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EXHIBIT 10.qqq
AGREEMENT FOR PURCHASE OF
CONSULTING AND OTHER SERVICES
THIS AGREEMENT made as of the 23 day of January, 1997, by and between
OVERSEAS MANAGEMENT, INC., a Delaware corporation (the "Manager"), and URBAN
RETAIL PROPERTIES CO., a Delaware corporation (the "Consultant"):
WITNESSETH, THAT:
WHEREAS, Manager is the manager of the "Center" (as hereinafter defined)
under the terms of a Management Agreement with Xxxxxx Place Associates, LLC
("Owner") dated as of the date hereof (the "Management Agreement").
WHEREAS, Consultant has prior experience with the operation and management
of the Center, and
WHEREAS, Manager wishes to engage Consultant for the purpose of providing
certain consulting and other services with respect to the management and
operation of the Center.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the
following meanings:
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Section 1.1 "Central Property" means that certain subleasehold interest
in real estate and the retail shopping and office complex with associated
parking located thereon, and easements and appurtenances thereto, commonly known
as "Xxxxxx Place" and situated at the intersection of Dartmouth Street and
Stuart Street, in Boston, Massachusetts.
Section 1.2 The "Dartmouth Street Garage means that certain leasehold
interest in real estate and the improvements located thereon, and easements and
appurtenances thereto, commonly known as the "Dartmouth Street Garage" located
at 000 Xxxxxxxxx Xxxxxx in Boston, Massachusetts.
Section 1.3 The "Center" means the Central Property and the Dartmouth
Street Garage, together with any real property, improvements, personal property
or intangible property now owned or hereafter acquired by Owner or any nominee
of Owner, which relates to the Center.
Section 1.4 "LLC Agreement" means that certain agreement captioned Amended
and Restated Limited Liability Company Agreement of Xxxxxx Place Associates,
LLC, dated as of January _______, 1997, between OPCC (as defined in Section
2.2.5 hereof) and JMB Realty Corporation, a Delaware corporation ("JMB").
ARTICLE II
TERM
Section 2. 1 Duration. Unless earlier terminated as set forth herein, the
term (the "Term") of this Agreement shall commence on the date hereof and shall
continue indefinitely unless terminated as provided herein, except that if under
applicable law a maximum term is required, the Term shall be the maximum term
allowed by law.
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Section 2.2. Termination by Manager. Manager may terminate this Agreement
as provided in this Section 2.2. This Section 2.2 sets forth the sole and only
rights of Manager to terminate this Agreement.
2.2.1. Certain Defaults. Manager may terminate this Agreement by 30
days written notice to Consultant at any time within one year after the
occurrence of a 'Termination Default Event." As used herein, "Termination
Default Event" means (i) the material fraudulent conduct by the Consultant
resulting in material damage to Owner (but unauthorized acts of employees of
Consultant, such as employee theft, will not constitute fraud by the
Consultant), (ii) willful breach of fiduciary duty resulting in material damage
to Owner or Manager, or (iii) the occurrence during any two calendar year
period of three or more Untimely Cured Notice Defaults which cover similar
defaults by the Consultant. As used herein, "Untimely Cured Notice Default'
means the occurrence of a material default by Consultant hereunder and the
failure of Consultant to the cure the same within thirty (30) days after
written notice of such default by Manager (unless the same is a nonmonetary
default which cannot be cured within such thirty (30) day period, in which
event such default will not be an Untimely Cured Notice Default if the
Consultant promptly commences and diligently and continuously pursues to
completion the cure of the same).
2.2.2. Casualty or Condemnation. Manager may terminate this Agreement by
written notice to Consultant in the event that Owner permanently discontinues
the operation of the Center on account of damage to or destruction of, or a
taking by (or a sale under threat of) eminent domain of, a substantial part of
the Center.
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2.2.3. Sale of Center. Manager may terminate this Agreement by written
notice to Consultant in the event that all or substantially all of the Center is
sold or disposed of.
2.2.4. Change in Ownership of Consultant. Manager may terminate this
Agreement by 90 days written notice to Consultant at any time when either (i)
Consultant ceases at any time during the period from January 1, 1997 through
December 31, 1999 to be controlled, directly or indirectly by either JMB Group
(as defined below) or by the REIT (as defined below) or (ii) JMB Group ceases to
own at least the Required Minimum Number of Adjusted Shares. Consultant shall
deliver to Owner a semi-annual certification on or before April 30 (for each of
the quarters ending on December 31 and March 31) and on or before October 31
(for each of the quarters ending on September 30 and June 30) of each year,
certifying that the JMB Group owned, or did not own, at least the Required
Minimum Number of Adjusted Shares, in each case as of March 31, June 30,
September 30 and December 31 of each year and shall deliver a certification on
or before April 30 of each year as to the matters described in (i) above. In
addition, within 30 days after request by Owner from time to time, Consultant
shall provide such certification to Owner and, if requested, such reasonable
evidence verifying such ownership. Owner agrees to keep all such information
received from Consultant hereunder strictly confidential, and shall promptly
return or destroy such information upon Consultant's written request.
(a) "Required Minimum Number" means the lesser of (i) 5,400,000,
which number shall be adjusted to reflect any stock splits or mergers with
respect to the, "REIT" (as hereinafter defined) which occur on or after
December 22, 1996, or (ii) $150,000,000 divided by the then publicly
traded price per share of the common stock of the REIT.
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(b) "Adjusted Shares" means (i) shares of common stock of Urban
Shopping Centers, Inc. or any entity into which Urban Shopping Centers,
Inc. is merged or consolidated (collectively, the "REIT"), (ii) shares of
any other class of stock convertible into shares of common stock of
the REIT (calculated based on the number of shares of common stock of the
REIT into which such other class of stock is convertible), (iii) debt
convertible into shares of common stock of the REIT (calculated based on
the number of shares of common stock of the REIT into which such debt is
convertible), and (iv) any other interest (including, but not limited to,
partnership interests in Urban Shopping Centers, L.P.) which can be
converted into shares of common stock of the REIT (calculated based on the
number of shares of common stock of the REIT into which such interest can
be converted).
(c) "JMB Group" means (i) JMB Realty Corporation, (ii) the present
direct or indirect shareholders of JMB Realty Corporation, (iii) the
parents, siblings, spouses, children, grandchildren and other descendants
of any of the persons described in clause (ii), trusts of which any of the
persons described in clauses (i) and (ii) above are the grantor or a
principal beneficiary, and (iv) any corporation, partnership, limited
liability company or other entity controlled by, under common control
with, or controlling, any of persons or entities described in clauses (i),
(ii), (iii) or (iv) above.
2.2.5. 5-Year Notice if Overseas Exit Occurs. In the event that
there is an "Overseas Exit," Manager may at any time thereafter terminate
this agreement on 5 years notice to Consultant (in which event the term of
this Agreement shall end on the date which is the fifth anniversary of
the date on which such notice is received by Consultant). As used herein,
"Overseas Exit" means the transfer by Overseas Partners Capital Corp., a
Delaware
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corporation ("OPCC"), of its entire interest in Owner to an entity in
which neither OPCC no any "Affiliate" thereof (as defined with respect to
OPCC in the LLC Agreement) own an interest.
