CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is made and entered as the 22nd day of May,
1997, by and between (i) ROUND LAKE BEACH DEVELOPMENT LIMITED PARTNERSHIP, an
Illinois limited partnership (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 beneficial owner, pursuant to a land trust
agreement with LaSalle National Trust (#110411-00) dated October 1, 1985 (the
"Land Trust"), 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 Mallard Creek Shopping Center located in Round
Lake Beach, Lake County, Illinois, 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) $11,379,912, or such lesser amount which represents the outstanding
principal balance with respect to the Nationwide Loan (as hereinafter defined)
as of Closing (the "Actual Loan Amount"), by FWRLP assuming the Nationwide Loan
as described below;
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(ii) pay a sum equal $244,717.00, by cash or wire transfer of immediately
available funds (the "Cash Portion"); and
(iii) issue common partnership units of FWRLP (the
"Units") in
an aggregate amount calculated as follows: $12,650,439.00 minus the sum of the
Actual Loan Amount and the Cash Portion, such sum to be adjusted for closing or
other adjustments herein provided, such total divided by $23.50 (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 Mortgage (as defined below). Contributor and FWRLP shall provide to
the Lender any and all information reasonably requested by the Lender.
(c) (i) The Property is presently encumbered by a Mortgage and
Security Agreement dated January 25, 1989 (the "First Mortgage") from the Land
Trust, as debtor, for the benefit of Nationwide Life Insurance Company, as
mortgagee (the "Lender"), which First Mortgage secures an original principal
indebtedness of $11,500,000.00 with interest thereon payable over the term
thereof (which ends on February 10, 1999) at a fixed interest rate of 10.50% per
annum, as evidenced by a Promissory Note from the Land Trust to Lender ("Note").
The First Mortgage and Note and all documents and instruments executed in
connection therewith are collectively referred to as the "Nationwide Loan." The
Nationwide Loan is non-recourse (except for environmental and other standard
carve outs) to Contributor and requires equal monthly installments of principal
and interest in the amount of the $100,625.00 per month. The outstanding
principal balance under the Nationwide Loan as of December 31, 1996 was
approximately $11,379,912.00. True and correct copies of the First Mortgage and
Note are attached hereto as Exhibits J and K, respectively, and a schedule of
all of the Loan Documents are shown on Exhibit L.
(ii) FWRLP's obligations under this Agreement shall be expressly contingent
on the condition that Contributor obtains for and delivers to FWRLP by Closing a
letter (the "Letter") from Lender (i) consenting to the Contribution of the
Property subject to the Nationwide Loan on the same terms and such modifications
to the Nationwide Loan as FWRLP shall determine, in its sole discretion, are
necessary (to the extent that FWRLP determines that modifications are necessary,
FWRLP shall so notify Contributor as soon as possible, but in any event prior to
the end of the Feasibility Period), (ii) confirming that the Nationwide Loan is
as described above, (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 Nationwide Loan. FWRLP and Contributor shall
cooperate in obtaining the Letter from Lender. Contributor shall be responsible
and pay for any loan assumption fees charged by the Lender in connection with
the assumption of the Nationwide Loan by FWRLP,
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subject to the terms of Section 2(c)(iii) below, and FWRLP shall be responsible
for the Lender's title charges, fees of Lender's counsel and other assumption
costs. At Closing, Contributor shall execute an estoppel certificate in favor of
FWRLP certifying that, to the best knowledge of Contributor, there is no
default, or event of default which with notice or lapse of time, or both, would
constitute a default under the Nationwide Loan. Contributor shall use
commercially reasonable efforts to deliver to FWRLP such Letter from Lender
before the end of the Feasibility Period (as defined below). If Lender denies
the assumption of the Nationwide Loan by FWRLP or if Lender's Letter is other
than as set forth above and is not acceptable to FWRLP or if the Letter is not
received by FWRLP by Closing, FWRLP shall have the right, at its sole election,
to terminate this Agreement by giving written notice thereof to Contributor,
whereupon the Deposit, together with interest thereon, shall be returned to
Contributor and neither party shall have any further liability to the other.
