SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-No.2
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________ to ________________
Commission File No. 0-16456
Development Partners II
(A Massachusetts Limited Partnership)
(Exact name of registrant as specified in its charter)
Massachusetts 04-2946004
(State or other jurisdiction of (I.R.S.
Employer incorporation or organization)
Identification No.)
5110 Langdale Way, Colorado Springs, CO 80906
(Address of principal executive offices) (Zip Code)
(719) 527-0544
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units of Limited
Partnership Interests
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 and 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 ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Aggregate market value of voting securities held by non-affiliates: Not
applicable, since securities are not actively traded on any exchange.
Documents incorporated by reference: None
The Exhibit Index is located on page __
EXPLANATORY NOTE: This Amendment is being filed to include a signed
Report of Independent Accountants.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1,2 See Page F-2
3 See Exhibit Index contained herein
(b) Reports on Form 8-K
The Partnership has not filed, and was not required to
file, any reports on Form 8-K during the last quarter of
1996.
(c) See Exhibit Index contained herein
(d) See Page F-2.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P., A California Limited Partnership,
General Partner
By: L'Auberge Communities, Inc., its General Partner
By: ____/s/ Earl C. Robertson________________
Earl C. Robertson, Executive Vice President and
Chief Financial Officer
Date: October 20, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
___/s/ Stephen B. Boyle _____ Director, President October 20, 1997
STEPHEN B. BOYLE Principal Executive
Officer of L'Auberge Communities, Inc.
___/s/ Earl C. Robertson ______ Executive Vice President October 20, 1997
EARL C. ROBERTSON Principal Financial Officer of
L'Auberge Communities, Inc.
<PAGE>
APPENDIX A
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
---------
CONSOLIDATED FINANCIAL STATEMENTS
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
For the year ended December 31, 1996
<PAGE>
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants .................................... F-3
Consolidated Balance Sheets at December 31, 1996 and 1995 ............ F-4
Consolidated Statements of Operations for the years ended December 31, 1996,
1995 and 1994 ....................................................... F-5
Consolidated Statements of Partners' Equity (Deficit) for the years ended
December 31, 1996, 1995 and 1994 ..................................... F-6
Consolidated Statements of Cash Flows for the years ended December 31, 1996,
1995 and 1994 F-7 -- F-8
Notes to Consolidated Financial Statements ..................... F-9 -- F-18
All Schedules are omitted as they are not applicable, not required, or the
information is provided in the financial statements or the notes thereto.
<PAGE>
Report of Independent Accountants
To the Partners of
Development Partners II
(A Massachusetts Limited Partnership):
We have audited the accompanying consolidated balance sheets of
Development Partners II (A Massachusetts Limited Partnership) and subsidiaries
as of December 31, 1996 and 1995, and the related consolidated statements of
operations, partners' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1996. These financial statements are the
responsibility of the General Partners of the Partnership. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
General Partners of the Partnership, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Development Partners II (A Massachusetts Limited Partnership) and subsidiaries
as of December 31, 1996 and 1995 and the consolidated results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Denver, Colorado
February 28, 1997
<PAGE>
<TABLE>
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
---------------
ASSETS
1996 1995
---- ----
Property, at cost
<S> <C> <C>
Land $5,150,693 $5,148,247
Buildings and improvements 15,989,689 15,989,689
Equipment, furnishings and fixtures 2,311,300 2,077,104
--------------- ---------------
23,451,682 23,215,040
Less accumulated depreciation (4,807,665) (4,359,624)
--------------- ---------------
18,644,017 18,855,416
Cash and cash equivalents 318,746 432,596
Short-term investments 199,599
-
Deposits and prepaid expenses 2,512 2,472
Accounts receivable 350 3,300
Investment in partnership 1,210,686 1,459,833
Deferred costs 9,300
-
Deferred expenses, net of accumulated
amortization of $513,417 and $492,788 13,755 34,384
--------------- ---------------
Total assets $20,190,066 $20,996,900
=============== ===============
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable $9,890,787 $9,991,674
Accounts payable 101,716 87,245
Accrued expenses 176,354 178,844
Due to affiliates (Note 9) 17,430 11,678
Rents received in advance 2,607
-
Tenant security deposits 60,385 60,630
Minority Interest 738,457 754,849
--------------- ---------------
Total liabilities 10,987,736 11,084,920
Partners' equity 9,202,330 9,911,980
--------------- ---------------
Total liabilities and partners' equity $20,190,066 $20,996,900
=============== ===============
</TABLE>
<PAGE>
<TABLE>
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 1996, 1995 and 1994
-------------
1996 1995 1994
---- ---- ----
Revenue:
<S> <C> <C> <C>
Rental income $2,497,278 $2,668,640 $2,616,008
Interest income 18,246 37,702 38,748
--------------- --------------- ---------------
2,515,524 2,706,342 2,654,756
Operating Expenses 1,207,014 1,179,018 1,128,050
Interest 977,285 986,730 995,815
Depreciation and amortization 468,672 445,597 453,998
General and administrative 353,635 208,070 171,803
Equity in (income) loss from partnership 68,837 (13,892) (8,517)
--------------- --------------- ---------------
3,075,443 2,805,523 2,741,149
--------------- --------------- ---------------
Net loss before minority interest (559,919) (99,181) (86,393)
Minority interests' equity in
subsidiary (income) loss (8,290) (5,885) 3,195
--------------- --------------- ---------------
Net loss ($568,209) ($105,066) ($83,198)
=============== =============== ===============
Net loss allocated to:
General Partners ($5,682) ($1,051) ($832)
Per unit net loss allocated to Investor Limited Partner interest:
36,963 units issued ($15.22) ($2.81) ($2.23)
</TABLE>
<PAGE>
<TABLE>
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
For the years ended December 31, 1996, 1995 and 1994
-------------
Investor Total
General Limited Partners'
Partners Partners Equity
<S> <C> <C> <C>
Balance at December 31, 1993 ($59,083) $11,013,624 $10,954,541
Cash distributions (10,184) (499,000) (509,184)
Net loss (832) (82,366) (83,198)
--------------- --------------- ---------------
Balance at December 31, 1994 (70,099) 10,432,258 10,362,159
Cash distributions (6,902) (338,211) (345,113)
Net loss (1,051) (104,015) (105,066)
--------------- --------------- ---------------
Balance at December 31, 1995 (78,052) 9,990,032 9,911,980
Cash distributions (2,829) (138,612) (141,441)
Net loss (5,682) (562,527) (568,209)
--------------- --------------- ---------------
Balance at December 31, 1996 ($86,563) $9,288,893 $9,202,330
=============== =============== ===============
</TABLE>
<PAGE>
<TABLE>
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1996, 1995 and 1994
-------------
1996 1995 1994
---- ---- ----
Cash flows from operating activities:
<S> <C> <C> <C>
Interest received $17,516 $50,855 $35,870
Cash received from rental income 2,499,640 2,658,246 2,604,419
General and administrative expenses (339,475) (206,486) (184,636)
Operating expense (1,198,060) (1,116,194) (1,113,523)
Interest paid (977,699) (987,104) (996,155)
--------------- --------------- ---------------
Net cash provided by operating activities 1,922 399,317 345,975
Cash flows from investing activities:
Purchase of fixed assets (236,642) (488,268) (34,459)
Proceeds from maturities of short-term investments 200,329 635,346 187,341
Distributions received from partnership 180,311 70,472 141,710
Deferred costs 9,300 15,553 (24,853)
--------------- --------------- ---------------
Net cash provided by investing activities 153,298 233,103 269,739
Cash flows from financing activities:
Distributions to partners (141,441) (345,113) (509,184)
Principal payments on mortgage notes payable (100,887) (91,999) (82,432)
Distributions paid to the minority interest (30,795) (15,490) (23,050)
Contributions from the minority interest 6,113 58,034 7,262
Cash paid for deposits (2,060) 1,415 (64)
--------------- --------------- ---------------
Net cash used by financing activities (269,070) (393,153) (607,468)
--------------- --------------- ---------------
Net increase (decrease) in cash and cash equivalents (113,850) 239,267 8,246
Cash and cash equivalents at beginning of year 432,596 193,329 185,083
--------------- --------------- ---------------
Cash and cash equivalents at end of year $318,746 $432,596 $193,329
=============== =============== ===============
</TABLE>
<PAGE>
DEVELOPMENT PARTNERS II
(A Massachusetts Limited Partnership)
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1996, 1995 and 1994
-------------
Reconciliation of net loss to net cash provided by operating activities:
<TABLE>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net loss ($568,209) ($105,066) ($83,198)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 468,672 445,597 453,998
Equity in (income) loss from partnership 68,837 (13,892) (8,517)
Minority interests' equity in subsidiary income (loss) 8,290 5,885 (3,195)
Change in assets and liabilities net of effects of investing and financing
activities:
Decrease (increase) in accounts and interest 2,217 10,336 (2,878)
receivable
Decrease in prepaid expenses 2,020 470
Increase in accounts payable and accrued expenses 11,981 66,781 15,557
(Decrease) increase in due to affiliates 5,752 70 (14,673)
(Decrease) increase in rents received in advance 2,607 (4,988) (480)
Decrease in tenant security deposits (245) (5,406) (11,109)
--------------- --------------- ---------------
Net cash provided by operating activities $1,922 $399,317 $345,975
=============== =============== ===============
</TABLE>
<PAGE>
1. Organization of Partnership:
Development Partners II (A Massachusetts Limited Partnership) (the
"Partnership"), formerly Berry and Boyle Development Partners II, was formed on
January 9, 1987. GP L'Auberge Communities, L.P., a California Limited
Partnership, (formerly Berry and Boyle Management) and Stephen B. Boyle are the
General Partners. In September, 1995, with the consent of Limited Partners
holding a majority of the outstanding Units, as well as the consent of the
mortgage lenders for the Partnership's three properties, Richard G. Berry
resigned as a general partner of the Partnership. Except under certain limited
circumstances upon termination of the Partnership, the General Partners are not
required to make any additional capital contributions. The General Partners or
their affiliates will receive various fees for services and reimbursement for
various organizational and selling costs incurred on behalf of the Partnership.
On February 13, 1987 the Securities and Exchange Commission declared the
Partnership's public offering of up to 60,000 units of Limited Partnership
Interests at $500 per unit (the "Units") effective and the marketing and sale of
the Units commenced shortly thereafter. The initial closing of the offering took
place on June 30, 1987 at which time the holders of 5,231 Units were admitted to
the Partnership. The Partnership continued to admit subscribers monthly
thereafter until August 10, 1988 when it terminated the offering having admitted
1,918 investors acquiring 36,963 Units totaling $18,481,500. There were 1,907
investors at December 31, 1996.
The Partnership will continue until December 31, 2010, unless earlier terminated
by the sale of all, or substantially all, of the assets of the Partnership, or
as otherwise provided in the Partnership Agreement.
2. Significant Accounting Policies:
A. Basis of Presentation
The consolidated financial statements include the accounts of the
Partnership and its subsidiaries: The Pines on Cheyenne Creek Joint
Venture, Mariposa Joint Venture and Canyon View East Joint Venture. All
intercompany accounts and transactions have been eliminated in
consolidation. The Partnership accounts for its investment in Casabella
Associates utilizing the equity method of accounting. The Partnership's
investment account is adjusted to reflect its pro rata share of
profits, losses and distributions from Casabella Associates. Refer to
Notes 5 and 6 regarding the termination of the joint ventures.
The Partnership follows the accrual basis of accounting.
B. Cash and Cash Equivalents
The Partnership considers all highly liquid debt instruments purchased
with a maturity of three months or less to be cash equivalents. The
carrying value of cash and cash equivalents approximates fair value. It
is the Partnership's policy to invest cash in income-producing
temporary cash investments. The Partnership mitigates any potential
risk from such concentration of credit by placing investments with high
quality financial institutions.
C. Short-term investments
At December 31, 1995, short term investments consist solely of various
forms of U. S. Government backed securities, with an aggregate par
value of $200,000, which mature in February, 1996. As of December 31,
1996 there were no short term investments. Investments are recorded at
amortized costs which approximates market value.
D. Significant Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
E. Depreciation
Depreciation is provided for by the use of the straight-line method
over estimated useful lives as follows:
Buildings and improvements 39-40 years
Equipment, furnishings and fixtures 5-15 years
F. Deferred Expenses
Costs of obtaining the mortgages on the properties are being amortized
over the mortgage term using the straight-line method, which
approximates the effective interest method.
G. Income Taxes
The Partnership is not liable for Federal or state income taxes because
Partnership income or loss is allocated to the Partners for income tax
purposes. If the Partnership's tax returns are examined by the Internal
Revenue Service or state taxing authority and such an examination
results in a change in Partnership taxable income (loss), such change
will be reported to the Partners.
H. Rental Income
Leases require the payment of rent in advance, however, rental income
is recorded as earned.
I. Long-Lived Assets
The Partnership's long-lived assets include property and equipment. On
a quarterly basis, the partnership evaluates the recoverability of the
rental property using undiscounted cash flow from operations.
J. Reclassification
Certain items in the financial statements for the years ended December
31, 1995 and 1994 have been reclassified to conform to the 1996
presentation.
<PAGE>
3. Property, at Cost:
Property, at cost, consisted of the following at December 31, 1996:
<TABLE>
Initial Costs Amount at Which carried
Cost Capitalized
to Subsequent at Close of Period
Partnership to
Acquisition
------------------------------------ -------------------------------------------------------------------
Buildings Equipment, Buildings Equipment, Buildings Equipment,
Property and Furnishings and Furnishings and Furnishings
Description Land Improvements & Fixtures Land Improvements & Fixtures Land Improvements & Fixtures Total
- -------------------------------------------------------------------------------------- ------------------------------------------
L'Auberge Cheyenne Creek,
a 108-unit
residential
rental complex
located in
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Colo Springs, $1,865,535 $6,105,495 $657,308 $0 $47,529 $503,620 $1,865,535 $6,153,024 $1,160,928 $9,179,487
Colo
Mariposa, an 84-unit
residential rental
complex located in
Scottsdale,
Arizona 1,428,347 3,979,992 375,165 0 11,153 152,340 1,428,347 3,991,145 527,505 5,946,997
Canyon View East, a 96-unit
residential rental
complex located in
Tucson,
Arizona 1,844,761 5,801,389 500,895 12,050 44,131 121,972 1,856,811 5,845,520 622,867 8,325,198
-------------------------------------------------------------------- ------------------------------------------------
$5,138,643 $15,886,876 $1,533,368 $12,050 $102,813 $777,932 $5,150,693 $15,989,689 $2,311,300 $23,451,682
==================================== ================================== =============================================
</TABLE>
Depreciation expense for the years ended December 31, 1996 1995 and 1994 and
accumulated depreciation
at December 31, 1996 and 1995 consisted of
the following:
<TABLE>
Accumulated
Depreciation
Depreciation Expense December 31,
1996 1995 1996 1995
1994
<S> <C> <C> <C> <C> <C>
Buildings and improvements $397,172 $399,602 $399,602 $3,180,253 $2,783,081
Equipment, furnishings and fixtures 50,869 33,764 33,764 1,627,412 1,576,543
------------------------------------------------------------------------
$448,041 $433,366 $433,366 $4,807,665 $4,359,624
========================================================================
</TABLE>
Each of the properties is encumbered by a nonrecourse mortgage note payable (see
Note 7).
