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EXHIBIT 10.37
San Antonio
(Xxxxxxx Road)
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") entered into this 23rd day
of December, 1997 by and between TRI POINT COMMUNITIES, L.P., ("Owner"), a
limited partnership organized under the laws of the State of Texas, and CAPITAL
SENIOR LIVING, INC. ("Capital"), a corporation organized under the laws of the
State of Texas.
PREAMBLE
OWNER by this Agreement is engaging Capital to provide management
services relating to the operation of a senior living community to be located in
San Antonio, Texas on the land identified in Exhibit A.
This Agreement is founded on the following assumptions:
Owner retains primary responsibility to:
(a) Establish the policies of the Facility and to plan for its
short-range and long-range goals.
(b) Review and evaluate the performance of Capital in carrying out
the established policies and in attaining the goals established
by Owner.
(c) Annually review and approve the budget.
(d) Annually review the policies and goals which have been
established.
Capital assumes primary responsibility to:
(a) Implement the policies established by Owner.
(b) Supervise the day-to-day management of the Facility, including
all resident activities.
(c) Provide to Owner full, timely and accurate information as to past
operations.
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(d) Provide to Owner projections and recommendations relating to the
future operations of the Facility.
The parties therefore agree as follows:
I. RESPONSIBILITIES OF CAPITAL
A. RECOMMENDED POLICIES. Capital shall recommend policies and goals to be
established by Owner and shall evaluate such policies and goals on an
ongoing basis.
B. MANAGEMENT DUTIES. Capital shall supervise the operation of the Facility,
provide management services, install operating procedures and oversee
day-to-day operations, all subject to and in accordance with the budgets
approved by and policies established by Owner.
C. MARKETING DUTIES. Capital shall manage and supervise the marketing program.
Capital shall establish and periodically review the residency agreement and
if required, recommend changes thereof.
D. EMPLOYEES. All Facility-based Employees, including the administrative
employees, shall be employees of Capital. Capital shall have sole authority
over Facility-based Employees and Non-Facility-based Employees who are
directly responsible for the Facility and all matters pertaining thereto
and shall be responsible for all actions and omissions of such employees.
All costs of hiring, equipping and providing the services of Facility-based
Employees, including, but not limited to, compensation, health insurance,
employer liability insurance, payroll taxes, bonding, workers compensation
insurance, benefits and vacations shall be an expense of Capital. To the
extent the above-stated expenses are incurred in accordance with the
Facility Budget or approved by Owner, they shall be reimbursed from the
Facility operations or Owner as the case may be.
E. OPERATING PROCEDURES. Capital shall develop, install and maintain operating
procedures, systems and controls.
F. FACILITY EXPANSION. Capital shall make recommendations regarding remodeling
or expansion of the Facility.
G. BUDGETS. Capital shall prepare for review and approval by Owner based on
reasonable standards annual operating budgets for revenue, expense and cash
flow of the Facility and a capital expenditures budget. Budgets shall be
prepared in advance of each fiscal year. Cash flow projections shall
accompany each operating budget. Any changes to the budgets must be
approved by Owner.
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H. FINANCIAL CONTROLS. Capital shall establish and maintain a system of
financial controls for the Facility.
I. MONTHLY FINANCIAL STATEMENTS. Capital shall provide to Owner, on a monthly
basis, financial statements and related financial reports. Such statements
and reports shall be provided by the 20th day after the end of the month.
These reports shall be in the form attached as Exhibit "A."
J. MARKETING REPORTS. Capital shall, on a weekly and monthly basis, provide
sales and occupancy reports to Owner, as well as the results of the annual
resident satisfaction survey.
K. LEGAL COUNSEL. Capital, at Facility expense, shall coordinate with Owner
the utilization of legal counsel relating to Facility operations.
L. RENTAL COLLECTIONS AND DISBURSEMENTS. Capital shall collect the revenues
from the residents and, on behalf of Owner, deposit all such funds in a
residential depository account at a FDIC insured bank approved by Owner.
