EXHIBIT *10.1
CONTRACT TERMINATION AGREEMENT
This Contract Termination Agreement, dated April 1, 1996 for reference, is
entered into by and between REGENCY SERVICE CORPORATION, a California
corporation ("RSC"), and PEACHWOOD PARK, a California limited partnership
("Project Manager").
RECITALS
A. Project Manager has heretofore provided to RSC certain management
services in connection with RSC's real estate investments. Such services have
been provided pursuant to the terms and conditions set forth in a series of
annual management agreements. The most recent of such management agreements was
entered into on April 17, 1991, effective January 1, 1991 (the "1991
Agreement"), and has been continued in effect on an annual basis since that
date.
B. The 1991 Agreement and its predecessors contemplated that the various
real estate projects for which Project Manager would render its services would
be completed and sold in the ordinary course of business according to the
original intentions of the parties and/or the business plan for each project.
However, the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), which became effective after the 1991 Management Agreement was
executed, has mandated that banks engaged, directly or indirectly, in real
estate development activities divest themselves of those activities by December
19, 1996. As a result, Project Manager has been called upon to provide
management services that are different from or in addition to those that were
set forth in the 1991 Management Agreement.
C. Because of the different services now required by RSC to be performed
by the Project Manager, RSC and Project Manager desire to terminate the 1991
Management Agreement.
D. In addition, the parties acknowledge that a dispute exists with regard
to the amount of compensation due Project Manager for services rendered under
the 1991 Management Agreement for periods prior to the effective date of this
Agreement, including, without limitation, whether the 1991 Management Agreement
requires that Project Manager be liable for one-third of any losses incurred
upon final disposition of a project under Project Manager's management and
whether, because of the different services now required of Project Manager,
Project Manager is entitled to a different compensation than that provided under
the 1991 Management Agreement. The parties have agreed to settle absolutely and
forever such dispute on the terms set forth in this Agreement, and to resolve
all outstanding obligations owed by them to each other.
AGREEMENT
Therefore, for good and valuable consideration, the receipt and sufficiency
of which is acknowledged, and intending to be legally bound, the parties agree
as follows:
1. TERMINATION. The parties hereby confirm and agree that the 1991
Management Agreement is hereby terminated effective March 31, 1996. This
termination is and shall be effective with respect to each of the parties'
respective rights and obligations under the 1991 Management Agreement, all prior
versions of such agreement, all modifications and amendments thereto, and,
without limitation, those rights and obligations under the 1991 Management
Agreement which by their terms would have otherwise survived termination.
2. FINAL COMPENSATION PAYMENT. RSC shall pay to Project Manager the
following sums (some of which may, as of the date hereof, already have been
paid):
2.1 Twenty-five thousand dollars ($25,000.00) for services rendered
by Project Manager for each of the months of January, February and March 1996.
2.2 Fifty-six thousand, seven hundred dollars ($56,700.00), as the
balance due for services rendered by Project Manager during the year ended
December 31, 1995.
To the extent not already paid, RSC shall pay the foregoing sums to Project
Manager within ten (10) days after the mutual execution and delivery of this
Agreement by both parties.
3. MUTUAL AND GENERAL RELEASE OF ALL CLAIMS. Except as expressly set
forth in this Agreement, and without limiting in any way the rights and
remedies, if any, of any federal or state regulatory agency or other
governmental authority having or purporting to have jurisdiction over RSC or any
of its affiliates (a "Governmental Agency"), the parties agree as follows:
3.1 MUTUAL RELEASE. Each party (for itself and its successors,
assigns, parents, subsidiaries, affiliates, shareholders, directors, officers,
legal representatives, insurers, attorneys and agents) (collectively, the
"Releasing Party"), hereby waives, releases and forever discharges the other
party (and its successors, assigns, parents, subsidiaries, affiliates,
shareholders, directors, officers, legal representatives, insurers, attorneys
and agents) (collectively, the "Released Party"), from any and all actions,
causes of action, claims, demands, damages, obligations and liabilities of every
kind, either at law or in equity, arising out of or in any way related to the
performance or non-performance by the Released Party of its obligations under
the 1991 Management Agreement, including, without limitation, the amount of
compensation due Project Manager thereunder.
