MANAGEMENT AND LEASING AGREEMENT
THIS AGREEMENT is made as of October 10, 1996, between 237 PARK
PARTNERS, L.P., a Delaware limited partnership, having an office at c/o Xxxxxx
Capital Group, L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Owner"), and
TISHMAN SPEYER PROPERTIES, L.P., a New York limited partnership, having an
office at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Manager" or "Agent").
PRELIMINARY STATEMENT
Owner owns fee title to the improved real property commonly referred to
as 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
Owner desires to engage Agent to manage and lease space at the Property
(as defined below), and Agent desires to accept the engagement, in accordance
with the terms of this Agreement.
Therefore, in consideration of the mutual agreements contained in this
Agreement, Owner and Agent agree as follows:
ARTICLE 1
DEFINITIONS, INTERPRETATION
1. Definitions. The following terms have the following meanings
throughout this Agreement:
"Affiliate" means, with respect to a Person, any other Person
that, directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the first Person.
"Annual Budget" means an annual budget, prepared by Agent and
acceptable to Owner, containing on a month-by-month basis (a) the projected
capital improvements which will be made to the Property in a given Fiscal Year,
and (b) the projected operating income and operating expenses of the Property
for a given Fiscal Year, which budget has been approved pursuant to the
provisions of Section 3.1(b) of this Agreement.
"Claim" means any claim, damage, loss, liability, obligation,
demand, defense, judgment, suit, proceeding, disbursement or expense (including
reasonable attorneys' fees or expenses as incurred).
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"Emergency Expense" means any expense which, in Agent's
reasonable discretion, is necessary to (a) protect the health, safety or welfare
of any Person in the immediate vicinity of the Property, (b) prevent immediate
damage or loss to the Property, (c) avoid the suspension of any necessary
service in or to the Property, or (d) avoid criminal or civil liability on the
part of Owner or Agent.
"Fiscal Year" means the twelve-month period commencing on
January 1st and ending on December 31st.
"Fixed Rent" means the fixed annual rent payable by a tenant
under a Lease for the initial, renewal or extension Lease term (as appropriate)
excluding (a) all electrical and other utility charges, (b) any share of
increases in taxes or payments in lieu of taxes (whether or not Owner is
obligated to make payments of real estate taxes or is excused from making
payments pursuant to an exemption or an abatement in whole or in part), wage
rates, operating expenses or cost of living or other similar increases, whether
actual, estimated or otherwise, which the tenant is required to pay under the
Lease, (c) any amounts specifically identified as payable for cleaning, heat,
water, air conditioning or other services, (d) all other items of additional
rent, (e) any increases in the annual fixed rent not expressly provided for in
the Lease and agreed to after the execution of the Lease, and (f) any
consideration received by Owner from the tenant under the Lease for consenting
to an assignment or sublease, or for accepting a surrender or other termination
or cancellation, voluntary or otherwise; and less any amounts paid by Owner for
tenant improvements, tenant allowances, decorations or installations or other
tenant inducements costing, on a per rentable square foot basis, in excess of an
amount to be agreed upon in each Annual Budget, which excess amount shall be
amortized over the Lease term with interest at the Interest Rate. Any rent
abatements and so-called "free rent" and "take-over costs" will be amortized
over the Lease term and an equal portion deducted from Fixed Rent for each Lease
year. If the Lease provides for (i) increases in the fixed annual rent based
upon increases in the cost of living index, porters' wages, operating costs or
similar indices or formulas not capable of precise mathematical determination at
the time the Lease is executed, or (ii) adjustments based upon fair market
rental value, then such increase and adjustments will not be considered in
computing Fixed Rent; however, if the annual rent at the commencement of a
renewal or extension term, or pursuant to an option covering additional space,
is to be fixed based upon a fair market rental value determination, then the
fixed annual rent as so determined will constitute Fixed Rent for purposes of
computing any Leasing Commission payable in connection therewith and any payment
of the Leasing Commission due thereon will be postponed until such determination
is made.
"Governmental Authority" means the United States of America,
the State, the county or city of New York, the Borough of Manhattan or any
agency, department, commission, board or instrumentality of any of them.
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"Gross Revenue" means all (a) rent, additional rent and other
charges and revenues collected under the Leases or in connection with the
Property, (b) amounts collected from all licensees, concessionaires, and similar
users of any portion of the Property (including all amounts collected from
vending machines and coin-operated telephones) at the Property, and (c) proceeds
of rental value insurance or business interruption insurance to the extent paid
to Owner in lieu of any amounts provided for in clauses (a)-(b) above. Gross
Revenue will not include any (i) charges to tenants for above-standard tenant
work, (ii) tenant security deposits (except to the extent applied toward the
payment of rent, additional rent or other charges due under the Leases), (iii)
interest on any funds received in connection with the operation of the Property,
(iv) insurance proceeds (except as provided for in clause (c) above) or
condemnation awards, (v) amounts received on account of any abatement, reduction
or refund of property taxes, (vi) discounts or dividends on insurance policies,
(vii) sums collected through litigation (other than for nonpayment of rent,
additional rent or other charges due under the Leases), (viii) proceeds from the
sale or refinancing of the Property or any portion thereof or interest therein,
(ix) capital contributions to Owner by, or loans to Owner by, partners of Owner
whether or not held by Agent, or (x) amounts received as payments under loans
made to tenants prior to the date hereof (clauses (i)-(x), collectively,
"Excluded Proceeds"); provided that amounts received as payments under loans
made to tenants after the date hereof shall be included in "Gross Revenue". The
proceeds from any buy-out of all or a portion of the remaining term of a Lease,
or from any damage claims against a tenant for lost rent shall be amortized over
the remaining term of the subject Lease and included in the "Gross Revenue" of
Owner in equal monthly installments until the earlier of (i) re-occupancy of the
subject tenant space or (ii) expiration of the term of the subject Lease.
"Insurance Requirements" orders of any Board of Fire
Underwriters or similar body, or any notice of non-compliance from Owner's
insurance carriers, which comes to Agent's attention.
"Interest Rate" means the annual fluctuating rate equal to two
percent (2%) above the rate of interest announced publicly by Citibank, N.A. in
New York, New York as its base rate (or the rate equivalent to its base rate).
"Lease" means any lease, sublease, license or other concession
or other occupancy agreement for space at the Property and any amendment or
supplement thereto.
"Leasing Commission" means a leasing commission calculated in
accordance with and paid at the times and in the manner specified in Article 8,
Section 11.5 and Exhibit "E".
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"Leasing Guidelines" means leasing guidelines for the Property
for a given Fiscal Year, prepared by Agent and acceptable to Owner, containing
(a) proposed leasing activities for the Property for the ensuing Fiscal Year,
and (b) a schedule of acceptable economic terms with respect to Leases being
offered to prospective tenants of the Property and renewals or extensions of
existing Leases (including any rent abatements, so-called "free rent" and
"take-over costs", construction allowances and similar items).
"Legal Requirements" means any law, ordinance, order, rule or
regulation of a Governmental Authority which pertains to the Property, Owner or
Agent (as managing or leasing agent of the Property).
"Management Fee" means an amount equal to one and one half
percent (1.5%) of Gross Revenue, per year, which amount will be payable monthly
in accordance with Article 6.
"Marketing Plan" means a written plan, prepared by Agent and
acceptable to Owner, for the leasing and marketing of the Property, as provided
in Sections 3.15 and 7.2.
"Non-Discretionary Expense" means any expense which, in
Agent's reasonable discretion, is necessary to (a) comply with any Legal
Requirement relating to the Property, (b) comply with any of Owner's obligations
as landlord under any Lease, (c) comply with any of Owner's other contractual
obligations under agreements approved by Owner or entered into by Agent on
behalf of Owner pursuant to this Agreement, (d) fulfill Owner's real estate tax
obligations, (e) maintain insurance for the Property in accordance with the
terms of this Agreement or (f) pay utility bills for the Property.
"Nyprop, L.L.C." means Nyprop, L.L.C., a Delaware limited
liability company in which no less than 50% of the membership interests are
owned directly or indirectly by Agent and/or its Affiliates.
"Operating Account" means an account at a financial
institution selected by Owner entitled "Tishman Speyer Properties, L.P., as
Agent on behalf of 237 Park Partners, L.P.--Operating Account", which account
will bear interest.
"Outside Broker" means a real estate broker other than Agent
assisting with leasing efforts at the Property. The parties do not contemplate
any Outside Brokers being utilized except in connection with the representation
of prospective tenants.
"Outside Broker's Commission Agreement" means a commission
agreement between Owner and an Outside Broker.
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"Person" means a natural person, corporation, partnership,
limited liability company, trust, joint venture, unincorporated association,
Governmental Authority or other entity.
"Property" means the improved real property commonly referred
to as 000 Xxxx Xxxxxx, located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx and
includes all easements, licenses, grants, permits, franchises, privileges,
appurtenances and other rights pertaining thereto.
"Security Deposit Account" means an account at a financial
institution selected by Owner entitled "Tishman Speyer Properties, L.P. Special
Account on behalf of Tenants at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx which
account will bear interest for the benefit of the tenants if and to the extent
required by the Leases or by applicable Legal Requirements.
"State" means the State of New York.
2. Interpretation.
(a) The singular includes the plural and the plural includes
the singular.
(b) The word "or" is not exclusive and the word "including"
is not limiting.
(c) References to a law include any rule or regulation issued
under the law and any amendment to the law, rule or regulation.
(d) References to an Article, Section or Exhibit mean an
Article, Section or Exhibit contained in or attached to this Agreement.
(e) The caption headings in this Agreement are for convenience
and reference only and do not define, modify or describe the scope or intent of
any of the terms of this Agreement.
(f) This Agreement will be interpreted and enforced in
accordance with its provisions and without the aid of any custom or rule of law
requiring or suggesting construction against the party drafting or causing the
drafting of the provisions in question.
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ARTICLE 2
APPOINTMENT, OTHER ACTIVITIES
1. Appointment. Owner hereby engages Manager to manage and operate the
Property and authorizes Manager to exercise, upon all the terms and conditions
hereof, such powers as may be necessary and appropriate for the management of
the Property. Manager hereby accepts such engagement and agrees to perform all
supervisory, management and leasing services and functions reasonably necessary
or incidental to the leasing, management and operation of the Property. Agent
has secured and will keep in effect during the term of this Agreement all
necessary licenses, permits and authorizations to enable Agent to perform all of
its obligations under this Agreement. As soon as practicable after the date
hereof, Owner will (a) notify the tenants and other occupants of space at the
Property and any Persons holding a mortgage on any portion of the Property and
other signatories to the instruments referred to in Section 3.6 of the
appointment of Agent as the exclusive managing and leasing agent of the Property
and (b) instruct the tenants, occupants and mortgagees and such other
signatories to direct all payments and notices under their respective agreements
with Owner to Agent.
2. No Liability for Past Acts or Omissions. Agent will not be liable
for any act or omission of any Person (including Owner and any previous property
manager or leasing agent) with respect to the Property for any period prior to
the date of this Agreement.
3. Other Activities. Owner understands that Agent and its Affiliates
engage in various development, management, leasing and other real estate
activities not related to the Property. Agent and its Affiliate have the right
to engage in these activities (whether or not competitive to the Property) and
to receive distributions and compensation with respect to these activities.
Agent will act in good faith and deal fairly with Owner when engaging in the
services described in this Agreement.
ARTICLE 3
MANAGEMENT RESPONSIBILITIES
1. Submission of Budgets.
(a) As soon as practicable but not later than forty-five (45)
days after the date of this Agreement, Agent will prepare and submit to Owner
for its consideration and approval the proposed Annual Budget for the remaining
portion
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of the Fiscal Year in which this Agreement is executed and delivered. On or
before December 1st of each year thereafter, Agent will prepare and submit to
Owner for its consideration and approval the proposed Annual Budget for the
ensuing Fiscal Year. Prior to approval of the initial Annual Budget, Agent will
operate in accordance with the Interim Budget attached as Exhibit A.
