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Exhibit 10.24
PROPERTY MANAGEMENT AGREEMENT
This Agreement (herein so called) is made and entered into effective
as of February 1, 1995, between NHP RETIREMENT HOUSING PARTNERS I LIMITED
PARTNERSHIP, a Delaware limited ("Owner"), and CAPITAL SENIOR LIVING, INC., a
Texas corporation ("Agent").
1. Appointment and Acceptance. The Owner, on behalf of itself
appoints the Agent as exclusive agent to manage, operate, maintain, lease,
rent, and otherwise operate the properties more particularly described in
Schedule I of this Agreement (collectively, the "Projects" and individually, a
"Project"). Agent accepts the appointment, subject to the terms and conditions
set forth in this Agreement; and agrees to exert its reasonable efforts in
managing the property.
2. Definitions. The following terms and phrases are employed in
this Agreement. Subject to the terms and conditions of this Agreement, said
terms and phrases shall be deemed to have the respective meanings set forth
below wherever they appear in this Agreement.
(a) "Affiliate" means (i) any other person directly or
indirectly controlling or controlled by or under common control with
another person, (ii) a person owning, or controlling 10% or more of
the outstanding voting securities of such person or (iii) any officer,
director or partner of such person.
(b) "Management Plan" means a description of the general
policies and procedures to be followed in the management of a Project
including, but not limited to, the Operating Budget for such Project,
a form of lease, a list of Project employees, a list of services to be
provided and service standards and any amendment or amendments
thereto.
(c) "Marketing Plan" means a description of the general
policies and procedures, including any amendment or amendments
thereto, to be followed in the marketing of a Project, and including
an advertising budget.
(d) "Non-Project-based Employees" means employees of the
Agent other than Project-based Employees.
(e) "Operating Year" means each fiscal year, which shall
be on a calendar year basis, of the Projects.
(f) "Partnership Notes" means those 13% Nonrecourse
Pension Notes Due December 31, 2001, issued pursuant to the Trust
Indenture, not exceeding $42,672,000 in aggregate principal amount.
(g) "Payroll Account" means one or more bank accounts
established by Agent with a bank or financial institution whose
deposits are insured by an agency of the United States Government,
carried in Agent's name under Agent's Federal Employer (Tax)
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Identification Number, with the Agent having signatory authority, and
designated on record as "[Project Name] - Payroll Account." A Payroll
Account may be an interest or non-interest bearing account including,
without limitation, checking accounts, savings accounts, money market
accounts and certificates of deposit, as Agent deems advisable.
(h) "Principal Parties" means the Owner and the Agent.
(i) "Project Administrator" means the person designated
and selected by Agent to perform full-time supervisory management
services at the Project site.
(j) "Operating Budget" means the annual operating budget
for a Project prepared by Agent.
(k) "Project-based Employees" means all on-site employees
of a Project including, without Incitation, the Project Administrator.
(l) "Rental Agency Account" means one or more bank
accounts separated from all other accounts and funds established by
Agent with a bank or financial institution whose deposits are insured
by an agency of the United States Government, carried in Agent's name
under Agent's Federal Employer (Tax) Identification Number, with the
Agent and Owner having signature authority, and designated on record
as "[Project Name] Rental Agency Account." A Rental Agency Account may
be an interest or non-interest bearing account including, without
limitation, checking accounts, savings accounts, money market accounts
and certificates of deposit, as Agent deems advisable.
(m) "Trust Account" means one or more bank, accounts
separated from all other accounts and funds established by Agent with
a bank or financial institution selected by Agent in its sole
discretion whose deposits are insured by an agency of the United
States Government, carried in Agent's name under Agent's Federal
Employer (Tax) Identification Number, with Agent and Owner having
signature authority, and designated on record as "[Project Name] Trust
Account". A Trust Account must be an interest-bearing account
including, without limitation, checking accounts, savings accounts,
money market accounts and certificates of deposit, as Agent deems
advisable.
3. Management Plan. Except as otherwise provided in this
Agreement, Owner and Agent shall meet and confer from time to time, as
reasonably requested by Owner or Agent but no less than once a year, for the
sole purpose of reviewing the Management Plan for each Project and the policies
and procedures set forth therein. Agent shall deliver not later than sixty
(60) days prior to the end of the preceding Operating Year the entire
Management Plan for each subsequent Operating Year to Owner for Owner's review
and approval, which approval shall not be unreasonably withheld. Owner and
Agent may agree to amend the Management Plan from time to time, but any such
amendment shall be in writing signed by both Owner and Agent. The initial
Management Plans and any subsequent Management Plan and all amendments thereto
shall be deemed to be additional terms and conditions binding the Principal
Parties of this Agreement and shall be incorporated herein by reference as
though set forth herein in full, except that, should any
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provisions of the initial Management Plan or any subsequent Management Plan and
all amendments thereto conflict with any terms, conditions, or provisions of
this Agreement, then this Agreement shall govern.
4. Marketing. Agent will use his discretion in marketing the
Projects subject to any limitations contained in the applicable Management Plan
and Marketing Plan. Ongoing advertising expenses within such limitations shall
be Project expenses payable out of the Rental Agency Accounts.
5. Rentals. The Agent will offer for rent and will use its
reasonable efforts to rent dwelling units and any other rental facilities in
the Projects. Incident thereto, the following provisions will apply:
(a) Agent will use its reasonable efforts to show the
premises to prospective tenants.
