1
Exhibit 10.1
Attached is a form of Purchase Agreement for eight separate
substantially identical Purchase Agreements entered into by the Company and
eight different subsidiaries of MIG Residential REIT, Inc.
The differences in the agreements are the identity of the
Seller, the property and the appraised value on which the purchase price is
calculated, each of which is listed below:
SELLER PROPERTY APPRAISED VALUE
1. MIG REIT Falls, L.L.C. Windsor Falls $17,600,000
2. MIG 20th & ▇▇▇▇▇▇▇▇ Corporation 20th & ▇▇▇▇▇▇▇▇ Apartments $13,000,000
3. MIG Properties Corporation Peachtree Apartments $ 9,700,000
4. MIG REIT ▇▇▇▇▇▇ Place, Inc. ▇▇▇▇▇▇ Place $11,000,000
5. MIG Hampton Corporation Hampton Point $20,900,000
6. MIG REIT ▇▇▇▇▇ ▇▇▇▇▇, Inc. ▇▇▇▇▇ /▇▇▇▇▇ $ 9,100,000
7. MIG Desert Oasis Corporation Desert Oasis Apartments $13,000,000
8. MIG Fleetwood, Ltd. Fleetwood Apartments $ 6,750,000
Eight separate Exhibit As and eight separate Exhibits Bs are
attached to the form of Purchase Agreement, each have a legal description for
one of the above-referenced properties and a list of personal property to be
conveyed with each property, respectively. The remaining exhibits to the various
Purchase Agreements are identical.
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PURCHASE AGREEMENT
MIG REIT [SUBSIDIARY]
AND
ASSOCIATED ESTATES REALTY CORPORATION
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TABLE OF CONTENTS
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PAGE
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PURCHASE AGREEMENT.......................................................... 3
1. Agreement to Buy and Sell................................. 3
2. Liabilities............................................... 5
3. Consideration and Payment/▇▇▇▇▇▇▇ Money................... 5
4. Representations and Warranties of Seller.................. 7
5. Representations and Warranties of Buyer................... 9
6. Seller's Covenants........................................ 10
7. Title and Possession of the Property...................... 12
8. Conditions to Closing..................................... 15
9. Deliveries................................................ 18
10. Due Diligence Period...................................... 20
11. Closing Date.............................................. 22
12. Prorations and Closing Costs.............................. 23
13. Fire or Other Casualty.................................... 25
14. Condemnation and Eminent Domain........................... 26
15. Indemnification........................................... 26
16. Miscellaneous............................................. 28
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EXHIBIT A - LEGAL DESCRIPTION
EXHIBIT A-1 - PORTFOLIO PROPERTIES
EXHIBIT B - LIST OF PERSONAL PROPERTY
EXHIBIT C - ASSIGNMENT AND ASSUMPTION OF LEASES AND CLOSING
AGREEMENT
EXHIBIT D - CERTIFICATE OF SELLER REGARDING PROJECT CONTRACTS
AND PERSONAL PROPERTY LEASES
EXHIBIT E - LETTER REGARDING BOOKS AND RECORDS
EXHIBIT F - SELLER'S CERTIFICATE
EXHIBIT G - BUYER'S CERTIFICATE
EXHIBIT H - DESCRIPTION OF TRANSACTION
EXHIBIT I - INVESTMENT REPRESENTATION LETTER
EXHIBIT J - REGISTRATION RIGHTS AGREEMENT
EXHIBIT K - APPROVED DUE DILIGENCE MATERIALS
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PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT (this "Agreement") made as of the
_____ day of January, 1998, by and between MIG REIT [SUBSIDIARY],
a(n)_______________ corporation, ("Seller") and ASSOCIATED ESTATES REALTY
CORPORATION, an Ohio corporation ("Buyer"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller is the fee owner of that certain parcel of
real property on which a ____-unit apartment complex known as
___________________ located in __________, __________; which real property is
more fully described on EXHIBIT A attached hereto and made a part hereof,
together with all buildings, fixtures and other improvements located thereon and
therein and including all appurtenant rights and easements relating thereto (the
"Project");
WHEREAS, Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, all of Seller's right, title and interest in and to
the Project and the other property of Seller described herein, for the purchase
price, on the terms and subject to the conditions set forth herein;
WHEREAS, certain other persons, directly or indirectly
affiliated with Seller (collectively, "Other Owners") are the respective owners
of the apartment projects set forth on EXHIBIT A-1 attached hereto and made a
part hereof, which properties are the subject of purchase agreements of even
date herewith between Buyer and the Other Owners, respectively (the "Portfolio
Purchase Agreements").
NOW, THEREFORE, for good and valuable consideration received
to the full satisfaction of each of them, the parties agree as follows:
1. AGREEMENT TO BUY AND SELL. Upon the terms and subject to
the conditions set forth herein, Seller agrees to sell and convey to Buyer at
the Closing (as hereinafter defined), and Buyer agrees to
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buy and take from Seller at the Closing, all of Seller's right, title, estate
and interest in and to the following (hereinafter collectively referred to as
the "Property"):
(a) the Project and all rights, privileges, easements and
appurtenances appertaining thereto, including, without limitation, all
mineral and water rights, rights of way, easements, licenses or other
arrangements with respect to properties adjacent thereto;
(b) all appliances, fixtures, plumbing, incinerators, lighting
equipment, radiators, furnaces, boilers, hot water heaters, water
systems and air-conditioning equipment owned by Seller and located on
or in the Project or attached thereto;
(c) all furnishings, furniture, equipment, supplies and other
personal property owned by Seller, used or usable in connection with
the Project and located on or in the Project, including, without
limitation, the personal property listed on EXHIBIT B attached hereto
and made a part hereof (the "Personal Property");
(d) all licenses, permits, consents, authorizations, approvals
and certificates of any regulatory, administrative or other
governmental agency or body, if any, issued to or held by Seller and
related to the ownership or operation of the Project, to the extent
transferable (the "Permits");
(e) all leases, written or oral, and tenancies with tenants
with respect to all or any portion of the Project (the "Tenant
Leases");
(f) prepaid rentals under Tenant Leases, if any, and any other
miscellaneous deposits and prepaid expenses related to the ownership or
operation of the Project (collectively, the "Deposits");
(g) all leases of equipment (if any), vehicles and other
tangible personal property used by Seller in connection with the
ownership and operation of the Project, to the extent such leases are
transferable (the "Personal Property Leases");
(h) all maintenance and service contracts, supply contracts
(to the extent Buyer elects to assume them) and other agreements,
contracts and contract rights relating to the ownership or
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operation of the Property, or any part thereof to the extent such
contracts, agreements and rights are transferable (the "Project
Contracts");
(i) all guaranties, warranties and other intangible rights
pertaining to the Property, or any part thereof including, without
limitation, all guaranties and warranties relating to the construction
of the Project including all rights under architects and construction
contracts (the "Intangible Rights");
(j) all books of account, customer lists, files, papers and
records relating to the Project;
(k) the right to use the name "____________" or "____________
Apartments" and derivations thereof.
2. LIABILITIES. Buyer shall not, by execution and delivery of
this Agreement, its purchase of the Property or otherwise, be deemed to have
assumed or otherwise become responsible for any liability or obligation of any
nature of Seller, whether relating to Seller's business or any of Seller's
assets, operations, businesses or activities, matured or unmatured, liquidated
or unliquidated, fixed or contingent, or known or unknown, and whether arising
out of occurrences prior to, at or after the Closing, except as provided
hereinbelow.
3. CONSIDERATION AND PAYMENT/▇▇▇▇▇▇▇ MONEY. The total
consideration for the Property will be the following, payable by Buyer to Seller
as follows:
(a) Buyer shall deliver to Seller or Seller's designee a
number of common shares, without par value, of Buyer ("Common Shares") issued to
Seller (or its designee) computed as follows:
(i) if the Closing Share Price is greater than or equal
to 106% of the Average Share Price, the number of
Common Shares to be issued and delivered shall be
equal to ninety nine percent (99%) of the Appraised
Value of the Property multiplied by 1.06 and divided
by the Closing Share Price;
(ii) if the Closing Share Price is less than or equal to
the Average Share Price, the number of Common Shares
to be issued and delivered shall be equal to ninety
nine percent (99%) of the Appraised Value of the
Property divided by the Closing Share Price; or
(iii) if the Closing Share Price is greater than the
Average Share Price but less than 106% of the Average
Share Price, the number of Common Shares to be
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issued shall be equal to ninety nine percent (99%) of
the Appraised Value of the Property divided by the
Average Share Price.
(b) One percent (1%) of the Appraised Value deposited in escrow by
Buyer on or before the Closing Date (defined below) in immediately available
funds (the "Cash Payment").
For purposes of this Agreement:
(A) Appraised Value shall mean an amount equal to ________________
Dollars ($___________).
(B) Average Share Price shall mean the average of the closing prices on
the New York Stock Exchange of the Common Shares for the twenty (20) Trading
Days immediately preceding the date hereof.
(C) Closing Share Price shall mean the average closing prices on the
New York Stock Exchange of the Common Shares for the twenty (20) Trading Days
immediately preceding the Closing Date.
(D) Trading Days shall mean each day that Common Shares are traded on
the New York Stock Exchange. No certificates for fractional Common Shares shall
be issued or delivered in connection with the transaction contemplated by this
Agreement. To the extent that a fractional Common Share would otherwise have
been deliverable under the formula set out in the preceding portion of this
Section 3(a), Seller shall be entitled to receive a cash payment therefor in an
amount equal to the value (determined with reference to the closing price of
Common Shares as reported on the New York Stock Exchange Composite Tape on the
last full Trading Day immediately prior to the Closing Date) of such fractional
interest. Such payment with respect to fractional shares is merely intended to
provide a mechanical rounding off of, and is not separately bargained for,
consideration
Within five (5) business days following the execution of this
Agreement, Buyer shall open an escrow account (the "▇▇▇▇▇▇▇ Money Escrow") with
First American Title Insurance Company, Troy, Michigan Office, Commercial
Advantage Division (the "Title Company") and deposit the sum of
___________________ Dollars ($__________) (the "▇▇▇▇▇▇▇ Money Deposit") therein.
Buyer shall notify Seller of the opening, the deposit, the number of the escrow,
and the employee or employees of the Title Company in charge of the escrow. Each
party shall execute such documentation governing the ▇▇▇▇▇▇▇
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Money Escrow that reflects the relevant provisions of this Agreement and as may
otherwise be required by the escrow agent, including reasonable standard form
escrow conditions. The ▇▇▇▇▇▇▇ Money Deposit shall be deposited in an interest
bearing account as instructed by Buyer and any interest earned shall be added to
the ▇▇▇▇▇▇▇ Money Deposit. In the event that the parties proceed to the Closing,
then the ▇▇▇▇▇▇▇ Money Deposit, together with all interest earned thereon, shall
be applied towards the Cash Payment. Except as otherwise expressly set forth in
Section 11 of this Agreement, upon the termination of this Agreement, the
▇▇▇▇▇▇▇ Money Deposit, together with all interest earned thereon, shall be
returned by the Title Company to Buyer. Seller acknowledges that it has
disclosed to Buyer any legal conditions or requirements, imposed by law or
contract upon its interest in such ▇▇▇▇▇▇▇ Money Escrow by the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or relevant state
law, and Seller assumes all responsibility for ensuring the written provisions
of the agreement governing such ▇▇▇▇▇▇▇ Money Escrow complies with any such
requirements as they apply to Seller; PROVIDED, that Buyer (or its nominee)
shall comply with any requirements identified to Buyer by Seller in writing, so
long as identified prior to Buyer's establishing said ▇▇▇▇▇▇▇ Money Escrow.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents
and warrants to Buyer that:
(a) Seller is, and will be at the Closing, a corporation duly
organized and validly existing under the laws of the State of Maryland
with the power and authority to execute this Agreement and sell the
Property on the terms herein set forth. Seller, is duly authorized to
so act, and all requisite action has been taken by Seller to authorize
the execution and delivery of this Agreement, the performance by Seller
of its obligations hereunder and the consummation of the transactions
contemplated hereby.
(b) Seller has all necessary power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby, without the consent or
authorization of, or notice to, any third party, except those third
parties to whom such consents or authorizations have been or will be
obtained, or to whom notices have been or will be
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given, prior to the Closing. This Agreement constitutes, and the other
documents and instruments to be delivered by Seller pursuant hereto
when delivered will constitute, the legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with
their respective terms.
(c) To Seller's Knowledge, there is no litigation, proceeding
or action pending against Seller or the Property which questions the
validity of this Agreement or any action taken or to be taken by Seller
pursuant hereto.
(d) To Seller's Knowledge, neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby
will, in any material respect, constitute a violation of or be in
conflict with or constitute a default under any term or provision of
any material agreement to which Seller is a party, subject to the
obtaining of any required consents or authorizations of, or notices to
third parties from whom such consents or authorizations will be
obtained or to whom notices will be given prior to Closing.
(e) Seller has no Actual Knowledge of any material unresolved
litigation adversely affecting the Property or any notice, document or
writing threatening or disclosing material litigation, material zoning
or building code violations or material environmental law violations at
the Property which have not been disclosed to Buyer.
(f) To Seller's Knowledge: there has been no material adverse
financial change from that shown in Seller's most recent financial
statements delivered or made available to Buyer by Seller pursuant to
Section 10 hereof.
(g) The decision to enter into this Agreement has been
approved by the Board of Directors of Seller and by a vote of the
shareholders in accordance with applicable state law. Each such
shareholder has been advised that (A) as a result of MIGRA's entering
into the Merger Agreement (as defined in Section 11 hereof), the
business operations of MIGRA and Buyer or Buyer's parent will be
combined and such Merger Agreement contemplates the sale of property
pursuant to this Agreement; and (B) said Merger Agreement, if
consummated, would cause MIGRA's shareholders to become substantial
shareholders in Buyer or Buyer's
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parent and its affiliated entities, and cause certain officers and
directors of MIGRA to become officers and directors of Buyer or Buyer's
parent and its affiliates. Each such shareholder has been provided the
opportunity to ask questions and receive from MIGRA information
regarding the Property, the consideration to be paid therefore, and
MIGRA's interest in the transactions contemplated by this Agreement, to
the extent such information is in the possession of MIGRA or may be
obtained without unreasonable expense.
Notwithstanding any due diligence, investigation or analysis
performed by Buyer, the representations and warranties made in this Agreement by
Seller shall have the same force and effect as if Buyer undertook no due
diligence, investigation or analysis and Seller hereby acknowledges and agrees
that the representations and warranties made in this Agreement by Seller shall
be unaffected by any such due diligence, investigation or analysis; provided,
however, that Buyer shall not be entitled to recover on any representation or
warranty set forth in this Agreement if Buyer's due diligence made Buyer
actually aware, prior to Closing, of any condition of, concerning or relating to
the Property which is contrary to those representations and warranties, but no
such knowledge shall affect the rights of Buyer to decline to close hereunder if
any of the Closing conditions under Section 8(a) hereof are not satisfied.
Except to the extent of any matters disclosed by Seller on the
attachment to EXHIBIT F hereof that will be delivered by Seller to Buyer at
Closing, and subject to the provisions of the preceding paragraph (without
affecting the rights of Buyer to decline to close hereunder if any of the
Closing conditions under Section 8(a) hereof are not satisfied), all of the
representations and warranties set forth in this Section 4 shall be deemed
renewed by Seller on the Closing Date as if made at such time and shall survive
the Closing of the transactions contemplated hereby for a period of one (1)
year; provided, that the representations and warranties contained in Subsection
4(g) shall survive the Closing of the transactions contemplated hereby for a
period of six (6) years.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents
and warrants to Seller that:
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(a) Buyer has all necessary power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby, without the consent or
authorization of, or notice to, any third party, except those third
parties to whom such consents or authorizations have been or will be
obtained, or to whom notices have been or will be given, prior to the
Closing. This Agreement constitutes, and the other documents and
instruments to be delivered by Buyer pursuant hereto when delivered
will constitute, the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms.
(b) Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will, in any
material respect, constitute a violation of or be in conflict with or
constitute a default under any term or provision of any agreement,
instrument or lease to which Buyer is a party.
(c) To the best of Buyer's knowledge, there is no litigation,
proceeding or action pending or threatened against or relating to Buyer
which might materially and adversely affect the ability of Buyer to
consummate the transactions contemplated hereby or which questions the
validity of this Agreement or any action taken or to be taken by Buyer
pursuant hereto.
(d) Buyer has qualified to be taxed as a real estate
investment trust pursuant to Section 856 through 860 of the Internal
Revenue Code, for each of its taxable years ended December 31, 1993
through December 31, 1996, and the Buyer expects to so qualify for the
fiscal year ending December 31, 1997.
All of the representations and warranties set forth in this
Section 5 shall be deemed renewed by Buyer on the Closing Date as if made at
such time and shall survive the closing of the transactions contemplated hereby
for a period of one (1) year.
6. SELLER'S COVENANTS. On and after the date hereof through
the Closing, except as otherwise consented to or approved by Buyer in writing or
required by this Agreement, Seller shall:
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(a) Operate the Property and conduct or cause to be conducted
its business in the regular and ordinary course, including the renewal
and extension of Tenant Leases, consistent with past practices, and
exercise reasonable efforts to preserve intact the operation of the
Property.
(b) Maintain and keep the Property in good condition and
repair and in substantially the same condition as on the date hereof,
with the exception of ordinary wear and tear and damage as a result of
a casualty.
