MANAGEMENT AGREEMENT
This agreement is entered into this 10th day of September 1997, between
Senior Retirement Communities, Inc. (Hereafter referred to as "the owner" or
"the sponsor") and The Xxxxxxxx Group, Inc. (Hereafter referred to as "the
agent"). This agreement relates to activities to be performed,
responsibilities to be accepted and authority to be exercised with regard to
the properties to be known as The Arbor Retirement Community of Ruston,
Louisiana, The Arbor Retirement Community of Minden, Louisiana, The Arbor
Retirement Community of Bossier City, Louisiana and The Arbor Memory Disorder
Facility of Shreveport, Louisiana.
In consideration of the terms conditions and covenants hereinafter set forth,
the Owner and the Agent mutually agree as follows:
As used in this Agreement the terms below shall have the following
definitions unless context otherwise requires:
101.1 "Project " shall mean the land, improvements, buildings,
appurtenances and equipment thereon described in Exhibit "A" attached
hereto.
101.2 "Gross Collections" shall mean all amounts actually collected by
the Agent, as tenants rents, income from all amounts actually collected by
the Agent, as miscellaneous charges, but excluding (1) income derived from
interest on investments, (ii) discounts and dividends on insurance, and (iii)
security deposits.
101.3 "Lease" shall mean the approved agreement between the Owner and a
Tenant under the terms of which Tenant is entitled to enjoy possession of a
dwelling unit.
101.4 "Rent" shall mean that monthly amount which a Tenant is obligated
to pay the Owner pursuant to the terms of a Lease.
101.5 "Tenant" shall mean a person occupying a dwelling unit in the
Development pursuant to a Lease.
101.6 "Lender" shall mean the financial institution holding the mortgage
for the Project property.
SECTION 201 APPOINTMENT OF AGENT:
The Owner hereby appoints the Agent as the manager of the Projects as set
forth above and the Agent hereby accepts appointment, on the terms and
condition hereinafter provided, as exclusive management agent of the Project.
SECTION 301 LEFT BLANK ONPURPOSE
SECTION 401 CONSIDER WITH OWNER,LENDER
The Agent agrees to cause an officer of the Agent to attend meeting with the
Owner at any time or times requested by the Owner.
SECTION 501 MEETING WITH OWNER AND THE AGENT
601.1 Employees of agent. The Agent shall hire the Director, who will be
responsible and report directly to the Agent. Said Director will perform
duties on-site and Compensation will be considered an expense of the Project.
The Agent shall hire in the Owner's name the Director and on-site personnel
necessary for the full and efficient performance of the Agent's duties under
this Agreement. Such employees shall be physically present on the Project
site. No less that one responsible person (s) for each twenty tenants
and /or required by licensing regulator shall be physically present at the
Project at such times, and in any event, for not less than 24 hours per day,
seven days per week. Compensation foe the services of all on-site employees,
including the Director, shall be included as operating expenses of the
Project.
601.2 Employment of Residents and Contractors. The Agent shall operate
as an equal opportunity employer in conformity with all related laws and
regulations. Employment practices will not discriminate based upon sex, race,
color, sexual orientation, age creed, religion, or national origin.
SECTION 701. SERVICES OF AGENT:
701.01 Services Prior to Resident Occupancy. Prior to occupancy of the
Project, the Agent shall:
(I) furnish the Owner revised estimates of maintenance and operating
expenses accompanied by documentation including a staffing plan and where
appropriate bids, contracts or comparable for any and all items so requested
by the Owner or lender;
(ii) develop. And establish such policies and produces as are necessary
to carry out the Agent's responsibilities under this Agreement for the
effective and efficient operation of the Project. Such policies and
procedures shall provide the guidelines for on-site staff in the day to day
operation of the Project and shall include but not be limited to aspects of
marketing (e.g., sales practices,
mail list management, referral contact, affirmative fair housing practices),
administration (e.g., tenant application and move-in, landlord-tenant
relations, rental agreements, bookkeeping, tenant charges, etc.) personnel,
(e.g., job descriptions, hiring, evaluation, discharge, benefits, etc.)
