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EXHIBIT
10.10
PROPERTY MANAGEMENT
TERMINATION AGREEMENT
This Property Management
Termination Agreement (this “Agreement”) is made as of
August 6, 2007, between YSI Management LLC, a Delaware limited
liability company (“YSI”), U-Store-It Trust, a Maryland
real estate investment trust (the “REIT”), and Rising
Tide Development, LLC, a Delaware limited liability company
(“Rising Tide”).
R E C I T A L
S
WHEREAS, YSI currently serves
as the property manager to fourteen (14) of the fifteen
(15) of the properties owned (or to be owned) by Rising Tide
that are set forth on Exhibit A (each a
“Property” and collectively “Properties”)
pursuant to a Property Management Agreement, dated October 27,
2004 (the “Property Management Agreement”), with the
Property listed as #15 on Exhibit A being the only Property
not managed by YSI as the Property is undeveloped;
WHEREAS, YSI is a wholly
owned subsidiary of U-Store-It, L.P., a Delaware limited
partnership (“USI”), the general partner of which is
the REIT;
WHEREAS, YSI and Rising Tide
each desire to terminate various business relationships and
agreements, including those in the Property Management Agreement
(except as otherwise provided herein);
WHEREAS, contemporaneously
with the execution of this Agreement, USI and Rising Tide have
entered into that certain Purchase and Sale Agreement by and
between USI and Rising Tide dated as of the date hereof (the
“2007 Acquired Properties Purchase Agreement”) whereby
USI is purchasing, as of the Effective Date (as defined in
Section 7.10), all of the Properties listed on Exhibit
A , with the exception of the Property listed as #15 on
Exhibit A ;
WHEREAS, contemporaneously
with the execution of this Agreement, Rising Tide has entered into
that certain Marketing and Ancillary Services Amendment and
Termination Agreement (the “Marketing Termination
Agreement”) with U-Store-It Mini Warehouse Co.
(“Service Provider”) and that certain Option
Termination Agreement (the “Option Termination
Agreement”) with USI, L.P.;
WHEREAS, it is expressly
understood that all terms not expressly defined in this Agreement
shall have the definitions set forth in the Property Management
Agreement; and
WHEREAS, the Board of
Trustees of the REIT and the Corporate Governance and Nomination
Committee of the Board of Trustees of the REIT have duly authorized
and approved this Agreement.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and
conditions set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I –
TERMINATION OF THE PROPERTY MANAGEMENT
AGREEMENT
1.1 Termination . The
Property Management Agreement, as amended, shall be terminated,
effective as of the Effective Date, including Section 2.3 of
the Property Management Agreement that despite its express terms
shall be of no force and effect as of the Effective Date. As of the
Effective Date of this Agreement, YSI shall have no further
obligations to manage the Properties and Rising Tide hereby
releases YSI from such obligations to manage the Properties after
the Effective Date, or obligations of any nature pursuant to the
Property Management Agreement, except as otherwise provided
herein.
ARTICLE II – PAYMENT
OF OUTSTANDING RECEIPTS; MANAGEMENT
FEE; REIMBURSABLE COSTS;
RECONCILIATION
2.1 Effective Date
Payments . On the Effective Date, YSI shall be entitled to
receive any Management Fee, not yet received by YSI, and to be
reimbursed for any costs incurred by YSI in the performance of its
duties under the Property Management Agreement that have not yet
been reimbursed and are reimbursable in accordance with
Section 3.3 of the Property Management Agreement
(collectively, “Reimbursable Costs”), in any case for
the period prior to the Effective Date. To calculate the Management
Fee for any partial month prior to the Effective Date, if the
management fee generated by a specific Property’s Gross
Receipts in the last full calendar month before the Effective Date
produced the minimum $1,500 fee, the Management Fee payable will be
$1,500 pro rated based on the number of days in the partial month.
If the Management Fee generated by a specific Property’s
Gross Receipts in the last full calendar month before the Effective
Date was calculated at 5.35% of the sales, the fee payable will be
5.35% of the Gross Receipts in the partial month.
YSI acknowledges and agrees
that it has no pending requests for capital improvements, and the
reimbursement for Reimbursable Costs shall not include any expenses
for capital improvements. The parties acknowledge that all invoices
for Reimbursable Costs will not have been received by YSI and
Rising Tide by the Effective Date. Rising Tide will be reimbursed
for pre-paid yellow page advertising and any other prepaid expenses
(other than real and personal property taxes which shall be
prorated in accordance with the Section 10.2 of the 2007
Acquired Properties Purchase Agreement). Such advertising and other
prepaid expenses shall be prorated as of the Effective Date, with
Rising Tide responsible for all such costs preceding the Effective
Date (therefore, such costs will constitute Reimbursable Costs) and
YSI responsible for all such costs on and after the Effective Date.
In the event any insurance related to the period prior to the
Effective Date is charged to Rising Tide, YSI will provide
documentation supporting its calculation of the insurance
expense.
