EXHIBIT 10.49
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made and entered as the 22nd day of October,
1996, by and between (i) XXXXXXX XXXXXXXX, XXXXX XXXXXXXX (Xxxxxxx Xxxxxxxx and
Xxxxx Xxxxxxxx collectively the "General Partners"), XXXXXX XXXXXXXX, XXXXX
XXXXXXXX, XXXXXX XXXXXXXX, XXXX XXXXXX, XXXXXXX AND XXXXXXX XXXXXX (Husband and
wife), XXXXX and XXXXXXX XXXXXX (Husband and Wife) and FAIRLESS HILLS S.C.
ASSOCIATES, a Pennsylvania limited partnership, who are (or will be as of
Closing) all of the general and limited partners (collectively, the "Partners")
of City Line Shopping Center Associates, a Pennsylvania limited partnership (the
"Partnership") (the Partners sometimes herein after referred to collectively as
"Contributors"), and (ii) 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 Partners own, or will own as of Closing, all of the
partnership interests (the "Partnership Interests") of the Partnership; and
WHEREAS, the Partnership is the record and beneficial owner of that certain
parcel of real property as more particularly described on Exhibit A hereto
(collectively, the "Land"), together with the shopping center known as City Line
Shopping Center located in Philadelphia, Pennsylvania, and all other buildings
and improvements situated thereon (collectively, the "Building"), and all
Personal Property (as hereinafter defined) located therein, and all
appurtenances, rights, easements, rights-of-way, tenements and hereditaments
incident thereto (the "Additional Property") (the Land, Building, Personal
Property and Additional Property are hereinafter collectively referred to as the
"Property"); and
WHEREAS, Contributors and FWRLP desire to enter into this Agreement
relating to the contribution by Contributors to FWRLP of Partnership Interests
representing 89% of the capital interests and profits interests in the
Partnership (the "Contributed Interests") in exchange for certain interests in
FWRLP and for the continued ownership and later contribution by Contributors of
the remaining Partnership Interests representing 11% of the capital interests
and profits interests in the Partnership (the "Retained Interests").
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 of Contributed Interests. Subject to the terms and
conditions set forth in this Agreement, at the First Closing (as defined below)
Contributors shall contribute the Contributed Interests to FWRLP in exchange for
that number of common limited partnership units of FWRLP (the "Units")
determined as set forth in Section 2
below. Following the First Closing, those Contributors designated in Exhibit Q
attached hereto shall continue to hold all right, title and interest in and to
the Retained Interests, subject to the terms of this Agreement.
2. Consideration for Contributed Interests.
(a) In consideration of the Contribution of the Contributed Interests,
FWRLP shall issue Units in an aggregate amount calculated as follows: 89%
times the Net Asset Value (as defined below) of the Property, divided by
the Unit Price (as defined below) rounded to the nearest one (1). The Units
issued to the Contributors at the First Closing will be issued to the
respective Contributors in the same proportion as the respective
Contributors contribute the Contributed Interests.
(i) The "Net Asset Value" of the Property will equal
$14,775,000.00 less the outstanding and unpaid principal balance of
the Equitable Loan (as defined below) at the First Closing. The Net
Asset Value shall be further adjusted by the amounts of positive or
negative adjustments and prorations described in Section 12(b) below
(which shall all be determined as of the date of the First Closing).
(ii) The "Unit Price" will equal the average closing price of
First Washington Realty Trust, Inc. ("REIT") common stock for the
fifteen (15) business days immediately preceding the First Closing
Date (as defined below), rounded to the nearest 1/16th, such average
price not to be less than $19.50 per common share nor greater than
$21.00 per common share.
(b) At the First Closing, the Contributed Interests shall be
contributed to FWRLP with the Property then being subject to the
indebtedness, lien and operation of the Equitable Loan, including without
limitation the Mortgage (as defined below).
(c) (i) The Property is presently encumbered by a Mortgage and
Security Agreement ("Mortgage") from the Partnership, as debtor, for the
benefit of The Equitable Life Assurance Society of the United States, as
secured party (the "Lender"), which Mortgage secures an original principal
indebtness of $10,200,000.00 with interest thereon payable over the term
thereof (which ends on October 19, 2005) at a fixed interest rate of 8% per
annum, as evidenced by a Mortgage Note from the Partnership to Lender
("Note"). The Mortgage and Note and all documents and instruments executed
in connection therewith are collectively referred to as the "Equitable
Loan". The Equitable Loan is non-recourse (except for environmental and
other standard carve outs) to the Partnership and requires equal monthly
installments of principal and interest in the amount of the $78,725.25 per
month. The outstanding principal balance under the Equitable Loan as of
September 30, 1996 is approximately $10,089,472.00. Copies of the Mortgage
and Note are attached hereto as Exhibits N and O, respectively.
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(ii) FWRLP's obligations under this Agreement shall be expressly
contingent on the condition that on or prior to the First Closing
FWRLP receives a letter (the "Letter") from Lender at no cost to FWRLP
(other than charges or assumption fee of up to an aggregate 1% of the
then outstanding principal balance of the Equitable Loan), (i)
consenting to the contribution of the Partnership Interests to FWRLP
as set forth herein (the "Contribution"), (ii) confirming that the
Equitable Loan is as described above and shall remain on the same
terms and conditions as presently exist, and (iii) certifying that, to
the best knowledge of the Lender, there is no default or event which
with notice or lapse of time, or both, would constitute a default
under the Equitable Loan. At Closing, the General Partners shall
execute an estoppel certificate in favor of FWRLP certifying that, to
the best knowledge of the General Partners, there is no default, or
event of default which with notice or lapse of time, or both, would
constitute a default under the Equitable Loan. The General Partners
shall use commercially reasonable efforts to obtain such Letter from
Lender before the end of the Feasibility Period (as defined below) and
FWRLP shall cooperate therewith, but Contributors shall not have any
liability for any charges imposed by Lender as a condition of Lender's
consent to the Contribution of the Partnership Interests. If such
Letter is not received by FWRLP by the First Closing, FWRLP shall have
the right to terminate this Agreement, in which event the Deposit
(defined below), together with interest thereon, shall be returned to
FWRLP. If Lender does not consent or if Lender's Letter is other than
as set forth above and is not acceptable to FWRLP, FWRLP shall have
the right, at its sole election, to terminate this Agreement by giving
written notice thereof to Contributors within ten (10) days
thereafter, whereupon the Deposit, together with interest thereon,
shall be returned to Contributors and neither party shall have any
further liability to the other.
(iii) Contributors' obligations under this Agreement are
expressly contingent on the condition that the Lender, at or before
the First Closing, shall have released the General Partners from all
obligations and liabilities under the Equitable Loan pursuant to
release documents reasonably acceptable to the General Partners and
their counsel. If Lender does not deliver such release at or before
Closing, the General Partners shall have the right to terminate this
Agreement, in which event the Deposit, together with interest thereon,
shall be returned to FWRLP.
(d) Contributors acknowledge 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 their issuance, all as more fully discussed in the
Confidential Information Statement (as hereinafter defined), as
supplemented through the date hereof.
(e) Notwithstanding any provision hereof to the contrary, the
Contribution of the Partnership Interests to FWRLP as set forth herein
shall constitute a "Capital Contribution" within the meaning of the FWRLP
Partnership Agreement and is intended, except as otherwise required under
Section 707, to be governed by Section 721(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and all parties
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to this Agreement will report the transaction evidenced hereby consistently
with this Section 2(e). Since the Contribution of the Partnership Interests
to FWRLP will terminate the Partnership for federal income tax purposes,
FWRLP agrees that the Contributors shall have the right and obligation to
file final tax returns for the Partnership as of the Closing Date.
3. Deposit.
(a) Within two (2) business days after the date of delivery to FWRLP
of an original of this Agreement executed by Contributors together with
completed Exhibits hereto (the date of such delivery by Contributors being
the "Acceptance Date") FWRLP shall deliver to the Title Company, as escrow
agent, a deposit (together with interest earned thereon, the "Deposit") of
One Hundred Thousand Dollars ($100,000.00 ) by check payable to the
Commercial Settlements, Inc., 0000 X Xxxxxx, X.X., Xxxxxxxxxx, XX 00000
(the "Title Company").
(b) The Title Company will immediately provide Contributors with
written evidence of receipt of such Deposit. The Title Company shall place
the Deposit in an interest-bearing account within two (2) business 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, either of the
General Partners or FWRLP provides Title Company with a certification (a
copy of which shall be delivered contemporaneously to the other party) that
the Contributors 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. Any payment of the Deposit to the Contributors shall be made by
check payable to the General Partners.
(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. The General
Partners 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
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Company in bad faith, in willful disregard of this Agreement or involving
gross negligence on the part of Title Company.
