Exhibit 10.2
Consolidated Copy
CONTRIBUTION
AGREEMENT
THIS CONTRIBUTION AGREEMENT (the
“ Agreement ”) is made as of July 27, 2004 by
and among American Campus Communities, Inc., a Maryland corporation
(the “ Company ”) and American Campus
Communities Operating Partnership LP, a Maryland limited
partnership (the “ Operating Partnership ” and,
together with the Company: the “ Company Entities
”) on the one part, and Reckson Strategic Venture Partners,
LLC, a Delaware limited liability company (“ RSVP
”), and RAP-ACP, LLC, a Delaware limited liability company
(“ RAP-ACP ”, and jointly and severally with the
RSVP: the “ Sponsors ”) on the other
part.
WHEREAS, RSVP has formed and is the
sole stockholder of the Company, and the Company is the sole
limited partner and, through American Campus Communities Holdings
LLC, its wholly-owned subsidiary, the sole general partner of the
Operating Partnership.
WHEREAS, the Company Entities were
formed for the purpose of (i) continuing the student housing
business previously owned and conducted, directly or indirectly, by
the Sponsors, and (ii) consummating the IPO (as defined
below).
WHEREAS, in connection with the
initial public offering (the “ IPO ”) of the
Company’s common stock, par value $.01 per share (the “
Common Stock ”), on April 26, 2004, the Company filed
with the Securities and Exchange Commission a registration
statement on Form S-11 identified as Registration No. 333-114813
(together with all amendments and supplements thereto, the “
Registration Statement ’).
WHEREAS, the parties hereto desire
to effect certain formation and structuring transactions outlined
in Exhibit A hereto (the “ Formation
Transactions ”) and otherwise conclude such agreements
under terms and conditions as are set forth herein.
NOW, THEREFORE, in consideration of
the mutual covenants and conditions set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company Entities and the Sponsors
agree as follows:
ARTICLE I.
FORMATION TRANSACTIONS AND
REDEMPTION AMOUNT
1.1. Formation Transactions.
Subject to the terms and conditions of this Agreement, each of the
Company Entities and each of the Sponsors hereby consents to each
of the Formation Transactions and agrees to take all actions
reasonably necessary or advisable to consummate, and to cause its
direct and indirect subsidiaries and affiliates, where applicable,
to consummate, the Formation Transactions. It is the intent of the
parties that, as a result of the Formation Transactions, the
Company Entities will own, directly or indirectly, all of the
interests previously owned by the Sponsors in the entities
identified in Schedule I hereto (the “ Student
Housing Entities ”), and through their ownership of such
Student Housing Entities, the Company Entities will succeed to all
of the student housing business previously conducted, directly or
indirectly, by the Sponsors (except to the extent set forth in the
Registration Statement).
1.2. Simultaneous Closing .
The Formation Transactions shall close simultaneously with the
closing of the IPO (the “ Closing ”). The date
on which the Formation Transactions close shall be the “
Closing Date .”
1.3. Redemption Amount . Upon
the Closing, RAP-ACP shall receive the Redemption Amount. As used
herein, the term “ Redemption Amount ” shall
mean the Gross Offering Proceeds less (i) all underwriting
discounts (excluding underwriting discounts payable with respect to
the Green Shoe (as defined below)); (ii) all fees, costs, expenses
and disbursements incurred by the Company Entities in connection
with the Formation Transactions and IPO, including, without
limitation, those items set forth on Exhibit B attached
hereto, net of any such expenses to the extent previously paid;
(iii) amounts needed to fully repay the outstanding balance and
accrued interest of the term indebtedness set forth on Exhibit
C hereto, together with all associated fees and penalties, net
of any such fees and penalties to the extent previously paid; (iv)
amounts needed to fully repay the outstanding balance and accrued
interest of the construction indebtedness set forth on Exhibit
C hereto, together with all associated fees and penalties, net
of any such fees and penalties to the extent previously paid; (v)
construction accounts payable with respect to the Construction
Properties; and (vi) the aggregate amount of the Completion Funds
and Escrowed Funds (both hereinafter defined) as of Closing (the
“Construction Reserve” ), and plus the other
items, if any, set forth on Exhibit D hereto. Items (i)
through (iv) above shall collectively be defined as the “
Transaction Costs. ” As used herein, the term “
Gross Offering Proceeds ” shall mean the product of
(x) the number of shares of Common Stock sold pursuant to the
Registration Statement, excluding any shares of Common Stock sold
pursuant to the underwriters’ exercise of their
over-allotment option as set forth in the Registration Statement
(the “ Green Shoe ”), multiplied by (y) the
gross offering price per share.
1.4. Construction
Properties.
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(a)
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Construction
Reserve.
