MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (this "AGREEMENT") is entered into
as of February 1, 2003, by and between 345 W. 37TH CORP., a New York
corporation, having an office at 341-345 West 37th Street, New York, New York
10018 ("OWNER"), and G-III LEATHER FASHIONS INC., a New York corporation, having
an office at 512 Seventh Avenue, New York, New York 10018 ("MANAGER").
W I T N E S S E T H:
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WHEREAS, Owner holds fee title to certain real property and
improvements located thereon having the address 341-345 West 37th Street, New
York, New York ("PROPERTY"); and
WHEREAS, Manager is a tenant of the Property and possesses the
personnel, skill and experience necessary for the efficient management of the
Property; and
WHEREAS, Owner desires to retain Manager to manage the Property, and
Manager desires to render such management services to Owner, all upon the terms
and conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Owner and Manager hereby agree as follows:
ARTICLE I.
APPOINTMENT; TERM
1.1 APPOINTMENT OF MANAGER. Owner hereby appoints Manager to manage the
Property upon the terms and conditions herein set forth. Manager hereby accepts
such appointment, on the terms and conditions herein set forth, and agrees to
perform the services herein provided.
1.2 TERM. The term of this Agreement shall commence February 1, 2003,
and unless sooner terminated as hereinafter provided, shall continue through
January 31, 2006.
1.3 RIGHT TO TERMINATE. Either party hereto may terminate the term of
this Agreement, without cause, upon sixty (60) days prior written notice to the
other party hereto, provided that such termination shall be effective only on
the last day of a calendar month. Owner may terminate the term of this Agreement
upon ten (10) days prior written notice to Manager in the event Manager defaults
in the performance of any of its obligations hereunder. Upon termination of the
term of this Agreement, Manager shall be entitled to its Management Fee (as that
term is hereinafter defined) through the effective date of such termination,
provided that Manager shall deliver to Owner all materials, supplies, keys,
contracts, insurance policies, accounting records or other documentation
pertaining to its services hereunder and/or the Property and shall otherwise
fully cooperate with Owner in connection with Manager's winding up performance
of its services hereunder.
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ARTICLE II.
DUTIES OF MANAGER
2.1 PERFORMANCE OF DUTIES. Manager shall manage, maintain and service
the Property in a diligent and careful manner consistent with reasonable
guidelines submitted by Owner to Manager from time to time during the term of
this Agreement.
2.2 GENERAL. In order to facilitate the efficient operation of the
Property, Manager shall inform itself with respect to the layout, construction,
character and operation of the electrical, lighting, heating, air-conditioning,
plumbing and ventilating systems, as well as elevators and all other mechanical
and electrical equipment and systems located at the Property.
2.3 REPAIRS AND MAINTENANCE. Manager shall maintain the Property or
cause the Property to be maintained, at Owners expense, in an attractive, clean
and sanitary condition, a good state of repair and otherwise in accordance with
the standards specified in the first sentence of Section 2.1 hereof. Such
maintenance shall include cleaning, rubbish removal, normal, recurring repairs,
replacements and maintenance, including, but not limited to exterior grounds,
repairs to improvements, maintenance of mechanical systems and equipment, and
such other normal repair, replacement and maintenance work as may be reasonably
advisable or necessary as determined by Owner from time to time. Manager shall
have the right to cause one or more of its employees to perform the services of
superintendent of the Property and to charge Owner that portion of the cost of
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the wages and benefits of such employee(s) that is reasonably allocable to time
spent by such employee(s) in performing such services on behalf of Owner.
2.4 PURCHASE OF SUPPLIES AND MATERIAL. Manager shall purchase, on
behalf of Owner and at Owners expense, all equipment, tools, appliances,
materials and supplies reasonably necessary or desirable for the care,
maintenance and operation of the Property. All such purchases shall be subject
to the prior review and approval of Owner. Such purchases shall be used solely
in connection with the operation and maintenance of the Property. Manager shall
maintain records for all equipment, tools, appliances, materials and supplies
purchased hereunder by Manager for use in the care, maintenance and operation of
the Property. Such records shall be stored at the Property and shall be the
property of Owner.