2.2.6. 30-Day Notice if Overseas Exit Occurs. In the event there is
an Overseas Exit Manager may at any time thereafter terminate this
agreement on 30 days written notice to Consultant. If Manager gives such
notice, Manager shall pay to Consultant (from its own resources or from
funds supplied by OPCC's successor, and not from funds of Owner) a
termination fee equal to all compensation and reimbursements due to
Consultant hereunder through the date of termination plus 5 times the "Net
Economics' payable to Consultant for the calendar year immediately
preceding the calendar year in which such notice is given. Such
termination fee shall be paid within 30 days after the notice of
termination is given (and the termination shall not be effective unless
Manager pays such termination fee to Consultant). A used herein, "Net
Economics", for a calendar year means the Percentage Fee (as defined in
Schedule 7. 1) required to paid to Consultant hereunder for such year.
2.2.7. Occurrence Of Major Non-Performance Event. Manager may
terminate this Agreement on 30-days written notice ("Major Non-Performance
Termination Notice") to Consultant at any time after the occurrence of a
Major Non-Performance Event, provided however no such termination notice
may be given under this Section 2.2.7 prior to the date which is three
years after the date hereof or after the date on which an Overseas Exit
occurs. If Manager gives such notice, Manager shall pay to Consultant
(from its own resources or from funds supplied by OPCC's successor, and
not from funds of Owner) a termination fee
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equal to all compensation and reimbursements due to Consultant hereunder
through the date of termination plus 3 times the Net Economics paid to
Consultant for the calendar year immediately preceding the calendar year
in which the Major Non-Performance Termination Notice is given. Such
termination fee shall be paid within 15 days after the date on which the
Major NonPerformance Termination Notice is given (and, subject to
Consultant's right to contest same as set forth below, the termination
shall not be effective unless Manager pays such termination fee to
Consultant). As used herein, a 'Major Non-Performance Event" will only be
deemed to occur if all of the following are true: (i) Manager gave a
written notice specifying in detail the failure by Consultant to perform
its obligations hereunder, setting forth the steps Consultant would need
to cure such failure, and stating that such notice is a "Major
Non-Performance Default Notice' given under this Section 2.2.7; (ii) such
failure of performance was believed in good faith by Manager to constitute
a material detriment to Owner; (iii) Consultant failed to take the steps
needed to cure such failure in a manner reasonably satisfactory to Manager
within 30 days after such notice or, if longer, within the time reasonably
needed to achieve such cure (but not in excess of six months unless
impossible to achieve such cure within such six months), and (iv) Manager
has concluded in good faith that its relationship with Consultant is
strained and that the performance of the Center would be substantially
enhanced (for reasons other than a reduction in management fees) by the
termination of Consultant. In the event Consultant accepts the payment of
the Major Non-Performance Termination Fee, (evidenced by Consultant's
failure to return or repay same within 15 days after the date Consultant
receives same) the same shall constitute (i) waiver of an right of
Consultant to dispute whether the alleged Major Non-Performance Event
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occurred, (ii) waiver by Manager and Owner of any right to make a claim
for damages against Consultant on account of this Agreement, including,
without limitation, any of the matters specified in the Major
NonPerformance Default Notice, and (iii) acceptance by Consultant of
liquidated damages for. any claim Consultant may have against Manager or
Owner on account of this Agreement, including, without limitation, any
wrongful termination hereof. Without limitation on the foregoing, the
acceptance of the Major Non-Performance Termination Fee will not
constitute an admission by Consultant of any matter or thing.
2.2.8 Occurrence of Transfer to Non-JMB Affiliate. Manager may
terminate this Agreement on 30 days' written notice to Consultant at any
time after the interest of JMB in Owner has been transferred to an entity
which is not an "Affiliate" of JMB or of "Urban Shopping Centers" (such
quoted terms as defined in the LLC Agreement).
2.2.9 Certain Consequences of Termination. In the event of the
termination of the Management Agreement pursuant to Sections 2.2. 1 (a) or
2.2. 1 (d) thereof, and if immediately prior to such termination this
Agreement is still in effect, then Owner and Consultant shall immediately
enter into a new Management Agreement (the "New Agreement"), identical to
the Management Agreement (except as provided in the next sentence), and
this Agreement shall continue in full force and effect. The New Agreement
shall provide that (i) the New Agreement shall continue until, but shall
terminate on, the date on which this Agreement is terminated in accordance
with the terms hereof (and, accordingly, there shall be no termination
right by Owner as to the New Agreement other than the termination of this
Agreement in accordance with the terms hereof, (ii) in the event that
under the terms of this Agreement, the manager under the New Agreement (in
its capacity as manager) has the right to terminate this Agreement, such
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termination right may be exercised by Owner (with the Managing Member of
Owner responsible to pay all sums owing to Consultant with respect to such
termination of this Agreement), (iii) this Agreement and the New Agreement
shall, at the election of either Owner or Consultant, be consolidated into
a single agreement (but if Owner and Consultant are unable to agree upon
the form of such consolidated agreement, then such agreements will not be
consolidated but rather shall each remain in full force and effect).
2.2.10 Termination of Management Agreement by Manager. In the event
that at the time of termination of the Management Agreement by Manager
under Section 2.3 thereof this Agreement has not theretofore terminated,
Owner shall promptly give Consultant notice. of Manager's election to so
terminate, and Consultant shall have the right to elect, by giving written
notice to Owner and Manager at least 30 days prior to such specified date
for termination, to cause Manager to assign Manager's right, title and
interest in the Management Agreement to Consultant on the date which
Manager otherwise proposed for termination, in which event the Management
Agreement shall not terminate on such date but rather shall continue
thereafter with Consultant acting as Manager thereunder (as well as acting
as Consultant under this Agreement). In the event of such assignment (i)
the Management Agreement shall continue until, but shall terminate on, the
date on which this Agreement is terminated in accordance with the terms
hereof (and, accordingly, there shall be no termination right by Owner as
to the Management Agreement other than the termination of this Agreement
in accordance with the terms hereof), (ii) in the event that under the
terms of this Agreement, Manager (in its capacity as Manager) has the
right to terminate this Agreement, such termination right may be exercised
by Owner (with the Managing Member of Owner responsible to pay all sums
owing to Consultant with respect to
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such termination of this Agreement), and (iii) the Management Agreement
and this Agreement shall, at the election of either Owner or Consultant,
be consolidated into a single agreement (but if Owner and Consultant are
unable to agree upon the form of such consolidated agreement, then such
agreements will not be consolidated but rather shall each remain in full
force and effect).
Section 2.3 Termination by Consultant. At any time Consultant may
elect to terminate this Agreement by giving at least 120 days' prior
written notice to Manager, in which event this Agreement shall terminate
on the date for termination specified in such notice.
