Exhibit 10.7

 

CONTRACT OF SALE

 

This Contract of Sale (this Contract) is between THE ABLON AT FRISCO SQUARE,
LLC, a Delaware limited liability company (Seller), and IRWIN R. ROSE & CO.,
LLC, an Indiana limited liability company and/or its permitted assignee (Buyer),
and is dated effective as of April 10, 2017, which is the date the Closing Agent
acknowledges its receipt of a fully executed copy of this Contract (the
Effective Date).

 

BACKGROUND

 

Buyer wants to purchase, and Seller wants to sell:

 

a.the real property located in Collin County, Texas, more particularly described
on Exhibit A attached to this Contract (the Real Property), and all rights and
appurtenances pertaining to the Real Property, including any interest of Seller
in adjacent streets, alleys, easements, and rights-of-way, but excluding any
interest in the minerals severed by prior conveyance;

 

b.all improvements and fixtures located on the Real Property, which include the
apartment project commonly known as The Ablon at Frisco Square (collectively,
the Improvements);

 

c.all of Seller’s rights and interests in the leases affecting the Real Property
(Leases) and, to the extent assignable by Seller and to the extent Buyer elects
or is required herein to assume, the service agreements in effect with respect
to the Real Property or Improvements (the Service Contracts);

 

d.the tangible personal property owned by Seller and either located at or used
exclusively in connection with the Real Property or Improvements (the Personal
Property);

 

e.all of Seller’s rights and interests in assignable warranties and guaranties
relating to the Improvements (the Warranties); and

 

f.all of Seller’s rights and interests in records of tenants used in the
continuing operation of the Improvements (the Tenant Records).

 

The Real Property, the Improvements, the Leases, the Service Contracts, the
Personal Property, the Warranties and the Tenant Records are collectively called
the Property. For the avoidance of doubt, the definition of Property does not
include, and Seller does not intend to convey to Buyer, any right, title or
interest of Seller in and to the name “Ablon” or “Pegasus” or any trademarks,
logos, trade colors, service marks, or trade names of Seller or such names,
including all combinations and derivations of the names “Ablon” and “Pegasus” or
any signage, branding or other materials associated with same.

 

ARTICLE 1

PURCHASE PRICE AND EARNEST MONEY

 

Section 1.1Agreement to Sell and Purchase.

 

Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Property,
subject to the terms and conditions of this Contract.

 

Section 1.2Purchase Price.

 

The Purchase Price of the Property is $53,500,000.00, payable in immediately
available federal funds at Closing (defined in Section 6.1).

 

Contract of Sale Page 1

 

 

Section 1.3Earnest Money.

 

Within 3 business days after the Effective Date, Buyer shall deposit with
Commonwealth Title (Closing Agent), 8222 Douglas Avenue, Suite 570, Dallas,
Texas 75225, Attention: Stacie Taylor, immediately available federal funds in
the amount of $1,500,000.00 (the Earnest Money). The Earnest Money will be
applied in its entirety to the Purchase Price at Closing. Otherwise, the Earnest
Money will be paid as provided elsewhere in this Contract. Closing Agent shall,
promptly upon receipt, place the Earnest Money in a federally insured, interest
bearing account. All interest on the Earnest Money becomes part of the Earnest
Money. Closing Agent is authorized and directed to pay the Earnest Money to the
party entitled to receive the Earnest Money under the terms of this Contract.

 

ARTICLE 2

TITLE INSURANCE, OTHER INFORMATION, AND SURVEY

 

Section 2.1Title Insurance.

 

Seller shall cause Closing Agent to agree to issue to Buyer as soon as
practicable after Closing, a Texas standard form of Owner Policy of Title
Insurance for the Real Property and Improvements (the Owner Policy), in the
amount of the Purchase Price and insuring fee simple title to the Real Property
as being vested in Buyer. Seller is responsible only for payment of the premium
for the standard form of Owner Policy. Buyer shall pay the premiums charged for
and costs associated with obtaining any endorsements or modifications to the
standard form of Owner Policy and for any loan policy or endorsements required
by Buyer's lender, but Seller is not obligated to cause Closing Agent to issue
any endorsements, extensions or modifications to the Owner Policy or any lender
policy. Upon issuance, the Owner Policy will except to the standard printed
exceptions, conditions and exclusions and to the Permitted Exceptions (defined
in Section 3.1). Buyer acknowledges receipt, prior to the Effective Date, of the
title insurance commitment covering the Real Property issued by Closing Agent
with an effective date of March 6, 2017, under GF Number CW-2246-2246003010-ST
(as updated from time to time, the Commitment), together with copies of all
documents referenced as title exceptions in Schedule B of such commitment
(collectively, the Title Exceptions).

