Exhibit 10.104
[EXECUTION COPY]
AMENDED AND RESTATED
MANAGEMENT AND LEASING AGREEMENT
THIS AMENDED AND RESTATED MANAGEMENT AND LEASING AGREEMENT (this
"Agreement") made and entered into as of this 27th day of October, 1997, by and
among Five Hundred Boylston West Venture (the "Venture"), a joint venture
subsisting pursuant to that certain Amended and Restated Joint Venture Agreement
dated of even date herewith (the "Venture Agreement") and consisting of Boylston
West 1986 Associates Limited Partnership, a Texas limited partnership ("Hines"),
and DIHC Boylston Associates, a Georgia partnership (the "Company") (Company and
Hines being sometimes referred to separately as a "Venturer" and collectively as
the "Venturers"), and Xxxxx Interests Limited Partnership, a Delaware limited
partnership (the "Manager").
W I T N E S S E T H:
WHEREAS, the Venture and Xxxxxx X. Xxxxx Interests, Ltd. previously
entered into a Management and Leasing Agreement, dated May 29, 1986 (the "Prior
Agreement") wherein Xxxxxx X. Xxxxx Interests, Ltd. was appointed the sole and
exclusive managing and leasing agent for the parcel of real property (and
improvements situated thereon) known as 000 Xxxxxxx Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx (the "Property") and the 25 story building thereon (the
"Building") (the Property and the Building being herein sometimes called the
"Premises") pursuant to the terms and conditions set forth therein.
WHEREAS, as permitted under Section 6.10 of the Prior Agreement, Xxxxxx X.
Xxxxx Interests, Ltd. assigned the prior Agreement to Manager as of January 1,
1990, Manager being an Affiliated Entity (as such term is defined in the Prior
Agreement) of Manager as required therein.
WHEREAS, the Venture and the Manager desire to amend and restate the Prior
Agreement in its entirety on the terms herein set forth.
NOW, THEREFORE, Manager and the Venture hereby amend and restate the Prior
Agreement as follows:
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ARTICLE I
ESTABLISHMENT OF MANAGERIAL RESPONSIBILITY
Section 1.1 Appointment of Manager. The Venture hereby appoints Manager,
and Manager hereby accepts appointment as sole and exclusive manager and leasing
agent of the Premises with the responsibilities and upon the terms and
conditions set forth herein. In order to facilitate Manager's responsibilities
to lease space in the Building, the Venture shall provide Manager with a
prototype lease, rental schedule and program and fit up cost schedule (all of
which shall have been previously approved by all of the Venturers). The
prototype lease and schedules referred to above shall be used by Manager in
negotiating tenant space leases until substitutes therefor are provided to
Manager by the Venture.
ARTICLE II
MANAGEMENT SERVICES TO BE PERFORMED BY MANAGER
Section 2.1 Preparation of Annual Budget. In preliminary draft form not
later than October 1 and in final submission form not later than November 1st of
each calendar year of the term of this Agreement, Manager shall deliver to the
Venture an operating business plan and budget ("Annual Plan Proposal") setting
forth in detail, as reasonably requested by the Venture, on a quarterly basis,
anticipated revenues, expenses and debt service payments respecting the
Premises, on a cash basis, during the Venture's next succeeding calendar year
(or portion thereof), including without limitation the amount of real estate
taxes, assessments, insurance premiums and maintenance and other expenses
relating to the Premises whether for operations or capital improvements (other
than anticipated leasehold improvements for tenants under leases entered into by
or on behalf of Venture) and an annual general operations plan for such calendar
year. The Annual Plan Proposal shall include (i) a detailed marketing plan
(which may be part of the Annual Plan Proposal) which shall specify the range of
suggested minimum acceptable rentals for individual spaces, the concessions for
major and minor tenants, the minimum and maximum acceptable terms (including
renewal options) for individual spaces and estimated "tenant fit-up" costs per
square foot and (ii) a detailed public relations plan which shall specify the
suggested advertising and public relations activities and actions which the
Venture should undertake. The Annual Plan Proposal shall show, among other
things, anticipated and proposed capital expenditures (other than leasehold
improvements for tenants) for the ensuing year and the source of funds in
respect thereto (including the projected time and amount for any required
advances by the Venture) and shall include a rent roll for the Building, taking
into account, without limitation, the general condition of the Premises, rate of
completion of any contemplated repairs to the Premises, the then current
occupancy level, lease expirations, physical condition and rentals charged in
competing office
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and commercial/retail buildings in the area. Each Annual Plan Proposal shall
also include a schedule of job descriptions and requirements for any and all
independent contractors and employees of Manager serving the Premises, a
reasonable estimate of wage rates and all other compensation to be paid such
contractor or employee and shall identify any contractor (or proposed
contractor) serving the Premises who is an Affiliate (as such term is defined in
the Venture Agreement) of Manager; provided, however, that the Annual Plan
Proposal shall not contain any other costs or expenses for which Manager is not
entitled to reimbursement hereunder. Within thirty (30) days after its receipt
of the final submission form of such Annual Plan Proposal, the Venture shall
respond in writing to Manager approving the Annual Plan Proposal with such
changes as the Venture shall desire, and such Annual Plan Proposal with such
changes by the Venture shall become the approved "Annual Budget" for such
succeeding calendar year. Manager may proceed in accordance with the Annual
Budget for such succeeding calendar year only if the same is approved by the
Venture as aforesaid. If for any calendar year an Annual Plan Proposal is not
approved prior to December 1, the Annual Budget for the then current calendar
year shall carry over and continue to apply in regard to operating expenses (but
not for capital expenditures) until approval of the new Annual Budget by the
Venture is obtained. Pending approval of a new Annual Budget, Manager may
continue all operations (but not capital expenditures) under the then effective
Annual Budget (as though the current Annual Budget had been approved as the
Annual Budget for the next calendar year) . Manager shall comply, except as
hereinafter provided, in all respects with each approved Annual Budget in the
performance of its duties hereunder and shall not, except as hereinafter
provided, during the period covered by such Annual Budget incur any expense in
the management, operation or maintenance of the Property not provided for in
such Annual Budget.
