EXHIBIT 10.10
CONTRIBUTION AGREEMENT
BY AND AMONG
XXXXX & X'XXXX EDUCATIONAL PROPERTIES, LLC
a Tennessee limited liability company,
As the Contributor,
XXXXX & O'HARA, INC.,
a Tennessee corporation,
XXXXXX X. XXXXXX,
XXXXX X. XXXXXXXX,
XXXXXXX X. XXXXX,
XXXXXXX X. XXXXXX
and
XXXXXXX X. XXXXXX
As the Designees,
AND
EDUCATION REALTY OPERATING PARTNERSHIP, LP,
a Delaware limited partnership,
as the Acquirer
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made as of the 20th
day of September, 2004 by and among XXXXX & O'HARA EDUCATIONAL PROPERTIES, LLC.,
a Tennessee limited liability company ("Contributor"); XXXXX & X'XXXX, INC., a
Tennessee corporation, XXXXXX X. XXXXXX, XXXXX X. XXXXXXXX, XXXXXXX X. XXXXX,
XXXXXXX X. XXXXXX and XXXXXXX X. XXXXXX (sometimes hereinafter individually
referred to as a "Designee" and collectively referred to as the "Designees");
and EDUCATION REALTY OPERATING PARTNERSHIP, LP, a Delaware limited partnership
(the "Acquirer").
RECITALS
A. Contributor owns 50% of the property known as The Gables
Apartments located in Bowling Green, Kentucky and including all of the following
described property (collectively the "Property"):
(1) The real property located in Bowling Xxxxx, Xxxxxx
County, Kentucky. and being more particularly described on Exhibit A attached
hereto and incorporated herein by this reference, together with any rights and
appurtenances pertaining to such real estate, including, without limitation, any
and all rights of Contributor and The Gables, LLC, a Kentucky limited liability
company ("The Gables, LLC" together with Contributor being the "Seller") , if
any, in and to adjacent roads, alleys, easements, streets and ways
(collectively, the "Land"),
(2) All improvements, structures and fixtures placed,
constructed or installed on the Land (collectively the "Improvements"),
(3) All (A) mechanical systems and the fixtures and
equipment related thereto comprising part of or attached to or located upon the
Improvements, including, but not limited to, electrical systems, plumbing
systems, heating systems, air conditioning systems, (B) carpets, drapes, blinds
and other furnishings owned by Seller and comprising a part of or attached to or
located upon the Improvements, (C) appliances owned by Seller; (D) maintenance
equipment, supplies and tools owned by Seller and used in connection with the
Improvements, and (E) other machinery, equipment, fixtures, supplies (including
marketing supplies) and personal property of every kind and character owned by
Seller and located in or on or used in connection with the Land or the
Improvements or the operations thereon (collectively the "Personal Property");
(4) Seller's interest in leases, lease commitments and
all other rental agreements (collectively, the "Leases") with tenants occupying
space situated in the Improvements or otherwise having rights with regard to use
of the Land or the Improvements, and all security deposits or like payments, if
any, paid by tenants in connection herewith;
(5) Seller's interest, to the extent assignable, in all
(A) brokerage or tenant locator contracts, (B) management agreements, cable or
subscription television agreements, (C) labor union contracts, (D) maintenance,
repair, service and pest control contracts (including but no limited to
janitorial, elevator and landscaping agreements), and (E) all other contracts
pursuant to which services or goods are provided to the Property (collectively,
the "Service Contracts");
(6) Seller's interest in all furniture, fixture and
equipment leases, to the extent the same are assignable by Seller (the
"Personalty Leases"); and
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(7) All intangible property owned or held by Seller or in
which Seller has an interest, if any, in connection with any of the Land or
Improvements or the operations thereon including, without limitation, Seller's
interest in all warranties, guaranties and bonds relating to the Land, the
Improvements or the Personal Property, to the extent same are assignable and all
site plans, surveys, plans and specifications (to the extent Seller owns and has
rights to transfer such property), floor plans, art work, brochures, tenant
histories in Seller's possession or in the possession of Seller's leasing and
management agents of the Property and which relate to the Land, the Improvements
or the Personal Property, and the right to the use thereof, including but not
limited to the Seller's rights under governmental permits or approvals, and the
right to the use of (without warranty as to exclusivity or otherwise) any names,
marks, trade marks, trade names and telephone numbers and listings employed in
connection with the Land or the Improvements or the operations thereon
(collectively, the "Intangible Property").
B. Acquirer desires to acquire, and the Contributor desire to
sell, all of its interest in the Property.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
THE CONTRIBUTION
1.1 Contribution of the Property. The Contributor agrees to
contribute and transfer a all if its interest in the Property (the "Transferred
Property") to the Acquirer (such contribution and transfer being the
"Contribution"), and the Acquirer agrees to accept the transfer of the
Transferred Property pursuant to the terms and conditions set forth in this
Agreement. Although the Property is encumbered by a deed of trust securing a
loan (the "Property Loan") as described in Section 1.1 of the Disclosure
Schedule attached hereto as Exhibit B (the "Disclosure Schedule"), the
Transferred Property shall be transferred to the Acquirer free and clear of any
other claim, lien, charge, security interest, mortgage, deed of trust,
encumbrance, purchase right or other right of any nature whatsoever of any third
party ("Liens").
1.2 Consideration. The total consideration (the "Consideration")
for which the Contributor agree to contribute and assign the Transferred
Property to the Acquirer, and which the Acquirer agrees to pay or deliver to the
Contributor (or the Contributor's designee for such payment and delivery),
subject to the terms of this Agreement, shall equal 50% of the difference
between $5,617,041 and the outstanding principal balance and accrued interest of
the Property Loan on the Closing Date (as hereinafter defined), as adjusted
pursuant to Section 1.5, and shall be comprised of (a) cash in the amount of
$489,686 and (b) the balance in units of limited partnership interest in the
Acquirer ("Units") having a per Unit value equal to the per share price at which
the common stock (the "Common Stock") of Education Realty Trust, Inc., a
Maryland corporation (the "REIT"), are 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. Contributor hereby directs the Acquirer
to pay, issue and distribute (as applicable) the Consideration on the Closing
Date to the Designees in such amounts set forth on Schedule I attached hereto.
No fractional Units will be issued as Consideration hereunder, but in lieu of
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issuing fractional Units, the value thereof shall be paid in cash. The
Contributor and Designees that obtain Units acknowledge that any certificates
evidencing the Units will bear appropriate legends indicating (i) that the Units
have not been registered under the Securities Act of 1933, as amended
("Securities Act"), and (ii) that the Acquirer's Agreement of Limited
Partnership (the "Acquirer's Partnership Agreement") will restrict the transfer
of the Units. The Contributor or any Designee (provided the Designee is an
accredited investor) that receives Units shall upon receipt of the Units become
a limited partner of the Acquirer and shall execute the Acquirer's Partnership
Agreement. Except as otherwise expressly set forth in this Agreement, the
Contributor acknowledges and agrees that once the Closing (as hereinafter
defined) occurs, the Contributor shall no longer hold any right, title or
interest in the Property (except through its ownership of the Acquirer).
1.3 Redemption Rights for Units. Each Unit shall be redeemable at
the option of the holder, in accordance with, but subject to the restrictions
contained in, the Acquirer's Partnership Agreement; provided, however, that such
redemption option may not be exercised prior to the first anniversary of the
Closing Date.
1.4 Tax Consequences to Contributor. To the extent the
consideration payable to the Contributor takes the form of cash, the parties
agree that the transactions contemplated by this Agreement shall constitute a
taxable sale of the Transferred Property as to the Contributor. Notwithstanding
the foregoing or anything to the contrary contained in this Agreement, 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 Transferred Property 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 Internal
Revenue Code of 1986, as amended (the "Code"), as the contribution of the
Transferred Property by the Contributor to the Acquirer, in exchange for the
Units.
1.5 Prorations and Utilities. Acquirer and Contributor shall
prorate (as of the Closing Date) rent, real estate and personal property lease
payments, real estate and personal property taxes, assessments and other similar
charges against real estate, plus all other income and expenses which are
normally prorated upon the sale of assets of a going concern. As to power and
utility charges, "final readings" as of the Closing Date shall be ordered from
the utilities, the cost of obtaining such "final readings," if any, to be paid
for equally by Acquirer and Contributor. Such prorations shall be based on the
actual number of days in the month or year as applicable. It is acknowledges
that Contributor owns 50% of the Property and therefore is entitled to or
obligated for 50% of all prorated amounts. The amount of the Consideration
payable to the Contributor will be adjusted to give effect to these prorations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations by Acquirer. The Acquirer hereby represents
and warrants to the Contributor that:
(a) Organization and Power. The Acquirer is duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, and has full right, power, and authority to enter into this Agreement
and to perform all of its obligations under this Agreement.
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The execution and delivery of this Agreement and the performance by the Acquirer
of its obligations hereunder have been duly authorized by all requisite action
of the Acquirer and require no further action or approval of the Acquirer's
partners or of any other individuals or entities in order to constitute this
Agreement as a binding and enforceable obligation of the Acquirer.
