EXHIBIT 10.2(b)
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (this "Agreement") is made and entered into
as of April 1, 2001, by and between CENTEX HOMES, a Nevada general partnership
("Centex Homes"), and CENTEX DEVELOPMENT COMPANY, L.P., a Delaware limited
partnership ("Manager").
RECITALS
A. Centex-Vista Properties, a division of Centex Homes, and various
constituent entities, related companies, and subsidiaries of Centex Homes (the
division and such entities, companies, and subsidiaries being individually or
collectively referred to as "Centex-Vista", as the context so requires) own
various parcels of real property in several states throughout the United States.
B. Manager was formed for the purpose of engaging in commercial and
residential real estate development and related activities.
C. Centex Homes desires to engage the services of Manager to operate,
manage, develop, and sell Centex-Vista's real estate and for certain other
purposes, and Manager desires to accept such engagement, upon the terms and
subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Centex Homes and
Manager do hereby agree as follows:
1. Term of Agreement. The initial term of this Agreement shall extend
from the date hereof to the close of business on March 31, 2002, provided that
this Agreement shall continue thereafter for successive one-year terms unless
and until terminated in accordance with Section 15 hereof.
2. Management Services. Unless Centex Homes shall instruct it
otherwise, Manager shall perform the services hereinafter described in this
Section 2 with respect to all real estate and improvements thereon now or
hereafter owned or controlled by Centex Homes (the "Properties").
(a) Development of the Properties.
(i) Enhancement of Value of the Properties. Manager
shall use reasonable efforts to protect and enhance the value
of the Properties. Such efforts shall include, but not be
limited to, efforts to obtain the release of any encumbrances
on the Properties at the expense of Centex Homes, to ensure
that all utilities are available to the Properties (including
making arrangements for the granting of all necessary
easements), to obtain favorable changes in zoning and land use
regulations and, if appropriate, to cause the Properties to be
properly platted in the records of appropriate governmental
authorities and to obtain map approval from such authorities.
(ii) Development. In the event that Centex Homes
shall determine to develop one or more of the Properties in
any respect, Manager shall perform such services and take such
actions as may be necessary or proper for the efficient
development of the Properties as contemplated by Centex Homes,
including but not limited to the hiring, discharge and
supervision, in the name of Centex Homes, of independent
contractors and consultants and the purchase of all materials,
equipment,
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tools, appliances, supplies and services necessary for such
development, subject to such guidelines and limitations as may
be established by Centex Homes. Manager shall perform such
additional services and take such additional actions in
connection with the development of the Properties as Centex
Homes may from time to time direct.
(iii) Sales and Dispositions. In the event that
Centex Homes shall determine to sell or otherwise dispose of
one or more of the Properties, Manager shall perform such
services and take such actions as may be necessary or proper
for the efficient sale or disposition of the Properties as
contemplated by Centex Homes, subject to such guidelines and
limitations as may be established by Centex Homes. Manager
shall perform such additional services and take such
additional actions in connection with the sale or disposition
of the Properties as Centex Homes may from time to time
direct.
(b) General.
(i) Bookkeeping and Accounting. Manager shall keep
books, accounts and records that reflect accurately and in
reasonable detail all revenues received and all expenditures
incurred in connection with the operation, management,
development and sale of the Properties and shall provide any
additional accounting and clerical services that Centex Homes
may deem necessary or desirable for the efficient operation,
management, development and sale of the Properties. The books,
accounts and records shall be maintained at the principal
place of business of Manager. Manager shall, during regular
business hours, make such books, accounts and records
available to Centex Homes or the representatives of Centex
Homes for examination. Manager shall furnish such additional
information as may be reasonably requested by Centex Homes
from time to time with respect to the financial, physical or
operational condition of the Properties.
(ii) Employment. Manager shall hire, discharge and
supervise the work of all management, clerical, operating and
other employees necessary for the efficient operation,
management, development and sale of the Properties and for the
performance of any additional duties and obligations that
Manager may be required to perform under this Agreement. All
such employees shall be employees of Manager, subject to its
sole discretion and control, and Manager shall pay the
salaries of all such employees out of its own funds. It shall
be the duty and responsibility of Manager to prepare and file
all forms for withholding taxes, unemployment insurance,
workers' compensation and social security taxes and all other
forms required by federal, state or municipal authorities in
connection with its employees employed in the operation,
management, development and sale of the Properties.
