SUBORDINATION OF MANAGEMENT AGREEMENT
THIS SUBORDINATION OF MANAGEMENT AGREEMENT (this "AGREEMENT") is made
as of November 25, 1998, by and among THE WASHINGTON CORPORATION, a Maryland
corporation ("MANAGER"), and ARLINGTON SQUARE LIMITED PARTNERSHIP, a Virginia
limited partnership ("OWNER"), for the benefit of METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation (together with its successors and assigns as
the lender in respect of the Loan referred to below, "LENDER").
RECITALS
A. Owner owns certain real property described on EXHIBIT A attached
hereto (the "PROPERTY"). Manager and Owner or Owner's predecessor-in-interest
are parties to a certain Management Agreement, a copy of which is attached
hereto as EXHIBIT B (such Management Agreement, together with any amendments,
supplements or other modifications thereto as described on EXHIBIT B, the
"MANAGEMENT AGREEMENT"). The Management Agreement describes Manager's and
Owner's respective rights and obligations regarding the management and leasing
of the Property.
B. Lender has made or is about to make a loan (the "LOAN") in the
principal amount of $21,500,000.00 to Owner. In connection with the Loan, Owner
has executed and delivered, or expects to execute and deliver, to Lender (i) a
Promissory Note in the original principal amount of $21,500,000.00 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the "NOTE"), (ii) a first priority Deed of Trust, Security Agreement and Fixture
Filing (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "DEED OF TRUST") and (iii) the other Loan Documents (as
defined in the Deed of Trust). All capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Deed of
Trust.
C. At Owner's request and in order to facilitate Lender's agreement to
make the Loan to Owner, Manager and Owner desire to subordinate the Management
Agreement, their respective rights under the Management Agreement and their
respective interests in the Property, if any, to the Deed of Trust and the Loan
upon the terms and conditions contained in this Agreement.
D. Manager and Owner intend that the Secured Indebtedness evidenced by
the Note and the lien and security interests of the Deed of Trust and the Loan
Documents be paramount and prior to any and all obligations, expenses and
indebtedness owing to Manager which arise from the Management Agreement and any
and all existing liens or future rights to liens of Manager or any person or
entity claiming by, through or under Manager which arise from any and all
obligations, expenses and indebtedness owing to Manager under or in connection
with the Management Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which Manager and Owner acknowledge, Manager and Owner agree for
the benefit of Lender as follows:
1. Manager and Owner hereby unconditionally subordinate and subject
the Management Agreement and all of their respective rights under the Management
Agreement, including, without limitation, any right to receive any amounts as
management fees, leasing commissions or other compensation, to the lien of the
Deed of Trust and Lender's rights and all remedies under the Loan Documents,
including, without limitation, Lender's right to receive payments of principal,
interest and all other sums due and owing from time to time under the Loan
Documents. Manager and Owner agree that the rights of Lender under the Deed of
Trust and the other Loan Documents are senior and prior to any rights of Manager
and Owner under the Management Agreement. Manager and Owner agree that they will
not, without the express written consent of Lender, modify, amend, cancel,
terminate or extend the Management Agreement.
2. Manager and Owner certify and acknowledge to Lender as follows: (a)
Lender would not make and fund the Loan without the execution and delivery of
this Agreement; (b) a true and complete copy of the Management Agreement
(including, without limitation, all modifications and amendments thereto, if
any) is attached to this Agreement as EXHIBIT B; (c) the Management Agreement
represents the entire agreement between Manager and Owner with respect to the
Property; (d) as of the date hereof, management fees (including reimbursement
for Manager's costs) payable to Manager under the Management Agreement are being
paid on a current basis; (e) Manager has no existing defenses or claims against
Owner with respect to the Management Agreement; and (f) as of the date hereof,
to the best knowledge of Manager and Owner, the Management Agreement is in full
force and effect, and no event of default on the part of either party
thereunder, or any event or condition that, with the giving of notice or the
passage of time, or both, would constitute an event of default on the part of
either party thereunder, has occurred and is continuing.
3. Manager and Owner agree that if Lender or any assignee or
transferee of Lender acquires title to the Property through judicial or
nonjudicial foreclosure or otherwise, Lender and/or any such assignee or
transferee following such acquisition of title, may, in its sole discretion,
terminate. the Management Agreement by written notice delivered to Manager, and
Lender shall have no obligations or liability to Manager on account thereof.
