acquisition and management agreement - cityr and management agreement ... manager will incorporate a...
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L6577365:3 501422.1 / RXT
Acquisition and Management Agreement
DATED 2014
Between
_________________________ [Investor's name]
_________________________[ID. No./Private Company Number]
Of ___________________ [Address]
(Hereinafter: the “Investor”)
Of the first part;
AND:
CITYR GROUP
Of 141 Ayers Ct.Teaneck, NJ
07666
United States
(Hereinafter: the “Property Manager”)
Of the second part;
The Investor and Property Manager each being a “Party” and together being the
“Parties”.
Whereas The Property Manager is engaged in locating real estate property in
the U.S.A for investors together with assisting such investors with
the acquisition, management and disposal of such real estate
property;
And whereas: In an attempt to negotiate a discount on the purchase price of a
property located in 2255 Country Corners Drive Columbus, OH USA
for an investor, the Property Manager groups together multiple investors who wish to purchase the above property located within the same project (all such property in a project being collectively hereinafter referred to as the “Property” and each property in a Property being hereinafter referred to as the “Unit”);
And whereas: The Property Manager will incorporate a special purpose vehicle to
purchase the Property such that the vendor of the Property need
only deal with one purchaser in respect of all the Units comprising a
Property. Each investor together with the other investors is given
rights and obligations in the special purpose vehicle in relation to
the Units equivalent to those it would have it would have had had it
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and the other investors purchased the Units directly;
And whereas: The Investor wishes to acquire real estate property(s) in the U.S.A
and wishes to engage the Property Manager;
And whereas: The Property Manager has located a Property. The Investor,
together with other investors (which is subject to the Property
Manager locating such other investors), wishes to purchase all the
Units comprising the Property and engage the Property Manager to
assist it with acquiring and managing the Units on the terms of this
Agreement. The Property Manager has entered into acquisition and
management agreements with the other investors on terms
substantially similar to this Agreement.
Therefore, it is Declared, Stipulated and Agreed between the Parties as Follows:
1. Preamble, headings and Appendixes
1.1. The Appendixes to this Agreement form a part of this Agreement and
shall have effect as if set out in full in the body of this Agreement.
1.2. The headings of the clauses will serve for the purpose of orientation and
convenience only, and will not serve for the purpose of interpreting the
Agreement.
2. Appointing the Property Manager for the purpose of acquiring and managing
the property
2.1. The Investor hereby appoints the Property Manager and the Property
Manager hereby agrees to assist the Investor with acquiring and
thereafter managing a Unit, in accordance with the provisions set forth in
this Agreement including, without limitation, Appendix B (the
“Management Agreement”).
2.2. The Investor acknowledges that the Property Manager shall be entitled to
subcontract any of its obligations under this Agreement.
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3. Acquiring the property
3.1. The Property Manager shall, subject to finding investors who are willing to
purchase all other Units comprising the Property on such terms as the
Property Manager determines, establish a limited liability company in the
state of New Jersey (the “SPV”) to acquire the Property as nominee of the
investors such that the investors (including the Investor) shall purchase
the Units through the SPV.
3.2. The Investor, other investors and the Property Manager shall become
members of the SPV on such terms as the Property Manager may
determine as being necessary in order to give each investor, including the
Investor, rights and obligations in respect of its Unit. The Property
Manager shall be registered as the SPV’s managing member.
3.3. To the extent this is required for the purpose of borrowing monies secured
against the Property, the lender of such monies may require the Property
Manager to be jointly registered as owner of the Property together with
the SPV. The Property Manager acknowledges that any rights it holds in
the Property shall be held for the investors (including the Investor) on the
same terms that the SPV holds the Property for the investors.
3.4. Both the Investor and Property Manager acknowledge that the Investor
together with the other investors shall be the sole and exclusive owners of
the Units and shall be held fully liable in respect of any risk related
thereof. However, the foregoing shall not derogate from any right granted
to the Property Manager by virtue of this Agreement and/or the
Management Agreement and/or any other agreement and any other right
granted to the financing bank in the Property.
3.5. The Property Manager shall assist the SPV with acquiring the Property.
4. Investor Groups
4.1. Where the Property Manager is unable to gather investors to purchase all
the Units comprising the Property within 120 days of the date of this
Agreement or, either the Investor or the Property Manager may terminate
this Agreement with immediate effect via written notice to the other. In
such an event, the Property Manager shall reimburse the Investor all
amounts that the Investor has transferred to the Property Manager
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pursuant to this Agreement. Neither Party shall make any claim against
the other in respect of such termination.
