NEW CASTLE ASSOCIATES
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
This amended and restated limited partnership agreement of New Castle
Associates, a Pennsylvania limited partnership, is entered into effective as of
the 28th day of April, 2003, by and among PR New Castle LLC, a Pennsylvania
limited liability company, as the General Partner, and the parties whose names
are set forth as Limited Partners on Exhibit "A" attached hereto. Capitalized
terms used herein are defined in Section 1.01 below.
B A C K G R O U N D:
-------------------
The Partnership has been operated as a limited partnership in
accordance with the second amendment to and restatement of limited partnership
agreement dated January 1, 1978, as amended by the third amendment dated January
1, 1979, the fourth amendment dated January 1, 1982, the fifth amendment dated
January 27, 1988, the sixth amendment dated March 18, 1993, the seventh
amendment January 1, 1998, and the eighth amendment dated September 10, 2001
(collectively the "Former Partnership Agreement").
As of the date hereof: (1) former Partners of the Partnership and
certain of the Class A Limited Partners have assigned part of their Interests to
UPREIT and UPREIT has been admitted as a Class B Limited Partner; (2) PR New
Castle LLC, an affiliate of UPREIT, has been admitted as the sole General
Partner and the Interest of Pan American Associates as a general partner has
been converted to an Interest as a Class A Limited Partner; and (3) UPREIT has
made the UPREIT Special Capital Contribution and the Percentage Interests of all
of the Partners have been adjusted to reflect the foregoing.
The parties hereto now desire to enter into this amended and restated
limited partnership agreement to replace the Former Partnership Agreement and to
set forth their respective rights, duties and obligations with respect to the
Partnership.
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE 1
DEFINED TERMS; OPERATION OF PARTNERSHIP
Section 1.01 Definitions. Within the context of this Agreement, the
following terms shall have the following meanings:
"Act" means the Pennsylvania Revised Uniform Limited Partnership Act.
"Adjusted Capital Account" means a Partner's Capital Account, adjusted
as follows: (a) any deficit balance in a Partner's Capital Account shall be
reduced by any amount that the Partner is obligated to restore to the
Partnership, or any amount the Partner is treated as obligated to restore to the
Partnership under Regulation ss. 1.704-1(b)(2)(ii)(c), Regulation ss.1.704-2(g)
and Regulation ss.1.704-2(i)(5); and (b) a Partner's Capital Account shall be
adjusted for items specified in subsections (4), (5), and (6) of Regulation
ss.1.704-1(b)(2)(ii)(d).
"Affiliate" means, with respect to any Person, (i) any Person directly
or indirectly controlling, controlled by, or under common control with such
Person, and (ii) any officer, director, general partner, or manager of any
Person described in clause (i) of this sentence. For purposes of this
definition, "controlling," "controlled by," or "under common control with" shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agreement" means this amended and restated limited partnership
agreement, as the same may be amended from time to time.
"Bankruptcy" means, with respect to any Person, (i) the filing of any
petition or answer by such Person seeking to adjudicate it a bankrupt or
insolvent, or seeking for itself any liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of such Person or
such Person's debts under any law relating to bankruptcy, insolvency, or
reorganization or relief of debtors, or seeking, consenting to, or acquiescing
in the entry of an order for relief or the appointment of a receiver, trustee,
custodian, or other similar official for such Person for any substantial part of
its property, or (ii) without the consent or acquiescence of such Person, the
entering of an order for relief or approving a petition for relief or
reorganization or any other petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or other similar relief
under any bankruptcy, liquidation, dissolution, or other similar statute, law,
or regulation, or the filing of any such petition against such Person which
petition shall not be dismissed within ninety (90) days, or, without the consent
or acquiescence of such Person, the entering of an order appointing a trustee,
custodian, receiver, or liquidator of such Person or of all or any substantial
part of the property of such Person which order shall not be dismissed within
sixty (60) days.
"Book Value" means the adjusted basis of the Partnership's property for
federal income tax purposes, with the adjustments provided in accordance with
Section 2.04(d) of this Agreement.
"Capital Account" means the account established and maintained for each
Partner in accordance with Section 2.04 of this Agreement.
"Capital Contribution" means the amount of money and the Book Value of
any property contributed to the Partnership by a Partner (net of any liabilities
to which such property is subject or that are assumed by the Partnership in
connection with such contribution).
"Capital Event" means any disposition of all or any part of Partnership
property not in the ordinary course of business including, without limitation, a
sale, exchange, condemnation, casualty, or grant of a long-term leasehold, or
the borrowing of money by the Partnership not in the ordinary course of
business, or the receipt of title insurance proceeds by the Partnership.
"Certificate" means the certificate of limited partnership for the
Partnership, and any amendments thereto.
"Class" means either of the Class A or Class B of Limited Partners, as
the context requires.
2
"Class A Limited Partners" means the Persons designated as Class A
Limited Partners on Exhibit "A" attached to this Agreement, and any Person
subsequently admitted as a Class A Limited Partner in accordance with the terms
of this Agreement.
"Class B Limited Partners" means the Persons designated as Class B
Limited Partners on Exhibit "A" attached to this Agreement, and any Person
subsequently admitted as a Class B Limited Partner in accordance with the terms
of this Agreement.
"Contribution Agreement" means the contribution agreement dated April
22, 2003 by and among the Partners and certain former Partners and Pennsylvania
Real Estate Investment Trust, an Pennsylvania business trust, pursuant to which
UPREIT has acquired an Interest.
"Code" means the Internal Revenue Code of 1986, as amended.
"Depreciation" means the amount determined for each year or other
period as an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to any Partnership property for such
year or other period, except that, if the Book Value of any property differs
from its adjusted tax basis for federal income tax purposes at the beginning of
such year or other period, Depreciation shall be an amount that bears the same
ratio to such beginning Book Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis; provided, however, that if the
adjusted tax basis of a property at the beginning of a year is zero,
Depreciation shall be determined for such property with reference to Book Value
using any reasonable method selected by the General Partner.
"General Partner" means the Person designated as general partner on
Exhibit "A" attached to this Agreement, and any Person subsequently admitted as
a general partner in accordance with the terms of this Agreement.
"Incapacity" means (a) with respect to a natural Person, the
Bankruptcy, death or determination of incompetency or insanity of such Person
and (b) with respect to any other Person, the Bankruptcy, liquidation or
dissolution of such Person.
"Indemnified Party" means the General Partner and any officer,
director, shareholder, partner, member, manager or agent of the General Partner.
"Interest" means an ownership interest in the Partnership, including
all of the rights and obligations in connection therewith under this Agreement
and the Act.
"Limited Partners" means the Persons designated as limited partners on
Exhibit "A" attached to this Agreement, and any Person subsequently admitted as
a limited partner in accordance with the terms of this Agreement.
"Net Capital Proceeds" means gross cash or property received by the
Partnership from all Capital Events, increased by reductions in Reserves that
reduced Net Capital Proceeds for prior periods, and reduced by the portion used
(i) to pay Partnership expenses incurred in connection with such Capital Event
and repay any debts of the Partnership then due, (ii) to make investments and
capital expenditures, and (iii) to fund Reserves.
3
"Net Equity Value" means, with respect to each Partner, the amount
determined by multiplying (a) the sum of the New Castle Equity Value as defined
in Section 1.1 of the Contribution Agreement plus the UPREIT Special Capital
Contribution by (b) such Partner's Percentage Interest, which amount is stated
for each Partner on Exhibit A hereto.
"Net Ordinary Proceeds" means gross cash or property received by the
Partnership from all sources other than Capital Contributions or Capital Events,
increased by reductions in Reserves that reduced Net Ordinary Proceeds for prior
periods, and reduced by the portion used (i) to pay Partnership expenses,
including debt service, (ii) to make investments and capital expenditures, and
(ii) to fund Reserves.
"Nonrecourse Deductions" has the meaning set forth in Regulation
ss.1.704-2(b)(1).
"Partner Nonrecourse Debt" has the meaning set forth in Regulation
ss.1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulation ss.1.704-2(i)(3).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulation ss.1.704-2(i)(2).
"Partners" means the General Partner and the Limited Partners, and any
Person subsequently admitted as a partner in accordance with the terms of this
Agreement.
"Partnership" means the limited partnership formed and operated
pursuant to the terms of this Agreement.
"Partnership Minimum Gain" has the meaning set forth in Regulation
ss.1.704-2(b)(2) and 1.704-2(d).
"Percentage Interest" means the percentage determined in accordance
with Section 2.03 of this Agreement.
"Person" means any individual or any partnership, corporation, estate,
trust, limited liability company or other legal entity.
"Preferred Return" means initially an amount equal to a Partner's
Unreturned Net Equity Value (computed as a weighted daily average during the
period for which the Preferred Return is being determined, with the initial
computation determined as if each Partner had a Net Equity Value as of March 1,
2003 equal to such Partner's Net Equity Value as of the date of this Agreement)
multiplied by 6.966% per annum, which to the extent not paid shall accrue as the
Unpaid Preferred Return. For the periods after the date that is eighteen months
and two days from the date of this Agreement the Preferred Return rate for the
Class A Partners shall be increased to 150% of the percentage rate specified in
the preceding sentence, and shall be increased annually commencing January 1,
2005 by 5% of the Class A Partner Preferred Return percentage rate for the
immediately prior calendar year. From and after the date that is five years from
the date of this Agreement (the "Termination Date") the Preferred Return rate
shall be zero. The Preferred Return which has accrued as an Unpaid Preferred
Return by the Termination Date (i.e., which has not yet been distributed by the
date that is five years from the date of this Agreement) shall still be
distributable after the Termination Date in accordance with Sections 3.01 and
3.02, but shall not accrue any increase beyond the Unpaid Preferred Return as of
the Termination Date. In addition, any Profit with respect to the Preferred
Return earned prior to the Termination Date that has not yet been allocated
pursuant to Sections 4.01(a)(ii) and 4.01(a)(iii) shall be allocated after the
Termination Date in accordance with those Sections.
4
"Profits" and "Losses" mean, for each year or other period, an amount
equal to the Partnership's taxable income or loss for such year or period,
determined in accordance with ss.703(a) of the Code (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant to
ss.703(a)(1) of the Code shall be included in taxable income or loss), with the
following adjustments:
(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits and Losses shall
be added to such taxable income or loss.
(b) Any expenditures of the Partnership described in ss.705(a)(2)(B) of
the Code or treated as ss.705(a)(2)(B) expenditures pursuant to Regulation
ss.1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits and Losses shall be subtracted from such taxable income or loss.
(c) If the Book Value of any Partnership property is adjusted pursuant
to Section 2.04(d)(ii) of this Agreement, the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such property for
purposes of computing Profits or Losses.
(d) Gain or loss resulting from any disposition of Partnership property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Book Value of the asset disposed of,
notwithstanding that the adjusted tax basis of such asset differs from its Book
Value.
(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such year or other period as
determined in accordance with this Agreement.
(f) To the extent adjustment to the adjusted tax basis of any
Partnership asset pursuant to ss.734(b) or ss.743(b) of the Code is required,
pursuant to Regulations ss.1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be allocated to the Partners in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant to
such section of the Regulations.
(g) Items of income, gain, loss or deduction allocated pursuant to
Section 4.02 shall be excluded from Profits and Losses.
5
"Property" means the real property to be acquired by the Partnership
which is described on Exhibit "B" attached hereto, together with all related
personal property and fixtures.
"Regulations" means the income tax regulations promulgated under the
Code, as such regulations may be amended from time to time.
"Reserves" means amounts set aside to pay future costs or expenses that
are anticipated to exceed cash available to pay such costs or expenses when due,
as determined in the sole discretion of the General Partner.
"Transfer" means to sell, exchange, assign, pledge, encumber, or
dispose of in any manner other than by bequest or inheritance on the death of a
Partner.
"Unpaid Preferred Return" means a Partner's Preferred Return to the
date for which the Unpaid Preferred Return is being determined, reduced (but not
below zero) by all distributions to such Partner pursuant to Sections
3.01(a)(i), 3.01(a)(ii), 3.01(b)(i), 3.01(b)(ii), 3.02(a)(i), 3.02(a)(ii),
3.02(b)(ii), and 3.02(b)(iii).
"Unreturned Net Equity Value" means a Partner's Net Equity Value
reduced (but not below zero) by all distributions to such Partner pursuant to
Sections 3.02(a)(iii) and (b)(i).
"UPREIT" means PREIT Associates, L.P., a Delaware limited partnership.
"UPREIT Special Capital Contribution" means the Capital Contribution
made to the Partnership by UPREIT pursuant to Section 2.02 of this Agreement.
Section 1.02 Continuation of Partnership; Name. From and after the date
hereof, the Partners agree to continue to operate the Partnership as a limited
partnership under the terms of this Agreement and the Act. Whenever the terms of
this Agreement conflict with the Act, the terms of this Agreement shall control,
except with respect to any matters contained in the Act that cannot be modified
or waived by a limited partnership agreement. The Partnership shall be operated
under the name "New Castle Associates." The General Partner shall file such
other certificates and documents as are necessary to qualify the Partnership to
conduct business in any jurisdiction in which the Partnership conducts business.