(b) Noncontravention. Neither the entry into nor the
performance of, or compliance with, this Agreement by the Acquirer has resulted,
or will result, in any violation of, or default under, or result in the
acceleration of, any obligation under any existing certificate of limited
partnership, partnership agreement, mortgage, indenture, lien agreement, note,
contract, permit, judgment, decree, order, restrictive covenant, statute, rule,
or regulation applicable to the Acquirer.
(c) Litigation. There is no action, suit, or proceeding,
pending or known to be threatened, against or affecting the Acquirer in any
court or before any arbitrator or before any federal, state, municipal, or other
governmental department, commission, board, bureau, agency or instrumentality
which (i) in any manner raises any question affecting the validity or
enforceability of this Agreement or any other agreement or instrument to which
the Acquirer is a party or by which it is bound and that is to be used in
connection with, or is contemplated by, this Agreement, (ii) could have material
and adverse effect on the business, financial position, or results of operations
(a "Material Adverse Effect") of the Acquirer, (iii) could materially and
adversely affect the ability of the Acquirer to perform its obligations
hereunder, or under any document to be delivered pursuant hereto.
(d) Units Validly Issued. 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"). The Designees shall each be
admitted as a limited partner of the Acquirer 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 Acquirer'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.
(e) Consents. Each consent, approval, authorization,
order, license, certificate, permit, registration, designation, or filing by or
with any governmental agency or body necessary for the execution, delivery, and
performance of this Agreement or the transactions contemplated hereby by the
Acquirer has been obtained or will be obtained on or before the Closing Date.
2.2 Representations by Contributor. The Contributor hereby
represents and warrants to the Acquirer the following:
(a) Organization and Power. The Contributor is a legal
entity, is duly formed, validly existing, and in good standing under the laws of
the jurisdiction of its formation. The Contributor has full right, power, and
authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement. The execution and delivery of this Agreement
and the performance by the Contributor of its obligations hereunder have been
duly authorized by all requisite action of the Contributor and require no
further action or approval of
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the Contributor's members, managers, officers, directors or shareholders or of
any other individuals or entities in order to constitute this Agreement as a
binding and enforceable obligation of the Contributor.
(b) Noncontravention. Neither the entry into nor the
performance of, or compliance with, this Agreement by the Contributor has
resulted, or will result, in any violation of, or default under, or result in
the acceleration of, any obligation under any of the regulations, mortgage
indenture, lien agreement, note, contract, permit, judgment, decree, order,
restrictive covenant, statute, rule, or regulation applicable to the Contributor
or the Property.
(c) Litigation. There is no action, suit, or proceeding,
pending or known to be threatened, against or affecting the Contributor or the
Property in any court or before any arbitrator or before any federal, state,
municipal, or other governmental department, commission, board, bureau, agency
or instrumentality which (i) in any manner raises any question affecting the
validity or enforceability of this Agreement, (ii) could have a Material Adverse
Effect with respect to the Contributor or the Property, (iii) could materially
and adversely affect the ability of the Contributor to perform its obligations
hereunder or under any document to be delivered pursuant hereto, or (iv) could
create a Lien on the Property, any part thereof, or any interest therein.
(d) Solvency. The Contributor has been and will be
solvent at all times prior to and immediately following the transfer of the
Property to the Acquirer. 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
Contributor's knowledge, threatened against the Contributor or the Property.
(e) Ownership of the Property. The Contributor owns a
fifty percent undivided interest in the Property as a tenant in common, free and
clear of any Liens of any nature other than the Property Loan and has full power
and authority to convey the Property, free and clear of any Liens other than the
Property Loan. Upon delivery of consideration for the Transferred Property, the
Acquirer will acquire good and valid title thereto, free and clear of any Liens
except the Property Loan. Except for those to be acquired by the Acquirer in
connection with this Agreement and that certain agreement between Acquirer and
The Gables, LLC to acquire a 50% undivided interest in the Property (the "Gables
Agreement"), there are no rights to purchase, subscriptions, warrants, options,
conversion rights, preemptive rights, agreements, instruments or similar
understandings of any kind outstanding (i) relating to any interest in the
Property, or (ii) to purchase, transfer or to otherwise acquire, or to in any
way encumber, any of the Property. The Contributor does not have any commitment
or legal obligation, absolute or contingent, to any other individual,
corporation, limited liability company, partnership, trust or other entity
("Person") other than the Acquirer to sell, sign, transfer or effect a sale of
any right, title or interest in or to the Property.
(f) No Consents. Except as shall have been obtained on or
before the Closing Date, and, for informational purposes, as set forth in
Section 2.2(f) of the Disclosure Schedule, no consent, approval, authorization,
order, license, certificate, permit, registration, designation, or filing by or
with any third party governmental agency or body is necessary for the execution,
delivery, and performance of this Agreement or the transactions contemplated
hereby by the Contributor.
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(g) Securities Law Matters.
(i) The Contributor is knowledgeable,
sophisticated and experienced in business and financial matters; the Contributor
has previously invested in securities similar to the Units and fully understands
the limitations on transfer imposed by the federal securities laws and as
described in this Agreement. The Contributor is able to bear the economic risk
of holding the Units for an indefinite period and is able to afford the complete
loss of its investment in the Units; the Contributor has received and reviewed
all information and documents about or pertaining to the REIT, the Acquirer, the
business and prospects of the REIT and the Acquirer and the issuance of the
Units as the Contributor 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 Acquirer, the business and prospects of the REIT and the Acquirer and the
Units which the Contributor deems necessary or desirable to evaluate the merits
and risks related to its investment in the Units and to conduct its own
independent valuation of the Units; and the Contributor understands and has
taken cognizance of all risk factors related to the purchase of the Units. The
Contributor is a sophisticated real estate investor. In acquiring the Units and
engaging in this transaction, the Contributor is not relying upon any
representations made to it by the Acquirer, or any of the officers, employees,
or agents of the Acquirer not contained herein. The Contributor is relying upon
its own independent analysis and assessment (including with respect to taxes),
and the advice of the Contributor's advisors (including tax advisors), and not
upon that of the Acquirer or any of the Acquirer's advisors or affiliates, for
purposes of evaluating, entering into, and consummating the transactions
contemplated by this Agreement. The Contributor represents and warrants that it
has reviewed and approved the form of the Acquirer's Partnership Agreement
attached hereto as Exhibit C.
(ii) The Contributor understands that neither the
Units nor the Common Stock issuable upon redemption of the Units 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 Units issuable to the Contributor (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 Contributor 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 Contributor may distribute the Units to those of its
members or successors that (1) have represented and warranted to the Acquirer 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) have executed the Acquirer's Partnership Agreement as
limited partners. The Contributor understands that any certificates evidencing
the Units will contain appropriate legends reflecting the requirement that the
Units not be resold without registration under such laws or the availability of
an exemption from such registration and that the Acquirer's Partnership
Agreement will restrict transfer of the Units.
(iii) The Contributor is an "accredited investor"
as that term is defined in Rule 501 of Regulation D under the Securities Act of
1933, as amended. The Contributor has previously provided the Acquirer with a
duly executed Accredited Investor Questionnaire. No event or circumstance has
occurred since delivery of such Questionnaire to make the statements contained
therein false or misleading.
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(h) No Brokers. The Contributor has not engaged the
services of any real estate agent, broker, finder or any other person or entity
for any brokerage or finder's fee, commission or other amount with respect to
the transactions described herein on account of any action by the Contributor.
The Contributor hereby agrees to indemnify and hold the Acquirer and its
employees, directors, members, partners, affiliates and agents harmless against
any claims, liabilities, damages or expenses arising out of a breach of the
foregoing. This indemnification shall survive Closing or any termination of this
Agreement.
(i) Title to the Property. The Contributor owns good and
marketable fee simple title of record to the Transferred Property identified in
the recitals hereto, free and clear of any Liens other than the deed of trust
securing the Property Loan, the lien for current year real estate taxes and
assessments not yet due or payable, and such recorded utility easements serving
the Property which do not materially and adversely affect the marketability of
title to the Property or the use of the Property.
(j) No Agreements to Sell. Except for this Agreement and
the Gables Agreement neither the Contributor nor any other owner of the Property
has made any agreement with, and will not enter into any agreement with, and has
no obligation (absolute or contingent) to, any other person or firm to sell,
transfer or in any way encumber the Property or to not sell the Property, or to
enter into any agreement with respect to a sale, transfer or encumbrance of or
put or call right with respect to the Property.
(k) Leases. Seller holds the lessor's interest under all
leases, licenses, tenancies, possession agreements and occupancy agreements with
the tenants of the Property (the "Leases"). A true and complete copy of all
Leases have been made available to the Acquirer; to the Contributor's knowledge,
such Leases are in full force and effect, except as indicated otherwise in
Section 2.2(k) the Disclosure Schedule, the Seller, as lessor under such Leases,
has not received any notice that it is in default of any of its obligations
under such Leases beyond any applicable grace period which has not been cured;
to the Contributor's knowledge, except as set forth in Section 2.2(k) of the
Disclosure Schedule, no tenant is in default under any Lease except to the
extent such default would not have a Material Adverse Effect with respect to the
Property; rent is being billed to the tenants in accordance with the Leases; no
tenant is entitled to "free" rent, rent concessions, rebates, rent abatements,
set-offs, or offsets against rent and no tenant under any such Lease claims a
right to any of the foregoing, except as set forth in Section 2.2(k) of the
Disclosure Schedule; the Contributor has received no written notice that any
tenant under any such Lease contests any rent or other charges billed to it,
except as set forth in Section 2.2(k) of the Disclosure Schedule; no assignment
of the Contributor's rights under any Lease is in effect on the date hereof
other than collateral assignments to secure mortgage indebtedness; and, except
as set forth in Section 2.2(k) of the Disclosure Schedule with respect to any
Leases entered into by Seller, no brokerage commissions will be due upon the
failure of any tenant under any such Lease to exercise any cancellation right
granted in its Lease or upon any extension or renewal of such Leases. To the
Contributor's knowledge, all material obligations of the lessor under the Leases
that have accrued to the date hereof have been performed or satisfied.