5. Consideration in return for acquisition of the property and payment of
investment amount by the Investor
5.1. The purchase price of a Unit shall be the aggregate of all costs to be
incurred by the Property Manager in purchasing such Unit, as specified in
Appendix A of this Agreement, which includes, without limitation, a
proportion of all expenses to be incurred in relation to the purchase of the
Property (for example transaction initiation fees, consultants’ and
professionals’ fees, legal fees, trustee’s fees, brokerage fees, taxes,
insurance fees and registration fees) (the “Total Unit Purchase Price”).
The total purchase price for the purchase of the Property (including all
expenses) is hereinafter referred to as the “Total Property Purchase
Price”.
5.2. The Investor undertakes to pay the investment amount set forth in the
Appendix A (the “Investment Amount”) in respect of each Unit subject to
and in accordance with the provisions set forth in this Agreement. The
Property Manager and the SPV shall use their reasonable endeavors to
seek to obtain bank or alternative financing for the difference between the
Investment Amount and Total Unit Purchase Price in respect of each Unit.
5.3. The Investor undertakes to pay the Property Manager all the Investment
Amount in order to allow acquisition of the rights in the Property by the
SPV. The Property Manager shall transfer and pay such amounts to the
SPV and any other relevant entity as may be required in order to enable
SPV to purchase the Property,.
5.4. The Investor undertakes to pay the Investment Amount in the following
manner:
5.4.1. upon signing this Agreement, the Investor undertakes to pay the Property
Manager a deposit of 7.5% of the Investment Amount plus VAT to the
Property Manager by bank transfer to the Property’s Managers bank
account (details of which will be provided on signing this Agreement);
5.4.2. upon satisfactory completion of due diligence on the Property, the
remaining 92.5% of the Investment Amount to Mr. Allen Rubin (an
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attorney in the state of New Jersey, representing the Property Manager
and serving as trustee for the purpose of acquiring the Property) (the
“Trustee”), by bank transfer to the Trustee's bank account (details of
which are provided in Appendix D (the “Trust Account”). In this context,
the Investor, the Property Manager and the Trustee shall sign the Trust
Deed enclosed as Appendix C of this Agreement.
5.5. The Trustee shall hold the amount transferred to the Trust Account as
provided in clause 5.4.2 above (the “Trust Amount”) until one (or more)
of the following notices are received:
5.5.1. A written notice by the Property Manager, with a copy delivered to the
Investor, containing a request to release the Trust Amount (or a part
thereof) when in the framework of this notice the Property Manager shall
approve the following:
5.5.1.1. That the SPV was proceeding with the purchase of the
Property).
5.5.1.2. That the Investor certified in writing execution of the acquisition
of the Property by signing Appendix A.
5.5.1.3. That the SPV entered an acquisition agreement relating to the
purchase of the Property.
5.5.1.4. That the conditions for the purpose of arranging title insurance
with regard to the Property were satisfied.
5.5.1.5. That the Trust Amount (or a part thereof) has to be paid for the
purpose of realizing acquisition of the Property and/or executing
title insurance and/or for the purpose of paying any expense with
respect to acquisition of the Property (including any payment
and/or expense that the Investor is obligated to incur in
accordance with the provisions set forth in this Agreement)
and/or implementing improvements in the Property and/or
setting up an SPV and acquiring interests therein.
In such circumstances the Trustee shall transfer to the Property Manager
and/or the attorney handling registration with respect to the Property on
behalf of the Property Manager and/or the entity entrusted with
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registration of title and rights in the Property (in accordance with the
instructions set forth by the Property Manager) the Trust Amount as set
forth in the Property Manager's notice.
5.5.2. A written notice delivered by the Investor, with a copy to the Property
Manager containing a request to return the Trust Amount, in the event
wherein the Trustee did not receive the Property Manager's notice in
accordance with clause 4.5.1 hereinabove, up to four (4) months following
signing of this Agreement; or a written notice from the Property Manager
stating that it is unable to locate and acquire a property in accordance
with the Schedule (Appendix A of this Agreement) upon the earlier.
In such circumstances, the Trustee shall release and return to the
Investor any amount deposited in the Trust Account up to that time in full.
5.6. It is hereby agreed that in the event that the Trustee does not receive any
written notice, in accordance with the provisions set forth in this clause
hereinabove, for a period of 8 months following signing of this Agreement,
then the Trustee shall be entitled (however not obligated), to take initiative
and release and return to the Investor the entire Trust Amount deposited
in the Trust Account until that time.
5.7. In the event the Investor failed to transfer the Investment Amount, in
whole or in part, on time, the Investor shall pay the Property Manager
liquidated damages equal to thirty percent (30%) of the Investment
Amount. The Parties declare that the liquidated damages amount was set
by them while taking into account and agreeing on the estimated
damages that may be reasonably caused as a result of the said breach,
that may result, inter alia, in breach of the agreement entered into by the
SPV to acquire the Property. It is confirmed that the foregoing shall not
derogate from any other remedy due to the Property Manager as a result
of breach of the said agreement, and in any event the foregoing shall not
be deemed as agreement on behalf of the Property Manager to commit
the breach.
