RIGHT OF FIRST OFFER AGREEMENT
Exhibit 99.5
THIS RIGHT OF FIRST OFFER AGREEMENT (this “Agreement”) is dated and effective as of March 1,
2006 by and between ROYAL APARTMENTS USA, INC., an Illinois corporation (“Royal Apartments”), and
AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP, a Maryland limited partnership (the
“Operating Partnership”).
Recitals
A. Royal Apartments facilitates and coordinates the acquisition and development of properties
for student housing on behalf of certain of its Affiliates (as defined below).
B. The Operating Partnership is in the business of acquiring, owning and operating student
housing facilities.
C. The Operating Partnership and American Campus Communities, Inc. (the “Company”) have
entered into a Contribution and Sale Agreement dated as of December 2, 2005 (the “Contribution
Agreement”) with ROYAL WACO APARTMENTS, LLC, an Illinois limited liability company, an Affiliate of
Royal Apartments, relating to the student housing property commonly referred to as “The Outpost” in
Waco, Texas.
D. The Operating Partnership desires to obtain a right of first offer on all properties owned
or developed by Royal Apartments or any person or entity controlling, controlled by or under common
control with Royal Apartments, or any person or entity that constitute a beneficial owner of Royal
Apartments, or of an interest in Royal Apartments (each, an “Affiliate” and collectively,
“Affiliates”), from time to time for student housing and Royal Apartments, on behalf of itself and
its Affiliates, is willing to grant such a right of first offer to the Operating Partnership,
subject to the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing Recitals, the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Obligation to Offer. During the period commencing on the date hereof and ending on
the later of (i) four years from the date hereof or (ii) the date that Xxxxxxx Xxxxxxxx ceases (A)
to be a member of the Board of Directors of the Company or (B) to have observation rights with
respect to such Board, each time Royal Apartments or one of its Affiliates (each, an “Offering
Developer”) acquires one or more parcels of real estate for the purpose of developing student
housing thereon (each, a “Project”), Royal Apartments shall cause such Offering Developer to first
offer the Operating Partnership the right to acquire the Project (each, an “Offer”) by delivery of
written notice thereof (the “Offer Notice”); provided, however, that in no event shall an Offering
Developer be required to make an Offer to the Operating Partnership unless and until the earlier of
the time that the Offering Developer directly or indirectly (1) obtains building permits for the
Project or (2) enters into an agreement with a general contractor for the construction of the
Project, and in any event prior to the time that the Offering Developer enters into an agreement
relating to a joint venture or pre-sale of the Project. The Offer Notice shall set forth (a) the
address and legal description for the Project, (b) the number of units and beds contemplated to be
included in the Project, along with a general description of the
facilities and amenities contemplated to be included in the Project, (c) the acquisition price
which the Offering Developer would require in exchange for the contribution and/or sale of the
Project to the Operating Partnership (the “Offer Consideration”), (d) the date the Offering
Developer estimates construction of the Project will be substantially completed and ready for
occupancy and (e) any other terms and conditions the Offering Developer will require.
2. Acceptance of Offer.
(a) The Operating Partnership shall have 30 days after receipt of an Offer Notice within which
to accept, reject or make a counter offer (a “Counter Offer”) to the Offer therein contained. If
the Operating Partnership elects to accept the Offer or to make a Counter Offer, it shall notify
Royal Development in writing, which writing (the “Counter Offer Notice”) in the case of a Counter
Offer, shall contain (i) the acquisition price which the Operating Partnership would require in
exchange for the contribution and/or sale of the Project to the Operating Partnership (the “Counter
Offer Consideration”) and (ii) any other material terms and conditions the Operating Partnership
will require. If the Operating Partnership fails to respond within said 30-day period, the
Operating Partnership shall be deemed to have rejected the Offer therein contained and thereafter,
neither party shall have any further obligations in respect of the Project that was the subject of
the Offer.
(b) If the Operating Partnership delivers a Counter Offer Notice within said 30-day period,
Royal Apartments, on behalf of the Offering Developer, shall have five business days after receipt
of such Counter Offer Notice within which to accept or reject the Counter Offer contained therein.
If Royal Apartments, on behalf of such Offering Developer, elects to accept the Counter Offer, it
shall notify the Operating Partnership in writing. If Royal Apartments, on behalf of such Offering
Developer, fails to respond within said five business day-period, Royal Apartments, on behalf of
such Offering Developer, shall be deemed to have rejected such Counter Offer and thereafter,
neither party shall have any further obligations in respect of the Project that was the subject of
such Counter Offer.
