MANAGEMENT AGREEMENT
This Agreement is made this 20th day of March 1996, by and between
The Cosmopolitan at Xxxxx Park, LLC (the "Owner") and Claremont
Management Corporation (the "Agent").
Section 1 - APPOINTMENT OF MANAGING AGENT
1.1 APPOINTMENT OF MANAGING ACCEPTANCE
Owner hereby appoints Agent as sole and exclusive agent of
Owner to lease and manage the property described in paragraph
1.2 upon the terms and conditions provided herein. Agent
accepts the appointment and agrees to furnish the services of
its organization for the leasing and management of the
Premises; and Owner agrees to pay all expenses in connection
with those services.
1.2 DESCRIPTION OF PREMISE
The property to be managed by Agent under this Agreement (the
"Premises") is known as The Cosmopolitan at Xxxxx Park, LLC
located at 000 X. Xxxxx Xxxxxx, Xx. Xxxx, XX, consisting of
the land, building, and other improvements described as a 255
unit residential community in the state of Minnesota.
1.3 TERM
The terms of the Agreement shall be for an initial period of
15 months (the "initial term") from the 20th day of March
1996, to including the 30th day of June 1997; and thereafter
shall be automatically renewed from year to year unless
terminated as provided in sections 21 or 27 herein. Each of
said one-year renewal periods is referred to as a "term year".
1.4 MANAGEMENT OFFICE
Owner shall provide adequate space on the Premises for a
management office. Owner shall pay all expenses related to
such office, including, but not limited to, furnishings,
equipment, postage and office supplies, electricity and other
utilities, and telephone.
1.5 APARTMENT FOR ON-SITE STAFF
Owner shall provide a suitable apartment(s) on the Premises,
if deemed appropriate by mutual consent of both parties, for
the use of an on-site manager and/or a resident janitor and
their families, rent free, except that such resident staff
shall pay for heat and utilities in the same manner as other
tenants. The specific apartment(s) shall be the Owner's
choice.
Section 2 - BANK ACCOUNTS
The various bank accounts established under this Agreement
shall at all times be established in Owner's name but under
Agent's control. Agent's and Owner's designees shall be the
only parties authorized to draw upon such accounts. No
amounts deposited in any accounts established under this
Agreement shall in any event be commingled with any other
funds of Agent.
2.1 OPERATING (AND/OR) RESERVE ACCOUNT(S)
Agent shall establish a separate account(s) known as The
Cosmopolitan at Xxxxx Park, LLC Operating (and/or) Reserve
Account(s), separate and apart from Agent's corporate
accounts, for the deposit of receipts collected as described
herein, in a bank or other institution whose deposits are
insured by the federal government. Such depository shall be
selected by the Agent upon consent of the Owner. However,
Agent shall not be held liable in the event of bankruptcy or
failure of a depository. Funds in the Operating (and/or)
Reserve Account(s) remain the property of Owner subject to
disbursement of expenses by Agent as described in the
Agreement.
2.1.1 INITIAL DEPOSIT AND CONTINGENCY RESERVE
Upon refinancing/purchase of mortgage note of the Premises
currently held by Mellon Bank, N.A., and in accordance with
new mortgage note, Owner shall remit to Agent an amount to be
determined by the manager to be deposited in the Operating
(and/or) Reserve Account(s) as an initial deposit representing
the estimated disbursements to be made in the first month
following the commencement of this Agreement, plus an
additional sum, also to be determined by the manager, as a
contingency reserve. Owner agrees to maintain the contingency
reserve stated above at all times in the Operating (and/or)
Reserve Account(s) to enable Agent to pay the obligations of
Owner under this Agreement as they become due. Owner and
Agent shall review the amount of the contingency reserve from
time to time and shall agree in writing on a new contingency
reserve amount when such is required.
2.2 SECURITY DEPOSIT ACCOUNT
Agent shall, if required by law, maintain a separate interest
bearing account for tenant security deposits and advance
rentals. Such account shall be maintained in accordance with
applicable state or local laws, if any.
2.3 FIDELITY BOND
The Agent will furnish, at its own expense, a fidelity bond in
the principal sum of $1,000,000, which is at least equal to
the gross potential income for two months and is conditioned
to protect the Owner and the Mortgagee against
misappropriation of funds of the Premises by the Agent and its
employees. The Agent will obtain a bond of like kind to cover
the on-site personnel expressed in Section 9.1 and it shall be
paid for from Premises income. The other terms and conditions
of the bond, and the surety thereon, will be subject to
approval of the Owner and the Mortgagee.