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(i) For purposes of this Agreement,
the term “ Construction Properties ” shall mean
each of (1) Village at Temple, the property owned by ACT-Village at
Temple, LLC (“ ACT Temple” ), (2) Village at
Fresno State, the property owned by ACT-Village at Fresno State,
LLC (“ ACT Fresno” ) and (3) Village at CSU, the
property owned by ACT-Village at CSU, LLC (“ ACT
CSU” ); the term “ Completion Funds ”
means the difference between (1) the aggregate amount of the
original development budgets for the Construction Properties
approved by American-Campus Titan LLC and American Campus-Titan II
LLC that have not been paid to date and (2) the Escrowed Funds; the
term “ Escrowed Funds ” means $824,011 as of the
Closing, together with any amounts to be deposited by the Company
with Escrow Agent (hereinafter defined) as and when received from
Apex Construction Company with respect the Construction Properties
owned by ACT Fresno and ACT CSU (estimated as of today to be
approximately $400,000), representing the aggregate estimated
amount of savings with respect to the Construction Properties; and
the term “ Escrow Agent ” shall mean LandAmerica
Title Insurance Company.
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(ii) From and after the Closing, the
Company, may in its discretion, use the Completion Funds to (1)
complete, equip and provide for operating and marketing
expenditures that are related to putting each of the Construction
Properties into service (but are not part of the annual operating
budget) in accordance with the existing plans and specifications
with addendums as of the date hereof (the “ Approved Plans
and Specs ”) and in a manner consistent with the
historical business practices utilized to open properties owned by
the Company (“ Completion ”), (2) obtain
certificates of occupancy and other required governmental or
municipal approvals or permits for the Construction Properties
(“ Governmental Approvals ”) and (3) pay costs,
of alternate housing and related expenses with respect to each
Construction Property, and, in addition, liquidated damages with
respect to the Construction Property ground leased by ACT Temple,
in the event that the applicable Construction Property does not
achieve Completion and all Governmental Approvals have not been
obtained with respect to such Construction Property by the date
required pursuant to the terms of the student leases with respect
to each Construction Property, and, with respect to the
Construction Property ground leased by ACT Temple, the ground
lease, as amended, for such Construction Property (net of any
amounts received by the Company Entities and/or ACT Temple from any
third parties liable or potentially liable for causing such delays)
(“ Construction Delay Costs ”). If and to the
extent that the Completion Funds are insufficient to achieve
Completion of the Construction Properties, the Company may, subject
to the terms and conditions of Section 1.4(a)(iii) below, use the
Escrowed Funds to (1) achieve Completion of the Construction
Properties and (2) obtain Governmental Approvals and (3) pay for
Construction Delay Costs. Notwithstanding the above, no more than
$56,500 of the Escrowed Funds may be utilized by the Company to
complete construction of the Construction Properties owned by ACT
Fresno and ACT CSU, in the aggregate; provided, however, that such
amount shall be increased on a dollar-for-dollar basis to the
extent that any amounts received by the Company from Apex
Construction Company and subsequently deposited by the Company with
Escrow Agent as contemplated by Section 1.4(a)(i) are included
within the Escrowed Funds. In addition, the parties agree that in
no event may either the Completion Funds or the Escrowed Funds be
utilized (a) to fund expenditures accounted for in the
Company’s operating budgets or (b) for expenditures which are
inconsistent with the Company’s historical business practices
used to open properties owned by the Company.
(iii) Escrow Agent shall hold the
Escrowed Funds in escrow. From time to time, the Company may submit
a written claim to Escrow Agent (with a simultaneous copy being
sent to Sponsors) requesting disbursement of all or any portion of
the Escrowed Funds. Within ten (10) days following receipt of such
notice, Sponsors shall submit to Escrow Agent (y) an approval of
the Company’s requested disbursement or (z) a written
objection to all or any portion of the Company’s request (in
either event with a simultaneous copy being sent to the Company).
Amounts approved by Sponsors within such ten (10) day period
promptly shall be disbursed by Escrow Agent to the Company. If an
objection shall have been delivered by Sponsors as aforesaid or
Sponsors shall have not responded to the Company’s request
within such 10-day period, either party may refer such matter to
the American Arbitration Association (or such other third-party
mediator agreed upon by the parties hereto, the “
Arbitrator ”) for a determination that will be final
and binding upon both parties (the “ Final
Determination ”). The Arbitrator shall render its Final
Determination in writing to the Company and Sponsors within fifteen
(15) business days thereafter. Any fees and disbursements of the
Arbitrator shall be shared equally by the parties. In addition, the
parties hereto agree that any other disputes arising under this
Section 1.4(a) shall be subject to arbitration by
Arbitrator.
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(iv) Within sixty (60) days
following occurrence of Completion, procurement of all lien
releases (with respect to which the Company agrees to use
commercially reasonable efforts to obtain) and receipt of
certificates of occupancy with respect to all Construction Property
(“ Final Completion Event ”), the Company shall
pay the amount of any excess Completion Funds, and Escrow Agent
shall disburse any excess Escrowed Funds, not previously applied by
or paid or disbursed to the Company in accordance with the terms of
this Section 1.4, to RAP-RSVP Titan 5 LLC (“ NEWCO
”). Upon the occurrence of the Final Completion Event, the
Company shall have no further right to any remaining portion of the
Completion Funds nor any remaining portion of the Escrowed Funds
and the Company shall thereupon without any further action on its
part be deemed to have released, and hereby does release, the
Sponsors from any further claims of the Company in respect of any
further amounts regarding the Construction Properties or any costs
or liabilities incurred by the Company relating to the Construction
Properties.