4. If Lender or any designee or affiliate of Lender shall acquire
possession of the Property through judicial or nonjudicial foreclosure or
otherwise, Lender or such designee or affiliate shall have the right to cause
Manager to continue its management of the Property by assuming the
obligations of Owner under the Management Agreement, but (a) without any
liability for any act or omission of Owner prior to the date of acquisition,
(b) without being subject to any offsets or advances which Manager may have
had against Owner, and (c) without being bound by any agreement or
modification of the Management Agreement entered into without Lender's
consent. If Lender or any designee or affiliate of Lender assumes the
obligations of Owner under the Management Agreement pursuant to this Section,
and if Lender or such designee or affiliate shall thereafter desire to sell
the Property to a third party, then Lender shall either (i) cause such third
party to assume the obligations of Owner under the Management Agreement or
(ii) terminate the Management Agreement by written notice to Manager without
further obligation thereunder. If a third party shall acquire title to the
Property as a purchaser at a foreclosure sale or otherwise in connection with
the exercise of any remedies
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of Lender under the Loan Documents, then such third party, immediately upon
acquiring title to the Property, shall have the right to cause Manager to
continue its management of the Property by assuming the obligations of Owner
under the Management Agreement, but subject to the conditions set forth in
clauses (a) through (c) of this Section. Following any assumption by Lender or
any designee or affiliate of Lender or any such third party, in accordance with
the terms and conditions of this Section, of the obligations of Owner under the
Management Agreement, Manager shall recognize such person or entity as the Owner
under the Management Agreement.
5. Manager agrees that Lender and its successors and assigns shall not
have any liability under the Management Agreement until such time, if any, as
Lender or such successor or assign, as applicable, shall have assumed the
obligations of Owner under the Management Agreement and, in any event, Manager
shall look only to the estate and property of Lender or its successors or
assigns in the Property for the satisfaction of Manager's remedies for the
collection of a judgment (or other judicial process) requiring the payment of
money in the event of any default by Lender or its successors or assigns under
the Management Agreement, and no other property or assets of Lender or its
successors or assigns shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Manager's remedies under or with respect to
the Management Agreement or the relationship of the parties thereunder.
6. Any notice, demand, statement, request or consent made hereunder
shall be effective and valid only if in writing, referring to this Agreement,
signed by the party giving such notice, and delivered either personally to such
other party, or sent by nationally recognized overnight courier delivery service
or by certified mail of the United States Postal Service, postage prepaid,
return receipt requested, addressed to the other party as follows (or to such
other address or person as either party or person entitled to notice may by
notice to the other party specify):
To Lender: Metropolitan Life Insurance Company
Real Estate Investments
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President
with a copy to: Metropolitan Life Insurance Company
Real Estate Investments
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Law Department
To Manager: The Washington Corporation
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
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with a copy to: Holland & Knight LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
To Owner: Arlington Square Limited Partnership
c/o The Washington Corporation
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
with a copy to: Bean, Xxxxxx & Xxxxxx P.C.
0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Unless otherwise specified, notices shall be deemed given as follows: (i) if
delivered personally, when delivered, (ii) if delivered by nationally recognized
overnight courier delivery service, on the day following the day such material
is sent, or (iii) if sent by certified mail, three (3) days after such notice
has been sent by Lender, Owner or Manager.
7. This Agreement shall be interpreted and construed in accordance with
and governed by the laws of the Commonwealth of Virginia, without regard to
conflict of laws principles.
8. This Agreement shall apply to, bind and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. As used
herein "Lender" shall include any subsequent holder of the Deed of Trust.
9. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. Signature and acknowledgment pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature and acknowledgment pages are physically
attached to the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS HEREOF, Manager and Owner have caused this Agreement to be
duly execute under seal as of the date first set forth above.
