MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT ("Agreement"), is made and entered into as of
February 11, 1994, by and between PLAZA CAMINO REAL ("Owner"), a California
limited partnership with offices at c/o CenterMark Properties, Inc., 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000, and CENTERMARK PROPERTIES, INC.
("Agent"), a Missouri corporation with offices at 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xx. Xxxxx, Xxxxxxxx 00000.
R E C I T A L S:
A. Owner owns certain property located in Carlsbad, California, legally
described on EXHIBIT A attached hereto and made a part hereof (the "Property"),
on which there is located a regional shopping center commonly known as "Plaza
Camino Real Mall" (the "Project");
B. Agent is experienced in the management, operation and maintenance of
shopping centers, and Owner desires to engage Agent to manage, operate, maintain
and lease the Project;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties, intending to be legally bound, covenant and agree with each other
as follows:
1. CERTAIN DEFINITIONS.
"AFFILIATE" means any Person directly or indirectly controlling,
controlled by or under common control with another Person. As used in the
preceding definition, "control" includes, as to any Person, the ownership of
fifty percent (50%) or more of the legal or beneficial interest in such Person
or the power to direct the management and policies of such Person, whether
through the ownership of voting securities, by contract, or otherwise. For all
purposes hereunder, the following entities shall be considered Affiliates of
Agent: (a) General Growth Properties, Inc. ("General Growth"); (b) Westfield
Holdings Limited ("Westfield"); (c) Westfield Corporation, Inc. ("WCI"); (d)
General Growth Management, Inc. ("GG Management"), (e) GGP Limited Partnership
("GGP"); and (f) any entity which is at least fifty percent (50%) owned directly
or indirectly by one or more of Agent, General Growth, GGP, WCI, GG Management,
WCI and Westfield or a Person that owns directly or indirectly at least fifty
percent (50%) of the voting power of Agent, General Growth, GGP, WCI, GG
Management, WCI and Westfield.
"GENERAL PARTNER" means CenterMark Properties, Inc., a Missouri
corporation, or any permitted assignee thereof under the Partnership Agreement.
"INDEX" with respect to any applicable calculation that is provided for
herein, for each particular year or period in
question, means the "All Items" portion of the Consumer Price Index for All
Urban Consumers: All Cities (1982-84 = 100), issued and published by the Bureau
of Labor Statistics of the United States Department of Labor. If the Index
ceases to use the 1982-84 average equaling 100 as the basis of calculation, or
if a change is made in the terms or number of items contained in the Index, of
if the Index is altered, modified, converted or revised in any way, then the
Index shall be determined by reference to the index designated as the successor
to the prior Index or other substitute index published by the government of the
United States and new index numbers shall be substituted for the old index
numbers in making the calculations, as may be appropriate. If at any time the
Bureau of Labor Statistics shall no longer publish such Index, then any
successor or substitute index to the Index published by said Bureau or other
governmental agency of the United States, and similarly adjusted as foresaid,
shall be used. If such a successor or substitute index is not available or may
not lawfully be used for the purposes herein stated, a reliable governmental or
other non-partisan publication selected by Owner and reasonably acceptable to
Agent shall be used in evaluating the information theretofore used in
determining the Index.
"LEASE" means any lease, sublease, license to occupy or other right
of occupancy, use or possession of the Project or any part thereof, entered into
or granted by or on behalf of Owner, whether temporarily or for a fixed or
periodic term, whether or not recorded, whether oral or written, including,
without limitation, any storage license, cart or kiosk license or lease.
"LEASES" means each and every Lease in effect at the applicable time,
collectively.
"LIMITED PARTNERS" means BARTFAM, a California limited partnership,
Xxxxxx X. Xxxxxxx, an individual, Xxxxxx X. Xxxxxxx, Executor of the Estate of
Xxxx X. Xxxxxxx, Xx., Xxxxxx X. Xxxxxxx, Trustee of The Xxxxxxx Xxxxxx Trust,
Xxxxx X.X. Xxxxx, Xx. and Xxxxx X. Xxxxx, Trustees of the Xxxxx X.X. Xxxxx, Xx.
and Xxxxxxxx X. Xxxxx Family Trust, and their permitted assignees under the
Partnership Agreement.
"NET WORTH" means, as to any Person, as of a particular date, such
Person's equity (determined in accordance with generally accepted accounting
principles) minus all assets customarily considered intangible under generally
accepted accounting principles (including, for example, but not by way of
limitation, goodwill), all assets located anywhere other than in the United
States of America, all debt and any value ascribed to such Person's interest in
this Agreement or in the Owner, and provided that all assets shall be valued
based on current fair market value.
"PARTNER" means any General Partner or any Limited Partner of the
Partnership.
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"PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement of
Limited Partnershp of Plaza Camino Real L.P., dated as of January 1, 1994, among
the General Partner and the Limited Partners.
"PERSON" means any individual, partnership, firm, association,
corporation or any other form of business entity.
"TENANT" means all Persons using or in possession or occupation of
any portion of the Project from time to time under any Lease.
2. ENGAGEMENT. Subject to the terms and conditions set forth herein,
Owner hereby (i) engages and authorizes Agent, as an independent contractor on
Owner's behalf and as Owner's sole and exclusive agent, to manage, operate, and
maintain the Project; and (ii) appoints Agent as its sole and exclusive leasing
agent and representative for the Project, all for the period of time and upon
the terms and conditions hereinafter set forth. Agent hereby accepts such
engagement and appointment and shall make available to Owner the full benefit of
the judgment, expertise, and advice of the members of Agent's organization and
staff with respect to the foregoing appointment.
