Exhibit 10.116
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT
by and between
Bryce Mountain, Inc.
"Owner"
and
Xxxxxx & Associates, Inc.
"Property Manager"
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT
Premises: 0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx
THIS AGREEMENT ("Agreement") is made as of the 1st day of January,
1996 by and between Bryce Mountain, Inc. ("Owner"), and Xxxxxx & Associates,
Inc. ("Property Manager"):
WITNESSETH:
WHEREAS, Owner is the owner of the above described premises, and
Owner wishes to avail itself of the ability and experience of Property Manager
in the on-site management of said premises; and
WHEREAS, Property Manager is willing to provide such management
services to said premises on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants herein contained
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
ENGAGEMENT AND AUTHORITY OF PROPERTY MANAGER
1.1 Owner hereby engages Property Manger as an independent
contractor in the management, leasing and operation of the above described
property (the "Premises"), and subject to the limitations set forth herein,
hereby authorizes and directs Property Manager to exercise such powers with
respect to the Premises as may be necessary for the performance of Property
Manager's obligations under Article II hereof, and Property Manager accepts such
engagement on the terms and conditions hereinafter set forth. Property Manager
shall have no right or authority, express or implied, to commit or otherwise
obligate Owner in any manner whatsoever except to the extent specifically
provided herein.
ARTICLE II
PROPERTY MANAGER'S AGREEMENTS
2.1 Property Manager shall conduct the ordinary and usual business
affairs of Owner relating to the management, leasing and operation of the
Premises in an efficient and satisfactory manner in accordance with first class
buildings in the Old Town, Alexandria area, and
3
shall implement, or cause to be implemented, the policies of Owner for the
conduct of such business affairs in accordance with the guidelines provided in
this Agreement. The scope of Property Manager's authority shall be limited to
said guidelines. Property Manager agrees to use its best efforts in the
management, leasing and operation of the Premises in an efficient and
satisfactory manner in accordance with first class buildings in the Old Town,
Alexandria area and said guidelines, and agrees to comply with Owner's written
and oral instructions, and in connection therewith:
(a) To contract, for periods limited to Owner's possession of the
Premises, but not in excess of one year without prior written approval of
Owner, in the name and at the expense of Owner, for gas, electricity,
water, and such other services at commercially reasonable rates as are
necessary or convenient for the proper operation of the Premises. Service
contracts shall be written to include a right of the Owner to terminate
the agreement upon thirty (30) days' written notice, unless otherwise
agreed to by Owner in writing.
(b) To select, employ, pay, supervise, direct and discharge all
employees necessary for the efficient, effective, safe, and proper
operation and maintenance of the Premises, in number and at wages not in
excess of those provided for in the Approved Budget (as defined below) or
as approved by the Owner in writing, and to use reasonable care in the
selection and supervision of such employees, as reviewed and approved by
Owner. Property Manager shall be responsible for complying with all laws
and regulations and collective bargaining agreements, if any, affecting
such employment, including without limitation laws and regulations
governing worker's compensation insurance and compulsory non-occupational
disability insurance. Property Manager is and will continue throughout the
term of this Agreement to be an Equal Opportunity Employer. All persons
employed or utilized in connection with the operation and maintenance of
the Premises shall be employees of Property Manager, or of such
contractors as may be retained by Property Manager pursuant to this
Agreement, and not employees of Owner; but all costs associated with the
operations of the Premises that have been included in the Approved Budget,
or that have otherwise been approved by Owner, shall be reimbursed to
Property Manager by Owner. Unless included in the Approved Budget or
allowed elsewhere in this Agreement, all leasing and marketing will be at
Property Manager's cost.
(c) To keep the Premises in a safe, clean, and sightly condition and
to make (or cause to be made by contractors retained by Property Manager
pursuant to contracts in the name of Owner) all repairs, alterations,
replacements, and installations, do all decorating and landscaping and
purchase all supplies necessary for the proper operation of the Premises
in a first class condition, the fulfillment of Owner's obligations under
any lease or other agreement of which Property Manager has notice, and the
compliance with all known governmental and insurance requirements,
provided that Property Manager shall
4
not make any non-budgeted purchase or do any non-budgeted work, the cost
of which shall exceed the amount set forth in Exhibit A, paragraph 3,
without obtaining in each instance, the prior approval of Owner, except in
circumstances which Property Manager shall reasonably deem to constitute
an emergency requiring immediate action for the protection of the Premises
or of tenants or other persons or to avoid the suspension of necessary
services. Property Manager shall notify Owner immediately of the necessity
for, the nature of, and the cost of, any such emergency repairs or
compliance. If Owner shall require, Property Manager shall submit a list
of contractors and subcontractors performing tenant work, repairs,
alterations or services at the Premises under Property Manager's direction
to Owner for Owner's approval. Owner may from time to time require that
any or all construction or other contracts have Owner's prior written
approval or otherwise comply with criteria set forth on Exhibit B or
otherwise established by Owner and delivered to Property Manager.
Property Manager shall supervise all tenant improvements within the
Premises as a part of its duties. Owner shall not pay Property Manager any
fees for any such construction services.
