Document:

Exhibit 4.1

 

THE SECURITIES OFFERED
HEREIN HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE “1933 ACT”) AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR
TO U.S. PERSONS (AS THAT TERMS IS DEFINED IN THE 1933 ACT) UNLESS THE
SECURITIES ARE REGISTERED UNDER THE 1933 ACT, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT IS AVAILABLE. THIS SUBSCRIPTION IS
EXECUTED IN RELIANCE UPON THE EXEMPTIONS PROVIDED BY RULE 506 OF REGULATION D
UNDER THE 1933 ACT.

 

SUBSCRIPTION

 

THIS SUBSCRIPTION (the “Subscription”)
has been executed by the undersigned in connection with the offering of
2,500,000 shares of common stock, par value $0.001 (hereinafter referred to as
the “Stock”), of Cano Petroleum, Inc., a corporation organized under the laws
of the State of Delaware (hereinafter referred to as the “Issuer”).  There is no minimum offering.  The Stock being subscribed for pursuant to
this Subscription has not been registered under the 1933 Act.  The offer of the Stock and, if this
Subscription is accepted by the Issuer, the sale of Stock, is being made in
reliance upon Rule 506 of Regulation D promulgated under the 1933 Act. (All
dollar amounts in this Subscription are expressed in U.S. Dollars).

 

ARTICLE 1

SUBSCRIPTION

 

Subscription

 

1.1                                 The undersigned (individually, the “Subscriber”,
collectively, the “Subscribers”), as principal, hereby subscribe to purchase,
in the aggregate, a minimum of 500,000 (Five Hundred Thousand) shares of Common
Stock (the “Shares”), having a purchase price of $3.75 per Share.

 

Minimum Subscription

 

1.2                                 A minimum number of 500,000 Shares must be purchased by the
Subscriber.

 

Method of
Payment

 

1.3                                 Each Subscriber shall pay the respective
Subscription Price by delivering good funds in United States Dollars by way of
wire transfer of funds to the Issuer and concurrent with the execution and
delivery of this Subscription.  The wire
transfer instructions are:

 

Wires from Correspondent Banks Worldwide:

 

	
  Beneficiary
  Bank:

  	
   

  	
  Worth
  National Bank

  
	
   

  	
   

  	
  801 Cherry Street, unit 27

  
	
   

  	
   

  	
  Fort Worth, TX   76102

  
	
   

  	
   

  	
  Tel: 817-877-2018

  
	
  Beneficiary:

  	
   

  	
  Cano
  Petroleum, Inc.

  
	
  ABA
  Routing#:

  	
   

  	
  111907568

  
	
  Account
  Number:

  	
   

  	
  31002914

  

 

 

On or before March 23, 2005 (the “Closing Date”) the
Company shall issue and cause to be delivered to each Subscriber a certificate
or certificates representing the Shares (the “Certificates”) pursuant to
Article 6 hereof.  Upon receipt of the
Certificates, each Subscriber shall deliver the full Subscription Funds to the
wire instructions provided above.  The
Subscriber acknowledges that the subscription for Shares hereunder may be
rejected in whole or in part by the Issuer in its sole discretion.

 

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE
SUBSCRIBER

 

Representations and Warranties

 

2.1                                 Each Subscriber represents and warrants
in all material respects to the Issuer, with the intent that the Issuer will
rely thereon in accepting this Subscription, that:

 

(a)                                  Experience.  The
Subscriber is sufficiently experienced in financial and business matters to be
capable of evaluating the merits and risks of its investments, and to make an
informed decision relating thereto, and to protect its own interests in
connection with the purchase of the Shares;

 

(b)                                 Own Account. 
The Subscriber is purchasing the Shares as principal for its own
account.  The Subscriber is purchasing
the Stock for investment purposes only and not with an intent or view towards
further sale thereof, and has not pre-arranged any sale with any other subscriber;

 

(c)                                  Not Underwriter. 
The Subscriber is not an underwriter, or dealer in, the Stock, and the
Subscriber is not participating, pursuant to a contractual agreement, in a
distribution of the Stock;

 

(d)                                 Importance of Representations. 
The Subscriber understands that the Stock are being offered and sold to
it in reliance on an exemption from the registration requirements of the 1933
Act, and that the Issuer is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Subscriber set forth herein in order to determine the applicability of such
exemptions and the suitability of the Subscriber to acquire the Stock;

 

(e)                                  Registration. 
The Issuer shall cause a registration statement to be filed with and
declared effective by the Securities and Exchange Commission (the “SEC”) within
ninety (90) days of the Closing Date. The Purchaser represents and warrants and
hereby agrees that all offers and sales of the Securities shall be made only
pursuant to such registration or to such exemption from registration;

 

(f)                                    Risk.  The
Subscriber acknowledges that the purchase of the Stock involves a high degree
of risk, is aware of the risks and further acknowledges that it can bear the
economic risk of the Stock, including the total loss of its investment;

 

(g)                                 Current Information. 
The Subscriber has been furnished with or has acquired copies of all
requested information concerning the Issuer, including a copies of reports
filed by the Issuer pursuant to the United States Securities Exchange Act of
1934, as amended (the “1934 Act”);

 

 

(h)                                 Independent Investigation. 
The Subscriber, in making the decision to subscribe for the Shares, has
relied upon independent investigations made by it and its purchaser
representatives, if any, and the Subscriber and such representatives, if any,
have, prior to making this Subscription, been given access and the opportunity
to examine all material contracts and documents relating to this offering and
an opportunity to ask questions of, and to receive answers from, the Issuer or
any person acting on its behalf concerning the terms and conditions of this
offering.  The Subscriber and its
advisors, if any, have been furnished with access to all materials relating to
the business, finances and operation of the Issuer and materials relating to
the offer and sale of the Shares which have been requested.  The Subscriber and its advisors, if any, have
received complete and satisfactory answers to any such inquiries;

 

(i)                                     No Written or Oral Representations. 
No person has made to the Subscriber any written or oral representations

 

(i)                                                             that any person will resell or repurchase the Stock,

 

(ii)                                                          that any person will refund the purchase price of the Stock, or

 

(iii)                                                       as to the future price or value of the Stock;

 

(j)                                     No Recommendation or Endorsement. 
The Subscriber understands that no federal or state agency has passed on
or made any recommendation or endorsement of the Stock;

 

(k)                                  Partnership, Corporation or Trust. 
If the Subscriber is a partnership, corporation or trust, the person
executing this Subscription on its behalf represents and warrants that

 

(i)                                     he or she has made due inquiry to
determine the truthfulness of the representations and warranties made pursuant
to this Subscription, and

 

(ii)                                  he or she is duly authorized (and if the
undersigned is a trust, by the trust agreement) to make this investment and to
enter into and execute this Subscription on behalf of such entity;

 

(l)                                     Non-Affiliate Status. 
The Subscriber is not an affiliate of the Issuer nor is any affiliate of
the Subscriber an affiliate of the Issuer. In the event that the Subscriber is
or becomes an affiliate of the Issuer the Subscriber acknowledges that the
Stock held by it will be subject to additional resale restrictions under the
1933 Act;

 

(m)                               Other Subscribers. 
The Subscriber acknowledges that Shares may be issued to other
purchasers under this offering concurrently with the Closing;

 

(n)                                 No Advertisement or General Solicitation. 
The sale of the Shares has not been advertised through any article,
notice or other communication published in any newspaper, magazine, or similar
media or broadcast over television or radio; or through any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising;

 

(o)                                 Accredited Investor. 
The Subscriber is (i) an “accredited investor” as that term is defined
in Rule 501 of the General Rules and Regulations under the 1933 Act by reason
of Rule 501(a)(3),

 

 

(ii) experienced in making investments of the kind
described in this Agreement and the related documents, (iii) able, by reason of
the business and financial experience of its officers (if an entity) and
professional advisors (who are not affiliated with or compensated in any way by
the Company or any of its Affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Subscription,
and to evaluate the merits and risks of an investment in the Stock, and (iv)
able to afford the entire loss of its investment in the Stock.;

 

(p)                                 Hedging Transactions. 
The Subscriber acknowledges and agrees that all offers and sales of the
Stock, as applicable, by the Subscriber shall be made only pursuant to
registration of the Stock under the 1933 Act, or pursuant to an available
exemption from the registration requirements of the 1933 Act.;

 

(q)                                 Beneficial Ownership. 
Upon consummation of the transactions contemplated by this Subscription,
the Subscriber will be the beneficial owner of the Stock issued to it pursuant
to this Subscription.  The Subscriber
will share beneficial ownership of the Stock with Wellington Management
Company, llp as its investment adviser. The Subscriber has not pre-arranged any
sale of the Stock with any person or persons in the United States;

 

(r)                                    No Short Position.  The Subscriber will not, directly or
indirectly, or through one or more intermediaries, maintain any short position
in the common shares of the Company during the applicable distribution
compliance period;

 

(s)                                  Restriction on Transfer. 
The Subscriber understands and acknowledges that the Issuer will not
allow any transfer or other disposition of the Stock until the Stock has been
registered under the 1933 Act.  The
Certificate(s), as well as any certificate representing the Common Shares,
shall bear the following legend in addition to any other legend required under
this Subscription:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

Non-Merger and Survival

 

2.2                                 The representations and warranties of the
Subscribers contained herein will be true at the date of execution of this
Subscription by the Subscribers and as of the Closing Date in all material
respects as though such representations and warranties were made as of such
times and shall survive the Closing Date and the delivery of the Certificates.

 

Indemnity

 

2.3                                 The Subscriber agrees to indemnify and
hold harmless the Issuer from and against any and all claims, demands, actions,
suits, proceedings, assessments, judgments, damages, costs, losses and
expenses, including attorney’s fees incurred in contesting any such claim and
any payment made in good faith in settlement of any claim (subject to the right
of the Subscriber to defend any such claim), resulting from the breach of any
representation or warranty of such party under this Subscription.

 

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

3.1                                 The Issuer, upon taking up and accepting
this Subscription, represents and warrants in all material respects to the
Subscriber, with the intent that the Subscriber will rely thereon in making
this Subscription, that:

 

(a)                                Legality.  The Issuer
has the requisite corporate power and authority to accept this Subscription and
to issue, sell and deliver the Shares; this Subscription and the issuance, sale
and delivery of the Shares hereunder and the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action by the
Issuer; this Subscription and the Shares have been duly and validly executed
and delivered by and on behalf of the Issuer, and are valid and binding
agreements of the Issuer, enforceable in accordance with their respective
terms, except as enforceability may be limited by general equitable principles,
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, or
other laws affecting creditors’ rights generally;

 

(b)                               Transfer.  Provided that
a registration statement in respect of the Shares is in effect as required
under all applicable securities laws, such Shares shall be freely transferable
on the books and records of the Issuer, provided that the sale is made to a
bona-fide purchaser and that the prospectus delivery requirements are met;

 

(c)                                Listed Company Status. 
The Issuer is required to make current filings with the SEC pursuant to
Section 13 or 15(d) of the 1934 Act,
the Stock is presently quoted on the NASD “Bulletin Board” and the Issuer has
received no notice, either oral or written, with respect to its continued
eligibility for such listing;

 

(d)                               Proper Organization. 
The Issuer is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
qualified as a foreign corporation in all jurisdictions where the failure to be
so qualified would have a materially adverse effect on its business, taken as
whole;

 

(e)                                No Legal Proceedings. 
There is no action, suit or proceeding before or by any court or any
governmental agency or body, domestic or foreign, now pending or to the
knowledge of the Issuer, threatened, against or affecting the Issuer, or any of
its properties or assets, which might result in any material adverse change in
the condition (financial or otherwise) or in the earnings, business affairs or
business prospects of the Issuer, or which might materially and adversely
affect the properties or assets thereof;

 

(f)                                  Non-Default. 
The Issuer is not in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust or other material instrument or agreement to
which it is a party or by which it or its property may be bound; and

 

(g)                               Non-Contravention.  The execution and delivery of this
Subscription and the consummation of the issuance of the Shares and the
transactions contemplated by this Agreement do not and will not conflict with
or result in a breach by the Issuer of any of the terms or provisions of, or constitute a default under, the Articles
of Incorporation or Bylaws of the Issuer, or any indenture, mortgage, deed of trust,
or other material 

 

 

agreement or instrument to which the Issuer is a party
or by which it or any of its properties or assets are bound, or any existing
applicable decree, judgment or order of any court, Federal or State regulatory
body, administrative agency or other domestic governmental body having
jurisdiction over the Issuer or any of its properties or assets.  

