<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
-----------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-8914
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UNIVERSITY REAL ESTATE PARTNERSHIP V
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-3240567
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Crescent Court, Suite 1300, Dallas, Texas 75201
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(Address of principal executive offices) (Zip code)
(214) 871-3933
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(Registrant's telephone number, including area code)
------------------------------------------------------------------------------
(Former address, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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1
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UNIVERSITY REAL ESTATE PARTNERSHIP V
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
Page
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<S> <C>
Part I - Financial Information
Item 1 - Condensed Financial Statements:
(a) Condensed Balance Sheets as of March 31, 1995
and December 31, 1994 3
(b) Condensed Statements of Operations for the three months
ended March 31, 1995 and 1994 4
(c) Condensed Statements of Cash Flows for the three months
ended March 31, 1995 and 1994 5
(d) Notes to Condensed Financial Statements 7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K 10
Signatures (pursuant to General Instruction E) 11
All other items called for by the instructions are omitted as they are
either inapplicable, not required, or the information is included in
the Condensed Financial Statements or Notes thereto.
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
- ------- ------------------------------
(a) UNIVERSITY REAL ESTATE PARTNERSHIP V
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31,
1995 December 31,
(Unaudited) 1994
------------ -------------
<S> <C> <C>
ASSETS
- ------
Real estate investments
Land $ 5,255,247 $ 5,255,247
Buildings and improvements 13,616,510 13,579,798
----------- -----------
18,871,757 18,835,045
Less: Accumulated depreciation and
amortization (7,150,558) (7,035,146)
----------- -----------
11,721,199 11,799,899
----------- -----------
Note receivable 750,000 750,000
Cash and cash equivalents (including $19,770 and $21,695
for security deposits at March 31, 1995 and
December 31, 1994, respectively) 119,812 197,283
Accounts receivable, net of allowance for doubtful accounts of
$72,740 at March 31, 1995 and December 31, 1994 78,308 84,929
Deferred borrowing costs, net of accumulated amortization
of $69,135 and $65,895 at March 31, 1995 and
December 31, 1994, respectively 125,307 128,547
Prepaid expenses and other assets 275,677 283,287
Repossessed real estate held for resale 1,422,391 1,422,391
----------- -----------
$14,492,694 $14,666,336
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Mortgage notes payable, net of discounts $ 9,641,236 $ 9,453,587
Note payable to Southmark affiliate 1,192,789 1,086,554
Accrued mortgage interest 9,209 253,110
Accrued property taxes 259,093 279,892
Accounts payable and accrued expenses 90,881 85,951
Accounts payable - affiliates - 20,894
Subordinated real estate commissions 549,218 549,218
Security deposits 36,804 36,702
----------- -----------
11,779,230 11,765,908
----------- -----------
Partners' equity (deficit)
Limited Partners - 50,000 units authorized; 34,453 units
issued and outstanding (17,733 Income units and 16,720
Growth/Shelter units) 3,237,634 3,422,728
General Partner (524,170) (522,300)
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2,713,464 2,900,428
----------- -----------
$14,492,694 $14,666,336
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
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(b) UNIVERSITY REAL ESTATE PARTNERSHIP V
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1995 1994
---------- ----------
<S> <C> <C>
Revenues:
Rental income $ 603,762 $ 566,327
Interest 128,626 92,279
--------- ---------
Total revenues 732,388 658,606
--------- ---------
Expenses:
Interest 335,727 258,509
Depreciation and amortization 118,456 111,241
Property taxes 39,185 37,805
Other property operations 297,466 259,467
General and administrative 128,518 129,823
--------- ---------
Total expenses 919,352 796,845
--------- ---------
Net loss $(186,964) $(138,239)
========= =========
Net loss allocated to general partners $ (1,870) $ (1,382)
Net loss allocated to limited partners (185,094) (136,857)
--------- ---------
Net loss $(186,964) $(138,239)
========= =========
Net loss per limited partnership unit $ (5.37) $ (3.97)
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
4
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(c) UNIVERSITY REAL ESTATE PARTNERSHIP V
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants $ 610,485 $ 497,819
Cash paid to suppliers and affiliates (428,708) (401,778)
Interest received 128,626 76,996
Interest paid (278,339) (249,397)
Property taxes paid (10,471) (37,805)
--------- ---------
Net cash provided by (used in) operating activities 21,593 (114,165)
--------- ---------
Cash flows from investing activities:
Additions to real estate investments (36,712) (10,677)
--------- ---------
Cash flows from financing activities:
Principal payments on mortgage notes payable (62,352) (120,901)
--------- ---------
Net decrease in cash and cash equivalents (77,471) (245,743)
Cash and cash equivalents at beginning of period 197,283 474,483
--------- ---------
Cash and cash equivalents at end of period $ 119,812 $ 228,740
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
5
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UNIVERSITY REAL ESTATE PARTNERSHIP V
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash (Used in) Provided by
Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1995 1994
---------- ----------
<S> <C> <C>
Net loss $(186,964) $(138,239)
--------- ---------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 118,456 111,241
Amortization of discounts on mortgage notes payable - 9,112
Amortization of deferred borrowing costs 3,242
Interest and fees added to note payable to Southmark affiliate 106,235 -
Changes in assets and liabilities:
Accounts receivable 6,621 (70,991)
Prepaid expenses and other assets 4,565 45,484
Accounts payable and accrued expenses 13,605 38,440
Accounts payable to affiliates (20,894) (96,412)
Accrued mortgage interest (52,089) -
Accrued property taxes 28,714 -
Security deposits 102 (12,800)
--------- ---------
Total adjustments 208,557 24,074
--------- ---------
Net cash provided by (used in) operating activities $ 21,593 $(114,165)
========= =========
</TABLE>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
On March 31, 1995, the Partnership converted $250,000 of accrued liabilities
into a note payable.
See accompanying notes to condensed financial statements.
6
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UNIVERSITY REAL ESTATE PARTNERSHIP V
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1995 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1995. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Partnership's annual report on
Form 10-K for the year ended December 31, 1994. The December 31, 1994 condensed
balance sheet was derived from audited numbers.
Certain reclassifications have been made to the 1994 balances to conform to the
1995 presentation.
NOTE 2 - TRANSACTIONS WITH AFFILIATES
- -------------------------------------
The general partner of the Partnership is University Advisory Company ("UAC" or
the "General Partner"), a California general partnership. Southmark Commercial
Management, Inc., a wholly-owned subsidiary of Southmark Corporation
("Southmark"), and Southmark Investors, Inc. a second-tier subsidiary of
Southmark, are the two general partners of UAC. On March 9, 1993, Southmark and
several of its affiliates (including the General Partner) entered into an asset
purchase agreement with SHL Acquisition Corp. III, a Texas corporation, and its
permitted assigns (collectively "SHL") to acquire various general and limited
partnership interests, among other things, owned by Southmark and its
affiliates. On December 16, 1993, SHL entered into an Assignment of Rights and
Option Agreement with Hampton Realty Partners, L.P. ("Hampton"), a Texas limited
partnership, whereby Hampton acquired the right to purchase the option assets,
among other things, subject to the approval of the Limited Partners. On
December 30, 1994, Hampton entered into an Assignment and Assumption Agreement
with JKD Financial Management, Inc. ("JKD"), a Texas corporation, whereby, among
other things, JKD obtained the right to acquire Hampton's right to acquire the
general partner interest in the Partnership. JKD currently oversees the
management of the Partnership.
NOTE 3 - MODIFICATION OF GLASSHOUSE SQUARE MORTGAGES PAYABLE
- ------------------------------------------------------------
On January 17, 1995, the lender filed a notice of default in San Diego County
related to the Glasshouse Square mortgages payable. On March 27, 1995, the
mortgages were modified and a forbearance agreement was executed whereby the
lender agreed to discontinue foreclosure proceedings. The first lien mortgage
is payable in varying monthly installments of principal and interest, bearing
interest at 9.5% per annum and maturing in December 2000. The second lien
mortgage payable requires monthly interest only payments in the amount of
$6,595, bearing interest at 11% per annum and maturing in December 2000.
