Exhibit 10.1.2
FIRST AMENDMENT TO OPERATING AGREEMENT
OF
BPP RETAIL, LLC,
a Delaware limited liability company
THIS FIRST AMENDMENT TO OPERATING AGREEMENT (the "Amendment") is dated
as of June 1, 1999, by and between STATE OF CALIFORNIA PUBLIC EMPLOYEES'
RETIREMENT SYSTEM, a unit of the State and Consumer Services Agency of the State
of California ("CalPERS"), with offices at ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and ▇▇▇▇▇▇▇ PACIFIC OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership (either "BPOP" or the "Manager"), with offices at ▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS:
A. BPP Retail, LLC, a Delaware limited liability company (the
"Company") was formed by the filing of a Certificate of Formation with the
Secretary of State of the State of Delaware on September 15, 1998. The
management and operation of the Company is governed by the terms of that certain
Operating Agreement dated August 31, 1998, by and between CalPERS, as a member
of the Company, and BPOP, as a member and as the manager of the Company (the
"Agreement").
B. CalPERS and BPOP now wish to amend the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and the mutual covenants herein
contained, the parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not defined shall
have the same meaning as ascribed thereto in the Agreement. In addition to the
terms defined in the Agreement, the following terms shall have the following
meanings when used in this Amendment and the Agreement:
"SECURED LOAN FACILITY" means one or more loan or other credit
facilities extended to the Company from time to time pursuant to that certain
Credit Agreement among the Company as Borrower and the lenders specified therein
and The Chase Manhattan Bank as administrative agent currently being negotiated
and expected to be executed and dated on or about June 14, 1999 (as amended,
supplemented or otherwise modified from time to time) in an aggregate principal
amount not to exceed $171,000,000 at any time outstanding, secured or purported
to be secured in whole or in part by obligations of the Members to contribute
capital to the Company.
"SECURED LOAN LENDER" means, collectively, any lender or
lenders from time to time providing the Secured Loan Facility and any agents or
other representatives acting on behalf of such lender or lenders.
"SECURED LOAN OBLIGATIONS" means all obligations and
liabilities of every nature of the Company now existing or hereafter arising
under or in connection with the Secured Loan Facility.
"UNSECURED LOAN FACILITY" means that certain senior unsecured
revolving credit and term loan facility for the Company and BPAC Texas, L.P., a
Delaware limited partnership ("BPAC Texas"), in an aggregate principal amount of
up to $270,000,000 to be arranged and syndicated by Chase Securities Inc.
("CSI"), as more fully described in the commitment letter dated May 18, 1999 to
the Company and BPAC Texas from The Chase Manhattan Bank.
2. CALPERS' APPROVAL OF PENDING TRANSACTIONS.
2.1 ACQUISITION TRANSACTION. Pursuant to Article IV of the
Agreement, CalPERS hereby approves the transactions entered into by the Company
pursuant to (i) that certain Agreement for Purchase and Exchange dated March 9,
1999, by and among AMB Property, L.P., a Delaware limited partnership ("AMBLP"),
AMB Property II, L.P., a Delaware limited partnership ("AMBII"), and Long Gate,
L.L.C., a Delaware limited liability company, as sellers with respect to the
properties listed on EXHIBIT A-1, attached hereto, and as exchangors with
respect to the properties listed on EXHIBIT A-2, attached hereto, and the
Company, as buyer (the "Phase I Contract"); (ii) that certain Agreement for
Purchase and Exchange dated March 9, 1999, by and between AMBLP and AMBII, as
sellers with respect to the properties listed on EXHIBIT B-1, attached hereto,
and as exchangors with respect to the properties listed on EXHIBIT B-2, attached
hereto, and the Company, as buyer (the "Phase II Contract"); and (iii) that
certain Agreement for Purchase and Exchange dated March 9, 1999, by and between
AMBLP and AMBII, as sellers with respect to the properties listed on EXHIBIT
C-1, attached hereto, and as exchangors with respect to the properties listed on
EXHIBIT C-2, attached hereto, and the Company, as buyer (the "Phase III
Contract"). The Phase I Contract, Phase II Contract and Phase III Contract are
collectively called the "Acquisition Documents" and the transactions they
describe are collectively called the "AMB Deal." Such transactions shall be
deemed Committed Transactions as defined in the Agreement.
2.2 LOANS. Each Member hereby authorizes the Company to enter
into the Secured Loan Facility and the Unsecured Loan Facility and to borrow or
otherwise obtain credit thereunder and to perform in accordance with the terms
thereof; PROVIDED that nothing contained in this Section shall authorize the
Company to enter into any other Financing not otherwise authorized under the
Agreement.
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2.3 PERFORMANCE REPRESENTATION. The execution, delivery and
performance of the obligations under the Acquisition Documents and the
documentation of the Secured Loan Facility and the Unsecured Loan Facility will
not violate the Agreement or any other formation document, binding final policy
or guideline of the Company or its members, or any law or regulation applicable
to any of them.
2.4 PROVISIONS TO ACCOMMODATE SECURED LOAN FACILITY. The
Agreement is hereby amended to add the following as Section 3.12 of the
Agreement, which Section 3.12 shall remain in effect only so long as any
commitment shall be outstanding under the Secured Loan Facility or any Secured
Loan Obligation shall be outstanding:
3.12 SECURED LOAN FACILITY. Notwithstanding anything to the
contrary contained in this Agreement (including but not limited to anything to
the contrary contained in Sections 3.2 and 4.1 of this Agreement), so long as
any commitment shall be outstanding under the Secured Loan Facility or any
Secured Loan Obligation shall be outstanding:
(a) in order to pay amounts due under the Secured
Loan Facility (and assuming the Company has insufficient cash flow from
operations to pay such amounts when due, or that such cash flow is unavailable
or not used, for any reason, for payment of such amounts), each Member of the
Company shall be irrevocably committed, whether or not such Member remains a
member of the Company and regardless of the status of the Company, from June 15,
1999 through March 31, 2001, to fund Additional Capital Contributions to the
Company in the respective aggregate amounts set forth below:
Member Additional Capital Contribution Obligation
------ ------------------------------------------
BPOP US $ 42,750,000.00
CalPERS US $171,000,000.00
(b) subject to Section 3.12(g)(i), each Additional
Capital Contribution to be made by the Members referred to in Section 3.12(a)
shall, when called as provided in this Agreement, be funded by each of them in
proportion (subject to Section 3.12(g)(i) below) to the Members' relative
obligation to fund Additional Capital Contributions under such Section. CalPERS
Additional Capital Contribution shall be made in immediately available funds,
while BPOP's Additional Capital Contribution shall be made in immediately
available funds, or real property, if the contribution of such property is
Approved by CalPERS as provided in the Agreement. Additional Capital
Contributions shall be used solely for the repayment of the Secured Loan
Obligations.
(c) each Additional Capital Contribution referred to
in Section 3.12(a) shall be payable within ten (10) business days after written
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notice of call therefor is made by the Manager to the Member(s), and the giving
of such notice shall be the only condition to the obligation of the applicable
Member(s) to fund such call so long as the notice states that the purpose of the
capital call is the payment of any or all of the Secured Loan Obligations.
However, in the event that any amount is due and payable pursuant to the terms
of the Secured Loan Facility, no notice of the Additional Capital Contribution
shall be necessary or a condition to each Member's obligation to pay such
Additional Capital Contribution and such obligation shall be automatic and
unconditional;
(d) the Company may pledge to the Secured Loan
Lender, and grant to the Secured Loan Lender a continuing perfected security
interest in, all rights of the Company to call, enforce and receive all
Additional Capital Contributions referred to in Section 3.12(a) and all proceeds
thereof to secure and be applied to the repayment of the Secured Loan
Obligations;
(e) the Manager may pledge to the Secured Loan
Lender, and grant to the Secured Loan Lender a continuing perfected security
interest in, all rights of the Manager to call, enforce and receive all
Additional Capital Contributions referred to in Section 3.12(a) and all proceeds
thereof to secure and be applied to the repayment of the Secured Loan
Obligations, which right the Secured Loan Lender may exercise only after
expiration of the period provided in Section 2.19(b)(vi) of the Credit Agreement
and only while any "Event of Default" (as defined in the Secured Loan Facility)
shall be continuing under the Secured Loan Facility. Any calls for Additional
Capital Contributions made by the Secured Loan Lender shall have the force and
effect as if such calls were made by the Company or the Manager;
(f) in connection with the pledges and security
interests referred to in Sections 3.12(d) and (e), each Member agrees to
cooperate with the Company, the Manager and the Secured Loan Lender and execute
and deliver such documents and instruments as may be reasonably requested to
create, grant and perfect a security interest in its obligation to make
Additional Capital Contributions referred to in Section 3.12(a) or to evidence
or confirm such obligation;
(g) each Member agrees to fund its Additional Capital
Contributions, referred to in Section 3.12(a) without defense, offset or
counterclaim of any kind, including without limitation: (i) the failure of any
other Member to fund all or a portion of its Additional Capital Contribution (in
which event the non-defaulting Member shall be obligated to fund up to the
aggregate amount of such non-defaulting Member's Additional Capital Contribution
referred to in Section 3.12(a), including but not limited to, any subsequent
calls; provided, however, that the making of such Additional Capital
Contributions shall be made without limiting any rights the non-defaulting
Member may have against the
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defaulting Member under the Agreement), (ii) any conditions other than a call to
fund Additional Capital Contributions, (iii) ERISA, Bank Holding Company Act,
Investment Company Act of 1940, or similar or other state or federal statutory
or regulatory laws or regulations, and (iv) any provisions of this Agreement, if
any, that would otherwise permit any Member to capitalize any distributable
amounts and apply them against or otherwise reduce Additional Capital
Contributions;
(h) if and after the maturity of any loan made under
the Secured Loan Facility has been accelerated due to an "Event of Default" (as
defined in the Secured Loan Facility) payment of the Asset Management Fee
referred to in Exhibit H and payment of all indemnity obligations of the Company
to the Members and the Manager shall be subordinated to the prior payment in
full in cash of the Secured Loan Obligations;
(i) each Member represents and warrants that the
Agreement (as amended hereby) constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its provisions, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and to general principles of equity;
(j) in the event that the Company and the Secured
Loan Lender agree that payments of Additional Capital Contributions shall be
made to a particular place or account, or, if, while any Event of Default as
defined in the Secured Loan Facility is continuing, the Secured Loan Lender in
its discretion designates any such place or account, (i) each Member receiving
written notice of such place or account shall pay its Additional Capital
Contributions to such place or account, (ii) any such account and all amounts
credited thereto from time to time may be pledged to the Secured Loan Lender,
and the Secured Loan Lender may be granted a continuing perfected security
interest therein, to secure the Secured Loan Obligations, and (iii) any payments
by the Member to any other place or account shall not satisfy its obligation to
make Additional Capital Contributions;
(k) any payment made by a Member to the Secured Loan
Lender in satisfaction of its obligation to contribute capital to the Company
under this Section 3.12 shall be deemed an Additional Capital Contribution made
by such Member to the Company.
(l) the Secured Loan Lender shall be an intended
third party beneficiary of this Section 3.12 of the Agreement, including but not
limited to the provisions hereof relating to calling, enforcing and receiving
Additional Capital Contributions, which provisions shall be enforceable by the
Secured Loan Lender while any "Event of Default" (as defined in the Secured Loan
Facility) shall be continuing under the Secured Loan Facility.
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(m) repayment by the Company of any Contributing
Loans made by a Member pursuant to Section 3.2(b) of the Agreement shall be
subordinated to the prior payment in full of the Secured Loan Obligations and
the payments due under the Unsecured Loan Facility.
(n) the Member(s) described below agree(s) to deliver
or make available to any Secured Loan Lender:
(i) as to BPOP and BPE: (aa) within ninety
(90) days after the end of their fiscal years, their balance sheet as of the end
of such fiscal year and the related statements of operations and changes in
retained earnings and cash flows for such fiscal year reported on by independent
public accountants of nationally recognized standing, and (bb) within sixty (60)
days after the end of each fiscal quarter other than the fourth quarter of their
fiscal years, their balance sheet as of the end of such fiscal quarter and the
related statements of operations and changes in retained earnings and cash flows
for such fiscal quarter, certified by a senior officer of the general partner of
their managers;
(ii) and, as to CalPERS, such financial
statements of CalPERS as and when they are made available to the public;
(iii) and, as to each Member, from time to
time upon the request of the Secured Loan Lenders, a certificate setting forth
the remaining amount of their Unpaid Capital Obligation (as defined in the
Secured Loan Facility) and stating whether, to their knowledge, any Event of
Default exists under the Agreement (and if so, describing such Event of Default
in reasonable detail).
