BROADWAY-GRAND PLAZA ASSOCIATES
JOINT VENTURE AGREEMENT
THIS AGREEMENT, executed in duplicate as of January 1, 1981, is by and
between AMERICAN RECREATION CENTERS, INC., a California corporation, and XXXXXX
INVESTMENT, INC., a California corporation, hereinafter referred to as "ARC" and
"XXXXXX" respectively, and collectively referred to as "the Partners" or "the
Partnership".
RECITALS OF FACT:
A. ARC is a publicly held recreational chain and XXXXXX is a developer of
real property projects, both of whom desire to cooperate in the development of a
parcel of commercial land, located at the corner of Broadway and Grand Avenues,
Oakland, Alameda County, California, sometimes called "the Broadway Bowl
property".
B. The real estate project contemplated is basically the redevelopment of
the land now occupied by the old Broadway Bowl Building, the Hertz Rent-a-Car
Downtown Agency and possibly the two adjacent parcels under third party
ownership, into an office building complex together with parking and related
facilities.
C. ARC and XXXXXX have agreed to joint venture the project. The purpose of
this Agreement is to establish a general partnership for the limited purpose of
the proposed joint venture. For convenience of terminology, the legal entity
utilized will be a general partnership and the parties are referred to using
that terminology.
D. ARC and XXXXXX have already contributed cash and services as described
below, as a preliminary to formation of this entity.
THE PARTIES HERETO AGREE AS FOLLOWS:
1. NAME. The name of this Partnership shall be BROADWAY-GRAND PLAZA
ASSOCIATES. Upon execution of this Agreement or subsequent change in the
membership of the Partnership, the Partners shall sign, cause to be filed and
published in Alameda County a Certificate of
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Fictitious Name setting forth the name and place of business of each Partner as
required by the California Business and Professions Code, and a Statement of
Partnerships, as authorized by the California Corporations Code.
2. PURPOSE. The primary purpose of the Partnership shall be to redevelop
the Broadway Bowl property, and to construct and lease to third parties office
and commercial facilities on the Broadway Bowl parcel, either by the Partnership
or in a joint venture with third parties. If the Partnership is unable to do the
project itself or by a joint venture, the project may be sold by mutual
agreement of the parties to a third party. The said real property is more
particularly described on Exhibit "A" attached hereto and a plot plan is
attached as Exhibit "B". This real estate is hereafter generally called "the
property" herein.
3. TERM. The partnership shall be deemed to have commenced on January 1,
1981 and shall continue until December 31, 2041, unless sooner terminated. The
Partnership may not be voluntarily terminated except by mutual consent, until
the property has been re-developed and completed, or until sold as a project; if
not sold after the development is complete, however, the Partnership shall be
continued until December 31, 2041, unless both the partners shall mutually agree
to terminate the Agreement on a prior date. This is a partnership for a fixed
term. Termination of the Partnership shall be as provided in this Agreement, or
if no provisions are made herein, shall be in accordance with the existing
California General Partnership Law at the time of termination.
4. PLACE OF BUSINESS. Initially, the principal place of business of the
Partnership shall be c/o BERNAL INVESTMENT, INC., X.X. Xxx 0000, Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000, or at such other place or places as the Partners shall
hereafter determine. It is understood, however, that the Property is located in
Oakland, Alameda County.
5. CAPITAL CONTRIBUTIONS.
A. ARC CONTRIBUTIONS.
(i) INITIAL STEPS. In July, 1978, ARC acquired the improved property
consisting of the Broadway Bowl building and the Hertz
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Rent-a-Car lot from S. XXXXXX XXXXXX in a transaction for a total purchase price
of One Million One Hundred Thousand Dollars ($1,100,000.00) plus commissions,
transfer taxes, and other out-of-pocket costs. The adjoining properties in the
block, consisting of a parcel of approximately 25 X 100 feet owned by LOVI and
another parcel of approximately 75 X 75 feet owned by XXXX, have not been
acquired by the Partnership. The Partnership may attempt to acquire one or both
of these parcels. The Hertz Rent-a-Car facility is subject to a lease that does
not expire until 1986, and the Partnership will endeavor to terminate or
otherwise modify that lease at an earlier date if it is possible to arrive at an
agreement with Hertz.
