Exhibit 10 (r)
MANAGEMENT AND LEASING AGREEMENT
between
BAYSHORE LANDING, LLC,
a Florida Limited Liability Company
and
RCI BAYSHORE, INC.,
a Florida Corporation
MANAGEMENT AND LEASING AGREEMENT
RECITALS
THIS AGREEMENT, made as of the August 20, 2004, between BAYSHORE
LANDING, LLC, a Florida limited liability company (the "Owner") and RCI BAYSHORE
INC., a Florida corporation (the "Manager").
Owner is the owner of that certain property located in Coconut Grove,
Florida and known as "BAYSHORE LANDfNG," which includes a Marina ("Docks") and
retail facility (exclusive of any restaurants) ("Building") (collectively, the
"Property"). Manager desires to be engaged to manage and lease the Property and
Owner has agreed to appoint Manager to manage and lease the Property under the
terms and conditions herein contained.
ARTICLE I
ENGAGEMENT OF MANAGER
AND RENTAL RESPONSIBILITYS
1.1 Engagement as Manager. Owner hereby engages the Manager as an
independent contractor to operate and manage the Property, and the Manager
hereby accepts such engagement, all on the terms and conditions and subject to
the limitations and restrictions hereinafter provided. As hereinafter set forth,
Manager's duties shall also involve construction and other duties related to the
development of the Property.
1.2 Engagement as Leasing Agent. Owner hereby grants to Manager the
exclusive right to act as Owner's agent in connection with leasing of the
Property during the term of this Agreement and Manager agrees to use reasonable
efforts to effect the leasing of the Property in a manner consistent with such
exclusive engagement.
ARTICLE II
DUTIES OF MANAGER
2.1 Leasing. Subject to the limitation set forth in the last paragraph
of this Section 2. 1 , Manager shall do, accomplish and complete, or cause to be
done, accomplished and completed, all services necessary for the leasing of any
available space in the Building, the Docks, and/or any other rentable facilities
to tenants who are, to the best of Manager's knowledge, creditworthy and
responsible, including, but not limited to the following activities:
(a) make proposals at appropriate times for the modification of
the approved leasing guidelines previously approved by Owner;
(b) implement the leasing guidelines approved by Owner and the
promotional plan approved by Owner for (i) the procurement of
prospective tenants and negotiation of proposed lease with
such prospective tenants, and (ii) the advertisement of the
Property and the preparation of rental signs,
circular matters and such other forms of advertising as are
outlined in the promotional plan approved by Owner;
(c) negotiate and prepare (or cause to be prepared) all leases,
amendments thereto and modifications thereof for the Building
(collectively the "Lease Documents") from a standard form
approved by Owner, an submit all Lease Documents to Owner for
its review. All Lease Documents shall be subject to prior
written approval by Owner and no Lease Document shall be
binding on or enforceable against Owner unless Owner shall
execute the same. In no event shall Manager have authority to
execute Lease Documents for the Building on behalf of the
Owner;
(d) negotiate and prepare (or cause to be prepared) all leases and
other agreements for the use and occupancy of the Docks ("Dock
Leases") from a standard form approved by Owner. Owner's
consent shall not be required for Dock Leases entered into by'
Manager on Owner's behalf in the ordinary course of business
at rates and on terms approved by Owner; and
(e) secure, as fully as reasonably practicable, the compliance of
tenants with the terms, covenants, and conditions of their
leases, keep tenants informed of all rules and regulations
affecting the Property, receive and promptly consider and
handle service requests by tenants, and maintain systematic
records showing the action taken with respect to each request.
Manager shall not have the right, nor the obligation to
initiate or maintain any legal or administrative proceedings
on behalf of Owner without the prior approval of Owner.
2.2 Employment of Personnel. Manager shall have the duty, subject to the
limitations set forth in this Agreement, to investigate to a reasonable extent
(except that Manager shall not be obligated to perform more than a limited
investigation of employees who earn less than $1 2.00 per hour and do not handle
any monies on a regular basis), hire, train, pay, supervise and discharge the
personnel necessary to be employed in order to properly manage and operate the
Property in accordance with obligations of Manager under this Agreement. The
Property will be staffed on-site with the personnel consistent with current
levels. Such personnel shall in every instance be deemed employees of Manager
and not of Owner. Manager shall be responsible for the compensation (including
all benefits of such employees and for all payroll taxes, F.I.C.A. and similar
items) with respect to such employees. The compensation (including benefits)
paid to employees of Manager shall not exceed the amount ordinarily paid to
employees for similar work in the area where the Property is located, or such
other amount authorized pursuant to an approved Budget (as defined in Section 4.
1), which Budget must exclude any compensation (including benefits) of any of
Manager's officers or employees who do not work full time on the Property as
well as any central office overhead or expense. Manager shall obtain, and
maintain Worker's Compensation Insurance (including Employer's Liability
Insurance) covering all employees of Manager employed in, on or about the
Property, and provide statutory benefits as required by applicable state and
federal laws with respect to Manager and Manager's employees.
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Manager shall directly control the time and manner of the work and services to
be performed by the employees of Manager, and Manager shall comply with all
applicable federal, state and local laws, ordinances and regulations applicable
to such employees. Manager shall make all necessary payroll deductions for
disability and unemployment insurance, social security, withholding taxes and
other applicable taxes, and prepare, maintain and file all necessary reports
with respect to such taxes or deductions, and all other necessary statements and
reports pertaining to labor employed by Manager on or about the Property.
Notwithstanding the fact that personnel (other than Xxxxxx Xxxxxxxxx, Xx.,
Xxxxxx Chrsistoph or other staff member of manager located at Miami Beach)
employed by Manager shall be considered operating expenses of the Property to
the extent the same are included in the Budget approved by Owner or who are
otherwise approved by Owner. In addition to the employees mentioned above,
Xxxxxx Xxxxxxxxx, Xx. shall at all times act as a project manager (compensation
to Xxxxxx Xxxxxxxxx, Xx. shall not be considered an operating expense of the
Property but shall be paid by Manager out of the compensation paid to the
Manager under Section 3 . 1 hereof). The on-site manager, dock master, dedicated
leasing agent and other "key personnel" who report directly to Xxxxxx Xxxxxxxxx,
Xx. must be approved by Owner and shall not be relocated by Manager without
Owner's prior consent. Said employees shall be dismissed, if so requested by
Owner at any time and from time to time.
