Exhibit 10.14
DEVELOPMENT AGREEMENT
BETWEEN
XXXXX-XXXX ASSOCIATES LIMITED PARTNERSHIP
Owner
and
KINGSTON CONSTRUCTION COMPANY, LLC,
Development Manager
Project: The Woolworth Building
Boston, Massachusetts
Dated as of December __, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 APPOINTMENT OF DEVELOPMENT MANAGER . . . . . . . . . . . . . . . . 1
1.1. Engagement of Development Manager. . . . . . . . . . . . . . . . 1
1.2. Fiduciary Obligations. . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 SERVICES AND DUTIES OF DEVELOPMENT MANAGER . . . . . . . . . . . 3
2.1. Pre-construction; Construction . . . . . . . . . . . . . . . . . 3
2.2. Development Plan . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3. Annual Budget; Annual Budget Monitoring. . . . . . . . . . . . . 4
2.4. Obtain Required Approvals. . . . . . . . . . . . . . . . . . . . 5
2.5. Retain Architect . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6. Retain General Contractor/Construction Manager; Coordination of
Construction Activities. . . . . . . . . . . . . . . . . . . . . 5
2.7. Other Contractors and Consultants. . . . . . . . . . . . . . . . 5
2.8. Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.9. Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10. Maintain Insurance . . . . . . . . . . . . . . . . . . . . . . . 6
2.11. Compliance with Project Documents. . . . . . . . . . . . . . . . 7
2.12. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.13. Leasing/Property Manager . . . . . . . . . . . . . . . . . . . . 7
2.14. Obligations Conditioned on Sufficient Funds. . . . . . . . . . . 7
ARTICLE 3 RESPONSIBILITIES OF DEVELOPMENT MANAGER. . . . . . . . . . . . . 7
3.1. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2. Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6. Books and Records. . . . . . . . . . . . . . . . . . . . . . . . 8
3.7. Operating Accounts . . . . . . . . . . . . . . . . . . . . . . . 8
3.8. Restrictions on Development Manager. . . . . . . . . . . . . . . 9
3.9. Due Diligence; Further Assurances. . . . . . . . . . . . . . . . 9
ARTICLE 4 RESPONSIBILITIES OF OWNER. . . . . . . . . . . . . . . . . . . . 10
4.1. Project Representative. . . . . . . . . . . . . . . . . . . . . 10
4.2. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . 10
4.3. Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4. Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5 COMPENSATION OF DEVELOPMENT MANAGER. . . . . . . . . . . . . . . 11
5.1. Management Fee . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2. Pre-Development Fee. . . . . . . . . . . . . . . . . . . . . . . 11
5.3. Construction Management Fee. . . . . . . . . . . . . . . . . . . 11
ARTICLE 6 TERM; TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . 11
6.1. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3. Events Following Termination.. . . . . . . . . . . . . . . . . . 13
6.4. Final Reports, Accounts and Records. . . . . . . . . . . . . . . 13
ARTICLE 7 CONSENT AND APPROVAL . . . . . . . . . . . . . . . . . . . . . . 14
7.1. Consent and Approval . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 8 REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 14
8.1 Development Manager Representations. . . . . . . . . . . . . . . 14
ARTICLE 9 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 10 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.1. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.2. Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 11 INDEMNIFICATION PROVISIONS; EXCULPATION. . . . . . . . . . . . . 16
11.1. Owner's Indemnity. . . . . . . . . . . . . . . . . . . . . . . . 16
11.2 Development Manager's Indemnity. . . . . . . . . . . . . . . . . 17
11.3. Indemnity Procedures . . . . . . . . . . . . . . . . . . . . . . 17
11.4. Recovery of Litigation Costs . . . . . . . . . . . . . . . . . . 19
11.5. Exculpation of Owner . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 12 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . 19
12.1. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 19
12.2. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.3. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.4. Benefits and Obligations . . . . . . . . . . . . . . . . . . . . 20
12.5. Prohibition on Assignment by Development Manager . . . . . . . . 20
12.6. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12.7. Other Activities . . . . . . . . . . . . . . . . . . . . . . . . 20
12.8. Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . 20
12.9. Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . 20
12.10. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 21
12.11. Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . 21
12.12. Independent Contractor . . . . . . . . . . . . . . . . . . . . . 21
12.13. Governing Law; Submission to Jurisdiction; Venue . . . . . . . . 21
12.14. Survival of Obligation . . . . . . . . . . . . . . . . . . . . . 21
12.15. Supplemental Documents . . . . . . . . . . . . . . . . . . . . . 21
12.16. Superseding Effect.. . . . . . . . . . . . . . . . . . . . . . . 22
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EXHIBITS
A. Additional Development Services
B. Development Plan
C. Initial Budget
D. Permitted Budget Variances
iii
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "AGREEMENT") dated as of December
___, 1997 between XXXXX-XXXX ASSOCIATES LIMITED PARTNERSHIP, a Massachusetts
limited partnership, having an address c/o Xxxx XxXxxxxxx, Esq., Xxxxxxx,
Procter & Xxxx, Exchange Place, Boston, MA 02109-2881 ("OWNER") and Kingston
Construction Company, LLC, a Massachusetts limited liability company, having an
address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("DEVELOPMENT MANAGER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Owner is the owner of a certain retail/office building
known as the Woolworth Building, located at 000 Xxxxxxxxxx Xxxxxx, in the City
of Boston, Commonwealth of Massachusetts and related infrastructure, which
Owner intends to finance, redevelop, reconstruct, encumber, mortgage and lease
(the "PROPERTY"); and
WHEREAS, Owner desires to engage Development Manager for the
express purpose of providing certain development services in connection with the
redevelopment of the space, if any, recaptured from Woolworth's (the "Woolworth
Space") and the development/ construction of an approximately 500,000 square
foot office building addition to the Property (the "Tower Project" and
collectively with the redevelopment of the Woolworth Space, the "Project").
NOW, THEREFORE, for and in consideration of mutual promises herein
contained, and other good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
APPOINTMENT OF DEVELOPMENT MANAGER
1.1. ENGAGEMENT OF DEVELOPMENT MANAGER. Owner hereby appoints
Development Manager as exclusive developer to perform the services described
herein as agent of Owner, and Development Manager hereby accepts such
appointment, subject to the terms and conditions of this Agreement.
1.2. FIDUCIARY OBLIGATIONS. Development Manager agrees to devote
such time and attention to the Project as may be necessary to accomplish the
purposes of this Agreement. In the discharge of its duties, Development Manager
acknowledges that it shall act as a fiduciary of Owner in exercising Development
Manager's authority and the fulfillment of Development Manager's
responsibilities in the manner provided in this Agreement and shall not be
entitled to receive or retain any compensation, fees or other emoluments related
directly or indirectly to the Project, except as may be specifically set forth
herein. Development Manager shall carry out its activities in the highest
professional manner with a view toward enhancing the reputations of Owner, the
parties constituting Owner and others associated with the Project.
