PROPERTY MANAGEMENT AND LEASING AGREEMENT
THIS PROPERTY MANAGEMENT AND LEASING AGREEMENT ("Agreement") dated
_______, 2000, is between ______________ ("Owner"), whose principal offices
are located ____________________________________________________________, and
RECKSON MANAGEMENT GROUP, INC., a New York corporation ("Manager"), whose
principal office is located at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
RECITALS
A. On the date hereof, RT Tri-State LLC (the "LLC") owns all right,
title and interest in Owner, the owner of the ground lessee's interest in the
building commonly known as _______________________________________ (the
"Property").
B. Pursuant to the Operating Agreement of the LLC (the "Operating
Agreement"), one hundred percent (100%) of the beneficial membership interests
of the LLC are held by Reckson Tri-State Member LLC, a Delaware limited
liability company, whose address is 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx
00000, together with its permitted successors and assigns under the Operating
Agreement, "Reckson" and TIAA Tri-State LLC, a Delaware limited liability
company, whose principal office is located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, together with its permitted successors and assigns under the
Operating Agreement, "TIAA LLC". Reckson and TIAA LLC shall hereinafter be
collectively referred to as the "Members".
C. Owner desires to retain Manager as exclusive manager and leasing
agent for the Property, and Manager desires to serve as exclusive manager and
leasing agent for the Property, all upon the terms and conditions set forth
below.
D. All capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Operating Agreement.
NOW THEREFORE, in consideration of the promises, covenants and
conditions contained in this Agreement, Owner and Manager, intending to be
legally bound, agree as follows:
AGREEMENT
I. Appointment. Owner hereby appoints Manager, and Manager hereby
accepts appointment, on the terms and conditions hereinafter set forth, as
sole and exclusive leasing and management agent for the Property. Manager
shall manage the Property in accordance with the Operating Standard and the
Business Plan. "Operating Standard" shall mean the management of the Property
in an efficient, prudent and economic manner, consistent with (A) its existing
character, condition and level of operation and maintenance (subject to
reasonable wear and tear) as a first-class suburban office building, (B) the
manner in which Manager historically has conducted and, as of the date hereof,
conducts the management of the Property and (C) then current prudent business
and management practices applicable to the operation and maintenance of
first-class suburban office buildings in the suburban marketplace in the state
in which the Property is located of similar size, character and location. Both
Manager and Owner agree to use all commercially reasonable efforts subject to
the Business Plan to maintain the Operating Standard with respect to the
Property.
II. Term. The term of this Agreement shall commence on the date
hereof and terminate upon the first to occur of the events specified in
Section VIII.
III. Services To Be Performed By Manager. Manager shall provide the
following services for Owner, all of which shall be performed in a manner
consistent with the Operating Standard and the Business Plan, subject to the
specific provisions of this Agreement, including the limitations with respect
to expenditures of funds (as set forth in Section III(B)(ii)) and the
availability of funds.
(A) Collecting Rents and Enforcing Obligations. Manager shall make
diligent efforts to collect all rents and other sums due from (i) tenants of
the Property; (ii) users of any garage or other parking space in or on the
Property; (iii) concessionaires in connection with their authorized operation
of facilities on or in the Property, and (iv) all others from whom rents or
other sums are due to Owner with respect to the Property in the ordinary
course of business. Owner authorizes Manager to request, demand, collect,
receive and give receipt for all such rents and other charges in the name of
and on behalf of Owner. All funds collected by Manager shall be deposited
promptly into the Bank Account. Manager shall xxxx tenants of the Property on
a monthly basis. Furthermore, subject to Owner's prior written consent and
provided the same is consistent with the Operating Standard, the Manager
shall, in Owner's name and at Owner's expense, (a) give notices to terminate
leases at the Property by reason of the default of the tenants thereunder; (b)
institute and prosecute legal actions relating to such leases; (c) evict
tenants and recover possession of the portions of the Property occupied by
such tenants; (d) xxx for and recover rents and other sums due Owner and (e)
settle, compromise and release such actions or suits or reinstate such
tenancies. Manager is hereby authorized on behalf of Owner to retain approved
counsel, collection agents and other such professionals to assist Manager in
connection with the foregoing obligations. Notwithstanding the foregoing,
Manager shall not enter into any Lease or any modification, amendment,
shortening of the term, surrender or termination of any Lease, it being
understood that all of the foregoing may be executed only by Owner.
(B) Paying Expenses.
(i) Power to Disburse. Owner shall be responsible for
providing funds for the Bank Account or causing funds to be so provided to
meet on a timely basis the cash requirements of Manager for the proper
operation of the Property pursuant to this Agreement. Manager shall be
a signatory on the Bank Account and as such shall have the power, and is
hereby authorized and directed, to disburse or cause to be disbursed from the
Bank Account any amounts either payable to third parties or to Manager in
accordance with this Agreement.
(ii) Limitation on Disbursements. Manager shall not disburse
any sum in connection with the operation, maintenance or repair of the
Property, whether such expenditures are operating or capital expenditures,
except (a) as permitted under the Business Plan; (b) if such cost is incurred
in connection with a Necessary Expense; (c) expenditures in connection with
providing additional services to tenants for which Owner or Manager is entitled
to be reimbursed by such tenant or (d) with the prior written consent or
approval of Owner.
(iii) No Obligation to Advance. Manager shall not be required
to make any advance to or for the account of Owner, or to pay any amount,
except out of funds held by Manager in the Bank Account for the account of
Owner or provided by Owner as aforesaid; nor shall Manager be required to
incur any obligation to third parties unless Owner shall furnish Manager with
necessary funds for the discharge thereof. Subject to the provisions of
paragraph (ii) above, if the Bank Account has insufficient funds to permit
Manager's proper and timely performance of its obligations under this
Agreement, Manager shall notify Owner of the same at least fifteen (15)
Business Days (or seven (7) Business Days if required for payment of Necessary
Expenses), but not more than forty five (45) days, prior to the need for such
funds and, on or before such date, Owner shall deposit such amount in the Bank
Account to enable Manager to pay expenses in accordance with this Agreement.
(iv) Remainder Remitted to Owner. After paying the expenses of
the Property as set forth herein and maintaining a sufficient reserve as
determined by Manager, but at no time less than $10,000.00 ("Property Level
Reserves"), for the timely payment of future expenses, taking into account
anticipated revenues and expenses, Manager shall remit to Owner the remainder
of the rents and other sums collected hereunder from time to time as directed
by Owner, but in no event later than the 24th day of each month for the
preceding month.
(v) Excluded Expenses. Except as specifically provided below,
any payments to be made by Manager shall be made by Manager on behalf of Owner
out of the Bank Account or as may otherwise be provided by Owner. Manager shall
not be reimbursed under this Agreement for the following expenses:
(a) cost of salary, wages, commissions or other
remuneration, and related benefits for any officer, director, partner,
principal or executive of Manager, except that Manager shall be
reimbursed for the salary and other benefits of the employees of Manager,
including, but not limited to, any building manager ("Building Manager")
(but excluding any employee above the level of Building Manager) employed
to supervise the employees at the Property in accordance with Section
III(H), which sums shall be an operating expense of the Property but
allocated to the extent that such Building Manager or other employee
devotes his or her time to management, maintenance and operation of any
properties other than the Property;
(b) the cost of Manager's own office equipment,
stationary, postage, telephone, and all other administrative expenses not
properly chargeable to the Property and general overhead of Manager; and
(c) general accounting and reporting services as such
services are performed by Manager required to fulfill Manager's
accounting and reporting obligations under this Agreement, including, but
not limited to, cost of electronic data processing equipment or cost of
data processing provided by third party data processing companies.