(l) Insurance. Contributor hereby agrees that from the
date hereof until Closing it will maintain in force, fire and extended coverage
insurance upon the Property and public liability insurance with respect to
damage or injury to persons or property occurring on the Property in such
amounts as is maintained by Contributor on the date of this Agreement.
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(m) Personal Property. Seller owns all of the tangible
personal property constituting "Fixtures and Personal Property" (as defined
below) which is used in and, individually or in the aggregate with other such
property, is material to the operation of the Property. "Fixtures and Personal
Property" shall mean all fixtures, furniture, furnishings, apparatus and
fittings, equipment, machinery, appliances, building supplies, tools, and other
items of personal property located on the Property and used in connection with
the operation or maintenance of the Property; excluding, however, all furniture,
furnishings, and other items of personal property owned by tenants. To the
Contributor's knowledge, except as set forth in Section 2.2(m) of the Disclosure
Schedule, such Fixtures and Personal Property are free and clear of all Liens.
All equipment, fixtures and personal property located at or on the Property
shall remain and not be removed prior to the Closing, except for equipment that
becomes obsolete or unusable, which may be replaced in the ordinary course of
business.
(n) Employees and Contracts. Except as set forth in
Section 2.2(n) of the Disclosure Schedule, (i) there are no contracts with
employees of the Contributor as of the date hereof, nor (ii) service or
maintenance contracts affecting the Property, in each case which are not
cancelable upon thirty (30) days notice or less or which are for a contract
amount greater than $100,000 per annum. True and correct copies of all service,
equipment, franchise, operating, management, parking, supply, utility and
maintenance agreements relating to the Property (the "Service Contracts") have
been made available to the Acquirer and the same are in full force and effect
and have not been modified or amended except in the ordinary course of the
business. To the Contributor's knowledge, no event of default exists (which
remains uncured) under any of the Service Contracts which would have a Material
Adverse Effect with respect to the Property or the operation of the Property. To
the Contributor's knowledge, there are no union contracts or similar agreements
between the Contributor and its employees. Except as set forth in Section 2.2(n)
of the Disclosure Schedule, no employee is entitled to receive annual
compensation (including bonus) from the Contributor in excess of $100,000.
(o) Loans. To the Contributor's knowledge, the Property
Loan and the documents entered into in connection therewith (collectively, the
"Loan Documents") are in full force and effect as of the date hereof. To the
Contributor'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 date hereof under any of the Loan Documents which would have
a Material Adverse Effect. True and correct copies of the existing Loan
Documents have been made available to the Acquirer.
(p) Taxes. To the Contributor's knowledge, the
transactions contemplated hereby will not result in any income tax liability to
the Acquirer, and no tax lien or other charge exists or will exist upon
consummation of the transactions contemplated hereby with respect to the
Property, except such tax liens for which the tax is not due or tax liens or
other charges which individually or in the aggregate would not have a Material
Adverse Effect with respect to the Property. The copies of the real property tax
bills for the Property for the current tax year which have been furnished or
made available to the Acquirer are true and correct copies of all of the tax
bills for such tax year actually received by the Contributor or the
Contributor's agents for the Property. No federal, state, local or foreign
taxing authority has asserted any tax deficiency or other assessment against the
Property.
(q) Zoning. The Contributor has not received any written
notice (which remains uncured) from any governmental authority stating that the
Property is currently violating
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any zoning, land use or other similar rules or ordinances in any material
respect that would reasonably be expected to have a Material Adverse Effect with
respect to the Property.
(r) Property Management Agreements. All of the property
management agreements for the Property are listed in Section 2.2(r) of the
Disclosure Schedule and are in full force and effect and to the knowledge of the
Contributor, no party to such management agreements is in default thereunder.
(s) No Agreements. Except for the Gables Agreement or as
set forth in Section 2.2(s) of the Disclosure Schedule, the Property is not
subject to any outstanding agreement of sale or ground lease, option to purchase
or other right of any third party to acquire any interest therein (other than
under the Leases).
(t) Environmental Conditions. The Contributor has not
received any written notice of the presence or release of any substance that is
regulated under any Environmental Laws as a pollutant, contaminant or toxic,
radioactive or otherwise hazardous substance, including petroleum, its
derivatives or by-products and other hydrocarbons (collectively and
individually, "Hazardous Substances") that would cause the Property to be in
violation of any applicable Environmental Laws and that remains uncured, nor has
the Contributor received written notice that the Property is not in compliance
with applicable Environmental Laws. There are no Hazardous Substances located
at, on or under the Property and no Hazardous Substances have leaked, escaped or
been discharged, emitted or otherwise released from the Property onto any
adjoining properties. For the purposes of this Section, "Environmental Laws"
means any and all federal, state and local statutes, laws, regulations and rules
in effect on the date hereof relating to the protection of the environment or to
the use, transportation and disposal of Hazardous Substances.
(u) Compliance With Laws. The Contributor has not
received any written or other notice of any violation of any applicable zoning,
building or safety code, rule, regulation or ordinance, or of any employment,
environmental, wetlands or other regulatory law, order, regulation or other
requirement, including without limitation the Americans with Disabilities Act,
or any restrictive covenants or other easements, encumbrances or agreements,
relating to the Property, which remains uncured and would have a Material
Adverse Effect with respect to the Property.
(v) Condemnation and Moratoria. There are (i) no pending
or threatened condemnation or eminent domain proceedings, or negotiations for
purchase in lieu of condemnation, which affect or would affect the Property;
(ii) no pending or threatened moratoria on utility or public water or sewer
hook-ups or the issuance of permits, licenses or other inspections or approvals
necessary in connection with the construction or reconstruction of improvements
which affect or would affect any portion of the Property; and (iii) no pending
or threatened proceeding to change adversely the existing zoning classification
as to any portion of the Property. No portion of the Property is a designated
historic property or located within a designated historic area or district, and
there are no graveyards or burial grounds located within the Property. The
Contributor has no actual knowledge of any change or proposed change in the
route, grade or width of or otherwise affecting, any street or road adjacent to
or serving the Property which could reasonably be expected to have a Material
Adverse Effect with respect to the Property or the operation of the Property.
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(q) Condition of Improvements. There is no material
defect in the condition of the Property, including the improvements thereon, the
roof, foundation, load-bearing walls or other structural elements thereof, and
the mechanical, electrical, plumbing and safety systems therein. No material
damage to the Property has occurred from casualty or other cause, nor is there
any soil condition of any nature that will not support all of the improvements
thereon without the need for unusual or new subsurface excavations, fill,
footings, caissons or other installations. All utilities necessary for the
current operation of the Property are available to the Property.
(r) Patriot Act Representations. Neither the Contributor,
nor to the knowledge of the Contributor, any direct or indirect owner of the
Contributor, (i) are included on any Government List, (ii) are Persons who have
been determined by competent authority to be subject to the prohibitions
contained in the Presidential Executive Order No. 13224 or any other similar
prohibitions contained in the rules and regulations of the OFAC or in any
enabling legislation or other Presidential Executive Orders in respect thereof,
(iii) have been indicted or convicted of any Patriot Act Offenses, or (iv) are
currently under investigation by any governmental authority for alleged criminal
activity. For purposes of this Agreement, (i) "Government List" means (A) the
Specially Designated Nationals and Blocked Persons List maintained by OFAC, (B)
any other list of terrorists, terrorist organizations or narcotics traffickers
maintained pursuant to any of the Rules and Regulations of OFAC, or (C) any
similar list maintained by the United States Department of State, the United
States Department of Commerce or any other governmental authority or pursuant to
any Executive Order of the President of the United States of America; (ii)
"OFAC" means the Office of Foreign Asset Control, U.S. Department of the
Treasury, (iii) "Patriot Act" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and
corresponding provisions of future laws, and (iv) "Patriot Act Offense" means
any violation of the criminal laws of the United States of America or of any of
the several states, or that would be a criminal violation if committed within
the jurisdiction of the United States of America or any of the several states,
relating to terrorism or the laundering of monetary instruments, including any
offense under (A) the criminal laws against terrorism, (B) the criminal laws
against money laundering, (C) the Bank Secrecy Act, as amended, (D) the Money
Laundering Control Act of 1986, as amended, or (E) the Patriot Act and also
includes the crimes of conspiracy to commit, or aiding and abetting another to
commit any of the foregoing.
(s) FIRPTA. Contributor is not a "foreign person" within
the meaning of the Code, Sections 1445 and 7701.
