<PAGE>
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) MARCH 27, 1998
ALEXANDER HAAGEN PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND COMMISSION FILE: 1-12588 95-4444963
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3500 SEPULVEDA BOULEVARD
MANHATTAN BEACH, CALIFORNIA, 90266
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 546-4520
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 27, 1998, Alexander Haagen Properties Operating Partnership, L.P.,
("OP"), a partnership in which Alexander Haagen Properties, Inc. (collectively
the "Company") is the sole general partner, completed the acquisition of five
shopping centers for approximately $60,262,000 pursuant to certain contribution
agreements attached as exhibits hereto. The properties were individually
purchased from partnerships controlled by Hughes Investments (the "Sellers") an
unaffiliated entity.
The five centers consist of the following:
Loma Square, a 210,704 square foot shopping center located in San
Diego, California. The center is 93% leased and is anchored by Circuit
City, Sav-on Drugs, TJ Maxx, Henry's Marketplace, and Super Crown
Books.
North County Plaza, a 153,325 square foot shopping center located
adjacent to the Plaza Camino Real regional mall in Oceanside,
California. The center is 84% leased and is anchored by Marshall's,
Michaels and Kids R Us.
Center of El Centro, a 178,889 square foot shopping center located in
El Centro, California. The center is 97% leased and is anchored by
Sears, Mervyn's and Miller's Outpost.
Vineyards Marketplace, a 56,035 square foot shopping center located in
Rancho Cucamonga, California. The center is 73% leased and is anchored
by Albertson's (non-owned) and Sav-on Drugs.
Bakersfield Shopping Center, a 14,115 square foot shopping center
located in Bakersfield, California. The center is 90% leased.
In addition, the Company entered into an agreement to purchase a sixth shopping
center for approximately $5.1 million from a Hughes Investments controlled
entity. This purchase of Mineral King Plaza, a 39,000 square foot center located
in Visalia, California, which is 87% leased is expected to close by the end of
April 1998.
Funding for the acquisitions was accomplished through the assumption of a
$19,000,000 mortgage note payable to The Prudential Insurance Company of
America which bears interest at 9.31% and matures on August 15, 1999, the
assumption of a $14,422,000 mortgage note payable to The Travelers Insurance
Company which bears interest at 10.375% and matures on January 1, 2003, the
issuance of approximately $9.9 million in OP Units to the Sellers (comprising
616,852 OP units) and approximately $17 million drawn on the Company's credit
facility with The Chase Manhattan Bank.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of properties acquired.
The required financial statements will be filed within 60 days.
(b) Pro forma financial information.
The required pro forma financial information will be filed within 60
days.
2
<PAGE>
(c) Exhibits.
EXHIBIT
NO.
10.37 Contribution Agreement - Basic Economic Terms (El Centro Center) by and
between Center of El Centro and Alexander Haagen Properties Operating
Partnership, L.P., dated March 23, 1998
10.38 Amendment No. 1 to Contribution Agreement - Basic Economic Terms (El
Centro Center) by and between Center of El Centro and Alexander Haagen
Properties Operating Partnership, L.P., dated March 23, 1998
10.39 Amendment No. 2 to Contribution Agreement - Basic Economic Terms (El
Centro Center) by and between Center of El Centro and Alexander Haagen
Properties Operating Partnership, L.P., dated March 26, 1998
10.40 Contribution Agreement - Basic Economic Terms (Wilson - Wible) by and
between Hughes Investments and Alexander Haagen Properties Operating
Partnership, L.P., dated March 23, 1998
10.41 Amendment No. 1 to Contribution Agreement - Basic Economic Terms
(Wilson - Wible) by and between Hughes Investments and Alexander Haagen
Properties Operating Partnership, L.P., dated March 23, 1998
10.42 Amendment No. 2 to Contribution Agreement - Basic Economic Terms
(Wilson - Wible) by and between Hughes Investments and Alexander Haagen
Properties Operating Partnership, L.P., dated March 26, 1998
10.43 Contribution Agreement - Basic Economic Terms (Loma Square) by and
between Hughes/Loma Square Associates and Alexander Haagen Properties
Operating Partnership, L.P., dated March 23, 1998
10.44 Amendment No. 1 to Contribution Agreement - Basic Economic Terms (Loma
Square) by and between Hughes/Loma Square Associates Alexander Haagen
Properties Operating Partnership, L.P., dated March 23, 1998
10.45 Amendment No. 2 to Contribution Agreement - Basic Economic Terms (Loma
Square) by and between Hughes/Loma Square Associates and Alexander
Haagen Properties Operating Partnership, L.P., dated March 26, 1998
10.46 Contribution Agreement - Basic Economic Terms (Vineyards) by and
between Hughes Miliken Associates and Alexander Haagen Properties
Operating Partnership, L.P., dated March 23, 1998
10.47 Amendment No. 1 to Contribution Agreement - Basic Economic Terms
(Vineyards) by and between Hughes Miliken Associates Alexander Haagen
Properties Operating Partnership, L.P., dated March 23, 1998
10.48 Amendment No. 2 to Contribution Agreement - Basic Economic Terms
(Vineyards) by and between Hughes Miliken Associates and Alexander
Haagen Properties Operating Partnership, L.P., dated March 26, 1998
10.49 Contribution Agreement - Basic Economic Terms (North County) by and
between Hughes North County Associates and Alexander Haagen Properties
Operating Partnership, L.P., dated March 23, 1998
10.50 Amendment No. 1 to Contribution Agreement - Basic Economic Terms (North
County) by and between Hughes North County Associates and Alexander
Haagen Properties Operating Partnership, L.P., dated March 23, 1998
10.51 Amendment No. 2 to Contribution Agreement - Basic Economic Terms (North
County) by and between Hughes North County Associates and Alexander
Haagen Properties Operating Partnership, L.P., dated March 26, 1998
10.52 General Conditions to Contribution Agreement dated as of January 16,
1998
3
<PAGE>
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.
ALEXANDER HAAGEN PROPERTIES, INC.
Date: April 10, 1998
By: /s/ Stuart J.S. Gulland
----------------------------
Stuart J.S. Gulland
Senior Vice-President and Chief Financial Officer
<PAGE>
EXHIBIT 10.37
CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(EL CENTRO CENTER)
The undersigned Transferor agrees to transfer the Property to the
undersigned Transferee and Transferee agrees to accept the transfer on the
following terms and conditions:
1. Incorporation by Reference. All of the terms and conditions of:
--------------------------
a. The General Conditions to Contribution Agreement (the "General
Conditions");
b. The Addenda to General Conditions to Contribution Agreement (the
"Addenda");
c. The Exhibits to General Conditions to Contribution Agreement (the
"Exhibits"); and
d. The Schedules to General Conditions to Contribution Agreement
(the "Schedules")
which are attached hereto are incorporated by reference herein as being the
agreement of the undersigned.
2. Project. EL CENTRO CENTER.
-------
3. Transferor. CENTER OF EL CENTRO, acting on behalf of its Constituent
----------
Partners
4. Transferee. ALEXANDER HAAGEN PROPERTIES OPERATING PARTNERSHIP, L.P., a
----------
California limited partnership.
5. Consideration to Transferor. The total sum of
---------------------------
$6,985,378/1/ which is comprised of the following elements:
a. Existing Debt $0
b. Prepayment Fees and other Lender related expenses
charged against Transferor $0
- ------------------------
/1/ The Term Sheet Consideration of $7,767,234 has been reduced by $151,311 to
cover the reduction in Net Operating Income because KB Toys is a gross lease not
a net lease. The Consideration has been further reduced by $512,295, which
represents the Capitalized Value of the sum of $50,000 (which is based upon
Transferee's consultant's estimate of percentage rent). See Special Provisions
paragraph 7.c., below. The consideration has been further reduced by $63,800 for
Roof Tie-Ins, Mervyns. The consideration has been further reduced by $54,450 for
Roof Replacements and Tie-Ins, Millers.
<PAGE>
c. Commission obligations of Transferor paid by
Transferee and charged against Transferor $ 0
d. Transferor's share of Closing Costs (estimated) $25,000
e. Prorations charged against Transferor (estimated) $ 5,000
f. (Miscellaneous) $ 0
g. OP Units $1,738,844
h. Cash $5,216,534
----------
i. Total OP Units and Cash (being the aggregate of
the "Constituent Partner's Equity") $6,955,378
----------
j. Total Consideration $6,985,378
==========
The Total Consideration is subject to adjustment as provided herein and in
the General Conditions, the Addenda, the Exhibits and the Schedules.
6. Allocation. The Cash (subject to adjustment as provided in the
----------
preceding sentence) will be allocated among the direct and indirect partners
(the "Constituent Partners") of Transferor as follows:
<TABLE>
<CAPTION>
Percentage
of the
aggregate
of the
Name of Constituent
Constituent OP Units Partners' Allocated
Partner: (in $): Cash Total: Equity: Debt:
- -------- -------- ---- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Hughes Not
Investments $ 0 $3,477,689 $3,477,689 50.000% Applicable
Not
Herman Millman $ 0 $ 869,422 $ 869,422 12.500% Applicable
D. E. Cohn Not
Residuary Trust $ 0 $ 434,711 $ 434,711 6.250% Applicable
Contessa Cohn Not
Marital Trust $ 0 $ 434,711 $ 434,711 6.250% Applicable
Bartfam Not
Partnership $579,592 $ 0 $ 579,592 8.333% Applicable
Not
Cecile C. Bartman $579,661 $ 0 $ 579,661 8.334% Applicable
CJJ Limited Not
Partnership $579,592 $ 0 $ 579,592 8.333% Applicable
-------- ---------- ---------- ------- ----------
Not
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Totals $1,738,844 $5,216,534 $6,955,378 100.000% Applicable
========== ========== ========== ======= ==========
</TABLE>
7. Special Provisions:
------------------
a. The vacant parcel located on the Property (which is shown as
Parcel B on FATCO Order No. 4201-51, dated March 3, 1997) is included at no
additional cost.
b. Prior to the Closing Date, Transferor will deposit the sum of
$90,500 (the "Deposit") in a separate escrow account with Title Company pursuant
to an Escrow Agreement (which shall be in form and substance reasonably
satisfactory to Transferor and Transferee) which shall have the following basic
provisions: (i) each month Title Company shall disburse to Transferee from the
Deposit the amount of $2,083.33 (which is equivalent to and in lieu of monthly
net rent in the amount of $1,718.75 and contribution to common area maintenance
contributions of $364.58 on Suite B-5 which is currently vacant space as of the
date of this Agreement (the "Vacant Space")); (ii) if the Vacant Space is leased
pursuant to a lease or leases which require expenditures for tenant improvements
and leasing commission, such expenditures shall be reimbursed to Transferee by
Title Company from the Deposit; (iii) the disbursements under clause (i) shall
be reduced to the extent that gross rents shall be received from the Vacant
Space and shall cease at such time as gross monthly rents from the Vacant Space
equal or exceed $2,083.33; (iv) when the expenditures under clause (ii) have
been paid and rents commence as described in clause (iii), the balance of the
Deposit shall be paid over by Title Company to Transferor; and (iv) if gross
rents shall not have commenced on the Vacant Space in an amount equal to or in
excess of $2,083.33 within 1 year from the Closing Date, the balance of the
Deposit then remaining shall be paid over to Transferee.
c. Additional Consideration. To the extent, if any, that Net Overage
Rent (defined below) from the Property for the 12 calendar months ending on
December 31, 1998 shall exceed $120,000 Transferor shall be entitled to
additional Consideration in an amount equal to the Capitalized Value of such
excess, determined by dividing said excess amount by .0976. Except as provided
herein below, said additional Consideration shall be payable on or before
February 28, 1999. "Net Overage Rents" shall mean the overage rents actually
collected from the Property during the period from January 1, 1998 through
December 31, 1998 less an amount determined as follows for tenants who are
allowed a recapture of property taxes from their percentage rent: the
proportionate supplemental taxes which the overage rent paying tenants would
have paid for the new property tax assessment for the sale as though it had
taken place at the beginning of their overage rent period for which they are
paying, rather than the actual taxes they had paid for that period. The
additional Consideration shall be distributed to the Constituent Partners in the
ratios set forth in paragraph 6 above, both as to percentage thereof and as to
whether the additional Consideration is cash or OP Units based on the average
closing price for shares of stock of AHP for the five trading days immediately
preceding the payment of said additional Consideration. If reassessment of the
Property shall not have occurred or if Supplemental Property Taxes are not known
by February 28, 1999 such additional Consideration will be paid when such
reassessment is made; provided, however, that the actual tax amount for the
1997-1998 fiscal tax year shall be used if the Property has not been reassessed
by July 1, 2000. Transferor shall have the right to apply to the Tax Assessor
for reassessment as soon as possible following the Closing Date, and shall seek
3
<PAGE>
the lowest possible assessment. Transferee shall execute such instruments as
may be necessary to evidence Transferor's authority to apply for such
reassessment.
d. Format - Immediately prior to the Closing Date, Transferor will
convey the Property and assign its rights hereunder to its Constituent Partners
in the undivided percentage interests shown above in the fifth column of
paragraph 6. Each Constituent Partner will convey an undivided interest in the
Property to Transferee. Transferee will cause the OP Units to be issued and the
Cash to be paid to the Constituent Partners as shown in the second and third
columns of paragraph 6 above. The Constituent Partners severally and
proportionately will assume the obligations of Transferor under the
Representations and Warranties and Transferor will be released from liability
under the Representations and Warranties. Notwithstanding the foregoing, each
Constituent Partner shall be solely responsible for his own investment
representations and investor suitability representations.