(C) Property Management/Leasing Office. If Owner does not
currently maintain a property management/leasing office in the Property,
Owner may make available up to 1,000 square feet of space in the
Property for a property management/leasing office, which office the Building
Manager (or other appropriate employee of Manager) shall use solely to perform
the duties set forth in this Agreement. Owner may determine the size and
location of such office and Manager shall not pay any rent or other charges by
reason of such office. The cost of remodeling the space, and the cost (or
rental) of furniture, furnishings, fixtures and equipment, including but not
limited to, personal computers, to be placed in such office, shall be paid for
by Owner as an operating expense of the Property in accordance with the
Business Plan and shall at all times be, and remain, the property of the
Owner. Notwithstanding the foregoing, Manager may continue to use any portion
of the Property which is presently used for the operation of the Property and
which is depicted on Exhibit A annexed hereto, for such purpose.
(D) Preparing the Business Plan.
(i) On or before October 15, or at least 75 days before the
beginning of each new Fiscal Year (hereinafter defined), Manager shall prepare
and submit to Owner for its approval a proposed pro-forma business plan in
preliminary draft form (the "Proposed Plan") for the promotion, operation, and
maintenance of the Property in accordance with the Operating Standard taking
into consideration then current market conditions (each a "Business Plan").
Each Business Plan shall consist of an operating budget (the "Operating
Budget"), a capital improvements budget (the "Capital Budget" and together
with the Operating Budget, the "Budgets"), and the leasing guidelines (the
"Leasing Guidelines"). Each Operating Budget shall show, on a month-by-month
basis, in reasonable detail, each line item of anticipated income and expense
including, without limitation, amounts required to establish, maintain and/or
increase Cash Reserves. Each Capital Budget shall show, in reasonable detail,
anticipated expenditures and cost of completion for Capital Improvements with
respect to each Property or portion thereof (exclusive of CM Fees or
construction oversight fees payable to RCG under Sections III(E)(ii)(a) or
(b)). The Leasing Guidelines for the Property shall specify net average
effective rent over the term of the Lease, on a space-by-space basis, taking
into account Base Rent, the term of the Lease, leasing commissions (including
overrides to Manager), tenant improvements, free rent and any other tenant
concessions. Owner may give comments or seek revisions to the Proposed Plan,
but its failure to do so shall not prejudice its right to do so with respect
to the Revised Plan (as hereinafter defined). Manager shall submit to Owner,
within 15 days after the delivery to Owner of the Proposed Plan, but no later
than November 1, the Proposed Plan in definitive form (the "Revised Plan").
Within 15 days from delivery of the Revised Plan, but no later than November
15, Owner shall submit to Manager any comments or proposed revisions to the
Revised Plan. Manager shall submit to Owner, within 15 days thereafter, but no
later than December 1, the final Business Plan incorporating Owner's comments
and revisions (the "Final Plan"). Owner shall approve or disapprove the Final
Plan, within 15 days after receipt thereof, but no later than December 15,
which as so approved shall constitute the "Business Plan". Owner acknowledges
and agrees that the Business Plan is only an estimate and not a guaranty by
Manager and there may be substantial variations between the estimates set
forth in the Business Plan and the actual results. The parties acknowledge and
agree that the Business Plan for the current Fiscal Year is annexed hereto as
Exhibit B and that such Exhibit will serve as the form of the Business Plan
for all subsequent Fiscal Years during the term of this Agreement.
(ii) During any Fiscal Year when Owner has failed to approve
any portion of the Business Plan for any Property prior to the commencement of
the Fiscal Year to which such Business Plan relates, the Property shall be
operated during such Fiscal Year (A) in accordance with such portions of such
Business Plan as to which agreement has been reached, (B) at rates or levels
of expenditures as are actually charged or incurred with respect to Necessary
Expenses and (C) with respect to those portions of such Business Plan which
are discretionary and as to which agreement has not been reached at rates or
levels of expenditures in the approved Business Plan for the preceding Fiscal
Year, (x) increased by the CPI Increase (computed for this purpose from the
January 1st of the last Fiscal Year for which a Business Plan was approved to
December 31st of the Fiscal Year immediately preceding the Fiscal Year to
which the Business Plan in dispute relates) and (y) increased or decreased to
reflect increases or decreases in the percentage of the Property occupied by
tenants since the last Fiscal Year for which a Business Plan was approved (but
only to the extent the Owner reasonably determines that such increases or
decreases are reasonably related to the level of the Property's occupancy).
Unless Manager is otherwise notified by Owner, the fiscal year of the Property
(the "Fiscal Year") shall be from the first (1st) day of January of each year,
to and including the last day of December of such year except that the current
Fiscal Year shall be from the date hereof through December 31, 2000. The
Fiscal Year may not be changed without the express prior written approval of
Owner. Manager shall be entitled to pay all LLC Charges as and when due to the
extent such LLC Charges are either consistent with the Business Plan, are
Necessary Expenses or if inconsistent with the applicable Business Plan, do
not exceed the budgeted line item cost in the Operating Budget and Capital
Budget by more than 10% or increase the Budgets by more than 7% (exclusive of
increases attributable to temporary timing differences arising in the ordinary
course of business), provided that Manager will act prudently and in the best
economic interest of Owner in incurring Necessary Expenses. Owner and Manager
shall review the Business Plan on a quarterly basis and, in connection
therewith, Manager shall prepare and submit for Owner's review any proposed
modifications to the Business Plan. Following any modification approved by
Owner, the "Business Plan" shall be the original Business Plan as so modified.
(iii) Monthly and Quarterly Reports. During the term of this
Agreement, Manager shall render to Owner a monthly (and year to date) written
report (the "Monthly Report"), containing the information and in the form set
forth on Exhibit C for the immediately preceding calendar month. During the
term of this Agreement, Manager shall render to Owner a written quarterly
report (the "Quarterly Report") containing the information and in the form set
forth on Exhibit D for the immediately preceding quarter. Manager shall
prepare all financial statements that are a part of the Monthly and Quarterly
Reports on an accrual basis in accordance with GAAP. Owner, at its election,
may inspect Manager's books and records with respect to the Property and Owner
and may review and make copies of invoices, bills or other supporting data in
connection with a Monthly or Quarterly Report. Manager shall provide
itemization of and supporting data for any sums retained by or claimed to be
due to Manager as a Management Fee (hereinafter defined), Leasing Commission
(hereinafter defined), or otherwise.
(E) Making Contracts for the Property.
(i) Manager, as agent for Owner, shall enter into contracts
(payable at Owner's sole cost and expense) or otherwise arrange for fuel, oil,
vermin extermination, janitorial service, trash removal, snow removal and
other necessary services (each, a "Contract") as shall be consistent with the
Operating Standard and the Business Plan. Unless otherwise approved in writing
by Owner, all contracts shall be terminable by Manager or Owner upon thirty
(30) days notice. Manager shall also be authorized on behalf of Owner to place
orders in Manager's or Owner's name for such equipment, tools, appliances,
materials and supplies ("Personal Property") as are necessary to maintain the
Property in a matter consistent with the Operating Standard and the Business
Plan. Owner hereby acknowledges and agrees that the Contracts executed prior
to the date hereof and set forth on Exhibit E annexed hereto (the "Existing
Contracts") are hereby approved in all respects.