2.3 Service and construction Contracts. Manager shall negotiate on behalf
of Owner contracts for water, electricity, gas, fuel, oil, telephone, vermin
extermination, trash removal, and other services deemed by Manager to be
necessary or advisable for the operation of the Property and for making of any
improvements to the Property authorized by Owner (the latter contracts being
referred to herein as "Construction Contracts"). All contracting professionals
(including, without limitation, all engineers, consultants, attorneys and
accountants), whose services are to be retained in respect of the Property may
be designated by Owner at its discretion, and, in any event, shall be subject to
Owner's approval before being hired by Manager. Manager shall also place orders
in the name of Owner for such equipment, tools, appliances, materials and
supplies as are reasonable and necessary to properly maintain the Property,
subject to any applicable limitation contained in this Agreement. Manager shall
identify any contracts to be entered into or purchase or purchase orders to be
placed with any partner, officer, employee, of Affiliate of Management. As used
herein, the term "Affiliate" shall mean (x) any entity or person directly or
indirectly controlling, controlled by, or under common control with, the Manager
or any officer, director, or partner of Manager, (y) any entity or person owning
or controlling 1 0% or more of the outstanding voting shares or interest in
capital or profits of Manager shall obtain three (3) bids for all construction
Contracts in excess of $25,000.00, although Manager shall not be obligated to
hire the lowest bidder if Manager has reason for not doing so, and so advises
Owner. Manager may execute on Owner's behalf any Construction Contract or other
contract which, in either case, has received Owner's approval. Owner's approval
with respect to Construction Contracts and other Contracts shall be required as
follows:
(a) Construction Contracts
If a Construction Contract is for less than $100,00.00 and
pertains to, or is a component of, a construction job with a
total cost of less than $100,000.00 and which is included in
the Budget approved by Owner,
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Owner's approval shall not be required. All other
Constructions Contracts must be approved by Owner.
(b) Service, supply and other contracts:
If a contract is for less than $100,000.00, is included in the
Budget approved by Owner and is for a term of less than one
(1) year or is terminable with or without cause, upon no more
than 30 days' notice. Owner's approval shall not be required.
All other contracts shall be subject to Owner's approval.
2.4 Maintenance and Repair of Property. Manager shall maintain the docks,
the Building, appurtenances and grounds of the Property and other improvements
thereon, in accordance with standards reasonably acceptable to Owner, including
within such maintenance without limitation thereof, interior and exterior
cleaning, painting, decorating, plumbing, carpentry and such other normal
maintenance, and repair work as may be desirable; provided, however, the
Manager's obligation and/or duty to maintain the Docks, the Building,
appurtenances and grounds of the Property, and other improvements thereon, and
the liability of Manager thereof shall be expressly limited hereby to the extent
that the Owner provides sufficient funds for the satisfaction or discharge
thereof or any expense to be incurred as a result thereof. For any individual
item or repair or replacement, the expense must be specifically authorized in
advance by Owner unless the item or repair or improvement was included in the
Budget approved by the Owner, excepting, however, that emergency repairs
immediately necessary for the preservation and safety of the Property or danger
of life or property may be made by Manager without the approval of Owner, but
Manager shall immediately notify Owner of any such emergency repairs.
2.5 Insurance. Owner shall at its own cost and expense secure and maintain
fire and extended coverage and boiler and machinery insurance insuring against
physical damage to the Property, provided, however, that Owner may in its sole
discretion self-insure the risks of physical damage to any of the Property.
Owner shall, at its own cost and expense, secure and maintain
comprehensive general liability insurance with limits of not less than
$1,000,000.00 combined single limit coverage insuring against loss, damage or
injury to persons or property that might arise out of the occupancy, management,
or maintenance of the Property, and Manager shall be named as an additional
insured on such liability coverage.
Owner shall indemnify, defend, save and hold Manager harmless of, from
and against any loss, damage, injury, liability, claim demand, cost (including
attorneys' fees and expenses and court costs) or expense that arises out of or
results from the making or enforcing of contracts and/or purchase orders entered
into or placed in accordance with this Agreement or any directions or approvals
given by Owner, except to the extent of any claim resulting from or arising out
of Manager's gross negligence or willful or intentional misconduct (except for
gross negligence or will misconduct undertaken at Owner's written direction).
The foregoing shall survive the termination of this agreement.
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In the event of damage to the Property by fire or other casualty that
is covered (or could have been covered) by a fire and extended coverage or other
physical damage insurance policy readable available in the jurisdiction in which
the Property is located and such fire or casualty is caused in whole or in part
by acts or omissions or either party, its agents, servants, or employees, then
the other party shall look solely to the proceeds of its own insurance policy
(if any) for loss to its own property, and neither party nor any third party
shall have any right of recovery against the other party or its agents,
servants, or employees by way of subrogation, assignment or otherwise. If this
waiver or subrogation provision must be disclosed to either party's insurer, or
if such insurer must consent to the inclusion of the provision to enforce its
policy with respect to this provision, each party agrees to make such disclosure
and to use its best efforts to obtain such consent or endorsement. This
provision shall apply with respect to any policies presently maintained or that
may hereafter be acquired by either party hereto. In the event that the
inclusion of this waiver of subrogation provision causes an increase in premiums
for the physical damage insurance coverage for the parties, the increase shall
be an operating expense of the Property.