(b) Agent will use its reasonable efforts to take and
process applications for rentals. If an application is rejected by
Agent, the applicant will be told the reason for rejection, and the
rejected application, with reason for rejection noted thereon, will be
kept on file by Agent for one (1) year. A current list of prospective
tenants will be maintained.
(c) Subject to any limitations imposed by applicable law,
Agent will use its reasonable efforts to cause rental agreements to be
in a general form included in the applicable Management Plan, and
(i) all individual rental agreements relating to
dwelling units to be entered into by tenants shall be prepared
by Agent and executed by Agent in Agent's name identified
thereon as Agent for Owner.
(ii) all commercial and concession agreements, if
any, shall be negotiated by Agent, executed by Agent in
Agent's name identified thereon as agent for Owner.
(d) No resident may occupy space in any of the Projects
without an executed lease. No lease or lease renewal shall be entered
into for a term in excess of one year, subject to renewal.
(e) Agent shall prepare and provide to Owner, for Owner's
review and approval, which approval shall not be unreasonably
withheld, monthly rent and service package schedules showing minimum
rents and fees to be charged for dwelling units and other facilities
and services.
(f) Subject to any limitations imposed by law, Agent will
use its reasonable efforts to collect, deposit and disburse security
deposits, if required, in accordance with the terms of each tenant's
rental agreement. Security deposits will be deposited by Agent
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in the respective Project's Trust Account. All such deposits,
together with accrued interest, if any, shall be disbursed as follows:
(i) first, in accordance with any applicable law;
(ii) second, in accordance with terms of any
written or oral agreement under which it was received; and
(iii) third, if any amount is remaining, to Owner
by disbursement to the respective Project's Rental Agency
Account at such times as Agent, in Agent's discretion, deems
appropriate.
Agent shall use its reasonable efforts to keep complete and accurate
records on the Trust Accounts identifying, among other things: (1)
what amount, or remaining portion thereof, of any principal deposit is
attributable to a particular tenant, tenancy or agreement; (2) if
required by law or any written agreement, what amount of interest or
remaining portion thereof, is attributable to said principal; and (3)
all disbursements.
6. Collection of Rents and other Receipts. Agent will use its
reasonable efforts to collect when due all rents, charges and other amounts
receivable for Owner's account in connection with the management and operation
of the Projects. Except for those amounts required to be deposited in the
Trust Accounts, such receipts shall be deposited in the Rental Agency Accounts.
7. Enforcement of Leases. Agent shall use its reasonable efforts
to secure compliance by each tenant with the terms of such tenant's lease.
Subject to the pertinent procedures prescribed in the applicable Management
Plan, Agent will lawfully terminate any tenancy when in the Agent's judgment
sufficient cause, including but not limited to nonpayment of rent, for such
termination occurs under the terms of the tenant's lease. For this purpose,
Agent is authorized to employ legal counsel to bring actions for eviction and
to execute notices to vacate and judicial pleadings incident to such actions;
provided, however, that Agent will use its reasonable efforts to keep Owner
informed as to the progress and status of such actions. Reasonable attorneys'
fees and other necessary costs incurred in connection with such action will be
paid out of the respective Rental Agency Account as Project expenses. Agent
shall have the authority to select one or more attorneys that may be engaged
for such purposes.
8. Maintenance and Repair. Subject to any limitation contained
in this Agreement or the Management Plans (including the operating Budgets for
the Projects), and any written limitations reasonably imposed by Owner, Agent
shall have full authority to maintain and repair the Projects and will use its
reasonable efforts to cause the Projects to be maintained and repaired in
accordance with the standards for a comparable apartment development in
counties and localities in which the respective Projects are located,
including, but not limited to, cleaning, painting, decorating, plumbing,
carpentry, masonry, electrical and elevator maintenance and repair work,
grounds care and such other maintenance and repair work as may be necessary.
Owner shall deliver to Agent, to the extent available and without
representation or warranty as to
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their accuracy or any other matter related thereto, copies of all as-built
surveys of the Projects; as-built plans and specifications of the Projects
(marked to show changes); engineering, mechanical, electrical and plumbing
drawings and specifications of the Projects; and warranties, guarantees and
owners or operations manuals with respect to systems and equipment located in
the Projects.
In connection therewith, the following provisions will apply:
(a) Special attention will be given to preventive
maintenance, to the extent reasonably and financially feasible.
(b) Agent will use regular Project-based Employees
wherever, in Agent's reasonable judgment, possible. Agent, on behalf
of Owner, will contract with qualified independent contractors for
maintenance and repair work as in Agent's reasonable judgment,
appropriate.
(c) Agent will use its reasonable efforts to
systematically and promptly receive and investigate all service
requests from tenants, take such action thereon as may be justified
and will use its reasonable efforts to keep records of the same.
Emergency requests will be received and reasonably serviced on a
twenty- four hours-a-day, seven days-a-week basis.
(d) Subject to the terms and provisions of this Agreement
and the Management Plans (including the Operating Budgets for the
Projects), Agent is authorized to purchase for the account of each
Project all materials, equipment, tools, appliances, supplies and
service necessary, in Agent's reasonable judgment, for the proper
maintenance and repair of such Project.
(e) Agent will require that all maintenance and repairs
will be done in material compliance with known applicable building
codes and laws.
