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Exhibit 10.22
MANAGEMENT AGREEMENT
THIS AGREEMENT entered into this 1st day of April, 1996, by and
between XXXXXXX RETIREMENT SERVICES, INC., ("Xxxxxxx") a not-for-profit
corporation organized under the laws of the state of Texas, and CAPITAL SENIOR
MANAGEMENT 1, INC. ("Capital"), a for-profit corporation organized under the
laws of the state of Texas.
PREAMBLE
Xxxxxxx by this Agreement is engaging Capital to provide management
services relating to the operation of Xxxxxxx Westminster Place (the
"Facility"), a retirement community located in Longview, Texas. Capital has
management expertise and resources designed to assist in the development and
maintenance of quality service to residents of retirement communities on a
financially sound basis. Capital and Xxxxxxx share a commitment to make the
retirement years of residents as meaningful and comfortable as possible. Both
share the philosophy that the retirement environment should allow for and
encourage contained personal growth and independent living for the elderly, and
when independent living is no longer possible, then the same retirement
environment should have the flexibility to provide quality health care in the
midst of a high degree of understanding, compassion and companionship enhanced
by and based upon the prior years of residence in the same community.
This Agreement is founded on the following assumptions:
Xxxxxxx 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 Xxxxxxx.
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c) Annually review and approve the budget.
d) Annually review the policies and goals which have been
established.
e) Provide Christian social service ministry from the Facility
that is resident and community-based.
Capital assumes primary responsibility to:
a) Implement the policies established by Xxxxxxx.
b) Supervise the day-to-day management of the Facility,
including all resident activities.
c) Provide to Xxxxxxx full, timely and accurate information
as to past operations.
d) Provide to Xxxxxxx projections and recommendations relating
to the future operations of the Facility.
The parties therefore agree as follows:
I. RESPONSIBILITIES OF CAPITAL
A. Recommend Policies. Capital shall recommend policies and
goals to be established by Xxxxxxx, 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 and policies, established
by Xxxxxxx.
C. Marketing Duties. Capital shall manage and supervise the
marketing program. Capital shall periodically review the
residence agreement and recommend changes thereof as and if
required.
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D. Employees. All Facility-based Employees, including the
administrative employees, shall be employees of Capital with
the exception of Xxxxxxx ministry-based employees. 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
occurring pursuant to Capital's employee policy manual. 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 treated as an expense of
Capital to be reimbursed from the Facility operations if
sufficient to reimburse such expenses; if it is not
sufficient, such expenses shall be reimbursed by Xxxxxxx.
E. Operating Procedures. Capital shall develop, install and
maintain operating procedures, systems, and controls.
F. Facility Expansion. Capital shall make recommendations
regarding construction, remodeling or expansion of the
Facility.
G. Budgets. Capital shall prepare 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. It is to be understood that budgets are
only estimates and guidelines of future results and that
budget overruns may occur from time to time.
H. Financial Controls. Capital shall establish and maintain a
system of financial controls for the Facility.
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I. Monthly Financial Statements. Capital shall provide to
Xxxxxxx, on a monthly basis, financial statements and related
financial reports.
J. Marketing Reports. Capital shall, on a weekly and monthly
basis, provide sales and occupancy reports to Xxxxxxx, as well
as the results of the annual resident satisfaction survey.
K. Legal Counsel. Capital, at Facility expense, shall coordinate
with Xxxxxxx 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 Xxxxxxx,
deposit all such funds in a residential depository account at
a FDIC insured bank approved by Xxxxxxx. The style of the
account shall be in the name of the facility with designated
representatives from Xxxxxxx 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 Xxxxxxx. The style of the
account shall be in the name of the facility with designated
representatives from Xxxxxxx and Capital being the only
parties authorized to draw from said account. Capital shall
pay out of such Operating Expense Account all operating
expenses (including Capital's Management Fee and any other
sums due to Capital from Xxxxxxx), 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 Xxxxxxx may direct. These funds shall not be
co-mingled with funds from any other projects and/or
facilities managed and/or operated by Capital.
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M. Accounting Systems and Software. Capital shall provide to
Xxxxxxx, 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,
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 be the responsibility of
the Facility.
II. XXXXXXX'X RESPONSIBILITIES
A. Policies. Xxxxxxx shall establish the policies for the
Facility.
B. Goals. Xxxxxxx shall establish the short range and long range
goals of the Facility.
C. Budgets. Xxxxxxx shall review and approve budgets for the
operation of the Facility.
D. Capital's Performance. Xxxxxxx shall review and evaluate the
performance of Capital in carrying out the policies for the
Facility.