 

Section 2.2Other Information.

 

Buyer acknowledges receipt or acceptable access, prior to the Effective Date, of
all of the records and documents listed on Schedule 1 attached hereto that are
in Seller’s possession or are located at the Real Property and in the possession
of Seller’s property manager (collectively, the Documents). No later than 14
days after the Effective Date, Seller shall obtain and deliver to Buyer an
update of the Survey (defined below) or a new survey of the Real Property and
Improvements (in either case, the Updated Survey) at Seller’s sole cost and
expense. Without limitation on the foregoing, Seller shall make the Leases and
the Tenant Records in Seller's possession available to Buyer for Buyer's
inspection and copying (at Buyer's expense) at the Real Property during normal
business hours upon 48 hours' prior notice of Buyer’s desire to inspect same.

 

ARTICLE 3

TITLE REVIEW AND DUE DILIGENCE

 

Section 3.1Title Review.

 

(a)Buyer has until 5:00 pm (Dallas, Texas time) on the Effective Date or until
10 days after its receipt of the Commitment and Title Exceptions, whichever is
later (the Title Review Period), to give Seller a notice objecting to any
exception or encumbrance contained in the Commitment or shown on the existing
survey referenced on such Schedule 1 (the Survey). If Buyer does not give notice
of any objections to Seller within the Title Review Period, then Buyer is deemed
to approve the title as shown in the Commitment, the title exceptions, and
matters shown on the Survey. If Buyer provides timely objections, then Seller
shall have 7 days after receipt of Buyer's notice (the Title Cure Period) in
which it may attempt or agree to cure Buyer's objections; provided, however,
Seller has no obligation to cure or agree to cure any of Buyer's objections.

 

Contract of Sale Page 2

 

 

(b)If Buyer provides timely objections as contemplated above and Seller does not
cure or agree to cure all of Buyer's objections within the Title Cure Period for
any reason, then within 5 days after the last day of the Title Cure Period but
in no event later than the last day of the Due Diligence Period (the Election
Period), Buyer shall, as its sole and exclusive remedy, waiving all other
remedies, either: (i) terminate this Contract by giving a termination notice to
Seller within the Election Period, in which case the parties will have no
further rights, liabilities, or obligations under this Contract (other than
those that expressly survive termination); or (ii) waive the uncured objections
and be deemed to approve Seller's title as shown in the Commitment, the title
exception documents, and the Survey. If Seller does not receive notice of
Buyer's election to terminate under this Section 3.1(b) prior to the expiration
of the Election Period, then Buyer is deemed to have provided its waiver and
approval in accordance with clause (ii) immediately above. If Buyer terminates
this Contract under clause (i) where authorized herein and such election is
based upon Buyer’s timely objection to (and Seller’s failure to cure or agree to
cure) one or more encumbrances on the Real Property that are reasonably
anticipated to have a material adverse effect on the marketability of the
Property (a Material Encumbrance), then upon such termination, Closing Agent
shall return all of the Earnest Money to Buyer. However, if such a termination
occurs on the basis of Seller’s failure to cure or agree to cure one or more
objections that do not pertain to a Material Encumbrance, then upon such
termination, Closing Agent shall deliver to Seller the Released Funds as defined
below, and Seller shall be irrevocably and unconditionally entitled to same, and
Closing Agent shall return the remainder of the Earnest Money to Buyer.

 

(c)The Permitted Exceptions are all matters disclosed by the Commitment, title
exception documents, or the Survey: (i) to which Buyer does not timely object or
(ii) to which Buyer does timely object but which Seller does not cure or agree
to cure in writing within the Title Cure Period.

 

Section 3.2Due Diligence Period.

