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EXHIBIT 6.2
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MANAGEMENT AND LEASING AGREEMENT
EDISON BUILDING
DECEMBER 31, 1997
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TABLE OF CONTENTS
Page
ARTICLE I: EXCLUSIVE AGENCY...........................................1
1.1 Appointment................................................1
ARTICLE II: TERM OF AGREEMENT..........................................1
2.1 Initial Term: Option to Renew.............................1
2.2 Owner Rights Regarding Termination.........................2
2.3 Manager Rights Regarding Termination.......................2
2.4 Force Majeure; Cure Rights.................................3
2.5 Continuing Obligations Upon Termination....................4
ARTICLE III: BUSINESS PLAN, BUDGET AND ACCOUNTING.......................4
3.1 Preparation of Budget......................................4
3.2 Accounting.................................................4
3.3 Books and Records..........................................5
3.4 Reports to Owner...........................................5
3.5 Financial Information......................................5
3.6 Method of Accounting.......................................5
ARTICLE IV: MANAGEMENT OF PROJECT......................................6
4.1 General Duties and Responsibilities........................6
4.2 Leasing the Project........................................7
4.3 Construction...............................................8
4.4 Limitation of Authority....................................8
ARTICLE V: METHODS OF OPERATION.......................................8
5.1 Contracts..................................................8
5.2 Compliance with Laws.......................................9
5.3 Licenses and Permits.......................................9
5.4 Hazardous Materials........................................9
5.5 Employees.................................................10
5.6 Legal Counsel.............................................10
ARTICLE VI: INFORMATION TO BE PROVIDED BY OWNER.......................10
6.1 Information...............................................10
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ARTICLE VII: FINANCIAL MATTERS.........................................11
7.1 Bank Accounts.............................................11
7.2 Audits....................................................11
ARTICLE VIII: INSURANCE AND INDEMNIFICATION.............................11
8.1 Indemnity and Subrogation.................................11
8.2 Project Insurance.........................................13
8.3 Manager's Responsibilities................................15
8.4 Employee Insurance........................................15
ARTICLE IX: COMPENSATION OF MANAGER...................................15
9.1 Management Fee............................................15
9.2 Additional Compensation...................................15
9.3 Employee Compensation.....................................15
9.4 Management Office.........................................16
9.5 Out-of-Pocket Expenses....................................16
9.6 Method of Payment.........................................16
ARTICLE X: GENERAL PROVISIONS........................................17
10.1 Independent Contractor....................................17
10.2 Notices...................................................17
10.3 Attorney's Fees...........................................17
10.4 Assignments...............................................17
10.5 Amendments................................................18
10.6 Entire Agreement..........................................18
10.7 Governing Law; Venue......................................18
10.8 Cooperation and Assistance................................18
10.9 Waiver....................................................18
10.10 Severability..............................................18
10.11 No Obligation to Third Party..............................18
10.12 Captions..................................................19
10.13 Time of Essence...........................................19
10.14 Counterparts..............................................19
10.15 Non-Discrimination........................................19
10.16 Certain Interpretative Matters............................19
EXHIBIT "A" DESCRIPTION OF PROJECT....................................21
EXHIBIT "B" INFORMATION TO BE PROVIDED BY OWNER.......................22
EXHIBIT "C" MANAGEMENT FEE............................................23
EXHIBIT "D" SCHEDULE OF LEASING COMMISSIONS...........................24
EXHIBIT "E" CONSTRUCTION MANAGEMENT FEES..............................25
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COMMERCIAL PROPERTY MANAGEMENT AND
LEASING AGREEMENT
(multi-tenant office building)
THIS COMMERCIAL PROPERTY MANAGEMENT AND LEASING AGREEMENT (the
"Agreement") is dated as of December 31, 1997, and is entered into by and
between EBS BUILDING, L.L.C., a Delaware limited liability corporation
("Owner"), and INSIGNIA COMMERCIAL GROUP, INC., a Delaware corporation
("Manager").
BACKGROUND
A. Owner owns that certain real estate project improved
with buildings and related parking facilities and common areas commonly known as
The Edison Building which is more particularly described on EXHIBIT "A" of this
Agreement and hereinafter referred to as the "Project".
B. Owner desires to engage Manager as Owner's exclusive
agent to lease, manage and operate the Project, and Manager desires to accept
such engagement upon the terms set forth herein.
C. This Agreement shall be subject and subordinate to
any deed of trust encumbering the Project and, at the option of the beneficiary
of any such deed of trust or any transferee of title to the Project by virtue of
foreclosure of the lien of such deed of trust, Manager shall attorn to and
recognize such beneficiary or transferee as the successor to Owner of the
Project, and Manager shall thereupon continue to perform Manager's covenants
hereunder.
STATEMENT OF AGREEMENT
In consideration of the foregoing recitals and the mutual
promises and covenants contained herein, Owner and Manager agree as follows:
ARTICLE 1
EXCLUSIVE AGENCY
1.1. APPOINTMENT. Owner hereby appoints Manager as the
sole and exclusive leasing agent and manager of the Project and Manager hereby
accepts such appointment, upon the terms, covenants and conditions set forth
herein.
ARTICLE II
TERM OF AGREEMENT
2.1. INITIAL TERM: OPTION TO RENEW. Except as provided in
Section 2.2 below, the term of this Agreement for all leasing activities shall
commence on January 1, 1998, and for all management activities the term of this
Agreement shall commence on February 1, 1998. The term of this Agreement shall
continue through and including January 31, 2000. Owner shall thereafter have
successive option rights to extend the term of this Agreement for
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consecutive, additional periods of one (1) year each, but in no event shall this
Agreement survive that certain Members Agreement dated as of September 26, 1997
(the "Members Agreement"). Each such renewal of this Agreement shall be
automatic unless either party provides written notice to the other of its
election to terminate this Agreement not less than ninety (90) days prior to the
initial term or succeeding option term, as the case may be.
2.2. OWNER RIGHTS REGARDING TERMINATION. Notwithstanding the
provisions of Section 2.1 above, this Agreement shall terminate upon the
happening of any of the following:
(a) Closing of the sale or exchange by Owner of the
Project or Owner's rights to collect the income therefrom, unless the transferee
elects prior to such closing and by written notice to Manager to assume the
obligations of Owner pursuant to this Agreement accruing subsequent to such
closing, and Manager consents to such assumption. If less than the entire
Project is sold or exchanged, such termination shall apply only to the portions
sold or exchanged.
(b) The fifteenth (15th) day after written notice from
Owner to Manager to terminate this Agreement or remove Manager for "just cause."
