Duties and Responsibilities of Manager. Tenant hereby appoints Manager as the sole and exclusive manager of the Facility and grants Manager all the authority necessary to carry out, in the manner deemed best by Manager and consistent with the objectives and obligations set forth in this Agreement, the management of the Facility on behalf of the Tenant. Notwithstanding anything provided herein to the contrary, Tenant hereby retains the control and authority (a) required by law for Tenant to maintain the license from the State of Iowa that is required for the operation of the Facility as an assisted living facility, and (b) not otherwise specifically delegated to Manager hereunder. Manager and Tenant are not partners or joint-venturers and it is agreed that Manager is acting solely as the agent of Tenant in performing services or acquiring assets or supplies as provided hereunder. Tenant shall honor, as its own, all contracts, agreements, and commitments entered into by Manager with respect to the management and operation of the Facility so long as they are required to meet the Annual Budget and comply with the provisions of Section 2.03(e). Provided that Manager has provided notice to Tenant of an insufficient balance in the Operating Account in accordance with the requirements of this Agreement, Manager shall not be required to make monetary expenditures on Tenant’s behalf to the extent that the Operating Account does not contain sufficient funds to cover such expenditures. As the exclusive manager of the Facility, Manager shall perform the following, but only with respect to the Facility and subject to the rights and responsibilities of the Tenant: (a) Manage all aspects of the Facility in a professional, competent and business-like manner; (b) Recruit, hire, train and supervise Facility Employees, with no such personnel being employed by Tenant; (c) Manage the available cash flow of the Facility, including, without limitation, (i) timely billing of all residents and or other third-party payors for all services or items provided by the Facility, (ii) timely paying all Operating Expenses from available cash flow; (d) Prepare, keep and provide Tenant with access during regular business hours to all contracts, Books and Records, documents, policies and other information necessary for the lawful operation and sound financial management of the Facility; (e) As an Operating Expense and in accordance with the Annual Budget, purchase and keep the Facility furnished with all necessary furnishings, Fixed Asset Supplies, equipment and Inventories and services from third parties; provided, however, that no material (defined as more than the greater of 5% and Five Thousand and NO/100 Dollars ($5,000.00) of each budgeted Operating Expense line item at the Facility without Tenant’s prior approval as set forth in (o) below) non-budgeted expenditure for any such item shall be made without Tenant’s prior written approval, which approval shall not be unreasonably withheld or delayed, except expenditures reasonably necessary in the opinion of Manager to maintain services to residents and patients as a matter of life safety; (f) Provide a qualified full-time Administrator at the Facility who will assume general operational responsibility for such Facility (whose expense shall be an Operating Expense); provide notice including a summary of such person’s prior experience to Tenant in advance of any change in the Administrator, provided that Tenant shall have the right to review any person hired by Manager for such administrator position and to consult with Manager regarding such hiring (which right shall not be deemed to be a right of Tenant to approve such Administrator); recruit, hire, train, promote, direct and terminate the employment of all other personnel necessary to maintain and operate the Facility; establish performance standards, salary and compensation scales, promotion policies, fringe benefit arrangements, and other personnel policies and guidelines, all in accordance with the Annual Budget; provided, however, that no material non-budgeted personnel expense shall be incurred without Tenant’s prior written approval; provide management support to the Administrator; and provide such other supervision, management and financing direction as may be required for the Administrator efficiently to perform his or her duties and responsibilities; (g) As an Operating Expense, comply with Manager’s accounting and reporting obligations as set out in this Agreement; (h) As an Operating Expense, prepare and file in a timely manner in accordance with applicable regulations, all necessary statistical reports (specifically including, but not limited to, payroll, sales, use and occupancy tax reports and returns) and data to meet all local, state and federal regulatory requirements; provided, however, that nothing contained herein shall be deemed or construed to require Manager to prepare or file Tenant’s local, state or federal income tax returns or schedules thereto; (i) Process all insurance claims for the Facility; provided, however, that nothing contained herein shall be deemed or construed to require Manager to prepare or file residents’ insurance claims; (j) Collect the Revenues; deposit all such funds received by Manager for or on behalf of Tenant in a Tenant designated bank account (“Operating Account”) established by Tenant for such purpose, as to which Manager shall have the right to deposit and withdraw funds, pay out of such funds all Operating Expenses, its compensation and any other sums due it from Tenant, and all other sums properly payable pursuant to any of the provisions hereof (all expenditures authorized hereby being considered Operating Expenses to be paid from Tenant’s funds received by Manager); and hold, remit or expend the balance of such funds, if any, as Tenant may direct provided, further, that funds may not be withdrawn by Tenant if the aggregate minimum cash balance required by Section 2.02(d) hereof would be impaired thereby; (k) As an Operating Expense and in accordance with the Annual Budget, engage or utilize counsel satisfactory to Tenant, defend any legal proceedings or claims relating to operation of the Facility, and cause such legal proceedings to be instituted as may be necessary to enforce payment of charges or compliance with other terms of admission agreements, or to dispossess residents and patients involving setoffs of damage claims; provided, however, that no material non-budgeted legal expense shall be incurred without Tenant’s prior written approval; (l) As an Operating Expense and in accordance with the Annual Budget, develop, implement, manage and supervise marketing and public relations programs for the Facility as follows; provided, however, that such programs shall be subject to Tenant’s prior written approval: (i) develop a marketing plan, encompassing an advertising plan, advertising, marketing, public relations, and networking; (ii) develop and design marketing and advertising materials; (iii) construct appropriate signage on the Facility property pursuant to any local governmental requirements; (iv) prospect database management; and (v) conduct surveys of residents and their families regarding selection of the Facility. (m) As an Operating Expense: (i) file and pay all taxes, including but not limited to real and personal property taxes (as applicable), and assessments (other than income, franchise and similar taxes) on the Facility; (ii) pay all premiums for insurance on the Facility; and (iii) pay such reserves as Tenant may direct; (n) As an Operating Expense, prepare and deliver to Tenant the following statements for the Facility prepared in accordance with GAAP and applied consistently from period to period (which shall be certified by an officer of Manager as being true and