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EXHIBIT 10.55
AMENDED AND RESTATED HOUSING MANAGEMENT AGREEMENT
This Amended and Restated Housing Management Agreement (the "Agreement") is made
this 24th day of January, 1997, by and between REHAB UNLIMITED 74, an Ohio
limited partnership ("Owner"), and BROAD STREET MANAGEMENT, INC., an Ohio
corporation ("Agent").
WHEREAS, Owner and Agent previously entered into that certain Housing Management
Agreement, dated as of May 1, 1992 (the "Original Agreement"); and
WHEREAS, Owner and Agent desire to amend and restate the Original Agreement to
reflect herein their agreements and understandings.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set
forth herein and of other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. APPOINTMENT AND ACCEPTANCE. The Owner appoints the Agent as
exclusive agent for the management of the property described in Section 2 of
this Agreement, and the Agent accepts the appointment, subject to the terms and
conditions set forth in this Agreement.
2. DESCRIPTION OF PROJECT. The property to be managed by the Agent
under this Agreement is known as Rehab Unlimited 74 consisting of the land,
buildings, and other improvements (the "Project"), described as follows:
Name: Rehab Unlimited 74
HUD Project No.: 043-35123
No. of dwelling units: 121
3. DEFINITIONS. As used in this Agreement:
A. "HUD" means the United States Department of Housing and Urban
Development.
B. "Mortgage" means that certain indenture of mortgage by and
between the Owner, as Mortgagor, and the Mortgagee, with respect to the Project,
which mortgage is insured by the United States Department of Housing and Urban
Development.
C. "Mortgagee" means any holder of the Mortgage.
D. "Parties" means the Owner and the Agent.
4. HUD REQUIREMENTS. The Project is subject to a Mortgage which is
insured by HUD under Section 221(d) of the National Housing Act, and the Owner
has entered into a Regulatory Agreement with HUD, whereby the Owner is obligated
to provide for management of the Project in a
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manner satisfactory to HUD. In addition, the Owner has entered into a Housing
Assistance Program (HAP) Contract with HUD. The Owner has furnished the Agent
with copies of the Regulatory Agreement and the Housing Assistance Payment (HAP)
Contract. In performing its duties under this Agreement, the Agent will comply
with all pertinent requirements of the Regulatory Agreement and the directives
of HUD. In the event that any instruction from the Owner is in contravention of
such requirements, the requirements of the Regulatory Agreement and the
directives of HUD will prevail.
All management fees will be computed and paid according to HUD requirements.
Notwithstanding any other provisions of this Agreement, HUD may terminate this
Agreement: (1) for failure to comply with the provisions of the Management
Certification or other good cause, thirty (30) days after HUD has mailed the
Owner and Agent a written notice of its desire to terminate this Agreement; or
(2) in the event of a default under the Mortgage, Note, Regulatory Agreement or
HAP Contract, immediately upon HUD's issuance of a notice of termination to
Owner and Agent. It is further understood and agreed that no liability will
attach to either of the Parties in the event of such termination. If HUD
terminates this Agreement, Owner will promptly make arrangements for providing
management satisfactory to HUD. In the event of any conflict between the
provisions of this Agreement and the rights and requirements of HUD, the rights
and requirements of HUD will prevail. Upon termination of this Agreement, Agent
will within thirty (30) days of the date of termination turn over to Owner all
of the Project's cash, trust accounts, investments and records. No "hold
harmless clause" of the type prohibited by HUD which exempts the Agent from all
liability for damages and injuries shall be enforceable.
5. BASIC INFORMATION. As soon as possible, the Owner will furnish the
Agent with a complete set of plans and specifications as finally approved by HUD
and copies of all guaranties and warranties pertinent to construction, fixtures,
and equipment. With the aid of this information, and inspection by competent
personnel, the Agent will thoroughly familiarize itself with the character,
location, construction, layout, plan, and operation of the Project, and
especially the electrical, heating, plumbing, and wherever installed, air
conditioning and ventilating systems, the elevators, and all other mechanical
equipment.
