JOINT VENTURE AGREEMENT
OF
PARKSIDE HOMES
THIS JOINT VENTURE AGREEMENT ("Agreement') is made and entered into as
of February __, 1994, by and between TRANSEASTERN PEMBROKE PROPERTIES, INC., a
Florida corporation ("Transeastern") and ▇.▇. ▇▇▇▇▇▇ OF PEMBROKE PINES, INC., a
Florida corporation ("▇▇▇▇▇▇"). Transeastern and ▇▇▇▇▇▇ are sometimes
hereinafter referred to individually as "Venturer" and collectively as
"Venturers."
WITNESSETH
WHEREAS, the Venturers have heretofore determined that they desire to
participate together in a joint venture (the "Venture") formed under the general
partnership law of the State of Florida for the acquisition of certain real
property located in Broward County, Florida, as more fully described on Exhibit
"A" attached hereto, and to construct thereon single family residences for sale
to the public (such real property and the improvements to be constructed thereon
being hereafter referred to as the "Project"); and
WHEREAS, the Venturers wish to reduce their agreements regarding the
acquisition and development of the Project to a written instrument.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein, the parties hereby agree as follows:
ARTICLE ONE
INCORPORATION BY REFERENCE AND DEFINITIONS
1.1 INCORPORATION BY REFERENCE. The foregoing recitals are hereby
acknowledged to be true and are incorporated herein by reference, and all
Exhibits annexed hereto and referred to herein are incorporated herein by
reference.
1.2 CERTAIN DEFINITIONS. The terms set forth on Exhibit "B" attached
hereto shall have the meanings set forth in such Exhibit "B".
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ARTICLE TWO
FORMATION NAME, PRINCIPAL OFFICE AND PURPOSE
2.1 FORMATION. The Venturers hereby form a joint venture partnership
pursuant to the laws of the State of Florida, for the purposes set forth herein.
2.2 NAME. The name of the Venture shall be "Parkside Homes" and the
business and affairs of the Venture initially shall be conducted under said
name. The Venture may conduct business under such other name or fictitious name
as may be determined, from time to time, by the Venturers. The Venturers shall
execute all assumed or fictitious name certificates necessary or appropriate to
be filed in the applicable records of any county or jurisdiction in which the
Venture is doing business.
2.3 PRINCIPAL OFFICE AND PLACE OF BUSINESS. The principal office of the
Venture shall be located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or
at such other location in the State of Florida as may be determined by the
Venturers.
2.4 PURPOSE AND SCOPE OF THE VENTURE. (a) The business, purpose
and scope of the Venture is to acquire the Property and to own, develop,
improve, maintain, manage, operate, sell, lease, mortgage, exchange and
otherwise use all or any portion of the Project for the production of income and
profit, and to engage in all manner of transactions and activities incidental to
the foregoing.
(b) The Venturers have approved a Business Plan providing for
construction and marketing of the Project as a residential community to be known
as "Meadow Run at Spring Valley", which Business Plan incorporates the following
components:
(i) A development plan reflecting a division of the
Property into two Phases, each of which is intended to improved
and marketed by the Venture at a particular time (each such
phase, as ultimately set forth in the Business Plan being
referred to as a "Phase"), including the specific number of lots
in each Phase, the houses to be built in each Phase, the time
frame for the planned acquisition of the Phase, construction of
houses and marketing of each Phase;
(ii) A marketing plan setting forth, with respect to
each Phase, the number and type of homes to be constructed in
such Phase, the projected prices therefor and the advertising
and marketing programs which the Venture plans for such Phase;
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(iii) A budget setting forth, in general categories, the
expenses anticipated to be incurred by the Venture with respect
to each Phase through the sale thereof and the projected
revenues to be derived from each Phase upon its disposition
(which budget, as approved by the Venturers, from time to time,
shall be hereinafter referred to as the "Budget"), and (iv) A
cash flow analysis setting forth, in the sequence in which the
Phases will be developed, improved and marketed, as applicable,
the sources and uses of funds that will be available to and
expended by the Venture in connection therewith (which cash flow
analysis, approved by the Venturers, from time to time, shall be
hereinafter referred to as the "Cash Flow Analysis"). (c) The
business of the Venture shall be as set forth herein and in the
Business Plan. The Venture shall not engage in any other
business or activity, except as the Venturers shall otherwise
agree in writing. Except as expressly provided to the contrary
in this Agreement, nothing herein shall be deemed to restrict in
any way the freedom of a Venturer to conduct any other business
or activity whatsoever without any accountability to the Venture
or the other Venturer.
2.5 TERM. The term of the Venture as a general partnership shall
commence as of the date of this Agreement and shall continue in full force and
effect until terminated in accordance with Article Eight of this Agreement or as
otherwise provided by the Law.
2.5 TITLE. Legal title to the Venture's property shall be held in the
name of the Venture, or in such other manner as the Venturers shall determine.
2.7 DESIGNATED PERSONS. For purposes of facilitating the performance of
the terms and provisions of this Agreement and the operation of the Venture,
each Venturer designates the person(s) set forth below opposite such Venturer's
name ("Designated Person") as such Venturer's attorney-in-fact to take all
actions, make all decisions on its behalf which such Venturer, in its capacity
as Venturer, is permitted or required to take or make, and to execute promissory
notes, mortgages or other collateral documents, agreements to purchase real
property and agreements to sell Lots within the Project as a group. Either
Venturer may change its Designated Person by delivering to the other Venturer
and to the Venture, written notice thereof, which notice shall be a certified
corporate resolution of the Venturer's Board of Directors. The foregoing shall
not be construed to preclude other duly authorized persons from acting on any
Venturer's behalf. The Designated Persons, as of the date hereof, are as
follows:
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VENTURER DESIGNATED PERSON
Transeastern ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(b) In addition to the foregoing, each of the Venturers designate
the persons listed on Exhibit "C" as their authorized representatives for the
execution of deeds, affidavits, bills of sale, closing statements and other
documents solely related to the closing of sales of single family homes within
the Project to customers. Such persons have no further authority by virtue of
this Paragraph to execute documents of any kind or nature on behalf of the
Venture. The Venturers may hereafter adopt resolutions granting further
authority to such persons or to other persons to execute various documents on
behalf of the Venture.
ARTICLE THREE
CAPITAL CONTRIBUTIONS; FINANCING
3.1 INITIAL CAPITAL CONTRIBUTIONS. Simultaneously with the execution
hereof, each Venturer shall make the following Capital Contributions to the
Venture and shall receive a credit to their respective Capital Accounts
therefor:
Transeastern $400,000.00
▇▇▇▇▇▇ $400,000.00
3.2 ADDITIONAL CAPITAL. If and when, from time to time after the date
hereof, the Venturers agree that the Venture is in need of additional capital in
order to meet Venture obligations relating to the performance of the Venture
business, such additional cash shall be contributed to the Venture equally by
the Venturers as a Capital Contribution, for which each Venturer shall receive a
credit, in the amount thereof, to its Capital Account.
