EX 10.79.9
DEVELOPMENT SERVICES AGREEMENT
(Lubbock, Texas)
This Development Services Agreement (Lubbock,
Texas) ("Agreement") is made and entered into as of the
9th day of January, 1998, by and between LUBBOCK GROUP,
LTD., a Texas limited partnership (hereinafter referred
to as "Owner") and SOUTH BAY PARTNERS, INC., a Texas
corporation ("South Bay").
A. Owner has an interest in acquiring real
property in or around the City of Lubbock, Texas
(hereinafter referred to as the "Property"), to
construct thereon an Alzheimer's special care facility
("ALZ") to provide room, board, and personal care
services primary to the elderly afflicted with
Alzheimer's disease;
B. Owner wishes to employ the services of South
Bay for the furnishing of services to and for the
benefit of Owner in connection with the development of
the Property; and
C. The parties hereto desire to enter into this
Agreement to evidence the respective rights and
obligations of the parties with respect to the
acquisition and development of the Property by the
Owner.
NOW, THEREFORE, for and in consideration of the
premises, the mutual covenants and agreements contained
herein and Ten and No/100 Dollars ($10.00) and other
good and valuable consideration received by each of the
parties hereto, Owner and South Bay hereby agree as
follows:
1. COMMENCEMENT DATE AND TERM. This Agreement
shall become effective on the date hereof and shall
continue until the ALZ has been constructed upon the
Property, and the Owner accepts the completion of the
final "punch list" required to be performed by the
general contractor employed to construct the ALZ
subject to the right of Owner to terminate this
Agreement as provided herein.
2. APPOINTMENT AND ACCEPTANCE. Owner hereby
appoints South Bay to act as an agent for Owner with
respect to the services to be rendered hereunder, and
South Bay hereby accepts such appointment subject to
the terms and conditions herein set forth.
3. ADMINISTRATIVE AND MANAGEMENT SERVICES. South
Bay shall provide for Owner all services with respect
to the Property as set forth herein and such additional
duties and responsibilities as are reasonable within
the general scope of such services and
responsibilities. South Bays services shall be
performed on behalf of Owner and shall consist of the
duties -set forth below. Subject to the provisions of
paragraph 4 hereof South Bay is authorized to and shall
perform the following:
(a) Negotiate in the name of and on behalf
of Owner, and submit to Owner for its approval
and execution, (i) an agreement for the
acquisition of the Property and (ii) a
construction contract with a general contractor
to construct and place an ALZ into operation upon
the Property.
(b) Negotiate in the name of and on behalf
of, Owner an agreement with an Architect
acceptable to Owner, to provide all architectural
services in connection with the design, planning,
and construction of the ALZ upon the Property,
which agreement shall also include services to be
performed by other professional consultants
engaged and supervised by the Architect, to-wit:
(1) civil engineering, (2) structural
engineering, (3) food service design, (4)
mechanical, electrical, and plumbing engineering,
(5)
geotechnical services, (6) environmental testing,
and such other consultants as South Bay and/or
the Architect shall deem necessary or required,
and Owner shall approve, in connection with the
design, planning, and construction of the ALZ on
the Property. Owner agrees to pay to Architect,
monthly as invoiced by South Bay, for a11 fees
and costs charged and approved by Owner for the
services to be performed by the Architect and the
other consultants engaged by the Architect, which
amounts shall not be credited to and applied
toward the Fee, as that term is hereinafter
defined. Site plans, design drawings, and
construction drawings and specifications prepared
by or under the supervision of the Architect
shall be subject to Owner's written approval.
Owner shall look solely to the Architect for the
content of the services performed by the
Architect and the consultants engaged and/or
supervised by the Architect.
(c) Assist Owner in the preparation of a
budget for the acquisition and development of the
Property for the period from the date of this
Agreement to the date of issuance of a
certificate of occupancy by the applicable
authority of the municipality in which the
Property is situated and periodically (not less
often than monthly) update the budget.