6. MARKETING. The Agent will carry out the marketing activities
observing all requirements of the Affirmative Marketing Plan or Marketing Plan,
as appropriate. Advertising expenses will be paid out of the Rental Agency
account as Project expenses.
7. RENTALS. The Agent will offer for rent and will rent the dwelling
units and other rental facilities and concessions in the Project. Incident
thereto, the following provisions will apply:
A. The Agent will follow the tenant selection policy giving
preference to low and moderate income families.
B. The Agent will show the premises to prospective tenants.
C. The Agent will take and process applications for rentals. If
an application is rejected, the applicant must be notified in writing and told
the reason for rejection, and the rejected application, with reason for
rejection noted thereon, will be kept on file for three (3) years. A current
list of prospective tenants will be maintained.
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D. The Agent will prepare all leases and any other rental
agreements and will prepare the leases to reflect the Owner as being the Lessor.
In executing the leases, the Agent will identify itself as Agent for the Owner.
The Owner's name will be clearly designated the Lessor. The terms of all leases
will comply with the pertinent provisions of the Regulatory Agreement and the
directives of HUD. Dwelling leases will be in a form approved by HUD, but
individual dwelling leases need not be submitted for the approval of HUD or the
Owner.
E. The Agent will, from time to time, prepare and submit to HUD
(or the contract administrator) for approval, all rental increase requests. The
Owner will furnish the Agent with rent schedules, as from time to time approved
by HUD, showing rents for dwelling units and other charges for facilities and
services. In no event will such contract rents and other charges be exceeded.
Eligibility for rents which are less than such contract rents, and the amount of
such lesser rents, will be determined in accordance with the Regulatory
Agreement and the directives of HUD.
F. The Agent will prepare and verify eligibility certificates
and recertifications in accordance with the Regulatory Agreement and the
directives of HUD.
G. The Agent will negotiate any other rental agreements and/or
concession agreements, and will execute the same in the Owner's name,
identifying itself therein as Agent for the Owner. Commercial rents will not be
less than the minimums from time to time approved by Owner.
H. The Agent will collect, deposit, and disburse security
deposits, if required, in accordance with the terms of each tenant's lease.
Security deposits will be deposited by the Agent in an interest bearing account
separate from all other accounts and funds, with a bank or other financial
institution selected by the Agent.
The institution will be one whose deposits are insured by an
agency of the United States Government, and if required by state law or federal
regulation, a pro-rata share of interest earned will be credited to each
tenant's security deposit. This account will be carried in the Agent's name and
designated of record as "Rehab Unlimited 74 Security Deposit Account".
8. COLLECTION OF RENTS AND OTHER RECEIPTS. The Agent will collect
when due all rents, charges and other amounts receivable on the Owner's account
in connection with the management and operation of the Project. Such receipts
(except for tenants' security deposits, which will be handled as specified in
Subsection 7H above) will be deposited in an account which may be maintained by
Agent as apart of a cash concentration system provided that the funds of the
Premises are separately accounted for and will not exceed a level fully insured
by the FDIC and in accordance with applicable HUD requirements. Such depository
shall be selected by the Agent. However, Agent shall not be held liable in the
event of bankruptcy or failure of a depository. This account will be carried in
the Agent's name and designated of record as "Rehab Unlimited 74 Rental Agency
Account".
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9. ENFORCEMENT OF LEASES. The Agent will attempt to secure full
compliance by each tenant with the terms of the lease. Voluntary compliance
will be emphasized and the Agent, utilizing the services of voluntary social
services when available, will counsel tenants and make referrals to community
agencies in cases of financial hardship or under other circumstances deemed
appropriate by the Agent, to the end that involuntary termination of tenancies
may be avoided to the maximum extent consistent with sound management of the
Project. Nevertheless, the Agent may lawfully terminate any tenancy when, in the
Agent's judgment, sufficient cause (including but not limited to nonpayment of
rent) for such termination occurs under the terms of the tenant's lease. For
this purpose, the Agent is authorized to consult with Agent's legal counsel to
bring actions for eviction and to execute notices to vacate and judicial
pleadings incident to such actions; provided, however, that the Agent will keep
the Owner informed of such actions and will follow such instructions as the
Owner may prescribe for the conduct of any such action. Attorney's fees and
other necessary costs incurred in connection with such actions will be paid out
of the Rental Agency Account as Project expenses.