3.3 FINANCING FROM THIRD PARTIES. The cash contributed as Capital
Contributions to the Venture will not be sufficient to carry out the business of
the Venture. Accordingly, the Venturers contemplate that additional funds will
be made available to the Venture pursuant to third party financing from an
institutional lender or similar source. The responsibility for obtaining such
required financing for the Venture shall rest equally with the Venturers. Such
financing shall comply with the following parameters:
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(a) Separate Acquisition Loans for the purchase of the first and
second Phases of the Project on the following terms:
(i) Principal amounts of at least $5,700,000.00;
(ii) A term of at least two years each, with two
renewal options of two years each;
(iii) Interest rates not to exceed prime rate plus
1.0% per annum;
(iv) Secured by mortgages on the Project, permitting
the partial release of individual lots, together
with other collateral documents standard to
loans of similar type and size;
(v) Personal guaranties of payment by the parties
listed on Exhibit "D" hereto.
(b) Revolving construction lines of credit for use in both Phases
of the Project on the following terms:
(i) Principal amounts of at least $6,000,000.00;
(ii) A term of at least four years;
(iii) Interest rate not to exceed prime rate plus 1.0%
per annum;
(iv) Secured by mortgages on the Project, permitting
the partial release of individual lots, together
with other collateral documents standard to
loans of similar type and size, and providing an
acceptable procedure for the funding of
construction of individual houses;
(v) Personal guaranties of payment by the parties
listed on Exhibit "D" hereto.
3.4 LOANS FROM VENTURERS. If the financing provided by an Approved
Mortgage is insufficient to provide, together with other available funds of the
Venture, sufficient cash to satisfy Venture obligations with respect to the
construction and marketing of the Project, the Venturers may provide loans to
the Venture to fund such deficiencies, which loans shall be made in accordance
with the provisions hereof and shall be repaid as provided in Section 5.3(a)
hereof. Loans by any Venturer to the Venture shall not be considered Capital
Contributions. If not expressly agreed in writing otherwise, loans to the
Venture from a Venturer shall accrue interest at the rate of ten percent (10%)
per annum, and shall be otherwise be payable on terms to be agreed upon by the
Venturers. Nothing herein shall authorize any loan by a Venturer to
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the Venture unless otherwise authorized pursuant to other provisions of this
Agreement or unless agreed to in writing by the Venturers.
3.5 OTHER MATTERS RELATING TO CAPITAL. (a) Except as may be expressly
provided herein, no Venturer shall be entitled to withdraw or to the return of
any part of the Capital Contribution of such Venturer or to receive property or
assets other than cash from the Venture for any reason whatsoever. To the extent
that any distributions which any Venturer is entitled to receive pursuant to
Article Five hereof would constitute a return of capital, each of the Venturers
consent to the withdrawal of such capital.
(b) No Venturer shall be entitled to priority over any other
Venturer with respect to return of its Capital Contribution, except to the
extent expressly provided in this Agreement.
(c) No interest shall be paid by the Venture on Capital
Contributions, except to the extent expressly provided in this Agreement.
ARTICLE FOUR
MANAGEMENT OF THE VENTURE
4.1 MAJOR DECISIONS. No decision shall be made with respect to any of
the major decisions enumerated below ("Major Decisions") unless and until same
has been approved in writing by all Venturers. The Major Decisions are:
(a) The sale, exchange or other disposition of all, or
substantially all, of the property and assets of the
Venture, other than the sale of individual lots and
houses to be constructed thereon within the Project;
(b) Any material modification to the approved Business Plan
including, without limitation, any material modification
to the Budget or Cash Flow Analysis and any other
component thereof;
(c) Modifications to the layout or facade of houses,
adjustments to lot sizes, adjustments to selling prices
and incurring of expenditures not contemplated by the
Budget but which do result in increasing the Budget by
more than ten percent (10%) shall not be deemed material
modifications;
(d) A decision by the Venture to enter into an Approved
Mortgage or any other financing arrangements, whether or
not secured by any portion of
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the Property and whether or not with or without recourse
to the assets of the Venture, including routine
equipment leases or other installment obligations that
are substantially consistent with the Business Plan,
including the Budget and Cash Flow Analysis;
(e) A decision to admit any additional person into the
Venture as a Venturer or, except pursuant to Section
7.4, approval of any transfer of all or any part of a
Venturer's Venture Interest;
(f) A decision by the Venture to acquire any real property
other than the Property;
(g) A decision to dissolve the Venture;
(h) Any transaction, not expressly authorized herein,
between the Venture and a Venturer or any Affiliate of a
Venturer;
(i) A decision to enter into a joint venture or similar
arrangement with third parties for the purpose of
developing any portion of the Property or for any other
purpose;
(j) A decision to expand or restrict the authority of the
Project Manager Venturer to act with respect to any
matter concerning the Venture; and
(k) Such other decisions as, pursuant to the terms hereof,
are vested in the Venturers. For purposes of the
foregoing, any reference in this Agreement to an act,
approval, consent or other event occurring "by the
Venturers," "from the Venturers," "in the Venturers" or
"of the Venturers" shall mean by unanimous consent of
the Venturers. All power and authority of the Venture
not expressly delegated herein to the Managing Venturer
shall be vested in the Venturers.
4.2 PROJECT MANAGER. The Venturers shall select an individual to be in
charge of the day-to-day activities of the Venture in the construction and
marketing of the Project ( the "Project Manager"). The Project Manager shall
have the following responsibilities and all authority necessary to the
performance of such responsibilities: (a) Preparing and delivering monthly
reports to the Venturers as required pursuant to Article Six hereof and as shall
otherwise be necessary or helpful in keeping the Venturers fully informed as to
Venture affairs;
(b) Negotiating and entering into contracts with
sub-contractors and materialmen with respect to
construction and other activities of the Venture and
supervising the performance of same;
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(c) Arrange for appropriate insurance policies with such
coverage and in such amounts as prudent to protect the
Venture;
(d) To retain and/or hire on staff services of engineers,
surveyors, appraisers, architects, real estate brokers,
mortgage brokers, escrow agents, depositaries,
custodians, agents for collection, insurers, insurance
agents, advertising personnel and such other technical
or administrative advisors as reasonably deemed useful
by the Project Manager to further the purposes of the
Venture;
(e) Expending the capital and revenues of the Venture
substantially consistent with the Business Plan;
(f) Such other matters and obligations provided elsewhere in
this Agreement to be performed by the Project Manager or
as may be delegated, from time to time, by the
Venturers;
(g) Keeping all books of accounts and other records required
by the Venture, including vouchers, statements,
receipted bills, invoices and all other records needed
or helpful to documenting all collections, disbursements
and other data in connection with the activities of the
Venture;
(h) Supervising land development and construction with
respect to each Phase in substantial accordance with the
Business Plan;
(i) Authorizing parties to prepare research reports,
economic and statistical data, evaluations, analyses,
opinions and recommendations as may be necessary or
desirable with respect to preparing or implementing the
Business Plan;
(j) Doing any and all other things which are necessary,
incidental or required in giving effect to all of the
foregoing duties and responsibilities and, in general,
as required to carry out the day-to-day operations of
the Venture; and
(k) Approving minor adjustments to selling prices and
concessions in connection with the sale of houses to
customers in an amount not to exceed $500.00 per house..