accurate in all material respects) by the tenth (10th) Business Day of each calendar month during the Term, except for the rent roll, which shall be submitted on or before the fifth (5th) Business Day of each calendar month during the Term: (i) Balance sheet and income statement (in Microsoft Excel format); (ii) Trial balance with 3 columns (balance forward, net debits/credit, and ending balance in Microsoft Excel format); (iii) Rent roll; (iv) Report of daily census for the month; (v) Marketing report; (vi) Twelve month rolling cash flow projection; (vii) Detail of Management Fee calculations; (viii) Capital expenditure reconciliation to the approved capital budget in the Annual Budget; (ix) Disclosure of any material communications with regulatory agencies and state surveys; (x) Equity intercompany reconciliation, if applicable; (xi) Most recent sales tax filings with the monthly reporting submittals to help validate to our tax department that you are current with filings; (xii) Reasonably cooperate with and assist Tenant in satisfying any requirements of lender providing financing for the Facility; and (xiii) Any other information relating to the Facility reasonably requested by Tenant. (o) Manager shall prepare and submit to Tenant for Tenant’s approval at least sixty (60) days prior to the commencement of each calendar year, an annual plan and budget to cover all anticipated Revenues and Operating Expenses of the Facility for that calendar year, including capital improvements (the “Annual Budget”). Tenant shall have thirty (30) business days to approve the Annual Budget by written notice. If the Tenant does not approve the Annual Budget, the Tenant and Manager agree to participate in telephone conferences or meet at the office of Manager to conduct negotiations in good faith and use commercially reasonable efforts to arrive at a mutually acceptable Annual Budget. During such negotiations, each party agrees to apply reasonable expectations to projections of Operating Expenses and Revenues for the next calendar year. Until the current calendar year Annual Budget is resolved, the prior calendar year Annual Budget shall apply for the current calendar year with respect to those line items that are subject to dispute, with Operating Expenses adjusted by increases in the CPI (as hereafter defined) from the prior calendar year; otherwise all budgeted items approved by Tenant shall apply for such calendar year. Except as expressly provided for in this Agreement and except for items relating to the health and safety of Facility residents or employees, otherwise herein, Manager shall not make expenditures for any item aggregating materially in excess of the amount budgeted, defined as more than the greater of five percent (5%) and Five Thousand and NO/100 Dollars ($5,000.00) of each budgeted Operating Expense line item for the Facility without Tenant’s prior written approval. The Annual Budget shall also include Manager’s recommendations and suggestions for the rental rates, ancillary service fees, and other costs and charges to the residents of the Facility (and, in such regard, Manager shall monitor rates in the applicable service areas, and assist Tenant in obtaining approval of appropriate rates from governmental and third-party paying agencies); the salaries and fringe benefits of all Facility Employees; and major purchase contracts for supplies. Manager agrees to use its best efforts to maintain levels of rates and charges sufficient to assure the operation of the Facility in a first-class manner, and to provide for the payment of all costs of operation of the Facility, specifically including, but not limited to, Base Management Fee. Manager shall, at all times, maintain full and complete documentation regarding all of its actions taken to fulfill its duties as manager of the Facility. All Books and Records and reports maintained or prepared by Manager for or in connection with the operation of the Facility shall be Tenant’s property. During the term hereof, Tenant shall, at all reasonable times, and at its expense, have the right to inspect and audit such Books and Records and reports, and to inspect all parts of the Facility. (p) As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Manager as being true and accurate in all material respects) and management status reports of the Facility, to be submitted to Tenant within ten (10) days after the end of each calendar quarter. (i) All balance sheet reconcilements; (ii) Search for unrecorded liabilities; (iii) Signed Certification statement; and (iv) Manager will cooperate in providing other reports as reasonable and necessary which are requested by the Tenant. (q) As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Manager as being true and accurate in all material respects) and management status reports of the Facility, to be submitted to Tenant within seventy-five (75) days after the end of each calendar year, and each of which to be subject to an audit, at Tenant’s cost, by a firm of accountants selected by Tenant, at Tenant’s expense (but not to be used in computing the Management Incentive Fee). (i) Balance sheet and income statement; (ii) Revenues, Operating Expenses, Excess Cash Flow and NOI; (iii) Calculations of Management Fees and Subordinated Base Management Fee; (iv) Fixed asset additions; (v) Capital expense reconciliation to the capital budget in the Annual Budget; (vi) Communications with any regulatory agencies; and (vii) Manager will cooperate in providing other reports as reasonable and necessary which are requested by the Tenant. (r) Within fifteen (15) days after the end of each calendar quarter, Manager shall provide Owner with a certification executed by the controller or president of Manager in the form attached hereto as Exhibit “B”; (s) Provide performance standards and review procedures for the Administrator and obtain and maintain licenses and staff to deliver the appropriate care and services of all residents of the Facility; (t) Any other services related to the operation of the Facility as requested by Tenant from time to time; (u) Obtain and keep in full force and effect in the name of Tenant any and all licenses and permits necessary for the operation of the Facility. Manager shall not be required to use its own funds to pay any liabilities or obligations related to the operation of the Facility except to cover its own costs and expenses in providing corporate services; (v) Manager shall provide written notice to Tenant, upon Tenant’s request, pursuant to Section 8.12 in the event that there is any change in the ownership of Manager, whether direct or indirect, regardless of whether such change constitutes a change in Control. Manager shall provide such notice to Tenant no later than ten (10) Business Days following its receipt of Tenant’s request. Manager shall only be obligated to respond to one (1) such request from Tenant every calendar quarter, unless Tenant’s request is in response to a request for such information from a third party to whom Tenant has an obligation to respond, in which case Manager shall provide written notice as outlined in this paragraph regardless of whether Manager has responded to a previous request during such calendar quarter; and (w) Manager shall maintain and provide to Tenant a complete copy of Manager’s “Emergency Response Plan” or other documented crisis and/or disaster communication and management plan for the Facility, in form and substance required by applicable Legal Requirements for assisted living facilities, at the following times: (1) annually, at the same time as Manager submits its Annual Budget to Tenant; (2) no later than ten (10) Business Days following its receipt of Tenant’s request for same; and (3) upon the expiration of the Term or earlier termination of this Agreement.
