken to correct
any audit discrepancies.
6. Bank Accounts.
2075663.2
pursuant to the Loan Documents, the Subcontractor shall deposit all rents and other funds collected from the
operation of the Project in a reputable bank or financial institution in a special trust or depository account or
accounts for the Project maintained by the Subcontractor for the benefit of the Property Manager and/or
Owners. The Subcontractor shall maintain books and records of the funds deposited in the accounts and
withdrawals there from (including records of deposits and withdrawals credited and charged to the Property
Manager and/or Owners) (such accounts together with any interest earned thereon, shall collectively be
referred to herein as the "Operating Account"). The Property Manager and/or Owners shall maintain the
Operating Account so that an amount at least as great as the budgeted expenses for such month is in such
Operating Account as of the first of each month. The Subcontractor shall pay from the Operating Account the
operating expenses of the Project and any other payments relative to the Project as required by this Agreement.
If more than one account is necessary to operate the Project, each account shall have a unique name.
6.2 Security Deposit Account. If law or a Lender requires a segregated account of
security deposits, the Subcontractor will open a separate account at a reputable bank or other financial
institution. The Subcontractor shall maintain such account in accordance with applicable law and/or the
applicable loan agreement. The Subcontractor shall use the account only to maintain security deposits. The
Subcontractor shall inform the bank or financial institution to hold the funds in trust for the Property Manager
and/or Owners. The Subcontractor shall maintain detailed records of all security deposits deposited, and allow
the Property Manager, the Owners or their designees access to such records, The Subcontractor may return
such deposits to any tenant in the ordinary course of business in accordance with the terms of the applicable
lease.
6.3 Access to Account. As authorized by signature cards, representatives of the
Subcontractor shall have access to and may draw upon all funds in the accounts described in Sections 6.1 and
6.2 without the approval of the Property Manager or Owners. Additionally, representatives of the
Subcontractor shall have access to and may draw upon any funds escrowed or held in reserve for capital
expenditures without the approval of the Property Manager or Owners, provided that the requirements of
Section 2.9 and any additional Lender requirements with respect to such amounts are satisfied.
Expenses
7.1 Payments of Expenses. The Subcontractor shall pay all expenses of the operation,
maintenance and repair with respect to the Project contemplated by the Budget directly from the Operating
Account or shall be reimbursed by the Property Manager and/or Owners, subject to the conditions set forth in
Section 2, including the following: (a) if applicable, costs of the gross salary and wages or, proportional shares
thereof, payroll taxes, worker's compensation insurance, and all other benefits of employees required to
manage, operate and maintain the Project properly, adequately, safely and economically, subject to this
Agreement, provided that the Subcontractor shall not pay such employees in advance; (b) cost to correct the
violation of any governmental requirement relating to the leasing, use, repair and maintenance of the Project,
or relating to the rules, regulations or orders of the local Board of Fire Underwriters or other similar body, if
such cost is not the result of the Subcontractor's gross negligence or willful misconduct; (c) actual and
reasonable cost of making all repairs, decorations and alterations if such cost is not the result of the
Subcontractor's gross negligence or willful misconduct; (d) cost incurred by the Subcontractor in connection
with all service agreements; (e) cost of collection of delinquent rents collected or attempted to be collected by
a collection agency or attorney; (f) legal fees of attorneys; (g) cost of capital expenditures subject to the
restrictions in Section 2.9 and in this Section; (h) cost of printed checks for each account required by the
Property Manager and/or Owners; (i) cost of utilities; 0) cost of advertising; (k) cost of printed forms and
supplies required for use at the Project; (1) management compensation set forth in Section 9; (m) the cost of
tenant improvements to the Project; (n) all hiring, relocation and termination costs for any employee, including
those individuals whose salaries and benefits are paid by the Property Manager or Owners; (o) broker
commissions; (p) debt service; (q) the cost of services, contractors and insurance; (r) reimbursement of the
Subcontractor's out-of-pocket costs and expenses to the extent not prohibited by Section 8; (s) general
2075663.2
accounting 1 1 1 ; Icabonabia scope of me Subcontractor s responsibility o the
Property Manager and Owners; (t) cost of forms, papers, ledgers, and other supplies and equipment used in the
Subcontractor's office; (u) cost of electronic data processing equipment, including personal computers located
at the Subcontractor's office off the Project for preparation of reports, information and returns to be prepared
by the Subcontractor under the terms of this Agreement; (v) cost of electronic data processing provided by
computer service companies for preparation of reports, information and returns to be prepared by the
Subcontractor under the terms of this Agreement; (w) travel and entertainment expenses intended to advance
the interests of the Project such as travel and entertainment for prospective new tenants or for brokers and
(x) all overhead and indirect expenses of the Subcontractor's office, including, but not limited to,
communication costs (telephone, postage, etc.), computer rentals or time, supplies (paper, envelopes, business
forms, checks, payroll forms and record cards, forms for governmental reports, etc.), printing, equipment,
insurance, fidelity bonds, taxes, bank fees and license fees, and general office expenses allocable to the Project.
All other amounts payable with respect to the Project shall be payable from the Operating Account only after a
revised Budget has been submitted to the Property Manager (and in turn, the Owners), as provided in this
Agreement. If there are not sufficient funds in the Operating Account to make any such payment, the
Subcontractor shall notify the Property Manager if possible, at least ten (10) days prior to any delinquency so
that the Property Manager has an opportunity to allow the Owners to deposit sufficient funds in the Operating
Account to allow for such payment before the imposition of any penalty or late charge. No later than the tenth
(10'h) day of each month, the Subcontractor shall cooperate with the Property Manager to remit to the Owners
all unexpended funds for the prior month, except for a reserve for contingencies reflected in the Budget or
required by Lender which shall remain in the Operating Account in the amount equal to the expenses budgeted
for the month in which the remittance is to be made.
7.2 Annual Rent Starts. The Subcontractor shall annually prepare and submit to Tenants
(with Property Manager's prior approval) on or before December I" of the calendar year before the budget
year, a rent start letter containing any necessary Rental increases.
7.3 Annual Operating Expense Reconciliation, The Subcontractor shall annually prepare
and submit to Tenants according to the terms of the Teases (with Property Manager's prior approval), an
annual operating expense reconciliation within two months after the start of a new calendar year.
Subcontractor shall reimburse Property Manager for any lost revenue caused by Subcontractor's delay in this
process,
8. Subcontractor's Costs Not to Be Reimbursed.
8.1 Non -reimbursable Costs. The following expenses or costs incurred by or on behalf
of the Subcontractor in connection with the management and leasing of the Project shall be at the sole cost and
expense of the Subcontractor and shall not be reimbursed by the Property Manager or the Owners; (a) costs
attributable to losses arising from gross negligence, willful misconduct or fraud on the part of the
Subcontractor, the Subcontractor's associates or employees; and (b) cost of insurance purchased by the
Subcontractor for its own account.
8.2 Litigation. The Subcontractor will be responsible for and hold the Property Manager
and Owners harmless from, all costs relating to disputes with Subcontractor's employees for worker's
compensation (to the extent not covered by insurance), discrimination or wrongful termination, including legal
fees and other expenses.
9. Compensation.
9.1 Property Management Fee. The Subcontractor shall receive, for its services in
managing the day-to-day operations of the Project in accordance with the terms of this Agreement, a monthly
property management fee (the "Subcontractor Fee") equal to the greater of Two thousand five hundred and
00/I0013ollars ($2,5000.00) or two and one half percent (2.5%) of the Gross Revenues (defined below).
2075663.2
ross Revenues, snal uc an gross billings our the upera ions o e rgec tnc u mg r c p ,ease
buy-out payments, and reimbursements by tenants for common area expenses, operating expenses and taxes
and similar pass -through obligations paid by tenants, but excluding (i) security deposits received from tenants
and interest accrued thereon for the benefit of the tenant until such deposits or interest are included in the
taxable income of the Owners; (ii) advance rents (but not lease buy-out payments) until the month in which
payments are to apply as rental income; (iii) reimbursements by tenants for work done for that particular
tenant, (iv) proceeds from the sale or other disposition of all or any part of the Project, (v) insurance proceeds
received by the Property Manager and/or Owners as a result of any insured loss (except proceeds from rent
insurance or the excess of insurance proceeds for repairs over the actual costs of such repairs),
(vi) condemnation proceeds not attributable to rent, (vii) capital contributions made by the Property Manager
and/or Owners; (viii) proceeds from capital, financing and any other transactions not in the ordinary course of
the operation of the Project, (ix) income derived from interest on investments or otherwise, (x) abatement of
taxes, awards arising out of takings by eminent domain, discounts and dividends on insurance policies, and (xi)
rental concessions not paid by third parties. The Subcontractor Fee shall be payable monthly from the
Operating Account or from other funds timely provided by the Property Manager and/or Owners.
9.2 Intentionally Omitted
9.3 Construction Management Fee: The Construction Management Fee shall be a
percentage of the cost of construction, payable one hundred percent (100%) upon completion, or periodically
based upon percentage of completion, as the parties may agree. As used herein, "cost of construction' shall
include: all labor and supervision costs; costs of materials and supplies; contract price for all construction
work performed by general contractors and subcontractors; fees, taxes or other charges levied by governmental
or quasi -governmental agencies in connection with the issuance of all authorizations, approvals, licenses and
permits necessary to undertake construction of the project; cost of all equipment and fixtures provided for in
drawings and specifications; concrete, welding and other testing expenses; and, all architectural and
engineering fees or costs.
Capital or tenant improvement projects that are contracted by the Subcontractor on behalf of the
Owners will be compensated pursuant to the following schedule:
COST OF CONSTRUCTION
FEE
$0 — $100,000
A%
$100,001-$200,000
3.5%
$200,001 - $300,000
3%
Greater than $300,001
By negotiation
10. Termination.
10.1 Termination by the Property Manager. This Agreement shall commence on August
1, 2007, and shall continue for an initial* term ending on July 31, 2008, unless sooner terminated or unless
present management company terminates the contract sooner than July 31, 2007. Unless written notice to
terminate is given by either party to the other at least thirty (30) days prior to the end of the initial term, this
Agreement shall be automatically renewed on August 1, 2008, on a month -to -month basis, upon and subject to
the terms and conditions set forth in this Agreement. The Property Manager shall have the right to terminate
this Agreement, at any time subsequent to the initial term, without cause, upon thirty (30) days prior written
notice to the Subcontractor.
10
2075663.2
erritination bv the Nribcontractor.
10.2.1 The Subcontractor shall have the right to terminate this Agreement, provided
that the Property Manager is in default in the performance of any of their obligations hereunder, and such
default remains uncured for thirty (30) days following the Subcontractor's giving of written notice of such
default to the Property Manager,
10.2.2 The Subcontractor shall have the right to terminate this Agreement for any
reason upon 60 days written notice.
10.3 Final Accounting. Within thirty (30) days after termination of this Agreement for
any reason, the Subcontractor shall deliver to the Property Manager the following: (a) a final accounting,
setting forth the balance of income and expenses on the Project as of the date of termination; (b) transfer to any
account indicated by the Property Manager any balance or monies of the Property Manager, Owners or tenant
security deposits held by the Subcontractor with respect to the Project; and (c) all materials and supplies, keys,
books and records, contracts, leases, receipts for deposits, unpaid bills and other papers or documents that
pertain to the Project. For a period of thirty (30) days after such expiration or cancellation for any reason other
than the Property Manager's default, the Subcontractor shall be available, through its senior executives
familiar with the Project, to consult with and advise the Property Manager or any person or entity succeeding
the Property Manager as Property Manager of the Project or such other person or persons selected by the
Property Manager regarding the operation and maintenance of the Project. In addition, the Subcontractor shall
cooperate with the Property Manager in notifying all tenants of the Project of the expiration and termination of
this Agreement, and shall use reasonable efforts to cooperate with the Property Manager to accomplish an
orderly transfer of the operation and management of the Project to a party designated by the Property Manager.