10. MAINTENANCE AND REPAIR. Subject to the availability of necessary
funds in the Rental Agency Account, the Agent will cause the Project to be
maintained and repaired in accordance with all local codes and in a condition at
all times acceptable to the Owner and HUD, including but not limited to
cleaning, painting, decorating, plumbing, carpentry, grounds care, and such
other maintenance and repair work as may be necessary, subject to any reasonable
limitations imposed by the Owner in addition to those contained herein.
Incident thereto, the following provisions will apply:
A. Special attention will be given to preventive maintenance,
and to the greatest extent feasible, the services of regular maintenance
employees will be used.
B. The Agent will contract with qualified independent
contractors (including identity of interest contractors) for extraordinary
maintenance repairs beyond the capability of regular maintenance employees.
C. The Agent will systematically and promptly receive and
investigate all service requests from tenants, take such action thereon as may
be justified, and will keep records of the same. Emergency requests will be
received and serviced within a reasonable period of time. Complaints of a
serious nature will be reported to the Owner after investigation.
D. The Agent is authorized to purchase all materials, equipment,
tools, appliances, supplies and services necessary to proper maintenance and
repair.
E. Notwithstanding any of the foregoing provisions, prior
approval of the Owner will be required for any expenditure exceeding Ten
Thousand Dollars ($ 10,000) in any one instance for labor, materials, or
otherwise in connection with maintenance and repair of the Project except for
recurring expenses (and/or specifically identified items) within the limits of
the operating budget, emergency repairs involving manifest danger to persons or
property, or required to avoid suspension of any necessary service to the
Project. In the latter event, Agent will inform Owner of the facts as promptly
as possible.
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11. UTILITIES AND SERVICES. In accordance with the operating budget,
Agent will make arrangements for all utilities and services including, without
limitation, water, electricity, gas, fuel oil, sewage and trash disposal, vermin
extermination, decorating, laundry facilities (if applicable), and telephone
service. The Agent will enter and execute such contracts as may be necessary to
secure such utilities and services.
12. EMPLOYEES. The Operating Budget and job description prescribe the
number, qualifications and duties of the personnel to be regularly employed in
the management of the Project, including but not limited to, maintenance,
bookkeeping, clerical, and other managerial employees. All such personnel will
be employees of the Agent or an affiliate of the Agent, and will be hired, paid,
supervised, and discharged by the Agent or an affiliate of the Agent, subject to
the following conditions:
A. The compensation (including fringe benefits) of all
employees will be as prescribed in the Operating Budget and consistent with past
practices.
B. The Owner will reimburse the Agent for compensation
(including fringe benefits) payable to all of the above-mentioned employees, as
prescribed in the Operating Budget and consistent with past practices, and for
all local, state and Federal taxes and assessments (including but not limited to
Social Security taxes, unemployment insurance, and ▇▇▇▇▇▇▇'▇ compensation
insurance) incident to the employment of such personnel. The Agent will perform
the services of bookkeeping and payroll administration on behalf of the Owner
pursuant to the Accounting Costs Reimbursement Agreement, dated as of December
1, 1996, between Owner and Agent. Such reimbursements will be paid out of the
Rental Agency Account and will be treated as Project expenses.
C. All actions by the Agent in the areas of personnel,
employment, or labor relations are made in the Owner's behalf.
D. It is a policy of the Agent to offer equal opportunity
employment to all qualified employees and all applicants for employment, without
regard to race, color, creed, sex, age, handicap, national origin, marital
status or veteran status.
13. DISBURSEMENTS FROM RENTAL AGENCY ACCOUNT.
A. From the funds collected and deposited by the Agent in the
Rental Agency Account pursuant to Section 8 above, the Agent will make the
following disbursements promptly when payable:
(1) Reimbursement to the Agent for compensation payable to
the employees specified in Subsection 12A and B above, and for the taxes and
assessments payable to local, state, and Federal governments in connection with
the employment of such personnel.