3. ANNUAL INVESTMENT PLAN. Notwithstanding the Annual Investment Plan
set forth in Exhibit G to the Agreement, so long as the Secured Loan Facility or
the Unsecured Loan Facility (collectively, the "New Loans") remain in place,
CalPERS agrees that its Additional Capital Contribution shall exceed the Annual
Investment Plan for the period ending December 31, 1999, by One Hundred
Seventy-One Million Dollars ($171,000,000) and shall contribute that amount upon
written notice from the Manager. Furthermore, if the transactions for which the
New Loans have been arranged are delayed until the calendar year 2000, CalPERS
agrees that the Annual Investment Plan will be no less than One Hundred
Seventy-One Million Dollars ($171,000,000) for calendar year 2000. In connection
with CalPERS' agreement to exceed the limits of its Annual Investment Plan in
either 1999 or 2000, as provided herein, the Manager agrees to contribute
Forty-Two Million Seven Hundred Fifty Thousand Dollars ($42,750,000) as an
Additional Capital Contribution.
4. REPLACEMENT OF EXHIBITS D AND D-1. Exhibits D and D-1 to the
Agreement, regarding the schedules of CalPERS' Contributed Projects and the
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Manager's Projects, respectively, are hereby deleted in their entirety and
replaced with EXHIBITS D and D-1 attached hereto. The projects identified
therein comply with the Agreement (including, without limitation, Exhibit F
thereto).
5. SCHEDULES AND EXHIBITS. The Members shall prepare and approve
Exhibits N and N-1 to the Agreement and Exhibit O to the Agreement on or before
August 3, 1999.
6. CALPERS' REJECTION OF QUALIFYING OPPORTUNITY. Pursuant to Section
4.3 of the Agreement, CalPERS hereby rejects the Qualifying Opportunity that
would otherwise permit it to cause the Company to purchase the properties which
are the subject of that certain Agreement for Purchase and Exchange dated March
9, 1999, by and between AMBLP and AMBII, as sellers with respect to the
properties listed on EXHIBIT E-1, attached hereto, and as exchangors with
respect to the properties listed on EXHIBIT E-2, attached hereto, and BPOP, as
buyer (the "Phase IV Contract"). CalPERS acknowledges that such rejection is
made based upon its receipt of full disclosure of the information set forth in
Section 4.3 with respect to the transaction contemplated by the Phase IV
Contract.
7. MANAGER'S TERRITORY. The Agreement is hereby amended to replace all
references to the Western United States or the Western Region, as the Manager's
authorized territory, with the entire United States territory. Accordingly, any
references to the "Western United States" or the "Western Region" contained in
the Agreement, including references in Recital G, in the definition of
"Applicable NCREIF Index", in Sections 2.4 and 4.3, in Exhibit B with respect to
"Geographic Area", and in Exhibit C with respect to Financing Guidelines are
hereby replaced with a reference to "the entire United States". Additionally,
the definition of "Western United States" in Article I of the Agreement is
hereby deleted.
8. FINANCING LIMITS AND GUIDELINES. Notwithstanding any Financing
limitations or guidelines contained in the Agreement (including Exhibit C
thereto) to the contrary, CalPERS hereby approves, without limitation, (i) the
Unsecured Loan Facility and (ii) the Secured Loan Facility. CalPERS acknowledges
that the Manager has provided such additional information regarding each of the
facilities as CalPERS may have requested. The lenders under the New Loans shall
be intended third party beneficiaries of this Section 8 of this Amendment.
9. SUBSTITUTION OF MANAGER. Pursuant to Section 5.1(a) of the
Agreement, effective June 1, 1999, BPOP withdraws as a Member and as Manager of
the Company, and ▇▇▇▇▇▇▇ Pacific Employees LLC, a Delaware limited liability
company ("BPE"), is substituted as to BPOP's interest as a Member and BPOP's
position as Manager pursuant to an Assignment of Membership Interest dated June
1, 1999 (the "Assignment"). In connection with the Assignment, CalPERS hereby
waives the 180-day notice requirement
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contained in Section 5.1(a) of the Agreement and elects under Section 6.1(b) of
the Agreement to continue the Company. Effective June 1, 1999, all references to
BPOP in the Agreement and in this Amendment shall be deemed to refer to BPE. The
Assignment shall provide that BPOP shall not be released from any of its
obligations under the Agreement except from its duties to act as the Manager of
the Company. BPOP shall remain wholly subject to the Transfer prohibition in
Section 8.1 of the Agreement. BPE may not amend or modify its operating
agreement without CalPERS' Consent.
10. CONTRIBUTIONS TO DATE. Notwithstanding anything to the contrary
contained in the Agreement, CalPERS and BPOP hereby confirm and approve the
conveyance of CalPERS' Contributed Projects and Manager's Projects, on the dates
specified and with the Net Asset Values assigned thereto, all as set forth on
EXHIBIT F, attached hereto and agree that each such Project complies with the
Agreement.
11. NOMINEE PROJECTS. The parties acknowledge that Schedule 1 to
Exhibit E to the Agreement, a list of Nominee Projects, was not final at the
time the Agreement was executed. Schedule 1 to Exhibit E is hereby appended to
the Agreement as set forth on EXHIBIT G, attached hereto.
12. INDEPENDENT MANAGING AGENT. Where Manager elects to use an
independent entity as Managing Agent pursuant to Section 4.2 of the Agreement,
CalPERS hereby approves any and all deviations from the property management fees
set forth in Exhibit H to the Agreement in items No. 3 (Property Management Fee
not to exceed 3% of monthly Collections) and No. 4 (Construction Supervision Fee
not to exceed 2% of any Capital Expenditure) thereto, so long as (a) such fees
are substantially equivalent to market rates in the area in which each Project
is located; (b) the Company conducts surveys in the manner provided in Exhibit E
to the Agreement, Item No. 7 (regarding Leasing Fees), to determine such market
rates; and (c) such management fees are not payable to any entity affiliated
with the Manager.
13. VALUE OF INDIVIDUAL INVESTMENTS. Paragraph A.3. of Article IX of
Attachment A of the Operating Agreement refers to a minimum investment size of
generally no less than "$10 million." CalPERS agrees that as an exception to
such policy the Company may acquire Projects with a minimum Fair Market Value of
at least $5 million without the necessity of obtaining CalPERS' Consent.
14. MANAGEMENT AGREEMENT. Attached hereto as EXHIBIT H is the form of
the Management Agreement which has been agreed upon by CalPERS and BPOP in
connection with Section 4.2 of the Agreement.
15. ADDITIONAL CAPITAL CONTRIBUTIONS DEFAULT. A Member's failure to
make an Additional Capital Contribution if, as and when due pursuant to Section
3.12 or for the purpose of making payments if, as and when due pursuant to the
terms of the Unsecured Loan Facility (collectively "Loan Default")
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shall be an Event of Default under the Agreement. In addition to the remedies
under Section 3.2 and specified in Section 5.2, the value of the assets
distributable to the defaulting Member on dissolution and distribution pursuant
to Sections 5.2 and 6.3 shall be reduced by two hundred percent (200%) of the
amount of the unpaid portion of the Member's required Additional Capital
Contribution with respect to the applicable Loan Default.
16. MAKE WHOLE. BPOP and BPE hereby agree to pay CalPERS a payment (the
"Make-Whole Payment") at the earlier of (i) the time all loans under the
Unsecured Loan Facility are paid in full or otherwise satisfied or released (ii)
the time BPOP or BPE make an Additional Capital Contribution of Forty-Two
Million, Seven Hundred Fifty Thousand Dollars ($42,750,000) which is not
required to be used to repay the Secured Loan Facility and is actually used for
the purpose of funding paydown or payoff of the Unsecured Loan Facility; or
(iii) the date of final dissolution and distribution of assets pursuant to
Section 5.2. The Make-Whole Payment shall be calculated as follows:
Apply the difference in the interest rates between the
Unsecured Loan Facility and the Secured Loan Facility from time to time (the
"Make-Whole Rate") to all amounts outstanding under the Unsecured Loan Facility,
commencing on the date of the first funding under the Unsecured Loan Facility
and ending on the date the Unsecured Loan Facility is paid in full or otherwise
satisfied and released. The Make-Whole Payment shall be equal to eighty percent
(80%) of the Make-Whole Rate applied to the first Forty-Two Million Seven
Hundred Fifty Thousand Dollars ($42,750,000) outstanding under the Unsecured
Loan Facility.
17. PROHIBITED CHANGE IN CONTROL TRANSFER/AMB DEAL. In the event of a
Transfer which is prohibited pursuant to Section 8.1 of the Agreement or of a
change in control in BPOP, BPE or any Affiliate of either which controls either,
(a "Change in Control"), CalPERS shall in addition to all other remedies and
elections provided in the Agreement, have the option to require that the Company
assign the AMB Deal and all assets (including all Projects) acquired by the
Company under the AMB Deal to CalPERS (the "AMB Election"). CalPERS may exercise
the AMB Election by doing any or all of the following:
(a) For a period of ninety (90) days after CalPERS receives
actual written notice of a prohibited Transfer or Change in Control, CalPERS
shall have the right, by written notice to the Company, to require that the
Company transfer to CalPERS:
(i) any or all Projects acquired by the Company
pursuant to the AMB Deal;
(ii) an irrevocable unconditional assignment of all
of the Company's rights with respect to the Acquisition Documents; and
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(iii) on closing of each of such transfers, CalPERS
shall pay BPE a sum equal to twenty percent (20%) of the consideration
(including reasonable and customary closing costs actually paid to third parties
at each acquisition, but excluding due diligence costs, attorneys fees, any
Company overhead and costs and other "soft" costs) paid by the Company for the
Projects actually acquired pursuant to the AMB Deal and transferred to CalPERS.
(b) If a Transfer or Change in Control has occurred and CalPERS has not
exercised the AMB Election with respect to one or more Projects, then, until the
date which is one (1) year following close of the final acquisition by the
Company under the AMB Deal, CalPERS may elect, by written notice to the Company,
to require the Company to transfer to CalPERS any or all Projects acquired
pursuant to the AMB Deal in exchange for CalPERS' payment to BPE of twenty
percent (20%) of the consideration (including reasonable and customary closing
costs actually paid to third parties at each acquisition, but excluding due
diligence costs, attorneys fees, any Company overhead and costs and other "soft"
costs) paid by the Company for the Projects actually acquired pursuant to the
AMB Deal and subsequently transferred to CalPERS.
18. FEE SUBORDINATION/UNSECURED LOAN FACILITY. If and after the
maturity of any loan made under the Unsecured Loan Facility has been accelerated
due to an "Event of Default" (as defined in the Unsecured Loan Facility),
payment of the Asset Management Fee referred to in Exhibit H and payment of all
indemnity obligations of the Company to the Members and the Manager shall be
subordinated to the prior payment in full in cash of the obligations then
outstanding under the Unsecured Loan Facility. The Lenders under the Unsecured
Loan Facility shall be intended third party beneficiaries of this Section 18 of
this Amendment.
19. CONFIDENTIALITY. Section 9.6 of the Agreement is hereby amended to
permit the Company and its Members to make such disclosures as are reasonably
necessary to satisfy the reasonable business requests of Financing lenders and
their designees including making disclosures to all lenders, participants,
successors and assigns and applicable officers, directors, employees,
consultants and regulators of the lenders under the Secured Loan Facility and
Unsecured Loan Facility.
20. CONFLICTS. In the event of any conflicts or discrepancies between
this Amendment and the Agreement, the provisions of this Amendment shall
control. In all respects not specifically modified by this Amendment, the
Agreement shall remain unmodified and in full force and effect. This Amendment
is the first and sole amendment or modification to the Agreement. To the best of
each Member's knowledge, there are no existing Events of Default under the
Agreement.