Tenant services(e.g.,housekeeping, laundry, maintenance, food service,
ancillary services, etc.), property management, general repairs, etc.);
(iii) implement marketing plan.
(iv) retain such marketing, maintenance and managerial personnel as
are necessary for the preliminary marketing and sale of units;
(v) provide training opportunities to marketing staff,
(vi) establish a bookkeeping and accounting system in accordance with
requirements specified by the owner and sufficient to document operational
income and expenses of the project covered by the management agreement;
(vii) identify start-up inventory, equipment and supplies and secure
such as approved by the Owner and additionally will develop a system
for ordering and protection inventory against loss and waste;
(viii) provide a system for bookkeeping, including payroll, accounts
payable, accounts receivable, general ledger, and xxxxx cash, such system
being designed to xxxxx timely information necessary for owner's financial
reports.
701.02 Structure and Warranties. the Agent shall obtain from the Owner a
complete set of plans and specifications and copies of all guarantees and
warranties pertinent to construction, fixtures and equipment. With the aid
of this information and inspection by competent personnel. The Agent shall
thoroughly familiarize itself with the character, location, construction,
layout, plan and operation of the Project and especially of the electrical,
heating, plumbing, air conditioning and ventilating systems, and all other
mechanical equipment.
701.03 Inspection of Development. The Agent shall participate in the
final inspection(s) of the Project to certify the readiness of the units for
occupancy and shall (I) inform the Owner, the Architect, the Contractor and
the lender and insurer of all defects in material and workmanship discovered
within the construction warranty period; and (ii) monitor the action taken
by the Contractor to correct the defects; and (iii) participate in any formal
inspection held for the purpose of identifying construction defects.
701.04 Maintenance and Repairs. The Agent shall cause the general
building interior and grounds of the project to be maintained and repaired
according to standards acceptable to the Owner, lender and insurer. The
Agent shall coordinate with the Owner responsibility for maintaining in good
working order, repairing and replacing the structural aspects of the building,
appurtenances, capital equipment, and the electorial, heating, plumbing, air
conditioning and ventilating systems, and all other mechanical equipment.
The Agent shall report mechanical, structural, electrical, plumbing, heating,
ventilating or air conditioning problems to the owner in a timely manner.
701.05 Preventive Maintenance. The Agent shall coordinate with the Owner
to assure the timely accomplishment of preventive maintenance. The Agent
shall cause the buildings, appurtenances, and equipment of the Project to be
maintained and repaired according to written procedures and schedules. The
Agent shall develop a preventive maintenance schedule including, but not
limited to periodic inspection of the units; residency commencement and
termination check lists; inventory control; common area maintenance;
equipment monitoring; and monitoring of exterior maintenance and landscaping
on a seasonal basis. The Agent will develop a schedule for routine painting
and replacement as well as a budget item to fund redecorating as necessary.
701.06 Property Insurance. The Agent will cause to be placed in force,
all forms of insurance needed to adequately protect the Owner and the Project,
including, comprehensive general liability insurance, fire and extended
coverage insurance, burglary, and theft insurance. The Agent shall promptly
investigate and make a full written report to the Owner within five (5) days
of receiving knowledge of any accident or claim for damage relating to the
ownership, Ooperation and maintenance of the Project, including any damage or
destruction of the estimated cost of repair, and shall cooperate and make any
and all reports required by any insurance company in connection therewith.
701.07 Employees of Owner. On the basis of wage rates previously
approved by the Owner, the Agent shall investigate, hire, pay, supervise and
discharge all administrative and general maintenance personnel.
No less than one responsible person (S) shall be physically present at the
Project not less than 24 hours per day seven days per week.
All personnel shall in every instance be in the Owner's and not in the
Agent's employ,
Compensation for the services of all employees, as evidenced by certified
payroll(s) shall be considered an operating expense of the Project.
701.08 Notice of Authority. In addition to its authority to manage the
premises as specified herein, the Agent is authorized by the Owner to accept
service of process
and to receive and give receipt for notices and demands. A notice containing
such information shall be posted in a conspicuous place of the premises.