 

(a)During the Due Diligence Period, Buyer may enter the Real Property to conduct
inspections of the Real Property and Improvements and review and analyze all
materials, surveys, maps, reports, and other matters and information provided by
Seller under this Contract. Buyer must notify Seller of Buyer's intention to
enter the Real Property and Improvements at least 2 business days prior to each
intended entry (which notice may be provided via email). No invasive testing or
inspections may be performed without prior written approval of Seller, which
approval may be withheld or given in Seller's sole and absolute discretion.
Invasive testing shall include, without limitation, any so-called Phase 2
environmental site assessment. Seller may, at its option, have a representative
present for each inspection or test. Buyer may not enter any Improvements except
in accordance with the Leases and applicable law and only with prior notice to
Seller specifying such intended entry.

 

Contract of Sale Page 3

 

 

(b)Buyer may, in its sole discretion, elect to terminate this Contract for any
or no reason by giving notice of termination to Seller at any time on or before
April 20, 2017 (the period from the Effective Date through such later date being
the Due Diligence Period). If no notice of termination is timely received by
Seller, then this Contract remains in full force and effect and Buyer's right to
terminate this Contract under this Section 3.2 is waived. Upon a timely
termination under this Section 3.2: (i) the parties have no further rights,
liabilities, or obligations under this Contract (other than those that expressly
survive termination); and (ii) Closing Agent shall deliver the Earnest Money as
follows: (A) $350,000 of the Earnest Money (the Released Funds) shall be
delivered to Seller and Seller shall be irrevocably and unconditionally entitled
to same; and (B) the remainder of the Earnest Money shall be returned to Buyer.
The foregoing division of the Earnest Money upon a termination under this
Section is not intended to limit or affect a parties’ express rights to the
Earnest Money under other Sections of this Contract or the application of the
Earnest Money to the Purchase Price at Closing. After the expiration of the Due
Diligence Period, Buyer is deemed to waive any defaults of Seller that arose
prior to or during the Due Diligence Period of which Buyer has actual knowledge
as of the expiration of the Due Diligence Period, and any deficiencies in
Seller’s representations and warranties of which Buyer has actual knowledge at
such time.

 

(c)Buyer agrees that Buyer and all of its agents entering on the Property shall
carry commercial general liability insurance with limits of no less than
$2,000,000.00 in the aggregate and $1,000,000.00 per occurrence, insuring all
activity and conduct of Buyer and such agents while exercising the right of
access provided for in this Section. Such insurance shall be written on an
occurrence basis, shall include a contractual liability endorsement that insures
Buyer’s indemnity obligations hereunder, and shall name Seller and Seller’s
property manager as additional insureds. Buyer hereby represents and warrants
that it carries the insurance required under this paragraph. Prior to Buyer or
any agent entering the Property, and upon request of Seller, Buyer will provide
Seller with written evidence of the insurance required under this paragraph.

 

(d)Buyer shall perform, and shall cause its agents, employees, and contractors
to perform, all inspections and reviews of the Property so as not to cause any
damage, loss, cost, or expense to, or claims against, Seller or the Property.
Buyer shall, at its expense, promptly repair any damage to the Property caused
by or attributable to Buyer's inspections, testing or other activities under
this Section 3.2 to the condition existing immediately prior to the inspection
or testing. Buyer shall indemnify, defend, and hold harmless Seller, and its
owners, principals, officers, affiliates, agents and employees, from and against
any and all damages, losses, costs, liabilities, claims and expenses (including,
without limitation, reasonable legal fees and court costs) arising out of or
resulting from the entry onto the Property by Buyer or any of its affiliates,
agents, employees, contractors, or consultants or any of the inspections, tests
or other activities of such parties under this Section 3.2. Additionally, Buyer
shall, at its expense, cause any lien filed against the Real Property arising
by, through, or under Buyer or otherwise attributable to such inspections,
testing, and review of the Property to be released of record within 20 days
after receipt of notice of the filing of any lien. The terms of this Section
3.2(d) survive the Closing or any termination of this Contract, and
notwithstanding anything to the contrary, Seller may enforce specific
performance of Buyer’s obligations under this Section 3.2(d) and pursue any
other remedy at law or in equity in connection with same.

