Management Agreement - Las Vegas Sands Inc. and Forest City Commercial Management Inc.
MANAGEMENT AGREEMENT
by and between
LAS VEGAS SANDS, INC.,
a Nevada corporation
("Owner")
and
FOREST CITY COMMERCIAL MANAGEMENT, INC.,
an Ohio corporation
("FCMI" or "Agent")
Phase I and Phase II
Las Vegas (Clark County), Nevada
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INDEX
ARTICLE I: Engagement......................................................1
ARTICLE II: FCMI's Obligations..............................................2
ARTICLE III: Term............................................................7
ARTICLE IV: Termination.....................................................7
ARTICLE V: Compensation...................................................10
ARTICLE VI: FCMI's Staff...................................................12
ARTICLE VII: Assignment.....................................................13
ARTICLE VIII: Notices........................................................13
ARTICLE IX: Amendment......................................................14
ARTICLE X: Severability...................................................14
ARTICLE XI: Remedies Cumulative............................................14
ARTICLE XII: Successors and Assigns.........................................14
ARTICLE XIII: Law Applicable.................................................14
ARTICLE XIV: Consent or Waiver..............................................15
ARTICLE XV: Indemnity......................................................15
ARTICLE XVI: Miscellaneous..................................................15
ARTICLE XVII: Bonding........................................................17
ARTICLE XVIII: Lender Provisions..............................................18
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MANAGEMENT AGREEMENT
THIS AGREEMENT, made as of the _____ day of _______________, 1997, by and
between LAS VEGAS SANDS, INC. ("Owner"), a Nevada corporation, with offices at
3355 Las Vegas Boulevard South, Las Vegas, Nevada 89109, and FOREST CITY
COMMERCIAL MANAGEMENT, INC. ("FCMI" or "Agent"), an Ohio corporation, with
offices at 700 Terminal Tower, Cleveland, Ohio 44113-2203.
WITNESSETH:
WHEREAS, Owner intends to develop in two (2) phases an enclosed retail
center. Phase I will contain approximately 350,000 square feet of gross leasable
area. Phase II, to be completed in approximately two (2) years, will contain an
additional 150,000 square feet of gross leasable area (Phase I and Phase II are
collectively referred to as the "Shopping Center"). The Shopping Center will be
located in Las Vegas (Clark County), Nevada on the real property described in
Exhibit "A" and shown on Exhibit "B" (together, the "Shopping Center Parcel");
and
WHEREAS, Owner will operate the Shopping Center adjacent to and in
connection with a hotel and casino to be owned and operated by Owner.
WHEREAS, Owner desires that FCMI perform management services with respect
to the Shopping Center on behalf of Owner and FCMI has agreed to perform such
services.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties, intending to be legally bound, covenant and agree with each other
as follows:
ARTICLE I
ENGAGEMENT
Owner engages FCMI as an independent contractor to perform the services
described in this Agreement as the sole and exclusive manager and FCMI accepts
and agrees to perform such services as an independent contractor.
ARTICLE II
FCMI'S OBLIGATIONS
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The Owner intends to initially construct three hundred fifty thousand
(350,000) square feet of gross leasable area. The initial three hundred fifty
thousand (350,000) square feet of gross leasable area and the expansion of one
hundred fifty thousand (150,000) square feet of gross leasable area to be
completed two (2) years later together constitute the Shopping Center for the
purposes of this Agreement together with the associated Common Area.
FCMI shall commence and thereafter with due diligence shall perform all
services described in this Agreement with respect to the management of the
Shopping Center. In furtherance thereof, FCMI shall promptly, fully, faithfully
and in compliance with all applicable statutes, laws, ordinances, rules and
regulations of all authorities having jurisdiction perform, among other things,
the following subject in all respects and in all instances to the prior approval
of, direction from and control by Owner:
(a) Maintain liaison with the leasing, design and construction staffs
engaged by Owner, before and after opening of the Shopping Center
for business.
(b) At least sixty (60) days before the date set for the opening of the
Shopping Center submit to Owner for its approval a plan for the
routine operations of the Shopping Center, including, but not
limited to:
(i) the number and type of employees to be employed,
(ii) collection of rents and other charges,
(iii) supervision of maintenance and repair of the Shopping
Center,
(iv) an insurance program for the Shopping Center.