A copy of the Certificate shall be provided to any Partner on request.
Section 1.03 Registered Agent and Office; Principal Office. The
registered agent and office of the Partnership required under the Act shall be
as designated in the Certificate, and may be changed by the General Partner in
accordance with the Act. The principal business office of the Partnership shall
be located at The Bellevue, 200 S. Broad Street, 3rd Floor, Philadelphia,
Pennsylvania 19102, or such other address as shall be designated by the General
Partner with written notice to the Limited Partners.
Section 1.04 Purpose. The purpose and business of the Partnership is to
acquire, hold, operate, manage, lease, improve, renovate, maintain, finance,
refinance and sell all and any portions of the Property and any replacement or
other property acquired in accordance with the provisions of this Agreement. The
Partnership is authorized to engage in any business or activity that may be
engaged in by a limited partnership under the Act, and do any and all acts and
things necessary, appropriate, incidental to, or convenient for the furtherance
and accomplishment of its purposes.
6
Section 1.05 Term. The term of the Partnership as a limited partnership
shall commence on the date of filing of the Certificate, and the Partnership
shall continue until the Partnership is terminated in accordance with this
Agreement.
Section 1.06 Title to Property. All real and personal property owned by
the Partnership shall be owned by the Partnership as an entity and no Partner
shall have any ownership interest in such property in the Partner's individual
name or right, and each Partner's Interest shall be personal property for all
purposes. The Partnership shall hold all of its real and personal property in
the name of the Partnership and not in the name of any Partner.
Section 1.07 Waiver of Partition. No Partner shall either directly or
indirectly take any action to require partition or appraisement of the
Partnership or of any of its assets or properties or cause the sale of any
Partnership property, and notwithstanding any provisions of applicable law to
the contrary, each Partner hereby irrevocably waives any and all right to
maintain any action for partition or to compel any sale with respect to such
Partner's Interest, or with respect to any assets or properties of the
Partnership, except as expressly provided in this Agreement.
ARTICLE 2
CAPITAL CONTRIBUTIONS; INTERESTS; CAPITAL ACCOUNTS
Section 2.01 Capital Contributions. The Partners have previously made
all of their Capital Contributions to the Partnership that were required prior
to the date hereof. Except as provided in Section 2.02, no Partner shall be
obligated to make any additional Capital Contributions to the Partnership.
Section 2.02 UPREIT Special Capital Contribution. In connection with
its admission to the Partnership as a Class B Limited Partner, UPREIT shall make
a Capital Contribution in the amount of $30,840,648 (the "UPREIT Special Capital
Contribution").
Section 2.03 Percentage Interests. Each Partner shall have the
Percentage Interest in the Partnership set forth next to such Partner's name on
Exhibit "A" attached hereto.
Section 2.04 Capital Accounts. A Capital Account shall be maintained
and adjusted for each Partner in accordance with the following provisions:
(a) Additions to Capital Accounts. To each Partner's Capital
Account there shall be added the Partner's Capital Contributions and the
Partner's distributive share of Profits and any items of income or gain which
are allocated separately from Profits under Section 4.02.
(b) Subtractions from Capital Accounts. From each Partner's
Capital Account there shall be subtracted the amount of money and the Book Value
of any Partnership property distributed to the Partner (net of any liabilities
to which the property is subject or that are assumed by the Partner in
connection with the distribution), and the Partner's distributive share of
Losses and any items of expenses or losses which are allocated separately from
Losses under Section 4.02.
7
(c) Transfers. If any Interest is transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred Interest.
(d) Book Values. For purposes of determining a Partner's
Capital Contributions and Capital Account, property held by the Partnership
shall be taken into account in accordance with the following provisions:
(i) The Book Value of any property contributed by a
Partner to the Partnership initially shall be the
gross fair market value of the property.
(ii) The Book Value of all Partnership property shall be
adjusted to equal the respective gross fair market
values of the property as of the following times,
unless the General Partner determines that such
adjustment is not necessary to reflect the economic
arrangement among the Partners: (A) the acquisition
of an additional Interest by any new or existing
Partner in exchange for services or more than a de
minimis Capital Contribution; (B) the distribution by
the Partnership to a Partner of more than a de
minimis amount of Partnership property as
consideration for an Interest; or (C) the liquidation
of the Partnership within the meaning of
Regulationss.1.704-1(b)(2)(ii)(g). If any property is
distributed to a Partner, the Book Value of such
property shall be adjusted to equal the gross fair
market value of such property immediately before such
distribution. In connection with the admission of
UPREIT as a Partner and the contribution by UPREIT of
the UPREIT Special Capital Contribution, the Capital
Accounts of the Partners shall be adjusted so each
Partner's Capital Account is equal to such Partner's
Net Equity Value.
(iii) The Book Values of Partnership property shall be
increased (or decreased) to reflect any adjustments
to the adjusted basis of such property pursuant to
ss.734(b) or ss.743(b) of the Code, but only to the
extent that such adjustments are taken into account
in determining Capital Accounts pursuant to
Regulation ss.1.704-1(b)(2)(iv)(m).
(iv) The Book Value of Partnership property shall be
adjusted by the Depreciation taken into account with
respect to such property.
(e) Compliance with Regulations. The foregoing provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with ss.704(b) of the Code and the Regulations issued thereunder, and shall be
interpreted and applied in a manner consistent with such Regulations. If the
General Partner determines that it is appropriate to modify the manner in which
the Capital Accounts are computed in order to comply with such Regulations, the
General Partner may make such modification, provided that such modification
shall not have a material effect on the amounts distributable to any Partner.
8
Section 2.05 No Interest. No interest shall be paid on any Capital
Contributions or Capital Account balance of any Partner.
Section 2.06 No Deficit Make-Up. No Partner shall be obligated to the
Partnership, or any other Partner solely because of a deficit balance in such
Partner's Capital Account.
ARTICLE 3
DISTRIBUTIONS
Section 3.01 Distributions of Net Ordinary Proceeds. Within thirty (30)
days after the last day of February, May, August, and November, Net Ordinary
Proceeds shall be distributed to the Partners. Net Ordinary Proceeds shall be
distributed among the Partners as follows:
(a) During the period ending twelve months from the date of this
Agreement:
(i) First, among the Class A Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class A
Limited Partners have been reduced to zero;
(ii) Then, among the Class B Limited Partners and the
General Partner in proportion to their relative
Percentage Interests.
(b) At any time after the period ending twelve months from the date of
this Agreement:
(i) First, among the Class A Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class A
Limited Partners have been reduced to zero;
(ii) Then, among the Class B Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class B
Limited Partners have been reduced to zero;
(iii) Then, among the all of the Partners in proportion to
their Percentage Interests.
Section 3.02 Distributions of Net Capital Proceeds. Within thirty (30)
days after receipt by the Partnership, Net Capital Proceeds shall be distributed
to the Partners as follows:
9
(a) During the period ending twelve months from the date of this
Agreement:
(i) First, among the Class A Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class A
Limited Partners have been reduced to zero;
(ii) Second, among the Class B Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class B
Limited Partners have been reduced to zero;
(iii) Then, among the Class B Limited Partners and the
General Partner in proportion to their relative
Percentage Interests.
(b) At any time after the period ending twelve months from the date of
this Agreement:
(i) First, among all of the Partners in proportion to
their relative Percentage Interests until all
Unreturned Net Equity Values have been reduced to
zero;
(ii) Then, among the Class A Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class A
Limited Partners have been reduced to zero;
(iii) Then, among the Class B Limited Partners in
proportion to their relative Percentage Interests
until all Unpaid Preferred Returns of the Class B
Limited Partners have been reduced to zero;
(iv) Then, among the all of the Partners in proportion to
their Percentage Interests.
Section 3.03 Amounts Withheld. The Partnership is authorized to
withhold from distributions or with respect to allocations and pay over to any
federal, state, local or foreign government any amounts required to be withheld
with respect to any Partner pursuant to any provisions of federal, state, local
or foreign law. All amounts so withheld shall be treated as amounts distributed
to the Partners pursuant to Section 3.01 or Section 3.02 of this Agreement,
depending upon the item that gives rise to the withholding obligation. To the
extent any amount withheld with respect to a Partner pursuant to this Section
3.03 for any year exceeds the amount distributable to such Partner for such
year, such Partner shall repay such excess to the Partnership within ten (10)
days after such Partner receives written notice from the Partnership of the
amount of such excess.
Section 3.04 Property Distributions. The General Partner may authorize
the distribution to the Partners of property other than cash. All such
distributions shall be included in Net Ordinary Proceeds or Net Capital
Proceeds, as the case may be, based upon the fair market value of such property
at the time of distribution.
10
ARTICLE 4
PROFITS AND LOSSES
Section 4.01 General Allocation of Profits and Losses. After taking
into account any special allocations pursuant to Section 4.02 and subject to any
limitations contained therein, Profits and Losses for any year or portion
thereof shall be allocated among the Partners in accordance with this Section
4.01.
(a) Profits. Profits shall be allocated among the Partners as follows:
(i) First, among the Partners who have previously been
allocated Losses pursuant to Section 4.01(b)(iv) in
the same proportion as such Losses have been
allocated, until the cumulative Profits allocated to
each Partner pursuant to this Section 4.01(a)(i)
equal the cumulative Losses allocated to each Partner
pursuant to Section 4.01(b)(iv);
(ii) Then, among the Class A Limited Partners in
proportion to their relative Percentage Interests
until the cumulative Profits allocated to the Class A
Limited Partners pursuant to this Section 4.01(a)(ii)
exceed the cumulative Losses allocated to the Class A
Limited Partners pursuant to Section 4.01(b)(iii) by
an amount equal to the cumulative amount of the
Preferred Return paid or accrued to the Class A
Limited Partners;
(iii) Then, among the Class B Limited Partners in
proportion to their relative Percentage Interests
until the cumulative Profits allocated to the Class B
Limited Partners pursuant to this Section
4.01(a)(iii) exceed the cumulative Losses allocated
to the Class B Limited Partners pursuant to Section
4.01(b)(ii) by an amount equal to the cumulative
amount of the Preferred Return paid or accrued to the
Class B Limited Partners;
(iv) Then, among all of the Partners in accordance with
their Percentage Interests.
Provided, however, that all Profits during the period ending twelve months after
the date of this Agreement in excess of the amount allocated to the Class A
Limited Partners pursuant to Section 4.01(a)(ii) shall be allocated among the
Class B Limited Partners and the General Partner in proportion to their relative
Percentage Interests.
(b) Losses. Losses shall be allocated among the Partners as follows:
(i) First, among the Partners who have previously been
allocated Profits pursuant to Section 4.01(a)(iv) in
the same proportion as such Profits have been
allocated, until the cumulative Losses allocated to
each Partner pursuant to this Section 4.01(b)(i)
equal the cumulative Profits allocated to each
Partner pursuant to Section 4.01(a)(iv);
11
(ii) Then, among the Class B Limited Partners in
proportion to their relative Percentage Interests
until the cumulative Losses allocated to the Class B
Limited Partners pursuant to this Section 4.01(b)(ii)
equal the cumulative Profits allocated to the Class B
Limited Partners pursuant to Section 4.01(a)(iii);
(iii) Then, among the Class A Limited Partners in
proportion to their relative Percentage Interests
until the cumulative Losses allocated to the Class A
Limited Partners pursuant to this Section
4.01(b)(iii) equal the cumulative Profits allocated
to the Class B Limited Partners pursuant to Section
4.01(a)(ii);
(iv) Then, among all of the Partners in accordance with
their Percentage Interests.
(c) The Partners intend that the allocations of Profits and Losses in
Section 4.01(a) and Section 4.01(b) result in a Capital Account balance for each
Partner on liquidation of the Partnership that is equal to the amount that would
be distributed to such Partner if liquidating distributions were made in
accordance with Article 3 of this Agreement. In the year of liquidation of the
Partnership, if the allocations set forth in Section 4.01(a) and Section 4.01(b)
would result in Capital Account balances that are not as described in the
preceding sentence, Profits and Losses and, if necessary, items of gross income
and deduction shall be specially allocated among the Partners to the extent
necessary to cause each Partner's Capital Account balance to be equal to the
amount that would be distributed to such Partner if liquidating distributions
were made in accordance with Article 3 of this Agreement.
Section 4.02 Special Allocations.
(a) Limitation on Allocation of Items of Loss or Deduction. No
Partnership items of loss or deduction may be allocated to any Partner to the
extent such allocation would result in an Adjusted Capital Account deficit
balance for such Partner. Any items of loss or deduction that are prohibited to
be allocated to a Partner under the preceding sentence shall be reallocated
among the other Partners to whom such limitation does not apply in accordance
with their relative Percentage Interests. If, at the end of a year, any Partner
has an Adjusted Capital Account deficit balance, such Partner shall be allocated
items of gross income and gain to the extent necessary to eliminate such deficit
balance.