(b) Agent will consult with Owner as to the assumptions used
in preparing the proposed Annual Budget and will make all necessary revisions
thereto. Owner will approve or disapprove the proposed Annual Budget (and
revisions thereto) within thirty (30) days after submission by Agent. If Owner
disapproves any portion of the proposed Annual Budget, then its disapproval will
be accompanied by a description, in reasonable detail, of the specific
objection(s). Agent will promptly revise the proposed Annual Budget in
accordance with Owner's objection and resubmit the proposed Annual Budget to
Owner. If Owner approves any portion of the proposed Annual Budget, then Owner
will promptly communicate such partial approval to Agent. Owner will not
unreasonably withhold or delay its approval to the proposed Annual Budget (or to
any revision thereto).
(c) Owner acknowledges that Agent has provided services prior
to the date hereof in connection with the transition of ownership and management
of the Property from Owner's and Agent's predecessor and has agreed to pay Agent
$50,000 per month (pro rated for any partial month) for such services for the
period commencing August 1, 1996 and ending on the date of execution of this
Agreement. Owner shall pay Agent such amount on the date of execution of this
Agreement.
2. Adherence to Budgets.
(a) Agent will use reasonable efforts to cause the actual
costs of operating and maintaining the Property not to exceed the Annual Budget
(either in total or in any line item). Agent will not, without Owner's prior
approval, incur any operating expenses or make any capital expenditures in
excess of (i) one hundred and ten percent (110%) of the amount set forth in any
line item in the Annual Budget or (ii) one hundred and five percent (105%) of
the total amount of the Annual Budget (each such excess, a "material variance"
for purposes of this Agreement). To the extent ascertainable in advance, Agent
shall notify Owner in advance of any projected material variance from the Annual
Budget (either in total or in any line item). Agent shall not transfer any
amounts from one expense line item to another (other than from any contingency
item to a specific line item) without Owner's prior written consent.
(b) If Owner fails to approve an Annual Budget (or any portion
thereof) for a given Fiscal Year, then Agent will continue to operate under the
most
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recent Annual Budget (including any partial approval of the then proposed Annual
Budget), provided that Agent may incur non-budgeted Emergency Expenses and,
subject to paragraph 3 below, Non-Discretionary Expenses.
3. Emergency Expenses; Non-Discretionary Expenses. Agent may, at any
time, incur Emergency Expenses and, subject to the provisions of this paragraph,
Non-Discretionary Expenses without Owner's prior approval. Agent will give Owner
prompt notice of all Emergency Expenses incurred to the extent that the
Emergency Expenses exceed or are not contemplated under the Annual Budget. Agent
will give Owner reasonable notice of all Non-Discretionary Expenses to the
extent that the Non-Discretionary Expenses would constitute a material variance
prior to payments (in the case of items described in clauses (d), (e) and (f) of
the definition of Non-Discretionary Expenses) and prior to incurrence (in the
case of items described in clauses (a), (b) and (c) thereof). Agent will refrain
from paying any such Non-Discretionary Expenses upon receipt of written notice
from Owner.
4. Operation, Maintenance and Repairs; Payments. Subject to the
availability of funds therefor:
(a) Agent will operate and maintain the Property in a manner
commensurate with that of real properties of a size, character and quality
comparable to the Property.
(b) Agent will provide tenants with (i) the services expressly
set forth in the Leases in existence as of the date of this Agreement, (ii) the
services set forth in the Leases hereafter entered into by Owner, (iii)
additional services customarily provided to tenants for additional charges to
such tenants, and (iv) other services which Owner may approve from time to time.
(c) Agent will cause all ordinary repairs and alterations to
be made to the Property and its mechanical systems and equipment including, but
not limited to, interior and exterior cleaning, plumbing, electrical, HVAC,
carpentry and decorating, and such other normal maintenance and repair work as
may reasonably be deemed desirable or necessary by Owner or Agent, subject only
to the other limitations contained in this Agreement. Agent shall recommend to
Owner the purchase and installation of items of new or replacement equipment
when Agent believes such purchase to be necessary or desirable.
(d) Agent will pay for the account of Owner, to the extent
sufficient funds are available for such purpose from Gross Revenues or from
other funds made available by Owner, and subject to the limitations in this
Agreement, all costs incurred in operating, maintaining and repairing the
Property, when such costs become due and payable, including, but not limited to:
debt service under all mortgages and other payments due to Owner's mortgagees,
as directed by Owner;
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water charges; sewer rents; assessments and all other charges and impositions
payable with respect to the Property; all utility costs; labor and payroll for
employees of the Property; and the cost of operations, maintenance, repairs and
improvements to the Property. Notwithstanding any provision to the contrary in
this Agreement, at no time shall it be the responsibility of Agent to advance
money for payments of any obligations of Owner when funds are not available, but
Agent agrees to advise Owner on a timely basis when funds are not available for
said payments, or when Agent believes anticipated expenses will exceed available
funds.
5. Enforcement of Leases. Agent will take necessary actions to enforce
the terms of the Leases and to collect all rent, additional rent and other
charges due and payable thereunder. Owner authorizes Agent to (i) request,
demand, collect and receive all rent, additional rent and other charges, and
(ii) subject to Owner's prior approval, settle or compromise the payment of such
amounts. For individual settlements or compromises where the disputed amount is
less than Fifty Thousand Dollars ($50,000), Agent need not obtain the prior
approval of Owner, but will give Owner notice of the settlements or compromises.
Agent will keep all tenants informed of all rules and regulations affecting the
Property. Agent shall use reasonably diligent efforts to secure full compliance
by the tenants with the terms and conditions of their respective Leases, and to
this end, use reasonably diligent efforts to see that all tenants are informed
with respect to such rules, regulations and notices as may be promulgated by
Owner. Agent shall not knowingly take any action which would violate any
tenant's Lease, and shall promptly deliver to Owner any notice of default
received from a tenant and use reasonable efforts and due diligence to cure such
default. Agent shall use reasonably diligent efforts to collect and shall
receive for the account of Owner all rents, receipts, accounts, revenues and all
other income from the Property including, with the prior written consent of
Owner and using counsel selected by Agent (from a list of reputable law firms
approved by Owner as provided in Section 5.3), instituting any and all legal
actions or proceedings (in the name of Owner, if necessary or advisable)
required for the collection of revenues from the Property or the ousting or
dispossession of tenants or other persons therefrom.
6. Compliance with Legal Requirements and Contracts. Agent will use its
reasonable efforts to comply with and cause the Property to comply with all
Legal Requirements and will obtain all necessary certificates of occupancy,
licenses or operating permits for the operation of the Property. In addition,
Agent will obtain, at Owner's sole cost and expense, any business license and/or
operating permit which may be required for the operation of the Property. Agent
shall, at its own expense, (i) maintain its corporate or partnership existence;
and (ii) qualify to do business and maintain (or cause one or more of its
employees to maintain) a real estate brokerage license in the State of New York.
Agent will also use its reasonable efforts to comply with and cause the Property
to comply with all terms
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and provisions of (i) any mortgage, deed of trust, security agreement or other
agreement encumbering or affecting the Property or any personal property located
at the Property, a copy of which is provided to Agent, (ii) any casualty
insurance policy insuring Owner's interest in the Property or any personal
property located at the Property, and (iii) any other relevant conditions or
restrictions affecting the Property, in each case so long as Agent is aware of
such terms and provisions. If Owner elects to contest compliance with any of the
foregoing, Owner will notify Agent and Agent will participate in the contest to
the extent reasonably requested by Owner, Owner will bear all costs of such
compliance (or contest). Agent shall promptly furnish Owner with copies of all
material notices which are sent by any mortgagee, space lessee, or ground lessee
to Agent.
7. Books and Records.
(a) Agent will maintain in a manner consistent with good
accounting principals, practices and procedures, a system of books and records,
in detail reasonably acceptable to Owner, for the Property. All books and
records will be prepared on a Fiscal Year basis using the accrual method of
accounting (unless Owner requests that the books and records be prepared on a
cash basis). All books, records and supportive documentation will be maintained
in a prudent manner at the Property or at such other place as Agent and Owner
determine. All books, records and supportive documentation will be the sole
property of Owner, and Agent shall, upon request of Owner, deliver any and all
such documentation to Owner, but Agent may retain copies to the extent Owner has
not identified such material to Agent as constituting proprietary information.
(b) Owner and its representatives will have the right, upon
reasonable prior notice to Agent, to have access to (and audit) the books,
records and supportive documentation of the Property during normal business
hours during the term of this Agreement. Should the audit discover any error in
record keeping, Agent will immediately correct such error.
(c) Agent will use reasonable good faith efforts to keep all
financial information concerning the Property confidential at all times during
and after the term of this Agreement; and no such information shall be given to
any third party (other than professional firms retained in accordance with this
Agreement) without the prior written consent of Owner except as may be required
by law or by legal proceedings.
8. Reports and Statements. Agent will prepare and submit to Owner the
following reports and statements, each of which will be in form and substance
reasonably acceptable to Owner and Agent:
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(a) By the fifteenth (15th) business day of each calendar
month, a tenant report setting forth (i) the amount of leased space and vacant
space for the preceding calendar month, (ii) the amount of rent due and the
status of payments as of the end of the preceding calendar month, and (iii) such
other tenant related information as Owner reasonably requests.
(b) Within a reasonable period of time after Owner's request,
a tenant improvement budget setting forth in reasonable detail the estimated
cost of making the tenant improvements and such related information as Owner
reasonably requests.
(c) By the fifteenth (15th) business day of each calendar
month, an operating statement comparing the amount of actual expenses incurred
with the amount set forth in the Annual Budget for the preceding month. The
operating statement will be supported by the following documents:
(i) a rent roll;
(ii) a cash disbursement journal and receipts reflecting
the cut-off date used for the monthly statement;
(iii) a reconciliation of security deposit accounts, if any;
(iv) a computation of the management fee and the leasing
commissions; and
(v) copies of bank statements for the period corresponding
to the reconciliation.
(d) By the forty-fifth (45th) day following the end of each
calendar quarter (i) a summary variance report comparing actual results for the
quarter and year to date with the Annual Budget, together with detailed
explanation for material variances, and (ii) property level financial statements
(unaudited) for the quarter and year to date, together with projections through
the end of the Fiscal Year.
(e) Within a reasonable period of time after Owner's request,
a report setting forth in sufficient detail all information regarding the
ownership and operation of the Property reasonably necessary for Owner to
prepare its federal, state and local tax returns.
(f) Agent will provide such other information or documents
which Owner may reasonably request from time to time, within a reasonable period
of time after Owner's request, to the extent that such information or documents
are available without unreasonable effort or expense on behalf of Agent.
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(g) Agent shall furnish to Owner, on a timely basis following
receipt by Agent, any and all notices materially affecting the Property
including, without limitation, notices from any taxing or other governmental
authority and notices of violations of law or municipal ordinances or orders
issued by any governmental authority or by any Board of Fire Underwriters or
other similar body. Agent shall obtain bills for real estate and personal taxes,
improvement assessments and other like charges which are or may become liens
against the Property and recommend payment or appeal thereof. Agent shall
promptly forward such bills to Owner and shall ascertain and advise Owner of any
penalties for late payment or discounts for early payment.
(h) Agent shall promptly notify Owner of any known violation
of any Legal Requirements or any Insurance Requirements; advise Owner of any
areas known to Agent in which the Project does not fully comply with any such
Legal Requirements and/or Insurance Requirements; and, unless expressly advised
not to do so by Owner, do or cause to be done all such acts or things in or
about the Property as shall be reasonably necessary or desirable to comply with
any and all Legal or Insurance Requirements and to correct all violations
thereof, and promptly furnish to Owner evidence satisfactory to Owner of such
compliance and/or corrections.