1.3. PERSONNEL. Development Manager shall employ such personnel
as Development Manager shall from time to time consider adequate to enable it to
perform its obligations hereunder. Development Manager shall select, supervise,
direct and discharge all personnel (all such persons are collectively defined as
"DEVELOPMENT MANAGER'S EMPLOYEES"), from time to time, as Development Manager,
in its professional opinion reasonably deems necessary for the performance of
Development Manager's duties and obligations hereunder. Developer may itself or
through any of its affiliates or consultants perform any part or all of its
obligations hereunder, in which case the obligations of the Development Manager
shall be treated as satisfied when performed by any such affiliate or
consultant. In performing its obligations hereunder Development Manager may,
without any diminution of its obligations hereunder, delegate such work to
others under its supervision, and shall, as agent for Owner and in accordance
with terms and conditions as may be approved by Owner, select and employ such
architects, engineers, consultants, designers, suppliers and installers as in
its opinion are necessary for the completion of the Project in accordance with
the Project Documents. All Development Manager's Employees shall be direct
employees of Development Manager and shall be paid solely from the funds
allocated for such purpose in the Annual Budget (as hereinafter defined) (unless
Development Manager elects to pay such Development Manager's Employees
additional amounts from its own funds). Development Manager shall be solely
responsible to pay the salary, benefits and all other compensation howsoever
defined (collectively, "EMPLOYEE COMPENSATION") due or otherwise owing to all
Development Manager's Employees, and Development Manager shall be responsible to
(i) file all forms, reports and returns required by law relating to Development
Manager's Employees, (ii) carry such worker's compensation insurance and
employer's liability insurance with respect to such employees as may be required
by law, and (iii) withhold any taxes and social security contributions with
respect to such employees as may be required by law. Development Manager shall
indemnify and hold Owner harmless from any and all claims made by Development
Manager's Employees and any other employees, agents and personnel of Development
Manager against Owner for any Employee Compensation or any other matters
relating to their employment by Development Manager. Provided that at all times
Development Manager complies with the terms and provisions of this Agreement,
including this Section 1.3 hereof, Development Manager may itself or through any
of its affiliates or consultants perform any part or all of its obligations
hereunder, in which case the obligations
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of the Development Manager shall be treated as satisfied when performed by any
such affiliate or consultant. In performing its obligations the Development
Manager may, without any diminution of Development Manager's obligations
hereunder, delegate such work to others under its supervision.
ARTICLE 2
SERVICES AND DUTIES OF DEVELOPMENT MANAGER
2.1. PRE-CONSTRUCTION; CONSTRUCTION. Development Manager agrees
(i) to prepare and submit to Owner for its approval a development program (the
"DEVELOPMENT PLAN"), (ii) to use commercially reasonable efforts to cause the
development and construction of the Project to be carried out to completion in
accordance with the Development Plan and (iii) to perform or use commercially
reasonable efforts to cause to be performed all necessary services and duties in
connection therewith including, but not limited to, the activities set forth on
Exhibit A hereto. Development Manager, as an independent contractor, shall
perform the aforesaid services and duties and the other obligations set forth
herein in the name of Owner within the parameters and upon the terms and
conditions set forth herein. Unless otherwise provided in this Agreement, all
services and actions which Development Manager is required or permitted to
perform or to take, or cause to be performed or taken, under this Agreement in
connection with the development and construction of the Project shall be
performed or taken, as the case may be, on behalf of Owner and at Owner's sole
cost and expense.
2.2. DEVELOPMENT PLAN; PLANS AND SPECIFICATIONS. Development
Manager will prepare and submit to the Owner for its approval the Development
Plan. The Development Plan shall include a description of the Project, a
listing of the Project organization and development team (which may change from
time to time upon notice from Development Manager to the Owner), a Project
budget, and other matters, all of sufficient scope to establish a basis for the
performance of the Project. Development Manager shall update the Development
Plan no less frequently than every ninety (90) days to reflect the current
status of the Project and shall submit such modified and updated Development
Plan to Owner for approval. Development Manager shall develop and construct the
Project as contemplated by and provided for in the Development Plan and the
Plans and Specifications for the Project as approved by Owner. Owner may reject
or modify the Development Plan, and any subsequent revisions thereto, as
requested by Owner from time to time, in its sole discretion, and Development
Manager shall promptly revise the Development Plan or such future development
plan, as the case may be, to Owner's satisfaction. Development Manager shall
deliver to Owner, promptly following their preparation, all plans and
specifications and any schematic and conceptual presentations for the proposed
development of the Project for the approval by Owner and shall also deliver to
Owner such other details and information regarding the development as Owner
shall reasonably request from time to time including, without limitation,
proposals as to the identity of architectural and engineering firms,
3
construction contractors, and other specialists and consultants to be used to
implement the Development Plan. Until a Development Plan is approved by Owner,
Development Manager must obtain Owner's consent for all actions to be taken
hereunder in accordance with the Development Plan. Once a Development Plan has
been approved by Owner, the Development Manager shall operate the Project in
accordance with the approved or deemed approved Development Plan until any
revision to a Development Plan has been approved by Owner. Any references
herein to the Development Plan shall mean the Development Plan and any
modifications or amendments thereto approved by Owner
2.3. ANNUAL BUDGET; ANNUAL BUDGET MONITORING. Attached hereto as
Exhibit B is the budget for tax period commencing the date hereof and ending
December 31, 1998, which budget contains the projections of cash expenditures,
working capital and necessary reserves with respect to the predevelopment,
development, construction, and marketing at the Project for such period (the
"INITIAL BUDGET"). On or before December 1st of each year thereafter,
Development Manager shall submit an Annual Budget to Owner for approval for the
ensuing fiscal year, which Annual Budget shall be based upon the Initial Budget
with such modifications and amendments as Development Manager deems necessary or
advisable (the Initial Budget and any such subsequent annual budget, as same may
be amended pursuant to the terms hereof, an "ANNUAL BUDGET"). Owner may elect,
at any time in its discretion, to modify or amend any Annual Budget or any
portion thereof without Development Manager's consent or approval if Owner
determines that same is necessary or desirable for the construction, operation,
maintenance, sale or marketing of the Project. Any references herein to an
Annual Budget shall mean an Annual Budget and any modifications or amendments
thereto approved by Owner.
(b) On a monthly basis, Development Manager shall (i) prepare
and deliver to Owner a report setting forth (a) the actual costs and expenses
incurred during such month and the estimated amount for the next quarter for
uncompleted work (i.e., the loan draw), and (b) variances between actual and
budgeted or projected costs where budgeted or projected costs exceed the line
item for such costs by more than ten (10%) percent and (ii) revise the Annual
Budget as necessary to reflect actual Project experience. If Development
Manager determines at any time that it is in the best interests of Owner to
incur any cost, expense or obligation to effect the purposes of the Development
Plan which requires any expenditure which deviates from any line item on the
Initial Budget, Development Manager shall obtain the approval of Owner prior to
incurring any such cost, expense or obligation. Owner shall be deemed to have
approved any variance from a line item on an Annual Budget if such variance is
reflected and highlighted on a draw request from Development Manager to Owner
and Owner fails to notify Development Manager that it objects to such variance
within 10 days of receipt of such request. For purposes of this Section 2.3, a
"LINE ITEM" shall refer to each line item of expense identified in the Annual
Budget. Notwithstanding the foregoing, prior to the approval of the Initial
Budget by Owner, Development Manager must obtain the consent of Owner to all
expenditures to be made by Development Manager hereunder. After the approval of
any Annual Budget, Manager shall perform its obligations hereunder in
4
accordance with such Annual Budget, unless a modification thereto has been
approved or has been deemed approved by Owner.
2.4. OBTAIN REQUIRED APPROVALS. At Owner's sole cost and
expense, Development Manager shall use commercially reasonable efforts to obtain
all other necessary zoning and other approvals, consents, permits, licenses,
variances, access and traffic approvals, and authorizations required or
desirable for the construction, development and operation of the Project
consistent with the Development Plan (collectively, the "REQUIRED APPROVALS").
Development Manager hereby agrees to use its commercially reasonable efforts to
secure all Required Approvals, comply with all conditions set forth in such
Required Approvals or otherwise, prepare and provide all reports, notifications
and submissions for the benefit of Owner and the Project and take all necessary
and appropriate actions so that the Project shall be ready to open for sale or
lease to the general public on or prior to the date specified in the Development
Plan.
2.5. RETAIN ARCHITECT Subject to Owner's approval and at
Owner's sole cost and expense, Developer shall retain, on behalf of the Owner,
on terms to be approved by Owner, an architectural firm licensed in the State of
Massachusetts ("ARCHITECT") to prepare initial schematic and development
drawings. Developer shall cause the Architect to prepare preliminary and final
drawings, plans and specifications for the Project. The identity and terms of
employment of the Architect and any associated architects shall be subject to
Owner's approval.