 

Contract of Sale Page 4

 

 

(e)Buyer shall, on or before the expiration of the Due Diligence Period, provide
written notice to Seller stipulating which Service Contracts Buyer elects to
assume (Assigned Contracts) and which Service Contracts Buyer elects not to
assume (the Rejected Contracts). Seller shall deliver a notice to terminate the
Rejected Contracts on or prior to the date of Closing. Notwithstanding anything
to the contrary herein, the contracts with Grande Communications Networks LLC
and AT&T Services, Inc., regardless of any notice from Buyer to the contrary,
are deemed Assigned Contracts hereunder and will be assumed by Buyer at Closing
accordingly. If Buyer does not timely make an election with respect to any one
or more of the Service Contracts, it shall be deemed to have elected to assume
each of those Service Contract(s). At Closing, all of the Assigned Contracts
shall be assigned to Buyer pursuant and subject to the terms of the Assignment
of Leases defined below.

 

ARTICLE 4

SELLER'S REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

Section 4.1Seller's Representations and Warranties.

 

Seller represents and warrants to Buyer as follows:

 

(a)Seller is validly existing under the laws of the State of its incorporation,
and is, to the extent necessary, qualified to do business in the State of Texas.

 

(b)Seller has the authority to execute this Contract and, prior to the
performance of the respective obligation, will have the authority to perform its
obligations under this Contract. The person executing this Contract on behalf of
Seller is duly authorized to do so.

 

(c)There is no pending condemnation or change in zoning affecting the Property
as of the Effective Date.

 

(d)Seller has received no written notice as of the Effective Date concerning the
Real Property or the Improvements from any governmental authority stating that
the Real Property or the Improvements are in violation of applicable law, except
such violations as have been previously cured.

 

(e)Except for any written items disclosed by Seller, there is no pending
litigation affecting the Real Property and Improvements.

 

(f)There are no attachments, executions, assignments for the benefit of
creditors, or voluntary or involuntary proceedings in bankruptcy or under other
debtor relief laws contemplated by or pending against Seller.

 

(g)To Seller’s knowledge: (i) the Leases available for review by Buyer are true
and correct copies of the actual Leases that are in Seller's possession; (ii)
there are no adverse parties in possession of any portion of the Real Property
or Improvements as of the Effective Date; and (iii) each Lease is valid and
enforceable.

 

(h)The Rent Roll delivered by Seller to Buyer under Section 2.2 is the Rent Roll
relied upon by Seller in connection with the operation of the Real Property and
Improvements as of the date of such Rent Roll.

 

(i)As of the Closing, no portion of the Property will be subject to any
management agreement, so that Buyer shall receive all of the Property free and
clear of any such management agreement.

 

Contract of Sale Page 5

 

 

(j)As of the Effective Date, Seller has not received any written notice that the
Property was not built or does not comply with all legal requirements relative
to state, local and federal accessibility laws.

 

(k)There are no warranty claims, defaults or notices of default under any
contracts or agreements related to or pertaining to the construction of the
Improvements.

 

(l)Subject to Seller’s replacement rights under Section 4.4(c) hereof, the items
of tangible personal property described on Schedule 2 attached hereto are among
the items of personal property that will be conveyed to Buyer at Closing
pursuant to the Bill of Sale.

 

Section 4.2Survival of Representations and Warranties.

 

The representations and warranties in Section 4.1 will be deemed made on and as
of the Closing Date (as hereinafter defined) with the same force and effect as
if made at that time and survive Closing for a period of 120 days. Effective at
5:00 p.m. (Dallas, Texas time) on the date that is 120 days after the Closing,
such representations and warranties shall automatically terminate, except to the
extent that notice from Buyer of a claim for breach thereof has been received by
Seller within the 120-day period, and such notice identifies the respective
claim with reasonable specificity. Buyer may bring an action for a breach of a
representation and warranty by Seller only if and only to the extent that: (a)
such action is commenced after the Closing and Buyer gives Seller the notice of
the respective breach within the 120-day period as required above, and (b) the
aggregate, actual damages from all such breaches of which Buyer gives timely
notice exceed $25,000. At all times subject to the other limitations on recovery
of damages set forth in this Section 4.2, Buyer may collect only actual damages
for any breach of Seller's representations and warranties under this Contract.
Buyer waives the right to claim, seek or recover special, consequential,
punitive, or any other damages other than actual damages in connection with this
transaction and this Contract. Except for Seller’s special warranty in the Deed
and Seller’s indemnification obligations under Section 9.3, the aggregate
liability of Seller for all damages of any kind related to this Contract or this
transaction is limited to $750,000.00. The provisions of this Section 4.2
survive the Closing or any termination of this Contract.