It is understood that Property Manager shall not be required to
undertake the making or supervision of any reconstruction of the Premises
or major capital improvements except in the case of an emergency. If
Property Manager supervises the reconstruction of the Premises or major
capital improvement for the Owner, Owner may agree to pay Property Manager
a fee for such services upon the mutual agreement of Owner and Property
Manager. Notwithstanding the foregoing, Property Manager acknowledges that
Owner may, from time to time, enter into separate agreements with third
party consultants (including affiliates and/or subsidiaries of Property
Manager) to manage and supervise construction work at the Premises. Upon
Owner's request, Property Manager shall assist Owner in facilitating the
efforts of such third party consultants and, if substantial time or
resources of Property Manager shall be required in connection therewith,
Property Manager may receive an additional reasonable fee for such
services, based on prior written approval from Owner. The determination as
to whether substantial time or resources of Property Manager are required
shall be made by Owner.
Owner shall receive the benefit of all discounts and rebates
obtainable by Property Manager in its operation of the Premises. Property
Manager agrees to take advantage of such discounts and rebates wherever
available and reasonable.
If Property Manager desires to contract for repair, construction, or
any other service described in this section 2.1 (c) with a party with
respect to which any partner, employee, or shareholder of Property Manager
holds a beneficial interest, such interest shall be disclosed to, and
approved in writing by Owner before such services are procured.
5
The cost of any such services shall likewise be at competitive rates,
notwithstanding that tenants of the Premises may be required to pay such
costs.
Property Manager, or a general contractor working under the
supervision of Property Manager, is authorized to make and perform work at
a tenant's request and at such tenant's sole expense ("Tenant Work") to
the extent such Tenant Work is permitted by the tenant's lease, and
Property Manager may collect from tenants requesting such work or from
general contractors performing Tenant Work, for Property Manager's sole
account, a reasonable charge for supervisory overhead on all such Tenant
Work, other than with respect to initial build-out; provided, however,
that Owner shall have no liability or obligation for any such Tenant Work.
If Property Manager performs the Tenant Work at tenant's request for a
supervisory overhead fee at tenant's expense, Owner shall not also be
responsible to pay supervisory overhead fee to Property Manager. Property
Manager, however, shall not require any train to use Property Manager, its
subsidiary, affiliate or related corporation to perform any Tenant Work.
(d) To handle promptly complaints and requests from tenants in a
first class manner and notify Owner immediately in writing of any major
complaint made by a tenant or any alleged default on the part of Owner.
(e) To notify Owner immediately in writing (together with copies of
supporting documentation) of any notice of violation of any governmental
requirements; any known defect in the Premises; any fire or other damage
to the Premises; and, in the case of any serious fire or other serious
damage to the Premises, to also immediately provide telephone notice
thereof to the insurance carrier, so that an insurance adjuster can view
the damage before repairs are started, and complete customary loss reports
in connection with fire or other damage to the Premises. The Property
Manager shall use its best efforts to comply with all laws regarding the
leasing, use, operation, and maintenance of the Premises.
(f) To notify the general liability insurance carrier for the
Premises and Owner immediately in writing of any personal injury or
property damage occurring to or claimed by any tenant or third party on or
with respect to the Premises and to promptly forward to the carrier, with
copies to Owner, any summons, subpoena, or other like legal document
served upon Property Manager relating to actual or alleged potential
liability of Owner, Property Manager, or the Premises.
(g) To advise Owner of pertinent covenants in leases in which the
tenants to hold Owner harmless with respect to liability from any
accidents and/or to replace broken glass, and to secure from such tenants
and forward to Owner any certificates of insurance, and renewals thereof,
required to be furnished by the terms of such leases.
6
(h) At the option of Owner, expressed to Property Manager in
writing, to receive and collect rent and all other monies payable to Owner
by all tenants and licensees in the Premises and to deposit the same
within three (3) business days in the bank named in Exhibit A, paragraph 4
(the "Bank"), in an account approved by Owner and in the name of and for
the benefit of Owner (the "Bank Account"), which Bank Account shall be
used exclusively for such funds which shall in no event be commingled with
funds of Property Manager and to disburse such funds from said Bank
Account solely in payment for, or to reimburse Property Manager for
payment of, authorized expenses incurred in connection with the operation
of the Premises in accordance with the then current budgets approved by
Owner pursuant to section 2.5 of this Agreement and otherwise in
accordance with the terms and provisions of this Agreement. Property
Manager or any affiliate thereof shall obtain Owner's written approval on
all payments to Property Manager and all Payments in excess of $25,000
with the exception of utility payments. In the event state law requires
that tenant security deposits be held in a separate account, such account
shall be established by Property Manager in the name of Owner as approved
in writing by Owner. If requested in writing, Owner's designated
representative will be a signatory on all bank accounting maintained by
property Manager. Property Manager acknowledges and agrees that Property
Manager shall act in a fiduciary capacity for the benefit of Owner with
respect to the Bank Account.
(i) Upon the prior written approval of Owner, to institute all
necessary legal actions or proceedings for the collection of rent or other
income from the Premises, or the ousting or dispossessing of tenants or
other persons therefrom, and all other matters requiring legal attention.