(c) At least sixty (60) days before the date set for the grand
opening of the Shopping Center and thereafter not later than October
31st of each full calendar year during the term of this Agreement,
prepare and submit for Owner's approval, an annual detailed shopping
center budget ("Shopping Center Budget") in the form of Exhibit "C"
attached to and made a part of this Management Agreement for the
next calendar year setting forth the estimated operating receipts
and expenditures of Owner on a month to month basis from the
Shopping Center for a period covered by the Shopping Center Budget
showing ongoing expenses and any anticipated extraordinary expenses
and capital expenditures and the approximate date funds therefor
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will be needed. The Shopping Center Budget shall be acceptable to
Owner and be consistent with generally accepted accounting
principles, consistently applied. In connection with the budgeting
process, FCMI shall submit for the approval of Owner an operational
plan. Upon receipt of the proposed Shopping Center Budget, Owner
shall have thirty (30) days to review and approve same. In the event
Owner does not object in writing to the proposed Shopping Center
Budget, then the Shopping Center Budget shall be deemed approved. If
Owner does not approve the proposed Shopping Center Budget, Owner
shall forward its required changes to FCMI and FCMI shall revise the
proposed Shopping Center Budget and operational plan in accordance
with Owner's requirements as set forth in the revised Shopping
Center Budget. When the Shopping Center Budget, the detailed leasing
plan in the form attached hereto as Exhibit "E", (which leasing plan
shall be supplied to FCMI no later than August 15th of each full
calendar year i.e., seventy-five (75) days prior to submission by
FCMI of Shopping Center Budget to Owner) and operational plan are
approved by the Owner, FCMI shall have the right and authority to
operate within the parameters of the approved Shopping Center Budget
and operational plan and shall be required to obtain the Owner's
approval for actions intended to be taken by FCMI only when such
actions would materially deviate from the approved Shopping Center
Budget and operational plan. For purposes of this Agreement,
"materially deviate" shall mean the lesser of $25,000 or five
percent (5%) of the approved line item as defined on Page 1 in the
Shopping Center Budget.
(d) FCMI shall be promptly supplied with copies of all leases relating
to the Shopping Center so that it can maintain a central control
file.
(e) Bill tenants and other occupants in the Shopping Center for, and
collect and deposit in segregated joint bank account(s) in the name
of Owner and FCMI at a lending institution approved by Owner (the
"Bank Accounts"), all revenues received by FCMI from the Shopping
Center including, without limitation, all fixed rents, percentage
rents and other sums, whether payable as additional rent or
otherwise payable by such tenants and occupants under their
respective leases and other agreements, or by other parties under
license, service or other agreements. FCMI shall have the
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authority to write checks from the Bank Accounts to pay the
obligations of the Shopping Center in accordance with the Shopping
Center Budget and this Agreement; provided, however, checks in the
amount of $25,000.00 or more shall require the dual signature of
Owner, excluding only the Management Fee agreed upon herein, which
shall not require the dual signature of Owner. Owner agrees to
cooperate with FCMI in a timely fashion in order to avoid any late
fee payment, default, penalty or other charge caused by the failure
to timely pay obligations of the Shopping Center. Obtain and review
statements of sales furnished by tenants to support their payment of
percentage rentals or other sums and deductions. With the Owner's
prior approval, FCMI may engage legal counsel on behalf of and at
Owner's expense and institute, prosecute or settle any legal
proceedings or arbitrations with respect to collection activities
against tenants. FCMI will keep Owner advised of FCMI's collection
activities hereunder and will promptly advise Owner if FCMI is
unable to collect any such income or charges.
(f) Use diligent efforts to enforce the performance by tenants of all
requirements of their respective leases by all reasonable means;
provided, however, FCMI does not guarantee the payment or
performance of any lease by any tenant.
(g) Cause the Shopping Center to be maintained in a first-class manner
comparable to other similar shopping centers located in the Las
Vegas area and in good operating condition and repair at Owner's
cost, supervise the maintenance thereof, and hire such persons,
firms or corporations and purchase or lease such equipment and
supplies at reasonable rates and costs as may be necessary or
desirable to accomplish such purposes all within the limits of the
Shopping Center Budget. FCMI shall negotiate contracts for
electricity, gas, fuel supply, water, telephone, window washing,
exterminating, equipment maintenance, trash handling and other
contracts relating to the operation or maintenance of the Shopping
Center (collectively, "Contracts"), subject to Owner's final review,
approval and execution. Owner agrees to respond to proposed
Contracts within fifteen (15) days after submittal by FCMI. Upon
execution, Owner shall promptly deliver copies of all executed
Contracts to FCMI. All on-site personnel costs, including
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managers and marketing staff, are a direct cost to the Project and
thus are not included in the Management Fee [as defined in Article
V(b)].
(h) Maintain the books, records and accounts of Owner, prepare and
submit to Owner on or before the 25th day of each month the various
reports marked in Exhibit "C" attached to and made a part of this
Management Agreement which shall, without limitation, provide Owner
with: monthly income and expense statements containing monthly and
year to date information, and statements listing rent delinquencies.
Title to the books and records relating to the Shopping Center shall
at all times remain in Owner, and Owner shall have the right to
examine such books and records at any reasonable time during normal
business hours at FCMI's place of business and make copies thereof.
(i) Advise Owner as to insurance coverage and administer Owner's
insurance program. FCMI shall, to the extent requested by Owner,
assist Owner in procuring insurance coverage.
(j) Organize and administer periodic meetings with Owner in order to
review the status of the Shopping Center and establish direction as
necessary.