MANAGER: THE WASHINGTON CORPORATION,
a Maryland Corporation
/s/ Xxxxxxx X. Xxxxx [Seal]
-----------------------------
Xxxxxxx X. Xxxxx
President
OWNER: ARLINGTON SQUARE LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: Arlington Square, Inc.,
a Virginia corporation,
its general partner
/s/ Xxxxxxx X. Xxxxx [Seal]
-----------------------------
Xxxxxxx X. Xxxxx
President
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EXHIBIT A
LEGAL DESCRIPTION
Parcel A, ARLINGTON SQUARE, as duly dedicated, platted, and recorded in
Deed Book 2210, page 994, among the land records of Arlington County, Virginia.
EXHIBIT B
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (this "Agreement") is made as of January 1,
1998, by and between THE WASHINGTON CORPORATION (Property Management Division) ,
a Maryland corporation ("Manager"), and ARLINGTON SQUARE LIMITED PARTNERSHIP, a
Virginia limited partnership ("Owner").
W I T N E S S E T H:
WHEREAS, upon the terms and conditions herein contained, Owner desires
that manager supervise and manage the leasing and management of the improved
real property known as Arlington Square located at 0000 Xxxxx Xxxxxxx Xxxxx in
Arlington, Virginia, as more fully described in Exhibit A attached hereto (the
"Property") , and Manager desires to so supervise and manage the leasing and
management of the Property for Owner.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it is agreed as
follows:
1. DESIGNATION AND MANAGEMENT. Owner hereby designates and appoints
Manager as its sole and exclusive agent for the management of the
Property, and Manager hereby accepts such designation and
appointment and agrees to manage the Property in accordance with
the terms and conditions herein provided.
2. TERM. This Agreement shall be effective as of the date hereof and
shall continue in force and effect until December 31, 1998,
unless sooner terminated pursuant to any provision hereof. After
December 31, 1998, this Agreement may be renewed on such terms and
subject to such conditions, as the parties may agree.
3. STANDARDS. Manager shall apply prudent business practices in
managing the Property, and use reasonable care and diligence in
carrying out its responsibilities hereunder.
4. BUDGET. Within 60 days after the effective date hereof. and within
go days prior to the beginning of each fiscal year of Owner
hereafter, Manager shall prepare and submit to Owner, for its
consideration and approval, a budget setting forth the estimated
receipts and expenditures (capital, operating and other) of the
Property for the then upcoming fiscal
year of Owner, including a reasonable contingency reserve for the
period covered by the budget. Owner shall approve or disapprove
such budget within 30 days of such submission. If Owner does not
respond within 30 days, Manager may deem the proposed budget
approved and proceed in accordance therewith, until advised to
the contrary by Owner. Manager shall make all revisions to the
budget that may be reasonably requested, whether before or after
approval thereof, by Owner. When approved by Owner, Manager shall
implement the budget (as approved, the "Budget"), and shall be
authorized make the expenditures and incur the obligations
provided for in the Budget and shall monitor and analyze the
implementation thereof.
5. GENERAL MAINTENANCE, OPERATION AND REPAIRS. Subject to the
limitations hereinafter provided, owner authorizes Manager to make
or cause to be made, in the name and at the expense of Owner,
repairs and capital improvements to the Property as may be
advisable or necessary to maintain the Property in good order, to
purchase such supplies and operating equipment as may be advisable
or necessary, to enter into contracts and to pay bills for
electricity, gas fuel, telephone, extermination, trash collection,
water, rent, and other normal operating services, as Manager shall
deem necessary or advisable. Manager shall secure the written
approval of owner for all expenditures or the incurring of any
obligation involving a sum in excess of Ten Thousand Dollars
($10,000) for any one item, except for expenditures made and
obligations incurred (i) for emergency repairs if, in the opinion
of Manager, such repairs are necessary to protect the Property or
any part thereof from damage and there is not sufficiency time to
obtain Owner's approval; (ii) to maintain services to the tenants
as called for by their leases; or (iii) pursuant to the Budget.
Manager shall promptly notify owner of all expenditures or
obligations in excess of $10,000 for emergency repairs that have
been incurred and for which there was not sufficient time to
obtain Owner's prior approval. In the event that approval by Owner
is required pursuant to this paragraph, if Owner shall not
disapprove such expenditures within tan (10) business days after
the request has been submitted, such expenditures shall be deemed
and approved.