Section 2.4 Effect of Termination. Termination of this Agreement
shall terminate all rights and obligations of the parties hereunder
(except that such termination shall not affect the rights and obligations
of the parties arising prior to the effective date of such termination and
shall not prejudice the rights of either party against the other for any
prior breach of this Agreement, except to the extent set forth in Section
2.2.7 above). Without limitation on the generality of the foregoing:
2.4.1 Termination of this Agreement shall terminate any and all
rights of Consultant to act in such capacity on behalf of or with respect
to the Center (and Consultant shall, if Manager so requests, execute a
notice to third parties that such rights of Consultant have been so
terminated).
2.4.2 Manager's termination of this Agreement pursuant to Section
2.2. (other than a termination under Section 2.2.7) or the termination of
this Agreement by Consultant pursuant to Section 2.3 hereof shall in no
way preclude Manager from recovering hereunder for its loss or damage
resulting from the default or breach of Consultant, or from recovering
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Consultant any sums due hereunder to Owner or Manager with respect to the
period prior to the effective date of termination.
Section 2.5 Final Accounting. Upon the termination of this Agreement
(whether upon expiration of the. Term or an earlier termination as herein
provided), Consultant shall within ten (1O) business days provide or
deliver to Owner and Manager (a) to the extent Consultant is then
responsible for providing property accounting services hereunder, a final
accounting of the operations of the Center for the period since the
most-recent previous accounting so provided by Consultant; (b) all monies
of Owner or Manager held or controlled by Consultant with respect to the
Center which Consultant is not entitled by this Agreement to disburse to
itself; (c) as received, any monies due Owner or Manager under this
Agreement with respect to the Center, but received by Consultant after
such termination; (d) all materials, supplies, keys, contracts, leases,
documents and accounting papers (other than those relating solely to
Consultant's own business and affairs) possessed by Consultant with
respect to the Center; and (e) a duly executed and acknowledged assignment
of all rights Consultant may have in and to any existing assignable
contracts relating to the operation and maintenance of the Center, and
Manager shall assume and agree to hold Consultant harmless from all of
Consultant's obligations thereunder, except to the extent that the
existence thereof is contrary to any provision of this Agreement or the
same are expressly required to be retained by Consultant under the
provisions of this Agreement. To the extent not previously paid by Manager
or Owner, or disbursed by Consultant to itself as herein provided, Manager
shall pay all compensation due to Consultant hereunder though the date of
termination within ten (1O) business days thereafter. Manager shall also
thereafter cause Owner to pay Consultant, within ten (1O) business days of
receipt of reasonable
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evidence thereof, for any other costs and expenses (including, without
limitation, Reimbursable Costs, as defined in Schedule 7.1) which were
properly incurred by Consultant on behalf of Owner prior to the date of
termination and not reimbursed to Consultant.
ARTICLE III
SCOPE OF SERVICES
Section 3. 1 Scope of Services. On and subject to the terms hereof
and subject always to the supervision and control of Manager, Consultant
shall perform or cause to be performed the services and functions
described in this Agreement (the "Services"), as agent on behalf of Owner
and Manager. Consultant may subcontract any of such Services to Affiliates
of Consultant (as defined in Schedule 7.1 hereof), or, subject to the
prior written approval of Manager, to other entities. Without limitation
on the general nature of the foregoing, subject to the supervision and
control of Manager, Manager hereby appoints Consultant as the exclusive
leasing agent for the retail space in the Center, to act in such capacity
as agent for Owner and Manager as further set forth herein.
Section 3.2 Amendments. The scope of Services and the fees and
charges payable therefor may not be amended except by the written
agreement of Manager and Consultant.
Section 3.3 Subject to Management Agreement. Manager has provided
Consultant with a true and correct copy of the Management Agreement and
shall promptly provide Consultant with all amendments and modifications
thereto which hereafter become effective. Nothing in this Agreement shall
authorize or require Consultant to take any action on behalf of Owner or
Manager which would constitute a default by Manager under the Management
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Agreement if performed by Manager, without the prior written consent of
both Owner and Manager.
Section 3.4 Action By Owner and Manager. For purposes of this
Agreement, all (respecting Manager only) or Property Manager (respecting
Manager only) of Manager or of the Managing Member of Owner shall be
conclusively deemed to be the authorized action of Owner or Manager, as
applicable.
ARTICLE IV
ANNUAL BUDGET
Section 4.1 Preparation of Budget: Contents. At least 90 days prior
to the first day of each calendar year during the Term, Consultant shall
prepare and submit to the Manager and Owner a budget (the "Annual Budget)
substantially in the form and with such detail as Consultant customarily
provides for its third-party clients (other than 1997, as to which such
budget shall be prepared and submitted as soon as practicable after the
date hereof). With respect to matters which are not within the scope of
Consultant's duties and obligations hereunder, Manager agrees to cooperate
with Consultant to provide the information necessary to complete the
Annual Budget on a timely basis. The Annual Budget shall include, among
other matters:
4.1.1 Operating Budget. An operating budget which shall set forth,
among other matters, anticipated operating income, expenses and reserve
requirements for such year. The Annual Budget shall not contain provisions
for costs or expenses required by Schedule 7.1 hereof to be paid by
Consultant without reimbursement hereunder. The Annual Budget shall
provide for a contingency amount of at least 5 % of the total operating
expenditures (other than
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"Fixed Obligations," as defined below and non-cash items) set forth in
the "Approved Annual Budget" (as hereinafter defined) in the aggregate
which may be disbursed by Consultant to the extent otherwise permitted
hereunder. Obligations (other than Fixed Obligations) so incurred by
Consultant on behalf of Owner in excess of the amount of such obligations
provided for in the Approved Annual Budget and not specifically otherwise
approved by Owner shall be applied against the contingency amount, and the
balance from time to time of such contingency amount is hereinafter
sometimes referred to as the uncommitted portion of the contingency
amount. Manager and Consultant shall consult and cooperate in good faith
to determine which expenditures of Consultant hereunder or by Manager
under the Management Agreement shall be applied against the uncommitted
contingency amount. The term "Fixed Obligations" shall mean obligations
for real estate taxes, debt service and utilities.
4.1.2 Capital Budget. A capital budget which shall set forth, among
other matters, anticipated and proposed capital expenditures for such year
and the source of funds in respect thereto.
4.1.3 Leasing Plan. A statement of the retail space Consultant
projects to be leased during such year, the minimum rent and percentage
rent it projects to obtain for such space and the other material economic
provisions of the tenant leases (including, but not limited to, the
contributions to ad valorem taxes, common area expenses and the escalation
provisions and any commissions or similar fees payable by reason of new or
existing leases, and all tenant improvement costs and expenses to be borne
by Owner in connection with tenant leases).
4.1.4 Staffing Plan. A statement of the number, identity and
categories of staffing to be employed on-site by Consultant (either in its
capacity as Consultant or as agent
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for Owner) and the Manager, including salary levels and benefits for each.
To the extent Consultant or Manager employ subcontractors to perform any
of their respective duties and obligations, the staffing plan shall also
include an estimate of the number and categories of staffing to be
employed on-site by each such subcontractor.
Section 4.2 Budget Updates. The Annual Budget for a year shall be
updated on or about the first day of July of such year by Consultant to
reflect any changes indicated by the actual results of operations, and
such update shall be submitted to the Manager promptly thereafter. Manager
shall provide Consultant with such information as Consultant reasonably
requires concerning Manager's operations in order to satisfy Consultant's
obligations under this Section 4.2.