For purposes of this Section 2.2(b), "just cause" shall mean any one or more of
the following: (i) Manager's negligence, willful misconduct, fraud or
misappropriation of funds; (ii) Manager's failure to promptly and in good faith
comply with Owner's reasonable instructions or directions in connection with the
Project; or (iii) Manager's failure to carry out its duties hereunder or its
material breach of this Agreement, including any violation by Manager of
applicable law.
(c) Immediately upon the dissolution of Manager; the
filing by or against Manager of a petition seeking the adjudication of Manager
as a bankrupt; the appointment of a receiver to take possession of Manager's
assets or any substantial portion thereof; or any assignment by Manager for the
benefit of its creditors.
(d) Without cause with sixty (60) days prior written
notice to Manager, provided however that Manager shall be entitled to the
cancellation fee set forth in Section 2.3(a) below.
2.3. MANAGER RIGHTS REGARDING TERMINATION.
(a) In the event of a termination of this Agreement
pursuant only to Section 2.2(d) above, Owner shall pay to Manager in
consideration of such termination and prior to the effective date of such
termination, an amount (in addition to such other amounts as are accrued and
unpaid to Manager as of the effective date of termination) equal to two (2)
months management fee, as a cancellation fee hereunder.
(b) Notwithstanding the provisions of Section 2.1 above,
this Agreement shall terminate upon the happening of any of the following:
(i) The fifteenth (15th) day after written notice
from Manager to Owner to terminate this Agreement for "just cause". For purposes
of this Section 2.3(b)(i), "just cause" shall mean any one or more of the
following occurrences adversely affecting the
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ability of Manager to perform its duties or imposing a risk of liability on
Manager: any finding that all or any portion of the Project, or any sale, rental
or other disposition thereof, or any act or failure to act by Owner, does not
comply with, or is in violation of, the requirements of any law, rule,
regulation, statute, ordinance or requirement of any governmental entity or
authority; Owner's failure to provide Manager with information, documents,
signatures, authorizations, or any other item required that may be necessary or
appropriate for Manager to carry out its duties under this Agreement or Owner's
failure to provide to Manager sufficient funds, as needed, to pay all fees and
expenses of Manager to be paid pursuant to this Agreement and all costs and
expenses of the Project to be paid by Manager on behalf of Owner pursuant to
this Agreement.
(ii) Immediately upon the dissolution of Owner; the
filing by or against Owner of a petition seeking the adjudication of Owner as a
bankrupt; the appointment of a receiver to take possession of the Project or any
substantial portion of Owner's assets; or any assignment by Owner for the
benefit of creditors.
(iii) Without cause with sixty (60) days prior
written notice to Owner.
2.4. FORCE MAJEURE; CURE RIGHTS.
(a) The obligations of Owner and of Manager under
this Agreement (except the obligation of Owner to provide funds to Manager for
the timely payment of fees and expenses of Manager and expenses of the Project
to be paid by Manager on behalf of Owner pursuant to this Agreement ) shall be
excused for that period of time that Owner or Manager, as applicable, cannot
fulfill such obligations by reason of delays beyond its control, including
without limitation acts of God, inclement weather, war, insurrection, labor
strikes, inability to obtain necessary materials or supplies, inability to
obtain necessary permits, licenses or approvals, or any other event commonly
included within the definition of force majeure.
(b) Notwithstanding the provisions of Sections 2.2(b)
and 2.3 above, in the event of written notice of termination for "just cause",
this Agreement shall not terminate if the party receiving such notice cures the
alleged breach (other than willful misconduct or fraud, neither of which shall
be subject to cure) within the fifteen (15) day notice period (or, for any
nonmonetary breach which cannot be cured within such fifteen (15) day period,
provided that the defaulting party commences such cure within the 15-day period
and thereafter diligently and continuously prosecutes such cure to completion).
2.5. CONTINUING OBLIGATIONS UPON TERMINATION. Upon the
termination of this Agreement by any means (but subject to Owner's rights of set
off for any claims of Owner under section 2.2(b)):
(a) Owner shall remain bound by all contracts entered
into by Manager in the name of Owner within the limitations contained in this
Agreement and hereby agrees and acknowledges that it shall remain obligated to
the Manager for all management fees earned by the Manager through the date of
termination and for all reimbursements due to the Manager pursuant to this
Agreement.
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(b) Manager shall remain obligated:
(i) To render to Owner a final accounting of income
and expenses of the Project as provided in this Agreement.
(ii) To deliver to Owner all income and all security
deposits from the Project which have been entrusted to Manager and not
previously refunded after reimbursement of all expenses and payment of all
management fees which Manager is entitled to receive.
(iii) To deliver to Owner all keys, books and
records, contracts, leases, receipts, unpaid bills and other documents relative
to the Project which are in Manager's possession or have otherwise been
entrusted to Manager and have not been previously returned.
(iv) To use reasonable efforts and to cooperate with
Owner (and at no additional cost to Owner) to cause an orderly transition of the
management of the Project without detriment to the rights of Owner or to the
continued management of the Project.
ARTICLE III
BUSINESS PLAN, BUDGET AND ACCOUNTING
3.1. PREPARATION OF BUDGET. Manager shall prepare and
submit to Owner a business plan and proposed budget for the promotion,
operation, repair and maintenance of the Project for the forthcoming fiscal
year. The business plan and proposed budget for the 1998 fiscal year shall be
delivered to Owner by not later than April 1, 1998. Thereafter, each business
plan and proposed budget shall be delivered to Owner by no later than November 1
of each year. Owner will consider each proposed budget and will consult with
Manager in the period prior to the commencement of the forthcoming fiscal year
in order to agree upon an "Approved Budget."
3.2. ACCOUNTING. Manager shall use diligence and employ
reasonable efforts to assure that the actual costs of managing, maintaining an
operating the Project do not exceed the Approved Budget. During the fiscal year
Manager shall inform Owner of any material increases in costs and expenses that
were not reflected in the Approved Budget and shall secure Owner's prior
approval for any expenditure that will result in an increase of whichever of the
following is greater (herein considered a "material increase"): in excess of ten
percent (10%) of the annual budgeted amount in any one accounting category of
the Approved Budget or $10,000.00.
3.3. BOOKS AND RECORDS. Manager shall maintain accurate
books and records for the Project on a segregated basis (not combined with other
properties), in accordance with generally accepted accounting principles,
consistently applied, with complete supporting documentation to ensure that all
entries in the books and records are accurate and complete. Such books and
records shall be maintained by Manager at its address stated herein or at such
other location as may be mutually agreed upon in writing. Manager shall take all
necessary and prudent steps to exercise such control over accounting and
financial transactions so as to protect Owner's assets from theft or fraudulent
activity on the part of Manager's employees.
