1
EXHIBIT 99.(2)
WOODBRIDGE/TERRA VISTA
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is made as of the 18th day
of August, 1994, by and between Terra Vista Management, Inc., a California
corporation, (the "Manager"), and De Anza Properties - X, a California limited
partnership, (the "Owner"), in Los Angeles, California, with reference to the
following facts:
A. Owner owns certain property located in the City of Irvine,
California, known as Woodbridge Meadows Apartments (hereinafter referred to as
the "Property").
B. De Anza Assets, Inc., a California corporation, is the
existing manager of the Property pursuant to a Management Agreement dated
October 1, 1985. De Anza Assets, Inc. is wholly owned by De Anza Group, Inc.,
which is being sold. Accordingly, De Anza Assets has withdrawn as manager,
which withdrawal has been accepted by Owner, and De Anza Assets has been
replaced by Terra Vista Management, Inc. The parties desire to enter into this
Management Agreement to reflect their obligations with respect to the ownership
and operation of the Property.
C. Owner desires that Manager maintain and operate the Property
on its behalf, and Manager desires to undertake said functions.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements set forth herein, the parties agree as follows:
- 1 -
2
1. Engagement. Owner hereby engages Manager as general manager
of the Property to the extent and subject to the conditions set forth herein,
and Manager hereby accepts such engagement.
2. Term and Termination. This Agreement shall continue from year
to year; provided, however, that Owner or Manager may, without penalty or
obligation to the other party to this Agreement, by providing sixty (60) days'
written notice to the other, terminate this Agreement with or without cause at
any time. This Agreement may be immediately canceled in the event of the
violation of any of the provisions hereof, or by Owner in the event a petition
in bankruptcy is filed by or against Manager which is not dismissed within
ninety (90) days following the date of such filing.
3. General Duties of Manager. Manager shall be directly
responsible for the day-to-day management of the Property, subject to such
general guidelines and instructions as the Owner may issue from time to time.
Notwithstanding anything to the contrary contained herein, all final decisions
respecting the management of the Property shall be made by Owner.
Manager shall at all times do and perform all things reasonably
necessary to effectuate the purposes and intentions embodied in this Agreement
so that the Property is operated at all times in a manner consistent with
prudent business practice and in accordance with any and all leases, subleases
and contracts to which the Property is subject, and any and all other laws,
- 2 -
3
statutes, ordinances and regulations of any governmental authority having
jurisdiction over Owner, the Property or Manager.
4. Collection of Rent and Payment of Expenses. Manager shall
collect on behalf of Owner all rents and all other charges of every kind or
type whatsoever from all tenants or other occupants of the Property for
services provided in connection with, or for the use of, the Property or any
portion thereof, and shall deposit the same in depositories specifically
approved by Owner. Out of the foregoing rents and other charges collected on
behalf of Owner, Manager shall pay all expenses related to the operation and
maintenance of the Property and each of its facilities as and when the same
become due, all in accordance with specific instructions provided by Owner.
Manager may, with Owner's prior approval, and, when so requested by
Owner, shall, at Owner's expense, institute legal actions or proceedings to
collect charges, rent or other income or compensation due to Owner with respect
to the Property, or to oust persons unlawfully in possession of any portion of
the same. All such actions or proceedings and any related counterclaim,
crossclaims or other proceedings shall be at Owner's expense and may be brought
in the name of Owner or Manager.
5. Employees. Manager shall have the exclusive right to
discharge, supervise and fix the pay of such personnel as are necessary for the
efficient maintenance and operation of the Property. However, such personnel
shall be employed and paid by and shall be bonded to the satisfaction of Owner.
- 3 -
4
6. Repair and Maintenance of Property. Manager, at Owner's
expense, shall make or attend to the making of ordinary and emergency repairs,
maintenance, decorations and alterations at the Property.
7. Taxes and Insurance. Owner shall pay all taxes, personal and
real, and assessments that are attributable to the Property. Manager shall
obtain and keep in force, at Owner's expense, such fire, comprehensive,
liability and other insurance policies as are generally carried with respect to
similar facilities in amounts sufficient to protect and maintain the Property
and Owner's interest therein in a form, manner and amount, and with companies
satisfactory to Owner. Owner and Manager shall be named as insured parties in
all liability insurance policies relating to the Property.
8. Accounting. Manager shall keep a detailed and complete set of
books and records of all the income and disbursements of the Property in
accordance with good accounting practices and Manager shall, on a monthly
basis, render to Owner each of the following:
(a) A report on all vacancies;
(b) A schedule showing all income received and
disbursements made during the preceding month, together with the balance on
hand, if any, at the end of said month; and
(c) A schedule describing the monthly and annual budget
for the Property, together with the amount expended in each category in the
preceding month and for the year to date.