(d) Provide review of construction in
progress to assure conformance with site plan and
construction drawings and specifications and
adherence to budget and construction schedules.
(e) Preparation and compilation of the
general draw, including review of each draw
request from the general contractor and other
parties that contracted directly with Owner to
perform services and/or supply materials to the
project and give Owner its comments with respect
to each such draw request.
(f) Advise Owner concerning all insurance
respecting the project, including the type and
amount of insurance coverage.
(g) Advise Owner concerning, and assist Owner
in obtaining, all licenses and permits required to
construct an ALZ upon the Property and place the
same into operation.
(h) Provide Owner with a monthly written
report of the status of the project in such detail
as Owner may reasonably request.
(i) Provide Owner with other reasonable
services in connection with the acquisition of the
Property and construction of an ALZ thereon as may
be mutually agreed to by Owner and South Bay.
(j) Negotiate and execute in the name of
Owner, for and on behalf of Owner, agreements for
geotechnical services and environmental testing
with firms (hereinafter referred to as
"Engineering Firms") acceptable to South Bay and
approved by Owner, to provide those services in
connection with the development of an ALZ upon the
Properly. Owner agrees to pay to said Engineering
Firms, monthly as invoiced by South Bay, all fees
and costs charged and approved by Owner for the
services to be performed by the Engineering Firms,
which amounts shall not be credited to and applied
toward the Fee, as that term is hereinafter
defined. Owner shall look solely to the
Engineering Firms for the content of services
performed by them.
4. LIMITATIONS AND RESTRICTIONS. Notwithstanding
any other provision of this Agreement to the contrary,
South Bay shall not bind or attempt to bind Owner or
incur any obligation on behalf of Owner. South Bay
makes no representation or warranty to Owner respecting
the total cost to acquire the Property or the cost to
construct and place into operation an ALZ upon the
Property.
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5. SOUTH BAYS FEE. In consideration for the
services to be rendered by South Bay hereunder, Owner
hereby agrees to pay South Bay a fee (the "Fee") in the
amount of One Hundred Fifty Thousand and No/100 Dollars
($150,000.00), payable as follows: on the date the
agreement to acquire the Property between Owner and the
owner of the Property is closed, Owner shall pay South
Bay the sum of $37,500.00; on the date of completion of
the improvements, Owner shall pay South Bay the sum of
$37,495.00; and, the sum of $10,715.00 each month
commencing on the fifteenth day of the first month
after commencement of construction and a like amount
due on the fifteenth day of each succeeding month until
the total Fee has been paid. Any unpaid balance of the
Fee remaining unpaid on the date a certificate of
occupancy ("CO") is issued by the municipality in which
the Property is situated shall be paid within thirty
(30) days following the date of the CO. Owner shall
reimburse South Bay for all travel expenses and costs
incurred by South Bay in the performance of its duties
hereunder, monthly upon receipt of an invoice from
South Bay for such costs and expenses. South Bay shall
not be responsible for payment of any of Owner's
acquisition, development, or operating costs,
including, without limitation, those costs incurred or
paid by South Bay by reason of the agreements entered
into and negotiated by South Bay for the benefit of
Owner.
6. DEFAULT BY OWNER.
(a) In the event of default by Owner
hereunder, South Bay shall give Owner written
notice of default and an opportunity to cure such
default as follows:
(i) With respect to a monetary default,
Owner shall have fifteen (15) days to cure;
and
(ii) With respect to a nonmonetary
default, Owner shall have thirty (30) days to
cure; provided, however, in the event any
nonmonetary default cannot reasonably be
cured within the thirty (30) day period,
Owner shall not be deemed in default
hereunder if Owner commences to cure said
nonmonetary default within said thirty (30)
day period and, thereafter, diligently causes
such default to be cured.
(b) The cure period shall commence upon
delivery of written notice of default but not
later than three (3) days after such written
notice is deposited in the United States mail,
certified mail, return receipt requested, or upon
actual receipt by the intended recipient if hand
delivered.
