Exhibit 10.107
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT
by and between
TransCanal Properties, Inc.
"Owner"
and
Xxxxxx & Associates, Inc.
"Property Manager"
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT
Premises: 00 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx
THIS AGREEMENT ("Agreement") is made as of the 1st day of January,
1996 by and between TransCanal Properties, Inc. ("Owner"), and Xxxxxx &
Associates, Inc. ("Property Manager"):
WITNESSETH:
WHEREAS, Owner is the owner of the above described premises, and
Owner wishes to avail itself of the ability and experience of Property Manager
in the on-site management of said premises; and
WHEREAS, Property Manager is willing to provide such management
services to said premises on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants herein contained
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
ENGAGEMENT AND AUTHORITY OF PROPERTY MANAGER
1.1 Owner hereby engages Property Manager as an independent contractor in the
management, leasing and operation of the above property (the "Premises"), and,
subject to the limitations set forth herein, hereby authorizes and directs
Property Manager to exercise such powers with respect to the Premises as may be
necessary for the performance of Property Manager's obligations under Article II
hereof, and Property Manager accepts such engagement on the terms and conditions
hereinafter set forth. Property Manager shall have no right or authority,
express or implied, to commit or otherwise obligate Owner in any manner
whatsoever except to the extent specifically provided herein.
ARTICLE II
PROPERTY MANAGER'S AGREEMENTS
2.1 Property Manager shall conduct the ordinary and usual business affairs of
Owner relating to the management, leasing and operation of the Premises in an
efficient and satisfactory manner in accordance with first class buildings in
the Old Town, Alexandria area, and shall implement,
or cause to be implemented, the policies of Owner for the conduct of such
business affairs in accordance with the guidelines provided in this Agreement.
The scope of Property Manager's authority shall be limited to said guidelines.
Property Manager agrees to use its best efforts in the management, leasing and
operation of the Premises in an efficient and satisfactory manner in accordance
with first class buildings in the Old Town, Alexandria area and said guidelines,
and agrees to comply with Owner's written and oral instructions, and in
connection therewith:
(a) To contract, for periods limited to Owner's possession of the Premises, but
not in excess of one year without prior written approval of Owner, in the name
and at the expense of Owner, for gas, electricity, water, and such other
services at commercially reasonable rates as are necessary or convenient for the
proper operation of the Premises. Service contracts shall be written to include
a right of the Owner to terminate the agreement upon thirty (30) days' written
notice, unless otherwise agreed to by Owner in writing.
(b) To select, employ, pay, supervise, direct and discharge all employees
necessary for the efficient, effective, safe, and proper operation and
maintenance of the Premises, in number and at wages not in excess of those
provided for in the Approved Budget (as defined below) or as approved by the
Owner in writing, and to use reasonable care in the selection and supervision of
such employees, as reviewed and approved by Owner. Property Manager shall be
responsible for complying with all laws and regulations and collective
bargaining agreements, if any, affecting such employment, including without
limitation laws and regulations governing worker's compensation insurance and
compulsory non-occupational disability insurance. Property Manager is and will
continue throughout the term of this Agreement to be an Equal Opportunity
Employer. All persons employed or utilized in connection with the operation and
maintenance of the Premises shall be employees of Property Manager, or of such
contractors as may be retained by Property Manager pursuant to this Agreement,
and not employees of Owner; but all costs associated with the operations of the
Premises that have been included in the Approved Budget, or that have otherwise
been approved by Owner, shall be reimbursed to Property Manager by Owner. Unless
included in the Approved Budget or allowed elsewhere in this Agreement, all
leasing and marketing expenses will be at Property Manager's cost.
(c) To keep the Premises in a safe, clean, and sightly condition and to make (or
cause to be made by contractors retained by Property Manager pursuant to
contracts in the name of Owner) all repairs, alterations, replacements, and
installations, do all decorating and landscaping, and purchase all supplies
necessary for the proper operation of the Premises in a first class condition,
the fulfillment of Owner's obligations under any lease or other agreement of
which Property Manager has notice, and the compliance with all known
governmental and insurance requirements, provided that Property Manager shall
not make any non-budgeted purchase or do any non-budgeted work, the cost of
which shall exceed the amount set forth in Exhibit A, paragraph 3, without
obtaining in each instance, the prior approval of Owner, except in circumstances
which Property Manager shall reasonably deem to constitute an emergency
requiring immediate action for the protection of the Premises or of tenants or
other persons or to avoid the suspension of necessary services. Property Manager
shall notify Owner immediately of the necessity for, the
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nature of, and the cost of, any such emergency repairs or compliance. If Owner
shall require, Property Manager shall submit a list of contractors and
subcontractors performing tenant work, repairs, alterations or services at the
Premises under Property Manager's direction to Owner for Owner's approval. Owner
may from time to time require that any or all construction or other contracts
have Owner's prior written approval or otherwise comply with criteria set forth
on Exhibit B or otherwise established by Owner and delivered to Property
Manager.
Property Manager shall supervise all tenant improvements within the
Premises as a part of its duties. Owner shall not pay Property Manager any fees
for any such construction services.
