1
EXHIBIT 10.35
San Antonio
(▇▇▇▇▇▇▇ Road)
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is by and between Capital
Senior Development, Inc., a Texas corporation (the "Developer"), and Tri Point
Communities, L.P., a Texas limited partnership (the "Owner"), and is entered
into for the purpose of reducing to a formal writing all of the parties
understandings with respect to the development and construction of a proposed
senior living project to be comprised of 120 units (the "Project") to be located
on land as described below (the "Property").
In consideration of the undertakings of each of the parties to the
other IT IS AGREED:
ARTICLE I
Representations
The parties make each of the following representations:
Section 1.1 - Title to Property. The Owner shall have or acquire good
and indefeasible title in fee simple to the Property consisting of approximately
5.845 acres of land as more fully described in Exhibit "A". Exhibit "A" and each
of the other Exhibits referred to in this Agreement shall be incorporated into
this Agreement by such reference as if fully set forth in this Agreement.
Section 1.2 - Encumbrances.
(a) The Owner and the Developer acknowledge that the Property will be
subject to the easements, assessments, conditions, contracts, rights, claims,
encroachments, restrictions and other encumbrances as set forth on Exhibit "B"
(the "Existing Encumbrances"), to physical conditions disclosed by a boundary
survey to be prepared by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ of ▇▇▇▇▇ Surveying, Inc. entitled
"ALTA/ACSM Land Title Survey" dated October 6, 1997, as revised (Map No. 97-200
DWG) for the Property, and will be subject to those easements, conditions,
contracts, rights, licenses, encroachments, restrictions and other encumbrances
resulting from the Developer securing regulatory, development and construction
approvals for the Project and attendant site improvements. The Owner and the
Developer each represents to the other that it has reviewed the boundary survey
and the topographical survey of the Property and has made a physical inspection
of the Property and is satisfied with the Property as to the site
characteristics and attributes in all material respects.
(b) Concurrently with the execution of this Agreement, the Owner shall
provide the Developer with copies of all engineering, architectural and any
other plans, studies and surveys title reports, environmental assessments,
appraisals and other information regarding the Property or the Project which are
in the Owner's possession, custody or control.
2
(c) The Owner represents, to the best of its knowledge, that the
Property has only the apparent site and off-site conditions, if any, as set
forth on Exhibit "C" which require the implementation of the measures, if any,
as set forth on Exhibit "C".
(d) Commencing on the date the Developer elects to commence
construction in accordance with this Agreement, the Owner shall provide the
Developer with full possession and complete control of the Property for purposes
of performing the Developer's obligations hereunder.
Section 1.3 - Permit and Approvals.
(a) The Developer represents that it shall use its best efforts to
obtain all state, federal, county and municipal land use approvals and permits,
licenses, easements, and utility agreements which are necessary for the
development, construction and opening of the Project on the Property (the
"Approvals"). The Developer covenants to diligently use its best efforts to
obtain all of the Approvals in an expeditious manner. In the event that the
Developer is unable to obtain the Approvals, the Developer shall have no
liability whatsoever to the Owner, or any other party and at the Owner's or the
Developer's option, this Agreement shall be terminated without recourse to
either party hereto at law or in equity.
(b) The Owner represents that it shall cooperate with Developer in
obtaining the Approvals.
(c) For the sole purpose of permitting the Developer to construct the
Project, the Owner grants to the Developer, to the extent required by the
Developer in order that the purpose of this Agreement be effectuated, the rights
under the Approvals obtained in the name of Owner and any other grants of
rights, permits, approvals, or licenses, which may be necessary to complete the
performance of the Developer's obligations hereunder; provided, however that no
grant of any of the foregoing shall occur which is prohibited by applicable law
or the respective terms hereof.
