MANAGEMENT AGREEMENT
PARTIES In consideration of the covenants herein contained, First Springhill
Lake Limited Partnership, Second Springhill Lake Limited Partnership,
Third Springhill Lake Limited Partnership, Fourth Springhill Lake
Limited Partnership, Fifth Springhill Lake Limited Partnership, Sixth
Springhill Lake Limited Partnership, Seventh Springhill Lake Limited
Partnership, Eighth Springhill Lake Limited Partnership and Ninth
Springhill Lake Limited Partnership and Springhill Commercial Limited
Partnership, all Maryland limited partnerships, and Springfield
Facilities, Inc., a Maryland corporation (collectively and hereinafter
called the "Owner") and Winthrop Management, a Massachusetts general
partnership (hereinafter called the "Agent"), agree as follows:
EXCLUSIVE 1. The Owner hereby employs the Agent exclusively to rent,
AGENT lease, operate and manage the property known as Springhill Lake
Apartments ("Apartments") and the neighborhood shopping center,
containing approximately 22,000 square feet of retail and office
space and known as the Springhill Lake Shopping Center and the
parcel of land owned by Springhill Commercial Limited Partnership
known as the Early Learning Center ("Shopping Center"), (both of
which are located in Prince George's County, Maryland and
collectively referred to as the "Property") upon the terms
hereinafter set forth. The initial term of this Agreement shall
commence as of the date hereof and, unless sooner terminated as
provided herein, shall continue until December 31, 1996. This
Agreement shall thereafter be renewed for successive one-year
terms unless sooner terminated as provided herein or unless on or
before 60 days prior to the expiration of the initial term or any
extended term Owner gives notice of its intention not to renew
this Agreement.
2. The Agent accepts the employment and agrees:
AGENT TO a) To use due diligence in the management of the premises
FURNISH for the period and upon the terms herein provided, and
SERVICES agrees to furnish services for the renting, leasing, operating
and managing of the Property.
MONTHLY b) To render monthly statements of receipts, expenses and
STATEMENTS charges and to account to Owner for receipts and dis-
bursements. In the event the disbursements are in excess of
the rents collected by the Agent, the Owner hereby agrees to
pay such excess promptly upon demand of the Agent. Agent
shall keep and maintain in its possession copies of all
invoices, purchase orders, operating statements, rent rolls,
occupancy reports, and other records and written material
relating to the property for a period of six (6) years from the
date of preparation or receipt of such documents. After a
period of six (6) years Agent shall dispose of such documents
unless Owner specifically requests Agent to send the
documents to Owner.
SEPARATE c) To establish a separate account known as the Springhill
OWNERS' Operating (and/or Reserve) Account, separate and apart
FUNDS from Agent's corporate accounts, for the deposit of receipts
collected as described herein, in a bank or other institution
whose deposits are insured by the federal government. Such
depository shall be selected by the Agent. However, Agent
shall not be held liable in the event of bankruptcy or failure
of a depository. Funds in the Operating (and/or Reserve)
Account shall remain the property of Owner subject to dis-
bursement of expenses by Agent as described in this
Agreement.
BONDED d) To obtain for the Property's on-site employees who
EMPLOYEES handle or are responsible for Owner's monies a fidelity bond
or comprehensive crime insurance, in amounts not less than
$500,000, the cost of which shall be an expense of the Pro-
perty. Off-site employees of Agent who handle or are
responsible for the Owner's monies shall also be bonded by a
fidelity bond or otherwise covered by comprehensive crime
insurance in amounts not less than $500,000, the cost of
which shall be an expense of the Agent.
3. The Owner hereby gives to the Agent the following authority and
powers and agrees to assume the expenses in connection therewith:
COMPLIANCE a) To carry out its services hereunder in full compliance
WITH APPLIC- with all applicable statutes, ordinances, laws and
ABLE LAWS regulations and not to knowingly permit the Property to
AND AGREEMENTS be used for any purpose which might void or violate any
2
policy of insurance or mortgage relating to the Property.
Agent shall notify the Owner promptly, or forward to the
Owner promptly, any material complaints, warnings, notices,
or summonses received by it relating to statutes, ordinances,
laws and regulations. The Owner represents that to the best
of its knowledge the Property complies with all such
requirements, and authorizes the Agent to disclose the owner-
ship of the Property to any relevant officials or authorities.
ADVERTISING b) To advertise the availability for rental of the Property
AND SIGNS or any part thereof, and to display signs thereon; to sign as
agent for Owner, and/or cancel leases for the Property or any
part thereof; to collect rents and other charges due or to
become due and give receipts therefore, to terminate
tenancies and to sign and serve in the name of the Owner
COLLECTION such notices as are deemed necessary by Agent, to institute
OF RENT and prosecute actions, to evict residents and to recover
possession of the property; to sue for in the name of the
LEGAL Owner and recover rents and other sums due; and when
PROCEDURES expedient, to settle, compromise and release such actions or
suits or reinstate such tenancies.