(c) Except in the ordinary course of business and with respect
to items of personal property that are no longer useful and have been
replaced with items of equivalent value, not remove, sell, mortgage,
pledge or otherwise encumber or dispose of any item of property,
without the prior written consent of Buyer, which consent will not
unreasonably withheld, delayed or conditioned.
(d) Continue to maintain all insurance on the Property
covering the risks and in the amounts of coverage in effect on the date
hereof.
(e) Duly observe and perform all material terms, conditions
and requirements of the Tenant Leases, the Project Contracts, the
Personal Property Leases, not knowingly do any act or omit to do any
act, which will, upon the occurrence thereof or with the passage of
time, cause a material breach or material default by Seller under any
Tenant Lease, Project Contract or Personal Property Lease and continue
to seek judicial and other appropriate relief with respect to any
tenant breaches under the Tenant Leases, in accordance with Seller's
past practices.
(f) Not, without the Buyer's prior written consent which shall
not be unreasonably withheld, delayed or conditioned (A) renew, amend
or extend any Project Contract or Personal Property Lease or enter into
or renew any contract or agreement pertaining to any item of Property
unless such contract or agreement can be terminated at will without
obligation after the Closing or (B) incur any mortgage indebtedness or
other material indebtedness relating to the Property.
(g) Not take, agree to take or affirmatively consent to the
taking of any action in the conduct of the business of Seller, or
otherwise, which would be contrary to or in breach of any of the
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terms or provisions of this Agreement or which would cause any
representation of Seller contained herein to be or become materially
untrue.
(h) Use its reasonable efforts (but without expending any
substantial funds or exposing itself to any liability or obligation or
risk) to obtain all necessary consents and authorizations of third
parties to the performance by Seller of its obligations hereunder and
the consummation of the transactions contemplated hereby.
(i) On or before the Closing Date, cause to be terminated any
management contract relating to the Property which is not assumed by
Buyer consistent with the terms and conditions of the transaction
described on EXHIBIT H attached hereto and made a part hereof.
(j) On or before the Closing Date, execute and deliver (or
cause its designees to execute and deliver) (i) the Investment
Representation Letter attached hereto and made a part hereof as EXHIBIT
I and (ii) the Registration Rights Agreement attached hereto and made a
part hereof as EXHIBIT J.
(k) If Seller is an "employee benefit plan" within the meaning
of Section (3)(3) of ERISA, whether or not Seller qualifies as a
"governmental plan" within Section 3(32) of ERISA, or an entity which
holds plan assets within the meaning of 29 CFR ss. 2510.3- 101, then
Seller covenants that all discretionary actions of Seller under this
Agreement shall be conducted by a fiduciary of Seller which is
independent of MIGRA or, in the case of an entity which holds plan
assets, pursuant to directions of the investors in such entity who are
independent of MIGRA.
7. TITLE AND POSSESSION OF THE PROPERTY.
(a) It shall be a condition to Buyer's obligation to close
hereunder that the Title Company deliver at Closing to Buyer an ALTA
owner's policy of title insurance, 1970 Form B, (rev. 10-17-70 and
10-17-84), or other rated form acceptable to Buyer (acting reasonably),
with the standard general exceptions deleted (or, with Buyer's
reasonable approval, insured over), subject to rights under the Tenant
Leases, and with such endorsements as Buyer may reasonably require,
including, without limitation, owner's comprehensive, survey, access,
tax parcel, utilities and
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contiguity endorsements (provided that Buyer pay the costs of all such
endorsements), in the amount of the total consideration paid by Buyer
to Seller for the Property (the "Title Policy") issued by the Title
Company, as assurance that upon Closing, the Buyer holds and will hold
good, valid and insurable title in fee simple absolute to the Property
including all rights, privileges and easements appurtenant to the
Property free and clear of all encumbrances whatsoever, except the
following (collectively, the "Permitted Exceptions"):
(i) zoning ordinances and regulations; provided the
same do not interfere with the use of the Property as an
apartment complex;
(ii) general real estate taxes, which are a lien but
are not yet past due or delinquent at the Closing Date;
(iii) rights of tenants under Tenant Leases; and
(iv) such easements, covenants, conditions,
reservations and restrictions of record disclosed in Schedule
B of Seller's existing Title Policy (the "Approved Title
Report") and other matters disclosed to and approved by Buyer,
in writing, unless otherwise waived or deemed waived by Buyer
as hereinafter provided.
(b) Seller represents, warrants and covenants to Buyer that
upon the Closing Date Buyer will have complete possession of the
Property, subject only to the interests of the tenants under the Tenant
Leases and the other Permitted Exceptions.
(c) Buyer shall obtain, as promptly as reasonably practicable
after the execution of this Agreement a current commitment issued by
the Title Company to issue the Title Policy (the "Title Commitment")
which updates the Approved Title Report with copies of all instruments
referred to as exceptions or conditions in the Title Commitment that
were not set forth in the Approved Title Report, setting forth all real
estate taxes and special assessments, the state of record title to the
Property and all exceptions to, or encumbrances upon, title to the
Property which would appear in the Title Policy. Buyer shall have until
the end of the Due Diligence Period (as defined in Section 10 of this
Agreement) to review such items and to give notice to Seller of such
objections as Buyer may have to any matters set forth in the Title
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Commitment or survey which were not referenced in the Approved Title
Report. Seller understands and agrees that prior to the expiration of
the Due Diligence Period, Buyer may deliver to Seller an objection
letter or objection letters at any time during the Due Diligence Period
and Seller agrees that any such delivery or deliveries shall not be
construed in any way to limit or restrict Buyer's right to deliver
additional objections to Seller at any time during Due Diligence
Period. If Buyer timely (i.e during the Due Diligence Period) objects
to any special assessments, defects or encumbrances, Seller shall have
until the end of the Due Diligence Period to have such exceptions
cured, either by the removal of such exceptions or by the procurement
of title insurance endorsements or other resolution satisfactory to
Buyer providing coverage against loss or damage as a result of such
exceptions. If Seller shall not cure such defects or encumbrances to
Buyer's satisfaction by the end of the Due Diligence Period, Buyer, at
its option, may (i) terminate this Agreement upon written notice of
termination to Seller in accordance with Section 10 of this Agreement,
in which event neither party shall thereafter have any liability to the
other (except as to matters which, under any other provision of this
Agreement are expressly stated to survive a termination of this
Agreement), and all funds previously paid or deposited by Buyer,
including all accrued interest, shall be returned to Buyer, or (ii)
waive its objection to the defects or encumbrances and proceed to the
Closing in which event all such waived defects or encumbrances shall be
deemed to be Permitted Exceptions hereunder. Notwithstanding the above,
any defects in the nature of consensual liens affirmatively granted by
Seller or non-consensual monetary liens which do not exceed Twenty Five
Thousand Dollars ($25,000) in the aggregate that can be released by
payment of the underlying obligation shall be removed, bonded or title
insured over by Seller and if not so removed, bonded or title insured
over by the Closing then the Appraised Value shall
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be reduced by an amount sufficient to satisfy such obligations. Buyer
shall conclusively be deemed to have waived all objections to any title
or survey defect, encumbrance or exception reflected or referenced in
the Title Commitment or survey as to which Buyer fails to deliver to
Seller a written objection by the end of the Due Diligence Period, and
all such matters shall thereafter be deemed to be Permitted Exceptions
for purposes of this Agreement.
8. CONDITIONS TO CLOSING.
(a) Subject to the provisions of Sections 13 and 14 and unless
expressly waived by Buyer through written notice to Seller, Buyer's
obligations under this Agreement are expressly conditioned upon the
satisfaction or occurrence of the following conditions:
(i) The representations and warranties of Seller set
forth in Section 4 shall have been true and correct in all
material respects when made and shall be true and correct in
all material respects, as of the Closing and Seller shall have
complied with all covenants as set forth in Section 6 herein,
and shall have otherwise performed all of its obligations
hereunder, in all material respects;
(ii) All consents to or authorization of the
performance by Seller of its obligations hereunder and the
consummation of the transaction contemplated hereby shall have
been obtained;
(iii) Seller shall have delivered the items required
to be delivered to Buyer pursuant to Section 9 and delivered
or made available all other items and information required by
this Agreement in accordance with the terms of this Agreement;
(iv) Buyer shall have notified Seller pursuant to
Section 10 herein that Buyer has not discovered a Material
Adverse Condition (as defined in Section 10 herein) or Buyer
shall be deemed to have so notified Seller;
(v) The physical condition of the Property shall not
have changed in any material respect from the condition in
existence on the last day of the Due Diligence Period (as
hereafter defined) and the financial condition of the Property
shall not have changed in any material and adverse respect
from the condition reflected in the then most current
financial statements and other relevant financial materials
delivered by Seller to Buyer during the Due Diligence Period
(as hereinafter defined);
(vi) Unless otherwise expressly instructed through
written notice from Buyer to Seller, Seller shall have
arranged without any cost or liability to Buyer for the
termination effective as of or prior to the Closing, of any
management contract of any property manager relating to the
Property and shall provide Buyer with written confirmation of
such termination on or prior to Closing;
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(vii) The Title Company shall be ready, willing and
able to issue the Title Policy to Buyer in accordance with the
provisions of Section 7 hereof;
(viii) The transactions described on EXHIBIT H and
the closing of the Merger (as that term is defined in the
Merger Agreement) and the transactions contemplated by the
Portfolio Purchase Agreements shall have closed simultaneously
with, or immediately preceding or immediately following the
Closing of this transaction; and
(ix) Seller (or Seller's designees) shall have
executed and delivered the Investment Representation Letter
attached hereto as EXHIBIT I and the Registration Rights
Agreement attached hereto as EXHIBIT J.
(b) Subject to the provisions of Sections 13 and 14 and unless
expressly waived by Seller through written notice to Buyer, Seller's
obligations under this Agreement are expressly conditioned upon the
occurrence of the following events:
(i) The representations and warranties of Buyer set
forth in Section 5 and 16 of this Agreement shall have been
true and correct in all material respects when made and shall
be true and correct in all material respects, as of the
Closing and Buyer shall have otherwise performed all of its
obligations hereunder, in all material respects;
(ii) Buyer shall have delivered the items required to
be delivered to Seller pursuant to Section 9(c);
(iii) the closing of the Merger (as that term is
defined in the Merger Agreement) and the transactions
contemplated by the Portfolio Purchase Agreements shall have
closed simultaneously with, or immediately preceding or
immediately following the Closing of this transaction;
(iv) All consents to or authorization of the
performance by Buyer of its obligations hereunder and the
consummation of the transaction contemplated hereby shall have
been obtained; and
(v) Buyer shall have executed and delivered the
Registration Rights Agreement attached hereto as EXHIBIT J.
(c) Since the Portfolio Properties constitute substantially
all of the assets of MIG Residential REIT, Inc., a Maryland corporation
("MIG REIT"), through MIG REIT's ownership of all the shares of Seller
and the Other Owners, MIG REIT's Board of Directors has a fiduciary
obligation to the holders of MIG REIT stock to maximize the current and
long term value of their shares in MIG REIT. Accordingly, it is agreed
that, notwithstanding anything in this Agreement to
19
the contrary, Seller shall have the right (the "Fiduciary Out") to
terminate this Agreement and cancel the ▇▇▇▇▇▇▇ Money Escrow on the
following terms and conditions:
(i) During the period between the date hereof and the
Schedule Closing Date, MIG REIT shall be entitled to provide
financial information about the Portfolio Properties to third
parties who request such information and sign a
confidentiality agreement substantially similar to the one
signed by Buyer. The parties intend that this Section 8(c)
will provide MIG REIT with an opportunity to sell the
Portfolio Properties on the following basis. After the date
hereof, MIG REIT shall cease or cause to cease all active
marketing of the Portfolio Properties by MIG REIT (or others
acting on behalf of MIG REIT) through the use of brokers,
financial advisors, advertising or other forms of active
solicitation. MIG REIT shall, however, be entitled to respond
to inquiries from third parties ("Third Party Buyers") to whom
information has been supplied previously, or who may learn of
the transaction contemplated in this Agreement through public
disclosure thereof.
(ii) The Third Party Buyers shall be entitled to make
offers (the "Third Party Officers") to purchase all of the
Portfolio Properties.
(iii) If MIG REIT's Committee of Independent
Directors recommends that any Third Party Offer should be
presented to MIG REIT's Board of Directors, Seller shall
provide Buyer with a complete copy of any Third Party Offer(s)
so presented promptly after the Board of Directors has had an
opportunity to review same.
(iv) If, in the opinion of MIG REIT's Board of
Directors, the terms of a Third Party Offer are superior to
the transactions contemplated in this Agreement and the
Portfolio Purchase Agreements, in that MIG REIT's shareholders
would realize more value as a result of the acceptance of such
Third Party Offer and, as a result, in the opinion of MIG
REIT's legal counsel, MIG REIT's directors would have a
fiduciary duty to accept such Third Party Offer, Seller shall
have the right to send Buyer a written notice (the "Fiduciary
Out Notice") to such effect. Seller's sending the Fiduciary
Out Notice to Buyer shall constitute an election by Seller to
terminate this Agreement and cancel the ▇▇▇▇▇▇▇ Money Escrow,
subject to subsection (v) below.
(v) If a Fiduciary Out Notice is sent to Buyer, Buyer
shall have the right to elect, by giving Seller written notice
thereof within ten (10) business days after such Fiduciary Out
Notice is sent to Buyer, to either: (A) do nothing, or
(B) propose terms and conditions for Buyer to purchase the
Property which are at least as advantageous to Seller as the
terms and conditions set forth in such Fiduciary Out Notice,
which proposed terms and conditions shall include a total
purchase price for all the Portfolio Properties at least equal
to the total purchase price proposed by the Third Party Buyer
named in such Fiduciary Out Notices, plus $250,000. If Buyer
elects to do nothing, Seller shall have no obligation to sell
the Property to Buyer, but Buyer shall have the right to be
paid the Break-Up Fee (as defined below) on the same
contingent basis specified in subsection (vii)(B) below. If
Buyer proposes such new terms and conditions which are
accepted by Seller, in Seller's role and absolute discretion,
the Break-Up Fee shall not be payable to Buyer and the parties
shall proceed with and complete the purchase and sale of the
Property in accordance therewith. If Buyer elects to do
nothing, or if Seller does not accept such new terms and
conditions proposed by Buyer, Seller shall give written notice
to Buyer and the Title Company that this Agreement is
terminated and the ▇▇▇▇▇▇▇ Money Escrow is canceled (the
"Termination Notice").
20
(vi) If Seller sends the Termination Notice, the
Title Company shall automatically and immediately without
further instruction from Seller to Buyer, release the ▇▇▇▇▇▇▇
Money Deposit, plus accrued interest, to Buyer.
(vii) If Seller sends the Termination Notice, then
Seller shall be obligated to pay to Buyer an all-inclusive fee
(the "Break-Up Fee") for the purpose of compensating Buyer for
the loss of the opportunity to purchase the Property and
reimbursing Buyer for all out-of-pocket costs incurred by
Buyer in the course of its due diligence review. The Break-Up
Fee shall be three percent (3%) of the Appraised Value and
shall be paid to Buyer simultaneously with the delivery of the
Termination Notice, by wire transfer of immediately available
federal funds.
UPON THE SENDING OF THE TERMINATION NOTICE, THIS AGREEMENT
SHALL BE TERMINATED AND THE BREAK-UP FEE SHALL BE PAID TO
BUYER AS PROVIDED ABOVE AS LIQUIDATED DAMAGES. THE PARTIES
ACKNOWLEDGE THAT BUYER'S ACTUAL DAMAGES AS A RESULT OF A
TERMINATION OF THIS AGREEMENT PURSUANT TO THIS SECTION 8(c)
WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.
THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES
ACKNOWLEDGE THAT THE BREAK-UP FEE HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF BUYER'S
DAMAGES AND AS BUYER'S EXCLUSIVE REMEDY AGAINST SELLER FOR
TERMINATING THIS AGREEMENT UNDER THIS SECTION 8(c).
9. DELIVERIES.
(a) Seller shall execute and deliver to Buyer through an
escrow with the Title Company as escrowee, at Closing, a good and
sufficient special or limited warranty deed, in customary form
acceptable to Buyer (the "Deed"), conveying good and insurable fee
simple title to the Project to Buyer, free and clear of all mortgages,
pledges, liens, security interests, encumbrances and restrictions,
except the Permitted Exceptions. The Permitted Exceptions shall be
specifically, and not categorically, set forth in the Deed as
exceptions to title.