Property Manager agrees to use its best efforts to collect rent and other
charges from tenants in any manner and to pursue Owner's legal remedies
for nonpayment of same. Owner reserves the right to designate or approve
counsel and to control litigation of any character affecting or arising
out of the operation of the Premises. Property Manager agrees to fully
cooperate with said counsel.
(j) To maintain fidelity bond/crime insurance naming Owner as loss
payee as its interest may appear with limits of not less than $1 million,
commercial general liability insurance with a combined single limit of not
less than $5 million each occurrence and general aggregate, errors and
omissions coverage with limits of not less than $1 million.
(k) To notify Owner immediately of any fire, accident or other
casualty, condemnation proceedings, rezoning or other governmental order,
lawsuit or threat thereof involving the Premises and any material
violations relative to the leasing, use, repair and maintenance of the
Premises under governmental laws, rules, regulations, ordinances, or like
provisions. Property Manager will not bear responsibility for
noncompliance, unless such noncompliance is due to the gross negligence or
willful misconduct of Property Manager or its employees.
7
(1) To assist in Owner's ad valorem tax review program and to
cooperate with Owner, when so requested, in efforts to reduce such taxes.
Property Manager shall promptly furnish Owner with copies of all
assessment notices and receipted tax bills.
(m) To promptly comply with all laws, ordinances, orders, rules,
regulations and requirements of all Federal, State and municipal or other
governmental authorities, courts, departments, commissions, boards and
offices, any national or local Board of Fire Underwriters or Insurance
Services Office having jurisdiction, or any other body exercising
functions similar to those of any of the foregoing which may be applicable
to the Premises or any part thereof or to the leasing, use, repair,
operation and management thereof. In the event such compliance is
undertaken in the name and on behalf of Owner, such compliance shall be at
Owner's expense, unless such compliance is solely of an administrative
nature. Property Manager shall give prompt notice to Owner of any known
violation or written notice of alleged violation of such laws, rules,
regulations and requirements of which Property Manager has knowledge and
Property Manager shall not bear responsibility for failure of the Premises
or the operation thereof to comply with such laws, rules, regulations and
requirements unless Property Manager has committed gross negligence or a
willful act or omission in the performance of its obligations under this
Agreement or in the performance of any other duties owed to Owner or third
parties by Property Manager.
(n) Property Manager shall be required to maintain an on-site office
with specified business hours, provided that Owner will provide rent-free
space.
(o) Property Manager shall require all tenants to comply with all of
the provisions of their leases and any rules and regulations applicable to
the Premises, unless otherwise directed in writing by Owner.
(p) Property Manager shall promptly pay all taxes, utilities, and
other bills relating to the operation of the Premises, unless otherwise
limited in writing by Owner.
2.2 Property Manager agrees to prepare and submit to Owner initial
monthly reports relating to the management and operation of the Premises for the
preceding calendar month, on or before the tenth (10th) day of each month with
all additional reports due on or before the twentieth (20th) day of the month,
in form satisfactory to Owner, such form to be subject to change from time to
time, as Owner shall reasonably require. The Property Manager shall also report
to Owner such other information known to Property Manager of which Owner should
be made aware. Property Manager shall remit to Owner the net receipts from the
Premises, including any net income received from the garage operation as
described in Section 2.10, as directed by Owner within ten (10) days after
receipt thereof. Property Manager agrees that Owner shall have the right to
require the transfer to Owner at any time of any funds in the
8
Bank Account considered by Owner to be in excess of an amount reasonably
required by Property for disbursement purposes in connection with the Premises.
Property Manager agrees to prepare and submit reports to the relating to the
leasing of the Premises in form satisfactory to Owner as requested by Owner.
Property Manager agrees to keep records with respect to the leasing,
management, and operation of the Premises, including records of receipts and
disbursement, all of which shall be deemed the property of Owner, and to retain
those records until the termination of this Agreement at which time Property
Manager shall immediately turn over all such records to Owner. Owner shall have
the right to inspect such records and audit the reports required by this Section
during business hours until such time as all such records have been delivered
over to Owner following the termination of this Agreement in accordance with
Section 5.2 hereof.
2.3 In connection with its management of the Property, Property
Manager shall acquire and utilize such computer software as Owner may require.
Property Manager shall keep such software current and install all upgrades,
enhancements and new versions of the software which may be from time to time
released by the vendor and/or by Owner (collectively, the "Required Software").
Property Manager shall cause all personnel who use the Required Software to
attend and complete basic system training programs offered by the vendor and
licensor of the Required Software. Property Manager shall also be responsible
for obtaining and maintaining any equipment required for proper operation of the
Required Software, including, but not limited to, the communications equipment
required for transmission of data to Owner. Owner may from time to time require
additional or substitute software to be included among the Required Software and
shall provide not less than sixty (60) days' advance notice to Property Manager
of such additions or substitutions. Owner shall not be unreasonable with respect
to the frequency of changes in the Required Software. Property Manager shall use
the Required Software to enter, process, store, and transmit data to Owner, as
Owner may from time to time require and shall comply with any data reporting
standards as Owner may establish. Owner shall be responsible for all costs of
the required software, initial training, and additional equipment that is
required solely by Owner and used by Property Manager solely for the Premises.