Executed as of March 23, 1998.
Transferor: CENTER OF EL CENTRO,
a California general partnership
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc., a
California corporation,
general partner
/s/ William W. Hughes, Jr.
By: ______________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership, L.P.
a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Fred Bruning
------------------------------------
Its: Senior Vice President
------------------------------------
4
<PAGE>
AGREEMENT OF TITLE COMPANY
The undersigned executes this Agreement for the purposes of acknowledging its
agreement to serve as escrow agent in accordance with the terms of this
Agreement and to acknowledge receipt of the Earnest Money from the Transferee.
First American Title Insurance Company
By:_____________________________________
Its:____________________________________
Date: ________________________, 1998
Escrow No. N 984017E
5
<PAGE>
EXHIBIT 10.38
AMENDMENT NO. 1 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(EL CENTRO CENTER)
THIS AMENDMENT NO. 1 is made and entered into as of March 23, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 17 of the General Conditions to the Contribution
Agreement is hereby amended to provide in full as follows:
"17. CONDITIONS TO OBLIGATION TO CLOSE.
Notwithstanding anything to the contrary contained in this Agreement,
neither Transferor nor Transferee shall be obligated to consummate this
Agreement if, for any reason, Transferee will not, concurrently with the
closing of this transaction, also acquire the following real estate
projects: Loma Square, North County Plaza, El Centro Center, Vineyards
Marketplace, and Wilson Wible in Bakersfield ( the "Included Projects")."
<PAGE>
2. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: CENTER OF EL CENTRO,
a California general partnership
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: ________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P. a California limited
partnership
By: Alexander Haagen Properties, Inc., a
Maryland corporation, its General
Partner
By: Fred Bruning
--------------------------
Its: Senior Vice President
--------------------------
2
<PAGE>
EXHIBIT 10.39
AMENDMENT NO. 2 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(EL CENTRO CENTER)
THIS AMENDMENT NO. 2 is made and entered into as of March 26, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 14 of Addendum I to the General Conditions to the
Contribution Agreement is hereby amended to provide in full as follows:
"14. CLOSING DATE. March 27, 1998, or such other later or earlier
date as Transferor and Transferee shall mutually agree."
2. PRORATION OF RECOVERABLE EXPENSES. Notwithstanding anything to the
contrary set forth in the Contribution Agreement or the General Conditions
thereto, Transferor and Transferee agree that Transferor shall for the period
from January 1, 1998, through March 31, 1998, be responsible to pay for
Recoverable Expenses for that period; provided, however, that all post-closing
adjustments required by paragraph 7 (a) (ii) shall continue to be required as
provided therein, except that the date of proration shall be as provided in this
paragraph 2.
3. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: CENTER OF EL CENTRO,
a California general partnership
By: Hughes Investments, a California general
partnership, general partner
By: WWH Investments, Inc., a California
corporation, general partner
By: ______________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P. a California limited
partnership
By: Alexander Haagen Properties, Inc., a
Maryland corporation, its General
Partner
By: Steven M. Jaffe
----------------------------
Its: Senior Vice President
----------------------------
2
<PAGE>
EXHIBIT 10.40
CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(WILSON - WIBLE)
The undersigned Transferor agrees to transfer the Property to the
undersigned Transferee and Transferee agrees to accept the transfer on the
following terms and conditions:
1. Incorporation by Reference. All of the terms and conditions of:
---------------------------
a. The General Conditions to Contribution Agreement (the "General
Conditions");
b. The Addenda to General Conditions to Contribution Agreement
(the "Addenda");
c. The Exhibits to General Conditions to Contribution Agreement
(the "Exhibits"); and
d. The Schedules to General Conditions to Contribution Agreement
(the "Schedules")
which are attached hereto are incorporated by reference herein as being the
agreement of the undersigned.
2. Project. WILSON - WIBLE.
--------
3. Transferor. HUGHES INVESTMENTS.
-----------
4. Transferee. ALEXANDER HAAGEN PROPERTIES OPERATING PARTNERSHIP,
----------
L.P., a California limited partnership.
5. Consideration to Transferor. The total sum of $700,282
----------------------------
which is comprised of the following elements:
<TABLE>
<S> <C>
a. Existing Debt $369,068
b. Prepayment Fees and other Lender related expenses charged
against Transferor (estimated) $2,941
c. Commission obligations of Transferor paid by Transferee and
charged against Transferor $0
d. Transferor's share of Closing Costs (estimated) $ 25,000
e. Prorations charged against Transferor (estimated) $5,000
f. Miscellaneous $0
g. OP Units to be issued to Transferor $298,273
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
h. Cash $0
i. Total of Cash and OP Units $298,273
--------
h. Total Consideration $700,282
========
</TABLE>
The Total Consideration is subject to adjustment as provided herein and in
the General Conditions, the Addenda, the Exhibits and the Schedules.
6. Debt. Transferee shall not be required to allocate any debt to
----
Transferor as provided in Addendum V.
7. Special Provision:
-----------------
Transferee will pay off the Debt to which the Property is subject
immediately following the conveyance of the Property to Transferee. The
principal amount of such payment, any accrued but unpaid interest thereon and
any fees of Lender in connection with such payment shall be charged against
Transferor's Consideration. The principal amount of the Debt, the accrued but
unpaid interest thereon and any fees and/or prepayment penalties of Lender shall
be verified prior to the Closing Date by a fully executed Lender's Beneficiary
Statement in such form and substance as shall be reasonably satisfactory to and
approved in writing by Transferee.
Executed as of March 23, 1998.
Transferor: Hughes Investments, a California general
partnership
By: WWH Investments, Inc., a California
corporation, general partner
By:_____________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P.
a California limited partnership
By: Alexander Haagen Properties, Inc.,
a Maryland corporation, its General Partner
By: Fred Bruning
----------------------------
Its: Senior Vice President
---------------------------
2
<PAGE>
AGREEMENT OF TITLE COMPANY
The undersigned executes this Agreement for the purposes of acknowledging its
agreement to serve as escrow agent in accordance with the terms of this
Agreement and to acknowledge receipt of the Earnest Money from the Transferee.
First American Title Insurance Company
By:
---------------------------------------
Its:
--------------------------------------
Date: ________________________, 1998
Escrow No. N984016E
3
<PAGE>
EXHIBIT 10.41
AMENDMENT NO. 1 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(WILSON - WIBLE)
THIS AMENDMENT NO. 1 is made and entered into as of March 23, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 17 of the General Conditions to the Contribution
Agreement is hereby amended to provide in full as follows:
"17. CONDITIONS TO OBLIGATION TO CLOSE.
Notwithstanding anything to the contrary contained in this Agreement,
neither Transferor nor Transferee shall be obligated to consummate this
Agreement if, for any reason, Transferee will not, concurrently with the
closing of this transaction, also acquire the following real estate
projects: Loma Square, North County Plaza, El Centro Center, Vineyards
Marketplace, and Wilson Wible in Bakersfield ( the "Included Projects")."
<PAGE>
2. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
IN WITNESS WHEREOF, this Agreement has been entered into by the parties as
of the date first above written.
Transferor: Hughes Investments, a California general partnership
By: WWH Investments, Inc., a California corporation,
general partner
By:_____________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership, L.P.
a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Fred Bruning
----------------------------
Its: Senior Vice President
----------------------------
2
<PAGE>
EXHIBIT 10.42
AMENDMENT NO. 2 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(WILSON - WIBLE)
THIS AMENDMENT NO. 2 is made and entered into as of March 26, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 14 of Addendum I to the General Conditions to the
Contribution Agreement is hereby amended to provide in full as follows:
"14. CLOSING DATE. March 27, 1998, or such other later or earlier
date as Transferor and Transferee shall mutually agree."
2. PRORATION OF RECOVERABLE EXPENSES. Notwithstanding anything to the
contrary set forth in the Contribution Agreement or the General Conditions
thereto, Transferor and Transferee agree that Transferor shall for the period
from January 1, 1998, through March 31, 1998, be responsible to pay for
Recoverable Expenses for that period; provided, however, that all post-closing
adjustments required by paragraph 7 (a) (ii) shall continue to be required as
provided therein, except that the date of proration shall be as provided in this
paragraph 2.
3. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: Hughes Investments, a California general partnership
By: WWH Investments, Inc., a California corporation,
general partner
By:_____________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership, L.P.
a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Stuart J.S. Gulland
----------------------------
Its: Senior Vice President,
----------------------------
Chief Financial Officer
2
<PAGE>
EXHIBIT 10.43
CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(LOMA SQUARE)
The undersigned Transferor agrees to transfer the Property to the
undersigned Transferee and Transferee agrees to accept the transfer on the
following terms and conditions:
1. Incorporation by Reference. All of the terms and conditions of:
a. The General Conditions to Contribution Agreement (the "General
Conditions");
b. The Addenda to General Conditions to Contribution Agreement
(the "Addenda");
c. The Exhibits to General Conditions to Contribution Agreement
(the "Exhibits"); and
d. The Schedules to General Conditions to Contribution Agreement
(the "Schedules") which are attached hereto are incorporated by reference herein
as being the agreement of the undersigned.
2. Project. LOMA SQUARE
--------
3. Transferor. HUGHES/LOMA SQUARE ASSOCIATES
-----------
4. Transferee. ALEXANDER HAAGEN PROPERTIES OPERATING PARTNERSHIP,
L.P., a California limited partnership.
5. Consideration to Transferor. The total sum of $26,794,822/1/
---------------------------
which is comprised of the following elements:
a. Existing Debt $21,422,461
b. Assumption fee to Prudential Insurance Company $ 190,000
c. Commission obligations of Transferor paid by $ 133,974
Transferee and charged against Transferor
(subject to change in Transferor's sole discretion,
and as a charge solely to Transferor)
d. Transferor's share of Closing Costs (estimated) $ 25,000
e. Prorations charged against Transferor (estimated) $ 5,000
f. OP Units $ 5,018,387
/1/ The Term Sheet Consideration of $27,372,980 has been reduced by $228,158 to
offset for the above market interest rate of the Existing Debt against the
Property and by $350,000 to compensate for Transferee's assumption of the toxic
remediation on the Property, to the amount of $26,794,822.
<PAGE>
g. Cash $0
h. Total OP Units and Cash (being the aggregate of
the "Constituent Partner's Equity") $ 5,018,387
-----------
i. Total Consideration $26,794,822
===========
The Total Consideration is subject to adjustment as provided herein and in
the General Conditions, the Addenda, the Exhibits and the Schedules.
6. Allocation. The OP Units and Cash (subject to adjustment as provided
----------
in the preceding sentence) will be allocated among the direct and indirect
partners (the "Constituent Partners") of Transferor as follows:
<TABLE>
<CAPTION>
Percentage
of the aggregate
of the
Name of Constituent
Constituent OP Units Partners' allocated
Partner: (in $): Cash: Total: Equity: debt:
- --------- ------- ------ ------- ------ -----
<S> <C> <C> <C> <C> <C>
Hi-Loma $2,509,193 $0 $2,509,193 50.000% $ 600,000
Speer Family
Partnership $2,509,194 $0 $2,509,194 50.000% $8,000,000
---------- -- ---------- ------- ----------
Totals $5,018,387 $0 $5,018,387 100.000% $8,600,000
========== == ========== ======= ==========
</TABLE>
7. Special Provisions:
-------------------
a. Transferee will make a payment of principal on the existing debt
against the Property so that the unpaid balance will be $19,000,000 at the
Closing. As a condition to the Closing for the benefit of Transferee,
Transferor, prior to the Closing Date, shall obtain a signed written statement
from the holder of the Existing Debt (in such form and substance as shall be
reasonably satisfactory to Transferee) (i) which will set forth the amount of
unpaid principal, accrued but unpaid interest and fees payable to Lender in
connection with the assumption of the Existing Debt; (ii) which will state that
Lender will accept a pay down of principal to $19,000,000 (and the attendant
fee, if any, in connection with such pay down which fee, if any, must be
acceptable to Transferor and, if paid, will be charged against Transferor's
Consideration); (iii) which will confirm the payment terms and maturity date of
the Existing Debt; and (iv) which will confirm that the Existing Debt may be
paid in full without penalty on February 15, 1999.
b. Transferee will pay the assumption fee of Prudential Insurance Company
(in the amount set forth at paragraph 5. b. or in such other amount as shall be
approved by Transferor at or prior to the Closing Date) and all other reasonable
fees of Prudential Insurance Company in connection with the assumption. Such
payments made by Transferee shall be charged against the Transferor's
Consideration.
2
<PAGE>
c. The effectiveness of this agreement is contingent upon Transferor
being able to obtain the consent of Prudential Insurance Company to the
arrangements described in subparagraphs 7.a. and 7.b., above.
d. A portion of the Property is represented by a lease (the "Ground
Lease") between Catherine Higdon and Edmund Baum, as Lessor, and W. Arnet
Speer, as Lessee, dated November 14, 1961 as amended on December 8, 1961.
Transferor and Transferee agree to execute and deliver an assignment and
acceptance of the Ground Lease in such form as shall comply with the provisions
of Subparagraphs 26.B and 26.C of the Ground Lease and as otherwise shall be
reasonably requested by Transferee and satisfactory to the Title Company.