3.2 GENERAL RELEASE. The foregoing mutual release is intended to
discharge and acquit all claims coming within its scope, whether or not now
known, unknown, suspected,
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anticipated, liquidated or contingent. In furtherance thereof, each party
hereby waives and relinquishes any rights or benefits which such party has or
may have under section 1542 of the California Civil Code and under any similar
provision of the statutory or nonstatutory law of any jurisdiction to the full
extent that such party may lawfully waive all such rights and benefits
pertaining to the subject matter of this release. Section 1542 of the
California Civil Code provides 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.
Each party acknowledges and agrees that there is a risk that, after this
Agreement is signed, such party may discover facts, claims, defenses or other
matters concerning the 1991 Management Agreement, or the services rendered
thereunder, which are currently unknown and unanticipated and which, if they had
been known, might have affected their decision to enter into this Agreement.
Nevertheless, it is understood that the purpose of this provision is to waive
and release all such matters. EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER
PARTY THAT IT HAS READ THE FOREGOING RELEASE AND WAIVER, HAS CONFERRED WITH
LEGAL COUNSEL OF ITS CHOICE, AND VOLUNTARILY AGREES TO THE TERMS OF SUCH RELEASE
AND WAIVER WITH FULL KNOWLEDGE AND UNDERSTANDING OF ITS LEGAL EFFECT.
3.3 COVENANT NOT TO SUE. Each party further agrees never voluntarily
to commence or prosecute, or cause to be commenced or prosecuted, against the
other party or its heirs, executors, administrators, successors, assigns,
agents, employees, attorneys and insurers, any action or proceeding based
directly or indirectly upon any of the matters contained in the release set
forth in section 3.1 above.
4. GENERAL INDEMNIFICATION. Project Manager shall defend, indemnify and
hold harmless RSC and its directors, officers, partners, employees, agents,
subsidiaries, affiliates, and assignees, or any of them, from and against any
losses, damages, liabilities (including product liability, regardless of the
theory of recovery), expenses (including attorneys' fees and court costs),
costs, claims, suits, demands, actions, causes of action, proceedings,
recoveries, judgments, assessments, deficiencies and charges on account of
physical damage to tangible property and personal injuries (including death)
(collectively, "Losses") arising out of or resulting from the performance of
services by Project Manager pursuant to the 1991 Management Agreement, but
excluding Losses to the extent caused by or resulting from the intentional
action or negligence of RSC or other indemnified party hereunder. It is a
condition precedent to the right to obtain indemnification under this section 0
that the party seeking indemnification (the "Indemnified Party") shall give to
Project Manager prompt written notice of any claim for which indemnification is
sought. The notice shall describe the basis for such claim and shall submit
copies of all pleadings, demands and other materials pertaining thereto and
shall cooperate
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reasonably with Project Manager in the defense of such claim. Provided that the
Project Manager has accepted the tender of defense of a claim from the
Indemnified Party, the Indemnified Party shall not settle, compromise or
otherwise resolve any claim without obtaining the prior written approval of
Project Manager, which shall not be withheld or delayed unreasonably.
5. CONFIDENTIALITY. The terms of this Agreement are confidential. Each
party agrees not to disclose the terms of this Agreement to any person or for
any purpose for a period of three (3) years from the date of this Agreement,
except for such disclosures (a) made by RSC or its affiliates to any
Governmental Agency or as may be required by any law, rule, regulation, order or
directive from any Governmental Agency; (b) as are required by an order of a
court or other adjudicatory body (provided that the party upon whom such order
is imposed shall first have given notice to the other party and allowed the
other party to make a reasonable effort to obtain a protective order or other
confidential treatment for the information); or (c) as are necessary and
appropriate for accounting purposes, financial reporting or otherwise to
consummate the matters contemplated by this Agreement.
6. NO-ADMISSION OF LIABILITY. This Agreement represents the compromise
and settlement of disputed claims. No admission of liability or of the truth or
validity of any claim released by this Agreement is intended or to be implied by
this Agreement.