The budgets included in the Annual Budget shall distinguish between (i)
costs and expenses of management, maintenance and operations which are not
"capital expenditures" ("non-capital expenses") and (ii) costs and expenses of
management, maintenance and operation which are "capital" in nature (the
"capital expenses"); and further, the Annual Budget (in the marketing plan)
shall include the information on leasing guidelines provided for above, which
leasing guidelines shall include, without limitation, the anticipated costs to
be incurred by the Venture (on a per square foot basis) for new leases entered
into pursuant to the leasing guidelines provided for herein. The budgets for
capital expenses and non-capital expenses may each include a category or line
item for "contingency" and the amount allocated to contingency in each such
portion of the budgets in an approved Annual Budget may be reallocated (and
accordingly expended) for expenses in other line items within each such portion
of the budgets if expenses for a line item exceed the amount otherwise allocated
to such item. Without the Venture's consent, Manager shall not incur any expense
for any line item capital expense which exceeds the amount (including
contingency) budgeted for such capital expense; except that Manager shall have
the right, without the prior Approval of the Venturers, to make annual capital
expenditures of up to $50,000 for any one item and up to $200,000 per annum in
the
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aggregate (the "Allowance Amounts"), for items not contemplated in, or in excess
of the amounts reserved for certain line items in, the Annual Budget. The
Allowance Amounts shall be adjusted (up or down) to take into account changes in
the Consumer Price Index All Urban Consumers for the Massachusetts Area ("CPI")
as published by the United States Department of Labor for calendar year 1997 and
the calendar year immediately prior to the calendar year in question. The
adjusted Allowance Amounts for each such calendar year shall be determined by
multiplying the original Allowance Amounts by a fraction, the numerator of which
is the CPI for the calendar year immediately prior to the calendar year in
question and the denominator of which is the CPI for calendar year 1997. Without
the Venture's consent, Manager shall not incur any expense for non-capital
expenses which would cause the aggregate amounts expended for non-capital
expenses to exceed the budgeted amount (including contingency): by more than ten
(10%) percent, provided, however, that Manager may freely pay all real estate
taxes, utilities serving the Premises, debt service and other amounts due on
borrowings entered into by the Venture and insurance premiums (for insurance
approved by the Venture), may incur obligations to perform tenant construction
pursuant to the terms of leases entered into in accordance with this Agreement
and may incur expenses to provide additional services to tenants, if such
expenses are to be promptly, expressly and directly reimbursed by tenants. In
the event that Manager shall at any time determine that an expenditure is
required that will not conform to the foregoing guidelines, Manager shall notify
the Venture in the manner described in Article IV hereof by submitting a
Property Manager Recommendation with respect to such expense. Notwithstanding
the foregoing, Manager may make all expenditures necessary, whether or not
within the guidelines set forth hereinabove or provided for in the Annual
Budget, for any expenditure of an emergency nature as provided in Section 2.4
hereof. At any time that Manager determines that there is not sufficient income
to cover current operating expenses, it shall promptly notify the Venture.
Manager shall further provide such other financial information respecting actual
operations of the Premises as is reasonably requested by the Venture. No such
statement shall be deemed to be an official Annual Budget until the same shall
be approved by the Venture as hereinabove provided.
Section 2.2 Independent Contractors. Pursuant to the Annual Budget,
Manager shall investigate, contract with, pay, supervise and discharge any
personnel required for the routine maintenance and operation of the Premises on
a day-to-day basis, including architects, engineers and others. Such personnel
shall in every instance be independent contractors or employees of Manager and
shall not be employees of the Venture. After any major personnel (e.g. building
superintendent, engineer, architect, attorneys, etc.) have been engaged to
perform personal or professional services, Manager shall give the Venture notice
thereof and the Venture may require Manager to terminate the contracts of such
persons serving the Premises whom the Venture, in its sole discretion, deems
unsatisfactory (provided that the Venture shall be responsible for any such
termination if the same is actionable by such terminated personnel). Such
employees who handle or who are responsible for funds belonging to the Venture
shall be insured by fidelity insurance in an amount and with a
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company approved from time to time by the Venture as set forth in Section 7.4
hereof. Except as provided in Section 7.3 below, all salaries, wages and other
compensation of personnel contracted with by Manager hereunder, shall be
expenses of the Venture which shall be paid by Manager from funds of the Venture
or reimbursed to Manager by the Venture pursuant to the terms hereof. Manager
understands and agrees that its own relationship to the Venture is that of
independent contractor and that it will not represent to anyone that its
relationship to the Venture is other than that of independent contractor.
Section 2.3 Service Contracts. Manager shall make, when necessary, in the
name of the Venture and Venture shall execute the same at the request of
Manager, contracts for water, electricity, gas, fuel, oil, telephone, vermin,
elevator, extermination, trash removal, janitorial service, landscaping,
security service and other necessary services, or such of them as Manager shall
deem reasonably advisable in accordance with the Annual Budget provided each
such contract shall be cancelable, at the Venture's discretion, at the end of
one year on no more than thirty (30) days notice without penalty, except for the
elevator service contract which shall be cancelable, at the Venture's
discretion, at the end of five years without penalty. Manager shall also place
orders in the name of the Venture for such equipment, tools, appliances,
materials and supplies as are necessary properly to maintain the Premises,
subject to the limitations of the current Annual Budget approved by the Venture.
Section 2.4 Maintenance and Repair of Premises. Manager shall use
reasonable efforts to cause the Building, parking garage, appurtenances and
grounds of the Property to be maintained in accordance with standards acceptable
to the Venture, including within such maintenance, without limitation thereof,
supervision of the installation and removal of tenant improvements, interior and
exterior cleaning, painting and decorating (including lobby decorations),
plumbing, carpentry, and such other normal maintenance and repair work as may be
desirable, subject to limitations of the current Annual Budget approved by the
Venture and any other limitations imposed by the Venture in addition to those
contained herein. For any one item of repair or replacement, the expense or cost
incurred shall not exceed the amount allocated thereto in the current Annual
Budget (subject to the guidelines set forth in Section 2.1 hereof) excepting,
however, that emergency repairs immediately necessary to secure the preservation
and safety of the Premises or to avoid the suspension of any service to the
Premises or to avoid danger to life or property may be made by Manager without
such consent or authority contained in the current Annual Budget provided
Manager shall first make reasonable attempts to contact the Venture.
Notwithstanding such authority as to emergency repairs, it is understood and
agreed that Manager will confer as soon as possible with the Venture regarding
every such expenditure. Manager shall assure that any contractor performing work
on the Premises maintains insurance satisfactory to the Venture and any
mortgagee of the Premises, including but not limited to workmen's compensation
insurance, employees' liability insurance and insurance against liability for
injury to persons and property arising out of all of contractors' operations,
any subcontractors' operations, and the use of
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owned, non-owned or hired equipment, including automotive equipment in the
pursuit of all such operations.
Section 2.5 Insurance. Manager shall supervise and assist the Venture in
procuring and maintaining insurance for the Premises, with companies and through
brokers agreed upon by the Venture, of such kind and amounts as the Venture
shall from time to time be required to carry pursuant to the provisions of
applicable agreements with third parties, and of such other kind and amounts as
required in the Venture Agreement or as the Manager shall from time to time be
directed by the Venture.
