EXHIBIT 10.13
CONTRACT OF SALE\CONTRIBUTION
AMONG
JPI-CG MEZZ LLC, JPI-MC MEZZ LLC, JPI GENPAR REALTY LLC AND
JPI INVESTMENT COMPANY, L.P.
AS SELLERS,
AND
EDUCATION REALTY OPERATING PARTNERSHIP, LP,
AS BUYER
TABLE OF CONTENTS
ARTICLE 1 PURCHASE PRICE AND XXXXXXX MONEY ......................................................... 9
Section 1.1 Agreement to Sell and Purchase ................................................ 9
Section 1.2 Purchase Price ................................................................ 9
Section 1.3 Xxxxxxx Money ................................................................. 12
ARTICLE 2 TITLE INSURANCE, OTHER INFORMATION, AND SURVEY ........................................... 13
Section 2.1 Title Insurance ............................................................... 13
Section 2.2 Other Information ............................................................. 14
Section 2.3 Survey ........................................................................ 16
Section 2.4 Other Property ................................................................ 16
ARTICLE 3 TITLE REVIEW AND DUE DILIGENCE ........................................................... 16
Section 3.1 Title Review .................................................................. 16
Section 3.2 Due Diligence Period .......................................................... 17
ARTICLE 4 SELLERS' REPRESENTATIONS, WARRANTIES, AND COVENANTS ...................................... 18
Section 4.1 Each Sellers' Representations and Warranties .................................. 18
Section 4.2 Several Liability; Survival of Representations and Warranties ................. 28
Section 4.3 Knowledge Standard ............................................................ 29
Section 4.4 Sellers' Covenants ............................................................ 29
ARTICLE 5 BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS ........................................ 31
Section 5.1 Buyer's Representations and Warranties ........................................ 31
Section 5.2 Buyer's Covenants ............................................................. 33
Section 5.3 Investment Representation ..................................................... 34
ARTICLE 6 CLOSING AND PRORATIONS ................................................................... 35
Section 6.1 Closing Date .................................................................. 35
Section 6.2 Closing Matters ............................................................... 35
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Section 6.3 Prorations .................................................................... 39
Section 6.4 Closing Costs ................................................................. 40
Section 6.5 Partnership Matters ........................................................... 41
Section 6.6 Assumption and Release ........................................................ 42
Section 6.7 Release Approval .............................................................. 42
Section 6.8 Seller's and Buyer's Joint Covenants Regarding Taxation of Cash/Unit
Purchase ....................................................................... 42
ARTICLE 7 DEFAULTS AND REMEDIES .................................................................... 44
Section 7.1 Material Breach of Sellers' Representations and Warranties Prior to
Closing ....................................................................... 44
Section 7.2 Buyer's Remedies .............................................................. 45
Section 7.3 Sellers' Remedies ............................................................. 47
ARTICLE 8 CASUALTY AND CONDEMNATION ................................................................ 47
Section 8.1 Risk of Loss and Notice ....................................................... 47
Section 8.2 Minor Casualty ................................................................ 47
Section 8.3 Major Casualty and Condemnation ............................................... 48
ARTICLE 9 MISCELLANEOUS ............................................................................ 49
Section 9.1 Notices ....................................................................... 49
Section 9.2 Performance ................................................................... 51
Section 9.3 Binding Effect ................................................................ 51
Section 9.4 Entire Agreement .............................................................. 51
Section 9.5 Assignment .................................................................... 51
Section 9.6 Commissions ................................................................... 52
Section 9.7 Headings ...................................................................... 52
Section 9.8 Holidays, Etc. ................................................................. 52
Section 9.9 Legal Fees .................................................................... 52
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Section 9.10 Governing Law ............................................................... 52
Section 9.11 Severability ................................................................ 52
Section 9.12 Disclaimers, Waivers, and Releases .......................................... 53
Section 9.13 Rule of Construction ........................................................ 56
Section 9.14 Effective Date .............................................................. 56
Section 9.15 Independent Contract Consideration .......................................... 56
Section 9.16 Counterparts and Facsimile Signatures ....................................... 57
Section 9.17 No Recording ................................................................ 57
Section 9.18 Further Acts ................................................................ 57
Section 9.19 Waiver of Jury Trial ........................................................ 57
Section 9.20 Exchange .................................................................... 59
Section 9.21 Related Property ............................................................ 59
Section 9.22 Confidentiality ............................................................. 60
EXHIBIT A-1 Legal Description of the Real Property Located in Xxxx County, Florida
EXHIBIT A-2 Legal Description of the Real Property Located in Kalamazoo County, Michigan
EXHIBIT A-3 Legal Description of the Real Property Located in Centre County, Pennsylvania
EXHIBIT A-4 Legal Description of the Real Property Located in Xxxxx County, Oklahoma
EXHIBIT A-5 Legal Description of the Real Property Located in Xxxx County, Florida
EXHIBIT A-6 Legal Description of the Real Property Located in Hillsborough County, Florida
EXHIBIT A-7 Legal Description of the Real Property Located in Orange County, Florida
EXHIBIT A-8 Legal Description of the Real Property Located in Lubbock County, Texas
EXHIBIT A-9 Legal Description of the Real Property Located in Franklin County, Ohio
EXHIBIT A-10 Legal Description of the Real Property Located in Xxxx County, Tennessee
EXHIBIT B List of Approved Service Contracts
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EXHIBIT C List of Personal Property
EXHIBIT D Intentionally Omitted
EXHIBIT E Pro Rata Cash Allocation
EXHIBIT F Reports
EXHIBIT G List of Delivered Loan Documents
EXHIBIT H List of Delivered Surveys
EXHIBIT I Other Contracts for Development
EXHIBIT J Deed Restrictions
EXHIBIT K Litigation
EXHIBIT L Notices from Governmental Authorities
EXHIBIT M Buyer's Partnership Agreement
EXHIBIT N Knowledge Individuals
EXHIBIT O Agreement Regarding Contributed Properties
EXHIBIT P Liquidity Loan Documents
EXHIBIT Q Assignment of Interests
EXHIBIT R Assignment of Partnership Interests
EXHIBIT S Non-Exclusive Service Xxxx License Agreement
EXHIBIT T Legal Opinion
EXHIBIT U Intentionally Omitted
EXHIBIT V Warrant Agreement
EXHIBIT W Registration Rights Agreement
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CONTRACT OF SALE\CONTRIBUTION
This Contract of Sale\Contribution (this CONTRACT) is among JPI-CG MEZZ LLC, a
Delaware limited liability company (JPI-CG), JPI-MC MEZZ LLC, a Delaware limited
liability company (JPI-MC), JPI GENPAR REALTY LLC, a Delaware limited liability
company (GENPAR), and JPI INVESTMENT COMPANY, L.P., a Texas limited partnership
(JPIIC, which, together with JPI-CG, JPI-MC and Genpar are hereinafter
collectively referred to as the SELLER), and EDUCATION REALTY OPERATING
PARTNERSHIP, LP, a Delaware limited partnership (BUYER).
BACKGROUND
A. JPI-CG owns (i) 100% of the outstanding and issued stock (the JPI-CG
TALLAHASSEE STOCK) of JC-Tallahassee, Inc., a Delaware corporation
(TALLAHASSEE, INC.); (ii) 99% of the membership interests (the JPI-CG
TALLAHASSEE MEMBERSHIP INTEREST) of JC-Tallahassee LLC, a Delaware
limited liability company (TALLAHASSEE LLC) and Tallahassee, Inc., owns
the remaining membership interest in Tallahassee LLC; and (iii) a 99%
partnership interest in (the JPI-CG TALLAHASSEE LP INTEREST) and is the
sole limited partner of Jefferson Commons - Tallahassee Limited
Partnership, a Delaware limited partnership (TALLAHASSEE, L.P.) and
Tallahassee LLC owns the 1% general partnership interest in
Tallahassee, L.P.
B. JPI-CG owns (i) 100% of the outstanding and issued stock (the JPI-CG
LUBBOCK STOCK) of JC-Lubbock, Inc., a Delaware corporation (LUBBOCK,
INC.); (ii) 99% of the membership interests (the JPI-CG LUBBOCK
MEMBERSHIP INTEREST) of JC-Lubbock LLC, a Delaware limited liability
company (LUBBOCK LLC) and Lubbock, Inc., owns the remaining membership
interest in Lubbock LLC; and (iii) a 99% partnership interest in (the
JPI-CG LUBBOCK LP INTEREST) and is the sole limited partner of
Jefferson Commons - Lubbock, L.P., a Delaware limited partnership
(LUBBOCK, L.P.) and Lubbock LLC owns the 1% general partnership
interest in Lubbock, L.P.
C. JPI-CG owns (i) 100% of the outstanding and issued stock (the JPI-XX
XXXXXXXX STOCK) of JC-Columbus, Inc., a Delaware corporation (COLUMBUS,
INC.); (ii) 99% of the membership interests (the JPI-XX XXXXXXXX
MEMBERSHIP INTEREST) of JC-Columbus LLC, a Delaware limited liability
company (COLUMBUS LLC) and Columbus, Inc., owns the remaining
membership interest in Columbus LLC; and (iii) a 99% partnership
interest in (the JPI-XX XXXXXXXX LP INTEREST) and is the sole limited
partner of Jefferson Commons - Columbus, L.P., a Delaware limited
partnership (COLUMBUS, L.P.) and Columbus LLC owns the 1% general
partnership interest in Columbus, L.P.
D. JPI-CG also owns (i) 100% of the outstanding and issued stock (the
JPI-CG WESTERN MICHIGAN STOCK, which, together with the JPI-CG
Tallahassee Stock, the JPI-CG Lubbock Stock and the JPI-XX Xxxxxxxx
Stock is hereinafter collectively referred to as the JPI-CG STOCK) of
JC-Western Michigan, Inc., a Delaware corporation (WESTERN MICHIGAN,
INC.); (ii) 99% of the membership interests (the JPI-CG WESTERN
MICHIGAN MEMBERSHIP INTEREST, which, together with the JPI-CG
Tallahassee Membership Interest, the JPI-CG Lubbock Membership Interest
and the JPI-XX Xxxxxxxx Membership Interest is hereinafter collectively
referred to as the JPI-CG MEMBERSHIP INTERESTS) of JC-Western Michigan
LLC, a Delaware limited liability company (WESTERN MICHIGAN LLC) and
Western Michigan, Inc., owns the remaining membership interest in
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Western Michigan LLC; and (iii) a 99% partnership interest in (the
JPI-CG WESTERN MICHIGAN LP INTEREST, which, together with the JPI-CG
Tallahassee LP Interest, the JPI-CG Lubbock LP Interest and the JPI-XX
Xxxxxxxx LP Interest is hereinafter collectively referred to as the
JPI-CG LP INTERESTS) and is the sole limited partner of Jefferson
Commons - Western Michigan, L.P., a Delaware limited partnership
(WESTERN MICHIGAN, L.P.) and Western Michigan LLC owns the 1% general
partnership interest in Western Michigan, L.P.
E. JPI-MC owns (i) 100% of the outstanding and issued stock (the JPI-MC
STATE COLLEGE STOCK) of JC - State College, Inc, a Delaware corporation
(STATE COLLEGE, INC.); (ii) 99% of the membership interests (the JPI-MC
STATE COLLEGE MEMBERSHIP INTEREST) of JC-State College LLC, a Delaware
limited liability company (STATE COLLEGE LLC) and State College, Inc.,
owns the remaining membership interest in State College LLC; and (iii)
the sole membership interest (JPI-MC LIMPAR INTEREST) in JPI Limpar
LLC, a Delaware limited liability company which is the sole limited
partner of Jefferson at State College, L.P., a Delaware limited
partnership (STATE COLLEGE, L.P.) and State College LLC owns the sole
general partnership interest in State College, L.P.
F. JPI-MC also owns (i) 100% of the outstanding and issued stock (the
JPI-MC STILLWATER STOCK) of JC-Stillwater, Inc, a Delaware corporation
(STILLWATER, INC.); (ii) 99% of the membership interests (the JPI-MC
STILLWATER MEMBERSHIP INTEREST) of JC-Stillwater LLC, a Delaware
limited liability company (STILLWATER LLC) and Stillwater, Inc., owns
the remaining membership interest in Stillwater LLC; and (iii) a 99%
partnership interest in (the JPI-MC STILLWATER LP INTEREST) and is the
sole limited partner of Jefferson Commons - Stillwater, L.P., a
Delaware limited partnership (STILLWATER, L.P.) and Stillwater LLC owns
the 1% general partnership interest in Stillwater, L.P.
G. JPI-MC also owns (i) 100% of the outstanding and issued stock (the
JPI-XX XXXXXX STOCK) of XX-Xxxxxx, Inc, a Delaware corporation (XXXXXX,
INC.); (ii) 99% of the membership interests (the JPI-XX XXXXXX
MEMBERSHIP INTEREST) of XX-Xxxxxx LLC, a Delaware limited liability
company (XXXXXX LLC) and Xxxxxx, Inc., owns the remaining membership
interest in Xxxxxx LLC; and (iii) a 99% partnership interest in (the
JPI-XX XXXXXX LP INTEREST) and is the sole limited partner of Jefferson
at Xxxxxx Limited Partnership, a Delaware limited partnership (XXXXXX,
X.X.) and Xxxxxx LLC owns the 1% general partnership interest in
Xxxxxx, L.P.
H. JPI-MC also owns (i) 100% of the outstanding and issued stock (the
JPI-MC KNOXVILLE STOCK) of JC-Knoxville, Inc, a Delaware corporation
(KNOXVILLE, INC.); (ii) 99% of the membership interests (the JPI-MC
KNOXVILLE MEMBERSHIP INTEREST) of JC- Knoxville LLC, a Delaware limited
liability company (KNOXVILLE LLC) and Knoxville, Inc., owns the
remaining membership interest in Knoxville LLC; and (iii) a 99%
partnership interest in (the JPI-CG KNOXVILLE LP INTEREST) and is the
sole limited partner of Jefferson Commons-Knoxville, L.P., a Delaware
limited partnership (KNOXVILLE, L.P.) and Knoxville LLC owns the 1%
general partnership interest in Knoxville, L.P.
I. JPI-MC also owns (i) 100% of the outstanding and issued stock (the
JPI-MC TAMPA STOCK, which, together with the JPI-MC State College
Stock, the JPI-MC Stillwater Stock, the JPI-XX Xxxxxx Stock and the the
JPI-MC Knoxville Stock is hereinafter collectively referred to as the
JPI-MC STOCK) of JC-Tampa, Inc, a Delaware corporation
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(TAMPA, INC.); (ii) 99% of the membership interests (the JPI-MC TAMPA
MEMBERSHIP INTEREST, which, together with the JPI-MC State College
Membership Interest, the JPI-MC Stillwater Membership Interest, the
JPI-XX Xxxxxx Membership Interest and the JPI-MC Knoxville Membership
Interest is hereinafter collectively referred to as the JPI-MC
MEMBERSHIP INTERESTS) of JC-Tampa LLC, a Delaware limited liability
company (TAMPA LLC) and Tampa, Inc., owns the remaining membership
interest in Tampa LLC; and (iii) a 99% partnership interest in (the
JPI-MC TAMPA LP INTEREST, which, together with the JPI-MC Limpar
Interest, the JPI-MC Stillwater LP Interest, the JPI-MC Xxxxxx XX
Interest, and the JPI-MC Knoxville LP Interest is hereinafter
collectively referred to as the JPI-MC LP INTEREST) and is the sole
limited partner of Jefferson Commons - Tampa Limited Partnership, a
Delaware limited partnership (TAMPA, L.P.) and Tampa LLC owns the 1%
general partnership interest in Tampa, L.P.
J. Genpar owns a 1% interest in and is the sole general partner (the
GENPAR GP INTEREST) of Jefferson Lofts at Orlando Limited Partnership,
a Delaware limited partnership (LOFTS, L.P. which, together with
Tallahassee, L.P., Lubbock, L.P., Columbus, L.P., Western Michigan,
L.P., State College, L.P., Stillwater, L.P., Xxxxxx, X.X., and
Knoxville, L.P. are hereinafter collectively referred to as the
PARTNERSHIPS), JPIIC owns a 99% interest in and is the sole limited
partner (the JPIIC LP INTEREST) of Lofts, L.P.
K. Each of the Partnerships owns their respective interest in the
following:
(1) With respect to Tallahassee, L.P., the real property located
in Xxxx County, Florida, more particularly described on
EXHIBIT A-1; with respect to Western Michigan, L.P., the real
property located in Kalamazoo County, Michigan, more
particularly described on EXHIBIT A-2 (which does not include
the undeveloped land parcel); with respect to State College,
L.P., the real property located in Centre County,
Pennsylvania, more particularly described on EXHIBIT A-3; with
respect to Stillwater, L.P., the real property located in
Xxxxx County, Oklahoma, more particularly described on EXHIBIT
A-4; with respect to Xxxxxx, X.X., the real property located
in Xxxx County, Florida, more particularly described on
EXHIBIT A-5; with respect to Tampa, L.P., the real property
located in Hillsborough County, Florida, more particularly
described on EXHIBIT A-6; with respect to Lofts, L.P., the
real property located in Orange County, Florida, more
particularly described on EXHIBIT A-7; with respect to
Lubbock, L.P., the real property located in Lubbock County,
Texas, more particularly described on EXHIBIT A-8; with
respect to Columbus, L.P., the real property located in
Franklin County, Ohio, more particularly described on EXHIBIT
A-9; and with respect to Knoxville, L.P., the real property
located in Xxxx County, Tennessee, more particularly described
on EXHIBIT A-10; all attached to this Contract (collectively,
the REAL PROPERTY), and all rights and appurtenances
pertaining to the Real Property, including any interest of the
Partnerships in adjacent streets, alleys, easements, and
rights-of-way;
(2) all improvements, structures, and fixtures located on the
respective tracts of Real Property (collectively, the
IMPROVEMENTS);
(3) the landlord's interest in all residential leases affecting
the respective tract of Real Property (LEASES), related
security deposits (DEPOSITS) and guaranties
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(GUARANTIES) and the owner's interest in all Service Contracts
listed in EXHIBIT B attached to this Contract not terminated
on or before the Closing Date (defined in SECTION 6.1) in
accordance with SECTION 3.2(e) (the SERVICE CONTRACTS);
(4) the personal property located on the respective tract of Real
Property and described on the list attached as EXHIBIT C to
this Contract (the PERSONAL PROPERTY) but excluding any
personal property specifically excluded on EXHIBIT C;
(5) the respective owner's interest in all plans for the
Improvements (the PLANS);
(6) the respective owner's interest in all warranties and
guaranties relating to the Improvements, if any, including all
unexpired third party warranties and guarantees, if any,
received in connection with the construction, improvement, or
equipment of the Improvements, but excluding all warranties
and guaranties from any Partnership Affiliate (defined in
SECTION 9.5) (the WARRANTIES); and
(7) all records and correspondence relating to tenants in the
respective Partnerships' possession or the respective
Partnerships' property manager, JPI Apartment Management, L.P.