 

(h)                               Issuer
represents that all Series B Preferred Shareholder and Series C Preferred
Shareholders shall convert their shares to common stock of the Company prior to
the Closing Date of this Subscription.

 

Non-Merger and Survival

 

3.2                                 The representations and warranties of the
Issuer contained herein will be true at the date of execution of this
Subscription by the Issuer and as of the Closing Date in all material respects
as though such representations and warranties were made as of such times and
shall survive the Closing Date and the delivery of the Certificates.

 

Indemnity

 

3.3                                 The Issuer agrees to indemnify and hold
harmless the Subscriber from and against any and all claims, demands, actions,
suits, proceedings, assessments, judgments, damages, costs, losses and
expenses, including attorney’s fees incurred in contesting any such claim and
any payment made in good faith in settlement of any claim (subject to the right
of the Issuer to defend any such claim), resulting from the breach of any
representation, warranty or covenant of such party under this Subscription.

 

ARTICLE 4

COVENANTS OF THE ISSUER

 

Covenants
of the Issuer

 

4.1                                 The Issuer covenants and agrees with the
Subscriber that:

 

(a)                                  Filings.  The Issuer
will make all necessary filings in connection with the sale of the Shares as
required by the laws and regulations of all appropriate jurisdictions;

 

(b)                                 Section 13 Compliance. 
The Issuer shall, from and after the Closing Date, use its best efforts
to comply with the requirements of Section 13 of the 1934 Act and maintain the
quotation of the Common Stock on the NASD “Bulletin Board” or other quotation
medium which is equal to or senior to the NASD “Bulletin Board”;

 

(c)                                  Rule 144 Opinion. 
The Issuer will, upon written request by the Subscriber, take such steps
as are necessary to cause its counsel to issue an opinion to the Issuer’s
transfer agent allowing the Subscriber to offer and sell any Shares issued in
reliance on the applicable provisions of Rule 144 provided that the holding
period and other requirements of such Rule 144 are met.  The costs of obtaining such an opinion shall
be borne by the Issuer; and

 

(d)                                 Use of Proceeds. 
The Issuer will apply the Subscription Price, together will all other
subscription funds received from other subscribers under this offering,
substantially in 

 

 

accordance with the use of proceeds attached hereto as
Annex I, the terms of which are incorporated by reference herein, and for no
other purposes.

 

Survival

 

4.2                                 The covenants set forth in this Article 4
shall survive the Closing for the benefit of the Subscriber.

 

ARTICLE
5

DEMAND
REGISTRATION RIGHTS

 

Registration Statement

 

4.1                                 Upon
the Closing, the Issuer shall use its best efforts to file a registration
statement on Form SB-2 (or similar form) under the 1933 Act and under any
applicable Blue Sky laws registering the resale of Shares and shall use its
best efforts to cause such registration statement to be declared effective by
the Commission at the earliest practicable date, all at the Issuer’s sole cost
and expense.  Such best efforts shall include promptly responding to all
comments received by the staff of the SEC, and promptly preparing and filing
amendments to such registration statement which are responsive to the comments
received from the staff of the SEC, and in no event later than twenty-one (21)
days from receipt by the Issuer of the comments of the staff of the SEC. 
Such registration statement shall name the Subscriber as a selling shareholder
and shall provide for the sale of the Shares by the Subscriber from time to
time directly to purchasers or in the over-the-counter market or through or to
securities brokers or dealers that may receive compensation in the form of
discounts, concessions, or commissions.  The Issuer shall provide the
Subscriber with such number of copies of the prospectus as shall be reasonably
requested to facilitate the sale of the Shares.  None of the foregoing
shall in any way limit the Subscriber’s rights to sell the Shares in reliance
on an exemption from the registration requirements under the 1933 Act in
connection with a particular transaction.

 

Currency of Registration
Statement

 

4.2                                 The
Issuer shall use its best efforts to maintain the currency of the registration
statement filed with the SEC and under all applicable Blue Sky laws in respect
of the Shares for 12 months from the Closing Date.

 

Indemnification of
Subscriber by Issuer

 

4.3                                 To
the extent permitted by law, the Issuer will indemnify the Subscriber, within
the meaning of Section 15 of the 1933 Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Subscription
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the 1933 Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or treated, to the extent such expenses, claims, losses,
damages or liabilities arise out of or are based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation by the Issuer of the 1933 Act or any rule or regulation
promulgated under the 1933 Act applicable to the Issuer in connection with any
such registration, qualification or compliance, and the Issuer will reimburse
the Subscriber, each of its officers and directors and partners, and each 

 

 

person
controlling the Subscriber, each such underwriter and each person who controls
any such underwriter, for any legal and any other expense reasonably incurred
in connection with investigation, preparing or defending any such claim, loss,
damage, liability or action, provided, however, that the indemnity contained
herein shall not apply to amounts paid in settlement of any claim, loss,
damage, liability or expense if settlement is effected without the consent of
the Issuer (which consent shall not unreasonably be withheld); provided,
further, that the Issuer will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission or alleged untrue statement or omission, made
in reliance upon and in conformity with written information furnished to the Issuer
by the Subscriber, such controlling person or such underwriter specifically for
use therein.  Notwithstanding the
foregoing, insofar as the foregoing indemnity relates to any such untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in the preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement becomes
effective or in the final prospectus filed with the SEC pursuant to Rule 424(b)
of the SEC, the indemnity agreement herein shall not inure to the benefit of
any underwriter or (if there is no underwriter) the Subscriber if a copy of the
final prospectus filed pursuant to Rule 424(b) was not furnished to the person
or entity asserting the loss, liability, claim or damage at or prior to the
time such furnishing is required by the 1933 Act.

 

Indemnification of Issuer
by Subscriber

 

4.4                                 To
the extent permitted by law, the Subscriber will indemnify the Issuer, each of
its directors and officers, affiliates, counsel, advisors, employees and, each
underwriter, if any, of the Issuer’s securities covered by such a registration
statement, each person who controls the Issuer or such underwriter within the
meaning of Section 15 of the 1933 Act, and each other person selling the Issuer’s
securities covered by such registration statement, each of such person’s
officers and directors and each person controlling such persons within the
meaning of Section 15 of the 1933 Act, against all claims, losses, damages and
liabilities (or actions in respect thereof), including attorneys fees and
costs, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or alleged
omission) to state therein or necessary to make the statements therein not
misleading or any other violation by the Subscriber of any rule or regulation
promulgated under the 1933 Act applicable to the Subscriber and relating to
action or inaction required of the Subscriber in connection with any such
registration, qualification or compliance, and will reimburse the Issuer, such
other person, such directors, officers, persons, underwriters or control
persons for any legal or other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that the indemnity contained herein shall not apply to
amounts paid in settlement of any claim, loss, damage, liability or expense if
settlement is effected without the consent of the Subscriber (which consent
shall not be unreasonably withheld). Notwithstanding the foregoing, the
liability of the Subscriber under this subsection (b) shall be limited in an
amount equal to the net proceeds from the sale of the shares sold by the
Subscriber, unless such liability arises out of or is based on wilful conduct
by the Subscriber.

 

Removal of Legend

 

4.5                                 After
the registration statement referenced in Section 4.1 is declared effective by
the SEC, the Subscribers may deliver to the Issuer the Certificate representing
the Shares issued to such Subscriber and the Issuer will, within three days
after receipt by the Issuer of the foregoing, issue a new certificate
representing and in exchange for the aforementioned certificate, which new
certificate shall be legended as follows:

 

 

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THE SECURITIES MAY BE SOLD PURSUANT TO THE REGISTRATION
STATEMENT PROVIDED THAT (I) THE REGISTRATION STATEMENT IS CURRENT AND
EFFECTIVE, (II) THE HOLDER COMPLIES WITH THE PROSPECTUS DELIVERY REQUIREMENTS
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND (III) THE SALE IS IN
COMPLIANCE WITH THE PLAN OF DISTRIBUTION SET FORTH IN THE PROSPECTUS. THE
TRANSFER OF SUCH SECURITIES IS RESTRICTED AS SET FORTH IN A SUBSCRIPTION
AGREEMENT BETWEEN THE ISSUER AND THE HOLDER, A COPY OF WHICH MAY BE OBTAINED
FROM THE ISSUER.

 

ARTICLE
6

ISSUANCE
OF CERTIFICATES

 

On or
immediately following the Closing Date, the Issuer will prepare and issue one
or more Certificates for the Shares registered in such name or names as
specified by the Subscriber and cause the same to be delivered to the Subscriber
pursuant to the delivery instructions provided by the Subscriber.

 

ARTICLE 7

CLOSING

 

Closing shall be effected through the acceptance of
this Subscription by the Issuer, the taking up of the Subscription Funds by the
Issuer, and the delivery of certificates evidencing the Stock to the Subscriber
(or the Subscriber’s Representative) by the Issuer.

 

ARTICLE 8

GENERAL PROVISIONS

 

Governing
Law

 

8.1                                 This
Subscription shall be governed by and construed under the law of the State of
Delaware without regard to its choice of law provision.  Any disputes arising out of, in connection
with, or with respect to this Subscription, the subject matter hereof, the
performance or non-performance of any obligation hereunder, or any of the
transactions contemplated hereby shall be adjudicated in a Court of competent
civil jurisdiction sitting in the City of Wilmington, Delaware and nowhere
else.

 

Successors
and Assigns

 

8.2                                 This Subscription shall inure to the
benefit of and be binding on the respective successors and assigns of the
parties hereto.

 

 

Execution by Counterparts and Facsimile

 

8.3                                 This Subscription may be executed in
counterparts and by facsimile, each of which when executed by any party will be
deemed to be an original and all of which counterparts will together constitute
one and the same Subscription.

 

SIGNATURE
PAGE FOR ENTITIES

 

IN WITNESS WHEREOF, the undersigned
represents that the foregoing statements are true and that it caused this
Subscription to be duly executed on its behalf on this 18th day of
March, 2005.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Printed Name

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Printed
  Title

  	
   

  	
   

  
						

 

 

Agreed to this
18 day of March        , 2005:

 

CANO PETROLEUM, INC.

 

 

	
  Per:

  	
   

  	
   

  
	
   

  
	
  Print Name:

  

 

 

This is page
12 to the Subscription by the above subscriber to Cano Petroleum, Inc. dated as
stated above.

 

 

Full Name and Address of
Subscriber for Registration Purposes:

 

 

	
  NAME:

  	
   

  	
   

  
	
   

  
	
   

  
	
  ADDRESS:

  	
   

  	
   

  
	
   

  
	
   

  
	
  TEL.NO.:

  	
   

  	
   

  
	
   

  
	
  FAX NO.:

  	
   

  	
   

  
	
   

  
	
  EMAIL
  ADDRESS:

  	
   

  	
   

  
	
   

  
	
  CONTACT
  NAME:

  	
   

  	
   

  
										

 

Delivery Instructions (if
different from Registration Name):

 

	
  NAME:

  	
   

  	
   

  
	
   

  
	
  ADDRESS:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  TEL.NO.:

  	
   

  	
   

  
	
   

  
	
  FAX NO.:

  	
   

  	
   

  
	
   

  
	
  CONTACT
  NAME:

  	
   

  	
   

  
	
   

  
	
  SPECIAL
  INSTRUCTIONS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
											

 

 

This is page
13 to the Subscription by the above subscriber to Cano Petroleum, Inc.