(2) All sums otherwise due and payable by the Owner as
expenses of the Project authorized to be incurred by the Agent under the terms
of this
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Agreement, including compensation payable to the Agent, pursuant to Section 22
below, for its services hereunder.
(3) The single aggregate payment required to be made monthly
by the Owner to the Mortgagee, including the amounts due under the Mortgage for
principal amortization, interest, mortgage insurance premium, ground rents,
taxes and assessments, fire and other hazard insurance premiums, and the amount
specified in the Regulatory Agreement for allocation to the Reserve for
Replacements.
B. Except for the disbursements referenced in 13A above, funds
will be distributed or transferred from the Rental Agency Account only as the
Owner may from time to time direct in writing.
C. In the event that the balance in the Rental Agency Account is,
or is expected to become, at any time insufficient to pay disbursements due and
payable under Subsection 13A above, the Agent will inform the Owner of that fact
sufficiently in advance, and the Owner will then inform the Agent as to the
source of sufficient funds to cover the deficiency. In no event will the Agent
be required to advance any monies to or on behalf of Owner or to use its own
funds to pay such disbursements.
14. BUDGETS. Annual operating budgets for the Project will be as
approved by the Owner, such approval not to be unreasonably withheld,
conditioned or delayed. Except as permitted under Subsection 10E above, annual
disbursements for each type of operating expenses itemized in the budget will
not exceed by more than ten percent (10%) the amount per summary line item
authorized by the approved budget without consent of the Owner. The Agent will
prepare a recommended operating budget for each fiscal year beginning during the
term of this Agreement, and will submit the same to the Owner at least thirty
(30) days before the beginning of the fiscal year. The Owner will discuss
revisions, if any, with Agent and approve such budget in a form satisfactory to
Agent. Agent will keep the Owner informed of any anticipated deviation from the
receipts or disbursements stated in the approved budget.
15. RECORDS AND REPORTS. In addition to any other provisions of this
Agreement or the Management Profile, the Agent will have the following
responsibilities with respect to records and reports:
A. The Agent will establish and maintain a comprehensive system
of records, books, and accounts in a manner conforming to the directives of HUD
and otherwise reasonably satisfactory to the Owner. All records, books, and
accounts will be subject to examination at reasonable hours by any authorized
representative of the Owner.
B. With respect to each fiscal year ending during the term of
this Agreement, the Agent will cause an annual financial report to be prepared
by a Certified Public Accountant or other person acceptable to the Owner and
HUD, based upon the preparer's examination of books and records of the Owner and
the Agent. The report will be prepared in accordance with the directives of
HUD, will be
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certified by the preparer and the Agent, and will be submitted to the Owner
within sixty (60) days after the end of the fiscal year for the Owner's further
certification and submission to HUD and the Mortgagee. Compensation for the
preparer's services will be paid out of the Rental Agency Account as an expense
of the Project.
C. The Agent will prepare a monthly report comparing actual and
budgeted figures for receipts and disbursements, and will submit such report to
the Owner within twenty (20) days after the end of the month covered.
D. The Agent will furnish such other information as may be
requested by the Owner or HUD from time to time with respect to the financial,
physical, or operational condition of the Project.
E. The Agent will prepare on a monthly basis Form 52670
(Housing Owner's Certification and Application for Housing Assistance Payments),
Form 52670A, Part 1 (Schedule of Tenant Assistance Payments due), Form 50059
(Certification and Recertification of Tenant Eligibility), and Form 50059A
(Worksheet for Certification and Recertification of Tenant Eligibility), and
will submit the same to the appropriate State Office of HUD per schedule. HUD
Form 52684 will be submitted annually. Such payments received in accordance
with the reporting requirements will be deposited in the Rental Agency Account.
F. By the twentieth (20th) day of each month, the Agent will
furnish the Owner with an itemized list of all delinquent accounts, including
rental accounts, as of the tenth (10th) day of the same month.
G. By the twentieth (20th) day of each month, the Agent will
furnish the Owner a statement of receipts and disbursements during the previous
month and with a schedule of accounts receivable and payable, and reconciled
bank statement for the Rental Agency Account and Security Deposit Account as of
the end of the previous month.
