Exhibit 10.18
PROJECT CONSULTING AND MANAGEMENT AGREEMENT
THIS PROJECT CONSULTING AND MANAGEMENT AGREEMENT (hereinafter the
"Agreement") is made as of the 28th day of September, 1998, by and between
CONSTELLATION PROPERTIES, INC. (hereinafter "Owner"), and CORPORATE OFFICE
MANAGEMENT, INC., a Maryland Corporation (hereinafter "Manager").
W I T N E S S E T H:
WHEREAS, Owner through its various subsidiaries and affiliates is the
owner of a portfolio of properties and projects (both vacant land and buildings
in construction) located in the Central Maryland area (hereinafter the
"Properties"), the exact locations and designations of the Properties being
known by the parties hereto;
WHEREAS, Owner is managing its ownership of the Properties, including
the planning and development of the Properties for residential, commercial and
industrial uses; and
WHEREAS, Owner and Manager acknowledge and agree that the following
projects are included, among others, within the Properties and are currently in
various stages of development by the Owner through the specified subsidiaries
and affiliates: (i) NBP IV, LLC is the owner of an office building known as 000
Xxxxxxxx Xxxxxxxx Xxxxxxx which project is nearing completion; needing only
certain interior, elevator and exterior landscaping work to be completed; (ii)
Constellation Gatespring, LLC is the owner of an office building project known
as Woodlands One which project is nearing completion; (iii) Piney Orchard
Village Center, LLC is the owner of a retail strip project known as Piney
Orchard Village Center which project is under construction with completion
scheduled for completion December 31, 1998; and (iv) Constellation Springfield,
LLC is the owner of 60% LLC interest in another entity (Xxxx-Spring TSA, LLC)
which is the owner of a retail shopping center in Springfield, Virginia, which
project is under construction with completion scheduled for December 31, 1998 (
the foregoing items (i) through (iv) collectively referred to herein as the
"Under Development Projects").
WHEREAS, Owner desires to employ Manager to provide ongoing planning,
management and consulting services with respect to the management of Owner's
Properties, including management of the completion of development of the Under
Development Projects;
WHEREAS, Owner desires to employ Manager as set forth herein and
Manager is willing to manage same in accordance with the terms set forth herein.
NOW, THEREFORE, in consideration of the sums of money to be paid by
Owner to Manager, and in further consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Recitals. Each party represents to the other that the recitals set
forth above contain no material misrepresentation of fact.
2. Employment of Manager. Owner hereby retains Manager, and Manager
hereby agrees, to provide to Owner consulting services and general management
and administration services with respect to the Properties and to initiate, and
thereafter, to diligently coordinate, supervise and pursue all steps necessary
to implement development plans for the various Properties upon such schedules as
are reasonably approved from time to time by Owner, upon the terms and
conditions, and for the term and compensation hereinafter set forth.
3. Term. The term of this Agreement, and of the employment of Manager
by Owner pursuant hereto, shall be for the period commencing as of the date
hereof and ending on the date that is the last day of the month that is eighteen
(18) months after the date of this Agreement ("Term").
4. Services. Subject to the direction and control of Owner, the
consulting, development, management and administrative services to be rendered
by Manager shall, when appropriate, include, but not be limited to, each of the
following services:
(a) Preliminary site analysis and project planning.
(b) Coordinate and manage the process of securing preliminary
approval of the land use plans and the preliminary engineering criteria.
(c) Assist Owner in retaining appropriate consultants related
to the various Properties including, but not limited to, landscape architect,
civil engineer, architect, traffic consultant, soil engineer, attorney,
accountant, marketing consultant, appraiser and surveyor and thereafter, act as
Owner's representative's contact with such consultants regarding the development
of the Properties.
(d) Act as Owner's representative and liaison with community
and other civic groups in connection with the development of the Properties.
(e) Assist in the preparation of cost line budgets and cash
flow projections for the development of the Properties.
(f) Prepare and monitor compliance with development schedules
approved by Owner.
(g) Coordinate the securing of all appropriate and necessary
governmental approvals relating to the development plans for the Properties.
(h) Consult with respect to the management of the Properties
which are not in development at any one time.
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(i) Consult with engineers, lenders and attorneys the securing
of all permits and the posting of all security required for the development of
the Properties.
(j) Consult with respect to the issuance of all construction
bid documents, provide analysis of bids and recommendations on awards of
contracts, and assist in the issuance of contracts for all construction work.
(k) Assist in the coordination of construction activities
relating to the Project by visiting the site during critical phases of
construction and by meeting with County officials, inspectors, contractors,
subcontractors and construction supervisors.
(l) Coordinate land development documentation with marketing
programs including, but not limited to, the preparation of any homeowner's
association documents, cross-easements, declarations of covenants and
restrictions and deeds to governmental bodies for roads, recreation spaces and
open spaces.
(m) Advise on the status of all construction/building permits
and the release of all security posted in connection with the development of the
Properties.
(n) Provide advice on the overall marketing and publicity
program for the Properties including advertising, signage, promotional brochures
and model homes parks.
(o) Meet regularly with designated representatives of Owner
and furnish summary reports on at least a monthly basis reflecting the status of
overall development.
With regard to the above enumerated services to be performed by Manager
hereunder it is agreed that the parties will regularly consult and mutually and
reasonably agree upon the scope, timing, order of importance and overall
direction of the services.
Notwithstanding anything herein to the contrary, with respect to the
Under Development Projects, Manager shall provide all those management services
reasonably required by Owner (or Owner's subsidiary or affiliate which holds
title to each of the Under Development Projects) in connection with bringing
each of the Under Development Projects to completion as evidenced by the
obtaining for each Under Development Project of a certificate of use and
occupancy or similar governmental permit. The work of Manager shall generally be
described as the performance of all those managerial and oversight functions
reasonably required so as to bring each Under Development Project to physical
completion on a timely basis and in line with budgeted costs.
5. Costs and Expenses. Owner shall pay, and Manager shall have no
responsibility whatsoever for, the payment of any independent costs or
out-of-pocket expenses incurred in connection with the work to be performed by
it hereunder. Manager shall be responsible only for its own overhead expenses
incurred in the performance of its obligations under this Agreement. Manager
shall not authorize or incur outside costs in excess of $5,000 for any one item
or service without the prior written approval of Owner. Notwithstanding anything
herein to the contrary,
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with regard to the Under Development Projects, in performing its management
services hereunder Manager shall use its good faith, commercially reasonable
efforts to consult with Owner to save costs and to bring each Under Development
Project to completion at a cost within prior approved budgeted sums. Under no
circumstances shall Manager authorize or permit additional costs above budget or
changes to any Under Development Project that would increase costs without same
being approved in advance and in writing by the Owner of the particular Under
Development Project.
6. Owner's Responsibility. Owner shall:
(a) Reimburse Manager for all independent costs and
out-of-pocket expenses properly incurred and approved (if required) by Owner in
accordance with the terms hereof.
(b) Pay to Manager for its services as rendered hereunder the
total sum of $2,000,000. This sum shall be paid as follows on a monthly basis:
(i) $250,000 per month from the date hereof through
the last day of the third (3rd) calendar month after the date hereof;
(ii) $150,000 per month from the first day of the
fourth (4th) calendar month after the date hereof through the last day of the
sixth (6th) calendar month after the date hereof;
(iii) $100,000 per month from the first day of the
seventh (7th) calendar month after the date hereof through the last day of the
tenth (10th) calendar month after the date hereof;
(iv) $50,000 per month from the first day of the
eleventh (11th) calendar month after the date hereof through the last day of the
eighteenth (18th) calendar month after the date hereof.
(c) Indemnify and hold Manager and all of its officers,
agents, servants and employees, harmless from and against any claims, actions,
damages, losses and expenses (including attorney's fees) of any kind whatsoever
arising out of or in connection with the work and services performed by Manager
hereunder, except Owner shall not be liable under this clause if said liability
shall arise by reason of the gross negligence or intentional misconduct of
Manager. Owner agrees that it will have Manager added as a named insured on the
public liability policies acquired by the various owners of the Properties.
(d) Cooperate with Manager in expediting the performance of
its work hereunder. Owner shall cooperate with Manager by (i) providing
information, (ii) providing funds required pursuant to invoices from and
contract with providers of services and suppliers of materials with respect to
the various Properties, (iii) rendering decisions on matters affecting the
development of the various Properties, all within the timeframes and in the form
reasonably recommended by Manager.