Section 4.3 Approval of Budget. The term "Approved Annual Budget"
shall mean the Annual Budget (as revised by revisions thereof approved by
Owner and Manager in accordance with the provisions hereof, the Management
Agreement and, to the extent applicable, the LLC Agreement. An Annual
Budget or a revision thereof shall be deemed approved by Manager and Owner
only if it is approved in writing by each of Manager and Owner. Nothing in
the Annual Budget submitted by Consultant to Manager hereunder shall be
binding upon Owner (or any member of Owner) until the Annual Budget is
approved by Owner as aforesaid.
Section 4.4 Obligation and Authority to Implement Budget. Consultant
shall be authorized, without the need for further approval from either
Owner or Manager, to make the expenditures and incur the obligations
(other than debt service) provided for in the most recent Approved Annual
Budget for the areas of responsibility included within the Services, as
agent for the Manager and Owner (but only if the Consultant acts
substantially in conformance with the
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Approved Annual Budget, including any contingency amount provided therein)
and to make all expenditures required with respect to real estate taxes,
utilities and debt service (hereinafter "Fixed Obligations"). The
Consultant shall have no authority to, and shall not, make any expenditure
or incur any obligation in excess of the amount set forth in the Approved
Annual Budget for such item (or any uncommitted portion of the contingency
amount) without the prior written approval of the Manager or Owner in each
instance. It is understood that non-cash items, such as depreciation and
amortization, may be reflected in the Approved Annual Budget and that
variances between the amounts so reflected in the Approved Annual Budget
and the actual amounts of such items shall not affect or limit the amounts
of other liabilities and obligations which Consultant may incur and pay on
behalf of Owner hereunder. Nothing in this Article IV shall in any manner
serve to limit the compensation to which Consultant is entitled pursuant
to Article VII of this Agreement.
ARTICLE V
THE CONSULTANT'S SERVICES
Section 5.1 Standard of Performance. Subject to Manager's
supervision and control, Consultant agrees, in performing the Services
hereunder, directly or indirectly through permitted subcontractors, to use
that level of skill, competence and diligence as is used by first class
management and leasing firms in the Boston, Massachusetts area with
respect to similar properties, except to the extent such performance IS
impeded by the failure of Manager to perform under the Management
Agreement. Subject to and in furtherance of the foregoing, and except with
respect to these services to be performed by Manager under the Management
Agreement, the Consultant shall, with respect to the Center, perform or
cause to be performed
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such services as are customarily performed with respect to similar
properties by such management and leasing firms in connection with the
services set forth in this Article V.
Section 5.2 Property Accounting: Books and Records. Except to the
extent performed and maintained by Manager pursuant to the Management
Agreement, Consultant shall perform customary property accounting services
and shall maintain at the Center or at such other location as the Manager
shall approve and for so long as the Manager shall require during the term
hereof, the records, books and accounts of Owner with respect to the
management and operation of the Center. Owner and Manager shall have the
rights set forth in Section 7.5 with respect to such books and records.
Section 5.3 Employment of On-Site Personnel. Except for those
persons employed by Manager pursuant to the Management Agreement (or
persons employed by permitted subcontractors of either Manager or
Consultant), all on-site personnel as may be required for the proposed
operation and maintenance of the Center, including, but not limited to,
clerical, and management personnel, and grounds keeping, janitorial,
parking, maintenance, and custodial employees shall be employees of Owner;
provided, however, that subject to Owner's prior approval, Consultant may
in its reasonable discretion, employ and/or provide payroll and benefits
services with respect to such employees, as agent for Owner, so long as
Owner pays the full cost to Consultant therefor, with respect to the
operations of the Center. Regardless of whether such persons shall be
employees of Owner or Consultant, Consultant shall in those areas within
its scope of services hereunder, as agent for Owner and Manager, select,
hire, pay (or cause to be paid), supervise, direct and discharge all such
employees and procure and keep in force workers' compensation insurance
(and, when required by law, compulsory
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nonoccupational disability insurance) covering such employees. At the
request of Owner, all employees of Owner or Consultant as hereinbefore
provided, or of permitted subcontractors of Consultant, charged with the
handling of funds of Owner, shall be covered by fidelity bonds in amounts
reasonably acceptable to Manager.
Section 5.4 Maintenance and Rel2airs. Manager shall be responsible
pursuant to the Management Agreement to maintain the Center in a good,
condition and to perform all repairs, maintenance and decorating with
respect thereto. Consultant shall have no responsibility for any of the
foregoing; provided, however, that one of the employees employed pursuant
to Section 5.3 shall be a maintenance supervisor who, subject to the
direction and control of Manager, shall use reasonable efforts to monitor,
supervise and cooperate with Manager concerning the maintenance and repair
responsibilities of Manager's subcontractors. Consultant shall have no
obligation to perform emergency work but shall use reasonable efforts to
inform Manager of any circumstances of which Manager may not be aware
which may require such emergency work to be performed.
Section 5.5 Insurance. If and so long as the Manager so elects, the
Consultant shall (and, if Manager does not so elect, Manager shall)
procure and maintain insurance (in form and with coverages, limits,
endorsements, waivers and deductibles and with insurance companies
designated or Approved by the Owner, and to the extent required by any
mortgagee of the Center), naming the Owner, the Manager, the members of
the Owner, and the Consultant as named insureds thereunder, provided,
that, such insurance shall at a minimum include the following (whether
procured by Manager or Consultant):
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(a) All-Risk Insurance. Insurance against loss or damage to the
Center by fire and any of the risks covered by insurance of the type now
known as broad from "all risk" coverage (including theft coverage) in an
amount not less than the full replacement cost of the Center, without
deducting for physical depreciation; such insurance to include a
"Replacement Cost Endorsement," together with (i) a stipulated value or
agreed amount endorsement deleting the coinsurance provision of such
policy or policies of insurance, (ii) a waiver of subrogation endorsement,
(iii) coverage for demolition, (iv) an endorsement for increased cost of
construction, occasioned by operation of any law or ordinance regulating,
the construction, use or repair of the Center, and (v) if such insurance
is not part of a blanket program, such other endorsements as may be
requested by Owner.
(b) Public Liability Insurance. Automobile liability insurance
covering owned, hired and non-owned vehicles, with separate coverage and
with liability limits of not less than $5,000,000 combined single limit.
Commercial General Liability Insurance coverage with a minimum combined
single limit of at least Five Million Dollars ($5,000,000) and a general
aggregate limit of Fifteen Million Dollars ($15,000,000), with broad form
property damage coverage.
(c) Rental Income Insurance. Business interruption and/or loss of
rental value insurance in an amount not less than 100% of the projected
rental income from the Center for 12 months. The perils insured against
under such insurance shall be the same as provided in subsection (a)
above, and such insurance shall not have a co-insurance or contribution
clause.
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(d) Mandatory Insurance. Workers' compensation, including employer's
liability, with a limit of not less than One Million Dollars ($ 1,000,000)
and all other insurance required by any ordinance, law or governmental
regulation or by any of Owner's lenders.
