EXHIBIT 2.2
EXCHANGE OPTION AGREEMENT
BY AND AMONG
XXXXXX-XXXXX PROPERTIES LIMITED PARTNERSHIP,
XXXXXX-XXXXX PROPERTIES, INC.,
AND THE OWNERS OF
THE CHRYSSON AFFILIATES LISTED HEREIN
DATED AS OF SEPTEMBER 22, 1997
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF ANY
DOCUMENT USED IN CONNECTION WITH THE OFFERING AND ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO THE REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.
TABLE OF CONTENTS
Page
1. Contribution of Interests....................................................2
2. Payment of the Consideration.................................................2
A. Units Issued........................................................2
B. The Lock-Up.........................................................2
3. The Closing..................................................................2
A. Conditions to Closing - Generally...................................2
B. Closing; Condition to Obligations...................................3
C. Default.............................................................4
D. Documents to be Delivered at Closing................................4
E. Documents Required to be Delivered by Xxxxxx-Xxxxx and the
REIT at Closing..................................................5
4. Conditions Precedent to Closing..............................................5
5. Representations and Warranties of Owners.....................................6
A. Existence and Power.................................................6
B. Authorization: No Contravention.....................................6
C. Pending Actions.....................................................6
D. Investment Representations and Warranties...........................7
E. NASD Affiliation....................................................8
F. Foreign Person......................................................9
6. Representations and Warranties of Xxxxxx-Xxxxx and the REIT..................9
7. Indemnification.............................................................10
8. Other Provisions............................................................10
A. Counterparts.......................................................10
B. Entire Agreement...................................................10
C. Construction.......................................................10
D. Applicable Law.....................................................10
E. Severability.......................................................10
F. Waiver of Covenants, Conditions and Remedies.......................11
G. Schedules..........................................................11
H. Amendment and Assignment...........................................11
I. Relationship of Parties............................................11
J. Further Acts.......................................................11
K. Notice.............................................................11
L. Consent to Transfer of Interests...................................12
SCHEDULES.....................................................................................15
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EXCHANGE OPTION AGREEMENT
THIS EXCHANGE OPTION AGREEMENT (the "Agreement") made and entered into
this the 22nd day of September, 1997, by and among each of the persons whose
names are set forth on SCHEDULE A hereof (each being hereinafter called an
"Owner" and collectively the "Owners"), XXXXXX-XXXXX PROPERTIES LIMITED
PARTNERSHIP, a North Carolina limited partnership ("Xxxxxx-Xxxxx") and its
general partner, Xxxxxx-Xxxxx Properties, Inc., a Maryland corporation (the
"REIT").
W I T N E S S E T H:
WHEREAS, Xxxxxx-Xxxxx is a North Carolina limited partnership having
the REIT as its sole general partner and the REIT has elected to be qualified as
a real estate investment trust under the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder (the
"Code"); and
WHEREAS, each Owner owns an interest in one or more of the
partnerships, the limited liability companies and/or the properties listed on
SCHEDULE B attached hereto and as described more fully in a Supplemental
Acquisition Schedule for each Owner dated the date hereof, attached hereto as
SCHEDULE C and incorporated herein by reference (such schedule is herein
referred to as such Owner's "Supplemental Acquisition Schedule"); and
WHEREAS, Xxxxxx-Xxxxx desires to acquire from each Owner, and each
Owner desires to transfer to Xxxxxx-Xxxxx, on the terms and conditions set forth
herein, all interests owned by such Owner and set forth in such Owner's
Supplemental Acquisition Schedule and any other direct or indirect equity
interests such Owner may have, whether now owned or hereinafter acquired, in the
partnerships and/or limited liability companies (collectively the "Acquired
Partnerships" or "Partnerships") or the properties (the "Properties") listed on
SCHEDULE B attached hereto, and each such direct or indirect equity interest of
an Owner in such Acquired Partnerships or Properties, including without
limitation the Owner's interests set forth in such Owner's Supplemental
Acquisition Schedule, is referred to individually as an "Interest" and,
collectively, as such Owner's "Interests"; and
WHEREAS, the Owners have agreed to contribute their Interests to
Xxxxxx-Xxxxx in exchange for limited partnership interests in Xxxxxx-Xxxxx (the
"Partnership Units" or "Units") and Xxxxxx-Xxxxx has agreed to acquire the
Interests and to issue to each Owner Partnership Units in Xxxxxx-Xxxxx in
exchange for the contribution of each Owner's Interest; and
WHEREAS, the REIT and the Owners also desire that, contemporaneously
with the admission of the Owners as limited partners of Xxxxxx-Xxxxx, the REIT
and each Owner enter into a registration rights agreement substantially in the
same form and substance as the Registration Rights Agreement attached hereto as
SCHEDULE D (the "Registration Rights Agreement");
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and conditions herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
parties do hereby agree as follows:
1. Contribution of Interests. Subject to the terms and provisions
hereof and of the Master Agreement (as defined below), each Owner does hereby
agree to contribute to Xxxxxx-Xxxxx its Interests and Xxxxxx-Xxxxx does hereby
agree to accept such Interests and issue to each Owner, in exchange for such
contribution, the Partnership Units as provided in Paragraph 2 and on SCHEDULE C
hereof. All such contributions and issuances at a Closing shall otherwise be in
accordance with this Agreement.