The style of the account shall be in the name of the Facility with
designated representatives from Owner and Capital being the only parties
authorized to draw from said account.
On an as needed basis, Capital shall transfer the funds from the above
stated account into an Operating Expense Account in the name of the
Facility. The account shall be in a FDIC insured bank approved by Owner.
The style of the account shall be in the name of the Facility with
designated representatives from Owner and Capital being the only parties
authorized to draw from said account. Capital shall pay out of such
Operating Expense Account all operating expenses for which payment has been
approved in accordance with the budget or approved by Owner (including
Capital's Management Fee and any other sums due to Capital from Owner), and
all other sums properly payable pursuant to any of the provisions of this
Agreement. Capital shall hold, remit or expend the balance of such funds,
if any, as Owner may direct. These funds shall not be co-mingled with funds
from any other projects and/or facilities managed and/or operated by
Capital.
M. ACCOUNTING SYSTEMS AND SOFTWARE. Capital shall provide to Owner, during the
term of this Agreement, appropriate on-site accounting systems and
software, which shall include complete accounting, bookkeeping and record
keeping services for the Facility, specifically including, but not limited
to, resident xxxxxxxx, accounts payable, accounts receivable, general
ledger and inventory records and maintain demographic information on the
residents. Acquisition of software for Facility based operations, software
maintenance and update charges will be budgeted expenses of the Facility.
Payroll processing may be delegated to a third party, the cost of which
will be the responsibility of the Facility.
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II. OWNER'S RESPONSIBILITIES
A. POLICIES. Owner shall establish the policies for the Facility.
B. GOALS. Owner shall establish the short range and long range goals of
the Facility.
C. BUDGETS. Owner shall review and approve budgets for the operation of
the Facility.
D. CAPITAL'S PERFORMANCE. Owner shall review and evaluate the performance
of Capital in carrying out the policies for the Facility.
E. LEGAL COUNSEL. Owner shall obtain legal counsel to perform all
necessary legal services relating to Owner's ownership of the
Facility.
F. AUDITS. Owner, at its discretion, may engage certified public
accountants to perform annual audits of the Facility as well as
prepare any other reports required for federal or state regulatory
agencies which require licensure and/or certification. Every quarter,
upon receipt of reasonable notice to Capital, all financial records
pertaining to the Facility will be open for inspection and review by
Owner's representatives. All labor and expense associated with such
review shall be borne by Owner.
G. DIRECTIVES. In order to assure proper coordination, Owner shall issue
any directions concerning the operations of the Facility only through
the President or Vice President of Capital.
H. OPERATING REPORTS. During the term of this Agreement, Owner shall,
within fourteen (14) days of issuance, furnish to Capital copies of
any and all Facility-related reports, including the annual audit (if
any).
I. CHANGE OF RESIDENCY AGREEMENT. Owner shall not change the Residency
Agreement without consulting with and seeking approval of Capital
unless required to do so to comply with any applicable law or
regulation.
J. DECISIONS. Owner shall examine documents submitted by Capital and
render decisions pertaining thereto promptly to avoid unreasonable
delay.
K. UNIFORM ACCOUNTS. Facility shall use the uniform chart of accounts
recommended by Capital.
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L. FURNISHING INFORMATION. Owner agrees at its expense to install and
maintain a computer terminal at the Facility compatible with the
mainframe computer currently in use by Capital and to transmit data to
Capital via telephone lines.