<PAGE>
4. Cash and Cash Equivalents:
Cash and cash equivalents at December 31, 1996 and 1995 consisted of the
following:
1996 1995
-------- --------
Cash on hand .......... $107,660 $ 56,838
Certificate of deposits 211,086 100,000
Money market accounts . _______ 275,758
--------
$318,746 $432,596
-------- --------
5. Joint Venture and Property Acquisitions:
The Partnership has invested in three properties located in Scottsdale and
Tucson, Arizona and Colorado Springs, Colorado. The success of the Partnership
will depend upon factors which are difficult to predict including general
economic and real estate market conditions, both on a national basis and in the
areas where the Partnership's investments are located. The Mariposa joint
venture was effectively terminated on December 31, 1996. The Partnership has
eliminated the minority interest related to this joint venture, as such, the
Partnership owns 100% of the underlying assets as of December 31, 1996.
Cheyenne Creek
On September 26, 1988, the Partnership and a limited partnership affiliated with
the General Partners (the "Affiliated Partnership") acquired L'Auberge Cheyenne
Creek ("Cheyenne Creek"), formerly The Pines on Cheyenne Creek, a 108-unit
residential property located in Colorado Springs, Colorado and simultaneously
contributed the property to the Pines on Cheyenne Creek Joint Venture comprised
of the Partnership, the Affiliated Partnership and the property developer. The
Partnership owns a majority interest in the Pines on Cheyenne Creek Joint
Venture and, therefore, the accounts and operations of the Pines on Cheyenne
Creek Joint Venture have been consolidated into the Partnership. The Affiliated
Partnership owns an 18% interest in the Pines on Cheyenne Creek. The Partnership
and the Affiliated Partnership have been designated the co-managing joint
venture partners of the Pines on Cheyenne Creek Joint Venture and will have
control over all decisions affecting the joint venture and the property.
The co-venture partner was Highland Properties, Inc. ("Highland"), a Colorado
based residential development, construction and management firm. Highland
developed the property known as L'Auberge Cheyenne Creek.
In accordance with the terms of the purchase agreement joint venture agreement,
through December 31, 1996, the Partnership has contributed $4,720,041 to the
Pines on Cheyenne Creek Joint Venture joint venture which was used to repay a
portion of the construction loan from a third party lender, to pay certain costs
related to the refinancing of the permanent loan, to cover operating deficits
incurred during the lease up period and to fund certain capital improvements. In
addition, the Partnership funded $470,870 of property acquisition costs which
were subsequently treated as a capital contribution to the Pines on Cheyenne
Creek Joint Venture.
For the years ended December 31, 1996, 1995 and 1994, The Pines on Cheyenne
Creek Joint Venture had net income of $44,959, $31,912 and a net loss of
$17,328, respectively.
JANUARY 1, 1996 THROUGH JULY 2, 1996
Net cash from operations (as defined in the joint venture agreement) was to be
distributed as available to each joint venture partner quarterly as follows:
First, to the Partnership and the Affiliated Partnership,
proportionately, an amount equal to 11.25% per annum, noncumulative
(computed daily on a simple noncompounded basis from the date of
completion funding) of their respective capital investment (as defined
in the joint venture agreement);
Second, the balance 65.25% to the Partnership, 14.75% to the Affiliated
Partnership, and 20% to the property developer.
All losses from operations and depreciation for the Pines on Cheyenne Creek
Joint Venture were allocated 81.56% to the Partnership and 18.44% to the
Affiliated Partnership, in proportion to their respective joint venture
interest.
All profits from operations to the extent of cash distributions shall first be
allocated to the Partnership, the Affiliated Partnership, and the property
developer in the same proportion as the cash distributions. Any remaining
profits were allocated 65.25% to the Partnership, 14.75% to the Affiliated
Partnership, and 20% to the property developer.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
JULY 3, 1996 THROUGH DECEMBER 31, 1996
On July 3, 1996, the Partnership and certain affiliates consummated an agreement
with Highland Properties, Inc. ("Highland") which separated the interests of
Highland and the Partnership, thus affording the Partnership greater flexibility
in the operation and disposition of the property. In consideration of a payment
by the Partnership, to Highland totaling $8,600, and delivery of certain mutual
releases, Highland (i) relinquished its option to exercise its rights of first
refusal with regard to the sale of the property and (ii) assigned all of its
interest in the L'Auberge Cheyenne Creek Joint Venture to the Partnership,
(while preserving the economic interests of the venturer in these Joint
Ventures), which resulted in the dissolution of the L'Auberge Cheyenne Creek
Joint Venture. Highland may still share in the cash flow distributions or
proceeds from sale if certain performance levels are met.
Mariposa
On February 3, 1989, the Partnership acquired a joint venture interest in the
Mariposa Joint Venture which owns and operates an 84-unit residential property
located in Scottsdale, Arizona known as Mariposa. Since the Partnership owns a
majority interest in the Mariposa Joint Venture, the accounts and operations of
the Mariposa Joint Venture have been consolidated into those of the Partnership.
The Partnership has been designated the managing joint venture partner of the
Mariposa Joint Venture and will have control over all decisions affecting the
Mariposa Joint Venture and the property. The Mariposa joint venture was
effectively terminated on December 31, 1996. The Partnership has eliminated the
minority interest related to this joint venture, as such, the Partnership owns
100% of the underlying assets as of December 31, 1996.
The co-venture partner was an affiliate of Evans Withycombe, Inc. ("EWI"), a
Phoenix based residential development, construction and management firm. EWI
developed the property known as Mariposa.
In accordance with the terms of the purchase agreement and the joint venture
agreement, through December 31, 1996, the Partnership has contributed $3,238,572
to the Mariposa Joint Venture, which was used to: (1) repay a portion of the
construction loan from a third party lender, (2) cover operating deficits
incurred during the lease up period, (3) pay for certain capital improvements,
(4) fund $430,474 of property acquisition costs and (5) pay certain costs
associated with the refinancing of the permanent loan.
For the years ended December 31, 1996, 1995 and 1994, the Mariposa had net loss
of $49,265, and net income of $42,932 and $34,546, respectively.
JANUARY 1, 1996 THROUGH MAY 13, 1996
Net cash from operations (as defined in the joint venture agreement) was to be
distributed, as available, to each joint venture partner, not less often than
quarterly, as follows:
First, to the Partnership an amount equal to 10.6% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's capital investment (as
defined in the joint venture agreement);
Second, the balance 70% to the Partnership and 30% to the other joint
venture partner.
All losses from operations and depreciation for the Mariposa Joint Venture were
allocated 99.5% to the Partnership and 0.5% to the other joint venture partner.
All profits from operations shall be allocated to each joint venture partner pro
rata in accordance with the distribution of net cash from operations for such
fiscal year.
In the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
MAY 14, 1996 THROUGH DECEMBER 31, 1996
On May 14, 1996, the Partnership and certain affiliates consummated an agreement
with Evans Withycombe Management, Inc. and certain of its affiliates ("EWI")
which separated the interests of EWI and the Partnership, thus affording the
Partnership greater flexibility in the operation and disposition of the
properties. In consideration of a payment by the Partnership to EWI of $38,732
and for certain mutual releases, EWI (i) relinquished its contract to manage
certain Partnership properties and its option to exercise its rights of first
refusal with regard to the sale of those properties and (ii) assigned all of its
interest in the Mariposa Joint Venture to the Partnership (while preserving the
economic interests of the venturer in the Joint Venture), which resulting in the
dissolution of the Mariposa Joint Venture. EWI may still share in the cash flow
distributions or proceeds from sale if certain performance levels are met.
Canyon View East
On March 8, 1989, the Partnership acquired an interest in the Canyon View East
Joint Venture which owns and operates a 96-unit residential property located in
Tucson, Arizona known as Canyon View East. Since the Partnership owns a majority
interest in the Canyon View East Joint Venture, the accounts and operations of
the joint venture have been consolidated into those of the Partnership. The
Partnership has been designated the managing joint venture partner of the Canyon
View East Joint Venture and will have control over all decisions affecting the
Canyon View East Joint Venture and the property. In accordance with the terms of
the purchase agreement and the joint venture agreement, the Partnership has
contributed $4,857,202 to the Canyon View East Joint Venture through December
31, 1996, which was used to: (1) repay a portion of the construction loan from a
third party lender, (2) cover operating deficits incurred during the lease up
period, (3) fund $523,022 of property acquisition costs and (5) pay certain
costs associated with the permanent loan refinancing.
For the years ended December 31, 1996, 1995 and 1994, the Canyon View East Joint
Venture had a net loss of $138,599, $37,334, and a net income of $741,
respectively.
Net cash from operations (as defined in the joint venture agreement) is to be
distributed, as available, to each joint venture partner, not less often than
quarterly, as follows:
First, to the Partnership an amount equal to 11.25% per annum,
noncumulative (computed daily on a simple noncompounded basis from the
date of completion funding) of the Partnership's capital investment (as
defined in the joint venture agreement);
Second, the balance 75% to the Partnership and 25% to the other joint
venture partners.
All losses from operations and depreciation for the Canyon View East Joint
Venture are allocated 100% to the Partnership.
All profits from operations shall be allocated to each joint venture partner in
accordance with, and to the extent of, the distribution of net cash from
operations. Any excess profits shall be allocated 100% to the Partnership. In
the case of certain capital transactions and distributions as defined in the
joint venture agreement, the allocation of related profits, losses and cash
distributions, if any, would be different than as described above and would be
effected by the relative balances in the individual partners' capital accounts.
6. Investment in Partnership:
On September 28, 1990, the Partnership contributed $1,800,000 to purchase an
approximate 38% interest in Casabella Associates, a general partnership among
the Partnership, Berry and Boyle Development Partners (A Massachusetts Limited
Partnership) ("DPI") and Berry and Boyle Development Partners III (A
Massachusetts Limited Partnership) ("DPIII"). In addition to its contribution
referred to above, the Partnership incurred $268,861 of acquisition costs,
including $186,300 in acquisition fees paid to the General Partners. The
difference between the partnership's carrying value of the investment in
Casabella Associates and the amount of underlying equity in net assets is
$186,300, representing a portion of the acquisition costs stated above that were
not recorded on the books of Casabella Associates.
On September 28, 1990, Casabella Associates purchased a majority interest in the
Casabella I Joint Venture, an Arizona joint venture that owned and operated
Casabella Phase I, a 61-unit residential property located in Scottsdale,
Arizona. On April 23, 1991, Casabella Associates, acquired a majority interest
in the Casabella Joint Venture which owns Casabella Phase II, a 93-unit
residential community, located adjacent to Casabella Phase I. On that date,
Casabella Associates and EW Casabella I Limited Partnership contributed their
interests in the Casabella I Joint Venture to the Casabella Joint Venture. In
addition, the permanent lender funded a $7,300,000 permanent loan, the proceeds
of which were used to refinance the $2,700,000 loan pertaining to Phase I and,
together with cash contributions of Casabella Associates, repay the construction
loan for Phase II. As a result of such transactions, by operation of law,
Casabella Joint Venture, which is comprised of Casabella Associates and EW
Casabella I Limited Partnership, now owns both Phases I and II of Casabella.
Casabella is now managed and operated as one single 154-unit residential
community. On June 30, 1992, Casabella Joint Venture refinanced its original
$7,320,000 permanent loan using the proceeds of a new first mortgage loan in the
amount of $7,300,000. Under the terms of the new note, monthly principal and
interest payments of $61,887, based on a fixed interest rate of 9.125%, are
required over the term of the loan. The balance of the note will be due on July
15, 1997. As this mortgage note payable is due in fiscal 1997, the Partnership
of Casabella will seek to renegotiate this mortgage note with its existing
lender or seek new sources of financing for this property on a long term basis.
The General Partners of Casabella believe that existing cash flows from the
property will be sufficient to support a level of borrowing that is at least
equal to the amount outstanding as of December 31, 1996. If the general economic
climate for real estate in this location were to deteriorate resulting in an
increase in interest rates for mortgage financing or a reduction in the
availability of real estate mortgage financing or a decline in the market values
of real estate it may affect the Partnership's ability to complete this
refinancing.
The co-venturer partner was an affiliate of Evans Withycombe, Inc. ("EWI"), a
Phoenix based residential development, construction and management firm. EWI is
also the developer of the Casabella property.
During 1996, 1995 and 1994, the Partnership received $180,311, $70,472, and
$141,710, respectively, of cash distributions from Casabella Associates.
The consolidated balance sheets of Casabella Associates and Casabella at
December 31, 1996 and 1995 are summarized as follows:
<TABLE>
Assets: 1996 1995
---- ----
<S> <C> <C>
Property, plant and equipment $11,453,820 $11,297,805
Accumulated depreciation (1,996,504) (1,752,197)
----------- -----------
Property, plant and equipment, net 9,457,316 9,545,608
Other assets 294,840 889,237
----------- -----------
Total assets $9,752,156 $10,434,845
========= ==========
Liabilities and partners' equity:
Mortgage note payable $6,885,673 $6,994,549
Other liabilities 202,487 125,170
---------- ----------
Total liabilities 7,088,160 7,119,719
Partners' equity 2,663,996 3,315,126
--------- ---------
Total liabilities and partners' equity $9,752,156 $10,434,845
========= ==========
</TABLE>
The elements of the consolidated net income (loss) from Casabella Associates and
Casabella Joint Venture for the years ended December 31, 1996, 1995 and 1994 are
summarized as follows:
<TABLE>
Income: 1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Rental income $1,341,037 $1,520,905 $1,486,525
Other income 50,811 103,410 88,580
------------ ----------- ------------
1,391,848 1,624,315 1,575,105
Expenses and other deductions:
General and administrative 6,223 10,200 10,052
Operations 665,878 561,516 521,969
Depreciation and amortization 266,730 375,234 371,172
Interest 633,360 642,857 651,528
------------ ---------- -----------
1,572,191 1,589,807 1,554,721
----------- --------- ---------
Net income (loss) ($ 180,343) $ 34,508 $ 20,384
============= =========== ==========
</TABLE>
7. Mortgage Notes Payable:
All of the property owned by the Partnership is pledged as collateral for the
mortgage notes payable outstanding at December 31, 1996 and 1994 which consisted
of the following:
1996 1995
---------- ----------
Cheyenne Creek . $3,158,647 $3,189,972
Mariposa ....... 2,851,944 2,881,413
Canyon View East 3,880,196 3,920,289
---------- ----------
$9,890,787 $9,991,674
========== ==========
On September 14, 1990, the Pines on Cheyenne Creek Joint Venture refinanced its
$3,200,000 permanent loan together with deferred interest utilizing the proceeds
of a new first mortgage loan in the amount of $3,252,000. Under the terms of the
new $3,252,000 note, interest only at the rate of 9% ($24,390) is payable
monthly during the first three years of the loan term. Commencing September 15,
1993 monthly payments of $29,076 including principal and interest, at the rate
10%, were payable. The balance of the note is payable on September 15, 1997.
