AGREEMENT TO PROVIDE MANAGEMENT SERVICES
TO
AN INDEPENDENT AND ASSISTED LIVING FACILITY (XXXXXXX TOWERS
DALLAS, TX)
This Agreement to Provide Management Services to an
Independent and Assisted Living
"dated June 30, 1998 is made and entered into by and
Facility ( Agreement ) between ESC II, LP., a Washington
Limited Partnership ( Owner ) and ESC III, LP, a Washington
Limited Partnership ("Manager").
RECITALS
A. Owner is the owner of that certain real property located
at 0000 Xxxxxxx Xxx in Dallas, Texas (the "Real Property")
including the improvements on the Real Property that
constitute the 295 unit independent and assisted living
facility commonly known as "Xxxxxxx Towers" and located in
Dallas, Texas (the "Facility");
B. Owner desires to engage the services of a person or
entity to manage the Facility on Owner' s behalf and to
provide certain consulting services to Owner in connection
therewith;
C. Manager is experienced and qualified in the field of
independent and assisted living facility management;
D.
Owner has determined that Manager's fee is economical in
light of the range of services which Manager is willing to
provide to Owner; and
E. Manager is willing to operate the Facility on Owner's
behalf and provide consulting services to Owner in
connection therewith, pursuant to the terms and conditions
set forth herein.
NOW THEREFORE, in consideration of the foregoing premises
and the mutual covenants herein contained, IT IS AGREED AS
FOLLOWS:
MANAGEMENT AND CONSULTING RESPONSIBILITIES OF MANAGER.
Owner hereby engages Manager to provide, and Manager hereby
accepts such engagement and agrees to provide, management,
consulting, advisory and supervisory services to Owner in
connection with the operation of the Facility, upon the
terms and conditions set forth in this Agreement. By
entering into this Agreement, Owner does not delegate to
Manager any powers, duties, or responsibilities which Owner
is prohibited by law from delegating. Owner
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also retains such other authority as shall not have been
expressly delegated to Manager pursuant to this Agreement.
Subject to the foregoing, and commencing on the effective
date of the Certificate of Occupancy (the "Commencement
Date") Manager shall provide the following services to, or
on behalf of Owner:
l.l Operational Policies and Forms. Manager shall implement
operational policies and procedures and develop such new
policies and procedures as Manager deems necessary to insure
the establishment and maintenance of operational standards
appropriate for the nature of the Facility.
1.2 Charges. Manager shall establish the schedules of
recommended charges, including any and all special charges
for services rendered to residents at the Facility. Owner
shall have the right to review and approve the charge
schedules established by Manager.
1.3 Information. Manager shall develop any informational
material, mass media releases, and other related publicity
materials, which Manager deems necessary for the operation
of the Facility.
1.4 Regulatory Compliance. Manager, with the assistance of
Owner if requested by Manager, shall use its best efforts to
obtain and maintain all licenses, permits, qualifications,
and approvals from any applicable governmental or regulatory
authority for the operation of the Facility and to manage
the operations of the Facility in full compliance with all
applicable laws and regulations, and in accordance with all
such licenses, permits, qualifications, and approvals.
1.5 Equipment and Improvements. Manager shall advise Owner
as to equipment and improvements which are needed to
maintain or upgrade the quality of the Facility, to replace
obsolete or run-down equipment, or to correct any
deficiencies (including, without limitation, any survey
deficiencies) which may be observed or cited during the term
of this Agreement. Owner shall review and act upon Manager's
recommendations as expeditiously as possible. Manager shall
not be liable for any cost or liability which Owner may
incur in the event Owner disregards Manager's
recommendations. Manager shall, as a Facility Expense (such
term as used in this Agreement shall have the meaning
specified in Paragraph 8.2 below), make all necessary and
approved repairs, replacements and maintenance within the
budgetary limits set forth in the annual capital expenditure
budget prepared by Manager pursuant to Paragraph 1.12.
hereof and in a workmanlike and lien-free manner.