(k) Assist, as requested by owner, in any application by Owner for a
zoning change or other application made by Owner to any governmental
authority relating to the Shopping Center.
(l) Supervise and assist in the establishment of an advertising and
promotional program for the Shopping Center.
(m) Establish and supervise a marketing plan for the Shopping Center.
(n) Initiate and supervise advertisement and promotion of the
Shopping Center, including the grand opening.
(o) Review annually the tax assessments upon the Shopping Center and
recommend to Owner when deemed appropriate by FCMI that proceedings
be instituted by Owner to contest or appeal such assessments.
(p) Deposit all funds of every kind and nature received by FCMI for
Owner pursuant to this Agreement immediately in the Bank Accounts
[as described in Article II(e)]. Subject to Article II(e),
officers or employees of FCMI shall disburse from said account
funds necessary for the operation and maintenance of the Shopping
Center provided: (i) the item or purpose for
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which disbursement is to be made has previously been approved by
Owner in the Shopping Center Budget, or (ii) the item has otherwise
been approved by Owner in writing, or (iii) the item is within a
contingency line item in an amount to be agreed upon annually by
Owner and FCMI which FCMI may use in any fiscal year for items not
approved in the Shopping Center Budget, not including monies
expended for "emergencies" (hereinafter defined); in "emergencies"
disbursements may be made for items not previously approved by
Owner. Except as expressly permitted above, FCMI shall not have any
authority to disburse funds belonging to Owner from said account. As
used herein, "emergencies" shall mean any sudden, unexpected
happening in which a failure on the part of FCMI to act immediately
would cause appreciable risk of damage to person or property within
the Shopping Center. Even in an "emergency", FCMI shall exercise
good faith efforts to obtain the approval of Owner, if reasonably
possible, before making any such "emergency" expenditure.
(q) At least quarterly, after payment of Management Fees due FCMI, and
allowing reasonable reserves as approved by Owner to be held for the
payment of operating expenses and real estate taxes thereafter
coming due and payable and for other items in the Shopping Center
Budget which may not be operating expenses, together with a proper
accounting, remit the net amount due to Owner.
(r) Perform such other related normal management functions as shall
pertain to the Shopping Center as contemplated by this Agreement.
ARTICLE III
TERM
This Agreement shall commence upon the execution of this Agreement and
shall continue for a period of five (5) years after the opening of the Shopping
Center for business to the public ("Expiration Date"), unless earlier terminated
as provided by the terms of this Agreement.
ARTICLE IV
TERMINATION
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(a) Termination by Owner without Cause. This Agreement shall terminate as
of the Expiration Date.
(b) Early Termination By Owner. Notwithstanding anything herein contained
to the contrary, Owner shall have the right to terminate this Agreement upon the
following terms and conditions:
(i) Owner shall have no right to terminate the Agreement during
Years 1-3 of this Agreement, except as provided in Article IV(c) below;
(ii) Beginning in Year 4, Owner shall have the right to terminate
this Agreement, provided Owner otherwise is not in default of this Agreement,
upon delivering to Agent a written notice of termination at least ninety (90)
days prior to the commencement of Year 4 ("Termination Notice") and the payment
by Owner to Agent of a termination fee of One Million Dollars ($1,000,000.00).
The termination fee shall be paid in two (2) equal installments. The first
installment of $500,000.00 shall be tendered with the Termination Notice. The
second installment shall be paid on or before the commencement of Year 4. In the
event that Owner fails to timely give the Termination Notice and/or fails to pay
the full amount of the termination fee, then Owner shall be deemed to have
waived its right of early termination of this Agreement in Year 4;
(iii) As of Year 5, Owner shall have the right to terminate this
Agreement, provided Owner otherwise is not in default of this Agreement, upon
delivery to Agent of a Termination Notice at least ninety (90) days prior to the
commencement of Year 5 and the payment by Owner of a termination fee of Five
Hundred Thousand Dollars ($500,000.00). The termination fee shall be paid in two
(2) equal installments. The first installment of $250,000.00 shall be tendered
with the Termination Notice. The second installment shall be paid on or before
the commencement of Year 5. In the event that Owner fails to timely give the
Termination Notice and/or fails to pay the full amount of the termination fee,
then Owner shall be deemed to have waived its right of early termination of this
Agreement in Year 5;
(c) Termination by Owner for Cause. This Agreement may be terminated by
Owner "for cause" at any time during the Term if the Event of Default is not
cured within sixty (60) days' written notice to FCMI, or on such later date of
termination as may be stated in Owner's notice. In the event of a termination
for cause, Property Manager shall be entitled, as its sole and exclusive remedy,
to receive such earned and unpaid Management Fees and fees for Extraordinary
Services as may remain, if any, after Owner has offset any damages
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or other amounts owed to Owner by FCMI. The following shall constitute an Event
of Default:
(i) If FCMI fails to use commercially reasonable efforts to
cooperate with Owner, the Leasing Agent or any third party brokers in connection
with Shopping Center leasing;
(ii) If FCMI breaches its duty to Owner to operate, manage and