Section 3 - COLLECTION OF RENTS AND OTHER RECEIPTS
3.1 AGENT'S AUTHORITY
Agent shall collect (and give receipts for, if necessary) all
rents, charges and other amounts receivable on Owner's account
in connection with the management and operation of the
Premises. Such receipts (except tenants' security deposits
and advance rentals, which shall be handled as specified in
paragraphs 2.2 and 3.3 hereof; and special charges, which
shall be handled as specified in paragraph 3.2 hereof) shall
be deposited in the Operating (and/or) Reserve Account(s)
maintained by Agent for the Premises.
3.2 SPECIAL CHARGES
If permitted by applicable law, Agent may collect from tenants
any or all of the following: and administrative charge for
late payment of rent, a charge for returned or non-negotiable
checks, a credit report fee, an administrative charge and/or
commission for subleasing.
3.3 SECURITY DEPOSITS
Agent shall collect, deposit, and disburse tenants' security
deposits in accordance with the terms of each tenant's lease.
Agent shall pay from operations tenants interest upon such
security deposits only if required by law to do so. Agent
shall comply with all applicable state or local laws
concerning the responsibility for security deposits and
interest, if any.
Section 4 - DISBURSEMENT FROM OPERATING (AND/OR) RESERVE ACCOUNT(S)
4.1 OPERATING EXPENSES
From the Operating (and/or) Reserve Account(s), Agent is
hereby authorized to pay or reimburse itself for all expenses
and costs of operating the Premises in accordance with
approved annual budget under Section 6.2 and for all other
sums due Agent under this Agreement, including Agent's
compensation under section 17.
4.2 DEBT SERVICE
Owner shall give Agent advance written notice of at least 10
days if Owner desires Agent to make any additional monthly or
recurring payments (such as mortgage indebtedness, general
taxes, or special assessments, or fire, steam boiler, or other
insurance premiums) out of the proceeds from the Premises. If
Owner notifies Agent to make such payments after the beginning
of the term of this Agreement, Agent shall have the authority
to name a new contingency, and Owner shall maintain this new
contingency reserve amount at all times in the Operating
(and/or) Reserve Account(s).
4.3 NET PROCEEDS
To the extent that funds are available, and after maintaining
the cash contingency reserve amount as specified in paragraph
2.1.1, Agent shall transmit cash balances to Owner
periodically, as follows. Such periodic cash balances shall
be remitted to the following person(s), in the percentage(s)
specified, address(es) shown: as directed from time to time
by Owner.
Section 5 - AGENT NOT REQUIRED TO ADVANCE FUNDS
In the event the balance in the Operating (and/or) Reserve
Account(s) is at any time insufficient to pay disbursements
due and payable under paragraphs 4.1 and 4.2, and paragraph
6.2. Owner shall immediately upon notice, remit to Agent
sufficient funds to cover the deficiency and replenish the
contingency reserve. In no event shall Agent be required to
use its own funds to pay such disbursements. Nor shall Agent
be required to advance any monies to Owner, to the Security
Deposit Account, or to the Operating (and/or) Reserve
Account(s).
If Agent elects to advance any money in connection with the
Premises to pay any expenses for Owner, such advances shall be
considered a loan subject to repayment with interest, and
Owner hereby agrees to reimburse Agent, including interest as
provided in paragraph 17.7 and hereby authorizes Agent to
deduct such amounts from any monies due Owner.
Section 6 - FINANCIAL AND OTHER REPORTS
6.1 REPORTING REQUIREMENTS
By the 20th day of each month, Agent will provide to the Owner
the following schedules, which include, but are not limited
to: balance sheet, income statement with comparisons to
budget, general ledger, rent roll, bank statements and cash
reconciliations, aged listing of accounts receivables, listing
of prepaids, additions to fixed assets over $500, intercompany
reconciliation, listing of accruals and other prepaids, tenant
security deposit listing, and cash flow statement. In
addition, Agent shall, on a mutually acceptable schedule,
prepare and submit to Owner such other reports as are agreed
on by both parties.
6.2 BUDGETS
Annual operating budgets for the Premises will be approved by
the Owner. Except as permitted under Section 10.1 below,
annual disbursements for each type of operating expenses
itemized in the budget shall not materially exceed the amount
authorized by the approved budget without prior consent of the
Owner. The Agent will prepare a recommended operating budget
for each fiscal year beginning during the term of this
Agreement, and will submit the same to the Owner at least
forty-five (45) days before the beginning of the fiscal year.
