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EXHIBIT 10.53
FORM OF DEVELOPMENT AND TURNKEY SERVICES AGREEMENT
This Development and Turnkey Services Agreement (this "Agreement") is
entered into by and between Capital Senior Development, Inc., a Texas
corporation ("Capital"), and Triad Senior Living ___, L.P., a Texas limited
partnership ("Triad"), this ___ day of _________, 199_.
RECITALS:
WHEREAS, Triad has been established to own and/or operate assisted
living facilities, independent living facilities, skilled nursing facilities
and other related medical facilities (each a "Facility" and collectively the
"Facilities"); and
WHEREAS, Triad desires to have Capital and/or its affiliate develop,
construct, market and manage the Facilities; and
WHEREAS, Capital and its related entities have expertise in
coordinating the development and construction of assisted living facilities,
independent living facilities, skilled nursing facilities and other related
medical facilities;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
undertakings of each of the parties to the other, the parties hereto agree as
follows:
1. Engagement. Triad hereby retains Capital and Capital hereby agrees
to provide the Services as set forth in Section (2) below.
2. Capital's Duties. Capital's duties under this Agreement shall be
divided into three (3) phases, a development phase, construction phase, and a
post-construction phase (collectively, the "Services"), and shall be as follows:
I. Development Phase
(a) Filing of Applications for Permits, Consents and Approvals.
Coordination, advice, recommendations and consultations with respect to the
filing of all necessary documents required by any applicable federal, state or
local government under applicable law in order obtain any required permit,
approval, consent or certificate ("Permit"), including, without limitation, any
applicable certificate of need for any Facility, including, without limitation,
the preparation and filing by or on behalf of Triad of application forms,
notices of intent to file and other legal notices.
(b) Prosecution of Permit Applications and Appeals. Prosecution of
Permit applications, preparation of responses to appropriate governmental
agencies comments with respect to completeness review as to Permit applications,
preparation of responses to taxpayer groups and others with respect to such
applications, including attendance at public hearings and meetings with
community groups and health planning organizations. Capital shall appeal with
all due diligence, on behalf of Triad, any denials of Permit applications or
challenges to the granting thereof which
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Triad elects to contest. The cost of such appeals shall be included in the
Contract Price (as defined herein) of each Facility.
(c) Site Selection. Capital shall assist Triad in locating an
appropriate site for each Facility ("Site"). Triad shall be responsible for
providing or obtaining commitments for financing the construction, including
the furnishing of financial statements, providing an appraisal of the Site and
the Facility and for executing applications, notes, mortgages, assumption
agreements and other documents reasonably necessary to effectuate such
financing. Subject to Triad's prior approval, Capital shall order a Phase I
Environmental Report to determine the presence or absence of hazardous waste or
materials on any such Site. Capital shall coordinate the title examination to
determine that the Site is not subject to any easements, encumbrances,
restrictions or agreements which adversely affect the ability of Capital to
develop and construct the Facility or the ability of Triad to operate the
intended Facility thereon. To date, Capital has identified and Triad has
approved for development each of the Sites identified on Exhibit A attached
hereto.
(d) Zoning Approvals. Capital shall use its best efforts in obtaining
all applicable governmental permits and approvals for the construction of each
Facility, including, without limitation, coordination, advice, recommendations
and consultations with respect to the filing of all necessary documents to
obtain zoning and inland/wetlands approvals ("Zoning Approvals"); Capital shall
prepare all applications for and prosecute the same for all Zoning Approvals
required for any Facility. All filing, notice and reasonable legal fees in
connection therewith shall be included in the Contract Price. Capital shall not
have the right to retain legal counsel without the prior approval of Triad
which shall not be unreasonably withheld, delayed or conditioned.
(e) Triad Representative. Triad shall appoint a representative to
communicate with Capital with respect to each Facility (the "Triad
Representative"). Capital shall, on a periodic basis not less frequently than
bi-weekly (or more frequently as reasonably requested by Triad) communicate in
person or by telephone (at Triad's option) with the Triad Representative to
report with respect to the progress and status of each Facility and to obtain
the opinions, views and direction of the Triad Representative with respect to
the completion of each Facility.
(f) Decision Making. Nothing herein shall be construed as imposing any
obligation on Triad to proceed with the construction of the Facilities whether
or not the Zoning Approvals for the applicable Facilities are granted, it being
understood and agreed that Triad shall have a period of thirty (30) days after
written notice from Capital to Triad of the issuance of a final, non-appealable
Zoning Approvals (the "Election Deadline") in which to make such determination
as to such Facility.