(iii) Taxes. Manager shall pay out of funds held in
the Account (as defined in Section 10) all real property and
other taxes levied and assessed against the Properties and
prepare and file all necessary returns and statements in
connection therewith. Any fees or penalties assessed against
the Properties or against the owner of the Properties because
of Manager's failure to timely pay any taxes shall be borne by
Centex Homes and paid by Manager out of the funds held in the
Account, unless such failure by Manager constitutes gross
negligence or willful or wanton misconduct, in which event
Manager shall pay such fees or penalties out of its own funds.
(iv) Permits and Statutory Compliance. Manager shall
operate, manage, develop, and sell the Properties in full
compliance with all applicable laws and regulations of
federal, state, county and municipal authorities and shall
obtain and
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maintain, in the name of each Property owner, all permits and
licenses required in connection with the operation,
management, development, and sale of the Properties. Manager
shall take such actions as may be necessary to comply promptly
with any and all governmental orders or other requirements
affecting the Properties, whether imposed by federal, state,
county or municipal authority; provided, however, that Manager
shall take no such actions so long as Centex Homes is
contesting, or has expressed its intention to contest, any
such order or requirement. Manager shall promptly notify
Centex Homes in writing of all notices it receives regarding
such orders or requirements.
(v) Maintenance. Manager shall maintain and repair
the Properties in accordance with sound management practices
and local codes. Manager is authorized to purchase all
materials, equipment, tools, appliances, supplies and services
necessary to the proper physical maintenance and repair of the
Properties.
(vi) Collection of Income: Legal Actions. Manager
shall use its best efforts to collect all income produced by
the Properties or the operation thereof when such income
becomes due. It is understood, however, that Manager does not
guarantee the collection of such income. Manager shall, in the
name and at the expense of the Property owner, execute and
serve such notices and demands as Manager may deem necessary
or proper, and institute, prosecute, settle or compromise any
legal actions that may be necessary, to enforce the collection
of such income. Manager shall, in the name and at the expense
of the Property owner, institute, prosecute, settle or
compromise any other legal actions and make use of any methods
of legal process that may be necessary in connection with the
operation, management, development or sale of the Properties,
including any legal action necessary to recover possession of
any part of the Properties and protect the rights and interest
of Centex Homes in the Properties. Manager shall promptly
inform Centex Homes of any such legal action or use of legal
process, and of any claim asserted by any party affecting the
rights and interest of Centex Homes in the Properties.
Notwithstanding the foregoing provisions of this subsection
(b)(vi), Manager shall not settle or compromise any legal
action or controversy, or make any adjustment of any matters
involved therein, without the prior written consent of Centex
Homes, unless such settlement, compromise or adjustment
involves an amount not exceeding $100,000.
(vii) Additional Duties. In addition to the
foregoing, Manager shall perform all services that are
necessary or proper for the efficient operation and management
of the Properties, and shall report to Centex Homes promptly
any conditions concerning the Properties that, in the opinion
of Manager, require the attention of Centex Homes.
3. Additional Services. Manager shall provide such additional tax,
accounting, bookkeeping, clerical, financial reporting, legal and similar
services to Centex Homes (whether or not in connection with the operation,
management, development, or sale of the Properties) as may from time to time be
requested by Centex Homes.
4. Authority of Manager to Act on General Instructions. The authority
granted to Manager by Centex Homes pursuant to this Agreement, shall be deemed
to include the authority to take, without further authorization from Centex
Homes, such specific actions as may be reasonably necessary or appropriate in
connection with the performance by Manager of its duties and obligations under
this Agreement and the carrying out of the instructions given to it by Centex
Homes in accordance with this Agreement, notwithstanding the fact that such
actions may not have been specifically authorized by the provisions of this
Agreement or by Centex Homes.
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5. Division Officers. Centex Homes has appointed and agrees to retain
during the term of this Agreement a reasonable number of Manager's employees to
serve as officers of the Property owners to enable Manager to fulfill its
obligations under this Agreement.
6. Use of Affiliates. Manager shall have the right to hire any
affiliate of Manager to perform any services in connection with the operation,
management, development or sale of the Properties, provided, however, that the
fees paid to any affiliate of Manager for such services shall be competitive
with fees charged by nonaffiliate entities providing the same or similar
services in the area.
7. Liability of Manager. Manager shall not be liable, responsible or
accountable in damages or otherwise to Centex Homes for any act performed by
Manager on behalf of Centex Homes and in a manner reasonably believed by Manager
to be within the scope of the authority granted to it by this Agreement and in
the best interests of Centex Homes, provided that Manager was not guilty of
gross negligence or willful or wanton misconduct with respect to such act.