2. Payment of the Consideration.
A. Units Issued. The consideration for each Owner's Interests
shall be the number of Units as set forth in such Owner's Supplemental
Acquisition Schedule. The number of such Units is subject to adjustment
at Closing due to principal payments on any mortgage loan, prorations
and post-closing adjustments as provided in the Master Agreement (as
defined below).
For the first fiscal quarter of Xxxxxx-Xxxxx ending after the
date of Closing, partnership distributions attributable to such quarter
payable by Xxxxxx-Xxxxx to Owner pursuant to Section _____ of the
Partnership Agreement (as defined at Paragraph 3.E(i) below) shall be
prorated to take into account the period of time during such quarter
that the Owner or its successors in interest to the Units is a limited
partner in Xxxxxx-Xxxxx. The Owner shall receive, contemporaneously
with receipt by the other limited partners in Xxxxxx- Xxxxx of their
respective distributions for such quarter, that portion of a full
quarterly distribution otherwise attributable to its Units determined
by multiplying the amount of such full distribution by a fraction the
numerator of which is the number of days during such quarter that the
Owner is a limited partner in Xxxxxx-Xxxxx and the denominator of which
is the number of days in such quarter. In the event that the Owner
receives a full cash distribution for such period, it shall reimburse
Xxxxxx-Xxxxx the prorated portion of such distribution within five (5)
days of receipt.
B. The Lock-Up. The Owners hereby agree that without the prior
written consent of the REIT, they will not, directly or indirectly,
sell, offer or contract to sell, grant any option for the sale of, seek
redemption of or otherwise dispose of or transfer (collectively,
"dispose of"), any Partnership Units received hereby except as set
forth at SCHEDULE G hereof.
3. The Closing.
A. Conditions to Closing - Generally. The Closing is
conditioned upon satisfaction of the terms and conditions for closing
of the Master Agreement of Merger and Acquisition Agreement dated as of
September __, 1997 by and among Xxxxxx-Xxxxx, the REIT and the Owners
(the "Master Agreement").
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B. Closing; Condition to Obligations. Subject to the
foregoing, Xxxxxx-Xxxxx and the Owners (by a majority vote thereof)
will specify a closing date, which date shall be no later than December
31, 1997 (or, if applicable, the Closing Extension Date, as defined in
the Master Agreement), for the initial closing (the "Initial Closing")
of the exchange contemplated hereby which Initial Closing shall take
place at the offices of Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P., Raleigh,
North Carolina. At or before Closing, which shall be held at a place
and time determined by Xxxxxx-Xxxxx and the Owners (by a majority vote
thereof), Xxxxxx-Xxxxx and Owner will execute all closing documents
(the "Closing Documents") required by Xxxxxx-Xxxxx in accordance with
Paragraph 3.D. and deposit the same in escrow with an escrow agent to
be agreed upon by Xxxxxx-Xxxxx and Owner (the "Closing Agent").
