<PAGE> 1
As filed with the Securities and Exchange Commission on July 3, 1997.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 21, 1997
EXCEL REALTY TRUST, INC.
(Exact Name of Registrant as Specified in its Charter)
MARYLAND 1-12244 33-0160389
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
16955 VIA DEL CAMPO, SUITE 100
SAN DIEGO, CALIFORNIA 92127
(Address of Principal Executive Offices) (Zip Code)
(619) 485-9400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
This Current Report on Form 8-K is filed by Excel Realty Trust, Inc.,
a Maryland corporation (the "Company"), in connection with the matters
described herein.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 21, 1997, the Company and Excel Realty Partners, L.P. ("ERP"), a
Delaware limited partnership of which the Company is the sole general partner,
acquired interests in nine (9) shopping centers (the "Shopping Centers") from
entities owned or controlled by Albert B. Glickman.
Four (4) of the Shopping Centers (the "Contributed Centers") were
contributed to ERP in consideration for the issuance of ERP limited partnership
units ("Units") and ERP's assumption of existing indebtedness. Briggsmore Plaza
Co., a California partnership, contributed Briggsmore Plaza, a shopping center
located in Modesto, California having approximately 96,800 square feet of gross
leasable area, to ERP for consideration valued at approximately $5,530,000,
which was comprised of the issuance of 158,705 Units (valued at $25.00/Unit) and
the assumption of a 8.3% fixed rate mortgage having a principal balance of
approximately $1,560,000. G & H Associates, a California partnership,
contributed Kietzke Plaza, a shopping center located in Reno, Nevada having
approximately 165,280 square feet of gross leasable area, to ERP for
consideration valued at approximately $10,340,000, which was comprised of the
issuance of 413,405 Units (valued at $25.00/Unit). Montebello Plaza Co., a
California partnership, contributed Montebello Plaza, a shopping center located
in Montebello, California having approximately 286,440 square feet of gross
leasable area, to ERP for consideration valued at approximately $22,210,000,
which was comprised of the issuance of 494,116 Units (valued at $25.00/Unit),
the assumption of a 8.6% fixed rate mortgage having a principal balance of
approximately $9,560,000, and the assumption of a 7.5% fixed rate mortgage
having a principal balance of approximately $290,000. Paradise Plaza Co., a
California partnership, contributed Paradise Plaza, a shopping center located in
Paradise, California having approximately 198,560 square feet of gross leasable
area, to ERP for consideration valued at approximately $4,730,000, which was
comprised of the issuance of approximately 70,739 Units (valued at $25.00/Unit)
and the assumption of a 9.2% fixed rate mortgage having a principal balance of
approximately $2,960,000.
Certain of the Units issued in consideration for the contribution of the
Contributed Centers are immediately convertible into cash, and the balance of
the Units issued are redeemable for cash or common stock of the Company (at the
Company's election) commencing in September of 1999. In addition, the
transferors of the Contributed Centers may be entitled to receive additional
Units based on future leasing activity at the Contributed Centers.
The Company purchased two (2) of the Shopping Centers (the "Purchased
Centers") for cash. Coachella Plaza, a shopping center located in Coachella,
California having approximately 11,180 square feet of gross leasable area, was
purchased from Anacapa-Coachella Plaza Co., a California partnership, for
approximately $1,350,000. Carmen Plaza, a shopping center located in Camarillo,
California having approximately 128,900 square feet of gross leasable area, was
purchased from Carmen Plaza Co., a California partnership, for approximately
$7,080,000. In addition, the sellers of the Purchased Centers may be entitled to
receive additional cash based on future leasing activity. The funds used to
acquire the Purchased Centers were obtained from the Company's line of credit.
ERP acquired a leasehold interest in three (3) of the Shopping Centers
(the "Master Leased Centers"). ERP leased Bakersfield Plaza, a shopping center
located in Bakersfield, California having approximately 213,370 square feet of
gross leasable area, from The Glickman Bakersfield Community Property Trust. The
term of the Bakersfield Plaza lease is thirty-four (34) years. The initial
triple net monthly rental payment is $105,000. ERP leased Bristol Plaza, a
shopping center located in Orange County, California having approximately
112,380 square feet of gross leasable area, from Brisplaz Co. LLC, a California
limited liability company. The term of the Bristol Plaza lease is thirty-four
(34) years. The initial triple net monthly rental payment is $63,000. ERP
leased Cudahy Plaza, a shopping center located in Los Angeles, California having
approximately 145,670 square feet of gross leasable area, from Cudahy Plaza Co.
LLC, a California limited liability company. The term of the Cudahy Plaza lease
is thirty-four (34) years. The initial triple net monthly rental payment is
$33,000. The initial triple net rent at each of the Master Leased Centers is
subject to increase based on future leasing activity. In addition, the Company
has purchased the option to acquire fee title to the Master Leased Centers,
exercisable at various times during the terms of the respective leases.
In connection with the acquistion of the Shopping Centers, the Company
and ERP also incurred certain transaction costs that will be allocated among and
capitalized into the values of the Shopping Centers. These costs are not
reflected in the above values for each of the Shopping Centers.
In assessing the acquisition, purchase or lease, as the case may be, of
each of the Shopping Centers, the Company and ERP considered, among other
factors, the location and occupancy rate of each of the Shopping Centers, the
quality of the tenants (including the tenants' credit quality), comparative
rents, and the competition in each Shopping Center's respective area. The
Company and ERP also assessed potential expenses associated with owning or
leasing, and operating, the Shopping Centers, including, among other factors,
estimated maintenance expenses, capital improvements costs and other operating
expenses.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Report of Squire and Company, PC.
(b) Financial Statements of Property Acquired.
Historical Summaries of Operating Revenues and Direct Operating
Expenses for the selected properties acquired by Excel Realty Trust, Inc. for
the year ended December 31, 1996.
(c) Pro Forma Financial Information.
Unaudited Pro Forma Condensed Consolidated Statements of Income and
Balance Sheet of Excel Realty Trust, Inc. as of March 31, 1997 and for year
ended December 31, 1996.
(d) Exhibits.
10.01 Contribution Agreement dated as of June 20, 1997, among Excel
Realty Partners, L.P., a Delaware limited partnership, Briggsmore Plaza Co., a
California partnership, G & H Associates, a California partnership, Montebello
Plaza Co., a California partnership, and Paradise Plaza Co., a California
partnership.
23.01 Consent of Squire and Company, PC.
99.01 Historical Summaries of Operating Revenues and Direct Operating
Expenses for the selected properties acquired by Excel Realty Trust, Inc. for
the year ended December 31, 1996.
99.02 Unaudited Pro Forma Condensed Consolidated Statements of Income
and Balance Sheet of Excel Realty Trust, Inc. as of March 31, 1997 and for year
ended December 31, 1996.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 3, 1997 EXCEL REALTY TRUST, INC.
By: /s/ RICHARD B. MUIR
---------------------------------
Richard B. Muir
Executive Vice President
and Secretary
3
<PAGE> 4
EXHIBIT INDEX
EXHIBIT NO. PAGE
---------- ----
10.01 Contribution Agreement dated as of June 20, 1997,
among Excel Realty Partners, L.P., a Delaware limited
partnership, Briggsmore Plaza Co., a California
partnership, G & H Associates, a California
partnership, Montebello Plaza Co., a California
partnership, and Paradise Plaza Co., a California
partnership............................................. 5
23.01 Consent of Squire and Company, PC....................... 35
99.01 Historical Summaries of Operating Revenues and Direct
Operating Expenses for the selected properties
acquired by Excel Realty Trust, Inc. for the
year ended December 31, 1996............................ 36
99.02 Unaudited Pro Forma Condensed Consolidated Statements
of Income and Balance Sheet of Excel Realty Trust, Inc.
as of March 31, 1997 and for year ended
December 31, 1996....................................... 53
4
<PAGE> 1
EXHIBIT 10.01
_______________________________________________________________________________
CONTRIBUTION AGREEMENT
By and Between
EACH OF THE PARTNERSHIPS IDENTIFIED ON
SCHEDULE "1" ATTACHED HERETO
and
EXCEL REALTY PARTNERS, L.P.
_______________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Contribution of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Delivery of Documents and Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. Close of Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Prorations and Post-Closing Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Distribution of Funds and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Representations, Warranties and Covenants of the Transferors . . . . . . . . . . . . . . . . . . . . . . . 9
8. Representations and Warranties of the Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9. Parties' Obligation to Close . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10. Brokerage Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
11. Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12. Pre-Closing and Post-Closing Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.1 Contractual Obligations to Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.2 Physical Condition and Legal Compliance of the Project . . . . . . . . . . . . . . . . . . . . . 13
12.3 Hazardous Materials and Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12.4 Tort Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.5 Claims for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.6 Defense by the Indemnitor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.7 Manner of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.8 Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
13. Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.3 Amendments and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.5 Merger of Prior Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.6 Attorney Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.8 Pronouns; Joint and Several Use of Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . 18
14.9 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.12 Calculation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.13 Judicial Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14.14 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14.15 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14.16 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14.17 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
14.18 Limitation on Transferor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
14.19 Limitation on Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
14.20 Partnership Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
<PAGE> 3
CONTRIBUTION AGREEMENT
IN CONSIDERATION of the covenants herein contained, each of
the Transferors named in Schedule 1 attached hereto hereby agrees to contribute
to the Partnership, and the Partnership hereby agrees to acquire, the Projects
hereinafter described, upon the following terms and conditions.
RECITALS
A. Each of the Transferors is the fee owner of one of
the retail shopping centers described in Schedule 1 attached hereto and
incorporated herein by reference (individually, a "Project," and collectively,
the "Projects").
B. The parties intend that the Transferors will
contribute the Projects to the Partnership, in exchange for the assumption of
certain non-recourse indebtedness of the Transferors and the issuance to the
Transferors of units of limited partnership interest in the Partnership
("Units"), all on the terms and subject to the conditions set forth herein.
C. Schedule 2 attached hereto and incorporated herein by
reference sets forth certain fundamental provisions and definitions for
purposes of this Contribution Agreement.
AGREEMENTS
1. Contribution of Properties. Subject to the terms and conditions
contained in this Contribution Agreement, each Transferor agrees to contribute
to the Partnership, and the Partnership agrees to acquire from the Transferors,
all of the Transferors' right, title and interest in and to the Projects, each
of which includes all of the Transferors' right, title and interest in and to
the following described property:
1.1 Fee title to each parcel of real property described on
Schedule 1 (individually, a "Parcel" and collectively, the "Parcels");
1.2 All easements, rights-of-way, appurtenances, and other rights
and benefits belonging to each Parcel, and all public or private streets,
roads, avenues, alleys, or passways, open or proposed, on or abutting each
Parcel, and any future award made to or to be made in lieu thereof, and any
future award for damage to any Parcel by reason of a change of grade in any
street, alley, road, or avenue, as aforesaid (all of the foregoing being
included within the term "Parcel");
1.3 All of the buildings, structures, fixtures, facilities,
installations, and other improvements of every kind and description now or
hereafter in, on, over and under each Parcel, and all plumbing, gas,
electrical, ventilating, lighting and other utility systems, ducts, hot water
heaters, oil burners, domestic water systems, elevators, escalators, canopies,
signs, air conditioning systems, carpeting, telephone systems, alarm systems
and all other building systems and fixtures attached to or comprising a part of
all such improvements (collectively, with respect to each Parcel, the
"Improvements");
1.4 Any and all leases, subleases, licenses, concessions, and
other forms of agreement, however denominated, written or oral, granting the
right of use or occupancy of any portion of the Improvements (each, a "Lease"
and collectively, the "Leases"), to any retail tenant or other such party (a
"Tenant"), and all renewals, modifications, amendments, guarantees, and other
agreements affecting the same;
<PAGE> 4
1.5 All equipment, furnishings, materials, inventory, supplies and
other tangible personal property owned by the Transferors, to the extent the
same are placed or installed on or about any Parcel or the Improvements thereon
and used as part of or in connection therewith (collectively, the "Personal
Property"); and
1.6 All intangible personal property now owned by the Transferors
and used in connection with the Projects and not otherwise described in the
definition of Personal Property herein, including but not limited to any
"Warranties and Guaranties," "Licenses and Permits," and "Service Contracts,"
(as defined herein), agreements or other contract rights, security deposits,
prepaid rentals, service contracts, and maintenance agreements relating to the
Projects (collectively, the "Intangible Property"), other than those items of
Intangible Property that are listed on Schedule 3 and are expressly excluded
from the property being contributed to the Partnership. For purposes of this
Contribution Agreement, "Service Contracts" means all service, maintenance,
management, equipment leasing and other similar contracts to which the
Transferor is a party or by which the Transferor is bound which pertain to the
Project; "Licenses and Permits" means all certificates of occupancy, zoning,
building, safety and health approvals and all other permits used in connection
with the operation of the Improvements; and "Warranties and Guaranties" means
all unexpired warranties and guaranties in effect with respect to a Project or
any portion or component thereof.
2. Consideration. As consideration for Transferors' contribution of the
Projects to the Partnership, at the close of the Escrow described in Section
3.1 the Partnership shall (a) issue to each Transferor Units of the Partnership
as set forth in Schedule 2 and in the Partner Schedule for each Transferor, the
form of which is attached hereto as Exhibit "A", and (b) assume the Existing
Indebtedness (without affecting the non-recourse nature of such Existing
Indebtedness) with respect to each Project identified on Schedule 4, in each
case as set forth herein.
3. Delivery of Documents and Funds.
3.1 The parties have established an escrow (the "Escrow") with the
Escrow Agent identified in Schedule 2.