Section 1.4 - Documentation. The Owner shall provide or obtain
construction and permanent financing for the Property, the Project, the Personal
Property (herein so called) related to the Project and related development costs
(collectively, the "Project Loan") which shall be sufficient, together with the
Owner's equity contributions, if necessary (which shall in no event exceed
fifteen percent (15%) of the Contract Price (as hereinafter defined) if the
Project Loan is intended to fund 85% of Project costs and which shall in no
event exceed twenty percent (20%) of the Contract Price if the Project Loan is
intended to fund 80% of Project costs), to pay the full amount of the Contract
Price. The Owner shall provide to Developer a complete set of all project loan
documents (collectively, the "Project Loan Documents") required by the Owner's
lender ("Lender") in connection with the Project Loan. Developer shall assist
Owner in obtaining all reasonable documentation required by Lender. Such
documentation shall include, but is not limited to, all zoning and plan
approvals, all utility letters indicating positive availability of service,
inventory of concessions made to and agreements with any or all municipal
bodies, site plans, title policies, and all other regulatory body approvals. The
Owner also covenants that it will, in a timely manner, provide whatever
financial or other information the Lender might
2
3
reasonably require in connection with the applications for financing for the
construction of the Project and as required by the Lender in connection with the
Project Loan. The Owner will use its best efforts to pursue its application for
construction and permanent financing for the Project.
Section 1.5 - Other Agreements. The Owner and the Developer each
represents to the other that neither entering into this Agreement nor performing
their respective obligations hereunder will violate any other agreements or
documents by which either may be bound.
Section 1.6 - Utility Services. The Owner represents that, to the best
of its knowledge, all utility services required to construct and operate the
Project (including, without limitation, public water, sewer and electricity) are
currently available to the Property in the capacities required to operate the
Project. No work need be performed by or on behalf of the Developer to make such
utilities available to the Property for the construction or operation of the
Project, except for the matters, if any, set forth on Exhibit "C". Copies of
letters from the providers of such utility services confirming such availability
are annexed hereto as Exhibit "D".
Section 1.7 - Good Standing of the Developer. The Developer represents
that it is duly organized, validly existing and in good standing under the laws
of the State of Texas. The Developer represents that it is empowered and
authorized to execute, deliver and perform its obligations under this Agreement,
and, upon such execution and delivery and subject to the conditions subsequent
set forth in Section 5.1, this Agreement shall be valid, binding and legal
obligation of the Developer, enforceable in accordance with its terms and, duly
authorized by a vote of its Board of Directors in compliance with its articles
of incorporation and bylaws and all applicable laws of the State of Texas.
Section 1.8 - Good Standing of the Owner. The Owner represents that it
is duly organized and validly existing under the laws of the State of Texas. The
Owner represents that it is empowered and authorized to execute, deliver and
perform its obligations under this Agreement, and upon such execution and
delivery and subject to Section 5.1, this Agreement shall be the valid, binding
and legal obligation of the Owner, enforceable in accordance with its terms and
duly authorized by its general partner in compliance with its limited
partnership agreement and all applicable laws of the State of Texas.
ARTICLE II
Construction of the Project
Section 2.1 - Control of Construction. Subject to the express
provisions contained herein, it is the intention of the parties that the
Developer shall have sole, complete and absolute authority and discretion to
decide any and all issues pertaining to the construction of the Project,
including, without limitation, the expenditure of funds, the incurring of costs
and all of the other matters referred to herein, so long as the same are in
compliance with the Approvals, the Final Plans (as defined below) all applicable
laws and the Project Loan Documents.
Section 2.2 - Architectural and Engineering Services. The parties
acknowledge that WSI Architects and their consulting engineers (the "Architect
and Engineers") have or will be retained
3
4
by the Owner. The Owner will be responsible for payment of the architectural
fees due to the Architect, pursuant to the contract with respect to the Project
dated August 4, 1997 (said contracts herein collectively, the "Architectural
Contract"). The Owner represents and warrants to the Developer that a true,
accurate and complete copy of the Architectural Contract is attached hereto as
Exhibit "E". The Developer shall not be responsible to the Owner, or any other
party for any errors, omissions, breaches or failures thereof, or any damages
resulting from the acts or omissions of the Architect.