(b) Fresno. The Company and
Sponsors shall cooperate, and use commercially reasonable efforts
to collect, as promptly as possible following the date hereof, the
balance of the insurance proceeds claimed by ACT Fresno in
connection with the fire that occurred at its Construction
Properties in 2003 (the “ Fresno Fire ”).
Subject to the provisions of the next immediate sentence, the
amount of any such insurance proceeds collected by the Company
Entities or ACT Fresno (the “ Collected Insurance
Proceeds ”) may be used by the Company to achieve
Completion, obtain any Governmental Permits and pay for
Construction Delay Costs with respect to the Construction Property
owned by ACT Temple (but not with respect to any of the other
Construction Properties) (the “ Temple Completion
Costs ”) but only to the extent the Temple Completion
Costs previously have not been satisfied utilizing the Completion
Funds pursuant to Section 1.4(a). Upon receipt by the Company
Entities or ACT Fresno of any such insurance proceeds, (i) if the
Temple Completion Costs shall have been satisfied, then any
Collected Insurance Proceeds received by the Company Entities or
ACT Fresno shall be held by them in trust for NEWCO and shall be
promptly remitted to NEWCO; (ii) if the Temple Completion Costs
shall have not been satisfied and there does not remain any
Completion Funds not previously delivered to the Company Entities,
then any Collected Insurance Proceeds received by the Company
Entities or ACT Fresno shall be deemed Completion Funds and may be
used at the Company’s discretion to satisfy the Temple
Completion Costs; and (iii) if the Temple Completion Costs shall
have not been satisfied and there remains Completion Funds not
previously delivered to the Company Entities, then any Collected
Insurance Proceeds received by the Company Entities or ACT Fresno
shall be delivered to Escrow Agent to be held as and part of the
Escrowed Funds; provided, however, that disbursements to the
Company from the Escrowed Funds of any Collected Insurance Proceeds
may be used only to satisfy Temple Construction Costs. Upon the
written request of Sponsors, and at no cost to the Company Entities
and/or ACT Fresno, the Company Entities and ACT Fresno shall,
subject to the continuing directions of the Sponsors, commence
litigation or such other legal proceedings as the Sponsors
reasonably shall request and against such persons and entities as
the Sponsors shall direct (the “ Insurance
Litigation” ) to seek to recover insurance proceeds
claimed by ACT Fresno in connection with the Fresno Fire. The
Company Entities and ACT Fresno shall cooperate with the Sponsors
in prosecuting any Insurance Litigation; provided,
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however, that neither the Company Entities nor
ACT Fresno shall be obligated to incur any costs or expenses in
connection with such cooperation regarding any Insurance
Litigation. Further, the Company Entities and ACT Fresno may not
agree to settle or otherwise compromise any claims against the
insurer for all or any portion of such insurance proceeds without
the prior written consent thereto by Sponsors. At the request of
Sponsors at any time following the satisfaction of the Temple
Completion Costs, the Company Entities and ACT Fresno shall either
(i) assign their claim for all remaining insurance proceeds to
NEWCO, or (ii) seek to enforce such claim against the insurer upon
receipt by the Company Entities or ACT Fresno of appropriate
indemnifications from Sponsors for all associated costs of such
enforcement actions, with any insurance proceeds collected through
such action to be remitted to NEWCO.
(c) Survival . The provisions
of this Section 1.4 shall survive the Closing but shall cease to be
binding upon the early termination of this Agreement pursuant to
the terms hereof.
1.5. Annual Meeting. On or
before the Closing, as reasonably necessary to consummate the IPO,
the Company shall convene its annual meeting of shareholders for
the purpose of (i) approving the amendment of the Company’s
Articles of Incorporation in the form annexed hereto as Exhibit
F-1 , (ii) approving the Company’s 2004 Incentive Award
Plan, in the form annexed hereto as Exhibit F-2 , and (iii)
electing as the sole members of the Board of Directors of the
Company the persons identified as such in the Registration
Statement, and RSVP shall vote its shares of the Company’s
capital stock at such meeting in support of such
resolutions.
1.6. Further Acts . The
Company Entities and the Sponsors shall perform, execute, and
deliver, or cause to be performed, executed, and delivered by their
direct or indirect subsidiaries, at the Closing or after the
Closing, any and all further acts, instruments, and agreements and
provide such further assurances as the other parties may reasonably
require to consummate the transactions and otherwise satisfy the
covenants and conditions contemplated hereunder.
ARTICLE II.
CONDITIONS TO
CLOSING
2.1. Company Conditions to
Closing . The obligations of each Company Entity hereunder are
subject to the satisfaction of the conditions set forth below on or
before the Closing.
(a) Representations and
Warranties True and Correct . The representations and
warranties herein of each of the Sponsors shall be true and correct
in all material respects as of the Closing Date;
(b) Covenants . The
obligations of the Sponsors hereunder, including without
limitation, with respect to the Formation Transactions, shall have
been performed or complied with in all material
respects;
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(c) Closing of IPO . The IPO
shall have been consummated simultaneously with or immediately
prior to the closing of the Formation Transactions and shall have
occurred by no later than September 30, 2004.