2.3 Representations and Warranties of Designees. Each of the
Designees, as to itself only, makes the representations and warranties contained
in Section 2.2(g) that are made by the Contributor as if all references to
"Contributor" in Section 2.2(g) referred to "Designee."
ARTICLE III
COVENANTS AND INDEMNITIES
3.1 Covenants Pending Closing.
(a) From the date hereof until the Closing, the
Contributor shall not:
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(i) Sell, transfer (or agree to sell or
transfer) or otherwise dispose of, or cause the sale, transfer or disposition of
(or agree to do any of the foregoing) all or any portion of the Property; or
(ii) Mortgage, pledge or encumber (or permit to
become encumbered) all or any portion of the Property.
(b) From the date hereof through the Closing, the
Contributor shall, conduct and operate the Property in the ordinary course of
business, consistent with past practice, and shall, to the extent within its
control, not, without the prior written consent of Acquirer:
(i) Enter into any material transaction not in
the ordinary course of business of the operation of the Property:
(ii) Mortgage, pledge or encumber (or permit to
become encumbered) the Property, except (A) liens for taxes not due,
(B) purchase money security interests in the ordinary course of
business, and (C) mechanics' liens being disputed by Contributor in
good faith and by appropriate proceeding in the ordinary course of
business (provided such mechanics liens are released prior to or on the
Closing Date at no cost to the Acquirer);
(iv) Amend, modify or terminate any Lease,
contract or other instruments relating to the Property to which such
entity is a party, except in the ordinary course of business consistent
with past practice;
(v) Cause or permit the change to the existing
use of the Property;
(vi) Cause or permit any entity to enter into any
new Lease or terminate any existing Lease except in the ordinary course
of business consistent with past practice;
(vii) Cause or take any action that would render
any of the representations or warranties regarding the Property as set
forth herein untrue in any material respect;
(viii) Terminate or amend any existing insurance
policies affecting the Property that results in a material reduction in
insurance coverage for the Property; or
(ix) Knowingly cause or permit the entity to
violate or fail to use commercially reasonable efforts to cure any
violation of any applicable laws;
(c) From the date hereof until the Closing Date, the
Contributor will afford to the officers and authorized representatives of the
Acquirer access to all of the Contributor's books and records and will furnish
the Acquirer with such additional financial and operating data and other
information as to the business and properties of the Contributor as the Acquirer
may from time to time reasonably request.
(d) Notwithstanding anything to the contrary contained
herein, any failure by an Contributor to comply with or fulfill the covenants
contained in this Section 3.1 shall not constitute an indemnifiable claim under
Section 3.4 of this Agreement, but shall constitute an unfulfilled condition
precedent pursuant to Section 5.1, provided such failure is identified to or
otherwise becomes known to the Acquirer prior to Closing.
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3.2 Tax Covenants.
(a) From the date hereof and subsequent to the Closing,
the Contributor and the Acquirer shall provide each other with such cooperation
and information relating to the Property as the parties reasonably may request
in (i) filing any tax return, amended tax return or claim for tax refund, (ii)
determining any liability for taxes or a right to a tax refund, or (iii)
conducting or defending any proceeding in respect of taxes. The Contributor
shall promptly notify the Acquirer in writing upon receipt by such Contributor
of notice of any pending or threatened federal, state, local or foreign tax
audits or assessments relating to the income, properties or operations of the
Property. Each of the Acquirer and the Contributor may participate at its own
expense in the prosecution of any claim or audit with respect to taxes
attributable to any taxable period ending on or before the Closing Date,
provided, that the Contributor shall have the right to control the conduct of
any such audit or proceeding or portion thereof for which the Contributor (or
its owners) has acknowledged liability (except as a partner of the Acquirer) for
the payment of any additional tax liability, and the Acquirer shall have the
right to control any other audits and proceedings. Notwithstanding the
foregoing, neither the Acquirer nor the Contributor may settle or otherwise
resolve any such claim, suit or proceeding which could have an adverse tax
effect on the other party or its owners without the consent of the other party,
such consent not to be unreasonably withheld. The Contributor and the Acquirer
shall retain all tax returns, schedules and work papers, and all material
records and other documents relating thereto, until the expiration of the
statute of limitations (and, to the extent notified by any party, any extensions
thereof) of the taxable years to which such tax returns and other documents
relate to and until the final determination of any tax in respect of such years.
(b) With respect to the Property, the Acquirer and the
Contributor agree that the Acquirer shall use the "traditional method" with
"curative allocations", as described in Regulations Section 1.704-3(c), to make
allocations of taxable income and loss to Contributor and the Designees with
respect to the Property.
(c) (i) Subject to the exceptions set forth in
Section 3.2(c)(ii), the Acquirer covenants, agrees and guarantees that for a
period of five (5) years from the Closing Date, the Acquirer will not transfer
or dispose of or permit or suffer the transfer or disposition of any of its
interest in the Property, directly or indirectly, voluntarily or involuntarily,
by operation of law, by foreclosure or otherwise (a "Disposition") unless the
Acquirer pays the Designees the Tax Damages Amount (as defined below), if any,
resulting from such Disposition. A Disposition of an interest in the Property
shall include any event or occurrence in which income or gain is recognized
pursuant to, or as a result of, Section 704(c) of the Code directly or
indirectly by the Designees in excess of the income or gain allocable directly
or indirectly to the Designees for book purposes under Section 704(b) of the
Code in accordance with the applicable statutes, regulations, and rules in
effect on the date of this Agreement, including, but not limited to any
voluntary or involuntary sale (including a foreclosure or transfer in lieu of
foreclosure), assignment, transfer, exchange, contribution, merger,
consolidation, distribution or other disposition or conveyance of all or any
portion of, or of all or any portion of any direct or indirect interest in, the
Property. Subject to the exceptions set forth in Section 3.2(c)(ii), it shall
also include income or gain allocable directly or indirectly to the Designees
due to reduction by the Acquirer in the Designees' direct or indirect share of
Non-Recourse Indebtedness (as defined in Treasury Regulation Section
1.704-2(b)(3)) under Section 731 of the Code, whether direct or indirect,
voluntary or involuntary, by operation of law, by foreclosure or otherwise to an
amount less than specified in Section 3.2(d).
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(ii) The restrictions on a Disposition under
Section 3.2(c)(i), including the requirement not to change the Designees' direct
or indirect share of Non-Recourse Indebtedness under Section 731 of the Code,
shall not apply to events outside of the control of the Acquirer, the general
partner of the Acquirer and their respective affiliates ("Non-Control Events"),
such as a Disposition pursuant to a condemnation, eminent domain proceeding or
other involuntary conversion. However, without limitation, Non-Control Events
shall not include:
(A) financial inability to pay or
perform any obligation;
(B) a bankruptcy, insolvency,
receivership or similar proceeding, or any Disposition
resulting therefrom or any assignment for the benefit of
creditors; or
(C) a foreclosure.
(iii) The Acquirer shall be entitled to exchange
the Property in an exchange qualifying under Code Section 1031 provided that no
gain is recognized for federal or state income tax purposes in or as a result of
the exchange. Nothing in this Section 3.2(c) shall prevent the Acquirer from (A)
pledging or encumbering any of the Property or (B) assigning, transferring or
otherwise disposing of the Property, as applicable to a subsidiary 100% of the
beneficial ownership interests of which is owned by the Acquirer as long as such
transfer does not result in the allocation of taxable income or gain to the
Contributor under Code Section 704(c).
(d) Subject to future changes in applicable law or an
adverse determination by applicable tax authorities, so long as the Designees
hold Units constituting at least twenty five percent (25%) of the Units received
by all Designees on account of the Contribution, the Acquirer shall maintain at
all times during the term of this Agreement, Non-Recourse Indebtedness, without
any prepayment or other reduction, in an amount so that the Designees' allocable
share from the Acquirer of all "excess non-recourse liability" under Treasury
Regulation Section 1.752-3(c) shall be no less than the Designees' aggregate
deficit capital account in the Acquirer as of the date of the Contribution.
(e) (i) If there is a Disposition described in
3.2(c) of this Agreement which requires payment of the Tax Damages Amount (a
"Tax Event Disposition"), the Acquirer shall pay to the Contributor an amount
(the "Tax Damages Amount") which shall be equal to the sum of X plus Y below.
(A) X shall be equal to the Tax Amount
(as determined below). The Tax Amount determined as follows:
(1) The "Tax Amount" shall
equal, as to the Contributor, the amount determined
by multiplying the difference between (a) the "Gain
Amount" with respect to the Property allocable to
such Designee reduced by (b) the cumulative losses,
if any, previously allocated to such Designee by the
Acquirer with respect to the Units received in the
Contribution times (c) the actual combined federal,
state and local income tax rate applicable to such
income or gain (taking into account the amount
13
and character of the income and gain) for the taxable
year of the Designee in which the Disposition occurs
and reducing the resulting product by (d) the amount
of any credits, if any, allocated to such Designee.
(2) The "Gain Amount" shall
equal the sum of the "Deferred Gain Amount" plus the
"Section 752 Gain Amount."