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3.4. REPORTS TO OWNER. Manager shall, by the twentieth
(20th) day of each month, furnish to Owner an accounting of receipts and
disbursements for the immediately preceding month. Such accounting shall show
collections, delinquencies, uncollectible items, vacancies and other matters
pertaining to the management, operation and maintenance of the Project during
the month (the "Monthly Report"). The accounting shall also include a comparison
of monthly and year-to-date actual income and expense with the Approved Budget
for the Project and such other information as reasonably requested by Owner. In
addition, if such funds are not in the Owner's account, Manager shall remit to
Owner all unexpended funds, after deducting the management fees and
reimbursements due to Manager and a reserve for contingencies in the amount set
forth in the Approved Budget or as may be otherwise agreed to from time to time
by Owner and Manager, along with such accounting.
3.5. FINANCIAL INFORMATION. Manager shall maintain, and supply
to Owner upon written request, copies of:
(a) All bank statements, bank deposit slips and bank
reconciliations;
(b) Detailed cash receipts and disbursement records;
(c) Paid invoices;
(d) Summaries of adjusting journal entries; and
(e) Any other information on the Project in Manager's
possession requested by Owner.
3.6. METHOD OF ACCOUNTING. All financial statements and
reports required hereunder will be prepared on a cash basis in accordance with
generally accepted accounting principles, consistently applied.
ARTICLE IV
MANAGEMENT OF PROJECT
4.1. GENERAL DUTIES AND RESPONSIBILITIES. Manager shall
manage, operate and maintain the Project in accordance with generally accepted
principles of sound property management using all due diligence and prudence in
performing its duties and otherwise in accordance with the general standards set
forth in this Article IV. Without limiting the generality of the foregoing,
Manager's functions hereunder shall include the following:
(a) Manager shall use reasonable efforts to collect
all rents 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
Project or any portion thereof. All funds received by Manager for or on behalf
of Owner (less any sums properly deducted by Manager pursuant to any of the
provisions of this Agreement) shall be deposited in a bank selected by Owner in
a special account maintained by Manager in the name of and at the expense of
Owner for the deposit of funds of Owner.
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(b) Manager shall, in the name of and at the expense
of Owner, make or cause to be made such ordinary repairs and alterations as
Manager may deem advisable or necessary to the improvements on the Project,
subject to and within the limitations of the Approved Budget; provided, however,
that Manager shall not expend more than Twenty Thousand Dollars ($20,000) for
any one item of repair or alteration without Owner's prior written approval,
except emergency repairs if, in the reasonable opinion of the Manager, such
repairs are necessary to protect the Project from further damage or to maintain
services to tenants as called for in their leases. The authority provided to
Manager in this paragraph shall not extend to capital improvements or the
associated tenant finish, refurbishing and rehabilitation or remodeling areas
covered by new leases. The latter expenditures are subject to the Owner's prior
approval which shall be given at the time of the execution of new leases and in
accordance with the provisions of this Agreement. Manager shall promptly inform
Owner of material increases (as defined herein) in repair and maintenance costs
not reflected in the Approved Budget.
(c) Manager shall, in the name of and at the expense
of Owner, contract for those utilities, and other building operation and
maintenance services and parking facility management that Manager shall deem
advisable; provided that all service contracts shall be for a term cancelable
upon thirty (30) days advance notice without penalty, with the exception of
elevator and alarm monitoring contracts, without prior written approval of Owner
and the cost of all such services shall be included in the Approved Budget or
otherwise approved in writing in advance by Owner. Manager shall at Owner's
expense, purchase and keep the Project furnished with all reasonably necessary
supplies. All services provided to the Project by parties other than Manager
shall be provided pursuant to valid, bona fide contracts entered into on an
arms-length basis and after competitive bidding conducted by Manager. Manager
shall disclose to Owner any and all affiliations between Manager or Manager's
affiliates, employees or owners, and other actual or prospective service
providers, and their affiliates, employees or owners. If Manager makes no such
disclosure as to any such service provider, Manager shall be deemed to have
represented and warranted that no such affiliation exists.
(d) Subject to the provisions of Section 7.3 below,
Manager shall pay at the expense of Owner, from the account or accounts provided
for in Section 7.1 below or from funds otherwise provided by Owner, expenses of
the Project, including without limitation real and personal property taxes,
payments due under service contracts, utilities, materials and supplies
necessary for the operation of the Project, and such other expenses as may be
incurred in connection with the operation and management of the Project in the
ordinary course of business or as set forth under this Agreement.
4.2. LEASING THE PROJECT. Manager's functions hereunder shall
include the following:
(a) Manager shall perform all promotional, marketing
and lease up activities with respect to the Project and use Manager's best
efforts to lease vacant space in the Project. All inquiries for any leases,
renewals or other agreements for the rental, use or occupancy of the Project or
portions thereof, shall be referred to Manager, and all negotiations connected
therewith shall be handled by or under direction of Manager and subject to
Owner's approval and review.
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(b) Subject to budgetary limitations in the Approved
Budget, Manager shall, at Owner's expense:
(i) advertise the Project or portions thereof,
(ii) prepare marketing plan, and brochures and
collateral materials for the Project,
(iii) engage with a "competent" architectural
firm or firms to provide computer-aided drawings (CAD) of the rentable areas of
the Project and space planning services for prospective tenants, subject to
Owner's prior approval,
(iv) engage with a competent real estate attorney
on an "as needed" basis for lease documentation, subject to Owner's prior
approval, and
(v) engage with competent consultants (public
relations, advertising) on an "as needed" basis subject to Owner's prior
approval.
(c) Notwithstanding contrary provisions in this
Agreement, if within sixty (60) days following the date of termination of the
Agreement the Project or portions thereof are contracted to be leased to any
person ["Manager Contact(s)"] pursuant to a proposal approved by Owner during
the term of the Agreement, a commission shall be payable to Manager in
accordance with EXHIBIT "D" hereof. Owner agrees that the sixty (60) day period
will be extended as long as negotiations continue with a Manager Contact(s).
Manager shall deliver to Owner a written notice within ten (10) days after such
termination, registering with Owner the names and addresses of all Manager
Contact(s), and Owner shall have ten (10) days after receipt of said list to
dispute the validity of such Manager Contact(s).
(d) Manager shall, in the Monthly Report, prepare a
report on the status of prospects, stacking plan and marketing activities for
the Project.
4.3. CONSTRUCTION. Manager shall manage all construction
activity at the Project, including tenant finish work, repairs, maintenance and
capital improvements and Manager shall complete such work in a workmanlike
manner in keeping with an office tower of the same class as the Project. Such
work shall be completed in accordance with plans and specifications approved by
Owner.