4. Closings. Except as otherwise provided in this Agreement, (a) the
Contribution of the Contributed Interests contemplated herein shall be
consummated at the "First Closing," which shall take place on the date (the
"First Closing Date") specified by FWRLP on not less than ten (10) days notice
to Contributors, provided that the First Closing Date shall not be later than
sixty (60) days after the end of the Feasibility Period, and (b) the
Contribution of the Retained Interests contemplated herein shall be consummated
at the "Second Closing," which shall take place three (3) years and one (1)
month after the First Closing. The Closings shall take place at the offices of
First Washington Realty Limited Partnership, 0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxx 00000, or at such other place as may mutually agreed upon by
General Partners and FWRLP. All references in this Agreement to the "Closing"
shall be deemed to refer to the First Closing only, all references to the
"Closing Date" shall be deemed to refer to the First Closing Date only, and all
references to the "Closings" shall be deemed to refer to both the First Closing
and the Second Closing.
5. Representations and Warranties of Contributors. In order to induce
FWRLP to enter into this Agreement and to issue the Units in consideration for
the Partnership Interests, each Contributor for such Contributor only and for no
other Contributor makes the following representations and warranties, each of
which is material and shall survive Closing without limitation, notwithstanding
any investigation at any time made by or on behalf of FWRLP:
(a) Authority. Such Contributor has the rights, power and authority to
enter into this Agreement and to contribute its Partnership Interests in
accordance with the terms and conditions of this Agreement. Except for the
consents required under the Equitable Loan, no consents of any persons
other than those executing this Agreement as a Contributor are required for
such execution or to cause such Contributor to consummate the transactions
contemplated by this Agreement. This Agreement is the valid and binding
obligation of such Contributor, enforceable against such Contributor in
accordance with its terms.
(b) No Defaults. Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) subject to
any approval required under the Equitable Loan, 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 such Contributor is a
party or by which such Contributor is bound, (ii) subject to any approval
required under the Equitable Loan, violate any restriction, requirement,
covenant or condition to which such Contributor is subject or by which such
Contributor is bound or (iii) constitute in violation of any code,
resolution, law, statute regulation, ordinance, rule, judgment, decree or
order to which such Contributor is subject or by which such Contributor is
bound.
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(c) Ownership of Interests. Such Contributor owns the Partnership
Interest owned by such Contributor, as set forth in Exhibit Q hereto, free
and clear of all liens, charges, encumbrances, restrictive agreements and
assessments; provided, however, that Fairless Hills S.C. Associates
("Fairless Hills") represents that it does not currently own the
Partnership Interests owned as of the date hereof by Xxxxx Xxxxxx and Xxxxx
Xxxxxx (the "Xxxxxxxx Interests"), but will acquire the Fairless Interests
prior to the First Closing, free and clear of all liens, charges,
encumbrances, restrictive agreements and assessments. Upon the contribution
of such Contributor's Partnership Interest (or a portion thereof) to FWRLP
or its designee(s), FWRLP will receive good and absolute title thereto,
free from all liens, charges, encumbrances, restrictive agreements and
assessments whatsoever. Such Contributor hereby waives, with respect to the
contribution contemplated by this Agreement, any "right of refusal" or
other restriction on transfer set forth in the limited partnership
agreement of the Partnership. There are no outstanding options, contracts,
calls, commitments or demands of any nature relating to the Partnership
Interest of such Contributor (except for the right of Fairless Hills to
obtain the Fairless Interests).
(d) Securities Law Matters.
(i) Such Contributor is now or, at the time of Closing, will be,
an "accredited investor" as such term is defined under Rule 501
promulgated under the Securities Act of 1933, as amended (the
"Securities Act");
(ii) Such Contributor's primary residence or principal place of
business is in the state set forth on Exhibit Q;
(iii) Such Contributor is acquiring the Units for such
Contributor's account for investment purposes only and not with a
present view to distribution;
(iv) Taking into account the information and resources such
Contributor can practically bring to bear on the acquisition of the
Units in FWRLP contemplated hereby, such Contributor is knowledgeable,
sophisticated and experienced in making, and is 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 has
requested, received, reviewed and considered all information such
Contributor deems relevant in making an informed decision to acquire
the Units (including the Confidential Information Statement attached
hereto which contains the First Amended and Restated Agreement of
Limited Partnership of FWRLP and any Amendments thereto (the "FWRLP
Partnership Agreement"), except that the FWRLP Partnership Agreement
has been further amended solely to reflect exchanges of Units (as
defined in the Prospectus) for shares of the REIT's common stock by
holders of such Units in accordance with the terms of the FWRLP
Partnership Agreement);
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(v) Such Contributor 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 FWRLP Partnership Agreement;
(vi) Such Contributor acknowledges 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, such Contributor 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 FWRLP Partnership Agreement;
(viii) As required by the Pennsylvania Securities Act of 1972, if
such Contributor is a resident of, or has his, her or its principal
place of business in the Commonwealth of Pennsylvania, they shall not
resell his, her or its Units for a period of twelve (12) months from
and after the date of their issuance to such Contributor unless
pursuant to an exemption from the requirements of such act or an order
from the Pennsylvania Securities Commission;
(ix) Such Contributor acknowledges and agrees that the Units to
be issued hereunder shall not be exchangeable and shall not be
exchanged for Common Stock in the REIT for a period of thirteen (13)
months (with respect to the Units issued at the First Closing, at the
Second Closing or pursuant to Section 20 hereof, if any) from and
after the date of issuance to such Contributor; and
6. Representations and Warranties of the General Partners. In order to
induce FWRLP to enter into this Agreement and to issue the Units in
consideration for the Partnership Interests, the General Partners, jointly and
severally, hereby make the following representations and warranties, each of
which is material and shall (except as otherwise set forth in Section 6(s)),
survive Closing for a period of one (1) year (unless expressly provided that it
will survive Closing without such limitation), notwithstanding any investigation
at any time made by or on behalf of FWRLP:
(a) Authority. The Partnership is a limited partnership duly organized
and in good standing under the laws of the Commonwealth of Pennsylvania.
The copy of the Partnership' s Partnership Agreement and all Amendments
thereto (collectively, the "Partnership Agreement") including all
Certificates of Limited Partnership and all Amendments thereto and the list
of all the Partners along with their individual Partnership Interests,
attached hereto an Exhibit P , is a true, correct and complete copy
thereof. Notwithstanding anything to the contrary, the representations and
warranties contained in this Section 6(a) shall survive Closing without
being subject to
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the one year limitation.
(b) Title. The Partnership is the sole owner of fee simple title to
the Property.
(c) Compliance with Existing Laws. To the best of the General
Partners' knowledge and except as set forth on Exhibit D attached hereto,
(i) the Partnership is not in violation, in any material respect, of any
material 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,
and (ii) the Partnership possesses all licenses, certificates, permits and
authorizations necessary for the use and operation of the Property in the
manner in which it is currently being operated by the Partnership , and the
requisite certificates of the fire marshalls or board of fire underwriters
have been issued for the Property. The Property is zoned _________. To the
best of the General Partners' knowledge, the Building and all related
facilities are now in conformance with all applicable zoning laws.
(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, which is true and correct in all material respects. There are
no leases or tenancies of any space in the Property other than those set
forth in Exhibit B or, to the General Partners' knowledge, any subleases or
subtenancies unless otherwise noted therein. Except as otherwise set forth
in Exhibit B 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 or any
portion thereof, except as set forth in the Amoco lease listed in the
Rent Schedule;
(iii) no renewal or expansion options have been granted to the
tenants, except as provided in the Leases;
(iv) to the best of the General Partners' knowledge, the
Partnership is not in default under any of 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;
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(vi) all work for tenant alterations and other work or materials
contracted for by the Partnership and any tenant has been completed by
the Partnership, and all work and materials have been fully paid for
or will be paid for by Closing;
(vii) the Partnership has not sent written notice to any tenant
claiming that such tenant is in default, which default remains
uncured, and to the best of the General Partners' knowledge, no tenant
is in default under its Lease, except as indicated in Exhibit B
hereto;
(ix) no action or proceeding instituted against the Partnership
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. Except in the case of a default by the vendor
under a specific Service Contract, no Service Contract 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. The General Partners have delivered true and correct
copies of tax bills issued by any applicable federal, state or local
governmental authority to the Partnership 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. Attached hereto as Exhibit E is a list of all hazard,
liability and other insurance policies presently affording coverage with
respect to the Property. The General Partners shall maintain in full force
and effect all such policies until the First Closing Date.
(h) Possession of Property. Possession of the Property shall remain
with the Partnership at Closing in its "as is, where is" condition as of
the date of FWRLP's execution of this Agreement, subject to normal wear and
tear and damage by fire or other casualty and the effect of condemnation
(subject to Section 13 herein), and subject to the Permitted Exceptions.
(i) Tenant Estoppels. The General Partners represent and warrant that
they shall use reasonable good faith efforts (without cost to the
Contributors or the Partnership) to obtain and deliver to FWRLP a tenant
estoppel letter from each tenant in the form attached hereto as Exhibit F
(or in such form or containing such information as may be required by the
lease of such tenant) from each of the tenants of the
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Property confirming the information set forth in the Rent Schedule attached as
Exhibit B hereto.
(j) Condemnation Proceedings. No condemnation or eminent domain
proceedings are pending or, to the best of the General Partners' knowledge,
threatened against the Property or any part thereof, and neither the
Partnership nor the General Partners has made any commitments to or
received any 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, except as set forth in the Permitted Exceptions.