1.6 Accounting. Manager shall provide home office and
accounting support to the Facility. All accounting
procedures and systems utilized in providing said support
shall be in accordance with the operating capital and cash
programs developed by Manager, which programs shall conform
to generally accepted accounting principles and shall not
materially distort income or loss. If Owner so elects by
notice to Manager, Manager shall prepare or cause to be
prepared all tax returns required in connection with
operation of the Facility, including payroll tax returns
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(but excluding Owner's income tax returns, which Manager
shall prepare only if Owner and Manager agree upon separate
compensation to be paid to Manager for preparing such income
tax returns) and, at Owner's sole cost and expense, Manager
shall cause all local, state and federal taxes to be timely
paid or contested, as appropriate. Such taxes shall be
deemed to be Facility Expenses and shall be paid out of the
revenues of the Facility or the working capital for the
Facility provided by Owner. Nothing herein shall preclude
Manager from delegating to a third party a portion of the
accounting duties provided for in this section; provided,
that such delegation shall not relieve Manager from
Manager's ultimate liability for the timely and complete
performance of the obligations provided for herein.
1.7 Reports. Manager shall prepare and provide to the Owner
any reasonable operational information which may from time
to time be specifically requested by Owner, including any
information needed to assist Owner in completing its tax
returns and in complying with any reporting obligations
imposed by any mortgagees of the Facility. In addition: (i)
within thirty (30) days after the end of each calendar
month, Manager shall provide Owner with an unaudited balance
sheet of the Facility, dated the last day of such month, and
an unaudited statement of income and expenses for such month
relating to the operation of the Facility; and (ii) within
ninety (90) days after the end of the fiscal year of the
Facility, Manager shall provide Owner with unaudited
financial statements including a balance sheet of the
Facility, dated the last day of said fiscal year, and an
unaudited statement of income and expense for the fiscal
year then-ended relating to the operation of the Facility.
1.8 Bank Accounts. Manager shall open a new checking account
in the name of the Facility ("Facility Checking Account")
and shall deposit in the Facility Checking Account all money
received during the term of this Agreement in the course of
the operation of the Facility; provided, however, that
during the term hereof, withdrawals and payments from the
Facility Checking Account shall be ma e only on checks
signed by a person or persons authorized by Manager. Owner
shall be given notice as to the identity of said authorized
signatories. All Facility Expenses incurred in the operation
of the Facility in accordance with the terms of the budgets
submitted to Owner under Paragraph 1.12 hereof, shall be
paid by check drawn on the Facility Checking Account.
Withdrawals from the Facility Checking Account shall be made
first to pay the Base Management Fee (as that term is
defined in Subparagraph 9.2, below), and, thereafter, to pay
Facility Expenses in such order of priority as Manager deems
appropriate to the operation of the Facility. In the event
the revenues generated by the Facility are at any time
insufficient to pay all of the Facility Expenses, Owner
shall, within five (5) days of Owner's receipt of a written
demand by Manager, deposit in the Facility Checking Account
sufficient funds to satisfy the then working capital needs
ofthe Facility.
1.9 Personnel. Manager shall: (i) recruit, employ, train,
promote, direct, discipline, suspend, and discharge Facility
personnel; (ii) establish salary levels, personnel policies,
and employee benefits; and (iii) establish employee
performance standards, all as needed during the term of this
Agreement to ensure the efficient operation of all
departments within and services
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offered by the Facility. All Facility personnel shall be
employees of Manager, not Owner, and all salaries, benefits,
payroll taxes and other costs related to Facility personnel
(including, without limitation, computer training and other
employee training and education, including tuition, travel
and other expenses relating thereto if such expenses are
incurred with Owner's approval) shall not be included in the
Base Management Fee, but shall be separately reimbursed by
Owner as a Facility Expense. In addition, the costs and
expenses (including, without limitation, travel expenses) of
consultants, independent contractors or other providers of
services engaged by Manager with Owner's approval shall be
separately reimbursed as Facility Expenses.
1.10 Supplies and Equipment. Manager shall purchase, as a
Facility Expense, supplies and non-capital equipment
(including, without limitation, computer hardware and
software) needed to operate the Facility within the
budgetary limits set forth in the annual operating budget
prepared by Manager pursuant to Paragraph 1.12 hereof. In
purchasing said supplies and equipment Manager shall, if
possible, take advantage of any national or group purchasing
agreements to which Manager may be a party.
l.ll Legal Proceedings. If approved by Owner, Manager shall,
as a Facility Expense and through its legal counsel,
coordinate all legal matters and proceedings with Owner's
counsel.
,if Owner does not approve the same, Owner shall indemnify,
protect, defend and hold Manager harinless with respect to
such legal matters and proceedings.