3. AGENT'S OBLIGATIONS. Subject to the terms and conditions set forth
herein, Agent shall immediately commence and with due diligence and in good
faith perform all services necessary, proper, or appropriate for the management
of the Project as a regional shopping center. In furtherance thereof, Agent
shall, subject to the terms and conditions set forth herein (including without
limitation, the obligation to obtain the consent of the Limited Partners under
certain circumstances), promptly, fully, faithfully and in compliance with all
applicable statutes, laws, ordinances, rules and regulations of all governmental
authorities having jurisdiction over the Property (collectively, "Legal
Requirements"), perform, among other things, the following:
(a) Throughout the continuation of this Agreement, furnish Owner with
the following statements concerning the operation of the Project within thirty
(30) days after the end of each month:
(i) An operating statement (an "Operating Statement"), showing
monthly and year-to-date comparisons of actual income and expenses to the
corresponding line items of the annual Operating Budget (as defined below)
for such year;
(ii) a trial balance;
(iii) a statement of the balance of each Partner's Capital Account
(as such term is defined in the Partnership Agreement);
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(iv) a cash flow schedule;
(v) a Tenant sales report showing sales by each Tenant on a per
rentable square foot basis; and
(vi) a report of aged accounts receivable.
(b) Throughout the continuation of this Agreement, furnish Owner,
within forty-five (45) days after the end of each quarter, an updated leasing
plan (a "Leasing Plan") showing the following: (a) a current rent roll;
(b) the status of leasing efforts, including negotiations with prospective
tenants; (c) vacated and/or bankrupt Tenants noted as such; (d) calculations
of reserves for bad debts; (e) a schedule identifying the spaces within the
Project for which Leases are expected to expire or otherwise become vacant
during the succeeding twelve month period and whether Agent recommends
renewal of expiring tenancies; (f) for space for which Agent recommends
renewal, the range of proposed rents, the range of lengths of the term of
occupancy, the range of tenant allowances for improvements and such other
economic terms for Lease renewals as Agent deems appropriate; (g) for space
for which Agent does not recommend renewal of an existing Tenant's Lease or
expects the space to otherwise become vacant, Agent's proposed list, in order
of preference, of specific potential uses which might be most appropriate to
obtain the best tenant mix for the Project as well as the range of economic
terms for each such use. Agent is authorized to enter into any Lease renewals
or new Leases which conform to the most recently delivered Leasing Plan.
Owner shall make its personnel available to discuss on a regular basis
changes in the Leasing Plan.
(c) Not less than forty five (45) days before the beginning of each
calendar year, prepare and submit to Owner for approval, with a copy to each
Limited Partner, an operating budget (as and when approved, the "Operating
Budget") setting forth an itemized statement of all anticipated revenues and
expenditures relating to the operation and maintenance of the Project for the
next calendar year (including, without limitation, all items set forth in
Section 7.2 of the Partnership Agreement), the guidelines for the adoption
and use of which shall be as follows:
(i) Owner shall have thirty (30) days following actual receipt of
such proposed Operating Budget in which to notify Agent of any objections
it may have thereto and Owner agrees not to unreasonably object to the
contents of the proposed Operating Budget and to specify the reason for
any objections. If no such notice is given to Agent within such thirty
(30) day period, such proposed Operating Budget shall be deemed approved
for such calendar year. If, within such period, Owner objects as provided
above to any item in the proposed Operating Budget or to such Operating
Budget as a whole, until such time as there is agreement on the Operating
Budget for the subsequent year, Agent shall manage the
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Project in accordance with the objected-to line item as contained in the
Operating Budget for the current year or if the entire proposed Budget
is objected to, in accordance with each line item as contained in the
Operating Budget for the current year; PROVIDED that, the amount of each
such line item shall be increased by multiplying the amount specified
therein by a fraction, the numerator of which shall be the Index as of
January 1 of the year for which the disputed Operating Budget has been
submitted, and the denominator of which shall be the Index as of January 1
of the immediately preceding calendar year. The Operating Budget shall
take into account, among other things, the general condition of the
Project and shall provide for Working Capital Retentions (as defined in
the Partnership Agreement) in at least the minimum amounts for the time
periods set forth in Section 10.4 of the Partnership Agreement.
(ii) Agent shall use its reasonable, diligent efforts to operate
the Project within the Operating Budget. Other than in the event of an
Emergency (as defined below), Agent shall not, without the prior written
consent of Owner (which shall not be unreasonably withheld or delayed),
make any expenditures or commitments for the account of Owner in
connection with the operation or management of the Project which would
cause the actual, aggregate annual expenses for the Project to be more
than one hundred ten percent (110%) of the aggregate annual expenses
approved in the Operating Budget. As used herein, "EMERGENCY" means an
event in which Agent, in its reasonable judgment, must act immediately
to (w) preserve and keep safe the Project; (x) avoid the suspension of
any necessary service to or required by the Project, the Tenants,
customers or invitees of the Project; (y) preserve the safety of
employees, Tenants, customers or invitees of the Project or avoid danger
to life or property at the Project; or (z) otherwise comply with Legal
Requirements (as defined below), Insurance Requirements (as defined
below) or the provisions of any Leases. Agent shall notify Owner of any
disbursements made for any Emergency that in the aggregate exceed
$50,000 (net of any such disbursements recoverable from Tenants) within
forty-eight (48) hours after such disbursements are made.
(d) Throughout the continuation of this Agreement, furnish Owner with
the following statements concerning the operation of the Project:
(i) Within one hundred twenty (120) days after the end of each
calendar year, audited financial statements of the Partnership and the
Project which shall contain a balance sheet as of the end of such
calendar year, a statement of profit and loss, and a statement of cash
flow for such calendar year, reported on by an independent certified
public accountant reasonably acceptable to Owner; and
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(ii) Within seventy five (75) days after the end of each calendar
year, a copy of the tax return of the Partnership for such calendar year.