4.3 VENTURE MEETINGS. Either Venturer may, at any time, deliver notice
to the other Venturer setting a meeting of the Venture to be held at the
principal office of the Venture on a business day that is not less than ten
(10), nor more than thirty (30) days after delivery of the
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notice. The annual meeting of the Venture shall take place at the principal
office of the Venture on a date which shall be within ten (10) days after
receipt of the periodic reports to be delivered to by the Venture Accountants
pursuant to Section 6.3 hereof
4.4 LIABILITY AND INDEMNIFICATION. No Venturer nor any of its officers,
shareholders, directors, employees or agents shall be liable to the Venture or
any Venturer for any loss or liability incurred in connection with any act or
omission in the conduct of the business of the Venture in accordance with the
terms hereof, except for any loss or liability which the Venture or Venturer
incurs in connection with such person's or entity's fraud, willful and wanton
misconduct or gross negligence. The Venture, to the fullest extent permitted by
law, hereby agrees to defend and indemnifies and holds harmless each Venturer
and its officers, directors, shareholders, employees and agents from and against
any and all liability, loss, cost, expense or damage incurred or sustained by
reason of any act or omission in the conduct of the business of the Venture in
accordance with the terms hereof including, but not limited to, reasonable
attorneys' and paralegals' fees through any and all negotiations, and trial and
appellate levels; provided, however, the Venture shall not indemnify such person
or entity or hold it harmless with respect to any of the foregoing incurred in
connection with such person's or entity's fraud, willful and wanton misconduct
or gross negligence. Notwithstanding the foregoing, the Venture shall advance,
on behalf of any Venturer against whom a claim is filed with respect to any
alleged act or omission in the conduct of the business of the Venture, all costs
and expenses of litigation, including reasonable attorneys' and paralegals' fees
through any and all negotiations, at trial and appellate levels, and will be
entitled to seek reimbursement from the Venturer for such sums advanced only to
the extent such Venturer is ultimately determined, by a final non-appealable
order or judgment, to have been guilty of fraud, willful or wanton misconduct or
gross negligence and only to the extent the Venture is not reimbursed by any
insurance policies with respect to such costs and expenses. The provisions of
this Section 4.5 shall survive termination of this Agreement.
4.6 COMPETITION. Each Venturer may have other business interests and may
engage in any other business or trade, individually, in partnership or
association with others or in any capacity whatsoever, whether or not such
business competes with the Venture. No Venturer shall be required to devote its
entire time or attention to the business of the Venture or, in any event, more
time or attention than shall reasonably be required to carry out its obligations
under this Agreement. Provided, however, that neither Venturer, nor any
corporation owned or controlled by the parties listed on Exhibits "E" and "F"
hereto shall be
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involved in the construction of "zero lot-line" single family homes in any
community located within a three mile radius of the sewer lift station located
in the Project until such time as contracts have been signed for at least 85% of
the homes to be constructed in the Project. This limitation shall not apply to
any community wherein either Venturer or any related entity is presently
constructing homes of any type.
ARTICLE FIVE
ALLOCATIONS AND DISTRIBUTIONS
5.1 ALLOCATIONS FROM OPERATIONS AND FROM CAPITAL TRANSACTIONS. Except as
provided below, the Adjusted Net Income or Adjusted Net Loss of the Venture from
operations and any income (including gain) or losses resulting from any Interim
or Terminating Capital Transactions as calculated for federal income tax
purposes and reported by the Venture on its U.S. Partnership Return of Income
for each fiscal year (or portion thereof) during the term of this Agreement,
shall be allocated to the Venturers pro rata in accordance with their respective
Venture Percentages.
5.2 DISTRIBUTION OF AVAILABLE CASH. Periodically, but not less
frequently than quarterly, the Available Cash of the Venture, if any, shall be
distributed to the Venturers in accordance with the provisions of this Section
5.2. Available Cash will be distributed to the Venturers as follows and in the
following order of priority:
(a) First: To the Venturers in repayment of the principal
amounts and accrued interest owing to the Venturers in
respect of any loans made by the Venturers to the
Venture. Amounts so distributed shall be applied first
to accrued interest and then to principal.
(b) Second: To the Venturers, PRO RATA, in accordance with
their then respective Unreturned Capital Contributions.
(c) Third: To the Venturers, PRO RATA, in accordance with
their then respective Venture Percentages.
5.3 DISTRIBUTION FOLLOWING TERMINATING CAPITAL TRANSACTIONS.
Distributions following a Terminating Capital Transaction shall be distributed
in the manner set forth in Section 8.2.
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5.4 DISTRIBUTION IN CASH ONLY. Except as the Venturers may otherwise
agree, no Venturer in his capacity as a Venturer shall have the right to demand
or receive property other than cash (as and when provided herein) from the
Venture for any reason whatsoever and no Venturer shall have the right to ▇▇▇
for partition of the Venture or for the Venture's assets.
ARTICLE SIX
FISCAL MATTERS
6.1 ACCOUNTING YEAR. The fiscal year of the Venture for accounting
purposes ("Accounting Year") and for income tax purposes shall end on December
31.
6.2 BOOKS AND RECORDS. The Venture shall retain two sets of accountants.
The first group of accountants ("Basic Accountants") shall keep, or cause to be
kept, full and accurate books and records of all transactions of the Venture on
the accrual method of accounting. The Basic Accountants shall be responsible for
the routine day-to-day accounting functions of the Venture and the preparation
of periodic reports, excepting the annual audit to be performed for the Venture.
The second group of accountants ("Audit Accountants") shall be responsible for
the preparation of the annual audited financial statements of the Venture. All
organizational records of the Venture and other records required to be kept by
the Venture under the Law shall, at all times, be maintained at the Venture's
record-keeping office referred to in Section 2.3 hereof, and shall be open
during ordinary business hours for inspection and copying upon the reasonable
request and at the expense of any Venturer and its authorized representatives.
6.3 REPORTS AND STATEMENTS.
(a) ANNUAL REPORTS. Within sixty (60) days after the end of each
Accounting Year, the Basic Accountants shall, at the expense of the Venture,
cause to be delivered to the Venturers a balance sheet of the Venture as of the
end of such Accounting Year and a profit and loss statement for such Accounting
Year. Such financial statements shall be prepared on a federal income tax basis,
and shall be accompanied by such other information as may be reasonably
necessary for the Venturers to be advised of the financial status and results of
operations of the Venture.
In addition, within ninety (90) days after the end of each Accounting
Year, the Audit Accountants shall, at the expense of the Venture, cause to be
delivered to the Venturers audited financial statements of the Venture prepared
by the Audit Accountants, which financial
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statements shall include a balance sheet of the Venture as of the and of such
Accounting Year, a profit and loss statement for such Accounting Year and a
sources and uses of cash statement for such Accounting Year.