Principal balances for the first and second lien mortgages as of March 31, 1995,
were $7,314,712 and $1,492,431, respectively. In addition to the mortgage
modifications and forbearance agreement, on March 27, 1995, the lender granted
the Partnership a line of credit for the maximum amount of $400,000 bearing
interest at 9.5% per annum payable in full on December 1, 2000. The line of
credit is restricted to Glasshouse Square for the use of mortgage payment
shortfalls, tenant improvements, leasing commissions, and a monument sign. The
line of credit is secured by a deed of trust. As of March 31, 1995, the
Partnership has not requested any funds against the line of credit.
NOTE 4 - NOTE PAYABLE
- ---------------------
On March 31, 1995, the Partnership executed a note payable secured by the
Washington Towne Apartments for a principal amount of $250,000, bearing interest
at 11.5% per annum with one payment of principal and interest in the amount of
$2,476 due May 1, 1995 and all remaining outstanding principal and accrued
interest originally due and payable June 1, 1995. The bank extended the
maturity date and on September 13, 1995, the Partnership paid all outstanding
principal and accrued interest as a result of the refinancing of the Washington
Towne Apartments.
7
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NOTE 5 - SUBSEQUENT EVENTS
- --------------------------
Glasshouse Square Major Tenant
- ------------------------------
During 1995, Silo California, a major tenant at Glasshouse Square, ceased retail
operations. As of the date hereof, the Partnership anticipates possible
litigation when and if Silo California defaults on the monthly rental payments
throughout the term of the lease.
Sale of the Bank of San Pedro Office Building
- ---------------------------------------------
On July 20, 1995, the Partnership sold the Bank of San Pedro Office Building for
$1,350,000. The Partnership received partial consideration from the sale in the
form of a note receivable for $350,000, bearing interest at 9% per annum with
interest only payments due monthly, secured by a second lien deed of trust on
the Bank of San Pedro Office Building, maturing on July 20, 1998. On the date
of sale, all remaining principal and accrued interest due on the promissory note
payable to Southmark was paid.
Sale of the Las Oficinas Note Receivable
- ----------------------------------------
On April 7, 1995, the Las Oficinas note receivable for $1,100,000 was sold to a
third party for $750,000. This valuation loss was reflected as of the
modification date.
Maturity and Refinance of the Mortgage Note Payable for Washington Towne
- ------------------------------------------------------------------------
Apartments
- ----------
The mortgage payable on the Washington Towne Apartments matured in June 1995.
In September 1995, the Partnership obtained a mortgage loan payable in the
amount of $1,750,000 from a new lender. In order to preserve the Partnership's
ownership interest in the Washington Towne Apartments and in order to satisfy
the new lender's structural requirements with respect to the refinancing of the
mortgage note payable, the Partnership contributed the property on September 13,
1995 to an affiliated entity, Washington Towne Apartments, LLC, a Georgia
limited liability company. The Partnership is the owner of all the capital
stock of Washington Towne, Inc. The Partnership is the 99% member and
Washington Towne, Inc. is the 1% managing member of Washington Towne Apartments,
LLC. Therefore, the Partnership effectively retained a 100% interest in the
property. In connection with the contribution of the property to Washington
Towne Apartments, LLC, the lender provided sufficient funds to satisfy the
matured loan obligation and to provide for certain property improvements.
Property improvements are expected to be completed prior to the end of the first
quarter of 1996 and should significantly enhance the value of the property.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
The Partnership's net loss for the three months ended March 31, 1995 was
$186,964. The net loss for the same period in 1994 was $138,239. Total
revenues for the three months ended March 31, 1995 were $732,388 versus $658,606
for the same period in 1994. The increase in total revenues in 1995 is
primarily attributable to revenues earned from the Bank of San Pedro Office
Building that was repossessed in June 1994 and fees of $86,000 earned from
modification of the Las Oficinas note receivable.
Total expenses for the three months ended March 31, 1995 were $919,352 versus
$796,845 for the same period in 1994. The increase in expenses in 1995 is
primarily due to an increase in interest expenses due to extension fees incurred
on the Bank of San Pedro Office Building promissory note payable to Southmark.
Other property operations increased due to increased expenses as a result of the
Bank of San Pedro Office Building repossession during the second quarter of
1994.
During the three months ended March 31, 1995, the Partnership recorded a
decrease in cash of $77,471 versus a decrease of $245,743 for the same period in
1994. The statement of cash flows included an increase in cash provided by
operating activities of $135,758 primarily due to increased revenues earned from
the Bank of San Pedro Office Building that was repossessed in June 1994 and fees
of $86,000 earned from modification of the Las Oficinas note receivable. The
statement of cash flows included an increase in cash used in investing
activities of
8
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$26,035 due to increased property improvements in 1995. The statement of cash
flows included a decrease in cash used in financing activities of $58,549,
primarily due to less principal repayments of mortgage notes payable.
Should operations deteriorate and present resources not be adequate for current
needs, the Partnership has no outside lines of credit on which to draw for its
working capital needs. Neither the General Partner and its affiliates nor JKD
have any obligation to provide financial support to the Partnership.
Accordingly, continued operation of the Partnership is dependent on the
Partnership being able to generate cash from operations or sale of its remaining
operating properties or negotiated reductions in requirements related to
outstanding debt obligations.
Washington Towne Apartments - Atlanta, Georgia
- ----------------------------------------------
Average occupancy for the three months ended March 31, 1995 was 95% versus 87%
for the same period in 1994. Management is of the opinion that the increase in
occupancy is due to the property implementing an aggressive marketing campaign.
In September 1995, the Partnership obtained a mortgage loan payable in the
amount of $1,750,000 from a new lender. In order to preserve the Partnership's
ownership interest in the Washington Towne Apartments and in order to satisfy
the new lender's structural requirements with respect to the refinancing of the
mortgage note payable, the Partnership contributed the property on September 13,
1995 to an affiliated entity, Washington Towne Apartments, LLC, a Georgia
limited liability company. The Partnership is the owner of all the capital
stock of Washington Towne, Inc. The Partnership is the 99% member and
Washington Towne, Inc. is the 1% managing member of Washington Towne Apartments,
LLC. Therefore, the Partnership effectively retained a 100% interest in the
property. In connection with the contribution of the property to Washington
Towne Apartments, LLC, the lender provided sufficient funds to satisfy the
matured loan obligation and to provide for certain property improvements.
Property improvements are expected to be completed prior to the end of the first
quarter of 1996 and should significantly enhance the value of the property.
Glasshouse Square - San Diego, California
- -----------------------------------------
Average occupancy for the three months ended March 31, 1995 was 75% versus 74%
for the same period in 1994.
Management does not believe that the County of San Diego will take further
action regarding the alleged leaking of petroleum products from underground
storage tanks on the Garcia's Tract and part of Glasshouse Square parking lot.
Therefore, this situation should not have a material effect on the Partnership.
Bank of San Pedro Office Building - Long Beach, California
- ----------------------------------------------------------
On June 20, 1994, the Partnership repossessed the Bank of San Pedro Office
Building in lieu of foreclosure as a result of a Settlement Agreement between
the Partnership and the borrower. The land, buildings, and improvements were
recorded on the Partnership's books at $1,422,391. This is the net note
receivable balance plus the book value of certain assets and liabilities
acquired at the date of repossession, which approximated net realizable value.
The promissory note payable to Southmark on the property dated June 10, 1994 was
due in ninety days and had three ninety-day extensions. After repossession, the
Partnership immediately began the process of selling the property by soliciting
potential buyers. On July 20, 1995, the Bank of San Pedro was sold and all
outstanding principal and accrued interest on the note payable to Southmark was
paid.