It is understood that Property Manager shall not be required to undertake
the making or supervision of any reconstruction of the Premises or major capital
improvements except in the case of an emergency. If Property Manager supervises
the reconstruction of the Premises or major capital improvement for the Owner,
Owner may agree to pay Property Manager a fee for such services upon the mutual
agreement of Owner and Property Manager. Notwithstanding the foregoing, Property
Manager acknowledges that Owner may, from time to time, enter into separate
agreements with third party consultants (including affiliates and/or
subsidiaries of Property Manager) to manage and supervise construction work at
the Premises. Upon Owner's request, Property Manager shall assist Owner in
facilitating the efforts of such third party consultants and, if substantial
time or resources of Property Manager shall be required in connection therewith,
Property Manager may receive an additional reasonable fee for such services,
based on prior written approval from Owner. The determination as to whether
substantial time or resources of Property Manager are required shall be made by
Owner.
Owner shall receive the benefit of all discounts and rebates obtainable by
Property Manager in its operation of the Premises. Property Manager agrees to
take advantage of such discounts and rebates wherever available and reasonable.
If Property Manager desires to contract for repair, construction, or any
other service described in this section 2.1 (c) with a party with respect to
which any partner, employee, or shareholder of Property Manager holds a
beneficial interest, such interest shall be disclosed to, and approved in
writing by Owner before such services are procured. The cost of any such
services shall likewise be at competitive rates, notwithstanding that tenants of
the Premises may be required to pay such costs.
Property Manager, or a general contractor working under the supervision of
Property Manager, is authorized to make and perform work at a tenant's request
and at such tenant's sole expense ("Tenant Work") to the extent such Tenant Work
is permitted by the tenant's lease, and Property Manager may collect from
tenants requesting such work or from general contractors performing Tenant Work,
for Property Manager's sole account, a reasonable charge for supervisory
overhead on all such Tenant Work, other than with respect to initial build-out;
provided, however, that Owner shall have no liability or obligation for any such
Tenant Work. If Property Manager performs the Tenant Work at tenant's request
for a supervisory overhead fee
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at tenant's expense, Owner shall not also be responsible to pay a supervisory
overhead fee to Property Manager. Property Manager, however, shall not require
any tenant to use Property Manager, its subsidiary, affiliate or related
corporation to perform any Tenant Work.
(d) To handle promptly complaints and requests from tenants in a first class
manner and notify Owner immediately in writing of any major complaint made by a
tenant or any alleged default on the part of Owner.
(e) To notify Owner immediately in writing (together with copies of supporting
documentation) of any notice of violation of any governments requirements; any
known defect in the Premises; any fire or other damage to the Premises; and, in
the case of any serious fire or other serious damage to the Premises, to also
immediately provide telephone notice thereof to the insurance carrier, so that
an insurance adjuster can view the damage before repairs are started, and
complete customary loss reports in connection with fire or other damage to the
Premises. The Property Manager shall use its best efforts to comply with all
laws regarding the leasing, use, operation, and maintenance of the Premises.
(f) To notify the general liability insurance carrier for the Premises and Owner
immediately in writing of any personal injury or property damage occurring to or
claimed by any tenant or third party on or with respect to the Premises and to
promptly forward to the carrier, with copies to Owner, 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 Premises.
(g) To advise Owner of pertinent covenants in leases in which the tenants agree
to hold Owner harmless with respect to liability from any accidents and/or to
replace broken glass, and to secure from such tenants and forward to Owner any
certificates of insurance, and renewals thereof, required to be furnished by the
terms of such leases.
(h) At the option of Owner, expressed to Property Manager in writing, to receive
and collect rent and all other monies payable to Owner by all tenants and
licensees in the Premises and to deposit the same within three (3) business days
in the bank named in Exhibit A, paragraph 4 (the "Bank"), in an account approved
by Owner and in the name of and for the benefit of Owner (the "Bank Account"),
which Bank Account shall be used exclusively for such funds which shall in no
event be commingled with funds of Property Manager and to disburse such funds
from said Bank Account solely in payment for, or to reimburse Property Manager
for payment of, authorized expenses incurred in connection with the operation of
the Premises in accordance with the then current budgets approved by Owner
pursuant to section 2.5 of this Agreement and otherwise in accordance with the
terms and provisions of this Agreement. Property Manager or any affiliate
thereof shall obtain Owner's written approval on all payments to Property
Manager and all payments in excess of $25,000 with the exception of utility
payments. In the event state law requires that tenant security deposits be held
in a separate account, such account shall be established by Property Manager in
the name of Owner as approved in writing by Owner. If requested in writing,
Owner's designated representative will be a signatory on all bank accounting
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maintained by Property Manager. Property Manager acknowledges and agrees that
Property Manager shall act in a fiduciary capacity for the benefit of Owner with
respect to the Bank Account.
(i) Upon the prior written approval of Owner, to institute all necessary legal
actions or proceedings for the collection of rent or other income from the
Premises, or the ousting or dispossessing of tenants or other persons therefrom,
and all other matters requiring legal attention. Property Manager agrees to use
its best efforts to collect rent and other charges from tenants in a timely
manner and to pursue Owner's legal remedies for non-payment of same. Owner
reserves the right to designate or approve counsel and to control litigation of
any character affecting or arising out of the operation of the Premises.