(PROPERTY MANAGER) used in the continuing operation of the
Improvements excluding all documents that are subject to an
attorney-client privilege (the RECORDS).
The Real Property, the Improvements, the Leases, the Deposits, the
Guaranties, the Service Contracts, the Personal Property, the Plans,
the Warranties, and the Records are collectively called the PROPERTY.
Without limitation, the following are not included in the Property: the
names "Jefferson", "Jefferson Commons", the initials "JPI" (although
Seller's affiliate has provided a limited license for use of such
names/initials pursuant to a license agreement hereafter more
particularly set forth), any logo, trade name, or other name utilizing
"Jefferson", "Jefferson Commons", or "JPI", any software owned by or
licensed to any company or entity other than the Partnerships, any
professional photographs of the Property, including but not limited to,
photographs, negatives, and transparencies in digital or other form,
and any bonds or letters of credit issued in favor of any Governmental
Authorities (defined in SECTION 4.1) by the Partnerships or any
Partnership Affiliate in connection with the construction of the
Improvements.
L. Buyer wants to purchase, and Sellers want to sell and\or contribute the
JPI-GC Stock, the JPI-CG Membership Interests, the JPI-CG LP Interests,
the JPI-MC Stock, the JPI-MC Membership Interests, the JPI-MC LP
Interests, the Genpar GP Interest and the JPIIC LP Interest
(collectively, the INTERESTS).
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ARTICLE 1
PURCHASE PRICE AND XXXXXXX MONEY
Section 1.1 Agreement to Sell and Purchase.
Each Seller shall sell and\or contribute to Buyer, and Buyer shall purchase from
each Seller, the Partnership Interest owned by the respective Seller under the
terms of this Contract.
Section 1.2 Purchase Price.
(a) The PURCHASE PRICE of the Property is $303,910,000,
subject to all prorations and credits set forth
herein, payable in immediately available United
States funds at Closing (defined in SECTION 6.1).
(b) The Purchase Price is allocated as follows:
(i) For the Interests in Tallahassee, L.P.,
$23,485,000 of which $23,485 is allocated by
Seller to the JPI-CG Tallahassee Stock;
(ii) For the Interests in Western Michigan, L.P.,
$31,555,000 of which $31,555 is allocated by
Seller to the JPI-CG Western Michigan Stock;
(iii) For the Interests related to State College,
L.P., $37,000,000 of which $37,000 is
allocated by Seller to the JPI-MC State
College Stock;
(iv) For the Interests in Stillwater, L.P.,
$16,300,000 of which $16,300 is allocated by
Seller to the JPI-MC Stillwater Stock;
(v) For the Interests in Xxxxxx, X.X.,
$50,940,000 of which $50,940 is allocated by
Seller to the JPI-XX Xxxxxx Stock;
(vi) For the Interests in Lubbock, L.P.,
$27,680,000 of which $27,680 is allocated by
Seller to the JPI-MC Lubbock Stock;
(vii) For the Interests in Columbus, L.P.,
$22,000,000 of which $22,000 is allocated by
Seller to the JPI-MC Columbus Stock;
(viii) For the Interests in Knoxville, L.P.,
$23,000,000 of which $23,000 is allocated by
Seller to the JPI-MC Knoxville Stock;
(ix) For the Interests in Tampa, L.P.,
$33,950,000 of which $33,950 is allocated by
Seller to the JPI-MC Tampa Stock; and
(x) For the Interests in Lofts, L.P.,
$38,000,000.
(c) The Purchase Price is payable at Closing (defined in
SECTION 6.1) as follows:
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(i) By Buyer taking title to the Interests
assuming (subject to, and inclusive of the
non-recourse provisions thereof) all
obligations accruing from and after the
Closing Date under Seller's Existing Loans
(as defined in SECTION 2.2(i)) which are
generally described in SECTION 2.2(i), but
excluding those obligations resulting from a
default by Seller under the Existing Loans.
Seller shall cooperate with and assist
Buyer, but at no cost or expense to Seller
(other than its attorney's fees) and without
Seller or Seller Affiliates having to incur
any additional obligations, in connection
with the Buyer seeking consent from the
Lenders for the assumption of the Existing
Loans (subject to and inclusive of the
non-recourse provisions thereof) on terms
and conditions acceptable to Buyer in its
sole discretion and specifically without
Buyer being required to agree to any
material change of any term of any Existing
Loan document as a condition to Lender's
approval of the assumption (the ASSUMPTION).
Any and all fees or expenses required to be
paid to Lenders in connection with Buyer's
Assumption (subject to and inclusive of, the
non-recourse provisions thereof) of the
Existing Loans shall be borne one-half (1/2)
by Buyer and one-half (1/2) by Seller;
provided, however, any fees, expenses or
payments (but not payments representing all
or substantially all of the remaining
balance of the Existing Loans) resulting
from a default by Seller under the Existing
Loans prior to Closing shall be paid solely
by Seller at Closing. Additionally, Buyer
shall use commercially reasonable efforts to
obtain a release reasonably acceptable to
Seller of all liabilities, indemnities and
guarantees of Seller and Seller Affiliates
accruing from and after the Closing Date
under the Existing Loans (the SELLER
RELEASES) but Buyer shall not be obligated
to assume any additional obligations to the
Lenders to do so and Seller shall not be
obligated to pay any costs or fees (other
than its share of the assumption fees and
costs set forth above) not approved by
Seller; and
(ii) at the election of Seller, notice of which
shall be delivered in writing to Buyer by no
later than September 22, 2004 (the ELECTION
NOTICE), either:
(A) By (i) Buyer paying cash, by wire
transfer for disbursement to Seller
at Closing, the amount of the
Purchase Price, less the total
amount of unpaid principal and
accrued but unpaid interest owing
pursuant to the Existing Loans as
of the Closing Date, subject to
prorations and other debits or
credits provided for in this
Contract (the NET AMOUNT); or (ii)
Buyer paying and delivering to the
Seller or Seller's designees (the
DESIGNATED OWNERS), cash and units
of limited partnership interest in
the Buyer (UNITS) for disbursement
to Seller or to the Designated
Owners at Closing in the aggregate
amount equal to the Net Amount.
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(B) All cash payable at Closing shall
be sent by wire transfer to the
Closing Agent for disbursement to
each Seller at Closing. If all of
the Net Amount is payable to Seller
in cash, Seller hereby directs the
Buyer to pay the cash on the
Closing Date to the Seller as set
forth in SECTION 1.2 (b).
(C) If Seller makes an election
pursuant to SECTION 1.2(c)(II)(A)
to receive any portion of the Net
Amount in Units, Seller shall
deliver to Buyer, together with the
Election Notice, a schedule to this
Contract, which shall become
EXHIBIT E hereto, which shall set
forth, with respect to each Seller
(i) the name of the Seller or the
Designated Owners, (ii) the total
portion of the Net Amount payable
to such Seller and/or Designated
Owner, (iii) the portion of such
amount payable to such Seller which
shall be in the form of cash, (iv)
the portion of such amount which
shall be payable to such Seller or
the Designated Owner(s) in Units
and, if more than one recipient of
Units is designated, the specific
proportions to be issued to each.
The number of Units to be issued at
Closing to each Seller or
Designated Owner shall be equal to
(i) the unit value set forth in
EXHIBIT E for the respective
Seller, divided by (ii) the per
share price at which the common
stock (the COMMON STOCK) of
Education Realty Trust, Inc., a
Maryland corporation (the REIT), is
offered to the public in the
underwritten initial public
offering of the Common Stock (the
PUBLIC OFFERING) before any
discounts or fees paid to
underwriters. Each Seller and
Designated Owner to receive Units
and the holder of the Warrants
(hereinafter defined) under the
Warrant Agreement (hereinafter
defined) shall also provide to
Buyer within five (5) days after
Seller's delivery to Buyer of the
Election Notice, a duly executed
accredited investor questionnaire
in a form provided by Buyer (the
form of which to be substantially
similar to that provided to other
persons to confirm their accredited
investor status). If the Net Amount
is payable to Seller (or the
Designated Owners) in a combination
of cash and Units, Seller hereby
directs the Buyer to pay, issue and
distribute (as applicable) the cash
and the Units on the Closing Date
to the Seller and/or the Designated
Owners in accordance with EXHIBIT
E. No fractional Units will be
issued as consideration hereunder,
but in lieu of issuing fractional
Units, the value thereof shall be
paid in cash to Seller. Each
Designated Owner acknowledges that
any certificates evidencing the
Units will bear appropriate legends
indicating (1) that the Units have
not been registered under the
Securities Act of 1933, as amended
(SECURITIES ACT), and (2) that the
Buyer's Agreement of
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Limited Partnership (the BUYER'S
PARTNERSHIP AGREEMENT) will
restrict the transfer of the Units
but such restriction shall not be
more restrictive than that which
affects other third party Unit
holders. Upon receipt of the Units,
the Sellers or Designated Owners,
as applicable, shall become limited
partners of the Buyer and shall
execute the Buyer's Partnership
Agreement.
Section 1.3 Xxxxxxx Money.
(a) On the Effective Date (defined in SECTION 9.14), as a
condition to the continued effectiveness of this
Contract, Buyer shall deposit with Marble Title
Company, L.L.C. (TITLE COMPANY), as agent for Chicago
Title Insurance Company (CLOSING AGENT), 0000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention:
Xxxxx X. Xxxxxx, Phone: (000) 000-0000, Fax: (214)
965-1631, $798,000 in (i) immediately available
federal funds or (ii) the form of an unconditional
and irrevocable letter of credit in favor of Seller
and Closing Agent on terms and from an issuer
reasonably acceptable to Seller (a LETTER OF CREDIT)
(the XXXXXXX MONEY).
(b) The Xxxxxxx Money, if paid in the form of immediately
available federal funds (and not by Letter of
Credit), shall be applied to the Purchase Price at
Closing, however, any Letter of Credit shall be
returned to Buyer after Closing with no portion of
its funds having been credited against the Purchase
Price. The Xxxxxxx Money is non-refundable to Buyer
in all events, except for a Seller default or as
otherwise specifically set forth herein. If Buyer
fails to deliver the Xxxxxxx Money, this Contract
will automatically terminate. If Buyer fails to close
the transaction on January 31, 2005 and the Closing
is not extended by mutual written agreement of the
parties or pursuant to the provisions of SECTION 6.1,
this Contract will automatically terminate, the
Xxxxxxx Money will be paid to Seller and the parties
will have no further obligations to each other. If
any of the Xxxxxxx Money is in the form of a Letter
of Credit then, any reference in this Contract to
Seller being paid any portion of the Xxxxxxx Money is
deemed to include and Seller shall have the right to
draw upon any Letter of Credit and retain the
proceeds.
(c) If this Contract does not close, the Xxxxxxx Money
will be paid or the Closing Agent shall deliver the
Letter of Credit as provided in this Contract.
Closing Agent shall, promptly upon receipt, place the
wire transferred Xxxxxxx Money in a federally
insured, interest bearing account. All interest on
the Xxxxxxx Money becomes part of the Xxxxxxx Money.
All interest on the Xxxxxxx Money will be reported to
the Internal Revenue Service as income of Buyer.
Buyer shall promptly execute and deliver to Closing
Agent all forms reasonably requested by Closing Agent
with respect to the Xxxxxxx Money. Buyer acknowledges
and agrees that, except for a default by Sellers
under SECTION 7.1 or SECTION 7.2 or the occurrence of
a Major Casualty prior to Closing, the Xxxxxxx Money
is non-refundable to Buyer.
Page 12
(d) Closing Agent is authorized and directed to pay the
Xxxxxxx Money and/or deliver any Letter of Credit for
any portion of the Xxxxxxx Money to the party
entitled to receive the Xxxxxxx Money under the terms
of this Contract. Sellers or Buyer, as appropriate,
shall deliver a letter of instruction to Closing
Agent directing the disbursement of the Xxxxxxx Money
or the delivery of the Letter of Credit to the party
or parties entitled to receive the Xxxxxxx Money
promptly upon receipt of a demand from that party or
parties.
(e) Upon delivery of the Letter of Credit, if any, to
Seller, Seller is authorized to immediately present
it to the issuer for payment.
(f) The Letter of Credit shall contain an expiry date of
not earlier than April 29, 2005. If, for whatever
reason, Seller has been unable to present the Letter
of Credit for payment on or before March 29, 2005, or
if, once presented, Seller has not been paid the full
amount of the Letter of Credit by March 29, 2005, in
any such case, Buyer shall immediately cause a
substitute Letter of Credit to be issued in the same
amount with an expiry date of no earlier than May 30,
2005 (this process shall continue monthly until the
Letter of Credit is either delivered to Buyer or
tendered by Seller to the issuing bank such that they
do not expire prior thereto). If, for whatever
reason, Buyer fails to cause a substitute Letter of
Credit to be issued at least twenty-five (25) days
prior to the expiry date of the existing Letter of
Credit, then Buyer and Seller hereby authorize
Closing Agent to immediately present the existing
Letter of Credit for payment and, once paid, to hold
the proceeds as "Xxxxxxx Money" in accordance with
the terms of this Contract. Buyer and Seller agree
that Closing Agent is authorized to present the
Letter of Credit for payment even if Buyer has
delivered instructions to the contrary to Closing
Agent; provided, that Closing Agent shall not present
the existing Letter of Credit as authorized by this
SECTION 1.3(f) only if Closing Agent receives written
instructions to the contrary from both Buyer and
Seller. TO SIGNIFY THEIR AWARENESS AND AGREEMENT TO
BE BOUND BY THE TERMS, OF THIS SECTION 1.3(f), BUYER
AND SELLER, THROUGH THEIR AUTHORIZED REPRESENTATIVES
HAVE SEPARATELY INITIALED THIS SECTION 1.3(f). This
SECTION 1.3(f) shall survive the termination or
expiration of this Contract.
BUYER'S INITIALS:
----------------------
SELLER'S INITIALS:
----------------------
ARTICLE 2
TITLE INSURANCE, OTHER INFORMATION, AND SURVEY
Section 2.1 Title Insurance.
Page 13
(a) Buyer shall assume Sellers' existing Sellers Owner
Policy of Title Insurance for the Real Property and
Improvements (on the standard form in use in the
State where the Property is located) (collectively,
the OWNER POLICY) and Sellers shall use its
commercially reasonable efforts to cause Closing
Agent to agree to update each Owner Policy to reflect
the Purchase Price of each Property. Buyer may
request that Title Company issue other available
endorsements to the Owner Policy, but any affidavits,
indemnities or other documents requested by Title
Company in order for it to issue any endorsements are
subject to approval by Seller in its sole discretion.
Buyer may elect, for any or all of the Properties, to
obtain new owner policies of title insurance
(collectively, the NEW POLICY). If Buyer elects to
obtain any New Policy, then Buyer is responsible for
payment of the premium for the Standard Coverage
Owner Policy, the premiums charged for and costs
associated with obtaining extended coverage and
endorsements to the New Policy and for any loan
policy or endorsements required by Buyer's lender,
but Seller is not obligated to cause Closing Agent to
issue any endorsements to the New Policy or any
lender policy.
(b) Sellers have previously caused Closing Agent to
furnish to Buyer the Owner Policy together with
copies of all documents referenced as title
exceptions in the Owner Policy.
Section 2.2 Other Information.
Buyer and Seller acknowledge that, prior to the Effective Date, Sellers have
delivered to Buyer the following for each individual entity and, for the purpose
of due diligence, each Property (collectively, the DOCUMENTS):
(a) a rent roll (by building, apartment number and
bedroom) (RENT ROLL), certified to be true and
correct in all material respects by Seller, dated no
earlier than 5 days prior to the date Seller delivers
same showing:
(i) move-in, term, and expiration date for each
Lease;
(ii) name of the tenant listed on each Lease;
(iii) the amount of the monthly rent for the unit,
any garage, and any other amenity leased by
the tenant;
(iv) the amount of the security and other
deposits; and
(v) if the apartment is vacant, the market rent
for the unit;
(b) a delinquency report showing the amount of any
arrearages or delinquencies by tenants under the
Leases, certified to be true and correct in all
material respects by Seller;
Page 14
(c) a concession matrix identifying rent concessions or
forbearances for the Leases, certified to be true and
correct in all material respects by Seller;
(d) copies of the reports listed in EXHIBIT F attached to
this Contract (the REPORTS) which Reports are
delivered "AS-IS" and, except as specifically set
forth in Section 4.1(h), Seller makes no
representation or warranty concerning the accuracy,
correctness, completeness, suitability or utility of
the Reports or the information contained or not
contained therein.
(e) copies of the Service Contracts;
(f) copies of all certificates of occupancy and other
permits or licenses necessary for the operation of
the Property in the Partnerships' possession or the
possession of Property Manager;
(g) a copy of the most recent as-built survey of the Real
Property and the Improvements in the Partnerships'
possession;
(h) copies of ad valorem tax statements for tax years
2002 and 2003;
(i) copies of the documents and instruments listed on
EXHIBIT G executed in connection with the
indebtedness (the EXISTING LOANS) payable to the
order of JPMorgan Chase Bank, Nationwide Life
Insurance Company or Citigroup Global Markets Realty
Corp., their respective successors and assigns as
"Lenders" (LENDERS);
(j) copies of the Partnerships' federal and state, if
applicable, income Tax Returns (defined in SECTION
6.5) for calendar years 2002 through 2003;
(k) financial statements showing income and expense for
the years 2001 (to the extent available), 2002 and
2003 (on a monthly basis), certified true, correct,
and complete in all material respects by an
authorized officer of Seller;
(l) an operating statement for the current year (updated
monthly within twenty (20) days after the end of the
month through Closing) detailing all income and
expense items for the Property, certified true,
correct and complete in all material respects by an
authorized officer of Seller; and
(m) true, correct and complete copies of:
(i) the Articles of Incorporation, Bylaws,
minute books and stock records of
Tallahassee, Inc., Western Michigan, Inc.,
Stillwater, Inc., State College, Inc.,
Xxxxxx, Inc., Lubbock, Inc., Columbus, Inc.,
Knoxville, Inc., and Tampa, Inc. (the
CORPORATE DOCUMENTS);
(ii) the Certificate of Formation, the Limited
Liability Company Agreement and any written
consents or actions of the members or
Page 15
managers of Tallahassee LLC, Western
Michigan LLC, Stillwater LLC, State College
LLC, Xxxxxx LLC, Lubbock LLC, Columbus LLC,
Knoxville LLC, Tampa LLC and Limpar LLC (the
LLC DOCUMENTS);
(iii) the Certificate of Limited Partnership, the
Partnership Agreement and any written
consents or actions of the general or
limited partners of Tallahassee, L.P.;
Western Michigan, L.P., Stillwater, L.P.,
State College, L.P.; Xxxxxx, X.X.; Lubbock.
L.P.; Columbus, L.P.; Knoxville, L.P.;
Tampa, L.P. and Lofts, L.P. (the LP
DOCUMENTS); and
(n) all material contracts in effect for any of the
entities to be acquired by Buyer pursuant to this
Contract (the ENTITIES).