(b) QUARTERLY REPORTS. Within twenty (20) days after the end of
each quarter of an Accounting Year, the Project Manager shall, at the expense of
the Venture, cause to be delivered to the Venturers a quarterly status report
setting forth the following:
(i) An unaudited financial statement of the Venture
for the preceding quarter including an income
statement, balance sheet as of the last day of
the quarter and a statement as to the sources
and uses of Venture cash;
(ii) A comparison of the quarterly financial
statement with the Budget and Cash Flow Analysis
portions of the Business Plan applicable to the
transactions reflected in the quarterly
financial statement;
(iii) A narrative description of the Venture's
operations during the preceding quarter and its
financial condition and status at the end of the
quarter;
(iv) A description of any material default by the
Venture in any of its contractual obligations or
indebtedness and a description of any material
default by a party contractually obligated to
the Venture, and the intended action of the
Venture with respect to any such default; and
(v) Any other matters which are necessary or helpful
to enabling the Venturers to be fully apprised
as to all material matters relating to the
Venture.
6.4 TAX RETURNS. The Venture Accountants shall prepare or cause to be
prepared, all tax returns and statements, if any, that must be filed on behalf
of the Venture with any taxing authority and shall make or cause to be made the
timely filing thereof. The tax returns shall be prepared and distributed to the
Venturers for approval within a reasonable time after the end of each Accounting
Year.
6.5 TAX ELECTIONS. The Venturers shall determine, from time to time,
whether or not to make or attempt to revoke any and all tax elections regarding
depreciation methods and recovery periods, capitalization of construction period
expenses, amortization of organizational and start-up expenditures, basis
adjustments upon admission or retirement of Venturers, and any other federal,
state or local income tax elections.
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6.6 BANK ACCOUNTS. The Venturers may authorize the establishment of
Venture accounts for the Venture at banks, savings and loan associations or
other financial institutions ("Accounts") selected by the Venturers. The initial
parties who shall be authorized signatories for such accounts are set forth on
Exhibit "G" attached hereto. No funds of the Venture shall be co-mingled with
funds of any Venturer or any other individual or entity.
ARTICLE SEVEN
TRANSFER OF VENTURE INTEREST
7.1 GENERAL PROHIBITION. Except as expressly provided herein and except
with the prior written consent of all the Venturers, no Venturer shall sell,
transfer, assign, syndicate, pledge, encumber or otherwise dispose of, either
voluntarily, involuntarily, by operation of law or otherwise ("Transfer") all or
any part of its Venture Interest unless made pursuant to and in compliance with
this Article Seven and unless a copy of an executed and acknowledged assignment
effecting such Transfer has been filed with the Venture. A transaction which
results in any Person other than the parties listed on Exhibit "E" hereto
owning, directly or indirectly, a controlling portion of the outstanding capital
stock of Transeastern shall constitute a Transfer of Transeastern's Venture
Interest . A transaction which results in any Person other than the parties
listed on Exhibit "F" hereto owning, directly or indirectly, a controlling
portion of the outstanding capital stock of ▇▇▇▇▇▇ shall constitute a Transfer
of ▇▇▇▇▇▇'▇ Venture Interest. Any purported Transfer of a Venture Interest in
violation of the provisions of this Agreement shall be violation hereof, and
shall be null, void and of no force and effect. Provided, however, that the
foregoing prohibition shall not operate to prevent any of the parties listed on
Exhibits "E" and "F" from transferring all or any portion of the stock in
Transeastern or ▇▇▇▇▇▇ owned by such person to any member of such person's
immediate family or to any trust, corporation or other entity controlled by such
person.
7.2 RIGHTS OF ASSIGNEE. Any Transfer of a Venture Interest (or any part
thereof) to a Person ("Assignee") who is not admitted to the Venture as a
Venturer shall vest in such Person only the rights of an assignee, and shall not
entitle the Assignee to be admitted to the Venture as a Venturer. An Assignee
who has not been admitted to the Venture as a Venturer shall only have the right
to receive the share of profits, losses, tax credits and distributions of the
Venture to which the assigning Venturer would have been entitled with respect to
the Venture Interest (or a portion thereof) so assigned and shall have no right
to require any information or
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accounting of the Venture's transactions or finances or to inspect Venture
books, or to exercise any powers or other rights including voting and consent
rights, incidental to ownership of a Venture Interest. Admission of an Assignee
to the Venture as a Venturer in the manner hereinafter provided shall vest in
such person all rights and powers, and subject such person to all duties and all
obligations thereafter arising, of a Venturer.
7.3 ADMISSION OF VENTURERS. A Venturer may Transfer all or any part of
its Venture Interest to an Assignee to be admitted to the Venture as a Venturer
if all of the following conditions are met:
(a) All other Venturers consent in writing to the Transfer and
the admission of the Assignee as a Venturer, which consent may be withheld at
the non-transferring Venturer's sole discretion, it being agreed that the
parties hereto have entered into this Agreement in reliance upon the special
expertise, experience, financial strength, reputation and personal integrity of
the principals of each of the Venturers;
(b) The Assignee agrees in writing to be bound by the provisions of this
Agreement;
(c) The Assignee executes any and all documents, including an amendment
to this Agreement, required to effectuate or evidence its admission to the
Venture;
(d) The Venture has received an opinion of counsel to the effect that
the contemplated Transfer and admission of the Assignee as a Venturer will not
cause the termination of the Venture for federal income tax purposes or cause
the Venture not to be treated as a partnership for federal income tax purposes
or cause any other materially adverse impact to the Venture or any Venturer;
(e) The Assignee reimburses the Venture for all reasonable costs and
expenses (including reasonable attorney's fees) incurred in connection with the
Transfer and admission;
(f) The Assignee shall have delivered to the Venture, in writing, the
consent or waiver of the applicable parties to any note, mortgage, loan
agreement, contract or similar instrument or document to which the Venture is a
party and as to which the proposed Transfer may be a violation, event of default
under, or give rise to a right of acceleration; and
(g) The Assignee is not a minor or legal incompetent.
7.4 BLIND OPTION. (a) Without regard to any restrictions contained in
this Agreement or any other agreements between the Venture and third parties,
the Venturers shall each have the right (the Venturer exercising such right as
hereinafter set forth being referred to as the "Offeror") to purchase all, but
not less than all, of the Venture Interest of the other
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Venturer (the "Offeree") at any time that is at least eighteen (18) months after
the date hereof by delivering written notice of its election to do so (the
"Triggering Notice") setting forth (i) its offer to purchase the Offeree's
Venture Interest, (ii) the value at which the Offeror values the Venture's
assets after the assumed satisfaction of all Venture obligations so such assets
are free and clear of all liabilities (the "Assumed Net Asset Value"), (iii) the
amount ("Offeree Payment") that would be distributed to the Offeree as a final
distribution if all assets of the Venture were sold on the Purchase Date, such
sale resulted in proceeds to the Venture equal to the Assumed Net Asset Value,
and the proceeds were distributed among the Venturers in liquidation without any
reserve, in accordance with the provisions of this Agreement, (iv) a closing
date for the purchase (the "Purchase Date"), which shall be no later than one
hundred fifty (150) days, and no less than one hundred twenty (120) days after
the date of the Triggering Notice, (v) the amount ("Offeror Payment") that would
be paid to the Offeror as the final distribution the Offeror would receive in
such a liquidation, and (vi) the calculations made by the Offeror in concluding
that proceeds equal to the Assumed Net Asset Value would result in an Offeree
Payment and an Offeror Payment in the amounts set forth.