2.2. Sponsors’ Conditions
to Closing. The obligations of each of the Sponsors hereunder
are subject to the satisfaction of the conditions set forth below
on or before the Closing:
(a) Representations and
Warranties True and Correct . The representations and
warranties herein of each of the Company Entities shall be true and
correct in all material respects as of the Closing Date;
(b) Covenants . The
obligations of the Company Entities hereunder, including without
limitation, with respect to the Formation Transactions, shall have
been performed or complied with in all material respects;
and
(c) Closing of IPO . The IPO
shall have been consummated simultaneously with or immediately
prior to the closing of the Formation Transactions and shall have
occurred by no later than September 30, 2004.
2.3. “ Abandonment of
IPO . If, at any time prior to execution of the underwriting
agreement (the “ Underwriting Agreement ”) which
is to be entered into between the Company and the Underwriters (as
defined in the Underwriting Agreement) in connection with the IPO
(as to which the Company may enter into only upon receiving the
express consent of the Sponsors thereto), the Sponsors or the
Company shall determine in its sole and absolute discretion to
abandon the IPO, this Agreement shall be immediately terminated and
thereupon each party shall be released from its obligations
hereunder and shall have no further liability hereunder.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
AMONG THE PARTIES
3.1. Definitions . As used in
this Article III, the following terms shall have the following
meanings:
(i) “ Actions ”
means all actions, litigations, complaints, charges, accusations,
investigations, petitions, suits, arbitrations, mediations or other
proceedings, whether civil or criminal, at law or in equity, or
before any arbitrator or Governmental Entity.
(ii) “Code” means
the Internal Revenue Code of 1986, as amended
(iii) “ Environmental
Law ” means all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, demands, approvals,
authorizations and similar items of any Governmental Entity and all
applicable judicial, administrative and regulatory decrees,
judgments and orders relating to the protection of human health or
the environment as in effect on the date of hereof, including but
not limited to those pertaining to reporting, licensing,
permitting, investigation, removal and remediation of Hazardous
Materials, including without limitation: (x) the Comprehensive
Environmental Response, Compensation
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and Liability Act (42 U.S.C. Section 9601 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section
1251), the Safe Drinking Water Act (42 U.S.C. 300f et seq.), the
Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the
Endangered Species Act (16 U.S.C. 1531 et seq.), the Emergency
Planning and Community Right-to-Know Act of 1986 (42 U.S.C. 11001
et seq.), and (y) applicable state and local statutory and
regulatory laws, statutes and regulations pertaining to Hazardous
Materials.
(iv) “ Environmental
Permits ” means any and all licenses, certificates,
permits, directives, requirements, registrations, government
approvals, agreements, authorizations, and consents that are
required under or are issued pursuant to any Environmental
Laws.
(v) “ Governmental
Entity ” means any governmental agency or
quasi-governmental agency, bureau, board, commission, court,
department, official, political subdivision, tribunal or other
instrumentality of any government, whether federal, state or local,
domestic or foreign.
(vi) “ Hazardous
Material ” means any substance which is controlled,
regulated or prohibited under any Environmental Law as in effect or
regulated by any Governmental Entity as of the date
hereof.
(vii) “ Liens ”
means any mortgages, pledges, liens, options, charges, security
interests, mortgage deed, restrictions, prior assignments,
encumbrances, covenants, encroachments, assessments, purchase
rights, rights of others, licenses, easements, voting agreements,
liabilities or claims of any kind or nature whatsoever, direct or
indirect, including, without limitation, interests in or claims to
revenues generated by such property.
(viii) “ Material Adverse
Effect ” means a material adverse effect, individually or
in the aggregate, on the business, financial condition, results of
operations or properties of the Company Entities and Student
Housing Entities, taken as a whole, whether or not arising from
transactions in the ordinary course of business.
(ix) “Permitted
Liens” means:
(1) Liens securing taxes, the
payment of which is not delinquent or the payment of which is
actively being contested in good faith by appropriate proceedings
diligently pursuant and which, if material in amount, are disclosed
in the Registration Statement (including, without limitation, any
matters for which a reserve has been established as reflected in
the pro forma financial statements contained in the Registration
Statement);
(2) Zoning laws and ordinances
applicable to the RAP Properties and RSVP Properties which are not
violated by the existing structures or present uses
thereof;
(3) Liens imposed by laws such as
carriers’, warehousemen’s and mechanics’ liens,
and other similar liens arising in the ordinary course of business
which
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secure payment of obligations arising in the
ordinary course of business not more than 60 days past due or which
are being contested in good faith by appropriate proceedings
diligently pursued and which, if material in amount, are disclosed
in the Registration Statement (including, without limitation, any
matters for which a reserve has been established as reflected in
the pro forma financial statements contained in the Registration
Statement);
(4) non-exclusive easements for
public utilities that do not have a Material Adverse Effect upon,
or interfere with the use of, the RAP Properties and RSVP
Properties;
(5) leases to student occupants of
the RAP Properties and RSVP Properties; and
(6) any exceptions contained in the
existing owner’s or leasehold title insurance policies with
respect to each RAP Property and RSVP Property.