Property Manager agrees to fully cooperate with said counsel.
(j) To maintain fidelity bond/crime insurance naming Owner as loss payee as its
interest may appear with limits of not less than $1 million, commercial general
liability insurance with a combined single limit of not less than $5 million
each occurrence and general aggregate, errors and omissions coverage with limits
of not less than $1 million.
(k) To notify Owner immediately of any fire, accident or other condemnation
proceedings, rezoning or other governmental order, lawsuit or threat thereof
involving the Premises and any material violations relative to the leasing, use,
repair and maintenance of the Premises under governmental laws, rules,
regulations, ordinances, or like provisions. Property Manager will not bear
responsibility for noncompliance, unless such noncompliance is due to the gross
negligence or willful misconduct of Property Manager or its employees.
(l) To assist in Owner's ad valorem tax review program and to cooperate with
Owner, when so requested, in efforts to reduce such taxes. Property Manager
shall promptly furnish Owner with copies of all assessment notices and receipted
tax bills.
(m) To promptly comply with all laws, ordinances, orders, rules, regulations and
requirements of all Federal, State and Municipal or other governmental
authorities, courts, departments, commissions, boards and offices, any national
or local Board of Fire Underwriters or Insurance Services Office having
jurisdiction, or any other body exercising functions similar to those of any of
the foregoing which may be applicable to the Premises or any part thereof or to
the leasing, use, repair, operation and management thereof. In the event such
compliance is undertaken in the name and on behalf of Owner, such compliance
shall be at Owner's expense, unless such compliance is solely of an
administrative nature. Property Manager shall give prompt notice to Owner of any
known violation or written notice of alleged violation of such laws, rules,
regulations and requirements of which Property Manager has knowledge and
Property Manager shall not bear responsibility for failure of the Premises or
the operation thereof to comply with such laws, rules, regulations and
requirements unless Property Manager has committed gross negligence or a willful
act or emission in the performance of its obligations under this Agreement or in
the performance of any other duties owed to Owner or third parties by Property
Manager.
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(n) Property Manager shall be required to maintain an on-site office with
specified business hours, provided that Owner will provide rent-free space.
(o) Property Manager shall require all tenants to comply with all of the
provisions of their leases and any rules and regulations applicable to the
Premises, unless otherwise directed in writing by Owner.
(p) Property Manager shall promptly pay all taxes, utilities, and other bills
relating to the operation of the Premises, unless otherwise limited in writing
by Owner.
2.2 Property Manager agrees to prepare and submit to Owner initial monthly
reports relating to the management and operation of the Premises for the
preceding calendar month, on or before the tenth (10th) day of each month with
all additional reports due on or before the twentieth (20th) day of the month in
form satisfactory to Owner, such form to be subject to change from time to time,
as Owner shall reasonably require. The Property Manager shall also report to
Owner such other information known to Property Manager of which Owner should be
made aware. Property Manager shall remit to Owner the net receipts from the
Premises, including any net income received from the garage operation as
described in Section 2.10, as directed by Owner within ten (10) days after
receipt thereof. Property Manager agrees that Owner shall have the right to
require the transfer to Owner at any time of any funds in the Bank Account
considered by Owner to be in excess of an amount reasonably required by Property
Manager for disbursement purposes in connection with the Premises. Property
Manager agrees to prepare and submit reports relating to the leasing of the
Premises in form satisfactory to Owner as requested by Owner.
Property Manager agrees to keep records with respect to the leasing,
management and operation of the Premises, including records of receipts and
disbursements, all of which shall be deemed the property of Owner, and to retain
those records until the termination of this Agreement at which time Property
Manager shall immediately turn over all such records to Owner. Owner shall have
the right to inspect such records and audit the reports required by this Section
during business hours until such time as all such records have been delivered
over to Owner following the termination of this Agreement in accordance with
Section 5.2 hereof.
2.3 In connection with its management of the Property, Property Manager shall
acquire and utilize such computer software as Owner may require. Property
Manager shall keep such software current and install all upgrades, enhancements
and new versions of the software which may be from time to time released by the
vendor and/or required by Owner (collectively, the "Required Software").
Property Manager shall cause all personnel who use the Required Software to
attend and complete basic system training programs offered by the vendor and
licensor of the Required Software. Property Manager shall also be responsible
for obtaining and maintaining any equipment required for proper operation of the
Required Software, including but not limited to, the communications equipment
required for transmission of data to Owner. Owner may from time to time require
additional or substitute software to be included among the Required Software and
shall provide not less than sixty (60) days' advance notice to Property Manager
of such additions
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or substitutions. Owner shall not be unreasonable with respect to the frequency
of changes in the Required Software. Property Manager shall use the Required
Software to enter, process, store, and transmit data to Owner, as Owner may from
time to time require and shall comply with any data reporting standards as Owner
may establish. Owner shall be responsible for all costs of the required
software, initial training, and additional equipment that is required solely by
Owner and used by Property Manager solely for the Premises.