701.09 Service Requests of Tenants. The Agent shall maintain
businesslike relations with Residents whose service requests shall be
received, considered, and recorded on a systematic, written basis to show the
action taken with respect to each such request. Complaints of a serious
nature and all written complaints shall, after though investigation, be
reported to the owner with appropriate recommendations.
The Agent shall make provisions for delivery of services calls from Tenants
on a 24-hour basis.
701.10 Inspection of Units. As part of the continuing program to secure
full performance by the Residents of all obligations and maintenance for
which they are responsible, the Agent shall make an annual inspection of all
dwelling units and report its findings in writing to the Owner.
701.11 Review of 0perations. The Agent shall permit the lender and
insurer to conduct on-site evaluations of the performance of any or all
management services which the Agent has agreed to provide as required by this
Agreement and the Management Plan. An authorized representative of the
Agent shall be available during on-site evaluations. The Agent shall
correct any deficiencies noted in these evaluations within 30 days of the
receipt of the report from the lender.
701.12 Collections and Delinquencies. The Agent shall collect and
deposit in the account established pursuant to Section 1001 hereof all rents
and other charges due from Tenants and all rents or other payments due the
Owner from lessees of other nondwelling areas of the Project. The Agent
agrees, and the Owner hereby authorizes the Agent, to request, demand,
collect, receive, and give receipts for any and all charges or rents which
may at any time be or become payable to the owner. Rents and other charges
shall not be accepted in cash by the Agent. The Agent agrees to take such
action, including legal action, with respect to delinquencies in payments due
the Owner with an itemized list of all Tenants with delinquent accounts as of
the tenth(lOth) day of each month on or before the fifteenth (15th) day of
same month.
701.13 Payments and Expenses. From the funds collected and deposited in
the account established pursuant to Section 1001 hereof, the Agent shall
coordinate with the Owner and cause to be disbursed regularly and punctually
the following:
(I) all of the real estate tax and insurance premium escrow payments
required of the Owner, which payments shall be deemed to be part of the
operating expenses of the Project:
(ii) all of the principal and interest required to be paid to the lender:
(iii) all remaining operating expenses of the Project including
administrative, operational, franchise fees, maintenance and utility expenses
and vendor payables;
(iv) the fees evolving from the Management Agreement including the fees
of the Agent as provided in Section 1201.
With the exception of payments provided in this section and payments for
utilities services, the Agent shall make no disbursements in excess of
$15,000 unless specifically authorized by the Owner, provided that emergency
repairs, involving manifest danger to life and property, or immediately
necessary for the preservation and safety of the Project, or for the safety
of the Tenants, or necessary services to the Project, may be made by the
Agent without regard to the cost limitation imposed by this Section with the
understanding that the Agent will, if at all possible, confer immediately
with the Owner regarding every such expenditure. The Agent shall not incur
liabilities to the Owner (direct or contingent) which, in the aggregate,
will exceed at any time $15,000 or which require payment more than one year
from the creation thereof, unless specifically authorized by the Owner.
701.14 Governmental Orders. The Agent shall take such action as may be
necessary to comply promptly with any and all orders or requirements affecting
the Project placed thereon by any federal, state, county or municipal
authority or other similar bodies. The Agent shall not take any action
under this Section unless the Owner so directs and shall not take action so
long as the Owner is contesting or had affirmed its intention to contest any
such order or requirement and promptly institutes proceedings contesting any
such order or requirement. The Agent shall promptly, and in no event later
than 48 hours from the time of their Project.
(v) By the fifteenth (15th) day of each month, the Agent will furnish
the Owner with an itemized list of all rent delinquencies as of the tenth
(1Oth) day of the same month.
(vi) By the fifteenth (15th) day of each month, the Agent will furnish
the Owner with a statement of receipts and disbursements during the previous
month, and with a payable and reconciled bank statements for the Account as
of the end of the previous month.
(vii) The Agent shall cooperate with the Owner to, execute and file
all Forms, reports and returns required by law in connection with the
employment of personnel, including unemployment insurance , disability
benefits, social security and other similar insurance, benefits and taxes
now in effect or hereafter imposed.
701.17 Operating Budget. At least sixty (60) days before the beginning of
each new fiscal year for the Project, the Agent shall prepare and submit to
the Owner budget, setting forth an itemized statement of the anticipated
receipts and disbursements for the Project.