H. If, after the Project reaches sustaining (95%) occupancy,
the rental collections plus HUD subsidy fall below operating expenses for a
sustained period of sixty (60) days, the Agent will immediately send written
notification of the same to the appropriate State Office of HUD.
I. [Intentionally left blank.]
16. FIDELITY BOND. The Agent will furnish, at the Owner's expense, a
fidelity bond in the principal sum of Thirty-Nine Thousand One Hundred Forty-Six
Dollars ($39,146), which is at least equal to the gross potential income for two
months and is conditioned to protect the Owner, HUD and the Mortgagee against
misappropriation of Project funds by the Agent and its employees. The other
terms and conditions of the bond, and the surety thereon, will be subject to the
approval of the Owner and HUD.
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17. BIDS AND PURCHASE DISCOUNTS, REBATES OR COMMISSION. The Owner and
Agent agree to attempt to obtain contract materials, supplies and services at
the lowest possible cost and on the terms most advantageous to the Project and
to secure and credit to the project all discounts, rebates or commissions
obtainable with respect to purchases, service contracts and other transactions
on behalf of the Project. The Owner and the Agent agree that all goods and
services purchased from individuals or companies having an identity-of-interest
with the Owner or Agent shall be purchased at costs not in excess of those that
would be incurred in making arms-length purchases on the open market.
The Agent shall solicit written cost estimates (i.e., bids) from at
least three contractors or suppliers for any work item which the Owner or HUD
estimates will cost $5,000 or more and for any contract or ongoing supply or
service which is estimated to exceed $10,000 per year. The Agent agrees to
accept the bid which represents the lowest price taking into consideration the
bidder's reputation for quality of workmanship or materials and timely
performance, and the time frame within which the service or goods are needed.
For any contract or ongoing supply of service obtainable from more than one
source and estimated to cost less than $5,000, the Agent shall solicit verbal or
written cost estimates as necessary to assure that the project is obtaining
services, supplies and purchases at the lowest possible cost. The Agent must
make a written record of any verbal estimate obtained. Copies of all required
bids and documentation of all other written or verbal cost comparisons made by
the Agent shall be made part of the project's records and shall be retained for
three years from the date the work was completed. This documentation shall be
subject to inspection by HUD the Agent agrees to submit such documentation upon
request.
The Agent further agrees to include the following clause in any
contract entered into with an identity-of-interest firm for provision of goods
or services to the Project, the cost of which services are to be paid from
Project funds: "Upon request by the Project Owner or the Management Agent or
HUD, (name of contractor or supplier) will make available to HUD at a reasonable
time and place (name of contractor or supplier)'s records which relate to goods
or services provided to the project." The Agent agrees to request such records
from the contractor or supplier within seven (7) days of receipt of a written
request from HUD or his/her designee.
The Agent agrees to make available to HUD all records of the
Agent's management company and its identity-of-interest company(ies), if any,
which relate to the provision of goods or services to the project whenever
project funds have been used to pay for such goods and/or services (other than
management services).
The Owner must approve all contracts that will exceed, over a
period of time, the Ten Thousand Dollars ($10,000) limitation imposed in the
preceding Subsection 10E unless such item was specifically approved as part of
the annual operating budget.
18. TENANT-MANAGEMENT RELATIONS. The Agent will encourage and assist
residents of the Project in forming and maintaining a representative
organization to promote their common interests, and will maintain good-faith
communications with such organization to the end that problems affecting the
Project and its residents may be avoided or solved on the basis of mutual self-
interest.
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19. OWNER'S INSURANCE REQUIREMENTS. Owner shall place and maintain in
force all forms of insurance required by law with respect to the Project,
including those specified in this Section 19. Owner may request Agent to obtain
insurance for Owner and on Owner's behalf, in which case Agent shall obtain and
maintain in force such insurance and any other insurance as may be requested by
Owner. Agent shall duly and punctually pay from the Rental Agency Account all
premiums with respect to Owner's insurance.