(g) Development Agreement. Triad shall enter into a development
agreement in the form attached hereto as Exhibit B (the "Development Agreement"
and collectively "Development Agreements") with Capital with respect to the
applicable Facility subsequent to entering into an agreement of sale relating
to such Facility.
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II. Construction Phase
Upon the execution of a Development Agreement for a Facility, the
parties' rights and obligations shall be as described in each Development
Agreement which shall include, without limitation, the following:
(a) Plans and Specifications. All of the Facilities shall be
constructed by Capital pursuant to plans and specifications approved by Triad
in all material respects.
(b) Contract Price. The contract price for the construction and
furnishing (subject to an allowance set forth below) of the subject Facility
under the applicable Development Agreement (herein the "Contract Price") shall
be an amount equal to the costs incurred by Capital in the development and
construction of such Facility plus a developer fee equal to four percent (4%)
of the costs incurred. The Contract Price shall also include reimbursement to
Capital for all overhead and expenses incurred in performing the services under
the applicable Development Agreement, but not to exceed four percent (4%) of
the costs incurred in constructing and furnishing the subject Facility.
(c) FF&E. The Contract Price for each Facility will include an
allowance ("FF&E Allowance") for furniture, fixtures & equipment ("FF&E") equal
to the amount of the allowance therefor as agreed upon by Capital and Triad in
the applicable Development Agreement. Triad will make selections in a timely
fashion and all items will be ordered by Capital. Any amounts expended for FF&E
above the FF&E Allowance therefor will be an increase adjustment to the
Contract Price, the cost of which will be passed through to Triad at Capital's
actual cost without any developer fee. Capital will endeavor to obtain the
lowest possible cost for such items. Prior to incurring any costs in excess of
the FF&E Allowance, Capital shall use its reasonable best efforts to notify
Triad in writing of the estimated amount of such excess. Capital will, upon
request, provide Triad with documentation of the costs incurred by Capital for
which reimbursement is sought.
(d) Unusual Site Conditions. The costs by Capital in remedying unusual
site conditions will be an increase adjustment to the Contract Price for each
Facility to the extent that such costs exceed an agreed upon allowance therefor
as a result of unusual site conditions not identifiable by Capital after the
exercise of reasonable diligence at the time the Site was acquired. At such
time as Capital becomes aware of any such unusual site conditions, Capital
shall promptly notify Triad of the same and of the amount by which the
estimated cost to correct said site conditions shall exceed such allowance.
Capital will endeavor to obtain the lowest possible cost in remedying such
unusual site conditions and will charge Triad for Capital's actual cost
incurred except that an unusual site condition which should have been
identified by Capital in exercising reasonable diligence at the time such
Facility was acquired will be at Capital's cost.
(e) Financing. Triad will arrange for the provision of construction
and permanent financing for each of the Facilities by executing all
applications, notes, mortgages, assumption agreements and other documents
reasonably necessary to effectuate such financing. Capital shall not have any
obligation to guaranty the payment or performance obligations of Triad under
the terms of such financing.
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(f) Occupancy Development Program. Capital will prepare and recommend
to Triad, for its approval, an occupancy development program for the Facility
and budget for the cost of such program which shall include the planning and
arranging for the creative services, production, type, mix, copy, placement and
purchase of the material and media as necessary to implement said occupancy
development program.
III. Post-Construction Phase
Each Facility unless otherwise agreed upon by Triad and Capital prior
to the execution of the Development Agreement, shall be managed by Capital or
an affiliate of Capital pursuant to the terms of a Management Agreement (a copy
of which shall be attached to the Development Agreement as an exhibit thereto)
in form and substance mutually agreeable to the parties ("Management
Agreement"). Triad shall retain primary responsibility for establishing all
policies and objectives for the Facility and planning for its short-range and
long.-range goals. In the event of the termination of the Management Agreement,
Triad may either elect to manage the Facility itself or may select such
management firm as it desires.
The parties' rights and obligations shall be as described in each
Management Agreement which shall include, without limitation, the following:
(a) Capital shall provide consultant and management services and take
such steps as it deems necessary, all subject to and in accordance with the
policies and guidelines established by Triad to prepare the Facility for
occupancy and operation.
(b) Capital shall recruit and train, at Triad's expense a competent
executive director acceptable to the Triad for the supervision of the
administrative functions of each Facility. Such executive director shall be
qualified to meet the requirements established by all federal, state and/or
local administrative bodies or agencies having jurisdiction over each Facility.
(c) Capital shall assist Triad in the licensing, equipping and
staffing phases of each Facility. The staff of each Facility shall be employees
of Capital.
(d) Capital shall furnish and install operating procedures, systems
and controls developed by it for the purposes of providing effective management
techniques and functions for the benefit of the Residents of each Facility.