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21. RATIFICATION OF AGREEMENT. In all other respects, the Agreement is
hereby ratified and confirmed.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
MANAGER:
▇▇▇▇▇▇▇ PACIFIC OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC.,
a Maryland corporation,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Its: Secretary
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APPROVED:
▇▇▇▇▇▇▇ PACIFIC EMPLOYEES LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇▇ PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership, its manager
By: ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC.,
a Maryland corporation, its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Its: Secretary
-------------------------------
MEMBERS:
STATE OF CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM,
an agency of the State of California
By: /s/ ▇▇▇▇ DiRe
-------------------------------
Its: MIS II
-------------------------------
AND:
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC.,
a Maryland corporation,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Its: Secretary
------------------------------
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EXHIBIT A-1
Phase 1 - Sale Properties
Property Name Location
------------- --------
Eastgate Plaza Seattle, WA
Granada Village Los Angeles, CA
Long Gate Shopping Center Baltimore, MD
Silverado Plaza San Francisco, CA
Twin Oaks Shopping Center Los Angeles, CA
Ygnacio Plaza Walnut Creek, CA
EXHIBIT ▇-▇
▇▇▇▇▇ ▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Property Name Location
------------- --------
Aurora Marketplace Seattle, WA
Bayhill Shopping Center San Francisco, CA
Corbins ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
EXHIBIT B-1
Phase 2 - Sale Properties
Property Name Location
------------- --------
Arapahoe Village Denver, CO
Brentwood Commons Chicago, IL
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
EXHIBIT ▇-▇
▇▇▇▇▇ ▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Property Name Location
------------- --------
Applewood Village Denver, CO
Five Points Shopping Center Santa Barbara, CA
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇ Houston, TX
▇▇▇▇▇▇▇'▇ Dairy Houston, TX
▇▇▇▇▇▇▇'▇ Woodway Houston, TX
Rockford Road Plaza Minneapolis, MN
Riverview Plaza Chicago, IL
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
EXHIBIT C-1
Phase 3 - Sale Properties
Property Name Location
------------- --------
Randalls Commons Houston, TX
EXHIBIT C-2
Phase 3 - Exchange Properties
Property Name Location
------------- --------
Rancho San Diego Village San Diego, CA
Totem Lake Malls Kirkland, WA
Weslyan Plaza Houston, TX
EXHIBIT D
Schedule of CalPERS' Contributed Projects
Property Name Location Contributor Net Asset Value
------------- -------- ----------- ---------------
Clackamas Promenade Clackamas, OR CalPERS $39,000,000
Villa Monaco Denver, CO CalPERS $9,100,000
Cherrywood Square Littleton, CO CalPERS $6,400,000
▇▇▇▇▇▇▇ Square Arvida, CO CalPERS $5,000,000
Sunset Valley Marketfair Sunset Valley, TX CalPERS $21,600,000
EXHIBIT D-1
Schedule of Manager's Contributed Projects
Property Name Location Contributor Net Asset Value
------------- -------- ----------- ---------------
Point Loma Plaza San Diego, CA Manager $27,700,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Manager $9,340,000
Navajo Shopping Center San Diego, CA Manager $10,000,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ Manager $20,000,000
Auburn Village Auburn, CA Manager $15,900,000
Greenway Tigard, OR Manager $7,652,711
Young's Bay Warrenton, OR Manager $5,168,768
EXHIBIT ▇-▇
▇▇▇▇▇ ▇ - Sale Properties
Property Name Location
------------- --------
Around Lenox Shopping Center ▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ Farms Albany, NY
Woodlawn Point Shopping Center Atlanta, GA
EXHIBIT ▇-▇
▇▇▇▇▇ ▇ - Exchange Properties
Property Name Location
------------- --------
Lakeshore Plaza San Francisco, CA
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
Manhattan - Fry's Manhattan Beach, CA
EXHIBIT F
Contributions to Date
Property Name Location Contributor Contribution Date Net Asset Value
------------- -------- ----------- ----------------- ---------------
Clackamas Promenade Clackamas, OR CalPERS 10/1/98 $39,000,000
Villa Monaco Denver, CO CalPERS 10/1/98 $9,100,000
Cherrywood Square Littleton, CO CalPERS 10/1/98 $6,400,000
▇▇▇▇▇▇▇ Square Arvida, CO CalPERS 10/1/98 $5,000,000
Sunset Valley Marketfair Sunset Valley, TX CalPERS 10/1/98 $21,600,000
Point Loma Plaza San Diego, CA Manager 12/22/99 $27,700,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ Manager 12/22/99 $9,340,000
Navajo Shopping Center San Diego, CA Manager 4/1/99 $10,000,000
Auburn Village Auburn, CA Manager 6/15/99 $15,900,000
Greenway Tigard, OR Manager 4/1/99 $7,652,711
Young's Bay Warrenton, OR Manager 4/1/99 $5,168,768
EXHIBIT G
Schedule 1 to Exhibit E
Nominee Projects
Property Name Location Net Asset Value
------------- -------- ---------------
Point Loma Plaza San Diego, CA $27,700,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ $9,340,000
EXHIBIT H
PROPERTY MANAGEMENT AGREEMENT
by and between
BPP RETAIL, LLC,
(the "Owner")
and
▇▇▇▇▇▇▇ PACIFIC OPERATING PARTNERSHIP, L.P.
(the "Property Manager")
[NAME OF PROJECT]
--------------------
[CITY/STATE]
--------------------
, 19
------------ --
TABLE OF CONTENTS
PAGE
----
RECITALS..........................................................................................................1
ARTICLE 1 DEFINITIONS.............................................................................................1
1.1 Definitions........................................................................................1
1.2 Additional Defined Terms...........................................................................2
ARTICLE 2 APPOINTMENT AND SERVICES OF PROPERTY MANAGER............................................................3
2.1 Appointment; Term..................................................................................3
2.2 Services of Property Manager.......................................................................3
2.2.1 Employees................................................................................3
2.2.2 Records and Budgets......................................................................3
2.2.3 Leasing..................................................................................5
2.2.4 Rent.....................................................................................5
2.2.5 Collections..............................................................................5
2.2.6 Maintenance..............................................................................5
2.2.7 Contracts................................................................................6
2.2.8 Purchases................................................................................6
2.2.9 Operating and Capital Expenses...........................................................6
2.2.10 Energy Management........................................................................7
2.2.11 Security.................................................................................7
2.2.12 Taxes....................................................................................7
2.2.13 Compliance with Owner's Obligations......................................................7
2.2.14 Licenses and Permits.....................................................................8
2.2.15 Notice and Cooperation in Legal Proceedings..............................................8
2.2.16 Construction Facilitation................................................................8
2.2.17 General..................................................................................8
2.3 Qualifications of Property Manager.................................................................9
ARTICLE 3 COMPENSATION AND EXPENSES OF PROPERTY MANAGER...........................................................9
3.1 Management Fee.....................................................................................9
3.2 Costs and Expenses to be Borne by Property Manager.................................................9
3.3 Costs and Expenses to be Borne by Owner...........................................................10
3.4 Noncustomary Services.............................................................................10
ARTICLE 4 PERSONNEL AND BONDING..................................................................................10
4.1 Stability of Management Team......................................................................10
4.2 Affiliates........................................................................................11
4.3 Bonding...........................................................................................11
ARTICLE 5 COMPLIANCE WITH LAWS...................................................................................11
5.1 Compliance........................................................................................11
5.2 Notice............................................................................................12
ARTICLE 6 ACCOUNTING AND FINANCIAL MATTERS.......................................................................12
6.1 Books and Records.................................................................................12
6.2 Reports and Reconciliation of Property Accounts...................................................12
6.2.1 Monthly Reports.........................................................................12
i
6.2.2 Quarterly Reports.......................................................................13
6.2.3 Periodic Reports........................................................................13
6.3 Audit.............................................................................................13
6.4 Other Reports and Statements......................................................................13
6.5 Contracts and Other Agreements....................................................................13
6.6 Final Accounting..................................................................................14
6.7 Tax Returns.......................................................................................14
6.8 Certification.....................................................................................14
6.9 Inspections.......................................................................................14
ARTICLE 7 BANK ACCOUNTS..........................................................................................14
7.1 Property Lockbox Account..........................................................................14
7.2 Property Disbursement Account.....................................................................14
ARTICLE 8 INSURANCE AND INDEMNITY................................................................................15
8.1 Indemnification...................................................................................15
8.2 Property Manager's Insurance Responsibility.......................................................16
8.3 Contract Documents; Indemnity Provisions..........................................................17
8.4 Approval of Insurance Companies...................................................................18
8.5 Owner's Insurance Responsibility..................................................................18
8.6 Property Manager's Duties in Case of Loss.........................................................18
ARTICLE 9 RELATIONSHIP OF PARTIES................................................................................19
9.1 Representations and Warranties....................................................................19
9.1.1 Property Manager's Expertise............................................................19
9.1.2 Property Manager's Authority............................................................19
9.1.3 Owner's Authority.......................................................................19
9.1.4 Reliance................................................................................19
9.2 Nature of Relationship............................................................................19
9.3 Communications Between Parties....................................................................19
9.4 Relationship of Owner and Property Manager with Respect to Leasing................................20
9.5 Intentionally Omitted.............................................................................20
9.6 Confidentiality...................................................................................20
9.7 Property Manager Not to Pledge Owner's Credit.....................................................20
ARTICLE 10 TERMINATION...........................................................................................21
10.1 Termination by Owner Without Cause................................................................21
10.2 Termination by Owner for Cause....................................................................21
10.3 Termination by Property Manager...................................................................22
10.4 Termination on Sale...............................................................................23
10.5 Orderly Transition................................................................................23
10.6 Rights Which Survive Termination or Expiration....................................................23
10.7 Damages...........................................................................................23
ARTICLE 11 GENERAL...............................................................................................23
11.1 Notices...........................................................................................23
11.2 Entire Agreement..................................................................................24
11.3 Amendments and Waivers............................................................................24
11.4 Invalidity of Provision...........................................................................24
ii
11.5 Governing Law.....................................................................................25
11.6 Time..............................................................................................25
11.7 Assignment........................................................................................25
11.8 Counterparts......................................................................................25
11.9 Exculpation.......................................................................................25
11.10 Attorneys' Fees...................................................................................25
11.11 Further Assurances................................................................................25
11.12 No Waiver.........................................................................................26
11.13 No Advertising....................................................................................26
11.14 Signs.............................................................................................26
11.15 Conflicts with Operating Agreement................................................................26
11.16 References........................................................................................26
11.17 Consent...........................................................................................26
iii
Exhibits
--------
EXHIBIT A - DESCRIPTION OF PROPERTY
EXHIBIT B - FAIR EMPLOYMENT PRACTICES ADDENDUM
iv
PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT ("AGREEMENT") IS MADE AS OF
_______________, 1998 ("EFFECTIVE DATE"), BY AND BETWEEN BPP RETAIL, LLC, A
DELAWARE LIMITED LIABILITY COMPANY ("OWNER"), AND ▇▇▇▇▇▇▇ PACIFIC OPERATING
PARTNERSHIP, L.P., A DELAWARE LIMITED PARTNERSHIP ("PROPERTY MANAGER").
RECITALS
A. OWNER IS THE OWNER OF THAT CERTAIN COMMERCIAL PROPERTY DESCRIBED IN
EXHIBIT A ATTACHED HERETO (THE "PROPERTY"). THE PROPERTY IS COMMONLY KNOWN AS
_____________________ AND IS LOCATED AT ______________________.
B. PROPERTY MANAGER IS EXPERIENCED IN THE MANAGEMENT, OPERATION AND
SUPERVISION OF SIMILAR COMMERCIAL PROPERTIES IN THE GEOGRAPHIC AREA WHERE THE
PROPERTY IS LOCATED AND IS THE MANAGER OF OWNER ("MANAGER"). MANAGER AND THE
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM ("CALPERS") ARE PARTIES TO THAT
CERTAIN OPERATING AGREEMENT DATED AS OF AUGUST 31, 1998 (THE "OPERATING
AGREEMENT").