(b) In addition, Seller shall deliver the following to Buyer
at or prior to the Closing:
(i) Duly executed resolutions adopted by the Board of
Directors of Seller authorizing the execution and delivery of
this Agreement by Seller, the performance by Seller of its
obligations hereunder and the consummation of the transactions
contemplated hereby, in such form as Buyer deems necessary or
desirable, in its discretion reasonably exercised;
(ii) Documents and instruments, in form and substance
acceptable to Buyer (acting reasonably), sufficient to convey,
transfer and assign to Buyer the Property (other than the
Property conveyed by the Deed), including, without limitation,
the Assignment and Assumption of Leases and Closing Agreement
substantially in the form of EXHIBIT C
21
attached hereto and made a part hereof and the Certificate
Regarding Projects and Personal Property Leases substantially
in the form of EXHIBIT D attached hereto and made a part
hereof;
(iii) Customary confirmation of authorization,
organization, valid existence, including legal opinions, as
Buyer may reasonably request;
(iv) All books, records and files relating to the
Property and the Seller's operation of the Property (but
Seller may retain copies of all of the foregoing), all of
which may alternatively be delivered to Buyer at the Property
at or prior to Closing together with a Letter Regarding Books
and Records substantially in the form of EXHIBIT E attached
hereto and made a part hereof;
(v) To the extent customarily issued in the
jurisdiction in which the Property is located, originals of
all certificates of occupancy (or the jurisdictional
equivalent of a certificate of occupancy) for all apartment
units on the Property, if available, and if not available,
true and correct copies thereof;
(vi) The originals of all Tenant Leases, Personal
Property Leases, Project Contracts and Permits, together with
all amendments and any attachments and supplements thereof,
all of which may alternatively be delivered to Buyer at the
Property upon or prior to Closing (but Seller may retain
copies of all of the foregoing);
(vii) A FIRPTA Affidavit duly executed by Seller
confirming that Seller is a not a "foreign person" under
Section 1445 of the Internal Revenue Code;
(viii) Settlement statements agreed to by Buyer and
executed by Seller;
(ix) Signed escrow instructions, reasonably
satisfactory to the Title Company and Buyer, in form and
substance sufficient to carry out the Closing;
(x) A certificate of Seller in the form of EXHIBIT F
attached hereto and made a part hereof;
(xi) Unless otherwise expressly instructed through
written notice from Buyer to Seller, documentation reasonably
acceptable to Buyer confirming the termination of any
management agreement relating to the Property;
(xii) A rent roll that is certified as true and
correct by Seller, to its Actual Knowledge, on the Closing
Date, dated as of a date not earlier than three (3) days
before the Closing Date;
(xiii) Such other documents and instruments as may be
required by any other provision of this Agreement or as may
reasonably be required to give effect to the terms and intent
of this Agreement; and
(xiv) a copy of any affidavit required by the Title
Company to remove the standard printed exceptions from the
Title Policy.
22
(c) Buyer shall issue the Common Shares to or for the benefit
of Seller, or Seller's designees (provided that they make the
investment intent representations set forth in the Investment
Representation Letter) and deliver the Cash Payment through escrow on
the Closing Date and shall deliver the following documents to Seller on
or before the Closing:
(i) Settlement statements agreed to by Seller and
executed by Buyer;
(ii) Signed escrow instructions, reasonably
satisfactory to the Title Company and Seller, in form and
substance sufficient to carry out the Closing;
(iii) A certificate of Buyer in the form of EXHIBIT G
attached hereto and made a part hereof;
(iv) Documents and instruments, in form and substance
acceptable to Buyer and Seller, pursuant to which Buyer
accepts and assumes certain post Closing liabilities and
obligations of Assignor concerning the Property, including,
without limitation, the Assignment and Assumption of Leases
and Closing Agreement substantially in the form of EXHIBIT C
attached hereto and made a part hereof and the Certificate
Regarding Projects and Personal Property Leases substantially
in the form of EXHIBIT D attached hereto and made a part
hereof;
(v) Duly executed resolutions adopted by the Board of
Directors of Buyer authorizing the execution and delivery of
this Agreement by Buyer, the performance by Buyer of its
obligations hereunder and the consummation of the transactions
contemplated hereby; and
(vi) Such other documents and instruments as may be
required by any other provision of this Agreement or as may
reasonably be required to give effect to the terms and intent
of this Agreement.
10. DUE DILIGENCE PERIOD. Buyer acknowledges and agrees that
prior to the execution of this Agreement, Buyer has received from Seller or
Seller has made available to Buyer true and correct copies of all of the
information regarding the Property which is described on EXHIBIT K attached
hereto and made a part hereof (the "Approved Due Diligence Materials") and that
Buyer has approved the Approved Due Diligence Materials and all information
contained therein. For a period of thirty (30) days following execution of this
Agreement (the "Due Diligence Period"), Buyer shall be permitted to conduct its
own limited inspections of the Property for the sole purposes of updating the
Approved Due Diligence Materials, with respect to: (i) obtaining a so-called
"Phase I Environmental Assessment" of the Property, (ii) obtaining structural
and engineering assessments of the Property, (iii) obtaining the Title
Commitment referenced in
23
Section 7 hereof and (iv) updating or upgrading the survey referenced on EXHIBIT
K (the "Updated Due Diligence"). Seller shall grant reasonable access to Buyer
and its representatives to the Property for the purpose of conducting the
Updated Due Diligence. Seller shall have the right to coordinate and accompany
Buyer on any of such inspections. Any and all inspections, examinations,
analyses and audits deemed necessary by Buyer shall be performed at Buyer's
expense and shall not physically damage the Property. Buyer shall promptly and
completely repair and restore any and all damage to the Property that may be
caused by, or may occur in connection with or as a result of, any inspection,
investigation, audit, test or visit to the Property by Buyer, its employees, and
authorized agents and consultants. Buyer shall indemnify, protect, defend and
hold Seller and its agents, employees and representatives harmless from and
against any and all loss, cost, claim, liability, damage or expense (including,
without limitation, attorneys' fees and expenses) arising out of physical
damages or injuries to persons or property caused by Buyer's inspections,
investigations, audits, tests or visits to the Property. Buyer's restoration and
indemnification obligations set forth in this Section shall survive the Closing
or termination of this Agreement.
Without limiting the rights accorded to Buyer pursuant to
Section 8 hereof, at any time during or at the end of the Due Diligence Period,
Buyer, in the event that Buyer's Updated Due Diligence discloses any information
which is not contained in the Approved Due Diligence Materials and which could
reasonably be expected to have a material adverse impact on the value of the
Property ("A Material Adverse Condition"), then, Buyer, in Buyer's sole
discretion, may terminate this Agreement (by giving notice of such termination
to Seller, including Buyer's specific reasons therefor). Buyer shall notify
Seller in writing either during or at the end of the Due Diligence Period with
respect to whether or not Buyer has discovered any such Material Adverse
Condition. If Buyer's written notice to Seller indicates that the Updated Due
Diligence has not disclosed a Material Adverse Condition, then the parties
shall, subject to the satisfaction of the conditions set forth herein, proceed
to the Closing. If Buyer's written notice to Seller indicates that the Updated
Due Diligence has disclosed a Material Adverse Condition, then this Agreement
shall terminate and the ▇▇▇▇▇▇▇ Money Deposit (including all interest earned
thereon) shall be returned to Buyer. Upon termination of this Agreement by
Buyer pursuant to this Section 10, neither party shall thereafter be under
24
any further liability to the other, except as to matters which this Agreement
expressly states are to survive a termination of this Agreement. Notwithstanding
anything to the contrary contained in this Section 10, if Buyer does not notify
Seller by the end of the Due Diligence Period with respect to whether or not the
Updated Due Diligence has disclosed a Material Adverse Condition, then Buyer
shall be deemed to have notified Seller that the Updated Due Diligence has not
disclosed any Material Adverse Condition.
11. CLOSING DATE. Unless the parties otherwise agree in
writing, the transactions contemplated hereby shall be closed through escrow
(the "Closing") on the date that is concurrent with the closing of the
transactions contemplated by that certain Agreement and Plan of Merger (the
"Merger Agreement") by and among Buyer, MIG Realty Advisors, Inc. ("MIGRA") and
certain shareholders of MIGRA (the "Closing Date"), which Closing Date shall be
established through written notice given by Buyer to Seller and shall not be
later than ten (10) days after the end of the Due Diligence Period (the
"Scheduled Closing Date"). Notwithstanding the foregoing, in the event that
Buyer determines that the applicable rules of the New York Stock Exchange
require its shareholders approval of the transactions contemplated by the Merger
Agreement or this Agreement, then Buyer shall have the right at any time up
until the Scheduled Closing Date, upon written notice to Seller, to extend the
Scheduled Closing Date in order to permit Buyer to obtain such shareholder
approval, to a date which is no later than (i) ninety (90) days after the date
of this Agreement, if the Securities and Exchange Commission ("SEC") informs
Buyer that it will not provide comments to its proxy statement or (ii) one
hundred thirty five days (135) after the date of this Agreement, if the SEC
provides comments to its proxy statement. After the expiration of the Due
Diligence Period, Buyer shall not have the right to terminate this Agreement
except pursuant to the provisions of Sections 8(a), 13 or 14 of this Agreement.
IF BUYER SHALL DEFAULT IN ITS OBLIGATIONS TO ACQUIRE THE PROPERTY, THEN SELLER
SHALL RECEIVE THE ▇▇▇▇▇▇▇ MONEY DEPOSIT (INCLUDING ALL INTEREST EARNED THEREON)
AS LIQUIDATED DAMAGES AND NEITHER PARTY SHALL THEREAFTER BE UNDER ANY FURTHER
LIABILITY TO THE OTHER, EXCEPT AS EXPRESSLY OTHERWISE PROVIDED IN THIS AGREEMENT
WITH RESPECT TO THE PROVISIONS THAT EXPRESSLY SURVIVE THE TERMINATION OF THIS
AGREEMENT. THE PARTIES HAVE
25
AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY BUYER, WOULD
BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING
THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE ▇▇▇▇▇▇▇ MONEY DEPOSIT
(INCLUDING ALL INTEREST EARNED THEREON) HAS BEEN AGREED UPON, AFTER NEGOTIATION,
AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS SELLER'S SOLE AND
EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN THE EVENT OF A DEFAULT
UNDER THIS AGREEMENT ON THE PART OF BUYER.
INITIALS: Seller_________ Buyer __________
12. PRORATIONS AND CLOSING COSTS. All prorations, adjustments
and final readings shall be made as of 11:59 pm of the day preceding the Closing
Date, unless otherwise mutually agreed to by the parties (the "Adjustment
Date"), by the Title Company based on information provided by the parties, as
follows:
(a) Payments under any Project Contracts or Personal Property
Leases and fees for any transferable licenses and permits which are
assigned to Buyer, shall be prorated.
(b) General real estate taxes shall be prorated, using for
such purpose the rate and valuation shown on the last available tax
duplicate, but subject to further adjustment as provided below. If any
real estate taxes prorated at Closing or assessments paid by Seller (as
set forth below) are later increased for any reason whatsoever,
including, without limitation, the real estate taxes and assessments
shown on the later issued actual tax duplicate being greater than those
shown on the tax duplicate available at Closing or because of any
additions or corrections to the tax duplicate assessed by reason of
Buyer's acquisition of the Property, then Seller shall promptly pay all
such increases allocable to the period prior to the Closing and Seller
shall protect, indemnify, defend, and hold Buyer harmless from and
against all such real estate tax and assessment increases, which
obligations on the part of the Seller shall survive the Closing. If any
real estate taxes prorated at Closing or assessments paid by Seller (as
set forth below) are later decreased for any reason whatsoever,
including, without limitation, the real estate taxes and assessments
shown on the later issued actual
26
tax duplicate being less than those shown on the tax duplicate
available at Closing or because of any corrections to the tax duplicate
assessed by reason of Buyer's acquisition of the Property or because of
any post-Closing reduction in, or refund or rebate of, any taxes
relating wholly or in part to a period before the Closing, then Buyer
shall promptly pay to Seller the savings allocable to the period prior
to the Closing (less any costs incurred by Buyer to any unaffiliated
third parties in connection with obtaining the reduction of such tax
▇▇▇▇), which obligation shall survive the Closing. Any special
assessments that are a lien on the Property as of the date of this
Agreement shall be paid by Seller without proration. Any special
assessments that become a lien on the Property after the date of this
Agreement shall be paid as follows: Seller shall pay all installments
that are due and payable prior to the Closing Date and Buyer shall pay
all installments that become due and payable on or after the Closing
Date.
(c) Collected rents shall be prorated based upon the total
rent roll payable for the month in which Closing occurs. In the event
that Buyer receives current rent from any tenants for the month in
which the Closing occurs, then Buyer shall deliver to Seller (outside
of escrow) the portion of such current rents attributable to periods
prior to the Adjustment Date. Additionally, in the event that any
tenant, who as of the Closing is delinquent in the rental payments due
Seller, delivers to Buyer a rent check in an amount in excess of the
rent due Buyer for the month for which such check is delivered, Buyer
shall allocate such excess first to pay reasonable outside collection
costs, if any, paid to unaffiliated third parties, then to pay rents
which become due after Closing, then pay remaining funds to Seller for
any rents delinquent prior to Closing and were due as of the date such
payment was received; provided, however, in no event shall Buyer be
obligated to collect delinquent rents on Seller's behalf.
(d) Final readings and final ▇▇▇▇▇▇▇▇ for utilities shall be
made as of the Adjustment Date. Seller shall pay all outstanding
amounts due as of such time, or such amounts shall be credited to Buyer
at Closing. If final readings and ▇▇▇▇▇▇▇▇ cannot be
27
obtained prior to Closing, the final bills, when received, shall be
prorated as of the Adjustment Date and the Title Company shall hold in
escrow an amount equal to 125% of the reasonably anticipated amount of
such ▇▇▇▇▇▇▇▇, based upon the most recent available ▇▇▇▇▇▇▇▇ for
similar periods until the Title Company shall have received notice of
payment of such bills, at which time any remaining amount being
withheld for such purpose shall be distributed to the Seller.
(e) Buyer shall receive a credit at Closing for all deposits,
including security deposits, under the Tenant Leases which are not
delivered or assigned to Buyer at Closing.
(f) Seller shall pay in connection with this transaction the
following closing costs: (i) any state or local real or personal
property transfer taxes, documentary stamps, fees or other charges
relating to the transfer of the Property and (ii) one-half of any
escrow charges. Buyer shall pay in connection with this transaction the
following closing costs: (i) all recording fees, (ii) the costs of the
Title Policy and all endorsements thereto and (iii) one-half of any
escrow charges. Each party shall pay its own attorneys' fees. All
closing costs allocable to Seller, including, without limitation, any
prorations to which Buyer may be entitled by reason of the foregoing
shall be credited against the balance of the Appraised Value to be paid
at Closing.
13. FIRE OR OTHER CASUALTY. Seller agrees to promptly advise
Buyer in writing of any material damage to the Property. If all or any
substantial portion of the Property (i.e. 10% or more of the value) shall, prior
to the Closing, be damaged or destroyed by fire or any other cause, and such
damage shall not have been repaired or reconstructed prior to the Closing in a
good and workmanlike manner to the reasonable satisfaction of Buyer, Buyer may,
at Buyer's option: (a) remain obligated to perform this Agreement and receive
all insurance proceeds received by or payable to Seller as a result of such
damage or destruction plus an amount equal to any insurance policy deductible;
or (b) by written notice of termination given to Seller not later than thirty
(30) days after Seller provides Buyer with written notice of such damage or
destruction, terminate this Agreement and receive any documents, instruments and
funds previously deposited or paid including the ▇▇▇▇▇▇▇ Money Deposit (together
with all interest earned thereon). If an unsubstantial portion of the Property
(i.e. 10% or less of the
28
value) shall, prior to the Closing, be damaged or destroyed by fire or any other
cause and such damage shall not have been repaired or reconstructed prior to the
Closing in a good and workmanlike manner to the reasonable satisfaction of
Buyer, then Buyer shall be obligated to proceed to close the transaction
contemplated hereby, but shall receive from Seller, on the Closing Date, an
assignment of proceeds of the insurance payable under Seller's insurance policy
plus an amount equal to any insurance policy deductible. Upon termination of
this Agreement by Buyer pursuant to this Section 13, neither party shall
thereafter be under any further liability to the other, except as otherwise
expressly set forth in this Agreement.
14. CONDEMNATION AND EMINENT DOMAIN. If, prior to the Closing,
all or any portion of the Property shall be subjected to a taking, either total
or partial, by eminent domain, condemnation, or for any public or quasi-public
use, Buyer shall have the right to either (a) terminate this Agreement by giving
written notice of termination to Seller, in which event all funds and documents
deposited by Buyer and Seller shall be refunded or returned to the depositing
party and neither party shall thereafter be under any further liability to the
other and Buyer shall receive the ▇▇▇▇▇▇▇ Money Deposit, or (b) proceed to close
this transaction in which case Seller shall assign to Buyer at Closing all of
the proceeds and/or awards from such condemnation action. Seller and Buyer each
agree to forward promptly to the other any notice of intent received pertaining
to a taking of all or a portion of the Property by way of condemnation, eminent
domain or similar procedure for a taking of the Property in connection with any
public or quasi-public use.
15. INDEMNIFICATION.
(a) Subject to Section 15(c) of this Agreement, Buyer shall
fully indemnify, protect, defend and hold Seller and its
representatives, successors and assigns harmless from and against any
and all claims, demands, losses, liabilities, damages, awards,
judgements, penalties, costs and expenses (including reasonable
attorneys' fees and expenses) arising out of or in connection with (i)
the Property or the ownership thereof or arising under, relating to or
concerning any of the Tenant Leases, Permits, Deposits, Personal
Property Leases, Project Contracts, Intangible Rights if such claims,
demands, losses, liabilities, damages or expenses first arise, accrue
or exist or relate to any period of time from or after the Closing
(except to the extent that such indemnification obligation
29
would arise directly as a result of the inaccuracy of any
representation or warranty made by Seller hereunder), or (ii) the
inaccuracy or any representation or warranty made by Buyer hereunder.