 

 

Annex I

Use of
Proceeds

2,500,000
Shares Common Stock

$4
per Share

 

	
  Item

  	
   

  	
  Maximum

  Offering

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Gross Proceeds

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Costs

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Registration Statement

  	
   

  	
  $

  	
  20,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Net Proceeds

  	
   

  	
  $

  	
  9,480,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Property Acquisitions (Tejas)

  	
   

  	
  $

  	
  4,000,000

  	
   

  
	
  Waterflood Pilot (Tejas)

  	
   

  	
  $

  	
  2,200,000

  	
   

  
	
  ASP Pilot (Nowata)

  	
   

  	
  $

  	
  2,300,000

  	
   

  
	
  Total Costs

  	
   

  	
  $

  	
  8,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Unallocated Working Capital

  	
   

  	
  $

  	
  1,500,000Exhibit 10.1

 

AGREEMENT FOR SALE OF
MEMBERSHIP INTERESTS

 

THIS AGREEMENT FOR
SALE OF MEMBERSHIP INTERESTS is made as of this 22nd
day of March, 2005 (this “Agreement”), by and between WHITEHALL V-S REAL ESTATE LIMITED PARTNERSHIP
(“Whitehall”), a Delaware limited partnership, BRIDGE STREET REAL ESTATE FUND 1996, L.P. (“Bridge”), a
Delaware limited partnership, STONE STREET
GMH-S CORP. (“Stone Street”), a Delaware corporation, STONE STREET REAL ESTATE FUND 1996, L.P., a
Delaware limited partnership (“Stone Street Fund”, together with Whitehall,
Bridge, and Stone Street, sometimes collectively hereinafter referred to as “Whitehall
Sellers”), GH COLLEGE PARK, INC.,
a Pennsylvania corporation (“College Park”),
GARY M. HOLLOWAY, SR. (“Holloway”),
BRUCE F. ROBINSON (“Robinson”), FRANK
TROPEA (“Tropea”), JOSEPH M. COYLE
(“J. Coyle”), MICHAEL MAYOCK (“Mayock”),
LOUIS BATTAGLIESE (“Battagliese”),
ROBERT DIGIUSEPPE (“DiGiuseppe”), DENISE HUBLEY (“Hubley”), DAVID FORREST (“Forrest”), MICHAEL MAHER (“Maher”) and CATHY COYLE (“C. Coyle”; together with
Holloway, Robinson, Tropea, J. Coyle, Mayock, Battagliese, DiGiuseppe, Hubley,
Forrest and Maher, collectively hereinafter referred to as “GMH Partners”;
together with College Park, collectively hereinafter referred to as “GMH
Sellers”) (Whitehall Sellers and GMH Sellers sometimes collectively hereinafter
referred to as, “Seller”), and STATE COLLEGE
INTERMEDIATE, LLC, a Delaware limited liability company and GMH COMMUNITIES, LP, a Delaware limited
partnership (collectively, “Purchaser”).

 

WHEREAS,
the Whitehall Sellers and GMH Sellers are all of the members of WHGMH REALTY,
L.L.C., a Delaware limited liability company (the “LLC”), which LLC was formed

 

 

pursuant to that certain Limited Liability Company Agreement of WHGMH
Realty, L.L.C., dated December 19, 1995, as amended by that certain
Amendment to Limited Liability Company Agreement of WHGMH Realty, L.L.C. dated
of even date herewith, as amended (the “LLC Agreement”);

 

WHEREAS,
the parties have agreed to enter into a transaction pursuant to which Purchaser
will acquire Seller’s entire membership interests in the LLC (the “LLC
Interests”);

 

WHEREAS,
the parties hereto desire to enter into this Agreement in order to memorialize
the transaction described above.

 

NOW, THEREFORE, in consideration of the
mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:

 

ARTICLE 1

 

SALE OF THE PROPERTY

 

1.1                                 Property
to be Sold and Conveyed.  Subject to
the terms, conditions and covenants of this Agreement, each of the GMH Sellers
and Whitehall Sellers agrees to sell, transfer and assign to Purchaser, and
Purchaser agrees to purchase from Seller, as a several but not joint
obligation, their respective Membership Interests which Seller owns, which
Membership Interests shall be allocated amongst Purchaser in the manner
designated by Purchaser.  The LLC is the
current owner of fee simple title to that certain 196 unit apartment project,
known as State College Park Apartments located in State College, Pennsylvania,
being more particularly described in Exhibit “A” (the “Property”).

 

2

 

ARTICLE 2

 

CONSIDERATION

 

2.1                                 Purchase
Price.  Purchaser shall pay to each
of the Whitehall Sellers and GMH Sellers for the sale (in the case of the
Whitehall Sellers) and sale and/or contribution (in the case of the GMH
Sellers) of their respective Membership Interests to Purchaser for the
aggregate price of Nineteen Million Sixty-One Thousand Seven Hundred Fifty and
00/100 Dollars ($19,061,750.00) (the “Purchase Price”) which shall be payable
to the Whitehall Sellers in cash and to the GMH Sellers in cash and/or operating
units in GMH Communities, LP, which Purchase Price shall be adjusted and
apportioned as provided herein and allocated amongst the Seller in accordance
with their respective percentage interests in the LLC as specified in the LLC
Agreement (the “Percentage Interests”), as set forth on Schedule 2
attached hereto and made a part hereof.

 

2.2                                 Payment
of the Purchase Price.  The Purchase
Price shall be paid as follows:

 

(a) A deposit of TWO HUNDRED THOUSAND
DOLLARS ($200,000.00) (the “Deposit”) shall be paid by Purchaser to
Commonwealth Land Title Insurance Company, 1700 Market Street, Suite 2110,
Philadelphia, Pennsylvania 19103, Attention: Celeste Heuberger, as escrow agent
(the “Escrow Agent”), within five (5) business days after the Effective
Date (as defined herein), which at Purchaser’s option may be by certified or
bank cashier’s check or by wire transfer. 
For purposes of this Agreement, “Effective Date” shall mean the date on
which Purchaser and all of the Whitehall Sellers and GMH Sellers have executed
this Agreement. The Deposit shall remain applicable to the Purchase Price and
shall become non-refundable to Purchaser except as may otherwise be provided in
accordance with the terms and provisions hereof. The Deposit shall be held in
escrow until the Closing (defined below), at which time the Deposit shall be
allocated amongst the Whitehall Sellers and GMH Sellers in accordance with
their Percentage Interests, as a credit against the Purchase Price, or may be
sooner released in

 

3

 

accordance with
the terms hereof. Escrow Agent shall be authorized, at Purchaser’s option, to
invest the Deposit in an interest-bearing account in the name of Escrow Agent
in such commercial bank as it deems appropriate. All interest or other earnings
on the Deposit shall become a part of the Deposit and be disbursed to the party
entitled to the Deposit pursuant to the terms and provisions hereof, and

 

(b)                                 The
balance of the Purchase Price shall be paid by Purchaser to the Whitehall
Sellers, in cash, and GMH Sellers, in cash and/or operating units, in
accordance with their Percentage Interests by wire transfer funds, or issuance
of operating units, at Closing, to such account or accounts as directed by the
Whitehall Sellers and GMH Sellers, as applicable, in writing.

 

ARTICLE 3

 

CLOSING

 

3.1                                 Closing.  The parties agree that the closing of the
purchase and sale of the Membership Interests (the “Closing”) shall take place
on or prior to fifteen (15) days following the expiration of the Due Diligence
Period, TIME BEING OF THE ESSENCE, or such sooner date on which the parties may
agree (such date, as the same may be changed or extended, being referred to
herein as the “Closing Date”). The Closing shall take place through an escrow
closing with the Escrow Agent.

 

3.2                                 Apportionments;
LLC Allocations.

 

(a)                                  At
the Closing, the following items shall be apportioned as of the Closing Date:

 

(i)                                     Real
estate taxes and assessments, if any, for the current calendar year; provided,
however, that if the amount of such taxes and assessments for such year is not

 

4

 

known at the time
of Closing, such apportionment shall be based upon the most current assessment
of the Property and the tax rate for the previous calendar year.  The current installment of any general or
special assessments levied or assessed for work completed prior to the Closing
shall be apportioned between Seller and Purchaser as of the Closing Date; provided,
however, that any prior installments of any general and special assessments due
and payable prior to the Closing Date shall be apportioned to Seller and future
installments of any general and special assessments due and payable following
the Closing Date shall be apportioned to Purchaser;

 

(ii)                                  Fuel,
water, sewer use and other municipal utility charges;

 

(iii)                               All
rents collected from tenants under the Leases for the month in which the
Closing occurs and other income shall be prorated as of the Closing Date in
accordance with the terms hereof, and Seller shall retain all rights to rents
allocable to periods prior to the Closing Date. With respect to such rents for
the month in which Closing occurs which are actually collected by the LLC prior
to Closing, the LLC shall pay to Purchaser, by deduction of the amount due on
Purchaser’s closing statement, the amount of any rents actually collected by
the LLC from tenants under the Leases relative to the period from and after the
Closing Date.  Rents received by the LLC
after the Closing Date shall be applied by the LLC first to current rents
and/or uncollected rents due for the period after the Closing Date, then to pay
reasonable costs of collection incurred by the LLC, then to Seller, to the
extent of any uncollected rents for the period prior to the Closing Date (the “Delinquent
Rents”), then to Purchaser, for future rents due or to become due under the
Leases. The LLC shall use reasonable efforts after Closing
to collect such Delinquent Rents, but nothing herein shall obligate or require

 

5

 

the LLC to
institute a lawsuit, evict any tenant, exercise any lease remedies, or
otherwise incur any costs or expenses to recover such amounts;

 

(iv)                              Purchaser
shall receive a credit to the Purchase Price equal to the amount of (A) that
portion of any prepaid rents applicable to the time period after the Closing
actually received by the Partnership, (B) security deposits and other
deposits paid by the tenants under any of the Leases not applied by the LLC
prior to Closing; and (C) all interest unpaid and owing thereon or
required by law to be paid to tenants, if any; and

 

(v)                                 Amounts
owing, prepaid or received by the LLC prior to Closing on all Contracts.

 

Purchaser, at its sole option, shall have the
exclusive right to file and prosecute an application for a real estate tax
abatement or reduction or any litigation against the applicable taxing
authorities relating to any taxes assessed against the Property.  The GMH Sellers agree to fully cooperate with
Purchaser, at no cost or expense to the GMH Sellers, with respect to any such
application and/or litigation and further authorize Purchaser to endorse and
cash any tax abatement or reduction check which Purchaser receives or which is
issued to Purchaser and, for such purposes, the GMH Sellers grant to Purchaser
an irrevocable power of attorney coupled with an interest.  The amount of any abatement or reduction
actually obtained, after adjustment of the legal fees, consultant fees and
related costs incurred in obtaining the abatement or reduction, shall be
apportioned between the parties.

 

In the event any apportionments pursuant to
this Agreement or, subsequent to Closing, are found to be erroneous, then
either party hereto who is entitled to additional monies shall invoice the
other party for such additional amounts as may be owing, with any
substantiation reasonably requested by the other party, and such amount shall
be paid within twenty (20) days

 

6

 

from receipt of
the invoice and verification of the same. This obligation shall survive the
Closing until the date of the Final True-Up (as hereinafter defined).  Notwithstanding the foregoing, if current
real estate taxes and assessments, if any, for the current fiscal tax period
cannot be determined at Closing, then such taxes and assessments shall be
adjusted when the actual amount(s) of such taxes and assessments are known (not
later than the date of the Final True-Up).

 

Except for liabilities and expenses prorated
and/or expressly assumed in this Agreement, and/or the Closing Documents, the
LLC shall remain obligated for any and all liabilities and expenses related to
the ownership and operation of the Property accruing prior to the Closing Date
in accordance with the terms and provisions of the Escrow Agreement (as
hereinafter defined) and Purchaser shall be liable for any and all liabilities
and expenses related to the ownership and operation of the Property accruing
from and after the Closing Date.