(f) Notwithstanding any of the foregoing provisions, the
prior approval of Owner, which shall not be unreasonably withheld,
will be required for any expenditure for maintenance and/or repair
which exceeds Five Thousand Dollars ($5,000.00) in any one instance
for labor, materials or otherwise, in connection with the maintenance
and repair of a Project, except for (i) recurring expenses within the
limits of the applicable Operating Budget, (ii) other expenses
provided for in such Operating Budget and (iii) emergency repairs
involving manifest danger to persons or property, or required to avoid
suspension of any necessary service to a Project. In the event of
such emergency repairs, Agent will inform Owner of the facts as
promptly as possible. In no event shall Agent use any funds set aside
in a replacement or similar reserve not designated for use in the
Operating Budget without first notifying Owner in writing of the
nature of such use and obtaining the prior written approval of Owner
to such use, which approval shall not be unreasonably withheld.
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Except as otherwise provided by this Agreement, all expenditures for
maintenance and repair shall be Project expenses.
9. Utilities and Services. In accordance with the Management
Plans and the Operating Budgets, Agent will use its reasonable efforts to
arrange for all necessary utilities and services, including, but not limited
to, water, electricity, gas, sewage, trash disposal, vermin extermination,
cable television and telephone service. Agent will contract with the providers
of such services on behalf of Owner and will execute the contracts in Agent's
name, identified therein as Agent for Owner, as may be necessary to secure such
utilities and services. All the Costs for said services, including, without
limitation, deposits, hook-up and installation fees and service charges, shall
be Project expenses.
10. Employees.
(a) All Project-based Employees shall be employees of
Agent. Agent shall have sole authority over Project-based Employees
and Non-Project-based Employees who are directly responsible for the
Projects and all matters pertaining thereto and shall be responsible
for all actions and omissions of such employees occurring pursuant to
Agent's employee policy manuals. All costs of hiring, equipping and
providing the services of Project-based Employees and
Non-Project-based Employees who are directly responsible for the
Projects, including, but not limited to, compensation, health and
liability insurance, payroll taxes, bonding, workers' compensation
insurance, benefits and vacations shall be treated as an expense of
Agent to be reimbursed by Owner.
(b) Reasonable travel expenses incurred by
Non-Project-based Employees traveling between the Project and Agent's
offices, office supplies, overnight courier charges, long-distance
telephone charges and fidelity bond costs shall also be considered an
operating expense of the Project. Additionally, all allowable
expenses as stated under Section 10 of the Third Amended and Restated
Agreement of Limited Partnership for NHP Retirement Housing Partners
I, Limited Partnership shall be considered operating expenses of the
Project.
11. Disbursements from Accounts.
(a) Rental Agency Accounts:
(i) Agent will use its reasonable efforts to make
the following disbursements promptly when payable from the
funds collected and deposited by Agent in the applicable
Rental Agency Account and interest, if any, accrued thereon:
(A) Agent shall disburse to the Payroll
Account sufficient sums to reimburse all of Agent's
obligations associated with compensation of
Project-based Employees and Non-Project- based
Employees who are directly responsible for the
Projects, including, without limitation,
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compensation, withholding taxes and assessments,
employer's contribution to taxes and assessments,
workers' compensation and disbursements for health
and other insurance and benefits, if any.
(B) All sums otherwise due and payable
by Owner as expenses of the Project incurred by Agent
under the terms of this Agreement, the applicable
Management Plan (including the Operating Budget for
such Project) and the applicable Marketing Plan,
including, without limitation, compensation and
reimbursements payable to Agent for Agent's services
hereunder, real estate and other property taxes and
all other fees, taxes, assessments and charges
relating to ownership, maintenance and operation of
such Project.
(C) To the extent financially feasible,
as determined by Agent, interest, principal and other
sums due and payable by Owner in connection with any
indebtedness secured by the Project or otherwise
related to the Project as set forth in the Operating
Budget.
(D) After payment of the aforementioned
items, the remaining balance, if any, shall be kept
in reserve for anticipated expenses, to the extent
deemed necessary or desirable by Agent and otherwise
shall be paid by Agent to Owner on the twentieth
(20th) day of each calendar month.
(ii) In the event that the balance in the Rental
Agency Account of any Project is at any time insufficient to
pay disbursements due and payable under this Subparagraph
11(a), Agent will inform Owner in writing of such fact. If
Owner advises Agent that the funds in the Partnership reserves
are not sufficient to cover such insufficiency, then Agent may
advance funds to cover such insufficiency from Agent's own
funds, or may elect immediately to terminate this Agreement.
If advanced by Agent, such funds shall be deemed to be an
interest bearing loan at prime plus four percent (4%) to such
Project to the extent of such insufficiency, and, shall be
repaid to Agent prior to any disbursement to Owner from the
Rental Agency Account or any other Project account.
(b) Payroll Accounts:
(i) From funds deposited in the Payroll Accounts
and interest, if any, accrued thereon, Agent will make the
following disbursements promptly when payable:
(A) Compensation due Project-based
Employees and Non-Project-based Employees who are
directly responsible for the Projects.
(B) Workers' compensation and employer's
payments with respect to withholding taxes and
assessments, including, but not limited to,
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employer's contributions with respect to
Project-based Employees, and Non-Project-based
Employees who are directly responsible for the
Projects and disbursements for health and other
insurance and benefits, if any.