On September 13 and 14, 1990, the Canyon View East and Mariposa Joint Ventures
refinanced their respective $4,000,000 and $2,940,000 original permanent loans.
Under the terms of the new $4,000,000 and $2,940,000 notes, interest only at the
rate of 9% ($30,000 and $22,050) is payable monthly during the first three years
of the loan term. Commencing September 15, 1993, monthly payments of principal
and interest, at the rate 9.75%, or $35,047 and $25,759, respectively were
payable. The balances of the notes are payable on September 15, 1997.
As these mortgage notes payable are due in fiscal 1997, the Partnership will
seek to renegotiate these mortgage notes with its existing lenders or seek new
sources of financing for these properties on a long term basis. The General
Partners believe that existing cash flows from the properties will be sufficient
to support a level of borrowing that is at least equal to amounts outstanding as
of December 31, 1996. If the general economic climate for real estate in these
respective locations were to deteriorate resulting in an increase in interest
rates for mortgage financing or a reduction in the availability of real estate
mortgage financing or a decline in the market values of real estate it may
affect the Partnership's ability to complete these refinancings.
Interest included in Accrued expenses on the Balance Sheets of the Consolidated
Financial Statements at December 31, 1996 and 1995 consisted of the following:
1996 1995
------- -------
Cheyenne Creek . $13,161 $13,292
Mariposa ....... 11,586 11,706
Canyon View East 15,763 15,926
------- -------
$40,510 $40,924
======= =======
The aggregate principal amounts of long term borrowings due during the calendar
year 1997 is $9,890,787.
The principal balance of the mortgage notes payable appearing on the
consolidated balance sheets at December 31, 1996 and 1995 approximates the fair
value of such notes.
8. Partners' Equity:
Under the terms of the Partnership Agreement profits are allocated 98% to the
Limited Partners and 2% to the General Partners; losses are allocated 99% to the
Limited Partners and 1% to the General Partners.
Cash distributions to the partners are governed by the Partnership Agreement and
are made, to the extent available, 98% to the Limited Partners and 2% to the
General Partners.
The allocation of the related profits, losses, and distributions, if any, would
be different than described above in the case of certain events as defined in
the Partnership Agreement, such as the sale of an investment property or an
interest in a joint venture partnership.
9. Related Party Transactions:
Due to affiliates at December 31, 1996 and 1995 consisted of $17,430 and
$11,678, respectively, relating to reimbursable costs due to L'Auberge
Communities, Inc., formerly Berry and Boyle Inc.
In 1996, 1995 and 1994, general and administrative expenses included $83,195,
$87,138, and $70,793, respectively, of salary reimbursements paid to the General
Partners for certain administrative and accounting personnel who performed
services for the Partnership.
The officers and principal shareholders of Evans Withycombe, Inc., the developer
of Mariposa, together hold a two and one half percent cumulative profit or
partnership voting interest in LP L'Auberge Communities (formerly Berry and
Boyle).
During the years ended December 31, 1996, 1995 and 1994, property management
fees of $14,590, $38,308, and $36,576, respectively were paid or accrued to
Evans Withycombe, Inc. These fees were 5% of rental revenue.
Residential Services - L'Auberge, formerly Berry and Boyle Residential Services,
the property manager of Cheyenne Creek, Canyon View East and Mariposa, is an
affiliate of the General Partners of the Partnership. During the years ended
December 31, 1996, 1995 and 1994, property management fees of $81,243, $94,973,
and $94,060, respectively, had been paid to Residential Services - L'Auberge.
These fees were 4% of rental revenue in 1996, and 5% of rental revenue in 1995
and 1994.
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number
(4)(a)(1) Amended and Restated Certificate and Agreement of Limited
Partnership (included in Partnership's Registration Statement
No. 33-10345, declared effective on February 13, 1987,
(the"Registration Statement") and incorporated herein by reference)
(4)(a)(2) Seventeenth Amendment to Amended and Restated Certificate of
Limited Partnership dated May 31, 1990 (included as an exhibit to
the Partnership's Form 10-K for the year ended December 31, 1990
and incorporated herein by reference).
(4)(b) Subscription Agreement (included as an exhibit in the Registration
Statement and incorporated herein by reference).
(10)(a) Agreement of Joint Venture of Casabella Associates dated September
27, 1990 (filed as Exhibit (10)(f) to the Form 10-K of Berry and
Boyle Development Partners for the year ended December 31, 1990,
and incorporated herein by reference).
(10)(b) Property Management Agreement between Canyon View East Joint
Venture and L'Auberge Communities Inc. dated May 15, 1996.
(10)(c) Property Management Agreement between Pines on Cheyenne Creek
Joint Venture and Berry and Boyle Residential Services dated
August 1, 1990 (included as an exhibit to the Partnership's Form
10-K for the year ended December 31, 1990, and incorporated herein
by reference).
(10)(d) Documents pertaining to the $3,252,000 permanent loan for The
Pines on Cheyenne Creek Joint Venture (included as an exhibit to
the Partnership's Form 10-K for the year ended December 31, 1990,
and incorporated herein by reference).
(10)(e) Documents pertaining to the $4,000,000 permanent loan for the
Canyon View East Joint Venture (included as an exhibit to the
Partnership's Form 10-K for the year ended December 31, 1990, and
incorporated herein by reference).
(10)(f) Documents pertaining to the $2,940,000 permanent loan for the
Mariposa Joint Venture (included as an exhibit to the
Partnership's Form 10-K for the year ended December 31, 1990, and
incorporated herein by reference).
(10)(g) Documents pertaining to the $7,300,000 permanent loan for the
Casabella Joint Venture filed as an exhibit to the Annual Report
on Form 10K for the year ended December 31, 1992 for Berry and
Boyle Development Partners III and incorporated herein by
reference.
(10)(h) Property Management Agreement regarding Casabella between
Casabella Associates and L'Auberge Communities Inc. dated
November 1, 1996.
(10)(i) First Amendment to Joint Venture Agreement of L'Auberge Cheyenne
Creek Joint Venture and Related Assignment of Joint Venture
Interest.
(10)(j) Agreement regarding Mariposa Joint Venture.
(10)(k) Agreement regarding Casabella Joint Venture.
(27) Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 318,746
<SECURITIES> 0
<RECEIVABLES> 350
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 23,451,682
<DEPRECIATION> (4,807,665)
<TOTAL-ASSETS> 18,644,017
<CURRENT-LIABILITIES> 358,492
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,202,330
<TOTAL-LIABILITY-AND-EQUITY> 20,190,066
<SALES> 0
<TOTAL-REVENUES> 2,515,524
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,098,158
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 977,285
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (568,209)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
PROPERTY MANAGEMENT AGREEMENT
(Canyon View East)
THIS AGREEMENT is made as of this 15th day of May, 1996, by and between
L'AUBERGE COMMUNITIES INC., a California corporation ("Agent"), and CANYON VIEW
EAST JOINT VENTURE, an Arizona joint venture partnership ("Owner"), with
reference to the following:
A. Owner owns certain real property located in Tucson, Arizona, as more
particularly described on Exhibit "A" attached hereto (the "Site"), upon which
96 apartment units (the "Units") have been constructed. (The Site, Units and all
improvements relating to or connected with the Units, together with all
appurtenances, fixtures and equipment and all rights and privileges now or
hereafter contained in, belonging to or in any way pertaining or beneficial to
any of the foregoing, whether or not attached to the Site or the Units, are
sometimes hereinafter collectively referred to as the "Property.")
B. Agent possesses the organization and skills necessary to discharge
its obligations hereunder.
C. Owner desires to employ Agent, and Agent desires to be
employed by Owner, for the orderly management and operation of the Property on
the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Appointment of Manager.
Owner hereby appoints Agent as Owner's exclusive
representative, manager and agent for the purposes of managing, maintaining, and
operating the Property for the account of Owner during the term of this
Agreement and upon the terms and conditions set forth below.
2. Term.
The term of this Agreement shall commence on the date first
set forth above (the "Commencement Date") and Agent's obligations ("Agent's
Management Obligations") pursuant to this Agreement shall expire in accordance
with the provisions of Paragraph 9 below.
3. Agent's Duties.
a. Agent agrees to perform the following duties on
behalf of Owner:
(i) To accept and does hereby accept the management
of the Property for the period and upon the terms herein provided, and
agrees to furnish the services of its organization for the renting,
operating and managing of the Property, and to do and perform any and
all things in and about the management, maintenance and operation of
the Property customarily performed by agents of similar properties, in
a professional, reasonable, effective and efficient manner, subject
however to the provisions of Section 3(d) below;
(ii) [Intentionally deleted];
(iii) To aid, assist and cooperate in the matter
of real property taxes and
insurance claim adjustments;
(iv) Subject to the provisions of Paragraph 8
below, to care for, place and supervise all insurance coverage;
(v) Subject to the provisions of Paragraph 8 below,
to render on or before the tenth (10th) day of each calendar month
during the term hereof, statements of receipts, expenses and charges
for the previous calendar month;
(vi) [Intentionally deleted];
(vii) To hire, discharge and supervise all labor and
employees ("Project Personnel") required for the operation and
maintenance of the Property (exclusive of employees retained to
undertake the activities described in Section 3(d) below), it being
agreed that all employees shall be deemed to be employees of Agent and
not of Owner, and that Agent may perform its duties through its
attorneys, agents and employees holding such licenses as may be
necessary or appropriate for the performance of such duties, but shall
not be responsible for their acts, defaults and negligence if
reasonable care has been exercised in their appointment, supervision
and retention;
(viii) To pay all expenses, including without limitation
mortgage payments, real estate and personal property taxes, insurance
premiums, licenses, fees and payroll taxes and other obligations of
Owner, incurred in connection with the Property during the term of this
Agreement, prior to their due dates;
(ix) To account for all deposits received from
tenants, and the excess of operating revenues over the sum of operating
expenses plus reserves established by Owner (or as otherwise approved
from time to time by Owner, provided that in any event such amount
shall not be less than the amount reasonably sufficient to pay all
accounts payable of the Property), to Owner; and
(x) To enter into any laundry, laundry machine and/or
vending machine leases and other personal property leases.
b. Agent shall establish operating procedures and policies
necessary to perform Agent's Management Obligations under this Agreement.
c. Agent shall be authorized to make contracts for
electricity, gas, fuel, water, telephone, sweeping, cleaning and other similar
services or such of them as Agent, in its discretion, shall deem advisable.
d. Notwithstanding anything contained in this Section 3 or
elsewhere in this Agreement to the contrary, Agent shall not be responsible for,
nor shall Agent perform, any of the activities described in Arizona Revised
Statute ss. 32-2101.32, or any successor statute, which activities require an
Arizona real estate broker's or salesperson's license. These activities
presently include without limitation renting, offering to rent, or negotiating
the rental of real estate and collecting rents for the use of real estate. Owner
acknowledges that Agent does not have a real estate license in Arizona. Owner
and Agent further acknowledge that any natural person hired to undertake such
activities for the Property pursuant to A.R.S. ss. 32-2121.A.7 shall be employed
directly by Owner and shall be compensated directly by Owner.
4. Compensation.
During the term hereof, Owner agrees to pay to Agent on the
first day of each month a management fee (the "Property Management Fee") equal
to 4% of rents collected in the preceding month (including forfeited security
deposits and nonrefundable deposits and fees) as long as Agent's Management
Obligations have not been terminated, as compensation for Agent's management
services hereunder.
5. Operating Budget; Accounting.
a. Agent shall prepare an operating budget for the Property
for each calendar year during the term of this Agreement. Such operating budget
shall be prepared in consultation with Owner.
b. All monthly accounting functions for the Property,
including without limitation rent collection and the processing and payment of
accounts payable of the Property but excluding rent collection, shall be the
responsibility of Agent at Agent's sole cost and expense.
6. Bank Account.
Agent shall establish and maintain a separate trust account in
the name of Owner for the deposit of all monies collected from or in connection
with the operation of the Property. Agent shall have the authority to draw on
this account for any payments which Agent may make solely for the discharge of
any liabilities or obligations incurred pursuant to this Agreement, and for the
payment of the Property Management Fee, all of which payments shall be subject
to the limitations of this Agreement.
7. Records; Reports; Meetings; Remittance.
a. Agent shall maintain books of account on all receipts and
disbursements incurred in the management and operation of the Property, which
records shall, at all reasonable times, be open to inspection by Owner without
prior notice.
b. During the term of this Agreement, Agent shall furnish to
Owner, the following written reports:
(i) On a monthly basis, not later than ten (10) days
following the end of each calendar month, a detailed cash operating
report, showing all receipts and disbursements for the previous month;
and
(ii) On a monthly basis, not later than ten (10) days
following the end of each calendar month, a recapitulation of
delinquent rents and a rent roll.
c. All net cash flow from operations of the Property, after
establishment of Property operating reserves, shall be remitted to Owner by the
tenth (10th) day of the following calendar month.
8. Property Personnel; Insurance.
a. Subject to the provisions of Paragraph 3(a)(vii) above,
Agent shall hire or discharge on behalf of Owner all Property Personnel required
for the operation and maintenance of the Property exclusive of employees
retained to undertake the activities described in Section 3(d) above.
b. Owner shall maintain public liability insurance and have
Agent named as an additional insured in all such policies. The maintenance of
other insurance in connection with the Property shall be the responsibility of
Owner, but, upon the request of Owner, shall be supervised and implemented by
Agent, as hereinabove provided.
9. Termination.
Agent's Management Obligations may be terminated or modified
at any time as provided below:
a. If Owner shall sell or otherwise transfer title to
the Property (except in connection with a reorganization of Owner):
(i) Agent's Management Obligations shall
automatically terminate as of the date of closing of such sale or transfer; and
(ii) Owner shall pay to Agent any accrued but unpaid
Property Management Fees owing to Agent pursuant to this Agreement up
to the date of closing of such sale or transfer.
b. Either party shall have the right, by giving written notice
to the other party, to terminate Agent's Management Obligations without cause
effective upon thirty (30) days prior written notice and with cause effective
immediately upon delivery.
c. In the event Agent's Management Obligations are terminated
pursuant to Paragraph 9.b. above, Agent's right to receive the Property
Management Fee shall terminate as of the effective date of such termination. For
purposes hereof, "cause" shall mean, in addition to any material default or
breach by Agent under this Agreement, any act or omission which constitutes
negligence, willful malfeasance or fraud.
10. Settlement.
Upon the expiration or sooner termination of Agent's
Management Obligations, or in the event that, by mutual agreement of the
parties, on-site management of the Property is delegated to a third party:
a. Agent shall deliver and transfer to Owner or Owner's
designee all books, records, agreements, documents and instruments of whatsoever
nature pertaining to the Property maintained by Agent on behalf of Owner other
than those maintained by Agent in the course of its own day-to-day business, and
shall pay over to Owner or its designee all sums arising out of the operation of
the Property from the commencement of business operations thereat, including,
without limitation, all advance rent, security deposits, unused cleaning fees
and the like, less permitted expenses actually paid by such transferring party;
b. Owner shall pay to Agent any sums for which Agent is then
entitled to reimbursement hereunder, including those which Agent may have
theretofore advanced on behalf of Owner and for which Agent shall not have
theretofore received reimbursement.