1.12 Budgets. The Facility shall be operated on a fiscal
year of January 1 through December 31. Within forty-five
(45) days prior to the start of each fiscal year, Manager
shall prepare and submit to Owner for Owner's review and
agreement, which agreement shall not be unreasonably
withheld (i) an annual operating budget, (ii) an annual
capital expenditure budget, and (iii) an annual cash flow
projection. In the event the operating budget or the capital
expenditure budget (or both) have not been agreed upon prior
to the first day of the then-current fiscal year, beginning
in fiscal year 1998, the operating budget or capital
expenditure budget in effect for the prior fiscal year, as
appropriate, shall continue in effect until the new
operating budget or capital expenditure budget, as
appropriate, is agreed upon by Owner and Manager.
Thereafter, any expenditures made during the year pursuant
to said agreed-upon budgets and/or any expenditures on an
item-by-item basis exceeding by no more than 10"% the
amounts set forth therein for the applicable expense item
(the "Budget Threshold") may be made without Owner's prior
approval. Any unbudgeted expenditures and/or any
expenditures in excess of the Budget Threshold shall be
subject to Owner's prior approval, which approval shall not
be unreasonably withheld.
1.13 Collection of Accounts. Manager shall issue bills and
collect accounts and monies owed for goods and services
fizrnished by the Facility, including, but not limited to,
enforcing the rights of Owner and the Facility as creditor
under any contract or in connection with the rendering of
any services; provided, however, that any expenses incurred
by Manager shall not be included in the Base Management Fee,
but shall be separately reimbursed by Owner
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FINAL.DOC June 25,1998 Page 4
as a Facility Expense. Notwithstanding any other provision
of this Agreement to the contrary, Manager does not guaranty
the collectability of such accounts or monies and shall have
no liability to Owner for Manager's inability to so collect
such accounts or monies.
1.14 Construction Supervision. Owner and Manager may agree
that Manager shall act as construction supervisor with
respect to any construction work for the Facility or on the
Real Property after the Commencement Date (as defined in
Paragraph I), in which event Manager will supervise, oversee
and administer each and every aspect of any such
improvements and construction work. For the purposes of this
Agreement, "construction work" shall include any
construction, reconstruction or alteration of any
improvements constituting part of the Real Property, but
shall not include usual maintenance and repairs made to the
Facility or the Real Property. Without limitation of the
foregoing, if Owner and Manager agree that Manager shall act
as construction supervisor, and subject to Owner's approval
in each instance, Manager will: (a) negotiate contracts for
architectural, design, engineering and construction
services; (b) secure any and all necessary consents and
approvals; (c) oversee the administration of construction
contracts; and (d) act as project manager with respect to
the construction work.
1.15 Extraordinary Costs. Except as otherwise specifically
provided herein, all extraordinary costs incurred by Manager
with respect to the Facility shall be separately reimbursed
as Facility Expenses (and not included in the Base
Management Fee) after first having been approved by Owner.
2. INSURANCE.
Upon request, Manager, at Owner's sole cost and expense,
shall arrange for and maintain all necessary and proper
hazard insurance covering the Facility, the furniture,
fixtures, and equipment situated thereon, and all necessary
and proper malpractice and public liability insurance for
Owner's protection and for the protection of Owner's
officers, agents and employees. Until such a request is made
and/or in the event Manager is unable to secure insurance
coverage for the Facility for any reason whatsoever, Owner
shall be responsible for obtaining and maintaining said
insurance. In addition, Manager shall provide employee
health and worker's compensation insurance for all Manager
employees at the Facility in accordance with Manager's
policies therefor, and the costs thereof shall not be
included in the Base Management Fee, but shall be separately
reimbursed by Owner as a Facility Expense. Manager shall, at
Manager's sole cost and expense, arrange for and maintain
all necessary and proper malpractice and public liability
insurance for the protection of Manager, and Manager's
officers
,agents, and employees. Any insurance provided by Owner
pursuant to this Paragraph 2 shall comply with the
requirements of any mortgage or deed of trust encumbering
the Facility, and any insurance provided by Manager pursuant
to this Paragraph2 shall comply with such requirements
provided that Owner shall have provided Manager with a copy
of such mortgage or deed of trust.
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3. PROPRIETARY INTEREST.
The systems, methods, procedures, and controls employed by
Manager and any written materials or brochures developed by
Manager to document the same are, and shall remain, the
property of Manager and are not, at any time during or after
the term of this Agreement, to be utilized, distributed,
copied, or otherwise employed or acquired by Owner, except
as authorized by Manager.