 

Section 4.3Knowledge Standard.

 

For purposes of this Contract, the term Seller's knowledge (and similar phrases)
means the current actual knowledge of Steve Brookshire and Kevin Hickman. The
named individuals are acting for and on behalf of Seller and are in no manner
personally liable or expressly or impliedly making any representations or
warranties in an individual capacity. Buyer waives any right to sue or to seek
any personal judgment or claim or take any other action against any such named
individual.

 

Section 4.4Seller's Covenants.

 

(a)At all times from the Effective Date to the Closing, Seller shall keep and
perform all of the obligations to be performed by the landlord under the Leases.
Seller will promptly deliver to Buyer any written notice Seller receives
regarding the occurrence of any default or alleged default by landlord under the
Leases.

 

(b)After the expiration of the Due Diligence Period, Seller may not grant any
leasing incentives other than incentives consistent with (or less than) any of
those previously offered by Seller during its ownership of the Property, without
the prior consent of Buyer (which consent may not be unreasonably withheld,
conditioned, or delayed).

 

Contract of Sale Page 6

 

 

(c)At all times from the Effective Date to the Closing, Seller shall maintain
the Improvements in their present condition and repair in all material respects,
except for normal wear and tear and any casualty or condemnation. Seller may not
remove any Personal Property from the Improvements without replacing them with
items of substantially similar kind (or utility) and quality prior to Closing.

 

(d)Seller will cause all insurance policies related to the Property to be
maintained in full force and effect up to the Closing.

 

(e)Seller will promptly notify Buyer in writing of any violation or alleged
violation affecting the Property received by Seller in writing from any
governmental authority.

 

(f)At all times from the Effective Date to the Closing, Seller shall operate the
Property in a manner consistent in all material respects with Seller’s operation
of the Property immediately prior to the Effective Date, in compliance with all
applicable laws, subject to normal wear and tear and any casualty or
condemnation. Such operational covenant shall not limit Seller’s rights to grant
incentives and replace Personal Property to the extent expressly contemplated
elsewhere in this Section 4.4.

 

ARTICLE 5

BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 5.1Buyer's Representations and Warranties.

 

Buyer represents and warrants to Seller, which representations and warranties
are also deemed to be made on and as of the Closing Date:

 

(a)Buyer is validly existing under the laws of the State of its incorporation,
and is, to the extent necessary, qualified to do business in the State of Texas.

 

(b)Buyer has the authority to execute this Contract and to perform its
obligations under this Contract. The person executing this Contract on behalf of
Buyer is duly authorized to do so.

 

(c)There are no attachments, executions, assignments for the benefit of
creditors, or voluntary or involuntary proceedings in bankruptcy or under other
debtor relief laws contemplated by, pending, or threatened against Buyer.

 

ARTICLE 6

CLOSING AND PRORATIONS

 

Section 6.1Closing Date.

 

The Closing of this Contract will take place in Closing Agent's offices
commencing at 11:00 a.m., Dallas, Texas time, on May 25, 2017 (the Closing
Date).

 

Section 6.2Closing Matters.

 

(a)Prior to the Closing, Seller shall deliver into escrow with Closing Agent,
for delivery to Buyer upon Closing:

 

(i)a Special Warranty Deed (the Deed), duly executed and acknowledged by Seller,
in the form attached to this Contract as Exhibit B;

 

Contract of Sale Page 7

 

 

(ii)a Bill of Sale (the Bill of Sale), duly executed by Seller, in the form
attached to this Contract as Exhibit C;

 

(iii)2 counterparts of an Assignment of Leases, Contracts, Security Deposits,
and Warranties (the Assignment of Leases) duly executed by Seller, in the form
attached to this Contract as Exhibit D;

 

(iv)an IRC Section 1445 Certification, duly executed by Seller, in the form
attached to this Contract as Exhibit E;

 

(v)2 counterparts of a notice to tenants (the Tenant Notice Letter), duly
executed by Seller in the form attached to this Contract as Exhibit F, to be
duplicated for and addressed to each tenant at the Property promptly after
Closing and delivered accordingly by Buyer after Closing;