7. MISCELLANEOUS TERMS.
7.1 INTEGRATION. The provisions of this Agreement constitute the
entire agreement between the parties, and supersede all prior and
contemporaneous agreements, understandings and negotiations, whether written or
oral, with respect to its subject matter.
7.2 BINDING EFFECT. This Agreement shall be binding on and inure to
the benefit of the parties and their respective successors and assigns, but no
party shall have the right to assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other party (which consent
shall not be unreasonably withheld).
7.3 CAPTIONS. The captions and headings used in this Agreement are
provided for convenience only and shall not affect the meaning, interpretation
or construction of any of the provisions of this Agreement.
7.4 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original as against the party whose signature
appears thereon and together which shall constitute but one and the same
document. This Agreement shall become effective when each party has signed and
delivered one or more counterparts of this Agreement to the other party.
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7.5 ATTORNEYS FEES. If either party brings any legal action by any
method other than arbitration against the other with respect to any Dispute
required to be arbitrated under this Agreement, the other party shall be
entitled to recover from such party all damages, costs, expenses and attorneys'
fees incurred as a result of such action. Notwithstanding the foregoing, each
party shall have the right to commence a legal action for injunctive relief in a
court of competent jurisdiction.
7.6 SEVERABILITY. If any provision of this Agreement is declared or
found to be illegal, unenforceable or void, the parties shall negotiate in good
faith to agree upon a substitute provision that is legal and enforceable and is
as nearly as possible consistent with the intentions underlying the original
provision. If the remainder of this Agreement is not materially affected by
such declaration or finding and is capable of substantial performance, then the
remainder shall be enforced to the extent permitted by law. However, if such
illegal, unenforceable or void provision cannot reasonably be modified as
provided above or stricken from this Agreement without material effect on the
Agreement, then this Agreement shall terminate.
7.7 WAIVER. No delay or omission by either party to exercise any
right or power shall impair any such right or power or be construed to be a
waiver thereof. A waiver by any party of any of the covenants, conditions or
contracts to be performed by the other or any breach thereof shall not be
construed to be a waiver of any succeeding breach thereof or of any other
covenant, condition or contract herein contained. No change, waiver or
discharge hereof shall be valid unless in writing and signed by an authorized
representative of the party against which such change, waiver, or discharge is
sought to be enforced.
7.8 CUMULATIVE REMEDIES. The rights and remedies provided in this
Agreement or otherwise under applicable laws shall be cumulative and the
exercise of any particular right or remedy shall not preclude the exercise of
any other rights or remedies in addition to, or as an alternative of, such right
or remedy, except as expressly provided otherwise in this Agreement.
7.9 NO THIRD PARTY BENEFIT. Nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon or give to any person,
firm, or corporation, other than the parties hereto and those other persons or
entities specifically granted rights hereunder, and their respective successors
and assigns, any remedy or claim by reason of this Agreement or any term,
covenant or condition hereof, all of which shall be for the sole and exclusive
benefit of the parties hereto.
7.10 APPLICABLE LAW. This Agreement shall be interpreted, construed
and governed by the laws of the State of California, without giving effect to
its choice of law rules.
7.11 AMENDMENT. No oral statements or agreements or any course of
conduct shall be effective to modify, amend, supplement or otherwise change any
of the terms of this
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Agreement. This Agreement can be modified, amended, supplemented or changed
only by an agreement in writing which makes specific reference to this Agreement
and the provisions thereof being modified, amended, supplemented or changed, and
which is signed by both parties.
IN WITNESS WHEREOF, the parties have caused this Contract Termination
Agreement to be executed and delivered by their respective duly authorized
representatives as of the date set forth beneath their respective signatures
hereto.
"RSC" "PROJECT MANAGER"
REGENCY SERVICE CORPORATION, PEACHWOOD PARK,
a California corporation a California limited partnership
By: ___________________________ By: ___________________________
Steve Hertel Gary L. McDonald
President Managing General Partner
Date: _____________ , 1996 Date: ______________ , 1996
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