The Triggering Notice shall be accompanied by a copy of a check made
payable to a title company, bank or law firm willing to act as escrow agent, in
its capacity as such (the "Escrow Agent"), in an amount equal to five percent
(5.0%) of the Offeree Payment, the original of which was delivered by the
Offeror to the Escrow Agent as a down payment on the proposed purchase by the
Offeror (the "Offeror's Deposit"), and an escrow agreement executed by the
Offeror and the Escrow Agent pursuant to which the Escrow Agent acknowledges
receipt of the Offeror's Deposit and agrees to hold and apply same in accordance
with the provisions hereof.
(b) If the Offeree disputes the calculations made to arrive at
either the Offeror Payment or Offeree Payment set forth in the Triggering Notice
(no disputes may be based upon the Assumed Net Asset Value), the Offeree may,
within five days after delivery of the Triggering Notice, submit the dispute to
the Venture Accountants and, within ten days, the Venture Accountants shall make
a determination as to the dispute, all parties shall be bound thereby, and the
Offeror Payment and Offeree Payment shall thereafter be the amount established
by the Venture Accountants, if different than the amounts established by the
Offeror. The Offeree shall have the right, exercisable by delivery of written
notice to the Offeror not more than ninety (90) days after receipt of the
Triggering Notice (the "Election Notice") to elect to either (1) sell such
Offeree's Venture Interest to the Offeror for a price equal to the Offeree
Payment, or (2) purchase the Venture Interest of the Offeror for a cash purchase
price equal to the Offeror Payment.
15
If the Offeree elects to purchase the Venture Interest of the Offeror,
then the Offeree shall, concurrent with the delivery of the Election Notice,
deliver a check payable to the Escrow Agent in an amount equal to five percent
(5.0%) of the Offeror Payment, as a down payment on the purchase by the Offeree
(the "Offeree's Deposit") and an agreement executed by the Offeree authorizing
the Escrow Agent to hold and apply the Offeree's Deposit pursuant to the
provisions hereof. The Offeree shall also authorize the Escrow Agent to return
the Offeror's Deposit, plus any interest accrued thereon, to the Offeror. In the
event the Offeree does not deliver an election Notice within ninety (90) days
after delivery of the Triggering Notice, the Offeree shall be deemed to have
accepted the offer by the Offeror to purchase the Offeree's Venture Interest in
return for the Offeree Payment.
(c) On the Purchase Date, the Offeree, unless it has delivered a
timely Election Notice and otherwise complied with the provisions of the
preceding paragraph, shall sell, and the Offeror shall purchase, the Venture
Interest of the Offeree for the Offeree Payment by directing the Escrow Agent to
deliver the Offeror's Deposit to the Offeree (including any interest accrued
thereon) and delivering the balance of the Offeror Payment to the Offeree by
cashier's check, federal funds wire or law firm trust account check. If the
Offeree has duly delivered an Election Notice and otherwise complied with the
provisions of the preceding paragraph, then, on the Purchase Date, the Offeree
shall purchase the Venture Interest of the Offeror and the Offeror shall sell
its Venture Interest to the Offeree for the Offeror Payment which shall be made
by the Offeree directing the Escrow Agent to disburse the Offeree's Deposit
(including any interest accrued thereon) to the Offeror and the Offeree paying
the balance of the Offeror Payment to the Offeror by cashier's check, federal
funds wire or law firm trust account check. If the purchasing Venturer shall
fail to complete the purchase on the Purchase Date through no fault of the
selling Venturer, unless the Offeror and Offeree mutually notify the Escrow
Agent to the contrary, the Escrow Agent shall deliver the Deposit made by the
defaulting Venturer, plus any interest accrued thereon, to the selling Venturer
as liquidated damages for the failure of the purchasing Venturer to complete the
purchase.
(d) After delivery of a Triggering Notice, no Venturer shall be
obligated to contribute any Additional Capital in accordance with the terms
hereof. Any Venturer may make a loan to the Venture, at two percent (2%) over
the Stipulated Rate, during the period from delivery of a Triggering Notice
until the Purchase Date, which loan shall be repaid if made by a selling
Venturer, on the Purchase Date.
(e) On the Purchase Date, the Venturer selling its Venture
Interest ("Seller") shall, in writing, represent and warrant to the purchasing
Venturer ("Purchaser") that the Seller's Venture Interest is owned by the Seller
free and clear of all claims and encumbrances and that
16
valid title to the Seller's Venture Interest will be vested in the Purchaser (or
its designees) upon consummation of the transaction. The Purchaser may designate
one or more Persons to take title to all or any portion of the Venture Interest
being conveyed.
(f) The Purchaser hereunder must arrange for all loans owed by
the Venture to a Seller (or its Affiliates) to be paid in full at the closing on
the Purchase Date. Failure to do so shall be deemed a default for which the
above liquidated damages provision shall be applicable.
(g) At the closing of the purchase and sale of any Venture
Interest pursuant to this Section 7.4, the Seller shall assign, transfer and
convey the Venture Interest to be purchased to the Purchaser. In addition,
Purchaser shall be required to obtain and deliver to Seller the unconditional
release of Seller (and, if separate guaranties have been made by same, to any
shareholder, partner or other Affiliate of the Seller), from any and all
contractual obligations, contingent or otherwise, for monies borrowed by the
Venture and for contractual guaranties or contractual undertakings of the
Venture for which Seller (and/or its shareholders, partners or other Affiliates)
may be personally liable.
ARTICLE EIGHT
DISSOLUTION - TERMINATION
8.1 DISSOLUTION. It is the intention of the Venturers that the business
of the Venture be continued by the Venturers pursuant to the provisions of this
Agreement until such time as the occurrence of an "Event of Termination," as
hereinafter defined, at which time the Venture shall dissolve. The occurrence of
any of the following shall be deemed an "Event of Termination:"
(a) The sale of all or substantially all of the assets of the
Venture;
(b) The written decision by the Venturers that the Venture should be
dissolved;
(c) The Venture or a Venturer shall suffer a Bankruptcy; or
(d) December 31, 2003.