Appears in 2 contracts
Samples: Management Services Agreement, Management Services Agreement (CNL Healthcare Trust, Inc.)
Duties and Responsibilities of Manager. Tenant hereby appoints Manager (a) Except as set forth in Sections 9.4 and 9.5, or as otherwise expressly provided in this Agreement and subject at all times to the sole and exclusive manager limitations of the Facility Initial Budget or any subsequent Approved Annual Budget, Manager shall be responsible for, and grants Manager all is hereby authorized to perform the authority following acts to the extent necessary to carry out, in out the manner deemed best by Manager and consistent with business affairs of the objectives and obligations set forth in Subsidiaries under this Agreement:
(i) Protect and preserve the titles and interests of the Subsidiaries with respect to any assets owned directly or indirectly by the Company and the Subsidiaries including, without limitation, the management of Hotels;
(ii) Pay all property taxes and assessments, ground rents, rents and other impositions applicable to the Facility Hotels and/or such other assets owned by the Subsidiaries;
(iii) Execute and/or modify on behalf of the Tenant. Notwithstanding anything provided herein any Subsidiary, such Approved Contracts and other documents relating to the contraryday-to-day ownership and operation of the Hotels;
(iv) Each Fiscal Year, Tenant hereby retains commencing with the control Fiscal Year beginning on January 1, 2012, prepare drafts of an annual business plan and authority (a) required by law budget for Tenant to maintain the license from Company and the State of Iowa that is required Subsidiaries, as applicable, containing an operating and capital expenditure budget, a detailed marketing plan and other items projected for the operation of the Facility Company, the Hotel Maya and the Residence Inn. Each draft budget shall be delivered to Managing Member (or the Members, in the event that CW Member is removed as an assisted living facility, and (bManaging Member) not otherwise specifically delegated to Manager hereunder. Manager and Tenant are not partners or joint-venturers and it is agreed that Manager is acting solely as later than sixty (60) calendar days before the agent of Tenant in performing services or acquiring assets or supplies as provided hereunder. Tenant shall honor, as its own, all contracts, agreements, and commitments entered into by Manager with respect to the management and operation beginning of the Facility so long as they are required to meet Fiscal Year in question. Managing Member (or the Annual Budget and comply with the provisions of Section 2.03(e). Provided that Manager has provided notice to Tenant of an insufficient balance Members, in the Operating Account event that CW Member is removed as Managing Member) shall approve or disapprove such draft budget within thirty (30) days after receipt thereof (which approval may be granted or withheld in accordance with the requirements of this Agreement, Manager shall not be required to make monetary expenditures on Tenantsuch Member’s behalf to the extent that the Operating Account does not contain sufficient funds to cover such expenditures. As the exclusive manager of the Facility, Manager shall perform the following, but only with respect to the Facility sole and subject to the rights and responsibilities of the Tenant:
(a) Manage all aspects of the Facility in a professional, competent and business-like manner;
(b) Recruit, hire, train and supervise Facility Employees, with no such personnel being employed by Tenant;
(c) Manage the available cash flow of the Facility, including, without limitation, (i) timely billing of all residents and or other third-party payors for all services or items provided by the Facility, (ii) timely paying all Operating Expenses from available cash flow;
(d) Prepare, keep and provide Tenant with access during regular business hours to all contracts, Books and Records, documents, policies and other information necessary for the lawful operation and sound financial management of the Facility;
(e) As an Operating Expense and in accordance with the Annual Budget, purchase and keep the Facility furnished with all necessary furnishings, Fixed Asset Supplies, equipment and Inventories and services from third partiesabsolute discretion); provided, however, the Members and Managing Member agree and acknowledge that, with respect to the Residence Inn, such approval is subject to the terms and conditions of the Marriott Management Agreement. Promptly after any disapproval by Managing Member, Manager shall, as soon as possible, submit a revised draft budget to Managing Member (or the Members, in the event that no material CW Member is removed as Managing Member) addressing the portions thereof disapproved by Managing Member (defined and the parties shall repeat the foregoing until a draft budget has been approved by Managing Member). Once a draft budget is approved by Managing Member (or the Members, in the event that CW Member is removed as more than Managing Member), it shall be the greater “Approved Annual Budget” for the Company and/or such Subsidiary, as applicable, for the Fiscal Year in question; provided, however, in the event that Managing Member and Manager are unable to resolve any dispute with respect to any item to which Managing Member has objected, Manager shall conduct operations of 5% and Five Thousand and NO/100 Dollars the respective Subsidiary with respect to those categories that are in dispute based on the lesser of the amount ($5,000.00i) of each budgeted Operating Expense line item at the Facility without Tenant’s prior approval as set forth in such Fiscal Year’s Forecast Budget (o) as defined below) non-budgeted expenditure or in the event of any dispute after Fiscal Year 2015, the Approved Annual Budget for the immediately prior Fiscal Year (plus a reasonable increase based on the CPI to allow for inflation, not to exceed 3%); and (ii) the amount set forth in the applicable draft budget. Except as otherwise permitted or required under the Maya Management Agreement and/or the Marriott Management Agreement or as required for Preservation Costs actually incurred by the Company or any such Subsidiary, no modification of any item in or aspect of the Approved Annual Budget shall be made without Tenant’s prior written approvalthe approval of Managing Member (or the Members, in the event that CW Member is removed as Managing Member) (which approval may be granted or withheld in such Member’s sole and absolute discretion) provided that any and all modifications to the Initial Budget or any subsequent Approved Annual Budget shall not be unreasonably withheld require the prior approval of Managing Member (or delayedthe Members, except expenditures reasonably necessary in the opinion event that CW Member is removed as Managing Member). For avoidance of Manager to maintain services to residents and patients as a matter doubt, any dispute over the calculation of life safety;