E. Legal Counsel. Xxxxxxx shall obtain legal counsel to perform
all necessary legal services relating to Xxxxxxx'x ownership
of the Facility.
F. Audits. Xxxxxxx, 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 Xxxxxxx'x
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representatives. All labor and expense associated with such
review shall be borne by Xxxxxxx.
G. Directives. In order to assure proper coordination, Xxxxxxx
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, Xxxxxxx
shall, within fourteen (14) days of issuance, furnish to
Capital copies of any and all Facility-related reports,
including the annual audit (if any) as well as copies of the
minutes of all local advisory Board meetings, other than items
relating to the performance of Capital.
I. Advisory Board Meetings. During the term of this Agreement, a
representative of Capital shall be a member of the local
advisory board and attend any regular or special meeting of
the local advisory Board other than any part thereof involving
evaluation of the performance of Capital under this Agreement.
Xxxxxxx shall give Capital the same notice of local advisory
Board meetings as is required to be given to Board members.
J. Change of Residency Agreement. Xxxxxxx 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.
K. Decisions. Xxxxxxx shall examine documents submitted by
Capital and render decisions pertaining thereto promptly to
avoid unreasonable delay.
L. Uniform Accounts. Facility shall use the uniform chart of
accounts recommended by Capital.
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M. Furnishing Information. Xxxxxxx agrees at its expense to
install and maintain a computer terminal compatible with the
mainframe computer currently in use by Capital and to transmit
data to the Capital mainframe computer via telephone lines.
N. Right of First Refusal.
1. Xxxxxxx hereby grants to Capital a right of first
refusal in the event that Xxxxxxx decides to sell the
Facility during the initial term of this Agreement.
Xxxxxxx shall furnish Capital with a written copy of
the terms and conditions of the proposed sale, which
terms and conditions shall be certified by Xxxxxxx as
bona fide, and Capital shall have thirty (30) days
from the date of receipt of such written copy within
which to notify Xxxxxxx whether Capital desires to
exercise its rights of first refusal to purchase the
Facility on the same terms and conditions. If
Capital fails to notify Xxxxxxx of its desire to
exercise its right of first refusal within such
thirty (30) day period, Capital shall be deemed to
have not exercised its right of first refusal
hereunder.
2. If Capital exercises its right of first refusal,
Capital shall have an additional sixty (60) days
following expiration of the thirty (30) day notice
period within which to obtain financing to purchase
the Facility. Capital shall notify Xxxxxxx whether
it has obtained financing to purchase the Facility
within such sixty (60) day period. If Capital fails
to notify Xxxxxxx of its having obtained financing
within such sixty (60) day period, Capital shall be
deemed not to have obtained the requisite financing.
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3. If Capital gives timely notice of the exercise of its
right of first refusal and having obtained the
requisite financing to purchase the Facility, the
closing on the sale to Capital shall take place
within thirty (30) days after the expiration of the
sixty (60) day period on materially the same terms
and conditions as set forth in the bona fide offer;
provided, however, that Capital shall furnish Xxxxxxx
with a non-refundable deposit equal to five percent
(5%) of the purchase price, to be credited with
interest earned thereon against the purchase price at
the closing in order to extend the closing for such
thirty (30) day period.
4. If Capital fails to give timely notice of the
exercise of its right of first refusal or having
obtained the requisite financing to purchase the
Facility, Xxxxxxx shall be free to close on the sale
to the proposed purchaser, with the closing to take
place within one hundred eighty (180) days after the
failure of Capital to give timely notice, but only on
materially the same terms and conditions as set forth
in the bona fide offer. If such closing to the
proposed purchaser does not occur within such one
hundred eighty (180) day period or if the terms and
conditions of the proposed sale are not materially
the same as set forth in the bona fide offer, the
Facility may not be sold without Capital once again
being offered the right to exercise its right of
first refusal hereunder.
5. Any sale, Sub-lease, or assignment with respect to
the Facility, other than to Capital, shall be
expressly subject to the terms and provisions of this
Agreement and shall not relieve Xxxxxxx of its
liability or obligations
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hereunder, and Xxxxxxx shall cause any purchaser,
assignee, or sub-lessee to deliver to Capital written
acknowledgment of its agreement to perform hereunder
including the payment of the management fee described
herein. Xxxxxxx may at any time, without the consent
of Capital, subject its interest in the Facility or
any part thereof to the lien of one or more deeds of
trust, mortgages, or other security instruments, so
long as the mortgage and/or successor in interest
confirms its consent to be bound by the terms of this
Agreement within ten (10) days following Capital's
demand therefor; provided, however, that so long as
Xxxxxxx has no right to terminate this Agreement
because of the default of Capital hereunder; in the
event of any foreclosure or other proceeding under
any such deed or trust, mortgage, or other security
instruments to enforce the lien or security interest
thereby created, this Agreement shall continue in
full force and effect notwithstanding such
foreclosure or other proceedings.