(k) Litigation. Except as set forth on Exhibit G hereto, no litigation
is pending or, to the best of the General Partners' knowledge, threatened,
including administrative actions or orders relating to governmental
regulations, affecting the use, operation or ownership of the Property or
any part thereof as contemplated herein, other than those being defended by
the Partnership's liability insurers.
(l) No Defaults. Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) subject to
any approval required under the Equitable Loan, 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 the Partnership is a
party or by which the Partnership or the Property is bound, (ii) subject to
the approval required under the Equitable Loan, violate any restriction,
requirement, covenant or condition to which the Partnership is subject or
by which the Partnership or the Property is bound, (iii) constitute a
violation of any applicable code, resolution, law, statute, regulation,
ordinance, rule, judgment, decree or order applicable to the Partnership,
or (iv) result in the cancellation of any contract or lease pertaining to
the Property. The representations and warranties set forth in this Section
6(l) shall survive Closing without being subject to the one year
limitation.
(m) Intentionally Omitted.
(n) Intentionally Omitted.
(o) Hazardous Waste. The General Partners have 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
1986, 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 the General Partners' knowledge, there is no proceeding or action
pending or threatened by any person or governmental agency regarding the
environmental
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condition of the Property. To the General Partners' knowledge, the Building
is totally free of friable asbestos requiring remediation.
(p) Certificates of Occupancy. The Partnership will not amend any
certificates of occupancy for the Property and will maintain them in full
force and effect to the extent that the Partnership is responsible for
them. .
(q) Licenses and Permits. Contributors have received no notice, nor
has any knowledge, that it is lacking any required permit or license issued
by applicable governmental authorities for operation, maintenance or
ownership of the Property ("Licenses").
(r) Operating Statements. Attached hereto as Exhibit H are true and
correct operating statements of the Property for 1994 and 1995. Also
attached as Exhibit H is a copy of the 1996 operating budget for the
Property.
(s) Utilities. To the best of Contributors' knowledge, adequate,
usable public sewers, public water facilities, gas and electrical
facilities necessary to the current 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. Notwithstanding anything to the contrary, the
representations and warranties set forth in this Section 6(s) shall not
survive Closing.
(t) Personal Property. Attached hereto as Exhibit I 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).
(u) Leasing Commissions. There are, and at Closing shall be, no
outstanding or contingent leasing commissions or fees payable with respect
to the Property
(v) Partnership Liabilities. Except for (i) the obligations and
liabilities of the Partnership which FWRLP is taking the Partnership
Interests subject to under Section 2(c) above, and (ii) any accrued
liabilities and obligations of the Partnership which are being adjusted at
Closing pursuant to Section 12 of this Agreement, the Partnership shall not
have any liabilities or obligations, either accrued, absolute or contingent
or otherwise, which will not be paid or discharged on or before the Closing
Date. In addition, except for the claims and liabilities described in the
preceding sentence or otherwise described or disclosed in this Agreement
(including the Exhibits hereto), the Partnership has not received notice of
any, and to the best of the knowledge of the General Partners, there is, as
of the date of execution of this Agreement, no basis for any, claim against
(or liability of ) the Partnership arising from the business done,
transactions entered into or other events occurring prior to the
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Closing Date which is not the express responsibility of the Contributors
under the terms of this Agreement (or taken into account as an adjustment
to the Units to be issued to the Contributors hereunder).
(w) Partnership for Tax Purposes. The Partnership is, and at all
times has been, properly treated as a partnership for Federal Income Tax
purposes, and not as an "association" or "publicly traded partnership"
taxable as a corporation. The foregoing representation shall survive
Closing without being subject to the one year limitation.
(x) Taxes. Each of the Partnership and any predecessor of the
Partnership have timely filed with the appropriate taxing authorities all
returns (including without limitation information returns and other
material information) in respect of Federal, State and local taxes
(collectively "Taxes") required to be filed through the date hereof and
will timely file any such returns required to be filed on or prior to the
Closing Date. The returns and other information filed (or to be filed) are
complete and accurate in all material respects. All Taxes of the
Partnership in respect of periods beginning before the Closing Date have
been timely paid, or will be timely paid prior to the Closing Date, and the
Partnership has no material liability for Taxes in excess of the amounts so
paid. All Taxes that the Partnership has been required to collect or
withhold have been duly collected or withheld and, to the extent required
when due, have been or will be (prior to Closing Date) duly paid to the
proper taxing authority. No audits of any of the Partnership's federal,
state or local returns for Taxes by the relevant taxing authorities have
occurred, and no material deficiencies for Taxes of the Partnership have
been claimed, proposed or assessed by any taxing or other governmental
authority against the Partnership. There are no pending or, to the best of
knowledge of the General Partners, threatened audits, investigations or
claims for or relating to any material additional liability to the
Partnership in respect of Taxes, and there are no matters under discussion
with any governmental authorities with respect to Taxes that in reasonable
judgement of the General Partners or their counsel, is likely to result in
a material additional liability for Taxes. To the best of the knowledge of
the General Partners, there are no liens for taxes on any of the
Partnership Interests, and there are no liens for taxes (other than for
current taxes not yet due and payable) on any of the assets of the
Partnership. No Contributor is a person other than a United States person
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code"). The transaction contemplated herein is not subject to the tax
withholding provisions of Section 3406 of the Code, or Subchapter A of
Chapter 3 of the Code or of any other provision of law. The foregoing
representations and covenants shall survive Closing without being subject
to the one year limitation.
(y) Special Limitations. Notwithstanding anything in this Agreement
to the contrary (other than the second sentence of Section 15(a)(ii):
(i) If FWRLP does not elect to terminate this Agreement within
the Feasibility Period pursuant to the terms of Section 14 below, then
the
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representations and warranties made by the Contributors or the General
Partners 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 the Contributors or the General
Partners), which fact or matter was inconsistent with the
Contributors' or General Partners' 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
Contributors or the General Partners) 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 the
Contributors or the General Partners or a failure of a condition to
Closing hereunder;
(ii) If FWRLP elects to consummate the Closing under this
Agreement despite the failure of any of the conditions set forth in
Section 9 below, which failure is actually known to FWRLP prior to
Closing, including without limitation the failure of any
representation or warranty of the Contributors or General Partners
contained herein to be true and correct as of the time of Closing
(provided such failure was not the result of the willful misconduct or
bad faith of Contributors or the General Partners), then unless
Contributors or the General Partners expressly agree in writing to the
contrary at the time of Closing, FWRLP shall be deemed to have waived
any claims against the Contributors or General Partners arising out of
such failure, and, in such event, the Contributors and General
Partners shall have no post-Closing liability to FWRLP with respect
thereto.
(iii) FWRLP shall not be entitled to assert any claim against the
Contributors or General Partners with respect to the inaccuracy of any
representation or warranty made by the Contributors or General
Partners (provided that such inaccuracy was not due to the willful
misconduct or bad faith of Contributors or the General Partners), 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 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 Contributors which was actually known to FWRLP or its
representatives as of or prior to Closing.
(iv) If a matter represented by the Contributors or General
Partners hereunder was true as of the date of execution of this
Agreement, but
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subsequently is rendered inaccurate due to the occurrence of events or
due to a cause other than the Contributors' or General Partners'
intentional misconduct or bad faith, or intentional breach of this
Agreement, then such inaccuracy shall not constitute a default by the
Contributors or General Partners under this Agreement, even though the
same might constitute a failure of a condition to the Closing (subject
to subsections 6(y)(i)-(iii) above).
7. Obligations of Contributors Pending Closing. From and after the date
of this Agreement through the Closing Date, Contributors covenant and agree
as follows:
(a) Maintenance and Operation of Premises. The General Partners will
cause the Property to be maintained in its present order and condition,
normal wear and tear, and damage by fire or other casualty (subject to
Section 13) excepted and will cause the continuation of the normal
operation thereof, including the purchase and replacement of fixtures and
equipment, 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 damage by fire or other casualty (subject to Section 13), be
in substantially the same condition on the Closing Date as on the date
hereof.
(b) Licenses. The General Partners shall use their commercially
reasonable efforts to preserve in force all Licenses and to cause those
expiring to be renewed.
(c) Changes in Representations. The General Partners shall notify
FWRLP promptly, and FWRLP shall notify Contributors promptly, if either
becomes aware of any 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. The General Partners shall not, without
FWRLP's prior written consent (which consent shall not be unreasonably
withheld), 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. Contributors
hereby further agree that if any space is vacant on the First Closing Date,
FWRLP shall accept the Property subject to any vacancy as of the First
Closing Date, provided that the vacancy was not permitted or created by the
General Partners in violation of any restrictions contained in this
Agreement. Prior to Closing, Contributors shall not apply all or any part
of the security deposit of any tenant unless such tenant has vacated the
Property.
(e) Obligations as to Equitable Loan. The General Partners shall not,
without FWRLP's prior written consent, (i) prepay, or permit the
Partnership to prepay, the Equitable Loan, or (ii) modify or amend, or
permit the Partnership to modify or amend, any of the documents evidencing
or securing the Equitable Loan or otherwise entered into in connection with
the Equitable Loan. The General Partners shall make,
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or cause the Partnership to make, all payments required to be made under
the Equitable Loan when due, shall perform, or cause the Partnership to
perform, all obligations under the Equitable Loan and shall keep, and cause
the Partnership to keep, the Equitable Loan free from default.
