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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 ------
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SCHEDULE 14D-9
SOLICITATION /RECOMMENDATION
STATEMENT UNDER SECTION 14(D) (4) OF THE
SECURITIES EXCHANGE ACT OF 1934
--------------------------------
AMERICAN REPUBLIC REALTY FUND I
(Name of Subject Company)
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AMERICAN REPUBLIC
REALTY FUND I
(Name of Persons Filing Statement)
---------------------------------
LIMITED PARTNERSHIP
INTERESTS
(Title of Class of Securities)
----------------------------------
NOT APPLICABLE
(CUSIP Number of Class of Securities)
-------------------------------------
ROBERT J. WERRA
General Partner,
American Republic Realty
Fund I
6210 Campbell Road, Suite 140
Dallas, Texas 75248
(972) 380-8000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on behalf of the
Persons Filing Statement)
---------------------------------------
With a Copy to :
Timothy R. Vaughan
Hallett & Perrin, P.C.
177 N. Harwood, Suite 1400
Dallas, Texas 75201
214-953-0053
ITEM 1. SUBJECT COMPANY INFORMATION
American Republic Realty Fund I, a limited partnership
organized under the laws of the State of Wisconsin
(the APartnership@), is the subject company. Robert
J. Werra is the individual general partner of the
Partnership. The principal executive offices of the
Partnership are located at 6210 Campbell Road, Suite
140, Dallas, Texas 75248. The title of the class of
equity securities to which this Statement relates is
Limited Partnership Interests (the ALimited
Partnership Interests@) of the Partnership. As of
December 31, 1999, there were 11,000 Limited
Partnership Interests outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
a) The name and business address of the
Partnership, which is the person filing this
Statement, are stated in Item 1 above, which is
incorporated herein by reference.
b) This Statement relates to a tender offer by MP Value
Fund 4, LLC, MP Value Fund 6, LLC, Mackenzie Patterson
Special Fund 3, LLC, and Previously Owned Mortgage
Partnerships Income Fund 3, L.P. (collectively the
Offeror) to acquire up to 3,500 Limited Partnership
Interests, at a price of $50 per Interest, less the amount
of any distributions declared or made with respect to the
Interests between March 1, 2000 and May 1, 2000, or such
other date to which the Offer may be extended (the Offer
Price), upon the terms and conditions set forth in the
Offer To Purchase, dated March 27, 2000 (the Offer To
Purchase) and the related Letter of Transmittal (which
together with the Offer To Purchase and any amendments
thereto constitute the Offer). The Offer to Purchase is
disclosed in the Schedule TO dated, March 27, 2000 (the
Schedule TO), as filed by the Offeror with the Securities
and Exchange Commission (the "SEC") on or about March 27,
2000 as amended by Amendment Number 1 to Schedule TO as
filed with the SEC on or about April 13, 2000. As stated
in the Schedule TO, the principal executive offices of the
Offeror is located at 1640 School Street, Moraga,
California 94556.
c)
ITEM 3.PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS
AND AGREEMENTS
(d) The Partnership has no material contract,
agreement, arrangement or understanding between it
and its executive officers, directors or affiliates,
except as follows:
As reported in the Partnership's Annual Report on
Form 10-K for the fiscal year ended December 31,
1999, the Partnership has entered into a management
agreement, dated as of February 1, 1991 ("the
Management Agreement"), with Univesco, Inc. a Texas
corporation ("Univesco"), which is 83%
owned by the General Partner. Under the terms of
such agreement, Univesco acts as the managing agent
with respect to the Partnership's properties and may
also engage other on-site property managers and other
agents to the extent it considers appropriate. For
these services, Univesco receives a management
fee equal to 5% of the Partnership's gross receipts
and reimbursement of its administrative expenses.
During the years ended December 31, 1997, 1998 and
1999, Univesco received management fees of $126,830,
$133,659 and $137,375, respectively, and an
administrative fee of $10,008 in each of such years.
As a result of the foregoing, Univesco could be
deemed to have a potential conflict of interest with
the Offeror. To the Partnership's knowledge, the
Offeror currently owns 13.1% of the outstanding
Limited Partnership Interests and, assuming the
Offeror acquires all 3,500 Limited Partnership
Interests which the Offeror is seeking to acquire
pursuant to the Offer, the Offeror will own an
aggregate of approximately 45.1% of the outstanding
Limited Partnership Interests upon completion of the
Offer. The Agreement of Limited Partnership of the
Partnership provides for removal of the General
Partner upon the vote of Limited Partners holding a
majority in interest of the outstanding Limited
Partnership Interests. As a result, if the Offeror
acquired, pursuant to the Offer and one or more
subsequent purchases of Limited Partnership Interests
by the Offeror, Limited Partnership Interests
representing a majority in interest of the
outstanding Limited Partnership Interests, the
Offeror could remove the General Partner and, in such
event, terminate the Management Agreement.
