EXHIBIT 10.2
REQUIRED REPAIR ESCROW AGREEMENT
This Required Repair Escrow Agreement ("Escrow Agreement") is made as of
the 1st day of January, 2006, by and among PLACE PROPERTIES, L.P., a Tennessee
limited partnership and PLACE MEZZ BORROWER, LLC, a Delaware limited liability
company (collectively, "Transferors"); EDUCATION REALTY OPERATING PARTNERSHIP,
LP, a Delaware limited partnership ("Transferee"); and CHICAGO TITLE INSURANCE
COMPANY ("Escrow Agent").
RECITALS
WHEREAS, Transferors and Transferee have entered into a certain
Contribution Agreement dated September 14, 2005, as amended by First Amendment
to Contribution Agreement dated December 28, 2005 (collectively, the
"Contribution Agreement"); and
WHEREAS, pursuant to the Contribution Agreement, on the date hereof
Transferee has acquired all of the membership interests in the "Property
Owners", as defined therein, and such Property Owners own the "Properties", as
defined therein;
WHEREAS, pursuant to the Contribution Agreement, Transferors agreed to
complete, at their sole cost and expense, the "Required Repairs", as defined
therein, to certain of the Properties;
WHEREAS, pursuant to the Contribution Agreement, Transferors agreed to
complete, at their sole cost and expense the capital improvements scheduled to
be completed in 2005 at the Properties pursuant to the 2005 Capital Budget (the
"Scheduled Capital Improvements"); and
WHEREAS, the Required Repairs and the Scheduled Capital Improvements have
been completed except for certain items at certain Properties described in
Exhibit "A" attached hereto and made a part hereof (collectively, the "Repair
Items") and Transferors and Transferee have requested Escrow Agent to receive
funds to be held in escrow and applied to the cost of completing the Repair
Items in accordance with this Escrow Agreement.
NOW THEREFORE, in consideration of the above recitals, the mutual promises
set forth herein and other good and valuable consideration, the parties agree as
follows:
1. ACCEPTANCE BY ESCROW AGENT. Escrow Agent hereby agrees to act as Escrow
Agent in accordance with the terms and conditions hereof.
2. DEPOSIT OF FUNDS. On the date hereof Transferors shall deposit in escrow
with Escrow Agent the amount of $603,065.00 (($320,000 x 120%) plus $219,065) to
secure payment of the Repair Items (the "Escrow Fund"). Escrow Agent shall
deposit such funds in a separate interest bearing account established solely for
the purpose of holding the Escrow Fund. All interest shall be added to the
Escrow Fund. Transferors will execute the appropriate Internal Revenue Service
documentation for the giving of taxpayer identification information relating to
this account prior to depositing such funds with Escrow Agent. Interest will
accrue on said account at the rate provided by the institution in which the
escrowed funds are deposited.
All interest will accrue to and be reported to the Internal Revenue Service
for the account of:
Name: Place Properties, L.P.
Address: 0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx
Attention: CecilPhillips
Phone: (000) 000-0000
Tax Identification No.: 00-0000000
3. TRANSFERORS' WORK. Transferors, at their sole cost and expense, shall
complete all of the Repair Items in a good workmanlike and lien free manner and
in compliance with all applicable laws, rules and regulations on or before March
31, 2006, subject to extensions for any delays caused by force majeur events.
Transferors shall endeavor in good faith to provide written notice of any force
majeur delays to Transferee promptly after the occurrence thereof.
4. DISBURSEMENT OF ESCROW FUND.
On a monthly basis, upon completion of any portion of the Repair Items
at any Project and the inspection and approval thereof by Transferee, not to be
unreasonably withheld or delayed, Transferors shall provide to Escrow Agent and
Transferee a written request for disbursement from the Escrow Funds
("Transferors' Disbursement Notice") which shall contain the following: (a) a
statement of the amount of the requested Disbursement; (b) a certificate from
the Transferors that such Repair Items which have been performed to date have
been performed in a good workmanlike and lien free manner and in compliance with
all applicable laws, rules and regulations; (c) to the
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extent such Repair Items have been completed, copies of all permits or approvals
to the extent required from any governmental authority evidencing satisfactory
completion of such Repair Items; (d) an interim lien waiver or a final
completion affidavit and lien waiver, as applicable, from the contractor or
contractors (each a "Contractor") as to all of such Repair Items; and (e) copies
of the contractor's draw request(s) or invoices for the Repair Items so
performed and, if completed, a certification from Transferors stating the total
cost of such Repair Items; and (f) shall certify to Escrow Agent the date that
Transferors delivered the aforesaid items to Transferee. Unless Transferee shall
notify Escrow Agent in writing that it objects to such disbursement within five
(5) days of the certified date of delivery of Transferor's Disbursement Notice
to Transferee and related documentation, Escrow Agent shall disburse to
Transferors from the Escrow Fund the amount requested by Transferors in the
Transferor's Disbursement Notice, provided that, in no event shall Escrow Agent
be required to disburse any amount in excess of the amount of Escrow Funds then
held by Escrow Agent. Upon completion of all Repair Items and submission of all
documentation required herein and payment of all costs relating to the Repair
Items pursuant to this Paragraph and/or Paragraph 5 below, the remaining balance
of the Escrow Funds, if any, shall be disbursed to Transferors.