Section 2.3 Survey.
Buyer acknowledges that Seller has previously delivered to Buyer an as-built,
ALTA/ACSM (or similar) survey of each Property prepared by the surveyors and
dated as set forth on EXHIBIT H (collectively, the SURVEY). Updates to or
recertifications of the SURVEY shall be at Buyer's expense.
Section 2.4 Other Property.
Seller hereby discloses that as of the Effective Date it has not entered into
any contracts for the purchase of property to be developed as "for rent" student
housing within a ten (10) mile radius of any Property, except as set forth on
EXHIBIT I.
ARTICLE 3
TITLE REVIEW AND DUE DILIGENCE
Section 3.1 Title Review.
(a) Buyer acknowledges that it has reviewed the
Commitment, the title exception documents listed
therein and the Survey prior to execution of this
Contract, waives any objection it might have to such
items and accepts and approves all matters shown
thereon. Except as specifically set forth in SECTION
3.1(b), by its execution of this Contract, Buyer
accepts the Property and all title and survey matters
and the Xxxxxxx Money is non-refundable to Buyer,
except as specifically set forth in this Contract.
(b) Neither Sellers nor the Partnerships have any
obligation to cure any matters shown on the
Commitment or the Survey. Notwithstanding the
preceding sentence, Seller shall cure monetary liens
that can be cured solely by the payment of money and
shall bond around any mechanics' or materialmen's
lien(s) and abstract(s) of judgment to Closing
Agent's reasonable satisfaction; provided, that
Seller will not be required to
Page 16
expend or, in the case of a bond, be liable for more
than $25,000 for any single Property to cure any such
monetary liens or bond around any mechanics' or
materialmen's lien(s) and abstract(s) of judgment
related to any individual Property.
(c) All exceptions shown on the Owner Policy, the title
exception documents, or the Survey, except for
mechanics' or materialmen's lien(s) and abstract(s)
of judgment which Seller shall cure to the extent
provided in SECTION 3.1(b), are the PERMITTED
EXCEPTIONS. The Permitted Exceptions include the
restriction against conversion of the Real Property
to a condominium regime specified in the Deed
(defined in SECTION 6.2(a)).
(d) At or prior to Closing, the Partnerships shall
execute and record a deed restriction (the DEED
RESTRICTIONS) in substantially the form attached to
this Contract as EXHIBIT J prohibiting the imposition
of a condominium regime on the Real Property and
Improvements for a period of 15 years after the
Closing Date without the consent of Sellers.
Section 3.2 Due Diligence Period.
(a) Until this Contract is terminated in accordance with
its terms, Buyer may enter the Real Property and
Improvements to conduct inspections of the Real
Property and Improvements, including any third party
inspections, review the Records, and review and
analyze all materials, surveys, maps, and reports,
provided by Sellers or the Partnerships under this
Contract. Buyer must notify Sellers of its or its
agents or contractors intention to enter the Real
Property and Improvements at least 24 hours prior to
each intended entry and obtain Sellers' prior
approval, not to be unreasonably withheld, of the
proposed scope of the inspections and tests. No
invasive testing or inspections may be performed
without prior written approval of Sellers, which
approval may be withheld or given in Seller's
reasonable discretion. Seller may, at its option,
have a representative present for each inspection or
test. Buyer may not enter into any unit except in
accordance with the Lease and in accordance with
applicable law. All consultants who perform
inspections or testing at the Real Property on behalf
of Buyer are subject to Seller's prior approval, not
to be unreasonably withheld.
(b) Buyer acknowledges that it has entered the Real
Property and Improvements prior to the Effective Date
to conduct inspections of the Real Property and
Improvements, review the Records, and review and
analyze all materials, surveys, maps, reports, and
other matters and information provided by Seller
under this Contract. By its execution of the
Contract, Buyer accepts the Property and the Xxxxxxx
Money is non-refundable to Buyer, except as
specifically set forth in this Contract.
(c) Prior to any entry on the Real Property and
Improvements, Buyer or its Affiliate shall deliver to
Sellers a reasonably satisfactory certificate of
Page 17
insurance evidencing that Buyer has commercial
general liability insurance and automobile liability
insurance, on an occurrence basis, with limits of at
least $2,000,000 and $1,000,000, respectively, each
issued by an insurance company licensed to do
business in the State where the Real Property is
located and with an A. M. Best Company rating of at
least A-VIII and a reasonably satisfactory
endorsement Partnerships identifying Seller and its
property management company as additional insureds.
Buyer's or its Affiliate's insurance policies must be
primary with respect to any liability insurance
carried by the Partnerships or Sellers.
(d) Buyer shall perform, and shall cause its agents,
employees, and contractors to perform, all
inspections and reviews of the Property so as not to
cause any damage, loss, cost, or expense to, or
claims against any Seller, the Partnerships, or the
Property. Buyer shall, at its expense, promptly
repair any damage to the Property caused by or
attributable to Buyer's inspections or testing to the
condition existing prior to the inspection or
testing. Buyer shall indemnify, defend, and hold each
Seller and the Partnerships and its property
management company and their respective agents and
employees harmless for, from and against any damage,
loss, cost, expense (including, without limitation,
reasonable legal fees, court costs, and expenses), or
claims caused by, attributable to, or resulting from
the acts or omissions on or about the Property by
Buyer, its agents, employees, contractors, or
consultants. Notwithstanding the foregoing, Buyer
shall have no liability for pre-existing conditions
discovered by Buyer's tests, inspections or reviews.
Buyer shall cause any lien filed against the Real
Property by a consultant, contractor, subcontractor,
or other person or entity arising by, through, or
under Buyer or otherwise attributable to Buyer's
inspection, testing, and review of the Property to be
released of record (whether through payment or
bonding) within 20 days after receipt of notice from
either Seller of the filing of any lien. The terms of
this SECTION 3.2(d) are not limited by SECTION 7.3.
(e) Buyer acknowledges that it has reviewed all Service
Contracts listed in EXHIBIT B and all Service
Contracts listed in EXHIBIT B are approved by Buyer
and Buyer may not reject any Service Contract listed
in EXHIBIT B. All Service Contracts listed in EXHIBIT
B will be assumed by Buyer at Closing. Buyer will be
liable for any obligations under all Service
Contracts approved by Buyer extending past the
Closing Date.
(f) The terms of this SECTION 3.2 survive the Closing or
any termination of this Contract.
ARTICLE 4
SELLERS' REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 4.1 Each Sellers' Representations and Warranties.
Page 18
Each Seller, severally and not jointly, represents and warrants to Buyer with
respect to the Interests owned by such Seller:
(a) Tallahassee, L.P., Western Michigan, L.P.,
Stillwater, L.P., State College, L.P., Xxxxxx, X.X.,
Lubbock, L.P., Columbus, L.P., Knoxville, L.P.,
Tampa, L.P., and Lofts, L.P. are all Delaware limited
partnerships, validly existing and in good standing
under the laws of the State of Delaware, and are, to
the extent necessary, qualified to do business in the
State where the Real Property is located.
(b) The copies of the LP Documents delivered to Buyer
under SECTION 2.2 are true, correct, and complete
copies thereof, including any amendments thereto.
(c) Tallahassee LLC, Western Michigan LLC., Stillwater
LLC, Limpar LLC, State College LLC, Xxxxxx LLC,
Lubbock LLC, Columbus LLC, Knoxville LLC, and Tampa
LLC are all Delaware limited liability companies,
validly existing and in good standing under the laws
of the State of Delaware, and are, to the extent
necessary, qualified to do business in the State
where the Real Property is located.
(d) The copies of the LLC Documents delivered to Buyer
under SECTION 2.2 are true, correct, and complete
copies thereof, including any amendments thereto.
(e) Tallahassee, Inc., Western Michigan, Inc.,
Stillwater, Inc., State College, Inc., Xxxxxx, Inc.,
Lubbock, Inc., Columbus, Inc., Knoxville, Inc., and
Tampa, Inc., are all Delaware corporations, validly
existing and in good standing under the laws of the
State of Delaware.
(f) The copies of the Corporate Documents delivered to
Buyer under SECTION 2.2 are true, correct, and
complete copies thereof, including any amendments
thereto.
(g) Each Seller is the entity it is described to be in
the first paragraph of this Contract, is validly
existing and in good standing under the laws of the
State of its formation, which is set forth in the
first paragraph of this Contract.
(h) Each entity comprising Seller has the authority to
execute this Contract and to perform its obligations
under this Contract. The person executing this
Contract on behalf of Seller is duly authorized to do
so.
(i) The Seller owns good title to the respective stock,
membership interests and partnership interests that
it is transferring through this Contract, free and
clear of all liens, claims, and encumbrances other
than those arising under applicable securities laws.
Page 19
(j) The stock in Tallahassee, Inc., Western Michigan,
Inc., Stillwater, Inc., State College, Inc., Xxxxxx,
Inc., Lubbock, Inc., Columbus, Inc., Knoxville, Inc.,
and Tampa, Inc. which is being transferred to Buyer
constitutes all of the outstanding stock in those
corporations and there are no options, warrants, or
rights of any kind to acquire any stock in those
entities.
(k) The membership interests in Tallahassee LLC, Western
Michigan LLC, Stillwater, LLC, State College LLC,
Xxxxxx LLC, Lubbock LLC, Columbus LLC, Knoxville LLC,
and Tampa LLC to be transferred to Buyer by Seller,
are, except for the membership interests held by
Tallahassee, Inc., Western Michigan, Inc.,
Stillwater, Inc., State College, Inc., Xxxxxx, Inc.,
Lubbock, Inc., Columbus, Inc., Knoxville, Inc., and
Tampa, Inc., all of the membership interests in those
limited liability companies and there are no options,
warrants, or rights of any kind to acquire any
additional interests in those entities.
(l) The membership interest in Limpar LLC to be
transferred to Buyer by Seller, is the sole
membership interest in that limited liability company
and there are no options, warrants, or rights of any
kind to acquire any additional interests in those
entities.
(m) The limited partnership interests in Tallahassee,
L.P., Western Michigan, L.P., Stillwater, L.P., State
College, L.P., Xxxxxx, X.X., Lubbock, L.P., Columbus,
L.P., Knoxville, L.P., Tampa, L.P. and Lofts, L.P.
are the sole limited partnership interests of the
respective Partnerships and there are no options,
warrants, or rights of any kind to acquire any
additional interests in those entities.
(n) The general partnership interests held by Tallahassee
LLC, Western Michigan LLC, Stillwater LLC, State
College LLC, Xxxxxx, LLC, Lubbock LLC, Columbus LLC,
Knoxville LLC, Tampa, LLC and Genpar, are the sole
general partnership interests of the respective
partnerships and there are no options, warrants, or
rights of any kind to acquire any additional
interests in those entities.
(o) Other than as listed on EXHIBIT K, attached hereto
and made a part hereof, there is no pending or, to
Seller's knowledge, overtly threatened litigation, or
other process, private or regulatory, affecting the
Real Property, Improvements or any entity comprising
the Partnership or Seller that, if decided adversely,
would have a Material Adverse Effect on the use or
operation of the Real Property and Improvements or
Seller's ability to perform its obligations
hereunder.
(p) Seller is in compliance with the requirements of
Executive Order No. 133224, 66 Fed. Reg. 49079 (Sept.
25, 2001) (the ORDER) and other similar requirements
contained in the rules and regulations of the Office
of Foreign Assets Control, Department of the Treasury
(OFAC) and in any enabling legislation or other
Executive Orders or regulations in respect
Page 20
thereof (the Order and such other rules, regulations,
legislation, or orders are collectively called the
ORDERS).
(q) Neither Seller nor any beneficial owner of Seller nor
any Person who provides loans to Seller:
(i) is listed on the Specially Designated
Nationals and Blocked Persons List
maintained by OFAC pursuant to the Order
and/or on any other list of terrorists or
terrorist organizations maintained pursuant
to any of the rules and regulations of OFAC
or pursuant to any other applicable Orders
(such lists are collectively referred to as
the LISTS);
(ii) is an individual, corporation, partnership,
limited liability company, unincorporated
organization, government or any agency or
political subdivision thereof or any other
form of entity (collectively, a PERSON) who
has been determined by competent authority
to be a Person with whom a U.S. Person is
prohibited from transacting business,
whether such prohibition arises under U.S.
law, regulation, executive orders or any
lists published by the United States
Department of Commerce, the United States
Department of Treasury or the United States
Department of State including any agency or
office thereof;
(iii) is owned or controlled by, or acts for or on
behalf of, any Person on the Lists or any
other Person who has been determined by
competent authority to be a Person with whom
a U.S. Person is prohibited from transacting
business, whether such prohibition arises
under U.S. law, regulation, executive orders
or any lists published by the United States
Department of Commerce, the United States
Department of Treasury or the United States
Department of State including any agency or
office thereof; or
(iv) is under investigation by any governmental
authority for, or has been charged with, or
convicted of, money laundering, drug
trafficking, terrorist-related activities,
any crimes which in the United States would
be predicate crimes to money laundering, or
any violation of any Anti-Money Laundering
Laws.
For purposes of this Section and Section 5.1, U.S. PERSON
means any United States citizen, any entity organized under
the laws of the United States or its constituent states or
territories, or any entity, regardless of where organized,
with a principal place of business within the United States or
any of its territories. For purposes of this Section and
Section 5.1, ANTI-MONEY LAUNDERING LAWS means those laws,
rules, regulations, orders and sanctions, state and federal,
criminal and civil, that (i) limit the use of and/or seek the
forfeiture of proceeds from illegal transactions; (ii) limit
commercial transactions with designated countries or
individuals believed to be terrorists, narcotic dealers or
otherwise engaged in activities contrary to the interests of
the United States; or (iii) are designed to
Page 21
disrupt the flow of funds to terrorist organizations. Such
laws, regulations and sanctions are deemed to include the
Executive Order Number 13224 on Terrorism Financing (September
23, 2001), the Patriot Act; the Currency and Foreign
Transactions Reporting Act (also known as the Bank Secrecy
Act, 31), the Trading with the Enemy Act, 50 U.S.C. Appx.
Section 1 et seq., the International Emergency Economics
Powers Act, 50 U.S.C. Section 1701 et seq., and the sanction
regulations promulgated pursuant thereto by OFAC, as well as
laws relating to prevention and detection of money laundering
in 18 U.S.C. Sections 1956 and 1957, as amended.
(r) There are no attachments, executions, assignments for
the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy or under other debtor
relief laws contemplated by, pending, or, to the
Seller's knowledge, threatened against Seller, any
entity comprising Seller, or the respective Property.
Seller and each entity comprising Seller has been and
will be solvent at tall times prior to the transfer
of the Interests to Buyer.
(s) The Leases available for review by Buyer are true and
correct copies of the actual Leases in the
Partnerships' possession and are the complete written
documentation of the agreement between the
Partnerships, as landlord, and the tenants.
(t) The Partnerships have each filed all Tax Returns
required by applicable law to be filed by it. All Tax
Returns are true and correct in all material
respects.
(u) No audit by a Tax (defined in SECTION 6.5) authority
is pending or, to the best of the Seller's knowledge,
threatened with respect to any Tax Return filed by,
or Taxes due from, any of the Partnerships. No issue
has been raised by any Tax authority in any audit of
the Partnerships that if raised with respect to any
other period not so audited could be expected to
result in a material proposed deficiency for any
period not so audited. No deficiency or adjustment
for any Taxes has been threatened, proposed,
asserted, or assessed against any of the
Partnerships. There are no liens for Taxes upon the
assets of the Partnerships, except liens for current
Taxes not yet due.
(v) To the Seller's knowledge, none of the Partnerships
have given or been requested to give any waiver of
statutes of limitations relating to the payment of
Taxes and none have executed any powers of attorney
with respect to Tax matters that will be outstanding
as of the Closing Date:
(w) None of the Partnerships are and none have been since
their respective formations, classified as an
association taxable as a corporation for Federal
income tax purposes for any and all periods up to and
including the Closing. The Internal Revenue Service
has not asserted or, to the best of the Seller's
knowledge, threatened to assert, that any of the
Page 22
Partnerships should be classified as an association
taxable as a corporation for Federal income tax
purposes.
(x) All material obligations of the Partnerships are
reflected in the Partnerships' financial statements
and operating statements delivered to Buyer under
SECTION 2.2 other than obligations incurred by the
Partnerships in the ordinary course of business, all
of which will be prorated under SECTION 6.3. For the
purposes of this clause only, the term MATERIAL means
an individual obligation that exceeds $1,000 or
aggregate obligations that exceed $20,000. Nothing in
this SECTION 4.1(x) is intended to, or may be
construed to, expand any specific representation and
warranty of any Seller under this SECTION 4.1.
(y) The Service Contracts, Plans, Warranties, Records,
and Reports provided to Buyer by or on behalf of the
Partnerships are true and correct copies of all such
documents.
(z) Except for the Existing Loans that Buyer will assume
at Closing, there are no rights, options, or other
agreements of any kind to purchase or otherwise
acquire or sell or otherwise dispose of the Property
or any interest in the Property.
(aa) Except for the consent of (1) the Lenders for Buyer's
assumption of the Existing Loans and (2) the Lender
under that certain mezzanine financing from RAIT
Limited Partnership (RAIT), no further consent,
approval, authorization, order, license, certificate,
permit, registration, designation or filing by or
with any third party or governmental agency or body
is necessary for the execution, delivery and
performance of this Contract and the transactions
contemplated hereby by any entity comprising Seller
(although some permits may require assignment or
reapplication with respect to continued operations).
(bb) The Seller's execution, delivery and performance of
this Contract and the consummation of the
transactions contemplated hereby have been duly
authorized by all necessary corporate, partnership or
limited liability company action of the Seller and no
other action is required by law, or pursuant to the
Seller's certificate of limited partnership,
partnership agreement, certificate of formation, or
limited liability company agreement for such
authorization; this Contract is the legal, valid, and
binding obligation of, and is enforceable against the
Seller in accordance with its terms, except to the
extent such enforcement may be affected by general
principles of equity, or by bankruptcy and other laws
affecting the rights of creditors generally; assuming
the consent required of the Lenders for the
assumption of the Existing Loans and the transfer of
the Interests is obtained, the execution and delivery
of this Contract and the compliance with the terms
and conditions of this Contract by the Seller will
not breach or conflict with any of the terms,
conditions, or provisions of any agreement or
instrument to which the Seller is a party or by which
the Seller is or may be bound, or constitute a
default thereunder; and, to the
Page 23
Seller's knowledge, and except as otherwise provided
under the Existing Loans, the authorization,
execution, and delivery of this Contract and the
consummation of the transaction contemplated hereby,
will not, with or without the giving of notice or
passage of time or both:
(i) violate, conflict with or result in the
breach of any terms or provisions of, or
require any notice, filing, or consent,
which has not been obtained, under:
(A) the certificate of limited
partnership or limited partnership
agreement of the Seller; or
(B) the certificate of formation or
limited liability company agreement
of the Seller; or
(C) any statutes, laws, rules, or
regulations of any governmental
body applicable to the Seller, the
Partnerships or the Property; or
(D) any judgment, decree, writ,
injunction, order or award of any
arbitrator, court or governmental
authority binding upon the Seller,
the Partnerships or the Property.