(ii) (a) Subject to the provisions of paragraph (b) below,
so long as Reckson Construction Group, Inc. (or any successor or affiliate
thereof) ("RCG") remains an affiliate of Manager, Owner hereby authorizes
Manager to utilize RCG to provide construction management services ("CM
Services") for tenant improvements and capital improvement projects at the
Property (each particular tenant improvement or capital improvement project, a
"Construction Project" and the CM Services for a Construction Project a "CM
Service"). Subject to Owner's prior approval, RCG shall be reimbursed by Owner
for all costs actually paid to third parties by RCG in connection with the
Construction Project at the Property. If RCG shall perform the CM Services
(and another Qualified Bidder was not engaged to perform such CM Services
pursuant to clause (b) below), RCG shall receive a fee for the CM Services in
an amount equal to six percent (6%) (the "CM Fee") of all costs, except for
the cost of the CM Fee or other amounts in the nature of a fee paid to RCG,
actually paid to third parties under each contract for a particular tenant
improvement or capital improvement (the "Total Project Cost"). CM Services do
not include and no CM Fee shall be paid to RCG for a Construction Project for
which Manager determines no contract was required or which costs less than
$10,000.00.
(b) If a particular Construction Project (other than a
Construction Project which is necessary (and so limited in scope) to remediate
an emergency condition (an "Emergency Project")) is not specified in the then
approved Business Plan or if TIAA LLC has not otherwise received written
notice of a Construction Project, Manager shall give written notice to Owner
and TIAA LLC at least sixty (60) days prior to the commencement of such
Construction Project or such shorter notice as may be practicable under the
circumstances. Notwithstanding the provisions of (a) above, TIAA LLC may, on
behalf of Owner, by notice given to Manager at least thirty (30) days prior to
the commencement of a particular Construction Project (or if TIAA LLC was
given less than 60 days' notice, then within 15 days after such notice was
given), elect not to permit RCG to perform CM Services for that particular
Construction Project; provided, however, TIAA LLC may not make such election
with respect to an Emergency Project. In the event Owner does not approve
RCG's performance of CM Services for the Construction Project pursuant to the
foregoing sentence, Owner shall retain a general contractor to perform such
Construction Project by (x) bidding out the Construction Project to at least
three (3) (or, if RCG is not one of the bidders, to less than three (3) if
Manager does not deem three (3) to be practicable) general contractors who are
reputable and have reasonable financial strength, and such bidders may include
RCG (each a "Qualified Bidder") and (y) awarding such Construction Project to
RCG or to another Qualified Bidder as Owner, may determine in its sole and
absolute discretion, provided however, that the bid shall not be awarded to
RCG without the prior consent of TIAA LLC (the "Successful Contractor").
Manager shall retain RCG to oversee the Successful Contractor's Construction
Project, for which RCG shall be paid a construction oversight fee equal to 2%
of all costs (except for the cost of paying such construction oversight fees
or other amounts in the nature of a fee paid to RCG) actually paid for the
Construction Project.
(c) So long as RCG remains an affiliate of Manager, Owner
hereby authorizes Manager to utilize RCG to provide architectural and
engineering services ("A&E Services") to the Property (each, an "A&E Project")
provided such A&E Services are (1) of satisfactory quality, (2) provided at no
higher than the then current market rates and (3) in accordance with the
applicable Business Plan to the extent the A&E Services are scheduled to
commence on or after the beginning of the 2001 Fiscal Year. Subject to Owner's
approval, RCG shall be reimbursed by Owner for all costs actually paid to
third parties by RCG in connection with an A&E Project. Notwithstanding the
foregoing, if the A&E Service to be provided by RCG with respect to a
particular A&E Project is estimated to exceed $50,000.00, which amount shall
be adjusted annually by the CPI Fraction, then Owner shall (x) bid out such
A&E Project to at least three (3) (or, if RCG is not one of the bidders, to
less than three (3) bidders if Manager does not deem three (3) to be
practicable) qualified third parties who are reputable and have reasonable
financial strength and such bidders may include RCG (each a "Qualified A&E
Bidder") and (y) award such A&E Project to RCG or another Qualified A&E Bidder
as Owner may determine in its sole and absolute discretion, provided however,
that the bid shall not be awarded to RCG without the prior consent of TIAA
LLC.
(d) Manager will deliver to Owner copies of any bids which
Owner is required to provide to TIAA LLC under Section 8.07 of the Operating
Agreement.
(F) Maintaining the Property. Manager shall maintain the
grounds, buildings and other improvements of the Property in a manner
consistent with the Operating Standard, subject to limitations set forth in
Section III(B) and the Business Plan.
(G) Maintaining Insurance. (i) Manager shall place any and
all insurance coverage contemplated in this Section III(G) with such
companies, in such amounts, and with such beneficial interest appearing
therein as shall be acceptable to Owner, in its sole discretion, and such
insurance coverage shall otherwise be in conformity with the requirements of
law or any contractual obligation of Owner with respect thereto. Any changes
in such coverage shall require the approval of TIAA LLC, which approval shall
not be unreasonably withheld. In any event, all such policies shall, at a
minimum, name Owner as beneficiary and each shall provide that the policy
shall not be canceled or amended unless thirty (30) days' prior written notice
of such cancellation or amendment is given to Owner. Manager and its
Affiliates (as defined in the Operating Agreement) maintain insurance coverage
as set forth on Exhibit F for all of the Properties and the other properties
owned or managed by Manager and its Affiliates.
(ii) Owner hereby authorizes Manager to maintain, at Owner's
expense, subject to the Business Plan, throughout the term of this Agreement,
comprehensive general liability insurance policy in such amounts and with such
insurance carriers as Owner from time to time shall determine, insuring Owner
and naming Manager as an additional insured. Manager shall pay the premiums
and other charges with respect thereto on Owner's behalf out of the Bank
Account as operating expenses of the Property. Manager, on its own behalf and
at its own expense, shall also maintain, and provide to Owner evidence of
maintaining, comprehensive general liability insurance in an amount not less
than Two Million Dollars ($2,000,000.00) naming Owner, TIAA LLC and the LLC as
additional insureds.
(iii) Owner shall maintain, or shall authorize Manager to
maintain, at Owner's expense, such fire, extended coverage and other insurance
on the Property in such amounts and with such insurance carriers as Owner
shall from time to time determine. All insurance carriers covering the
Property shall waive any right of subrogation against Manager for negligence
in the performance of its services, under this Agreement with respect to any
fire, extended coverage or other like insurance claim paid to Owner regarding
the Property.
(iv) Manager shall, at Owner's expense, cause to be placed
and kept in force all workers' compensation insurance, insurance against theft
by Manager's employees. To the extent such insurance is required in the
conduct of Manager's business or to cover Manager's employees, such insurance
shall be at Manager's expense, otherwise it shall be an expense of the
Property. Manager understands and agrees that the insurance coverage required
herein by this Agreement shall not limit the extent of Manager's
responsibilities and liabilities otherwise imposed by this Agreement or by any
Federal, State or local law.
(v) Manager shall require all contractors performing work at
the Property to maintain workers compensation and general liability insurance
coverage with such companies, in such amounts, and with such beneficial
interest appearing therein as shall be acceptable to Owner, in its sole
discretion.
(vi) Manager shall notify Owner, in writing, of any material
fire or any other material damage to the Property promptly following such
casualty. Subject to Owner's consent, except in the case of an emergency, in
the event of any personal injury or property damage occurring to or claimed by
any tenant or third party on or with respect to the Property, Manager shall
take such actions as is prudent and consistent with the Operating Standard,
subject to the limitations set forth in Section III(B). Manager shall not
settle any claims against insurance carriers for damages to the Property or
personal injury without the prior written consent of Owner in each instance.