The Subcontractor shall, at its cost and expense, promptly remove all signs wherever located indicating that it
is the Subcontractor and replace and repair any damage resulting there from. Termination of this Agreement
shall not release either party from liability for failure to perform any of the duties or obligations as expressed
herein and required to be performed by such party for the period before the termination.
11. Conflicts. The Subcontractor shall not deal with or engage, or purchase goods or services
from, any subsidiary or affiliated company of the Subcontractor in connection with the management of
the Project without prior consent of Property Manager.
12. Notices. Any notice to be given or other document or payment to be delivered by any party
to any other party hereunder may be delivered in person, or may be deposited in the United States
mail, duly certified or registered, with postage prepaid, or by Federal Express or other similar
overnight delivery service, and addressed to the party for whom intended, see exhibit B, and as
follows:
11
2075663.2
To the Subcontractor at;
Stan Ford
TIG Central Texas, LTD
901 S. Molise Expressway
Barton Oaks Plaza IV, Suite 285
Austin, Texas 78746
and
To the Property Manager at:
Principle Equity Properties, LP
10303 NW Freeway, Suite 300
Houston, Texas 77092
Attention: Linda S. Larabee
Any party hereto may from time to time, by written notice to the others, designate a different address
which shall be substituted for the one above specified. Unless otherwise specifically provided fieherein, all
notices, payments demands or other communications given hereunder shall be in writing and shall be deemed
to have been duly given and received (i) upon personal delivery, or (h) as of the third business day after
mailing by United States registered or certified mail, postage prepaid, addressed as set forth above, or (iii) the
immediately succeeding business day after deposit with Federal Express or other similar overnight delivery
system.
13. Miscellaneous.
13.1 Assignment. The Subcontractor may not assign this Agreement without the prior
written consent of the Property Manager and Owners, except with respect to an assignment to an affiliate,
including, but not limited to a wholly -owned subsidiary, which shall be permissible under this Agreement,
which consent may be withheld in the Property Manager and/or Owner's sole and absolute discretion.
13.2 Gender. Each gender shall include each other gender. The singular shall include the
plural and vice -versa.
13.3 Amendments. Except as otherwise provided, each amendment, addition or deletion
to this Agreement shall not be effective unless approved by the parties in writing. Except for amendments
occurring as a result of a transfer of all or a portion of the Owners' Interest that is made pursuant to the Loan
Documents, any amendment to this Agreement must be consented to in writing by Lender, or after
securitization of the Loan, from each rating agency that provides a rating in connection with the Loan unless
the Property Manager shall have provided written confirmation from each rating agency that provides a rating
in connection with the Loan that such amendment shall not result in any withdrawal, qualification or
downgrade of such rating. The Lender is expressly intended to be a third party beneficiary of this Section and
shall have the right to enforce the obligations of the parties hereunder.
13.4 Attorneys' Fees. In any action or proceeding between the Subcontractor and the
Property Manager and/or Owners arising from or relating to this Agreement or the enforcement or
interpretation hereof, the party prevailing in such action or proceeding shall be entitled to recover from the
other party all of its reasonable attorneys' fees and other costs and expenses of the action or proceeding.
13.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Tennessee without regard to any choice of law rules.
12
2075663.2
enue. Any action relating to or arising out of this Agreement Snail e brought only
in a court of competent jurisdiction located in Nashville, Tennessee.
13.7 fleadin¢s, All headings are only for convenience and ease of reference and are
irrelevant to the construction or interpretation of any provision of this Agreement.
13.8 Representations. The Subcontractor represents and warrants that it is fully qualified
and licensed, to the extent required by law, to manage and lease real estate and perform all obligations
assumed by the Subcontractor hereunder. The Subcontractor shall use reasonable efforts to comply with all
such laws now or hereafter in effect.
13.9 Indemnification by the Subcontractor
13.9.1 The Subcontractor shall indemnify, defend and hold the Property Manager
and Owners and their shareholders, members, partners, officers, directors, and employees harmless from any
and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses,
including reasonable attorneys' fees and court costs, sustained or incurred by or asserted against the Property
Manager or Owners by reason of the acts of the Subcontractor which arise out of the gross negligence, willful
misconduct or fraud of the Subcontractor, its agents or employees or the Subcontractor's breach of this
Agreement. If any person or entity makes a claim or institutes a suit against the Property Manager or Owners
on a matter for which the Property Manager or Owners claims the benefit of the foregoing indemnification,
then (a) the Property Manager shall give the Subcontractor prompt notice thereof in writing; (b) the
Subcontractor may defend such claim or action by counsel of its own choosing provided such counsel is
reasonably satisfactory to the Property Manager; and (c) neither the Property Manager, Owners nor the
Subcontractor shall settle any claim without the other's written consent.
13.9.2 The Subcontractor acknowledges that the Property Manager and/or Owners
have or will be entering into Loan Documents, which may include provisions for personal liability for the
Property Manager and/or Owners on certain "nonrecourse carve -outs." The Subcontractor hereby agrees that
to the extent that the Property Manager and/or Owners are required to make payments on such indemnification
as a direct result of (i) the Subcontractor's fraud or willful misconduct, (H) the Subcontractor's commission of
a criminal act or (iii) damage or destruction to the Project caused by acts of the Subcontractor that are grossly
negligent, the Subcontractor will indemnify the Property Manager and/or Owners for any such liability that
was caused by such actions.
13.10 Indemnification by the Property Manager and Owners. The Property Manager and
Owners shall indemnify, defend and hold the Subcontractor and its shareholders, members, partners, officers,
directors and employees harmless from any and all claims, demands, causes of action, losses, damages, fines,
penalties, liabilities, costs and expenses, including reasonable attorneys' fees and court costs, sustained or
incurred by or asserted against the Subcontractor by reason of the operation, management, and maintenance of
the Project and the performance by the Subcontractor of the Subcontractor's obligations under this Agreement,
except those which arise from the Subcontractor's gross negligence, willful misconduct or fraud. If any person
or entity makes a claim or institutes a suit against the Subcontractor on a matter for which the Subcontractor
claims the benefit of the foregoing indemnification, then (a) the Subcontractor shall give the Property Manager
prompt notice thereof in writing; (b) the Property Manager and Owners may defend such claim or action by
counsel of their own choosing provided such counsel is reasonably satisfactory to the Subcontractor;
(c) neither the Subcontractor, Owners nor the Property Manager shall settle any claim without the other's
written consent; and (d) this subsection shall not be so construed as to release the Subcontractor, Owner or the
Property Manager from any liability to the other for a breach of any of the covenants agreed to be performed
under the terms of this Agreement. The Property Manager and/or Owners agree that this Section 13,10 is
subject and subordinate to the Loan Documents and the liens created thereby and to all rights of Lender
thereunder.
13
2075663.2
all previous agreements entered into between the parties with respect to the Project.
13.12 Severability. If any provisions of this Agreement or application to any parry or
circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to
any extent, the remainder of this Agreement, where the application of such provisions or circumstances other
than those as to which it is determined to be invalid or unenforceable shall not be affected thereby, and each
provision hereof shall be valid and shall be enforced to the fullest extent permitted by law.
13,13 No Waiver, The failure by either party to insist upon the strict performance of or to
seek remedy of any one of the terms or conditions of this Agreement or to exercise any right, remedy, or
election set forth herein or permitted by law shall not constitute or be construed as a waiver or relinquishment
for the future of such term, condition, right, remedy or election, but such item shall continue and remain in fill
force and effect. All rights or remedies of the parties specified in this Agreement and all other rights or
remedies that they may have at law, in equity or otherwise shall be distinct, separate and cumulative rights or
remedies, and no one of them, whether exercised or not, shall be deemed to be in exclusion of any other right
or remedy of the parties.
13.14 Binding Effect. This Agreement shall be binding and inure to the benefit of the
parties and their respective successors and assigns.
13.15 Enforcement of the Subcontractor's Rights. In the enforcement of its rights under
this Agreement, the Subcontractor shall not seek or obtain a money judgment or any other right or remedy
against any shareholders or disclosed or undisclosed principals of the Property Manager or Owners. The
Subcontractor shall enforce its rights and remedies solely against the Property Manager or Owners.
13.16 Counterparts. This Agreement may be executed in several counterparts, and all so
executed shall constitute one Agreement, binding on all of the parties hereto, notwithstanding that all of the
parties are not signatory to the original or the same counterpart.
14
207W3.2
e parties hereto have execu MS Agreement tne date and year lirst
above written.
SUBCONTRACTOR:
By: TIG Central Texas Ltd
fi
By:
Stan Ford, Principal
PROPERTY MANAGER:
By: Principle Equity Properties, LP, a Delaware
limited partnership
By: Principle Equity Properties, LLC, a Delaware
limited liability company; its general partner
By:
Nlichae ay, its member
15
2075663.2
To be Provided.
2075663.1
LEGAL DESCRIPTION
NOTICE
SUBCONTRACTOR:
Attention: Stan Ford
TIG Central Texas, LTD
901 S. Mopac Expressway
Barton Oaks Plaza IV, Suite 285
Austin, Texas 78746
and
PROPERTY MANAGER:
Principle Equity Properties, LP
10303 NW Freeway, Suite 300
Houston, Texas 77092
Attention: Linda S. Larabee
2015663.1
To be Provided.
2075663.1
EXHIBIT "C"
INITIAL BUDGET
EXHIBIT D
ACCOUNTING SERVICES
Standard Reporting
Subcontractor shall keep and maintain, or shall cause to be kept and maintained on a Calendar Year (unless
otherwise directed) proper and accurate books, records and accounts reflecting all of the financial affairs of the
Project transacted by Subcontractor. Subcontractor shall supply Property Manager with any information
necessary to determine the accuracy of the books, records and accounts. Property Manager shall have the right
from time -to -time at all times during normal business hours upon reasonable notice to examine such books and
accounts at the office of the Subcontractor's accounting department and to make such copies or extracts
thereof as Property Manager shall desire.. Subcontractor shall assist any audit firm employed by Property
Manager to oversee any audit or review of the property books.
Subcontractor's accounting records and reports will be provided in Subcontractor's standard report format
unless a format is given by Property Manager. Subcontractor shall prepare and submit the following reports
and statements, which reports shall (i) be on both an accrual and modified cash basis and, (ii) be prepared on
software previously approved by the Property Manager.
Subcontractor shall provide Property Manager an Accounts Receivable Report on the 511" l ei and 2e of
every month.