(x) “ Person ”
means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or governmental
entity.
(xi) “ RAP Properties
” means the real property owned (whether directly or
indirectly) by the RAP Student Housing Entities.
(xii) “ Release ”
shall have the same meaning as the definition of
“release” in the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”) at 42 U.S.C.
Section 9601(22).
(xiii) “ RSVP
Properties ” means the real property owned and ground
leased (whether directly or indirectly) by the RSVP Student Housing
Entities.
3.2. Representations by
RAP-ACP . RAP-ACP represents and warrants to each of the
Company Entities, other than with respect to such matters set forth
in the Registration Statement or that are known by the Company,
that each and every one of the following statements is true,
correct, and complete in all material respects as of the date of
this Agreement and will be true, correct, and complete in all
material respects as of the Closing Date; provided, however, that
none of the representations and warranties hereunder with respect
to the RAP Student Housing Entities shall apply with respect to
Titan II (hereinafter defined), as to which no representations and
warranties are being made by RAP-ACP hereunder:
(a) Organization and Power .
RAP-ACP is duly organized, validly existing and in good standing
under the laws of the state of its formation and has full right,
power, and authority to enter into this Agreement, and to assume
and perform all of its obligations under this Agreement. The
execution, delivery and performance of this Agreement has been duly
authorized by RAP-ACP, and this Agreement constitutes the legal,
valid and binding obligation of RAP-ACP, enforceable against it in
accordance with this Agreement’s terms, subject to
bankruptcy, reorganization, insolvency and other similar laws
affecting the enforcement of creditors’ rights generally and
to general principles of equity.
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(b) Capitalization. The
interests owned by RAP-ACP directly and indirectly in the Student
Housing Entities listed on Schedule III (the “RAP
Student Housing Entities” ) (the “ RAP
Interests ”) constitute all of the issued and outstanding
interests of the RAP Student Housing Entities owning (directly or
indirectly) the RAP Properties and other assets to be conveyed by
RAP-ACP to the Company Entities in accordance with the Formation
Transactions listed in Exhibit A . Except as set forth in
the Registration Statement, RAP-ACP is the sole owner of the RAP
Interests, beneficially and of record free and clear of any Liens
of any nature, except Permitted Liens and such other Liens that
would not have, or reasonably be expected to have, a Material
Adverse Effect, and has full power and authority to convey the RAP
Interests, free and clear of any Liens, except Permitted Liens and
such other Liens that would not have, or reasonably be expected to
have, a Material Adverse Effect, and, upon delivery of the
Redemption Amount as herein provided, the Company (or its direct or
indirect subsidiary) will acquire good and valid title thereto,
free and clear of any Liens except Permitted Liens, Liens created
in favor of the Company Entities by the transactions contemplated
hereby and such Liens that would not have, or reasonably be
expected to have, a Material Adverse Effect. Other than as
described in the Registration Statement, there are no rights to
purchase, options or similar rights relating to any of the RAP
Properties or the RAP Interests. Except as contemplated in the
Formation Transactions or as otherwise disclosed in the
Registration Statement, RAP-ACP has no commitment or legal
obligation, absolute or contingent, to any other Person other than
the Company Entities to sell, assign, transfer or effect a sale of
any right, title or interest in or to any RAP Interests, RAP
Properties or other assets to be conveyed to the Company Entities
by RAP-ACP in accordance with the Formation
Transactions.
(c) No Litigation . To
RAP-ACP’s knowledge, except for Actions covered by existing
policies of insurance, there are no Actions pending or threatened,
affecting all or any portion of the RAP Interests or the RAP
Student Housing Entities’ or RAP-ACP’s ability to
consummate the transactions contemplated hereby or would have a
Material Adverse Effect. RAP-ACP has no knowledge of any
outstanding order, writ, injunction or decree of any court,
Governmental Entity or arbitration against or affecting all or any
portion of the RAP Interests or any RAP Student Housing Entity
which in any such case would impair RAP-ACP’s ability to
enter into and perform all of its obligations under the Agreement
or would have a Material Adverse Effect.
(d) No Consents . Except as
shall have been cured, consented to or waived in writing by the
Company prior to the Closing, none of the execution, delivery or
performance of this Agreement, any agreement contemplated hereby
and the transactions contemplated hereby and thereby does or will,
with or without the giving of notice, lapse of time, or both, (i)
violate, conflict with, result in a breach of, or constitute a
default under or give to others any right of termination,
acceleration, cancellation or other right adverse to the Company
Entities of (A) the organizational documents, including the
charters and bylaws, if any, of RAP-ACP or the RAP Student Housing
Entities, (B) any agreement, document or instrument to which
RAP-ACP is a party or by which RAP-ACP or any of the RAP Student
Housing Entities are bound or (C) to RAP-ACP’s knowledge, any
term or provision of any judgment, order, writ, injunction, or
decree, or require any approval, consent or waiver of, or make any
filing with, any person or governmental or regulatory authority or
foreign, federal, state, local or other law binding on RAP-ACP or
the RAP Student Housing Entities or by which RAP-ACP, the RAP
Student Housing Entities or any of their assets or properties are
bound or subject; provided in the case of
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(B) and (C) above, unless any such violation,
conflict, breach or default would not have a Material Adverse
Effect or (ii) result in the creation of any Lien upon any of the
RAP Interests or any RAP Student Housing Entity or any interests
therein except such Liens that would not have, or reasonably be
expected to have, a Material Adverse Effect.
