REAL ESTATE MANAGEMENT AND LEASING AGREEMENT
Premises: THE BELLEVUE, 200 SOUTH BROAD STREET
PHILADELPHIA, PA 19102
REAL ESTATE MANAGEMENT AND LEASING AGREEMENT made as of the
1st day of August, 1996 between THE RUBIN ORGANIZATION, 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 BELLEVUE ASSOCIATES, a limited partnership, having an address at
200 South Broad Street, Suite 300, Philadelphia, PA 19102 (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 excluding the hotel portion thereof (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.
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, 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,
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 sum required to be paid to such
employees under collective bargaining agreements made pursuant
to the National Labor Relations Act.
(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 or the fulfillment of the
Owner's obligations under the lease 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 of 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 thereon 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.
(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 on 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
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.
(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
"comprehensive 3-D" or "Commercial Blanket" 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 negligence or a willful act or
omission in the performance of its obligations under this
Agreement.
2.2 The Agent agrees that on or before the 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 addresses 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 one
hundred twenty (120) and seventy-five (75) 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.
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 materially exceed said approved budget without
the Owner's approval. The Agent shall promptly notify the Owner if the Agent
reasonably anticipates any such line item materially exceeding 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 parry appointed by the Owner. References of prospective
tenants, as well as their varying use requirements, shall be investigated by the
Agent.
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 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" 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, a "best efforts" 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.
(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.
(f) Nothing contained in this Agreement shall require Agent to
operate or maintain the hotel portion of the Premises.
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 wilful act or omission or 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 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 comprehensive 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. 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 defects, conditions or
situations with respect to the Premises which Agent has disclosed to Owner and
requested Owner's permission to correct or rectify, (5) 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 (6) 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.
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, inaccuracies, 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 three (3%) 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.
Notwithstanding the foregoing, Agent shall not be entitled to any fee with
respect to the initial refinancing of the presently existing Bankers' Trust
mortgage or the presently existing first mortgage lien applicable to the garage.
With respect to Agent's acting as the sole and exclusive broker for any sale of
the Premises, if the Premises have not been placed under an acceptable agreement
of sale within one hundred eighty (180) days after Agent is authorized to sell
the same, such exclusive agency agreement shall terminate and thereafter Owner
shall have the right to retain other brokers to sell the Premises.
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.
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 two (2%) 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.
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.
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
payment for each such contract executed.
ARTICLE V
LEASING COMMISSION
5.1 As leasing commissions for all leases, expansions and renewals executed
during the term of this Agreement and during the six (6) month period set forth
below thereafter, 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. In the event a tenant fails to take possession and pay rent, Agent will
refund to Owner any commission received. When leases are negotiated by an
outside broker, the Agent shall cooperate with such brokers. 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.
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 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) defaults in the
performance of its obligations under this Agreement after twenty (20) days'
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 has
commenced 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.
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 ether 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.
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.
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, with a
subsidiary or affiliated entity, 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.
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: site acquisition of additional ground
for the expansion of the Premises; reconstruction after casualty or
condemnation; leasing, management, or construction relating to any proposed or
implemented expansion of the Premises or work generally classified as
"development" work in connection with the same; 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.
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:
BELLEVUE ASSOCIATES, a
Pennsylvania limited partnership
By: Bellevue, Inc., general partner
By: /s/ George F. Rubin
---------------------------------
Title:
------------------------------
AGENT:
THE RUBIN ORGANIZATION, INC.
By: /s/ George F. Rubin
---------------------------------
President
EXHIBIT A
PREMISES: THE BELLEVUE
SCHEDULE
(By Job Category and Wages)
Number of Maximum List of Number
Job Title Employees Wage/Wk* Fringe 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
PREMISES: THE BELLEVUE
1. Term: Five (5) years
Effective date: August 1, 1996
Expiration date: July 31, 2001
2. Name and Address of Owner's Representative:
George Rubin
The Bellevue
Suite 300, 200 South Broad Street
Philadelphia, PA 19102
3. Limit of amount authorized for non-emergency purchases and repairs:
$10,000.00
4. Name of Bank:
PNC/MidLantic
5. Description of Bank Account: The Rubin Organization, Inc., Agent for
Bellevue Associates
6. Management Fee:
2% 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
A. Where the lease is negotiated directly by the Agent, a
commission equal to five (5%) percent of the first year's
rent, four (4%) percent of the second year's rent, three (3%)
percent of the third year's rent and two (2%) percent of the
rent payable in each year thereafter, shall be payable as a
leasing commission to Agent. Such payment shall be paid
twenty-five (25%) percent at the time of lease execution and
seventy-five (75%) percent upon occupancy by the tenant.
B. Agent may use the services of an outside broker provided that
Owner has approved the commission to be paid to such broker.
Owner shall pay all leasing fees and charges to the outside
broker and shall also pay Agent an override commission equal
to fifty (50%) percent of the leasing commission which Agent
would have received in accordance with A above, had such lease
been obtained directly by Agent, but in no event shall Agent's
fee for such lease exceed two (2%) percent of the
commissionable rent.
C. As used in this section, rent shall include minimum rent,
percentage rent and all additional rent payable by the tenant
in question. There shall be a minimum leasing commission
payable to Agent of Two Thousand ($2,000.00) Dollars per
lease.
8. Owner's Approved Counsel: Blank, Rome, Comisky & McCauley
EXHIBIT C
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 Jones Lang Wootton, 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
proportionate share of the salary, 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. The proportionate share
shall be based upon a ratio the numerator of which shall be the
leasable area of the Premises and the denominator shall be the total
leasable area of all buildings that the Group and Regional Property
Manager directly supervises.
4. General Accounting - Agent shall charge Owner the reasonable cost of
preparing federal, state and local tax returns of the Owner including
the cost of Agent's in house employees, employer's share of payroll
taxes and fringe benefits.