(3) The "Deferred Gain Amount"
shall equal the taxable gain recognized by the
Acquirer upon a Tax Event Disposition to be allocated
directly or indirectly to the Designee under Section
704(c) of the Code with respect to the Property
reduced by any gain resulting from the Designee's
prior direct or indirect voluntary or involuntary
disposition of Units.
(4) The "Section 752 Gain
Amount" shall equal the amount of taxable gain, if
any, recognized by the Designee under Section 752 and
Section 731 of the Code as a direct result of the
reduction in the amount of the Non-Recourse
Indebtedness resulting from the Designee's prior
direct or indirect voluntary or involuntary
disposition of Units.
(B) Y shall be the reasonable expenses
for the Designee associated with determining the Tax Amount,
including, without limitation, attorney's and accountant's
fees.
(ii) The Acquirer shall notify the Designees in
writing of a Tax Event Disposition within thirty (30) days after such Tax Event
Disposition (such thirtieth day of such notice period being herein referred to
as the "Notice Date"). On or before January 30 of the year following the year in
which the Tax Event Disposition occurs, the Designee shall notify the Acquirer
of the Designee's adjusted tax basis in such Designee's interest in the Acquirer
as of the last day of the calendar year of the Tax Event Disposition together
with such other tax information the Acquirer may reasonably request in
connection with the computation of the Tax Damages Amount (the "Designee's
Computational Information"). The Tax Damages Amount shall be paid by the
Acquirer to the Contributor within ten (10) days after receipt of the Designee's
Computational Information required to compute the Tax Damages amount. Any late
payment of such Tax Damages Amount shall bear interest at a rate equal to the
lesser of (A) 12% per annum, compounded daily, or (B) the highest rate permitted
by applicable law.
(iii) Collection of the Tax Damages Amount (and
any accrued interest thereon) shall be the Designees' sole and exclusive remedy
with respect to a Tax Event Disposition.
(iv) Determination of liability with respect to
the Tax Amount shall be fixed upon the expiration of the statute of limitations
for all taxable years covered by the five-year lockup. The obligation to pay the
Tax Damages Amount will continue until the expiration of the statute of
limitations for collection of the Tax Damages Amount.
14
(f) This Section 3.2 shall also be applicable to each
Designee and each Designee shall be entitled to the rights of and bound by the
obligations of a Contributor under this Section 3.2. All references to
"Contributor" contained in this Section 3.2 shall be deemed to also refer to a
"Designee". Notwithstanding the foregoing, Section 3.2(d) shall no longer be
applicable at such time that one or more Designees have transferred 75% or more
of the Units received by all of the Designees pursuant to the Contribution.
3.3 Financial Records.
(a) The Contributor acknowledges that Acquirer may be
required to comply with certain acquisition audit or disclosure requirements
pursuant to applicable regulations of the Securities Exchange Commission ("SEC")
in connection with the Public Offering. As such, Acquirer may be required to
file with the SEC audited financial statements of the Property and/or pro forma
financial statements giving effect to the acquisition of the Property.
Accordingly, the Contributor agrees to cooperate and make available to Acquirer
such records as may be necessary to permit Acquirer to comply with SEC
requirements.
(b) At the Closing, the Contributor agrees to deliver to
Acquirer the most recent audited financial statements of the Property, if any,
and any more current unaudited balance sheets and income statements for the
Property for the current fiscal year through the Closing Date and for the
comparable portion of the prior fiscal year.
(c) Subsequent to the Closing, the Contributor agrees to
cooperate with Acquirer's independent auditors to provide access to financial
records and accounting personnel that may be required to permit the preparation
and audit of financial statements of the Property for the required periods
pursuant to applicable SEC regulations. This provision shall survive the
Closing.
3.4 Contributor's Indemnity. The Contributor hereby agrees to
indemnify and hold each of the Acquirer, the REIT, and each of their respective
employees, directors, members, partners, affiliates and agents (each of which is
an "Indemnified Acquirer Party") harmless of and from all liabilities, losses,
damages, costs, and expenses (including reasonable attorneys' fees)
(collectively, "Losses") which the Indemnified Acquirer Party may suffer or
incur by reason of (a) any breach of the Contributor's representations or
warranties contained in Section 2.2 of this Agreement, (b) any act or cause of
action occurring or accruing prior to the Closing Date and arising from the
ownership of the Property prior to the Closing Date, and (c) the ownership or
operation of the Property and relating to the period prior to the Closing Date,
including, without limitation, actions or claims relating to damage to property
or injury to or death of any person occurring or arising during the period prior
to the Closing Date, or any claims for any debts or obligations occurring on or
about or in connection with the Property or any portion thereof or with respect
to the Property' operations at any time prior to the Closing Date.
3.5 Acquirer's Indemnity. The Acquirer agrees to indemnify and
hold the Contributor, and the Contributor's employees, directors, members,
partners, affiliates and agents (each of which is an "Indemnified Contributor
Party") harmless of and from all Losses which the Indemnified Contributor Party
may suffer or incur by reason of (a) any breach of the Acquirer's
representations or warranties contained in Section 2.1 of this Agreement, (b)
any act or cause of action occurring or accruing on or after the Closing Date
and arising from the ownership or the
15
operation of the Property on or after the Closing Date, and (c) the ownership or
operation of the Property and relating to the period on or after the Closing
Date, including, without limitation, actions or claims relating to damage to
property or injury to or death of any person occurring or arising during the
period on or after the Closing Date, or any claims for any debts or obligations
occurring on or about or in connection with the Property or any portion thereof
or with respect to the Property' operations at any time on or after the Closing
Date.
ARTICLE IV
RELEASES AND WAIVERS
Each of the releases and waivers enumerated in this Article 4 shall
become effective only upon the Closing.
4.1 General Release of Acquirer.
As of the Closing, the Contributor irrevocably waives, releases and
forever discharges the Acquirer and the Acquirer's affiliates, partners, agents,
attorneys, successors and assigns of and from, any and all charges, complaints,
claims, liabilities, damages, actions, causes of action, losses and costs of any
nature whatsoever (collectively, "Contributor Claims"), known or unknown,
suspected or unsuspected, arising out of or relating to any of the Acquirer, the
Property or any other matter which exists at the Closing, except for Contributor
Claims arising from the breach of any representation, warranty, covenant or
obligation by the Acquirer under this Agreement or any agreement contemplated
hereby.
4.2 General Release of Contributor.
As of the Closing, the Acquirer irrevocably waives, releases and
forever discharges the Contributor and the Contributor's agents, attorneys,
successors and assigns of and from, any and all charges, complaints, claims,
liabilities, damages, actions, causes of action, losses and costs of any nature
whatsoever (collectively, "Acquirer Claims"), known or unknown, suspected or
unsuspected, arising out of or relating to any of the Property or any other
matter which exists at the Closing, except for Acquirer Claims arising from the
breach of any representation, warranty, covenant, or obligation by the
Contributor under this Agreement or any agreement contemplated hereby.
ARTICLE V
CONDITIONS PRECEDENT TO THE CLOSING
5.1 Conditions to Acquirer's Obligations. In addition to any other
conditions set forth in this Agreement, the Acquirer's obligation to consummate
the Closing is subject to the timely satisfaction of each and every one of the
conditions and requirements set forth in this Section 5.1, all of which shall be
conditions precedent to the Acquirer's obligations under this Agreement.
(a) Contributor's Obligations. The Contributor shall have
performed all obligations of the Contributor hereunder which are to be performed
prior to Closing, and shall have delivered or caused to be delivered to the
Acquirer, all of the documents and other information required of the Contributor
pursuant to Section 6.2.
16
(b) Contributor's Representations and Warranties. The
Contributor's representations and warranties set forth in Section 2.2 shall be
true and correct as if made again on the Closing Date.
(c) No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or other order issued
by a court of competent jurisdiction restraining or prohibiting the consummation
of the transactions contemplated hereby.
(d) Third Party Consents. To the extent required by the
Loan Documents, the Acquirer shall have obtained the consent of the lender of
the Property Loan (the "Property Lender") to the Acquirer's acquisition of the
Property.
(e) Completion of Public Offering. The Public Offering
shall have been completed.
(f) Title Policies. Acquirer shall have received updated
title policies for the Property as of the Closing Date satisfactory to the
Acquirer.
(g) Closing of Gables Agreement Transactions. The closing
of the acquisition by Acquirer (or its affiliate) of the transactions
contemplated by the Gables Agreement.
5.2 Conditions to Contributor's Obligations. In addition to any
other conditions set forth in this Agreement, the Contributor's obligation to
consummate the Closing is subject to the timely satisfaction of each and every
one of the conditions and requirements set forth in this Section 5.2, all of
which shall be conditions precedent to the Contributor's obligations under this
Agreement.
(a) Acquirer's Obligations. The Acquirer shall have
performed all obligations of the Acquirer hereunder which are to be performed
prior to Closing, and shall have delivered or caused to be delivered to the
Contributor, all of the documents and other information required of the Acquirer
pursuant to Section 6.3.
(b) Acquirer's Representations and Warranties. The
Acquirer's representations and warranties set forth in Section 2.1 shall be true
and correct as if made again on the Closing Date.
(c) Completion of Public Offering. The Public Offering
shall have been completed.