promote the Shopping Center in Owner's best interest;
(iii) If FCMI, subject to fire, earthquake, acts of God, and other
events beyond the control of FCMI (which shall not include financial inability),
and subject to the performance by tenants of their obligations under their
leases, fails to maintain the operating assets of the Shopping Center in good
working order or repair and to keep the Shopping Center properly clean and free
of debris based upon the approved Shopping Center Budget and the operational
plan;
(iv) If FCMI suspends or discontinues business, or is enjoined,
restrained or in any way prevented by court order from conducting all or a
substantial part of its regular business activities;
(v) If a court enters a decree or order for relief in respect of
FCMI in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or appoints a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar official of FCMI or for any
substantial part of FCMI's property, or for the winding-up or liquidation of
FCMI's affairs, and such decree or order continues unstayed and in effect for a
period of sixty (60) consecutive days;
(vi) If FCMI commences a voluntary case or action under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar official of FCMI or for any
substantial part of FCMI's property, or makes any assignment for the benefit of
creditors, or fails generally to pay its debts as such debts become due, or
takes any action in furtherance of any of the foregoing;
(vii) If FCMI fails to observe or perform any of its material
obligations under this Agreement, and such failure continues for sixty (60) days
after written notice thereof has been given by Owner to FCMI; provided, however,
that if the breach is of a nature which
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cannot be corrected, cured or remedied, no sixty (60) day cure period shall be
required and Owner's termination shall be effective one hundred twenty (120)
days upon notice (or on the later date stated in such notice);
(viii) If any fraud is perpetrated by FCMI, or if any representation
or warranty of FCMI made in this Agreement or in any proposal, application,
financial statement or other writing delivered by FCMI at any time pursuant to
this Agreement proves to have been incorrect, incomplete or misleading in any
adverse material respect when made; and
(ix) If FCMI is at any time no longer affiliated with Forest City
Enterprises, Inc.
(d) Termination by FCMI. This Agreement may be terminated by FCMI without
cause at any time on or after the Expiration Date (after expiration of initial
term) upon one hundred twenty (120) days' prior written notice to Owner.
(e) Termination by FCMI for Cause. FCMI may terminate this Agreement upon
the occurrence of a default by Owner hereunder; provided, however, in the event
of such default, FCMI first shall notify Owner in writing of the exact nature of
the default and FCMI's intention to terminate this Agreement as a result of the
default. Owner shall have sixty (60) days from receipt of such notice to cure
the default (other than monetary defaults for which Owner shall have thirty (30)
days to cure), or such longer period as may be reasonably necessary to effect a
cure, provided Owner promptly commences to cure such default and thereafter
diligently prosecutes the cure to completion.
(f) Orderly Transition. In the event of any termination of this Agreement,
FCMI shall, at a mutually agreed upon time, (i) deliver to the person and/or
address designated by Owner all accounts, books, records, files and documents in
FCMI's possession relating to the Shopping Center and all existing and
prospective tenants of the Shopping Center, and (ii) cooperate with Owner and
any replacement property manager designed by Owner to effect an orderly
transition of the management and operation of the Shopping Center to FCMI's
replacement. The obligations set forth in this section shall survive termination
of this Agreement.
ARTICLE V
COMPENSATION
(a) Owner and FCMI expect that FCMI will begin its management services
immediately upon execution of this Agreement or sooner if Owner requests FCMI's
services and Owner will for said period reimburse FCMI on a monthly basis the
actual cost incurred
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by FCMI in performing said management services and using FCMI's in-house
personnel therefor in accordance with an accounting of said costs to be
furnished to Owner monthly. FCMI shall prepare proposed budgets for the
pre-opening ("Pre-Opening Budget") and for the Grand Opening ("Grand Opening
Budget") for Owner's review and approval based upon a detailed breakdown of
FCMI's personal rates and costs to be charged to Owner by FCMI. The above costs
to be paid by Owner to FCMI upon receipt of invoice. For purposes of this
Agreement, "opening date of the Shopping Center for business to the public"
shall mean the date that the first tenant in the Shopping Center opens for
business.
(b) Owner agrees that beginning on the opening date of the Shopping Center
for business with the public, in consideration of all other management services
to be performed by FCMI under or pursuant to the terms of this Agreement, Owner
shall pay to FCMI a fee (the "Management Fee"), paid monthly, in an amount equal
to two percent (2%) of all gross rents received from the operation of the
Shopping Center from any source whatsoever (excluding therefrom payments
received or due for reimbursement of actual expenses incurred from the operation
of the Shopping Center such as common area maintenance costs, real estate taxes,
insurance and the like) including, without limitation, all minimum (sometimes
referred to as "fixed" or "basic") rents, percentage rents, overage rents, and
license fees received or accrued by FCMI from tenants (including, without
limitation, all department stores, guarantors, sublessees, assignees, licensees
and concessionaires) in the Shopping Center during the term of this Agreement.