2.4 Property Manager shall ensure such control over accounting and financial
transactions as is reasonably required to protect Owner's assets from loss or
diminution due to negligence (when Property Manager is acting outside of the
scope of its employment or in violation of this Agreement), gross negligence or
willful misconduct on the part of Property Manager's associates or employees.
Losses caused by such gross negligence or willful misconduct shall be borne by
Property Manager. Owner shall have the right to review control procedures and
within reason may require changes to the existing procedures.
2.5 Property Manager shall prepare and submit to Owner proposed operating and
capital budgets for the promotion, leasing, operation, repair, and maintenance
of the Premises. Preliminary versions of the budget ("Initial Budget") will be
due as stipulated by Owner based on a schedule to be provided by Owner. Property
Manager shall prepare an update of the Initial Budget ("Updated Budget") every
three (3) months reflecting any changes that have occurred since the submission
of the Initial Budget and incorporating Owner's comments. All budgets will be
prepared on an accrual basis showing a month by month projection of income and
expense and capital expenditures for the forthcoming calendar year and proposed
leasing guidelines, together with a marketing plan for all space that is
currently vacant or that is scheduled to become vacant during the next year. The
Initial Budget and Updated Budget shall also contain any other reports or data
which the Owner in its reasonable discretion deems to be relevant to the
management and/or leasing of the Premises. Property Manager will also provide
Owner with additional reports, as reasonably requested from time to time by
Owner.
After receiving Owner's approval of the Updated Budget ("Approved Budget"),
Property Manager shall implement such budget and shall be authorized to make the
expenditures and incur the obligations provided for in the budget except as set
forth herein. Property Manager shall obtain Owner's specific approval prior to
contracting for any capital expenditures, even if already included in the
Approved Budget. Except for amounts of less than five percent (5) of any line
item or except in the event of an emergency, Property Manager shall not spend
any non-budgeted amount in excess of that specified on Exhibit A, paragraph 3,
without Owner's prior written approval. Property Manager shall operate the
Premises according to the previous year's Approved Budget until current budget
is fully approved. Property Manager shall furnish to Owner prior to January 31
an unaudited statement of income and disbursements reflecting the operation of
the Premises for the previous calendar year on an accrual basis. Property
Manager is not allowed to reclassify expenses to meet the Approved Budget.
Property Manager must charge all items to the appropriate account within the
Approved Budget.
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2.6 Subject to the terms hereof, Property Manager agrees to use it best efforts
to cause the Premises to be rented and kept rented to desirable tenants,
satisfactory to Owner, and in connection therewith:
(a) Subject to the terms hereof, to negotiate leases and renewals of leases at
appropriate times on an exclusive basis, it being understood that all inquiries
to Owner with respect to leasing any portion of the Premises shall be referred
to Property Manager. Property Manager is responsible for keeping abreast of all
time limits and requirements in the leases (by way of example and not of
limitation, when options are arising, leases are expiring, etc.), and act in a
timely manner to give any required notice thereof in accordance with all tenant
leases. All leases and renewals must be prepared by counsel selected by Owner
and reviewed by Property Manager in accordance with Owner's leasing guidelines
and on Owner's approved form of lease agreement and be submitted to the Owner's
designated representative for execution by Owner. Unless agreed to and directed
otherwise, Property Manager agrees it will strictly observe the specific leasing
guidelines provided by Owner, cooperating with counsel and acting in a timely
manner, and agrees to hold Owner harmless from any damages sustained by Owner,
including the cost of defending any litigation arising out of Property Manager's
failure gross negligence or willful misconduct in failing to observe such
guidelines. References of prospective tenants, as well as their varying use
requirements, shall be investigated carefully by Property Manager, however, all
decisions concerning creditworthiness and suitability of tenant shall be solely
that of Owner, and Property Manager shall not be required to warrant or
guarantee any tenant's performance.
(b) With Owner's prior written approval and at Owner's expense, to advertise the
Premises or portions thereof for rent by means of periodicals, plans, brochures,
and other means appropriate to the Premises. No sign shall be placed on the
Premises by the Property Manager without the Owner's prior written approval.
2.7 Property Manager agrees for itself and all persons retained or employed by
Property Manager in performing its services, during the term of this Agreement
and thereafter, to use reasonable efforts to hold in confidence and not to use
or disclose to others any confidential or proprietary information of Owner
heretofore or hereafter disclosed to, learned by or prepared by Property
Manager, including but not limited to any data, information, plans, programs,
processes, costs, operations, or tenants which may come within the knowledge of
Property Manager in the performance of, or as a result of, its services, except
where Owner specifically authorizes Property Manager to disclose any of the
foregoing to others or such disclosure reasonably results from the performance
of Property Managers duties hereunder.
2.8 Property Manager shall indemnify and save harmless Owner from and against
all liability, suits, claims, and demands (including, without limitation, all
costs and attorney's fees and expenses incurred in connection therewith) by or
on behalf of any person, firm, corporation or other entity due to or arising out
of any gross negligence or willful misconduct on the part of the Property
Manager, its employees, contractors or subcontractors in connection with
Property Manager's performance of its obligations under this Agreement.