(f) Provide a qualified full-time Administrator at any amounts set forth in the Facility who will assume general operational responsibility for such Facility (whose expense Initial Budget or any Approved Annual Budget shall be an Operating Expense)determined in accordance with the procedures set forth in Section 9.13; provide notice including a summary of such person’s prior experience to Tenant in advance of any change provided, however, in the Administratorevent that Managing Member and Manager cannot mutually agree on a specific line item or group, provided that Tenant neither Managing Member nor Manager shall have the right to review any person hired by Manager subject such dispute to arbitration under Section 9.13 and the parties sole recourse shall be to revert back to the applicable Forecast Budget or Approved Annual Budget for such administrator position the immediately prior Fiscal Year as set forth above. Notwithstanding the foregoing, the Members have mutually agreed upon the initial operating budget (prepared on a monthly basis) for the Company and to consult with Manager regarding such hiring each Subsidiary, including estimated receipts and expenses and other items projected for the operation of the Company, the Hotel Maya and the Residence Inn, as more specifically set forth on Exhibit “D” attached hereto (which right the “Initial Budget”). The Initial Budget shall not be deemed to be a right apply from the Effective Date through December 31, 2011. In addition, the Members have mutually agreed upon the annual forecasts of Tenant to approve such Administrator); recruitthe Company and each Subsidiary, hire, train, promote, direct and terminate the employment of all other personnel necessary to maintain and operate the Facility; establish performance standards, salary and compensation scales, promotion policies, fringe benefit arrangementsincluding an annual operating budget, and estimated receipts and expenses and other personnel policies items projected for the operation of the Company, the Hotel Maya and guidelinesthe Residence Inn, all in accordance with as applicable, for Fiscal Years 2012, 2013, 2014 and 2015 each as more specifically set forth on Exhibit “E” attached hereto (each, a “Forecast Budget”);
(v) Make payments approved under the Initial Budget or any subsequent Approved Annual Budget; provided, however, all disbursements from the accounts of the Subsidiaries shall require the written approval of an authorized representative of Managing Member (except for disbursements specifically provided for in the Initial Budget or any subsequent Approved Annual Budget); provided further, that no material non-budgeted personnel expense Manager shall automatically lose all signature rights at any time upon Manager’s removal pursuant to and in accordance with Section 9.2 (and all such signature rights shall thereupon vest in the replacement Manager or Managing Member, as applicable) and such signature rights of Manager may also be incurred without Tenant’s prior written approvalsuspended by Managing Member during any period (A) after the delivery of a notice of failure to perform (as set forth in Section 9.2(c)) through the date a final decision or judgment is rendered by the arbitrator (unless Manager is removed, in which case, Manager shall automatically lose all signature rights); provide management support or (B) in the event of an Ensemble Member Purchase Default. Each bank or other institution with which any account of the Company is maintained shall specifically recognize the right of Managing Member to add or delete the Administrator; and provide such other supervisionsignature rights of any of the Members. At the request of Managing Member, management and financing direction Manager shall submit to Managing Member on a monthly basis a requisition form, using the Initial Budget or any subsequent Approved Annual Budget as may be required a guide, specifically itemizing proposed expenditures for the Administrator efficiently to perform his or her duties and responsibilitiessucceeding month, together with a report of the checks issued during the previous month;
(gvi) As an Operating Expense, comply with Manager’s accounting Supervise the performance of and reporting obligations under (A) the Ground Leases; (B) the DoubleTree Franchise Agreement; (C) the Existing Loan Documents (and any subsequent indebtedness); (D) the Marriott Management Agreement; and (E) any agreements or contracts approved as set out in this Agreement;
part of the Initial Budget and each subsequent Approved Annual Budget (h) As an Operating Expense, prepare and file in a timely manner in accordance with applicable regulations, all necessary statistical reports (specifically including, but not limited to, payroll, sales, use and occupancy tax reports and returns) and data to meet all local, state and federal regulatory requirementsthe “Approved Contracts”); provided, however, that nothing contained herein Manager shall be deemed or construed take no action and shall have no rights to require Manager to prepare or file Tenant’s local, state or federal income tax returns or schedules thereto;
(i) Process all insurance claims for the Facility; provided, however, that nothing contained herein shall be deemed or construed to require Manager to prepare or file residents’ insurance claims;
(j) Collect the Revenues; deposit all such funds received by Manager for or act on behalf of Tenant in a Tenant designated bank account (“Operating Account”) established Owner under the Maya Management Agreement as such rights are expressly reserved by Tenant for such purpose, as to which Manager shall have the right to deposit and withdraw funds, pay out of such funds all Operating Expenses, its compensation and any other sums due it from Tenant, and all other sums properly payable Managing Member pursuant to any of the provisions hereof (all expenditures authorized hereby being considered Operating Expenses to be paid from Tenant’s funds received by Manager); and hold, remit or expend the balance of such funds, if any, as Tenant may direct provided, further, that funds may not be withdrawn by Tenant if the aggregate minimum cash balance required by Section 2.02(d) hereof would be impaired thereby;
(k) As an Operating Expense and in accordance with the Annual Budget, engage or utilize counsel satisfactory to Tenant, defend any legal proceedings or claims relating to operation of the Facility, and cause such legal proceedings to be instituted as may be necessary to enforce payment of charges or compliance with other terms of admission agreements, or to dispossess residents and patients involving setoffs of damage claims; provided, however, that no material non-budgeted legal expense shall be incurred without Tenant’s prior written approval;
(l) As an Operating Expense and in accordance with the Annual Budget, develop, implement, manage and supervise marketing and public relations programs for the Facility as follows; provided, however, that such programs shall be subject to Tenant’s prior written approval:
(i) develop a marketing plan, encompassing an advertising plan, advertising, marketing, public relations, and networking;
(ii) develop and design marketing and advertising materials;
(iii) construct appropriate signage on the Facility property pursuant to any local governmental requirements;
(iv) prospect database management; and
(v) conduct surveys of residents and their families regarding selection of the Facility.