(b) Nonrecourse Deductions and Partnership Minimum Gain Chargeback.
Nonrecourse Deductions shall be allocated among the Partners in accordance with
their Percentage Interests. If there is a net decrease in Partnership Minimum
Gain for any year, each Partner shall be allocated the next available items of
income and gain for such year (and for subsequent years if necessary) equal to
such Partner's share of the net decrease in Partnership Minimum Gain as
determined in accordance with Regulation ss.1.704-2(g) and the "minimum gain
chargeback" requirement of Regulation ss.1.704-2(f).
12
(c) Partner Nonrecourse Deductions and Chargeback. Partner Nonrecourse
Deductions for any year shall be allocated to the Partner who bears the economic
risk of loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable as determined under Regulation
ss.1.704-2(i). If there is a net decrease in Partner Nonrecourse Debt Minimum
Gain in any year, each Partner shall be allocated items of income and gain for
such year (and for subsequent years if necessary) equal to such Partner's share
of the net decrease in Partner Nonrecourse Debt Minimum Gain in accordance with
Regulation ss.1.704-2(i)(4).
(d) Qualified Income Offset. Any Partner who unexpectedly receives,
with respect to the Partnership, an adjustment, allocation, or distribution of
any item described in subsections (4), (5), or (6) of Regulation
ss.1.704-1(b)(2)(ii)(d) shall be allocated items of income and gain in an amount
sufficient to eliminate such Partner's Adjusted Capital Account deficit balance
arising thereby as quickly as possible, in accordance with the "qualified income
offset" rule of Regulation ss.1.704-1(b)(2)(ii)(d)(3).
(e) Curative Allocations. The special allocations set forth in this
Section 4.02 are intended to comply with the requirements of the Regulations
under ss.704(b) of the Code. It is the intent of the Partners that all such
special allocations shall be offset with other special allocations. Accordingly,
to the extent consistent with the Regulations, to the extent that any such
special allocations are made to a Partner, subsequent offsetting special
allocations shall be made to such Partner such that the net amount of all items
of income, gain, loss and deduction allocated to each Partner is the same that
would have been allocated to each Partner if no special allocations had been
made to any Partner, taking into account future special allocations that,
although not yet made, are likely to offset previous special allocations.
Section 4.03 Allocation During Year. For purposes of determining
Profits, Losses, or any other items allocable to any period ending on a date
other than the last day of the Partnership's year, Profits, Losses, and any such
other items shall be allocated among such periods using such method permitted by
ss.706 of the Code and the Regulations thereunder as shall be chosen by the
General Partner.
Section 4.04 Tax Allocations.
(a) General Allocation. Except as otherwise provided in this Section
4.04, items of income, gain, loss and deduction as determined for federal income
tax purposes shall be allocated in the same manner as the related items of
Profits, Losses, or specially allocated items. Tax credits shall be allocated in
accordance with Regulation ss.1.704-1(b)(4)(ii).
(b) Contributed Property. In accordance with ss.704(c) of the Code and
the Regulations thereunder, income, gain, loss, and deduction with respect to
any property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its Book Value.
13
(c) Revaluations. If the Book Value of any Partnership property is
adjusted pursuant to Section 2.04(d)(ii) of this Agreement, income, gain, loss
and deduction with respect to such property shall be allocated among the
Partners so as to take account of any variation between the adjusted basis of
such property for federal income tax purposes and its Book Value in the same
manner as under ss.704(c) of the Code and the Regulations thereunder.
(d) No Effect on Capital Accounts. Allocations pursuant to this Section
4.04 are solely for purposes of federal, state, and local taxes and shall not
affect, or in any way be taken into account in computing, any Partner's Capital
Account or share of Profits, Losses, or other items or distributions pursuant to
any provision of this Agreement.
(e) Allocation Method. The method for making allocations pursuant to
Section 4.04(b) and Section 4.04(c) shall be such method permitted by Regulation
ss.1.704-3 as shall be selected by the General Partner.
ARTICLE 5
MANAGEMENT OF PARTNERSHIP
Section 5.01 General Provisions Concerning Management. Subject only to
the express limitations contained in the other provisions of this Agreement, the
General Partner shall have the exclusive right and responsibility to manage the
business of the Partnership and is hereby authorized to take any action of any
kind and to do anything and everything the General Partner deems necessary in
connection therewith, including authorizing confession of judgment against the
Partnership. The General Partner shall have all of the rights and powers of a
general partner under the Act. The Limited Partners shall not have any right or
power to take part in the management or control of the Partnership or its
business and affairs or to act for or bind the Partnership in any way.
Section 5.02 Actions Requiring Limited Partner Consent. Notwithstanding
any other provision of this Agreement, for a period of five years after the date
hereof, the General Partner shall not cause the Partnership to do any of the
following without the consent of the Class A Limited Partners who hold more than
50% of the Percentage Interests of the Class A Limited Partners and Class B
Limited Partners who hold more than 50% of the Percentage Interests of the Class
B Limited Partners:
(a) sell, exchange, or otherwise dispose of all or any portion
of the Property other than in a transaction in which no gain is recognized by
the Partnership as a result of such disposition; or
(b) incur or assume any indebtedness secured by the Property
that is recourse to any Partner within the meaning of Regulation ss.1.752-2 or
prepay any such indebtedness with any Capital Contribution from a Partner.
Section 5.03 Contracts with Affiliates. The Partners authorize the
General Partner to execute, deliver and perform on behalf of the Partnership the
Leasing and Management Agreement in the form attached hereto as Exhibit "C." The
General Partner, on behalf of the Partnership, may enter into other contracts
and agreements for property or services in the ordinary course of business with
any Partner or any Affiliate of a Partner, provided such contracts and
agreements are on terms and conditions no less favorable to the Partnership than
the terms and conditions that could be obtained by the Partnership in the same
type of transaction with an independent third party.
14
Section 5.04 Partnership Expenses. All expenses of the Partnership
shall be billed directly to and be paid by the Partnership. The General Partner
shall be reimbursed for all expenses incurred by it for or on behalf of the
Partnership.
ARTICLE 6
BOOKS AND RECORDS; TAX AND FINANCIAL MATTERS
Section 6.01 Books and Records. Proper and complete records and books
of account of the Partnership shall be maintained at the principal place of
business of the Partnership. The Partnership books shall be closed and balanced
at the end of each fiscal year. Each Partner or duly authorized representative
of a Partner shall have access and the right to inspect such books and records
during normal business hours, provided any information obtained thereby may be
used solely for purposes reasonably related to the Partner's Interest or the
business of the Partnership.
Section 6.02 Fiscal Year. The fiscal year of the Partnership shall end
on the last day of the month of December each year.
Section 6.03 Reports and Tax Returns. Within one hundred twenty (120)
days after the end of each fiscal year (subject to reasonable delays in the
event of difficulty in obtaining or compiling financial information), the
Partnership shall deliver to each Person who was a Partner at any time during
the fiscal year a financial statement of the Partnership, including a balance
sheet and statements of income, Partner's equity, and cash flows for such fiscal
year, which shall be prepared in accordance with generally accepted accounting
principles consistently applied and shall be audited by a firm of independent
certified public accountants selected by the General Partner. Within ninety (90)
days after the end of each fiscal year (subject to reasonable delays in the
event of difficulty in obtaining or compiling of tax information), the
Partnership shall transmit to each Person who was a Partner at any time during
the fiscal year the Schedule K-1 (IRS Form 1065) for the Partner for such year.
The General Partner shall cause to be prepared and filed all tax returns for the
Partnership, and all tax elections concerning the Partnership shall be made at
the direction of the General Partner. Each Partner agrees that it shall not take
on any of its original or amended income tax returns or claims for refund any
position with respect to any Partnership item of income, gain, loss, deduction,
or credit that is inconsistent with the treatment of such item by the
Partnership on the Schedule K-1.
Section 6.04 Tax Matters Partner. The General Partner shall be the "tax
matters partner" under ss.6231(a)(7) of the Code.
Section 6.05 Banking. All funds of the Partnership shall be deposited
in the name of the Partnership in such checking account or accounts as shall be
designated by the General Partner. All withdrawals therefrom are to be made upon
checks signed by a Person or Persons authorized by the General Partner.
15
ARTICLE 7
TRANSFERS, ADMISSIONS, AND WITHDRAWALS
Section 7.01 Transfers. Except as provided in this Agreement, no
Partner shall Transfer all or any portion of the Partner's Interest without the
written consent of the General Partner, which consent may be withheld in the
sole discretion of the General Partner. In connection with any permitted
Transfer, if required by the General Partner the transferee shall provide the
Partnership with a written opinion from legal counsel acceptable to the General
Partner that such transfer will not violate any state or federal securities law,
and will not cause a termination of the Partnership under Section 708(b)(1)(B)
of the Code. The transferee shall pay all costs and expenses incurred by the
Partnership in connection with such Transfer. With respect to any Interest held
by an entity other than UPREIT, each such entity agrees that it will not permit
any of its direct or indirect owners to Transfer all or any part of their direct
or indirect ownership interests in such entity except in accordance with this
Section 7.01. Any purported Transfer in violation of this Agreement shall be
null and void. The Partners acknowledge that the restrictions on Transfers
contained herein are reasonable and necessary to protect the interests of the
Partners with respect to the Partnership. If in connection with a permitted
Transfer of an Interest the transferor requests that the Partnership make an
election under Section 754 of the Code and provides the Partnership with the
information required by Regulation ss.1.743-1(k), the General Partner shall
cause the Partnership to make the election under Section 754 of the Code
provided such election does not result in a negative adjustment to the tax basis
of the Partnership's assets with respect to any other Partner. If there is a
Transfer of any Interest, the Interest as to the transferee shall be of the same
Class as the transferred Interest had in the hands of the transferor, regardless
of whether the transferee also holds any Interest of any other Class and
regardless of whether the transferee is admitted as a Limited Partner with
respect to such Class pursuant to Section 7.02.
Section 7.02 Admissions. Except as provided in this Agreement, no
transferee of an Interest shall be admitted as a Partner of the Partnership
without the written consent of the General Partner, and only if the transferee
agrees to be legally bound by this Agreement as a Partner and executes and
delivers to the Partnership such documents and instruments as are necessary or
appropriate in connection with the transferee becoming a Partner. The transferee
shall pay all costs and expenses incurred by the Partnership in connection with
such admission. Any transferee of an Interest who is not admitted as a Partner
shall have the rights of an assignee with respect to distributions and Profits,
Losses, and other allocations attributable to the transferred Interest, but
shall have no rights as a Partner under this Agreement or the Act.
Notwithstanding the foregoing, the Interest of the assignee shall be subject to
the restrictions contained in this Agreement applicable to Interests held by a
Limited Partner.
Section 7.03 No Withdrawal. The Limited Partners shall have no right to
withdraw from the Partnership prior to the dissolution and winding up of the
Partnership. The General Partner agrees that it shall not withdraw from the
Partnership prior to the dissolution and winding up of the Partnership.
Section 7.04 Incapacity of Limited Partner. The Incapacity of a Limited
Partner shall not dissolve or terminate the Partnership. In the event of such
Incapacity, the executor, administrator, guardian, trustee or other personal
representative of the Limited Partner affected by such Incapacity shall be
deemed to be the assignee of such Limited Partner's Interest and may, subject to
Section 7.02, become a substituted Limited Partner.
16
ARTICLE 8
TERMINATION AND DISSOLUTION
Section 8.01 Dissolution Events. The Partnership shall be terminated
and dissolved upon the earliest to occur of the following events:
(a) Dissolution Date. December 31, 2075.
(b) Dissolution Event with Respect to a General Partner. Any
event with respect to a General Partner that would result in a dissolution of
the Partnership pursuant to the Act, provided, however, that the Partnership
shall not be dissolved if (a) there is at least one remaining General Partner
and the business of the Partnership is carried on by the remaining General
Partner(s) either alone or together with a new General Partner, or, (b) within
one hundred eighty (180) days of such event the holders of a majority of the
Percentage Interests of the Limited Partners elect a new General Partner to
continue the business of the Partnership; or
(c) Election of the Partners. The election of the General
Partner, with the consent of the holders of a majority of the Percentage
Interests of the Limited Partners, to dissolve the Partnership.
Section 8.02 Liquidation.
(a) Winding Up. Upon the dissolution of the Partnership, the
Partnership's business shall be liquidated in an orderly manner. The General
Partner or, if there is no General Partner at the time of liquidation, a Person
selected by the holders of a majority of the Percentage Interests of the Limited
Partners (the "Liquidator"), shall determine which Partnership property shall be
distributed in-kind and which Partnership property shall be liquidated. The
liquidation of Partnership property shall be carried out as promptly as is
consistent with obtaining the fair value thereof.