(b) Subject to Section 15(c) of this Agreement, Seller shall
fully indemnify, protect, defend and hold Buyer, its successors and
assigns harmless from and against any and all claims, demands, losses,
liabilities, damages, awards, judgements, penalties, and expenses
(including reasonable attorneys' fees and expenses) arising out of or
in connection with (i) the inaccuracy of any representation or warranty
made by Seller hereunder, or (ii) the ownership of the Property prior
to the Closing (including, without limitation, any claim, demand, loss,
liability, damage, award, judgement, penalty or expense arising under,
relating to or concerning any of the Tenant Leases, Permits, Deposits,
Personal Property Leases, Project Contracts or the Intangible Rights),
but only if such claims, demands, losses, liabilities, damages or
expenses first arose, accrued, existed or related to any period of time
before the Closing (except to the extent that such indemnification
obligation would arise directly as a result of the inaccuracy of any
representation made by Buyer hereunder).
(c) Notwithstanding anything in the preceding Sections 15(a)
and 15(b) or elsewhere in this Agreement to the contrary, any claim for
indemnification under clause (ii) of Section 15(a) or Section 15(b)
must be asserted in writing and with specificity by the date (the
"Claim Expiration Date") which for the matters referenced in Section
4(g) of this Agreement is six (6) years after the Closing Date and with
respect to the other provisions of this Agreement is three hundred
sixty five (365) days after the Closing Date, and any and all claims
not so asserted by the applicable Claim Expiration Date shall
automatically expire and be deemed to have been forever waived,
released and of no force or effect and (B) the total amounts
recoverable by Buyer against Seller or by Seller against Buyer with
respect to such matters, shall not exceed, in the aggregate, Five
Hundred Thousand Dollars ($500,000) plus attorneys' fees and expenses
incurred in enforcing the indemnification provisions of this Section 15
after the detailed written claim described above was delivered to the
indemnifying party and such party refused to pay or satisfy such claim.
Nothing in this Section 15(c) shall limit claims for the specific
enforcement of this Agreement.
30
16. MISCELLANEOUS.
(a) This Agreement, including the Exhibits attached hereto,
shall be deemed to contain all of the terms and conditions agreed upon
with respect to the subject matter hereof, it being understood that
there are no outside representations or oral agreements.
(b) All notices, demands and the communications hereunder
shall be in writing. Unless otherwise expressly required or permitted
by the terms of this Agreement, any notice required or permitted to be
given hereunder by the parties shall be delivered by facsimile,
personally, by a reputable overnight delivery service or by certified
or registered mail to the parties at the facsimile number or addresses
set forth below (as the case may be), unless different addressees or
facsimile numbers are given by one party to the other:
AS TO SELLER:
-------------
c/o MIG Residential REIT, Inc.
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Director
▇▇▇▇▇▇▇ Center for Real Estate & Urban Economics
U.C. Berkeley
F602 ▇▇▇▇ School of Business #6105
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
c/o MIG Residential REIT, Inc.
Attn: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Director
Indiana University School of Business
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
c/o MIG Residential REIT, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
Wharton Real Estate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Lauder ▇▇▇▇▇▇▇ Hall
University of Pennsylvania
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
c/o MIG Residential REIT, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
31
MIG Realty Advisors
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
---------------
▇▇▇, Castle & ▇▇▇▇▇▇▇▇▇, LLP
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
AS TO BUYER:
------------
ASSOCIATED ESTATES REALTY CORPORATION
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
---------------
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
3200 National City Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Phone (▇▇▇) ▇▇▇-▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(c) Seller and Buyer each represents and warrants to the other
that such party has had no dealing with any real estate broker or agent
so as to entitle such broker or agent to any commission in connection
with the sale of the Property to Buyer, which representations and
warranties shall survive the closing of the transactions contemplated
hereby. If for any reason any such commission shall become due, the
party who retained such broker shall pay any such commission and agrees
to
32
indemnify and save the other party harmless from any and all claims for
any such commission and from any attorneys' fees and litigation or
other expenses relating to any such claim.
(d) This Agreement and the rights and duties hereunder may not
be assigned by Seller without the prior written consent of Buyer. This
Agreement and the rights and duties hereunder may not be assigned by
Buyer without the written consent of Seller; provided, that Buyer shall
have the right, without the consent of Seller, to designate a nominee
to take title to the Property on the Closing Date. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(e) After the Closing, the parties shall execute and deliver
such further documents and instruments of conveyance, sale, assignment,
transfer, assumption or otherwise, and shall take or cause to be taken
such other or further action, as either party shall reasonably request
at any time or from time to time within the one hundred twenty (120)
days immediately following the Closing Date in order to effectuate the
terms and provisions of this Agreement.
(f) This Agreement shall be governed by and construed in
accordance with the laws of the State in which the Property is
situated.
(g) This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
(h) If the date for performance of any act under this
Agreement falls on a Saturday, Sunday or federal holiday, the date for
such performance shall automatically be extended to the first
succeeding business which is not a federal holiday.
(i) Whenever in this Agreement reference is made to "Seller's
Knowledge", "to the best of Seller's Knowledge", "Seller's Actual
Knowledge", "Actual Knowledge of Seller" or "the Knowledge or Seller",
or any similar term or reference, it shall mean and be limited to the
actual conscious knowledge of Seller, without any investigation or
inquiry.
(j) Buyer agrees to keep confidential any information that it
has or will obtain relating to the Property or Seller with respect to
the Property and will not knowingly disclose that information
33
to any person or entity, other than (i) its employees, attorneys,
accountants, consultants and contractors performing under this
Agreement whom it directs to treat such information confidentially or
(ii) in connection with the disclosures that it will be making in
connection with the filing of the Registration Rights Agreement or any
other matters that it is required to disclose in connection with its
legal reporting requirements or as otherwise required in accordance
with applicable law based upon the advise of its legal counsel, without
the prior express written consent of Seller; provided, however, that
this provision shall not apply to data that is in the public domain or
is clearly not confidential in nature. The provisions of this Section
17(j) shall survive the Closing or any termination of this Agreement.
Buyer's undertakings set out in this Section 17(j) are of extraordinary
importance to Seller and damages for Buyer's breach hereof are not
readily ascertainable. Accordingly, Seller may obtain injunctive and
other equitable relief to enforce its rights under this Section 17(j).
Buyer agrees that upon any final adjudication by a court of competent
jurisdiction rendered in favor of Seller with respect to Buyer's breach
under this Section 17(j), Buyer will reimburse Seller, on demand, for
all costs and expenses (including attorneys' fees and expenses) paid or
incurred by Seller in enforcing the provisions of this Section 17(j).
(k) Buyer and Seller acknowledge and agree that neither of
them shall cause this Agreement, or any memorandum thereof, to be
recorded.
(l) Buyer covenants that on or before the Closing Date, it
will execute and deliver the Registration Rights Agreement attached
hereto and made a part hereof as EXHIBIT J.
34
IN WITNESS WHEREOF, the parties hereto have signed four
counterparts of this Agreement, each of which shall be deemed to be an original
document, as of the date set forth above, which shall be the date on which this
Agreement is fully executed.
SELLER:
MIG REIT [SUBSIDIARY]
By:
--------------------------------------
BUYER:
ASSOCIATED ESTATES REALTY
CORPORATION
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
35
EXHIBIT A - WINDSOR FALLS
LEGAL DESCRIPTION
LYING AND BEING in the County of Wake, State of North Carolina and being more
particularly described as:
BEGINNING at a drill hole in concrete lying in the intersection of the westerly
margin of the 60 foot right-of-way of Old Wake Forest Road and the northerly
margin of the 60 foot right of way of Pacific Drive, said drill hole having
North Carolina grid coordinates of N. 762416.06, E. 2115642.74, NAD 27 and being
located an Azimuth of 25-8-59, 607.17 feet (ground), 606.62 feet (grid) from
N.C.G.S. monument "▇▇▇▇▇▇" (with North Carolina grid coordinates of N.
761866.95, E. 2115384.94 NAD 27, combined grid factor .99909000) and running
thence from said point and place of BEGINNING with the northerly margin of the
60 foot right-of-way of Pacific Drive the following two (2) courses and
distances: (1) N. 81-53-27 W. 486.95 feet to an iron pipe set; and (2) with the
arc of a circular curve to the left having a radius of 318.75 feet, being
subtended by a chord bearing S. 86-08-31 W., a chord distance of 132.33 feet and
an arc distance of 133.30 feet to an iron pipe set; thence with the intersection
of the northerly margin of the 60 foot right-of-way of Pacific Drive and the
easterly margin of the 60 foot right-of-way of Memory Road with the arc of a
circular curve to the right having a radius of 30.00 feet, being subtended by a
chord bearing N. 65-47-28 W., a chord distance of 38.61 feet and an arc distance
of 41.94 feet to an iron pipe set lying in the easterly margin of the 60 foot
right-of-way of Memory Road; thence with the easterly margin of the 60 foot
right-of-way of Memory Road the following three (3) courses and distances; (1)
N. 25-44-39 W. 59.88 feet to an iron pipe set; (2) with the arc of a circular
curve to the right having a radius of 364.50 feet, being subtended by a chord
bearing N. 12-27-15 W., a chord distance of 167.58 feet and an arc distance of
169.09 feet to an iron pipe set; and (3) N. 00-50-08 E. 516.04 feet to an iron
pipe set marking the southwesterly corner of the property conveyed to ▇▇▇▇ ▇.
▇▇▇▇▇ by deed recorded in Deed Book 3166, Page 32 of the Wake County Public
Registry; thence with the southerly and easterly boundaries of the ▇▇▇▇▇
property (now or formerly) the following two (2) courses and distances: (1) S.
88-28-33 E. 127.22 feet to an iron pipe set; and (2) N. 01-42-42 E. 228.40 feet
to an existing iron pipe marking the common northeasterly corner of the ▇▇▇▇ ▇.
▇▇▇▇▇ property (now or formerly), the southeasterly corner of the land conveyed
to ▇▇▇ Ruffty by deed recorded in Deed Book 4191, Page 485 of the Wake County
Public Registry, and the southwesterlymost corner of the land conveyed to the
Wake County Board of Education by deed recorded in Deed Book 2046, Page 289 of
the Wake County Public Registry; thence with the southerly boundary of the Wake
County Board of Education property (now or formerly) the following three (3)
courses and distances: (1) N. 89-34-54 E. __.93 feet to an existing iron pipe;
(2) S. 17-49-10 _. 39.98 feet to an existing iron pipe; and (3) S. 88-10-43 E.
426.30 feet to an existing iron pipe marking the southeasterly corner of the
Wake County Board of Education property (now or formerly) and lying in the
westerly boundary of the property conveyed to ▇▇▇▇ ▇▇▇▇▇▇▇ by deed recorded in
Deed Book 2593, page 409 of the Wake County Public Registry; thence with the
westerly and southerly boundaries of the ▇▇▇▇▇▇▇ property (now or formerly) the
following three (3) courses and distances: (1) S. 00-42-38 W. 191.09 feet to a
found, bent and replaced iron pipe; (2) S. 00-35-20 E. 563.38 feet to an iron
pipe set marking the southwesterly corner of the ▇▇▇▇▇▇▇ property (now or
formerly); and (3) S. 82-01-34 E. 152.87 feet to an iron pipe set lying in the
easterly margin of the 60 foot right-of-way of Old Wake Forest Road; thence with
the easterly margin of the 60 foot right-of-way of Old Wake Forest Road the
following two (2) courses and distances: 91) S. 26-32-54 W. 236.77 feet to an
iron pipe set; and (2) S. 25-20-14 W. 3.41 feet to the point and place of
BEGINNING, containing 14,286 acres (or 622,293 square feet), more or less.
SAVE AND EXCEPT the following tract:
LYING AND BEING in the County of Wake, State of North Carolina and being more
particularly described in follows:
BEGINNING at an iron pipe set marking the northeasterly corner of the ▇▇▇ ▇▇▇▇▇▇
(Lot 3) property (now or formerly), said iron pipe also being N. 82-02-21 W.
99.83 feet from an iron pipe set marking the southwesterly corner of the ▇▇▇▇
▇▇▇▇▇▇▇ property (now or formerly) and running thence with the easterly boundary
of the ▇▇▇ ▇▇▇▇▇▇
36
(Lot 3) property (now or formerly) S. 04-28-06 E. 199.10 feet to an iron pipe
set marking the southeasterly corner of the ▇▇▇ ▇▇▇▇▇▇ (Lot 3) property (now or
formerly) and lying in the northerly margin of an existing 30 foot easement;
thence with the northerly margin of the 30 foot easement S. 82-02-21 E. 84.65
feet to an iron pipe set; thence S. 00-08-19 E. 3.30 feet to an iron pipe set;
thence N. 82-16-08 W. 473.80 feet to an existing iron pipe; thence with the
western terminus of the existing 30 foot easement and the westerly boundary of
the ▇▇▇ ▇▇▇▇▇▇ (Lot 1) property (now or formerly) N. 00-55-39 E. 228.26 feet to
a concrete monument found at the northwesterly corner of the ▇▇▇ ▇▇▇▇▇▇ (Lot 1)
property (now or formerly) and running thence with the northerly boundary of the
▇▇▇ ▇▇▇▇▇▇ (Lot 1) property (nor or formerly) S. 81-59-58 E. 120.15 feet to a
concrete monument found at the northeasterly corner of the ▇▇▇ ▇▇▇▇▇▇ (Lot 1)
property (now or formerly) and the northwesterly corner of the ▇▇▇▇▇ ▇▇▇▇▇▇▇
property (now or formerly); thence with the northerly boundary of the ▇▇▇▇▇
▇▇▇▇▇▇▇ property (now or formerly) S. 81-58-38 _. 120.83 feet to a concrete
monument found at the northeasterly corner of the ▇▇▇▇▇ ▇▇▇▇▇▇▇ property (now or
formerly) and the northwesterly corner of the ▇▇▇ ▇▇▇▇▇▇ (Lot 3) property (now
or formerly) thence with the northerly boundary of the ▇▇▇ ▇▇▇▇▇▇ (Lot 3)
property (now or formerly) S. 82-02-21 E. 129.00 feet to the point and place of
BEGINNING, containing 2.031 acres (88,456 square feet), more or less.
The net tract to be conveyed contains 12.255 acres or 533,837 square feet, more
or less and is the same property conveyed to CT Falls Limited Partnership by
deeds recorded in Book 5655, page 576, book 5655, Page 595, Book 5655, page 592,
Book 5655, page 590, Book 5655, page 578, Book 5655, page 582 and Book 5655,
Page 586 in the Wake Public Registry
37
EXHIBIT A - 20TH AND ▇▇▇▇▇▇▇▇ APARTMENTS
Exhibit A
DESCRIPTION OF LAND
The land referred to is located in Maricopa County, Arizona, and is described
as:
▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, according to the plat of record in the office
of the County Recorder of Maricopa County, Arizona, recorded in Book 332 of
Maps, Page 38.
38
EXHIBIT A - PEACHTREE APARTMENTS
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
A tract of land being part of U.S. Survey 415, Township 45 North, Range 4 east
of the 5th Principal meridian, City of Chesterfield, St. Louis County, Missouri
and being more particularly described as follows:
All of Peachtree, a Subdivision in St. Louis County, Missouri, as per plat
thereof recorded in Plat Book 274 page 7 of the St. Louis County Records.
And being also described as:
Beginning at a point on the Southerly right of way line of Olive Street (60 foot
wide) Road said point also being the Northwesterly corner of a tract of land
conveyed to ▇▇▇▇ ▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇ as recorded in Book 7616 page 1261 of the
St. Louis County Records; thence South 32 degrees 18 minutes 06 seconds East a
distance of 430.45 feet; thence North 57 degrees 26 minutes 23 seconds east a
distance of 125.62 feet; thence South 32 degrees 16 minutes 30 seconds East a
distance of 750.65 feet; thence South 57 degrees 25 minutes 43 seconds West a
distance of 797.22 feet; thence North 33 degrees 15 minutes 15 seconds West a
distance of 150.00 feet; thence North 57 degrees 22 minutes 21 seconds East a
distance of 185.04 feet; thence North 33 degrees 00 minutes 27 seconds West a
distance of 200.03 feet; thence North 57 degrees 32 minutes 41 seconds East a
distance of 75.39 feet; thence North 33 degrees 01 minutes 25 seconds West a
distance of 243.14 feet; thence South 57 degrees 19 minutes 47 seconds West a
distance of 134.47 feet; thence North 32 degrees 43 minutes 28 seconds West a
distance of 157.83 feet; thence North 57 degrees 26 minutes 23 seconds East a
distance of 363.25 feet; thence North 32 degrees 14 minutes 26 seconds West, a
distance of 428.28 feet to the Southerly right of way line of Olive Street (60
foot wide) Road and the beginning of a non-tangent curve to the right having a
radius of 4,538.66 feet with a chord bearing North 56 degrees 33 minutes 29
seconds East; thence Northeasterly along said curve and Southerly right of way
line a distance of 139.66 feet; thence North 57 degrees 26 minutes 23 seconds
East along said Southerly right of way line a distance of 51.82 feet to the
point of beginning, containing 564,712 square feet or 12.964 acres, more or
less, all situated in St. Louis County, Missouri.
This description described all that property described in a commitment for Title
Insurance issued by First American Title Insurance Company dated June 16, 1995
and numbered 307932-18S-61-0671, and all that property described in warranty
deed recorded in Book 9046 Page 2152.