(iii) Contemporaneously with the execution of this
Agreement,
FWRLP is entering into a separate Contribution Agreement (the "Other
Contribution Agreement" or, collectively, the "Other Contribution Agreements")
with each of the beneficial owners (each of which is affiliated with
Contributor) (the "Other Contributors") of each of the following properties: (i)
The Oaks Shopping Center, Des Plaines, ▇▇▇▇ County, Illinois, (ii) Riverside
Square Shopping Center and River's Edge Shopping Center, Chicago, ▇▇▇▇ County,
Illinois, (iii) Stonebrook Plaza and Outparcel, Merrionette Park, ▇▇▇▇ County,
Illinois, (iv) Pheasant Hill Shopping Center, Bolingbrook, Will County,
Illinois, and (v) ▇▇▇▇▇▇▇ Commons Shopping Center, McHenry, ▇▇▇▇▇▇▇ County,
Illinois (collectively, the "Other Properties", and each of (i) through (v)
referred to as an "Other Property"). Notwithstanding the foregoing, (A) if the
aggregate loan assumption fees (excluding lender's title charges, fees of
lender's counsel and other assumption costs) charged by the mortgage lenders in
connection with the assumption by FWRLP of the existing first mortgage loans on
the Property and the Other Properties exceeds $218,049.00 (the "Threshold
Fees"), then the Cash Portion of the Consideration set forth in Section 2(a)(ii)
of this Agreement and the Other Contribution Agreements shall be increased by an
aggregate amount equal to one-half (1/2) of such excess amount, or (B) if such
aggregate loan assumption fees are less than the Threshold Fees, then the Cash
Portion of the Consideration set forth in Section 2(a)(ii) of this Agreement and
the Other Contribution Agreements shall be reduced by an aggregate amount equal
to such shortfall; provided, however, that if the Property and/or any of the
Other Properties are not contributed to FWRLP (the "Noncontributed Properties")
pursuant to this Agreement or the Other Contribution Agreements, then the
$218,049.00 Threshold Fees shall be reduced by a percentage equal to the
percentage that the then outstanding principal balance of the mortgage loan(s)
for the Noncontributed Properties bears to the aggregate then outstanding
principal balances of the mortgage loans of the Property and the Other
Properties.
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(iv) Contributor's obligations under this Agreement shall be contingent on
the condition that the Lender, on or before the Closing, shall have released the
Contributor and its Partners from the indemnity obligations and liabilities
under the Nationwide Loan pursuant to a release document(s) reasonably
acceptable to the Contributor.
(d) Intentionally Omitted.
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 Chicago Title Insurance Company,
Chicago, Illinois (the "Title Company"), as escrow agent, a deposit ("Deposit")
of Seventy-Five Thousand Dollars ($75,000.00 ) 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 a separate deposit escrow agreement acceptable to
Contributor and FWRLP.
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; provided, however, that if the
Lender has not completed all documentation for FWRLP to assume the Nationwide
Loan by such date, then the Closing Date shall be extended for such reasonable
time period as is required to close the assumption of the Nationwide Loan). The
Closing shall take place at the offices of the Title Company, or at such other
place as may mutually agreed upon by Contributor and FWRLP. The transaction
contemplated by this Agreement shall be closed by means of a Deed and Money "New
York Style" Escrow (the "Closing Escrow") to be opened with the Title Company,
on or before the Closing Date, in accordance with the general provisions of the
usual form of Deed and Money "New York Style" Escrow Agreement (the "Escrow
Agreement") then provided and used by the Title Company with such special
provisions inserted in the Escrow Agreement as may be required to conform to
this Agreement; provided, however, in the event of a conflict between the
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terms of this Agreement and the Closing Escrow, the terms of this Agreement
shall control.
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 and warranties, each of which is material and shall,
together with all covenants, agreements and indemnities set forth in or made
pursuant to this Agreement, survive Closing to the extent provided in Section
18(m), notwithstanding any investigation at any time made by or on behalf of
FWRLP:
(a) Authority of Contributor. Contributor is a limited
partnership duly organized and in good standing under the laws of the State of
Illinois. Contributor has all necessary power and authority and has taken all
necessary partnership action to execute, deliver and perform this Agreement and
to bind the Land Trust to deliver the Deed and other documents required
hereunder. 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 beneficiary of the Land
Trust which is the sole owner of fee simple title to the Property. To the best
of Contributor's knowledge, such title to the Property is marketable and good of
record and 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, and (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. To the best of
Contributor's knowledge, 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")
are available at Contributor's corporate office for review and copying by FWRLP.
