Contract
Exhibit
10.26
PROPERTY
NAME: [INSERT]
THIS
AGREEMENT (this
“Agreement”) is
made as of this _____day of _______, 200_, by and between BLC-[insert
property name], LLC, a
Delaware limited liability company (“Lessee”) and
Brookdale Provident Management, LLC, a Delaware limited liability company
(“Manager”).
WITNESSETH:
WHEREAS,
Lessee is the long term lessee of the Facility (as defined below) and is
entitled to operate and manage the Facility; and
WHEREAS,
Lessee desires to retain the service of Manager, upon the terms and conditions
set forth in this Agreement, to manage and operate the Facility for and on
behalf of Lessee, and Manager desires to manage and operate the Facility for and
on behalf of Lessee for the fees and upon the other terms and conditions set
forth in this Agreement.
NOW,
THEREFORE, for and in consideration of the agreements, covenants and other terms
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. APPOINTMENT. Lessee
hereby retains and appoints Manager, effective as of the date hereof (the
“Effective
Date”), on
the terms and conditions provided herein, as exclusive management and leasing
agent of and for a community based senior housing residential facility
consisting of land, buildings and other improvements located in the State of
[insert
state] (the
“State”),
currently known as [insert
name and address of facility]
(hereinafter collectively referred to as the “Facility” or the
“Property”), and,
by executing this Agreement, Manager hereby accepts such
appointment.
In the
performance of its duties under this Agreement, Manager shall serve in the
position of an independent contractor with respect to the Lessee. Nothing
contained herein shall be construed as making the parties hereto partners or
joint ventures, and, except as expressly otherwise provided for herein, nothing
contained herein shall be construed as making Manager an agent or employee of
Lessee.
2. LICENSING. Manager
will apply for, obtain and maintain, in the name of Manager, Lessee and/or the
owner of the Property (“Lessor”), as appropriate, all necessary licenses and
permits required for the operation of Facility for the management, marketing and
operation of the Facility. Lessee will supply or cause to be supplied such
information and materials as Manager may need to fulfill the foregoing
obligations and any and all other obligations under this Agreement. The cost of
complying with this paragraph shall be included in the Budgets (as defined
below) and paid out of the Operating Account (as defined below) as cost and
expense of the Property. Notwithstanding Manager’s right to terminate this
Agreement for Cause pursuant to the terms of Section 11(c) of this Agreement,
Manager shall cooperate with Lessee, as applicable, to the extent reasonably
necessary to transfer all licenses and permits held by Manager which are
required for the management or operation of the Facility.
3. MANAGEMENT. Manager
shall perform the following management services for Lessee:
(a) Manager
shall perform all of the obligations of Lessee relating to the operation,
management and maintenance of the Facility and relating to delivery of reports
and information with respect to the Facility and the operation
thereof.
(b) Manager
shall have the exclusive authority and right to supervise and direct the
business associated or related to the daily operation of the Facility. Such
duties and authority shall include, but shall not necessarily be limited to,
those set forth or described below:
(i) Manager
shall collect all monthly service fees, rents, rental percentages, common area
maintenance charges, sales tax, rental escalations, parking charges, operating
expense reimbursements, real estate taxes, insurance premiums or stops, utility
charges, HVAC charges, and all other fees or payments due from residents or
tenants of the Facility.
(ii) Manager
shall cause the building, equipment and common areas of the Property to be
maintained, which maintenance work shall include interior and exterior cleaning,
painting, decorating, plumbing, carpentry and such normal maintenance and repair
work as is necessary for the efficient operation of the Facility. With the
exception of payments required in connection with mortgages, real estate taxes,
utilities and Lessee approved contractual obligations, no one disbursement
obligation shall be made in excess of Five Thousand Dollars ($5,000) unless it
is included in or contemplated by the Budget or is authorized or approved by
Lessee, and all expenses which, in the aggregate, will exceed Five Thousand
Dollars ($5,000) must be included in the Budget or otherwise approved by Lessee.
However, emergency repairs involving danger to life or property, or immediate
actions necessary for the security, preservation, and safety of the Facility or
the residents or tenants, or necessary to avoid the suspension of any necessary
service to the Facility may be made by Manager irrespective of the cost
limitation imposed herein. Manager shall supervise all repairs, replacements,
remodeling and alterations, structural or otherwise, to the Facility as
requested by Lessee, subject to the terms of the construction management
provisions contained in Section
9 herein.