4.4. LIMITATION OF AUTHORITY. Notwithstanding any
provision in this Agreement to the contrary, Manager shall not without the prior
approval of Owner:
(a) Enter into any agreement to lease, convey or
otherwise transfer or pledge or encumber the Project or any other property or
asset of Owner;
(b) Institute or defend lawsuits except as otherwise
provided herein or other legal proceedings on behalf of Owner;
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(c) Pledge the credit of Owner (except for purchases
made in the ordinary course of operating the Project or as otherwise
contemplated pursuant to this Agreement); or
(d) Borrow money or execute any promissory note or
deed of trust, security agreement, guaranty or other encumbrance in the name of
or on behalf of Owner.
ARTICLE V
METHODS OF OPERATION
5.1. CONTRACTS. All service contracts, and (to the extent
they are within the scope of Manager's duties under this Agreement) all
contracts for capital improvements and all contracts for the improvement,
refurbishing or remodeling of tenant spaces ("Contracts") which (a) cover
expenditures included within the Approved Budget, or, are required by any
approved lease, or, are otherwise approved in advance by Owner, and (b) may be
with affiliates of Manager, and (c) meet the criteria set forth hereunder for
such Contracts or are approved in advance by Owner or otherwise meet criteria
established by Owner for such Contracts, shall be executed by Manager in the
name of, and as agent for Owner. Any or all such Contracts shall be subject to
Owner's prior approval. If required, any or all Contracts shall be executed by
Owner. All Contracts shall be with such contractors and service providers as
Manager may select from time to time. Upon any termination of this Agreement, to
the extent necessary, Manager shall assign all Contracts executed by Manager to
Owner. Owner will provide Manager with any additional documentation reasonably
necessary to establish Manager's authority to act as required hereunder. Upon
termination of this Agreement, Owner agrees to specifically assume Contracts
that are in the name of Manager. Notwithstanding anything to the contrary
contained in this Section 5.1, all contracts entered into by Manager or
presented to Owner by Manager shall be subject to the requirements of Section
4.1(c).
5.2. COMPLIANCE WITH LAWS. Subject to the other provisions
of this Agreement, at Owner's expense, Manager shall use reasonable efforts to
cause the Project to comply with federal, state and municipal laws, all known
ordinances, regulations and orders relative to the leasing, use, operation,
repair and maintenance of the Project and with the rules, regulations or orders
of the local Board of Fire Underwriters or other similar body. Manager shall use
reasonable efforts to remedy the violation of any such law, ordinance, rule,
regulation or order of which it has actual knowledge and which violation occurs
after the date hereof, at Owner's expense. Expenses incurred in so complying and
in correcting any such violation shall be included in the Approved Budget or
otherwise approved in advance by Owner. At Owner's expense, and if requested in
writing by Owner, Manager shall comply with all terms and conditions contained
in any ground lease, mortgage, deed of trust or other security instruments
affecting the Project of which Manager has actual knowledge and for remedying
any breach thereof. Notwithstanding the foregoing, however, Manager's
responsibilities under this Section shall not extend to matters as to which the
expenditure of Owner's funds is required but disapproved by Owner or such funds
are not made available by Owner.
5.3. LICENSES AND PERMITS. Manager shall apply for and
obtain and maintain in the name and at the expense of Owner all licenses and
permits required of Owner or Manager in
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connection with the management and operation of the Project. Owner agrees to
execute and deliver any and all applications and other documents and to
otherwise cooperate to the fullest extent with Manager in applying for,
obtaining and maintaining such licenses and permits.
5.4. HAZARDOUS MATERIALS. Owner acknowledges and
understands that Manager is not qualified to evaluate the presence or absence of
hazardous or toxic substances waste, materials, electromagnetic fields or
radioactive materials upon, within, above or beneath the Project, compliance
with hazardous materials or waste laws, rules and regulations, or the clean-up
or remediation of hazardous materials spills or contamination. Accordingly,
notwithstanding the provisions of Section 5.2 above, Manager's obligations to
Owner with respect to the presence of hazardous or toxic substances, waste,
materials, electromagnetic fields or radioactive materials upon, within, above
or beneath the Project (hereinafter collectively "Hazardous Materials") and/or
with the compliance and enforcement of federal, state and local laws, rules,
regulations, ordinances, and requirements relating to Hazardous Materials
(hereinafter collectively "Hazardous Materials Laws") shall be subject to,
conditioned upon, and limited by the following:
(a) In no event will the Manager make an independent
determination as to the presence or absence of Hazardous Materials or whether
the Project or any particular tenant space is in violation or compliance with
any Hazardous Materials Laws. The Manager's sole responsibility shall be to act,
at the direction of the Owner or Owner's environmental consultant, to (i)
undertake, on the Owner's behalf and at the Owner's expense, necessary actions
for the Owner to comply with Hazardous Materials Laws in accordance with the
environmental recommendations contained in the environmental assessment report,
and/or (ii) seek, on the Owner's behalf and at the Owner's expense, to enforce a
tenant's compliance with any Hazardous Materials Laws in accordance with the
environmental consultant's recommendations contained in the environmental
assessment report.
(b) The Manager shall have absolutely no
responsibility or obligation with respect to the clean-up and remediation of any
spill or contamination of any Hazardous Materials upon, beneath or within all or
any portion of the Project, not caused by Manager, its contractors, employees,
agents or invitees.
5.5. EMPLOYEES. Manager shall have in its employ or under
separate contract at all times a sufficient number of capable employees enabling
it to properly, adequately, safely and economically manage, operate and maintain
the Project. All matters pertaining to the employment, supervision,
compensation, promotion and discharge of such employees, as well as union
negotiations and compliance with laws and regulations dealing with employee
matters, are the responsibility of the Manager, which is in all respects the
employer of such employees. In the event that any expenses, including salaries
and any management office maintained by Manager, are attributable in part to the
Project and in part to other properties managed by Manager, such expenses shall
be prorated and apportioned between the respective properties on a reasonable
basis, provided, however, that no such expenses attributable to Manager's
leasing obligations hereunder shall be prorated to the Project, it being
understood and agreed that all of Manager's leasing personnel expenses shall be
borne by Manager. All employees of Manager who handle or
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are responsible for Owner's funds shall be covered by a fidelity bond. The
amount of such bond shall be reasonably determined by Owner and the premium
therefore shall be a cost of the Owner.
5.6. LEGAL COUNSEL. Manager shall, upon prior approval by
Owner and at Owner's request and expense, engage counsel and cause legal
proceedings to be instituted as may be necessary to enforce payment of rent and
compliance with provisions of tenant leases, or to dispossess tenants. Manager
shall use legal counsel selected and/or retained by Owner to assist as necessary
in lease and/or contract preparation and negotiation, to provide legal advice in
connection with management issues at the Property, and to institute legal
proceedings. All compromises, settlements, or legal proceedings shall be subject
to the prior approval of Owner. Attorneys' fees and costs incurred in any of the
foregoing shall be expenses of the Project. Owner and Manager shall agree upon a
reasonable projection for the attorneys' fees and costs in the Approved Budget.