Attached hereto as Exhibit B is a description of all of the Leases and a current
rent schedule ("Rent
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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 any subleases or
subtenancies which have been consented to by Contributor or of which Contributor
has actual knowledge 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;
(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 and all contributions
to tenants for tenant improvements, if any, have been paid in
full or will be paid for by Closing;
(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
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Date, unless FWRLP notifies Contributor before the end of the Feasibility Period
to terminate any or all of the Service Contracts (to the extent they are capable
of being terminated without penalty or premium). No Service Contract will be
terminated, amended, modified or supplemented prior to the Closing Date without
FWRLP's prior written approval, except in the ordinary course of business.
(f) Tax Bills. Attached hereto as Exhibit D are true and
correct copies of real estate 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 is a schedule of
all hazard, liability and other insurance policies presently affording coverage
with respect to the Property. The Property is insured for its replacement value
against loss or damage sustained as a result of fire or other casualty and
Contributor has rent loss insurance in place for the Property. Contributor shall
maintain in full force and effect all such policies until the Closing Date.
(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. Contributor has no knowledge of any
material defect in the condition of the Property, the structural elements
thereof or the mechanical systems therein.
(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.
(j) Condemnation Proceedings. No notices have been received by
Contributor of any condemnation or eminent domain proceedings 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.
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(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, subject to the
consent of the Lender, (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, 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.
(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. Contributor has no knowledge of any
discharge, spillage, uncontrolled loss, seepage or filtration (a "Spill") of
oil, petroleum or chemical liquids or solids, liquid or gaseous products or any
hazardous waste or hazardous substance (as those terms are used in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation and Recovery Act of 1976, as amended, or in
any other applicable federal, state or local laws, ordinances, rules or
regulations relating to protection of public health, safety or the environment,
as such laws may be amended from time to time) at, upon, under or within the
Land or any contiguous real estate. Contributor has not caused or permitted to
occur, 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 the best of
Contributor's knowledge, there is no proceeding or action pending or threatened
by any person or governmental agency regarding the environmental condition of
the Property. To the Contributor's knowledge, the Building is totally free of
asbestos.
(p) Operating Statements. Attached hereto as Exhibit H are
true and correct operating statements of the Property for fiscal years 1993,
1994, 1995 and 1996. 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
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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 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, other than those shown on Exhibit N attached hereto.
(v) Securities Law Matters.
(i) Contributor and each of its partners who receive
Units is an "accredited investor" as such term is defined
under Rule 501 promulgated under the Securities Act of 1933,
as amended (the "Securities Act");
(ii) The partners (the "Partners") of Contributor are
as set forth on Exhibit O hereto;
(iii) The Partners have their primary residence in
the State of Illinois;
(iv) Contributor will hold the Units for its own
account for investment purposes only and not with a view to
distribution and does intend to distribute or resell the
Units, except as expressly set forth at the end 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
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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 M 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 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 make the
representations 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 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
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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 Acceptance 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 occurrence prior to the Closing Date which would make any of its
representations, warranties or covenants contained herein not true in any
material respect.
(d) Obligations as to Leases. Contributor shall not, without
FWRLP's prior written consent which consent shall not be unreasonably withheld
or delayed, 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 has vacated the Property. With respect
to those leases listed on Schedule A of Exhibit B hereto and any new leases
entered into after the Acceptance Date as to which FWRLP has granted its
consent, FWRLP shall be responsible for any leasing commissions and tenant
improvement allowance which are the responsibility of landlord thereunder if the
Contribution contemplated hereunder closes.
(e) Obligations as to Nationwide Loan. The Contributor shall
not, without FWRLP's prior written consent, (i) prepay the Nationwide Loan, or
(ii) modify or amend any of the documents evidencing or securing the Nationwide
Loan or otherwise entered into in connection with the Nationwide Loan.