C. THE PARTIES DESIRE TO SET FORTH IN THIS AGREEMENT THE TERMS AND
CONDITIONS UNDER WHICH PROPERTY MANAGER SHALL ACT AS MANAGER OF THE PROPERTY, AS
PERMITTED UNDER THE OPERATING AGREEMENT.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED
AND OTHER GOOD AND VALUABLE CONSIDERATION, OWNER AND PROPERTY MANAGER AGREE AS
FOLLOWS:
ARTICLE 1 DEFINITIONS.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall have
the respective meanings set forth in this Section 1.1:
1.1.1 AFFILIATE: The term "Affiliate" shall mean when used
with reference to a specified Person, (a) any Person that directly or indirectly
through one or more intermediaries controls or is controlled by or is under
common control with the specified Person, (b) any Person that is an executive
officer or board member of, general partner in or trustee of, or serves in a
similar capacity with respect to, the specified Person or of which the specified
Person is an officer, general partner or trustee, or with respect to which the
specified Person serves in a similar capacity, (c) any Person that, directly or
indirectly, is the beneficial owner of 20% or more of all voting classes of
equity securities of the specified Person or of which the specified Person is
directly or indirectly the owner of 20% or more of all voting classes of equity
securities, or (d) any trust established by the specified Person for the benefit
of any such relative or spouse of such Person. "Affiliate" or "Affiliated
Person" of the Owner or the members thereof does not include a Person who is a
partner in a partnership or a joint venture with the Owner or any other
Affiliated Person if such Person is not otherwise an Affiliate or Affiliated
Person of the Owner or the members thereof. The term "Person" means any
individual, partnership, limited
-1-
liability company, corporation, cooperative, trust, estate, government (or any
branch or agency thereof) or other entity.
1.1.2 APPROVED CAPITAL BUDGET. "Approved Capital Budget" shall
have the meaning set forth in Section 2.2.2.
1.1.3 APPROVED OPERATING BUDGET. "Approved Operating Budget"
shall have the meaning set forth in Section 2.2.2.
1.1.4 CALPERS. "CalPERS" shall mean the California Public
Employees' Retirement System, an agency of the State of California.
1.1.5 GROSS MONTHLY COLLECTIONS. The term "Gross Monthly
Collections" shall mean the total gross monthly collections received from the
Property, including, without limitation, base rents, percentage rents and
reimbursements or direct payments of taxes, insurance or other charges for which
a tenant is liable under its lease, payments in connection with the termination,
cancellation, expiration, renewal, extension or modification of a tenant's
lease, net receipts from the operation or rental of parking facilities and
business interruption and rental loss proceeds; provided, however, that any
payment of money by a tenant to Owner or Property Manager in consideration for
or in conjunction with a security, rental or other deposit (unless and until
actually applied as rent), property insurance loss proceeds, remodeling and
tenant improvement charge costs, condemnation proceeds or proceeds received by
Owner in connection with the sale of any portion of the Property or the
refinancing of any indebtedness secured by a lien on any portion of the Property
shall not be included in the Gross Monthly Collections. Any advance rental
payments (not to exceed 60 days in advance of their due date) shall be included
in Gross Monthly Collections when received.
1.1.6 MANAGER: The term "Manager" shall mean ▇▇▇▇▇▇▇ Pacific
Operating Partnership, a Delaware limited partnership, or any Owner-designated
successor thereto. Owner may change Managers at any time and for any reason, and
shall give Property Manager written notice of any such change.
1.1.7 PROPERTY: The term "Property" shall mean that certain
commercial real property described in Recital paragraph A.
1.1.8 RECORDS OFFICE: The term "Records Office" shall mean
Property Manager's offices located at ____________________________.
1.1.9 STAFF: The term "Staff" shall mean CalPERS' internal
management staff.
1.2 ADDITIONAL DEFINED TERMS. Initial-capitalized terms not defined in
Section 1.1 shall have the meanings otherwise ascribed to them in this
Agreement.
-2-
ARTICLE 2 APPOINTMENT AND SERVICES OF PROPERTY MANAGER.
2.1 APPOINTMENT; TERM. Owner hereby appoints Property Manager as the
exclusive manager of the Property for a term beginning on the Effective Date.
Unless otherwise approved by CalPERS, this Agreement shall be deemed terminated
on the date of the effective date of the removal, termination or resignation of
Manager as the manager of Owner under the Operating Agreement. The period during
which this Agreement is in effect is referred to hereafter as the "Term."
2.2 SERVICES OF PROPERTY MANAGER. Subject to Owner providing sufficient
funds to Property Manager, Property Manager shall direct, supervise, manage,
operate, maintain and repair the Property and develop, institute and follow
programs and policies to facilitate the efficient operation of the Property on
as profitable a basis as reasonably possible and in compliance with this
Agreement and all directions of Manager. Property Manager acknowledges and
agrees that it shall be the role and duty of Manager to generally supervise the
operation and management of the Property, including, without limitation, the
performance of Property Manager under this Agreement. Property Manager shall
cooperate with Manager in performing Property Manager's duties and obligations
under this Agreement. Property Manager further acknowledges and agrees that
Owner and Manager shall set policy and establish objectives with respect to
management of the Property, and Property Manager shall perform all services
under this Agreement in accordance with such policies and objectives. Owner may
delegate any approval rights under this Agreement to Manager.
Without limiting the generality of the foregoing provisions of this
Section 2.2 and subject at all times to the procedures and directions set forth
in this Agreement (as may be revised or amended from time to time), Property
Manager shall do all of the following at Owner's cost (except as expressly
provided herein):
2.2.1 EMPLOYEES. Property Manager shall select, employ, pay,
supervise and discharge all employees and personnel necessary for the operation,
maintenance and protection of the Property (subject to the limitations set forth
in Section 4.1). All persons so employed by Property Manager shall be employees
or independent contractors of Property Manager and not of Owner. Property
Manager shall comply with all applicable laws, rules and regulations concerning
worker's compensation, social security, unemployment insurance, hours of labor,
wages, working conditions and other employer/employee-related subjects. Property
Manager shall comply with all provisions of the Fair Employment Practices
Addendum attached as EXHIBIT B.
2.2.2 RECORDS AND BUDGETS. Property Manager shall keep or
cause to be kept at the Records Office suitable books of control and account as
provided in this Agreement. Property Manager shall prepare and submit to Manager
such monthly, quarterly, annual or other operating and capital budgets for the
Property as may be required by Manager or Owner, including, without limitation,
those required to be delivered to CalPERS under the Operating Agreement. Without
limiting the generality of the foregoing, Property Manager shall prepare and
submit to Manager a proposed annual operating budget and a proposed annual
capital budget for the management and operation of the Property in sufficient
time so that Owner may deliver the same to CalPERS when called for under the
Operating Agreement. All payments to be made
-3-
to Property Manager or an Affiliate thereof shall be separately itemized and
explained in the proposed annual operating budget and the proposed capital
budget. The proposed annual operating and capital budgets shall be in a form
approved by Manager. Manager will review the proposed budgets and if Manager
considers them acceptable, will present them to Owner for approval, and if
necessary under the Operating Agreement, to CalPERS for approval. If Manager
and/or CalPERS considers any proposed budget unacceptable, Manager shall specify
to Property Manager the reason(s) therefor and Property Manager shall revise and
resubmit the budget until it is accepted by Manager and approved by Owner and/or
CalPERS. The parties intend that an "Approved Operating Budget" and an "Approved
Capital Budget" for the following calendar year shall be in place for the
Property by January 1 of each year during the Term.
In the event an annual operating budget for the Property has not been
approved by Owner prior to the commencement of any calendar year during the
Term, the operating budget for each calendar month ("Current Month") until the
annual operating budget is approved shall be the amount of the most recent
Approved Operating Budget for the Property for the same calendar month ("Base
Month"), as adjusted to reflect (a) any increase or decrease between the Base
Month and the Current Month in the Consumer Price IndexBU.S. Cities Average
(base year 1982-84=100) published by the United States Department of Labor,
Bureau of Labor Statistics, and (b) any increase or decrease in the occupancy of
the Property between the Base Month and the Current Month. Property Manager
shall submit such adjusted monthly operating budget to Manager for review not
more than 10 days before the first day of the month for which it is proposed,
and such budget, after approval by Manager, shall be deemed an "Approved
Operating Budget" for purposes of this Agreement.
Property Manager shall have the right from time to time to submit proposed
revised budgets to Manager, and Manager shall recommend to Owner whether or not
such revised budgets should be approved by Owner. Property Manager shall use
diligence and all reasonable efforts to prevent the actual costs of maintaining
and operating the Property from exceeding the Approved Operating and Capital
Budgets.
All budgets shall be effective only when approved by Owner, or necessary
under the Operating Agreement, when approved by CalPERS. Owner may revoke its
approval of any budget at any time. Owner may amend its approval of any budget
and require the budget to be amended to conform to such approval at any time
and, in such event, only the budget as so amended shall be deemed approved.
After revoking or amending an Approved Budget, Owner shall have the right to
require Property Manager to terminate any agreements or void any actions which
are no longer consistent with an Approved Budget.
2.2.3 LEASING. Property Manager shall coordinate the leasing
activities of the Property.
2.2.4 RENT. Property Manager shall (a) use reasonable efforts
to ensure that all rents and other monies (including ▇▇▇▇▇▇▇▇ resulting from
tenant participation in operating expenses, taxes and common area maintenance
charges) payable under the leases are paid by tenants of the Property, either to
Property Manager directly, to the Property Lockbox Account (as defined in
Section 7.1) or to any lockbox required by the terms of a loan to Owner, as and
when such amounts become due and payable, (b) adjust rentals and other required
payments where
-4-
adjustment is contemplated by the applicable leases, (c) notify Manager and
tenants of such adjustments, and (d) sign and serve in the name of Owner such
notices (except as limited by Section 2.2.5), including, without limitation,
letters demanding past-due and currently owing rents and other monies, as are
consistent with Owner's procedures. Property Manager shall identify and collect
any income due Owner from miscellaneous services provided to tenants or the
public, including, without limitation, parking, tenant storage and retail
income, if any. All monies so collected shall be deposited immediately in the
Property Lockbox Account or lender lockbox account.
2.2.5 COLLECTIONS. Property Manager shall undertake the
periodic billing of rents and monetary payments of every kind and form due from
tenants of the Property, and thereafter shall actively pursue collection of all
such rents and other payments. Property Manager shall not terminate any lease,
lock out any tenant, institute any suit for rent or for use and occupancy,
provide notice by legal service to pay rent or quit or institute proceedings for
recovery of possession without the prior approval of Manager. Only legal counsel
designated by Owner shall be retained in connection with any such suit or
proceeding, and Property Manager upon request shall recommend legal counsel and
furnish Manager with the estimated costs of legal services to be incurred in
bringing such suit or proceeding. In the event any tenant of the Property is
delinquent in any payment due to Owner or is otherwise in default under the
terms of its lease for a period of more than 30 days, Property Manager shall
immediately notify Manager and Manager shall have the right, but not the
obligation, to contact the tenant directly with respect to the delinquency or
default.
2.2.6 MAINTENANCE.
(a) At Owner's sole cost, Property Manager shall maintain or cause to
be maintained (to the extent not maintained by tenants) the Property and common
areas thereof, external and internal, in good and clean condition and repair as
a first-class commercial building, including, without limitation, all sidewalks,
signs, mechanical, electrical and other systems, parking lots and landscaping;
provided, however, that no maintenance expenses, repairs or alterations which
are not specifically identified in the Approved Operating Budget shall be
incurred or undertaken without the prior consent of Manager. If Owner so elects
in its sole and absolute discretion, all maintenance, repairs or alterations
requiring expenditures in excess of Two Hundred Thousand Dollars ($200,000)
shall be planned and supervised by an architect, designer, inspector, engineer,
construction manager or general contractor selected by Owner in its sole and
absolute discretion. If Manager requests, Property Manager shall recommend
qualified persons to provide such services.
(b) Notwithstanding anything to the contrary in this Agreement, in the
event of an emergency in which there is an immediate danger to persons or
property or in which action is required in order to avoid suspension of
services, Property Manager at Owner's sole cost shall take such action as is
reasonable and prudent under the circumstances. Property Manager shall be
reimbursed promptly for any reasonably necessary expenses incurred in such
action, even if not in an Approved Operating Budget or Approved Capital Budget,
so long as Property Manager attempts to consult with Manager in advance and, in
any event, notifies Manager within 48 hours of taking such action explaining the
reasons therefor.
-5-
2.2.7 CONTRACTS. Property Manager shall negotiate and, with
Manager's prior approval, execute all necessary or desirable utility, supply,
service, vending and related contracts and equipment leases for the Property.
Property Manager shall not execute any contract or other agreement affecting the
Property without Manager's prior consent; provided, however, that Manager's
consent shall not be required with respect to any utility or service contract
which (a) is entered into in the usual course of business, (b) has a term of one
year or less, and (c) is specifically provided for in the Approved Operating
Budget. Without limiting the foregoing, each contract or agreement executed by
Property Manager pursuant to this Section 2.2.7 shall contain a 90-day (or
shorter) cancellation clause exercisable by Owner without cause and without
penalty or fee, unless otherwise approved in writing by Manager. All such
utility, supply, service, vending and related contracts and equipment leases
shall be in the name of Owner and executed by Property Manager as agent on
behalf of Owner.