(ii) AGREED VALUE. The Partners agree that ARC has contributed
initial capital, through loan payments, taxes, and other holding and
acquisition costs in an aggregate amount of $332,466.29, through December
31, 1980. Such amount shall be deemed ARC's permanent capital contribution,
returnable only upon dissolution of the Partnership as a result of the sale
or other disposition of the real property. ARC shall not be entitled to any
interest or other compensation for such contribution, beyond its percentage
of interest in the Partnership profits, as described below. Such capital
contributions shall be reflected in the opening entries of the books of the
Partnership, based upon a schedule of such amounts paid out by ARC.
(iii) PROPERTY AND OBLIGATIONS. ARC will hold title to the
real property in its name, on behalf of the Partnership, until requested
to Deed it to the Partnership or to any subsequent joint venture or
partnership which this Partnership may join.* Upon such request by XXXXXX,
the Partnership will pay all costs of transfer, but ARC shall not be
entitled to any compensation for the transfer. In the meantime, the
Partnership shall be solely liable for all costs of acquisition, ownership,
holding and developing the property which are or were incurred after
December 31, 1980. ARC shall account regularly to the Partnership for all
sums expended on behalf of the Partnership for any authorized purpose,
which sums shall be treated as loans to the Partnership as provided in
Paragraph 6 below.
* When so deeded, title shall be held as a partnership of the two parties,
subject to all the terms of this Agreement.
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X. XXXXXX'X CONTRIBUTION. XXXXXX shall not be required to make any cash
contribution to the capital of the Partnership, but XXXXXX agrees to contribute
its best efforts in the form of its professional services reasonably necessary
for the planning and development of the project, and through consultation with
the realtors, engineers and architects as necessary during construction of the
proposed office and commercial building, and any other property development of
the property. The sole contribution of XXXXXX shall be in the form of its
services to the Partnership, and the Partnership shall not be responsible for
payment to XXXXXX for any such services.
The general scope of such services required by XXXXXX, without further
compensation, shall be all those services listed above which are reasonably
necessary in order to accomplish the purposes of this Agreement. Notwith-
standing anything herein provided to the contrary, XXXXXX will not act as the
general contractor with respect to the development of the Partnership real
property.
C. OUT-OF-POCKET EXPENSES. Except as provided in Paragraphs 5.A. and
5.B., neither Partner shall be entitled to reimbursement for actual out-of-
pocket expenses for its own personnel, who work on the Project, which costs
shall be borne by each Partner individually. Each Partner shall pay all salaries
and other expenses of its own operations as part of its own unreimbursed
contribution.
D. INDIVIDUAL CAPITAL ACCOUNTS. Individual capital accounts shall be
maintained for each Partner to which shall be credited, or from which shall be
deducted, a Partner's capital contributions and withdrawals, as the case may be.
6. PROVISIONS FOR WORKING FUNDS BY ARC.
A. ADVANCES. In order to provide the necessary working funds for the
Partnership (hereafter called "operating advances"), ARC agrees to advance to
the Partnership as a non-interest bearing loan all sums, agreed upon by the
Partners as necessary, to pay Partnership obligations for the mortgage
(including principal and interest) on the property, for payment of taxes and
operating expenses for the existing building. In addition, ARC further agrees to
advance all of the funds reasonably necessary for the purpose of paying for
legal, accounting, planning,
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engineering, architectural and other similar so-called "front-end" costs on a
pre-development basis, the amount of which advances shall be added monthly to
its operating advances account.
Further, if the Partners agree on the necessity of doing so, ARC shall
advance, itself, or arrange a loan for the Partnership against the Property or
the Partnership assets in general, in the amount necessary to acquire or
terminate the Hertz lease, and to acquire the two adjoining parcels owned by
LOVI and XXXX. The purpose of these provisions is to provide a means by which
the Partnership can acquire the necessary working, acquisition and operational
capital during the pre-development stage of the property without XXXXXX putting
up any money. In the event that any money is borrowed on behalf of the
Partnership or by ARC for the Partnership, ARC shall be entitled to recover only
its actual borrowing costs for the money.
B. RETURN OF ADVANCES. Except as provided below in this Subparagraph
6.B., ARC shall be entitled to have the entire amount of its operating advances
returned to it, without interest, before any distributions of net cash flow or
net profits to the Partners. As soon as cash flow, either from the sale of the
project or from operations of the building development when completed, exceeds
financing amortization, expenses and a reasonable reserve for contingencies, all
of such cash flow shall be paid over the ARC, at least monthly, until the entire
amount of operating advances funded by ARC has been returned. When all operating
advances have been returned to ARC, then net cash flow shall be divided on the
percentage provided in Paragraph 7.A.