8. Representations and Warranties of FWRLP. In order to induce Contributors
to enter into this Agreement and to contribute the Partnership Interests to
FWRLP, FWRLP, and, as to Sections 8(a), 8(b), 8(e), 8(f) and 8(g), the REIT
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 Contributors:
(a) Authority of FWRLP and the REIT. FWRLP is a limited partnership
duly organized and existing and in good standing under the laws of the
State of Maryland. Subject to the approval of the Board of Directors of the
REIT (the "Board"), FWRLP and the REIT have all necessary power and
authority to execute, deliver and perform this Agreement and consummate all
of the transactions contemplated by this Agreement, including without
limitation the Registration Rights Agreement referred to in Section 18 and
attached hereto as Exhibit K. Subject to the approval of the Board, this
Agreement is the valid and binding obligation of FWRLP and the REIT,
enforceable against each of them in accordance with its terms. FWRLP shall
promptly notify the General Partners in writing of any approval or
disapproval by the Board of this Agreement and the transactions
contemplated by this Agreement. If, on or prior to the end of the
Feasibility Period, FWRLP shall notify the General Partners that the Board
has approved this Agreement and the transactions contemplated herein, then
such approval shall irrebuttably be deemed to have been given and such
approval may not thereafter be rescinded, revoked or treated as a condition
to the performance by FWRLP of its obligations hereunder. If, prior to the
end of the Feasibility Period, FWRLP shall notify the General Partners that
the Board has expressly disapproved this Agreement, or if FWRLP shall
otherwise fail to notify the General Partners prior to the end of the
Feasibility Period that the Board has approved this Agreement, then this
Agreement will terminate, the Deposit and any interest thereon shall be
returned to FWRLP and neither party shall have any further obligations or
liabilities to the other.
(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, or (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 L 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
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Information Statement, as supplemented through the date hereof, has not
been amended or modified except as set forth in Exhibit L, and, to the
knowledge of FWRLP, no default or condition which, with the passage of time
or the giving of notice could become a default, exists on the part of any
party thereunder.
(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, in light of the circumstances under which
they were made, not misleading.
(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.
(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 their issuance will have been, duly authorized for
issuance by FWRLP to Contributors, and on the date of their issuance 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. Any and all shares of Common Stock of the REIT exchangeable for Units
issued in connection with the transactions herein contemplated will be duly
authorized, validly issued, fully paid and non-assessable. All issued and
outstanding shares of Common 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 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.
(h) Disposition of Property. FWRLP has no current plan or intention
to sell or otherwise dispose of the Property or the Partnership Interests.
FWRLP acknowledges that, under Section 704(c) of the Code, the contributors
will be allocated
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"built-in" taxable income or gain if FWRLP makes a taxable sale or
disposition of all or a portion of the Property or the Partnership
Interests held by FWRLP(or if the Property or Partnership Interests held by
FWRLP are distributed to other partners of FWRLP within five years of the
contribution of the Partnership Interests). FWRLP agrees that if, within
six (6) years following the First Closing it voluntarily sells or otherwise
disposes of all or a portion of the Property or the Partnership Interests
held by FWRLP, it shall pay to each Contributor (or such Contributor's
successor in interest) an amount which, net of taxes on such payment, shall
be sufficient to indemnify and hold such Contributor (or successor in
interest) harmless from and against any tax liabilities incurred by such
Contributor (or successor in interest) as a result of such sale or
disposition.
(i) Allocation of Non-Recourse Debt. At least fifteen (15) days prior
to the First Closing, FWRLP shall provide the General Partners with a
letter from its independent certified public accountants in substantially
the form set forth in Exhibit M hereto (with appropriate modifications to
reflect that Partnership Interests are being contributed to FWRLP with the
Property then being subject to the Equitable Loan) indicating the amount of
FWRLP non-recourse indebtedness that will be allocated to Contributors'
Units for federal income tax purposes immediately after the First Closing.
The letter will contain a computation of the amount of FWRLP non-recourse
indebtedness allocable to Contributors based on certain assumptions (some
of which will be provided by Contributors or their counsel), and the
results for both (a) the contribution of the Contributed Interests, and (b)
the contribution of the Contributed Interests and the Retained Interests as
if both were contributed at the First Closing. FWRLP warrants that it will
prepare all of its federal, state and other income tax returns in a manner
reflecting the allocation of non-recourse liabilities set forth in the
letter in the immediately preceding sentence. If the aforementioned
accountant's letter delivered to the General Partners prior to the First
Closing indicates that the amount of FWRLP non-recourse indebtedness that
will be allocated to Contributors' Units immediately after the First
Closing is not sufficient to avoid triggering a taxable gain to
Contributors on Contributors' contribution of the Contributed Interests to
FWRLP (or would not be sufficient to avoid triggering a taxable gain to
Contributors on their contributing of both Contributed Interests and
Retained Interests as if both were contributed at the First Closing), then
the General Partners ( acting either singly or jointly) shall have the
right to terminate this Agreement by giving written notice thereof to FWRLP
within seven (7) days of receipt of such accountant's letter by the General
Partners, in which event the Deposit and any interest thereon shall be
returned to FWRLP and neither party shall have any further obligations or
liabilities to the other.
9. Conditions Precedent to First Closing.
(a) It shall be a condition precedent of FWRLP's obligation to issue
Units at the First Closing that each and every one of the following
conditions shall exist on the First Closing Date:
(i) Representations and Warranties. Contributors' representations
and warranties hereunder shall be true and correct in all
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material respects the same manner and with the same effect as though
such representations and warranties had been made on and as of the
First 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 on
the date of FWRLP's execution of this Agreement.
(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 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, without exception for mechanic's or materialmen's lien
arising from goods, labor or materials provided to the Property prior
to the First 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 other matters which are listed on Exhibit J
attached hereto. Notwithstanding anything to the contrary
contained in this paragraph (B), the General Partners, at or
prior to Closing, shall cause to be satisfied and released of
record all mortgages, deeds of trust, financing statements,
judgments, liens and other matters that may be satisfied by
payment of a liquidated sum, other than the Equitable Mortgage.
(iv) [Intentionally Omitted]
(v) [Intentionally Omitted].
(vi) Leasing Brokerage / Property Management Agreements. The
General Partners shall have terminated any and all leasing brokerage
agreements and property management agreements with respect to each
Property effective as of the First Closing. All responsibility for
dealings with any such brokers and agents, including the payment of
any claims (if deemed warranted by the General Partners), shall be the
sole responsibility of the General Partners. The General Partners
agree 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 or by
the Partnership in connection with any outstanding and/or contingent
leasing commissions or fees or management fees. Notwithstanding
anything to the contrary, the indemnity set forth in this subsection
9(a)(vi) shall survive Closing
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without limitation.
(vii) Performance by Contributor. Contributors shall have
complied with and not be in breach of any of their covenants or
obligations under this Agreement.
(viii) Tenant Estoppels. FWRLP shall have received a tenant
estoppel letter in the form attached hereto as Exhibit F (or in such
form as required by the lease to which a specific tenant is subject)
from, at a minimum, tenants satisfying the requirements described on
Exhibit F-1, 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.
(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 17 hereof, neither party shall have any further
obligations or liabilities to the other; or (b) waive such condition and
proceed to Closing without abatement of consideration under Section 2(a)
herein.
10. Contributors' Deliveries. At the First Closing the following documents,
each dated as of the First Closing Date, shall be delivered to FWRLP:
(a) a Contribution and Assumption Agreement ("Assignment") and an
Amendment to the Partnership Agreement ("Amendment") and Limited
Partnership Certificate, in a recordable from, reasonably satisfactory to
FWRLP and the Contributors, setting forth the assignment by each of the
Contributors of their Contributed Interest and his, her or its withdrawal
from the Partnership (or reduction in interest, in the case of Contributors
holding Retained Interests) and the admission of FWRLP and /or its
designee(s) as partners of the Partnership, which Amendment shall be
executed and acknowledged by all the Contributors and FWRLP.
(b) a release from each Contributor releasing the Partnership and
FWRLP (and its designee(s)) as partners of the Partnership from any
obligations and liabilities with respect to the original formation of the
Partnership, and any other matter arising from business done, transactions
entered into or events occurring prior to the Closing Date (other than
those matters for which FWRLP is indemnifying the Contributors pursuant to
Section 15(c)).
