EXHIBIT 10.3
Residential
MANAGEMENT AGREEMENT
BETWEEN
CONTINENTAL MORTGAGE AND EQUITY TRUST
("OWNER")
AND
CARMEL REALTY SERVICES, LTD.
("AGENT")
DATED AS OF FEBRUARY 1, 1998
MANAGEMENT AGREEMENT
Recitals
Article I - Appointment; Term of Agreement
1.01 Appointment
1.02 Term
1.03 Termination For Cause
Article II - Responsibilities of Agent
2.01 Standard of Care
2.02 Operation of Property
2.03 Employees
2.04 Enforcement of Leases
2.05 Compliance with Leases, Laws and Mortgages
2.06 Notification to Owner
2.07 Books and Records
2.08 Reports and Reconciliation of Account
2.09 Contracts
2.10 Property Taxes
2.11 Construction Management
Article III - Bank Accounts
3.01 Operating Account
3.02 Security Deposits
Article IV - Budgets and Expenditures
4.01 Business Plan
4.02 Expenses Paid from Operating Account
4.03 Insufficient Income
4.04 Limitation on Payments
Article V - Indemnification and Insurance
5.01 Insurance
5.02 Certificates and Policies of Insurance
5.03 Owner's Liability Insurance
5.04 Agent's Responsibilities
Article VI - Compensation of Agent and Management Facilities
6.01 Agent's Fee
Article VII - Termination
7.01 Obligations Upon Termination
7.02 Remedies
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Article VIII - Miscellaneous Provisions
8.01 Headings
8.02 Notice
8.03 Relationship of the Parties
8.04 Entire Agreement
8.05 Assignment
8.06 Legal Representatives, Successors, Transfers and Assigns
8.07 Attorneys' Fees
8.08 Time of the Essence
8.09 Governing Law
8.10 Severability
8.11 No Interest in Condemnation or Insurance Proceeds
8.12 Mutual Waiver
8.13 Owner's Operating Procedures
8.14 Asbestos and Toxic Wastes
8.15 Other Engagements
8.16 Subordination
8.17 Delegation of Duties
Signatures
Exhibit "A" - Property Description
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MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is made and entered into as of
the 1st day of February, 1998, by and between CONTINENTAL MORTGAGE AND EQUITY
TRUST, a California Real Estate Investment Trust ("Owner") and CARMEL REALTY
SERVICES, LTD., a Texas partnership ("Agent").
W I T N E S S E T H:
WHEREAS, Owner is the owner of the real property more particularly
described on Exhibit "A", attached hereto and by this reference made a part
hereof (the "Land"); there are certain improvements on the Land, which include,
but are not limited to, that certain apartment project known as "See Exhibit A"
(the "Building");
WHEREAS, the Land, the Building and any parking facility or structure
located on the Land are sometimes collectively referred to herein as the
"Property";
WHEREAS, Owner desires to appoint and Agent desires to accept the
appointment, to supervise the overall management and operation of the Property,
and to engage such entity or entities for the performance of day-to-day
management and operation of the Property as Agent deems necessary or
appropriate; and
WHEREAS, this Agreement is entered into for the purpose of setting forth
the terms on which Agent will manage the Property.
NOW THEREFORE, incorporating the recitals as set forth above, and in
consideration of the mutual covenants herein contained, and Ten and No/100
Dollars ($10.00) and other good and valuable consideration paid by the parties
hereto to one another, the receipt and sufficiency of which are acknowledged,
the parties hereto do covenant and agree as follows:
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ARTICLE I
APPOINTMENT; TERM OF AGREEMENT
1.01 Appointment. Subject to the terms and conditions hereof, Owner hereby
appoints Agent and delegates to Agent the sole and exclusive right to manage,
supervise and operate the Property, and Agent hereby accepts its appointment.
1.02 Term. This Agreement shall commence on February 1, 1998 (the
"Commencement Date") and continue for a period of one (1) year, unless sooner
terminated as provided herein (a) for "Cause" (as herein defined) or (b) upon
the giving of thirty (30) days written notice by either party to the other of
its intent to terminate this Agreement in its sole discretion without the
necessity of showing Cause. The entire term of this Agreement is sometimes
herein referred to as the "Term".