Contributor shall make all payments required to be made under the Nationwide
Loan when due, shall perform all obligations under the Nationwide Loan and shall
keep the Nationwide 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 together with all covenants,
agreements and indemnities set forth or made pursuant to this Agreement survive
Closing to the extent provided in Section 18(m):
(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 and will
be qualified to do business in the State of Illinois by Closing. Subject to
Section
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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 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) Additional Matters Regarding Authority. The execution,
delivery and performance by FWRLP of this Agreement and each other agreement,
document or instrument contemplated hereby to which FWRLP is a party and which
is required to be delivered to Contributor at Closing (together with this
Agreement, the "FWRLP Documents"), the fulfillment of and the compliance with
the respective terms and provisions hereof and thereof by FWRLP, and the due
consummation of the transactions contemplated hereby or thereby by FWRLP have
been, or by Closing will be, duly and validly authorized and approved by all
requisite partnership actions of FWRLP.
(e) Disclosure Documents. Attached hereto as Exhibit M 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 M, 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.
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:
-12-
(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, or if not available, then a 1992
form) owner's title insurance policy (or an unconditional
commitment therefor) without any exceptions ("Printed form" or
otherwise) other than the Permitted Exceptions, and in
addition, providing affirmative coverage satisfactory to FWRLP
insuring against any mechanic's or materialmen's lien arising
from goods, labor or materials provided to the Property prior
to the Closing Date. The "Permitted Exceptions" are:
(A) the lien of current real estate taxes and
special assessments not yet due and payable; and
(B) such other matters which are listed on Exhibit P
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
(other than the First Mortgage), deeds of trust,
financing statements, judgements, liens and other
matters that may be satisfied by payment of a
liquidated sum, provided that any mechanic's liens
may be bonded over by Contributor as long as the
Title Company issues an endorsement insuring FWRLP
against any loss arising therefrom.
(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 the payment of any claims (if deemed
warranted by Contributor), shall be the sole responsibility of
Contributor (other than those leasing commissions set forth on
Exhibit N hereto, which FWRLP shall pay if the Contribution
contemplated hereunder closes). 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
-13-
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, at a minimum, those tenants at the Property
satisfying the requirements described on Exhibit F-1 attached
hereto (or in such form as required by the 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 the Lender.
(vii) Existing Mortgages. Contributor shall have
delivered to the Title Company such releases or other
instruments necessary to release of record and beneficially
any and all existing mortgages, deeds of trust, financing
statements or other security documents affecting the Property,
other than the First Mortgage (collectively, the "Existing
Mortgages").
(viii) FWRT Board Approval. The Board of Directors of
FWRT shall have approved this Agreement and the transactions
contemplated hereby. 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 on or before the end of the Feasibility
Period in which event the Deposit and any interest thereon
shall be returned to Purchaser and neither party shall have
any further obligations or liabilities to the other.
(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) 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.
-14-
9. Contributor's Deliveries. Contributor shall execute, acknowledge and
deliver to FWRLP at the Closing the following documents, each dated on the
Closing Date:
(a) a trustee's deed, in form and substance 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 on
the Closing Date;
(d) an assignment 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
(other than Contributor's partnership tax returns, Contributor's partnership
documents and other confidential ownership documents which are not required to
properly operate 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;
-15-
(l) such other items and instruments as shall be required by
the Title Company in connection with the issuance of its title insurance policy
to FWRLP pursuant to Section 8(a)(iii) or as shall be reasonably requested by
counsel to FWRLP and consistent with the terms of this Agreement;
(m) any and all documents necessary to release the cash
constituting the Deposit from escrow with the Title Company and to have said
Deposit returned to FWRLP;
(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 cash 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. FWRLP shall also execute and deliver to Contributor
an assumption of Leases, Licenses, warranties and Service Contracts, if any,
which are to be assumed by FWRLP hereunder.
11. Settlement Charges; Prorations and Adjustments.
(a) Contributor shall pay for the title examination, the title
insurance premiums, ALTA basic As-Built survey of the Property, any Illinois
State and County and municipal transfer taxes and recording fees in connection
with this transaction. FWRLP shall pay any other costs incurred by FWRLP in
connection with studying the Property and closing this transaction. 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 and shall share equally the cost of any Title Company escrow closing
charges, including any New York-style closing fees.