Accordingly, the General Partner may have an interest
in recommending that the Offer be rejected.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) Recommendation. The General Partner is not making
a recommendation regarding the Offer and is expressing no
opinion of, and is remaining neutral toward, the Offer.
(b) Reasons for Recommendations.
At March 31, 2000, the Partnership's sole
assets consisted of two real estate properties:
Forestwood and Four Winds (the "Real Property").
Based on current levels of income and expense, the
Partnership believes that the Real Property has an
aggregate fair market value of approximately
$13,800,000 on such date. The sole indebtedness of
the Partnership consists of mortgage indebtedness
secured by the Real Property in the aggregate
principal amount of $10,500,000 at March 31, 2000.
Thus, the Partnership believes that the aggregate net
book value of the Real Property at March 31, 2000 was
approximately $3,300,000, or a net book value of
approximately $300 per Limited Partner Interest. In
addition, after giving effect to the repayment of all
indebtedness other than the Mortgage Indebtedness,
which repayment was completed on February 17, 2000,
the Partnership had income (before deductions for
interest,
depreciation, amortization and taxes)per Limited
Partnership Interest of $35.00 per year.
Although the Partnership's estimates of net
book value and income per Limited Partnership
Interest indicate that the Limited Partnership
Interests arguably have a value in excess of the
Offer Price, the Partnership is expressing no
opinion of the Offer for the following reasons. Due
to the relatively small number of outstanding Limited
Partnership Interests, there is not an active trading
market for Limited Partnership Interests. As a
result, holders of Limited Partnership Interests do
not have a readily available means of liquidating
their investment in Limited Partnership Interests.
Thus, even though the value of the Limited
Partnership Interests may exceed the Offer Price, the
Offer does afford to holders of Limited Partnership
Interests the opportunity to liquidate all or a
portion of their investment.
In addition, the Partnership's estimates of net book
value and income generated by the Real Property are
based on current market conditions and levels of
income and expense, which are likely to change. Any
such material change in market conditions and levels
of income and expense would affect the value of the
Real Property. There can be no assurance that the
value of the Real Property will not decrease in
future periods. For these reasons, the General
Partner is expressing no opinion of, and is remaining
neutral toward, the Offer
(c) Intent to Tender. To the knowledge of
the Partnership, neither the General Partner nor any
affiliate of the General Partner, currently intends
to tender or sell Limited Partnership Interests that
are held of record or beneficially by such person.
ITEM 5. PERSON/ASSETS, RETAINED, EMPLOYED,
COMPENSATED OR USED
Except for assets of the Partnership used in connection
with the preparation of this Schedule 14D-9, no officers,
class of employees or assets of the Partnership has been or
is expected to be employed or used by the filing person in
connection with the Offer, or responding thereto.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT
COMPANY
NONE
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR
PROPOSALS
The Partnership is not undertaking or engaged in any
negotiations in response to the Offer.
ITEM 8. ADDITIONAL INFORMATION
NONE
ITEM 9. EXHIBITS
(a) Letter, dated March 29, 2000,
from Robert J. Werra, as General Partner of the
Partnership, to the Limited Partners.
(e)(i) Management Agreements, dated as
of February 1, 1991, between Univesco, Inc. and the Partnership.
SIGNATURE.
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
/s/ Robert J Werra
(Signature)
Robert J. Werra, General Partner
(Name and Title)
April 24, 1999
(Date)
March 29, 2000
Re: American Republic Realty Fund I
Dear Limited Partner,
Due to a recent offer to buy Limited Partnership
interests in Fund I, partners have requested an indication for
the value of a unit in Fund I. There are two properties remaining:
Forestwood and Four Winds. Their income and expenses indicate a value
of approximately $35 a square foot, and $30 a square foot
respectively. This puts a value of $8,600,000 on Forestwood,
and $5,200,000 on Four Winds for a total of $13,800,000. They have
mortgage debt of approximately $10,500,000 leaving an equity of
$3,300,000. There are 11,000 units of
Fund I divided by the equity indicates a value of approximately
$300 per unit. Now that the short term debt has been paid each unit
generates about $35.00 per year in cash flow. If you have an interest
in buying or selling your units please send us a
letter stating your intentions and price, we will try to match buyers
and sellers. The general partner is not offering to buy or sell
any units and will not charge a fee for this service.
