CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made and entered as of
October 8, 1997, by and between (i) SPRING VALLEY JOINT VENTURE, a
District of Columbia Joint Venture (the "Contributor") 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, Contributor is the record and beneficial owner of all of those
certain parcels of real property as more particularly described on Exhibit A
hereto (collectively, the "Land"), together with the shopping center known as
Spring Valley Shopping Center located in Washington, D.C., and all other
buildings and improvements not owned by tenants situated thereon (collectively,
the "Building"), and all personal property and fixtures not owned by tenants
located therein (the "Personal Property"), 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, Contributor and FWRLP desire to enter into this Agreement
relating to the contribution by Contributor to FWRLP of the Property in exchange
for cash and certain interests in FWRLP.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Contribution. Subject to the terms and conditions set forth in this
Agreement, Contributor and FWRLP agree to the contribution by Contributor to
FWRLP (the "Contribution") of all of the Property.
2. Consideration.
(a) In consideration of the Contribution of the Property to
FWRLP, FWRLP shall assume, pay and issue the following (the "Consideration"):
(i) $2,249,000.00, or such lesser amount which represents the outstanding
principal balance with respect to the Existing Loan (as hereinafter defined) as
of Closing (the "Actual Loan Amount"), by FWRLP paying the Existing Loan as
described below; and
-1-
(ii) issue common partnership units of FWRLP (the "Units") in an aggregate
amount calculated as follows: $5,750,000.00 minus the sum of the Actual Loan
Amount, as adjusted for closing or other adjustments herein provided, such total
divided by $25.00 (the "Unit Price") rounded to the nearest one (1) Unit.
(b) At Closing, the Property shall be contributed to FWRLP
with the Property then being subject to the indebtedness, lien and operation of
the First Trust (as defined below). FWRLP will pay off the Actual Loan Amount at
the Closing.
(c) The Property is presently encumbered by a Deed of Trust
and Security Agreement dated May 1, 1986 (the "First Trust") from the
Contributor, as debtor, for the benefit of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and The Valley
Vista Apartments, Limited Partnership, as secured party (the "Lender"), which
First Trust secures an original principal indebtedness of $2,500,796.69 with
interest thereon payable over the term thereof at a fixed interest rate of 9%
per annum, as evidenced by two Notes from CJS Partners, a District of Columbia
general partnership, and Spring Valley Partners, a District of Columbia limited
partnership to Lender ("Note"). The First Trust and Note and all documents and
instruments executed in connection therewith are collectively referred to as the
"Existing Loan." The Existing Loan is non-recourse to Contributor and the
Existing Loan may be prepaid in full at any time without any prepayment penalty
or premium. The outstanding principal balance under the Existing Loan as of the
date hereof is approximately $2,248,999.00.
3. Deposit.
(a) Within three (3) business days after the date of delivery
to FWRLP of an original of this Agreement executed by Contributor together with
completed Exhibits hereto (the date of such delivery to FWRLP being the
"Acceptance Date"), FWRLP shall deliver to Commercial Settlements, Inc., ▇▇▇▇ ▇
▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (the "Title Company"), as escrow agent, a
deposit ("Deposit") of Fifty Thousand Dollars ($50,000.00) by check payable to
the Title Company. If FWRLP shall fail to deliver the Deposit when required to
do so, this Agreement shall become null and void and the parties hereto shall be
relieved of all further liability and obligation to each other.
(b) The Title Company will immediately provide Contributor
with written evidence of receipt of such Deposit. The Title Company shall place
the Deposit in an interest-bearing account within three (3) days after the date
of receipt thereof, and interest on the Deposit shall accrue to the benefit of
the party entitled to the Deposit and shall constitute a part of the Deposit for
all purposes hereof. The Deposit shall be held by the Title Company pursuant to
the terms and conditions of this Agreement.
-2-
(c) In the event that, at any time prior to Closing,
Contributor or FWRLP provides Title Company with a certification (a copy of
which shall be delivered contemporaneously to the other party) that the
Contributor or FWRLP, as the case may be, is entitled to the Deposit pursuant to
the terms of this Agreement, Title Company shall deliver the Deposit to such
party within ten (10) 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 seven (7) business days of Title Company's receipt of the initial
certification. In such event, Title Company shall hold the Deposit pending
resolution of such dispute.
(d) The parties acknowledge that (i) Title Company is acting
solely as escrow agent at their request and for their convenience, (ii) Title
Company shall not be deemed to be the agent of either of the parties, and (iii)
Title Company shall not be liable to either of the parties for any act or
omission on its part unless taken or suffered in bad faith, in willful disregard
to this Agreement or involving gross negligence. Contributor and FWRLP shall
jointly and severally indemnify and hold Title Company harmless from and against
all costs, claims and expenses, including reasonable attorneys' fees, incurred
in connection with the performance of Title Company's duties hereunder, except
with respect to actions or omissions taken or suffered by Title Company in bad
faith, in willful disregard of this Agreement or involving gross negligence on
the part of Title Company; provided, however, that if any litigation shall arise
between the Contributor and FWRLP in connection therewith, the non-prevailing
party shall pay all such costs, claims and expenses of the Title Company. In the
event any dispute shall arise between the parties hereto as to the disposition
of the Deposit, the Title Company's sole responsibility may be met, at the Title
Company's option, by paying the Deposit into the court in which relevant
litigation is pending between the parties, or by initiating an interpleader
action, and upon payment of the Deposit into court, neither Contributor nor
FWRLP shall have any further right, claim, demand, or action against the Title
Company.
4. Closing. Except as otherwise provided in this Agreement, the
Contribution contemplated herein shall be consummated at the "Closing", which
shall take place on the date (the "Closing Date") specified by FWRLP on not less
than ten (10) days notice to Contributor, provided that the Closing Date shall
not be later than thirty (30) days after the end of the Feasibility Period (as
defined and described in Section 13(b) hereof). The Closing shall take place at
the offices of Contributor, or at such other place as may mutually agreed upon
by Contributor and FWRLP.
5. Representations and Warranties of Contributor. In order to induce
FWRLP to enter into this Agreement and to issue the Common Units (among other
things) in consideration for the Property, Contributor hereby makes the
following representations, warranties and covenants, each of which is material:
(a) Authority of Contributor. Contributor is a general partnership duly
organized and in good standing under the laws of the District of Columbia.
Contributor
-3-
has all necessary power and authority and has taken all necessary partnership
action to execute, deliver and perform this Agreement. No consents of any
persons other than those executing this Agreement as Contributor are required
for such execution or to enable Contributor to consummate the transactions
contemplated hereby. This Agreement is the valid and binding obligation of
Contributor, enforceable against it in accordance with its terms, except that
such enforcement may be subject to bankruptcy, conservatorship, receivership,
reorganization, insolvency, moratorium or similar laws or procedures relating to
or affecting creditors' rights generally and to general principles of equity.
(b) Title. Contributor is the sole owner of fee simple title
to the Property, and, to the best of Contributor's knowledge, such title is free
and clear of all liens, encumbrances, covenants, conditions, restrictions and
other matters affecting title, except for the Permitted Exceptions (as defined
in Section 8(a)(iii)).