6. COLLECTION OF RENTS AND ENFORCEMENT OF LEASES. Owner appoints
Manager its true and lawful attorney-in-fact to collect all rents
due from tenants of the Property and any other income from the
Property. Manager shall monitor percentage rents, if any, due
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from tenants and, where advisable, obtain ac the expense of owner,
an independent audit to verify the accuracy of any such percentage
rents. In addition, manager shall monitor all CPI, and any other
rent escalations, pass-thru expenses, and common area operating
charges that may be due from time to time from each tenant,
according to the particular terms of each tenant's lease
agreement. Manager shall take all proper actions to collect rent
and to enforce compliance with the terms of all leases, including
the filing and prosecution of actions to recover possession of any
leased space or to recover any rent, and, subject to Owner's prior
approval, to settle, compromise or release such actions. All
necessary legal fees and costs of any such actions shall be borne
by owner.
7. BOOKS RECORDS AND REPORTS. Manger shall keep complete and accurate
books of account with respect to the operation of the property.
Such books shall be maintained at Manager's office, or such other
place as the parties hereto may agree upon, and Owner shall have
access to such books at all reasonable times. Such books shall be
kept on the basis of Owner's fiscal year, using such method of
accounting as Owner may direct. With Owner's prior approval,
Manager shall consult with Owner's accountants with regard to tax
matters and prepare reports and recommendations to Owner as may be
necessary or appropriate. Manager shall monitor and analyze
refinancing alternatives for the Property and report to Owner
periodically on the results of such analyses. In addition to
furnishing to Owner copies of all executed leases and the monthly
reports required pursuant to Paragraph 13 hereof, if requested by
Owner, Manager shall render to Owner an annual report within 60
days after the end of each fiscal year showing the receipts and
disbursements for such year and a comparison with the Budget
therefor. Upon the request of Owner, such report shall be
certified by a certified public accountant and Owner shall
reimburse Manager for any additional cost incurred as a result of
such certification. The annual report shall also include all
income tax information and a copy of the tax return, including a
balance sheet and operating statement for the Property (the
preparation of which shall be the responsibility of Manager), the
status of any and all leases of the property, including whether
any defaults exist under any leases, all other material
information regarding the Property and any other information
regarding the property that may be requested by the Owner.
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8. PERSONNEL AND EMPLOYEES. Manager shall assign to the management of
the Property on a full or part-time basis, as appropriate, such of
its executive and office personnel and general bookkeeping staff
as may be required to provide proper supervision and management of
the Property. Such staff shall be comprised at all times of
sufficient personnel to carry out efficiently the duties,
obligations and functions of manager hereunder. Manager shall
supervise the work of and, in the name and at the expense of
Owner, hire, discharge and pay salaries and wages of. all
managers, engineers, janitors and other building employees
necessary to accomplish the day-to-day responsibilities of
manager, including general maintenance and repair work. Manager
agrees to use reasonable care and diligence in the hiring of such
employees. Owner shall pay, or bear the cost of, all applicable
wages and other compensation (including social security taxes,
workers, compensation and unemployment insurance) of such xx.xxxx
employees in an amount proportionate to the percentage of their
working time that is devoted to the Property. Manager will not
discriminate against any employee or applicant for employment
because of race, creed, color, national origin or sex, and will
use its best efforts to comply with all applicable federal and
local laws and ordinances respecting employment practices.
9. TENANT ALTERATION AND INSTALLATIONS: MAJOR CONSTRUCTION WORK.
(a) TENANT ALTERATIONS AND INSTALLATIONS. Manger shall review
plans and specifications for tenant alterations and
installations other than initial tenant improvement work
taking place prior to the occupancy of the tenant and may,
with the prior consent of the Owner, consent to and approve
such alterations and installations provided for in the
respective leases of the tenants, subject to compliance by
the tenants with the terms and conditions of their leases.
With respect to alterations and installations not
specifically provided for by such leases, Manager, with the
consent of Owner, is authorized to consent to and approve
such work provided: (i) such alterations and installations
are not in violation of any other tenant leases; (ii) such
alterations and installations are made solely at the tenant's
expense and in accordance with all applicable laws; (iii)
such alterations and installations do not affect the basic
structure or systems of
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the building or interfere with other tenants; and (iv) the
tenant has agreed in writing (whether in an amendment to its
lease or otherwise) that, at the expiration or termination of
its lease and at the election of the landlord, it shall
remove any such alterations and installations. Manager shall
supervise all tenant: alterations and installations and shall
insure that all such work is completed in a timely, good and
workmanlike manner and that any work that is to be performed
at Owner's expense is kept to the minimum expense required
and full value is received for such expense. No additional
fee shall be paid by Owner to Manager for Manager's
supervision of any tenant alterations and improvements.