A. All insurance coverage shall be placed with a carrier rated
"A-" "VI" or better by A.M. Best & Co and licensed to do business in the
jurisdiction in which the Project is located, in such amounts and with such
named and additional insureds and loss payees as may be specified by Owner, and
shall include the following:
(1) All-risk property damage insurance, including the
following: (1) replacement cost for buildings and contents comprising the
Project, (2) at the request of Owner, flood and earthquake coverage and, if any
portion of the Project is located within an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and is eligible for insurance under applicable federal or state
programs, a flood insurance policy that meets the requirements of the current
guidelines of the Federal Insurance Administrator; (3) Loss of Rental Income
coverage for a minimum of twelve (12) months; (4) comprehensive boiler and
machinery insurance coverage, if applicable. With the prior written consent of
Owner, such coverage may be part of a blanket policy, so long as, except for the
perils of flood and earthquake, the limits provided are not shared with other
entities covered under such blanket policy and any shared limit of coverage is
not subject to an annual, aggregate limit.
(2) Commercial general liability insurance coverage,
including (1) contractual, completed operations and host liquor liability in the
amount of $1,000,000 and (2) combined single limit for bodily injury, property
damage and personal injury per occurrence per location with a $2,000,000 annual
aggregate.
(3) Automobile liability insurance coverage for owned, hired
and non-owned vehicles, in an amount not less than $1,000,000 combined, single
limit for bodily injury and property damage.
(4) Umbrella or excess liability coverage for $15,000,000,
combined single limit for bodily injury, property damage and personal injury.
B. All policies of insurance shall name Owner as the named
insured and will list any Mortgagee, any general partner (and the officer(s)
thereof) of Owner and Agent and its employees as additional insureds as their
interests may appear.
C. If Owner requests that Agent obtain Owner's insurance
coverage, Agent shall provide Owner with certificates of insurance (or binders
of insurance pending the receipt of the required insurance policies) evidencing
the insurance coverages required by Owner under this Agreement promptly
following Agent's receipt thereof. If Owner obtains its insurance coverage
directly, then Owner
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shall provide Agent promptly following Owner's receipt thereof with such
certificates of insurance (or binders of insurance pending the receipt of the
required insurance policies).
(1) Each policy evidencing any insurance coverage required to
be maintained by Owner under this Agreement shall provide that Agent be given
not less than thirty (30) days' prior written notice of cancellation, non-
renewal or material change in the policy. All policies shall contain a waiver
of subrogation in favor of the Agent and its employees.
(2) Owner agrees to provide Agent with certified copies of
any insurance policy obtained by Owner in accordance with this subparagraph 20A
promptly after Agent's written request therefor.
20. COMPLIANCE WITH GOVERNMENTAL ORDERS. The Agent, acting on behalf
of the Owner, will take such actions as may be necessary to comply promptly with
any and all governmental orders or other requirements affecting the Project,
whether imposed by Federal, state, county or municipal authority, subject,
however, to the limitation stated in Subsection 10E above, with respect to
repairs. Nevertheless, the Agent will take no such action so long as the Owner
is contesting, or has affirmed its intention to contest, any such order or
requirements. The Agent will notify the Owner in writing of all notices of such
orders or other requirements within seventy-two (72) hours from the time of
their receipt.
21. NON-DISCRIMINATION. The Agent, acting on behalf of the Owner, in
the performance of its obligations under this Agreement, will comply with the
provisions of any Federal, state, or local law prohibiting discrimination in
housing on the grounds of race, color, creed, sex or national origin, including
Title VI of the Civil Rights Act of 1964 (Public Law 88-352, 78 State. 241), all
requirements imposed by or pursuant to the Regulations of HUD (24 CFR, Subtitle
A, Part 1) issued pursuant to that Title, regulations issued pursuant to
Executive Order 11063, and Title VIII of the 1968 Civil Rights Act.