The Owner will promptly inform the Agent of any changes
incorporated in the approved budget, and the Agent will keep
the Owner informed of any anticipated deviation from the
receipts or disbursements stated in the approved budget.
6.3 OWNER'S RIGHT TO AUDIT
Owner shall have the right to request periodic audits of all
applicable accounts managed by Agent, and the cost of such
audit(s) shall be paid by Owner.
6.4 TAX ASSESSMENTS
Agent will inform Owner of changes in the amount of real or
personal property tax assessments and assist Owner in
compiling all necessary information in connection with any
contest or appeal of any assessments.
Section 7 - ADVERTISING
Agent is authorized to advertise the Premises or portions
thereof for rent using periodicals, signs, plans, brochures,
or displays, or such other means as Agent may deem proper and
advisable and in accordance with Section 6.2. Agent is
authorized to place signs on the Premises advertising the
Premises for rent, provided such signs comply with applicable
laws. The cost of such advertising shall be paid out of the
Operating (and/or) Reserve Account(s). All advertising shall
make clear that Agent is the manager and NOT the Owner of the
Premises. Newspaper ads that share space with other
properties managed by the Agent shall be prorated on a
reasonable basis.
Section 8 - LEASING AND RENTING
8.1 AGENT'S AUTHORITY TO LEASE PREMISES
Agent shall use all reasonable efforts to keep the Premises
rented by procuring tenants for the Premises. Agent is
authorized to negotiate, prepare, and execute all leases,
including all renewals and extensions of leases (and
expansions of space in the Premises, if applicable) and to
cancel and modify existing leases. Agent shall execute all
leases as Agent for the Owner. All costs of leasing shall be
paid out of the Operating (and/or) Reserve Account(s). No
lease shall be in excess of two year(s) without written
approval of Owner. The form of the lease shall be agreed upon
by Owner and Agent.
8.2 NO OTHER RENTAL AGENT
During the time of this Agreement. Owner shall not authorize
any other person, firm, or corporation to negotiate or act as
leasing or rental agent with respect to any leases for space
in the Premises. Owner agrees to promptly forward all
inquiries about leases to Agent.
8.3 RENTAL RATES
Agent, with the consent of the Owner, is authorized to
establish and change or revise all rents, fees, or deposits,
and any other charges chargeable with respect to the Premises.
8.4 ENFORCEMENT OF LEASES
Agent is authorized to institute, in Owner's name, all legal
actions or proceedings for the enforcement of any lease term,
for the collection of rent or other income from the Premises
or for the evicting or dispossessing of tenants or other
persons from the Premises. Agent is authorized to sign and
serve such notices as Agent deems necessary for lease
enforcement, including the collection of rent or other income.
Agent is authorized, when expedient, to settle, compromise,
and release such legal actions or suits or reinstate such
tenancies. Any monies for such settlements paid out by Agent
shall not exceed $5,000 without prior approval by Owner.
Attorney's fees, filing fees, court costs, and other necessary
expenses incurred in connection with such actions and not
recovered from tenants shall be paid out of the Operating
(and/or) Reserve Account(s) or reimbursed directly to Agent by
Owner. Agent may select the attorney of its choice to handle
such litigation upon the advise and consent of Owner.
Section 9 - EMPLOYEES
9.1 AGENT'S AUTHORITY TO HIRE
Agent is authorized to hire, supervise, discharge, and pay all
servants, employees, contractors or other personnel necessary
to be employed in the management, maintenance, and operation
of the Premises in accordance with approved budget mentioned
in Section 6.2. All employees shall be deemed employees of
the Agent.
9.2 OWNER PAYS EMPLOYEE EXPENSES
All wages and fringe benefits payable to such employees hired
per paragraph 9.1 above, and all local, state, and federal
taxes and assessment (including but not limited to Social
Security taxes, unemployment insurance and workers'
compensation insurance) incident to the employment of such
personnel, shall be reimbursed to the Agent out of the
Operating (and/or) Reserve Account(s) in accordance with the
approved budget, and shall be treated as operating expenses.
9.3 AGENT'S AUTHORITY TO FILE RETURNS
Agent shall do and perform all acts required of an employer
with respect to the Premises and shall execute and file all
tax and other returns required under the applicable federal,
state and local laws, regulations, and/or ordinances governing
employment, and all other statements and reports pertaining to
labor employed in connection with the Premises and under any
similar federal or state law now or hereafter in force. In
connection with such filing, Owner shall be responsible for
all amounts required to be paid under the foregoing laws, and
Agent shall pay the same from the Operating (and/or) Reserve
Account(s). Any penalties assessed to Owner and incurred due
to the negligence of Agent shall be paid for by Agent.