5. TRANSFEREE'S RIGHT TO COMPLETE TRANSFERORS' WORK.
In the event that Transferors have not fully completed any of the
Repair Items on or before March 31, 2006, subject to extension for any delays
caused by force majeur events as permitted above, then Transferee shall have the
right at its option, to hire a contractor to complete such Repair Items not
completed by Transferors and shall be entitled to receive reimbursement for the
costs and expenses incurred by Transferee in connection with such work. In the
event Transferee shall elect to complete any or all of such Repair Items, on a
monthly basis, Transferee may submit to Escrow Agent and Transferors a written
request for reimbursement of the costs and expenses incurred by Transferee in
connection with its completion of any or all of such Repair Items (the
"Transferee's Disbursement Notice") which shall contain the following: (a) a
certificate stating that Transferee has notified Transferors of its election to
complete the Repair Items; (b) a statement of the amount of the requested
Disbursement; (c) a certificate of Transferee certifying as to the completion of
such Repair Items, (d) an interim lien waiver or a final completion affidavit
and lien waiver, as
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applicable, executed by Transferee's contractor for the Repair Items completed
on behalf of Transferee, (e) copies of all permits or approvals to the extent
required from any governmental authority evidencing satisfactory completion of
the Repair Items, (f) copies of the contractor's draw request(s) or invoices for
the Repair Items so completed and a certification from Transferee stating the
total cost of such Repair Items; and (b) shall certify to Escrow Agent the date
that Transferee delivered the aforesaid items to Transferors. Unless Transferors
shall notify Escrow Agent in writing that they object to such disbursement
within five (5) days of the certified delivery date of Transferee's Disbursement
Notice and related documentation, Escrow Agent shall pay to Transferee the
amount requested in the Transferee's Disbursement Notice, provided in no event
shall Escrow Agent be required to disburse any amount in excess of the amount of
Escrow Funds then held by Escrow Agent. Upon completion of all Repair Items and
submission of all documentation required herein and payment of all costs
relating to the Repair Items pursuant to this Paragraph and/or Paragraph 4
above, the remaining balance of the Escrow Funds, if any, shall be disbursed to
Transferors.
6. EXCULPATION OF ESCROW AGENT. In performing its duties hereunder, Escrow
Agent, except for its gross negligence, willful misconduct or breach of its
obligations under this Agreement, shall not incur any liability to anyone for
any loss or damage resulting from any good faith act or forbearance of Escrow
Agent, any default, error, action or omission of any party other than Escrow
Agent, the lack of authenticity of any writing delivered to Escrow Agent or of
any signature thereto or the lack of authority of the signatory to such writing,
Escrow Agent's compliance with all attachments, writs, orders, judgments or
other legal process issued out of any court, Escrow Agent's assertion or failure
to assert any cause of action or defense in any judicial or administrative
proceeding or any loss or damage which arises after the Escrow Amount has been
disbursed in accordance with the terms of this Escrow Agreement.
7. DISPUTES. In the event of a dispute between Transferors and Transferee
sufficient, in the sole discretion of Escrow Agent, to justify it doing so,
Escrow Agent shall be entitled to tender into the registry or custody of any
court of competent jurisdiction the Escrow Fund, together with such legal
pleadings as it may deem appropriate, and thereon be discharged from all further
duties and liabilities under this Escrow Agreement. Any such legal action may be
brought in such court as
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Escrow Agent shall determine to have jurisdiction thereof. All fees and expenses
of Escrow Agent relating to such interpleader shall be paid from the Escrow
Fund.