2.4 Property Manager shall ensure such control over accounting and
financial transactions as is reasonably required to protect Owner's assets from
loss or diminution due to negligence (when Property Manager is acting outside of
the scope of its employment or in violation of this Agreement), gross negligence
or willful misconduct on the part of Property Manager's associates or employees.
Losses caused by such gross negligence or willful misconduct shall be borne by
Property Manager. Owner shall have the right to review control procedures and
within reason may require changes to the existing procedures.
2.5 Property Manager shall prepare and submit to Owner proposed
operating and capital budgets for the promotion, leasing, operation, repair, and
maintenance of the
9
Premises. Preliminary versions of the budget ("Initial Budget") will be due as
stipulated by Owner based on a schedule to be provided by Owner. Property
Manager shall prepare an update of the Initial Budget ("Updated Budget") every
three (3) months reflecting any changes that have occurred since the submission
of the Initial Budget and incorporating Owner's comments. All budgets will be
prepared on an accrual basis showing a month by month projection of income and
expense and capital expenditures for the forthcoming calendar year and proposed
leasing guidelines together with a marketing plan for all space that is vacant
or that is scheduled to become vacant during the next year. The Initial Budget
and Updated Budget shall also contain any other reports or data which the Owner
in its reasonable discretion deems to be relevant to the management and/or
leasing of the Premises. Property Manager will also provide Owner with
additional reports, as reasonably requested from time to time by Owner.
After receiving Owner's approval of the Updated Budget ("Approved
Budget"), Property Manager shall implement such budget and shall be authorized
to make the expenditures and incur the obligations provided for in the budget
except as set forth herein. Property Manager shall obtain Owner's specific
approval prior to contracting for any capital expenditures, even if already
included in the Approved Budget. Except for amounts of less than five percent
(5) of any line item or except in the event of an emergency, Property Manager
shall not spend any non-budgeted amount in excess of that specified on Exhibit
A, paragraph 3, without Owner's prior written approval. Property Manager shall
operate the Premises according to the previous year's Approved Budget until
current budget is fully approved. Property Manager shall furnish to Owner prior
to January 31 an unaudited statement of income and disbursements reflecting the
operation of the Premises for the previous calendar year on an accrual basis.
Property Manager is not allowed to reclassify expenses to meet the Approved
Budget. Property Manager must charge all items to the appropriate account within
the Approved Budget.
2.6 Subject to the terms hereof, Property Manager agrees to use it
best efforts to cause the Premises to be rented and kept rented to desirable
tenants, satisfactory to Owner, and in connection therewith:
(a) Subject to the terms hereof, to negotiate leases and renewals of
leases at appropriate times on an exclusive basis, it being understood
that all inquiries to Owner with respect to leasing any portion of the
Premises shall be referred to Property Manager. Property Manager is
responsible for keeping abreast of all time limits and requirements in the
leases (by way of example and not of limitation, when options are arising,
leases are expiring, etc.), and act in a timely manner to give any
required notice thereof in accordance with all tenant leases. All leases
and renewals must be prepared by counsel selected by Owner and reviewed by
Property Manager in accordance with Owner's leasing guidelines and on
Owners approved form of lease agreement and be submitted to the Owner's
designated representative for execution by Owner. Unless agreed to and
directed otherwise, Property Manager agrees it will strictly observe the
specific leasing guidelines
10
provided by Owner, cooperating with counsel and acting in a timely manner,
and agrees to hold Owner harmless from any damages sustained by Owner
including the cost of defending any litigation arising out of Property
Manager's failure gross negligence or willful misconduct in failing to
observe such guidelines. References of prospective tenants, as well as
their varying use requirements, shall be investigated carefully by
Property Manager, however, all decisions concerning creditworthiness and
suitably of tenant shall be solely that of Owner, and Property Manager
shall not be required to warrant or guarantee any tenant's performance.
(b) With Owner's prior written approval and at Owner's expense, to
advertise the Premises or portions thereof for rent by means of
periodicals, plans, brochures, and other means appropriate to the
Premises. No sign shall be placed on the Premises by the Property Manager
without the Owner's prior written approval.
2.7 Property Manager agrees, for itself and all persons retained or
employed by Property Manager in performing its services, during the term of this
Agreement and thereafter, to use reasonable efforts to hold in confidence and
not to use or disclose to others any confidential or proprietary information of
Owner heretofore or hereafter disclosed to, learned by or prepared by Property
Manager, including but not limited to any data, information, plans, programs,
processes, costs, operations, or tenants which may come within the knowledge of
Property Manager in the performance of, or as a result of, its services, except
where Owner specifically authorizes Property Manager to disclose any of the
foregoing to others or such disclosure reasonably results from the performance
of Property Manager's duties hereunder.
2.8 Property Manager shall indemnify and save harmless Owner from
and against all liability, suits, claims, and demands (including, without
limitation, all costs and attorney's fees and expenses incurred in connection
therewith) by or on behalf of any person, firm, corporation or other entity due
to or arising out of any gross negligence or willful misconduct on the part of
the Property Manager, its employees, contractors or subcontractors in connection
with Property Manager's performance of its obligations under this Agreement.