(c) Compliance with Existing Laws. To the best of
Contributor's knowledge, (i) Contributor is not in violation of, and has
complied with any and all applicable building, zoning, environmental or other
ordinances, statutes or regulations of any governmental agency, in respect to
the ownership, use, maintenance, condition and operation of the Property or any
part thereof, (ii) Contributor 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 Contributor, and (iii) the requisite
certificates of the fire marshalls or board of fire underwriters have been
issued for the Property. To the best of Seller's knowledge, the Property is
zoned C2-A, and no variance, exception or other modification of applicable
zoning laws was necessary in order to authorize the use or occupancy of the
Property or any portion thereof.
(d) Leases. True, correct and complete copies of all of the
leases of the Property and any amendments thereto (collectively, the "Leases")
have been delivered to FWRLP. Attached hereto as Exhibit B is a description of
all of the Leases and a current rent schedule ("Rent Schedule") covering the
Leases. There are no leases or tenancies of any space in the Property other than
those set forth in Exhibit B or, to the best of Contributor's knowledge, any
subleases or subtenancies unless otherwise noted therein. Except as otherwise
set forth in Exhibit B or elsewhere in this Agreement:
(i) to the best of Contributor's knowledge, the
Leases are in full force and effect and constitute a legal,
valid and binding obligation of the respective tenants and are
assignable by Contributor to FWRLP;
(ii) no tenant has an option to purchase the Property;
(iii) no renewal or expansion options have been
granted to the tenants, except as provided in the Leases;
-4-
(iv) to the best of Contributor's knowledge, Contributor 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;
(vi) all work for tenant alterations and other work
or materials contracted for by Contributor and any tenant has
been completed, and all work and materials have been fully
paid for or will be paid for by Closing by Contributor and all
contributions to tenants for tenant improvements, if any, have
been paid in full or will be paid for by Closing by
Contributor;
(vii) Contributor has not sent written notice to any
tenant claiming that such tenant is in default, which default
remains uncured, and to the best of Contributor's knowledge,
no tenant is in default under its Lease, except as indicated
in Exhibit B hereto;
(ix) no action or proceeding instituted against Contributor by any tenant
is presently pending in any court; and
(x) there are no security deposits other than those
set forth in Exhibit B.
(e) Service Contracts. Attached hereto as Exhibit C is a
complete and correct list of all contracts or agreements relating to the
management, leasing, operation, maintenance or repair of the Property (the
"Service Contracts"). All of the Service Contracts set forth on Exhibit C shall
be assumed by FWRLP as of the Closing Date, unless FWRLP notifies Contributor
before the end of the Feasibility Period to terminate any or all of the Service
Contracts. No Service Contract will be terminated, amended, modified or
supplemented prior to the Closing Date without FWRLP's prior written approval
(except that any management and leasing agreement shall be terminated as of
Closing).
(f) Tax Bills. Attached hereto as Exhibit D are true and
correct copies of tax bills issued by any applicable Federal, state or local
governmental authority to Contributor with respect to the Property for the most
recent past and current tax years, and any new assessment received with respect
to a current or future tax year.
(g) Insurance. Attached hereto as Exhibit E are copies of all
hazard, liability and other insurance policies presently affording coverage with
respect to the Property. Contributor shall maintain in full force and effect all
such policies until the Closing Date and following expiration of the Feasibility
Period shall cause its insurer to
-5-
name FWRLP as an additional insured as a contract party on its rent loss policy
with respect to the Property.
(h) Condition of Property. Possession of the Property shall be
delivered to FWRLP at Closing in its "as is, where is" condition as of the date
of FWRLP's execution of this Agreement subject to the provisions of Section
6(a). Contributor has no knowledge of any material defect in the structural
elements of the Property.
(i) Tenant Estoppel. Contributor represents and warrants that
it shall use reasonable good faith efforts to obtain and deliver to FWRLP within
thirty (30) days after the Acceptance Date, a tenant estoppel letter in the form
attached hereto as Exhibit F (or such other form as required by FWRLP's mortgage
lender) from each of the tenants of the Property confirming the information set
forth in Exhibit B attached hereto. Contributor hereby agrees that FWRLP may
participate in the procurement of said tenant estoppel letter(s) subject to the
consent of Contributor.
(j) Condemnation Proceedings. No condemnation or eminent
domain proceedings are pending or, to the best of Contributor's knowledge,
threatened against the Property or any part thereof, and Contributor has made no
commitments to and has received no notice, oral or written, of the desire of any
public authority or other entity to take or use the Property or any part thereof
whether temporarily or permanently, for easements, rights-of-way, or other
public or quasi-public purposes.
(k) Litigation. No litigation is pending or, to the best of
Contributor's knowledge, currently threatened, including administrative actions
or orders relating to governmental regulations, affecting the use, operation or
ownership of the Property or any part thereof or Contributor's right to
contribute the Property as contemplated herein, except as set forth on Exhibit G
hereof.
(l) 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 Contributor is
a party or by which the Contributor or the Property is bound, (ii) violate any
restriction, requirement, covenant or condition to which the Contributor is
subject or by which Contributor or the Property is bound, (iii) constitute a
violation of any applicable code, resolution, law, statute, regulation,
ordinance, rule, judgment, decree or order, or (iv) result in the cancellation
of any contract or lease pertaining to the Property.
(m) Entrances. To the best of Contributor's knowledge, except
for access over property currently owned by Exxon (for which no easement
exists), access to any portion of the Land is not obtained from adjoining public
roads by means of easements, rights-of-way or licenses across lands or premises
not included within the Property.
-6-
(n) Separate Tax Lot and Subdivision. To the best of
Contributor's knowledge, each parcel of Land is the subject of a separate
subdivision, and each parcel of Land is assessed for tax purposes as one or more
separate and distinct parcels.
(o) Hazardous Waste. To the actual knowledge of Contributor
without investigation, there has been no discharge, spillage, uncontrolled loss,
seepage or filtration (a "Spill") of oil, petroleum or chemical liquids or
solids, liquid or gaseous products or any hazardous waste or hazardous substance
(as those terms are used in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, the Resource Conservation
and Recovery Act of 1976, as amended, or in any other applicable federal, state
or local laws, ordinances, rules or regulations relating to protection of public
health, safety or the environment, as such laws may be amended from time to
time) at, upon, under or within the Land or any contiguous real estate.
Contributor has not caused, and shall not permit to exist any condition which
may cause a Spill at, upon, under or within the Land or any contiguous real
estate. To Contributor's actual knowledge, there is no proceeding or action
pending or threatened by any person or governmental agency regarding the
environmental condition of the Property. To the Contributor's actual knowledge
without investigation, the Building is free of asbestos. Contributor advises
that the Property is adjacent to a gas station.
(p) Operating Statements. Attached hereto as Exhibit H are
true and correct operating statements of the Property for fiscal years 1994,
1995, 1996 and 1997 (through June 30, 1997). To Contributor's knowledge, there
has been no adverse change in the Property or the operation thereof which would
materially adversely affect the economic condition of the Property. Also
attached as Exhibit H is a copy of the 1997 operating budget for the Property.