Section 2.3 - Other Professionals and General Assumed Obligations. The
Owner represents that it has not engaged any architects or any engineers,
consultants, accountants, or other professionals with respect to the Project,
other than the Architect and Engineers, which the Owner shall be obligated to
pay.
Section 2.4 - Plans and Specifications.
(a) The Architect and Engineers retained by the Owner shall, under the
direction of the Developer and after consultation with the Owner, prepare basic
design plans (the "Basic Plans"). As a part of this process, the Developer may
engage engineers, including the site engineers, to perform test borings and
other soil testing at the Property for purposes of properly locating the Project
on the Property. The Developer, the Architects and the Engineers shall consult
with the Owner during the process of preparing the Basic Plans. The Developer,
Architect and the Engineers shall have access to the Project for all such tests
and surveys.
(b) Within two (2) weeks after the date of the Architect's and the
Engineer's completion of the Basic Plans and delivery to the Owner, the
Developer, the Owner, and the Architect and Engineers shall meet to review and
approve the Basic Plans. The parties shall initial the Basic Plans to indicate
their approval of such Basic Plans.
(c) Upon the approval by the parties of the Basic Plans, the Developer
shall direct the Architect and the Engineers to prepare final plans,
specifications and a site plan (collectively the "Final Plans") based on the
Basic Plans. Within two (2) weeks after the completion of the Final Plans and
their delivery to the Owner, the parties will meet to review and approve the
same, and make any necessary revisions. The Owner agrees that it will not
unreasonably withhold its approval of the Final Plans if they conform in all
respects to the Basic Plans. The parties agree to use their best efforts to
reasonably determine the acceptability of the Final Plans and Personal Property
(see Section 2.6). The parties shall initial the Final Plans as an indication of
their approval of the same.
Section 2.5 - Construction. The Developer shall perform such duties as
may be necessary to complete construction of the Project in a workmanlike manner
and in accordance with the Final Plans, all applicable laws and the Project Loan
Documents subject to field changes and minor design changes approved by the
Owner and if required by the Project Loan Documents, by Lender. The Project is
to be licensed for the unit complement described above and shall be constructed
in accordance with the requirements in effect on the date of this Agreement as
set forth by all federal, state and local governmental agencies having
jurisdiction of the Project, including Life Safety Code requirements imposed by
the Federal Department of Health and Human Services.
4
5
Section 2.6 - Personal Property.
(a) The Developer will furnish the specific items of personal property
contained in Exhibit "F" (the "Furniture, Furnishings & Equipment" or "F F & E")
required for the Project within the allowance (defined below). The allowance for
the "F F & E" is Four Hundred Sixty-Seven Thousand Three Hundred Fifty and
No/100 Dollars ($467,350.00) (the"F F & E Allowance"), which F F & E Allowance
shall be included in the Contract Price.
(b) The Owner shall make selections of F F & E in a timely fashion and
all items of F F & E shall be ordered by the Developer.
Section 2.7 - Changes. Subject to the provisions of the Project Loan
Documents, the Owner agrees that the Developer shall also have the right to make
changes in the Final Plans and in the Personal Property, subject to the approval
of Owner, only if required by any federal, state or local governmental authority
having jurisdiction over the Project, or if required due to the unavailability
of any construction materials or Personal Property. The Owner shall be notified
of any such changes in the Final Plans or substitutions in the Personal
Property, provided, that, such changes result in construction, space, design,
personal property, equipment and interior and exterior design comparable in
overall design and quality to that shown on the Final Plans and Owner must
approve such changes.
Section 2.8 - Commencement of Construction. Construction of the Project
will start on or prior to the date which is thirty (30) days after the date the
Project Loan Documents are executed and delivered.