2.9 Property Manager shall use its best efforts to insure that no
third party files or suffers to be filed, any materialman's or mechanic's lien
against the Premises arising out of material incorporated therein or work
performed therein or thereon upon the request or order of Property Manager.
2.10 If Owner has entered into a separate agreement with a parking
management company ("Parking Manager") or property association to operate the
parking facility of the Premises, Property Manager will coordinate and cooperate
with Parking Manager or property association as directed by Owner, and will
incorporate budgets and monthly statements submitted by Parking Manager into
Property Manager's budgets and monthly statements. If so directed by
11
Owner, Property Manager shall receive net revenues from Parking Manager for
deposit into the Bank Account described in Section 2.1(g).
ARTICLE III
OWNER'S AGREEMENTS
3.1 Owner, at its option, may pay directly all of the following
charges relating to the Premises: taxes, special assessments, ground rents,
insurance premiums (other than premiums arising out of Section 2.1(b) for which
Property Manager is responsible), and mortgage payments. If Owner does not elect
to make any or all of said payments, Property Manager shall do so out of the
Bank Account, if so directed in writing by Owner.
3.2 Owner shall self-insure or, at its option, require Property
Manager to coordinate the placement of property insurance upon the Premises
including both liability and all risk property insurance and shall look first to
such insurance or self-insurance for indemnity against any loss or damage to the
Premises or to any tenant insurance, except in the case of Property Manager's
negligence (when Property Manager is acting outside of the scope of its
employment or in violation of this Agreement), gross negligence or willful
misconduct, or as otherwise provided herein. To the extent that policies shall
be procured, Owner shall obtain waivers of subrogation in favor of Property
Manager under such policies. Property Manager shall be an insured as real estate
manager on Owner's liability policy.
3.3 With respect to liabilities arising out of the use and operation
of the Premises and arising under this Agreement except for liabilities arising
out of section 2.1(b), Owner shall indemnify and save harmless Property Manager
from and against all claims, losses and liabilities (including, without
limitation, all costs and attorneys fees and expenses incurred in connection
therewith) resulting from damage to property or injury to, or death of, persons,
defamation and false arrest (including, but not limited to, the property and
persons of the parties hereto and their agents, contractors, subcontractors and
employees), occasioned by or arising out of, acts or omissions (other than
criminal acts), of (i) Property Manager (except in the case of Property
Manager's negligence when Property Manager is acting outside of the scope of its
employment or in violation of this Agreement), gross negligence or willful
misconduct, or (ii) Owner or Owner's agents, employees, contractors or
subcontractors.
Nothing contained in this Section 3.3 shall be construed as creating
or evidencing an employment relationship between Owner and any or all persons
employed or utilized by Property Manager pursuant to Section 2.1(b) for the
operation and maintenance of the Premises.
12
ARTICLE IV
PROPERTY MANAGER'S FEES
AND COMMISSIONS: REIMBURSEMENTS
4.1 As management fees for the services performed pursuant to
Article II, Owner agrees to pay Property Manager on the basis specified in
Exhibit A, paragraph 6. Said fee shall be payable monthly on the tenth (10th)
day of the month and shall be based on receipts from the previous calendar
month. Property Manager shall withdraw said fee from the operating account for
the Premises and shall account for same as provided for in Section 2.2 hereof.
If fees are based on rent or income, it is understood that they shall be
applicable to rent or income actually collected, including parking receipts, and
that there shall be excluded therefrom: direct charges for taxes, insurance,
fuel, electricity, water, labor or any other expense in connection with the
operation and maintenance of the Premises which are paid directly by a tenant to
any taxing authority, utility or service company; fire loss proceeds, capital
improvements, remodeling and tenant change costs (including any overhead factor
payable by tenants); amortization for tenant work, security deposits; however,
tax, utility, service charges and operating expense escalation charges required
to be calculated, billed and collected from individual tenants by Property
Manager will be included in collectively income for the purpose of calculating
management fee. Management fees shall be paid based on actual receipts, not
estimates. Owner shall be entitled to pay Property Manager directly rather than
permitting Property Manager to pay itself out of the Bank Account. To the extent
any amounts are refunded to tenants, gross rent shall be reduced accordingly.
Any rent paid more than thirty (30) days in advance or sales proceeds shall be
excluded from gross rent.