Upon the written request of the Owner, Manager shall promptly
investigate and make a written report to such insurance companies (as have been
previously disclosed in writing to Manager by Owner) and Owner as to all
accidents, claims for damage relating to the ownership, operation and
maintenance of the Property, any damage or destruction to the Property and the
estimated cost of repair thereof, and shall prepare any and all reports for any
damage or destruction to the Property and the estimated cost of such insurance
company (as has been previously disclosed in writing to Manager by Owner), in
connection therewith. All such reports shall be timely filed with such insurance
company (as has been previously disclosed in writing to Manager by Owner) as
required under the terms of the insurance policy involved. Owner shall settle
any and all claims against insurance arising out of any policies, and execute
proofs of loss, adjust losses, sign receipts and collect monies, and Manager
shall cooperate in connection therewith, as may be requested by Owner.
Notwithstanding any other provision of this Agreement, Owner may self-insure any
and all risks from physical damage to any of the Property.
2.6 Collection of Monies. Manager shall collect all rents and other charges
due from Buildings tenants, users of the Docks and, lessees of other facilities
in the Property, and concessionaries of facilities in the Property and all other
income derived from the operation and ownership of the Property. Owner
authorizes Manager to request, demand and collect, and receive all such rent and
other charges and (if and to the extent specifically authorized by owner in each
case) to institute legal proceedings (in the name of, and as an expense
reimbursable by, Owner) for the collection of such rent and other charges and
for the dispossession of tenants and other persons from the Property, and such
expense may include the engaging of counsel for any such matter, provided such
counsel is approved and/or designated by Owner. All monies collected by Manager
shall forthwith and be deposited in the separate bank account referred to in
Section 3.6 herein.
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2.7 Manager Disbursements.
(a) Manager shall, from the funds collected and deposited, cause
to be disbursed regularly and punctually and otherwise in
accordance with the terms of this Agreement (1) Manager's
compensation under Article III of this Agreement; (2) the
actual, out-of-pocket costs and expenses otherwise
reimbursable to Manager under this Agreement; (3) the amounts
payable from time to time under any mortgage financing; (4)
any amounts directed by Owner to be paid against any
indebtedness relating to the Property; (5) the amount of all
real estate taxes and other impositions levied by appropriate
authorities which, if not escrowed with any lender, shall be
paid upon specific written direction of Owner before penalty
or interest begins to accrue thereon; (6) amounts otherwise
due and payable as operating expenses of the Property
authorized to be incurred under the terms of this Agreement;
(7) any amounts to be construction costs (as approved by
Owner); and (8) amounts required to fund any reserve
established by Owner; provided that Manager shall in no event
make any disbursement of funds except to the extent such
disbursement is provided for under the Budget approved by
Owner or otherwise authorized in accordance with this
Agreement. To the extent that available funds are insufficient
to pay all the foregoing, collected funds shall be used by
Manager to pay items (1) and (2), and shall then be used by
Manager as directed by Owner. After disbursements as herein
specified, any balance remaining at the end of each calendar
quarter during the term of this Agreement shall be disbursed
or transferred as generally or specifically directed in
writing from time to time by Owner. Within (30) days after the
end of each calendar year, Manager shall provide to Owner a
written reconciliation of all funds collected and disbursed by
Manager during the preceding calendar year, on a monthly and
quarterly breakdown.
(b) Owner agrees to provide sufficient working capital funds to
Manager so that all amounts due and owing pursuant to the
Budget approved by Owner or amounts otherwise approved by
Owner and which are required to be paid by Manager (and for
which Manager does not otherwise have available funds) may be
promptly paid by Manager. Except in the case of an emergency,
Manager shall give Owner at least ten (10) days prior written
notice of Manager's need for such funds. As of the first day
of each quarter of this Agreement, Manager will project the
estimated cash requirements for such quarter.
2.8 Tax Abatements and Condemnation. Manager shall, without extra charge or
reimbursement, and upon the written request of Owner, retain, at Owner's
expense, experts to perform services and render advice in the negotiation and
prosecution of all claims for the abatement and reduction of taxes and
assessments affecting the Property and for awards for taking by eminent domain
affecting the Property, provided that (i) Manager obtains the prior written
approval of all such experts from Owner, and (ii) all condemnation, assessment
and
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taxation matters will be within the sole and exclusive control and direction of
Owner. Manager shall, without extra charge or reimbursement, analyze materials
and recommendations made by such experts and make recommendations to Owner.
2.9 Coordination of Tenant Finish Work. Throughout the term of this
Agreement, Manager shall use its best efforts, not as a general contractor, but
in Manager's capacity as manager and operator of the Building, upon a lease
being executed by Owner and the applicable tenant (but not before) to supervise,
coordinate and expedite the completion of all tenant finish work with respect to
each lease of space in the Building. Manager's duties and responsibilities in
connection with the foregoing shall include (i) assisting in finalizing space
plans and obtaining prices of materials and services related to the tenant
finish work, (ii) assisting the tenant in the selection of tenant finish
materials and in such other matters as the tenant may reasonably request and
customarily performed by a building manager and (iii) coordinating planning and
construction activities among the architect, contractor(s) and tenant in order
to facilitate the prompt completion of all such activities while minimizing any
disruption of normal building operations, as customarily performed by a building
manager.
2.10 General Duties. In addition to the duties more particularly described
in this Article II, Manager shall be responsible for the implementation of any
and all decisions of Owner, upon request in writing, and for initiating and
taking such other actions (not inconsistent with this Agreement) in the
management and administration of the Property so as to properly and efficiently
operate the Property.
2.11 Miscellaneous.
(a) Records. Manager shall maintain complete and accurate books,
records, and accounts of all costs and expenses incurred and
all income and receipts received in connection with the
operation of the Property. The books and records regarding the
Property shall be kept in such manner and such detail as Owner
shall reasonably require. All statements, receipts, invoices,
checks, leases, contracts, worksheets, financial statements,
books, and records, and all other instruments and documents
relating to or arising from the operation or management of the
Property shall be delivered by Manager to Owner upon
termination of this Agreement for any reason. Manager shall
have the right, however, as an expense of the Property, to
make one copy of any such material. During the term of this
Agreement, all such books and records, as well as all other
books and records of Manager that relate to the Property,
shall be available for inspection and audit by Owner at its
expense at all reasonable times during normal business hours.
