EXCHANGE OPTION AGREEMENT
BY AND AMONG
CAROLINA FAC LIMITED PARTNERSHIP,
FAC REALTY, INC.,
AND THE OWNERS OF
THE PROPERTIES AND INTERESTS LISTED HEREIN
DATED AS OF OCTOBER 1, 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
1
REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
2
TABLE OF CONTENTS
Page
1. Contribution of Interests................................................................................1
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...............................................................2
C. Default.........................................................................................3
D. Documents to be Delivered at Closing............................................................3
E. Documents Required to be Delivered by Carolina and the REIT at Closing..........................5
4. Holdback of Units........................................................................................5
X. Xxxxxxx Lease Commencement......................................................................5
X. Xxxxxxx Outparcel...............................................................................6
X. Xxxxxxx Creek Outparcel.........................................................................7
5. Representations and Warranties of Owners.................................................................7
A. Existence and Power.............................................................................7
B. Authorization: No Contravention.................................................................7
C. Pending Actions.................................................................................8
D. Investment Representations and Warranties.......................................................8
E. NASD Affiliation...............................................................................10
F. Foreign Person.................................................................................10
6. Representations and Warranties of Carolina and the REIT.................................................10
7. Other Provisions........................................................................................11
A. Counterparts...................................................................................11
B. Entire Agreement...............................................................................11
C. Construction...................................................................................11
D. Applicable Law.................................................................................11
E. Severability...................................................................................11
F. Waiver of Covenants, Conditions and Remedies...................................................11
G. Schedules......................................................................................11
H. Amendment and Assignment.......................................................................11
I. Relationship of Parties........................................................................12
J. Further Acts...................................................................................12
K. Notice.........................................................................................12
L. Consent to Transfer of Interests...............................................................13
SCHEDULES........................................................................................................20
i
EXCHANGE OPTION AGREEMENT
THIS EXCHANGE OPTION AGREEMENT (the "Agreement") made and entered into
this the 1st day of October, 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"), CAROLINA FAC LIMITED PARTNERSHIP, a Delaware limited
partnership ("Carolina") and its general partner, FAC REALTY, INC., a Delaware
corporation (the "REIT").
W I T N E S S E T H:
WHEREAS, Carolina is a Delaware 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 incorporated herein by reference (such schedule
is herein referred to as such Owner's "Acquisition Schedule"); and
WHEREAS, Carolina desires to acquire from each Owner, and each Owner
desires to transfer to Carolina, on the terms and conditions set forth herein,
all interests owned by such Owner and set forth in such Owner's 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 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
Carolina in exchange for limited partnership interests in Carolina (the
"Partnership Units" or "Units") and Carolina has agreed to acquire the Interests
and to issue to each Owner Partnership Units in Carolina in exchange for the
contribution of each Owner's Interest; and
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 Carolina its Interests and Carolina 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 B
hereof. Anything to the contrary in this Agreement or the Master Agreement
notwithstanding, Carolina shall at all times have the irrevocable right and
option to require the Owners of all of the interests in a Property to either
convey to Carolina such ownership interests or, in lieu thereof, fee
1
simple title to the Property. 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 Acquisition
Schedule, subject to the provisions of Paragraph 4 below. 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 year (or other period over which
distributions are paid) of Carolina ending after the date of Closing,
partnership distributions, if any, attributable to such year (or other
period) payable by Carolina to Owner pursuant to Section 5.1 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 year (or
other period) that the Owner or its successors in interest to the Units
is a limited partner in Carolina. The Owner shall receive,
contemporaneously with receipt by the other limited partners in
Carolina of their respective distributions for such year (or other
period), that portion of a full 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 year (or other period) that the Owner is a limited partner
in Carolina and the denominator of which is the number of days in such
year (or other period). In the event that the Owner receives a full
cash distribution for such period, it shall reimburse Carolina the
prorated portion of such distribution within five (5) days of receipt.
B. The Lock-Up. Each Owner hereby agrees that without the
prior written consent of the REIT, he 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 E 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 dated as of even date herewith by and among
Carolina, the REIT and the Owners (the "Master Agreement").
B. Closing; Condition to Obligations. Subject to the
foregoing, Carolina will specify a closing date, which date shall be no
later than December 4, 1997, for the closing (the "Closing") of the
exchange contemplated hereby which Closing shall take place at the
offices of the REIT. At or before Closing, Carolina and Owner will
execute all closing documents (the "Closing Documents") required by
Carolina in accordance with Paragraph 3.D. and deposit the same in
escrow with the REIT or other escrow agent to be selected by the REIT
(the "Closing Agent").