(b) Payments and Distributions. Partnership property or the
proceeds therefrom, to the extent sufficient therefor, shall be applied and
distributed in the following order of priority, with no distribution being made
in any category set forth below until each preceding category has been satisfied
in full:
(i) To the payment and discharge of all of the Partnership's
debts and liabilities, including any debts and liabilities
owed to any Partner, and to the expenses of liquidation;
(ii) To the establishment of Reserves (which Reserves, to the
extent determined by the General Partner or the Liquidator
to be no longer needed by the Partnership, shall be
distributed in accordance with the order of priority set
forth in Section (c) hereof);
17
(iii) To and among the Partners in accordance with their
positive Capital Account balances after adjusting such
Capital Account balances for allocations of Profits and
Losses and items of income, gain, loss and deduction for
the year of liquidation.
ARTICLE 9
EXCULPATION AND INDEMNIFICATION
Section 9.01 Exculpation. No Indemnified Party shall be liable,
responsible or accountable in damages or otherwise to the Partnership or the
Limited Partners for any act or omission of the Indemnified Party on behalf of
the Partnership, provided that the act or omission is not determined by a court
to be due to such Indemnified Party's willful misconduct or recklessness or
material breach of this Agreement.
Section 9.02 Indemnification. The Partnership shall indemnify and hold
harmless each Indemnified Party against any loss or damage (including attorneys'
and other professional fees) incurred by the Indemnified Party on behalf of the
Partnership or in furtherance of the Partnership's interests, without relieving
the Indemnified Party of liability for willful misconduct or recklessness or
material breach of this Agreement. The satisfaction of any indemnification shall
be from and limited to Partnership's assets and no Partner shall have any
liability on account thereof. The right to indemnification shall include the
right to be paid or reimbursed by the Partnership the reasonable expenses
incurred by the Indemnified Party in advance of the final disposition of any
proceeding; provided, however, that the advance payment of such expenses shall
be made only upon delivery to the Partnership of a written affirmation by such
Indemnified Party of such Indemnified Party's good faith belief that the
Indemnified Party has met the standard of conduct necessary for indemnification
under this Agreement and a written undertaking, by or on behalf of such
Indemnified Party, to repay all amounts so advanced if it shall ultimately be
determined that such Indemnified Party is not entitled to be indemnified under
this Agreement or otherwise.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
Section 10.01 General. As of the date hereof, each of the Partners
makes each of the representations and warranties applicable to such Partner as
set forth in this Section 10.01, and such representations and warranties shall
survive the execution of this Agreement.
(a) Due Incorporation or Formation; Authorization of
Agreement. If such Partner is a corporation, partnership, trust, limited
liability company, or other legal entity, it is duly organized or formed,
validly existing, and in good standing under the laws of the jurisdiction of its
incorporation or formation and has the power and authority to own property and
carry on its business as owned and carried on at the date hereof and as
contemplated hereby. Such Partner is duly licensed or qualified to do business
and in good standing in each of the jurisdictions in which the failure to be so
licensed or qualified would have a material adverse effect on its ability to
perform its obligations hereunder, and the execution, delivery, and performance
of this Agreement has been duly authorized by all necessary corporate or
partnership or company action. This Agreement constitutes the legal, valid, and
binding obligation of each Partner.
18
(b) No Conflict or Default. The execution, delivery, and
performance of this Agreement and the consummation by such Partner of the
transactions contemplated hereby (i) will not conflict with, violate, or result
in a breach of any of the terms, conditions, or provisions of any law,
regulation, order, writ, injunction, decree, determination, or award of any
court, any governmental department, board, agency, or instrumentality, or any
arbitrator, applicable to such Partner, and (ii) will not conflict with,
violate, result in a breach of, or constitute a default under any of the terms,
conditions, or provisions of the articles of incorporation, bylaws, partnership
agreement, operating agreement, or other organizational documents of such
Partner, or of any material agreement or instrument to which such Partner is a
party or by which such Partner is or may be bound or to which any of its
material properties or assets are or may be subject.
(c) Governmental Authorizations. Any registration, declaration
or filing with or consent, approval, license, permit or other authorization or
order by, any governmental or regulatory authority that is required in
connection with the valid execution, delivery, acceptance, and performance by
such Partner under this Agreement or the consummation by such Partner of any
transaction contemplated hereby has been completed, made, or obtained on or
before the effective date of this Agreement.
(d) Litigation. There are no actions, suits, proceedings, or
investigations pending or, to the knowledge of such Partner, threatened against
or affecting such Partner or any of such Partner's properties, assets, or
businesses in any court or before or by any governmental department, board,
agency, instrumentality, or arbitrator which, if adversely determined, could (or
in the case of an investigation could lead to any action, suit, or proceeding
which, if adversely determined, could) reasonably be expected to materially
impair such Partner's ability to perform its obligations under this Agreement.
Section 10.02 Investment Representations. Each Limited Partner
represents and warrants that it has acquired its Interest for its own account as
part of a transaction exempt from registration under the Securities Act of 1933,
as amended, and applicable state law for investment purposes and not with a view
to the resale or distribution thereof, and that it has had access to any and all
information necessary to arrive at its decision to acquire its Interest. In
addition to the restrictions on transfer of Interests otherwise set forth in
this Agreement, no Interest may be sold, transferred, assigned or otherwise
disposed of by any Partner in the absence of registration under the Securities
Act of 1933, as amended, and applicable state law, or an opinion of counsel
experienced in securities matters and satisfactory to the General Partner that
such assignment or other disposition will not be in violation of said Act or
state laws. No Limited Partner shall have any right to require registration of
its Interest under said Securities Act or applicable state law and, in view of
the nature of the Partnership and its business, such registration is neither
contemplated nor likely. Each Limited Partner further acknowledges that it
understands that the effect of the foregoing representation and warranty and
restriction on assignment or other disposition is generally to require that such
Interest be held indefinitely unless it is registered or an exemption from
registration is available.
19
ARTICLE 11
MISCELLANEOUS
Section 11.01 Notices. All notices, approvals, consents, requests,
instructions, and other communications (collectively "Communications") required
to be given in writing pursuant to this Agreement shall be validly given, made
or served only when delivered personally or by registered or certified mail,
return receipt requested, postage prepaid, or by a reputable overnight or same
day courier, addressed to the Partnership or the Partner at the address that is
on record at the principal office of the Partnership, or by facsimile to the
number that is on record at the principal office of the Partnership. Any such
Communication shall be treated as given under this Agreement when the
Communication is delivered to such address or received at such facsimile number.
The designation of the Person to receive such Communication on behalf of a
Partner or the address of any such Person for the purposes of such Communication
may be changed from time to time by written notice given to the Partnership
pursuant to this Section.
Section 11.02 Parties Bound; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and shall be binding upon all of the
parties and their respective heirs, successors and assigns. No provision of this
Agreement is intended to or shall be construed to grant or confer any right to
enforce this Agreement or any remedy for breach of this Agreement to or upon any
Person other than the parties hereto.
Section 11.03 Applicable Law. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the
Commonwealth of Pennsylvania.
Section 11.04 Amendment. No change or modification to this Agreement
shall be valid unless the same is in writing and signed by the General Partner
and the Class A Limited Partners who hold more than 50% of the Percentage
Interests of the Class A Limited Partners and Class B Limited Partners who hold
more than 50% of the Percentage Interests of the Class B Limited Partners.
Notwithstanding the foregoing, no amendment to this Agreement shall cause a
Limited Partner to be treated as a general partner under the Act, without the
consent of the affected Limited Partner.
Section 11.05 Entire Agreement. This Agreement contains the entire
understanding among the parties and supersedes any prior understandings and
agreements between them respecting the subject matter hereof. There are no
representations, agreements, arrangements, or understandings, oral or written,
between or among the parties hereto relating to the subject matter of this
Agreement which are not fully expressed herein.
Section 11.06 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be
affected thereby but rather shall be enforced to the greatest extent permitted
by law.
Section 11.07 Counterparts. This Agreement may be executed in one or
more counterparts with the same effect as if all of the Partners had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.
20
Section 11.08 Construction. When from the context it appears
appropriate, each term stated either in the singular or the plural shall include
the singular and the plural and pronouns stated either in the masculine, the
feminine or the neuter shall include the masculine, the feminine and the neuter.
Section 11.09 Headings and Captions. The headings and captions
contained in this Agreement are inserted only as a matter of convenience and in
no way define, limit or extend the scope or intent of this Agreement or any
provisions hereof.
Section 11.10 No Waiver. The failure of any Partner to insist upon
strict performance of a covenant hereunder or of any obligation hereunder or to
exercise any right or remedy hereunder, regardless of how long such failure
shall continue, shall not be a waiver of such Partner's right to demand strict
compliance therewith in the future unless such waiver is in writing and signed
by the Partner giving the same.
Section 11.11 Other Business and Investment Ventures. Except as
otherwise provided in this Agreement or any other agreement to which a Partner
is a party, each Partner may engage in other business or investment ventures,
including business or investment ventures in competition with the Partnership,
and neither the Partnership nor the other Partners shall have any rights in such
business or investment ventures.
Section 11.12 Additional Instruments. Each Partner agrees to execute
and deliver such additional agreements, certificates, and other documents as may
be necessary or appropriate to carry out the intent and purposes of this
Agreement.
Section 11.13 Power of Attorney. Each Limited Partner, by the execution
of this Agreement, irrevocably constitutes and appoints the General Partner as
its true and lawful attorney-in- fact, with full power and authority in its
name, place and stead to execute, acknowledge, deliver, swear to, file and
record at the appropriate public offices such documents as may be necessary or
appropriate to carry out the provisions of this Agreement. The appointment by
each Limited Partner of the General Partner as attorney-in-fact shall be deemed
to be a power coupled with an interest, in recognition of the fact that each of
the Partners under this Agreement will be relying upon the powers of the General
Partner to act as contemplated by this Agreement, and any filing or any other
action on behalf of the Partnership shall survive the Bankruptcy or death of a
Limited Partner.
Section 11.14 Call and Put Option. The Partners acknowledge that the
Interests of the Class A Limited Partners are subject to a Call and Put Option
Agreement between UPREIT and the Class A Limited Partners dated as of the date
of this Agreement (the "Option Agreement"). The restrictions on Transfers
contained in Article 7 of this Agreement shall not apply to any Transfer of an
Interest pursuant to the Option Agreement.