ARTICLE VI
CLOSING AND CLOSING DOCUMENTS
6.1 Closing. The consummation and closing (the "Closing") of the
transactions contemplated under this Agreement shall take place at 10:00 a.m. at
the offices of Xxxxxx, Xxxxxxx & Xxxxxx, LLP in Atlanta, Georgia, or such other
place as is mutually agreeable to the parties, on the day the Acquirer receives
the proceeds from the Public Offering from the underwriter(s); provided,
however, that this Agreement shall terminate if Closing does not occur prior to
March 31, 2005.
17
6.2 Contributor's Deliveries. At the Closing, the Contributor
shall deliver the following to the Acquirer in addition to all other items
required to be delivered to the Acquirer by the Contributor:
(a) Special Warranty Deed. The Contributor shall have
executed and delivered a special warranty deed, in substantially the form of
Exhibit D attached hereto, granting and conveying to the Acquirer good and
indefeasible title to the Transferred Property, free and clear of all Liens
other than the Property Loan;
(b) Xxxx of Sale. A Xxxx of Sale and Blanket Assignment
conveying and assigning to Acquirer or its permitted assignee all of the
Personal Property, the Leases, the Service Contracts, the Personalty Leases and
the Intangible Property, free and clear of any liens or encumbrances in the form
of Exhibit E attached hereto;
(c) Execution of Acquirer's Partnership Agreement.
Signature pages of the Acquirer's Partnership Agreement (which Acquirer's
Partnership Agreement shall be in substantially the form attached hereto as
Exhibit C) duly executed by the Contributor (or its Designee) that receives
Units pursuant to Section 1.2, as limited partner;
(d) FIRPTA Certificate. An affidavit from the Contributor
certifying pursuant to Section 1445 of the Internal Revenue Code that the
Contributor is not a foreign corporation, foreign partnership, foreign trust,
foreign estate or foreign person (as those terms are defined in the Internal
Revenue Code and the Income Tax Regulations promulgated thereunder);
(e) Books and Records. All books and records, title
insurance policies, leases, lease files, contracts, stock certificates, original
promissory notes, another indicia of ownership with respect to the Property
which are in the Contributor's possession or which can be obtained through the
Contributor's reasonable efforts;
(f) Evidence of Authority. Evidence acceptable to
Acquirer and the title company assisting with the closing of the transaction
(the "Title Company"), authorizing the consummation by Seller of the purchase
and sale transaction contemplated hereby and the execution and delivery of the
closing documents on behalf of Seller;
(g) Form 1099-S. An executed copy of Internal Revenue
Service Form 1099 as required by the Tax Reform Act of 1986, and all regulations
applicable thereto;
(h) Affidavit. Such affidavit as the Title Company shall
require to issue its Owner's Policy of Title Insurance without exception for
mechanic's or materialmen's liens or rights of parties in possession except for
tenants; and
(i) Other Documents. Any other document or instrument
reasonably requested by the Acquirer or required hereby. Upon request of the
Acquirer, the Contributor shall provide a certified copy of all appropriate
corporate actions executing the execution, delivery and performance by the
Contributor of this Agreement.
6.3 Acquirer's Deliveries. At the Closing, the Acquirer shall
deliver the following:
(a) Consideration. The Consideration. If the Units are
certificated, certificates representing Units duly issued by the Acquirer in the
name of each of the Designees as of the
18
Closing Date representing the Units to which each such Designee is entitled
pursuant to Section 1.2 of this Agreement.
(b) Executed Acquirer's Partnership Agreement. The fully
executed Acquirer's Partnership Agreement, with the original duly executed
signature of Education Realty OP GP, Inc., a Delaware corporation which is the
wholly-owned subsidiary of the REIT, as general partner, and original or
photostatic copies of the signatures of all limited partners.
(c) Other Documents. Any other document or instrument
reasonably requested by the Contributor or required hereby.
6.4 Fees and Expenses; Closing Costs. The Acquirer shall pay any
documentary transfer taxes, escrow charges, title commitment fees, insurance
premiums and recording taxes and fees and expenses incurred by them in
connection with the transactions contemplated by this Agreement; provided
however, that the Contributor shall pay its own legal fees and expenses as well
as the cost associated with the title policies referenced in Section 5.1(f).
ARTICLE VII
MISCELLANEOUS
7.1 Notices. Any notice provided for by this Agreement and any
other notice, demand, or communication required hereunder shall be in writing by
either (i) personal delivery (including recognized overnight delivery service),
(ii) confirmed facsimile transmission or (iii) certified or registered mail,
postage prepaid, with return receipt requested. All notices shall be addressed
as follows:
Acquirer:
Education Realty Operating Partnership, LP
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Fax No.: (000)000-0000
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, LLP
0000 Xxxxxxxxx Xxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
Contributor:
000 Xxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx
Attention: Xxxx X. Xxxxx
Fax No.: (000) 000-0000
19
To the Designees at the address set forth for the Designees on
Schedule I attached hereto.
Any address or name specified above may be changed by a notice given by the
addressee to the other party. Any notice, demand or other communication shall be
deemed given and effective as of the date of delivery. The inability to deliver
because of changed address of which no notice was given, or rejection or other
refusal to accept any notice, demand or other communication, shall be deemed to
be receipt of the notice, demand or other communication as of the date of such
attempt to deliver or rejection or refusal to accept.
7.2 Entire Agreement; Modifications and Waivers; Cumulative
Remedies. This Agreement supersedes any existing letter of intent between the
parties, constitutes the entire agreement among the parties hereto and may not
be modified or amended except by instrument in writing signed by the parties
hereto, and no provisions or conditions may be waived other than by a writing
signed by the party waiving such provisions or conditions.
No delay or omission in the exercise of any right or remedy accruing to
Seller or Buyer upon any breach under this Agreement shall impair such right or
remedy or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by the Contributor or the Acquirer 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. All rights, powers, options, or
remedies afforded to the Contributor or the Acquirer either hereunder or by law
shall be cumulative and not alternative, and the exercise of one right, power,
option, or remedy shall not bar other rights, powers, options, or remedies
allowed herein or by law, unless expressly provided to the contrary herein.
7.3 Exhibits. All exhibits referred to in this Agreement and
attached hereto are hereby incorporated in this Agreement by reference.
7.4 Successors and Assigns. This Agreement may not be assigned by
any party without the prior approval of the other parties hereto, except that
the Acquirer may assign its rights and obligations to an affiliate. This
Agreement shall be binding upon, and inure to the benefit of, the Contributor,
the Acquirer, and their respective legal representatives, successors, and
permitted assigns.
7.5 Article Headings. Article headings and article and section
numbers are inserted herein only as a matter of convenience and in no way
define, limit, or prescribe the scope or intent of this Agreement or any part
hereof and shall not be considered in interpreting or construing this Agreement.
7.6 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware, without regard
to conflicts of laws principles.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts and by any party hereto on a separate counterpart, each of which
when so executed and delivered shall be deemed an original and all of which
taken together shall constitute but one and the same instrument.
20
7.8 Survival. All representations and warranties contained in this
Agreement, and all covenants and agreements contained in the Agreement which
contemplate performance after the Closing Date and the obligations of the
parties not fully performed at the Closing (including, without limitation, those
covenants and agreements contained in Sections 1.4, 1.5, 3.2, 3.3, 3.4, 3.5,
4.1, 4.2, 6.4, and 7.14 hereof) shall survive the Closing.
7.9 Further Acts. In addition to the acts, instruments and
agreements recited herein and contemplated to be performed, executed and
delivered by Buyer and Seller, the Acquirer and the Contributor 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 other parties may
reasonably require to consummate the transaction contemplated hereunder.
7.10 Severability. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had
never been contained herein.
7.11 Equitable Remedies. The Contributor agrees that irreparable
damage would occur to the Acquirer in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the Acquirer shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
by such Contributor and to enforce specifically the terms and provisions hereof
in any federal or state court located in Tennessee (as to which the parties
agree to submit to jurisdiction for the purposes of such action), this being in
addition to any other remedy to which the Acquirer is entitled under this
Agreement or otherwise at law or in equity.
7.12 Time of the Essence. TIME IS OF THE ESSENCE with respect to
all obligations of the parties under this Agreement.
7.13 Attorneys' Fees. Should a party employ an attorney or
attorneys to enforce any of the provisions hereof or to protect its interest in
any manner arising under this Agreement, or to recover damages for breach of
this Agreement, any non-prevailing party in any action pursued in a court of
competent jurisdiction (the finality of which is not legally contested) shall
pay to the prevailing party all reasonable costs, damages, and expenses,
including reasonable attorneys' fees, expended or incurred in connection
therewith.
7.14 Confidentiality. The Contributor and each Designee
acknowledges that the matters relating to the REIT, the Public Offering, this
Agreement, and the other documents, terms, conditions and information related
thereto (collectively, the "Information") are confidential in nature. Therefore,
the Contributor and each Designee 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 Acquirer's
prior written consent, disclose any Information in any manner whatsoever;
provided, however, that the Information may be revealed only to the
Contributor's or Designees' key employees, legal counsel and financial advisors
and to the Property Lender, each of whom shall be informed of the confidential
nature of the Information and shall agree to act in accordance with the terms of
this Section 7.14. In the event that the Contributor, a Designee, or its key
employees, legal
21
counsel or financial advisors or the Property Lender (collectively, the
"Information Group") are requested pursuant to, or required by, applicable law
(other than in connection with the Public Offering), regulation or legal process
to disclose any of the Information, the applicable member of the Information
Group will notify the Acquirer 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 7.14. In the event that no such protective order or
other remedy is obtained, or that the Acquirer waives compliance with the terms
of this Section 7.14, 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. The Contributor
and each Designee acknowledges that remedies at law may be inadequate to protect
the Acquirer or the REIT against any actual or threatened breach of this Section
7.14, and, without prejudice to any other rights and remedies otherwise
available, the Contributor and each Designee agrees to the granting of
injunctive relief in favor of the REIT and/or the Acquirer without proof of
actual damages.