9.4 WORKER'S COMPENSATION INSURANCE
Agent shall, at Owner's expense, maintain worker's
compensation insurance covering all liability of the employer
under established worker's compensation laws.
9.5 HOLD HARMLESS, LABOR LAWS
Agent shall be responsible for compliance with all applicable
state or federal labor laws. Owner shall indemnify, defend,
and save Agent harmless from all claims, investigations, and
suites, or from Owner's action or failures to act, with
respect to any alleged or actual violation of state or federal
labor laws. Conversely, Agent shall indemnify, defend and
save Owner harmless from all claims, investigations, and
suits, or from Agent's actions or failure to act with respect
to any alleged or actual violations of state or federal labor
laws. Agent's or Owner's obligation with respect to such
violation(s) shall include payment of all settlements,
judgments, damages, liquidated damages, penalties,
forfeitures, back pay awards, court costs, litigation
expenses, and attorney's fees.
Section 10 - MAINTENANCE AND REPAIR
Agent is authorized to make or cause to be made, through
contracted services or otherwise, all ordinary repairs and
replacements reasonably necessary to preserve the Premises in
its present condition and for the operating efficiency of the
Premises, and all alterations required to comply with lease
requirements, governmental regulations, or insurance
requirements. Agent is also authorized to decorate the
Premises and to purchase or rent, on Owner's behalf, all
equipment, tools, appliances, materials, maintenance, or
operation of the Premises. Such maintenance and decorating
expenses shall be made in accordance to approved budget and
shall be paid out of the Operating (and/or) Reserve
Account(s). This section applies except where decorating
and/or maintenance are at tenants' expense as stipulated in a
lease.
10.1 APPROVAL FOR EXCEPTIONAL MAINTENANCE EXPENSE
The expense to be incurred for any one item of maintenance
alteration, refurbishing, or repair shall not exceed the sum
of $5,000 unless such expense is specifically authorized by
Owner or is incurred under such circumstances as Agent shall
reasonable deem to be an emergency. In an emergency where
repairs are immediately necessary for the preservation and
safety of the Premises, or to avoid the suspension of any
essential service to the Premises, or to avoid danger to life
or property, or to comply with federal, state, or local law,
such emergency repairs shall be made by Agent at Owner's
expense prior approval.
Section 11 - CONTRACTS, UTILITIES AND SERVICES
Agent is authorized to negotiate contracts for non-recurring
items of expense, not to exceed $5,000, unless approved by
Owner, and to enter into agreements in Owner's name for all
necessary repairs, maintenance, minor alterations, and utility
services. Agent shall, in Owner's name and at Owner's
expense, make contracts on Owner's behalf for electricity,
gas, telephone, fuel, or water, and such other services as
Agent shall deem necessary or prudent for the operation of the
Premises. All utility deposits shall be the Owner's
responsibility, except that Agent may pay same from the
Operating (and/or) Reserve Account(s) at Owner's request.
Section 12 - RELATIONSHIP OF AGENT TO OWNER
The relationship of the parties to this Agreement shall be
that of Principal and Agent, and all duties to be performed by
Agent under this Agreement shall be for and on behalf of
Owner, in Owner's name and for Owner's account. In taking any
under the Agreement, Agent shall be acting only as Agent for
Owner, and nothing in this Agreement shall be construed as
creating a partnership, joint venture, or any other
relationship between the parties to this Agreement except that
of Principal and Agent, or as requiring Agent to bear any
portion of losses arising out of or connected with the
ownership or operation of the Premises. Nor shall Agent at
any time during the period of this Agreement to be considered
a direct employee of Owner. Neither party shall have the
owner to bind or obligate the other except as expressly set
forth in this Agreement except that Agent is authorized to act
with such additional authority and power as may be necessary
to carry out the spirit and intent of this Agreement.
Section 13 - SAVE HARMLESS
The Owner will indemnify the Agent harmless against and hold
the Agent harmless from and against any liabilities, damages,
costs and expenses (including reasonable attorney's fees)
sustained or incurred for injury to any person or property
in, about, and in conjunction with the buildings, unless such
injury shall be caused by the Agent's own negligence or
willful misconduct; and any liability, damages, penalties,
costs and expenses (including reasonable attorney's fees)
statutory or otherwise, for all acts performed by the Agent in
accordance with the terms of this Agreement or pursuant to the
instructions of the Owner, provided, in each of the foregoing
instances, that the Agent promptly advises the Owner of its
receipt of information concerning any such injury and the
amount of any such liability, damages, penalties, costs and
expenses.