8. Indemnification. Centex Homes shall indemnify, save harmless and
defend Manager and each of Manager's shareholders, directors, officers,
employees, agents, attorneys, insurers and any affiliate of Manager hired or
authorized by Manager pursuant to the terms of this Agreement to perform any
services in connection with the operation, management, development or sale of
the Properties (individually, an "Indemnitee") against any and all losses,
damages, liabilities, judgments, fines, penalties, amounts paid in settlement
and expenses (including reasonable attorneys' fees), including losses, damages,
liabilities, judgments, fines, penalties, amounts paid in settlement and
expenses (including reasonable attorneys' fees) incurred as the result of the
negligence of any Indemnitee, arising out of or in connection with anything done
or omitted by such Indemnitee in connection with the performance by Manager of
its duties and obligations under this Agreement, provided that such Indemnitee's
conduct did not constitute gross negligence or willful or wanton misconduct. Any
indemnification hereunder shall be made only out of the assets of Centex Homes.
To the extent that the funds held in the Account are adequate therefor, any
payments that Centex Homes is required to make under this Section 8 may, at the
direction of Centex Homes, be made out of such funds by Manager on behalf of
Centex Homes. In no event may any Indemnitee subject the limited partners,
members, or shareholders of Centex Homes to personal liability by reason of the
indemnification provisions of this Section 8. The terms of this Section 8 shall
survive, and remain in effect following, the termination of this Agreement.
9. Working Capital. Centex Homes at all times shall provide Manager
with working capital, whether by way of cash or through bank credit, sufficient
to constitute normal working capital for the uninterrupted and efficient
operation, management and development of the Properties and the performance of
any additional duties and obligations that Manager may be required to perform
under this agreement.
10. Bank Account: Payment of Costs and Expenses.
(a) All monies received by Manager for or on behalf of Centex
Homes shall be deposited in a special account (the "Account") to be
maintained by Manager in such bank or other financial institution as
Manager shall determine. All funds received by Manager from Centex
Homes pursuant to Section 9 hereof shall be deposited into the Account.
Funds held by Manager for Centex Homes' account shall in no event be
commingled with Manager's own funds or with funds held by Manager for
the account of any other party, and all funds held by Manager for
Centex Homes' account shall be trust funds in the hands of Manager.
Manager shall make available to Centex Homes upon its request all
records relating to the Account in the possession of Manager.
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(b) All reasonable costs and expenses incurred by Manager in
connection with the performance of its duties and obligations under
this Agreement shall be borne exclusively by Centex Homes and shall be
paid by Manager out of the funds held in the Account. If Manager
reasonably determines that the funds held in the Account are inadequate
for the efficient performance of its duties and obligations under this
Agreement, it shall so inform Centex Homes and Centex Homes shall
provide promptly such additional funds as may be necessary for such
purpose. Manager shall submit invoices to Centex Homes on a monthly
basis setting forth in reasonable detail the costs and expenses,
including the fees and charges of independent contractors or
consultants.
(c) Manager shall remit to Centex Homes, on or before the 10th
day of each month, all funds held in the Account and not applied to the
payment of costs and expenses as provided in this Agreement, provided,
however, that Manager shall retain in the Account such reserves as it
may deem necessary or appropriate for working capital and the payment
of taxes, assessments, debt service, insurance premiums, repairs,
refundable deposits and other contingencies. If Centex Homes determines
and informs Manager at any time that the funds held in the Account are
excessive, after taking into account such reserves as Manager shall
have determined to retain in the Account pursuant to the immediately
preceding sentence, Manager shall deliver promptly such excess funds to
Centex Homes.
11. Reimbursement of Manager. Manager shall in no event be required to
advance any of its own funds for the payment of the costs and expenses that it
is authorized by Section 10 hereof to pay out of the funds held in the Account.
If, however, Manager shall at any time advance any of its own funds in payment
of such costs and expenses (which Manager shall have the right but not the
obligation to do), Manager may submit an invoice to Centex Homes for the amount
of such advance (which invoice shall describe in reasonable detail the costs and
expenses so paid by Manager and shall be accompanied by the receipt(s) for such
payment), and Centex Homes shall pay such amount to Manager within ten (10) days
after its receipt of such invoice and accompanying receipts. If Centex Homes
fails to make such payment within such ten (10)-day period, the amount so owing
by Centex Homes to Manager shall bear interest from and after the day on which
Manager paid such costs and expenses on behalf of Centex Homes until such amount
has been paid in full at a rate equal to the lesser of the prime rate announced
or published by Bank of America, N.A. (or its successor) from time to time or
the maximum rate of interest permitted under applicable law.