2.2.8 PURCHASES. Property Manager shall, at Owner's sole cost,
supervise and purchase or arrange for the purchase of all reasonable
inventories, provisions, supplies and operating equipment which are provided for
in the Approved Operating Budget or otherwise specifically approved by Manager.
To the extent available, Property Manager shall turn over to or obtain for Owner
all volume purchasing benefits and discounts available to Property Manager,
Manager or properties of the size and class of the Property.
2.2.9 OPERATING AND CAPITAL EXPENSES.
(a) Property Manager shall pay from Owner's funds, in a commercially
reasonable manner, all normal operating expenses of the Property (and not paid
directly by tenants) with funds from the Property Disbursement Account (as
defined in Section 7.2).
(b) Property Manager shall recommend that Owner purchase major items of
new or replacement equipment when Property Manager believes such purchase to be
necessary or desirable. Owner may arrange to purchase and install such items
itself or may authorize Property Manager to do so (subject to any supervision
and specification requirements and conditions prescribed by Manager). Property
Manager shall obtain at least three written estimates from qualified bidders for
any capital improvement project if the cost of the project is reasonably
expected to exceed One Hundred Thousand Dollars ($100,000). If Owner so elects
in its sole and absolute discretion, any capital improvement project costing
more than Twenty-Five Thousand Dollars ($25,000) shall be planned and supervised
by an architect, designer, inspector, engineer, construction manager or general
contractor selected by Owner in its sole and absolute discretion. If Manager
requests, Property Manager shall recommend qualified persons to provide such
services. All payments for capital expenditures shall be approved in advance by
CalPERS if required under the Operating Agreement. Unless specifically included
in the Approved Capital Budget or permitted under subsection 2.2.6(b), all
capital expenditures must be authorized by Owner in advance.
2.2.10 ENERGY MANAGEMENT. At Owner's cost, Property Manager
shall provide proper energy management and utilize utility conservation
techniques.
2.2.11 SECURITY. At Owner's cost, Property Manager shall
maintain or cause to be maintained a security program designed to be adequate
for the needs of the Property as
-6-
determined by Manager from time to time. Property Manager shall promptly notify
Manager of any incidents or conditions which reflect on or affect the adequacy
of the security provisions for the Property, and shall make recommendations to
Manager with respect to security matters.
2.2.12 TAXES. Property Manager shall obtain and verify bills
for real estate and personal property taxes, sales taxes on rental payments,
improvement assessments or bonds and other like charges which are or may become
liens against all or any part of the Property (collectively, "Taxes"). From
Owner's funds, Property Manager shall pay all bills for Taxes not less than 15
calendar days prior to delinquency. Alternatively, Manager may elect to pay some
or all bills for Taxes. In such event, Property Manager shall remit all bills
for Taxes to Manager not less than 30 calendar days prior to the date such Taxes
would become delinquent and shall pay only those tax bills designated by
Manager. If Owner elects to contest any Taxes, Manager or Owner shall notify
Property Manager and Property Manager shall not pay the Taxes until directed by
Owner or Manager.
2.2.13 COMPLIANCE WITH OWNER'S OBLIGATIONS. Property Manager
shall operate the Property in compliance with all terms and conditions of any
ground lease, space lease, mortgage, deed of trust or other security instrument
affecting the Property, if any, of which Property Manager has knowledge.
Property Manager shall not make payments on account of any ground lease, space
lease, mortgage, deed of trust or other security instrument affecting the
Property, if any, unless specifically instructed to do so by Owner in writing.
2.2.14 LICENSES AND PERMITS. Property Manager shall obtain, at
Owner's expense, all licenses, permits, certificates, consents, approvals or
other entitlements required for the operation of the Property (collectively,
"Licenses"). Property Manager shall provide Manager with copies of all completed
initial or renewal License applications for Manager's approval and Owner's
signature, if necessary, not less than 30 days prior to the date such
applications are due. All Licenses shall be obtained in Owner's name whenever
possible. Any Licenses obtained in the name of Property Manager shall be held on
behalf of Owner, and upon termination of this Agreement, Property Manager shall
transfer or assign all such Licenses to Owner or to such person as Owner may
direct at no cost to Owner.
2.2.15 NOTICE AND COOPERATION IN LEGAL PROCEEDINGS. Owner and
Property Manager each shall give prompt notice to the other of the commencement
of any action, suit or other legal proceeding against Owner or against Property
Manager with respect to the operations of the Property or otherwise affecting
the Property. Property Manager shall fully cooperate, and shall use reasonable
efforts to cause all its employees to fully cooperate, in connection with the
prosecution or defense of all legal proceedings affecting the Property.
2.2.16 CONSTRUCTION FACILITATION. Property Manager shall be
responsible for (a) coordinating and facilitating the planning, and (b)
facilitating the performance of all construction (including, without limitation,
all maintenance, repairs and alterations described in Section 2.2.6, capital
improvement projects described in Section 2.2.9, tenant improvements, tenant
refurbishments and common area refurbishments) required to be constructed by
Owner after the Effective Date (collectively, "Construction Projects"),
regardless of whether or not any such Construction Project arises out of a lease
executed prior to the Effective Date. Such coordination and facilitation
services shall include, for example and not by way of limitation,
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retaining at Owner's cost, architects, engineers or other consultants, assisting
in the development of repair, capital improvement or tenant space plans, cost
estimating, advising Owner with respect to the need for a general contractor,
construction manager or other consultant, posting (and recording if necessary or
desirable) appropriate notices of non-responsibility, providing notices of
construction to affected tenants and mitigating the effects of construction on
such tenants, and providing contractors, vendors and other Construction
Project-related personnel with access to the Property, parking and staging areas
and necessary utilities and services.
2.2.17 GENERAL. Property Manager shall provide such direction,
supervision, professional management and in-house consulting staff services as
may be necessary or desirable to operate the Property in a manner at least equal
to that which is customary and usual in the operation of other properties of
substantially comparable location, class, size and standing, and shall provide
such property management services for the Property as are consistent with the
Property's size and existing facilities. Subject only to those express
limitations set forth in this Agreement, Property Manager shall have control and
discretion in the management and operation of the Property and in the provision
of the services described in this Agreement.
2.3 QUALIFICATIONS OF PROPERTY MANAGER. Owner acknowledges that Property
Manager is not being retained (and does not have the skill or appropriate
Licenses) to perform services of the nature provided in connection with the
Property by insurance brokers, general contractors, subcontractors, suppliers,
designers, architects, engineers and related tradesmen. Property Manager
acknowledges that Owner shall rely on Property Manager's experience and due
diligence to arrange, coordinate and administer Owner's acquisition and
coordination of services to be provided by such contractors, suppliers and
consultants in connection with the Property.
ARTICLE 3 COMPENSATION AND EXPENSES OF PROPERTY MANAGER.
3.1 MANAGEMENT FEE. As full and complete compensation for all services to
be provided by Property Manager under this Agreement, Owner shall pay to
Property Manager a sum equal to 3% of the Gross Monthly Collections actually
collected for the Property during the Term (the "Management Fee"). The
Management Fee shall be payable monthly, one month in arrears, commencing upon
the last day of the first full month of the Term. The Gross Monthly Collections
for any partial month during the Term shall be prorated, and the Management Fee
shall be payable only upon that portion of the Gross Monthly Collections
allocable to that part of the month during the Term.
3.2 COSTS AND EXPENSES TO BE BORNE BY PROPERTY MANAGER. Except as
specifically provided in Section 3.3 below or in the Approved Operating Budget,
Property Manager shall bear all costs and expenses incurred in rendering all
overall supervisory, lease negotiation (exclusive of lease commissions, surveys,
environmental reports and attorneys' fees), rent and other collection (exclusive
of attorneys' fees and outside collection agency fees), lease enforcement
(exclusive of court costs and attorneys' fees), lease termination (exclusive of
attorneys' fees and payments), management (exclusive of real estate tax reviews,
CAM audits and percentage rent audits), construction oversight and facilitation
(unless third parties are hired), accounting, bookkeeping and recordkeeping, and
no such costs or expenses shall be charged to Owner. Owner shall not be
responsible for any of the following costs and expenses:
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3.2.1 All costs of gross salary and wages, payroll taxes,
insurance, worker's compensation and other costs of Property Manager's office
and executive personnel (other than full-time or part-time on-site personnel
whose positions and salaries are specifically authorized in the Approved
Operating Budget);
3.2.2 All out-of-pocket costs incurred as a result of Property
Manager's breach of this Agreement, the gross negligence or willful misconduct
of Property Manager or any of its Affiliates, employees, independent
contractors, agents or other representatives performing services in connection
with this Agreement. In the event that a third-party contractor is hired to
perform a specific task or service and Property Manager complies with its
obligations to (a) exercise reasonable care in selecting a qualified, competent
and trustworthy person or business entity to perform such tasks or services (as
set forth in Section 4.1.1), and (b) supervise the activities and performance of
such third-party contractor (as set forth in Sections 2.2.1 and 2.2.17),
Property Manager shall not be liable under this Section 3.2.2 for costs incurred
as a result of the negligence or willful misconduct of such third-party
contractor;
3.2.3 All costs of forms, accounting materials, administrative
materials, papers, ledgers and other office supplies and office equipment other
than those used in Property Manager's on-site office, all costs of Property
Manager's data processing equipment other than that located at Property
Manager's on-site office and all costs of data processing other than that
provided by computer service companies to Property Manager's on-site office;
3.2.4 All costs of Property Manager's bookkeeping and
accounting relating to the Property; and
3.2.5 All local transportation costs of Property Manager's
personnel.
3.3 COSTS AND EXPENSES TO BE BORNE BY OWNER. Except as set forth in
Section 3.2 or elsewhere in this Agreement, Owner shall be responsible for
leasing commissions, attorneys' fees and court costs and outside collection
agency fees incurred in connection with lease negotiation, enforcement and
termination and rent and other collection and litigation (subject to the
insurance and indemnity provisions of Article 8) and all other costs related to
the Property.
3.4 NONCUSTOMARY SERVICES. Notwithstanding anything in this Agreement to
the contrary, Property Manager shall not furnish or render services to the
tenants of the Property other than those services customarily furnished to
tenants of similar properties unless (a) Property Manager makes separate,
adequate charges to tenants for such services, (b) such charges are received and
retained by Property Manager, (c) Property Manager bears the cost of providing
such services, and (d) Property Manager first obtains Manager's consent. For
purposes of this Section 3.4, it is agreed that maintenance, trash collection,
janitorial services and cleaning services, the furnishing of water, heat, light,
air conditioning, public entrances and exits, guard or security services and
parking facilities are examples of services customarily furnished to the tenants
of similar properties.
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ARTICLE 4 PERSONNEL AND BONDING.
4.1 STABILITY OF MANAGEMENT TEAM. Owner and Property Manager recognize the
benefits inherent in promoting stability in the management team engaged in the
operation of the Property.
4.1.1 Property Manager shall use reasonable care to select
qualified, competent and trustworthy employees and independent contractors.
Subject to the provisions of this Section 4.1, Section 10.2.13 and EXHIBIT B,
the selection, terms of employment (including, without limitation, compensation
and duration of employment), supervision, training and assignment of duties of
all employees of Property Manager providing Property-related services shall be
the duty and responsibility of Property Manager. All personnel providing the
Property-related services described in this Agreement shall be the employees or
contractors of Property Manager.
4.1.2 Property Manager shall employ, at Property Manager's
sole cost and expense, at least the following personnel for the Property:
(a) A manager who works from the Records Office and manages the
Property; and
(b) An accountant, who shall be a part of Property Manager's in-house
staff and who may work from a central location.
4.2 AFFILIATES. Property Manager shall not contract for outside services
for the Property with any Affiliate of Property Manager without Owner's prior
written consent, which consent may be granted or withheld in Owner's sole and
absolute discretion.
4.3 BONDING. Property Manager, at Property Manager's sole cost and
expense, shall maintain at all times during the Term a bond or bonds covering
Property Manager and all persons who handle, have access to or are responsible
for Owner's monies, in an amount and form reasonably acceptable to Manager. Any
changes in such bond(s) must be approved in writing by Manager. Property Manager
hereby collaterally assigns to Owner all proceeds of the bond(s) as they relate
to the Property and agrees to execute such further collateral assignments and
notices thereof as may be required by Owner. Such bond(s) shall insure, among
other risks as determined by Owner, Property Manager's faithful performance of
its obligations under this Agreement. Property Manager shall provide Manager
with a certificate or other satisfactory documentation evidencing the existence
and terms of such bond(s) upon execution of this Agreement.