ARTICLE VI
INFORMATION TO BE PROVIDED BY OWNER
6.1. INFORMATION. Within five (5) business days after
execution and delivery of this Agreement, to extent available to Owner, Owner
shall provide to Manager all information listed in EXHIBIT "B" attached hereto
and incorporated herein by reference, for Manager's use in connection with the
fulfillment of its duties under this Agreement. At all times during the term of
this Agreement, Owner shall provide to Manager such other or updated information
as Owner may obtain with respect to the Project; shall cooperate with Manager in
providing additional information or responding to questions Manager may have
with respect to the ownership and prior operation of the Project; and shall
assist and/or cooperate with Manager in all reasonable means respecting
Manager's fulfillment of its obligations under this Agreement. In no event shall
Owner withhold from Manager any material information respecting the use or
condition of the Project, any contracts, debts, liens or liabilities encumbering
or affecting the Project, or any other information which could reasonably and
materially affect the fulfillment of Manager's duties under this Agreement.
ARTICLE VII
FINANCIAL MATTERS
7.1. BANK ACCOUNTS. Manager shall establish an operating
account or accounts for the Project in the name and at the expense of Owner at
such bank(s), under such designation(s) and with such authorized signatures of
Manager as Manager and Owner may direct from time to time and all funds
collected from the operation of the Project Manager receives shall be deposited
in the account(s) so established and all expenses of the Project shall be
disbursed from such account(s). Manager shall not commingle its own funds or
funds of any other property with Project funds. If required by law or by Owner,
a separate account(s) for tenant security deposits shall be established in the
same manner as provided in the preceding sentence and shall be maintained as
required by law or Owner. Owner will provide whatever signing authority is
necessary for Manager to fulfill its obligations under this Agreement.
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7.2. AUDITS. Owner reserves the right upon five (5) days
prior written notice, to audit all books and records maintained by Manager with
respect to the Project. Except as provided below, all audits shall be at Owner's
cost and expenses, shall be conducted during normal business hours and shall be
conducted at Manager's office where such books and records are located. Any
audit may be conducted by Owner's agents or employees or by independent persons
engaged by Owner provided that such parties are not a competitor to Manager. Any
discrepancies noted in any audit shall be promptly corrected. In the event it is
determined that the books and records have not been adequately maintained by
Manager, as required hereunder, or if such audit reveals that Owner has been
materially overcharged for Manager's services, then Manager shall be obligated
to refund the amount of such overcharge to Owner and pay for the pro rata share
of the cost of the audit which deals with the specific overcharge, with the pro
rata share not to exceed $1,000.00.
ARTICLE VIII
INSURANCE AND INDEMNIFICATION
8.1. INDEMNITY AND SUBROGATION.
(a) Subject to Section 8.1(e), Owner shall indemnify,
defend (using counsel acceptable to Manager) and hold harmless Manager and its
affiliates and each of their respective officers, directors, employees,
stockholders, partners, agents, lenders, representatives, and contractors, and
each of their respective successors and assigns, from and against any and all
liabilities, obligations, claims, losses, causes of action, suits, proceedings,
awards, judgments, settlements, demands, damages, costs, expenses, fines,
penalties, deficiencies, taxes and fees, (including without limitation the fees,
expenses, disbursements and investigation costs of attorneys and consultants)
arising directly or indirectly out of or resulting in any way from or in
connection with the Project, the proper management of the Project by the
Manager, or the proper performance or proper exercise by the proper Manager of
the duties, obligations, powers, or authorities herein, or hereafter granted to
the Manager, except for those actions and omissions of Manager in relation to
which the Manager agrees to indemnify Owner pursuant to Section 8.1(b).
(b) Subject to Section 8.1(e), Manager agrees to
indemnify and hold the Owner and its affiliates and each of their respective
employees, officers, directors, and agents harmless from and against any and all
costs, expenses, attorney's fees, suits, liabilities, damages, or claim for
damages, in any way arising out of (i) any negligent acts or omissions or
intentional misconduct of Manager, its agents or employees contractors or
invitees, (ii) any failure of Manager to promptly perform in any material
respect any of its obligations under this Agreement, provided such failure was
not caused by Owner or by events beyond the reasonable control of Manger, and
Owner has furnished to Manager sufficient funds to perform such obligations; or
(iii) any acts of Manager beyond the scope of Manager's authority hereunder.
(c) "INDEMNIFIED PARTY" and "INDEMNITOR" shall mean
the Manager and Owner, respectively, as to Section 8.1 (a) and shall mean the
Owner and Manager, respectively, as to Section 8.1(b). If any action or
proceeding is brought against the Indemnified Party with respect to which
indemnity may be sought under this Section 8.1, the Indemnitor, upon written
notice from the Indemnified Party, shall assume the investigation and defense
thereof,
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including the employment of counsel and payment of all expenses. The Indemnified
Party shall have the right to employ separate counsel in any such action or
proceeding and to participate in the defense thereof, but the Indemnitor shall
not be required to pay the fees and expenses of such separate counsel unless
such separate counsel is employed with the written approval and consent of the
Indemnitor.
(d) The indemnities in this Section 8.1 shall survive
the expiration or termination of this Agreement.
(e) Anything in this Agreement to the contrary
notwithstanding, Owner and Manager hereby waive and release each other of and
from any and all right of recovery, claim, action or cause of action against
each other, their agents, officers and employees, for any loss or damage that
may occur to the property, improvements to the Property, or personal property
within the Property, by reason of fire or the elements, or other casualty,
regardless of cause or origin including negligence of Owner or Manager and their
agents, officers and employees, to the extent the same is insured against under
insurance policies carried by Owner or Manager (or required to be carried by
Manager hereunder); however, Owner's waiver shall not include any deductible
amounts on insurance policies carried by Owner, nor extend to acts of the type
described in clauses (i), (ii) and (iii) of Section 8.1(b). Owner and Manager
agree to obtain a waiver of subrogation from the respective insurance companies
which have issued policies of insurance covering all risk of direct physical
loss and to have the insurance policies endorsed, if necessary, to prevent the
invalidation of the insurance coverages by reason of the mutual waivers.
(f) For the purposes of Section 8.1(b), 8.1(f), the
term "Owner" shall be construed as meaning Owner, Asset Manager, and their
respective affiliates, directors, officers, employees, agents, and
representatives.