The Agent will indemnify the Owner harmless against and hold
the Owner harmless from and against; any liabilities, damages,
costs and expenses (including reasonable attorney's fees)
sustained or incurred for injury to any person or property in,
about, and in conjunction with the buildings caused by the
Agent's own negligence or willful misconduct; and any
liability, damages, penalties, costs and expenses (including
reasonable attorney's fees) statutory or otherwise, for all
acts performed by the Agent not in accordance with the terms
of this Agreement or not pursuant to the instructions of the
Owners.
Section 14 - LIABILITY INSURANCE
Owner and Agent shall obtain and keep in force adequate
insurance against physical damage (e.g. fire with extended
coverage endorsement, boiler and machinery, etc.) and against
liability for loss, damage, or injury to property or persons
which might arise out of the occupancy, management, operation,
or maintenance of the Premises. The amounts and types of
insurance shall be acceptable to both Owner and Agent, and any
deductible required under each insurance policies shall be
Owner's expense. Agent shall be covered as additional insured
on all liability insurance maintained with respect to the
Premises. Liability insurance shall be adequate to protect
the interest of both Owner and Agent and in form, substance,
and amounts reasonable satisfactory to Agent. Owner agrees to
furnish Agent with certificates evidencing such insurance or
with duplicate copies of such policies within 10 days of the
execution of this Agreement. If Owner fails to do so, Agent
may but shall not be obligated to place said insurance and
charge the cost thereof to the Operating (and/or) Reserve
Account(s). Said policies shall provide that notice of
default or cancellation shall be sent to Agent as well as
Owner and shall require a minimum of 30 days written notice to
Agent before any cancellation of or changes to said policies.
Section 15 - AGENT ASSUMES NO LIABILITY
Agent assumes no liability whatsoever for any acts or
omissions of Owner or any previous owners of the Premises, or
any previous management or other agent of either. Agent
assumes no liability for any failure of or default by any
tenant in the payment of any rent or other charges due Owner
or in the performance of any obligations owned by any tenant
to Owner pursuant to any lease or otherwise. Nor does Agent
assume any liability for previously unknown violations or
environmental or other regulations which may become unknown
during the period of this Agreement is in effect. Any such
regulatory violations or hazards discovered by Agent shall be
brought to the attention of the Owner in writing and Owner
shall promptly cure them.
Section 16 - OWNER RESPONSIBLE FOR ALL EXPENSES OF LITIGATION
Owner shall reimburse all reasonable expenses incurred by
Agent, including but not limited to, reasonable attorneys' fee
and Agent's costs and time, any liability, fines, penalties or
the like, in connection with any claim, proceeding, or suit
involving an alleged violation by Agent or Owner, or both, of
any law pertaining to fair employment, fair credit reporting,
environmental protection, rent control, taxes, or fair
housing, including, but not limited to, any law prohibiting or
making illegal discrimination on the basis or race, sex,
creed, color, religion, national origin, or mental or physical
handicap, provided, however, that Owner shall not be
responsible to Agent for any such expenses in the event Agent
is finally adjudged to have personally, and not in a
representative capacity, violated any such law. Nothing
contained in this Agreement shall obligate Agent to employ
legal counsel to represent Owner in any such proceeding or
suit.
16.1 FEES FOR LEGAL ADVICE
Owner shall pay reasonable expenses incurred by Agent in
obtaining legal advice regarding compliance with any law
affecting the Premises or activities related to them. If such
expenditure also benefits others for whom Agent in this
Agreement acts in a similar capacity, Owner agrees to pay an
apportioned amount of such expense.
Section 17 - AGENT'S COMPENSATION AND EXPENSES
As compensation for the services provided by Agent under this
Agreement (and exclusive of reimbursement of expenses to which
Agent is entitled hereunder). Owner shall pay Agent as
follows:
17.1 FOR MANAGEMENT SERVICES
The greater of (i) $5,200 per month or (ii) 4% of the total
monthly gross receipts from the premises, payable by the 1st
day of the current month for the duration of this Agreement.
Payments due Agent for Periods of less than a calendar month
shall be prorated over the number of days for which
compensation is due. The percentage amount set forth in (ii)
above shall be based upon the total gross receipts form the
premises during the preceding month.