(q) Utilities. To the best of Contributor's knowledge,
adequate, usable public sewers, public water facilities, gas and electrical
facilities necessary to the operation of the Property are installed in and are
duly connected to the Property and can be used without any charge except the
normal deposits, if any, and usual metered utility charges and sewer charges.
(r) Personal Property. Attached hereto as Exhibit I is a true,
correct and complete inventory of all personal property ("Personal Property"),
if any, owned by Contributor and used in the management, maintenance and
operation of the Property (other than trade fixtures or personal property of
tenants).
(s) Certificates of Occupancy. Contributor will not amend any
certificates of occupancy for the Property and will maintain them in full force
and effect to the extent Contributor is responsible for them.
(t) Licenses and Permits. To the best of Contributor's
knowledge, all licenses and permits have been issued to Contributor by all
applicable governmental
-7-
authorities which are necessary for the ownership, management and operation of
the Property (the "Licenses"). Contributor has received no notice, nor has any
knowledge, that it is lacking any required permit or license.
(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) Securities Law Matters.
(i) Contributor and each of its partners and the
partners of its partners who receive Units (the "Partners") is
an "accredited investor" as such term is defined under Rule
501 promulgated under the Securities Act of 1933, as amended
(the "Securities Act");
(ii) A list of the Partners will be delivered to
FWRLP within five (5) days after the end of the Feasibility
Period;
(iii) The Partners have their primary residence in
the States of Maryland and Virginia and the District of
Columbia;
(iv) Contributor will hold the Units for its own
account for investment purposes only and not with a view to
distribution and does not intend to distribute or resell the
Units, except as expressly set forth in the last paragraph of
this Section 5(v) below;
(v) Taking into account the personnel and resources
Contributor can practically bring to bear on the acquisition
of the Units in FWRLP contemplated hereby, 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 it deems
relevant in making an informed decision to acquire the Units
(including the Confidential Information Statement, as
supplemented through the date hereof, attached hereto as
Exhibit L which contains the First Amended and Restated
Agreement of Limited Partnership of FWRLP and any Amendments
thereto (the "Partnership Agreement");
(vi) 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
-8-
promulgated thereunder and with the terms and conditions of
the Partnership Agreement;
(vii) Contributor acknowledges that the Units to be
issued must be held 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;
(viii) Prior to the issuance of the Units,
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 Partnership Agreement; and
(ix) Contributor acknowledges and agrees that,
notwithstanding Section 8.6 of the Partnership Agreement, the
Units to be issued hereunder shall not be redeemable for cash
or exchangeable for Common Stock in the REIT for a period of
thirteen (13) months from the date of issuance to Contributor.
FWRLP hereby agrees that, at Closing, Contributor may transfer the
Units to its Partners, or may request FWRLP to issue the Units directly to its
Partners, provided that the Partners receiving such Units shall, in writing,
make the representations, warranties and covenants contained in and agree to be
bound (on a several basis with respect to matters pertaining to such Partners)
by all of the provisions of this Section 5(v) and any other provision of this
Agreement relating to the Units (in lieu of Contributor), and by accepting such
Units hereby make such representations, warranties and covenants and agree to be
so bound.
6. Obligations of Contributor Pending Closing. From and after the date
of this Agreement through the Closing Date, Contributor covenants and agrees as
follows:
(a) Maintenance and Operation of the Property. Contributor
will cause the Property to be maintained in its present order and condition,
normal wear and tear excepted, and will cause the continuation of the normal
operation thereof, including the purchase and replacement of fixtures and
equipment, and the continuation of the normal practice with respect to
maintenance and repair in the ordinary course of business so that the Property
will, except for normal wear and tear, be in substantially the same condition on
the Closing Date as on the Effective Date.
(b) Licenses. Contributor shall use its best efforts to
preserve in force all Licenses and to cause those expiring to be renewed.
(c) Changes in Representations. Contributor shall notify FWRLP
promptly, and FWRLP shall notify Contributor promptly, if either becomes aware
of any
-9-
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. From the Acceptance Date to the
expiration of the Feasibility Period provided for in Section 13, Contributor
shall have the right to enter into new leases for space at the Property ("New
Lease(s)") or to amend, modify, renew, supplement or extend any Lease in any
respect or approve any assignment of leases or subletting of leased space, or
terminate any Lease (with respect to any provision amending, modifying,
renewing, supplementing or extending, etc. above, "Amended Lease(s)"), and as to
any Amended or New Leases entered into by Contributor during this period,
Contributor shall give FWRLP notice (including therewith copies of the Amended
and New Leases and all relevant data related to the particular Amended or New
Lease) of such Amended and/or new Leases within two (2) days after the entry
into any Amended or New Lease, but, in any event, not later than seven (7) days
prior to the expiration of the Feasibility Period. After the expiration of the
Feasibility Period, Contributor 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 the terms of any existing
lease (and then only in accordance with the terms of such lease), or enter into
new leases or approve any assignment of leases or subletting of leased space, or
terminate any Lease. Prior to Closing, Contributor shall not apply all or any
part of the security deposit of any tenant unless such tenant is in default and
has vacated the Property.
(e) Obligations as to Existing Loan. Contributor shall make
all payments required to be made under the Existing Loan when due, shall perform
all obligations under the Existing Loan and shall keep the Existing Loan free
from default.
7. Representations, Warranties and Covenants of FWRLP. In order to
induce Contributor to enter into this Agreement and to contribute the Property
to FWRLP, FWRLP hereby makes the following representations, warranties and
covenants, each of which is material and shall survive Closing to the extent
provided in Section 18(p) herein:
(a) Authority of FWRLP. FWRLP is a limited partnership duly
organized and existing and in good standing under the laws of the State of
Maryland. Subject to Section 8(a) (viii), FWRLP has all necessary power and
authority to execute, deliver and perform this Agreement and consummate all of
the transactions contemplated by this Agreement. Subject to Section 8(a) (viii),
this Agreement is the valid and binding obligation of FWRLP, enforceable against
it in accordance with its terms, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, reorganization, insolvency,
moratorium or similar laws or procedures relating to or affecting creditors'
rights generally and to general principles of equity.
(b) No Defaults. Neither the execution of this Agreement nor
the consummation of the transactions contemplated hereby will: (i) conflict
with, or result in
-10-
a breach of, the terms, conditions or provisions of, or constitute a default
under, the Partnership Agreement or any agreement or instrument to which FWRLP
is a party, (ii) violate any restriction, requirement, covenant or condition to
which the FWRLP is subject, and (iii) constitute a violation of any applicable
code, resolution, law, statute, regulation, ordinance, rule, judgment, decree or
order.
(c) Vacant Space. FWRLP hereby further agrees that if any
rentable space in the Property is vacant on the Closing Date, FWRLP shall accept
the Property subject to such vacancy, provided that the vacancy was not
permitted or created by Contributor in violation of any restrictions contained
in this Agreement.
(d) 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 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, is in full force and effect as of the date hereof, 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.