Yours truly,
Robert J. Werra
General Partner
American Republic Realty Fund I
MULTIFAMILY MANAGEMENT AGREEMENT
This management Agreement is made as of and
effective the first day of February 1, 1991 by and
between American Republic Realty Fund 1., d/b/a
Four Winds Apartments, a (Wisconsin) Limited
Partnership (herein called "Owner"), and UNIVESCO
INC., a Texas corporation (herein called
"Manager").
WITNESSETH:
WHEREAS, Owner is the owner of an apartment community
known as Four Winds Apartments (154 Units)
located at 2150 Spencer Rd., Orange
Park, FL (hereinafter collectively referred to as
the "Property").
WHEREAS, Manager is in the business
of operating and managing residential multifamily
properties; and
WHEREAS, Owner desires to contract with
Manager to obtain Manager's services as an
independent contractor for the general maintenance,
staffing, operation and management of the Property
(and the employment of all personnel employed
in connection therewith) in all respects except as
limited herein, including matters relating to the
leasing, the maintenance of the Property, the
compliance with rules and regulations of all
public authorities having jurisdiction over the
operation of the Property, the maintenance of
all records, the billing and collection for
Owner and in Owner's name of all charges to
residents, the hiring, training, utilization and
supervision of employees, the preparation and
filing of all required reports, and the maintenance
of the Property and the supplies, equipment,
furniture, furnishings and structures associated
therewith; and
WHEREAS, Manager desires to perform
such management functions as an independent
contractor in accordance with the terms hereof and
for the consideration provided herein.
NOW, THEREFORE, for and in consideration of the
premises and for the further consideration recited
herein, Owner and Manager agree as follows:
1. Appointment. Owner hereby appoints
Manager as an independent contractor to act as the
exclusive manager of the Property, and the
Manager accepts such appointment, subject to the
terms and conditions set forth herein.
2. Term. This Agreement shall
commence as of the date first written herein, and
shall remain in force and effect until the first day
of the following calendar month; provided, however,
that unless either party hereto gives notice of
termination to the other in accordance with the
applicable notice provisions as set forth herein,
or unless this Agreement otherwise terminates
pursuant to its terms, this Agreement shall be
automatically renewed on a month to month basis.
3. Management Standards Manager
agrees to furnish the
services of its organization, to exercise its best
efforts, and to exercise the highest degree
of professional skill and
competence in managing the Property in order to
provide Owner with the maximum economic return
consistent with proper and prudent management.
4. Duties of Manager Owner
delegates and Manager assumes, subject to the
provisions hereof, full control and responsibility
for the Property and its operation in all
respects, including, but not limited to, the
following powers, authorities and responsibilities,
each and all of which are hereby delegated to
Manager by Owner, and each and all of which are
hereby assumed and undertaken by Manager who
covenants and agrees to perform the following, to
wit:
a. Generally to manage the
Property so as to provide residential space to
qualified tenants.
b. To compile and provide to Owner
such monthly, quarterly and annual operating
statements as Owner may request.
c. To supervise and perform
the proper maintenance, repair, equipping and
supply of the Property.
d. To hire, discharge, train,
supervise, pay and control all personnel employed
at the Property at such salaries as Manager may
determine, and in such numbers and of such
experience and skill levels as Manager may deem
necessary to provide adequate management of the
Property it being understood and agreed that Owner
shall have no control or authority whatsoever over
the employees of Manager employed at the Property.
e. To maintain the Property in
accordance with all applicable rules and
regulations of public authorities and to maintain
the operations and physical condition of the
Property in good order.
f. To prepare and file all required
governmental reports, if any.
g. To provide and maintain all
accounting, bookkeeping and record keeping relating to the
operation of the Property.
h. To exercise reasonable efforts to keep
the Property fully occupied.
i. To institute and maintain a program for
tenant billing, to bill and collect all receivables
for the account of Owner in connection with the operation of the
Property, and to immediately turn over all such collected
receivables to Owner. In this regard, it is expressly understood
and agreed that all funds billed or collected shall be owned and
controlled solely by Owner, and that Manager shall have no claim
or entitlement thereto. Any such funds collected by Manager shall
be received and held by Manager in trust for the benefit of Owner
and shall be turned over to Owner with a proper accounting
therefor as soon as practicable.
j. To maintain accurate, complete and separate
records in accordance with generally accepted
accounting standards and procedures,(including tax
basis accounting,) showing income and expenditures
relating to the operation of the Property and from
which accounts payable and accounts receivable,
available cash, and other assets and liabilities
pertaining to the Property can be readily identified
and the amounts thereof determined at any time.