The term "gross receipts" shall be deemed to include all
collected rents and other income and charges from the normal
operation of the Premises, including, but not limited to,
rents, parking fees, laundry income, forfeited security
deposits, pet deposits, other fees and deposits, special
charges listed in paragraph 3.2, or excess interest on
security deposits (from paragraph 3.3), and other
miscellaneous income. Gross receipts shall NOT be deemed to
include the value of units provided to on-site staff, nor the
income arising out of the sale of real property or settlement
of fire or other casualty losses and items of a similar
nature.
17.2 FOR APARTMENT LEASING
N/A.
17.3 FOR COMMERCIAL LEASING
N/A.
17.4 FOR MODERNIZATION (REHABILITATION/CONSTRUCTION)
N/A.
17.5 FOR FIRE RESTORATION
10% of total restoration if Claremont Management Corporation
acts as general contractor.
17.6 FOR OTHER ITEMS OF MUTUAL AGREEMENT
To be determined if situation arises.
17.7 INTEREST ON UNPAID SUMS
Any sums due Agent under any provisions of this Agreement, and
not paid within 30 days after such sums have become due, shall
bear interest at the rate of Fleet prime rate.
Section 18 - REPRESENTATIONS
Owner represents and warrants: That Owner has full power and
authority to enter this Agreement; that there are no written
or oral agreements affecting the Premises other than tenant
leases, copies of which have been furnished to Agent; that
there are no recorded easements, restrictions, reservations,
or rights of way which adversely affect the use of the
Premises for the purposes intended under this Agreement; that
to the best of Owner's knowledge, the property is zoned for
the intended use; that all leasing and other permits for the
operation of the Premises have been secured and are current;
that the building and its been secured and are current; that
the building and its construction and operation do not violate
any applicable statutes, laws, ordinances, rules regulations,
orders, or the like (including, but not limited to, those
pertaining to hazardous or toxic substances); that the
building does not contain any asbestos, urea, formaldehyde,
radon, or other toxic or hazardous substance; and that no
unsafe conditions exists.
Section 19 - STRUCTURAL CHANGES
Owner expressly withholds from Agent any power or authority to
make any structural changes in any building, or to make any
other major alterations or additions in or to any such
building or to any equipment to any such building, or to incur
any expense chargeable to Owner other than expenses related to
exercising the express powers vested in Agent through this
Agreement, without the consent of the managers.
However, such emergency repairs as may be required because of
danger to life or property, or which are immediately necessary
for the preservation and safety of the Premises or the safety
of the tenants and occupants thereof, or required to avoid the
suspension of any necessary service to the Premises, or to
comply with any applicable federal, state, or local laws,
regulations, or ordinances, shall be authorized pursuant to
paragraph 10.1 of this Agreement, and Agent shall notify Owner
appropriately.
Section 20 - BUILDING COMPLIANCE
Agent does not assume and is given no responsibility for
compliance of the Premises or any building thereon or any
equipment therein with the requirements of any building codes
or with any statue, ordinance, law, or regulation or any
governmental body or of any public authority or official
thereof having jurisdiction, except to notify Owner promptly
or forward to Owner promptly any complaints, warnings,
notices, or summons received by Agent relating to such
matters. Owner represents that to the best of Owner's
knowledge the Premises and all such equipment comply with all
such requirements, and Owner authorizes Agent to disclose the
ownership of the Premises to any such officials and agrees to
indemnify and hold Agent, its representatives, servants, and
employees, harmless of and from all loss, cost, expense, and
liability whatsoever which may be imposed by reason of any
present or future violation or alleged violation of such laws,
ordinances, statues, or regulations.
Section 21 - TERMINATION
21.1 TERMINATION BY EITHER PARTY
This Agreement may be terminated by either Owner or Agent,
with or without cause, at the end of the initial term or of
any following term year upon the giving of 30 days' written
notice prior to the end of said initial term or following
terming year.
21.2 TERMINATION FOR CAUSE
Notwithstanding the foregoing, the Agreement shall terminate
in any event, and all obligations of the parties hereunder
shall cease (except as to liabilities or obligations which
have accrued or arisen prior to such termination, or which
accrue pursuant to paragraph 21.3 as a result of such
termination, and obligations to insure and indemnify), upon
the occurrence of any of the following events:
a. BREACH OF AGREEMENT - Thirty (30) days after the receipt
of notice by either party to the other specifying in detail a
material breach of this Agreement, if such breach has not been
cured within said thirty (30) day period; or if such breach is
of a nature that it cannot be cured within said (30) day
period but can not be cured with a reasonable time thereafter,
if efforts to cure such breach have not commenced or/and such
efforts are not proceeding and being continued diligently both
during and after such thirty (30) day period prior to the
breach being cured. HOWEVER, the breach of any obligation of
either party hereunder to pay any monies to the other party
under the terms of this Agreement shall be deemed to be
curable within thirty (30) days.