2.6. RETAIN GENERAL CONTRACTOR/CONSTRUCTION MANAGER; COORDINATION
OF CONSTRUCTION ACTIVITIES. Development Manager shall retain, on behalf of
Owner and at Owner's sole cost and expense, either a construction manager for
the Project (the "CONSTRUCTION MANAGER") or a general contractor for the
construction, supply of materials, labor and other services to be performed in
connection with the Project (the "GENERAL CONTRACTOR"). The term of employment
of the Construction Manager or General Contractor and any associated general
contractors shall be subject to Owner's approval. Developer shall supervise the
Construction Manager or General Contractor in the performance of its duties,
including, without limitation, acting at Owner's discretion and on its behalf to
supervise and coordinate construction matters and matters involving governmental
agencies. The obligations and performance of the Construction Manager or
General Contractor under its construction contract shall be assured in full by a
payment and performance bond from the Construction Manager or General Contractor
if required by Owner or any lender ("LENDER") financing construction of the
Project.
2.7. OTHER CONTRACTORS AND CONSULTANTS. On behalf and in the
name of Owner, Development Manager shall, as agent for Owner, select, negotiate
and enter into contracts on terms and conditions approved by Owner and
Development Manager, with consultants, engineers, designers, contractors,
suppliers and installers (including, without limitation, a project architect) as
in its opinion are necessary for the completion of the Project
5
in accordance with the Project Documents (as hereinafter defined). The identity
and terms of employment for such persons and firms shall be subject to Owner's
approval and the compensation payable for services rendered by such persons and
firms shall be only as provided for in the Annual Budget. Development Manager
shall supervise all contractors, consultants and engineers and the installation
of materials or equipment for all systems, such as heating, ventilation, air
conditioning, plumbing and electrical based on preliminary and/or final plans
and specifications.
2.8. FINANCING. Owner shall arrange for the construction
financing for the Project and Development Manager shall assist owner in
connection therewith, such assistance shall include, without limitation, (i)
assisting in negotiation of appropriate instruments and documents evidencing and
securing such financing, (ii) arranging for periodic disbursement of funds
pursuant to such financing, as requested by Owner, and (iii) preparing all
reports, financial statements and documents required by any lender and, after
receiving Owner's prior written approval of such reports, financial statements
and documents, coordinate the delivery of same to such lender.
2.9. PERMITS. Development Manager shall take such actions at
Owner's sole cost and expense as may be necessary to comply with laws,
ordinances, orders, rules, regulations and requirements of federal, state and
municipal governments and agencies, courts, departments, commissions, boards and
officers, or other bodies exercising similar functions, which may be applicable
to the Project, and obtain and maintain all building permits, certificates of
occupancy, licenses, Required Approvals and/or operating permits, if any, for
the Project including, without limitation, submission and administration of
applications and agreements in the name of Owner with utility companies, public
agencies and municipal and other governmental authorities with respect to
utility, sewer and water services. Owner agrees to execute and deliver any and
all applications and other documents reasonably requested by Development Manager
and otherwise to cooperate to the fullest extent with Development Manager in
applying for, obtaining and maintaining such certificates, Required Approvals,
licenses and permits as are reasonably required. Development Manager shall at
Owner's sole cost and expense use commercially reasonable efforts to take such
measures as may be reasonably required to cause the Project to be in compliance
with the terms, covenants and provisions contained in the Project Documents (as
hereinafter defined), any deed of trust or mortgage, operating agreement or
other agreement or obligation encumbering or affecting the Project or any
security agreement now or hereafter encumbering or affecting the personal
property located at the Project.
2.10. MAINTAIN INSURANCE. As more particularly provided in
ARTICLE 10 hereof, Development Manager shall prepare for Owner a schedule of all
required insurance coverage for the Project during the preconstruction, and at
Owner's sole cost and expense shall obtain and maintain such insurance coverage
on terms and with companies or agencies approved by Owner.
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2.11. COMPLIANCE WITH PROJECT DOCUMENTS. Development Manager
shall at Owner's sole cost and expense cause the Project to be planned,
constructed and operated substantially in accordance, in all material respects,
with the terms and conditions of all governmental approvals received for the
Project, the Development Plan, all construction and/or financing loan documents,
and the site plan for the Project (as same may be amended pursuant to Section
2.2 herein) (collectively, the "PROJECT DOCUMENTS").
2.12. SECURITY. Development Manager shall supervise the
preparation and implementation at Owner's sole cost and expense of a security
program for the Project to be in force during the development, design and
construction of the Project.
2.13. LEASING/PROPERTY MANAGER. Pursuant to that certain
Management and Leasing Agreement (the "Management Agreement") dated of even
date herewith between Owner and Kingston Realty Advisors LLC, as property
manager, (in such capacity "PROPERTY MANAGER"), Owner has engaged Property
Manager to manage the operation and leasing of the Project. Development
Manager shall cooperate with Property Manager in carrying out its duties.
2.14. OBLIGATIONS CONDITIONED ON SUFFICIENT FUNDS. Development
Manager's obligation to perform any duty under this Agreement which requires the
payment of a sum of money is conditioned upon Owner providing funds to
Development Manager necessary to perform such duty, as provided in each Annual
Budget, as the same may be amended from time to time in accordance with the
terms hereof.
ARTICLE 3
RESPONSIBILITIES OF DEVELOPMENT MANAGER
3.1. MEETINGS. Development Manager shall be available at
reasonable intervals and on reasonable notice to participate at such public and
private meetings and hearings for the Project as may be requested by Owner.
3.2. REPORTING. Development Manager shall (i) at all times keep
Owner advised of Development Manager's activities with respect to the Project,
(ii) Development Manager shall supervise and carry out to completion all
decisions made by Owner consistent with the terms of this Agreement in
connection with the Project, and (iii) meet with Owner's representatives no
less frequently than monthly at Development Manager's office and at any other
time reasonably requested by Owner to discuss the status of the development of
the Project and (iv) participate in regular meetings on at least a monthly basis
pursuant to Section 3.3(i) and shall provide Owner with a schedule of such
meetings and deliver to Owner the minutes and other records of such meetings and
the decisions made and Owner or its representative shall have the right to
participate in such meetings. Without limiting
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the foregoing, at least monthly, Development Manager shall furnish to Owner a
written status report, in such form as Owner shall designate, concerning various
aspects of the Project, including the status of planning and construction
activity, schedule compliance and updating, financial reports, problem areas,
status of governmental approvals and such other matters and in such forms as
Owner shall designate. Each report provided to Owner shall be certified as
correct to the best of knowledge of Development Manager.
3.3. CONSTRUCTION ADMINISTRATION. Development Manager shall at
Owner's sole cost and expense provide general administration and coordination of
the work of the Construction Manager or General Contractor and the other
contractors with each other and with the activities and responsibilities of
Development Manager and the architects and other consultants to complete the
Project.
3.4. INSURANCE. Development Manager shall investigate and make a
full written report of all accidents or claims for damage relating to the
ownership, operation and maintenance of the Project, including any damage or
destruction to the Project and the estimated cost of repair, and cooperate with
and make all reports required by any insurance company or insurance
adjuster/consultant. Development Manager will not vary or change any portion of
the insurance program maintained by Owner, but will review annually the
insurance program and make such recommendations to Owner as to changes as
Development Manager deems advisable or necessary.
3.5. PAYMENTS. Development Manager shall pay when due, at
Owner's expense from the Operating Account, all authorized expenses relating to
the development of the Project; provided, however, Development Manager shall
first obtain Owner's approval for any such expense or portion thereof which is
not provided for in the Annual Budget.