III. INSURANCE.
A. Capital shall maintain, in full force and effect, at the
Facility's expense, the following insurance protecting Xxxxxxx
and Capital and their officers and employees:
1. Employee's fidelity insurance
2. Worker's compensation and employers liability
insurance
3. Professional liability insurance
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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 Xxxxxxx and in kind and amounts
satisfactory to Xxxxxxx. Certificates of insurance
showing compliance with the foregoing requirements
shall be furnished by Capital to Xxxxxxx.
Certificates shall state that the policy or policies
will not be canceled or altered without at least 30
days prior written notice to Xxxxxxx.
X. Xxxxxxx shall procure and maintain, in full force and effect,
at Xxxxxxx'x expense the following insurance protecting
Xxxxxxx 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 Xxxxxxx
or Capital 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 Xxxxxxx to Capital. Certificates shall
state that the policy or
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policies will not be canceled or altered without at least 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 and
continue for a period of five (5) years, except that either
party may terminate this Agreement after the Fixed Term (as
hereinafter defined) by giving ninety (90) days written notice
to the other party. The Fixed Term shall be thirty-six (36)
months, except that if tax exempt financing is not utilized or
if the U.S. Treasury Department liberalizes its current
published advance ruling guidelines (Rev. Proc. 82-14, 1982-1
C.B. 459) to extend the period in which a management contract
may be non-terminable without adversely affecting the
tax-exempt status of bonds issued to finance the Facility to
which the management contract relates, and if, in the opinion
of bond counsel, such Treasury action applies to the bonds
issued to finance the Facility, then the Fixed Term shall be
the maximum period allowed for advance ruling purposes, but
not more than five (5) years. If Xxxxxxx terminates the
Agreement prior to the expiration of the Fixed Term or if
Capital terminates this Agreement during the Fixed 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
Fixed 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.
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B. Termination for Cause.
1. This Agreement may be terminated by Xxxxxxx 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
Xxxxxxx and such failure is the result of
Capital's willful misconduct, gross
negligence, or unlawful act.
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) In the event of a change of controlling
ownership interest in Capital or Capital
Senior Living, Inc. Controlling Ownership
shall be defined as a change of greater than
50% from the present 100% ownership of Xxxxx
X. Xxxxxx and Xxxxxxx X. Xxxx and affiliates
of which they control.
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2. This Agreement may be terminated 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 Xxxxxxx; provided, however,
that this Agreement shall not be so terminated if
Xxxxxxx pays Capital all such expenses and
compensation then due and payable on or before the
expiration of said sixty-day period.
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.
C. Covenants Surviving Termination. The termination of this
Agreement shall not terminate the right of Capital to
indemnification relating to events occurring during the term
of this Agreement under Article VI.L., and to protection of
its property rights under Article VI.B.
V. COMPENSATION
A. Operations Management and Marketing Lease-up Fees. Xxxxxxx
shall pay to Capital a fee in the amount set forth below,
payable on the fifteenth day of each month commencing with the
second month this Agreement is executed and ending on the last
day of the month after which this Agreement is terminated:
1. The amount to be paid monthly shall be the greater of
$5,000.00 per month or 5% of Gross Revenues generated
during the immediately proceeding month. "Gross
Revenues" shall be defined as gross monthly revenues
from
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the operation of the Facility. 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 accrued thereon for the
benefit of the residents until such deposits or
interest are applied for rental payments; (ii)
proceeds from the sale of depositions of all or any
part of such Facility; (iii) insurance proceeds
received by Xxxxxxx as a result of any insured loss
(except proceeds for rent loss insurance); (iv)
capital contributions made by any partner of Xxxxxxx;
(v) loans by Xxxxxxx; and (vi) proceeds from capital,
financing and any other transactions not in the
ordinary course of operation of such Facility. 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
Xxxxxxx 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 Xxxxxxx shall remain responsible for
such disbursements. It is further agreed between
Xxxxxxx and Capital that in no event will any
disbursement be made to Xxxxxxx from any Facility
Account until all accrued 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. A marketing lease-up fee of $500.00 shall be paid for
each apartment unit and patio home at the time the
unit is initially occupied. This fee will be
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applicable for only those units not leased as of the
date of the execution of this Agreement.