Section 2.6 Collection of Moneys. Manager shall use all reasonable efforts
to collect all rent and other charges due from tenants, licensees,
concessionaires and any others in consequence of the authorized operation of
facilities in the Premises and otherwise due the Venture with respect to the
Premises. The Venture authorizes Manager to request, demand, collect, receive
and receipt for all such rent and other charges. With the prior written consent
of the Venture, Manager may institute legal proceedings and engage legal counsel
(approved by the Venture) in the name of the Venture, for the collection of
overdue rents and other charges and for the dispossession of tenants and other
persons from the Premises. The Venture will be informed as soon as possible
respecting any legal action which the Manager proposes to initiate for and on
behalf of the Venture. Any expense incurred in connection therewith shall be
deemed an operating expense of the Premises. All moneys collected by the Venture
shall be forthwith deposited in the Depository Account described in Section 7.2
below.
Section 2.7 Manager Disbursements. Except as otherwise directed by the
Venture, Manager shall from the funds on deposit in the Operating Account
described in Section 7.2 below, cause to be disbursed the amounts necessary to
pay regularly and punctually amounts due and payable as operating expenses of
the Premises authorized to be incurred under the terms of this Agreement,
including without limitation, payment of sums due on any mortgage loan affecting
the Premises, payment prior to delinquency and prior to the addition thereon of
interest or penalties of all real property taxes and assessments and other taxes
levied or assessed against the Premises, all rents, insurance premiums and other
impositions applicable to the Premises, the administration fee and the Manager's
fee provided for in Article VI. After disbursement as herein specified, any
balance remaining shall be disbursed or transferred as generally or specifically
directed from time to time by Venture. Manager shall have no obligation to pay
any of the aforementioned expenses or costs unless there are sufficient funds in
the Operating Account described in Section 7.2 below or the funds shall be
supplied to Manager by the Venture. In the event that at any time there are
insufficient funds on hand to meet such operating expenses, Manager shall
promptly notify the Venture, which shall supply such funds, and if Manager shall
have advanced its own funds to meet such expenses, the Venture shall promptly
reimburse Manager therefor. All checks to Manager for
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reimbursement of expenses and for the Management Fee (as defined below) shall be
co-signed by a Venturer of the Venture.
Section 2.8 Discounts. Manager shall (unless in its reasonable judgment
such discounts, commissions or rebates are not advisable) secure for and credit
to the Venture any discounts, commissions or rebates obtainable as a result of
any purchase of goods or services or as a result of other activities undertaken
pursuant to this Agreement. Should Manager perform any services to tenants which
are not required in their leases and for which a separate charge is made, then
all such separate charges shall be retained in the Operating Account described
in Section 7.2 for the account of the Venture, and, to the extent required, used
to pay for the services provided.
Section 2.9 Miscellaneous Duties of Manager.
a. Books and Records and Monthly Reports. Manager shall keep all books of
account and other records required by the Venture, keep vouchers, statements,
receipted bills and invoices and all other records in such form as may be
approved by the Venture, covering all collection, disbursements, and other data
in connection with the Premises; permit the Venture, or any person designated by
any Venturer, at any reasonable time, to audit the books, records and accounts
of Manager relating to the Premises, and Manager will exhibit such books,
records and accounts to any person designated by any Venturer for that purpose,
which accounts and records relating to the Premises, including all
correspondence and leases, shall be the property of the Venture and, upon any
termination of the appointment of Manager, shall be surrendered to the Venture
without charge therefor. On or before the 20th day of each month during the term
of this Agreement, Manager shall render to the Venture a detailed written report
(hereinafter called the "Monthly Report") covering the operations for the
preceding full calendar month. The Monthly Reports shall include designation of
all receipts and disbursements during such period (and shall set forth an
accurate list of accounts receivable and accounts payable) and moneys retained
in the Operating Account as of the last day of the preceding calendar month.
Such report shall include a copy or facsimile of all notices received from any
mortgagee with respect to payments made to such mortgagee in such preceding
calendar month, and a transmittal memorandum highlighting the past month's
operation.
b. Annual Report. Within forty-five (45) days after the end of each
calendar year, Manager shall deliver to the Venture a Profit and Loss Statement,
a Balance Sheet and a Statement of Change in Financial Position of the Venture,
showing the results of operations of the Premises for that calendar year, all
prepared in accordance with accepted accounting principles consistently applied.
Manager shall also furnish the Venture, within said forty-five (45) day period,
with a detailed list of all accounts receivable and accounts payable as of the
end of that calendar year and with such other information as the Venture shall
reasonably request.
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c. Tenant Complaints. Manager shall serve as liaison between the Venture
and tenants and maintain businesslike relations with tenants, whose service
requests shall be received, logged and considered in systematic fashion in order
to show the action taken with respect to each. Complaints of a serious nature
(i.e. involving claims in excess of $25,000) shall, after thorough
investigation, be reported to the Venture with appropriate recommendations.
Manager shall use its reasonable efforts to secure full compliance by the
tenants of the Premises with the terms and conditions of their respective
leases.
d. Returns Required by Law. Except when same are legally required to be
filed by the Venture, Manager shall execute and file punctually, when due, all
forms, reports, and returns required by law relating to the employment of
personnel and the operation of the Premises.
e. Compliance with Legal Requirements. Manager shall use its reasonable
efforts to ensure that the actions taken by Manager for or on behalf of the
Venture comply with the Governmental Documents (as defined in the Venture
Agreement) and with any and all orders or requirements affecting the Premises by
any federal, state, county, municipal other authority having jurisdiction
thereover, and orders of the Board of Fire Underwriters or other similar bodies,
subject to the same limitations contained in Section 2.4 hereof in connection
with the making of repairs and alterations. Manager, however, shall not take any
such action as long as: (i) the Venture is contesting any such order or
requirement provided that the Venturer has a legal right to contest such order
or requirement and Manager will incur no penalty as a result of the Venture
contesting any such order or requirement and (ii) the Venture requests Manager
not to take such action. Manager shall promptly, and in no event later than the
close of the next business day following its receipt, give written notice to the
Venture of any such order or notice of requirements.
f. Claims for Tax Abatements and Eminent Domain. When requested by the
Venture from time to time, Manager shall, without charge or reimbursement,
except for out-of-pocket expenses, render advice and assistance to the Venture
in the negotiation and prosecution of all claims for abatement of property and
other taxes affecting the Premises and for awards for taking by eminent domain
affecting the Premises.
g. Supervision of Repairs and Alterations. Manager shall use reasonable
efforts to supervise the performance of all matters coming within the terms of
this Agreement, including direct observation, inspection and supervision of all
repairs, decorations and alterations during the progress thereof and shall make
final inspection of the completed work and approve bills for payment; provided,
however, Manager may, in its reasonable discretion and unless otherwise directed
by the Venture, withhold payments and contest in good faith work done on the
Premises, provided that such contest is not in violation of any mortgage
encumbering the Premises or the Governmental Documents. Manager shall use
reasonable
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efforts obtain the necessary receipts, releases, waivers, discharges and
assurances to keep the Premises free from mechanics' and materialmen's liens and
other claims.