On a monthly basis, the Subcontractor will furnish a report summarizing the financial operations of the Project
("Financial Report"). This report will be due to the Property Manager on or before the 10'* of the month and
will include operations for the previous month ending on the last day of the month`. The Financial Report will
include the following:
(a) Balance Sheet
(b) Actual vs. Budget Operating Statement
a. Month to Month
b. Year -to -Date
c. Annual Budget vs. Projection
(c) Variance Report describing variances in (b)
(d) Cash Flow Statement
(e) Accounts Receivable Aging Report
(1) Rent Roll
(g) Cash Receipts Detail
(h) Cash Disbursement Detail
(i) Security Deposit Ledger
0) Current Month General Ledger
(k) Prior Month Bank Reconciliation
(1) Lease Expiration Report
(m) Asset Manager, Property Manager and Subcontractor Fee Calculation
(n) Capitalization Schedule showing all Building Improvements, Tenant Improvements, Leasing
Costs
(o) Detailed Executive Summary/Narrative regarding Operations, Capital Expenditures, Leasing
Activity, and Market Conditions
2075663.1
RECORDING REQUESTED BY,
WHEN RECORDED MAIL TO:
PEM University H, LLC
10303 NW Freeway, Suite 300
Houston, TX 77092
Above Space for Recorder's Use
TENANTS IN COMMON AGREEMENT
This TENANTS IN COMMON AGREEMENT ("Agreement") is dated March 27, 2007 and is
made and effective as of the date that any Tenant in Common (as defined below) acquires an interest in
the Project (the "Effective Date"), by and between PEM University S, LP, a Delaware limited partnership
("PEM University S"), PEM University H, LLC, a Delaware limited liability company (the "Company").
The Company and PEM University S shall individually be referred to as a "Tenant in Common" and
collectively, as the "Tenants in Common" with reference to the facts set forth below.
RECITALS
A. The Tenants in Common will acquire the percentage undivided interests set forth on
Exhibit "A" in certain real property and improvements, as more particularly described on Exhibit "B"
attached hereto and incorporated herein (the "Project").
B. The Tenants in Common desire to enter into this Agreement to provide for the orderly
administration of their rights and responsibilities as to each other and as to others and to delegate
authority and responsibility for the intended further operation and management of the Project.
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained in this
Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as set forth below.
1. Nature of Relationship Between Co -Tenants. The Tenants in Common shall each hold
their respective interests in the Project as tenants -in -common. The Tenants in Common do not intend by
this Agreement to create a partnership or ajoint venture, but merely to set forth the terms and conditions
upon which each of them shall hold their respective interests in the Project. Neither do the Tenants in
Common wish to create a partnership or joint venture with the Property Manager (as defined below).
Each Tenant in Common hereby elects to be excluded from the provisions of Subchapter K of Chapter I
of the Internal Revenue Code of 1986, as amended (the "Code"), with respect to the joint ownership of
the Project. The exclusion elected by the Tenants in Common hereunder shall commence with the
execution of this Agreement and shall be equally applicable to all assignees of a Tenant in Common upon
such assignment. Each Tenant in Common hereby covenants and agrees that each Tenant in Common
shall report on such Tenant in Common's respective federal and state income tax returns such Tenant in
Common's respective share of items of income, gain/loss, deduction and credits that result from holding
the Project in a manner consistent with (i) the treatment of the co -tenancy as a co -ownership of real
property (and not a partnership) for Federal and state income tax purposes and (ii) the exclusion of the
Tenants in Common from Subchapter K of Chapter I of the Code, commencing with the first taxable year
of such Tenant in Common that includes the Effective Date or, for assignees of a Tenant in Common, the
3802198.3
date of such assignment. No Tenant in Common shall notify the Commissioner of Internal Revenue that
such Tenant in Common desires that Subchapter K of the Code apply to the Tenants in Common and each
Tenant in Common hereby agrees to indemnify, protect, defend and hold the other Tenants in Common
free and harmless from all costs, liabilities, tax consequences and expenses, including, without limitation,
attorneys' fees, which may result from any Tenant in Common so notifying the Commissioner of Internal
Revenue in violation of this Agreement or otherwise taking a contrary position on any tax return. The
Tenants in Common shall not file a partnership or corporate tax return, conduct business under a common
name, execute an agreement identifying any or all of the Tenants in Common as partners, shareholders, or
members of a business entity, or otherwise hold themselves out as a partnership or other form of business
entity. Except as expressly provided herein, no Tenant in Common is authorized to act as agent for, to act
on behalf of, or to do any act that will bind any other Tenant in Common or to incur any obligations with
respect to the Project.
2, Management.
2.1 Management Agreement. Concurrently with the acquisition of the Project, the
Tenants in Common will enter into a Property and Asset Management Agreement (the "Management
Agreement") with Principle Equity Properties, LP, a Delaware limited partnership ("Property Manager").
Pursuant to the Management Agreement, the Property Manager shall be the sole and exclusive manager
of the Project, interface with the owner and holder of any first lien mortgage or deed of trust encumbering
the Project during the term of the Management Agreement and act as the agent of the Tenants in Common
with respect to the management, operation, maintenance and leasing of the Project during the term of the
Management Agreement. The terms, covenants and conditions of the Management Agreement are
incorporated herein as if set forth in full. Neither (a) the death, retirement, removal, withdrawal,
termination, resignation or incompetency of the Property Manager, (b) any assignment for the benefit of
creditors by or the adjudication of bankruptcy of the Property Manager nor (c)the termination of the
Management Agreement shall cause the termination of this Agreement and this Agreement shall remain
in full force and effect notwithstanding any such events.
2.2 Consent of the Tenants in Common.
2.2.1 Unanimous Consent. The consent of all of the Tenants in Common shall
be required with respect to (i) any sale or exchange of the Project, (ii) any lease or re -lease of all or a
portion of the Project, (iii) any loan, or modification of any loan, secured by the Project ("Loan") or (iv)
the approval of any property management agreement or any extension, renewal or modification thereof.
Wherever in this Agreement the consent or approval of the Tenants in Common is required or otherwise
requested, with respect to (i) any sale or exchange of all or a portion of the Project or (ii) any loan or
modification of any loan, the Tenants in Common shall have 15 days after the date the request for such
consent or approval is received pursuant to Section 10.7 to approve or disapprove of the matter.
Wherever in this Agreement the consent or approval of the Tenants in Common is required or otherwise
requested, with respect to any modification or renewal of any property management agreement, the
Tenants in Common shall have 30 days after the date the request for consent or approval is received
pursuant to Section 10.7 to approve or disapprove of the matter. Wherever in this Agreement the consent
or approval of the Tenants in Common is required or otherwise requested, with respect to any lease or re-
lease of all or a portion of the Project, the Tenants in Common shall have 3 days after the date the request
for consent or approval is received pursuant to Section 10.7 to approve or disapprove of the matter. The
Tenants in Common agree to use their best efforts to respond to any request for consent or approval. If a
Tenant in Common does not disapprove of such matter within the specified response period described
above, the Tenant in Common shall be deemed to have approved the matter. By execution hereof, the
Tenants in Common confirm their approval of the Management Agreement and that certain loan in the
original principal amount of approximately $16,800,000 to be made by PNC Bank, National Association
3802198.3
(together with its successors and/or assigns, the "Initial Lender") secured by, among other things, a
mortgage or deed of trust ("Deed of Trust") on the Project (the "Initial Loan").
2.2.2 Majority Consent of the Tenants in Common. Wherever the approval or
consent of the Tenants in Common is required with respect to any items, other than those set forth in
Section 2.2.1, the approval or consent of the Tenants in Common holding more than 50% of the
undivided interests in the Project shall be required to approve such action. The Tenants in Common shall
have 15 days after the date the request for such consent or approval is received pursuant to Section 10.7 to
approve or disapprove of the matter in writing to the Property Manager. The Tenants in Common agree
to use their best efforts to respond to any request for consent or approval. If a Tenant in Common does
not disapprove of any item requiring the consent of the Tenants in Common pursuant to this Section 2.2.2
within the 15 day specified response period described above, the Tenant in Common shall be deemed to
have approved the matter. By execution hereof, the Tenants in Common confirm their approval of the
existing Project leases and the form lease to initially be used at the Project.
2.3 Budget. The approval or consent of the Tenants in Common holding more than
50% of the undivided interests in the Project shall be required for the approval of the annual capital and
operating budget ("Budget") for the promotion, operation, leasing, repair, maintenance and improvement
of the Project for each calendar year. The Property Manager shall prepare the Budget. The Budget for
the remainder of the first calendar year of this Agreement is attached to the Management Agreement and
is hereby approved by each Tenant in Common. The Property Manager shall deliver each subsequent
Budget for each subsequent calendar year by December 15th of the calendar year before the budget year,
or as soon as possible thereafter. The Tenants in Common shall have 15 days after delivery of the Budget
to the Tenants in Common to approve or disapprove of the Budget. The Tenants in Common agree to use
their best efforts to approve the Budget. If a Tenant in Common does not disapprove the Budget (which
disapproval shall be in writing to the Property Manager), or any item therein, within such 15 day specified
response period described above, the Tenant in Common shall have been deemed to have approved the
Budget. In the event the approval is not obtained, the non -approving Tenant(s) in Common shall
negotiate in good faith with the Property Manager and the other Tenants in Common for 15 days to
resolve the issue. If the parties are unable to reach an agreement, the issue shall be resolved by arbitration
as set forth in Section 10.16 with the disputing Tenants in Common on the one hand, and the other
Tenants in Common on the other hand, each paying 50% of the costs of the arbitration. The Property
Manager may proceed under the terms of the proposed Budget for items that are not objected to, and may
take any action with respect to Permitted Expenditures (as defined in Section 2.5.2 of the Management
Agreement). In the event that the items that are objected to are operational expenditures, as opposed to
capital expenditures, the Property Manager shall be entitled to operate the Project using the prior year's
Budget until approval is obtained. The Property Manager may at any time submit a revised Budget to the
Tenants in Common for their approval which will be governed by the terms of this Section 2.3 and shall
continue to operate the Project under the previously approved Budget until the revised Budget is
approved.
3. Income and Liabilities. Except as otherwise provided herein and in the Management
Agreement, all benefits and obligations of the ownership of the Project, including, without limitation,
income, revenue, operating expenses, proceeds from sale or refinance or condemnation awards shall be
shared by the Tenants in Common in proportion to their respective undivided interests in the Project.
Notwithstanding the foregoing, (a) each Tenant in Common shall be responsible for all real estate and
personal property taxes, general and special real property assessments and other like charges (collectively
"Taxes") attributable to its undivided interest in the Project, (b)fees under the Management Agreement
shall be paid by each of the Tenants in Common as provided in the Management Agreement and (c)
expenses or other costs that are not applied to the Tenants in Common pro rata based on their interests in
the Project shall be separately charged to each Tenant in Common. The Tenants in Common shall
3802198.3
receive, within 3 months after receipt by the Property Manager, all cash from operations of the Project
after payment of expenses and debt service under any Loan, in proportion to their respective undivided
interests in the Project, except for such amounts as may be determined by the Property Manager pursuant
to the Management Agreement to be retained for reserves or improvements.
4. Co -Tenant's Obligations. The Tenants in Common each agree to perform such acts as
may be reasonably necessary to carry out the terms and conditions of this Agreement, including, without
limitation:
4.1 Documents. The Tenants in Common shall execute any and all documents
required in connection with a sale or refinancing of the Project in accordance with Section 5 and such
additional documents as may be required under this Agreement or may be reasonably required to effect
the intent of the Tenants in Common with respect to the Project or any Loans.