Section 2.9 - Continuity of Construction. Construction, once
undertaken, shall proceed in a continuous and reasonably expeditious manner
until Physical Completion (as such term is defined in Section 2.10) is achieved,
which shall not occur later than sixteen (16) months after the date the Project
Loan Documents are executed and delivered.
Section 2.10 - Completion of Construction.
(a) For the purposes of this Agreement, the terms "Physical Completion"
or "Physically Completed" shall mean the date on which the building and
improvements described and set forth in the Final Plans have been completed and
the Project shall have been approved for and received a certificate for
temporary or permanent occupancy by the local building inspector, and by the
State Fire ▇▇▇▇▇▇▇▇ in the event his or her approval is required (the
"Certificate of Occupancy"). Physical Completion shall be deemed to have been
achieved notwithstanding that any of such officials or agencies have issued a
Certificate of Occupancy with conditions or a Punch-List listing items requiring
completion or correction, so long as such conditions or Punch-List items do not
prevent or prohibit occupancy as determined by the Owner, in its sole
discretion.
5
6
(b) The Developer will use its reasonable best efforts to notify the
Owner at least ninety (90) days prior to the time that the Developer estimates
that the Project will be Physically Completed, whereupon the Owner will
diligently proceed to fulfill all other conditions necessary for licensure and
the Owner will apply in a timely manner for all licenses and permits necessary
to commence operation of the Project. After such notice from the Developer, the
Owner, to the extent necessary to perform administrative activities may, so long
as it does not interfere with completion of construction, enter upon the
Property in an effort to coordinate initial licensure.
Section 2.11 - The Owner's Noninvolvement. The Owner shall have access
to the construction site while construction is in progress, but it shall not be
empowered to interfere with construction, provided, however that the Owner's and
Lender's agents shall have the right to view the construction in progress and
shall have access to the site for the purpose of equipping the Project and
preparing the Project for operation.
Section 2.12 - Punch List. If, at any time after the Project has been
Physically Completed, there shall exist any item or items requiring completion
or correction, then the Developer agrees to use all reasonable diligence to
complete or correct such item or items so that each conforms to the Final Plans.
The parties shall make a Punch List of the items requiring completion or
correction (the "Punch List"). Each item on the Punch List shall be assigned a
reasonable value based upon the reasonable cost of completion or correction of
the same or such other value as may be required by the Lender ("Punch List
Amount"). The Developer shall give its written undertaking to complete each
Punch List item within forty-five (45) days (or such other period of time as is
mutually agreed upon by the parties) after Physical Completion, further agreeing
to permit the Owner to complete any such items, at the Developer's expense, if
the Developer has failed to complete the same within the forty-five (45) day
time period.
Section 2.13 - Work and Warranties. Upon completion of construction,
landscaping and installation of Personal Property, the Developer will assign to
the Owner, in addition to all warranties created by law, all warranties and
guarantees received from designers, the general contractor and suppliers of
equipment and furnishings, to the extent assignable. The Developer will agree to
remedy any defect in construction caused by poor workmanship or materials which
are brought to its attention by written notice within a period of one (1) year
from the date of the issuance of the Certificate of Occupancy.
Section 2.14 - Subcontractors. The Developer agrees to indemnify and
save the Owner harmless from claims for payment by any subcontractor who
furnishes materials or supplies or performs labor or services in the prosecution
of the work pursuant to this Agreement. The Developer will select subcontractors
acceptable to Owner in its sole discretion.
Section 2.15 - Financing Arrangements.
(a) The Owner will obtain the Project Loan which shall be sufficient,
together with the Owner's equity contributions, if necessary (which shall in no
event exceed the amounts referenced in Section 1.4 hereof) to pay the full
amount of the Contract Price. This Agreement may be terminated by either the
Developer or the Owner without further recourse to either party (except for
reimbursement of Project related expenses) in the event that the closing and
funding of the construction loan financing with respect to the Project pursuant
to the Project Loan (with all
6
7
conditions precedent to such closing either satisfied or irrevocably waived by
the lender) shall not have occurred by January 31, 1998.