6. Financing provided for the purpose of acquiring the property by the Property
Manager
6.1. In order to allow acquisition of the Property the Property Manager shall
seek financing for the SPV to assist it with the acquisition of the Property.
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Financing shall be provided by way of taking a loan by the Property
Manager and providing it to the SPV and/or by way of taking a loan
directly by the SPV and/or in any other manner at the Property Manager's
discretion (hereinafter referred to as “Bank Financing”).
6.2. Bank Financing shall be in the amount that the Property Manager
determines as being required for the purpose of acquiring the Property.
6.3. For the purpose of receiving the Bank Financing the Property Manager
and/or SPV shall conclude an agreement (the “Financing Agreement”)
with a third party (the “Financial Institution”).
6.4. In the framework of the Financing Agreement rights in the Property
(including the Investor’s interest in the Units) shall be pledged as security
for the amounts borrowed from the Financial Institution. By signing this
Agreement the Investor grants his agreement to this pledge.
6.5. The Investor knows, and he agrees expressly that the Bank Financing
shall be returned in accordance with the provisions set forth in the
Financing Agreement and that these amounts shall prevail over and
precede any payment and/or return and/or profit drawing to which the
Investor shall be entitled from the SPV, in accordance with the provisions
set forth in the Financing Agreement and pledge of the Property to the
Financial Institution.
6.6. The Property Manager shall use its reasonable endeavors to obtain Bank
Financing. To the extent that the Property Manager is unable to obtain the
Bank Financing or a part thereof it shall notify about the same to the
Investor within a reasonable time and following the said notice this
Agreement shall terminate and neither Party shall raise any claim towards
the other Party.
7. Consideration to the Property Manager
7.1. The Property Manager shall be entitled to part of the profits generated by
the SPV and/or Investor from the annual rent (or a part thereof,
proportionately) as provided in this clause hereunder.
7.2. The Property Manager shall be entitled to receive from the SPV and/or
the Investor part of the profit specified hereafter, from the rent amounts
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received in respect of the Units comprising the Property as a
management fee, after the Property Manager deducts a proportionate
amount of current management fees, current expenses and financing
expenses (in accordance with the Financing Agreement and to the extent
that there are any) (the “Current Annual Profit”), according to the
mechanism set forth hereunder:
7.2.1. First, the Investor shall be entitled to receive up to 10% of the
Investment Amount not repaid to the Investor out of the Current
Annual Profit;
7.2.2. Second, to the extent that a balance remains out of the Current
Annual Profit after executing payments specified in this clause
hereinabove, this balance shall be divided between the Investor
and the Property Manager in equal parts (50% - 50%).
7.3. It is hereby confirmed that to the extent the Investor is repaid any of the
Investment Amount (whether on a refinancing or otherwise), the first
share of Current Annual Profit under clause 7.2.1 shall be calculated
based on the Investment Amount less all parts of the Investment Amount
repaid to the Investor rather than just the Investment Amount.
7.4. It is agreed that the Investor’s share of Current Annual Profit shall be
determined based on the Investor’s relative part in the Property, only after
settling the accounts and setting off debts between the Investor to the
extent he failed to pay his part in the current expenses and/or the finance
expenses (to the extent that this debt is deducted from the rental
payments received) and the rest of the investors so that any investor that
failed to pay off its said debt will be paying the rest of the investors the
part of Current Annual Profit they were shorted due to said deduction.
With its signature, the Investor instructs the SPV to make this calculation
and operate in accordance with its results.
7.5. It is hereby confirmed that the Property Manager shall be entitled to
collect current management fees from any payment it collects and/or that
it receives in connection with the Property, and shall be entitled to offset
this amount from any other amount which the Investor or the SPV are
entitled to receive prior to transferring it to the Investor and/or the SPV or
after its transfer to the SPV.
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7.6. Notwithstanding clause 6 and clause 7 hereunder, it is agreed that if in a
certain year the Current Annual Profit, within its meaning hereinabove,
falls below an amount equal to 10% of the Investment Amount not repaid,
then the Investor shall be entitled to receive the outstanding amount (that
is to say, the balance that should be added to reach the total Current
Annual Profit transferred to the Investor in respect of the said year so that
the total said Current Annual Profit shall constitute 10% of the Investment
Amount not repaid) in the following year (and/or the year(s) thereafter),
and this entitlement shall prevail over the Property Manager's entitlement
to receive its share from the Current Annual Profit and to receive its share
from the profit generated by the sale (within the meaning of this term
hereunder).