(e) Capital shall prepare for review and approval by Triad each
initial operating budget and annual operating budgets for each Facility for
each year of the term of the Management Agreement. Following the initial
occupancy of each Facility, Capital will report to Triad at least once each
month on the financial status of each Facility during the previous month.
(f) Capital shall receive a monthly management fee under the
Management Agreement equal to five percent (5%) of Gross Revenues generated
during the immediately proceeding month provided that the monthly management
fee shall not be less than Five Thousand Dollars ($5,000.00), and a marketing
lease-up fee of Five Hundred Dollars ($500.00) for each unit leased at the time
the unit is initially occupied.
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3. Independent Contractor. Capital shall act as an independent
contractor for purposes of performing all of the above services.
4. Costs and Expenses. Triad shall be responsible for all costs and
expenses incurred by Capital in the performance of its obligations hereunder,
including but not limited to, the payment of all compensation and benefits to
employees of Capital and any normal and customary transportation or incidental
business related expenses incurred by employees of Capital. In the event a
final, non-appealable Permit is not granted or final and a Facility is not
constructed or in the event Triad elects not to proceed with a project after
the granting thereof in accordance with the terms contained hereinabove, to the
extent not previously or directly paid by Triad, Triad will reimburse Capital
for all reasonable and documented out-of-pocket expenses incurred by it, if
any, in connection with the provision of the foregoing services.
5. Independent Agreements. The agreements with respect to each
Facility as set forth herein are independent of the agreements with respect to
any other Facilities since there is no guaranty that a suitable Site or other
condition precedent will be met with respect to any particular Facility.
6. Indemnity. Capital agrees at all times to indemnify and defend
Triad affiliates, and its respective employees, officers, directors, servants
and agents (collectively, the "Triad Parties") and hold and save the Triad
Parties harmless of and from and against any and all liabilities and
indebtedness, obligations, losses, damages, costs and expenses (including
reasonable attorneys' fees) suffered or incurred by the Triad Parties by reason
of any claim or demand brought by anyone or any action or proceeding instituted
or judgment rendered against the Triad Parties arising out of or resulting in
any manner from Capital's breach or failure to perform Capital's material
obligations, responsibilities or duties as required by this Agreement,
Capital's failure to be appropriately licensed to perform the services required
of it hereunder, or any negligent willful act or omission of Capital or any of
its subcontractors, agents or employees.
Triad agrees at all times to indemnify and defend Capital and its
affiliates and their respective employees, officers, directors, servants and
agents (collectively, the "Capital Parties") and hold and save the Capital
Parties harmless of and from and against any and all liabilities and
indebtedness, obligations, losses, damages, costs and expenses (including
reasonable attorneys' fees) suffered or incurred by the Capital Parties, by
reason of any claim or demand brought by anyone or any action or proceeding
instituted or judgment rendered against the Capital Parties arising out of or
resulting in any manner from Triad's breach or failure to perform, Triad's
material obligations, responsibilities or duties as required by this Agreement,
or any negligent willful act or omission of Triad or any of its subcontractors,
agents or employees.
7. Termination. Triad and Capital shall not be required to proceed
with the execution and delivery of any additional Development Agreements for
additional Facilities in the event of a material default by the other party
with respect to one or more Facilities then under construction which is not
cured within any applicable cure period provided for in the applicable
Development Agreement. In the event of the termination of any Development
Agreement, any amounts due on account of services performed prior to the
effective date of termination which have not been previously paid will be paid
(pro rata through the effective date of termination) promptly following
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termination less any damages sustained by the non-breaching party as a result
of the breach. Any such termination shall not affect the rights of the parties
under this Agreement which relate to events prior to such termination,
including without limitation, rights under this Section 7.
8. Notices. All notices which may be given to any of the parties
hereunder shall be in writing and shall be either sent by telecopy transmission
to a telecopy machine located in the office of Triad or Capital, as the case
may be, or hand delivered or sent by registered or certified mail, return
receipt requested, or by Federal Express or similar nationally recognized
overnight delivery servicer providing a receipt, and postage prepaid as
follows:
To Capital:
Capital Senior Living Properties, Inc.
14160 Dallas Parkway
Suite 300
Dallas, Texas 75240
Attention: David Suarez, Vice President of Development
With a copy to:
Capital Senior Living Properties, Inc.
14160 Dallas Parkway
Suite 300
Dallas, Texas 75240
Attention: David R. Brickman, Vice President and General Counsel
To Triad:
Triad Senior Living __, L.P.
4312 Mockingbird Lane
Dallas, Texas 75205
Attention: Blake N. Fail, President
Such addresses may be changed from time to time by notice from Triad
or Capital to the others.