701.18 Marketing Duties. The Agent shall immediately assume
responsibility foe all functions and services as described in the marketing
plan submitted. Such responsibilities shall include but not be limited to:
(I) By the fifteenth (15th) day of each month, the Agent will furnish
the Owner with an itemized list of all rent delinquencies as of the
tenth (1Oth) day of the same month.
(vi) By the fifteenth (15th) day of each month, the Agent will
furnish the Owner with a statement of receipts and disbursements during the
previous month, and with a schedule of accounts receivable and payable, and
reconciled bank statements for the Account as of the end of the previous
month.
(vii) The Agent shall cooperate with the Owner to, execute and file all
forms, reports and returns require by the law in connection with the
employment insurance, worker's compensation insurance, disability benefits,
social security and other similar insurance, benefits and taxes now in effect
or hereafter imposed.
701.17 Operating Budget. At least sixty (60) days before the beginning of
each new fiscal year for the Project,; the Agent shall prepare and submit to
the Owner budget, setting forth an itemized statement of the anticipated
receipts and disbursements for the Project.
701.18 Marketing duties. The Agent shall immediately assume
responsibility for all functions and services as described in the marketing
plan submitted. Such responsibilities shall include but not be limited to:
(I) development of and due diligence of rent-up occupancy goals;
(ii) development of a month-by-month marketing plan;
(iii) development of a budget for all labor and ;;materials;
(iv) development of marketing policies and procedures;
(v) concept development and production coordination for collateral
materials as well as print and broadcast advertisement;
(vi) hiring, training and supervision of employed staff and contract
labor;
(vii) informing the Owner of problems requiring adjustment to ht
marketing plan or goals;
(viii) maintenance of marketing effort to stabilize occupancy once the
Project's full.
Marketing activities shall be coordinated with on-going operations once the
Project is operational. Activities shall reflect a broad based effort
excluding community networking, media use, and print pieces.
701.19 Compliance of Tenants.
(I) The Agent shall at all times during the term of this Agreement
operate and maintain the Project according to the highest standards
achievable. The Agent shall secure full compliance by the Tenants with the
terms and conditions of their respective leases, rules and regulations.
(ii) Voluntary compliance shall be emphasized, and the
agent shall council tenants and make referrals to social service agencies
in cases of financial hardship or under other circumstances deemed
appropriated by the Agent, so that involuntary terminations of tenancy may
be avoided to the maxim extent consistent with sound management of the
Project. The Agent will not, however, tolerate willful evasion of payment
of rent.
(iii) The Agent may lawfully terminate any tenancy when, in the
Agent's judgement, sufficient cause occurs under the terms of the Tenants's
lease. Statements explaining evictions shall be filed promptly with the
Owner.
(iv) The Agent is authorized to consult with legal council designated
by the Owner to bring action for eviction and execute notices to vacate and
to commence appropriate judicial proceedings; provided, however, that the
Agent shall keep the Owner informed of such actions and shall follow such
instructions as the Owner has prescribed. Subject to the owner's approval,
costs incurred in connection with such actions shall be considered as
operating expenses.
(v) Tenant applications will be reviewed by the Director who will
make the decisions on acceptance, rejection, and relocation to another
facility based upon tenant's physical and emotional condition. Agent will
carry out their directions and judgements.
701.2 Qualification of Tenants. The Agent shall require prospective
private pay tenants to complete a confidential financial statement. As a
condition of tenancy, the Agent shall make use of this and other available
information to determine that the prospective
tenant has sufficient income and assets to pay the monthly fees associated
with tenancy.
701.21 Services to Tenants. The Agent shall be responsible for the
effective and efficient provision of tenant services, including the
maintenance of safe and clean common areas and grounds; weekly housekeeping
and laundry service; periodic window washing, carpet and drapery cleaning;
provision of three meals per day, seven days per week; maintenance of
twenty-four hour per day security and emergency call system; scheduled
transportation; centrally located mail distribution; and other contracted
services and specified in the Tenant's negotiated service plan.
The Agent shall insure that systems to delivery all tenant services are in
place, staff hired and trained prior to Project opening.