(e) Boiler and Machinery Insurance. Mechanical breakdown insurance
(also known as "boiler and machinery insurance) covering pressure vessels,
air tanks, boilers, machinery, pressure piping, heating, air conditioning
and elevator equipment and escalator equipment and insurance against loss
of occupancy or use arising from any such breakdown, in such amounts and
with such deductibles as are reasonably satisfactory to Consultant.
All insurance coverage required to be provided by the foregoing
provisions of this Section 5.5 shall provide for thirty (30) days' notice
of cancellation or material change and be placed with such carriers and
through such insurance broker or agency as the Owner or the Manager may
from time to time hereafter designate by written notice to the Consultant;
provided, however, that such insurance shall continue to be carried under
the existing blanket coverage policies in which the Center currently
participates, through May 31, 1997.
Section 5.6 Collection and Disbursement of Revenue. If and so long
as Manager shall so elect, Consultant shall collect rent and all other
revenue from the Center and deposit the same (other than security
deposits) promptly in an interest-bearing bank account (the "Operating
Account") established by Manager, which account shall be maintained by
Manager in trust for Owner. As further set forth elsewhere in this
Agreement, Consultant, Manager and Owner shall each be authorized and
entitled to withdraw funds from the Operating Account, but all such money
shall be deemed to be the property of Owner. Such monies of Owner shall
not be commingled with the funds of Consultant. Consultant may withdraw
from the Operating
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Account (subject to the limitations set forth in this Agreement)
disbursements required or permitted to be made under this Agreement;
provided, however, that except as otherwise agreed in writing by Manager
or as expressly provided herein, disbursements by Consultant out of the
Operating Account shall be limited to the purposes set forth in the
Approved Annual Budget (including any contingency amount applicable
thereto) and to the amounts for such purposes which do not exceed the
corresponding sums allocated to the same in the Approved Annual Budget and
to the payment of Fixed Obligations. At Manager's election (provided that
Manager provides Consultant with any information in Manager's possession
necessary to do so), Consultant shall render monthly reports to the Owner
and Manager, in such form as is reasonably acceptable to Manager, showing
all receipts and disbursements, received or made by Consultant and Manager
on behalf of Owner for the preceding calendar month (and, if requested by
Manager, will make available to Owner or Manager for its inspection, and
will permit Owner or Manager to make copies of, bills, invoices and other
information in Consultant's possession or control in connection therewith)
on or before the 20th day of each month.
Section 5.7 Security Deposits. Unless Manager elects by written
notice to Consultant to perform such duties, Consultant shall deposit all
security deposits for the Center in a separate interest-bearing project
account (the "Security Account") in the name of the Manager on which any
of Owner, Manager or Consultant may draw. Consultant shall be authorized
to withdraw monies from the Security Account at such time as the security
deposits are returnable to tenants or in the event of a t6nant default (in
which case such monies shall be deposited by Consultant into the Operating
Account). It is expressly understood and agreed that all disbursements,
transfers and refunds made by Consultant from the Security Account shall
be
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made by a check drawn on the Security Account or appropriate journal or
bookkeeping entries and shall be substantiated by appropriate records and
accounting procedures. The funds in the Security Account, or the amount
thereof requested by Owner, shall be delivered to Owner upon Owner's
request.
Section 5.8 Payments. Except as otherwise directed from time to time
by Owner or Manager, Consultant shall make or cause to be made (but, only
to the extent of funds in the Operating Account or to the extent Owner
provides to Consultant the funds therefor) the payment when due of all
obligations of Owner incurred by Consultant on Owner's behalf hereunder,
the existence of which were approved by Owner or which were incurred in
accordance with the provisions hereof
Section 5.9 Compliance.
5.9.1 In General. Consultant shall use reasonable efforts at
the cost of Owner to cause Owner and the Center to be in compliance
with all laws applicable to the Center or any part thereof with
respect to the Services provided by Consultant hereunder, and
subject to the supervision and control of Manager, to cause tenants
of the Center to comply with all material covenants, conditions,
restrictions, limitations and requirements of every kind or nature
which relate to the Center or any part thereof or which are imposed
by any lease, contract or instrument to which the Center or Owner is
now subject or hereafter becomes subject. Manager and Consultant
shall promptly notify one another of any failure to so comply,
including violations relative to the leasing, use, repair and
maintenance of the Center under governmental laws, rules,
regulations, ordinances or like provisions, of which either of them
receives notice or knowledge.
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Section 5.10 Contracts and Leases.
5.10.1 Service Contracts. Consultant may, as agent for Owner, with
the prior written consent of the Manager, to the extent the obligations of the
Owner thereunder do not exceed the amounts provided for in the Approved Annual
Budget (plus any uncommitted contingency amount), negotiate and enter into
service contracts for the operation of the Center respecting those functions
which are not listed above and are not expressly the responsibility of Manager
pursuant to Section 5.1.0 of the Management Agreement, for terms no longer than
one year including, without limitation, for electricity, gas, fuel, water,
telephone, window cleaning, ash or rubbish hauling, vermin extermination,
security and such other supplies, services and other matters for the Center as
Consultant shall reasonably deem to be advisable.
5.10.2 Leases. Subject to the supervision and control of Manager,
and subject to subsequent provisions of this Section, Consultant shall use
diligent efforts to market for lease and to rent and keep rented the retail
portions of the Center by actively seeking out, on both a national and local
basis, and procuring, tenants in accordance with the Approved Annual Budget
(including the Leasing Plan set forth therein), or as otherwise approved by
Manager in writing. Without limitation on the foregoing, Consultant shall
negotiate, on behalf of Owner, in accordance with the Approved Annual Budget (or
as otherwise approved by Owner or Manager in writing), all retail leases and
related agreements for space in the retail areas of the Center, together with
any amendments, cancellations, renewals or extensions thereof (all such leases,
agreements, amendments, cancellations, renewals or extensions now existing or
hereafter entered into being herein individually and collectively referred to as
a "Lease" or "Leases"). Consultant shall have no right to execute on behalf of
Owner any Lease, amendment of Lease or
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cancellation of Lease, and shall at no time represent or hold itself out
as having such authority. Each proposed Lease shall be delivered by
Consultant to Manager for review and for execution by or on behalf of
Owner. If any Lease, operating agreement or other document or instrument
affecting the Center requires the consent of a third party to a proposed
Lease, Consultant will not, without Manager's prior written consent, in
each instance, attempt to obtain such third-party consent. Each Lease will
set forth expressly any provision required to be set forth in the same
under the provisions of the air rights or other leases or subleases
governing, from time to time, the Center or any part thereof. Upon
execution of any such Lease, Manager shall deliver to Consultant a
fully-executed copy thereof. To the extent requested by Manager,
Consultant shall perform any necessary tenant coordination services with
respect to any such Lease.
5.10.3 Other Contracts. Consultant, in its capacity as such, shall
not enter into any other contract or agreement on behalf of Owner, unless
the same is consented to in writing in advance by Owner or Manager or is
otherwise expressly authorized hereby.