Notwithstanding anything to the contrary in this Agreement, in no event shall
any Capital Improvements (as defined below) be made to the Facility unless
included in or contemplated by the Budget or is authorized or approved by
Lessee. “Capital
Improvement” shall
mean any repair, alteration, addition, purchase of equipment and/or improvement,
the cost of which, for federal income tax purposes, must be capitalized and
amortized over the life of such repair, alteration, addition, equipment or
improvement.
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(iii) Manager
shall initiate procedures to collect fees, rents, charges and other payments
from all residents and tenants of the Facility, if, when and to the extent
Manager determines such procedures are appropriate. Manager shall have the
authority to cause to be instituted, on behalf and in the name of the Lessee,
any and all legal actions and all legal proceedings Manager deems necessary or
advisable to collect fees, rents, charges or other payments due to the Lessee
with respect to the Facility or to oust or dispossess any residents, tenants or
other persons unlawfully in possession under any residency agreement, lease,
license, concession agreement or otherwise, and to collect damages for breach
thereof or default thereunder by such resident, tenant, licensee, concessionaire
or occupant. The costs of all such legal actions or proceedings shall be
expenses of the Property.
(iv) To the
extent Manager determines it to be necessary or appropriate, Manager shall make
or maintain contracts for water, electricity, gas, fuel, telephone, pest
extermination, elevator service, office cleaning, security, HVAC maintenance and
other necessary services. Manager shall also purchase, in the name of Lessee,
such equipment, tools, appliances, materials and supplies as Manager deems
necessary or desirable for the operation or maintenance of the Facility. All
such contracts and purchases shall be made in the name of the Lessee and
executed by Manager on Lessee’s behalf. Copies of such contracts and purchase
orders shall be made available to Lessee upon request. When securing bids,
Manager shall use its good faith efforts to secure for Lessee any discounts,
commissions or rebates obtainable in connection with such purchases and to
obtain the lowest possible prices as are consistent with good quality
workmanship and service. Manager shall attempt to cause all service contracts
entered into on behalf of Lessee by Manager to contain a thirty (30) day
cancellation clause.
(v) Manager
shall investigate all incidents or accidents which give rise, or may give rise,
to a claim for damages relating to the ownership, operation and maintenance of
the Facility, including any damage or destruction to the Facility, and shall
notify Lessee in writing as promptly as practicable of any such incident or
accident, and shall cooperate with, and make all reports required by, any
insurance company.
(vi) Manager
shall make recommendations to Lessee with respect to the suitability of protests
of real estate valuations applicable to the Property.
(vii) Manager,
as an independent contractor, shall prepare, file and be liable for all returns
and payments for State Sales Tax, Unemployment Insurance, Workers' Compensation
Insurance, state and local wage taxes, and Social Security with respect to
Manager’s employees who are employed by Manager at the Facility. Manager shall
not be obligated to prepare any of Lessee’s state or federal income tax
returns.
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(viii) Subject
to the terms of this Agreement, Manager shall employ all employees to the extent
Manager determines to be necessary and appropriate to enable Manager to
successfully manage the Facility. The costs of all full-time and part-time
employees who are employed on-site for the management and operation of the
Facility shall be fully reimbursed by Lessee. Manager shall identify those other
employees of Manager or any of Manager’s affiliates whose salaries and benefits
may from time to time be charged either fully or partially to the Property.
Except as set forth herein, all matters pertaining to the hiring, supervision,
compensation, promotion and discharge of any employees are and shall be the sole
responsibility of the Manager, shall be, in all respects, the employer of such
employees, either directly or through an affiliated company.
(ix) One or
more on-site management representatives of Manager shall be available to manage
and operate the Facility during normal business hours of the Facility. Manager
shall supervise management personnel, as well as its leasing agents on a daily
basis, to the extent Manager determines such supervision to be necessary or
appropriate to assure the efficient management and operation of the Facility,
and to achieve the appropriate level of leasing activity. Manager shall furnish
to residents and tenants of the Facility such services as are usual and
customary for similar properties in the locale or as required under the
applicable residency agreements or leases.
(x) Manager
shall maintain all accounts receivable records for the Property and shall accept
payments of fees, rents and other charges, shall make deposits in a banking
institution designated by Manager, shall invoice all residents and tenants on a
monthly basis for all service and rental charges, and shall manage all
evictions.
(xi) Upon
termination of this Agreement, and for a period not to exceed thirty (30) days
thereafter, Manager shall fully cooperate with Lessee as necessary to arrange a
smooth transfer of Manager’s books and records for the Facility. Final payment
to Manager of all amounts due hereunder will not be made until all books and
records for the Facility are received by Lessee or its designee.