 

(vi)if required under a Service Contract that Buyer has elected or is required
hereunder to assume, 2 counterparts of an assignment instrument effecting the
assignment by Seller and assumption by Buyer of the respective Service Contract,
in the form required by such Service Contract or (if no form is specified) a
commercially reasonable form presented by Seller (each a Service Contract
Assignment);

 

(vii)an updated Rent Roll dated no earlier than 1 business day prior to Closing,
certified by Seller as true, correct and complete in all material respects as of
the date thereof;

 

(viii)any other document reasonably required by Closing Agent to consummate the
transactions contemplated herein; and

 

(ix)the following, which will be left at the Property and not delivered into
escrow: (A) originals or copies of the Leases, the Service Contracts, the
Warranties, and the Tenant Records, and (B) keys to the Improvements.

 

(b)Prior to the Closing, Buyer shall deliver into escrow with Closing Agent, for
delivery to Seller upon Closing:

 

(i)by wire transfer or other immediately available federal funds, the Purchase
Price, subject to applicable prorations and credits;

 

(ii)2 counterparts of the Assignment of Leases, duly executed by Buyer;

 

(iii)2 counterparts of the Tenant Notice Letter, duly executed by Buyer;

 

(iv)2 counterparts of each Service Contract Assignment, if any, duly executed by
Buyer; and

 

(v)any other document reasonably required by Closing Agent to consummate the
transactions contemplated herein.

 

(c)Buyer shall, within five (5) business days after Closing, deliver to each
tenant at the Property the executed and completed Tenant Notice Letter for such
tenant in a manner consistent with applicable law. If not so timely delivered by
Buyer, Seller has the right to enter the Property after Closing to deliver the
Tenant Notice Letters on behalf of Buyer or Seller, as applicable. Prior to
delivery of same, Buyer shall use the information contained on the Rent Roll
provided by Seller at Closing.The rights and obligations of this paragraph
survive the Closing.

 

Contract of Sale Page 8

 

 

Section 6.3Prorations.

 

(a)Ad valorem taxes and assessments (whether for real estate or personal
property) against the Property will be prorated at Closing as of the date of
Closing based on the tax bills for the year of the Closing. If Closing occurs
before that year's tax bills are available, the proration will be based on the
latest tax rate applied to the latest valuation provided by the applicable
taxing authority. Buyer shall thereafter pay all taxes and assessments against
the Property before they become delinquent.

 

(b)Except as set forth in Section 6.3(c), all income and expenses in connection
with the operation of the Property (other than ad valorem taxes and assessments)
will be prorated at Closing as of the Closing Date as more particularly
described below. All income and expense items subject to proration pertaining to
the period prior to the Closing Date will be allocated to Seller and all income
and expense items subject to proration pertaining to the period starting on the
Closing Date will be allocated to Buyer. With respect to income (including
rents) actually received by Seller for the month in which the Closing occurs
(the Closing Month), Buyer will receive a credit against the Purchase Price
equal to the portion of such income actually received that is attributable to
the period of the Closing Month starting on the Closing Date. With respect to
prepaid income (including prepaid rents) actually received by Seller for periods
after the Closing Month, Buyer will receive a credit against the Purchase Price
for such income actually received. With respect to expenses allocable to the
Closing Month, Seller will receive from Buyer at Closing an amount equal to the
portion of such expenses that Seller has actually paid that is attributable to
the period of the Closing Month starting on the Closing Date. With respect to
expenses actually paid by Seller for periods after the Closing Month for Service
Contracts or items that Buyer has expressly assumed or is required herein to
assume, Seller will receive from Buyer at Closing an amount equal to such
expenses actually paid.