8.2 WIND-UP. Upon the dissolution of the Venture, the Venture
Accountants shall make a final accounting of the business and affairs of the
Venture and the Venturers shall proceed with reasonable promptness to liquidate
the business, property and assets of the Venture and to distribute the proceeds
in the following order of priority:
17
(a) To the payment of expenses of any sale, disposition or
transfer of the Venture assets in liquidation of the Venture;
(b) To the payment of just debts and liabilities of the Venture
(including to any Venturers), in the order of priority provided by this
Agreement;
(c) To the establishment of a reasonable reserve for contingent
expenses, final legal, accounting and similar expenses incurred in connection
with liquidating the Venture and for other unforeseen and miscellaneous
expenses. In addition, the sum of $200,000.00 shall be deposited into a reserve
for the payment of any warranty claims by homeowners. Such reserves, when no
longer needed for the purposes established, shall be distributed as provided in
subparagraphs (d) through (f) below;
(d) To the Venturers, PRO RATA, in accordance with their
respective Unreturned Capital Contributions;
(e) To the Venturers, PRO RATA, in accordance with their
respective Venture Interests.
The Venturers may elect to distribute the remaining property and assets
of the Venture, if any, in kind, in lieu of selling them, based upon the then
existing fair market value thereof and after allocating to the Venturers, in
accordance with their respective interests in the Venture, any unrealized gain
inherent in such assets.
The wind-up of the affairs of the Venture shall be conducted by the
Venturers. In liquidating the assets of the Venture, all tangible assets of a
saleable value shall be sold at such price and terms as the Venturers determine
to be fair and equitable. Any Venturer may purchase such assets at such sale. It
shall not be necessary to sell any intangible assets of the Venture. A
reasonable time shall be allowed for the orderly liquidation of the assets of
the Venture and the discharge of liabilities to creditors to minimize the losses
that might otherwise occur upon liquidation.
ARTICLE NINE
GENERAL PROVISIONS
9.1 RELATIONSHIP. Nothing contained in this Agreement shall be deemed or
construed to constitute any Venturer as a general partner, employee or agent of
the other Venturer, other than in connection with activities included within the
purpose and scope of the Venture as set forth herein and subject to limitations
upon same, as set forth herein.
18
9.2 NOTICE. All notices, demands or other communications given hereunder
shall be in writing and shall be deemed to have been duly given only upon hand
delivery thereof, including by recognized overnight courier, or upon the first
business day after mailing by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to Transeastern: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or at such other address, or to such other person and at such address for that
person, as any party shall designate in writing to the other Venturer for such
purpose in the manner hereinabove set forth.
9.3 ENTIRE AGREEMENT. This Agreement sets forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto,
and supersedes all prior and contemporaneous agreements, understandings,
inducements or conditions expressed or implied, oral or written, except as
herein contained.
9.4 AGENCY. Except as provided herein, nothing herein contained shall be
construed to constitute any Venturer the agent of any other Venturer or to limit
in any manner the Venturers in the carrying on of their own respective
businesses or activities.
9.5 BINDING EFFECT, NO ASSIGNMENT. This Agreement shall be binding upon
the parties hereto, their heirs, administrators, successors and permitted
assigns. No party may assign or transfer its interests herein, or delegate its
duties hereunder, except as expressly provided herein.
9.6 AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification, termination, discharge or change (collectively,
"Amendment") of this Agreement shall be valid and effective, unless the parties
shall unanimously agree in writing to such Amendment.
19
9.7 NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
9.8 GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the party or parties, or their personal representatives, successors and
assigns may require.
9.9 COUNTERPARTS. This Agreement and any amendments may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
9.10 HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
9.11 GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Florida and any proceeding arising between the parties
in any manner pertaining or related to this Agreement shall, to the extent
permitted by law, be held in Broward County, Florida.
9.12 FURTHER ASSURANCES. The parties hereto will execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
9.13 PROVISIONS SEVERABLE. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations of the jurisdiction in which the parties do
business. If any provision of this Agreement, or the application thereof to any
person or circumstance shall, for any reason or to any extent, be invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the greatest extent permitted by law.
20
9.14 LITIGATION. If any party hereto is required to engage in litigation
against any other party hereto, either as plaintiff or as defendant, in order to
enforce or defend any of its rights under this Agreement, and such litigation
results in a final judgment in favor of such party ("Prevailing Party"), then
the party or parties against whom said final judgment is obtained shall
reimburse the Prevailing Party for all direct, indirect or incidental expenses
incurred by the Prevailing Party in so enforcing or defending its rights
hereunder including, but not limited to, all attorney's fees and court costs and
other expenses incurred throughout all negotiations, trials or appeals
undertaken in order to enforce the Prevailing Party's rights hereunder.
9.15 REMEDIES. Each party hereto recognizes and agrees that the
violation of any term, provision or condition of this Agreement may cause
irreparable damage to the other parties which may be difficult to ascertain, and
that the award of any sum of damages may not be adequate relief to such parties.
Each party, therefore, agrees that, in addition to other remedies available in
the event of a breach of this Agreement, any party shall have a right to
equitable relief including, but not limited to, the remedy of specific
performance.
9.16 NO FOREIGN PERSON WITHHOLDING. Each of the Venturers hereby
represent and warrant for the benefit of the other that it is not a "foreign
person" within the meaning of Code Section 1445.
9.17 NO RECORDATION. Neither this Agreement nor any memorandum thereof
shall be recorded among the public records of any governmental authority.
21
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
▇.▇. ▇▇▇▇▇▇ OF PEMBROKE PINES,
INC.,
a Florida corporation, general partner
------------------------
Print Name:__________________ By:______________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
(Corporate Seal)
------------------------
Print Name:__________________ Dated: February ___, 1994
TRANSEASTERN PEMBROKE PROPERTIES,INC.,
a Florida Corporation, general partner
------------------------
Print Name:__________________
By:_____________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
President
(Corporate Seal)
------------------------
Print Name:__________________ Dated: February ___, 1994
22
EXHIBIT DESCRIPTION
A Legal Description of the Property
B Definitions
C Authoritzed signatories for house closings
D Guarantors of Approved Mortgage Loans
E Stockholders of Transeastern Pembroke Properties, Inc.
F Stockholders of ▇.▇. ▇▇▇▇▇▇ of Pembroke Pines, Inc.
G Authorized signatories for Venture Bank Accounts
EXHIBIT "A"
(Legal Description of the Property)
EXHIBIT "B"
(Definitions)
(a) ADJUSTED NET INCOME AND ADJUSTED NET LOSS. "Adjusted Net Income" or
"Adjusted Net Loss" means the net income or loss of the Venture resulting from
Venture operations during any stated period, as calculated by the Venture
Accountants for federal income tax purposes, provided that gain or loss
resulting from any disposition of property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by reference to the
Gross Asset Value of the property disposed of, notwithstanding that the adjusted
tax basis of such property differs from its Gross Asset Value.
(b) AFFILIATE. Any of the following: (i) any person or entity directly
or indirectly controlling, controlled by or under common control with a
Venturer, (ii) a person or entity owning or controlling ten percent (10%) or
more of the outstanding voting equity of a Venturer, (iii) any officer, director
or partner of a Venturer or an employee acting in a similar capacity, and (iv)
if such other person is an officer, director, partner or similar employee of a
Venturer, any entity for which such person acts in any such capacity.
