EXHIBIT 10.50
DEVELOPMENT AGREEMENT
BETWEEN ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
AND
ADEVCO CORPORATION
DEVELOPMENT AGREEMENT
BETWEEN
▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
Owner
AND
ADEVCO CORPORATION,
Manager
March ___, 1999
TABLE OF CONTENTS
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Page
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ARTICLE 1................................................................................................. 1
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ARTICLE 2................................................................................................. 4
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2.1 Engagement.................................................................................... 4
2.2 Relationship.................................................................................. 4
ARTICLE 3................................................................................................. 4
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ARTICLE 4................................................................................................. 5
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4.1 General Responsibility........................................................................ 5
4.2 Development Functions......................................................................... 5
4.3 Completion.................................................................................... 9
4.4 Employees..................................................................................... 9
4.5 Manager's Costs............................................................................... 9
ARTICLE 5................................................................................................. 10
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5.1 Implementation of Development Budget.......................................................... 10
5.2 Revision of Development Budget................................................................ 10
5.3 Emergencies................................................................................... 10
5.4 Reduction in Fees............................................................................. 10
ARTICLE 6................................................................................................. 11
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6.1 General Authority............................................................................. 11
6.2 Execution of Documents and Agreements......................................................... 12
ARTICLE 7................................................................................................. 12
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7.1 Books of Account.............................................................................. 12
7.2 Monthly Reports............................................................................... 12
7.3 Construction Draw Reports..................................................................... 13
7.4 Annual Development and Financial Statements................................................... 13
7.5 Examination of Books and Records.............................................................. 14
ARTICLE 8................................................................................................. 14
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8.1 Separate Accounts............................................................................. 14
8.2 The Owner's Duty to Provide Funds............................................................. 14
8.3 Investment of Owner's Funds................................................................... 15
ARTICLE 9................................................................................................. 15
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9.1 Standard of Care; Manager's Liability......................................................... 15
9.2 Indemnity of Owner............................................................................ 15
9.3 Indemnity of Manager.......................................................................... 15
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9.4 Survival of Indemnities.................................................................... 16
9.5 No Obligation to Third Parties............................................................. 16
9.6 Nature of the Manager's Duties and Responsibilities........................................ 16
9.7 Ownership of Information and Materials..................................................... 16
ARTICLE 10................................................................................................ 17
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10.1 Insurance Requirements..................................................................... 17
10.2 Owner's Insurance Primary Coverage......................................................... 17
10.3 Waiver of Subrogation...................................................................... 17
ARTICLE 11................................................................................................ 17
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11.1 Fees - General............................................................................. 17
11.2 Development Fee............................................................................ 17
11.3 Reimbursement of Out-of-Pocket Costs....................................................... 18
11.4 Disbursement to the Manager................................................................ 18
ARTICLE 12................................................................................................ 18
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ARTICLE 13................................................................................................ 18
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13.1 Reimbursement of Advances.................................................................. 18
13.2 Reimbursement of Costs and Expenses........................................................ 18
ARTICLE 14................................................................................................ 19
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14.1 Default by Manager......................................................................... 19
14.2 Additional Terminating Event............................................................... 20
14.3 Default by Owner........................................................................... 20
14.4 Obligation for Fees Upon Termination....................................................... 20
14.5 Actions Upon Termination................................................................... 20
ARTICLE 15................................................................................................ 21
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ARTICLE 16................................................................................................ 21
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ARTICLE 17................................................................................................ 21
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17.1 Notices 21
17.2 Modifications.............................................................................. 22
17.3 Binding Effect............................................................................. 22
17.4 Duplicate Originals........................................................................ 22
17.5 Construction............................................................................... 22
17.6 Entire Agreement........................................................................... 23
17.7 Assignment................................................................................. 23
17.8 Authorized Representatives................................................................. 23
17.9 Terminology................................................................................ 23
17.10 Time of Essence............................................................................ 23
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EXHIBITS:
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Exhibit "A" Description or Site Plan of Land
Exhibit "B" Development Budget
Exhibit "C" Insurance Requirements
Exhibit "D" Reimbursable Expenditures Relating to Project
Exhibit "E" Form of Estoppel Certificate
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DEVELOPMENT AGREEMENT
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THIS AGREEMENT, made and entered into this 31st day of March, 1999, by and
between ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
(hereinafter referred to as the "Owner"), and ADEVCO CORPORATION, a Georgia
corporation (hereinafter referred to as the "Manager").
W I T N E S S E T H:
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WHEREAS, the Owner owns or has the contractual right to acquire that
certain parcel of land located in the City of Lake Forest, Orange County,
California, on which the Owner proposes to develop and construct an office
building with related parking, landscaping and other site work pursuant to plans
and specifications prepared and to be prepared by ▇▇▇▇ & ▇▇▇▇▇▇▇ Architects,
Inc.; and
WHEREAS, the Owner desires to engage the Manager as an independent
contractor, upon the terms and conditions set forth herein, to supervise and to
manage the development and construction of such building and other improvements;
and
WHEREAS, the Manager desires to perform such services for the Owner in
consideration of the compensation set forth herein.
NOW, THEREFORE, for and in consideration of the premises, the sum of Ten
Dollars ($10.00) in hand paid by each party to the other, and the mutual
promises, obligations and agreements contained herein, the Owner and the
Manager, intending to be, and being, legally bound, do hereby agree as follows:
ARTICLE 1
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DEFINITIONS
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For purposes of this Agreement, each of the following terms shall, when
used herein with an initial capital letter, have the meaning hereinbelow set
forth.
Agreement. The term "Agreement" means this Development Agreement, together
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with all amendments hereto and all exhibits attached hereto.
Architect. The term "Architect" means the architectural firm of ▇▇▇▇ &
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▇▇▇▇▇▇▇ Architects, Inc., and any other firm employed by the Owner as an
architect with respect to the Project.
Architect's Agreement. The term "Architect's Agreement" means the
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agreement(s) between the Owner and the Architect under which the Architect has
been or shall be engaged to prepare architectural designs, plans, drawings and
specifications for the Project and to render
other services in connection with the design and construction of the Project.
The Architect's Agreement is incorporated herein by this reference.
Building. The term "Building" means a first-class, single tenant, two-
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story office building, containing approximately 150,000 rentable square feet,
which the Owner intends to develop and construct upon the Land.
Completion Date. The term "Completion Date" means the first day on which
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all of the following have occurred: (i) the construction and equipping of the
Project has been completed in accordance with Architect's plans and
specifications (inclusive of landscaping plans, to the extent that landscaping
can feasibly be installed due to the season), as evidenced by a certificate to
such effect from the Architect, (ii) the Tenant Improvements for the space in
the Building to be occupied by Tenant have been completed in accordance with the
working drawings and specifications for such space, as evidenced by a
certificate to such effect from the Architect, (iii) permanent certificates of
occupancy or their equivalent have been issued by the appropriate governmental
authority with respect to the base building and with respect to the space in the
Building to be occupied by Tenant, (iv) the term of the Lease has commenced, and
(v) Tenant has executed and delivered to the "Landlord" under the Lease an
estoppel certificate substantially in the form attached hereto as Exhibit "E"
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and by reference made a part hereof.
Construction Agreement. The term "Construction Agreement" means,
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collectively, the construction contract between the Owner and the Contractor
with respect to the Project and such other construction or employment agreements
as may be hereafter entered into by the Owner and a general contractor or
special purpose contractor with respect to the performance of work or the
providing of services to the Project. The Construction Agreement is incorporated
herein by this reference.
Contractor. The term "Contractor" means, collectively, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
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General Contractors and all other firms employed by the Owner as a general
contractor or as a special purpose contractor with respect to the Project; and
singly any such general or special purpose contractor.
Development Budget. The term "Development Budget" means the budget, a copy
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of which is attached hereto and made a part hereof as Exhibit "B", which sets
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forth the Manager's best estimate of all expenses to be incurred with respect to
the acquisition of the Land, the planning, design, development, construction and
completion of the Project.
Development Fee. The term "Development Fee" means the fee to be paid to
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the Manager by the Owner as provided in Section 11.2 hereof.
Development Functions. The term "Development Functions" means those
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functions of the Manager set forth in Section 4.2 of this Agreement.
Development Period. The term "Development Period" means the period
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commencing on the date of this Agreement and terminating on the date which is
three (3) months after the Completion Date.
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Event of Default. The term "Event of Default" means any one or more of the
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events described in Section 14.1 of this Agreement.
▇▇▇▇▇▇▇▇▇▇. The term "▇▇▇▇▇▇▇▇▇▇" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, an individual
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residing in ▇▇▇▇ County, Georgia.