M. PURCHASE OF THE FACILITY.
1. The Owner hereby agrees that so long as Capital is not in default
in the performance of any duty or any obligation hereunder,
Capital shall have the option exercisable on not less than two
(2) months nor more than four (4) months notice to purchase the
Facility at a purchase price equal to the Fair Market Value of
the Facility. In the event Capital purchases the Facility
pursuant to this option, the Owner shall, upon receipt from
Capital of the applicable purchase price, deliver to Capital a
deed with covenants only against acts of the Owner conveying the
entire interest of the Owner in and to the Facility to Capital
subject to all Legal Requirements, permitted encumbrances, the
claims of all persons claiming by, through or under Capital, any
other matters assented to by Capital and all matters for which
Capital has responsibility under this Agreement, and any
encumbrance which Capital elects to assume. The applicable
purchase price shall be paid in cash to the Owner, or as the
Owner may direct, in federal or other immediately available funds
except as otherwise mutually agreed by the Owner and Capital. All
expenses of such conveyance, including, without limitation, title
examination costs, standard (and extended) coverage title
insurance premiums, attorneys, fees incurred by the Owner in
connection with such conveyance, recording and transfer taxes and
recording fees and other similar charges shall be paid by
Capital.
2. The Owner agrees that Owner shall give written notice to Capital
of receipt by Owner of an offer to purchase the Facility at least
ninety (90) days before closing the sale related to such offer.
Such notice shall specify all of the terms and conditions of such
offer.
3. In the event that it becomes necessary to determine the Fair
Market Value of the Facility for any purpose of this Agreement,
the party required or permitted to give notice of such required
determination shall include in the notice the name of a person
selected to act as appraiser on its behalf. Within ten (10) days
after receipt of any such notice, the Owner (or Capital, as the
case may be) shall by notice to Capital (or the Owner, as the
case may be) appoint a second person as appraiser on its behalf.
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4. The appraisers thus appointed, each of whom must be a member of
the American Institute of Real Estate Appraisers (or any
successor organization thereto), shall, within forty-five (45)
days after the date of the notice appointing the first appraiser,
proceed to appraise the Facility to determine the Fair Market
Value of the Facility as of the relevant date (giving effect to
the impact, if any, of inflation from the date of their decision
to the relevant date); provided, however, that if only one
appraiser shall have been so appointed, or if two appraisers
shall have been so appointed but only one such appraiser shall
have made such determination within fifty (50) days after the
making of Capital's or the Owner's request, then the
determination of such appraiser shall be final and binding upon
the parties. If two appraisers shall have been appointed and
shall have made their determinations within the respective
requisite periods set forth above and if the difference between
the amounts so determined shall not exceed ten percent (10%) of
the lesser of such amounts, then the Fair Market Value of the
Facility shall be an amount equal to fifty percent (50%) of the
sum of the amounts so determined. If the difference between the
amounts so determined shall exceed ten percent (10%) of the
lesser of such amounts, then such two appraisers shall have
twenty (20) days to appoint a third appraiser, but if such
appraisers fail to do so, then either party may request the
American Arbitration Association or any successor organization
thereto to appoint an appraiser within twenty (20) days of such
request, and both parties shall be bound by any appointment so
made within such twenty (20) day period. If no such appraiser
shall have been appointed within such twenty (20) days or within
ninety (90) days of the original request for a determination of
Fair Market Value of the Facility, whichever is earlier, either
the Owner or Capital may apply to any court having jurisdiction
to have such appointment made by such court. Any appraiser
appointed by the original appraisers, by the American Arbitration
Association or by such court shall be instructed to determine the
Fair Market Value of the Facility within thirty (30) days after
appointment of such Appraiser. The determination of the appraiser
which differs most in terms of dollar amount from the
determinations of the other two appraisers shall be excluded, and
fifty percent (50%) of the sum of the remaining two
determinations shall be final and binding upon the Owner and
Capital as the Fair Market Value of the Facility.
5. This provision for determination by appraisal shall be
specifically enforceable to the extent such remedy is available
under applicable law, and any determination hereunder shall be
final and binding upon the parties except as otherwise provided
by applicable law. The Owner and Capital shall each pay the fees
and expenses of the appraiser appointed by it and each shall pay
one-half of the fees and expenses of the third appraiser and
one-half of all
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other cost and expenses incurred in connection with each
appraisal.
6. Capital shall agree to enter into a Subordination Agreement on
reasonable terms and conditions with any lender from whom Owner
obtains a loan secured by the Facility.