(ii) In the event that the balance in the Payroll
Account of any Project is at any time insufficient to
pay any disbursements due and payable under this Subparagraph
11(b), Agent will draw sufficient funds out of such Rental
Agency Account to cover said expenses and, if there are
insufficient funds in such account from which to draw, Agent
will inform Owner in writing of such fact. If Owner advises
Agent that the funds in the Partnership's reserves are not
sufficient to cover such insufficiency, then Agent may advance
funds to cover such insufficiency from Agent's own funds, or
may elect immediately to terminate this Agreement. If
advanced by Agent, such funds shall be deemed to be an
interest bearing loan at prime plus four percent (4%) to such
Project to the extent of such insufficiency, and shall be
repaid to Agent prior to any disbursement to Owner from the
Rental Agency Account or any other Project account.
12. Budgets. Annual Operating Budgets for each Project will be
included in the Management Plan and will be subject to approval by Owner, which
approval shall not be unreasonably withheld. Except as permitted under
Subparagraph 8(f) above, annual disbursements for each type of operating
expenses itemized in the operating Budget will not exceed the amount authorized
by the approved Operating Budget. Agent will prepare a recommended Operating
Budget for each Operating Year during the term of this Agreement, in such form
as may be reasonably prescribed by Owner, and shall submit each such Operating
Budget with the Management Plan in accordance with the provisions of Paragraph
3 hereof. Owner will promptly inform Agent of changes, if any, in the approved
Operating Budget, and Agent will keep Owner informed of any anticipated
material deviation from the receipts or disbursements stated in the approved
Operating Budget; such changes and anticipated deviations shall be subject to
further approval by Owner, which approval shall not be unreasonably withheld.
13. Records and Reports. In addition to any other requirements
specified in the Management Plans or other provisions of this Agreement, Agent
will have the following responsibilities with respect to records and reports:
(a) Agent will establish and maintain a system of
records, including, but not limited to, rent records, insurance
policies (other than policies maintained by Owner), leases and
subleases, current certificates of insurance for contractors,
subcontractors and independent contractors, correspondence, receipted
vouchers, a resident profile and an employee profile (including the
names, addresses, home phone numbers, social security numbers and
other appropriate information for all Project-based Employees),
pertaining to the Projects or the operation thereof. All such
records, books and accounts will be subject to examination at
reasonable hours at Agent's home office by any authorized
representative of Owner, subject, however, to any laws or regulations
protecting the privacy or confidentiality of such information. Such
records will include resident income
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verifications required by governmental agencies, if any are so
required by such agencies. All such records, books and accounts shall
be and remain the sole property of Owner.
(b) Agent will furnish such information (including
occupancy reports) as may be reasonably requested by Owner from time
to time with respect to the financial, physical or operational
condition of the Projects.
(c) By the twentieth day of each calendar month, Agent
will furnish Owner with statement of receipts and disbursements for
each Project during the previous month from each account detailing
receipts and disbursements for the month and the year-to-date and
comparing same to the budget for such Project established pursuant to
Paragraph 12 hereof. In the event Agent is unable to furnish Owner
with such statement as provided herein, Agent shall have an additional
15 days to furnish such statement to Owner.
(d) By the twentieth day of the calendar month following
each calendar quarter (i.e., April 20, July 20, October 20 and January
20), Agent will furnish Owner with an adjusted trial balance of each
of the Projects, on an accrual basis, as of the end of the preceding
calendar quarter, in form and detail reasonably agreed to by Agent and
Owner. In the event Agent is unable to furnish Owner with such
balance as provided herein, Agent shall have an additional 15 days to
furnish such balance to Owner.
(e) Except as otherwise provided in Paragraphs 10 and 24
of this Agreement, the overhead expenses of Agent's home office,
including but not limited to, equipment and transportation for Agent's
home office managerial personnel and compensation, benefits and other
related costs for Agent's non-Project-based Employees (except those
who are directly responsible for the Projects), will be borne by Agent
out of its own funds and will not be treated as Project expenses.
(f) Owner shall select a certified public accountant to
prepare an annual financial report of the Projects for each calendar
year based upon the preparer's examination of the books and records of
the Owner and the Agent, and a partnership United States Partnership
Return of Income (Form 1065) and related state returns for the
Project; Agent shall cooperate fully and promptly with such certified
public accountant. Such annual financial report shall be certified by
the preparer and the Agent and shall be delivered to the Owner within
ninety (90) days after the end of the Projects' fiscal year. All fees
and costs of the selected certified public accountant shall be a
Project expense. Except as otherwise provided herein, all corporate,
partnership and individual income tax returns for Owner are the sole
responsibility of Owner, except that the records and reports furnished
Owner by Agent shall be reasonably sufficient for these purposes.
14. Bids, Discounts, Rebates, Etc. Agent will use its reasonable
efforts to obtain contracts, materials, supplies, utilities and services on
terms deemed by Agent, in its reasonable judgment, to be fair and appropriate.
Agent is authorized to solicit bids, either formal or informal, for those items
which can be obtained from more than one source. Agent will use its reasonable
efforts to secure and credit to Owner all discounts, rebates and other
concessions or
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incentives earned in connection with the Project and all other transactions on
Owner's behalf. Agent will not enter into any contract or agreement which
provides, directly or indirectly, for any overhead, profit or xxxx-up payable
or otherwise allocable to Agent, without the prior approval of Owner except
Agent is authorized to provide therapy, home health care, assisted living,
rehabilitation services and other similar services at market rates in the
vicinities in which the Projects are located.