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
GENERAL PARTNER:
PR New Castle LLC,
a Pennsylvania limited liability company
By: PREIT ASSOCIATES, L.P.,
a Delaware limited partnership
By: Pennsylvania Real Estate Investment Trust,
a Pennsylvania business trust,
its general partner
By: /s/ Bruce Goldman
-----------------------------------
Name: Bruce Goldman
Title: Senior Vice President and
General Counsel
CLASS A LIMITED PARTNERS:
PAN AMERICAN ASSOCIATES,
a Pennsylvania limited partnership
By: Pan American Office Investments, L.P.,
a Pennsylvania limited partnership,
its general partner
By: Pan American Office Investments-GP, Inc.,
a Pennsylvania corporation,
its general partner
By: /s/ George F. Rubin
------------------------------------
Name: George F. Rubin
Title: President
IVYRIDGE INVESTMENT CORP.,
a Delaware corporation
By: /s/ Arthur H. Kaplan
--------------------------------------------
Name: Arthur H. Kaplan
Title: President
CLASS B LIMITED PARTNERS
PREIT ASSOCIATES, L.P.,
a Delaware limited partnership
By: Pennsylvania Real Estate Investment Trust,
a Pennsylvania business trust,
its general partner
By: /s/ Bruce Goldman
---------------------------
Name: Bruce Goldman
Title: Senior Vice President and
General Counsel
New Castle Associates
Amended and Restated Agreement of Limited Partnership
Exhibit "A"
PARTNERS' PERCENTAGE INTERESTS AND NET EQUITY VALUES
----------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Partner Percentage Interest Net Equity Value
- --------------------------------------------------------------------------------------------------------------------
General Partner:
PR New Castle LLC, 0.1% $65,828
a Pennsylvania limited liability
company
- --------------------------------------------------------------------------------------------------------------------
Class A Limited Partners
- --------------------------------------------------------------------------------------------------------------------
Pan American Associates, 23.253% $15,307,115
a Pennsylvania limited partnership
- --------------------------------------------------------------------------------------------------------------------
Ivyridge Investment Corp., 3.853% $ 2,536,374
a Delaware corporation
- --------------------------------------------------------------------------------------------------------------------
Class B Limited Partners
- --------------------------------------------------------------------------------------------------------------------
PREIT Associates, L.P., 72.794% $47,919,242
a Delaware limited partnership
- --------------------------------------------------------------------------------------------------------------------
New Castle Associates
Amended and Restated Agreement of Limited Partnership
Exhibit "B"
DESCRIPTION OF PROPERTY
-----------------------
The Cherry Hill Mall in Cherry Hill, New Jersey. The legal description of the
underlying land is as follows:
CHERRY HILL MALL
ALL THAT CERTAIN tract of parcel of land situated in the Township of Cherry
Hill, County of Camden and the State of New Jersey, being more particularly
described as follows:
BEGINNING at a point of tangency in the southeasterly line of Stoy Landing Road
(a.k.a. Haddonfield Road, variable width), said point of tangency being at the
northeasterly end of a curve (140 feet radius) connecting said southeasterly
line with the northeasterly line of N.J. State Highway Route No. 38 (variable
width) as illustrated on a plan entitled "Survey of Property, Block 285A, Lots
2, 2C, 4 and 4A" prepared by Taylor, Wiseman and Taylor (Drawing No. 342-18049,
Sheet 1 of 7), dated September 18, 1990; and extends thence, along said
southeasterly line
(1) North 19 degrees 20 minutes 20 seconds East, 211.09 feet to an angle
point; thence still along same
(2) North 19 degrees 42 minutes 47 seconds East, 188.02 feet to an angle
point; thence, still along same
(3) North 20 degrees 59 minutes 30 seconds East, 21.08 feet to a point in the
line of Lot 3, Block 285A, being lands now or formerly of Strawbridge and
Clothier: thence along said Lot 3 the following thirteen courses
(4) South 87 degrees 21 minutes 40 seconds East, 317.86 feet to a point;
thence
(5) South 02 degrees 38 minutes 20 seconds West, 288.00 feet to a point;
thence
(6) South 87 degrees 21 minutes 40 seconds East, 218.00 feet to a point;
thence
(7) South 02 degrees 38 minutes 20 seconds West, 120.00 feet to a point;
thence
(8) South 87 degrees 21 minutes 40 seconds East, 158.00 feet to a point;
thence
(9) North 02 degrees 38 minutes 20 seconds East 120.00 feet to a point; thence
(10) South 87 degrees 21 minutes 40 seconds East, 130.17 feet to a point;
thence
(11) North 02 degrees 38 minutes 20 seconds East, 272.17 feet to a point;
thence
(12) North 87 degrees 21 minutes 40 seconds West, 130.17 feet to a point;
thence
(13) North 02 degrees 38 minutes 20 seconds East, 51.83 feet to a point; thence
(14) North 87 degrees 21 minutes 40 seconds West, 158.00 feet to a point;
thence
(15) South 02 degrees 38 minutes 20 seconds West, 16.00 feet to a point; thence
(16) North 87 degrees 21 minutes 40 seconds West, 529.22 feet to a point in the
aforementioned southeasterly line of Stoy Landing Road; thence, along said
southeasterly line the following five courses
(17) North 20 degrees 59 minutes 30 seconds East, 170.11 feet to an angle
point; thence
(18) North 18 degrees 56 minutes 40 seconds East, 153.16 feet to an angle
point; thence
(19) North 17 degrees 27 minutes 30 seconds East, 207.32 feet to an angle
point; thence
(20) North 16 degrees 28 minutes 49 seconds East, 14.57 feet to an angle point;
thence
(21) North 19 degrees 20 minutes 21 seconds East, 539.67 feet to a point in the
line of Lot 2B, Block 285A, being lands now or formerly of J.C. Penny
Company, Inc.; thence, along said Lot 2B the following seven courses
(22) South 70 degrees 39 minutes 40 seconds East, 195.80 feet to a point;
thence
(23) South 87 degrees 21 minutes 40 seconds East, 269.12 feet to a point;
thence
(24) South 02 degrees 38 minutes 20 seconds West, 85.00 feet to a point; thence
(25) South 87 degrees 21 minutes 40 seconds East, 543.50 feet to a point;
thence
(26) North 02 degrees 38 minutes 20 seconds East 591.82 feet to a point; thence
(27) North 56 degrees 36 minutes 55 seconds West 312.74 feet to a point; thence
(28) North 33 degrees 23 minutes 05 seconds East, 65.00 feet to a point in the
southwesterly line of Church Road (as measured 37.00 feet perpendicularly
from the original centerline); thence along said southwesterly line
(29) South 56 degrees 36 minutes 55 seconds East, 1,135.23 feet to a point in
the line of Lot 5, Block 285A, being lands now or formerly of Bambergers;
thence, along said Lot 5 the following eleven courses
-2-
(30) South 02 degrees 38 minutes 20 seconds West, 1,229.92 feet to a point;
thence
(31) North 87 degrees 21 minutes 40 seconds West, 122.83 feet to a point;
thence
(32) North 02 degrees 38 minutes 20 seconds East, 307.30 feet to a point;
thence
(33) North 87 degrees 21 minutes 40 seconds West, 289.33 feet to a point;
thence
(34) South 02 degrees 38 minutes 20 seconds West, 161.95 feet to a point;
thence
(35) North 87 degrees 21 minutes 40 seconds West, 0.29 feet to a point; thence
(36) South 02 degrees 38 minutes 20 seconds West, 302.50 feet to a point;
thence
(37) South 87 degrees 21 minutes 40 seconds East, 0.29 feet to a point; thence
(38) South 02 degrees 38 minutes 20 seconds West, 49.88 feet to a point; thence
(39) South 87 degrees 21 minutes 40 seconds East 412.16 feet to a point; thence
(40) South 02 degrees 38 minutes 20 seconds West, 146.90 feet to a point in the
southeasterly line of Cherry Hill Mall Drive (50 feet wide); thence; along
said southeasterly lien
(41) South 38 degrees 38 minutes 20 seconds West, 240.06 feet to a point in the
aforementioned northerly line of Route 38; thence, along said Route 38 the
following fourteen courses
(42) North 51 degrees 21 minutes 40 seconds West, 26.80 feet to a point; thence
(43) South 45 degrees 10 minutes 09 seconds West, 105.78 feet to an angle
point; thence
(44) South 38 degrees 38 minutes 20 seconds West, 57.82 feet to a point of
curvature; thence, along said curve to the left, having a radius of
1,048.00 feet
(45) Southwestwardly, an arc distance of 104.44 feet to a point of compound
curvature; thence, along said curve to the left having a radius of 25.00
feet
(46) Southwestwardly, an arc distance of 2.43 feet to a point of non-tangency;
thence
(47) South 05 degrees 53 minutes 31 seconds East 9.91 feet to a point; thence
(48) North 87 degrees 21 minutes 40 seconds West, 1,011.44 feet to a point;
thence
-3-
(49) North 27 degrees 22 minutes 07 seconds West, 30.31 feet to a point; thence
(50) North 87 degrees 21 minutes 40 seconds West 20.87 feet to a point; thence
(51) South 02 degrees 38 minutes 20 seconds West, 26.25 feet to a point; thence
(52) North 87 degrees 21 minutes 40 seconds West, 336.33 feet to a point of
curvature; thence along said curve to the right having a radius of 240.00
feet
(53) Northwestwardly, an arc distance of 171.74 feet to a point of tangency;
thence
(54) North 46 degrees 21 minutes 40 seconds West, 356.25 feet to a point of
curvature; thence, along said curve to the right having a radius of 140.00
feet
(55) Northwardly an arc distance of 160.54 feet to a point and the place of
Beginning.
Excepting thereout and therefrom the following described tract or parcel of land
known as Lot 6, Block 285A, being lands now or formerly of Cherry Hill One
Center, Inc.
BEGINNING at the northeasterly corner of said Lot 6, said corner being the
following three courses from a point in the southwesterly lien of Church Road
and the beginning point of Course 30 mentioned herein
(a) South 02 degrees 38 minutes 20 seconds West 369.23 feet to a point; thence
(b) North 87 degrees 21 minutes 40 seconds West, 684.84 feet to a point;
thence
(c) South 02 degrees 38 minutes 20 seconds West, 184.98 feet to the
northeasterly corner of Lot 6 and from said beginning point extends;
thence
(1) South 02 degrees 38 minutes 20 seconds West 162.50 feet to a point; thence
(2) North 87 degrees 21 minutes 40 seconds West, 209.50 feet to a point;
thence
(3) North 02 degrees 38 minutes 20 seconds East 162.50 feet to a point; thence
(4) South 87 degrees 21 minutes 40 seconds East 209.50 feet to a point and the
place of beginning.
Being shown and designated as Lots 2, 2C,4 & 4A Block 285A plate 30 on the
Current Tax Map of the Township of Cherry Hill.
Said above described tract of land subject to the various easements, setbacks,
restrictions and right of others shown on the above referenced plan.
-4-
New Castle Associates
Amended and Restated Agreement of Limited Partnership
Exhibit "C"
LEASING AND MANAGEMENT AGREEMENT
--------------------------------
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT made as of the _______ day
of ____________, 2003, between PREIT-RUBIN, INC., a Pennsylvania Corporation
having an address at The Bellevue, Suite 300, 200 South Broad Street,
Philadelphia, Pennsylvania 19102 (hereinafter referred to as the "Agent"), and
______________________________, a _______________________, having an address at
__________________________________________________________ (hereinafter referred
to as the ("Owner").
W I T N E S S E T H :
In consideration of the covenants herein contained, the parties hereto,
intending to be legally bound, covenant and agree as follows:
ARTICLE I
APPOINTMENT AND AUTHORITY OF THE AGENT
1.1 The Owner hereby appoints the Agent as the exclusive managing and leasing
agent for the above described property (the "Premises"), and hereby authorizes
the Agent to exercise such powers with respect to the Premises as may be
necessary for the performance of the Agent's obligations under Article II, and
the Agent accepts such appointment on the terms and conditions hereinafter set
forth for a term as provided in Article VII. Agent shall have no right or
authority, expressed or implied, to commit or otherwise obligate Owner in any
manner whatsoever except to the extent specifically provided in this Agreement.
Not later than forty-five (45) days prior to the effective date of this
Agreement, Owner shall deliver to Agent such information, documents and
certificates regarding the Premises as Agent shall reasonably request,
including, but not limited to the following:
(a) A current and complete rent roll.
(b) The current operating budget and capital budget for
the past and current calendar year.
(c) Income cash flow report and variances from budget for
prior and current calendar year.
(d) A current list of all employees, titles,
salaries/wages employed on site at the Premises.
(e) A current list of brokers actively engaged in leasing
the Premises.
(f) Copies of all existing lease documents.
(g) All leases currently in dispute or litigation.
(h) All files on any litigation and/or disputes regarding
any and all matters, including, but not limited to:
parts, equipment, furnishings, real property,
easements, taxes, third party contracts,
employer-employee relations, and the like.
(i) Legal descriptions of the Premises. .
(j) Mortgagees' names and addresses; lien holders, and
the like.
(k) Site plans and specs.
(l) An inventory of Owner's personal property on
Premises, all tools, equipment and supplies.
(m) List of vendors.
(n) All pertinent books and records relating to the
management, operation and leasing of the Premises.
(o) Third party contracts in force.
(p) List of security deposits held, on a tenant by tenant
basis.
Not later than the effective date of this agreement, Owner shall wire
transfer to the Bank Account (hereafter defined) sufficient working capital to
enable Agent to operate and maintain the Premises during the first thirty (30)
days. Within thirty (30) days after the effective date of this Agreement, Owner
shall deliver to Agent original executed copies of all existing leases and
operating agreements in effect with respect to the Premises. If requested by
Agent, Owner shall arrange for the present property manager to meet with Agent's
employees at the Premises or Agent's home office to review all of the above and
to assist Agent in connection with the transition of the management of the
Premises.
-2-
ARTICLE II
THE AGENT'S AGREEMENTS
2.1 The Agent, on behalf of the Owner, shall implement or cause to be
implemented the decisions of the Owner relating to the Premises and within the
scope of Agent's obligations as specified in this Agreement and shall conduct
the ordinary and usual business affairs of the Owner with respect to the
Premises solely as provided in this Agreement. The Agent agrees to use
reasonable efforts to:
(a) contract, for periods limited to the Owner's
possession of the Premises, but not in excess of one
year, (without Owners prior consent), in the name and
at the expense of the Owner, for gas, electricity,
water, and such other services as are being currently
furnished to the Premises. Service contracts shall be
written to include a thirty (30) day notice of
cancellation by the Owner wherever possible.
(b) at the expense of the Owner, select, employ, pay,
supervise, direct and discharge an on-site manager,
accountant and staff as well as all other employees
necessary for the operation and maintenance of the
Premises, in number and at initial wages not in
excess of those shown on Exhibit A attached hereto or
those required under any union contract then in
effect, plus Agent's standard fringe benefit package,
including bonus, to carry Workers' Compensation
Insurance (and, when required by law, compulsory
Non-Occupational Disability Insurance) covering such
employees, and to use reasonable care in the
selection and supervision of such employees. The
Agent shall be responsible for complying with all
laws and regulations and collective bargaining
agreements affecting such employment, and Agent shall
negotiate with labor unions lawfully entitled to
represent employees at the premises. The Agent will
be and will continue throughout the term of this
Agreement to be an Equal Opportunity Employer. All
persons employed in connection with the operation and
maintenance of the Premises shall be employees of the
Agent, Agent's affiliates or Agent's contractors, and
not of Owner. The Agent shall be reimbursed by the
Owner in amounts not exceeding those which are in
accordance with the approved budget for all expenses
properly incurred by it for compensation of all
employees necessary for the operation and maintenance
of the Premises, including, without limitation,
direct payroll, fringe benefits, including bonus,
employer's payroll taxes such as the employer's
contribution to FICA, unemployment compensation,
employer's contribution to any pension plan which is
identified by the Agent to the Owner (including,
without limitation, any withdrawal liability imposed
on the Agent as a result of this Agreement pursuant
to the Multi-Employer Pension Plan Amendments Act of
1980), the cost of employee benefits required by law,
workers compensation premiums, and any sums required
to be paid to such employees under collective
bargaining agreements made pursuant to the National
Labor Relations Act.