ARTICLE 5 COMPLIANCE WITH LAWS.
5.1 COMPLIANCE. Property Manager shall abide by and comply fully with all
laws, rules, regulations, requirements, orders, notices, determinations and
ordinances of any federal, state or municipal authority with jurisdiction over
Property Manager or the Property (collectively, "Applicable Laws"), including,
without limitation, the federal Occupational Safety and Health Act (OSHA)
statutes, rules and regulations, and all requirements of the insurers of the
Property and Owner's liabilities with regard thereto. If the cost of compliance
in any instance is not provided for in the Approved Operating or Capital Budget
and is reasonably anticipated to exceed One Hundred Thousand Dollars
($100,000.00), Property Manager shall notify Manager promptly and obtain
Manager's approval prior to making the expenditure.
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5.2 NOTICE. Property Manager shall notify Manager of any alleged violation
of any Applicable Law affecting the Property immediately upon becoming aware
thereof.
ARTICLE 6 ACCOUNTING AND FINANCIAL MATTERS.
6.1 BOOKS AND RECORDS. Subject to the Operating Agreement, Property
Manager shall keep accounts, books and records of the Property, pursuant to
methods and systems and in form and substance reasonably approved by Manager,
showing all receipts, expenditures and all other matters necessary or
appropriate for the recording of the results of the operation of the Property.
Such accounts, books and records shall be kept in a secure location at the
Records Office and shall be available for inspection and copying by Owner,
Manager and their representatives at any time. Upon the effective date of any
termination of this Agreement, all accounts, books and records shall be
delivered to Manager so as to ensure the orderly continuance of the management
and operation of the Property.
6.2 REPORTS AND RECONCILIATION OF PROPERTY ACCOUNTS. Subject to the
Operating Agreement, Property Manager shall provide the following reports:
6.2.1 MONTHLY REPORTS. On or before the 15th day of each
month, Property Manager shall provide such reports and data to Manager as Owner
or Manager may require from time to time. Without limiting the foregoing,
Property Manager shall provide Manager with a monthly report containing the
following information for the preceding calendar month:
(a) A detailed report of all monies collected (identified by tenant or
other source), including, without limitation, rents billed (including
escalations), rents collected (including escalations), vacancies, rents
delinquent, rents prepaid beyond the current month, security deposits collected,
and as to any percentage leases, tenant gross sales receipts;
(b) A detailed report of all expenses paid, including a schedule and
description of all amounts paid to Property Manager or an Affiliate thereof;
(c) A comparison of the current month and year-to-date account of
actual expenses to budgeted amounts, calculations of monthly and year-to-date
variances from the Approved Operating and Capital Budgets, appropriate
descriptions of any significant monthly or year-to-date variances and a revised
annualized projection of monies to be collected and expenses to be paid for the
balance of the calendar year;
(d) A written report describing any material changes in the Property
which occurred during the month or are anticipated to occur;
(e) A reconciliation of amounts receivable or due to Owner accompanied
by payment of same;
(f) A reconciliation of the Property Lockbox and Disbursement Accounts
as to funds received, expended and held for the Property; and
(g) Any other financial or operating information which may be required
from time to time by Manager or Owner.
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6.2.2 QUARTERLY REPORTS. Property Manager shall provide a
quarterly management report for the Property, which shall be submitted with the
applicable monthly financial statements and shall contain, without limitation,
the recommendations of Property Manager regarding the physical condition and
operation of the Property.
6.2.3 PERIODIC REPORTS. Property Manager shall furnish to
Manager periodically as reasonably requested:
(a) Market surveys and any other tenant information;
(b) Reports covering on-site physical inspections and operating
reviews; and
(c) A current inventory of all personal property and equipment used in
connection with the Property. The inventory shall be submitted to Manager no
later than 30 days prior to the end of each calendar year.
6.3 AUDIT. Owner shall have the right to conduct an audit of all or any
portion of the Property's operations at any time. Property Manager shall
promptly correct all accounting method deficiencies and errors disclosed by
Owner's audits, and shall timely inform Owner in writing of all corrective
actions taken. Owner's audit shall be at Owner's sole cost and expense unless an
error on the part of Property Manager or its accountant is discovered which
affects Owner adversely and is equal to or greater than 2% of the greater of
gross expenses or gross receipts of the Property for the period audited, in
which case Property Manager shall bear the full cost of the audit. Any
adjustments in amounts due and owing from Owner or Property Manager shall be
paid within 15 calendar days following Owner's receipt of the audit.
6.4 OTHER REPORTS AND STATEMENTS. Property Manager shall furnish to Owner
or Manager, as promptly as practicable, such other reports, statements or other
information with respect to the operation of the Property as Owner or Manager
may reasonably request from time to time. Property Manager shall submit to Owner
for submission to CalPERS its annual financial report, audited by an independent
certified public accountant, no later than 120 days after the end of Property
Manager's fiscal year.
6.5 CONTRACTS AND OTHER AGREEMENTS. Property Manager shall maintain at the
Records Office one original (or a copy, if no original is available) of all
contracts, occupancy leases, lease abstracts, equipment leases, maintenance
agreements and all other agreements relating to the Property. Duplicate
originals of all such documents shall be forwarded to Manager by Property
Manager immediately upon execution. If there is only one original of any such
document, it shall be delivered to and retained by Manager.
6.6 FINAL ACCOUNTING. Property Manager shall deliver a final accounting
for the Property to Manager within 30 days after the effective date of any
termination (whether or not for cause) of this Agreement. Such final accounting
shall set forth all current income, all current expenses and all other expenses
contracted for on Owner's behalf but not yet incurred in connection with the
Property, together with such other information as may be reasonably requested by
Owner or Manager.
6.7 TAX RETURNS. Property Manager shall file all tax returns for all sales
taxes, payroll taxes
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and other taxes directly related to the Property; excluding, however, all
federal, state and local income taxes of Owner.
6.8 CERTIFICATION. Property Manager shall certify that each financial
statement is true, correct and complete in all respects.
6.9 INSPECTIONS. Owner, Manager and their representatives reserve the
right to visit the Property at any time and to inspect and copy Property
Manager's records from time to time. Property Manager shall cooperate with
Owner, Manager and their representatives in exercising such rights.
ARTICLE 7 BANK ACCOUNTS.
7.1 PROPERTY LOCKBOX ACCOUNT. Subject to lender lockbox requirements, all
funds received by Property Manager derived from the operation of the Property
shall be immediately deposited in the following lockbox account (the "Property
Lockbox Account"):
[Name of Owner/Name of Project]
P. O. Box
[City]
[State]
Account Name: [Name of Owner] as
agent for [Name of Project]
Account No.: __________________
Owner may designate a different account in any bank or financial
institution as the Property Lockbox Account at any time and from time to time by
written notice to Property Manager. No other funds of Property Manager shall be
deposited or commingled with funds in the Property Lockbox Account.
7.2 PROPERTY DISBURSEMENT ACCOUNT.
7.2.1 Property Manager shall pay Property-related costs and
expenses in accordance with Section 7.2.2 by check from the following
disbursement checking account (the "Property Disbursement Account"):
First National Bank of Chicago
Account Name: [NAME OF MANAGER] as
agent for [NAME OF PROJECT]
Account No: _________________
Owner may designate a different account in any bank or financial institution as
the Property Disbursement Account at any time and from time to time by written
notice to Property Manager. Property Manager shall not under any circumstances
write a check payable to or in favor of Property Manager or any Affiliate of
Property Manager other than (a) to reimburse itself or an Affiliate for
expenditures made on behalf of Owner and approved in advance in writing by
Manager, or (b) to pay itself the Management Fee payable under Section 3.1;
provided, however, that within 15 days after paying itself any Management Fee,
Property Manager shall provide Manager with a statement setting forth the
calculations made in computing the Management Fee in detail reasonably
satisfactory to Manager. Only those personnel specifically authorized by
Property Manager and approved by Manager shall have authority to write checks
from the Property Disbursement Account. Property Manager shall not issue a check
for more than
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[______________ Dollars ($_________)] without the prior written authorization of
Manager. Property Manager shall not under any circumstances issue a check from
the Property Disbursement Account for more than [_____________ Dollars
($__________)].
7.2.2 EXPENSES PAID FROM PROPERTY DISBURSEMENT ACCOUNT. The
following costs shall be paid directly from the Property Disbursement Account:
(a) Any and all costs necessary for the management, operation and
maintenance of the Property, so long as such costs are provided for and are
within the limits of the Approved Operating Budget or are specifically
authorized in writing by Manager;
(b) Any and all capital expenditures, so long as such costs are
provided for and are within the limits of the Approved Capital Budget or are
specifically authorized in writing by Manager; and
(c) Any and all costs necessary to handle emergencies as described in
Section 2.2.6.
Except as may be necessary to handle an emergency as described in Section 2.2.6,
Property Manager shall not be obligated to make any advance to or for the
account of Owner or to pay any sums except out of funds in the Property
Disbursement Account.
ARTICLE 8 INSURANCE AND INDEMNITY.
8.1 INDEMNIFICATION.
8.1.1 To the maximum extent permitted by law, Property Manager
shall indemnify, hold harmless, protect and defend (with counsel acceptable to
Owner) Owner, Manager, the officers, directors, employees, agents, contractors
of each of them, and all others who could be liable for the obligations of any
of them, from and against any and all claims, demands, actions, fines,
penalties, liabilities, losses, taxes, damages (with such damages being limited
to actual damages and not consequential damages), injuries and expenses
(including, without limitation, actual attorneys', consultants' and expert
witness' fees and costs at the pre-trial, trial, and appellate levels)
(collectively, "Damages") in any manner related to, arising out of or resulting
from:
(a) any continuing default of Property Manager to perform its
obligations under this Agreement after notice and the expiration of any
applicable cure period;
(b) any acts of Property Manager beyond the scope of its authority
under this Agreement; or
(c) any gross negligence, willful misconduct or fraud of Property
Manager.
If the circumstances or events described in clauses (a) through (e) are covered
by Owner's commercial general liability insurance described in subsection
8.5.1(b), then Property Manager's obligations under this Section 8.1.1 shall
apply only to the extent Owner's Damages are not fully paid by Owner's
commercial general liability insurance. Notwithstanding any other provisions of
this Agreement to the contrary, Property Manager's obligations under this
Section 8.1 shall survive the expiration, termination or cancellation of this
Agreement.
8.1.2 To the maximum extent permitted by law, Owner shall
indemnify, hold harmless, protect and defend Property Manager and its officers,
directors, employees, agents, contractors and all others who could be liable for
the obligations of Property Manager from and
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against any and all Damages in any manner related to, arising out of or
resulting from Property Manager's performance of services which are (a) within
the scope of Property Manager's authority under this Agreement, and (b) not
within the scope of Property Manager's indemnity set forth in Section 8.1.1.
8.1.3 The rights and obligations of indemnity described in
this Section 8.1 shall not be exclusive and shall be in addition to such other
rights and obligations as may be otherwise available to either party at law or
in equity.
8.2 PROPERTY MANAGER'S INSURANCE RESPONSIBILITY.
8.2.1 Property Manager shall maintain the following insurance
coverages (with deductibles, if applicable, in amounts reasonably acceptable to
Owner) at all times during the Term:
(a) Worker's compensation insurance at no less than statutory
requirements, and employer's liability insurance with a limit of not less than
One Million Dollars ($1,000,000) per occurrence;
(b) Non-occupational disability insurance when required by law;
(c) Commercial general liability insurance with a minimum combined
bodily injury and property damage limit of Five Million Dollars ($5,000,000) per
occurrence, a products-completed operations aggregate limit of Five Million
Dollars ($5,000,000) and a general aggregate limit of Ten Million Dollars
($10,000,000) per location;
(d) Automobile liability insurance covering owned, hired and non-owned
vehicles, with separate coverage in an amount not less than One Million Dollars
($1,000,000) combined single limit for bodily injury and property damage; and
(e) Errors and omissions insurance coverage in an amount not less than
One Million Dollars ($1,000,000).
