-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CONTRIBUTION AGREEMENT
FOR
DEVELOPMENT PROPERTIES
AND
REGENCY FOREST LAND
AMONG
"CONTRIBUTORS"
(AS HEREIN DEFINED)
AND
WEEKS REALTY, L.P.
DOING BUSINESS AS
WEEKS REALTY LIMITED PARTNERSHIP
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
1. DEFINED TERMS...................................................... 2
2. COVENANT TO CONTRIBUTE............................................. 10
3. STRUCTURE OF CONTRIBUTION.......................................... 10
4. CONTRIBUTION DATE.................................................. 10
5. CONTRIBUTION VALUE................................................. 11
6. ADJUSTED CONTRIBUTION VALUE........................................ 11
7. ISSUANCE OF UNITS.................................................. 12
8. INTERIM CONDUCT.................................................... 12
9. EXISTING LOANS..................................................... 14
10. TITLE AND SURVEY................................................... 15
11. DATE, TIME AND PLACE OF CONTRIBUTION............................... 16
12. COSTS AND EXPENSES; PREPARATION OF DOCUMENTS....................... 18
13. ACCESS TO AND EXAMINATION OF THE
DEVELOPMENT PROPERTIES............................................. 18
14. REPRESENTATIONS AND WARRANTIES OF
THE CONTRIBUTORS................................................... 19
15. REPRESENTATIONS AND WARRANTIES OF WEEKS............................ 27
16. CONDITIONS......................................................... 28
17. FIRE AND CASUALTY.................................................. 30
18. EMINENT DOMAIN..................................................... 31
19. DEFAULT............................................................ 32
i
Page
----
20. BROKERAGE FEES..................................................... 32
21. MISCELLANEOUS...................................................... 33
ii
SCHEDULE OF EXHIBITS
EXHIBIT A Development Properties
EXHIBIT B Existing Loans
EXHIBIT C Existing Loan Documents
EXHIBIT D Legal Descriptions of Land
EXHIBIT E Leasing Guidelines
EXHIBIT F Permitted Exceptions
EXHIBIT G Pro Forma Annual Operating Expenses/Pro Forma Reimbursable
Amounts/Pro Forma Cost
EXHIBIT H Rent Roll
EXHIBIT I Tenant Estoppel Certificate Form
EXHIBIT J Schedule of Environmental Reports
EXHIBIT K Schedule of Pending or Threatened Litigation
EXHIBIT L Schedule of Engineering Reports
EXHIBIT M Schedule of Insurance Coverage
EXHIBIT N Schedule of Incomplete Improvements
EXHIBIT O Schedule of Service Contracts
EXHIBIT P Schedule of Commission Obligations
EXHIBIT Q Regency Forest Land Site Plan
iii
CONTRIBUTION AGREEMENT
(Development Properties)
(Regency Forest Land)
THIS CONTRIBUTION AGREEMENT (hereinafter referred to as this "Agreement"),
made and entered into as of this 31st day of December, 1996, by and among the
"CONTRIBUTORS" (as hereinafter defined); and WEEKS REALTY, L.P., a Georgia
limited partnership authorized to do business in North Carolina as Weeks Realty
Limited Partnership (hereinafter referred to as "Weeks");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the "Transaction Documents" (as defined in that
certain Contribution Agreement for Completed Properties, dated of even date
herewith), the Contributors and other contributors identified in the Transaction
Documents have agreed to contribute in stages certain assets, properties and
businesses to the capital of Weeks upon and subject to the terms and conditions
set forth in the Transaction Documents (hereinafter referred to as the
"Transaction");
WHEREAS, on even date herewith, the Contributors and other contributors
identified in the Transaction Documents contributed to the capital of Weeks
(hereinafter referred to as the "Initial Contribution") the "Completed
Properties" (as defined in that certain Contribution Agreement for Completed
Properties, dated as of even date herewith) in exchange for "Units" (as
hereinafter defined) and assumption (subject to the limitation on recourse
provisions) of certain indebtedness as one of the stages in the Transaction;
WHEREAS, as another stage of the Transaction, Contributors have agreed to
contribute, from time to time, each of the "Development Properties" (as
hereinafter defined) and the "Regency Forest Land" (as hereinafter defined) to
the capital of Weeks in exchange for the issuance of additional Units and the
assumption (subject to the limitation on recourse provisions) of certain
indebtedness, as and when certain conditions are met, all as more particularly
set forth in this Agreement; and
WHEREAS, Weeks has agreed to accept such contribution of the Development
Properties and, in connection therewith, issue Units to the Contributors and
assume (subject to the limitations of recourse provisions) certain liabilities,
all as more particularly set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing premises, the
mutual covenants and agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Contributors and Weeks hereby covenant and agree as follows:
1. DEFINED TERMS. In addition to terms defined elsewhere in this
Agreement, the following words, when used in this Agreement, shall have
the meanings ascribed thereto in this paragraph:
a. "Adjusted Contribution Value" means the adjusted contribution value
---------------------------
for a Development Property arrived at after making the adjustments
provided for in Paragraph 6 of this Agreement.
b. "Contribution" means the consummation of a contribution to the
------------
capital of Weeks of a Development Property pursuant to the terms and
conditions of this Agreement; and "Contribute" means the making of a
----------
Contribution.
c. "Contribution Date", for each Development Property, means the date on
-----------------
which that Development Property is Contributed by the Contributors to
the capital of Weeks pursuant to Paragraph 4 of this Agreement.
d. "Contribution Value" means the contribution value of a Development
------------------
Property determined in accordance with Paragraph 5 of this Agreement.
e. "Contributors" means, collectively, X.X. Xxxxxxx, M.A. Xxxxxxxxx,
------------
Xxxx Xxxxxxx, and PPW; and "Contributor" means any one of the
-----------
Contributors.
f. "Development Property" means the Real Property, the Tangible Personal
--------------------
Property and the Intangible Personal Property located at, attributable
to or used in connection with one of the four (4) projects identified
on Exhibit A, attached hereto and by this reference made a part hereof;
---------
and Development Properties means, collectively, all of the Real
----------------------
Property, the Tangible Personal Property and the Intangible Personal
Property located at, attributable to or used in connection with all of
the four (4) projects identified on Exhibit A hereto. Any reference to
---------
a specific Development Property shall be made by incorporating the name
of the project as set forth on Exhibit A; for example, a specific
---------
reference to the first listed Development Property shall be the
"Woodlake III Property". Development Property does not include the
Regency Forest Land.
g. "Environmental Laws" means the Resource Conservation and Recovery Act
------------------
(42 U.S.C. (S) 6901 et seq.), as amended by the Hazardous Materials
-- ---
Transportation Act (490 U.S.C. (S) 1801 et seq.); the Toxic Substance
-- ---
Control Act (15 U.S.C. (S) 2601 et seq.); Clean Air Act U.S.C. (S) 136
-- ---
et seq.); the Occupational Safety and Health Act (29 U.S.C. (S) 651 et
-- --- --
seq.) and all applicable federal, state and local environmental laws,
---
including obligations under the common law, ordinances, rules and
-2-
regulations, as any of the foregoing may have been amended,
supplemented or supplanted prior to the date hereof, relating to
regulation or control of Hazardous Materials, or their handling,
storage or disposal or to environmental health and safety.
h. "Existing Loan" means one of the loans identified on Exhibit B, attached
------------- ---------
hereto and by this reference made a part hereof; and "Existing Loans"
--------------
means, collectively, all of the loans identified on Exhibit B hereto.
---------
i. "Existing Loan Documents" means, collectively, all of the loan documents
-----------------------
evidencing and securing an Existing Loan, as identified on Exhibit C,
---------
attached hereto and by this reference made a part hereof.
j. "Gross Income", for the purpose of determining the Contribution Value of
------------
a Development Property and subject to certain adjustments and
deductions expressly provided in this definition, means the sum of the
gross rental income, including applicable Pro Forma Reimbursable
Amounts, scheduled to be paid by each Tenant under its Lease for the
twelve (12) month period commencing on the Contribution Date, subject
to the following:
i. If Tenant free rent concessions for a Lease exceed (A) three (3)
months for a Lease that has an original term of at least five (5)
years, or (B) one (1) month for a Lease that has an original term of
less than five (5) years (in either case, such excess, the "Excess
Tenant Concessions"); then, the amount included in determining Gross
Income from this Lease shall equal the dollar amount derived from
the following formula:
(A) [(B - C)/B] = D
where in the foregoing formula:
A = gross rental income, including applicable
Pro Forma Reimbursable Amounts, scheduled to be paid
under the Lease for the twelve (12) month period
commencing on the Contribution Date;
B = total gross rental income, including applicable Pro
Forma Reimbursable Amounts, scheduled to be paid under
the Lease for the original term of the Lease,
calculated without regard to Excess Tenant Concessions;
-3-
C = total value of the Excess Tenant Concessions for the
initial term of the Lease; and
D = amount to be included in Gross Income from the Lease.
ii. If the allowance for tenant finish exceeds the applicable Pro Forma
Level of Tenant Allowance in a Lease in a Development Property, for
the purpose of determining Gross Income from that Development
Property, the rental income attributable to the twelve (12) month
period commencing on the Contribution Date shall be reduced by the
amount attributable to that twelve (12) month period for
amortization of such excess tenant allowance and lease commissions
attributable to that excess tenant allowance. For this purpose, the
amortization shall be computed by treating the amount of the excess
tenant allowance and related commission cost as a loan to Tenant
having a term equal to the original term of the Lease and bearing
interest at a simple interest rate per annum of ten and one-quarter
percent (10.25%) to be repaid in equal monthly installments of
principal and interest over the original term of the Lease.
k. "Hazardous Materials" means (i) those substances included within
-------------------
definitions of or identified as "hazardous substances," "hazardous
materials," or "toxic substances" in or pursuant to Environmental Laws;
(ii) those substances listed in the United States Department of
Transportation Table (40 CFR 172.101 and amendments thereto) or by the
Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto); (iii) any material,
waste or substance which is or contains (A) petroleum, including crude
oil or any fraction thereof, natural gas or synthetic gas usable for
fuel or any mixture thereof, or any product containing the foregoing
substances, (B) asbestos or asbestos containing material, (C)
polychlorinated biphenyls, (D) any substance designated as "hazardous
substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. (S)
1251 et seq. (33 U.S.C. (S) 1321), or listed pursuant to Section 307 of
-- ---
the Clean Water Act (33 U.S.C. (S) 1317); (E) flammable explosives; (F)
radioactive materials; and (iv) such other substances, materials and
wastes which are or become regulated as hazardous, toxic or "special
wastes" under Environmental Laws.
l. "X.X. Xxxxxxx" means Xxxxxx X. Xxxxxxx, an individual resident of North
------------
Carolina.
m. "Improvements" means all buildings, structures and other improvements,
------------
including such fixtures as constitute real property, located on the
Land.