Section 5.11 Legal Action. Consultant shall, on behalf of and at the
cost of Owner and subject to the supervision and control of Manager,
institute all necessary legal action or proceedings for the collection of
rent from the Center, for the ousting or dispossessing of tenants or other
persons therefrom or for other matters related to tenants, or respecting
service contracts entered into by Consultant on Owner's behalf hereunder.
Notwithstanding the foregoing, Consultant shall give Manager written
notice of its intention to file any lawsuit for any of the foregoing
matters, other than for the collection of rent, at least ten (1O) days
before it files such lawsuit and shall not institute such lawsuit if
Manager objects thereto. In addition, Consultant shall promptly notify
Manager of any lawsuit or threat thereof involving or affecting the Center
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of which Consultant receives notice or knowledge. Except with respect to
the collection of rent, Consultant shall not (without the prior written
consent of Manager) threaten to (a) institute a lawsuit, (b) refer any
matter to a collection agency, or (c) report any delinquency to a credit
reporting entity (Consultant agreeing to request Manager's consent that
such action be taken when the Consultant determines that such action is
appropriate).
Section 5.12 Tenant Requests. Consultant shall receive and promptly
respond to complaints: and requests of tenants, keeping Manager
reasonably informed at all times. To the extent any such complaints or
requests relate to services which are provided by Manager under the
Management Agreement, Consultant shall refer such complaint or request to
Manager for action. Systematic records shall be maintained by Manager or
Consultant@ as applicable, showing the action taken with respect to each
complaint or request. Complaints or requests of a material nature shall be
promptly reported in writing by Consultant and Manager to the other.
Consultant or Manager, as applicable, shall include in such written report
to the Manager all relevant details and appropriate recommendations.
Section 5.13 Impounds and Capital Reserves. In the event that under
the terms or provisions of any mortgage to which the Center is subject,
the mortgagor is required to deposit in installments an amount against or
based upon taxes, insurance premiums or other sums, then, to the extent
Owner provides the funds therefor, Consultant shall open appropriate
impound accounts in the name of Owner or lender (if required under such
mortgage) and make such deposits unless Manager notifies Consultant that
Manager shall perform such function.
Section 5.14 Security. Consultant shall provide security personnel
and services for the Center (either directly or on through approved
subcontractors), and such devices and programs
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with respect thereto, as Consultant reasonably believes is necessary for
the safety of visitors to the Center. Such services shall not include any
responsibility for the protection of property. Manager and Owner hereby
each acknowledge and agree that such safety or security services, devices
and programs-provided by Consultant, while intended to deter crime and
enhance safety, may not in given instances prevent theft or other
injurious acts or ensure safety of parties or property and that consultant
assumes no liability to Owner, Manager or any other person or entity
for the failure or circumvention thereof. Manager and Owner each agree to
cooperate in any safety or security program developed or implemented by
Consultant hereunder.
Section 5.15 Marketing: Customer and Visitor Services: Public
Relations. To the extent provided for in the Approved Annual Budget,
Consultant shall, as agent for Manager and Owner, provide marketing,
customer service, concierge information, public relations, advertising and
promotional services for the retail portion of the Center and otherwise as
requested by Manager.'
Section 5.16 Periodic Reporting. Consultant shall make such further
periodic reports of its doings to Manager as Manager and Consultant shall
agree from time to time to provide Manager with current and updated
information on the operation of the Center as to those areas within the
scope of this Agreement.
ARTICLE VI
BEARING OF EXPENSES: PAYMENT OF COMPENSATION
Section 6.1 Use of Operating Account. To the extent there are
adequate funds available therein, the Operating Account shall be used to
pay any and all direct or indirect expenses or Reimbursable Costs (as
defined in Schedule 7. 1) of the Owner relative to the
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operation of the Center. This shall include, without limitation, those
costs and expenses incurred by Consultant on behalf of Owner hereunder and
those costs and expenses incurred by Manager on behalf of Owner as set
forth in the Management Agreement, in each case to the extent authorized
herein and therein. The right of Consultant to withdraw funds from the
Operating Account for the purposes set forth herein is a material
inducement to Consultant to enter into this Agreement, and is a material
factor in Consultant's ability to perform hereunder. Therefore, Manager
and Owner hereby each agree that, until the termination of this Agreement
as set forth herein, appropriate representatives of Consultant shall have
authority to withdraw funds from the Operating Account for the payment of
such direct expenses and Reimbursable Costs, and Manager and Consultant
agree to coordinate with each other and keep each other reasonably
informed with respect to their activities relative to the Operating
Account. Consultant hereby acknowledges and agrees that Manager, pursuant
to the Management Agreement, and Owner shall also have concurrent
authority to withdraw funds from the Operating Account for similar
purposes.
Section 6.2 Payment of Consultant's Compensation. The compensation
of Consultant provided in Article VII hereof shall be payable as follows.
On or before the fifth day of each calendar month, Consultant shall be
entitled to the compensation determined under Article VII with respect to
the payments received by or on behalf of the Owner during the preceding
calendar month. In addition, the Consultant shall be entitled to
reimbursement for any Reimbursable Costs immediately upon incurring them
on behalf of Owner. Manager and Owner each hereby agree that Consultant
may disburse such compensation and Reimbursable Costs to itself during the
term hereof, and that to the extent such compensation is payable by
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Manager rather than Owner, such disbursements shall serve as a credit for
owner against the fees payable by Owner under the Management Agreement. To
the extent Manager has insufficient funds (or receivables from Owner
subject to credit as aforesaid) to cover the amounts payable to Consultant
hereunder, Owner agrees that it shall be responsible for the payment of
any remaining amounts so due to Consultant, immediately upon demand, with
a right of contribution against Manager with respect thereto.
Section 6.3 No Obligation To Advance Funds. Owner and Manager hereby
agree that any excess of the compensation, Reimbursable Costs and other
costs and expenses payable to or incurred by Consultant, on behalf of
Owner in' discharging its obligations and duties hereunder, over the
balance available in the Operating Account for the satisfaction thereof
shall be borne solely by Owner, and Consultant shall not be obligated to
advance its funds therefor, except for those expenses which are to be
borne solely by Consultant as set forth in Schedule 7. 1. To the extent
Owner fails to make funds available to Consultant for the payment of such
items, Consultant shall be excused from such performance hereunder as
relates to such failure, provided that the foregoing shall in no event
excuse Manager from its obligation to pay Consultant the compensation set
forth in Article VII hereof.
ARTICLE VII
COMPENSATION
Section 7.1 Basic Compensation. As compensation for performing the
Services described herein during the entire Tenn, Manager shall pay
Consultant a fee, consisting of the Percentage Fee as set forth in
Schedule 7.1 hereof, hereby incorporated herein by this reference, as it
may be amended by the written agreement of the parties from time to time.
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Section 7.2 Office Space, Furniture and Equipment. Manager shall
provide no less than 2300 square feet of office space for Consultant
within the Center, rent free, to serve as Consultant's on-site office for
the performance of Consultant's duties and obligations hereunder, which
shall be contiguous to Manager's on-site office. The reasonable cost of
furnishing and equipping, and the direct costs of operating, such office,
including, without limitation, utilities, telephone and office supplies,
shall be borne solely by Owner, and shall be limited to the extent
provided in the Approved Annual Budget except as otherwise approved by
Owner.