Transferee shall notify Lessor of the assignment as required by Subparagraph
26.A of the Ground Lease. As a condition to Closing, Transferor shall obtain an
estoppel certificate from the Lessor as to the terms and provisions of the
Ground Lease in such form as shall be reasonably satisfactory to Transferee.
e. The Consideration has been reduced by $350,000 to offset for the
fact that Transferee, not Transferor, shall be solely responsible for
remediation of soils contamination on the Property. Transferee agrees to
indemnify and hold Transferor and its partners and affiliates harmless from
obligations with respect to soils contamination on the Property and releases
Transferor and its partners from any liability to Transferee with respect to
soil contamination on the Property. As soon as invoices become available
following the Closing, Transferee shall reimburse Transferor for expenditures
made by Transferor pursuant to the Contract between Transferor and EST dated
January 15, 1998 through the date of the Closing (but not in excess, however, of
$40,000).
f. Prior to the Closing Date Transferor will deposit the sum of
$121,776 (the "Deposit") in a separate escrow account with Title Company
pursuant to an Escrow Agreement (which shall be in form and substance reasonably
satisfactory to Transferor and Transferee) which shall have the following basic
provisions: (i) each month Title Company shall disburse to Transferee from the
Deposit the amount of $6,998 (which is equivalent to and in lieu of rent in the
amount of $5,880 and contribution to common area maintenance contributions of
$1,118 on Space 10 C & D (the "Vacant Space")); (ii) if the Vacant Space is
leased pursuant to a lease or leases which require expenditures for tenant
improvements and leasing commissions, such expenditures shall be reimbursed to
Transferee by Title Company from the Deposit; (iii) the disbursements under
clause (i) shall be reduced to the extent that gross rents shall be received
from the Vacant Space and shall cease at such time as Transferee shall commence
receiving rents from Vacant Space in an amount equal to $6,998; (iv) when the
expenditures under clause (ii) have been paid and rents commence as described in
clause (iii), the balance of the Deposit shall be paid over by Title Company to
Transferor; and (iv) if rents shall not have commenced on the Vacant Space in an
amount equal to $6,998 within 1 year from the Closing Date, the balance of the
Deposit then remaining shall be paid over to Transferee.
g. Addendum V is supplemented as follows: The obligations of Speer
Family Partnership and HI-Loma under their respective Conforming Guaranties
shall be in the following ratio: Speer Family Partnership shall be solely
responsible for the top $7,400,000 of the Constituent Partners' share of the
amount by which Lender's Non-Guarantor Recovery (as said term is defined in
Addendum VI) is less than the Aggregate Guaranties (as said term is defined in
Addendum VI). After Speer Family Partnership has paid the initial $7,400,000 of
the Constituent Partners' share of the amount by which Lender's Non-Guarantor
Recovery is less than the Aggregate Guaranties, HI-Loma and
3
<PAGE>
Speer Family Partnership shall each be responsible for $600,000 of the bottom
$1,200,000 of the Constituent Partners' share of the amount by which Lender's
Non-Guarantor Recovery is less than the Aggregate Guaranties, to be payable by
HI-Loma and Speer Family Partnership proportionately. For example, if the Non
Guarantor Recovery was $8,000,000 less than the Aggregate Guaranties of
$8,600,000, and the Constituent Partners' share thereof is $8,000,000, Speer
Family Partnership would pay the top $7,400,000 of the amount due and HI-Loma
and Speer Family Partnership would each pay $300,000 of the bottom $600,000 of
the amount due.
h. The format for the contribution of the Property shall be as
follows: Transferor will convey the Property to Transferee. Transferor will
designate the Constituent Partners to be the recipients of the OP Units as is
shown in paragraph 6 above. The Constituent Partners proportionately will
assume the obligations of Transferor under the Representations and Warranties
and Transferor will be released from liability under the Representations and
Warranties. Notwithstanding the foregoing, each Constituent Partner shall be
solely responsible for his own investment representations and investor
suitability representations.
Executed as of March 23, 1998.
Transferor: HUGHES/LOMA SQUARE ASSOCIATES,
a California limited partnership
By: HI-Loma, a California general
partnership, general partner
By: Hughes Investments, a California
general partnership, general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: _______________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P., a California limited
partnership
By: Alexander Haagen Properties, Inc., a
Maryland corporation, its General Partner
By: Fred Bruning
------------------------------
Its: Senior Vice President
------------------------------
4
<PAGE>
AGREEMENT OF TITLE COMPANY
The undersigned executes this Agreement for the purposes of acknowledging its
agreement to serve as escrow agent in accordance with the terms of this
Agreement and to acknowledge receipt of the Earnest Money from the Transferee.
First American Title Insurance Company
By:
------------------------
Its:
------------------------
Date: ________________________, 1998
Escrow No. N 984018E
5
<PAGE>
EXHIBIT 10.44
AMENDMENT NO. 1 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(Loma Square)
THIS AMENDMENT NO. 1 is made and entered into as of March 23, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 17 of the General Conditions to the Contribution
Agreement is hereby amended to provide in full as follows:
"17. CONDITIONS TO OBLIGATION TO CLOSE.
Notwithstanding anything to the contrary contained in this Agreement,
neither Transferor nor Transferee shall be obligated to consummate this
Agreement if, for any reason, Transferee will not, concurrently with the
closing of this transaction, also acquire the following real estate
projects: Loma Square, North County Plaza, El Centro Center, Vineyards
Marketplace, and Wilson Wible in Bakersfield ( the "Included Projects")."
<PAGE>
2. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
IN WITNESS WHEREOF, this Agreement has been entered into by the parties as
of the date first above written.
Transferor: HUGHES/LOMA SQUARE ASSOCIATES,
a California limited partnership
By: HI-Loma, a California general partnership,
general partner
By: Hughes Investments, a California
general partnership, general partner
By: WWH Investments, Inc., a
California corporation, general
partner
By: ___________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P. a California limited
partnership
By: Alexander Haagen Properties, Inc., a
Maryland corporation, its General Partner
By: Fred Bruning
--------------------------
Its: Senior Vice President
--------------------------
2
<PAGE>
EXHIBIT 10.45
AMENDMENT NO. 2 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(Loma Square)
THIS AMENDMENT NO. 2 is made and entered into as of March 26, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 14 of Addendum I to the General Conditions to
the Contribution Agreement is hereby amended to provide in full as follows:
"14. CLOSING DATE. March 27, 1998, or such other later or earlier
date as Transferor and Transferee shall mutually agree."
2. PRORATION OF RECOVERABLE EXPENSES. Notwithstanding anything to the
contrary set forth in the Contribution Agreement or the General Conditions
thereto, Transferor and Transferee agree that Transferor shall for the period
from January 1, 1998, through March 31, 1998, be responsible to pay for
Recoverable Expenses for that period; provided, however, that all post-closing
adjustments required by paragraph 7 (a) (ii) shall continue to be required as
provided therein, except that the date of proration shall be as provided in this
paragraph 2.
3. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: HUGHES/LOMA SQUARE ASSOCIATES,
a California limited partnership
By: HI-Loma, a California general partnership,
general partner
By: Hughes Investments, a California general
partnership, general partner
By: WWH Investments, Inc., a California
corporation, general partner
By: ______________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership,
L.P. a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Stuart J.S. Gulland
----------------------------
Its: Senior Vice President
----------------------------
Chief Financial Officer
2
<PAGE>
EXHIBIT 10.46
CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(VINEYARDS)
The undersigned Transferor agrees to transfer the Property to the
undersigned Transferee and Transferee agrees to accept the transfer on the
following terms and conditions:
1. Incorporation by Reference. All of the terms and conditions of:
--------------------------
a. The General Conditions to Contribution Agreement (the "General
Conditions");
b. The Addenda to General Conditions to Contribution Agreement
(the "Addenda");
c. The Exhibits to General Conditions to Contribution Agreement
(the "Exhibits"); and
d. The Schedules to General Conditions to Contribution Agreement
(the "Schedules")
which are attached hereto are incorporated by reference herein as being the
agreement of the undersigned.
2. Project. VINEYARDS MARKETPLACE.
--------
3. Transferor. HUGHES MILLIKEN ASSOCIATES.
-----------
4. Transferee. ALEXANDER HAAGEN PROPERTIES OPERATING PARTNERSHIP, L.P.,
-----------
a California limited partnership.
<TABLE>
<CAPTION>
<S> <C>
5. Consideration to Transferor. The total sum of $7,299,569
----------------------------
which is comprised of the following elements:
a. Existing Debt $5,350,937
b. Prepayment Fees and other Lender related expenses
charged against Transferor (estimated) $ 1,000
c. Commission obligations of Transferor paid by Transferee and
charged against Transferor $ 0
d. Transferor's share of Closing Costs (estimated) $ 25,000
e. Prorations charged against Transferor (estimated) $ 5,000
f. Miscellaneous $ 0
g. OP Units $1,917,632
h. Cash $ 0
i. Total of Cash and OP Units $1,917,632
----------
h. Total Consideration $7,299,569
==========
</TABLE>
<PAGE>
The Total Consideration is subject to adjustment as provided herein and in
the General Conditions, the Addenda, the Exhibits and the Schedules.
6. Allocated Debt. Allocated debt," as that term is used in Addendum V,
--------------
shall mean debt with a principal amount of $200,000.
7. Special Provisions:
------------------
a. Transferee will pay off the Debt to which the Property is subject
immediately following the conveyance of the Property to Transferee. The
principal amount of such payment and any fees of Lender in connection with such
payment (subject to the reasonable approval of Transferor) shall be charged
against Transferor's Consideration. The principal amount of the debt, the
accrued but unpaid interest and the amount of any fees and expenses (including
prepayment penalties, if any) to be charged by Lender shall be verified prior to
the Closing Date by a fully executed Lender's Beneficiary's Statement in such
form as shall be reasonably satisfactory to and approved in writing by
Transferee.
b. Parcels 1 and 2 ( the "Retained Parcels") of Parcel Map No. 12263,
City of Rancho Cucamonga, County of San Bernardino per plat recorded in Book 151
of Parcel Maps, Pages 54 to 58, inclusive, official records of said County are
not included within the definition of the Property and will be retained by
Transferor subject to the remaining provisions of this subparagraph 7.b.
Transferor hereby grants Transferee an option (the "Option") to purchase the
Retained Parcels from Transferor on the following terms and conditions:
1. The Option may be exercised at any time after the Closing Date.
2. The Option will expire if the Option is not exercised on or
before two (2) years following the Closing Date.
3. The Option Price will be $900,000.
4. Transferor shall have the right to take all or any part of the
Option Price in Cash or in OP Units (under a contribution agreement containing
essentially the same provisions as this Agreement excepting only that the value
of the OP Units shall be based on the average closing value of AHP Stock during
the 5 trading days immediately prior to the exercise of the Option) or any
combination thereof.
c. Transferor and Transferee will cooperate with each other regarding
changes to the existing Reciprocal Easement Agreement against the Property and
the Retained Parcels which shall be reasonably necessary to accommodate use of
the respective parcels as long as such changes are not unreasonable.
d. Transferor shall take full responsibility for all costs and
expenses incident to (and shall indemnify and hold Transferee harmless from) the
cost of obtaining a No Further Action letter (the "NFA") from the appropriate
governmental agency with respect to the dry cleaner on the Property. Hughes
Investments guarantees the performance of Transferor pursuant to the foregoing
sentence. Hughes Investments shall guarantee the performance of Transferor
pursuant to the foregoing sentence in a guarantee which shall be in form and
substance reasonably satisfactory to Transferee to be delivered at the Closing.
2
<PAGE>
e. Notwithstanding the provisions of Addendum V, the debt which
Transferor will guarantee shall be debt currently secured by real property
---------
currently owned by Hughes North County Associates and anticipated to be
- --------- ---------------------
transferred to Transferee concurrently with the Closing hereunder, which real
- -----------------------------------------------------------------
property shall be deemed to be the Property solely with respect to the
provisions of Addendum V.
Executed as of March 23, 1998.
Transferor: HUGHES MILLIKEN ASSOCIATES,
a California general partnership
By: HI-Victoria, a California general
partnership, general partner
By: Hughes Investments,
a California general
partnership, general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: __________________
William W. Hughes, Jr.
Its: President
Guarantor: HUGHES INVESTMENTS, a California general
partnership
By: WWH Investments, Inc., a California
corporation, general partner
By: _____________________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P. a California limited partnership
By: Alexander Haagen Properties, Inc., a
Maryland corporation, its General Partner
By: Fred Bruning
____________________________
Its: Senior Vice President
____________________________
3
<PAGE>
AGREEMENT OF TITLE COMPANY
The undersigned executes this Agreement for the purposes of acknowledging its
agreement to serve as escrow agent in accordance with the terms of this
Agreement and to acknowledge receipt of the Earnest Money from the Transferee.
First American Title Insurance Company
By: ________________________
Its: ________________________
Date: ________________________, 1998
Escrow No. N 984022E
4
<PAGE>
EXHIBIT 10.47
AMENDMENT NO. 1 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(Vineyards)
THIS AMENDMENT NO. 1 is made and entered into as of March 23, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 17 of the General Conditions to the Contribution
Agreement is hereby amended to provide in full as follows:
"17. CONDITIONS TO OBLIGATION TO CLOSE.
Notwithstanding anything to the contrary contained in this Agreement,
neither Transferor nor Transferee shall be obligated to consummate this
Agreement if, for any reason, Transferee will not, concurrently with the
closing of this transaction, also acquire the following real estate
projects: Loma Square, North County Plaza, El Centro Center, Vineyards
Marketplace, and Wilson Wible in Bakersfield ( the "Included Projects")."