3.6. BOOKS AND RECORDS. Development Manager shall maintain
current, complete and accurate books, records and accounts of all costs and
expenses incurred and all income and receipts received in connection with the
Project. All such books and records of Development Manager which relate to the
Project shall be maintained at the office of Development Manager. Development
Manager shall deliver to Owner copies of all such financial statements, as well
as all federal, municipal and state tax returns. Development Manager will be
entitled to retain such copies of the books and records as Development Manager
deems appropriate. Owner or any of its authorized representatives shall have
access to such books, records and returns at all reasonable times during normal
business hours and shall be entitled to audit, at Owner's own expense, such
books, records and returns by an accounting firm of its choosing at any time and
from time to time.
3.7. OPERATING ACCOUNTS. Development Manager shall establish and
maintain, with funds provided by Owner in accordance with the Annual Budget, one
or more commercial accounts (collectively, the "OPERATING ACCOUNT"), in
Development Manager's name at such bank as Development Manager may select with
Owner's approval, and maintain
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in such account(s) sufficient working capital to fund the expenses of the
Project as they are incurred. Development Manager shall endeavor to cause the
Operating Accounts to be interest bearing accounts. Development Manager is
authorized, as agent of Owner, to draw on the Operating Account, as contemplated
by and in the amounts provided for in the Annual Budget (i) amounts necessary to
pay expenses incurred in connection with the development and construction of the
Project, (ii) amounts due and payable by Owner under any deed of trust, mortgage
or other security interests affecting the Project which secure a construction
loan and (iii) insurance premiums. Notwithstanding any other provision of this
Agreement, Development Manager is required to perform its duties to advance
monies to third parties and to itself only to the extent that funds are
allocated in the applicable Annual Budget and available to Development Manager
in the Operating Account, and in no event shall Development Manager be required
to use its own funds for such purposes. If and to the extent Development
Manager does use its own funds, Development Manager is entitled, upon notice to
Owner, to reimburse itself out of the Operating Account or, if sufficient funds
are not available in the Operating Account, Development Manager is entitled to
immediate reimbursement from Owner. Funds in the Operating Account will not be
commingled with other funds of Development Manager.
3.8. RESTRICTIONS ON DEVELOPMENT MANAGER. Notwithstanding
anything to the contrary contained herein, Development Manager shall not be
authorized to bind Owner or the Project to any contract, agreement or obligation
to expend sums or provide services unless (x) such contract, agreement or
obligation is consistent with, and contemplated by, the applicable Annual Budget
and/or Development Plan and in compliance with the terms and conditions of the
other Project Documents or (y) Owner has given written consent thereto.
Notwithstanding anything herein to the contrary, without the prior written
consent of Owner, Development Manager shall not have the authority to, and shall
not (i) enter into any agreement to sell, transfer, finance, pledge or
hypothecate the Project or any interest in the Project; (ii) incur any costs on
behalf of Owner or the Project, except in accordance with the applicable Annual
Budget approved by Owner; (iii) enter into any agreement modifying or waiving
any material term of any contract or agreement affecting the Project or, to
Development Manager's knowledge, the Owner; (iv) exercise any right to
accelerate the maturity of any mortgage loan or other indebtedness affecting
Owner or the Project; or (v) act on behalf of, or hold itself out as having the
authority to act on behalf of, Owner in any manner not expressly granted in this
Agreement or otherwise approved by Owner.
3.9. DUE DILIGENCE; FURTHER ASSURANCES. Development Manager
shall undertake and perform the duties and services required to be performed by
Development Manager under this Agreement in a commercially reasonable manner
consistent with and equivalent to professional developers of first class mixed
use retail/office buildings in Boston, Massachusetts (but only to the extent
consistent with the Annual Budget and the Development Plan).
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ARTICLE 4
RESPONSIBILITIES OF OWNER
4.1. PROJECT REPRESENTATIVE. Owner shall designate one or more
Project representatives who shall have the sole responsibility of representing
Owner during the term of this Agreement. Development Manager shall communicate
with and through such representatives on all matters relating to Development
Manager's performance under this Agreement and shall have the right to rely on
the representatives as being duly authorized to act for Owner on all matters
hereunder. The initial Project representatives of Owner shall be E. Xxxxx
Krulewith and Xxxxx Xxxxxxxx. The Project representative may be changed by
Owner at any time and from time to time during the term of this Agreement by
delivery of notice to Development Manager.
4.2. COSTS AND EXPENSES. Owner will be responsible for the
payment of all costs of developing the Project as provided for in the Annual
Budget, and shall provide Development Manager with all of the funds necessary to
enable Development Manager to perform all of its obligations hereunder,
consistent with the Budget then in effect. Owner and Development Manager shall
develop a procedure to ensure that adequate funds are deposited in the Operating
Account in a timely fashion to pay costs related to the Project. In the event,
however, that sufficient funds are not available to pay such costs, Development
Manager will promptly notify Owner of the amount of the deficiency and Owner
will advance funds to Development Manager to pay such deficiency, or otherwise
instruct Development Manager as to the application of existing funds.
4.3. REPORTING. Owner shall keep Development Manager continually
advised of all matters and send copies of all bills, information and other data
relating to the Project or which may relate to or affect the ability of
Development Manager responsibly to carry out its obligations hereunder.
4.4. COOPERATION. Owner shall cooperate with the Development
Manager if requested by Development Manager, to develop and maintain liaison
with private and public entities which may have an interest in the Project and
those having approval or regulatory authority or funding capabilities regarding
the Project.
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ARTICLE 5
COMPENSATION OF DEVELOPMENT MANAGER
5.1. MANAGEMENT FEE. Development Manager and Owner agree that
Development Manager's sole compensation hereunder shall consist of (i) the
Pre-Development Fee during the Pre-Development Period (as provided for in
Section 5.2 below) and (ii) the Development Fee during the Development Period
(as provided for in Section 5.3 below). Development Manager acknowledges and
agrees that the Pre-Development Fee and the Development Fee constitute
reasonable and adequate compensation for performance of its duties hereunder and
reimbursement of its expenses hereunder, and that it shall not be entitled to
any other fees or compensation of any kind.
5.2. PRE-DEVELOPMENT FEE. Development Manager shall be entitled
to receive a fee during the period commencing on the date hereof and ending on
the date that construction of the Tower Project commences (such period, the
"PRE-DEVELOPMENT PERIOD"), in the amount equal to $275,000 per annum, which
amount shall be payable monthly (the "PRE-DEVELOPMENT FEE").
5.3. CONSTRUCTION MANAGEMENT FEE. Development Manager shall be
entitled to receive a fee (the "DEVELOPMENT FEE") during the period commencing
on the date construction of the Tower Project is commenced and ending on the
date on which construction of the Tower Project is substantially complete (such
period, the "DEVELOPMENT PERIOD") equal to three (3%) percent of the hard costs
incurred to date of constructing the Project, which amount shall be paid
monthly.
ARTICLE 6
TERM; TERMINATION
6.1. TERM. The term of this Agreement shall commence as of the
date hereof and shall continue until the earliest to occur of (i) the completion
of construction of the Project, (ii) the date of termination of the partnership
agreement among the partners of Owner (iii) the date Owner shall notify
Development Manager that it will not proceed with the Project, and (iv) the date
this Agreement is otherwise terminated pursuant to this Section 6.2.