22. AGENT'S COMPENSATION. The Agent will be compensated for its
services under this Agreement by monthly fees, to be paid out of the Rental
Agency Account and treated as Project expenses. Such fees will be estimated and
paid in advance on the first day of each month consistent with past practices
beginning with the first day of the month of the Agreement and ending on the
first day of the month after the last month of the Agreement, with each such
monthly payment being reconciled at the end of each month with the actual fees
earned in each such month by the Agent. Any excess fee payments will be repaid
by the Agent on or before the tenth day of the following month and any deficit
in fees will be paid by the Owner on or before the tenth day of the following
month. Each such monthly fee will be a sum equal to seven and thirty-nine one-
hundredths percent (7.39%) of gross collections received during the preceding
month for residential rents, commercial rents and fees from concessionaires, as
defined in HUD Handbook 4381.5 REV-1, as revised from time-to-time. Special
fees, if any, will be payable as set forth in the approved management
certification.
Accounting/bookkeeping, facilities and computer fees shall be paid monthly to
the Agent pursuant to the Amended and Restated Accounting Services Agreement,
dated as of January 24, 1997, between Owner and Agent, and the Amended and
Restated Facilities Rental Agreement, dated as of January
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24, 1997, between Owner and Agent. Such fees shall be considered a Project
expense as approved by HUD.
Subject to HUD regulations, the payment of the management fee and all fees,
charges, reimbursements and consideration of any kind or nature due to Agent
under this Agreement shall in no event be subordinate to any other debt or
obligation of Owner including without limitation any mortgage loan encumbering
the Project.
23. TERM OF AGREEMENT. This Agreement shall be in effect beginning on
the 1st day of January, 1997, and shall be in full force and effect until
terminated under the terms and conditions specified herein:
A. The term of this Agreement shall commence on the date hereof
and terminate on December 31, 1997; provided, however, that such term shall
automatically be extended for additional one (1)-year periods unless written
notice of termination is given by the terminating party on or before January 1
of any such extended period.
B. In the event that a petition in bankruptcy is filed by or
against either of the Parties, or in the event that either makes an assignment
for the benefit of creditors or takes advantage of any insolvency act, the other
party may terminate this Agreement without notice to the other.
C. This Agreement may be terminated by the Owner upon thirty
(30) days advance written notice, upon (i) a sale of the Project to an
individual or entity other than an affiliate of Owner or (ii) transfer of all of
the partnership interests in the Owner to an individual or entity other than an
affiliate of Owner.
D. It is expressly understood and agreed by and between the
Parties that, as set forth in Section 4 above, HUD has the right to terminate
this Agreement for good cause on thirty (30) days advance written notice to each
of the Parties, and that in the event of a default by the Owner pursuant to the
obligations incurred under the Mortgage or the Regulatory Agreement, HUD may
terminate this Agreement immediately upon the issuance of a notice of
cancellation to each of the Parties.
E. Upon termination, the Agent will submit to the Owner any
financial statements required by HUD, and after the Parties have accounted to
each other with respect to all matters outstanding as of the date of
termination, the Owner will furnish the Agent security, in form and principal
amount satisfactory to the Agent, against any obligations or liabilities which
the Agent may properly have incurred on behalf of the Owner hereunder.
F. If HUD terminates the Agreement, the Owner will promptly
make arrangements for providing management satisfactory to HUD.
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G. The Agent will turn over to the Owner all of the Project's
cash, trust accounts, investments and records within thirty (30) days of the
date this Agreement is terminated and the provisions of Sections 4 and 24D have
been satisfied.
H. This Agreement may be terminated by the non-breaching party
thirty (30) days after the receipt of notice by either Party to the other
specifying in detail a material breach of this Agreement, if such breach has not
been cured within said thirty (30) day period; or if such breach is of a nature
that it cannot be cured within said thirty (30) day period but can be cured
within a reasonable time thereafter, if efforts to cure such breach have not
commenced and/or such efforts are not proceeding and being continued diligently
both during and after such thirty (30) day period prior to the breach being
cured. The breach of any obligation of either party hereunder to pay any monies
to the other party under the terms of this Agreement shall be deemed to be
curable within thirty (30) days.
I. The Owner will give HUD prompt written notice of any
termination of this Agreement if terminated by Owner, other than that directed
by HUD.