11. Reimbursement.
Owner agrees to promptly reimburse Agent for any monies that
Agent may advance on behalf of or for the benefit of the Property or Owner if
such reimbursement may not reasonably be made from funds from the Property.
Notwithstanding the foregoing, Agent shall not be obligated to make any such
advances for the benefit of the Property or Owner.
12. Indemnity.
Owner hereby indemnifies and agrees to hold Agent harmless
from and against any and all suits, claims or costs incurred by Agent in any
actions brought by third parties in connection with the management of the
Property or this Agreement, and from any liability or injury suffered by third
parties in or on the Property, except for any such suits, claims or costs which
arise from or relate to any act or omission of Agent or its employees which
constitutes negligence, willful malfeasance or fraud, as to which Agent shall
indemnify and hold Owner harmless.
13. Notices.
All notices required to be given by either party to the other
shall be in writing and shall be deemed to have been properly given and
delivered when deposited in the United States mail, sent certified or
registered, return receipt requested, postage prepaid, or by commercial air
courier, addressed to the parties as follows:
If to Owner:
c/o L'Auberge Communities Inc.
5110 Langdale Way
Colorado Springs, Colorado 80906
Attention: Stephen B. Boyle
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
If to Agent:
L'Auberge Communities Inc.
5110 Langdale Way
Colorado Springs, Colorado 80906
Attention: Stephen B. Boyle
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Such notices shall be effective upon delivery if delivered in person and either
upon actual receipt or three (3) days after mailing, whichever is earlier, if
delivered by mail.
14. Entire Agreement.
Except as otherwise specifically set forth herein, this
Agreement is the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements between the parties
with respect thereto. There have been no representations or warranties by either
party to the other except as expressly contained herein. No claim of waiver,
modification, consent or acquiescence with respect to any provision of this
Agreement shall be made against either party except on the basis of a written
instrument executed by or on behalf of such party.
15. Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties hereto. Agent may not
assign any of its rights, or delegate any of its duties, under this Agreement
without the prior written consent of Owner.
16. Exhibits.
All Exhibits referred to in this Agreement are expressly
incorporated herein by reference as though set forth in full.
17. Paragraph Headings.
The headings of the several paragraphs of this Agreement are
inserted solely for convenience of reference and are not a part of and are not
intended to govern, limit or aid in the construction of any term or provision
thereof.
18. Time.
Time is of the essence in the performance of this Agreement.
19. Authority.
All parties to this Agreement warrant and represent that they
have the power and authority to enter into this Agreement in the names, titles
and capacities herein stated and on behalf of any entities, persons, estates or
firms represented or purported to be represented by such persons, and shall
deliver to the other party such corporate resolutions, powers of attorney and
such other documents or instruments as shall be reasonably necessary to evidence
such authority.
20. Governing Law.
This Agreement is to be governed by and construed in
accordance with the laws of the State of
Arizona.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective the day and year first above written.
AGENT: OWNER:
L'AUBERGE COMMUNITIES INC., CANYON VIEW EAST JOINT VENTURE,
a California corporation an Arizona joint venture partnership
By: By: Development Partners II
Stephen B. Boyle (A Massachusetts Limited Partnership)
President
By: GP L'Auberge Communities II, L.P.,
a California limited partnership,
General Partner
By: L'Auberge Communities Inc.,
General Partner
By: __________________
Stephen B. Boyle
President
PROPERTY MANAGEMENT AGREEMENT
(Mariposa)
THIS AGREEMENT is made as of this 1st day of November, 1996, by and
between L'AUBERGE COMMUNITIES INC., a California corporation ("Agent"), and
DEVELOPMENT PARTNERS II (A MASSACHUSETTS LIMITED PARTNERSHIP) ("Owner"), with
reference to the following:
A. Owner owns certain real property located in Scottsdale, Arizona, as
more particularly described on Exhibit "A" attached hereto (the "Site"), upon
which 84 apartment units (the "Units") have been constructed. (The Site, Units
and all improvements relating to or connected with the Units, together with all
appurtenances, fixtures and equipment and all rights and privileges now or
hereafter contained in, belonging to or in any way pertaining or beneficial to
any of the foregoing, whether or not attached to the Site or the Units, are
sometimes hereinafter collectively referred to as the "Property.")
B. Agent possesses the organization and skills necessary to discharge its
obligations hereunder.
C. Owner desires to employ Agent, and Agent desires to be employed by Owner,
for the orderly management and operation of the Property on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Appointment of Manager.
Owner hereby appoints Agent as Owner's exclusive
representative, manager and agent for the purposes of managing, maintaining, and
operating the Property for the account of Owner during the term of this
Agreement and upon the terms and conditions set forth below.
2. Term.
The term of this Agreement shall commence on the date first
set forth above (the "Commencement Date") and Agent's obligations ("Agent's
Management Obligations") pursuant to this Agreement shall expire in accordance
with the provisions of Paragraph 9 below.
3. Agent's Duties.
a. Agent agrees to perform the following duties on behalf
of Owner:
(i) To accept and does hereby accept the management
of the Property for the period and upon the terms herein provided, and
agrees to furnish the services of its organization for the renting,
operating and managing of the Property, and to do and perform any and
all things in and about the management, maintenance and operation of
the Property customarily performed by agents of similar properties, in
a professional, reasonable, effective and efficient manner, subject
however to the provisions of Section 3(d) below;
(ii) [Intentionally deleted];
(iii) To aid, assist and cooperate in the matter
of real property taxes and insurance claim adjustments;
(iv) Subject to the provisions of Paragraph 8
below, to care for, place and supervise all insurance coverage;
(v) Subject to the provisions of Paragraph 8 below,
to render on or before the tenth (10th) day of each calendar month
during the term hereof, statements of receipts, expenses and charges
for the previous calendar month;
(vi) [Intentionally deleted];
(vii) To hire, discharge and supervise all labor and
employees ("Project Personnel") required for the operation and
maintenance of the Property (exclusive of employees retained to
undertake the activities described in Section 3(d) below), it being
agreed that all employees shall be deemed to be employees of Agent and
not of Owner, and that Agent may perform its duties through its
attorneys, agents and employees holding such licenses as may be
necessary or appropriate for the performance of such duties, but shall
not be responsible for their acts, defaults and negligence if
reasonable care has been exercised in their appointment, supervision
and retention;
(viii) To pay all expenses, including without limitation
mortgage payments, real estate and personal property taxes, insurance
premiums, licenses, fees and payroll taxes and other obligations of
Owner, incurred in connection with the Property during the term of this
Agreement, prior to their due dates;
(ix) To account for all deposits received from
tenants, and the excess of operating revenues over the sum of operating
expenses plus reserves established by Owner (or as otherwise approved
from time to time by Owner, provided that in any event such amount
shall not be less than the amount reasonably sufficient to pay all
accounts payable of the Property), to Owner; and
(x) To enter into any laundry, laundry machine and/or
vending machine leases and other personal property leases.
b. Agent shall establish operating procedures and
policies necessary to perform Agent's Management Obligations under
this Agreement.
c. Agent shall be authorized to make contracts for
electricity, gas, fuel, water, telephone, sweeping, cleaning and other similar
services or such of them as Agent, in its discretion, shall deem advisable.
d. Notwithstanding anything contained in this Section 3 or
elsewhere in this Agreement to the contrary, Agent shall not be responsible for,
nor shall Agent perform, any of the activities described in Arizona Revised
Statute ss. 32-2101.32, or any successor statute, which activities require an
Arizona real estate broker's or salesperson's license. These activities
presently include without limitation renting, offering to rent, or negotiating
the rental of real estate and collecting rents for the use of real estate. Owner
acknowledges that Agent does not have a real estate license in Arizona. Owner
and Agent further acknowledge that any natural person hired to undertake such
activities for the Property pursuant to A.R.S. ss. 32-2121.A.7 shall be employed
directly by Owner and shall be compensated directly by Owner.
4. Compensation.
During the term hereof, Owner agrees to pay to Agent on the
first day of each month a management fee (the "Property Management Fee") equal
to 4% of rents collected in the preceding month (including forfeited security
deposits and nonrefundable deposits and fees) as long as Agent's Management
Obligations have not been terminated, as compensation for Agent's management
services hereunder.
5. Operating Budget; Accounting.
a. Agent shall prepare an operating budget for the Property
for each calendar year during the term of this Agreement. Such operating budget
shall be prepared in consultation with Owner.
b. All monthly accounting functions for the Property,
including without limitation rent collection and the processing and payment of
accounts payable of the Property but excluding rent collection, shall be the
responsibility of Agent at Agent's sole cost and expense.
6. Bank Account.
Agent shall establish and maintain a separate trust account in
the name of Owner for the deposit of all monies collected from or in connection
with the operation of the Property. Agent shall have the authority to draw on
this account for any payments which Agent may make solely for the discharge of
any liabilities or obligations incurred pursuant to this Agreement, and for the
payment of the Property Management Fee, all of which payments shall be subject
to the limitations of this Agreement.
7. Records; Reports; Meetings; Remittance.
a. Agent shall maintain books of account on all receipts and
disbursements incurred in the management and operation of the Property, which
records shall, at all reasonable times, be open to inspection by Owner without
prior notice.
b. During the term of this Agreement, Agent shall
furnish to Owner, the following written reports:
(i) On a monthly basis, not later than ten (10) days
following the end of each calendar month, a detailed cash operating
report, showing all receipts and disbursements for the previous month;
and
(ii) On a monthly basis, not later than ten (10) days
following the end of each calendar month, a recapitulation of
delinquent rents and a rent roll.
c. All net cash flow from operations of the Property, after
establishment of Property operating reserves, shall be remitted to Owner by the
tenth (10th) day of the following calendar month.
8. Property Personnel; Insurance.
a. Subject to the provisions of Paragraph 3(a)(vii) above,
Agent shall hire or discharge on behalf of Owner all Property Personnel required
for the operation and maintenance of the Property exclusive of employees
retained to undertake the activities described in Section 3(d) above.
b. Owner shall maintain public liability insurance and have
Agent named as an additional insured in all such policies. The maintenance of
other insurance in connection with the Property shall be the responsibility of
Owner, but, upon the request of Owner, shall be supervised and implemented by
Agent, as hereinabove provided.
9. Termination.
Agent's Management Obligations may be terminated or modified
at any time as provided below:
a. If Owner shall sell or otherwise transfer title to
the Property (except in connection with a reorganization of Owner):
(i) Agent's Management Obligations shall
automatically terminate as of the date of closing of such sale or transfer; and
(ii) Owner shall pay to Agent any accrued but unpaid
Property Management Fees owing to Agent pursuant to this Agreement up
to the date of closing of such sale or transfer.
b. Either party shall have the right, by giving written notice
to the other party, to terminate Agent's Management Obligations without cause
effective upon thirty (30) days prior written notice and with cause effective
immediately upon delivery.
c. In the event Agent's Management Obligations are terminated
pursuant to Paragraph 9.b. above, Agent's right to receive the Property
Management Fee shall terminate as of the effective date of such termination. For
purposes hereof, "cause" shall mean, in addition to any material default or
breach by Agent under this Agreement, any act or omission which constitutes
negligence, willful malfeasance or fraud.
10. Settlement.
Upon the expiration or sooner termination of Agent's
Management Obligations, or in the event that, by mutual agreement of the
parties, on-site management of the Property is delegated to a third party:
a. Agent shall deliver and transfer to Owner or Owner's
designee all books, records, agreements, documents and instruments of whatsoever
nature pertaining to the Property maintained by Agent on behalf of Owner other
than those maintained by Agent in the course of its own day-to-day business, and
shall pay over to Owner or its designee all sums arising out of the operation of
the Property from the commencement of business operations thereat, including,
without limitation, all advance rent, security deposits, unused cleaning fees
and the like, less permitted expenses actually paid by such transferring party;
b. Owner shall pay to Agent any sums for which Agent is then
entitled to reimbursement hereunder, including those which Agent may have
theretofore advanced on behalf of Owner and for which Agent shall not have
theretofore received reimbursement.
11. Reimbursement.
Owner agrees to promptly reimburse Agent for any monies that
Agent may advance on behalf of or for the benefit of the Property or Owner if
such reimbursement may not reasonably be made from funds from the Property.
Notwithstanding the foregoing, Agent shall not be obligated to make any such
advances for the benefit of the Property or Owner.
12. Indemnity.
Owner hereby indemnifies and agrees to hold Agent harmless
from and against any and all suits, claims or costs incurred by Agent in any
actions brought by third parties in connection with the management of the
Property or this Agreement, and from any liability or injury suffered by third
parties in or on the Property, except for any such suits, claims or costs which
arise from or relate to any act or omission of Agent or its employees which
constitutes negligence, willful malfeasance or fraud, as to which Agent shall
indemnify and hold Owner harmless.
13. Notices.
All notices required to be given by either party to the other
shall be in writing and shall be deemed to have been properly given and
delivered when deposited in the United States mail, sent certified or
registered, return receipt requested, postage prepaid, or by commercial air
courier, addressed to the parties as follows:
If to Owner:
c/o L'Auberge Communities Inc.
5110 Langdale Way
Colorado Springs, Colorado 80906
Attention: Stephen B. Boyle
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
If to Agent:
L'Auberge Communities Inc.
5110 Langdale Way
Colorado Springs, Colorado 80906
Attention: Stephen B. Boyle
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Such notices shall be effective upon delivery if delivered in person and either
upon actual receipt or three (3) days after mailing, whichever is earlier, if
delivered by mail.
14. Entire Agreement.
Except as otherwise specifically set forth herein, this
Agreement is the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements between the parties
with respect thereto. There have been no representations or warranties by either
party to the other except as expressly contained herein. No claim of waiver,
modification, consent or acquiescence with respect to any provision of this
Agreement shall be made against either party except on the basis of a written
instrument executed by or on behalf of such party.
15. Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties hereto. Agent may not
assign any of its rights, or delegate any of its duties, under this Agreement
without the prior written consent of Owner.
16. Exhibits.
All Exhibits referred to in this Agreement are expressly
incorporated herein by reference as though set forth in full.
17. Paragraph Headings.
The headings of the several paragraphs of this Agreement are
inserted solely for convenience of reference and are not a part of and are not
intended to govern, limit or aid in the construction of any term or provision
thereof.
18. Time.
Time is of the essence in the performance of this Agreement.
19. Authority.
All parties to this Agreement warrant and represent that they
have the power and authority to enter into this Agreement in the names, titles
and capacities herein stated and on behalf of any entities, persons, estates or
firms represented or purported to be represented by such persons, and shall
deliver to the other party such corporate resolutions, powers of attorney and
such other documents or instruments as shall be reasonably necessary to evidence
such authority.
20. Governing Law.
This Agreement is to be governed by and construed in
accordance with the laws of the State of Arizona.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective the day and year first above written.