6.2. TERMINATION BY OWNER. (a) Owner shall have the right to
terminate this Agreement at any time upon thirty (30) days' notice to
Development Manager for any reason whatsoever, or for no reason at all;
provided, however, this Agreement shall immediately terminate, if any of the
following events shall occur:
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(i) If Development Manager shall commit gross negligence or
willful malfeasance in the performance (or non-performance) of its
obligations hereunder that has a materially injurious or a materially
adverse effect upon Owner or upon the Project;
(ii) If Development Manager shall make an assignment for the
benefit of creditors, or file, or consent to, any petition in bankruptcy or
for reorganization under any bankruptcy or insolvency law, or for a
receiver or trustee for a substantial portion of its property, or to effect
a composition or extension of time to pay its debts, or for any alteration
or adjustment of a substantial part of its indebtedness; or if Development
Manager shall commence proceedings for or take any corporate action
authorizing or providing for its dissolution or liquidation; or if a
receiver or trustee shall be appointed for a substantial part of the
property of Development Manager and such appointment shall not be vacated
in ninety days; or if a petition in bankruptcy or insolvency or for
reorganization or liquidation of Development Manager or for alteration or
adjustment of a substantial part of the indebtedness of Development Manager
shall be filed against Development Manager under any bankruptcy, insolvency
or other law relating to debtors or to alteration or adjustment of
indebtedness, or if a petition, complaint or action shall be filed against
Development Manager seeking its liquidation, and any such petition,
complaint or action shall not be dismissed within ninety (90) days after
filing;
(iii) If Development Manager shall materially breach its
obligations under this Agreement, which breach is not cured within thirty
(30) days after notice from Owner, as such date may be extended, provided
Development Manager has commenced, and is diligently prosecuting to
completion, the cure of such breach;
(iv) If Development Manager or any officer, member or manager
therein shall be convicted of a felony which adversely affects the
reputation or image of the Project, or impedes Development Manager's
ability to perform its obligations hereunder;
(v) If Owner shall sell or otherwise transfer the Project.
(b) XxxxxXxxx Xxxxxxxxxx Xxxxxx LLC shall have the right to
terminate this Agreement at any time, on behalf of Owner, if any of the
following events shall occur.
(i) If E. Xxxxx Xxxxxxxxxx ("PK") shall cease to, at all times,
direct, control and supervise Development Manager or shall die or become
bankrupt, insolvent, legally incompetent or permanently disabled for a
period of either ninety (90) consecutive days or 120 days in any 180 day
period or shall transfer his interest in Development Manager in violation
of Section 8.1 herein;
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(ii) The sale or disposition by PK of his interest in Kingston
Washington Associates Limited Partnership ("KWA") or the permitted
transferee of KWA's interest in Owner (the "PK PARTNER") the sale or
disposition by such PK Partner of its interest in Owner (pursuant to the
buy/sell provision of the Partnership Agreement or otherwise) or the
Project;
(iii) The removal of the PK Partner as general partner of Owner;
or
(iv) The occurrence of a default beyond applicable notice and
cure periods by (x) the PK Partner under the Partnership Agreement or (y)
the Manager under the Management Agreement.
(v) If the Tower Project is not commenced by December 31,1999.
Upon a discharge of Development Manager pursuant to this Section 6.2,
Development Manager shall not be entitled to receive any amounts in respect of
the Pre-Development Fee or Development Fee accruing subsequent to the date of
the event giving rise to such termination. If Development Manager is terminated
or discharged, Owner agrees to continue to employ Development Manager's
Employees at their current compensation rate for a period of thirty days from
the date of notice of such termination or discharge or for such longer term as
may be provided in any contract or employment agreement previously approved in
writing by Owner.
6.3. EVENTS FOLLOWING TERMINATION. Upon any termination of this
Agreement by either party hereto pursuant to this Article 6, Owner shall pay to
Development Manager all fees, disbursements and expenses incurred by Development
Manager which have accrued to the date of termination of this Agreement and such
termination shall not affect the continuing obligations (such as indemnity) of
the parties hereunder.
6.4. FINAL REPORTS, ACCOUNTS AND RECORDS. Within forty-five (45)
days after the termination of this Agreement by either party, Development
Manager shall furnish to Owner such statements, accounts and reports as are
required hereunder for the period commencing from the date of the last
statements, accounts or reports provided to Owner for tax, administration,
diligence or any other purpose or purposes to the date of termination. In
addition, Development Manager shall deliver to Owner all books, records and
other materials in Development Manager's possession related to the Project and
Development Manager shall cooperate in the transition. The provisions of this
Section 6.4 shall survive the expiration or sooner termination of this
Agreement.
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ARTICLE 7
CONSENT AND APPROVAL
7.1. CONSENT AND APPROVAL. No consent of Owner shall be
effective unless given by both general partners of Owner (the "GENERAL
PARTNERS"). In any instance under this Agreement in which the consent or
approval of Owner is required, Development Manager shall request the written
consent or approval of the General Partners by submitting the matter in writing
to the General Partners, together with all relevant information relating thereto
and any documents that will be required to be executed by Owner in connection
therewith. A General Partner may, in its discretion, withhold, condition or
delay any such consent or approval. If one or both General Partners shall
refuse to grant any requested consent or approval, then such General Partners
shall so notify Development Manager and any such notice of refusal shall
describe in detail the items to which such Managing Member objects and shall
specify the reasons for such objections. Development Manager shall consult with
such General Partner and shall endeavor to make such modifications as shall be
appropriate to remedy any such objections and shall resubmit the matter, as so
modified, to such General Partner for consent or approval in the manner
prescribed herein. Subsequent to a General Partner's consent or approval of any
matter, no material change shall be made with respect to the matter consented to
without submitting the matter to the General Partners for consent or approval.
As used herein, the term "MATERIAL CHANGE" shall mean any change which (i) is
reasonably likely to cost in excess of $50,000, (ii) has, will have, or is
likely to have, an injurious or adverse effect upon the Project or Owner or
(iii) will, or is likely to, result in violation of any law, rule or regulation
applicable to Owner or the Project.
ARTICLE 8
REPRESENTATIONS
8.1 DEVELOPMENT MANAGER REPRESENTATIONS. Development Manager
represents and warrants that P.K. is and shall remain throughout the term of
this Agreement, (i) the holder of 100% of the beneficial interests in
Development Manager and (ii) in control of Development Manager.
Notwithstanding the foregoing, and provided PK continues to control Development
Manager, PK may transfer interests in Development Manager to members of his
immediate family and entities and/or trusts comprised of or for the benefit of
such family members. For the purposes of this Agreement, control shall mean the
ownership of at least 51% of Development Manager and the ability to direct the
management and affairs of Development Manager.
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ARTICLE 9
NOTICES
9.1. NOTICES. Any notices or offer required or desired to be
given pursuant to this Agreement shall be in writing and shall be deemed to have
been duly given if delivered or mailed by registered or certified mail, postage
prepared and return receipt requested, to the parties at the addresses set forth
at the beginning of this Agreement with a copy to (i) Battle Xxxxxx LLP, 00 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxxxx, Esq., in
the case of Owner; and (ii) Xxxxxxxx & X'Xxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx in the case of Owner and Development
Manager, or to such other address as any party may have furnished to the other
in writing in accordance herewith. All notices and offers shall be deemed
received on the date of delivery or, if mailed, on the date appearing on the
return receipt.
ARTICLE 10
INSURANCE
10.1. INSURANCE.(a) Development Manager shall be responsible for
maintaining the following insurance for itself and Owner at the sole cost and
expense of Owner.
(i) liability insurance, including a contractual liability
endorsement, in respect of the Project and the conduct or operation of business
therein and thereon, with limits of not less than $10,000,000 combined single
limit for bodily injury and property damage liability in any one occurrence;
(ii) employers liability and workers compensation insurance;
(iii) "Builder's Risk" and property insurance coverage in
form acceptable to Owner for the full cost of replacement of the entire Project
as of the time of any loss. This insurance shall include as named insured
Owner, Development Manager and contractors and subcontractors and shall insure
against loss from the perils of Fire, Extended Coverage and other casualty, and
shall include "All Risk" insurance for physical loss or damage including,
without duplication of coverage, theft, vandalism, malicious mischief, transit,
collapse, flood, earthquake testing, and damage resulting from defective design,
workmanship or material. Owner may, from time to time, direct Development
Manager to increase the limits of coverage, if necessary, to reflect estimated
replacement cost. Owner will be responsible for any co-insurance penalties or
deductibles; and
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(iv) such other insurance, with limits and coverage as Owner or
any lender to the Project may deem necessary or desirable from time to time.