(e) Keep and maintain, at Agent's sole cost and expense, the books and
records relating to the Project at Agent's principal office, unless Owner
designates otherwise, which books and records shall be deemed to be the
property of Owner. Owner or its duly authorized agents shall have the right
to examine and copy such books and records at any time during normal business
hours.
(f) Secure prospective Tenants for the Project, lease or cause to be
leased the Project in accordance with the most recently delivered Leasing
Plan then in effect and any amendments thereto, and maintain good tenant
relations with Tenants of the Project in a reasonable manner.
(g) Xxxx Tenants of the Project for, and collect and deposit in the
Bank Account (as defined below), all amounts due under the Leases, including,
without limitation, all fixed rents, percentage rents and other sums, whether
payable as additional rent or otherwise payable by such Tenants under their
respective Leases or other parties under license, service or other
agreements. Agent shall use its commercially reasonable efforts and methods
to collect such amounts due under the Leases; provided, however, that Agent
shall obtain the written consent of Owner prior to instituting any legal
proceedings or arbitrations with respect to collection activities against
Tenants. Agent's use of independent collection services or agencies to
collect amounts due, including attorneys experienced in the field of
landlord-tenant relations to prosecute defaults, under any of the Leases
shall be at Owner's sole expense. All judicial proceedings shall be brought
in Owner's name, and Owner shall reasonably cooperate with Agent in all such
proceedings, which shall be at Owner's sole expense.
(h) Use its diligent efforts to enforce the performance by Tenants of
all requirements under their respective Leases and the observance by such
Tenants of all rules and regulations of the Project, by all commercially
reasonable means; provided, however, that Agent shall obtain the written
consent of Owner prior to commencing legal proceedings to enforce any Lease.
(i) Use its commercially reasonable efforts to maintain and repair the
buildings and improvements comprising the Project so as to keep the same in a
safe, sound, attractive and rentable condition, and to cause the Project to
be maintained and operated in compliance with all applicable Legal Requirements,
and hire such Persons and purchase or lease such equipment and supplies at
reasonable rates and costs as may be necessary or desirable to accomplish the
foregoing, all within the limits of the Operating Budget. Agent shall negotiate
and administer contracts for
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electricity, gas, fuel supply, water, telephone, janitorial services, window
washing, exterminating, equipment maintenance, trash handling and other
contracts relating to the operation or maintenance of the Project.
(j) Hire, discharge and supervise all temporary and permanent employees
reasonably necessary for the on-site management, operation, maintenance and
repair of the Project. All such personnel shall be independent contractors or
employees of Agent.
(k) Take all commercially reasonable steps to enforce all maintenance,
service and supply contracts, guarantees, warranties, bonds and other
contractual undertakings, if any, affecting the Project; provided, however, that
Agent shall obtain the written consent of Owner prior to commencing legal
proceedings with respect to such enforcement.
(l) Take all commercially reasonable steps to avoid knowingly
permitting the use of the Project for any purpose which might void or
increase the premiums or reduce the coverage on any policies of insurance
maintained by Owner or which might render any loss insured thereunder
uncollectible (collectively, the "Insurance Requirements") or which would be
in violation of any Legal Requirement; provided, however, that Agent shall
obtain the written consent of Owner prior to commencing legal proceedings to
enforce the use provisions of any Lease.
(m) Take all commercially reasonable efforts to duly and punctually
perform and comply with all of the obligations, terms and conditions required to
be performed or complied with by Owner under (i) the Leases, (ii) any mortgages
encumbering the Project, (iii) operating agreements, service agreements and
other contractual agreements affecting the Project, (iv) the Legal Requirements
and (v) the Insurance Requirements.
(n) Promptly deliver to Owner copies of all notices from any insurance
company, mortgagee, Tenant, anchor tenant at the Project or other party to the
REA (as defined in the Partnership Agreement), or any other party given pursuant
to a contractual agreement or otherwise relating to claimed breaches of
contractual provisions or terminations, and from any governmental authority
relating to a claimed violation of any Legal Requirement.
(o) Organize and administer meetings with Owner, periodically or at the
request of Owner, in person or telephonically, in order to review the status of
the Project, Operating Budgets, other financial information and the Leasing
Plan. The foregoing shall not be deemed to require Agent to deliver any such
documents or information prior to the dates otherwise specifically set forth in
this Agreement.
(p) Establish, implement, execute and supervise an advertising and
promotional program for the Project.
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(q) Review annually the tax assessments upon the Project and recommend to
Owner when deemed reasonably appropriate by Agent that proceedings be instituted
by Owner to contest or appeal such assessments.
(r) Perform such other related normal management functions as shall
pertain to the Project as contemplated by this Agreement.
All services performed by Agent under the provisions of this Agreement
shall be deemed to be performed for the benefit of Owner and all reasonable
expenses properly incurred in connection with the performance of such services
shall be the obligation of Owner, except as provided in Section 7(d) below.
Notwithstanding any other provision hereof, Agent shall have no power or
authority to take, and shall not take, any action in respect of the Project for
which the consent of the Limited Partners is required pursuant to Section 7.1 of
the Partnership Agreement without first having obtained such consent.