(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.
Contributor represents that Omni Superstore and such
other tenants listed on Exhibit Q hereto reimburses the
landlord for its share of
-16-
the real estate taxes payable for the Property upon receipt of
the real estate tax ▇▇▇▇ and that real estate taxes are
payable to the applicable jurisdiction in arrears. Therefore,
at Closing Contributor shall receive a credit for the
estimated real estate taxes unpaid (but not yet due) from Omni
Superstore and such other tenants which is allocable for any
period prior to Closing. If Omni Superstore or such other
tenants do not pay to FWRLP when due the entire real estate
taxes allocable to a period prior to Closing and which was
credited to Contributor at Closing as set forth above, then
Contributor shall reimburse FWRLP for any such shortfall
within fifteen (15) days of demand therefor, and, if not so
timely reimbursed, FWRLP shall have the right to offset any
distributions/ dividends due to Contributor (or its Partners,
on a pro rata basis) on account of the Units issuable to them
until such shortfall is fully reimbursed to FWRLP.
(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. Rent for the month of, and any month
after, Closing collected by Contributor prior to Closing shall
be 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
-17-
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.
(iv) Debt Service on the Nationwide Loan. The amount
of interest payable under the Nationwide Loan shall be
apportioned as of 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, 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 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.
At Contributor's election, Contributor shall have the right to pay any net
closing adjustments due to FWRLP in cash, and in such case the Units otherwise
issuable to Contributor pursuant to Section 2(a)(iii) herein will not be
adjusted for such closing adjustments.
(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 Five Hundred Thousand Dollars ($500,000.00) or more or if Omni
Superstore, Fashion Bug, So Fro Fabrics or McDonalds or a tenant(s) 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)
-18-
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 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 (other than Contributor's
partnership tax returns, Contributor's partnership documents and other
confidential ownership documents which are not required to properly operate the
Property), 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 sixty
(60) days after the Acceptance Date (such 60-day period herein referred to as
the "Feasibility Period"), cause at FWRLP's sole cost and expense, such boring,
engineering, economic, water, sanitary and storm sewer, utilities, topographic,
structural, environmental and other tests, investigations, market studies and
other studies as FWRLP shall elect. In the event that any of such tests,
investigations and/or studies indicate, in FWRLP's sole discretion, that FWRLP's
plans for the Property would not be feasible, then FWRLP shall have the right,
at its sole election on or before the 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
-19-
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, and FWRLP shall indemnify Contributor for and hold
Contributor harmless against any such damage or injuries.
(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.
(d) Contributor shall not be obligated to contribute the
Property to FWRLP under this Agreement unless FWRLP acquires all of the Other
Properties pursuant to the Other Contribution Agreements; provided, however,
that the acquisition of one or more of the Other Properties shall not be a
condition to Contributor's obligation to contribute the Property to FWRLP if the
Contribution Agreement for such Other Property(s) was terminated (i) due to a
default on the part of Contributor thereunder, or (ii) by FWRLP on or before the
end of the Feasibility Period provided for therein as a result of any material
adverse environmental or material adverse structural condition of such Other
Property, provided that the right to exclude Other Properties pursuant to clause
(ii) as a condition to Contributor's obligations shall be limited to two (2)
Other Properties.
14. Indemnifications.
(a) Indemnification by Contributor. Subject to the provisions
of Section 18(m), 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 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.
-20-
(c) Indemnification by FWRLP. Subject to the provisions of
Section 18(m), 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 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
Mid-America Real Estate Corporation, 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 without limitation.
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, then the Title
Company shall deliver the Deposit and all interest 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, except for any indemnity obligations under Section 13(b).
(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 or if any of the
representations and warranties made by Contributor under this Agreement shall be
inaccurate or incorrect in any material respect, 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
-21-
or in equity, including without limitation maintaining an action for damages
(other than for consequential damages (i.e., lost profits)) and/or specific
performance (including without limitation reasonable attorneys' fees and court
costs). Notwithstanding the foregoing, if in the event of a failure by the
Closing Date of a condition precedent set forth in Section 8 herein and such
failure was not known to Contributor at the Acceptance Date and such failure was
not caused by any act or omission of Contributor, then FWRLP shall be precluded
from maintaining an action for damages pursuant to clause (iv) above with
respect to such failure.
