LSI 2010 Real Estate Joint Ventures conference materials.pdf

David E. Myre, Jr. of Hillis Clark Martin & Peterson, P.S.
Jane Rakay Nelson of Lane Powell PC
“Company”) shall be named “Magnificent Tower LLC” or such other name as is hereafter
mutually approved by Investor and Developer (collectively, the “Members”).
4. Management. Developer shall serve as initial Manager of the Company. As such,
Developer shall have the management duties and authorities set forth below and shall be subject
to removal from management by Investor for any of the reasons hereinbelow described.
5. Initial Capital Contributions. At the Equity Closing (as hereinafter defined), and
subject to satisfaction of the funding conditions hereinafter described, the Members shall make
initial capital contributions to the Company by wire transfer of cash in the following amounts
and shall receive the following percentage ownership interests in the Company:
Developer: $ 3,500,000 10%
Investor: $31,500,000 90%
At the Equity Closing, Developer shall also contribute, for no additional consideration,
by assignment to the Company (subject to assumption of all related prospective obligations) the
following:
(i) the existing real estate purchase and sale agreement with Fifth Avenue
Associates LLC (the “Site Owner”), together with all earnest money deposits, title insurance
commitments and due diligence reports and studies obtained or prepared by Developer in
connection with the pending purchase of the Site;
(ii) the existing architectural services contract with XYZ Architects LLP (the
“Architect”), together with all studies, schematics, designs, drawings, models, plans and
specifications prepared by the Architect in connection with the Project;
(iii) the existing development phase services contract with ABC Construction
Company, Inc. (the “General Contractor”), together with all cost estimates, analyses, studies,
bids and proposals prepared by the General Contractor in connection with the Project;
(iv) all construction, building, street use, sidewalk use, and other permits and
licenses obtained by Developer from the City in connection with the Project and all applications
submitted by Developer for any such licenses not yet issued (collectively, the “Permits”); and
(v) the loan commitment dated February 9, 2009, issued by Optimism Bank,
N.A. (“Construction Lender”) for a construction loan in the amount of $65,000,000 in
connection with the Project, and all deposits posted and payments made by Developer pursuant
thereto.
At the Loan Closing (as hereinafter defined), Developer shall also provide to or for the
benefit of the Company, for no additional consideration, the following:
(i) a guaranty to Construction Lender of payment of all non-recourse carveout
liabilities to which the Company will be subject under the governing documents for the
Speaker 9a: 2
Speaker 10a: 2
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Law Seminars International | Real Estate Joint Ventures and Funds | 02/08/10 in Seattle, WA