Land. The term "Land" means that certain parcel of land located in Pacific
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Commercentre Business Park in Lake Forest, California, as more particularly
shown or described on Exhibit "A" attached hereto and by this reference made a
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part hereof.
Lease. The term "Lease" means the Lease between Owner and Tenant dated as
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of February 18, 1999, with respect to leasable space in the Building.
Manager. The term "Manager" means Adevco Corporation, a Georgia
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corporation.
Monthly Report. The term "Monthly Report" means the report to be prepared
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by the Manager and submitted to the Owner on a monthly basis as provided in
Section 7.2 hereof.
Owner. The term "Owner" means ▇▇▇▇▇ Operating Partnership, L.P., a
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Delaware limited partnership, or its assigns.
Project. The term "Project" means the Land, the Building, the Site
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Improvements, and the Tenant Improvements, collectively.
Site Improvements. The term "Site Improvements" means the surface level
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parking facilities, sufficient to accommodate approximately 600 automobiles, any
and all on and off-site road improvements, walkways, complete utilities and
drainage systems, landscaping work, exterior lighting, ground-mounted signs and
other site improvements which the Owner intends to develop and construct upon
the Land.
Tenant. The term means Matsushita Avionics Systems Corporation, a Delaware
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corporation.
Tenant Improvements. The term "Tenant Improvements" means all improvements
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to be constructed or installed by the "Landlord" on or within the Project for
use or operation by Tenant under or pursuant to the Lease.
Tenant Improvements Completion Date. The term "Tenant Improvements
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Completion Date" means with respect to the Tenant Improvements for Tenant, the
first day in which the Tenant Improvements in Tenant's space have been completed
in accordance with the plans and specifications for such Tenant Improvements,
all necessary certificates of occupancy or their equivalent have been issued by
the applicable governmental authority with respect to such space, and Tenant has
accepted its premises (whether or not it has taken possession of its space) as
evidenced by a customary estoppel certificate executed by Tenant.
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ARTICLE 2
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ENGAGEMENT OF THE MANAGER
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2.1 Engagement. The Owner hereby engages the Manager as the exclusive
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development manager of the Project to supervise, to manage, and to coordinate
the planning, design, construction, and completion of the Project, all in
accordance with the terms, conditions and limitations herein set forth. The
Manager hereby accepts such engagement and hereby agrees to diligently use its
best efforts in the performance of its duties and the Development Functions
hereunder, which performance in all respects and at all times shall be carried
out to the same extent and with the same degree of care and quality as the
Manager would exercise in the conduct of its own affairs if the Manager were the
owner of the Project. The Manager agrees to apply prudent and reasonable
business practices in the performance of its duties hereunder.
2.2 Relationship. With respect to the Owner, the Manager shall at all
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times be an independent contractor. No provision hereof shall be construed to
constitute the Manager or any of its officers or employees as an employee or
employees of the Owner nor shall any provision of this Agreement be construed as
creating a partnership or joint venture between the Manager and the Owner.
Neither the Owner nor the Manager shall have the power to bind the other party
except pursuant to the terms of this Agreement. The Manager acknowledges and
agrees that it shall act as a fiduciary hereunder with respect to the Owner and
that, with respect to all of the services to be rendered by the Manager to the
Owner pursuant to this Agreement, the Manager shall have the duty to act at all
times in the best interests of the Owner in rendering such services. In the
event the Owner disapproves of any of the general policies and procedures of the
Manager with respect to the Project and shall have so notified the Manager, the
Manager shall conform its general policies and procedures with respect to the
Project to those requested by the Owner insofar as such policies may be
consistent with the terms and provisions of this Agreement.
ARTICLE 3
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TERM OF AGREEMENT
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The engagement of the Manager hereunder shall commence on the date on which
this Agreement is executed and shall end on the date which is three (3) months
from and after the Completion Date; provided, however, if any remedial work to
be performed by the Contractor following the completion of the Project has not
been completed, the term of this Agreement shall be extended until the date on
which any remedial work required to be performed by the Contractor following
completion of the Project shall be so performed and accepted by the Owner.
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ARTICLE 4
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RESPONSIBILITIES OF THE MANAGER
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4.1 General Responsibility. The Manager's general responsibility
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hereunder as the Owner's development manager shall be to manage, to supervise,
and to coordinate the planning, design, construction, and completion of the
Project and the Tenant Improvements.
4.2 Development Functions. In discharging its general responsibility
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hereunder, the Manager shall perform and discharge the following specific
responsibilities with respect to the Project (herein collectively referred to as
the "Development Functions"):
4.2.1 The Manager shall negotiate and submit to the Owner, for the
Owner's approval and execution, the Architect's Agreement and the
Construction Agreement.
4.2.2 The Manager, in the name of, and on behalf of, the Owner, shall
maintain and continue the engagement of ▇▇▇▇ & ▇▇▇▇▇▇▇ Architects, Inc., as
the Architect, and ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ General Contractors, as a
Contractor, for the compensation and on the terms provided for in the
Architect's Agreement and the Construction Agreement, respectively; and the
Manager shall supervise, administer and coordinate the performance of all
work done by the Architect and the Contractor. The Manager shall negotiate,
on terms consistent with and within the limitations of the Development
Budget, and submit to the Owner for the Owner's approval, contracts with
such other design and engineering professionals and consultants as the
Manager deems appropriate for the design and construction of the Project.
Subject to the provisions of Section 5.2 hereof, the employment of such
other design and engineering professionals on terms not consistent with and
within the limitations of the Development Budget shall be only at the
direction of the Owner.
4.2.3 The Manager shall coordinate the acquisition by the Owner of
the Land.
4.2.4 The Manager shall implement the Development Budget as provided
herein.
4.2.5 In implementing the Development Budget and in otherwise
discharging its duties and responsibilities hereunder, the Manager shall
negotiate with, and submit to the Owner (for execution by the Owner)
contracts with, supervise the performance of, and review and approve or
disapprove applications for payment of the fees, charges, and expenses of,
such architects, engineers, planners, designers, consultants, general
contractors, subcontractors, vendors, and other design and construction
professionals, consultants, and suppliers as the Manager deems necessary or
appropriate to develop the Project in accordance with and subject to the
limitations of the Development Budget. Such fees, charges and expenses
shall be borne by the Owner as contemplated in the Development Budget.
Subject to the provisions of Section 5.2 hereof, the employment,
supervision and payment of such additional architects, engineers, planners,
designers, consultants, general contractors, subcontractors, vendors, and
other design and construction professionals, consultants, and suppliers on
terms not consistent with or
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within the limitations of the Development Budget shall be only at the
direction of the Owner.
4.2.6 The Manager shall arrange for a preliminary site plan to be
prepared showing the location within the Land of the Building and the Site
Improvements and shall submit such site plan to the Owner for approval by
the Owner. The cost of such site plan shall be borne by the Owner as
contemplated in the Development Budget.
4.2.7 The Manager shall arrange to be prepared such survey and
engineering plans and drawings as are from time to time requested by the
Owner. The costs of such survey and engineering plans shall be borne by the
Owner as contemplated in the Development Budget.
4.2.8 The Manager shall administer and oversee the selection by the
Contractor of major subcontractors and others as appropriate for
construction of the Project and review bids for acceptability from
subcontractors.
4.2.9 The Manager shall review all applicable building codes,
environmental, zoning and land use laws and other applicable local, state
and federal laws, regulations and ordinances concerning the development,
use and operation of the Project or any portion thereof. The Manager shall
make application for and seek to obtain and keep in full force and effect
all necessary governmental approvals and permits, and shall endeavor to
perform such acts as shall be reasonably necessary to effect compliance by
the Owner with all laws, rules, ordinances, statutes, and regulations of
any governmental authority applicable to the Project. Upon receipt of the
Owner's approval, the Manager shall seek to obtain any permits, variances
or rezoning of the Land or any portion thereof, as are necessary or
appropriate to cause the Project to be in compliance with all such codes,
laws, regulations and ordinances. All costs required to be paid to third
parties in order to obtain such permits, variances or rezonings shall be
borne by the Owner as contemplated in the Development Budget.
4.2.10 The Manager shall review all applicable private restrictions,
covenants and easement agreements concerning the development, use and
operation of the Project or any portion thereof. The Manager shall endeavor
to perform such acts as shall be reasonably necessary to effect compliance
by the Owner with all such restrictions, covenants and easements.
4.2.11 The Manager shall negotiate and submit to the Owner for the
Owner's approval all contracts for, or otherwise arrange for the delivery
of, and pay all charges imposed on the Owner for, all utilities required
for the development, construction, and operation of the Project, including,
without limitation, water, electricity, telephone, storm sewer, and
sanitary sewer services.