2
If the Closing occurs:
(i) With respect to each Partnership or Property (or
portion thereof) acquired, Carolina shall cause to be
delivered to the Closing Agent for the benefit of each Owner
the number of Units set forth on each Owner's Acquisition
Schedule, as adjusted pursuant to the terms hereof and the
Master Agreement;
(ii) Upon receipt of the consideration set forth in
clause (i) above, the Closing Agent will release the Closing
Documents to Carolina; and
(iii) The transactions described or otherwise
contemplated herein or in the Closing Documents will thereupon
be deemed to have been consummated.
Notwithstanding the above, Carolina 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 Carolina 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 Carolina not to acquire the
Interests of a particular Non-Complying Owner shall not affect the
obligations of any other Owner hereunder, including any other
Non-Complying Owner. If because of such an election, Carolina would not
acquire all of the Interests in any one Partnership or Property, then
Carolina 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 Carolina.
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 the Closing Agent will be directed to destroy such Closing
Documents and Ancillary Agreements it holds and return to Carolina the
consideration delivered by Carolina 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.
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 Carolina, and deliver to the
Closing Agent, in addition to any other documents mentioned elsewhere
herein, the following:
3
(i) As to Interests for which Carolina has elected in
its sole discretion to accept an assignment of partnership
interests constituting such Interests at Closing, three duly
executed Assignments of Interest (the "Assignment"), which
assignments shall be in a form as attached at SCHEDULE D and
shall contain a warranty of title that such Owner owns such
Owner's Interests free and clear of all encumbrances.
(ii) As to Interests for which Carolina has elected
in its sole discretion to accept a transfer of fee simple
title to the Property in lieu of a transfer of all of the
ownership interests therein, a general warranty deed, xxxx of
sale and assignments of leases, contracts and intangibles.
(iii) Any other documents reasonably necessary to
assign, transfer and convey such Owner's Interests and
effectuate the transactions contemplated hereby, including any
affidavits or indemnities required by the title insurers
insuring Carolina's title to a Property or the Interests.
(iv) If requested by Carolina, 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.
(v) Mortgage releases or consents of mortgagees, as
applicable, to Carolina's acquisition and ownership of its
Interest in such Partnership or Property, without personal
liability of Carolina or the REIT.
(vi) A settlement statement with respect to the
Closing, duly executed by such Owner.
(vii) If requested by Carolina 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 Carolina 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 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.
4
E. Documents Required to be Delivered by Carolina and the REIT
at Closing. Carolina and the REIT shall deliver to the Owners at the
Closing, the following:
(i) A copy of the Agreement of Limited Partnership of
Carolina dated as of even date herewith, as amended (the
"Partnership Agreement").
(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
Carolina as limited partners.
(iii) A settlement statement with respect to the
Closing, duly executed by Carolina.
(iv) Such other documents and instruments as may be
reasonably necessary to consummate the transactions with the
Owners under this Agreement.
4. Holdback of Units. Owners hereby acknowledge and agree that certain
circumstances exist, as described in more detail below, in light of which
Carolina has withheld issuance of certain Partnership Units (the "Withheld
Units") from certain of the Owners, provided that if such Owners strictly
satisfy certain conditions enumerated below, Carolina shall issue such Units as
to which said conditions have been satisfied. However, the Owners hereby
expressly acknowledge that (i) their contribution of their Interests is in
consideration of the issuance of the Units listed in their respective
Acquisition Schedules and such contribution is not dependent or contingent in
any way upon the issuance of any of the Withheld Units and (ii) the Units shall
not be issued unless and until the conditions associated with the issuance of
such Units have been strictly satisfied, and unless the conditions below are
strictly satisfied within the time periods set forth below, the Partnership
Units associated with such conditions will not be issued.