(e) No Related Party
Transactions . Other than as set forth in the Registration
Statement, there are no material contracts, agreements or other
transactions between any Company Entity or Student Housing Entity
or any of their respective affiliates, on the one part, and RAP-ACP
or any person holding a direct interest in RAP-ACP or any of their
respective affiliates, on the other part.
(f) No Broker or Finder.
Except as disclosed in the Registration Statement, there are no
contracts, agreements or understanding between RAP-ACP, or any
person holding a direct or indirect controlling interest in
RAP-ACP, or any of their respective affiliates and any other person
that would give rise to a valid claim against any Company Entity or
any underwriter under the IPO for a brokerage commission,
finder’s fee or other like payment in connection with the IPO
or other transactions contemplated by this Agreement.
(g) Withholding; Non-Foreign
Status . RAP-ACP is not subject to any federal or state
withholding provisions in connection with the transactions
contemplated hereby, including withholding of sales proceeds to
foreign persons. RAP-ACP is a United States person (as defined in
Section 7701(a)(30) of the Code). RAP-ACP is a United States person
(as defined in Section 7701(a)(30) of the Code), and is, therefore,
not subject to the provisions of the Code relating to the
withholding of sales proceeds to foreign persons, and is not
subject to any state withholding requirements.
(h) Taxes . To
RAP-ACP’s knowledge, for federal income tax purposes, each
RAP Student Housing Entity is, and at all times during its
existence has been, a partnership or limited liability company
taxable as a partnership (rather than an association or a publicly
traded partnership taxable as a corporation). To the knowledge of
RAP-ACP, each RAP Student Housing Entity has timely and properly
filed all tax returns required to be filed by it and has timely
paid all taxes required to be paid by it, except with respect to
those taxes being contested in good faith. To RAP-ACP’s
knowledge, except as may be set forth in the Registration
Statement, none of the tax returns filed by any RAP Student Housing
Entity is the subject of a pending or ongoing audit, and no
federal, state, local or foreign taxing authority has asserted any
tax deficiency or other assessment against a RAP Property or a RAP
Student Housing Entity. To RAP-ACP’s knowledge, neither
RAP-ACP nor the RAP Student Housing Entities have received any
notification of any material new or increased general or special
tax assessments for any of the RAP Properties or the RAP
Interests.
(i) Real Property.
(i) To RAP-ACP’s knowledge,
except as set forth in the Registration Statement, neither RAP-ACP
nor any of RAP Student Housing Entities has given or received any
notice of any uncured default with respect to any material
agreement affecting the RAP Properties which would have a Material
Adverse Effect, and, no event has occurred or is threatened, which
through the passage of time or the giving of notice, or both, would
constitute a
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material default thereunder or would cause the
acceleration of any material obligation of any party thereto or the
creation of a Lien upon any RAP Property, except for Permitted
Liens or such Liens that would not have, or reasonably be expected
to have, a Material Adverse Effect.
(ii) To RAP-ACP’s knowledge
each RAP Student Housing Entity identified on Schedule III
as owning an underlying Property has insurable fee simple or ground
lease title to such Property.
(iii) To RAP-ACP’s knowledge,
there is no existing, proposed or threatened condemnation, eminent
domain or similar proceeding, or private purchase in lieu of such a
proceeding, which would affect all or any portion of the RAP
Properties in any material respect.
(iv) There are no ground leases as
to which an RAP Student Housing Entity holds an interest as lessee
or tenant.
(j) Environmental Compliance
. To RAP-ACP’s knowledge, except as may be disclosed in the
Registration Statement or the environmental reports which have been
made available by the Sponsors to the Company Entities (the “
Environmental Reports ”) or would not have a Material
Adverse Effect, the RAP Properties are currently in material
compliance with all Environmental Laws and Environmental Permits.
To RAP-ACP’s knowledge, RAP-ACP has not received any written
notice from the United States Environmental Protection Agency or
any other Governmental Entity that regulates Hazardous Materials or
public health risks or other environmental matters or any other
private party or Person claiming any violation of, or requiring
compliance with, any Environmental Laws or Environmental Permits or
demanding payment or contribution for any Release or other
environmental damage in, on, under, or upon any of the RAP
Properties. To RAP-ACP’s knowledge, except as may be
disclosed in the Registration Statement or the Environmental
Reports, no investigation or litigation with respect to Hazardous
Materials located in, on, under or upon any of the RAP Properties
is pending or has been overtly threatened in the last twelve months
by any Governmental Entity or any third party.