From time to time, upon request by Owner, Manager shall also
prepare and submit to Owner the following: (1) a current
inventory of Owner's equipment and personal property at the
Property, and (2) a current rent roll of existing leases in
the form approved by Owner. In addition, Manager shall furnish
to Owner such other reports as Owner shall from time to time
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reasonably request in connection with the operation and
management of the Property, and Manager shall prepare and
submit to Owner at least sixty days prior to the commencement
of each calendar year a leasing schedule in the form approved
by Owner, showing proposed lease rates and concessions
proposed to be granted at the Property and the projected
leasing activity at the Property for the upcoming calendar
year.
(b) Monthly Reports. On or before the fifteenth (1 5th) day of
each month during the term of this Agreement, Manager shall
render to Owner an operating statement and a cash flow
statement showing all items of income and expense for the
Property (on an accrual basis, unless otherwise requested by
Owner) for the preceding calendar month, and making comparison
to the applicable Budget approved by Owner, together with
tenant's sales information (to the extent available), check
ledgers, general ledgers, bank statements and a monthly report
of leasing activity of the Building, Docks, and any other
rentable facilities (including identification of tenants,
amount of space rented; rental rates, tenant improvements,
tenant allowances and any other information reasonably deemed
relevant by Owner).
(c) Annual Report. Within sixty (60) days after the end of each
calendar year, Manager shall deliver to Owner a statement of
cash flow showing the results of operations for that calendar
year or portion thereof during which the provisions of this
Agreement were in effect, and any other information that may
be necessary to file income tax returns or that may be
required by any governmental authority.
(d) Employees Returns Required by Law. Manager shall execute and
file punctually when due all forms, reports, and returns
required by laws relating to the employment ofpersonnel by
Manager ofthe Property.
(e) Compliance with Legal Requirements. Manager shall comply with
the Owner's Directives with respect to the management and
operation of the Property by Manager and with any deed of
trust or mortgage affecting the Property that has been
disclosed by Owner to Manager and with any and all federal,
state, county and municipal orders, rules, regulations,
statutes, ordinances, requirements, and laws affecting the
Property, and orders of the Board of Fire Underwriters or
other similar bodies subject to the limitations contained in
this Agreement in connection with the making of alterations
and repairs; provided, however, that Manager's obligations
and/or duties hereunder and the liability of Manager therefore
shall be expressly limited hereby to the extent that the Owner
provides sufficient funds for the satisfaction or discharge
thereof or any expense to be incurred as a result thereof
Manager shall not, however, take any such action as long as
Owner is contesting (and has so notified Manager in writing),
or has affirmed in writing its intention to contest and
promptly
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institute proceedings contesting, any such order or
requirement. Manager shall promptly, and in no event later
than seventy-two (72) hours from the time of receipt, notify
Owner of such orders and notices.
ARTICLE III
RELATIONSHIP OF MANAGER TO OWNER
3.1 Compensation for Management. The compensation that Manager shall be
entitled to receive for services performed as Manager under this Agreement shall
be a fee computed and payable monthly in arrears on the first day of each month
commencing on the effective date of this Agreement, in an amount equal to 3.0
percent (3.0%) of "Gross Income" (as hereinafter defined) collected by Manager
during such month.
"Gross Income" shall mean the actual cash proceeds generated and
received by Manager from the normal operations of the Property, excluding
refundable deposits or advances made by Owner on behalf of tenants, and rental
payments delineated in the applicable lease as being attributable to or being
reimbursement or repayment for landlord advances and/or tenant improvements
proceeds from insurance, condemnation refinancing or sale, or any other
extraordinary or non-recurring event. Gross Income shall include tenant payments
for common area maintenance costs and any proceeds received by Owner from rental
insurance as compensation for lost rentals. Any rental payments made by the
Tenant under the Restaurant and Rawbar subleases that is forwarded on to the
City for rent due under the Master Lease (i.e. the percentage of Gross Sales due
to the City) shall be excluded from Gross Income.
3.2 Leasing Commission.
(a) Subject to subsection (b) below, Owner agrees that if a lease
of all or any part of the Building or any other commercial or
office space at the Property excluding, without limitation,
the routine operation of the dock slips is entered into by
Owner during the term of this Agreement, Owner shall pay
Manager a leasing commission in accordance with Exhibit A
attached hereto and made a part hereof for all purposes;
provided, however, the form and content of any such lease
shall be satisfactory to Owner in its sole and absolute
discretion, or the lease must otherwise be permitted under
Section 1 of this Agreement.
(b) Manager shall not be entitled to any commission in the event
of a termination of this Agreement as a result of a default by
Manager under this Agreement, excepting such commission
otherwise already due and payable or accrued prior to the
occurrence of such event of default, which commission shall be
payable, upon the same conditions and at the same times, as if
this Agreement had not terminated.
(c) Manager understands that this Section 3.2 relates to leases
only and that Manager shall have no right to recover any
commission or other fee
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hereunder relating to any sale of the Property or any portion
thereof without prior written authorization and approval by
Owner.
3.3 Construction Supervisor; Additional Compensation. In addition to
Manager's duties as set forth in paragraph 2.9 hereinabove, Owner retains
Manager, from time to time to serve as construction supervisor, and Manager
hereby agrees to serve as construction supervisor. It is expressly understood
and agreed by Owner and Manager that Owner may determine, in its sole and
absolute discretion, not to retain Manager as construction supervisor. It is
further understood and agreed that, when Owner retains Manager to serve as
construction supervisor, Manager, at Manager's own cost, may delegate all or
part of its duties as construction supervisor to a third party (who shall be
subject to Owner's prior approval, which approval shall not be unreasonably
withheld or delayed).