12. Insurance.
(a) Manager may (but shall not be obligated to) maintain, at
the expense of Centex Homes, a program of insurance approved by Centex
Homes, which program may include, without limitation, such insurance as
Manager shall deem prudent to protect against liability of Manager that
may be occasioned by its activities under this Agreement. Manager shall
not make any material change in such program of insurance without the
prior written consent of Centex Homes (which consent shall not be
unreasonably withheld or delayed), unless such change does not result
in an increase in the potential liability of Centex Homes in any
respect.
(b) Unless otherwise specifically authorized by Centex Homes,
Manager shall obtain the insurance authorized by this Section 12 from
the insurance carriers that currently provide similar types of
insurance coverage to Centex Corporation and its subsidiary companies,
and, to the extent practicable, Manager shall, in lieu of obtaining
separate insurance coverage, be added as an insured under the policies
constituting the program of insurance maintained by Centex Homes (which
program, as in effect on the date hereof, is hereby approved by Centex
Homes for purposes of this Section 12), whether such policies were
obtained directly by Centex Homes or
MANAGEMENT AGREEMENT - Page 5
through Centex Corporation or its subsidiaries. Manager shall provide
to Centex Homes, promptly after obtaining any insurance policy pursuant
to this Section 12 (other than a policy under which Centex Homes is
also an insured), a description, in reasonable detail, of the terms and
provisions of such policy.
(c) Manager shall give written notice to Centex Homes of the
expiration or anticipated termination of any insurance policy
maintained by Manager in connection with its performance of this
Agreement at least fifteen (15) days before such expiration or
anticipated termination. Manager shall not be liable to Centex Homes or
its general partner or to any other person for damages, including
consequential damages, for its failure to obtain or maintain adequate
insurance coverage.
13. Compensation. It is understood that all actions taken by Manager
pursuant to the provisions of this Agreement shall be on behalf and for the sole
benefit of Centex Homes and that Manager shall not be entitled to any
compensation for such actions except as expressly provided in this Agreement.
Notwithstanding the foregoing, Centex Homes shall negotiate with Manager from
time to time in good faith regarding the payment by Centex Homes to Manager of,
and shall pay to Manager, reasonable additional compensation for the efforts
taken by Manager pursuant to this Agreement and for the reimbursement of an
appropriate portion of Manager's corporate overhead expenses. To the extent that
the funds held in the Account (excluding the amount of the reserves required to
be maintained therein and after the payment of all costs and expenses required
to be paid therefrom) are adequate therefor, Manager may withhold all or a
portion of such fee from the amount remitted each quarter by Manager to Centex
Homes pursuant to Section 10 hereof. Manager shall indicate clearly any amounts
so withheld on the quarterly invoices that it is required by Section 10 hereof
to deliver to Centex Homes. Centex Homes shall deduct the amount so withheld
from the fee payable to Manager under this Section 13.
14. Assignment and Delegation. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement may not be assigned by either
party without the prior written consent of the other party hereto. Any consent
granted by either party to an assignment by the other party shall not be deemed
a consent to any subsequent assignment. Notwithstanding the foregoing, Manager
may, without the consent of Centex Homes, assign and delegate the performance of
and the responsibility for any duties and obligations of Manager hereunder to
any corporation, firm, joint venture or partnership fifty percent (50%) or more
of whose voting stock (or its equivalent) is owned directly or indirectly by, or
which is otherwise controlled by, Centex Corporation. Upon execution of any such
assignment and delegation, notice thereof in the form of an executed copy of the
document or instrument effecting such assignment and delegation shall be
delivered promptly by Manager to Centex Homes and Manager shall be released from
any further obligation or responsibility under this Agreement for the
performance of the duties and obligations so assigned and delegated.
15. Termination. This Agreement may be terminated by any of the
following methods:
(a) This Agreement may be terminated by written notice from
either party to the other prior to March 1 of any year. Any such
termination will be effective on the following March 31.
(b) This Agreement may be terminated at any time by written
agreement of the parties hereto.