7.7. The transaction commencement date and calculation of return shall
commence on the first day of the month immediately succeeding the
purchase of the Property. In the event that renovation is implemented in
the Property, the transaction commencement date shall be in the month
after the Property was purchased and tenants occupied the Property.
8. The Property Manager's entitlement for profits in respect of sale of a Unit
8.1. The Property Manager shall, at the request of the Investor, use
reasonable endeavors to find buyers for each Unit. The Property Manager
may also attempt to find buyers of its own initiative, but in any event, the
sale of a Unit(and the terms on which it should be sold) shall only be
consummated subject to receiving the consent of the Investor which the
Investor hereby irrevocably gives where the sale of a Unit is expected to
bring about the registration of at least a 25%.The Parties shall use their
best endeavors to ensure that the sale of Units pursuant to this clause 8.1
shall not require the consent of any other person, including without
limitation, the SPV.
8.2. The rate of the aforementioned profit shall be the percentage which said
difference constitutes of the balance of the Total Unit Purchase Price.
8.3. The Property Manager and/or the SPV shall pay all the costs involved in
selling a Unit and all additional expenses thereof, and any payment in
connection with a Unit that was not paid by the Investor and/or the SPV at
the time from the consideration received from selling a Unit, including any
payment required for the purpose of repaying a proportionate amount of
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the Bank Financing provided to the SPV in accordance with the Financing
Agreement and any expense/payment in respect whereof, current
management fees, current expenses and additional consideration in
accordance with the provisions set forth in this Agreement (the “Unpaid
Amounts”).
8.4. In any event of sale of a Unit, in respect of which any profit arises, that is
to say, a positive difference between the selling price with deduction of
the Unpaid Amounts, and the Total Unit Purchase Price (the “Sale
Profit”), then, without derogating from the Parties' rights as specified in
this Agreement, profit from the sale shall be distributed between the
Investor and the Property Manager in the following manner:
8.4.1. The initial amounts out of the Sale Profit up to 50% (inclusive) of the
Investment Amountnot repaid shall be distributed to the Investor as to
70% and to the Property Manager as to 30%.
8.4.2. Thereafter, amounts out of the Sale Profit at a rate between 50% and up
to 100% (inclusive) of the Investment Amount not repaid, shall be divided
between the Property Manager as to 40% and the Investor as to 60%.
8.4.3. Finally, amounts out of the Sale Profit at a rate higher than 100% of the
Investment Amount not repaid, shall be distributed between the Property
Manager as to 50% and the Investor as to 50%.
8.5. It is hereby confirmed that to the extent the Investor is repaid any of the
Investment Amount (whether on a refinancing or otherwise), the share
Sale Profit to be paid to the Property Manager under clauses 8.4.1, 8.4.2
and 8.4.3 shall be calculated based on the Investment Amount less all
parts of the Investment Amount repaid to the Investor rather than just the
Investment Amount.
8.6. The Property Manager shall be entitled to collect its share of the Sale
Profit from any amount it receives and/or the SPV receives in respect of
the sale transaction, and shall be entitled to offset this amount from any
other amount which the Investor or the SPV are entitled to receive and
that the Property Manager and/or the SPV hold.
9. Reports and calculation of returns
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9.1. Within 30 days following the end of each calendar quarter during the term
of this Agreement, the Property Manager shall furnish the Investor a
report specifying all the rent received in respect of the Units and the
expenses incurred in connection with the Units during the last quarter.
9.2. The said report shall include calculation of the Current Annual Return in
respect of each Unit as of the relevant report date, and specification of the
Property Manager's entitlement for consideration out of the rent and
amount thereof.
9.3. Upon sale of the Property in respect of which capital gain shall be entered
as said, the Property Manager shall furnish the Investor a detailed report
and calculation with relation to the transaction details, calculating profit
from the sale and consideration which the Property Manager is entitled to
receive in respect of profits generated by the transaction.
9.4. At the Investor's request, the Property Manager shall deliver to the
Investor references in respect of income and/or expenses in respect of
each Unit and the Property. The Investor may deliver his reservations in
writing within 14 days following receipt of the Property Manager's report
about calculation of the annual return and/or the Property Manager's
entitlement for consideration out of the rent and/or specification of the
property sale transaction.
10. Term of Agreement and termination thereof
10.1. This Agreement shall become effective following its signing and shall
terminate on the date of sale of the Propertyor if earlier, transfer of the
Investor’s interest in the Property to the Property Manager, other investors
or third party provided that where such interest is transferred to a third
party, then only on such third party entering into an agreement with the
Property Manager on terms substantially similar to this Agreement(the
“Term of Agreement”).
10.2. Where the Investor wishes to transfer its interest in Units to a third party, it
shall first offer them to the Property Manager and, at the Property
Manager’s discretion, the other investors for purchase on the same terms
as that offered to or by the third party.