 

(b)                                 All
items of income, gain, loss, deduction and credit for calendar year 2005 in
respect of the Membership Interests shall be allocated between the Whitehall
Sellers and GMH Sellers, on the one hand, and Purchaser, on the other hand,
using the closing of the books method, notwithstanding anything to the contrary
set forth in the LLC Agreement, except that the Whitehall Sellers and GMH
Sellers agree to deposit the sum of Two Hundred Thousand Dollars ($200,000.00)
of the Purchase Price into escrow with the Title Company (the “Reserve”) under
a mutually satisfactory escrow agreement (the “Escrow Agreement”), which
Reserve shall either be disbursed to Purchaser, or shall be augmented by
Purchaser, in accordance with the calculation of the Final True-Up which shall
take place no later than 180 days after the Closing Date, at which time the
balance of the Reserve in the escrow account shall be disbursed to the
Whitehall Sellers and GMH Sellers in accordance with their Percentage
Interests. The provisions

 

7

 

of this paragraph
shall survive the execution and delivery of this Agreement and the Assignment
and Assumption (as hereinafter defined). 
This Section shall survive Closing for a period of 180 days.  Prior to that date which is 180 days after
the Closing, the parties hereto shall conduct a final accounting of all
apportionments and adjustments provided for herein (the “Final True-Up”).

 

3.3                                 Seller’s
Deliveries.  At the Closing, each of
the Whitehall Sellers and GMH Sellers shall deliver, as a
several but not joint and several obligation, the following to Purchaser (each
referred to hereinafter as a “Closing Document”):

 

(a)                                  an
agreement of assignment and assumption of the Membership Interests in the form
attached hereto as Exhibit “B” (the “Assignment and Assumption”);

 

(b)                                 a FIRPTA Affidavit; and

 

(c)                                  copies
of organizational documents and other evidence reasonably satisfactory to the
Escrow Agent of the capacity and authority of the persons signing, on behalf of
each of the Whitehall Sellers and GMH Sellers, this Agreement and all documents
delivered pursuant hereto and for the closing of this transaction.

 

3.4                                 Purchaser’s
Deliveries and Closing Conditions. 
At the Closing, Purchaser shall deliver to the Whitehall Sellers and GMH
Sellers (a) copies of organizational documents and other evidence
reasonably satisfactory to the Whitehall Sellers and GMH Sellers and the Escrow
Agent of the capacity and authority of the persons signing this Agreement on
behalf of Purchaser and all documents delivered hereto, (b) the balance of
the Purchase Price, as adjusted, and (c) all other executed documents and
instruments reasonably necessary to close this transaction or otherwise
required by this Agreement. Purchaser’s obligations hereunder are subject to (i) the
representations and warranties of each of the Whitehall Sellers and the GMH
Sellers set forth in

 

8

 

Section 7.2 hereof being true and
correct as of the Closing Date and (ii) the receipt by Purchaser, at the
Closing, of a bringdown or endorsement to the existing ALTA Extended Owner’s
Policy of Title Insurance (the “Title Policy”) issued by the Escrow Agent,
dated as of the Closing Date.  Purchaser’s
obligations hereunder are also subject to the assignment of the Membership
Interests, which Membership Interests shall be assigned by the Whitehall
Sellers and GMH Sellers to Purchaser “as is”; provided, however, that the
Membership Interests shall be assigned free and clear of any liens, claims, pledges
and encumbrances.  The Whitehall Sellers
and GMH Sellers shall not, as a several and not a
joint and several obligation, encumber the Membership Interests without
Purchaser’s prior written consent.

 

3.5                                 Closing.  Except to the extent provided herein, each
party shall pay its own costs and attorney’s fees associated with this
transaction. Any transfer, conveyance, documentary and intangible fees and
taxes due in connection with the assignment of the Membership Interests to
Purchaser shall be split equally by Purchaser and the Partnership.  Purchaser shall pay for the costs of the
title search and the premium for issuance of the owner’s and lender’s Title
Policy and any endorsements thereto. Purchaser shall remain solely responsible
for the payment of all costs and fees associated with any and all updates to
the Existing Survey (as hereinafter defined) and any and all costs and fees
incurred by Purchaser in the performance of its due diligence investigation and
studies of the Property.  The reasonable
escrow fees of the Escrow Agent, if any, shall be paid one-half by the LLC and
one-half by Purchaser.

 

9

 

ARTICLE 4

 

TITLE AND CONDITION OF PROPERTY

 

4.1                                 Title.  Purchaser shall have the right to obtain an
update (the “Updated Survey”) to any existing survey (the “Existing Survey”),
at its sole cost and expense.

 

4.2                                 Condition
of Property.

 

(a)                                  PURCHASER
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER SELLER, NOR ANY AGENT OR REPRESENTATIVE OF SELLER HAS MADE, AND SELLER
IS NOT LIABLE OR RESPONSIBLE FOR OR BOUND IN ANY MANNER BY, ANY EXPRESS OR
IMPLIED REPRESENTATIONS, WARRANTIES, COVENANTS, AGREEMENTS, OBLIGATIONS,
GUARANTEES, STATEMENT, INFORMATION OR INDUCEMENTS PERTAINING TO THE PROPERTY OR
ANY PART THEREOF, TITLE TO THE PROPERTY, THE PHYSICAL CONDITION THEREOF,
THE ENVIRONMENTAL CONDITION THEREOF, THE FITNESS AND QUALITY THEREOF, THE
INCOME EXPENSES OR OPERATION THEREOF, AND THE VALUE AND PROFITABILITY THEREOF,
THE USES WHICH CAN BE MADE THEREOF, CURRENT AND FUTURE ZONING, THE SUITABILITY
OF THE PROPERTY OR ANY PORTION THEREOF FOR RENOVATION OR CONSTRUCTION, OR ANY
OTHER MATTER OR THING WHATSOEVER WITH RESPECT THERETO. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, PURCHASER FOREVER RELEASES AND DISCHARGES SELLER FROM
ANY AND ALL OBLIGATIONS WITH RESPECT TO THE FOREGOING, INCLUDING, BUT NOT
LIMITED TO, ANY AND ALL CLAIMS OR OTHER LIABILITIES WHATSOEVER WITH RESPECT
THERETO. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PURCHASER
ACKNOWLEDGES, AGREES, REPRESENTS AND WARRANTS THAT PURCHASER IS NOT RELYING
UPON

 

10

 

ANY REPRESENTATION OR WARRANTY OF ANY SELLER
PARTY (AS HEREINAFTER DEFINED), NOR ANY BROKER OR REPRESENTATIVE OF SELLER,
WHETHER IMPLIED, PRESUMED OR EXPRESSLY PROVIDED AT LAW OR OTHERWISE, AND THAT
IT HAS HAD SUCH ACCESS TO THE PROPERTY AND TO INFORMATION AND DATA RELATING TO
ALL OF SAME AS PURCHASER HAS CONSIDERED NECESSARY, PRUDENT, APPROPRIATE OR
DESIRABLE FOR THE PURPOSES OF THIS TRANSACTION. WITHOUT LIMITING THE FOREGOING,
PURCHASER ACKNOWLEDGES AND AGREES THE PURCHASER IS PURCHASING THE MEMBERSHIP
INTERESTS “AS-IS”, EXCEPT AS OTHERWISE SET FORTH HEREIN.  PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT SELLER IS UNDER NO DUTY TO MAKE ANY INQUIRY REGARDING ANY MATTER THAT MAY OR
MAY NOT BE KNOWN TO ANY SELLER PARTY OR ANY BROKER OF SELLER.  THIS SECTION SHALL SURVIVE THE CLOSING,
OR, IF THE CLOSING DOES NOT OCCUR, SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT.

 

(b)                                 Without
limiting the terms and conditions of Article 4.2(a) above, none of
the Whitehall Sellers or the GMH Sellers warrant that the Property complies
with any current municipal, county, state or federal law, ordinance, regulation
or building code. Purchaser assumes all responsibility to review with such
appropriate governmental and quasi-governmental authorities as Purchaser deems
necessary. The provisions of this paragraph shall survive Closing. As used in
this Agreement, “Purchaser Party” or “Purchaser Parties” shall mean Purchaser,
any permitted assignee of Purchaser, and any partner or member in, or, as
applicable, any shareholder or director of Purchaser, or any permitted assignee
of Purchaser, as well as the officers, employees, attorneys, and agents of
Purchaser or any permitted assignee of Purchaser.  As used

 

11

 

in this
Agreement, “Seller Party” or “Seller Parties” shall mean each of the Whitehall
Sellers and GMH Sellers, and any partner or member in, or, as applicable, any
shareholder or director of each of the Whitehall Sellers and GMH Sellers, as
well as the officers, employees, attorneys, and agents of each of the Whitehall
Sellers and GMH Sellers.

 

4.3                                 Waiver
and Release.  Except as set forth in Section 7.2(A) hereof,
without limiting the provisions of Section 4.2(a) and (b), Purchaser,
for itself and any successors and assigns of Purchaser, waives its right to
recover from, and forever releases and discharges, and covenants not to sue,
any of the Whitehall Sellers or the GMH Sellers, Seller’s Affiliates or any
Seller Parties with respect to any and all Claims, whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in
any way be connected with the Property including the physical, environmental or
structural condition of the Property or any law or regulation applicable
thereto, including, without limitation, any Claim or matter relating to the
use, presence, discharge or release of Hazardous Materials on, under, in, above
or about the Property.  In connection
with this Section 4.3, Purchaser hereby waives,
releases and agrees not to commence any action, legal proceeding, cause of
action or suits in law or equity, of whatever kind or nature, including, but
not limited to, a private right of action under the federal superfund laws, 42
U.S.C. Sections 9601 et. seq. or any similar law, rule or
regulation and any action or claim based upon any common law or case law
directly or indirectly, against any of the Whitehall Sellers or the GMH
Sellers, Seller’s Affiliates or Seller Parties, or their agents in connection
with the Claims described above, except as specifically otherwise provided by Section 7.2(A) hereof.  Purchaser elects to and does assume all risk
for such Claims heretofore and hereafter arising, whether now known or unknown
by Purchaser, except as specifically otherwise provided by Section 7.2(A) hereof.  To the extent permitted by law, Purchaser
hereby

 

12

 

agrees, represents and warrants that Purchaser realizes and
acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to causes of action, claims, demands, debts, controversies,
damages, costs, losses and expenses which are presently unknown, unanticipated
and unsuspected, and Purchaser further agrees, represents and warrants that the
waivers and releases herein have been negotiated and agreed upon in light of
that realization and that, except as specifically otherwise provided by Section 7.2(A) hereof,
Purchaser nevertheless hereby intends to release, discharge and acquit the
Whitehall Sellers and GMH Sellers from any such unknown causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses
which might in any way be included as a material portion of the consideration
given to such Sellers by Purchaser in exchange for the Seller’s performance
hereunder.  Without limitation of the
foregoing, if Purchaser has actual knowledge of (i) a default in any of
the covenants, agreements or obligations to be performed by any of the Sellers
under this Agreement and/or (ii) any breach of or inaccuracy in any
representation of any Seller made in this Agreement which would entitle
Purchaser to terminate this Agreement, and nonetheless elects to proceed to
Closing, then Purchaser shall be deemed to have waived any such default and/or
breach or inaccuracy and shall have no Claim against any Seller with respect
thereto.

 

ARTICLE 5

 

PRE-CLOSING DELIVERIES OF SELLER; DUE
DILIGENCE

 

5.1                                 Deliveries
of GMH Sellers.  The GMH Sellers have
provided, or shall provide within five (5) business days following the
Effective Date, to Purchaser, copies of the Contracts, current rent rolls for
the Property, a copy of the certificate of insurance evidencing the insurance
coverage in place as of the Effective Date and, to the extent in the possession
of the GMH Sellers 

 

13

 

or the Partnership, copies of the Permits and
Reports, the Miscellaneous Agreements and all documents, records and other
information relating to the Property, including without limitation all of the
materials listed in Schedule 1 to the extent such materials are in
the possession of the GMH Sellers or the LLC (collectively, “Seller
Deliverables”).  The Whitehall
Sellers shall provide to the GMH Sellers or the Purchaser copies of any and all
tax returns of the Partnership, and documentation in support thereof, which may
not have been previously given to the GMH Sellers.