(c) In the event the default is not timely
cured, South Bay may:
(i) Terminate this Agreement and/or
bring suit for damages as South Bays sole and
exclusive remedies hereunder.
7. DEFAULT BY SOUTH BAY.
(a) In the event of default by South Bay
hereunder, Owner shall give South Bay written
notice of default and an opportunity to cure such
default as follows:
(i) With respect to a monetary default,
South Bay shall have fifteen (15) days to
cure; and
(ii) With respect to a nonmonetary
default, South Bay shall have thirty
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(30) days to cure; provided, however, in the
event any nonmonetary default cannot
reasonably be cured within the thirty (30)
day period, South Bay shall not be deemed in
default hereunder if South Bay commences to
cure said nonmonetary default within said
thirty (30) day period and, thereafter,
diligently causes such default to be cured.
(b) The cure period shall commence upon
delivery of written notice of default but not
later than three (3) days after such written
notice is deposited in the United States mail,
certified mail, return receipt requested, or upon
actual receipt by the intended recipient if hand
delivered.
(c) In the event the default is not
timely cured, Owner may: (i) Terminate this
Agreement and/or enforce specific performance of
this Agreement as Owner's sole and exclusive
remedies hereunder.
8. TERMINATION RIGHTS. Notwithstanding anything in
agreement to the contrary, if there is an event of
default under that certain Credit Agreement dated as of
January 7th, 1998, between Aurora Bay Investments,
L.L.C. ("Aurora Bay") and Emeritus Corporation
("Emeritus"), Emeritus may, but has no obligation to,
terminate this Agreement by giving written notice of
such termination directly to Owner and South Bay. Such
notice shall be effective upon its delivery to Owner
and South Bay. Should Emeritus exercise its termination
rights hereunder, Emeritus may thereafter designate a
new party to provide similar development services to
Owner, upon such terms and conditions as Emeritus may
stipulate. This paragraph may not be amended by Owner
and South Bay without Emeritus' prior written consent,
as long as any amounts are due and owing from Aurora
Bay to Emeritus under the Credit Agreement or any of
the Loan Documents as that term is defined in the
Credit Agreement. Upon termination hereof Owner or
Emeritus shall pay to South Bay all amounts then due
hereunder, prorated for any partial monthly fee due
under paragraph 5 hereof.
9. INDEMNITY.
(a) Owner hereby indemnifies, defends, and
holds South Bay, its partners, shareholders,
directors, officers, agents, and employees
harmless of and from all loss, liability, costs,
attorney fees, and expenses incurred, paid or
suffered by South Bay and claims asserted against
South Bay, its partners, shareholders, directors,
officers, agents, and employees in connection with
the acquisition of the Property and the
construction of improvements thereon and/or claims
arising out of the performance of South Bay's
obligations and duties hereunder (except where
arising out of the negligence or willful
misconduct of South Bay or any of its employees,
its partners, shareholders, directors, officers,
agents, or employees).
(b) South Bay hereby indemnifies, defends,
and holds Owner, its shareholders, directors,
officers, agents, and employees harmless of and
from all loss, liability, costs, attorney fees,
and expenses incurred, paid, or suffered by Owner
and claims asserted against Owner, its
shareholders, directors, agents, and employees
arising out of the negligence or willful
misconduct of South Bay or any of its employees
or agents in the performance of South Bays
obligations and duties hereunder (except where
arising out of the negligence or willful
misconduct of Owner or any of its employees, its
shareholders, directors, agents, or employees).
10. ARBITRATION.
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(a) Owner and South Bay agree to settle any
and all disputes by binding arbitration as provided
in this Section 9. In the event of any such
unresolved dispute, arbitration may be instituted
by either party hereto by giving written notice to
the other party of its intention to arbitrate the
matter(s) specified in the notice. If Owner and
South Bay cannot agree (within fifteen (15) days
from the service of such notice upon the other) as
to the selection of such arbitrator, the arbitrator
shall be designated in accordance with the Rules of
the American Arbitration Association. Arbitration
shall be conducted in accordance with the rules and
procedures of the American Arbitration Association.