-4-
n. "Intangible Personal Property" means any intangible personal property
----------------------------
now or hereafter owned by Project Entity in connection with the Land,
the Improvements or the Tangible Personal Property, and all of Project
Entity's rights under all contracts, utility arrangements, and other
agreements relating to the ownership, operation and occupancy thereof,
including, without limitation, warranties from contractors on the
Improvements, roof warranties, equipment warranties, the Leases and
Service Contracts; provided, however, the term "Intangible Personal
-------- -------
Property" does not include any cash on hand and in bank accounts, notes
receivable, accounts receivable (except as provided in Paragraph 11),
rights under pending litigation, any rights to the name "Lichtin
Properties, Inc.", and any prepaid insurance premiums.
o. "Land" means those certain tracts or parcels of real property located
----
in Wake County, North Carolina, and containing approximately 25.0 acres,
in the aggregate, as more particularly described in Exhibit D, attached
---------
hereto and by this reference made a part hereof, together with all of
Project Entity's right, title and interest in and to all appurtenances,
rights, easements, tenements and hereditaments incident thereto. Land
does not include the Regency Forest Land.
p. "Lease" means any lease or occupancy agreement affecting the Development
-----
Properties.
q. "Leasing Guidelines" means the leasing guidelines set forth on
------------------
Exhibit E, attached hereto and by this reference made a part hereof.
r. "Lender" means the holder of an Existing Loan.
------
s. "Liens" means any liens, security interests, mortgages, deeds of trust,
-----
charges, claims, encumbrances, pledges, options, rights of first offer
or first refusal and any other rights or interests of others of any kind
or nature, actual or contingent, or other similar encumbrances of any
nature whatsoever.
t. "M.A. Xxxxxxxxx" means Xxxxx Xxxxxxxxxx Xxxxxxxxx, an individual
--------------
resident of Texas.
u. "Net Operating Income", for the purposes of determining the
--------------------
Contribution Value of a Development Property as of its Contribution
Date, means (i) Vacancy Adjusted Gross Income; less (ii) Operating
Expenses.
v. "Xxxx Xxxxxxx" means Xxxx Xxxxxxx, an individual resident of North
------------
Carolina.
-5-
w. "Operating Expenses", for the purposes of determining the Contribution
------------------
Value of a Development Property, means the applicable Pro Forma Annual
Operating Expense for the twelve (12) month period commencing on the
Contribution Date for that Development Property. Operating Expenses also
shall include, without limitation, (i) a management fee equal to four
percent (4%) (or such other percentage as is contractually agreed in a
Lease for the gross rental income from that Lease) of Vacancy Adjusted
Gross Income (but not including reimbursables) for the twelve (12) month
period commencing on the Contribution Date for that Development
Property, and (ii) a reserve for expenses in the amount of eight cents
($.08) per square foot of area in the Enterprise III Development
Property, five cents ($.05) per annum per square foot of area in the
Woodlake III Development Property and ten cents ($.10) per annum per
square foot of area in the Regency-Sprint Development Property and the
0000 Xxxxxxxxx Xxxx Xxxx Development Property.
x. "Partnership Amendment" means that certain Second Amendment to Second
---------------------
Amended and Restated Agreement of Limited Partnership, dated of even
date herewith, pursuant to which X.X. Xxxxxxx and M.A. Xxxxxxxxx, among
others, are admitted as limited partners to Weeks.
y. "Permitted Exceptions" means those matters set forth in Exhibit F,
--------------------
attached hereto and by this reference made a part hereof, the Existing
Loan Documents, together with any matter expressly approved by Weeks
pursuant to this Agreement.
z. "PPW" means Perimeter Park West Associates Limited Partnership, a North
---
Carolina limited partnership having X.X. Xxxxxxx and M.A. Xxxxxxxxx as
its General Partners.
aa. "Pro Forma Annual Operating Expense" means the pro forma annual
----------------------------------
operating expense set forth on Exhibit G, attached hereto and by this
---------
reference made a part hereof.
bb. "Pro Forma Cost" means the pro forma cost for each Development
--------------
Property also set forth on said Exhibit G hereto.
cc. "Pro Forma Level of Tenant Allowance" means the following applicable
-----------------------------------
level of tenant finish allowance per square foot of area in the
following Development Properties:
-6-
Development Property Allowance
-------------------- ---------
Woodlake III $ 7.00
Regency - Sprint $20.00 (below hung ceiling)
0000 Xxxxxxxxx Xxxx Xxxx $20.00 (below hung ceiling)
Enterprise III $20.00 (below hung ceiling)
dd. "Pro Forma Reimbursable Amounts" means the pro forma reimbursable
------------------------------
amounts also set forth on said Exhibit G hereto.
---------
ee. "Project Entity" means Regency Forest, LLC, a North Carolina limited
--------------
liability company, having X.X. Xxxxxxx, M.A. Xxxxxxxxx and PPW as its
sole Members, which is the Project Entity as to the Regency-Sprint
Development Property and the Regency Forest Land, and FutureP Limited
Partnership, a North Carolina limited partnership, having X.X. Xxxxxxx
and M.A. Xxxxxxxxx as its General Partners, and PPW as its sole limited
partner, which together with any new limited partnership formed pursuant
to Paragraph 3 of this Agreement, as to the Development Property it will
own at the time that Development Property is contributed to Weeks, is
the Project Entity for the Woodlake III Development Property, the 0000
Xxxxxxxxx Xxxx Xxxx Development Property, and the Enterprise III
Development Property.
ff. "Real Property" means collectively, the Land and the Improvements.
-------------
gg. "Regency Forest Land" means the 22.0 acres of undeveloped land located
-------------------
in Wake County, North Carolina, as generally depicted on the site plan
attached hereto as Exhibit Q hereto. Regency Forest Land does not
---------
include the Land.
hh. "Rent Roll" means any and all Leases containing, with respect to each
---------
Lease, information as to the commencement date of such Lease, the
termination date of such Lease, any renewal rights or expansion rights
under such Lease, the approximate square footage of the leased premises
under such Lease, the annual base rental and additional rent due under
such Lease, and the amount and duration of any rent or other concessions
made to the Tenant under such Lease. The Rent Roll attached hereto as
Exhibit H and by this reference made a part hereof, sets forth the
---------
status of leasing at the Development Properties as of the date hereof.
ii. "Rights Agreements", collectively, means that certain Registration
-----------------
Rights and Lock-Up Agreement and that certain Registration Rights and
Lock-Up Agreement for Post-June 30, 1998 Shares and Units, both dated of
-7-
even date herewith and both by and among Weeks and X.X. Xxxxxxx, M.A.
Xxxxxxxxx and certain other contributors identified in the Transaction
Documents.
jj. "Service Contracts" means any and all of the service contracts,
equipment, labor or material contracts, management contracts,
maintenance or repair contracts, personal property leases or other
agreements (other than the Leases and related lease commission
agreements) entered into by Project Entity (or its predecessors) and
that are in force and effect and that affect the Development Properties
or the operation, repair, or maintenance thereof.
kk. "Security Deposits" means the refundable deposits (in the form of
-----------------
cash, letters of credit or certificates of deposit) made by Tenants with
Project Entity as security for such Tenants' obligations under their
respective Leases, to the extent not previously forfeited, applied or
refunded, together with interest thereon accrued as of the Contribution
Date which Project Entity is obligated to pay to any such Tenants.
ll. "Stabilization", with reference to a specific Development Property,
means that all of the following conditions have been met: (i) ninety-
five percent (95%) of the net leasable area of the Improvements have
been leased to creditworthy Tenant(s) approved by Weeks under Lease(s)
approved by Weeks (which will base its approval on commercially
reasonable standards); (ii) Tenant(s) are in actual possession and have
accepted possession of ninety-five percent (95%) of the net leasable
area of the Improvements; (iii) except for free-rent periods expressly
stipulated in the Lease(s), rental shall have commenced on ninety-five
percent (95%) of the net leasable area of the Improvements and all other
concessions (besides any free rent periods) shall have expired; (iv) no
default by Project Entity or any Tenant is then outstanding and uncured
under the Lease(s), and (v) all of matters described in the foregoing
four (4) clauses have been confirmed to Weeks by the Tenant(s) pursuant
to Tenant Estoppel Certificate(s). For the purposes this definition, the
Contributors and Weeks agree that the net leasable area of the
Improvement in each Development Property is that set forth on Exhibit A
---------
hereto.
mm. "Tangible Personal Property" means all tangible personal property
--------------------------
located on the Real Property which is owned by Project Entity and used
in the ownership, operation and maintenance of the Land and
Improvements, including, without limitation, all art, furniture,
furnishings, fixtures and equipment and stock for completion of Tenant
improvements.
nn. "Tenant" means any Tenant or lessee under any of the Leases.
------
-8-
oo. "Tenant Estoppel Certificate" means the certificate to be submitted for
---------------------------
execution to each Tenant with respect to the Lease pursuant to which
such Tenant leases space in the Improvements, such certificate to be in
the form attached hereto as Exhibit I and incorporated herein by this
---------
reference.
pp. "To Contributors' Knowledge" means to the current actual knowledge of
--------------------------
X.X. Xxxxxxx, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxx.
qq. "Total Potential Gross Income", for the purpose of determining Vacancy
----------------------------
Adjusted Gross Income, means at the Contribution Date the sum of (i)
Gross Income, and (ii) the amount of Gross Income (including Pro Forma
Reimbursable Amounts) that would accrue from all vacant space in a
Development Property if such vacant space were leased at the rental
rates specified in the Leasing Guidelines, and assuming a term of less
than 10 years, with no adjustment for any excess tenant concessions or
excess office finish and related Lease commissions.
rr. "Units" means limited partnership units in Weeks Realty, L.P., as
-----
described in the Rights Agreements.
ss. "Unit Price" means the arithmetic average, rounded to the nearest
----------
one-eighth (1/8), of the daily closing price of a share of common stock
of Weeks Corporation on the New York Stock Exchange for the twenty (20)
trading days immediately prior the Contribution Date; provided, however,
if the Contribution Date is on or before July 1, 1997, and if such
average is less than Twenty-Five Dollars and Twenty-Five Cents ($25.25),
the Unit Price shall be Twenty-Five Dollars and Twenty-Five Cents
($25.25) and, if such average exceeds Twenty-Seven Dollars ($27.00), the
Unit Price shall be Twenty-Seven Dollars ($27.00). The Unit Price set
forth in the immediately preceding sentence is a negotiated amount for
the purposes of this Agreement and does not reflect a valuation by the
Contributors or Weeks of Weeks Corporation or Weeks.
tt. "Vacancy Adjusted Gross Income", to adjust for possible future vacancy,
-----------------------------
for each Development Property as of the Contribution Date, means the
following:
i. If on the Contribution Date, less than ninety-five percent (95%) of
the space in such Development Property is leased, then the Vacancy
Adjusted Gross Income shall equal the Gross Income.
ii. If on the Contribution Date, at least ninety-five percent (95%) of
the space in such Development Property is leased, then the Vacancy
Adjusted Gross Income shall be the lesser of:
-9-
(1) Gross Income of that Development Property; or
(2) ninety-five percent (95%) of Total Potential Gross Income of
that Development Property, plus an amount equal to five percent
(5.0%) of the Gross Income attributable to leases having a term
of ten years or more.