3. Xxxxxxx and Capital shall prepare a net income
projection for the start up period beginning April 1,
1996 and ending June 30, 1997 ("First Projection
Term"), in form similar to Exhibit A. Said
projection shall be approved by both parties in
writing. This projection shall not include any debt
service obligations or capital expenditure
obligations of the Facility. If, at the end of the
First Projection Term, Capital either exceeds
projected net positive income for the First
Projection Term or falls below the projected net
loss, Capital shall be entitled to receive 25% of
either the savings below the projected net loss or
the profits above the projected net positive income,
but not to exceed the amount paid under item 1 of
section V.A. for the First Projection Term. After
the First Projection Term ending June 30, 1997,
Xxxxxxx and Capital shall prepare a net income
projection for the next six (6) month period ending
December 31, 1997 ("Second Projection Term"). If, at
the end of the Second Projection Term Capital exceeds
the projected income, or falls below the projected
net loss for the said period, Capital shall be
entitled to retain 25% of either the savings below
the net loss or the amount of profit above the
projected net gain, but not to exceed the amount paid
under item 1 of section V.A. for the Second
Projection Term. Each year, subsequent to the Second
Projection Term, Xxxxxxx and Capital shall prepare,
on an annual basis, a net income projection beginning
January 1 of each year and ending December 31 of that
same year. If at the end of
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each year, Capital exceeds the projected annual
income number as of that year, or falls below the
projected loss for the year, Capital shall be
entitled to retain 25% of either the savings below
the net loss or the amount of profit above the
projected net gain, but not to exceed the amount paid
under item 1 of section V.A. for each subsequent
projection term.
B. 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.
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 or was not required to
be insured against. 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 "Xxxxxxx
Westminster Place," ideas and documents, forms, occupancy
development material, specifically
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for and related to Xxxxxxx Westminster Place shall be the
property of Xxxxxxx. 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. Xxxxxxx
may use such materials which are the property of Capital and
information in the operation and management of the Facility,
as may be recommended by Capital, but 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
Capital.
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 shall be
deemed or construed to create a partnership or a joint venture
between Xxxxxxx and Capital with respect to the Facility or
otherwise.
D. Additional Action. In order to carry out the intent and
spirit of this Agreement, Xxxxxxx 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 Xxxxxxx. 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.
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G. Assignment, etc. Capital shall not, without Xxxxxxx'x 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. No Personal Liability. This Agreement has been executed on
behalf of Xxxxxxx and Capital by their respective officers
solely in their representative capacities, and no officer,
director, agent, employee or attorney of Xxxxxxx or Capital
shall have any personal liability hereunder to any person.
J. Hiring Capital Employees. Without the prior written consent
of Capital, for a period of three years following termination
of this Agreement, Xxxxxxx 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.
K. 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.
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L. Indemnification. Xxxxxxx will indemnify and hold harmless
Capital from any and all liability arising incident to
Xxxxxxx'x performance of its duties under this Agreement.
Capital will indemnify and hold harmless Xxxxxxx from any and
all liabilities arising incident to Capital's performance of
its duties under this Agreement.
Xxxxxxx 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 Xxxxxxx of
Capital's knowledge of any such noncompliance.
M. 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, except that the
selection of the Arbitrator shall be done Selected Arbitrator.
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/Fort Worth, Texas, or such
other place as is mutually agreeable. The arbitration
decision shall
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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.
XXXXXXX RETIREMENT SERVICES, INC. CAPITAL SENIOR MANAGEMENT 1, INC.
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxx Xxxxxxxxxxx
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(title) President/CEO (title) President
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AMENDMENT TO MANAGEMENT AGREEMENT
THIS AMENDMENT is incorporated into and made a part of the Management
Agreement dated April 1, 1996 ("the Agreement") between XXXXXXX RETIREMENT
SERVICES, INC. ("Xxxxxxx"), a not-for-profit corporation organized under the
laws of the State of Texas, and CAPITAL SENIOR MANAGEMENT 1, INC. ("Capital"),
a for-profit corporation organized under the laws of the State of TEXAS.
Article IV, Section B, Item 1(d) of the Agreement is hereby amended by
adding the following to the end of the sentence:
. . . Notwithstanding the above, in the event that a public
offering of the stock of Capital Senior or Capital Senior
Living, Inc., the controlling ownership shall be defined as a
change of greater than an aggregate 30% ownership of Xxxxx X.
Xxxxxx and Xxxxxxx X. Xxxx and affiliates of which they
control as well as ownership of current management of Capital
Senior or Capital Senior Living, Inc.
Except as modified herein, all other terms and conditions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Amendment effective on this 16th day of April, 1996.
XXXXXXX RETIREMENT SERVICES, INC. CAPITAL SENIOR MANAGEMENT 1, INC.
By: /s/ By: /s/ Xxxxx X. Xxxxxxxx
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Name Name
Senior Vice President Vice President
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Title Title
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