If the Closing occurs:
(i) With respect to each Partnership or Property (or
portion thereof) acquired, Xxxxxx-Xxxxx shall cause to be
delivered to the Closing Agent for the benefit of each Owner
the number of Units (each Unit having a value of $13.00 for
purposes of determining the number of Units to be delivered in
exchange for the Interests) set forth on each Owner's
Supplemental Acquisition Schedule, as adjusted;
(ii) Upon receipt of the consideration set forth in
clause (i) above, the Closing Agent will release the Closing
Documents to Xxxxxx-Xxxxx; and
(iii) The transactions described or otherwise
contemplated herein or in the Closing Documents will thereupon
be deemed to have been consummated (such consummation being
hereafter referred to as the "Final Closing").
Notwithstanding the above, Xxxxxx-Xxxxx may, in its sole discretion,
elect not to complete the acquisition of Interests of any Owner with an
identified breach of (and failure to cure within any relevant grace or
cure period) or other exception with respect to Paragraph 5 hereof or
that has otherwise breached (and failed to cure) this Agreement (any
such Owner being hereafter referred to as a "Non-Complying Owner"), in
which case Xxxxxx-Xxxxx shall, in lieu of the delivery with respect to
such Owner pursuant to clause (i) above, notify the Closing Agent of
such election and direct the Closing Agent to return such Owner's
Closing Documents and any other agreements or instruments executed in
connection with the transactions contemplated thereby (the "Ancillary
Agreements") to such Owner. The election of Xxxxxx-Xxxxx not to acquire
the Interests of a particular Non-Complying Owner shall not affect the
obligations of any other Owner hereunder, including any other
NonComplying Owner. If because of such an election, Xxxxxx-Xxxxx would
not acquire all of the Interests in any one Partnership or Property,
then Xxxxxx-Xxxxx may elect not to purchase any of the Interests in
such Partnership or Property and none of the Owners in such Partnership
or Property shall contribute its respective Interest in such
Partnership or Property to Xxxxxx- Xxxxx.
If the Closing of a Partnership or Property does not occur as a result
of a Non-Complying Owner within the time provided by Paragraph 3.B.,
then no Owner of such Partnership or
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Property, except as to the Surviving Indemnities (as defined below) and
the remedies for default provided below as to the Non-Complying Owner,
shall have any obligations under the Closing Documents or any Ancillary
Agreements with respect to such Partnership or Property. Such Closing
Documents and Ancillary Agreements shall be deemed, except as to the
Surviving Indemnities, null and void AB INITIO and the Closing Agent
will be directed to destroy such Closing Documents and Ancillary
Agreements it holds and return to Xxxxxx- Xxxxx the consideration
delivered by Xxxxxx-Xxxxx to the Closing Agent with respect to such
Partnership or Property in accordance with the previous paragraph.
C. Default. If any party hereto defaults with respect to its
obligations under this Agreement, the other party shall be entitled to
exercise any and all remedies provided at law or in equity, including
but to limited to, the right to specific performance. Except as
otherwise provided herein, no default by any Owner hereunder shall in
any way limit or affect the obligations of any other Owner hereunder.
In the event Xxxxxx-Xxxxx defaults under its obligation to an Owner of
an Interest in a Partnership or Property such that Xxxxxx- Xxxxx does
not acquire such Interest, then no other Owner of such Partnership or
Property shall be required to transfer its Interest in such Partnership
or Property to Xxxxxx-Xxxxx as otherwise required hereby.
D. Documents to be Delivered at Closing. At or prior to the
Closing, each Owner which is a party hereto shall execute, acknowledge
where deemed desirable or necessary by Xxxxxx-Xxxxx, and deliver to the
Closing Agent, in addition to any other documents mentioned elsewhere
herein, the following:
(i) Three duly executed Assignments of Interest (the
"Assignment"), which assignments shall be in a form as
attached at SCHEDULE E and shall contain a warranty of title
that such Owner owns such Owner's Interests free and clear of
all encumbrances.
(ii) Any other documents reasonably necessary to
assign, transfer and convey such Owner's Interests and
effectuate the transactions contemplated hereby, including
quit claim or limited warranty deeds for any Properties;
(iii) If requested by Xxxxxx-Xxxxx, a certified copy
of all appropriate corporate, limited liability company or
partnership actions authorizing the execution, delivery and
performance by Owner of this Agreement, the Closing Documents
and the Ancillary Documents.
(iv) The Registration Rights Agreement duly executed
by the Owner.