(m) As an Operating Expense: (i) file and pay all taxes, including but not limited to real and personal property taxes (as applicable), and assessments (other than income, franchise and similar taxes) on the Facility; (ii) pay all premiums for insurance on the Facility; and (iii) pay such reserves as Tenant may direct;
(n) As an Operating Expense, prepare and deliver to Tenant the following statements for the Facility prepared in accordance with GAAP and applied consistently from period to period (which shall be certified by an officer of Manager as being true and accurate in all material respects) by the tenth (10th) Business Day of each calendar month during the Term, except for the rent roll, which shall be submitted on or before the fifth (5th) Business Day of each calendar month during the Term:
(i) Balance sheet and income statement (in Microsoft Excel format);
(ii) Trial balance with 3 columns (balance forward, net debits/credit, and ending balance in Microsoft Excel format);
(iii) Rent roll;
(iv) Report of daily census for the month;
(v) Marketing report;
(vi) Twelve month rolling cash flow projection9.6;
(vii) Detail of Management Fee calculations;
(viii) Capital expenditure reconciliation to the approved capital budget in the Annual Budget;
(ix) Disclosure of any material communications with regulatory agencies and state surveys;
(x) Equity intercompany reconciliation, if applicable;
(xi) Most recent sales tax filings with the monthly reporting submittals to help validate to our tax department that you are current with filings;
(xii) Reasonably cooperate with and assist Tenant in satisfying any requirements of lender providing financing for the Facility; and
(xiii) Any other information relating to the Facility reasonably requested by Tenant.
(o) Manager shall prepare and submit to Tenant for Tenant’s approval at least sixty (60) days prior to the commencement of each calendar year, an annual plan and budget to cover all anticipated Revenues and Operating Expenses of the Facility for that calendar year, including capital improvements (the “Annual Budget”). Tenant shall have thirty (30) business days to approve the Annual Budget by written notice. If the Tenant does not approve the Annual Budget, the Tenant and Manager agree to participate in telephone conferences or meet at the office of Manager to conduct negotiations in good faith and use commercially reasonable efforts to arrive at a mutually acceptable Annual Budget. During such negotiations, each party agrees to apply reasonable expectations to projections of Operating Expenses and Revenues for the next calendar year. Until the current calendar year Annual Budget is resolved, the prior calendar year Annual Budget shall apply for the current calendar year with respect to those line items that are subject to dispute, with Operating Expenses adjusted by increases in the CPI (as hereafter defined) from the prior calendar year; otherwise all budgeted items approved by Tenant shall apply for such calendar year. Except as expressly provided for in this Agreement and except for items relating to the health and safety of Facility residents or employees, otherwise herein, Manager shall not make expenditures for any item aggregating materially in excess of the amount budgeted, defined as more than the greater of five percent (5%) and Five Thousand and NO/100 Dollars ($5,000.00) of each budgeted Operating Expense line item for the Facility without Tenant’s prior written approval. The Annual Budget shall also include Manager’s recommendations and suggestions for the rental rates, ancillary service fees, and other costs and charges to the residents of the Facility (and, in such regard, Manager shall monitor rates in the applicable service areas, and assist Tenant in obtaining approval of appropriate rates from governmental and third-party paying agencies); the salaries and fringe benefits of all Facility Employees; and major purchase contracts for supplies. Manager agrees to use its best efforts to maintain levels of rates and charges sufficient to assure the operation of the Facility in a first-class manner, and to provide for the payment of all costs of operation of the Facility, specifically including, but not limited to, Base Management Fee. Manager shall, at all times, maintain full and complete documentation regarding all of its actions taken to fulfill its duties as manager of the Facility. All Books and Records and reports maintained or prepared by Manager for or in connection with the operation of the Facility shall be Tenant’s property. During the term hereof, Tenant shall, at all reasonable times, and at its expense, have the right to inspect and audit such Books and Records and reports, and to inspect all parts of the Facility.
(p) As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Manager as being true and accurate in all material respects) and management status reports of the Facility, to be submitted to Tenant within ten (10) days after the end of each calendar quarter.
(i) All balance sheet reconcilements;
(ii) Search for unrecorded liabilities;
(iii) Signed Certification statement; and
(iv) Manager will cooperate in providing other reports as reasonable and necessary which are requested by the Tenant.
(q) As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Manager as being true and accurate in all material respects) and management status reports of the Facility, to be submitted to Tenant within seventy-five (75) days after the end of each calendar year, and each of which to be subject to an audit, at Tenant’s cost, by a firm of accountants selected by Tenant, at Tenant’s expense (but not to be used in computing the Management Incentive Fee).
(i) Balance sheet and income statement;
(ii) Revenues, Operating Expenses, Excess Cash Flow and NOI;
(iii) Calculations of Management Fees and Subordinated Base Management Fee;
(iv) Fixed asset additions;
(v) Capital expense reconciliation to the capital budget in the Annual Budget;
(vi) Communications with any regulatory agencies; and
(vii) Manager will cooperate in providing other reports as reasonable and necessary which are requested by the Tenant.