3.2 Concurrently with the execution and delivery of this
Contribution Agreement, the Partnership and the Transferors have executed,
acknowledged (where applicable) and delivered to the Escrow Agent the following
documents:
3.2.1 A counterpart original of this Contribution
Agreement;
3.2.2 A Grant Deed conveying to the Partnership fee simple
title to each Project (the "Deeds"), with separate statements of
documentary transfer taxes due, such that said documentary transfer
taxes will not be shown on the face of the Deeds;
3.2.3 An Assignment of Leases assigning to the Partnership
all Leases with respect to each Project (the "Assignments of Leases");
3.2.4 A Bill of Sale conveying to the Partnership all of
each Transferor's right, title, and interest in and to all Personal
Property and Intangible Property with respect to each Project, other
than the Intangible Property listed on Schedule 3;
2
<PAGE> 5
3.2.5 An Assignment of Contracts assigning to the
Partnership all Service Contracts which the Partnership has elected to
assume, and evidence acceptable to the Partnership that all Service
Contracts which the Partnership has elected not to assume have been
terminated, effective as of the close of Escrow;
3.2.6 An affidavit of each Transferor stating the
Transferor's United States taxpayer identification number and
certifying that the Transferor is not a foreign person as defined in
Internal Revenue Code Section 1445, and a California Form 590-RE (or
equivalent affidavit acceptable to the Partnership) executed by each
Transferor;
3.2.7 For each transferor, a "Partner Schedule" in the form
attached hereto as Exhibit "A" to be attached to the agreement of
limited partnership of the Partnership in connection with the issuance
of Units to such Transferor;
3.2.8 Certificates evidencing the issuance to each
Transferor of the number of Units of the Partnership set forth in
Schedule 2 attached hereto;
3.2.9 A Registration Rights Agreement and the supporting
documents contemplated thereby granting to each Transferor certain
registration rights with respect to stock that may be issued upon
redemption of the Units.
3.2.10 A Closing Statement for each Project setting forth
the proration of all items of income and expense with respect to such
Project through the close of Escrow;
3.2.11 Documentation whereby the Partnership agrees to
assume the Existing Indebtedness (without affecting the non-recourse
nature of such Existing Indebtedness) (the "Loan Assumption
Documentation");
3.2.12 Certified authorizing resolutions of each Transferor,
the Partnership and Excel Realty Trust, Inc., a Maryland corporation
(the "REIT"), approving this Contribution Agreement and the
transactions contemplated hereby and authorizing execution and
delivery of all documents required pursuant to this Contribution
Agreement, together with such other documents as the Transferors or
the Partnership may reasonably request concerning each Transferor's,
the Partnership's and the REIT's authority to complete the
transactions and execute the documents and instruments contemplated
hereby;
3.2.13 Affidavits establishing (i) that each Transferor and
each of their respective constituent partners is an "accredited
investor" as defined in Rule 501 of the General Rules and Regulations
promulgated under the Securities Act of 1933, as amended, and (ii)
each Transferor is receiving such Units for investment and not with a
view to distribution;
3.2.14 Certified copies of agreements, executed prior to the
date on which any required consent to the sale or other transfer of
all or substantially all of the assets of a Transferor is solicited
from the partners of any Transferor, whereby the Controlling Partner
of such Transferor obtained a written agreement, in form acceptable to
the Partnership, from each partner of the Transferor, if any, who is
not an "Accredited Investor," as defined in Rule 501 of the General
Rules and Regulations promulgated under the Securities Act of 1933, as
amended, whereby such Controlling Partner has purchased, for cash, the
interests of such partner(s) in the Transferor.
3
<PAGE> 6
3.2.15 Notices executed by the Transferor to each Tenant and
guarantor under the Leases notifying them of the transfers effected
hereunder;
3.2.16 A Rent Roll for each Project as of a date not more
than two (2) days prior to the date hereof certified by the Transferor
as true and complete;
3.2.17 An opinion of the Transferor's legal counsel in form
and substance acceptable to the Partnership opining (a) that all
transactions contemplated hereby have been duly authorized, (b) that
this Contribution Agreement and all documents contemplated hereby have
been duly executed and delivered by the Transferor, and (c) that the
Transferor has been duly organized and formed and is in good standing
in the state of its formation; and
3.2.18 An opinion of the Partnership's and the REIT's legal
counsel in form and substance acceptable to the Transferors opining
(a) that all transactions contemplated hereby have been duly
authorized, (b) that this Contribution Agreement and all documents
contemplated hereby have been duly executed and delivered by the
Partnership and the REIT as the case may be, and (c) that the
Partnership and the REIT have been duly organized and formed and are
in good standing in the states of their formation.
3.3 The Partnership shall immediately deposit with the Escrow
Agent immediately available funds in the amount of the Partnership's share of
closing costs as provided in the Closing Statement delivered pursuant to
Section 3.2.10.
3.4 Concurrently with the execution and delivery of this
Contribution Agreement (except as otherwise provided below), each Transferor
shall deliver, outside of the Escrow, the following documents to the
Partnership, to the extent the same are in the Transferor's possession or
control and have not previously been delivered to the Partnership:
3.4.1 All existing Warranties and Guaranties issued in
connection with the construction, improvement, alteration or repair of
the Improvements and in connection with the purchase or repair of any
Personal Property;
3.4.2 Originals of all estoppel certificates and consents
previously received from holders of Existing Indebtedness, from
Tenants and from Transferors.
3.4.3 All keys and entrance cards used on any part of the
Projects;
3.4.4 All marketing materials, brochures and other written
material used in connection with the marketing, leasing and/or
operation of the Projects;
3.4.5 Originals of all Leases (to be delivered within
thirty (30) days after the close of Escrow);
3.4.6 Copies of all books and records maintained by the
Transferor with respect to its Project.
4
<PAGE> 7
4. Close of Escrow.
4.1 WHEN AND ONLY WHEN each of the following conditions precedent
has been satisfied, Escrow Agent shall forthwith close the Escrow by (a) filing
for record the Deeds, the Assignment of Leases, the recordable Loan Assumption
Documents and such other documents as may be necessary to procure the Title
Policies, and (b) delivering funds and documents as set forth in Section 6:
4.1.1 All funds and documents required by Sections 3.2 and
3.3 have been delivered to Escrow Agent;
4.1.2 Escrow Agent has procured, or is committed to
procure, the Title Policies described below; and
4.1.3 Escrow Agent is prepared to comply with any
additional mutual closing instructions delivered by the Partnership
and the Transferors (or their respective legal counsel) that are not
inconsistent with the provisions of this Contribution Agreement.
4.2 Each Title Policy shall name the Partnership as insured, and
shall be in an amount equal to the sum of the Transferor's Equity in the
applicable Project, as set forth on Schedule 2, plus the principal amount of
any Existing Indebtedness with respect to such Project that is assumed at the
close of Escrow by the Partnership. Each Title Policy shall be an ALTA
extended coverage owner's policy with all of the Title Company's standard
exceptions (including creditors' rights) deleted, and shall insure the
Partnership's fee title to the applicable Parcel and Improvements, free and
clear from all liens, easements, rights-of-way, and other encumbrances except
only the exceptions approved by the Partnership. Each Title Policy shall
include the following American Land Title Association endorsements (unless the
same are not generally available in the jurisdiction where the Project is
located) and such additional endorsements as are reasonably required by the
Partnership:
(a) Assurance against loss from violations of any
Covenants, Conditions and Restrictions agreements or
similar matters which encumber any portion of the
Project;
(b) Assurance that the Parcels described in the
policy are contiguous parcels, if applicable;
(c) Assurance that the Improvements do not
encroach onto any easement;
(d) Assurance that each Parcel abuts on and has
access to a physically open street as identified in
the endorsements;
(e) Assurance that the insured Parcel is the same
Parcel that is shown on the Survey; and
(f) Assurance that any knowledge of the
Transferor with respect to the status of title to the
Project will not be imputed to the Partnership and
will not affect the Title Policies.
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4.3 If Escrow Agent cannot close the Escrow on or before the
Closing Deadline specified in Schedule 2, then it will, nevertheless, close the
Escrow when all conditions have been satisfied or waived, notwithstanding that
one or more of such conditions has not been timely performed, unless a notice
of termination has already been delivered to Escrow Agent by a party that is
not then in default under this Contribution Agreement. The right so to
terminate the Escrow and this Contribution Agreement shall be optional, not
mandatory. No delay in the giving of such notice shall affect the rights
hereunder of the party giving the same.
4.4 Escrow Agent shall have no liability or responsibility for
determining whether or not a party giving a notice of termination is or is not
in default hereunder. Within two working days after receipt of such notice
from one party, Escrow Agent shall deliver a copy of such notice to the other
party. Unless written objection to the termination of the Escrow is received
by Escrow Agent within three (3) business days after Escrow Agent delivers such
notice to the other party, (a) Escrow Agent shall forthwith terminate the
Escrow and return all funds, documents and other items held by it to the party
depositing same, except that Escrow Agent may retain such documents and other
items usually retained by escrow agents in accordance with standard escrow
termination procedures and practices, and (b) each party shall forthwith pay to
Escrow Agent one-half of Escrow Agent's reasonable escrow termination charges.
If written objection to the termination of the escrow is delivered to Escrow
Agent within such three (3) business day period, then Escrow Agent is
authorized to hold all funds, documents and other items delivered to it in
connection with the escrow and may, in Escrow Agent's sole discretion, take no
further action until otherwise directed, either by the parties' mutual written
instructions or final order of a court of competent jurisdiction.
4.5 Neither (a) the exercise of the right of termination, (b)
delay in the exercise of such right, nor (c) the return of funds, documents or
other items, shall affect the right of the party giving a notice of termination
to pursue legal remedies for the other party's breach of this Agreement
(including without limitation damages for the payment of all or any portion of
Escrow Agent's escrow termination charges). Nor shall (i) the giving of such
notice, (ii) the failure to object to termination of the Escrow, or (iii) the
return of funds, documents or other items affect the right of the other party
to pursue other legal remedies for the breach of the party who gives such
notice. In consideration of the rights granted to the Partnership pursuant to
this Contribution Agreement, and as a material part of Transferors'
consideration for entering into this Contribution Agreement, if either the
Transferors or the Partnership has elected to terminate this Contribution
Agreement in accordance with the provisions hereof, the Partnership hereby
waives any rights the Partnership may have to record a lis pendens against the
Projects pursuant to Section 405 of the California Code of Civil Procedure, or
any other provision or applicable law.
4.6 If the transactions contemplated by this Contribution
Agreement close in accordance with Section 4, the parties shall have no further
rights of termination or recision of this Contribution Agreement, except as
expressly provided in Section 14.20.
5. Prorations and Post-Closing Payments.
5.1 For each Project, rents, property taxes, assessments, tenant
security deposits and other refundable tenant deposits, utilities, and other
expenses and charges have been prorated by the parties as of the close of
Escrow. Such prorations (a) have been made on the basis of a 365-day year,
with the day on which the close of Escrow occurs considered to be for the
account of the Partnership, (b) are reflected on the Closing Statements for
each Project referred to in Section 3.2.10, and (c) have
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<PAGE> 9
resulted in an increase or decrease in the number of Units to be paid or issued
by the Partnership to each Transferor at the close of Escrow.
5.2 The Partnership shall be entitled to collect all rentals,
receipts and other revenues from the Projects which are delinquent as of the
close of Escrow or are due on or after the close of Escrow. When collected by
the Partnership, the Partnership shall remit to the Transferor (a) percentage
rent attributable to the period through and including the day prior to the date
on which the close of Escrow occurs, (b) delinquent rent and any other amount
which is paid pursuant to a written plan disclosed to and approved by the
Partnership prior to the close of Escrow, and (c) delinquent expense
reimbursements specifically identified by the Tenant as relating to periods
prior to the date on which the close of Escrow occurs. Any other rentals,
receipts, and other revenues collected by the Partnership which relate to the
period prior to the date on which the close of Escrow occurs shall be remitted
to the Transferor within thirty (30) days after their collection, except that
any such collections shall be applied first to the last accruing obligations of
the payors (including rent payable for periods after the close of Escrow).
Percentage rents attributable to the entire calendar year or lease year, as
applicable, in which the close of Escrow occurs shall be reprorated (effective
as of the close of Escrow) when all required sales reports have been submitted.
With respect to delinquent rentals and other income receivables and
reimbursements due from Tenants with respect to the period prior to the close
of Escrow (collectively, the "Delinquent Amounts"), the Partnership will make a
reasonable attempt to collect the same for the Transferors' benefit after the
close of Escrow in the usual course of the operation of the Project. Nothing
contained herein shall operate to require the Partnership to institute any
lawsuit or other collection procedure to collect such Delinquent Amounts.
During the three (3) month period after the close of Escrow (but only with the
reasonable consent of the Partnership) and during the period commencing three
(3) months after the close of Escrow and ending nine (9) months after the close
of Escrow (or, if later, ending six (6) months after the particular Delinquent
Amount becomes due), the Transferors shall have the right to commence legal
action for the collection of all Delinquent Amounts (but may sue Tenants only
to collect the monetary claim for such Delinquent Amounts). The Transferors
may pursue to conclusion any litigation commenced within said period. The
Partnership will cooperate with the Transferors in all reasonable efforts to
collect such Delinquent Amounts.
5.3 If any Transferor has appealed the amount of any real property
taxes or other ad valorem taxes charged in connection with its Project for the
fiscal year in which the close of Escrow occurs, then the cost and benefit of
such appeal shall be apportioned between the Partnership and the Transferor in
percentages equal to their proportionate tax and assessment liability for the
fiscal year in which the close of Escrow occurs; provided, however, that the
Partnership's liability for the cost of such appeal shall in no event exceed
any refund or credit to which the Partnership is entitled. The Partnership
shall cooperate with the Transferor, its attorneys and advisors, in processing
any pending tax appeal, provided that such cooperation is at no expense to the
Partnership.
5.4 Any prorations of items of income and expense that were not
subject to calculation in the Closing Statements referred to in Section 3.2.10
shall be calculated as soon as possible thereafter, and if necessary the number
of Units paid or issued to the Transferor shall be adjusted accordingly (at the
rate of $25.00 per Unit) following the close of Escrow.
5.5 The number of Units issued to each Transferor shall be reduced
(at the rate of $25.00 per Unit) to reflect the Partnership's agreement to pay
all assumption fees or other similar charges and expenses arising in connection
with the Partnership's assumption of the Existing Indebtedness.
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<PAGE> 10
6. Distribution of Funds and Documents.
6.1 All cash received hereunder by Escrow Agent shall be, until
the close of Escrow, kept on deposit with other escrow funds in Escrow Agent's
general escrow account(s), in any state or national bank, and may be
transferred to any other such general escrow account(s).