h. Management of Premises. Manager shall, generally, take all actions
reasonably necessary to protect and preserve the Premises and to manage and
operate the Premises in an efficient first-class manner and shall, at all times,
maintain an organization sufficient to enable it to perform all its obligations
and functions under this Agreement.
i. Tenant Improvements. Manager shall supervise tenant finishing work,
and alterations when new tenants take occupancy in the Building and shall
supervise and inspect modifications and alterations to existing tenant space
when requested for and paid for by an existing tenant.
j. Settlement of Claims; Cooperation. Should any claims, demands, suits
or other legal proceedings be made or instituted by any third party against the
Venture or any Venturer (as a partner in the Venture) which arise out of any
matter relating to the Premises or this Agreement or the Manager's performance
hereunder the Manager shall have the authority to adjust, settle or compromise
any such claim, demand, suit or judgment in an amount not in excess of $25,000
and shall at all times keep the Venture informed with respect to the status of
such claim, demand, suit or judgment. With respect to claims, demands, suits or
judgments for amounts in excess of $25,000 at the request of the Venture, the
Manager shall give the Venture all pertinent information and reasonable
assistance in the defense or disposition thereof. The obligation of Manager set
forth herein shall survive the termination of this Agreement.
(k) Compliance with REA. Manager shall use its reasonable efforts to
ensure that the actions taken by Manager for or on behalf of the Venture comply
with the REA (as defined in the Venture Agreement) and shall coordinate its
activities with the owner and/or manager of the Eastern Component (as defined in
the Venture Agreement) to the extent contemplated or required in the REA.
ARTICLE III
LEASING SERVICES TO BE PERFORMED BY MANAGER
Section 3.1 Locate Tenants. Manager shall use reasonable efforts to
locate suitable tenants and negotiate acceptable leases for the Building,
subject to the limitations hereinafter set forth. Manager's duties as to its
leasing services shall be those customarily performed by owners of comparable
buildings. Manager is authorized, without the approval of the Venture, to locate
tenants and negotiate leases (on the standard form of lease approved by the
Venture
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with no material changes thereto) for (i) a lease of retail space in the
Building up to 2,500 rentable square feet and (ii) a lease of office space in
the Building up to 10,000 rentable square feet (for purposes of the foregoing,
multiple leases to a single tenant shall be aggregated for purposes of
determining the square footage of any particular lease with such tenant)
provided such leases are in accordance with the Annual Budget approved by the
Venture. All other leases shall be subject to the prior approval of the Venture.
All leases proposed by Manager, and, if required under the foregoing sentence
approved by the Venture, shall be executed by the Venture. Manager shall not,
for any reason, have the authority to execute leases on behalf of the Venture;
the Venture acknowledges however, if the Venture does not execute a lease
submitted by the Manager that does not require the approval of the Venture,
Hines (in its capacity as a Managing Partner of the Venture) may execute such
lease on behalf of the Venture without the consent of Company as provided in
Section 3.01(a) of the Venture Agreement.
Section 3.2 Consulting. Manager shall, upon reasonable request(s) by
the Venture, act as a consultant to the Venture and provide the Venture, as and
when deemed necessary by the Venture, with the benefit of Manager's experience
as to the planning and leasing of the tenant space to be leased. Manager shall,
as to the tenant space, provide, for the Venture's approval, (i) an overall
marketing and leasing plan as set forth in Section 2.1, (ii) an anticipated rent
roll, including minimum rents, and (iii) the proposed tenant assessments and
other charges.
Section 3.3 Executing Leases. Upon obtaining commitments from
prospective tenants to lease all or a portion of the tenant space, and approval
of the terms and conditions of said commitments by the Venture if required
hereunder, Manager shall submit to each such prospective tenant a lease in the
form approved by the Venture, containing the terms of said commitment approved
by the Venture if required hereunder. Leases requiring the approval of the
Venture shall be submitted to the Venture in a Property Manager Recommendation
in the manner described in Article IV hereof.
Section 3.4 Advertising. Manager shall be responsible for the
promotion and advertising of available tenant space in the Building subject to
the prior approval of the Venture as to methods of advertising and in accordance
with the public relations plan referred to in Section 2.1.
Section 3.5 Reports. At reasonable times and in any event not less
than once each ninety (90) day period, and at such other times as the Venture
may reasonably request, Manager shall inform the Venture in writing as to the
progress of leasing operations and as to circumstances which might from time to
time require decisions by the Venture regarding such leasing operations. Each of
Manager's periodic reports shall include, but not necessarily be limited to, the
name and address of each prospect to whom space in the Building was offered
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by Manager during the period covered by such report, the date of each such
offering and a copy of any written submission made to any such prospect, the
status of negotiations of offers received by Manager in connection with such
submissions, and such additional data as shall be reasonably required by the
Venture.
Section 3.6 Brokers. Manager shall have the right to retain, at the
expense of the Venture, independent non-affiliated brokers or subagents
("Brokers") in connection with the leasing of any tenant space, provided that,
to the extent the retention of such broker is not contemplated in the Annual
Budget approved by the Venture, the Venture shall have approved in advance the
engagement of such Broker and brokerage fee and commission payable to such
Broker.
ARTICLE IV
PROPERTY MANAGER RECOMMENDATIONS
Section 4.1 Property Manager Recommendations. In the event any action
proposed to be taken by Manager or any other matter (including, without
limitation, the Annual Budget) in respect of the operation, maintenance, repair,
improvement or leasing of the Premises shall require the approval of the Venture
under the terms of this Agreement, Manager shall submit to the Venture a
recommendation with respect to such action or matter (a "Property Manager
Recommendation"). To the extent Company or the Venture intends to enter into a
new lease, adopt an Annual Budget or take action on any other matter involving
the leasing, management, operation, maintenance or improvement of the Premises
that is not the subject of a Property Manager Recommendation, Company shall give
written notice to Manager, together with a reasonably detailed explanation
thereof, at least ten (10) days prior to entering into such lease, adopting such
Annual Budget or taking such other action, as the case may be, to provide
Manager the opportunity to submit a Property Manager Recommendation with respect
thereto. Manager shall, at the expense of the Venture, furnish or where
appropriate make available to Venture, such documents and information as Venture
shall reasonably request in order to enable Venture to evaluate such
recommendation. The failure of Venture to approve or disapprove any Property
Manager Recommendation within ten (10) days after receipt by Venture of such
Property Manager Recommendation together with all additional information
reasonably requested by Venture pertaining thereto shall be deemed the approval
by Venture of such Property Manager Recommendation and Manager shall be entitled
to implement the same, provided, however, the Property Manager Recommendation
shall state in capitalized letters that: "THE FAILURE TO RESPOND TO THIS
PROPERTY MANAGER RECOMMENDATION WITHIN 10 DAYS AFTER RECEIPT OF THIS NOTICE AND
ANY REASONABLY REQUESTED ADDITIONAL INFORMATION PERTAINING HERETO SHALL BE
DEEMED YOUR APPROVAL TO SUCH PROPERTY
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MANAGER RECOMMENDATION." If the Venture fails to approve or disapproves such
Property Manager Recommendation after consultation and discussion with Manager,
then the resolution of such matters may be submitted by Venture or Manager to
the "Venture Operations Arbitration Process" for resolution.