15. On-site Management Facilities. On-Site office facilities for
intermittent use by Agent's non-Project- based Employees and for the Project
Administration reasonably satisfactory to Agent shall be provided by Owner as
Project expenses.
16. Insurance. Owner will arrange for policies of insurance
against physical damage (such as fire with extended coverage endorsement,
boiler and machinery) and against liability for loss, damage or injury to
property or persons which might arise out of the occupancy, management,
operation or maintenance of the Projects, and such other policies of insurance,
including without limitation automobile insurance, as may reasonably be
necessary in connection with the Projects, and shall include Agent as an
additional insured on any such policies. Payment of any deductible amounts
with respect to any claims will be made from the applicable Project's Rental
Agency Account and will be treated as an operating expense of such Project.
Agent shall be entitled to 30 days' written notice prior to any cancellation of
any of such insurance policies. Agent will pay premiums for all such insurance
out of the applicable Project's Rental Agency Account, and such premiums will
be treated as operating expenses of such Project. Agent will pay any
deductible amounts with respect to any claims out of the applicable Project's
Rental Agency Account, and such payments will be treated as operating expenses
of such Project. Deductible amounts on insurance policies shall be determined
by Owner. Agent will use reasonable efforts to assist Owner in obtaining the
most favorable insurance rates possible, including, but not limited to,
requesting quotations, reviewing bids and comparing coverage variations. Agent
will be responsible for obtaining workers' compensation insurance for
Project-based Employees.
17. Claims Against Insurance. Agent shall use its reasonable
efforts to investigate and submit a written report to the insurance carrier or
its agent and Owner as to all accidents, claims for damage relating to the
ownership, operation and maintenance of the Projects, any damage to or
destruction of the Projects and the estimated costs of repair thereof, and
shall use its reasonable efforts to prepare and file with the insurance company
or its representative and Owner in a timely manner and otherwise as the
insurance company and/or Owner reasonably requires reports in connection
therewith. Agent shall use its reasonable efforts to take no action (such as
admission of liability) which might preclude Owner from obtaining any
protections provided by any policy held by Owner or which might prejudice the
defense in any legal proceeding involving Owner or any of the Projects, or
otherwise prevent Owner from protecting itself against any such claims, demands
or legal proceedings. Agent shall reasonably cooperate with Owner in the
defense or settling of any such claim, demand or legal proceeding arising out
of any policies, including the execution of proofs of loss, the adjustment of
losses, signing and collection of receipts and collection of money.
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18. Additional Insurance. As long as this Agreement is in effect,
Agent shall maintain workers' compensation coverage for Agent's Project-based
and Non-Project-based Employees in statutory amounts and employer's liability
coverage for Agent ($100,000.00 each accident, $100,000.00 disease limit per
employee, $500,000.00 disease policy limit). Such policies of insurance shall
provide for written notice to Owner of cancellation or nonrenewal of, or
material changes in, such insurance within 30 days thereof. Expenses Incurred
by Agent in connection with such insurance shall be treated as an expense of
the Project with respect to Project-based Employees, and with respect to
Non-Project-based Employees to the extent such Non-project-based Employees
render services to the Projects. Any additional insurance obtained by Agent
for their own account shall be at their own expense.
19. Fidelity Bond. Agent shall furnish for each Project, as a
Project expense, a fidelity bond against misapplication of Project funds, loss,
theft, embezzlement or other fraudulent acts on the part of agent or its
employees. The surety thereon shall be in an amount not less than the sum of
(i) monthly "Gross Receipts" (hereinafter defined) from the operation of such
Project based on the estimated year-end occupancy as set forth in the
applicable Management Plan and (ii) the maximum possible level of funds held as
security deposits based on the estimated year-end occupancy as set forth in
such Management Plan.
20. Agent's Professional Liability Coverage. Agent shall
maintain, as a Project expense, Professional Liability Coverage for Real Estate
Management Errors and omissions, providing coverage for Agent and its employees
in the amount of $2,000,000.00 per Project. Owner must be furnished evidence
of such coverage for the entire term of this Agreement and any renewal or
extension hereof.
21. Contractor's, Subcontractor's Insurance. Agent shall use its
reasonable efforts to require all contractors, subcontractors and independent
contractors entering upon any of the Projects to perform services, to have
insurance coverage, at the contractor's, subcontractor's or independent
contractor's expense, in the following minimum amounts:
(a) Workers' Compensations and Employer's Liability
statutory amount (Limit for employer's liability for $100,000.00 each
accident, $100,000.00 disease limit per employee, $500,000.00 disease
policy limit).
(b) Comprehensive General Liability in the amount of:
(i) $1,000,000.00 combined single limit for
bodily injury and property damage including Broad Form
Coverage Endorsement Extension, affording products and
completed operations and contractual liability coverage
(deleting XCU exclusions, if applicable); or
(ii) if the value of a contractor's,
subcontractor's or independent contractor's contract is in
excess of $1,000,000.00, Agent shall determine the appropriate
amount of insurance required in connection therewith prior to
the execution of such contract and shall advise Owner of such
insurance requirements.
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(c) Comprehensive Auto Liability insurance covering the
use of all owned, nonowned and hired automobiles with bodily injury
and property damage limits of $1,000,000.00 combined single limit.
(d) Umbrella Liability following form coverage above
Workers' compensation and Employer's Liability, Comprehensive General
Liability and Comprehensive Automobile Liability as required above for
a minimum of $1,000,000.00 combined single limit for bodily injury and
property damage.