9. Annual Audit; Tax Returns.
(a) Agent will use reasonable efforts to have a nationally
recognized certified public accounting firm (selected by Owner) audit the books
and records of the Property. Agent will cause the accounting firm to deliver to
Owner a copy of the accounting firm's opinion together with the related
financial statements as soon as reasonably practicable after the close of the
Fiscal Year, and Agent will require the accounting firm to deliver same not
later than April 1 of the following Fiscal Year. Owner will bear all costs of
the audit.
(b) Agent will require such accounting firm to prepare any tax
returns and statements which must be filed in connection with the ownership,
operation or maintenance of the Property. Agent will submit the returns and
statements to Owner for its approval prior to filing and, once approved, will
file the returns and statements in accordance with applicable Legal
Requirements. Agent will use reasonably diligent efforts to require the
Property's accountants to complete the Partnership tax returns for distribution
to Owner's constituent partners within 60 days following the end of each Fiscal
Year. Owner will bear all costs of preparing and filing the tax returns and
statements.
(c) Agent acknowledges that Metropolis Realty Trust, Inc., an
indirect partner in Owner, intends to become a public reporting company under
the Securities Exchange Act of 1934. Agent agrees to maintain the Property books
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and records in a manner and to use reasonably diligent efforts to require the
Property accountants to prepare financial statements and reports to enable
Metropolis Realty Trust, Inc. to file on a timely basis all documentation
required to be filed by a public reporting company, including without limitation
forms 10K, 10Q and 8K.
10. Employees.
(a) Agent will on Owner's behalf and for Owner's account
employ, train and supervise such employees as are necessary for the operation
and maintenance of the Property in accordance with this Agreement. All non-union
employees will be employed by Agent on behalf of Owner; however, (i) Owner shall
have the right to request Agent to replace any key on-site employees responsible
for management of the Property and leasing of the Property (whether on-site or
off-site), including, without limitation, all on-site property managers and all
leasing agents, and (ii) Owner will reimburse Agent for all employee
compensation paid to such employees identified on Exhibit A hereto in accordance
with Section 6.2. Agent agrees to hire for Owner's account (and at Owner's
expense) the building employees identified on Exhibit B hereto currently
employed by 000 Xxxx Xxxxxx Associates, L.L.C. from whom Owner is acquiring the
Property and, (i) subject to the provisions of the next sentence, to assume on
behalf of Owner (and at Owner's expense) such party's labor agreements relating
to union employees, and (ii) with respect to non-union employees, provide such
employees (at Owner's expense) the same wages and vacation and severance accrual
rules as are currently applicable to them (as provided in Exhibit C), such other
benefits as are customarily provided by Agent to its comparable employees, and
carry over such employees' accrued vacation and severance benefits. Owner shall
be responsible for any obligations to such currently existing employees of 000
Xxxx Xxxxxx Associates LLC (both union or non-union) for accrued vacation
through the date hereof and for any severance payments regardless of (i) when
such employee is terminated or (ii) whether or not Agent terminates such
employee, or the grounds for termination, unless such employee accepts
employment with Agent or an affiliate of Agent on another project. In the event
an employee is terminated at the Project for reasons unrelated to his job
performance or personal character, Agent will use its good faith efforts to
relocate such employee to another building under its management supervision.
Agent and each employee who is responsible for handling any of Owner's funds
will at all times be bonded by a fidelity bond (commercial blanket). Such bond
shall provide coverage of at least $1,000,000. Agent will promptly deliver
satisfactory evidence of such bond to Owner. Without limiting the generality of
the foregoing, Agent will:
(i) provide such personnel as it deems necessary
(subject to the approval of Owner) for the
proper operation and maintenance of the
Property so that the Building will be
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operated, maintained, and staffed on a
full-time basis in a manner which will
always at least equal the standard of care
and services rendered by leading management
companies performing the same type of
services rendered for first class buildings
in New York City. The number, duties and
cost of all personnel for which Owner will
compensate Agent pursuant to Section 6.2
shall be provided in the Annual Budget.
Subject to the provisions in this Section
3.10, the work performed by on-site
employees shall be exclusively for the
benefit of the Property unless otherwise
indicated in the Annual Budget or otherwise
agreed to by Owner in writing. Agent shall
be solely responsible for supervising and
coordinating, on behalf of Owner, all terms
and conditions of employment for the
employees, including obligations under any
collective bargaining agreement or federal
or state labor laws. In the event of any
labor dispute affecting Agent's duties
hereunder, Agent's obligation shall continue
in full force and effect and, without
reducing the said obligations of Agent,
Agent shall make reasonable efforts to use
supervisory personnel to continue Agent's
services hereunder with minimal disruption
under the circumstances. Agent agrees to
keep Owner reasonably informed on any
union-related negotiation or dispute.
(ii) provide a schedule of employees (in the
format of Exhibit D attached hereto and
hereby made a part hereof) to be employed
"on-site" in the direct management of the
Property. Exhibit D (which may be revised
annually or more frequently, by a writing
executed by the Owner and the Agent) shall
include the number of employees and their
title and salary range and shall also
indicate which employees are bonded or are
covered under the Agent's comprehensive
crime insurance policy. The parties hereto
agree that the services provided by any
employee position listed on Exhibit D may be
utilized for the Property as well
as any property owned by an affiliate of
Owner and managed by Agent. However, the
percentage of time dedicated by that
position shall not be less than the
percentage of that position's total annual
compensation that is allocated to the
Property in the then effective Annual
Budget. The Owner and Agent agree that each
Annual Budget shall specify, as to each
employee position on Exhibit D, the
percentage of that
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position's total annual compensation that is
to be allocated to the Property.
(b) Agent, on behalf of Owner, will be responsible for the
preparation of, and will timely file, all local, state and federal labor payroll
tax reports and other similar reports, and will timely make payments of all
withholding and other payroll taxes with respect to its employees in accordance
with applicable Legal Requirements. Without in any way limiting the foregoing,
Agent represents, warrants and agrees that it will pay and/or deduct from the
compensation of workers of the Property (whether union or non-union) all
contributions, taxes and other payments or charges required to be paid by an
employer with respect to the compensation paid, and to be paid, to its employees
under the provisions of all applicable state unemployment insurance, disability
benefits and withholding tax laws, the Federal Insurance Contributions Act, the
Federal Unemployment Tax Act and the Internal Revenue Code of 1986, as amended,
and will comply with all other local, state and federal laws, regulations and
requirements applicable to union workers at the Property or affecting their
compensation or conditions of employment or applicable to Agent for the
performance of the services hereunder, including, without limitation, the Fair
Labor Standards Act, the Occupational Safety and Health Act, the Equal
Employment Opportunity Act, the Fair Employment Practices Act, the Immigration
Reform and Control Act of 1986, the Employee Retirement Income Security Act of
1974 and any labor union contract in effect.
11. Tax Assessments and Condemnation. At Owner's request, Agent will
render advice and assistance to Owner in connection with negotiating and
prosecuting (a) any claims for the increase, abatement, reduction or refund of
property taxes affecting the Property or the property known as 2 Broadway, and
(b) any awards for any public taking of any portion of the Property. Owner will
reimburse Agent for Agent's out-of-pocket expenses incurred in connection with
rendering such advice or assistance. Agent will not agree to the terms of any
such real estate or condemnation settlement (relating to either the Property or
2 Broadway) without Owner's prior written approval.
12. Improvements. Agent will supervise and coordinate all customary and
ordinary capital improvements to the Property and will assist Owner in
determining which improvements should be made to the Property. Without limiting
the generality of the foregoing, Agent shall provide the associated supervision
and direction for the installation of such improvements and alterations to a
tenant's premises as may be required by the terms of any lease with such tenant
and, at the cost and expense of such tenant or of Owner (as set forth in the
lease or otherwise approved in writing by Owner in advance), provide the labor
and materials, through contractors approved in writing by Owner or Owner's
architect or consultant, to perform such alterations and installations to a
tenant's premises in the Property as are required by the terms of any lease with
such tenant. Owner will reimburse
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Agent for Agent's out-of-pocket expenses incurred in connection with rendering
such services.
13. Consent to Tenant Alterations to Property. At no additional expense
to Owner for the time dedicated to such work, Agent shall review tenant
alterations and installations and may (subject to the next sentence) consent to
and approve such alterations and installations provided for in the respective
Leases of tenants, subject to compliance by the tenants with the terms and
conditions of the applicable Leases and the conditions set forth below in this
Section. With respect to the alterations and installations not provided for by
such Leases (and tenant alterations and installations contemplated in a Lease
but for which the plans are not a part of such Lease), Agent is authorized to
consent to and approve such work provided: (i) such alterations and improvements
are made solely at tenant's expense (including any expenses incurred by Agent or
Owner in connection with such work) and in accordance with all Legal
Requirements and Insurance Requirements, (ii) such alterations and installations
do not affect the basic structure or systems of the Property or interfere with
other tenants and are not outside of the Tenant's demised premises (e.g., do not
include roof installation), and (iii) unless Owner otherwise agrees in writing,
tenant shall, at the expiration or termination of its Lease, be required to
remove any such alterations and installations which involve a cost of removal
greater than Twenty-Five Thousand Dollars ($25,000.00).
14. Tenant Complaints and Requests. Agent will handle promptly all
complaints and requests made by the tenants at the Property.
15. Advertising; Public Relations. Not later than the date on which the
initial Annual Budget is prepared, Agent will prepare for Owner's review and
approval a Marketing Plan for the remaining portion of the Fiscal Year in which
this Agreement is executed and delivered. Such Marketing Plan will include a
strategy for advertising and marketing the leasing of space at the Property,
including specific newspapers, trade journals, brochures, consultants and other
appropriate media which the Agent recommends utilizing, and an estimated amount
budgeted for each such use (which amount will also be included in the Annual
Budget). The Marketing Plan, when approved in writing by Owner, shall form the
basis on which the Property's leasing program will be marketed. Agent will
prepare for Owner's review and approval a Marketing Plan for each ensuing Fiscal
Year, together with and in the manner provided in Section 3.1 with respect to
the Annual Budget. Agent shall implement, or supervise the implementation of,
the leasing and marketing of the Property so long as it does so in accordance
with a Marketing Plan and Annual Budget that has been approved by Owner.
16. General Duties. In addition to the responsibilities set forth in
this Article 3, Agent will perform all other services or activities incidental
to the normal
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and professional operation by Agent of properties similar in type, character and
quality to the Property. Agent shall: (a) assist in the review and preparation
of leasing plans and programs and render assistance in presentations to
prospective tenants, financing groups, governmental officials, civic and
business groups and other persons and entities selected or designated by Owner,
(b) in the event of any refinancing of the Property, cooperate in all respects
and in good faith with Owner and any lender having a security interest in or
lien on the Property ("Lender"), including, without limitation, promptly upon
notice from Owner, executing and delivering any and all such agreements and
establishing and maintaining any and all such accounts as may be required by
Lender in connection with the Property (including, without limitation,
"lock-box" accounts, whether held by Agent or Lender), provided that they do not
materially modify Agent's rights, or materially expand Agent's obligations,
under this Agreement or otherwise, or subject Agent to any personal liability.
Agent shall comply with the requirements of any Lender brought to the attention
of Agent by Owner regarding matters as budget and lease approvals, requisition
procedures and other similar matters, and (c) use reasonable efforts to prevent
the release of any Hazardous Materials on, under or at the Property, to
immediately notify Owner when Agent is made aware of any such release, and to
cooperate in Owner's efforts to remove and/or remediate any such release and, at
Owner's request, to coordinate the removal of any Hazardous Materials discovered
at the Property. For purposes of this Agreement, "Hazardous Material" means and
includes any hazardous substance or any pollutant or contaminant defined as such
in (or for purposes of) the Comprehensive Environmental Response, Compensation
and Liability Act, any so-called "Superfund" or "Superlien" law, the Toxic
Substances Control Act, or any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter in
effect (collectively, the "Environmental Statutes").