(H) Employing Personnel. Manager shall interview,
investigate, hire, pay, supervise, discipline and discharge the personnel
necessary to be employed in or on the Property in order to manage, maintain
and operate the Property in accordance with the Operating Standard and the
Business Plan. Manager shall comply with all applicable laws with respect to
the employment of such personnel, including without limitation laws regarding
employment and withholding taxes, workers compensation insurance, employee
benefits and employment discrimination. Owner or TIAA on Owner's behalf may
direct Manager to remove any employee of Manager from any assignment at the
Property; provided, however, that if TIAA LLC so directs Manager and the
direction is not for good cause, TIAA LLC shall indemnify and hold Manager and
Owner harmless from any loss, cost or expense (including reasonable attorneys
fees) arising therefrom. Manager shall not discriminate against any employee
or applicant for employment because of race, color, religion, national origin,
ancestry, physical handicap, age or sex; and all employment advertising shall
indicate that Manager is an "Equal Opportunity Employer." Such personnel shall
in every instance be employees of Manager and not of Owner.
(I) Employing Counsel and Other Professionals. Manager may,
on Owner's behalf and at Owner's expense, employ approved counsel and other
professionals in connection with negotiating, amending and renewing leases
consistent with the Operating Standard and the Business Plan and as otherwise
may be required to perform Manager's obligations under this Agreement.
(J) Miscellaneous.(i)Records. Manager shall maintain full
and complete records, books, and accounts (including equipment guarantees,
warranties and construction plans) relating to the Property in a manner
consistent with the Operating Standard. Owner and TIAA LLC shall have the
right (at their sole expense) to inspect and audit such records and statements
required by this Agreement at reasonable hours during the term of this
Agreement and for a period of one (1) year after the effective termination
date of this Agreement, and at any time to take possession of copies of all
bank statements, check registers, canceled checks and invoices, bills and
supporting data related to the Property.
(ii) Tenant Complaints. Consistent with the Operating
Standard, Manager shall maintain businesslike relations with tenants and shall
maintain and, if requested, provide to Owner in a timely manner, records
setting forth tenants' service requests and complaints received and Manager's
action taken to resolve the same.
(iii) Inspections. As part of a continuing program to secure
full performance by tenants of all maintenance and other obligations for which
they are responsible, Manager shall make regular inspections of the Property,
including all rentable and common areas, and, in addition, shall make such
other inspections as may be consistent with the Operating Standard.
(iv) Personnel Returns Required by Law. Manager shall
prepare, execute and file punctually when due (after giving effect to
permitted extensions) all forms, tax returns and other reports required by law
relating to the employment of personnel. Manager shall promptly and timely pay
all taxes and other payments required in connection therewith.
(v) Compliance with Legal Requirements; Contracts. Subject
to the limitations set forth in Section III(B) of this Agreement and to the
extent the same is materially consistent with the Operating Standard, Manager
shall take such necessary action to comply with any and all governmental
constitutions, statutes, regulations, codes, orders or other requirements
affecting the Property from time to time in effect or enacted by any federal,
state, county, municipal or other authority having jurisdiction thereover, and
to comply with all requirements or orders of the Board of Fire Underwriters or
other similar bodies and with all contracts and other agreements affecting the
Property (collectively and individually, the "Legal Requirements"). Manager,
however, shall not take any such action so long as Manager (with Owner's
consent) or Owner is contesting or either party has affirmed to the other its
intention to contest (and promptly institutes proceedings contesting) any such
Legal Requirement, except that if failure to comply promptly with any such
Legal Requirement would or might expose Manager or Owner to criminal
liability, Manager shall cause the same to be complied with, with or without
Owner's approval.
Manager, promptly following receipt of notice of any
significant violation of any Legal Requirement, shall give written notice of
same to Owner and shall deliver to Owner copies thereof.
(K) Renting the Property. Manager shall use commercially
reasonable efforts consistent with the Operating Standard and the Business
Plan (x) to lease vacant space and (y) to keep the Property fully rented to
desirable, credit-worthy tenants. In connection with the leasing of the
Property, Manager shall perform the following:
(i) Enlisting Cooperating Brokers. Manager is hereby
authorized on behalf of Owner and at Owner's expense to (x) enter into an
exclusive agency agreement pursuant to which a third party broker ("Exclusive
Broker") will be retained by Manager on behalf of Owner to act as Owner's
representative and exclusive agent to lease all or a portion of the Property
(an "Exclusive Agency Agreement") or (y) cooperate with or permit an Exclusive
Broker to cooperate with third-party real estate brokers representing tenants
("Co-Brokers") and to pay such Exclusive Broker and Co-Brokers a leasing
commission as determined by the then current market rates ("Standard
Commission"). The parties acknowledge that current market rates are as set
forth on Exhibit G annexed hereto. Manager shall notify Owner in writing
giving reasonable detail (and Manager shall give a copy of such notice to TIAA
LLC) of any changes in market rates.
(ii) Advertising the Property. Manager shall advertise the
Property or portions thereof, prepare and secure advertising signs, publish
and distribute brochures, and advertise in periodicals and other forms of
advertising in accordance with the Operating Standard and the Business Plan.
(iii) Referrals; Negotiating. Owner shall refer to Manager
all inquiries for any rental of space or for renewals of leases for space in
the Property; and, except as hereinafter set forth, all negotiations connected
therewith shall be conducted solely by or under the direction of Manager.
Manager shall make such investigation of prospective tenants as shall be
consistent with the Operating Standard. Owner hereby acknowledges that Manager
manages and acts as leasing agent for, and affiliates of Manager own (directly
or indirectly), other properties in the same commercial property market as the
Property which may be competitive with the Property and that the continuation
of such management, leasing or ownership shall not serve as the basis of any
claim against, or result in any liability to, Manager or its affiliates.
Notwithstanding the foregoing sentence, Manager shall not unfairly allocate
leasing opportunities to other properties owned, managed or leased by Manager
or any of its Affiliates (i) which are appropriate for the Property, (ii) if
the Property can satisfy all of the prospective tenant's specific leasing
requirements and (iii) which (if consummated) would comply with the Business
Plan.
IV. Compensation. The compensation of Manager for the
performance of its obligations under this Agreement shall be as follows:
(A) Management Fee. (i) Subject to clause (ii) below,
Manager shall be compensated for its services under this Agreement in an
amount equal to 3% of Gross Collections (hereinafter defined) collected by
Manager in the current calendar month as set forth in the Monthly Report (the
"Management Fee"). Manager shall include in the Monthly Report the calculation
used in determining the Management Fee. The Management Fee for each month
shall be accrued as of last day of the current month. Manager is authorized to
pay itself the Management Fee at any time subsequent to the date that the
Management Fee is accrued and the Monthly Report has been delivered to Owner.
(ii) If the Annual Report shall indicate that the Adjusted
Net Ordinary Cash Flow from the Properties at the end of any Fiscal Year is
less than the anticipated income set forth in the original approved Business
Plans for the Properties for such Fiscal Year and to the extent that such
shortfall, whether from a decrease in revenue or increase in expenses, is not
attributable to changes in market conditions, then the Management Fees for all
the Properties shall be reduced on a dollar for dollar basis, to not less than
2% of Gross Collections from all of the Properties. Owner or TIAA LLC, on
behalf of Owner, shall notify Manager of the extent to which Owner believes it
is entitled to any reduction in the Management Fee pursuant to this clause
(ii). The provisions of this clause (ii) are intended to operate in tandem
with (and without duplication of) the corresponding provisions of the other
Management Agreements between the other Property Owners and Manager to affect
the aggregate Management Fees payable under all such Management Agreements.