(c) An opinion of counsel for Contributors, in form and substance
reasonably acceptable to counsel for FWRLP, to the effect that:
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(i) The Partnership is a duly organized and validly existing
limited partnership in good standing under the laws of the
Commonwealth of Pennsylvania:
(ii) The execution and delivery of this Agreement and all other
agreements delivered in connection herewith or at the Closing, the
consummation of the transactions herein contemplated, and compliance
with the terms of this Agreement and all other agreements delivered in
connection herewith or at the Closing will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of,
or constitute a default under, any note, indenture, mortgage, deed of
trust, contract or other agreement or instrument to which the
Partnership is a party or by which the Partnership is bound (and of
which counsel has knowledge) (other than the Equitable Loan), or any
law or order, rule, regulation, writ, injunction or decree of any
government, governmental instrumentality or court, domestic or
foreign;
(iii) Contributors have power and authority to contribute,
transfer, assign and deliver to FWRLP and its designee(s) all of the
Contributed Interests to be contributed and assigned hereunder which
are owned and /or controlled by them, and the Assignment and the
Amendment delivered pursuant to this Section 10 are in form legally
sufficient to vest in FWRLP and its designee(s) good and marketable
title to the Contributed Interests described therein; and
(iv) To the best of counsel's knowledge, there is no litigation
or investigation pending or threatened against the Partnership, or the
Property, or any part thereof, which might result in any material,
adverse change pertaining to the Property or the Partnership, or the
operations thereof, or which questions the validity of any action
taken in, under or in connection with any of the provisions of this
Agreement.
(d) a schedule from the General Partners updating the Rent Schedule
for the Property and setting forth all arrearages in rents and all
prepayments of rents;
(e) originally executed Leases and Service Contracts and 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 the General Partners, which obligation shall
survive Closing;
(f) [Intentionally Omitted]
(g) an original letter executed by the General Partners advising the
tenants of the Property of the change in control and management of the
Property and directing that rents and other payments thereafter be sent to
FWRLP or as FWRLP may
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direct;
(h) possession of the Property from the General Partners in the
condition required by this Agreement, and the keys therefore;
(i) from each Contributor, the Certification of Non-foreign Status as
provided in Treas. Reg. 1.1445-2(b)(2)(iii)(B) or in any other form as may
be required by the Internal Revenue Code or the regulations issued
thereunder;
(j) such other items and instruments from the General Partners as
shall be required by the Title Company in connection with the issuance of
its title insurance policy to FWRLP pursuant to Section 9(a)(iii)
(including customary General Partners' or owner's affidavit), except that
Contributors shall not be obligated to undertake any financial obligation,
indemnities, escrows or guarantee in favor of the Title Company;
(k) any and all documents from the General Partners necessary to
release the Deposit from escrow with the Title Company and to have said
Deposit returned to FWRLP;
(l) any other documents required by this Agreement to be delivered by
Contributors; and
(m) An amendment to the FWRLP Partnership Agreement, in a form
reasonably acceptable to FWRLP and Contributors, admitting the Contributors
as limited partners of FWRLP and issuing such Units as computed in
accordance with Exhibit Q hereto with respect to the applicable Closing.
11. FWRLP's Performance. At the First Closing, simultaneously with the
deliveries of Contributors pursuant to the provisions of Section 10 above, FWRLP
shall issue to Contributors the Units in the amount and manner specified in
Section 2 and FWRLP and REIT shall execute and deliver those documents
(including without limitation those documents described in Section 10 above to
which FWRLP or the REIT is a party or a required signatory) and take such other
actions required to be taken by FWRLP and REIT at Closing as required under this
Agreement, whereupon the Deposit, and any interest accrued thereon, shall be
returned to FWRLP by the Title Company.
12. Settlement Charges; Prorations and Adjustments.
(a) FWRLP shall pay for the title examination, the title insurance
premium, notary fees and other such charges incident to the Closings.
Although Contributors and FWRLP believe that no real estate transfer or
recording fees or taxes will be due in connection with the transactions
contemplated hereby, if it is finally determined that such taxes are due
and payable in connection herewith, then FWRLP
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shall pay the full amount of such taxes, but Contributors shall either (i)
reimburse to FWRLP one-half (1/2) of such sum paid by FWRLP, or (ii)
return/relinquish to FWRLP the number of Units equal to one-half (1/2) of
the taxes paid by FWRLP divided by the Unit Price. FWRLP and Contributors
shall each pay its own legal fees related to the preparation of this
Agreement and all documents required to settle the transaction contemplated
hereby.
(b) At the First Closing, the following adjustments and prorations
shall be computed as of the First Closing Date, and shall increase or
decrease the Net Asset Value determined under Section 2(a) above, as if the
transaction contemplated by this Agreement was a sale of the Property by
the Partnership to FWRLP:
(i) Taxes. Real estate and personal property taxes shall be
apportioned (based on the fiscal periods for which such taxes are
assessed) as of the Closing Date.
(ii) Assessments. All special assessments and other similar
charges which have become a lien upon the Property or any part thereof
at the Closing Date, and are due and payable through the Closing Date,
shall be paid in full by the Partnership or the Contributors on or
prior to the Closing. All other special assessments or similar charges
shall be adjusted as of the Closing Date.
(iii) Rent. Rent for the month of , and any month after, Closing
collected by the Partnership prior to Closing shall be apportioned as
of the Closing Date. 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 cause the Partnership to use reasonable efforts to
collect (at no cost to FWRLP or the Partnership), or shall assign to
Contributors the right to collect, arrearages in rents due from
tenants as of the First Closing Date. If rents or any portion thereof
received by Contributors or the Partnership 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, shall be
promptly paid to the other party, which obligation shall survive the
Closing.
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 the Partnership after the
Closing which are attributable in whole or in part to any period prior
to the Closing,
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then the Partnership shall promptly pay to Contributors the amount of
such Additional Rents attributable to the period prior to the Closing,
less a proportionate share of any reasonable attorneys' fees, costs
and expenses of collection thereof, and deliver to Contributors a
statement therefor, if and when the tenant paying the same has made
all payments of rents and Additional Rent then due to the Partnership
pursuant to the tenant's Lease, which obligation shall survive the
Closing. Upon written request of Contributors (but only until the time
of the first reconciliation), FWRLP shall cause the Partnership to
provide Contributors with the then current periodic report of the
status of collection of such Additional Rents from such tenants.
(iv) Debt Service on the Equitable Loan. The amount of interest
payable under the Equitable Loan shall be apportioned as of the
Closing Date.
(v) Security Deposits and Cash. The Net Asset Value of the
Property shall be reduced by the aggregate amount of security deposits
which the Partnership is holding or is obligated to hold under the
Leases as of the First Closing Date and shall be increased by the
aggregate amount of cash in the Partnership's bank account(s) as of
the First Closing Date (determined as of 11:59 p.m. on the day
immediately preceding the First Closing Date, but after taking into
account any amounts of cash distributed to the Contributors as
permitted under Section 12(d) below).
(vi) Miscellaneous. All other charges and fees customarily
prorated and adjusted in similar transactions, including utilities,
insurance premiums and charges for Service Contracts to be retained by
the Partnership, shall be prorated as of the Closing Date. 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. To the extent
that water consumption or other utility charges may constitute a lien
against the Property, Contributors agree that an appropriate amount in
respect of water consumption or other utility charges may be held in
escrow by the Title Company in connection with its issuance of a title
insurance policy to FWRLP. The General Partners shall use their
reasonable efforts to have all utility meters read on the Closing Date
so as to accurately determine the proration of current utility bills.
(c) Distributions. The quarterly distributions payable to Contributors
on
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the Units for the first record date after any issuance to Contributors
shall be pro rated based upon the number of days within the quarter
occurring after such issuance to Contributors .
(d) It is acknowledged and agreed that, on or prior to the First
Closing, the General Partners shall cause the Partnership to distribute to
the Contributors all cash and assets of the Partnership other than the
Property; provided that the cash distributed to the Contributors shall not
exceed the cash within the Partnership's bank accounts as of 11:59 p.m. on
the day immediately preceding the First Closing Date.
13. Risk of Loss. The risk of loss or damage to the Property by fire or
other casualty until the First Closing shall be borne by the Contributors. If
prior to Closing (i) condemnation proceedings are commenced against all or any
portion of the Property (other than a de minimis condemnation, which shall mean
a condemnation which does not affect any parking or access areas of the Property
and does not have a material adverse affect on the value 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 Five Hundred Thousand Dollars
($500,000.00) or more based on the good faith estimate of an independent
contractor selected by the General Partners and reasonably approved by FWRLP, or
(iii) if the Property is damaged by an uninsured risk, then FWRLP shall have the
right, upon notice in writing to the Contributors delivered within thirty (30)
days after actual notice of such condemnation or fire or other casualty or
litigation, 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 does not elect to terminate this
Agreement or in the event of fire or other casualty or condemnation not giving
rise to a right to terminate this Agreement by FWRLP, all of the proceeds of
fire or other casualty insurance proceeds and the rent insurance proceeds
payable with respect to the period after Closing or of the condemnation award,
as the case may be, shall remain in the Partnership for the benefit of FWRLP,
and Contributors shall have no obligation to repair or restore the Property;
provided, however, that the Net Asset Value determined under Section 2(b) above
shall be reduced by (a) the "deductible" applied by the Partnership's insurance
policy, or (b) if the Partnership is self-insured, the cost of repairing such
damage. FWRLP shall have the right to participate in the negotiation and
settlement of any casualty or condemnation-related claim if FWRLP does not elect
to terminate this Agreement.