ARTICLE 4
BANK ACCOUNTS, DISBURSEMENTS
1. Operating Account. Agent will establish and maintain the Operating
Account. Agent will deposit all Gross Revenues and Excluded Proceeds (other than
tenant security deposits, unless some are applied toward the payment of rent,
additional rent or other charges due under the Leases) received by Agent with
respect to the Property into the Operating Account. Except as otherwise provided
herein, Agent will pay in a timely manner all expenses for the Property from the
Operating Account to the extent that the expenses are contemplated in the Annual
Budget, constitute Emergency Expenses or Non-Discretionary Expenses or are
otherwise approved by Owner.
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2. Security Deposit Account. Agent will establish and maintain the
Security Deposit Account in accordance with applicable Legal Requirements. Agent
will deposit all security deposits received by Agent from tenants of the
Property into the Security Deposit Account. Withdrawals from the Security
Deposit Account may only be made by an authorized and bonded employee of Agent
and may only be used to refund security deposits to tenants or cure defaults of
tenants in accordance with their respective Leases. Any security deposits which
are in the form of letters of credit, marketable instruments or other cash
equivalents shall be held by Agent in safekeeping in a responsible and
appropriate fashion.
3. Shortfalls; Advances.
(a) If, at any time, the funds in the Operating Account are
not sufficient to pay for any expenses of the Property (including the
obligations of Owner hereunder), then Agent will promptly notify Owner of such
anticipated shortfall.
(b) Owner will bear all expenses of owning, operating and
maintaining the Property, including Agent's expenses in connection with the
performance of its responsibilities under this Agreement, and Agent will not be
obligated to advance any of its own funds on behalf of Owner or otherwise incur
any personal obligation for the account of Owner.
4. Payments to Owner. Agent shall remit to Owner, within 15 days
following the end of each fiscal quarter, all rents, receipts, revenues and
other income from the Property remaining after payment of those items provided
for under this Agreement, if any, in a manner as directed by Owner, with Agent
retaining not less than $250,000 for working capital plus budgeted reserves.
ARTICLE 5
MANAGEMENT AUTHORITY, CONTRACTS
1. General Authority. (a) Agent will have the authority to enter into
contracts and incur expenses on behalf of Owner for all goods, services and
supplies necessary or advisable in connection with the operation and maintenance
of the Property in accordance with this Agreement to the extent such expenses
are contemplated in the Annual Budget, constitute Emergency Expenses or real
estate taxes, utility charges or (in the event an approved Budget is not in
effect and subject to the other limitations provided herein) other
Non-Discretionary Expenses or are otherwise reasonably approved by Owner.
Notwithstanding the foregoing, any such contract that requires annual payment(s)
which total in excess of $250,000, or which has a term of more than one year, or
which is with an affiliate
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of Agent, or which would cause any line item of the Annual Budget to be exceeded
by more than a material variance, shall require the prior written consent of
Owner. Together with Agent's request for consent to any such service contract,
Agent shall deliver to Owner a copy of the proposed contract, a statement of the
relationship, if any, between Agent (or the person or persons in control of
Agent) and the party which will supply such goods or services under the proposed
contract, and supporting analysis, if any.
(b) All service contracts shall, unless expressly approved by
Owner: (i) include a provision for cancellation thereof (without penalty) by
Owner upon not more than 60 days' written notice, (ii) require that all
contractors provide evidence of insurance specified in paragraph (d) below, and
(iii) if for work of a nature which would entitle the contractor to file a lien
against the Property, include, unless waived by Owner, a provision requiring the
contractor to provide lien waivers in accordance with the provisions of the New
York Lien Law, in connection with work to be performed under the terms of the
contract.
(c) Agent shall require that each contractor engaged to
perform any work at the Property deliver to Agent a Certificate of Insurance,
evidencing insurance coverage maintained, at such contractor's expense, in no
less than the following amounts: (i) Worker's Compensation -- statutory amount;
(ii) Employer's Liability -- statutory amount; (iii) Comprehensive General
Liability -- $1,000,000 combined single limit for personal injury and property
damage; and (iv) Automobile Liability -- $100,000/$300,000 single combined
limit.
2. Execution of Contracts. All contracts permitted under this Agreement
may be signed by Agent as agent for Owner. Agent will disclose Owner's existence
and identity to all third-party contractors. Agent will use reasonable efforts
to have each contract include an exculpatory clause (similar to the clause set
forth in Section 10.5(a)) limiting Owner's obligations under the contract to
Owner's interest in the Property.
3. Use of Counsel and Other Professionals. If Agent deems it necessary
or desirable to retain attorneys, architects, accountants, engineers or other
third-party professionals, then Agent may retain, on behalf of Owner and at
Owner's expense, professionals selected from a list of professionals
pre-approved by Owner or, if not on such list, with Owner's prior written
consent.
4. Limitation of Authority. Agent will not, without Owner's prior
approval (a) convey, transfer, pledge or encumber any property or other asset of
Owner, (b) institute or defend any lawsuits or other legal proceedings on behalf
of Owner, (c) execute, amend or terminate any Leases, (d) obligate Owner for the
payment of any fee or commission to any real estate agent or broker (other than
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Agent in accordance with this Agreement), or (e) borrow money in the name of
Owner.
5. Value of Goods, Services and Supplies. Agent will use reasonable
efforts to ensure that the consideration paid for any goods, services or
supplies obtained by Agent for the Property will not exceed the amount
ordinarily paid for such goods, services or supplies for properties
substantially similar to the Property. At Owner's request, Agent will procure
competitive bids for the goods, services or supplies obtained by Agent for the
Property. Owner understands, however, that with respect to procuring competitive
bids, accepting services from the lowest bidder may not necessarily be in the
best interest of Owner. Owner will be entitled to receive the benefit of all
rebates, discounts or commissions obtained with respect to all goods, services
and supplies of the Property.
6. Contracts with Affiliates. Agent may contract with any of its
Affiliates to provide goods, services or supplies under this Agreement so long
as (a) Agent discloses the relationship to Owner, (b) the economic and material
non- economic terms of the contract are reasonable and no more favorable than
terms generally available from third parties of comparable experience providing
a similar scope and quality of goods, services or supplies, (c) such contract
otherwise conforms to the requirements of this Article 5, and (d) Owner has
given its written approval of such contract.
ARTICLE 6
COMPENSATION FOR MANAGEMENT SERVICES
1. Management Fee. Owner will pay the Management Fee to Agent on or
before the fifth (5th) business day of each calendar month, for its services in
managing the Property for the immediately preceding calendar month. If this
Agreement commences on a date other than the first day of a calendar month or if
the term expires or is terminated on a day other than the last day of a calendar
month, then the Management Fee will be prorated for such partial month on the
basis of a thirty (30) day month.
2. Reimbursement. Owner will reimburse Agent, on or before the fifth
(5th) business day of each calendar month, for all reasonable out-of-pocket
expenses incurred by Agent directly related to the performance of its
responsibilities under this Agreement, to the extent set forth in the Annual
Budget. Owner understands that Agent's out-of-pocket expenses with respect to
the Property will include items such as (a) costs of preparing printed forms,
notices, checks, stationary, envelopes and similar items, (b) telephone,
telecopier and other communication expenses, (c) postage, delivery and
photocopying costs,
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(d) entertainment expenses (including meals) where appropriate and reasonable
(e.g., the cost of occasionally entertaining key building facility persons and
tenants), (e) costs of advertising and engaging in promotional activities
(including the preparation of brochures and other marketing materials) to the
extent permitted herein, and (f) costs of insurance required to be maintained by
Agent pursuant to Section 9.2 to the extent permitted therein. Owner will also
reimburse Agent for (i) all compensation paid to on-site employees of Agent
(such as base salaries, bonuses, medical benefits, retirement benefits, other
fringe benefits, payroll taxes and any severance payments), (ii) the fair and
equitable portion of such compensation paid to off-site employees of Agent
working on matters relating to the Property to the extent provided in an Annual
Budget approved by Owner, and (iii) all reasonable and customary placement fees
incurred in connection with the hiring of employees of Agent working on matters
relating to the Property (and subject to the prior approval of Owner). Agent
will maintain reasonably detailed records documenting all reimbursable expenses.
Owner shall have the right to audit such records, on reasonable prior notice to
Agent. Agent shall maintain such records, at the Property or at such other place
as Agent and Owner may determine, for a period of not less than 4 years from the
date of the incurrence of the respective fees to which they relate. The
provisions of Sections 6.1 and 6.2 will survive the expiration or earlier
termination of this Agreement.
3. Payment of Compensation. Agent may withdraw the Management Fee and
the reimbursable expenses from the Operating Account as and when the Management
Fee and the reimbursable expenses become due and payable in accordance with this
Agreement.
ARTICLE 7
LEASING RESPONSIBILITIES
1. Leasing Efforts. (a) Agent will use reasonable efforts to lease
space in the Property to desirable tenants upon terms and conditions reasonably
acceptable to Owner. Owner will refer to Agent all offers or inquiries which are
received by Owner with respect to leasing space in the Property.
(b) The services to be performed by Agent as
leasing agent shall include, but shall not be limited to, the following:
(i) Agent shall procure tenants for the Property
and shall be responsible for the leasing of space and the renewal,
extension and expansion of existing leases in the Property upon such
terms and conditions as are specified by Owner; the conduct of all
negotiations related thereto (subject to Owner's direction); and if
requested by Owner arranging for the
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preparation of leases and other documents in form satisfactory to Owner
and approved by Owner and its counsel (which shall be retained by and
at the expense of Owner), including tending to the execution of such
leases by tenants and delivery of such leases; provided, however, that
Agent shall not have any lease executed without securing the prior
written consent of Owner (which consent shall be in Owner's sole and
absolute discretion). Agent shall not have the right to cancel, amend
or accept the surrender of any lease or to consent to a sublease or
assignment of a lease, except with the written consent of Owner. Agent
shall use reasonable diligence to obtain and submit to Owner credit
reports and other financial statements pertaining to prospective
tenants to the extent available.
(ii) Agent shall acquire and maintain a thorough
knowledge of the leasing market for space similar to that contained in
the Property, prepare a leasing and marketing plan for the Property
(which will include, without limitation, analysis of the Property's
leasing activity, market absorption and projected leasing activities)
and recommend pricing and marketing strategies for Owner's
consideration.
(c) Agent represents that it is a licensed
real estate broker and all of its employees required to be licensed real estate
brokers are so licensed and will remain so during the term of this Agreement.
2. Advertisement. Agent will list and advertise the Property for rental
by means of periodicals, signs, plans, brochures or other appropriate means in
accordance with the Marketing Plan and Annual Budget. Agent shall not use
Owner's name in any advertising or promotional material without Owner's express
prior written approval in each instance unless provided for in an approved
Marketing Plan. Advertising and promotional materials shall be prepared in full
compliance with Federal, state and municipal laws, ordinances, regulations and
orders. Any reasonable costs of printing leasing brochures and other promotional
material shall be paid by Owner to the extent provided for in Marketing Plan and
Annual Budget and otherwise to the extent approved in writing by Owner as an
over-budget expense. Agent shall use reasonable efforts to ascertain advertising
and marketing programs being used by competing buildings, and shall utilize such
information in developing the Marketing Plan for the Property.
3. Outside Brokers. Owner acknowledges that Outside Brokers may be
involved in the leasing of space at the Property. Agent will advise owner of the
involvement of any Outside Brokers in any pending transaction. In the event any
Outside Broker is involved, Agent will use reasonable efforts to have each
Outside Broker execute and deliver to Owner an Outside Broker's Commission
Agreement, the form and substance of which shall be subject to Owner's approval.