X. Xxxxxxx Lease Commencement. Within thirty (30) days after
the earlier to occur of (i) two (2) years after the Closing or (ii)
Rent Commencement (as hereinafter defined) in respect of that certain
rentable area consisting of 29,010 square feet which is vacant on the
date of this Agreement at the Property listed on the Acquisition
Schedule as "Xxxxxxx," which vacant space is identified on SCHEDULE C
attached hereto as the "Xxxxxxx Vacant Space," Carolina shall issue
163,848 Partnership Units to Xxxx Xxxx and 8,831 Partnership Units to
Xxxx X. Xxxxxx. The term "Rent Commencement" shall mean, with respect
to vacant space at a Property, the date upon which the Owner of such
Property has provided to Carolina and the REIT satisfactory evidence
that such vacant space is under lease to a tenant and on terms
acceptable to Carolina and FAC (with such tenant being unaffiliated
with the Owner) for an initial term of not less than three years and at
an effective base rent, inclusive of CAM charges and other items
commonly considered "additional rent" of not less than $5.00 per
rentable square foot over the term of the Lease, exclusive of renewal
options, and such tenant has accepted the demised premises and is in
occupancy and paying rent. Such evidence shall include, without
limitation, the following items which shall be satisfactory to the REIT
and Carolina in their sole discretion: (i) current tenant estoppel
certifying as to the amount and location of space demised under the
lease, that the tenant has
5
accepted the premises and is in occupancy and paying rent, detailing
the rent payable and any rent concessions or unfulfilled landlord
construction obligations or allowances, the existence or non-existence
of defaults, the term of the lease and any other matters reasonably
required by the REIT or Carolina, (ii) a certificate of occupancy
covering the entire vacant space, duly issued by applicable
governmental authorities, and authorizing the use and occupancy by the
tenant of the demised premises for the uses contemplated under the
lease, (iii) final lien waivers from all contractors of all mechanics'
or other lien rights associated with tenant improvements construction
and (iv) a current report of title disclosing no mechanics' or other
liens have been filed in connection with the construction of such
tenant improvements.
X. Xxxxxxx Outparcel.
(i) Within 30 days after the earliest to occur of (x)
the Sale for not less than $267,631 (as such amount may be
adjusted by mutually agreed upon appraisal) or (y) Development
or (z) Ground Leasing (as such terms are hereinafter defined)
for an annual base ground rent in an amount not less than
$27,000 of that certain outparcel(s) located at the Xxxxxxx
Property and identified on SCHEDULE C as the Xxxxxxx
Outparcel, Carolina shall issue 33,454 Units to Xxxx Xxxx. The
term "Sale" of an outparcel of a Property shall mean the
closing of a sale of such outparcel to a third party
unaffiliated with the Owner of such Property for cash, as
evidenced by a settlement statement and such other
documentation as is reasonably requested by Carolina. The term
"Development" of an outparcel of a Property shall mean the
receipt of a building permit which has been duly issued by
appropriate governmental authorities with respect to the
development of such outparcel following the execution of a
lease with a tenant for the occupancy of the improvements on
such outparcel, with such lease being on terms approved by and
otherwise satisfactory to the REIT and Carolina. The term
"Ground Leasing" of an outparcel of a Property shall mean the
occurrence of the rent commencement date under an executed
ground lease of such outparcel and receipt of the first
regular monthly installment of ground rent from the ground
lessor thereunder.
(ii) On each Earn Date (hereinafter defined), Xxxx
Xxxx shall qualify for release of (i.e., "earn") one-third of
the Units listed below (rounded to the nearest whole Unit) for
each of the management agreements listed below, provided that
, in each case, such management agreement shall not
theretofore have expired (without renewal on the same terms),
been modified on terms materially less favorable to the REIT
as the manager thereunder, or been terminated. Once earned,
Units shall be issued to Xxxx Xxxx on the next following Award
Date (hereinafter defined). If a management agreement shall
have so expired or been terminated or modified prior to an
Earn Date, Xxxx Xxxx shall not be entitled to earn any
additional Units with respect to such management agreement,
but the same shall not affect his right to Units (i) already
earned with respect to management agreement before its
termination, modification or expiration or (ii) in respect of
other such management agreements which shall not have been so
terminated or modified or expired.
6
The management agreements which shall have been
assigned to the REIT, and the number of Units associated
therewith are as follows:
Management Agreement Xxxxx
0. XXxxx Xxxxx 13,449
2. NC Trust Office 26,668
3. TS&H Building 5,067
The term "Earn Date" shall mean (i) that date which
is one day after the Closing and (ii) each of the next two
succeeding anniversaries of such date.
The term "Award Date" shall mean the later to occur
of (i) the date upon which the Withheld Units under Paragraph
4B(i) of this Agreement in respect of the Xxxxxxx Outparcel
are issued in accordance with the terms thereof or (ii) the
first anniversary of the Closing and each of the next two
succeeding anniversaries thereof; provided that if Xxxx Xxxx
shall not have qualified for issuance of the Units withheld
under Paragraph 4B(i) of this Agreement by that date which is
three years from the date of Closing, then the Award Date
shall be that date which is three years and 30 days after the
Closing (whether or not the Units withheld under Paragraph
4B(i) of this Agreement have then qualified for release).