Agent shall use its reasonable efforts to keep on file current certificates of
insurance showing that each contractor and subcontractor is so insured,
providing for 30 days written notice of cancellation, nonrenewal or reduction
in policy limits below $1,000,000.00 and naming Owner and Agent as additional
insureds. Agent shall use its reasonable efforts to not permit any contractor,
subcontractor or independent contractor to enter upon any of the Projects to
perform services who has not provided Agent with such a certificate or
certificates of insurance, unless Agent has delivered a letter to Owner
requesting a waiver of any of the above requirements for such contractor,
subcontractor or independent contractor and has received Owner's written
approval of such waiver.
22. Compliance With Governmental Orders. Agent shall use its
reasonable efforts to comply promptly with any and all statues, regulations,
orders, building codes, zoning and licensing requirements, and other
requirements affecting the Projects, whether imposed by federal, state, county
or municipal authority, or other political subdivision, including but not
limited to, those statutes, regulations, orders, codes and requirements
respecting tenant security deposits. Nevertheless, Agent shall take no such
action so long as Owner is contesting, or has affirmed its intention to
contest, any such order or requirement. Agent will use its reasonable efforts
to notify Owner in writing of all notices of such orders or other requirements
within 48 hours from the time of their receipt. Upon the prior written consent
of Owner, Agent may appeal any requirement Agent deems unwarranted and Agent
may compromise or settle any dispute regarding such requirements.
23. Non-Discrimination. In the performance of its obligations
under this Agreement, the Agent will use its reasonable efforts to comply with
the provisions of any federal, state or local law prohibiting discrimination
in housing on the grounds of race, color, creed or national origin, including
Title VI of the Civil Rights Act of 1964 (Public Law 88-3452, 78 Stat. 241),
regulations issued pursuant to Executive Order 11063, and Title VII of the 1968
Civil Rights Act.
24. Agent's Compensation. Agent will be compensated for their
services under this Agreement by fees to be paid out of the Rental Agency
Accounts and such fees will be treated as Project expenses. Such fees will be
payable during the term of this Agreement and any extensions or renewals
thereof, prior to payments out of the Rental Agency Accounts of any other
Project expenses, in the amounts and on the dates set forth below.
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(a) A monthly management fee (the "Monthly Management
Fee") for each Project equal to the amount calculated pursuant to
Exhibit X hereto (specific percentages in Exhibit X shall refer to
percentages of Gross Receipts unless otherwise indicated), subject to
increase or decrease as provided below. For purposes hereof, the term
"Gross Receipts" shall mean gross monthly receipts of whatever kind or
nature collected by Agent from the operation of the Project, excluding
(i) security deposits received from residents and, if applicable,
interest accrued thereon for the benefit of the residents until such
deposits or interest are applied for rental payments; (ii)
reimbursements by residents for work done for particular residents;
(iii) proceeds from the sale or other disposition of all or any part
of such Project; (iv) insurance proceeds received by Owner as a result
of any insured loss (except proceeds for rent loss insurance); (v)
condemnation proceeds (except proceeds for lost rent); (vi) capital
contributions made by any partner of the Partnership; (vii) loans by
Owner or Agent; and (viii) proceeds from Capital, financing and any
other transactions not in the ordinary course of operation of such
Project. The Monthly Management Fee for each Project shall be payable
monthly in arrears in installments following calculation thereof upon
submission of a monthly statement for such Project from the Rental
Agency Account. Subject to the provisions of Paragraph 26 hereof, it
is agreed between Owner and Agent that if the Gross Receipts of any
Project are insufficient to pay all disbursements, including the
Monthly Management Fee, or any portion thereof, then Owner shall use
the Partnership reserves to make such disbursements. It is further
agreed between Owner and Agent that in no event will any disbursement
be made to Owner from any Project Account, until all accrued and
unpaid fees to Agent and repayments, if any, to Agent for Agent's
advancement of funds to cover any insufficiencies in the such
Project's Rental or Payroll Account have been paid in fall. Upon
termination of this Agreement pursuant to Paragraph 26, the parties
will prorate the Monthly Management Fee for each Project on a per diem
basis to the effective date of such cancellation or termination.
(b) A monthly fee for providing food services for each
Project, including the planning and provision of tenant meals (the
"Dietary Services Fee"), exclusive of reimbursed expenses, equal to
the amount calculated pursuant to Exhibit X hereto. In connection
with providing food services, Agent shall maintain and make available
to Owner upon reasonable notice sufficient records pertaining to food
service costs, including but not limited to invoices, delivery
receipts and payroll records.
25. Term. This Agreement shall become effective the day and year
first written above and shall continue in full force and effect until December
31, 2001, hereinafter referred to as the "Term," unless sooner terminated as
provided in Paragraph 26 below.
26. Termination. This Agreement shall continue in full force and
effect until expiration of the Term unless sooner terminated as follows:
(a) This Agreement may be terminated by the mutual
written consent of the Principal Parties.
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(b) In the event Agent fails to receive reimbursement of
reimbursable expenses or any compensation due Agent pursuant to the
terms of this Agreement and such failure continues for a period of 60
days after Agent's written notice thereof to Owner, Agent may
terminate this Agreement effective immediately upon expiration of such
60-day period without further notice to Owner; provided, however, that
this Agreement shall not be so terminated if Owner pays Agent all such
expenses and compensation then due and payable on or before the
expiration of said 60-day period; provided, further, however, that
Agent may terminate this Agreement immediately in the event that Owner
fails to advance funds to cover an insufficiency in any Payroll
Account within three business days after Owner's receipt of written
notice that such insufficiency exists, as provided in Paragraph 11(b)
above.