(iii) Any dispute regarding the Management Fee (including
any dispute under clause (ii)) shall be resolved by arbitration in accordance
with Article XIX.
(B) Leasing Commissions. For Manager's services under
Section III(K) of this Agreement, Owner shall pay to Manager a leasing
commission ("Leasing Commission") in the following manner:
(i) Existing Leases. Manager shall not be entitled to a
Leasing Commission by virtue of any leases executed by Owner prior to the date
hereof for space in the Property (each, an "Existing Lease"), whether or not
the terms of such Existing Lease have commenced or the tenants under such
lease have commenced to occupy the space; provided, that, subject to the
limitations set forth in subparagraph (v) below, Manager shall receive a
Leasing Commission in connection with (a) any renewal of any Existing Lease
(whether or not pursuant to an existing option), (b) the expansion of the
space presently covered by such Existing Lease (whether or not pursuant to the
exercise of any option contained in the Existing Lease) (c) an amendment of an
Existing Lease that results in additional income to the Owner or (d) existing
Leases set forth on Exhibit H.
(ii) Space Occupied by Owner and by Agent. Manager shall not
be entitled to a Leasing Commission on account of any space in the Property
leased to or occupied by Owner, by Manager, or by any affiliate of Owner or
Manager, where such leased or occupied space is used primarily for the
management and operation of the Property.
(iii) New Leases and Expansions. Manager shall not be
entitled to a Leasing Commission on account of any space in the Property
leased to a tenant by an Exclusive Broker retained by Manger pursuant to an
Exclusive Agency Agreement. Subject to the limitation in the foregoing
sentence, in connection with (a) all new leases for space in the Property (and
the renewals of such new leases or the expansion of the premises demised
pursuant to such new leases during the term of this Agreement) and (b) those
instances set forth in paragraph (i) above where Manager shall be entitled to
a Leasing Commission, Manager shall receive the following as a Leasing
Commission: (1) if a Co-Broker is entitled to a leasing commission, Manager
shall be entitled to a Leasing Commission in an amount equal to 25% of a
Standard Commission or (2) if no Co-Broker is involved in the transaction,
Manager shall be entitled to a Leasing Commission equal to 50% of the Standard
Commission. Manager, on behalf of Owner, shall pay all leasing commissions,
fees, and commissions of the Co-Broker from the Bank Account.
(iv) Payment of Leasing Commissions. Leasing Commissions
shall be due and payable to Manager as follows: Leasing Commission upon (1)
with respect to a new lease, lease amendment, lease expansion or lease renewal
(other than to evidence the exercise of a lease expansion or renewal option,
which shall be governed by clause (2) of this sentence), 50% upon the
execution and delivery of a final lease (or lease amendment) by Owner (or
Manager) and tenant and 50% upon the taking of occupancy and the commencement
of rent payments and (2) with respect to a lease expansion option or lease
renewal option, the date such tenant exercises its option; provided, however,
that if the tenant defaults prior to paying the first month's rent with
respect to the expansion space (in the case of a lease expansion option) or
the first month's rent with respect to the renewal period (in the case of a
lease renewal option), (as the case may be) and the lease is terminated on
account thereof, Manager shall refund 50% of the Leasing Commission paid with
respect to such lease expansion option or lease renewal option.
(v) Commission After Termination. Manager shall not be
entitled to a Leasing Commission respecting (a) a lease for space in the
Property or (b) any renewal or expansion by a tenant, in each case occurring
after termination of this Agreement. Notwithstanding the foregoing, Manager
shall be entitled to a Leasing Commission for (x) any Leasing Commission
accruing through the date of the termination of this Agreement which was not
yet payable as of the date of the termination; or (y) all Prospective Tenants
with whom Manager was in negotiation at the time of giving or receipt of such
notice of termination, provided that within fifteen (15) days following notice
of termination of this Agreement, Manager shall register with Owner in writing
a list of all such Prospective Tenants and setting forth with respect to each
such Prospective Tenant, the tenant's name and address, and the space(s) in
the Property for which negotiations were then in progress, and further
provided that, within a period of one hundred thirty-five (135) days after the
effective date of termination, a lease with such prospective tenant for space
in the Property was actually entered into. As used herein the term
"Prospective Tenants" shall mean (i) prospective new tenants at the Property
and (ii) existing tenants with whom Manager was negotiating for renewal of
their leases and/or expansion of their premises and who agree to such renewal
or expansion within such 135 day period.
(vi) Cancellation Provision. In leases containing a
cancellation privilege on the part of the tenant, Owner shall pay to Manager a
Leasing Commission in accordance with the provisions of Section IV(B)(iv)
computed as if the lease term ended on the date when cancellation could first
occur (the "Cancellation Date"), and, in the event of cancellation, no further
Leasing Commission will be due. If the tenant does not exercise the
cancellation privilege and remains as a tenant in the Property beyond the
Cancellation Date, Owner shall pay the remainder of the Leasing Commission.
V. Bank Account. Owner shall establish a bank account (the
"Bank Account") into which all funds collected by Manager for the benefit of
each Owner under this Agreement shall, without exception, be deposited
promptly by Manager. The Bank Account shall be in Owner's name, and Manager
and Owner shall be authorized to deposit and withdraw moneys from the Bank
Account in accordance with this Agreement. Owner and Manager shall maintain in
the Bank Account the Property Level Reserves to permit the proper and timely
performance by Manager of its obligations under this Agreement and to maintain
the Operating Standard taking into account anticipated future revenues and
expenses. To the extent required by law or provided in leases at the Property,
Manager shall deposit any security deposits received by Manager in a separate
bank account in the name of, and for the benefit of, Owner to be administered
and applied by Manager on behalf of Owner in accordance with such leases and
applicable law.
VI. Hold Harmless
(A) Owner agrees to (i) hold and save Manager free and
harmless from any damages or injuries to persons or property by reason of any
cause whatsoever either in and about the Property or elsewhere when Manager is
carrying out the provisions of this Agreement or acting under the express or
implied directions of Owner; (ii) reimburse Manager upon demand for any monies
which Manager is required to pay out for any reason whatsoever, either in
connection with, or as an expense in defense of, any claim, civil or criminal
action, proceeding, charge or prosecution made, instituted or maintained
against Manager or Owner and Manager jointly or severally, affecting or due to
the condition or use of the Property, or acts or omissions of employees of
Owner, or arising out of or based upon any law, regulation, discriminatory
practices (sexual or harassment), requirement, contract or award relating to
the hours of employment, working conditions, wages and/or compensation of
employees or former employees of Owner, or otherwise in connection with the
ownership, operation, leasing, maintenance or status of the Property or the
performance by Manager of its duties under this Agreement; and (iii) defend
promptly and diligently, at Owner's sole expense, any claim, action or
proceeding brought against Manager or Manager and Owner jointly or severally
arising out of or connected with any of the foregoing, and to hold harmless
and fully indemnify Manager from any judgment, loss or settlement on account
thereof; provided, however that Owner shall have no obligation under (i)-(iii)
hereof with respect to any matter for which it is finally determined that
Manager is obligated to indemnify Owner under (B) below, although pending such
a determination Owner shall advance the cost of defense subject to a right to
recoup the same upon final determination that Manager is not entitled to
indemnification hereunder. It is expressly understood and agreed that the
foregoing provisions of this Section shall survive the termination of this
Agreement, but this shall not be construed to mean that Owner's liability does
not survive as to other provisions of this Agreement.