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11. Representations, excepting liability by the Property Manager
11.1. The Parties acknowledge that there is no hindrance or factual or legal or
other limitation in connection therewith, to entering this Agreement and
upholding the Parties' undertakings in accordance with the Agreement.
11.2. The Investor hereby declares, warrants and certifies that he is in
possession of financial resources enabling him to pay the Investment
Amount specified hereinabove at the times and under the terms set forth
in this Agreement and/or the agreement to be entered into by the SPV to
acquire a Property and maintenance costs as provided in this Agreement.
11.3. The Investor is aware that similar to any other investment in real estate,
investment in a Unit involves different business risks. The Investor is
aware that the Property Manager does not warrant in any manner that it
and/or the SPV shall succeed in their operations and that the investment
will yield any profits and/or returns to the Investor. The Property
Manager's actions shall be solely based upon its best efforts.
11.4. The Investors declare that they have checked and examined each of the
provisions of the Agreement, and that they have taken the measures
necessary in order to understand the stipulations, the provisions, and the
undertakings specified in the Agreement, on their own or by seeking
external consultation, and that in view of the aforesaid, they understand
the Agreement and its provisions.
11.5. The Property Manager shall not be held liable for any loss or damage
caused to the Investor due to failure of investment in the Property, lack of
tenants in a Unit and/or in terms of indirect damages and/or loss of profits
incurred as a result of investment in a Unit, as long as the Property
Manager fulfilled its responsibilities fairly, in due diligence, and in good
faith.
11.6. The Property Manager's liability is limited to its undertakings as solely
provided in this Agreement.
12. Breach and remedies
12.1. Without derogating from the Parties' rights in accordance with the
provisions set forth in this Agreement, then in any event wherein a Party
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breaches or fails to uphold any term or instruction set forth in this
Agreement, the injured Party may seek the remedies set forth in the
Contracts Law (Remedies for Breach of Contract), New Jersey.
12.2. It is agreed that in the event of breach (including fundamental breach) of
the Agreement by any of the Parties, and the breach is rectifiable, the
other Party shall deliver a 30 days advance notice for the purpose of
remedying the breach prior to seeking remedies in respect whereof.
However, it is agreed that in anything related to a breach in connection
with transfer of any amounts that the Investor is obligated to transfer
and/or pay, only a 7 days advance notice and warning shall be delivered.
12.3. A failure of either Party (hereinafter: “a Violating Member”) to transfer
any of the payments required under this Agreement (including, but not
exclusively, the Investment Amount and/or any of the current expenses
and/or the finance expenses – in whole or in part), by the predetermined
time shall constitute a breach of this Agreement. Without derogating from
any right or relief to which the Property Manager and/or the SPV and/or
either of the Parties is entitled vis a vis the Violating Member under any
law or agreement (including the right to enforce the Violating Member’s
undertaking to make said payment and/or to be fully compensated for the
damage caused by the breach), the Property Manager shall be entitled,
apart from any other legal measure, to operate at its own exclusive
discretion, as specified hereinafter –
12.3.1. To rescind the Agreement and demand that the Violating
Member sell its rights in the SPV (and accordingly, in the Units)
to any entity (hereinafter “the Entity”) it is instructed by the
Property Manager, if the Violating Member does not fix the
breach within seven days of receiving a written request to do so.
In the event that the breach is not fixed as said, the Violating
Member shall sign the appropriate documents for the transfer of
its rights in the SPV to any Entity determined by the Property
Manager, and as consideration for transferring said rights in
Property Manager (and accordingly, in the Units), the Violating
Member shall be entitled to a refund of the Investment Amount
paid, with the deduction of the following sums:
12.3.1.1. The sum of the Violating Member’s debts to the SPV
as of the date of the transfer of rights;
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12.3.1.2. To the extent that the aforesaid in this Agreement
applies – the Violating Member’s relative part in the
SPV’s debt to the assisting company and/or the
financing institution, as of the date of the transfer of
rights;
12.3.1.3. Costs, to the extent that these are requested,
necessary to conduct proceedings (including legal)
due to the breach of this Agreement and/or due to
the Violating Member’s failure to cooperate in said
transfer of its rights in the SPV;
12.3.1.4. A liquidated damage equivalent to ten percent (10%)
of the Total Unit Purchase Price. The Parties
declare that they calculated this liquidated damage
in advance and that it accurately reflects some of
the damage that the Property Manager might be
caused as a result of the breach.