(xii) Certain
economies may be achieved with respect to certain services to be provided to the
Facility or certain expenses to be incurred on behalf of Lessee hereunder if
materials, supplies, insurance or services are purchased by Manager or one of
its affiliates in quantity for use not only in connection with the Facility, but
also other properties or facilities managed or operated by Manager or its
affiliates. Manager shall have the right to contract for such services or
purchase such materials or supplies in its own name or in the name of one or
more of its affiliates and charge Lessee and the Property an appropriate portion
of the cost; provided, at Lessee’s request, Manager shall provide Lessee with
access to records of such purchase so Lessee may review any such expenses
incurred.
(xiii) Manager
shall prepare or maintain residency agreements and leases for the Facility and,
at Lessee’s request, shall prepare summaries of all contracts related to the
Facility. The original of each executed residency agreement, lease and contract
shall be retained in the Facility records maintained by Manager and, at Lessee’s
request, an executed copy shall be delivered to Lessee.
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(xiv) Manager
shall manage the Facility in accordance with all existing laws and regulations
governing the operation of independent senior and assisted living facilities in
the State. Manager will be responsible to provide all services required to be
provided by Manager or Lessee in the service agreements, residency agreements
and leases.
(xv) At
Lessee’s request, Manager will provide to Lessee for Lessee's approval a
marketing and leasing plan for the Facility outlining the duties and
responsibilities of each person on the marketing staff at the Facility as well
as an agenda and strategy for improving marketing and occupancy. This marketing
and leasing plan will be maintained and periodically up-dated by Manager and
will be submitted to Lessee promptly following Lessee’s request
therefor.
4. BUDGETS
AND REPORTS. Manager
shall prepare and, at Lessee’s request, shall submit to Lessee a proposed
operating and capital budget (as may be amended or revised as provided herein,
the “Budget”) for
the operation, repair, maintenance and Capital Improvements to the Property for
the 2005 calendar year no later than sixty (60) days after the Effective Date.
Thereafter, on or before December 1st of each year during the term of this
Agreement, Manager shall prepare and, at Lessee’s request, shall submit to
Lessee a preliminary and final Budget for the following calendar year. The
Budget shall (i) be prepared on a format determined by Manager to be appropriate
and (ii) show a month by month projection of income, expenses, capital
expenditures and reserves. After the applicable Budget is approved by Lessee,
Manager shall use its good faith efforts to implement the Budget and use its
good faith to ensure that the actual cost of operating the Property shall not
exceed the approved Budget. The Budget shall be deemed to have been approved by
Lessee unless Lessee requests that the Budget be submitted to Lessee for
Lessee’s review and approval and Lessee objects to the Budget, or any item in
the Budget, within ten (10) days following the date the Budget is submitted to
Lessee. Manager may amend or revise the Budget at any time or from time to time
and, at the request of Lessee, shall submit any amendments or revisions to the
Budget to Lessee for the Lessee’s approval. Unless Lessee requests that the
amendment or revision to the Budget be submitted to Lessee for Lessee’s review
and approval and Lessee objects to the proposed amendment or revision within ten
(10) days following submittal of the same to Lessee, such amendment or revision
will be deemed to have been approved by Lessee.
5. FINANCIAL
RESPONSIBILITIES.
(a) Manager
shall keep and maintain all necessary books, papers, documents, sales and
disbursement records, purchase orders, invoices, payroll and management records,
receipts and all other records and accounts normally maintained in connection
with the operation of comparable properties or otherwise deemed appropriate by
Manager, reflecting all transactions, expenditures, receipts and other business
dealings entered into or incurred in connection with the operation of the
Facility, all of which books, records, accounts and other documents shall be
maintained in a manner reasonably determined by Manager to be appropriate.
Lessee shall have the right to inspect and copy, at reasonable times, any such
books, records, or accounts maintained by Manager for and on behalf of Lessee,
and, at Lessee’s request, Manager shall deliver to Lessee the originals of such
books, records or accounts, or copies thereof.
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(b) Within
twenty (20) days after Lessee’s request at any time after the end of a given
calendar month, Manager shall deliver to Lessee a monthly reporting package for
such month (hereinafter referred to as the “Monthly
Reporting Package”)
containing some or all of the financial and management reports described on
Exhibit
A attached
hereto, as requested by Lessee, summarizing all matters pertaining to the
management, leasing, maintenance, accounting and operation of the Facility for
such calendar month.