The Owner and the Developer also contemplate that the Property and
Project, together with all Personal Property now owned or hereafter acquired by
the Owner which are or may be attached to or used in connection with the
Property or Project, together with any and all replacements thereto and
substitutions therefor, and all proceeds thereof; and all present and future
rents, issues, leases, and profits of the Property and Project will serve as
security for the payment obligations to the Lender relating to the Project Loan
or otherwise, and that the Owner will be the principal obligor for the repayment
of all financial obligations thereunder.
ARTICLE III
Contract Price
Section 3.1 - Contract Price. The Contract Price ("Contract Price") to
be paid by Owner for the construction and furnishing of the Project shall be an
amount equal to the costs incurred in the development and construction of the
Project plus a developer fee for overhead and profit equal to seven percent (7%)
of the costs incurred.
Section 3.2 - Construction Contract. Owner shall execute a construction
contract with a general contractor approved by Owner and Developer. The
construction contract will be a fixed price or guaranteed maximum cost
construction contract covering completion of all construction anticipated at the
Project. The construction contract shall require a payment bond and a
performance bond acceptable to Developer and Owner and in accordance with the
Project Loan Documents.
Section 3.3 - Commencement and Completion of Construction. With the
reasonable cooperation of Owner, Developer shall commence or cause commencement
of construction of the Project no later than thirty (30) days from the date of
execution and delivery of the Project Loan Documents and shall diligently pursue
said construction to completion, and shall perform such duties as may be
necessary to complete the construction of the Project pursuant to and in
conformity with the Final Plans and in accordance with good building practice
and in full compliance with all terms and conditions of the Project Loan
Documents, all of which shall be accomplished on or before the applicable
completion deadline, and without liens, claims or assessments asserted against
the Project for any material, labor or other items furnished in connection
therewith, and all in full compliance with all governmental requirements.
Developer will provide to Owner upon request therefor evidence of satisfactory
compliance with all of the foregoing. [Texas properties: Developer and if
necessary, Owner, together with the general contractor, shall jointly file an
Affidavit of Commencement of construction using a form satisfactory to Lender
with the county clerk of the county in which the Project is located not later
than the thirtieth day after the date of actual commencement of construction of
the Project or delivery of materials to the Project. Such affidavit shall
contain the information required by ss. 53.124(c) of the Texas Property Code,
shall not be filed prior to approval thereof in writing by Lender and shall be
filed showing a date of commencement of construction which is after the
7
8
filing of the mortgage which is one of the Project Loan Documents with the
county clerk of the county where the Project is located.]
Section 3.4 - Payment of Contract Price. The Contract Price shall be
paid through requisitions pursuant to the Project Loan Documents and from funds
provided by Owner, less any Punch List Amounts or retainage required by the
Project Loan Documents or other construction documents.
Section 3.5 - Adjustments to Contract Price.
(a) If any changes to the Final Plans are approved by Owner in
accordance with Section 2.7 hereof, the Contract Price shall be adjusted
accordingly.
(b) The Contract Price for the Project includes a specific amount for F
F & E equal to the F F & E Allowance as provided in Section 2.6 hereof. Any
amounts expended for F F & E above the F F & E Allowance will be an increase to
the Contract Price, the cost of which will be passed through to Owner at actual
cost without any developer fee. Developer will endeavor to obtain the lowest
possible cost for F F & E. Prior to incurring any costs in excess of the F F & E
Allowance, Developer shall notify Owner in writing of the estimated amount of
such excess. Developer will, upon request, provide Owner with documentation of
the costs incurred by Developer for which reimbursement is sought.