12.3.2. It is hereby confirmed that the measures taken by the Property
Manager to locate the Entity in accordance with Section 12.3.1
above, shall be at the Property Manager’s own absolute
discretion, and the Property Manager’s shall use its reasonable
endeavor to locate such an Entity. This Entity can be one of the
Parties. It is agreed that said Entity shall receive the Violating
Member’s rights in the SPV against payment of the
consideration to the SPV and subject to its signing the papers
necessary for this, including an agreement with the Property
Manager and the SPV. To remove doubt, in the event that the
Violating Member finds another purchaser for its rights, this
purchaser shall replace said Entity, provided that the amount it
pays the SPV exceeds the sums specified in Sections 12.5.2.1 –
12.5.2.4. Each of the Parties shall have a right of first refusal to
purchase the Violating Member’s rights in place of said
purchaser.
12.3.3. In the event that the breach was not fixed as said within the
timeframe set above, and the Violating Member’s rights in the
purchasing party have not yet been transferred to another Entity,
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the Property Manager is entitled, subject to any law, to prevent
the Violating Member from receiving its share in the funds
intended for distribution by the SPV, and even to revoke the
Violating Member’s voting rights in the SPV.
12.3.4. To sign any document and to send any notice necessary for
performing and implementing the aforesaid. For the sake of
caution only, attached as Appendix E of this Agreement is the
Investor’s power of attorney authorizing the Property Manager to
perform any action as said.
13. Arbitration clause
13.1. Any dispute arising out of or in connection with this contract, including any
question regarding its existence, validity or termination, shall be referred
to and finally resolved by arbitration under the LCIA Rules, which Rules
are deemed to be incorporated by reference into this clause. It is agreed
that:
13.1.1. The number of arbitrators shall be one.
13.1.2. The seat, or legal place, of arbitration shall be London.
13.1.3. The language to be used in the arbitral proceedings shall be
English Law.
13.1.4. The governing law of the contract shall be the substantive law of
England.
13.2. Notwithstanding the foregoing, in the event that any of the Parties wishes
to receive temporary relief of any kind against the other Party, and/or any
motion concerning contempt of court, it shall be entitled to approach the
competent court of the that purpose. After litigation of the temporary relief,
the dispute shall be settled by an arbitrator pursuant to clause 13.1.
14. Miscellaneous
14.1. Subject to the provisions set forth in any law, any settling of accounts
between the Parties in accordance with the provisions set forth in this
Agreement shall be in U.S. dollars. In the event that any of the Parties
transfers any other amount in any other currency, then that Party shall be
obligated to incur the full conversion costs in terms of rate of exchange
differentials.
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14.2. The Parties to this Agreement undertake to sign any instrument required
for the purpose of executing this Agreement and appear before any
institution for the purpose of the said.
14.3. Any modification, amendment and/or addition to in the Agreement shall be
null and void unless executed in writing and signed by the Parties.
14.4. No conduct by any of the Parties shall be deemed as waiver of any of its
rights in accordance with the provisions set forth in this Agreement and/or
in accordance with the provisions set forth in any law or as waiver or
agreement on its behalf to any breach or failure to uphold the provisions
set forth in this Agreement by the other Party, or as permitting delay, or
extension, or modification, cancellation or addition of any terms, unless
executed expressly and in writing.
14.5. By Parties hereby warrant that they shall not disclose or communicate any
information in connection with this Agreement and the transaction subject
matter thereof in any manner to any other person and/or entity, and any
information in connection with the engagements of other Parties to this
Agreement. The covenants set forth in this clause shall apply indefinitely.
The foregoing shall not apply to reports that the Parties or controlling
shareholders therein are obligated to publish in accordance with the
provisions set forth in any law including following a court instruction and/or
order or by any other competent entity, and any report required, to the
extent required, for the purpose of executing this Agreement.
14.6. This Agreement overrides and prevails over any previous agreement,
understanding, representation or negotiations in connection with subject
matter thereof, except for the Management Agreement (as set out in
Appendix B) and/or the agreement to be entered into by the SPV to
acquire the Property that shall bind the Parties for all intents and
purposes. It is hereby agreed that to the extent that there is a discrepancy
between this Agreement and any of the other agreements as said, the
provisions set forth in this Agreement shall prevail unless otherwise
expressly agreed.
14.7. In the event that any of the instructions set forth in this Agreement is
canceled by any instance or declared as null and void for any reason, the
other instructions set forth in this Agreement shall prevail. In such
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circumstances as said the Parties shall act for the purpose of
modifying/amending the relevant instruction (the canceled instruction,
and, if necessary any other instruction that requires modification or
amendment), in a manner that the amended instruction shall be as similar
in its content to the original instruction. The foregoing shall not negate or
derogate from the right of the Party that considers itself as injured from
cancellation of the said instruction (for example, when failure to uphold an
instruction as said constitutes breach of this Agreement by one of the
Parties) to take action against the other Party in accordance with the
provisions set forth in any law and at its discretion and, including, to act
for the purpose of terminating this Agreement.