(c) Lessee
shall reimburse Manager within ten (10) business days from its receipt of
written notice for any monies which Manager has advanced for the account of
Lessee. Such reimbursements may be made by Manager through disbursements from
the Operating Account. Nothing herein contained, however, shall be construed to
obligate Manager to pay any expenses or to make any advances to or with respect
to the Facility.
(d) Lessee
shall establish, in the name of Manager and/or Lessee, an account (hereinafter
referred to as the “Operating
Account”) in a
banking institution designated by Manager, on which representatives of Manager,
and at Lessee’s request, Lessee, shall be authorized signatories. Manager shall
deposit or cause to be deposited in the Operating Account all moneys paid or
furnished by Lessee to Manager pursuant to the terms hereof as operating or
working capital or for other costs and expenses for or with respect to the
Facility, and all fees rentals, charges and other revenues hereafter received by
Manager, for and on behalf of Lessee, in connection with the management, rental
and operation of the Facility, and shall make disbursements and payments from
the Operating Account on behalf of Lessee in such amounts as are required in
connection with the day-to-day management and operation of the Facility;
provided, however, Manager shall use its good faith efforts to ensure that all
such disbursements and payments shall be made in accordance with the Budget,
unless Lessee shall agree otherwise. All funds in the Operating Account shall be
Lessee’s property. To the extent required by Lessee’s financing, all accounts
related to the Facility may be pledged to the Lessee’s lender. All funds
received from the Facility shall be deposited into the Operating Account as soon
as practical following receipt thereof.
(e) Manager
may, from time to time, notify Lessee of the amount of the cash balance in the
Operating Account less a working capital reserve in an amount reasonably
determined by Manager to be appropriate (hereinafter referred to as the
“Working
Capital Amount”).
Lessee may initiate the wire transfer of funds from the Operating Account in the
amount of the cash balance less the Working Capital Reserve at any time or from
time to time.
(f) From the
funds collected and deposited in the Operating Account pursuant to Section
5(d) above,
Manager will make the following disbursements promptly when
payable:
(i) Reimbursement
to Manager for compensation and other amounts paid or payable by Manager in
connection with the employment of the Reimbursable Employees, including amounts
for the taxes and assessments paid or payable by Manager to local, state and
federal governments in connection with the employment of such
personnel.
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(ii) The
Management Fee payable to Manager in accordance with the applicable provisions
hereof.
(iii) All sums
otherwise due and payable by the Lessee as expenses of the Property to the
extent authorized to be paid, incurred or advanced by the Manager under the
terms of this Agreement or otherwise reasonably appropriate for the operation
and management of the Property.
(iv) Except
for the disbursements mentioned herein, funds will be disbursed or transferred
from the Operating Account only as the Lessee may from time to time
direct.
(g) Lessee,
upon reasonable notice, has the right to audit the Manager and its management
operations in respect of the Facility. Such audit may include an audit of
Manager’s, internal control implementation and compliance procedures associated
solely with the Facility and an audit of gross receipts and expenses of the
Facility. The audit will be conducted at Lessee’s expense.
(h) Manager
may incorporate all banking, accounting and financial reporting with respect to
the Facility into Manager's centralized accounting system and allocate the
appropriate charges to the Property.
6. LESSEE’S
RESPONSIBILITIES. All
obligations or expenses incurred as contemplated hereby shall be incurred for
the account of and at the expense of Lessee and the Property. All direct
expenses relating to Manager’s operation of the Facility, including, but not
limited to, postage, couriers, telephone, facsimile, and photocopies shall be
paid or reimbursed by Lessee from the Operating Account or otherwise. All
expenses relating to the employment of Reimbursable Employees and the costs
incurred for an on-site management office, including, but not limited to, the
cost of salaries, all insurance, fringe benefits, employer’s portion of payroll
taxes, cost of telephone, office supplies and similar items shall be paid or
reimbursed by Lessee from the Operating Account or otherwise. All expenses
relating to persons employed in connection with the operation and maintenance of
the Facility, as well as utilities, repairs, maintenance and similar items of
expense incurred by Manager in connection with the performance of its
obligations hereunder or in connection with the management or operation of the
Facility shall be paid or reimbursed by Lessee form the Operating Account or
otherwise. Subject to approval by Lessee or as set forth in or contemplated by
the Budget, Lessee agrees to make funds required for the management or operation
of the Facility, renovations, repairs, or tenant improvements available within
thirty (30) days following the request by Manager. All residency agreements,
leases, contracts, and other documents necessary for Manager to perform its
obligations hereunder shall, at Manager’s request, be delivered by Lessee to
Manager within ten (10) days following such request. Any employees engaged in
the operation and maintenance of the Facility, including engineers, maintenance
persons, watchmen and all other employees shall be the employees of the Manager.