Agent will
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deliver a fully executed counterpart of the Outside Broker's Commission
Agreement to Owner promptly upon the execution thereof.
4. Reporting. Agent will provide Owner with monthly leasing activity
reports in form and substance reasonably acceptable to Owner and Agent which
shall include a description of prospective tenants contacted during the prior
month.
5. Leasing Guidelines. Not later than the date on which the initial
Annual Budget is prepared, Agent will prepare for Owner's review and approval
Leasing Guidelines for the remaining portion of the Fiscal Year in which this
Agreement is executed and delivered. Such Leasing Guidelines will state proposed
lease rates (gross) and concessions (i.e., free rent, tenant fit-out allowance)
to ensure that the Property is competitive in the marketplace. The Leasing
Guidelines, when approved in writing by Owner, shall form the basis on which the
terms of proposed leases of space in the Property shall be negotiated. Agent
will prepare for Owner's review and approval Leasing Guidelines for the ensuing
Fiscal Year, together with and in the manner provided in Section 3.1 with
respect to the Annual Budget. If Owner and Agent fail to establish new Leasing
Guidelines for any given Fiscal Year, then the Leasing Guidelines established
for the immediately preceding Fiscal Year will continue in effect until Owner
and Agent establish the new Leasing Guidelines. Agent shall update the Leasing
Guidelines from time to time, upon Owner's request.
6. Authority. Agent will have the authority to negotiate with
prospective tenants on behalf of Owner so long as the terms thereof are
substantially in accordance with the Leasing Guidelines. Agent will have no
authority to enter into any Lease on behalf of Owner without Owner's prior
consent. All Leases permitted under this Agreement may be signed by Agent as
agent for Owner or, at Agent's request, by Owner.
7. Conflicts of Interest. The parties acknowledge that Agent and
certain of its Affiliates are the owners and/or managers of other properties
located in New York City, some of which properties may form part of the same
leasing market (the "Leasing Market") (taking into account use, geographical
location, rental rates and building facilities) as the Property. Accordingly,
Agent agrees that, in the event that any then-existing tenant of the Property
enters into negotiations for space (other than at the Property) within the
Leasing Market which is owned or managed by Agent or its Affiliates, or with a
prospective tenant which is considering both the Property and another property
owned or managed by Agent or its Affiliates (and provided that Agent's senior
leasing representative at the Property has actual knowledge that such event has
occurred), Agent shall give Owner notice of Agent's intent to enter into such
negotiations and Owner shall have the right to negotiate directly with such
existing or prospective tenant of the Property.
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ARTICLE 8
COMPENSATION FOR LEASING SERVICES
1. Leasing Commission. If and when a Lease is executed and delivered by
a tenant and Owner pursuant to this Agreement (including any Lease entered into
prior to the date of this Agreement where Agent materially participated in its
negotiation), Owner will pay a Leasing Commission to Agent calculated in
accordance with Exhibit E, subject to Section 8.5 below in the case where an
Outside Broker is involved.
2. Limitations.
(a) If a Lease provides that a tenant has the right to
terminate the Lease at any time prior to the commencement of the term thereof,
then no Leasing Commission will be payable to Agent unless and until the
commencement of the term of the Lease occurs. If a Lease involves a right of the
tenant to cancel or terminate after commencement of the term, the Leasing
Commission will be based on the Fixed Rent through the date of such right and if
the tenant fails to exercise such right the remainder of the Leasing Commission
shall then be due calculated as if the remaining term were part of the initial
Lease term.
(b) If, for any reason, a Lease is not entered into between
Owner and a prospective tenant of the Property, then no Leasing Commission will
be earned by Agent.
3. Renewals and Extensions. If a tenant exercises an option in the
Lease to renew or extend the initial term of the Lease, then Owner will pay a
Leasing Commission to Agent based on the Fixed Rent (determined in accordance
with Exhibit E) payable during the renewal or extension term. Such Leasing
Commission will be calculated at the rates set forth in Exhibit E at the
percentage levels that would have applied if the renewal or extension period
were part of the initial term of the Lease (e.g., if the initial term was 10
years and the renewal term is 5 years, the applicable rates would be for years
11-15). Notwithstanding the foregoing, if, in such event, a commission is
payable to an Outside Broker upon such renewal or extension, then Owner will pay
a leasing commission to such Outside Broker, and will pay to Agent a Leasing
Commission equal to thirty seven and one half percent (37.5%) of the Leasing
Commission amount otherwise payable to Agent (were Agent the sole leasing agent)
provided in accordance with the preceding sentence. If (i) an option or right is
negotiated or (ii) a Lease, option or right is renegotiated and (iii) a renewal
or extension is actually effectuated pursuant thereto, then Owner will pay a
Leasing Commission to Agent (or 37.5% thereof if an Outside Broker is involved)
based upon the new term of the Lease (as extended or renewed) calculated in
accordance with Exhibit E as if it were a new Lease, but net
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of rent, if any, remaining under the Lease previously in effect with respect to
the initial term in the case of an early renewal or extension amortized over the
new term as extended.
4. Additional Space. If, pursuant to or in connection with an option or
right in the Lease, a tenant leases additional space at the Property, then Owner
will pay a Leasing Commission to Agent (or 37.5% thereof if an Outside Broker is
involved) based on the Fixed Rent payable during the expansion space term. Such
Leasing Commission will be calculated at the rates set forth in Exhibit E at the
percentage levels that would have applied if the additional space were part of
the initial term of the Lease (e.g., if the initial term was 10 years and the
additional space were acquired at the end of year 10 for a term of 5 years, the
applicable rates would be for years 11-15). If an option or right to acquire
additional space is negotiated or renegotiated, and then exercised, then Owner
will pay a Leasing Commission to Agent (or 37.5% thereof if an Outside Broker is
involved) calculated in accordance with Exhibit E as if the additional space
were a new Lease.
5. Outside Brokers. If an Outside Broker is entitled to a leasing
commission in connection with the leasing of space at the Property, then Owner
will pay a leasing commission to the Outside Broker pursuant to the Outside
Broker's Commission Agreement and will pay to Agent a Leasing Commission equal
to thirty seven and one half percent (37.5%) of the Leasing Commission amount
otherwise payable to Agent (were Agent the sole leasing agent) set forth in
Exhibit E. Agent will advise Owner of the involvement of any Outside Broker.
6. Timing of Payments.
(a) Owner will pay all Leasing Commissions earned by Agent in
connection with the consummation of a new Lease in two (2) equal installments as
follows: (i) fifty percent (50%) upon execution and delivery of the Lease, and
(ii) fifty percent (50%) upon the earlier of delivery of the demised premises to
the tenant or the date tenant begins paying rent to Owner under the Lease.
(b) Owner will pay all Leasing Commissions earned in
connection with the renewal or extension of a Lease or the leasing of additional
space (in each case pursuant to an option or right in the Lease) in the manner
provided in paragraph (a) above.
(c) The provisions of this Section 8.6 will survive the
expiration or earlier termination of this Agreement.
(d) The provisions of this Section 8.6 are subject to the
provisions of Section 11.5(c).
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ARTICLE 9
INSURANCE
1. Owner's Insurance.
(a) Owner will maintain, or at Owner's written request, Agent,
on behalf of Owner, will maintain in full force and effect during the term of
this Agreement "All Risk" property coverage insuring the Property for its
replacement costs and including coverage for expediting expense and rental
insurance. The policy will (i) include a thirty (30) day notice of cancellation
to Agent in the event of non-renewal, non-payment of premium or material change
of terms, and (ii) be maintained with an insurance company licensed to do
business in the State and reasonably acceptable to Owner, Owner hereby agreeing
to accept a Standard & Poor's rating of at least A-8. If Owner shall request
Agent in writing to obtain such policy, Agent shall have 45 days to obtain such
policy or notify Owner that such policy cannot be obtained on terms more
favorable than the existing policy.
(b) Owner will maintain or, at Owner's written request, Agent,
on behalf of Owner, will maintain in full force and effect during the term of
this Agreement comprehensive general liability insurance (including broad form
contractual, property damage and personal injury coverage) with a maximum
deductible of Twenty-Five Thousand Dollars ($25,000) and a combined single limit
of not less than Fifty Million Dollars ($50,000,000) per occurrence for bodily
injury or death and third-party property damage. The policy will (i) name Agent
as an additional insured party, (ii) include a thirty (30) day notice of
cancellation to Agent in the event of non-renewal, non-payment of premium or
material change of terms, and (iii) be maintained with an insurance company
licensed to do business in the State and reasonably acceptable to Owner, Owner
hereby agreeing to accept a Standard & Poor's rating of at least A-8. Insurance
coverage may be carried under "blanket" policies, but in all events must be the
primary coverage for Owner and Agent for all Claims relating to the Property. If
Owner shall request Agent in writing to obtain such policy, Agent shall have 45
days to obtain such policy or to notify Owner that such policy cannot be
obtained on terms more favorable than the existing policy.
(c) Agent, on behalf of Owner, will provide Owner with
certificates of insurance or other satisfactory documentation evidencing its
compliance with the insurance requirements under this Agreement.
(d) Notwithstanding the foregoing provisions of this Article
9, all insurance in respect of the Property obtained by Agent on behalf of Owner
shall conform to the requirements of any mortgage encumbering the Property that
has been brought to Agent's attention by Owner, the terms and provisions of
which
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mortgage shall control in the event of any conflict between the insurance
requirements set forth therein and the foregoing provisions of this Agreement.
2. Agent's Insurance.
(a) Agent will maintain in full force and effect during the
term of this Agreement the following insurance coverage for Property employees:
(i) Comprehensive crime coverage in the minimum amount
of One Million Dollars ($1,000,000).
(ii) Worker's compensation insurance in such
form, and in such amounts, as may be
required by applicable Legal Requirements.
(iii) Non-Occupational disability insurance in such
form, and in such amounts, as may be required by
applicable Legal Requirements.
(b) Agent's insurance policies will (i) include a thirty (30)
day notice of cancellation to Owner in the event of non-renewal, non-payment of
premium or material change of terms, (ii) be maintained with an insurance
company licensed to do business in the State and reasonably acceptable to Owner,
(iii) shall provide for a maximum deductible not in excess of $25,000 and (iv)
otherwise be reasonably acceptable to Owner in all other respects. Agent's
insurance may be carried under "blanket" policies.
(c) Agent will provide Owner with certificates of insurance or
other satisfactory documentation evidencing Agent's compliance with its
insurance requirements under this Agreement.
(d) Owner shall not reimburse Agent for Agent's cost of such
insurance or for any coverages Agent obtains for its own account other than
workmen's compensation and non-occupational disability insurance for personnel
working on the Property.
3. Agent's Duties in Case of Loss.
(a) Agent will promptly notify Owner of any fire or other
damage suffered with respect to the Property.
(b) Agent will promptly notify Owner of any personal injury
suffered or claimed to have been suffered by any Person with respect to the
Property. Agent will also forward to Owner any summons, subpoenas or similar
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legal document served upon Agent with respect to any potential liability of
Owner or Agent in connection with the Property.
(c) Agent will promptly investigate and make a full written
report of all damages or accidents relating to the Property and will submit such
report to and otherwise cooperate with the insurance company representing Owner
or Owner's mortgagee in connection therewith. Agent shall deliver a copy of any
and all such reports to Owner.
(d) Agent may settle Claims on account of damage or injury to
the extent that the settlement is fully covered by insurance and does not expose
Owner to criminal or civil penalties, including the execution of proofs of loss,
the adjustment of losses, signing of receipts, and the collection of money,
without joinder of Owner if the aggregate amount of such claim or series of
claims equals or is less than One Hundred Thousand Dollars ($100,000). If the
amount involved exceeds One Hundred Thousand Dollars ($100,000), settlement of
such claim shall be made only with Owner's knowledge and consent. The foregoing
authority of Agent may be revoked by Owner to the extent inconsistent with any
mortgage encumbering the Property.