In consideration for performing services as construction supervisor
Manager shall receive a construction supervisor fee ("CS Fee") equal to three
percent (3%) of the total "Cost of Construction" (as such term is hereinafter
defined). "Cost of Construction" shall be defined as the actual costs to Owner
of all portions of the applicable project construed and accepted by deficiencies
in the construction of the improvements caused by the errors, conflicts or
omissions of Manager and, so long as the contract is not a time and materials
contract, the contractor's overhead if shown as a separate line item in the
contract). The funding of the improvements (i.e. the City of Miami, Florida or
insurance proceeds). The CS Fee shall be payable by Owner to Manager as part of
the draw process, and in proportion to the percentage of payments made by Owner
for the total cost of the applicable work.
3.4 Expense of Owner. All expenses incurred by Manager in performing its
obligations pursuant to Article II shall be considered an operating expense to
be borne by Owner, except as otherwise specifically provided in Article II or
elsewhere herein and except that Owner shall not be obligated to reimburse
Manager for office equipment or office supplies of Manager (unless used at the
Property site), for any overhead expense of Manager incurred in its general
offices, for any salaries of executive employees of Manager, for any salaries or
wages allocable to time spent on projects other than the Property, or for any
salaries, wages, and expenses for any personnel other than personnel located on
at the Property Site and personnel spending a portion of their working hours (to
be charged on a pro rata basis) at the Property site or in specifically
performing Manager's management duties hereunder, whether on or off the Property
site, except Owner shall pay all reasonable travel and lodging expenses. The
on-site manager at the Property and any other persons performing functions
substantially similar to those of a resident manager, including but not limited
to assistant managers, on-site bookkeepers, and on-site maintenance personnel,
shall not be considered executive employees of the Manager. All payments to be
made by Manager hereunder shall be reimbursed pursuant to Section 3.6 hereof.
Manager shall not be obligated to make any advance to or for the account of
Owner or to pay any sums, except out of funds held in any account maintained
under Section 3.6, nor shall Manager be obligated to incur any liability or
obligation for the account of Owner unless the necessary funds for the discharge
thereof are in the Property's operating account or will be provided by Owner on
a timely basis.
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3.5 Use and Maintenance of Premises. Manager agrees that it will not
knowingly permit the use of the Property for any purpose that might void any
policy of insurance held by Owner or Manager or that might render any loss
thereunder uncollectible, or that would be in violation of any governmental
restriction. It shall be the duty of Manager at all times during the term of
this Agreement to operate and maintain the Property according to the highest
standards achievable consistent with the approved plan of Owner. Manager shall
use its best efforts to secure full compliance by tenants with the terms and
conditions of their respective leases. Manager shall be expected to perform such
other acts and deeds as are reasonable, necessary and/or proper in the discharge
of its duties under this Agreement. It is expressly agreed that Manager's
obligations and duties hereunder and the liability of Manager therefore shall be
expressly limited hereby to the extent that Owner shall provide to Manager
sufficient funds in a timely manner for the satisfaction or discharge of any
such obligation or duties or any expense to be incurred as a result thereof but
Manager shall only be discharged from Manager's obligations with respect to
specific obligations for which Owner has failed to timely provide Manager with
sufficient funds after notification from Manager of such circumstance.
3.6 Separation of Owner's Monies. Manager shall establish and maintain, in
bank or savings and loan association of Owner's choice and whose deposits are
insured up to One Hundred Thousand Dollars ($100,000.00) by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance Corporation, and
in a manner to indicate the custodial nature thereof, a separate bank account
for the deposit of the monies of Owner. Manager shall establish a trust account
in the name of Manager and shall cause the account to be an interest bearing
account of a type satisfactory to Owner (to the extent available). Manager shall
also establish such other special bank accounts in the name of Manager as may be
reasonably required by Owner. Funds may be withdrawn from all accounts upon the
sole signature of Manager or Owner, except that (unless otherwise approved in
writing by Owner) the signature of Owner shall also be required for all checks
over Twenty-Five Thousand Dollars ($25,000), other than, so long as Manager is
not in default under this Agreement, to purchase fuel, to pay insurance
premiums, to pay Manager the monthly management fee due to Manager under this
Agreement, and to pay other recurring, customary and usual services and to pay
for previously Owner approved contracts or services.
3.7 Term. This Agreement shall commence as of the date first set forth
above and shall thereafter continue for a period equal to the Owner's tenure at
the site from said commencement date.
(a) Upon a sale of the Property by Owner to a third party, or the
transfer of the Christoph Family Trust's interest in Owner to
an unaffiliated third party or any other member of Owner,
Owner or the purchaser of the Property may terminate this
Agreement by giving Manager thirty (30) days prior written
notice.
(b) Upon the occurrence of any of the following: (i) criminal
acts, acts or failure to act by Manager which knowingly cause
any violation of any environmental law, statute or regulation,
(ii) any act of fraud or intentional misrepresentation of a
material nature, or intentional misappropriation of
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funds by Manager, (iii) failure of Manager to act diligently
in (aa) representing Owner relative to obtaining permits,
approvals and addressing other governmental requirements, or
(bb) seeking and securing leases for space in the Building
where Manager is acting as leasing agent, or (iv) the breach
by Manager of any other material term, covenant or provision
of this Agreement, and which in the case of (iii) or (iv)
only, is not cured to Owner's reasonable satisfaction within
thirty (30) days after written notice from Owner to Manager,
or such longer period of time, not to exceed an additional
sixty (60) days, as may be reasonably necessary to cure same,
provided such additional time shall be available to cure
defaults and avoid termination of this Agreement only if the
breach or default complained of by Owner is curable, Manager
has commenced appropriate curative action during said 30 days
period, and Manager diligently and continuously pursues said
curative action to completion. Notwithstanding any of the
foregoing, there shall be no termination of this Agreement
pursuant to items (i) or (ii) if a criminal act or
misappropriation of funds is done by an employee who was hired
in accordance with the requirements of Section 2.2, and who
was properly supervised by Manager.