REPAIRS c) To make all necessary repairs provided the cost of any single
repair does not exceed the sum of $10,000 unless such repair
is specifically authorized in an (approved) budget for the
current year, such repair is authorized by Owner or such
repair is an emergency and Agent promptly notifies Owner of
such emergency repair.
EMPLOYEES d) To hire, discharge and supervise all labor and employees
required for the operation and maintenance of the Property;
it being agreed that all employees shall be deemed employees
of the Agent. Owner shall have no right to hire, supervise
or direct such employees. Owner shall have the right to
request Agent to discharge or remove from employment at the
Property such employees as Owner deems unsatisfactory. Owner
shall specify to the Agent its reasons for requesting the
discharge. If Agent fails to discharge the employee and if,
after a reasonable amount of time, Owner determines that
such employee's performance continues to be unsatisfactory,
Owner may request Agent to discharge such employee. Agent
shall establish the salaries, wages and other compensation
for such employees, including customary employee benefits,
which need not be approved by Owner if consistent with an
3
(approved) budget. For all on-site employees, such wages and
other compensation shall be the expense of Owner. For off-
site employees who have responsibilities over the Property,
Owner and Agent shall agree on the percentage, if any, of
such wages and compensation which shall be an expense of
Owner. Manager shall fully comply with all applicable laws
and regulations relating to workmen's compensation, social
security, employment insurance, hours of labor, wages, work-
ing conditions, and other employer/employee related subjects.
SERVICE e) To contract on behalf of Owner for electricity, gas,
CONTRACTS fuel, water, telephone, rubbish hauling and other services or
such of them as Agent shall deem advisable. It is agreed that
Agent shall execute such contracts as agent for the Owner.
The Agent shall not contract for any services not in an
(approved) budget for the current year whose estimated cost
would exceed $10,000 without the Owner's prior written
consent.
SAVE 4. The Owner and Agent further agree:
HARMLESS
a) Agent shall indemnify, defend and hold Owner harmless from
any and all claims, demands, causes of action, losses,
damages, fines, penalties, liabilities, costs and expenses,
including attorney's fees and court costs (but only in excess
of amounts actually received by Owner from any insurance
proceeds), sustained or incurred by or asserted against Owner
arising out of Agent's breach of the duties and obligations
required by this Agreement or any criminal acts, gross negli-
gence or willful misconduct.
Owner shall indemnify, defend and hold harmless Agent from
any and all claims, demands, causes of action, losses,
damages, fines, penalties, liabilities, costs and expenses,
including attorneys' fees and court costs (but only in excess
of amounts actually received by Agent), sustained or incurred
by or asserted against Agent in connection with Agent's
carrying out the provisions of the Agreement in compliance
therewith or acting under the express direction of Owner,
unless such claims, demands, causes of action, losses,
damages, fines, penalties, liabilities, costs or expenses
arising out of Agent's criminal misconduct, willful
misconduct or gross negligence.
4
b) Agent shall not be liable to Owner for any violations of
statutes, ordinances, laws or regulations relating to the
renting, leasing, operation or management of the Property
so long as Agent acted in good faith hereunder and in the
best interest of the Property or under the express direction
of Owner and its course of conduct did not constitute gross
negligence, willful misconduct or criminal activity.
c) Owner shall pay all expenses incurred by the Agent including
without limitation attorneys' fees for counsel employed to
represent the Agent or the Owner in any proceeding or suit
involving an alleged violation by the Agent or the Owner, or
both, of any statute, ordinance, law or regulation of any
governmental body pertaining to the leasing, rental, manage-
ment and operation of the Property (unless the Agent is
finally adjudicated to have personally and not in a repre-
sentative capacity violated such constitutional provision,
statute, ordinance, law or regulation).
INSURANCE d) (i) Owner's Insurance. The Owner or Agent, if Agent is directed
by Owner, at the expense of the Property, shall procure and
maintain at all times during the term of this Agreement at least
the following insurance: (A) "All Risk" insurance on all real
and personal property at the project including boiler and
machinery and Agent's furniture, furnishings, or fixtures
situated at the Property in an amount not less than the
replacement cost; (B) Comprehensive General Liability Insurance
written on an occurrence basis, to afford protection of
$10,000,000 combined single limit for bodily injury and/or death
arising therefrom and Broad Form property damage arising out of
any one occurrence; and which insurance shall include coverage
for contractual liability, independent contractor's liability
and completed operations liability; and (C) Comprehensive
Automobile Liability, covering owned, non-owned, and hired
vehicles providing bodily injury and property damage coverage,
all on a per-occurrence basis, at a combined single limit of
$1,000,000.