(v) If requested by Xxxxxx-Xxxxx in the case of any
Owner which is a corporation, partnership, trust or other
entity, an opinion from counsel for such Owner in form and
content reasonably acceptable to Xxxxxx-Xxxxx substantially to
the effect that such Owner is duly organized, validly existing
and in good standing under the laws of the state of its
organization, had and has all applicable corporate
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or partnership power and authority to enter into, deliver and
perform this Agreement, the Closing Documents and the
Ancillary Documents, the execution, delivery and performance
of which Agreement, Closing Documents and Ancillary Documents,
and the transactions contemplated hereby and thereby, do not
and will not constitute a breach or a violation of Owner's
partnership agreement, operating agreement, declaration of
trusts, charter or bylaws, if applicable; and that all
applicable action necessary for such Owner to execute and
deliver this Agreement, the Closing Documents and the
Ancillary Documents has been taken and that the same have been
validly executed and delivered and are the valid and binding
obligations of such Owner enforceable against it, subject to
creditors rights and other normal and customary exceptions, in
accordance with their terms.
E. Documents Required to be Delivered by Xxxxxx-Xxxxx and the
REIT at Closing. Xxxxxx-Xxxxx and the REIT shall deliver to the Owners
at the Closing, the following:
(i) A copy of the Agreement of Limited Partnership of
Xxxxxx-Xxxxx dated as of _____________, 1997, as amended, (the
"Partnership Agreement"), duly certified by the REIT as true,
complete and correct.
(ii) The amendment to the Partnership Agreement (the
"Amendment"), duly executed by the REIT and all other
necessary parties, to evidence admission of the Owners to
Xxxxxx-Xxxxx as limited partners.
(iii) A settlement statement with respect to the
Closing, duly executed by Xxxxxx-Xxxxx.
(iv) The Registration Rights Agreement duly executed
by the REIT.
(v) Such other documents and instruments as may be
reasonably necessary to consummate the transactions with the
Owners under this Agreement.
(vi) A statement from the REIT as to the approximate
amount of its indebtedness and the amount of the
indemnifications from Xxxxxx-Xxxxx'x other partners, if any,
to the REIT as of the date of Closing.
4. Conditions Precedent to Closing.
A. The obligations of Xxxxxx-Xxxxx to acquire the Interests
from the Owners shall be subject to the following conditions precedent,
any of which may be waived by Xxxxxx-Xxxxx in writing at the Closing:
(i) All of the representations and warranties of the
Owners made herein and in the Master Agreement shall be true
and correct in all material respects as of the Closing.
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(ii) The Partnership Properties and, if applicable,
the Properties must be in the same condition as of the date of
this Agreement, normal wear and tear excepted.
B. As conditions precedent to an Owner's obligations to
perform hereunder, the following must either have occurred or been
waived by the Owner in writing:
(i) Xxxxxx-Xxxxx and the REIT must have delivered and
executed all documents and instruments required to be executed
and delivered by them and performed all obligations required
to be performed by them, including, without limitation,
delivery of the Partnership Units, all as required by the
Closing Documents and Ancillary Agreements.
(ii) All of the representations and warranties of the
REIT and Xxxxxx- Xxxxx made herein and in the Master Agreement
shall be true and correct in all material respects as of the
Closing.
5. Representations and Warranties of Owners. Each Owner as to his or
its Interests represents and warrants to Xxxxxx-Xxxxx severally as follows:
A. Existence and Power. Owner or, if Owner is a partnership or
a limited liability company, any of Owner's partners or members which
are not individuals have been duly formed and are validly existing.
Each Owner which is not an individual has all necessary power and
authority to enter into this Agreement and to enter into and deliver
the documents required to be executed by it pursuant to the terms
hereof and to perform its obligations hereunder and thereunder.
B. Authorization: No Contravention. Each Owner represents that
the execution and delivery of this Agreement and the documents required
to be executed by such Owner, and the performance of such Owner's
obligations under this Agreement and the documents required to be
executed by each such Owner, will have been duly authorized by all
requisite action, and this Agreement will have been duly executed and
delivered by such Owner. This Agreement and the documents executed by
each such Owner will constitute the valid and binding obligation of
such Owner, subject, however, to bankruptcy and similar laws affecting
the rights and remedies of creditors generally. Execution of this
Agreement and performance of its terms will not violate any term of any
agreement, order or decree to which such Owner is a party or by which
such Owner is bound.