Section 7.3 Reimbursable Costs. Consultant may pay directly out of
the Operating Account, or shall be reimbursed by Owner for, the
Reimbursable Costs set forth in Schedule 7.1 and other direct or indirect
costs and expenses, to the extent such costs are authorized to be incurred
by Consultant hereunder, such payment or reimbursement to be made as set
forth in Section 6.2 above.
Section 7.4 No Other Compensation. Consultant shall receive no
compensation or reimbursement of any kind or nature for or during the Term
for services performed under this Agreement, except as otherwise expressly
provided in this Agreement. Without limitation on the generality of the
foregoing, (1) no leasing commissions shall be payable to Consultant, and
(2) if Consultant, in its capacity as such, performs any special service
or work for a tenant not required hereunder, Consultant's profit therefor
shall belong to the Owner.
Section 7.5 Audit. Notwithstanding anything in this Agreement to the
contrary, Manager and Owner and their respective representatives shall
each have the right at any time, upon three (3) days prior written notice
to Consultant, to audit any of the books and records of
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Owner maintained by Consultant, including any expenses or payments made or
revenue or other payments received by or on behalf of Owner with respect to this
Agreement or the Center, and Consultant agrees to surrender such books and
records to Manager upon the termination hereof, provided, however, that
Consultant shall be entitled to retain a copy thereof.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Joint Venture. This Agreement shall not be construed as
effecting a partnership or joint venture between either Owner or Manager, on the
one hand, and Consultant on the other hand.
Section 8.2 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, provided that Consultant shall not be entitled to assign this
Agreement without the prior written consent of Manager, except to an Affiliate
(as defined in Schedule 7.1) or to the extent permitted under Section 3.1 or
Schedule 7.1.
Section 8.3 Owner Indemnity. Owner shall protect, defend, indemnify and
hold Consultant harmless from and against any and all loss, cost, damage,
liability and expense (including court costs and reasonable attorneys' fees)
arising out of the performance by Consultant of its obligations and duties
hereunder, it being expressly understood that Owner does not hereby agree to,
and shall not, so indemnify Consultant from any such loss, cost, damage,
liability or expense arising out of the act or omission of Consultant or any of
its agents, employees or other representatives which is grossly negligent,
tortious (excluding
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ordinary negligence) in breach of this Agreement or outside the scope of
Manager's authority as provided herein.
Section 8.4 Consultant Indemnity. To the extent they shall not be
compensated for the same by insurance proceeds, Consultant shall protect,
defend, indemnify and hold Owner, Manager, the members of Owner and the Center
harmless from and against any and all loss, cost, damage, liability and expense
(including court costs and reasonable attorneys' fees) arising out of the
failure of Consultant or any of its agents, officers, employees or
representatives to comply with or perform Consultant's duties and obligations
under this Agreement in accordance with the terms hereof or by reason of any act
or omission of Consultant or any of its agents, officers, employees or
representatives which is grossly negligent, tortious (excluding ordinary
negligence) or outside the scope of Consultant's authority as provided herein.
Section 8.5 Cumulative Remedies. The rights and remedies of the parties
hereto shall not be mutually exclusive, i.e., the exercise of one or more of the
provisions hereof shall not preclude the exercise of any other provision hereof.
However, Consultant shall not be liable to Manager hereunder for ordinary
negligence.
Section 8.6 Attorney's Fees. If either party obtains a judgment against
the other party by reason of breach of this Agreement, a reasonable attorneys'
fee, as fixed by the court, shall be included in such judgment.
Section 8.7 No Waiver. Time is of the essence of this Agreement. No waiver
by either party of any default of the other party or of any event, circumstance
or condition permitting a party to terminate this Agreement shall constitute a
waiver of any other default of the other party or of any other event,
circumstance or condition permitting such termination,
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whether of the same or of any other nature or type and whether preceding,
concurrent or succeeding; and no failure on the part of either party to exercise
any right it may have by the terms hereof or by law upon the default of the
other party and no delay in the exercise of such right shall prevent the
exercise thereof by the nondefaulting party at any time when the other party may
continue to be so in default, and no such failure or delay and no waiver of
default shall operate as a waiver of any other default, or as a modification in
any respect of the provisions of this Agreement. The subsequent acceptance of
any payment or performance pursuant to this Agreement shall not constitute a
waiver of any preceding default by a defaulting party or of any preceding event,
circumstance or condition permitting termination hereunder, other than default
in the payment of the particular payment or the performance of the particular
matter so accepted, regardless of the nondefaulting party's knowledge of the
preceding default or the preceding event, circumstance or condition, at the time
of accepting such payment or performance, nor shall the nondefaulting party's
acceptance of such payment or performance after termination constitute a
reinstatement, extension or renewal of this Agreement or revocation of any
notice or other act by the nondefaulting party.
Section 8.8 Integration: Amendment. This Agreement, including the exhibits
attached hereto, constitutes the entire agreement between the parties hereto
relative to the subject matter hereof. Any prior negotiations, correspondence or
understandings relative to the subject matter hereof shall be deemed to be
merged in this Agreement. This Agreement may not be amended or modified except
in writing, executed by each of the parties hereto. No waiver of any provision
of this Agreement shall be effective unless signed by the party against whom the
waiver is asserted.
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Section 8.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts.
Section 8.10 Notices. All notices and other communications provided for in
this Agreement shall be in writing and may be sent by telephone facsimile or may
be personally delivered or mailed by certified or registered United States mail,
return receipt requested, postage prepaid and addressed as follows:
(a) If to the Manager, to:
Overseas Management, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Legal Department
(Facsimile No: 770-913-6756)
with a copy to:
Overseas Partners, Ltd.
Xxxxx Xxxxx Xxxxx
X.X. Xxx XX 0000
8 Xxxxxx Street
Xxxxxxxx XX GX Bermuda
Attn: Xxxxx X. Xxxxxx, President
(b) If to the Consultant, to:
Urban Retail Properties Co.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Legal Department
(Facsimile No: (000) 000-0000)
with a copy to:
Urban Retail Properties Co.
000 X. Xxxxxxxx Xxxxxx
Xxxxx 0000
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Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
(Facsimile No: (000) 000-0000)
or to such other address as any party shall hereafter designate by notice to the
others as herein provided. Any notice, demand or request shall be effective upon
receipt.
Section 8.11 Captions. The paragraph headings herein contained are for
purposes of identification only and shall not be considered in construing this
Agreement.
Section 8.12 Limitation of Liability. No present or future member in Owner
shall have any personal liability, directly or indirectly, under or in
connection with this Agreement or any agreement made or entered into under or in
connection with the provisions of this Agreement, or any amendment or amendments
to any of the foregoing made at any time or times, heretofore or hereafter, and
Consultant hereby waives any and all such personal liability. The limitations of
liability provided in this paragraph are in addition to, and not in limitation
of, any limitation on liability applicable to Owner provided by law or by any
other contract, agreement or instrument.