<PAGE>
2. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: HUGHES MILLIKEN ASSOCIATES,
a California general partnership
By: HI-Victoria, a California general partnership,
general partner
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: ___________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership,
L.P. a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Fred Bruning
------------------------------
Its: Senior Vice President
------------------------------
2
<PAGE>
EXHIBIT 10.48
AMENDMENT NO. 2 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(Vineyards)
THIS AMENDMENT NO. 2 is made and entered into as of March 26, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 14 of Addendum I to the General Conditions to the
Contribution Agreement is hereby amended to provide in full as follows:
"14. CLOSING DATE. March 27, 1998, or such other later or earlier
date as Transferor and Transferee shall mutually agree."
2. PRORATION OF RECOVERABLE EXPENSES. Notwithstanding anything to the
contrary set forth in the Contribution Agreement or the General Conditions
thereto, Transferor and Transferee agree that Transferor shall for the period
from January 1, 1998, through March 31, 1998, be responsible to pay for
Recoverable Expenses for that period; provided, however, that all post-closing
adjustments required by paragraph 7 (a) (ii) shall continue to be required as
provided therein, except that the date of proration shall be as provided in this
paragraph 2.
3. NO OTHER CHANGES. Except as expressly amended hereby, the Contribution
Agreement shall remain in full force and effect without any other changes or
alterations of any nature whatsoever.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: HUGHES MILLIKEN ASSOCIATES,
a California general partnership
By: HI-Victoria, a California general partnership,
general partner
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: ___________________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership,
L.P. a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Stuart J.S. Gulland
------------------------------
Its: Senior Vice President,
------------------------------
Chief Financial Officer
2
<PAGE>
EXHIBIT 10.49
CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(NORTH COUNTY)
The undersigned Transferor agrees to transfer the Property to the
undersigned Transferee and Transferee agrees to accept the transfer on the
following terms and conditions:
1. Incorporation by Reference. All of the terms and conditions of:
--------------------------
a. The General Conditions to Contribution Agreement (the "General
Conditions");
b. The Addenda to General Conditions to Contribution Agreement (the
"Addenda");
c. The Exhibits to General Conditions to Contribution Agreement (the
"Exhibits"); and
d. The Schedules to General Conditions to Contribution Agreement
(the "Schedules")
which are attached hereto are incorporated by reference herein as being the
agreement of the undersigned.
2. Project. NORTH COUNTY PLAZA.
--------
3. Transferor. HUGHES NORTH COUNTY ASSOCIATES.
-----------
4. Transferee. ALEXANDER HAAGEN PROPERTIES OPERATING
----------
PARTNERSHIP, L.P., a California limited partnership.
5. Consideration to Transferor. The total sum of $18,481,641/1/
----------------------------
which is comprised of the following elements:
a. Debt assumed or taken subject to $16,422,024
b. Assumption Fee and other Lender related expenses
charged against Transferor $ 144,220
c. Commission obligations of Transferor paid by
Transferee and charged against Transferor $ 90,032
d. Transferor's share of Closing Costs (estimated) $ 25,000
e. Prorations charged against Transferor (estimated) $ 5,000
f. Price Reduction to cover cost to remove and replace
storm drain piping $ 276,862
g. OP Units $1,518,503
h. Cash $ 0
----------
- ---------------------------
/1/ The Term Sheet Consideration of $20,001,111 has been reduced by 1,519,470
to $18,481,641 to offset for the above market interest rate of the Existing Debt
against the Property.
<PAGE>
<TABLE>
<S> <C>
i. Total OP Units and Cash (being the aggregate of the
"Constituent Partner's Equity") $ 1,518,503
-----------
j. Total Consideration $18,481,641
===========
</TABLE>
The Total Consideration is subject to adjustment as provided herein and in
the General Conditions, the Addenda, the Exhibits and the Schedules.
6. Allocation. The OP Units and Cash (subject to adjustment as provided
----------
in the preceding sentence) will be allocated among the direct and indirect
partners (the "Constituent Partners") of Transferor as follows:
<TABLE>
<CAPTION>
Percentage
of the aggregate
of the
Constituent
Name of Constituent OP Units Partners' allocated
Partner: (in $): Cash: Total: Equity: debt:
- -------- -------- ----- ------ ------ ---------
<S> <C> <C> <C> <C> <C>
HI-NC $759,251 $0 $759,251 50.0% $1,900,000
The Harry J. L. Frank,
Jr. and Margaret S. $189,813 $0 $189,813 12.5% $ 950,000
Frank Family Trust
U/A 5/9/91
Cecile C. Bartman,
Trustee under the
Will of Bernard
Citron, deceased $189,813 $0 $189,813 12.5% $ 900,000
Bartfam, a California
limited partnership $189,813 $0 $189,813 12.5% $ 800,000
CJJ Limited
Partnership, a
California limited
partnership $189,813 $0 $189,813 12.5% $ 350,000
-------- -- -------- ------- ----------
Totals $1,518,503 $0 $1,518,503 100.000% $4,900,000
========== == ========== ======= ==========
</TABLE>
7. Special Provisions:
------------------
a. Transferee will pay down principal on the existing debt against
the Property by $2,000,000 immediately following the Closing. As a condition to
the Closing, the principal amount of the debt, the accrued but unpaid interest,
the assumption fees, the prepayment fee if any in connection with the pay down
of $2,000,000 of principal (which prepayment fee, if any, must be agreed to by
both Transferor and Transferee and, if
2
<PAGE>
approved, will be charged against Transferor's Consideration), the fact that the
Lender will allow a pay down of $2,000,000 of principal and the debt service
schedule, maturity date and date on which remaining principal may be paid
without penalty shall be verified prior to the Closing Date by a fully executed
Lender's Beneficiary Statement in such form and substance as shall be reasonably
satisfactory to and approved in writing by Transferee. In addition, the terms
and conditions of Transferee's assumption of the Existing Debt must be
reasonably satisfactory to Transferee.
b. Transferee will pay the assumption fee to Traveler's Insurance
Company in the amount of $144,220 (or in such other reasonable amount as shall
be approved by Transferor at or prior to the Closing Date) in connection with
the reduction of principal described in subparagraph 7.a. above. Such payment
made by Transferee shall be charged against Transferor's Consideration.
c. The effectiveness of this agreement is contingent upon
Transferor being able to obtain the consent of Traveler's Insurance Company to
the arrangements described in subparagraphs 7.a. and 7.b. above. Transferee
agrees to use its reasonable best efforts to cause Traveler's Insurance Company
to subordinate the lien of its Deed of Trust to the easement to be created
pursuant subparagraph 7.d. below both before and after the Closing Date. If
Transferee is not able to obtain such subordination, then Transferee covenants
with Transferor that Transferee will make all scheduled payments of principal
and interest and to pay the Existing Debt to Traveler's Insurance Company when
due.
d. At the Closing, Transferor and NC II will record a Declaration
of Restrictive Covenant Agreement and Grant of Easement ("Agreement")
containing, without limitation, the following terms and conditions:
1. The creation of an easement for ingress and egress in favor
of the North County II property ("NC II Property") over and across the existing
roadways on the Property. In addition, NC II will be granted a Bridge and
Temporary Construction Easement to construct a bridge over Buena Vista Creek
West of Building A. Transferee agrees not to default on any liens or
encumbrances which have priority over such easement and, further, agrees not to
execute any leases or other agreements which are inconsistent with such
easement.
2. The Agreement will provide (i) that the costs of installing
the improvements (including the bridge) for the newly created roadway easements
at the Westerly end of the Property will be borne 100% by NC II, (ii) that the
costs of maintaining and repairing that portion of the newly created roadway
easements (not including property taxes) located on the Property will be borne
50% by Transferee and 50% by NC II (provided, however, that the cost of
maintaining the bridge and the improvementslocated on NC II Property shall be
borne 100% by NC II), and (iii) that the Property's share of the costs of the
existing easement (the "PCR Easement") and proposed bridge (the "Easterly
Improvements") along the Eastern boundary of the Property (located on land owned
by Plaza Camino Real) shall be borne as follows: (x) The costs of installing the
Easterly Improvements (including the Easterly bridge) will be borne 100% by NC
II; (y) the benefited property's share of the costs (as such costs are defined
in the PCR Easement) of maintaining and repairing the PCR Easement (not
including property taxes) will be borne
3
<PAGE>
50% by Transferee and 50% by NC II and (z) the cost of maintaining the bridge
located on the Easterly Improvements and that portion of the Easterly
Improvements which are located on NCII Property shall be borne 100% by NC II.
f. Transferee agrees that it will not oppose or object to any
proposed development of the NCII Property based on the intended use, the traffic
impact or any other aspect of the proposed development; provided, however, that
Transferee may object to a proposed development which offends common decency or
could result in a dangerous or nuisance condition having a materially adverse
impact on Transferee's use of the Property. Transferee may not object to a
proposed use because it might attract tenants which compete with tenants on the
Property. The provisions of this subparagraph 7.5. shall not be a covenant
running with the land, shall run in favor only of NCII and not any of its
assignees or transferees, shall not be recorded against the Property in any form
and shall entirely cease and terminate when the present partners of NCII cease
to have any interest in the NCII Property.
g. Transferee will receive a credit against Transferor's
Consideration in the amount of $276,862 to cover the cost of removing and
replacing the storm drain piping on the Property. Prior to the Closing Date,
Transferor will deposit the sum of $24,000 (the "Deposit") in a separate escrow
account with the Title Company pursuant to an Escrow Agreement (which shall be
in form and substance satisfactory to Transferor and Transferee) which shall
have the following basic provisions: (i) to the extent that Transferee's cost to
remove and repair the storm drain piping shall exceed $276,862 (the "Overrun"),
the Title Company shall disburse to Transferee the amount of the Overrun up to
the maximum amount of the Deposit; (ii) prior to making a request for a
disbursement of funds from the Deposit, Transferee shall give written notice to
Transferor and furnish reasonably adequate back up information supporting such
request; (iii) Transferor agrees that it will not object to a disbursement from
the Deposit unreasonably; and (iv) the unexpended portion of the Deposit shall
be paid over to Transferor on December 30, 1998.
h. In addition to the Consideration described in paragraph 5 above,
Transferee shall pay to the Constituent Partners (in the ratio set forth in the
fifth column of paragraph 6), additional consideration ("Additional
Consideration") in the amount of $600,000. The Additional Consideration shall be
paid on the date (the "Second Payment Date") which is the earlier to occur of
(i) two years following the Closing Date, or (ii) the date on which a
Certificate of Occupancy is issued for any space located on Pad R (which is
included within the legal description of the Property). The Additional
Consideration shall be paid in the form of a number of OP Units determined as
follows: divide the Additional Consideration of $600,000 by the average closing
price of shares of stock of AHP for the five trading days immediately preceding
the Second Payment Date.
i. Notwithstanding the provisions of Addendum V, Transferee may
allow Hughes Milliken Associates ("HMA") to guarantee $200,000 (the "HMA
Guarantee") of debt against the Property in addition to the guarantees of the
Constituent Partners so that the Aggregate Guaranties will consist of the
amounts shown in the sixth column of paragraph 6 plus the HMA Guarantee.
Accordingly, for purposes of Addendum V, (including, without limitation, the
provisions applicable to Substituted Debt), HMA shall be deemed to be a
Constituent Partner of Transferor and the aggregate guaranties of the
4
<PAGE>
Constituent Partners (including HMA as a deemed Constituent Partner) shall be
$5,100,000.
j. The format for the contribution of the Property shall be as
follows: Transferor will convey the Property to Transferee. Transferor will
designate the Constituent Partners to be the recipients of the OP Units as is
shown in paragraph 6 above. The Constituent Partners severally and
proportionately will assume the obligations of Transferor under the
Representations and Warranties and Transferor will be released from liability
under the Representations and Warranties. Notwithstanding the foregoing, each
Constituent Partner shall be solely responsible for his own investment
representations and investor suitability representations.
Executed as of March 23, 1998.
Transferor: HUGHES NORTH COUNTY ASSOCIATES,
a California general partnership
By: HI-NC, a California general
partnership, general partner
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc.,
a California corporation,
general partner
By: _______________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P.
a California limited partnership
By: Alexander Haagen Properties, Inc.,
a Maryland corporation, its General
Partner
By: Fred Bruning
-----------------------
Its: Senior Vice President
----------------------
5
<PAGE>
AGREEMENT OF TITLE COMPANY
The undersigned executes this Agreement for the purposes of acknowledging its
agreement to serve as escrow agent in accordance with the terms of this
Agreement and to acknowledge receipt of the Earnest Money from the Transferee.
First American Title Insurance Company
By:
----------------------------------
Its:
----------------------------------
Date: ________________________, 1998
Escrow No. N 984021E
6
<PAGE>
EXHIBIT 10.50
AMENDMENT NO. 1 TO CONTRIBUTION
AGREEMENT - BASIC ECONOMIC TERMS
(North County)
THIS AMENDMENT NO. 1 is made and entered into as of March 23, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 17 of the General Conditions to the Contribution
Agreement is hereby amended to provide in full as follows:
"17. CONDITIONS TO OBLIGATION TO CLOSE.
Notwithstanding anything to the contrary contained in this Agreement,
neither Transferor nor Transferee shall be obligated to consummate this
Agreement if, for any reason, Transferee will not, concurrently with the
closing of this transaction, also acquire the following real estate
projects: Loma Square, North County Plaza, El Centro Center, Vineyards
Marketplace, and Wilson Wible in Bakersfield ( the "Included Projects")."