(ii) conflict with, result in the breach of any
terms or provisions of, require any notice
or consent under, give rise to a right of
termination of, or constitute a default
under, the tenant Leases or any agreement or
instrument of any kind to which the any of
the Partnerships are a party or by which the
Property is bound; or
(iii) result in any lien, claim, encumbrance or
restriction on the Property.
(cc) With respect to the Property, as of the Effective
Date of this Contract:
(i) There are no maintenance, management, or
Service Contracts in effect with respect to
or affecting the Property or any part
thereof that will not be terminated as of
the Closing, other than the agreements set
forth in EXHIBIT B.
(ii) There are no persons now employed by Seller
or a Seller Affiliate who Buyer will be
obligated to hire or retain at or after
Closing.
(iii) There are no condemnation proceedings
pending or, to the actual knowledge of the
Partnership, threatened against the Real
Property, the Improvements or any part
thereof.
(iv) Seller has not received any written notice
and to Seller's knowledge, which knowledge
is deemed to be limited to the environmental
reports included as part of the Reports
(collectively,
Page 24
the ESA), and except for matters and
materials present at the Real Property and
Improvements in the ordinary course of
operation of the Real Property and
Improvements as an apartment complex, there
are no Hazardous Materials (defined in
SECTION 9.12(a) but excluding from such
definition fungi of all forms and types)
present at the Real Property and
Improvements other than any specified in the
ESA. The Partnership makes no representation
or warranty relating to fungi of any form or
type.
(v) Except for the Existing Loans, no person or
entity holds or claims a right of first
refusal or option to acquire the Property
or, except for the Existing Loans and the
Permitted Exceptions, an interest in the
Property or any part thereof.
(dd) Except as included in the Leases or has been
disclosed in writing to Buyer, there are no other
rights of occupancy by any person.
(ee) The Documents required by SECTION 2.2 to be certified
by the Partnerships as true and correct are true and
correct in all material respects.
(ff) To the Partnerships' knowledge, the Partnerships are
not in material default under any of the Leases.
(gg) The Partnerships have no employees.
(hh) The list of Personal Property set forth on EXHIBIT C
is true, correct and complete in all material
respects. Seller owns all of the tangible Personal
Property which is used in and, individually or in the
aggregate with other such property, is material to
the operation of the Property; provided, however,
Seller holds no license for the use of the management
software and such software license shall not be
transferred to Buyer. Except for the Existing Loans,
to the Seller's knowledge, such Personal Property is
free and clear of all liens. All Personal Property
located at or on the Property shall remain and not be
removed prior to the Closing, except in the ordinary
course of business or for equipment that becomes
obsolete or unusable, which may be replaced in the
ordinary course of business.
(ii) The list of Service Contracts set forth on EXHIBIT B
is true, correct and complete in all material
respects. To the Seller's knowledge, no event of
default exists (which remains uncured) under any of
the Service Contracts which would have a Material
Adverse Effect. For purposes of this Contract,
MATERIAL ADVERSE EFFECT means an event that would
have a material adverse effect on the business,
financial condition or results of operations of the
Property. True and complete copies of the Service
Contracts have been provided to Buyer.
(jj) The environmental reports listed in EXHIBIT F are the
latest reports obtained with respect to the
respective Property.
Page 25
(kk) The list of documents set forth on EXHIBIT G is a
complete list of all material Loan Documents (as
hereinafter defined) related to the Existing Loans.
To the Seller's knowledge, the Existing Loans and the
documents entered into in connection therewith
(collectively, the LOAN DOCUMENTS) are in full force
and effect as of the Effective Date. To the Seller's
knowledge, no event of default or event that with the
passage of time or giving of notice or both would
constitute an event of default has occurred as of the
Effective Date under any of the Loan Documents which
would have a Material Adverse Effect. True and
complete copies of the Loan Documents have been
provided to Buyer.
(ll) Except as set forth on EXHIBIT L, Seller has received
no written notice concerning the Real Property or the
Improvements from any Governmental Authority stating
that the Real Property or the Improvements are in
violation of any federal, state, county, or city
statute, ordinance, code, rule, or regulation which
remains uncured or which, if uncured at Closing,
would have a Material Adverse Effect. The terms
GOVERNMENTAL AUTHORITY and GOVERNMENTAL AUTHORITIES
mean the United States of America, the State, the
county, and city where the Real Property is located,
and any other political subdivision in which the Real
Property is located or that exercises jurisdiction
over the Real Property and Improvements or the
construction of multifamily residential improvements
on the Real Property, and any agency, department,
commission, board, bureau, property owners
association, utility district, flood control
district, improvement district, or similar district,
or other instrumentality of any of them.
(mm) There is no pending or, to Seller's knowledge
threatened condemnation or change in zoning affecting
the Property. Except as disclosed in writing to
Buyer, no portion of any Property is a designated
historic property or located within a designated
historic area.
(nn) There are no so-called "redec" or "redecorating fees"
collected from tenants of the Properties.
(oo) Each Seller and Designated Owner electing to receive
Units hereunder and JPIIC as the recipient of the
Warrants (collectively, the HOLDERS):
(i) is knowledgeable, sophisticated and
experienced in business and financial
matters; each Holder has previously invested
in securities similar to the Units or the
Warrants and the common stock into which the
Units may be converted or for which the
Warrants may be exercised, as applicable
(the SECURITIES) and fully understands the
limitations on transfer imposed by the
federal securities laws and as described in
this Contract. Each Holder is able to bear
the economic risk of holding the Securities
for an indefinite period and is able to
afford the complete loss of his, her or its
investment in the Securities; each Holder
has received and reviewed all information
and documents about or pertaining to the
Page 26
REIT, the Buyer, the business and prospects
of the REIT and the Buyer and the issuance
of the Securities as each Holder deems
necessary or desirable, and has been given
the opportunity to obtain any additional
information or documents and to ask
questions and receive answers about such
information and documents, the REIT, the
Buyer, the Properties, the business and
prospects of the REIT and the Buyer and the
Securities which such Holder deems necessary
or desirable to evaluate the merits and
risks related to its investment in the
Securities; and each Holder understands and
has taken cognizance of all risk factors
related to the purchase of the Securities.
Each Holder is a sophisticated real estate
investor. In acquiring the Securities and
engaging in this transaction, no Holder is
relying upon any representations made to it
by the Buyer, or any of the officers,
employees, or agents of the Buyer not
contained herein. Each Holder is relying
upon its own independent analysis and
assessment (including with respect to
taxes), and the advice of such Holder's
advisors (including tax advisors), and not
upon that of the Buyer or any of the Buyer's
advisors or affiliates, for purposes of
evaluating, entering into, and consummating
the transactions contemplated by this
Contract. Each Holder represents and
warrants that it has reviewed and approved
the form of the Buyer's Partnership
Agreement attached hereto as EXHIBIT M;
(ii) understands that none of the Units, the
Warrants or the Common Stock issuable upon
redemption of the Units or exercise of the
Warrants have been registered under the
Securities Act or any state securities acts
and are instead being offered and sold in
reliance on an exemption from such
registration requirements. The Securities
issuable to each Holder (or its designee)
are being acquired solely for its own
account, for investment, and are not being
acquired with a view to, or for resale in
connection with, any distribution,
subdivision, or fractionalization thereof,
in violation of such laws, and the Holder
has no present intention to enter into any
contract, undertaking, agreement, or
arrangement with respect to any such resale;
provided, however, that, at or following
Closing, the Holder may distribute the Units
or Warrants, as applicable to those of its
members or successors that (1) have
represented and warranted to the Buyer in
writing that, as of the time of such
distribution, such member is an accredited
investor as that term is defined in Rule 501
of Regulation D under the Securities Act,
and (2) with respect to the Unit transfers,
have executed the Buyer's Partnership
Agreement as limited partners. Each Holder
understands that any certificates evidencing
the Securities will contain appropriate
legends reflecting the requirement that the
Securities not be resold without
registration under such laws or the
availability of an exemption from such
Page 27
registration and that the Buyer's
Partnership Agreement will restrict transfer
of the Securities;
(iii) is an "accredited investor" as that term is
defined in Rule 501 of Regulation D under
the Securities Act of 1933, as amended. Each
Holder will provide the Buyer with a duly
executed Accredited Investor Questionnaire
as set forth elsewhere in this Contract; and
(iv) understands that each Unit shall be
redeemable at the option of the holder, in
accordance with, but subject to the
restrictions contained in, the Buyer's
Partnership Agreement; provided, however,
that such redemption option may not be
exercised prior to the first anniversary of
the Closing Date.
Section 4.2 Several Liability; Survival of Representations and
Warranties.
(a) Notwithstanding anything contained herein to the
contrary, each of the parties comprising Seller shall
be responsible and liable hereunder only with respect
to its respective Interests. All covenants and
agreements of Seller under this Contract shall be the
several obligations of the owners of the respective
Interests, shall be the several obligation of such
Seller and shall bind and/or be made by each Seller
only as to the Interests owned by such Seller as if a
separate agreement had been executed by and between
such respective Seller and Buyer for the Interests
related to each Property. Notwithstanding the
foregoing, a default under this Contract by any
Seller shall constitute a default under this Contract
with respect to all Sellers and all Interests.
(b) The representations and warranties in SECTION 4.1
will be deemed made on and as of the Closing Date
with the same force and effect as if made at that
time and shall survive Closing for a period of 9
months, at which time they terminate unless a claim
for breach thereof has been instituted within the
11-month period as specified in the next sentence.
Buyer may bring an action against the respective
Seller for a material (defined in SECTION 7.1) breach
of any of Seller's representations and warranties
only if (i) Buyer gives such Seller written notice of
the circumstances giving rise to a material breach
within the 11-month period after Closing, (ii) the
aggregate, actual damages from all breaches by such
Seller exceeds $10,000, and (iii) the breach was not
waived pursuant to SECTION 7.1 hereof. Buyer may
collect only actual damages for any breach of
Seller's representations and warranties under this
Contract. Buyer and Seller waive the right to collect
special, consequential, incidental, punitive, or any
other damages other than actual damages in connection
with this transaction and this Contract. Except for
(i) any adjustment of the prorations as set forth in
SECTION 6.3, (ii) the warranties in the Deed, the
Xxxx of Sale, and the Assignment of Leases, and (iii)
claims in tort which are covered (in whole or in
part) by Seller's liability insurance, (a) any
Seller's liability for damages related to any
Interests related to a single
Page 28
Property is limited to $300,000; provided, that the
aggregate liability of all Sellers for all damages of
any kind related to this Contract or this transaction
is limited to and shall not exceed $1,400,000 (Buyer
hereby waiving the right to claim damages in excess
thereof), except for fraud, and (b) any suit against
Seller for damages must be instituted within 2 years
and 1 day after Closing or the damages are thereafter
barred.
(c) The provisions of this SECTION 4.2 survive the
Closing or any termination of this Contract.
Section 4.3 Knowledge Standard.
For purposes of this Contract, the terms SELLER'S KNOWLEDGE and BUYER'S
KNOWLEDGE mean the current, actual knowledge of the individuals listed on
EXHIBIT N attached to this Contract, without independent inquiry and without any
actual or implied duty to inquire, and does not include knowledge imputed to
Seller or to the Buyer, as the case may be, from any other person. The named
individuals are acting for and on behalf of Seller or Buyer, as the case may be,
and in a capacity as an officer of Seller or Buyer, respectively or one or more
of Seller's or Buyer's Affiliates and are in no manner expressly or impliedly
making any representations or warranties in an individual capacity. Buyer and
Seller waive any right to xxx or to seek any personal judgment or claim against
any of the named individuals.
Section 4.4 Sellers' Covenants.
Each Seller, severally and not jointly, covenants with Buyer as follows:
(a) At all times from the Effective Date to the Closing
Date, Seller shall cause the Partnerships to maintain
in force property insurance and commercial general
liability insurance covering the Real Property and
the Improvements in accordance with the Partnerships'
customary procedures.
(b) At all times from the Effective Date to the Closing
Date, Seller shall cause the Partnerships to keep and
perform all of the material obligations to be
performed by the landlord under the Leases.
(c) Seller shall cause the respective Partnerships to
not, without Buyer's prior consent, which consent
will not be unreasonably withheld or delayed, modify,
terminate, amend, or allow the assignment of existing
Leases, except in accordance with the Partnerships'
historical course of conduct in operating the
Property.
(d) After the Effective Date, Seller shall cause the
Partnerships to not remove any Personal Property from
the Improvements without replacing it with items of
like kind and quality.
(e) Seller shall cause the Partnerships to obtain Buyer's
written approval prior to entering into any new
Service Contract that is not terminable on thirty
(30) days notice.
Page 29
(f) Seller will cause the Partnerships to manage,
operate, repair and maintain the Property in
generally the same manner as the Partnerships
managed, operated, repaired and maintained the same
prior to the date hereof and, to its reasonable
ability, will keep the Property in its present state
of repair subject to normal wear and tear, exercising
the same degree of care in such matters as the
Partnerships have previously exercised.
(g) Seller shall cause the Partnerships to update the
Rent Roll upon Buyer's request, but no more often
than once per month. Seller shall cause the
Partnerships to not lease any portion of the Property
to any employees of an Affiliate of Seller, except
under leases providing for thirty (30) day
termination by the owner of the Property.
(h) Seller shall cause the Partnerships to use its
reasonable business efforts to renew all of the
licenses and permits applicable to the Property and
which are necessary for the continued operation of
the Property as they expire from time to time and
shall notify Buyer at least thirty (30) days prior to
the expiration date or threatened cancellation date
of any license or operating permit.
(i) Seller shall cause the Partnerships not to cause any
action to be taken which would cause any of the
representations or warranties made by Seller in this
Contract to be false on or as of Closing Date.
(j) Seller shall cause the Partnerships not to enter into
or record any easement, covenant, license, permit,
agreement or other instrument against the Property or
any portion thereof except as may be required to
enable the Partnerships to perform their obligations
under this Contract or to operate in the ordinary
course of business.
(k) Effective as of the Closing, Seller shall cause the
Partnerships to terminate all management agreements
relating to the Property.
(l) Seller shall not change the existing use of any
Property.
(m) Seller shall not knowingly violate or fail to use
commercially reasonable efforts to prevent the
violation of any applicable laws in any way related
to the Property; however, this is not intended as a
representation that there are no current violations
of applicable laws, nor shall it serve as a covenant
to correct violations of laws, if any, that currently
exist.
(n) Seller shall not materially alter the manner of
keeping its books, accounts or records or the
accounting methods therein reflected.
(o) Subsequent to the Closing, but at no cost to Seller,
Seller agrees to reasonably cooperate with Buyer's
independent auditors to provide reasonable and
necessary access to financial records required to
permit the preparation and audit of financial
statements of the Properties for the
Page 30
year 2004 pursuant to applicable SEC regulations.
This provision shall survive the Closing.
(p) Seller shall continue to perform all its obligations
under the Existing Loans, and shall not enter into
any modification, amendment or restatement thereof
that would have a Material Adverse Effect without
Buyer's consent, which consent will not be
unreasonably withheld; provided, however, the release
of the excess land relating to Kalamazoo shall not be
deemed to be a modification or amendment which would
have a Material Adverse Effect.
(q) Sellers agree to expend at least $500,000 in the
aggregate, when combined with the expenditures
pursuant to the Asset Sale Contract and the Cash
Contract, in capital expenditures on the Properties
prior to Closing (the CAPITAL EXPENDITURE AMOUNT). As
of the Effective Date, there is approximately
$311,000 in an escrow account held by the Lenders
entitled "Required Repair Fund" (the REQUIRED REPAIR
FUND). All amounts that Sellers are reimbursed by the
Lenders prior to Closing from the Required Repair
Fund shall be included in determining if Sellers
achieve the Capital Expenditure Amount. If the
Sellers expend less than $500,000 in capital
expenditures on the Properties, when combined with
the expenditures pursuant to the Asset Sale Contract
and the Cash Contract, prior to Closing, then the
Sellers shall pay to the Buyer at Closing the
positive difference between the actual amount of
capital expenditures made by the Sellers and $500,000
(the CAPITAL PAYMENT). The Sellers may elect to
assign all or a portion of the Required Repair Fund
to Buyer, at no cost to Buyer, as part of the Capital
Payment.
ARTICLE 5
BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1 Buyer's Representations and Warranties.
Buyer represents and warrants to each Seller, which representations and
warranties are also deemed to be made on and as of the Closing Date:
(a) Buyer is a limited partnership, validly existing and
in good standing under the laws of the State of
Delaware, and, at Closing, will be, to the extent
necessary, qualified to do business in the State
where each Property is located.
(b) Buyer has the authority to execute this Contract and
to perform its obligations under this Contract. The
person executing this Contract on behalf of Buyer is
duly authorized to do so.
(c) There are no attachments, executions, assignments for
the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy or under
Page 31
other debtor relief laws contemplated by, pending, or
threatened against Buyer.
(d) Buyer is in compliance with the requirements of the
Orders and other similar requirements contained in
the rules and regulations of the OFAC and in any
enabling legislation or other Executive Orders or
regulations in respect thereof.
(e) Neither Buyer nor any beneficial owner of Buyer:
(i) is listed on the Lists;
(ii) is a Person who has been determined by
competent authority to be a Person with whom
a U.S. Person is prohibited from transacting
business, whether such prohibition arises
under U.S. law, regulation, executive orders
or any lists published by the United States
Department of Commerce, the United States
Department of Treasury or the United States
Department of State including any agency or
office thereof;
(iii) is owned or controlled by, or acts for or on
behalf of, any Person on the Lists or any
other Person who has been determined by
competent authority to be a Person with whom
a U.S. Person is prohibited from transacting
business, whether such prohibition arises
under U.S. law, regulation, executive orders
or any lists published by the United States
Department of Commerce, the United States
Department of Treasury or the United States
Department of State including any agency or
office thereof; or
(iv) is under investigation by any governmental
authority for, or has been charged with, or
convicted of, money laundering, drug
trafficking, terrorist-related activities,
any crimes which in the United States would
be predicate crimes to money laundering, or
any violation of any Anti-Money Laundering
Laws.
(f) The Units, when issued, will have been duly and
validly authorized and issued, free of any preemptive
or similar rights, and will be fully paid and
nonassessable, without any obligation to restore
capital except as required by the Delaware Revised
Uniform Limited Partnership Act (the LIMITED
PARTNERSHIP ACT). Each Designated Owner shall be
admitted as a limited partner of the Buyer as of the
Closing Date and shall be entitled to all of the
rights and protections of a limited partner under the
Limited Partnership Act and the provisions of the
Buyer's Partnership Agreement, with the same rights,
preferences, and privileges as all other limited
partners on a pari passu basis. The Common Stock for
which the Units may be redeemed have been validly
authorized and will be duly and validly issued, fully
paid and nonassessable, free of preemptive or similar
rights. As more completely described in the Agreement
Regarding Contributed Properties, a copy of which has
been attached hereto as
Page 32
EXHIBIT O for purposes of allocating items of income,
gain, loss and deduction with respect to the
Properties in the manner required by Section 704(c)
of the Code (hereinafter defined), the Buyer shall
employ, and shall cause any entity controlled by the
Buyer which holds title to the Properties to employ,
the "traditional method" (with curative allocations
on sale) as set forth in Treasury Regulation section
1.704-3(c).