9
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
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<S> <C> <C>
3. and 4. Limited Partnership Agreement (Incorporated by reference
to Registration Statement No. 2-74914 on Form S-11 filed by
Registrant). N/A
10.1 Modification and/or Extension Agreement dated March 27, 1995 by
and between Imperial Bank, a California banking corporation, and
University Real Estate Partnership V, a California limited
partnership. 12
10.2 Disbursement Agreement and Deed of Trust dated March 27, 1995,
between Imperial Bank, a California banking corporation, and
University Real Estate Partnership V, a California limited
partnership for the additional line of credit granted to the
Partnership in the amount of $400,000. 20
10.3 Forbearance Agreement dated March 27, 1995 by and between
University Real Estate Partnership V, a California limited
partnership, and Imperial Bank, a California banking corporation. 27
10.4 Note dated March 31, 1995, by and between University Real Estate
Partnership V, a California limited partnership, and Imperial
Bank, a California banking corporation in the amount of $250,000. 33
10.5 Amended and Restated Forbearance Agreement entered into on
April 28, 1995 by and between University Real Estate Partnership V,
a California limited partnership and Imperial Bank, a California
banking corporation. 36
11. Statement regarding computation of Net Loss per Limited
Partnership Unit: Net Loss per Limited Partnership Unit is
computed by dividing net loss allocated to the Limited Partners
by the number of Limited Partnership Units outstanding. Per unit
information has been computed based on 20,452 Limited Partnership
Units outstanding in 1994 and 1993. N/A
16. Letter dated July 18, 1995 from Price Waterhouse with respect to
a change in certifying accountant. Incorporated by reference to
Form 8-K - Current Report for the period ending September 30,
1995, as filed with the Securities and Exchange Commission on
July 20, 1995. N/A
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended
March 31, 1995.
</TABLE>
10
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIVERSITY REAL ESTATE PARTNERSHIP V
By: UNIVERSITY ADVISORY COMPANY
General Partner
By: SOUTHMARK INVESTORS, INC.
a General Partner
November 15, 1995 By: /s/ Glen Adams
- ---------------------------- -----------------------------------------
Date Glen Adams, President
Southmark Investors, Inc.
November 15, 1995 By: /s/ Charles B. Brewer
- ---------------------------- -------------------------------------------
Date Charles B. Brewer, Executive Vice President
and Principal Financial Officer
Southmark Investors, Inc.
11
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Exhibit Number 10.1
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
IMPERIAL BANK
9920 South La Cienega Boulevard
Inglewood, CA 90301
Attn: Real Estate Loan Services #4405
UREP/Loan #167
Space above this line for Recorder's use only
______________________________________________________________________________
MODIFICATION AND/OR EXTENSION AGREEMENT
This agreement ("Agreement") is made as of March 27, 1995, by and between
Imperial Bank, ("Bank") and UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA
LIMITED PARTNERSHIP ("Borrower").
Bank has made a loan ("Loan") evidenced by a promissory note dated November 29,
1989 in the original amount of $7,650,000.00 (the "Original Note"), which is
secured by a deed of trust dated November 29, 1989, recorded on December 1,
1989, as Instrument No. 89-650874, in the Office of the Recorder of San Diego
County, California (the "Deed of Trust"). The Original Note has a current
maturity date of December 2, 2004. Borrower desires to modify the terms of the
Original Note and to obtain an additional advance evidenced by the Additional
Advance Note (as hereinafter defined) which shall be secured by the Deed of
Trust and to cure defaults, if any, under the Original Note and Deed of Trust.
As used herein, the Original Note and the Additional Advance Note shall
hereinafter be collectively referred to as the "Note".
In consideration of the mutual covenants herein contained, Bank and Borrower
agree as follows:
1. That the new maturity of the Note is December 1, 2000.
2. Additional provisions are contained in the Addendum attached hereto
and by this referenced made a part hereof.
3. This Agreement is an extension and/or modification only and not a
novation, and will be in full force and effect only upon receipt by
Bank of the following:
(a) This Agreement executed by all parties;
(b) Payment of delinquent interest, if any;
(c) The modification and/or extension fee of $N/A
(d) Payment for any and all recording fees and title company fees for
title company services or endorsements as may be required by Bank,
including, without limitation, a CLTA Endorsement No. 110.6 or ALTA
Endorsement No. 110.5;
12
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(e) Verification that record and legal title to the property encumbered by
the Deed of Trust is vested in Borrower and that there are no
encumbrances or liens on the property senior to said Deed of Trust
other than taxes and assessments, and that any or all delinquent taxes
and assessments which are a lien on the property have been paid or
will be paid as of recordation of this Agreement, except:
(X) No exceptions
(_) Items shown in the Addendum attached hereto and by
this reference made a part hereof.
(f) Documentation Fee of $0.
4. Bank agrees to the amendment of the terms of the Note only to the
extent herein specifically set forth on the condition that such
amendment shall not prejudice any other existing or future rights,
remedies, benefits or powers belonging or accruing to Bank under the
terms of the Note as hereby amended, or of the Deed of Trust.
Further, in consideration of this Agreement, Borrower hereby waives
the provisions of Section 2832 of the Civil Code of California, the
presentment of the Note to the maker, demand of payment, protest,
notice of dishonor and notice of non-payment are hereby waived.
5. Should default be made in the payment of principal or interest when
due, or in the performance or observance when due, of any term,
covenant or condition of any deed of trust, security agreement or
other agreement (including amendments, or extensions thereof) securing
or pertaining to the Note, and in each cash all applicable grace or
cure periods shall have expired, at the option of the holder thereof
and without notice or demand, the entire balance of principal and
interest than remaining unpaid shall (a) become immediately due and
payable, and (b) thereafter bear interest, until paid in full, at the
increased rate of 5% per year in excess of the interest rate provided
for in the Note, as it may vary from time to time.
6. In all other respects, not inconsistent herewith, the terms of the
Note shall remain in full force and effect, and the Deed of Trust
shall otherwise remain unaffected, unchanged, and unimpaired.
7. Borrower represents that it is in good standing in the state of its
formation, and is qualified to do business in the state in which the
property is located. Borrower represents that the performance of any
obligations contemplated hereunder will not conflict with any
provision of law, any of its formation documents or any other
agreement binding upon it. Except as disclosed in writing to Bank,
Borrower represents that it is not a party to any pending or, to its
knowledge, threatened litigation or tax assessment proceedings, and
that it knows of no contingent liabilities not previously disclosed in
writing to Bank.
13
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8. Any and all security held by Bank as collateral for the payment of the
Note, including the Deed of Trust, may be enforced by Bank
concurrently, independently, in such order as Bank may determine; and
with reference to any such security, in addition to the Deed of Trust,
Bank may, without consent of or notice to any maker or guarantor,
exchange, substitute or release such security without affecting the
liability of any maker or guarantor or any of them, and Bank may
release any one or more parties thereto or permit the liability of any
such party to terminate without affecting the liability of any party
or parties liable thereon.
BANK: BORROWER:
IMPERIAL BANK, UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California corporation A CALIFORNIA LIMITED PARTNERSHIP
See attached Signature Page
By: /s/ David Blitz
----------------------
David Blitz,
Sr. Vice President
ALL SIGNATURES MUST BE ACKNOWLEDGED BEFORE A NOTARY PUBLIC
14
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State of California )
) SS
County of Los Angeles )
On March 29, 1995, before me, Dina Marie Hurley, Notary Public, personally
appeared David Blitz, personally known to me (or proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/Dina Marie Hurley /s/Seal
- --------------------
Dina Marie Hurley (Seal)
15
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SIGNATURE PAGE ATTACHED TO THAT CERTAIN MODIFICATION AND/OR EXTENSION AGREEMENT
DATED MARCH 27, 1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A
CALIFORNIA LIMITED PARTNERSHIP.
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.,
a Nevada corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
16
<PAGE>
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On March 30, 1995, before me, a Notary Public, personally appeared Charles B.
Brewer, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity which the
person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Jean M. Largent
----------------------------
Notary Public in and for the
State of Texas
/s/ Seal
17
<PAGE>
ADDENDUM ATTACHED TO THAT CERTAIN MODIFICATION AND/OR EXTENSION AGREEMENT DATED
MARCH 27, 1995 EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA
LIMITED PARTNERSHIP, IN FAVOR OF IMPERIAL BANK, A CALIFORNIA CORPORATION.