- 4 -
5
9. Books and Records. Manager shall keep adequate books and
records in connection with all matters arising under the terms of this
Agreement. During regular business hours, Manager shall allow Owner or any of
its duly authorized representatives access to Manager's records and
correspondence pertaining to any transaction arising out of this Agreement. At
the close of each fiscal year of Owner, Manager shall allow the books and
records which are the subject of this paragraph to be examined and audited by a
certified public accountant selected by Owner. In the event of the termination
of this Agreement, Manager shall turn over to Owner all records and
correspondence as may be reasonably necessary to assist Owner to carry to
completion any lease or other transaction and all contracts, records and
documents directly pertaining to the Property.
10. Compensation. Owner shall pay to Manager as compensation for
its services under this Agreement a sum equivalent to 5% of the aggregate gross
receipts from the operation of the Property (excluding all receipts from
utilities or from taxes of any kind or type). The foregoing compensation shall
be payable at the beginning of each monthly accounting period and shall be
calculated on the basis of the budgeted gross receipts (as determined by Owner)
from the operation of the Property during that period. The total amount of
compensation earned by Manager hereunder shall, as soon as possible after the
end of each calendar year during the term of this Agreement, be calculated on
the basis of the actual gross receipts from the operation of the Property
during that year, and any additional compensation that is
- 5 -
6
due to Manager (because the actual gross receipts exceeded the budgeted gross
receipts) shall be paid to it by Owner at that time. Conversely, if Manager
collected more compensation than it was entitled to receive during any such
year (because the actual gross receipts were less than the budgeted gross
receipts), Manager shall return the excess compensation to Owner (without
interest thereon); provided, however, that such compensation shall be
subordinated to the receipt (on a noncumulative basis) by the limited partners
of Owner of an annual cash distribution equal to 6% of the aggregate capital
contributions of such limited partners.
The foregoing compensation shall be payment for Manager's conduct and
supervision of the ordinary and routine operation of the Property and is not
intended to compensate Manager for any other activities it may undertake with
respect to any operation of the Property which would not be considered ordinary
and routine when compared to the services provided by professional real
property management companies for other real properties that are comparable in
size, location and nature to the Property. In the event the nature of the
Property or the business conducted thereon changes, the compensation to be paid
to Manager hereunder will be altered in a manner which is mutually agreeable to
it and Owner, but in no event shall the amount of such compensation exceed the
amount that would be charged by nonaffiliated entities rendering comparable
services which could reasonably be made available to Owner.
- 6 -
7
11. Indemnification. Owner shall indemnify, defend and hold
Manager harmless from any damages, costs, expenses or obligations incurred by
Manager as a result of any actions or omissions of Manager within the scope of
its authority as provided in this Agreement, or as a result of any other
actions or obligations as Owner may specifically authorize Manager to perform,
provided performance of such acts by Manager does not constitute fraud, bad
faith or willful misconduct.
12. Miscellaneous. To the extent possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law. However, if any provision hereof shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, and shall in
no way affect the validity of the remainder of such provision, or of any of the
remaining provisions of this Agreement.
This Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of California.
This Agreement and the rights of Owner and Manager hereunder shall not
be assignable by either of them. Manager may, however, subcontract the
performance of all or part of its duties under this Agreement to one or more
subsidiaries or affiliates of Manager or to one or more affiliated companies or
unaffiliated companies suitable to owner, but it shall remain responsible for
such performance. The right of Manager to receive compensation
- 7 -
8
may be assigned, pledged or hypothecated at anytime without Owner's consent.
This Agreement contains the entire agreement of Owner and Manager with
respect to the subject matter hereof and may not be changed except by an
instrument executed by both of them.
IN WITNESS WHEREOF, the parties hereto have executed this Management
Agreement as of the date first above written.
OWNER: DE ANZA PROPERTIES - X
a California limited partnership
By De Anza Corporation,
Partner
By: Herbert M. Gelfand
---------------------------
Herbert M. Gelfand
Chairman of the Board
MANAGER: TERRA VISTA MANAGEMENT, INC.
a California corporation
By: Michael D. Gelfand
---------------------------
Michael D. Gelfand
President
- 8 -
9
CONSENT
De Anza Assets, Inc., a California corporation, ("Assets") is the
Manager of Woodbridge Meadows Apartments pursuant to that certain Management
Agreement, dated as of October 1, 1985, by and between De Anza Properties - X,
a California limited partnership, as owner, (the "Partnership") and Assets.
Assets desires to withdraw as Manager and the Partnership desires to accept
such withdrawal and to replace Assets with Terra Vista Management, Inc.
The Partnership and Assets hereby consent to the withdrawal of Assets from the
Management Agreement and the replacement of Assets with Terra Vista Management,
Inc.
Dated: August 18,1994
De Anza Properties-X, De Anza Assets, Inc.,
a California limited partnership a California corporation
By: De Anza Corporation,
a California corporation By: Barry McCabe
-----------------------------
Its:
----------------------------
By: Michael D. Gelfand
----------------------------
Its: President
---------------------------