(b) Property Insurance Loss Adjustment. Any insured loss shall
be adjusted by Development Manager, for itself and as agent for Owner, and any
proceeds shall be made payable to Owner.
10.2. WAIVER OF SUBROGATION. (a) Owner and Development Manager
waive all rights against each other, the project architect, and all contractors
and subcontractors for damages caused by perils covered by insurance, except
such rights as they may have to the proceeds of such insurance held by Owner as
trustee. Development Manager shall require similar waivers from the project
architect, and all contractors and subcontractors.
(b) Owner and Development Manager waive all rights against each
other and the project architect, the contractors and subcontractors for loss or
damages to any equipment used in connection with construction of Owner's
improvements and covered by any property insurance. Development Manager shall
require similar waivers from the project architect, and all contractors and
subcontractors.
(c) Development Manager shall use commercially reasonable efforts
to cause the project architect and the contractors and subcontractors performing
work on the project to agree to indemnify Owner and Development Manager and hold
them harmless from all claims of personal injury or property damage.
(d) If the policies of insurance referred to in this Section 10
require an endorsement to provide for continued coverage where there is a waiver
of subrogation, the owners of such policies will cause them to be so endorsed.
ARTICLE 11
INDEMNIFICATION PROVISIONS; EXCULPATION
11.1. OWNER'S INDEMNITY. OWNER WILL DEFEND, INDEMNIFY AND HOLD
HARMLESS DEVELOPMENT MANAGER, ITS AFFILIATES AND THEIR RESPECTIVE PARTNERS,
SHAREHOLDERS, DIRECTORS, OFFICERS, MEMBERS, EMPLOYEES AND AGENTS ("DEVELOPMENT
MANAGER INDEMNITIEES") ("DEVELOPMENT MANAGER INDEMNIFIED") FROM AND AGAINST ALL
LOSS, DAMAGE, CHARGES, LIABILITIES (DIRECT OR INDIRECT), CLAIMS, EXPENSES AND
SUITS OR OTHER CAUSES OF ACTION OF ANY NATURE WHATSOEVER (HEREINAFTER
COLLECTIVELY REFERRED TO IN THIS ARTICLE 10 AS "CLAIMS") ARISING FROM OR IN ANY
WAY CONNECTED WITH (A) THE PROPERTY OR THE PERFORMANCE OF DEVELOPMENT MANAGERS'S
OBLIGATIONS UNDER AND IN
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ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, (B) ANY OTHER ACTS PERFORMED BY
DEVELOPMENT MANAGER AT THE DIRECTION OF OWNER, (C) THE BREACH OF ANY MATERIAL
PROVISION OF THIS AGREEMENT BY OWNER, AND (D) OWNER'S FAILURE (OTHER THAN BY
REASON OF DEVELOPMENT MANAGER'S DEFAULT UNDER THIS AGREEMENT) OR REFUSAL TO
COMPLY WITH OR ABIDE BY ANY LEGAL REQUIREMENTS, UNLESS, FOLLOWING A FINAL
ADJUDICATION ON THE MERITS BY A COURT OF COMPETENT JURISDICTION, IT IS
DETERMINED THAT THE CLAIM WAS ATTRIBUTABLE TO ONE OF THE INDEMNIFIED OWNER
MATTERS DESCRIBED BELOW.
11.2 DEVELOPMENT MANAGER'S INDEMNITY. DEVELOPMENT MANAGER AGREES
TO INDEMNIFY, DEFEND AND HOLD HARMLESS OWNER, OWNER'S OFFICERS, DIRECTORS,
MEMBERS, EMPLOYEES, SERVANTS, ATTORNEYS, NOMINEES, SUBSIDIARIES, AFFILIATES,
AGENTS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, "OWNER INDEMNITEES") FROM AND
AGAINST ANY AND ALL CLAIMS DUE TO DEVELOPMENT MANAGER'S OR DEVELOPMENT MANAGER'S
EMPLOYEES' OR AGENTS' WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OR DEVELOPMENT
MANAGER'S BREACH OF A MATERIAL PROVISION OF THIS AGREEMENT ("INDEMNIFIED OWNER
MATTERS"). DEVELOPMENT MANAGER AGREES TO REIMBURSE OWNER INDEMNITEES FOR AND
INDEMNIFY OWNER INDEMNITEES AGAINST THE PAYMENT OF ANY MONIES WHICH OWNER
INDEMNITEES ARE REQUIRED TO PAY OUT IN CONNECTION WITH OR AS AN EXPENSE
(INCLUDING REASONABLE ATTORNEYS' FEES) IN DEFENSE OF ANY CLAIM, CIVIL OR
CRIMINAL ACTION, PROCEEDING, CHARGE OR PROSECUTION MADE, INSTITUTED OR
MAINTAINED AGAINST DEVELOPMENT MANAGER, OWNER INDEMNITEES, OR OWNER INDEMNITEES
AND DEVELOPMENT MANAGER JOINTLY AND/OR SEVERALLY, DETERMINED BY A COURT OF
COMPETENT JURISDICTION TO HAVE BEEN DUE TO, CAUSED BY, OR ARISING OUT OF THE
INDEMNIFIED OWNER MATTERS.
11.3. INDEMNITY PROCEDURES. (a) If any claim is asserted, or any
action, suit or other proceeding is instituted (each, an "ACTION"), by a third
party against any Owner Indemnitee or Development Manager Indemnitee (each, an
"INDEMNIFIED PARTY"), with respect to any occurrence as to which the other party
(each, an "INDEMNIFYING PARTY") shall have any indemnity obligation under this
Agreement, such Indemnified Party shall timely commence and diligently continue
such defense, settlement or comprise of any such Action at Indemnifying Party's
sole expense. The Indemnifying Party shall have the right to select counsel for
such defense, subject to Indemnified Party's prior written approval, which
approval shall not be unreasonably withheld or delayed. The Indemnifying Party
shall have the right to settle or compromise any such Action without the prior
written consent of Indemnified Party shall satisfy and discharge any and all
liability of the Indemnified Party resulting therefrom or shall post security
reasonably satisfactory to the Indemnified Party to assure the ultimate
satisfaction and discharge of such liability. Except as provided in the
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preceding sentence, the Indemnifying Party shall not settle or compromise any
Action without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld or delayed. Should any such Action result in
a final and unappealable judgment, the Indemnifying Party's prior written
approval shall be required for any such settlement or compromise, which approval
shall not be unreasonably withheld or delayed. Should any such Action result in
a final and unappealable judgment, the Indemnifying Party shall promptly pay the
same. The Indemnified Party agrees to cooperate with the Indemnifying Party to
the extent the Indemnifying Party may reasonably request such cooperation but
at the sole expense of the Indemnifying Party. The Indemnifying Party shall
succeed to and have the benefit of all the defenses, claims and other rights of
each Indemnified party relating to or affecting any obligation or liability of
the Indemnifying Party under this indemnity, and each Indemnified Party agrees
to fully disclose any and all such defenses, claims and other rights to the
Indemnified Party and promptly execute any documents and take any other actions
(at the sole expense of the Indemnifying Party) necessary or desirable to
further assure unto the Indemnifying Party the right to benefit from such
defenses, claims or other rights. Indemnified Party shall have the right (but
shall not have the obligation) at any time and at its own cost and expense, upon
notice to the Indemnifying Party and failure of the Indemnifying Party to act,
to participate in the defense of any such Action, and to be represented by
counsel of its choice (provided, however, that the Indemnifying Party shall not
be liable under this subsection for any fees and expenses of the Indemnified
Party's counsel, unless a conflict of interest exists between or among
Indemnified Parties or between or among the Indemnifying Party or one or more of
the Indemnified Parties and to assert in any such Action any counterclaims or
cross claims the Indemnified Party may have.