(c) AGREEMENT. This Joint Venture Agreement of Parkside Homes, a Florida
general partnership, as originally executed and as amended from time to time, as
the context requires.
(d) AVAILABLE CASH. Cash of the Venture, excluding cash proceeds from a
Terminating Capital Transaction, if any, not needed to satisfy current
liabilities, upcoming capital expenditures or as a reasonable reserve for either
and thus available for distribution to the Venturers, which may include, but
shall not be limited to, cash proceeds generated by Venture operations and
Interim Capital Transactions, including financing and refinancing (which term,
"refinancing" is defined, for all purposes under this Agreement, to include
financing which has been recast, modified, extended or increased).
(e) BANKRUPTCY. As used in this Agreement, the term "Bankruptcy" with
respect to the Venture or a Venturer, shall refer to:
(1) the appointment of a receiver, conservator, rehabilitator or
similar officer for the Venture, a Venturer or any person or entity that has
majority voting rights with respect to any Venturer, unless the appointment of
such officer shall be vacated and such officer discharged within one hundred
twenty (120) days of the appointment; (2) the taking of possession of, or the
assumption of control over, all or any substantial part of the property of the
Venture, any Venturer or any person or entity that has majority voting rights
with respect to any Venturer by any receiver, conservator, rehabilitator or
similar officer or by the United States Government or any agency thereof, unless
such property is relinquished within one hundred twenty (120) days of the
taking; (3) the filing of a petition in bankruptcy or the commencement of any
proceeding under any present or future federal or state law relating to
bankruptcy, insolvency, debt relief or reorganization of debtors by or against
the Venture, any Venturer or any person or entity that has majority voting
rights with respect to any Venturer provided, if filed against the Venture, any
Venturer or the person or entity that has majority voting rights with respect to
any Venturer, such petition or proceeding is not dismissed within thirty (30)
days of the filing of the petition or the commencement of the proceeding; (4)
the making of an assignment for the benefit of creditors or a private
composition, arrangement or adjustment with the creditors of the Venture, any
Venturer or any person or entity that has majority voting rights with respect to
any Venturer; or (5) the commencement of any
proceedings supplementary to the execution of any judgment against the Venture,
any Venturer or any person or entity that has majority voting rights with
respect to any Venturer, unless such proceeding is dismissed within thirty (30)
days of the date it was commenced.
(f) CAPITAL ACCOUNTS. Throughout the full term of the Venture, each
Venturer shall have a separate Capital Account determined and maintained in
accordance with the provisions of Treasury Regulations Section
1.704-l(b)(2)(iv), promulgated under Code Section 704(b).
(g) CAPITAL CONTRIBUTION.The total amount of money or the agreed fair
market value of property other than money contributed by each Venturer to the
capital of the Venture, as reflected in the books of the Venture.
(h) CODE. The Internal Revenue Code of 1986, as amended from time to
time, or any corresponding provision or provisions of any federal internal
revenue law enacted in substitution of the Internal Revenue Code of 1986.
(i) EVENT OF TERMINATION. Any of the events that result in dissolution
of the Venture as set forth in Section 8.1 hereof.
(j) PERSON. Any individual, trust, partnership, corporation, joint
venture, or other entity or association, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person.
EXHIBIT "C"
(Authoritzed Signatories for House cCosings)
EXHIBIT "D"
(Guarantors of Approved Mortgage Loans)
EXHIBIT "E"
(Stockholders of Transeastern Pembroke Properties, Inc.)
EXHIBIT "F"
(Stockholders of ▇.▇. ▇▇▇▇▇▇ of Pembroke Pines, Inc.)
EXHIBIT "G"
(Authorized Signatories for Venture Bank Accounts)
ADDENDUM TO JOINT VENTURE AGREEMENT
OF
PARKSIDE HOMES
THIS ADDENDUM TO JOINT VENTURE AGREEMENT OF PARKSIDE HOMES (the
"Addendum") is made and entered into as of May __, 1994, by and between
TRANSEASTERN PEMBROKE PROPERTIES, INC., a Florida corporation ("Transeastern")
and ▇.▇. ▇▇▇▇▇▇ OF PEMBROKE PINES, INC., a Florida corporation ("▇▇▇▇▇▇").
Transeastern and ▇▇▇▇▇▇ are sometimes hereinafter referred to individually as
"Venturer" and collectively as "Venturers."
WITNESSETH
WHEREAS, the Venturers have heretofore executed that certain Joint
Venture Agreement dated February 19, 1994 (the "Agreement"), pursuant to which
the Venturers have agreed to participate together in a joint venture (the
"Venture") formed under the general partnership law of the State of Florida for
the acquisition of certain real property located in Broward County, Florida, as
more fully described on Exhibit "A" attached hereto, and the construction
thereon of single family residences for sale to the public (such real property
and the improvements to be constructed thereon being hereafter referred to as
the "Project"); and
WHEREAS, the Venturers have reached agreement regarding certain
modifications to the Agreement and wish to reduce their agreement regarding such
modifications to a written instrument.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein, the parties hereby agree as follows:
1. INCORPORATION BY REFERENCE. The foregoing recitals are hereby
acknowledged to be true and are incorporated herein by reference, and all
Exhibits annexed hereto and referred to herein are incorporated herein by
reference.
2. RATIFICATION OF AGREEMENT. The terms, covenants and conditions of the
Agreement remain in full force and effect and are hereby expressly ratified by
the parties.
33
3. SELECTION OF PROJECT MANAGER. Section 4.2 of the Agreement is hereby
modified to provide that Transeastern Properties of South Florida, Inc.
("Transeastern Properties") shall serve as the Project Manager (as defined in
the Agreement) . All references in the Agreement to the Project Manager shall be
deemed to refer to Transeastern Properties in its capacity as Project Manager.
4. COMPENSATION OF PROJECT MANAGER. As compensation for its services as
Project Manager, Transeastern Properties shall be entitled to receive the sum of
$200,000.00 for the calendar year 1994, payable in twelve equal monthly
installments of $16,666.66 per month. Transeastern Properties shall be entitled
to receive the sum of One Hundred Thousand Dollars per annum for all calendar
years after 1994, payable in equal monthly installments of $8,333.33 per month,
through completion of the sale of houses within the Project. All such monthly
payments shall be due and payable on the first day of each month. The
compensation due to Transeastern Properties shall be an expense of the Venture,
shall be paid from the funds of the Venture and shall be included as an
operating expense of the Venture in determining the Available Cash of the
Venture. Prior to the commencement of sales of completed houses by the Venture,
the Venture shall pay such amount to Transeastern on a monthly basis. ▇▇▇▇▇▇
shall not be entitled to any credit against its capital account in the venture
on account of such payments. Payment of the installments due for the months of
January - May, 1994 has been made concurrent with the execution hereof. The
provisions of Section of the Agreement shall be deemed modified to provide that
such monthly management fee paid to Transeastern from the Venture's funds shall
be charged against any Distribution of Available Cash due to ▇▇▇▇▇▇ under the
Agreement.