Section 5.2 Buyer's Covenants.
Buyer covenants and agrees:
(a) to make its policies, procedures and practices
regarding compliance with the Orders, if any,
available to Sellers for their review and inspection
during normal business hours and upon reasonable
prior notice.
(b) that if Buyer obtains knowledge that Buyer or any of
its beneficial owners becomes listed on the Lists or
is indicted, arraigned, or custodially detained on
charges involving money laundering or predicate
crimes to money laundering, Buyer shall immediately
notify Sellers in writing, and in such event, Sellers
shall have the right to terminate this Contract
without penalty or liability to Buyer immediately
upon delivery of written notice thereof to Buyer.
(c) that Buyer shall continue to use commercially
reasonable and diligent efforts to assume the
Existing Loans on terms and conditions reasonably
acceptable to Buyer; provided, that Buyer is not
required to agree to any material change of any term
of any Existing Loans document as a condition to
Lenders' approval of the Assumption.
(d) Buyer will forward to Lenders, or a third party
entity designated by Lenders, if applicable, the
documentation and information requested in the loan
assumption package, within 10 days after the
Effective Date. Buyer acknowledges that Seller has
caused Lenders to deliver to Buyer Lenders' loan
assumption package prior to the Effective Date.
(e) Buyer will, within 10 days after the Effective Date,
if required by Lenders, (i) provide to the Lenders
organizational documents of the Buyer's borrowing
entity (BUYER'S BORROWER), (ii) provide to the
Lenders financial statements of Buyer's Borrower,
(iii) authorize the Lenders to conduct credit reports
on the Buyer's Borrower, (iv) authorize the Lenders
to contact other Lenders who hold loans from entities
related to Buyer's Borrower, (v) execute and return
the application for the assumption of the Existing
Loans on the Lenders' approved form, and (vi) pay
one-half (1/2) all processing fees and other expenses
required by the Lenders and Seller shall pay one-half
(1/2) all processing fees and other expenses required
by the Lenders.
(f) Buyer will respond timely to all requests from
Lenders, but in no event later than 5 business days
and will deliver copies of all correspondence
Page 33
(other than correspondence consisting of financial
statements and financial condition, or correspondence
deemed by Buyer to be confidential to Buyer or its
Affiliates) between Buyer, Lenders, and any agent of
Lenders to Seller as soon as reasonably practicable.
(g) Buyer shall not initiate employment conversations
with Seller's manager's employees until after the
earlier of (i) three (3) business days prior to the
Closing Date and (ii) January 17, 2004.
(h) as additional consideration for the sale of the
Properties, on the Closing Date, Buyer shall grant to
JPI Investment Company, L.P., a Texas limited
partnership (JPIIC) warrants (the WARRANTS) to
acquire 250,000 shares of the common stock of the
REIT at an exercise price of 103% of the per share
price at which the Common Stock of the REIT is
offered to the public in the Public Offering before
any discounts or fees paid to underwriters. The
Warrants shall be evidenced by a Warrant Agreement in
the form attached hereto as EXHIBIT V, which shall be
executed and delivered by Buyer to JPIIC on the
Closing Date (and which Warrant Agreement shall
provide that the Warrants shall be fully exercisable
from one year after the Closing Date until February
28, 2007).
(i) in the event Sellers elect under the provisions of
SECTION 1.2 hereof to receive any Units, Buyer shall
deliver at Closing to Seller and the Designated
Owners an enforceable commitment (the LIQUIDITY
COMMITMENT) whereby Buyer agrees to lend to the
respective holder of the Units an amount equal to not
more than seventy-five percent (75%) of the value of
the respective Units, the further terms of which are
set forth in the Liquidity Loan Documents
(hereinafter defined).
Any such loan arising out of the Liquidity Commitment shall be
evidenced by documents (the LIQUIDITY LOAN DOCUMENTS) attached
hereto as EXHIBIT P.
If Seller elects under the provisions of SECTION 1.2(c)(III)
hereof, to acquire Units at Closing and if the Liquidity
Commitment is delivered at Closing, Buyer's obligation to pay,
as its share of the closing costs, 50% of the negative
arbitrage for the RAIT Loan shall be waived and such cost
shall be fully borne by Seller.
Section 5.3 Investment Representation.
Buyer is acquiring the Interests for its own account and for investment purposes
only, without a view toward distribution or resale thereof, in whole or in part.
Buyer may not transfer, sell, or dispose of, or solicit offers for or offer to
transfer, sell, or dispose of, all or any portion of the Interests in any manner
that would violate or cause the Partnerships to violate applicable state or
federal securities laws. The Interests have not been registered under the
Securities Act of 1933 or any blue sky or other state securities law or
regulation. Buyer may not offer for sale, sell, or transfer the Interests except
in accordance with the Limited Partnership Agreement.
Page 34
ARTICLE 6
CLOSING AND PRORATIONS
Section 6.1 Closing Date.
The CLOSING of this Contract will take place in Title Company's offices
commencing at 10:00 a.m., Dallas, Texas time, or such other place as is mutually
agreeable to the parties upon three (3) business days prior written notice from
Buyer that Buyer has received or will receive the proceeds from the Public
Offering from the underwriter(s) (the PUBLIC OFFERING CLOSING); provided,
however, that this Contract shall terminate if Closing does not occur prior to
January 31, 2005 (the CLOSING DATE). Notwithstanding the foregoing, Seller
acknowledges that it is possible that, due to unanticipated delays in the
regulatory review and approval process associated with the Public Offering, that
the Public Offering Closing may not occur on or before January 31, 2005, despite
the reasonable and diligent efforts of Buyer, the REIT and the underwriters to
cause the Public Offering Closing to occur before such date. Accordingly, in the
event that the Public Offering Closing has not occurred on or before January 31,
2005, and if Buyer has used reasonable and diligent efforts to cause the Public
Offering Closing to occur before such date and the failure of the Public
Offering Closing to occur is beyond the reasonable control of Buyer, then the
Closing Date shall be automatically extended hereunder to a date not earlier
than three (3) business days after prior written notice from Buyer to Seller
that either the Public Offering Closing has occurred or is anticipated to occur
but in no event later than February 28, 2005; provided that if the Closing has
not occurred by February 28, 2005, if Seller is not then in default hereunder,
the Xxxxxxx Money and any Letter of Credit shall be paid (or delivered, as
appropriate) to Seller, this Contract shall terminate, and the parties shall
have no further rights, liabilities or obligations under this Contract (except
for those that expressly survive termination).
Section 6.2 Closing Matters.
(a) Expressly conditioned upon Buyer's compliance with
its obligations under SECTION 6.2(b), Sellers shall
deliver at Closing:
(i) at least 2 counterparts of the stock power
transferring the common stock of
Tallahassee, Inc., Western Michigan, Inc.,
Stillwater, Inc., State College, Inc.,
Xxxxxx, Inc., Lubbock, Inc., Columbus, Inc.,
Knoxville, Inc., and Tampa, Inc., from
Sellers to Buyer (the STOCK POWERS);
(ii) at least 2 counterparts of the Assignment of
Interests with respect to JPI-CG's and
JPI-MC's respective right, title and
interest in and to their respective
Interests to be transferred hereunder (the
ASSIGNMENT OF INTERESTS), such document
being modified to properly reflect the
respective transfer, but being substantially
in the form attached to this Contract as
EXHIBIT Q;
(iii) at least 2 counterparts of an Assignment of
Partnership Interests, and all documents
required to be delivered by Buyer under the
Assignment of Partnership Interests, duly
executed by Genpar
Page 35
and JPIIC with respect to their Interests in
Lofts (the ASSIGNMENT OF PARTNERSHIP
INTERESTS), substantially in the form
attached to this Contract as EXHIBIT R;
(iv) the Deed Restrictions executed by the
Partnership to be recorded in the real
property records of counties in which the
Properties are located on the Closing Date;
(v) at least 1 counterpart of all assumption
documents required to be executed by the
Partnerships, if any, with respect to
Buyer's assumption of the Existing Loans;
(vi) a Rent Roll for each Property dated no
earlier than 5 days prior to Closing,
certified by the Partnerships to be true and
correct in all material respects;
(vii) a list of aged rent delinquencies for each
Property, identifying each delinquent tenant
by name and unit number, dated no earlier
than 5 days prior to the date Sellers
deliver same;
(viii) possession of each Property, subject to the
Permitted Exceptions and the rights of
tenants in possession under the Leases;
(ix) the following to the extent if they are in
the Partnerships' possession or control:
(A) originals (or copies if originals
are not available) of the Leases,
the Service Contracts, the Plans,
the Warranties, and the Records;
and
(B) all keys to the Improvements
including, but not limited to, keys
to all door locks and keys of any
vehicles or equipment being
conveyed (and an accounting for
keys in possession of others),
which keys shall be marked and
identified; and all documents in
the possession of the Seller,
pertaining to occupants of the
Property, including, but not by way
of limitation, all leases,
applications, correspondence and
credit reports relating to each
such occupant;
(x) a fully executed termination of the
management agreement for each Property at
the Partnerships' sole cost and expense;
(xi) a license in the form attached hereto as
EXHIBIT S authorizing Buyer's continued
display of the name "Jefferson", "Jefferson
Commons" and the initials "JPI" for a period
of nine (9) months after the Closing Date,
as well as Buyer's agreement to cause the
removal of such names from the Property by
no later than nine (9) months after the
Closing Date (the LICENSE);
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(xii) such evidence or documents as may be
reasonably required by the Title Company
evidencing the status and capacity of the
General Partner and the Limited Partner and
the authority of the person or persons who
are executing the various documents on
behalf of the Seller in connection with the
sale of the Property;
(xiii) the Seller's executed closing statement
confirming the prorations and the
distribution of the closing proceeds;
provided, that the closing statement will
only be delivered to the Title Company and
Closing Agent and will not be delivered to
Buyer;
(xiv) if Units are to be issued to any Seller or
its Designated Owners, signature pages of
the Buyer's Partnership Agreement duly
executed by the Seller or the Designated
Owners, as applicable, as a limited partner;
(xv) a duly executed legal opinion of Seller's
counsel in the form attached hereto as
EXHIBIT T; and
(xvi) at least 1 counterpart of the Registration
Rights Agreement, in the form attached
hereto as EXHIBIT W, duly executed by the
JPIIC and JPI Multifamily Investments L.P.
(b) No later than 4:00 p.m., Dallas, Texas time, on the
Closing Date, Buyer shall deliver to Closing Agent as
a condition precedent to the obligation of each
Seller to perform its obligations under SECTION
6.2(a):
(i) by wire transfer or other immediately
available federal funds, the cash portion of
the Purchase Price, subject to applicable
prorations and credits;
(ii) at least 2 counterparts of the Stock Powers
signed by Buyer;
(iii) at least 2 counterparts of the Assignment of
Interests signed by Buyer;
(iv) at least 2 counterparts of the Assignment of
Partnership Interests by Buyer;
(v) Amended Certificate of Limited Partnership
of the Partnerships and Amended Application
to Transact Business in the respective
states where the Partnerships are doing
business duly executed by Buyer deleting the
name "Jefferson" and "Jefferson Commons"
from the name of the Partnership, removing
Sellers as partners in the Partnership and
revising the registered office of the
Partnership to remove Sellers;
(vi) at least 1 counterpart of all assumption
documents with respect to Buyer's assumption
of the Existing Loans, duly executed by
Buyer
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and the respective Lenders including,
without limitation, the Seller Releases;
(vii) at least 1 counterpart of the License, duly
executed by Buyer;
(viii) a written confirmation by Buyer dated as of
the Closing Date of the acknowledgements set
forth in SECTION 9.12(a);
(ix) such evidence or documents as may be
reasonably required by the Title Company
evidencing the status and capacity of Buyer
and the authority of the person or persons
who are executing the various documents on
behalf of the Buyer in connection with the
purchase of the Property;
(x) Buyer's executed closing statement
confirming the prorations and the
distribution of the closing proceeds;
(xi) if Units are issued and if the Units are to
be certificated, certificates representing
the Units duly issued by the Buyer in the
name of each Seller and/or each Designated
Owner, as applicable, as of the Closing Date
representing the Units to which the Seller
and/or Designated Owner is entitled pursuant
to SECTION 1.02 of this Contract;
(xii) if Units are to be issued at the Closing,
the fully executed Buyer's Partnership
Agreement, with the originally duly executed
signature of Education Realty OP Limited
Partner Trust, a Maryland business trust
which is the wholly owned subsidiary of the
REIT, as general partner, and original or
photostatic copies of the signatures of all
limited partners;
(xiii) if Units are to be issued at Closing, the
Liquidity Commitment;
(xiv) at least 1 counterpart of the Registration
Rights Agreement, in the form attached
hereto as EXHIBIT W, duly executed by the
Buyer, the REIT and all Unit Holders (as
that term is defined in the Registration
Rights Agreement; and
(xv) at least 1 counterpart of each Master Lease
duly executed by Buyer.
(c) Each Seller and Buyer shall execute and deliver to
the appropriate parties any additional documents and
instruments that, in the mutual opinion of Buyer's
counsel and any Seller's counsel, are necessary to
consummate this transaction.
Page 38
Section 6.3 Prorations.
(a) Ad valorem taxes and assessments (whether for real
estate or personal property) against the Property
will be prorated at Closing as of the Closing Date
based on the tax bills for the year of the Closing.
Buyer will receive at Closing a credit against the
Purchase Price in an amount equal to the portion of
the taxes and assessments on the Property from the
beginning of the current tax year to the Closing
Date. If Closing occurs before that year's tax bills
are available, the proration will be based on the
latest tax rate applied to the latest unappealed tax
value. If an estimated proration is made, then after
the taxes and assessments for the year in which the
Closing occurs are finally assessed, within 30 days
after demand, Buyer shall refund to Seller any amount
overpaid by Seller or Seller shall pay to Buyer the
amount of any deficiency in the proration. Buyer
shall cause the Partnership to pay all taxes and
assessments against the Property before they become
delinquent.
(b) Buyer acknowledges that all cash assets of the
Partnership will be distributed to Seller prior to
the Closing. All income and expenses of the Real
Property and Improvements (other than ad valorem
taxes and assessments) will be prorated at Closing as
of the Closing Date on an accrual basis. All rents
actually prepaid for a portion of the term on or
after Closing, shall be paid to Buyer at Closing or,
at Seller's option, offset against the Purchase
Price. All other income and expense items subject to
proration pertaining to the period prior to the
Closing Date will be allocated to and paid by Sellers
and all income and expense items subject to proration
pertaining to the period starting on the Closing Date
will be allocated to and paid by Buyer. Seller is
responsible for Lease commissions due Seller's
employees and locator fees for Leases under which the
tenant moves into a unit prior to the Closing Date.
Buyer is responsible for locator fees for Leases
under which the tenant moves into a unit on or after
the Closing Date. All application fees which are not
prepaid security deposits shall be retained by
Seller. Any income payable in connection with any
Service Contract will be prorated, but no lump sum or
up front payments paid to Seller with respect to any
Service Contract will be prorated. Rent will be
prorated based on the Rent Roll provided by the
Partnership at Closing. No later than 3 business days
prior to the Closing Date, Buyer and each Seller
shall mutually approve and provide to Closing Agent a
schedule of prorations in as complete and accurate a
form as possible. No later than 60 days after
Closing, each Seller and Buyer shall make appropriate
post-closing adjustments to the prorations of income
and expenses but in no event will any readjustment be
made after the 60th day after the Closing Date, other
than a readjustment of ad valorem taxes and
assessments.
(c) All Deposits paid as refundable security for rent,
cleaning, pet deposits, or any other purposes will be
paid to Buyer at Closing and the obligation, if any,
to refund the cash deposits to tenants is assumed by
Buyer. Except
Page 39
as provided in SECTION 6.3(d), no non-refundable
deposits or fees paid by tenants shall be paid or
payable to Buyer.
(d) Any amounts of so-called "hassle free move-out"
payments paid to the Partnership for current leases
on the Properties shall be equally split between
Seller and Buyer and, at Closing, Seller shall pay to
Buyer its share thereof.
(e) All deposits and escrows made by Seller with the
respective Lenders will be delivered to the Seller at
Closing and will be retained by the Seller or will be
credited to the Seller at Closing.
(f) The obligations of Sellers and Buyer under this
SECTION 6.3 survive the Closing.
Section 6.4 Closing Costs.
Costs of closing this transaction will be allocated between Sellers and Buyer as
follows:
(a) Sellers shall pay (i) 50% of the prepayment premium
for the RAIT Loan to cause RAIT to release at Closing
any security interests in its collateral relating to
Seller or its constituent entities (any escrows held
by the Lenders will be returned to Seller or credited
to Seller at Closing), (ii) the cost of increasing
the amount of the Owner Policy to the Purchase Price
of the Property, (iii) if the Closing occurs on or
prior to December 31, 2004, then the portion (which
may be all) of the negative arbitrage associated with
the RAIT Loan from the Closing Date until the RAIT
Loan is prepaid which is not paid by Buyer; (iv) the
cost 50% of any escrow fees or similar charges of
Title Company and Closing Agent, (v) the cost of the
premiums for a "standard coverage" Owner Policy, (vi)
50% of all costs payable to the Lenders in connection
with Buyer's assumption of the Existing Loans, (vii)
50% of any and all transfer fees and sales,
intangibles, and conveyance taxes (or equivalents)
related to the Closing, if any, and (viii) the costs,
if any, incurred by Seller in connection with the
performance of its obligations under this Contract,
including any endorsement to the Title Policy which
Seller, in its sole and absolute discretion, agrees
to obtain in order to cure title defects.
(b) Buyer shall pay (i) any premiums related to title
insurance for extended coverage or any endorsements
or modifications to any policy requested by Buyer and
all premiums related to any mortgagee policy, (ii)
the cost of providing the title commitment, (iii) the
cost of recording the Deed and any other conveyance
documents that Buyer may choose to record, (iv) 50%
of any escrow fee or similar charges of Title Company
and Closing Agent, (v) the cost of the Survey, (vi)
50% of any and all transfer fees and sales,
intangibles, and conveyance taxes (or equivalents)
related to the Closing, if any, (vii) 50% of all
costs payable to the Lenders in connection with
Buyer's assumption of the Existing Loans, (viii) 50%
of the prepayment premium for the RAIT Loan to cause
RAIT to release at Closing any
Page 40
security interests in its collateral relating to
Seller or its constituent entities (any escrows held
by the Lenders will be returned to Seller or credited
to Seller at Closing), (ix) subject to SECTION
5.2(i), if the Closing occurs on or prior to December
31, 2004, then 50% of the negative arbitrage
associated with the RAIT Loan from the Closing Date
until the RAIT Loan is prepaid, but Buyer shall not
be required to pay in excess of $200,000 in the
aggregate with respect to all Interests or Properties
purchased, and (x) the costs, if any, incurred by
Buyer in connection with the performance of its
obligations under this Contract.