 

5.2                                 No
Obligation to Comply.  None of the
Whitehall Sellers or the GMH Sellers shall be obliged to cure any defects in
the Property or violations of law with respect to the Property, or to make any
capital improvements to the Property or repairs to the Property.  Between the Effective Date and the Closing
Date, the GMH Sellers will advise Purchaser of any written notice GMH Sellers
receive after the Effective Date from any Governmental Authority relating to or
in connection with the Property’s violation of any law or municipal ordinance,
order or requirement.

 

5.3                                 Due
Diligence.

 

(a)                                  Purchaser,
from time to time prior to Closing, shall have the right to inspect and
investigate each and every aspect of the Property, perform surveys, dig test
holes, make engineering studies, environmental studies and perform whatever
other tests and evaluations of the Property as Purchaser may elect, all either
independently or through agents, representatives or contractors of Purchaser’s
choosing.  Such investigation by
Purchaser may include, without limitation: (i)  matters relating to
governmental and other legal requirements with respect to the Property,
including without limitation taxes, assessments, zoning, use permit
requirements and building codes; (ii)  compliance with zoning, land use,
building, environmental

 

14

 

and other statutes, rules, or regulations
applicable to the Property; (iii)  the physical
condition of the Property, including, without limitation, the interior, the
exterior, the square footage of the improvements and of each tenant space
therein, the structure, the roof, the paving, the utilities, and all other
physical and functional aspects of the Property; and (iv) all matters
relating to the income and operating or capital expenses of the Property and
all related financial matters.  The GMH
Sellers shall freely cooperate with Purchaser’s due diligence of the Property,
and shall provide Purchaser with all documents, files and data requested by Purchaser
relating to the Property.

 

(b)                                 In
connection with any entry by Purchaser or any of its agents, employees or
contractors onto the Property, Purchaser shall give the GMH Sellers reasonable
advance notice of such entry and shall conduct such entry and any inspections
so as to reasonably minimize interference with Tenants.  Purchaser shall maintain, or shall cause its
contractors to maintain, public liability and property damage insurance
insuring Purchaser against any liability arising out of any entry or
inspections of the Property pursuant to the provisions hereof.  Such insurance shall be in the minimum amount
of $1,000,000 combined single limit for injury to or death of one or more
persons in an occurrence.  Purchaser
shall indemnify and hold the Partnership, the Whitehall Sellers and the GMH
Sellers harmless from and against any Claims arising out of or relating to any
entry on the Property by Purchaser in the course of performing any inspections,
testings or inquiries.

 

(c)                                  At
any time prior to the thirtieth (30th) day following the Effective Date (such
period, the “Due Diligence Period”), Purchaser may, in its sole and
absolute discretion, and for any or no reason whatsoever, terminate this
Agreement by written notice to the Whitehall Sellers and the GMH Sellers,
whereupon the Deposit shall be returned to Purchaser on the first

 

15

 

business
day following such termination, by wire transfer (pursuant to Purchaser’s
wiring instructions) of immediately available funds.  The foregoing termination rights have been
granted to Purchaser in consideration of the payment of Ten Dollars ($10.00)
and other independent, valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the Whitehall Sellers and the GMH Sellers.

 

(d)                                 Notwithstanding
any provision in this Agreement to the contrary or unless required by law,
Purchaser shall not, and shall cause all of its agents, contractors or
representatives not to, contact or communicate with any Governmental Authority
regarding any Hazardous Materials (as hereinafter defined) on the Property,
without prior consent of the Whitehall Sellers and GMH Sellers.  The GMH Sellers shall have the right to have
a representative present when Purchaser or any agent, contractor or
representative of Purchaser has, or causes to be had, any such contact or
communication with any Governmental Authority. 
The GMH Sellers agree to cooperate in making a representative available during
normal business hours and upon 48 hours’ prior written notice for such
purposes.  As used herein, “Governmental
Authority” shall mean any federal, state, county or municipal government, or
political subdivision thereof, any governmental agency, authority, board,
bureau, commission, department, instrumentality, or public body, or any court
or administrative tribunal.  As used
herein, “Hazardous Materials” shall mean materials, wastes or substances that
are (a) included within the definition of any one or more of the terms “hazardous
substances,” “hazardous materials,” “toxic substances,” “toxic pollutants” and “hazardous
waste” in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601, et  seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et
seq.), the Clean Water Act (33 U.S.C. Section 1251, et  seq.),
the Safe Drinking Water

 

16

 

Act (14 U.S.C. Section 1401, et  seq.),
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et
seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601,
et  seq.) and the regulations promulgated pursuant to such laws, (b) regulated,
or classified as hazardous or toxic, under other federal, state or local
environmental laws or regulations, (c) petroleum, (d) asbestos or
asbestos-containing materials, (e) polychlorinated biphenyls, (f) flammable
explosives or (g) radioactive materials.

 

5.4                                 Intentionally
Omitted.

 

5.5                                 Title
and Survey.

 

(a)                                  Purchaser
shall have the right to obtain, at Purchaser’s expense, promptly after the
Effective Date, a bringdown or endorsement to the Title Policy (the “Title
Bringdown”) as issued by the Escrow Agent and legible copies of all recorded
instruments and maps affecting the Property and recited as exceptions or
referred to in the Title Bringdown (collectively, the “Exceptions”).

 

(b)                                 If
Purchaser has an objection to any matters disclosed in the Title Bringdown, the
Exceptions, or the Updated Survey and the LLC is unwilling to cure any such
Exceptions, Purchaser shall have until the expiration of the Due Diligence
Period to either (i) terminate this Agreement, in which case the Deposit
shall be refunded to Purchaser, and, except as otherwise provided herein,
neither party shall have any further liability to the other hereunder, or (ii) elect
to proceed with the purchase of the LLC Interests subject to such Exceptions
without any adjustment to the Purchase Price. 
If Purchaser fails to give such timely notice of termination, Purchaser
shall proceed with the purchase of the Membership Interests as aforesaid.  Notwithstanding the foregoing, the LLC shall
pay off and discharge all mortgages and deeds of trust affecting the Property
as of the Closing Date out of the sale proceeds.

 

17

 

ARTICLE 6

 

CASUALTY AND CONDEMNATION

 

6.1                                 Casualty.  (a) In the event of any fire or other
casualty damage to the Property or any part thereof, then, at either party’s
option, by written notice to the other party within ten (10) business days
in the case of a termination by the Whitehall Seller and/or the GMH Sellers,
after the LLC becomes aware of such damage or, in the case of a termination by
Purchaser, after Purchaser receives notice of such damage from Seller, either
may terminate this Agreement, in which event the Deposit shall be refunded to
Purchaser, this Agreement shall be terminated, and the parties shall have no
further obligations to each other.  If
neither party terminates this Agreement as aforesaid, Purchaser shall have the
right, upon the occurrence of such event, at its sole option, to elect to
consummate the sale without a reduction of the Purchase Price on account of the
same, except that Purchaser shall receive a credit against the Purchase Price
for the amount of any deductible applicable under the Partnership’s insurance
policy.  Notwithstanding the foregoing,
Purchaser shall, however, be obligated to close hereunder if the cost to repair
such damage shall be less than One Million Dollars ($1,000,000.00) and such
damage is fully covered by insurance or the LLC agrees in writing to provide a
credit to Purchaser against the Purchase Price in an amount equal to the lesser
of (i) the actual costs to repair such damage less the sum of (A) the
amount of any insurance proceeds available to Purchaser plus (B) the
amount of the deductible under the Partnership’s insurance policy or (ii) the
sum of One Million Dollars ($1,000,000) less the sum of (A) the amount of
any insurance proceeds available to Purchaser plus (B) the amount of the
deductible under the Partnership’s insurance policy.

 

(b)                                 If,
prior to the Closing, any portion of the Property shall be taken for any public
use (other than minor takings for street widening) or access to or from the Property
shall

 

18

 

be permanently taken or materially impaired,
or any change(s) to public way(s) or the grade(s) thereof shall be made which
materially affects or are likely to materially affect the value of the
Property, or notice of any of the foregoing shall be made public or otherwise
come to Purchaser’s attention (unless such action is terminated on or prior to
the Closing), then, and in any of such events, by written notice to the
Whitehall Sellers and the GMH Sellers within ten (10) business days after
Purchaser receives notice of such events from the Partnership, Purchaser
may either (i) terminate this Agreement, in which event the Deposit shall
be refunded to Purchaser, and the parties shall have no further liability or
responsibility to each other, or (ii) elect to consummate the sale without
a reduction of the Purchase Price on account of the same.  The GMH Sellers shall promptly notify
Purchaser if and when the LLC becomes aware of any such notice or threat of
taking.

 

(c)                                  In
the event that either party shall have the right to terminate this Agreement
pursuant to this Article 6.1 and each party waives such right to
terminate, then the Closing shall occur on the later of the (i) day the
Closing would have occurred but for the casualty, taking or other event
described above or (ii) date that is ten (10) business days after the
expiration or waiver of the permitted ten (10) day period referred to
above.

 

ARTICLE 7

 

WARRANTIES, REPRESENTATIONS AND COVENANTS

 

7.1                                 Warranties
and Representations of Purchaser. 
The Purchaser warrants and represents to the Whitehall Sellers and the
GMH Sellers as follows, which representations and warranties shall be deemed to
be repeated by Purchaser, and shall be true and correct, as of the Closing Date
and shall survive the Closing for a period of one (1) year:

 

19

 

(a)                                  Purchaser
is a limited liability company duly organized and validly existing under the
laws of the State of Delaware. The execution, delivery and performance by
Purchaser of the terms of this Agreement has been duly authorized by all
necessary parties and does not conflict with any agreement to which Purchaser
is bound or is a party or require the consent of any party.

 

(b)                                 This
Agreement is the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, subject only to bankruptcy and
creditor’s rights laws, matters affecting creditors of Purchaser generally and
general equitable principles (whether asserted in an action at law or equity).

 

(c)                                  Purchaser
is familiar with the source of funds for the Purchase Price of the Property and
represents that all
such funds derived from legitimate business activities within the United States
of America and/or from loans from a banking or financial institution chartered
or organized within the United States of America.

 

(d)                                 None
of Purchaser, the Purchaser Parties, or any Affiliate of Purchaser is subject
to sanctions of the United States government or in violation of any federal,
state, municipal or local laws, statutes, codes, ordinances, orders, decrees, rules or
regulations (“Laws”) relating to terrorism or money laundering, including,
without limitation, Executive Order No. 13224, 66 Fed.
Reg. 49079 (published September 25, 2001) (the “Terrorism Executive
Order”) or a Person (as hereinafter defined) similarly designated under any
related enabling legislation or any other similar Executive Orders
(collectively with the Terrorism Executive Order, the “Executive Orders”), the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot
Act”), any sanctions and regulations promulgated under authority granted by the

 

20

 

Trading with the Enemy Act, 50 U.S.C. App. 1-44, as amended from time
to time, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06,
as amended from time to time, the Iraqi Sanctions Act, Publ. L. No. 101-513;
United Nations Participation Act, 22 U.S.C. § 287c, as amended from time
to time, the International Security and Development Cooperation Act, 22 U.S.C. § 2349
aa-9, as amended from time to time, The Cuban Democracy Act, 22 U.S.C. §§ 6001-10,
as amended from time to time, The Cuban Liberty and Democratic Solidarity Act,
18 U.S.C. §§ 2332d and 2339b, as amended from time to time, and The
Foreign Narcotics Kingpin Designation Act, Publ. L. No. 106-120, as amended
from time to time.