<PAGE>
2. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: HUGHES NORTH COUNTY ASSOCIATES,
a California general partnership
By: HI-NC, a California general partnership,
general partner
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc., a
California corporation,
general partner
By: _______________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating
Partnership, L.P. a California limited
partnership
By: Alexander Haagen Properties, Inc., a
Maryland corporation, its General Partner
By: Fred Bruning
--------------------------------
Its: Senior Vice President
--------------------------------
2
<PAGE>
EXHIBIT 10.51
AMENDMENT NO. 2 TO CONTRIBUTION AGREEMENT - BASIC ECONOMIC TERMS
(North County)
THIS AMENDMENT NO. 2 is made and entered into as of March 26, 1998, by and
between the undersigned Transferee and the undersigned Transferor with respect
to the following facts:
RECITALS
A. Transferor and Transferee have made and entered into that certain
Contribution Agreement - Basic Economic Terms (the "Contribution Agreement"), of
even date herewith, pursuant to which Transferee has agreed to convey to
Transferor certain real property as more particularly described therein.
B. Attached to the Contribution Agreement and made a part thereof is that
certain General Conditions to Agreement (the "General Conditions"). Transferor
and Transferee desire hereby to amend said General Conditions in the manner
provided for herein.
TERMS AND CONDITIONS
NOW THEREFORE, in consideration of the foregoing recitals, the mutual
covenants contained herein, and other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. AMENDMENT. Paragraph 14 of Addendum I to the General Conditions to
the Contribution Agreement is hereby amended to provide in full as follows:
"14. CLOSING DATE. March 27, 1998, or such other later or earlier date
as Transferor and Transferee shall mutually agree."
2. PRORATION OF RECOVERABLE EXPENSES. Notwithstanding anything to the
contrary set forth in the Contribution Agreement or the General Conditions
thereto, Transferor and Transferee agree that Transferor shall for the period
from January 1, 1998, through March 31, 1998, be responsible to pay for
Recoverable Expenses for that period; provided, however, that all post-closing
adjustments required by paragraph 7 (a) (ii) shall continue to be required as
provided therein, except that the date of proration shall be as provided in this
paragraph 2.
3. NO OTHER CHANGES. Except as expressly amended hereby, the
Contribution Agreement shall remain in full force and effect without any other
changes or alterations of any nature whatsoever.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into by the parties
as of the date first above written.
Transferor: HUGHES NORTH COUNTY ASSOCIATES,
a California general partnership
By: HI-NC, a California general partnership, general
partner
By: Hughes Investments,
a California general partnership,
general partner
By: WWH Investments, Inc., a California
corporation, general partner
By: _______________________
William W. Hughes, Jr.
Its: President
Transferee: Alexander Haagen Properties Operating Partnership,
L.P., a California limited partnership
By: Alexander Haagen Properties, Inc., a Maryland
corporation, its General Partner
By: Stuart J.S. Gulland
---------------------------------
Its: Senior Vice President,
--------------------------------
Chief Financial Officer
2
<PAGE>
EXHIBIT 10.52
GENERAL CONDITIONS
------------------
TO
--
CONTRIBUTION AGREEMENT
----------------------
These are the General Conditions (the "General Conditions") to the
Contribution Agreement - Basic Economic Terms (the "Agreement") dated as of
January 16, 1998 between Transferor and Transferee (as defined in the Agreement)
regarding the Project (as defined in the Agreement).
Transferor, Transferee and Title Company hereby agree as follows:
1. DEFINITIONS.
Terms used in the Agreement, the General Conditions, the Addenda, the
Exhibits and the Schedules shall have the meanings set forth in Addendum I
attached hereto.
2. AGREEMENT TO ACQUIRE AND CONTRIBUTE.
Subject to and upon the terms and conditions herein set forth and the
representations and warranties contained herein, Transferor agrees to transfer
the Property to Transferee, and Transferee agrees to acquire the Property from
Transferor.
3. CONSIDERATION.
Transfer and Transferee agree that the total Consideration for the transfer
of the Property shall be as set forth in the Agreement.
(a) The Consideration shall be comprised of the following components:
(i) EARNEST MONEY DEPOSIT.
Within two (2) business days of the Delivery Date, Transferee
shall deposit the Earnest Money in escrow with the Title Company. The
Earnest Money shall be held in a federally insured interest-bearing
account and interest accruing thereon shall be for the account of
Transferee. The Earnest Money shall be in the form of cash,
certificates of deposit or letters of credit issued by major national
banks. In the event the transaction contemplated hereby is
consummated, the Earnest Money plus interest accrued thereon shall be
credited against Transferee's payment obligations hereunder.
(ii) THE LOAN AND OTHER OBLIGATIONS.
At the Closing, Transferee will take title to the Property
subject to the Loan and subject to the other obligations of Transferee
which are shown on
1
<PAGE>
Schedule 11. The aggregate net amounts payable on such financing shall
be a charge against the Consideration for the transfer of the
Property. Transferor shall have the right to approve the amounts of
such payments, which approval shall not be unreasonably withheld and
delivered to Transferee prior to the Closing. The amount of such
financing shall be paid by Transferee from funds deposited by
Transferee in Escrow. Any prepayment penalty or similar charge shall
be the obligations of Transferor.
(iii) OP UNITS.
A number of OP Units equal to the amount specified in
subparagraph 5 (g) of the Agreement (as allocated in the second column
of paragraph 6 of the Agreement) divided by $16.075.
(iv) CASH.
Immediately available funds, in an amount equal to the
Consideration (as allocated in the second column of paragraph 6 of the
Agreement), less (i) the Earnest Money Deposit, (ii) the amount paid
by Transferee under Section 3(a)(ii) above and (iii) the OP Units, as
more fully described above.
(b) ADJUSTMENTS. All adjustments to the Consideration as provided in
these General Conditions shall be made between the OP Units portion and the
Cash portion as Transferor shall direct.
(c) WITHHOLD IF TRANSFEROR A FOREIGN PERSON.
Transferor acknowledges and agrees that, if Transferor is a foreign
person, Transferee may be required to withhold a portion of the
Consideration pursuant to Section 1445 of the Internal Revenue Code or
comparable provisions of the California Revenue and Taxation Code (with
respect to persons who are not California residents) or similar laws or
regulations of other states. Any amount properly so withheld by Transferee
shall be deemed to have been paid by Transferee as part of the
Consideration, and Transferor's obligation to consummate the transactions
contemplated herein shall not be excused, reduced, terminated or otherwise
affected thereby. Transferee shall not withhold any portion of the
Consideration if Transferor executed FIRPTA certificates and any equivalent
certificates and/or affidavits required under applicable state law.
4. DUE DILIGENCE.
4.1 TRANSFEREE'S DUE DILIGENCE. As more fully provided below,
Transferor agrees to assist and cooperate with Transferee in obtaining access to
the Property and certain documents relating thereto for purposes of inspection
and due diligence.
2
<PAGE>
(a) PHYSICAL INSPECTION OF THE PROPERTY.
At any time(s) reasonably requested by Transferee following the
Effective Date and prior to Closing, Transferor shall afford authorized
representatives of Transferee reasonable access to the Property for
purposes of satisfying Transferee with respect to the representations,
warranties and covenants of Transferor contained herein and with respect to
the satisfaction of any Conditions Precedent to the Closing, including
without limitation the taking of soil borings by a reputable consultant
providing insurance which is reasonably acceptable to Transferor; provided,
however, that Transferee shall use commercially reasonable efforts not to
unreasonably disturb or interfere with the rights of Tenants. Transferee
hereby agrees to indemnify and hold Transferor harmless from any damage or
injury to persons or property caused by Transferee or its authorized
representatives during their entry and investigations prior to the Closing.
In the event this Agreement is terminated Transferee shall restore the
property to substantially the condition in which it was found. This
indemnity shall survive the termination of this Agreement or the Closing,
as applicable. The Consideration assumes that the Property will be free
from any environmental contamination and/or any material physical defects
as disclosed on Transferee's engineering reports. In the event that
Transferor or Transferee discovers any such contamination and/or material
defects, the Consideration hereunder will be adjusted to reflect the costs
to remediate or cure the defects, in an amount mutually acceptable to
Transferor and Transferee. If Transferor and Transferee cannot agree on
such adjustment amount (and neither Transferor nor Transferee shall be
deemed to have an obligation to so agree), either party hereto shall have
the right to terminate this transaction.
(b) CONTACTS WITH PROPERTY MANAGERS AND TENANTS.
At any time(s) reasonably requested by Transferee following the
Effective Date and prior to Closing, Transferee may contact and interview
the property manager, leasing agents and/or Tenants, provided that such
contacts or interviews shall occur only after reasonable oral or written
notice to Transferor and Transferor may be present during any interview.
Transferee agrees not to contact any holders of obligations secured by the
Property unless Transferor shall first have consented in writing to such
contact and such contact shall only be for the purpose of verifying
balances and other terms of the loan documents.
(c) DELIVERY OF DOCUMENTS AND RECORDS.
Transferor shall deliver the Due Diligence Materials to Transferee
within five (5) days after the Effective Date.
(d) REJECTION OF SERVICE CONTRACTS.
Transferee shall be deemed to have rejected all Service Contracts
unless, on or before the Approval Date, Transferee has notified Transferor
in writing that Transferee wishes to assume any such Service Contracts and
identifying which of such Service Contracts are to be assumed.
3
<PAGE>
(e) NO ASSUMPTION OF RENEWAL OR OPTION COMMISSIONS.
Transferee specifically disclaims any liability for brokerage
commissions that may be payable upon the renewal or extension of the term
of any Lease, whether pursuant to the exercise of an option or otherwise.
(f) TRANSFEREE'S RIGHT TO TERMINATE.
At any time up to the Approval Date, Transferee has the unqualified
right to terminate this Agreement and obtain a refund of any and all
amounts paid hereunder to Title Company or to Transferor, subject to
Transferee's obligations to return Due Diligence Materials to Transferor as
provided in Section entitled "Conditions to Closing."
4.2 TRANSFEROR'S DUE DILIGENCE.
(a) INSPECTION AND ACCESS.
Prior to the date hereof, Transferee has given Transferor full
access to all requested and available Due Diligence Materials regarding
Transferee's properties, business operations and financial condition.
Transferee agrees to provide Transferor with any further such information
as and when such information is available to Transferee after the date
hereof including but not limited to information regarding Transferee's
management plan (defined herein as the choice of a new Chief Executive
Officer, new management personnel and a management succession plan) to the
full extent as is provided to Transferee in paragraph 4 above. In addition,
Transferee shall obtain and furnish to Transferor all information available
to Transferee with respect to the model and strategies of Lazard Freres
with respect to Transferee.
(b) TRANSFEROR'S RIGHT TO TERMINATE
At any time prior to the Approval Date, Transferor has the
unqualified right to terminate this Agreement if Transferor shall not be
satisfied with such additional information as is provided after the date
hereof.
5. CONDITIONS TO CLOSING.
(a) TRANSFEREE'S CONDITIONS PRECEDENT.
Transferee's Conditions Precedent as set forth below are precedent to
Transferee's obligation to acquire the Property. The Transferee's
Conditions Precedent are intended solely for the benefit of Transferee. If
any of the Transferee's Conditions Precedent are not satisfied, Transferee
shall have the right in its sole discretion either to waive the
Transferee's Conditions Precedent and proceed with the acquisition or
terminate this Agreement by written notice to Transferor and the Title
Company. If Transferee shall proceed with the acquisition notwithstanding
the failure of a condition to be satisfied, Transferee shall be deemed to
have waived such condition.
4
<PAGE>
(i) APPROVAL OF TITLE.
On or prior to a date (the "Title Approval Date") which is five
(5) business days after the execution of this Agreement, Transferee
shall advise Transferor what exceptions to title, if any, will be
accepted by Transferee. At such time, Schedule 2, showing the
Permitted Exceptions, and Schedule 3, showing the required
Endorsements, shall be prepared and initialed by Transferor and
Transferee. Transferor shall have three (3) business days after
receipt of Transferee's objections to give to Transferee: (A) written
notice that Transferor will remove such objectionable exceptions on or
before the Closing Date; or (B) written notice that Transferor elects
not to cause such exceptions to be removed. Transferor's failure to
give notice to Transferee within the three (3) business day period
shall be deemed to be Transferor's election not to cause such
exceptions to be removed. If Transferor gives Transferee notice or is
otherwise deemed to have elected to proceed under clause (B),
Transferee shall have until the Closing Date to elect to proceed with
the transaction or terminate this Agreement. If Transferee fails to
give Transferor notice of its election on or before the Closing Date
and the Closing does not otherwise occur, Transferee shall be deemed
to have elected to terminate this Agreement. If Transferor gives
notice pursuant to clause (A) and fails to remove any such
objectionable exceptions from title prior to the Closing Date, and
Transferee is unwilling to take title subject thereto, Transferor
shall be in default and Transferee shall have the rights and remedies
set forth in the Section entitled "non-Consummation of the
Transaction."
(ii) REVIEW OF THE PROPERTY, DUE DILIGENCE MATERIALS AND
DISCLOSURES.
Transferee's completion of all inspections and review of the
Property, the Due Diligence Materials, and all matters disclosed by
Transferor hereunder, and approval thereof, within the Due Diligence
Period.
(iii) LEASES.
Except as shown on Schedule II.D.3. and as may be approved by
Transferee, all of the Leases shall be in full force and effect,
without default thereunder by either tenant or landlord, and no tenant
shall be the subject of a proceeding under any Creditors Rights Laws.