39
EXHIBIT A - ▇▇▇▇▇▇ PLACE
ALL THAT TRACT or parcel of land lying and being in Land ▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and being more particularly described as
follows:
BEGIN at an iron pin set at the intersection of the southeastern margin of the
right-of-way of Chantilly Drive (right-of-way width varies) with the western
margin of the right-of-way of Chantilly Drive (50-foot right-of-way); thence
running southerly along the western margin of the right-of-way of Chantilly
Drive (50-foot right-of-way) South 06(degree)27'27" West, a distance of 209.04
feet to an iron pin set; thence leaving the western margin of the right-of-way
of Chantilly Drive (50-foot right-of-way), and running westerly South
81(degree)03'25" West, a distance of 514.84 feet to an iron pin set; thence
running South 00(degree)11"7""West, a distance of 292.00 feet to a 3/4-inch
crimp top pipe found; thence running North 72(degree)36"1""West, a distance of
181.72 feet to a 1/2-inch re-rod found; thence running South
61(degree)27"2""West, a distance of 204.04 feet to a 1/2-inch open top pipe
found; thence running South 13(degree)34'51" West, a distance of 177.99 feet to
a 1/2-inch re-rod found; thence running South 88(degree)08'43" West, a distance
of 157.54 feet to a 1/2-inch re-rod found; thence running North 06(degree)31'31"
West, a distance of 262.00 feet to an iron pin set; thence running North
47(degree)02'10" West, a distance of 107.19 feet to a concrete right-of-way
monument located on the southeastern margin of the right-of-way of Chantilly
Drive (right-of-way width varies); thence running along the southeastern margin
of the right-of-way of Chantilly Drive (right-of-way width varies), North
58(degree)56'51" East, a distance of 312.48 feet ot a point; thence continuing
along said margin North 59(degree)42'31" east, a distance of 157.15 feet to a
point; thence continuing along said margin North 69(degree)41'03" East, a
distance of 275.29 feet to a concrete right-of-way monument; thence continuing
along said margin North 76(degree)05'31" east, a distance of 547.64 feet to an
iron pin set, which is the POINT OF BEGINNING, said property containing 7.377
acres, as shown on that certain As-Built Survey for MIG REIT/▇▇▇▇▇▇ Place, Inc.,
a Florida corporation, and Old Republic National Title Insurance Company,
containing 2 pages, dated March 20, 1989, last revised March 1, 1995, prepared
by Crusselle, ▇▇▇▇▇▇▇▇▇ & Associates, and bearing the seal of W. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇., GRLS No. 2236.
EXHIBIT A
40
EXHIBIT A - HAMPTON POINT
EXHIBIT A
---------
LEGAL DESCRIPTION OF THE LAND
Parcel "C" in the subdivision known as Knightsbridge as per the plat recorded in
Plat Book 120 at Plat No. 14134, among the land records of ▇▇▇▇▇▇▇▇▇▇ County,
Maryland.
41
EXHIBIT A - ▇▇▇▇▇ ▇▇▇▇▇
Description
7.5423 Acre Parcel of the Land Known as
Section 11 and 12 of "The Village" Located on
The Southeast Side of Hooks Lane,
Northeast of Reisterstown Road,
Third Election District, Baltimore County, Maryland
Beginning for the same on the southeast side of Hooks Lane, sixty feet
wide, and at the northwest corner of the land shown on the plat entitled "The
Village, Sections 9, 10, 11, and 12" and recorded among the Land Records of
Baltimore County in Plat Book E.H.K., Jr. 52, page 120, thence running with and
binding on the southeast side of Hooks Lane, referring all courses of this
description to the Baltimore County Grid Meridian, (1) North 55 degrees 26
minutes 23 seconds East 448.46 feet to a point on the southwest side of Granary
Drive (also designated Parcel D) shown on said plat, thence binding on the
southwest and southeast sides of said Granary Drive seven courses: (2) South 34
degrees 33 minutes 37 seconds East 234.33 feet, thence (3) North 55 degrees 26
minutes 23 seconds east 8.00 feet, thence (4) south 34 degrees 33 minutes 37
seconds East 452.71 feet, thence (5) Southeasterly by a curve to the left with
the radius of 99.00 feet, the arc distance of 150.81 feet, the chord of said arc
being South 78 degrees 12 minutes 04 seconds East 136.65 feet, thence (6) North
58 degrees 09 minutes 28 seconds east 227.25 feet, thence (7) Northeasterly by a
curve to the right with the radius of 153.00 feet, the arc distance of 41.95
feet, the chord of said arc being North 66 degrees 00 minutes 43 seconds East
41.82 feet, and thence (8) North 73 degrees 51 minutes 58 seconds East 110.36
feet to intersect the northeast outline of the land shown on said plat, thence
binding on a part of said outline (9) South 16 degrees 08 minutes 02 seconds
East 10.00 feet to a point located on the northwest right-of-way line of the
Baltimore Beltway, as shown on ▇▇▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇, thence binding on said northwest
right-of-way line, three courses: (10) South 73 degrees 51 minutes 58 seconds
West 130.10 feet, thence (11) South 58 degrees 09 minutes 28 seconds West 511.59
feet, and thence (12) South 48 degrees 18 minutes 48 seconds West 190.90 feet,
thence leaving said right-of-way line and binding on the southwest outline of
the land shown on the plat herein referred to (13) North 41 degrees 22 minutes
57 seconds West 812.80 feet to the point of beginning; containing 7.5423 acres
of land, more or less.
Being all of Sections 11 and 12 of "The Village, Sections 9, 10, 11 and
12" and recorded among the Land Records of Baltimore County in Plat Book E.H.K.,
Jr. 52, Page 120.
Being also all of the land described as Exhibit "A" which by deed dated
July 2, 1985, and recorded among the Land Records of Baltimore County in Liber
E.H.K., Jr. 6956, Folio 213, was conveyed by Four Villages Limited Partnership
unto Maple Limited Partnership.
Project No. 81057.S3 (L81057S3)
March 31, 1995
43
EXHIBIT A - DESERT OASIS
EXHIBIT "A"
THE LAND REFERRED TO IN THIS POLICY IS SITUATED IN THE CITY OF PALM DESERT,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
PARCEL 1 OF PARCEL MAP NO. 15031, AS SHOWN BY MAP ON FILE IN BOOK 82 PAGES 33
AND 34 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;
EXCEPTING THEREFROM THOSE PORTIONS THEREOF INCLUDED WITHIN TRACT NO. 15588-1, AS
SHOWN BY MAP ON FILE IN BOOK 116 PAGES 37 AND 38 OF MAPS, AND TRACT NO. 15588-2,
AS SHOWN BY MAP ON FILE IN BOOK 116 PAGES 29 AND 40 OF MAPS, BOTH OF RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA;
ALSO EXCEPTING AN UNDIVIDED ONE-HALF INTEREST IN ALL MINERALS, GAS, OIL,
PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES AS RESERVED BY ▇▇▇ ▇. ▇▇▇▇▇▇
AND ▇▇▇▇ ▇. ▇▇▇▇▇▇, HUSBAND AND WIFE, IN DEED RECORDED MAY 4, 1955 IN BOOK 1732
PAGE ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
ALSO EXCEPTING THE REMAINING ONE-HALF INTEREST IN ALL MINERALS, GAS, OIL,
PETROLEUM, NAPHTHA AND OTHER HYDROCARBON SUBSTANCES, LYING BELOW A DEPTH OF
500.00 FEET FROM EXISTING SURFACE, IN THE NORTHEAST QUARTER OF SAID SECTION 12
(EXCEPT THE NORTH HALF OF SAID NORTHEAST QUARTER) AS CONVEYED TO ▇▇▇▇ ▇. ▇▇▇▇▇▇,
AN UNMARRIED WOMAN, BY DEED RECORDED FEBRUARY 7, 1969 AS INSTRUMENT NO. 12521 OF
OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, WHICH SAID DEED RESERVES ALL
RIGHTS OF ENTRY UPON SAID LAND ABOVE SAID DEPTH OF 500.00 FEET, EXCEPT FOR THE
RIGHT TO EXPLORE FOR AND/OR RECOVER SAID MINERALS AND SUBSTANCES FROM THE WEST
100.00 FEET OF THE SOUTH 150.00 FEET OF SAID NORTHEAST QUARTER.
44
EXHIBIT A - FLEETWOOD APARTMENTS
EXHIBIT A
---------
REAL PROPERTY
-------------
A tract of land containing 4.499 acres, more or less, situated in the ▇▇▇▇
▇▇▇▇▇▇▇ Survey, Abstract Number 80, in the City of Houston, ▇▇▇▇▇▇ County, Texas
and being all of FLEETWOOD VILLAGE APARTMENTS SUBDIVISION, according to the map
or plat thereof, recorded at Film Code No. 355118 of the Map Records of ▇▇▇▇▇▇
County, Texas, and also containing 3045 square feet of land out of the Reserve
"C", FLEETWOOD, SECTION FOUR, as shown on Plat recorded in Volume 237, Page 54
of the Map Records of ▇▇▇▇▇▇ County, Texas, and being more particularly
described as follows:
Fleetwood Village Apartments
4.499 Acres
▇▇▇▇ ▇▇▇▇▇▇▇ Survey, A-80
City of Houston
▇▇▇▇▇▇ County, Texas
FIELD NOTE DESCRIPTION to a tract of land containing 4.499 acres, more or less,
situated in the ▇▇▇▇ ▇▇▇▇▇▇▇ Survey, Abstract Number 80, in the City of Houston,
▇▇▇▇▇▇ County, Texas and being all of Fleetwood Village Apartments Subdivision
according to the map or plat thereof recorded by Film Code Number 355118 in the
▇▇▇▇▇▇ County Map Records and also 3045 square feet of land out of Reserve "C"
in Fleetwood Section Four Subdivision according to the map or plat thereof
recorded in Volume 237, Page 54 of the ▇▇▇▇▇▇ County Map Records, said 4.499
acres being more particularly described by metes and bounds as follows:
BEGINNING at a found 5/8 inch iron rod marking the intersection of the south
right-of-way line of Memorial Drive (100' ROW) with the east right-of-way line
of Fleetwood Place Drive (60' ROW), same being on the east end of a 15 foot
cutback;
THENCE, S 87(degree) 23' 00" E, along the south right-of-way line of said
Memorial Drive a distance of 328.8 feet to a found 5/8 inch iron rod marking the
point of curvature of a curve to the left;
THENCE, in an easterly direction continuing along the south right-of-way line of
said Memorial Drive and along the arc of said curve to the left having a radius
of 1960.08 feet and subtending a central angle of 01(degree) 08' 40" a length of
39.15 feet and having a chord of S 87(degree) 57' 20" E, a distance of 39.15
feet to a found 5/8 inch iron rod for the northeast corner of the tract herein
described, same being on the west right-of-way line of a 20 foot alley as
dedicated by the recorded plat of Fleetwood Section Three Replat according to
the map or plat thereof recorded in Volume 224, Page 91 of the ▇▇▇▇▇▇ County Map
Records;
THENCE, S 03(degree) 16' 07" E, along the west right-of-way line of said alley a
distance of 426.87 feet to a found 5/8 inch iron rod marking the point of
curvature of a curve to the right;
THENCE, in a southerly direction, continuing along the west right-of-way line of
said alley and along the arc of said curve to the right having a radius of
578.00 feet and subtending a central angle of 05(degree) 32' 32" a length of
55.91 feet and having a chord of S 00(degree) 29' 51" E, a distance of 55.89
feet to a found 5/8 inch iron rod for the southeast corner of the tract herein
described;
45
THENCE, N 87(degree) 23' 00" W, along the north line of Fleetwood West Section
One as recorded in Volume 266, Page 52 of the ▇▇▇▇▇▇ County Map Records a
distance of 431.80 feet to a found 5/8 inch iron rod on the east right-of-way
line of the aforementioned Fleetwood Place Drive for the southwest corner of the
tract herein described;
THENCE, N 02(degree) 54' 40" E, along the east right-of-way line of said
Fleetwood Place Drive a distance of 465.04 feet to a found 5/8 inch iron rod on
the south end of a 15 foot cutback for the most southerly northwest corner of
the tract herein described;
THENCE, N 47(degree) 45' 50" E, along said 15 foot cutback a distance of 21.27
feet to the POINT OF BEGINNING and containing 4.499 acres of land, more or less.
46
EXHIBIT A-1
PORTFOLIO PROPERTIES
1. ▇▇▇▇▇ ▇▇▇▇▇
2. Hampton Point
3. ▇▇▇▇▇▇ Place
4. Fleetwood
5. Peachtree
6. Twentieth and ▇▇▇▇▇▇▇▇
7. Desert Oasis
8. Windsor Falls
47
EXHIBIT B - WINDSOR FALLS
Windsor Falls Model Inventory
1. 2 Barstools
2. 16 cubic ft. refrig. Hotpoint
3. Hotpoint Oven
4. GE Range Hood
5. Hotpoint Dishwasher
6. GE Garbage Disposal
7. Wood Burning Fireplace
8. Dining Room Table & 4 Chairs & Centerpiece
9. Couch
10. Corner Entertainment Center
11. 5 Window Treatments
12. Coffee Table
13. Sitting Chair in LR--Also called Armchair
14. Deck Table with 2 Chairs
15. Assorted Fake Plants & Decorations
16. 2 Beds--Fullsize--with Matching Sheets & Pillows
17. 2 Dressers with Mirrors
18. Sitting thing at head of bed
19. Nightstand with lamp 1st bedroom and 2nd bedroom
20. Sitting chair in back bedroom
21. Fourteen Assorted pictures & mirrors
48
Office
3 computers
2 printers
3 horizontal file cabinets
8 conference chairs
2 desk chairs
2 conference tables
1 copier
2 servers
1 display case
1 vertical file cabinet
1 sofa
2 club chairs
1 coffee table
2 end tables
3 lamps
4 decorative Ficus trees
1 oriental rug
2 upholstered benches
1 wooden bench
2 rocking chairs (outside office)
1 kitchen table with 2 chairs
various mirrors and pictures, etc.
nine window treatments
4 office phones
1 vacuum for office
3 white boards
One set of gas logs
One water cooler
One ▇▇▇▇ Spunk oven
One coffee maker
One timeclock
49
Pool Supplies
45 chaise lounges
4 round tables with umbrellas and weights
20 pool chairs
3 ashtrays
4 gas grills
Fitness Center
1 Diamondback Recumbent Bike/electric
1 Diamondback Upright Bike/electric
1 Landice Treadmill/electric
1 California Apollo Weight Training Center
1 Diamondback Stairstepper/electric
1 NexStep Stairstepper
3 framed posters
1 water fountain
1 doctors scale
1 TV with built-in VCR
2 ceiling fans
Laundry Room
1 TV
50
EXHIBIT B - 20TH AND ▇▇▇▇▇▇▇▇ APARTMENTS
PERSONAL PROPERTY
Washing Machines 206
Dryers 206
Stoves 204
Refrigerators 204
Microwave Ovens 60
Exercise Equipment
Weight Machine 1
Treadmill 1
Stairstepper 1
EFX Machine 1
Office Equipment
Desks 3
Credenza 1
Filing Cabinets 3
Computers 2
Printer 1
Couch 1
Table with 6 chairs 1
Copier 1
51
EXHIBIT B - PEACHTREE APARTMENTS
PEACHTREE APARTMENTS PERSONAL PROPERTY
APARTMENTS
----------
Each apartment (156 total) contains a full appliance package consisting of GE
electric stove, frost free refrigerator w/icemaker, dishwasher, microwave
oven/range hood, full sized washer and dryer. Individual gas furnaces are
typically Trane as are electric central air conditioning units.