8.2. PROJECT INSURANCE.
(a) Owner shall carry property damage insurance, or
builder's risk insurance, where applicable, to cover physical loss or damage to
the Project from fire and extended coverage perils, including vandalism and
malicious mischief and comprehensive general liability insurance with respect to
the Project covering third-party bodily injury, property damage, and personal
injury. All such insurance shall be in such amounts and with such insurers as
Owner may determine and, with respect to any such liability coverage, shall
include by endorsement Manager as an additional insured thereunder. If requested
by Owner, Manager shall obtain such insurance, at Owner's cost and subject to
Owner's approval thereof. Manager shall comply with all the warranties, terms
and conditions of such insurance. Manager shall notify Owner in writing within
forty eight (48) hours after the Manager receives notice of any loss, damage, or
injury and shall not take any action which knowingly might prejudice Owner in
its defense to a claim based on such loss, damage, or injury.
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(b) Manager shall maintain the following insurance
coverage:
INSURANCE MINIMUM STANDARDS
Workers' Compensation Coverage A:
Minimum limits required by Statute (with proof of
compliance as acceptable to Owner)
Coverage B:
$1,000,000 Bodily Injury by Accident (Each Accident)
$1,000,000 Bodily Injury by Disease (Policy Limit)
$1,000,000 Bodily Injury by Disease (Each Employee)
Comprehensive General $1,000,000 per occurrence/in the aggregate
Liability Insurance
Automobile, Single Limit $1,000,00 Any Auto (hired/owned and non-owned)
Bodily Injury and
Property Damage
Uninsured Motorists As required by Statute
Fidelity Bond/Crime/ Greater than two (2) months' gross income from the
Employee Dishonesty/ Property with maximum deductible of $10,000
Forgery & Alteration
All insurance required hereunder shall be in force as of the date hereof, except
as specifically set forth in the following sentence. Manager shall furnish
Owner, at the time of execution of this Agreement, with certificates of
insurance evidencing its insurance coverage as required under Section 8.2(b),
together with all exclusions and endorsements relating to the Project, and
provided, however, that Manager may deliver to Owner, on a date not later than
30 days after the date hereof, evidence that Owner will be given at least thirty
(30) days prior written notice of cancellation or material change in coverage.
All such policies, except for workers' compensation for Manager's employees
directly involved with the operation of the Property shall be at Manager's sole
cost. In cases where Owner and Manager maintain insurance policies that
duplicate coverage, then Owner's policies shall provide primary coverage.
(c) CONTRACTOR'S AND SUBCONTRACTOR'S INSURANCE.
Manager shall require that each contractor and subcontractor hired to perform
work at the Property maintain insurance against risk of physical damage to
personal proper belonging to it in amounts sufficient to replace such personal
property in the event of loss, and insurance coverage at such contractor's and
subcontractor's expense, in the following minimum amounts:
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INSURANCE MINIMUM STANDARDS
Workers' Compensation As required by law
Employer's liability $1,000,000
Comprehensive general liability* $1,000,000
Comprehensive auto liability* $1,000,000
*These coverages shall be primary and will respond to any
allegation, claim, loss, damage, demand or judgment, or other
causes of action arising out of work done at the Property by
the contractor or subcontractor on behalf of Owner and
Manager. Owner and Manager shall be named as additional
insureds on such policies. The policies shall be written on an
"on occurrence" basis.
Owner may require additional coverage if the work to be performed is, in Owner's
judgment, sufficiently hazardous. Before any work can begin, each contractor or
subcontractor will submit Certificates of Insurance and Endorsements in form and
substance satisfactory to Owner as evidence of the coverages required. Each
certificate will provide for (i) cross-liability or severability of interests
for the benefit of the additional Insureds, and (ii) if Contractors insurance is
provided by means of a so called "blanket policy", the aggregate must apply per
project or per location. Each certificate will bear an endorsement requiring
thirty (30) days' prior written notice of cancellation, material alteration or
non renewal. All such policies shall be issued by insurers with the Best rating
of A or higher.
8.3. MANAGER'S RESPONSIBILITIES. Manager agrees to:
(a) If requested by Owner in writing and at Owner's
sole cost and expense, Manager shall obtain and maintain insurance with respect
to the Project.
(b) Notify Owner within three (3) business days after
Manager receives notice of any loss, damage or injury at or arising from the
Project.
(c) Take no action (such as admission of liability)
which knowingly bars Owner from obtaining any protection afforded by any policy
Owner may hold or which prejudices Owner in its defense to a claim based on such
loss, damage, or injury.
(d) Cooperate with Owner in disposition of claims,
including furnishing all available information to Owner's insurer or
representative.
8.4. EMPLOYEE INSURANCE. If requested in writing by Owner,
Manager shall require that all contractors and service companies operating in or
on the Project maintain such worker's compensation, employer's liability and
comprehensive general liability insurance as may be required by Owner, including
any special coverage required by law or Owner in connection with hazardous
operation.
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ARTICLE IX
COMPENSATION OF MANAGER
9.1. MANAGEMENT FEE. For its services hereunder, Manager
shall be paid a monthly management fee in an amount equal to, and in accordance
with, the schedule set forth in EXHIBIT "C" attached hereto and made a part
hereof.
9.2. ADDITIONAL COMPENSATION. In addition to the monthly
management fee provided for in Section 9.1 hereof, Manager shall be entitled to
(a) leasing commissions based on the schedule set forth in EXHIBIT "D" attached
hereto and incorporated herein which shall be paid to Manager in connection with
the leasing of the Project, and (b) construction management fees for work in the
project which has been approved by Owner with respect to non-routine capital
improvements based on the schedule set forth in EXHIBIT "E" attached hereto and
incorporated herein which shall be paid to Manager in connection with
construction work at the Project.
9.3. EMPLOYEE COMPENSATION.
(a) Manager shall include in the proposed budget (see
paragraph 3.1) for the Project a schedule setting forth employee salaries,
bonuses and benefits that are reimbursable under this Agreement. All such
expenses shall be subject to adjustment from time to time during the term of
this Agreement as reflected in each Approved Budget. Manager shall identify its
employees whose salaries and bonuses may from time to time be charged pro rata
to the Project for direct services rendered to the Project. In the event that
employees of Manager other than those identified from time to time perform
services for the Project, an appropriate portion of such employee's compensation
and benefits and the expenses related thereto shall be included within the
coverage of this paragraph.
(b) Manager shall make disbursements and deposits for
all compensation and other amounts payable with respect to persons employed by
Manager in the operation of the Project, or performing special services from
time to time at the request of Owner. The amounts so payable shall include, but
not be limited to, unemployment insurance, social security, worker's
compensation and other charges imposed by a governmental authority or provided
for in a union agreement. Manager shall maintain complete payroll records. All
payroll costs, including, but not limited to, those enumerated herein, are
operating expenses of the Project to be reimbursed by Owner to Manager.