(k) Intellectual Property .
To RAP-ACP’s knowledge, except as would not have a Material
Adverse Effect there are no Actions involving RAP-ACP, any RAP
Student Housing Entities, or the RAP Properties pending or
threatened, that concern any copyrights, copyright application,
trademarks, trademark registrations, trade names, service marks,
service mark registrations, trade names and trade name
registrations or any trade secrets (the “ Proprietary
Rights ”) being transferred to the Company Entities
hereunder by RAP-ACP. Except as would not have a Material Adverse
Effect, to RAP-ACP’s knowledge, RAP-ACP has the right and
authority to use the Proprietary Rights being transferred to the
Company Entities hereunder by RAP-ACP necessary in connection with
the operation of the RAP Properties in the manner in which it is
currently used, and to convey such right and authority to the
Company Entities at the Closing.
(l) Existing Loans . The
Registration Statement lists all secured loans presently
encumbering the RAP Properties or any direct or indirect interest
in any RAP Student Housing Entity, and any unsecured loans made to
RAP-ACP or any RAP Student Housing Entity to be assumed by the
Company Entities or any subsidiary of the Company Entities at
Closing, as
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of the date hereof (the “ RAP Existing
Loans ”). To RAP-ACP’s knowledge, the RAP Existing
Loans and the documents entered into in connection therewith
(collectively, the “ RAP Loan Documents ”) are
in full force and effect as of the date hereof. To RAP-ACP’s
knowledge, no event of default or event that with the passage of
time or giving of notice or both would constitute an event of
default has occurred as of the date hereof under any of the RAP
Loan Documents which would have a Material Adverse Effect. True and
correct copies of the existing RAP Loan Documents have been made
available to the Company Entities.
(m) No Untrue Statement . To
the knowledge of RAP-ACP, other than such matters that are known by
the Company, the Registration Statement does not, and on the
Closing Date will not, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, not
misleading.
(n) For purposes of this Section
3.2, “knowledge” of RAP-ACP shall be limited to the
actual knowledge of Messrs. Scott Rechler, Seth Lipsay, Steven
Shepsman and Frank Adipietro.
3.3. Representations by RSVP
. RSVP represents and warrants to each of the Company Entities,
other than with respect to such matters set forth in the
Registration Statement or that are known by the Company, that each
and every one of the following statements is true, correct, and
complete as in all material respects of the date of this Agreement
and will be true, correct, and complete in all material respects as
of the Closing Date; provided, however, that none of the
representations and warranties hereunder with respect to the RSVP
Student Housing Entities shall apply with respect to Titan II
(hereinafter defined), as to which no representations and
warranties are being made by RSVP hereunder:
(a) Organization and Power .
RSVP is duly organized, validly existing and in good standing under
the laws of the state of its formation and has full right, power,
and authority to enter into this Agreement, and to assume and
perform all of its obligations under this Agreement. The execution,
delivery and performance of this Agreement has been duly authorized
by RSVP, and this Agreement constitutes the legal, valid and
binding obligation of RSVP, enforceable against it in accordance
with this Agreement’s terms, subject to bankruptcy,
reorganization, insolvency and other similar laws affecting the
enforcement of creditors’ rights generally and to general
principles of equity.
(b) Capitalization. The
interests owned by RSVP Student Housing LLC, an indirectly owned
and controlled subsidiary of RSVP (“ RSVP-LLC
”), directly and indirectly in the Student Housing Entities
listed on Schedule IV (the “RSVP Student Housing
Entities” ) (the “ RSVP Interests ”)
constitute all of the issued and outstanding interests of the
entities owning (directly or indirectly) the RSVP Properties and
other assets to be conveyed by RSVP to the Company Entities in
accordance with the Formation Transactions listed in Exhibit
A , other than a 0.1% limited partnership interest in RFG
Capital Management Partners, L.P. Except as set forth in the
Registration Statement, RSVP-LLC is the sole owner of the RSVP
Interests, beneficially and of record free and clear of any Liens
of any nature, except Permitted Liens and such other Liens that
would not have, or reasonably be expected to have, a Material
Adverse Effect, and has full power and authority to convey the RSVP
Interests, free and clear of any Liens, except Permitted Liens and
such other Liens that would not have, or reasonably be
12
expected to have, a Material Adverse Effect,
and, upon delivery of the Redemption Amount as herein provided, the
Company (or its direct or indirect subsidiary) will acquire good
and valid title thereto, free and clear of any Liens except
Permitted Liens, Liens created in favor of the Company Entities by
the transactions contemplated hereby and such Liens that would not
have, or reasonably be expected to have, a Material Adverse Effect.
Other than as described in the Registration Statement, there are no
rights to purchase, options or similar rights relating to any of
the RSVP Properties or the RSVP Interests. Except as contemplated
in the Formation Transactions or as otherwise disclosed in the
Registration Statement, neither RSVP nor RSVP-LLC has a commitment
or legal obligation, absolute or contingent, to any other Person
other than the Company Entities to sell, assign, transfer or effect
a sale of any right, title or interest in or to any RSVP Interests,
RSVP Properties or other assets to be conveyed to the Company
Entities by RSVP and RSVP-LLC in accordance with the Formation
Transactions. Notwithstanding the above, with respect to the RSVP
Student Housing Entities identified with an asterisk
(“*”) on Schedule IV attached hereto, the
representations made in this Section 3.3(b) shall be limited to the
knowledge of RSVP.