(c) The costs by Developer in remedying unusual site conditions will be
an increase to the Contract Price for the Project to the extent that such costs
exceed an agreed upon allowance therefor and are the result of unusual site
conditions not identifiable by Developer after the exercise of reasonable
diligence at the time the Project was acquired. At such time as Developer
becomes aware of any such unusual site conditions, Developer shall promptly
notify Owner of the same and of the amount by which the estimated cost to
correct said site conditions shall exceed such allowance. Developer will
endeavor to obtain the lowest possible cost in remedying such unusual site
conditions and will charge Owner for Developer's actual cost incurred, except
that an unusual site condition which should have been identified by Developer in
exercising reasonable diligence at the time the Project was acquired will be at
Developer's cost.
ARTICLE IV
Additional Responsibilities of Parties
Section 4.1 - The Developer's Responsibilities. In addition to its
obligations elsewhere expressed in this Agreement, the Developer shall have the
following responsibilities:
(a) To obtain all necessary building permits and the Certificate of
Occupancy;
(b) To arrange for all labor and material required to develop,
construct and furnish the Project in accordance with the Final Plans (except as
otherwise expressly set forth herein) and to purchase the Personal Property to
be provided;
8
9
(c) The Developer shall at all times, commencing with the date upon
which construction begins, carry the following types of insurance specified in
the Project Loan Documents with an insurance carrier or carriers acceptable to
the Owner and Lender, which insurance may include the following:
(i) ▇▇▇▇▇▇▇'▇ compensation insurance fully covering all
persons engaged in the performance of this Agreement, in accordance
with applicable law.
(ii) Public liability insurance covering death or bodily
injury with limits of not less than $300,000 for one person and
$1,000,000 for any one accident or disaster; and property damage
coverage limits of not less than $100,000; all of which insurance shall
name the Owner and Lender as an additional insured.
(iii) "Builders Risk" insurance against damage or destruction
by fire and full extended coverage, including vandalism and malicious
mischief, covering all improvements to be erected hereunder and all
materials for the same which are on or about the Property, in an amount
equal to the full insurable value of such improvements and materials;
such insurance to be payable to the Owner, the Developer and the Lender
as their interests may appear, with a standard mortgagee endorsement to
the Lender or its assigns as mortgagee.
The Developer shall furnish to the Owner and the Lender if required by
the Lender, duplicate policies of insurance or certificates of insurance as set
forth in subparagraphs (i), (ii), and (iii) hereof. Each of such policies shall,
if the insurance carriers so permit, contain a provision to the effect that they
may not be canceled except upon ten (10) days prior written notice to the Owner
and the Lender.
(d) In preparation for each disbursement under the Project Loan
Documents, the Developer shall deliver to the Owner, at the Owner's request,
such documents as required under the Project Loan Documents, including without
limitation:
(i) duly executed waivers of mechanic's liens signed by each
subcontractor which provided labor or materials on the Project; and
(ii) reasonable proof of payment or proof of a provision for
payment to such subcontractors.
Section 4.2 - The Owner's Responsibilities. In addition to its
obligations elsewhere expressed in this Agreement, the Owner shall have the
following responsibilities:
(a) To expeditiously pursue obtaining commitments for financing the
contemplated construction, including the furnishing of financial statements,
providing an appraisal of the Property and Project and by execution of
applications, notes, mortgages, assumption agreements and other documents
reasonably necessary to effectuate such financing or the financing of the
Personal Property.
9
10
(b) To pay for all professional and other staff personnel required for
the pre-opening and operation of the Project in sufficient time to permit
licensure, if required, by the applicable state agency at the date of Physical
Completion.
(c) To pay the costs approved by Owner for correcting unusual site
conditions. For the purpose of this Agreement, the term unusual site conditions
shall include, without limitation, any of the following which have not been
noted in the Final Plans or otherwise identifiable by the Developer in
exercising reasonable diligence:
(i) unusual soil or water conditions requiring extraordinary
preparation, i.e., piles, curtain drains, retaining walls, blasting or
rip-rap;
(ii) tying in of water, sewer or other utility services beyond
the locations as shown in the Final Plans;
(iii) holding tanks and pumps for the water system or the
sprinkler system;
(iv) water purification or filter system;
(v) leaching field; and
(vi) any requirement imposed upon the Developer by
governmental agencies having jurisdiction, if not provided for in the
Final Plans, because of reasons other than errors or omissions in such
Final Plans, such as requirements imposed as conditions for the
granting of any of the Approvals.