X. Xxxxxxx Creek Outparcel. Within 30 days after the earlier
to occur of the Sale for not less than $150,000 or Development of that
certain outparcel(s) located at the Property known as Xxxxxxx Creek and
identified on SCHEDULE C as the Xxxxxxx Creek Outparcel, Carolina shall
issue 18,750 Units to Xxx X. Xxxxxxx.
5. Representations and Warranties of Owners. Each Owner as to his or
its Interests represents and warrants to Carolina 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
7
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.
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 Carolina's reliance on
such exemptions is predicated in part on the accuracy and
completeness of the representations and warranties of Owner;
(iii) 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 Carolina or the
REIT, as the case may be, receiving an opinion of counsel
knowledgeable in securities law matters and reasonably
acceptable to Carolina 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
8
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
Carolina 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 Carolina and the REIT and has had the opportunity to ask
questions of the management of Carolina 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 Carolina FAC Limited Partnership that the proposed
transaction will be exempt from registration under
the Act and applicable state securities laws.
and that Carolina 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.
(viii) The Owners acknowledge and agree that they
have consulted their own corporate and tax advisors and have
made their investment decisions based upon the advice of their
own consultants and advisors, and that the number of units to
which any Owner is entitled hereunder shall be determined with
reference to SCHEDULE B irrespective of any tax consequences
of the transactions contemplated by this Agreement or
otherwise or the falsity or unreliability of any assumptions
9
made by such Owner or anyone else, for tax purposes or
otherwise, with respect to the valuation or worth of the Units
or the Interests.
E. NASD Affiliation. Each Owner represents severally that (I)
neither he 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 he 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.)
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 Carolina and the REIT. Carolina
and the REIT hereby represent and warrant to each Owner as follows:
A. Each of Carolina 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 Carolina 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 Carolina 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 Carolina and the
REIT. This Agreement does and will, and the documents executed by
Carolina 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.
10
C. The Partnership Agreement delivered to the Owner is a true
and correct copy of the agreement of Carolina. The Partnership
Agreement is in full force and effect.
7. 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 Delaware. 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 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 Carolina and the REIT, in their sole discretion, without
the consent of any Owners, except that this Agreement shall not be
amended without the consent of the Owners if such
11
amendment would convert the Owners' Units into general partnership
interests or amend this Paragraph 7.H. 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 Owner 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.
Carolina: Carolina FAC Limited Partnership
00000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx, X.X. 00000
Telecopy No.: (000) 000-0000
With copy to: Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
12
REIT: FAC Realty, Inc.
00000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxxxx
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.
13
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.
CAROLINA FAC LIMITED PARTNERSHIP
By: FAC Realty, Inc.,
General Partner
By:
------------------------
Name:
--------------------
Title:
---------------------
FAC REALTY, INC.
By:
--------------------
Name:
-----------------
Title:
----------------
14
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Carolina FAC Limited
Partnership and such Owners, dated as of October 1, 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.
(SEAL)
------------------
XXX X. XXXXXXX
15
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Carolina FAC Limited
Partnership and such Owners, dated as of October 1, 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.
(SEAL)
---------------------------
XXXXXXX X. 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 Carolina FAC Limited
Partnership and such Owners, dated as of October 1, 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.
(SEAL)
---------------------
XXXX X. XXXX
17
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Carolina FAC Limited
Partnership and such Owners, dated as of October 1, 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.
(SEAL)
-------------------------
XXXXXXXX XXXXX
18
OWNER SIGNATURE PAGE
The undersigned, desiring to become one of the within-named Owners to
that certain Exchange Option Agreement by and among Carolina FAC Limited
Partnership and such Owners, dated as of October 1, 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.
(SEAL)
---------------------------
XXXX X. XXXXXX
19
SCHEDULES
Schedule A List of Owners
Schedule B Acquired Partnerships or Properties
Schedule C Description of Xxxxxxx Vacant Space, Xxxxxxx
Outparcel and Xxxxxxx Creek Outparcel
Schedule D Assignment of Interests
Schedule D-1 Ownership Interests Assigned As Provided By The
Assignment To Which This Schedule D-1 Is Attached
Schedule E Partnership Unit Lock-Up Terms
20
Schedule A
LIST OF OWNERS
Xxx X. Xxxxxxx
c/o Atlantic Real Estate Corporation
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Xxxxxxx X. Xxxxxx
c/o Atlantic Real Estate Corporation
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Xxxx X. Xxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Xxxxxxxx Xxxxx
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Xxxx X. Xxxxxx
0000 Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (919) -
A-1