Owner shall have the right at any reasonable time
through its attorney or accountant or other
representative, or in person, to inspect the records
kept by Manager pertaining to the Property,
including, but not limited to, all checks, bills,
invoices, statements, vouchers, cash receipts,
correspondence and all other dealing with the
management of the Property; and Owner shall have the
further right to, at his own expense, have an audit
made of all account books and records pertaining to
the management of the Property.
k.To furnish such
information(including occupancy reports) as may be
requested by Owner from
time to time with respect to the financial, physical or
operational condition of the Property.
l. To furnish monthly to Owner a
detailed statement of all receipts and disbursements for
each month, such statement to be furnished on
or before the 2Oth day of each month for the
preceding month. Such statements shall show the
status of collections and shall be supported by
canceled checks, vouchers, duplicate invoices, and
similar documentation covering all items
of income and expense, which shall be available
for inspection by the Owner's representatives at
all reasonable times. Manager shall also furnish
a monthly operating statement showing the income
and expense for the month and year to date.
Manager shall be under no obligation to advance funds
on behalf of Owner, but in the event disbursements
are in excess of proceeds collected, Owner
agrees to pay such excess promptly upon demand.
m. If such items have not previously
been contracted for, to contract on behalf of Owner for
water, gas, electricity, extermination, telephone service
and other services and commodities necessary for the
operation and maintenance of the Property; provided,
however, that no single
contract for any such item involving an expenditure or
deposit in excess of $5,OOO.OO shall be made by Manager
without the prior approval of Owner.
n. To purchase on behalf of Owner all equipment,
tools, materials, supplies and uniforms necessary for the
maintenance and operation of the Property.
5. Costs of Operation All costs and expenses incurred by
Manager in the Performance of Manager's duties as set forth
in Paragraph 4 above shall be considered costs of operation of
the Property (herein called "Costs of Operation"), for which
Manager shall be entitled to be fully reimbursed by Owner.
Manager may submit to Owner monthly estimates of Costs of
Operation for the Property for the month next succeeding the
month in which such estimates are submitted; within five (5)
days following Owner's receipt of such estimates, Owner shall
advance to Manager the amount of such estimates for
application to the Costs of Operation for the month for
which such estimates are submitted. In the event such
estimates and advances made by Owner pursuant hereto are lower
than the actual Costs of Operation for the month in question,
Owner shall reimburse Manager the amount of such shortage
promptly upon Manager's written request therefor accompanied by
supporting documentation; if, on the other
hand, the amount of such estimates and advances made by Owner
pursuant hereto are in excess of the actual Costs of Operation
for the month in question, Owner, at Owner's option, may
elect to either:
(i) demand that Manager refund such
excess to Owner; or
(ii) credit such overage to the
advances made pursuant to the next month's estimates
of Costs of Operation. All such shortages and
overages shall be adjusted on and as of the end of
each calendar year during the period in which this
Agreement is in force and effect.
6. Compensation of Manager. As
compensation for its providing of services
hereunder, Manager shall be entitled to receive
from Owner and Owner shall be obligated to pay to
Manager a management fee equal to 5%) per month of
the Property's total monthly income which
management fee shall be payable to Manager monthly
during the term hereof. This management fee shall be
in addition to the reimbursement of Costs of
Operation for which Manager is entitled to be
reimbursed, it being agreed that such reimbursement
of Costs of Operation shall not be considered
compensation to the Manager hereunder. In the
event Manager performs special services for Owner
not expressly provided for in this Agreement,
Manager shall be entitled to receive such
additional compensation as may be mutually agreed
upon by Manager and Owner. All rebates, discounts
or commissions collected by Manager or credited to
the Manager's use which relate to the purchasing
of supplies or rendering of services for the
Property shall be fully disclosed to Owner and
shall be fully credited against the Costs of
Operation.
7. Employees of Manager. It is specifically
agreed that all personnel employed in connection
with the on-site operation of the Property shall
be employees of Manager and not of Owner, and will be
hired, paid, trained, supervised and
discharged by
Manager; although the salaries or wages of all such
employees shall be considered Costs of Operation for
which Manager shall be entitled to be reimbursed
hereunder, Manager shall be directly responsible
for the servicing of payroll and all payroll
withholding taxes and reports in connection with such
employees. .
8. Termination on Transfer. Owner shall
notify Manager at least thirty (3O) days prior to
an anticipated transfer of title to or an assignment
or sublease of any leasehold rights pertaining
to any property or properties comprising a part of
the Property. Upon such transfer, this Agreement
shall terminate as to the particular property or
properties made subject to such transfer. Upon such
partial termination, all records in possession
of Manager pertaining to the operation of
the properties so terminated shall be forthwith
delivered to Owner, and all Costs of Operation
and collections pertaining to such transferred
properties shall be settled between Owner and
Manager on and as of the date of such transfer.