Within thirty (30) days after any termination of this
Agreement, Manager shall deliver to Owner the report required
by Section 2.11(b) for any period not covered by such report
at the time of termination, the statement of cash flow
required by Section 2.11(c) for the calendar year or portion
thereof ending on the date of termination.
Upon termination of this Agreement under this Section 3.7, and
except otherwise specified in this Section 3.7, Manager shall
be entitled to receive any management fees, lease commissions
or construction supervisory fees already accrued and due and
payable to Manager under this Agreement to the date of such
termination (the foregoing specifically excludes lease
commissions and supervisory fees not payable until after
Termination ) ("Accrued Fees"). No other compensation or fees
shall be payable to Manager unless specifically stated in this
Agreement.
3.8 Assignment. Owner may assign its rights and obligations to any
successor in title to the Property (i.e., its leasehold interest) and upon such
assignment shall be relieved of all liability accruing after the effective date
of such and the assignee assumes the obligations of Owner under this Agreement.
Upon any such assignment by Owner, Manager shall have the right to terminate
this Agreement under written notice to Owner or the successor thereof Manager
shall not have the right to assign its rights and obligations hereunder, except
to an entity which is controlled by Xxxxxx Xxxxxxxxx, Xx. and in which Xxxxxx
Xxxxxxxxx, Xx. owns at least fifty percent (50%) interest, and only after
written notice of such assignment has been given of the obligations or duties
required to be kept or performed by it hereunder without the express prior
written consent of Owner, except the Manager may delegate it obligations as
construction supervisor to a licensed third-party construction supervisor
approved by Owner, but Manager
13
shall remain liable to Owner for the performance so delegated (any transfer of
more that a fifty percent (50%) ownership interest in Manager, whether as a
result of one transfer or a series of transfers, shall be deemed as assignment
by Manager of its rights and obligations hereunder).
3.9 Notice. All notices required or permitted by this Agreement shall be in
writing and shall be sent by personal delivery or registered or certified mail,
return receipt requested, or facsimile addresses:
To Owner:
Bayshore Landing, LLC
000 Xxxxx Xxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxxxxx, Xx.
Facsimile: 000-000-0000
With a copy to:
HMG/Bayshore Landing, LLC
0000 X. Xxxxxxxx Xx.
Xxxxx,XX 3313
Attn: Xxxxx Xxxxxxxxx
Facsimile: 000-000-0000
To Manager:
RCI Bayshore, Inc.
000 Xxxxx Xxxx
Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Xx.
Facsimile: 000-000-0000
Copy to:
Xxxxxxx Aniaducci, Esq.
Bilzin Xxxxxxx Xxxxx Price & Xxxxxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile: 000-000-0000
or to such other address as shall from time to time have been designated by
written notice by either party given to the other party as herein provided.
3.10 Security Deposits. Owner agrees to indemnify and hold harmless Manager
and Manager's representatives, agents, officers, directors and employees for any
loss or liability with
14
respect to any use by Owner of tenants' security deposits that are actual
delivered to Owner or disbursed at Owner's direction from any escrow account or
other account controlled by Manager. Manager agrees to indemnify and hold
harmless Owner and Owner's representatives, agents, officers, directors and
employees for any loss or liability with respect to any use by Manager of
tenants' security deposits received by Manager and not actually delivered by
Manager to owner or disbursed pursuant to Owner's instructions.
ARTICLE IV
BUDGETS
4.1 Budget. The term "Budget" shall mean a composite of (i) an operation
budget, which shall be an estimate or receipts and expenditures for the
operation of the Property during a calendar year, including a schedule of
expected rentals from immovable property (excluding security deposits) for the
period in question, a schedule of expected rentals from movable property for the
period in question, and a schedule of expected special repairs and maintenance
projects, and (ii) a capital budget, which shall be an estimate of capital
replacement, substitutions of, and additions to the Property for a calendar
year, including, without limitation, budgets for all its improvements proposed
by Owner.
4.2 Approval. Manager shall submit for Owner's approval no later than
November 30th of each calendar year during the term of this Agreement, the
Budget for the ensuing calendar year. The Budget shall be subject to review and
approval in writing by Owner. In the event Owner disapproves the Budget, Owner
and Manager shall jointly revise the Budget as soon as may be reasonably
practicable. Until a new Budget is approved, Manager shall operate under the
Budget approved for the prior calendar year, with the exception of expenses
relating to taxes, insurance and utilities which shall be the actual cost
thereof. The Budget shall reflect the schedule of monthly rents proposed for the
new calendar year, and shall include the other information set forth in Section
4.1. The Budget shall also constitute a major control under which Manager shall
operate, and notwithstanding any term, condition, or provision hereof to the
contrary, no expenses (other than taxes, insurance and or utilities) may be
incurred or commitments made by Manager in connection with the maintenance and
operation of the Property that exceed the amounts allocated for the category of
any such expense for the period in question in the approved Budget without the
prior consent of Owner.
4.3 Variances. In the event there shall be a variance between the results
of operations of any month and the estimated results of operations for such
months set forth in the Budget, such month a written explanation as to why such
variance occurred. If substantial variances have occurred or are anticipated by
Manager during the remainder of any calendar year, or if otherwise requested by
Owner, Manager shall prepare and submit to Owner for its approval a revised
Budget covering the remainder of the calendar year.