(r) Within fifteen (15) days after the end of each calendar quarter, Manager shall provide Owner with a certification executed by the controller or president of Manager in the form attached hereto as Exhibit “B”;
(s) Provide performance standards and review procedures for the Administrator and obtain Obtain and maintain licenses and staff to deliver the appropriate care and services of all residents of the Facility;
(t) Any other services related to the operation of the Facility as requested by Tenant from time to time;
(u) Obtain and keep in full force and effect in the name of Tenant any and all requisite permits, licenses and permits or entitlements necessary for the operation of the Facility. Manager shall not be required to use its own funds to pay any liabilities or obligations related to Subsidiaries (including, without limitation, for the ownership and operation of the Facility except to cover its own costs Hotels, all licenses required for the sale and expenses in providing corporate servicesservices of alcoholic beverages) and management and maintenance of the Hotels;
(vviii) Perform all general and administrative services on behalf of the Subsidiaries and in pursuance thereof maintain complete and accurate books of each Subsidiary, showing all receipts and expenditures, assets and liabilities, Profits and Losses and all other records necessary for recording each Subsidiary’s business and affairs. The books of the Subsidiaries shall be kept on the accrual basis in accordance with the Uniform System for companies of similar size, type, quality and business operations as each respective Subsidiary, and shall be open to inspection and examination by each Member at all reasonable times. Manager shall, if required by any instruments to which the Company or the respective Subsidiary is a party, cause audited financial statements of the applicable Subsidiary’s financial condition as required by the applicable instruments (the cost of which shall provide written notice be paid by the Company);
(ix) Prepare financial statements of each Subsidiary and/or, if requested by any Member, cause audited financial statements of each Subsidiary to Tenantbe prepared (the cost of which shall be paid by the Company), upon Tenant’s requestincluding, without limitation, financial statements in compliance with the requirements, procedures and terms applicable to the Company pursuant to and in accordance with Section 8.12 in 12.3 (but applied to the event that there is any change in the ownership of Manager, whether direct or indirect, regardless of whether such change constitutes a change in Control. Manager shall provide such notice to Tenant no later than ten (10) Business Days following its receipt of Tenant’s request. Manager shall only be obligated to respond to one (1) such request from Tenant every calendar quarter, unless Tenant’s request is in response to a request for such information from a third party to whom Tenant has an obligation to respond, in which case Manager shall provide written notice as outlined in this paragraph regardless of whether Manager has responded to a previous request during such calendar quarterrespective Subsidiary); and
(wx) Maintain insurance for the Subsidiaries in accordance with Section 12.6. Manager shall maintain and provide to Tenant a complete copy of Manager’s “Emergency Response Plan” or other documented crisis and/or disaster communication and management plan obtain quotes for the Facility, in form and substance required by applicable Legal Requirements insurance coverages appropriate for assisted living facilities, the activities being conducted at the following times: (1) annuallyHotels from time to time, at the same time as Manager submits its Annual Budget and prior to Tenant; (2) no later than ten (10) Business Days following its receipt of Tenant’s request for same; and (3) upon the expiration or renewal of any coverages then in effect, with the Term or earlier termination of this Agreementintention that the insurance obtained and maintained shall be the most favorable to the Subsidiaries, as reasonably determined by Managing Member.
Appears in 1 contract
Samples: Limited Liability Company Operating Agreement (Carey Watermark Investors Inc)
Duties and Responsibilities of Manager. Tenant hereby appoints Subject to Section 3 herein, the Manager as shall have the sole and following exclusive manager authority to take actions on behalf of the Facility and grants Manager all the authority necessary to carry out, Operator in the manner deemed best by Manager and consistent with the objectives and obligations set forth in this Agreement, the management of the Facility on behalf of the Tenant. Notwithstanding anything provided herein to the contrary, Tenant hereby retains the control and authority (a) required by law for Tenant to maintain the license from the State of Iowa that is required for the operation of the Facility as an assisted living facility, and (b) not otherwise specifically delegated to Manager hereunder. Manager and Tenant are not partners or joint-venturers and it is agreed that Manager is acting solely as the agent of Tenant in performing services or acquiring assets or supplies as provided hereunder. Tenant shall honor, as its own, all contracts, agreements, and commitments entered into by Manager with respect to the management and operation of the Facility so long as they are required to meet the Annual Budget and comply with the provisions of Section 2.03(e). Provided that Manager has provided notice to Tenant of an insufficient balance in the Operating Account in accordance with the requirements of this Agreement, Manager shall not be required to make monetary expenditures on Tenant’s behalf to the extent that the Operating Account does not contain sufficient funds to cover such expenditures. As the exclusive manager of the Facility, Manager shall perform the following, but only with respect to the Facility and subject to the rights and responsibilities of the TenantMine:
(a) Manage Supervise and control all aspects of the Facility in a professionalfinances of the Mine, competent including payroll, taxes, accounting, bookkeeping, record-keeping, accounts payable, and business-like manner;accounts receivable, banking, financial records and reporting functions as they pertain to the Mine. Manager shall prepare and maintain financial statements for the Mine according to generally accepted accounting principles consistently applied and shall provide the Operator with weekly operating reports and statements including but not limited to cash flow statements, income statements, accounts payable and accounts receivable reports and such other reports and information as may be requested by Operator from time to time.