Manager's right to compensation as to such
transferred properties shall cease as of the date
of such termination, but Manager shall be entitled
to compensation on a prorated basis for services
rendered prior to the date of such termination.
9. Termination on Dissolution, Bankruptcy
or Assignment for the Benefit of Creditors of
the Manager This Agreement shall terminate
immediately upon the dissolution, bankruptcy or
assignment for the benefit of creditors of the
Manager.
10. Relationship of Parties and Indemnity.
It is understood and agreed that Manager is an
independent contractor, and is not an employee,
representative or agent for Owner for any purpose
whatsoever. This Agreement shall not constitute or
be deemed to constitute a joint venture or
partnership agreement between Owner and Manager.
Manager agrees to indemnify, save, defend and hold
Owner harmless from and against any and all loss,
costs, damages, claims or demands for personal
injury, wrongful death or
malpractice (to the extent that any insurance
coverage therefor is insufficient) which may be
asserted by third parties against Owner at any time
by reason of events occurring during the term of
this Agreement and arising out of or resulting
from any undertaking, act or neglect of Manager, its
agents, employees or any person retained by Manager
to assist it in the discharge of its duties and
obligations hereunder. In the event any
litigation occurs with regard to such claims, Owner
may, at its expense, retain counsel to participate
in such litigation. It is also understood and
agreed that no settlement of any such claim shall be
made without Owner's permission if Owner may have
any responsibility for payment thereof.
11. Use of Property. Manager shall not at
any time use or permit the Property to be used
for purposes other then a residential multifamily
building without the express written permission
of Owner.
12. Possession at Termination. Upon
expiration or earlier full termination of the
Agreement, Manager shall peaceably vacate and
surrender the Property to Owner, shall cooperate
fully with Owner in effecting an orderly transition
of the business of the Property and shall
surrender to Owner all keys, records, contracts
and all other indicia of possession and other
records maintained by Manager in connection with
the operation of the Property.
13. Inspections. Owner or its agents or
representatives shall have the right at all reasonable
times to inspect the
Property and all records pertaining thereto.
14. Notices. All notices required hereunder
shall be in writing and shall be deemed
delivered upon delivery,if personally delivered,
or if delivered by mail, when deposited in the
United States certified mail, postage prepaid,
return receipt requested, properly addressed to
the receiving party at the following addresses:
Owner: Manager:
American Republic Realty Fund 1 Univesco Inc.
6210 Campbell Road, Suite 140 6210 Campbell Road
Dallas, Texas 75248 Suite 140
Dallas, Texas 75248
15. Governing Law. This Agreement shall be
governed by and construed under the laws of the
State of Texas, and all obligations of the
parties created hereunder are performable in the
State of Texas.
16. Parties Bound. This Agreement shall be
binding upon and shall inure to the benefit of
the parties hereto and their respective successors
and assigns.
17. Legal Construction. In the event any one
or more of the provisions contained herein shall for
any reason be held to be invalid, illegal, or
unenforceable in any respect, the
invalidity, illegality or unenforceability shall not
affect any other provision hereof and this
Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been
contained herein.
18. Prior Agreements. This Agreement
constitutes the sole and only agreement of the
parties hereto with respect to the subject matter
hereof, and supersedes any prior understandings or
written or oral agreement between the parties
respecting the within subject matter.
19. Attorney's Fees. If any action at law or
in equity, including an action for declaratory
relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys'
fees from the other party, which fees may be set by
the court in the trial of such action or may be
enforced in a separate action brought for that
purpose, and which fees shall be in addition to any
other relief which may be awarded.
20. Time of Essence. Time is of the
essence in the performance of obligations set forth
in this Agreement.
21. Counterpart Execution This Agreement may
be executed concurrently in one or more
counterparts, each of which shall be deemed an
original, but all of which together shall
constitute
one and the same instrument.
22. Assignment. Notwithstanding anything to the
contrary neither Manager nor Owner shall have the
right to assign, in whole or in part, any of
their respective rights, duties and obligations
under this Agreement.
23. Amendment. This Agreement may not be
modified, amended or altered except by an agreement
in writing signed by Owner and Manager.
EXECUTED to be effective for all purposes as
of the date first written here in above.
Owner:
American Republic Realty Fund 1
6210 Campbell Road
Suite 140
Dallas, Texas 75248
By: Robert J. Werra, General Partner
Robert J. Werra
UNIVESCO INC..