(B) Manager shall indemnify and hold Owner harmless of, from
and against any and all expenses, claims, damages, losses and liabilities
caused or occasioned by or arising out of the fraud, gross negligence, willful
or wanton misconduct of Manager or acts of Manager beyond the authority
granted to Manager under this Agreement.
VII. Representations, Warranties and Covenants of Manager.
Manager hereby warrants and represents that Manager is a duly licensed real
estate broker in the State where the Property is located. Manager further
represents and warrants that it is in good standing and otherwise is qualified
to do business in such jurisdiction, and has full power and authority to enter
into this Agreement and carry out its obligations under this Agreement.
VIII. Termination.
(A) During the term of this Agreement, including any renewal
term, TIAA LLC on behalf of Owner may terminate this Agreement upon ten (10)
Business Days' prior written notice to Manager if an OM Termination Event
occurs pursuant to Section 7.02(c) of the Operating Agreement.
(B) In the event of a sale (including a sale by foreclosure
or deed in lieu of foreclosure) of the Property, this Agreement shall
automatically terminate with respect to such Property upon the consummation of
such sale.
(C) Manager may terminate this Agreement at any time upon 45
days' prior written notice, which notice shall specify the effective date of
termination.
(D) Upon termination:
(i) Manager shall have the right to remove from the
Property, without compensation to Owner, any computer equipment and any
proprietary software owned by Manager;
(ii) an escrow fund held by a bank, title insurance company
or other escrow agent designated by Manager and reasonably acceptable to Owner
("Escrow Agent") in an amount reasonably acceptable to Manager and Owner shall
be established from Gross Collections (or, if Gross Collections are not
sufficient, with funds provided by Owner) to cover (a) any amounts which are
due or shall become due to Manager, (b) any expenses which are required to be
paid by Manager under the Management Agreement and (c) other pending or
contingent claims, including those which arise after termination for causes
arising during the term of this Agreement.
(iii) an escrow fund to be held by Escrow Agent in an amount
reasonably acceptable to Manager and Owner shall be established from Gross
Collections (or, if Gross Collections are not sufficient, with funds provided
by Owner) to reimburse Manager for all costs and expenses incurred by Manager
which arise out of the termination of employment of Manager's employees at the
Property, such as reasonable severance pay, payments with respect to any
pension plan, unemployment compensation or other employee liability costs; and
(iv) any signage which contains the word "Reckson" (or any
initials or abbreviations thereof) or any trademark, tradename or logo
identifying "Reckson", directly or indirectly, may be removed by Manager from
the Property, provided that Manager shall repair any physical damage caused by
such removal.
(E) Notwithstanding the termination of this Agreement under
this Section VIII, Owner and Manager shall be liable for and shall be
obligated to perform their respective duties or obligations under this
Agreement up to and including the effective date of termination and Manager
shall be entitled to compensation in accordance with this Agreement accruing
through the date of termination, as well as any compensation which may be owed
to Manager after the termination of this Agreement pursuant to this Agreement.
Upon any such termination, Manager shall forthwith (i) deliver to Owner, as
received, any funds due Owner under this Agreement but received after such
termination, (ii) deliver to Owner all materials and supplies, and keys,
leases, contracts and documents, and such other accounting, paper,
correspondence, files and records pertaining to the Property or to this
Agreement, (iii) assign to Owner, or to anyone designated by Owner without
recourse, representation or warranty, such existing Contracts as Owner shall
require, (iv) furnish to Owner, or to anyone designated by Owner, all such
information, and take all such action as Owner shall require in order to
effectuate a professional, orderly and systematic ending of Manager's duties
and activities hereunder. Within ten (10) days after the effective date of any
such termination, Manager shall deliver to Owner a Monthly Report for the
period since the last Monthly Report, and within sixty (60) days after the
effective date of any such termination, Manager shall deliver to Owner the
Annual Report for the Fiscal Year or portion thereof ending on the effective
date of termination. The provisions of this Section and Manager's and Owner's
obligations hereunder, shall survive the termination of this Agreement.
IX. Notices. All notices required or permitted by any party
under this Agreement shall be in writing, and served upon any party by (A)
personal delivery, (B) by United States mail, postage prepaid, by registered
or certified mail, return receipt requested, (C) by telecopier with
confirmation of receipt, confirmed in a writing by overnight courier sent on
the same day in accordance with (D) below, or (D) by overnight courier, in
each instance addressed to the respective parties at their respective
addresses as set forth below:
To Owner:
with a copy to: TIAA Tri-State LLC
c/o Teachers Insurance and Annuity Association/College
Retirement Equities Fund
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
and a copy to: TIAA Tri-State LLC
c/o Teachers Insurance and Annuity Association/College
Retirement Equities Fund
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Chief Counsel-Mortgage and Real Estate Law
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
To Manager: Reckson Management Group, Inc.
c/o Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Each notice, demand, request or communication which shall be
mailed, delivered or transmitted in the manner described above shall be
deemed, given, served or delivered at such time as it is received by the
addressee upon presentation or at such times as delivery is attempted in the
case of any change in address as to which notice was not given to the other
party as required hereunder or in the case of a refusal to accept delivery.
Counsel for each party may deliver notices on behalf of such party.
X. No Joint Venture. Nothing herein shall be deemed or
construed to create any partnership, joint venture or other form of joint
enterprise between the parties hereto.
XI. Agreement Not Assignable. This Agreement is personal in
nature, and neither party may, without the express prior written consent of
the other party, assign or transfer its rights hereunder, nor permit any
assignee or transferee to assume its obligations hereunder. Without intending
to limit the foregoing, each party is expressly prohibited from appointing
sub-agents without the express prior written consent of the other party.
Notwithstanding the foregoing, without Owner's consent, Manager may (A) assign
its rights under this Agreement or (B) transfer its ownership interests, so
long as in each case after such assignment or transfer, Manager remains an
Special Affiliate of Reckson; provided however that an assignment of this
Agreement to an entity which is not a Special Affiliate of Reckson or a
transfer of the ownership interests in Manager which results in Manager not
being a Special Affiliate of Reckson which Reckson deems reasonably necessary
or desirable in order for Reckson Associates (as defined in the Operating
Agreement) to maintain its tax status as a REIT, shall be permitted, so long
as the Senior Management of Reckson remains actively involved in the
management of the assignee or transferee.
XII. Entire Agreement and Binding Effect. This Agreement
shall constitute the entire agreement between the parties hereto and no
modification or amendment thereof shall be effective unless made by
supplemental agreement in writing, executed by both of the parties hereto.
This Agreement shall be binding, upon and shall inure to the benefit of the
parties hereto, and, to the extent assignment does not violate the provisions
of Section XII hereof, upon their respective successors and assigns.
XIII. New York Law. This Agreement is made under and shall
be governed by the laws of the State of New York without giving effect to
principles of conflict of laws. Any court of competent jurisdiction within the
State of New York shall be the proper forum for bringing an action to enforce
or construe the provisions of this Agreement. If any court of competent
jurisdiction is unable to construe any provision of this Agreement or holds
any part thereof to be invalid, such holding, shall in no way affect the
validity of the remainder of this Agreement.