4.2 Additional Funds. Each Tenant in Common will be responsible for a pro rata
share (based on its undivided interest or as otherwise provided with respect to items specifically
applicable to individual Tenants in Common) of operating expenses, Taxes, debt service, fees payable to
the Property Manager pursuant to the Management Agreement, or other applicable items or any future
cash needed in connection with the ownership, operation, management and maintenance of the Project as
determined by the Property Manager pursuant to the Management Agreement. Without limiting the
foregoing, each Tenant in Common agrees that if any Loan provides for recourse liability to PEM
University S, Principle Equity (as defined herein) or the Company or any affiliate and non -recourse
liability to one or more of the other Tenants in Common, and if PEM University S, Principle Equity or the
Company or any affiliate pays more than its pro rata share of the liability related to any Loan (as
compared to its ownership interest) as a result of such recourse liability ("Excess Payment"), each Tenant
in Common agrees to reimburse PEM University S, Principle Equity, the Company or any affiliate for its
pro rata share of such Excess Payment; excluding, however, any cost for which the Property Manager has
agreed to indemnify the Tenants in Common pursuant to Section 13.9.2 of the Management Agreement.
In addition, each Tenant in Common shall be liable for, and indemnify and hold harmless, the other
Tenants in Common and their affiliates as a result of any action or inaction by such Tenant in Common
that causes any recourse liability or damages to the Tenants in Common or their affiliates or the Project
with respect to any Loan. To the extent any Tenant in Common fails to advance any funds or fails to pay
its share of expenses pursuant to this Section within 15 days after the Property Manager or the Company
delivers notice that such additional funds are required, such Tenant in Common shall be deemed to be a
Defaulting Tenant in Common as defined in Section 7.3. In addition, the Property Manager is hereby
authorized to withhold from the Defaulting Tenant in Common's share of proceeds and distributions any
amounts due under this Section 4.2 and not paid by any such Defaulting Tenant in Common plus interest
at an annual rate equal to the greater of (i) 10% per annum or (ii) the prime rate (as set forth in The Wall
Street Journal) over the applicable period plus 5% per annum but not more than allowed under applicable
law. In the event any Tenant in Common becomes a Defaulting Tenant in Common, the ownership
interest in the Project of the Defaulting Tenant in Common may be purchased pursuant to Section 7.3.
S. Sale or Encumbrance of Project.
5.1 Negotiation and Terms. In accordance with the Management Agreement, the
Property Manager shall be entitled to seek and negotiate the terms of (a) permanent and other financing
for the Project, including Loans, (b) the sale or exchange of the Project (or a portion thereof) to third -
party purchasers (a "Sale") and (c) any lease or re -lease of all or any portion of the Project. All of the
items described in (a), (b) and (c) shall require the unanimous approval of the Tenants in Common, which
approval shall be as set forth in Section 2.2.1. Any such written request from the Property Manager for
such approval shall be accompanied by a copy of a bona fide offer to purchase in the case of a proposed
3802198.3
n
Sale, a loan commitment letter in the case of a proposed financing or a summary of all of the material
terms of any proposed lease.
5.2 Sale Proceeds. To the extent necessary, the proceeds of a Sale shall (i) first, be,
used to pay in full any Loans, (ii) second, be used to pay all outstanding costs and expenses incurred in
connection with the holding, marketing and sale of the Project, and (iii) third, be paid as provided in
Section 3.
6. Possession. The Tenants in Common intend to lease the Project at all times and no
Tenant in Common shall have the right to occupy or use the Project at any time during the term of this
Agreement.
Transfer or Encumbrance.
7.1 Transfer. Each Tenant in Common may sell, transfer, convey, pledge, encumber
or hypothecate its interest in the Project or any part thereof (each a "Transfer"), provided that any
transferee shall take such interest subject to this Agreement and the Management Agreement, to the
extent the Management Agreement is in effect at the time of the Transfer, and the transferor and
transferee shall execute and cause to be recorded an assignment and assumption agreement ("Assumption
Agreement") whereby (i) the transferor assigns to the transferee all of its right, title and interest in and to
this Agreement and the Management Agreement; and (ii) the transferee assumes and agrees to perform
faithfully and to be bound by all of the terms, covenants, conditions, provisions and agreements of this
Agreement and the Management Agreement with respect to the undivided interest to be transferred. Upon
execution and recordation of such Assumption Agreement, the transferor shall be relieved of all liability
under this Agreement accruing after the date of recordation of the Assumption Agreement except for
those arising from events that occurred prior to the date of recordation and the transferee shall become a
party to this Agreement without further action by the other Tenants in Common. The Tenants in
Common acknowledge that PEM University S is selling undivided interests in the Project pursuant to the
Confidential Private Placement Memorandum of Tenant in Common Interests in University Shopping
Center dated March 31, 2007, as amended or supplemented (the "Offering Memorandum"). The rights
set forth in Section 7 to purchase an interest in the Project shall not apply to any Tenant in Common
undivided interest sold by PEM University S pursuant to the Offering Memorandum. Each Tenant in
Common shall be responsible for compliance with applicable securities laws with respect to any sale or
transfer of its interest in the Project.
7.2 Right of First Offer. If a Tenant in Common (a "Selling Tenant") desires to sell
its interest in the Project or its ownership interest in the special purpose limited liability company formed
to hold its interest in the Project, then such Selling Tenant shall first allow Principle Equity Management,
LP, a Delaware limited partnership ("Principle Equity") or the Company, and second the Tenants in
Common other than the Selling Tenant (each an "Offeror" and collectively the "Offerors") to make an
offer to purchase the Selling Tenant's interest pursuant to the terms and conditions set forth in this
Section 7.2; provided, however, no right of first offer will be applicable to (i) sales by PEM University S
of undivided interests in the Project pursuant to the Offering Memorandum, (ii) any exercise of any of the
purchase options set forth in Sections 7.3, 8.1 or 9, or (iii) transfers from PEM University S or the
Company to their affiliates. If a Selling Tenant desires to sell its interest in the Project, such Selling
Tenant shall provide written notice (the "Notice") of its intent to sell its interest to each Offeror. Principle
Equity and the Company shall first have the right, within 15 days after receipt of such Notice pursuant to
Section 10.7, to deliver a written offer to the Selling Tenant to purchase the Selling Tenant's interest in
the Project. If the Selling Tenant does not accept an offer from Principle Equity and the Company within
15 days after receipt of the Notice pursuant to Section 10.7, then each Tenant in Common other than the
Selling Tenant shall have the right within the next 15 days after the end of the first 15 day period, to
3802198.3
deliver an offer to the Selling Tenant to purchase the Selling Tenant's interest in the Project for a price
that is greater than the price offered by Principle Equity and the Company. Each Tenant in Common shall
be entitled to purchase a portion of the Selling Tenant's interest in proportion to its undivided interest in
the Project. If any Tenant in Common elects not to purchase its share of the Selling Tenant's, interest in
the Project, then the other Tenants in Common shall be entitled to purchase additional interests based on
their undivided interest in the Project. If the Selling Tenant accepts any offer pursuant to the preceding
three sentences, it must also accept all other offers at the purchase price at or above the offer it accepts. If
the Selling Tenant does not accept the offer from either Principle Equity and the Company or the Tenants
in Common other than the Selling Tenant for all or any portion of the Selling Tenant's interest in the
Project, then the Selling Tenant shall be free to sell its interest (or remaining portion thereof) in the
Project to a purchaser other than an Offeror; provided that the sale of the Selling Tenant's interest to a
purchaser (other than an Offeror) is (a) for a price greater than any purchase price offered by an Offeror
and not accepted by the Selling Tenant pursuant to this Section 7.2, (b) in compliance with the terms of
any Loan, and (c) completed within 120 days of the expiration of the first 15 day period referenced above
in this Section. If such sale is not completed within such 120 day period, the Selling Tenant must again
provide each Offeror with its right of first offer granted hereunder if it wishes to sell its interest in the
Project. Any offer provided hereunder by Principle Equity, the Company or the other Tenants in
Common and any acceptance of such an offer shall be irrevocable and may be enforced through an action
for specific performance without the necessity of posting bond. The provisions of this Section shall not
apply to the sale of any Tenant in Common's interest if the process for the purchase of such interest has
begun under any other provision of this Agreement, including under Sections 7.3, 8.1 or 9, and this
Section may not be invoked after any such process is begun unless and until that process is abandoned.
The closing of any such offer shall occur not later than 90 days after the date of acceptance at the offices
of the Company. Principle Equity and the Company may assign their rights set forth in this Section 7.2.
7.3 Purchase Option of Dissenting or Defaulting Tenant in Common's Interest. The
Tenants in Common agree that first Principle Equity or the Company, and second, the other Tenants in
Common, shall have the right but not the obligation, while this Agreement remains in effect, to purchase
a Dissenting Tenant in Common's (as defined below) interest or a Defaulting Tenant in Common's (as
defined below) interest in the Project as set forth in this Section 7.3. A "Dissenting Tenant in Common"
shall mean a Tenant in Common who votes against or fails to consent to any item that requires the
unanimous approval or consent of the Tenants in Common pursuant to the terms of this Agreement when
Tenants in Common holding more than 66-2/3% of the undivided interests in the Project have voted or
provided consent for such action. A "Defaulting Tenant in Common" shall mean a Tenant in Common
who is in default under any Loan or any documents in respect of any such Loan ("Loan Documents")
(including a transfer by operation of law or otherwise), the Management Agreement or this Agreement.
In order to exercise this option, Principle Equity or the Company shall provide written notice of its
election to exercise this option (i) if to a Dissenting Tenant in Common at any time prior to 45 days after
the approval period for such vote or consent has terminated as provided in any request for such vote or
consent or (ii) if to a Defaulting Tenant in Common during the period such Defaulting Tenant in Common
is in default and for a period of 30 days after such default has been cured. In the event Principle Equity
does not exercise the options described in this Section 7.3, the other Tenants in Common shall have 30
days to provide the Defaulting Tenant in Common or the Dissenting Tenant in Common with written
notice of their election to exercise such option. The purchase price of the Dissenting Tenant in Common
or the Defaulting Tenant in Common's interest shall be equal to the Fair Market Value of the Interest (as
defined in Section 8.2) of the Dissenting Tenant in Common or the Defaulting Tenant in Common. Such
purchase price shall be paid by Principle Equity or the Company or the other Tenants in Common within
30 days of the determination of the Fair Market Value of the Project and the transfer of the interest shall
occur on such date unless otherwise agreed to in writing between Principle Equity or the Company or the
other Tenants in Common and the Dissenting Tenant in Common or the Defaulting Tenant in Common.
The purchaser and seller shall begin negotiation of the Fair Market Value of the Project within 15 days
3802198.3
after the date of the written notice from Principle Equity or the Company or the other Tenants in Common
and shall follow the procedures set forth in Section 8.2; provided, however, in the event that a
simultaneous transaction results in multiple Dissenting Tenants in Common or Defaulting Tenants in
Common, such multiple Dissenting Tenants in Common or Defaulting Tenants in Common shall
collectively be treated as the seller for purposes of the determination of the Fair Market Value of the
Project and the procedures set forth in Section 8.2. The allocation of the costs and liabilities shall be
subject to the terms set forth in Section 8.2. In the event a Defaulting Tenant in Common's interest is
purchased pursuant to this Section 7.3 and the Defaulting Tenant in Common is liable to any lender for its
losses or for any principal or interest under its Loan as a result of the Defaulting Tenant in Common's
violation of a non -recourse carve -out or springing recourse under the Loan Documents, the Defaulting
Tenant in Common hereby authorizes the Property Manager, Principle Equity or the Company to
withhold from the payment of the purchase price an amount equal to such lender losses or principal or
interest and to pay such amounts directly to the lender (or any other Tenant in Common or affiliate who
may have been liable for such amount to lender) under the applicable Loan on behalf of the Defaulting
Tenant in Common. Principle Equity and the Company may assign their rights set forth in this Section
7.3.