Section 4.3 - Indemnification. The Developer hereby agrees to indemnify
and hold the Owner harmless from all liabilities, claims, and demands for
personal injury or property damage arising out of or caused by any act or
omission of the Developer, its subcontractors, agents, or employees, or arising
in or about the Property at any time from the date of this Agreement. The
Developer further covenants to use proper care and caution in the performance of
its work hereunder so as not to cause damage to any adjoining or adjacent
property, and the Developer shall indemnify and hold the Owner harmless from any
liabilities, claims, or demands for damage to such adjoining or adjacent
property.
ARTICLE V
Contingencies
Section 5.1 - Required Occurrences. This Agreement and the undertakings
of the Developer shall, at the election of the Owner, be contingent upon the
occurrence of each of the following:
(a) Approvals. All of the Approvals and current utility availability
letters shall have been obtained.
10
11
(b) Title. An Owner's title insurance policy commitment and ALTA
survey, satisfactory to the Developer, in its sole discretion, shall have been
obtained by the Owner which confirms that there are no exceptions or conditions
which would render title to the Property defeasible or which will prohibit or
restrict the construction or operation of the Project or which would prevent an
institutional lender from closing a construction or permanent mortgage loan for
the Project in the usual course of its business.
(c) Additional Due Diligence Regarding the Property. The Developer
shall have received due diligence information concerning the Property,
satisfactory to the Developer, in its sole discretion, including, without
limitation, soil tests and utility service confirmations to the extent not
currently available. On or before the expiration of any inspection periods
regarding the Property, the Developer shall notify the Owner of any issues.
(d) Purchase of the Property. The Owner shall have purchased good and
indefeasible fee simple title to the Property as set forth in Section 1.1.
(e) Construction Financing. The Owner shall have received construction
financing in the full amount of the Contract Price.
Section 5.2 - Failure of Contingencies. In the event that any one or
more of the contingencies set forth in this Article is not satisfied, waived or
deferred by the parties in writing, within a reasonable period of time, then,
upon Notice, either party may terminate this Agreement. In such event, neither
party shall have any further responsibility or liability to the other. The
Developer reserves the right, at its option, to waive or defer any one or more
of the conditions precedent.
ARTICLE VI
Additional Covenants of The Owner and The Developer
Section 6.1 - Indemnification by The Owner. The Owner hereby
indemnities and defends the Developer against any claims for unpaid fees or
costs associated with the Property or the Project incurred by or on behalf of
the Owner or the Developer as a result of any claim by any broker.
Section 6.2 - Confidentiality. The Owner, its partners, affiliates,
agents, servants and employees and the Developer, its affiliates, agents,
servants and employees hereby agree:
(a) To maintain in the strictest confidence the identity of the other
party; the contents of this Agreement; the negotiations between the parties on
the terms of this Agreement; and any of the Owner's proprietary information,
including, without limitation, architectural designs and plans, construction
plans and specifications and standards, financing sources, and other information
regarding the Project and the business affairs and operations of the Owner and
the Developer's proprietary information, including, without limitation,
financial information, projects, copies of leases, real estate appraisals, and
other information regarding the Project and the business affairs and operations
of the Developer which any of said parties obtain from the other party in the
course of negotiations for or performance of the transactions contemplated
hereby (the "Confidential Information");
11
12
(b) Not to disclose, without the other party's prior written consent
(except to the extent disclosure is required by applicable law or regulation),
any Confidential Information, except to such parties, agents, servants and
employees, bankers, including specifically the Lender, consultants and other
advisors to whom disclosure is necessary in order to effectuate the transactions
contemplated hereby; and
(c) To comply therewith for a period of two (2) years commencing on the
date of this Agreement.