The term "Venture Operations Arbitration Process" shall mean the
process for resolution of any dispute between the Company and the Manager in
connection with a Property Manager Recommendation. Either of the Manager or the
Company may invoke this arbitration process by the giving of written notice to
the other, which notice shall state that the invoking party believes an impasse
exists as to a Property Manager Recommendation.
If Manager or Company invokes the arbitration process, then, within
five (5) days after the non-invoking party receives notice from the invoking
party, Manager and Company shall each place in separate sealed envelopes its
final good faith proposal as to the Property Manager Recommendation and shall
open and exchange their final proposals in each other's presence (the "Final
Proposals"). If Manager and Company cannot then agree on the Property Manager
Recommendation within five (5) days thereafter, the matter shall be determined
in accordance with the rules of the American Arbitration Association, except as
modified by this provision. If Manager or Company fails to prepare its Final
Proposal or to cooperate with the other party to open and exchange the Final
Proposals of the parties, and if such failure shall continue for a period of
five (5) days after the date the Final Proposals were to be opened and
exchanged, the Final Proposal of the non-failing party shall constitute the
determination pursuant to this process.
Unless Manager and Company can agree upon a single arbitrator prior to
the time they are required to designate their party-arbitrators, there shall be
three arbitrators (the "Panel"), each of whom shall have significant experience
in dealing with matters similar to the matter in dispute with respect to
sizeable commercial properties in the Boston metropolitan area and none of whom
shall have any current or prior connection or affiliation with either of the
Venturers.
If Manager and Company cannot agree on a single arbitrator, the
following procedure shall be used for the selection of the Panel. Manager and
Company shall each specify by notice to the other on or prior to the fifth (5th)
day after the Final Proposals were exchanged the name and address of the person
designated to act as party-arbitrator on its behalf. The party-arbitrators so
chosen shall meet within five (5) days after their appointment and select a
third arbitrator. If Manager or Company fails to notify the other of the
appointment of its party-arbitrator, as aforesaid, within or by the time above
specified, then the Final Proposal of the party who timely selected a
party-arbitrator shall constitute the determination pursuant to this process.
13
If, within five (5) days after the party-arbitrators are appointed,
the said two party-arbitrators are unable to agree upon the appointment of the
third arbitrator, then either party, on behalf of both, may request the American
Arbitration Association in Boston, Massachusetts to appoint the third arbitrator
in accordance with its rules. In the event of the failure, refusal or inability
of any arbitrator to act, a new arbitrator shall be appointed in his stead,
which appointment shall be made in the same manner as hereinabove provided for
the appointment of such arbitrator so failing, refusing or being unable to act.
Within five (5) days after the selection of the single arbitrator or,
if Manager and Company cannot agree on a single arbitrator, within one business
day after the selection of the Panel, Company and Manager shall submit a written
statement to the arbitrator or Panel specifying the reasons their Final Proposal
as to the Property Manager Recommendation should be selected. The arbitrator or
Panel shall make its decision within five (5) days after such submission. The
arbitrator or Panel shall select either the Manager's or Company's Final
Proposal, whichever in the arbitrator's or Panels's judgment represents the most
appropriate recommendation for preserving and enhancing the long-term value of
the Premises. The Panel shall reach its decision by majority vote. The
arbitrator or the Panel shall communicate its decision by written notice to the
Manager and Company.
Such determination shall be final, binding and conclusive upon both
the Company and the Manager and shall be non-appealable and enforceable in any
court having jurisdiction. All hearings and proceedings before the arbitrator or
the Panel shall be held in Boston, Massachusetts.
If a single arbitrator is selected, each party shall share such
arbitrator's fees and expenses equally. If a Panel is selected, each party shall
pay the fees and expenses of its party- arbitrator, and the fees and expenses of
the third arbitrator shall be borne equally by the parties. Notwithstanding the
foregoing, the arbitrator or the Panel may conclude that one of the parties
acted in bad faith, in which event such party shall pay 100% of the fees and
expenses of the arbitrator or the Panel, as the case may be.
ARTICLE V
TERM
Section 5.1 Term. The term of this Agreement commenced on July 25,
1988 and shall expire on the earlier to occur of (i) the termination of the
Venture in accordance with the Venture Agreement and (ii) May 29, 2061, unless
this Agreement is sooner terminated pursuant to Section 5.2 hereof or otherwise.
Upon the expiration or earlier termination of this Agreement, Manager shall: (1)
surrender and deliver to the Venture all rents and income of
14
the Premises including the Depository Account and Operating Account referred to
in Section 7.2 hereof; (2) deliver to the Venture as received any monies
collected or received by Manager after termination hereof; (3) deliver to the
Venture all books, records, materials, supplies, keys, contracts and such other
documents and statements relating to the Premises; (4) assign such existing
contracts relating to the operation and maintenance of the Premises as the
Venture shall require; and (5) generally cooperate with the Venture in
accordance with Section 2.9(j).