[SIGNATURES APPEAR ON FOLLOWING PAGES.]
22
IN WITNESS WHEREOF, this Agreement has been entered into effective as
of the 20th day of September, 2004.
CONTRIBUTOR:
XXXXX & X'XXXX EDUCATIONAL
PROPERTIES, LLC
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
Title: Chief Manager/President
DESIGNEES:
XXXXX & O'HARA, INC.
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
Title: President
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
ACQUIRER:
EDUCATION REALTY OPERATING
PARTNERSHIP, LP
By: Education Realty OP GP, Inc., its
General Partner
By: /s/ Xxxx X. Xxxxx
-----------------
Name: Xxxx X. Xxxxx
Title: President and Chief Executive Officer
SCHEDULE I
Allocation of Consideration
Name and Address of Designee Percentage of Ownership
---------------------------- -----------------------
XXXXX & X'XXXX, INC. 75%
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
XXXXXX X. XXXXXX 5%
c/o Allen & X'Xxxx, Inc.
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
XXXXXXX X. XXXXXX, III 5%
c/o Allen & X'Xxxx, Inc.
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
XXXXX X. XXXXXXXX 5%
c/o Allen & X'Xxxx, Inc.
000 Xxx Xxxxx Xxxxx, Xxxxx 000 0%
Xxxxxxx, Xxxxxxxxx 00000-0000
XXXXXXX X. XXXXX 5%
c/o Allen & X'Xxxx, Inc.
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
XXXXXXX XXXXXX 5%
c/o Allen & X'Xxxx, Inc.
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000-0000
I-1
EXHIBIT A
Description of Property
The Gables Apartments, located at 0000 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxx
00000, and more particularly described as follows:
Beginning at an iron pin set in the northwest right-of-way intersection of
Xxxxxxx Street and Xxxxxxxx Avenue; thence with the right-of-way line of Xxxxxxx
Street S 40 deg. 57 min. 40 sec. W 210.23 feet to an iron pin; thence with a
curve to the right having a radius of 507.03 feet, an arc length of 197.47 feet
and a chord bearing and distance of S 52 deg. 07 min. 06 sec. W 196.22 feet to
an iron pin; thence S 63 deg. 16 min. 31 sec. W 202.60 feet to an iron pin,
corner common to Lot 1 of Plat Book 27, Page 151; thence leaving said
right-of-way and with the common line of said Lot 1 N 51 deg. 41 min. 29 sec. W
340.78 feet to an iron pin located in the southeast right-of-way line of the CSX
Railroad; thence leaving said common line and with the right-of-way line of the
CSX Railroad N 37 deg. 41 min. 31 sec. E 562.99 feet to an iron pin located in
the southwest right-of-way of Xxxxxxxx Avenue; thence leaving said Railroad
right-of-way and with the right-of-way line of Xxxxxxxx Avenue S 54 deg. 10 min.
50 sec. E 489.38 feet to the point of beginning, containing 5.81 acres, and
being all of Lots 2 & 3 (collectively now Lot 2) of Xxxxxxxx and Xxxxxxxx
Subdivision Revised as recorded in Plat Book 30, Page 20, at the Xxxxxx County
Clerk's office, Bowling Green, Kentucky.
Being all of the property conveyed to The Gables, LLC, a Kentucky limited
liability company, by Quitclaim Deed dated July 23, 1996, and of record in Deed
Book 729, Page 783, in the Xxxxxx County Clerk's office. And being thee same
property conveyed from The Gables, LLC, a Kentucky limited liability company, to
Xxxxx & O'Hara Educational Properties, LLC, a Tennessee limited liability
company, by deed dated March 6, 20.00, and of record in Deed Book 799, Page 387,
in the Xxxxxx County Clerk's office.
A-1
EXHIBIT B
Disclosure Schedule
1.1 - Property Loan.
---------
ORIGINAL OUTSTANDING PRINCIPAL
PRINCIPAL ORIGINATION INTEREST BALANCE AS OF MATURITY BALANCE AT
PROPERTY LENDER AMOUNT DATE RATE 7/31/04 DATE MATURITY
-------- ------ ------ ---- ---- ------- ---- --------
The Gables Bank of 4,625,000 9/2003 5.50 4,615,558 11/1/2013 3,518,350
America,
N.A.
2.2(f) - Consents. None other than the Property Lender
2.2(k) - Leases. None
2.2(m) - Liens on Personal Property. None
2.2(n) - Employees. None
2.2(r) - Property Management Agreements. Student Housing Management Agreement,
dated as of March 3, 2000, by and between The Gables, LLC, a Kentucky limited
liability company, Xxxxx & O'Hara Educational Properties, LLC, a Tennessee
limited liability company, and Xxxxx & X'Xxxx Education Services, LLC, a
Tennessee limited liability company.
2.2(s) - No Agreement to Sell. None
B-1
EXHIBIT C
Acquirer's Partnership Agreement
C-1
EXHIBIT D
Special Warranty Deed
SPECIAL WARRANTY DEED
This DEED is made and entered into [as of or on] ______________, 200__,
from Xxxxx & O'Hara Educational Properties, LLC, a Tennessee limited liability
company ("Grantor"), to _________________________ , a _____________________,
having an address of _________________________________________________________
("Grantee").
W I T N E S S E T H
For a total consideration of __________________DOLLARS ($_______ ), the
receipt and sufficiency of which are acknowledged, Grantor grants and conveys to
Grantee with covenant of Special Warranty the real property located at
______________________, in ______________________Warren County, Kentucky, and
more particularly described on EXHIBIT A attached hereto and made a part hereof
(the "Property").
Grantor covenants (a) lawful seizin of the Property, (b) full right and
power to convey same, and (c) that the Property is free and clear of all liens
and encumbrances, except liens for real property taxes and assessments due and
payable in 200__ and thereafter, which Grantee assumes and agrees to pay. This
conveyance is made subject to all (i) easements, restrictions and stipulations
of record, and (ii) governmental laws, ordinances and regulations affecting the
Property.
For purposes of KRS 382.135, Grantor and Grantee, by execution of this
Deed, certify that the consideration reflected in this Deed is the full
consideration paid for the Property.
[Remainder of Page Intentionally Left Blank]
D-1
IN WITNESS WHEREOF, Grantor and Grantee, acting by and through [its or
their] duly authorized representative[s], duly executed this Deed as of the date
first set forth above, but actually on the dates set forth below.
GRANTOR:
Xxxxx & X'Xxxx Educational Properties, LLC,
a Tennessee limited liability company
By:
---------------------------------------
Title:
----------------------------------
Date: , 20
------------------ --
GRANTEE:
, a
------------------------- --------------
By:
---------------------------------------
Title:
----------------------------------
Date: , 20
------------------ --
X-0
XXXXXXXXXXXX XX XXXXXXXX )
)
COUNTY OF )
----------------
The foregoing Deed, including the consideration certificate contained
therein, was sworn to and acknowledged before me on ___________________, 20__ by
___________________as of ______________, a _________________, on behalf of the
__________________.
--------------------------------
Notary Public
My Commission Expires:
----------
D-3
COMMONWEALTH OF KENTUCKY )
)
COUNTY OF )
------------------
The foregoing consideration certificate was sworn to and acknowledged
before me on ____________________, 20__ by ____________________________ as
_________________ of ________________, a _________________, on behalf of the
_________________.
---------------------------------
Notary Public
My Commission Expires:
-----------
D-4
EXHIBIT "A"
[Legal Description of the Property]
The Gables Apartments, located at 0000 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxx
00000, and more particularly described as follows:
Beginning at an iron pin set in the northwest right-of-way intersection of
Xxxxxxx Street and Xxxxxxxx Avenue; thence with the right-of-way line of Xxxxxxx
Street S 40 deg. 57 min. 40 sec. W 210.23 feet to an iron pin; thence with a
curve to the right having a radius of 507.03 feet, an arc length of 197.47 feet
and a chord bearing and distance of S 52 deg. 07 min. 06 sec. W 196.22 feet to
an iron pin; thence S 63 deg. 16 min. 31 sec. W 202.60 feet to an iron pin,
corner common to Lot 1 of Plat Book 27, Page 151; thence leaving said
right-of-way and with the common line of said Lot 1 N 51 deg. 41 min. 29 sec. W
340.78 feet to an iron pin located in the southeast right-of-way line of the CSX
Railroad; thence leaving said common line and with the right-of-way line of the
CSX Railroad N 37 deg. 41 min. 31 sec. E 562.99 feet to an iron pin located in
the southwest right-of-way of Xxxxxxxx Avenue; thence leaving said Railroad
right-of-way and with the right-of-way line of Xxxxxxxx Avenue S 54 deg. 10 min.