ADDITIONAL PROVISIONS
1. The Loan amount shall be increased by $400,000.00. Concurrently with the
execution hereof, Borrower shall execute and deliver to Bank an additional
advance promissory note ("Additional Advance Note") in the amount of
$400,000.00 of even date herewith in form and content acceptable to Bank.
Said Additional Advance Note shall be secured by the Deed of Trust dated
November 29, 1989, recorded on December 1, 1989 as Instrument #89-650874 in
the office of the county recorder of San Diego County, California.
2. Commencing March 1, 1995 and continuing through December 1, 2000 when the
unpaid principal balance and any other amount due under the Loan documents
shall be due and payable in full, interest shall accrue and pay on the
unpaid principal balance of the Note and Additional Advance Note at the
rate of nine and one-half percent (9.5%) per annum.
3. Commencing with the payment due April 1, 1995, and continuing on the first
day of each calendar month thereafter, Borrower shall make monthly payments
of principal and interest under the Note and Additional Advance Note based
on a twenty-five (25) year amortization and the interest rate set forth in
paragraph 2 above until December 1, 2000, when the unpaid principal
balance, plus any accrued but unpaid interest and any other amount due
under the Loan documents, shall be due and payable in full.
4. The following Cross Default Provision shall by this reference be
incorporated in the Deed of Trust:
"Default in the performance or observance of any of the terms and
provisions: (i) of any documents, including without limitation the
Deed of Trust, ("Loan Documents") executed by Borrower or any entity
guaranteeing any of Borrower's obligations to Beneficiary
("Guarantor") in connection with the obligations secured hereby; or
(ii) of any documents executed by Borrower or Guarantor in connection
with any other obligations of Borrower or Guarantor to Beneficiary,
including but not limited to Beneficiary's Loan No. 197 ("Other
Documents") shall constitute a default under the terms of each of the
Loan Documents or Other Loan Documents at Beneficiary's option,
thereby making available to Beneficiary any and all of the remedies
set forth therein."
18
<PAGE>
ADDITIONAL PROVISIONS - PAGE 2
5. Bank and Borrower have, or will shortly, execute a certain note dated March
31, 1995, in the original principal amount of $250,000, and certain
documents securing such note, such security documents relating to the
property commonly known as Washington Towne Apartments, East Pint, Georgia
(such note, security documents and all related documents being collectively
referred to herein as the "Georgia Loan Documents"). Notwithstanding
anything to the contrary contained in (i) the Georgia Loan Documents, (ii)
the Note, (iii) the Deed of Trust, (iv) that certain Note made by Borrower
payable to Bank dated September 9, 1993, in the original principal sum of
$1,500,000 (the "Junior Note"), (v) and the deed of trust securing the
Junior Note (such deed of trust, the Junior Note, the Note and the Deed of
Trust and all related documents being collectively referred to herein as
the "California Loan Documents"), a default in the performance or
observance of any the terms and provisions of the Georgia Loan Documents,
and a default in the performance or observance of any of the terms and
provisions of the California Loan Documents shall not constitute a default
under any provision of the Georgia Loan Documents, and Bank agrees that it
shall not look to the property securing or secured by the California Loan
Documents to satisfy any obligation of Borrower under the Georgia Loan
Documents and shall not look to the property securing or secured by the
California Loan Documents to satisfy any obligation of Borrower under the
Georgia Loan Documents and shall not look to the property securing or
secured by the Georgia Loan Documents to satisfy any obligation of Borrower
under the California Loan Documents.
19
<PAGE>
Exhibit Number 10.2
IMPERIAL BANK
California's Business Bank
Loan #164
DISBURSEMENT AGREEMENT
This Disbursement Agreement is made as of March 27, 1995, between Imperial Bank
(hereinafter referred to as "BANK") and UNIVERSITY REAL ESTATE PARTNERSHIP V, a
California limited partnership (hereinafter referred to as "UREP").
The additional advance loan funds in the amount of $400,000.00 are designated
for an shall be disbursed exclusively in connection with the following items:
<TABLE>
<CAPTION>
<S> <C>
Payment Shortfall Reserve $220,120
Tenant Improvements $35,990
Leasing Commissions $94,797
Monument Sign $49,183
</TABLE>
The following shall be delivered to BANK for its review and approval
concurrently with any draw request:
a) Request for Payment form RE-22, signed by authorized representatives
of UREP, named below;
b) Original invoices and appropriate lien releases from persons, firms
and corporations that have supplied labor, materials or services in
connection with the construction of improvements;
c) a copy of the lease covering space to be improved, executed by UREP
and tenant, along with a description of the work required for the
completion of the improvements, if not set forth in the lease;
d) an estoppel certificate and subordination, non-disturbance and
attomment agreement executed by UREP and tenant in BANK's form;
e) a current financial statement for the tenant of the space to be
improved and any such other information regarding the tenant as BANK
deems necessary;
f) a copy of the plans and specifications covering the space for which
the disbursement is being requested;
g) a copy of the resume, financial statement and statement of
qualification, in form acceptable to BANK, for the contractor
responsible for the completion of the improvements;
h) a detailed cost breakdown of the cost of construction of the
improvements for which the disbursement is being requested;
i) a copy of the construction contract covering the space to be improved;
20
<PAGE>
j) a copy of the building permit covering the space to be improved;
k) evidence of worker's compensation insurance issued by a company
acceptable to BANK;
l) Satisfactory evidence, in writing, between UREP and tenant, that the
improvements have been completed and are acceptable to UREP and
tenant;
m) the original invoice/commission agreement for payment of lease
commission, in form and content acceptable to BANK.
Upon receipt and approval of documentation submitted, BANK shall verify work by
a physical inspection of the property and improvements.
21
<PAGE>
Upon BANK's verification of the work by inspection, the amount approved by BANK
shall be disbursed into account #09-096-701 opened at BANK in the name of UREP.
Funds shall be disbursed from the account via check executed by UREP directly to
the persons, firm or corporation that has supplied labor, material or performed
services in connection with the Property, or to UREP if the disbursement is a
reimbursement of payment previously made by UREP, and verification of which is
acceptable to BANK.
Notwithstanding the foregoing, BANK shall reserve the right to disburse jointly
to UREP and contractor, subcontractor or supplier that has supplied labor,
materials or services in connection with the Property.
Notwithstanding anything contained herein to the contrary, in the event BANK
determines that there are insufficient additional advance funds to complete the
tenant improvements on the Property, BANK shall not be obligated to further
disburse any funds which are allocated for said tenant improvements unless and
until Borrower has deposited with BANK, in immediately available funds, an
amount equal to the difference between the cost of completion of said tenant
improvements, as determined by BANK, and the amount of funds remaining which are
allocated for said tenant improvements.
In connection with a request for payment of leasing commissions, BANK shall
disburse Leasing Commissions in an amount equal to fifty (50%) percent of the
total commission upon the receipt of items (c) and (m) above, and the remaining
fifty percent (50%) upon occupancy of the leased space by the tenant, as
determined by BANK, and as evidenced by delivery to BANK of (I) a Certificate of
Occupancy, or such other written evidence of completion as is customarily
furnished by the appropriate governmental agency, in form and content acceptable
to BANK.
Disbursement of funds designated as Payment Shortfall Reserve Funds shall be
made at BANK's sole discretion and only upon the receipt, review and approval of
the property operating statements, as specified by BANK.
SEE ATTACHED SIGNATURE PAGE
22
<PAGE>
SIGNATURE PAGE ATTACHED TO THAT CERTAIN DISBURSEMENT AGREEMENT DATED MARCH 27,
1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA LIMITED
PARTNERSHIP.
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.
a Nevada corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
23
<PAGE>
DO NOT DESTROY THIS NOTE:
When paid, this note, together with the deed of trust securing same, must be
surrendered to the Trustee for cancellation before reconveyance will be made.