7. For purposes of this Paragraph II.M., except as otherwise
expressly provided in this Agreement, the terms defined in this
Paragraph II.M. shall have the following meanings assigned to
them:
Fair Market Value: The fair market value of the Facility shall
not be less than Owner's cost basis (to include all hard and soft
costs) plus lease-up costs in the Facility, including all capital
additions, and including the land and all other portions of the
Facility, and (a) determined in accordance with the appraisal
procedures set forth in Paragraphs II.M. 2 and 3 or in such other
manner as shall be mutually acceptable to Owner and Capital
(including, without limitations as a negotiated percentage of
total project costs) and (b) not taking into account any
reduction in value resulting from any lien to which the Facility,
the Owner or Capital is otherwise required to remove of the
transaction. However, the positive or negative effect on the
value of the Facility attributable to the interest rate,
amortization schedule, maturity date, prepayment provisions and
other terms and conditions of any lien on the Facility which is
not so required or agreed to be removed shall be taken into
account in determining the Fair Market Value of the Facility. The
Fair Market Value shall be determined as the overall value based
on due consideration of the "income" approach, the "comparable
sales" approach, and the "replacement cost" approach.
Legal Requirements: Collectively, all statues, ordinances,
by-laws, codes, rules, regulations, restrictions, orders,
judgments, decrees and injunctions (including, without
limitation, all applicable building, environmental, health code,
zoning, subdivision, and other land use and health-care licensing
statutes, ordinances, by-laws, codes, rules and regulations),
whether now or hereafter enacted, promulgated or issued by any
governmental authority or accreditation body.
III. INSURANCE
A. Capital shall maintain, in full force and effect, at the Facility's
expense, the following insurance protecting Owner and Capital and
their officers and employees:
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1. Employee's fidelity insurance
2. Workers compensation and employers liability insurance
3. Professional liability insurance
4. Comprehensive general public liability insurance and overlying
umbrella liability coverage against loss or liability for damages
for personal injury or death occurring on, in or about the
Facility.
Such policy or policies shall be written by a responsible insurance
company or companies satisfactory to Owner and in kind and amounts
satisfactory to Owner. Certificates of insurance showing compliance
with the foregoing requirements shall be furnished by Capital to
Owner. Certificates shall state that the policy or policies will not
be canceled or altered without at least 30 days prior written notice
to Owner.
B. Owner shall procure and maintain, in full force and effect, at
Owner's expense the following insurance protecting Owner and
Capital and their officers and employees:
1. Property Insurance for loss or damage by fire and other
perils insurable under the broad form of extended coverage
insurance available in the area where the Facility is
located, and improvements, and contents thereof,
constituting all or any portion of the Facility.
2. Insurance for automobiles owned or hired by Owner and used
in connection with the Facility.
Such policy or policies shall be written by a responsible
insurance company or companies satisfactory to Capital in kind
and amounts satisfactory to Capital. Certificates of insurance
showing compliance with the foregoing requirements shall be
furnished by Owner to Capital. Certificates shall state that the
policy or policies will not be canceled or altered without at
lease thirty (30) days prior written notice to Capital.
IV. TERM AND TERMINATION OF THIS AGREEMENT
A. TERM AND TERMINATION WITHOUT CAUSE. This Agreement shall commence on
the date set forth on the first page hereof. Payment under Section V
shall commence on the date of the first resident move-in. The term of
this Agreement shall continue for a period of ten (10) years from the
date of the first resident move-in (the "Initial
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Term") and continue for the Initial Term unless terminated by law or
otherwise according to its terms. Capital shall have the option to
extend the term of this Agreement for an additional five (5) year
renewal option on the same terms and conditions as herein provided
(the "Extended Term").
B. If Owner terminates the Agreement prior to the expiration of the
Initial Term without cause or if Capital terminates this Agreement
during the Initial Term for cause as provided in Paragraph IV. B.
below, severance compensation in an amount equal to the then-current
monthly management fee times the number of months remaining in the
Initial Term shall be paid to Capital upon the effective date of
termination. Any such termination shall be effective upon the
expiration of the ninety (90) day period following the giving of the
notice or on such later date as may be specified in the notice.