(c) In the event that a petition in bankruptcy is filed
by Agent or its assignee or in the event Agent or its assignee makes
an assignment for the benefit of creditors or takes advantage of any
insolvency act, Owner may terminate this Agreement with notice to the
Agent.
(d) With regard to a Project, in the event that such
Project is sold by Owner, unless Owner sells such Project to an
affiliate of the Partnership.
(e) Agent shall fail to keep, observe or perform any
material covenant, agreement or provision of this Agreement to be
kept, observed or performed by Agent, and such default shall continue
for sixty (60) days after written notice thereof from Owner (unless
Agent is in good faith using commercially reasonable efforts to cure
such failure, in which case such period shall be extended for two
years).
(f) Misappropriation of funds held by Agent in trust for
Owner or any other fraudulent act committed by Agent and related to
the performance of Agent's obligations hereunder, but only if (i)
Xxxxxxx Xxxx or Xxxxx Xxxxxx are active participants in such
misappropriation or fraudulent act, or (ii) with respect to
misappropriation of funds, such funds are not reimbursed to Owner
within 45 days after notice from Owner to Agent, or (iii) with respect
to fraudulent acts, Owner is not reimbursed for any damages caused by
such acts within 45 days after notice from Owner to Agent.
(g) In the event that Agent fails in a material way to
operate, lease and maintain the Projects as required under the terms
of this Agreement, the Management Plans and/or the Marketing Plans,
such failure continues for 60 days after Owner's written notice
thereof to Agent and Agent does not cure such failure during such
60-day period (unless Agent is in good faith using commercially
reasonable efforts to cure such failure, in which case such period
shall be extended for two years) and such failure is the result of
Agent's willful misconduct, gross negligence or unlawful act as
finally determined by a court having jurisdiction regarding such
matter.
(h) In the event that (i) Agent's or its assignee is
dissolved (ii) Agent's real estate brokerage license, if such license
is legally required as a condition to manage or
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lease the Project, is terminated or (iii) Agent or its assignee cease
to continue to do business for any reason Owner may terminate this
Agreement by notice to Agent.
(i) Owner may terminate this Agreement by written notice
to Agent in the event that none of Xxxxx Xxxxxx, Xxxxxxx Xxxx or Xxxxx
Xxxxxxxxxxx is an executive officer of Agent and Owner has not
approved the individual replacing any of such persons as an executive
officer, which approval shall not be unreasonably withheld.
(j) In the event that this Agreement is assigned by Agent
in breach of Paragraph 27(h).
Upon termination, Agent will submit to Owner any financial statements required,
and after the Principal Parties have accounted to each other with respect to
all matters outstanding as of the date of termination, Owner will furnish Agent
security, in the form and principal amount satisfactory to Agent, against any
obligations or liabilities which the Agent may properly have incurred on behalf
of Owner hereunder.
All notices required under this Paragraph 26 shall be in accordance with
Subparagraph 27(b) below.
27. Interpretative Provisions.
(a) This Agreement may be executed in several
counterparts, each of which shall constitute a complete original
Agreement, which may be introduced in evidence or used for any other
purpose without production of any of the, other counterparts.
(b) Except as otherwise provided in this Agreement, all
notices under this Agreement shall be in writing and shall be
delivered by personal service, by overnight courier from whom a
receipt can be obtained or by certified or registered mail, return
receipt requested, from one party to the other at the following
addresses or such other address as one party may advise the other by
written notice:
If to Agent: Capital Senior Living, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn.: Xx. Xxxxx Xxxxxxxxxxx, President
If to Owner: NHP Retirement Housing Partners I Limited Partnership
c/o Capital Realty Group Senior Housing, Inc.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn.: Xx. Xxxxx X. Xxxxxx, Chief Operating Officer
Xx. Xxxxxxx X. Xxxx, Chief Executive Officer
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The date of receipt of notice shall be the date delivered if personally
delivered or five days after the date of mailing if mailed.
(c) The rights and remedies of either of the parties
hereunder shall not be mutually exclusive, i.e., the exercise of one
or more of the provisions hereof shall not preclude the exercise of
any other provisions hereof. Each of the parties confirms that
damages at law will be an inadequate remedy for a breach or threatened
breach of this Agreement and agrees that, in the event of a breach or
threatened breach of any provision hereof, the respective rights and
obligations hereunder shall be enforceable by specific performance,
injunction, or other equitable remedy, but nothing herein contained is
intended to, nor shall it, limit or affect any rights at law or by
statute or otherwise of any party aggrieved as against the other for a
breach or threatened breach of any provision hereof, it being the
intention of this Subparagraph 27(c) to make clear the agreement of
the parties that the respective rights and obligations of the parties
hereunder shall be enforceable in equity as well as at law or
otherwise.
(d) All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all
other genders; and the singular shall include the plural and vice
versa. Titles of Articles, Subparagraphs and Paragraphs are for
convenience only, and neither limit nor amplify the provisions of this
Agreement itself. The use herein of the word "including," when
following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to
similar terms or matters, whether or not non-limiting language (such
as without limitation, or, but not limited to, or words of similar
import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement term or matter.