(c) Notwithstanding the foregoing, if the Offering Developer, or Royal Apartments, on behalf
of the Offering Developer, subsequently reaches an agreement in principle to sell and /or
contribute and convey the Project to a third party (i) for an acquisition price that is 95% or less
than the Counter Offer Consideration set forth in the Operating Partnership’s Counter Offer Notice,
if any, or (ii) for an acquisition price that is 90% or less than the Offer Consideration if the
Operating Partnership rejects or is deemed to have rejected the Offer (such consideration, in
either such case, the “Modified Offer Consideration”), then prior to becoming legally bound to sell
and/or contribute and convey the Project to said third party for the Modified Offer Consideration,
Royal Apartments, on behalf of the Offering Developer, shall offer the Operating Partnership the
right to acquire the Project for the Modified Offer Consideration (the “Second Offer”) by delivery
of an Offer Notice that shall include the items described in clauses (a) through (e) of Paragraph
1, except that the acquisition price shall be the Modified Offer Consideration and if any other
terms in the original Offer Notice have been modified by the subsequent agreement in principle with
said third party, the modified terms shall be included in the second Offer Notice. If the
Operating Partnership elects to accept the Second Offer, it shall notify Royal Apartments, on
behalf of the Offering Developer, in writing within seven business days after receipt of the second
Offer Notice. If the Operating Partnership fails to respond within
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said seven business-day period, it shall be deemed to have rejected the Second Offer and
thereafter, neither party shall have any further obligations in respect of the Project that was the
subject of the Second Offer.
3. Contribution and Sale Agreement. If the Operating Partnership accepts an Offer or
a Second Offer as provided in Paragraphs 2(a) or (c) above, or Royal Apartments, on behalf of an
Offering Developer, accepts a Counter Offer as provided in Paragraph 2(b) above, the Operating
Partnership shall, and Royal Apartments shall cause the Offering Developer to, execute and deliver
a Contribution and Sale Agreement for the Project substantially in the form of the Contribution
Agreement, modified to incorporate the terms set forth in the applicable Offer Notice or Counter
Offer Notice, as the case may be. Thereafter, said Contribution and Sale Agreement shall govern
and be controlling with the respect to the contribution and sale of the Project that is the subject
matter thereof.
4. Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be delivered by hand, facsimile or overnight courier service, or mailed by
registered or certified mail, return receipt requested, first class postage prepaid, addressed as
follows:
| If to a Developer | c/o Royal Apartments USA, Inc. | |||
| 0000 X. Xxxxx Xx, Xxxxx 000 | ||||
| Xxxxxxxxx, Xxxxxxxx 00000 | ||||
| Attention: Xx. Xxxxxxx Xxxxxxxx | ||||
| Facsimile: (000) 000-0000 | ||||
| If to the Operating Partnership | c/o American Campus Communities, Inc. | |||
| 000 Xxx Xxxxx Xxxxxxx, Xxxxx 000 | ||||
| Xxxxxx, Xxxxx 00000 | ||||
| Attention: Xx. Xxxxx X. Xxxxx, Xx. | ||||
| Facsimile: (000) 000-0000 |
If delivered by hand, facsimile or overnight courier service, the date on which a notice,
request, instruction or document is delivered shall be deemed the date of delivery and, if
delivered by mail, the fifth business day after which such notice, request, instruction or document
is deposited in the mails shall be deemed the date of delivery. Any party hereto may change its
address specified above for notices by designating a new address by notice given in accordance with
this Paragraph 4.
5. Miscellaneous.
(a) The Paragraph headings, exhibit captions and other headings in this Agreement are inserted
solely as a matter of convenience and for reference, and are not a part of this Agreement. All
references herein to Paragraphs shall mean the Paragraphs of this Agreement.
(b) This Agreement constitute the entire agreement among the parties hereto and supersede and
cancel any prior agreements, representations, warranties, or communications,
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whether oral or written, between Royal Apartments and the Operating Partnership, or their
representatives, regarding the transactions contemplated hereby and the subject matter hereof.
(c) This Agreement, the rights and remedies of the parties hereunder, and all claims, disputes
and controversies related hereto, shall be governed by and construed in accordance with the laws of
the State of Maryland without reference to the principles of conflict of laws.
(d) In the event that any provision of this Agreement shall be held to be unenforceable or
invalid, the remaining provisions of this Agreement shall nonetheless continue to be valid and
enforceable as though the unenforceable or invalid provisions were not a part hereof.
(e) This Agreement may be executed in multiple counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument. To facilitate execution
of this Agreement, the parties hereto may execute and exchange facsimile counterparts of the
signature pages to this Agreement.
(f) This Agreement may be amended or modified only by a written instrument executed by Royal
Apartments and the Operating Partnership.
(g) This Agreement shall be binding upon, and inure to the benefit of the parties hereto and
their respective successors and assigns.
(h) This Agreement is for the sole benefit of the parties hereto and no other person or entity
shall be entitled to rely upon or receive any benefit from this Agreement or any provision hereof.
(i) Neither party hereto may assign its interest in this Agreement without the express written
consent of the other party. Any purported assignment of a party’s interest herein, whether
voluntarily or by operation of any applicable laws or otherwise, shall be ineffective as to the
other party. No consent to an assignment of this Agreement shall release the assignee of the
obligation to obtain consent to a subsequent assignment if such consent is otherwise required under
the terms of this Paragraph 5(i).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the date
first written above.
| ROYAL APARTMENTS USA, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| AMERICAN CAMPUS COMMUNITIES OPERATING PARTNERSHIP LP | ||||||
| By: | American Campus Communities Holdings LLC, its general partner | |||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
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