4.2.12 The Manager shall coordinate the services of such accountants
and attorneys as may be engaged by the Owner upon such terms as may be
approved by the
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Owner and utilize such accounting and disbursement systems as may be
determined by the Owner.
4.2.13 The Manager shall review and make recommendations to the Owner
regarding the Owner's insurance program so that the Owner shall obtain and
keep in force, at the Owner's expense as contemplated in the Development
Budget, such policies of insurance, including, but not limited to, public
liability, all-risk, and builder's risk, in such amounts and with such
carriers as shall be prudent with respect to the Project.
4.2.14 The Manager shall maintain complete and accurate records
reflecting the progress of the Manager's implementation of the Development
Budget, which records shall include all contracts, purchase orders,
disbursement requests, bids, and proposals of contractors, suppliers, and
vendors, and such other records, plans and information as the Owner may
from time to time request or as the Manager shall deem appropriate to
maintain in discharging its duties and responsibilities hereunder.
4.2.15 The Manager shall inspect the Project at regular intervals so
as to be kept informed as to the stage of development and the condition of
the Project.
4.2.16 Upon the Owner's prior written authorization, the Manager shall
execute for and on behalf of, and in the name of, the Owner any
applications, requests and other documents which the Manager deems
necessary or appropriate for execution by the Owner in connection with the
development or construction of the Project.
4.2.17 The Manager shall examine the contents of all applications for
payments submitted under the Architect's Agreement or any Construction
Agreement, verify the contents of such applications and prepare, execute
and deliver, or cause to be prepared, executed and delivered such
certificates and other documents as may be required by such Agreements and
shall review and approve all disbursements made by or on behalf of the
Owner under the Architect's Agreement and under any Construction Agreement,
all in accordance with the Development Budget as it may from time to time
be revised pursuant to Section 5.2 hereof. The Manager shall process all
such applications for payments and any other invoices and charges as
expeditiously as possible to avoid all penalties and any excess interest
and to take advantage, wherever possible and desirable, of vendor
discounts. The Manager shall also make recommendations to the Owner with
respect to modifications, clarifications and change orders necessary or
desirable under any Construction Agreement; and the Manager shall also
review and recommend for approval or disapproval by the Owner, as
appropriate, change orders under any Construction Agreement, all in
accordance with the Development Budget as it may from time to time be
revised pursuant to Section 5.2 hereof.
4.2.18 The Manager shall prepare all construction loan draw requests
in form and content sufficient to permit the Owner's lender, if any, to
approve or disapprove such requests.
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4.2.19 The Manager shall coordinate, review, administer, manage and
oversee the work, activities and performance of the Architect under the
Architect's Agreement and of the Contractor under the Construction
Agreement. Such activities by the Manager shall include, without
limitation, reviewing, monitoring and coordinating all construction
scheduling to ensure the orderly process of construction and completion
thereof in the manner and within the time periods required by the Lease,
and reviewing and verifying all payment requests from the Architect and the
Contractor. The Manager shall serve as the Owner's representative in all
discussions, negotiations, and dealings with the Architect, the Contractor
and the Tenant. The Manager shall periodically (but no less often than
weekly) advise the Owner of the status of the Project and of the
performance by the Architect and by the Contractor of their respective
duties and obligations with respect to the Project. The Manager shall also
assist and advise the Owner with respect to the performance and enforcement
by the Owner of its duties and rights under the Architect's Agreement, the
Construction Agreement and the Lease. The Manager shall coordinate with the
Architect and the Contractor an orderly and expeditious transition from the
construction stage of the Project to the operating stage of the Project
and, in connection therewith, the Manager shall expedite and supervise the
completion of any remedial work that may be required to be performed by the
Contractor following the completion of the Project.
4.2.20 The Manager shall cooperate with the Owner's inspecting
engineer, if any, engaged for the purpose of reviewing the status of the
work.
4.2.21 The Manager shall purchase, to the extent the same are not
provided under the Construction Agreement, all supplies, materials, and
equipment required in connection with the development of the Project, and
the cost of same shall be borne by the Owner as contemplated in the
Development Budget.
4.2.22 The Manager shall coordinate, review, administer, manage and
oversee the work and activities relating to, and the performance of, the
"Core and Shell Work" and the Tenant Improvements to be constructed and
installed by the "Landlord" under the Lease.
4.2.23 The Manager shall deliver to the Owner the originals of all
permits, licenses, guaranties, warranties, bills of sale and other
contracts, agreements, change orders or commitments obtained or received by
the Manager for the account or benefit of the Owner, it being understood
that the Owner, upon the Owner's approval thereof, will execute all such
contracts, agreements, change orders and documents, and that the Manager
will not, under any circumstances, execute contracts, agreements, change
orders or documents on behalf of the Owner except as specifically provided
otherwise in this Agreement or as otherwise expressly authorized in writing
by the Owner.
4.2.24 The Manager shall perform and discharge all other obligations
of the Manager under this Agreement.
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4.3 Completion. The Manager hereby agrees to diligently use its best
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efforts and shall devote sufficient time and personnel to cause the development
of the Project to be completed in compliance with the time parameters
established therefor under the Lease, and in accordance with the Development
Budget as it may from time to time be revised pursuant to Section 5.2 hereof.
4.4 Employees. The Manager shall have in its employ at all times a
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sufficient number of capable employees to enable the Manager to perform its
duties hereunder. All persons, other than independent contractors, employed by
the Manager in the performance of its responsibilities hereunder shall be
exclusively controlled by and shall be the employees of the Manager and not of
the Owner, and the Owner shall have no liability, responsibility or authority
with respect thereto. The Manager agrees that the Manager shall cause ▇▇▇▇▇▇▇▇▇▇
to be personally involved in the performance of the Development Functions and
the other obligations and undertakings of the Manager hereunder.
4.5 Manager's Costs. Notwithstanding anything contained in any other
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provision of this Agreement to the contrary, the following costs and expenses
shall be borne solely by the Manager and shall not be borne by the Owner:
(a) Cost of gross salary and wages, payroll taxes, insurance, workers'
compensation and other benefits of ▇▇▇▇▇▇▇▇▇▇ and any other employees of
the Manager;
(b) Cost of forms, papers, ledgers and other supplies and equipment
used in the Manager's office;
(c) Cost of electronic data processing or computer services, or any
pro rata charge for data processing or computer services provided by
computer service companies, which the Manager may elect to incur in the
performance of the Development Functions;
(d) Cost of office equipment acquired by the Manager to enable it to
perform its duties hereunder;
(e) Cost of advances made to employees of the Manager and cost of
travel and lodging by the Manager's employees and agents, including
▇▇▇▇▇▇▇▇▇▇; and
(f) Cost attributable to losses, including any legal fees relating
thereto, arising from negligence, fraud or willful act or omission on the
part of the Manager or any of the Manager's officers, directors, employees
or agents, except to the extent such costs are to be borne by the Owner
pursuant to Section 9.3 hereof.
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ARTICLE 5
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DEVELOPMENT BUDGET
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5.1 Implementation of Development Budget. The Owner hereby approves the
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Development Budget and the Manager is hereby authorized and directed to
implement the Development Budget pursuant to this Agreement. The Manager may,
without the need for any further approval whatsoever by the Owner, make any
expenditures and incur any obligations provided for in the Development Budget,
as it may be revised from time to time as provided herein. The Manager shall use
prudence and diligence and shall employ its best efforts to ensure that the
actual costs incurred for each category or line item of expense as set forth in
the Development Budget shall not exceed such category or line item in the
Development Budget. The Manager shall advise the Owner promptly if it appears
that costs in any category or line item specified in the Development Budget will
exceed the amount budgeted therefor. All expenses shall be charged to the proper
category or line item in the Development Budget, and no expenses may be
classified or reclassified for the purpose of avoiding an excess in the budgeted
amount of a category or line item without the Owner's prior written approval.
The Manager shall secure the Owner's prior written approval before incurring and
paying any cost which will result in aggregate expenditures under any one
category or line item in the Development Budget exceeding the amount budgeted
therefor.
5.2 Revision of Development Budget. If the Manager at any time determines
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that the Development Budget is not compatible with the then-prevailing status of
the Project and does not adequately provide for the completion of the Project,
the Manager shall promptly prepare and submit to the Owner an appropriate
revision of the Development Budget. Any such revision shall require the approval
of the Owner; provided, however, that any such revision shall be considered
approved on the fourteenth (14th) day following its delivery to the Owner,
unless the Owner shall, within such fourteen (14) day period, notify the Manager
in writing of its disapproval of the proposed revision and specify in such
notice the items to which it objects. In the event of any such objection, the
Manager and the Owner shall consult and endeavor to reconcile their differences.