Notwithstanding the preceding paragraph, ARC agrees to reduce the cash
flow operating advance repayment to it by that sum reasonably necessary to allow
XXXXXX funds necessary to pay corporate taxes on any taxable income created by
the project allocable to XXXXXX. Such share of the net cash flow shall be paid
to XXXXXX from cash flow fifteen (15) days prior to the date on which the tax is
due and payable. Such payment to XXXXXX shall be charged against its future
share of net cash flow otherwise distributable to it, and deducted from future
payments. The amount deemed necessary for payment of taxes shall be
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determined by ascertaining XXXXXX'x share of California and U.S. taxable income
from the project for its taxable year, and then computing its Franchise and
Income tax as though the taxable income from the Project were its only income
for that period, without regard to any deductions or expenses. If there is no
taxable income attributable to XXXXXX from the project, then no amount shall be
paid XXXXXX until ARC's reimbursement is complete.
7. SHARING OF PROFITS AND LOSSES; CASH FLOW.
A. The net profits and losses of the Partnership shall be shared on
the basis of Sixty (60%) percent of ARC and Forty (40%) percent to XXXXXX. The
term "net profit" as used in this Agreement shall mean the net book profit
determined by the accountants employed for the Partnership at the close of each
fiscal year.
B. Notwithstanding the book or tax amount of "net profit" ARC and
XXXXXX agree to divide only the actual "net cash flow" from the operation of the
Partnership on a Sixty percent - Forty percent (60% - 40%) basis, and to
distribute the same monthly, after the return of ARC's "operating advances" as
provided in Paragraph 6.B.
C. A separate income account shall be maintained for each partner.
Partnership net profits shall be credited to the separate income accounts of the
Partners as earned.
8. ADDITIONAL CAPITAL FOR ACTUAL CONSTRUCTION. The Partners agree in
advance that ARC is not responsible for advancing the necessary capital to
proceed with actual construction and development and that the provisions of
Paragraph 6 above apply only to pre-development expenses. The Partners realize
that due to the very large capital requirements of developing the Project beyond
the pre-development stage, it will require that the Project either be financed
through equity participation by a lender or through equity participation by a
third party with a substantial loan from a third party lender.
It is further agreed that in any such participation by third parties the
dilution of interest in the profits shall apply on a pro-rata basis so that, for
example, if the equity participant brought in
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to obtain development funds were to have a total participation of Thirty-Three
and 33/100 percent (33.3%), then ARC's interest in the profits or ownership of
the project would be reduced by Twenty percent (20%) to Forty percent (40%) and
that of XXXXXX by Thirteen and 33/100 percent (13.33%) to Twenty-Six and 66/100
percent (26.66%), subject, however, to ARC's continuing rights to recover its
operating advances as described in Paragraph 6.B.
In the event that third parties are brought in as equity participants,
either this Partnership will form a new partnership with the equity participants
or this Partnership shall be amended to reflect the inclusion of the third party
or parties, but always subject to ARC's prior rights to recovery of its
operating advances as described in Paragraph 6.B.
The Partners agree to work in good faith to integrate such a partner
into the Project, but if they are unable to agree upon such equity partner or
the basis of its participation, then the Project will be sold, and out of the
proceeds of the sale, ARC shall first be entitled to recover its operating
advances; each party shall then recover the balance, if any, in its capital
account; and then the profit on the sale shall be divided by the Partners on the
basis of the Sixty - Forty percentage (60% - 40%) described in Paragraph 7
above.
9. BOOKS OF THE PARTNERSHIP. The Partnership books shall be maintained
on the same fiscal year basis as that of ARC (a 52-53 week year ending on the
last Wednesday of May of each year), and for income tax purposes, shall be on a
cash basis to the extent allowed by law. Initially, the books shall be kept by
XXXXXX at its general offices under the supervision of ARC. Each Partner shall
have the right, at any time during business hours, to examine the said books and
to compare the same with any statements prepared from them. Failure of a Partner
to object to the books and statements prepared therefrom within two (2) years
after the close of the said books
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and distribution of the statements based on them, shall be deemed conclusive
evidence of its agreement that they are correct and may not be reopened for any
purpose, except fraud. Monthly statements of profit and loss shall be provided
each partner by XXXXXX.
10. TIME DEVOTED TO PARTNERSHIP. Competent employees of each of the
Partners shall be assigned to devote such time to the operation of the business
and completion of the Partnership projects as may be reasonably necessary to
successfully conclude it under the Management obligations described in Paragraph
13 below. It is understood, however, that each of the Partners has other
business interests and each may devote its full time to such other business
interests, provided only that this does not unnecessarily interfere with the
timely completion of this Partnership project.