2.5 LEASING. Manager shall assist Owner in leasing the Property under
and pursuant to such forms of lease and on such terms and conditions as Owner
may deem appropriate from time to time. Although Manager shall not receive any
leasing commissions in connection with its services pursuant to this Section
2.5, the parties hereto understand and agree that Manager may determine, from
time to time, that it is necessary or desirable to pay leasing commissions to
outside brokers in order to fully and properly lease the Property. In such
instances, Manager shall consult with Owner as to the payment of such
commissions prior to incurring liability therefor.
2.6 COLLECTION. Manager shall use commercially reasonable efforts to
collect rents and other charges payable by tenants of the Property. Manager may,
with the prior written approval of Owner, in the name of and at the expense of
Owner, retain legal counsel selected by Owner to
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institute legal actions or proceedings (i) for the collection of rent or other
charges payable by tenants, (ii) for the ouster or eviction of tenants or other
persons/entities from the Property, or (iii) in order to otherwise preserve and
protect Owner's rights against tenants or other persons/entities with respect to
the Property.
2.7 ACCOUNTS. Manager shall render detailed quarterly statements of
receipts and disbursements with respect to the operation of the Property. Such
statements shall reflect cash basis accounting, be maintained in accordance with
generally accepted accounting principles, consistently applied, list all
accounts payable and accounts receivable (including rents from tenants of the
Property) thirty (30) or more days past due and break down expenses and charges
into major categories. Manager shall consult with Owner, from time to time, or
as requested by Owner, concerning the amount necessary to be allocated for
operating and/or capital improvement reserves. Upon Owner's request, Manager
shall render to Owner evidence of all receipts and disbursements concerning the
Property. Owner shall have the right of inspection of all books, records and
accounts respecting the Property at all reasonable times upon reasonable notice.
2.8 INSURANCE. Manager shall obtain, from Owner's funds if Owner shall
direct Manager so to do, policies of insurance covering such perils and in such
amounts as may be required by Owner. Manager shall deliver the originals of any
such policies of insurance, together with any required endorsements, directly to
Owner (subject to requirements of any mortgage which is a lien on the Property).
Manager and Owner shall cooperate in the making and delivering of all reports,
notices and other items required in connection with any such policies of
insurance.
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2.9 COMPLIANCE WITH LAWS. Manager shall use good faith efforts to
manage the Property in compliance with all laws and regulations of any federal,
state, county or municipal authority having jurisdiction over the Property and
as required pursuant to the terms and provisions of any mortgage encumbering all
or a portion of the Property. Manager shall at all times during the term of this
Agreement maintain in full force and effect all such licenses, permits, consents
and authorizations as may be necessary for the operation of the Property and as
are required for any of the various services to be performed by Manager
hereunder and cooperate with Owner to ensure Owner's compliance with its
obligations under all mortgages encumbering all or a portion of the Property.
2.10 TAXES AND ASSESSMENTS. At least once each year during the term of
this Agreement, Manager shall review and report to Owner on all real estate and
personal property taxes and assessments affecting the Property. If Owner
requests, Manager shall, on behalf of Owner and at Owner's expense, commence and
diligently prosecute, or cause to be commenced and prosecuted, appropriate
proceedings to contest such taxes or assessments.
2.11 TENANT COMPLAINTS; DEFECT NOTICES. Manager shall respond to
complaints and requests from tenants of the Property and shall notify Owner of
any material complaint or lease default by any such tenant. Manager shall also
promptly notify Owner of any (i) violation of any governmental requirement(s)
received by Manager relating to the Property or Manager's services hereunder;
(ii) defect in the Property known to Manager; (iii) advisory or directive
received by Manager concerning the use of hazardous or toxic materials at the
Property; (iv) threatened or
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pending condemnation of all or a portion of the Property; and (v) fire or other
damage to the Property.
2.12 NOTICES OF CLAIM OF INJURY OR DAMAGE. Manager shall promptly
notify Owner's general liability insurance carrier and Owner of any personal
injury or property damage occurring at the Property to, or claimed by, a tenant
thereof or any other person/entity. Manager shall promptly forward to such
carrier and to Owner any summons, subpoena or other legal documents served upon
Manager relating to actual or alleged potential liability of Owner, Manager or
the Property.