9.4. MANAGEMENT OFFICE. During the term of this Agreement,
Owner shall make available to Manager finished office space (the "Management
Office") on a rent-free basis in an amount not to exceed 3,000 square feet, and
sufficient enough to allow Manager to provide first class leasing, management,
marketing and construction activities for the benefit of the Project. Currently,
the Management Office is located on the 11th Floor of the Project and comprises
of approximately 2,660 square feet, in any case the space shall contain, but not
be limited to a reception area, offices for the property manager, leasing
manager, conference room, kitchenette, and an area for a copier and file
cabinets. Owner, at Owner's expense, shall provide all furnishings and equipment
(fax, copy, postage machines, computers and etc.) required for the operation of
the Management Office and Project. Manager shall submit to Owner by February 1,
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1998, a budget for Owner's approval which details the equipment and furnishings
required for operation of the Management Office. The location for the Management
Office shall be approved by Owner, and Owner shall have the right, at any time
during the term hereof, to relocate the Management Office upon giving Manager
not less than sixty (60) days prior written notice. Owner shall be responsible
for all costs associated in connection with such relocation.
9.5. OUT-OF-POCKET EXPENSES. Subject to the approved
budget, manager shall be entitled to reimbursement of all actual, verifiable and
reasonable out of pocket costs and expenses, incurred by Manager in operating
the Project, maintaining an on-site Management Office and operating the on-site
Management Office, including, but not limited to, telephone charges, office
equipment, office supplies, data processing or accounting costs in connection
with preparation of budgets and reports, and, with prior approval of Owner, the
cost of out-of-town travel, incurred by Manager in performing its duties
pursuant to this Agreement.
9.6. METHOD OF PAYMENT. Payment of reimbursement of the
amounts described in Sections 9.1 through 9.5 above shall be as follows:
(a) The management fee shall be calculated and paid
monthly and such amounts shall be shown in Manager's submission of its monthly
accounting to Owner. Manager may pay such fees and compensation from Project
operating funds then in its possession or control.
(b) Additional Compensation, Employee Compensation,
Management Office and Out-Of-Pocket Expenses pursuant to Sections 9.2, 9.3, 9.4
and 9.5 shall be reimbursed to Manager at the time incurred by Manager and
Manager may reimburse such costs and expenses from time to time from Project
operating funds under its possession or control. A detailed summary of such
reimbursable costs and expenses shall be included on Manager's monthly
accounting to Owner.
(c) In the event there shall not be Project operating
funds available to pay/or reimburse the fees and/or costs and expenses or other
amounts due hereunder to Manager and all amounts due hereunder, Owner hereby
assumes responsibility for the same and agrees to promptly pay such amounts to
Manager.
ARTICLE X
GENERAL PROVISIONS
10.1. INDEPENDENT CONTRACTOR. It is expressly understood
and agreed that Manager as an agent of the Owner, will act as an independent
contractor in the performance of this Agreement. The parties hereby agree that
nothing in the Agreement shall be intended or construed to create an
employer-employee relationship, a partnership or a joint venture with respect to
the Project or otherwise.
10.2. NOTICES. All notices, demands, reports or other
communications required or desired to be given hereunder shall be in writing and
shall be effective for all purposes if hand delivered or sent by (a) certified
or registered United States mail, postage prepaid to the parties at
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their respective addresses for notice, or (b) expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
attempted delivery, and (c) by telecopier (with answer back acknowledged and so
long as the original of said telecopy is mailed the next day). A notice shall be
deemed to have been given: in the case of hand delivery, at the time of
delivery; or forty-eight (48) hours after having been deposited in the United
States mail postage prepaid and properly addressed or upon receipt with respect
to notices sent via overnight delivery service or telecopy.
10.3. ATTORNEY'S FEES. In connection with any controversy
arising out of this Agreement, the prevailing party shall be entitled to
recover, in addition to costs, damages or other relief, its reasonable
attorney's fees and costs incurred.
10.4. ASSIGNMENTS. This Agreement and the rights and
obligations hereunder shall not be assignable by either party hereto without the
written consent of the other; provided, however, that the foregoing shall not
extend to assignments required by: (a) any insurance carrier in any matter
relating to subrogation, or (b) Manager in order to assign this Agreement to any
entity which it controls, is controlled by or with which it is under common
control provided such assignment does not result in a change in the personnel
responsible for performing manager's obligations hereunder. Nothing contained in
this Section 10.4 shall be deemed a waiver of Owner's right to sell, transfer,
convey or encumber title to the Project without the consent of Manager.
10.5. AMENDMENTS. Except as otherwise provided herein, all
amendments to this Agreement shall be in writing and executed by both parties.
10.6. ENTIRE AGREEMENT. This Agreement and the Exhibits and
any Riders attached hereto and made part hereof, comprise the entire agreement
of the parties with respect to the matters contained herein, and supersedes all
prior agreements. The parties acknowledge that there are no representations,
warranties, agreements, arrangements or understandings with respect to the
subject matter hereof other than as expressly set forth in this Agreement.
10.7. GOVERNING LAW; VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of Missouri.
10.8. COOPERATION AND ASSISTANCE. Owner and Manager agree
to execute such documents and provide such further assurances as may be
reasonably necessary for each to fulfill their respective duties and obligations
under this Agreement. Should any claim, demand, action or other legal proceeding
arising out of matters covered by this Agreement be made or instituted by any
third party against a party to this Agreement, the other party to this Agreement
shall furnish such information and reasonable assistance in defending such
proceeding as may be requested by the party against whom such proceeding is
brought.
10.9. WAIVER. No consent or waiver, express or implied, by
any party to or of any breach or default by the other party in the performance
by such other party of the obligations thereof under this Agreement shall be
deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such other party under this Agreement. Failure on
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the part of either party to raise any claim(s) with respect to any act or
failure to act of the other party or to declare the other party in default,
irrespective of how long such failure continues, shall not constitute a waiver
by such party of the rights thereof under this Agreement.
10.10. SEVERABILITY. It is the intention of the parties that
if any such provision is held to be legal, invalid or unenforceable, there will
be added in lieu thereof a provision as similar in terms to such provision as is
possible and be legal, valid and enforceable.
10.11. NO OBLIGATION TO THIRD PARTY. Except as otherwise set
forth in this Agreement, the execution and delivery of this Agreement shall not
be deemed to infer any rights upon, or obligate either of the parties hereto to,
any person or entity other than each other.
10.12. CAPTIONS. The captions appearing at the commencement
of the sections hereof are descriptive only and for convenience and reference.
Should there be any conflict between any such captions in the section and the
text in the section, the text and not such caption shall control and govern in
the construction of this Agreement.
10.13. TIME OF ESSENCE. Time is of the essence with respect
to all of the terms, provisions, rights and obligations contained in this
Agreement.