2. COVENANT TO CONTRIBUTE. The Contributors hereby covenant and agree to
----------------------
contribute the Development Properties to the capital of Weeks pursuant
to the structure outlined in Paragraph 3 of this Agreement and in
accordance with, and subject to, the terms and conditions of this
Agreement. Weeks hereby covenants and agrees to accept Contribution of
the Development Properties to its capital pursuant to the structure
outlined in Paragraph 3 of this Agreement and in accordance with, and
subject to, the terms and conditions of this Agreement.
3. STRUCTURE OF CONTRIBUTION. Each time a Development Property is to be
-------------------------
Contributed to the capital of Weeks by the Contributors pursuant to
this Agreement: (i) on the Contribution Date, immediately prior to the
Contribution, the Development Properties and Regency Forest Land that
are not then being Contributed to Weeks shall be transferred to a
newly-formed limited partnership having the same partners as FutureP
Limited Partnership; (ii) on the Contribution Date, each of the
Contributors shall contribute to the capital of Weeks all general
partnership interests limited partnership interests or membership
interests, as applicable, in Project Entity that still owns the
Development Property being Contributed, (iii) in exchange for the
Contribution of ownership interests in such Project Entity, as
described in the immediately preceding clause (ii), Weeks shall issue
Units to the Contributors as provided in Paragraph 7 and immediately
following such Contribution as described in clause (ii) above, on the
Contribution Date, Weeks, as the sole owner of all ownership interests
in that Project Entity, shall dissolve that Project Entity and all
assets of that Project Entity, including the Development Property,
shall be distributed in dissolution to, and become part of the capital
of, Weeks and the Existing Loans encumbering the Development Property
shall be assumed by Weeks subject to the non-recourse provisions
thereof. Notwithstanding the foregoing provisions of this Paragraph 3
to the contrary, the Contributors may elect to cause Contribution of a
Development Property or the Regency Forest Land to be made by general
warranty deed from the Project Entity to Weeks.
4. CONTRIBUTION DATE. The Contribution Date for each Development Property
-----------------
shall be established as follows:
a. Each Development Property shall be Contributed by the Contributors to
Weeks pursuant to this Agreement on the earlier of (i) June 30, 1998,
-10-
or the (ii) date on which that Development Property achieves
Stabilization, which date, in either case, shall be the Contribution
Date for that Development Property.
b. Notwithstanding the provisions of Paragraph 4a of this Agreement to the
contrary, the Contributors may elect to Contribute a Development
Property before it achieves Stabilization (provided all other
conditions in Paragraph 16 are satisfied, including shell completion
and the obtaining of Tenant Estoppel Certificates) if the Net Operating
Income of such Development Property exceeds ten and four-tenths percent
(10.4%) of the applicable Pro Forma Cost for that Development Property.
In this case, the Contribution Date for that Development Property (as
demonstrated to the reasonable satisfaction of Weeks), shall be a date
within thirty (30) days after such level of return is achieved
designated by the Contributors by notice to Weeks.
5. CONTRIBUTION VALUE. The Contribution Value of a Development Property
------------------
shall be determined as of its Contribution Date and shall equal the
greater of:
a. The Net Operating Income of that Development Property determined as of
its Contribution Date divided by decimal one zero four (.104).
b. The applicable Pro Forma Cost (reduced by those amounts not yet
expended for tenant finish, related lease commissions and other costs
attributable to space not yet leased).
6. ADJUSTED CONTRIBUTION VALUE. After determination of the Contribution
---------------------------
Value of a Development Property, such Contribution Value shall be
subject to the following further prorations, allocations and
adjustments, all as of the Contribution Date (the "Adjusted
Contribution Value"):
a. If no adjustment to Gross Income has been made for free rent
concessions pursuant to clause (i) of the definition of Gross Income,
the Contribution Value shall be reduced by the amount of free rent
concessions unexpired as of the Contribution Date; provided, however,
the Contributors may elect to make a cash payment to Weeks for the
amount of unexpired free rent concessions in lieu of such adjustment.
b. If adjustment to Gross Income has been made for excess tenant finish
allowance and related lease commission pursuant to clause (ii) of the
definition of Gross Income, the Contribution Value shall be increased
by the actual cost of such excess tenant finish allowance and related
lease commissions.
c. If the Development Property is to be contributed subject to an
Existing Loan in accordance with the terms and conditions of
-11-
Paragraph 9 of this Agreement, the Contribution Value shall be reduced
by the outstanding principal balance of that Existing Loan as of the
Contribution Date.
d. Any other adjustment to the Contribution Value for which express
provision is made in this Agreement.
7. ISSUANCE OF UNITS. At Contribution, Weeks shall issue Units to the
-----------------
Contributors as provided in this Paragraph 7:
a. Weeks shall issue to each of the Contributors, pro rata in accordance
with their respective ownership interests in the Project Entity, a
number of Units equal to the quotient of the Adjusted Contribution
Value divided by the Unit Price.
b. Units issued by Weeks to the Contributors pursuant to this Agreement
shall be held by the Contributors subject to the terms and conditions
of the Partnership Amendment and the applicable Rights Agreements.
c. Notwithstanding any provision of this Agreement to the contrary, no
fractional Units shall be issued to the Contributors pursuant to this
Agreement. If as a result of the application of the foregoing formulas,
a fractional Unit is due any Contributor, Weeks shall pay to that
Contributor, in cash on the same date as the fractional Unit would
otherwise be issued and in lieu of any such fractional Unit, an amount
equal to that fractional Unit times the applicable Unit Price, as
determined pursuant to this Agreement.
8. INTERIM CONDUCT.
---------------
a. The Contributors hereby covenant and agree with Weeks that, so long as
this Agreement remains in full force and effect, the Contributors will
not permit any Project Entity to sell, assign, rent, lease, convey
(absolutely or as security), grant a security interest in, or otherwise
encumber or dispose of, the Development Properties (or any interest or
estate therein) without the prior written consent of Weeks; provided,
however, a Project Entity may enter into Leases for space in the
Development Properties without the prior written consent of Weeks so
long as (i) the terms of the Lease equal or exceed the Leasing
Guidelines, (ii) the prospective Tenant is approved by Weeks, in the
exercise of commercially reasonable judgment (provided, however, if the
Tenant is an affiliate of the Contributors, Weeks may elect to withhold
its approval in its absolute and sole discretion), (iii) the Lease is
on a form previously approved by Weeks, and (iv) within ten (10)
business days after written request by Weeks, the Contributors shall
furnish a copy of any such Lease which has been executed since the last
such request from Weeks.
-12-
b. The Contributors covenants and agrees that, so long as this Agreement
remains in full force and effect, the Contributors will not permit
Project Entity to amend or modify the Existing Loan Documents in any
way, will cause Project Entity to make all payments of money, and will
cause Project Entity to perform all obligations, required under the
Existing Loan Documents. The Contributors will take no affirmative
action and will not permit Project Entity to take any affirmative
action which shall cause the Contributors to be unable to contribute
good and marketable title to the Development Properties or which shall
cause any warranty or representation contained in this Agreement to be
incorrect or misleading in any material request at any time.
c. The Contributors and Weeks agree that a "Bulk Building", a
"Distribution Building", a "Flex Building" and an "Office Building" (as
that terms are defined in this subparagraph) do not compete with each
other for prospective Tenants. Until such time as the net leasable area
of a Development Property (which has not yet been contributed to Weeks)
is at least fifty percent (50%) leased, Weeks agrees to not commence
construction of a building in the same park as that Development
Property is located that would compete with that Development Property.
By way of illustration and not limitation, if a Development Property is
classified as a "Flex Building", then pursuant to the foregoing
restriction, Weeks could commence construction of a Bulk Building, a
Distribution Building or an Office Building, but could not commence
construction of a Flex Building until such time as the net leasable
area of that Development Property, classified as a Flex Building, is at
least fifty percent (50%) leased. A "Flex Building" means a building
with less than eighteen (18) feet of clear interior height with grade
level loading. A "Bulk Building" means a building with a minimum of
eighteen (18) feet of clear interior height with dock level loading in
which ten percent (10%) or less of the rentable area is devoted to
office use. A "Distribution Building" means a building with a minimum
of eighteen (18) feet of clear interior height with dock level loading
in which more than ten percent (10%) of the rentable area is devoted to
office space. An "Office Building" means a building with dropped
ceilings, finished walls and floors and heating, ventilating and air
conditioning which is used primarily for office purposes.
d. On even date herewith, the Contributors shall cause the Project Entity
to enter into an agreement with Weeks (i) for the provision of
construction and development services with respect to the completion of
shell construction and construction of Tenant improvements in each of
the Development Properties for which Weeks shall earn fees equal to
five percent (5%) of the total costs incurred after the date hereof,
payable monthly; and (ii) for the provision of property management and
leasing services for each of the Development Properties for a term
commencing on the date hereof and ending, with respect to each of the
Development Properties, on the date that Development Property is
contributed to Weeks for a management fee equal to four percent (4%)
-13-
(or such other percentage as is contractually agreed in a Lease with
respect to the rental collected from that Lease) of the gross collected
rent (excluding reimbursables) for each of the Development Properties,
payable monthly, and customary leasing fees and commissions.
e. The Contributors hereby covenant and agree, at their sole cost and
expense, to construct the Improvements on the Land in a good and
workerlike fashion, in compliance with all applicable laws, ordinances
and regulations and substantially in accordance with plans and
specifications approved by Weeks, which approval not to be unreasonably
withheld or delay. The Contributors further agree and covenant to
prosecute such construction in a diligent manner so as to comply with
all terms and conditions of the Existing Loan Documents or any Lease
affecting the Development Properties.