AGENT: OWNER:
L'AUBERGE COMMUNITIES INC., DEVELOPMENT PARTNERS II
a California corporation (A MASSACHUSETTS LIMITED PARTNERSHIP)
By: By: GP L'Auberge Communities II, L.P.,
Stephen B. Boyle a California limited partnership,
President General Partner
By: L'Auberge Communities Inc.,
General Partner
By: ___________________
Stephen B. Boyle
President
PROPERTY MANAGEMENT AGREEMENT
(Casabella)
THIS AGREEMENT is made as of this 1st day of November, 1996, by and
between L'AUBERGE COMMUNITIES INC., a California corporation ("Agent"), and
CASABELLA ASSOCIATES, an Arizona joint venture partnership ("Owner"), with
reference to the following:
A. Owner owns certain real property located in Scottsdale, Arizona, as
more particularly described on Exhibit "A" attached hereto (the "Site"), upon
which 154 apartment units (the "Units") have been constructed. (The Site, Units
and all improvements relating to or connected with the Units, together with all
appurtenances, fixtures and equipment and all rights and privileges now or
hereafter contained in, belonging to or in any way pertaining or beneficial to
any of the foregoing, whether or not attached to the Site or the Units, are
sometimes hereinafter collectively referred to as the "Property.")
B. Agent possesses the organization and skills necessary to discharge
its obligations hereunder.
C. Owner desires to employ Agent, and Agent desires to be
employed by Owner, for the orderly management and operation of the Property
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Appointment of Manager.
Owner hereby appoints Agent as Owner's exclusive
representative, manager and agent for the purposes of managing, maintaining, and
operating the Property for the account of Owner during the term of this
Agreement and upon the terms and conditions set forth below.
2. Term.
The term of this Agreement shall commence on the date first
set forth above (the "Commencement Date") and Agent's obligations ("Agent's
Management Obligations") pursuant to this Agreement shall expire in accordance
with the provisions of Paragraph 9 below.
3. Agent's Duties.
a. Agent agrees to perform the following duties on behalf
of Owner:
(i) To accept and does hereby accept the management
of the Property for the period and upon the terms herein provided, and
agrees to furnish the services of its organization for the renting,
operating and managing of the Property, and to do and perform any and
all things in and about the management, maintenance and operation of
the Property customarily performed by agents of similar properties, in
a professional, reasonable, effective and efficient manner, subject
however to the provisions of Section 3(d) below;
(ii) [Intentionally deleted];
(iii) To aid, assist and cooperate in the matter
of real property taxes and insurance claim adjustments;
(iv) Subject to the provisions of Paragraph 8
below, to care for, place and supervise all insurance coverage;
(v) Subject to the provisions of Paragraph 8 below,
to render on or before the tenth (10th) day of each calendar month
during the term hereof, statements of receipts, expenses and charges
for the previous calendar month;
(vi) [Intentionally deleted];
(vii) To hire, discharge and supervise all labor and
employees ("Project Personnel") required for the operation and
maintenance of the Property (exclusive of employees retained to
undertake the activities described in Section 3(d) below), it being
agreed that all employees shall be deemed to be employees of Agent and
not of Owner, and that Agent may perform its duties through its
attorneys, agents and employees holding such licenses as may be
necessary or appropriate for the performance of such duties, but shall
not be responsible for their acts, defaults and negligence if
reasonable care has been exercised in their appointment, supervision
and retention;
(viii) To pay all expenses, including without limitation
mortgage payments, real estate and personal property taxes, insurance
premiums, licenses, fees and payroll taxes and other obligations of
Owner, incurred in connection with the Property during the term of this
Agreement, prior to their due dates;
(ix) To account for all deposits received from
tenants, and the excess of operating revenues over the sum of operating
expenses plus reserves established by Owner (or as otherwise approved
from time to time by Owner, provided that in any event such amount
shall not be less than the amount reasonably sufficient to pay all
accounts payable of the Property), to Owner; and
(x) To enter into any laundry, laundry machine and/or
vending machine leases and other personal property leases.
b. Agent shall establish operating procedures and
policies necessary to perform Agent's Management Obligations under this
Agreement.
c. Agent shall be authorized to make contracts for
electricity, gas, fuel, water, telephone, sweeping, cleaning and other similar
services or such of them as Agent, in its discretion, shall deem advisable.
d. Notwithstanding anything contained in this Section 3 or
elsewhere in this Agreement to the contrary, Agent shall not be responsible for,
nor shall Agent perform, any of the activities described in Arizona Revised
Statute ss. 32-2101.32, or any successor statute, which activities require an
Arizona real estate broker's or salesperson's license. These activities
presently include without limitation renting, offering to rent, or negotiating
the rental of real estate and collecting rents for the use of real estate. Owner
acknowledges that Agent does not have a real estate license in Arizona. Owner
and Agent further acknowledge that any natural person hired to undertake such
activities for the Property pursuant to A.R.S. ss. 32-2121.A.7 shall be employed
directly by Owner and shall be compensated directly by Owner.
4. Compensation.
During the term hereof, Owner agrees to pay to Agent on the
first day of each month a management fee (the "Property Management Fee") equal
to 4% of rents collected in the preceding month (including forfeited security
deposits and nonrefundable deposits and fees) as long as Agent's Management
Obligations have not been terminated, as compensation for Agent's management
services hereunder.
5. Operating Budget; Accounting.
a. Agent shall prepare an operating budget for the Property
for each calendar year during the term of this Agreement. Such operating budget
shall be prepared in consultation with Owner.
b. All monthly accounting functions for the Property,
including without limitation rent collection and the processing and payment of
accounts payable of the Property but excluding rent collection, shall be the
responsibility of Agent at Agent's sole cost and expense.
6. Bank Account.
Agent shall establish and maintain a separate trust account in
the name of Owner for the deposit of all monies collected from or in connection
with the operation of the Property. Agent shall have the authority to draw on
this account for any payments which Agent may make solely for the discharge of
any liabilities or obligations incurred pursuant to this Agreement, and for the
payment of the Property Management Fee, all of which payments shall be subject
to the limitations of this Agreement.
7. Records; Reports; Meetings; Remittance.
a. Agent shall maintain books of account on all receipts and
disbursements incurred in the management and operation of the Property, which
records shall, at all reasonable times, be open to inspection by Owner without
prior notice.
b. During the term of this Agreement, Agent shall
furnish to Owner, the following written reports:
(i) On a monthly basis, not later than ten (10) days
following the end of each calendar month, a detailed cash operating
report, showing all receipts and disbursements for the previous month;
and
(ii) On a monthly basis, not later than ten (10) days
following the end of each calendar month, a recapitulation of
delinquent rents and a rent roll.
c. All net cash flow from operations of the Property, after
establishment of Property operating reserves, shall be remitted to Owner by the
tenth (10th) day of the following calendar month.
8. Property Personnel; Insurance.
a. Subject to the provisions of Paragraph 3(a)(vii) above,
Agent shall hire or discharge on behalf of Owner all Property Personnel required
for the operation and maintenance of the Property exclusive of employees
retained to undertake the activities described in Section 3(d) above.
b. Owner shall maintain public liability insurance and have
Agent named as an additional insured in all such policies. The maintenance of
other insurance in connection with the Property shall be the responsibility of
Owner, but, upon the request of Owner, shall be supervised and implemented by
Agent, as hereinabove provided.
9. Termination.
Agent's Management Obligations may be terminated or modified
at any time as provided below:
a. If Owner shall sell or otherwise transfer title to
the Property (except in connection with a reorganization of Owner):
(i) Agent's Management Obligations shall
automatically terminate as of the date of closing of such sale or transfer; and
(ii) Owner shall pay to Agent any accrued but unpaid
Property Management Fees owing to Agent pursuant to this Agreement up
to the date of closing of such sale or transfer.
b. Either party shall have the right, by giving written notice
to the other party, to terminate Agent's Management Obligations without cause
effective upon thirty (30) days prior written notice and with cause effective
immediately upon delivery.
c. In the event Agent's Management Obligations are terminated
pursuant to Paragraph 9.b. above, Agent's right to receive the Property
Management Fee shall terminate as of the effective date of such termination. For
purposes hereof, "cause" shall mean, in addition to any material default or
breach by Agent under this Agreement, any act or omission which constitutes
negligence, willful malfeasance or fraud.
10. Settlement.
Upon the expiration or sooner termination of Agent's
Management Obligations, or in the event that, by mutual agreement of the
parties, on-site management of the Property is delegated to a third party:
a. Agent shall deliver and transfer to Owner or Owner's
designee all books, records, agreements, documents and instruments of whatsoever
nature pertaining to the Property maintained by Agent on behalf of Owner other
than those maintained by Agent in the course of its own day-to-day business, and
shall pay over to Owner or its designee all sums arising out of the operation of
the Property from the commencement of business operations thereat, including,
without limitation, all advance rent, security deposits, unused cleaning fees
and the like, less permitted expenses actually paid by such transferring party;
b. Owner shall pay to Agent any sums for which Agent is then
entitled to reimbursement hereunder, including those which Agent may have
theretofore advanced on behalf of Owner and for which Agent shall not have
theretofore received reimbursement.
11. Reimbursement.
Owner agrees to promptly reimburse Agent for any monies that
Agent may advance on behalf of or for the benefit of the Property or Owner if
such reimbursement may not reasonably be made from funds from the Property.
Notwithstanding the foregoing, Agent shall not be obligated to make any such
advances for the benefit of the Property or Owner.
12. Indemnity.
Owner hereby indemnifies and agrees to hold Agent harmless
from and against any and all suits, claims or costs incurred by Agent in any
actions brought by third parties in connection with the management of the
Property or this Agreement, and from any liability or injury suffered by third
parties in or on the Property, except for any such suits, claims or costs which
arise from or relate to any act or omission of Agent or its employees which
constitutes negligence, willful malfeasance or fraud, as to which Agent shall
indemnify and hold Owner harmless.
13. Notices.
All notices required to be given by either party to the other
shall be in writing and shall be deemed to have been properly given and
delivered when deposited in the United States mail, sent certified or
registered, return receipt requested, postage prepaid, or by commercial air
courier, addressed to the parties as follows:
If to Owner:
c/o L'Auberge Communities Inc.
5110 Langdale Way
Colorado Springs, Colorado 80906
Attention: Stephen B. Boyle
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
If to Agent:
L'Auberge Communities Inc.
5110 Langdale Way
Colorado Springs, Colorado 80906
Attention: Stephen B. Boyle
With a copy to:
Hughes Hubbard & Reed LLP
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Such notices shall be effective upon delivery if delivered in person and either
upon actual receipt or three (3) days after mailing, whichever is earlier, if
delivered by mail.
14. Entire Agreement.
Except as otherwise specifically set forth herein, this
Agreement is the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements between the parties
with respect thereto. There have been no representations or warranties by either
party to the other except as expressly contained herein. No claim of waiver,
modification, consent or acquiescence with respect to any provision of this
Agreement shall be made against either party except on the basis of a written
instrument executed by or on behalf of such party.
15. Successors and Assigns.
This Agreement shall be binding upon and shall inure to the
benefit of the successors and assigns of the parties hereto. Agent may not
assign any of its rights, or delegate any of its duties, under this Agreement
without the prior written consent of Owner.
16. Exhibits.
All Exhibits referred to in this Agreement are expressly
incorporated herein by reference as though set forth in full.
17. Paragraph Headings.
The headings of the several paragraphs of this Agreement are
inserted solely for convenience of reference and are not a part of and are not
intended to govern, limit or aid in the construction of any term or provision
thereof.
18. Time.
Time is of the essence in the performance of this Agreement.
19. Authority.
All parties to this Agreement warrant and represent that they
have the power and authority to enter into this Agreement in the names, titles
and capacities herein stated and on behalf of any entities, persons, estates or
firms represented or purported to be represented by such persons, and shall
deliver to the other party such corporate resolutions, powers of attorney and
such other documents or instruments as shall be reasonably necessary to evidence
such authority.
20. Governing Law.
This Agreement is to be governed by and construed in
accordance with the laws of the State of Arizona.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective the day and year first above written.
AGENT: OWNER:
L'AUBERGE COMMUNITIES INC., CASABELLA ASSOCIATES,
a California corporation An Arizona Joint Venture Partnership
By: By: Development Partners III
Stephen B. Boyle (A Massachusetts Limited Partnership)
President
By: GP L'Auberge Communities II L.P.,
a California limited partnership,
General Partner
By: L'Auberge Communities Inc.,
General Partner
By: ___________________
Stephen B. Boyle
President
FIRST AMENDMENT TO
JOINT VENTURE AGREEMENT OF
L'AUBERGE CHEYENNE CREEK JOINT VENTURE
(formerly known as The Pines on Cheyenne Creek)
This First Amendment, dated June __, 1996, amends that certain Joint
Venture Agreement of The Pines on Cheyenne Creek Joint Venture, dated September
26, 1988 (as previously amended, the "Agreement"), between Development Partners
II (A Massachusetts Limited Partnership), formerly known as Berry and Boyle
Development Partners II (A Massachusetts Limited Partnership), and Highland
Properties, Inc., a Colorado corporation, as follows:
Section 13 of the Agreement, entitled "Right of First Refusal-
Project," is hereby deleted in its entirety.
All of the other terms and conditions of the Agreement remain
unchanged.
DEVELOPMENT PARTNERS II HIGHLAND PROPERTIES, INC.,
(A Massachusetts Limited Partnership) a Colorado corporation
formerly known as
Berry and Boyle Development Partners II
(A Massachusetts Limited Partnership) By: ______________________
Its: ___________________
By: GP L'Auberge Communities, L.P.,
a California limited partnership By: ______________________
formerly known as Berry and Boyle Management, Its: ___________________
a General Partner
By: L'Auberge Communities Inc.,
a California corporation
formerly known as Berry and Boyle Inc.,
a General Partner
of GP L'Auberge Communities, L.P.
By: _____________________
Its: __________________
[Signatures continued.]
THE PINES TRUST INVESTORS,
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P.,
a California limited partnership
formerly known as Berry and Boyle Management,
a General Partner
By: L'Auberge Communities Inc.,
a California corporation
formerly known as Berry and Boyle Inc.,
a General Partner of
GP L'Auberge Communities, L.P.
By: __________________
Its: _______________
ASSIGNMENT OF JOINT VENTURE INTEREST
(L'Auberge Cheyenne Creek)
This Assignment of Joint Venture Interest (this "Assignment")
is made as of June __, 1996, by and between Highland Properties, Inc., a
Colorado corporation (the "Assigning Venturer"), and Development Partners II (A
Massachusetts Limited Partnership) formerly known as Berry and Boyle Development
Partners II (A Massachusetts Limited Partnership) (the "L'Auberge Venturer"),
with reference to the following:
A. The Assigning Venturer and the L'Auberge Venturer are joint
venture partners in that certain Colorado joint venture partnership known as The
Pines on Cheyenne Creek Joint Venture (the "Joint Venture") formed pursuant to
that certain Joint Venture Agreement of The Pines on Cheyenne Creek Joint
Venture dated September 26, 1988 (as amended, the "Joint Venture Agreement").