5. MISCELLANEOUS.
A. HEADINGS. The article and section headings contained in this Addendum
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of the Addendum or the Agreement.
B. GOVERNING LAW. This Addendum shall be construed in accordance with
the laws of the State of Florida and any proceeding arising between the parties
in any manner pertaining or related to this Addendum shall, to the extent
permitted by law, be held in Broward County, Florida.
C. EXTENT OF MODIFICATION. Except as expressly modified by the terms and
conditions hereof, the terms, covenants and conditions of the Agreement shall be
otherwise left unaffected, and are hereby ratified and confirmed in all
respects.
34
IN WITNESS WHEREOF, the parties have executed this Addendum the day and
year first above written.
▇.▇. ▇▇▇▇▇▇ OF PEMBROKE PINES,
INC., a Florida corporation, general partner
------------------------
Print Name:__________________ By:______________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
(Corporate Seal)
------------------------
Print Name:__________________ Dated: May ___, 1994
TRANSEASTERN PEMBROKE
PROPERTIES,INC., a Florida Corporation, general
partner
------------------------
Print Name:__________________
By:_____________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
President
(Corporate Seal)
------------------------
Print Name:__________________ Dated: May ___, 1994
35
SECOND
ADDENDUM TO JOINT VENTURE AGREEMENT
OF
PARKSIDE HOMES
THIS SECOND ADDENDUM TO JOINT VENTURE AGREEMENT OF PARKSIDE HOMES (the
"Addendum") is made and entered into as of May __, 1996, by and between
TRANSEASTERN PEMBROKE PROPERTIES, INC., a Florida corporation ("Transeastern")
and ▇.▇. ▇▇▇▇▇▇ OF PEMBROKE PINES, INC., a Florida corporation ("▇▇▇▇▇▇").
Transeastern and ▇▇▇▇▇▇ are sometimes hereinafter referred to individually as
"Venturer" and collectively as "Venturers."
WITNESSETH
WHEREAS, the Venturers have heretofore executed that certain Joint
Venture Agreement dated February 16, 1994 (the "Agreement"), pursuant to which
the Venturers agreed to participate together in a joint venture (the "Venture")
formed under the general partnership law of the State of Florida for the
acquisition of certain real property located in Broward County, Florida, as more
fully described on Exhibit "A" attached hereto, and the construction thereon of
single family residences for sale to the public (such real property and the
improvements to be constructed thereon being hereafter referred to as the
"Project"); and
WHEREAS, pursuant to the provisions of that certain Addendum to Joint
Venture Agreement dated July 1, 1994 (the "First Addendum"), the Venturers
agreed to certain modifications to the Agreement as more fully set forth in the
Addendum; and
WHEREAS, the Venturers have reached agreement regarding certain
additional modifications to the Agreement and wish to reduce their agreement
regarding such additional modifications to a written instrument.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein, the parties hereby agree as follows:
1. INCORPORATION BY REFERENCE. The foregoing recitals are hereby
acknowledged to be true and are incorporated herein by reference, and all
Exhibits annexed hereto and referred to herein are incorporated herein by
reference.
36
2. RATIFICATION OF AGREEMENT. The terms, covenants and conditions of the
Agreement, as modified by the First Addendum, remain in full force and effect
and are hereby expressly ratified by the parties.
3. MODIFICATION OF MAJOR DECISIONS. Section 4.1 of the Agreement sets
forth various "Major Decisions," which require the consent of both of the
Venturers. The Venturers hereby agree that the provisions of Section are hereby
modified to provide that the Major Decisions shall henceforth be as follows: (a)
The sale, exchange or other disposition of all, or substantially all, of the
property and assets of the Venture, other than the sale of individual lots and
houses to be constructed thereon within the Project; (b) A decision to dissolve
the Venture;
4. MANAGING VENTURER. From the date of this Addendum, Transeastern shall
be the Managing Venturer, and in such capacity shall have the following
responsibilities and all authority necessary to the performance of such
responsibilities:
(a) Approval of any material modification to the approved
Business Plan including, without limitation, any material
modification to the Budget or Cash Flow Analysis and any
other component thereof;
(b) Approval of modifications to the layout or facade of
houses, adjustments to lot sizes, adjustments to selling
prices and incurring of expenditures not contemplated by
the Budget but which do result in increasing the Budget by
more than ten percent (10%) shall not be deemed material
modifications;
(c) To authorize the Venture to enter into an Approved
Mortgage or any other financing arrangements, whether or
not secured by any portion of the Property and whether or
not with or without recourse to the assets of the Venture,
including routine equipment leases or other installment
obligations that are substantially consistent with the
Business Plan, including the Budget and Cash Flow
Analysis;
(d) To authorize any transaction, not expressly authorized
herein, between the Venture and a Venturer or any
Affiliate of a Venturer. Provided, however, that any such
material transactions which provide for the payment of
compensation in excess of amounts which could be
reasonably negotiated at arms length with qualified
non-affiliated third parties for the performance of such
services will require approval of all Venturers;
(e) To authorize the Venture to enter into a joint venture or
similar arrangement with third parties for the purpose of
developing any portion of the Property or for any other
purpose; and
(f) To authorize an expansion or restriction of the authority
of the Project Manager to act with respect to any matter
concerning the Venture.
All power and authority of the Venture not expressly delegated herein to
the Venturers
37
shall be vested in the Managing Venturer. For purposes of the foregoing, any
reference in this Agreement to an act, approval, consent or other event
occurring "by the Venturers," "from the Venturers," "in the Venturers" or "of
the Venturers" shall mean by unanimous consent of the Venturers.
5. MISCELLANEOUS.
A. HEADINGS. The article and section headings contained in this Addendum
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of the Addendum or the Agreement.
B. GOVERNING LAW. This Addendum shall be construed in accordance with
the laws of the State of Florida and any proceeding arising between the parties
in any manner pertaining or related to this Addendum shall, to the extent
permitted by law, be held in Broward County, Florida.
C. EXTENT OF MODIFICATION. Except as expressly modified by the terms and
conditions hereof, the terms, covenants and conditions of the Agreement, as
heretofore modified by the Addendum, shall be otherwise left unaffected, and are
hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, the parties have executed this Addendum the day and
year first above written.
▇.▇. ▇▇▇▇▇▇ OF PEMBROKE PINES,
INC., a Florida corporation, general partner
------------------------
Print Name:__________________ By:__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
(Corporate Seal)
------------------------
Print Name:__________________ Dated: May ___, 1996
TRANSEASTERN PEMBROKE
PROPERTIES,INC.,
a Florida Corporation, general partner
------------------------
Print Name:__________________
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
(Corporate Seal)
------------------------
Print Name:__________________ Dated: May ___, 1996
38