14. Inspection of Property.
(a) FWRLP's Right of Inspection. Subject to the rights of tenants
under the Leases, 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 or FWRLP's intended acquisition of Partnership Interests which
FWRLP deems appropriate, in its sole discretion, during reasonable
-24-
hours and upon reasonable notice to the General Partners. FWRLP agrees to
use all reasonable efforts to minimize disruption to business operations
within the Property during the course of any entries thereon. FWRLP shall
further have complete access to all documentation, agreements and other
information in the possession of Contributors related to the ownership, use
and operation of the Property, to the extent it is readily available to
Contributors, 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 Contributors and hold Contributors 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,
subject to the rights of tenants under the Leases. FWRLP agrees to use all
reasonable efforts to minimize disruption to business operations within the
Property during the course of any entries thereon. In the event that any of
the tests, investigations, market studies and other studies indicate, in
FWRLP's sole discretion, that FWRLP's plans for the Property would not be
feasible for any reason, then FWRLP shall have the right, at its sole
election on or before the date which is sixty (60) after the Acceptance
Date (such period herein referred to as the "Feasibility Period"), to
terminate this Agreement by giving written notice thereof to the General
Partners 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.
(c) Audit. The General Partners hereby agree to allow books and
records related to each Property to be audited (at FWRLP's sole expense) by
an independent, certified public accounting firm selected by FWRLP, and the
General Partners will cooperate and cause its employees and other agents to
cooperate in such auditing process. FWRLP shall provide the General
Partners with prior notice of such audit.
15. Indemnifications.
(a) Indemnification by Contributors. (i) Each Contributor for such
Contributor only, and for no other Contributor, hereby indemnifies and
agrees 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 be asserted against or suffered by any
indemnitee, the Partnership or the Property, or any part thereof, whether
before or after the Closing Date, as a result of, on account of or arising
from any breach by such Contributor of any representation, warranty,
covenant or agreement made by such Contributor herein or in any instrument
or document delivered by such Contributor pursuant to this Agreement. The
indemnification set forth in this Section 15(a) shall
-25-
survive Closing without limitation; provided, however, that the
indemnification for breach of representations or warranties which are
subject to a limited survival period described in Section 5 or elsewhere in
this Agreement shall cease and expire with respect to any claim not raised
by FWRLP, by written notice to the Contributor from whom indemnification is
sought, within such limited survival period.
(ii) Indemnification by Contributors. Subject to Section 6(y)
herein and except as otherwise provided in Section 15(a)(i) above, the
Contributors, jointly and severally, hereby indemnify and agree to
defend and hold harmless the Partnership, 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 Partnership or the
Property, or any part thereof, whether before or after the First
Closing Date, as a result of, on account of or arising from any claim
relating to or arising out of any contract, agreement or other
obligation to which the Partnership was a party or any claim relating
to any encumbrance or other occurrence prior to the First Closing Date
(other than obligations under the Equitable Loan accruing after the
First Closing Date, obligations accruing after the First Closing Date
under the Leases and Service Contracts, items adjusted as of the First
Closing Date under Section 12 above, and other obligations, claims or
agreements expressly assumed by FWRLP in writing), provided (and
solely to the extent) such claim is derived from an occurrence or
breach which took place prior to the First Closing Date, and solely to
the extent such claim is not within the scope of any insurance and/or
indemnity agreement in favor of the Partnership (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). Claims within
the scope of the indemnity set forth in this Section 15(a)(ii) shall
include, without limitation, any and all liabilities for federal and
state income and other taxes (other than real estate taxes) due and
payable with respect to any period (or portion thereof) ending on or
prior to the First Closing Date, and such indemnity shall not be
subject to Section 6(y) of this Agreement. Notwithstanding any other
provision of this Agreement to the contrary, the liability of each
Contributor to FWRLP and its successors and assigns with respect to
any indemnities set forth in this Section 15(a)(ii), any documents
delivered pursuant hereto, and/or any of the transactions contemplated
herein, shall be limited to the right, title and interest of each such
Contributor in the Units issued to such Contributor pursuant to
Sections 2, 19 and 20 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 such
Contributor therein, and in any distributions payable pursuant
thereto, except and solely to the extent the Units so issued have been
converted by such Contributor to Common Stock of the REIT or sold or
otherwise transferred by such Contributor, in which event such
liability may be satisfied out of any assets of such Contributor,
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 into which the Units
are
-26-
exchangeable) issued to such Contributor as of the date of issuance.
Any indemnification of FWRLP or the Partnership by Contributors under
this Section 15(a)(ii) shall survive Closing without limitation.
(b) Indemnification by the General Partners . The General Partners,
jointly and severally, hereby indemnify 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 Partnership or the
Property, or any part thereof, whether before or after the Closing Date, as
a result of, on account of or arising from any breach of any
representation, warranty, covenant or agreement made by the General
Partners herein or in any instrument or document delivered by the General
Partners pursuant to this Agreement. Any indemnification of FWRLP or the
Partnership or other indemnitee under this Section 15(b) shall survive
Closing without limitation (other than indemnification for breach of
representations or warranties which are subject to a limited survival
period described in Section 6 or elsewhere in this Agreement, in which case
such indemnification obligation shall cease and expire with respect to any
claim not raised by FWRLP, by written notice to Contributors, within such
limited survival period).
(c) Indemnification by FWRLP. FWRLP hereby indemnifies and agrees to
defend and hold harmless Contributors and their respective, heirs, personal
representatives, 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 Contributors as a result of, on account of or arising from (i)
any breach of any representation, warranty, covenant or agreement on the
part of FWRLP or the REIT made herein or in any instrument or document
delivered pursuant to this Agreement, and/or (ii) any obligation, claim,
suit, liability, contract, agreement, debt or encumbrance or other
occurrence created, arising or accruing after the Closing Date and relating
to the Property or its operations (including without limitation (1) the
obligations under the Equitable Loan accruing after the First Closing, and
(2) any accrued liabilities and obligations of the Partnership which are
being adjusted at the First Closing pursuant to Section 12 herein). The
foregoing obligations set forth in this Section 15(c) shall survive Closing
without time limitation.
(d) Right to Defend Claim. If any party entitled to indemnification
under this Section 15 (the "Indemnitee") becomes aware of any potential
claim, suit or action which, if successful, will give rise to a right to
indemnification against another party to this Agreement (the "Indemnitor"),
the Indemnitee shall give the Indemnitor prompt written notice of such
potential claim, suit or action and shall give the Indemnitor the right to
defend such claim, suit or action at the sole cost and expense of the
Indemnitor. If the Indemnitor shall undertake to defend such claim, suit or
action, the Indemnitee may, at its own cost and expense, participate in the
defense of such claim, suit or action. If the Indemnitor declines to defend
such claim, suit or action, the Indemnitee's claim for indemnification
against the Indemnitor shall include reasonable
-27-
attorneys' fees and expenses incurred by the Indemnitee in defending such
claim, suit or action.
16. Brokerage Commission. Contributors 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 other than the $225,000.00 fee payable
to Xxxxxx X. Xxxxxxxxxx & Company, Inc., which shall be payable by FWRLP at the
First Closing pursuant to a separate agreement. Contributors 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.
17. 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 Contributors as
full and complete liquidated damages, and as the exclusive and sole right
and remedy of Contributors, whereupon this Agreement shall terminate and
neither party shall have any further obligations or liabilities to any
other party.
(b) Contributors Default. Except for any breaches waived in writing by
FWRLP, if Contributors have breached any of their 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 Contributors under this Agreement
shall be inaccurate or incorrect in any material respect, then FWRLP shall
be entitled, as FWRLP's sole and exclusive right and remedy, to (i) waive
such breach, default or failure and proceed to Closing without abatement of
consideration hereunder, (ii) extend the Closing for such reasonable time
or times as may be necessary in order to enable Contributors to remedy such
breach, default or failure (not to exceed thirty (30) days in the
aggregate), (iii) terminate this Agreement and obtain the return of the
Deposit, and/or (iv) pursue an action for specific performance. In the
event that FWRLP elects to pursue specific performance and FWRLP prevails
in such litigation, in addition to any damages or other relief awarded to
FWRLP, Contributors shall be obligated to pay all reasonable legal fees,
costs and expenses incurred by FWRLP.
(c) The provisions of Sections 17(a) and (b) above shall not be
applicable to any breach or default by a party occurring or first becoming
actually known to the other party after the First Closing, and, as to any
said breach or default, the non-defaulting party may exercise any and all
remedies available at law or in equity, subject, however, to any applicable
limitations on survival expressly provided for in this Agreement.
18. Registration Rights. Contributors and the REIT hereby agree to execute
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at Closing the Registration Rights Agreement attached hereto as on Exhibit K.