6.2 Any interest payable with respect to cash deposited with
Escrow Agent shall be for the account of the party that deposited the cash.
6.3 All disbursements by Escrow Agent shall be made by wire
transfer.
6.4 Escrow Agent shall cause the recorder's office to mail the
Deeds, the Assignments of Leases (and each other document which is herein
expressed to be, or by general usage is, recorded) after recordation, to the
grantee, beneficiary or person (a) acquiring rights under said document, or (b)
for whose benefit said document was acquired.
6.5 Escrow Agent shall, at the close of Escrow, deliver by United
States mail (or hold for personal pickup, if requested) each nonrecorded
document received hereunder by Escrow Agent, to the payee or person (a)
acquiring rights under said document, or (b) for whose benefit said document
was acquired.
7. Representations, Warranties and Covenants of the Transferors. Each
Transferor hereby represents, warrants and covenants the following to the
Partnership with respect to the Project it owns. Each Transferor acknowledges
that the execution of this Contribution Agreement by the Partnership has been
made and the acquisition by the Partnership of the Projects will have been made
in material reliance by the Partnership on such representations, warranties and
covenants. For purposes of this Section 7, the phrase "to the Transferor's
knowledge" or the like means the current actual knowledge of Kris Hoffman,
Brett A. Dargis, Richard N. Ellis, Charles L. Pridonoff, Denny Jacobus and/or
Albert B. Glickman, without any duty of inquiry or investigation. For purposes
of this Section 7, the phrase "received written notice" or the like means the
receipt of written notice by Kris Hoffman, Brett A. Dargis, Richard N. Ellis,
Charles L. Pridonoff, Denny Jacobus and/or Albert B. Glickman. To the extent
Transferor has delivered or made available to the Partnership copies of
documents and other written materials that contain information inconsistent
with or different from Transferor's representations and warranties made in this
Contribution Agreement, then such documents and/or other written materials
shall be deemed disclosed to the Partnership in writing and such
representations and warranties shall be deemed modified to conform them to the
information in such documents and written materials. If Richard B. Muir, Mark
T. Burton, David DeCoursey, Steve Farnsworth, Eric Isom, Eric Ottesen, Reed
Goodwin, Blaine Johnson, Chris Brown, Gary Sabin, Ron Sabin or Reed Hamilton
has current actual knowledge of any facts which would give rise to any breach
of a representation, warranty or covenant of a Transferor, or any defect or
inaccuracy of a representation or warranty of a Transferor, or other default by
Transferors prior to the close of Escrow but the Partnership nonetheless
chooses to proceed with the close of Escrow, then the Partnership will not have
any claim relating thereto.
7.1 The Transferor is (a) duly formed and validly existing under
the laws of its state of formation; and (b) duly authorized, qualified, and
licensed to do all things required of it under or in connection with this
Contribution Agreement.
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<PAGE> 11
7.2 This Contribution Agreement and all agreements, instruments,
and documents herein provided to be executed or to be caused to be executed by
the Transferor are (or will be) duly executed by and binding upon the
Transferor.
7.3 All consents and approvals required of the constituent
partners of the Transferor for the consummation of the transactions
contemplated hereby have been obtained.
7.4 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5, Transferor has received no written
notice of any material default or event which with the passage of time or the
giving of notice or both would constitute a material default by Transferor
under any existing Leases or Service Contracts where such claimed default is
still pending.
7.5 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5: (a) the Rent Roll delivered by
the Transferor pursuant to Section 3.2.16 is a true and correct list of all
Leases affecting the Project; (b) Transferor has provided to the Partnership
complete and accurate copies of all Leases, including all amendments thereto;
(c) the Leases have not been modified by any oral agreement of Transferor in
any material respect; (d) the Leases are in full force and effect; and (e) the
Tenants under the Leases are not in default in the payment of rent or otherwise
in material default.
7.6 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5, Transferor has not received
written notice from any insurance companies, governmental agencies or any other
person of any violation of laws, rules, regulations, ordinances, codes,
covenants, conditions, restrictions, or agreements applicable to the Project
that would have a materially adverse effect on the current operation of the
Project.
7.7 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5, Transferor has made available to
the Partnership complete copies of all written materials in Transferor's
possession or control regarding the presence, if any, of hazardous or toxic
materials or substances at the Project.
7.8 Transferor will pay all leasing commissions that are due and
payable with respect to the initial fixed term of Leases which have been
executed by all parties as of the close of Escrow. The Partnership will pay
commissions, if any, payable in connection with the extension or expansion of
any such Lease pursuant to an option exercised after the close of Escrow.
7.9 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5: (a) the schedule of Service
Contracts attached as Schedule 6 is true and complete in all material respects;
(b) Transferor has provided to the Partnership complete and accurate copies of
all such Service Contracts, including all amendments thereto; (c) the Service
Contracts have not been modified by any oral agreement of Transferor in any
material respect; and (d) such Service Contracts are in full force and effect.
7.10 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5, Transferor has not received
written notice of any default under any existing lien encumbering the Project
where such default is material to the ownership or normal operation of the
Project and where such claimed default is still pending.
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<PAGE> 12
7.11 To Transferor's knowledge, except as otherwise disclosed to
the Partnership in writing or in Schedule 5, Transferor has not received
written notice of any material existing, pending or threatened litigation,
claims, or condemnation or sales in lieu thereof with respect to the Project,
including without limitation with respect to any claims threatened or asserted
by existing limited partners of the Partnership, and Transferor is not a party
to any contract of sale, option to purchase or rights of first refusal with
respect to the Project.
7.12 The Transferor's execution and delivery of this Contribution
Agreement, and the consummation of the transactions contemplated hereby, will
not conflict with or result in (a) a breach of any of the provisions of the
Transferor's partnership agreement or other organizational documents, or (b) a
breach or acceleration of the maturity of any loan or credit agreement to which
the Transferor is a party or by which any of its assets may be affected
(subject to the requirement that lender consents be obtained with respect to
the Partnership's assumption of the Existing Indebtedness).
7.13 The Transferor is not the subject of any dissolution
proceedings or any voluntary or involuntary case under the federal bankruptcy
laws or any other similar federal or state insolvency law, and no receiver,
trustee, assignee for the benefit of creditors or other similar official has
been appointed with respect to the Transferor or any of its assets.
7.14 The Transferor, and each of its constituent partners, have
received and reviewed the most current Prospectus of the REIT and the
Registration Statement, as amended, of which the Prospectus is a part, filed
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended (the "Act") and have had access to such additional financial and
other information, including without limitation the REIT's most current Form
10-Q and Form 10-K, and have been afforded the opportunity to ask questions of
representatives of the Partnership and the REIT, and to receive answers to
those questions, as they have deemed necessary in connection with the
Transferor's acquisition of the Units being issued to such Transferor pursuant
to this Contribution Agreement.
7.15 The Transferor acknowledges that the Units being acquired
pursuant hereto are being acquired in a transaction not involving any public
offering within the meaning of the Act and that the Units have not been
registered under the Act and agrees not to offer, sell, transfer or otherwise
dispose of the Units (or the Common Stock issuable by the REIT to acquire Units
that may be tendered to the Partnership for redemption) in the absence of
registration under the Act unless the Transferor delivers to the Partnership
and the REIT an opinion of a lawyer reasonably satisfactory to the Partnership
and the REIT, in form and substance satisfactory to the Partnership and the
REIT, to the effect that the proposed sale, transfer or other disposition may
be effected without registration under the Act and under applicable state
securities or blue sky laws. The Transferor acknowledges that the Units will
be in the form of physical certificates and will bear a legend to the following
effect:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO
THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY
SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER
DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND
UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
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7.16 There are no existing unrecorded deeds, land contracts,
mortgages, options to purchase, agreements or other instruments adversely
affecting title to the Property (other than the Leases and other matters that
have been disclosed to the Partnership in writing); and neither the Transferor
nor its constituent partners have done anything to create any lien,
encumbrance, transfer of interest, creation of constructive trust, or other
equity in the Project whatsoever, except as set forth in the Leases and as
otherwise disclosed to the Partnership.
7.17 There is no outstanding right whatsoever (including unrecorded
deeds, demands or equities) in any person to the possession of the Project
(except for the rights of Tenants under the Leases); nor any outstanding right,
title, interest, lien or estate, existing or being asserted in or to the
Project except such as are disclosed by the public records of the county in
which the Project is located, except, in each case, as disclosed to the
Partnership.
7.18 There are no judgments or decrees or any orders of any court
or officer for the payment of money against the Transferor, in any of the
courts or before an officer of the United States, or any suit or proceeding now
pending anywhere affecting the Transferor or the Project, except to the extent
that judgments in pending suits would entitle the holder thereof to general
exclusion. No proceeding in bankruptcy has ever been instituted by or against
the Transferor and the Transferor has never made an assignment for the benefit
of creditors, nor is an assignment now in effect of the rents of the Project
(except in connection with the Existing Indebtedness), except, in each case, as
disclosed to the Partnership.
7.19 The Transferor has sufficient assets, excluding the value of
the Project, to satisfy all unrecorded debts, demands or equities created,
suffered or permitted by the Transferor and the contribution of the Project to
the Partnership will not render the Transferor insolvent, nor is the
contribution of the Project to the Partnership in fraud of creditors under the
bankruptcy laws of the United States or the laws of the state in which the
Project is located.
7.20 The Transferor represents and warrants that (a) it and, to
Transferor's knowledge based solely upon certifications executed by each of its
constituent partners, each of its constituent partners (other than constituent
partners, if any, whose interests in the Transferor are being purchased for
cash as provided in Section 3.2.14) has such knowledge and experience in
financial and business matters that they are capable of evaluating the merits
and risks of an acquisition of the Units and are able to bear the economic risk
of a loss of an investment in the Units, and (b) although the Transferors may
elect to transfer the Units to their respective constituent partners who are
accredited investors in connection with the dissolution of the Transferors
(subject to the provisions of Section 14.20), they are not acquiring any Units
with a view to the distribution of the Units or any present intention of
offering or selling any of the Units in a transaction that would violate the
Act or the securities laws of any State or any other applicable jurisdiction.
8. Representations and Warranties of the Partnership. The Partnership
hereby represents and warrants the following to the Transferors. The
Partnership acknowledges that the execution of this Contribution Agreement by
the Transferors has been made, and the transfer by Transferor of the Projects
will have been made, in material reliance by the Transferors on such
representations and warranties:
8.1 The Partnership is (a) duly formed and validly existing under
the laws of its state of formation, and (b) duly authorized, qualified and
licensed to do all things required of it under or in connection with this
Contribution Agreement.
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<PAGE> 14
8.2 This Contribution Agreement and all agreements, instruments
and documents herein provided to be executed or to be caused to be executed by
the Partnership are (or will be) duly executed by and binding upon the
Partnership.
8.3 Except as set forth in the Partnership Agreement of the
Partnership, as amended, and subject to federal and state securities laws, none
of the Units to be delivered to the Transferors at the close of Escrow, when
delivered to the Transferors, will be subject to any lien, claim, encumbrance,
preemption right or other claim of any third party.
8.4 All consents and approvals required of the constituent
partners of the Partnership for the consummation of the transactions
contemplated hereby have been obtained.
8.5 To the Partnership's knowledge, except as otherwise disclosed
to the Transferors in writing, the Partnership has not received written notice
of any material existing, pending or threatened litigation or claims that would
have a material adverse effect on the business and operations of the
Partnership, including without limitation with respect to any claims threatened
or asserted by existing limited partners of the Partnership.
8.6 The Partnership's execution and delivery of this Contribution
Agreement, and the consummation of the transactions contemplated hereby, will
not conflict with or result in (a) a breach of any of the provisions of the
Partnership's partnership agreement or other organizational documents, or (b) a
breach or acceleration of the maturity of any loan or credit agreement to which
the Partnership is a party or by which any of its assets may be affected.
8.7 The Partnership is not the subject of any dissolution
proceedings or any voluntary or involuntary case under the federal bankruptcy
laws or any other similar federal or state insolvency law, and no receiver,
trustee, assignee for the benefit of creditors or other similar official has
been appointed with respect to the Partnership or any of its assets.
8.8 As of the Date of this Contribution Agreement, there are not
more than One Million (1,000,000) Units issued and outstanding (exclusive of
Units to be issued to the Transferors as provided herein), none of which have
any special voting rights or privileges not set forth in the Partnership
Agreement of the Partnership.
8.9 The approval and adoption of the amended and restated
partnership agreement described in Section 14.20 by the Partnership will not
conflict with or result in a breach of any agreement to which the Partnership
or the general partner of the Partnership is a party or by which any of their
assets may be affected, or conflict with or violate the organizational
documents of the Partnership or the general partner of the Partnership. The
approval and adoption of the amended and restated partnership agreement
described in Section 14.20 by the Partnership does not require the consent of
any other person or entity (other than the general partner of the Partnership
and the Transferors as contemplated pursuant to Section 14.20) in order to make
such amended and restated partnership agreement effective.
9. Parties' Obligation to Close. Neither the Transferors nor the
Partnership shall be obligated to complete the transactions contemplated
hereunder unless the other shall have performed in all material respects all
covenants and obligations and complied in all material respects with all
conditions required by this Contribution Agreement to be performed or complied
with by it on or before the Closing Deadline.
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<PAGE> 15
10. Brokerage Commissions. Except for the broker or finder identified in
Schedule 2, whose commission, if any, shall be paid by the Partnership, each
party hereto warrants and represents that it has not incurred any liability for
the payment of any brokerage fee or commission in connection with the
transaction contemplated herein, and agrees to protect, indemnify, and defend
against the other party and hold the other party harmless from and against any
damage, liability, loss, claim, or expense, including reasonable attorneys'
fees, suffered by the other party as a result of a breach of the foregoing
warranty.
11. Time of Essence. Time is of the essence of this Contribution
Agreement.
