VAIL RANCH LIMITED PARTNERSHIP
AMENDMENT NO. 1
THIS AGREEMENT is entered into as of the 25th day of January, 1996, by and
between Landgrant Corporation, hereinafter referred to as "General Partner," and
Old Vail Partners, L.P., as successor in interest to Old Vail Partners
hereinafter referred to as "Limited Partner."
RECITALS
A. WHEREAS, General Partner and Limited Partner entered into a written
Partnership Agreement (hereinafter referred to as the "Partnership"), dated
April 1, 1994, (hereinafter referred to as the "Formation Date") for the
purpose of developing, financing, constructing, leasing, and managing a
Shopping Center on that certain land hereinafter referred to as the
"Project," located in the City of Temecula, County of Riverside, State of
California. Said shopping center and the Project are more particularly
described and illustrated in Exhibit "A" of the Partnership Agreement.
B. WHEREAS, prior to the Formation Date, Riverside County started legal
proceedings to foreclose liens against the "Real Property" (as defined in the
Partnership Agreement) securing certain delinquent assessments. The fourth
sentence of Section 3.4(b)3 of Partnership Agreement provided in pertinent
part:
The Limited Partner hereby agrees, within thirty (30) days after the
Partnership Agreement is executed, to cure the County foreclosure
proceeding by either paying in full the delinquent taxes or negotiating a
partial settlement with installment payments.
As used in this amendment, the term "Assessment Resolution" shall mean either
paying in full the delinquent taxes or negotiating a partial settlement with
installment payments. As of the date of this amendment, the County continues
to prosecute the foreclosure proceedings.
C. WHEREAS, the General Partner has alleged the failure to perfect an Assessment
Resolution has thwarted its efforts to procure financing for the Project. By
this amendment, the Parties intend to: (a) mitigate the adverse impact, if
any, on the General Partner resulting from the alleged failure to perfect an
Assessment Resolution; and (b) effective as of the date the Project's
financing is procured, evidence the Partnership's, the General Partner's and
the Limited Partner's mutual release of each other's liability, if any, for
any and all loss, claims or damages resulting from the alleged failure to
perfect an Assessment Resolution.
TERMS
NOW, THEREFOR, for good and valuable consideration and the mutual agreements
herein contained, the Parties agree as follows:
1. Amendment of Partnership. The Parties hereby agree to amend Section 3.1 by
deleting it in its entirety and substituting in lieu thereof the following:
The General Partner shall be Landgrant Corporation, which shall own a
fifty percent (50%) interest in the Partnership's profits and losses
associated with Phase I eleven acres and the General Partner shall own
a forty percent (40%) interest in the Partnership's profits and losses
associated with the Phase II-sixteen acres.
2. Amendment of Partnership. The Parties hereby agree to amend Section 3.2 by
deleting it in its entirety and substituting in lieu thereof the following:
3.2. The Limited Partner shall be Old Vail Partners, L.P. which shall
own a fifty percent (50%) interest in the Partnership's profits and
losses associated with the Phase I-eleven acres and the Limited Partner
shall own a sixty percent (60%) interest in the Partnerships profits
and losses associated with the Phase II-sixteen acres.
3. Amendment of Partnership., The Parties hereby agree to amend Section 3.4(b)l
by deleting it in its entirety and substituting in lieu thereof the
following:
The Limited Partner shall be deemed to have contributed the Phase I
land with an imputed value of $1,918,382.00 as of the Formation Date.
The imputed value is a negotiated amount derived by an agreement among
the Parties based upon Phase I-eleven acres of land valued at $4.00 per
square foot. This gross amount is subject to an allocation among the
specific parcels by the Parties, in consultation with other
consultants, who can help determine a more accurate allocation of value
attributed to each of the parcels within the Phase I- eleven acres.
The Limited Partners imputed land value shall accrue, as of the
Formation Date an increase in value in an amount equal to "prime plus
one percent" through the Effective Date of this Agreement. From the
Effective Date of this Agreement the amount of the accrued increase in
value shall be 5% per annum. In each instance the accrued increase in
value shall be computed as simple interest non-compounded.
The Limited Partner's capital account on Phase I will be reduced by the
delinquent property taxes and delinquent assessments prior to
Partnership formation (April 1, 1994), Phase II property taxes and
assessments during the period from Partnership formation to execution
of Vail Ranch Limited Partnership Amendment #1 (January 25, 1996) and
Presley lien (excluding improvement costs for County Glen and Presley
dirt which will be Partnership expense) if paid off by Partnership.
The Parties agree that there shall be no other imputed value for any
other land contributed by the Limited Partner.
4. Amendment of Partnership. The Parties hereby agree to amend Section 3.4(b)2
by deleting it in its entirety and substituting in lieu thereof the
following:
The General Partner shall be deemed to have contributed value to the
Partnership in the amount of $350,000. Said contribution is
attributable to those contract rights which it has obtained from
various retailers listed on Exhibit "C" of the Partnership as well as
those entitlement rights which it has obtained from the governmental
agencies with regard to the Project. The General Partners Capital
Account will accrue an increase in value under the same terms as the
Limited Partners Capital Account.