(b) In the event the Indemnifying Party fails or refuses to timely
commence the defense, settlement or compromise of any such Action, the
Indemnified Party shall have the right (but shall not have the obligation),
after notice to the Indemnifying Party, to act, defend, settle, compromise or
take such other actions as the Indemnified Party shall deem necessary in
connection with any such Action. In the event it is determined that the
Indemnified Party was entitled to be indemnified under this Article by the
Indemnifying Party, the Indemnifying Party shall pay the Indemnified Party for
the entire cost of the Action including, defense, settlement, compromise or
other such actions taken by the Indemnified Party in connection therewith,
including reasonable attorneys' fees and disbursements and experts' fees and
expenses (including those incurred in connection with appellate proceedings).
Notwithstanding the foregoing, if any third party to such Action shall take any
action to create or impose any lien or encumbrance on any of the assets of the
Indemnified Party with respect to such Action or if any judgment shall be
entered which would result in the Indemnified Party being obligated to pay the
same, then the Indemnifying Party shall provide such bond, deposit or take such
other action as shall be required to prevent the creation or imposition of any
such lien, and to stay the execution of such judgment pending any appeal or
other proceeding prior to final entry thereof. The Indemnifying Party shall
have the right to settle or compromise any such Action without the prior written
consent of Indemnified Party shall satisfy and discharge any and all liability
of the Indemnified Party resulting therefrom or shall post security
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reasonably satisfactory to the Indemnified Party to assure the ultimate
satisfaction and discharge of such liability. Except as provided in the
preceding sentence, the Indemnifying Party shall not settle or compromise any
Action without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld or delayed. The failure or delay of the
Indemnified Party to promptly notify the Indemnifying Party of the institution
of any Action, shall not release or otherwise limit the indemnification
obligation of the Indemnifying Party under this Agreement, except to the extent
that the Indemnified Party shall be prejudiced by the failure or delay of the
Indemnified Party to give the Indemnifying Party notice of such Action.
11.4. RECOVERY OF LITIGATION COSTS. In the event any dispute
between the parties to this Agreement results in litigation, arbitration or
other proceeding, the court, arbitrator or mediator, as the case may be, shall
be requested to award to the prevailing party all reasonable costs and expenses,
including without limitation reasonable attorneys' fees and disbursements,
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses, fees and disbursements
shall be included and made a part of the judgment recovered by the prevailing
party, if any.
11.5. EXCULPATION OF OWNER AND MANAGER. (i) No direct or
indirect partner, shareholder or member in or of Owner (and no officer,
director, member, employee or agent of such partner or shareholder) will be
personally liable for the performance of Owner's obligations under this
Agreement. The liability of Owner for Owner's obligations under this Agreement
will be limited to Owner's interest in the Property and other assets and the
proceeds thereof. Nothing in this Section 11.4 will affect the rights of
Development Manager to seek appropriate relief against any Person to the extent
that such Person misappropriates funds of Development Manager or commits fraud
against Development Manager.
(ii) No direct or indirect partner, shareholder or member in or
of Development Manager (and no officer, director, member, employee or agent of
such partner or shareholder) will be personally liable for the performance of
Development Manager's obligations under this Agreement. The liability of
Development Manager for Development Manager's obligations under this Agreement
will be limited to its partnership assets. A negative capital account of any
partner will not be considered to be a partnership asset. Nothing in this
Section 11.4 will affect the rights of Owner to seek appropriate relief against
any person to the extent that such person misappropriates funds of Owner or
commits fraud against Owner.
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ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1. ENTIRE AGREEMENT. This Agreement embodies and constitutes
the entire understanding among the parties with respect to the matters contained
herein, and all prior or contemporaneous agreements, understandings,
representations and statements, oral or written, are merged into this Agreement.
No waiver or modification of any provision of this Agreement shall be valid
unless in writing and signed by the party to be charged, and then only to the
extent therein set forth.
12.2. CAPTIONS. The captions in this Agreement are intended only
for convenience of reference, do not constitute a part of this Agreement and
shall not be construed to define, interpret, describe or limit the scope or
intent of any provision of this Agreement.
12.3. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which will
constitute one and the same instrument.
12.4. BENEFITS AND OBLIGATIONS. Except as otherwise provided in
this Agreement, this Agreement shall be binding upon and shall inure to the
benefit of the respective successors and permitted assigns of the parties
hereto. Owner shall have the right to assign its interests in this Agreement to
any successor-in-interest of Owner's rights in, to or under the Project.
12.5. PROHIBITION ON ASSIGNMENT BY DEVELOPMENT MANAGER. The
rights, duties and performance of Development Manager hereunder are personal in
nature and may not be assigned or transferred to any other party.
12.6. NO WAIVER. No assent, express or implied, by either party
to any breach of or default in any term, covenant or condition contained herein
on the part of the other to be performed or observed shall constitute a waiver
of or assent to any succeeding breach of or default in the same or any other
term, covenant or condition hereof.
12.7. OTHER ACTIVITIES. Commencing from and after the date hereof
until the expiration or sooner termination of this Agreement pursuant to its
terms, Development Manager shall not (i) directly or indirectly engage any other
party to perform any of the duties and responsibilities of Development Manager
hereunder, except as provided herein, or (ii) perform any other activity which
would interfere with the ability of Development Manager to perform its duties
and responsibilities under this Agreement.
12.8. INVALIDITY OF PROVISIONS. In the event that any one or more
of the phrases, sentences, clauses or paragraphs contained in this Agreement
shall be declared invalid
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by the final and unappealable order, decree or judgment of any court, this
Agreement shall be construed as if it did not contain such phrases, sentences,
clauses or paragraphs.
12.9. RIGHTS OF OTHERS. Nothing in this Agreement, express or
implied, is intended to confer upon any person other than the parties hereto,
and their permitted successors and assigns, any rights or remedies under or by
reason of this Agreement.
12.10. FURTHER ASSURANCES. Each party agrees to execute and
deliver any and all additional instruments and documents and do any and all acts
and things as may be necessary or expedient to more fully effectuate this
Agreement and carry on the business contemplated herein.
12.11. AFFILIATE TRANSACTIONS. In the performance of its duties
hereunder, Development Manager may retain, employ or contract with on behalf of
Owner any affiliate, subsidiary or other related person or entity for the
furnishing of materials or services in connection with the Project; provided,
however, that the terms of any such agreement must be (i) approved in advance by
Owner or (ii) at least as favorable to Owner as would be obtainable by
Development Manager in a comparable arm's-length transaction with a person or
entity other than Development Manager's affiliate, subsidiary or other related
person or entity.
12.12. INDEPENDENT CONTRACTOR. Development Manager's performance
of its duties hereunder is as an independent contractor on behalf and for the
account of Owner. Under no circumstances will Development Manager be deemed to
be a partner or a joint venturer with Owner, nor will Development Manager have
any obligation or liability, in tort or in contract, with respect to the
Project, either by virtue of this Agreement or otherwise; and Development
Manager will have no authority to bind Owner other than as set forth in this
Agreement.
12.13. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. This
Agreement and the rights of the parties hereunder will be governed by, and
interpreted in accordance with, the laws of the State of New York and any
applicable laws of the United States of America. Any legal action or proceeding
with respect to this Agreement shall be brought in New York County, New York, in
the courts of the State of New York or of the United States for the District of
New York, and by execution and delivery of this Agreement, the parties hereby
irrevocably accept for themselves and in respect of their property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereby irrevocably waive any objection which they may now or hereafter have to
the laying of venue of any action or proceeding arising out of or in connection
with this Agreement brought in the aforesaid courts and hereby further
irrevocably waive and agree not to plead or claim that any such action or
proceeding has been brought in an inconvenient forum.
12.14. SURVIVAL OF OBLIGATION. All of the obligations,
representations, warranties and covenants made in this Agreement shall be deemed
to have been relied upon by
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the party to which it was made and to be material and shall survive the
execution and performance of any agreements related hereto to the extent that
they are by their terms, or by a reasonable interpretation of the context, to be
performed or observed after the performance of any such agreements.