4.2 As leasing commissions, if any, for new leases secured pursuant
to Section 2.6, including renewals, expansions or extensions exercised during
the term of this Agreement, Owner agrees to pay Property Manager at the rate
specified in Exhibit A, paragraph 7. A commission will be paid on direct leases
signed with subtenants for the period following the expiration date of the
original tenant's master lease. If a new lease contains a cancellation option
exercisable by the tenant and the cancellation fee does not include an amount
for the unamortized leasing commission remaining at the cancellation date, a
leasing commission will be paid on the initial term, which is prior to such
termination date, with the commission for the balance of the lease term payable
when and if such Tenant does not terminate the lease on or before such date as
set forth herein. Commissions will be based on base rents and pre-determined
fixed escalations payable to Owner only and will exclude: percentage rent;
variable escalations; operating expense escalations; real estate tax
escalations; any portion of said base rent attributable to parking; and free
rent. In the event a lease provides that the tenant is to pay directly for some
or all of the operating expense and/or real estate taxes associated with its
space, then for purpose of calculating the commissions listed in Exhibit A, the
tenant's annual base rent shall be increased by an amount equivalent to the
estimated annual expenses that will be paid by tenant during the first year of
its lease as determined by Owner. No commission will be due for any portion of a
lease term that
13
exceeds ten (10) years. Leasing commissions for new leases and expansions shall
be paid fifty percent (50%) within thirty (30) days after lease execution by all
parties and fifty percent (50%) within thirty (30) days after lease commencement
and actual occupancy in the event of a renewal or extension, any commission
payment due shall be paid within thirty (30) days of the execution of the
renewal or extension documentation. When leases are negotiated on behalf of
tenant by outside brokers, Property Manager shall cooperate with such brokers,
Property Manager shall be responsible for paying all commissions to such outside
brokers, and all commissions to such outside broker shall be subject to the
written approval of Owner. The cost of all approved commissions will be borne by
Owner, unless already paid to Property Manager in accordance with the terms
hereof. Property Manager will assist Owner in negotiating the terms of fees to
outside brokers, and will submit recommendations to Owner regarding the
percentage rate for outside brokerage commissions In conjunction with the budget
submissions provided for in Section 2.5.
4.3 To the extent expressly identified in the Approved Budget, Owner
shall be responsible to reimburse Property Manager for the following expenses or
costs incurred by or on behalf of Property Manager in connection with the
management and leasing of the Premises. At Owner's option such expenses can come
out of be paid from the established Bank Account.
(a) Cost of gross salary, wages, bonuses, payroll taxes, insurance,
worker's compensation, pension benefits and any other benefits of Property
Manager, property management clerical support, engineering personnel, and
engineering clerical support as allocated to the Premises.
(b) Necessary general accounting and reporting services, as
allocated to the Premises.
(c) Necessary cost of forms, stationary, ledgers, and other supplies
and equipment used in Property Manager's office, as allocated to the Premises
for property management purposes.
(d) Cost of continuing education for personnel allocated to the
Premises.
(e) Cost of parking for personnel allocated to the Premises.
(f) Necessary cost of telecommunications, couriers, and postage
allocated to the Premises.
All of the enumerated items in section 4.3 must be at commercially
reasonable rates.
14
ARTICLE V
DURATION, TERMINATION, DEFAULT
5.1 This Agreement shall become effective on January 1, 1996 and
will continue in full force and effect for an initial term of one (1) year,
unless terminated earlier in accordance with the terms of this Agreement. Upon
the expiration of the initial one (1) year term and each subsequent renewal
period, unless terminated, as is hereinafter addressed, this Agreement will
automatically renew for one (1) year renewal periods.
5.2 This Agreement may be terminated by Owner or Property Manager at
any time (a) without cause by giving the other party written notice of the
election to terminate no less than thirty (30) days prior to the date for
termination or (b) automatically and without notice if the Premises are sold to
a bonafide third party purchaser, except as provided herein, or the Premises are
acquired through foreclosure of a mortgage or deed in lieu of foreclosure.
This Agreement may also be terminated for cause by the
non-defaulting party, at its option, upon the happening of any of the following
events of default:
(i) If the Property Manager makes a general assignment for the
benefit of creditors; files in the courts a petition in bankruptcy, insolvency,
for a reorganization, or for the appointment of a receiver or trustee of all or
a substantial part of its property; voluntarily takes any advantage of any
bankruptcy or insolvency law; an involuntary petition or any answer is filed
against the other proposing the adjudication as a bankrupt which is not
discharged or denied within sixty (60) days thereafter; or if the Property
Manager is insolvent by reason of being unable to pay debts as they mature or
otherwise is adjudicated bankrupt.
(ii) Upon the occurrence of a breach, default, or non-compliance by
Property Manager of any of the obligations, agreements or covenants to be
performed by Property Manager hereunder contained in this Agreement, and the
failure of Property Manager to cure such breach, default or non-compliance
within five (5) days following receipt of written notice from the Owner for
monetary defaults and fifteen (15) days following receipt of written notice from
Owner specifying such breach, default or non-compliance for non-monetary
defaults; provided that if the non-monetary breach, default or non-compliance is
not curable within said fifteen (15) day period, then upon Property Manager's
failure to commence the curing of such non-monetary breach, default or
non-compliance within said fifteen (15) day period and thereafter diligently and
continuously pursue such cure to completion in no event more than ninety (90)
days. Notwithstanding anything herein to the contrary, Owner may cure any
breach, default or non-compliance and Property Manager shall immediately
reimburse Owner for all costs or expenses in connection therewith.
15
(iii) Failure of Owner to reimburse Property Manager any sums
stipulated in this Agreement; said termination to become effective upon Property
Manager's having served Owner written notice of the failure and Owner's
continued failure to remedy or correct such noncompliance within thirty (30)
days after receipt of such notice.