(c) All other expenses incurred by any Seller or Buyer
with respect to the Closing, including, but not
limited to, legal fees of Buyer and each Seller
(except in the event of litigation), will be borne
and paid exclusively by the party incurring same,
without reimbursement, except to the extent otherwise
specified in this Contract.
Section 6.5 Partnership Matters.
(a) The parties acknowledge that for U.S. Federal income
tax purposes, the Partnerships will terminate and the
taxable year of the Partnerships will end on the
Closing Date. Seller shall cause to be filed all
applicable income Tax Returns for the period ending
on the Closing Date (and Buyer agrees to cooperate
with General Partner to the extent necessary), and
Sellers shall be responsible for all income taxes for
that period, and shall indemnify, defend, and save
and keep Buyer harmless therefrom. Buyer shall file
all Partnership Tax Returns and pay all taxes due for
the period commencing with the Closing Date, and
indemnify, defend, and save and keep Sellers harmless
therefrom. These indemnities shall expressly survive
the Closing without limitation.
(b) As used in this SECTION 6.5, the term TAX or TAXES
includes all taxes, however denominated, imposed on
the Partnerships by any federal, state, local, or
foreign government or any agency or political
subdivision of any such government, which taxes
include, without limiting the generality of the
foregoing, all income or profits taxes (including any
interest, penalties or additions attributable to or
imposed on or with respect to any such taxes),
payroll and employee withholding taxes, unemployment
insurance taxes, social security taxes, sales and use
taxes, excise taxes, franchise taxes, gross receipts
taxes, business license taxes, occupation taxes,
stamp taxes, environmental taxes, transfer taxes,
workers' compensation, Pension Benefit Guaranty
Corporation premiums, and other governmental charges,
and other obligations of the same or of a similar
nature to any of the foregoing, which the
Partnerships are required to pay, withhold, or
collect, imposed with respect to the assets or
operations of the Partnerships. Taxes do not include
any valorem tax or assessment described in SECTION
6.3(a). As used in this SECTION 6.5, TAX RETURN is
defined as any return, report, information, return
schedule, or other document (including, without
limitation, any related or supporting information or
schedule, such as self-employment schedules and
returns,
Page 41
federal tax Form 1099s, sales and use tax returns,
federal and state payroll reports, and federal tax
Form 5500s) filed or required to be filed with any
federal, state, local, or foreign governmental entity
or other authority in connection with the
determination, assessment or collection of any Tax or
the administration of any laws, regulations, or
administrative requirements relating to any Tax.
Section 6.6 Assumption and Release.
By no later than 5:00 p.m., Dallas, Texas time on January 18, 2005 (the
ASSUMPTION APPROVAL DATE), Buyer shall either:
(a) terminate this Contract by giving a termination notice to
Sellers stating that the terms of the Assumption are not
acceptable to Buyer, following which Closing Agent shall
deliver the Xxxxxxx Money to Sellers (together with all
interest thereon) and the parties shall have no further
rights, liabilities, or obligations under this Contract (other
than those that expressly survive termination); or
(b) waive its right to terminate this Contract for matters related
to the Assumption by proceeding to Closing (absent a
termination pursuant to (a) above, Buyer shall be deemed to
have waived its right to terminate this Contract by virtue of
an unacceptable Assumption).
Buyer covenants to communicate with Sellers and to keep Sellers informed with
respect to the status of the Assumption and the Seller Releases. Buyer will
promptly notify Sellers when each Lender consents to the Assumption and the
Seller Releases. If Buyer is unable to obtain the Seller Releases by noon,
Dallas, Texas time on January 17, 2005, Buyer will promptly notify Seller in
writing thereof.
Section 6.7 Release Approval.
By no later than the Assumption Approval Date, Sellers shall either:
(a) terminate this Contract by giving a termination notice to
Buyer stating that the terms of the Seller Releases are not
acceptable to Seller, following which Closing Agent shall
deliver the Xxxxxxx Money (together with all interest thereon)
to Sellers and the parties shall have no further rights,
liabilities, or obligations under this Contract (other than
those that expressly survive termination); or
(b) waive its right to terminate this Contract for matters related
to the Seller Releases by proceeding to Closing (absent a
termination pursuant to (a) above, Seller shall be deemed to
have waived its right to terminate this Contract by virtue of
an unacceptable Seller Release).
Section 6.8 Seller's and Buyer's Joint Covenants Regarding Taxation of
Cash/Unit Purchase.
For all federal, state and local income tax purposes:
(a) Buyer and Seller agree to treat the Seller's
contribution of Interests to Buyers in exchange for
Units as a nontaxable transaction under Section
Page 42
721 of the Internal Revenue Code of 1986, as amended
(the CODE), and Buyer and Seller will not take an
inconsistent position therewith except to the extent
required by a "determination" as that term is defined
under Section 1313 of the Code. Notwithstanding
anything to the contrary contained in this Contract,
including without limitation the use of words and
phrases such as "sell," "sale," "purchase," and
"pay," the parties agree that it is their intent that
to the extent that consideration for the transfer of
the Interests takes the form of the issuance of
Units, the transactions contemplated hereby shall be
treated for federal income tax purposes pursuant to
Section 721 of the Code, as the contribution of the
Interests by the Seller to Buyer, in exchange for the
Units.
(b) Buyer and Seller agree that to the extent there is
sufficient cash transferred by Buyer to Seller under
SECTION 1.2(c)(II) to defease any existing mezzanine
loan on the respective Property plus the payment of
Seller's costs under SECTION 6.4(a), it shall be
reported under Treasury Regulation Section 1.707-4(d)
in such respective amounts as a transfer to reimburse
the Seller for capital expenditures, and accordingly,
Buyer and Seller will not report such cash transfers
as part of a taxable sale of the Property from Seller
to Buyer. Buyer and Seller agree that they will not
take positions inconsistent with the preceding
sentence except to the extent required by a
"determination" as that term is defined under Section
1313 of the Code.
(c) Buyer and Seller agree that the Existing Loans
(together with any fees and expenses required to be
paid to Lenders in connection with Buyer's Assumption
to the extent assumed by Buyer under SECTION
1.2(c)(i)) will be reported as a "qualified
liability", as that term is defined under Treasury
Regulation Section 1.707-5 and any fees and expenses
required to be paid Lenders in connection with
Buyer's Assumption to the extent satisfied by Buyer
will be treated as a qualified liability assumed by
Buyer and that Seller's allocable share of such
qualified liability with respect to its Interest will
be treated as a qualified liability. Buyer and Seller
agree that they will not take positions inconsistent
with the preceding sentence except to the extent
required by a "determination" as that term is defined
under Section 1313 of the Code.
Notwithstanding the foregoing, the Buyer makes no representations concerning a
proper treatment of such transactions and shall have no liability if the
contribution and distribution are not so treated. If such treatment is
challenged by any taxing authority on audit or otherwise, then solely with
respect to such issue, (i) the Designated Owners shall have the right to
participate fully, their own expense, in all aspects of the defense of such
issue, (ii) the Buyer shall not settle any such issue without the prior consent
of the Designated Owners, which consent shall not be unreasonably withheld or
delayed, (iii) the Buyer shall inform the Designated Owners reasonably promptly
in advance, of the date, time and place of all administrative and judicial
meetings, conferences, hearings and other proceedings relating to such issue,
and (iv) the Buyer shall provide to the Designated Owners all correspondence
with governmental authorities and other documents relating to such issue
promptly upon receipt, or in advance of submission to (as the case may be) the
relevant taxing authority or court, and
Page 43
(v) the Buyer shall not file or submit any documents relating to the issue
without the prior consent of the Designated Owners which consent shall not be
unreasonably withheld or delayed, provided that the Buyer may make such filing
or submission if required to comply with any deadline imposed by law or other
governmental authority if the Buyer has made commercially reasonably efforts to
obtain such prior consent. At any point in the defense of such issue, in its
sole discretion, the Buyer may upon notice to the Designated Owners elect to
have the Designated Owners conduct the defense of the issue, at the Designated
Owners' expense, and retain similar rights with respect to the defense as those
granted to the Designated Owners in the immediately preceding sentence, provided
that the proviso set forth in clause (ii) of the immediately preceding sentence
shall not apply.
ARTICLE 7
DEFAULTS AND REMEDIES
Section 7.1 Material Breach of Sellers' Representations and Warranties
Prior to Closing.
Buyer and each Seller shall each notify the other parties to this Contract
promptly upon discovery at or prior to Closing that any of the representations
and warranties of any Seller in SECTION 4.1 are inaccurate in any material
respect. If (i) any of a Seller's representations and warranties in SECTION 4.1
are inaccurate in any material respect at or prior to Closing and (ii) the
Seller does not cure (it being understood that the Seller has no obligation to
cure at any cost to Seller in excess of $25,000 in the aggregate) the material
breach within 10 business days (or within 1 business day if Buyer's notice is
given on the Closing Date) after receipt of notice of the breach from Buyer,
then Buyer shall, as its sole and exclusive remedy, waiving all other remedies,
either:
(a) terminate this Contract by giving notice to each
Seller on or prior to the Closing Date (which will be
extended as necessary to accommodate the applicable
cure period); or
(b) waive that representation and warranty in its
entirety and proceed to the Closing.
A breach of any representation and warranty by a Seller is deemed material for
the purposes of this SECTION 7.1 only if it will cause a material adverse
effect, including without limitation a financial effect on the Real Property and
Improvements of greater than $200,000 for any single Property and one or more
breaches by Seller or Seller's representations and warranties are deemed
material if they will cause a material adverse financial effect greater than
$1,000,000 in the aggregate with respect to any or all of the Properties. Any
breach of any representation and warranty by a Seller that is not material is
deemed waived by Buyer and Buyer and each Seller shall proceed with Closing
without any reduction in the Purchase Price. If Seller can effect a cure at a
cost of $25,000 or less in the aggregate, Seller shall effect the cure.
If Buyer terminates this Contract under this SECTION 7.1, then Closing Agent or
Sellers, as applicable, shall return the Xxxxxxx Money and the Letter of Credit
to Buyer and the parties have no further rights, liabilities, or obligations
under this Contract (other than those that expressly survive termination). If
Buyer has actual knowledge of the inaccuracy or breach of any
Page 44
representation or warranty by any Seller at or prior to Closing and the Closing
occurs, Buyer is deemed to waive the breach of the representation and warranty
in its entirety.
Section 7.2 Buyer's Remedies.
(a) Sellers Inability to Transfer Partnership Interest or
Provide Owner Policy; Condemnation; Major Casualty
Damage.
If:
(i) any Seller is unable to transfer title to
its Partnership Interest at Closing as
required under this Contract for any reason
other than an affirmative act by the Seller
that prevents the Seller from transferring
title as required and the failure is not
remedied within 1 business day thereafter or
Buyer does not waive any defect and accept
the transfer of the Partnership Interest as
the Seller is able to transfer it;
(ii) the Partnership's title to the Real Property
and Improvements at Closing is subject to
any title exception other than the Permitted
Exceptions for any reason other than an
affirmative act by any Seller or the
Partnership (excluding any election not to
cure any objection by Buyer under SECTION
3.1) that prevents the Partnership from
having the title required and the failure is
not cured within 1 business day thereafter
or Buyer does not waive any defect in title
and accepts the Partnership's title as it
exists on the Closing Date;
(iii) condemnation proceedings are initiated
against all or any portion of the Property
and Buyer does not waive its right to
terminate this Contract as specified in
SECTION 8.3; or
(iv) a Major Casualty (defined in SECTION 8.3)
occurs and Buyer does not waive its right to
terminate this Contract as specified in
SECTION 8.3;
then Buyer shall, as its sole and exclusive remedy, waiving
all other remedies, terminate this Contract by giving notice
to each Seller within 10 days after the event specified in
SECTION 7.2(a)(i) or (II) occurs or Seller delivers written
notice to Buyer of the occurrence of an event listed in
SECTION 7.2(a)(III) or (IV), and Closing Agent or Sellers, as
applicable, then shall return the Xxxxxxx Money and/or the
Letter of Credit to Buyer, and the parties have no further
rights, liabilities, or obligations under this Contract (other
than those that expressly survive termination).
(b) Other Seller Defaults. If (A) any Seller does not
timely perform its obligations under SECTION 6.2(a)
for any reason other than (i) Buyer's failure to
timely perform its obligations under SECTION 6.2(b)
or (ii) an act that falls under SECTION 7.2(a) (or
the termination of this Contract under
Page 45
any applicable provision of this Contract), or (B)
any Seller does not timely perform any of its
material obligations under this Contract other than
its obligations under SECTION 6.2(a) (for any reason
other than the termination of this Contract) under
any applicable provision of this Contract and does
not cure the default within 10 business days after
receipt of written notice of the default from Buyer,
then Buyer shall, as its sole and exclusive remedy,
waiving all other remedies, either:
(i) enforce specific performance of such
Seller's obligation to convey its
Partnership Interest to Buyer in accordance
with this Contract; or
(ii) terminate this Contract by giving notice to
each Seller within 5 business days
thereafter, then Closing Agent shall return
the Xxxxxxx Money and, as applicable, the
Letter of Credit to Buyer and the parties
have no further rights, liabilities, or
obligations under this Contract (other than
those that expressly survive termination).
Buyer is deemed to elect to terminate this Contract, receive a
return of the Xxxxxxx Money and, as applicable, the Letter of
Credit as liquidated damages, and waive any right to enforce
specific performance against Sellers unless Buyer complies
with its obligations under SECTION 6.2(b) on the Closing Date,
gives Sellers notice of its intent to enforce specific
performance within 60 days after the Closing Date, and files
an action to enforce specific performance against each Seller
in an appropriate State court having jurisdiction over the
Real Property within 2 years and 1 day after the Closing Date.
(c) Seller's Failure or Refusal to Convey Title at
Closing. Except as set forth in SECTION 7.2(a)(i), if
Seller fails or refuses to convey title to Buyer at
Closing and Seller does not remedy the failure or
refusal within 7 business days after receipt of
written notice from Buyer, then (1) this Contract
will automatically terminate, (2) Seller will
reimburse Buyer for its actual, verifiable, third
party, out-of-pockets costs with respect to this
Contract and the Asset Sale Contract and the Cash
Contract in an aggregate amount not to exceed
$750,000, and (3) Closing Agent shall return the
Xxxxxxx Money and, as applicable, the Letter of
Credit, to Buyer and the parties have no further
rights, liabilities, or obligations under this
Contract (other than those that expressly survive
termination).
Page 46
Section 7.3 Sellers' Remedies.
If:
(a) Buyer does not timely perform in accordance with
SECTION 6.2(b) for any reason, except the termination
of this Contract under any applicable provision of
this Contract; or
(b) Buyer is otherwise in default in the performance of
any of its material obligations under this Contract
and does not cure the default within 10 days after
receipt of notice of the default from any Seller (but
neither Seller is required to give Buyer notice of
default in the performance of Buyer's obligations
under SECTION 6.2(b) or any other obligation
involving the payment of money);
then, Sellers shall, as their sole and exclusive remedy, waiving all other
remedies, terminate this Contract by giving notice to Buyer, Closing Agent shall
pay the Xxxxxxx Money and, as applicable, shall deliver the Letter of Credit to
Sellers and Sellers will retain all Xxxxxxx Money or funds from the Letter of
Credit as liquidated damages, and the parties have no further rights,
liabilities, or obligations under this Contract (except for those that expressly
survive termination). The parties agree that Sellers' damages are difficult to
ascertain and that the Xxxxxxx Money is a fair approximation of Sellers'
damages. Notwithstanding anything to the contrary in this SECTION 7.3, Buyer's
indemnity obligations under SECTION 3.2(d) of this Contract are separate and
distinct obligations that are not subject to the liquidated damage provisions
contained in this SECTION 7.3. Buyer's and its issuers obligations under the
Letter of Credit will survive the termination of this Contract.
ARTICLE 8
CASUALTY AND CONDEMNATION
Section 8.1 Risk of Loss and Notice.
Subject to all other provisions of the Contract, including without limitation,
SECTION 3.2(d), the risk of loss or damage to the Real Property and Improvements
by fire or other casualty prior to the Closing Date is borne by Sellers. Each
Seller shall cause to be given to Buyer prompt notice of any destruction of any
part of the Real Property and Improvements or the commencement of any
condemnation proceedings against the Real Property and Improvements between the
Effective Date and the Closing Date.
Section 8.2 Minor Casualty.
Whether or not the notice required by SECTION 8.1 is given, if Improvements are
destroyed by fire or other casualty and the estimated cost of repairs as
reasonably determined by Sellers based on a report by an independent
construction or architectural firm, is $500,000 or less for any individual
Property (a MINOR Casualty), Closing will occur with no reduction in the
Purchase Price and at Closing:
Page 47
(a) Buyer will receive a credit against the Purchase
Price equal to the amount of any unused deductible
under the Partnership's property insurance policy;
(b) Buyer shall accept the Real Property and remaining
Improvements in their damaged state; and
(c) as between Buyer and Sellers, neither the Partnership
nor any Seller has any obligation to repair or
restore any damaged or destroyed portions of the Real
Property and Improvements.
Section 8.3 Major Casualty and Condemnation.
If condemnation proceedings are commenced against any portion of the Real
Property and Improvements, or if Improvements are destroyed by fire or other
casualty and the estimated cost of repairs as reasonably determined by Sellers
based on a report by an independent construction or architectural firm, is more
than $500,000 for any individual Property (a MAJOR CASUALTY), and Buyer has not
waived the exercise of its remedies under SECTION 7.2(a) within 10 days after
notice from any Seller of the occurrence of a Major Casualty or the initiation
of condemnation proceedings, then this Contract automatically terminates and
Buyer is deemed to have exercised its remedies under SECTION 7.2(a). If Buyer
waives the exercise of its remedies under SECTION 7.2(a) within 10 days after
notice from any Seller of the occurrence of a Major Casualty or the initiation
of condemnation proceedings, then Closing will occur without reduction in the
Purchase Price and at Closing:
(a) if a Major Casualty occurs:
(i) Buyer will receive a credit against the
Purchase Price equal to the amount of any
unused deductible under the Partnership's
property insurance policy;
(ii) Buyer will accept the Real Property and
remaining Improvements in their damaged
state; and
(iii) as between Buyer and Sellers, neither the
Partnership nor any Seller has any
obligation to repair or restore any damaged
or destroyed portions of the Real Property
and Improvements; and
(b) if condemnation proceedings are begun:
(i) Buyer will accept the Real Property and
remaining Improvements subject to the
condemnation proceedings;
(ii) Sellers have no liability with respect to
any portion of the Real Property and
Improvements that is condemned, or with
respect to any costs or expenses incurred by
the Partnership or Buyer as a result of any
condemnation proceedings; and
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(iii) Sellers shall reasonably cooperate with
Buyer in any condemnation proceedings.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices.