(c) In the event that any litigation shall arise between the
parties hereto as to the subject matter hereof, the prevailing party in such
litigation shall be entitled to recover from the non-prevailing party all of its
court costs and reasonable attorneys' fees.
17. Registration Rights.
(a) 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 four (4) years thereafter; provided, however, that
the REIT shall be permitted to postpone such filing or suspend the effectiveness
of such shelf registration statement (i) for such periods as the REIT reasonably
determines are in the best interest of the REIT (including suspending sales
under the shelf registration statement for such periods as the managing
underwriter in an underwritten offering deems necessary), provided that any such
postponement or suspension shall be limited to sixty (60) consecutive days at
any one time, or (ii) for such periods which are necessary to comply with
securities law requirements which are beyond the reasonable control of FWRLP.
(b) Survival. The obligations of the REIT under this Section
17 shall survive Closing without limitation.
18. Miscellaneous Provisions.
(a) Completeness and Modification. This Agreement (together
with Exhibits A to Q 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.
-22-
(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 State of Illinois.
(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 (other than Contributor's
partnership tax returns, Contributor's partnership documents and other
confidential ownership documents which are not required to properly operate the
Property), 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) All Warranties Joint and Several. Except on set forth in
Section 5(t) hereof, each and every warranty, covenant, undertaking and
agreement of Contributor hereunder shall be deemed a joint and several warranty,
covenant, undertaking and agreement of each person and entity collectively
comprising the Contributor.
(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.
(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
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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:
Round Lake Beach Development Limited Partnership
c/o ▇▇▇▇ Management, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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 Agreement which does not fall on a business day shall be automatically
extended until the first business day after such date.
-24-
(m) Survival. All of the representations, warranties,
covenants, and indemnities of this Agreement shall survive Closing and shall
thereafter remain in effect, without limitation, except as follows:
(i) the covenants, representations and warranties contained in Section 5(a)
through (t) and Section 7(a) through (e) 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; and
(ii) the indemnifications for breach of representations or warranties
pursuant to clause (i) of the first sentence of Sections 14(a) and 14(c) which
are subject to a limited survival period under this Agreement (i.e., pursuant to
Section 18(m)(i) above), 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 period.
(n) 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, or use such
information for any purpose other than the transaction described herein without
the prior written consent of the Contributor. If this Agreement is terminated,
all information provided to FWRLP shall be returned to the Contributor.
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/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Date of execution: May 22, 1997
-25-
CONTRIBUTOR:
ROUND LAKE BEACH DEVELOPMENT
LIMITED PARTNERSHIP
WITNESS: By: ▇▇▇▇ Developments L.L.C.,
Its general partner
/s/ By: /s/
▇▇▇▇▇▇ ▇▇▇▇
Vice President
Date of execution: May 22, 1997
The undersigned Partners join herein solely for the purpose of making
the representations, warranties and covenants contained in Sections 5(v) and
10(n) hereof.
WITNESS: ▇▇▇▇ DEVELOPMENTS L.L.C.
/s/ By: /s/
▇▇▇▇▇▇ ▇▇▇▇
Vice President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DECLARATION
OF TRUST
/s/ By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ IRREVOCABLE
FAMILY TRUST
/s/ By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ EXEMPT
RESIDUARY TRUST
/s/ By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
[Signatures continued on following page]
-26-
[Signatures continued from preceding page]
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ NON-EXEMPT
RESIDUARY TRUST
/s/ By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
Date of execution: May 23, 1997
F:\DATA\WPDOC\DUKE\CHICAGO\MALLARD.AGT
-27-
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: TRUST, INC.