Manager shall employ with prior approval of the owner and, at
Owner's expense, such outside professionals as Manager and
Owner may deem necessary, including, but not limited to,
architects, engineers and construction managers.
(b) MAJOR CONSTRUCTION WORK. In the event that Owner decides to
undertake any major renovation or construction project
related to the Property excluding tenant alterations, and
Owner aid Manager desire that Manager oversee such project,
Owner and Manager shall enter into a senate agreement
governing the respective obligations and duties of the
parties and the compensation of Manager with respect thereto,
it being understood that supervision of any such project by
Manager is beyond the scope of Manager's duties hereunder.
For purposes hereof, a "major renovation or construction
project" shall be deemed to be any project which would cost
in excess of Fifty Thousand Dollars ($50,000).
10. COMPLIANCE WITH LAW. Manager shall take all actions to obtain and
renew all government approvals, licenses and permits applicable
to' the Property, and shall take all actions to remain apprised of
and to effect substantial compliance with all laws, rules,
ordinances, statutes and regulations of any governmental authority
applicable to the Property or as to any provisions of the leases.
in the event such compliance is undertaken in the name and on
behalf of Owner, such compliance shall be at owner's expense. Upon
obtaining knowledge thereof, Manager shall promptly notify Owner
of any violation of any applicable law and shall advise Owner as
to any potential violation of
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any new applicable law. in either case, Manager shall advise Owner
of steps required to cure such violation or possible future
violation. including a recommendation as to whether or not Owner
should contest such violation or such applicable law or the
application thereof to the Property or Owner. Unless owner shall
elect to contest such violation or applicable law, and subject to
the limitations set forth in Paragraph 6 hereof, manager shall
take the steps necessary to correct such violation or otherwise
necessary to comply with applicable law. If Owner elects to
contest such violation of applicable law, Manager shall assist
owner in such contest and shall supervise and consult with any
professional advisers retained to conduct such contest. Nothing
herein s1hall be construed to permit Manager to fail to cure
promptly any such violation or fail to comply promptly with any
applicable law, if such failure would or might expose Manager or
Owner to criminal liability.
11. PROPERTY TAXES - Manager shall pay promptly when due all ad
valorem taxes, real estate taxes, special assessments, personal
property taxes, water and sewer charges, if any, and all other
taxes, assessment or charges which may be levied or assessed
against the Property from time to time. manager shall receive and
verify bills or statements for such taxes, assessments and other
charges. Manager shall also make arrangements to transmit copies
of paid receipts for such taxes or assessments to any lender of
owner, if requested by Owner. Manager shall advise Owner as to
any material increase in such taxes, assessments and other
charges, as to whether the amount thereof should be challenged and
as to any means available for the reduction of same, together with
its recommendations as to the foregoing. At Owner's request,
Manager shall institute, in Owner's name, appropriate protests or
challenges to such taxes, assessments or other charges and shall
take other appropriate steps to have the same reduced.
12. INSPECTIONS. Manager shall make regular physical inspections of
the Property and shall make recommendations to Owner regarding
maintenance or conservation work which may be necessary or
appropriate to preserve or improve the value and profitability of
the Property. Manager shall promptly notify Owner of any
substantial damage to the Property or any personal injury or
property damage suffered by any person on or with respect to the
Property of which Manager has knowledge, and shall make
recommendations with respect thereto.
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Manager shall forward to Owner all summonses, subpoenas and other
legal documents served upon Manager with respect to the Property
relating to actual or alleged liability or owner, Manager or the
Property, together with its recommendations with respect thereto;
provided, however, that Manager shall take no action in response
to any such documents without the prior written consent of owner,
except in cases of emergency.
13. DISBURSEMENTS AND REMITTANCES. Manager shall disburse, deduct and
pay from the rents all amounts required to be disbursed or paid in
connection with the repair, maintenance and operation of the
Property, including actions necessary to comply with all
applicable statutes, ordinances, laws, rules, and regulations of
any governmental authority having jurisdictions over the
Property and in the carrying out of Manager's duties hereunder.