(iv) REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Transferor and of the
Constituent Partners contained herein and in all Addenda, Exhibits and
Schedules hereto shall be true and correct as of the Closing Date as
though made at and as of the Closing Date, and Transferor's covenants
under this Agreement shall be satisfied as of the Closing Date (to the
extent such covenants are to be satisfied as of the Closing Date), and
Transferee shall have received at the closing a Certificate in the
form of Exhibit H hereto,
5
<PAGE>
dated as of the Closing Date and executed on behalf of Transferor by
executive officers of Transferor or of the respective general partners
of Transferor, as applicable, certifying as to the fulfillment of the
conditions set forth in this Subsection.
(v) CONVEYANCES BY TRANSFEROR.
At the Closing, Transferor shall convey to Transferee all of its
right, title and interest to the Property by executing and delivering
all documents required to be delivered by Transferor pursuant to the
Section entitled "Closing and Escrow."
(vi) TITLE POLICY.
Title Company shall be committed to issue the Title Policy with
the Required Endorsements at Closing, showing title to the Real
Property vested in Transferee, subject only to the Permitted
Exceptions. On or before the Closing, Transferor shall cause the
Title Company to deliver to Transferee a certification that, in
issuing the Title Policy, the Title Company has not relied on any
representations or indemnities of Transferor or any of its affiliates
(except as disclosed in such certification).
(vii) NO FINANCING STATEMENTS.
Transferee shall be satisfied that, as of the Closing, there is
no outstanding financing statement showing Transferor as debtor filed
in accordance with the Uniform Commercial Code of any applicable
jurisdiction with respect to the Property except for any financing
statements approved by Transferee prior to the Approval Date or
relating to the Loan.
(viii) TENANT ESTOPPEL CERTIFICATES.
Transferor obtaining and delivering to Transferee the Tenant
Estoppel Certificates on or before 3 calendar days prior to the
Closing Date.
(ix) PROPERTY CONDITION.
The physical condition of the Real Property shall be
substantially the same on the Closing Date as on the Effective Date,
reasonable wear and tear and loss by casualty excepted.
(x) TERMINATION OF AGREEMENTS.
Immediately following the Approval Date, Transferor shall give
written notice of termination of all property management, leasing
brokerage agreements and Service Contracts (except those specifically
assumed by Transferee in writing) affecting the Property, and such
termination shall be without cost or expense to Transferee.
6
<PAGE>
(b) DEEMED APPROVAL OF CONDITIONS.
In the event that any party having the right of cancellation hereunder
based on failure of a condition precedent set forth herein does not inform
the other party and Title Company in writing of its disapproval of any
condition precedent prior to the Closing, such condition precedent shall be
deemed to have been satisfied, approved or waived, effective as of the
Closing; provided that a party shall not be deemed to have waived any such
claim for breach of any representation or warranty by the other party
unless such party has Actual Knowledge of such breach prior to Closing and
expressly waives such matter or breach or both in writing.
(c) RETURN OF MATERIALS.
Upon termination of this Agreement and the escrow for failure of a
condition precedent, Transferee shall return to Transferor all materials
provided by Transferor to Transferee pursuant to the Section entitled
"Transferee's Due Diligence and Transferor shall return all information
theretofore received from Transferee."
6. CLOSING AND ESCROW.
(a) CLOSING DATE.
The Closing shall be conducted through, and all items to be delivered
shall be delivered to, the Title Company, on or before the Closing Date,
which may be extended only by mutual agreement of parties.
(b) DEPOSIT OF AGREEMENT AND ESCROW INSTRUCTIONS.
The parties shall promptly deposit a fully executed copy of this
Agreement with Title Company and this Agreement shall serve as escrow
instructions to Title Company for consummation of the transactions
contemplated hereby. The parties agree to execute such additional escrow
instructions as may be appropriate to enable Title Company to comply with
the terms of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any supplementary
escrow instructions, the terms of this Agreement shall control unless a
contrary intent is expressly indicated in such supplementary instructions.
Transferor and Transferee hereby designate Title Company as the "real
estate reporting person" for the transaction pursuant to Section 6045(e) of
the Internal Revenue Code and the regulations promulgated thereunder.
(c) TRANSFEROR'S DELIVERIES TO ESCROW.
At or before Closing, Transferor shall deliver to Transferee the
following, to the extent they have not already been delivered:
(i) the duly executed and acknowledged Deed;
(ii) a duly executed Assignment of Leases;
7
<PAGE>
(iii) a duly executed Document of Transfer;
(iv) a duly executed Assignment of Contracts;
(v) a FIRPTA affidavit (in the form attached as Exhibit E) pursuant
to Section 1445(b)(2) of the Internal Revenue Code of 1986, and on which
Transferee is entitled to rely, that Transferor is not a foreign person
within the meaning of Section 1445(f)(3) of the Internal Revenue Code; and
(vi) California Form 590RE from Transferor certifying that Transferor
has a permanent place of business in California, is qualified to do
business in California; and
(vii) any other instruments, records or correspondence called for
hereunder which have not previously been delivered.
(d) TRANSFEROR'S DELIVERIES TO TRANSFEREE.
(i) DELIVERIES AT CLOSING.
a) a Closing Certificate in the form attached hereto as
Exhibit H;
b) operating statements for that portion of the current year
ending at the end of the calendar month preceding the month in which
the Closing Date occurs, certified in the manner specified in Addendum
III;
c) a Rent Roll and Delinquency Report both dated as of the first
day of the month in which the Closing Date occurs;
d) duly executed original Tenant Estoppel Certificates;
e) such original resolutions, authorizations, bylaws of other
corporate and/or partnership documents or agreements relating to
Transferor as shall be reasonably required by Transferee and/or the
Title Company;
f) an original signed notice in the form of Exhibit G attached
hereto for each of the Tenants; and
g) all keys to the Property, which shall be personally delivered
at the Property by a representative of Transferor to a representative
of Transferee.
(ii) DELIVERIES AFTER CLOSING.
On the first business day following the Closing, Transferor shall
deliver to Transferee the following, to the extent they have not already
been delivered, and such delivery shall be made in the manner set forth in
Addendum IV;
8
<PAGE>
a) originals of the Contracts not previously delivered to
Transferee;
b) originals of the Leases;
c) originals of any and all building permits and certificates of
occupancy for the Real Property that are in the possession or control
of Transferor and/or any affiliate of Transferor;
d) originals of all other matters described in Addendum III; and
e) any other instruments, records or correspondence called for
hereunder which have not previously been delivered.
(e) TRANSFEREE'S DELIVERIES TO TRANSFEROR.
At or before the Closing, Transferee shall deliver or cause to be
delivered to escrow the following:
(i) The documents required by paragraph C of Addendum V;
(ii) a duly executed Assignment of Leases;
(iii) a duly executed Assignment of Contracts; and
(iv) the Cash.
(f) DEPOSIT OF OTHER INSTRUMENTS.
Transferor and Transferee shall each deposit such other instruments as
are reasonably required by Title Company or otherwise required to close the
escrow and consummate the transactions described herein in accordance with
the terms hereof.
7. CLOSING ADJUSTMENTS AND PRORATIONS.
With respect to each Property, the following adjustments shall be made, and
the following procedures shall be followed:
(a) BASIS OF PRORATIONS.
All prorations shall be calculated as of 12:01 a.m. on the Closing
Date, on the basis of a 365-day year with the exception of expenses and
impounds ("Recoverable Expenses") which are recoverable from Tenants and
others in the nature of common area maintenance expenses, which Recoverable
Expenses shall be prorated in the manner described hereinbelow.
(i) 1997 RECOVERABLE EXPENSES. Transferor shall be
responsible to prepare the Tenant reconciliation of 1997 Recoverable
Expenses and shall deliver said reconciliation to the Tenants as soon
as practicable following the Closing. In the event that actual
Recoverable Expenses for 1997 is LESS than the amount of Recoverable
Expenses actually
9
<PAGE>
collected from the Tenants, Transferee shall be responsible to
reimburse said Tenants (whether by credit against Recoverable Expenses
next due or as otherwise provided in the respective Tenant Leases) the
amount of such excess, and Transferor shall promptly pay to Transferee
the amount of such excess within ten (10) business days following the
date of delivery of said 1997 reconciliation to the Tenants. In the
event that actual Recoverable Expenses for 1997 EXCEED the amount of
Recoverable Expenses actually collected from the Tenants, Transferee
shall use its reasonable best efforts to collect said shortfall from
the Tenants (in accordance with the terms of the Tenant Leases) and
shall promptly pay to Transferor the amounts collected within ten (10)
business days from its receipt thereof in accordance with the payment
application set forth in 7(d) (ii), below.
(ii) 1998 RECOVERABLE EXPENSES. Transferor shall prepare a
reconciliation of 1998 Recoverable Expenses which are attributable to
periods commencing on January 1, 1998, through the Closing, and shall
deliver said reconciliation to Transferee as soon as practicable
following the Closing. Any excess or shortfalls shall be paid or
credited in the manner set forth in 7(a)(i), above.
(b) ITEMS NOT TO BE PRORATED.
There shall be no prorations of adjustments of any kind with respect
to:
(i) INSURANCE PREMIUMS.
(ii) DELINQUENT RENTS FOR FULL MONTHS PRIOR TO THE MONTH IN WHICH
THE CLOSING OCCURRED.
Delinquent Rents for full months prior to the month in which the
Closing occurred shall remain the property of Transferor; however,
Transferee reasonably shall cooperate with Transferor in efforts to
collect such amounts; provided further, however, that Transferee shall
have no duty to initiate any legal proceeding or action against any
Tenant on Transferor's behalf related to such delinquent rents.
Transferor may take all appropriate collection measures (including
litigation if deemed by Transferor to be necessary or desirable),
except that Transferor may not seek any remedy which would interfere
with the Tenant's continued occupancy and full use of its premises
under such Tenant's Lease, or Transferee's rights to receive Rent with
respect to any period beginning on the Closing Date.
(iii) ADDITIONAL RENTS RELATING TO FULL OR PARTIAL MONTHS PRIOR
TO THE CLOSING DATE.
If Additional Rents relating to full or partial months prior to
the Closing Date are not finally adjusted between Transferor and any
Tenant until after the Closing Date, then any refund to which any
Tenant may be entitled shall be the obligation of Transferor, and any
additional amounts due from the Tenant for such period shall be the
property of Transferor.
10
<PAGE>
Transferee shall have no obligation with respect to any such refund
due to any Tenant and no claim to any such amounts due from any
Tenant, Transferor may take all appropriate collection measures
(including litigation if deemed by Transferor to be necessary or
desirable), except that, in seeking to collect any such additional
amounts due from any Tenant, Transferor may not seek any remedy which
would interfere with the Tenant's continued occupancy and full use of
it premises under such Tenant's Lease, or Transferee's right to
receive Rent with respect to any period beginning on the Closing Date.
If Transferor receives any refund of expenses paid prior to the
Closing and relating to a period prior to the Closing, and such
expenses were reimbursed in whole or in part by any Tenant, Transferor
shall refund to each Tenant its share of any such refund.
(c) CLOSING ADJUSTMENTS.
Prior to Closing, Transferor shall prepare for review, comment and
agreement by Transferee a proration statement for each Property,
substantially in the form attached hereto as Exhibit I, and each party
shall be credited or charged at the Closing, in accordance with the
following:
(i) RENTS.
Transferor shall account to Transferee for all Rents reflected on
the Rent Roll for the period in which the Closing occurs, and
Transferee shall be credited for its share.
(ii) EXPENSES.
a) PREPAID EXPENSES.
To the extent Expenses have been paid prior to the
Closing Date for the period in which the Closing occurs,
Transferor shall account to Transferee for such prepaid
Expenses, and Transferor shall be credited for its pro rata
share thereof for the period after the Closing Date.
b) UNPAID EXPENSES.
To the extent Expenses relating to the period in which
the Closing occurs are unpaid as of the Closing Date but are
ascertainable (e.g., interest on the Loan, free rent as
shown on Schedule II.D.3, tenant improvements as shown on
Schedule II.E.3, and other obligations of Transferor assumed
by Transferee), Transferee shall be credited for
Transferor's pro rata share of such Expenses for the period
prior to the Closing date. The amount to be credited to
Transferee hereunder shall include the amount of any future
payments due to any Tenant under such Tenant's lease as
reimbursement for tenant improvements or otherwise.
11
<PAGE>
c) PROPERTY TAXES.
For purposes of this Subsection entitled "Expenses,"
the Transferor and Transferee shall pro-rate property taxes
based on the most recent available tax bills.
(iii) SECURITY DEPOSITS.
Transferor shall deliver to Transferee all prepaid rents,
security deposits, letters of credit and other collateral given to
Transferor or any of its affiliates or successor-in-interest under any
of the Leases.
(d) POST-CLOSING ADJUSTMENTS.
After the Closing Date, Transferor and Transferee shall meet from time
to time to discuss adjustments in accordance with the following:
(i) NON-DELINQUENT RENTS AND RECOVERABLE EXPENSES.
If Transferee collects any non-delinquent Rents applicable to the
month in which the Closing occurred, Transferor's pro rata share of
such Rents shall be credited to Transferor.
(ii) DELINQUENT RENTS AND RECOVERABLE EXPENSES FOR MONTH IN WHICH
THE CLOSING OCCURRED.