21.2 TERMINATION FOR CAUSE (Cont.)
b. FAILURE TO ACT, ETC. - In the event that any insurance
required of Owner is not
maintained without any lapse, or it is alleged or charged that
the Premises, or any portion thereof, or any act or failure to
act by Owner, its agent and employees with respect to the
Premises, fails to comply with any law or regulations, or any
order or ruling of any public authority, and Agent, in its
sole discretion, considers that the action or position of
Owner or its representatives with respect thereto may result
in damage or liability to Agent, or disciplinary proceeding
with respect to Agent's license. Agent shall have the right to
terminate this Agreement at any time by written notice to
Owner of its election to do so, which termination shall be
effective upon the service of such notice. Such termination
shall not release the indemnities of Owner set forth herein.
c. EXCESSIVE DAMAGE - Upon the destruction of or substantial
damage to the Premises by any cause, or the taking of all or a
substantial portion of the Premise of the Premises by eminent
domain, in either case making it impossible or impracticable
to continue operation of the Premises.
d. INADEQUATE INSURANCE - If Agent deems that the liability
insurance obtained by Owner per section 14 is not reasonable
satisfactory to protect its interest under this Agreement, and
if Owner and Agent cannot agree as to adequate insurance.
Agent shall have the right to cancel this Agreement upon the
service of notice to Owner.
21.3 TERMINATION COMPENSATION
If (i) Owner terminates this Agreement before the end of the
initial term or any subsequent term year as provided in
paragraph 21.1 above for any reason other than for a breach by
Agent under paragraph 21.2 (a) above, or if (ii) Agent
terminates this Agreement for a breach by Owner under
paragraph 21.2 (a) above or pursuant to the provisions of
paragraph 21.2 (b) or 21.2 (d) above, then in any such event,
Owner shall be obligated to pay Agent as liquidated damages an
amount equal to the management fee earned by Agent, as
determined under paragraph 17.1 above, for the calendar month
immediately preceding the month in which the notice of
termination is given to Agent or to Owner, multiplied by the
number of months and/or portions thereof remaining from the
termination date until the end of the initial term or term
year in which the termination occurred. Such damages, plus
any amounts accruing to Agent prior to such termination, shall
be due and payable upon termination of this Agreement. To the
extent that funds are available, such sums shall be payable
from the Operating (and/or) Reserve Account(s). Any amount
due in excess of the funds available from the Operating
(and/or) Reserve Account(s) shall be paid by Owner to Agent
upon demand.
21.4 OWNER RESPONSIBLE FOR PAYMENTS
Upon Termination or withdrawal from this Agreement, Owner
shall assume the obligations of any contract or outstanding
xxxx executed by Agent under this Agreement for and on behalf
of Owner and responsibility for payment of all unpaid bills.
In addition, Owner shall furnish Agent security, in an amount
satisfactory to Agent, against any obligations or liabilities
with Agent may have properly incurred on Owner's behalf under
this Agreement.
Agent may withhold funds for ninety (90) days after the end of
the month in which this Agreement is terminated, in order to
pay bills previously incurred by not yet invoiced and to close
accounts. Agent shall deliver to Owner, within ninety (90)
days after the end of the month in which this Agreement is
terminated, any balance of monies due Owner or of tenant
security deposits, or both which were held by Agent with
respect to the Premises, as well as a final accounting
reflecting the balance of income and expenses with respect to
the Premises as of the date of termination or withdrawal, and
all records, contracts, leases, receipts for deposits, and
other papers or documents which pertain to the Premises.
21.5 SALE OF PREMISES
In the event that the Premises are sold by Owner during the
period of this Agreement, Agent may, upon agreement with Owner
and in accordance with Owner's partnership agreement, obtain
rights of representation in the sale as stated in a specific
sales agreement to be negotiated separately. Upon transfer of
ownership, this Agreement shall terminate by mutual consent of
Owner and Agent under the term and conditions set forth below:
The agreement shall automatically terminate upon sale of
Premises to a bona fide Third Party without penalty. A
minimum of sixty days notice is required.