11. SALARIES; DRAWINGS. Neither partner nor its employees shall be
entitled to a salary, sales commission, or other direct compensation for
services performed for the Partnership. However, each Partner shall be entitled
from time to time to reimbursement for ordinary and necessary actual
out-of-pocket expenditures made on behalf of the Partnership business only after
completion of the development of the property.
Drawings for the Partners from available "net cash flow" shall be made
only as provided in paragraph 7. B. above.
12. BANK ACCOUNTS. The Partnership shall maintain a general commercial
bank account in such bank as may be agreed upon from time to time. There shall
be deposited into such bank account all funds received by the Partnership.
Withdrawals from the general commercial bank account shall be made upon the
signature of an authorized representative of either Partner, or as agreed from
time to time.
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13. MANAGEMENT AND CONTROL.
A. ARC had the responsibility of acquiring the property, and jointly
with XXXXXX is carrying out the responsibilities of deciding on development
alternatives, as well as eventual financing. ARC shall continue to provide
direction as to the development of the Project and in general participate
in the project. The basic responsibility of XXXXXX shall be to serve as the
lead in working up the development of the Project and the financing
alternatives, including working with the necessary professionals.
B. Upon completion of the Project, the Partners shall agree upon a
method of having all of the accounting done for the Partnership by themselves
or through a third party. Neither Partner has the authority, alone, to incur
obligations for financing on behalf of the Partnership, except by mutual
agreement.
C. Notwithstanding the foregoing paragraphs, neither Partner shall
have the power or right to do any of the following on behalf of the Partnership
without the consent of the other:
(1) Mortgage or voluntarily encumber the Partnership's real
property;
(2) Sell, lease or otherwise dispose of any of the Partnership
real property;
(3) Enter into a joint venture or Partnership on behalf of the
Partnership with any other person or entity; or
(4) Enter into any contract binding the Partnership to the
payment of money in excess of One Thousand ($1,000.00) Dollars, once the
improvements are complete, and Five Thousand ($5,000.00) Dollars prior to
that time.
14. DISSOLUTION PROCEDURES.
A. In the event of the voluntary or involuntary dissolution
of the Partnership for any reason, all remaining Partners or the surviving
Partner shall become the winding-up Partner and be charged with the
responsibility of winding up the affairs of the Partnership
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in accordance with the provisions of the California Partnership Law.
The Partner acting as the winding-up Partner shall have the right to retain,
and withhold from distribution to the Partners, a working capital fund
sufficient to insure that all obligations of the Partnership are paid, prior
to final dissolution and the final accounting and distribution of the
Partnership assets.
B. The proceeds of the disposition of the assets of the Partnership
shall be applied and distributed in the following order of priority:
(1) To the payment of the current debts and liabilities of the
Partnership (other than long-term financing of the improvements and any loans
or advances that may have been made by the Partners to the Partnership) and
to the expenses of liquidation;
(2) To the setting up of any reserve which the Liquidating
Partner may reasonably deem necessary for any contingent or unforeseen
liabilities or obligations of the Partnership or of the Liquidating Partner
arising out of or in connection with the Partnership or its liquidation.
Unless otherwise agreed by the Partners, such reserves shall be paid over
by the Liquidating Partner to an attorney-at-law or certified public accountant
practicing in the State of California, as escrow holder, to be held for the
purpose of disbursing such reserves in payment of any of the aforementioned
contingencies, and, at the expiration of such period as the General Partners
shall reasonably deem advisable, to distribute the balance thereafter remaining
in the manner provided in the following sub-divisions of this Paragraph B;
(3) To the repayment of any loans, or operating advances that
may have been made by the Partners, as provided above in Paragraph 6.A.
(4) Each party shall then recover the balance in its capital
account, if any; and
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(5) Any balance remaining shall be distributed Sixty percent -
Forty percent (60% - 40%) to the Partners; provided, however, that a
reasonable time shall be allowed for the orderly liquidation of the assets
of the Partnership so as to enable the Liquidating Partner to minimize
the losses possible upon liquidation. Each of the Partners shall be furnished
with a statement prepared by the Partnership's then accountants, which shall
set forth the assets and liabilities of the Partnership as of the date of
complete liquidation.