-3-
(c) make all ordinary repairs and replacements (except
those excluded by this Agreement), do all decorating
and landscaping, and purchase all supplies necessary
for the proper operation of the Premises and the
fulfillment of the Owner's obligations under the
leases affecting the Premises and compliance with all
governmental and insurance requirements; provided
that the Agent shall not make any purchase or do any
work, the cost of which shall exceed the amount set
forth in Exhibit B without obtaining, in each
instance, the prior consent of the Owner, except (i)
in circumstances which the Agent shall deem to
constitute an emergency requiring immediate action
for the protection of the Premises or of tenants or
other persons or to avoid the suspension of necessary
services or (ii) where the expense is authorized by
the approved budget. The Agent shall notify the Owner
of the necessity for, the nature of, and the cost of
any such emergency repairs or compliance. If Owner
shall require, Agent shall submit, for Owner's prior
written approval, a list of contractors and
subcontractors performing tenant work, repairs,
alterations or services at the Premises, under
Agent's direction.
It is understood that if the Agent is requested by Owner to undertake
the making or supervision of extensive repairs (such as re-roofing the Premises
or a major portion thereof), alterations, renovations or reconstruction of the
Premises or any part thereof that Owner shall pay Agent therefor pursuant to ss.
4.3 hereof and that such work is otherwise not required to be contracted for by
Agent. The Owner shall receive the benefit of all discounts and rebates obtained
by the Agent in its operation of the Premises.
If the Agent desires to contract for repair, construction, or any other
service described in this subsection (c) with a party with respect to which any
partner or shareholder of the Agent holds a beneficial interest, such interest
shall be disclosed to and approved by the Owner before such services are
procured. The cost of any such services shall likewise be at competitive rates
notwithstanding that tenants of the Premises may be required to pay such costs.
The Agent shall not employ any corporation or other entity in which the Agent
(or any subsidiary, affiliate, or related corporation) shall have a financial
interest for the purpose of making repairs and alterations or performing other
services to the Premises, unless such work is done at a tenant's request and at
tenant's sole expense (such work being hereinafter referred to as "Tenant
Work"). The Agent, or general contractor working under the supervision of the
Agent, is authorized to make and install such Tenant Work, and Agent may collect
from such tenant or such general contractor, for its sole account, its charge
for supervisory overhead on all such Tenant Work. The Agent shall hold the Owner
harmless from any and all claims which may be advanced by any such tenant in
connection with Tenant Work performed by the Agent or under the Agent's
supervision. The Agent, however, shall not require any tenant to use the Agent,
its subsidiaries, affiliates or related corporations or its general contractor
to perform such Tenant Work.
-4-
(d) handle promptly complaints and requests from tenants,
notify the Owner promptly (together with copies of
supporting documentation) of any notice of violation
of any governmental requirements, any material defect
in the Premises and any fire or other damage to the
Premises.
(e) notify the Owner's general liability insurance
carrier and the Owner promptly of any bodily or
personal injury or property damage occurring to or
claimed by any tenant or third party on or with
respect to the Premises and to forward promptly to
the carrier any summons, subpoena, or other like
legal document served upon the Agent relating to
actual or alleged potential liability of the Owner,
the Agent or the Premises.
(f) request from tenants any certificates of insurance
and renewals thereof required to be furnished by the
terms of leases, copies of which will be provided to
the Owner upon request.
(g) receive and collect rent and all other monies payable
to the Owner by all tenants and licensees in the
Premises and to deposit the same promptly in the bank
(the "Bank") named in Exhibit B in a bank account
(the "Bank Account") in the name of Agent, as Agent
for the Owner, which Bank Account shall be used
exclusively for such funds. In the event state law
requires tenant security deposits be held in a
separate account, such account shall be established
by the Agent as approved by the Owner.
The Owner or the Owner's designated representative will be a signatory
on the Bank Account, but need not co-sign each check.
(h) collect such rent and other charges from tenants in a
timely manner and to pursue Owner's legal remedies
for non-payment of same, including the termination of
leases for tenants in default by the institution of
legal action. Agent shall refer all such matters
requiring legal services to Agent's approved
attorneys listed on Exhibit B hereto or, at Agent's
option, have such legal work performed by Agent's
in-house attorneys or paralegals. The fees for all
such legal services shall be paid for by Owner,
including (i) negotiation of leases, including
department store leases and reciprocal easement
agreements; (ii) preparation and negotiations of
construction contracts for renovations of the
Premises; (iii) suits to enforce leases; (iv)
bankruptcy claims involving tenants; (v) negotiations
with labor unions; (vi) environmental matters and
(vii) any other legal action approved by Owner. With
respect to lease preparation and negotiation
performed by Agent's in-house attorneys or
paralegals, Owner shall reimburse Agent for the
salary, fringe benefits, allocable share of rent and
other office overhead, in an amount equal to Fifteen
Hundred ($1,500.00) Dollars for each lease so
prepared and negotiated, or such reasonable higher
charge as is justified because of the complexity of
the lease in question. For lease assignments, lease
amendments and lease surrenders, the reimbursement
shall be Five Hundred ($500.00) Dollars; and for all
other legal work performed by Agent's in-house
attorneys or paralegals, the amount of the
reimbursement shall be Two Hundred ($200.00) Dollars
per hour for Agent's in-house attorneys and
Seventy-Five ($75.00) Dollars per hour for all work
performed by Agent's in-house paralegals. Such
attorneys and paralegals shall keep time records
substantiating the hours charged and on request such
records may be inspected by Owner. Agent may deduct
the amount to be reimbursed from the Bank Account.
With respect to any litigation involving sums due
from tenants, Agent is authorized to compromise such
litigation without Owner's consent so long as such
compromise does not involve a forgiveness of sums due
by such tenant in excess of Fifteen Thousand
($15,000.00) Dollars.
-5-
(i) bond the Agent and all of the Agent's employees who
may handle or be responsible for monies or property
of the Owner with a "fidelity" bond, in the amount of
Two Hundred Thousand ($200,000.00) Dollars.
(j) notify the Owner immediately of any fire, accident or
other casualty, condemnation proceedings, rezoning or
other governmental order, or lawsuit or threat
thereof involving the Premises; and violations
relative to the leasing, use, repair and maintenance
of the Premises under governmental laws, rules,
regulations, ordinances or like provisions. The Agent
will not bear responsibility for non-compliance
unless such non-compliance is due to the negligence
of the Agent or its employees.
(k) check tax assessments and promptly furnish Owner with
copies of all assessment notices and receipted tax
bills and, if requested by Owner, Agent agrees to
retain an expert to bring an appeal at Owner's
expense before any taxing authority relative to the
Premises.
(l) subject to Owner's making funds available to do so,
cause the Premises to comply with all present and
future laws, ordinances, orders, rules, regulations
and requirements of all federal, state and local
governments, courts, departments, commissions, boards
and offices, any national or local Board of Fire
Underwriters or Insurance Services offices having
jurisdiction, or any other body exercising functions
similar to those of any of the foregoing which may be
applicable to the Premises or any part thereof or to
the leasing, use, repair, operation or management
thereof. Such compliance shall be undertaken in the
name of Owner, and be at Owner's expense. Agent shall
give prompt written notice to Owner of any violation
or notice of alleged violation of such laws and Agent
shall not bear responsibility for failure of the
Premises or the operation thereof to comply with such
laws unless Agent has committed gross negligence or a
willful act or omission in the performance of its
obligations under this Agreement.
-6-
2.2 The Agent agrees that on or before the twentieth (20th) day of each month to
render to Owner monthly cash basis reports itemized in reasonable detail
relating to the management and operation of the Premises for the preceding
calendar month. The names and address of the persons who shall receive said
reports are set forth in Exhibit B. Subject to the terms and provisions of this
Agreement, the Agent is authorized to pay all bills for the operation of the
Premises from the rentals and other income of the Premises, including the
Agent's fee and reimbursable items set forth in this Agreement, and the Agent
shall remit to the Owner the net receipts after such payments with such monthly
report. Prior to Owner's default or the termination of this Agreement the Owner
shall, at any time, have the right to require the transfer to the Owner of any
funds in the Bank Account considered by the Owner and Agent to be in excess of
an amount reasonably required by the Agent for disbursement purposes in
connection with the Premises. In the event Agent determines that there is not
sufficient funds in the Bank Account to pay when due all expenses of the
Premises and reimbursements due Agent, Owner shall, within five (5) days of
request, deposit into such account additional funds in the amount requested by
Agent. The Agent agrees to keep full and detailed records with respect to the
management and operation of the Premises and to retain those records for periods
specified by the Owner, not to exceed three (3) years after the year in
question. The Owner shall have the right to inspect such records and audit the
reports required by this Section during business hours for the life of this
Agreement, and at times mutually agreeable to Owner and Agent.
2.3 The Agent shall exercise reasonable diligence to exert such control over
accounting and financial transactions as is reasonably required to protect the
Owner's assets from loss or diminution due to error, negligence or willful
misconduct or wanton acts on the part of the Agent, its employees, agents or
contractors. Losses caused by failure to exercise reasonable diligence shall be
borne by Agent.
2.4 The Agent shall prepare and submit to the Owner a proposed operating and
capital budget for the promotion, operation, repair and maintenance of the
Premises for each calendar year. Preliminary and final budgets will be due
ninety (90) and sixty (60) days, respectively, prior to the end of each calendar
year. Such budgets shall be prepared on a cash basis showing a month by month
projection of income and expense and capital expenditures and shall be
accompanied by proposed leasing guidelines for the next ensuing calendar year
which shall contain a brief narrative description of the anticipated market, a
projection of cash flow for such year, listing expiring leases for the next
following year as well as project ranges of rental rates and terms for new or
renewal leases, estimates of concessions to tenants and of cost estimates of
alterations for space to be leased. The annual budget shall be deemed approved
unless Agent receives written notification of disapproval within thirty (30)
days after the date such budget was tendered to Owner for approval; Owner shall
have the right to disapprove line items in such budget or the entire budget. In
the event of a line item disapproval, all portions of the budget not disapproved
shall automatically be deemed approved. In the event of such disapproval of the
budget or any specific line items thereof, the parties will promptly meet and
resolve such differences and Agent will promptly thereafter resubmit a revised
budget to Owner who shall have an additional ten (10) days to approve or
disapprove the same and such procedure shall continue until the budget has been
approved. If Owner shall fail to disapprove the revised budget within ten (10)
days of receipt, the same shall be deemed approved. Agent is authorized for the
account of Owner to make any expenditures or to incur any obligations or
implement any items which are included in the approved annual budget without
further approval from owner being required. Such budgets and all other financial
reporting to be prepared by Agent shall be prepared using Agent's then standard
format and software. Agent shall not be obligated to use any other financial
format or software unless same is satisfactory to Agent, Owner purchases same
for Agent and Owner pays all of the training expenses for Agent's employees
relating to such software.
-7-
After approval of each such budget by the Owner, the Agent agrees to
use diligence and to employ all reasonable efforts so that the actual costs of
operating the Premises shall not exceed said approved budget by more than ten
(10%) percent per year without the Owner's approval. The Agent shall promptly
notify the Owner if the Agent reasonably anticipates any such line item
exceeding one hundred ten (110%) percent of the amount therefor in the approved
budget.
2.5 Agent agrees, for itself and all persons retained or employed by Agent in
performing its services, to hold in confidence and not to use or disclose to
others any confidential or proprietary information of Owner heretofore or
hereafter disclosed to Agent including, but not limited to, any data,
information, plans, programs, processes, costs, operations or tenants which may
come within the knowledge of Agent in the performance of or as a result of its
services, except where Owner specifically authorizes Agent to disclose any of
the foregoing to others or such disclosure reasonably results from the
performance of Agent's duties hereunder or is required to be disclosed pursuant
to litigation.