CLUBHOUSE
---------
The Clubhouse and Leasing Center contains the following items:
Fitness Center ---- Hoist Fitness Center
Various hand weights
TDS Weight Bench
Bio Dyne Vertical Press
Diamondback HRT 1000R Recumbent Bicycle
True 700 Treadmill
True 980 Treadmill
GE 25" color TV
Leasing Center/Clubroom -- Konica 1015 Copier
Sharp UX 175 fax machine
GE Refrigerator, stove, dishwasher and
microwave oven
CompuDyne Computer w/color monitor and
keyboard
Panasonic printer KX-P1150
Computer hutch/desk
Writing Table
2 side chairs, 1 desk chair
Dark wood credenza
Sofa table w/2 upholstered benches
2 end tables
1 coffee table
6 piece sectional sofa
RCA Color TV
Toshiba VCR
Dining table and 4 chairs
Various accessories
Manager's Office --- 2 side chairs
1 desk chair
1 desk w/return
Hutch
File cabinet
Credenza
HP DeskJet 540
HyTech computer w/DataSys color monitor, and keyboard
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ #903)
------------------------------------------
Sofa 2 wicker chairs w/small desk
Coffee table Dining table w/4 chairs
Chair Sofa Table
Armoire Double bed w/wicker headboard
Wicker nightstand Wicker dresser w/mirror
POOL COURTYARD
--------------
Pool furniture
Outdoor electric Jacuzzi w/cover
2 Ducane gas bbq grills
2 wood picnic tables
MAINTENANCE SHOP
----------------
Golf Cart and battery charger for same
Turbo torch set
WC-15 Freon Recovery unit
Weed Eater
Craftsman Blower-Vac
Weed Eater Blower
Kwikset Titan Lock keying kit
Dolly
Clean Machine Power Washer
2 Nitrogen Tanks
32' Ladder
Wet Vac
1 set Walkie talkies
53
EXHIBIT B - ▇▇▇▇▇▇ PLACE
PERSONAL PROPERTY
Leasing Office
Sofa 1
Chairs 2
Coffee Table 1
Scotsman Refrigerator 1
Scotsman Icemaker 1
Microwave Oven 1
Coffee Maker 1
Pedestal Table 1
Plant Stand 1
Manager's Office
Desk 1
Credenza 1
File cabinet 2 drawer 1
File cabinet 4 drawer 4
Large desk chair 1
Small desk chair 1
Wing Chairs 2
Picture 1
Computer (Compudyne) 1
Monitor (Compaq) 1
HP Deskjet Printer 1
Freezer 1
Leasing Office
Desk 1
Credenza 1
Bookshelf 1
Desk Chair 1
Wing Chairs 2
Computer 1
Monitor 1
Deskjet Printer 1
Dot Matrix Printer 1
Copier 1
Model
Sofa 1
Bookshelf 1
Glass coffee table 1
Dining room table 1
Chairs 2
Queen size bed 1
Double Dresser 1
▇▇
▇▇▇▇▇▇▇ ▇ - ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phase 1
21 chaise lounge
14 patio chairs
6 42" round acrylic tables
7 28" round acrylic tables
1 18" round acrylic tables
4 Vinyl umbrellas
1 42' 2 seat picnic table
5 umbrella bases
4 trash receptacles
2 clay planters
1 recycling container
12 various pictures
2 cordless phones
Phase 2
18 chaise lounge
14 patio chairs
4 42" round acrylic tables
3 18" round acrylic tables
3 vinyl umbrellas
3 umbrella bases
4 trash receptacles
1 clay planters
1 barrell planter
Maintenance Shop
2 snow blowers
1 10" table saw
2 sump pump
3 hand clamps
1 10" deck saw
3 hurricane fans
1 K-50
1 3' ladder
1 8' ladder
1 50" retractable extension cord
1 vice
1 electric wire wheel grinder
2 augers
1 spanner wrench
1 25 gallon wet vac w/wand
1 work mate bench
1 ▇▇▇▇▇▇ ▇▇▇▇▇▇
8 shovels
1 a/c recovery unit
2 dolleys
2 golf cars
2 cordless drills
55
1 sawzall
1 belt sander
1 sewer snake 350
1 fire cabinet
1 glue gun
Manager's Office
1 filing cabinet
1 desk phone
1 HyTech computer
1 Comp AOC color monitor
1 Hewlett Packard 650 bubble jet printer
1 bulletin board
1 trash can
1 calculator
Leasing Office
3 Meridian Norstar phones
3 trash cans
1 Canon NP 2120 Copier
1 Sharp UV100 Fax machine
2 Comp AOC Spectrum monitor
2 HY Tech Computer
1 HP Laser Jet 4 Plus
1 typewriter IBM Selectric
4 calculators
3 desklamps
6 Two-way radios
1 Panasonic KX P1150 Dot Matrix printer
Clubhouse
2 Barstools
1 set of fireplace tools
1 toaster
1 microwave
Maintenance Shop
Phase 1
1 desk
2 filing cabinets
1 desk phone
1 key cutting machine
56
EXHIBIT B - ▇▇▇▇▇ ▇▇▇▇▇
OFFICE INVENTORY
----------------
OFFICES FITNESS CENTER
------- --------------
2 Computers 1 Electric Treadmill
3 Printers 1 Man Powered Treadmill
1 Copier 1 Stair Climber
1 Shredder 1 Nordic Rider
1 Fax Machine 1 Recumbent Bicycle
4 Filing Cabinets 1 Nordic Track Glider
2 Phones
2 Office Desks KITCHEN
3 Office Chairs -------
3 Misc. Chairs Microwave
1 Typewriter
CLUBHOUSE
---------
1 White Couch
1 Flowered Chair
1 Wo
1 Gla
2 Bla
1 Ent
2 Boc
1 TV
1 Ster
1 VCR
1 CD
2 Ster
57
EXHIBIT B - FLEETWOOD APARTMENTS
FLEETWOOD INVENTORY
CLUBROOM
Entertainment Center
27" Zenith TV
Zenith VCR
4 8' silk trees
2 wicker chairs
1 green and red chair
1 green couch
1 glass coffee table
1 disk hutch
Leasing table and 2 chairs
1 marble table with pedestal
3 silk plants
3 bird cages
OFFICE KITCHEN
20" Electric range
18' compact undercounter dishwasher
Microwave
Refrigerator
OFFICE
Sharp copier
Technics stereo receiver
Compact disc player
2 drawer file cabinet
Desk chair
2 polaroid cameras
11 wall pictures through out office and clubroom
MANAGER'S OFFICE
2 2-drawer file cabinets
1 small
2-drawer file cabinet
Computer desk with credenza
3 desk plants Desk lamp
HyTech computer
Compudyne monitor
HP 540 printer
Desk chair 2 side chairs
58
ASSISTANT MANAGER OFFICE
Secretary desk Desk chair
4 office chairs
Brothers typewriter
2 desk plants
MAINTENANCE
K-23 Brazing kit (Uni-weld) and stand
Acetylene tank
Oxygen tank
Promar 3305 recovery unit
Vacuum pump
Manifold gauges with hoses
Appliance dolly
Small sink machine
Shampoo machine
Key machine (ILCO.008 mini mite)
Key machine (ILCO.025 manual machine)
Wet Vac
32' extension ladder
2 6' step ladders
Carpet rake
3' step ladder
1 washing machine used for parts
1 dryer used for parts
Titan paint machine (model #400)
3 Motorola PVO radio's
8' party table
Shovel, spade.
Treadmill (Broken)
POOL FURNITURE
16 lounge chairs
8 table chairs
4 low seat chairs
2 tables with umbrella's
2 trash cans
4 ash trays
6 plant pots
FITNESS CENTER
Stairmaster
2 treadmills
2 exercise bikes
6' silk plant
19" color TV
59
EXHIBIT C
ASSIGNMENT AND ASSUMPTION OF
----------------------------
LEASES AND CLOSING AGREEMENT
----------------------------
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND CLOSING AGREEMENT
(this "Agreement"), made and entered into as of the _____ day of
________________, 19___, by and between _____________________________
("Assignor"), and ASSOCIATED ESTATES REALTY CORPORATION, an Ohio corporation
("Assignee"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the provisions of that certain purchase
agreement between Assignor and Assignee dated ___________ (the "Purchase
Agreement"), Assignor has transferred an apartment project known as
______________________ located in ______________________ (the "Project"), to
Assignee; and
WHEREAS, in connection with such transfer of assets, the
parties have agreed to execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the entering into of this
Agreement and for other good and valuable consideration received to the full
satisfaction of Assignor and Assignee, the parties hereto agree as follows:
1. AGREEMENT AND ASSUMPTION.
(a) Assignor hereby conveys, transfers and assigns unto
Assignee, its successors and assigns, all right, title and interest, as of the
date hereof, which Assignor has or may have in and to (i) all leases, written or
oral, and tenancies with tenants with respect to all or any portion of the
Project (the "Tenant Leases") and (ii) all assignable maintenance and service
contracts, supply contracts, insurance policies (to the extent that Assignee
elects to assume them) and other assignable agreements, contracts and contract
rights relating to the ownership or operation of the Project, or any part
thereof (the "Project Contracts") and (iii) all assignable leases of equipment,
vehicles and other tangible personal property leased by Assignor and used by
Assignor in connection with the ownership and operation of the Project (the
"Personal Property Leases").
(b) Assignee hereby accepts the foregoing assignment and
agrees to keep, perform and observe (i) all of the obligations, terms and
conditions of the Tenant Leases, the Project Contracts and the Personal Property
Leases, first arising from and after or relating to any period of time after the
date of this Agreement and (ii) all obligations and liabilities under the
Tenant Leases relating to the tenant deposits (including, without limitation,
security deposits) and prepaid rent.
2. CONVEYANCE OF OTHER PROPERTY. Assignor hereby conveys, sells,
transfers, assigns and delivers to and vests in Assignee, its successors and
assigns all of Assignor's right, title and interest in and to the following
(collectively the "Personal Property"):
(a) all furnishings, furniture, equipment, supplies and other
personal property owned by Assignor, used or usable in connection with the
Project and located on or in the Project;
60
(b) all licenses, permits, consents, authorizations, approvals
and certificates of any regulatory, administrative or other governmental agency
or body, if any, issued to or held by Assignor and related to the ownership of
the Project, to the extent transferable;
(c) all deposits and escrowed amounts with holder of any
indebtedness of Assignor which encumbers the Project, prepaid rentals under the
Tenant Leases, cash, accounts and notes receivable, and all other miscellaneous
deposits, receivables and prepaid expenses (including, without limitation,
prepaid insurance premiums) related to the ownership or operation of the
Project;
(d) all transferable guaranties, warranties and other
intangible rights pertaining to the Project, or any part thereof including,
without limitation, all transferable guaranties, and warranties relating to the
construction of the Project including all rights under architects and
construction contracts;
(e) all books of accounts, customer lists, files, papers and
records relating to the Project or Assignor's business with respect thereto; and
(f) the right to use the name "_____________________."
Assignor warrants to Assignee that it has good title to the
Personal Property (other than the right to use the name "__________________")
free and clear of all mortgages, pledges, liens, security interests,
encumbrances and restrictions.
3. LIMITATION ON ASSUMPTION OF OBLIGATIONS. With the exception of the
liabilities and obligations set out in the Purchase Agreement or expressly
assumed by Assignee pursuant to Section 1 of this Agreement, Assignee shall not,
by execution and delivery of this Agreement, be deemed to have assumed or
otherwise become responsible for any liability or obligation of any nature of
Assignor, whether relating to Assignor's business or any of Assignor's assets,
operations, businesses or activities, or claims of such liability or obligation,
matured or unmatured, liquidated or unliquidated, fixed or contingent, or known
or unknown, whether arising out of occurrences prior to, at or after the date
hereof.
4. POWER OF ATTORNEY. Assignor hereby constitutes and appoints
Assignee, its successors and assigns, the true and lawful attorney of Assignor,
with full power of substitution, having full right and authority, for the
benefit of Assignee, its successors and assigns:
(i) to demand and receive any and all assets and
properties hereby conveyed, transferred, assigned and
delivered;
(ii) to give receipts, releases and acquittances for
or in respect of the same or any part thereof;
(iii) to collect, for the account of Assignee, all
receivables and other items of Assignor transferred to
Assignee as provided herein and to endorse in the name of
Assignor any checks received on account of any such
receivables or items;
(iv) to institute and prosecute against parties other
than Assignor, in the name of, at the expense of and for the
benefit of Assignee, any and all proceedings at law, in equity
or otherwise which Assignee, its successors and assigns may
deem proper with regard to the assets and properties hereby
conveyed, transferred, assigned and delivered;
C-2
61
(v) to collect, assert or enforce against parties
other than Assignor any claim, right, title, debt or account
hereby conveyed, transferred, assigned and delivered; and
(vi) to defend or compromise against parties other
than Assignor any and all actions, suits or proceedings in
respect of any of the assets and properties hereby conveyed,
transferred, assigned, delivered, as Assignee, its successors
or assigns, shall consider desirable.
Assignor hereby declares that the foregoing powers are coupled with an interest
and shall not be revocable by it in any manner or for any reason.
5. MISCELLANEOUS.
(a) This Agreement shall be deemed to contain all of the terms
and conditions respecting the subject matter hereof, it being understood that
there are no outside representations or oral agreements on which either party is
relying.
(b) Neither the execution and delivery of this Agreement nor
the performance by either party of its obligations hereunder shall in any manner
affect or impair the representations and warranties of the parties contained in
the Purchase Agreement, all of which shall survive for the respective periods
set forth in the Purchase Agreement.
(c) This Agreement shall be effective as of the date hereof.
(d) Notice required or permitted to be given hereunder by the
parties shall be given as set forth in the Purchase Agreement.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of ___________________.
(f) This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
(g) This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.
C-3
62
IN WITNESS WHEREOF, Assignor and Assignee have hereunto
subscribed their names as of the date first above written.
Signed and acknowledged ASSIGNOR:
in the presence of:
--------------------------------------
By:
-------------------------- -----------------------------------
Print Name: Its:
--------------- ----------------------------------
--------------------------
Print Name:
---------------
ASSIGNEE:
ASSOCIATED ESTATES REALTY
-------------------------- CORPORATION, an Ohio corporation
Print Name:
---------------
By:
-------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Print Name: Vice President
---------------
STATE OF )
--------------- )SS:
COUNTY OF )
-------------
BEFORE ME, a Notary Public in and for said County and State,
personally appeared ___________________, who acknowledged that he did sign the
foregoing instrument as _________________ of _____________________, that the
same is his free act and deed of said corporation and his free act and deed
personally and as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal at ____________, ___________, this _____ day of ____________, 19___.
------------------------------
Notary Public
C-4
63
STATE OF )
----------- )SS:
COUNTY OF )
-----------
BEFORE ME, a Notary Public in and for said County and State,
personally appeared ASSOCIATED ESTATES REALTY CORPORATION, an Ohio corporation,
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, its Vice President, who acknowledged that he did sign the
foregoing instrument on behalf of said corporation and that the same is his free
act and deed individually and as such officer and the free act and deed of said
corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal at _________, __________, this ____ day of ___________, 19___.
------------------------------
Notary Public
This instrument prepared by:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
3200 National City Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
C-5
64
EXHIBIT D
CERTIFICATE OF SELLER REGARDING PROJECT
---------------------------------------
CONTRACTS AND PERSONAL PROPERTY LEASES
--------------------------------------
The undersigned certifies that, to the undersigned's Actual
Knowledge (as defined in the Purchase Agreement pursuant to which this
certificate is delivered) the only Project Contracts and Personal Property
Leases as defined by the Purchase Agreement between the undersigned and
Associated Estates Realty Corporation dated ______________ existing as of the
Closing Date, are as follows:
1.
---------------------------------------
2.
---------------------------------------
3.
---------------------------------------
IN WITNESS WHEREOF, the undersigned have executed this
Certificate as of the _____ day of ______________, 19__.
------------------------------
By:
--------------------------------------
Its:
------------------------------------
65
EXHIBIT E
______________ __, 19___
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Associated Estates Realty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇▇:
The undersigned (the "Seller") hereby certifies that to the
best of its Actual Knowledge (as that term is defined in the Purchase Agreement
pursuant to which this certificate is delivered), the financial books and
records (the "Books and Records") relating to the ______________ (the "Project")
are available at _____________________________. We have directed our agent who
is in possession of the Books and Records to make all of the Books and Records,
or true copies thereof and any backup documentation available for inspection and
copying by Associated Estates Realty Corporation ("AERC") and their auditors in
connection with AERC's reporting requirements on reasonable notice to the
undersigned.
------------------------------
By:
-------------------------------
Its:
------------------------------
66
EXHIBIT F
SELLER'S CERTIFICATE
--------------------
_______________________________ (the "Seller"), hereby
certifies, represents, and warrants to Associated Estates Realty Corporation
("AERC") pursuant to Section ______ of the Purchase Agreement by and between the
Seller and AERC dated as of ____________________________ (the "Agreement"), that
except as set forth on Attachment 1 attached hereto and made a part hereof, the
representations and warranties of Seller set forth in the Agreement were true
and correct when made and are true and correct as of the Closing Date. The
Seller acknowledges and agrees that the disclosure of the matters set forth on
Attachment 1 shall in no way affect the rights of Buyer to decline to proceed to
the Closing (as that term is defined in the Agreement) or any way modify or
amend the provisions of Section 8(a)(i) of the Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate as
of the _____ day of ______________, 19___.
-------------------------------
By:
--------------------------------
Its:
--------------------------------
67
ATTACHMENT 1
68
EXHIBIT G
ASSOCIATED ESTATES REALTY CORPORATION
BUYER'S CERTIFICATE
Associated Estates Realty Corporation, an Ohio corporation
("AERC") certifies, represents, and warrants pursuant to Section _____ of the
Purchase Agreement dated as of ______________ by and between
_______________________ and AERC (the "Agreement"), that except as set forth on
Attachment 1 attached hereto and made a part hereof, the representations and
warranties of AERC as set forth in the Agreement were true and correct when made
and are true and correct as of the Closing Date. AERC acknowledges and agrees
that the disclosure of the matters set forth on Attachment 1 shall in no way
affect the rights of Seller (as defined in the Agreement) to decline to proceed
to the Closing (as defined in the Agreement) or any way modify or amend the
provisions of Section 8(b)(i) of the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of the ______ day of ________________, 19___.
ASSOCIATED ESTATES REALTY
By:
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
69
ATTACHMENT 1
70
EXHIBIT H
1. The closing of the Merger provided for in the Merger Agreement (as
defined in the Purchase Agreement of which this exhibit is a part).
2. The closing under that certain Contribution and Partnership Interest
Purchase Agreement whereby Buyer's or Buyer's affiliate will acquire a
partnership interest in (i) MIG/Orlando Development, Ltd., (ii)
MIG/Hollywood Development, Ltd., (iii) MIG/Pines Development, Ltd. and
(iv) HP Advisors.
3. Associated Estates Realty Corporation's acquisition of any number of
the apartment properties listed on Exhibit A of the Merger Agreement,
provided that the aggregate independently appraised value of such
apartment properties must be greater than or equal to $184,000,000
(inclusive of the property that is the subject of the Purchase
Agreement of which this exhibit is a part).