19. Retained Interests.
(a) Upon the contribution of the Contributed Interests to FWRLP at
the First Closing, the Contributors holding the Retained Interests (the
"Retained Partners") and FWRLP (and any other party designated by FWRLP to
hold an interest in the Partnership) shall enter into an amended and
restated limited partnership agreement (the "Amended Partnership
Agreement") for the Partnership containing such terms and conditions as are
mutually agreeable to FWRLP and the Retained Partners. The Amended
Partnership Agreement shall provide that (i) FWRLP is the general partner
of the Partnership and shall have exclusive authority to manage the
Property and the Partnership, including without limitation the expenditure
of Partnership funds and the distribution of cash flow, (ii) the Retained
Partners shall be limited partners and shall have no personal liability for
any debts, obligations or claims of the Partnership, (iii) the Retained
Partners shall, in the aggregate, have a capital interest in the
Partnership equal to 11% of the aggregate capital of the Partnership (which
aggregate capital of the Partnership shall equal the Net Asset Value), and
(iv) the Retained Partners shall be entitled to a cumulative 9% priority
return on their capital interest in the Partnership (the "Priority
Return"). The Retained Partners shall retain full right, title and interest
in and to the Retained Interests until the Second Closing.
(b) At the Second Closing, the Retained Partners will contribute the
Retained Interests to FWRLP and, in exchange therefor, FWRLP will issue to
the Retained Partners an aggregate amount of Units calculated as follows:
11% times the Net Asset Value of the Property, divided by the Unit Price.
If, as of the Second Closing, the Retained Partners have not received the
full amount of the Priority Return accrued through the Second Closing Date,
FWRLP shall take such actions as may be required to cause the Partnership
to pay to the Retained Partners the unpaid amount of the Priority Return
accrued through the Second Closing (including contributing or advancing
such funds to the Partnership if necessary).
(c) At the Second Closing, the Retained Partners shall (i) execute,
acknowledge and deliver to FWRLP substantially the same documents set forth
in Section 10(a), (b), (c)(iii) and (m) above with respect to the Retained
Interests, each dated as of the date of the Second Closing and (ii) execute
an affidavit setting forth that all of the representations and warranties
set forth in Section 5 (including without limitation subsection 5(d)
relating to securities law matters) relating to the Retained Interests are
true and correct in all material respects on the date of the Second
Closing.
20. Contingent Units.
(a) Pep Boys currently leases approximately 10,000 square feet of
space at the Property ("Space A"), and Xxxxxxx currently leases
approximately 20,000 square feet of space at the Property ("Space B"). The
General Partners have entered
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in discussions with Pep Boys to relocate from Space A to Space B. The
General Partners have also had discussions with Sears Xxxxxxx & Co. to
lease Space B. FWRLP has expressed a desire to endeavor to lease Space B to
Pep Boys, so that FWRLP may offer to lease Space A to Acme for expansion
purposes. Therefore, upon execution of this Agreement, the General Partners
will not enter into a new lease for, or modify an existing lease, for Space
A or Space B without the prior written consent of FWRLP.
(b) In consideration of the foregoing and subject to the terms and
conditions set forth below, if prior to the third (3rd) anniversary of the
First Closing Date a new lease is entered into for Space A and/or Space B
and (i) the sum of the aggregate initial annual base rent for Space A and
Space B under the new leases (disregarding any initial rent abatement or
allowance), plus the percentage rent that would be payable under the new
lease during the first year thereof assuming that the annual sales of such
new tenant was equal to the 1994 sales of Xxxxxxx, plus the estimated
initial annual pass-through expenses payable under said Leases (i.e.,
common area maintenance costs, real estate taxes, and insurance premiums)
exceed (ii) the aggregate annual base rent payable as of the date of this
Agreement for Space A and Space B under the current Leases with Pep Boys
and Xxxxxxx, respectively, plus the percentage rent, if any, paid based on
1994 sales, plus the current aggregate estimated annual pass-through
expenses payable under said existing leases (such excess is hereinafter
referred to as the "Additional Income"), then additional consideration in
the form of additional Units (the "Contingent Units") will be issued by
FWRLP to the Contributors in the amounts, and subject to the terms and
conditions, set forth below.
(c) The number of Contingent Units to be issued to Contributors shall
be based upon the "Additional Value" attributable to the new lease(s) for
Space A and/or Space B. Subject to Sections 20(d) and (e) below,
"Additional Value" will be computed as follows:
(i) Determine the amount of aggregate Additional Income;
(ii) Subtract from the Additional Income an amount equal to 12%
of the aggregate amount of any capital expenditures, tenant
improvement expenditures and/or allowances, lease buyout expenses and
any leasing commission incurred by FWRLP in connection with the new
leases for Spaces A and B; and
(iii) Multiply the resulting amount by four (4).
As discussed below, Additional Value may be computed more than one time
under this Section 20. If Additional Value is computed two times, the
second computation of Additional Value shall be reduced by the amount of
any positive Additional Value determined when Additional Value was
originally computed. Notwithstanding anything to the contrary, the
aggregate Additional Value taken into account under this Section 20 shall
in no event exceed $750,000.00.
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(d) Additional Value shall first be computed as of the date (the
"First Valuation Date") on which a new tenant commences occupancy of Space
B. The following rules shall apply for purposes of computing Additional
Value:
(i) If Space B is leased to a tenant other than Pep Boys, there
shall be only one computation of Additional Value. In this case
Additional Income and Additional Value shall be determined solely by
reference to the current and new leases for Space B.
(ii) If Space B is leased to Pep Boys and as of the date Pep Boys
commences occupancy of Space B a new lease has been entered into for
Space A, then the "First Valuation Date" shall be deferred until the
date both Space A and Space B are occupied by new tenants and
Additional Value shall be computed only once, taking account of both
new leases.
(iii) If Space B is leased to Pep Boys, and Space A (which is to
be vacated by Pep Boys) has not been leased to a new tenant as of the
date Pep Boys commences occupancy of Space B, then, for purposes of
determining the "Additional Income" as of the First Valuation Date,
the new base rent, percentage rent and pass-throughs for Space A shall
be assumed to be zero (0). In a case described in the preceding
sentence Additional Value shall be computed for a second time as of
the date (the "Second Valuation Date") which is the earlier of the
date a new tenant occupies Space A or, if Space A remains vacant, the
third anniversary of the First Closing Date. As noted above, when
Additional Value is computed as of the Second Valuation Date, there
shall be subtracted from such Additional Value the amount of any
positive Additional Value computed as of the First Valuation Date and
the aggregate amount of Additional Value computed as of the First
Valuation Date and the Second Valuation Date shall not exceed
$750,000.00.
(e) For purposes of computing Additional Value under Section 20(d)(ii)
or (iii) above, Space A shall be deemed to have a new initial base rent of
$8.00 per square foot per year (based on its existing leasable square
footage) plus estimated annual pass-through expenses equal to those
existing under the current Pep Boys lease for Space A if either (i) Space A
has not been leased to a new tenant and remains vacant on the third
anniversary of the First Closing Date or (ii) prior to such third
anniversary of the First Closing Date the Partnership enters into an
agreement with Acme that involves razing Space A. In the case where a new
lease for Space A is entered into with Acme and such new lease involves
razing Space A, the deemed rental value of $8.00 per square foot is a net
value and Additional Value shall not be reduced by any razing,
reconstruction or tenant improvement expenditures and/or allowances with
respect to Space A.
(f) If a positive Additional Value is computed as of the First
Valuation Date or, if applicable, the Second Valuation Date, then FWRLP
shall issue to the Contributors that number of Contingent Units determined
by dividing the Additional Value determined as of the applicable Valuation
Date by the average closing price of REIT common stock (rounded to the
nearest 1/16th) for the fifteen (15) business days immediately preceding
the applicable Valuation Date.
(i) 89% of the Contingent Units described in the first sentence
of this
-31-
Section 20(f) will be issued, no later than 45 days after the
applicable Valuation Date, to the Contributors in the same proportion
as they contributed the Contributed Interests to FWRLP at the First
Closing.
(ii) The remaining 11% of the Contingent Units described in the
first sentence of this Section 20(f) will be issued to the Retained
Partners in proportion to their ownership of the Retained Interests.
The Contingent Units described in this Section 20(f)(ii) will be
issued at the Second Closing Date. Notwithstanding the foregoing
provisions, if there is more than a six-month period of time between a
given Valuation Date at which it is determined that Contingent Units
are due to be issued and the Second Closing Date, then the number of
Contingent Units issued to the Retained Partners at the Second Closing
with respect to such Valuation Date shall be supplemented by an
additional number of Contingent Units calculated by multiplying the
number of Contingent Units that would otherwise be issued to the
Retained Partners at the Second Closing (without reference to this
sentence) by the product of (1) .0075 and (2) the number of months
between the applicable Valuation Date and the Second Closing Date.
An example of the operation of this Section 20 is attached to this
Agreement as Exhibit R.
21. Miscellaneous Provisions.
(a) Completeness and Modification. This Agreement (together with
Exhibits A to R attached hereto), constitutes the entire understanding of
the parties 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 Contributors, provided that, notwithstanding
anything to the contrary contained in this Agreement, FWRLP shall be
entitled to transfer or, at Closing, cause the Partnership to issue a 1%
limited partnership interest in the Partnership to the REIT or to an entity
controlled by, controlling or under common control with the FWRLP, as long
as the Units are issued to Contributors as required herein. This Agreement
shall not be assignable by Contributors.
(d) Waiver; Modification. Failure by FWRLP or Contributors 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 Commonwealth of Pennsylvania.