10.14. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
10.15. NON-DISCRIMINATION. Owner and Manager each mutually
agree that there shall be no illegal discrimination against or segregation of
any person or of a group of persons on account of race, color, religion, creed,
sex, sexual orientation, or national origin in leasing, transferring, use,
occupancy or enjoyment of the Project, nor shall Owner or Manager knowingly
permit any such practice or practices of discrimination or segregation with
respect to the selection, location, use or occupancy of tenants at the Project.
10.16. CERTAIN INTERPRETATIVE MATTERS. No provision of this
Agreement will be interpreted in favor of, or against, any of the parties hereto
by reason of the extent to which any such party or its counsel participated in
the drafting thereof or by reason of the extent to which any such provision is
inconsistent with any prior draft hereof or thereof.
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IN WITNESS WHEREOF, this Commercial Property Management and
Leasing Agreement has been executed by Manager and Owner by their respective
duly authorized officers as of the day and year first written above.
OWNER: MANAGER:
EBS Building, L.L.C. Insignia Commercial Group, Inc.
a Delaware corporation
By: Price Waterhouse L.L.P. By: /s/ J. ▇▇▇▇ ▇▇▇▇
-------------------------------
J. ▇▇▇▇ ▇▇▇▇
Its: Manager Its: Regional Director
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
A Partner
Notice Address: Notice Address:
EBS Building, L.L.C. Insignia Commercial Group, Inc.
C/O Price Waterhouse L.L.P. Attention: J. ▇▇▇▇ ▇▇▇▇
One NationsBank Plaza ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a Copy to: With a Copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III Insignia Financial Group, Inc.
▇▇▇▇▇ ▇▇▇▇ L.L.P. One Insignia Financial Plaza
One Metropolitan Square Greenville, SC 29601
Suite 3600 Attention: General Counsel
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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EXHIBIT "A"
DESCRIPTION OF PROJECT
A 12 story Class A office building containing approximately 500,000 square feet
of space, located at the southwest corner of Broadway Avenue and Washington
Street in Downtown Saint Louis, Missouri, and numbered as ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ having entrances on both Broadway Avenue and Washington
Street.
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EXHIBIT "B"
INFORMATION TO BE PROVIDED BY OWNER
1. Current Preliminary Title Report
2. All Environmental Assessment Reports
3. All ADA Compliance Reports
4. Tenant files including:
All leases, amendments and modifications
All credit information of tenants
All information on tenant uses, including hazardous materials
uses
All tenant insurance certificates required under leases
5. "As built" plans and specifications for all improvements to the
Project, including plans and specifications for all tenant improvements
and alterations and computer aided design (CAD) drawings for all
rentable areas of the Project.
6. All maintenance and service contracts currently in effect at the
Project.
7. Latest tax bills, insurance bills, mortgage and/or ground rent
statements, and other Project and common area expense ▇▇▇▇▇▇▇▇.
8. Revenue and expense records for the last eighteen (18) months of the
Project, including tenant delinquency aging, security deposit
accounting, and all accounts payable.
9. Insurance policies and endorsements therefor carried by Owner by the
Project.
10. All other documents, records and reports in Owner's possession or
control reasonably requested by Manager or reasonably believed by Owner
as necessary or appropriate for Manager's carrying out of its duties
under this Agreement.
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EXHIBIT "C"
MANAGEMENT FEE
Commencing upon the commencement of the term of this
Agreement, Manager shall be paid a monthly management fee equal to the greater
of (i) two percent (2%) of the gross receipts derived from the Project during
the preceding calendar month (or portion thereof applicable from the
commencement of the term of this Agreement through and including the expiration
or earlier termination of this Agreement), or (ii) Six Thousand-Seven Hundred
Dollars ($6,700.00) per month.
The term "gross receipts" for all purposes under this
Agreement shall be defined as: (i) receipts from the leasing of rentable space
in the Project; (ii) receipts from lease rental escalations, late charges and/or
cancellation fees; (iii) receipts from tenants for reimbursable operating
expenses; (iv) receipts from concessions granted or services provided at the
Project (including, but not limited to, parking lot collections, if any); (v)
other miscellaneous operating receipts; (vi) proceeds from rent or business
interruption insurance; (vii) any percentage rents collected; and (viii) all
common area maintenance charges.
The term "gross receipts" for all purposes under this
Agreement shall be defined to exclude: (i) tenants' security deposits until the
same are forfeited by the person malting such deposits; (ii) property damage
insurance proceeds; and (iii) any award or payment made by any governmental
authority in connection with the exercise of any right of eminent domain
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EXHIBIT "D"
SCHEDULE OF LEASING COMMISSIONS
Leasing commissions shall be paid in accordance with the following schedule:
A. MANAGER ONLY; CO-BROKER NOT INVOLVED:
NEW LEASES AND EXPANSION SPACE LEASES:
Manager shall be paid 5% of gross rentals to be paid by tenant during
years 1 - 5 of the initial term of the lease and 3% thereafter.
RENEWAL LEASES:
Manager shall be paid 2% of gross rentals to be paid by tenant during
any renewal term(s) of the lease.
B. MANAGER WITH CO-BROKER INVOLVED:
NEW LEASES AND EXPANSION SPACE LEASES:
Manager shall be paid 2 1/2% of gross rentals to be paid by tenant
during years 1 - 5 of the initial term of the lease and 1.5%
thereafter. In addition, the Co-Broker shall be paid at the rate of 3
1/2% for years 1 - 5 and 1.5% thereafter.
RENEWAL LEASES:
Manager shall be paid 2% of gross rentals to be paid by tenant during
any renewal term(s) of the lease. Any fees to be paid to a Co-Broker
for a renewal term shall require the prior approval by Owner on a
case-by-case basis.
Such commission(s) shall be paid one-half upon execution of a new lease
agreement and one-half upon occupancy by the tenant. Commissions for expansions
of space and/or renewal terms shall be paid in full upon execution of the
appropriate documentation.
The term "gross rentals" as used in this Exhibit D shall mean and refer to the
total of any annual base rent or fixed rent payable by a tenant under any lease,
including leases for expansion space, for an initial lease term or renewal lease
term.
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EXHIBIT "E"
CONSTRUCTION MANAGEMENT FEES
Construction Management Fees shall be paid in accordance with the following
schedule:
- 5% if a General Contractor is engaged for the work, and
- 10% if there is not a General Contractor engaged for the work.
Such fees shall be paid one-half upon commencement of the work and one-half upon
commencement of the lease for tenant improvements or in the case of capital
improvements, one-half upon completion of the work.
Construction Management Fees for tenant improvements shall be a part of the
Tenant Improvement allowance or paid for directly by the tenant.
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