XIV. Attorneys' Fees. In the event of any action between
Manager and Owner seeking enforcement of any of the terms and conditions of
this Agreement, or in connection with the Property, the prevailing party in
such action shall be awarded, in addition to damages, injunctive or other
relief, its reasonable costs and expenses, including reasonable attorneys'
fees.
XV. Authority. Subject to the limitations set forth in this
Agreement, Manager may enter into and execute any agreement or agreements
(other than leases, lease amendments, renewals, modifications, terminations or
surrenders which shall be entered into and executed only by Owner) and any
other instruments or documents and take all actions consistent with the
Operating Standard and the Business Plan, for, and on, Owner's behalf as shall
be necessary to carry out the intent and purposes of this Agreement. All
actions taken by Manager on behalf of Owner shall be binding on Owner and all
third parties shall be entitled to rely on any document signed, or actions
taken, by Manager to be the action or obligation of Owner. So long as Reckson
is the Operating Member under the Operating Agreement, every act of Manager
which requires Owner's consent and does not specifically require TIAA LLC's
consent shall be deemed consented to by Owner to the extent the Operating
Member is entitled to act without the Non-Operating Member's consent under the
Operating Agreement. So long as Reckson is the Operating Member under the
Operating Agreement, every act of Manager which requires notice to Owner and
does not specifically require notice to TIAA LLC shall be deemed given to
Owner.
XVI. Signage. Manager may, subject to Owner's prior consent,
place on the Property such signage as Manager deems to be consistent with the
Operating Standard, provided that such signage shall not refer to Manager or
its Affiliates as the owner of the Property.
XVII. Independent Contractor. Manager understands and agrees
that its relationship to Owner is that of independent contractor and that it
will not represent to anyone that its relationship to owner is other than that
of independent contractor.
XVIII. Books and Records. Manager will cooperate with Owner
to coordinate a download from IBS to Timberline for the maintenance of
parallel books by the Members.
XIX. Arbitration
(A) Any dispute under Section IV(A)(i) or (ii) of this
Agreement shall be finally settled by arbitration in accordance with CPR
Institute for Dispute Resolution Rules for Non-Administered Arbitration,
except as modified herein. The place of arbitration shall be New York, New
York. Either Party may commence arbitration by addressing to the other party a
notice of arbitration. Within 5 days after receipt of the notice of
arbitration, the Respondent shall deliver to the Claimant a notice of defense.
In the event Respondent does not deliver such a notice, all claims set forth
in the demand shall be deemed denied.
(B) The arbitration shall be conducted by a sole arbitrator
jointly appointed by the parties within 10 days of receipt by the Respondent
of the notice of arbitration. If the parties have not jointly appointed an
arbitrator by that time, either party may request the CPR to appoint the sole
arbitrator, and the CPR shall endeavor to make the appointment within 5 days
of that request, provided, however, that its failure to meet that deadline
shall in no way impair the effectiveness of the appointment. The CPR shall
endeavor to appoint as arbitrator a person with substantial experience in the
real estate business, but the appointee's qualifications or lack of
qualifications in this respect shall under no circumstances impair the
effectiveness of the appointment or provide cause for challenge. The CPR shall
have no obligation to follow the procedures set forth in Rule 6, but shall
instead appoint a person whom it deems qualified to serve.
(C) The arbitrator shall have authority to take all steps
necessary and appropriate in order to hold a hearing within 40 days of his or
her appointment and to render an award within 5 days thereafter. The
arbitrator shall have full discretion to set the procedure or modify the Rules
in any way he or she deems necessary in order to meet those deadlines.
Provided, however, that failure to meet those deadlines shall in no way affect
the validity or effectiveness of the award.
(D) In each arbitration, the arbitrator shall only determine
the disputed amount of the Management Fee under Section IV(A)(i) of this
Agreement or the disputed amount of any reduction in the Management Fee under
Section IV(A)(ii) of this Agreement. The arbitrator shall have no authority to
award damages beyond the disputed amount in Section IV(A)(ii). The parties
expressly waive their right to seek any such damages.
(E) The arbitration and this clause shall be governed by
Title 9 (Arbitration) of the United States Code, the decision of the
arbitration shall be final and judgment on the award may be entered by any
court of competent jurisdiction. The parties herewith consent to jurisdiction
in the federal and state courts located in the county of New York, New York,
for the purpose of enforcing the award.
(F) Each party is required to continue to perform its
obligations under this Agreement pending final resolution of any dispute
arising out of relating to this Agreement, unless to do so would be impossible
or impracticable under the circumstances.
IN WITNESS WHEREOF, Owner and Manager have each caused their duly
authorized officers to execute this Agreement as of the day and year first
written above.
OWNER
By:________________________________
Name:
Title:
MANAGER
RECKSON MANAGEMENT GROUP, INC.
By:________________________________
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
PROPERTY MANAGEMENT AND LEASING AGREEMENT
BETWEEN
______________
AND
RECKSON MANAGEMENT GROUP, INC., A NEW YORK CORPORATION
TABLE OF CONTENTS
RECITALS.......................................................................................................1
AGREEMENT......................................................................................................2
I. Appointment..................................................................................2
II. Term.........................................................................................2
III. Services To Be Performed By Manager..........................................................2
(A) Collecting Rents and Enforcing Obligations.............................................2
(B) Paying Expenses........................................................................3
(i) Power to Disburse.............................................................3
(ii) Limitation on Disbursements...................................................3
(iii) No Obligation to Advance......................................................4
(iv) Remainder Remitted to Owner...................................................4
(v) Excluded Expenses.............................................................4
(C) Property Management/Leasing Office.....................................................5
(D) Preparing the Business Plan............................................................6
(E) Making Contracts for the Property......................................................9
(F) Maintaining the Property..............................................................11
(G) Maintaining Insurance.................................................................11
(H) Employing Personnel...................................................................13
(I) Employing Counsel and Other Professionals.............................................14
(J) Miscellaneous.........................................................................14
(i) Records......................................................................14
(ii) Tenant Complaints............................................................14
(iii) Inspections..................................................................15
(iv) Personnel Returns Required by Law............................................15
(v) Compliance with Legal Requirements; Contracts................................15
(K) Renting the Property..................................................................16
(i) Enlisting Cooperating Brokers................................................16
(ii) Advertising the Property.....................................................16
(iii) Referrals; Negotiating.......................................................16
IV. Compensation................................................................................17
(A) Management Fee........................................................................17
(B) Leasing Commissions...................................................................18
(i) Existing Leases..............................................................18
(ii) Space Occupied by Owner and by Agent.........................................19
(iii) New Leases and Expansions....................................................19
(v) Commission After Termination.................................................20
(vi) Cancellation Provision.......................................................20
V. Bank Account................................................................................21
VI. Hold Harmless...............................................................................21
VII. Representations, Warranties and Covenants of Manager........................................22
VIII. Termination.................................................................................23
IX. Notices.....................................................................................25
X. No Joint Venture............................................................................26
XI. Agreement Not Assignable....................................................................26
XII. Entire Agreement and Binding Effect.........................................................27
XIII. New York Law................................................................................27
XIV. Attorneys' Fees.............................................................................27
XV. Authority...................................................................................27
XVI. Signage.....................................................................................28
XVII. Independent Contractor......................................................................28
XVIII. Books and Records...........................................................................28
XIX. Arbitration.................................................................................28
EXHIBIT A OPERATION SPACE AT PROPERTY................................................................A-1
EXHIBIT B BUSINESS PLAN..............................................................................B-1
EXHIBIT C MONTHLY REPORT FORMAT......................................................................C-1
EXHIBIT D QUARTERLY REPORT FORMAT....................................................................D-1
EXHIBIT E EXISTING CONTRACTS.........................................................................E-1
EXHIBIT F CURRENT INSURANCE COVERAGES................................................................F-1
EXHIBIT G COMMISSION SCHEDULE........................................................................G-1
EXHIBIT H EXISTING LEASES............................................................................H-1
INDEX OF DEFINED TERMS
Unless otherwise specified references to Articles of
Sections are to articles and sections of this Agreement. Unless the context
otherwise specifies or requires, capitalized terms used herein shall apply
equally to both the singular and the plural forms of such capitalized terms
and shall have the following respective meanings:
A&E Project: As defined in Section III(E)(ii)(b).