(e) Allocation of Non-Recourse Debt. At least fifteen (15)
days prior to the Closing, FWRLP shall provide the Contributor with a letter
from its independent certified public accountants indicating the amount of FWRLP
non-recourse indebtedness that will be allocated to Contributor's Units for
federal income tax purposes immediately after the Closing. The letter will
contain a computation of the amount of FWRLP non-recourse indebtedness allocable
to Contributor based on certain assumptions (some of which will be provided by
Contributor or its counsel), and the results for the contribution of the
Property by the Contributor. If the aforementioned accountant's letter delivered
to the Contributor prior to the Closing indicates that the amount of FWRLP
non-recourse indebtedness that will be allocated to Contributor's Units
immediately after the Closing is not sufficient to avoid triggering a taxable
gain to Contributor on Contributor's contribution of the Property to FWRLP, then
the Contributor 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 Contributor, 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.
(f) Holding Period. Except in connection with a sale of all or
substantially all of FWRLP's assets or a merger or consolidation of FWRLP, in no
event shall FWRLP voluntarily sell or otherwise dispose of the Property (other
than pursuant to a condemnation or under threat of condemnation) for a period of
seven (7) years following the Closing Date, unless (i) it is pursuant to a
tax-free exchange such that no taxable gain would be incurred by Contributor, or
the Partners to which Units may be distributed by Contributor, as a result of
such sale or other disposition of the Property or
-11-
(ii) FWRLP indemnifies and agrees to hold harmless Contributor from any Federal
and state income tax consequences attributable to such sale or other
disposition.
(g) FWRLP will use the "traditional" method under Section
704(c) of the Internal Revenue Code in connection with the Contribution of the
Property.
(h) The FWRLP Partnership Agreement provides that Units may be
transferred or pledged only with the consent of the general partner of FWRLP.
FWRLP hereby agrees that such consent of the general partner shall not be
unreasonably withheld with respect to a transfer or pledge of the Units to be
issued to Contributor or the Partners to which the Units may be distributed by
Contributor.
(i) Notwithstanding the provisions of the FWRLP Partnership
Agreement, when the Units issued to Contributor, or the Partners to which the
Units may be distributed by Contributor are redeemable or exchangeable as
provided in this Agreement, such Units will be exchangeable for common stock of
the REIT (rather than redeemable for cash) unless the general partner of FWRLP
reasonably believes that the issuance of common stock would have an adverse
effect on FWRLP or the REIT.
(j) FWRLP will use its best efforts to cause the cash
distributions made with respect to the Units issued to Contributor, or the
Partners hereunder to which the Units may be distributed by Contributor, to be
equal in amount to the cash distributions that would have been paid to
Contributor, or to the Partners to which the Units may be distributed by
Contributor, if it or they had exercised the Exchange Rights as of the date
hereof and received REIT common stock in exchange for such Units.
8. Conditions Precedent to Closing.
(a) It shall be a condition precedent of FWRLP's obligation to
make a full settlement hereunder that each and every one of the following
conditions shall exist on the Closing Date:
(i) Representations and Warranties. Contributor's
representations and warranties hereunder shall be true and
correct in the same manner and with the same effect as though
such representations and warranties had been made on and as of
the Closing.
(ii) Zoning. No proceedings shall have occurred or be
pending to change, redesignate or redefine the zoning
classification of the Property to a more restrictive
classification than presently exists.
(iii) Title. Title to the Property shall be
marketable, good of record, and insurable by the Title Company
at standard rates or less, pursuant to a full coverage ALTA
Form-B (Rev. 1970 and 1984) owner's title insurance policy (or
an unconditional commitment therefor) without
-12-
any exceptions ("Printed form" or otherwise) other than the
Permitted Exceptions, and in addition, providing affirmative
coverage satisfactory to FWRLP insuring against any mechanic's
or materialmen's lien arising from goods, labor or materials
provided to the Property prior to the Closing Date. The
"Permitted Exceptions" are:
(A) the lien of current real estate taxes and
special assessments not yet due and payable;
and
(B) such other matters which are listed on Exhibit J
attached hereto. Notwithstanding anything to the
contrary contained in this paragraph (B),
Contributor, at or prior to Closing, shall cause to
be satisfied and released of record all mortgages,
deeds of trust, financing statements, judgements,
liens and other matters that may be satisfied by
payment of a liquidated sum and that first appears of
record after the date hereof.
(iv) Leasing Brokerage/Property Management
Agreements. Contributor shall have terminated any and all
leasing brokerage agreements and property management
agreements with respect to the Property effective as of the
Closing. All responsibility for dealings with any such brokers
and agents, including without limitation the payment of any
outstanding or contingent claims, shall be the sole
responsibility of Contributor. Contributor agrees that it will
indemnify and hold FWRLP, its successors, assigns, partners,
agents and employees, harmless against any such claims and/or
losses which might be incurred by such indemnitees in
connection with any outstanding and/or contingent leasing
commissions or fees or management fees. The provisions of this
subparagraph (iv) shall survive Closing without limitation.
(v) Performance by Contributor. Contributor shall
have complied in all material respects with and not be in
material breach of any of its covenants or obligations under
this Agreement.
(vi) Tenant Estoppels. FWRLP shall have received (A)
a tenant estoppel letter in the form attached hereto as
Exhibit F from each of the tenants at the Property or such
other form as is reasonably acceptable to FWRLP (or in such
form as required by FWRLP's mortgage lender), confirming the
information set forth in the Leases and Rent Schedule attached
hereto as Exhibit B for such tenants and containing no
material changes therefrom, and (B) any subordination and
attornment agreements required by FWRLP's mortgage lender.
(vii) Existing Mortgages. Contributor shall have
delivered to the Title Company such releases or other
instruments necessary to release of
-13-
record and beneficially any and all existing mortgages, deeds
of trust, financing statements or other security documents
affecting the Property.
(viii) FWRT Board Approval. The Board of Directors of
FWRT shall have approved this Agreement and the transactions
contemplated hereby on or before the last day of the
Feasibility Period. In the event that the aforesaid condition
is not satisfied by the end of the Feasibility Period, FWRLP
may elect to terminate this Agreement by giving Contributor
written notice thereof before the expiration of the
Feasibility Period 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. If
FWRLP does not terminate this Agreement as set forth in this
subsection 8(a)(viii), then the condition precedent set forth
in this subsection 8(a)(viii) shall be deemed waived.
(b) Failure of Condition. In the event of the failure by the
Closing Date of any condition precedent set forth above, FWRLP shall notify
Contributor in writing, and if Contributor does not correct such failure (if
valid) within five (5) business days after such notice, then FWRLP, at its sole
election, may (a) terminate this Agreement, in which event the Deposit and any
interest thereon shall be returned to FWRLP and, except as otherwise provided in
Section 16 hereof, neither party shall have any further obligations or
liabilities to the other; or (b) proceed to Closing and, if a default, avail
itself of any legal or equitable remedy FWRLP may have, except as to any default
of Contributor waived in writing by FWRLP or deemed to be waived pursuant to the
provisions of this Agreement on or before the Closing Date; or (c) other than a
failure of item (viii) of Section 8(a) above, extend the Closing Date for such
reasonable time period as may be determined by FWRLP (but in no event for more
than three (3) months from the Closing Date then in effect) in order to permit
the satisfaction of any condition precedent not so fulfilled.