12. Pre-Closing and Post-Closing Liabilities.
12.1 Contractual Obligations to Third Parties. The Partnership is
not assuming any of the contractual obligations or liabilities incurred by a
Transferor in the ownership, lease, use, operation, service, or maintenance of
the Projects, except for contractual obligations arising with respect to
periods of time from and after the close of Escrow under (a) those Service
Contracts which the Partnership has expressly elected to assume in writing, (b)
the Leases, and (c) any Existing Indebtedness which the Partnership assumes as
provided herein. Except as otherwise provided in Sections 12.2 and 12.3, the
Partnership's assumption of said Leases, Service Contracts and Existing
Indebtedness shall not constitute an assumption of any contractual liabilities
arising thereunder with respect to periods of time prior to the close of
Escrow, or the assumption of any contractual obligations to third parties which
have or may have claims of any kind whatsoever against the Transferors arising
out of any agreement not expressly assumed by the Partnership. No person not a
party to this Contribution Agreement shall have any third-party-beneficiary or
other rights hereunder.
12.2 Physical Condition and Legal Compliance of the Project.
Subject to the representations, warranties and covenants of the Transferors set
forth in Article 7 of this Contribution Agreement, and without limiting the
provisions of Section 12.3, the Projects are being transferred in an "AS IS"
condition and on a "WHERE IS AND WITH ALL FAULTS" basis as of the close of
Escrow. By closing the Escrow, the Partnership will assume the risk of, and
liability associated with, (a) the condition of the Projects, including but not
limited to known or unknown defects in the structural or other physical
condition of the Projects, and/or (b) the compliance of the Projects, or lack
of compliance, with any law or regulation applicable thereto and all
ordinances, rules, regulations, rulings and orders promulgated or adopted
pursuant thereto. The Partnership acknowledges that, except as specifically
set forth in this Contribution Agreement, no representations or warranties have
been made or are made and no responsibility has been or is assumed by the
Transferors or by any member, partner, officer, person, firm, agent or
representative acting or purporting to act on behalf of the Transferors as to
the condition or repair of the Projects, including without limitation as to the
environmental condition of, on, under or around the Parcels, as to the
compliance of the Projects with applicable laws, codes, ordinances, rules or
regulations affecting the Projects including, without limitation, laws, codes,
ordinances, rules or regulations relating to fire or life safety, or access by
disabled persons, as to requirements relating to leasing, zoning, subdivision,
planning, building, safety, health, Hazardous Materials (as defined below) or
environmental matters, as to the value, expense of operation, or income
potential thereof or as to any other fact or condition which has or might
affect the Projects or the condition, repair, value, expense of operation or
income potential of the Projects or any portion thereof. The parties agree
that all understandings and agreements heretofore made between them or their
respective agents or representatives are merged in this Contribution Agreement
and the Schedules and Exhibits hereto annexed, which alone fully and completely
express their agreement. Further, to the extent the Transferors have provided
the Partnership information from any inspection, engineering or
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<PAGE> 16
environmental reports, whether prepared by third party consultants or by the
Transferors, concerning the condition of the Projects, the Transferors make no
representations or warranties with respect to the accuracy or completeness of
the same or otherwise concerning the contents of such reports. The Partnership
acknowledges that, the Transferors have requested the Partnership to inspect
fully the Projects and all portions thereof and, except as expressly set forth
herein, to rely solely upon the results of the Partnership's own inspections or
other information obtained or otherwise available to the Partnership, rather
than any information that may have been provided by the Transferors. The
Partnership further acknowledges, therefore, that, subject to the express
representations and warranties of the Transferors as set forth herein, the
Partnership is relying solely on its own due diligence and investigation of the
Projects in determining to purchase the Projects. In entering into this
Contribution Agreement, the Partnership is not relying on any representations
or warranties from the Transferors of any nature whatsoever, except as
expressly set forth herein. The Partnership is a sophisticated investor in
real estate and has been represented by competent counsel in entering into this
Contribution Agreement. Accordingly, the Partnership's execution of this
Contribution Agreement shall constitute the Partnership's acknowledgment that
the Partnership has considered, inspected and reviewed to the Partnership's
satisfaction all physical, environmental, economic and legal aspects and
conditions of the Projects and that the Partnership is acquiring its interest
in the Projects on the basis of its evaluation, without the benefit of any
representation or warranty from the Transferors except as expressly set forth
in this Contribution Agreement.
12.3 Hazardous Materials and Environmental Laws. The Partnership
acknowledges the existence of certain Hazardous Materials contamination at, in,
under or around several of the Projects, consisting variously of soil and/or
groundwater contamination and/or the presence of asbestos containing materials,
in each case as identified by reports prepared by the Partnership's consultants
(the "Identified Contamination"). The consideration to be paid by the
Partnership for the Transferors' contribution of the Projects to the
Partnership, as set forth herein, in the Closing Statements delivered pursuant
to Section 3.2.10 and in the Partner Schedules, has been adjusted to reflect
the existence of the Identified Contamination. The Partnership and the
Transferors intend that said adjustment in the consideration to be paid by the
Partnership constitute a full and final adjustment, as between the Partnership
and the Transferors, relating to the existence of all (i) Hazardous Materials
and other environmental contamination, and (ii) violations of all Environmental
Laws (as hereinafter defined), in each case at, in, under or around the
Projects, including without limitation the Identified Contamination.
Accordingly, in the event the transactions contemplated by this Contribution
Agreement close, and subject to Transferors' representations and warranties
contained in this Contribution Agreement, the Partnership hereby (a) waives its
right to recover from and fully and irrevocably releases the Transferors and
their constituent partners (individually and collectively, the "Released
Parties") from any and all claims that the Partnership may now have or
hereafter acquire against any of the Released Parties arising from or related
to the existence of any (1) Hazardous Materials or other environmental
contamination, and (2) violations of all Environmental Laws, in each case at,
in, under or around the Projects as of the close of Escrow, including without
limitation the Identified Contamination (all of the foregoing claims described
in this clause (a) are collectively defined as the "Released Claims"), and (b)
agrees not to bring any action against the Released Parties based on any
federal, state or local statutory or common law grounds relating to the
Released Claims, including without limitation any action seeking contribution
or indemnity with respect to liabilities incurred by the Partnership on account
of Released Claims as a result of actions initiated against the Partnership by
third parties (other than the Released Parties), to the extent that said action
is not based on fraud or the breach of any express representation or warranty
of the said Transferors hereunder. For purposes of this Agreement, the term
"Hazardous Materials" means "hazardous substances," "hazardous waste,"
"hazardous materials," "toxic substances," "contamination" and/or "pollution"
giving those terms the broadest meaning as accorded by statutes,
14
<PAGE> 17
regulations and court decisions in the jurisdiction in which the Project is
located. Without limiting the generality of the foregoing, the definition of
"Hazardous Materials" shall include those definitions found in the National
Environmental Policy Act, 42 U.S.C. Section 4321 et seq., the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., the Emergency Planning and Community Right to Know Act of
1986, 42 U.S.C. Section 11001, the Hazardous Materials Transportation
Authorization Act, 49 U.S.C. Section 5101 et seq., the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., the Clean Water Act, 33 U.S.C. Section
1251 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq., the Occupational Safety and
Health Act, 29 U.S.C. Section 651 et seq., the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et seq., Division 20 of the
California Health and Safety Code commencing at Section 24000, Division 7 of
the California Water Code commencing at Section 13000, each as amended from
time to time, and all similar federal, state and local statutes and ordinances
and all rules, regulations or policies promulgated thereunder (collectively
referred to herein as the "Environmental Laws"). Hazardous Materials shall
include, without limitation, flammables, explosives, radioactive and/or
reactive materials, infectious substances, sharps, asbestos (whether friable or
non-friable), PCB's and all petroleum products and the fractions thereof.
12.4 Tort Liabilities. In the event the transactions contemplated
by this Contribution Agreement close, the Partnership shall be liable for all
liabilities and obligations relating to the Projects which arise from events,
acts or failures to act occurring following the close of Escrow. Except as
otherwise provided in Sections 12.1 through 12.3 and Section 12.5, the
Transferor's shall be liable for all liabilities and obligations relating to
the Projects which arise from events, acts or failures to act occurring prior
to the close of Escrow.
12.5 Claims for Indemnification. The Partnership shall indemnify,
protect, defend with counsel reasonably satisfactory to the Transferors, and
hold harmless, the Transferors, their partners and their affiliates from and
against any and all liabilities and obligations assumed by or allocated to the
Partnership, or from which the Transferors are released, as provided in
Sections 12.1 through 12.4 (including all losses, costs, expenses, claims,
liens, damages and attorneys' and consultants' fees and costs related to said
liabilities and obligations). The Transferor's shall indemnify, protect,
defend with counsel reasonably satisfactory to the Partnership, and hold
harmless, the Partnership, its partners and affiliates from and against any and
all liabilities and obligations retained by or allocated to the Transferors as
provided in Sections 12.1 through 12.4 (including all losses, costs, expenses,
claims, liens, damages and attorneys' and consultants' fees and costs related
to said liabilities and obligations). Whenever any claim shall arise for
indemnification under this Section 12.5, the party making the claim
("Indemnitee") shall promptly notify the other party ("Indemnitor") of the
claim and, when known, the facts constituting the basis for such claim. In the
event of any claim for indemnification hereunder resulting from or in
connection with any claim or legal proceedings by a party who is not a party to
this Contribution Agreement, the notice to the Indemnitor shall specify, if
known, the amount or an estimate of the amount of the liability arising
therefrom. However, a failure to notify or to give notice as hereinabove set
forth to the Indemnitor shall in no case prejudice the rights of Indemnitee
under this Contribution Agreement unless the Indemnitor shall be prejudiced by
such failure and then only to the extent the Indemnitor shall be prejudiced by
such failure. Indemnitee shall not settle or compromise any claim by a third
party for which it is entitled to indemnification hereunder, without the prior
written consent of the Indemnitor (which shall not be unreasonably withheld)
unless suit shall have been instituted against Indemnitee and the Indemnitor
shall not have taken control of such suit after notification thereof.
15
<PAGE> 18
12.6 Defense by the Indemnitor. In connection with any claim
giving rise to indemnity under this Contribution Agreement resulting from or
arising out of any claim or legal proceeding by a party who is not a party to
this Contribution Agreement, the Indemnitor at its sole cost and expense shall
assume the defense of any such claim or legal proceeding. Indemnitee shall be
entitled to participate in (but not control) the defense of any such action,
with separate counsel and at its own expense.
12.7 Manner of Indemnification. All indemnification under this
Contribution Agreement requiring a payment to Indemnitee by the Indemnitor
shall be effected by payment of cash or other immediately available funds in
the amount of the indemnification liability. In connection with the indemnity
contained in this Contribution Agreement, the Indemnitee shall be entitled only
to compensatory damages (excluding consequential damages) from the Indemnitor,
and Indemnitee hereby waives any right to recover from the Indemnitor, at law
or in equity, any consequential, indirect, exemplary or punitive damages, loss
of profits, or similar types of damages incurred by Indemnitee (except for
payment or reimbursement of consequential, indirect, exemplary or punitive
damages, loss of profits, or similar types of damages that were incurred by
Indemnitee to third parties in connection with the claim giving rise to
indemnification).
12.8 Release. With respect to the provisions of Section 12.3, the
Partnership expressly waives all rights under California Civil Code Section
1542, which provides:
"A general release does not extent 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."
13. Casualty.
13.1 If, prior to the close of Escrow, any Project is destroyed or
damaged, and if the cost to repair the damage exceeds $50,000, then the
Partnership, at its option, may deliver to the Transferors a notice terminating
or rescinding this Contribution Agreement. An election by the Partnership to
terminate or rescind this Contribution Agreement as herein provided shall be
deemed an election to terminate all other agreements between the parties and/or
their affiliates (and vice versa), including but not limited to the
transactions related to certain Master Leases and Purchase and Sale Agreements
dated concurrently herewith concerning properties owned by persons other than
Transferors (but affiliated therewith). If under such circumstances the
Partnership does not elect to terminate or rescind this Contribution Agreement,
or if the cost to repair the damage does not exceed $50,000, then at the close
of Escrow the Transferor shall assign, transfer, and set over to the
Partnership all of the right, title, and interest of the Transferor in and to
any insurance proceeds resulting from any casualty.
13.2 If the Partnership does elect, prior to the close of Escrow,
to terminate this Contribution Agreement pursuant to Section 13.1, then the
Escrow Agent shall return all funds, documents and other items held by it to
the party depositing same, except that Escrow Agent may retain such documents
and other items usually retained by escrow agents in accordance with standard
escrow termination procedures and practices, and each party shall forthwith pay
to Escrow Agent one-half of Escrow Agent's reasonable escrow termination
charges.
16
<PAGE> 19
14. Miscellaneous.
14.1 Notices. Except for written notices given and other written
materials delivered by regular mail and received prior to the close of Escrow,
any notice required or permitted to be given under this Contribution Agreement
shall be in writing and shall be deemed to have been given (a) when delivered
by hand, (b) on the date delivered by a courier service, (c) upon receipt after
mailing by registered or certified mail, postage prepaid, return receipt
required, in any case addressed as set forth in Schedule 2, or (d) upon
electronically confirmed receipt when delivered by facsimile (if such facsimile
notice is confirmed by one of the other allowable means).
14.2 Successors and Assigns. This Contribution Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns.
14.3 Amendments and Termination. This Contribution Agreement may
be amended, modified or terminated only by a written instrument executed by the
Transferors and the Partnership.
14.4 Governing Law. This Contribution Agreement shall be governed
by and construed in accordance with the laws of the state of California.
14.5 Merger of Prior Agreements. This Contribution Agreement
supersedes all prior agreements and understandings between the parties hereto
relating to the subject matter hereof. The parties do not intend to confer any
benefit on any person, firm, or corporation other than the parties to this
Contribution Agreement, except as and to the extent otherwise expressly
provided herein.
14.6 Attorney Fees. In the event any party hereto fails to perform
any of its obligations under this Contribution Agreement or in the event a
dispute arises concerning the meaning or interpretation of any provision of
this Contribution Agreement, the defaulting party or the party not prevailing
in such dispute, as the case may be, shall pay any and all reasonable costs and
expenses incurred by the other party in enforcing or establishing its rights
hereunder, including, without limitation, court costs and reasonable attorneys'
fees.