4. BANK ACCOUNT; HANDLING OF FUNDS.
(a) For the benefit of Owner, Agent shall promptly deposit all revenues
received by Agent from the Project and the Leases and other funds of every kind
and nature received by Agent in respect of the Project or for the benefit of
Owner pursuant to this Agreement in a deposit account (the "Bank Account") to be
established by March 1, 1994 and maintained by Agent with a federally insured
depositary institution acceptable to Owner. Agent shall have no right to
commingle such funds. Agent shall keep Owner informed at all times with respect
to the bank in which the Bank Account is maintained, the name under which the
Bank Account is kept, the number of the Bank Account and the names and titles of
officers or employees of Agent who may draw upon the Bank Account. Agent shall
have the right to withdraw or cause to be disbursed from the Bank Account
sufficient funds necessary for the performance of its obligations hereunder;
provided that the item or purpose for which any such withdrawal or disbursement
is to be made (i) has previously been approved by Owner as part of the approved
Operating Budget or otherwise in writing, (ii) does not result in the actual,
aggregate annual expenses for the Project exceeding one hundred ten percent
(110%) of the aggregate annual expenses approved in the Operating Budget or
(iii) in respect of an Emergency. Except for disbursements permitted by clauses
(i), (ii) and (iii) above and as otherwise specifically provided for in this
Agreement, Agent shall not have any authority to disburse funds of Owner or any
other revenues or other funds in respect of the Project from the Bank Account
without the prior written consent of Owner.
(b) In the event that the revenues received by Agent from the Project for
any month, together with any balance in the Bank Account, are insufficient to
meet the expenses of operation of
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the Project for such month ("Operating Losses"), Agent shall immediately send
notice thereof to Owner specifying the nature and amount of such Operating
Losses and Owner shall deposit to the Bank Account sufficient funds to pay
any past due accounts plus Agent's projected Operating Losses for the current
month. Agent's obligation to pay the obligations of the Project and Owner
under this Agreement or to perform any of its other obligations hereunder is
conditioned upon the availability of sufficient funds (from a Person other
than Agent) to perform such obligations, and Agent shall not be deemed in
default of any provision of this Agreement for its failure to pay or
discharge any operating expenses, taxes or other Property expenses if the
balance of the Bank Account is insufficient to pay the same. Notwithstanding
the foregoing, this limitation shall in no way affect the obligation or
liability of the General Partner under the Partnership Agreement with respect
to such obligations.
(c) Owner hereby agrees to indemnify, defend and protect Agent and to hold
Agent harmless from and against any and all causes of actions, losses, costs,
damages, expenses or liabilities (including reasonable attorneys' fees and
expenses and court costs) suffered or incurred by Agent as a direct result of
Owner's failure to advance funds to cover a deficiency in the Bank Account if:
(i) the expense relates solely to the Project;
(ii) the deficiency in the Bank Account has not been caused by
Agent's gross negligence, willful misconduct or default in the performance
or observance of any term, condition or covenant contained in this
Agreement; and
(iii) Agent promptly notified Owner of the existence and the
amount of the deficiency in accordance with Section 4(b) above.
(d) At least quarterly, after allowing for (i) Working Capital Retentions
consistent with the Operating Budget (in the minimum amounts required by Section
10.4 of the Partnership Agreement) to be held for the payment of operating
expenses, capitalized and deferred expenditures and real estate taxes thereafter
coming due and payable and for other items in the Operating Budget which may not
be operating expenses, and (ii) the maintenance of a contingency reserve of
$75,000 together with a proper accounting, Agent shall remit the net amount due
to Owner.
5. INSURANCE. Agent shall assist Owner in formulating, and, subject to
the Operating Budget, implementing in accordance with commercially reasonable
standards, an insurance program for the Project. Agent shall procure and
maintain all insurance required pursuant to such insurance program, the
applicable Operating Budget and any mortgage or deed of trust encumbering the
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Property. Agent shall have no liability on account of Agent's failure to
procure any particular type of insurance coverage that becomes prohibitively
expensive or generally unavailable.
(a) Agent shall cause all insurance covering the Project to be placed
with an insurance company or companies authorized or licensed to do business
as an insurance company in the State of California. All such insurance shall
be obtained at Owner's expense in accordance with the then current Operating
Budget, provided that Owner shall be charged Agent's actual cost after taking
into account the benefit, if any, of favorable rates or discounts available
to Agent as a result of such insurance being part of a blanket or umbrella
policy covering other real estate projects owned or managed by Agent. Agent
shall cause copies of the insurance policies to be delivered to Owner
promptly upon the issuance or renewal of each policy. Each such insurance
policy shall state that no cancellation or amendment thereof shall be
effected unless and until thirty (30) days prior written notice is provided
to Agent and Owner. All such policies of insurance shall name Owner as named
insured, Agent and the Limited Partners of Owner as additional insureds, as
their respective interests may appear, and shall contain a leader's loss
payable endorsement as required by any mortgage encumbering the Project.
Agent shall deliver all policies, including additional and renewal policies,
together with evidence of payment of premiums thereon, to Owner and, in the
case of insurance about to expire, shall deliver reasonable evidence of
coverage not less than seven (7) days after their respective dates of
expiration.
(b) From time to time, if deemed necessary or prudent by Owner, the
coverage levels and deductible provisions of the insurance policies required
by this Section shall be reevaluated by an appraiser approved by Owner and
Agent, and Agent shall cause appropriate amendments to such policies to be
made; provided, however, that Agent shall effect no material change in the
coverage of such provisions without Owner's prior written approval. Agent
shall notify Owner of such reevaluations, appraisals and amendments to
policies.
(c) Agent shall not obtain, carry or cause to be carried separate
insurance concurrent in form or contributing in the event of loss with that
required by this Section unless Owner is included therein as named insured
and the Limited Partners of Owner are named therein as additional insureds.
Agent shall immediately notify Owner whenever any such separate insurance is
obtained and shall deliver to Owner a copy of such policy or policies.
(d) Agent shall promptly give notice to the appropriate insurance
companies that have issued policies on the Project of all accidents,
incidents, occurrences and claims for damage arising out of or relating to
the use, occupancy, ownership, operations and maintenance of the Project, and
shall prepare a
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full written report thereon, including a report of any injuries, and of any
damage to or destruction of the Project and the estimated cost of repair.