4. TERM AND TERMINATION OF AGREEMENT.
4.1 Term. The term of this Agreement ("Term") shall commence
on the Commencement Date and expire on the fifth (Sth)
anniversary of the Commencement Date; provided, however,
that the Term shall be extended automatically for successive
two (2) year periods unless terminated prior to expiration
of the Term (as the same may have be extended) pursuant to
this Paragraph 4.
4.2 Termination. The Term (as the same may be have been
extended ) may be terminated by either Manager or Owner
(a) at any time, with cause, by giving notice of
termination not less than thirty (30) days prior to the
effective date of such termination;
(b) if fifty percent (50"%) or more of the Facility is
either (i) damaged or destroyed or (ii) taken by
condemnation proceedings or otherwise, whether or not Owner
elects to rebuild or repair the Facility, by giving notice
of termination not less than ten (10) days prior to the
effective date of such termination;
(c) immediately upon the occurrence of an Event of Default
by the other party (as defined in Paragraph 5, below), by
giving notice of termination, effective the date of receipt
(or deemed receipt) by the defaulting party of such notice
of termination.
4.3 Effect of Termination. In the event of a termination of
Term pursuant to Subparagraphs 4.2(a) or 4.2(b), above, upon
the effective date of such termination, neither party shall
have any further obligations whatsoever under this
Agreement; provided, however, that Manager shall be entitled
to receive immediate payment of all amounts theretofore
unpaid by Owner but earned by Manager as of the effective
date of such termination. In the event of a termination of
the Term pursuant to Subparagraph 4.2(c), above, except as
expressly provided in Paragraph 5.3, below, neither party
shall have any further obligation whatsoever under this
Agreement; provided, however, that Manager shall be entitled
to receive immediate payment of all amounts theretofore
unpaid by Owner but earned by Manager as of the effective
date of such termination. In the event that Owner desires
Manager to leave any equipment owned by
5
Manager at the Facility upon such termination, Owner shall
pay to Manager the fair market value of such equipment to be
left at the Facility and Manager shall transfer title
thereto to Owner upon such payment.
5. DEFAULT, REMEDIES UPON DEFAULT.
5.1 Manager's Events of Default. With respect to Manager, it
shall be an "Event of Default" under this Agreement:
(a) If Manager shall fail to keep, observe, or perform any
material agreement, term, or provision of this Agreement,
and such default shall continue for a period of thirty (30)
days after Manager' s receipt of notice of such default fiom
Owner, which notice shall specify the event or events
constituting the default; or
(b) If (i) Manager shall: (A) apply for, or consent to, the
appointment of a receiver, trustee, or liquidator of Manager
of all or a substantial part of Manager's assets, (B) file a
voluntary petition in bankruptcy, or admit in writing
Manager' s inability to pay Manager' s debts as they become
due
,(C) make a general assignment for the benefit of creditors,
or (D) file a petition or an answer seeking reorganization
or arrangement with creditors or taking advantage of any
insolvency law; or (ii) an order, judgment or decree shall
be entered by a court of competent jurisdiction, on the
application ofa creditor (A) adjudicating Manager as
bankrupt or insolvent, (B) approving a petition seeking
reorganization of Manager, or (C) appointing a receiver,
trustee, or liquidator for Manager or for all or a
substantial part of Manager's assets.