(iv) If the Premises are damaged by fire or any other casualty or
are taken through the exercise of the power of eminent domain or sale in lieu
thereof and, in Owner's reasonable opinion, such damage or taking materially
affects the operation of the Premises for their intended purpose and the
Premises cease to be operated for such purpose.
Upon termination of this Agreement for any reason, Property Manager
shall deliver the following to Owner or Owner's duly appointed representative on
or before thirty (30) days following the termination date:
(a) A final accounting, reflecting the balance of income and
expenses for the Premises as of the date of termination;
(b) Any balance or monies due to Owner or tenant security deposits,
or both, held by Property Manager with respect to the Premises, and
(c) All records, contracts, drawings, leases, correspondence,
receipts for deposits, unpaid bills, summary of all leases in existence at
the time of termination, and all other papers or documents which pertain
to the Premises. Such data and information and all such documents shall at
all times be the property of Owner.
5.3 If leasing commissions are or will become payable under Section
4.2 and if this Agreement is terminated by Property Manager or Owner under
Section 5.2, Owner shall recognize Property Manager as the broker in any ongoing
contact with a Prospective Tenant (as hereinafter defined) for a lease, renewal,
extension or expansion with respect to any part of the Premises pending at the
date of termination of this Agreement unless mutually agreed to otherwise by
Owner and Property Manager. "Prospective Tenant" shall be defined as a tenant
with whom active negotiations are currently underway or who has both visited the
Premises with Property Manager (or whose leasing broker has visited the Premises
with Property Manager on Prospective Tenant's behalf) or has received a written
proposal from Property Manager or submitted a written proposal to Property
Manager prior to the date of termination of this Agreement. Property Manager
shall provide a list of Prospective Tenants ("Prospect List") to Owner within
thirty (30) business days of the effective date of termination of this
Agreement. The Prospect List will be subject to the review and approval of
Owner, which approval shall not be unreasonably denied. Unless otherwise agreed
to in writing by all parties, in the event of the consummation of a lease with a
Prospective Tenant appearing on the approved Prospect List within six (6) months
of the termination of this Agreement, Owner shall pay to Property Manager a
leasing commission with
16
respect thereto pursuant to Section 4.2; provided, however, that Property
Manager shall not begin negotiations for any new lease or renewal after giving
or receiving a notice of termination, without the prior written consent of
Owner. No commissions shall be paid to Property Manager in the event of the
consummation of a lease more than six (6) months after the termination of this
Agreement. In the event that Property Manager has been terminated and a lease is
being negotiated with a Prospective Tenant, Property Manager must continue with
such negotiations or agree to split its commission with Owner's new
representative.
ARTICLE VI
ASSIGNMENT; CHANGE IN CONTROL
6.1 This Agreement shall be unassignable by either party and can be
changed only by a writing signed by the parties hereto, provided, however, that
Owner shall have the right to assign this Agreement in the event a bona fide
sale by Owner of the Premises and such assignment shall not constitute a breach
of this paragraph 6.1, however, in the event of such an assignment, the term of
this Agreement shall expire ninety (90) days after the sale, unless Property
Manager consents to the assignment in writing, in which event the expiration
date of the term of this Agreement shall remain as provided in Article V. No
services to be performed by Property Manager under this Agreement shall be
delegated by Property Manager to any other person or firm without the prior
written consent of Owner, provided that Property Manager may engage independent
subcontractors, at no additional cost to Owner (except as provided in Section
2.1 hereto and at Property Manager's sole risk, without such consent, to provide
incidental services usually performed by independent contractors under good
property management practices customary in the locale of the Premises. Subject
to Owner's direction, Property Manager will cooperate with lawyers or
consultants, pursuant to contracts in the name of the Owner, to perform real
estate tax appeals, property audits and its other standard services required in
connection with the operating of the Premises.
6.2 Notwithstanding the foregoing, Property Manager may, upon thirty
(30) days prior written notice to Owner, assign this Agreement to an affiliate
provided that the affiliate is the successor to all or substantially all of
Property Manager's management and leasing business; provided, however, that
Owner shall retain its right to cancel this Agreement upon thirty (30) days'
written notice, in accordance with the terms of Article V.
ARTICLE VII
MISCELLANEOUS
7.1 Owner's Representative ("Owners Representative") whose name and
address are set forth on Exhibit A, paragraph 1, shall be the duly authorized
representative of Owner for
17
the purposes of this Agreement. Any statement, notice, recommendation, request,
demand, consent, or approval under this Agreement shall be in writing and shall
be deemed given (a) by Owner when made by Owner's Representative or any officer
of Owner and delivered personally to Property Manager, if an individual, or to
an officer of Property Manager, if a corporation, or when mailed, overnight
couriered, or telefaxed (provided original hard copy of said telefacsimile is
then sent via United States Postal Service or an overnight courier service)
addressed to Property Manager, at the address set forth in Exhibit A, paragraph
2, and (b) by Property Manager when delivered personally to or when mailed,
overnight couriered, or telefaxed (provided original hard copy of said
telefacsimile is then sent via United States Postal Service or an overnight
courier service) addressed to Owner's Representative at the address set forth in
Exhibit A, paragraph 1. Either party may, by written notice, designate a
different address.
7.2 Property Manager shall, at its own expense, qualify to do
business in the local jurisdiction and obtain and maintain such licenses from
the appropriate authorities of said jurisdiction as may be required for the
performance by Property Manager of its services. Property Manager shall comply
with all laws, rules, and regulations of said jurisdiction.
7.3 Each provision of this Agreement is intended to be severable. If
any term or provision hereof shall be determined by a court of competent
jurisdiction to be illegal or invalid for any reason whatsoever, such provision
shall be severed from this Agreement and shall not affect the validity of the
remainder of this Agreement.
7.4 In the event either of the parties to this Agreement shall
institute any action or proceeding against the other party relating to this
Agreement, the unsuccessful party in such action or proceeding shall reimburse
the successful party for its disbursements incurred in connection therewith and
for its reasonable attorney's fees as fixed by the court.
7.5 No consent or waiver, express or implied, by either party hereto
or of any breach or default by the other party in the performance by the other
of its obligations hereunder shall be valid unless in writing, and no such
consent or waiver shall be deemed or construed to be a consent or waiver to or
of any other breach or default in the performance by such other party of the
same or any other obligations of such party hereunder. Failure on the part of
either party to complain of any act or failure to act of the other party or to
declare the other party in default, irrespective of how long such failure
continues shall not constitute a waiver by such party of its rights hereunder.
The granting of any consent or approval in any one instance by or on behalf of
Owner shall not be construed to waive or limit the need for such consent in any
other or subsequent instance.
7.6 This Agreement shall be governed and construed in accordance
with the laws of the State of Virginia. The venue of any action or proceeding
brought by either party against the other arising out of this Agreement shall,
to the extent legally permissible, be the State
18
of Virginia.
7.7 It is understood that the Property Manager is engaged in the
development, management, leasing and sale of real estate similar to the business
of Owner, and may, from time to time, agree to develop, manage, lease and sell
other real estate which may compete with the business of Owner. Owner hereby
consents to the pursuit of such competitive ventures by Property Manager and
acknowledges that such ventures shall not be deemed wrongful or improper;
provided that neither Property Manager nor its affiliates shall solicit any
Tenants in the Premises or attempt to induce such Tenants to relocate out of the
Premises and into a competing property owned, controlled, or managed directly or
indirectly by Property Manager or any affiliate thereof during the term of such
Tenant's lease in the Premises; provided, however, that Property Manager devotes
such time, attention, and personnel to the management, operating, and leasing of
the Premises as is necessary to perform all of its obligations under this
Agreement.
7.8 There shall be no third-party beneficiaries to this Agreement,
other than affiliates of Owner of Property Manager.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
Bryce Mountain, Inc.
Owner
Witness:
[Signature Illegible] By: /s/ X. Xxxxx
------------------------------ ---------------------------------
Name: X. Xxxxx
Title: Vice President
Xxxxxx & Associates, Inc.
Property Manager
Witness: /s/ M. Xxxxxxx Xxxxx By: /s/ Xxxx Xxxx
---------------------- ---------------------------------
Commission Expires Name: Xxxx Xxxx
September 30, 1998 Title: Managing Director, Asset
Management
EXHIBIT A
Addresses/Approvals/Fee Schedule
1. Owner: Bryce Mountain, Inc.
c/o DHIC Management Corporation
Attention: Xxxx Xxxxxx
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
2. Property Xxxxxx & Associates
Manager: Attention: Xxxx Xxxx
0000 00xx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
3. Property Manager will require Owner's consent for any non-budgeted repair
in excess of $1,000.00.
4. Property Manager shall direct tenants to pay their rents directly to
Owner. Owner will deposit these rents and provide Property Manager with a
statement of deposits. The bank account at Sun Trust Bank is in the name
of the Owner.
5. Any checks written by Property Manager payable to Property Manager in
excess of $2,000.00 need to co-signature of Owner.
6. Property Manager will be paid 3% on the actual rental receipts as defined
under 4.1.
7. Property Manager will be paid a leasing commission in accordance to 4.2 as
follows:
Any new leases without cooperating broker - 3%.
Any new leases with cooperating broker - 5%.
(Property Manager to pay cooperating broker 3%)
Any expansion of an existing office tenant without cooperating
broker - 2%.
Any expansion of an existing retail tenant without cooperating
broker - 3%.
Any expansion of an existing tenant with a cooperating
broker - 4%.
Any extension of an existing office tenant without cooperating
broker - 2%.
Any extension of an existing retail tenant without cooperating
broker - 3%.
Any extension of an existing tenant with a cooperating
broker - 4%.
EXHIBIT B
General Requirements for Contractors/Subcontractors
1. Possess commercially reasonable insurance, including, without limitation,
worker's compensation insurance and errors and omissions insurance.
2. Possess all necessary licenses, permits, governmental approvals, etc.
3. Possess at least three (3) years experience in the relevant field of
expertise.
4. Provide evidence, if requested, of each of the foregoing.
5. Provide, if requested, payment and/or performance bond(s).
6. Provide, if requested, an affidavit regarding its financial status,
business experience and other relevant information.
7. Provide information necessary for Property Manager to obtain a credit
report.