Agent shall promptly and in the manner required by the appropriate policy or
policies of insurance, file all claims and shall use its reasonable efforts
to obtain payment therefor.
6. TAXES. Agent shall promptly advise Owner of all matters coming to
its attention pertaining to real and personal property taxes and assessments
due on the Project. All real and personal property taxes and assessments
respecting the property included within the Project shall be paid by Agent
out of the Bank Account.
7. COMPENSATION OF AGENT.
(a) In consideration of all management services to be performed by
Agent under or pursuant to the terms of this Agreement, Owner shall pay to
Agent a monthly fee (the "Management Fee") in an amount equal to 4% of the
Operating Income from the Project, payable monthly, in arrears. Agent is
hereby authorized to pay itself the Management Fee for each month on or at
any time after the first of the month after the month for which such
Management Fee is due. As used herein, the term "Operating Income", for any
month, means the sum of (i) minimum rent, ground rent and percentage rent
payable under all Leases (including, without limitation, all revenue from
permanent or temporary Leases of kiosks or cart spaces), (ii) all security
deposits that have been applied to rent payable to Owner under the Leases,
(iii) proceeds from any litigation wherein damages equivalent to or based
upon rent payable to Owner from a defaulted Tenant are recovered, net of the
expense of collection thereof, and (iv) revenues payable to Owner resulting
from the provision at the Project of music, vending machines and telephone
service, net of amounts payable to the providers of such services. Operating
Income shall not include any payments by Tenants in respect of common area
maintenance charges, enclosed mall operating expenses, taxes, insurance,
utilities or any other obligation of any Tenant that is in the nature of a
reimbursement of or advance against pass through expenses or capital
improvements, whether or not denominated as "additional rent" under any Lease.
(b) In consideration of all leasing services to be performed by Agent
under or pursuant to the terms of this Agreement, Owner shall pay to Agent a
fee (the "Leasing Fee") aggregating $200,000 for each calendar year, payable
monthly, in arrears. Agent is hereby authorized to pay itself the Leasing Fee
from the Bank Account on or at any time after the first day of the month
after the month for which such Leasing Fee is due. The Leasing Fee shall be
in lieu of any other finder's fee or other compensation to which Agent might
otherwise be entitled in connection with any new Lease or renewal of an
existing Lease, or which Owner might otherwise be required to pay to any
participating or
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cooperating broker or finder, it being understood that Agent shall be solely
responsible for the payment of such other compensation.
(c) In the event that there are insufficient funds in the Bank Account
to pay the Management Fee or the Leasing Fee due for any month during the
term of this Agreement, then if Owner does not pay the amount of such
Management Fee or Leasing Fee within ten (10) business days after receipt of
notice of such insufficiency, such unpaid Management Fee or Leasing Fee shall
bear interest at a rate equal to three percent (3%) over the base reference
or "prime" rate then announced by Boatmen's Bank, N.A., St. Louis, Missouri
(the "Prime Rate"), compounded annually, for the period from the date such
Management Fee or Leasing Fee was due until the date that it is paid in full
by Owner to Agent.
(d) Agent shall be entitled to reimbursement of all costs and expenses
incurred in connection with the performance of its obligations hereunder,
except for (a) salaries and wages paid by Agent or any Affiliate of Agent to
any leasing representative(s), (b) any real estate broker's or agent
commissions or finder's fees, (c) attorneys' fees incurred or expended in
connection with the negotiation and preparation of any Leases and any
amendments or supplements thereto or renewals thereof ("Leasing Legal Fees"),
and (d) costs of accounting services in respect of the preparation of the
statements referred to in Sections 3(a) and 3(e) hereof. Notwithstanding the
foregoing, attorneys' fees incurred or expended for all legal services other
than Leasing Legal Fees, including, without limitation, (x) enforcement of
Leases, (y) defense of Agent or Owner with respect to any Lease and (z)
amendments or supplements to Leases executed in settlement or resolution of
any controversies or disputes arising out of any Lease, shall be deemed
reimbursable operating expenses and may be paid for by Agent from available
funds in the Bank Account.
8. AGENT'S STAFF; COUNSEL. Agent agrees that the staff available to
it for work hereunder shall at all times consist of a sufficient number of
appropriately trained and otherwise qualified personnel to enable it to carry
out its obligations pursuant to this Agreement. Agent further agrees that it
shall use at least so much of the time and effort of such personnel as is
reasonable to insure proper performance of Agent's obligations under this
Agreement. Whenever legal services of outside counsel are required in Agent's
sole discretion in order for Agent to perform properly any of the services
described herein, such services shall be performed by counsel representing
and, except as provided in Section 7(d), paid by Owner or with funds of Owner
available in the Bank Account.
9. TERM. The term of this Agreement shall be for a period commencing
on January 1, 1994 (the "Commencement Date") and,
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unless earlier terminated as provided in this Agreement, shall expire upon
the termination of the Partnership Agreement.
10. TERMINATION BY OWNER. This Agreement may be terminated at the sole
option of Owner, which option may be exercised by Owner giving Agent written
notice of such termination after occurrence of any of the following:
(a) Agent commits a breach hereunder which breach is not cured (i)
within five (5) days with respect to a breach relating to payments of money
to Owner, the payment of premiums for insurance policies required hereunder
or the payment of real or personal property taxes or assessments, or (ii)
within thirty (30) days with respect to a nonmonetary breach, in either case
after receipt by Agent of a written notice setting forth and describing such
breach and requesting the same to be remedied within such time period;
provided, that if the time required to cure and remedy such nonmonetary
breach shall exceed thirty (30) days, such thirty (30) day period shall be
extended for the period reasonably required to cure and remedy such breach
(but in no event longer than 120 days), so long as curative efforts are
commenced by Agent as soon as reasonably practicable in view of all
circumstances and are diligently prosecuted by Agent to completion. With
respect to any such nonmonetary breach, provided that Agent delivers to Owner
prior notice, such curative period shall be extended for such length of time
as curative efforts may not be commenced or prosecuted by Agent due to
strikes, work stoppage, inclement weather, failure of deliveries, or other
causes beyond the reasonable control of Agent, including, without limitation,
any matter set forth in Article XII of the Partnership Agreement, the
provisions of which are incorporated herein.