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2.9 Property Manager shall use its best efforts to insure that no third party
files or suffers to be filed, any materialman's or mechanic's lien against the
Premises arising out of material incorporated therein or work performed therein
or thereon upon the request or order of Property Manager.
2.10 If Owner has entered into a separate agreement with a parking management
company ("Parking Manager") or property association to operate the parking
facility of the Premises, Property Manager will coordinate and cooperate with
Parking Manager or property association as directed by Owner, and will
incorporate budgets and monthly statements submitted by Parking Manager into
Property Manager's budgets and monthly statements. If so directed by Owner,
Property Manager shall receive net revenues from Parking Manager for deposit
into the Bank Account described in Section 2.1(g).
ARTICLE III
OWNER'S AGREEMENTS
3.1 Owner, at its option, may pay directly all of the following charges relating
to the Premises: taxes, special assessments, ground rents, insurance premiums
(other than premiums arising out of Section 2.1(b) for which Property Manager is
responsible), and mortgage payments. If Owner does not elect to make any or all
of said payments, Property Manager shall do so out of the Bank Account, if so
directed in writing by Owner.
3.2 Owner shall self-insure or, at its option, require Property Manager to
coordinate the placement of property insurance upon the Premises including both
liability and all risk property insurance and shall look first to such insurance
or self-insurance for indemnity against any loss or damage to the Premises or to
any tenant insurance, except in the case of Property Manager's negligence (when
Property Manager is acting outside of the scope of its employment or in
violation of this Agreement), gross negligence or willful misconduct, or as
otherwise provided herein. To the extent that policies shall be procured, Owner
shall obtain waivers of subrogation in favor of Property Manager under such
policies. Property Manager shall be as insured as real estate manager on Owner's
liability policy.
3.3 With respect to liabilities arising out of the use and operation of the
Premises and arising under this Agreement except for liabilities arising out of
section 2.1 (b), Owner shall indemnify and save harmless Property Manager from
and against all claims, losses and liabilities (including, without limitation,
all costs and attorney's fees and expenses in connection therewith) resulting
from damage to property or injury to, or death of persons, defamation and false
arrest (including, but not limited to, the property and persons of the parties
hereto and their agents, contractors, subcontractors and employees), occasioned
by or arising out of, acts or omissions (other than criminal acts), of (i)
Property Manager (except in the case of Property Manager's negligence when
Property Manager is acting outside of the scope of its employment or in
violation of this Agreement), gross negligence or willful misconduct, or (ii)
Owner or Owner's agents, employees,
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contractors or subcontractors. Nothing contained in this Section 3.3 shall be
construed as creating or evidencing an employment relationship between Owner and
any or all persons employed or utilized by Property Manager pursuant to Section
2.1 (b) for the operation and maintenance of the Premises.
ARTICLE IV
PROPERTY MANAGER'S FEES
AND COMMISSIONS: REIMBURSEMENTS
4.1 As management fees for the services performed pursuant to Article II, Owner
agrees to pay Property Manager on the basis specified in Exhibit A, paragraph 6.
Said fee shall be payable monthly on the tenth (10th) day of the month and shall
be based on receipts from the previous calendar month. Property Manager shall
withdraw said fee from the operating account for the Premises and shall account
for same as provided for in Section 2.2 hereof. If fees are based on rent or
income, it is understood that they shall be applicable to rent or income
actually collected, including parking receipts, and that there shall be excluded
therefrom: direct charges for taxes, insurance, fuel, electricity, water, labor
or any other expense in connection with the operation and maintenance of the
Premises which are paid directly by a tenant to any taxing authority, utility or
service company, fire loss proceeds, capital improvements, remodeling and tenant
change costs (including any overhead factor payable by tenants); amortization
for tenant work; security deposits; however, tax, utility, service charges and
operating expense escalation charges required to be calculated, billed and
collected from individual tenants by Property Manager will be included in
collectively income for the purpose of calculating management fee. Management
fees shall be paid based on actual receipts, not estimates. Owner shall be
entitled to pay Property Manager directly rather than permitting Property
Manager to pay itself out of the Bank Account. To the extent any amounts are
refunded to tenants, gross rent shall be reduced accordingly. Any rent paid more
than thirty (30) days in advance or sales proceeds shall be excluded from gross
rent.
4.2 As leasing commissions, if any, for new leases secured pursuant to Section
2.6, including renewals, expansions or extensions exercised during the term of
this Agreement, Owner agrees to pay Property Manager at the rate specified in
Exhibit A, paragraph 7. A commission will be paid on direct leases signed with
subtenants for the period following the expiration date of the original tenant's
master lease. If a new lease contains a cancellation option exercisable by the
tenant and the cancellation fee does not include an amount for the unamortized
leasing commission remaining at the cancellation date, a leasing commission will
be paid on the initial term, which is prior to such termination date, with the
commission for the balance of the lease term payable when and if such Tenant
does not terminate the lease on or before such date as set forth herein.