(c) No Litigation . To
RSVP’s knowledge, except for Actions covered by existing
policies of insurance, there are no Actions pending or threatened,
affecting all or any portion of the RSVP Interests or the RSVP
Student Housing Entities’ or RSVP’s or RSVP-LLC’s
ability to consummate the transactions contemplated hereby or would
have a Material Adverse Effect. RSVP has no knowledge of any
outstanding order, writ, injunction or decree of any court,
Governmental Entity or arbitration against or affecting all or any
portion of the RSVP Interests or any RSVP Student Housing Entity
which in any such case would impair RSVP’s ability to enter
into and perform all of its obligations under the Agreement or
would have a Material Adverse Effect.
(d) No Consents . Except as
shall have been cured, consented to or waived in writing by the
Company prior to the Closing, none of the execution, delivery or
performance of this Agreement, any agreement contemplated hereby
and the transactions contemplated hereby and thereby does or will,
with or without the giving of notice, lapse of time, or both, (i)
violate, conflict with, result in a breach of, or constitute a
default under or give to others any right of termination,
acceleration, cancellation or other right adverse to the Company
Entities of (A) the organizational documents, including the
charters and bylaws, if any, of RSVP, RSVP-LLC or the RSVP Student
Housing Entities, (B) any agreement, document or instrument to
which RSVP is a party or by which RSVP, RSVP-LLC or any of the RSVP
Student Housing Entities are bound or (C) to RSVP’s
knowledge, any term or provision of any judgment, order, writ,
injunction, or decree, or require any approval, consent or waiver
of, or make any filing with, any person or governmental or
regulatory authority or foreign, federal, state, local or other law
binding on RSVP, RSVP-LLC or the RSVP Student Housing Entities or
by which RSVP, RSVP-LLC or the RSVP Student Housing Entities or any
of their assets or properties are bound or subject; provided in the
case of (B) and (C) above, unless any such violation, conflict,
breach or default would not have a Material Adverse Effect or (ii)
result in the creation of any Lien upon any of the RSVP Interests
or any RSVP Student Housing Entity or any interests therein except
such Liens that would not have, or reasonably be expected to have,
a Material Adverse Effect.
(e) No Related Party
Transactions . Other than as set forth in the Registration
Statement, there are no material contracts, agreements or other
transactions between any
13
Company Entity or Student Housing Entity or any
of their respective affiliates, on the one part, and RSVP or any
person holding a direct interest in RSVP or any of their respective
affiliates, on the other part.
(f) No Broker or Finder.
Except as disclosed in the Registration Statement, there are no
contracts, agreements or understanding between any RSVP, or any
person holding a direct or indirect interest in RSVP, or any of
their respective affiliates and any other person that would give
rise to a valid claim against any Company Entity or any underwriter
under the IPO for a brokerage commission, finder’s fee or
other like payment in connection with the IPO or other transactions
contemplated by this Agreement.
(g) Withholding; Non-Foreign
Status . RSVP is not subject to any federal or state
withholding provisions in connection with the transactions
contemplated hereby, including withholding of sales proceeds to
foreign persons. RSVP is a United States person (as defined in
Section 7701(a)(30) of the Code). RSVP is a United States person
(as defined in Section 7701(a)(30) of the Code), and is, therefore,
not subject to the provisions of the Code relating to the
withholding of sales proceeds to foreign persons, and is not
subject to any state withholding requirements.
(h) Taxes . To RSVP’s
knowledge, For federal income tax purposes, each RSVP Student
Housing Entity is, and at all times during its existence has been,
a partnership or limited liability company taxable as a partnership
(rather than an association or a publicly traded partnership
taxable as a corporation), other than SHP-The Callaway House
Manager Corp. To the knowledge of RSVP, each RSVP Student Housing
Entity has timely and properly filed all tax returns required to be
filed by it and has timely paid all taxes required to be paid by
it, except with respect to those taxes being contested in good
faith. To RSVP’s knowledge, except as may be set forth in the
Registration Statement, none of the tax returns filed by any RSVP
Student Housing Entity is the subject of a pending or ongoing
audit, and no federal, state, local or foreign taxing authority has
asserted any tax deficiency or other assessment against a RSVP
Property or a RSVP Student Housing Entity. To RSVP’s
knowledge, neither RSVP nor the RSVP Student Housing Entities have
received any notification of any material new or increased general
or special tax assessments for any of the RSVP Properties or the
RSVP Interests.
(i) Real Property.
(i) To RSVP’s knowledge,
except as set forth in the Registration Statement, neither RSVP nor
any of the RSVP Student Housing Entities has given or received any
notice of any uncured default with respect to any material
agreement affecting the RSVP Properties which would have a Material
Adverse Effect, an