By:
David Bower, Senior Vice President
Management Agreement
by and between
American republic Realty Fund 1
as "Owner"
UNIVESCO INC. as "Manager"
Date: , 19
MULTIFAMILY MANAGEMENT AGREEMENT
This management Agreement is made as of and
effective the first day of February 1, 1991 by and
between Spencer Rd., LTD.., d/b/a Forestwood
Apartments, a (Texas) Limited Partnership
(herein called "Owner"), and UNIVESCO INC., a Texas
corporation (herein called "Manager").
WHEREAS, Owner is the owner of an apartment
community known as Forestwood Apartments (263 Units)
located at (1611 Oak Creek Lane. Bedford,
TX 76022) (hereinafter collectively referred to as
the "Property").
WHEREAS, Manager is in the business of
operating and managing residential multifamily
properties; and
WHEREAS, Owner desires to contract with
Manager to obtain Manager's services as an
independent contractor for the general maintenance,
staffing, operation and management of the Property
(and the employment of all personnel employed
in connection therewith) in all respects except as
limited herein, including matters relating to the
leasing, the maintenance of the Property, the
compliance with rules and regulations of all
public authorities having jurisdiction over the
operation of the Property, the maintenance of
all records, the billing and collection for
Owner and in Owner's name of all charges to
residents, the hiring, training, utilization and
supervision of employees, the preparation and
filing of all required reports, and the maintenance
of the Property and the supplies, equipment,
furniture, furnishings and structures associated
therewith; and
WHEREAS, Manager desires to perform
such management
functions as an independent contractor in
accordance with the terms hereof and for the
consideration provided herein.
NOW, THEREFORE, for and in consideration of the
premises and for the further consideration recited
herein, Owner and Manager agree as follows:
1. Appointment. Owner hereby appoints
Manager as an independent contractor to act as the
exclusive manager of the Property, and the
Manager accepts such appointment, subject to the
terms and conditions set forth herein.
2. Term. This Agreement shall commence as
of the date first written herein, and shall remain
in force and effect until the first day of the
following calendar month; provided, however, that
unless either party hereto gives notice of
termination to the other in accordance with the
applicable notice provisions as set forth herein,
or unless this Agreement otherwise terminates
pursuant to its terms, this Agreement shall be
automatically renewed on a month to month basis.
3. Management Standards Manager agrees to
furnish the
services of its organization, to exercise its best
efforts, and to exercise the highest degree of
professional skill and competence in
managing the Property in order to provide Owner
with the maximum economic return consistent with
proper and prudent management.
4. Duties of Manager Owner delegates
and Manager
assumes, subject to the provisions hereof, full
control and responsibility for the Property and
its operation inall respects, including, but not
limited to, the following powers, authorities and
responsibilities, each and all of which are
hereby delegated to Manager by Owner, and each and
all of which are hereby assumed and undertaken by
Manager who covenants and agrees to perform the
following, to wit:
a. Generally to manage the Property so
as to
provide residential space to qualified tenants.
b. To compile and provide to Owner such
monthly,
quarterly and annual operating statements as
Owner may request.
c. To supervise and perform the
proper maintenance, repair, equipping and supply of
the Property.
d. To hire, discharge, train, supervise, pay
and control all personnel employed at the Property at
such salaries as Manager may determine, and in
such numbers and of such experience and skill levels
as Manager may deem necessary to provide
adequate management of the Property it being
understood and agreed that Owner shall have no
control or authority whatsoever over the employees of
Manager employed at the Property.
e. To maintain the Property in accordance
with all applicable rules and regulations of
public authorities and to maintain the operations
and
physical condition of the Property in good order.
f. To prepare and file all required
governmental reports, if any.
g. To provide and maintain
all accounting, bookkeeping and record
keeping relating to the operation of
the Property.
h. To exercise reasonable efforts
to keep the Property fully occupied.
i. To institute and maintain a
program for tenant billing, to bill
and collect all receivables for the
account of Owner in connection with the
operation of the Property, and to
immediately turn over all such collected
receivables to Owner. In this regard,
it is expressly understood and agreed
that all funds
billed or collected shall be owned and
controlled solely by Owner, and
that Manager shall have no claim or
entitlement thereto. Any such funds
collected by Manager shall be received
and held by Manager in trust for the
benefit of Owner and shall be turned
over to Owner with a proper
accounting therefor as soon as
practicable.
j. To maintain accurate, complete
and separate records in accordance with
generally accepted accounting
standards and procedures,(including tax
basis
accounting,) showing income and
expenditures relating to the operation
of the Property and from which accounts
payable and accounts receivable,
available cash, and other assets and
liabilities pertaining to the Property
can be readily identified and the
amounts thereof determined
at any time. Owner shall have the
right at any reasonable time through
its attorney or accountant or other
representative, or in person, to inspect
the records kept by Manager
pertaining to the Property,
including, but not limited to, all
checks, bills, invoices, statements,
vouchers, cash receipts,
correspondence and all other dealing
with the management of the Property; and
Owner shall have the further right to,
at his own expense, have an audit made
of all account books and records
pertaining to the management of the
Property.