B. The Assigning Venturer desires to assign its entire right,
title and interest in the Joint Venture to the L'Auberge Venturer, and the
L'Auberge Venturer desires to accept such assignment, on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and other
valuable consideration (the receipt of which is hereby acknowledged), the
parties hereto agree as follows:
1. Assignment of Joint Venture Interest. The Assigning
Venturer hereby sells, transfers and assigns to the L'Auberge Venturer, and the
L'Auberge Venturer hereby accepts from the Assigning Venturer, all of the
Assigning Venturer's right, title and interest in and to its interest in the
Joint Venture and in, to and under the Joint Venture Agreement, together with
any and all rights (including without limitation all rights to distributions and
allocations arising from and after the date hereof) incidental thereto
(collectively, the "Interest"). By their execution hereof, the Assigning
Venturer and the L'Auberge Venturer waive their respective rights to receive
notice of the transfer of the Interest, to invoke restrictions on transfer of
such Interest and to withhold approval of such transfer.
2. Acceptance of Assignment. Subject to the provisions of
Paragraph 3 below, the L'Auberge Venturer hereby accepts such assignment and
assumes and agrees to perform and discharge all joint venture partnership
obligations of the Assigning Venturer with respect to the Interest as set forth
in the Joint Venture Agreement arising from and after the date hereof.
3. Indemnification.
(a) The Assigning Venturer hereby agrees to protect, defend, indemnify and hold
the L'Auberge Venturer and the Joint Venture harmless from and against any and
all losses, claims, expenses (including reasonable attorneys' fees), damages,
liabilities or obligations relating to any act or omission of the Assigning
Venturer with respect to the Joint Venture, its business or property, including
the multi-family residential project which has been constructed thereon, which
arose on or before the effective date of this Assignment.
(b) The L'Auberge Venturer hereby agrees to protect, defend, indemnify and hold
the Assigning Venturer harmless from and against any and all losses, claims,
expenses (including reasonable attorneys' fees), damages, liabilities or
obligations relating to any act or omission of the L'Auberge Venturer with
respect to the Joint Venture, its business or property, including the
multi-family residential project which has been constructed thereon, which
arises after the effective date of this Assignment.
4.Representations and Warranties of the Assigning Venturer. The Assigning
Venturer hereby represents and warrants as follows:
(a) The Assigning Venturer has the legal right and power to enter into this
Assignment and, as of the date hereof, has valid title to the Interest, free and
clear of any liens, claims or encumbrances.
(b) The Assigning Venturer has the legal right and power to sell, assign and
transfer the Interest to the L'Auberge Venturer without obtaining the consent of
any other person, entity or governmental authority.
5. Representations and Warranties of the L'Auberge Venturer. The L'Auberge
Venturer hereby represents and warrants as follows:
(a) The L'Auberge Venturer has the legal right and power to enter into this
Assignment.
(b)The L'Auberge Venturer has the legal right and power to accept the assignment
of the Interest and to assume the obligations pertaining thereto without
obtaining the consent of any other person, entity or governmental authority.
6. General Terms.
(a) The Assigning Venturer hereby agrees to execute and deliver, upon the
request of the L'Auberge Venturer, any additional documents or instruments which
may be necessary or appropriate to effectuate the transfer of the Interest to
the L'Auberge Venturer.
(b) All representations, warranties, covenants and agreements of the parties
contained in this Assignment or any other document referred to herein shall
survive the execution and delivery of this Assignment.
(c) This Assignment shall be governed by and construed in accordance with the
laws of the State of Colorado, without giving effect to the conflict of laws or
choice of law rules or laws of such jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment effective as of the date and year first set forth above.
"L'Auberge Venturer" "Assigning Venturer"
DEVELOPMENT PARTNERS II, HIGHLAND PROPERTIES, INC.,
(A Massachusetts Limited Partnership) a Colorado corporation
formerly known as
Berry and Boyle Development Partners II,
(A Massachusetts Limited Partnership) By: ______________________
Its: ___________________
By: GP L'Auberge Communities, L.P.,
a California limited partnership By: ______________________
formerly known as Berry and Boyle Management, Its: ___________________
a General Partner
By: L'Auberge Communities Inc.,
a California corporation
formerly known as Berry and Boyle Inc.,
a General Partner
of GP L'Auberge Communities, L.P.
By: _____________________
Its: __________________
[Signatures continued.]
THE PINES TRUST INVESTORS,
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P.,
a California limited partnership
formerly known as Berry and Boyle Management,
a General Partner
By: L'Auberge Communities Inc.,
a California corporation,
formerly known as Berry and Boyle Inc.
a General Partner of
GP L'Auberge Communities, L.P.
By: __________________
Its: _______________
AGREEMENT
(Mariposa)
This Agreement is made and entered into as of March 29, 1996, by and
among Mariposa Joint Venture, an Arizona joint venture partnership (the "Joint
Venture"), Development Partners II (A Massachusetts Limited Partnership) (the
"L'Auberge Venturer"), EW Mariposa Limited Partnership, an Arizona limited
partnership (the "EW Venturer") and EWI Management Limited Partnership, an
Arizona limited partnership ("Manager"), with reference to the following:
A. The L'Auberge Venturer and the EW Venturer formed the Joint Venture
by entering into that certain Joint Venture Agreement of Mariposa Joint Venture
dated January 31, 1989 (as amended, the "Joint Venture Agreement"). The Joint
Venture owns that certain multi-family residential project (the "Project")
located at 6885 East Cochise Road, Scottsdale, Arizona and commonly known as
Mariposa Apartments. Each of the L'Auberge Venturer and the EW Venturer now
desires to effectuate the amicable and mutual dissolution and termination of the
Joint Venture through an assignment by the EW Venturer of all of its right,
title and interest in the Joint Venture to the L'Auberge Venturer on the terms
and conditions hereinafter set forth.
B. The Joint Venture and Manager entered into that certain Property
Management Agreement (as it may have been amended, the "Property Management
Agreement") dated May 11, 1988, with respect to the Project whereby the Joint
Venture engaged Manager to manage the Project on the terms and conditions more
particularly set forth therein. Each of the Joint Venture and Manager now
desires to effectuate the termination of the Property Management Agreement on
the terms and conditions hereinafter set forth.
C. The Project is encumbered by a Deed of Trust and Security Agreement
dated September 10, 1990 (the "Deed of Trust") securing certain indebtedness of
the Joint Venture in favor of The Lincoln National Life Insurance Company
("Lender"). Under the provisions of the Deed of Trust, the Joint Venture is
required to obtain Lender's consent to the termination of Manager, and the
appointment of a successor, as manager of the Project.
D. The L'Auberge Venturer has inspected the Project in order to
determine the physical, operational and financial condition thereof and
acknowledges that it has approved the result of such inspection except as
otherwise provided in Paragraph 4(b) below.
E. Concurrently herewith, various other entities affiliated with the
L'Auberge Venturer and the EW Venturer are entering into other agreements
(collectively, the "Other Agreements") pertaining to other joint ventures and
containing substantially the same provisions as this Agreement. The Other
Agreements and this Agreement are collectively referred to herein as the
"Agreements." The parties contemplate that the closings with respect to each of
the Agreements shall be conditions concurrent and shall occur simultaneously.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
1. Termination of Property Management Agreement.
(a) At the Closing (hereinafter defined), Manager, on the one hand, and
the Joint Venture and the L'Auberge Venturer, on the other hand, shall enter
into a Termination Agreement in the form attached hereto as Exhibit A and
incorporated herein by this reference, and the Joint Venture shall pay to
Manager accrued compensation in accordance with the provisions of the
Termination Agreement.
(b) Prior to the Closing, Manager shall continue to manage the Project
in the same manner and with the same quality as the Project has been managed
prior to the execution hereof (and in any event in compliance with the terms and
conditions of the Property Management Agreement) and shall be entitled to
receive a Property Management Fee in accordance therewith.
2. Termination of Right of First Refusal.
At the Closing, the EW Venturer shall terminate its right of first
refusal with respect to the Project by executing and delivering that certain
First Amendment to Joint Venture Agreement of Mariposa Joint Venture (the
"Amendment"), in the form attached hereto as Exhibit B and incorporated herein
by this reference.
3. Assignment of Joint Venture Interest; Dissolution and Termination of Joint
Venture.
(a) At the Closing, the EW Venturer shall assign all of its right,
title and interest in and to its interest in and to the Joint Venture and in, to
and under the Joint Venture Agreement to the L'Auberge Venturer by executing and
delivering that certain Assignment of Joint Venture Interest (the "Assignment")
in the form attached hereto as Exhibit C and incorporated herein by this
reference, except as provided in Paragraph 4(a) below. Following such
assignment, the EW Venturer shall have no right to participate in any manner in
the management or control of the Joint Venture or the Project and shall be
released from any liability with respect to the ownership or operation of the
Project accruing and arising from and after the Closing, notwithstanding the
provisions of Paragraph 3(b) below.
(b) Concurrently with such assignment, the L'Auberge Venturer and the
Joint Venture, on the one hand, and the EW Venturer, on the other hand, shall
execute and deliver that certain Partnership Interest Payment Agreement in the
form attached hereto as Exhibit D and incorporated herein by this reference.
(c) Immediately following such assignment, the L'Auberge Venturer shall
hold one hundred percent (100%) of the interest in the Joint Venture and shall
cause the dissolution and termination thereof by filing or recording such
documents (including without limitation a Termination of Certificate of
Fictitious Name and Notice of Dissolution of Mariposa Joint Venture (the
"Termination") in the form attached hereto as Exhibit E and incorporated herein
by this reference) and/or taking such other steps as may be necessary or
appropriate in that regard.
4. Conditions to Closing.
(a)No later than the execution of this Agreement, the Joint Venture
shall solicit the consent of Lender to the transactions contemplated
hereby to the extent that such consent is required under the Deed of
Trust. The Joint Venture and the L'Auberge Venturer shall use
reasonable efforts (but shall not be required thereby to incur any
material cost or expense) to obtain such consent, to furnish Lender
with all required financial or other information requested by Lender in
connection with such consent and to obtain a written acknowledgment
from Lender that the loan with respect to which such consent is being
sought will not continue to apply against Lender's lending limit
applicable to Evans Withycombe Management, Inc., an Arizona corporation
("EWM"), or its affiliates following the assignment of the EW
Venturer's interest in the Joint Venture to the L'Auberge Venturer and
the dissolution of the Joint Venture. The Closing shall be subject to
receipt of Lender's written consent pursuant to such solicitation for
consent and the written consent of Lender and John Hancock Mutual Life
Insurance Company ("John Hancock") pursuant to all similar
solicitations being made concurrently herewith by various affiliates of
the Joint Venture under the Other Agreements. If such consents shall
not have been received by the Joint Venture on or before October 1,
1996 (the "Outside Closing Date"), this Agreement shall terminate
without liability of any party to the other hereunder on account of
such termination; provided, however, that in the event John Hancock
shall have failed or refused to give its consent to any of the other
transactions under one or more of the Other Agreements on or before the
Outside Closing Date but all other conditions to the Closing hereunder
shall have been satisfied, the transactions contemplated hereby shall
be consummated as set forth elsewhere in this Agreement.
(b) Prior to the execution hereof, the Joint Venture has commenced
an evaluation of the environmental condition of the Project. The approval by
the Joint Venture of the environmental condition of the Project as disclosed in
such evaluation shall be a condition to
the Closing unless the Joint Venture waives such condition in writing on or
before March 31, 1996. Failure by the Joint Venture to approve the evaluation or
waive the condition on or before March 31, 1996, in either case in writing,
shall be deemed a disapproval and shall result in a termination of this
Agreement without liability of any party to the other hereunder on account of
such termination. No partial or condition waivers or approvals shall be made or
given. In the event such condition is neither satisfied nor waived on or before
March 31, 1996, the Joint Venture shall immediately notify Lender thereof and
withdraw its request for consent described in Paragraph 4(a) above.
5. Payment of Settlement Amount.
At the Closing, the Joint Venture and the L'Auberge Joint Venturer
shall pay, or cause to be paid, to the EW Venturer and to Manager an amount (the
"Settlement Amount") which shall be equal to the excess of $500,000 over the
aggregate of the Settlement Amounts payable to the EW Venturer and Manager so
denominated in the Other Agreements; provided, however, that the total amount
payable to EWM under all of the Agreements shall be $500,000. The payment of the
Settlement Amount shall be made by confirmed wired funds or cashier's check to
EWM, as collection agent for the EW Venturer and Manager. The EW Venturer and
Manager, by their execution of this Agreement, hereby appoint EWM to act as
their agent for purposes of collecting and distributing the Settlement Amount,
and EWM, by its execution of this Agreement, hereby accepts such appointment.
6. Mutual Release.
At the Closing, the Joint Venture and the L'Auberge Venturer, on the
one hand, and the EW Venturer and Manager, on the other hand, shall execute and
deliver that certain Mutual Release in the form attached hereto as Exhibit F and
incorporated herein by this reference.
7. Closing.
(a) The Closing shall take place at the offices of Ryley, Carlock &
Applewhite, at 101 North First Avenue, Suite 2700, Phoenix, Arizona 85003, on
the third (3rd) business day following the satisfaction of the conditions to the
Closing enumerated in Paragraph 4 above (or waiver of the condition in Paragraph
4(b) above if such condition shall have been waived on or before March 31, 1996)
or on such earlier date as may be mutually agreeable to the parties hereto. If
such conditions are not satisfied or waived on or before the Outside Closing
Date, this Agreement and all obligations of the parties hereto shall
automatically terminate and be of no further force and effect.
(b) At the Closing, the parties shall cause the following to occur:
(i) The Joint Venture, the L'Auberge Joint Venturer and
Manager shall each execute and deliver the Termination Agreement.
(ii) The L'Auberge Venturer and the EW Venturer shall each
execute and deliver the Amendment.
(iii) The EW Venture and the L'Auberge Venturer shall each
execute and deliver the Assignment.
(iv) The L'Auberge Venturer shall execute and deliver the
Termination for recordation.
(v) The EW Venturer and the L'Auberge Venturer shall each
execute and deliver the Partnership Interest Payment Agreement.
(vi) The Joint Venture and the L'Auberge Venturer shall
deliver or cause to be delivered the Settlement Amount to EWM for the
benefit of the EW Venturer and Manager.
(vii) The Joint Venture, the L'Auberge Venturer, the EW
Venturer and Manager shall each execute and deliver the Mutual Release.
8. Representations and Warranties.
(a) The L'Auberge Venturer, for itself and the Joint Venture,
represents and warrants to the EW Venturer as follows:
(i) Each of the recitals set forth above is true and correct.
(ii) The L'Auberge Venturer is the Managing Venturer of the
Joint Venture and has not assigned, transferred, encumbered or
hypothecated all or any portion of its interest in the Joint Venture.
(iii) The Joint Venture and the L'Auberge Venturer each has the
legal power and authority, by and through those persons executing this
Agreement, to enter into this Agreement and to consummate the
transactions contemplated hereby, subject to the receipt of the consent
of Lender as provided in Paragraph 4 above.
(iv) Each of the Agreements contemplated hereby will when
executed be a valid and binding obligation of the Joint Venture and the
L'Auberge Venturer and will be enforceable in accordance with its
terms, subject to and limited by the effect of applicable bankruptcy,
insolvency, fraudulent transfer or conveyance, reorganization,
receivership, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights of creditors generally.