4. Waiver of Rights of Subrogation. All insurance policies required to
be maintained under this Agreement will include a clause or endorsement
providing that the insurer waives all rights of subrogation against Owner and
Agent with respect to losses payable thereunder if and to the extent such clause
or endorsement is available and can be obtained at a reasonable cost. Each of
Owner and Agent waives all Claims against the other (and their Affiliates and
respective partners, shareholders, directors, officers, employees and agents)
for any loss or damage to the other's property to the extent of insurance
coverage included in a standard "all-risk" form of property insurance. Agent
shall not intentionally take any action (such as admission of liability), except
as required by law, which reasonably would bar Owner from obtaining any
protection afforded by any policy Owner may hold or which reasonably would
prejudice Owner in its defense to a claim based on such loss, damage or injury.
ARTICLE 10
INDEMNIFICATION, EXCULPATION
1. Owner's Indemnity. OWNER WILL DEFEND, INDEMNIFY AND HOLD HARMLESS
AGENT, ITS AFFILIATES AND THEIR RESPECTIVE PARTNERS, SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST ALL CLAIMS ARISING FROM OR IN
ANY WAY CONNECTED WITH (A) THE PERFORMANCE OF AGENT'S OBLIGATIONS UNDER AND IN
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ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, (B) ANY OTHER ACTS PERFORMED BY
AGENT AT THE DIRECTION OF OWNER, (C) THE BREACH OF THIS AGREEMENT BY OWNER, AND
(D) CLAIMS BROUGHT AGAINST AGENT FOR DISCRIMINATION ON THE GROUNDS OF RACE,
COLOR, CREED, RELIGION, SEX, NATIONAL ORIGIN OR ANY OTHER BASIS ("DISCRIMINATION
CLAIMS"), (E) OWNER'S FAILURE (OTHER THAN BY REASON OF AGENT'S DEFAULT UNDER
THIS AGREEMENT) OR REFUSAL TO COMPLY WITH OR ABIDE BY ANY LEGAL REQUIREMENTS.
IF, FOLLOWING A FINAL ADJUDICATION ON THE MERITS BY A COURT OF COMPETENT
JURISDICTION, IT IS DETERMINED ("FINAL DETERMINATION") THAT ACTS OF GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT WERE PERMITTED OR SUFFERED BY AGENT, ITS
PARTNERS, OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES OR AGENTS, OR (WITH
RESPECT TO ANY DISCRIMINATION CLAIM) AGENT IS THE LOSING PARTY, THEN AGENT WILL
BE RESPONSIBLE FOR THE AMOUNT OF THE CLAIM TO THE EXTENT THE CLAIM IS NOT
OTHERWISE COVERED BY INSURANCE REQUIRED TO BE MAINTAINED BY OWNER OR AGENT
("AGENT INDEMNIFIED ACTS"). AGENT FURTHER AGREES TO REIMBURSE OWNER FOR COURT
COSTS AND OTHER REASONABLE EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES,
INCURRED BY OWNER IN DEFENDING ANY ACTION BROUGHT AGAINST OWNER FOR INJURY OR
DAMAGE CLAIMED TO HAVE BEEN SUFFERED AS A RESULT OF AGENT'S WILLFUL MISCONDUCT
OR GROSS NEGLIGENCE OR THAT OF ITS EMPLOYEES OR AGENTS, BUT ONLY IF THERE IS A
FINAL DETERMINATION OF SUCH WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, OR THERE IS
A FINAL DETERMINATION IN A DISCRIMINATION CLAIM WHERE AGENT IS THE LOSING PARTY.
2. Agent's Indemnity. AGENT WILL DEFEND, INDEMNIFY AND HOLD HARMLESS
OWNER, ITS AFFILIATES AND THEIR RESPECTIVE PARTNERS, SHAREHOLDERS, DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST ALL CLAIMS ARISING FROM OR IN
ANY WAY CONNECTED WITH (A) AGENT INDEMNIFIED ACTS, AND (B) THE BREACH BY AGENT
OF ITS OBLIGATION HEREIN TO COMPLY WITH THE LEGAL REQUIREMENTS APPLICABLE TO
PROPERTY EMPLOYEES.
3. Waiver of Claims; Environmental Indemnity. AGENT SHALL NOT BE LIABLE
OR ACCOUNTABLE, IN DAMAGES OR OTHERWISE, TO OWNER FOR ANY ACT PERFORMED OR
FAILURE TO ACT BY IT IN GOOD FAITH AND WHICH DOES NOT CONSTITUTE FRAUD, BAD
FAITH, GROSS NEGLIGENCE OR A BREACH OF THIS AGREEMENT BY AGENT. OWNER WILL ALSO
DEFEND, INDEMNIFY AND HOLD HARMLESS AGENT, ITS AFFILIATES AND EACH OF THEIR
RESPECTIVE PARTNERS, SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
FROM AND AGAINST ALL CLAIMS ARISING FROM OR IN ANY WAY CONNECTED WITH THE
PRESENCE, RELEASE OR DISCHARGE OF ANY HAZARDOUS MATERIALS, HAZARDOUS SUBSTANCES,
HAZARDOUS WASTES OR SIMILAR
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SUBSTANCES AFFECTING ALL OR ANY PORTION OF THE PROPERTY OR AFFECTING ANY LANDS,
SURFACE WATERS, GROUND WATERS OR AIR SPACE ADJACENT TO OR IN THE VICINITY OF THE
PROPERTY (WITHOUT REGARD TO THE SOURCE OR ORIGIN OF THE PRESENCE, RELEASE OR
DISCHARGE OR THE OWNERSHIP OF THE PROPERTY AT THE TIME OF THE PRESENCE, RELEASE
OR DISCHARGE), UNLESS (1) SUCH CLAIM ARISES FROM THE GROSS NEGLIGENCE, OR
WILLFUL MISCONDUCT OF AGENT, ITS AFFILIATES OR ANY OTHER RESPECTIVE PARTNERS,
SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES OR AGENT AND (2) THERE HAS BEEN A
FINAL DETERMINATION OF SUCH GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
4. Survival. The provisions of Section 10.1, Section 10.2 and Section
10.3 will survive the expiration or earlier termination of this Agreement.
5. Exculpation.
(a) No direct or indirect partner or shareholder in or of
Owner (and no officer, director, employee or agent of such partner or
shareholder) will be personally liable for the performance of Owner's
obligations under this Agreement. The liability of Owner for Owner's obligations
under this Agreement will be limited to Owner's interest in the Property and
other assets and the proceeds thereof. A negative capital account of any partner
will not be considered to be a partnership asset. Nothing in this Section
10.5(a) will affect the rights of Agent to seek appropriate relief against any
Person to the extent that such Person commits fraud against Agent.
(b) No direct or indirect partner or shareholder in or of
Agent (and no officer, director, employee or agent of such partner or
shareholder) will be personally liable for the performance of Agent's
obligations under this Agreement. The liability of Agent for Agent's obligations
under this Agreement will be limited to its partnership assets. A negative
capital account of any partner will not be considered to be a partnership asset.
Nothing in this Section 10.5(b) will affect the rights of Owner to seek
appropriate relief against any Person to the extent that such Person
misappropriates funds of Owner or commits fraud against Owner.
ARTICLE 11
TERM, EXPIRATION, TERMINATION
1. Term. This Agreement will be effective as of the date set forth in the
Preface of this Agreement and will continue in full force and effect until the
second (2nd) anniversary of such date. At least 90 days prior to the expiration
of the initial term of this Agreement, Owner and Agent shall discuss in good
faith the
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renewal of the term of this Agreement beyond the initial term, provided that
neither party shall be under any obligation to agree to any such renewal. If
upon the expiration of the term of this Agreement Agent is still serving as
managing and leasing agent for the Property and Owner has not notified Agent in
writing that Agent shall no longer serve as managing and leasing agent for the
Property (such notice to be provided at least 30 days prior to the expiration of
such term), then this Agreement will automatically renew for additional
consecutive 90 day terms on the same terms and conditions set forth in this
Agreement until such time as Owner shall notify Agent in writing that Agent
shall no longer serve as managing and leasing Agent for the Property (such
notice to be provided at least 30 days prior to the expiration of such term).
This Agreement may also be terminated by Owner on sixty (60) days notice if the
Property is either (a) sold by Owner or (b) refinanced by Owner pursuant to a
securitized financing of the Property, provided that termination of this
Agreement as a result of such financing shall only be effective if Agent is not
approved by the rating agency participating in such financing. This Agreement is
terminable only upon the conditions and in the manner provided for in this
Article 11.
2. Owner's Rights of Termination.
(a) If Agent breaches any of the payment obligations or other
material terms of this Agreement, Owner will give Agent notice of such breach.
If Agent fails to cure the breach within 10 business days, in the case of a
monetary default, or, in the case of a non-monetary default, 30 days, after
receiving such notice (provided that if any such non-monetary breach cannot by
the exercise of diligent effort be cured within such 30 day period, the same
shall be extended as long as reasonably necessary provided Agent is diligently
prosecuting a cure but in no event longer than 120 days), Owner may terminate
this Agreement upon notice to Agent.
(b) If Agent or any principal of Agent intentionally
misappropriates funds of Owner or commits fraud against Owner, then Owner may
terminate this Agreement immediately upon notice to Agent.
(c) If a petition in bankruptcy is filed by or against Agent
and is not dismissed within 60 days, or a trustee, receiver or other custodian
is appointed for a substantial part of Agent's assets and is not vacated within
60 days, or Agent makes an assignment for the benefit of its creditors, then
Owner may terminate this Agreement upon notice to Agent.
(d) If a controlling interest in Agent (i.e., any interest in
Agent which includes the exclusive right to direct policy and make managerial
decisions) shall be transferred, sold or otherwise conveyed to a party other
than an Affiliate of Agent, then Owner may terminate this Agreement upon 30
days' notice to Agent;
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provided, that Owner shall not be permitted to so terminate if, following such
transfer of a controlling interest in Agent, one or more of the current senior
management personnel of Agent shall continue to control the policy and
managerial decisions of Agent.
(e) If Nyprop, L.L.C. shall default on its agreement to
purchase shares in Metropolis Realty Trust, Inc. ("MRT") pursuant to the
Subscription Agreement between MRT and Nyprop, L.L.C., then Owner may terminate
this Agreement upon 30 days' notice to Agent.
Notwithstanding any such notice of termination by Owner (under this Section
11.2) or Agent (under Section 11.3), Agent shall be and remain liable for the
performance of its duties and other obligations hereunder through the date of
termination and shall maintain all records, documents, property and files until
the termination date.
3. Agent's Rights of Termination.
(a) If Owner materially breaches any of the payment
obligations or other material terms of this Agreement, Agent will give Owner
notice of such breach. If Owner fails to cure the material breach within 30 days
after receiving such notice (provided that if any such non-monetary breach
cannot by the exercise of diligent effort be cured within such 30 day period,
the same shall be extended as long as reasonably necessary provided Owner's is
diligently prosecuting a cure but in no event longer than 120 days), Agent may
terminate this Agreement upon notice to Owner.
(b) If Owner fails to provide sufficient funds on a consistent
basis to operate and maintain the Property in a first class manner in accordance
with this Agreement, then Agent may terminate this Agreement upon sixty (60)
days' notice to Owner.
(c) If a petition in bankruptcy is filed by or against Owner
and is not dismissed within 60 days, or a trustee, receiver or other custodian
is appointed for a substantial part of Owner's assets and is not vacated within
60 days, or Owner makes an assignment for the benefit of its creditors, then
Agent may terminate this Agreement upon notice to Owner.