8.2.2 Property Manager shall deliver to Manager, within three
days after the Effective Date, certificates of insurance or other satisfactory
evidence (which shall include copies of the policies if Manager so requests)
that all required insurance is in full force and effect at all times. All
policies required under Section 8.2.1 shall provide that Manager be given not
less than 30 days' advance notice of any proposed cancellation or material
change. The liability policies required under subsections 8.2.1(c) and 8.2.1(d)
shall name Owner and Manager as additional insureds. All liability insurance
required under Section 8.2.1 shall be written to apply to all bodily injury,
property damage, personal injury and other covered loss, however occasioned,
which occurred or arose (or the onset of which occurred or arose) in whole or in
part during the policy period. Such liability policies also shall contain
endorsements which (a) delete any employee exclusion on personal injury
coverage, (b) include employees as additional insureds, and (c) contain
cross-liability, waiver of subrogation and such other provisions as Owner may
reasonably require. Such insurance also shall include broad form contractual
liability insurance coverage insuring all of Property Manager's indemnity
obligations to Owner pursuant to this Agreement. Property Manager shall be
permitted to maintain all insurance
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required herein under Property Manager's blanket insurance policy.
8.3 CONTRACT DOCUMENTS; INDEMNITY PROVISIONS. Property Manager shall use
all reasonable efforts to include provisions in all Property-related service and
supply contracts prepared or executed by Property Manager requiring the
third-party contractor, to the maximum extent permitted by law, to indemnify,
defend (with counsel reasonably acceptable to the respective indemnitees),
protect and hold Property Manager, Manager and Owner harmless from and against
any and all Damages in any manner related to, arising out of and/or resulting
from any damage to or injury to, or death of, persons or property caused or
occasioned by or in connection with or arising out of any acts or omissions of
the third-party contractor or its employees, agents or contractors.
8.4 APPROVAL OF INSURANCE COMPANIES. All insurance required to be carried
by Property Manager shall be written with companies having a policy holder and
asset rate, as circulated by Best's Insurance Reports, of A-:VIII or better.
8.5 OWNER'S INSURANCE RESPONSIBILITY.
8.5.1 Owner shall maintain during the Term all of the
following insurance coverages, each of which shall be primary and
non-contributory with any insurance carried by Property Manager:
(a) All-risk property damage insurance and loss of rents insurance
coverage on the Property; and
(b) Commercial general liability insurance coverage with a general
aggregate limit of not less than Fifty Million Dollars ($50,000,000). Property
Manager shall be insured under Owner's commercial general liability insurance
policy for actions within the scope of Property Manager's authority as set forth
in this Agreement. No other terms and conditions of this Agreement (including,
without limitation, the indemnification provisions of Section 8.1 and Property
Manager's obligation to maintain insurance described in Section 8.2) shall be
affected by this subsection 8.5.1(b).
8.5.2 Owner shall have the right, in its sole and absolute
discretion, to self-insure all or any part of the coverages required to be
carried by Owner. If Owner elects to self-insure, Property Manager shall be
insured under Owner's plan of self-insurance to the same extent Property Manager
would have been insured if Owner purchased the insurance policies described in
Section 8.5.1.
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8.6 PROPERTY MANAGER'S DUTIES IN CASE OF LOSS.
8.6.1 Property Manager shall notify Manager immediately of any
fire or other damage to any part of the Property. In the event of any serious
damage to any part of the Property, Property Manager shall telephone Manager so
that an insurance adjustor may view the damage before repairs are started.
Property Manager shall telephone Manager immediately if any hazardous substances
or other contaminants are released on, about, under or in the vicinity of the
Property. Property Manager shall not settle any losses, complete loss reports or
adjust losses on behalf of Owner or meet with any federal, state or local
regulatory agency without the prior consent of Owner.
8.6.2 Property Manager shall notify Manager promptly of any
personal injury or property damage occurring to or claimed by any tenant or
third party on or with respect to any part of the Property. Property Manager
shall forward to Manager immediately upon receipt copies of any summons,
subpoena or other like legal document served upon Property Manager relating to
actual or alleged potential liability of Owner, Property Manager or the
Property.
8.6.3 Property Manager acknowledges receipt of a copy of
Owner's Insurance Manual for Real Estate Managers and Property Managers
(effective _______________), and agrees to comply with the policies and
procedures set forth therein, as amended from time to time (so long as Property
Manager receives notice of such amendments), including, without limitation, that
Property Manager obtain current certificates of insurance from third-party
vendors of the Property.
ARTICLE 9 RELATIONSHIP OF PARTIES.
9.1 REPRESENTATIONS AND WARRANTIES.
9.1.1 PROPERTY MANAGER'S EXPERTISE. Property Manager
represents and warrants that it is a skilled, experienced and sophisticated
professional in the field of shopping center property management and leasing,
and that it has all the expertise necessary to perform its obligations under
this Agreement.
9.1.2 PROPERTY MANAGER'S AUTHORITY. Property Manager
represents and warrants that (a) Property Manager has full power, authority and
legal right to execute, deliver and perform this Agreement and to perform all of
its obligations hereunder, and (b) the execution, delivery and performance of
all or any portion of this Agreement do not and will not (i) require any consent
or approval from any governmental authority, (ii) violate any provisions of law
or any governmental order, or (iii) conflict with, result in a breach of, or
constitute a default under, the charter or bylaws of Property Manager or any
instrument to which Property Manager is a party or by which it or any of its
property is bound.
9.1.3 OWNER'S AUTHORITY. Owner represents and warrants that it
has full power, authority and legal right to execute, deliver and perform this
Agreement.
9.1.4 RELIANCE. Property Manager acknowledges and agrees that
Owner is relying upon the representations and warranties set forth in Sections
9.1.1 and 9.1.2 in entering into this Agreement, and Owner acknowledges and
agrees that Property Manager is relying upon
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the representations and warranties set forth in Section 9.1.3 in entering into
this Agreement.
9.2 NATURE OF RELATIONSHIP. In taking any action pursuant to this
Agreement, Property Manager shall be acting solely as an independent contractor
and nothing in this Agreement, express or implied, shall be construed as
creating a partnership, joint venture, employer-employee or principal-agent
relationship between Property Manager (or any person employed by Property
Manager) and Owner, or any other relationship between the parties hereto except
that of property owner and independent contractor.
9.3 COMMUNICATIONS BETWEEN PARTIES. Owner relies on Property Manager to
direct and control all operations at the Property; provided, however, that Owner
and Manager reserve the right to communicate directly with the Manager specified
in subsection 4.1.2(a), Property Manager's accountant(s) working on Property
matters, all tenants, tenants' representatives and prospective tenants, all
advertising, management, cleaning and servicing firms doing Property-related
work and all parties contracting with Owner or Property Manager with respect to
the Property.
9.4 RELATIONSHIP OF OWNER AND PROPERTY MANAGER WITH RESPECT TO LEASING.
9.4.1 Property Manager shall be entitled to a leasing fee
("Leasing Fee") in an amount equal to 75% of the then-current market commission
in the area in which the Property is located in connection with those leases
arranged by the Property Manager (or an Affiliate thereof) on behalf of Owner.
The market rate leasing commission for the Property will be determined in
accordance with the following procedure. Owner will retain three nationally
recognized brokerage firms mutually acceptable to both parties (two of which are
initially agreed to be CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇) to separately survey
the market in which the Property is located and to independently determine the
market rate leasing commission in such market. For purposes of this Agreement,
the "then-current market commission" in the Property's market area shall be the
average market rate as determined by the brokers' surveys. At any time after
December 31, 1999, either the Manager or CalPERS may request (no more often than
every 12 months) that the surveys be conducted again to redetermine the
"then-current market commission" for each Property market area. If Owner
utilizes a third-party broker to represent its interests in connection with such
a lease or if the tenant is represented by a broker, those third-party brokers
shall each be entitled to receive from Owner a leasing commission of up to 100%
of the then-current market rate commissions for such lease. If Property Manager
(or an Affiliate thereof) is acting as the broker on behalf of Owner, all
marketing costs incurred in connection with the promotion of the lease shall
either be paid by the Property Manager (or an Affiliate) directly or offset
against the Leasing Fee payable hereunder. The Property Manager (or an Affiliate
thereof) shall comply with all licensing requirements that may apply under local
law in order to earn the Leasing Fee.
9.4.2 The parties intend that Property Manager shall be
obligated to give available space in the Property exposure at least equal to the
exposure Property Manager gives other available space in similar projects owned,
leased, managed or operated by Property Manager or an Affiliate. The parties
also intend that Property Manager shall be obligated to use reasonable efforts
to retain existing tenants in the Property.
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9.5 INTENTIONALLY OMITTED.
9.6 CONFIDENTIALITY. Except as may be otherwise provided in the Operating
Agreement, Property Manager, Owner and Manager shall maintain the
confidentiality of all matters pertaining to this Agreement and all operations
and transactions relating to the Property.
9.7 PROPERTY MANAGER NOT TO PLEDGE OWNER'S CREDIT. Property Manager shall
not pledge the credit of Owner without Owner's prior written consent. Property
Manager shall not, in the name or on behalf of Owner, borrow any money or
execute any promissory note, installment purchase agreement, ▇▇▇▇ of exchange or
other obligation.
ARTICLE 10 TERMINATION.
10.1 TERMINATION BY OWNER WITHOUT CAUSE. This Agreement may be terminated
by Owner (through CalPERS) without cause at any time upon 180 days' prior
written notice to Property Manager. In the event Owner so terminates this
Agreement, Property Manager shall be entitled, as its sole and exclusive remedy,
to receive all Management Fees earned and unpaid as of the date of termination
plus reimbursement for all expenses as permitted hereunder.
10.2 TERMINATION BY OWNER FOR CAUSE. This Agreement may be terminated by
CalPERS at any time during the Term upon written notice to Property Manager
effective immediately, or on such later date of termination as may be stated in
Owner's notice, for any of the causes set forth in this Section 10.2, or if
Manager is removed as the manager of Owner or otherwise withdraws as manager of
Owner under the Operating Agreement. In the event of such a termination,
Property Manager shall be entitled, as its sole and exclusive remedy, to receive
such earned and unpaid Management Fees as may remain, if any, plus reimbursement
for all expenses as permitted hereunder, after Owner has offset any damages or
other amounts owed to Owner by Property Manager. The following shall constitute
grounds for termination by Owner for cause:
10.2.1 If Property Manager, without the prior written consent
of Owner, directs a prospective tenant for the Property to another building
owned, managed or operated by Property Manager or an Affiliate of Property
Manager within a three-mile radius of the Property without also showing the
prospect the Property and, if requested by the prospect, making a specific lease
proposal to the prospect with respect to leasing space in the Property, whether
or not the tenant becomes a tenant of such other building;
10.2.2 If Property Manager, without the prior written consent
of Owner, (a) discusses with an existing tenant of the Property the possibility
of the tenant leasing space in another building owned, managed or operated by
Property Manager or an Affiliate of Property Manager within a three-mile radius
of the Property without giving Owner 10 days' prior notice of Property Manager's
intention to hold such discussions, or (b) makes a specific lease proposal to
the tenant with respect to leasing space in any such other building without
providing Owner with a reasonable prior opportunity to make a competing proposal
to the tenant with respect to keeping the tenant in the Property, whether or not
the tenant becomes a tenant of such other building;
10.2.3 If Property Manager commingles any Property-related
funds with any
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other funds of Property Manager, or uses any Property assets for purposes
unrelated to Property operations;
10.2.4 If Property Manager breaches its duty to Owner to
operate and manage the Property in Owner's best interest;
10.2.5 If Property Manager, subject to fire, earthquake, acts
of God and other events beyond the control of Property Manager (which shall not
include financial inability), and subject to the performance by tenants of their
obligations under their leases, fails to maintain the operating assets of the
Property in good working order or repair and to keep the Property properly clean
and free of debris, snow and ice;
10.2.6 If Property Manager suspends or discontinues business;
10.2.7 If a court enters a decree or order for relief in
respect of Property Manager in an involuntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appoints a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official of Property
Manager or for any substantial part of Property Manager's property, or for the
winding-up or liquidation of Property Manager's affairs, and such decree or
order continues unstayed and in effect for a period of 60 consecutive days;
10.2.8 If Property Manager commences a voluntary case or
action under the federal bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or other similar official
of Property Manager or for any substantial part of Property Manager's property,
or makes any assignment for the benefit of creditors, or fails generally to pay
its debts as such debts become due, or takes any action in furtherance of any of
the foregoing;
10.2.9 If Property Manager fails to observe or perform any of
its material obligations under this Agreement, and such failure continues for 20
days after written notice thereof has been given by Owner to Property Manager;
or
10.2.10 If any fraud is perpetrated by Property Manager, or if
any representation or warranty of Property Manager made in this Agreement or in
any proposal, application, financial statement or other writing delivered by
Property Manager at any time pursuant to this Agreement proves to have been
incorrect, incomplete or misleading in any material respect when made
10.3 TERMINATION BY PROPERTY MANAGER.
10.3.1 This Agreement may be terminated by Property Manager
without cause at any time on 180 days' prior written notice to Owner and
CalPERS; subject to CalPERS' right, in its sole and absolute discretion, to
unilaterally modify the termination date set forth in Property Manager's notice
if CalPERS locates a replacement property manager for the Property prior to the
end of such 180-day period.