9. EXISTING LOANS.
--------------
a. The Development Properties are subject to the Existing Loans and are
encumbered by the Existing Loan Documents. At the time the Contributors
notify Weeks that a Development Property is to be contributed to Weeks
pursuant to this Agreement, such notice shall state whether (i) the
Contributors, at their sole cost and expense, will pay-in-full the
Existing Loan that encumbers each Development Property to be
contributed and cause the Existing Loan Documents to be canceled
immediately prior to the Contribution, or (ii) the Contributors intend
to contribute the Development Property subject to the Existing Loan to
Weeks pursuant to this Agreement.
b. Weeks agrees to accept a Contribution of a Development Property
subject to the Existing Loan applicable thereto and assume the Existing
Loan (subject to its non-recourse provisions), provided each of the
following conditions is satisfied at the time of Contribution to the
reasonable satisfaction of Weeks:
i. On or before Contribution, Weeks shall receive from the Lender of
the Existing Loan an estoppel and consent agreement in form and
content reasonably acceptable to Weeks confirming, among such
other matters as Weeks may reasonably require, that it is the
holder of the applicable Existing Loan Documents, the outstanding
principal of the Existing Loan, that no default is then
outstanding, identifying the applicable Existing Loan Documents,
confirming the amounts of any tax and insurance escrows, and
consenting to the Contribution to Weeks of the Development
Property as provided in this Agreement and the assumption by
Weeks, subject to the limited recourse provision therein
contained, of the Existing Loan.
ii. On or before the Contribution, the agreement by the Lender of the
Existing Loan to modification of the applicable Existing Loan
-14-
Documents to reflect change in ownership (e.g., financial
----
reporting requirements, transfer restrictions, deletion of any
personal covenants specific to the Contributors and other matters
that Weeks, in the exercise of commercially reasonably judgment,
deems necessary or appropriate [but in no event, shall Weeks
propose amendments to the loan amount, loan term, payment schedule
or interest rate, except as provided in clause (iii) below]).
iii. The outstanding principal balance of the Existing Loan proposed
to be assumed (A) when added to Existing Loans previously assumed
by Weeks pursuant to this Paragraph must not exceed Twenty-Two
Million Five Hundred Thousand Dollars ($22,500,000); and (B) must
not exceed the Contribution Value of the Development Property it
encumbers.
iv. The Contributors shall pay all transfer fees and all other
expenses and costs imposed by the Lender of the Existing Loan,
including, without limitation, its attorneys' fees and expenses,
as a condition to assumption.
10. TITLE AND SURVEY.
----------------
a. Weeks hereby approves the Permitted Exceptions (including, without
limitation, the Leases identified on the Rent Roll) and agrees to
accept the Contribution of a Development Property subject to the
Permitted Exceptions applicable to the Development Property, except for
those Permitted Exceptions that relate to the Existing Loan that
encumbers that Development Property that is not to be assumed by Weeks
pursuant to Paragraph 9 of this Agreement.
b. Within thirty (30) days before the Contribution Date of a Development
Property, Weeks shall cause title and survey to be updated and Weeks
shall identify in such notice any title exception (other than Permitted
Exceptions) Weeks determines to be objectionable. The Contributors
shall cure any such exception on or before the Contribution Date to
Weeks' reasonable satisfaction and, if such cure is not completed by
that date, then the Contribution shall be delayed for a period not to
exceed sixty (60) days to permit the Contributors additional time to
cure. If after such delay, such title objection is not cured to Weeks'
reasonable satisfaction, Weeks may elect to do one of the following:
(i) cure the exception, with all costs and expenses incurred by Weeks
applied to reduce the Contribution Value and the Adjusted Contribution
Value, in which case the Contribution shall be further delayed an
additional sixty (60) day period, or (ii) terminate this Agreement as
to that Development Property or as to the remaining uncontributed
Development Properties (if the nature of the exception is such that it
affects the remaining uncontributed Development Properties) and xxx the
Contributors for damages at law, or (iii) seek specific performance of
the Contributors' obligations hereunder.
-15-
11. DATE, TIME AND PLACE OF CONTRIBUTION. Each Contribution shall
------------------------------------
commence at 9:00 a.m., local time, on the Contribution Date at the
offices of Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P., Two Hanover
Square, Suite 1900, 000 Xxxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, or at such other place as may be agreed by the
Contributors and Weeks. The following adjustments and prorations shall
be made on the Contribution Date with respect to the Development
Property and the Regency Forest Land to be Contributed on that date by
appropriate cash payments between the Contributors and Weeks.
a. The Contributors shall be entitled to all rents [including any
additional rent and any accrued tax and operating expense
reimbursements, subject to clause (b) below], charges, and other
revenue of any kind attributable to any period under the Leases or
otherwise up to but not including the Contribution Date. Weeks shall be
entitled to all rents [including any additional rent and any accrued
tax and operating expense reimbursements, subject to clause (b) below],
charges and other revenue of any kind attributable to any period under
the Leases or otherwise on and after the Contribution Date. Rents and
expense escalations or other reimbursements due landlord under the
Leases collected prior to the Contribution Date and attributable to
both the Contributors' and Weeks' periods of ownership shall be
prorated as of the Contribution Date. Uncollected rents and expense
escalations or other reimbursements due landlord under the Leases shall
not be prorated at the time of Contribution, but Weeks shall include
such amounts in Weeks' monthly billing statements to the Tenants, make
reasonable efforts to collect the same and tender the same to X.X.
Xxxxxxx, as agent for the Contributors, upon receipt, provided that all
rents, escalations and other reimbursements due landlord under the
Leases collected by Weeks on or after the Contribution Date shall be
prorated as of the Contribution Date and shall first be applied to all
amounts due under the Leases at the time of collection (i.e., current
rents, delinquent rents attributable to periods after Contribution and
sums due Weeks as the current owner and landlord) with the balance (if
any) payable to the Contributors, but only to the extent of amounts
delinquent and actually due the Contributors. The Contributors shall
not have any right to xxx any Tenant under the Leases for sums due the
Contributors for periods attributable to the Contributors' ownership of
the Development Property. The Contributors shall pay to Weeks a sum
equal to all Security Deposits (excluding certificates of deposit,
letters of credit or the like which shall be assigned to Weeks at
Contribution to the extent assignable by the Contributors, the
Contributors agreeing to make reasonable efforts to cause the same to
be assignable by the Contributors or otherwise to be assigned to Weeks)
and pre-paid rentals held by the Contributors under the Leases.
b. Real estate taxes shall be prorated as of the Contribution Date. The
Contributors shall be responsible for all real estate taxes
attributable to the Development Property to, but not including the,
-16-
Contribution Date. If the real estate tax rate and assessments have not
been set for the year in which the Contribution occurs, then the
proration of such taxes shall be based upon the rate and assessments
for the preceding tax year, and such proration shall be adjusted in
cash between the Contributors and Weeks upon presentation of written
evidence that the actual taxes paid for the year in which the
Contribution occurs differ from the amounts used at Contribution.
Notwithstanding the foregoing, the Contributors shall be entitled to a
refund of the Contributors' proportionate share of such taxes for which
the Contributors has not been reimbursed by Tenants, to the extent
Weeks after Contribution recovers such reimbursement in taxes
attributable to the year in which Contribution occurs from the Tenants
under the Leases, and Weeks agrees to conduct an annual reconciliation
of tax "pass-through" for the tax year of Contribution in accordance
with the terms of the Leases.
c. Operating expenses for the Development Property shall be prorated as
of the Contribution Date. The Contributors shall pay all utility
charges and other operating expenses attributable to the Development
Property for the period prior to but not including the Contribution
Date (except for those utility charges and operating expenses payable
by Tenants in accordance with the Leases) and Weeks shall pay all
utility charges and other operating expenses attributable to the
Development Property for the period on or after the Contribution Date.
Notwithstanding the foregoing, the Contributors shall be entitled to a
refund of the Contributors' proportionate share of such operating
expenses for which the Contributors has not been reimbursed by Tenants,
to the extent Weeks after Contribution recovers such reimbursement in
operating expenses attributable to the year in which Contribution
occurs form the Tenants under the Leases, and Weeks agrees to conduct
an annual reconciliation of operating expenses "pass-through" for the
Contribution in accordance with the terms of the Leases. The
Contributors shall cause the Project Entity to assign to Weeks any
deposits which the Contributors have with any of the utility services
or companies servicing the Development Property. Weeks shall arrange
with such services and companies to have accounts opened in Weeks' name
as of the day following the Contribution Date, as soon as is reasonably
practicable after Contribution.
d. If the Development Property is to be contributed subject to an
Existing Loan in accordance with the terms and conditions of Paragraph
9 of this Agreement, (i) the Contributors shall make a cash payment to
Weeks equal to the sum of the amount of accrued but unpaid interest due
under the Existing Loan attributable to any period up to, but not
including, the Contribution Date; and (ii) Weeks shall make a cash
payment to the Contributors equal to the amount of any tax, insurance
premium or other escrow deposits maintained pursuant to the Existing
Loan Documents to the extent ownership of such deposits are transferred
to Weeks.
e. If at any time following the Contribution Date the amount of an item
listed in the subparagraphs of this Paragraph 11 shall prove to be
incorrect, the party in whose favor the error was made shall promptly
-17-
pay to the other party the sum necessary to correct such error upon
receipt of proof of such error, provided that such proof is delivered
to the party from whom payment is requested on or before one (1) year
after the Contribution Date.
12. COSTS AND EXPENSES; PREPARATION OF DOCUMENTS. Costs and expenses
--------------------------------------------
shall be apportioned in the following manner:
a. Weeks shall pay the premium for title insurance, the survey fees
(except as provided in Paragraph 21r) and recording costs related to
each Contribution, as well as all costs incurred by it in inspecting
the Development Properties and making such other investigations thereof
as it deems appropriate.
b. The Contributors shall pay all transfer taxes, if any, and any fees
and expense imposed by a Lender under Paragraph 9 hereof.
c. Each party shall pay its own attorneys' fees in connection with this
transaction.
d. Weeks' attorney shall prepare all Contribution documents, which shall
be subject to the reasonable approval of the Contributors' attorney
and which shall be substantially the same as the documents used in
the Initial Contribution.