C. Pending Actions. To each Owner's actual knowledge, there is
no existing or threatened legal action or governmental proceedings of
any kind involving such Owner, which, if determined adversely to such
Owner, would interfere with such Owner's ability to execute or deliver,
or perform its obligations under this Agreement or the documents
required to be executed by such Owner.
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D. Investment Representations and Warranties.
(i) Such Owner will be acquiring the Units to be
received by him for his own account and not with the view to
the sale or distribution of the same or any part thereof in
violation of the Securities Act of 1933, as amended (the
"Act");
(ii) Such Owner understands that the Units (or shares
of common stock of the REIT (the "Common Stock") issued upon
exchange of the Units) to be issued to the Owner will not be
registered under the Act, or the securities laws of any state
("Blue Sky Laws") by reason of a specific exemption or
exemptions from registration under the Act and applicable Blue
Sky Laws and that the REIT's and that Xxxxxx- Xxxxx'x reliance
on such exemptions is predicated in part on the accuracy and
completeness of the representations and warranties of Owner;
(iii) Subject to the rights and obligations of the
Registration Rights Agreement, such Owner understands that,
for the reasons set forth in subparagraph (ii) above, the
Units (or shares of common stock issued upon exchange of the
Units) may not be offered, sold, transferred, pledged, or
otherwise disposed of by Owner except (i) pursuant to an
effective registration statement under the Act and any
applicable Blue Sky Laws, (ii) pursuant to a no-action letter
issued by the Securities and Exchange Commission (the "SEC")
to the effect that a proposed transfer of the Units (or shares
of Common Stock issued upon exchange of the Units) may be made
without registration under the Act, together with either
registration or an exemption under applicable Blue Sky Laws,
or (iii) upon Xxxxxx-Xxxxx or the REIT, as the case may be,
receiving an opinion of counsel knowledgeable in securities
law matters and reasonably acceptable to Xxxxxx-Xxxxx or the
REIT, as the case may be, to the effect that the proposed
transfer is exempt from the registration requirements of the
Act and any applicable Blue Sky Laws, and that, accordingly,
Owner must bear the economic risk of an investment in the
Units (and the shares of Common Stock issued upon exchange of
the Units) for an indefinite period of time;
(iv) Such Owner is an "accredited investor" within
the meaning of Rule 501(a) promulgated under the Act (the
standards for being "Accredited Investor" will vary depending
upon the legal form of the Owner, but Accredited Investor
includes, for individuals, any natural person whose individual
net worth, or joint net worth with that person's spouse, at
the time of the purchase exceeds $1,000,000 or who had an
individual income in excess of $200,000 in each of the two
most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current
year);
(v) Such Owner understands that an investment in
Xxxxxx-Xxxxx and the REIT involves substantial risks; and such
Owner has had the opportunity to review all documents and
information which it has requested concerning its investment
in Xxxxxx-Xxxxx and the REIT and has had the opportunity to
ask questions of the
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management of Xxxxxx-Xxxxx and the REIT, which questions, if
any, were answered to its satisfaction; and
(vi) Such Owner understands that any document that
evidences the Units (and any unregistered shares of Common
Stock issued upon exchange of the Units) will bear a legend
substantially to the effect of the following:
The securities represented by this document have not
been registered under the Securities Act of 1933, as
amended (the "Act"), or the securities laws of any
state. The securities may not be offered, sold,
transferred, pledged or otherwise disposed of without
an effective registration statement under the Act and
under any applicable state securities laws, receipt
of a no-action letter issued by the Securities and
Exchange Commission (together with either
registration or an exemption under applicable state
securities laws) or an opinion of counsel acceptable
to Xxxxxx-Xxxxx Properties Limited Partnership that
the proposed transaction will be exempt from
registration under the Act and applicable state
securities laws.
and that Xxxxxx-Xxxxx or the REIT, as the case may be,
reserves the right to place a stop order against the transfer
of the Units (and any unregistered shares of Common Stock
issued upon exchange of the Units), and to refuse to effect
any transfers thereof, in the absence of satisfying the
conditions contained in the foregoing legend.