14.7 Captions. The section titles or captions in this Contribution
Agreement are for convenience only and shall not be deemed to be part of this
Contribution Agreement.
14.8 Pronouns; Joint and Several Use of Certain Terms. All
pronouns and any variations of pronouns shall be deemed to refer to the
masculine, feminine, or neuter, singular or plural, as the identity of the
parties may require. Whenever the terms referred to herein are singular, the
same shall be deemed to mean the plural, as the context indicates, and vice
versa.
14.9 Waivers. No right under this Contribution Agreement may be
waived except by written instrument executed by the party waiving such right.
No waiver of any breach of any provision contained in this Contribution
Agreement shall be deemed a waiver of any preceding or succeeding breach of
that provision or of any other provision contained in this Contribution
Agreement. No extension of time for performance or any obligations or acts
shall be deemed an extension of the time for performance of any other
obligations or acts.
14.10 Severability. If any term, covenant, condition, or provision
of this Contribution Agreement or the application thereof to any person or
circumstance shall, at any time or to any extent, be invalid or unenforceable,
the remainder of this Contribution Agreement, or the application of such
17
<PAGE> 20
term or provision to persons or circumstances other than those to which it is
held invalid or unenforceable, shall not be affected thereby, and each
provision of this Contribution Agreement shall be valid and shall be enforced
to the fullest extent permitted by law.
14.11 Counterparts. This Contribution Agreement may be executed in
any number of identical counterparts.
14.12 Calculation of Time Periods. If any date herein set forth for
the performance of any obligation by a Transferor or the Partnership or for the
delivery of any instrument or notice herein provided should be a Saturday,
Sunday, or legal holiday, such performance or delivery may be made on the next
business day following such Saturday, Sunday, or legal holiday. As used
herein, the term "legal holiday," means any state or federal holiday for which
financial institutions or post offices are closed in the local jurisdiction in
which the Property is located, for observance thereof.
14.13 Judicial Interpretation. Should any provision of this
Contribution Agreement require judicial interpretation, it is agreed that a
court interpreting or construing the same shall not apply a presumption that
the terms hereof shall be more strictly construed against any party by reason
of the rule of construction that a document is to be construed more strictly
against the party who itself or through its agent prepared the same.
14.14 Survival. The representations and warranties of the parties
set forth in Sections 7 and 8 hereof, and all other representations and
warranties set forth in this Agreement, shall survive the close of Escrow for a
period of twelve (12) months. The Transferors and the Partnership shall have
the right to bring an action with respect to a breach of the representations
and warranties only if the Transferor or the Partnership, as the case may be,
has given the party against whom recovery is sought hereunder (the party
seeking to bring an action being the "warrantee") written notice within such
twelve (12) month period in accordance with the provisions of this paragraph.
Any such notice shall include a description of the circumstances giving rise to
the alleged breach, an estimate of the alleged damage incurred by the warrantee
with respect thereto, and a description of the action requested to cure such
breach. All covenants and other provisions set forth in this Agreement,
including but not limited to the obligations set forth in Section 12 hereof,
shall survive the close of Escrow without limitation except as provided by law.
14.15 Schedules and Exhibits. The schedules and exhibits attached
hereto are incorporated herein and made a part hereof by reference. To the
extent any schedule attached hereto conflicts with any provision of this
Contribution Agreement, the schedule shall control.
14.16 Further Assurances. The Partnership and the Transferors each
shall execute and deliver such further escrow instructions or other instruments
as may be reasonably requested by the other party or by Escrow Agent from time
to time, so long as the same are consistent with this Contribution Agreement.
If there is any inconsistency between Escrow Agent's general provisions and any
of the provisions of this Contribution Agreement, the provisions of this
Contribution Agreement shall control. Escrow Agent shall not be concerned,
liable or responsible for any representations, warranties or indemnities as
between the Partnership and the Transferors. For purposes of complying with
Internal Revenue Code Section 6045(e), as amended effective January 1, 1991,
Escrow Agent is hereby designated as the "person responsible" and the
"reporting person" for purposes of filing any information returns with the
Internal Revenue Service concerning this transaction, as may be required by
law.
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<PAGE> 21
14.17 Several Obligations. Each Transferor is entering into this
Contribution Agreement only on its own behalf. The Partnership acknowledges
and agrees that there is no joint and several liability of or among the
Transferors, and that each Transferor warrants, represents, covenants, and
agrees, as set forth herein, only on its own behalf, and only with respect to
the Project owned by such Transferor. The liability of each Transferor shall
only be for such warranties, representations, covenants, agreements, and other
matters set forth herein as relate to such Transferor and the Project owned by
such Transferor, and the liability of each such Transferor hereunder shall not
extend to the assets of any of the other Transferors.
14.18 Limitation on Transferor's Liability. Notwithstanding
anything to the contrary contained in this Contribution Agreement, its
schedules or exhibits, or any other agreement contemplated thereby, to the
extent any constituent partner of any Transferor has personal liability to the
Partnership for the obligations of such Transferor to the Partnership, such
personal liability shall be limited to the lesser of (a) the sum of such
partner's pro rata share of the dollar value of all Units and cash issued or
paid to such Transferor by the Partnership plus the dollar value of all Units
and cash issued or paid to such partner by the Partnership, or (b) the sum of
the total dollar value of all Units and cash distributed to such partner by
such Transferor following the close of Escrow plus the dollar value of all
Units and cash issued or paid to such partner by the Partnership.
14.19 Limitation on Damages. Each party ("Claimant") shall be
entitled only to compensatory damages (excluding consequential damages) for any
liability arising out of the transaction contemplated by this Contribution
Agreement, including but not limited to liabilities arising out of the other
party's breach of a representation, warranty or covenant set forth in this
Contribution Agreement and/or any document or agreement entered into pursuant
to this Contribution Agreement. In no event shall any party be liable at law
or in equity to the Claimant for the Claimant's consequential, indirect,
exemplary or punitive damages, loss of profits, or similar types of damages
arising from such party's breach of any representation, warranty or covenant
set forth in this Contribution Agreement and/or any document or agreement
entered into pursuant to this Contribution Agreement (except for consequential,
indirect, exemplary or punitive damages, loss of profits or similar types of
damages that were incurred by Claimant to third parties).
14.20 Partnership Amendment. The REIT and the Transferors have
agreed to an amended and restated partnership agreement of the Partnership, the
form of which is attached hereto as Exhibit "B," which shall be submitted to
all of the partners of the Partnership for approval promptly following the
close of Escrow. Immediately following the close of Escrow, the REIT and the
Transferors will vote to approve said amended and restated partnership
agreement and the REIT will recommend to the limited partners of the
Partnership that such limited partners vote to approve said amended and
restated partnership agreement, and the Transferors will not transfer Units to
their respective constituent partners prior to the approval of said amended and
restated partnership agreement. In the event that said amended and restated
partnership agreement is not approved by the requisite vote of the partners of
the Partnership (including the Transferors) within ten (10) days following the
close of Escrow, then the Transferors may elect to rescind this Contribution
Agreement and all other agreements between the parties and their affiliates,
including but not limited to certain Master Leases and Purchase and Sale
Agreements dated concurrently herewith concerning properties owned by persons
other than Transferors (but affiliated therewith), and all transactions
contemplated hereby and thereby, by written notice delivered to the Partnership
within ten (10) days following the expiration of said ten (10) day period.
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<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have duly executed this
Contribution Agreement as of the date first above written.
THE PARTNERSHIP: EXCEL REALTY PARTNERS, L.P.,
a Delaware limited partnership
By: EXCEL REALTY TRUST, INC.,
a Maryland corporation, its general
partner
By:
----------------------------------
Name: Richard B. Muir
Title: Executive Vice President
TRANSFERORS: BRIGGSMORE PLAZA CO.,
a California general partnership
By: Albert B. Glickman, its general partner
By:
----------------------------------
Richard N. Ellis, his
attorney-in-fact
G&H ASSOCIATES
a California general partnership
By: Albert B. Glickman, its general
partner
By:
-------------------------------
Richard N. Ellis, his
attorney-in-fact
MONTEBELLO PLAZA CO.,
a California general partnership
By: Albert B. Glickman, its general
partner
By:
-------------------------------
Richard N. Ellis, his
attorney-in-fact
20
<PAGE> 23
PARADISE PLAZA CO.,
a California general partnership
By: Albert B. Glickman, its general partner
By:
-------------------------------
Richard N. Ellis, his
attorney-in-fact
CONSENT OF ESCROW AGENT
The undersigned hereby consents to its appointment as the "Escrow Agent" under
the foregoing Contribution Agreement and agrees to act in accordance therewith.
Dated:__________________________________
LAWYER'S TITLE INSURANCE COMPANY
By: ____________________________________
Name: __________________________________
Title:__________________________________
21
<PAGE> 24
SCHEDULE "1"
LIST OF THE PROJECTS
PART I
<TABLE>
<CAPTION>
CAPITALIZATION
TRANSFEROR PROJECT CITY/STATE RATE*
---------- ------- ---------- --------------
<S> <C> <C> <C> <C>
1. Briggsmore Plaza Co., a California general partnership Briggsmore Plaza Modesto, CA 0.110
2. G&H Associates, a California general partnership Kietzke Center Reno, NV 0.105
3. Montebello Plaza Co., a California general partnership Montebello Plaza Montebello, CA 0.105
4. Paradise Plaza Co., a California general partnership Paradise Plaza Paradise, CA 0.120
</TABLE>
PART II
LEGAL DESCRIPTION OF THE PROJECTS
___________
* For purposes of Section 1.12.4 of Schedule 2 only.
1
<PAGE> 25
SCHEDULE "2"
FUNDAMENTAL PROVISIONS AND DEFINITIONS
The following fundamental provisions and definitions form a part of and are
incorporated by reference into the Contribution Agreement between Excel Realty
Partners, L.P., a Delaware limited partnership, and each of the Transferors
identified in Section 1.2, below, to which it is attached. In the event of any
conflict between the terms and conditions of this Schedule and the terms and
conditions of the balance of the Contribution Agreement to which it is
attached, the terms and conditions of this Schedule shall control.
1. Fundamental Provisions and Definitions.
1.1 Date of this Contribution Agreement: June 20, 1997.
1.2 Transferors: Each of the partnerships identified in Schedule
"1."
1.3 The Partnership: Excel Realty Partners, L.P., a Delaware
limited partnership.
1.4 Controlling Partner: Albert B. Glickman.
1.5 Escrow Agent and Title Company: Lawyer's Title Insurance
Company.
1.6 Closing Deadline: July 1, 1997.
1.7 Existing Indebtedness: The existing, non-recourse loans
secured by liens encumbering the Projects and listed in
Schedule "4."
1.8 Address for Notices to the Transferors:
c/o Albert B. Glickman & Associates
9864 Wilshire Boulevard
Beverly Hills, California 90210-3115
Attn: General Counsel
With a copy to:
Cox, Castle & Nicholson, LLP
2049 Century Park East, 28th Floor
Los Angeles, California 90067-3284
Attn: Samuel H. Gruenbaum, Esq.
1.9 Address for Notices to the Partnership:
Excel Realty Partners, L.P.
16955 Via Del Campo, Suite 110
San Diego, California 92127
Attn: General Counsel
1
<PAGE> 26
With a Copy to:
Latham & Watkins
701 "B" Street, Suite 2100
San Diego, California 92101
Attn: Jon D. Demorest, Esq.
1.10 Date of REIT's Most Current Prospectus: January 30, 1997.
1.11 Transferor's Equity: For each Project, the Transferor's
Equity, computed as of the close of Escrow, is agreed to be as follows. The
Partnership shall issue Units to each Transferor in respect of such
Transferor's Equity (and the number of such Units shall be reflected in the
Partner Schedule for such Transferor). The Transferor's Equity for certain of
the Projects is subject to adjustment as provided in Section 1.12 of this
Schedule 2.
<TABLE>
<CAPTION>
Project Transferor's Equity
------- -------------------
<S> <C>
Briggsmore Plaza $ 3,967,637
Kietzke Center $10,335,125
Montebello Plaza $12,352,895
Paradise Plaza $ 1,768,470
</TABLE>
1.12 Earn Out: The Transferor's Equity for the Projects listed in
Schedule 7, and the number of Units to be issued to the Transferor in respect
thereof (at a value per Unit equal to the average closing price per share of
the REIT's common stock, par value $0.01 per share, for the sixty (60) trading
days immediately preceding the applicable "Payment Date," as defined below, or,
if applicable the lesser number of days within such sixty (60) trading day
period on which a closing price per share is reported) is subject to adjustment
following the close of Escrow in the event certain new Leases are executed by
the Partnership, as follows:
1.12.1 The Transferor's Equity will be subject to adjustment
as provided in Section 1.12.4 in the event new Leases of the eligible premises
described in Schedule 7 in substantial conformance with the Proposal Letters
identified in Schedule 7 are executed by the Prospective Tenants shown in
Schedule 7 by the Initial Lease Deadlines indicated in Schedule 7.
1.12.2 In the event a Prospective Tenant identified in
Schedule 7 fails to execute a new Lease with respect to the eligible premises
by the applicable Initial Lease Deadline, then the Transferor's Equity will be
nonetheless be subject to adjustment as provided in Section 1.12.4 in the event
new Leases are executed with respect to the eligible premises by replacement
tenants (which may include the Prospective Tenants, and regardless of whether
the tenant is secured by the Transferor or the Partnership) by the applicable
Replacement Tenant Lease Deadline specified in Schedule 7.