In no event shall the management fee be less than $600,000 on an annualized rate
per year paid monthly ("Minimum Management Fee"); provided, however, during
Phase I, the Minimum Management Fee shall be $450,000 per year. In the event
that Phase II of the Shopping Center shall not have opened for business after
the third year of the Term, then the Minimum Management Fee of $600,000 shall
apply commencing in year four.
Except for extraordinary services and expenses ("Extraordinary Items"),
the fees paid to FCMI pursuant to this Article shall constitute full
compensation for the services to be performed and all expenses to be incurred by
FCMI hereunder including, without limitation, general office and overhead,
travel, employee salaries, benefits and other compensation [excluding all
on-site personnel costs which are a direct project cost pursuant to Article
II(g)] and all other costs and expenses of FCMI in performing its duties
hereunder.
Owner and FCMI recognize that there may be circumstances not capable of
definition in this Agreement which by their nature are not a part of FCMI'S
Obligations as set forth in
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Article II. Such services are designated by the parties as "Extraordinary
Services" and in general relate, without limitation, to circumstances such as
major litigation, special construction requirements, financings, developmental
and technical services, tenant coordination, real estate tax contests,
supervision of any of the foregoing by FCMI's employees, etc., in which or for
which FCMI might employ third parties such as lawyers, expert consultants or
other specialized personnel.
Owner recognizes that FCMI, as manager of shopping centers, maintains a
staff of persons having particular experience, knowledge and skills in multiple
aspects of shopping centers such as, but not limited to, an in-house legal
department, an in-house real estate tax department, an in-house construction
department, etc., whose services could be purchased from third parties, and who
may or may not regularly or routinely perform services as part of FCMI's
management personnel ("Non-Management Personnel").
Owner agrees that when circumstances occur requiring the performance of
Extraordinary Services and if Owner elects to use FCMI's Non-Management
Personnel to perform such Extraordinary Services either in connection with the
supervision of third parties or in reference to the employment of third parties,
that FCMI should be entitled to reimbursement by Owner for FCMI's actual cost
and expenses incurred by FCMI because of such Extraordinary Services, except for
Tenant Coordination services which charges are listed in Exhibit "D" attached to
this Agreement.
When, in the opinion of FCMI, Extraordinary Services are required
hereunder, FCMI shall present to Owner a list of such Extraordinary Services
accompanied by a brief explanation of their extraordinary nature and an estimate
of FCMI's costs and expenses to be incurred, in the performance of such
Extraordinary Services in sufficient detail to relate such costs and expenses to
the specific Extraordinary Services listed. If Owner elects to engage FCMI to
perform such Extraordinary Services, then Owner shall reimburse FCMI monthly in
addition to the Management Fee for such Extraordinary Services. If Owner elects
not to engage FCMI to perform the Extraordinary Services, then FCMI shall have
no obligation or liability to perform the Extraordinary Services, and Owner may
engage such other third parties to perform such matters at Owner's sole cost and
expense.
ARTICLE VI
FCMI'S STAFF
In order to perform the services required by this Agreement, it will be
necessary for FCMI to have in its employ various personnel, including certain
executive staff. For
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purposes of this Agreement, "executive staff" shall mean the Shopping Center
Manager, Assistant Manager and Marketing Director. Owner shall have the right to
pre-approve the hiring of the executive staff, which approval shall not be
unreasonably withheld. FCMI agrees that the staff available to it for work
hereunder shall at all times consist of a sufficient number of appropriately
trained, experienced and otherwise qualified personnel to enable it to
efficiently and effectively carry out its obligations pursuant to this
Agreement. FCMI further agrees that it shall use at least so much of the time
and effort of such personnel as is reasonable to inure proper performance of
FCMI's obligations under this Agreement. Owner and FCMI each hereby covenant and
agree (i) not to hire or employ the employees of the other during the term of
this Agreement, and (ii) not to hire or employ any former employee for a period
of one (1) year after an employee leaves the employment of the other.
Whenever legal services of outside counsel are required in order to
perform properly any of the services described herein, such services shall be
performed by counsel representing and paid by Owner.
ARTICLE VII
ASSIGNMENT
FCMI shall not (but Owner may), directly or indirectly, assign, transfer,
mortgage, pledge, sell, hypothecate, or otherwise encumber (or permit any of the
foregoing) (collectively, a "Transfer") in any manner or by any means
whatsoever, whether voluntarily or by operation of law, all or any part of its
interest in or obligations arising out of this Agreement. In the event of a
Transfer by Owner, Owner shall notify FCMI of the transferee proposed and said
transferee shall assume the obligations of Owner under this Agreement.