15. RESTRICTIONS ON TRANSFER; RIGHT OF FIRST REFUSAL. The interest
of a Partner may not be transferred, voluntarily or by operation of law,
except as provided in this Paragraph 15. Further, the provisions of this
paragraph shall continue to apply to any interest held by the Partners as
tenants in common or in any other successor entity, unless all Partners under
this Agreement agree to the contrary. These restrictions are covenants
running with the land to be owned by the Partnership, which shall be
incorporated in any deed to a successor entity so as to bind all successors
in interest, unless expressly waived by the then Partners.
Prior to commencement of construction or for a period of five (5)
years, whichever first occurs, no transfer may be made of an interest held
by a Partner. Once construction has commenced, a transfer may be made,
provided that if either Partner desires or proposes to sell or transfer all
or any portion of its interest in the Partnership (or any successor
entity) then such selling or transferring Partner shall first offer the
Partnership interest proposed to be transferred to the other Partner on the
same terms and conditions, and shall identify the proposed transferee;
provided, however, all Partners under this or any successor agreement may
agree to waive this right of first refusal. The non-selling Partner shall
then have ten (10) business days in which to accept or reject the offer. If
the offer is not accepted by the non-selling Partner within the ten (10)
day period, then the selling Partner shall be free to make the transfer,
provided that (1) it shall be to the party identified in the notice of sale;
(2) it shall be on no less favorable terms than offered to the non-selling
Partner;
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(3) the transferee shall be obligated to provide the non-selling Partner,
prior to the transfer, with reasonable evidence of comparable financial
responsibility to that of the selling Partner; and (4) the transferee shall
expressly assume all of the obligations hereunder of the transferor. A transfer
made as a result of a rejection of the right of first refusal by a Partner must
close, if at all, within sixty (60) days following the expiration of the ten
(10) day notice period, or new notice must be given to the non-selling Partner.
A "tax free exchange" is expressly prohibited under this Paragraph 15,
unless the proposed transferor has demonstrated to the non-selling
Partner that the values involved in the exchange are realistic and that
the exchange is not for the purpose of avoiding the restrictions of this
Paragraph 15. The non-selling Partner shall have the right to meet or
match the proposed transaction with the identical property within a
period of fifteen (15) days, and if unable to meet such terms, the
selling Partner shall be entitled to complete the exchange as proposed.
In all events the non-selling (or non-exchanging) Partner shall be
entitled to the same notice of intended transfer and to the same
transfer conditions being imposed on the new transferee, even though the
non-exchanging Partner cannot participate in the exchange.
Notwithstanding anything in this Paragraph 15 to the contrary, either
Partner shall have the right, at any time, upon ten (10) days' written
notice to the other to transfer, without the above restrictions, all or
any part of its interest in the Partnership to a wholly owned corporate
subsidiary, provided that (1) such transfer shall not relieve the
original Partner of any obligation hereunder; (2) the transferee
corporation shall expressly assume the obligations of the transferor,
without releasing the transferor; and (3) the transferee corporation
shall expressly agree in such assumption agreement that it has no such
further right to transfer to a subsidiary without the consent of the
other Partner, and such subsidiary shall have no right to transfer its
interest in the Partnership to any other person, firm or corporation
without complying with the terms of this Paragraph 15.
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16. ARBITRATION. Any controversy arising out of or related to this
Agreement or the breach of this Agreement shall be settled by arbitration at
Sacramento, California in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered may be entered in any court
having jurisdiction thereof; provided only, that an accounting may be obtained
by court proceedings in lieu of arbitration. The neutral arbitrator (or if only
one, then the only arbitrator) shall be an attorney at law, licensed to practice
in California. The Partners may agree to an informal arbitration, but only by
mutual agreement.
17. NOTICES. All notices provided in this Agreement shall be in writing
and shall be sufficient if sent by United States mail to the last recorded
address of the Partner (in the Partnership records) to whom such notice is to be
given; alternatively, delivery of a notice by personal service shall be
sufficient.
The address of each is:
AMERICAN RECREATION CENTERS, INC. XXXXXX INVESTMENT, INC.
X.X. Xxx 00000 X.X. Xxx 0000
Xxxxxxxxxx, XX 00000 Xxxxxx, XX 00000
18. EXECUTION OF OTHER DOCUMENTS. The Partners agree that they will,
from time to time, execute any and all further documents required by law, upon
request of any Partner or legal counsel for the Partnership.
19. PRESUMPTIONS. Title and captions are not part of this Agreement.
California law governs construction and interpretation of this Agreement. This
Agreement has been reviewed by legal counsel for each Partner so that no
presumption shall be made or asserted against either Partner on the grounds of
authorship of the Agreement.
