EXHIBIT 10.43
CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(LOMA SQUARE)
The undersigned Transferor agrees to transfer the Property to the
undersigned Transferee and Transferee agrees to accept the transfer on the
following terms and conditions:
1. Incorporation by Reference. All of the terms and conditions of:
a. The General Conditions to Contribution Agreement (the "General
Conditions");
b. The Addenda to General Conditions to Contribution Agreement
(the "Addenda");
c. The Exhibits to General Conditions to Contribution Agreement
(the "Exhibits"); and
d. The Schedules to General Conditions to Contribution Agreement
(the "Schedules") which are attached hereto are incorporated by reference herein
as being the agreement of the undersigned.
2. Project. LOMA SQUARE
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3. Transferor. XXXXXX/LOMA SQUARE ASSOCIATES
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4. Transferee. XXXXXXXXX XXXXXX PROPERTIES OPERATING PARTNERSHIP,
L.P., a California limited partnership.
5. Consideration to Transferor. The total sum of $26,794,822/1/
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which is comprised of the following elements:
a. Existing Debt $21,422,461
b. Assumption fee to Prudential Insurance Company $ 190,000
c. Commission obligations of Transferor paid by $ 133,974
Transferee and charged against Transferor
(subject to change in Transferor's sole discretion,
and as a charge solely to Transferor)
d. Transferor's share of Closing Costs (estimated) $ 25,000
e. Prorations charged against Transferor (estimated) $ 5,000
f. OP Units $ 5,018,387
/1/ The Term Sheet Consideration of $27,372,980 has been reduced by $228,158 to
offset for the above market interest rate of the Existing Debt against the
Property and by $350,000 to compensate for Transferee's assumption of the toxic
remediation on the Property, to the amount of $26,794,822.
g. Cash $0
h. Total OP Units and Cash (being the aggregate of
the "Constituent Partner's Equity") $ 5,018,387
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i. Total Consideration $26,794,822
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The Total Consideration is subject to adjustment as provided herein and in
the General Conditions, the Addenda, the Exhibits and the Schedules.
6. Allocation. The OP Units and Cash (subject to adjustment as provided
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in the preceding sentence) will be allocated among the direct and indirect
partners (the "Constituent Partners") of Transferor as follows:
Percentage
of the aggregate
of the
Name of Constituent
Constituent OP Units Partners' allocated
Partner: (in $): Cash: Total: Equity: debt:
--------- ------- ------ ------- ------ -----
Hi-Loma $2,509,193 $0 $2,509,193 50.000% $ 600,000
Xxxxx Family
Partnership $2,509,194 $0 $2,509,194 50.000% $8,000,000
---------- -- ---------- ------- ----------
Totals $5,018,387 $0 $5,018,387 100.000% $8,600,000
========== == ========== ======= ==========
7. Special Provisions:
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a. Transferee will make a payment of principal on the existing debt
against the Property so that the unpaid balance will be $19,000,000 at the
Closing. As a condition to the Closing for the benefit of Transferee,
Transferor, prior to the Closing Date, shall obtain a signed written statement
from the holder of the Existing Debt (in such form and substance as shall be
reasonably satisfactory to Transferee) (i) which will set forth the amount of
unpaid principal, accrued but unpaid interest and fees payable to Lender in
connection with the assumption of the Existing Debt; (ii) which will state that
Lender will accept a pay down of principal to $19,000,000 (and the attendant
fee, if any, in connection with such pay down which fee, if any, must be
acceptable to Transferor and, if paid, will be charged against Transferor's
Consideration); (iii) which will confirm the payment terms and maturity date of
the Existing Debt; and (iv) which will confirm that the Existing Debt may be
paid in full without penalty on February 15, 1999.
b. Transferee will pay the assumption fee of Prudential Insurance Company
(in the amount set forth at paragraph 5. b. or in such other amount as shall be
approved by Transferor at or prior to the Closing Date) and all other reasonable
fees of Prudential Insurance Company in connection with the assumption. Such
payments made by Transferee shall be charged against the Transferor's
Consideration.
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c. The effectiveness of this agreement is contingent upon Transferor
being able to obtain the consent of Prudential Insurance Company to the
arrangements described in subparagraphs 7.a. and 7.b., above.
d. A portion of the Property is represented by a lease (the "Ground
Lease") between Xxxxxxxxx Xxxxxx and Xxxxxx Xxxx, as Lessor, and W. Xxxxx
Xxxxx, as Lessee, dated November 14, 1961 as amended on December 8, 1961.
Transferor and Transferee agree to execute and deliver an assignment and
acceptance of the Ground Lease in such form as shall comply with the provisions
of Subparagraphs 26.B and 26.C of the Ground Lease and as otherwise shall be
reasonably requested by Transferee and satisfactory to the Title Company.