(v) No consent of any person related to or affiliated with
the L'Auberge Venturer which is not party to this Agreement, no consent
of any governmental authority and no additional consent other than
those which have already been or prior to the Closing will be obtained
is required to be obtained in connection with or resulting from the
execution, delivery or performance of this Agreement or the agreements
contemplated hereby by the L'Auberge Venturer.
(vi) The L'Auberge Venturer has not filed nor had filed
against it a petition in bankruptcy, made an assignment for the benefit
of creditors or had a receiver appointed to take custody of all or
substantially all of its assets.
(b) The EW Venturer and Manager each represent and warrant to the
Joint Venture and the L'Auberge Venturer as follows:
(i) Each of the recitals set forth above is true and correct.
(ii) The EW Venturer has not assigned, transferred, encumbered
or hypothecated all or any portion of its interest in the Joint Venture.
(iii) Manager and the L'Auberge Venturer each has the legal
power and authority, by and through those persons executing this
Agreement, to enter into this Agreement and to consummate the
transactions contemplated hereby, subject to the receipt of the consent
of Lender as provided in Paragraph 4 above.
(iv) Each of the Agreements contemplated hereby will when
executed be a valid and binding obligation of Manager and the EW
Venturer and will be enforceable in accordance with its terms, subject
to and limited by the effect of applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, receivership,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the rights of creditors generally.
(v) No consent of any person related to or affiliated with
the EW Venturer or Manager which is not party to this Agreement, no
consent of any governmental authority and no additional consent other
than those which have already been or prior to the Closing will be
obtained is required to be obtained in connection with or resulting
from the execution, delivery or performance of this Agreement or the
agreements contemplated hereby by the EW Venturer or Manager.
(vi) The EW Venturer has not filed nor had filed against it a
petition in bankruptcy, made an assignment for the benefit of creditors
or had a receiver appointed to take custody of all or substantially all
of its assets.
(vii) Neither the EW Venturer nor Manager has any actual
knowledge of any fact, condition or circumstance related to the
physical, environmental, operational and/or financial condition of the
Project that has not been disclosed in previous physical,
environmental, operational and/or financial reports prepared for or on
behalf of, and delivered to, the Joint Venture. Notwithstanding the
foregoing sentence, the representations and warranties of Manager and
the EW Venturer contained in this subparagraph (vii) shall not be
deemed to modify the provisions of the Property Management Agreement
between Manager and the Joint Venture or modify the provisions of any
development agreement, development obligations agreement or
construction agreement relating to the Project between the EW Venturer,
on the one hand, and the Joint Venture or the L'Auberge Joint Venturer,
on the other hand, including any express or implied warranties or
statutes of limitation relating thereto.
(c) The representations and warranties set forth herein have been made
as of the date hereof and shall be deemed to have been made as of the Closing
and shall survive the Closing.
9. General Provisions.
(a) Severability. The provisions of this Agreement shall be deemed
severable. If any provision hereof shall be found invalid, illegal, void or
unenforceable, in whole or in part, the remaining provisions or portions thereof
shall remain in full force and effect to the maximum extent permitted by
applicable law. To the maximum extent permitted by applicable law, each party
hereby waives any provision of law which renders any provision of this Agreement
invalid, illegal, void or unenforceable.
(b) Governing Law. This Agreement and all relations of the parties in
connection herewith shall be governed by and construed in accordance with the
laws of the State of Arizona, without giving effect to the conflict of laws or
choice of law rules or laws of such jurisdiction.
(c) Attorneys' Fees and Costs. In the event any party fails to perform
any of its obligations under this Agreement or in the event a dispute arises
concerning the meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses incurred by the other party in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys' fees. The prevailing party shall include,
without limitation, (i) a party who dismisses an action in exchange for sums
allegedly due, (ii) the party who received performance from the other party
where such performance is substantially equivalent to the relief sought in an
action, or (iii) the party determined to be the prevailing party by a court of
law, and the "party not prevailing" shall be the other party.
(d) Successors and Assigns. This Agreement set forth herein shall
be binding upon, and inure to the benefit of, any successors and assigns of the
parties.
(e) Entire Agreement; Modification. This Agreement set forth herein,
together with the schedules and exhibits attached hereto, shall constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior negotiations and agreements with respect to the
subject matter hereof. This Agreement may be modified only by an instrument in
writing duly executed by the party sought to be bound by such modification.
(f) Waivers. No breach of any covenant, condition, agreement, warranty
or representation made in this Agreement shall be deemed waived unless expressly
waived in writing by the party who might assert such breach. Any such waiver may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any such waiver may be conditional. No such waiver shall be
deemed to be a waiver of any other matter, whenever occurring and whether
identical, similar or dissimilar to the matter waived.
(g) Notices. All notices required or permitted by this Agreement shall
be in writing and may be delivered in person (by hand or by messenger or courier
service) or may be sent by regular certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given if served in a manner specified in this
Paragraph 9(g). The address of the L'Auberge Venturer and the Joint Venture for
notice purposes shall be as follows:
Mr. Stephen B. Boyle
Canyon View Apartments
6655 Canyon Crest Drive
Tucson, Arizona 85750
Attention: Rental Office
Facsimile No.: (520) 577-6703
With a copy to:
Hughes Hubbard & Reed
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Facsimile No.: (213) 613-2950
The address for the EW Venturer and Manager for notice purposes is as follows:
Evans Withycombe Management, Inc.
6991 East Camelback Road, Suite 200A
Scottsdale, Arizona 85251
Attention: Stephen Evans
Facsimile No.: (602) 423-8843
With a copy to:
Ryley, Carlock & Applewhite
101 First Avenue, Suite 2600
Phoenix, Arizona 85003-1973
Attention: Lynn T. Ziolko, Esq.
Facsimile No.: (602) 257-9582
Either party may by written notice to the other specify a different address for
notice purposes. A copy of all notices required or permitted to be given to
either party hereunder shall be concurrently transmitted to such party or
parties at such addresses as either party may from time to time hereafter
designate by written notice to the other.
Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by U.S. Postal Service Express Mail or overnight courier that guarantees next
day delivery shall be deemed given twenty-four (24) hours after delivery of the
same to the United States Postal Service or courier. If any notice is
transmitted by facsimile transmission or similar means, the same shall be deemed
served or delivered upon telephone confirmation of receipt of the transmission
thereof, provided that a copy is also delivered by delivery or mail. If any
notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
(h) Further Agreements and Assurances. Each party agrees promptly to
execute and deliver such other documents and to do such other acts as may be
requested by any other party and are in the reasonable judgment of the
requesting party necessary or appropriate to effectuate the purposes of this
Agreement.
(i) Headings; Gender; Number. The headings of the sections and
subsections herein are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of, this
Agreement. As used herein and as the context requires, a reference to the male,
female or neutral gender includes a reference to each other gender, and a
reference to the singular or plural number includes a reference to the other
number.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed to constitute an original.
(k) Default; Specific Performance. In the event that a party shall
default in the performance of any of its obligations or agreements hereunder,
the other party shall be entitled to specific performance of such obligations
and agreements by the defaulting party, in addition to any and all other
equitable and legal rights and remedies which such non-defaulting party may
have.
(l) No Admission. The parties hereto have entered into this Agreement
and entered into the negotiations that led to this Agreement, solely for the
purpose of compromising and settling various matters in dispute among the
parties. This Agreement, and the settlement negotiations that led to this
Agreement, however, shall not constitute an admission of any liability or
responsibility by any party as to any matter relating to the Joint Venture or
the Project.
(m) Nondisclosure of Terms. Each of the parties hereto hereby agrees
not to disclose the terms of this Agreement or the transactions contemplated
hereby to any person or entity (other than its respective partners, affiliates,
underwriters, agents, advisors, officers or employees who need to know such
information for the purpose of entering into and performing the obligations
under this Agreement or any other person or entity to whom such disclosure is
required by law), except (i) with the prior written consent of each of the other
parties hereto, (ii) in connection with any required financial accounting or
other required reporting or legal proceedings brought by any of the parties
hereto or their respective affiliates to enforce this Agreement or (iii) in
compliance with applicable legal requirements.
(n) Simultaneous Closing. Notwithstanding anything contained in this
Agreement or any of the Other Agreements to the contrary, the Closing shall not
occur unless there occurs the simultaneous closing of the transactions described
in the Other Agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MARIPOSA JOINT VENTURE
an Arizona joint venture partnership
By: Development Partners II,
(A Massachusetts Limited Partnership),
Managing Venturer
By: GP L'Auberge Communities, L.P.,
a California limited partnership,
General Partner
By: L'Auberge Communities Inc.,
General Partner
By: _________________________
Stephen B. Boyle
President
DEVELOPMENT PARTNERS II,
(A MASSACHUSETTS LIMITED PARTNERSHIP)
By: L'Auberge Communities, L.P.,
a California limited partnership,
General Partner
By: L'Auberge Communities Inc.,
General Partner
By: _________________________
Stephen B. Boyle
President [signatures continued.]
<PAGE>
EW MARIPOSA LIMITED PARTNERSHIP,
an Arizona limited partnership
By: EW Development Corp. IX, Inc.,
an Arizona corporation
its general partner
By: ____________________________
Name: ______________________
Title:______________________
EWI MANAGEMENT LIMITED PARTNERSHIP,
an Arizona limited partnership
By: Evans Withycombe Management, Inc.,
an Arizona corporation,
formerly known as Evans Withycombe, Inc.,
its general partner
By: _______________________
Name: _________________
Title:__________________
The undersigned accepts its appointment as collection agent pursuant to
Paragraph 5 above:
EVANS WITHYCOMBE MANAGEMENT, INC.,
an Arizona corporation
By:
Name:
Title:
AGREEMENT
(Casabella)
This Agreement is made and entered into as of March 29, 1996, by and
among Casabella Joint Venture, an Arizona joint venture partnership (the "Joint
Venture"), Casabella Associates, an Arizona joint venture partnership (the
"L'Auberge Venturer"), EW Casabella I Limited Partnership, an Arizona limited
partnership (the "EW Venturer") and Evans Withycombe Management, Inc., an
Arizona corporation ("Manager"), with reference to the following:
A. The L'Auberge Venturer and the EW Venturer formed the Joint Venture
by entering into that certain Joint Venture Agreement of Casabella Joint Venture
dated October 1, 1990 (as amended, the "Joint Venture Agreement"). The Joint
Venture owns that certain multi-family residential project (the "Project")
located at 10101 North Arabian Trail, Scottsdale, Arizona, and commonly known as
Casabella Apartments. Each of the L'Auberge Venturer and the EW Venturer now
desires to effectuate the amicable and mutual dissolution and termination of the
Joint Venture through an assignment by the EW Venturer of all of its right,
title and interest in the Joint Venture to the L'Auberge Venturer on the terms
and conditions hereinafter set forth.
B. The Joint Venture and Manager entered into those certain Property
Management Agreements (as they may have been amended, the "Property Management
Agreement") dated December 29, 1989, and October 3, 1990, with respect to the
Project whereby the Joint Venture engaged Manager to manage the Project on the
terms and conditions more particularly set forth therein. Each of the Joint
Venture and Manager now desires to effectuate the termination of the Property
Management Agreement on the terms and conditions hereinafter set forth.
C. The Project is encumbered by a Deed of Trust and Security Agreement
dated June 25, 1993 (the "Deed of Trust"), securing certain indebtedness of the
Joint Venture in favor of The Lincoln National Life Insurance Company
("Lender"). Under the provisions of the Deed of Trust, the Joint Venture is
required to obtain Lender's consent to the termination of Manager, and the
appointment of a successor, as manager of the Project.
D. The L'Auberge Venturer has inspected the Project in order to
determine the physical, operational and financial condition thereof and
acknowledges that it has approved the result of such inspection except as
otherwise provided in Paragraph 4(b) below.
E. Concurrently herewith, various other entities affiliated with the
L'Auberge Venturer and the EW Venturer are entering into other agreements
(collectively, the "Other Agreements") pertaining to other joint ventures and
containing substantially the same provisions as this Agreement. The Other
Agreements and this Agreement are collectively referred to herein as the
"Agreements." The parties contemplate that the closings with respect to each of
the Agreements shall be conditions concurrent and shall occur simultaneously.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
1. Termination of Property Management Agreement.
(a) At the Closing (hereinafter defined), Manager, on the one hand, and
the Joint Venture and the L'Auberge Venturer, on the other hand, shall enter
into a Termination Agreement in the form attached hereto as Exhibit A and
incorporated herein by this reference, and the Joint Venture shall pay to
Manager accrued compensation in accordance with the provisions of the
Termination Agreement.
(b) Prior to the Closing, Manager shall continue to manage the Project
in the same manner and with the same quality as the Project has been managed
prior to the execution hereof (and in any event in compliance with the terms and
conditions of the Property Management Agreement) and shall be entitled to
receive a Property Management Fee in accordance therewith.
2. Termination of Right of First Refusal.
At the Closing, the EW Venturer shall terminate its right of first
refusal with respect to the Project by executing and delivering that certain
First Amendment to Joint Venture Agreement of Casabella Joint Venture (the
"Amendment"), in the form attached hereto as Exhibit B and incorporated herein
by this reference.
3. Assignment of Joint Venture Interest; Dissolution and Termination of
Joint Venture.
(a) At the Closing, the EW Venturer shall assign all of its right,
title and interest in and to its interest in and to the Joint Venture and in, to
and under the Joint Venture Agreement to the L'Auberge Venturer by executing and
delivering that certain Assignment of Joint Venture Interest (the "Assignment")
in the form attached hereto as Exhibit C and incorporated herein by this
reference, except as provided in Paragraph 4(a) below. Following such
assignment, the EW Venturer shall have no right to participate in any manner in
the management or control of the Joint Venture or the Project and shall be
released from any liability with respect to the ownership or operation of the
Project accruing and arising from and after the Closing, notwithstanding the
provisions of Paragraph 3(b) below.
(b) Concurrently with such assignment, the L'Auberge Venturer and the
Joint Venture, on the one hand, and the EW Venturer, on the other hand, shall
execute and deliver that certain Partnership Interest Payment Agreement in the
form attached hereto as Exhibit D and incorporated herein by this reference.
(c) Immediately following such assignment, the L'Auberge Venturer shall
hold one hundred percent (100%) of the interest in the Joint Venture and shall
cause the dissolution and termination thereof by filing or recording such
documents (including without limitation a Termination of Certificate of
Fictitious Name and Notice of Dissolution of Casabella Joint Venture (the
"Termination") in the form attached hereto as Exhibit E and incorporated herein
by this reference) and/or taking such other steps as may be necessary or
appropriate in that regard.