ARTICLE VIII
NOTICES
Every notice, demand, direction, consent, approval, request and other
communication required or permitted hereunder ("Notice') shall be in writing,
sent by (i) registered or certified United States Mail, postage prepaid, return
receipt requested, or (ii) overnight delivery by a nationally recognized
delivery service, or (iii) hand delivered to whomever the Notice is required or
permitted to be sent, and addressed as stated below:
To FCMI: Forest City Management, Inc.
700 Terminal Tower
Cleveland, Ohio 44113-2203
Attn: Mark Randol
With a copy to: Forest City Enterprises, Inc.
10800 Brookpark Road
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Cleveland, Ohio 44130
Attn: William M. Warren, General Counsel
To Owner: Las Vegas Sands, Inc.
3355 Las Vegas Boulevard, South
Las Vegas, Nevada 89109
Attn: William Weidner, President
Any party may change the address to which Notices served upon it are to be
sent by ten (10) days' prior Notice informing the other parties of the change in
address. All Notices shall be deemed effectively given upon the earlier of
receipt of the Notice or refusal to accept delivery thereof.
ARTICLE IX
AMENDMENT
This Agreement shall be subject to amendment only by a writing signed by
Owner and by FCMI.
ARTICLE X
SEVERABILITY
If any term or provision of this Agreement, or the application thereof to
any person or circumstance, shall to any extent be held invalid or unenforceable
by a court of competent jurisdiction, such result shall not affect the other
terms and provisions of this Agreement or applications thereof which can be
given effect without the relevant term, provision or application, and to this
end the parties agree that the provisions of this Agreement are and shall be
severable.
ARTICLE XI
REMEDIES CUMULATIVE
All rights, privileges and remedies afforded the parties by this Agreement
shall be deemed cumulative and not exclusive. In the event of a breach of or
other failure to perform as required under this Agreement, the party not
breaching or defaulting shall, in addition to all rights and remedies herein
provided, have all rights and remedies available at law or in equity.
ARTICLE XII
SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties and, except as expressly otherwise provided, their respective permitted
successors and assigns.
ARTICLE XIII
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LAW APPLICABLE
The parties hereto agree that the laws of the State of Nevada shall govern
the enforcement, construction and other matters related to or in connection with
this Agreement.
ARTICLE XIV
CONSENT OR WAIVER
No consent or waiver, express or implied, by either party to this
Agreement to, of or for any breach or default by the other party in performance
of its obligations hereunder shall be deemed or construed to be a consent or
waiver to or for any other breach or default in 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 of the other party to this
Agreement 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.
ARTICLE XV
INDEMNITY
(a) FCMI shall indemnify and save Owner harmless from and against all
damages, claims, losses, liabilities, costs and expenses (including reasonable
legal fees) arising out of the wrongful or negligent acts or inactions of FCMI
or FCMI's agents, servants, employees or subcontractors which are performed
contrary to this Agreement or outside of the scope of FCMI's authority under
this Agreement.
(b) Owner shall indemnify, defend and hold FCMI harmless for any liability
directly or indirectly incurred by FCMI in connection with its services under
this Agreement, which are performed pursuant to this Agreement or are within the
scope of FCMI's authority under this Agreement other than the wrongful or
negligent acts or inactions of FCMI or FCMI's agents, servants, employees or
subcontractors.
ARTICLE XVI
INSURANCE/BONDING
a) Owner shall purchase and maintain Property and Rental Income Insurance
for the Shopping Center during the term of this contract as follows:
(i) So called all-risk coverage for the building and Owners'
personal property in an amount equal to the replacement value.
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(ii) Flood and Earthquake coverage in such amounts selected by
Owner.
(iii) Comprehensive Boiler and Machinery coverage.
(iv) Rental Income Insurance equal to one (1) years rental
income for perils insured by the policies in items (i), (ii) and (iii) above.
b) The above policies will be subject to deductibles selected by
Owner.
c) The above policies will contain an agreed amount clause waiving the
co-insurance clause and a waiver of subrogation clause in favor of FCMI.
d) Owner shall maintain liability coverage as follows:
(i) Commercial General Liability Coverage for a combined single
limit of $1,000,000 per occurrence applicable to bodily injury and property
damage and $1,000,000 for personal and advertising injury.
(ii) Excess liability coverage in the amount of $10,000,000 above
the limits provided in item (i) above.
(iii) The above insurance shall name FCMI and its directors,
officers and employees as additional insureds and indicate it is primary
coverage and not contributing with insurance purchased by FCMI.
e) FCMI shall purchase and maintain during the period of this contract the
following insurance:
(i) A Fidelity Bond insuring its employees against dishonesty and
which Bond shall include Depositors Forgery coverage in the amount of $1,500,000
with a deductible not to exceed $10,000.
Such Bond shall name Owner as an additional insured and
provide the right of Owner to directly make claim under the Bond.