13. ACCESS TO AND EXAMINATION OF THE DEVELOPMENT PROPERTIES. Weeks,
-------------------------------------------------------
personally or through agents, employees or contractors, may go upon the
Development Properties and the Regency Forest Land during normal
business hours prior to Contribution to conduct such soil, engineering,
environmental and other tests, investigations and analyses of the Land
and Improvements as Weeks deems desirable and to review and make
photocopies of the Leases, lease commission agreements, Service
Contracts, amendments, contracts and plans and specifications relating
to or affecting the Development Properties. Weeks shall pay all costs
incurred in making such tests, analyses, copies, and investigations. In
no event shall Weeks conduct any intrusive or destructive tests,
analyses, or investigations of the Development Properties without first
obtaining the Contributors' written consent, which will not be
unreasonably withheld. Weeks acknowledges that any such examinations or
inspections of the Development Properties pursuant to this subparagraph
or otherwise are subject to the rights of all Tenants, and Weeks agrees
to conduct such inspections or examinations in such a manner so as to
honor the rights of the Tenants and to prevent disruption of the
ordinary operation of the Tenants' business on the Development
Properties. Weeks agrees to repair any damage to the Development
Properties resulting or relating to such inspection or examination and
agrees to and does hereby indemnify, defend, and hold the Contributors
harmless from any personal injury, death, damage to property, damages,
liens, claims, losses, and liabilities arising out of Weeks' exercising
such right and privilege to go upon the Development Properties,
-18-
including the acts and omissions of Weeks' employees, agents,
contractors and consultants (but under no circumstances shall Weeks be
liable to the Contributors for consequential damages attributable to
the results or findings of such tests). Weeks' indemnity under this
subparagraph shall survive the Contribution or any termination of this
Agreement.
14. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS. As of the date of
--------------------------------------------------
this Agreement, the Contributors hereby make, jointly and severally,
for the benefit of Weeks the following representations and warranties:
a. Project Entity is a limited partnership or limited liability company
(as applicable), duly formed, validly existing and in good standing
under the laws of the State of North Carolina and has the requisite
authority to enter into and perform this Agreement. The Contributors
are the only general partners, limited partners or members, as
applicable, of Project Entity.
b. The execution, delivery and performance of this Agreement by Project
Entity has been duly and validly authorized by all necessary
partnership or company action. This Agreement has been duly executed
and delivered by the Contributors and constitutes a legal, valid and
binding obligation of the Contributors, enforceable against the
Contributors in accordance with the terms hereof (except as enforcement
may be limited by bankruptcy, insolvency or other laws affecting
enforcement of creditors' rights generally and general equity
principles).
c. Except as has been obtained or is being effected as part of the
consummation of the Transaction, no consent, waiver, approval or
authorization of, or filing, registration or qualification with, or
notice to, any governmental unit or any other regulatory body is
required to be made, obtained or given by the Contributors in
connection with the execution, delivery and performance of this
Agreement by the Contributors or the Project Entities.
d. Except for waivers and consents that have been obtained prior to the
date hereof, except as provided in Paragraph 9 of this Agreement, and
except as would not have a material adverse effect on any of the
Development Properties, no consent of any party to any agreement,
contract, mortgage, indenture, lease, reciprocal easement or operating
agreement or other arrangement, to which the Contributors or Project
Entity is a party, or, by which the Contributors or Project Entity is
bound, is required in connection with the execution, delivery or
performance by the Contributors of this Agreement or the consummation
of the transactions provided for herein.
e. None of the execution, delivery and performance of this Agreement by
the Contributors does or will, with or without the giving of notice,
lapse of time or both, (i) violate, conflict with or constitute a
default under any term or condition of (A) the organizational documents
-19-
of Project Entity, or (B) any term or provision of any judgment,
decree, order, statute, injunction, rule or regulation of a
governmental unit applicable to the Contributors or Project Entity or
any agreement, contract, mortgage, indenture, lease, reciprocal
easement or operating agreement or other arrangement to which any
Contributor or Project Entity is a party or by which it is bound or to
which any of its assets or any of the Development Properties is
subject, except as provided in Paragraph 9 of this Agreement and except
in the case where appropriate waivers and consents have been obtained
prior to the date hereof, and except as would not have a material
adverse effect on the Contributors, Project Entity or any of the
Development Properties, or (ii) result in the creation of any lien or
other encumbrance upon the assets of the Contributors, Project Entity
or any of the Development Properties, except as may be contemplated by
this Agreement or the other Transaction Documents, and except as would
not have a material adverse effect on the Contributors, Project Entity
or any of the Development Properties.
f. Project Entity has complied with all laws applicable to the conduct of
the business of Project Entity and to the ownership, use and operation
of the Development Properties and has obtained all licenses and permits
required for the conduct thereof, except where the failure to so comply
or obtain will not have a material adverse effect on Project Entity or
any of the Development Properties. To the Contributors' knowledge, such
licenses and permits are in full force and effect, the Contributors and
Project Entity have not taken any action that would (or failed to take
any action the omission of which would) result in the revocation of
such licenses or permits, and the Contributors and Project Entity have
not received any notice of violation from any federal, state or
municipal entity or written notice of an intention by any such
government entity to revoke any certificate of occupancy or other
certificate, license or permit issued by it in connection with the use
of any of the Development Properties, that in each case has not been
cured or otherwise resolved to the satisfaction of such government
entity, except where such failure or such action will not have a
material adverse effect on the Contributors, Project Entity or any of
the Development Properties.
g. With regard to investment:
i. Each Contributor is acquiring Units for its own account and not
with a view to, or for sale in connection with, the
"distribution", as such term is used in Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"), of any
of Units in violation of the Securities Act.
ii. Each Contributor is an "accredited investor", as that term is
defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.
iii. Each Contributor understands that the Units have not been
registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act
-20-
which depends upon, among other things, the nature of the
investment intent and the accuracy of such Contributor's
representations as expressed herein.
h. Each Contributor has had an opportunity to discuss Weeks' business,
management and financial affairs with Weeks' management and the
opportunity to review Weeks' financial records.
i. Each Contributor understands and acknowledges that no public market
now exists for any of the securities issued by Weeks and that there can
be no assurance that a public market will ever exist for the Units.
j. Each Contributor has such knowledge and experience in financial and
business matters that each Contributor is capable of evaluating the
merits and risks of the purchase of the Units pursuant to this
Agreement and of protecting each Contributor's interests in connection
herewith.
k. The Contributors and Project Entity have not knowingly caused or
permitted any Hazardous Material to be improperly maintained or
disposed of on, under or at any of the Development Properties or any
part thereof. To the Contributors' knowledge, and except as may be
revealed in the environmental reports (which are identified in
Exhibit J): (i) no liability under or violation of any Environmental
---------
Laws exists with respect to Development Properties, (ii) the
Contributors and Project Entity have not received any written notice
from any governmental agency or instrumentality having jurisdiction
thereof of any violation of any Environmental Laws that remains uncured
as of the date hereof or that it has any material liability with
respect thereto, (iii) there are no administrative, regulatory or
judicial proceedings pending or threatened against Project Entity
pursuant to, or alleging any material violation of, or material
liability under any Environmental Laws, (iv) none of the properties now
or heretofore owned, leased or used by Project Entity has been used as
a storage or disposal site (whether temporary or permanent) for any
hazardous, toxic or dangerous materials the storage or disposal of
which is governed by any Environmental Laws in violation of such
Environmental Laws, (v) there are no underground storage tanks located
on, under or about any of the Development Properties, and there is no
facility located on or at any of the Development Properties that is
subject to the reporting requirements of Section 312 of the Federal
Emergency Planning and Community Right to Know Act of 1986 and the
federal regulations promulgated thereunder (42 U.S.C. (S) 11022), and
(vi) no Hazardous Material has been improperly maintained or disposed
of on, under or at any of the Development Properties or any part
thereof. In connection with the representations and warranties in this
subparagraph, Weeks acknowledges that the Contributors disclaims any
professional expertise with respect to Environmental Laws.
-21-
l. With respect to the Development Properties, Project Entity (i) is the
sole owner and (ii) has good, valid and marketable title, free and
clear of all liens other than the following:
i. Liens securing the Existing Loans, Liens, or deposits made to
secure the release of such Liens, securing taxes, the payment of
which is at the time not delinquent or the payment of which is
actively being contested in good faith by appropriate proceedings
diligently pursued, and for which appropriate reserves shall have
been established by Project Entity.
ii. Attachments, judgments and other similar liens arising in
connection with court or administrative proceedings, provided,
that the execution or other enforcement of such liens is
effectively stayed or secured and the claims secured by such liens
are actively being contested in good faith by appropriate
proceedings diligently pursued, and for which appropriate reserves
shall have been established by Project Entity.
iii. Zoning laws and ordinances; provided that, to the Contributors'
knowledge, none of the Development Properties are in violation
thereof, in any material respect and that such laws and ordinances
do not require the demolition, vacation or cessation of the use
for industrial or office purposes (as applicable) of any portion
of the improvements material to each of the Development Properties
or require the discontinuance of the use of all or any material
portion of any of the Development Properties as industrial
facilities or office buildings.
iv. Any laws, ordinances, deeds of trust, mortgages, liens,
easements, rights of way, restrictions, exemptions, reservations,
conditions, limitations, covenants, encumbrances, adverse rights
or interests and other matters defined as Permitted Exceptions;
provided that, to the Contributors' knowledge, the Development
Properties are not in violation thereof in any material respect
and the same do not require the demolition, vacation or cessation
of the use of for industrial or office purpose of any portion of
the improvements material to such Development Properties or
require the discontinuance of the use of all or any material
portion of such Development Properties as industrial facilities or
office buildings.
v. Any other easements, rights of way, restrictions, exceptions,
reservations, conditions, limitations, covenants, adverse rights
or interests, licenses, minor irregularities in title and other
similar encumbrances which do not in the aggregate materially
impair the use of such properties in the operation of the business
of Project Entity.