All salaries, wages or other remuneration of such employees shall be paid by the
Manager and charged as an operating expense to the Property and shall be
reimbursed by Lessee from the Operating Account or otherwise. Lessee shall be
solely responsible to residents and tenants or former residents and tenants for
any refund that is due under a residency agreement or lease agreement, and
Lessee shall hold harmless, indemnify, and defend Manager form and against such
claims.
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7. MANAGEMENT
FEE. Manager
shall be paid by Lessee for management services performed under this Agreement,
a fee (the “Management
Fee”)
payable monthly equal to five percent (5.0%) of the monthly Gross Receipts.
“Gross Receipts” for any calendar month shall mean the entire amount of all
receipts from fees, rents, charges, food service, laundry service and any other
ancillary or assisted living services provided by Manager to residents or
tenants of the Facility received during the month, plus any expense
contributions collected from residents or tenants. Gross Receipts shall not
include reimbursable security deposits or entrance fees (unless applied toward
the payment of rents, service fees or other fees due), sales tax, proceeds
payable to Lessee from sale of all or part of the Property, prepaid rent or fees
until such time as such rent or fees become due, proceeds payable to Lessee from
any hazard or title insurance policies, except insurance proceeds for loss of
rents or fees. Payment of the Management Fee attributable to for the prior month
shall be paid to Manager from the Operating Account within ten (10) days
following the end of such month.
8. RENTALS. Manager
will offer for occupancy or rent, and will rent, the dwelling units, parking
spaces, and other rental facilities and concessions in the Property. Incidental
thereto, the following provisions will apply:
(a) Manager
will show the Facility and the units in the Facility to prospective residents
and tenants.
(b) Manager
will take and process applications for rentals or occupancy. If an application
is rejected, the applicant will be told the reason for rejection, and the
rejected applications, with reason for rejection noted thereon, will be retained
on file for two (2) years or for such shorter or longer time as may be required
by law. Manager will also maintain a current list of prospective
residents.
(c) Manager
will prepare all residency agreements and, if applicable, parking permits and
will execute the same with its name identified thereon as Manager for the
Lessee. The terms of all residency agreements will comply with the applicable
laws and be in a form prepared by Manager and not objected to by the
Lessee.
(d) In
connection with the preparation of Budgets, at Lessee’s request, Manager will
furnish the Lessee with schedules showing proposed rents, fees and charges for
all dwelling units at the Facility and for all other rental facilities and
concessions at the Property, together with charges for additional services
offered at the Facility, and all of such rents, fees and charges shall be deemed
approved by Lessee unless Lessee objects thereto within ten (10) days following
Lessee’s receipt of such schedule.
(e) In
connection with the preparation of the Budget, at Lessee’s request, Manager will
furnish the Lessee with schedules showing rental rates, fees and charges for
dwelling units at facilities that are in competition with the Facility, to the
extent Manager may reasonably obtain the same.
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9. CONSTRUCTION
SUPERVISION. Manager
agrees to act as construction manager for any Capital Improvements or other
construction work at the Property, and Manager will supervise, oversee and
administer all aspects of the construction work.
No fee
shall be payable to Manager if construction costs are estimated to cost less
than Twenty-Five Thousand Dollars ($25,000). If the estimated cost of
construction exceeds such amount, Manager shall be entitled to a construction
management fee in an amount agreed upon by Lessee and Manager, which fee shall
not be less than Seven Percent (7%) of the first One Hundred Thousand Dollars
($100,000) of the total construction cost of each construction project and Three
Percent (3%) of any construction costs above One Hundred Thousand Dollars
($100,000). Lessee shall pay all costs incurred in connection with the
construction or in connection with the construction management services provided
by Manager, including all out-of-pocket expenses incurred by Manager, including,
without limitation all fees payable to architects, engineers, designers, space
planners, general contractors and subcontractors hired by Manager, on behalf of
Lessee, as Manager determines to be reasonably necessary to complete such
Capital Improvements and which are reflected in, or contemplated by, a Budget
prepared by Manager and not objected to by Lessee. All applications for payment
from Lessee shall be on a form determined by Manager to be appropriate, and with
such back-up as Lessee may reasonably request.