(c) Notwithstanding anything in this Agreement to the
contrary, if (a) FWRLP has actual knowledge on the Closing Date that (i) any
representation or warranty made by Contributor is untrue or contains an
omission, or (ii) any condition precedent to Contributor's obligations set forth
in this Agreement cannot be or has not been satisfied, and (b) notwithstanding
such knowledge, FWRLP elects to consummate the Closing under this Agreement,
then (c) FWRLP shall be deemed to have waived such untrue representation,
warranty, or failed condition precedent; provided, however, that such untrue
representation or warranty or failed condition precedent shall not be deemed
waived if such failure was due to the willful misconduct or bad faith of
Contributor after the Acceptance Date.
9. Contributor's Deliveries. Contributor shall execute, acknowledge and
deliver to FWRLP at the Closing the following documents, each dated on the
Closing Date:
-14-
(a) a special warranty deed, in form and substance reasonably
satisfactory to FWRLP and Title Company, conveying good and marketable fee
simple title to the Property, free and clear of all liens, encumbrances,
easements and restrictions of every nature and description, except for the
Permitted Exceptions;
(b) a ▇▇▇▇ of sale which shall convey to FWRLP good title to
all the Personal Property, free and clear of all liens and encumbrances;
(c) an affidavit setting forth that all of Contributor's
representations and warranties are true and correct in all material respects as
of the Closing Date;
(d) an assignment and assumption of the Leases, together with
all originally executed Leases, and the security deposits shall be paid to
FWRLP;
(e) an assignment of Licenses, warranties and Service
Contracts, if any, which are to be assumed by FWRLP, together with the
originally executed Service Contracts which are to be assumed;
(f) a schedule updating the Rent Schedule for the Property and
setting forth all arrearages in rents and all prepayments of rents;
(g) copies of books, records, operating reports, files and
other materials related to the ownership, use and operation of the Property, to
the extent that any exist and are in the possession of Contributor, which
obligation shall survive Closing;
(h) Tenant estoppel letters as required in Section 8(a)(vi).
(i) an original letter executed by Contributor advising the
tenants of the Property of the contribution of the Property to FWRLP and
directing that rents and other payments thereafter be sent to FWRLP or as FWRLP
may direct;
(j) possession of the Property in the condition required by this Agreement,
and the keys therefore;
(k) the Certification of Non-foreign Status 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;
(l) a standard title company affidavit as to mechanic's liens
and possession reasonably acceptable to Contributor;
(m) any and all documents necessary to release the cash
constituting the Deposit from escrow with the Title Company and to have said
Deposit returned to FWRLP;
-15-
(n) an amendment to the Partnership Agreement of FWRLP, in a
form reasonably acceptable to FWRLP and Contributor, admitting the Contributor
(or the Partners receiving Units, if applicable) as a limited partner(s) of
FWRLP and issuing the Units to Contributor (or the Partners who are to receive
Units, if applicable) computed in accordance with Section 2 herein; and
(o) any other documents required by this Agreement to be
delivered by Contributor.
10. FWRLP's Performance. At Closing, simultaneously with the deliveries
of Contributor pursuant to the provisions of Section 9 above, FWRLP shall pay
the Actual Loan Amount to Lender and issue the Units to Contributor in the
manner specified in Section 2, whereupon the Deposit, and any interest accrued
thereon, shall be returned to FWRLP by the Title Company. In addition to the
Units, FWRLP shall deliver to Contributor at Closing the following items:
(a) an affidavit setting forth that all of FWRLP's
representations and warranties are true and correct in all material respects as
of the Closing Date; and
(b) an assumption of the Leases as of the Closing Date.
11. 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 Closing. The
cost of preparation of the deed for the Property shall be borne by Contributor.
All real estate transfer and recording fees and taxes and documentary stamps in
connection with this transaction shall be borne equally by Contributor and
FWRLP. FWRLP and Contributor 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) In addition to the foregoing, at the Closing, the
following adjustments and prorations shall be computed as of the Closing Date,
as follows:
(i) Taxes. Real estate and personal property taxes
shall be apportioned 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, if any, shall be paid in full by
Contributor at the Closing. All other special assessments or
similar charges shall be adjusted as of the Closing Date.
(iii) Rent and Security Deposits. Rent for the month
of, and any month after, Closing collected by Contributor
prior to Closing shall be
-16-
adjusted as of the date 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. At
Contributor's election (i) FWRLP will institute suit at the
request of Contributor to collect arrearages due as of the
Closing Date provided all costs (including reasonable
attorneys' fees) in connection therewith are paid by
Contributor, or (ii) FWRLP shall assign to Contributor all
rights with respect to such arrearages and Contributor may
pursue collection thereof. If rents or any portion thereof
received by Contributor or FWRLP after the Closing Date are
payable to the other party by reason of this allocation, the
appropriate sum, less a proportionate share of any reasonable
attorneys' fee, costs and expenses of collection thereof,
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 FWRLP after the Closing which are attributable in
whole or in part to any period prior to the Closing, then
FWRLP shall promptly pay to Contributor its proportionate
share thereof, less a proportionate share of any reasonable
attorneys' fees, costs and expenses of collection thereof (if
any), if and when the tenant paying the same has made all
payments of rents and Additional Rent then due to FWRLP
pursuant to the tenant's Lease, which obligation shall survive
the Closing. Notwithstanding the foregoing, FWRLP shall (i)
pay to Contributor at Closing the projected amount of
CVS/Pharmacy monthly percentage rent accrued through the date
of Closing based upon reasonable estimates, and (ii) be
entitled to all CVS/Pharmacy percentage rent collected after
Closing, subject to adjustment as set forth in subsection
11(b)(v) below.
(iv) Debt Service on the Existing Loan. Contributor
shall be liable for all interest payable under the Existing
Loan through the Closing Date.
(v) Miscellaneous. All other charges and fees
customarily prorated and adjusted in similar transactions,
including utilities, insurance premiums and charges for
Service Contracts and other liabilities incurred in the
ordinary course of business to be assumed by FWRLP, 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,
-17-
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 ▇▇▇▇ or upon
completion of final computations. Contributor agrees 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. Contributor shall use its best efforts to have all
utility meters read on the Closing Date so as to accurately
determine its share of current utility bills.
(c) Distributions. The quarterly distributions payable to
Contributor on the Units for the first record date after Closing shall be pro
rated based upon the number of days within the quarter occurring after Closing.