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7. Limitation on Manager's Responsibility. It is expressly understood
and agreed between the parties hereto, that notwithstanding anything to the
contrary in this Agreement, (i) Manager does not warrant, or guarantee the
performance of any professional or contractor employed in connection with the
Properties or warrant or guarantee the performance of under any construction
contracts relating to the Properties. Moreover the consulting development,
management and administrative services rendered by Manager hereunder will
involve recommendations as to how the various Properties might be developed and
estimates made by Manager as part of its development management services, and
the assumptions upon which they are based, represent Manager's judgment based
upon available information as of the date of preparation. No such
recommendation, estimate or assumption is intended to constitute a warranty,
guarantee or promise by Manager that the stated objectives can be achieved in
the manner described. Manager shall not be liable to Owner if any of Owner's
objectives with respect to the Properties are not achieved either in whole or in
part or in a timely manner or otherwise.
8. Default. If either party to this Agreement defaults in the
performance of its obligations under this Agreement after notice and opportunity
to cure set forth below in Section 8, the non-defaulting party shall have all
rights and remedies available to it at law or in equity on account of such
default, provided, however, that Owner shall not have the right to seek the
remedy of termination of this Agreement unless and until Manager has been given
the notice and opportunity to cure set forth below in this Section 8, and
thereafter, a court of competent jurisdiction has rendered a final,
non-appealable decision holding that the Manager has committed a material breach
of this Agreement. Anything contained in this Agreement to the contrary
notwithstanding, any act or omission which would otherwise be a default under
this Agreement by either party shall not be a default unless the non-defaulting
party shall have given the defaulting party notice of such alleged default, and
the defaulting party shall have failed to cure such alleged default within
thirty (30) days after such notice, or if the alleged default is one which
cannot with due diligence be cured within thirty (30) days, the defaulting party
shall have failed to commence curing such default within such thirty (30) day
period.
9. Notices. All notices required or provided for in this Agreement, if
hand delivered shall be deemed to have been given and received on the date hand
delivered to the party receiving same. If the United States mails are used,
notices shall be sent certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed to have been given and received on the
second (2nd) business day from the date deposited in the United States mails
addressed as follows:
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If to Owner:
Constellation Properties, Inc.
Attention: Xx. Xxxxxx X. Xxxxx
0000 Xxxxxx Xxxx Xxxxx - Xxxxx 000
Xxxxxxxx, XX 00000
and
Xxx X. Xxxxxxxxxx, Esquire
Constellation Holdings, Inc.
000 X. Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
If to Manager:
Corporate Office Management, Inc.
Attention: Xx. Xxxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx - Xxxxx 000
Xxxxxxxx, XX 00000
and
Xx. Xxxx X. Xxxxxx, III
Corporate Office Properties Trust
000 Xxxx Xxxxxx. Xxxxx 000
Xxxx Xxxxxx, XX 00000
Each party shall have the right to designate a different address,
provided the party's new address is contained in a written notice to the other
party.
10. Miscellaneous.
(a) This Agreement contains the final understanding of the
terms and provisions between the parties and supersedes any prior agreement
among the parties.
(b) This Agreement shall be interpreted under the laws of the
State of Maryland.
(c) If any provision of this Agreement is found to be
unenforceable or void, the remaining provisions of this Agreement shall be
enforceable between the parties.
(d) This Agreement may not be assigned by either party hereto
without the consent of the other party, which shall not be unreasonably withheld
or delayed, except that
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either party may assign to a subsidiary or affiliate of it without the prior
written consent of the other party.
(e) Nothing in the provisions of this Agreement shall be
deemed in any way to create between the parties hereto any relationship of
partnership, joint venture or association, and the parties hereto hereby
disclaim the existence thereof.
(f) Each party hereto warrants and represents that the person
who has signed this Agreement on its behalf is duly authorized to so sign, and
this Agreement is the legal, valid and binding agreement of such party,
enforceable against such party, in accordance with its terms.
(g) Manager agrees that it will not disclose confidential
information furnished to it by Owner as a consequence of its employment under
this Agreement.
IN WITNESS WHEREOF, the parties hereto sign and seal this Agreement on
the day and year first above written.
WITNESS CONSTELLATION PROPERTIES, INC.
By: (SEAL)
-------------------------------- -----------------------------
CORPORATE OFFICE MANAGEMENT, INC.
By: (SEAL)
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