C. TERMINATION FOR CAUSE.
1. This Agreement may be terminated by Owner for cause for the
following reasons:
a. In the event of material breach by Capital of a material
term hereof, which breach is not cured within sixty (60)
days after notice by Owner.
b. In the event that a petition in bankruptcy is filed by
Capital or its permitted assignee, or in the event Capital
or its permitted assignee makes an assignment for the
benefit of creditors or takes advantage of an insolvency
act, by notice to Capital or assignee.
c. In the event that (i) Capital's or any permitted assignee's
corporate existence is dissolved and the duties under this
Agreement are not assumed by Capital or an affiliate of
Capital (ii), Capital or any permitted assignee ceases to do
business for any reason, by notice to Capital or such
assignee and the duties under this Agreement are not assumed
by Capital or Capital's Affiliate.
d. At any time after the Initial Term, with or without cause.
e. In the event that the Facility is sold or otherwise
transferred to any third party which is not an affiliate of
Owner.
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2. This Agreement may be terminated for cause by Capital in the
event that Capital fails to receive reimbursement of reimbursable
expenses or any compensation due Capital pursuant to the terms of
this Agreement or any other compensation due Capital, and such
failure continues for a period of sixty (60) days after Capital's
written notice thereof to Owner; provided however, that this
Agreement shall not be so terminated if Owner pays Capital all
such expenses and compensation then due and payable on or before
the expiration of said sixty (60) day period.
Capital shall have the right to terminate this Agreement if
Capital fails to receive reimbursements or compensation as a
result of a subordination agreement by Capital in favor of a
lender of Owner, but such termination shall not be considered for
cause and shall not entitle Capital to the severance compensation
provided for in Section IV.B. hereof.
3. No termination of this Agreement shall affect any obligation
owing by either party hereto to the other which accrued prior to
the effective date of such termination.
D. COVENANTS SURVIVING TERMINATION. The termination of this Agreement
shall not terminate the right of Owner or Capital to indemnification
relating to events occurring during the term of this Agreement under
Article VI. K. and to protection of Owner's or Capital's property
rights under Article VI.B.
V. COMPENSATION
A. OPERATIONS MANAGEMENT FEES. Owner shall pay to Capital a fee in the
amount set forth below, payable by the fifteenth day of each month.
Payment shall commence on the date of the first resident move-in.
1. The amount to be paid monthly shall be 5% of Gross Revenues
generated during the immediately proceeding month provided that
the monthly management fee shall not be less than Five Thousand
Dollars ($5,000.00) ("Monthly Management Fee"). "Gross Revenues"
shall be as defined in Section V.B. The Monthly Management Fee
for the Facility shall be payable monthly in arrears following
calculations thereof upon submission of a monthly statement for
such Facility from Capital. It is agreed between Owner and
Capital that if the Gross Revenues of the Facility are
insufficient to pay all disbursements, including the Monthly
Management Fee or any portion thereof, then Owner shall remain
responsible for such disbursements. It is further agreed between
Owner and Capital that in no event will any disbursement be made
to Owner from any Facility Account until all accrued
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and unpaid fees to Capital and repayments, if any, to Capital for
Capital's advancement of funds to cover any insufficiencies in
such Facility's Rental or Payroll Account have been paid in full.
2. In addition to the Monthly Management Fee stated above, Owner
shall also pay Capital a marketing lease-up fee of $500.00 for
each unit leased at the time the unit is initially occupied.
B. INCENTIVE MANAGEMENT FEE. In addition to the Monthly Management Fee
stated above, as additional compensation for the services to be
rendered by Capital during the Term, Capital shall be paid a fee (the
"Incentive Management Fee") based upon performance standards which
shall be mutually agreed upon by Owner and Capital. Unless otherwise
mutually agreed upon by Owner and Capital, the Incentive Management
Fee shall equal 25% of the amount, if any, by which Net Cash Flow for
any annual or shorter period during the Term ending December 31 of any
year or for the last period in the Term ending on the last day of the
Term exceeds the agreed upon performance standards.