Partition.
8.1 Right of Partition. Subject to Section 8.3, the Tenants in Common agree that any
Tenant in Common and any of its successors -in -interest shall have the right, while this Agreement
remains in effect, to have the Project partitioned, and to file a complaint or institute any proceeding at law
or in equity to have the Project partitioned in accordance with and to the extent provided by applicable
law. The Tenants in Common acknowledge that partition of the Project may result in a forced sale by all
of the Tenants in Common. To avoid the inequity of a forced sale and the potential adverse effect on the
investment by the Tenants in Common, the Tenants in Common agree that, as a condition precedent to
filing a partition action, the Tenant in Common filing such action ("Seller") shall first make a written
offer ("Offer") to sell its undivided interest first to Principle Equity or the Company and second to the
other Tenants in Common at a price equal to the Fair Market Value of the Interest (as defined below) of
Seller's undivided interest. If Principle Equity or the Company does not accept such Offer, then the other
Tenants in Common shall be entitled to purchase a portion of the Seller's interest in proportion to their
undivided interests in the Project at a price equal to the Fair Market Value of the Interest. If any Tenant
in Common elects not to purchase his or her share of the Seller's interest, the other Tenants in Common
shall be entitled to purchase additional interests based on their undivided interest in the Project.
8.2 Fair Market Value. "Fair Market Value of the Interest" shall mean the fair
market value of Seller's undivided interest in the Project (including reserves) (determined by reducing the
Fair Market Value of the Project by (i) liabilities secured by the Project or liabilities taken subject to,
(ii) any fee or other amount that would be payable to the Property Manager or any affiliates (including
any real estate commission) under the Management Agreement upon the sale of the Project at a price
equal to the Fair Market Value of the Project and (iii) selling, prepayment (to the extent reasonably
anticipated to be incurred by the other Tenants in Common) or other costs that would apply in the event
the Project was sold on the date of the Offer, and multiplying the result by the partitioning Tenant in
Common's percentage interest in the Project on the date of the Offer) as determined in accordance with
the procedures set forth below, including any unpaid advances made pursuant to Section 4.2 on behalf of
Seller. Closing costs and prorations shall be allocated, as is standard practice where the Project is located.
Principle Equity or the Company or the other Tenants in Common, as applicable, shall have 20 days after
delivery of the Offer to accept the Offer. If Principle Equity or the Company does not accept the Offer
within 20 day period, the other Tenants in Common shall have the right within the next 20 days to accept
the Offer. If Principle Equity or the Company or any of the other Tenants in Common ("Purchaser")
accept the Offer, Seller and Purchaser shall commence negotiation of the Fair Market Value of the Project
3802198.3
7
within 15 days after the Offer is accepted. If the parties do not agree, after good faith negotiations, within
10 days, then each party shall submit to the other a proposal containing the Fair Market Value of the
Project the submitting party believes to be correct ("Proposal"). If either parry fails to timely submit a
Proposal, the other party's submitted Proposal shall determine the Fair Market Value of the Project. If
both parties timely submit Proposals, then the Fair Market Value of the Project shall be determined by
final and binding arbitration in accordance with the procedures set forth below. The parties shall meet
within 7 days after delivery of the last Proposal and make a good faith attempt to mutually appoint a
certified MAI real estate appraiser as an arbitrator who shall have been active full-time over the previous
5 years in the appraisal of comparable properties located in the county in which the Project is located to
act as the arbitrator. If the parties are unable to agree upon a single arbitrator, then the parties each shall,
within 5 days after the meeting, select an arbitrator that meets the foregoing qualifications. The 2
arbitrators so appointed shall, within 15 days after their appointment, appoint a third arbitrator meeting
the foregoing qualifications and the 3 arbitrators shall determine whether Seller's or Purchaser's Proposal
most closely approximates the Project's fair market value. The determination of the arbitrator(s) shall be
limited solely to the issue of whether Seller's or Purchaser's Proposal most closely approximates the
Project's fair market value. The decision of the single arbitrator or of the arbitrator(s) shall be made
within 30 days after the appointment of a single arbitrator or the third arbitrator, as applicable. The
arbitrator(s)shall have no authority to create an independent structure of fair market value or prescribe or
change any or several of the components or the structure thereof; the sole decision to be made shall be
which of the parties' Proposals shall determine the Fair Market Value of the Project. The decision of the
single arbitrator or majority of the 3 arbitrators shall be binding upon the parties. If either party fails to
appoint an arbitrator within the time period specified above, the arbitrator appointed by one of them shall
reach a decision, which shall be binding upon the parties. The cost of the arbitrator(s) shall be paid
equally by Seller and Purchaser. The arbitration shall be conducted in Harris County, Texas, unless
otherwise agreed to by the parties thereto, in accordance with applicable Texas law, as modified by this
Agreement. The parties agree that Federal Arbitration Act, Title 9 of the United States Code, shall not
apply to any arbitration hereunder. The parties shall have no discovery rights in connection with the
arbitration. The decision of the arbitrator(s) may be submitted to any court of competent jurisdiction by
the party designated in the decision. The party designated in the decision shall submit to the superior
court a form of judgment incorporating the decision of the arbitrator(s), and such judgment, when signed
by a judge of the superior court, shall become final for all purposes and shall be entered by the clerk of
the court on the judgment roll of the court. If one party refuses to arbitrate an arbitrable dispute and the
party demanding arbitration obtains a court order directing the other party to arbitrate, the party
demanding arbitration shall be entitled to all of its reasonable attorneys' fees and costs in obtaining such
order, regardless of which party ultimately prevails in the matter. In addition, if one party refuses
arbitration and is subsequently ordered by a court to arbitrate, such party shall also pay all of the
arbitration costs and expenses. By executing this Agreement each Tenant in Common is agreeing to have
any dispute arising out of the matters included in the arbitration of disputes provision decided by neutral
arbitration as provided by Texas law and each Tenant in Common is giving up any rights it might possess
to have the dispute litigated in a court or jury trial. By executing this Agreement, each Tenant in
Common is giving up its judicial rights to discovery and appeal. If a Tenant in Common refuses to submit
to arbitration after agreeing to this provision, the Tenant in Common may be compelled to arbitrate under
the authority of applicable Texas law. Each Tenant in Common's agreement to this arbitration provision
is voluntary. The closing of the purchase of Seller's interest shall occur at a mutually agreeable title
company where the Project is located within 30 days from the date a Fair Market Value of the Project is
determined, whether by agreement or arbitration. Closing costs and prorations shall be allocated as is
standard practice where the Project is located. The Purchaser shall take Seller's interest subject to the
liabilities included in the determination of Fair Market Value of the Project secured by the Project and the
Management Agreement which may include unpaid fees due to the Property Manager. For purposes of
this Section 8, in the event that multiple Tenants in Common simultaneously file a partition action, such
multiple Tenants in Common shall collectively be treated as the Seller in applying the procedures set
3802198.3
forth herein to determine the Fair Market Value of the Project. Principle Equity and the Company may
assign their rights set forth in this Section 8.
8.3 Limitation on Right of Partition. Notwithstanding anything to the contrary in
Section 8.1, so long as the Initial Loan or any portion thereof is outstanding, each Tenant in Common
agrees that it will not seek or be entitled to seek and obtain a partition of all or any part of -the Project
without first obtaining the prior written consent of the Initial Lender during the term of the Initial Loan.
Accordingly, each Tenant in Common expressly waives any right it may have to partition the Project or
any part thereof, whether such rights arise under Texas law or otherwise, unless during the term of the
Initial Loan, the Initial Lender has consented in writing to such party's exercise of such rights.
9. Bankruptcy -Option.
9.1 Option. If, during the term of this Agreement, a Tenant in Common becomes
Bankrupt (as defined in Section 9.2), it shall so notify the Company in writing. After such notification or
after the Company independently becomes aware that the Tenant in Common has become Bankrupt and
the Company provides written notice of such fact to the Tenant in Common, Principle Equity, or the
Company, shall have the right, to be exercised by written notice ("Bankruptcy Call Notice") to the
Bankrupt Tenant in Common, to purchase all of the Bankrupt Tenant in Common's interest in the Project
for the Fair Market Value of the Bankrupt Tenant in Common's interest in the Project as determined
under Section 8.2. In the event the Company does not provide a Bankruptcy Call Notice within 30 days
of the Notice of Bankruptcy, the other Tenants in Common shall have the right to purchase the Bankrupt
Tenant in Common's interest in the Project for the Fair Market Value of the Bankrupt Tenant in
Common's interest in the Project as determined under Section 8.2. In the event that a simultaneous
transaction results in multiple Bankrupt Tenants in Common, such Bankrupt Tenants in Common shall
collectively be treated as the seller for purposes of the determination of the Fair Market Value of the
Project and the procedures set forth in Section 8.2. Such purchase and sale shall be closed within 30 days
of the determination of the Fair Market Value of the Project. Notwithstanding the above, if the applicable
bankruptcy court or applicable bankruptcy rules require that the fair market value of the Bankrupt Tenant
in Common's interest in the Project be determined by a valuation method other than the procedure
established in Section 8.2, the valuation method required by the court or applicable rules shall be used in
place of the procedure established in Section 8.2. The allocation of the costs and liabilities shall be
subject to the terms set forth in Section 8.2. Principle Equity and the Company may assign their rights set
forth in this Section 9.1.
9.2 Bankrupt. For purposes of this Agreement, a Tenant in Common shall be
considered Bankrupt if such Tenant in Common: (1) is unable to pay its debts as they comedue, including
any debt associated with the Project; (2) admits in writing to its inability to pay its debts as they come
due, including any debt associated with the Project; (3) makes a general assignment for the benefit of
creditors; (4) files any petition or answer seeking to adjudicate it bankrupt or insolvent; (5) seeks
liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of its
debts; (6) seeks, consents to or acquiesces in the entry of an order for relief or the appointment of a
receiver, trustee, custodian, or other similar official or for any substantial part of its property; (7) is the
subject of the entry of an order for relief or approving a petition for relief or reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future
bankruptcy, insolvency or similar statute, law or regulation or the filing of any such petition that is not
dismissed in 90 days; (8) is the subject of the entry of an order appointing a trustee, custodian, receiver or
liquidator of all or any substantial portion of its property, which order is not dismissed within 60 days or
(9) is considered bankrupt under the Loan Documents.
91s01aef 93
9.3 Right of First Refusal. If, under federal bankruptcy law, similar debtor relief
laws, or other laws affecting the Project, the option to purchase granted under this Section 9 is voided or
declared unenforceable, first Principle Equity or the Company and second, the other Tenants in Common,
shall have a right of first refusal to buy any interest in the Project of a Bankrupt Tenant in Common in the
event of any proposed transfer by a trustee, receiver, conservator, liquidator, guardian, or other transferee.
Such right of first refusal shall provide that Principle Equity or the Company or the other Tenants in
Common, as applicable, may purchase the Bankrupt Tenant in Common's interest in the Project at the
same price and on the same terns as such Project is proposed to be sold by such trustee, receiver,
conservator, liquidator, guardian or other transferee. Principle Equity and the Company may assign their
rights set forth in this Section 9.3.
10, General Provisions.