10. COMPLAINTS
AND NOTICES. Manager
shall handle, in a prompt and efficient manner, complaints and requests from
residents, tenants, concessionaires and licensees and notify Lessee of any major
complaint made by a resident, tenant, concessionaire or licensee. Manager shall
notify Lessee promptly (and provide Lessee with copies of supporting
documentation) of any of the following of which Manager becomes aware: (i) any
notice of violation of any governmental requirements (and Manager shall make
recommendations regarding compliance therewith) after Manager receives notice
and knowledge thereof; (ii) any material defect or unsafe condition in the
Facility of which Manager becomes aware; (iii) any fire, accident or other
casualty or damage to the Facility; (iv) any condemnation proceedings, rezoning
or other governmental order, lawsuit or threat thereof involving the Facility;
(v) any violations relative to the leasing, use, repair and maintenance of the
Facility under governmental laws, rules, regulations, ordinances or like
provisions of which Manager becomes aware; (vi) material defaults under any
residency agreement, lease or other agreement affecting the Facility; or (vii)
any violation of any insurance requirement of which Manager becomes aware.
“Material” shall
be defined as an event, circumstance, condition or change which would reasonably
be expected to significantly adversely affect the day-to-day operation of the
Facility, or significantly diminish the value of the Facility taken as a whole.
Manager shall keep Lessee reasonably informed of the status of the particular
matter through the final resolution thereof. In the case of any fire or other
damage to the Facility, Manager shall give prompt notice thereof to Lessee and
shall complete all necessary and customary loss reports in connection with any
fire or other damage to the Facility. Manager shall retain in the records it
maintains for the Facility copies of all supporting documentation with reference
to the foregoing.
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Manager shall
promptly notify Lessee and any insurance Manager Lessee may designate of any
personal injury or property damage occurring to or claimed by any resident,
tenant or third party on or with respect to the Facility. Manager shall promptly
forward to Lessee, with copies to any insurance Manager Lessee may designate,
any summons, subpoena or other legal document served upon Manager relating to
the actual or alleged potential liability of Lessee, of Manager or of the
Facility.
11. TERM
OF THE AGREEMENT AND TERMINATION.
(a) This
Agreement will be for an initial period commencing on the Effective Date and
ending on __________, 2014 and thereafter will be renewed automatically for
successive five (5) year periods, unless written notice of non-renewal is given
by either Lessee or Manager at least sixty (60) days prior to the end of the
existing term.
(b) Either
Manager or Lessee may terminate this Agreement at any time for any reason by
giving thirty (30) days’ prior written notice to the other party.
(c) Lessee
and Manager shall have the right to immediately terminate this Agreement for
Cause at any time during the term of this Agreement. For purposes hereof,
“Cause” shall
mean a breach or default by Manager or Lessee, as applicable, of any of its
material obligations hereunder if such breach or default continues for a period
in excess of thirty (30) days following the receipt of written notice of such
breach or default; provided, such thirty-day period shall be extended if the
breach or default cannot reasonably be cured within such thirty-day period and,
during the thirty-day period, Manager or Lessee, as applicable, has commenced
curing such breach or default and is diligently pursuing such cure.
(d) Upon
termination of this Agreement by either party, and for whatever reason, Lessee
shall keep and maintain such insurance as outlined in Section
14,
including general and incidental medical professional liability coverage on
behalf of Manager for a period of not less than one (1) year following the date
of termination of this agreement. Such insurance maintenance may be in the form
of the purchase by the Lessee of an “extended reporting period” which provides
the parties a twelve (12) month period from the date the policy ends to report
claims which have occurred subsequent to the policy date.
12. NOTICE. All
notices given or required by this Agreement shall be hand delivered or sent by
certified return receipt requested or registered mail addressed in the case of
Lessee to:
BLC-[insert
property name], LLC
c/o
Brookdale Living Communities, Inc.
000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attention:
R. Xxxxxxx Xxxxx
10
With a
copy to:
Brookdale
Living Communities, Inc.
000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxx, Esq.
and in
the case of Manager to:
Brookdale
Provident Management, LLC
c/o
Brookdale Living Communities, Inc.
000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attention:
R. Xxxxxxx Xxxxx
With a
copy to:
Brookdale
Living Communities, Inc.
000 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxx, Esq.
Proof of
the deposit of any such mail so addressed and with postage prepaid in the United
States Mail shall constitute a conclusive presumption of its receipt by
addressee as of three (3) days following the deposit in the mail.
