CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made and entered on March 19, 1997, and
effective as of March 1, 1997, by and between ASHBURN FARMS VILLAGE CENTER,
L.L.C., a Virginia limited liability company (the "Contributor") and FIRST
WASHINGTON REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
(hereinafter referred to as "FWRLP").
W I T N E S S E T H:
WHEREAS, the Contributor is the record and beneficial owner of all of
that certain real property containing approximately 10.2 acres and located in
Loudoun County, Virginia, as more particularly described on Exhibit A attached
hereto (the "Land"), together with a shopping center known as Ashburn Farms
Village Center and containing approximately 88,965 square feet of rentable area
and all other buildings and improvements situated thereon (collectively, the
"Building") and all personal property and fixtures located therein (the
"Personalty"), and all appurtenances, rights, easements, rights-of-way,
tenements and hereditaments incident thereto (the "Additional Property") (the
Land, Building, Personalty and Additional Property are hereinafter collectively
referred to as the "Property"); and
WHEREAS, Contributor and FWRLP desire to enter into this Agreement
relating to the contribution by Contributor to FWRLP and/or an affiliate
thereof, of the Property in exchange for certain interests in FWRLP.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Contribution. Subject to the terms and conditions set forth
in this Agreement, Contributor and FWRLP agree to the contribution by
Contributor to FWRLP (the "Contribution") of all of the Property.
2. Consideration.
(a) (i) Effective upon the Contribution of the Property to
FWRLP (i.e., at Closing), the Contributor (or its Members) shall be admitted to
FWRLP as additional limited partners in accordance with Section 12.2 of the
First Amended and Restated Agreement of Limited Partnership of FWRLP dated as of
June 27, 1994 (the "FWRLP Partnership Agreement"). In consideration of the
Contribution of the Property, FWRLP shall (i) issue 93,571 Common Units (as
defined in the FWRLP Partnership Agreement) to the Contributor, (ii) subject to
Section 2(b), below, take the Property subject to (A) the Contributor's
obligations with respect to the outstanding principal balance of the existing
$6,400,000 construction loan made by The First National Bank
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of Maryland ("FNBM") to the Contributor (the "FNBM Loan") (which balance, as of
February 1, 1997, was equal to $5,189,260.00) (the "Principal Balance"), and (B)
the obligation of the Contributor to repay those certain advances in the amount
of $983,334.00 and $491,667.00 made by Xxxxxx Xxxxxx and Xxx Xxxxxxx,
respectively, to the Contributor, plus all interest accrued thereon to the
Closing (collectively, the "Xxxxxx/Thomson Advance"). If the outstanding
principal balance of the FNBM Loan and the Xxxxxx/Xxxxxxx Advance, and any
accrued and unpaid interest thereon, at Closing is less than or greater than
$7,700,000, then the total Units to be issued to Contributor shall be increased
or decreased, respectively, by an amount equal to the difference divided by the
Unit Price.
(ii) The Common Units to be issued to the
Contributor shall be issued at the following times and the following amounts:
(A) 70,711 of the Common Units shall be
issued to the Contributor at the Closing.
(B) 22,860 of the Common Units shall be
issued to the Contributor upon the earlier to occur of the following
(the "Second Issuance Date"): (i) closing of the sale by FWRLP of that
certain parcel of land containing approximately 0.7 acres, as more
particularly described in Exhibit A-1 attached hereto (the "Pad Site"), or
(ii) FWRLP enters into a lease of the Pad Site and the tenant thereunder
actually commences paying rent under said lease, or (iii) the date which is
three (3) years after the Closing Date.
(iii) Contributor shall have the right to
distribute the Units received by it under this Agreement to its members
(the "Members"), as identified on Exhibit M attached hereto. Unless
otherwise directed by Contributor, the Units issuable under this Agreement
to Contributor will be issued directly to the Members of Contributor in the
proportions set forth on Exhibit M and the Members shall be admitted to FWRLP
as limited partners at the Closing.
(b) (i) At or immediately after Closing, FWRLP shall repay the
Xxxxxx/Thomson Advance to Xxxxxx and Xxxxxxx. In addition, nothing set forth
above shall be construed to prohibit FWRLP from closing, immediately after
Closing under this Agreement is fully effective, on a permanent loan which will
have the effect of refinancing the FNBM Loan.
(ii) The Property is presently encumbered by a
Deed of Trust and Security Agreement ("Mortgage") from the Contributor, as
debtor, for the benefit of FNBM, as secured party (the "Lender"), which
Mortgage secures an original principal indebtedness of $6,400,000.00 with
interest thereon payable over the term thereof (which initial term ends on
January 1, 1998, subject to three one (1) year extension options), as
evidenced by a Note from the Contributor to Lender ("Note"). The Mortgage
and Note and all documents and instruments executed in connection
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therewith are collectively referred to as the "FNBM Loan Documents." Copies of
the Mortgage and Note are attached hereto as Exhibits Q and R, respectively.
(iii) If FWRLP elects to take the Property
subject to the FNBM Loan, then at Closing, the Contributor shall execute an
estoppel certificate in favor of FWRLP certifying that, to the best knowledge
of the Contributor, there is no default, or event of default which with notice
or lapse of time, or both, would constitute a default under the FNBM Loan.
(c) The Contributor and FWRLP will settle any pro rations and
closing adjustments as provided in this Agreement as follows: (i) if Contributor
owes the same, on a net basis, to FWRLP, through a reduction in Units in an
amount equal to the net adjustment divided by $21.00 per Common Unit (the "Unit
Price"), rounded to the nearest one (1), to be delivered at the Closing, and
(ii) if FWRLP owes the same, on a net basis, to Contributor, through (A) an
increase in the agreed initial Gross Asset Value (as such term is defined in
FWRLP's Partnership Agreement) of the Property in an amount equal to the net
adjustment and (B) the issuance of additional Common Units in an amount equal to
the net adjustment divided by the Unit Price, rounded to the nearest one (1), to
be delivered at the Closing. Contributor acknowledges and agrees that the Units
will not be redeemable for cash or exchangeable for common stock of the REIT for
a period of thirteen (13) months after the Closing Date (with respect to the
Units issued pursuant to Section 2(a)(ii)(A)) and for a period of thirteen (13)
months after the Second Issuance Date (with respect to the Units issued pursuant
to Section 2(a)(ii)(B)), all as more fully discussed in the Confidential
Information Statement (as hereinafter defined), as supplemented through the date
hereof.
(d) Upon written notice to FWRLP prior to Closing, the
Contributor may elect to receive Series B Preferred Units (as defined in the
FWRLP Partnership Agreement) in place of some or all of the Common Units
otherwise issuable to the Contributor hereunder, based on an exchange rate of
0.78 Preferred Units for each Common Unit otherwise issuable hereunder (the
Common Units and the Preferred Units are hereinafter collectively referred to as
the "Units").
(e) In the event that (i) FWRLP sells the Pad Site or (ii)
enters into a lease of the Pad Site with a net effective base rent payable to
FWRLP (i.e., net of any leasing commissions in excess of $30,000 and tenant
improvements and/or allowances, etc.) of at least $50,000 per annum [or if the
lease of the Pad Site requires FWRLP to construct a building thereon at FWRLP's
expense, then the net effective annual base rent must be at least $50,000 plus
12.5% times the aggregate cost of constructing the building on the Pad Site
(hard and soft costs)], then Contributor shall have the right to participate in
the development of the possible second pad site, as more particularly described
in Exhibit A-2 attached hereto (the "Second Pad Site"), on a 50/50 basis (i.e.,
all costs of developing the Second Pad Site and all net cash flow generated by
the Second Pad Site will be shared equally). Contributor must exercise its right
to participate in the Second Pad Site by giving written notice thereof to FWRLP
within ten (10) days after delivery of written notice from FWRLP to the
Contributor that FWRLP
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intends to develop the Second Pad Site and the terms thereof. If Contributor
does not elect to participate or fails to so elect within the time period set
forth above, than all of the rights to participate granted to Contributor (and
its Members) herein shall terminate and be null and void and of no further force
or effect. If Contributor timely elects to participate in the development of the
Second Pad Site as set forth above, then FWRLP and Contributor will form a joint
venture (or other entity mutually agreeable to the parties) which will lease the
Second Pad Site from FWRLP for a period of ninety-nine (99) years at a rental of
One Dollar ($1.00) per year. The terms of the joint venture agreement between
FWRLP and the Contributor will provide that FWRLP shall be the managing partner
and all decisions with respect to the development, leasing, management and
operation of the Second Pad Site shall be made by FWRLP, in its sole discretion.
In addition, the decision of whether or not and when to lease and develop the
Second Pad Site will be made in FWRLP's sole discretion. Contributor hereby
assigns its rights to participate in the development of the Second Pad Site to
its Members. Notwithstanding the foregoing, if prior to the development of the
Second Pad Site FWRLP sells or otherwise disposes of the Property (which
includes the Second Pad Site) to a third party in a bona fide transaction, then
any and all rights granted to Contributor (and its Members) herein to
participate in the development of the Second Pad Site shall terminate upon the
closing of such sale or other disposition, and shall be null and void and of no
further force or effect.
(e) Intentionally Omitted.
(f) Attached hereto as Exhibit S is a description of unpaid
fees, expenses or other liabilities incurred by Contributor in connection with
the acquisition, development or leasing of the Property (the "Development
Expenses"). Provided that Contributor gives FWRLP at least five (5) days prior
notice of such Development Expenses and that such Development Expenses can be
quantified, FWRLP shall pay such Development Expenses at the Closing (or when
due and payable, if later) and the amount of Common Units otherwise issuable to
Contributor at Closing shall be reduced by dividing the aggregate amount of
Development Expenses by $21.00 (or, if Preferred Units are also being issued,
then there shall be a pro rata reduction of the Preferred Units using the
exchange rate set forth in Section 2(d) hereof). If mutually agreeable,
Contributor and FWRLP may treat the responsibility for all or a portion of the
Post- Closing Work described in Section 21 below as a Development Expense, in
which case FWRLP shall assume responsibility for the expense of such
Post-Closing Work and the Units otherwise issuable to Contributor at Closing
shall be further reduced as provided in the preceding sentence.
(g) Any amounts paid by the Contributor to FWRLP pursuant to
Sections 14, 18, or 21 or otherwise, shall be treated as a capital contribution
by the Contributor to FWRLP, and the agreed initial Gross Asset Value (as such
term is defined in FWRLP's Partnership Agreement) of the Property contributed to
FWRLP by the Contributor shall be reduced by the same amount.
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3. Deposit.
(a) Within three (3) business days after the date of delivery
to FWRLP of an original of this Agreement executed by Contributor together with
completed Exhibits hereto (the date of such delivery by Contributor being the
"Acceptance Date"), FWRLP shall deliver to the Title Company, as escrow agent, a
deposit (the "Deposit") of Fifty Thousand Dollars ($50,000.00) by check payable
to the Fidelity National Title Insurance Company of Pennsylvania (the "Title
Company").
(b) The Title Company will immediately provide Contributor
with written evidence of receipt of such Deposit. The Title Company shall place
the Deposit in an interest-bearing account within three (3) days after the date
of receipt thereof, and interest on the Deposit shall accrue to the benefit of
the party entitled to the Deposit pursuant to this Agreement. The Deposit shall
be held by the Title Company pursuant to the terms and conditions of this
Agreement.
(c) In the event that, at any time prior to Closing,
Contributor or FWRLP provides Title Company with a certification (a copy of
which shall be delivered contemporaneously to the other party) that the
Contributor or FWRLP, as the case may be, is entitled to the Deposit pursuant to
the terms of this Agreement, Title Company shall deliver the Deposit to such
party within seven (7) business days after receipt of said notice, unless the
other party disputes such certification by written notice to Title Company (a
copy of which shall be delivered contemporaneously to the other party) delivered
within five (5) business days of Title Company's receipt of the initial
certification. In such event, Title Company shall hold the Deposit pending
resolution of such dispute.
(d) The parties acknowledge that Title Company is acting
solely as a stakeholder at their request and for their convenience, that Title
Company shall not be deemed to be the agent of either of the parties, and Title
Company shall not be liable to either of the parties for any act or omission on
its part unless taken or suffered in bad faith, in willful disregard to this
Agreement or involving gross negligence. Contributor and FWRLP shall jointly and
severally indemnify and hold Title Company harmless from and against all costs,
claims and expenses, including reasonable attorneys' fees, incurred in
connection with the performance of Title Company's duties hereunder, except with
respect to actions or omissions taken or suffered by Title Company in bad faith,
in willful disregard of this Agreement or involving gross negligence on the part
of Title Company.
4. Closing. Except as otherwise provided in this Agreement, the
Contribution contemplated herein shall be consummated at the "Closing", which
shall take place on the date (the "Closing Date") specified by FWRLP on not less
than ten (10) days notice to Contributor, provided that the Closing Date shall
not be later than thirty (30) days after the end of the Feasibility Period. The
Closing shall take place at the offices of Xxxxxxxxx & Saas, P.C., or at such
other place as may mutually agreed upon by Contributor and FWRLP. The parties
intend that the transfer of the Property
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be effective for all purposes as of 12:01 a.m. on March 1, 1997, irrespective of
the actual Closing Date, and all provisions of this Agreement which purport to
adjust items as of the Closing Date shall be interpreted so as to give effect to
such intention. The date upon which the Closing actually occurs (irrespective of
the intended effective date of the contribution of the Property) shall also be
referred to herein as of the "Date of Funding".
5. Representations and Warranties of Contributors. (i) In order to
induce FWRLP to enter into this Agreement and to issue the Units in
consideration for the Property, but subject to Section 5(ii), below, Contributor
hereby makes the following representations and warranties, each of which is
material and shall, together with all covenants, agreements and indemnities set
forth in or made pursuant to this Agreement, survive Closing, notwithstanding
any investigation at any time made by or on behalf of FWRLP:
(a) Authority of Contributor. Contributor has the right, power
and authority to enter into this Agreement and to contribute the Property in
accordance with the terms and conditions hereof. Other than FNBM's consent if
the FNBM Loan is not repaid in full, no consents of any persons other than those
executing this Agreement are required for such execution or to cause Contributor
to consummate the transactions contemplated hereby. This Agreement is the valid
and binding obligation of Contributor, enforceable against it in accordance with
its terms.
(b) [Intentionally Omitted]
(c) Compliance with Existing Laws. Contributor has not
received any written notice, and the Contributor is not aware of, any violation
of, any applicable building, zoning, environmental or other ordinances, statutes
or regulations of any governmental agency, in respect to the ownership, use,
maintenance, condition and operation of the Property or any part thereof which
remain(s) outstanding as of the date hereof, except as set forth in Exhibit G.
(d) Leases. True, correct and complete copies of all of the
leases of the Property and any amendments thereto (collectively, the "Leases")
have been delivered to FWRLP. Attached hereto as Exhibit B is a description of
all of the Leases and a current rent schedule ("Rent Schedule") covering the
Leases. There are no leases or tenancies of any space in the Property other than
those set forth in Exhibit B or, to the Contributor's knowledge, any subleases
or subtenancies unless otherwise noted therein. Except as otherwise set forth in
Exhibit B, the Leases, or elsewhere in this Agreement:
(i) The Leases are in full force and effect
and constitute a legal, valid and binding obligation of the
respective tenants;
(ii) no tenant has an option to purchase the
Property;
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(iii) no renewal or expansion options have been
granted to the tenants, except as provided in the Leases;
(iv) to the Contributor's knowledge, the
Contributor is not in default under the Leases;
(v) the rents set forth on the Rent Schedule are
being collected on a current basis and there are no arrearages
in excess of one month, except as indicated in Exhibit B
hereto, nor has any tenant paid any rent, additional rent or
other charge of any nature for a period of more than thirty
(30) days in advance;
(vi) other than tenant alterations and allowances as
described in Exhibit L (which shall be the responsibility of
Contributor unless otherwise agreed under Section 2(f) above),
all work for tenant alterations and allowances and other work
or materials contracted for by the Contributor and, to the
Contributor's knowledge, any tenant has been completed and/or
paid for by the Contributor (or such tenant), and all work and
materials have been fully paid for or will be paid for by
Closing;
(vii) the Contributor has not sent written notice to
any tenant claiming that such tenant is in default, which
default remains uncured, and to the best of Contributor`s
knowledge, no tenant is in default under its Lease, except as
indicated in Exhibit B hereto;
(ix) no action or proceeding instituted against
the Contributor by any tenant is presently pending in any
court; and
(x) there are no security deposits other than
those set forth in Exhibit B.
(e) Service Contracts. Attached hereto as Exhibit C is a
complete and correct list of all contracts or agreements relating to the
management, leasing, operation, maintenance or repair of the Property (the
"Service Contracts"). True and correct copies of all of the Service Contracts
have been delivered to FWRLP. No Service Contract which FWRLP agrees to assume
will be terminated, amended, modified or supplemented prior to the Closing Date
without FWRLP's prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed.
(f) Tax Bills. Attached hereto as Exhibit D are true and
correct copies of tax bills issued by any applicable federal, state or local
governmental authority to the Contributor with respect to the Property for the
most recent past and current tax years, and any new assessment received with
respect to a current or future tax year.
(g) Insurance. The Property is insured for its
replacement value against loss or damage sustained as a result of fire or
other casualty. Contributor shall
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maintain in full force and effect all hazard, liability, rent loss and other
insurance policies until the Closing Date. Copies of all such policies have been
delivered to FWRLP.
(h) Condition of Property. At Closing, the Property shall be
in its "as is, where is" condition as of the Acceptance Date. Contributor has
not knowingly withheld any information regarding the condition of the Property,
or its compliance with any laws, rules or regulations that would be material to
FWRLP's decision to enter into this transaction.
(i) Tenant Estoppels. Contributor represents and warrants that
it will use commercially reasonable efforts to obtain and deliver to FWRLP
within thirty (30) days after the Acceptance Date, a tenant estoppel letter in
the form attached hereto as Exhibit F (or such other form as required by FWRLP's
mortgage lender) from each of the tenants of the Property, except that in the
case of Super Fresh the form of estoppel letter will be governed by the tenant
Lease. Contributor hereby agrees that FWRLP shall have full participation in
connection with the procurement of said tenant estoppel letter(s).
(j) Condemnation Proceedings. No condemnation or eminent
domain proceedings are pending or, to the best of Contributor`s knowledge,
threatened against the Property or any part thereof, and Contributor has made no
commitments to and has received no notice, oral or written, of the desire of any
public authority or other entity to take or use the Property or any part thereof
whether temporarily or permanently, for easements, rights-of-way, or other
public or quasi-public purposes, other than as set forth in the Permitted
Exceptions and in other public records concerning the initial development of the
Property (e.g., the approved site plan).
(k) Litigation. No litigation is pending or, to the best of
Contributor`s knowledge, threatened, including administrative actions or orders
relating to governmental regulations, affecting the use, operation or ownership
of the Property or any part thereof or Contributor`s right to contribute the
Interests as contemplated herein.
(l) No Defaults. Subject to obtaining FNBM's consent, or the
full repayment of the Loan, neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) conflict with, or
result in a breach of, the terms, conditions or provisions of, or constitute a
default under, any agreement or instrument to which Contributor is a party or by
which the Contributor or the Property is bound, (ii) to Contributor`s knowledge,
violate any restriction, requirement, covenant or condition to which the
Contributor is subject or by which the Contributor or the Property is bound, or
(iii) to Contributor`s knowledge, constitute a violation of any applicable code,
resolution, law, statute, regulation, ordinance, rule, judgment, decree or
order, or (iv) result in the cancellation of any contract or lease pertaining to
the Property.
(m) Hazardous Waste. Other than as set forth in the
Phase I environmental report prepared by Engineering Consulting Services, Ltd.
dated
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February 15, 1995, Contributor has no knowledge of any discharge, spillage,
uncontrolled loss, seepage or filtration (a "Spill") of oil, petroleum or
chemical liquids or solids, liquid or gaseous products or any hazardous waste or
hazardous substance (as those terms are used in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, or in any other applicable
federal, state or local laws, ordinances, rules or regulations relating to
protection of public health, safety or the environment, as such laws may be
amended from time to time) at, upon, under or within the Land or any contiguous
real estate. To the best of Contributor`s knowledge, there is no proceeding or
action pending or threatened by any person or governmental agency regarding the
environmental condition of the Property. To the Contributor`s knowledge, the
Building is totally free of asbestos.
(n) [Intentionally Omitted]
(o) Utilities. To the best of Contributor`s knowledge,
adequate, usable public sewers, public water facilities, gas and electrical
facilities necessary to the operation of the Property are installed in and are
duly connected to the Property and can be used without any charge, except the
normal deposits, if any, and usual metered utility charges and sewer charges.
(p) Personal Property. Attached hereto as Exhibit H is a true,
correct and complete inventory of all personal property ("Personal Property"),
if any, used in the management, maintenance and operation of the Property (other
than trade fixtures or personal property of tenants).
(q) Leasing Commissions. There are, and at Closing shall be,
no outstanding or contingent leasing commissions or fees payable with respect to
the Property (exclusive of any partial commissions payable for Leases where the
tenant is not yet in occupancy as set forth in Exhibit O hereto, which shall be
the responsibility of Contributor, unless otherwise agreed under Section 2(f)
above). The covenants contained in this subparagraph shall survive Closing
without limitation.
(r) Securities Law Matters.
(i) The Contributor and each of its Members is an
"accredited investor" as such term is defined under Rule 501
promulgated under the Securities Act of 1933, as amended (the
"Securities Act");
(ii) The Members have their primary residences or
principal place of business in the Commonwealth of
Pennsylvania and the Commonwealth of Virginia;
(iii) The recipients of the Units are acquiring the
Units for their own respective accounts for investment
purposes only and not with a present view to distribution;
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(iv) Taking into account the personnel and resources
Contributor can practically bring to bear on the acquisition
of the Units in the FWRLP contemplated hereby, the recipients
of the Units are knowledgeable, sophisticated and experienced
in making, and are qualified to make, decisions with respect
to investments in securities presenting an investment decision
like that involved in the acquisition of the Units, including
investments in securities issued by FWRLP, and have requested,
received, reviewed and considered all information it deems
relevant in making an informed decision to acquire the Units
(including the Confidential Information Statement attached
hereto as Exhibit I which Contains First Amended and Restated
Agreement of Limited Partnership of FWRLP and any Amendments
thereto (the "Partnership Agreement"));
(v) The recipients of the Units will not, directly
or indirectly, voluntarily offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Units
except in compliance with the Securities Act and the rules and
regulations promulgated thereunder and with the terms and
conditions of the Partnership Agreement;
(vi) The recipients of the Units acknowledge that the
Units to be issued must be held unless and until they are
subsequently registered under the Securities Act and under
applicable state securities or blue sky laws, unless
exemptions from such registrations are available at the time
of resale;
(vii) Prior to the issuance of the Units, the
recipients of the Units will execute all such other documents
and instruments as may be reasonably necessary to allow FWRLP
to comply with federal and state securities law requirements
with respect to the issuance of the Units and to comply with
the terms of the Partnership Agreement, including without
limitation executing an amendment to the Partnership Agreement
of FWRLP whereby the recipients of the Units agree to be bound
by all of the terms and conditions of the Partnership
Agreement;
(viii) As required by the Pennsylvania Securities Act
of 1972, recipients of Units who are residents of, or who have
their principal place of business in, the Commonwealth of
Pennsylvania, shall not resell his or its Units for a period
of twelve (12) months from and after the issuance thereof
unless pursuant to an exemption from the requirements of such
act or an order from the Pennsylvania Securities Commission;
(ix) The recipients of the Units acknowledge and
agree that, notwithstanding Section 8.6 of the FWRLP
Partnership Agreement, the Units to be issued hereunder shall
not be redeemable for cash or exchangeable for Common and
Preferred Stock, as applicable, of First
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Washington Realty Trust, Inc. ("REIT") for a period of
thirteen (13) months from and after the Closing Date (with
respect to the Units issued pursuant to Section 2(a)(ii)(A))
and for a period of thirteen (13) months after the Second
Issuance Date (with respect to the Units issued pursuant to
Section 2(a)(ii)(B)); and
(x) The foregoing representations and covenants
in this subsection (r) shall survive Closing without limitation.
FWRLP hereby agrees that, at Closing, Contributor may transfer the
Units to its Members in accordance with the percentages set forth in Exhibit M
to this Agreement, or may request FWRLP to issue the Units directly to such
Members, provided that the Members receiving such Units shall acknowledge and
agree to be bound (on a several basis with respect to matters pertaining to such
Members) by all of the provisions of this Section 5(r) and any other provision
of this Agreement relating to the Units (in lieu of Contributor), and by
accepting such Units hereby agree to be so bound.
(s) Bonding Requirements. The only payment or performance
bonds required of the Contributor by Loudoun County or other jurisdiction in
connection with the development of the Property which remain outstanding are (i)
a $2,472.02 one year maintenance cash bond to Loudoun County for off-site
sanitary sewer, (ii) a $2,700.10 one year maintenance cash bond to Loudoun
County for on-site and off-site water and sewer, (iii) a $12,500 bond to VDOT
for stormwater management, and (iv) a $43,667 bond to Loudoun County for erosion
control (items (i) and (ii) are referred to collectively as the "Cash Bonds" and
items (iii) and (iv) are referred to collectively as the "Non-cash Bonds"). If
and when any bond is released, any cash related thereto which is received by
FWRLP shall be retained by FWRLP. If less than the face amount of any cash bond
is returned to FWRLP when the bond is released or if any bond is drawn upon
prior to its release, then the amount of the shortfall or draw down, as
applicable shall be reimbursed to FWRLP by the Contributor and its Members
pursuant to Section 18(e) herein. If either of the bonds set forth as items
(iii) and (iv) above are not released within six (6) months after Closing, then
FWRLP shall have the right to hold back any distributions payable by FWRLP to
Contributor or its Members in an amount equal to twenty-five percent (25%) of
the face value of such bond(s) not released until such bond(s) are released. If
any of the bonds are drawn upon by the applicable authority holding such
bond(s), then FWRLP will promptly notify Contributor and its Members, and if the
bonds drawn upon are not reinstated in full (and the Members may participate
with FWRLP in seeking such reinstatement) within thirty (30) days after such
notice to Contributor (and its Members), then Contributor and its Members shall
reimburse to FWRLP such amount drawn pursuant to Section 18(e) herein.
Contributor and its Members hereby agree to cooperate with FWRLP to properly
transfer ownership rights to such bonds to FWRLP, at the lowest cost and fees
possible. With respect to the Non-cash bonds, but subject to the foregoing
reimbursement obligations from Contributor and its Members, FWRLP agrees to
either (i) replace the contractor as obligor to Commerce Bank to secure any
obligation of the contract or viz-a-viz the
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letters of credit supporting such Non-cash Bonds or (ii) replace the
contractor's letters of credit with those of FWLRP. This covenant shall survive
Closing without limitation.
(ii) Notwithstanding Section 5(i) or any other provision of this
Agreement to the contrary (other than the second sentence of Section 14(a)):
(a) With regard to the title to the Property, FWRLP is relying
solely upon the Policy of Title Insurance currently issued to FWRLP (the "Title
Policy"), plus any additional title insurance to be obtained by FWRLP pursuant
to this Agreement, and any endorsements to the Title Policy to be obtained by
FWRLP, and Contributor makes no representations or warranties whatsoever with
regard to matters of title affecting the Property.
(b) In the event FWRLP does not elect to terminate this
Agreement within the Feasibility Period pursuant to the terms of Section 13,
below, then the representations and warranties made by Contributor in this
Agreement (as well as the specific facts and/or conditions which were the
subject of such representations and/or warranties) shall be deemed modified to
account appropriately for every fact or other matter which came to the attention
of FWRLP, or FWRLP's employees, agents, or representatives, during the course of
the Feasibility Period (other than such fact or matter which was due to the
willful misconduct or bad faith of Contributor), which fact or matter was
inconsistent with the Contributor`s representation(s) or warranty(ies) set forth
herein, it being the intent and agreement of the parties that FWRLP shall not
have the right or ability to claim that the inaccuracy of any representation set
forth herein (provided that such inaccuracy was not due to the willful
misconduct or bad faith of Contributor or its employees agents and/or
representatives) which was actually known to FWRLP (or its employees, agents
and/or representatives) as of the end of the Feasibility Period constitutes
either a default by Contributor or a failure of a condition to Closing
hereunder.
(c) In the event FWRLP elects to consummate the Closing under
this Agreement despite the failure of any of the conditions set forth in Section
8, below which was actually known to FWRLP (or its employees, agents and/or
representatives), including without limitation the failure of any representation
or warranty of the Contributor herein contained to be true and correct as the
time of Closing, then unless Contributor expressly agrees in writing to the
contrary at the time of Closing, FWRLP shall be deemed to have waived any claims
against Contributor arising out of such failure (provided that such failure was
not due to the willful misconduct or bad faith of Contributor), and, in such
event, Contributor shall have no post-Closing liability to FWRLP with respect
thereto.
(d) FWRLP shall not be entitled to assert any claim against
Contributor with respect to the inaccuracy of any representation or warranty
made by Contributor (provided that such inaccuracy was not due to the willful
misconduct or bad faith of Contributor), to the extent such inaccuracy was
actually known to FWRLP, or FWRLP's employees, agents and/or representatives, as
of or prior to the time of Closing and
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FWRLP elects to consummate the Closing under this Agreement, it being the intent
and agreement of the parties that FWRLP shall not have the right or ability to
consummate the Closing and thereafter assert a claim for breach of a warranty or
representation by Contributor which was actually known to FWRLP or its
representatives as of or prior to Closing.
(e) In the event a matter represented by Contributor hereunder
was true as of the date of execution of this Agreement, but subsequently is
rendered inaccurate due to the occurrence of events or due to a cause other than
Contributor `s intentional misconduct or bad faith, or intentional breach of
this Agreement, then such inaccuracy shall not constitute a default by
Contributor under this Agreement, even though the same might constitute a
failure of a condition to the Closing (subject to subsections 5(ii)(b) - (d),
above).
(f) The representations and warranties of the Contributor
contained in this Agreement, or in any certificate, document, instrument or
agreement delivered pursuant to this Agreement, shall survive until one (1) year
after Closing, unless a representation or warranty survives Closing without
limitation as expressly stated elsewhere in this Agreement.
(g) FWRLP shall not have the right to assert any claim against
the Contributors for inaccuracies set forth in Exhibit B and Exhibit C hereto,
to the extent such inaccuracies derive from errors made by First Washington
Management, Inc. ("FWM") in the preparation of such Exhibits (as opposed to
erroneous information or documentation furnished by Contributor to FWM). In
addition, FWRLP shall be imputed any actual knowledge which FWM has with respect
to the matters set forth in this Section 5 of the Agreement.
6. Obligations of Contributor Pending Closing. From and after
the date of this Agreement through the Closing Date, Contributor covenants and
agrees as follows:
(a) Maintenance and Operation of Premises. Contributor will
cause the Property to be maintained in its present order and condition, normal
wear and tear excepted, and will cause the continuation of the normal operation
thereof, and the continuation of the normal practice with respect to maintenance
and repairs so that the Property will, except for normal wear and tear and fire,
casualty and/or condemnation (which are governed by other provisions of this
Agreement), be in substantially the same condition on the Closing Date as on the
Acceptance Date.
(b) Licenses. Contributor shall use all reasonable and
diligent efforts to preserve in force all licenses and permits (collectively,
"Licenses") necessary for the proper operation of the Property and to cause
those expiring to be renewed.
(c) Changes in Representations. Contributor shall notify
FWRLP promptly, and FWRLP shall notify Contributor promptly, if either becomes
aware of any
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occurrence prior to the Closing Date which would make any of its
representations, warranties or covenants contained herein not true in any
material respect.
(d) Obligations as to Leases. Contributor shall not after the
end of the Feasibility Period, without FWRLP's prior written consent which shall
not be unreasonably withheld, conditioned or delayed, amend, modify, renew or
extend any Lease in any respect unless required by law, or enter into new leases
or approve any assignment of leases or subletting of leased space, or terminate
any Lease. Contributor hereby further agrees that if any space is vacant on the
Closing Date, FWRLP shall accept the Property subject to such vacancy, provided
that the vacancy was not permitted or created by Contributor in violation of any
restrictions contained in this Agreement. Prior to Closing, Contributor shall
not apply all or any part of the security deposit of any tenant unless after a
default in accordance with the terms of such tenant's Lease.
7. Representations and Warranties of FWRLP. In order to induce
Contributor to enter into this Agreement and to contribute the Interests to
FWRLP, FWRLP hereby makes the following representations and warranties, each of
which is material and shall survive Closing, notwithstanding any investigation
at any time made by or on behalf of Contributor:
(a) Authority of FWRLP. FWRLP is a limited partnership duly
organized and existing and in good standing under the laws of the State of
Maryland. FWRLP has all necessary power and authority to execute, deliver and
perform this Agreement and consummate all of the transactions contemplated by
this Agreement. This Agreement is the valid and binding obligation of FWRLP,
enforceable against it in accordance with its terms.
(b) No Defaults. Neither the execution of this Agreement nor
the consummation of the transactions contemplated hereby will: (i) conflict
with, or result in a breach of, the terms, conditions or provisions of, or
constitute a default under, any agreement or instrument to which FWRLP or the
REIT is a party, (ii) violate any restriction, requirement, covenant or
condition to which the FWRLP or the REIT is subject, and (iii) constitute a
violation of any applicable code, resolution, law, statute, regulation,
ordinance, rule, judgment, decree or order.
(c) Disclosure Documents. Attached hereto as Exhibit I is a
true and correct copy of the Confidential Information Statement, as supplemented
through the date hereof. The FWRLP Partnership Agreement, as contained in the
Confidential Information Statement, as supplemented through the date hereof, has
not been amended or modified except as provided in Exhibit I.
(d) Disclosure. The Confidential Information Statement, as
supplemented through the date hereof, and including the Appendices thereto, on
the date hereof does not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein,
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in light of the circumstances under which they were made, not misleading. FWRLP
acknowledges that the Contributor is relying upon the confidential information
statement in acquiring the Common Units and Preferred Units.
(e) Financial Information. The financial statements of FWRLP
and the REIT (including the notes thereto) included in the Confidential
Information Statement, as supplemented through the date hereof, present fairly
the financial position of the respective entity or entities presented therein at
the respective dates indicated and the results of their operations for the
respective periods specified, and except as otherwise stated in any such
registration statement or periodic report, such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis. Since the date of the aforementioned financial statements,
there has been no material and adverse change in the financial condition of
either FWRLP or the REIT.
(f) Issuance of Units. The FWRLP Partnership Agreement
provides, or prior to Closing will provide, for the issuance of the Units. The
Units to be issued in connection with the transactions herein contemplated have
been, or prior to the Closing Date will have been, duly authorized for issuance
by FWRLP to Contributor, and on the Closing Date will be validly issued, fully
paid and non-assessable. The Units conform to the description thereof contained
in the Confidential Information Statement, as supplemented through the date
hereof, and such description conforms to the rights set forth in the FWRLP
Partnership Agreement. All issued and outstanding Units were issued in
compliance with or in transactions exempt from the registration provisions of
applicable federal and state securities laws. All shares of stock of the REIT
exchangeable for Units issued in connection with the transactions herein
contemplated will at Closing and at all times thereafter until the time of such
exchange be duly authorized and available for such exchange and upon issuance
will be validly issued, fully paid and non-assessable, and, after the issuance
of such stock pursuant to the terms of an effective registration statement,
shall be unrestricted. All issued and outstanding shares of stock of the REIT
were issued in compliance with or in transactions exempt from the registration
provisions of applicable federal and state securities laws.
(g) Litigation. There is no legal or governmental action or
proceeding pending or, to the knowledge of FWRLP, threatened against FWRLP, the
REIT or any subsidiary before any court or administrative agency which would
result in any material adverse change in the business or financial condition of
FWRLP, the REIT and their subsidiaries, taken as a whole or which would
materially and adversely affect the consummation of any of the transactions
contemplated within this Agreement.
(h) Disposition of Property. Except in connection with a sale
of all or substantially all of FWRLP's assets or a merger or consolidation of
FWRLP, in no event shall FWRLP voluntarily sell or otherwise dispose of the
Property (other than the Pad Site and the Second Pad Site) for a period of five
(5) years following the Closing Date.
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8. Conditions Precedent to Closing.
(a) It shall be a condition precedent of FWRLP's obligation to
make a full settlement hereunder that each and every one of the following
conditions shall exist on the Closing Date:
(i) Representations and Warranties. Subject to the
qualifications set forth in Section 5(ii), above,
Contributor`s representations and warranties hereunder shall
be true and correct in the same manner and with the same
effect as though such representations and warranties had been
made on and as of the Closing.
(ii) Zoning. No proceedings shall have occurred or be
pending to change, redesignate or redefine the zoning
classification of the Property to a more restrictive
classification than presently exists.
(iii) Title. Title to the Property shall be
marketable, good of record, and insurable by the Title Company
at standard rates or less, pursuant to a full coverage ALTA
Form-B (Rev. 1970 and 1984) owner's title insurance policy (or
an unconditional commitment therefor) without any exceptions
("Printed form" or otherwise) other than the Permitted
Exceptions, and in addition, providing affirmative coverage
satisfactory to FWRLP insuring against any mechanic's or
materialmen's lien arising from goods, labor or materials
provided to the Property prior to the Closing Date. The
"Permitted Exceptions" are:
(A) the lien of current real estate taxes and
special assessments not yet due and payable; and
(B) such matters as would be shown by a current
and accurate survey of the Property as of the
Acceptance Date;
(C) all existing zoning, building, land use and
other restrictions upon the Property existing as of
the Acceptance Date;
(D) the Leases;
(E) such other matters which are listed on
Exhibit J hereto, and
(F) such other matters as FWRLP shall approve in
writing.
(iv) Existing Mortgages. Contributor shall have
delivered to the Title Company such releases or other
instruments necessary to release of record and beneficially
any and all existing mortgages, deeds of trust, financing
statements or other security documents affecting the Property
(collectively, the "Existing Mortgages"), other than the FNBM
Loan which may be satisfied at Closing pursuant to Section 2
herein.
(v) Leasing Brokerage/Property Management
Agreements. Contributor shall have terminated any and all
leasing brokerage agreements and property management
agreements with respect to the Property effective as of the
Closing. All responsibility for dealings with any such brokers
and agents, including the payment of any claims (if deemed
warranted by Contributor), shall be the sole responsibility of
Contributor, except if and to the extent such claims are
expressly assumed by FWRLP in writing or pursuant to Section
2(f) herein. Contributor agrees that they will indemnify and
hold FWRLP, its successors, assigns, partners, agents and
employees, harmless against any such claims and/or losses
which might be incurred by such indemnitees in connection with
any additional and/or contingent leasing commissions or fees
or management fees. The provisions of this subparagraph (v)
shall survive Closing without limitation.
(vi) Performance by Contributor. Contributor shall
have complied with and not be in breach of any of its
covenants or obligations under this Agreement, which breach
remains continuing for a period of thirty (30) days after
FWRLP provides Contributor with written notice specifying such
breach (provided that the Closing Date shall be extended by
the lesser of (i) such 30-day period or (ii) the actual number
of days which it takes for the Contributor to cure any such
breach, if any such breach is in existence as of the date the
parties otherwise intend to consummate the Closing).
(vii) Tenant Estoppels. FWRLP shall have received a
tenant estoppel letter in the form attached hereto as Exhibit
F (except that in the case of Super Fresh the form of estoppel
letter will be governed by the Tenant's Lease) from, at a
minimum, tenants satisfying the requirements described on
Exhibit F-1 (or from such tenants and in such form as required
by FWRLP's mortgage lender), confirming the information set
forth in the Rent Schedule attached as Exhibit B hereto for
such tenants and containing no material changes from the Rent
Schedule, and any subordination and attornment agreements
required by the mortgage lender of FWRLP.
If FWRLP elects to consummate Closing notwithstanding a failure of any of the
foregoing conditions, then the provisions of Section 5(ii)(c), above, shall be
applicable.
(b) Failure of Condition. In the event of the failure by the
Closing Date of any condition precedent set forth above, then FWRLP, at its sole
election, may (a) terminate this Agreement, in which event the Deposit and any
interest thereon shall be returned to FWRLP and, except as otherwise provided in
Section 16 hereof, neither party shall have any further obligations or
liabilities to the other; or (b) proceed to
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Closing, in which event FWRLP will be deemed to have waived any claim it
otherwise might have against Contributor by virtue of such failure of condition,
unless such failure of condition was due to the willful misconduct or bad faith
of Contributor; or (c) extend the Closing Date for such reasonable time period
as may be determined by FWRLP (but in no event for more than three (3) months
from the Closing Date then in effect) in order to permit the satisfaction of any
condition precedent not so fulfilled.
(c) It shall be a condition precedent of the Contributor`s
obligation to make a full settlement hereunder that each and every one of the
following conditions shall exist on the Closing Date, or shall occur
simultaneously with the deliveries to be made by Contributor pursuant to Section
9, below:
(i) Representations and Warranties. FWRLP's
representations and warranties hereunder shall be true and
correct in all material respects as though such
representations and warranties had been made on and as of the
Closing (except that FWRLP may amend its Partnership Agreement
prior to Closing provided it does not materially adversely
affect Contributor).
(ii) Release of Guarantors. Unless the FNBM Loan is
repaid in full as of the Closing Date, FWRLP shall have caused
FNBM to execute and deliver to Xxxxx XxXxxxx, Xxx Xxxxxxx and
Xxxxxxx Xxxxxxx (collectively, the "Loan Guarantors") a
complete and unconditional release of the Contributor and all
existing Guaranties of the FNBM Loan to which the Loan
Guarantors are bound, including without limitation the
"Guaranty of Payment" and the "Guaranty of Completion" dated
December 28, 1995 which was executed and delivered by the Loan
Guarantors in favor of FNBM.
(iii) [Intentionally Omitted]
(iv) [Intentionally Omitted]
(v) Issuance of Units. FWRLP shall have issued to
the Contributor (or its Members) the Common Units and/or
Preferred Units required to be issued pursuant to Section
2(a)(i) and, if applicable, Section 2(d) of this Agreement,
and the Contributor (or its Members) shall have been admitted
to FWRLP as a limited partner pursuant to Section 12.2 of the
FWRLP Partnership Agreement.
(vi) [Intentionally Omitted]
(vii) Tax Opinion of Saul, Ewing, Xxxxxx & Xxxx.
The Contributor shall have received an opinion from Saul,
Ewing, Xxxxxx & Xxxx, regarding the tax treatment of the
transaction evidenced by this
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Agreement, which is in form and substance satisfactory to the
Contributor in its sole discretion.
(viii) Performance by FWRLP. FWRLP shall have
complied with, and not be in breach of, any of its covenants
or obligations under this Agreement, which breach remains
continuing for a period of thirty (30) days after Contributor
provides FWRLP with written notice specifying such breach
(provided that the Closing Date shall be extended by the
lesser of (i) such 30-day period or (ii) the actual number of
days which it takes for FWRLP to cure any such breach, if any
such breach is in existence as of the date the parties
otherwise intend to consummate the Closing).
(d) Each of the parties hereto shall use all reasonable and
diligent efforts to cause the satisfaction of each condition to closing which is
within the control of such party.
9. Contributor`s Deliveries. Contributor shall execute,
acknowledge and deliver to FWRLP at the Closing the following documents, each
dated on the Closing Date:
(a) a special warranty deed, in form and substance
satisfactory to FWRLP, and Title Company, conveying good and marketable fee
simple title to the Property;
(b) a xxxx of sale which shall convey to FWRLP good
title to all the Property, free and clear of all liens and encumbrances;
(c) [Intentionally Omitted]
(d) an assignment and assumption of the Leases, together
with all originally executed Leases, and the security deposits shall be paid to
FWRLP;
(e) an assignment of Licenses and Service Contracts, if any,
which are to be assumed by FWRLP at FWRLP's request, together with the
originally executed Service Contracts which are to be assumed, and any
warranties;
(f) a schedule updating the Rent Schedule for the
Property and setting forth all arrearages in rents and all prepayments of
rents;
(g) copies of books, records, operating reports, files and
other materials related to the ownership, use and operation of the Property, to
the extent that any exist and are in the possession of Contributor, which
obligation shall survive Closing;
(h) such documents as are reasonably required by FNBM to
permit FWRLP to assume the FNBM Loan;
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(i) an original letter executed by Contributor advising the
tenants of the Property of the contribution of the Property to FWRLP and
directing that rents and other payments thereafter be sent to FWRLP or as FWRLP
may direct;
(j) possession of the Property in the condition required
by this Agreement, and the keys therefore;
(k) the Certification of Non-foreign Status from
Contributor and as provided in Treas. Reg. 1.1445-2T(b)(2)(iii)(B) or in any
other form as may be required by the Internal Revenue Code or the regulations
issued thereunder;
(l) such other items and instruments as shall be required by
the Title Company in connection with the issuance of its title insurance policy
and/or endorsements to FWRLP pursuant to Section 8(a)(iii) (including customary
owner's affidavit, if required) or as shall be reasonably requested by counsel
to FWRLP and consistent with the terms of this Agreement;
(m) any and all documents necessary to release the cash
constituting the Deposit from escrow with the Title Company and to have said
cash returned to FWRLP;
(n) an amendment to the Partnership Agreement of FWRLP, in a
form acceptable to FWRLP, admitting the Contributor (or the Members receiving
Units, if applicable) as a limited partner(s) of FWRLP and issuing such Common
Units and/or Preferred Units as set forth on Exhibit M hereto;
(o) an assignment of the hedge cap on the one month
LIBOR, with a notional amount of $6,200,000.00 and a strike of nine percent
(9%); and
(p) any other documents required by this Agreement to
be delivered by Contributor.
10. FWRLP's Performance. At Closing, simultaneously with the deliveries
of Contributor pursuant to the provisions of Section 9 above, FWRLP shall
satisfy each of the conditions stated in Section 8(c), above, including
subsections 8(c)(ii) and (vi), above, and issue to Contributor (or its Members)
certificates evidencing the Units in the manner specified in Section 2 and any
cash required under Section 2, whereupon the Deposit, and any interest accrued
thereon, shall be returned to FWRLP by the Title Company.
11. Settlement Charges; Prorations and Adjustments.
(a) At or before Closing, FWRLP shall (i) pay all charges for
the title examination, the title insurance premium, notary fees and other such
charges incident to Closing, (ii) pay all transfer and recording fees and taxes
and documentary stamps associated with the financing of this transaction by
FWRLP, (iii) pay all of FWRLP's
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legal fees related to the preparation of this Agreement and the preparation of
all documents required to settle the transaction contemplated hereby, or
otherwise incurred by FWRLP in connection herewith, (iv) pay all Development
Expenses assumed by FWRLP under Section 2(f) above, to the extent then due and
payable, and (v) pay all transfer and recording fees and taxes and documentary
stamps associated with the transfer of the Property other than those described
in clause (ii) above (the amount described in clause 11(a)(v), above being
referred to in this Agreement as the "Closing Costs").
(b) Return on Xxxxxx/Xxxxxxx Advance. FWRLP shall pay
interest at a rate of 9% per annum to Xxxxxx/Thomson on the Xxxxxx/Xxxxxxx
Advance due Xxxxxx/Thomson from March 1, 1997 to the Date of Funding.
(c) At the Closing, the following adjustments and prorations
shall be computed as of Xxxxx 0, 0000 (xx being agreed that March 1, 1997 shall
be the effective date of the Closing irrespective of the actual date upon which
Closing occurs).
(i) Taxes. Real estate and personal property
taxes shall be apportioned as of March 1, 1997.
(ii) Assessments. All special assessments and other
similar charges which have become or may become a lien upon
the Property or any part thereof as of March 1, 1997, whether
or not the same are then past due or are payable thereafter
(in installments or otherwise), or which have been confirmed
by a public authority as of Closing, shall be paid by
Contributor in full at Closing (or apportioned in favor of
FWRLP pursuant to this Section 11(c).
(iii) Rent. Rent shall be apportioned as of March 1,
1997, and Rent for the month of Closing and thereafter which
was collected by the Contributor prior to the actual Closing
Date shall be apportioned in favor of FWRLP. If any tenant is
in arrears in the payment of rent on the Closing Date, rents
received from such tenant after the Closing shall be applied
in the following order of priority: (a) first, to the payment
of current rent then due; (b) second, to delinquent rent for
any period after the Closing Date; and (c) third, to
delinquent rent for any period prior to the Closing Date.
FWRLP shall either use reasonable and diligent efforts to
collect (at no cost to FWRLP), or shall assign the right to
collect arrearages in rents due from tenants as of the Closing
Date to the Contributor. If rents or any portion thereof
received by Contributor or FWRLP after the Closing Date are
payable to the other party by reason of this allocation, the
appropriate sum, less a proportionate share of any reasonable
attorneys' fee, costs and expenses of collection thereof, (if
any) shall be promptly paid to the other party, which
obligation shall survive the Closing.
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If any tenants are required to pay
percentage rents, escalation charges for real estate taxes,
operating expenses, cost-of-living adjustments or other
charges of a similar nature ("Additional Rents") and any
Additional Rents are collected by FWRLP after the Closing
which are attributable in whole or in part to any period prior
to March 1, 1997, then FWRLP shall promptly pay to Contributor
its proportionate share thereof, less a proportionate share of
any reasonable attorneys' fees, costs and expenses of
collection thereof, (if any) if and when the tenant paying the
same has made all payments of rents and Additional Rents then
due to FWRLP pursuant to the tenant's Lease, which obligation
shall survive the Closing.
Notwithstanding the foregoing:
(A) Prepaid rent shall be pro rated as of March 1,
1997.
(B) Contributor shall receive a credit at Closing
for accounts receivable from Tenants through February 28, 1997
in the total amount of $32,323.76. If any of such accounts
receivable are not collected from such tenants, then
Contributor (and its Members) shall reimburse FWRLP for such
uncollected amounts pursuant to Section 18(e) herein.
(C) Except as set forth in clause (B) above,
Contributors shall not receive any credit at Closing for
uncollected rents for the for months prior to the month of
March 1, 1997.
(D) [Intentionally Omitted]
(E) [Intentionally Omitted]
(F) With respect to any pass-throughs of operating
expenses, real estate taxes or insurance premiums due from any
tenant (except for those tenants in clause (B) above) at the
Property under its lease, but not payable by such tenant until
an accounting is rendered to such tenant after year end, and
any such amounts are payable on account of a period of time
prior to March 1, 1997 (other than those from any tenant who
is more than 60 days delinquent in payment of rent at the
Closing or from any tenant listed in clause (B) above), FWRLP
shall pay over to Contributor Contributor`s pro rata share
thereof (less a pro rata share of any cost of collection or
bad debts) within fifteen (15) days of receipt by FWRLP, but
only if and to the extent received by FWRLP.
(iv) Debt Service on FNBM Loan. If the FNBM Loan is
not repaid at Closing, the amount of interest payable under
the FNBM Loan from and after March 1, 1997 shall be paid by
FWRLP or shall otherwise be apportioned in favor of the
Contributor at Closing.
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(v) Cash Bonds. FWRLP will credit to
Contributor the amount of $5,172.12 at Closing, as replacement
for the Cash Bonds.
(vi) Miscellaneous. All other charges and fees
customarily prorated and adjusted in sales transactions of
operating properties, including utilities, insurance premiums
and charges for Service Contracts, shall be prorated as of
March 1, 1997. In the event that accurate prorations and other
adjustments cannot be made at Closing because current bills
are not obtainable or the amount to be adjusted is not yet
ascertainable (as, for example, in the case of utility bills)
the parties shall prorate on the best available information,
subject to further adjustment promptly upon receipt of the
final xxxx or upon completion of final computations. Any
adjustment which requires a payment by Contributor to FWRLP
shall be paid in accordance with Section 18(e). Contributor
agrees that an appropriate amount in respect of water
consumption charges may be held in escrow by the Title Company
in connection with its issuance of a title insurance policy to
FWRLP as of March 1, 1997. Contributor shall use its best
efforts to have all utility meters read on March 1, 1997 so as
to accurately determine its share of current utility bills.
12. Risk of Loss. The risk of loss or damage to the Property by fire or
other casualty shall be borne by Contributor until Closing, provided that
Closing under this Agreement in fact occurs. If prior to Closing (i)
condemnation proceedings are commenced against all or any material portion of
the Property, or (ii) if the Property is damaged by fire or other casualty to
the extent that the cost of repairing such damage shall be Two Hundred Thousand
Dollars ($200,000.00) or more, or (iii) if the Property is damaged by an
uninsured risk; or (iv) if the Property becomes subject to litigation which may
deprive FWRLP of any material benefit to which it would become entitled pursuant
to this Agreement, then FWRLP shall have the right, upon notice in writing to
the Contributor delivered within thirty (30) days after actual notice of such
condemnation or fire or other casualty or litigation, and in all events prior to
the Closing Date to terminate this Agreement, and thereupon the parties shall be
released and discharged from any further obligations to each other and the
Deposit shall be refunded to FWRLP. If FWRLP fails to send such notice within
such 30-day period (time being of the essence) FWRLP shall be deemed to have
elected not to terminate this Agreement. If FWRLP does not elect to terminate
this Agreement or in the event of fire or other casualty not giving rise to a
right to terminate this Agreement by FWRLP, FWRLP shall be entitled to an
assignment of all of Contributor`s share of the proceeds of fire or other
casualty insurance and rent insurance proceeds payable with respect to the
period after Closing or of the condemnation award, as the case may be, and
Contributor shall have no obligation to repair or restore the Property;
provided, however, that the Unit portion of the Consideration shall be reduced
by an amount equal to the sum of (a) the "deductible" applied by the
Contributor's insurance policy, or (b) if the Contributor is self-insured, the
cost of repairing such damage. If FWRLP does not elect to terminate
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this Agreement as aforesaid, FWRLP shall have the right to participate in the
negotiation and settlement of any casualty or condemnation-related claim.
13. Inspection of Property.
(a) FWRLP's Right of Inspection. FWRLP shall have the right,
at its own risk, cost and expense, at any time or times prior to Closing, to
enter, or cause its agents or representatives to enter, upon the Property for
the purpose of making surveys, or any tests, investigations and/or studies
relating to the Property which FWRLP deems appropriate, in its sole discretion,
during reasonable hours and upon reasonable notice to Contributor. FWRLP shall
further have complete access to all documentation, agreements and other
information in the possession of Contributor related to the ownership, use and
operation of the Property, to the extent it is readily available to Contributor,
and shall have the right to make copies of same. FWRLP agrees to repair any
damage to the Property that may be caused by its inspections and to indemnify
and defend Contributor and hold Contributor harmless against any injury, loss or
damage suffered upon the Property as a result of such inspections.
(b) Feasibility Period. Any other provisions of this Agreement
to the contrary notwithstanding, FWRLP may cause at FWRLP's sole cost and
expense, such boring, engineering, economic, water, sanitary and storm sewer,
utilities, topographic, structural, environmental and other tests,
investigations, market studies and other studies as FWRLP shall elect. In the
event that any of such tests, investigations and/or studies indicate, in FWRLP's
sole discretion, that FWRLP's plans for the Property would not be feasible, then
FWRLP shall have the right, at its sole election on or before the date which is
thirty (30) days after the Acceptance Date (such period herein referred to as
the "Feasibility Period"), to terminate this Agreement by giving written notice
thereof to Contributor, in which event this Agreement shall terminate, the
Deposit shall be returned to FWRLP and neither party shall have any further
liabilities or obligations to each other.
FWRLP agrees to use all reasonable and diligent efforts to
minimize disruption to business operations within the Property during the course
of any entries thereupon. In addition, in making any entries onto the Property,
or otherwise conducting its due diligence activities pursuant to this Agreement:
(i) FWRLP agrees to notify Contributor prior to making any entry onto the
Property which is not within the scope of the ordinary property management
functions of its affiliate property management company; (ii) FWRLP shall obtain
and maintain commercial general liability insurance, covering FWRLP with respect
to any third party claims for injury or damage to property, and injury or death
to persons, occurring during the course of any entry by FWRLP or its employees,
agents, contractors and/or representatives upon the Property; (iii) all entries
by FWRLP shall be conducted, to the extent possible, at times calculated to
minimize disruption to shopping center operations; (iv) all such entries shall
be made at FWRLP 's sole risk and expense; (v) any intrusive testing by FWRLP
(such as soil borings, and the like) shall be subject to the Contributor's
reasonable consent; (vi) in the event FWRLP elects to terminate this Agreement
prior to the expiration of the
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Feasibility Period, or does not consummate Closing thereafter, FWRLP agrees to
return to the Contributor, upon the termination of this Agreement, all written
reports, studies, title materials, surveys, environmental reports, as well as
all copies of documents theretofore delivered to FWRLP in connection with its
due diligence activities, with no charge to the Contributor; and (vii) FWRLP
agrees that the election by FWRLP not to terminate this Agreement pursuant to
this Section 13, whether deemed or otherwise, shall constitute FWRLP 's
acceptance, as exceptions to title, of all matters of record as of the
Acceptance Date.
(c) Audit. Contributor hereby agrees to allow books and
records related to the Property to be audited (at FWRLP's sole expense) by an
independent, certified public accounting firm selected by FWRLP, and Contributor
will cooperate and cause its employees and other agents to cooperate in such
auditing process. FWRLP shall provide Contributor with prior notice of such
audit.
(d) FWRLP acknowledges that all records and information
received by it pursuant to this Agreement relating to the Property constitutes
proprietary and sensitive business information of the Contributor, and FWRLP
accordingly agrees to keep all such information confidential, and not to
disclose any such information to any third parties except (A) to its affiliates
and their employees, attorneys, financial advisors, lenders accountants and
auditors and other consultants, (B) pursuant to compulsion by due process of
law, (C) in connection with the resolution of any dispute between FWRLP and the
Contributor, or (D) if such information was obtained, or is otherwise available,
in the public domain or from other sources.
14. Indemnifications.
(a) Indemnification by Contributor. Subject to Section 5(ii),
the Contributor hereby indemnifies and agree to defend and hold harmless FWRLP
and its partners and subsidiaries and any officer, director, employee, agent of
any of them, and their respective successors and assigns from and against any
and all claims, expenses, costs, damages, losses and liabilities (including
reasonable attorneys' fees) which may at any time be asserted against or
suffered by any indemnitee, the Property, or any part thereof, whether before or
after Closing, as a result of, on account of or arising from (a) any breach of
any covenant, representation, warranty or agreement on the part of the
Contributor made herein or in any instrument or document delivered pursuant to
this Agreement, and/or (b) any claim relating to or arising out of any contract,
agreement or other obligation to which the Company was a party or any claim
relating to any encumbrance or other occurrence prior to Closing, (exclusive of
the documents evidencing the FNBM Loan) provided (and solely to the extent) such
claim is derived from an occurrence or breach which took place prior to Closing,
and solely to the extent such claim is not within the scope of any insurance
and/or indemnity agreement in favor of FWRLP (and FWRLP will look to any such
insurance and /or indemnity agreement(s) in connection with any such insured or
indemnified claims to the extent actually covered by such insurance and/or
indemnity agreement). Notwithstanding any other provision of this Agreement to
the contrary, the liability of the Contributor, or its Members, to
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FWRLP and its successors and assigns with respect to or arising out of this
Agreement, any indemnities set forth herein, any documents delivered pursuant
hereto, and/or any of the transactions contemplated herein, shall be limited to
the right, title and interest of Contributor or the Members in the Units issued
to the Contributor (or its Members) pursuant to Section 2 of this Agreement, and
such liability shall be satisfied solely out of the sale or redemption of such
Units by FWRLP in levy upon or set off against the right, title and interest of
the Contributor (or its Members) therein, and in any distributions payable
pursuant thereto, except and solely to the extent the Units so issued have been
exchanged by the Contributor (or its Members) for REIT Shares or sold or
otherwise transferred by the Contributor (or its Members), in which event such
liability may be satisfied out of any assets of the Contributor or the Members,
subject to a maximum limitation of liability equal to the market value of the
Units (i.e., the number of Units multiplied by the closing price on the NYSE of
the respective Common Stock or Preferred Stock into which the Units are
exchangeable) issued to such Contributor (or its Members) as of Closing. Any
indemnification of FWRLP by the Contributor or its Members shall survive Closing
for a period of three (3) years (other than indemnification for breach of the
securities representations set forth in Section 5(i)(r) hereof which shall
survive Closing without limitation and other than indemnification for breach of
other representations or warranties pursuant to clause (a) of the first sentence
of this Section 14(a) which are subject to a limited survival period under this
Agreement (Section 5 (ii) (f)), in which case the survival of such
indemnification shall be limited to the survival period, if any, of such
representation or warranty).
(b) Indemnification by FWRLP and the Company. FWRLP hereby
indemnifies and agrees to defend and hold harmless Contributor and its Members
and their successors and assigns from and against any and all claims, expenses,
costs, damages, losses and liabilities (including reasonable attorneys' fees)
which may at any time be asserted against or suffered by Contributor or its
Members as a result of, on account of or arising from (a) any breach of any
covenant, representation, warranty or agreement on the part of FWRLP made herein
or in any instrument or document delivered pursuant to this Agreement, and/or
(b) any obligation, claims, suit, liability, contract, agreement, debt or
encumbrance or other occurrence created, arising or accruing on and after the
Closing and relating to the Property or its operations.
15. Brokerage Commission. Contributor and FWRLP represent and warrant
to each other that no brokerage fee or real estate commission is or shall be due
or owing in connection with this transaction, and Contributor and FWRLP hereby
indemnify and hold the other harmless from any and all claims of any other
broker or agent so claiming based on action or alleged action of the other.
16. Default Provisions; Remedies.
(a) FWRLP's Default. If FWRLP fails to consummate the
Contribution contemplated herein when required to do so pursuant to the
provisions hereof, then the Title Company shall deliver the Deposit to
Contributor as full and complete liquidated damages, and as the exclusive and
sole right and remedy of Contributor, whereupon
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this Agreement shall terminate and neither party shall have any further
obligations or liabilities to any other party. The foregoing notwithstanding,
(i) if FWRLP disputes any certification by the Contributor to the Title Company
that the Contributor is entitled to delivery of the Deposit due a default by
FWRLP hereunder and if Contributor is the prevailing party in any such dispute,
then in addition to recovery of the Deposit due to such default by FWRLP, the
Contributor shall also be entitled to recover from FWRLP all reasonable
attorneys fees and court costs incurred by the Contributor to enforce its rights
and remedies under this Agreement; and (ii) any indemnification of the
Contributor by FWRLP pursuant to this Agreement (such as, but not limited to,
FWRLP's indemnity under Section 13(a) hereof), shall survive any such
termination of this Agreement and shall not be affected thereby. The foregoing
exclusive remedy applies solely to FWRLP's failure to consummate the
Contribution contemplated herein, and shall not apply to limit any right or
remedy available to the Contributor in the event of FWRLP's violation of its
post-closing obligations hereunder, including but not limited to FWRLP's
post-closing obligations under Section 14(b) and Section 18 hereof.
(b) Contributor`s Default. Except for any breaches waived in
writing by FWRLP, if Contributor has breached any of its covenants or
obligations under this Agreement or have failed, refused or are unable to
consummate the Contribution contemplated herein by the Closing Date or if any of
the representations and warranties made by Contributor under this Agreement
shall be inaccurate or incorrect, then FWRLP shall be entitled as its sole and
exclusive remedy to (i) (A) waive such breach, default or failure and proceed to
Closing, (B) terminate this Agreement and obtain the return of the Deposit, or
(C) pursue an action for specific performance, or (ii) extend the Closing for
such reasonable time or times (not to exceed 3 months) as may be necessary in
order to enable Contributor to remedy such breach, default or failure, and if
not so remedied by the end of such extension period (if FWRLP elects such
extension), FWRLP shall have the choice of remedies set forth in clause (i)
above. In the event that FWRLP elects to pursue an action for specific
performance and FWRLP prevails in such action, in addition to any relief awarded
to FWRLP, Contributor shall be obligated to pay all reasonable legal fees, costs
and expenses incurred by FWRLP. The foregoing exclusive remedy applies solely to
Contributor`s failure to consummate the Contribution contemplated herein, and
shall not apply to limit any right or remedy available to FWRLP in the event of
Contributor`s violation of its post-closing obligations hereunder, including but
not limited to Contributor`s post-closing obligations under Section 14(a) and
Section 18 hereof.
17. Registration Rights.
Contributor, the Members and the REIT hereby agree to execute
at Closing the Registration Rights Agreement attached hereto as Exhibit N.
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18. Guaranty.
(a) Rent Guaranty.
(i) Term of Guaranty. The period from Closing
through February 28, 2000 is defined as the "Rent Guaranty
Period." Subject to the limitation specified in Section
18(a)(iv) below, Contributor and its Members hereby
(severally, as described in Section 18(c), below) guarantee to
FWRLP (the "Rent Guaranty") during the Rent Guaranty Period
the payment of the amount of any monthly deficiency or
difference (the "Rent Deficiency") between (A) the aggregate
Rent (as defined below) due and payable for each month (or
portion thereof) with respect to the Tenant Space (defined as
those spaces described in Exhibit K hereto) less $34,000 as an
overall annual vacancy factor, and (B) the aggregate amount of
such Rent actually received by FWRLP with respect to such
Tenant Space.
(ii) Computation of Rent. "Rent", as used
herein, shall be computed on a triple-net basis and as to
the Tenant Space described in Exhibit K shall consist of the
sum of:
(A) a monthly base rent for the Tenant
Space, derived from the annual base rents specified
in Exhibit K; plus,
(B) a pro rata share for the Tenant Spaces
which are vacant as of Closing of all estimated
taxes, insurance and common area maintenance expenses
of the Property, including but not limited to
management fees calculated at a rate of 5% of gross
rents, and other incidental costs of managing the
Property. Such operating expenses are currently
estimated to be approximately Three and 00/100
Dollars ($3.00) per square foot of rentable area per
year; plus,
(C) a pro rata share for the Tenant Spaces
which were leased as of Closing of all estimated
taxes, insurance and common area maintenance expenses
of the Property, including but not limited to
management fees and other incidental costs of
managing the Property, but only to the extent such
amounts are recoverable under the terms of the leases
executed with respect to such spaces as of Closing.
(iii) Records Regarding Rent Guaranty. FWRLP
shall provide Contributor with quarterly accounting of rent
collection on the Tenant Space.
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(iv) Limitation of Liability. Anything in this
Section 18(a) to the contrary notwithstanding, (A) the Rent
Guaranty obligation for the first year of the Rent Guaranty
Period shall be limited to a maximum aggregate amount equal to
the product of $1.95 times the total number of Common Units to
be issued to Contributor (or its Members) hereunder (prior to
any election to receive Preferred Units in place of Common
Units), (B) the Rent Guaranty obligation for the second year
of the Rent Guaranty Period shall be limited to a maximum
aggregate amount equal to 75% of the product of $1.95 times
the total number of Common Units to be issued to Contributor
(or its Members) hereunder (prior to any election to receive
Preferred Units in place of Common Units), and (C) the Rent
Guaranty obligation for the third year of the Rent Guaranty
Period shall be limited to a maximum aggregate amount equal to
50% of the product of $1.95 times the total number of Common
Units to be issued to Contributor (or its Members) hereunder
(prior to any election to receive Preferred Units in place of
Common Units).
(v) Leasing and Collection Efforts. FWRLP shall use
reasonable and diligent efforts to lease the Tenant Space on
terms and conditions acceptable to FWRLP, and to collect Rent
from all tenants within the Tenant Space on a timely basis. In
the event that Contributor or any of its Members procures a
bona fide, creditworthy tenant for any Tenant Space whose
proposed use of the Tenant Space is compatible with the other
tenants at the Property in FWRLP's sole but reasonable
judgement and such tenant has entered into a bona fide letter
of intent for such Tenant Space with a base rent (on a triple
net basis) equal to or greater than the base rent set forth
for such Tenant Space in Exhibit K hereto, but FWRLP rejects
such tenant, then the Rent Guaranty with respect to such
Tenant Space shall terminate until such time that any
subsequent tenant of such Tenant Space ceases paying rent
therefor during the Rent Guaranty Period; provided, however,
that if the proposed base rent payable by such bona fide
tenant is not more than five percent (5%) less than the base
rent set forth for such Tenant Space in Exhibit K hereto, then
the Rent Guaranty with respect to such Tenant Space shall not
terminate, but rather Contributor shall be deemed to receive a
credit against the Rent Guaranty with respect to the rent
otherwise due and payable for such Tenant Space as set forth
in Exhibit K until a subsequent tenant of such Tenant Space
ceases to pay rent therefor.
(vi) In the event that FWRLP leases the Pad Site, the
Rent Guaranty set forth in this Section 18, shall include a
guarantee of net rent (i.e., net of leasing commissions in
excess of $30,000, tenant improvements and/or allowances,
etc.) for the Pad Site of $50,000 per annum (or $4,166.67 per
month) commencing on the issuance of the Units to Contributor
pursuant to Section 2(a)(ii)(B) herein and ending on February
28, 2000. In the event that Contributor or any of its Members
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procures a bona fide, creditworthy tenant for the Pad Site
whose proposed use of the Pad Site is compatible with the
other tenants at the Property in FWRLP's sole but reasonable
judgment and such proposed tenant enters into a bona fide
letter of intent to lease such Pad Site and either (i) such
Tenant enters into a Ground Lease on terms acceptable to FWRLP
which produces a net effective annual base rent of at least
$50,000 per annum, or (ii) such Tenant enters into a Lease of
the Pad Site which requires FWRLP to construct the building
thereon at FWRLP's expense and the net effective annual base
rent is at least the sum of $50,000 plus 12.5% times the
aggregate cost of constructing the building on the Pad Site
(hard and soft costs), but FWRLP rejects such tenant, then the
Rent Guaranty with respect to the Pad Site only shall
terminate. In addition, upon any bona fide sale of the Pad
Site by FWRLP to a third party, then the Rent Guaranty with
respect to the Pad Site only shall terminate upon the closing
of such sale.
(b) Fit-Up/Leasing Guaranty.
(i) Reimbursement. Contributor and its Members shall
(severally, as described in Section 18(c), below) reimburse
FWRLP (A) up to $5.00 per square foot [on a rolling average
basis, (e.g., if a lease for 2,000 square feet provides for a
$3.00 per square foot tenant improvement allowance, then
another lease for 2,000 square feet may provide for up to
$7.00 per square foot tenant improvement allowance, etc.)] for
any costs, expenses or allowances incurred by FWRLP in
connection with tenant improvements or tenant allowances
funded by FWRLP pursuant to any leases for the Tenant Space
executed during the Rent Guaranty Period, and (B) leasing
commissions and fees in an amount of up to 3% of the aggregate
value of the base rent (up to FWRLP's pro forma base rent for
such Tenant Space) payable under new leases (up to a maximum
term of 5 years) payable by FWRLP pursuant to any leases for
the Tenant Space executed during the Rent Guaranty Period.
(ii) Certain Statements from Operating Partnership.
When FWRLP is due to pay any such costs, expenses or
allowances or leasing commissions or fees described in Section
18(b)(i) above, FWRLP shall present the Contributors and its
Members with a statement setting forth the costs, expenses or
allowances incurred by FWRLP in connection with such tenant
improvements or tenant allowances funded by FWRLP and/or
leasing commissions.
(iii) Final Payments. If any Tenant Space was
occupied as of Closing, or at any point during the Rental
Guaranty Period and such space is vacant at the expiration of
the Rent Guaranty Period, then Contributor and its Members
shall pay to FWRLP, pursuant to Section 18(e), an amount equal
to: (i) $5.00 per square foot for such vacant
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Tenant Space, plus (ii) 3% of the aggregate value of a 5-year
lease on such vacant Tenant Space assuming an annual rental
rate for each such space set forth under Year 3 on Exhibit K
hereto.
(iv) Quarterly Accounting. FWRLP shall provide
Contributor with a quarterly accounting of all amounts payable
to FWRLP pursuant to this Agreement with respect to the Tenant
Space (space by space), and such amounts shall be reimbursed
to FWRLP pursuant to Section 18(e) herein.
(c) Collection of Guarantied Amounts.
(i) [Intentionally Omitted]
(ii) Units. In connection with the obligations of the
Contributor (and its Members) pursuant to Sections 18 (a) and
(b) above, Contributor and its Members hereby absolutely
assign to FWRLP the distributions/dividends payable to
Contributor and its Members by FWRLP with respect to
Contributor`s and its Members' Units. Recourse for
Contributor`s and its Members' liability pursuant to this
Agreement may be taken against such distributions/dividends,
provided, however, if the Units are reduced pursuant to the
exercise of the exchange rights contemplated hereby or
otherwise, then Contributor and its Members shall deliver to
FWRLP cash or an irrevocable and unconditional letter of
credit (in form and from a financial institution reasonably
acceptable to FWRLP) in an amount of (i) $5.86 per Common Unit
reduced and $7.32 per Preferred Unit reduced, if such
reduction occurs during the first year after Closing, (ii)
$3.90 per Common Unit reduced and $4.88 per Preferred Unit
reduced, if such reduction occurs during the second year after
Closing, and (iii) $1.95 per Common Unit reduced and $2.44 per
Preferred Unit reduced, if such reduction occurs during the
third year after Closing, to be held in escrow by FWRLP to
secure the Rent Guaranty and Fit- Up/Leasing Guaranty of
Contributor and its Members hereunder. FWRLP shall place any
escrow in an interest-bearing account at a federally-insured
institution reasonably acceptable to Contributor within three
(3) days after receipt thereof, and interest thereon shall
become part of the escrow for all purposes herein. Contributor
and its Members authorize FWRLP and its agents to pay directly
to FWRLP from such distributions/dividends or escrow all
amounts payable by Contributor and its Members to FWRLP
pursuant to this Section 18 or as otherwise provided for in
this Agreement. If the amount in any cash escrow established
under Section 18(b)(i) with respect to fit-up and commissions
for Tenant Space which was vacant as of the Closing Date
exceeds the maximum unfunded liability of the Contributor and
its Members with respect to such vacant space under Section
18(b)(i), FWRLP shall distribute the excess amount to the
Contributor (the calculation for which shall be made when the
last such vacant space is leased or at the expiration of the
Guaranty Period). If current distributions from FWRLP
-30-
exceed the amounts then payable by Contributor and its Members
to FWRLP, then the excess will be paid to Contributor and its
Members. If current distributions from FWRLP are less than the
amounts then payable by Contributor and its Members to FWRLP,
then such current distributions shall be paid in their
entirety to FWRLP and payment of the remainder of the amounts
payable by Contributor and its Members to FWRLP shall be
deferred until the subsequent distribution(s). All guaranty
payments due from the Contributor and its Members under
Sections 18(a) and 18(b), above, shall be collected solely by
impounding or setting off against distributions/dividends
payable with respect to the Units to be issued to the
Contributor (or its Members) under this Agreement (or from the
cash escrow established under this Section 18(c) with respect
to such Contributor or its Members who exercised the exchange
rights contemplated hereby and by the Partnership Agreement of
FWRLP), and such collection shall be effected solely on a pro
rata basis against the Contributor's or its Member's
distributions or escrow (so that the foregoing guaranties
will, in effect, be "several" (and not joint) guaranties by
each Member of the Contributor for his, her or its pro rata
share of the total guaranty obligation of the Contributor and
its Members' under this Section 18). The Contributor and each
of its Members authorizes FWRLP to exercise such pro rata
right of collection against such Contributor's and its
Members' distributions/dividends and/or cash escrows under
circumstances where FWRLP is entitled to payment of sums from
the Contributor under the Guaranties set forth in Sections
18(a) and 18(b), above or as otherwise provided for in this
Agreement. To the extent that a tenant of a Tenant Space
forfeits a security deposit, the same shall be applied by
FWRLP to rent in arrears before impounding or collecting
against the Contributor's (or its Members) Unit distributions
or escrow on account of such rent in arrears. If an amount is
paid to FWRLP because a tenant(s) occupying a Tenant Space
does not pay its Rent when due, and FWRLP subsequently
collects such unpaid Rent from the tenant, then such Rent
collected from such tenant shall be paid to Contributor on a
quarterly basis to the extent of such amount previously paid
to FWRLP. Contributor and its Members shall not be precluded
from making a claim against FWRLP with respect to any
incorrect amount paid to FWRLP pursuant to this Agreement.
Notwithstanding the foregoing, if the Units are issued to the
Members, then the obligations under this Section 18 of
"Contributors and (or) its Members" shall mean the Members.
(d) Suspension. In the event that the Shelf Registration
Statement to be filed with the SEC pursuant to the Registration Rights Agreement
attached hereto as Exhibit N is not declared effective by the SEC within
nineteen (19) months after the Closing Date (with respect to the Units issued
pursuant to Section 2(a)(ii)(A)) and the Second Issuance Date (with respect to
the Units issued pursuant to Section 2(a)(ii)(B)), then the Rent Guaranty and
the Fit-Up/Leasing Guaranty set forth in Sections 18(a) and 18(b), above,
respectively, shall be suspended for the period commencing on the first day of
the twentieth (20th) month after the Closing Date and terminating on the date
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that the Shelf Registration Statement is declared effective by the SEC. Upon the
date the SEC declares the Shelf Registration Statement to be effective, the
Rental Guaranty and the Fit-Up Leasing Guaranty shall be reinstated, but FWRLP
shall not have any retroactive claim for recapture of amounts which otherwise
would have been due thereunder with respect to the suspension period.
(e) Notwithstanding anything to the contrary contained herein,
any amounts that are payable by Contributor and/or its Members to FWRLP under
this Agreement after Closing under Sections 5(i)(s), 11, 18(a) and (b) or 21
shall be reimbursed to FWRLP solely by impounding or setting off against
distributions/ dividends next payable with respect to the Units issued to the
Contributor or its Members under this Agreement (and/or from the cash escrow
established under Section 18(c)). Any amounts which are not paid from a
distribution/dividend shall be carried forward and shall be paid from the next
following distributions/dividends (and/or from the cash escrow), and any such
amount carried forward shall bear interest at the rate of nine percent (9%) per
annum, which interest shall be paid from the next following
distributions/dividends (and/or from the cash escrow). Any payment obligations
which remain outstanding at the time of reduction of the Units pursuant to the
exercise by Contributor or its Members of their exchange rights contemplated
hereby or otherwise, shall be paid to FWRLP by Contributor and its Members in
cash at such time.
19. Miscellaneous Provisions.
(a) Completeness and Modification. This Agreement (together
with Exhibits A to S attached hereto) with respect to the transactions
contemplated herein, and it supersedes all prior discussions, understandings or
agreements between the parties. This Agreement shall not be modified or amended
except by an instrument in writing signed by all of the parties hereto.
(b) Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, and their respective successors
and assigns.
(c) Assignment. This Agreement shall not be assignable by
FWRLP without the consent of Contributor, provided that this Agreement may be
assigned without Contributor's consent to an entity controlled by, controlling
or under common control with FWRLP. This Agreement shall not be assignable by
Contributor provided nothing herein shall preclude transfer of any membership
interests in the Company prior to Closing, as long as all transferees are bound
hereby.
(d) Waiver; Modification. Failure by FWRLP or
Contributor to insist upon or enforce any of its rights hereto shall not
constitute a waiver or modification thereof.
(e) Governing Law. This Agreement shall be governed by
and construed under the laws of the State of Virginia.
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(f) Headings. The headings are herein used for convenience or
reference only and shall not be deemed to vary the content of this Agreement or
the covenants, agreements, representations and warranties herein set forth, or
the scope of any provision hereof.
(g) Continuing Documentation and Access. From and after
Closing, Contributor shall afford FWRLP reasonable access to any and all
information in its possession concerning the ownership, use and operation of the
Property (including the right to copy same at the expense of FWRLP) for purposes
of any tax examination or audit or other similar purpose, subject to the
agreements of FWRLP concerning confidentiality set forth herein.
(h) Counterparts. To facilitate execution, this Agreement may
be executed in as many counterparts as may be required; it shall be sufficient
that the signature of, or on behalf of, each party, or that the signatures of
the persons required to bind any party, appear on one or more such counterparts.
All counterparts shall collectively constitute a single agreement.
(i) Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered by hand or
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid or delivered by commercial courier, telecopy or overnight
courier (e.g., Federal Express) against receipt, to the addresses indicated
below:
(i) if to FWRLP:
First Washington Realty Limited Partnership
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
(ii) if to Contributors or its Members:
Xx. Xxxxx X. XxXxxxx
c/o Valley Forge Investment Corp.
000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
and
Xxx Xxxxxxx
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
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Such notice shall be deemed given on the date of receipt by the addressee or the
date receipt would have been effectuated if delivery were not refused. Each
party may designate a new address by written notice to the other in accordance
with this Paragraph 19(i).
(j) Further Assurances. Contributor and FWRLP agree to
execute, acknowledge and deliver any further agreements, documents or
instruments that are reasonably necessary or desirable to carry out the
transactions contemplated by this Agreement.
(k) Business Days. A "business day" shall be Mondays through
Fridays, less and expecting all legal holidays observed by the United States
Government or the Government of the State of Maryland. Any date specified in
this Agreement which does not fall on a business day shall be automatically
extended until the first business day after such date.
20. Additional Provisions.
(a) Approvals and Consents. In the event that any provision of
this Agreement subjects the action or inaction of any party hereto to the
consent or approval of the other party, the parties agree that such consent or
approval shall not be unreasonably withheld, conditioned or delayed (unless
specifically provided to the contrary in the applicable provision).
(b) Time of the Essence. Time is of the essence of all
provisions of this Agreement.
(c) Effect of Termination. Upon any termination of this
Agreement, and irrespective of the cause thereof, all rights of entry provided
for hereunder, and all provisions limiting the actions of the Contributor to the
consent of FWRLP shall immediately cease and terminate.
(d) Severability. All provisions of this Agreement shall be
valid and enforceable to the fullest extent permissible by law; and in the event
any provision (or part) of this Agreement shall be held to be void, invalid or
unenforceable for any reason, then the same shall not affect the validity or
enforceability of the remaining provisions of this Agreement, which shall
continue in full force and effect as if the void, invalid or unenforceable
provision (or part) were deleted herefrom.
(e) Attorney's Fees for Breach of Post-Closing Obligations. In
the event any legal action is brought by a party hereto due to any breach of the
post-closing obligations of the parties hereto, the non-breaching party shall be
entitled to recover from the breaching party, in addition to any damages
recoverable by virtue of such
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breach, the non-breaching party's reasonable attorneys fees and court costs, if
the non- breaching party is the prevailing party in such legal action.
21. Post Closing Work.
(a) Contributor hereby agrees that, unless otherwise agreed
pursuant to Section 2(f) below, the Property work set forth on Exhibit P hereto
(the "Post-Closing Work") shall be completed by Contributor, at Contributor`s
sole cost and expense, after Closing and in a diligent and good and workmanlike
manner, lien free, and in accordance with all Loudoun County approved plans and
specifications and other applicable laws, rules and regulations. Notwithstanding
the foregoing, all of the Post- Closing Work shall be completed with all due
diligence, but in no event later than six (6) months after Closing, unless
required to be completed sooner under the requirements of any governmental
agency or body. If the Post-Closing Work is not completed within the time period
set forth above, then FWRLP shall have the right, but not the obligation, to
complete the Post-Closing Work and Contributor shall reimburse FWRLP for all
reasonable costs paid by FWRLP in accordance with Section 18(e) herein. In
addition, if the cost of the monument sign for the Property exceeds $25,000,
then Contributor (or its Members) shall reimburse FWRLP for one-half (1/2) of
the cost of such monument sign in excess of $25,000.00, and such payment shall
be made to FWRLP in accordance with Section 18(e) herein. The obligations set
forth in this Section 21 shall survive Closing without limitation.
(b) To the extent any of the items listed on Exhibit P are
covered or indemnified against under the terms of any applicable warranty and/or
contractual rights in favor of the Contributor which have been properly assigned
to FWRLP, FWRLP agrees to enforce such warranty and/or contractual rights upon
the request of the Contributor (and the Contributor agrees to coordinate with
FWRLP's property manager, at no out-of-pocket expense to FWRLP, the actions
necessary to bring about the enforcement of such warranty rights and the
completion of all such items).
(c) Except as otherwise agreed pursuant to Section 2(f) above,
all costs expended by FWRLP pursuant to this Section 21 shall be paid by the
Contributor to FWRLP pursuant to Section 18(e) herein.
(d) The obligations and covenants set forth in this
Section 21 shall survive Closing without limitation.
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IN WITNESS WHEREOF, the parties hereto have executed this Contribution
Agreement as of the day and year first written above.
FWRLP:
FIRST WASHINGTON REALTY
LIMITED PARTNERSHIP
By: First Washington Realty Trust, Inc.,
WITNESS: Its general partner
By: /s/
Xxxxxxx X. Xxxxx
President
Date of execution: March 19, 1997
WITNESSES: CONTRIBUTOR:
ASHBURN FARMS VILLAGE
CENTER, L.L.C.
By: /s/
Xxxxx X. XxXxxxx
Managing Member
The undersigned Members join herein solely for the purpose of making
the representations, warranties and covenants contained in Sections 2(e),
5(i)(r), 5(i)(s), 11(c)(B), 14(a), 18 and 21 hereof.
MEMBERS:
/s/
XXXXX X. XxXXXXX
/s/
XXXXXXX X. IRELAND
/s/
XXXXXX X. XXXXXX
/s/
XXXX X. XXXXXXX
/s/
XXX X. XXXXXXX
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First Washington Realty Trust, Inc. joins herein solely for the purpos
of making the covenants contained in Sections 17 hereof.
WITNESS: FIRST WASHINGTON REALTY TRUST, INC.
By: /s/
Xxxxxxx X. Xxxxx
President
Date of execution: March 19, 1997
F:\DATA\WPDOC\DUKE\JBLUM\FORMS\ASHBURN.AGT
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ACKNOWLEDGE BY TITLE COMPANY
The undersigned Title Company executes this Contribution Agreement
solely to acknowledge receipt of the Deposit pursuant to Paragraph 3 hereof and
to evidence its agreement to serve as escrow agent pursuant to the terms of the
foregoing Agreement.
FIDELITY NATIONAL TITLE
INSURANCE COMPANY OF
PENNSYLVANIA
By: /s/
Xxxxxx Xxxx
Date: March 19, 1997
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LIST OF EXHIBITS
EXHIBIT A. Legal Description of Land Recitals
EXHIBIT A-1. Legal Description of Pad Site Section 2(a)(ii)(C)
EXHIBIT A-2. Description of Second Pad Site Section 2(e)
EXHIBIT B. Leases and Rent Schedule Section 5(i)(d)
EXHIBIT C. Service Contracts Section 5(i)(e)
EXHIBIT D. Tax Bills Section 5(i)(f)
EXHIBIT E. Intentionally Omitted
EXHIBIT F. Form of Tenant Estoppel Section 5(i)(i)
EXHIBIT F-1. Minimum Tenant Estoppels Section 8(a)(vii)
EXHIBIT G. Violations Section 5(i)(c)
EXHIBIT H. Personal Property Section 5(i)(p)
EXHIBIT I. Confidential Information Statement Section 5(i)(t)(iv)
EXHIBIT J. Permitted Exceptions Section 8(a)(iii)(B)
EXHIBIT K. Tenant Space Section 18(a)
EXHIBIT L. Schedule of Incomplete Work and
Allowances Due Under Leases Section 5(i)(d)(vi)
EXHIBIT M. Percentage of Units to Members of Contributor Section 2(a)(iii)
EXHIBIT N. Registration Rights Agreement Section 17(a)
EXHIBIT O. Contingent Leasing Commissions Section 5(i)(q)
EXHIBIT P. Post Closing Work Section 21
EXHIBIT Q. FNBM Mortgage Section 2(c)
EXHIBIT R. FNBM Note Section 2(c)
EXHIBIT S. Development Expenses Section 2(f)
[Contributors to Attach Foregoing at Acceptance of this Agreement]
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