Commissions will be based on base rents and pre-determined fixed escalations
payable to Owner only and will exclude: percentage rent; variable escalations;
operating expense escalations; real estate tax escalations; any portion of said
base rent attributable to parking; and free rent. In the event a lease provides
that the tenant is to pay directly for some or all of the operating expenses
and/or real estate taxes associated with its space, then for purpose of
calculating the commissions
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listed in Exhibit A, the tenant's annual base rent shall be increased by an
amount equivalent to the estimated annual expenses that will be paid by tenant
during the first year of its lease as determined by Owner. No commission will be
due for any portion of a lease term that exceeds ten (10) years. Leasing
commissions for new leases and expansions shall be paid fifty percent (50%)
within thirty (30) days after lease execution by all parties and fifty percent
(50%) within thirty (30) days after lease commencement and actual occupancy. In
the event of a renewal or extension, any commission payment due shall be paid
within thirty (30) days of the execution of the renewal or extension
documentation. When leases are negotiated on behalf of tenant by outside
brokers, Property Manager shall cooperate with such brokers, Property Manager
shall be responsible for paying all commissions to such outside brokers, and all
commissions to such outside broker shall be subject to the written approval of
Owner. The cost of all approved commissions will be borne by Owner, unless
already paid to Property Manager in accordance with the terms hereof Property
Manager will assist Owner in negotiating the terms of fees to outside brokers,
and will submit recommendations to Owner regarding the percentage rate for
outside brokerage commissions in conjunction with the budget submissions
provided for in Section 2.5.
4.3 To the extent expressly identified in the Approved Budget, Owner shall be
responsible to Property Manager for the following expenses or costs incurred by
or on behalf of Property Manager in connection with the management and leasing
of the Premises. At Owner's option such expenses can come out of be paid from
the established Bank Account.
(a) Cost of gross salary, wages, bonuses, payroll taxes, insurance, worker's
compensation, pension benefits and any other benefits of Property Manager,
property management clerical support, engineering personnel, and engineering
clerical support as allocated to the Premises.
(b) Necessary general accounting and reporting services, as allocated to the
Premises.
(c) Necessary cost of forms, stationery, ledgers, and other supplies and
equipment used in Property Manager's office, as allocated to the Premises for
property management purposes.
(d) Cost of continuing education for personnel allocated to the Premises.
(e) Cost of parking for personnel allocated to the Premises.
(f) Necessary cost of telecommunications, couriers, and postage allocated to the
Premises.
All of the enumerated items in section 4.3 must be at commercially
reasonable rates.
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ARTICLE V
DURATION, TERMINATION, DEFAULT
5.1 This Agreement shall become effective on January 1, 1996 and will continue
in full force and effect for an initial term of one (1) year, unless terminated
earlier in accordance with the terms of this Agreement. Upon the expiration of
the initial one (1) year term and each subsequent renewal period, unless
terminated, as is hereinafter addressed, this Agreement will automatically renew
for one (1) year renewal periods.
5.2 This Agreement may be terminated by Owner or Property Manager at any time
(a) without cause by giving the other party written notice of the election to
terminate no less than thirty (30) days prior to the date for termination or (b)
automatically and without notice if the Premises are sold to a bona fide third
party purchaser, except as provided herein, or the Premises are acquired through
foreclosure of a mortgage or deed in lieu of foreclosure.
This Agreement may also be terminated for cause by the non-defaulting party, at
its option, upon the happening of any of the following events of default:
(i) If the Property Manager makes a general assignment for the benefit of
creditors; files in the courts a petition in bankruptcy, insolvency, for a
reorganization, or for the appointment of a receiver or trustee of all or part
of its property; voluntarily takes any advantage of any bankruptcy or insolvency
law; an involuntary petition or any answer is filed against the other proposing
the adjudication as a bankrupt which is not discharged or denied within sixty
(60) days thereafter, or if the Property Manager is insolvent by reason of being
unable to pay debts as they mature or otherwise is adjudicated bankrupt.
(ii) Upon the occurrence of a breach, default, or noncompliance by Property
Manager of any of the obligations, agreements or covenants to be performed by
Property Manager hereunder contained in this Agreement, and the failure of
Property Manager to cure such breach, default or non-compliance within five (5)
days following receipt of written notice from the Owner for monetary defaults
and fifteen (15) days following receipt of written notice from Owner specifying
such breach, default or non-compliance for non-monetary defaults; provided that
if the non-monetary breach, default or noncompliance is not curable within said
fifteen (15) day period, then upon Property Manager's failure to commence the
curing of such non-monetary breach, default or non-compliance within said
fifteen (15) day period and thereafter diligently and continuously pursue such
cure to completion in no event more than ninety (90) days. Notwithstanding
anything herein to the contrary, Owner may cure any breach, default or
noncompliance and Property Manager shall immediately reimburse Owner for all
costs or expenses in connection therewith.
(iii) Failure of Owner to reimburse Property Manager any sums stipulated in this
Agreement; said termination to become effective upon Property Manager's having
served Owner written notice of the failure and Owner's continued failure to
remedy or correct such noncompliance within thirty (30) days after receipt of
such notice.