The effective date of any such notice shall be the date of actual
receipt at Triad's address or Capital's address, as applicable, if hand
delivered, sent by overnight delivery or sent by facsimile transmission or
registered mail, or three (3) days after such notice is properly deposited for
mailing if sent by United States mail.
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9. General Provisions:
(a) Gender, Number. Whenever the context requires, the use herein of
(i) the neuter general includes the masculine and feminine genders; and (ii)
the singular number includes the plural number.
(b) Entire Agreement. This Agreement and any document executed
pursuant hereto contains the entire agreement between the parties relating to
the transactions contemplated hereby and all prior or contemporaneous
agreements, understandings, representations and statements, oral or written,
are merged into and superseded by this Agreement.
(c) Modifications. No modifications, waiver or discharge of this
Agreement will be valid unless it is in writing and signed by the parties
hereto.
(d) Attorneys' Fees and Costs. If either party commences an action for
the interpretation, reformation, enforcement or rescission of this Agreement,
the prevailing party will be entitled to recover from the other party
reasonable attorneys' fees and court and other costs incurred, including
without limitation, its costs and fees on appeal.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one instrument.
(f) Applicable Laws. This Agreement shall be construed and enforceable
in accordance with the laws of the Texas.
(g) Time of Essence. Time is strictly of the essence with respect to
each and every term, condition, obligation and provision herein.
(h) Further Instruments. Each party hereto shall from time to time
execute and deliver such further instruments as the other party or its counsel
may reasonably request to effectuate the intent of this Agreement.
(i) Joint Effort. The preparation of this Agreement has been a joint
effort of the parties, and the resulting document shall not be construed more
severely against one of the parties than the other.
(j) Captions. The captions of this Agreement are for convenience and
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision hereof.
(k) Severability. The invalidity or unenforceability of one or more of
the phrases, sentences, provisions, clauses, sections or Articles contained in
this Agreement shall not affect the validity or enforceability of the remaining
portions, so long as the material purposes of this Agreement can be determined
and effectuated.
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(l) Exhibits. The Exhibits attached to this Agreement are hereby
incorporated by reference and made a part of this Agreement.
(m) Successors. Subject to the limitations on assignment set forth in
Section 9(o), this Agreement shall be binding upon the parties hereto, their
respective successors and assigns.
(n) Brokers. Each of Triad and Capital represent and warrant to the
other that no broker or finder has acted on its behalf in connection with this
Agreement, or the transactions contemplated hereby or referred to herein. Each
of Triad and Capital agrees to indemnify and hold the other harmless from any
claim or demand for commission or other compensation by any broker, finder or
similar agent claiming to have been employed by or on behalf of such party.
(o) Assignment. Triad shall have no right to assign its rights or
delegate its obligations under this Agreement to another entity or person
without the prior written consent of Capital except that this Agreement, or
this Agreement as it relates to a specific Facility, may be assigned by Triad,
in whole or in part, to an affiliate of Triad without the consent of Capital,
provided that Triad shall remain primarily liable for payment and performance
of all obligations under this Agreement after the assignment. Capital shall
have no right to assign its rights or delegate its obligations under this
Agreement to another entity or person without the prior written consent of
Triad, except that this Agreement may be assigned by Capital, in whole or in
part, to an affiliate of Capital without the consent of Triad, provided that
Capital shall remain primarily liable after such assignment. Each of Triad and
Capital shall promptly provide the other with notice of an assignment permitted
by the terms hereof without the consent of the other party. The term
"affiliate" shall mean any entity which is controlled by, under common control
with, or which controls, Triad or Capital, as the case may be.
(p) Cooperation. Both parties agree that they shall cooperate with
each other in allowing Capital to perform its duties under this Agreement,
including, without limitation, Triad providing prompt responses to all
inquiries made by Capital in connection with all aspects of the work for each
Facility, including, without limitation, the selection of the FF&E for each
Facility and all background documentation (including without limitation
financials, census data and corporate documents) needed to complete, file and
prosecute the Permit applications and Zoning Approvals and will sign all
applications as necessary.
(q) Development Agreement to Control. In the event that any of the
terms or conditions set forth herein are inconsistent with or contrary to any
of those set forth in an applicable Development Agreement for a Facility, then
the terms and conditions set forth in such Development Agreement shall control.
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EXECUTED as an instrument under seal effective as of the date first
set forth above.
CAPITAL SENIOR DEVELOPMENT, INC.
By:
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Keith N. Johannessen, President
TRIAD SENIOR LIVING ___, L.P.
By: Triad Partners __, Inc.
Its general partner
By:
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Blake N. Fail, President
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EXHIBIT A
SITES
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EXHIBIT B
FORM OF DEVELOPMENT AGREEMENT
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