k. To furnish such information
(including occupancy reports) as may be requested
by Owner from time to time with
respect to the financial, physical or
operational condition of the Property.
l. To furnish monthly to Owner a
detailed statement of all receipts and
disbursements for each month, such statement
to be furnished on or before
the 2Oth day of each month for the
preceding month. Such statements shall
show the status of collections and
shall be supported by canceled checks,
vouchers, duplicate invoices, and
similar documentation covering all
items of income and expense, which
shall be available for inspection by
the Owner's representatives at all
reasonable times. Manager shall also
furnish a monthly operating statement
showing the income and expense for
the month and year to date. Manager
shall be under no obligation to advance
funds on behalf of Owner, but in the
event disbursements are in excess of
proceeds collected, Owner agrees
to pay such excess promptly upon
demand.
m. If such items have not previously been
contracted for, to contract on behalf of Owner for water, gas,
electricity, extermination, telephone service and other
services and commodities necessary for the operation and
maintenance of the Property; provided, however, that no single
contract for any such item involving an expenditure or
deposit in excess of $5,OOO.OO shall be made by Manager without
the prior approval of Owner.
n. To purchase on behalf of Owner all equipment,
tools, materials, supplies and uniforms necessary for the
maintenance and operation of the Property.
5. Costs of Operation All costs and expenses incurred
by Manager in the Performance of Manager's duties as set forth
in Paragraph 4 above shall be considered costs of operation of
the Property (herein called "Costs of Operation"), for which
Manager shall be entitled to be fully reimbursed by Owner.
Manager may submit to Owner monthly estimates of Costs of
Operation for the Property for the month next succeeding the
month in which such estimates are submitted; within five (5)
days following Owner's receipt of such estimates, Owner shall
advance to Manager the amount of such estimates for
application to the Costs of Operation for the month for
which such estimates are submitted. In the event such
estimates and advances made by Owner pursuant hereto are lower
than the actual Costs of Operation for the month in question,
Owner shall reimburse Manager the amount of such shortage
promptly upon Manager's written request therefor accompanied by
supporting documentation; if, on the other
hand, the amount of such estimates and advances made by Owner
pursuant hereto are in excess of the actual Costs of Operation
for the month in question, Owner, at Owner's option, may
elect to either:
(iii) demand that Manager refund such excess to Owner; or
(iv) credit such overage to the advances made pursuant to
the next month's estimates of Costs of Operation.
All such shortages and overages shall be adjusted on and as
of the end of each calendar year during the period
in which this Agreement is in force and effect.
6. Compensation of Manager. As
compensation for its providing of services
hereunder, Manager shall be entitled to receive
from Owner and Owner shall be obligated to pay to
Manager a management fee equal to 5%) per month of
the Property's total monthly income which
management fee shall be payable to Manager monthly
during the term hereof. This management fee shall be
in addition to the reimbursement of Costs of
Operation for which Manager is entitled to be
reimbursed, it being agreed that such reimbursement
of Costs of Operation shall not be considered
compensation to the Manager hereunder. In the
event Manager performs special services for Owner
not expressly provided for in this Agreement,
Manager shall be entitled to receive such
additional compensation as may be mutually agreed
upon by Manager and Owner. All rebates, discounts
or commissions collected by Manager or credited to
the Manager's use which relate to the purchasing
of supplies or rendering of services for the
Property shall be fully disclosed to Owner and
shall be fully credited against the Costs of
Operation.
7. Employees of Manager. It is specifically
agreed that all personnel employed in connection
with the on-site operation of the Property shall
be employees of Manager and not of Owner, and will be
hired, paid, trained, supervised and discharged
by Manager; although the salaries or wages of all
such employees shall be considered Costs of
Operation for which Manager shall be entitled to be
reimbursed hereunder, Manager shall be directly
responsible for the servicing of payroll and
all payroll withholding taxes and reports in
connection with such employees.
8. Termination on Transfer. Owner shall
notify Manager at least thirty (3O) days prior to
an anticipated transfer of title to or an
assignment or sublease of any leasehold rights
pertaining to any property or properties comprising a
part of the Property. Upon such transfer, this
Agreement shall terminate as to the particular
property or properties made subject to such
transfer. Upon such partial termination, all
records in possession of Manager pertaining to
the operation of the properties so terminated
shall be forthwith delivered to Owner, and all
Costs of Operation and collections pertaining to
such transferred properties shall be settled between
Owner and Manager on and as of the date of such
transfer. Manager's right to compensation as to
such transferred properties shall cease as of the
date of such termination, but Manager shall be
entitled to compensation on a prorated basis for
services rendered prior to the date of such
termination.