14.8. The Parties shall not transfer this Agreement, in whole or in part, and shall
not transfer to another any right and/or liability in accordance with the
provisions set forth in this Agreement, in whole or in part, without
obtaining the other Party's prior and written approval. Notwithstanding the
foregoing, the Property Manager shall be entitled to assign its rights and
liabilities under this Agreement to any other company under the control
(within the meaning of the Corporation Tax Act 2010)of one or more of the
Property Manager's shareholders.
14.9. This Agreement shall be governed by English law.
15. Addresses and notices
15.1. The addresses of the Parties shall be as specified in the preamble to this
Agreement or any other address of the Parties as notified in writing by
that Party to the other Party.
15.2. Any notice in connection with this Agreement shall be delivered to the
recipient in person by courier and facsimile, email or registered mail to its
address as specified hereinabove, and shall be deemed to have been
accepted by the recipient on its delivery date if delivered in person, or on
its transmission date if transmitted by facsimile or email, or following 3
days following its delivery by registered mail as specified hereinabove.
And in witness hereof the parties are hereby undersigned:
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_________________ __________________
The Property Manager The Investor
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Appendix A
[TO BE INSERTED]
Property Descriptionfor285apartments for rent. Property Address: 2255CountryCornersDriveColumbus, OH PropertyPricefor: $ 18,927,261 Mortgage amount: $ 11,608,000(withouta personal guaranteefromthe investor) The amount ofcapital investment: $ 7,319,261 Amount of theaverage costof each apartmentpropertyincluding bank financing: $ 25,681 Quantityapartmentsinvestor: _ The amount ofthe investor'scapital investment$________ The fraction ofthe investorin the project______% The amount ofcapital investmentwill be paidas follows: One. 7.5% _______$(plus VATlaw)to be paid in 5 business daysfrom the date ofsigning of this Agreement. Paidin SGDdollar valueto the marketingcompanyin the UK. Expenses formarketing, advertisingand legal, etc. Account Name: Mizrahi Tefahot Bank Ltd.
30 Old Broad Street
London EC2N 1HQ
Swift: MIZBGB2L
Account Name: Cityr UK Limited
Account No. 026011
IBAN: GB51MIZB40522800026011
A receipt will be provided for this amount.
92.5% are$_______to provide after advance warningofsevendays.Paid directlyto the
trust accountas shownin Appendix Cto this Agreement.
**Please sendusthetransfercredentialsimmediately uponexecution.
___________ ___________
CityR The investor
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Appendix B
Provisions of the Management Agreement
1. Management of the Units
1.1. After purchasing the Property located in 2255 Country Corners Drive Columbus,
OH USA, as long as this Agreement is in force, and for as long as the SPV holds
the rights in the Units, the Property Manager shall manage the Property for the
SPV in conformance with the provisions of this Management Agreement.
1.2. Without derogating from anything stated in the Management Agreement, in the
context of the Property Manager’s management of the property, it shall do its
best to find lessees for each Unit.
1.3. To the extent that suitable lessees are found for a Unit, the Property Manager
shall take measures to ensure that they properly contract with the SPV by
signing a rental agreement for the lease of each Unit (the “Rental Agreement”).
1.4. Without derogating from anything stated in the Management Agreement, after
renting out a Unit to any lessee, the Property Manager shall take measures to
satisfy the obligations incumbent on the SPV, as the lessor of the Unit, vis à vis
and with respect to said lessee; this includes – collecting rent (and/or any other
payment incumbent on the lessee under the Rental Agreement) (the “Rental
Fees”). The Property Manager shall transfer said Rental Fees it collects to SPV,
subject to the provisions of this Agreement hereinafter.
The Property Manager, personally or by means of professionals on its behalf,
shall oversee the implementation of the complete ongoing maintenance of each
Unit incumbent on the SPV, as the lessor of the property to said lesee, under the
Rental Agreement. It is confirmed that the Property Manager may hire the
services of secondary service providers to work under it, and/or the services of
subcontractors and/or various professionals, including a legal consultant,
accountant etc. for the performance of any of its undertakings under this
Agreement.
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2. Payment to the Property Manager for managing the Unit
2.1. Without derogating from any other right of the Property Manager under this
Agreement, the Property Manager shall be entitled to consideration for its
aforementioned management services of each Unit. The annual consideration to
which the Property Manager shall be entitled for said management services
shall be equivalent to eight percent (8%) of the Rental Fees generated by each
Unit for the relevant one-year period (and the respective relative part for each
subpart) (the “Current Management Fees”). The Current Management Fees for
each year shall be paid to the Property Manager in twelve (12) monthly
installments taken from the sum collected for each rental month – at said rate of
8%, at the start of each subsequent calendar month. As specified hereinafter,
the Property Manager shall be entitled to collect the Current Management Fees
by deducting said amount from the Rental Fees it receives, before transferring it
to the SPV.