1.12.3 The Partnership shall have the option to accept or
reject any new Lease delivered by the Transferor pursuant to Sections 1.12.1
and 1.12.2. The Partnership shall notify the Transferor of its reasons for
rejecting a proposed new Lease. The Partnership's acceptance of a new Lease
shall be evidenced by the Partnership fully executing such new Lease as
landlord and delivering an original of such new Lease to the tenant named
therein, with a copy to the Transferor, within five (5) business days after the
Partnership's receipt of such new Lease. The Partnership's
2
<PAGE> 27
failure to deliver such new Lease to the tenant within such five (5) day period
shall be deemed to be the Partnership's rejection of the new Lease. In the
event the Partnership rejects or is deemed to have rejected the new Lease, the
Transferor's Equity shall nonetheless be subject to adjustment as provided in
Section 1.12.4 so long as the new Lease and the tenant thereunder rejected by
the Partnership comply in all material respects with all of the criteria
described in Schedule 7. If the Partnership rejects or is deemed to have
rejected a new Lease that does not comply in all material respects with all of
the criteria described in Schedule 7, then the Transferor's Equity shall not be
subject to adjustment on account of such proposed new Lease. The Transferor
shall have the right to approve any new Lease proposed by the Partnership with
respect to the eligible premises prior to the applicable Replacement Tenant
Lease Deadline specified in Schedule 7, which approval shall not be
unreasonably withheld. The Transferor shall notify the Partnership of its
reasons for rejecting a new Lease proposed by the Partnership. The
Transferor's failure to approve a new Lease proposed by the Partnership within
five (5) business days after the Transferor's receipt of such proposed new
Lease shall constitute the Transferor's rejection of the new Lease. If the
Transferor rejects or is deemed to have rejected a new Lease, then the
Transferor's Equity shall not be subject to adjustment on account of such
proposed new Lease, and the Partnership agrees that it will not execute or
otherwise consummate such proposed new Lease prior to the Replacement Tenant
Lease Deadline.
1.12.4 Adjustments in the Transferor's Equity as a result of
the execution of new Leases as provided in Sections 1.12.1, 1.12.2, 1.12.7 or
1.12.9 (or the rejection of qualifying Leases as provided in Section 1.12.3)
shall be computed as follows, based on the terms of the new Lease as initially
executed by the Partnership and the new tenant (or as presented to the
Partnership, if the qualifying new Lease is so rejected):
Step 1: Add (i) the "Stabilized Rent" for such new Lease,
plus (ii) the portion of the current fiscal year's budgeted annual
maintenance expenses, insurance costs and tax costs that are subject
to reimbursement by the Tenant, plus (iii) administrative fees paid by
the Tenant based on the amount described in clause (ii).
Step 2: Subtract from the sum computed in Step 1 the sum of
(i) a management fee equal to 3.5% of Stabilized Rent, expense
reimbursements and administrative fee collections, plus (ii) a $0.12
per rentable square foot capital replacement reserve.
Step 3: Divide the remainder computed in Step 2 by the
capitalization rate for the applicable Project, as shown on
Schedule 1.
Step 4: Subtract from the quotient computed in Step 3 the sum
of (i) the cost of any lease commissions, tenant improvement costs,
tenant relocation costs or other similar costs payable by the Landlord
under the Lease, plus (ii) interest on all amounts described in clause
(i) of this Step 4 from the date they are paid in cash by the
Partnership through the "Payment Date," as defined below, at the rate
of ten percent (10%) per annum.
Step 5: Subtract from the remainder computed in Step 4 the
amount of any rent credits, rent abatements or similar tenant
inducements provided under the new Lease (including without limitation
any rent credits or rent abatements with respect to any period
following the "Payment Date," as defined below). In addition, in
connection with the execution of a new Lease with respect to either of
the following two eligible premises, subtract from the remainder
computed in Step 4 the sum of (i) the amount of the Transferor's
Equity that was attributed to the existing Lease with the existing
tenant of the
3
<PAGE> 28
applicable eligible premises: either Unit # 1800 J at Briggsmore
Plaza (7,200 square feet for which Tutor Time is the identified
Prospective Tenant and for which the Transferor's Equity attributed to
the existing Lease is $354,566); or Unit # 6640 at Paradise Plaza
(6,039 square feet for which Blockbuster Video is the identified
Prospective Tenant and for which the Transferor's Equity attributed to
the existing Lease is $352,585), plus (ii) the amount of rent, expense
reimbursements and other amounts that would have been paid by the
existing tenant of the applicable premises, had its Lease not been
terminated, for the period between the date on which its obligation to
pay rent, expense reimbursements and other amounts is terminated and
the Payment Date with respect to the applicable new Lease.
Step 6: Add to the remainder computed in Step 5 an amount
equal to the product of (i) the applicable "Per Diem Adjustment
Amount" with respect to the premises covered by such new Lease, as
shown on Schedule 7, times (ii) the number of days during the period
beginning on the later to occur of the "Initial Lease Deadline"
applicable to the premises covered by such new Lease, as shown on
Schedule 7, or the Payment Date applicable to such new Lease, and
ending on the "Replacement Tenant Lease Deadline" applicable to the
premises covered by such new Lease, as set forth on Schedule 7.
For purposes of this Section, the term "Stabilized Rent" means the full
contractual base rent per year due under such new Lease, calculated without
regard to any annual increase in base rent or projected percentage rent but
after the expiration or exhaustion of any rent abatement periods, rent credits
or similar tenant inducements provided under the new Lease.
1.12.5 Adjustments to the Transferor's Equity as provided
above shall be made, and additional Units shall be issued to the Transferor on
account of such adjustment (at a value per Unit equal to the average closing
price per share of the REIT's common stock, par value $0.01 per share, for the
sixty (60) trading days immediately preceding the applicable Payment Date, or,
if applicable the lesser number of days within such sixty (60) trading day
period on which a closing price per share is reported), when the new tenant has
taken possession of the Applicable Premises (including for the purpose of
constructing tenant improvements, fixturization or stocking) (the "Payment
Date").
1.12.6 In the event a Transferor delivers a written notice
to the Partnership to remove a particular eligible premises from Schedule 7
(such date of notice shall be deemed the "Notice Date"), such Transferor shall
have no further right to have an adjustment of the Transferor's Equity in the
event a new Lease is thereafter executed with respect to such eligible
premises, except (i) as otherwise agreed in Section 1.12.7, and (ii) the
Partnership agrees to adjust the Transferor's Equity by the amount computed
with respect to such eligible premises in the manner described in "Step 6" in
Section 1.12.4, but using the later to occur of the "Initial Lease Deadline"
applicable to the premises covered by such new Lease, as shown on Schedule 7,
or the Notice Date, as the beginning date of the period referred to therein.
1.12.7 In the event the Partnership, in accordance with
Section 1.12.3, rejects or is deemed to have rejected a proposed new Lease
pursuant to Section 1.12.1 or Section 1.12.2 (as the case may be) because the
proposed new Lease or the proposed new tenant does not comply in all material
respects with all of the criteria described in Schedule 7, but the Partnership
within six (6) months after the applicable Replacement Tenant Lease Deadline
enters into a new Lease with the previously rejected proposed tenant on terms
substantially similar to those contained in the previously rejected proposed
Lease, then the Transferor's Equity will be nonetheless be subject to
adjustment as provided in Section 1.12.4 with respect to such new Lease.
4
<PAGE> 29
1.12.8 The Partnership hereby grants to each Transferor a
license to enter its Project during regular business hours for the purpose of
showing the eligible premises identified on Schedule 7 to prospective and
replacement tenants and taking such other reasonable actions as are appropriate
to lease the eligible premises. Said license shall automatically terminate as
to each eligible premises on the applicable Replacement Tenant Lease Deadline.
The Transferors have a continuing right, prior to the applicable Replacement
Tenant Lease Deadline, to market the eligible premises, to negotiate lease
terms with such prospective and replacement tenants (and, in the case of the
two eligible premises described in the last sentence of "Step 5" in Section
1.12.4, to negotiate the terms of the termination of the existing Leases of the
existing tenants of such two eligible premises), to provide for the
construction of tenant improvements, and to negotiate with the applicable
governmental agency with respect to discretionary and administrative permits,
provided, however, that the Partnership shall have the right to approve all
conditions to any required discretionary approval, which approval shall not be
unreasonably withheld or delayed, and provided further that, with respect to
the two eligible premises described in the last sentence of "Step 5" in Section
1.12.4, (i) the existing Lease shall not be terminated unless and until the new
Lease has been fully executed (subject to the conditions described in clause
(ii), below), and (ii) the effectiveness of the new Lease shall be conditioned
upon the termination of the existing Lease and the existing tenant's vacation
of its premises. The Partnership will not interfere with the Transferor's
activities as described in this Section, and will reasonably cooperate with the
Transferor's efforts upon request. If a new Lease (conditioned as described
above) is executed as provided in Sections 1.12.1, 1.12.2, 1.12.7 or 1.12.9
with respect to one or both of the two eligible premises described in the last
sentence of "Step 5" in Section 1.12.4, then the Partnership shall, at the
Transferor's request, terminate the existing Lease with respect to such
eligible premises; provided, however, that the Transferor shall be liable for
all termination payments required to be made to the existing tenant and other
costs incurred, and be entitled to receive all consideration and other costs
payable by the existing tenant, in connection with the termination of such
existing Lease. The Partnership shall not be liable for, and the Transferor
will indemnify, defend and hold the Partnership harmless against, any loss,
damage or injury arising from or related to the Transferor's exercise of its
rights pursuant to the license granted hereby.
1.12.9 If the Partnership issues additional Units to a
Transferor pursuant to this Section 1.12 as a result of the execution of a new
Lease (excluding for purposes of this Section 1.12.9 new Leases originated by
the Partnership), and the tenant under such new Lease thereafter defaults in
the payment of the first scheduled installment of Stabilized Rent, and fails to
cure such default within any cure period applicable under such new Lease,
resulting in the Partnership's termination of such new Lease and removal of
such tenant from the applicable eligible premises, then the Transferor will
return such Units to the Partnership for cancellation, and repay to the
Partnership any distributions received by the Transferor with respect to such
Units, and the Partnership will assign to the Transferor its rights to recover
damages for such default from the defaulting tenant. In the event the
Partnership enters into a new Lease with such terminated tenant within six (6)
months after the applicable Replacement Tenant Lease Deadline, the Transferor's
Equity will nonetheless be subject to Adjustment as provided in Section 1.12.4
with respect to such new Lease.
1.13 Use Restriction. For so long as the lease dated September 26,
1973, as amended with Marriott Corporation [Carrows] at the Montebello Plaza
Project is in effect, the Partnership will not, without the written consent of
the tenant thereunder, use, lease, sell or permit to be used, leased or sold
any land within the Montebello Plaza Project by any of the following fast food
and/or restaurant operators: Norm's, McDonald's, Sambo's and Coco's.
5
<PAGE> 30
SCHEDULE "4"
EXISTING INDEBTEDNESS
<TABLE>
<CAPTION>
Principal Amount After
----------------------
Project Lender June 1, 1997
------- ------ ------------
<S> <C> <C> <C>
1. Briggsmore Plaza Aetna Life Insurance Company $1,560,534
151 Farmington Avenue
Hartford, CT 06156-9642
(860) 273-1701
Loan No. 193-350
2. Kietzke Plaza 0
3. Montebello Plaza Promissory Note $9,556,214
A Nationwide Life Insurance Company, an
Ohio corporation
One Nationwide Plaza
Columbus, OH 43216
Loan No. 03-0303161
Promissory Note B
Employer's Life Insurance Company of
Wausau, a Wisconsin Corporation
One Nationwide Plaza
Columbus, OH 43216
Loan No. 33-3300686
c/o Pillsbury, Madison & Sutro, LLP
236 Montgomery Street
San Francisco, CA 74120-7880
Albert B. Glickman $290,000
9864 Wilshire Blvd.
Beverly Hills, CA 90210
4. Paradise Plaza Connecticut General Life Insurance Company, $2,956,130
a Connecticut corporation
c/o Trowbridge, Keiselhorst & Co.
555 California Street, Suite 2850
San Francisco, CA 94104
Loan No. 780021
</TABLE>
1
<PAGE> 1
EXHIBIT 23.01
INDEPENDENT AUDITORS' CONSENT
We consent to the inclusion in the Report on Form 8-K under the Securities
Exchange Act of 1934 of Excel Realty Trust, Inc. of the report of Squire &
Company, PC dated June 30, 1997 on the Historical Summaries of Operating
Revenues and Direct Operating Expenses of the properties acquired by Excel
Realty Trust, Inc. for the year ended December 31, 1996.
/s/ SQUIRE & CO.
Squire & Company, PC
Poway, California
July 3, 1997
<PAGE> 1
EXHIBIT 99.01
[SQUIRE & COMPANY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Excel Realty Trust, Inc.
We have audited the accompanying Historical Summaries of Operating Revenues and
Direct Operating Expenses of selected properties acquired by Excel Realty
Trust, Inc. for the year ended December 31, 1996. These summaries are the
responsibility of Excel Realty Trust, Inc., and Albert B. Glickman &
Associates. Our responsibility is to express an opinion on these summaries
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the summaries are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the summaries. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the summaries. We believe that
our audit of the summaries provide a reasonable basis for our opinion.
As described in Note 1, the accompanying summaries were prepared in conformity
with accounting principles prescribed by the Securities and Exchange
Commission which is a comprehensive basis of accounting other than generally
accepted accounting principles, and is not intended to be a complete
presentation of the properties' revenues and expenses.
In our opinion, the summaries referred to above present fairly, in all material
respects, the operating revenues and direct operating expenses of selected
properties acquired by Excel Realty Trust, Inc. for the year ended December 31,
1996, on the basis of accounting described in Note 1.
This report is intended solely for the information and use of the Board of
Directors and management of Excel Realty Trust, Inc. and for filing with the
Securities and Exchange Commission and should not be used for any other
purpose.
/s/ SQUIRE & CO.
Squire & Company, PC
Poway, California
June 30, 1997
<PAGE> 2
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
BAKERSFIELD PLAZA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $533,593 $1,812,688
Percentage rents 2,812 55,130
Expense reimbursements 117,032 366,180
Other income (9,940) 37,726
-------- ----------
Total operating revenues 643,498 2,271,723
DIRECT OPERATING EXPENSES:
Administrative and office expense 30,499 49,735
Management fees 28,359 113,434
Advertising and promotion 4,875 10,757
Repairs and maintenance 34,184 70,476
Utilities 18,306 66,619
Insurance 22,486 89,940
Property taxes 29,411 117,643
-------- ----------
Total direct operating expenses 168,219 518,604
-------- ----------
Net operating income $475,279 $1,753,119
======== ==========
</TABLE>
The accompanying notes are an integral part of these summaries.