10.3.2 Property Manager may terminate this Agreement upon the
occurrence of
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a default by Owner hereunder; provided, however, in the event of such default,
Property Manager first shall notify Owner in writing of the exact nature of the
default and Property Manager's intention to terminate this Agreement as a result
of the default. Owner shall have 20 days from receipt of such notice to cure the
default, provided Owner commences to cure such default within 20 days and
thereafter diligently prosecutes the cure to completion.
10.4 TERMINATION ON SALE. If the Property is sold, exchanged or otherwise
transferred by Owner at any time during the Term, (a) Owner shall provide
Property Manager with reasonable advance notice of the proposed transfer, (b)
this Agreement shall terminate as of the effective date of the transfer, and (c)
neither Owner nor Owner's successor shall have any further liability to Property
Manager under this Agreement except with respect to Management Fees earned and
unpaid as of the date of termination.
10.5 ORDERLY TRANSITION. In the event of any termination of this
Agreement, Property Manager shall (a) immediately (or at such later date as
Manager may designate in its sole discretion) deliver to Manager all files and
documents in Property Manager's possession relating to the Property and all
existing and prospective tenants of the Property, and (b) cooperate with Owner,
Manager and any replacement property manager designated by Owner to effect an
orderly transition of the management and operation of the Property to Property
Manager's replacement. The obligations set forth in this Section 10.5 shall
survive termination of this Agreement.
10.6 RIGHTS WHICH SURVIVE TERMINATION OR EXPIRATION. The termination of
this Agreement shall in no event terminate or prejudice (a) any right arising
out of or accruing in connection with the terms of this Agreement attributable
to events and circumstances occurring prior to termination, or (b) any rights or
obligations specified in this Agreement to survive termination.
10.7 DAMAGES. In the event it is determined by an arbitrator or court of
competent jurisdiction that Owner has terminated this Agreement in violation of
this Agreement or any Applicable Law, Property Manager shall be entitled, as its
sole and exclusive remedy for such termination, to recover only the amount of
its Direct Damages. For purposes of this Section 10.7, "Direct Damages" shall
mean all net profits Property Manager would have earned under this Agreement
from the date of such termination until the date Owner could have validly
terminated this Agreement. Owner and Property Manager expressly agree that
Direct Damages shall not include any punitive or consequential damages,
including, for example and not by way of limitation, any damages or losses
arising from or related to the effect of such termination on Property Manager's
overall operations.
ARTICLE 11 GENERAL.
11.1 NOTICES. Any notices relating to this Agreement shall be given in
writing and shall be deemed sufficiently given and served for all purposes (a)
when delivered, if (i) by receipt-confirmed facsimile transmission with the
original subsequently delivered by first-class United States mail or other means
described herein, (ii) in person, or (iii) by generally recognized overnight
courier service, or (b) five days after deposit in the United States mail,
certified or registered mail, return receipt requested, postage prepaid, to the
respective addresses set forth below, or to such other addresses as the parties
may designate from time to time.
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PROPERTY ▇▇▇▇▇▇▇ Pacific Operating Partnership
MANAGER:
Attn:
--------------------------------
Fax No.:
-----------------------------
OWNER: BPP Retail, LLC
-------------------------------------
-------------------------------------
Attn:
--------------------------------
Fax No.:
-----------------------------
MANAGER:
-------------------------------------
-------------------------------------
-------------------------------------
Attn:
--------------------------------
Fax No.:
-----------------------------
CalPERS: California Public Employees
Retirement System
-------------------------------------
-------------------------------------
Attn:
--------------------------------
Fax No.:
-----------------------------
11.2 ENTIRE AGREEMENT. The Operating Agreement and this Agreement,
together with all exhibits attached, is intended by the parties as the complete
and final expression of their agreement with respect to the subject matter
hereof and may not be contradicted by evidence of any prior or contemporaneous
agreement. Except to the extent modified by the Operating Agreement, this
Agreement specifically supersedes any prior written or oral agreements between
the parties with respect to the subject matter hereof. The language in all parts
of this Agreement shall be construed as a whole in accordance with its fair
meaning, and shall not be construed against any party solely by virtue of the
fact that such party or its counsel was primarily responsible for its
preparation.
11.3 AMENDMENTS AND WAIVERS. No modification of this Agreement shall be
effective unless set forth in a writing signed by the party against whom the
modification is sought to be enforced. The party benefited by any condition or
obligation may waive it, but any such waiver shall not be enforceable by the
other party unless made in writing and signed by the waiving party.
11.4 INVALIDITY OF PROVISION. If any provision of this Agreement as
applied to either party or to any circumstance shall be adjudged by an
arbitrator or court of competent jurisdiction to be void or unenforceable for
any reason, the same shall in no way affect (to the maximum extent permissible
by law) any other provision of this Agreement, the application of any such
provision under circumstances different from those adjudicated by the arbitrator
or court, or the validity or enforceability of this Agreement as a whole.
11.5 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California without giving effect to the conflict of laws principles of
such State.
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11.6 TIME. Time is of the essence in the performance of the parties'
respective obligations under this Agreement.
11.7 ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, Property Manager shall not assign all or any
portion of its interest in this Agreement without Owner's prior written consent,
which consent may be granted or withheld in Owner's sole and absolute
discretion. In the event Owner consents to an assignment of this Agreement, no
further assignment shall be made without Owner's prior written consent, which
consent may be granted or withheld in Owner's sole and absolute discretion.
11.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.9 EXCULPATION. No trustee, officer, director, employee or agent of
Owner shall be personally liable for any of the obligations of Owner hereunder,
and Property Manager shall look solely to the Property for the enforcement of
any claims against Owner arising hereunder.
11.10 ATTORNEYS' FEES. In the event of any arbitration or other legal or
equitable proceeding for enforcement of any of the terms or conditions of this
Agreement, or any alleged disputes, breaches, defaults or misrepresentations in
connection with any provision of this Agreement, the prevailing party in such
proceeding, or the nondismissing party where the dismissal occurs other than by
reason of a settlement, shall be entitled to recover its reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and costs
paid or incurred in good faith at the arbitration, pre-trial, trial and
appellate levels, and in enforcing any award or judgment granted pursuant
thereto. Any award, judgment or order entered in any such proceeding shall
contain a specific provision providing for the recovery of attorneys' fees and
costs incurred in enforcing such award or judgment, including, without
limitation, (a) post-award or post-judgment motions, (b) contempt proceedings,
(c) garnishment, levy, and debtor and third party examinations, (d) discovery,
and (e) bankruptcy litigation. The "prevailing party," for purposes of this
Agreement, shall be deemed to be that party which obtains substantially the
result sought, whether by dismissal, award or judgment.
11.11 FURTHER ASSURANCES. Owner and Property Manager shall execute such
other documents and perform such other acts as may be reasonably necessary or
desirable to carry out the purposes of this Agreement.
11.12 NO WAIVER. The failure of either party to insist upon strict
performance of any of the terms and provisions of this Agreement or to exercise
any option, right or remedy herein contained shall not be construed as a waiver
or as a relinquishment for the future of such terms, provisions, options, rights
or remedies and the same shall continue and remain in full force and effect.
11.13 NO ADVERTISING. Except as may be required by Applicable Law, no
publication, announcement or other public advertisement of CalPERS' name in
connection with the Property shall be made by Property Manager without CalPERS'
prior consent, which consent may be granted or withheld in CalPERS' sole and
absolute discretion. Property Manager shall be
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permitted to publish, announce or make any other public advertisement in its own
name or in the name of Owner.
11.14 SIGNS. Owner hereby approves all signs and building directories
existing as of the Effective Date. Property Manager may place reasonable leasing
signs as required. Any signs must meet all requirements of local sign codes and
ordinances.
11.15 CONFLICTS WITH OPERATING AGREEMENT. In the event of any conflict
between the provisions of this Agreement and the Operating Agreement, the
Operating Agreement shall control.
11.16 REFERENCES. The headings used in this Agreement are provided for
convenience only and this Agreement shall be interpreted without reference to
any headings. The date of this Agreement is for reference purposes only and is
not necessarily the date on which it was entered into.
11.17 CONSENT. Unless otherwise expressly provided in this Agreement, when
a provision of this Agreement requires the consent of any party, such consent
shall not be unreasonably withheld, delayed or conditioned. If a party is
determined to have unreasonably withheld, delayed or conditioned its consent in
violation of this Agreement or any Applicable Law, the other party shall be
entitled, as its sole and exclusive remedy, to recover only the amount of its
actual direct damages, including reasonable attorneys' fees and costs, and shall
not be entitled to recover any punitive or consequential damages, including, for
example and not by way of limitation, any damages or losses arising from or
related to the effect of such unreasonably withheld, delayed or conditioned
consent on the overall operations of Owner or Property Manager.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
OWNER: BPP RETAIL, LLC, a Delaware limited liability company
By: ▇▇▇▇▇▇▇ PACIFIC OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership, Managing Member
By: ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC.,
a Maryland corporation, General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
PROPERTY MANAGER:
▇▇▇▇▇▇▇ PACIFIC OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership
By: ▇▇▇▇▇▇▇ PACIFIC PROPERTIES, INC.,
a Maryland corporation, General Partner
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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EXHIBIT A
DESCRIPTION OF PROPERTY
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EXHIBIT B
NONDISCRIMINATION CLAUSE
(OCP - 2)
[For California Properties]
1. During the performance of this Agreement, Property Manager and its
contractors and subcontractors shall not deny the benefits of this Agreement to
any person on the basis of religion, color, ethnic group identification, sex,
age, or physical or mental disability, nor shall they discriminate unlawfully
against any employee or applicant for employment because of race, religion,
color, national origin, ancestry, physical handicap, mental disability, medical
condition, marital status, age or sex. Property Manager shall ensure that the
evaluation and treatment of employees and applicants for employment are free of
such discrimination.
2. Property Manager shall comply with the provisions of the Fair
Employment and Housing Act (California Government Code Section 12900 ET SEQ.)
and the regulations promulgated thereunder (California Administrative Code,
Title 2, Section 7285.0 ET SEQ.), the provisions of Article 9.5, Chapter 1, Part
1, Division 3, Title 2 of the Government Code (Government Code Sections
11135-11139.5) and the regulations or standards adopted by Owner, if any, to
implement such article.
3. Property Manager and its contractors and subcontractors shall give
written notice of their obligations under this clause to labor organizations
with which they have a collective bargaining or other agreement.
▇.▇▇▇▇▇▇▇▇ Manager shall include the nondiscrimination and compliance
provisions of this clause in all subcontracts to perform work under this
Agreement.
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EXHIBIT B
NONDISCRIMINATION CLAUSE
[For Non-California Properties]
1. During the performance of this Agreement, Property Manager, its
contractors and subcontractors shall not deny the benefits of this Agreement to
any person on the basis of religion, color, ethnic group identification, sex,
age, or physical or mental disability, nor shall they discriminate unlawfully
against any employee or applicant for employment because of race, religion,
color, national origin, ancestry, physical handicap, mental disability, medical
condition, marital status, age or sex. Property Manager shall ensure that the
evaluation and treatment of employees and applicants for employment are free of
such discrimination.
2. Property Manager shall not discriminate in any manner against any
tenant, prospective tenant or entity making inquiry as to the availability of
space in the Property on the basis of race, religion, color, national origin,
ancestry, physical handicap, mental disability, medical condition, marital
status, age or sex.
3. Property Manager, its contractors and subcontractors shall give written
notice of their obligations under this clause to labor organizations with which
they have a collective bargaining or other agreement.
4. Property Manager shall include the nondiscrimination and compliance
provisions of this clause in all subcontracts to perform work under this
Agreement.
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