4. Conditions to Closing.
(a)No later than the execution of this Agreement, the Joint Venture
shall solicit the consent of Lender to the transactions contemplated
hereby to the extent that such consent is required under the Deed of
Trust. The Joint Venture and the L'Auberge Venturer shall use
reasonable efforts (but shall not be required thereby to incur any
material cost or expense) to obtain such consent, to furnish Lender
with all required financial or other information requested by Lender in
connection with such consent and to obtain a written acknowledgment
from Lender that the loan with respect to which such consent is being
sought will not continue to apply against Lender's lending limit
applicable to Evans Withycombe Management, Inc., an Arizona corporation
("EWM"), or its affiliates following the assignment of the EW
Venturer's interest in the Joint Venture to the L'Auberge Venturer and
the dissolution of the Joint Venture. The Closing shall be subject to
receipt of Lender's written consent pursuant to such solicitation for
consent and the written consent of Lender and John Hancock Mutual Life
Insurance Company ("John Hancock") pursuant to all similar
solicitations being made concurrently herewith by various affiliates of
the Joint Venture under the Other Agreements. If such consents shall
not have been received by the Joint Venture on or before October 1,
1996 (the "Outside Closing Date"), this Agreement shall terminate
without liability of any party to the other hereunder on account of
such termination; provided, however, that in the event John Hancock
shall have failed or refused to give its consent to any of the other
transactions under one or more of the Other Agreements on or before the
Outside Closing Date but all other conditions to the Closing hereunder
shall have been satisfied, the transactions contemplated hereby shall
be consummated as set forth elsewhere in this Agreement.
(b) Prior to the execution hereof, the Joint Venture has commenced an
evaluation of the environmental condition of the Project. The approval by the
Joint Venture of the environmental condition of the Project as disclosed in such
evaluation shall be a condition to the Closing unless the Joint Venture waives
such condition in writing on or before March 31, 1996. Failure by the Joint
Venture to approve the evaluation or waive the condition on or before March 31,
1996, in either case in writing, shall be deemed a disapproval and shall result
in a termination of this Agreement without liability of any party to the other
hereunder on account of such termination. No partial or condition waivers or
approvals shall be made or given. In the event such condition is neither
satisfied nor waived on or before March 31,
<PAGE>
1996, the Joint Venture shall immediately notify Lender thereof and withdraw its
request for consent described in Paragraph 4(a) above.
5. Payment of Settlement Amount.
At the Closing, the Joint Venture and the L'Auberge Joint Venturer
shall pay, or cause to be paid, to the EW Venturer and to Manager an amount (the
"Settlement Amount") which shall be equal to the excess of $500,000 over the
aggregate of the Settlement Amounts payable to the EW Venturer and Manager so
denominated in the Other Agreements; provided, however, that the total amount
payable to EWM under all of the Agreements shall be $500,000. The payment of the
Settlement Amount shall be made by confirmed wired funds or cashier's check to
EWM, as collection agent for the EW Venturer and Manager. The EW Venturer and
Manager, by their execution of this Agreement, hereby appoint EWM to act as
their agent for purposes of collecting and distributing the Settlement Amount,
and EWM, by its execution of this Agreement, hereby accepts such appointment.
6. Mutual Release.
At the Closing, the Joint Venture and the L'Auberge Venturer, on the
one hand, and the EW Venturer and Manager, on the other hand, shall execute and
deliver that certain Mutual Release in the form attached hereto as Exhibit F and
incorporated herein by this reference.
7. Closing.
(a) The Closing shall take place at the offices of Ryley, Carlock &
Applewhite, at 101 North First Avenue, Suite 2700, Phoenix, Arizona 85003, on
the third (3rd) business day following the satisfaction of the conditions to the
Closing enumerated in Paragraph 4 above (or waiver of the condition in Paragraph
4(b) above if such condition shall have been waived on or before March 31, 1996)
or on such earlier date as may be mutually agreeable to the parties hereto. If
such conditions are not satisfied or waived on or before the Outside Closing
Date, this Agreement and all obligations of the parties hereto shall
automatically terminate and be of no further force and effect.
(b) At the Closing, the parties shall cause the following to occur:
(i) The Joint Venture, the L'Auberge Joint Venturer and
Manager shall each execute and deliver the Termination Agreement.
(ii) The L'Auberge Venturer and the EW Venturer shall each
execute and deliver the Amendment.
(iii) The EW Venture and the L'Auberge Venturer shall each
execute and deliver the Assignment.
(iv) The L'Auberge Venturer shall execute and deliver the
Termination for recordation.
(v) The EW Venturer and the L'Auberge Venturer shall each
execute and deliver the Partnership Interest Payment Agreement.
(vi) The Joint Venture and the L'Auberge Venturer shall
deliver or cause to be delivered the Settlement Amount to EWM for the
benefit of the EW Venturer and Manager.
(vii) The Joint Venture, the L'Auberge Venturer, the EW
Venturer and Manager shall each execute and deliver the Mutual Release.
8. Representations and Warranties.
(a) The L'Auberge Venturer, for itself and the Joint Venture,
represents and warrants to the EW Venturer as follows:
(i) Each of the recitals set forth above is true and correct.
(ii) The L'Auberge Venturer is the Managing Venturer of the
Joint Venture and has not assigned, transferred, encumbered or
hypothecated all or any portion of its interest in the Joint Venture.
(iii) The Joint Venture and the L'Auberge Venturer each has the
legal power and authority, by and through those persons executing this
Agreement, to enter into this Agreement and to consummate the
transactions contemplated hereby, subject to the receipt of the consent
of Lender as provided in Paragraph 4 above.
(iv) Each of the Agreements contemplated hereby will when
executed be a valid and binding obligation of the Joint Venture and the
L'Auberge Venturer and will be enforceable in accordance with its
terms, subject to and limited by the effect of applicable bankruptcy,
insolvency, fraudulent transfer or conveyance, reorganization,
receivership, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights of creditors generally.
(v) No consent of any person related to or affiliated with
the L'Auberge Venturer which is not party to this Agreement, no consent
of any governmental authority and no additional consent other than
those which have already been or prior to the Closing will be obtained
is required to be obtained in connection with or resulting from the
execution, delivery or performance of this Agreement or the agreements
contemplated hereby by the L'Auberge Venturer.
(vi) The L'Auberge Venturer has not filed nor had filed
against it a petition in bankruptcy, made an assignment for the benefit
of creditors or had a receiver appointed to take custody of all or
substantially all of its assets.
(b) The EW Venturer and Manager each represent and warrant to the
Joint Venture and the L'Auberge Venturer as follows:
(i) Each of the recitals set forth above is true and correct.
(ii) The EW Venturer has not assigned, transferred,
encumbered or hypothecated all or any portion of its
interest in the Joint Venture.
(iii) Manager and the L'Auberge Venturer each has the legal
power and authority, by and through those persons executing this
Agreement, to enter into this Agreement and to consummate the
transactions contemplated hereby, subject to the receipt of the consent
of Lender as provided in Paragraph 4 above.
(iv) Each of the Agreements contemplated hereby will when
executed be a valid and binding obligation of Manager and the EW
Venturer and will be enforceable in accordance with its terms, subject
to and limited by the effect of applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, receivership,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the rights of creditors generally.
(v) No consent of any person related to or affiliated with
the EW Venturer or Manager which is not party to this Agreement, no
consent of any governmental authority and no additional consent other
than those which have already been or prior to the Closing will be
obtained is required to be obtained in connection with or resulting
from the execution, delivery or performance of this Agreement or the
agreements contemplated hereby by the EW Venturer or Manager.
(vi) The EW Venturer has not filed nor had filed against it a
petition in bankruptcy, made an assignment for the benefit of creditors
or had a receiver appointed to take custody of all or substantially all
of its assets.
(vii) Neither the EW Venturer nor Manager has any actual
knowledge of any fact, condition or circumstance related to the
physical, environmental, operational and/or financial condition of the
Project that has not been disclosed in previous physical,
environmental, operational and/or financial reports prepared for or on
behalf of, and delivered to, the Joint Venture. Notwithstanding the
foregoing sentence, the representations and warranties of Manager and
the EW Venturer contained in this subparagraph (vii) shall not be
deemed to modify the provisions of the Property Management Agreement
between Manager and the Joint Venture or modify the provisions of any
development agreement, development obligations agreement or
construction agreement relating to the Project between the EW Venturer,
on the one hand, and the Joint Venture or the L'Auberge Joint Venturer,
on the other hand, including any express or implied warranties or
statutes of limitation relating thereto.
(c) The representations and warranties set forth herein have been made
as of the date hereof and shall be deemed to have been made as of the Closing
and shall survive the Closing.
9. General Provisions.
(a) Severability. The provisions of this Agreement shall be deemed
severable. If any provision hereof shall be found invalid, illegal, void or
unenforceable, in whole or in part, the remaining provisions or portions thereof
shall remain in full force and effect to the maximum extent permitted by
applicable law. To the maximum extent permitted by applicable law, each party
hereby waives any provision of law which renders any provision of this Agreement
invalid, illegal, void or unenforceable.
(b) Governing Law. This Agreement and all relations of the parties in
connection herewith shall be governed by and construed in accordance with the
laws of the State of Arizona, without giving effect to the conflict of laws or
choice of law rules or laws of such jurisdiction.
(c) Attorneys' Fees and Costs. In the event any party fails to perform
any of its obligations under this Agreement or in the event a dispute arises
concerning the meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses incurred by the other party in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys' fees. The prevailing party shall include,
without limitation, (i) a party who dismisses an action in exchange for sums
allegedly due, (ii) the party who received performance from the other party
where such performance is substantially equivalent to the relief sought in an
action, or (iii) the party determined to be the prevailing party by a court of
law, and the "party not prevailing" shall be the other party.
(d) Successors and Assigns. This Agreement set forth herein shall
be binding upon, and inure to the benefit of, any successors
and assigns of the parties.
(e) Entire Agreement; Modification. This Agreement set forth herein,
together with the schedules and exhibits attached hereto, shall constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior negotiations and agreements with respect to the
subject matter hereof. This Agreement may be modified only by an instrument in
writing duly executed by the party sought to be bound by such modification.
(f) Waivers. No breach of any covenant, condition, agreement, warranty
or representation made in this Agreement shall be deemed waived unless expressly
waived in writing by the party who might assert such breach. Any such waiver may
be made in advance or after the right waived has arisen or the breach or default
waived has occurred. Any such waiver may be conditional. No such waiver shall be
deemed to be a waiver of any other matter, whenever occurring and whether
identical, similar or dissimilar to the matter waived.
(g) Notices. All notices required or permitted by this Agreement shall
be in writing and may be delivered in person (by hand or by messenger or courier
service) or may be sent by regular certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given if served in a manner specified in this
Paragraph 9(g). The address of the L'Auberge Venturer and the Joint
<PAGE>
Venture for notice purposes shall be as follows:
Mr. Stephen B. Boyle
Canyon View Apartments
6655 Canyon Crest Drive
Tucson, Arizona 85750
Attention: Rental Office
Facsimile No.: (520) 577-6703
With a copy to:
Hughes Hubbard & Reed
350 South Grand Avenue, Suite 3600
Los Angeles, California 90071-3442
Attention: George A. Furst, Esq.
Facsimile No.: (213) 613-2950
The address for the EW Venturer and Manager for notice purposes is as follows:
Evans Withycombe Management, Inc.
6991 East Camelback Road, Suite 200A
Scottsdale, Arizona 85251
Attention: Stephen Evans
Facsimile No.: (602) 423-8843
With a copy to:
Ryley, Carlock & Applewhite
101 First Avenue, Suite 2600
Phoenix, Arizona 85003-1973
Attention: Lynn T. Ziolko, Esq.
Facsimile No.: (602) 257-9582
Either party may by written notice to the other specify a different address for
notice purposes. A copy of all notices required or permitted to be given to
either party hereunder shall be concurrently transmitted to such party or
parties at such addresses as either party may from time to time hereafter
designate by written notice to the other.
Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by U.S. Postal Service Express Mail or overnight courier that guarantees next
day delivery shall be deemed given twenty-four (24) hours after delivery of the
same to the United States Postal Service or courier. If any notice is
transmitted by facsimile transmission or similar means, the same shall be deemed
served or delivered upon telephone confirmation of receipt of the transmission
thereof, provided that a copy is also delivered by delivery or mail. If any
notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
(h) Further Agreements and Assurances. Each party agrees promptly to
execute and deliver such other documents and to do such other acts as may be
requested by any other party and are in the reasonable judgment of the
requesting party necessary or appropriate to effectuate the purposes of this
Agreement.
(i) Headings; Gender; Number. The headings of the sections and
subsections herein are inserted for convenience of reference only and are not
intended to be a part of, or to affect the meaning or interpretation of, this
Agreement. As used herein and as the context requires, a reference to the male,
female or neutral gender includes a reference to each other gender, and a
reference to the singular or plural number includes a reference to the other
number.
(j) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
each of which shall be deemed to constitute an original.
(k) Default; Specific Performance. In the event that a party shall
default in the performance of any of its obligations or agreements hereunder,
the other party shall be entitled to specific performance of such obligations
and agreements by the defaulting party, in addition to any and all other
equitable and legal rights and remedies which such non-defaulting party may
have.
(l) No Admission. The parties hereto have entered into this Agreement
and entered into the negotiations that led to this Agreement, solely for the
purpose of compromising and settling various matters in dispute among the
parties. This Agreement, and the settlement negotiations that led to this
Agreement, however, shall not constitute an admission of any liability or
responsibility by any party as to any matter relating to the Joint Venture or
the Project.
(m) Nondisclosure of Terms. Each of the parties hereto hereby agrees
not to disclose the terms of this Agreement or the transactions contemplated
hereby to any person or entity (other than its respective partners, affiliates,
underwriters, agents, advisors, officers or employees who need to know such
information for the purpose of entering into and performing the obligations
under this Agreement or any other person or entity to whom such disclosure is
required by law), except (i) with the prior written consent of each of the other
parties hereto, (ii) in connection with any required financial accounting or
other required reporting or legal proceedings brought by any of the parties
hereto or their respective affiliates to enforce this Agreement or (iii) in
compliance with applicable legal requirements.
(n) Simultaneous Closing. Notwithstanding anything contained in
this Agreement or any of the Other Agreements to the contrary, the Closing shall
not occur unless there occurs the simultaneous closing of the transactions
described in the Other Agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CASABELLA JOINT VENTURE,
an Arizona joint venture partnership
By: Casabella Associates,
Managing Venturer
By: Development Partners III
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P.,
a California limited partnership,
General Partner
By: L'Auberge Communities Inc.,
General Partner
By: ____________________
Stephen B. Boyle
President
CASABELLA ASSOCIATES,
an Arizona joint venture partnership
By: Development Partners III
(A Massachusetts Limited Partnership)
By: GP L'Auberge Communities, L.P.,
a California limited partnership,
General Partner
By: L'Auberge Communities Inc.,
General Partner
By: ____________________
Stephen B. Boyle
President
[signatures continued.]
<PAGE>
EW CASABELLA I LIMITED PARTNERSHIP,
an Arizona limited partnership
By: EWI Management, Inc.,
an Arizona corporation,
its general partner
By: ________________________
Name: __________________
Title:__________________
EVANS WITHYCOMBE MANAGEMENT, INC., an Arizona corporation formerly known as
Evans Withycombe, Inc.
By: ____________________________
Name: ______________________
Title:______________________
The undersigned accepts its appointment as collection agent pursuant to
Paragraph 5 above:
EVANS WITHYCOMBE MANAGEMENT, INC.,
an Arizona corporation
By:
Name:
Title:
