EXHIBIT 10.17
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") dated as of the 17th day
of July, 2003, by and among First Potomac Realty Investment Limited
Partnership, a limited partnership organized under the laws of the State of
Delaware (the "Operating Partnership") and the persons and entities named on
Schedule I hereto (the "Investors").
RECITALS:
WHEREAS, the Investors own membership interests in Newington Terminal
LLC and Xxxxxxxx Way Investment, LLC (collectively, the "Investee Entities");
and
WHEREAS, the parties hereto have determined that it is in each of their
respective best interests to consummate a transaction pursuant to which the
Investors will contribute all of their membership interests in the Investee
Entities to the Operating Partnership, which currently represents the largest
holder of ownership interests in the Investee Entities, in exchange for Units
(the "Contribution Transaction"); and
WHEREAS, the parties hereto wish to provide herein the terms upon which
the Contribution Transaction will be consummated.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, and intending to be legally bound, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 DEFINED TERMS. Terms defined in the introductory paragraph of
this Agreement and/or the foregoing recitals hereof have the meanings set forth
therein. In addition, as used herein, the following terms have the following
meanings:
CLOSING: The closing of the transactions contemplated hereby, which
shall take place as soon as possible, provided, however, that this Agreement
shall terminate if Closing does not occur prior to October 31, 2003.
CLOSING DATE: The date on which the Closing occurs.
COMPANY: First Potomac Realty Investment Trust, Inc., a Maryland
corporation.
GOVERNMENTAL AUTHORITY: Any municipal, county, state or federal
government unit, or any subdivision, board, bureau, commission, department or
body thereof, having jurisdiction from time to time over the Membership
Interests or the management, operation, use or improvements thereto.
MEMBERSHIP INTERESTS: All of the interests held by the Investors in
Newington Terminal L.L.C. and in Xxxxxxxx Way Investment, L.L.C.
OPERATING PARTNERSHIP AGREEMENT: The Amended and Restated Limited
Partnership Agreement of the Operating Partnership, substantially in the form
attached hereto as Exhibit A, as it may be further amended and restated.
UNITS: Units of general or limited partnership interest in the
Operating Partnership.
1933 ACT: The Securities Act of 1933, as amended, or any successor
statute.
ARTICLE II
CONTRIBUTION TRANSACTION
2.01 CONSENT; CONVEYANCE. At the Closing, the Investors will sell,
assign, transfer and convey the Membership Interests to the Operating
Partnership, and in consideration of such conveyance, the Operating Partnership
will issue to the Investors an aggregate of Thirty-Two Thousand Four Hundred
(32,400) Units, allocated among the Investors in the numbers set forth opposite
their names on Schedule I, which Units will represent limited partnership
interests in the Operating Partnership. The Investors hereby agree to execute,
or cause to be executed on its behalf, as of the Closing, all documents deemed
necessary or appropriate by the Operating Partnership to effect the conveyance
of the Membership Interests to the Operating Partnership.
2.02 TRANSACTION COSTS. The Operating Partnership will pay the
transfer, filing and recordation costs and charges, if any, incident to the
transfer of the Membership Interests, and the Operating Partnership's attorneys'
fees and expenses. The Investors will pay their own attorneys' fees and
expenses.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 AUTHORITY. The Investors hereby represent and warrant to the
Operating Partnership, and the Operating Partnership hereby represents and
warrants to the Investors, each party solely with respect to itself, that (a)
such party has all necessary authority to execute, deliver and perform its
obligations under this Agreement, and (b) such party has taken all necessary
action to approve and adopt this Agreement and authorize its execution, delivery
and performance. The Investors hereby represent and warrant to the Operating
Partnership, and the Operating Partnership hereby represents and warrants to the
Investors, each party solely with respect to itself, that this Agreement has
been duly executed and delivered on behalf of such party and this Agreement
constitutes a legal, valid and binding obligation of such party, enforceable
against such party in accordance with its terms except as such enforcement may
be limited by bankruptcy, etc., or general principles of equity.
3.02 CONFLICTS AND CONSENTS. The Investors hereby represent and
warrant to the Operating Partnership that the execution, delivery and
performance of this Agreement by such Investors does not and will not violate or
result in a breach of any of the terms or provisions of, or constitute a default
under, or conflict with, any agreement, indenture or other instrument to which
the Investors are a party or by which any of their property is bound, or any
judgment, decree, order, writ, award or injunction of any court, governmental
body or arbitrator, or any law, rule or regulation applicable to the Investors.
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3.03 INVESTMENT INTENT; ACCREDITED INVESTOR. The Investors hereby
represent and warrant to the Operating Partnership, each Investor solely as to
itself, that (a) they and their agents and representatives have such knowledge
and experience in financial and business matters as to enable them to utilize
the information made available to them in connection with the transactions
contemplated hereby, to evaluate the merits and risks of the transactions
contemplated hereby and to make an informed decision with respect thereto, and
such an evaluation and informed decision has been made; (b) all documents, books
and records requested by them and pertaining to the transactions contemplated
hereby have been made available to the Investors for inspection by ). them and
their agents and representatives; (c) they and their agents and representatives
have had a full opportunity to ask questions of and receive answers from persons
acting on behalf of the Operating Partnership concerning its proposed business
and prospects, and all such questions have been answered to the Investors'
satisfaction; (d) the Investors are acquiring the Units hereunder for their own
account for investment only and not with a view to making a distribution thereof
within the meaning of the 1933 Act; (e) such Units will not be sold or
transferred by such parties in violation of the securities laws of the United
States or any state thereof or other jurisdiction; (f) the Investors are aware
that such Units have not been registered under the 1933 Act or the securities
laws of any state or other jurisdiction, and that such Units must be held
indefinitely unless subsequently registered or an exemption from such
registration is available; (g) the Investors will not be required to dissolve as
a result of closing of the transactions contemplated hereby and have no present
intention to dissolve following the transactions contemplated hereby; (h) the
Investors are "accredited investors," as such term is defined in Rule 50 1(a) of
the Securities and Exchange Commission; (i) the Investors are aware that they
will not be readily able to liquidate their investment in such Units, and are in
a position to bear the risk of a speculative, illiquid long-term investment; and
(j) the Investors understand and agree that the certificate or certificates
representing such Units, if any, will bear a legend substantially to the effect
set forth below:
The securities represented by this certificate have not been
registered under either the Securities Act of 1933 (the "Act")
or applicable state or foreign securities laws (the "Other
Acts") and shall not be sold or otherwise disposed of for
value by the holder hereof except upon registration of such
sale or disposition in accordance with the securities
registration requirements of the Act and of any applicable
Other Acts, or pursuant to an exemption from such
registration requirements.
3.04 MEMBERSHIP INTERESTS. With respect to the Membership
Interests, the Investors hereby represent, warrant and covenant to the Operating
Partnership:
(a) The Membership Interests are owned, beneficially and
of record, solely by the Investors, free and clear of all liens, pledges,
claims, security interests or other encumbrances of any nature whatsoever. The
Investors have the full power and legal right to contribute the Membership
Interests to the Operating Partnership, and contribution and transfer of the
Membership Interests to the Operating Partnership will vest good title to the
Membership Interests in the Operating Partnership, free and clear of any lien,
security interest, encumbrance or other adverse claim. No Investor has granted
any other person or entity an option to purchase
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or a right of first refusal upon the Membership Interests. The Membership
Interest conveyed hereby are all of the interests that the Investors own in the
Investee Entities.
(b) The Investors have not received written notice, nor
do they have any actual knowledge of, the institution or threat of any
litigation, proceeding or investigation relating to the Membership Interests,
the Investors' title thereto or the transactions contemplate thereby, nor do the
Investors have reasonable grounds to know of any basis for such litigation,
proceedings or investigations.
(c) There exists no actual violation of any law,
regulation, orders or requirements issued by any Governmental Authority, or
action in any court on account thereof, against or affecting the Membership
Interests.
(d) The Investors will not otherwise cause, permit or
approve the entry into or incurring of any obligation, liability, contract or
indebtedness which will be binding from and after the Closing Date except
contracts in the ordinary course of the Investors' operations which are either
terminable without penalty upon thirty (3) days' prior written notice, or are
approved by the Operating Partnership, such approval not to be unreasonably
withheld, conditioned or delayed. Except as otherwise permitted hereby, from the
date hereof until the Closing Date, the Investors and the Investee Entities
shall not take any action or fail to take any action the result of which would
(i) have a material adverse effect on the Membership Interests or (ii) would
cause any of the representations and warranties of the Investors contained in
this Agreement to be untrue as of the Closing Date.
(e) The Investors have not made, and prior to Closing
hereunder will not make, any commitments to any Governmental Authority, utility
company, school board, church or other religious body, or to any other
organization, group or individual, relating to the Membership Interests which
would impose on the Investors or the Operating Partnership the obligation to
make any contributions of money, dedication of land, or grants of easements or
rights-of-way.
(f) The Investors have obtained from their own counsel
advice regarding the tax consequences of (i) the transfer of the Membership
Interests and the receipt of Units as consideration therefor, (ii) the admission
as a partner of the Operating Partnership and (iii) any other transaction
contemplated by this Agreement. Each Investor further represents and warrants
that it has not relied on the Company or the Company's representatives or
counsel for such tax advice.
3.05 BANKRUPTCY. The Investors have not (i) filed or consented to
any petition in bankruptcy (iii) suffered the appointment of a receiver in
bankruptcy to take possession of all or substantially all of its assets, (iv)
suffered the attachment or judicial seizure of all, or substantially all, of its
assets, (v) admitted in writing the inability to pay its debts as the same are
due, or (vi) made any offer of settlement, extension or composition to its
creditors.
3.06 MATERIALITY. All documents and other information provided by
the Investors to the Operating Partnership pursuant to this Agreement are and
shall be true and complete in all material respects. No representation, warranty
or covenant by the Investors in this Agreement
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contains or will contain any untrue statement of material fact, or omits or will
omit to state a material fact necessary to make the statements therein not
misleading.
ARTICLE IV
COVENANTS
4.01 COMMERCIALLY REASONABLE EFFORTS AND COOPERATION. Each of the
parties hereto hereby agrees that it will use its commercially reasonable
efforts to cause the transactions contemplated hereby to be consummated and that
it will cooperate with the other parties hereto in any reasonable manner
necessary to facilitate consummation of the transactions contemplated hereby.
4.02 FURTHER ASSURANCES. From and after the Closing, each of the
parties hereto agrees to execute and deliver to the Operating Partnership such
other instruments and documents and take such other actions and execute and
deliver further assurances as the Operating Partnership reasonably may request
in order more effectively to vest in and convey to the Operating Partnership all
right, title and interest in and to the Membership Interests to be conveyed to
the Operating Partnership pursuant to this Agreement.
4.03 INDEMNIFICATION. The Investors hereby indemnify and agree to
hold the Operating Partnership harmless from and against any claim, cost, loss,
damage or expense (including without limitation, reasonable attorneys' fees and
court costs) which may be suffered or incurred by the Operating Partnership
arising by reason of or related in any way to the breach of any representation
or warranty of the Investors under this Agreement. The Operating Partnership
hereby indemnifies and agrees to hold the Investors harmless from and against
any claim, cost, loss, damage or expense (including without limitation,
reasonable attorneys' fees and court costs) which may be suffered or incurred by
the Investors arising by reason of or related in any way to the breach of any
representation or warranty of the Operating Partnership under this Agreement.
ARTICLE V
CONDITIONS; CLOSING
5.01 CONDITIONS TO ALL PARTIES' OBLIGATIONS. The obligations of
each of the parties hereto to close hereunder are subject to satisfaction of the
following conditions:
(a) The Operating Partnership Agreement shall be in full
force and effect.
(b) The Company shall have completed an initial public
offering of its common shares of beneficial interest.
5.02 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE OPERATING
PARTNERSHIP. The obligations of the Operating Partnership to close hereunder are
also subject to satisfaction of the following conditions:
(a) The Operating Partnership shall have received all
approvals, consents and clearances under any laws, statutes, regulations,
orders, agreements or other documents that it deems material to the ability of
the parties to consummate the transactions contemplated hereby
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or to the business or financial condition of the Operating Partnership on or
after consummation of such transactions.