For purposes of this Section V.B., "Net Cash Flow" shall mean, for any
period for which such sum is being computed, the excess of (a) Gross
Revenues for the Facility during such period over (b) Operating
Expenses for the Facility during such period. "Gross Revenues" shall
mean and refer, for any period for which such Gross Revenues are being
determined, the sum of the total gross revenues of the Facility from
operations received during such period, including all receipts from
(i) rent of units at the Facility, (ii) rent or business interruption
insurance, if any, (iii) revenue of the Facility for or on account of
any and all goods provided and services rendered or activities during
such period, (iv) reimbursements of expenses paid by the Facility
which are to be borne by others, (v) deposits in the event of
forfeiture thereof to the Facility and (vi) other revenues and
receipts realized by the Facility from operations and customarily
included in Net Cash Flow; Gross Revenues shall not include (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) proceeds from the
sale or dispositions of all or any part of such Facility; (iii)
insurance proceeds received by Owner as a result of any insured loss
(except proceeds for rent loss insurance) and proceeds from any
condemnation action; (iv) capital contributions made by any partner of
Owner; (v) loans by Owner or its partners; (vi) proceeds from capital,
financing and any other transactions not in the ordinary course of
operation of such Facility and (vii) advance rentals paid (until such
time as they are earned). "Operating Expenses" shall mean, for any
period for which such Operating Expenses are being determined, the sum
of the total gross expenditures
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of the Facility for operations during such period, including (A) all
cash operating expenses (including the Monthly Management Fee, any
Incentive Management Fee, all commissions and other fees, expenses and
allowances paid to Capital), (B) any other expenditures of the
Facility which are not treated as capital expenditures under generally
accepted accounting practices, and (C) real estate taxes, personal
property taxes and sales taxes; provided however, that Operating
Expenses shall not include any payments or expenditures to the extent
the sources or funds used for such payments or expenditures are not
included in Gross Revenues.
C. CERTAIN EXPENSES. In accordance with the Annual Budgets, the Facility
will reimburse Capital for the cost of reasonable transportation,
lodging and meal expenses for non-Facility-based employees of Capital
or its outside consultants when traveling in connection with the
performance of the services being performed pursuant to this
Agreement, together with any reasonable long distance telephone
expenses, copying, mailing or express shipments and other
miscellaneous out of pocket expenses that relate to the marketing and
management of the Facility. Relocation, education, professional
memberships and licensing expenses of the Facility-based
administrative employees shall also be an expense of the Facility
subject to Owner's prior approval.
VI. MISCELLANEOUS
A. INSURANCE-SUBROGATION. No indemnity shall be paid to the other party
under this Agreement where the claim, damage, liability, loss or
expense incurred was required to be insured against by such other
party. Any insurance policies obtained by the parties pursuant to this
Agreement shall contain provisions or have the effect of waiving any
right of subrogation by the insurer of one party against the other
party or its insurer.
B. PROPERTY OF CAPITAL. Trade names, including the name "The Waterford,"
architectural and design concepts and plans, ideas and documents,
forms, occupancy development material, specifically for and related to
Owner and/or its Facility shall be the exclusive property of Owner.
Trade names, ideas and documents, forms and occupancy development
material, not directly related to the Facility and supplied by Capital
are to be considered proprietary and will remain the property of
Capital. Either party may only use such materials which are the
property of the other and information in the operation and management
of the Facility, and may not use such materials or information after
termination of this Agreement for the development or expansion of the
Facility or for new projects for itself or others without the written
consent of the party owning such material or information.
C. STATUS OF PARTIES. It is expressly understood and agreed that Capital
shall act as an independent contractor in the performance of this
Agreement. No provision hereof
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shall be deemed or construed to create a partnership or a joint
venture between Owner with respect to the Facility or otherwise.