71
EXHIBIT I
INVESTMENT REPRESENTATION LETTER
This Investment Representation Letter (this "Letter") is
delivered in connection with the Purchase Agreement dated __________ , 1998 (the
"Purchase Agreement") between __________ ("Seller") and Associated Estates
Realty Corp., an Ohio corporation ("AERC"), which, among other things, provides
for the issuance to Seller of __________ (______) shares of AERC's common stock
(the "Shares"). In connection with the investment in the Shares, Seller hereby
represents and warrants to AERC as follows:
1. AUTHORITY. Seller has the full power, right and authority to execute
and deliver this Letter. All authorizations and consents necessary for the
execution and delivery of this Letter have been given and all authorizations and
approvals required by law or contract with respect to Seller's right and power
to make the representations and warranties set forth herein have been obtained.
2. ACQUIRED ENTIRELY FOR OWN ACCOUNT. Seller (a) is acquiring the
Shares for Seller's own account for investment only, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof; (b) has
no present intention of selling, granting any participation in, or otherwise
distributing the Shares; and (c) does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Shares, in each case except to the extent registration of the Shares is
contemplated by the Purchase Agreement and, in the case the Seller is a group
trust or corporation, in dissolution thereof and otherwise in distribution to
the beneficial owners or shareholders thereof, as applicable.
3. INVESTMENT EXPERIENCE, AUTHORITY AND ADVICE. Seller has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of investments generally, and of Seller's
investment in the Shares in particular. The Shares are securities of the type
permitted to be acquired by Seller as an investment. Seller is able to bear (a)
the economic risk of an investment in the Shares and (b) any lack of liquidity
inherent in holding the Shares, with the full understanding that Seller can lose
its entire investment. Seller acknowledges that the loss of its entire
investment in the Shares will not have a material adverse effect on its business
operations. Seller has been advised by AERC to seek expert legal, tax, and
accounting advice in connection with its investment decision.
4. 1934 ACT REPORTED MATERIALS. AERC has furnished to Seller copies of
all such forms, reports and documents filed by AERC with the Securities and
Exchange Commission (the "SEC") since January 1, 1994. Seller has read and is
familiar with all such reports, including without limitation, AERC's latest
annual report to the SEC on Form 10-K, AERC's latest quarterly report to the SEC
on Form 10-Q, and any current reports of AERC since the date of the latter to
the SEC on Form 8-K, and has read and is familiar with the audited financial
statements and unaudited monthly or quarterly, as the case may be, financial
statements of AERC (such reports and financial statements, collectively, the
"Evaluation Material"), access to which was afforded by AERC to Seller prior to
the execution of this Letter and the investment by Seller in the Shares.
5. ARTICLES OF INCORPORATION. Seller acknowledges that the Articles of
Incorporation of AERC, as amended, as of the date hereof contain restrictions on
the ownership and transfer of the Shares.
6. AVAILABILITY OF INFORMATION. In order to evaluate the merits and the
risks inherent in acquiring and holding the Shares, AERC has made available to
Seller, during the course of this transaction and prior to the investment in the
Shares, the opportunity to ask questions of, and receive
72
answers from, AERC and those persons acting on AERC's behalf, concerning the
terms and conditions of this Letter and this transaction, as well as the
information contained in the Evaluation Material. Seller has had all such
questions answered to its satisfaction and has been supplied all additional
information deemed necessary by Seller to verify the accuracy of the information
provided to it by AERC to the extent that AERC possesses such information or can
acquire it without unreasonable effort or expense. Seller has had a full and
complete opportunity to examine all documents relating to AERC that have been
made available by AERC and is familiar with the contents thereof and, in
particular, with all risk factors associated with any investment in AERC. Seller
has had access to such information as it deems material in making the investment
decision called for.
7. RESTRICTED SECURITIES. Except to the extent registration of the
Shares is contemplated by the Purchase Agreement, Seller acknowledges that
neither the Shares nor the sale thereof to Seller has been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under any state
securities laws. Seller understands that the Shares are "restricted securities"
under the Securities Act and, therefore, cannot be resold unless they are
subsequently registered under the Securities Act, or unless an exemption from
such registration is available, including SEC Rule 144, as may be in effect from
time to time ("Rule 144"); that Seller may not resell or otherwise dispose of
all or any part of the Shares, except as permitted by law, including, without
limitation, any and all applicable provisions of the Purchase Agreement or any
regulations under the Securities Act or any state securities laws; and that AERC
will restrict the transfer of the Shares in accordance with the representations
contained in this paragraph. Seller represents that it is generally familiar
with Rule 144, and that Seller understands the resale limitations imposed
thereby and by the Securities Act.
8. FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, Seller further agrees not to make any
disposition of all or any portion of the Shares unless:
a. There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such
disposition is made in accordance with such Registration
Statement; or
b. (i) Seller has notified AERC of the proposed disposition
and has furnished AERC with a detailed statement of the
circumstances surrounding the proposed disposition, and (ii)
Seller has furnished AERC with an opinion of counsel,
reasonably satisfactory to AERC, that such disposition will
not require registration of such shares under the Act; or
c. Such disposition is made pursuant to Rule 144.
9. LEGENDS. It is understood that the Shares may bear one or all of the
following legends:
a. "These securities have not been registered under the
Securities Act of 1933, as amended (the "Act"). They may not
be sold, offered for sale, pledged, hypothecated or otherwise
transferred in the absence of a registration statement in
effect with respect to the securities under such Act or an
opinion of counsel satisfactory to AERC that such registration
is not required or unless sold pursuant to Rule 144 of such
Act."
b. "The Common Shares represented by this certificate are
subject to restrictions on transfer for the purpose of
preserving the Corporation's status as a Real Estate
Investment Trust under the Internal Revenue Code of 1986, as
amended. Subject to certain provisions of the Corporation's
Amended and Restated Articles of Incorporation, no Person may
Beneficially Own Common Shares in excess of 4.0% of the
outstanding
73
Common Shares of the Corporation (unless such Person is an
Existing Holder) and no Person (other than an Existing Holder
who Constructively Owns in excess of 9.8% of the Common Shares
immediately following the consummation of the Initial Public
Offering) may Constructively Own Common Shares in excess of
9.8% of the outstanding Common Shares of the Corporation. Any
Person who attempts to Beneficially Own or Constructively Own
Common Shares in excess of the above limitations must
immediately notify the Corporation. All capitalized terms in
this legend have the meanings defined in the Corporation's
Amended and Restated Articles of Incorporation, a copy of
which, including the restrictions on transfer, will be sent
without charge to each shareholder who so requests. If the
restrictions on transfer are violated, certain of the Common
Shares represented may be subject to repurchase by the
Corporation on the terms and conditions set forth in the
Corporation's Amended and Restated Articles of Incorporation."
(The Company's Amended and Restated Articles of Incorporation,
as amended, are attached hereto as Exhibit A.)
c. Any legend required by any applicable state laws.
IN WITNESS WHEREOF, Seller has executed this Investment
Representation Letter effective as of __________ , 1998.
SELLER
By:
----------------------------------
Its:
----------------------------------
74
EXHIBIT J
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is
entered into as of _____________, 1998, by and between ASSOCIATED ESTATES REALTY
CORPORATION, an Ohio corporation (the "Company"), and each of the persons who
are signatories hereto (each, a "Holder").
WHEREAS, each Holder has entered into a purchase agreement for
the sale of real property by Holder to the Company (the "Purchase Agreement")
and a portion of the consideration paid by the Company for such real property is
a number of common shares, without par value, of the Company specified in the
Purchase Agreement; and
WHEREAS, the Company has agreed to provide the Holders with
certain registration rights with respect to the shares received by those
Holders, subject to the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual
promises and agreements set forth herein, and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"PERMITTED TRANSFEREE" shall mean, in the case of a Holder
that is a group trust or corporation, any Person that is a beneficial owner or
shareholder, respectively, therein.
"PERSON" shall mean an individual, partnership, corporation,
trust, or unincorporated organization, or a government or agency or political
subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Shares covered by such Registration
Statement, and by all other amendments and supplements to such prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein.
"REGISTRABLE SHARES" shall mean (i) the Shares received in
consideration for real property pursuant to the Purchase Agreements (excluding
(a) Shares for which a Registration Statement relating to the sale thereof shall
have become effective under the Securities Act and which have been disposed of
under such Registration Statement, and (b) Shares sold pursuant to Rule 144
under the Securities Act, and (ii) any securities of the Company that may be
issued or distributed with respect to, in exchange or substitution for, or upon
conversion of such Registrable Shares, or on account of such Registrable Shares
75
as a result of any stock dividend, stock split, reverse split or other
distribution, merger, combination, consolidation, recapitalization or
reclassification or otherwise. All references in this Agreement to Rule 144 and
subsections thereof shall refer to corresponding provisions of future law.
Registrable Shares includes Shares held by other holders pursuant to other real
estate purchase agreements by and between such holders and the Company, as
contemplated by that certain Agreement and Plan of Merger, dated November 5,
1997, among the Company, MIG Realty Advisors, Inc. ("MIGRA") and certain
stockholders of MIGRA.
"REGISTRATION EXPENSES" shall mean all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees; (ii) all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualification of any of the Registrable Shares and
the preparation of a Blue Sky Memorandum) and compliance with the rules of the
NASD; (iii) all out-of-pocket expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates and other documents relating to the
performance of and compliance with this Agreement; (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Shares on any securities exchange or exchanges; and (v) the fees and
disbursements of counsel for the Company (other than its internal counsel) and
of the independent public accountants of the Company, including the expenses of
any special audit or "cold comfort" letters required by or incident to such
performance and compliance. Registration Expenses shall specifically exclude
underwriting discounts and commissions relating to the sale or disposition of
Registrable Shares by the Holder, the fees and disbursements of counsel
representing the Holder, and transfer taxes, if any, relating to the sale or
disposition of Registrable Shares by the Holder, all of which shall be borne by
the Holder in all cases.
"REGISTRATION STATEMENT" shall mean any registration statement
of the Company and any other entity required to be a registrant with respect to
such registration statement pursuant to the requirements of the Securities Act
which covers any of the Registrable Shares on an appropriate form, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SHARES" shall mean common shares, without par value, of the
Company.
2. REGISTRATION.
(a) As soon as reasonably practicable, but no later
than sixty days after the Closing Date (as defined in the Purchase Agreement),
the Company at its sole cost and expense, will prepare and file with the SEC a
Registration Statement on Form S-3 under Rule 415 promulgated under the
Securities Act relating to the Registrable Shares (the "Initial Registration
Statement").
(b) The Company will use all reasonable efforts to
have the Initial Registration Statement declared effective by the SEC as
promptly as practicable (which effective date may or may not occur before the
Closing Date as defined in the Purchase Agreement) and to keep the Registration
Statement continuously effective for a period ending on the date that is one (1)
year following the date the Initial Registration Statement is declared effective
by the SEC or until such earlier date on which the Holders no longer hold any
Registrable Shares covered by the Initial Registration
76
Statement. Holder acknowledges and agrees that the Company's exercise of
"reasonable efforts" under this Section 2(b) in connection with keeping the
Initial Registration Statement continuously effective, shall not require the
Company to alter or otherwise revise its disclosure practices nor shall the
Company's obligation to use such "reasonable efforts" require the Company to
accelerate any discussions or take any other actions in an effort to reduce the
Black-Out Periods (as defined in Section 8). However, the Company will not
invoke Black-Out Periods in excess of an aggregate of 180 days. In addition, if,
in the aggregate, the Black-Out Periods exceed 120 days, then the Company's
obligation to maintain the effectiveness of the Initial Registration Statement
pursuant to this Section 2(b) will be extended by that number of days in excess
of 120.
(c) If, at any time while the Registrable Shares are
outstanding (without any obligation to do so) the Company proposes to file
another Registration Statement under the Securities Act with respect to an
offering of Shares which covers sales of Shares by holders of demand
registration rights granted by the Company, the Company shall give prompt
written notice of such proposed filing to the Holders. The notice referred to in
the preceding sentence shall offer each of the Holders the opportunity to
register such amount of Registrable Shares as they may request (a "PIGGYBACK
REGISTRATION"). Subject to the provisions of Section 3 below, the Company shall
include in such Piggyback Registration and in the registration and qualification
for sale under the blue sky or securities laws of the various states, all
Registrable Shares for which the Company has received a written request for
inclusion therein within ten (10) calendar days after the notice referred to
above has been given by the Company to the Holders. Each Holder shall be
permitted to withdraw all or part of his Registrable Shares from a Piggyback
Registration at any time prior to the effective date of such Piggyback
Registration.
(d) During the period beginning one year after the
date of issuance of the Registrable Shares and ending two years after the date
of such issuance, if the Company proposes to file a Registration Statement under
the Securities Act with respect to an underwritten offering by the Company, for
its own account, of any class of equity security (or any options, warrants or
other securities convertible into, or exchangeable or exercisable for, equity
securities) to be offered for cash (other than in connection with the
registration of securities issuable pursuant to an employee stock option, stock
purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act) (a
"Company Registration"), then the Company will give written notice of the
proposed filing to the Holders at least 20 days before the filing date, and the
notice will offer the Holders the opportunity to register such number of
Registrable Shares as each Holder may request. If such offer is accepted by
written notice to the Company within 10 days of the giving of the written notice
provided for in the preceding sentence, the Company will use its best efforts to
cause the managing underwriter or underwriters thereof to permit, the Holders of
Registrable Shares requested to be included in the Company Registration for such
offering to include such Registrable Shares in such offering on the same terms
and conditions as the corresponding securities of the Company included therein.
The number of Registrable Shares to be offered for the account of Holders will
be 20% of the number of Shares to be offered by the Company (for example, if the
Company proposes to offer 100,000 Shares, the number of Registrable Shares to be
offered will be 20,000 for an aggregate offering of 120,000 Shares). If the
Company receives acceptances from Holders to register Registrable Shares in
excess of 20% of the number of Shares to be offered by the Company, then the
amount of securities to be offered for the accounts of Holders of Registrable
Shares shall be reduced PRO RATA to the extent necessary to reduce the total
amount of Registrable Shares to be included in such offering to 20% of the
number of Shares to be offered by the Company. If, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the Registration Statement filed in connection with such
Company Registration, the Company determines for any reason not to proceed with
the proposed Company Registration, the Company may, at its election, give
written notice of such determination to each Holder of Registrable Shares
requested to be included in such registration and thereupon will be relieved of
its obligation to register any Registrable Shares in connection with such
registration.
77
The Company will only be obligated to include Registrable
Shares in one Company Registration as determined by the Company in consultation
with the managing underwriters. The Company will have no obligation to include
Registrable Shares in a spot or "rapidly offered common" offering. Upon
completion of a Company Registration in which notice to Holders pursuant to this
Section 2(d) was provided and the Registrable Shares of the applicable Holders
were sold, the Holders will have no further right to include Registrable Shares
in a Company Registration.
All Holders requesting to have Registrable Shares included in
the Company Registration must sell their Registrable Shares to the underwriters
who shall have been selected by the Company on the same terms and conditions as
apply to the Company, with such differences, including any with respect to
indemnification and contribution, as may be customary or appropriate in combined
primary and secondary offerings.
Any Holder who elects to participate in a Company Registration
must agree to enter into a contractual agreement with the managing underwriter
or underwriters of the offering to refrain from sale or distribution of
Registrable Shares (other than those Registrable Shares included in the Company
Registration) during the 90-day period beginning on the effective date of the
Registration Statement filed in connection with the Company Registration.
(e) The Company shall notify each Holder of the
effectiveness of each Registration Statement which covers Registrable Shares and
shall furnish to each Holder the number of copies of the Registration Statement
(including any amendments, supplements and exhibits), the Prospectus contained
therein (including each preliminary prospectus and all related amendments and
supplements) and any documents incorporated by reference in the Registration
Statement or such other documents as each Holder may reasonably request in order
to facilitate his sale of the Registrable Shares in the manner described in the
Registration Statement.
(f) The Company shall prepare and file with the SEC
from time to time such amendments and supplements to the Initial Registration
Statement and Prospectus used in connection therewith (the "Initial Prospectus")
as may be necessary to keep the Initial Registration Statement effective and to
comply with the provisions of the Securities Act with respect to the disposition
of all the Registrable Shares until the earlier of (i) such time as all of the
Registrable Shares have been disposed of in accordance with the intended methods
of disposition by the Holders as set forth in the Initial Registration Statement
or (ii) the date on which the Initial Registration Statement ceases to be
effective in accordance with the terms of this Section 2. The Company shall file
any necessary listing applications or amendments to the existing applications to
cause the Registrable Shares registered under any Registration Statement to be
then listed or quoted on the primary exchange or quotation system on which the
Registrable Shares are then listed or quoted and use its reasonable efforts to
have the Registrable Shares so listed.
(g) The Company shall promptly notify the Holders of,
and confirm in writing, any request by the SEC for amendments or supplements to
any Registration Statement or the Prospectus related thereto or for additional
information. In addition, the Company shall promptly notify the Holders of, and
confirm in writing, the filing of any Registration Statement or any Prospectus,
amendment or supplement related thereto or any post-effective amendment to the
Registration Statement and the effectiveness of any post-effective amendment.
(h) At any time when a Prospectus relating to a
Registration Statement is required to be delivered under the Securities Act, the
Company shall immediately notify the Holders of the happening of any event as a
result of which the Prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state any
material fact required to
78
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. In such event, the
Company shall promptly prepare and furnish to each Holder a reasonable number of
copies of a supplement to or an amendment of such Prospectus as may be necessary
so that, as thereafter delivered to the purchasers of Registrable Shares, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Company will, if necessary, amend the Registration Statement of
which such Prospectus is a part to reflect such amendment or supplement.