(ii) Workers' Compensation insuring its employees for operations in
Nevada and elsewhere including Stop Gap Liability and Employers' Liability:
Workers' Compensation - Nevada - Statutory Liability
Elsewhere - Statutory Liability
Stop Gap Liability - $1,000,000
Employers Liability - $1,000,000
(iii) Auto Liability
Covering its use of any $1,000,000 combined single limit
vehicle - per occurrence BI and PD
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(iv) Excess Liability above Stop - $10,000,000 combined single limit
Gap Employers Liability and per occurrence BI and PD.
Auto Liability
(v) The auto liability and excess liability policies shall name
Owner, its directors, officers and employees as additional insureds and indicate
it is primary insurance and not contributing with insurance purchased by Owner.
f) Owner shall provide to FCMI:
(i) Certificates of Insurance as evidence of Owner's insurance and
providing thirty (30) days advance notice to FCMI prior to cancellation or
material change.
(ii) Certified copies of policy endorsements:
(1) Providing the notice of cancellation or material change,
(2) Naming of FCMI, its directors, officers and employees as
additional insured and indicate it is primary insurance and not contributing
with insurance purchased by FCMI.
(3) Waiving subrogation.
g) FCMI shall provide to Owner:
(i) Certificate of Insurance as evidence of FCMI's insurance and
providing thirty (30) days advance notice to Owner prior to cancellation or
material change in coverage.
(ii) Certified copies of policy endorsements:
(1) Providing the notice of cancellation or material change.
(2) Naming of Owner, its directors, officers and employees as
additional insureds and indicating it is primary insurance and not contributing
with insurance purchased by Owner.
(3) Providing for Owner to make claim under FCMI Fidelity
Bond.
ARTICLE XVII
MISCELLANEOUS
(a) All services performed on site by FCMI under the provisions of this
Agreement shall be deemed to be performed by Owner and all reasonable expenses
properly incurred in connection with the performance of such on-site services
shall be the obligation of Owner.
(b) No Publicity. FCMI agrees not to announce this Agreement to the public
without Owner's prior written approval.
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(c) Confidentiality. Each of the parties hereto, on behalf of themselves,
their officers, directors, shareholders, employees and agents agree not to
disclose the terms and conditions of this Agreement except to their respective
auditors and attorneys, or to the extent that disclosure is required as a matter
of law. This restriction shall not apply to information in the public domain or
that becomes part of the public domain through no fault of said party.
(d) Authority. FCMI understands and agrees that no person whatsoever,
regardless of such person's apparent authority, has any authority to amend,
modify, terminate, or otherwise change this Agreement on behalf of Owner, or
waive any of Owner's rights and remedies hereunder, except for Owner's Chairman
of the Board, who must do so in writing signed by him, and FCMI hereby waives
and relinquishes any and all claims of apparent authority.
(e) Binding. This Agreement shall be binding upon the parties hereto and
their permitted successors and assigns.
(f) Entire Agreement. This Agreement sets forth all of the covenants,
promises, agreements, conditions and understandings among the parties hereto
regarding the management of the Shopping Center and any other covenants,
promises, agreements, conditions and understandings are deemed merged and
integrated herein.
(g) Time is of the Essence. Time is of the essence under this Agreement.
ARTICLE XVIII
LENDER PROVISIONS
(a) If, as is contemplated, Owner assigns this Agreement and its rights
hereunder as security to one or more of its mortgage lenders (each, a "Lender"),
Owner shall promptly notify FCMI of the identity of each Lender, and FCMI will,
on request, execute and deliver an amendment to this Agreement containing terms
and conditions reasonably requested by a Lender, so long as such terms and
conditions do not materially change, alter or increase FCMI's obligations or
reduce in any way FCMI's Management Fee hereunder.
(b) Upon the occurrence of a Foreclosure Event (as defined below), New
Owner (as defined below) shall have the right to elect (i) to terminate this
Agreement by written notice to FCMI effective upon not less than thirty (30)
days written notice to FCMI (the "Termination Option"), or (ii) to require FCMI
to continue to perform under this Agreement for the benefit of New Owner (the
"Attornment Option"). If New Owner elects the Termination Option, then (1) FCMI
shall, notwithstanding anything in Article IV to the
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contrary, not be entitled to any termination fee, (2) New Owner shall be liable
for any unpaid Management Fees [as defined in Section V(b)], and (3) the
provisions of Section IV(f) shall apply. If New Owner elects the Attornment
Option, then (1) FCMI shall attorn to and recognize New Owner as Owner's
successor hereunder, and shall promptly execute and deliver any instrument that
New Owner may reasonable request to evidence such attornment, and (2) New Owner
will assume all of Owner's obligations under this Agreement from and after the
effective date of such assumption, including, without limitation, the payment of
all Management Fees due FCMI and the requirements of Article IV(b), and this
Agreement will thereafter continue as a direct agreement between New Owner and
FCMI for the balance of the term of this Agreement. As used in this Article
XVIII, the term "Foreclosure Event" shall mean any event (including, without
limitation, a foreclosure action, the exercise of a power of sale right or the
delivery of a deed in lieu of foreclosure) pursuant to which a Lender or its
designee or assignee becomes the owner of the Shopping Center (provided that
such New Owner is not affiliated, directly or indirectly, with the Owner or its
principals), and the term "New Owner" shall mean the entity (either a Lender or
its designee or assignee) that acquires title to the Shopping Center pursuant to
a Foreclosure Event.