Recognizing the contribution that quality makes to the successful long term
marketing of the Project, the Agent shall provide services of consistently
high quality, acceptable to the Tenants and the Owner.
SECTION 801 OTHER ACTS:
The Agent shall perform such other acts and deeds requested by the Owner as
are reasonable, necessary and proper in the discharge of the Agent's duties
under this Agreement.
SECTION 901 LIABILITY OF AGENT
Everything done by the Agent under the provision of this agreement shall be
done as agent of the Owner, and all obligations or expenses incurred
thereunder shall be for the account of and on behalf of the Owner. The Agent
shall not be obliged to make any advance to, or the account of, the Owner or
to pay any sum, except out of the funds held or provided as aforesaid, nor
shall the Agent be obliged to incur any lability of obligation for the
account of the Owner without assurance that the necessary funds for to
discharge thereof will be provided.
SECTION 1001.1 BANK ACCOUNTS;
1001.1 Operating Receipt and Expenses Account. The Agent shall establish
and maintain, in an account, and which is approved by ;the owner, a separate
account as Agent of the Owner for the deposit of the monies of the Owner,
with authority to draw thereon for any payments to be made by the Agent to
discharge any liabilities or obligations Of the owner incurred in accordance
with this Agreement. This account shall be carried in the name of and
designated of record as "
L. L. C. Operating Receipts and Expense Account". The Agent shall also
establish such other special accounts as may be required by the Owner or
the lender. Any and all interest which may accrue on deposits contained in
any accounts established in accordance with this paragraph shall be used by
the Agent to discharge any liabilities or obligations of the Owner in the
same manner as the Agent uses other monies of the Owner.
1001.2 Community Fee and Security Deposit Account. The Agent shall
collect, deposit and disburse Tenants' community fee and security deposits
in accordance with the terms of the respective Leases. Tenants' community
fee and security deposit shall be deposited by the agent in an
interest-bearing account, with a bank or other financial institution whose
deposits are insured by the FDIC. This account shall be carried in the name
and be designated of record as"
Security Deposit Account."
SECTION 1101 STAFF FACILITIES AT PROJECT SITE:
The owner shall furnish the director and support staff with suitable office
space and office furniture on the site of the project and with electricity,
heat, water and janitorial service therein. For all operational staff the
Owner shall provide office accommodations as necessary to perform their
assigned functions, as well safe storage foe appropriate personal belongings
and staff dining space furnished with fables and chairs which allow staff
to eat or take breaks in reasonable comfort.
SECTION 1201 COMPENSATION OF AGENT:
The compensation which the agent shall be entitled to receive for all Project
management services ;performed under this agreement shall be $1,500 per month
or 7% of the gross collections of the Project which ever is greater. This
fee shall be computed and paid monthly based upon Gross collections for the
preceding month. Expenses not agreed to be charged to the project and all
o9f the Agent's overhead expenses will be borne by the Agent out of its own
funds and will not be treated as an operating expense of the Project.
The Agent shall receiver compensation for preliminary management and
marketing services at $1,500 per Month prior to the opening date or as
specified in the plan.
SECTION 1301 NONDISCRIMINATION:
In the performance of its obligations under this agreement, the Agent will
comply with the provisions of any federal, state, or local law prohibiting
discrimination in housing of the grounds of race, color, sex, religion, or
national origin as stated in POLICIES & PROCEDURES. This Agreement may be
terminated or suspended, in whole or in part, by the Owner upon the basis of
a finding by the Owner that the Agent has not complied with
nondiscrimination provisions.
SECTION 1401 EXPIRATION AND TERMINATION
1401.1 Expiration. Unless sooner terminated pursuant to Section 1401.2,
1401.3, 1401.4, 1401.5 or 1401.6 of this Agreement, the Agreement shall be in
effect from the date of execution hereof until January 1, 2010. This
Agreement shall be renewable with the mutual consent of the Owner and the
Agent.
1401.2 Termination by Mutual Consent: This Agreement may be terminated
by the mutual written consent of the Owner and Agent only. Owner and Agent
shall submit their written request sixty (60) days prior to the date
specified foe termination.