Section 8.13 Inspection by the Owner or Manager. Neither this Agreement
nor anything contained herein shall be deemed to limit Owner's and Manager's
right to enter upon or inspect the Center or to perform any repair or
maintenance or to do or perform any matter or thing required of Consultant
hereunder in the event of Consultant's failure to do so, and, without limitation
of their respective other rights concerning the Center, Owner and Manager shall
each have the right to do any or all of the foregoing in the event of such
failure.
Section 8.14 Joinder by Owner. Owner hereby joins in this Agreement for
the sole purposes of:
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(i) acknowledging and agreeing to the appointment of Consultant as
agent for Owner and Manager with respect to the duties and
obligations assumed by Consultant hereunder;
(ii) acknowledging and agreeing to the rights of the Consultant in
the event of a termination or proposed termination of the
Management Agreement as provided herein;
(iii) agreeing to maintain the minimum insurance set forth in
Section 5.5 and acknowledging and agreeing to the rights of
Consultant with respect to the Operating Account, the
duties and obligations of the Owner with respect to the
payment of costs and expenses incurred by Consultant on behalf
on Owner hereunder and the payment of Consultant's
compensation hereunder to the extent Manager is unable to do
so;
(iv) providing the indemnity set forth in Section 8.3 hereof, and
(v) acknowledging the rights, duties and obligations of Owner to
give notice or consent to, or waive obligations of,
Consultant, and perform such other express covenants of Owner,
as are provided herein.
Section 8.14 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the day and year first above written.
OVERSEAS MANAGEMENT, INC..,
a Delaware corporation
By:/s/ Xxxxx X. Xxxxxx
--------------------------
Its: President
---------------------
"Manager"
URBAN RETAIL PROPERTIES CO.,
a Delaware corporation
By /s/
--------------------------
Its Senior Vice President
-----------------------
"Consultant"
Owner hereby joins in this Agreement for
the purposes set forth in Section 8.14 hereof.
XXXXXX PLACE ASSOCIATES, LLC,
a Delaware limited liability company
By: OVERSEAS PARTNERS CAPITAL CORP.,
a Delaware corporation,
Managing Member
By:/s/ Xxxxx X. Xxxxxx
----------------------------
Its: President
---------------------------
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Schedule 7.1
COMPENSATION
As compensation for the Services provided under that certain Agreement for
Purchase of Consulting and Other Services (the "Agreement") to which this
schedule is attached, Consultant shall be entitled to receive a percentage fee
(the "Percentage Fee"). In addition, without limiting Consultant's rights,
duties's and obligations to incur and to pay other costs and expenses of Owner
from the Operating Account as provided in the Agreement, including without
limitation the provisions of Section 6.1 thereof, Consultant shall be entitled
to pay directly from the Operating Account (or to the extent paid out of the
Consultant's own funds, to reimburse itself directly from the Operating Account)
for certain costs incurred by Consultant on behalf of the Owner (the
"Reimbursable Costs").
PERCENTAGE FEE
The Percentage Fee shall be equal to the sum of the following with respect to
the revenues derived by Owner with respect to the Center:
(i) Four and one-half percent of gross revenues derived from the
operation of, or received pursuant to rent or business interruption
insurance with respect to, parking facilities in the Center leased
or operated by Owner; plus
(ii) Two and two-tenths percent of all amounts paid by tenants under, or
received pursuant to rent or business interruption insurance with
respect to, leases relating primarily to office space, including,
without limitation, base rent, escalated rent based upon the
Consumer Price Index or any other standard, payments to amortize
tenant work, and payments with respect to real estate taxes,
insurance, repairs, maintenance, utilities and other operating
expenses and payments for special services; plus
(iii) (a) Two and seven-tenths percent of all amounts paid by tenants
under, or received pursuant to rent or business interruption
insurance with respect to, all other leases, including,
without limitation, base or minimum rent, escalated rent, rent
based upon sales or receipts, and payments to amortize tenant
work; plus
(b) Nine percent of all amounts collected under such other leases
as common area charges (including, without limitation, charges
for common area heating, ventilating and air conditioning),
including in such common area charges amounts charged to
tenants for managing and supervising the common area and of
amounts collected from third parties as
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reimbursement for costs of maintaining and operating
facilities shared with such third parties.
Reimbursable Costs
Reimbursable Costs are the following costs, to the extent such costs are
provided for in the Approved Annual Budget (or any uncommitted contingency
amount) and subject to the provisions of Section 6.1 of the Agreement, are
allocable to the Center (such allocation being determined on a reasonable and
fair basis) and are incurred as Consultant hereunder rather than any other
capacity (such as, for example, a member of Owner): (a) the cost of Consultant's
on-site computer/word processing facilities; (b) the compensation and fringe
benefits of the secretaries in said on-site office; (c) travel (including
transportation, lodging and meals) and entertainment costs; (d) the "Allocated
Overhead Compensation Cost" (as defined below) of Consultant's and its
Affiliates' officers and employees incurred in connection with the Consultant's
leasing activities hereunder or in working with or developing relationships with
governmental or quasi-governmental authorities and personnel or tenants or
department stores; (e) the Allocated Overhead Compensation Cost of Consultant's
and its Affiliates' officers and employees and all amounts paid to third parties
in connection with architectural and engineering design, plan review,
supervision and inspection, both on- and off-site, relating to tenant spaces in
the Center and on-site review and supervision construction of landlord's and
tenant's work relating to tenant spaces; (f) the Allocated Overhead Compensation
Cost of Consultant's and its Affiliates' officers and employees, and all amounts
paid to third parties in connection with legal assistance, in drafting,
negotiating and executing leases for space in the Center; (g) expenses incurred
in connection with real estate or property tax consulting (including preparation
of documents related thereto), in effort to maintain or reduce taxes applicable
to or against the Center or Owner; and (h) the Allocated Overhead Compensation
Cost of the Consultant's and its Affiliates' officers and employees, and the
expenses, both direct and indirect, incurred relative to on- and off-site
marketing and promotional services rendered or contracted for by the Consultant
for the Center. As used in this Schedule 7.1, "Allocated Overhead Compensation
Cost" shall mean that percentage of an employee which the Consultant customarily
charges to projects to reflect the compensation and benefits of such employee
and the overhead attributable to such employee [as of the date hereof, such
percentage is approximately 260%]. As used in this Schedule 7.1, "Affiliate"
shall mean any entity or individual controlling, controlled by or under common
control with Consultant or JMB. Except as expressly provided above, in no event
shall Owner be required to pay, or shall the Consultant be entitled to any
reimbursement for:
(i) Consultant's off-site overhead, office or administrative expenses;
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(ii) the cost of gross salary and wages and other compensation,
payroll taxes, insurance, worker's compensation, pension
benefits and any other benefits of Consultant's home office
personnel; and
(iii) the cost of general accounting and reporting services provided
by the Consultant from any off-site office (except for a
reasonable allocation of the Allocated Overhead Compensation
Cost of the regional accounting manager who performs property
accounting services for the Center), it being further
understood that the fees and expenses of any independent
accountants shall be borne by the Owner.
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