All notices, requests, approvals, consents, and other communications required or
permitted under this Contract (NOTICES) must be in writing and are effective:
(a) on the business day sent if (i) sent by fax prior to
5:00 p.m. Dallas, Texas time, (ii) the sending fax
generates a written confirmation of sending, and
(iii) a confirming copy is sent on the same business
day by one of the other methods specified below;
(b) on the next business day after delivery, on a
business day, to a nationally recognized overnight
courier service for prepaid overnight delivery;
(c) 3 days after being deposited on a business day in the
United States mail, certified, return receipt
requested, postage prepaid, or
(d) upon receipt if delivered by any method other than
the methods specified above;
in each instance addressed to Buyer or a Seller, as the case may be, at the
following addresses, or to any other address either party may designate by 10
days' prior notice to the other party:
Seller: c/o JPI
000 Xxxx Xxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Page
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxx@xxx.xxx
c/o JPI
000 Xxxx Xxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxx@xxx.xxx
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With a copy to:
Xxxxxx Xxxxx Xxxx & Xxxx, P.C.
0000 Xxxxxxxx Xxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxxxxx@xxxxxx.xxx
Buyer: Education Realty Operating Partnership, LP
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxx@xxxxx.xxx
With a copy to:
Martin, Tate, Xxxxxx & Xxxxxxx, P. C.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxx Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxx@xxxxxxxxxx.xxx
With a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxxxx@xxxxxx.xxx
Each party shall use commercially reasonable efforts to send a copy of any
notice of termination under this Contract to Closing Agent on the same date and
by the same method(s) as it is sent to the other party. The failure to send a
copy of any termination notice to Closing Agent does not invalidate an otherwise
valid termination notice. E-mail addresses are included in this SECTION 9.1 for
convenience only: e-mail is not an acceptable form for Notices under this
Contract.
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Section 9.2 Performance.
Time is of the essence in the performance of this Contract.
Section 9.3 Binding Effect.
This Contract is binding upon and inures to the benefit of the successors and
assigns of the parties.
Section 9.4 Entire Agreement.
This Contract, the Exhibits to this Contract and any agreements called for by
this Contract supercede the existing letter of intent between the parties dated
July 2, 2004, embody the complete agreement between the parties and cannot be
varied except by written agreement of each Seller and Buyer. No delay or
omission in the exercise of any right or remedy accruing to Seller or Buyer upon
any breach under this Contract shall impair such right or remedy or be construed
as a waiver of any such breach theretofore or thereafter occurring. The waiver
by Seller or Buyer of any breach of any term, covenant, or condition herein
stated shall not be deemed to be a waiver of any other breach, or of a
subsequent breach of the same or any other term, covenant, or condition herein
contained.
Section 9.5 Assignment.
(a) This Contract may not be assigned by a party without
the prior consent of the other party except that the
Buyer may assign its rights and obligations to an
Affiliate (defined below). Any assignee of assignor's
interest in this Contract is bound by all approvals
and waivers, actual and deemed, by assignor prior to
the assignment, and must assume in writing all of
assignor's obligations under this Contract. Assignor
is not released from the obligations created under
this Contract as a result of any permitted
assignment. Upon Buyer's written request received by
Seller at least ten (10) days prior to the Closing
Date, Seller will cause the various Interests to be
conveyed at Closing to various specified Affiliates
of Buyer set forth in Buyer's request.
(b) Upon any assignment of this Contract, assignor shall
promptly deliver to the other party a fully executed
original of the assignment of this Contract and the
assumption by the assignee of assignor's obligations
under this Contract, which assignment must include
the federal tax identification number of the
assignee.
(c) No consent given by a party to any transfer or
assignment of assignor's rights or obligations under
this Contract may be construed as a consent to any
other transfer or assignment of assignor's rights or
obligations. No transfer or assignment in violation
of this SECTION 9.5 is valid or enforceable.
(d) An AFFILIATE of an entity is any entity that
controls, is controlled by, or is under common
control with the entity in question. The term CONTROL
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means the possession, directly or indirectly, of the
power to direct or cause the direction of the
management and policies of an entity, whether through
the ownership of voting securities or otherwise.
Section 9.6 Commissions.
Each party hereby warrants to the other party that it has not dealt with any
real estate broker or salesman in the negotiation of this Contract. Each party
shall indemnify, defend, and hold harmless the other party against any real
estate commissions due by virtue of the execution or Closing of this Contract,
the obligation or asserted claim for which arises from actions taken or claimed
to be taken by or through the indemnifying party. The provisions of this SECTION
9.6 survive the Closing or any earlier termination of this Contract.
Section 9.7 Headings.
Section headings or captions are used in this Contract for convenience only and
do not limit or otherwise affect the meaning of any provision of this Contract.
Section 9.8 Holidays, Etc.
Whenever any time limit or date provided herein falls on a Saturday, Sunday, or
legal holiday under the laws of the State of Texas or the State where the Real
Property is located or on a day when federal banks are closed, then that date is
extended to the next day that is not a Saturday, Sunday, or legal holiday or a
day when federal banks are closed. The term BUSINESS DAY as used in this
Contract means any day that is not a Saturday, Sunday, or legal holiday under
the laws of the State of Texas or the State where the Real Property is located
or a day when federal banks are closed.
Section 9.9 Legal Fees.
If there is litigation, arbitration, or mediation concerning the interpretation
or enforcement of this Contract or any portion of this Contract, the prevailing
party, upon a final non-appealable judgment has been entered in a court of
competent jurisdiction, is entitled to recover from the losing party its
reasonable legal fees and paraprofessional fees, court costs, and expenses. The
provisions of this SECTION 9.9 survive the Closing or any earlier termination of
this Contract.
Section 9.10 Governing Law.
The laws of the State where the Real Property is located govern this Contract.
Section 9.11 Severability.
If any provision in this Contract is unenforceable in any respect, the remainder
of this Contract remains enforceable and, in lieu of the unenforceable
provision, there will be added to this Contract upon the agreement of Buyer and
Seller a provision as similar in terms to the unenforceable clause as may be
possible and be enforceable.
Page 52
Section 9.12 Disclaimers, Waivers, and Releases.
Buyer acknowledges and agrees that:
(a) EXCEPT AS MAY BE SPECIFICALLY STATED IN SECTION 4.1,
EACH SELLER, FOR ITSELF AND ON BEHALF OF JPI
APARTMENT CONSTRUCTION, L.P., JPI APARTMENT
MANAGEMENT, L.P., JPI APARTMENT DEVELOPMENT, L.P.,
JPI CONSTRUCTION, L.P., JPI LIFESTYLE APARTMENT
COMMUNITIES, L.P., AND JPI INVESTMENT COMPANY, L.P.,
AND THEIR RELATED AFFILIATES (COLLECTIVELY, THE
"SELLER AFFILIATES") SPECIFICALLY DISCLAIMS, AND
BUYER EXPRESSLY WAIVES, ANY WARRANTY, GUARANTY, OR
REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT, OR
FUTURE, OF, AS, TO, OR CONCERNING: (I) THE NATURE AND
CONDITION OF THE PROPERTY, INCLUDING, WITHOUT
LIMITATION, THE WATER, SOIL, AND GEOLOGY, AND THE
SUITABILITY OF THE REAL PROPERTY AND IMPROVEMENTS FOR
ANY AND ALL ACTIVITIES AND USES THAT BUYER MAY ELECT
TO CONDUCT THEREON; (II) MATTERS OF TITLE; (III) THE
NATURE, ENFORCEABILITY, AND EXTENT OF ANY
RIGHT-OF-WAY, LEASE, LIEN, ENCUMBRANCE, LICENSE,
RESERVATION, CONDITION, OR OTHERWISE RELATING TO THE
REAL PROPERTY AND IMPROVEMENTS; (IV) THE COMPLIANCE
OF THE REAL PROPERTY AND IMPROVEMENTS OR THE
OPERATION THEREOF WITH ANY LAWS, RULES, ORDINANCES,
OR REGULATIONS OF ANY GOVERNMENTAL AUTHORITY OR OTHER
BODY, INCLUDING, WITHOUT LIMITATION, THE AMERICANS
WITH DISABILITIES ACT OR THE FAIR HOUSING ACT, AS
AMENDED FROM TIME TO TIME; (V) WHETHER THE
IMPROVEMENTS ARE BUILT IN A GOOD AND WORKMANLIKE
MANNER; (VI) ZONING TO WHICH THE REAL PROPERTY AND
IMPROVEMENTS OR ANY PORTION THEREOF MAY BE SUBJECT;
(VII) THE AVAILABILITY OF ANY UTILITIES TO THE REAL
PROPERTY AND IMPROVEMENTS OR ANY PORTION THEREOF,
INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS,
ELECTRIC, PHONE, AND CABLE; (VIII) USAGES OF
ADJOINING PROPERTY; (IX) ACCESS TO THE REAL PROPERTY
AND IMPROVEMENTS OR ANY PORTION THEREOF; (X) THE
VALUE, COMPLIANCE WITH ANY PLANS AND SPECIFICATIONS
PROVIDED BY SELLER, SIZE, LOCATION, AGE, USE, DESIGN,
QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL
INTEGRITY, OPERATION, TITLE TO, OR PHYSICAL OR
FINANCIAL CONDITION OF THE REAL PROPERTY AND
IMPROVEMENTS OR ANY PORTION THEREOF, OR ANY INCOME,
EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS, OR
CLAIMS ON OR AFFECTING OR PERTAINING TO THE REAL
PROPERTY AND IMPROVEMENTS OR ANY PART THEREOF; (XI)
THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND STORAGE
TANKS; (XII) ANY OTHER MATTER AFFECTING THE STABILITY
OR INTEGRITY OF THE REAL PROPERTY AND IMPROVEMENTS;
(XIII) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE
REAL PROPERTY AND IMPROVEMENTS; (XIV) THE EXISTENCE
OF VESTED LAND USE, ZONING, OR BUILDING ENTITLEMENTS
AFFECTING THE REAL PROPERTY AND IMPROVEMENTS; (XV)
TAX CONSEQUENCES (INCLUDING, BUT NOT LIMITED TO, THE
AMOUNT OF, USE OF, OR PROVISIONS RELATING TO ANY TAX
CREDITS); (XVI) WARRANTIES (EXPRESS OR IMPLIED) OF
CONDITION REGARDING THE FITNESS OF THE REAL PROPERTY
AND IMPROVEMENTS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, TENANTABILITY, HABITABILITY, OR
Page 53
SUITABILITY FOR ANY INTENDED USE; (XVII) ANY
ENVIRONMENTAL CONDITIONS THAT MAY EXIST ON THE REAL
PROPERTY AND IMPROVEMENTS, INCLUDING, WITHOUT
LIMITATION, THE EXISTENCE OR NON-EXISTENCE OF
PETROLEUM PRODUCTS, PETROLEUM RELATED PRODUCTS, FUNGI
OF ALL FORMS AND TYPES, "HAZARDOUS SUBSTANCES,"
"HAZARDOUS MATERIALS," "TOXIC SUBSTANCES," OR "SOLID
WASTES" AS THOSE TERMS (WHICH ARE COLLECTIVELY
REFERRED TO IN THIS CONTRACT AS "HAZARDOUS
MATERIALS") ARE DEFINED IN THE COMPREHENSIVE
ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT
OF 1980, AS AMENDED BY SUPERFUND AMENDMENTS AND
REAUTHORIZATION ACT OF 1986, THE RESOURCE
CONSERVATION AND RECOVERY ACT OF 1976 ("RCRA"), AND
THE HAZARDOUS MATERIALS TRANSPORTATION ACT, AND STATE
ENVIRONMENTAL LAWS, AND IN THE REGULATIONS
PROMULGATED PURSUANT TO THOSE LAWS, ALL AS AMENDED
(COLLECTIVELY, THE "HAZARDOUS WASTE LAWS") AND BUYER
RELEASES AND WAIVES ANY CLAIMS OR CAUSES OF ACTION
AGAINST EACH SELLER, EACH SELLER'S AGENTS AND EACH
SELLER'S AFFILIATES BASED IN WHOLE OR IN PART ON ANY
VIOLATION OF, OR ARISING WITH RESPECT TO, ANY
FEDERAL, STATE, OR LOCAL STATUTE, ORDINANCE, RULE, OR
REGULATION RELATING THERETO; AND (XVIII) THE
FINANCIAL EARNING CAPACITY OR HISTORY OR EXPENSE
HISTORY OF THE OPERATION OF THE REAL PROPERTY AND
IMPROVEMENTS.
(b) BUYER SHALL PERFORM ALL INVESTIGATIONS OF THE
INTERESTS AND THE PROPERTY IT DEEMS NECESSARY DURING
THE DUE DILIGENCE PERIOD AND WILL RELY SOLELY ON ITS
OWN INVESTIGATIONS. ANY PLANS OR SPECIFICATIONS
PROVIDED BY SELLERS ARE PROVIDED SOLELY FOR
CONVENIENCE AND BUYER IS RELYING SOLELY ON ITS OWN
PHYSICAL INVESTIGATION OF THE PROPERTY AND IS NOT
RELYING ON THE ACCURACY OF ANY PLANS OR
SPECIFICATIONS. IF BUYER DOES NOT TERMINATE THIS
CONTRACT PRIOR TO THE EXPIRATION OF THE DUE DILIGENCE
PERIOD, BUYER ACCEPTS THE PROPERTY AS CONSTRUCTED
REGARDLESS OF WHETHER THE IMPROVEMENTS AS CONSTRUCTED
CONFORM TO ANY PLANS OR SPECIFICATIONS. BUYER
ACKNOWLEDGES THAT THE IMPROVEMENTS AS CONSTRUCTED MAY
NOT AND VERY LIKELY DO NOT CONFORM IN ALL RESPECTS TO
THE PLANS AND SPECIFICATIONS AND BUYER HEREBY WAIVES
ANY CLAIMS IT MAY HAVE AS A RESULT OF ANY
NON-CONFORMITY OF ANY IMPROVEMENTS AS ACTUALLY
CONSTRUCTED WITH THE PLANS AND SPECIFICATIONS. BUYER
IS NOT AND WILL NOT RELY ON ANY INFORMATION PROVIDED
OR NOT PROVIDED TO BUYER BY SELLER OR THE PARTNERSHIP
TO MAKE A DECISION CONCERNING THE PURCHASE OR
NON-PURCHASE OF THE INTERESTS. ALL SELLER INFORMATION
(DEFINED BELOW) IS SUBJECT TO BUYER'S VERIFICATION
AND, REGARDLESS OF BUYER'S FAILURE TO SO VERIFY THE
SELLER INFORMATION, BUYER WILL NOT HOLD ANY SELLER OR
ANY SELLER AFFILIATE LIABLE FOR OR MAKE ANY CLAIMS
AGAINST ANY SELLER OR ANY SELLER AFFILIATE AS TO THE
ACCURACY OR INACCURACY OF ANY SELLER INFORMATION.
(c) BUYER REPRESENTS AND WARRANTS TO EACH SELLER THAT
BUYER'S OPPORTUNITY FOR INSPECTION AND INVESTIGATION
OF THE PROPERTY (AND
Page 54
OTHER PARCELS IN PROXIMITY THERETO) WILL BE ADEQUATE
TO ENABLE BUYER TO MAKE BUYER'S OWN DETERMINATION
WITH RESPECT TO THE ACQUISITION OR NON-ACQUISITION OF
THE INTERESTS AND THE PRESENCE OR DISPOSAL ON OR
BENEATH THE REAL PROPERTY AND IMPROVEMENTS (AND OTHER
PARCELS IN PROXIMITY THERETO) OF HAZARDOUS MATERIALS.
BUYER ACCEPTS THE RISK OF THE PRESENCE OR DISPOSAL OF
HAZARDOUS MATERIALS ON OR NEAR THE REAL PROPERTY AND
IMPROVEMENTS.
(d) NO REPRESENTATIONS HAVE BEEN MADE BY ANY SELLER, ANY
SELLER AFFILIATE, OR ANY OF THEIR RESPECTIVE AGENTS,
BROKERS, OR EMPLOYEES, AND BUYER HAS NOT RELIED ON
ANY INFORMATION SUPPLIED BY ANY SELLER OR THE
PARTNERSHIP IN ENTERING INTO, CONTINUING THE
EFFECTIVENESS OF, OR CLOSING UNDER THIS CONTRACT
OTHER THAN SELLERS' REPRESENTATIONS AND WARRANTIES
SPECIFIED IN SECTION 4.1. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES,
WARRANTS, AND REPRESENTS TO EACH SELLER THAT NO
SELLER NOR ANY SELLER AFFILIATE, OR ANY OF THEIR
RESPECTIVE AGENTS, BROKERS, OR EMPLOYEES HAS MADE ANY
REPRESENTATION OR STATEMENT TO BUYER CONCERNING THE
VALUE OF INTERESTS OR THE PROPERTY'S INVESTMENT
POTENTIAL OR RESALE AT ANY FUTURE DATE, AT A PROFIT
OR OTHERWISE, NOR HAS ANY SELLER OR ANY SELLER
AFFILIATE OR ANY OF THEIR RESPECTIVE AGENTS, BROKERS,
OR EMPLOYEES RENDERED ANY ADVICE OR EXPRESSED ANY
OPINION TO BUYER REGARDING ANY INCOME TAX
CONSEQUENCES OF OWNERSHIP OF THE INTERESTS OR THE
PROPERTY.
(e) BUYER REPRESENTS AND WARRANTS TO EACH SELLER THAT
BUYER IS RELYING SOLELY ON BUYER'S INDEPENDENT
ANALYSIS AND INVESTIGATION OF THE PROPERTY AND BUYER
ASSUMES THE RISK THAT AN ADVERSE CONDITION ON THE
PROPERTY MAY NOT HAVE BEEN REVEALED BY ITS OWN DUE
DILIGENCE. NO SELLER HAS ANY DUTY TO INFORM, ADVISE,
OR OTHERWISE PROVIDE INFORMATION TO BUYER THAT THE
SELLER MAY HAVE REGARDING THE INTERESTS OR THE
PROPERTY EXCEPT AS EXPRESSLY REQUIRED IN THIS
CONTRACT. ANY INFORMATION, DOCUMENTS, OR REPORTS
SUPPLIED OR MADE AVAILABLE BY A SELLER OR THE
PARTNERSHIP, WHETHER WRITTEN OR ORAL, OR IN THE FORM
OF MAPS, SURVEYS, PLATS, SOIL REPORTS, ENGINEERING
STUDIES, ENVIRONMENTAL STUDIES, OPERATION STATEMENTS,
RENT ROLLS, OR OTHER INSPECTION REPORTS PERTAINING TO
THE PROPERTY (INCLUDING, WITHOUT LIMITATION, THE
REPORTS) (COLLECTIVELY "SELLER INFORMATION") ARE
BEING DELIVERED TO BUYER ON AN AS-IS, WHERE IS, AND
WITH ALL FAULTS BASIS, SOLELY AS A COURTESY. NEITHER
THE PARTNERSHIP NOR ANY SELLER HAS EITHER VERIFIED
THE ACCURACY OF ANY STATEMENTS OR OTHER INFORMATION
IN ANY OF THE SELLER INFORMATION, NOR ANY METHOD USED
TO COMPILE THE SELLER INFORMATION, NOR THE
QUALIFICATIONS OF THE PERSON(S) PREPARING THE SELLER
INFORMATION. SELLER MAKES NO, AND BUYER WAIVES ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR
ARISING BY OPERATION OF LAW AS TO THE ACCURACY,
COMPLETENESS, OR ANY OTHER ASPECT OF THE SELLER
INFORMATION.