1401.3 Termination by Owner for cause. In the event that the Agent shall
fail to perform any of its duties hereunder or comply with any of its
provisions hereof, the Owner shall notify the Agent, shall notify the Agent,
the lender and the insurer of the Owners intent to terminate this Agreement
by delivering to the Agent written notice to remedy such default. If such
default is not remedied within thirty (30) days, from the date of notice to
the Agent, the Owner may, with prior written consent from the lender and the
insurer, terminate this Agreement immediately.
1401.4 Termination Because Of Bankruptcy: In the event that the Owner or
the Agent shall become insolvent, however defined; shall be dissolved; shall
commit an act of bankruptcy under the United States Bankruptcy Act (as now
or hereafter amended); shall file or have filed against if, voluntarily or
involuntarily, a petition in bankruptcy or for reorganization or for the
adoption of an arrangement under the United States Bankruptcy Act ( as now
or hereafter amended); shall make an assignment of the benefit of creators;
shall procure, permit or suffer, voluntarily or involuntarily, the
appointment of a receiver or trustee to take charge of any of the mortgaged
property or any other property owned by the Owner or the Agent, voluntarily
or involuntarily, any act, process or proceeding under any insolvency law or
the statute or law providing for the modification or adjustment of the
rights of creditors, either party hereto may immediately,;terminate this
Agreement without notice to the other party.
1401.5 Accounting Upon Termination. Within ten (1O) days after the
termination of this Agreement, the Owner and Agent shall account to each
other with respect to all matters outstanding as of the date of termination.
The Owner shall furnish the Agent security against any outstanding
obligations or liabilities which the Agent shall turn over to the Owner all
records, documents or other instruments, waiting lists and any and all other
files and papers in its possession pertaining to the Agent's performance
under this Agreement,
SECTION 1501 ASSIGNMENTS:
This Agreement shall inure to the benefit of any constitute a binding
obligation upon the Owner and the Agent, and their respective successors and
assigns, provided that the Agent cannot assign this Agreement or any of its
duties hereunder without the prior written consent of the Owner and the
lender.
SECTION 1601 AMENDMENT:
This Agreement constitutes the entire agreement between the owner and the
Agent, and no amendment or modification thereto shall be valid and
enforceable except by supplemental agreement is executed in writing and
approved by the Owner, the Agent, the lender and insurer.
SECTION 1701 EXECUTION OF COUNTERPARTS:
For the convenience of the parties, this agreement has been executed in
counterpart copies, which are in all respects similar and each of which
shall be deemed to be complete in itself so that any one may be introduced
in evidence or used for any other purpose without the production of the
other counterparts
SECTION 1801 MISCELLANEOUS:
Wherever used in this Agreement, the singular number shall include the
plural, and the plural shall include the singular; and the use of any
gender shall apply to all genders. The captions and the headings of the
sections of this Agreement are for convenience only and are not to be used
to interpret or define the provisions hereof.
SECTION 1901 WAIVER
No waiver of a breach of any of the agreements or provisions contained in
this Agreement shall be construed to be a waiver of any subsequent breach of
the same or of any other provisions of this Agreement.
SECTION 2001 SEVERABILITY:
If any clauses, sentence, section, paragraph, provision or part of this
Agreement is judged to be invalid or unenforceable, such adjudication shall
not affect or invalidate the remainder of this Agreement, it being
understood and agreed that such invalid or enforceable clause, sentence,
paragraph, provision or part is and shall be severable from the remainder
of ;this Agreement.
2101 NOTICE:
Whenever any notice is required to be given herein, Notice shall be deemed
to have been given when sent by certified mail to this Agreement at the
following addresses:
OWNER:507 Xxxxxxx Xx., Xxxx Xxxxxx, XX 00000
AGENT:507 Xxxxxxx Xx., Xxxx Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
AGENT: OWNER:
THE XXXXXXXX GROUP, INC. SENIOR RETIREMENT COMMUNITIES, INC.
BY: /S/XXXXX X XXXXXXXX BY /S/XXXXXX XXXXXXXX
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ITS: SECRETARY ITS: PRESIDENT
_____________________ _____________________________