4. Obligations Upon Expiration or Termination.
(a) Upon the expiration or earlier termination of this
Agreement, each party will promptly pay to the other party all amounts due and
payable to that party under this Agreement. Within forty-five (45) days after
any such termination, Agent shall deliver to Owner the financial statements
required by Section 3.8 for
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any periods not covered by such reports at the time of termination and a profit
and loss statement for the fiscal year or portion thereof ending on the date of
termination. Within thirty (30) days of the delivery of the final profit and
loss statement and balance sheet, Owner shall approve or dispute the contents
thereof and, provided that Agent has performed all of its obligations under this
Section 11.4, shall make final payment of any unpaid fees owed to Agent under
the terms of this Agreement, subject to offsets and defenses available to Owner
and to resolution of any dispute to the extent that the amount of such fees
would be affected thereby. Nothing contained herein is intended to nor shall it
excuse the timely payment of fees due Agent under the terms of this Agreement.
Owner and Agent agree to act in good faith and use reasonable efforts to resolve
any dispute promptly so a final payment of fees can be made. Upon receipt of
such payments neither party will have any further rights or obligations under
this Agreement, except for those rights and obligations which expressly survive
the expiration or earlier termination of this Agreement.
(b) Upon the expiration or earlier termination of this
Agreement, Agent will deliver to Owner (i) a final accounting reflecting the
balance of income and expenses for the Property as of the date of expiration or
termination, (ii) any balance of funds (including security deposits and advance
rent) belonging to Owner which are then being held by Agent with respect to the
Property, and (iii) all files, books, records, documents and other instruments
relating to the ownership, operation and maintenance of the Property to the
extent required to be maintained by Agent pursuant to this Agreement and not
previously delivered to Owner. In connection with the termination of this
Agreement, Agent shall assign to Owner, to the extent same are assignable, all
contracts and other agreements, if any, executed in the name of Agent, relating
to the operation and maintenance of the Property.
(c) Owner and Agent will use reasonable efforts to ensure an
orderly transition of the operation and management of the Property and will
perform their respective obligations under this Agreement until the expiration
or effective date of the termination of this Agreement.
5. Leasing Commissions. Upon the expiration or earlier termination of
this Agreement, Owner will pay a Leasing Commission to Agent in the following
instances:
(a) If (i) Agent negotiates and delivers a proposed Lease to
Owner for consideration prior to the expiration or termination of this
Agreement, and (ii) Owner and the tenant execute and deliver a Lease within six
months after such expiration or termination.
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(b) If (i) a Lease is not presented to Owner prior to the
expiration or termination of this Agreement, but Agent gives notice to Owner,
within 10 days after such expiration or termination, of negotiations with a
prospective tenant for specified premises within the ninety (90) day period
immediately preceding the expiration or termination of this Agreement, and (ii)
Owner and the prospective tenant execute a Lease for the specified premises
within one hundred and eighty (180) days after the expiration or earlier
termination of this Agreement.
(c) Any Leasing Commission, or portion thereof, that, pursuant
to Section 8.6 is otherwise due and payable upon the date tenant begins paying
rent to Owner under the Lease shall instead be due and payable upon the
expiration date or earlier termination of this Agreement.
ARTICLE 12
GENERAL PROVISIONS
1. Agent's Office. Owner will provide to, and maintain for, at no cost
to Agent, (a) sufficient Agent office space and other space at the Property
reasonably acceptable to Owner and Agent for the conduct of Agent's leasing and
management services hereunder, and (b) all office machines, furniture,
equipment, computers, cabling and supplies of all types and kinds which are
reasonably required by Agent in order properly to perform its duties hereunder.
Such space will be used solely by employees performing responsibilities under
this Agreement. Owner will bear all reasonable costs of operating the space
provided to Agent hereunder.
2. No Discrimination. Neither Owner nor Agent will discriminate against
any person on the grounds of race, color, creed, religion, sex, national origin
or any other basis prohibited by applicable Legal Requirements with respect to
any activity affecting the Property.
3. Availability of Funds. Any obligation of Agent hereunder with
respect to the Property requiring the expenditure of funds shall be subject to
the condition that sufficient funds are then available in the Operating Account
for the performance of such obligation.
4. ERISA. Owner represents and warrants to Agent that no portion of the
Property constitutes plan assets of any employee benefit plan under the Employee
Retirement Income Security Act of 1974 and does not constitute a tax favored
plan under the Internal Revenue Code. Owner will defend, indemnify and hold
harmless Agent, its Affiliates and their respective partners, shareholders,
directors, officers, employees and agents from and against all Claims arising
from
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or in any way connected with the breach of this representation or warranty by
Owner.
5. Notices. All notices, approvals, consents, elections or other
communications under this Agreement must be in writing and may be (a) delivered
personally, (b) delivered by a nationally recognized overnight courier, (c)
mailed by registered or certified mail, postage prepaid, with return receipt
requested, or (d) sent by telecopier (with written confirmation of the receipt
of the telecopy) with the original to follow in the manner specified in clauses
(a)-(c) above, and addressed to the party at its address set forth below:
if to Owner, to:
237 Park Partners, L.P.
c/o Xxxxxx Capital Group, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxx
with a copy to:
Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
if to Agent, to:
Tishman Speyer Properties, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Director of Property Management
with a copy to:
Tishman Speyer Properties, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or at such other address, as from time to time, supplied by a party to the
others by like notice. Notices will be deemed to be received, if personally
delivered, upon delivery, if sent by overnight courier, on the first (1st)
business day after being sent, if sent by mail, on the date set forth on the
return receipt, if sent by
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telecopier, on the date sent if confirmation of receipt shows delivery on or
before 5:00 P.M., or on the next business day if confirmation of receipt shows
delivery after 5:00 P.M. Each party shall be entitled to rely on all
communications which purport to be on behalf of the other party and purport to
be signed by an authorized party.
6. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the respective successors and permitted assigns of Owner
and Agent, but neither Owner nor Agent will have the right to assign its rights
or obligations under this Agreement without the prior written consent of the
other party and any attempted assignment, in the absence of such consent, will
be void and of no effect; however, either party may upon fifteen (15) days'
prior notice to the other party, assign this Agreement to an Affiliate so long
as the Affiliate executes and delivers to the other party an assumption
agreement in form and substance reasonably satisfactory to the other party and
provided that the assigning party shall not be released by or upon delivery of
such executed assumption agreement.
7. Attorneys' Fees. If any action or proceeding is instituted by one
party against the other party with respect to this Agreement, the prevailing
party in the action or proceeding will be entitled to receive from the
non-prevailing party the reasonable attorneys' fees and expenses incurred by the
prevailing party.
8. Amendment. No purported amendment to or waiver of any term of this
Agreement will be binding upon any party, or have any other force or effect in
any respect, unless the same is in writing and signed by the party to be
charged.
9. State Law. This Agreement will be interpreted and enforced in
accordance with the internal laws of the State without giving effect to the
principles of conflicts of laws.
10. Entire Agreement. All prior understandings and agreements between
the parties with respect to the subject matter of this Agreement are merged in
this Agreement. Neither party is relying upon any statement, covenant or
representation made by any other party which is not embodied in this Agreement.
11. No Waiver. No failure or delay of either party in the exercise of
any right under this Agreement will be deemed to be a waiver of such right. No
waiver by either party of any condition under this Agreement for its benefit or
any breach under this Agreement will constitute a waiver of any other or further
right or any other subsequent breach.
12. Further Assurances. Each party will, from time to time, execute,
acknowledge and deliver such further instruments, and perform such additional
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acts, and otherwise cooperate with the other party and be available to consult
with the other party as the other party may reasonably request in order to (a)
effectuate the intent of this Agreement and (b) facilitate Agent's expeditious
performance of its obligations hereunder. Without limiting the foregoing, as
promptly as practicable after execution hereof, Owner shall make available to
Agent (to the extent Owner is in possession) (a) plans and specifications for
the buildings and other structures and improvements at the Property so that
Agent may be advised with respect to, and have knowledge of, the layout,
construction, location, character, plan and operation of the elevators,
escalators, lighting, heating, air conditioning, plumbing, electrical and other
mechanical equipment at the Property; (b) copies of all guarantees given by
contractors or subcontractors in connection with the construction and alteration
of the Property; (c) copies of all Leases of space at the Property; (d) copies
of all mortgages and ground leases affecting the Property; and (e) copies of all
contracts relating to the maintenance and operation of the Property.
13. Effectiveness of Agreement. This Agreement will not become
effective unless and until it is executed and delivered by both Owner and Agent.
14. No Third-Party Beneficiaries. This Agreement is entered into solely
for the benefit of Owner and Agent. No other Person is intended to be a
third-party beneficiary of this Agreement.
15. Divisibility. If any article, section or exhibit of this Agreement
is deemed illegal or unlawful, the same will be struck from this Agreement and
all other articles, sections and exhibits will remain valid and in full force
and effect.
16. Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed to be an original and all of which will together
constitute one instrument.
17. Jury Trial Waiver. OWNER AND AGENT BOTH WAIVE THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BOUGHT BY EITHER PARTY AGAINST
THE OTHER WITH RESPECT TO THIS AGREEMENT.
18. Brokers. Each party represents and warrants to the other party that
the party has not retained any broker, finder or other commission or fee agent,
and no such person has acted on its behalf in connection with the execution an
delivery of this Agreement.
19. Confidentiality; Publicity. The parties agree that no party hereto
shall issue any press release or otherwise publicize or disclose the terms of
this Agreement without the prior written approval of the other party, which
approval shall not be unreasonably withheld. The foregoing shall not apply to
disclosures
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made by a party in the course of normal reporting practices to its shareholders,
and partners, or to lenders, attorneys, accountants and other consultants or as
required by law. Agent will use reasonable efforts to hold confidential the
terms and conditions of the leases and other agreements relating to the
Property, together with all data obtained by Agent in connection with the
Property.
20. Remedies Cumulative. All rights or remedies in this Agreement
specified and all other rights or remedies that the parties may have at law, in
equity or otherwise upon breach of any term or condition in this Agreement
contained upon the part of the other party to be performed, shall be distinct,
separate and cumulative rights or remedies and no one of them, whether exercised
by the non-defaulting party or not, shall be deemed to be in exclusion of any
other right or remedy of such non-defaulting party. No term or condition of this
Agreement shall be deemed to have been waived by either party unless such waiver
be in writing and signed by such party.
21. Asset Manager. Wherever any consent or approval by Owner shall be
required by the terms and provisions of this Agreement, the same may be given by
any asset manager of the Property engaged by Owner and which has been
specifically identified in a written notice by Owner to Agent. Copies of any
required notices or other communications hereunder (including, without
limitation, copies of invoices, leases and financial statements and other
reports) shall be
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delivered to such asset manager at the times and in the manner herein specified
for such notices and communications to be given to Owner.
THIS AGREEMENT has been executed and delivered by Owner and Agent as of
the date first set forth above.
OWNER:
237 PARK PARTNERS, L.P.
By: 237 GP Corp., general partner
By:
Name:
Title:
AGENT:
TISHMAN SPEYER PROPERTIES, L.P.