5.2 Owner's Events of Default. With respect to Owner, it
shall be an Event of
Default under this Agreement:
(a) If Owner shall fail to make or cause to be made any
payment to Manager required to be made hereunder (other than
Owner's obligation, pursuant to Paragraph 1.8, above, to
deposit working capital into the Facility Checking Account,
which circumstance shall be handled in accordance with
Subparagraph 5.2(b), below), and such failure shall continue
for a period ofthirty (30) days;
(b) If Owner shall fail to keep, observe, or perform any
material agreement, term, or provision of this Agreement and
such default shall continue for a period of thirty (3 0)
days after Owner' s receipt of notice of such default from
Manager, which notice shall specify an event or events
constituting
6
the default; provided, however, that in the case of Owner' s
failure to provide, pursuant to Paragraph 1.8, above,
necessary working capital upon demand by Manager, it shall
be deemed to be an Event of Default hereunder if the such
necessary working capital is not deposited in the Facility
Checking Account within ten ( 10) days of Manager's initial
demand therefor without any further notice from Manager
being required;
(c) If Owner shall fail to make payments, or keep any
covenants, owing to any third party which are beyond the
control of Manager to make or keep, and which would cause
Owner to lose possession of the Facility or any personal
property required to operate the Facility in the normal
course of operation; or
(d) If.. (i) Owner shall (A) be dissolved, (B) apply for or
consent to the appointment of a receiver, trustee or
liquidator for Owner or for all or a substantial part of
Owner' s assets, (C) file a voluntary petition in bankruptcy
or admit in writing its inability to pay Owner's debts as
they become due, (D) make a general assignment for the
benefit or creditors, or (E) file a petition or an answer
seeking reorganization or arrangement with creditors or
taking advantage of any insolvency law; or (ii) an order,
judgment or decree shall be entered by a court of competent
jurisdiction, on the application of a creditor (A)
adjudicating Owner as bankrupt or insolvent, (B) approving a
petition seeking reorganization of Owner, or (C) appointing
a receiver, trustee or liquidator for Owner or of all or a
substantial part of Owner's assets.
5.3 Remedies Upon Default by Owner. In the event of an Event
of Default by a party, the non-defaulting party shall have,
in addition to the right to terminate the Term pursuant to
Subparagraph 4.2(c), above, all rights and remedies
available to such non-defaulting party at law or in equity.
6. OWNER'S RIGHT TO INSPECT FACILITY/BOOKS AND RECORDS.
During the Term, Owner shall have the right, upon not less
than forty-eight (48) hours prior notice to Manager and at
reasonable times during normal business hours, to inspect
the Facility and to inspect and/or audit all books and
records pertaining to the operation thereof.
7. FACILITY OPERATIONS.
7.1 No Guarantee of Profitability. Manager does not
guarantee, and shall not be
7
construed to have guaranteed, to Owner or any third party
(including any mortgagee) that operation ofthe Facility will
be profitable, but Manager shall use Manager's commercially
reasonable, diligent, and good faith efforts to operate the
Facility in as cost-efficient and profitable a manner as
possible in light of all of the circumstances then-existing.
7.2 Standard of Performance. In performing Manager's
obligations under this Agreement, Manager shall use
Manager's commercially reasonable, diligent, and good faith
efforts, and act with professionalism, in undertaking
management ofthe Facility, all in accordance with accepted
and prevailing standards of health care in the general
location of the Facility and with the policies adopted by,
and resources available to, the Facility.
7.3 Force Majeure. Manager will not be deemed to be in
violation ofthis Management Agreement if Manager is
prevented from performing any of Manager' s obligations
hereunder for any reason beyond Manager's reasonable
control, including, without limitation: strikes, sick-outs,
or labor disputes; material or supply shortages; war,
insurrection or civil unrest; fire, earthquakes, severe
weather, flooding; acts of God; Owner's failure to perform
Owner obligations under this Agreement; or any law, statute,
regulation, ordinance, or rule of any federal, state or
local government or agency thereof, or any order, decree, or
judgment of any court with jurisdiction.
8. WITHDRAWAL OF FUNDS BY OWNER; MINIMUM BANK BALANCE.
8.1 Withdrawal by Owner. From time to time, Owner may
withdraw the thenaccumulated operating cash surplus (as
determined by Manager) from the Facility Checking Account
subject to the right of Manager to restrict withdrawal by
Owner of any Facility funds in accorda.iice with the
provisions of Paragraph 8.2, below.
8.2. Minimum Cash Balance. At all times (subject to
Manager's right, pursuant to Paragraph 1.8, above, to demand
working capital from Owner in the event of a shortfall),
Manager shall maintain a minimum cash balance in the
Facility Checking Account equal to the sum of:
(a) All costs and expenses associated with the ownership or
operation of the
Facility (each a "Facility Expense" and any two or more or
all the
"Facility Expenses"), including, without limitation, any
principal and interest payments due in connection with any
loan secured by a mortgage on the Facility, payroll,
insurance, supplies, seivices, taxes (but excluding all
federal, state, and local income taxes assessed against
Owner), and the Base Management Fee, all of which Facility
Expenses are unpaid but will become due and payable within
the ensuing forty-five (45) days; plus
8
(b) An amount deemed necessary by Manager to be adequate
for unanticipated contingencies, which amount initially
shall be $5,000 and which amount shall be adjusted as
reasonably determined by Manager.
9. MANAGEMENT FEES.
9.1 Construction Supervision Fee. For any services performed
by Manager pursuant to Paragraph 1. I 4, above, Manager
shall receive a construction supervision fee equal to ive
percent (5"%)ofthe total amount ofconstruction costs
approved by Owner, due payable concurrently with the
applicable payments to the construction contractor(s) and
materialmen.
9.2 Base Management Fee. Throughout the term ofthis
Agreement, Manager shall receive a monthly fee ("Base
Management Fee") equal to the greater of: i) six percent
(6"%) of the gross revenues generated for the prior month by
the Facility; or ii) $ 10,000, payable on or before the l
Oth day ofeach month. For purposes hereof, "gross revenues"
shall mean all revenues generated by the Facility, but shall
specifically exclude the proceeds from the sale of any
Facility equipment and any insurance and condemnation
proceeds.
9.3 Proration of Fees. If the services of Manager commence
or terminate for any reason (including, without limitation,
those set forth in Paragraph 5 hereof other than on the
first day of any calendar month, the Base Management Fee for
such partial month shall be prorated based upon the number
of days for which services are actually rendered by Manager
during such partial month.
9.4 Payment of Fees. Notwithstanding any other provision of
this Agreement to the contrary,, the Base Management Fee
shall be disbursed by Manager to itself out of the Facility
Checking Account prior to the payment of any other Facility
Expenses and prior to the repayment to Owner ofany working
capital deposits made by Owner pursuant to the terms hereof
(without limiting the generality of the foregoing, the Base
Management Fee shall be paid to Manager on a priority basis,
and Manager may disburse the Base Management Fee to itself
without regard for the minimum cash balance requirement, or
the need to demand additional working capital from Owner,
pursuant to Paragraph 8.2, above).
10. INDEMNIFICATION.
10.1 By Manager. Manager shall indemnify, defend, and hold
harmless Owner from and against any loss incurred by or
damage to Owner where such loss or damage results from the
negligent acts or omissions or the willful misconduct of
Manager in performing Manager's obligations under this
Agreement.
10.2 By Owner. Owner shall indemnify, defend and hold
harmless Manager from and against any loss incurred by or
damage to Manager where such loss or damage results from the
\\ORION\SHARE\FINpNCE\SALE\MANAGMENT AGMT - XXXXXXX TOWERS
FINAL.DOC June 25,1998 Page 10
negligent act or omissions or the willful misconduct of
Owner in performing Owner's obligations under the Agreement.
10.3 Survival of Indemnification Obligations.
Notwithstanding any other provision ofthis Agreement to the
contrary (including, without limitation, Paragraph 4.3,
above), each party's obligation to indemnify, defend and
hold harmless the other party shall survive the termination
of the Term and this Agreement with respect to the negligent
acts or omissions or willful misconduct of the indemnifying
party prior to the effective date of such termination.
11. RIGHT OF FIRST REFUSAL
In the event Owner desires to sell, convey or lease
("Transfer") the Facility prior to the expiration of the
Term, and Owner receives a bona fide offer to effect a
Transfer of the Facility from a third party capable of
performing such offer ("Transfer Offer") which Owner desires
to accept, Owner shall first give written notice of such
Transfer Offer to Manager. Such notice shall include all of
the material terms and conditions of the Transfer Offer
(e.g. , purchase price or lease rate, terms of payments,
closing date, xxxxxxx money or other deposits, documents
required for Closing, options to purchase). For a period
ofthirty (30) days after Manager's receipt ofsuch notice,
Manager shall have the right to elect to acquire the
Facility or interest therein upon the same terms and
conditions as are contained in the Transfer Offer, which
election shall be made by giving written notice thereof to
Owner within such thirty (3 0) day period. If Owner does not
timely receive Manager's written notice of Manager's
election to acquire the Facility or interest therein on the
terms and conditions of the Transfer Offer, Owner shall have
the right to accept such Transfer Offer and Transfer the
Facility to such third party in accordance with the terms of
the Transfer Offer free and clear of Manager's right of
first refusal hereunder. Notwithstanding any other provision
of this Paragraph I I, in no event shall Owner be entitled
to Transfer the Facility to any third party on terms or
conditions materially different fiom those set out in the
notice of Transfer Offer provided by Owner to Manager,
unless Owner has given Manager written notice of such
materially different terms and conditions and provided
Manager an additional thirty (30) days in which to elect to
effect a Transfer on such materially different terms and
conditions.