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(iv) If the Premises are damaged by fire or any other casualty or are taken
through the exercise of the power of eminent domain or sale in lieu thereof and,
in Owner's reasonable opinion, such damage or taking materially affects the
operation of the Premises for their intended purpose and the Premises cease to
be operated for such purpose.
Upon termination of this Agreement for any reason, Property Manager shall
deliver the following to Owner or Owner's duly appointed representative on or
before thirty (30) days following the termination date:
(a) A final accounting, reflecting the balance of income and expenses for the
Premises as of the date of termination;
(b) Any balance or monies due to Owner or tenant security deposits, or both,
held by Property Manager with respect to the Premises; and
(c) All records, contracts, drawings, leases, correspondence, receipts for
deposits, unpaid bills, summary of all leases in existence at the time of
termination, and all other papers or documents which pertain to the Premises.
Such data and information and all such documents shall at all times be the
property of Owner.
5.3 If leasing commissions are or will become payable under Section 4.2 and if
this Agreement is terminated by Property Manager or Owner under Section 5.2,
Owner shall recognize Property Manager as the broker in any ongoing contact with
a Prospective Tenant (as hereinafter defined) for a lease, renewal, extension or
expansion with respect to any part of the Premises pending at the date of
termination of this Agreement unless mutually agreed to otherwise by Owner and
Property Manager. "Prospective Tenant" shall be defined as a tenant with whom
active negotiations are currently underway or who has both visited the Premises
with Property Manager (or whose leasing broker has visited the Premises with
Property Manager on Prospective Tenant's behalf) or has received a written
proposal from Property Manager or submitted a written proposal to Property
Manager prior to the date of termination of this Agreement. Property Manager
shall provide a list of Prospective Tenants ("Prospect List") to Owner within
thirty (30) business days of the effective date of termination of this
Agreement. The Prospect List will be subject to the review and approval of
Owner, which approval shall not be unreasonably denied. Unless otherwise agreed
to in writing by all parties, in the event of the consummation of a lease with a
Prospective Tenant appearing on the approved Prospect List within six (6) months
of the termination of this Agreement, Owner shall pay to Property Manager a
leasing commission with respect thereto pursuant to Section 4.2; provided,
however, that Property Manager shall not begin negotiations for any new lease or
renewal after giving or receiving a notice of termination, without the prior
written consent of Owner. No commissions shall be paid to Property Manager in
the event of the consummation of a lease more than six (6) months after the
termination of this Agreement. In the event that Property Manager has been
terminated and a lease is being negotiated with a Prospective Tenant, Property
Manager must continue with such negotiations or agree to split its commission
with Owner's new representative.
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ARTICLE VI
ASSIGNMENT; CHANGE IN CONTROL
6.1 This Agreement shall be unassignable by either party and can be changed only
by a writing signed by the parties hereto, provided, however, that Owner shall
have the right to assign this Agreement in the event a bona fide sale by Owner
of the Premises and such assignment shall not constitute a breach of this
paragraph 6.1, however, in the event of such an assignment, the term of this
Agreement shall expire ninety (90) days after the sale, unless Property Manager
consents to the assignment in writing, in which event the expiration date of the
term of this Agreement shall remain as provided in Article V. No services to be
performed by Property Manager under this Agreement shall be delegated by
Property Manager to any other person or firm without the prior written consent
of Owner, provided that Property Manager may engage independent subcontractors,
at no additional cost to Owner (except as provided in Section 2.1 hereof) and at
Property Manager's sole risk, without such consent, to provide incidental
services usually performed by independent contractors under good property
management practices customary in the locale of the Premises. Subject to Owner's
direction, Property Manager will cooperate with lawyers or consultants, pursuant
to contracts in the name of the Owner, to perform real estate tax appeals,
property audits and its other standard services required in connection with the
operating of the Premises.
6.2 Notwithstanding the foregoing, Property Manager may, upon thirty (30) days
prior written notice to Owner, assign this Agreement to an affiliate provided
that the affiliate is the successor to all or substantially all of Property
Manager's management and leasing business; provided, however, that Owner shall
retain its right to cancel this Agreement upon thirty (30) days' written notice,
in accordance with the terms of Article V.
ARTICLE VII
MISCELLANEOUS
7.1 Owner's Representative ("Owner's Representative") whose name and address are
set forth on Exhibit A, paragraph 1, shall be the duly authorized representative
of Owner for the purposes of this Agreement. Any statement, notice,
recommendation, request, demand, consent, or approval under this Agreement shall
be in writing and shall be deemed given (a) by Owner when made by Owner's
Representative or any officer of Owner and delivered personally to Property
Manager, if an individual, or to an officer of Property Manager, if a
corporation, or when mailed, overnight couriered, or telefaxed (provided
original hard copy of said telefacsimile is then sent via United States Postal
Service or an overnight courier service) addressed to Property Manager, at the
address set forth in Exhibit A, paragraph 2, and (b) by Property Manager when
delivered personally to or when mailed, overnight courriered, or telefaxed
(provided original hard copy of said telefacsimile is then sent via United
States Postal Service or an overnight courier service)
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addressed to Owner's Representative at the address set forth in Exhibit A,
paragraph I. Either party may, by written notice, designate a different address.