10.1 Mutuality, Reciprocity Runs With the Land. All provisions, conditions,
covenants, restrictions, obligations and agreements contained herein or in the Management Agreement are
made for the direct, mutual and reciprocal benefit of each and every part of the Project; shall be binding
upon and shall inure to the benefit of each of the Tenants in Common and their respective heirs,
executors, administrators, successors, assigns, devisees, representatives, lessees and all other persons
acquiring any undivided interest in the Project or any portion thereof whether by operation of law or any
manner whatsoever (collectively, "Successors"); shall create mutual, equitable servitudes and burdens
upon the undivided interest in the Project of each Tenant in Common in favor of the interest of every
other Tenant in Common; shall create reciprocal rights and obligations between the respective Tenants in
Common, their interests in the Project, and their Successors; and shall, as to each of the Tenants in
Common and their Successors operate as covenants running with the land, for the benefit of the other
Tenants in Common pursuant to applicable law. It is expressly agreed that each covenant contained
herein or in the Management Agreement (i) is for the benefit of and is a burden upon the undivided
interests in the Project of each of the Tenants in Common, (ii) runs with the undivided interest in the
Project of each Tenant in Common and (iii) benefits and is binding upon each Successor owner during its
ownership of any undivided interest in the Project, and each owner having any interest therein derived in
any manner through any Tenant in Common or Successor. Every person or entity who now or hereafter
owns or acquires any right, title or interest in or to any portion of the Project is and shall be conclusively.
deemed to have consented and agreed to every restriction, provision, covenant, right and limitation
contained herein or in the Management Agreement, whether or not such person or entity expressly
assumes such obligations or whether or not any reference to this Agreement or the Management
Agreement is contained in the instrument conveying such interest in the Project to such person or entity.
The Tenants in Common agree that any Successor shall become a party to this Agreement and the
Management Agreement upon acquisition of an undivided interest in the Project as if such person was a
Tenant in Common initially executing this Agreement.
10.2 Attorneys' Fees. If any arbitration, action or proceeding is instituted between all
or any of the Tenants in Common arising from or related to or with this Agreement, the Tenant in
Common or Tenants in Common prevailing in such arbitration, action or proceeding shall be entitled to
recover from the other Tenant in Common or Tenants in Common all of its or their costs of arbitration,
action or proceeding, including, without limitation, attorneys' fees and costs as fixed by the court or
arbitrator therein.
10.3 Entire Agreement. This Agreement, together with the Management Agreement,
constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof and all
prior and contemporaneous agreements, representations, negotiations and understandings of the parties
hereto, oral or written, are hereby superseded and merged herein.
3802198.3
10
10.4 Governing Law. Except as set forth in this Agreement, this Agreement shall be
governed by and construed under the internal laws of the State of Texas without regard to choice of law
rules.
10.5 Venue. Any action relating to or arising out of this Agreement shall be brought
only in a court of competent jurisdiction located in Harris County, Texas.
10.6 Modification. No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or change is or may be sought.
10.7 Notice and Payments. Any notice to be given or other document or payment to
be delivered by any party to any other party hereunder shall be addressed to the party for whom intended,
as follows:
To the Tenants in Common at:
c/o PEM University H, LLC
10303 NW Freeway, Suite 300
Houston, TX 77092
With a copy to the Tenants in Common at the addresses specified in Exhibit "A" hereto.
Any party hereto may from time to time, by written notice to the others, designate a different
address which shall be substituted for the one above specified. Unless otherwise specifically provided for
herein, all notices, payments, demands or other communications given hereunder shall be in writing and
shall be deemed to have been duly given and received (i) upon personal delivery, or (ii) as of the third
business day after mailing by United States mail, postage prepaid, addressed as set forth above, or (iii) the
immediately succeeding business day after deposit with Federal Express or other similar overnight
delivery system.
10.8 Successors and Assigns. All provisions of this Agreement shall inure to the
benefit of and shall be binding upon the successors -in -interest, assigns, and legal representatives of the
parties hereto. Any assignee of a Tenant in Common shall be considered a Tenant in Common.
10.9 Term, This Agreement shall commence as of the earlier of the date the first
Tenant in Common acquires an interest in the Project or the date of recordation and shall terminate at
such time as the Tenants in Common or their successors -in -interest or assigns no longer own the Project
as tenants -in -common. In no event shall this Agreement continue beyond December 31, 2050. The
bankruptcy, death, dissolution, liquidation, termination, incapacity or incompetency of a Tenant in
Common shall not cause the termination of this Agreement.
10.10 Waivers. No act of any Tenant in Common shall be construed to be a waiver of
any provision of this Agreement, unless such waiver is in writing and signed by the Tenant in Common
affected. Any Tenant in Common hereto may specifically waive any breach of this Agreement by any
other Tenant in Common, but no such waiver shall constitute a continuing waiver of similar or other
breaches.
10.11 Counterparts. This Agreement may be executed in counterparts, each of which,
when taken together, shall be deemed one fully executed original.
3802198.3
11
10.12 Severabilitv. If any portion of this Agreement shall become illegal, null or void
or against public policy, for any reason, or shall be held by any court of competent jurisdiction to be
illegal, null or void or against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in full force and effect to the fullest extent permissible by law.
10.13 Applicable Securities Laws. NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED THE SECURITIES OFFERED HEREBY OR PASSED UPON THE ACCURACY OR
ADEQUACY OF ANY DISCLOSURE MADE IN CONNECTION WITH THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SECURITIES
OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
10.14 Time is of the Essence. Time is of the essence of each and every provision of
this Agreement.
10.15 Limitations. At no time shall there be more than 35 Tenants in Common (as
calculated in accordance with Section 6.02 of Rev. Proc. 2002-22). Any transfer that would result in
there being more than 35 Tenants in Common shall be null and void, and the Tenant in Common's
interest in the Project that would have been transferred shall be held in trust for the economic benefit of
the purported transferor. Further, no Tenant in Common will enter into or engage in any business
activities other than those customarily performed in connection with the maintenance and repair of rental
real property.
10.16 Binding Arbitration. Any controversy between the parties hereto arising out of
or related to this Agreement or the breach thereof or an investment in the tenant in common interests in
the Project shall be settled by arbitration in Harris County, Texas, in accordance with the rules of The
American Arbitration Association, and judgment entered upon the award rendered may be enforced by
appropriate judicial action. The arbitration panel shall consist of one member, which shall be the
mediator if mediation has occurred or shall be a person agreed to by each party to the dispute within 30
days following notice by one party that he or she desires that a matter be arbitrated. If there was no
mediation and the parties are unable within such 30 day period to agree upon an arbitrator, then the panel
shall be one arbitrator selected by the Houston, Texas office of The American Arbitration Association,
which arbitrator shall be experienced in the area of real estate and limited liability companies and who
shall be knowledgeable with respect to the subject matter area of the dispute. The losing party shall bear
any fees and expenses of the arbitrator, other tribunal fees and expenses, reasonable attorneys' fees of
both parties, any costs of producing witnesses and any other reasonable costs or expenses incurred by the
losing parry or the prevailing party or such costs shall be allocated by the arbitrator. The arbitration panel
shall render a decision within 30 days following the close of presentation by the parties of their cases and
any rebuttal. The parties shall agree within 30 days following selection of the arbitrator to any prehearing
procedures or further procedures necessary for the arbitration to proceed, including interrogatories or
other discovery; provided, in any event each Tenant in Common shall be entitled to discovery in
accordance with applicable Texas law.
10.17 Third Parry Beneficiary. The Tenants in Common each agree that Principle
Equity and its successors and assigns shall be third party beneficiaries of this Agreement.
10.18 Separate Legal Parcels. Notwithstanding anything to the contrary in this
Agreement, at all times each Tenant in Common must maintain the same undivided interest in each of the
3802198.3
12
legal parcels that comprise the Project and no Tenant in Common may transfer a separate undivided
interest in any of such legal parcels.
11. Power of Attorney. Principle Equity shall at all times during the term of this Agreement
have a special and limited power of attorney as the attorney -in -fact for any Tenant in Common (i) with
respect to any action that has been approved by the Tenants in Common pursuant to this Agreement and
(ii) whose interest is to be purchased pursuant to the option rights granted in Sections 7, 8 and 9, with the
power and authority to act in the name and on behalf of each such Tenant in Common to execute,
acknowledge, and swear to in the execution, acknowledgment and filing of documents that are not
inconsistent with the provisions of this Agreement and which may include, but is not Iimited to, any
contract for purchase or sale of real estate, and any deed, deed of trust, mortgage, or other instrument of
conveyance or encumbrance, with respect to the undivided Tenant in Common interests and/or the Project
or any other instrument or document that may be required to effectuate the sale of the Project or an
interest, any lease, contract or other document required to effectuate the matter approved by the Tenants
in Common.
11.1 This power of attorney may be exercised by Principle Equity for such Tenant in
Common by the signature of Principle Equity acting as attorney -in -fact for such Tenant in Common, or
by such method as may be required or requested in connection with the recording or filing of any
instrument or other document so executed.
11.2 This power of attorney shall be irrevocable and shall survive an assignment by
the Tenant in Common of all or any portion of its interest in the Project. Furthermore, this power of
attorney shall survive the bankruptcy, death, dissolution, liquidation, termination, incapacity, lapse of
time or incompetency of the Tenant in Common.
11.3 Principle Equity shall promptly furnish to Tenant in Common a copy of any
document executed by Principle Equity pursuant to this power of attorney.
12. Special Lender Provisions.
12.1 Lender Notification. The Tenants in Common acknowledge that Initial Lender
has required as a condition of extending the Initial Loan to the Tenants in Common that the Initial Lender
shall only have to communicate with one parry (the "Lender Contact") with respect to all matters relating
to the Initial Loan. The Tenants in Common designate the Property Manager as the Lender Contact. Any
notices given by Initial Lender to Lender Contact pursuant to any document evidencing, securing or
relating to the Initial Loan shall be deemed to have been given to each of the Tenants in Common and any
notice received by Initial Lender from the Lender Contact under any document evidencing, securing or
relating to the Initial Loan may be treated by Initial Lender as having been sent by all Tenants in
Common. The designation of Property Manager as the Lender Contact shall not amend or otherwise
serve to alleviate the rights of any Tenant in Common under this Agreement.
12.2 Cross -Rights, etc. As long as the Initial Loan is outstanding, the Tenants in
Common agree that they will not take any action against each other for cross -rights, remedies or
indemnities contained in this Agreement without the written consent of Initial Lender. In addition, any
claims that any Tenant in Common may have against the others shall be subordinate to the deed of trust
securing the Loan.
12.3 Notwithstanding anything to the contrary contained in this Agreement, in no
event shall any loans among any Tenants in Common exist or be deemed to exist at any time that the
Initial Loan or any portion thereof is outstanding.