A&E Services: As defined in Section III(E)(ii)(b).
Adjusted Net Ordinary Cash Flow: As defined in Article I of
the Operating Agreement.
Annual Report: Means the financial report of the LLC
prepared by the Operating Member and delivered to the Non-Operating Member
within 90 days after the end of each Fiscal Year in accordance with Section
8.04 of the Operating Agreement.
Bank Account: As defined in Section V.
Budgets: As defined in Section III(D)(i).
Building Manager: As defined in Section III(B)(iv)(a)
Business Day: Monday through Friday of each week, except
that a legal holiday recognized as such by the Government of the United States
and any other day on which banks in the State of New York are required or
permitted to be closed shall not be regarded as a business day.
Business Plan: As defined in Section III(D)(i)
Cancellation Date: As defined in Section IV(B)(vi).
Capital Budget: As defined in Section III(D)(i).
CM Fee: As defined in Section III(E)(ii)(a).
CM Service: As defined in Section III(E)(ii)(a).
Co-Brokers: As defined in Section III(K)(i).
Construction Project: As defined in Section III(E)(ii)(a).
Contract: As defined in Section III(E)(i).
CPI: Means the Consumer Price Index for All Urban Consumers
(CPI-U), All Items, applicable to the N.Y.-Northeastern N.J. area (1982-84 =
100) for urban wage earners and clerical workers, as published by the U.S.
Department of Labor, Bureau of Labor Statistics. If such Consumer Price Index
is discontinued or otherwise revised during the term of this Agreement, the
Consumer Price Index for All Urban Consumers (CPI-U), All Items, U.S. City
Average (1982-84 = 100) for urban wage earners and clerical workers, as
published by the U.S. Department of Labor, Bureau of Labor Statistics, shall
be used, and if such national index is discontinued or otherwise revised
during the term of this Agreement, such other government index or computation
with which it is replaced shall be used in order to obtain substantially the
same result as would be obtained if the Consumer Price Index had not been
discontinued or revised.
CPI Increase: As of any date during the term of this
Agreement (such date, the "Determination date"), the percent of increase, if
any, in the CPI for the month in which the applicable Determination Date
occurs over the CPI for September, 2000. The parties agree that if such
percentage increase is not an even multiple of 10%, such percentage shall be
reduced to the next lowest even multiple of 10%.
Emergency Project: As defined in Section III(E)(ii)(b).
Escrow Agent: As defined in Section VIII(D)(ii).
Exclusive Agency Agreement: As defined in Section III(K)(i).
Exclusive Broker: As defined in Section III(K)(i).
Existing Contracts: As defined in Section III(E)(i).
Existing Lease: As defined in Section IV(B)(i).
Final Plan: As defined in Section III(D)(i).
Fiscal Year: As defined in Section III.
Gross Collections: Means all amounts actually collected by
Manager as rents or additional rent or other charges in connection with the
use and occupancy of the Property, but shall exclude: (i) income derived from
interest on investments or otherwise; (ii) proceeds of claims on account of
insurance policies (except for business interruption or rental insurance);
(iii) abatement or refund of taxes; (iv) awards arising out of takings by
eminent domain; (v) discounts and dividends on insurance policies; (vi)
payments made by tenants for amortization of the cost of above-standard tenant
improvements paid for by Owner, which payments are separately identified in
the lease and are not included in the base rent thereunder; (vii) all purchase
discounts, concessions, rebates and allowances; and (viii) security deposits
unless applied.
Lease: Any lease, license or other agreement now or
hereafter entered into which permits the use and occupancy of any portion of
any Property.
Leasing Commission: As defined in Section IV(B).
Leasing Guidelines: As defined in Section III(D)(i).
LLC Expenses: As defined in Section III.
Management Agreements: At any time, collectively, this
Agreement and each other Management Agreement (as defined in Article I of the
Operating Agreement) then in effect for the Properties.
Management Fee: As defined in Section IV(A).
Management Fees: At any time, the aggregate of the
"Management Fee" payable to Manager under the Management Agreements then in
effect for all of the Properties.
Manager: As defined in the first paragraph of this Agreement.
Members: As defined in the recitals to this Agreement.
Monthly Report: As defined in Section III(D)(iii).
Necessary Expense: Means expenses required to provide
necessary services for the Property and to operate and maintain the level and
quality of services for the Property provided as of the date hereof, plus
(without duplication) (i) any amounts required to comply with (A) all
applicable Legal Requirements, (B) obligations under Leases other than the
general obligation to maintain the applicable property in a first class manner
and (C) other contractual obligations to third parties; (ii) utility charges,
ground rent, amounts payable to Manager under this Agreement, wages and
benefits to employees and insurance premiums; and (iii) amounts necessary to
avoid imminent danger to life or property.
Net Ordinary Cash Flow: As defined in Article I of the
Operating Agreement.
Non-Operating Member: Means TIAA LLC and any party
succeeding to TIAA LLC's membership interest in the LLC.
OM Termination Event: As defined in Section 7.02(c) of the
Operating Agreement.
Operating Agreement: As defined in the recitals to this
Agreement.
Operating Budget: As defined in Section III(D)(i)
Operating Member: Means Reckson and any party succeeding to
the Reckson's membership interest in the LLC pursuant to the provisions of the
Operating Agreement.
Operating Standard: As defined in Section I.
Owner: As defined in the recitals to this Agreement.
Person: Any individual, corporation, association,
partnership, limited liability company, joint venture, trust, estate or other
entity or organization.
Personal Property: As defined in Section III(E)(i).
Property: As defined in the recitals to this Agreement.
Property: As defined in the Operating Agreement.
Properties: As defined in Article I of the Operating
Agreement.
Property Owners: As defined in Article I of the Operating
Agreement.
Property Level Reserves: As defined in Section III(B)(iv).
Prospective Tenant: As defined in Section IV(B)(v).
Proposed Plan: As defined in Section III(D)(i).
Qualified A&E Bidder: As defined in Section III(E)(ii)(b).
Qualified Bidder: As defined in Section III(E)(ii)(b).
Quarterly Report: As defined in Section III(D)(iii).
RCG: As defined in Section III(E)(ii)(a).
Reckson: As defined in the recitals to this Agreement.
Reckson Associates: As defined in Article I of the Operating
Agreement.
REIT: Means a Real Estate Investment Trust.
Revised Plans: As defined in Section III(D)(i).
Special Affiliate: As defined in Article I of the Operating
Agreement.
Standard Commission: As defined in Section III(K)(i).
Successful Contractor: As defined in Section III(E)(ii)(b).
Taxes: Means all sales, payroll, real estate, personal
property, occupancy and other exercise, property, privilege or other taxes and
assessments imposed upon the Property, the LLC (with respect to the Property)
or Owner.
TIAA LLC: As defined in the recitals to this Agreement.
Total Project Cost: As defined in Section III(E)(ii)(a).