(vii) The address set forth under such Owner's name
in SCHEDULE A is the address of the Owner's principal
residence or principal place of business, and such Owner has
no present intention of becoming a resident of any country,
state or jurisdiction other than the country and state in
which such principal residence or principal place of business
is situated.
E. NASD Affiliation. Each Owner represents severally that,
except as disclosed in writing to Xxxxxx-Xxxxx as attached hereto on
SCHEDULE F (I) neither it nor any affiliate of such Owner is a member
or person affiliated with a member of the National Association of
Securities Dealers, Inc. ("NASD"); and (II) neither it nor any
affiliate of such Owner owns any stock or other securities of any NASD
member not purchased in the open market, or has made any outstanding
subordinated loans to an NASD member. (A company or natural person is
presumed to control a member of the NASD and is therefor presumed to
constitute an affiliate of such a member if the company or person is
the beneficial owner of 10% or more of the outstanding securities of a
member which is a corporation. Additionally, a natural person is
presumed to control a member of the NASD and is therefore presumed to
constitute an affiliate of such a member if such person has the power
to direct or cause the direction of the management or policies of such
member.)
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F. Foreign Person. Each Owner represents that he is not a
"foreign person" within the meaning of Section 1445 of the Code.
6. Representations and Warranties of Xxxxxx-Xxxxx and the REIT.
Xxxxxx-Xxxxx and the REIT hereby represent and warrant to each Owner as follows:
A. Each of Xxxxxx-Xxxxx and the REIT has been duly formed and
is validly existing and is duly qualified to do business in all
jurisdictions where such qualification is necessary to carry on its
business as now conducted and is duly qualified or in the process of
becoming duly qualified in all jurisdictions where the ownership of its
property would necessitate such qualification. Each of Xxxxxx-Xxxxx and
the REIT has all power and authority under its enabling documents to
enter into this Agreement and to enter into and deliver all of the
documents and instruments required to be executed and delivered by each
such party and to perform its respective obligations hereunder and
thereunder.
B. The execution and delivery of this Agreement and the
documents required to be executed by Xxxxxx-Xxxxx and the REIT
hereunder, and the performance of their obligations under this
Agreement, have been duly authorized, and this Agreement and such
documents will on the Closing date have been, duly executed and
delivered by Xxxxxx-Xxxxx and the REIT. This Agreement does and will,
and the documents executed by Xxxxxx-Xxxxx and the REIT will,
constitute the valid and binding obligation of each of them enforceable
in accordance with their terms, subject to bankruptcy and similar laws
affecting the remedies or recourse of creditors generally.
C. The Partnership Agreement delivered to the Owner is a true,
complete and correct copy of the limited partnership agreement of
Xxxxxx-Xxxxx, as amended. The Partnership Agreement is in full force
and effect and has not been further amended, modified or terminated
except as disclosed to the Owners.
D. The registration statement of the REIT filed with the SEC
in connection with the REIT's initial public offering of shares of
Common Stock, and all exhibits, amendments and supplements thereto (the
"Initial Registration Statement"), and each report, proxy statement or
information statement and all exhibits thereto prepared by it or
relating to its properties since the effective date of the Initial
Registration Statement as required to be filed with the SEC (the
"Xxxxxx-Xxxxx Reports") were filed with the SEC in a timely manner,
constitute all forms, reports and documents required to be filed by BNP
under either the Act or the Securities Act of 1934 (collectively, the
"Securities Laws"), complied as to form in all material respects with
the applicable requirements of the Securities Laws and did not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made,
not misleading. No material adverse change in the financial condition,
business operations or properties of Xxxxxx-Xxxxx has occurred that
would render any material statement made in any of the Xxxxxx-Xxxxx
Reports materially untrue or misleading.
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7. Indemnification. Each of the parties hereto agrees, for himself and
his successors and assigns, to indemnify, defend and hold the other party
harmless from and against any and all damage, cause of action, action,
proceeding, expense, loss, cost, claim or liability (each a "Claim") suffered or
incurred by either party as a result of any of the following: any untruth,
inaccuracy or breach of any of the representations, warranties or covenants made
by such party herein or in any document, certificate or exhibit delivered to the
other in connection with this Agreement. It is the express intention and
agreement of the parties that the foregoing indemnity shall survive the
consummation of the transactions contemplated in this Agreement (the "Surviving
Indemnities"). Notwithstanding any provision herein and except for Claims made
regarding a breach of the covenants and representations set forth at Sections
2.B and 5.D, no party shall have any liability for any Claim that is asserted
more than twelve (12) calendar months after the Closing Date.