2.6 The Agent agrees to use its best efforts to have the Premises rented to
desirable tenants, satisfactory to the Owner considering the nature of the
Premises, and in connection therewith to negotiate business terms for relocation
and/or expansions, new leases and renewals of leases at appropriate times, it
being understood that all inquiries to the Owner with respect to leasing any
portion of the Premises shall be referred to the Agent. At least once per year
Owner and Agent shall meet and mutually develop a "leasing game plan" for the
ensuing calendar year which game plan shall specify projected vacancies,
projected rentals and other pertinent terms of new leases or lease renewals,
costs to be incurred in obtaining tenants and other relevant matters. Owner
hereby authorizes Agent to implement the approved leasing game plan and to
negotiate and execute leases in accordance therewith and confirms that any
leases so executed shall be deemed approved by Owner and Owner shall pay Agent
the leasing commission set forth in this Agreement with respect to each lease
executed by a tenant consistent with the leasing game plan. Agent is hereby
given the exclusive right to lease the Premises on behalf of Owner and Owner
shall pay to Agent the leasing commission set forth in Exhibit B regardless of
who may negotiate the same, including Owner. All leases and renewals shall be
prepared by the Agent on the Agent's form lease, and such leases shall either be
executed by Agent on behalf of Owner or, at Agent's option shall be executed by
the Owner. The Agent agrees it will observe the specific leasing guidelines, if
any, set forth in the approved budget or otherwise made known to the Agent in
writing by the Owner. In the event the Agent shall have a prospective tenant
reference from another property in the local market area where the Premises are
located in which the Agent has a beneficial interest or which the Agent manages,
the Agent shall declare its potential conflict of interest to the Owner, and the
Owner shall determine if negotiations shall be undertaken by the Agent, the
Owner, or a third party appointed by the Owner. References of prospective
tenants, as well as their varying use requirements, shall be investigated by the
Agent.
-8-
2.7 Anything in the Agreement to the contrary notwithstanding:
(a) Nothing in this Agreement shall require Agent to take
any action (and Agent will not be in default for
failure to take any action) to the extent and
wherever there is provided a limitation on Agent's
ability to expend funds or incur obligations with
respect to the Premises.
(b) Unless expressly provided, Agent shall not be
responsible or obligated to advance its own funds for
any purpose in the performance of Agent's duties
under this Agreement.
(c) Agent shall not be obligated to pay or perform any
liability or obligation or take any action under this
Agreement which is to be done at the expense of Owner
or for which Agent is entitled to reimbursement from
Owner unless funds for such purpose are available in
the Bank Account or have otherwise been made
available to Agent by Owner.
(d) Wherever Agent is obligated to use its "best efforts
or reasonable efforts" under this Agreement such term
is intended to signify and shall mean that Agent
shall exercise its professional skill and expertise
with diligence and in a commercially reasonable
manner and consistent with high quality practice for
the management of similar buildings located in the
geographic area in which the Premises are situate.
However, such a standard shall not impose additional
duties or obligations on Agent not set forth in this
Agreement, such as, by way of example, an obligation
to advance Agent's funds or to commence litigation
against third parties, or to take extraordinary
actions or to perform services not customarily
provided by managers of comparable buildings in the
local geographic area. Nothing in this Agreement
shall require Agent to perform the obligations of
others or exercise any efforts (other than reasonable
efforts) to cause them to perform such obligations.
-9-
(e) Everything done by Agent in the performance of its
obligations under this Agreement and all expenses
incurred pursuant hereto shall be for and on behalf
of Owner and for its account and at its expense.
Except as otherwise expressly provided herein, all
debts and liabilities incurred to third parties in
accordance with the annual budget and in the ordinary
course of business of managing the Premises are and
shall be obligations of Owner, and Agent shall not be
liable for any such obligations by reason of its
management, supervision or operation of the Premises
for Owner.
ARTICLE III
THE OWNER'S AGREEMENTS
3.1 The Owner, at its option, may pay directly all taxes, special assessments,
ground rents, insurance premiums and mortgage payments, in which event Owner
shall notify Agent of such.
3.2 The Owner shall carry (or cause to be carried) insurance upon the Premises
and shall look solely to such insurance for indemnity against any loss or damage
to the Premises except when caused by the willful act or omission or gross
negligence of the Agent or its employees, agents, contractors or subcontractors.
However, Agent shall not be liable to Owner for any loss or damage to the
Premises even if caused by the willful act or omission or gross negligence of
Agent or its employees, agents, contractors or subcontractors to the extent any
such loss or damage is covered or should have been covered by Owner's insurance.
To the extent any loss or damage to the Premises is covered or should have been
covered by Owner's insurance, Agent is released from liability therefor and
Owner waives its right of subrogation against Agent. The Owner shall purchase,
or have Agent purchase for Owner and at Owner's expense, and maintain policies
of commercial general liability insurance, including personal injury liability
and contractual liability, in an amount determined by Agent but, in any event
not less than $5,000,000.00 combined single limit for bodily injury and property
damage. Said policies shall name the Agent as an additional insured thereunder
and will be primary to any other available insurance. The Owner shall advise the
Agent as to the name and address of any insurance carriers for insurance placed
by Owner directly. If Owner desires Agent to purchase property damage or
liability insurance for the Premises, Owner shall pay Agent an annual fee
representing a pro rata share of the fee Agent pays to participate in its group
insurance coverage pool.
3.3 Owner agrees (a) to indemnify, hold and save Agent free and harmless from
any claim for damages or injuries to persons or property resulting from: (1)
Agent carrying out the provisions of this Agreement or acting under direction of
Owner, (2) Owner's failure or refusal to comply with or abide by any rule,
order, determination, ordinance or law of any federal, state or municipal
authority, (3) Owner's failure or refusal to comply with or abide by or perform
its obligations set forth in this Agreement, (4) any latent building defects or
other defect or dangerous condition which a visual inspection would fail to
disclose or any unsafe or dangerous condition or characteristic of the Premises
resulting from the design or initial construction of the Premises (including,
but not limited to, security systems, door locks, location of trash receptacles,
ingress & egress routes and recreational structures), (5) any defects,
conditions or situations with respect to the Premises which Agent has disclosed
to Owner and requested Owner's permission to correct or rectify, (6) the willful
misconduct or criminal activity of any third person or agency, except as to
Agent and its employees, agents and representatives with respect to the Premises
or (7) the negligent or willful acts of Owner or Owner's representatives,
officers, employees and agents; and (b) to defend promptly and diligently at
Owner's expense, any claim, action or proceeding against Agent and/or Agent and
Owner, jointly or severally, arising out of or connected with any of the
foregoing, and to hold harmless and fully indemnify Agent from any judgment,
loss or settlement on account thereof. The undertaking of Owner as set forth
above shall survive the expiration or earlier termination of this Agreement as
to all liabilities accruing during the term hereof.
-10-
3.4 If Owner requests Agent to perform certain designated additional management
services and the parties agree to the exact nature, scope and time frame for the
performance thereof, then Owner shall pay the Agent the agreed upon fee for
Agent's performance of such services, such payment to be made within twenty (20)
days after receipt of a bill therefor. Such payment shall be made in addition to
the fees and reasonable expenses otherwise stated herein. In performing any
specialized management services for Owner, Agent shall not be liable to Owner
for errors, accuracies, mistakes or the consequences thereof, relating to the
performance of such services provided Agent has performed the services in good
faith. Owner hereby waives, releases and discharges Agent from all errors,
inaccuracies, mistakes and the consequences thereof relating to the performance
of such services, except to the extent Agent has not performed such services in
good faith.
3.5 The Owner hereby irrevocably appoints Agent as the sole and exclusive broker
for any sale and/or re-financing of the Premises and agrees to pay Agent a fee
of one (1%) percent of the principal amount of any refinancing and a sales
commission of two (2%) percent of the gross sales price for the Premises, each
such fee to be paid at the closing involved. Such fee shall include Agent's fee
for any due diligence work required to accomplish such refinancing and/or sale.
3.6 Owner agrees to make available to Agent, free of charge, an on-site office
to be utilized in connection with Agent's leasing of the Premises. In addition,
Owner shall reimburse Agent monthly for all travel expenses, leasing and
marketing materials, demographic and marketing studies signage and advertising
incurred by Agent during the performance of its obligations under this
Agreement. Agent shall have the right to install signage on the Premises in
furtherance of its obligation to lease the Premises. Owner shall cause the
Premises to participate in Agent's wide area network data transmission system
and shall lease or purchase for the Premises any wiring, phone, computers,
routers or software upgrades that Agent deems necessary to access the system.
-11-
3.7 Agent has afforded Owner the benefit of Agent's blanket policy of workmen's
compensation insurance. Such policy provides that Agent is required to pay in
full, in advance, the annual premium for such policy. Owner shall reimburse
Agent, on demand, its share of such premium, such share being determined by the
actual payroll and rate classifications statutorily mandated in the state where
the Premises is located. Owner acknowledges that should this contract be
terminated during the policy year, there shall be no proration of Owner's
premium payment as between Owner and Agent unless or until Agent receives a
refund for the unused portion of such premium from the insurance carrier.
ARTICLE IV
MANAGEMENT AND OTHER FEES
4.1 As the management fee for the services performed pursuant to Article II, the
Owner agrees to pay the Agent at the rate specified in Exhibit B and Exhibit C.
Said fee shall be payable monthly, in arrears, on the first (1st) day of each
calendar month. Agent shall withdraw said fee and all of its reimbursable
expenses from the Bank Account for the Premises and shall account for same as
provided for in Section 2.2 hereof.
4.2 With respect to any space occupied by the Owner, the Agent shall be entitled
to no leasing commissions but shall be entitled to a management fee as though
the Owner were paying rent at the average square foot rental rate being paid for
comparable space in the Premises.
4.3 If Owner requests Agent to perform supervisory or administrative services
with respect to any renovation, expansion, tenant fit-out work or other repair
or construction project at the Premises which would involve "hard" costs in
excess of One Hundred Thousand ($100,000.00) Dollars, Owner shall pay Agent a
construction management fee equal to five (5%) percent of the "hard" costs of
such work, such fee to be paid in three equal installments, one-third upon the
commencement of such work, the second third upon fifty (50%) percent completion
and a final payment upon substantial completion of the project. In addition, and
whether or not Agent is paid the above specified supervisory fee, Owner shall
reimburse Agent for the reasonable fees and disbursements of any architect,
engineer, on-site manager and/or on-site job accountant engaged to monitor or
perform any portion of such work.
4.4 Owner shall pay Agent Five Hundred ($500.00) Dollars to review the plans and
specifications prepared by each tenant doing alterations or renovations to its
space, to verify that such plans are acceptable to landlord and consistent with
any landlord design criteria applicable to the Premises. In the event Agent
utilizes Agent's own in-house architect or engineer in lieu of retaining the
services of an independent architect or engineer, the amount of such
reimbursement shall be based upon the approximate hourly wage and other benefits
paid by Agent to such architect or engineer.
-12-
4.5 Owner shall pay Agent for implementing a year round program of short term
specialty retail leasing, including Christmas kiosks, carts, in line temporary
space and special events, twenty-five (25%) percent of the gross annual income
collected by Agent with respect to the leasing of such specialty retail units.
Such amount may be deducted by Agent from Owner's operating funds on a monthly
basis, as earned. Owner acknowledges that Agent will allocate to the marketing
fund/merchant's association, as applicable, certain costs of Agent's marketing
program maintained from Agent's home office. Such charge shall not be billed to
Owner but rather to such fund in an amount which will reasonably allocate to the
Premises its proportionate share of the cost involved in maintaining Agent's
home office marketing operation applicable to the Premises and similar
properties managed by Agent for others.
4.6 Owner authorizes Agent to institute a satellite communication marketing
program for the Premises and if such program is successful, Owner shall pay
Agent twenty (20%) percent of the income generated therefrom during the term of
each such contract, payable in full upon the date Owner receives its first
payments for each such contract executed.
ARTICLE V
LEASING COMMISSION
5.1 As leasing commissions for (a) all leases, expansions and renewals executed
and (b) with respect to a person or entity procured by Agent that is ready,
willing and able to lease upon the terms set forth in the leasing game plan,
during the term of this Agreement, which, for purposes of calculating Owner's
obligation for leasing commissions will include the six (6) month period set
forth below , the Owner agrees to pay the Agent at the rate specified in Exhibit
B. Commissions will be based on base rents including CPI inflators payable to
Owner, percentage rent and all additional rental payable by the tenant. When
leases are negotiated by third party broker, the Agent shall cooperate with such
brokers. The Owner shall pay the commission due any such third party broker so
long as the Owner has approved in advance the use of such broker and the
commission to be paid such broker and such payment shall not reduce the fees
provided herein payable to Agent. The leasing commission will be paid to Agent
if within a period of six (6) months after the expiration of the term of this
Agreement Owner leases all or any portion of the Premises, irrespective of the
terms of such lease, to any prospect introduced to the Premises by Agent prior
to the expiration of the term, provided that Agent shall have informed Owner in
writing of the name of the prospect within thirty (30) days after the expiration
of the term hereof. With respect to all such pending leases, Agent is authorized
by Owner to continue negotiations and documentation on all such deals. In
addition, in the event Owner sells the Premises, at the time of such sale Owner
shall pay Agent the leasing commission due for any lease approved by Owner and
submitted to the tenant even if such lease is then unsigned.