(b) RecruitSelect, hireemploy and terminate as necessary all personnel necessary to operate the Mine, train including employees, consultants, contractors, and supervise Facility Employees, with no such personnel being employed by Tenantthird-party miners;
(c) Manage Supervise and control the available cash flow of the Facility, including, without limitation, (i) timely billing purchase of all residents materials and or other third-party payors for all services or items provided by the Facility, (ii) timely paying all Operating Expenses from available cash flowsupplies;
(d) Prepare, keep Manage the acquisition by lease or purchase of any equipment and provide Tenant with access during regular business hours facilities necessary to all contracts, Books and Records, documents, policies and other information necessary for operate the lawful operation and sound financial management of the FacilityMine (“Equipment”);
(e) As an Operating Expense Manage the repair and in accordance with the Annual Budget, purchase and keep the Facility furnished with maintenance of all necessary furnishings, Fixed Asset Supplies, equipment and Inventories and services from third parties; provided, however, that no material (defined as more than the greater of 5% and Five Thousand and NO/100 Dollars ($5,000.00) of each budgeted Operating Expense line item facilities located at the Facility without Tenant’s prior approval Mine as set forth in (o) below) non-budgeted expenditure for any such item shall be made without Tenant’s prior written approval, which approval shall not be unreasonably withheld or delayed, except expenditures reasonably necessary in the opinion of Manager to maintain services to residents such equipment and patients facilities in good repair, order and condition, normal wear and tear excepted, as a matter well as the retirement or disposition of life safetyany equipment or facilities no longer needed at the Mine;
(f) Provide a qualified full-time Administrator at Manage the Facility who will assume general operational responsibility for such Facility (whose expense shall be an Operating Expense); provide notice mining of coal from the Mine, including a summary the determination of such person’s prior experience areas to Tenant in advance of any change in the Administrator, provided that Tenant shall have the right to review any person hired by Manager for such administrator position and to consult with Manager regarding such hiring (which right shall not be deemed to be a right of Tenant to approve such Administrator); recruit, hire, train, promote, direct and terminate the employment of all other personnel necessary to maintain and operate the Facility; establish performance standards, salary and compensation scales, promotion policies, fringe benefit arrangements, and other personnel policies and guidelines, all in accordance with the Annual Budget; provided, however, that no material non-budgeted personnel expense shall be incurred without Tenant’s prior written approval; provide management support to the Administrator; and provide such other supervision, management and financing direction as may be required for the Administrator efficiently to perform his or her duties and responsibilitiesmine;
(g) As an Operating ExpenseManage the purchase, comply with Manager’s accounting mixing, storage and reporting obligations as set out in this Agreementuse of foreign coal, coal refuse, including gob, slurry, course coal and such other coal fines (the “Third Party Coal Products”);
(h) As an Operating ExpenseManage all product sales from the Mine, prepare including negotiating and file in a timely manner in accordance with applicable regulationsentering into contracts for the sale of product on the spot market or longer-term contract sales (“Sales Contracts”), all necessary statistical reports (specifically includingand any activities incidental thereto, but not limited to, payroll, sales, use and occupancy tax reports and returns) and data to meet all local, state and federal regulatory requirements; provided, however, that nothing contained herein shall be deemed or construed to require Manager to prepare or file Tenant’s local, state or federal income tax returns or schedules theretoincluding product testing;
(i) Process Manage all insurance claims delivery arrangements for the Facility; providedsale of product from the Mine or the purchase of Third Party Coal Products (“Transportation Contracts”), however, that nothing contained herein shall be deemed or construed to require Manager to prepare or file residents’ insurance claimsincluding trucking and rail arrangements;
(j) Collect Manage all activities necessary to comply with all permits, licenses, laws and regulations pertaining to the Revenues; deposit all such funds received by Manager for or on behalf mining of Tenant in a Tenant designated bank account (“Operating Account”) established by Tenant for such purposeore from the Mine, as to which Manager shall have the right to deposit including environmental laws, health and withdraw fundssafety laws, pay out of such funds all Operating Expensesreclamation and closure plans, its compensation and any other sums due it from Tenant, and all other sums properly payable pursuant to any of the provisions hereof (all expenditures authorized hereby being considered Operating Expenses to be paid from Tenant’s funds received by Manager); and hold, remit or expend the balance of such funds, if any, as Tenant may direct provided, further, that funds may not be withdrawn by Tenant if the aggregate minimum cash balance required by Section 2.02(d) hereof would be impaired therebyetc.;
(k) As an Operating Expense Commence, defend and control all legal actions, arbitrations, investigations and proceedings that arise due to events occurring in accordance connection with the Annual BudgetMine, engage or utilize counsel satisfactory to Tenant, defend provided that simultaneous notice of any legal proceedings or claims relating to operation of the Facility, and cause material action in any such legal proceedings to be instituted as may be necessary to enforce payment of charges or compliance with other terms of admission agreements, or to dispossess residents and patients involving setoffs of damage claims; provided, however, that no material non-budgeted legal expense action shall be incurred without Tenant’s prior written approval;provided to the Operator; and
(l) As an Operating Expense and in accordance with the Annual Budget, develop, implement, manage Manage and supervise marketing and public relations programs for such other activities that the Facility as follows; provided, however, that such programs shall be subject to Tenant’s prior written approval:
(i) develop a marketing plan, encompassing an advertising plan, advertising, marketing, public relations, and networking;
(ii) develop and design marketing and advertising materials;
(iii) construct appropriate signage on the Facility property pursuant to any local governmental requirements;
(iv) prospect database management; and
(v) conduct surveys of residents and their families regarding selection of the Facility.
(m) As an Operating Expense: (i) file and pay all taxes, including but not limited to real and personal property taxes (as applicable), and assessments (other than income, franchise and similar taxes) on the Facility; (ii) pay all premiums for insurance on the Facility; and (iii) pay such reserves as Tenant may direct;
(n) As an Operating Expense, prepare and deliver to Tenant the following statements for the Facility prepared in accordance with GAAP and applied consistently from period to period (which shall be certified by an officer of Manager as being true and accurate in all material respects) by the tenth (10th) Business Day of each calendar month during the Term, except for the rent roll, which shall be submitted on or before the fifth (5th) Business Day of each calendar month during the Term:
(i) Balance sheet and income statement (in Microsoft Excel format);
(ii) Trial balance with 3 columns (balance forward, net debits/credit, and ending balance in Microsoft Excel format);
(iii) Rent roll;
(iv) Report of daily census for the month;
(v) Marketing report;
(vi) Twelve month rolling cash flow projection;
(vii) Detail of Management Fee calculations;
(viii) Capital expenditure reconciliation to the approved capital budget in the Annual Budget;
(ix) Disclosure of any material communications with regulatory agencies and state surveys;
(x) Equity intercompany reconciliation, if applicable;
(xi) Most recent sales tax filings with the monthly reporting submittals to help validate to our tax department that you are current with filings;
(xii) Reasonably cooperate with and assist Tenant in satisfying any requirements of lender providing financing for the Facility; and
(xiii) Any other information relating to the Facility reasonably requested by Tenant.