/s/ By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
Date of execution: May 22,1997
F:\DATA\WPDOC\DUKE\CHICAGO\MALLARD.AGT
-28-
LIST OF EXHIBITS
EXHIBIT A. Legal Description of Land Recitals
EXHIBIT B. Leases and Rent Schedule Section 5(d)
Schedule A - Landlord Contribution Section 6(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 F-1. Tenant Estoppels Section 8(a)(vi)
EXHIBIT G. Litigation Section 5(k)
EXHIBIT H. Operating Statements and Budget Section 5(p)
EXHIBIT I. Personal Property Section 5(r)
EXHIBIT J. Mortgage Section 2(c)(i)
EXHIBIT K. Note Section 2(c)(i)
EXHIBIT L. Loan Documents Section 2(c)(i)
EXHIBIT M. Confidential Information Statement Sections 5(v), 7(e)
EXHIBIT N. Contingent Leasing Commissions Section 5(u)
EXHIBIT O. Partners of Contributor Section 5(v)
EXHIBIT P. Permitted Exceptions Section 8(a)(i)(B)
EXHIBIT Q. Other Tenants That Pay Real Estate Taxes
Upon Receipt of Tax ▇▇▇▇ Section 11(b)(i)
[Contributor to Attach Foregoing at Acceptance of this Agreement]
-29-
EXHIBIT A
LEGAL DESCRIPTION OF LAND
-30-
EXHIBIT B
LEASES AND RENT SCHEDULE
-31-
EXHIBIT B
McDonald's has an option to purchase their parcel during the last month of the
20th lease year (12/2008).
-32-
EXHIBIT B
SCHEDULE A
LANDLORD CONTRIBUTION
-33-
EXHIBIT C
SERVICE CONTRACTS
-34-
EXHIBIT D
TAX BILLS
-35-
EXHIBIT E
INSURANCE POLICIES
-36-
EXHIBIT F
[Form of Tenant Estoppel]
ESTOPPEL CERTIFICATE
First Washington Realty Limited Partnership
▇▇▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
, 199
[Lender]
Re: Lease dated , 19
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 Current Term of Lease:
Date of Termination of Current Term of Lease:
Remaining Options to Renew: [ ] [ ]-year options
Current Base Minimum Rent: Annual Rental of $ , payable monthly in
---------------
advance.
Percentage Rent: [ ] yes [ ] no - ____% over
Real Estate Tax Charges: Pro rata [ ] yes [ ] no $ currently payable
----------------
monthly in advance.
Common Area Maintenance Charges: Pro rata [ ] yes [ ] no $
currently payable monthly in advance.
Insurance Charges: Pro rata [ ] yes [ ] no $ currently payable
----------------
monthly in advance.
-i-
Tenant in possession of the premises under the Lease?: [ ] yes [ ] no
Amendments: The Lease is unmodified and in full force and effect except for
amendments and 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
construction requirements of Tenant, and Tenant has accepted all of the leased
premises under the Lease.
Default: 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 to Lease Additional Space: Tenant has no right or option to lease
additional space at the shopping center.
Tenant's Right of Premature Termination: Tenant has no right to premature
termination of the Lease.
Mortgagee's Right to Cure: Anything in the Lease to the contrary
notwithstanding, Tenant agrees that it will not terminate the Lease or withhold
any rents due thereunder because of Landlord's default in the performance
thereof until tenant has first given notice to Landlord and to the holder of any
deed of trust specifying the nature of any such default by Landlord and allowing
the said holder, at its option, thirty (30) days after date of such notice to
cure the default, or a reasonable period of time in addition thereto if
circumstances are such that the default cannot be cured within a thirty (30) day
period.
Tenant agrees to subordinate the Lease to any mortgage or deed of trust on the
leased premises. In the event of foreclosure, Tenant agrees to attorn to the
purchaser of the leased premises at the foreclosure sale.
TENANT:
WITNESS:
[Name of Tenant]
By:
Name:
Title:
-ii-
EXHIBIT F-1
TENANT ESTOPPELS
o Omni Superstore 76,258 s.f.
o Fashion Bug 9,600 s.f.
o So Fro Fabrics 9,800 s.f.
o McDonalds PAD
TOTAL 95,658 s.f.
o Tenant's occupying at least 70% of
the remaining space at the Property.
[(143,759 s.f. - 95,658 s.f.) X 70% = 33,670 s.f.