5.3 Emergencies. Notwithstanding any limitations herein provided, the
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Manager may spend funds or incur expenses on behalf of the Owner in
circumstances which the Manager reasonably and in good faith believes constitute
an emergency requiring prompt action to avert, or reduce the risk of, damage to
persons or property. The Manager shall, in any case, notify the Owner as soon as
practicable of the existence of such emergency and of the action taken by the
Manager with respect thereto.
5.4 Reduction in Fees. In the event that the total of all costs and
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expenses actually incurred by the Owner with respect to the acquisition of the
Land and the planning, design, development, construction and completion of the
Project and the Tenant Improvements for Tenant under the Lease (including costs
in all categories or line items specified in the Development Budget, but
expressly excluding costs for the specific line items marked with a double
asterisk in the Development Budget, and net of amounts reimbursed to the Owner
by Tenant with respect to Tenant Improvements for Tenant) shall exceed
$______________, the amount of the fees payable to the Manager under Section
11.2 hereof shall be reduced by the
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amount of such excess, with any reductions to be applied to such fees in the
following order of priority:
(a) first, to unpaid portions of the Development Fee until the remaining
Development Fee is reduced to zero;
(b) then to any portion of the Development Fee which has theretofore been
paid to the Manager until all such fees have been reduced to zero, and the
Manager hereby agrees to reimburse to the Owner an amount of such fees
theretofore paid to the Manager as shall equal the amount of such
reduction.
The aforesaid reductions in the fees payable to the Manager under Section 11.2
hereof shall be effected regardless of whether or not appropriate revisions of
the Development Budget are approved by the Owner and regardless of whether or
not any increases in costs and expenses incurred by the Owner with respect to
the acquisition of the Land or the planning, design, development, construction
and completion of the Project and the Tenant Improvements for Tenant are
approved by the Owner; provided, however, in the event such costs and expenses
-------- -------
shall increase as a result of a change by the Owner in the scope of the work
comprising the Project, the incremental costs due to the change in the scope of
the work shall not cause a reduction in the fees payable to the Manager under
Section 11.2 hereof. The Owner shall not be obligated to accept or agree to
changes in the scope of the work comprising the Project in order to reduce the
costs and expenses with respect thereto. The Owner and the Manager agree that
appropriate reductions in the fees payable to the Manager (and reimbursements
thereof to the Owner, if applicable) shall be effected as and when it is
reasonably determined by the Owner that the costs and expenses under any
category or line item in the Development Budget shall exceed the amount
originally budgeted therefor or that costs and expenses will be incurred that
are not originally budgeted under the Development Budget; provided, however, the
Owner and the Manager shall make reasonable allocations of the "contingency"
category or line item in the Development Budget to other categories or line
items prior to effecting a reduction in the fees payable to the Manager, so long
as a reasonable reserve is maintained in the "contingency" category or line item
to cover future contingencies. Promptly following the Completion Date, the
Owner and the Manager shall make any final adjustments and payments between them
to give effect to the agreements set forth in this Section 5.4.
ARTICLE 6
---------
AUTHORITY OF THE MANAGER
------------------------
6.1 General Authority. The Manager shall have, and is hereby granted by
-----------------
the Owner, full and complete power, authority, and discretion to act for, and in
the name, place, and stead of, the Owner in carrying out and discharging the
responsibilities and obligations of the Manager under this Agreement (including,
without limitation, all of the responsibilities imposed upon the Manager under
Article 4 hereof); provided, however, that the Manager shall have no right or
authority, express or implied, to commit or otherwise obligate the Owner in any
manner whatsoever except to the extent specifically provided herein or
specifically authorized in writing by the Owner.
-11-
6.2 Execution of Documents and Agreements. Only when specifically
-------------------------------------
authorized by the Owner in a writing to the Manager, the Manager may, at the
Manager's election, execute any documents, agreements, or other instruments on
behalf of the Owner as follows, it being acknowledged that the Manager shall be
entitled to the indemnification by the Owner for any obligations or liabilities
thereunder and shall not thereby incur any liability or obligation to any third
party thereunder:
▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Adevco Corporation,
a Georgia corporation,
as Manager
By:___________________________
Title:________________________
(CORPORATE SEAL)
ARTICLE 7
---------
ACCOUNTING AND REPORTS
----------------------
7.1 Books of Account. The Manager shall maintain or cause to be
----------------
maintained true and accurate books of account reflecting the planning, design,
construction, and completion of the Project. All entries to such books of
account shall be supported by sufficient documentation to permit the Owner and
its auditors to ascertain that said entries are properly and accurately
recorded. Such books of account shall be located at the Manager's principal
metropolitan Atlanta, Georgia office and shall be maintained in accordance with
the Manager's present cash method of accounting, unless otherwise directed or
approved by the Owner. The Manager shall ensure such control over accounting and
financial transactions as is reasonably required to protect the Owner's assets
from theft, error or fraudulent activity on the part of the Manager, the
Manager's employees or agents.
7.2 Monthly Reports. Promptly following the end of each calendar month,
---------------
the Manager shall prepare a report with respect to the Project (hereinafter
referred to as the "Monthly Report") and shall cause the same to be delivered to
the Owner and the Owner's inspecting engineer, if any. Each Monthly Report shall
be subdivided into categories specified in the Development Budget and shall
contain the following information respecting the Project:
(a) The draw request for the month covered by the Monthly Report,
including:
(i) each draw request letter;
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(ii) each certificate of the Architect;
(iii) each application and certificate for payment of the
Contractor; and
(iv) any other invoices covered in the draw request.
(b) The costs incurred under the Construction Contract as of the date
of the Monthly Report.
(c) All costs incurred but not paid as of the date of such Monthly
Report.
(d) A comparison of the amount of actual costs incurred as of the
date of the Monthly Report to the budgeted costs as of such date, shown on
a line-item basis using the same categories or line items set forth in the
Development Budget.
(e) Photographs of the Project depicting the current status of
construction.
(f) A report with respect to the progress of construction, including
information as to whether the commencement, milestone and completion dates
in the Lease are being achieved. The Manager shall identify in such report
potential variances between the completion dates required in the Lease and
the probable completion dates and shall make recommendations as to
adjustments necessary to meet the required completion dates.
The Manager shall furnish the Owner with a certificate from ▇▇▇▇▇▇▇▇▇▇ in
respect of each such Monthly Report certifying that such Monthly Report is
accurate, true and complete in all respects.
7.3 Construction Draw Reports. The Manager shall cause to be delivered to
-------------------------
the Owner, at the Owner's expense, promptly after they are prepared, copies of
each construction draw request under any construction loan obtained by the Owner
with respect to the Project.
7.4 Annual Development and Financial Statements. Within thirty (30) days
-------------------------------------------
after the end of each fiscal year of the Owner during the term of this
Agreement, the Manager shall cause to be prepared and delivered to the Owner, at
the Owner's expense, a report which is a summary of the previous Monthly Reports
for such fiscal year which have been tendered to the Owner pursuant to Section
7.2 hereof. In addition, within sixty (60) days after the end of each fiscal
year of the Owner during the term of this Agreement, the Manager shall cause to
be prepared and delivered to the Owner, at the Owner's expense, unaudited
financial statements reflecting all receipts and disbursements collected,
received, or made by the Manager with respect to the development and the
construction of the Project for such fiscal year. The Manager shall also cause
to be prepared and delivered to the Owner such other reports and information
with respect to the development and construction of the Project for each fiscal
year as the Owner shall reasonably request.
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7.5 Examination of Books and Records. The Owner, at its expense, shall
--------------------------------
have the right at all reasonable times during normal business hours and upon at
least twenty-four (24) hours advance notice, to audit, to examine, and to make
copies of or extracts from the books of account and records maintained by the
Manager with respect to the Project. If the Owner shall notify the Manager of
either weaknesses in internal control or errors in record keeping, the Manager
shall correct such weaknesses and errors as soon as possible after they are
disclosed to the Manager. The Manager shall notify the Owner in writing of the
actions taken to correct such weaknesses and errors.
ARTICLE 8
---------
BANKING
-------
8.1 Separate Accounts. It is contemplated that the Owner will make
-----------------
disbursements with respect to the development and construction of the Project
directly to the Architect and the Contractor. Nevertheless, all disbursements
and other funds of the Owner which may be received by the Manager hereunder with
respect to the development or construction of the Project shall be deposited by
the Manager and held in such bank account or accounts maintained by the Manager
in such bank or banks with federal deposit insurance protection as may be
selected by the Manager and approved by the Owner. All such funds shall be and
shall remain the property of the Owner and shall be disbursed by the Manager in
payment of the obligations of the Owner incurred in connection with the
development and construction of the Project, or, subject to the provisions of
Section 8.2 below, shall be disbursed to the Owner at the Owner's request.
Except as hereinafter provided, the Manager shall not commingle the Owner's
funds with the funds of any other person.
8.2 The Owner's Duty to Provide Funds. The Owner agrees that the Owner
---------------------------------
will pay all current obligations of the Owner in accordance with the Development
Budget, including all obligations of the Owner to the Manager hereunder.
Alternatively, at the Owner's option, the Owner may elect to provide funds to
the Manager so that the Manager can pay all such obligations of the Owner
(excluding obligations to the Manager, it being understood and agreed that such
obligations to the Manager shall be paid directly by the Owner to the Manager).
If the Owner elects to cause the Manager to make payment of such obligations,
the Owner hereby agrees that, by making deposits to (following notice as
provided below), or by refraining from withdrawing funds from, the bank account
or accounts maintained by the Manager pursuant to Section 8.1 above, the Owner
shall, during the term of this Agreement, maintain sufficient funds in such bank
account or accounts to enable the Manager to pay all current obligations of the
Owner in accordance with the Development Budget, excluding the obligations of
the Owner to the Manager hereunder. Accordingly, the Owner shall, within ten
(10) days of its receipt of any written request from the Manager for additional
funds (which request must specify the amount of such funds requested and the
purposes for which they are to be used), deposit in such bank account or
accounts such additional funds as the Owner shall consider appropriate with
respect to such request by the Manager.
8.3 Investment of Owner's Funds. If at any time there are in the bank
---------------------------
account or accounts established pursuant to Section 8.1 above, funds of the
Owner, from whatever sources,
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temporarily exceeding the immediate cash needs of the Project, the Manager may
(and at the discretion of the Owner shall) invest such excess funds in such
savings accounts, certificates of deposit, United States Treasury obligations,
commercial paper, and the like, as the Manager shall deem appropriate or as the
Owner shall direct, provided that the form of any such investment shall be
consistent with the Manager's need to be able to liquidate any such investment
to meet the cash needs of the Project from time to time.
ARTICLE 9
---------
STANDARD OF CARE; LIABILITY;
----------------------------
INDEMNITY; CONFIDENTIALITY
--------------------------
9.1 Standard of Care; Manager's Liability. The Manager shall have no
-------------------------------------
liability to the Owner for any errors of judgment, or any mistakes of fact or of
law, made in a good faith effort to perform and carry out the Manager's
responsibilities under this Agreement, unless the Manager has failed to exercise
that degree of care and skill which a reasonable and diligent businessman in the
Manager's profession would exercise in transactions of a similar nature for his
own account, provided, of course, that sufficient funds are made available by
the Owner for the performance of the Manager's responsibilities.
9.2 Indemnity of Owner. The Manager hereby agrees to indemnify, defend
------------------
and hold harmless the Owner and its partners and their respective officers,
directors and employees, from and against any and all claims, demands, losses,
liabilities, actions, lawsuits and other proceedings, judgments and awards, and
costs and expenses (including without limitation reasonable attorneys' fees and
court costs incurred in connection with the enforcement of this indemnity or
otherwise), arising out of the negligence, fraud or any willful act or omission
of the Manager, or any of its officers, directors, agents or employees, in
connection with this Agreement or the Manager's services or work hereunder,
whether within or beyond the scope of its duties or authority hereunder.
9.3 Indemnity of Manager. The Owner hereby agrees to indemnify, defend
--------------------
and hold harmless the Manager, its officers, directors and employees, from and
against any and all claims, demands, losses, liabilities, actions, lawsuits and
other proceedings, judgments and awards, and costs and expenses (including
without limitation reasonable attorney's fees and court costs incurred in
connection with the enforcement of this indemnity or otherwise), arising out of
(i) any action taken by the Manager within the scope of its duties or authority
hereunder, excluding only such of the foregoing as result from the negligence,
fraud or willful act of the Manager, its officers, directors, agents and
employees, and (ii) the negligence, fraud or any willful act or omission of the
Owner and its partners and their respective officers, directors and employees.
9.4 Survival of Indemnities. The provisions of Sections 9.2 and 9.3
-----------------------
hereof shall survive the completion of the Manager's services hereunder or any
earlier termination of this Agreement.
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9.5 No Obligation to Third Parties. None of the responsibilities and
------------------------------
obligations of the Manager under this Agreement shall in any way or in any
manner be deemed to create any liability of the Manager to, or any rights in,
any person or entity other than the Owner.
9.6 Nature of the Manager's Duties and Responsibilities. The Owner hereby
---------------------------------------------------
acknowledges that the Manager's duties and responsibilities hereunder with
respect to the development and construction of the Project consist only in
managing, supervising, and coordinating the planning, design, construction and
completion of the Project and the performance of the other Development Functions
in accordance with the terms of this Agreement; that the Manager is not itself
preparing any architectural or engineering plans, designs, or specifications or
performing any construction required for the development or completion of the
Project; that the Manager is not a guarantor or insurer of any work to be
performed by any other party in connection with the planning, design,
construction, and completion of the Project; and that the Manager is not
responsible for, and will not be liable for, any work, act, omission,
negligence, gross negligence, or intentional misconduct of any other party
employed by the Owner or performing work for the Owner in connection with the
Project.
9.7 Ownership of Information and Materials. The Owner shall have the
--------------------------------------
right to use, without further compensation to the Manager, all written data and
information generated by or for the Manager in connection with the Project or
supplied to the Manager by the Owner or the Owner's contractors or agents, and
all drawings, plans, books, records, contracts, agreements and all other
documents and writings in its possession relating to its services or the
Project. Such data and information shall at all times be the property of the
Owner. The Manager agrees, for itself and all persons retained or employed by
the Manager in performing its services, to hold in confidence and not to use or
disclose to others any confidential or proprietary information of the Owner
which is heretofore or hereafter disclosed to the Manager or any such persons
and which is designated by the Owner as confidential and proprietary, including
but not limited to any proprietary or confidential data, information, plans,
programs, plants, processes, equipment, costs, operations, tenants or customers
which may come within the knowledge of the Manager or any such persons in the
performance of, or as a result of, its services, except where (i) the Owner
specifically authorizes the Manager to disclose any of the foregoing to others
or such disclosure reasonably results from the performance of the Manager's
duties hereunder, or (ii) such written data or information shall have
theretofore been made publicly available by parties other than the Manager or
any such persons. Nothing contained in this Section 9.7 shall be deemed to limit
or restrict the provisions of Article 15 hereof or of the rights of the Manager
thereunder.
-16-
ARTICLE 10
----------
INSURANCE
---------
10.1 Insurance Requirements. Throughout the term of this Agreement,
----------------------
insurance with respect to the Project shall be carried and maintained in force
in accordance with the provisions contained in Exhibit "C", attached hereto and
-----------
incorporated herein by this reference, with the premiums and other costs and
expenses for such required insurance to be borne as provided in Exhibit "C".
-----------
10.2 Owner's Insurance Primary Coverage. As between any insurance
----------------------------------
carried by the Owner pursuant to this Article 10 and any insurance carried by
the Manager, the Owner's insurance shall for all purposes be considered the
primary coverage, and no claim shall be made under or with respect to any
insurance maintained by the Manager except in the event that the Owner's entire
insurance is exhausted (without regard to whether the actual amount of the
Owner's insurance exceeds the amounts specified in this Article 10).
10.3 Waiver of Subrogation. Each insurance policy maintained by the
---------------------
Owner or by the Manager with respect to the Project shall contain a waiver of
subrogation clause, so that no insurer shall have any claim over or against the
Owner or the Manager, as the case may be, by way of subrogation or otherwise,
with respect to any claims which are insured under any such policy.
ARTICLE 11
----------
COMPENSATION OF THE MANAGER
---------------------------
11.1 Fees - General. As compensation for the services rendered and to be
--------------
rendered by the Manager under this Agreement, the Owner shall pay the Manager
the Development Fee in accordance with and subject to the terms and provisions
of Section 11.2 hereof, and such Development Fee shall be subject to reduction
as provided in Section 5.4 hereof.
11.2 Development Fee. The Owner shall pay the Manager, as the Development
---------------
Fee for the Project, the sum of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00). The Development Fee shall be due and payable ratably (on the
basis of the percentage of construction completed) as the construction and
development of the Project are completed. The Development Fee shall be paid in
monthly installments commencing with the month following the month during which
the on-site development work with respect to the Project shall commence. The
remaining balance of the Development Fee shall be due and payable upon the
Completion Date.
11.3 Reimbursement of Out-of-Pocket Costs. In addition to the Development
------------------------------------
Fee, the Owner shall reimburse to Developer the following out-of-pocket expenses
actually incurred by Developer in connection with the performance of Developer's
duties and responsibilities hereunder: airfare and other reasonable travel
costs, including automobile rental and out-of-town meals relating to travel to
and from the Project and Developer's office in the Metropolitan Atlanta, Georgia
area, long distance telephone charges, postage, courier chargers and overnight
-17-
delivery charges (such as Federal Express). In the event Developer shall require
the services of Gay ▇▇▇▇▇▇ in connection with the Tenant Improvements, Developer
may engage Gay ▇▇▇▇▇▇ (or her company, Corporate Sources) on an hourly charge
basis at a reasonable hourly fee amount, and Owner shall reimburse Developer for
such hourly fees as and when incurred, but not to exceed an aggregate amount of
$ 5,000.00, without prior written approval.
11.4 Disbursement to the Manager. The Manager may not disburse to itself
---------------------------
any mounts due under this Article 11 from the bank account or accounts
maintained by the Manager pursuant to Article 8 hereof, it being understood and
agreed that the amounts due and payable to the Manager under this Article 11
shall be paid directly by the Owner to the Manager.
ARTICLE 12
----------
Intentionally Omitted
---------------------
ARTICLE 13
----------
REIMBURSEMENT OF ADVANCES, COSTS AND EXPENSES
---------------------------------------------
13.1 Reimbursement of Advances. The Manager shall not be required to
-------------------------
advance any of its own funds for the payment of any costs and expenses incurred
by or on behalf of the Owner in connection with the Project, but if the Manager
advances its own funds in payment of any of such costs and expenses, the Owner,
subject to the provisions of Sections 4.5, 5.2 and 11.3 hereof, shall promptly
reimburse the Manager or, in lieu thereof, the Manager may reimburse itself from
the bank account or accounts maintained by the Manager pursuant to Article 8
hereof.
13.2 Reimbursement of Costs and Expenses. Promptly after execution of
-----------------------------------
this Agreement, the Owner shall reimburse the Manager for all costs and expenses
set forth on Exhibit "D" attached hereto and by this reference made a part
-----------
hereof, all of which costs and expenses the Manager hereby represents and
warrants were incurred and paid by the Manager prior to the date hereof (or will
be paid by the Manager in due course) in connection with the Project and are
authorized and bona fide expenditures under the Development Budget.
ARTICLE 14
----------
DEFAULT AND TERMINATION
-----------------------
14.1 Default by Manager. Upon the happening of any Event of Default (as
------------------
hereinafter defined), the Owner shall have the absolute unconditional right to
terminate this Agreement by giving written notice of such termination to the
Manager. Any one or more of the following events shall constitute an "Event of
Default" by the Manager under this Agreement:
(a) If the Manager shall fail to observe, perform or comply in any
material respect with any term, covenant, agreement or condition of this
Agreement which is to be observed, performed or complied with by the
Manager under the provisions of this Agreement, and such failure shall
continue uncured for ten (10) days after the giving of
-18-
written notice thereof by the Owner to the Manager specifying the nature of
such failure, unless such failure can be cured but is not susceptible of
being cured within said ten (10) day period, in which event such a failure
shall not constitute an Event of Default if the Manager commences curative
action within said ten (10) day period, and thereafter prosecutes such
action to completion with all due diligence and dispatch;
(b) If the Manager or ▇▇▇▇▇▇▇▇▇▇ shall make a general assignment for
the benefit of creditors;
(c) If any petition shall be filed against the Manager or ▇▇▇▇▇▇▇▇▇▇
in any court, whether or not pursuant to any statute of the United States
or of any State, in any bankruptcy, reorganization, dissolution,
liquidation, composition, extension, arrangement or insolvency proceedings,
and such proceedings shall not be dismissed within sixty (60) days after
the institution of the same, or if any such petition shall be so filed by
the Manager or ▇▇▇▇▇▇▇▇▇▇;
(d) If, in any proceeding, a receiver, trustee or liquidator be
appointed for all or a substantial portion of the property and assets of
the Manager or ▇▇▇▇▇▇▇▇▇▇, and such receiver, trustee or liquidator shall
not be discharged within ninety (90) days after such appointment;
(e) If the Manager shall assign this Agreement or any of its rights or
obligations hereunder, without the prior written consent of the Owner; and
(f) If the Manager shall intentionally or willfully fail to perform
any of its duties or obligations hereunder, or if the Manager shall
misappropriate any funds of the Owner in the possession or control of the
Manager or shall otherwise commit an act of fraud against the Owner (except
that if such misappropriation of funds or fraud by the taking is committed
by an employee of the Manager other than ▇▇▇▇▇▇▇▇▇▇, such event may be
cured by the Manager if the Manager makes prompt restitution to the Owner
and discharges such employee).
14.2 Additional Terminating Event. The Owner shall have the right to
----------------------------
terminate this Agreement upon written notice to the Manager in the event
▇▇▇▇▇▇▇▇▇▇ shall die, become permanently or temporarily disabled or shall cease
for reasons beyond his control to be actively involved in performing, on behalf
of the Manager, the Development Functions and the other obligations and
undertakings of the Manager hereunder. The Owner shall also have the right to
terminate this Agreement upon written notice to the Manager in the event the
Owner shall elect for any reason whatsoever not to acquire the Land.
14.3 Default by Owner. If the Owner fails to comply with or perform in
----------------
any material respect any of the terms and provisions to be complied with or any
of the obligations to be performed by the Owner under this Agreement, and such
failure continues uncured for a period of fifteen (15) days after written notice
to the Owner specifying the nature of such default (or, in the case of a non-
monetary default, such longer period of time as may be needed in the exercise by
the Owner of due diligence to effect a cure of any such non-monetary default),
then the
-19-
Manager shall have the right, in addition to all other rights and remedies
available to the Manager at law and in equity (including without limitation the
right to pursue an action for specific performance), at its option, to terminate
this Agreement by giving written notice thereof to the Owner, in which event the
Owner shall immediately pay to the Manager, in cash, the sums payable to the
Manager upon termination as provided in Section 14.4 hereof, and upon the
payment of such amounts, subject to Sections 9.2, 9.3, 9.7 and 14.5 hereof, the
Owner and the Manager shall have no further rights, duties, liabilities or
obligations whatsoever under this Agreement.
14.4 Obligation for Fees Upon Termination. Upon any termination of this
------------------------------------
Agreement, the Owner shall pay to the Manager all amounts due and payable to the
Manager as of the date of termination pursuant to the terms of this Agreement
(including, without limitation, any accrued but unpaid installments of the
Development Fee) less, if this Agreement terminates as a result of an Event of
----
Default, an amount equal to the damages incurred or suffered (or to be incurred
or suffered) by the Owner as a result of such Event of Default. Upon the payment
of all such amounts payable under this Section, subject to Sections 9.2, 9.3,
9.7 and 14.5 hereof, the Owner and the Manager shall have no further rights,
duties, liabilities or obligations whatsoever under this Agreement.
14.5 Actions Upon Termination. Upon any termination of this Agreement,
------------------------
the Manager shall promptly (a) account for and deliver to the Owner any monies
of the Owner held by the Manager, including funds in the bank account or
accounts maintained by the Manager pursuant to Article 8 hereof and any funds
due the Owner under this Agreement but received after such termination, and (b)
deliver to the Owner or to such other person as the Owner shall designate in
writing, all materials, supplies, equipment, keys, contracts, documents and
books and records pertaining to this Agreement or the development of the
Project. The Manager shall also furnish all such information, take all such
other action and shall cooperate with the Owner as the Owner shall reasonably
require in order to effectuate an orderly and systematic termination of the
Manager's duties and activities hereunder. This Section 14.5 of this Agreement
shall survive any termination of this Agreement.
ARTICLE 15
----------
OTHER ACTIVITIES OF THE MANAGER
-------------------------------
The Owner hereby acknowledges that the Manager is engaged in the ownership,
development, leasing, sale, and management of commercial properties other than
the Project and the Owner hereby agrees that the Manager shall in no way be
restricted from, or have any liability to account to the Owner with respect to,
such activities, notwithstanding that such activities may compete with, or be
enhanced by, the Manager's activities under this Agreement or the Owner's
ownership of the Project.
ARTICLE 16
----------
NATURE OF AGREEMENT
-------------------
-20-
The rights and duties granted to and assumed by the Manager hereunder are
those of an independent contractor only. Nothing contained herein shall be so
construed as to constitute the relationship created under this Agreement between
the Manager and the Owner as a mutual agency, a partnership, or a joint venture.
ARTICLE 17
----------
GENERAL PROVISIONS
------------------
17.1 Notices. Whenever any notice, consent, approval, demand or request
-------
required or permitted under this Agreement, such notice, consent, approval,
demand or request shall be in writing and shall be delivered by hand or sent by
registered or certified mail, return receipt requested, to the addresses set out
below or to such other addresses as are specified by written notice given in
accordance herewith, or sent via facsimile transmission to the facsimile numbers
set out below or to such other facsimile numbers as are specified by written
notice given in accordance herewith:
Owner: ▇▇▇▇▇ Operating Partnership, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager: Adevco Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
All notices, consents, approvals, demands or requests delivered by hand
shall be deemed given upon the date so delivered; those given by mailing as
hereinabove provided shall be deemed given on the date on which such notice,
demand, or request is so deposited in the United States Mail; those given by
facsimile transmission shall be deemed given on the first business day following
the date shown on sender's copy thereof showing the proper "answerback" code for
the facsimile transmission number to which the notice is sent. Nonetheless, the
time period, if any, in which a response to any notice, demand, or request must
be given shall commence to run from the date of receipt of the notice, demand,
or request by the addressee thereof. Any notice, demand, or request not received
because of changed address of which no notice was given as hereinabove provided
or because of refusal to accept delivery shall be deemed received
-21-
by the party to whom addressed on the date of hand delivery or on the third
calendar day following deposit in the United States Mail, as the case may be.
17.2 Modifications. Neither any change or modification of this Agreement
-------------
nor any waiver of any term or condition hereof shall be valid or binding on the
parties hereto, unless such change, modification, or waiver shall be in writing
and signed by the party to be bound thereby.
17.3 Binding Effect. This Agreement shall inure to the benefit of and
--------------
shall be binding upon the parties hereto, their successors, transferees, and
permitted assigns.
17.4 Duplicate Originals. For the convenience of the parties hereto, any
-------------------
number of counterparts hereof may be executed, each such counterpart shall be
deemed to be an original instrument, and all of such counterparts shall together
be deemed one and the same instrument.
17.5 Construction. This Agreement shall be interpreted, constructed, and
------------
enforced in accordance with the laws of the State of Georgia. The titles of the
articles and sections herein have been inserted as a matter of convenience of
reference only and shall not control or affect the meaning or construction of
any of the terms or provisions herein. The parties agree that they have both
participated equally in the negotiation and preparation of this Agreement and no
court construing this Agreement or the rights of the parties hereunder shall be
prejudiced toward either party by reason of the rule of construction that a
document is to be construed more strictly against the party or parties who
prepared the same.
17.6 Entire Agreement. This Agreement is intended by the parties hereto
----------------
to be the final expression of their agreement with respect to the subject matter
hereof and is the complete and exclusive statement of the terms thereof
notwithstanding any representation or statement to the contrary heretofore made.
17.7 Assignment. This Agreement shall not be assigned by the Manager
----------
without the prior written consent of the Owner, and any such assignment by the
Manager without the prior written consent of the Owner shall be null, void and
of no force and effect and shall be an Event of Default hereunder. Upon any
assignment of this Agreement by Owner to any partnership having ▇▇▇ ▇. ▇▇▇▇▇,
III or ▇▇▇▇▇ Capital, Inc. as the ultimate general partner thereof or to any
parties under a tenancy in common agreement having any such partnership as a
tenant in common thereunder, and the express assumption by such party or parties
of the obligations of "Owner" arising or accruing after such assignment, the
assigning Owner shall be relieved of all obligations under this Agreement
arising or accruing after such assignment.
17.8 Authorized Representatives. Any consent, approval, authorization,
--------------------------
or other action required or permitted to be given or taken under this Agreement
by the Manager or the Owner, as the case may be, shall be given or taken by the
authorized representative of each. For purposes of this Agreement, (a) the
authorized representative of the Manager shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇; (b) the
authorized representative of the Owner shall be ▇▇▇ ▇. ▇▇▇▇▇, III, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, or ▇▇▇▇ ▇▇▇▇▇▇. Any party hereto may from time to time designate other
or replacement authorized representatives by written notice from its authorized
representative to the
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other parties hereto. The written statements and representations of any
authorized representative of the Manager or the Owner shall for the purposes of
this Agreement be binding upon such party for whom the authorized representative
purports to act, and the other parties hereto shall have no obligation or duty
whatsoever to inquire into the authority of any such representative to take any
action which he proposes to take, regardless of whether such representative
actually has the authority to take any such action; and the Manager and the
Owner shall be entitled to rely upon any direction, authorization, consent,
approval, or disapproval given by any authorized representative of the Manager
or the Owner, as the case may be, in connection with any matter arising out of
or in connection with this Agreement or the Project.
17.9 Terminology. All personal pronouns used in this Agreement, whether
-----------
used in the masculine, feminine, or neuter gender, shall include all other
genders; and all terms used herein in the singular shall include the plural, and
vice versa.
17.10 Time of Essence. Time is of the essence of this Agreement.
---------------
IN WITNESS WHEREOF, the parties hereto have executed and sealed this
Agreement as of the day, month and year first above written.
"MANAGER":
-------
ADEVCO CORPORATION,
a Georgia corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------
Title: President
---------
[CORPORATE SEAL]
"OWNER":
-----
▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: ▇▇▇▇▇ Real Estate Investment Trust, Inc.,
a Maryland corporation, general partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name:__________________________
Title:_________________________
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EXHIBIT "A"
-----------
DESCRIPTION OR SITE PLAN OF LAND
EXHIBIT "B"
-----------
EXHIBIT "C"
-----------
INSURANCE REQUIREMENTS
This exhibit is attached to and made part of the Development Agreement between
▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., as Owner, and ADEVCO CORPORATION, as Manager,
dated March ___, 1999.
A. Owner's Insurance Requirements.
------------------------------
Throughout the term of this Agreement the Owner shall carry or cause to be
carried and maintain in force insurance described in paragraphs 1 through 3
below. The cost of such policies shall be at the sole cost and expense of
the Owner.
1. Builder's Risk.
--------------
An "All Risk" builder's risk policy including coverage for collapse,
flood, earthquake and installation risks written on a completed value basis
in an amount not less than total replacement value of the Project under
construction (less the value of such portions of the Project as are
uninsurable under the policy, i.e., site preparation, abrading, paving,
parking lots, etc., excepting, however, foundations and other undersurface
installations subject to collapse or damage by other insured perils). Such
policy will also include coverage for soft costs including interest expense
and loss of rents. Deductible per loss shall be determined by the Owner.
2. Commercial General Liability and Automobile Liability.
-----------------------------------------------------
This policy (or policies) shall be written at a total limit of no less
than $5,000,000 per occurrence and $5,000,000 Aggregate and will include
the following extension of coverage:
a. Broad Form CGL endorsement;
b. X, C and U coverage;
c. Blanket Contractual with exclusions pertaining to completed
operations, explosion, collapse and underground hazards deleted.
3. Boiler and Machinery.
-------------------
If the Boiler and Machinery equipment is put in service prior to the
expiration of the builder's risk policy and prior to certification of
building completion the Manager shall notify the Owner so that the Owner
may exercise its option to purchase Boiler and Machinery coverage if
needed.
B. Manager's Insurance Requirements for policies covering Manager.
------------------------------------------------------ -------
During the term of this Agreement if the Manager shall have employees in
addition to ▇▇▇▇▇▇▇▇▇▇, the Manager agrees to carry and maintain in force,
at the Manager's sole cost and expense, Worker's Compensation and
Employer's Liability. Such policy shall be endorsed to waive subrogation
against the Owner.
C. Insurance Requirements for Architects and Engineers.
---------------------------------------------------
The Manager shall require any architect or engineering firm employed by the
Owner to carry Professional Liability Insurance in an amount not less than
$500,000 per occurrence.
D. Insurance Requirements for All Contractors and Third Party Services.
---------------------------------------------------------- --------
Every contractor and all parties furnishing service to the Owner and/or the
Manager must provide the Manager prior to commencing work, evidence of the
following minimum insurance requirements. In no way do these minimum
requirements limit the liability assumed elsewhere in this Development
Agreement:
1. Worker's Compensation and Employers Liability.
---------------------------------------------
2. Commercial General Liability.
----------------------------
a. Commercial General Liability form, including
Premises/Operations, Elevators and Escalators, Independent
Contractors, Products - Completed Operations, Personal Injury,
(exclusions A and C deleted), Broad Form Property Damage (including
Completed Operations), and afford coverage for the X, C and U Hazards.
b. Contractual Liability: Blanket basis insuring the
liability assumed under this Development Agreement (coverage must be
endorsed so that all exclusions relating to watercraft, railroad
property, products and completed operations and explosion, collapse
and underground hazards are deleted).
c. Limits of Liability: Bodily Injury $500,000 each
occurrence, $500,000 aggregate; Property Damage $100,000 each
occurrence, $100,000 aggregate.
3. Comprehensive Automobile Liability.
----------------------------------
a. Comprehensive Automobile Liability form, including all
Owned, Non-Owned and Hired Vehicles.
b. Limits of Liability: Bodily Injury $250,000 each person,
$500,000 each occurrence; Property damage $100,000 each occurrence.
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4. Umbrella Liability.
------------------
Such insurance provide coverage with limits of not less than $1,000,000 per
occurrence/$1,000,000 aggregate, in excess of the underlying coverages
listed in 1, 2 and 3 above.
5. Additional Requirements.
-----------------------
a. The Contractor shall require the same minimum insurance
requirements, as listed above, of all subcontractors, and these
subcontractors shall also comply with the additional requirements
listed below.
b. All insurance coverages required as herein set forth,
shall be at the sole cost and expense of contractor, subcontractor, or
those providing third party services, and deductibles shall be assumed
by, for the account of, and at their sole risk.
c. Except where prohibited by law, all insurance policies
shall contain provisions that the insurance companies waive the rights
of recovery or subrogation against the Owner and the Manager, their
agents, servants, invitees, employees, tenants, affiliated companies,
contractors, subcontractors, and their insurers.
E. Miscellaneous.
-------------
1. Accident Reports.
----------------
The Manager shall be completely responsible for reporting to the
appropriate insurance carriers and/or their agents all accidents
involving injury to employees of any contractor, any member of
the public or property damages, provided that the Manager
receives a report from the Contractor regarding such accident or
otherwise becomes aware of such accident.
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EXHIBIT "D"
-----------
REIMBURSABLE EXPENDITURES RELATING TO PROJECT
Note: Developer will submit a draw request for any reimbursable expenses
incurred prior to the date of this Development Agreement.
EXHIBIT "E"
-----------
ESTOPPEL CERTIFICATE
KNOW ALL MEN, that Matsushita Avionics Systems Corporation, a Delaware
corporation ("Matsushita") is a tenant in a certain office building located at
___________________________, Lake Forest, California pursuant to the terms set
forth in that certain Office Lease dated as of February 18, 1999, as amended and
supplemented (hereinafter collectively called the "Lease") with ▇▇▇▇▇ Operating
Partnership, L.P. ("Landlord"), and does hereby certify and acknowledge to
Landlord as follows:
1. As of the date hereof, Matsushita has commenced to pay Base Rent
(as defined in the Lease) and Additional Rent (as defined in the Lease) due
under the Lease and is not in default in the respect thereof under the Lease.
2. As of the date hereof, Matsushita is in possession of the Premises
(as defined in the Lease) and has accepted the same, including the work of
Landlord performed therein, and Matsushita has no knowledge of any default of
Landlord in the performance and observation of the covenants, conditions and
agreements contained in the Lease on Landlord's part to be kept, observed and
performed.
3. As of the date hereof, there exist no setoffs made by Matsushita
or defenses that Matsushita may claim to the enforcement of the agreements,
terms, covenants or conditions of the Lease.
4. The Lease is a valid and binding obligation by and between
Matsushita and Landlord.
5. The term of the Lease commenced as of __________, ____ and shall
expire, unless extended or sooner terminated in accordance with the terms of the
Lease, on _______________.
6. The Lease, except as amended by and supplemented by
__________________________________________, has not been further amended or
modified in any respect and, as of the date hereof, is in full force and effect
and enforceable in accordance with its terms.
IN WITNESS WHEREOF, Matsushita has caused this instrument to be
executed as of this ____ day of __________, ____.
MATSUSHITA AVIONICS SYSTEMS CORPORATION,
a Delaware corporation
WITNESS: By:_________________________
Title:______________________
______________________
GUARANTY
In consideration of the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration paid or delivered to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
("Guarantor"), the receipt and sufficiency whereof are hereby acknowledged by
Guarantor, and for the purpose of seeking to induce and as an inducement for the
execution and delivery by ▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("Owner"), of that certain Development Agreement (the "Agreement")
with ADEVCO CORPORATION, a Georgia corporation ("Manager"), of even date
herewith, Guarantor does hereby guarantee to Owner the full and prompt payment
of all sums and amounts payable by Manager under the Agreement, and hereby
further guarantees the full and timely performance and observance of all the
covenants, terms, conditions and agreements therein provided to be performed and
observed by Manager; and Guarantor hereby covenants and agrees to and with Owner
that if default shall at any time be made by Manager in the payment of any sums
or amounts payable by Manager under the Agreement, or if Manager should default
in the performance and observance of any of the terms, covenants and conditions
contained in the Agreement, Guarantor shall and will forthwith pay such sums and
amounts, and shall and will forthwith faithfully perform and fulfill all of such
terms, covenants and conditions and will forthwith pay to Owner all damages that
may arise in consequence of any default by Manager under the Agreement,
including, without limitation, all reasonable attorneys' fees and disbursements
incurred by Owner or caused by any such default or the enforcement of this
Guaranty.
This Guaranty is an unconditional guaranty of payment (and not of
collection) and of performance. The liability of Guarantor is coextensive with
that of Manager and also joint and several and this Guaranty shall be
enforceable against Guarantor without the necessity of any suit or proceeding on
Owner's part of any kind or nature whatsoever against Manager and without the
necessity of any notice of non-payment, non-performance or non-observance or of
any notice of acceptance of this Guaranty or of any other notice or demand to
which Guarantor might otherwise be entitled, all of which Guarantor hereby
expressly waives. Guarantor hereby expressly agrees that the validity of this
Guaranty and the obligations of Guarantor hereunder shall in no way be
terminated, affected, diminished or impaired by reason of (a) the assertion or
the failure to assert by Owner against Manager of any of the rights or remedies
reserved by Owner pursuant to the terms, covenants and conditions of the
Agreement, or (b) any non-liability of Manager under the Agreement due to
insolvency, discharge in bankruptcy or any other defense of a similar nature.
This Guaranty shall be a continuing guaranty, and the liability of
Guarantor hereunder shall in no way be affected, released or diminished by
reason of (a) any assignment, renewal, modification, amendment or extension of
the Agreement, or (b) any modification or waiver of or change in any of the
terms, covenants and conditions of the Agreement by Owner and Manager, or (c)
any extension of time that may be granted by Owner to Manager, or (d) any
consent, release, indulgence or other action, inaction or omission under or in
respect of the Agreement, or (e) any dealings or transactions or matter or thing
occurring between Owner and Manager, or (f) any bankruptcy, insolvency,
reorganization, liquidation, arrangement, assignment for the benefit
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of creditors, receivership, trusteeship or similar proceeding affecting Manager,
whether or not notice thereof or of any thereof is given to Guarantor.
Should Owner be obligated by any bankruptcy or other law to repay to
Manager or to Guarantor or to any trustee, receiver or other representative of
either of them, any amounts previously paid, this Guaranty shall be reinstated
in the amount of such repayments. Owner shall not be required to litigate or
otherwise dispute its obligations to make such repayments if it in good faith
believes that such obligation exists.
No delay on the part of Owner in exercising any right, power or
privilege under this Guaranty or failure to exercise the same shall operate as a
waiver of or otherwise affect any such right, power or privilege, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
No waiver or modification of any provision of this Guaranty nor any
termination of this Guaranty shall be effective unless in writing, signed by
Owner; nor shall any such waiver be applicable except in the specific instance
for which given.
All of Owner's rights and remedies under the Agreement and under this
Guaranty, now or hereafter existing at law or in equity or by statute or
otherwise, are intended to be distinct, separate and cumulative and no exercise
or partial exercise of any such right or remedy therein or herein mentioned is
intended to be in exclusion of or a waiver of any of the others.
Guarantor agrees that whenever at any time or from time to time
Guarantor shall make any payment to Owner or perform or fulfill any term,
covenant or condition hereunder on account of the liability of Guarantor
hereunder, Guarantor will notify Owner in writing that such payment or
performance, as the case may be, is for such purpose. No such payment or
performance by Guarantor pursuant to any provision hereof shall entitle
Guarantor by subrogation or otherwise to the rights of Owner to any payment by
Manager or out of the property of Manager, except after payment of all sums or
fulfillment of all covenants, terms, conditions or agreements to be paid or
performed by Manager.
Without regard to principles of conflicts of laws, the validity,
interpretation, performance and enforcement of this Guaranty shall be governed
by and construed in accordance with the internal laws of the State of Georgia.
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IN WITNESS WHEREOF, the undersigned has duly executed this Guaranty
this ____ day of _____________, 1999.
GUARANTOR:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇(SEAL)
-----------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Residence Address:
_______________________
_______________________
_______________________
Social Security Number:
###-##-####
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