3802198.3
13
above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth
TENANTS IN COMMON:
PEM UNIVERSITY S, LP, a Delaware limited partnership
By: PEM UNIVERSITY S GP, LLC, a Delaware limited liability
company, its general partner
By: PEM UNIVERSITY M, LP, a Delaware limited partnership,
its sole member
By: PEM UNIVERSITY M GP, LLC, a Delaware limited
liability company, its general partner
By: UNIVERSITY ACQUISITIONS E, LP, a
Delaware limited partnership, its sole member
By: PRINCIPLE EQUITY MANAGEMENT, LP,
a Delaware limited partnership, its general
partner
By: PRINCIPLE EQUITY MANAGEMENT,
LLC, a Delaware limited liability company,
its general partner
By.—�i
Michael,A y, its member
By:
Ra olph A. M uay, its member
3802198.3
14
STATE OF �% )
COUNTY OF G,( f \ C 1
On Cs ('Mawbefore me, C`"110'(\ C � 1 OS Notary Public,
personally appeared Michael A. McQuay, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
GLORIA RIOS
Notary Public, State
of Texas
Signature (Seal) J My Commission Expires
July 09, 2008
STATE OF
COUNTY OF HG2c•c\i )
On �r Qh apo1) , before me, OS Notary Public,
personally appeared Randolph A. McQuay, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
.`,.�?7��a;" GLORIA
RIOS
Notary Public, State
of Texas
6M� „ My Commission Expires
Signature (Seal) July 09, 2008
3802198.3
15
PEM UNIVERSITY H, LLC, a Delaware limited
liability company
By: PRINCIPLE EQUITY MANAGEMENT, LP, a
Delaware limited partnership, its sole member
By: PRINCIPLE EQUITY MANAGEMENT,
LLC, a Delaware limited liability company, its
general partner
By:
Michael A. Mc its her
By:
dolph A. ay, its member
3802198.3
16
STATE OF Cep )
COUNTY OF
On �c�rch c� h 'dix4, before me, �1�0 L (L ` \� S Notary Public,
personally appeared Michael A. McQuay, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
STATE OF (gyp )
COUNTY OF `No�« S.S )
e r......•..
GLORIA kIOS
`�
Notary Public, State of Texas
IrF
My Commission Expires
July 09, 2008
On QTyc�oi�, oRUOtI, before me, \° ,(ti a Notary Public,
personally appeared Randolph A. McQuay, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
GLORIA
RIOS
Notary Public, State
of Texas
SMy Commission Expireslgnature (Seal) ali o July 09, 2008
3802198.3
17
EXHIBITS
Exhibit "A" Tenants in Common and Percentage Interests
Exhibit `B" Description of the Project
3802198.3
18
EXHIBIT "A"
TENANTS IN COMMON AND PERCENTAGE INTERESTS
3802198.3 `�
EXHIBIT "B"
DESCRIPTION OF THE PROJECT
3802198.3
Legal Description of the Property
Tract 1: Fee Simple
Metes and bounds description of all that certain tract or parcel of land lying and being situated in
College Station, Brazos County, Texas. Said tract being the remainder of Lot 3, Wolf Pen Plaza,
according to the plat recorded in Volume 3588, Page 47 of the Official Public Records of Brazos
County, Texas.
Said tract being more particularly described by metes and bounds as follows:
BEGINNING at a 5/8 inch iron rod set on the southwest line of George Bush Drive (70' R.O.W.)
marking the re-established northeast corner of said Lot 3;
THENCE: S 48 deg. 08' 26" E along the southwest line of George Bush Drive for a distance of
89.71 feet to a 5/8 inch iron rod set marking an angle point in said line;
THENCE: S 47 deg. 35' 46" E continuing along the southwest line of George Bush Drive for a
distance of 453.03 feet to a 5/8 inch iron rod set marking the beginning of a clockwise curve
having a radius of 25.00 feet;
THENCE: Along said curve through a central angle of 22 deg. 41; 58" for an arc distance of 9.90
feet (chord bears: S 36 deg. 14' 47" E-9.84 feet) to a 5/8 inch iron rod set on the northwest line of
Holleman Drive (60' R.O.W. at this point) marking the ending point of said curve;
THENCE: S 41 deg. 31' 31" W along the northwest line of Holleman Drive for a distance of
551.06 feet to a 5/8 inch iron rod set marking the most easterly south corner of said Lot 3 and the
east corner of Lot 2, Wolf Pen Plaza;
THENCE: Along the common line of said Lot 2 and Lot 3, Wolf Pen Plaza, for the following
calls:
N 48 deg. 25' 19" W for a distance of 130.45 feet to a cotton spindle set in asphalt marking the
north corner of said Lot 2, Wolf Pen Plaza;
S 41 deg. 34' 41" W for a distance of 178.66 feet to a point marking the west corner of said Lot 2,
Wolf Pen Plaza;
S 48 deg. 28' 34" E for a distance of 10.42 feet to a 5/8 inch iron found marking the north corner
of Lot 2, Block 3, Pooh's Park Subdivision, according the plat recorded in Volume 419, Page 39
of the Deed Records of Brazos County, Texas;
THENCE: 44 deg. 10' 08" W along the common line of said Lot 3, Wolf Pen Plaza, and said Lot
2, Pooh's Park Subdivision, for a distance of 13.47 feet to a 5/8 inch iron rod set marking the east
corner of the remainder of Lot 1, Wolf Pen Plaza;
THENCE: N 48 deg. 28' 29" W along the common line of said Lot 3 and Lot 1, Wolf Pen Plaza,
for a distance of 153.50 feet to a 5/8 inch iron rod set marking the north corner of Lot 1, Wolf Pen
Plaza;
THENCE: s 41 DEG, 34' 41" W continuing along the common line of said Lot 3 and Lot 1, Wolf
Pen Plaza, for a distance of 224.51 feet to an "X" set in concrete on the existing northeast line of
Texas Avenue (variable width R.O.W.) marking the most westerly south corner of this herein
described tract; .,
THENCE: Through said Lot 3 and along the existing northeast line of Texas Avenue, same being
the northeast line of a called 0.313 acre tract as described by a deed to the State of Texas for
right-of-way purposes recorded in Volume 4816, Page 217 of the Official Public Records of
Brazos County, Texas, for the following calls:
N 50 deg. 23' 37" W for a distance of 117.19 feet to a 5/8 inch iron rod set;
N 50 deg 22' 09" W for a distance of 163.23 feet to a 5/8 inch iron rod set;
N 50 deg 22' 24" W for a distance of 185.97 feet to a brass monument found on the southeast line
of a called 1.00 acre tract as described to Washington Chapel Church recorded in Volume 44,
page 556 of the Deed Records of Brazos County, Texas;
THENCE: Along the common line of said Lot 3, Wolf Pen Plaza, and said 1.00 acre tract for the
following calls:
N 43 deg. 09' 11" E for a distance of 179.25 feet to a 5/8 inch iron rod set;
N 43 deg. 08' 04" E for a distance of 31.90 feet to a 5/8 inch iron rod set marking the east corner
of said 1.00 acre tract and an interior west corner of said Lot 3;
N 50 deg. 19 ` 49" W for a distance of 196.47 feet to a 5/8 inch iron rod found marking the
northwest corner of said Lot 3;
THENCE: Along the northerly line of Lot 3, Wolf Pen Plaza, same being the southerly line of a
called 1.8278 acre tract dedicated to the City of College Station according to the plat of Wolf Plan
Plaza (3588/47), for the following calls:
N 74 deg. 07' 41" E for a distance of 78.09 feet to a 5/8 inch iron rod set;
N 76 deg. 50' 49" E for a distance of 100.81 feet to a point;
N 46 deg. 27' 57" E for a distance of 88.50 feet to appoint;
N 46 deg. 25' 00" E for a distance of 160.13 feet to a 5/8 inch iron rod set;
N 63 deg. 04'
45"
E for a distance of 18.16 feet to a 5/8 inch iron rod set;
N 67 deg. 58'
24"
E for a distance of 90.94 feet to a 5/8 inch iron rod set;
N 57 deg. 33'
07"
E for a distance of 11.96 feet to a point;
N 34 deg. 2 V
06"
E for a distance of 69.26 feet to a point;
S 89 deg. 34'
44"
E for distance of 28.79 feet to a point;
S 53 deg. 59'
07"
E for a distance of 44.77 feet to a point;
S 64 deg.15'
19"
E for a distance of 51.50 feet to a point;
S 79 deg. 50'
52"
E for a distance of 30.36 feet to a point;
N 87 deg. 20'
15"
E for a distance of 49.65 feet to a point;
N 77 deg. 21'
21"
E for a distance of 40.19 feet to a point;
N 55 deg. 53'
35"
E for a distance of 58.48 feet to a point;
N 41 deg. 23'
10" E for a distance of 36.78 feet to the POINT OF BEGINNING containing
15.0416 acres
of land, more or less.
Tract 2: Easement
The easement rights created under The Reciprocal Easement and Operating Agreements recorded
in Volume 3 73 5, Page 47 of the Official Records of Brazos County, Texas.
Tract 3: Easement
Cross easement for ingress and egress as described in Declaration of covenants and Restrictions
as recorded in Volume 4675, Page 164 of the Official Records of Brazos County, Texas.
FOOFIC
CASE NO.: —(*W/7
Crry OP Coux-,(; -.STATION
DATESUBMITTED*
TIME: z7(/
Haveofye.SA&Musiu fty*
STAFF:
SIGN PERMIT APPLICATION
In lieu of this application, sign permits requested
• As part of a Banner Permit shall use the BannerApplication.
• As part of a Grand Opening Sign Permit shall use the Grand Opening Sign Permit Application.
• As part of a Special Event Permit shall use the Special Event Permit Application.
TYPE OF SIGN (check all that apply):
Attached ❑ Development Sign ❑ Freestanding ❑ Other*:
*Please see the Sign Permit Checklist to assist with submittal requirements.
MINIMUM SUBMITTAL REQUIREMENTS:
[?r' $130 (Sign Permit Fee $72 and Plan Review Fee $58)
$54 Contractor Registration Fee and complete Application for Contractor Registration (if applicable). A
sign permit will not be issued without a contractor registered with the City of College Station.
❑ Application completed in full. This application form provided by the City of College Station must be used
and may not be adjusted or altered. Please attach pages if additional information is provided.
For Attached Signs:
EKOne (1) copy of all proposed and existing sign graphics.
0 One (1) copy of the sign placement elevation(s).
For Development and Freestanding Signs:
❑ One (1) copy of the site plan.
❑ One (1) copy of the sign graphic.
❑ One (1) copy of the sign placement elevation (if applicable).
❑ Consent of all property owners within building plot (if applicable).
❑ Color samples (if applicable).
06
NOTES: A sign in the Wolf Pen Creek zoning district must be approved through the Design Review Board Wolf Pen
Creek Development Review Application process before the Sign Application will be considered. A sign in
the College Station Business Center must be approved by the College Station Business Center Advisory
Review Board before the Sign Application can be approved.
Flags, Home Occupation Signs, Real Estate/Finance/Construction Signs, Subdivision Markers, and Vehicle
Signs must meet the requirements of the Unified Development Ordinance, but are not required, to receive
approvals through the application and permitting process.
Building plots with over 75 linear feet of frontage are allowed one Freestanding sign. A Sign Application will
not be approved without the consent of all property owners within a building plot, as Identified on the
development plat or approved site plan.
NAME OF PROJECT: 7L)IiA)
ADDRESS: 1 Tx J� •f C c([' l a} i r� fti
Current zoning
Present use of property
8111
Page 1 of 4
APPLICANT / PROJECT MANAGER'S INFORMATION (Primary contact for the project):
Name Signpros E-mail signprosa@yahoo.com
Street Address 1518 ambush creek
City San Antonio State texas Zip Code 78245
Phone Number 210-902-0991 Fax Number 210-592-7555
CONTRACTOR'S INFORMATION:
Name signpros E-mail signprosa@yahoo. corn
Street Address 1518 ambush creek
City san antonio State texas Zip Code 78245
Phone Number 210-902-0991 Fax Number 210-592-7555
ELECTRICIAN (if any signage included as part of this application qualifies as an electrical sign - neon gas tubing,
freestanding electrical signs, attached electrical signs, etc.) Signpros tescl 18504
DESCRIPTION OF ELECTRICAL WORK:
a dedicated circuit is provided within 6 feet will will make final connection!