Manager shall render to Owner a monthly statement of rents and
other revenues collected, expenses and other costs paid and
reserves set aside, in accordance with the Budget, and remit any
net balance shown to be due Owner on or before the fifteenth
(15th) day of the following month. The disbursements for expenses
and other costs shall include the compensation of Manager on the
basis provided for hereinafter. In the event that the
disbursements paid by Manager exceed the lease rentals and other
amounts collected for the account of owner by Manager, Owner
agrees to pay such excess to Manager promptly upon demand.
However, nothing herein shall obligate Manager to advance any
funds on behalf of Owner.
14. COMMISSIONS AND FEES.
(a) MANAGEMENT FEE. At the end of each month, owner shall pay to
Manager as compensation for its services under this Agreement
an amount equal to five percent (5%) of the Gross Receipts
(as defined below) from the operations of the Property for
such month, but in no event shall such an amount be less than
$3,000 each month. Such compensation shall be in Addition to
all amounts paid to or retained by Manager pursuant to this
Agreement as reimbursement for fees and expenses incurred on
behalf of Owner. The term "Gross Receipt" shall mean all
operational revenues of every kind and nature received from
the use or occupancy of the Property. Any rebate or discount
obtained by Manager in connection with fees and expenses
incurred on behalf of Owner shall inure to the benefit of
Owner.
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(b) LEASING COMMISSIONS. Owner shall pay any and all leasing
commissions which are payable to third party leasing agents
who are hired or retained by Manager. Manager shall not be
entitled to receive leasing commissions with respect to lease
agreements as to which a commission is paid to a third party
leasing agent. In the event Manager procures a tenant without
the assistance of a third party leasing agent (or if any
tenant expands its leased premises at the Property), Manager
shall be entitled to receive a separate real estate
commission therefor, which commission shall not exceed an
amount that would have been payable to a third party leasing
agent in the Washington, D.C. area. Manager shall not be
entitled to any commission under this Paragraph 14.b) on
account of the renewal of any lease with a tenant as to which
a third party leasing commission has already been paid.
15. INSURANCE AND SETTLEMENT OF CLAIMS. Manager shall obtain and
maintain on behalf of Owner fire and extended coverage insurance,
general comprehensive public liability policies and all other
insurance, in amounts specified by Owner. Manager shall be named
as co-insured with owner an the public liability insurance.
Manager shall have the authority, on behalf of Owner, to settle or
release any insurance claims; provided, however, that no
settlement or release of a claim in excess of five hundred dollars
($500) shall be agreed to without Owner's prior written consent.
16. INDEMNIFICATION. Owner agrees (a) to indemnify and hold Manager
and its subcontractors free and harmless from all damage suits in
connection with the leasing and management of the property and
from liability for injuries suffered by any employee or other
person; (b) to reimburse Manager upon demand for any sums which
Manager is required to pay as an expense in defense of, or in
settlement of or in connection with, any claim, civil or criminal
action, proceeding, charge or prosecution made, instituted or
maintained against Manager or its subcontractors, or Owner and
Manager or its subcontractors, jointly or severally affecting or
due to the condition or use of the Property, or acts or omissions
of manager or its employees or subcontractors in connection
therewith, or otherwise; (c) to defend promptly and diligently, at
Owner's sole expense, any claim, action or proceeding brought
against Manager or its subcontractors, or Owner and Manager or its
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subcontractors, jointly or severally, arising out of or in
connection with any of the foregoing, and to hold harmless and
fully indemnify Manager from any judgment, loss or settlement on
account thereof; provided, however, that (i) Manager shall
maintain its own policy of liability insurance and (ii) nothing
herein contained shall cause Owner to incur any liability for, or
relieve Manager or its subcontractors from, liability or
responsibility to owner or any other party for Manager's or its
subcontractors' gross negligence or willful misconduct, and
Manager agrees to indemnify and hold harmless Owner for any
liability, cost or expense incurred by Owner by reason of
manager's gross negligence or willful misconduct. Manager and
Owner shall promptly notify each other of any claims made against
Owner, Manager or any subcontractor of Manager.