Notwithstanding anything to the contrary contained in this Agreement,
the maximum liability of each of the Owners under this Section 7 shall not
exceed the dollar value of the Units issued (determined at the time of issuance)
or cash paid to such Owner at Closing (the "Maximum Indemnity Amount"). The
Maximum Indemnity Amount shall be calculated at the time a Claim is paid,
without regard to such Owner's transfer, sale, assignment, surrender,
hypothecation or other disposition of such Owner's Units (or the corresponding
Shares of such Units) after Closing.
8. Other Provisions.
A. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of
which, taken together, shall constitute one and the same instrument.
B. Entire Agreement. Except as stated herein, this Agreement
contains the entire agreement between the parties and supersedes all
prior and contemporaneous understandings and agreements, whether oral
or in writing, between the parties respecting the subject matter
hereof. Except as stated herein, there are no representations,
agreements, arrangements or understandings, oral or in writing, between
or among the parties to this Agreement relating to the subject matter
of this Agreement which are not fully expressed in this Agreement.
C. Construction. The provisions of this Agreement shall be
construed as to their fair meaning, and not for or against any party
based upon any attribution to such party as the source of the language
in question. Headings used in this Agreement are for convenience of
reference only and shall not be used in construing this Agreement.
D. Applicable Law. This Agreement shall be governed by the
laws of the State of North Carolina. Time is of the essence in the
Closing of this transaction.
E. Severability. If any term, covenant, condition or provision
of this Agreement, or the application thereof to any person or
circumstance, shall to any extent be held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the
terms, covenants, conditions or provisions of this Agreement, or the
application thereof to any
10
person or circumstance, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby.
F. Waiver of Covenants, Conditions and Remedies. The waiver by
one party of the performance of any covenant, condition or promise
under this Agreement shall not invalidate this Agreement nor shall it
be considered a waiver by it of any other covenant, condition or
promise under this Agreement. The waiver by either or both parties of
the time for performing any act under this Agreement shall not
constitute a waiver of the time for performing any other act or an
identical act required to be performed at a later time.
G. Schedules. All schedules to which reference is made
in this Agreement are deemed incorporated into this Agreement and made
a part hereof, whether or not actually attached.
H. Amendment and Assignment. This Agreement may be amended at
any time by the written agreement of Xxxxxx-Xxxxx and Owners. All
amendments, changes, revisions and discharges of this Agreement, in
whole or in part, and from time to time, shall be binding upon the
parties despite any lack of legal consideration, so long as the same
shall be in writing and executed by the parties hereto. No party may
assign this Agreement or any interest herein without the prior written
approval of all other parties.
I. Relationship of Parties. The parties agree nothing
contained herein shall constitute either party the agent or legal
representative of the other for any purpose whatsoever, nor shall this
Agreement be deemed to create any form of business organization between
the parties hereto, nor is either party granted any right or authority
to assume or create any obligations or responsibility on behalf of the
other party, nor shall either party be in any way liable for any debt
of the other.
J. Further Acts. Each party agrees to perform any
further acts and to execute, acknowledge and deliver any documents
which may be reasonably necessary to carry out the provisions of this
Agreement.
K. Notice. All notices and demands which either party is
required or desires to give to the other shall be given in writing by
personal delivery, express courier service, certified mail, return
receipt requested, or by telecopy to the address or telecopy number set
forth below for the respective parties. If notice is by deposit or with
an express courier service, it shall be effective on the next business
day following such deposit or, if notice is sent by certified mail,
return receipt requested, it shall be effective upon receipt.
OWNERS: At the address and telecopy number
set forth under such Owner's name in
SCHEDULE A hereto.
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With copy to: Xxxxxx X. Xxxxxxxxx
Xxxxxx Xxxxxxxxx Xxxxx & Xxxxxxxxx,
P.A.