-22-
vi. Any law or governmental regulation or other right of any
governmental unit, which (i) requires the person to maintain
certain facilities or perform certain acts as a condition of its
occupancy or use of its assets and properties, or (ii) condemns,
appropriates or recaptures the person's assets or property.
vii. Liens imposed by laws, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary
course of business which secure payment of obligations not more
than sixty (60) days past due or which are being contested in good
faith by appropriate proceedings diligently pursued, and for which
appropriate reserves shall have been established by Project
Entity.
m. The Contributors and Project Entity have not received any written or
other actual notice of any violation of any applicable zoning
regulation or ordinance, or of any employment or other regulatory law,
order, regulation or requirement relating to Project Entity's
operations, practices, properties or assets that remain uncured as of
the date hereof, and, to the Contributors' Knowledge, there are no such
violations that, individually or in the aggregate, will have a material
adverse effect on any of the Development Properties.
n. Project Entity has no liabilities of any nature, whether matured or
unmatured, fixed or contingent, regardless of whether the disclosure
thereof would otherwise be required by GAAP, which would have,
individually or in the aggregate, a material adverse effect upon
Project Entity or any of the Development Properties except for
(1)Leases identified on the Rent Roll, (2) the commission obligations
defined on Exhibit P hereto, (3) Existing Loan Documents, (4) the
---------
Permitted Exceptions and (5) the Service Contracts (collectively, the
"Significant Agreements"), or as shown on the audits of the books and
records described in Section 8.2 of the Contribution Agreement for
Completed Properties.
o. With respect to the Existing Loans, the Contributors represent and
warrant as follows:
i. The loan documents identified on Exhibit C hereto constitute all
---------
of the documents that evidence or secure the Existing Loans; and
such documents have not been amended or modified except as
expressly identified on said Exhibit C. The Contributors have
---------
delivered to Weeks true, correct and complete copies of all of the
Existing Loan Documents.
ii. All payments due and payable on or before the date of this
Agreement under the Existing Loan Documents by Project Entity have
been paid, and no monetary default exists as of the date of this
Agreement.
-23-
iii. As of the date of this Agreement, no written notice of a default
is outstanding and, to the Contributors' Knowledge, no condition
exists which with the giving of notice or the passage of time or
both would constitute an event of default under the Existing Loan
Documents.
p. Each of the Significant Agreements referred to in subparagraph n above
is (to the Contributors' Knowledge, with respect to parties thereto
other than Project Entity) valid and binding and in full force and
effect, enforceable against the parties thereto in accordance with its
terms (except as enforcement may be limited by bankruptcy, insolvency
or other laws affecting enforcement of creditors' rights generally and
general equitable principles).
q. Other than as set forth in Exhibit K hereto, there are no claims,
actions, suits, proceedings or investigations pending, or, to the
Contributors' knowledge, threatened, before any court, governmental
unit or arbitrator with respect to any Project Entity or any
Development Property, and, to the Contributors' knowledge, the likely
outcome of the claims or other matters set out in said Exhibit K, will
not have a material adverse effect on the Contributors or any of the
Development Properties.
r. Each Project Entity is classified as a partnership for federal income
tax purposes and not as an association taxable as a corporation.
s. The Rent Roll attached hereto as Exhibit H for the Development
---------
Properties is true, correct and complete with respect to the categories
described therein, except to the extent any inaccuracies would not,
individually or in the aggregate, have a material adverse effect on the
value of any of the Development Properties.
t. The Rent Roll lists each of the Leases in effect as of the date of the
Rent Rolls with respect to the Development Properties. In the case of
any sublease or assignment of any such Lease, the Tenant listed in such
Rent Roll remains liable for the performance of said Lease.
u. Except as disclosed in the engineering reports listed in Exhibit L,
---------
attached hereto and by this reference made a part hereof, the
Improvements are in good condition and repair and have not suffered any
material casualty or, to the Contributors' Knowledge, other material
damage that has not been repaired in all material respects. To the
Contributors' Knowledge, there is no material latent or patent
structural, mechanical or other significant defect or deficiency in the
Improvements, other than as disclosed in said engineering reports.
v. No proceedings have been commenced, or, to the Contributors' Knowledge,
threatened, by any authority having the power of eminent domain to
-24-
condemn any part of any of the Development Properties or any
Improvements thereon that, if successful, would have a material adverse
effect on any of the Development Properties.
w. To the Contributors' Knowledge, none of the Tenants now occupying the
Development Properties or having a Lease of space in the Development
Property is the subject of any bankruptcy, reorganization, insolvency
or similar proceedings.
x. Exhibit M, attached hereto and by this reference made a part hereof,
---------
sets forth an accurate and complete list of the insurance policies
relating to the Development Properties or any part thereof obtained by
and naming the Project Entities (other than policies obtained or
maintained by tenants); all such policies are in full force and effect
and all premiums thereunder have been paid to the extent due; and no
notice of cancellation has been received with respect thereto and, to
the Contributors' Knowledge, none is threatened.
y. No representation or warranty by the Contributors herein contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein, in light of
the circumstances under which they were made, not misleading.
z. None of Project Entity, its general partners or limited partners, as
applicable, owns, directly or indirectly, (i) one percent (1%) or more
of the total combined voting power of all classes of stock entitled to
vote, or one percent (1%) or more of the total number of shares of all
classes of stock, of any corporation that is a Tenant or (ii) an
interest of one percent (1%) or more in the assets or net profits of
any Tenant.
aa. Project Entity has not received written notice that any Tenant intends
either to cease such operations (other than temporarily due to
casualty, remodeling, renovation or any similar cause) or to cease
operating under the name under which it was operating as of the date
hereof.
bb. To the Contributors' Knowledge, no condition exists which, with the
giving of notice or the passage of time, or both, would permit any
party to cancel its obligations under any reciprocal easement agreement
or lease.
cc. Except for routine repairs and maintenance, all alterations,
improvements or other work required to have been completed by Project
Entity under any reciprocal easement agreements and Leases, including,
without limitation, all alterations, improvements and other work
required to prepare space for the initial occupancy of each tenant
under a Lease, has heretofore been completed and paid for in full,
except to the extent reflected in Exhibit N, attached hereto and by
---------
this reference made a part hereof.
-25-
dd. Each of the Development Properties is an independent unit which does
not now rely on any facilities (other than facilities covered by
Permitted Exceptions including, without limitations, any reciprocal
easement agreements or facilities of municipalities or public utility
and water companies and other than parking areas which the Development
Properties make use of under any reciprocal easement agreements)
located on any property not included in the Real Property that is part
of that Development Property to fulfill any municipal or governmental
requirement or for the furnishings to the Development Properties of any
essential building systems or utilities.
ee. Project Entity has not received any written notice which is still in
effect that there is, and, to the Contributors' Knowledge, there does
not exist, any violation of a condition or agreement contained in any
easement, restrictive covenant or any similar instrument or agreement
affecting the Development Properties or any portion thereof, if such
violation would have a material adverse effect on any of the
Development Properties.
ff. Project Entity is not in violation of any radius restrictions,
exclusive or similar provisions contained in any reciprocal easement
agreements, Leases or any other agreements to which Project Entity is a
party or is bound, if such violation would have a material adverse
effect on Project Entity or any of the Development Properties.
gg. Project Entity is solvent, has not made a general assignment for the
benefit of its creditors, and has not admitted in writing its inability
to pay its debts as they become due, nor has Project Entity filed, nor
does it contemplate the filing of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other
proceeding for the relief of debtors in general, nor has any such
proceeding been instituted by or against Project Entity, nor is any
such proceeding to the Contributors' Knowledge threatened or
contemplated.
hh. Attached hereto as Exhibit O is a schedule of the Service Contracts
---------
now in effect to which Project Entity and/or the Development Properties
are subject. No notice of default has been received by Project Entity
from any of the parties to the Service Contracts and, to the
Contributors' Knowledge, no event has occurred which, with notice or
lapse of time, or both, will constitute any such default. There are no
Service Contracts affecting any of the Development Properties other
than as listed on said Exhibit O, and the Service Contracts are in full
---------
force and effect.
ii. All leasing commissions payable in connection with the Leases now in
occupancy have been paid-in-full, including leasing commissions payable
with respect to extensions, expansions and renewals which have not been
exercised as of the date hereof or payable in the event a Tenant does
-26-
not exercise a cancellation right under its Lease, except for
commission obligations identified on Exhibit P, attached hereto and by
---------
this reference made a part hereof.
jj. The Contributors do not lease space at the Development Properties, and
no tenant at the Development Properties is "related" to the
Contributors or the Project Entities within the meaning of Section
267(b) or Section 707(b) of the Internal Revenue Code of 1986, as
amended.
kk. No interest in the Development Properties is or is deemed to be,
directly or indirectly, an asset of a "Plan" (as defined in the next
sentence). "Plan" means an "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended, or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended.
ll. Each Project Entity is classified as a partnership for federal income
tax purposes and not as an association taxable as a corporation.
mm. With regard to construction of tenant improvements under the Lease to
Raleigh/Durham MSA in the Regency-Sprint Development Property, the
Lease to Time-Warner in the Woodlake III Development Property and the
Lease to Apria Healthcare in the Enterprise III Development Property,
to the knowledge of the Contributors, no tenant has claimed a default
as a result of construction delay or otherwise.
nn. The representations and warranties of the Contributors contained in
this Paragraph 14, as updated and reaffirmed at each Contribution Date,
shall continue in effect as provided in the Partnership Amendment.
15. REPRESENTATIONS AND WARRANTIES OF WEEKS. Weeks represents and
---------------------------------------
warrants to the Contributors, as follows:
a. Weeks is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Georgia. By the first
Contribution Date, Weeks will be qualified to transact business in the
State of North Carolina. Weeks has full power and authority to execute
and deliver this Agreement and all other documents executed and
delivered, or to be executed and delivered, by it (contemporaneously
herewith or at Contribution) in connection with the transactions
described herein and to perform all of its obligations arising under
this Agreement and such other documents; the officers executing this
Agreement and such other documents on behalf of Weeks have the
authority to bind Weeks hereunder and thereunder.
b. Neither the execution and delivery of this Agreement nor any other
documents executed and delivered, or to be executed and delivered by
-27-
Weeks (contemporaneously herewith or at Contribution) in connection
with the transactions described herein will violate any provision of
Weeks' limited partnership agreement, articles of incorporation or by-
laws of Weeks' General Partner or of any agreements, regulations, or
laws to which Weeks is bound, except for waivers and consents that have
been obtained prior to the date hereof.
c. To Weeks' knowledge, there is no action, suit, proceeding, or claim
affecting Weeks pending or being prosecuted in any court or by or
before any federal, state, county, or municipal department, commission,
board, bureau, agency, or other governmental instrumentality which
would prevent consummation by Weeks of the Contribution of the
Development Properties or materially and adversely affect the
performance of any of Weeks's other obligations hereunder to be
performed prior to, at or after Contribution.
d. Weeks is solvent, has not made a general assignment for the benefit
of its creditors, and has not admitted in writing its inability to pay
its debts as they become due, nor has Weeks filed, nor does it
contemplate the filing of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or any other proceeding for the
relief of debtors in general, nor has any such proceeding been
instituted by or against Weeks, nor is any such proceeding to Weeks'
knowledge threatened or contemplated.