(e) Each party hereto agrees, without any additional
consideration, to do all acts and things and to make, execute and
deliver such written instruments, as shall from time to time be
reasonably required to carry out the terms and provisions of this
Agreement.
(f) Should any litigation be commenced between the
parties hereto or their representatives or should any party institute
any proceeding in bankruptcy or similar court which has jurisdiction
over any party hereto or any or all of his or its property or assets
concerning any provision of this Agreement or the rights and duties of
any person or entity in relation thereof, the party or parties
prevailing in such litigation shall be entitled in addition to such
other relief as may be granted, to a reasonable sum as and for his or
its or their attorneys' fees and court costs in such litigation which
shall be determined by the court in such litigation or in a separate
action brought for that purpose.
(g) In the event that any provision of this Agreement
shall be held to be invalid or unenforceable, the same shall not
affect in any respect whatsoever the validity or enforceability of the
remainder of this Agreement.
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(h) Except as provided herein to the contrary, this
Agreement shall be binding upon and inure to the benefit of the
parties signatory hereto, their respective heirs, executors, legal
representatives and permitted successors and assigns. Neither this
Agreement nor any portion thereof including, but not limited to, any
money due or to become due under this Agreement, may be assigned by
either party except upon written consent of all the Principal Parties
hereto. This Agreement is a personal service contract; except as
specifically provided herein, Agent's duties may not be delegated to
another party, except for delegation of nominal duties in the ordinary
course of business or as otherwise permitted hereunder, without in
each instance the prior written consent of Owner, which may or may not
be given in Owner's sole discretion. Notwithstanding the foregoing,
Owner consents to the sale, assignment, contribution or similar
transfer of all or a portion of this Agreement to an Affiliate of
Agent.
(i) This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance
with the laws of Texas.
(j) No consent or waiver, express or implied, by a party
to or of any breach or default by the other party in the performance
by such other party of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or
default in the performance by such other party of the same or any
other obligations of such other party hereunder. Failure on the part
of a party to complain of any other party in default, irrespective of
how long such failure continues, shall not constitute a waiver by such
party of its rights hereunder. The giving of consent by a party in
any one instance shall not limit or waive the necessity to obtain such
party consent in any future instance.
28. Indemnifications.
(a) Agent's Indemnity: Owner shall indemnity and hold
Agent harmless from all claims, actions, liabilities, expenses and
attorney's fees not covered by insurance in connection with, arising
from, or incurred as a result of Agent performing its duties under
this Agreement, including, without limitation, damage to property and
injury or death of any employee, tenant, guest, invitee, trespasser or
other person whatsoever, alleged or actual defective construction of a
Project or any equipment thereon, and the failure of Agent to pay any
expenses and costs of a Project as required by this Agreement if
necessary funds are not made available to Agent by Owner; provided,
however, that Owner shall not indemnify Agent from and against any of
the foregoing claims, actions, liabilities, expenses or attorney's
fees, arising from or incurred as a result of Agent's gross
negligence, willful misconduct or unlawful act.
(b) Owner's Indemnity: Agent shall indemnify and hold
Owner harmless from all claims, actions, liabilities, expenses and
attorney's fees not covered by insurance arising from or incurred as a
result of any gross negligence, willful misconduct or unlawful act
performed by Agent in regard to the management of a Project, including
the acts of Agent's employees, servants and agents, and violation of
any statute, ordinance,
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law or regulation of any governmental body, public authority or
official thereof having jurisdiction.
29. No Partner Liability. Notwithstanding anything to the
contrary contained in this Agreement, the Owner shall not have any personal
liability for the payment of any fee, compensation or reimbursement under this
Agreement, including any interest thereon. Agent (a) shall look solely to the
assets of the Partnership for the payment of such fee, compensation or
reimbursement, and (b) shall not seek a deficiency or other personal judgment
against the Owner for such payment.
IN WITNESS WHEREOF, the Principal Parties, by their duly authorized officers,
have executed this Agreement as of the date first above written.
OWNER:
NHP RETIREMENT HOUSING PARTNERS I
LIMITED PARTNERSHIP, a Delaware
limited partnership
By: Capital Realty Group Senior
Housing, Inc., General Partner
By: /s/ Xxxxxxx X. Xxxx
-----------------------------
Xxxxxxx X. Xxxx
Chief Executive Officer
AGENT:
CAPITAL SENIOR LIVING, INC.,
a Texas corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx, Chief
Operating Officer
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SCHEDULE I
Properties: The Atrium of Xxxxxxxxxx, Carmichael, California
Crosswood Oaks Apartments, Citrus Heights, California
The Heatherwood, Southfield, Michigan
The Veranda Club, Boca Raton, Florida
The Amberleigh at Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx
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EXHIBIT X
FEE SCHEDULE
Amberleigh
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Monthly Management Fee Greater of 5 % or $10,900 per month
Food Services Fee Greater of 20% of actual cost or $8,500 per month
Atrium of Carmichael
--------------------
Monthly Management Fee 5%
Food Services Fee 20 % of actual cost
Crosswood Oaks
--------------
Monthly Management Fee 5%
Food Services Fee 20 % of actual cost
Heatherwood
-----------
Monthly Management Fee Greater of 5% or $9,000 per month
Food Services Fee Greater of 20% of actual cost or $7,500 per month
Veranda Club
------------
Monthly Management Fee Greater of 5% or $9,650 per month
Food Services Fee Greater of 20 % of actual cost or $8,000 per month
20