Section 5.2 Termination for Cause. During the term of this Agreement,
this Agreement shall be terminated for cause, as "cause" is hereafter defined,
upon five (5) days' written notice to Manager; provided, however, if Manager
provides the Venture notice that it disagrees that "cause" has occurred, this
Agreement shall not be terminated until such determination is made pursuant to,
and in accordance with, the arbitration procedures set forth in Article VIII of
this Agreement and, during the pendency of such arbitration, the Venture and
Manager shall remain obligated to continue to perform their respective
obligations under this Agreement. "Cause" for termination by the Venture shall
mean the continuance, for more than thirty (30) days (or, if such curable event
cannot be cured in such period of time, then such additional period of time as
is necessary to cure same, provided Manager prosecutes to completion the cure of
same) after delivery of written notice by the Venture (or any Venturer except
Hines) to Manager of one or more of the following events:
k. A material default shall be made in the performance or observance
by Manager of any material covenant, condition or term in this Agreement;
l. Manager shall engage in conduct under this Agreement which
constitutes fraud;
m. Manager shall institute proceedings to be adjudicated a voluntary
bankrupt, or shall commence a case under the bankruptcy code, or shall file a
petition or answer or consent seeking reorganization, readjustment, arrangement,
composition or similar relief under the federal bankruptcy laws, or any other
similar applicable federal or state law, or shall consent to or fail reasonably
to oppose any such proceeding, or shall consent to the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of it or of a
substantial part of its property, or shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or corporate action shall be taken by Manager in
furtherance of any of the aforesaid purposes;
n. A decree or order by a court of competent jurisdiction shall have
been entered adjudging Manager bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, readjustment, arrangement, composition
or similar relief for Manager under the federal bankruptcy laws, or any other
similar applicable federal or state law, and
15
such decree or order shall have continued undischarged or unstayed for a period
of ninety (90) days; or a decree or order of a court having jurisdiction for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of Manager or a substantial part of its property, or the winding up
or liquidation of its affairs, shall have been entered, and such decree or order
shall have remained in force, undischarged and unstayed for a period of ninety
(90) days;
o. The Venturer in the Venture that is currently Hines (the "Hines
Venturer") shall no longer be Controlled by a Person Controlled by a member of
the Hines Control Group (as defined below); provided, however, if such failure
occurs solely as a result of the election by the Hines Venturer to put its
Venture Interest to Company or its designee pursuant to the provisions of
Subsection 6.02(d) of the Venture Agreement, this Agreement may only be
terminated pursuant to this clause (e) if:
(1) Company provides written notice to Manager of such termination
at least six (6) months prior to the Earliest Termination Date,
or
(2) Company provides written notice to Manager at any time after
the Earliest Termination Date, in which case, such termination
will be effective six (6) months following receipt by Manager
of such notice;
p. The Manager shall no longer be Controlled by a member of the Hines
Control Group;
x. Xxxxx shall become a Defaulting Venturer under the Venture
Agreement and shall remain a Defaulting Venturer beyond the expiration of any
applicable cure period; or
(h) The Premises shall be sold by the Venture to a third party or to
one of the Venturers or in the event of the destruction or condemnation of all
or substantially all of the Building and the same is not rebuilt.
As used in this Section 5.2, the term "Earliest Termination Date" means the date
that is the later to occur of (i) November 1, 2007 or (ii) the fifth (5th)
anniversary of the date on which the consummation of the transfer by the Hines
Venturer to Company pursuant to the provisions of subsection 6.02(d) of the
Venture Agreement occurs; the terms "Controlled or Control", "Hines Control
Group", "Venture Interest", "Xxxxx Management Group", "Hines Family" and
"Person" shall have the meanings ascribed to such terms in the Venture
Agreement.
Section 5.3 Payment to Manager in Event of Termination. In the event
this Agreement is terminated under Section 5.2 hereof, Manager shall be entitled
only to that portion of the Management Fee earned pursuant to Article VI of this
Agreement through the
16
date of the notice specifying the cause, in full satisfaction of the Venture's
obligation to Manager for fees under this Agreement; provided, however, that
after being notified in writing of an event for which this Agreement may be
terminated for "cause" (unless Manager notifies the Venture that it disagrees
that "cause" has occurred, in which case, only after "cause" is determined by
arbitration to have occurred), the Management Fee payable to Manager shall be
withheld until such time as such cause" is cured prior to the termination
hereof. In the event this Agreement is so terminated, the Venture shall assume
the obligations under contracts entered into by Manager for the benefit or on
behalf of the Venture pursuant to its authority to do so under this Agreement.
ARTICLE VI
COMPENSATION
During the term of this Agreement, the Venture shall pay Manager an
annual management fee (the "Management Fee") equal to three percent (3%) of the
"gross rental receipts" (as hereinafter defined) actually received by the
Venture, or by Manager on behalf of the Venture, from the rental operations of
the Building. The term "gross rental receipts" as used herein shall mean the
gross amount of payments to the Venture made as rent, fees, charges,
reimbursement or otherwise for the use or occupancy of the Building, or any
portion thereof, but gross rental receipts shall not include (1) free rent
concessions granted by the Venture to tenants, (2) bills rendered to tenants for
improvements to the tenant space in the Building to the extent of Manager's
actual expenditures for such improvements, (3) security deposits delivered by
tenants to the Venture prior to the forfeiture of such deposits, (4) advance
rentals until such time as they are earned by the Venture, (5) any insurance
loss proceeds, condemnation awards or any proceeds from the sale, exchange,
financing or refinancing of the Premises and (6) any payments, fees and other
charges received by the Venture from the owner of the Eastern Component adjacent
to the Premises under the REA Agreement. Notwithstanding the foregoing, to the
extent a Management Fee is recovered from the tenants with respect to the items
set forth in (1) through (6) above, such items shall constitute "gross
receipts".
The annual Management Fee shall be payable on an estimated basis in monthly
installments on the first day of each month as an advance in respect of the fee
payable to Manager in respect of the immediately preceding calendar month. The
Management Fee, however, shall be determined and reconciled on an annual basis
with appropriate adjustments between Manager and Venture with respect thereto
following delivery of audited financial statements with respect to each calendar
year.
17
ARTICLE VII
MISCELLANEOUS
Section 7.1 Use and Maintenance of Premises. Manager agrees to use
reasonable efforts not to permit the use of the Premises for any purpose which
might void any policy of insurance held by the Venture or Manager or render any
loss thereunder uncollectible, or which would be in violation of any law,
ordinance, by-law or governmental or other restrictions.
Section 7.2 Separation of the Venture's Moneys. The Venture shall
establish and maintain a bank account at a Boston, Massachusetts bank of the
Venture's choosing for the deposit of all revenues arising out of the Premises
(the "Depository Account"). Manager shall promptly deposit all revenues, as same
are collected, in the Depository Account and only the authorized representatives
of the Venture shall be able to withdraw funds from the Depository Account.
Manager shall establish and maintain an additional bank account at a Boston,
Massachusetts bank of the Venture's choosing, for the purpose of maintaining
those funds necessary to the operation of the Premises (the "Operating Account")
. The Venture shall from time to time, upon the advice of Manager, deposit into
the Operating Account, sufficient funds to cover the cost and expense of the
maintenance and operation of the Premises. Funds may be withdrawn from the
Operating Account upon the signature of duly authorized representatives of
Manager or any Venturer of the Venture.