-iii-
EXHIBIT G
LITIGATION
NONE
-iv-
EXHIBIT H
OPERATING STATEMENTS AND BUDGET
-v-
EXHIBIT I
PERSONAL PROPERTY
NONE
-vi-
EXHIBIT J
MORTGAGE
-vii-
EXHIBIT K
NOTE
-viii-
EXHIBIT L
LOAN DOCUMENTS
-ix-
EXHIBIT M
CONFIDENTIAL INFORMATION STATEMENT
-x-
EXHIBIT N
CONTINGENT LEASING COMMISSIONS
-xi-
EXHIBIT O
PARTNERS OF CONTRIBUTOR
1. ▇▇▇▇ DEVELOPMENTS L.L.C.
2. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DECLARATION OF TRUST,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, TRUSTEE
3. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ IRREVOCABLE FAMILY TRUST,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, TRUSTEE
4. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ EXEMPT RESIDUARY TRUST,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, TRUSTEE
5. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ NON-EXEMPT RESIDUARY TRUST,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, TRUSTEE
-xii-
EXHIBIT P
PERMITTED EXCEPTIONS
-xiii-
EXHIBIT Q
OTHER TENANTS THAT PAY REAL ESTATE
TAXES UPON RECEIPT OF TAX ▇▇▇▇
Omni #307
Crown Books #795
-xiv-
July 11, 1997
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
Round Lake Beach Development Limited Partnership
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇.▇.▇.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Contribution Agreement dated as of May 22, 1997 between First
Washington Realty Limited Partnership and Round Lake Beach
Development Limited Partnership for Mallard Creek Shopping Center
Dear ▇▇▇▇▇▇:
This letter is intended to serve as an amendment to the
above-referenced Contribution Agreement. Notwithstanding any of the terms and
conditions in the Contribution Agreement to the contrary, it is expressly agreed
as follows:
1. Clause A of subparagraph 2(c)(iii) deals with aggregate loan
assumption fees between $218,049.00 and $438,049.00. The
following is added at the end of subparagraph 2(c)(iii):
"If the aggregate loan assumption fees (excluding
lender's title charges, fees of lender's counsel and
other assumption costs) charged by the mortgage
lenders in connection with the assumption by FWRLP of
the existing first mortgage loans on the Property and
the Other Properties exceeds $438,049.00 (the "Second
Threshold Fees"), then the Cash Portion of the
Consideration set forth in Section 2(a)(ii) of this
Agreement and the Other Contribution Agreements shall
be increased by an aggregate amount equal to such
excess amount."
2. The outside Closing Date under Section 4 of the Contribution
Agreement was set at August 27, 1997, subject to extension as
set forth in such Section 4. The outside Closing Date under
Section 4 is hereby amended to be September 9, 1997, subject
to extension as set forth in such Section 4.
3. The last day of the Feasibility Period under Section 13(b) of
the Contribution Agreement is hereby amended to be July 22,
1997; provided, however, that the last day of the Feasibility
Period with respect to review of the title commitment,
documents of record and updated survey only shall be the tenth
(10th) day after receipt by FWRLP of the last updated survey
of the Property and the Other Properties.
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
July 11, 1997
Page 2
4. Paragraph 11(b) is hereby revised to provide that the
adjustments and prorations computed as of the Closing shall be
computed as of 11:59 p.m. on August 31, 1997.
5. Clause (ii) of subparagraph 13(d) of the Contribution Agreement is
hereby deleted.
6. All capitalized terms used but not otherwise defined in this
letter amendment shall have the meanings ascribed to them in
the Contribution Agreement. Except as amended hereby, the
Contribution Agreement remains unmodified and continues in
full force and effect.
If the foregoing is acceptable to you, please indicate your agreement
to these terms and conditions set forth herein by executing and returning to me
the enclosed counterpart original of this letter amendment.
Sincerely,
FIRST WASHINGTON REALTY
LIMITED PARTNERSHIP
By: First Washington Realty Trust, Inc.,
Its general partner
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President
AGREED AND ACCEPTED as of July 14, 1997:
ROUND LAKE BEACH DEVELOPMENT
LIMITED PARTNERSHIP
By: ▇▇▇▇ Developments L.L.C.
Its general partner
By: /s/
▇▇▇▇▇▇ ▇▇▇▇
Vice President
cc: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
F:\DATA\WPDOC\DUKE\CHICAGO\MALLARD.AGT