Xxxxxxxxx Xxxxx Xxxxxxxx Xxxxx 000
110 South Stratford Road
Winston-Salem, North Carolina
27104-4214 Telecopy No.:
XXXXXX-XXXXX: Xxxxxx-Xxxxx Properties Limited
Partnership
0000 Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
With copy to: Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P.
0000 Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
BNP: Xxxxxx-Xxxxx Properties, Inc.
0000 Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
L. Consent to Transfer of Interests. Owners agree to and
hereby do amend the partnership agreements or operating agreements for
each of the Acquired Partnerships to allow for the transactions
contemplated hereby and each Owner consents to the transfer by the
other Owners of the Interests as herein contemplated.
IN WITNESS WHEREOF, the parties have duly executed this Agreement by
their hands and under seal affixed hereto as of the date and year first above
written.
XXXXXX-XXXXX PROPERTIES LIMITED PARTNERSHIP
By: Xxxxxx-Xxxxx Properties, Inc.,
General Partner
By: /s/ D. Xxxxx Xxxxxxxxx
President
12
XXXXXX-XXXXX PROPERTIES, INC.
By: /s/ D. Xxxxx Xxxxxxxxx
President
13
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Xxxxxx-Xxxxx Properties
Limited Partnership and such Owners, dated as of September 22, 1997, hereby
becomes a party to such Exchange Option Agreement and agrees to the terms and
conditions thereof and makes the representations, warranties and covenants
contained therein. The undersigned agrees that this signature page may be
attached to any counterpart of said Exchange Option Agreement.
Signature line for Owners
who are natural persons: /s/ Xxxx X. Xxxxxxxx (SEAL)
-------------------------
Xxxx X. Xxxxxxxx
14
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Xxxxxx-Xxxxx Properties
Limited Partnership and such Owners, dated as of September 22, 1997, hereby
becomes a party to such Exchange Option Agreement and agrees to the terms and
conditions thereof and makes the representations, warranties and covenants
contained therein. The undersigned agrees that this signature page may be
attached to any counterpart of said Exchange Option Agreement.
Signature line for Owners
who are natural persons: /s/ Xxxxx X. Xxxxxxxx (SEAL)
-----------------------
Xxxxx X. Xxxxxxxx
15
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Xxxxxx-Xxxxx Properties
Limited Partnership and such Owners, dated as of September 22, 1997, hereby
becomes a party to such Exchange Option Agreement and agrees to the terms and
conditions thereof and makes the representations, warranties and covenants
contained therein. The undersigned agrees that this signature page may be
attached to any counterpart of said Exchange Option Agreement.
Signature line for Owners
who are natural persons: /s/ W. Xxxxxxx Xxxxxx (SEAL)
------------------------
W. Xxxxxxx Xxxxxx
16
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Xxxxxx-Xxxxx Properties
Limited Partnership and such Owners, dated as of September 22, 1997, hereby
becomes a party to such Exchange Option Agreement and agrees to the terms and
conditions thereof and makes the representations, warranties and covenants
contained therein. The undersigned agrees that this signature page may be
attached to any counterpart of said Exchange Option Agreement.
Signature line for Owners
who are natural persons: /s/ Xxxxxxx X. Xxxxxxx (SEAL)
------------------------
Xxxxxxx X. Xxxxxxx
17
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Xxxxxx-Xxxxx Properties
Limited Partnership and such Owners, dated as of September 22, 1997, hereby
becomes a party to such Exchange Option Agreement and agrees to the terms and
conditions thereof and makes the representations, warranties and covenants
contained therein. The undersigned agrees that this signature page may be
attached to any counterpart of said Exchange Option Agreement.
Signature line for Owners
who are natural persons: /s/ Xxxxx X. Xxxx (SEAL)
--------------------
Xxxxx X. Xxxx
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SCHEDULES
Schedule A List of Owners
Schedule B Acquired Partnerships or Properties
Schedule C Supplemental Acquisition Schedules
Schedule D Registration Rights Agreement
Schedule E Assignment of Interests
Schedule E-1 Ownership Interests Assigned As Provided By The
Assignment To Which This Schedule E-1 Is Attached
Schedule F NASD Affiliations
Schedule G Partnership Unit Lock-Up Terms
Note: The schedules to this Exchange Option Agreement are not included in this
registration statement but will be provided by the Company upon request.
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