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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Page 1: Acquisition and Management Agreement - CITYR and Management Agreement ... Manager will incorporate a special purpose vehicle to ... bank or alternative financing for the difference

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

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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.

__________________