50 sec. E 489.38 feet to the point of beginning, containing 5.81 acres, and
being all of Lots 2 & 3 (collectively now Lot 2) of Xxxxxxxx and Xxxxxxxx
Subdivision Revised as recorded in Plat Book 30, Page 20, at the Xxxxxx County
Clerk's office, Bowling Green, Kentucky.
Being all of the property conveyed to The Gables, LLC, a Kentucky limited
liability company, by Quitclaim Deed dated July 23, 1996, and of record in Deed
Book 729, Page 783, in the Xxxxxx County Clerk's office. And being thee same
property conveyed from The Gables, LLC, a Kentucky limited liability company, to
Xxxxx & O'Hara Educational Properties, LLC, a Tennessee limited liability
company, by deed dated March 6, 20.00, and of record in Deed Book 799, Page 387,
in the Xxxxxx County Clerk's office.
D-5
EXHIBIT E
Xxxx of Sale
XXXX OF SALE AND BLANKET ASSIGNMENT
STATE OF _______________Section
KNOW ALL MEN BY THESE PRESENTS
COUNTY OF ______________Section
THAT Xxxxx & O'Hara Educational Properties, LLC, a Tennessee limited liability
company ("Grantor"), for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other good and valuable consideration to
______________________ ("Grantee"), has granted, sold, assigned, transferred,
conveyed, and delivered and does by these presents grant, sell, assign,
transfer, convey, and deliver unto the said Grantee, all the following described
properties, rights, and interests arising or used in connection with that
certain real property described in Exhibit A attached hereto and incorporated
herein by reference (the "Real Property"):
(a) All of Grantor's right, title and interest in all (i)
mechanical systems and the fixtures and equipments related
thereto comprising a part of or attached to or located upon
the Real Property, including, but not limited to electrical
systems, plumbing systems, heating systems, air conditioning
systems, security, alarm and entry systems, and satellite,
cable or other television systems; (ii) carpets, drapes,
blinds and other furnishings owned by Grantor and attached to
or located upon the Real Property; (iii) appliances owned by
Grantor, (iv) maintenance equipment, supplies and tools owned
by Grantor and used in connection with the Real Property; (v)
other machinery, equipment, fixtures, supplies and personal
property of every kind and character owned by Grantor and
located in or on or used in connection with the Real Property
and (vi) all of the personal property owned by Grantor that is
on or connected with the Real Property (herein, the Real
Property and Personal Property are sometimes collectively
referred to as the "Property");
(b) All leases, subleases and other rental agreements (written or
verbal) that grant a possessory interest in and to the
Property (the "Leases"), and all security deposits, fees and
prepaid rents paid in connection with such Leases;
(c) Grantor's interest in the service contracts and agreements for
the lease of furniture and equipment which are connected with
or related to the Property ("the Contracts");
(d) Grantor's interest in all transferable warranties, guaranties,
and bonds held by Grantor pertaining to the building,
improvements, fixtures, personalty and other properties
comprising the Property;
E-1
(e) Grantor's interest in all site plans, surveys, plans and
specifications, floor plans, art work and brochures which
relate to the Property;
(f) Grantor's interest in and all utility deposits and the right
to the use of any names, marks, trademarks, tradenames and
telephone numbers and listings employed in connection with the
Property or the operations thereon and all transferable
business licenses, permits and approvals pertaining to the
Property; and
(g) all other rights, privileges and appurtenances owned by
Grantor and directly used in connection with the Property,
except those Service Contracts and the Personalty Leases which
Grantee affirmatively elected not to acquire from Grantor.
TO HAVE AND TO HOLD the assets hereby sold, transferred and assigned
unto Grantee, its successors and assigns forever and Grantor binds itself and
its successors and assigns to forever WARRANT AND DEFEND the assets hereby sold
unto Grantee, its successors and assigns, forever against every person
whomsoever lawfully claiming or to claim such herein described assets or any
part thereof by, through or under Grantor, but not otherwise. Provided, however,
Seller does not warrant its title to the items set forth in subsection (f)
above.
It is understood and agreed that, by its execution hereof, Grantee
hereby assumes and agrees to perform all of the terms, covenants and conditions
of the Leases, on the part of the lessor therein required to be performed from
and after the date hereof including, but not limited to, the obligation to
repay, in accordance with the terms of such Leases, to such lessees, all
security deposits (to the extent such security deposits are delivered to Grantee
by Grantor pursuant to this Xxxx of Sale and Blanket Assignment) required to be
repaid by the terms thereof and to indemnify, save and hold harmless Grantor
from any and all liability, claims or causes of action, loss, cost, or expense
(including reasonable attorneys' fees) arising out of or relating to Grantee's
failure to perform any of the obligations of Grantor arising under the Leases
after the date hereof, or the claims of any tenants to security deposits,
prepaid rents, future rent concessions or rebates which are transferred to
Grantee by Grantor pursuant to this Xxxx of Sale and Blanket Assignment.
It is understood and agreed that, by its execution hereof, Grantee
hereby assumes and agrees to perform all of the terms, covenants and conditions
contained in all Contracts and such other documents and instruments assigned
hereunder from and after the date hereof, to discharge any and all such
obligations of Grantor under said Contracts, documents and instruments promptly
and to indemnify, save and hold harmless Grantor from any and all liability,
claims, causes of action, or expense (including reasonable attorneys' fees)
existing in favor of or asserted or claimed by other parties to said documents
or instruments, arising out of or relating to Grantee's failure to perform any
of the obligations of Grantor under the Contracts and such other documents and
instruments herein assigned after the date hereof.
It is understood and agreed that, by its execution hereof, Grantor
hereby agrees to indemnify, save and hold harmless Grantee from any and all
liability, claims or causes of action, loss, cost or expense (including
reasonable attorneys' fees) arising out of or relating to Grantor's failure to
perform any of the obligations of Grantor under the Leases prior to the date
hereof. Grantor hereby further agrees to indemnify, save and hold harmless
Grantee from any and all liability, claims, causes of action, or expense
(including reasonable attorneys' fees) existing in
E-2
favor of or asserted or claimed by other parties to any Contracts, or other
documents or instruments assigned hereunder, arising out of or relating to
Grantor's failure to perform any of the obligations of Grantor under the
Contracts and such other documents and instruments herein assigned prior to the
date hereof.
It is further understood and agreed that Grantor will cooperate with
Grantee, at no cost to Grantor, as necessary, to secure performance by any
guarantor or warrantor for any work which Grantee believes should be performed
by such guarantor or warrantor pursuant to any of the guaranties or warranties
herein assigned.
IN WITNESS WHEREOF, Grantor has caused this Xxxx of Sale and Blanket
Assignment to be executed effective as of the ________day of
___________________.
GRANTOR:
Xxxxx & O'Hara Educational Properties, LLC, a
Tennessee limited liability company
By: /s/
--------------------------------------
Its:
--------------------------------------
GRANTEE:
/s/
-----------------------------------
-----------------------------------
E-3
EXHIBIT "A"
[Legal Description of the Property]
The Gables Apartments, located at 0000 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxxx
00000, and more particularly described as follows:
Beginning at an iron pin set in the northwest right-of-way intersection of
Xxxxxxx Street and Xxxxxxxx Avenue; thence with the right-of-way line of Xxxxxxx
Street S 40 deg. 57 min. 40 sec. W 210.23 feet to an iron pin; thence with a
curve to the right having a radius of 507.03 feet, an arc length of 197.47 feet
and a chord bearing and distance of S 52 deg. 07 min. 06 sec. W 196.22 feet to
an iron pin; thence S 63 deg. 16 min. 31 sec. W 202.60 feet to an iron pin,
corner common to Lot 1 of Plat Book 27, Page 151; thence leaving said
right-of-way and with the common line of said Lot 1 N 51 deg. 41 min. 29 sec. W
340.78 feet to an iron pin located in the southeast right-of-way line of the CSX
Railroad; thence leaving said common line and with the right-of-way line of the
CSX Railroad N 37 deg. 41 min. 31 sec. E 562.99 feet to an iron pin located in
the southwest right-of-way of Xxxxxxxx Avenue; thence leaving said Railroad
right-of-way and with the right-of-way line of Xxxxxxxx Avenue S 54 deg. 10 min.
50 sec. E 489.38 feet to the point of beginning, containing 5.81 acres, and
being all of Lots 2 & 3 (collectively now Lot 2) of Xxxxxxxx and Xxxxxxxx
Subdivision Revised as recorded in Plat Book 30, Page 20, at the Xxxxxx County
Clerk's office, Bowling Green, Kentucky.
Being all of the property conveyed to The Gables, LLC, a Kentucky limited
liability company, by Quitclaim Deed dated July 23, 1996, and of record in Deed
Book 729, Page 783, in the Xxxxxx County Clerk's office. And being thee same
property conveyed from The Gables, LLC, a Kentucky limited liability company, to
Xxxxx & O'Hara Educational Properties, LLC, a Tennessee limited liability
company, by deed dated March 6, 20.00, and of record in Deed Book 799, Page 387,
in the Xxxxxx County Clerk's office.
E-4