Agent shall be named as an additional named insured with
respect to the liability insurance.
(ii) Agent's Insurance. Agent shall procure and maintain at
all times during the term of this Agreement (A) Compensation
5
Insurance providing statutory benefits for employees and (B)
Employer's Liability Coverage in an amount not less than
$500,000. The cost of this insurance shall be an expense of
the Property for all on-site employees and for an agreed to
portion of insurance for off-site employees.
INTEREST, TAX
AND INSURANCE
PAYMENTS e)The Agent is hereby instructed and authorized to
pay mortgage indebtedness, property and employee taxes,
special assessments and insurance premiums, and the Agent
is hereby directed to accrue and pay for same from the
Owner's funds, with the following exceptions:
None
OWNER f) In the event the Agent advances funds for the Owner's
LIABILITY account or the Owner is indebted to the Agent for services or
otherwise arising out of this Agreement, all monies advanced
by the Agent shall be due and payable by the Owner upon
demand and shall bear interest at the prime rate charged by
BayBank Boston, plus one percent computed on monthly debit
balances on the Owner's account and the recording of this
Agreement or notice with a notation of the amount owing the
Agent shall become a valid lien upon the premises. At the
election of the Agent, and upon notice to the Owner, the
Agent may satisfy any advances made by the Agent, together
with the interest due thereon, from the gross revenue of the
Property.
AGENT'S g) To pay the agent each month:
COMPENSATION
(1) For Management:
3% of gross Property revenues
other than the Shopping Center
(2) For Leasing:
N/A
6
(3) For Supervision of Construction/ Improvements:
N/A
(4) Other:
5% leasing fee on Shopping Center space
is payable as rent is collected from tenants.
Such amount will be shared with outside
brokers to the extent that such brokers are
involved in procuring such tenant.
No fee shall be paid with respect to rent
payable by a tenant for the period after the
tenth anniversary of the date on which such
tenant initially occupies the part of
the Shopping Center leased by it.
RIGHT OF h) The Agent shall have the right to assign all of
ASSIGNMENT its right, title and interest and all obligations
under this Management Agreement to an affiliated
entity, so long as such entity has the same
degree of experience and expertise in the
management of multi-family properties as does
Winthrop Management, and so long as essentially
the same resources and personnel will continue to
be utilized in connection with the management of
the Property.
TERMINATION i) Agent may terminate this Agreement at any time
upon thirty (30) days' written notice to Owner.
Agent or Owner may terminate this Agreement upon
ten (10) days' written notice for any default in
the performance of Owner's or Manager's
obligations under this Agreement which default
remains uncured following reasonable notice of
such default.
Dissolution or termination of the corporate or
partnership existence of Agent by merger,
consolidation or otherwise which result in a
change of control; or cessation on Agent's
part to continue to do business, or bankruptcy,
reorganization or reconstitution of Agent, or
insolvency, or assignment for the benefit of the
creditors of Agent shall effect an immediate
termination of the Agreement without notice. In
addition, a sale of the Property whether by Owner
or pursuant to a foreclosure action by creditors
of Owner or pursuant to a conveyance in lieu of
foreclosure, the destruction of the Property
so that the Property is untenantable or the
taking of the Property shall effect an immediate
termination of this Agreement without notice.
7
NON-RECOURSE j) None of the (i) partners of Owner or Agent, (ii)
partners of the partners of Owner or Agent, or
(iii) any legal representative, heir, estate,
successor or assign of those in (i) or
(ii) above shall have any personal obligations
with respect to the obligations of Owner or Agent
hereunder; recourse against Owner shall be
limited to the estate of Owner in the Property
or the proceeds of any sale of all or a portion
of Owner's interest in the Property; and recourse
against the Agent shall be limited to the assets
of the Agent.
The indemnities contained in this Agreement shall survive the termination of
this Agreement whether such termination is for cause or without cause. This
Agreement shall be binding upon the successors and assigns of the Agent and the
Owner.
IN WITNESS WHEREOF, the parties hereto have affixed or caused to be affixed
their respective signatures as of this day of ,
1995.
AGENT:
WINTHROP MANAGEMENT
By:______________________
Vice President
OWNER:
FIRST SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
8
SECOND SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
THIRD SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
FOURTH SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
FIFTH SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
9
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
SIXTH SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
SEVENTH SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
EIGHTH SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
10
NINTH SPRINGHILL LAKE LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
SPRINGHILL COMMERCIAL LIMITED PARTNERSHIP
By: SPRINGHILL LAKE INVESTORS LIMITED
PARTNERSHIP, General Partner
By: THREE WINTHROP PROPERTIES, INC.,
Managing General Partner
By:_________________________
Vice President
SPRINGFIELD FACILITIES, INC.
By:_________________________
Vice President
11