12.15. SUPPLEMENTAL DOCUMENTS. Recognizing that the implementation
of the provisions hereof with respect to various actions of the parties hereto
may require the execution of supplemental documents the precise nature of which
cannot now be anticipated, each of the parties agrees to execute and deliver
such other and further documents as may be reasonably required by the other
party hereto so long as such other and further documents are consistent with the
terms and provisions hereof, shall not impose additional obligations on any
party, shall not deprive any party of the privileges herein granted to it and
shall be in furtherance of the intent and purposes of this Agreement.
12.16. SUPERSEDING EFFECT. Subject to the terms of the Partnership
Agreement of Owner and the documents executed in connection therewith, this
Agreement replaces and supersedes in its entirety any prior agreement between
the parties with regard to the subject matter thereof.
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IN WITNESS WHEREOF, the parties hereto have hereby duly executed
and delivered this Agreement as of the date first above written.
DEVELOPMENT MANAGER
Kingston Construction Company, LLC
By: /s/ E. Xxxxx Xxxxxxxxxx
-------------------------------
Name: E. Xxxxx Xxxxxxxxxx
Title: Member
OWNER
Xxxxx-Xxxx Associates Limited Partnership
By: Kingston Washington Associates Limited
Partnership
By: /s/ E. Xxxxx Xxxxxxxxxx
--------------------------------
Name: E. Xxxxx Xxxxxxxxxx
Title: General Partner
By: XxxxxXxxx Xxxxxxxxxx Xxxxxx LLC
By: /s/ Xxxxx Xxx
--------------------------------
Name: Xxxxx Xxx
Title: authorized person
EXHIBIT A
Additional
DEVELOPMENT SERVICES
1. Design; Feasibility: Act as Owner's representative in all design matters.
Provide recommendations on relative construction feasibility, availability of
materials and labor, time requirements for installation and construction, and
factors related to costs including costs of alternative designs or materials,
preliminary budgets, and possible economies.
2. Development Plan: Develop in collaboration with the Project Architect the
Development Plan for the Site and develop changes in the Development Plan as
required from time to time.
3. Scheduling: Provide and periodically update a Project time schedule that
coordinates and integrates the Project Architect's services with construction
schedules.
4. Employment: Select, employ and negotiate the terms and conditions of
employment of all parties employed in the development of the Project.
5. Coordination: Coordinate, supervise and otherwise take action to promote
the integrated functioning of all parties who participate in all activities
associated in any way with the carrying out the development of the Project.
6. Contracts: Negotiate with all outside parties who are in any way related
or concerned directly or indirectly with the Project.
7. Governmental Approvals: Act as Owner's representative in all meetings with
public agencies and in negotiating all contracts with any agency, the
Commonwealth of Massachusetts or any political or quasi-political subdivision
thereof, subject to Owner's approval.
8. Project Budget: Prepare an Annual Budget for Owner's approval as soon as
major Project requirements have been identified and update periodically. Prepare
an estimate of construction cost based on a quantity survey of drawings and
specifications at the end of the schematic design phase for approval by Owner.
Update and refine this estimate for Owner's approval as the development of the
drawings and specifications proceeds, and advise Owner and the Project Architect
if it appears that the Annual Budget will not be met and make recommendations
for corrective action.
[9. Coordination of construction documents:
a. Advise on the method to be used for selecting contractors and
awarding contracts.]
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b. Investigate and recommend a schedule for purchase by Owner of all
materials and equipment requiring long lead time procurement, and
coordinate the schedule with the early preparation of construction
documents by the Project Architect. Expedite and coordinate
delivery of these purchases.
10. Labor: Provide an analysis of the types and quantity of labor required for
the Project and review the availability of appropriate categories of labor
required for critical phases.
a. Determine applicable requirements for any equal employment
opportunity programs to be included in the proposed construction
documents.
[11. Bidding: If the Project is to be bid, establish bidding schedules and
conduct pre-bid conferences to familiarize bidders with the bidding documents
and management techniques and with any special systems, materials or methods.]
a. Receive bids and prepare bid analysis.
[12. Contract Awards: Conduct pre-award conferences with successful bidders.
Prepare construction contracts.]
[13. Project Control: Act on behalf of Owner for all construction matters.
Provide sufficient personnel at the Project site with authority to achieve these
objectives.
a. Schedule and conduct pre-construction and progress meetings at
which Project Development Manager, Project Architect and
Development Manager can discuss jointly such matters as procedures,
progress, problems and scheduling.
b. Provide a detailed schedule for the operations on the Project,
including realistic activity sequences and durations, allocation of
labor and materials, processing of shop drawings and samples, and
delivery of products requiring long lead time procurement; include
Owner's occupancy requirements showing portions of the Project
having occupancy priority.
c. Provide regular monitoring of the schedule as construction
progresses. Identify potential variances between scheduled and
probable completion dates. Review schedule for work not started or
incomplete and recommend to Owner adjustments in the schedule to
meet the probable completion date. Provide summary reports of each
monitoring, and document changes in schedule.
d. Recommend courses of action to Owner when requirements of a
contract are not being fulfilled.
Cost estimates prepared by the Development Manager represent his best judgment
as a professional familiar with the construction industry. It is recognized,
however, that the
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Development Manager has no control over, or makes any warranty hereunder as to,
the cost of labor, materials or equipment, over contractors' methods of
determining bid prices, or other competitive bidding or market conditions.]
14. Permits and Fees: Supervise the obtaining of all building permits and
special permits for permanent improvements and in securing approvals from all
authorities having jurisdiction.
15. Owner's Consultants: Select and retain professional services of a
surveyor, special consultants and testing laboratories as required for the
Project. Coordinate these services.
16. Contract Performance: Consult with the Project Architect if any contractor
requests interpretations of the meaning and intent of the drawings and
specifications, and assist in the resolution of any questions which may arise.
Submit, on behalf of Owner, any disputes to arbitration under the terms of the
construction documents.
[17. Shop Drawings and Samples: In collaboration with the Project Architect,
establish and implement procedures for expediting the processing and approval of
shop drawings and samples.]
18. Reports and Records: Record the progress of the Project. Submit written
progress reports to Owner, including information on the contractors and work,
the percentage of completion and the number and amounts of change orders.
a. Maintain at the Project site, on a current basis: records of all
contracts; shop drawings; samples; purchases; materials; equipment;
applicable handbooks; federal, commercial and technical standards
and specifications; maintenance and operating manuals and revisions
which arise out of the construction documents or the work. Obtain
data from contractors and maintain a current set of record
drawings, specifications and operating manuals. At the completion
of the Project, deliver all such records to Owner.
[19. Owner-Purchased Items: Accept delivery and arrange storage, protection and
security for all Owner-purchased materials, systems and equipment which are a
part of the Work until such items are turned over to the contractors.]
20. Substantial Completion: Upon Development Manager's determination of
substantial completion of the work or designated portions thereof, direct the
Project Architect's preparation of a list of incomplete or unsatisfactory items
and schedule for their completion. After the Project Architect certifies the
date of substantial completion, direct the Project Architect in the supervision
of the correction and completion of work.
21. Start-Up: With Owner's maintenance personnel, direct the checkout of
utilities, operations systems and equipment for readiness and assist in their
initial start-up and testing.
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22. Final Completion: Coordinate the Project Architect's determination of
final completion and provide written notice to Owner and Project Architect that
the work is ready for final inspection. Secure and transmit to the Project
Architect required guarantees, affidavits, releases, bonds and waivers. Turn
over to Owner all keys, manuals, record drawings and maintenance stocks.
Any and all additional development services which Development Manager is
required or permitted to provide under this Agreement may be delegated to others
under its supervision employed by Development Manager on behalf of Owner and at
Owner's sole cost and expense.
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EXHIBIT B
[Initial Budget]
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