If Transferee collects from any Tenant Rents and/or Recoverable
Expenses that were delinquent as of the Closing and that relate to the
period in which the Closing occurred, then such Rents and Recoverable
Expenses shall be applied in the following order of priority: First to
reimburse Transferee for all reasonable out-of-pocket third-party
collection costs actually incurred by Transferee in collecting such
Rents and Recoverable Expenses (including the portion thereof relating
to the period after the Closing Date); second, to satisfy such
Tenant's Rent and Recoverable Expense obligations relating to the
period after the Closing Date; and third, to satisfy such delinquent
Rent and Recoverable Expense obligations relating to the period
before the Closing Date. Transferee shall pay to Transferor all
Tenant Rents and Recoverable Expenses for the period prior to the
Closing Date collected by Transferee after the Closing. Transferor
shall have no right to pursue the collection of such delinquent Rents.
(iii) EXPENSES.
With respect to any invoice received by Transferee after the
Closing Date for Expenses that relate to the period in which the
Closing occurred, Transferee will either, at Transferee's option, (A)
pay the entire amount of the invoice and either bill Transferor for
Transferor's share, or offset Transferor's share against any prorated
Rents due to Transferor under subsection (i), or (ii) above, or (B)
compute Transferee's pro rata share, write
12
<PAGE>
a check for that amount in favor of the vendor, and then send the
invoice and check to Transferor, in which case Transferor agrees that
it will pay for its share and forward the invoice and the two payments
to the vendor. If real property taxes and assessments payable for any
period prior to Closing are determined to be more than the amounts
prorated herein (in the case of the current year) or paid by
Transferor (in the case of any prior year), due to a reassessment of
the Real Property or otherwise, Transferor and Transferee shall
promptly adjust the proration of such real property taxes and
assessments after the determination of such amounts and Transferor
shall pay to Transferee any increase in the amount of such real
property taxes and assessment applicable to any period prior to
Closing.
(iv) SURVIVAL OF OBLIGATIONS.
The obligations of Transferor and Transferee under the Subsection
entitled "Post-Closing Adjustments" shall survive the Closing.
(e) ALLOCATION OF CLOSING COSTS.
Closing costs shall be allocated as set forth below:
(i) ESCROW CHARGES:
50% to the Transferor and 50% to the Transferee.
(ii) RECORDING FEES AND MISCELLANEOUS ESCROW AND TITLE FEES:
50% to the Transferor and 50% to the Transferee.
(iii) TITLE INSURANCE PREMIUM:
The Transferor shall pay 100% of the cost of the CLTA standard
policy of title insurance. The Transferee shall pay 100% of the
additional premium to upgrade to an ALTA extended coverage policy of
title insurance and 100% of the cost of all endorsements.
(iv) TRANSFER TAXES:
100% to Transferor.
(v) SURVEY FEES:
100% to Transferee.
8. TENANT ESTOPPEL CERTIFICATES.
Transferor shall use all reasonable and diligent efforts to obtain a Tenant
Estoppel Certificate from all Tenants, dated no earlier than thirty (30) days
prior to the Closing Date, conforming to the most recent Rent Roll and
Delinquency Report approved by Transferee and alleging no defaults, offsets, or
claims against Transfer. Transferor shall
13
<PAGE>
deliver completed Tenant Estoppel Certificates to Transferee as they are
received by Transferor, and shall use all reasonable efforts to deliver all
Tenant Estoppel Certificates to Transferee not later than five (5) business days
prior to the Closing. It shall be a condition to Transferee's obligation to
close the Contribution and acquisition of the Property that not later than five
(5) business days prior to the Closing:
(a) Transferor delivers to Transferee Tenant Estoppel Certificates
from the Required Tenants, and, with respect to all Non-Required Tenants
there shall exist no Material Non-Required Tenant Dispute. Transferee shall
be allowed to ask any Non-Required Tenant which does not provide a Tenant
Estoppel Certificate whether any such dispute exists; or
(b) To the extent Transferor is unable to obtain Tenant Estoppel
Certificates, or any items required to be therein, from the Required
Tenants, or to the extent that there is any Material Non-Required Tenant
Dispute, Transferor shall deliver to Transferee and Transferee may, but
shall not be obligated to, accept, on the Closing Date a certification in
which Transferor warrants and represents to Transferee, with respect to
such missing Tenant Estoppel Certificates or any missing items required
items required to be included therein, as to all matters that were to be
included therein and/or indemnifies Transferee as to any such Material Non-
Required Tenant Dispute; provided however, that Transferee shall be
required to accept such a Transferor certification as to missing Required
Tenant Estoppel Certificates if the total square footage represented by
such Transferor Certification does not exceed the Non-Required Tenants.
9. TRANSFEROR'S REPRESENTATIONS AND WARRANTIES.
Transferor hereby represents and warrants to Transferee the matters set
forth on Addendum II, which is incorporated herein by this reference as though
fully set forth herein. Transferee is entitled to rely on Transferor's
representations and warranties notwithstanding Transferee's inspection and
investigation of the Property.
10. TRANSFEREE'S REPRESENTATIONS AND WARRANTIES.
Transferee hereby represents and warrants to Transferor as follows:
(a) Transferee is a duly organized and validly existing limited
partnership in good standing under the laws of the State of California, and
AHP is a duly organized and validly existing corporation under the laws of
the State of Maryland. This Agreement and all documents executed by
Transferee which are to be delivered to Transferor at the Closing are or at
the time of Closing will be duly authorized, executed and delivered by
Transferee, and are or at the Closing will be legal, valid and binding
obligations of Transferee, and do not and at the time of Closing will not
violate any provisions of any agreement or judicial order to which
Transferee is subject.
(b) Transferee has made (or will make prior to the Closing Date) an
independent investigation with regard to the Property and Transferee's
intended
14
<PAGE>
use thereof, including without limitation, review and/or approval of
matters disclosed by Transferor pursuant to this Agreement.
(c) There is no litigation pending or, to Transferee's knowledge,
threatened, against Transferee or any basis therefor that might materially
and detrimentally affect the ability of Transferee to perform its
obligations under this Agreement. Transferee shall notify Transferor
promptly of any such litigation of which Transferee becomes aware.
(d) All representations and warranties set forth herein shall be true
as of the Effective Date and the Closing Date.
(e) The 1996 Annual Report of AHP, the Proxy Statement for Special
Meeting of Shareholders held August 14, 1997 and the Form 10 K Annual
Report for 1996 of AHP as previously delivered to Transferor are true and
correct in all material respects and do not omit any material information
about AHP or Transferee.
(f) The Agreement of Limited Partnership of Alexander Haagen
Properties Operating Partnership, L.P., a California limited partnership,
dated as of December 27, 1993 as amended on January 1, 1994, March , 1994,
February 27, 1997 and November 19, 1996 (the "AHPOP Agreement") as
previously delivered to Transferor, is a true and correct copy of such
agreement.
(g) True and correct copies of the provisions of the Articles of
Incorporation of AHP, to which reference is made in Section 8.6C of the
AHPOP Agreement, have been previously delivered to Transferor.
11. INDEMNIFICATION.
(a) MUTUAL INDEMNIFICATION.
Each party hereby agrees to indemnify the other party and defend and
hold it harmless from and against any and all claims, demands, liabilities,
costs, expenses, penalties, damages and losses, including, without
limitation, attorneys fees, and amounts with respect to taxes resulting
from any misrepresentation or breach of warranty or breach of covenant made
by such party in this Agreement or in any document, certificate, Exhibit or
Schedule given or delivered to the other pursuant to or in connection with
this Agreement.
(b) INDEMNIFICATION BY TRANSFEROR.
In addition to the indemnifications contained in Section 11(a),
Transferor agrees to indemnify Transferee and its partners and defend and
hold Transferee and its partners harmless from and against any and all
claims, demands, liabilities, costs, expenses, penalties, damages and
losses, including, without limitation, reasonable attorneys' fees and
amounts with respect to taxes, asserted against, incurred or suffered by
Transferee resulting from or arising out of (i) any personal injury or
property damage occurring in, on or under the Property during
15
<PAGE>
Transferor's ownership thereof, from any cause whatsoever other than as a
consequence of the acts of omissions of Transferee, its agents, employees
or contractors; and (ii) the failure of Transferor to perform any
obligation under the Loan Documents to be performed by the borrower prior
to the Closing Date (other than the obligation to obtain the Lender's
consent for the transfer of the Property contemplated herein).
(c) INDEMNIFICATION BY TRANSFEREE.
Transferee agrees to indemnify Transferor and its partners and defend
and hold Transferor and its partners harmless from any claims, losses,
demands, liabilities, costs, expenses, penalties, damages and losses,
including, without limitation, reasonable attorneys' fees, asserted
against, incurred or suffered by Transferor resulting from or arising out
of (i) any personal injury or property damage first occurring in, on or
under the Property during Transferee's ownership thereof, from any cause
whatsoever than a consequence of the acts or omissions of Transferor, or
its agents, employees or contractors, and (ii) if Transferee does not pay
off the Loan on or before the Loan Payoff Date, the failure of Transferor
to perform any obligation under the Loan Documents to be performed by the
borrower after the Closing Date.
(d) SURVIVAL OF INDEMNIFICATIONS.
The indemnification provisions of this Section shall survive beyond
the Closing, or, if the Closing does not occur pursuant to this Agreement,
beyond any termination of this Agreement.
12. RISK OF LOSS.
(a) NOTICE OF LOSS.
If, prior to the Closing Date, any portion of the Property suffers a
Minor or Major Loss, Transferor shall immediately notify Transferee of that
fact, which notice shall include sufficient detail to apprise Transferee of
the current status of the Property following such loss.
(b) MINOR LOSS.
Transferee's obligations hereunder shall not be affected by the
occurrence of a Minor Loss, provided that: (i) upon the Closing, there
shall be a credit against the Consideration equal to the amount of any
insurance proceeds or condemnation awards collected by Transferor as a
result of such Minor Loss, plus the amount of any insurance deductible; or
(ii) insurance or condemnation proceeds available to Transferor are
sufficient to cover the cost of restoration, the insurance carrier has
admitted liability for the payment of such costs, and the Loan is not
accelerated or defaulted by reason of such casualty or condemnation. If
the proceeds or awards have not been collected as of the Closing, then
Transferor's right, title and interest to such proceeds or awards shall be
assigned to Transferee.
16
<PAGE>
(c) MAJOR LOSS.
In the event of a Major Loss, Transferee may, at its option, to be
exercised by written notice to Transferor within twenty (20) days of
Transferor's notice to Transferee of the occurrence thereof, elect to
either (i) terminate this Agreement, or (ii) consummate the acquisition of
the Property for the full Consideration, subject to the following. If
Transferee elects to proceed with the acquisition of the Property, then the
Closing shall be postponed to the later of the Closing Date or the date
which is five (5) days after Transferee makes such election and, upon the
Closing, Transferee shall be given a credit against the Consideration equal
to the amount of any insurance proceeds or condemnation awards collected by
Transfer as a result of such Major Loss, plus the amount of any insurance
deductible. If the proceeds or awards have not been collected as of the
Closing, then Transferor's right, title and interest to such proceeds or
awards shall be assigned to Transferee, Transferee shall receive a credit
against the Consideration due at Closing in the amount of any insurance
deductible, and Transferor will cooperate with Transferee as reasonably
requested by Transferee in the collection of such proceeds or award. If
Transferee fails to give Transferor notice within such twenty (20)day
period, then Transferee will be deemed to have elected to terminate this
Agreement as to the damaged or condemned Property.
13. TRANSFEROR'S CONTINUED OPERATION OF THE PROPERTY.
(a) GENERAL.
Except as otherwise contemplated or permitted by this Agreement or
approved by Transferee in writing, from the Effective Date to the Closing
Date, Transferor will operate, maintain, repair and lease the property in a
prudent manner, in the ordinary course of business, on an arm's-length
basis and consistent with its past practices (and without limiting the
foregoing, Transferor shall, in the ordinary course, negotiate with
prospective tenants and enter into leases of the Property, enforce leases
in all material respects including eviction proceedings against all Tenants
with delinquencies in excess of thirty (30) days, pay all costs and
expenses of the Property, including, without limitation, debt service, real
estate taxes and assessments, maintain insurance and pay and perform
obligations under the Loan Documents) and will not dispose of or encumber
any of the Property, except for dispositions of personal property in the
ordinary course of business. Between the Effective Date and the Closing,
Transferor shall continue to undertake capital improvements with respect to
the Property in the ordinary course of business.
(b) ACTIONS REQUIRING TRANSFEREE'S CONSENT.
Notwithstanding the above terms of this Section, Transferor shall not,
without the prior written approval of Transferee, take any of the following
actions:
(i) LEASES.
Execute, renew, modify or waive any material term of any Lease;
17
<PAGE>
(ii) CONTRACTS.
Except as otherwise required under this Agreement, enter into,
execute or terminate any operating agreement, reciprocal easement
agreement, management agreement or any lease, contract, agreement or
other commitment of any sort that will survive the Closing (including
any contract for capital items or expenditures), with respect to the
Property requiring payments to or by Transferor in excess of $5,000
per year, or the performance of services by Transferor the value of
which exceeds $5,000 per year.
(c) COST OF TENANT IMPROVEMENTS AND LEASING COMMISSIONS.
In connection with any new leases or modifications of existing Leases
entered into between the Effective Date and the Closing and approved by
Transferee, the cost of tenant improvement work and leasing commissions
shall be borne by Transferee except as set forth on Schedule II.E.3 and in
the Agreement. Transferor shall be responsible for the cost of tenant
improvement work and leasing commissions for all leases (and amendments
thereto) entered into prior to the Effective Date (regardless of when the
same are payable), and Transferor's obligations with respect thereto shall
survive the Closing.
14. COOPERATION.
(a) BEFORE CLOSING.