(b) The General Partner assigns or transfers its interest in Owner to,
or substitutes for itself as general partner of the Owner, any other Person
who is not an Affiliate of General Partner, other than in accordance with the
provisions of the Partnership Agreement or General Partner ceases for any
other reason to be a general partner of Owner.
(c) Agent assigns or transfers its interest hereunder in violation of
Section 14 below.
(d) (i) Agent files a petition for the appointment of a trustee,
liquidator or receiver of all or substantially all of its assets, or
commences any proceeding relating to itself under any bankruptcy,
reorganization, or similar law for the protection of creditors; (ii) any such
application is filed or proceeding is commenced against Agent and Agent fails
to cause such proceeding to be stayed or vacated within thirty (30) days
after the filing or commencement thereof, or an order is entered appointing
any such trustee, liquidator or receiver or approving a petition in any such
proceedings and such order remains unvacated and
13
unstayed for more than ninety (90) days, or (iii) there is an attachment,
judgment or levy against the Project or any portion thereof which is not
vacated, dismissed or released within ninety (90) days after the filing
thereof.
11. TERMINATION BY AGENT. This Agreement may be terminated at the sole
option of Agent, which option may be exercised by Agent giving Owner written
notice of such termination after Owner commits a material breach hereunder,
which breach is not cured within thirty (30) days after receipt by Owner of
a written notice setting forth and describing such breach and requesting the
same to be remedied within such thirty day period; provided, that if the time
required to cure and remedy such breach shall exceed thirty (30) days, such
thirty (30) day period shall be extended for the period required to cure and
remedy such breach, so long as curative efforts are commenced by Owner as
soon as reasonably practicable in view of all circumstances and are
diligently prosecuted by Owner to completion. With respect to any such breach
which would not be remedied by mere monetary payment, such curative period
shall be extended for such period of time as curative efforts may not be
commenced or prosecuted by Owner due to strikes, work stoppage, inclement
weather, failure of deliveries or other causes beyond the reasonable control
of Owner, including, without limitation, any matter set forth in Article XII
of the Partnership Agreement, the provisions of which are incorporated herein.
12. POST-TERMINATION OBLIGATIONS OF THE PARTIES. Upon the effective
date of termination of this Agreement (the "Termination Date"):
(a) Owner shall assume any contracts which may have been entered into
by Agent in its own name relating to the management of the Project (provided
that such contracts were entered into in accordance with the terms and
conditions of this Agreement). Owner hereby agrees to indemnify, defend and
hold harmless Agent from and against any and all losses, damages, costs,
expenses and liabilities (including, without limitation, attorneys' fees and
costs) arising out of or as a result of any action (to the extent done in
accordance with the terms and conditions of such contract) or inaction
relating to any such contract by Agent after the effective date of such
termination. Agent shall execute and deliver to Owner such documents of
transfer and assignment as may be reasonably required to vest in Owner all of
Agent's rights under any and all contracts required to be assumed by Owner
hereunder.
(b) Owner shall be responsible for, and shall indemnify, defend and
hold harmless Agent from and against, all unpaid costs, charges, invoices or
claims in respect of services, materials, and supplies, if any, which may
have been ordered by Agent in accordance with the provisions of this
Agreement.
14
(c) In the event of any termination of this Agreement pursuant to
Section 11 above, Owner shall pay to Agent the Management Fee, the Leasing
Fee, reimbursable expenses, interest pursuant to any provision hereof, and
all other compensation properly payable to Agent hereunder through the
Termination Date. Agent shall receive no further compensation, except that
Agent shall have the right to receive any payment owed at such time with
respect to matters occurring between the date of the last payment and the
Termination Date.
(d) On or before the Termination Date, (i) Agent and any Affiliate of
Agent holding funds of Owner shall pay over to Owner all monies held by it
for the account of Owner, including without limitation, monies held in the
Bank Account, less the amount of any compensation, advances or other sums due
Agent pursuant to this Agreement accrued to the date of termination, (ii)
Agent shall deliver to Owner all records relating to its management of the
Project and all inventory of supplies, materials and equipment on hand and
(iii) Agent shall assign and transfer over to Owner or Owner's designee the
Bank Account.
(e) Agent shall use its commercially reasonable effort to facilitate
the transition of any succeeding manager of the Project.
(f) Neither party shall be relieved of any of its obligations
theretofore accrued under this Agreement prior to the effective date of such
termination.
(g) If termination shall result from an event described in Section 10
or Section 11, Agent or Owner, as the case may be, shall be liable to the
other party hereto for any damage caused by the events giving rise to such
termination.
(h) All past due amounts payable by either party hereto to the other
party shall bear interest from the date on which such payment becomes due
until paid at the Prime Rate.
(i) The provisions of this Section 12 shall survive the termination of
this Agreement.