12. Risk of Loss. The risk of loss or damage to the Property by fire or
other casualty until delivery of the deed of conveyance shall be borne by
Contributor. If prior to Closing (i) condemnation proceedings are commenced
against all or any material portion of the Property, or (ii) if the Property is
damaged by fire or other casualty to the extent that the cost of repairing such
damage shall be One Hundred Thousand Dollars ($100,000.00) or more or if tenants
of the Property (occupying in excess of 4,000 square feet in the aggregate)
shall exercise a termination right available under its lease because of such
damage, or (iii) if the Property is damaged by an uninsured risk; or (iv) if the
Property becomes subject to litigation which may deprive FWRLP of any material
benefit to which it would become entitled pursuant to this Agreement, then FWRLP
shall have the right, upon notice in writing to the Contributor delivered within
thirty (30) days after actual notice of such condemnation or fire or other
casualty or litigation, 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 not giving rise to a
right to terminate this Agreement by FWRLP, FWRLP shall be entitled to an
assignment of all of Contributor's share of the proceeds of fire or other
casualty insurance and rent insurance proceeds payable with respect to the
period after Closing or of the condemnation award, as the case may be, and
Contributor shall have no obligation to repair or restore the Property;
provided, however, that the Unit portion (based on the Unit Price) of the
Consideration shall be reduced by an amount equal to the sum of (a) the
"deductible" applied by the Contributor's insurance policy, or (b) if the
Contributor is self-insured, the cost of repairing such damage. FWRLP shall have
the right to participate in the negotiation and settlement of any casualty or
condemnation- related claim, provided FWRLP shall have previously elected not to
terminate this Agreement or has no such right of termination.
13. Inspection of Property.
(a) FWRLP's Right of Inspection. FWRLP shall have the right,
at its own risk, cost and expense, at any time or times prior to Closing, to
enter, or cause its agents or representatives to enter, upon the Property for
the purpose of making
-18-
surveys, or any tests, investigations and/or studies relating to the Property or
FWRLP's intended acquisition thereof which FWRLP deems appropriate, in its sole
discretion, during reasonable hours and upon reasonable notice to Contributor.
FWRLP's entry shall be subject to the rights of all tenants of the Property, and
FWRLP shall use reasonable efforts not to interfere with the business being
conducted by the tenants. FWRLP shall further have complete access to all
documentation, agreements and other information in the possession of Contributor
related to the ownership, use and operation of the Property, to the extent it is
readily available to Contributor, and shall have the right, at FWRLP's cost, to
make copies of same.
(b) Feasibility Period. Any other provisions of this Agreement
to the contrary notwithstanding, FWRLP may, prior to the expiration of thirty
(30) days after the Acceptance Date (such 30-day period herein referred to as
the "Feasibility Period"), cause at FWRLP's sole risk, 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, during reasonable hours and upon
reasonable notice to Contributor. FWRLP's entry shall be subject to the rights
of all tenants of the Property, and FWRLP shall use reasonable efforts not to
interfere with the business being conducted by the tenants. In the event that
any of such tests, investigations and/or studies indicate, in FWRLP's sole
discretion, that FWRLP's plans for the Property would not be feasible, then
FWRLP shall have the right, at its sole election on or before the expiration of
the Feasibility Period, to terminate this Agreement by giving written notice
thereof to Contributor, in which event this Agreement shall terminate, the
Deposit shall be returned to FWRLP and neither party shall have any further
liabilities or obligations to each other. FWRLP shall be liable for any damage
to real or personal property or injuries to persons caused by FWRLP's actions in
studying the Property during the Feasibility Period. FWRLP agrees to repair any
such damage to the Property that may be caused by its inspections and to
indemnify and defend Contributor and hold Contributor harmless against any
claim, liability or loss as a result of such damage or injuries to persons
caused by FWRLP. The foregoing repair and indemnification obligation shall
survive Closing and/or any termination of this Agreement.
(c) Audit. Contributor hereby agrees to allow its books and
records related to the Property to be audited (at FWRLP's sole expense) at the
Contributor's office by an independent, certified public accounting firm
selected by FWRLP, and Contributor will cooperate and cause its employees and
other agents to cooperate in such auditing process. FWRLP shall provide
Contributor with prior notice of such audit.
14. Indemnifications.
(a) Indemnification by Contributor. 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
-19-
liabilities (including reasonable attorneys' fees) which may at any time be
asserted against or suffered by FWRLP, any indemnitee, or the Property, or any
part thereof, whether before or after the Closing Date, as a result of, on
account of or arising from (i) any breach of any covenant, representation,
warranty or agreement on the part of Contributor or its Partners made herein or
in any instrument or document delivered pursuant to this Agreement, and/or (ii)
any obligation, claims, suit, liability, contract, agreement, debt or
encumbrance or other occurrence created, arising or accruing on or prior to the
Closing Date, regardless of when asserted, and relating to the Contributor or
the Property or its operations. To the extent an indemnification obligation
under clause (i) above arises out of a breach by any Partner of the several
representations and warranties set forth in Section 5(v) hereof, only the
Partner responsible for such breach shall be obligated to indemnify FWRLP
hereunder.
(b) [Intentionally Omitted].
(c) Indemnification by FWRLP. FWRLP hereby indemnifies and
agrees to defend and hold harmless Contributor and its Partners and their
respective heirs, executors, administrators, personal or legal 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 Contributor or its Partners
and/or their heirs, executors, administrators, personal or legal
representatives, successors or assigns as a result of, on account of or arising
from (i) any breach of any covenant, representation, warranty or agreement on
the part of FWRLP made herein or in any instrument or document delivered
pursuant to this Agreement, and/or (ii) any obligation, claims, suit, liability,
contract, agreement, debt or encumbrance or other occurrence created, arising or
accruing after the Closing Date and relating to FWRLP or the Property or its
operations.
15. Brokerage Commission. Contributor and FWRLP represent and warrant
to each other that no brokerage fee or real estate commission is or shall be due
or owing in connection with this transaction other than that payable to ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ & Co., which shall be payable by Contributor. Contributor and FWRLP
hereby indemnify and hold the other harmless from any and all claims of any
broker or agent so claiming based on action or alleged action of the other. The
provisions of this Section 15 shall survive Closing or any termination of this
Agreement.
16. Default Provisions; Remedies.
(a) FWRLP's Default. Except for any failure waived in writing
by Contributor, if FWRLP fails to consummate the Contribution contemplated
herein when required to do so pursuant to the provisions hereof or otherwise
breaches any of its covenants or obligations under this Agreement and such
breach is not cured within five (5) days after written notice thereof from
Contributor or any representations or warranties made by FWRLP shall be
inaccurate or incorrect in any material respect on the Acceptance Date, then the
Title Company shall deliver the Deposit and all interest
-20-
thereon to Contributor as full and complete liquidated damages, and as the
exclusive and sole right and remedy of Contributor, at law or in equity,
whereupon this Agreement shall terminate and neither party shall have any
further obligations or liabilities to any other party, provided that the repair
and indemnity obligation set forth in Section 13(b) shall nevertheless remain in
full force and effect.
(b) Contributor's Default. Except for any breaches waived in
writing by FWRLP, if Contributor breaches any of its covenants or obligations
under this Agreement or has failed, refused or is unable to consummate the
Contribution contemplated herein by the Closing Date and such breach is not
cured within five (5) days after written notice thereof from FWRLP or if any of
the representations and warranties made by Contributor under this Agreement
shall be inaccurate or incorrect in any material respect on the Acceptance Date,
then FWRLP shall notify Contributor of such breach in writing and, should
Contributor not cure same within five (5) business days of receipt of such
default notice, then FWRLP shall be entitled to (i) waive such breach, default
or failure, and proceed to Closing, (ii) extend the Closing for such reasonable
time or times as may be necessary in order to enable Contributor to remedy such
breach, default or failure (but in no event more than three (3) months), (iii)
terminate this Agreement and obtain the return of the Deposit, and/or (iv)
pursue such remedies as may be available at law or in equity, including without
limitation maintaining any action for damages and/or specific performance
(including without limitation reasonable attorneys' fees and court costs),
provided that any action for damages against Contributor shall be limited to an
amount equal to $50,000.00 (exclusive of reasonable attorneys' fees and court
costs).