15
ARTICLE V
GENERAL
5.1 Indemnification. (a) Manager hereby indemnifies and agrees to save
Owner, its successors, assigns, employees, officers, directors, shareholders,
partners and its affiliated corporations and their employees, officers,
directors, shareholders and attorneys harmless from all liabilities,
obligations, damages, penalties, claims, costs, charges, and expenses,
including, without limitation, attorneys' fees and costs of investigation, which
may be imposed upon or incurred by or asserted against Owner or Owner's
employees by third parties resulting from, incidental to, or in connection with
(a) the operation, maintenance, or use of the Property or arising from any
activity at the Property, due to any act or omission which constitutes gross
negligence or willful misconduct on the part of Manager or action by Manager
which is beyond the scope of Manager's authority under this Agreement and/or any
other approval or consent given by Owner to Manager and/or (b) the presence or
alleged presence of hazardous or toxic substances or wastes on the Property
which, in violation of any applicable law, regulation or ordinance, contaminate
or first become present on the Property after the date of this Agreement and
which presence or contamination is not a consequence of a condition existing as
of the date of this Agreement but is caused by Manager or results from the
negligence or intentional acts or omissions of Manager unless such act or
omission was at Owner's written direction. In the event that any action or
proceeding is brought against Owner by reason of any such claim, Manager shall,
upon notice from Owner, and at Manager's sole cost and expense, retain competent
legal counsel, which legal counsel shall be subject to approval by Owner in
writing, and resist or defend any such action or proceeding. Manager shall not
be required to indemnify Owner for any loss suffered by Owner as a result of
actions taken by Manager if Owner has given prior written approval of such
actions, unless the loss suffered by Owner results from the gross negligence or
willful misconduct of Manager in its performance of such actions. Owner shall
indemnify and save Manager, its permitted assigns, employees, officers,
directors, shareholders and its affiliated corporations and their employees,
officers, directors, shareholders and attorneys harmless from all liabilities,
obligations, damages, penalties, claims, costs, charges and expenses, including,
without limitation, attorneys' fees and costs of investigation, incurred by
Manager or claimed against Manager, by any governmental agency or third party
due to the presence or alleged presence of hazardous wastes or toxic substances
or wastes, in violation of any applicable law, regulation or ordinance which
presence existed on or before the date of this Agreement or after the date of
this Agreement if such presence is the result of any gross negligence or willful
misconduct on the part of Owner or any third party acting at Owner's direction.
The provisions of this Section 5.1 shall survive any expiration or termination
of this Agreement.
5.2 Miscellaneous.
(a) This Agreement shall constitute the entire agreement between
the parties hereto and no modification thereof shall be
effective unless made by supplemental agreement in writing
executed by the parties hereto. Any prior written or verbal
agreements and understandings are merged into, and are
superseded by, this Agreement.
16
(b) Neither this Agreement nor any part hereof nor any service,
relationship, or other matter alluded to herein are intended
for the benefit of any third party.
(c) If anyone or more of the provisions of this Agreement, or the
applicability of any such provision to a specific situation
shall be held invalid or unenforceable, such provision shall
be modified to the minimum extent necessary to make it or its
application valid and enforceable, and the validity and
enforceability of all other provisions of this Agreement and
all other application of such provisions shall not be affected
thereby.
(d) Unless the context clearly requires otherwise, the singular
number herein shall include the plural, the plural number
shall include the singular, and any gender shall include all
genders. Titles and captions herein shall not affect the
construction of this Agreement.
(e) This Agreement shall be governed by, and construed under and
in accordance with the laws of the State of Florida, and
Manager and Owner hereby agree that the exclusive forum for
any dispute arising under this Agreement shall be a federal or
state court situated in Florida.
(f) In the event of any litigation between the parties under this
Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and court costs at all trial and
appellate levels.
(g) Time is of the essence under this Agreement.
ARTICLE VI
OTHER SPECIFIC PROVISIONS
6.1 Representations and Warranties. Each of the parties represents to the
other that (i) it is a corporation (or in the case of Owner, limited liability
company) duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation and is duly qualified to transact business in
the State of Florida, (ii) it has duly executed and delivered this Agreement,
(iii) this Agreement is binding on itself and enforceable against itself in
accordance with its terms, and (iv) no consent by any third party is required
for the execution, delivery and performance of this Agreement by said party.
Manager further represents and warrants to Owner that Manager, and all employees
and agents of Manager, has, and at all times, shall maintain in good standing,
all licenses, permits and approvals necessary for Manager's performance under
this Agreement. Manager further represents and warrants to Owner that, in the
performance of its duties, Manager shall comply with all federal, state and
local laws, ordinances and regulations applicable to the Property and its
operation of the Property pursuant to this Agreement.
17
ARTICLE VII
APPROVAL BY OWNER
Whenever Owner's approval is required under section 2.1, 2.3 or 2.4 of
this Agreement (except for any lease of more than 10% of the Building), such
approval shall be deemed given if Owner does not notify Manager that Owner
disapproves within five (5) days after Owner receives two notices from Manager
requesting such approval, provided such notices from Manager requesting such
approval, provided such notices are (i) given at least seven (7) days, but no
more than thirty (30) days, apart, accompanied by information sufficient for
Owner to make its determination. A request by Owner for more information made
within the time period for notice of disapproval shall be deemed a notice of
disapproval from Owner, subject to reconsideration pending receipt by Owner of
such additional information.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed by their duly authorized representatives on the dates set forth
below their respective signature lines, to be effective as of August 19, 2004.
Witnesses: MANAGER:
/s/ Marina Luybimova RCI BAYSHORE INC., a Florida corporation
-------------------- By: /s/ Xxxxxx X. Xxxxxxxxx, Xx., President
Print Name: Marina Luybimova -------------------------------------------
/s/ Xxxxxxxxx Xxxxxxxx
----------------------
Print Name: Xxxxxxxxx Xxxxxxxx
OWNER:
BAYSHORE LANDING, LLC, a Florida
limited liability company
/s/ Marina Luybimova By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
-------------------- --------------------------------
Print Name: Marina Luybimova Xxxxxx X. Xxxxxxxxx, Xx., Manager
/s/ Xxxxxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
---------------------- -----------------------
Print Name: Xxxxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxx, Manager
/s/ Xxxxx Amadecci
------------------
Shanne Amadecci
/s/ Marina Luybimova
--------------------
Marina Luybimova
18
STATE OF FLORIDA )
:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 20th day of August,
2004, by Xxxxxx X. Xxxxxxxxx, Xx., President of RCI BAYSHORE INC., a Florida
corporation, on behalf of the corporation. He is personally known to me or who
produced a Michigan driver's license as identification.