1.03 Termination For Cause. Owner, at its option, may terminate this
Agreement for "Cause" at any time upon giving written notice thereof and the
Term "Cause" shall be limited to (a) fraud, misrepresentation, misappropriation
of funds, furnishing any statement, report, notice, writing, or schedule to
Owner that Agent knows is untrue or misleading in any material respect on the
date as of which the facts set forth therein are stated or certified, or breach
of trust by Agent or (b) an intentional or grossly negligent or illegal act
committed by Agent against Owner.
ARTICLE II
RESPONSIBILITIES OF AGENT
2.01 Standard of Care. Agent shall operate, manage and maintain the
Property, for and on behalf of Owner, diligently and in good faith, in
accordance with sound, reasonable and prudent property management practices.
2.02 Operation of Property. Agent shall collect the Gross Monthly
Collections (as defined in Section 6.01(b) hereof), comply with the provisions
of the manager's policy manual provided by Owner (the "Policy Manual"), and
institute, be responsible for and supervise, at the expense of Owner, all
maintenance and operational activities of the Property, including, but not
limited to, the following:
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(a) providing any necessary repairs to the Property and a
preventative maintenance program for all mechanical, electrical and
plumbing systems and equipment on the Property;
(b) contracting in the name of Owner for gas, electricity, water and
such other utility services to be furnished to the Property as Agent deems
appropriate;
(c) contracting with independent contractors for the performance of
services hereunder; and
(d) any other activity expedient to the operation of the Property.
2.03 Employees.
(a) All matters pertaining to the employment, supervision,
compensation, promotion and discharge of employees who are managing and
operating the Property are the responsibility of Agent, and Agent shall be
in all respects the employer of such employees.
(b) Agent shall fully comply with all applicable laws and regulations
having to do with workers' compensation, social security, unemployment
insurance, hours of labor, wages, working conditions and other employer-
employee related subjects.
(c) In the event that Agent's employees are engaged to work in
connection with other properties than the Property, wages and other
expenses with respect to such work shall be allocated between properties,
which allocations shall be subject to review by Owner.
2.04 Enforcement of Leases. Agent shall use diligent efforts to enforce
the terms of all tenant leases and to collect all rents (including tenants'
obligations to pay a portion of operating expenses, taxes and common area
maintenance charges) and other charges which may become due at any time from any
tenant or from others for services provided in connection with or for the use of
the Property, or any portion thereof. All monies so collected shall be
deposited in the "Operating Account" (as that term is defined in Section 3.01
herein).
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2.05 Compliance with Leases, Laws and Mortgages. Agent shall fulfill all
the obligations of the Owner as landlord under leases pertaining to the Property
which shall, however, be in the name of and executed by Owner as landlord.
Agent shall operate the Property in compliance with federal, state and local
laws, ordinances, regulations and orders and the terms of the local Board of
Fire Underwriters or similar body, any space lease, ground lease, and lien or
security instrument affecting or encumbering the Property or Building; and Agent
shall immediately provide Owner with written notice of any violation or default
pursuant to any of the foregoing and shall remedy same. From the Operating
Account, Agent shall make payments due to ground lessors or mortgagees of the
Property.
2.06 Notification to Owner. In addition to all other notices provided for
herein, Agent shall, to the extent of its knowledge, promptly notify Owner of
all material adverse matters concerning the Property, including, without
limitation:
(a) all lawsuits, condemnation proceedings, zoning or any other
governmental orders, notices, actions or threats that may adversely affect
the Property;
(b) any major and material claim made by a tenant that Agent or Owner
has failed to perform any obligations of Owner or Agent under any lease or
agreement to which the Agent or Owner is a party;
(c) the occurrence of any fire or other casualty on or about the
Property or any other personal injury or property damage (such notice to be
in compliance with the requirements of all insurance policies), and Agent
shall permit insurance adjustors to view damages before repairs are started
except for emergency situations;
(d) any requirement of any insurance carrier or of any governmental
agency with respect to the Property;
(e) any material offers to purchase the Property; and
(f) the actual or suspected presence, use, storage, release,
disposal, or transport of any radioactive, hazardous, regulated, or toxic
substance or material on, about, or from any of the Property, the presence,
use, storage, release, disposal or transport of which either (i) is
prohibited or
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otherwise regulated by any now or hereafter existing local, state, or
federal statute, ordinance, rule, regulation, or the like or (ii) poses or
may pose a risk to the health, safety or physical well-being of persons.