-13-
ARTICLE VI
AGENT'S EXPENSES
6.1 Except to the extent approved in the annual budget or otherwise provided
herein, the following expenses or costs incurred by or on behalf of the Agent in
connection with the management of the Premises shall be the sole cost and
expense of the Agent and shall not be reimbursable by the Owner:
(a) Cost of gross salary and wages, payroll taxes,
insurance, worker's compensation, pension benefits,
and any other benefits of the Agent's home office or
regional home office personnel, except for those
costs specifically identified in Exhibit C.
(b) General agency bookkeeping accounting and reporting
services as such services are considered to be within
the reasonable scope of the Agent's responsibility to
the Owner, except for those costs specifically
identified in Exhibit C.
(c) Cost of forms, stationery, ledgers, and other
supplies and equipment used in the Agent's home
office or regional home office.
(d) Cost of all incentive compensation, profit sharing or
any pay advances by the Agent to the Agent's
employees.
(e) Cost of automobile purchase and/or rental, except if
furnished by the Owner.
(f) Cost attributable to losses arising from criminal
acts or fraud on the part of the Agent's associates
or employees.
(g) Cost of comprehensive crime insurance purchased by
the Agent for its own account.
ARTICLE VII
DURATION, TERMINATION, DEFAULT
7.1 This Agreement shall become effective on the date specified in Exhibit B and
shall be for the term therein specified and shall continue thereafter from month
to month until terminated by at least thirty (30) days prior written notice.
7.2 In the event a party hereto (the "Defaulting Party") (a) materially defaults
in the performance of its obligations under this Agreement and such default
remains uncured for more than twenty (20) days' after such party's receipt of
written notice from the other party hereto, except for defaults not susceptible
to cure within twenty (20) days, provided as to such defaults the Defaulting
Party commences to cure within such twenty (20) day period and diligently
prosecutes each cure; or (b) makes an assignment for the benefit of creditors;
or (c) has appointed a receiver, liquidator or trustee of its property; or (d)
is adjudicated to be a bankrupt or insolvent; or (e) has filed by or against it
any petition for the bankruptcy, reorganization or arrangement of the Defaulting
Party or, if such appointment, adjudication or petition be involuntary and not
consented to by the Defaulting Party and fails to proceed diligently to have the
same discharged or dismissed, then the other party hereto may forthwith
terminate this Agreement upon giving ten (10) days' written notice to the
Defaulting Party.
-14-
7.3 This Agreement shall terminate at the election of the Owner upon thirty (30)
days' written notice to the Agent if the Premises are sold by the Owner to a
non-affiliated third party purchaser or automatically if the Premises were
acquired by the owner on foreclosure of a mortgage and are subsequently
redeemed. In the event the Premises are sold by the Owner to a non-affiliated
third party purchaser and this Agreement is not thereby terminated by the Owner,
the Agent shall have the right to terminate this Agreement upon sixty (60) days
prior written notice. The Term "non-affiliate" as used herein shall mean any
entity which is not an "affiliate" as such term is defined in Section 8.1
hereof. Upon termination of this Agreement for any reason, the Agent shall
deliver the following to the Owner or the Owner's duly appointed agent on or
before thirty (30) days following the termination date:
(a) A final accounting, reflecting the balance of income
and expense for the Premises as of the date of
termination;
(b) Any balance or monies due to the Owner or tenant
security deposits, or both, held by the Agent with
respect to the Premises except for reasonable amounts
to pay for services already provided; and
(c) All records, contracts, drawings, leases,
correspondence, receipts for deposits, unpaid bills,
summary of all leases in existence at the time of
termination, and all other papers or documents which
pertain to the Premises. Such data and information
and all such documents shall, at all times, be the
property of the Owner.
7.4 Notwithstanding termination of this Agreement by the Owner, the Owner shall
reimburse the Agent within thirty (30) days after receipt of documents from the
Agent supporting such expenses, for all sums as may be necessary to satisfy
known obligations which the Agent has incurred for the Owner's accounts as
authorized under this Agreement, including all severance payments relating to
employees at the Premises who are not retained by Owner. In addition, after any
termination by the Owner, the Owner and the Agent will as promptly as possible
settle any outstanding balances with each other and render final accounts as to
any items overlooked or treated incorrectly in any previous settlement,
accounting or remittance. Upon any termination of this Agreement, Agent shall
assign to Owner or Owner's nominee all service, supply and other contracts and
agreements pertaining to the Premises entered into by Agent in accordance with
this Agreement and thereupon Owner shall be fully responsible and liable for the
performance of all obligations of Agent under all such contracts and agreements
occurring after the date of such assignment and Agent shall have no further
responsibility or liability with respect thereto. Owner shall indemnify and hold
Agent harmless with respect to all such contracts. Any termination permitted
hereunder shall not prejudice Agent's right to receive amounts to which Agent is
entitled hereunder on account of services rendered by Agent prior to said
termination.
-15-
7.5 The parties agree that it is not within the intention of the Agreement that
the Agent be required to advance its own funds to assist with the maintenance or
operation of the Premises or, except as provided in Paragraph 6.1 hereof, to
compensate personnel employed by the Agent hereunder. Nevertheless, if the Agent
does in good faith advance its own funds for purposes authorized herein or for
emergency repairs, the Owner shall promptly reimburse the Agent without interest
upon receipt of proper documentation.
7.6 In the event Owner sells the Premises to a nonaffiliated third party and
simultaneously elects to cancel this Agreement in accordance with Section 7.3
hereof, together with such notice of termination the Owner shall pay to Agent
the following sums as and for a cancellation fee:
(a) In the event such termination is effective during the
first twenty-four (24) months of the term of this
Agreement, Owner shall pay Agent the sum of [ ];
(b) In the event such termination is effective after the
twenty-fourth (24th) month in the term of this
Agreement, Owner shall pay the Agent the sum of [ ].
ARTICLE VIII
ASSIGNMENT
8.1 This Agreement shall be unassignable by Agent (except that without Owner's
consent Agent may assign this Agreement to a parent, successor by merger,
subsidiary or affiliate of Agent) and can be changed only by a writing signed by
both parties. As used herein, the terms "subsidiary" or "affiliate" shall mean a
corporation which directly or indirectly controls or is controlled by Agent. For
this purpose "control" shall mean the possession, directly or indirectly, of the
power to direct the management policies of such corporation, whether through the
ownership of voting rights or by contract or otherwise.
ARTICLE IX
MISCELLANEOUS
9.1 The Owner's Representative ("Owner's Representative") whose name and address
are set forth on Exhibit B shall be the duly authorized representative of the
Owner for the purpose of this Agreement. Any statement, notice, recommendation,
request, demand, consent or approval under this Agreement shall be in writing
and shall be deemed given (a) by the Owner when made by the Owner's
Representative and delivered personally to the Agent, if an individual, or to an
officer of the Agent, if a corporation, or when mailed, addressed to the Agent,
at the address set forth above, and (b) by the Agent when delivered personally
to or when mailed addressed to the Owner's Representative at the address set
forth in Exhibit B. Either party may, by written notice, designate a different
address.
-16-
9.2 The Agent shall, at its own expense, qualify to do business and obtain and
maintain such licenses, directly in its name or through affiliation with other
licensed persons or entities, as may be required for the performance by the
Agent of its services.
9.3 Each provision of this Agreement is intended to be severable. If any term or
provision hereof shall be determined by a court of competent jurisdiction to be
illegal or invalid for any reason whatsoever, such provision shall be severed
from this Agreement and shall not affect the validity of the remainder of this
Agreement.
9.4 In the event one of the parties hereto shall institute an action or
proceeding against the other party relating to this Agreement, the unsuccessful
party in such action or proceeding shall reimburse the successful party for its
disbursements incurred in connection therewith and for its reasonable attorney's
fees.
9.5 No consent or waiver, expressed or implied, by either party hereto of any
breach or default by the other party in the performance by the other of its
obligations hereunder shall be valid unless in writing, and no such consent or
waiver shall be deemed or construed to be a consent or waiver to or of any other
breach or default in the performance by such other party of the same or any
other obligation of such party hereunder. Failure on the part of either party to
complain of any act or failure to act of the other party or to declare the other
party in default, irrespective of how long such failure continues, shall not
constitute a waiver by such party of its rights hereunder. The granting of any
consent or approval in any one instance by or on behalf of Owner shall not be
construed to waive or limit the need for such consent in any subsequent
instance.
9.6 The venue of any action or proceeding brought by either party against the
other arising out of this Agreement shall, to the extent legally permissible, be
in a court of competent jurisdiction in the Commonwealth of Pennsylvania.
9.7 This Agreement shall be construed and interpreted under and pursuant to the
laws of the Commonwealth of Pennsylvania.
9.8 Notwithstanding anything to the contrary contained herein, the parties
acknowledge that it is not within the contemplation of this Agreement or the
basic management fee set forth in ss. 4.1 herein that the Agent perform any
services with respect to the following: re-zoning of the Premises, site
acquisition of additional ground for the expansion of the Premises;
reconstruction after casualty or condemnation; leasing, management, financing or
construction relating to any proposed or implemented expansion of the Premises
or work generally classified as "development" work in connection with the same;
any due diligence work and/or preparation of estoppel certificates; removal of
asbestos or other hazardous material or above or underground storage tanks from
the Premises or supervising such work unless same have been installed by Agent
or its employees or contractors; preparation of Owner's tax returns or audited
financial statements or preparation of multi-year financial projections;
bringing or assisting in any real estate tax appeals or abatement proceedings.
-17-
9.9 This Agreement shall not be construed as creating a partnership or joint
venture between the parties. This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
OWNER:
BY:
-------------------------------------------------
Partner
AGENT:
PREIT-RUBIN, INC.
BY:
-------------------------------------------------
President
-18-
EXHIBIT A to Management and Leasing Agreement
Premises:
SCHEDULE
--------
(By Job Category and Wages)
Number of Maximum Fringe List of Number
Job Title Employees Wage/wk* Benefits Hrs./Wk
- --------- ---------- --------- -------- -------------
As specified in the current years' approved budget.
*The wages listed will be in effect for the current year, after which the Agent
may grant increases consistent with Agent's standard wage review policy.
EXHIBIT B to Management and Leasing Agreement
Premises:
1. Term: Ten (10) years, plus for purposes of determining Owner's
obligation for leasing commissions, the Term will include the six (6)
month period set forth in ss. 5.1.
Effective date:_____________________________
2. Name and Address of Owner's Representative:
_______________________________
_______________________________
_______________________________
3. Limit of amount authorized for non-emergency purchases and repairs:
$ 5,000.00
4. Name of Bank:
_______________________________
_______________________________
_______________________________
5. Description of Bank Account:
PREIT-RUBIN, Inc., Agent for Owner
6. Management Fee:
5.25% of gross cash income and receipts during the applicable period
received by Owner from the ownership and operation of the Premises
including, without limitation, all payments of rent of any kind
including minimum rent, percentage rent, utility income, expense
reimbursement, license or concession payments, miscellaneous income and
any payments under any other revenue producing contracts for the use,
occupation or other utilization of space in the Premises and insurance
proceeds received by Owner in lieu of any or all of the foregoing,
excluding security deposits, unless and until applied as rent.
7. Rate of leasing commissions, if any
Not applicable.
8. Owner's Approved Counsel: Blank Rome LLP, Philadelphia, Pennsylvania
EXHIBIT C to Management and Leasing Agreement
Agent shall charge and Owner shall pay monthly, in arrears, the following in
addition to the management fee as described in Article IV:
1. Payroll Administration - Agent shall charge Owner a portion of
its cost of payroll administration expenses, including salary,
employer share of payroll taxes, employer cost of fringe
benefit programs, approved employee expenses, as well as data
processing costs and administration of benefit plans. The
total costs of Agent will be allocated to Owner based on a
ratio the numerator of which shall be the number of employees
of Agent directly involved with Owner's property divided by
total number of home office employees of Agent.
2. Risk Management - Agent shall charge Owner, in addition to
premiums allocated to Owner's property for specific insurance
coverage and a proportionate share of Agent's fees to third
party insurance brokers or consultants who provide the overall
insurance package to Agent the reasonable cost of managing the
insurance program of the Premises, including a proportionate
share of the salary, employer share of payroll taxes, employer
cost of fringe benefit programs and employee expenses of
Agent's risk management department.
3. Group and Regional Property Manager - Agent shall charge Owner
for its reasonable share of the salary bonus, employer share
of payroll taxes, employer cost of fringe benefits paid to
Agent's Group and/or Regional Property Manager and approved
employee expenses, it being understood that such property
manager has responsibility to supervise and direct the
operation of the on-site Property Manager.
4. ICSC Convention and Periodic Property Management Meetings -
Agent shall represent Owner and the Premises at all ICSC
functions attended by Agent for other similar properties and
Owner shall reimburse Agent for Owner's reasonable allocation
of the expenses of participating in such functions, including
travel, meals, brochures and other like expenses. In addition,
Owner shall reimburse Agent for the cost involved in having
the on-site property management staff participate in Agent's
periodic management meetings.