8. INDEMNITY OF ESCROW AGENT. Transferors and Transferee hereby indemnify
and hold harmless Escrow Agent from and against any and all losses, claims,
damages, liabilities and expenses, including, without limitation, reasonable
costs of investigation and legal counsel fees actually incurred, which may be
imposed upon Escrow Agent or incurred by Escrow Agent in connection with the
performance of its duties hereunder, unless arising from Escrow Agent's gross
negligence, willful misconduct or breach of its obligations under this
Agreement, including, without limitation, any litigation arising from this
Escrow Agreement or involving the subject matter hereof.
9. ESCROW FEES. Escrow Agent shall be entitled to receive a fee in the
amount of $1,000.00 (the "Escrow Fee") for the services provided hereunder. The
Escrow Fee shall be deducted from the Escrow Fund by the Escrow Agent at any
time after the Escrow Fund is deposited with Escrow Agent.
10. NOTICES. All notices, payments, demands or requests required or
permitted to be given pursuant to this Escrow Agreement shall be in writing and
shall be deemed to have been properly given or served and shall be deemed
effective upon confirmed delivery, when sent by facsimile transmission or by
private courier service for same day or overnight delivery. The time period in
which a response to any notice, demand or request must be given shall commence
on the date of actual receipt (or deemed receipt in the case of rejection or
refusal to accept delivery pursuant to the following sentence) by the addressee
thereof. Rejection or other refusal to accept delivery or inability to deliver
because of changed address of which no notice has been given, shall constitute
receipt of the notice, demand or request sent. Any such notice, demand or
request shall be sent to the respective addresses set forth below:
TRANSFERORS: Place Properties, LP
Place Mezz Borrower, LLC
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 0000
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
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With a copy to: Xxxxx, Xxxxxxxx & Xxxxxxx, XXX
Xxxxx 0000, Xxxxxxxxx XX
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Xx.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
TRANSFEREE: Education Realty Operating Partnership, LP
c/o Education Realty Trust, Inc.
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to: Xxxxxx, Xxxxxxx & Xxxxxx, LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
To Escrow Agent: Chicago Title Insurance Company
0000 Xxxxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
By notice in accordance with the above to all parties shown above, the
parties hereto may designate from time to time a change of address for all such
notices by providing to all other applicable parties at least ten (10) days
prior notice of the changed address.
11. SUCCESSORS AND ASSIGNS. This Escrow Agreement shall be binding upon and
inure to the benefit of the parties' respective successors and assigns.
12. GOVERNING LAW. This Escrow Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
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13. COUNTERPARTS. This Escrow Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
14. TIME OF ESSENCE. Time is of the essence of this Escrow Agreement.
15. ENTIRE AGREEMENT. This Escrow Agreement contains the entire agreement
and understanding of the parties relating to the subject matter hereof and
supersedes all prior representations, agreements, and understandings, oral or
written, relating to such subject matter. In the event of any conflict or
inconsistency between the terms of this Escrow Agreement and any terms of the
Contribution Agreement, the terms of this Escrow Agreement shall control. Each
section, part, term, or provision of this Escrow Agreement shall be considered
severable, and if for any reason any section, part, term, or provision herein is
determined to be invalid and contrary to or in conflict with any existing or
future law or regulation by a court or governmental agency having valid
jurisdiction, such determination shall not impair the operation of or have any
other affect on other sections, parts, terms, or provisions of this Escrow
Agreement as may remain otherwise intelligible, and the latter shall continue to
be given full force and effect and bind the parties hereto, and said invalid
sections, parts, terms, or provisions shall not be deemed to be a part of this
Escrow Agreement.
16. CAPTIONS. Captions, titles to sections, and paragraph headings used
herein are for convenience of reference and shall not be deemed to limit or
alter any provision hereof.
17. ARBITRATION. Any dispute between the Transferors and Transferee with
respect to this Agreement shall be subject to binding arbitration in accordance
with Article 25 of that certain Master Lease Agreement dated of even date
herewith made by and between Transferee, as Landlord, and Place Portfolio
Lessee, LLC, as Tenant.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be executed as of the date set forth above.
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TRANSFERORS:
PLACE PROPERTIES, L.P., a Tennessee
limited partnership
By: Place Collegiate Properties Co., a
Tennessee corporation, its general
partner
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, President
PLACE MEZZ BORROWER, LLC, a Delaware
limited liability company
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
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Title: Manager
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TRANSFEREE:
EDUCATION REALTY OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership
By: Education Realty OP GP, Inc., its
General Partner
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
----------------------------------
Title: President
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ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY
By: /s/ Xxxx Xxxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxxx
----------------------------------
Title: Senior Transaction Coordinator
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