-2-
<PAGE> 3
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
BRIGGSMORE PLAZA 03/31/97 Year Ended
(Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $139,152 $565,986
Percentage rents 3,886 39,075
Expense reimbursements 49,543 182,817
Other income 1,482 16,729
-------- --------
Total operating revenues 194,062 804,608
DIRECT OPERATING EXPENSES:
Administrative and office expense (1,294) 50,456
Management fees 7,122 28,489
Advertising and promotion 319 10,391
Repairs and maintenance 16,662 97,187
Utilities 6,396 42,685
Insurance 11,020 44,080
Property taxes 10,230 40,918
-------- --------
Total direct operating expenses 50,455 314,206
-------- --------
Net operating income $143,607 $490,402
======== ========
</TABLE>
The accompanying notes are an integral part of these summaries.
-3-
<PAGE> 4
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
BRISTOL PLAZA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $253,986 $ 927,013
Percentage rents -- 67,571
Expense reimbursements 63,873 165,374
Other income 6,914 12,508
-------- ----------
Total operating revenues 324,772 1,172,466
DIRECT OPERATING EXPENSES:
Administrative and office expense 1,085 49,398
Management fees 12,493 49,971
Advertising and promotion -- 14,051
Repairs and maintenance 17,504 93,563
Utilities 9,263 23,565
Insurance 9,632 38,529
Property taxes 18,782 75,128
-------- ----------
Total direct operating expenses 68,759 344,205
-------- ----------
Net operating income $256,013 $ 828,261
======== ==========
</TABLE>
The accompanying notes are an integral part of these summaries.
-4-
<PAGE> 5
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
CARMEN PLAZA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $189,085 $676,971
Percentage rents -- --
Expense reimbursements 44,210 130,075
Other income 60,508 7,649
-------- --------
Total operating revenues 293,803 814,696
DIRECT OPERATING EXPENSES:
Administrative and office expense 23,919 57,406
Management fees 10,091 40,363
Advertising and promotion 2,018 5,640
Repairs and maintenance 109,374 121,277
Utilities 4,570 17,795
Insurance 13,979 55,916
Property taxes 14,906 59,623
-------- --------
Total direct operating expenses 178,857 358,021
-------- --------
Net operating income $114,946 $456,675
======== ========
</TABLE>
The accompanying notes are an integral part of these summaries.
-5-
<PAGE> 6
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
COACHELLA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $42,320 $170,979
Percentage rents -- --
Expense reimbursements 28,014 55,297
Other income 1,049 5,541
------- --------
Total operating revenues 71,383 231,817
DIRECT OPERATING EXPENSES:
Administrative and office expense 229 10,575
Management fees 2,167 8,666
Advertising and promotion -- 802
Repairs and maintenance 8,670 32,387
Utilities 2,329 6,256
Insurance 3,859 15,435
Property taxes 2,916 11,665
------- --------
Total direct operating expenses 20,170 85,786
------- --------
Net operating income $51,213 $148,031
======= ========
</TABLE>
The accompanying notes are an integral part of these summaries.
-6-
<PAGE> 7
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
CUDAHY PLAZA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $142,789 $553,616
Percentage rents 56,876 34,275
Expense reimbursements 37,166 97,266
Other income 736 6,144
-------- --------
Total operating revenues 237,567 691,301
DIRECT OPERATING EXPENSES:
Administrative and office expenses 159 4,917
Management fees 7,065 28,258
Advertising and promotion -- 882
Repairs and maintenance 10,167 74,048
Utilities 2,011 15,072
Insurance 10,385 41,538
Property taxes 13,560 54,240
-------- --------
Total direct operating expenses 43,347 218,955
-------- --------
Net operating income $194,220 $472,346
======== ========
</TABLE>
The accompanying notes are an integral part of these summaries.
-7-
<PAGE> 8
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
G & H ASSOCIATES (Kietzke Center) (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $244,884 $ 995,851
Percentage rents -- 155,399
Expense reimbursements 69,211 241,193
Other income 7,904 13,712
-------- ----------
Total operating revenues 321,999 1,366,155
DIRECT OPERATING EXPENSES:
Bad debt expenses -- 13,730
Administrative and office expenses 8,672 60,442
Management fees 13,835 55,340
Advertising and promotion 459 6,774
Repairs and maintenance 23,306 131,897
Utilities 10,012 46,991
Insurance 13,760 55,038
Property taxes 27,455 107,658
-------- ----------
Total direct operating expenses 97,499 477,870
-------- ----------
Net operating income $224,500 $ 888,285
======== ==========
</TABLE>
The accompanying notes are an integral part of these summaries.
-8-
<PAGE> 9
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
MONTEBELLO PLAZA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $680,697 $2,349,006
Percentage rents -- 3,983
Expense reimbursements 114,997 423,066
Other income 12,850 24,465
-------- ----------
Total operating revenues 808,544 2,800,521
DIRECT OPERATING EXPENSES:
Administrative and office expense 905 73,513
Management fees 28,222 112,887
Advertising and promotion -- 5,466
Repairs and maintenance 48,886 273,565
Utilities 25,128 62,964
Insurance 24,061 96,242
Property taxes 57,893 231,574
-------- ----------
Total direct operating expenses 185,095 856,211
-------- ----------
Net operating income $623,449 $1,944,310
======== ==========
</TABLE>
The accompanying notes are an integral part of these summaries.
-9-
<PAGE> 10
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARY OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
Year Ended December 31, 1996
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended
03/31/97 Year Ended
PARADISE PLAZA (Unaudited) 12/31/96
------------ ----------
<S> <C> <C>
OPERATING REVENUES:
Base rents $162,944 $694,100
Percentage rents -- 2,912
Expense reimbursements 53,746 206,967
Other income 1,171 7,400
-------- --------
Total operating revenues 217,861 911,379
DIRECT OPERATING EXPENSES:
Administrative and office expense 449 6,733
Management fees 8,660 34,639
Advertising and promotion -- 1,559
Repairs and maintenance 9,755 47,017
Utilities 5,618 28,261
Insurance 14,983 59,933
Property taxes 24,307 97,227
-------- --------
Total direct operating expenses 63,772 275,369
-------- --------
Net operating income $154,089 $636,010
======== ========
</TABLE>
The accompanying notes are an integral part of these summaries.
-10-
<PAGE> 11
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
NOTES TO HISTORICAL SUMMARIES OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
in the preparation of these Historical Summaries. The Historical
Summaries and notes are representations of Excel Realty Trust, Inc. and
Albert B. Glickman & Associates, whose management are responsible for
the integrity and objectivity of these Historical Summaries.
Business Activity - Excel Realty Trust, Inc. is headquartered in San
Diego, California. The Trust is a self-administered, self-managed equity
real estate investment trust which owns and manages income-producing
properties.
The acquired properties are operated as shopping centers in the
locations below with the anchor stores listed.
<TABLE>
<CAPTION>
Property Location Anchor Stores
------------------ -------------- ----------------------------------------
<S> <C> <C>
Bakersfield Plaza Bakersfield, CA Circuit City, Von's
Briggsmore Plaza Modesto, CA MacFrugal's, Family Bargain Center
Bristol Plaza Santa Ana, CA Pic 'n Save, Thrifty Drug, Lucky's
Carmen Plaza Camarillo, CA Michael's Craft, Sav-On Drug
Coachella Coachella, CA Payless Shoe Source, Video Depot
Cudahy Plaza Cudahy, CA KMart, Pic 'n Save
G&H Associates
(Kierzke Center) Reno, NV Ernst Home Center, Mervyn's
Montebello Plaza Montebello, CA Albertson's, Circuit City, Office Depot,
Sav-On Drug, Vat Partners
Paradise Plaza Paradise, CA KMart, Albertson's, Payless Drug
</TABLE>
Albert B. Glickman & Associates has owned and managed the properties.
Retail space is rented to tenants under noncancelable leases ranging
from three to twenty years, with renewal options available.
Form of Presentation - The Historical Summaries are presented in
conformity with Rule 3-14 of the Securities and Exchange Commission.
Accordingly, certain expenses of the properties are not included in the
summary, i.e., depreciation and interest.
Management has determined that after reasonable inquiry, it is not aware
of any material factors relating to the properties reported on in the
accompanying Historical Summaries which would cause the reported
financial information not to be indicative of future operating results.
-11-
<PAGE> 12
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies (Continued)
Revenue Recognition - Base rental income from leases is recorded when
due from tenants. Some of the leases include percentage rents and
overage rents based on the level of sales of the lessee. Leases
generally provide for tenant reimbursements of common area maintenance.
These reimbursements are included in the accompanying Historical
Summaries as expense reimbursements.
Accounting Estimates - The preparation of the Historical Summaries
includes estimates and assumptions that affect the reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Note 2. Minimum Future Rentals
Albert B. Glickman & Associates leases retail space to tenants under
noncancelable operating leases. The following is a schedule of future
minimum rentals for the next five years under the noncancelable leases
after 1996:
BAKERSFIELD PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31 1997 1998 1999 2000 2001
- ------------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Fresh Choice $ 120,000 $ 120,000 $ 120,000 $ 120,000 $ 120,000
Burger King 78,125 83,008 97,656 97,656 97,656
Pizza Hut 60,096 61,298 63,702 64,976 67,524
China Palace 81,831 68,193 -- -- --
Anna Nails 16,800 16,800 15,400 -- --
Akira's 44,100 29,400 -- -- --
The Getaway Cafe 55,188 55,188 55,188 55,188 55,188
C.C. Brown's Yogurt 25,200 25,200 6,300 -- --
United Artists 110,000 110,000 110,000 110,000 110,000
Jimmy's Arcade 108,951 108,951 108,951 108,951 108,951
Circuit City 312,204 312,204 312,204 312,204 355,278
See's Candies 29,265 30,775 31,313 32,929 2,744
Cigarettes Cheaper 22,680 22,680 13,230 -- --
Patelco Credit Union 28,945 -- -- -- --
El Rosal Mexican Restaurant 41,136 50,628 50,628 50,628 33,752
Long's Drug 84,700 93,170 93,170 93,170 93,170
Shaw Carpet 102,218 102,218 107,328 109,884 111,258
Krause's Sofa Factory 187,513 187,513 187,513 62,504 --
M-K Medical 20,933 -- -- -- --
Von's 308,525 308,525 308,525 308,525 308,525
---------- ---------- ---------- ---------- ----------
$1,838,410 $1,785,751 $1,681,108 $1,526,615 $1,464,046
========== ========== ========== ========== ==========
</TABLE>
-12-
<PAGE> 13
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
NOTES TO HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
Note 2. Minimum Future Rentals (Continued)
BRIGGSMORE PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31, 1997 1998 1999 2000 2001
- ------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Laundry Day $ 28,876 $ 28,876 $ 28,876 $ 28,876 $ 28,876
Just for Kids 12,041 2,117 -- -- --
Taqueria San Jose 21,600 22,800 24,000 25,200 22,000
Kirin Japanese Steak House 43,870 45,625 47,450 49,348 51,322
A.A. Nail & Hair Salon 10,272 10,272 -- -- --
Vet. Emergency Clinic 31,279 31,279 31,279 31,279 31,279
Prime Shine Carwash 45,000 45,000 47,250 49,500 49,500
Bank of America 28,700 28,700 28,700 28,700 28,700
McDonald's 36,563 18,282 -- -- --
Prescott Liquor 29,500 29,500 29,500 29,500 29,500
Canned Foods 116,400 132,000 132,000 132,000 132,000
MacFrugal's 56,125 56,125 56,125 56,125 18,708
Family Bargain Center 91,440 95,100 68,280 --
Orbir 40,413 40,413 20,207 -- --
Mocha Moe's 23,150 23,150 23,150 23,150 23,150
-------- -------- -------- -------- --------
$615,229 $609,239 $536,817 $455,678 $415,035
======== ======== ======== ======== ========
</TABLE>
BRISTOL PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31, 1997 1998 1999 2000 2001
- ------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
G & M Oil (Chevron) $ 35,000 $ 35,000 $ 35,000 $ 35,000 $ 37,625
Jade Place 108,192 108,192 108,192 108,192 108,192
Fashion Focus 22,000 33,000 33,000 11,000 --
Showtime Video 46,200 47,009 48,419 49,871 51,367
Pizza Hut 90,979 93,405 65,505 -- --
Pic 'n Save 22,000 22,000 22,000 22,000 22,000
Thrifty Drug 66,192 66,192 66,192 66,192 27,580
Lucky's 80,662 80,662 80,662 80,662 80,662
CA Cleaners 39,294 39,294 39,294 39,294 39,294
Aim Mail Center 31,374 32,943 34,590 36,319 38,135
MC Beauty Supply 27,196 27,196 22,663 -- --
China King Restaurant 37,228 37,228 37,228 37,228 37,228
Elegant Nails 7,957 2,652 -- -- --
Best Barbers 12,342 11,314 -- -- --
Carrows Restaurant 38,000 38,000 38,000 38,000 38,000
Party City 188,937 188,937 188,937 188,937 188,937
Goodyear Tire & Rubber 96,000 96,000 108,000 108,000 --
-------- -------- -------- -------- --------
$949,553 $959,024 $927,682 $820,695 $669,020
======== ======== ======== ======== ========
</TABLE>
-13-
<PAGE> 14
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
NOTES TO HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