(b) The representations and warranties made by the
Investors in Article III of this Agreement shall be true and correct on the
Closing Date as though all of such representations and warranties had been made
on the Closing Date.
5.03 CLOSING. The Closing shall be held at the offices of Xxxxxx,
Xxxxx & Xxxxxxx LLP, 1111 Pennsylvania Avenue, Washington, D.C. 2004 at 3:00
p.m. on the Closing Date, which shall be the date on which all of the conditions
to Closing shall have been satisfied. At the Closing, the parties shall execute
and deliver all documents required to be executed and delivered by such parties
as of the Closing. Promptly after the Closing, the Operating Partnership shall
make all filings with governmental officials necessary or appropriate to effect
the transactions contemplated hereby.
ARTICLE VI
NOTICE
6.01 ADDRESS FOR NOTICE. Any notice required or permitted to be
given pursuant to this Agreement shall be in writing and shall be personally
delivered to the party for which intended, or sent by Federal Express or other
recognized overnight air courier capable of giving receipt therefor, the date of
personal delivery or of the air courier's delivery receipt, as the case may be,
being deemed the date of such notice; provided, however, that any written
communication containing such information actually received by a party shall
constitute notice for all purposes of this Agreement. Facsimile transmission
promptly confirmed by original communication delivered as herein specified shall
be an acceptable means of notice. The parties hereby stipulate that their
respective addresses for notice are as follows:
As to the Operating Partnership: First Potomac Realty Investment
Limited Partnership
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
As to the Investors: See the addresses set forth on
Schedule I
Any party may change its address by providing the other parties with
written notice of such change in accordance with this Article VI.
ARTICLE VII
AMENDMENT, WAIVER AND TERMINATION
7.01 AMENDMENT AND WAIVER. Any provision of this Agreement may be
amended or modified in whole or in part, and performance under any provision of
this Agreement may be waived in whole or in part, at any time, by an agreement
or instrument in writing executed by the party or parties to be charged by such
amendment, modification or waiver. The waiver by any
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party of a breach of any provision in this Agreement shall not operate or be
construed as a waiver of any other or subsequent breach hereunder.
7.02 TERMINATION. This Agreement will terminate upon the earlier of
(I) October 31, 2003 and (b) the mutual agreement of the parties hereto.
ARTICLE VIII
MISCELLANEOUS
8.01 ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties hereto with respect to the transactions contemplated hereby.
All prior negotiations and discussions by and among the parties hereto
pertaining to the subject matter hereof which are not reflected in this
Agreement are merged into this Agreement and have no further force and effect.
8.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland without giving
effect to conflict of laws principles thereof.
8.03 BINDING EFFECT. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns.
8.04 SURVIVAL. The representations, warranties and covenants set
forth in this Agreement will survive Closing hereunder and shall not be merged
in any instrument of conveyance.
8.05 COUNTERPARTS AND EFFECTIVENESS. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute but one and the same instrument. The
execution of this Agreement by facsimile signature shall be sufficient for all
purposes, and shall be binding upon any party who so executes.
8.06 INTERPRETATION. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the context hereof so requires, the
singular will include the plural, the male gender will include the female, and
vice versa.
8.07 SEVERABILITY. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto as of the day and year first written above.
OPERATING PARTNERSHIP:
FIRST POTOMAC REALTY LIMITED
PARTNERSHIP INVESTMENT
By: First Potomac Realty Investment Trust,
Inc., its General Partner
By: ______________________________________
Name: ________________________________
Title: _______________________________
INVESTORS:
XXXXX & XXXX XXXXXXXX
_______________________________
_______________________________
FIRST POTOMAC NEWINGTON, INC.
By: ______________________________________
Name: ________________________________
Title: _______________________________
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SCHEDULE I
Number of
Name and Address of Investor Units to be Issued
Xxxx and Xxxxx Xxxxxxxx
__________________________________ 26,162
__________________________________
__________________________________
First Potomac Newington, Inc.
__________________________________ 6,238
__________________________________
__________________________________
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EXHIBIT A
Amended and Restated Limited Partnership Agreement