5. Amendment of Partnership. The Parties hereby agree to amend Section
3.5.2.2(e), by deleting the first full paragraph thereof and substituting in
lieu thereof the following:
Whether or not operating revenues are available to pay the cost to
carry taxes and assessments on the Phase II sixteen acres of land or
portion thereof prior to its Development Completion, neither the
Limited Partner nor the General Partner shall have the obligation to
provide the funds necessary. If either Party desires to make the
necessary funds available unilaterally, the Partnership shall quitclaim
to the party so desiring all of the Partnership's right, title and
interest in that particular parcel upon three (3) days written demand
to do so.
6. Amendment of Partnership. The Parties hereby agree to amend Section 4.1(f) by
deleting the entire paragraph and substituting in lieu thereof the following:
4.1(f) If General Partner and Limited Partner agree, pay carry cost of
Phase II property (Assessment District and real property taxes).
7. Amendment of Partnership. The Parties hereby agree to amend the Partnership
by adding Section 2.31. as follows:
2.31. Maintenance of Economic Substance. The Parties acknowledge that
the maintenance of Capital Accounts for tax and accounting purposes
must adhere to technical standards as is evidenced in certain
provisions of the Partnership. However notwithstanding such technical
requirements, the Parties agree that the economic substance as
negotiated between the Parties makes use of the concept of Imputed
Value Accounts evidencing their relative contributions. Additionally,
the Parties have agreed to provisions which provide for ownership
percentages and priority distributions that differ for Phase I-11 acres
and Phase II-sixteen acres and therefor the Parties agree to maintain
separate Imputed Value Accounts for each Partner and for each Phase.
These Imputed Value Accounts will be used to determine the priority
distributions between them. To the extent cash is generated from one
phase and is used to pay the expenses or costs of another phase, the
Imputed Value Account will be adjusted as though there was a cash
distribution to the Partners from the one phase generating the cash in
accordance with the required distribution for that phase and a
corresponding cash capital contribution by the Partners to the other
phase. For example, the Parties agree that to the extent any portion of
the Phase II-sixteen acres is sold and if any portion of the sale
proceeds are used to pay off the construction loan or permanent loan
for the Phase I-eleven acres and thereby not be distributed to the
Partners then the General Partner shall have its "Imputed Value
Account" increased equal to forty percent (40%) of any such sale
proceeds and the Limited Partner shall have its "Imputed Value Account"
increased by sixty percent (60%). This is intended to allow the
Partners to receive the proper amount of sale proceeds upon the
ultimate sale of Phase I-eleven acres.
8. Effective Date. This Amendment of Partnership shall become effective as of
the opening of the business day of January 25, 1996, herein referred to as
the "Effective Date".
9. Effectiveness of Partnership. Except as expressly provided herein, nothing in
this Agreement shall be deemed to waive or modify any of the provisions of
the Partnership, or any amendment or addendum thereto. In the event of any
conflict between the Partnership, this Agreement or any other amendment or
addendum thereof, the document later in time shall prevail.
10.Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the heirs, executors, administrators, successors and assigns
of the respective Parties hereto.
11.Counterparts. This Agreement may be executed in several counterparts, each
of which may be deemed an original, but all of which together shall
constitute one and the same Agreement.
12. Release and Waiver.
12.1 Effective only if project financing occurs and as of such date,
the Partnership, the General Partner and the Limited Partner (each a
"Releasor") hereby releases and forever discharges each other Releasor,
it's agents, directors, employees, officers, representatives,
attorneys, successors, and assigns from any and all claims, demands,
and causes or causes of action or any nature whatsoever, whether know
or unknown, fixed or contingent, matured or unmatured, or otherwise
existing or hereafter arising out of, related to or connected with the
alleged failure to perfect the Assessment Resolution. Each Releasor
represents and warrants that it has not heretofore sold, assigned,
hypothecated or otherwise transferred to any third party any rights or
interests in or to any such claims, demands or cause or causes of
action. 12.2 Upon the effective date of such release, each Releasor
acknowledges that it may have claims against each other Releasor of
which it has no knowledge at the time of the execution of this release.
This release extends to any and all claims in' any way based upon any
obligation of any Releasor to perfect an Assessment Resolution prior to
the effective date of the release, whether known or unknown, as of the
date of this amendment. As further consideration and inducement, each
Releasor waives the provisions of Section 1542 of the California Civil
Code, which reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and year first above written.
"General Partner" "Limited Partner" i
LANDGRANT CORPORATION, OLD VAIL PARTNERS, L.P.,
a California corporation a California limited partnership
By: /S/ C. Samuel Marasco By: OVGP, INC.,
C. Samuel Marasco, President a California corporation,
its general partner
By: /S/ Christopher Smith By: /S/ Harold S. Elkan
Christopher Smith, Harold S. Elkan, President
Executive Vice President