2.07 Books and Records. Agent shall maintain separate, complete and
identifiable records and files, in the format required by Owner, on all matters
pertaining to the Property and Building, including, but not limited to, all
revenues and expenditures, service contracts and leases. Said books and records
shall be kept at the offices of Agent in the Building or such other place as
Owner and Agent from time to time agree. Agent shall keep accurate and complete
books and accounts in accordance with tax basis accounting principles,
consistently applied, showing operations and transactions relating to the
Property and showing (provided that Owner furnishes appropriate information to
Agent) the assets, liabilities, and financial condition of the Property. Agent
shall be responsible for developing a comprehensive accounting system consistent
with the aforesaid goals, and for conducting all internal audits at the
Property. Owner's duly authorized representatives shall at all times during
regular business hours have the right to audit said records and books.
2.08 Reports and Reconciliation of Accounts. On or before the tenth (10th)
day of each month during the Term or as otherwise directed by Owner, Agent shall
provide to Owner such reports pertaining to the Property as are required by
Owner in the form as specified in the Policy Manual.
2.09 Contracts.
(a) Unless otherwise requested by Owner, all contracts relating to the
operation of the Property shall be in the name of and executed by Agent on
behalf of Owner, subject, however, to Owner's prior written approval of the
terms and conditions of all such contracts, and all of such contracts shall
be terminable upon the giving of thirty (30) days written notice.
(b) Agent may not enter into contracts pertaining to the Property
with parties affiliated with, under the common control of or controlled by
Agent unless specifically consented to in writing by Owner. Unless
specifically consented to in writing by Owner, personnel of Agent may not
be used to provide services which could be provided by outside
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personnel or agencies (including, but not limited to, landscaping and HVAC
maintenance).
(c) Agent shall use reasonable efforts to require that each
independent contractor indemnify and save harmless Owner and any partners
of Owner and its officers, directors, agents, employees, and subsidiaries
from and against all liability, claims and demands on account of injury to
persons (including death) and damage to property arising out of or
resulting from the willful misconduct or gross negligence of the
independent contractor, or employees or agents of the independent
contractor, in the performance of the contract or work by the independent
contractor, its employees, or agents, or from the independent contractor's
property. Agent shall also use reasonable efforts to induce the
independent contractor and such agents to agree that such independent
contractor and such agents shall, at its expense, (i) defend any and all
suits or actions against Owner or a partner of Owner and/or Agent brought
as a result of any such willful misconduct or gross negligence, (ii) pay
all reasonable attorneys' fees and all other expenses in connection
therewith, and (iii) promptly discharge any judgments arising therefrom.
Before engaging any independent contractor, Agent shall cause each such
independent contractor to provide Owner with evidence of any insurance
Owner, in its reasonable judgment, deems that such independent contractor
should carry.
(d) Agent shall be specifically responsible for the periodic review of
all laundry, cable television and similar service contracts which may be in
effect at the Property.
2.10 Property Taxes. Agent shall promptly send to Owner upon receipt
copies of all notices of assessment or reassessment and tax bills affecting the
Property. Agent shall (i) pay such taxes, (ii) take full advantage of all
discounts available in connection with the payment thereof and (iii) promptly
send to Owner receipted copies of all tax bills, provided that Owner provides
Agent with all funds required to make such payments. Agent shall be responsible
for administering all tax appeals.
2.11 Construction Management. Agent shall advise Owner on performance of
construction, reconstruction and renovation work at the Property and, at the
request of Owner, shall act as construction manager with respect to such work.
Such service shall include, without limitation, coordination with the Owner and
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Owner's architect of the planning of all work, obtaining of bids from trade
contractors, administration of all contracts and the performance thereof by
trade contractors and subcontractors and liaison with Owner, Owner's architect
and any tenants for whom work is being performed.
ARTICLE III
BANK ACCOUNTS
3.01 Operating Account. Agent shall deposit all rents and other funds
collected from the operation of the Property, including but not limited to any
and all advance funds in a special account (the "Operating Account") for the
Property in the name of Owner in a federally insured financial institution
designated or approved by Owner. Agent and Owner shall each be authorized
signatories on the Operating Account. Out of the Operating Account, Agent shall
pay the operating expenses of the Property and any other payments relative to
the Property as permitted by the terms of this Agreement. The balance in the
Operating Account shall be transferred at such times as may be designated by
Owner to Agent in writing from time to time, to an account of Owner at the
financial institution designated by Owner.
3.02 Security Deposits. Agent shall deposit tenant security deposits in a
special account in the name of Owner in a financial institution designated by
Owner. Agent and Owner shall each be authorized signatories on the account.
Agent shall maintain detailed records of all security deposits, which records
may be inspected by Owner's employees or appointees.
ARTICLE IV
BUDGETS AND EXPENDITURES
4.01 Business Plan. Within twenty (20) days after the Commencement Date
with respect to the first calendar year of the Term, and no later than October
15th of each year during the Term with respect to any subsequent calendar years
(or at such other date as designated by Owner, but no more frequently than once
during each twelve month period), Agent shall prepare, in the form specified in
the Policy Manual, and submit to Owner for Owner's approval a Business Plan
(following Owner's approval, the "Approved Budgets") for the management and
operation of the Property and Building for the forthcoming twelve month period
which shall
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include an Operating Budget (following Owner's approval, the "Approved Operating
Budget") and a Capital Budget (following Owner's approval, the "Approved Capital
Budget"). Budget line items shall include:
(a) costs of the gross salary and compensation, or pro rata share
thereof, including, but not limited to, payroll taxes, insurance, workers'
compensation and other benefits, of any of Agent's staff whose full-time,
on-site duties involve the day to day operation or management of the
Property;
(b) costs necessary for the management, operation, and maintenance of
the Property; and
(c) any and all capital expenditures authorized by Owner and directed
by Owner to be incurred.
4.02 Expenses Paid from Operating Account. All expenditures contemplated
to be paid from the Operating Account are limited to the extent that such costs
and expenses are authorized by this Agreement and in the Approved Budgets then
in effect.
4.03 Insufficient Income. If at any time the cash in the Operating Account
shall not be sufficient to pay the bills and charges which have been or may be
incurred with respect to the Property and which are payable from the Operating
Account, Agent shall notify Owner immediately upon first projection or awareness
of a cash shortage or pending cash shortage.
4.04 Limitation on Payments. Under no circumstances shall Agent pay or
obligate Owner to pay, or otherwise incur any liability of any kind or nature
for, any cost or expense other than those expressly provided for and authorized
under the Approved Budgets in effect from time to time. Notwithstanding Owner's
approval of the Approved Capital Budget, no expenditure may be made for items
appearing thereon until Owner has authorized such expenditure.
ARTICLE V
INSURANCE AND INDEMNIFICATION
5.01 Insurance. Agent shall recommend to the Owner the insurance coverage
it considers appropriate for the Property. Upon approval by Owner, Agent shall
be responsible for the placement of
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all insurance, adjustment of any losses covered by such insurance and the
institution of appropriate safety procedures at the Property which will minimize
insurance claims to the extent possible. Throughout the Term, Agent shall
maintain in full force and effect the following kinds of insurance covering its
operations on the Property, in amounts and with coverages satisfactory to Owner,
(with the insurance described in (a) below to be maintained at Owner's expense
and the insurance described in (b), (c), (d) and (e) below to be maintained at
Agent's expense):
(a) worker's compensation and employer's liability insurance,
covering only full time, on-site employees at the Property;
(b) comprehensive general liability insurance, including coverage for
personal injury and coverage concerning the contractual liability of Agent
to Owner described in Section 5.04 herein, with Owner named as an
additional insured;
(c) comprehensive automobile liability insurance, when the services
to be performed require the use of a motor vehicle, with Owner named as an
additional insured;
(d) a fidelity bond, in the name or for the benefit of Owner, in an
amount of not less than $1,000,000.00, the coverage of which shall include,
but not be limited to, Agent and all employees of Agent who handle any
income derived from the Property, with Owner named as loss payee; and
(e) worker's compensation and employer's liability insurance covering
Agent's employees not included in the insurance described in (a) above,
with Owner named as an additional insured.
5.02 Certificates and Policies of Insurance.
(a) Certificates of the insurance coverages as described above shall
be delivered to Owner on or before the Commencement Date, evidencing that
such insurance is in force, together with copies of the policies (certified
as true, correct, and complete by the insurer) of insurance to which such
certificates refer. Within fifteen (15) calendar days prior to expiration
of any such insurance coverage, new certificates shall be delivered,
certified as aforesaid, evidencing renewal of such insurance coverage.
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(b) All certificates must contain waiver of subrogation clauses and
must provide that if such policies are canceled or changed during the
period of coverage as cited therein in such manner as to affect the
insurance coverage, written notice will be mailed to Owner and Agent by
registered or certified mail delivered at least thirty (30) calendar days
prior to such cancellation or change (and such certificates shall include
no language absolving the issuer thereof from liability for its failure so
to provide such notice).
5.03 Owner's Liability Insurance. Owner agrees to carry comprehensive
general liability insurance and such other insurance as Owner may determine to
be necessary for the protection of the interests of Owner and Agent, the carrier
and the amount of coverage in each policy to be decided upon by Owner in Owner's
reasonable judgment, or Owner may elect to self-insure.
5.04 Agent's Responsibilities. Except to the extent Owner is reimbursed
under any insurance policy covering such risks (or would have been reimbursed by
an insurance policy except for the fact that Owner elects to self-insure against
such risks), Agent shall be liable to Owner for, and shall indemnify and hold
harmless Owner from, any and all claims, demands, causes of action, debts,
liabilities, judgments, damages and expense, including, without limitation,
costs and reasonable attorneys' fees in connection with the enforcement of this
indemnity (collectively, the "Claims"), which may be incurred by or made against
Owner arising out of (a) the gross negligence, willful misconduct, fraud, breach
of trust, illegal acts or intentional misrepresentation of Agent or its
employees, or (b) a material breach by Agent or its employees of an express and
clear provision of this Agreement; provided however, Agent and its employees
shall not be liable for, and shall not be required to indemnify Owner from, any
Claims caused by the acts or omissions by Agent or its employees and reasonably
believed in good faith by the party so acting to be within the scope of the
authority granted Agent or any other party under this Agreement or under any
contract or agreement authorized hereby.
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ARTICLE VI
COMPENSATION OF AGENT
6.01 Management Fee.
(a) Owner agrees to pay Agent, and Agent agrees to accept as full
compensation for the services to be rendered to Owner hereunder during the
Term hereof, a sum (the "Management Fee") equal to five percent (5%) of the
"Gross Monthly Collections" (as defined below) from the Property when, as,
and only to the extent actually collected from the Property. The Management
Fee shall be payable monthly in arrears, commencing upon the last day of
the first month or partial month, as the case may be, of the Term.
(b) "Gross Monthly Collections" shall mean the total gross monthly
collections received from the Property as a result of rental of all or any
portion of the Property, excluding, however, security deposits, payment of
money by a tenant or any other person or entity to Owner or Agent in
consideration for or in conjunction with a security deposit, fire loss
proceeds, condemnation proceeds, proceeds received by Owner in connection
with the sale of any portion of the Property or personal property located
upon the Property, and the refinancing of any indebtedness secured by a
lien on any portion of the Property or otherwise related to the operation
of the Property.
ARTICLE VII
TERMINATION
7.01 Obligations Upon Termination. Upon termination for whatever cause,
Agent shall, not later than the effective date of termination of this Agreement,
deliver to Owner the original of all books, permits, plans, records, leases,
licenses, contracts and other documents pertaining to the Property and their
operation, all insurance policies, bills of sale or other documents evidencing
title or rights of Owner, and any and all records or documents, whether or not
enumerated herein, which are necessary or desirable for the ownership and
operation of the Property. Agent shall assign unexpired service and supply
contracts to Owner or parties designated by Owner. All personal property
(including, but not limited to, capital equipment, hardware, trade and non-trade
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fixtures, materials and supplies) acquired pursuant to this Agreement, whether
paid for directly by Owner or by way of reimbursement to Agent, shall become the
property of Owner and shall remain at the Property after the termination of this
Agreement in accordance with its terms, unless Owner shall request Agent to
remove said property. The obligations set forth in this paragraph shall be in
addition to any and all other rights, liabilities and obligations created under
this Agreement and as provided by law.
7.02 Remedies. Owner's remedy to terminate this Agreement pursuant to the
terms of this Article VII shall not be exclusive, and in the event of any
default by Agent, the Owner shall be entitled to exercise any and all other
remedies and rights of Owner set forth herein or available at law or in equity
(unless expressly waived in writing by the Owner). The sole remedy of Agent in
the event of wrongful termination by Owner shall be to ▇▇▇ Owner for the loss of
its Management Fee during the applicable period. In no event shall Agent be
entitled to the recovery of special or consequential damages, nor shall Agent be
entitled to hold over at the Property after termination by Owner. Failure of
Agent to comply for any period with the provisions of Section 7.01 shall render
Agent liable to Owner for liquidated damages in the amount of three (3) times
the Management Fee which would have been payable to Agent during such period had
this Agreement not been terminated.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.01 Headings. The headings used herein are for purposes of convenience
only and should not be used in construing the provisions hereof.
8.02 Notice. Any notice, demand or communication required or permitted
hereunder shall be given in writing and shall be deemed received (a)
immediately upon delivery in person; (b) three (3) days after being deposited
in the U.S. mail by certified mail, postage prepaid; or (c) the first business
day after being deposited with a recognized overnight courier service (which
courier services shall include, by way of illustration but not limitation,
Federal Express). Each such notice shall be addressed to the party to receive
such communication at the following address:
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If to Owner:
Continental Mortgage and Equity Trust
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
If to Agent:
Carmel Realty Services, Ltd.
c/o Basic Capital Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
or other address as any party may hereafter designate by written notice to the
other parties hereto.
8.03 Relationship of the Parties. Agent is an independent contractor hired
by Owner pursuant to the terms hereof. Nothing contained in this Agreement, nor
any acts of the parties hereto, shall be deemed or construed by the parties
hereto, or either of them, or any third party, to create the relationship of
principal and agent or a partnership or a joint venture between the parties
hereto.
8.04 Entire Agreement. This Agreement represents the entire agreement
between the parties with respect to the subject matter hereof, and to the extent
inconsistent therewith, supersedes all other prior agreements, representations,
and covenants, oral or written. Amendments to this Agreement must be in writing
and signed by all parties hereto.
8.05 Assignment. Owner shall have the right, at any time and from time to
time, in its sole discretion, to assign its rights and obligations hereunder to
a third party acquiring the Property provided that any such third party enters
into a written agreement assuming Owner's obligations hereunder. Agent may not
assign its rights and obligations hereunder.
8.06 Legal Representatives, Successors, Transfers and Assigns. This
Agreement shall be binding upon and inure to the benefit of Owner and Agent and
their respective legal representatives,
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successors, transfers and assigns (but nothing contained herein shall be
interpreted to permit any assignment not otherwise expressly permitted by
another provision of this Agreement).
8.07 Attorneys' Fees. In the event of any controversy, claim or action
being filed respecting this Agreement or in connection with the Property, the
prevailing party shall be entitled, in addition to all other expenses, costs or
damages, to recover its reasonable attorneys' fees actually incurred, at
prevailing hourly rates of the attorney or law firm in question.
8.08 Time of the Essence. Time is of the essence of this Agreement.
8.09 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED.
8.10 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal for any reason
whatsoever, such provision shall be severed from the Agreement and shall not
affect the validity of the remainder of this Agreement.
8.11 No Interest in Condemnation or Insurance Proceeds. Agent shall not
have any interest in or claim to any condemnation proceeds for the Property
awarded to Owner or any insurance proceeds paid to Owner with respect to any
casualty to the Property; provided, however, that nothing contained herein shall
prevent or be deemed to prevent Agent from pursuing or seeking an award separate
from Owner's award in any condemnation proceeding or separate claim under any
insurance policy.
8.12 Mutual Waiver. The failure by any party to exercise any right or
power given herein or by law, or to insist upon strict compliance by any other
party with any obligation imposed hereunder, shall in no event constitute a
waiver of such party's right to demand full and complete compliance with each
and every provision hereof or to exercise and enforce all available powers
and remedies.
8.13 Owner's Operating Procedures. Agent shall comply with such reasonable
rules and regulations governing operations of the Property as Owner shall from
time to time establish and make known to Agent.
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8.14 Asbestos and Toxic Wastes. Agent shall not cause any toxic wastes to
be placed upon the Property. Agent covenants that it will use reasonable
efforts to prevent the storage, emission or disposal of any dangerous, toxic or
hazardous pollutants of any sort on the Property. Agent hereby indemnifies and
holds harmless Owner from and against any loss, cost, damage or liability,
including, but not limited to, court costs and attorneys' fees, in connection
with the occurrence of any environmental hazard on the Property (as listed
above) resulting from its negligence.
8.15 Other Engagements. Owner acknowledges and consents to the fact that
Agent may be engaged in providing to other owners of other buildings in the area
of the Building, the same or similar services which Agent is providing herein
and that such engagement shall not be or be deemed to be a conflict of interest
or a breach of Agent's fiduciary duty to Owner.
8.16 Subordination. Agent shall not have any right or interest in the
Property nor any claim of lien with respect thereto. This Agreement and the
rights of Agent hereunder are and shall be subordinate to any deed to secure
debt, mortgage, deed of trust, security agreement, or other security instrument
now existing or hereafter made encumbering the Property and executed and
delivered by Owner to secure any indebtedness of Owner with respect to the
Property. Agent does hereby agree that this Agreement and all of the rights,
duties, and liabilities of Agent hereunder will be terminated as to the Property
if the holder of any such deed to secure debt, mortgage, deed of trust, security
agreement or other security instrument succeeds to all of the beneficial right,
title, and interest of Owner in and to the Property by virtue of the appointment
of a receiver, foreclosure, acceptance of a deed in lieu of foreclosure, or
otherwise.
8.17 Delegation of Duties: It is specifically agreed that Agent at Agent's
own expense may engage any entity or entities of its choice for the performance
of day-to-day management and operation of the Property as Agent deems necessary
or appropriate; provided, however, that Agent shall be responsible for continual
supervision of any such subagent so as to ensure the performance of such
delegated duties by such subagent in a professional manner in accordance with
this Agreement; and further provided that Agent may not delegate its
responsibilities with respect to (i) developing a comprehensive accounting
system and conducting internal audits under Section 2.07, (ii) reviewing service
contracts under Section 2.09, (iii) administering property taxes under Section
2.10, (iv)
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performing construction management services under Section 2.11 or (v)
administering insurance and workplace safety procedures under Section 5.01.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed and delivered, as of the day and year first above written.