IMPERIAL BANK
California's Business Bank
Loan No. 164
Loan Officer's Initials ______
NOTE SECURED BY DEED OF TRUST
(PRINCIPAL AND INTEREST)
$400,000.00 Inglewood, California, March 27, 1995
On ______________, and as hereinafter provided, FOR VALUE RECEIVED, the
undersigned promises to pay to IMPERIAL BANK ("BANK"), a California banking
corporation, OR ORDER, at 9920 S. La Cienega Blvd., Inglewood, California 90301,
the principal sum of Four Hundred Thousand Hundred Dollars ($400,000.00) or such
sums up to the maximum if so stated, as the BANK may now or hereafter advance to
or for the benefit of the undersigned in accordance with the terms hereof,
together with interest from the date of disbursement, on the unpaid principal
balance at the rate of Nine and one-half percent (9.5%) per year.
Interest shall be computed at the above rate on the basis of a 30-day month
during which the principal balance is outstanding divided by 360, which shall,
for interest computation purposes, be considered one year.
Principal and interest shall be payable, in arrears, on the first day of each
calendar month beginning May 1, 1995, based upon a twenty-five (25) year
amortization period at the interest rate set forth above.
Any payment of interest not so paid shall become a part of the principal. All
payments shall be applied first to interest, and the remainder, if any, to
principal.
Any partial prepayment shall be applied to the installments, if any, in order of
maturity. Should default be made in the payment of principal or interest when
due, or in the performance or observance, when due, of any item, covenant or
condition of any deed of trust, security agreement or other agreement (including
amendments or extensions thereof) securing or pertaining to this note, at the
option of the holder hereof and without notice or demand, the entire balance of
principal and accrued interest then remaining unpaid shall (a) become
immediately due and payable, and (b) thereafter bear interest, until paid in
full, at the increased rate of FIVE PERCENT (5%) per year in excess of the rate
provided for above, as it may vary from time to time.
Defaults shall include, but not be limited to, the failure of the maker(s) to
pay principal or interest within ten (10) days following when due; the filing as
to each person obligated heron, whether as maker, co-maker, endorser or
guarantor (individually or collectively referred to as the "Obligor") of a
voluntary or involuntary petition under the provisions of the Federal Bankruptcy
Act; the issuance of any attachment or execution against any asset of any
Obligor; the death of any Obligor. Notwithstanding anything to the contrary
contained in this note, no action in connection with a non-monetary default
shall be taken by the holder until the expiration of ten (10) days after written
notice is delivered to the undersigned.
If any installment payment or principal balance payment due hereunder is
delinquent Ten (10) or more business days, Obligor agrees to pay a late charge
in the amount of FIVE PERCENT (5%) of the payment so due and unpaid, in addition
to the payment. Nothing in this paragraph is to be construed as an obligation
on the part of the holder of this note to accept payment of any installment past
due or less than the total unpaid principal balance after maturity.
24
<PAGE>
If this note is not paid when due, each Obligor promises to pay all costs and
expenses of collection and reasonable attorney's fees incurred by the older
hereof on account of such collection, including those expenses and fees which
may be incurred in connection with the appointment of a receiver and all
appearances in bankruptcy or insolvency proceedings, plus interest at the rate
applicable to principal, whether suit is filed hereon. Each Obligor shall be
jointly and severally liable hereunder and consents to renewals, replacements
and extensions of time for payment hereof, before, at or after maturity;
consents to the acceptance, release or substitution of security for this note;
and waives demand and protest and the rights to assert any statue of
limitations. Any married person who signs this note agrees that recourse may be
had against such person's separate property for any obligations hereunder. The
indebtedness evidenced hereby shall be payable in lawful money of the United
States.
This note is secured by a deed of trust dated November 29, 1989, to IMPERIAL
BANCORP, as Trustee, which contains the following provision: "In the event the
herein described property, or any part thereof, or any interest therein, is
sold, agreed to be sold, conveyed, transferred, disposed of, further encumbered,
or alienated by Trustor or by the operation of law or otherwise without written
consent of beneficiary first obtained, all obligations secured by this
instrument, irrespective of the maturity dates expressed therein, at the option
of the holder beneficiary, and without demand or notice shall immediately become
due and payable. Consent to one such transaction shall not be deemed to be a
waiver of the right to require such consent to future or successive
transactions."
No single or partial exercise of any power hereunder, or under the deed of
trust, security agreement or other agreement in connection herewith shall
preclude other or further exercises thereof or the exercise of any other such
power. The holder hereof shall at all times have the right to proceed against
any portion of the security for this note in such order and in such manner as
such holder may consider appropriate, without waiving any rights with respect to
any of the security. Any delay or omission on the part of the holder hereof in
exercise any right hereunder, or under any deed of trust, security agreement or
other agreement, shall not operate as a waiver of such right, or of any other
right, under this note or any deed of trust, security agreement or other
agreement in connection herewith.
UNIVERSITY REAL ESTATE PARTNERSHIP V, a California limited partnership
SEE ATTACHED SIGNATURE PAGE
25
<PAGE>
SIGNATURE PAGE ATTACHED TO THAT CERTAIN NOTE SECURED BY DEED OF TRUST DATED
MARCH 27, 1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA
LIMITED PARTNERSHIP.
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.,
a Nevada corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
26
<PAGE>
Exhibit Number 10.3
FORBEARANCE AGREEMENT
---------------------
THIS FORBEARANCE AGREEMENT ("Agreement") is entered into on March 27, 1995 by
and between UNIVERSITY REAL ESTATE PARTNERSHIP V, a California limited
partnership ("Borrower") and IMPERIAL BANK, a California banking corporation
("Imperial").
RECITALS
--------
A. Prior to the date hereof, Imperial made a loan ("Loan 164") to
Borrower in the original principal sum of $7,650,000.00. Loan 164 is evidenced
by that certain promissory note ("Loan 164 Note") dated November 29, 1989, in
the original principal sum of $7,650,000.00, executed by Borrower in favor of
Imperial. The Loan 164 Note is secured by, among other things, that certain
deed of trust ("Loan 164 Deed of Trust") dated November 29, 1989, executed by
Borrower in favor of Imperial, and recorded December 1, 1989 as Instrument
No. 89-650874 in the Official Records of San Diego County, California,
encumbering that certain real property ("Property") more particularly described
in Exhibit "A", attached hereto.
B. Prior to the date hereof, Imperial made a loan ("Loan 197") to
Borrower in the original principal sum of $1,500,000.00. Loan 197 is evidenced
by that certain promissory note ("Loan 197 Note") dated September 9, 1993, in
the original principal sum of $1,500,000.00, executed by Borrower in favor of
Imperial. The Loan 197 Note is secured by, among other things, that certain
deed of trust ("Loan 197 Deed of Trust") dated September 9, 1993, executed by
Borrower in favor of Imperial, and recorded September 15, 1993 as Instrument
No. 93-0608395 in the Official Records of San Diego County, California,
encumbering the Property.
C. Borrower is currently in default under Loan 164 and Loan 197, and all
outstanding principal under the Loan 164 Note and the Loan 197 Note, together
with accrued but unpaid interest and other charges thereon is currently due and
payable in full.
D. Imperial has caused to be recorded: (i) a Notice of Default in
connection with Loan 164, which recorded January 17, 1995 as instrument
no. 95-0018683 in the Official Records of San Diego County, California; and (ii)
a Notice of Default in connection with Loan 197, which recorded January 17, 1995
as instrument no. 95-0019289 in the Official Records of San Diego County,
California.
E. Borrower and Imperial desire to enter into this Agreement for the
purposes of affording Borrower the opportunity to cure its defaults under Loan
164 and Loan 197 prior to Imperial pursuing its remedies for Borrower's defaults
thereunder, including without limitation, the foreclosure of the Loan 164 Deed
of Trust and the Loan 197 Deed of Trust.