7.2 Property Manager shall, at its own expense, qualify to do business in the
local jurisdiction and obtain and maintain such licenses from the appropriate
authorities of said jurisdiction as may be required for the performance by
Property Manager of its services. Property Manager shall comply with all laws,
rules, and regulations of said jurisdiction.
7.3 Each provision of this Agreement is intended to be severable. If any term or
provision hereof shall be determined by a court of competent jurisdiction to be
illegal or invalid for any reason whatsoever, such provision shall be severed
from this Agreement and shall not affect the validity of the remainder of this
Agreement.
7.4 In the event either of the parties to this Agreement shall institute any
action or proceeding against the other party relating to this event, the
unsuccessful party in such action or proceeding shall reimburse the successful
party for its disbursements incurred in connection therewith and for its
reasonable attorney's fees as fixed by the court.
7.5 No consent or waiver, express or implied, by either party hereto or of any
breach or default by the other party in the performance by the other of its
obligations hereunder shall be valid unless in writing, and no such consent or
waiver shall be deemed or construed to be a consent or waiver to or of any other
breach or default in the performance by such other party of the same or any
other obligations of such party hereunder. Failure on the part of either party
to complain of any act or failure to act of the other party or to declare the
other party in default, irrespective of how long such failure continues shall
not constitute a waiver by such party of its rights hereunder. The granting of
any consent or approval in any one instance by or on behalf of Owner shall not
be construed to waive or limit the need for such consent in any other or
subsequent instance.
7.6 This Agreement shall be governed and construed in accordance with the laws
of the State of Virginia. The venue of any action or proceeding brought by
either party against the other arising out of this Agreement shall, to the
extent legally permissible, be the State of Virginia.
7.7 It is understood that the Property Manager is engaged in the development,
management, leasing and sale of real estate similar to the business of Owner,
and may, from time to time, agree to develop, manage, lease and sell other real
estate which may compete with the business of Owner. Owner hereby consents to
the pursuit of such competitive ventures by Property Manager and acknowledges
that such ventures shall not be deemed wrongful or improper; provided that
neither Property Manager nor its affiliates shall solicit any Tenants in the
Premises or attempt to induce such Tenants to relocate out of the Premises and
into a competing property owned, controlled, or managed directly or indirectly
by Property Manager or any affiliate thereof during the term of such Tenant's
lease in the Premises; provided, however, that Property Manager
15
devotes such time, attention, and personnel to the management, operating, and
leasing of the Premises as is necessary to perform all of its obligations under
this Agreement.
7.8 There shall be no third-party beneficiaries to this Agreement, other than
affiliates of Owner of Property Manager.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
TransCanal Properties, Inc.
Owner
Witness:
[signature illegible By: /s/ X. Xxxxxx
--------------------------- -----------------------------------
Name: X. Xxxxxx
Title: XX
Xxxxxx & Associates, Inc.
Property Manager
Witness:
/s/ M. Xxxxxxx Xxxxx By: /s/ Xxxx Xxxx
--------------------------- -----------------------------------
Commission Expires 4/30/98 Name: Xxxx Xxxx
Title: Managing Director, Asset Mgmt.
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EXHIBIT A
Addresses/Approvals/Fee Schedule
1. Owner: TransCanal Properties, Inc.
c/o DIHC Management Corporation
Attention: Xxxx Xxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
2. Property Xxxxxx & Associates
Manager: Attention: Xxxx Xxxx
0000 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
3. Property Manager will require Owner's consent for any non-budgeted repair
in excess of $1,000.00.
4. Property Manager shall direct tenants to pay their rents to Owner. Owner
will deposit these rents and provide Property Manager with a statement of
deposits. The bank account at Sun Trust Bank is in the name of the Owner.
5. Any checks written by Property Manager payable to Property Manager in
excess of $2,000.00 need to co-signature of Owner.
6. Property Manager will be paid 3% on the actual rental receipts as defined
under 4.1.
7. Property Manager will be paid a leasing commission in accordance to 4.2 as
follows:
Any new leases without cooperating broker - 3%.
Any new leases with cooperating broker - 5%.
(Property Manager to pay cooperating broker 3%)
Any expansion of an existing office tenant without cooperating
broker - 2%.
Any expansion of an existing retail tenant without cooperating
broker - 3%.
Any expansion of an existing tenant with a cooperating broker
- 4%.
Any extension of an existing office tenant without cooperating
broker - 2%.
Any extension of an existing retail tenant without cooperating
broker - 3%.
Any extension of an existing tenant with a cooperating broker
- 4%.
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EXHIBIT B
General Requirements for Contractors/Subcontractors
1. Possess commercially reasonable insurance, including, without limitation,
worker's compensation insurance and errors and omissions insurance.
2. Possess all necessary licenses, permits, governmental approvals, etc.
3. Possess at least three (3) years experience in the relevant field of
expertise.
4. Provide evidence, if requested, of each of the foregoing.
5. Provide, if requested, payment and/or performance bond(s).
6. Provide, if requested, an affidavit regarding its financial status,
business experience and other relevant information.
7. Provide information necessary for Property Manager to obtain a credit
report.
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