By: Tishman Speyer Properties, Inc.,
General Partner
By:
Name:
Title:
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EXHIBIT "A"
INTERIM BUDGET
C/M: 11764.0009 434116.1
000 XXXX XXXXXX
BUDGET
FOR THE PERIOD OCTOBER THROUGH DECEMBER 1996
(000's Omitted)
Oct-96 Nov-96 Dec-96 Total
REVENUE:
Base Rent 2,594 2,851 2,899 8,344
Electric 1 1 1 3
Escalations 1,033 1,032 1,033 3,098
Sales & Sundry 47 47 47 141
Parking 3 3 3 9
Contingency (52) (55) (55) (162)
------------- --------------- ------------------- ---------------
TOTAL REVENUE 3,626 3,879 3,928 11,433
------------- --------------- ------------------- ---------------
EXPENSES:
Payroll 122 122 122 365
Cleaning 109 109 109 327
Repairs and Maintenance 98 127 120 345
Rubbish/Waste 0 0 0 0
Steam 2 3 9 14
Electricity 59 51 55 165
Water 8 7 6 21
Miscellaneous 4 4 4 12
Professional Fees 7 7 8 22
Insurance (Premium Payment) (1) 181 0 0 181
Property Management Fee 54 58 59 171
Real Estate Taxes 0 0 0 0
------------- --------------- ------------------- ---------------
TOTAL EXPENSES 644 488 492 1,623
------------- --------------- ------------------- ---------------
NET OPERATING INCOME 2,982 3,391 3,436 9,810
------------- --------------- ------------------- ---------------
OTHER EXPENDITURES:
Commissions 0 0 0 0
Capital Projects (2) 55 85 85 225
Other (3) 100 0 0 100
------------- --------------- ------------------- ---------------
TOTAL OTHER EXPENDITURES 155 85 85 325
N.C.F. BEFORE DEBT SERVICE 2,827 3,306 3,351 9,485
============= =============== =================== ===============
NOTES:
(1) Insurance Premium Payments: See attached analysis.
-----------------------------------------------------------------------------------------------------------------------------------
(2) Summary of Capital Projects:
Oct. Nov. Dec. Total
Warburg: Slab 35 0 0 35
Warburg: Elevator Reprogramming 20 0 0 20
Elevator Upgrade (for Full-Service Contract) 0 75 75 150
Facade Consulting 0 10 10 20
------------ ------------ ---------------- ----------------
55 85 85 225
============ ============ ================ ================
-----------------------------------------------------------------------------------------------------------------------------------
(3) Other: Includes the one-time cost of the build-out of the management office.
C/M: 11764.0009 434116.1
EXHIBIT "B"
LIST OF CURRENT AND PROPOSED STAFFING
[Exhibit B has been provided in a separate written instrument delivered by
Agent to Owner]
C/M: 11764.0009 434116.1
EXHIBIT "C"
TERMS OF EMPLOYMENT OF NON-UNION EMPLOYEES
C/M: 11764.0009 434116.1
EXHIBIT C
[EMPLOYEES/LABOR AGREEMENTS]
Terms of Employment of Non-Union Employees
1. Vacation. An employee is entitled to ten days vacation each year, fifteen
days after five years and 20 days after 10 years.
2. Holidays. The office is closed for nine major holidays and each employee
is also entitled to three floating holidays.
3. Personal and Sick Days. Each employee is entitled to three personal days
and ten paid sick days.
4. Termination/Severance Pay. In case of a termination for reasons other
than malfeasance, an employee is to receive termination pay equal to
one week's salary per full six months of employment up to five years.
Above five years, severance pay is based on a scheduled number of weeks
which can be increased at the discretion of the employer.
The current accrued vacation and severance pay for non-union employees
of 237 Park and 1290 Avenue of the Americas is set forth on the
attached schedule.
The following information is as of the date of commencement of the
bankruptcy case for the Debtors and will be updated by Grantor at the
Effective Date:
C/M: 11764.0009 434116.1
000 XXXX XXXXXX
As of 10/4/96
-----------------------------------------------------------------------------------------------------------------------------------
NAME POSITION WKLY.RATE START DATE TOT.VAC. VAC.DUE VAC.AMT. SEV. TERMIN.
-----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT NON UNION
----------------------------------------------------------------------------------------------------------------------------------
XXXXXXXX, J. SECRETARY 511.81 7/11/88 15 15.25 1561.02 8188.96 0.00
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 511.81 1561.02 8188.96 0.00
----------------------------------------------------------------------------------------------------------------------------------
ELEVATOR R.A.B. CRAFT AGREEMENT
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
XXXXXX, S. MECHANIC 979.20 9/19/83 15 0 0.00 0.00 2937.80
----------------------------------------------------------------------------------------------------------------------------------
XXXXXXX, P. MECHANIC 979.20 11/30/81 15 0 0.00 0.00 2937.80
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 1958.40 0.00 0.00 5875.20
----------------------------------------------------------------------------------------------------------------------------------
ENGINEERS UNION LOCAL 32
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
MARKIC, Z. ENGINEER 645.48 9/76 20 10 1290.96 16782.48 5163.84
----------------------------------------------------------------------------------------------------------------------------------
URANOWSKI, G. ENGINEER 645.48 7/81 20 0 0.00 16782.48 3872.88
----------------------------------------------------------------------------------------------------------------------------------
XXXXXX, P. ENGINEER 645.48 9/21/81 20 10 1290.96 16782.48 3872.88
----------------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX, M. CHIEF 920.00 11/88 15 10 1840.00 23920.00 920.00
----------------------------------------------------------------------------------------------------------------------------------
XXXXXXXX, R. ENGINEER 645.48 1/90 15 0 0.00 16782.48 645.48
----------------------------------------------------------------------------------------------------------------------------------
LUCKIC, M. ENGINEER 645.48 5/92 10 0 0.00 16782.48 0.00
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
TOTAL 9,119.82 7,575.96 124,242.32 26,257.88
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
BLDG.TOT.
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
GRAND TOT.
----------------------------------------------------------------------------------------------------------------------------------
NOTE: Union employees weekly rate is based on their hourly rate times 40 hours.
C/M: 11764.0009 434116.1
EXHIBIT "D"
LIST OF ON-SITE DIRECT MANAGEMENT EMPLOYEES
[Other information in Exhibit D has been provided in a separate written
instrument delivered by Agent to Owner]
C/M: 11764.0009 434116.1
Exhibit "D" As of 10/4/96
Tishman Speyer Properties
Management Assignments
Each position is 100% allocable to its respective building
000 Xxxx Xxxxxx
Name Position
Xxxxx X. Xxxx Property Manager
TBA Asst. Property Manager
Xxxxxx Xxxxxxxx Office Manager
TBA Secretary
Total
Staffing subject to change
C/M: 11764.0009 434116.1
EXHIBIT "E"
LEASING COMMISSIONS
Leasing Commissions will be computed by multiplying Fixed Rent by the following
percentages, as appropriate, and adding together the results:
1. For the 1st year of any Lease term 5%
2. For the 2nd year 4%
3. For the 3rd year through and including the 5th year 3 1/2%
4. For the 6th year through and including the 10th year 2 1/2%
5. For the 11th year through and including the 20th year 2%
6. For the 21st year and each succeeding year thereafter 1%
C/M: 11764.0009 434116.1
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS, INTERPRETATION............................... 1
1. Definitions............................................... 1
2. Interpretation............................................ 5
ARTICLE 2 APPOINTMENT, OTHER ACTIVITIES............................. 6
1. Appointment............................................... 6
2. No Liability for Past Acts or Omissions................... 6
3. Other Activities.......................................... 6
ARTICLE 3 MANAGEMENT RESPONSIBILITIES............................... 6
1. Submission of Budgets..................................... 6
2. Adherence to Budgets...................................... 7
3. Emergency Expenses; Non-Discretionary Expenses............ 8
4. Operation, Maintenance and Repairs; Payments.............. 8
5. Enforcement of Leases..................................... 9
6. Compliance with Legal Requirements and Contracts.......... 9
7. Books and Records......................................... 10
8. Reports and Statements.................................... 10
9. Annual Audit; Tax Returns................................. 12
10. Employees................................................. 13
11. Tax Assessments and Condemnation.......................... 15
12. Improvements.............................................. 15
13. Consent to Tenant Alterations to Property................. 16
14. Tenant Complaints and Requests............................ 16
15. Advertising; Public Relations............................. 16
16. General Duties............................................ 16
ARTICLE 4 BANK ACCOUNTS, DISBURSEMENTS.............................. 17
1. Operating Account......................................... 17
2. Security Deposit Account.................................. 18
3. Shortfalls; Advances...................................... 18
4. Payments to Owner......................................... 18
ARTICLE 5 MANAGEMENT AUTHORITY, CONTRACTS........................... 18
1. General Authority......................................... 18
2. Execution of Contracts.................................... 19
3. Use of Counsel and Other Professionals.................... 19
4. Limitation of Authority................................... 19
5. Value of Goods, Services and Supplies..................... 20
6. Contracts with Affiliates................................. 20
C/M: 11764.0009 434116.1
Page
ARTICLE 6 COMPENSATION FOR MANAGEMENT SERVICES...................... 20
1. Management Fee............................................ 20
2. Reimbursement............................................. 20
3. Payment of Compensation................................... 21
ARTICLE 7 LEASING RESPONSIBILITIES.................................. 21
1. Leasing Efforts........................................... 21
2. Advertisement............................................. 22
3. Outside Brokers........................................... 22
4. Reporting................................................. 23
5. Leasing Guidelines........................................ 23
6. Authority................................................. 23
7. Conflicts of Interest..................................... 23
ARTICLE 8 COMPENSATION FOR LEASING SERVICES......................... 24
1. Leasing Commission........................................ 24
2. Limitations............................................... 24
3. Renewals and Extensions................................... 24
4. Additional Space.......................................... 25
5. Outside Brokers........................................... 25
6. Timing of Payments........................................ 25
ARTICLE 9 INSURANCE................................................. 26
1. Owner's Insurance......................................... 26
2. Agent's Insurance......................................... 27
3. Agent's Duties in Case of Loss............................ 27
4. Waiver of Rights of Subrogation........................... 28
ARTICLE 10 INDEMNIFICATION, EXCULPATION.................................... 28
1. Owner's Indemnity......................................... 28
2. Agent's Indemnity......................................... 29
3. Waiver of Claims; Environmental Indemnity................. 29
4. Survival.................................................. 30
5. Exculpation............................................... 30
ARTICLE 11 TERM, EXPIRATION, TERMINATION................................... 30
1. Term...................................................... 30
2. Owner's Rights of Termination............................. 31
3. Agent's Rights of Termination............................. 32
4. Obligations Upon Expiration or Termination................ 32
5. Leasing Commissions....................................... 33
-ii-
C/M: 11764.0009 434116.1
Page
ARTICLE 12 GENERAL PROVISIONS.............................................. 34
1. Agent's Office............................................ 34
2. No Discrimination......................................... 34
3. Availability of Funds..................................... 34
4. ERISA..................................................... 34
5. Notices................................................... 35
6. Successors and Assigns.................................... 36
7. Attorneys' Fees........................................... 36
8. Amendment................................................. 36
9. State Law................................................. 36
10. Entire Agreement.......................................... 36
11. No Waiver................................................. 36
12. Further Assurances........................................ 36
13. Effectiveness of Agreement................................ 37
14. No Third-Party Beneficiaries.............................. 37
15. Divisibility.............................................. 37
16. Counterparts.............................................. 37
17. Jury Trial Waiver......................................... 37
18. Brokers................................................... 37
19. Confidentiality; Publicity................................ 37
20. Remedies Cumulative....................................... 38
21. Asset Manager............................................. 38
-iii-
C/M: 11764.0009 434116.1
EXHIBITS
EXHIBIT "A" -- INTERIM BUDGET
EXHIBIT "B" -- LIST OF CURRENT EMPLOYEES THAT WILL BE
RETAINED BY AGENT
EXHIBIT "C" -- TERMS OF EMPLOYMENT OF NON-UNION
EMPLOYEES
EXHIBIT "D" -- ON-SITE DIRECT MANAGEMENT EMPLOYEES
EXHIBIT "E" -- LEASING COMMISSIONS
-iv-
C/M: 11764.0009 434116.1
MANAGEMENT AND LEASING AGREEMENT
between
237 PARK PARTNERS, L.P.,
OWNER
and
TISHMAN SPEYER PROPERTIES, L.P.,
AGENT
PROPERTY:
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
C/M: 11764.0009 434116.1