27
<PAGE>
OPERATIVE PROVISIONS
--------------------
Now therefore, for valuable consideration, the receipt and adequacy of which are
hereby agree as follows:
1. Forbearance from Proceeding with Foreclosure
--------------------------------------------
(a) Provided that Borrower: (i) makes the payments described in paragraph 3
below to Imperial, in immediately available funds, and at the times and in the
manner set forth in said paragraph 3; and (ii) performs each of its additional
obligations under this Agreement, at the times and in the manner set forth
herein, then in such event, Imperial shall forbear from preceding with
foreclosure or take any other action in connection with the default with respect
to the Loan 164 Deed of Trust and the Loan 197 Deed of Trust for a period
("Forbearance Period") commencing as of the date hereof through December 1,
2000.
(b) Upon the earlier to occur of: (i) the termination of the Forbearance
Period; or (ii) a default by Borrower under this Agreement, including without
limitation, the failure by Borrower to make any payment to Imperial described in
paragraph 2 below, at the time and in the manner set forth in said paragraph 2,
then in such event, the provisions of this paragraph shall be null and void, and
Imperial shall have the right to enforce any of the remedies afforded to
Imperial for any default by Borrower under Loan 164 or Loan 197 including
without limitation, and subject to applicable California law, the sale of the
Property.
2. Payments.
---------
(a) On April 1, 1995, Borrower shall pay to Imperial, in immediately available
funds, an aggregate amount equal to the sum of: (i) an amount equal to the
interest which has accrued on the outstanding principal balance of Loan 164
during the period commencing September 1, 1994 through and including March 31,
1995, at an interest rate ("Accrual Rate") equal to nine percent (9%) per year;
and (iii) an amount equal to the interest which has accrued on the outstanding
principal balance of Loan 197 during the period commencing September 1, 1994
through and including March 31, 1995, at an interest rate equal to eleven
percent (11%) per year. Promptly thereafter, Imperial shall rescind the Notice
of Default on Loan 164 described in paragraph D above.
(b) Commencing on May 1, 1995 and thereafter on the first day of each month
during the Forbearance Period, Borrower shall pay to Imperial, in immediately
available funds: (i) the sum of $6,595.00, which sum shall be applied to pay
accrued interest and other charges then due and payable under Loan 164.
28
<PAGE>
(c) On December 1, 2000, provided that Borrower complies with the terms and
conditions contained in this Agreement, and that no event of default then exists
or has been declared on Loan 164 or Loan 197 from the date of the execution
hereof, Imperial shall forgive the amount of interest on Loan 197 accruing from
April 1, 1995 to December 1, 2000, that remains unpaid after the receipt and
application of the amount set forth in paragraph 4(b) above.
3. Entire Agreement. No employee or agent of any of the parties hereto
-----------------
has the authority to orally modify any term or condition of this Agreement nor
any authority to make any representation or agreement other than as contained in
this Agreement, and unless any representation or agreement is contained in this
Agreement or added by written agreement executed by each of the parties hereto,
it shall not be binding nor otherwise affect the validity of this Agreement.
4. Amendment of Agreement. No modification of, deletion from, or
-----------------------
addition to this Agreement shall be effective unless made in writing and
executed by each of the parties hereto.
5. Waiver. The failure by any party to enforce any term or provision of
-------
this Agreement, the Notes or the Deeds of Trust shall not constitute a waiver of
the right to enforce the same term or provision or any other term or provision,
thereafter. No wavier by any party of any term or provision of this Agreement,
the Notes or the Deeds of Trust shall be deemed or shall constitute a waiver of
any other provision of this Agreement, the Notes or the Deeds of Trust (whether
or not similar), nor shall any waiver constitute a continuing waiver unless
otherwise expressly provided in writing.
6. Severability. In the event any clause, sentence, term or provision of
-------------
this Agreement shall be held by any court of competent jurisdiction to be
illegal, invalid or unenforceable for any reason, the remaining portions of this
Agreement shall nonetheless remain in full force and effect.
7. Construction of Agreement. The section headings contained in this
--------------------------
Agreement have been inserted for convenience only, and shall not be considered
or referred to in resolving questions or interpretation or construction. In
determining the meaning of, or resolving any ambiguity with respect to, any
word, phrase or provision of this Agreement, no uncertainty or ambiguity shall
be construed or resolved against any party under any rule of construction,
including the party primarily responsible for the drafting and preparation of
this Agreement. The parties hereto acknowledge that they were represented by
legal counsel in conjunction with this transaction.
8. Gender and Intonation. Wherever the context of this Agreement may so
----------------------
require, the gender shall include the masculine, feminine and neuter, and the
intonation shall include the singular and plural.
29
<PAGE>
9. Governing Law. This Agreement is made under and shall be construed in
--------------
accordance with and governed by the laws of the State of California, without
giving effect to the principals of conflicts of law.
10. Attorneys' Fees. In the event either party to this Agreement shall
---------------
commence legal proceedings against the other to enforce the provisions of this
Agreement or to declare rights and/or obligations under this Agreement, the
prevailing party shall be entitled to recover from the losing party its costs of
suit, including reasonable attorneys' fees, as shall be determined by the court.
11. Time of Essence. Time is of the strictest essence with respect to the
----------------
obligations of each party under this Agreement.
12. Inurement. This Agreement shall inure to the benefit of and be
----------
binding upon the parties hereto, and their respective successors and assigns.
13. Execution Date. Notwithstanding anything contained herein to the
--------------
contrary, in the event Borrower fails to: (i) execute and deliver a copy of this
Agreement to Imperial; and (ii) make the payment described in paragraph 2(a)
above to Imperial on or before April 1, 1995, then in such event this Agreement
shall immediately terminate, and each of the provisions hereof shall be null and
void, and of no further force or effect.
14. Incorporation of Recitals. The foregoing Recitals are incorporated
--------------------------
herein by this reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first hereinabove written.
SIGNATURES ON THE FOLLOWING PAGE
30
<PAGE>
SIGNATURE PAGE ATTACHED TO THAT CERTAIN FORBEARANCE AGREEMENT DATED MARCH 27,
1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA LIMITED
PARTNERSHIP, IN FAVOR OF IMPERIAL BANK, A CALIFORNIA CORPORATION.
IMPERIAL BANK, a California banking corporation
By:
----------------------------------
David Blitz, Sr. Vice President
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.,
a Nevada corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
31
<PAGE>
EXHIBIT "A" LEGAL DESCRIPTION ATTACHED TO THAT CERTAIN FORBEARANCE AGREEMENT
DATED MARCH 27, 1995, EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A
CALIFORNIA LIMITED PARTNERSHIP IN FAVOR OR IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION.
PARCEL 1:
LOTS 1, 2 AND 3 OF GOLDEN FRONTIER, IN THE CITY OF SAN DIEGO, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 3802, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, FEBRUARY 10, 1953.
PARCEL 2:
THAT PORTION OF PUEBLO LOT 335 OF THE PUEBLO LANDS OF SAN DIEGO, IN THE CITY OF
SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF BY
JAMES PASCOE, A CERTIFIED COPY OF WHICH WAS FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, NOVEMBER 14, 1921, AND IS KNOWN AS MISCELLANEOUS
MAP NO. 36, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE SOUTHEASTERLY LINE OF SAID PUEBLO LOT 335
WITH A LINE WHICH IS PARALLEL WITH AND 60 FEET NORTHEASTERLY AT RIGHT ANGLES
FROM THE SOUTHWESTERLY LINE OF SAID PUEBLO LOT 335; THENCE ALONG SAID PARALLEL
LINE NORTH 53(degrees)5655" WEST 124.47 FEET; THENCE NORTH 30(degrees)16 EAST
95.59 FEET; THENCE NORTH 5(degrees)0239" WEST 7.00 FEET TO THE TRUE POINT OF
BEGINNING BEING THE BEGINNING OF AN 88 FOOT RADIUS CURVE, CONCAVE NORTHWESTERLY
THE RADIAL LINE OF SAID CURVE BEARING SOUTH 67(degrees)0801" WEST TO SAID
BEGINNING OF CURVE; THENCE SOUTHWESTERLY ALONG SAID CURVE 121.41 FEET THROUGH AN
ANGLE OF 79(degrees)0251" TO SAID LINE WHICH IS PARALLEL WITH AND 60 FEET
NORTHEASTERLY AT RIGHT ANGLES FROM THE SOUTHWESTERLY LINE OF SAID LOT 335;
THENCE ALONG SAID PARALLEL LINE NORTH 53(degrees)5655" WEST TO THE NORTHWESTERLY
LINE TO THE MOST NORTHERLY CORNER OF SAID LOT; THENCE ALONG THE NORTHEASTERLY
LINE OF SAID LOT SOUTH 53(degrees)5840" EAST TO A LINE WHICH BEARS NORTH
5(degrees)0239" WEST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH
5(degrees)0239" EAST 407.47 FEET TO THE TRUE POINT OF BEGINNING.