12. MISCELLANEOUS
12.1 Notices. All notices required or permitted pursuant to
this Agreement: (a) shall be given in writing; and (b)
delivered by (i) hand delivery, (ii) registered or certified
mail, postage prepaid, (iii) nationally recognized courier
guaranteeing next-business day delivery), or (iv) facsimile
transmission (with receipt confrmed telephonically by the
recipient). Notice shall be delivered or mailed to the
parties at the following addresses or at such other places
as either parly shall designate by giving notice in
accordance with this Paragraph 12. I.
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To Manager: ESC III, LP
0000 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx, XX 0000 I
Phone: 206-30 I -4495 Fax: 000-000-0000 Attn: Xxxx Xxxxxx
To Owner: ESC II, LP
0000 Xxxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx, XX 00000
Phone: 000-000-0000 Fax: 000-000-0000 Attn: Xxxxx Xxxxx
12.2 Assignment. Except as otherwise provided in Paragraph
1.6, above, this Agreement shall not be assigned by either
party without the prior written consent of the nonassigning
party, which consent shall not be unreasonably withheld,
conditioned, delayed.
12.3 Relationship ofthe Parties. The relationship ofthe
parties shall be that of Owner and independent contractor
and all acts performed by Manager during the term hereof as
Manager ofthe Facility shall be deemed to be performed by
Manager in Manager's capacity as an independent contractor.
Nothing contained in this Agreement is intended to, or shall
be construed to, give rise to or create a partnership
orjoint venture or lease between Owner, and Owner's
successors and assigns on the one hand, and Manager, and
Manager's successors and assigns on the other hand.
12.4 Entire Agreement. This Agreement contains the entire
agreement between the parties and shall be binding upon and
inure to the benefit oftheir successors and, to the extent
permitted hereby, their assigns, and shall be construed in
accordance with the laws of the State of Washington. This
Agreement may not be modified or amended except by written
instrument signed by both ofthe parties hereto.
12.5 Headings/Captions. The headings and captions used in
this Agreement are for convenience of reference only and
shall not be construed in any manner to limit or modify any
of the provisions hereof.
12.6 Attorneys' Fees. In the event either party brings an
action to enforce or interpret this Agreement, the
prevailing party in such action shall be entitled to recover
fiom the other party all costs incurred in connection
therewith, including reasonable attorneys' fees incurred in
the preparation, conduct, and/or settlement thereof.
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12.7 Severability. In the event one or more of the
provisions contained in this Agreement is deemed to be
invalid, illegal, or unenforceable in any respect under
applicable law, the validity, legality, and enforceability
of the remaining provisions hereof shall not in any way be
impaired thereby.
12.8 Cumulative; No Waiver. No right or remedy herein
conferred upon or reserved to either party is intended to be
exclusive of any other right or remedy, and each and every
right and remedy shall be cumulative and in addition to any
other right or remedy given hereunder, or now or hereafter
legally existing upon the occurrence of an Event of Default.
The failure of either party to insist at any time upon the
strict observance or performance of any of the provisions of
this Agreement or to exercise any right or remedy as
provided in this Agreement shall not impair any such right
or remedy or be construed as a waiver or relinquishment
thereof with respect to subsequent Event of Default. Each
and every right and remedy given by this Agreement to a
party may be exercised from time to time and as often as may
be deemed expedient by such party.
12.9 Authorization for Agreement. The execution and
performance ofthis Agreement by Owner and Manager have been
duly authorized by all necessary laws, resolutions or
corporate action, and this Agreement constitutes the valid,
binding and enforceable obligations of Owner and Manager,
respectively, in accordance with its terms.
12.10 Counterparts. This Agreement may be executed in any
number ofcounterparts, each of which shall be an original
but collectively shall constitute but one and the same
Agreement.
IN WITNESS WHEREOF, the parties have hereto caused this
Agreement to be duly executed, as ofthe day and year first
above written.
Owner: ESC II, LP
a Washington limited partnership
By: Columbia Pacific Growth Fund '98 Limited Partnership, a
Washington limited partnership, its general partner
By: B.F. Limited Partnership, a Washington limited
partnership, its general partner
Xxxxxx X. Xxxx;
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By: Columbia Pacific Group, Inc., a Washington
Manager:
ESC III, LP,
a Washington limited partnership
By:
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