13. INDEMNITY. Subject
to the provisions of Section
20, Lessee
agrees to and shall indemnify, defend and hold Manager harmless from and against
any and all liabilities, obligations, claims, damages, penalties, causes of
action, costs and reasonable expenses (including, without limitation, reasonable
attorneys’ fees), to the maximum extent permitted by law, imposed upon or
incurred by or asserted against Manager arising out of or incurred by Manager in
connection with this Agreement or the Facility or the operation of the Facility;
provided, however, that in no event shall Lessee be required to indemnify,
defend or hold Manager harmless from and against any damage or injury caused by
the gross negligence or willful misconduct of Manager, its Managers or
employees.
Manager
agrees to and shall indemnify, defend and hold Lessee harmless from and against
any claim resulting from damages or injuries (including reasonable attorneys’
fees and expenses) to persons or property arising out of Manager’s gross
negligence or willful misconduct.
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The
indemnification provisions of this Article shall survive the termination of this
Agreement; provided, however, the inclusion of this sentence shall not be
construed to mean that liability does not survive the termination of this
Agreement with regard to any other provision hereof.
14. INSURANCE.
(a) Lessee
will obtain and keep in force property insurance and commercial general
liability insurance for the benefit of Lessee and Manager. Such liability
insurance shall include incidental medical malpractice liability coverage and
shall name Lessee and Manager as additional insureds. Such insurance may be
blanketed with other insurance carried by Lessee or any affiliate of Lessee.
Lessee will furnish Manager with a certificate of insurance evidencing that the
said insurance is in effect along with a copy of the liability policy and
evidence that the insurance premiums have been paid in full. Manager will
furnish whatever information is requested by Lessee for the purpose of placement
of insurance coverages and will aid and cooperate in every reasonable way with
respect to such insurance and any claim or loss thereunder. Manager will notify
Lessee promptly upon becoming aware of any property or liability loss, injury,
claim or other event which may result in a claim under any insurance policy
maintained by Lessee. Such insurance will cover the operations of the Property
in the state in which the Property is located. Such liability insurance may be
on a “claims made” form with respect incidental medical professional liability
provided, however if a “claims made” form is used, an extended reporting period
must be available and the Lessee agrees to purchase such extended reporting
period for a period of twelve (12) months should the policy terminate for any
reason, or should the facility be sold or this Agreement otherwise terminate.
(b) Manager
will obtain and keep in force the following types of insurance coverage with the
limits set forth below to the extent such coverage with such limits are
available for reasonable premiums:
(i) Automobile
liability insurance, covering owned, non-owned and hired vehicles, with limits
not less than One Million Dollars ($1,000,000), combined single limit of
coverage. The automobile liability insurance requirements can be satisfied with
an umbrella or excess liability policy.
12
(ii) Workers’
compensation insurance, as required by law.
(iii) Employer’s
liability insurance, with limits not less than Five Hundred Thousand Dollars
($500,000).
(v) Blanket
crime insurance, with limits not less than One Million Dollars ($1,000,000),
covering on a primary basis all employees who may handle or be responsible for
monies or other property of Lessee, naming Lessee as loss payee.
(vi) Such
other insurance as Lessee reasonably deems advisable for protection against
claims, liabilities and losses arising out of or connected with the operation of
the Property.
All
premiums for the foregoing insurance coverages shall be reimbursable expenses.
The minimum acceptable A.M. Best’s rating of each insurer is A-:VII. Manager
will furnish Lessee with certificates of insurance evidencing that the said
insurance is in effect at the inception of this Agreement and when coverage is
renewed or replaced, which will include provisions to the effect that Lessee
will be given at least thirty (30) days’ prior written notice of cancellation or
non-renewal of or any material change in any of the aforesaid policies. Lessee
will be named as an additional insured with respect to automobile liability
insurance, including any umbrella or excess policies.
(c) Notwithstanding
the foregoing, Lessee and Manager may agree that Manager shall obtain, on
Lessee’s behalf, all insurance coverings described in Section
14(a), in
which event, the cost of obtaining such coverings, including premiums, shall be
an expense of the Property.
(d) Manager
will require that all parties performing work on or with respect to the
Property, including, without limitation, contractors, subcontractors and service
vendors, maintain insurance coverage, at such parties’ expense, to include (i)
workers’ compensation insurance, as required by law; (ii) employer’s liability
insurance, with limits not less than Five Hundred Thousand Dollars ($500,000);
(iii) commercial general liability insurance, with limits not less than Two
Million Dollars ($2,000,000); (iv) medical professional liability insurance, if
applicable, with limits not less than Two Million Dollars ($2,000,000), and (v)
automobile liability insurance, covering owned, non-owned and hired vehicles,
with limits not less than Two Million Dollars ($2,000,000). The commercial
general liability, medical professional liability, and automobile liability
insurance may be satisfied with an umbrella or excess liability policy. The
minimum acceptable A.M. Best’s rating of each insurer is A-:VII. Higher policy
limits may be required by Lessee if the work to be performed is deemed to be
hazardous by Lessee.