32
<PAGE>
Exhibit Number 10.4
NOTE
$250,000.00 Tucker, Georgia March 31, 1995
FOR VALUE RECEIVED, the undersigned promises to pay to the order of IMPERIAL
BANK the principal sum of TWO HUNDRED FIFTY THOUSAND AND NO/100 ($250,000.00)
DOLLARS, in legal tender of the United States, with interest thereon, from the
date hereof, at a rate of 11.50% per annum on the unpaid balance outstanding,
until paid in full. Said principal and interest shall be due and payable as
follows:
Being due and payable in 1 payment of principal and interest in the amount of
$2,475.73 due May 1, 1995 and with a final balloon payment of all remaining
unpaid principal and interest being due June 1, 1995.
Principal and interest are payable at the office of the Holder at: 9920 S. La
Cienega Blvd., Inglewood, CA 90301, or at such other place as the Holder
thereof may designate in writing.
Any installment not made within TEN (10) days of the due date shall be subject
to a late charge of FIVE PERCENT (5%) per annum for each installment not made.
Should any installment not be paid within TEN (10) days of the due date, or
should the Maker hereof fail to comply with any of the terms or requirements of
a Security Deed and Agreement of even date herewith, and between the parties
hereto, as security for this indebtedness, conveying title to real property
known as Washington Towne Apartments, 2420 Heaton Drive aka 2438 Stone Road,
East Point, GA 30344, and the passage of any grace periods thereunder (each of
such events begin a "default" hereunder), the entire unpaid principal sum
evidenced by this note, with all accrued interest, shall, at the option of the
Holder, and without notice to the undersigned, become due and may be collected
forthwith, time being of the essence of this contract. Time is of the essence
of the provisions of this Note. It is further agreed that failure of the Holder
to exercise this right of accelerating the maturity of the debt, or indulgence
granted form time to time, shall in no event be considered as a waiver of such
right of acceleration or estop the Holder from exercising such right.
In case this note is collected by law, as through an attorney at law, all
reasonable costs of collection, including reasonable attorney's fees, shall be
paid by the Maker hereof.
33
<PAGE>
Maker waives demand, protest and notice of demand, protest and non-payment.
In case of default in the payment of any one of the aforesaid installments, and
in case the Holder of this note should elect, on account of such default, to
declare the unpaid balance of the principal sum due and payable, said principal
sum, or so much thereof as may remain unpaid at the time of such default, shall
bear interest at a rate of EIGHTEEN PERCENT (18%) per annum from the date of
such default.
This contract is to be construed in all respects and enforced according to the
laws of the State of Georgia.
Except for fraud or intentional misrepresentations, neither Maker nor any
partner in Maker shall be liable personally to pay this Note or the indebtedness
evidenced hereby, and the Holder shall not seek any personal or deficiency
judgment on this Note except for fraud or intentional misrepresentations, and
the sole remedy of the Holder hereunder or under any of the other documents
securing this Note (the "Security Documents") shall (except for fraud,
misappropriation of funds or intentional misrepresentations) be under the
Security Documents for enforcement thereof or shall otherwise be against the
collateral described in the Security Documents (the "Collateral"); provided,
however, that the foregoing shall not in any way diminish or affect (i) any
rights the Holder may have (as a secured party or otherwise) to, against or with
accruing the Note, or (ii) any rights of the Holder against the Maker with
respect to any fraud, misappropriation of funds or intentional
misrepresentation.
WITNESS the hand seal of each of the undersigned.
SEE SIGNATURE PAGE ATTACHED
34
<PAGE>
SIGNATURE PAGE ATTACHED TO AND MADE A PART OF NOTE, DATED MARCH 31, 1995, AND
----
EXECUTED BY UNIVERSITY REAL ESTATE PARTNERSHIP V, A CALIFORNIA LIMITED
PARTNERSHIP
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.,
a Nevada corporation, general partner
By: /s/ Charles B. Brewer (SEAL)
---------------------------------
NAME: Charles B. Brewer
TITLE: Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Charles B. Brewer (SEAL)
---------------------------------
NAME: Charles B. Brewer
TITLE: Executive Vice President
ATTEST: /s/ Shawna L. Kaiser
------------------------
Shawna Kaiser, Secretary
35
<PAGE>
Exhibit Number 10.5
AMENDED AND RESTATED FORBEARANCE AGREEMENT
------------------------------------------
THIS AMENDED AND RESTATED FORBEARANCE AGREEMENT ("Agreement") is entered into on
April 28, 1995 by and between UNIVERSITY REAL ESTATE PARTNERSHIP V, a California
limited partnership ("Borrower") and IMPERIAL BANK, a California banking
corporation ("Imperial")
RECITALS
--------
A. Prior to the date hereof, Imperial made a loan ("Loan 164") to
Borrower in the original principal sum of $7,650,000.00. Loan 164 is evidenced
by that certain promissory note ("Loan 164 Note") dated November 29, 1989, in
the original principal sum of $7,650,000.00, executed by Borrower in favor of
Imperial. The Loan 164 Note is secured by, among other things, that certain
deed of trust ("Loan 164 Deed of Trust") dated November 29, 1989, executed by
Borrower in favor of Imperial, and recorded December 1, 1989 as Instrument
No. 89-650874 in the Official Records of San Diego County, California,
encumbering that certain real property ("Property") more particularly described
in Exhibit "A", attached hereto.
B. Prior to the date hereof, Imperial made a loan ("Loan 197") to
Borrower in the original principal sum of $1,500,000.00. Loan 197 is evidenced
by that certain promissory note ("Loan 197 Note") dated September 9, 1993, in
the original principal sum of $1,500,000.00, executed by Borrower in favor of
Imperial. The Loan 197 Note is secured by, among other things, that certain
deed of trust ("Loan 197 Deed of Trust") dated September 9, 1993, executed by
Borrower in favor of Imperial, and recorded September 15, 1993 as Instrument
No. 93-0608395 in the Official Records of San Diego County, California,
encumbering the Property.
C. Borrower is currently in default under Loan 164 and Loan 197, and all
outstanding principal under the Loan 164 Note and the Loan 197 Note, together
with accrued but unpaid interest and other charges thereon is currently due and
payable in full.
D. Imperial has caused to be recorded: (i) a Notice of Default in
connection with Loan 164, which recorded January 17, 1995 as instrument
no. 95-0018683 in the Official Records of San Diego County, California; and (ii)
a Notice of Default in connection with Loan 197, which recorded January 17, 1995
as instrument no. 95-0019289 in the Official Records of San Diego County,
California.
E. Prior to the date hereof, Borrower and Imperial executed that certain
Forbearance Agreement ("Original Agreement") dated March 27, 1995 in connection
with Loan 164 and Loan 197.
36
<PAGE>
F. Borrower and Imperial desire to enter into this Agreement for the
purposes of amending and restating the provisions of the Original Agreement.