13. INDEMNITIES.
(a) Agent hereby agrees to indemnify, defend and protect Owner and each
of Owner's constituent partners and their respective officers, directors,
trustees and executors (such persons collectively called "the indemnified
parties" for the purposes of this Section 13(a), and hold each of the
indemnified parties harmless against all losses, damages, costs, expenses and
liabilities (including, without limitation, reasonable attorneys' fees and
expenses and court costs) incurred by the indemnified parties by reason of
any claim or demand being made upon or any action taken against any of the
indemnified parties arising from Agent's
15
gross negligence or willful misconduct or any breach or failure to perform
any of Agent's covenants, obligations, warranties or representations
contained in this Agreement. The indemnified parties shall, in good faith,
endeavor to notify Agent in writing as to every such claim, demand or action
against the indemnified parties within ten (10) business days after the
indemnified parties become aware that such claim or demand has been made or
such action has been taken. A good faith failure to notify Agent shall not
limit Agent's liability under this Section.
(b) Owner hereby agrees to indemnify, defend and protect Agent and each
of Agent's officers and directors (each such person collectively called "the
indemnified parties" for the purposes of this Section 13(b), and hold each of
the indemnified parties harmless against all losses, damages, costs, expenses
and liabilities (including, without limitation, reasonable attorneys' fees
and expenses and court costs) incurred by the indemnified parties by reason
of any claim or demand being made upon or any action taken against any of the
indemnified parties arising from (i) any gross negligence or willful
misconduct of Owner, or any breach or failure to perform any of Owner's
covenants, obligations, warranties or representations contained in this
Agreement, or (ii) any act taken or omission made by Agent in the performance
of its obligations under this Agreement, which act or omission was within
the express or implied scope of authority conferred by this Agreement or
otherwise by Owner, and is not the result of Agent's gross negligence,
willful misconduct or default in the performance or observance of any term,
condition or covenant contained in this Agreement. The indemnified parties
shall, in good faith, endeavor to notify Owner in writing as to every such
claim, demand or action against the indemnified parties within ten (10)
business days after the indemnified parties become aware that such claim or
demand has been made or such action has been taken. A good faith failure to
notify Owner shall not limit Owner's liability under this Section. Owner
shall obtain and maintain as part of any liability insurance covering the
Project pursuant to Section 5 hereof a contractual liability endorsement
specifically referencing this Section 13(b).
(c) No person who shall be engaged as an independent contractor by
either Owner, Agent, or both, shall be considered an employee, servant,
agent, or other person that either Owner or Agent (as the case may be) shall
be obligated to indemnify for the purposes of this Section. The indemnities
contained in this Section 13 shall survive the termination of this Agreement.
14. ASSIGNMENT. Notwithstanding anything to the contrary contained
herein, the sale, transfer or assignment of the stock of Agent or any direct
or indirect shareholder of Agent shall not require the consent of the Owner.
Except as set forth below, Agent shall not, assign, transfer, mortgage,
pledge, sell, hypothecate, or otherwise encumber (or permit any of the forego-
16
ing) in any manner or by any means whatsoever, whether voluntarily or by
operation of law, all or any part of its interest in or obligations arising
out of this Agreement, other than pursuant to a collateral pledge or security
agreement which provides that, in the event of any enforcement thereof, in no
event would Agent's obligations hereunder be assigned or transferred without
the prior written consent of Owner, which consent may be withheld in Owner's
sole discretion. Notwithstanding anything contained herein to the contrary,
no Owner consent shall be required for the transfer of Agent's interest in or
obligations arising out of this Agreement to (a) an Affiliate of Agent
provided such Affiliate either (i) has a Net Worth (as determined from its
current financial statements for the year of such assignment or the calendar
year immediately preceding the year of assignment in the case where no
financial statements have yet been prepared for the calendar year of such
assignment) of not less than $20,000,000 or (ii) has all of its obligations
guaranteed by a guarantor (a "Guarantor") having a Net Worth of not less than
$20,000,000 determined as set forth above pursuant to a guaranty in form and
substance reasonably satisfactory to the Owner, or (b) the permitted
transferee of the partnership interest of the General Partner in the Owner.
In the event of an assignment to an Affiliate pursuant to clause (a)(i) or
(ii) above, such Affiliate or its Guarantor shall covenant not to voluntarily
reduce its Net Worth, including, without limitation, by means of any
divestiture or disposition of assets, creation of liabilities or creation or
acquiescence to a lien or pledge of assets, or any distribution, dividend or
redemption in connection with stock or another ownership interest to below
$25,000,000. Notwithstanding the foregoing, this Agreement shall be deemed to
have terminated if at any time following such an assignment a direct or
indirect owner of the then Agent hereunder is not a direct or indirect owner
of a substantial economic interest in the General Partner.
15. NOTICES. All notices and other communications which either party
is required or desires to send to the other shall be in writing and shall be
effective if given by personal delivery, commercial messenger service,
telecopy, telex, telegram, cablegram, or registered or certified mail, return
receipt requested. Notices and other communications which are so mailed shall
be deemed to have been given upon receipt. Notices shall be addressed as
follows:
TO AGENT:
CenterMark Properties, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: President & Chief Executive Officer
17
with copy to:
CenterMark Properties, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Legal Department
TO OWNER:
Plaza Camino Real
c/o CenterMark Properties, Inc.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: President & Chief Executive Officer
or to such other address as shall be specified by either party in a notice
given to the other pursuant to the provisions of this Section.
16. FURTHER ASSURANCES. Each party hereto agrees to execute and
deliver any and all instruments, agreements and other documents reasonably
necessary to effect the acts contemplated hereby.
17. INTERPRETATION. This Agreement, including any exhibits attached
hereto, shall be construed under and in accordance with and governed by the
internal laws of the State of California. Unless otherwise stated, section
references herein refer to the corresponding provisions of this Agreement.
The captions set forth herein are for convenience only and shall not affect
the meaning of any of the terms of this Agreement. The use herein of the
singular or plural number or any gender shall be deemed interchangeable to
give the subject term the broadest and most appropriate meaning wherever the
sense of this Agreement allows. This Agreement (including incorporated
provisions of the Partnership Agreement) sets forth the entire agreement
between the parties, and no amendment or alteration hereof or change hereto
shall be binding unless the same shall be in writing and signed by both of
the parties hereto.