(c) FCMI agrees to simultaneously deliver to each Lender a copy of all
Notices [including, without limitation, all Notices pursuant to Section IV(g)]
given by FCMI to Owner hereunder, provided that Owner or such Lender has given
FCMI written notice of such Lender's notice address. Upon the occurrence of any
default by Owner hereunder, each Lender shall have the same period given Owner
for remedying such default, and FCMI shall accept any such remedy by or on
behalf of a Lender as though the same had been done or performed by Owner within
the period allowed Owner hereunder; provided, however, that in the event of the
occurrence of a default by Owner which by its nature is not reasonably
susceptible of being cured by a Lender unless and until such Lender obtains
possession of the Shopping Center (i.e. a non-monetary default) if any Lender
(i) notifies FCMI of its election to promptly proceed with due diligence to
pursue a Foreclosure Event or to otherwise acquire possession of the Shopping
Center (either directly or through a trustee or receiver), (ii) FCMI is paid all
of its Management Fees on a current basis, and (iii) complies at all times with
such notification, then FCMI will not take action to terminate this Agreement
until and unless either (1) no Lender is in compliance with the foregoing
clauses (i), (ii) and (iii), or (2) a Foreclosure Event occurs or a Lender
obtains possession of the
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Shopping Center (in which case the cure period set forth in Section IV(g)
shall begin from and after the date of such event).
(d) No amendment or modification to this Agreement shall be binding or
effective without the prior written consent of each Lender with respect to which
owner has given a Notice to FCMI pursuant to Section XVIII(a), which consent
shall not be unreasonably withheld or delayed.
(e) In the event of any conflict between the provisions of this Article
XVIII and any other provisions of this Agreement, the provisions of this Article
XVIII shall govern and control.
(f) All Lenders shall be entitled to rely on and enforce the provisions of
this Article XVIII.
IN WITNESS WHEREOF, the parties hereto have duly signed this Agreement as
of the day and year first above written.
LAS VEGAS SANDS, INC.,
a Nevada corporation
By: /s/ William P. Weidner
----------------------
Its: President
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FOREST CITY COMMERCIAL
MANAGEMENT, INC., an Ohio
corporation
By: /s/ David J. La Rue
----------------------
Its: Secretary
----------------------
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EXHIBIT "D"
TENANT COORDINATION FEE STRUCTURE
A. SERVICES PROVIDED.
Tenant Coordination services include:
1. Prepare, update and distribute bi-monthly Tenant Status Reports.
2. Verify and approve Tenant allowance paperwork.
3. Maintain a point of contact for Tenant and Tenant's Architect.
4. Maintain and distribute Mall and Tenant lease plans.
5. Maintain archive copies of all previous Tenant drawings.
Drawing Review (for adherence in Landlord Criteria).
1. Review and distribute preliminary Tenant plans.
2. Review and distribute final architectural, mechanical, electrical
and structural construction drawings.
3. Final review of Tenant's sign drawings.
4. Final review of Tenant's color/sample boards.
Landlord Criteria for Tenants (if desired by Owner).
1. Preparation of Tenant Handbooks for Retail and Food Court.
2. Answering questions and negotiating interpretation to Landlord's
Criteria.
3. Punch Listing and Follow-Up on Tenant Construction.
B. FEE STRUCTURE*
Drawing Reviews and General Tenant Coordination.
Retail Tenants in previously unoccupied spaces:
<5,000 s.f. $ 3,500.00
>5,000 s.f. 4,500.00
Restaurant Tenants 5,000.00
Inline Food Tenants (Food Court Tenants, if applicable) 3,000.00
Retail Tenants in previously occupied spaces which
are being redeised or will require Landlord work 3,000.00
Retail Tenants in previously occupied spaces not
requiring Landlord work 2,500.00
Retail Tenants in previously occupied spaces performing
minor remodeling and/or storefront renovation 1,500.00
Sign renovation only 500.00
Kiosk Tenants 2,000.00
Related work outside the scope of general Tenant
Coordination Services 60.00/hr.
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CAD Drafting/Design/TLP's, Lease Plans.
TLP Preparation >6,000 s.f. 1,000.00
>3,000 s.f. 600.00
<3,000 s.f. 500.00
Lease Plan Update (Convention) 500.00
(Budget) 250.00
Design/Drafting Services 60.00/hr.
Handbook Preparation
New Handbook (does not include printing costs) $ 25,000.00
* Increased by all Cities "CPI" index annually.