CARMEN PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31 1997 1998 1999 2000 2001
- ------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Chuy's Baja Broiler $ 36,153 $ 36,153 $ 36,153 $ 33,821 $ --
Flower Connection 15,744 15,744 15,744 15,744 15,744
Gourmet Oriental 22,050 22,050 5,513 -- --
America's Tire 99,600 99,600 100,015 100,015 100,430
Michael's Craft 122,496 122,496 122,496 122,496 20,416
Sav-On Drug 126,556 126,556 126,556 126,556 126,556
Pet Company 65,340 65,340 351 -- --
Baron's Fabric 63,600 63,600 63,600 63,600 37,100
PWS Launderland 31,221 31,221 31,221 31,221 27,925
Carmen Video 36,630 33,676 -- -- --
Polar Bear Yogurt 16,836 16,836 16,836 16,836 136
Dr. Stewart Heller 20,130 20,130 20,130 20,130 15,855
Winchell's Donuts 30,240 30,240 30,240 30,240 30,240
Gentleman's Quarters 14,400 7,200 -- -- --
Elegant Touch 14,224 14,508 3,700 -- --
Carmen Plaza Travel 18,132 18,132 18,132 10,869 --
Majesty Cleaners 18,600 18,600 18,600 18,600 18,600
Well's Fargo 34,200 34,200 34,200 34,200 17,100
Hana Haru 35,588 71,136 71,136 71,136 71,136
-------- -------- -------- -------- --------
$821,740 $847,418 $714,623 $695,464 $481,238
======== ======== ======== ======== ========
</TABLE>
CUDAHY PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31 1997 1998 1999 2000 2001
- ------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
T-Shirts Land $ 50,839 $ 16,946 $ -- $ -- $ --
Shoe Mart 25,628 25,628 19,221 -- --
Small World 34,170 28,475 -- -- --
Cudahy Plaza Barber Shop 15,926 11,945 -- -- --
Pic 'n Save 48,550 48,550 48,550 48,550 28,321
One Price Clothing Store 54,000 54,000 54,000 54,000 57,375
Fashion 21 79,301 79,301 79,301 79,301 79,301
Cudahy Family Dental 28,616 28,616 28,616 7,154 --
Manna Ice Cream & Sandwich 19,112 12,741 -- -- --
Salon De Beaute 24,860 24,860 24,860 24,860 8,287
KMart 175,000 175,000 175,000 175,000 175,000
-------- -------- -------- -------- --------
$556,002 $506,062 $429,548 $388,865 $348,284
======== ======== ======== ======== ========
</TABLE>
-14-
<PAGE> 15
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
NOTES TO HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
Note 2. Minimum Future Rentals (Continued)
COACHELLA
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31, 1997 1998 1999 2000 2001
- ------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Payless Shoe Source $ 17,554 $ - $ - $ - $ -
Plaza Laundry 26,244 26,244 26,244 26,244 19,683
Plaza Garibaldi 16,122 16,122 16,122 16,122 9,405
Tropical Ice Cream 9,555 17,640 17,640 17,640 8,085
Macia's Hair Salon 17,304 17,304 17,304 17,304 17,304
Video Depot 53,004 53,004 - - -
-------- -------- -------- -------- --------
$139,783 $130,314 $ 77,310 $ 77,310 $ 54,477
======== ======== ======== ======== ========
</TABLE>
G & H ASSOCIATES (KIETZKE CENTER)
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31, 1997 1998 1999 2000 2001
- ------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Ernst Home Center $146,560 $147,500 $147,500 $147,500 $147,500
Rent-a-Center 33,000 35,500 12,000 - -
Clementine's 24,000 24,000 24,000 2,000 -
Aloha Sushi 28,750 34,500 34,500 34,500 34,500
Swensen's Ice Cream 29,880 29,880 29,880 29,880 29,880
Supercuts 30,188 31,396 27,210 - -
Tokyo Market 44,928 44,928 44,928 44,928 44,928
Nations Credit 18,332 18,882 162,210 - -
Pillow Talk 20,844 18,021 - - -
Clothestime 54,010 55,272 57,791 57,791 59,139
Payless Shoe Source 35,850 - - - -
The Wherehouse 99,360 103,032 114,048 114,048 114,048
Ken's Sports Cards 18,000 18,000 18,000 18,000 18,000
Sapna Indian Restaurant 29,358 29,358 29,358 18,353 -
Port of Subs 24,000 24,000 24,000 24,000 24,000
Happy Lookers Hair Salon (A) 18,600 18,600 18,600 18,600 1,550
Happy Lookers Hair Salon (B) 13,050 13,050 8,704 - -
Instant Sign Center 2,500 - - - -
Radio Shack 25,398 25,398 28,187 28,440 28,440
Mervyn's 184,800 184,800 184,800 184,800 184,800
-------- -------- -------- -------- --------
$881,408 $856,117 $965,716 $722,840 $686,785
======== ======== ======== ======== ========
</TABLE>
-15-
<PAGE> 16
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
NOTES TO HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
NOTE 2. MINIMUM FUTURE RENTALS (Continued)
MONTEBELLO PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31 1997 1998 1999 2000 2001
- ------------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Albertson's $ 378,536 $ 378,536 $ 378,536 $ 378,536 $ 362,764
Union Bank 53,600 53,600 53,600 53,600 53,600
Bank of America 28,000 28,000 28,000 28,000 28,000
Del Taco 61,679 61,679 61,679 61,679 35,979
Fitness Town 88,896 88,896 88,896 88,896 88,896
Circuit City 300,000 300,000 300,000 300,000 303,750
Val Partners 240,907 240,907 240,907 240,907 243,918
Carrows Restaurant 38,000 38,000 38,000 38,000 38,000
Office Depot 264,000 290,400 290,400 290,400 319,440
Sav-On Drug 42,000 42,000 42,000 43,000 43,000
The Associates 35,526 36,996 37,304 29,133 --
Miki-Chan's 30,032 -- -- -- --
Healthcare Partners #1 - #6 111,216 111,216 111,216 111,216 37,072
Dr. Mecheal Hanna 25,635 25,635 25,635 25,635 25,635
Fiscal Federal 19,200 19,360 21,120 21,120 5,280
United States Postal Service 55,680 55,680 55,680 55,680 32,480
Norwest Financial 30,832 30,832 30,832 30,832 30,832
Super Bargain .98+ 40,320 40,320 40,320 40,320 40,320
King's Garden 40,323 16,801 -- -- --
Fred's Tropical Fish 47,905 47,905 23,953 -- --
J & K Cigarettes 18,816 18,816 4,704 -- --
Dr.'s Ehatia & Arroyo 22,500 22,500 22,500 22,500 15,000
Tatiana's - The Salon 13,500 13,500 11,250 -- --
Four Star Cleaners 18,055 15,798 -- -- --
El Zarape Mexican Fast Food 19,905 19,905 19,905 19,905 4,976
Wells Fargo Bank 104,439 104,439 104,439 106,721 39,376
Perry's Smorgy #1 44,040 44,040 44,040 14,680 --
Happy Nails 14,929 14,929 14,929 14,929 2,488
Exquisite Formal Wear 21,958 8,234 -- -- --
Scoopdeli 29,768 31,256 32,819 34,460 14,358
Perry's Smorgy #2 10,016 10,016 10,016 3,339 --
Dr. Raffi Chalian 18,495 1,541 -- -- --
Radio Shack 34,800 34,800 34,800 34,800 20,040
Sushi Osawa 16,200 16,200 16,200 16,200 10,800
Chevron 52,470 52,470 52,470 55,748 35,196
---------- ---------- ---------- ---------- ----------
$2,372,178 $2,315,207 $2,236,150 $2,160,236 $1,831,200
========== ========== ========== ========== ==========
</TABLE>
-16-
<PAGE> 17
EXCEL REALTY TRUST, INC., AND ALBERT B. GLICKMAN & ASSOCIATES
HISTORICAL SUMMARIES OF OPERATING REVENUES AND DIRECT
OPERATING EXPENSES FOR SELECTED PROPERTIES ACQUIRED BY
EXCEL REALTY TRUST, INC.
- -------------------------------------------------------------------------------
Note 2. Minimum Future Rentals (Continued)
PARADISE PLAZA
Minimum Lease Payments
<TABLE>
<CAPTION>
Years Ending December 31 1997 1998 1999 2000 2001
- ------------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Egg Roll Express $ 30,912 30,912 $ 30,912 $ 30,912 $ 23,184
KMart 184,500 184,500 184,500 184,500 184,500
Jerry Laskey, Optometrist 10,094 1,682 -- -- --
Best Donuts 10,800 10,800 5,400 -- --
Blondie's 18,636 18,637 17,083 -- --
Baskin Robbins 9,812 9,812 5,724 -- --
Perm 'N Kuts 9,408 10,752 10,752 1,344 --
Stationer's Hallmark 52,650 52,650 52,650 52,650 52,650
Pride Ridge Cinema 24,000 24,900 25,800 26,700 11,500
Wayne Lenkier Jewelers 17,934 13,480 -- -- --
The Cookie Jar 7,592 -- -- -- --
Mountain Mike's 43,261 43,261 43,261 43,261 43,261
Haley's Martial Arts 19,500 19,500 19,500 2,438 --
Radio Shack 32,400 32,500 18,426 -- --
Albertson's 88,724 88,724 88,724 88,724 88,724
Bank of America 36,800 36,800 36,800 36,800 36,800
Payless Drug 31,500 31,500 31,500 31,500 31,500
---------- ---------- ---------- ---------- ----------
$ 628,523 $ 610,310 $ 571,032 $ 498,829 $ 472,119
========== ========== ========== ========== ==========
</TABLE>
The schedule of future minimum rentals is based on the actual
noncancelable lease terms in effect as of December 31, 1996. Many of
the tenant leases contain terms for renewal options, percentage rents
and overage rents, and adjustments based on changes in the consumer
price index. These renewal options, percentage rents and overage rents,
and adjustments based on changes in the consumer price index have not
been reflected in the above noncancelable lease schedule.
All percentage rents and overage rents are contingent based on the
tenant achieving certain levels of sales. Not all of the leases have a
provision for percentage rents.
-17-
<PAGE> 1
EXHIBIT 99.02
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31, 1996 and the Three Months Ended March 31, 1997
(Dollars in thousands, except per share information)
The following unaudited Pro Forma Condensed Consolidated Statements of
Income has been presented as if the Glickman transaction had occurred on January
1, 1996. The unaudited Pro Forma Condensed Consolidated Statements of Income
should be read in conjunction with the consolidated financial statements of the
Company filed on Form 10-K and Form 10-Q for the year ended December 31, 1996
and the period ended March 31, 1997, respectively, and the Historical Summary of
Operating Revenues and Direct Operating Expenses for Selected Properties to be
Acquired by Excel Realty Trust, Inc. included elsewhere herein. In management's
opinion, all adjustments necessary to reflect this transaction have been made.
The unaudited Pro Forma Condensed Consolidated Statements of Income are not
necessarily indicative of what actual results of operations of the Company would
have been had this transaction actually occurred as of January 1, 1996 nor do
they purport to represent the results of operations of the Company for future
periods.
<TABLE>
<CAPTION>
For the Year Ended For the Three Months Ended
December 31, 1996 March 31, 1997
------------------------------------------- ------------------------------------------
Pro Forma Company Pro Forma Company
Historical Adjustments Pro Forma Historical Adjustments Pro Forma
------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue: $ 63,135 $ 11,065 $ 74,200 $ 20,204 $ 3,114 $ 23,318
Direct Operating Expenses (10,625) (3,449) (14,074) (3,463) (876) (4,339)
Depreciation and amortization: (7,487) (2,133) (9,620) (2,110) (533) (2,643)
Interest Expense (A): (19,450) (4,843) (24,293) (4,321) (1,211) (5,532)
Real Estate Sales and Impairment (1,777) 0 (1,777) 0 0 0
------------------------------------------- ------------------------------------------
Net Operating Income: $ 23,796 $ 640 $ 24,436 $ 10,310 $ 494 $ 10,804
=========================================== ==========================================
Net Income Per Share $ 1.62 $ 1.54 $ 0.46 $ 0.46
============ ============ ============ ============
Weighted Average Shares Outstanding 14,538,999 15,688,304(B) 18,752,867 19,902,172(B)
</TABLE>
(A) Pro Forma reflects additional mortgage debt of $14,073, capitalized leases
of $26,656, and borrowings of $15,000 from the Company's line of credit at
an average interest rate of 7.5%
(B) Represents additional limited partnership units issued in Excel Realty
Partners, L.P.
<PAGE> 2
EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
The following unaudited Pro Forma Condensed Consolidated Balance Sheet has been
presented as if the Acquisition of Glickman Properties had occurred on March 31,
1997. The unaudited Pro Forma Condensed Consolidated Balance Sheet should be
read in conjunction with the consolidated financial statements of the Company
included in the Quarterly Reports on Form 10-Q for the fiscal quarter ended
March 31, 1997. In management's opinion, all pro forma adjustments have been
made that are necessary to reflect this transaction. On April 1, 1997, the
Company acquired a greater than 50% interest in Excel Realty Partners, L.P.
("ERP") and began consolidating ERP's accounts. Historical ERP represents the
financial statements of ERP at March 31, 1997, including eliminating entries,
and are incorporated to reflect the consolidation of ERP accounts. The unaudited
Pro Forma Condensed Balance Sheet is not necessarily indicative of what the
actual financial position would have been at March 31, 1997, nor does it purport
to present the future financial position of the Company.
<TABLE>
<CAPTION>
HISTORICAL GLICKMAN
HISTORICAL EXCEL REALTY PRO FORMA COMPANY
ASSETS COMPANY PARTNERS, L.P. ADJUSTMENTS PROFORMA
<S> <C> <C> <C> <C>
Real estate, net ..................................... $459,691 $ 80,303 $ 85,114 $625,108
Other assets ......................................... 131,168 (22,165) 141 109,144
-------- -------- -------- --------
Total assets ................................... $590,859 $ 58,138 $ 85,255 $734,252
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages and notes payable ..................... $156,028 $ 51,505 $ 55,728 $263,261
Other liabilities ............................... 6,669 2,253 794 9,716
-------- -------- -------- --------
Total liabilities ........................... 162,697 53,758 56,522 272,977
Minority interest .................................... -- 4,380 28,733(A) 33,113
Stockholders' equity ................................. 428,162 -- -- 428,162
-------- -------- -------- --------
Total liabilities and stockholders' equity....... $ 590,859 $ 58,138 $ 85,255 $734,252
======== ======== ======== ========
</TABLE>
(A) Minority interests represent limited partner units issued in ERP.