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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, the
General Partners shall afford FWRLP reasonable access to any and all
information in their 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 the Contributors, the Partnership or FWRLP
concerning confidentiality set forth herein. FWRLP and the REIT agree and
acknowledge that the information provided to them by the General Partners,
the Contributors or the Partnership regarding the Property or the
Partnership is confidential, and that they will not disclose such
information to any other person, other than to their employees, attorneys,
accountants and other consultants, or use such information for any purpose
other than the transaction described herein without the prior written
consent of the General Partners. If this Agreement is terminated or if the
Contribution at the First Closing is not consummated, all information
provided to FWRLP and the REIT, and all copies thereof, shall be returned
to the General Partners.
(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 the General Partners:
Xxxxxx Xxxxxxxx
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Shooster Properties
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx, Esquire
Saul, Ewing, Xxxxxx & Xxxx
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
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 Section 21(i). Any notice required or
permitted to be given by or on behalf of the Contributors hereunder shall
be effective if such notice is executed by at least one of the General
Partners.
(j) Further Assurances. Contributors 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 excepting 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.
(i) Time of the Essence. Time is of the essence in the performance of
all obligations under this Agreement.
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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.,
ATTEST: Its general partner
By: /s/
----------------------------------- --------------------------------
[Assistant Secretary] Xxxxxxx X. Xxxxx
President
[Corporate Seal]
Date of execution: October 2, 1996
WITNESS: CONTRIBUTORS:
/s/
----------------------------------- --------------------------------
XXXXXXX XXXXXXXX
/s/
----------------------------------- --------------------------------
XXXXX XXXXXXXX
/s/
----------------------------------- --------------------------------
XXXXXX XXXXXXXX
/s/
----------------------------------- --------------------------------
XXXXX XXXXXXXX
/s/
----------------------------------- --------------------------------
XXXXXX XXXXXXXX
/s/
----------------------------------- --------------------------------
XXXX XXXXXX
[Signatures continued on Following Page]
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[Signatures continued from Previous Page]
XXXXXXX and XXXXXXX XXXXXX
(Husband and Wife)
By: /s/
----------------------------------- ---------------------------------
XXXXXXX XXXXXX
By: /s/
----------------------------------- ---------------------------------
XXXXXXX XXXXXX
XXXXX AND XXXXXXX XXXXXX
(Husband and Wife)
By: /s/
----------------------------------- ---------------------------------
XXXXX XXXXXX
By: /s/
----------------------------------- ---------------------------------
XXXXXXX XXXXXX
XXXXXXXX HILLS S.C. ASSOCIATES
By: /s/
----------------------------------- ---------------------------------
Name:
Title:
Date of execution: , 1996
----------------
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First Washington Realty Trust, Inc. joins herein solely for the purpose of
making the representations, warranties and covenants contained in Sections 8(a),
8(b), 8(e), 8(f), 8(g), 11, 18 and 21(g) hereof.
FIRST WASHINGTON REALTY
WITNESS: TRUST, INC.
By: /s/
----------------------------------- --------------------------------
Xxxxxxx X. Xxxxx
President
Date of execution: October 2, 1996
-37-
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.
WITNESS: COMMERCIAL SETTLEMENTS, INC.
By: /s/
----------------------------------- --------------------------------
Xxxxxx X. Xxxxxx
President
Date: October 23, 1996
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LIST OF EXHIBITS
EXHIBIT A. Legal Description of Land Recitals
EXHIBIT B. Leases and Rent Schedule Section 6(d)
EXHIBIT C. Service Contracts Section 6(e)
EXHIBIT D. Violations Section 6(c)
EXHIBIT E. Insurance List Section 6(g)
EXHIBIT F. Form of Tenant Estoppel Section 6(i)
EXHIBIT F-1. Tenant Estoppels Section 8(a)(viii)
EXHIBIT G. Litigation Section 6(k)
EXHIBIT H. Operating Statements and Budget Section 6(r)
EXHIBIT I. Personal Property Section 6(t)
EXHIBIT J. Permitted Exceptions Section 9(a)(iii)(B)
EXHIBIT K. Registration Rights Agreement Section 18
EXHIBIT L. Confidential Information Statement Section 8(c)
EXHIBIT M. Form of Allocation Letter Section 8(i)
EXHIBIT N. Mortgage Section 2(c)
EXHIBIT O. Note Section 2(c)
EXHIBIT P. Partnership Agreement Section 6(a)
EXHIBIT Q. Contributed and Retained Interests Section 5(c), 19
EXHIBIT R. Illustration of Section 20 Section 20
[Contributors and FWRLP to Attach Foregoing at Acceptance of this Agreement]
EXHIBIT A
LEGAL DESCRIPTION OF LAND
EXHIBIT B
LEASES AND RENT SCHEDULE
EXHIBIT C
SERVICE CONTRACTS
EXHIBIT D
VIOLATIONS
NONE
EXHIBIT E
INSURANCE LIST
EXHIBIT F
Form of Tenant Estoppel
ESTOPPEL CERTIFICATE
, 199
First Washington Realty Limited Partnership
0000 Xxxx-Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Re: [Name of Shopping Center]
Lease dated ________, 19___, with [name of Tenant]
Gentlemen:
Please be advised that the undersigned tenant hereby certifies as of
the date hereof as follows with respect to the Lease:
Name of Tenant:
Description of Leased Premises:
Date of Commencement of Lease:
Date of Termination of Lease:
Options to Renew:
Base Rental: Annual Rental of $ , payable monthly in advance.
---------------
Real Estate Tax Charges: pro rata: ___ yes ___ no. ( $_________________ payable
monthly in advance)
Percentage Rent: ____% of Gross Receipts over $___________
Common Area Maintenance Charges: pro rata: ___ yes ___ no. ($_________
payable monthly in advance)
Tenant in possession of the premises under the Lease?: Yes
The Lease is unmodified and in full force and effect except for modifications,
listed by number and date on Exhibit A attached hereto.
Amount of rent paid in advance: $
Amount of Security Deposit: $
Compliance with Construction Requirements: Landlord has complied with all
-i-
construction requirements of Tenant, and Tenant has accepted all of the leased
premises under the Lease.
Tenant has not made any claims against Landlord and has no knowledge of any
uncured default on the part of Landlord (If there is knowledge of any uncured
default, please note and attach separate sheet).
Tenant's Right to Purchase: Tenant has no option or right in the nature of a
right of first refusal to purchase or otherwise acquire any interest in the
leased premises.
Tenant's Right of Premature Termination or Option to Renew: Tenant has no right
to premature termination and no right or option to renew or extend the term
beyond its present term and no option to lease additional space, except as
expressly set forth in the Lease.
In the event of foreclosure, Tenant agrees to attorn to the purchaser of the
leased premises at the foreclosure sale.
TENANT:
By:
Name:
Title:
STATE OF )
) ss:
COUNTY OF )
Signed and sealed in my presence this day of , 199 .
---- ------------ ---
Notary Public
[SEAL]
My Commission Expires:
-ii-
EXHIBIT F-1
TENANT ESTOPPELS
o Acme Markets 30,000 s.f.
o TJ Maxx 22,538 s.f.
o Pep Boys 9,800 x.x.
x Xxxxxxx Home Center 20,000 x.x.
x Xxxxxx Drug 9,240 s.f.
o West Coast Video 6,300 s.f.
------------
97,878 s.f.
o Tenant's occupying at least 50% of
the remaining space at the Property.
[(153,979 s.f. - 97,878 s.f.) X 50% = 28,050 s.f.
-iii-
EXHIBIT G
LITIGATION
NONE
EXHIBIT H
OPERATING STATEMENTS AND BUDGET
EXHIBIT I
PERSONAL PROPERTY
NONE
EXHIBIT J
PERMITTED EXCEPTIONS
EXHIBIT K
REGISTRATION RIGHTS AGREEMENT
EXHIBIT L
CONFIDENTIAL INFORMATION STATEMENT
EXHIBIT M
FORM OF ALLOCATION LETTER
EXHIBIT N
MORTGAGE
EXHIBIT O
NOTE
EXHIBIT P
PARTNERSHIP AGREEMENT
EXHIBIT Q
CONTRIBUTED AND RETAINED INTERESTS
A. First Closing: 89% of the Partnership Interests.
=============
Percentage Interest Percentage of
in Partnership Units Issued
Xxxxxxx Xxxxxxxx (Pennsylvania)
Xxxxxx Xxxxxxxx (Florida)
Xxxxxx Xxxxxxxx (Pennsylvania)
Xxxxx Xxxxxxxx (Pennsylvania)
Xxxxxx Xxxxxxxx (Florida)
Xxxx Xxxxxx (Pennsylvania)
Xxxxxxx and Xxxxxxx Xxxxxx (Delaware)
Xxxxx and Xxxxxxx Xxxxxx (Pennsylvania)
Fairless Hills S.C. Associates (Pennsylvania)
B. Second Closing: 11% of the Partnership Interests.
==============
Percentage Interest Percentage of
in Partnership Units Issued
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
EXHIBIT R
ILLUSTRATION OF SECTION 20