The decision rendered in any arbitration proceeding
hereunder shall be binding on Owner and South Bay
and may be entered in any court having jurisdiction
thereof. In determining any matter before them,
arbitrators shall apply the provisions of this
Agreement without varying therefrom in any respect.
The arbitrators shall not have the power to add to,
modify, or change any portion of this Agreement.
(b) Owner and South Bay shall pay the fees and
expenses of its own counsel and witnesses. All
other fees and expenses of arbitration shall be
shared equally by Owner and South Bay unless the
arbitrators conclude that one party has not acted
in good faith, in which event they may assign fees
and expenses.
11. MISCELLANEOUS.
(a) All notices required or permitted
hereunder shall be given in writing by actual
delivery or by facsimile transmission, with a
concurrent copy sent by certified U. S. mail,
postage prepaid to Owner, by addressing the same
to:
Lubbock Group, Ltd.
Attention: Xxxxx Xxxxx
0000 X. X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Fax # 000-000-0000
to South Bay, by addressing the
same to:
South Bay Partners, Inc.
Attention: Xx. Xxxxx X. Xxxxxxxxx
0000 XXX Xxxxxxx
Xxxxx 000, Xxxx Xxx 00
Xxxxxx, Xxxxx 00000-0000
Fax # 000-000-0000
or to such other address or to such other person as may
be designated by notice given from time to time during
the Term hereof by one party to the other. Any notice
hereunder shall be deemed given upon delivery or not
later than three (3) business days after depositing
with the U. S. Postal Service in the manner described
above.
(b) If any term or provision of this
Agreement or the application thereof to any person
or circumstance shall, to any extent, be invalid
or unenforceable, the remainder of this Agreement,
or the application of such term or provision to
the persons or circumstances other than those as
to which it is held invalid or unenforceable,
shall not be affected thereby; and, each term and
provision of this Agreement shall be valid and be
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enforced to the fullest extent permitted by law.
(c) This Agreement contains the entire
agreement between the parties hereto with respect
to the matters herein contained, and any agreement
hereafter made shall be ineffective to effect any
change or modification, in whole or in part,
unless such agreement is in writing and signed by
the party against whom enforcement of the change
or modification is sought.
(d) Neither Owner nor South Bay may assign
all or part of this Agreement without the prior
written approval of the party. This Agreement
shall be binding upon and inure to the benefit of
Owner and South Bay, as well as to their
respective successors and assigns, where permitted
hereby.
(e) In the event of a default hereunder, if
the nondefaulting party employs an attorney to
enforce its rights hereunder, the defaulting party
shall be liable for all reasonable attorneys'
fees, court costs, and other collection expense
incurred by the nondefaulting party regardless of
whether a lawsuit is filed.
(f) Time is of the essence of this
Agreement.
(g) THIS AGREEMENT HAS BEEN MADE AND EXECUTED
IN, AND SHALL BE GOVERNED BY THE LAWS OF, THE
STATE OF TEXAS.
(h) Nothing contained herein shall be deemed
to create a joint venture, partnership, or
similar relationship between the parties.
(i) South Bay is acting hereunder as the
agent for Owner.
(j) This Agreement may be executed in any
number of counterparts, each of which shall
constitute one and the same agreement.
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EXECUTED as of the date first above written.
OWNER:
LUBBOCK GROUP, LTD., a Texas
limited
partnership
By: Aurora Bay I,
L.L.C., a Washington limited
liability company, General
Partner
By: Aurora Bay
Investments, L.L.C., Member
By: /s/ Xxxxx Xxxxx
----------------------------------
Xxxxx Xxxxx, a
Manager
SOUTH BAY PARTNERS, INC., a
Texas
corporation
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------------------
Xxxxx X. Xxxxxxxxx, President
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