DEVELOPMENT CONSULTING AGREEMENT
THIS DEVELOPMENT CONSULTING AGREEMENT (hereinafter the "Agreement") is
entered into effective this 6th day of February, 2006, by and between
DIVERSIFIED INVESTMENT & MANAGEMENT CORPORATION, a California corporation
(hereinafter "DIMC") and XXXXXXXXXX REALTY GROUP, INC., a Nevada corporation
(hereinafter "Xxxxxxxxxx") and is based upon the following facts and
representations:
A. On or about June 2005 Xxxxxxxxxx acquired those certain
apartment complexes located in Austin, Texas, commonly known
as:
London Square Apartments;
Xxxx Oaks Apartments; and
Ashdale Garden Apartments.
X. Xxxxxxxxxx has entered into a separate contract to have DIMC
act as the property manager for said apartment complexes.
C. The London Square Apartments require extensive renovation work
to bring the apartment complex into first class condition
whereby maximum occupancy and rental rates can be achieved.
The Xxxx Oaks Apartments and the Ashdale Garden Apartments
also require renovation work of a lesser extent in order be
brought into such a first class condition.
D. DIMC has hired a professional consultant to assist with the
renovation work, intends to employ the services of both staff
maintenance personnel, well as third party subcontractors, and
to enter into contracts for labor, material, and other matters
necessary to bring the apartment complexes into a first class
condition.
E. DIMC offers to conduct the contracting, permitting, and
related matters so as to shield Xxxxxxxxxx from direct
liability and to provide Xxxxxxxxxx with the professional
service that such an undertaking entails.
NOW, THEREFORE, the parties hereto agree as follows:
1. DIMC agrees to provide consulting services to Xxxxxxxxxx with
respect to all architectural services, environmental services, soils and ground
testing services, structural engineers, construction contracts and contractors,
construction estimation and bidding, planning and building permit application
services, together with any and all related services to be performed in
connection with the renovation and redevelopment of the London Square
Apartments, the Xxxx Oaks Apartments and/or the Ashdale Garden Apartments
(herein the "Properties"), including, but not limited to the specific services
enumerated above.
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DEVELOPMENT CONSULTING AGREEMENT
2. Xxxxxxxxxx agrees to directly reimburse DIMC for the construction
consultant/supervisor retained by DIMC solely for these services, which
consultant shall require annual reimbursement of Seventy Five Thousand Dollars
($75,000).
3. Xxxxxxxxxx also agrees to pay to DIMC all third party labor and
material costs related to the renovation and/or redevelopment, as well as all
third party fees and costs, related to building permits, plans, drawings, and
similar matters.
4. Xxxxxxxxxx also agrees to pay to DIMC the pro-rata costs of all
maintenance staff and other personnel which DIMC otherwise employs as part of
its management activities, to the extent the same are used for the renovation
and/or redevelopment activities.
5. Xxxxxxxxxx also agrees to pay to DIMC the sum of fifteen percent (15%) of the
renovation amount per month as a general consulting fee, payable on the first
day of each month, during the renovation and/or redevelopment period.
6. DIMC may ask Xxxxxxxxxx for reasonable retainers from time to time
based upon the average expenses incurred in the preceding quarter, or such other
amount as DIMC intends to spend in the upcoming quarter, with DIMC to provide to
Xxxxxxxxxx such reasonable budget estimates and similar matters as Xxxxxxxxxx
may from time to time request.
7. This Agreement shall terminate upon the earlier of (a) completion of
the renovation and/or redevelopment activities at the Properties, or (b) upon
cessation of plans by Xxxxxxxxxx to continue to renovate the Properties as
herein described, by Xxxxxxxxxx giving DIMC at least thirty (30) days advance
written notice; or (c) upon either party giving the other party at least thirty
(30) days written notice of intent to terminate this Agreement.
8. Miscellaneous Provisions:
a. Agreement Binding on Successors. The terms, covenants and
agreements herein contained shall bind and inure to the benefit of Xxxxxxxxxx
and DIMC, and each of their heirs, personal representatives, successors and
assigns, subject to the provisions of this Lease. No rights, however, shall
inure to the benefit of any assignee of DIMC unless the assignment to such
assignee has been approved by Xxxxxxxxxx.
b. Attorneys' Fees. If either party to this Agreement becomes
a party to any litigation concerning this Agreement, or any matter that is the
subject matter of this Agreement, the prevailing party shall be liable to that
party for reasonable attorneys' fees and court costs incurred by it in the
litigation.
c. Sale of Premises. The term "Xxxxxxxxxx" as used in this
Lease shall mean the owner of Xxxxxxxxxx'x estate in and to the Leased Premises.
If the Xxxxxxxxxx'x interest and estate in and to the Leased Premises is sold or
assigned by Xxxxxxxxxx, the seller shall be entirely freed, relieved and
discharged of all covenants, agreements and obligations under this Lease, except
those occurring prior to the date of such sale by Xxxxxxxxxx, and attributable
to Xxxxxxxxxx'x period of ownership of such interest and estate.