Section 6.3 - Provision of Further Information. The Developer agrees to
supply complete financial information and any other data required in connection
with the construction or permanent financing for the Project and to execute, and
cause to execute, any and all documents which are required by the terms thereof.
Section 6.4 - Management Agreement. Provided there is no default
hereunder then existing, the Owner agrees that the Developer or its affiliate
shall have the right to manage the Project beginning approximately one hundred
twenty (120) days prior to completion pursuant to the terms of a Management
Agreement, substantially in the form attached hereto as Exhibit "F".
ARTICLE VII
Concluding Provisions
Section 7.1 - Entire Agreement. All prior understandings, letters of
intent, and agreements between the parties are merged in and superseded by this
Agreement (including all Exhibits hereto).
Section 7.2 - Representations. None of the parties shall be bound by
any promises, representations, or agreements except as herein expressly set
forth.
Section 7.3 - Amendments. This Agreement may not be amended, waived,
modified, altered or changed in any respect whatsoever except by a further
agreement, in writing, executed by each of the parties and consented to by the
Owner.
Section 7.4 - 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.
Section 7.5 - No Brokers. Each of the Owner and the Developer
represents and warrants 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; and each agrees to indemnify and hold and save 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.
Section 7.6 - Assignment. The Developer shall have no right to assign
its rights nor delegate its obligations under this Agreement to another entity
or person without the prior written consent of the Owner except that the
Developer shall have the right to assign this Agreement to,
12
13
merge with or consolidate with an "Affiliate" (defined herein as defined in the
Securities and Exchange Act of 1934 and the regulations thereunder) in
connection with a public offering, merger or transfer.
Section 7.7 - Notices, All notices which may be given to any of the
parties hereunder shall be in writing and shall be hand delivered or sent by
registered or certified mail, return receipt requested, or by Federal Express,
and postage prepaid as follows:
(a) In the event that notice is directed to the Owner, it shall be sent
to Tri Point Communities, L.P., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, or at such other address or
addresses the Owner shall from time to time designate by notice to the
Developer.
(b) In the event that notice is directed to the Developer, it shall be
sent to Capital Senior Development, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, at the same address; or at such
other address or addresses as the Developer shall from time-to-time designate by
notice to the Owner.
The effective date of any such notice shall be the earlier of actual receipt by
the addressee or three (3) days after such notice is properly deposited for
mailing.
Section 7.8 - Arbitration. Any dispute or controversy arising between
the parties involving the interpretation or application of any provisions of the
Agreement, or arising out of this Agreement, or concerning the construction of
the proposed Project or the furbishing thereof shall be submitted to and
determined by arbitration in accordance with the rules of the American
Arbitration Association then in effect.
Section 7.9 - 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.
Section 7.10 - Successors. This Agreement shall be binding upon the
parties hereto, their respective heirs, executors, administrators, successors,
and assigns.
Section 7.11 - Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
Section 7.12 - 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
this remaining portions so long as the material purposes of this Agreement can
be determined and effectuated.
Section 7.13 - Effective Date. This Agreement shall be deemed to be
effective as of the date set forth below.
13
14
Section 7.14 - No Offer. The delivery of an unexecuted copy of this
Agreement shall not be deemed an offer. No rights are to be conferred upon any
party until this Agreement has been executed and delivered to each party.
Section 7.15 - Governing Law. This Agreement shall be governed by the
laws of the State of Texas.
Section 7.16 - Control Over Other Agreement. In the event that any of
the terms or conditions set forth herein are inconsistent with or contrary to
any of the terms and conditions set forth in the Development and Turnkey
Services Agreement dated September 16, 1997 between the Owner and Capital Senior
Living Corporation, then the terms and conditions set forth herein shall
control.
Dated this 1st day of December, 1997 and executed under seal.
TRI POINT COMMUNITIES, L.P.
By: Capital Retirement Group, Inc., Its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
CAPITAL SENIOR DEVELOPMENT, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
--------------------------------------
14