Exhibit 10.105
[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 Two Twenty-Two Berkeley 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 Hines
222 Berkeley Limited Partnership, a Texas limited partnership ("Hines"), and
DIHC Berkeley 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 previously entered into a
Management and Leasing Agreement, dated April 13, 1989 (the "Prior Agreement")
wherein Xxxxxx X. Xxxxx was appointed the sole and exclusive managing and
leasing agent for the parcel of real property (and improvements situated
thereon) known as 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the "Property")
and the 22 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 assigned the Agreement to Manager as of July 1, 1990, Manager
being a Hines Successor (as such term is defined in the Prior Agreement) 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 1st 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 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
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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 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
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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 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
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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, parking garage operation, repair, labor, window washing 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 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
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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 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
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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.
(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.
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(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 or 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 efforts to 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.
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(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 Western 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 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
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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 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.
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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 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
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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.
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
13
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 May 2,
1991 and shall expire on the earlier to occur of (i) the termination of the
Venture in accordance with the Venture Agreement and (ii) April 13, 2064, 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 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
14
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:
(a) A material default shall be made in the performance or
observance by Manager of any material covenant, condition or term in this
Agreement;
(b) Manager shall engage in conduct under this Agreement which
constitutes fraud;
(c) 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;
(d) 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
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;
(e) 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:
(i) Company provides written notice to Manager of such
termination at least six (6) months prior to the Earliest
Termination Date, or
15
(ii) 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;
(f) The Manager shall no longer be Controlled by a member of the
Hines Control Group;
(g) Hines 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 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.
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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 Western 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.
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
17
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 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 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
18
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:
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:
x/x Xxxxx Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx
Xxxx Xxxxx Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Telecopier: 000-000-0000
To Venture or Company:
DIHC Berkeley Associates
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
19
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 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.
20
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, 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
21
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. (a) 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.
(b) 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 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
22
X. Xxxxx, individually. The Venture acknowledges that Affiliates of Manager have
ownership and management interests in the Western 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 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
23
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
In witness whereof, the Venture and Manager have executed this
Agreement of the date first above written.
VENTURE: TWO TWENTY-TWO BERKELEY VENTURE
By: HINES 222 BERKELEY LIMITED PARTNERSHIP,
a Venturer
By: Xxxxxx X. Xxxxx,
a General Partner
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, as attorney-in-fact for
Xxxxxx X. Xxxxx
By: DIHC BERKELEY ASSOCIATES, a
Georgia general partnership, a Venturer
By: DIHC Berkeley 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