16. CONDITIONS.
----------
a. In addition to any other conditions provided in this Agreement, Weeks'
obligation to accept Contribution of a Development Property pursuant to
this Agreement is subject to the satisfaction of each of the following
conditions at or prior to the Contribution Date for that Development
Property:
i. The Contributors shall have complied with and performed all of
its obligations and covenants set forth in this Agreement.
ii. On or before the Contribution Date, the Contributors shall have
executed and delivered all documents required to be delivered by
the Contributors pursuant to the terms of this Agreement.
Additionally, the Contributors shall have delivered to Weeks
reasonable evidence of its authority to consummate the
transaction herein contemplated, including without limitation,
an opinion of counsel in form and content reasonably acceptable
to Weeks.
iii. All of the representations and warranties made by the
Contributors in Paragraph 14 shall be true correct at and as of
the Contribution Date as though such representations and
warranties were made both at and as of the date hereof and at and
as of the Contribution Date. Provided, further, the
-28-
representations and warranties concerning Rent Roll and Leases,
when reaffirmed at Contribution shall be made with respect to a
Rent Roll made as of Contribution and such Rent Roll shall
disclose no material changes from the Rent Roll attached hereto
as Exhibit H, except those approved by Weeks in writing.
---------
iv. The Contributors shall have obtained and delivered to Weeks by
the date and time of Contribution a Tenant Estoppel Certificate
for all Leases then in effect in the Development Property, each
duly executed by an authorized officer of the Tenant under such
Lease and dated no earlier than sixty (60) days before the
Contribution Date. The Contributors agrees to use the
Contributors' diligent good faith efforts to obtain such Tenant
Estoppel Certificates at or prior to Contribution. Any material
modification to the form of Tenant Estoppel Certificate shall be
approved in writing by Weeks in advance and, in Weeks'
discretion, may be the basis upon which Weeks excludes such
certificate in the determination as to whether this condition has
been satisfied. During the term of this Agreement, as and when
received, the Contributors shall provide to Weeks copies of each
Tenant Estoppel Certificate received from any Tenant promptly
after receipt of such Tenant Estoppel Certificate. Weeks shall
have the right to delay Contribution by up to thirty (30) days by
written notice to the Contributors if the Contributors has not
obtained the required Tenant Estoppel Certificates.
v. No material adverse change shall have occurred to the
Development Properties, except as otherwise provided in 17
and 18.
vi. The Contributors shall have completed construction of the
Improvements as required under this Agreement as evidenced by the
foregoing (A) final, unconditional certificate(s) of occupancy
for the building shell(s) and each leased tenant space shall have
been issued by the appropriate governmental authority; (B) the
building shell(s) and each leased tenant space shall have been
completed substantially in accordance with plans and
specifications approved by Weeks (which approval shall not be
unreasonably withheld or delayed), subject only to customary
punch list items approved by Weeks and appropriate reserves
established with Weeks to Weeks' reasonable satisfaction for such
items; and(C) all contractors shall have been paid-in-full
(subject to retainage for punchlist items) and released any lien
rights in the Development Property and appropriate evidence of
such shall have been furnished to Weeks including, without
limitation, a final general contractor's affidavit and lien
waiver, if applicable.
vii. A title insurance company approved by Weeks shall be prepared to
issue to Weeks title insurance coverage on ALTA Form Policy
-29-
issued by a title insurance company approved by Weeks, in an
amount not in excess of the Adjusted Contribution Value, and
specifying as exceptions to coverage only the Permitted
Exceptions.
viii. The contingencies set forth in this Paragraph 16(a) are for the
sole benefit of Weeks, and Weeks may elect in writing to waive
any such contingency reserved for its benefit and proceed to
consummate the transaction contemplated hereby.
b. In addition to any other conditions provided in this Agreement, the
Contributors' obligation to contribute a Development Property is
subject to the satisfaction of each of the following conditions at or
prior to the Contribution Date for that Development Property:
i. Weeks shall have complied with and performed all of its
obligations and covenants set forth in this Agreement.
ii. On or before the Contribution Date, Weeks shall have executed
and delivered all documents required to be delivered by Weeks
pursuant to the terms of this Agreement, and shall have issued
Units and made cash payments to Contributors as required under
Paragraph 7 hereof. Additionally, Weeks shall have delivered to
the Contributors reasonable evidence of its authority to
consummate the transaction herein contemplated, including without
limitation, an opinion of counsel in form and content reasonably
acceptable to the Contributors.
iii. All of the representations and warranties made by Weeks in
Paragraph 15 shall be true and correct at and as of the
Contribution Date as though such representations and warranties
were made both at and as of the date hereof and at and as of the
Contribution Date.
iv. The contingencies set forth in this Paragraph 16(b) are for the
sole benefit of the Contributors, and the Contributors may elect
in writing to waive any such contingency reserved for its benefit
and proceed to consummate the transaction contemplated hereby.
17. FIRE AND CASUALTY. Prior to the Contribution of a Development
-----------------
Property, the risk of loss shall remain with the Contributors and the
Contributors shall bear all ownership risks and obligations, including
construction risks and the risk of cost overruns. The Contributors
shall maintain in effect until the Contribution Date all insurance
policies currently in force with respect to the Development Property to
be contributed including liability insurance and fire and extended
coverage insurance. If at any time prior to the Contribution Date any
-30-
portion of the Development Properties is destroyed or damaged as a
result of fire or any other casualty (a "Casualty"), the Contributors
shall promptly give written notice (a "Casualty Notice") thereof to
Weeks. If a Development Property is the subject of a Casualty, Weeks
shall have the right, at its sole option, of terminating this Agreement
(by written notice to the Contributors given within thirty (30) days
after receipt of the Casualty Notice from the Contributors) as to that
Development Property, unless
(a) (i) all such damage or destruction is repaired at the sole
cost and expense of the Contributors prior to Contribution to
substantially the condition existing immediately prior to such damage
or destruction, or (ii) the cost to fully repair or restore such damage
is less than Two Hundred Fifty Thousand Dollars ($250,000) and either
(x) insurance proceeds sufficient to restore fully such damage are
available and the insurance company issuing the Contributors' insurance
policies has confirmed in writing prior to the expiration of such
thirty (30) day period that such Casualty is covered by such policies
and that no defense to payment of the claim on account thereof exists,
or (y) the Contributors give Weeks a credit at Contribution (the
"Credit") in an amount equal to the deficiency in any insurance
proceeds described in clause (x); and
(b) such Casualty (i) does not result in Tenants occupying more
than twenty-five (25%) of the space in the Development Property in the
aggregate terminating their Leases or asserting a right to terminate
their Leases.
If a Casualty Notice is given to Weeks less than thirty (30) days prior to
Contribution, at Weeks' option Contribution shall be postponed to a date
not earlier than thirty (30) days after Weeks' receipt of the Casualty
Notice. If Weeks terminates this Agreement pursuant to this Paragraph,
then this Agreement shall terminate and the parties hereto shall have no
further rights or obligations hereunder, with regard to that Development
Property. If Weeks does not terminate this Agreement, the proceeds of any
insurance with respect to the Development Property paid between the date of
this Agreement and the Contribution Date, together with the Credit if
applicable, shall be paid to Weeks at the time of Contribution and all
unpaid claims and rights in connection with property damage to the
Development Properties shall be assigned to Weeks at Contribution without
in any manner affecting the Adjusted Contribution Value.
18. EMINENT DOMAIN. In the event of a taking by condemnation or eminent
--------------
domain proceedings of any material portion of a Development Property
[prior to Contribution, the Contributors shall promptly give written
notice thereof to Weeks and Weeks shall have the right, at its sole
option, of terminating this Agreement as to that Development Property
by written notice given to the Contributors on or before the tenth
(10th) day following receipt of such notice. For purposes hereof, a
"material portion" of any Development Property shall be any portion
upon which an improvement is located, any portion which contains enough
parking spaces, the loss of which would cause a violation of any Lease
on the Development Property or cause a violation of any applicable
zoning ordinance or which permanently alters the access to and from the
Property in a material adverse way. If Weeks so terminates this
Agreement as to that Development Property, then this Agreement shall
terminate as to that Development Property, and the parties hereto shall
have no further rights or obligations hereunder. If Weeks does not
-31-
terminate the Agreement pursuant to this Paragraph as to that
Development Property, then the Contributors shall pay over to Weeks on
the Contribution Date all monies received or collected by the
Contributors by reason of such taking, and the Contributors shall
further assign and transfer to Weeks all of the Contributors' right,
title and interest of, in and to any awards that have been or may be
made for such condemnation or eminent domain proceedings and the
additional money that may be payable when the same is and becomes
assignable as a matter of law.
19. DEFAULT.
-------
a. If Weeks defaults hereunder, the Contributors may either proceed
against Weeks at law for damages or seek specific performance of Weeks'
obligations hereunder.
b. If the Contributors default hereunder, Weeks may either proceed
against the Contributors at law for damages or seek specific
performance of the Contributors' obligations hereunder. After notice as
provided in Paragraph 19(c) below, and lapse of cure period without
cure by the Contributors, Weeks may elect to cure the Contributors'
default hereunder and the Contributors shall promptly, upon demand,
reimburse Weeks for all costs and expenses incurred in cure, including
interest on such costs and expenses, at a rate equal to LIBOR plus one
hundred and thirty five (135) basis points, per annum, from the date
incurred until the date of reimbursement, and upon Contribution of the
Development Property in question, if ever, the Adjusted Contribution
Value for such Development Property shall be reduced by such costs and
expenses of cure and accrued interest thereon.
c. Prior to exercising any of its rights hereunder or at law or in equity
for a default, a party shall give the other party written notice of
such default hereunder and the other party shall have thirty (30) days
to cure such default from and after such notice.
d. After Closing, the liability of the Contributors for a breach of the
representations and warranties by the Contributors in this Agreement
shall be governed by the Partnership Amendment and the pledge of Units
and Shares of therein contained.
20. BROKERAGE FEES. Except for brokers paid-in-full at the Initial
--------------
Contribution pursuant to separate written agreements for the entire
Transaction, the Contributors and Weeks each represent and warrant to
the other that they have not employed, retained, or consulted any
broker, agent, or finder in connection with this Agreement or the
-32-
Contribution, and the Contributors and Weeks each hereby indemnify and
agree to hold the other harmless from and against any and all claims,
demands, causes of action, debts, liabilities, judgments and damages
(including costs and reasonable attorneys' fees incurred in connection
with the enforcement of this indemnity) which may be asserted or
recovered against the indemnified party for or on account of any
brokerage fee, commission, or other compensation arising by reason of
the indemnitor's breach of this representation and warranty.