Page 55
(f) EXCEPT AS SET FORTH IN THE CLOSING DOCUMENT OR
SECTION 4.1, NO SELLER NOR ANY SELLER AFFILIATE IS
RESPONSIBLE OR LIABLE TO BUYER OR ANY SUCCESSOR OR
ASSIGNEE OF BUYER, AND BUYER, ON ITS OWN BEHALF AND
ON BEHALF OF ITS SUCCESSORS AND ASSIGNS, RELEASES AND
COVENANTS NOT TO XXX ANY SELLER OR ANY SELLER
AFFILIATE FOR ANY CONSTRUCTION OR DESIGN DEFECTS,
ERRORS, OR OMISSIONS, OR ON ACCOUNT OF ANY OTHER
CONDITIONS AFFECTING THE PROPERTY, KNOWN OR UNKNOWN.
EXCEPT AS SET FORTH IN THE CLOSING DOCUMENT OR
SECTION 4.1, BUYER IS PURCHASING THE INTERESTS WITH
THE UNDERSTANDING THAT THE PROPERTY IS AS IS, WHERE
IS, AND WITH ALL FAULTS. EXCEPT AS SET FORTH IN THE
CLOSING DOCUMENT OR SECTION 4.1, BUYER RELEASES EACH
SELLER AND ALL SELLER AFFILIATES AND THEIR RESPECTIVE
EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, AND
AGENTS FOR ANY COST, LOSS, LIABILITY, DAMAGE,
EXPENSE, DEMAND, ACTION, OR CAUSE OF ACTION ARISING
FROM OR RELATED TO ANY CONSTRUCTION OR DESIGN
DEFECTS, ERRORS, OMISSIONS, OR OTHER CONDITIONS
AFFECTING THE PROPERTY, KNOWN OR UNKNOWN. THIS
RELEASE WILL BE GIVEN FULL FORCE AND EFFECT ACCORDING
TO EACH OF ITS EXPRESS TERMS AND PROVISIONS,
INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO
UNKNOWN CLAIMS, DAMAGES, AND CAUSES OF ACTION. THIS
COVENANT RELEASING EACH SELLER AND ALL SELLER
AFFILIATES IS A COVENANT RUNNING WITH THE PROPERTY
AND IS BINDING UPON BUYER, ITS SUCCESSORS AND
ASSIGNS.
THE PROVISIONS OF THIS SECTION 9.12 SURVIVE THE CLOSING OR ANY EARLIER
TERMINATION OF THIS CONTRACT.
Section 9.13 Rule of Construction.
Each party and its counsel have reviewed and revised this Contract. The normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party may not be employed in the interpretation of this
Contract or any amendments, schedules, or exhibits to this Contract.
Section 9.14 Effective Date.
The EFFECTIVE DATE of this Contract is September 17, 2004.
Section 9.15 Independent Contract Consideration.
Of the Xxxxxxx Money, $100.00 shall be deemed to be independent consideration
for the options granted in this Contract. Such independent consideration is
deemed to be earned upon the final execution of this Contract by all parties and
is non-refundable to Buyer; therefore, in the event Buyer terminates this
Contract for any reason and the Xxxxxxx Money is thereupon returnable to Buyer,
notwithstanding anything contained herein to the contrary, $100.00 of such
Xxxxxxx Money shall be tendered to Seller.
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Section 9.16 Counterparts and Facsimile Signatures.
This Contract may be executed in one or more counterparts. Each counterpart is
an original and proof of this Contract may be made without more than one
counterpart. Facsimile signatures are binding on the party providing the
facsimile signatures.
Section 9.17 No Recording.
Buyer covenants that neither it nor any successor or assign will record in any
public real property records this Contract or any memorandum or affidavit
relating to this Contract or otherwise cloud title to the Property. In addition
to Seller's remedies in SECTION 7.3, if Buyer breaches this SECTION 9.17, Buyer
will record a release of any such memorandum or affidavit no later than five (5)
days after request by Seller. This SECTION 9.17 survives the Closing or earlier
termination of this Contract and Seller may enforce specific performance of
Buyer's obligations under this SECTION 9.17.
Section 9.18 Further Acts.
In addition to the acts, instruments and agreements recited herein and
contemplated to be performed, executed and delivered by Buyer and Seller, Buyer
and Seller shall perform, execute, and deliver or cause to be performed,
executed, and delivered at the Closing or after the Closing, any and all further
acts, instruments, and agreements and provide such further assurances as the one
party may reasonably require to consummate the transaction contemplated
hereunder as long as such performance, execution or delivery is acceptable to
the other party.
Section 9.19 Waiver of Jury Trial.
(a) If a claim (whether based on contract, statute,
regulation, or otherwise) between Seller and Buyer
arising out of or relating to this Contract
(including, without limitation, the construction,
validity, interpretation, termination, enforceability
or alleged breach or threatened breach of the
provisions contained in this Contract) (defined for
the purposes of this SECTION 9.19 only, DISPUTE)
cannot be resolved informally, then the parties, if
requested in writing by either party, shall each
appoint a corporate representative (with authority to
make decisions) to meet in a good faith effort to
attempt to resolve such Dispute. If such meeting is
requested, the meeting shall occur within 10 business
days after the request for such meeting. If the
corporate representatives of the parties are unable
to resolve the Dispute within 20 days after the
meeting, the Dispute shall be resolved by binding
arbitration pursuant to SECTION 9.19(b).
(b) Any Dispute (including, without limitation, any
dispute over arbitrability or jurisdiction) not
settled under SECTION 9.19(a) shall be, upon demand
of a party to such Dispute, resolved by arbitration
held in Dallas, Texas, administered by the AAA and,
except as modified by this SECTION 9.19(b), governed
by the Commercial Arbitration Rules and Mediation
Procedures of the AAA (AAA RULES). The law applicable
to the arbitration process
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and procedure, including the administration and
enforcement thereof, shall be the Federal Arbitration
Act (9 U.S.C. Sections 1 et seq.), as amended. The
parties to the Dispute shall be entitled to engage in
reasonable discovery, including the right to
production of relevant documents by the opposing
party or parties and the right to take depositions
reasonably limited in number, time and place;
provided that in no event shall any party to the
Dispute be entitled to refuse to produce relevant and
non-privileged documents or copies thereof requested
by any other party to the Dispute within the time
limit set and to the extent required by order of the
arbitrator(s). The arbitrator(s) shall determine the
rights and obligations of the parties to the Dispute
according to the terms and provisions of this
Contract and the governing law specified in SECTION
9.10 of this Contract to the extent not inconsistent
with the Federal Arbitration Act. The arbitrator(s)
shall hear and determine any preliminary issue of law
asserted by any party to the Dispute to be
dispositive of any claim or defense, in whole or in
part, in the manner that a court would hear and
dispose of a motion to dismiss for failure to state a
claim or for summary judgment, pursuant to such terms
and procedures as the arbitrator(s) deem appropriate.
Any award by the arbitrator(s), whether preliminary
or final, shall be in writing, signed by each
arbitrator, and specify the reasons for the award,
including specific findings of fact and law. An
arbitration award rendered in any such proceeding
shall be final, binding, and non-appealable, and may
be modified or vacated only on the grounds provided
by the Federal Arbitration Act. A judgment on the
arbitration award may be entered in any court having
competent jurisdiction. The arbitrators shall be
divested of any power to award damages in the nature
of punitive, exemplary, or consequential damages.
With respect to a Dispute or Disputes in which the
aggregate amount of claims or amounts in controversy
do not exceed $100,000, a single arbitrator will be
impaneled, who will have authority to render a
maximum award of $100,000, including all damages of
any kind and costs, fees, interest, and the like.
With respect to a Dispute or Disputes in which the
aggregate amount of claims or amounts in controversy
exceed $100,000, the Dispute(s) will be decided by a
majority vote of three arbitrators.
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(c) If a Dispute is required under SECTION 9.19(b) to be
heard by three arbitrators, the selection of such
arbitrators shall be as follows: each party to the
Dispute shall each appoint one arbitrator within 20
days after the filing of the arbitration, and the two
arbitrators so appointed shall select the presiding
arbitrator within 20 days after the latter of the two
arbitrators has been appointed by the parties. If
either of the parties fails to appoint its
party-appointed arbitrator or if the two
party-appointed arbitrators cannot reach agreement on
the presiding arbitrator within the applicable time
period, then the AAA shall appoint the remainder of
the three arbitrators not yet appointed. Each
arbitrator shall be and remain at all times wholly
impartial, and, once appointed, no arbitrator shall
have any ex parte communications with any of the
parties to the Dispute concerning the arbitration or
the underlying Dispute other than communications
directly concerning the selection of the presiding
arbitrator. If a Dispute is required under SECTION
9.19(b) to be heard by one arbitrator, the selection
of the arbitrator shall be in accordance with the AAA
Rules then in effect. All arbitrators shall be
knowledgeable in the subject matter of the Dispute.
Section 9.20 Exchange.
(a) Sellers may elect to consummate the sale of the
Property as part of a so-called like kind exchange
(the EXCHANGE) pursuant to Section 1031 of the Code.
(b) If Sellers so elect, the following provisions shall
apply and Buyer is obligated to cooperate with
Sellers in effecting the Exchange only if:
- the Closing Date is not delayed;
- Buyer incurs no additional liabilities of any kind in
effecting the Exchange;
- Buyer is not required to hold title to the exchange
property at any time; and
- Sellers shall pay all additional costs incurred by
Sellers and Buyer in effecting the Exchange,
including attorneys' fees.
Section 9.21 Related Property.
Buyer has entered into a Contract of Sale/Contribution (the ASSET SALE CONTRACT)
with JEFFERSON COMMONS - TUCSON PHASE II LIMITED PARTNERSHIP and JEFFERSON
COMMONS - COLUMBIA, L.P., and a Contract of Sale (the (CASH CONTRACT) with
JEFFERSON COMMONS - LAWRENCE, L.P., and JEFFERSON COMMONS - WABASH, L.P.
concerning Buyer's acquisition of real property therein described. If the Asset
Sale Contract or the Cash Contract is terminated, either Seller or Buyer may
terminate this Contract by written notice delivered to the other within 10 days
after termination of the respective Contract. Additionally, if Buyer fails to
deposit the Xxxxxxx Money hereunder or under the Asset Sale Contract or the Cash
Contract as required herein or therein, Sellers may terminate this Contract
Page 59
and both the Asset Sale Contract and the Cash Contract by written notice
delivered to Buyer within 3 days after Buyer's failure to timely deliver either
Xxxxxxx Money. If this Contract is terminated under this Section, the Closing
Agent shall deliver the Xxxxxxx Money as provided in this Contract as though the
reason for such termination under the Partnership Sale Contract and the Cash
Contract also occurred under this Contract and the parties shall thereafter have
no further rights, liabilities, or obligations under this Contract, the Asset
Sale Contract or the Cash Contract except for matters which expressly survive
termination. Seller's rights under this Section survive termination of this
Contract. The intent of the parties is that this Contract, the Asset Sale
Contract and the Cash Contract be cross defaulted.
Section 9.22 Confidentiality.
Seller acknowledges that the matters relating to the REIT, the Public Offering,
this Contract and this transaction (collectively, the INFORMATION) are
confidential in nature. Therefore, Seller and, if applicable, each Designated
Owner covenants and agrees to keep the Information confidential and will not
(except as required by applicable law, regulation or legal process including
applicable securities laws), without the Buyer's prior written consent, disclose
any Information in any manner whatsoever; provided, however, (a) that the
Information may be revealed only to the Seller's directors, officers, employees,
legal counsel, consultants, and advisors and to the Existing Lenders
(collectively, the INFORMATION GROUP), in each case on a "need to know" basis,
each of whom shall be informed of the confidential nature of the Information,
and (b) this confidentiality agreement is not intended to limit Seller's
continued use of its books, records, documents and other materials necessary for
the continued conduct of Seller's daily business and that of the respective
Properties. If the Seller or any member of the Information Group is requested
pursuant to, or required by, applicable law, regulation or legal process to
disclose any of the Information, the applicable member of the Information Group
will notify the Buyer promptly so that it may seek a protective order or other
appropriate remedy or, in its sole discretion, waive compliance with the terms
of this SECTION 9.22. In the event that no such protective order or other remedy
is obtained, or that the Buyer waives compliance with the terms of this SECTION
9.22, the applicable member of the Information Group may furnish only that
portion of the Information which it is advised by counsel is legally required
and will exercise all reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the Information. Seller acknowledges
that remedies at law may be inadequate to protect the Buyer or the REIT against
any actual or threatened breach of this SECTION 9.22, and, without prejudice to
any other rights and remedies otherwise available, Seller agrees to the granting
of injunctive relief in favor of the REIT and/or the Buyer. Notwithstanding any
other express or implied agreement to the contrary, the parties agree and
acknowledge that each of them and each of their employees, representatives, and
other agents may disclose to any and all persons, without limitation of any
kind, the tax treatment and tax structure of the transaction and all materials
of any kind (including opinions or other tax analyses) that are provided to any
of them relating to such tax treatment and tax structure, except to the extent
that confidentiality is reasonably necessary to comply with U.S. federal or
state securities laws. For purposes of this paragraph, the terms TAX TREATMENT
and TAX STRUCTURE have the meanings specified in Treasury Regulation section
1.6011-4(c). Buyer agrees that if the transaction contemplated by this Contract
is not consummated for any reason, then Buyer will (i) return to Seller all
documents and information obtained from Seller promptly upon request and (ii)
keep the Information confidential and will not (except as required by applicable
law, regulation or legal process including applicable securities laws), without
the Seller's prior written consent, disclose any Information, the content or
results of Buyer's investigations and the information contained in the materials
delivered by Seller to
Page 60
Buyer, in any manner whatsoever or use the information gathered by Buyer or sent
by Seller to Buyer in a manner which will (a) harm or tend to harm Seller, or
(b) provide Buyer with an advantage in dealing with third parties in competition
with Seller or any Seller Affiliate.
[SIGNATURE PAGE FOLLOWS.]
Page 61
EXECUTED by Seller on September 22, 2004, to be effective the 17th day
of September, 2004.
JPI-CG MEZZ LLC, a Delaware limited liability
company
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
-------------------------------
Title: Assistant Vice President
------------------------------
JPI-MC MEZZ LLC, a Delaware limited liability
company
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
-------------------------------
Title: Assistant Vice President
------------------------------
JPI Genpar Realty LLC, a Delaware limited
liability company
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
-------------------------------
Title: Assistant Vice President
------------------------------
JPI Investment Company, L.P., a Texas limited
partnership
By: JPI Multifamily Investments L.P., a
Delaware limited partnership, general
partner
By: New GP LLC, a Delaware limited
liability company, general partner
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
-------------------------------
Title: Assistant Vice President
------------------------------
Page 62
EXECUTED by Buyer on September 21, 2004, to be effective the 17th day of
September, 2004.
BUYER
EDUCATION REALTY OPERATING
PARTNERSHIP, LP, a Delaware limited
partnership
By: Education Realty OP GP, Inc.,
its General Partner
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
-------------------------------
Title: President
-------------------------------
Buyer's Tax ID No.
-------------------------
Page 63
The undersigned executes this Contract
solely for the purpose of the
representations and warranties to Buyer
regarding securities law matters set forth
in SECTION 4.1(oo) and the confidentiality
covenants to Buyer set forth in SECTION 9.22
JPI MULTIFAMILY INVESTMENTS L.P.,
a Delaware limited partnership
By: New GP LLC,
a Delaware limited liability company,
its General Partner
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
-------------------------------
Title: Assistant Vice President
------------------------------
Page 64
The undersigned agrees to hold and disburse the Xxxxxxx Money in accordance with
this Contract.
CHICAGO TITLE INSURANCE COMPANY
By:
------------------------------
Name:
------------------------
Title:
-----------------------
Date:
-------------------------
Page 65
EXHIBIT A-1
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN XXXX COUNTY, FLORIDA
EXHIBIT A-2
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN KALAMAZOO COUNTY, MICHIGAN
EXHIBIT A-3
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN CENTRE COUNTY, PENNSYLVANIA
EXHIBIT A-4
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN XXXXX COUNTY, OKLAHOMA
EXHIBIT A-5
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN XXXX COUNTY, FLORIDA
EXHIBIT A-6
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN HILLSBOROUGH COUNTY, FLORIDA
EXHIBIT A-7
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN ORANGE COUNTY, FLORIDA
EXHIBIT A-8
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN LUBBOCK COUNTY, TEXAS
EXHIBIT A-9
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN FRANKLIN COUNTY, OHIO
EXHIBIT A-10
LEGAL DESCRIPTION OF REAL PROPERTY
LOCATED IN XXXX COUNTY, TENNESSEE
EXHIBIT B
SERVICE CONTRACTS
EXHIBIT C
PERSONAL PROPERTY
EXHIBIT D
INTENTIONALLY OMITTED
EXHIBIT E
PRO RATA CASH ALLOCATION
EXHIBIT F
REPORTS
EXHIBIT G
DELIVERED LOAN DOCUMENTS
EXHIBIT H
SURVEYS
EXHIBIT I
OTHER CONTRACTS FOR DEVELOPMENT
EXHIBIT J
DECLARATION OF RESTRICTION
EXHIBIT K
LITIGATION
EXHIBIT L
NOTICES FROM GOVERNMENTAL AUTHORITIES
EXHIBIT M
BUYER'S PARTNERSHIP AGREEMENT
EXHIBIT N
SELLER KNOWLEDGE INDIVIDUALS
EXHIBIT O
AGREEMENT REGARDING CONTRIBUTED PROPERTIES
EXHIBIT P
LIQUIDITY OF LOAN DOCUMENTS
EXHIBIT Q
ASSIGNMENT OF INTERESTS
JEFFERSON AT _________________
EXHIBIT R
ASSIGNMENT OF PARTNERSHIP INTERESTS
JEFFERSON LOFTS AT ORLANDO LIMITED PARTNERSHIP
EXHIBIT S
NON-EXCLUSIVE SERVICE XXXX LICENSE AGREEMENT
EXHIBIT T
LEGAL OPINION
EXHIBIT U
INTENTIONALLY OMITTED
EXHIBIT V
WARRANT AGREEMENT
EXHIBIT W
REGISTRATION RIGHTS AGREEMENT