 

(e)                                  None
of the Purchaser, the Purchaser Parties or any Affiliate of Purchaser is (i) listed
on the Specially Designated Nationals and Blocked Persons List (the “SDN List”)
maintained by the Office of Foreign Assets Control (“OFAC”), Department of the
Treasury, and/or on any other similar list (“Other Lists” and, collectively
with the SDN List, the “Lists”) maintained by the OFAC pursuant to any
authorizing statute, Executive Order or regulation (collectively, “OFAC Laws
and Regulations”); or (ii) a Person (a “Designated Person”) either (A) included
within the term “designated national” as defined in the Cuban Assets Control
Regulations, 31 C.F.R. Part 515, or (B) designated under
Sections 1(a), 1(b), 1(c) or 1(d) of the Terrorism Executive
Order or a Person similarly designated under any related enabling legislation
or any other similar Executive Orders (collectively, the “Executive Orders”),
including a “Prohibited Person”.  The
OFAC Laws and Regulations and the Executive Orders are collectively referred to
as the “Anti-Terrorism Laws”.  “Prohibited Person” is defined as follows:

 

(A)                              a
person or entity that is listed in the Annex to the Terrorism Executive Order,
or is otherwise subject to the provisions of the Terrorism Executive Order or
any other Executive Order;

 

21

 

(B)                                a person or entity owned or controlled by, or acting for or
on behalf of, any person or entity that is listed in the Annex to the Terrorism
Executive Order, or is otherwise subject to the provisions of the Terrorism
Executive Order or any other Executive Order;

 

(C)                                a
person or entity with whom Seller is prohibited from dealing or otherwise
engaging in any transaction by any terrorism or anti-money laundering Law, including
the Terrorism Executive Order, any other Executive Order and the Patriot Act;

 

(D)                               a
person or entity who commits, threatens or conspires to commit or supports “terrorism”
as defined in the Terrorism Executive Order or any other Executive Order; or

 

(E)                                 a
person or entity that is named as a “specially designated national and blocked
person” on the most current list published by the U.S. Treasury Department
Office of Foreign Asset Control at its official website, http://www.treas.gov/ofac/tllsdn.pdf or
any replacement website or other replacement official publication of such list.

 

(f)                                    Purchaser has required and shall require, and has taken and shall take all reasonable
measures to ensure compliance with the requirement that no Purchaser Parties or
Affiliates of Purchaser is or shall, be listed on any Lists be a Designated
Person, or be in violation of any Laws, including any OFAC Laws and
Regulations.

 

(g)                                 None
of Purchaser, the Purchaser Parties or any Affiliate of Purchaser is or will (i) conduct
any business or engage in making or receiving any contribution of funds, goods
or services to or for the benefit of any Designated Person, (ii) deal in,
or

 

22

 

otherwise engage in, any transaction relating to any property or
interest in property blocked pursuant to any Executive Order or the Patriot
Act, or (iii) engage in or conspire to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Executive Order or the
Patriot Act.

 

(h)                                 Items
(c) through (g) shall not apply to Purchaser Parties to the extent
that such Purchaser Parties’ interest in Purchaser is through a U.S. Publicly-Traded
or Pension Entity.  “U.S. Publicly-Traded
or Pension Entity” means either (A) a
Person (other than an individual) whose securities are listed on a national
securities exchange, or quoted on an automated quotation system, in the United
States, or a wholly-owned subsidiary of such a Person, or (B) an “employee
pension benefit plan” or “pension plan” as defined in Section 3(2) of
ERISA.  As used herein, “Person” means
any individual, partnership, corporation, limited liability
company, trust or other legal entity. 
As used herein, “Affiliate” means with respect to any Person (i) any
other Person that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts in
any such capacity or any entity in which such Person, acting individually or
though any entity, is a member, partner or other principal.

 

7.2                                 Warranties
and Representations of Seller.  (A) Each
of the Whitehall Sellers and the GMH Sellers hereby represent and warrant, on a several and not joint and several basis, to Purchaser
as follows as of the Effective Date:

 

23

 

(i)                                     Each
such entity is duly formed or incorporated and validly existing in the state of
its formation or incorporation.

 

(ii)                                  The
execution, delivery and performance by each such entity of the terms of this
Agreement has been duly authorized by all necessary action and does not
conflict with any agreement to which each such entity is bound or is a party or
require the consent of any party.

 

(iii)                               This
Agreement is the legal, valid and binding obligation of each such entity,
enforceable against each such entity in accordance with its terms, subject only
to bankruptcy and creditor’s rights laws, matters affecting creditors of each
such entity generally and general equitable principles (whether asserted in an
action at law or equity).

 

(iv)                              Each
such entity has not assigned, pledged or encumbered any of its respective
Membership Interest and owns its respective Membership Interest free and clear
of any and all liens, claims, pledges and encumbrances.

 

Each of the Whitehall Sellers, severally and
not jointly and severally, hereby represents and warrants to Purchaser that, to
the best of its knowledge, it has not received any written notice of any fact
or circumstance which would cause the representations and warranties of the GMH
Sellers as set forth in subparagraph (B) to be misleading or untrue.  For the purposes of this Section 7.2(A),
“to the best of its knowledge” means the actual, conscious (and not
constructive) knowledge on the Effective Date of Thomas Ferguson, without
investigation or inquiry.

 

(B)                                The
GMH Sellers hereby represent and warrant to Purchaser as follows as of the
Effective Date, which representations and warranties shall be deemed to be
repeated by the GMH Sellers, and shall be true and correct, as of the Closing
Date:

 

24

 

(i)                                     To
Seller’s Knowledge, there is no pending condemnation or similar proceeding or
special assessment affecting the Property, or any part thereof, nor, to Seller’s
Knowledge, has Seller received written notice that any such proceeding or
assessment is contemplated by any Governmental Authority.

 

(ii)                                  To
Seller’s Knowledge, Seller has not received any written notice or communication
from any Governmental Authority that the Property violates any applicable law,
statute, ordinance, code, regulation or rule.

 

(iii)                               To
Seller’s Knowledge, Seller is not a party to any litigation and has not
received written notice of any proceedings, claims or lawsuits, which if
adversely determined against Seller would have an adverse effect on the
Property or on Seller’s ability to consummate the transaction contemplated
hereunder.

 

As used in this Section 7.2 (B), “Seller’s Knowledge” shall mean
the actual, conscious (and not implied or constructive) knowledge, on the
Effective Date and on the Closing Date, as applicable, of Miles Orth, without
investigation or inquiry.

 

(C)                                Notwithstanding
any provision to the contrary herein or in any Closing Document, (i) Purchaser
shall not be entitled to file any Claims (as hereinafter defined) against any
of the Whitehall Sellers or the GMH Sellers unless the total of such Claims, in
the aggregate, exceeds Fifty Thousand Dollars ($50,000) and (ii) the total
liability of all the Whitehall Sellers and the GMH Sellers for any or all
Claims (as hereinafter defined) hereunder or under any Closing Document shall
not exceed Five Hundred Thousand Dollars ($500,000).  As used herein, “Claims” means any suits,
actions, proceedings, investigations, demands, claims, liabilities, fines,
penalties, liens, judgments, losses, injuries, damages, expenses or costs,
including, without limitation, reasonable attorneys’ and experts’ fees and
costs of investigation actually incurred or

 

25

 

paid.  Except as otherwise specifically set forth in
this Agreement, the representations and warranties of the Whitehall Sellers and
the GMH Sellers contained herein or in any Closing Document shall survive only
until the one hundred twentieth (120th) day following the Closing Date (the “Representation
Expiration Date”).  Any Claim that
Purchaser may have at any time against the Whitehall Sellers and the GMH
Sellers for a breach of any representation or warranty, with respect to which a
written notice of such Claim (a “Claim Notice”) has not been delivered to the
Whitehall Sellers and the GMH Sellers on or prior to the Representation
Expiration Date shall not be valid or effective.  For the avoidance of doubt, on the
Representation Expiration Date, the Whitehall Sellers and the GMH Sellers,
their partners and agents shall be fully discharged and released (without the
need for separate releases or other documentation) from any liability or
obligation to Purchaser with respect to any Claims or any matter relating to
this Agreement, any Closing Document or the Property, except solely for those
matters that are then the subject of a pending Claim Notice delivered by
Purchaser to the appropriate Whitehall Seller or GMH Seller.  Any Claim that Purchaser may have at any time
against any Whitehall Seller or GMH Seller for a breach of any representation
or warranty, whether known or unknown, with respect to which a Claim Notice has
been delivered to the appropriate Whitehall Seller or GMH Seller on or prior to
the Representation Expiration Date may be the subject of subsequent litigation
brought by Purchaser against the appropriate Whitehall Seller or GMH Seller, provided that such litigation is commenced
against the appropriate Whitehall Seller or GMH Seller on or prior to the
sixtieth (60th) calendar day following the Representation Expiration Date.

 

(D)                               If
Purchaser has actual knowledge of (i) a default in any of the covenants,
agreements or obligations to be performed by any of the Whitehall Sellers or
GMH Sellers under

 

26

 

this Agreement or under any Closing Document
and/or (ii) any breach of or inaccuracy in any representation or warranty
of any of the Whitehall Sellers or GMH Sellers made in this Agreement,
Purchaser shall notify the appropriate Whitehall Seller or GMH Seller of same
in writing, in which case Seller shall have an opportunity to cure same (and, if
necessary, extend Closing for a period not to exceed thirty (30) days to cure
same).  If Purchaser, with actual
knowledge of (i) a default in any of the covenants, agreements or
obligations to be performed by any of the Whitehall Sellers or GMH Sellers under
this Agreement or under any Closing Document and/or (ii) any breach of or
inaccuracy in any representation or warranty of any of the Whitehall Sellers or
GMH Sellers made in this Agreement, nonetheless elects to proceed to Closing,
then, upon the consummation of Closing, Purchaser shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no Claim
against any of the Whitehall Sellers or GMH Sellers with respect thereto.

 

(E)                                 This
Section 7.2 shall survive the Closing.

 

7.3                                 Covenants
of the LLC and GMH Sellers.

 

(a)                                  Until
Closing, GMH Sellers on behalf of the LLC shall enter into only those third
party contracts which are necessary to maintain the Property in a manner
consistent with the past practices and current operation of the Property.  If GMH Sellers enter into any such contract,
the GMH Sellers shall promptly give written notice thereof to Purchaser and
unless Purchaser, within seven (7) days thereafter, notifies Seller in
writing of its intention to assume such contract, the GMH Sellers shall cause
such contract to be terminated prior to Closing.

 

(b)                                 The
GMH Sellers agree, until Closing, to cause the property manager to continue its
rental program in a manner consistent with the past practices and current
operation of the Property. Notwithstanding the foregoing, the LLC or the GMH
Sellers shall not (i) enter

 

27

 

into, alter, amend or otherwise modify or
supplement any Lease, without the prior written consent of Purchaser, except
that the LLC may enter into, modify or terminate residential leases in the
ordinary course of business, for terms of not more than one year and at market
rent rates, (ii) grant any bonus, free month’s rental, rebate or other
concession to any present or future tenant of the Property, unless the same is
fully applied prior to the Closing or is otherwise acceptable to Purchaser, (iii) cause
the termination of any Lease without the prior written consent of Purchaser,
unless the tenant is in default thereunder, and (iv) apply any security
deposits or other deposits to amounts owing with respect to any tenants in
possession on the Closing Date unless such tenants are delinquent in the
payment of rent or otherwise in default under their Leases in which event
Seller shall request that such tenant replenish such security deposit if
required under the applicable lease.

 

(c)                                  Until
Closing, the LLC shall cause all existing insurance covering the Property to be
maintained in full force and effect, and without material
changes thereto.

 

(d)                                 Until
Closing, the LLC shall cause the Property to be operated and maintained and
repaired in a manner consistent with past practices and its current operation
and in accordance with good business practices, such that the Property can be
delivered to Purchaser at Closing in their present condition, normal wear and
tear excepted.