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On the Effective Date, Rising
Tide shall be entitled to retain or receive from Purchaser all
monies received by YSI for or on behalf of Rising Tide in
connection with the operation and management of the Properties
prior to the Effective Date, plus 75% of the accounts receivable
related to the Properties that are 0-30 days old as of the
Effective Date and 15% of the accounts receivable related to the
Properties that are 31-60 days old as of the Effective Date
(collectively, the “Rising Tide Receivables”), less
only the Management Fee and Reimbursable Costs and exclusive of
tenant security deposits which shall be retained by YSI in
accordance with Section 10.5 of the 2007 Acquired Properties
Purchase Agreement. On or promptly after the Effective Date, YSI
shall provide to Rising Tide a true and correct listing of such
accounts receivable as of the Effective Date as set forth on
YSI’s software management system. To calculate the amount of
tenant payments Rising Tide shall be entitled to receive or retain
for any partial month, any tenant payments received for that month
shall be pro rated based on the number of days in the month prior
to the Effective Date with Rising Tide receiving or retaining all
such payments related to the period preceding the Effective Date
and YSI receiving or retaining all such payments for the period on
and after the Effective Date.
At least three business days
prior to the Effective Date, YSI shall provide, in writing, to
Rising Tide a good faith estimate of the Management Fee and
Reimbursable Costs payable by Rising Tide to YSI on the Effective
Date. On the Effective Date, YSI shall establish an interest
bearing escrow account (the “Escrow Account”) in the
amount of $300,000 to be used for the payment of such Management
Fee and Reimbursable Costs. The escrow account shall be funded from
amounts otherwise payable to Rising Tide as of the Effective Date
in accordance with this Section 2.1. Every two weeks, or such
other time period as the parties may agree in writing, after the
Effective Date up to the 60 th day
after the Effective Date, YSI shall submit to Rising Tide all
written invoices received during such time period that constitute
Reimbursable Costs not yet paid and Rising Tide shall authorize YSI
to withdraw from the Escrow Account the amount constituting
Reimbursable Costs not yet paid. At the end of the 60-day period,
Rising Tide shall be entitled to all amounts, including interest,
remaining in the Escrow Period, and the remaining amount in the
escrow account shall be paid to Rising Tide no later than the 65
th
day after the Effective
Date.
In no event shall Rising Tide
be entitled to receive or retain any of the amounts set forth, as
of the Effective Date, on the spreadsheet produced from
Purchaser’s software management system and entitled
“Accrued Balance Sheet Detail” under the column
“ppd Rent Balance,” a true and correct copy of which
spreadsheet shall be provided by Purchaser to Seller on or promptly
after the Effective Date.
2.2 Reconciliation .
Not later than 60 days after the Effective Date, YSI shall deliver
to Rising Tide a written, final accounting with respect to
(a) the 2007
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operations of the Properties
prior to the Effective Date, including, among other matters, a
detail of gross receipts, all actual (vs. budgeted) expenses in
respect of or on behalf of the Properties, all Reimbursable Costs
and all Management Fees and (b) a reconciliation showing all
payments previously made in accordance with Section 2.1 and
required to be made, but not yet made, in accordance with Sections
2.1 (the “Proposed Final Accounting”); provided that
real and personal property taxes and tenant security deposits shall
be prorated and governed by Sections 10.2 and 10.5, respectively,
of the 2007 Acquired Properties Purchase Agreement. For purposes of
the reconciliation set forth in the Proposed Final Accounting,
Rising Tide shall not be entitled to any collections on the Rising
Tide Receivables even if such collections exceed 75% of the
accounts receivable related to the Properties that are 0-30 days
old as of the Effective Date and 15% of the accounts receivable
related to the Properties that are 31-60 days old as of the
Effective Date, and YSI shall only be entitled to (i) a
Management Fee on rent, late fees, parking or other fees and
charges that were due and payable by any tenant prior to the
Effective Date that are actually received by the Effective Date or
included in the Rising Tide Receivables and (ii) Reimbursable
Costs for which a written invoice is actually received by YSI by
the 60 th
day after the Effective Date.
YSI shall indemnify and hold Rising Tide harmless with respect to
any invoice received by YSI after the 60 th day after the Effective Date. The
Proposed Final Accounting and the reconciliation set forth therein
shall be compiled in accordance with the methodology set forth in
Section 2.1 hereof and
Section 2.2.
Rising Tide shall use all
reasonable efforts to review the Proposed Final Accounting, within
30 days of its receipt of the Proposed Final Accounting. Rising
Tide and its independent accountants shall be afforded, at Rising
Tide’s expense and without delay by YSI, access to any work
papers prepared by YSI or its independent accountants in connection
with the Proposed Final Accounting and all books and records for
the Properties, including service contracts (the “Service
Contracts”), invoices actually received and tenant leases
related to any of the Properties. The Proposed Final Accounting
shall become final and binding on Rising Tide and YSI unless Rising
Tide gives written notice to YSI of its disagreement (a
“Notice of Disagreement”) within such 30-day period. If
no Notice of Disagreement is delivered, the applicable party shall
pay to the other party the amount set forth in the reconciliation
contained in the Proposed Final Accounting. Such amount shall be
paid within 5 days of the expiration of such-30 day
period.
Any such Notice of
Disagreement shall specify in reasonable detail the nature of any
disagreement so asserted. For a period of 30 days following
YSI’s receipt of a Notice of Disagreement, Rising Tide and
YSI shall attempt to resolve any differences that they may have
with respect to any matter specified in the Notice of Disagreement.
If, at the end of such 30-day period, YSI and Rising Tide have
failed to reach written agreement with respect to all such matters,
then YSI and Rising Tide shall promptly submit all such matters as
specified in the Notice of Disagreement, as to which such written
agreement has not been reached, to the national transaction
services office of Grant Thornton LLP (the
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“Arbitrating Accountant”)
for review. YSI and Rising Tide shall each submit a written
statement of position to the Arbitrating Accountant concerning the
calculation of disputed items and shall cause the Arbitrating
Acc
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