Section 22 - INDEMNIFICATION SURVIVES TERMINATION
All representatives and warranties of the parties contained
herein shall survive the termination of this Agreement. All
provisions of this Agreement that require Owner to have
insured or to defend, reimburse, or indemnify Agent
(including, but not limited to, paragraphs, 2.1, 2.3, 5, 8.4,
9.2, 13, 14, 15, 16, 17.7, 20, 21.3 and 21.4) shall survive
any termination; and if Agent is or becomes involved in any
proceedings or litigation by reason of having been Owner's
Agent, such provisions shall apply as if this Agreement were
still in effect.
Section 23 - HEADINGS
All headings and subheadings employed within this Agreement
and in the accompanying List of Provisions are inserted only
for convenience and ease of reference and are not to be
considered in the construction or interpretation of any
provision of this Agreement.
Section 24 - FORCE MAJEUR
Any delays in the performance of any obligation of Agent under
this Agreement shall be excused to the extent that such delays
are caused by wars, national emergencies, natural disasters,
strikes, labor disputes, utility failures, governmental
regulations, riots, adverse weather, and other similar causes
not within the control of Agent, and any time periods required
for performance shall be extended accordingly.
Section 25 - COMPLETE AGREEMENT
This Agreement, including any specified attachments,
constitutes the entire agreement between Owner and Agent with
respect to the management and operation of the Premises and
supersedes and replaces any and all previous management
agreements entered into or/and negotiated between Owner and
Agent relating to the Premises covered by this Agreement. No
change to this Agreement shall be valid unless made by
supplemental written agreement executed and approved by Owner
and Agent. Except as otherwise provided herein, any and all
amendments, additions, or deletions to this Agreement shall be
null and void unless approved by Owner and Agent in writing.
Each party to this Agreement hereby acknowledges and agrees
that the other party has made no warranties, representations,
covenants, or agreements, express or implied, to such party,
other than those expressly set forth herein, and that each
party, in entering into and executing this Agreement, has
relied upon no warranties, representations, covenants, or
agreement, express or implied, to such party, other than those
expressly set forth herein.
Section 26 - RIGHTS CUMULATIVE; NO WAIVER
No right or remedy herein conferred upon or reserved to either
of the parties to this Agreement is extended to be exclusive
of any other right or remedy, and each and every right and
remedy shall be cumulative and in addition to any other right
or remedy given under this Agreement or now or thereafter
legally existing upon the occurrence of an event or default
under this Agreement. The failure of either party to this
Agreement to insist at any time upon the strict observance or
performance of any of the provisions of this Agreement, or to
exercise any right or remedy as provided in this Agreement,
shall not impair any such right or remedy with respect to
subsequent defaults. Every right and remedy given by this
Agreement to the parties to it may be exercised from time to
time and as often as may be deemed expedient by those parties.
Section 27 - APPLICABLE LAW AND PARTIAL INVALIDITY
The Execution, interpretation, and performance of this
Agreement shall in all respects be controlled and governed by
the laws of the State of Massachusetts. If any part of this
Agreement shall be declared invalid or unenforceable, Agent
shall have the option to terminate this Agreement by notice to
Owner.
Any notices, demands, consents, and report necessary or
provided for under this Agreement shall be in writing and
shall be addressed as follows, or at such other address as
Owner and Agent individually may specify hereafter in writing:
Agent: Claremont Management Corporation
Xxxxxxxxxxxx Xxxx XX
Xxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxx, Xx.
Owner: The Cosmopolitan at Xxxxx Park, LLC
Batterymarch Park II
Xxxxxx, XX 00000
ATTN: Xxxxxxxx X. Xxxxxxxx
Such notice or other communication may be mailed by United
States registered or certified mail, return receipt requested,
postage prepaid, and may be deposited in a United States Post
Office or a depository for the receipt of mail regularly
maintained by the post office. Such notices, demands,
consents, and reports may also be delivered by hand or by any
other receipted method or means permitted by law. For
purposes of this Agreement, notices shall be deemed to have
been "given" or "delivered" upon personal delivery thereof
forty-eight (48) hours after having been deposited in the
United States mails as provided herein.
Section 28 - AGREEMENT BINDING UPON SUCCESSORS AND ASSIGNS
This Agreement shall be binding the parties hereto and their
respective personal representatives, heirs, administrators,
executors, successors and assigns.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have affixed or caused
to be affixed their respective signatures this _________ day of
_______________ 1996.
Witnesses: The Cosmopolitan at Xxxxx Park,LLC
a Delaware Limited Liability Company
__________________________ By:______________________________
Xxxxxxxx X. Xxxxxxxx,Manager
Agent:
Firm: Claremont Management Corporation
__________________________ By:_______________________________
Xxxxxxx X. Xxxxx, Xx.,President