(c) If Centex Homes breaches any of the terms of this
Agreement, or if Manager breaches any of the terms of this Agreement
and such breach results from either the gross
MANAGEMENT AGREEMENT - Page 6
negligence or willful or wanton misconduct of Manager, the other party
hereto shall give the breaching party written notice of such breach. If
the breaching party fails to remedy the breach within thirty (30) days
after receiving such notice (or within ten (10) days in the case of a
monetary breach), the other party may terminate this Agreement;
provided, however, that in the case of a non-monetary breach, if at the
expiration of such thirty (30) day period the breaching party is
diligently using its best efforts to remedy the breach, the other party
may not terminate this Agreement on account of such breach during the
additional period, not to exceed sixty (60) days, in which the
breaching party continues without interruption to use its best efforts
to remedy the breach.
(d) If either party hereto shall be dissolved and its business
terminated, this Agreement shall automatically terminate upon the
effectiveness of such dissolution.
(e) This Agreement may be terminated by either party at any
time after the date of "Detachment of the Warrants" pursuant to Section
8.3(b) of that certain Nominee Agreement dated November 30, 1987, as
affected by that certain Supplement to Nominee Agreement dated as of
July 27, 2000 (collectively, the "Nominee Agreement"), entered into by
and between Centex Corporation, Manager, and certain other parties. As
used in this subsection (e), capitalized terms shall have the meanings
assigned to them in the Nominee Agreement.
No termination of this Agreement shall have the effect of terminating Manager's
right to collect any amounts owed to it under this Agreement. Within ninety (90)
days following the termination of this Agreement, Manager shall deliver to
Centex Homes the originals of all books, accounts and records in its possession
or under its control pertaining to the Properties. Manager may, at its expense,
retain copies of any such documents.
16. Notices. Any notice statement or demand required or permitted to be
given under this Agreement shall be in writing and shall be personally
delivered, sent by mail, or sent by telegram or telex, confirmed by letter,
addressed to the party in the manner and at the address shown below, or at such
other address as the party shall have designated in writing to the other party:
To Centex Homes:
Centex Homes
2728 North Harwood
Third Floor
Dallas, Texas 75201
Attention: President, Centex-Vista Properties Division
To Manager:
Centex Development Company, L.P.
2728 North Harwood
Third Floor
Dallas, Texas 75201
Attention: General Counsel
MANAGEMENT AGREEMENT - Page 7
17. Nature of Relationship. The parties hereto intend that Manager's
relationship to Centex Homes shall be that of an independent contractor. Nothing
contained in this Agreement shall constitute or be construed to be or create a
partnership or joint venture between Manager and Centex Homes or their
successors or assigns, and neither Manager nor any officer or employee of
Manager shall be considered at any time to be an employee of Centex Homes.
18. Amendments. This Agreement cannot be amended, changed or modified
except by another agreement in writing, duly signed by both parties hereto.
19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof.
20. Headings. The section headings contained herein are for convenience
of reference only and are not intended to define, limit or describe the scope or
intent of any provision of this Agreement.
21. Governing Law. This agreement shall be construed and interpreted in
accordance with the laws of the State of Texas.
22. Severability. Any provision of this Agreement that is prohibited or
unenforceable under the laws of any jurisdiction shall be ineffective in such
jurisdiction to the extent necessary to render such provision valid and
enforceable, and if such provision cannot be rendered valid and enforceable in
such jurisdiction by limitation it shall be ineffective therein. The invalidity
or unenforceability of any provision of this Agreement shall not render invalid
or unenforceable any other provision of this Agreement.
23. Previous Agreements. This Agreement supersedes and replaces any
prior written agreements regarding the operation, management, development, and
sale of the Properties between Centex Homes and Manager.
24. Outside Activities. Manager is not restricted or prohibited under
this Agreement from engaging in other activities or business ventures of any
kind or character whatsoever. Manager and Centex Homes and their respective
partners, members, shareholders, directors, officers, and employees have the
right to conduct, or to possess a direct or indirect ownership interest in,
activities and business ventures of every type and description, including
activities in business ventures that are in direct competition with one another.
[Signature Page Follows]
MANAGEMENT AGREEMENT - Page 8
IN WITNESS WHEREOF, Centex Homes and Manager have duly executed this
Agreement as of the day and year first set forth above.
CENTEX HOMES:
CENTEX HOMES,
a Nevada general partnership
By: Centex Real Estate Corporation,
a Nevada corporation,
its general partner
By:
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Richard C. Decker, President
CREC Properties Division
MANAGER:
CENTEX DEVELOPMENT COMPANY, L.P.
a Delaware limited partnership
By: 3333 Development Corporation,
a Nevada corporation
its general partner
By:
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Name:
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Title:
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MANAGEMENT AGREEMENT - Page 9