(i) The Company shall use its reasonable efforts to
comply with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable, an earning statement
covering the period of at least twelve months, beginning with the first fiscal
quarter beginning after the effective date of the Registration Statement, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(j) The Company shall use its reasonable efforts
(including, without limitation, calling for a meeting to obtain, through the use
of reasonable efforts, the approval of the Company's shareholders as required by
the New York Stock Exchange or its rules) to cause any Shares issued to Holders
to be approved for listing on the New York Stock Exchange, subject to official
notice of issuance.
3. STATE SECURITIES LAWS. Subject to the conditions set forth
in this Agreement, the Company shall, in connection with the filing of any
Registration Statement hereunder, file such documents as may be necessary under
the securities or "Blue Sky" laws of such states as a Holder may reasonably
request and otherwise use its reasonable efforts to have the Registrable Shares
registered, qualified or otherwise eligible for sale.
4. EXPENSES. The Company will bear all Registration Expenses
incurred in connection with Registration Statements filed pursuant to Section
2(a). In all cases, the Holders shall be responsible for any brokerage or
underwriting commissions and taxes of any kind (including, without limitation,
transfer taxes) with respect to any disposition, sale or transfer of Registrable
Shares sold by it and for any legal, accounting and other expenses incurred by
it. The Holders shall also bear their pro rata shares of any Registration
Expenses incurred in connection with any Piggyback Registration.
5. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Holder and its directors, officers, employees,
agents, trustees, and partners and each Person, if any, who controls such Holder
(within the meaning of the Securities Act or Exchange Act) against all losses,
claims, damages, actions, liabilities, costs and expenses (including without
limitation reasonable fees, expenses and disbursements of attorneys and other
professionals), joint or several, arising out of or based upon (a) any violation
or alleged violation by the Company of any rule or regulation promulgated under
the Securities Act or the Exchange Act or any state securities and, in each
case, any rule or regulations promulgated thereunder, applicable to the Company
and relating to action or inaction required of the Company in connection with
any Registration Statement or Prospectus, or (b) upon any untrue or alleged
untrue statement of material fact contained in the Registration Statement or any
Prospectus, (including, in each case, any amendments or supplements thereto) or
(c) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided that the
Company shall not be liable to a Holder in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon (x) an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, any such preliminary prospectus, final prospectus, summary
prospectus,
79
amendment or supplement in reliance upon and in conformity with information
regarding a Holder or his plan of distribution or ownership interests which was
furnished to the Company for use in connection with the Registration Statement
or the Prospectus contained therein by the Holder or the Holder's
representatives or (y) such Holder's failure to send or give a copy of the final
prospectus furnished to it by the Company through no fault of the Company at or
prior to the time such action is required by the Securities Act to the Person
claiming an untrue statement or alleged untrue statement or omission or alleged
omission if such statement or omission was corrected in such final prospectus.
The Company will reimburse such Holder and its directors, officers, employees,
agents, trustees and partners, and any Person who controls such Holder, for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, cost,
expense or action.
6. COVENANTS OF THE HOLDER. Each Holder hereby severally
agrees (a) to cooperate with the Company and to furnish to the Company all such
information concerning its plan of distribution and ownership interests with
respect to its Registrable Shares in connection with the preparation of the
Registration Statement and any filings with any state securities commissions as
the Company may reasonably request, (b) to deliver or cause delivery of the
Prospectus contained in the Registration Statement to any purchaser of the
shares covered by the Registration Statement from the Holder, and (c) to
indemnify the Company, its officers, directors, employees, agents,
representatives and affiliates, and each Person, if any, who controls the
Company within the meaning of the Securities Act, and each other Person, if any,
subject to liability because of his connection with the Company, against all
losses, claims, damages, actions, liabilities, costs and expenses arising out of
or based upon (i) any untrue statement or alleged untrue statement of material
fact contained in either a Registration Statement or the Prospectus contained
therein, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, if and
solely to the extent that such statement or omission occurs from reliance upon
and in conformity with written information regarding such Holder, its plan of
distribution or ownership interests, which was furnished to the Company by such
Holder or the Holder's representatives expressly for use therein or (ii) the
failure by such Holder to deliver or cause to be delivered the Prospectus
contained in the Registration Statement (as amended or supplemented, if
applicable) furnished by the Company to such Holder to any purchaser of the
Registrable Shares covered by the Registration Statement from such Holder
through no fault of the Company. The obligation of a Holder to provide
indemnification under this Section 6 shall be limited to the proceeds (net of
underwriting commissions and discounts) received by such Holder from the sale of
Registrable Shares under the Registration Statement which gives rise to such
obligation.
7. SUSPENSION OF REGISTRATION REQUIREMENT.
(a) The Company shall promptly notify each Holder of,
and confirm in writing, the issuance by the SEC of any stop order suspending the
effectiveness of any Registration Statement or the initiation of any proceedings
for that purpose. The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such Registration
Statement at the earliest possible moment.
(b) Notwithstanding anything to the contrary set
forth in this Agreement, the Company's obligation under this Agreement to use
all reasonable efforts to cause a Registration Statement and any filings with
any state securities commission to become or remain effective or to amend or
supplement a Registration Statement shall be suspended in the event and during
such period as circumstances exist (including without limitation (i) pending
negotiations relating to, or consummation of, a transaction or the occurrence of
an event that would require additional disclosure of material information by the
Company in the Registration Statement, as to which the Company has a bona fide
business purpose for preserving confidentiality or which renders the Company
unable to comply with the
80
Securities Act and the rules and regulations promulgated by the SEC thereunder);
and (ii) in the case of a Company Registration, if, and to the extent that, the
Company is advised by the underwriters that sale of Registrable Shares (except
for those Registrable Shares included in the Company Registration) would have a
material adverse effect on the offering (such circumstances being hereinafter
referred to as a "SUSPENSION EVENT")) that would make it impractical or
inadvisable to cause the Registration Statement or such filings to become
effective or to amend or supplement the Registration Statement, but such
suspension shall continue only for so long as such event or its effect is
continuing. The Company shall notify each Holder of the existence and, in the
case of circumstances referred to in clause (i) of this Section 7(b), nature of
any Suspension Event.
8. BLACK-OUT PERIOD. Following the effectiveness of any
Registration Statement and the filings with any state securities commissions,
each Holder agrees that he will not effect any sales of the Registrable Shares
pursuant to the Registration Statement or any such filings at any time after he
has received notice from the Company to suspend sales as a result of the
occurrence or existence of any Suspension Event with respect to such
Registration Statement or so that the Company may correct or update such
Registration Statement or such filing (a "Black-Out Period"). Each Holder may
recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement or such filings following further notice to such effect
from the Company, which notice shall be given by the Company not later than
three (3) days after the conclusion of any such Suspension Event.
9. RULE 144. For a period of two (2) years following the
Closing Date (as defined in the Purchase Agreement), the Company covenants that
it will file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder (or, if
the Company is not required to file such reports, it will, upon the request of
Holder, make publicly available other information so long as necessary to permit
sales under Rule 144 of the Securities Act ("Rule 144")) and it will take such
further action as Holder may reasonably request, all to the extent required from
time to time to enable Holder to sell the Shares without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
as may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of Holder, the Company will
deliver to Seller a written statement as to whether it has complied with such
requirements.
10. ADDITIONAL SHARES. The Company, at its option, may
register, under any Registration Statement (other than the Initial Registration
Statement) and any filings with any state securities commissions filed pursuant
to this Agreement (other than in connection with the Initial Registration
Statement), any number of unissued Shares of the Company or any Shares of the
Company owned by any other shareholder or shareholders of the Company.
11. REGISTRATION PROCEDURES.
(a) The Company shall provide a transfer agent and
registrar for the Registrable Shares not later than the effective date of such
Registration Statement and thereafter maintain such a transfer agent and
registrar; and otherwise cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Shares to be
sold and not bearing any restrictive legends, other than as provided in the
Company's Articles of Incorporation;
(b) The Company shall provide such information and
make available appropriate management personnel as may reasonably be requested
by the Holders in connection with any "road show" or related selling activity.
(c) The Company shall deliver to each Holder, at
least thirty (30) days prior to the filing of a Registration Statement, a notice
which sets forth the name and number of shares
81
proposed to be shown in the Registration Statement with respect to such Holder,
to the extent such Holder is to be listed in the Registration Statement as a
selling stockholder; PROVIDED THAT, if such Holder provides corrected
information for inclusion in the Registration Statement within fifteen (15) days
after the date the notice is delivered, the Company shall instead include such
corrected information with respect to such Holder.
12. CONTRIBUTION. If the indemnification provided for in
Sections 5 and 6 is unavailable to an indemnified party with respect to any
losses, claims, damages, actions, liabilities, costs or expenses referred to
therein or is insufficient to hold the indemnified party harmless as
contemplated therein, then the Company or the Holder, whichever is the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, actions, liabilities, costs or expenses in such
proportion as is appropriate to reflect the relative fault of the Company, on
the one hand, and the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages, actions,
liabilities, costs or expenses as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Holder, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED, HOWEVER, that in no event shall the obligation of the Company or the
Holder, as indemnifying party, to contribute under this Section 10 exceed the
amount that such indemnifying party would have been obligated to pay by way of
indemnification if the indemnification provided for under Sections 5 or 6 hereof
had been available under the circumstances.
The Company and each Holder agree that it would not
be just and equitable if contribution pursuant to this Section 10 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph.
Notwithstanding the provisions of this Section 12, no
Holder shall be required to contribute any amount in excess of the amount by
which the proceeds (net of underwriting commissions and discounts) to such
Holder from the sale of such Holder's Registrable Shares sold pursuant to the
Registration Statement which give to such obligation to contribute (less the
aggregate amount of any damages which such Holder has otherwise been required to
pay in respect of such loss, claim, damage, liability, cost or expense arising
from the sale of the Registrable Shares) exceeds the amount of any damages that
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.
13. NOTICE; RIGHT TO DEFEND. Promptly after receipt by an
indemnified party under this Agreement of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Agreement, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, if the indemnifying party agrees in writing that it will be
responsible for any costs, expenses, judgments, damages and losses incurred by
the indemnified party with respect to such claim, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if the indemnified party reasonably
believes that representation of such indemnified party by the counsel retained
by the indemnifying party would be inappropriate due to actual
82
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Agreement only if and to the
extent that such failure is prejudicial to its ability to defend such action,
and the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party other than
under this Agreement.
14. SURVIVAL OF INDEMNITY AND CONTRIBUTION. The
indemnification and contribution provided by this Agreement shall be a
continuing right to indemnification and contribution and shall survive the
registration and sale of any securities by any Person entitled to
indemnification or contribution hereunder and the expiration or termination of
this Agreement.
15. NO OTHER OBLIGATION TO REGISTER. Except as otherwise
expressly provided in this Agreement, the Company shall have no obligation to
any Holder to register the Registrable Shares under the Securities Act.
16. AMENDMENTS AND WAIVERS. The provisions of this Agreement
may not be amended, modified, or supplemented or waived without the prior
written consent of (a) the Company and (b) Holders who, at the time of such
amendment, own a majority of the Registrable Shares then covered by this
Agreement.
17. NOTICES. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to the respective parties at
the following addresses (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt thereof):
If to the Company: Associated Estates Realty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
3200 National City Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holder: At the address set forth below that Holder's
signature.
In addition to the manner of notice permitted above,
notices given by the Company pursuant to Sections 2, 7 and 8 hereof may be
effected telephonically and confirmed in writing thereafter in the manner
described above.
83
18. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the parties hereto and their respective successors and permitted assigns
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may be assigned by a Holder solely to a
Permitted Transferee and may not be otherwise assigned and any attempted
assignment hereof by a Holder in violation of the foregoing will be void and of
no effect and shall terminate all obligations of the Company hereunder to such
Holder; PROVIDED THAT a Holder may assign his rights hereunder in connection
with any of the following types of dispositions of Registrable Shares:
(a) a disposition by the Holder pursuant to a pledge,
grant of security interest or other encumbrance effected in a bona fide
transaction with an unrelated and unaffiliated pledgee;
(b) a disposition to another Holder; and
(c) at the sole discretion of the Company, a
disposition to a "qualified institutional buyer" (as that term is defined in
Rule 144A promulgated under the Securities Act) or an "accredited investor" (as
that term is defined in Rule 501 of Regulation D under the Securities Act)
PROVIDED, FURTHER, however, that any such assignment shall be effective only if,
the disposition is permitted under applicable federal or state securities laws.
In the event a Holder assigns its rights hereunder,
the Registrable Shares shall remain subject to this Agreement and, as a
condition of the validity of such assignment, the transferee shall be required
to execute and deliver a counterpart of this Agreement (except that a pledgee
shall not be required to execute and deliver a counterpart of this Agreement
until it forecloses upon such Shares). Thereafter, such transferee (including,
without limitation, a Permitted Transferee) shall be deemed to be a Holder for
purposes of this Agreement.
19. AUTHORIZATION; NO CONFLICTS. The execution and delivery of
this Agreement by the Company and the performance by the Company of its
covenants and agreements under this Agreement have been, or at the time of such
performance will have been, duly authorized by all necessary corporate action on
the part of the Company, and all required consents to the transactions
contemplated hereby have been obtained by the Company, or at the time of such
performance will have been received by the Company. The execution, delivery and
performance by the Company of this Agreement, the fulfillment of and compliance
with the respective terms and provisions hereof and thereof, and the
consummation by the Company of the transactions contemplated hereby and thereby,
do not and will not: (a) conflict with, or violate any provisions of, the
Articles of Incorporation or Code of Regulations of the Company; (b) conflict
with, or violate any provision of, any statute, law, ordinance, regulation,
rule, order, writ or injunction having applicability to the Company or any of
its assets; (c) result in a breach or acceleration of the maturity of any loan
or credit agreement to which the Company is a party or by which any of its
assets may be affected; or (d) conflict with, result in any breach of, or
constitute a default under any agreement to which the Company is a party or by
which it or any of its assets are bound; except (in the case of clauses (b), (c)
and (d) above) for such conflicts, violations, breaches or defaults (i) as will
not have a material adverse effect on the business or financial condition of the
Company or the transactions contemplated herein, or (ii) with respect to which
consents or waivers shall be obtained prior to the Company's performance of its
obligations hereunder.
20. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
the obligations undertaken by them hereunder are unique and that there would not
be adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to (a)
compel specific performance of the obligations, covenants and agreements of any
other party under the Agreement in
84
accordance with the terms and conditions of this Agreement and (b) obtain
preliminary injunctive relief to secure specific performance and to prevent a
breach or contemplated breach of this Agreement in any court of the Unites
States or any State thereof having jurisdiction (each party waives the
requirement of the posting of any bond or security in connection with any
proceedings or any injunction issued in connection with this Section 20).
21. TIME OF THE ESSENCE. Time is of the essence in the
performance of this Agreement.
22. ATTORNEYS' FEES. Should either party employ attorneys to
enforce any of the provisions of this Agreement, the party against whom any
final judgement is entered agrees to pay the prevailing party all reasonable
costs, charges and expenses, including reasonable attorneys' fees, expended or
incurred by the prevailing party in connection therewith.
23. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
24. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio applicable to
contracts made and to be performed wholly within said State.
25. SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
26. ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be the complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
85
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
ASSOCIATED ESTATES REALTY CORPORATION
HOLDERS:
-----------------------------------
Address:
---------------------------
-----------------------------------
-----------------------------------
No. of Shares:
--------------------------
86
MIG Residential REIT
Comprehensive Property Due Diligence Checklist
-------------------------------------------------------------------------------------------------------------------------------
20TH & ▇▇▇▇▇ DESERT ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ WINDSOR
ITEM # ITEM CAMPELL ▇▇▇▇▇ OASIS FLEETWOOD POINT PLACE PEACHTREE FALLS
-------------------------------------------------------------------------------------------------------------------------------
1 Phase I Environmental Report X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
2 Survey X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
3 Appraisals X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
4 List of property employees and salaries X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
5 Form lease and all addendums X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
6 Maintenance, service, and supply
contracts X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
7 Plans and specifications of the
project X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
8 Personal property leases n/a n/a n/a N/a n/a X n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
9 List of all personal property X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
10 Current rent roll X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
11 Annual operating statements for the
past three years X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
12 Tax returns for the past three years X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
13 List of addresses for each X X X X X X X X
building/site
-------------------------------------------------------------------------------------------------------------------------------
14 Pending purchase orders for work to
be performed X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
15 All correspondence relating to any
pending eminent domain or other n/a n/a n/a N/a n/a n/a n/a n/a
similar action
-------------------------------------------------------------------------------------------------------------------------------
16 Real estate tax bills for the past X X X X X X X X
two years
-------------------------------------------------------------------------------------------------------------------------------
17 Owner's Title Insurance Policy X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
18 Three years insurance loss history
for the property X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
19 Certificates of occupancy X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
20 List of utility meters servicing the X X X X X X X X
property
-------------------------------------------------------------------------------------------------------------------------------
21 List of current vendors X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
22 Two years capital improvement history X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
23 Three year history of fire or other
casualty damage X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
24 Pool permit X n/a X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
25 Legal description X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
26 Site plan X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
27 1998 Operating Budgets including capital X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
28 Zoning compliance information
-------------------------------------------------------------------------------------------------------------------------------
29 Engineering Reports X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
30 1997 Operating Statements X X X X X X X X
-------------------------------------------------------------------------------------------------------------------------------
31 Pending Litigation Information X X X X X X
-------------------------------------------------------------------------------------------------------------------------------