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DEVELOPMENT CONSULTING AGREEMENT
d. Notices. Any notice or demand required or permitted by law
or by any of the provisions of this Lease shall be in writing. All notices or
demands by Xxxxxxxxxx to DIMC shall be deemed to have been properly given when
served personally on an executive officer of DIMC or when sent by certified
mail, return receipt requested, postage prepaid, and addressed to DIMC at the
address set forth below. All notices or demands by DIMC to Xxxxxxxxxx shall be
deemed to have been properly given if served personally on an executive officer
of Xxxxxxxxxx, or when sent by certified mail, return receipt requested, postage
prepaid, addressed to Xxxxxxxxxx at the address set forth below. Either party
hereto may change the place to which notices are to be given by advising the
other party in writing. If any notice or other document is sent by mail, as
aforesaid, the same shall be deemed served or delivered forty-eight (48) hours
after the mailing thereof, provided there is regular service by mail, at the
time of such mailing, between the place of mailing and the place to which such
notice or other document is mailed. In lieu of personal service or certified or
registered mail, a notice or demand may be delivered by courier service which
obtains receipt for delivery and the notice or demand shall be deemed delivered
upon the date shown upon such receipt. If more than one individual or entity is
collectively the DIMC under this Lease, service of any notice upon any of said
individuals or entities shall be deemed as serviced upon all of said individuals
and entities which collectively are the DIMC under this Lease.
e. Section Headings. The headings or captions of sections in
this Lease are for convenience and reference only, and they in no way define,
limit or describe the scope or intent of this Lease or the provisions of such
sections.
f. Gender and Interpretation of Terms and Provisions. As used
in this Lease and whenever required by the context thereof, each number,
singular or plural, shall include all numbers, and each gender shall include all
genders. "Xxxxxxxxxx" and "DIMC" as used in this Lease or in any other
instrument referred to in or made a part of this Lease shall likewise include
both the singular and the plural, a corporation, co-partnership, individual or
person acting in any fiduciary capacity as executor, administrator, and trustee
or in any other representative capacity. All covenants herein contained on the
part of DIMC shall be joint and several.
g. Time of Essence. Time is hereby expressly declared to be of the essence of
this Lease and of each and every covenant, term, condition and provision hereof.
h. Impartial Construction. The language in all parts of this
Lease shall be in all cases construed as a whole according to its fair meaning
and not strictly for nor against either Xxxxxxxxxx or DIMC.
i. Waiver. No waiver of any breach of the terms, covenants,
agreements, restrictions or conditions of this Lease shall be construed as a
waiver of any succeeding breach of the same or other covenants, agreements,
restrictions or conditions of this Lease, nor shall consent to any assignment or
sublease be deemed to waive any requirement of consent of Xxxxxxxxxx to any
other assignment or sublease. The consent or approval of either party to or of
any act or matter requiring consent or approval shall not be deemed to waive or
render unnecessary consent to or approval of any subsequent or similar act or
matter.
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DEVELOPMENT CONSULTING AGREEMENT
j. Partial Invalidity. If any term, covenant or condition of
this Lease or the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby and each term, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.
k. Remainder of Managed Properties. Both DIMC and Xxxxxxxxxx
acknowledge and agree that that nothing contained herein shall be construed to
modify any other written agreement between the parties hereto.
l. Quarterly Reports. Not more than thirty (30) days after the
end of each quarter, DIMC shall submit to Xxxxxxxxxx its expense report, and a
statement indicating any retainers taken to defer anticipated expenses.
m. Limitation on Liability. Anything in this Agreement to the
contrary notwithstanding, DIMC agrees that it shall look solely to Xxxxxxxxxx as
a corporation and shall not seek any damages from any officer or director of
Xxxxxxxxxx.
n. Waiver of Jury Trial. The parties hereto shall and they
hereby do waive trial by jury in any action, proceeding or counterclaim brought
by either of the parties hereto against the other on any matters whatsoever
arising out of or in any way connected with this Lease, the relationship of
Xxxxxxxxxx and DIMC, DIMC's use or occupancy of the Leased Premises, and/or any
claim or injury or damage.
o. Law Governing. This Agreement shall be governed by the laws
of the State of California.
p. Amendment. No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties hereto or their
respective successors-in-interest.
q. Notices. All notices shall be sent to the following
parties:
Xxxxxxxxxx Realty Group, Inc.
Attn: Xx. Xxxxxx Xxxxxx
000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Diversified Investment & Management Corporation
Attn: Xxxxx X. Xxxxx, Esq.
000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
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DEVELOPMENT CONSULTING AGREEMENT
Or such other address as the party may designate in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement at
South San Francisco effective the date first written above.
XXXXXXXXXX REALTY GROUP, INC.,
a Nevada corporation
/s/ Xx. Xxxxxx Xxxxxx
-----------------------------
By: Xx. Xxxxxx Xxxxxx
Its: President
DIVERSIFIED INVESTMENT
& MANAGEMENT CORPORATION,
a California corporation
/s/ Xxxxx X. Xxxxx
-----------------------------
By: Xxxxx X. Xxxxx
Its: General Counsel
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DEVELOPMENT CONSULTING AGREEMENT