My Commission Expires: 4-19-07 /s/ Xxxxxxxxx Xxxxxxxx
----------------------
NOTARY PUBLIC, State of Florida
Print Name: Xxxxxxxxx Xxxxxxxx
STATE OF FLORIDA ) [NOTARY SEAL OMITTED]
:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 20th day of August,
2004, by Xxxxxx X. Xxxxxxxxx, Xx., Manager of BAYSHORE LANDING, LLC, a Florida
limited liability company, on behalf of the company. He is personally known to
me or who produced a Florida driver's license as identification.
My Commission Expires: 4-19-07 /s/ Xxxxxxxxx Xxxxxxxx
----------------------
NOTARY PUBLIC, State of Florida
Print Name: Xxxxxxxxx Xxxxxxxx
STATE OF FLORIDA ) [NOTARY SEAL OMITTED]
:
COUNTY OF MIAMI-DADE )
The foregoing instrument was acknowledged before me this 20th day of August,
2004, by Xxxxx Xxxxxxxxx, Manager of BAYSHORE LANDING, LLC, a Florida limited
liability company, on behalf of the company. He is personally known to me or who
produced a Florida driver's license as identification.
My Commission Expires: 4-19-07 /s/ Xxxxxxxxx Xxxxxxxx
----------------------
NOTARY PUBLIC, State of Florida
Print Name: Xxxxxxxxx Xxxxxxxx
STATE OF FLORIDA ) [NOTARY SEAL OMITTED]
:
COUNTY OF MIAMI-DADE )
19
EXHIBIT "A"
SCHEDULE OF LEASE COMMISSION
A. LEASES:
Commissions shall be payable in accordance with the following payment
schedule and rates:
1. Payment schedule of Commission:
a) One-third (1/3) upon lease execution by such tenant of the leased
premises.
b) One-third (1/3) upon the actual occupancy and commencement of the
term of the Lease (said payment shall not be due if the Lease
terminates prior thereto because of a tenant default).
c) One-third (1/3) upon the 12th month anniversary of the
Commencement
In the event a commission is based on percentage rent, the commission
shall be paid annually within forty-five (45) days after percentage rate has
been determined and received by Owner for each annual rental period under the
applicable Lease, based on the Net Rent for that period.
2. Rates:
a) In all leases involving Manager as leasing agent, but not
involving third -party brokers, five (5%) percent of the base
Net Rent for the fixed term of the lease.
b) In all leases involving Manager as leasing agent and also
involving third-party brokers (not affiliated with Manager),
eight (8%) (ofwhich at least three (3%) percent must be paid to
a third party broker) of the base Net Rent for the fixed term of
the lease. It is agreed and understood that Manager shall
deliver to owner a written release in favor of Owner from said
Brokers prior to receiving any commission hereunder.
c) Manager shall not be entitled to receive any commission as a
result of the existing sublease agreements with Bayshore Raw
Bar, LLC or Bayshore Restaurant, LLC; however if either of these
subleases are further assigned, transferred or subleased to an
unrelated third party arranged by Manager, Manager shall be
entitled to a commission.
B. TERMS AND CONDITION:
The above payment schedule and rates are subject to the following terms
and conditions:
20
1. Term of More Than Twenty Years
If a lease term (including any and all renewal and extension periods)
is in excess of twenty (20) years, then no commission shall be paid for
that period following the twentieth (20th) anniversary ofthe lease
commencement date.
2. Option(s) to Renew or Extend Lease or Option(s) to Expand Premises:
If a lease for which a commission is payable hereunder contains an
option(s) to renew or extend, and a lease term(s) is renewed or
extended pursuant to such option, and the tenant commences payment of
regularly scheduled monthly fixed base rental following the expiration
of all rental abatement, then subject to paragraph B.1 above, Owner
shall pay a leasing commission, with respect to the term of the
extension, but not to exceed a term of twenty (20) years from the date
of the extension, at a rate equal to the applicable rate specified in
paragraph B.2 above reduced by an amount Owner must pay to any other
broker in connection with the extension, and no other sums shall be
owed with respect to such lease.
If a lease for which a commission is payable hereunder contains an
option(s) to expand, and a tenant occupies additional space pursuant to
such option(s) and commences payment of regularly scheduled monthly
base rental following the expiration of all rental abatement, then
subject to paragraph B.1 hereof, Owner shall pay a leasing commission,
with respect to the additional space, at a rate equal to the rate
specified in paragraph B.2 above in respect of base Net Rent rental
with respect to such additional space, less the exclusions referred to
in paragraph 3 below.
3. Exclusions in Calculating Net Rent:
The following shall be excluded from gross rent under any lease in
calculating Net Rent:
a. Escalations in excess of the original base rent for each year,
as stated in the lease, including without limitation,
escalations resulting from increases in ad valorem/real estate
taxes, in operating expense pass-throughs and/or in the
Consumer Price Index or similar index resulting in a
corresponding increase to the base rental (if applicable).
b. Additional rentals for special tenant services above and over
Owner's customary tenant services, or rental attributable to
tenant improvements, repayment of tenant loans, or other
advances or expenditures made by owner.
c. Cancellation or penalty payments for termination rights.
d. Rentals payable upon continuation of a tenancy on a
month-to-month or statutory basis or any other tenancy
following the expiration or termination of the lease.
e. Cash credits, payments deferments or abatements of rent or
other concession items.
21
f Security deposits (including any amounts necessary to restore
any security deposit after application of same)
g. Rent for services or facilities available to tenant at
locations other than the demised premises covered by the
lease.
4. No leasing commission shall be deemed earned or payable on the
cancellable portion of a lease term. A commission shall be payable only
on the noncancellable portion of the lease term, and such term shall
apply for the purposes of calculating the commission earned and
payable. In the event the lease is not cancelled, then an additional
leasing commission shall be due for the remaining lease term.
The provisions hereof are subject to the terms and provisions of the Management
and Leasing Agreement to which this Exhibit A is attached.
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