Transferor and Transferee shall cooperate and do all acts as may be
reasonably required or requested by the other with regard to the
fulfillment of any Condition Precedent or the consummation of the
transactions contemplated hereby including execution of any documents,
applications or permits. Transferor hereby irrevocably authorizes
Transferee and its agents to make all inquiries of any third party,
including any governmental authority, as Transferee may reasonably require
to complete its due diligence.
(b) AFTER CLOSING.
For a period of three years after the Closing, Transferor will give
Transferee timely and complete access to the historical financial and
property records of Transferor relating to its acquisition, tax-basis,
ownership and operation of the Property (including but not limited to each
item of Personal Property), and Transferor agrees that it will not destroy
any of the records during any such period of time without the prior written
consent of Transferee. During the first year after the Closing, Transferor
will provide to Transferee on a timely and complete basis such historical
financial information with respect to the acquisition, ownership and
operation of the Property as Transferee may reasonably request in
connection with any reports which AHP is required to file with the
Securities & Exchange Commission or the American Stock Exchange or any
other stock exchange on which the shares of AHP may be listed.
18
<PAGE>
15. NON-CONSUMMATION OF THE TRANSACTION.
If the transaction is not consummated on or before the Closing Date, the
following provisions shall apply:
(a) NO DEFAULT.
If the transaction is not consummated for a reason other than a
default by one of the parties, the (i) Title Company and each party shall
return to the depositor thereof the Earnest Money and all other funds and
items which were deposited hereunder; and (ii) Transferor and Transferee
shall each bear one-half of any Escrow cancellation charges. Any return of
funds or other items by the Title Company or any party as provided herein
shall not relieve either party of any liability it may have for its
wrongful failure to close.
(b) DEFAULT BY TRANSFEROR.
If the transaction is not consummated as a result of a default by
Transferor, then Transferee may either (i) terminate this Agreement by
delivery of notice of termination to Transferor, whereupon (A) the Earnest
Money plus interest accrued thereon shall be immediately returned to
Transferee, and (B) Transferor shall pay to Transferee any title, escrow,
legal and inspection fees incurred by Transferee in connection with the
performance of its review under the Section entitled "Transferee's Due
Diligence" (including, without limitation, environmental and engineering
consultants' fees and expenses), in which case neither party shall have any
further rights or obligations hereunder; or (ii) continue this Agreement
pending Transferee's action for specific performance and/or damages.
(c) DEFAULT BY TRANSFEREE.
If the Closing does not occur as a result of a default by Transferee,
then (i) Transferee shall pay all escrow cancellation charges, and (ii)
Title Company shall deliver the Earnest Money plus all accrued interest
thereon to Transferee.
16. MISCELLANEOUS.
(a) DISCLOSURE OF TRANSACTION.
Prior to the Closing, either party shall publicly announce or discuss
the execution of this Agreement or the transaction contemplated hereby
except in accordance with the following. Neither party shall publicly
announce or discuss the execution of this Agreement or the transaction
contemplated hereby unless: (i) the information disseminated by such party
is limited to the names of the Transferor and Transferee; a general
description of the Property including size, type and location; the amount
and nature of the Consideration; and Transferee's anticipated yield from
the acquisition of the Property; or (ii) the announcing party has obtained
the prior written consent of the other party, which shall not unreasonably
withheld.
19
<PAGE>
This provision shall not apply to Transferor's efforts to obtain estoppel
certificates from the Required Tenants.
(b) POSSESSION.
Possession of the Property shall be delivered to Transferee upon the
Closing.
(c) NOTICES.
Any notice, consent or approval required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been
given upon (i) hand delivery, (ii) one (1) day after being deposited with
Federal Express, DHL Worldwide Express or another reliable overnight
courier service or transmitted by facsimile telecopy, or (iii) two (2) days
after being deposited in the United States mail, registered or certified
mail, postage prepaid, return receipt required, and addressed as indicated
below, or such other address as either party may form time to time specify
in writing to the other.
If to Transferee: If to Transferor:
Alexander Haagen Properties, Inc. c/o Hughes Investments
3500 Sepulveda Boulevard 13 Corporate Plaza, Suite 150
Manhattan Beach, California 90266 Newport Beach, California 92660
Attention: Jean Paul Wardy Attention: William W. Hughes, Jr.
with a copy to: with a copy to:
Latham & Watkins Bryan Cave LLP
633 West Fifth Street, Suite 4000 18881 Von Karman, Suite 1500
Los Angeles, CA 90071-2007 Irvine, California 92612-1582
Attention: Martha Jordan, Esq. Attention: Wilbur D. Layman, Esq.
(d) BROKERS AND FINDERS.
Except as set forth in Schedule 11, neither party has had any contact
or dealings regarding the Property, or any communication in connection with
the subject matter of this transaction through any real estate broker or
other person who can claim a right to a commission or finder's fee in
connection with the transfer contemplated herein. In the event that any
broker or finder perfects a claim for a commission or finder's fee based
upon any such contact, dealings or communication, the party through whom
the broker or finder makes its claim shall be responsible for said
commission or fee and shall indemnify and hold harmless the other party
from and against all liabilities, losses, costs and expenses (including
reasonable attorneys' fees) arising in connection with such claim for a
commission or finder's fee. The provisions of this Subsection shall
survive the Closing.
(e) SUCCESSOR AND ASSIGNS.
Subject to the following, this Agreement shall be binding upon, and
inure to the benefit of, the parties and their respective successors,
heirs, administrators and assigns. Transferee shall have the right, with
notice to Transferor (but without the
20
<PAGE>
necessity of Transferor's consent), to assign its right, title and interest
in and to this Agreement to one or more assignees at any time before the
Closing Date; provided, however that such assignee(s) shall assume all
obligations of Transferee, and such assignment and assumption shall not
release Transferee from any obligation hereunder. Transferor shall have the
right to assign its rights and obligations to its Constituent Partners as
is provided in Addendum VI. Except as provided in Addendum VI, Transferor
shall not have the right to assign its interest in this Agreement. Nothing
in these General Conditions shall limit the rights of any OP Unit Holder to
transfer his OP Units as provided in the AHPOP Partnership Agreement.
(f) AMENDMENTS.
Except as otherwise provided herein, this Agreement may be amended or
modified only by a written instrument executed by Transferor and
Transferee.
(g) GOVERNING LAW.
This Agreement has been negotiated and executed in Los Angeles County,
California and the substantive laws of the State of California, without
reference to its conflict of laws provisions, will govern the validity,
construction, and enforcement of this Agreement.
(h) MERGER OF PRIOR AGREEMENTS.
The Agreement, the General Conditions and the Addenda, Exhibits and
Schedules hereto constitute the entire agreement between the parties and
supersede all prior agreements and understandings between the parties
relating to the subject matter hereof.
(i) ARBITRATION OF DISPUTES.
Any controversy, claim, counterclaim, or disputes between or among the
parties hereto arising out of or relating to the interpretation,
application, breach or enforcement of this Agreement or any related
agreements or instruments ("Subject Documents") ("Dispute"), shall, at the
option of any party, and at that party's expense, be submitted to
mediation, using either the American Arbitration Association (AAA) or
Judicial Arbitration and Mediation Services, Inc. (JAMS). If mediation is
not used, or if it is used and it fails to resolve the Dispute within 30
days from the date AAA or JAMS is engaged, then the Dispute shall be
determined by neutral binding arbitration in accordance with the Commercial
Arbitration Rules then in effect of either JAMS or AAA (at the option of
the party initiating the arbitration) and Title 9 of the U.S. Code,
notwithstanding any other choice of law provision(s) herein or in the
Subject Documents. Any controversy concerning whether a Dispute is
arbitable shall be determined by the arbitrator(s). The parties agree that
related arbitration proceedings may be consolidated. The arbitrator shall
prepare written reasons for the award. The parties hereto agree that the
arbitrator shall be empowered to grant equitable, as well as legal, relief,
including, without limitation, the power to compel specific performance of
this Agreement. The parties
21
<PAGE>
further consent that the initiation of mediation and/or arbitration
pursuant to these provisions shall constitute an action or the equivalent
for purposes of determining a party's right to file a lis pendens in the
official records of the jurisdiction where the Property is/are located. The
parties consent that judgment on the award rendered may be entered in any
state sitting in the State of California, and that any mediation and/or
arbitration shall take place in Newport Beach, California.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE
THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE
BELOW YOU ARE GIVING UPON YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL,
UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING
TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND
AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.
--------------------------- --------------------------
Transferor Transferee
(j) ENFORCEMENT.
If either party fails to perform any of its obligations under this
Agreement or if a dispute arises between the parties concerning the meaning
or interpretation of any provision of this Agreement, then the defaulting
party or the party not prevailing in such dispute shall pay any and all
costs and expenses incurred by the other party on account of such default
and/or in enforcing or establishing its rights hereunder, including,
without limitation, arbitration or court costs and attorneys' fees and
disbursements. Any such attorneys' fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Agreement
shall be recoverable separately from and in addition to any other amount
included in such judgment, and such attorneys' fees obligation is intended
to be severable form the other provisions of this Agreement and to survive
and not be merged into any such judgment.
(k) TIME OF THE ESSENCE.
Time is of the essence of this Agreement.
22
<PAGE>
(l) SEVERABILITY.
If any provision of this Agreement or the application thereof to any
person, place, or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable or void, the remainder of this
Agreement and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.
(m) MARKETING.
Transferor agrees not to market or show the Property to any other
prospective purchasers during the term of this Agreement.
(n) CONFIDENTIALITY.
Transferee and Transferor shall each maintain as confidential any and
all material or information about the other or, in the case of Transferee
and is agents, employees, consultants and contractors, about the Property,
and shall not disclose such information to any third party, except, in the
case of information about the Property and Transferor, to Transferee's
investment bankers, lender or prospective lenders, insurance and
reinsurance firms, attorneys, environmental assessment and remediation
service firms and consultants, as may be reasonably required for the
consummation of the transaction contemplated hereunder and/or as may be
required by law.
(o) COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one
and the same instrument.
(p) ADDENDA, EXHIBITS AND SCHEDULES.
All Addenda, Exhibits and Schedules referred to herein are, unless
otherwise indicated, incorporate herein by this reference as though set
forth herein in full.
(q) CONSTRUCTION.
Headings at the beginning of each section and subsection are solely
for the convenience of the parties and are not a part of the Agreement.
Whenever required by the context of this Agreement, the singular shall
include the plural and the masculine shall include the feminine and vice
versa. This Agreement shall not be construed as if it had been prepared by
one of the parties, but rather as if both parties had prepared the same.
In the event the date on which Transferor or Transferee is required to take
any action under the terms of this Agreement is not a business day, the
action shall be taken on the next succeeding business day.
23
<PAGE>
(r) PROPERTY CONDITION.
Except for the Representations and Warranties of Transferor
specifically set forth herein and in all Addenda, Exhibits and Schedules
attached hereto, the Property is being sold and conveyed by Transferee to
Transferor "AS IS, WHERE IS, WITH ALL FAULTS," in such condition as the
same may be on the Closing Date, without any representations and warranties
by the Transferor as to any conditions of the Property, including, without
limitation, surface and subsurface environmental conditions, whether latent
or patent. Except for the representations and warranties of Transferor
specifically set forth herein, Transferor makes no guarantee, warranty or
representation, express or implied, as to the quality, character, or
condition of the Property (or any part thereof) or the fitness of the
Property (or any part thereof) for any use or purpose or any representation
as to the nonexistence of any toxic or hazardous waste. Except for any
claim related to a breach of Transferor's express representations and
warranties, Transferee shall have no claim, in law or in equity, based upon
the condition of the Property or the failure of the Property to meet any
standards. In no event shall Transferor be liable for any incidental,
special, exemplary or consequential damages, including, without limitation,
loss of profits or revenue, interference with business operations, loss of
tenants, lenders, investors, buyers, diminution in value of the Property,
or inability to use the Property, due to the condition of the Property,
absent a breach of Transferor's express representations and warranties
contained herein and in all Addenda, Exhibits and Schedules attached
hereto. Transferee represents and warrants to Transferor that upon
expiration of the Due Diligence Period, Transferee will have had ample
opportunity to make a proper inspection, examination and investigation of
the Property to familiarize itself with its condition and that it will do
so to its satisfaction. Transferee agrees that, upon acceptance of the
condition of the Property hereunder, and except for its reliance on the
representations and warranties of Transferor contained herein, it shall
purchase and accept title to the Property including any and all
environmental conditions, except as set forth in the paragraph entitled
"Special Provisions". In the event that any hazardous substances are
discovered on, at or under the Property, except for any claim for breach of
any representation or warranty of Transferee specifically made herein, and,
except as set forth in the paragraph entitled "Special Provisions,"
Transferee shall not maintain any action or assert any claim against
Transferor, its successors and their respective members, employees and
agents arising out of or relating to any such hazardous substances,
including, without limitation, any action or claim for contribution or for
the generation, use, handling, treatment, removal, storage,
decontamination, cleanup, transport or disposal thereof. The provisions of
this Section shall survive the Closing or any termination of this
Agreement.
17. CONDITIONS TO OBLIGATION TO CLOSE.
Notwithstanding anything contained in this Agreement, neither Transferor
nor Transferee shall be obligated to consummate this Agreement if, for any
reason, Transferee will not, concurrently with the closing of this transaction,
also acquire the following real estate projects: Loma Square, Mineral King
Plaza, North County Plaza, El Centro Center, Vineyards Marketplace, and Wilson
- - Wible in Bakersfield (the "Included Projects").
24