Transferee shall notify Lessor of the assignment as required by Subparagraph
26.A of the Ground Lease. As a condition to Closing, Transferor shall obtain an
estoppel certificate from the Lessor as to the terms and provisions of the
Ground Lease in such form as shall be reasonably satisfactory to Transferee.
e. The Consideration has been reduced by $350,000 to offset for the
fact that Transferee, not Transferor, shall be solely responsible for
remediation of soils contamination on the Property. Transferee agrees to
indemnify and hold Transferor and its partners and affiliates harmless from
obligations with respect to soils contamination on the Property and releases
Transferor and its partners from any liability to Transferee with respect to
soil contamination on the Property. As soon as invoices become available
following the Closing, Transferee shall reimburse Transferor for expenditures
made by Transferor pursuant to the Contract between Transferor and EST dated
January 15, 1998 through the date of the Closing (but not in excess, however, of
$40,000).
f. Prior to the Closing Date Transferor will deposit the sum of
$121,776 (the "Deposit") in a separate escrow account with Title Company
pursuant to an Escrow Agreement (which shall be in form and substance reasonably
satisfactory to Transferor and Transferee) which shall have the following basic
provisions: (i) each month Title Company shall disburse to Transferee from the
Deposit the amount of $6,998 (which is equivalent to and in lieu of rent in the
amount of $5,880 and contribution to common area maintenance contributions of
$1,118 on Space 10 C & D (the "Vacant Space")); (ii) if the Vacant Space is
leased pursuant to a lease or leases which require expenditures for tenant
improvements and leasing commissions, such expenditures shall be reimbursed to
Transferee by Title Company from the Deposit; (iii) the disbursements under
clause (i) shall be reduced to the extent that gross rents shall be received
from the Vacant Space and shall cease at such time as Transferee shall commence
receiving rents from Vacant Space in an amount equal to $6,998; (iv) when the
expenditures under clause (ii) have been paid and rents commence as described in
clause (iii), the balance of the Deposit shall be paid over by Title Company to
Transferor; and (iv) if rents shall not have commenced on the Vacant Space in an
amount equal to $6,998 within 1 year from the Closing Date, the balance of the
Deposit then remaining shall be paid over to Transferee.
g. Addendum V is supplemented as follows: The obligations of Xxxxx
Family Partnership and HI-Loma under their respective Conforming Guaranties
shall be in the following ratio: Xxxxx Family Partnership shall be solely
responsible for the top $7,400,000 of the Constituent Partners' share of the
amount by which Lender's Non-Guarantor Recovery (as said term is defined in
Addendum VI) is less than the Aggregate Guaranties (as said term is defined in
Addendum VI). After Xxxxx Family Partnership has paid the initial $7,400,000 of
the Constituent Partners' share of the amount by which Lender's Non-Guarantor
Recovery is less than the Aggregate Guaranties, HI-Loma and
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Xxxxx Family Partnership shall each be responsible for $600,000 of the bottom
$1,200,000 of the Constituent Partners' share of the amount by which Lender's
Non-Guarantor Recovery is less than the Aggregate Guaranties, to be payable by
HI-Loma and Xxxxx Family Partnership proportionately. For example, if the Non
Guarantor Recovery was $8,000,000 less than the Aggregate Guaranties of
$8,600,000, and the Constituent Partners' share thereof is $8,000,000, Xxxxx
Family Partnership would pay the top $7,400,000 of the amount due and HI-Loma
and Xxxxx Family Partnership would each pay $300,000 of the bottom $600,000 of
the amount due.
h. The format for the contribution of the Property shall be as
follows: Transferor will convey the Property to Transferee. Transferor will
designate the Constituent Partners to be the recipients of the OP Units as is
shown in paragraph 6 above. The Constituent Partners proportionately will
assume the obligations of Transferor under the Representations and Warranties
and Transferor will be released from liability under the Representations and
Warranties. Notwithstanding the foregoing, each Constituent Partner shall be
solely responsible for his own investment representations and investor
suitability representations.
Executed as of March 23, 1998.
Transferor: XXXXXX/LOMA SQUARE ASSOCIATES,
a California limited partnership
By: HI-Loma, a California general
partnership, general partner
By: Xxxxxx Investments, a California
general partnership, general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: _______________________
Xxxxxxx X. Xxxxxx, Xx.
Its: President
Transferee: Xxxxxxxxx Xxxxxx Properties Operating
Partnership, L.P., a California limited
partnership
By: Xxxxxxxxx Xxxxxx Properties, Inc., a
Maryland corporation, its General Partner
By: Xxxx Xxxxxxx
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Its: Senior Vice President
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AGREEMENT OF TITLE COMPANY
The undersigned executes this Agreement for the purposes of acknowledging its
agreement to serve as escrow agent in accordance with the terms of this
Agreement and to acknowledge receipt of the Xxxxxxx Money from the Transferee.
First American Title Insurance Company
By:
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Its:
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Date: ________________________, 1998
Escrow No. N 984018E
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