Manager
will obtain and keep on file certificates of insurance evidencing that each such
party is so insured. Lessee will be named as an additional insured with respect
to contractor’s and subcontractor’s commercial general liability, medical
professional liability, and automobile liability insurance, including any
umbrella or excess policies. Manager must obtain written indemnification and
hold harmless provisions in favor of Lessee and Manager.
13
15. ATTORNEY’S
FEES. In the
event of any litigation between the parties to this Agreement, attorney’s fees
and all associated costs of litigation, including appeal, shall be awarded to
the prevailing party.
16. BINDING
EFFECT. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
17. ENTIRE
AGREEMENT. This
writing constitutes the entire Agreement between the parties with respect to the
subject matter hereof and may not be modified, supplemented, or amended except
by an instrument in writing executed by the parties.
18. DISCLAIMER. Lessee
acknowledges that it is, at all times, free to retain and/or consult with an
attorney of its choosing relative to any of the subject matters and services to
be rendered by Manager, it being expressly understood that Manager does not
furnish any legal advice.
19. ASSIGNMENT.
Inasmuch as Lessee is looking specifically to Manager for the performance and
fulfillment of the duties and obligations of Manager hereunder, Manager shall
not have the right to assign, transfer or convey any of its rights, title or
interest hereunder without the prior written consent of Lessee, which consent
may be withheld for any reason.
20. EXCULPATION.
(a) Manager
agrees that Manager shall look solely to Lessee’s interest in the Property for
the satisfaction of any claim now existing or hereafter arising or accruing
against Lessee, its officers, partners, shareholders, directors, Managers or
employees and in no event shall Lessee, its officers, directors, shareholders,
members, manager, partners, directors, Managers or employees have any personal
liability hereunder beyond the estate and interest, if any, of Lessee in the
Property.
(b) In no
event shall any member, manager, shareholder, partner, officer, director,
Manager or employee of Manager or of Manager’s affiliates be personally liable
for any of Manager’s obligations hereunder.
21. GOVERNING
LAW. The
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties shall be governed by the internal laws
of the State.
22. SEVERABILITY. Should
any term or provision hereof be deemed invalid, void or unenforceable either in
its entirety or in a particular application, such term or provision shall remain
in full force and effect with respect to all other applications.
23. HEADINGS. The
headings contained herein are for convenience of reference only and are not
intended to define, limit or describe the scope of intent of any provision of
this Agreement.
24. INDEPENDENT
CONTRACTOR. Manager
represents and warrants that it is an independent contractor during the term of
this Agreement and any extension thereof.
25. SUBORDINATION. Manager
agrees that this Agreement shall be subordinate to the lien of any mortgage,
deed or trust, ground or underlying lease, or the lien resulting from any other
method of financing or refinancing now or hereafter placed against any property
of Lessee, and to all renewals, modifications, replacements, consolidations and
extensions thereof. Upon receipt from Lessee, Manager agrees to execute and
deliver any and all documents subordinating its rights under this Agreement as
aforesaid.
[Signature
Page Follows]
15
IN
WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.
LESSEE:
BLC-[insert
property name], LLC,
a
Delaware limited liability company
By:
___________________________
Name: R.
Xxxxxxx Xxxxx
Title: Vice
President
MANAGER:
Brookdale
Provident Management, LLC,
a
Delaware limited liability company
By: ___________________________
Name: R.
Xxxxxxx Xxxxx
Title: Vice
President
16
EXHIBIT
A
MONTHLY
REPORTING REQUIREMENTS
| 1. |
Accrual
operating statement detailing the individual income and expense chart of
account categories with current month and year-to-date actual to budget
comparison. |
| 2. |
General
Ledger. |
| 3. |
Rent
Roll. |
| 4. |
Check
register for the month. |
| 5. |
Cash
Journal. “Cash Journal” is defined as an itemized report showing actual
deposits made to the operating account during the month. The cash journal
shall include, but is not limited to, cash, checks, money orders, and/or
credit card receipts for the day
specified. |
| 6. |
Bank
statements and bank reconciliations. |
| 7. |
Month
end delinquency report showing aging. |
| 8. |
Accounts
payable register (including aged outstanding
A/P). |