"OWNER"
CONTINENTAL MORTGAGE AND EQUITY TRUST, a
California Real Estate Investment Trust
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Assistant Secretary
"AGENT"
CARMEL REALTY SERVICES, LTD., a
Texas partnership
By Its General partner
BASIC CAPITAL MANAGEMENT, INC.
a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
Attest: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
Assistant Secretary
(CORPORATE SEAL)
19
EXHIBIT "A"
CONTINENTAL MORTGAGE AND EQUITY TRUST RESIDENTIAL LISTING 02/01/96
NO. PROJECT ENTITY METRO (CITY) ST ADDRESS ZIP CODE
==============================================================================================================
1. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ 4242 CEDAR SPRINGS 75219
2. APPLE CREEK CMET DALLAS TX 9874 ▇▇▇▇ CREST 75220
3. CAMELOT CMET TAMPA (LARGO) FL ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
4. COUNTRY CROSSINGS ▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇ ▇▇▇▇▇▇▇) ▇▇ ▇▇▇▇-▇ ▇▇▇▇▇▇▇ ▇▇▇ COURT 33617
5. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
6. EAGLE ROCK CMET LOS ANGELES CA 4323 EAGLE ROCK BLVD. 90036
7. EL CHAPARRAL CMET SAN ANTONIO TX 3819 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 78209
8. FAIRWAYS CMET LONGVIEW TX 3623 ▇▇▇▇▇▇ ▇▇. 75605
9. FOREST RIDGE CMET DALLAS (DENTON) TX 1810 WESTMINSTER 76205
10. FOUNTAIN LAKE CMET TEXAS CITY TX 9001 GLACIER 77591
11. GLENWOOD CMET ADDISON TX 3800 SPRING VALLEY ROAD 75244
12. GROVE PARK CMET PLANO TX 1705 JUPITER ROAD 75075
13. HERITAGE ON THE RIVER CMET JACKSONVILLE FL 4375 CONFEDERATE POINT 33210
14. MADISON AT BEAR CREEK CMET HOUSTON TX ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇
15. McCALLUM CROSSING CMET DALLAS TX 7720 ▇▇▇▇▇▇▇▇ BLVD. 75252
16. ▇▇▇▇▇▇▇▇ ▇▇▇▇ CMET DALLAS TX 7740 ▇▇▇▇▇▇▇▇ BLVD. 75252
17. OAK PARK IV CMET FREEPORT (CLUTE) TX 202 HACKBERRY 77531
18. OAK RUN CMET HOUSTON (PASADENA) TX 4100 VISTA 77504
19. PARK AT COLONNADE CMET SAN ANTONIO TX 3815 PARKDALE DRIVE 75220
20. PARK LANE VILLAGE CMET DALLAS TX 3040 PARK LANE 75220
20
CONTINENTAL MORTGAGE AND EQUITY TRUST RESIDENTIAL LISTING 02/01/96
NO. PROJECT ENTITY METRO (CITY) ST ADDRESS ZIP CODE
==============================================================================================================
21. PARKWOOD ▇▇▇▇▇ CMET SAN BERNARDINO (HIGHLAND) CA ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇
22. ▇▇▇▇▇▇ TOWER CMET DENVER CO ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
23. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇▇▇) ▇▇ ▇▇▇▇▇ QUAIL DR. 75180
24. SHADOW RIDGE CMET ROCK SPRINGS WY ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
25. SOMERSET PLACE CMET TEXAS CITY TX 2020 ▇▇▇▇ ▇▇. ▇. ▇▇▇▇▇
26. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ INTERSTATE ▇▇ ▇. ▇▇▇▇▇
27. SUNSET LAKE CMET CHICAGO (WAUKEGAN) IL ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., MANAGER 60087
28. TRAILS OF WINDFERN CMET HOUSTON TX 13035 WINDFERN 77064
29. WILLOW CREEK CMET EL PASO TX 4848 N. MESA RD. 79912
30. WILLOW WICK (SC) CMET NORTH AUGUSTA SC ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇
31. ▇▇▇▇▇-▇▇▇▇ GARDENS (FL) CMET PENSACOLA FL ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
32. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ PECOS, #109 80221
21