20. AMENDMENTS. This Agreement may be amended only by a written addendum
hereto, signed by all of the Partners.
21. HEIRS, SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of, and be binding upon, the heirs, successors
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and assigns of all Partners except as specifically provided herein.
EXECUTED at Sacramento, California as of January 1, 1981.
AMERICAN RECREATION CENTERS, INC.,
a California corporation
By /s/ illegible
-------------------------------
Officer
XXXXXX INVESTMENT, INC.,
a California corporation
By /s/ illegible
---------------------------------
Officer
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That parcel of land in the City of Oakland, County of Alameda, State of
California, described as follows:
A portion of Block 9, "Map of Resubdivision of Block 9, Pacific Homestead",
filed May 23, 1873, Map Book 3, page 30, Alameda County Records, described as
follows:
Beginning at the point of intersection of the western line of Broadway with the
southern line of 23rd Street, formerly Locust Street, as said way and street are
shown on the map herein referred to; thence westerly along said line of 00xx
Xxxxxx 219.63 feet, more or less, to a point 100 feet easterly from the eastern
line of Valley Street; thence at right angles southerly 100 feet; thence at
right angles westerly 25 feet; thence at right angles northerly 25 feet; thence
at right angles westerly 75 feet, more or less, to the easterly line of Valley
Street; thence southerly along said easterly line of Valley Street 115.18 feet,
more or less, to the northern line of West Grand Avenue, formerly 00xx Xxxxxx as
said street was established by Final Decree of Condemnation in that certain
action entitled "City of Oakland, a municipal corporation, vs. Xxxxxx X. Xxxx,
et al.", Case No. 113095, a certified copy of which Decree was recorded March
28, 1932, in Book 2793 of Official Records of Alameda County at page 175; thence
south 77 degrees 18' 22" east along the last named line 270.18 feet to the point
of intersection with the western line of Broadway as said way is shown on said
Decree recorded in Book 2793 OR, at page 175; thence northerly along said line
of Broadway 200.17 feet, more or less, to the southern line of 00xx Xxxxxx and
the point of beginning.
Legal Of Existing Broadway Bowl
EXHIBIT A
[FIGURE OF PLOT]
Plot Plan Of Total Parcel Including Broadway Bowl Property
EXHIBIT B
September 11, 1996
Xx. Xxxxxx X. Xxxxxx
Xxxxxx Investments, Inc.
X.X. Xxx 0000
Xxxxxx, XX 00000
Re: Union City Release Cancellation
Dear Xxxxx:
This letter confirms our agreement concerning the early termination of the lease
between us for Union Square Lanes located at 00 Xxxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx.
The lease was originally entered into between Union City Associates, as
landlord, and American Recreation Centers, Inc. ("ARC"), as tenant, on March 1,
1980 for a term of 20 years ending on February 29, 2000.
Xxxxxx Investment, Inc. ("Xxxxxx") is now the successor to the original
landlord, and we have agreed to terminate the lease effective April 12, 1996
("effective date"). We have removed all of our personal property from the
premises, and you have accepted the premises back in its present "as is"
condition.
In return for this early termination, we have agreed to pay Xxxxxx an early
termination fee of One Hundred Ninety One Thousand, Three Hundred Sixteen and
No/100 Dollars ($191,316).
This early termination fee ("fee") shall be payable out of ARC Properties,
Inc.'s ("ARCP") share of the gain on the sale of the real property owned with
you and commonly known as "Broadway-Grand" located in Oakland, California.
Until paid, the fee shall bear interest at 8% per annum, but may be prepaid by
ARC or ARCP at any time without penalty.
On the effective date Xxxxxx and ARC shall be fully and unconditionally released
and discharged from their respective obligations arising from or connected with
the provisions of the lease. This letter agreement shall fully and finally
settle all demands, charges, claims, accounts, or causes of action of any
nature, including, without limitation, both known and unknown claims and causes
of action that arose out of or in connection with the lease, and it constitutes
a mutual release with respect to the lease. Xxxxxx and ARC expressly waive the
provisions of Civil Code section 1542, which provides:
"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."
If this meets with your approval, please acknowledge the bottom portion of this
letter and return an executed copy to me.
Sincerely,
AMERICAN RECREATION CENTERS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx, President and CEO
READ AND AGREED:
XXXXXX INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx, President
ARC PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx, President and CEO