 

ARTICLE 8

 

DEFAULT

 

8.1                                 Default by Purchaser.  The parties agree that
if Purchaser defaults in the performance of the terms of this Agreement by
failing to purchase the Property as required to do so, then either the
Whitehall Sellers or the GMH Sellers shall have the right to retain the Deposit
as liquidated damages, and not as a penalty, without the necessity of proving
actual damages,

 

28

 

which Deposit
shall be allocated amongst the Whitehall Sellers and the GMH Sellers in
accordance with their Percentage Interests. The Purchaser hereby waives any
right to challenge the enforceability of this clause or its reasonability, and
Purchaser hereby waives any and all rights it may have at law or equity to
dispute the right of the Whitehall Sellers and the GMH Sellers to retain the
liquidated damages provided for herein other than on the basis that no default
had occurred and thus the Whitehall Sellers and the GMH Sellers were not
entitled to any damages whatsoever.

 

8.2                                 Default by Seller.  In the event the purchase and sale hereunder
is not closed by reason of a default by any of the Whitehall Sellers or the GMH
Sellers hereunder in failing or refusing to sell the Membership Interests to
Purchaser as provided in this Agreement, Purchaser shall be entitled to (i) seek
specific performance of this Agreement against the defaulting Seller only by
filing an action for specific performance within 60 days of the breach thereof,
or (ii) terminate this Agreement, in which event the Deposit shall be
refunded to Purchaser, and this Agreement shall terminate and be null and void
and of no further force and affect. 
Purchaser hereby waives any right to receive any damages or pursue any
and all rights or remedies not specifically provided for herein against Seller.

 

ARTICLE 9

 

ESCROW AGENT

 

9.1                                 Deposit in Escrow.  The Deposit shall be held by the Escrow
Agent, in trust, on the terms set forth in this Agreement.

 

9.2                                 Disputes.  In the event of litigation between Seller and
Purchaser, the Escrow Agent may deliver the monies held in the escrow to the
Clerk of the Court in which such litigation is pending, or the Escrow Agent
shall take such affirmative steps as the Escrow Agent

 

29

 

may, at the Escrow Agent’s option elect in
order to terminate the Escrow Agent’s duties including, but not limited to,
depositing the monies held in the escrow in any court which Escrow Agent shall
select in the Commonwealth of Pennsylvania, and may institute an action for
interpleader, the costs thereof to be borne by whichever of Seller, in
accordance with each of their Percentage Interests, or Purchaser is the losing
party.

 

9.3                                 Release
and Indemnity.

 

(a)                                  It
is agreed that the duties of the Escrow Agent are only as herein specifically
provided and are purely ministerial in nature, and that the Escrow Agent shall
incur no liability whatever except for willful misconduct or gross negligence
of Escrow Agent. The Seller and Purchaser each release the Escrow Agent from
any act done or omitted to be done by the Escrow Agent in good faith in the
performance of its duties hereunder.

 

(b)                                 Seller
and Purchaser shall jointly and severally hold Escrow Agent harmless from and
against any loss, damage, liability or expense incurred by Escrow Agent not
caused by its willful misconduct or gross negligence, arising out of or in
connection with its entering into this Agreement and the carrying out of its
duties hereunder, including the reasonable costs and expenses of defending
itself against any claim of liability or participating in any legal proceeding.
Escrow Agent may consult with counsel of its choice and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1                           Entire
Agreement.  This Agreement contains
the entire understanding of the parties hereto with respect to the subject
matter hereof, and no prior or other writing or oral

 

30

 

agreement or
undertaking pertaining to any such matter shall be effective for any purpose.
This Agreement may not be changed or modified, nor any provision hereof waived,
except in writing by the party to be charged thereby.

 

10.2                           Broker
or Consultant.  Purchaser and Seller
represent and warrant to each other that neither has dealt with any broker or
consultant in connection with this Agreement. Seller and Purchaser each agree
to hold the other harmless and to indemnify the other against any claims of, or
liabilities to, any broker or other person based upon dealings or alleged
dealings which are inconsistent with the foregoing representation.  The obligations of Purchaser and Seller under
this paragraph shall survive whether or not title closes hereunder and
notwithstanding any release of either party pursuant to any other provisions of
this Agreement.

 

10.3                           Notices.  All notices, requests, consents and other
communications hereunder shall be in writing and shall be personally delivered
or mailed by first class registered or certified mail, return receipt
requested, postage prepaid, by telecopy (with confirmation of receipt), or sent
by private overnight express delivery, addressed as follows:

 

	
  If to the Whitehall Sellers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Goldman Sachs & Co.

  
	
   

  	
   

  	
  100 Crescent Court

  
	
   

  	
   

  	
  Suite 1000

  
	
   

  	
   

  	
  Dallas, Texas 75201

  
	
   

  	
   

  	
  Attention: Mr. Thomas Ferguson

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Arent Fox PLLC

  
	
   

  	
   

  	
  1050 Connecticut Avenue, N.W.

  
	
   

  	
   

  	
  Washington, DC 20036

  
	
   

  	
   

  	
  Attention: Mark Katz, Esquire

  
	
   

  	
   

  	
   

  
	
  If to GMH Sellers:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GMH Communities, LP

  
	
   

  	
   

  	
  10 Campus Boulevard

  
	
   

  	
   

  	
  Newtown Square, Pennsylvania 19073

  
	
   

  	
   

  	
  Attention: Mr. Joseph M. Macchione

  

 

31

 

	
  If to Purchaser:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State College Intermediate, LLC

  
	
   

  	
   

  	
  GMH Communities, LP

  
	
   

  	
   

  	
  10 Campus Boulevard

  
	
   

  	
   

  	
  Newtown Square, Pennsylvania 19073

  
	
   

  	
   

  	
  Attention: Mr. Joseph M. Macchione

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Reed Smith LLP

  
	
   

  	
   

  	
  2500 One Liberty Place

  
	
   

  	
   

  	
  1650 Market Street

  
	
   

  	
   

  	
  Philadelphia, PA 19103

  
	
   

  	
   

  	
  Attention: James F. Mogan, III,
  Esquire

  

 

or to such other
address as the respective party may direct by notice to the other party. Any such
notice, request, consent or other communication shall be deemed delivered at
such time as it is personally delivered on a business day, on the day it is so
deposited in the U. S. Mail, on the business day it is delivered by telecopy
and the delivering party shall have confirmed receipt of the same by telephone,
or on the first business day following its delivery to a private overnight
express delivery service, prepaid for next business day delivery, as the case
may be.

 

10.4                           Governing
Law.  This Agreement shall be
governed by and construed under the laws of the Commonwealth of Pennsylvania.

 

10.5                           Interpretation.
 This Agreement shall be construed
reasonably to carry out its intent without presumptions against or in favor of
either party. If any provision hereof shall be declared invalid by a court or
in any administrative proceedings, then the provisions of this Agreement shall
be construed in such manner so as to preserve the validity hereof and the
substance of the transaction herein contemplated to the extent possible. The
paragraph and/or

 

32

 

section headings
and the arrangement of this Agreement is for the convenience of the parties
hereto and do not in any way affect, limit, amplify or modify the terms and
provisions hereof.

 

10.6                           Singular,
Plural, Etc.  Wherever herein the
singular number is used the same shall include the plural and the masculine
gender shall include the feminine and neuter genders and vice versa, as the
context shall require.

 

10.7                           Counterparts.  This Agreement may be executed in several
counterparts, which shall constitute one and the same instrument.

 

10.8                           Intentionally
Omitted.

 

10.9                           Further
Assurances.  Seller and Purchaser
each agree to execute any and all documents necessary to effectuate the
purposes of this Agreement, provided, however, that any such instruments,
documents and materials are not inconsistent with the terms of this Agreement,
do not create any liability on the part of Seller and Purchaser that was not
contemplated by this Agreement or expand any liability that was contemplated
and do not contain any representation, warranty, indemnity or covenant that
Seller or Purchaser is not required to make under the terms of this Agreement.

 

10.10                     Recording.  Neither this Agreement nor any memorandum
hereof may be recorded, except in connection with a permitted action by
Purchaser for specific performance, without the express written consent of both
parties, and any party recording this Agreement without first having obtained any
necessary consent shall be in material breach hereof.

 

10.11                     Assignment;
Successor and Assigns.  Purchaser may
not assign this Agreement or its rights hereunder without the express written
consent of each of the GMH Sellers and Whitehall Sellers, which consent may be
withheld, conditioned or delayed in the sole and absolute discretion of each of
the Sellers; provided, however, that Purchaser may assign each of

 

33

 

its rights under
this Agreement on or prior to the Closing to an entity controlled by or under
common control with, or an affiliate of, GMH Communities, LP, without any
consent from any Seller. This Agreement shall inure to the benefit of and be binding upon Seller and Purchaser and their respective
heirs, personal representatives, successors and permitted assigns.

 

10.12                     Time.  Unless otherwise specified to the contrary in
this Agreement, TIME IS OF THE ESSENCE WITH RESPECT TO ALL TIME PERIODS IN THIS
AGREEMENT. In the event that the date upon which any time period ends or any
duty or obligation hereunder is to be performed shall occur upon a Saturday,
Sunday or national banking holiday, then, in such event, the time period or the
due date for such performance shall be automatically extended to the next
succeeding day which is not a Saturday, Sunday or national banking holiday.

 

10.13                     Confidential
Information.  Purchaser acknowledges
that the transaction contemplated herein is of a confidential nature and shall
not be disclosed except (a) to Purchaser’s consultants, investors,
lenders, appraisers, attorneys, accountants, advisors, Purchaser Parties, and
Purchaser’s associated companies or affiliates, (b) as required by any
applicable statute, law or regulation, or (c) in accordance with any
litigation that may arise between the parties in connection with the
transaction contemplated by this Agreement. 
Purchaser agrees to treat any information provided by Seller, or its
agents, or relating to Seller or the LLC or the Property as confidential,
preserve the confidentiality thereof, and not disclose to any parties except
the persons or entities set forth above or duplicate or use such information
except as provided above in connection with the transaction contemplated
hereby.  Purchaser and Seller agree that
confidentiality obligations set forth herein shall not apply to information
which (a) is or becomes generally available to the public, (b) was in
Purchaser’s possession prior to its disclosure to Purchaser by Seller, Seller
Parties, or Seller’s agents or the Partnership, or (c) is or

 

34

 

 

becomes available
to Purchaser from a source other than Seller, Seller Parties, or Seller’s
agents or the Partnership.  In the event
of the termination of this Agreement for any reason whatsoever, Purchaser will
return to Seller and/or the LLC all documents, work papers, and other written
material (including all copies thereof) obtained from Seller, or its agents, or
the LLC in connection with the transaction contemplated hereby, and Purchaser
shall instruct its employees and others who have had access to such
information, to keep confidential and not to use any such information. The
provisions of this Section shall survive the Closing or, if the purchase
and sale is not consummated, any termination of this Agreement.  Any press release or other public disclosure
regarding this Agreement or the transactions contemplated herein, and the
wording of same, must be approved in advance by both parties.

 

10.14                     Several
Covenants, Obligations, Representations and Warranties.  Notwithstanding any other term of this Agreement,
all covenants, obligations, representations and warranties of Seller in this
Agreement, or of the GMH Sellers and the Whitehall Sellers under this
Agreement, shall be made by such entities on a several, and not joint and
several, basis.

 

10.15                     Tax
Treatment.  The parties hereto agree
that Purchaser is purchasing membership interests for the consideration
specified herein.  Furthermore, each
party hereto hereby agrees for federal income tax purposes to treat the
transactions contemplated by this Agreement as a sale of membership
interests.  In particular, the parties
agree that the Whitehall Sellers and such of the GMH Sellers that are being
paid cash shall be treated for federal income tax purposes as selling their
respective membership interests (or, in the case of a GMH Seller that is being
paid both cash and operating units in GMH Communities, LP, the proportionate
share of such Seller’s membership interest attributable to such cash) to GMH
Communities, LP for the amount of cash

 

35

 

specified in Section 2.1
of this Agreement.  This provision is
intended to comply with the requirements of Treasury Regulation section 1.708-1(c)(4), with GMH Communities, LP as the surviving partnership,
and shall be interpreted consistently therewith.

 

 

[Remainder of page intentionally blank; next page is
signature page]

 

36

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above written.