(c) The provisions of Sections 16(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 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.
17. Registration Rights. First Washington Realty Trust, Inc. (the
"REIT") hereby agrees to use its best efforts to file a registration statement
within thirteen (13) months after Closing to register the issuance and resale,
if required, of REIT Common Stock which may be issued to Contributor in exchange
for its Units, to use its best efforts to cause such registration statement to
become effective and to keep such registration continuously effective (subject
to certain exceptions) for a period for five (5) years thereafter; provided,
however, that the REIT shall be permitted to postpone such filing or suspend the
effectiveness of such shelf registration statement for such periods as the REIT
reasonably determines are in the best interest of the REIT or which are
necessary to comply with securities law requirements (including suspending sales
under the shelf registration statement for such periods as the managing
underwriter in an underwritten offering deems necessary). The obligations of the
REIT under this Section 17 shall survive Closing.
-21-
18. Miscellaneous Provisions.
(a) Completeness and Modification. This Agreement (together
with Exhibits A to L attached hereto) represents the complete understanding
between 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 heirs,
executors, administrators, personal and legal representatives, successors and
assigns.
(c) Assignment. This Agreement shall not be assignable by
FWRLP without the consent of Contributor, provided that this Agreement may be
assigned without Contributor's consent to an entity controlled by, controlling
or under common control with FWRLP. This Agreement shall not be assignable by
Contributor.
(d) Waiver; Modification. Failure by FWRLP or Contributor to insist upon or
enforce any of its rights hereto shall not constitute a waiver or modification
thereof.
(e) Governing Law. This Agreement shall be governed by and
construed under the laws of the District of Columbia.
(f) Headings. The headings are herein used for convenience or
reference only and shall not be deemed to vary the content of this Agreement or
the covenants, agreements, representations and warranties herein set forth, or
the scope of any provision hereof.
(g) Continuing Documentation and Access. From and after
Closing, Contributor shall afford FWRLP reasonable access to any and all
information in its possession concerning the ownership, use and operation of the
Property (including the right to copy same at the expense of FWRLP) for purposes
of any tax examination or audit or other similar purpose, subject to the
agreements of FWRLP concerning confidentiality set forth herein.
(h) [Intentionally Omitted].
(i) 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.
-22-
(j) 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
▇▇▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Contributor:
Spring Valley Partners
c/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Co.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Such notice shall be deemed given on the date of receipt by
the addressee or the date receipt would have been effectuated if delivery were
not refused. Each party may designate a new address by written notice to the
other in accordance with this Paragraph 18(j).
(k) Further Assurances. Contributor and FWRLP agree to
execute, acknowledge and deliver any further agreements, documents or
instruments that are reasonably necessary or desirable to carry out the
transactions contemplated by this Agreement, provided that such execution,
acknowledgment and delivery does not impose any additional costs on such party
(other than such party's attorneys' fees in the review thereof and de minimis
recording costs).
(l) Business Days. A "business day" shall be Mondays through
Fridays, less and expecting all legal holidays observed by the United States
Government or the Government of the State of Maryland. Any date specified in
this
-23-
Agreement which does not fall on a business day shall be automatically extended
until the first business day after such date.
(m) Confidentiality. FWRLP agrees and acknowledges that the
information provided to it by the Contributor hereunder regarding the Property
is confidential, and that it will not disclose such information to any other
person, other than to its employees, agents, attorneys, accountants, lenders and
other consultants or other parties that need to know such information in order
for FWRLP to evaluate the transaction contemplated herein, without the prior
written consent of Contributor. If this Agreement is terminated, all
information, documentation and other materials provided to FWRLP shall be
returned to the Contributor.
(n) Attorneys' Fees. In the event any suit or action is
instituted to interpret or enforce any of the terms of this Agreement, the
prevailing party shall be entitled to recover from the other party such sum as
the court may determine and grant as reasonable attorneys' fees at trial or on
appeal of such suit or action, in addition to all other sums recoverable by
virtue of such action.
(o) Survival. None of the representations, warranties,
covenants and indemnities set forth in this Agreement shall survive Closing
except as follows:
(i) the representations, warranties and covenants contained in Sections
5(a) through (t) and Sections 7(a) through (c) shall survive Closing and shall
terminate one (1) year after the Closing Date except as to claims for breach
thereof asserted by a party within such one (1) year period;
(ii) the representations, warranties and covenants contained in Section
13(b) and Section 17 shall survive Closing and shall terminate five (5) years
after the Closing Date except as to claims for breach thereof asserted by a
party within such five (5) year period;
(iii) the representations, warranties and covenants contained in Sections
5(u) and (v) and Sections 7(d), (e), (f), (g), (h), (i) and (j) shall survive
Closing without any limitation;
(iv) the indemnification for breach of representations or warranties
pursuant to clause (i) of the first sentence of each of Section 14(a) and
Section 14(c) herein, shall terminate one (1) year after the Closing Date,
except as to claims as to which a party hereto has asserted a right of
indemnification within said one (1) year period; and
(v) the indemnification for breach of representations or warranties
pursuant to clause (ii) of the first sentence of each of Section 14(a) and
Section 14(c) herein, shall terminate five (5) years after the Closing Date,
except as to claims as to which a party hereto has asserted a right of
indemnification within said five (5) year period.
-24-
IN WITNESS WHEREOF, the parties hereto have executed this Contribution
Agreement as of the day and year first written above.
FWRLP:
FIRST WASHINGTON REALTY
LIMITED PARTNERSHIP
By: First Washington Realty Trust, Inc.,
WITNESS: Its general partner
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
Date of execution: October 7, 1997
CONTRIBUTOR:
SPRING VALLEY JOINT VENTURE
By: CJS Associates, Inc.
WITNESS: General Partner
/s/
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Date of execution: October 8, 1997
-25-
First Washington Realty Trust, Inc. joins herein solely for the purpose of
making the representations, warranties and covenants contained in Section 17
hereof.
FIRST WASHINGTON REALTY
WITNESS: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ TRUST, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
Date of execution: October 7,1997
-26-
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.