9. Termination on Dissolution, Bankruptcy
or Assignment for the Benefit of Creditors of the
Manager This Agreement shall terminate
immediately upon the dissolution, bankruptcy or
assignment for the benefit of creditors of the
Manager.
10. Relationship of Parties and Indemnity. It
is understood and agreed that Manager is an
independent contractor, and is not an employee,
representative or agent for Owner for any purpose
whatsoever. This Agreement shall not constitute or
be deemed to constitute a joint venture or
partnership agreement between Owner and Manager.
Manager agrees to indemnify, save, defend and hold
Owner harmless from and against any and all loss,
costs, damages, claims or demands for personal
injury, wrongful death or
malpractice (to the extent that any insurance
coverage therefor is insufficient) which may be
asserted by third parties against Owner at any time
by reason of events occurring during the term of
this Agreement and arising out of or resulting
from any undertaking, act or neglect of Manager, its
agents, employees or any person retained by Manager
to assist it in the discharge
of its duties and obligations hereunder. In
the event any
litigation occurs with regard to such claims, Owner
may, at its expense, retain counsel to participate
in such litigation. It is also understood and
agreed that no settlement of any such claim shall be
made without Owner's permission if Owner may
have any responsibility for payment thereof.
11. Use of Property. Manager shall not at any
time use or permit the Property to be used for
purposes other then a residential multifamily
building without the express written permission of
Owner.
12. Possession at Termination. Upon
expiration or earlier full termination of the
Agreement, Manager shall peaceably vacate and
surrender the Property to Owner, shall cooperate
fully with Owner in effecting an orderly transition
of the business of the Property and shall
surrender to Owner all keys, records, contracts
and all other indicia of possession and other
records maintained by Manager in connection with
the operation of the Property.
13. Inspections. Owner or its agents or
representatives shall have the right at all
reasonable times to inspect the
Property and all records pertaining thereto.
14. Notices. All notices required hereunder
shall be in writing and shall be deemed
delivered upon delivery, if
personally delivered, or if delivered by mail, when
deposited in the United States certified mail,
postage prepaid, return receipt requested, properly
addressed to the receiving party at the
following addresses:
Owner: Manager:
Spencer Rd, LTD. Univesco Inc.
6210 Campbell Road, Suite 140 6210 Campbell Road
Dallas, Texas 75248 Suite 140
Dallas, Texas 75248
15. Governing Law. This Agreement shall be
governed by and construed under the laws of the
State of Texas, and all obligations of the
parties created hereunder are performable in the
State of Texas.
16. Parties Bound. This Agreement shall be
binding upon and shall inure to the benefit of
the parties hereto and their respective successors
and assigns.
17. Legal Construction. In the event any one
or more of the provisions contained herein shall for
any reason be held to be invalid, illegal, or
unenforceable in any respect, the
invalidity, illegality or unenforceability shall not
affect any other provision hereof and this
Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been
contained herein.
18. Prior Agreements. This Agreement
constitutes the sole and only agreement of the
parties hereto with respect to the subject matter
hereof, and supersedes any prior understandings or
written or oral agreement between the parties
respecting the within subject matter.
19. Attorney's Fees. If any action at law or
in equity, including an action for declaratory
relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys'
fees from the other party, which fees may be set by
the court in the trial of such action or may be
enforced in a separate action brought for that
purpose, and which fees shall be in addition to any
other relief which may be awarded.
20. Time of Essence. Time is of the
essence in the performance of obligations set forth
in this Agreement.
21. Counterpart Execution This Agreement may
be executed concurrently in one or more
counterparts, each of which shall be deemed an
original, but all of which together shall
constitute
one and the same instrument.
22. Assignment. Notwithstanding anything to
the contrary neither Manager nor Owner shall have
the right to assign, in whole or in part, any
of their respective rights, duties and obligations
under this Agreement.
23. Amendment. This Agreement may not be
modified, amended or altered except by an agreement
in writing signed by Owner and Manager.
EXECUTED to be effective for all purposes as
of the date first written here in above.
Owner:
American Republic Realty Fund 1
6210 Campbell Road
Suite 140
Dallas, Texas 75248
By: Robert J. Werra, General Partner
Robert J. Werra
UNIVESCO INC.
By:
David Bower, Senior Vice President
Management Agreement
by and between
American republic Realty Fund 1
as "Owner"
UNIVESCO INC. as "Manager"
Date:
, 19