Section 7.3 Expense of Manager. The Venture shall reimburse Manager
for direct expenses of Manager incurred on account of the Premises for the
payment of any proper obligation or necessary expense or Broker's commission
connected with the leasing, maintenance and operation of the Premises including
the wages, salary, benefits and other compensation of any full-time or part-time
property management and/or leasing personnel assigned to the Premises, the costs
(including, but not limited to rent, office equipment and office supplies) of
any management and leasing office approved by the Venture (the approximate
square footage of such office being 4000 rentable square feet, which amount the
Venture hereby approves) and reasonable training, travel and entertainment
expenses of such personnel as approved in the Annual Budget; provided, however,
the Venture shall not be obligated to reimburse Manager for any overhead
expenses of Manager or for any salaries of any executives or supervisory
personnel of Manager who do not provide a direct benefit to the Premises (except
the allocable cost of an off-site senior property manager and a regional chief
engineer, bookkeeping, accounting and financial management services, information
systems and technology support, payroll and human resources services, risk
management services (both insurance and engineering related), internal audits of
financial, operational, or engineering functions all of which the Venture agrees
do provide a direct benefit to the Premises and for which Manager is
appropriately entitled to reimbursement), provided that the cost to provide
18
such off-site services is equal to or less than the cost that a third party
would charge for providing same). All payments to be made by Manager hereunder
shall be made by check drawn on the Operating Account except xxxxx cash items
not exceeding $1,000.00, which may be paid from a fund to be maintained by
Manager for such purposes. Manager shall not be obligated to make any advance to
or for the account of the Venture or to pay any sums, except out of funds held
in the Operating Account, nor shall Manager be obligated to incur any liability
or obligation for the account of the Venture without assurance that the
necessary funds for the discharge thereof will be provided; and, if Manager
shall advance its own funds to meet expenses of the Venture in furtherance of
its duties hereunder, the Venture shall promptly reimburse Manager therefor.
Section 7.4 Bond. Manager shall maintain, at the expense of the
Venture, comprehensive dishonesty, disappearance and destruction insurance with
an insurer satisfactory to the Venture, in such amount and form approved by the
Venture, providing insurance with regard to the faithful accounting for funds of
the Venture collected or received by Manager.
Section 7.5 Notices. All notices, demands, requests or other similar
communications required or permitted to be sent to the respective parties
hereunder shall be deemed to have been properly given or served by (i)
delivering the same personally (including overnight courier), or (ii)
transmitting the same by telecopier, or (iii) depositing the same in the United
States mail, addressed to the respective parties postpaid and registered or
certified with return receipt requested at the following addresses:
To Venture or Hines: Xxxxxxxx Xxxx 0000 Associates Limited
Partnership
c/o Hines Interests Limited Partnership
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx
Telecopier: 000-000-0000
and to:
Xxxxx Interests Limited Partnership
East Coast Regional Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
To Venture or Company: DIHC Boylston Associates
19
c/o Cornerstone Properties Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxx
Xxxxxx X. Xxxxxx
Telecopier: 000-000-0000
To Manager: Xxxxx Interests Limited Partnership
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxx
Telecopier: 000-000-0000
With a copy to:
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx, Esq.
Telecopier: 000-000-0000
All notices, demands, requests or other similar communications shall be
effective upon personal delivery, receipt or upon being deposited in the United
States mail. However, if the notice, demand, request or other similar
communication is delivered by US mail, the time period in which a response to
any such notice must be given shall commence to run from the date of receipt on
the return receipt of the notice, demand request or other similar communication
by the addressee thereof. Rejection or other refusal to accept or the inability
to deliver because of changed address of which no notice was given shall be
deemed to be receipt of the notice, demand request or other similar
communication sent. In the event that registered or certified mail is not being
accepted for prompt delivery, notices may then be served by personal service
upon any officer, director or partner of any party. By giving to the other
parties at least 30 days written notice thereof, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
and each shall have the right to specify as its address any other address at
which it has a place of business or up to two (2) other addresses to which it
wishes copies of any notice sent.
Section 7.6 Entire Agreement, This Agreement constitutes the entire
agreement between the Venture and Manager relating in any manner to the subject
matter of this
20
Agreement. No prior agreement or understanding pertaining to the same (including
without limitation, the Prior Agreement) shall be valid or of any force or
effect (provided, however, that the foregoing shall not release the parties to
the Prior Agreement for any liability or obligation thereunder relating to
periods occurring prior to the date hereof), and the covenants and agreements
herein cannot be altered, changed or supplemented except in writing signed by
the Venture and Manager.
Section 7.7 Governing Law. This Agreement is made pursuant to, and
all of the rights and obligations of the parties hereto and all of the terms and
conditions herein shall be construed in accordance with and governed by, the
laws of the Commonwealth of Massachusetts, U.S.A.
Section 7.8 Severability. If any clause or provision of this
Agreement is illegal, invalid or unenforceable under present or future laws
effective during the term hereof, then the remainder of this Agreement shall not
be affected thereby, and in lieu of each clause or provision of this Agreement
which is illegal, invalid or unenforceable, there shall be added, as part of
this Agreement, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and as may be
legal, valid and enforceable.
Section 7.9 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors, heirs and assigns.
Section 7.10 Assignment by Manager. The rights and obligations of
Manager hereunder shall not be assignable without the prior written consent of
the Venture except that the rights and obligations of Manager may be assigned by
Manager to an Affiliated Entity (as such term is defined in the Venture
Agreement) of Manager or to a Person Controlled by a member of the Hines Control
Group (as defined in the Venture Agreement)..
Section 7.11 Subordination. This Agreement and all fees due from the
Venture to Manager pursuant hereto shall be subject and subordinate in all
respects to (i) any mortgage upon the Premises or any portion thereof executed
by the Venture and (ii) any collateral assignment of rents due under the leases
of space in any improvements on the Premises. This provision shall be
self-executing but Manager shall, upon request, execute such instruments as may
reasonably be requested by the Venture, or any such mortgagee or lender to
evidence such subordination. Nevertheless, the Manager shall be deemed to have
earned (and shall be entitled to be paid) the pro rata portion of the Management
Fee to the date of termination of this Agreement.
Section 7.12 Exculpation. Notwithstanding anything in this Agreement to
the contrary other than Section 7.13, Manager and the Venture accept and agree
that each of the covenants,
21
undertakings and agreements herein made on the part of Manager or the Venture,
while in the form purporting to be covenants, undertakings and agreements of the
Manager or the Venture, are, nevertheless, made and intended not as personal
covenants, undertakings and agreements by Manager's or the Venture's partners or
for the purpose of binding their respective partners personally or the assets of
their respective partners but are made and intended for the purpose of binding
only, (i) with respect to the partners of the Venture, their respective
partners' interests in the assets of the Venture, and (ii) with respect to
Manager and its partners, up to One Million Dollars ($1,000,000) in the
aggregate; and that no personal liability or personal responsibility is assumed
by, nor shall at any time be asserted or enforceable against the partners of the
Venture or the partners of Manager and their respective heirs, legal
representatives, successors and assigns on account of this Agreement or on
account of any covenant, undertaking or agreement of Manager or the Venture and
their respective partners in this document contained, all such personal
liability and personal responsibility, if any, being expressly waived and
released by Manager and the Venture, one to another, and Manager and the Venture
further agree not to seek or enforce any judgments (including but not limited to
specific performance, deficiency judgments, and any and all other judgments)
obtained against the Venture or Manager, as the case may be, or against their
partners beyond the interests and amount respectively set forth above. The
parties further acknowledge and agree that no officer, director, stockholder or
agent of any corporate Venturer or corporate partner of any Venturer shall have
any personal liability for any Venturer's obligations hereunder.