3. The Investor’s and/or SPV’s undertakings with respect to the Unit
3.1. Without derogating from anything stated in the Management Agreement, the
Investor and/or the SPV shall pay the Property Manager the following amounts
with respect to its management of the Investor’s Unit (hereinafter: “the Current
Expenses”):
3.1.1. Payment of the maintenance expenses of the Investor’s Unit, and any
necessary cost for the maintenance and/or operation and/or preservation of
the Property, which shall be paid against invoices/receipts for actual
expenditures.
3.1.2. Payment of the expenses entailed by the property’s ongoing management
which do not fit under the category of the property’s ongoing physical
maintenance, for instance: taxes including municipal, fees, insurance fees,
waste removal, and any other payment made against invoices/receipts for
actual expenditures.
3.1.3. Payment of the costs entailed by the ongoing legal assistance enlisted
with respect to the Property’s management, and the full, ongoing support
provided by the LLC accountant until the annual report is filed with the US
tax authorities.
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3.2. It is hereby confirmed that the responsibility to pay the current expenses shall be
incumbent primarily on the SPV. If, at any time, the SPV lacks the means to satisfy
this obligation and fully pay off the current expenses, this obligation shall be
shouldered in full by the Parties.
3.3. Without derogating from any of the Investor’s undertakings under this
Agreement (including – to pay the ongoing management fees; the current
expenses and any other expense), it is hereby explicitly agreed, and the investor
consents, that the Property Manager is entitled (but not required) to collect all
the payments mentioned that the Investor is required to pay on account of the
Unit, out of the Rental Fee it collects for the SPV/the Investor, as specified
above, on account of the Unit. It is likewise agreed that the ongoing
management fee will first be deducted from the aforementioned Rental Fee.
3.4. It is hereby confirmed that the Property Manager shall take all reasonable
measures (but only to the extent permitted by law), to reduce the Current
Expenses. Payment of the Current Expenses shall be collected immediately
upon their emergence.
________________________ ________________________
The Investor The Property Manager
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Appendix C
[TO BE INSERTED]
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Appendix D
The Trust Letter
225 Mount Prospect, NewarkNJ
Dear Date: ______________
Mr. Alan Rubin (“the Trustee”)
Re: letter of instructions to the Trustee
1. We ask you to serve as a trustee to purchase the property at 2255 Country Corners
Drive Columbus, OH USA in accordance with the instructions below.
2. In accordance with the provisions of this Agreement signed between the parties on
October 10, 2012 (hereinafter: “the Agreement”), ________________ (hereinafter:
“the Investor”) shall deposit various sums constituting part of the consideration
money for the purchase of a Unit under the Agreement (hereinafter: “the Trust
Funds”). The Trust Funds shall be transferred to your trust account in accordance
with the account details specified at the end of this Trust Letter.
3. We hereby absolve you of any liability for the aforesaid and for any profit and/or loss
accrued with respect to the Trust Funds (apart from intentional acts done on your
part, should there be such). The fact that you provide services or have a business
relationship with one of the parties to this transaction does not and shall not
constitute grounds for removing you from this office and/or disqualifying you.
4. Subject to the satisfaction of the conditions set in the Agreement, the undersigned
hereby instruct and authorize you to transfer the Trust Funds, in whole or in part,
(including the profit derived therefrom) to the Property Manager and/or the Investor
and/or any third party, whichever is relevant, all in accordance with the provisions of
the relevant section of the Agreement.
5. In any event, you shall not be responsible for any action performed as said in
accordance with this letter; any such action shall be considered our doing, and/or the
doing of one of us, whichever is relevant, and we shall indemnify you for any
expense you are caused and/or any claim and/or suit filed against you as a result of
L6577365:3 501422.1 / RXT
any action you perform on our instructions as said and/or in accordance with this
letter as said.
6. Account details for transferring the investment sums:
Investors Savings Bank
1128 Liberty Avenue
Hillside, NJ07205
ABA #: 221272031
Credit to: Rubin &Dombeck, LLC
New Jersey Attorney Trust Account
Account #: 049903537
_________________________ _________________________
The Investor The Property Manager
The Trustee – Adv. Alan Rubin: _____________________________
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Appendix E
Power of Attorney
I, the undersigned, _________________, holder of ID ____________________, as a
member and holder of rights in the SPV (“the Purchase Company”), hereby appoint
the Property Manager to operate on my behalf to perform and implement Section
12.3 of the Acquisition and Management Agreement, and to take any other measure
in connection with the aforementioned Section in order to purchase the property at
2255 Country Corners Drive Columbus, OH USA.
And in witness thereof I have set my seal today, the ___ of _____________, 2014.
__________________