2.13 ASSISTANCE WITH PROPOSED SALE OR FINANCING. Manager shall
cooperate with and assist Owner in any attempt(s) by Owner to sell or mortgage
all or a portion of the Property. Such cooperation and assistance shall include,
without limitation, answering prospective purchasers' questions with respect to
the Property or tenant leases and notifying tenants in the event of the sale of
the Property. When requested by Owner, Manager shall (i) prepare a list of all
personal property owned or leased by Owner and used at the Property or in its
operation and (ii) use commercially reasonable efforts to promptly obtain lease
estoppels certificates and/or subordination and non-disturbance agreements (on a
form approved by Owner) from tenants for the benefit of Owner and/or a proposed
purchaser or mortgagee.
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ARTICLE III.
COMPENSATION
3.1 COMPENSATION. As compensation for Manager's performance of
management services with respect to the Property pursuant to this Agreement,
Manager shall receive from Owner a management fee ("MANAGEMENT FEE") in the
amount of One Thousand Two Hundred Fifty Dollars ($1,250) per month. In addition
to the Management Fee, Owner shall reimburse Manager within twenty (20) days
after receipt of a statement from Manager, accompanied by reasonably
satisfactory supporting documentation, with respect to authorized expenses
incurred by Manager in providing services hereunder.
ARTICLE IV.
INDEMNITIES
4.1 INDEMNIFICATION BY OWNER. Owner shall indemnify, hold harmless and
defend Manager, its officers, directors, employees and agents (collectively,
"MANAGER INDEMNIFIED PARTY") from and against any liability, loss, cost or
expense (including, without limitation, reasonable attorneys' fees,
disbursements and court costs) (collectively, "CLAIM") incurred by a Manager
Indemnified Party in connection with Manager's performance of its duties under
this Agreement, except to the extent that a Claim shall be caused by or arise
out of the negligence or willful misconduct of a Manager Indemnified Party.
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4.2 INDEMNIFICATION BY MANAGER. Manager shall indemnify, hold harmless
and defend Owner, its officers, directors, employees and agents (collectively,
"OWNER INDEMNIFIED PARTY") from and against any Claim incurred by an Owner
Indemnified Party in connection with Manager's negligence or willful misconduct
or Manager's failure to perform its obligations hereunder.
ARTICLE V.
GENERAL
5.1 NOTICES. Any notice, consent, request, demand or communication
under this Agreement by either party hereto to the other party shall be in
writing and shall be deemed to have been duly given when delivered personally or
by overnight mail service to such other party and a receipt has been obtained or
on the third day after being mailed in a postpaid envelope (registered or
certified, return receipt requested) addressed to such other party at its
address set forth above, or if the address of such other party for notices shall
have been duly changed as hereinafter provided, if so mailed to such other party
at such changed address. Either party may at any time change the address for
notices hereunder by a notice stating the change and setting forth the changed
address.
5.2 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective successors and permitted
assigns. Manager may not assign its rights or obligations under this Agreement
without the prior written consent of Owner, which consent Owner may withhold in
its sole discretion.
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5.3 STATUS OF MANAGER. Manager acknowledges and agrees that it is
performing services under this Agreement and acting solely as agent for Owner,
subject to the terms and conditions hereof, and not as a partner, joint venturer
or employee of Owner. Accordingly, Manager, its officers, directors, employees,
agents and/or subcontractors shall have no authority to bind or obligate Owner
in any manner whatsoever.
5.4 ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties hereto with respect to the subject matter of this Agreement
and supersedes all prior oral or written agreements, understandings,
representations and covenants.
5.5 AMENDMENT AND WAIVER. This Agreement may be altered, amended or
terminated only by an instrument in writing signed by both Owner and Manager.
Notwithstanding the foregoing, a provision of this Agreement may be waived only
if it is set forth in a written instrument signed by the party against whom
enforcement of the waiver is sought.
5.6 SEVERABILITY. If any provision of this Agreement or the application
thereof to any person, entity or circumstances shall, to any extent, be invalid
or unenforceable, the remainder of this Agreement shall not be affected thereby
and each provision hereof shall be valid and enforceable to the fullest extent
permitted by law.
5.7 APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, Owner and Manager have caused this Agreement to be executed
as of the date first written above.
OWNER:
345 W. 37th CORP.
By: /s/ Morris Goldfarb
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Name: Morris Goldfarb
Title: Chief Executive Officer
MANAGER:
G-III LEATHER FASHIONS INC.
By: /s/ Wayne Miller
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Name: Wayne S. Miller
Title: Chief Financial Officer
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