ATTACHED SIGNS:
Length of the main entry facade of the building Existing tower at front of property approx. 15-17 in length
Area of proposed sign 45'x 130" L}� NIB
Br
Area of all existing attached signs
FREESTANDING SIGNS:
Length of frontage (along longer roadway if more than one) 1 ;
Distance from the curb to the front edge of the proposed sign
Height Area k��_,
If there is more than onepropertyowner within the bulUtfri g_ ,lot all owners must s gn the application acknowledging that one
freestanding sign is permitted per building plot.
DEVELOPMENT SIGNS:
Classification of adjacent ROW 1 '�
r;
Distance from the curb to the front edge of the proposed sign ;!
Height Area _
The applicant has prepared this application and certifies that the facts stated
and correct.
Sig`natury and tit16 Date
and exhibits attached hereto are true
i"_L- Icl— I
8!11 Page 2 of 4
r?
"T" in Twin:17.634"tall
"L" in Liquors:13.158"tall
Grapes overa11:40.12"x21"
Circles making grapes are 5.5"
( rry OP COLLEGti STATION
Horne of R=A&Af Uuiaenhy°
FOR OFFICE
CASE NO.:
DATE SUBMITTED:
TIME: �{
STAFF: K/\
SIGN PERMIT APPLICATION
In lieu of this application, sign permits requested
• As part of a Banner Permit shall use the Banner Application.
• As part of a Grand Opening Sign Permit shall use the Grand Opening Sign Permit Application.
• As part of a Special Event Permit shall use the Special Event Permit Application.
TYPE OF SIGN (check all that apply):
W Attached ❑ Development Sign ❑ Freestanding ❑ Other*:
*Please see the Sign Permit Checklist to assist with submittal requirements.
MINIMUM SUBMITTAL REQUIREMENTS:
$130 (Sign Permit Fee $72 and Plan Review Fee $58)
$54 Contractor Registration Fee and complete Application for Contractor Registration (if applicable). A
sign permit will not be issued without a contractor registered with the City of College Station.
❑ Application completed in full. This application form provided by the City of College Station must be used
and may not be adjusted or altered. Please attach pages if additional information is provided.
For Attached Signs:
[a''One (1) copy of all proposed'and existing sign graphics.
[One (1) copy of the sign placement elevation(s).
For Development and Freestanding Signs:
❑ One (1) copy of the site plan.
❑ One (1) copy of the sign graphic.
❑ One (1) copy of the sign placement elevation (if applicable).
❑ Consent of all property owners within building plot (if applicable).
❑ Color samples (if applicable).
NOTES: A sign in the Wolf Pen Creek zoning district must be approved through the Design Review Board Wolf Pen
Creek Development Review Application process before the Sign Application will be considered. A sign in
the College Station Business Center must be approved by the College Station Business Center Advisory
Review Board before the Sign Application can be approved.
Flags, Home Occupation Signs, Real Estate/Finance/Construction Signs, Subdivision Markers, and Vehicle
Signs must meet the requirements of the Unified Development Ordinance, but are not required to receive
approvals through the application and permitting process.
Building plots with over 75 linear feet of frontage are allowed one Freestanding sign. A Sign Application will
not be approved without the consent of all property pwners within a building plot, as identified on the
development plat or approved site plan.
NAME OF PROJECT: I1111iA% 11,gyy%�-S
ADDRESS: ( tN' I
Current zoning
Present use of property tq bw
8I11 _ Page 1 of 4
APPLICANT / PROJECT MANAGER'S INFORMATION (Primary contact for the project):
Name E-mail $iGW'D'fcIAo0,001
Street Address 14S- Ili Q„v�.by-; �
City S A Q -A� A .. i o V State C" +( Zip Code
Phone Number Zi b -('A 0 Z— CACA 1 Fax Number 'L1 0i
CONTRACTOR'S INFORMATION
Name w)pV,n'S E-mail W,(LVV,
Street Address 1 S 1 ed y!s 4, C J e V L
City `SAvw AvnA0P—ia State Zip Code 7�Zu)S
Phone Number - t i7 -- 0% 0 Z— 0(1(y l Fax Number Z-i 0 -- Cf7.- 7 S5
ELECTRICIAN (if any signage included as part of this application qualifies as an electrical sign - neon gas tubing,
freestanding electrical signs, attached electrical signs, etc.) �j Y e 49 T IF C L-.# (ed`J
DESCRIPTION OF ELECTRICAL WORK:
L,5e w1\1 Vh,Ake- •hiwC
& leC}1 ✓G 1 inD0 K-J\o F)Y'CV
I0CtAAibv'J .
ATTACHED SIGNS:
Length of the main entry facade of the building _
Area of proposed sign cd `5'' )( Vnro—
Area of all existing attached signs pi 0 1-1
FREESTANDING SIGNS:
44 Iziv C.ivW-1'S
UW M.(Af
Length of frontage (along longer roadway if more than one)
Distance from the curb to the front edge of the proposed sign
Height 4/'� . ?1%2. Area
If there is more than one property owner within the building plot. all owners must sign the application acknowledging that one
freestanding sign is permitted per building plot.
DEVELOPMENT SIGNS:
Classification of adjacent R(
Distance from the curb to th
Height VnI
The applicant has preparef
and correct.
Signs ire and f
S471i
3� X 004&7 _a5--07
L✓
17,5
7erein and exhibits attached hereto are true
8/11 Page 2 of 4
-
g )
)
�� ®
§
I
\
/
Nov 22 11 04:56p
p.i
CITY OF COr1.RCE SrrerroN
novae ofTaw ACW lh h.ity'
SIGN PERMIT APPLICATI
GRAND OPENING SIGNS
MINIMUM SUBMITTAL REQUIREMENTS:
CASENO.: t % f% f
DAT\ SUBMITTED:
TIME: 4A,
STAFF:
130 (Sign Permit Fee $72 and Plan Review Fee $58).
[� $64 Contractor Registration Fee and complete Application for Contractor Registration (if applicable). lA► sign
,Permit will not be issued without a contractor registered with the City of College Station. I a.lfe4q
B Appllcation completed in full. This application form provided by the City of College Station must be used
B Od may not be adjusted or altered. Please attach pages if additional information is provided.
ne (1) copy of sign graphic.
One (1) copy of site plan.
(� The attached Grand Opening Sign Checklist with all items addressed.
Propose o-week splay period
(Must be within 60 days of granting the Initial CO, change In the use, or a project Manager Apt
change in the name of the business).
Please indicate how you would like to receive your Grand Opening Sign Permit:-IOril Pick Up
NAME OF PROJECT
ADDRESS 1`1 l5 I `C }I-Je• LO bt �1e -=: -Ilal\
Description of all Items proposed (e.g., flags, banners, balloons, wind -driven devices, etc.):
Af)(J ooef) — Cjrtn()e(
APPLICANT I PROJECT MANAGER'S INFORMATION (Primary contact for the project):
Name bQ191 OJ
G E-mail r�(, rsla,�s Ga�i
Street Address I�, 10 raq�
City "7F/I1-11 S n. State Zip Code
Phone Number 51 .)- - +14 - 9 5 91 Fax Number S I J- - S' 3 %- 17/ 6
CONTRACTOR'S INFORMATION:
Name 1 )&.0
Street Address 1 (% 0 i-
Phone Number 5) l ` 10-0
Current zoning l:.
Present use of property i CAO I �— O O>
The applicant has prepared this application and corhfies
and -correct, f, I
Signature and title
iono
cc V
;n
S
Fax Number
facts stated herein and exhibits attached hereto are true
1�YY�n
Date
Page 1 of 2
Nov 22 11 05:1
P. 1
GRAND OPENING SIGN PERMIT CHECKLIST
PLEASE NOTE: 1) Sign must be attached to face of building
2) Grand Opening Signs shall be allowed for a maximum 14-day period per permit.
The following are needed in all districts for a Grand Opening Sign Permit:
1. r— Sign Graphics - Be sure to include to engineering scale:r—
❑ Square footage of the sign. Y
Pictures or graphics that show where the sign will be placed.
�. Shall be mounted parallel to the face of the building
• Shall not be cantilevered away from the structure.
• Shall not extend more than one foot from any exterior building face, mansard, awning, or canopy.
• Shall not obstruct any window, door, stairway, or other opening intended for ingress or for needed
ventilation or light.
Shall not be attached to any tree, fence, or public utility pole.
2. ❑ Site Plan - Be sure to include to engineering scale:
❑ Scale of all grand opening signs (includes flags, balloons, etc.).
❑ Distance from the ROW to the proposed signs (minimum often (10) feet).
❑ Location of all grand opening signs.
10110 1': J Print Form 9 Page 2 of
Nov 22 11 04:57p
P. I
40%
Nov 22 11 06:13p p.1
-- 707'
Nov 10 11 05:40p P•1
0#41X"
FOR OFFICE n LONIY
CASE NO.. I lJ
DATE SUBMIT�T`ED:
C_IIYr v CoI.I.b.GI:S'r.el'Ic,' 'TIME:
STAFF YJIL.
Bl1RINER PERMIT APPLICATION �
In lroa of this application. banners rnqueslod
a As part of a Grand Opening Slgn Permit shot/ use the Grand Opening Sign Permit Application. -
o As part of a Special Event Permit shall use the Special Event Ponait Application.
/ MINIMUM SUBMITTAL REQUIREMENTS:
u $2DO Banner Permit Fee. Fee does not apply to non-profit organizations (proof of>•01(c)3 status is
-/ required). but they are required to register as Contractors and pay appropriate fees.
�J $54 Contractor Registration Fee and complete application for Contractor Registration (if applicable). A
sign permit will not be issued without a contractor registered with the City of College Station.
[] Application completed In full. This application fm'n1 provided by the City of College Station must be used
and may not be adjusted or altered. Please attach pages if additional information is provided.
[]r One (1) copy of the banner graphic.
F,�'-One (1) copy of the banner placement elevation.
Proposed two -week display period J�r'.�I/v,r� �U Project Manager
-
NAME OF PROJECT
ADDRESS __/i✓"__%^_-.i.i ii11z_..--.__�__�r1J--,
APPLICANT / PROJECT MANAGER'S INFORMATION (Primary contact for the project): l
Name _ .7_.741/.>JE-mail p•�rJa� C/ C
Street Address Y eel J ����� r
Cityj/i!/ _ State _ _ Zip Code
Phone Number%,2--,22�,5 ��% _ _ . Fax Number/21
CONTRACTOR'S INFORMATION
Name _ 7 jjJ �C':z�G �. E-mail .S!/L �tS✓iLJ
street Address _« . Jn2 r.__r.7-P:a/ �✓, _�
City _ /may-/�i' State ,;6Zip Code
Phone Number fax Number
Current zoning
Present use of propertylG
Distance of banner from ROW
Banner dimensions '� O
The maxinuan allowed area of your banner cannot exceed 36 square feet.
The applicant Iles prepared this applcation and codifies that Ibo facts stated heroin and exhibits attached hereto are tale
and correct.
Signature and title Date ----7—
taAe
Papa 1 of 2