Section 7.13 Indemnity. The Venture shall indemnify the Manager and save
it harmless from and against all third party claims, losses and liabilities
arising out of damage to property, or injury to, or death of persons (including
the property and persons of the parties hereto, and their agents, subcontractors
and employees) occasioned by or in connection with acts or omissions of Manager,
the Venture or the Venture's other employees or subcontractors and all costs,
fees and reasonable attorneys' expenses in connection therewith unless such
claims, losses or liability result from Manager's fraud, gross negligence or
willful misconduct.
Manager (and its partners) shall be liable to the Venture only for any
fraud, gross negligence or willful misconduct committed by Manager hereunder.
Manager shall defend, indemnify and hold the Venture (and the Venture's
partners) harmless from and against any and all third party claims, demands,
losses, damages or liabilities (including, but not limited to, all costs and
reasonable attorneys' fees in connection therewith) incurred by the Venture or
its partners by reason of the fraud, gross negligence or willful misconduct of
Manager hereunder.
Section 7.14 Waivers. No delay or omission by either party in exercising
any right or power accruing upon the non-compliance or failure of performance by
the other party hereto of any provisions of this Agreement shall impair any such
right or power or be construed to be a waiver thereof. A waiver by either party
of any of the covenants, conditions or agreements
22
hereof to be performed by the other must be in writing and signed by the party
who is waiving such covenants, conditions or agreements.
Section 7.15 Other Activities. Notwithstanding any other provisions of
this Agreement to the contrary, Manager may engage in or possess an interest in
other business ventures of every nature and description and in any vicinity
whatsoever, including without limitation the ownership, operation, management
and development of real property, and the Venture shall have no rights in or to
such independent ventures or to any profits therefrom. Any of such activities
may be undertaken with or without notice to or participation therein by the
Venture, and the Venture hereby waives any right or claim that it may have
against the Manager with respect to the income or profits therefrom or the
effect of such activity on the Premises; provided, however, that Manager shall
act as a reasonably prudent manager in not allowing the foregoing activities to
unreasonably interfere with its obligations under this Agreement. Furthermore,
nothing contained herein shall be deemed to require the personal services of
Xxxxxx X. Xxxxx, individually. The Venture acknowledges that Affiliates of
Manager have ownership and management interests in the Eastern Component and
that the foregoing provisions of this Section 7.15 are specifically applicable
to such interests. In performance of any of its obligations and duties
hereunder, Manager shall take such action as it considers appropriate in its
good faith business judgment and actions taken by Manager in its good faith
business judgment shall satisfy the obligation of Manager under this Agreement.
Section 7.16 Representatives. Manager may act through either one of its
representatives it has appointed to oversee and make decisions for Manager. Upon
notice, Manager may at any time and for any reason substitute another person as
its authorized representative. If a particular representative shall die, retire,
withdraw for any reason or become disabled, Manager shall designate a
replacement representative within the following ten business days. The Manager
initially designates as its authorized representatives Xxxxxxx X. Xxxxxxx and
Xxxxx X. Xxxxx.
ARTICLE VIII
ARBITRATION
Section 8.1 Selection of Arbitrators. Whenever in this Agreement it is
provided that a dispute shall be determined by arbitration (other than a dispute
regarding a Property Manager Recommendation which shall be handled in the matter
described in Article IV), the arbitration shall be conducted as provided in this
Article. The party desiring such arbitration shall give written notice to that
effect to the other, specifying the dispute to be arbitrated and the name and
address of the person designated to act as the arbitrator on its behalf. Within
ten (10) days after said notice is given, the other party shall give written
notice to the first party, specifying
23
the name and address of the person designated to act as arbitrator on its
behalf. If the second party fails to notify the first party of the appointment
of its arbitrator as aforesaid by the time above specified, then the first
arbitrator shall determine the dispute. The arbitrators so chosen shall, within
ten (10) days after the second arbitrator is appointed, appoint a third
arbitrator and if they cannot agree upon said appointment, the third arbitrator
shall be appointed by the Suffolk Superior Court Judge in Suffolk County,
Massachusetts. The three arbitrators shall meet and decide the dispute and
tender a written decision to the parties within 30 days after the appointment of
the third arbitrator. A decision in which two of the three arbitrators concur
shall be binding and conclusive upon the parties and judgment thereon may be
entered in any court having jurisdiction thereof.
Section 8.2 Applicable Rules; Costs and Expenses. In designating
arbitrators and in deciding the dispute, the arbitrators shall act in accordance
with the rules then in force of the American Arbitration Association (or any
successor thereto) , subject, however, to such limitations or directions as may
be placed upon them by the provisions of this Agreement. Each party shall pay
the fees and expenses of its respective attorney and arbitrator and both shall
share equally the fee and expenses of the third arbitrator, if any, as well as
any fees payable to the American Arbitration Association or its successor. No
arbitrator shall be a person who is or has been a salaried employee of either
party during the 5 year period immediately preceding his appointment and each
such arbitrator shall have had at least seven (7) years experience in the
management of office buildings in the City of Boston. The arbitrators shall
consider all testimony and documentary evidence which may be presented at any
hearing as well as relevant facts and data which they may discover by
investigation and inquiry outside of such hearings. Each party shall have the
right to be represented by counsel and to cross examine witnesses.
Section 8.3 Applicability. The obligation of the parties to submit a
dispute to arbitration is limited to disputes arising under those Articles of
this Agreement which specifically provide for arbitration.
24
S-1
IN WITNESS WHEREOF, the Venture and Manager have executed this Agreement
of the date first above written.
VENTURE: FIVE HUNDRED BOYLSTON WEST VENTURE
By: XXXXXXXX XXXX 0000 ASSOCIATES LIMITED
PARTNERSHIP, a Venturer
By: GDHI, Limited Partnership, a general partner
By: Hines Consolidated Investments, Inc., a
general partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
Senior Executive Vice President
By: DIHC BOYLSTON ASSOCIATES, a
Georgia general partnership, a Venturer
By: DIHC Boylston Corp., a General Partner
By: /s/ Xxxx X. Xxxxx
--------------------------------------------
Xxxx X. Xxxxx
President
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President
MANAGER: XXXXX INTERESTS LIMITED PARTNERSHIP
By: XXXXX HOLDINGS, INC., a General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Xxxxxxx X. Xxxxx
President