(o) Manager shall prepare and submit to Tenant for Tenant’s approval at least sixty (60) days prior to the commencement of each calendar year, an annual plan and budget to cover all anticipated Revenues and Operating Expenses of the Facility for that calendar year, including capital improvements (the “Annual Budget”). Tenant shall have thirty (30) business days to approve the Annual Budget by written notice. If the Tenant does not approve the Annual Budget, the Tenant and Manager agree to participate in telephone conferences or meet at the office of Manager to conduct negotiations in good faith and use commercially reasonable efforts to arrive at a mutually acceptable Annual Budget. During such negotiations, each party agrees to apply reasonable expectations to projections of Operating Expenses and Revenues for the next calendar year. Until the current calendar year Annual Budget is resolved, the prior calendar year Annual Budget shall apply for the current calendar year with respect to those line items that are subject to dispute, with Operating Expenses adjusted by increases in the CPI (as hereafter defined) from the prior calendar year; otherwise all budgeted items approved by Tenant shall apply for such calendar year. Except as expressly provided for in this Agreement and except for items relating to the health and safety of Facility residents or employees, otherwise herein, Manager shall not make expenditures for any item aggregating materially in excess of the amount budgeted, defined as more than the greater of five percent (5%) and Five Thousand and NO/100 Dollars ($5,000.00) of each budgeted Operating Expense line item for the Facility without Tenant’s prior written approval. The Annual Budget shall also include Manager’s recommendations and suggestions for the rental rates, ancillary service fees, and other costs and charges to the residents of the Facility (and, in such regard, Manager shall monitor rates in the applicable service areas, and assist Tenant in obtaining approval of appropriate rates from governmental and third-party paying agencies); the salaries and fringe benefits of all Facility Employees; and major purchase contracts for supplies. Manager agrees to use its best efforts to maintain levels of rates and charges sufficient to assure the operation of the Facility in a first-class manner, and to provide for the payment of all costs of operation of the Facility, specifically including, but not limited to, Base Management Fee. Manager shall, at all times, maintain full and complete documentation regarding all of its actions taken to fulfill its duties as manager of the Facility. All Books and Records and reports maintained or prepared by Manager for or in connection with the operation of the Facility shall be Tenant’s property. During the term hereof, Tenant shall, at all reasonable times, and at its expense, have the right to inspect and audit such Books and Records and reports, and to inspect all parts of the Facility.
(p) As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Manager as being true and accurate in all material respects) and management status reports of the Facility, to be submitted to Tenant within ten (10) days after the end of each calendar quarter.
(i) All balance sheet reconcilements;
(ii) Search for unrecorded liabilities;
(iii) Signed Certification statement; and
(iv) Manager will cooperate in providing other reports as reasonable and necessary which are requested by the Tenant.
(q) As an Operating Expense, prepare the following reports consistent with GAAP (which reports shall be certified by an officer of Manager as being true and accurate in all material respects) and management status reports of the Facility, to be submitted to Tenant within seventy-five (75) days after the end of each calendar year, and each of which to be subject to an audit, at Tenant’s cost, by a firm of accountants selected by Tenant, at Tenant’s expense (but not to be used in computing the Management Incentive Fee).
(i) Balance sheet and income statement;
(ii) Revenues, Operating Expenses, Excess Cash Flow and NOI;
(iii) Calculations of Management Fees and Subordinated Base Management Fee;
(iv) Fixed asset additions;
(v) Capital expense reconciliation to the capital budget in the Annual Budget;
(vi) Communications with any regulatory agencies; and
(vii) Manager will cooperate in providing other reports as reasonable and necessary which are requested by the Tenant.
(r) Within fifteen (15) days after the end of each calendar quarter, Manager shall provide Owner with a certification executed by the controller or president of Manager in the form attached hereto as Exhibit “B”;
(s) Provide performance standards and review procedures for the Administrator and obtain and maintain licenses and staff to deliver the appropriate care and services of all residents of the Facility;
(t) Any other services related to the operation of the Facility as requested by Tenant Operator designates from time to time;
(u) Obtain and keep in full force and effect in the name of Tenant any and all licenses and permits necessary for the operation of the Facility. Manager shall not be required to use its own funds to pay any liabilities or obligations related to the operation of the Facility except to cover its own costs and expenses in providing corporate services;
(v) Manager shall provide written notice to Tenant, upon Tenant’s request, pursuant to Section 8.12 in the event that there is any change in the ownership of Manager, whether direct or indirect, regardless of whether such change constitutes a change in Control. Manager shall provide such notice to Tenant no later than ten (10) Business Days following its receipt of Tenant’s request. Manager shall only be obligated to respond to one (1) such request from Tenant every calendar quarter, unless Tenant’s request is in response to a request for such information from a third party to whom Tenant has an obligation to respond, in which case Manager shall provide written notice as outlined in this paragraph regardless of whether Manager has responded to a previous request during such calendar quarter; and
(w) Manager shall maintain and provide to Tenant a complete copy of Manager’s “Emergency Response Plan” or other documented crisis and/or disaster communication and management plan for the Facility, in form and substance required by applicable Legal Requirements for assisted living facilities, at the following times: (1) annually, at the same time as Manager submits its Annual Budget to Tenant; (2) no later than ten (10) Business Days following its receipt of Tenant’s request for same; and (3) upon the expiration of the Term or earlier termination of this Agreement.
Appears in 1 contract
Samples: Management Agreement (Royal Energy Resources, Inc.)