D. ADDITIONAL ACTION. In order to carry out the intent and spirit of this
Agreement, Owner and Capital will do all acts and things necessary
including the execution of other agreements.
E. ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement
between Capital and Owner. Any change or modification of this
Agreement must be in writing and signed by all parties hereto.
F. BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, their successors and assigns.
G. ASSIGNMENT, ETC. Except for an assignment by Capital to an affiliate,
Capital shall not, without Owner's prior written approval (which
approval shall not be unreasonably withheld), assign any of its rights
or obligations under this Agreement.
H. GOVERNING LAW. This Agreement, its interpretation, validity and
performance shall be governed by the laws of the State of Texas.
I. NON-COMPETE. Without the prior written consent of Capital, for a
period of three years following termination of this Agreement, Owner
will not employ or engage any person who was a Capital employee
assigned to the administrative staff of the Facility at any time
during the last twelve (12) months of the term of this Agreement. This
section shall not apply to Owner upon sale of the Facility or
termination of the Agreement by Owner for cause and shall not apply to
any lender of Owner which takes over control of the Facility.
J. CONDITIONS BEYOND CONTROL OF PARTIES. Neither party shall be held
liable for failure to comply with any of the terms of this Agreement
when such failure has been caused solely by fire, labor dispute,
strike, war, insurrection, government restrictions, force majeure, or
act of God beyond the control and without fault on the part of the
party involved, provided such party uses due diligence to remedy such
default. Circumstances are likely to arise from time to time which may
require that budgets be exceeded, and Capital shall not be liable for
budget overruns.
K. INDEMNIFICATION. Owner will indemnify and hold harmless Capital from
any and all liability arising incident to Owner's performance of its
duties under this Agreement. Capital will indemnify and hold harmless
Owner from any and all liabilities arising incident to Capital's
performance of its duties under this Agreement.
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Owner shall also indemnify and hold Capital harmless against any and
all losses, costs or expenses incurred by Capital by reason of,
arising out of or in any way related to noncompliance by the Facility
with all applicable state, federal and local laws, ordinances, rules
and regulations relating to the physical condition of the property of
the Facility, provided Capital shall promptly notify Owner of
Capital's knowledge of any such noncompliance.
L. ARBITRATION. In the event of any dispute, claim or controversy of any
kind between the parties, concerning this Agreement or the termination
of this Agreement, the matter shall be submitted to arbitration in
accordance with rules of the American Arbitration Association. The
parties jointly shall agree on an arbitrator. If the parties are
unable to agree, in good faith within a reasonable time, on the
selection of an arbitrator, either party may request appointment of an
arbitrator chosen by the American Arbitration Association who shall be
the Selected Arbitrator. Such arbitrator shall be limited in his
decision to a choice between the final position as requested by each
party. Said arbitration shall be held in Dallas/Ft. Worth, Texas or
such other place as is mutually agreeable. The arbitration decision
shall be final and binding on both parties unless the arbitration is
fraudulent or so grossly erroneous as to necessarily imply bad faith.
Costs of arbitration are to be shared by both parties equally,
provided that the arbitrator may choose to award the costs of
arbitration against the losing party if the arbitrator determined that
the final position urged by the losing party was not reasonable.
M. CONTROL OVER OTHER AGREEMENT. In the event that any of the terms or
conditions set forth herein are inconsistent with or contrary to any
of the terms and conditions set forth in the Development and Turnkey
Services Agreement dated September 16, 1997 between Owner and Capital
Senior Living Corporation, then the terms and conditions set forth
herein shall control.
TRI POINT COMMUNITIES, L.P. CAPITAL SENIOR LIVING, INC.
By: Capital Retirement Group, Inc.
Its General Partner
By: /s/ XXXXX. X. XXXXXXXX By: /s/ XXXXX X. XXXXXXXX
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Name: Xxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Vice President Title: Vice President
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