18. SEVERABILITY. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall to any extent be
held invalid or unenforceable by a court of competent jurisdiction, such
invalidity shall not affect other provisions of this Agreement or the
applications thereof which can be given effect without the invalid provision
or application, and to this end the parties hereto agree that the provisions
of this Agreement are and shall be severable.
19. RIGHTS AND REMEDIES. All rights, privileges and remedies afforded
the parties by this Agreement shall be cumulative
18
and not exclusive, and the exercise of any one of such remedies shall not be
deemed to be a waiver of any other right, remedy or privilege provided for
herein or available at law or equity.
20. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the permitted successors and assigns of the respective parties
and any person claiming by, through or under any of the respective parties or
their respective permitted successors or assigns.
21. SPECIFIC PERFORMANCE AVAILABLE. The failure or refusal by a party
to comply with any or all of the provisions of this Agreement shall entitle
the other party to specific performance of the terms, covenants and
conditions of this Agreement or any part hereof in addition to any and all
other remedies available to such party at law or in equity.
22. NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer, or
be construed as conferring (directly, contingently or otherwise), any rights
or benefits on any Person that is not a party hereto, including any
third-party beneficiary rights.
23. CONSENT OR WAIVER. No consent or waiver, express or implied, by
either party to this Agreement to, of or for any breach or default by the
other party in performance of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or for any other breach or default in
performance by such other party of the same or any other obligation of such
party hereunder. Failure on the part of either party to complain of any act
or failure of the other party to this Agreement 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.
24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
will constitute one and the same Agreement.
19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
OWNER:
PLAZA CAMINO REAL, a California
limited partnership
By: CENTERMARK PROPERTIES, INC.,
a Missouri corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
ATTEST:
----------------------------------
AGENT:
CENTERMARK PROPERTIES, INC.,
a Missouri corporation
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
ATTEST:
----------------------------------
EXHIBIT A
PARCEL A
All that real property situated within the City of Carlsbad, the County
of San Diego, State of California, described as follows:
Those portions of Section 00, Xxxxxxxx 00 Xxxxx, Xxxxx 4 West, San
Bernardino Meridian, according to official plat thereof and of Lots 40, 41,
42 and portions of Lots 39 and 13 through 17 inclusive and of Eucalyptus
Street all of Hosp. Eucalyptus Forest Company's Tract, according to Map
thereof No. 1135, filed in the office of the County Recorder of said County,
described as follows:
Beginning at the Southeast corner of the North Half of the Northeast
Quarter of Section 31; thence along the South line of said North Half, South
89DEG., 17' 09" West, 1304.78 feet; thence South 810.00 feet; thence
South 75DEG. 30' East, 1265.00 feet; thence East 740.00 feet; thence
North 77DEG. 15' East, 840.55 feet more or less to the Westerly line of
El Camino Real (80 Feet wide) as described in deed to the County of San
Diego, recorded April 10, 1945 as Document No. 28857 of Official Records;
thence Northerly along said Westerly line 952.22 feet, more or less to an
angle point in the Southerly line of California State Highway as described in
deed to the State of California, recorded September 8, 1984 as Document No.
163432 of Official Records; thence along the boundary line of said State
Highway as follows: North 7DEG. 09' 55" West, 110.20 feet; North 56
DEG. 32' 58" West, 121.72 feet to a point in the arc of a 150.00 foot
radius curve concave Southerly, a radial line of said curve bears North 28
DEG. 33' 27" East to said point, Westerly along said curve 81.31 feet
through an angle of 31DEG. 03' 27", nontangent to said curve South 89
DEG. 12' 51" West, 167.13 feet to a point in the arc of a 205.00 foot
radius curve concave Southerly, a radial line of said curve bears North 2
DEG. 30' West to said point, Westerly along said curve 125.78 feet through
an angle of 35DEG. 09' 13" to a point of reversed curvature having a
radius of 95.00 feet, Westerly and Northwesterly along said curve 185.96 feet
through an angle of 112DEG. 09' 13" to the Southeast corner of that
easement for drainage purposes granted to the State of California, recorded
September 8, 1984 as Document No. 163432 of Official Records; thence leaving
said curve and said Southerly line of California State Highway along the
Southerly and Westerly lines of said drainage easement, South 74DEG. 30'
West, 138.88 feet and North 15DEG. 19' 26" West, 35.45 feet, more or less
to a point in the Southerly line of the land described under Parcel 1 in deed
to the City of Oceanside, recorded April 20, 1959 as Document No. 77257 of
Official Records; thence South 89DEG. 30' West along the Southerly line
of said Parcel 1 a distance of 615.07 feet, more or less to the Point of
Beginning.
Excepting from said portions of Section 32 above all mineral rights and
all oil, gas, petroleum or other hydrocarbon substances within or underlying
said land without right of surface entry as reserved in deeds from Xxxxxxxxx
Xxxxxx and Xxxxxxxx Xxxxxx, recorded in Book 5699, page 284 of Official
Records and in Book 7712, page 477 of Official Records, and further excepting,
in addition to said reservation in the aforesaid deed, all of the oil, gas
and other minerals and mineral rights in and under said portions of Section
32 lying beneath a depth of 500 feet from the surface of said land, and
reserving the right of entry at any point in such land lying below said depth
for the purpose of exploring, drilling, conveying and removal of any such
substances and installation of equipment and pipelines for such purposes,
provided that any such entry and activity upon said land for such purpose
shall be carried out in such manner as to avoid any interference with the use
of the surface of said land.