24. SAVE HARMLESS. Owner shall indemnify, defend and save harmless
Agent and its officers, directors, employees, agents, affiliates, contractors
and each of them from all loss, damage, cost, expense (including reasonable
attorneys' fees and costs), liability or claims for (a) personal injury or
property damage incurred or occurring in, on or about the Project, (b) Agent's
performance of services that are within the scope of Agent's authority under
this Agreement or when Agent is acting under the express direction of the Owner
and (c) any breach by Owner of Owner's representations, warranties or covenants
set forth in this Agreement unless attributed to the gross negligence or wilful
misconduct of the Agent. Agent shall indemnify, defend and save harmless Owner
and its officers, directors, employees, agents, affiliates, contractors and each
of them from all loss, damage, cost, expense (including reasonable attorneys'
fees and costs), liability or claims attributable to Agent's gross negligence or
wilful misconduct. Such indemnification shall not extend to situations which
are attributable to the gross negligence or intentional misconduct of the Owner.
25. AGENT ASSUMES NO LIABILITY. Agent assumes no liability whatsoever
for any acts or omissions of Owner, or any previous owners of the Project, or
any previous management or other agent of either. Agent assumes no liability of
any failure of or default by any tenant in the payment of any rent or other
charges due Owner or in the performance of any obligations owed by any tenant to
Owner pursuant to any lease or otherwise. Nor does Agent assume any liability
for previously unknown violations of environmental or other regulations which
may become known during the period this Agreement is in effect. Any such
regulatory violations or hazards discovered by Agent shall be brought to the
attention of Owner in writing, and Owner shall then promptly notify Agent
following Owner's due investigation of such violation or hazard of the
appropriate course of action to be undertaken by Owner to cure such violation or
hazard.
26. INTERPRETATIVE PROVISIONS.
A. At all times, this Agreement will be subject and subordinate
to all rights of HUD, and will inure to the benefit of and constitute a binding
obligation upon the Parties and their respective successors and assigns.
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B. This Agreement constitutes the entire agreement between the
Owner and the Agent with respect to the management and operation of the Project,
and no change will be valid, unless made by supplemental written agreement,
executed and approved by the Parties.
C. This Agreement has been executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute the same instrument, and which may be introduced in evidence or used
for any other purpose without production of any of the other counterparts.
27. REAL PROPERTY ASSESSMENTS. Agent, on behalf of the Project, will
engage such consultant or consultants, as the Agent deems necessary and
appropriate, for the purpose of appealing any State or local real property tax
assessments relating to the Project's real property. The cost and expense of
any such consultant or consultants shall be an expense of the Project and shall
be paid from the Rental Agency Account, as provided in Section 13 hereof.
28. NOTICES.
All notices or approvals required to be given hereunder shall be
deemed to have been duly given (i) three (3) days after the date of mailing, if
sent by registered or certified mail, postage prepaid, with return receipt
requested; (ii) when delivered, if delivered personally; (iii) when
transmitted, if sent by facsimile if a confirmation of transmission is produced
by the sending machine (and a copy of such facsimile is promptly sent by another
means specified in this section 28) ; or (iv) on the first business day
following the date of sending, if sent by overnight U.S. Postal Service mail or
other nationally recognized overnight courier service, in each case to the
parties at the following address (or such other address as a party shall have
specified by notice given in accordance with this Section 28):
To Owner:
Rehab Unlimited 74
c/o Medallion-RU 74, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
With copies to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Crabbe, Brown, Jones, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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To Agent:
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Management, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Regional Vice-President
With copies to:
▇/▇ ▇▇▇-▇▇ ▇▇, ▇▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Operating Officer
(with a copy to the same address directed to the Office of General Counsel)
IN WITNESS WHEREOF, the Parties (by their duly authorized officers) have
executed this Agreement on the date above written.
OWNER:
REHAB UNLIMITED 74, an Ohio limited partnership
By: MEDALLION-RU 74, INC., an Ohio corporation, General Partner
By:
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Witness:
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AGENT:
BROAD STREET MANAGEMENT, INC., an Ohio corporation
By:
----------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Executive Vice President
Witness: ▇▇▇▇▇▇▇ ▇▇▇▇▇
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