OPERATIVE PROVISIONS
--------------------
Now therefore, for valuable consideration, the receipt and adequacy of which are
hereby agree as follows:
1. Forbearance from Proceeding with Foreclosure
--------------------------------------------
(a) Provided that Borrower: (i) makes the payments described in paragraph 2
below to Imperial, in immediately available funds, and at the times and in the
manner set forth in said paragraph 2; and (ii) performs each of its additional
obligations under this Agreement, at the times and in the manner set forth
herein, then in such event, Imperial shall forbear from preceding with
foreclosure or take any other action in connection with the default with respect
to the Loan 164 Deed of Trust and the Loan 197 Deed of Trust for a period
("Forbearance Period") commencing as of the date hereof through December 1,
2000.
(b) Upon the earlier to occur of: (i) the termination of the Forbearance
Period; or (ii) a default by Borrower under this Agreement, including without
limitation, the failure by Borrower to make any payment to Imperial described in
paragraph 2 below, at the time and in the manner set forth in said paragraph 2,
then in such event, the provisions of this paragraph shall be null and void, and
Imperial shall have the right to enforce any of the remedies afforded to
Imperial for any default by Borrower under Loan 164 or Loan 197 including
without limitation, and subject to applicable California law, the sale of the
Property.
2. Payments.
---------
(a) On April 1, 1995, Borrower shall pay to Imperial, in immediately available
funds, an aggregate amount equal to the sum of: (i) an amount equal to the
interest which has accrued on the outstanding principal balance of Loan 164
during the period commencing September 1, 1994 through and February 28, 1995, at
an interest rate equal to nine percent (9.0%) per year; and (ii) an amount equal
to the interest which has accrued on the outstanding principal balance of Loan
197 during the period commencing September 1, 1994 through and including
February 28, 1995, at an interest rate equal to eleven percent (11%) per year.
Promptly thereafter, Imperial shall rescind the Notice of Default on Loan 164
described in paragraph D above. The interest rates described in this paragraph
2(a) are merely for the purpose of calculating the payments set forth herein and
do not in any way modify, amend or alter the interest rates in effect under
either Loan 164 or Loan 197.
37
<PAGE>
(b) On April 1, 1995 and thereafter on the first day of each month during the
Forbearance Period, Borrower shall pay to Imperial, in immediately available
funds: (i) the sum of $6,595.00, which sum shall be applied to pay accrued but
unpaid interest under Loan 197 and (ii) all payments of principal and accrued
interest and other charges then due and payable under Loan 164.
All accrued interest under Loan 197 which is not paid upon application of the
payments described in paragraph 2(b)(i) above shall continue to accrue during
the Forbearance Period, and shall be either paid or forgiven pursuant to the
terms of paragraph 2(c) below.
(c) On December 1, 2000, provided that Borrower complied with the terms and
conditions contained in this Agreement, and provided further that no event of
default then exists or has been declared on Loan 164 or Loan 197 from the date
of the execution hereof, Imperial shall forgive the amount of accrued interest
on Loan 197 accruing from March 1, 1995 to December 1, 2000, that remains unpaid
after the receipt and application of the amount set forth in paragraph 2(b)(i)
above.
Notwithstanding the foregoing, in the event that Borrower is in default under
this Agreement, or under Loan 164 or under Loan 197, at any time during the
Forbearance Period, all accrued but unpaid interest and other charges shall be
immediately due and payable, including without limitation, all accrued but
unpaid interest described in paragraph 2(c) above.
3. Amendment of Loan 197 Maturity Date. The maturity date of the Loan
------------------------------------
197 Note is hereby changed to December 1, 2000.
4. Entire Agreement. No employee or agent of any of the parties hereto
-----------------
has the authority to orally modify any term or condition of this Agreement nor
any authority to make any representation or agreement other than as contained in
this Agreement, and unless any representation or agreement is contained in this
Agreement or added by written agreement executed by each of the parties hereto,
it shall not be binding nor otherwise affect the validity of this Agreement.
5. Amendment of Agreement. No modification of, deletion from, or
-----------------------
addition to this Agreement shall be effective unless made in writing and
executed by each of the parties hereto.
6. Waiver. The failure by any party to enforce any term or provision of
-------
this Agreement, the Notes or the Deeds of Trust shall not constitute a waiver of
the right to enforce the same term or provision or any other term or provision,
thereafter. No wavier by any party of any term or provision of this Agreement,
the Notes or the Deeds of Trust shall be deemed or shall constitute a waiver of
any other provision of this Agreement, the Notes or the Deeds of Trust (whether
or not similar), nor shall any waiver constitute a continuing waiver unless
otherwise expressly provided in writing.
38
<PAGE>
7. Severability. In the event any clause, sentence, term or provision of
-------------
this Agreement shall be held by any court of competent jurisdiction be illegal,
invalid or unenforceable for any reason, the remaining portions of this
Agreement shall nontheless remain in full force and effect.
8. Construction of Agreement. The section headings contained in this
--------------------------
Agreement have been inserted for convenience only, and shall not be considered
or referred to in resolving questions or interpretation or construction. In
determining the meaning of, or resolving any ambiguity with respect to, any
word, phrase or provision of this Agreement, no uncertainty or ambiguity shall
be construed or resolved against any party under any rule of construction,
including the party primarily responsible for the drafting and preparation of
this Agreement. The parties hereto acknowledge that they were represented by
legal counsel in conjunction with this transaction.
9. Gender and Intonation. Wherever the context of this Agreement may so
----------------------
require, the gender shall include the masculine, feminine and neuter, and the
intonation shall include the singular and plural.
10. Governing Law. This Agreement is made under and shall be construed in
--------------
accordance with and governed by the laws of the State of California, without
giving effect to the principals of conflicts of law.
11. Attorneys' Fees. In the event either party to this Agreement shall
---------------
commence legal proceedings against the other to enforce the provisions of this
Agreement or to declare rights and/or obligations under this Agreement, the
prevailing party shall be entitled to recover from the losing party its costs of
suit, including reasonable attorneys' fees, as shall be determined by the court.
12. Time of Essence. Time is of the strictest essence with respect to the
----------------
obligations of each party under this Agreement.
13. Inurement. This Agreement shall inure to the benefit of and be
----------
binding upon the parties hereto, and their respective successors and assigns.
14. Execution Date. Notwithstanding anything contained herein to the
---------------
contrary, in the event Borrower fails to: (i) execute and deliver a copy of this
Agreement to Imperial; and (ii) make the payment described in paragraph 2(a)
above to Imperial on or before April 1, 1995, then in such event this Agreement
shall immediately terminate, and each of the provisions hereof shall be null and
void, and of no further force or effect.
15. Incorporation of Recitals. The foregoing Recitals are incorporated
--------------------------
herein by this reference.
39
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first hereinabove written.
IMPERIAL BANK, a California banking corporation
By: /s/ David Blitz
--------------------------------
David Blitz, Sr. Vice President
UNIVERSITY REAL ESTATE PARTNERSHIP V,
a California limited partnership
By: University Advisory Company,
a California general partnership, general partner
By: Southmark Investors, Inc.,
a Nevada corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
By: Southmark Commercial Management, Inc.,
a Georgia corporation, general partner
By: /s/ Charles B. Brewer
---------------------------------------
Charles B. Brewer, Executive Vice President
40
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 119,812
<SECURITIES> 0
<RECEIVABLES> 151,048
<ALLOWANCES> 72,740
<INVENTORY> 0
<CURRENT-ASSETS> 198,120
<PP&E> 18,871,757
<DEPRECIATION> 7,150,558
<TOTAL-ASSETS> 14,492,694
<CURRENT-LIABILITIES> 90,881
<BONDS> 10,843,234
<COMMON> 0
0
0
<OTHER-SE> 2,713,464
<TOTAL-LIABILITY-AND-EQUITY> 14,492,694
<SALES> 0
<TOTAL-REVENUES> 732,388
<CGS> 0
<TOTAL-COSTS> 336,651
<OTHER-EXPENSES> 246,974
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 335,727
<INCOME-PRETAX> (186,964)
<INCOME-TAX> 0
<INCOME-CONTINUING> (186,964)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (186,964)
<EPS-PRIMARY> (5.37)
<EPS-DILUTED> 0
</TABLE>