COMMERCIAL SETTLEMENTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇.▇▇▇▇▇
Title: Vice President
Date: October 10, 1997
S:\▇▇▇▇▇▇\FWR\SPRING4.AGT
-27-
LIST OF EXHIBITS
EXHIBIT A. Legal Description of Land Recitals
EXHIBIT B. Leases and Rent Schedule Section 5(d)
EXHIBIT C. Service Contracts Section 5(e)
EXHIBIT D. Tax Bills Section 5(f)
EXHIBIT E. Insurance Policies Section 5(g)
EXHIBIT F. Form of Tenant Estoppel Section 5(i)
EXHIBIT G. Litigation Section 5(k)
EXHIBIT H. Operating Statements and Budget Section 5(p)
EXHIBIT I. Personal Property Section 5(r)
EXHIBIT J. Permitted Exceptions Section 8(a)(iii)
EXHIBIT K. [Intentionally Omitted]
EXHIBIT L. Confidential Information Statement Sections 5(v), 7(e)
[Contributor to Attach Foregoing at Acceptance of this Agreement]
-28-
EXHIBIT A
LEGAL DESCRIPTION OF LAND
-29-
EXHIBIT B
LEASES AND RENT SCHEDULE
-30-
EXHIBIT C
SERVICE CONTRACTS
-31-
EXHIBIT D
TAX BILLS
-32-
EXHIBIT E
INSURANCE POLICIES
-33-
EXHIBIT F
[Form of Tenant Estoppel]
TENANT ESTOPPEL CERTIFICATE
________________ Shopping Center (the "Shopping Center")
____________, ___________ County, ____________
TO: ________________________ ("Landlord")
First Washington Realty Limited Partnership, or its affiliates,
assignees or designees ("FWRLP") ________________________ ("Lender").
THIS IS TO CERTIFY THAT:
1. The undersigned is the Tenant under that certain lease dated as set
forth on Schedule A hereto annexed (such lease, as guaranteed,
assigned, supplemented, amended or modified as set forth on Schedule A
hereto is herein termed the "Lease") covering certain premises
("Premises") at the Shopping Center.
2. The Lease has not been assigned, supplemented or amended or modified in
any respect except as set forth in said Schedule A. The Lease is valid
and in full force and effect on the date hereof. The Lease is the only
lease or agreement between the Tenant and the Landlord or its
predecessors or the affiliates of either of them (individually and
collectively, the "Landlord") relating to the Premises. The Lease
represents the entire agreement between the Landlord and the Tenant
with respect to the Premises. No oral agreement of any kind exists
between the Landlord and the Tenant.
3. The Tenant hereby certifies that:
A. The Tenant is currently in possession of the Premises.
B. The Tenant's monthly rent under the Lease, as of
_______________, 199__ is $_________ per month, and the Tenant
has paid rent through ____________________, 199__.
C. A security deposit of $__________ has been deposited, and
remains on deposit, with the Landlord.
D. The Tenant's payment to the Landlord for operating expenses
(taxes, insurance, utilities and maintenance) under the Lease
is currently $_________ per month.
E. The Lease commenced on ___________________, 199__.
F. The current term of the Lease expires on __________, 199__.
G. The Tenant has ____ options to renew or extend the Lease for
____ years each.
4. The Tenant is not entitled to, and has made no agreement(s) (orally or
in writing) with the Landlord or its agents or employees concerning
free rent, rebate of rental payments, credit or offset or deduction in
rent, or any other type of rental concession. The Tenant has made no
advanced payment of rent or other payment in advance of any sums due
under the Lease, except rental for the current month. The Landlord has
not provided financing for, made loans or advances to, or invested in
the business of the Tenant.
5. The Tenant has accepted and now occupies all of the Premises and is
doing business therein. To the best of the Tenant's knowledge, the
Premises are free from defects in design, materials and/or workmanship.
6. There is no existing default on the part of the Landlord or the Tenant
in any of the terms and conditions of the Lease and no event has
occurred and no condition exists which, with the giving of notice or
the lapse of time or both, may constitute a default, on the part of
either the Landlord or the Tenant, under the Lease. The Tenant has no
existing defense or offsets against the enforcement of the Lease by the
Landlord, and the Tenant currently has no unasserted claims against the
Landlord. There are no writs, injunctions, decrees, orders or judgments
outstanding, no lawsuits, claims, proceedings, or investigations
pending,
-i-
threatened or previously settled, relative to the Lease, nor is the
Tenant aware of a basis for any proceeding.
7. All obligations under the Lease to be performed by the Landlord,
including without limitation any obligation to perform construction
work within the Premises or the Shopping Center, have been satisfied.
All required contributions by the Landlord to the Tenant on account of
"tenant improvements" and/or "tenant allowances" (if any) have been
received by the Tenant, and if any other payments from the Landlord to
the Tenant are called for by the terms of the Lease, the Tenant
acknowledges that the Tenant has received the same.
8. The Lease contains, and the Tenant has, no outstanding options or
rights of first refusal to purchase the Premises or any part thereof or
all or any part of the real property of which the Premises are a part,
and the Tenant has no right or option to take on any additional space
or to give back any portion of the Premises.
9. The Tenant has not made nor is the Tenant presently contemplating any
assignment by the Tenant for the benefit of creditors or any filing by
the Tenant of a proceeding under the United States Bankruptcy Court or
similar laws of any state seeking the liquidation or reorganization of
the Tenant, and to the Tenant's knowledge no such proceedings are
currently pending, threatened or contemplated against the Tenant.
10. The Tenant has not sublet the Premises to any sublessee and has not
assigned any of its rights under the Lease, except as set forth on
Schedule A. No one except the Tenant and its employees occupies the
Premises.
11. The address for notices to be sent to the Tenant is as set forth in the
Lease, unless a different address is set forth in said Schedule A.
12. The Tenant does not have, nor has the Tenant disposed of, hazardous
materials (as defined in any federal, state or local statute) in
violation of applicable laws, regulations or rules (collectively, the
"Environmental Laws"), on the Premises or the Shopping Center. Tenant
has not received any notices, written or oral, of violation of any of
the Environmental Laws.
13. The undersigned is authorized to execute this Tenant Estoppel Certificate on
behalf of the Tenant.
14. The undersigned hereby ratifies and confirms the Lease in all respects.
15. This certification is being made to induce FWRLP to acquire the
Shopping Center (or the interests in the Landlord) and to induce the
Lender to grant a loan to the Landlord which loan will be secured by
the Shopping Center.
Dated _____________________, 1997.
__________________________________(TENANT)
By:
Title:
GUARANTOR CONSENT
(IF APPLICABLE):
The undersigned __________________ and ____________________
("Guarantor(s)") hereby consents to and approves of the execution and delivery
of this above certification and agrees that that certain Guaranty dated
______________, 199___ executed by Guarantor with respect to the Lease described
above is in all respects ratified and confirmed and is and shall continue in
full force and effect.
(GUARANTOR(S))
========================
========================
-ii-
EXHIBIT G
LITIGATION
NONE
-iii-
EXHIBIT H
OPERATING STATEMENTS AND BUDGET
-iv-
EXHIBIT I
PERSONAL PROPERTY
Lawn Mower
-v-
EXHIBIT J
PERMITTED EXCEPTIONS
1. Rights of adjoining property owners on the West in and to party wall
along the West property line to the extent shown on Building Location
Plat made by Frey, Sheehan, ▇▇▇▇▇▇ & Assoc., Inc., dated March 18,
1986.
2. Right of Way for Falls Branch Sewer condemned by proceedings in
District Court Case ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of Columbia.
3. Existing unrecorded leases.
S:\▇▇▇▇▇▇\FWR\SPRING4.AGT
-vi-
EXHIBIT K
[INTENTIONALLY OMITTED]
-vii-
EXHIBIT L
CONFIDENTIAL INFORMATION STATEMENT
-viii-