21. MISCELLANEOUS.
-------------
a. Weeks shall not assign, sell, convey or otherwise transfer any or all
its rights under this Agreement without the prior written consent of
the Contributors. The Contributors shall not assign, sell, convey, or
otherwise transfer any or all of the Development Properties or its
rights under this Agreement without the prior written consent of Weeks.
No such assignment by the Contributors or Weeks shall relieve or
release the assigning party of any liability hereunder. Subject to the
foregoing, this Agreement and the terms and provisions hereof shall
inure to the benefit of and be binding upon the successors and assigns
of the parties.
b. This Agreement and the other Transaction Documents supersedes all prior
agreements between the parties hereto with respect thereto. No claim of
waiver, modification, consent or acquiescence with respect to any of
the provisions of this Agreement shall be made against either party,
except on the basis of a written instrument executed by or on behalf of
such parties.
c. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina.
d. The headings of the several paragraphs and subparagraphs of this
Agreement are inserted solely for the convenience of reference and are
not a part of and are not intended to govern, limit, or aid in the
construction of any term or provision hereof, except otherwise provided
in Paragraph 1 of this Agreement.
e. Words of any gender used in this Agreement shall be held and construed
to include any other gender, and words of a singular number shall be
held to include the plural and vice versa, unless the context requires
otherwise.
f. Any notice, request or other communication (a "notice") required or
------
permitted to be given hereunder shall be in writing and be delivered by
hand or overnight courier (such as UPS Next Day Air) or by facsimile
transmission or mailed by United States registered or certified mail,
return receipt requested, postage prepaid and addressed to each party
at its address as set forth below. Any such notice shall be considered
given on the date of such hand or courier delivery, deposit with such
overnight courier for next business day delivery, or upon transmission
-33-
by facsimile with confirmation, or deposit in the United States mail,
but the time period (if any is provided herein) in which to respond to
such notice shall commence on the date of hand or courier delivery or
the confirmation date of facsimile transmission or on the date received
following deposit in the United States mail as provided above.
Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice was given shall be deemed to be
receipt of the notice. By giving at least five (5) days' prior written
notice thereof, any party may from time to time and at any time change
its mailing address hereunder. Any notice of any party may be given by
such party's counsel. The parties respective notice addresses are as
follows:
Weeks: Weeks Realty, L.P.
0000 Xxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx,
Vice Chairman/Chief
Investment Officer
Fax: (000) 000-0000
With Copy To: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Contributors: Xxxxxx X. Xxxxxxx
Suite 200
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: (000) 000-0000
-34-
With Copy To: Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P.
Two Hannover Square
Suite 1900
000 Xxxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
g. If any provision of this Agreement or the application thereto to any
person or circumstance shall be invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provisions
to the other persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
h. Nothing in this Agreement shall be construed as giving any person,
firm, corporation, or other entity, other than the parties hereto,
their successors and assigns, any rights, remedy or claim under or in
respect to this Agreement or any provision hereof.
i. This Agreement may be executed in any number of counterparts, each of
which so executed shall be deemed an original; such counterparts
together shall constitute the one agreement.
j. Time is of the essence of this Agreement; provided, however, that if
-------- -------
the time within which any action, consent, approval, or other activity
herein contemplated, expires on a Saturday, Sunday, or legal holiday,
such time period shall automatically be deemed extended to the first
day after the scheduled termination of such time period which is not a
Saturday, Sunday, or legal holiday.
k. No failure or delay by a party to exercise any right it may have by
reason of the default of the other party shall operate as a waiver of
default or modification of this Agreement or shall prevent the exercise
of any right by the first party while the other party continues to be
so in default.
l. All representations, warranties and agreements of the Contributors and
Weeks contained in this Agreement shall not be merged into the
Contribution documents and shall survive Contribution subject to the
provisions of the Partnership Amendment.
m. In the event of a breach of this Agreement by either party, the
non-breaching party shall be entitled to recover all costs associated
with enforcing this Agreement, including reasonable attorneys' fees and
expenses actually incurred.
-35-
n. So long as a Development Property and the Regency Forest Land is
subject to this Agreement, the Contributors agree not to offer to any
party other than Weeks, that properties, or any portion thereof or any
interest therein, for sale or lease, except for the leasing of space
pursuant to the terms of this Agreement, and the Contributors agree not
to negotiate, solicit or entertain any offers from or with any party
other than Weeks, to purchase or lease the property, or any portion
thereof or any interest therein, except for the leasing of space as
aforesaid.
o. Contemporaneously with the execution and delivery of this Agreement,
Weeks and the Contributors shall enter into a short form memorandum of
this Agreement, which shall be recorded in the public records of Wake
County, North Carolina, to give notice of Weeks' interest in the
Development Properties pursuant to this Agreement.
p. The Contributors hereby appoint X.X. Xxxxxxx as their authorized
representative under this Agreement. Any direction, consent, approval,
disapproval, authorization or other action required or permitted to be
given or taken under this Agreement by any of the Contributors shall be
given or taken only by X.X. Xxxxxxx. In giving notice to the
Contributors under this Agreement, Weeks may give such notice only to
X.X. Xxxxxxx as provided under Paragraph 21f of this Agreement and such
notice shall constitute notice to all of the Contributors. If Weeks
receives notice of any matter from any Contributor who is not X.X.
Xxxxxxx, Weeks shall be entitled at its discretion to disregard such
notice and such notice shall have no legal effect under this Agreement,
unless and until confirmed by X.X. Xxxxxxx. The written statements and
representations of X.X. Xxxxxxx shall for the purposes of this
Agreement be binding upon the Contributors and Weeks shall have no
obligation or duty whatsoever to inquire into the authority to take any
action which he proposes to take, regardless of whether X.X. Xxxxxxx
actually has the authority to take any such action; and Weeks shall be
entitled to rely upon any direction, authorization, consent, approval
or disapproval given by X.X. Xxxxxxx in connection with any matter
arising out of or in connection with this Agreement.
q. For any Development Property Contributed after July 1, 1997, but prior
to achievement of Stabilization, as permitted pursuant to Paragraph 4b
of this Agreement, the Adjusted Contribution Value (using for the
purpose of the recomputation the outstanding principal balance of any
applicable Existing Loan on the Contribution Date) shall be recomputed
as of the earlier of (i) the date the Development Property first
achieves Stabilization, or (ii) June 30, 1998, and, if this newly
recomputed Adjusted Contribution Value exceeds the Adjusted
Contribution Value determined on the Contribution Date for this
Development Property, Weeks shall issue to the Contributors in respect
of such previously Contributed Development Property an additional
number of Units equal to the quotient of (y) such excess divided by (z)
the Unit Price [determined as of the date of recomputation under this
-36-
subparagraph]. Any Units issued pursuant to this subparagraph shall be
subject to the provisions of Paragraph 7b and 7c of this Agreement.
r. With regard to the Regency Forest Land, the Contributors and Weeks
agree as follows:
i. As of the date of this Agreement, the Regency Forest Land and
the Land for the Regency-Sprint Development Property are a single
unsubdivided tract of land. As soon as is reasonably practicable
and as soon as is permitted by the City of Cary, North Carolina,
the Contributors, at their sole cost and expense, agree to have
the Regency Forest Land and the land for the Regency-Sprint
Development Property subdivided pursuant to a subdivision map or
plat approved by the City of Cary and approved by Weeks in its
reasonable discretion. In any event, the Contributors agree to
have this subdivision completed not later than the earlier of the
date of the issuance of a Certificate of Occupancy for the
building shell of the building currently under construction for
the Regency-Sprint Development Property or the Contribution Date
for the Regency-Sprint Development Property provided for in this
Agreement.
ii. Within ten (10) business days after approval of the subdivision
map, as described in the immediately preceding clause, the
Contributors agree to cause the Project Entity to convey good and
marketable fee simple title to the Regency Forest Land to Weeks by
general warranty deed, subject only to permitted title exceptions
approved by Weeks. Additionally, any loan encumbering the Regency
Forest Land shall be paid in full by the Contributors and canceled
immediately prior to conveyance of the Regency Forest Land to
Weeks.
iii. In consideration for such conveyance, Weeks shall issue Units to
the Contributors (pro rata in accordance with their respective
membership interests in the Project Entity which owns the Regency
Forest Land) a number of Units equal to One Million Dollars
($1,000,000) divided by the Unit Price (for this purpose the Unit
Price shall be deemed to be Twenty-Five Dollars and Twenty-Five
Cents ($25.25)). All Units so issued shall be held by the
Contributors subject to the applicable rights agreements.
iv. As of the date of this Agreement, the Contributors hereby make,
jointly and severally, for the benefit of Weeks, each and every
representation and warranty set forth in Paragraph 14 of this
Agreement as to the Regency Forest Land, to the extent applicable
to unimproved land. At the date the Regency Forest Land is
conveyed to Weeks, the Contributors shall remake, for the benefit
the of Weeks, each and every representation and warranty set forth
-37-
in Paragraph 14 as to the Regency Forest Land, to the extent
applicable to unimproved land. Weeks acknowledges and agrees that
the liability of the Contributors for breach of these
representations, and warranties are subject in all respects to the
limitations on liability set forth in the Partnership Amendment
and the pledge of Units and shares therein contained.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above stated.
CONTRIBUTORS:
------------
(SEAL)
----------------------------------
XXXXXX X. XXXXXXX
(SEAL)
----------------------------------
XXXXX XXXXXXXXXX XXXXXXXXX
(SEAL)
----------------------------------
XXXX XXXXXXX
PERIMETER PARK WEST ASSOCIATES
LIMITED PARTNERSHIP,
a North Carolina limited partnership
By: (SEAL)
-------------------------------
Xxxxxx X. Xxxxxxx,
General Partner
By: (SEAL)
-------------------------------
Xxxxx Xxxxxxxxxx Xxxxxxxxx,
General Partner
-38-
WEEKS:
-----
WEEKS REALTY, L.P., a Georgia limited
partnership authorized to do business
in the State of North Carolina as
Weeks Realty Limited Partnership
By: Weeks GP Holdings, Inc., a Georgia
corporation, sole general partner
By:
-------------------------------------
Title:
----------------------------------
-39-