 

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  WHITEHALL V-S REAL ESTATE LIMITED PARTNERSHIP,
  a Delaware limited partnership 

  
	
  Execution
  Date:

  	
  By:

  	
    WH
  V-S Advisors, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
  March 22,
  2005

  	
   

  	
  By:

  	
    /s/ Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
    Name: Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
    Title:   Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BRIDGE STREET REAL ESTATE FUND 1996, L.P.,
  a Delaware limited partnership 

  
	
  Execution
  Date:

  	
  By:

  	
    Stone
  Street 1996 Realty, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
  March 22,
  2005

  	
   

  	
  By:

  	
    /s/ Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
    Name: Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
    Title:   Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STONE STREET GMH-S CORP.,
  a Delaware corporation

  
	
  Execution
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  March 22,
  2005

  	
   

  	
  By:

  	
    /s/ Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STONE STREET REAL ESTATE FUND 1996, L.P.,
  a Delaware limited partnership 

  
	
  Execution
  Date:

  	
  By:

  	
    Stone
  Street 1996 Realty, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
  March 22,
  2005

  	
   

  	
  By:

  	
    /s/ Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
   

  	
    Name: Thomas D. Ferguson

  	
   

  
	
   

  	
   

  	
   

  	
    Title:   Vice
  President

  	
   

  

 

37

 

	
   

  	
  GH COLLEGE PARK, INC.,
  a Pennsylvania corporation

  
	
  Execution Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  March 22, 2005

  	
   

  	
  By:

  	
  /s/ Gary M.
  Holloway, Sr.

  	
   

  
					

 

38

	
  Gary M. Holloway

  	
   

  	
   

  	
  /s/ Gary M.
  Holloway, Sr.

  	
   

  
	
  Name: Gary M. Holloway

  	
   

  	
   

  	
  GARY M. HOLLOWAY, SR.

  	
   

  

 

39

 

	
  Bruce F.
  Robinson

  	
   

  	
   

  	
  /s/ Bruce F.
  Robinson

  	
   

  
	
  Name: Bruce F. Robinson

  	
   

  	
   

  	
  BRUCE F. ROBINSON

  	
   

  

 

40

 

	
  Frank Tropea

  	
   

  	
   

  	
  /s/ Frank
  Tropea

  	
   

  
	
  Name: Frank
  Tropea

  	
   

  	
   

  	
  FRANK TROPEA

  	
   

  

 

41

 

	
  Joseph M.
  Coyle

  	
   

  	
   

  	
  /s/ Joseph
  M. Coyle

  	
   

  
	
  Name: Joseph M. Coyle

  	
   

  	
   

  	
  JOSEPH M. COYLE

  	
   

  

 

42

 

	
  Michael
  Mayock

  	
   

  	
   

  	
  /s/ Michael
  Mayock

  	
   

  
	
  Name: Michael
  Mayock

  	
   

  	
   

  	
  MICHAEL MAYOCK

  	
   

  

 

43

 

	
  Louis
  Battagliese

  	
   

  	
   

  	
  /s/ Louis
  Battagliese

  	
   

  
	
  Name: Louis Battagliese

  	
   

  	
   

  	
  LOUIS BATTAGLIESE

  	
   

  

 

44

 

	
  Cathy Coyle

  	
   

  	
   

  	
  /s/ Cathy
  Coyle

  	
   

  
	
  Name: Cathy Coyle

  	
   

  	
   

  	
  CATHY COYLE

  	
   

  

 

45

 

	
  Robert
  DiGiuseppe

  	
   

  	
   

  	
  /s/ Robert
  DiGiuseppe

  	
   

  
	
  Name: Robert DiGiuseppe

  	
   

  	
   

  	
  ROBERT DIGIUSEPPE

  	
   

  

 

46

 

	
  Denise
  Hubley

  	
   

  	
   

  	
  /s/ Denise
  Hubley

  	
   

  
	
  Name: Denise
  Hubley

  	
   

  	
   

  	
  DENISE HUBLEY

  	
   

  

 

47

 

	
  David
  Forrest

  	
   

  	
   

  	
  /s/ David
  Forrest

  	
   

  
	
  Name: David Forrest

  	
   

  	
   

  	
  DAVID FORREST

  	
   

  

 

48

 

	
  Michael
  Maher

  	
   

  	
   

  	
  /s/ Michael
  Maher

  	
   

  
	
  Name: Michael Maher

  	
   

  	
   

  	
  MICHAEL MAHER

  	
   

  

 

49

 

	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  STATE COLLEGE INTERMEDIATE, LLC,
  a Delaware limited liability company 

  
	
  Execution Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  March 22,
  2005

  	
   

  	
  By:

  	
  /s/ Joseph
  M. Macchione

  	
   

  
	
   

  	
   

  	
  Name: Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Title: Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
  GMH COMMUNITIES, LP,
  a Delaware limited partnership

  
	
   

  	
   

  
	
  Execution Date:

  	
  By:

  	
  GMH Communities GP Trust, its general
  partner

  
	
   

  	
   

  	
   

  
	
  March 22,
  2005

  	
   

  	
  By:

  	
  /s/ Joseph
  M. Macchione

  	
   

  
	
   

  	
   

  	
  Name: Joseph M. Macchione

  	
   

  
	
   

  	
   

  	
  Title: Secretary

  

 

50

 

EXHIBIT A

 

Land

 

 

EXHIBIT B

 

Form of Assignment and Assumption of
Membership Interests

 

ASSIGNMENT
AND ASSUMPTION OF MEMBERSHIP INTERESTS

 

THIS
ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTERESTS (the
“Assignment and Assumption”) is made and entered into as of                                 ,
2005 (the “Assignment Date”) by and among                        ,
a                                                       ,
                                ,
a                                                     ,
and                                 ,
a                                                       
(collectively, “Assignor”), and                                 ,
a                                 
(“Assignee”).

 

FOR
VALUE RECEIVED, Assignor hereby grants, conveys,
sells, assigns, releases and transfer to Assignee all of Assignor’s right,
title and interest as a partner of W9/JP-M Real Estate Limited Partnership, a
Delaware limited partnership (the “LLC”), together with all of Assignor’s
right, title and interest in, to and under that certain Limited Liability
Company Agreement dated as of December 19, 1995 (the “LLC Agreement,”
and Assignor’s rights and obligations under the LLC Agreement, and Assignor’s
entire interest in the LLC including, without limitation, the right to receive
distributions, the “Membership Interest”).

 

TO
HAVE AND TO HOLD the same unto Assignee, its legal
representatives, heirs, successors and assigns forever, subject, however, to
the terms, covenants, conditions and provisions contained in the LLC Agreement.

 

Assignee
hereby assumes the Membership Interest from and after the Assignment Date and
agrees, for the benefit of Assignor and other party(ies)
to the LLC Agreement, to perform and discharge all obligations and duties of
Assignor under the LLC Agreement from and after the Assignment Date.

 

Assignor
represents, warrants and covenants that (i) Assignor is the sole owner of
the Membership Interest and has not previously assigned, pledged, transferred
or encumbered the Membership Interest, and (ii) Assignor has the full
authority and right to sell, transfer and assign the Membership Interest to
Assignee.

 

 

IN
WITNESS WHEREOF, Assignor and Assignee have executed
this Assignment and Assumption as of the Assignment Date.

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule 1

 

1.                                       Bankruptcy/Default/Workout History – A
detailed narrative of any bankruptcy filings, foreclosure proceedings or
significant loan modifications involving Seller.  If no such events have occurred, please
provide a statement to that effect.

 

2.                                       Financial Information – Current, audited
(if available) financial statements for the Partnership.

 

3.                                       Property Level Information – Originals or
legible copies of the following property level information:

 

a.                                       A
current title report for each parcel comprising the Property issued by a
national title insurance company, together with complete legible copies of all
documents reference therein.

b.                                      ALTA
as-built surveys and legal descriptions of each parcel comprising the Property
in insurable form.

c.                                       Real
estate tax bills for each parcel comprising the Property for the three most
recently ended tax years and, the extent available, for the current tax
year.  Also, the most recent tax
assessment for each parcel comprising the Property, any current or threatened
betterment assessments, and complete files on any pending tax appeal
proceedings.

d.                                      A
detailed listing of all capital expenditures on the Property made during the
last three years.

e.                                       All
existing and proposed leases, lease proposals and standard lease forms.

f.                                         All
service contracts, management agreements, leasing agreements, reciprocal
easement and/or operating agreements, common area maintenance agreements,
option agreements, land purchase agreements and other agreements relating to
the Property, including all amendments thereto.

g.                                      Any
environmental, asbestos, lead paint, engineering and other physical reports of
the Property in the Partnership’s possession or obtainable by the Partnership.

h.                                      Any
appraisals of the Property completed within the past three years.

i.                                          Operating
statements for the Property for the two most recently ended calendar years, and
operating statements for the Property through the most recently ended calendar
month of the current calendar year.  Audited financial statements for the Property (if available) for
the three most recently ended calendar years.

j.                                          Rent-rolls
for the Property for the past three months, identifying any rental concessions
currently in effect.

k.                                       A
schedule of all licenses, permits (including grading, building and other
permits for any work currently in progress), certificates of occupancy, etc.
for the Property currently in effect together with copies thereof and of all
amendments thereto.

 

 

l.                                          Zoning
compliance letters of governmental authorities and/or similar evidence that the
Property are in compliance with zoning, subdivision
and other land use requirements.

m.                                    Utility
bills for the Property for the past twenty-four months, which will be made
available on site.

n.                                      An
inventory of all personal property at the Property.

o.                                      Complete
files and details on any pending or threatened litigation at or affecting the
Property.

p.                                      The
current year’s operating, leasing and capital budget for the Property and a
proposed operating, leasing and capital budget for the first 12 months after
closing.

q.                                      As-built
plans and specifications for the Property together with a full set of soil
reports.

r.                                         An
incident report for the Property for the past twenty-four months.

s.                                       A
description of all loans currently secured by the Property, together with
copies of the loan documents.

t.                                         A
list of names of all architects and engineers and all major subcontractors,
materialmen and suppliers used in construction and development of the Property,
to the best of the Partnership’s capability.

u.                                      Loss
runs for any and all insurance claims for the history of the Property.

 

 

SCHEDULE 2

 

	
  MEMBERS

  	
   

  	
  PERCENTAGE INTERESTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.     WHITEHALL V-S REAL ESTATE LIMITED
  PARTNERSHIP

  	
   

  	
  85.0

  	
  %

  
	
  2.     STONE STREET GMH-S CORP.

  	
   

  	
  0.14739

  	
  %

  
	
  3.     STONE STREET REAL ESTATE FUND 1996, L.P.

  	
   

  	
  2.49746

  	
  %

  
	
  4.     BRIDGE STREET REAL ESTATE FUND 1996, L.P.

  	
   

  	
  2.35515

  	
  %

  
	
  5.     GH COLLEGE PARK, INC.

  	
   

  	
  0.10

  	
  %

  
	
  6.     GARY M. HOLLOWAY, SR.

  	
   

  	
  7.615

  	
  %

  
	
  7.     BRUCE F. ROBINSON

  	
   

  	
  0.58

  	
  %

  
	
  8.     FRANK TROPEA

  	
   

  	
  0.32

  	
  %

  
	
  9.     JOSEPH M. COYLE

  	
   

  	
  0.25

  	
  %

  
	
  10.   MICHAEL MAYOCK

  	
   

  	
  0.20

  	
  %

  
	
  11.   LOUIS BATTAGLIESE

  	
   

  	
  0.20

  	
  %

  
	
  12.   CATHY COYLE

  	
   

  	
  0.58

  	
  %

  
	
  13.   ROBERT DIGIUSEPPE

  	
   

  	
  0.08

  	
  %

  
	
  14.   DENISE HUBLEY

  	
   

  	
  0.033

  	
  %

  
	
  15.   DAVID FORREST

  	
   

  	
  0.03

  	
  %

  
	
  16.   MICHAEL MAHER

  	
   

  	
  0.012

  	
  %

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]