17. SUBCONTRACTING BY MANAGER. Nothing herein shall preclude Manager
from subcontracting all or any portion of its duties and
obligations hereunder with Owner's prior written approval;
however, Manager shall remain solely responsible for fulfilling
its obligations to Owner under the terms of this Agreement. In no
event shall any such subcontracts create or give rise to any
rights, claims or actions by such subcontractor against Owner.
Manager is specifically authorized and directed to enter into an
appropriate agreement for the management and operation of the
garage, on such terms as Owner may approve.
18. TERMINATION. This Agreement shall be terminable by either party
under 60 days written notice, upon the happening of either of the
following events: (i) a material breach of this Agreement by the
party to which notice of termination is given, which breach is not
cured within 45 days following written notice thereof; or (ii) a
sale or foreclosure of the Property. Upon termination hereof, all
rights and obligations of the parties hereto shall cease, provided
that all monies then due and owing from either party to the other
shall be paid. Upon termination of this Agreement for any reason,
Manager shall deliver the following to Owner or to Owner's duly
appointed agent within 2.5 days after the date of termination.
(a) The books and records relating to the Property, together with
a final accounting, reflecting the balance of income and
expenses for the Property as of the date of termination;
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(b) Cash in an amount equal to all amounts then due Owner
hereunder, including any security deposits or other payments
of tenants in the Property held by Manager, less all amounts
due Manager an account of management and leasing commissions
and any other sums owed Manager hereunder;
(c) Assignment of any escrow accounts in form approved by Owner;
and
(d) All contracts for services and supplies, all space plans and
drawings, leases and lease files, unpaid bills, all other
documents executed by or on behalf of owner, and copies of
all other documents relating to Manager's services under
this Agreement, as Owner may request.
19. NOTICES All notices hereunder shall be given in writing and either
personally delivered or mailed by registered or certified mail,
postage prepaid, addressed as follows:
IF TO OWNER:
Arlington Square Limited Partnership
c/o The Washington Corporation
000X Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
IF TO MANAGER:
The Washington Corporation
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Such addresses may be changed from time to time by either party by
serving notice as provided above.
20. INDEPENDENT CONTRACTOR RELATIONSHIP. Nothing herein shall be
deemed to have created any joint venture or partnership
relationship between Owner and Manager. At all times during the
performance of its duties and obligations hereunder, Manager shall
be deemed to be acting as an independent contractor.
21. GOVERNING LAW. This Agreement shAll be governed by the laws of the
state in which the Property is located.
22. MISCELLANEOUS PROVISIONS.
(a) SUCCESSORS AND ASSIGNS. Subject to the restrictions on
assignment set forth below, this Agreement shall be binding
upon the
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parties hereto and their successors and assigns.
(b) AMENDMENT; WAIVER. This Agreement may not be changed orally
but only by a writing executed by both parties hereto. No
waiver of any breach of any covenant, condition or agreement
contained herein shall be construed to be a subsequent waiver
of that covenant, condition or agreement or of any subsequent
breach thereof or of this Agreement. Any such waiver or
consent shall be effective only in the specific. instance and
for the purposes for which given.
(c) ASSIGNMENT. This Agreement may not be assigned by Manager
without the prior written consent of Owner. owner retains
full rights to assign its rights under this Agreement to any
party to which title to the Property is hereafter transferred
by Owner.
(d) NO THIRD PARTY BENEFICIAL RIGHTS CREATED. The parties hereto
expressly declare that it is their joint and mutual intention
that this Agreement shall not be construed as giving or
conferring any rights or benefits whatsoever to or upon any
other persons or entities other than Manager and Owner.
(e) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding Of the parties with respect to
the subject matter hereof, and supersedes all prior
agreements, negotiations and discussions between the parties
concerning the subject matter hereof.
(f) SEVERABILITY. if any one or more of the provisions contained
in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective as of the day and year first above written.
MANAGER:
THE WASHINGTON CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, President
OWNER:
ARLINGTON SQUARE LIMITED PARTNERSHIP,
a Virginia limited partnership
By: Arlington Square, Inc.,
its General Partner
By: /s/Xxxxxxx X. Xxxxx, President
--------------------------------
Xxxxxxx X. Xxxxx, President
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