 

(c)Notwithstanding the generality of Section 6.3(b), the following specific
allocations will apply to Buyer and Seller, as applicable. Seller is responsible
for locator fees and commissions for Leases under which the tenant moves into a
unit prior to the Closing and commences the payment of rent for same. Buyer is
responsible for locator fees and commissions for Leases under which the tenant
moves into a unit on or after the Closing or has not yet commenced payment of
rent as of the Closing. Any income payable in connection with any Service
Contract will be prorated as set forth in Section 6.3(a), but no lump sum,
front-loaded or similar bonus payments paid to Seller with respect to any
Service Contract will be prorated, including (without limitation) any so-called
“door fee” or similar incentive payment under a telecommunications contract.
Finally, Buyer acknowledges that Seller bills the tenants in connection with the
Leases for certain utility services procured by Seller and furnished to such
tenants (Utility Payments), with billings to tenants for such utility services
being made monthly and in arrears (ie: for a utility service period that
concluded prior to tenant actually being billed for same). To ensure Seller’s
recoupment of all utility expenses allocable to periods prior to Closing, Buyer
shall remit to Seller after Closing an amount equal to the actual Utility
Payments paid by the tenants and attributed to: (i) Seller’s last monthly
utility service period that concludes prior to Closing; and (ii) the monthly
utility service period during which Closing occurs but only the pro-rata share
allocable to such period up to (but not including) the date of the Closing. As
to matters other than taxes on real and personal property, Seller and Buyer
shall make appropriate post-closing adjustments to the prorations of income and
expenses but in no event will any readjustment be made after the 60th day after
the Closing Date.

 

Contract of Sale Page 9

 

 

(d)All deposits and/or fees made by tenants under the Leases (whether or not
such deposits and/or fees have been designated as refundable security for rent,
cleaning, pets, or any other purposes) and not applied by Seller will be
credited against the Purchase Price and the obligation to refund the cash
deposits to tenant is assumed by Buyer, such actual cash deposits being retained
by Seller. The application fees which are not prepaid security deposits shall be
retained by Seller.

 

(e)To the extent received by Buyer after Closing, Buyer will promptly remit to
Seller any bonds or letters of credit issued in favor of any governmental
authorities by Seller or any Seller affiliate in connection with the
construction, operation or maintenance of the Improvements and any property tax
refunds, utility refunds or any other refunds in connection with the ownership,
development or operation of the Property attributable to any period prior to
Closing. To the extent received by Seller after Closing, Seller will promptly
remit to Buyer any bonds or letters of credit issued in favor of any
governmental authorities by Buyer or any Buyer affiliate in connection with the
operation or maintenance of the Improvements and any property tax refunds,
utility refunds or any other refunds in connection with the ownership,
development or operation of the Property attributable to any period on or after
Closing.

 

(f)Buyer shall use reasonable efforts to collect Delinquent Rentals (defined
herein) for Seller's benefit after the Closing in the usual course of the
operation of the Property, and collections, if any, will be remitted to Seller
promptly upon receipt by Buyer. Buyer's obligation to remit Delinquent Rentals
to Seller terminates 120 days after the Closing. Nothing contained herein
requires Buyer to institute any lawsuit or other collection procedure. Seller
and Buyer agree that any sums received by Buyer from any tenant owing Delinquent
Rentals will first be applied to the rent of such tenant for periods after
Closing that are currently due and payable to Buyer, then to rent for the
Closing Month (and prorated between the parties and remitted accordingly), and
then to other Delinquent Rentals and remitted to Seller accordingly. Delinquent
Rentals are defined as rents owed by tenants for the Closing Month or any month
prior to the Closing Month but uncollected by Seller as of the Closing Date. To
the extent Buyer collects any other income that is attributable to the Closing
Month or any month prior to the Closing Month, Buyer shall remit such amounts to
Seller promptly upon receipt (but retaining its prorated share of any income for
the Closing Month).

 

(g)The Real Property is subject to certain assessments by the applicable
property owner’s association, pursuant to the Declaration of Covenants,
Conditions and Restrictions and associated instruments, which encumber the Real
Property along with other tracts of real property within the vicinity of same
(the Restrictive Covenants). During years prior to the year of the Closing, a
portion of such assessments that were allocable to one or more of such other
tracts were not paid (the Delinquency), and Seller paid a portion of the
Delinquency to such owner’s association. Seller and Buyer hereby expressly agree
that Buyer is not assuming any responsibility for the Delinquency and Seller
shall remain liable for such Delinquency. If any of such Delinquency is
hereafter recovered by such association from the proper payers, then Seller may
be entitled to reimbursement of all or a portion of the Delinquency that was
previously paid by Seller. Buyer acknowledges and agrees that the rights to any
such reimbursement will not be conveyed to Buyer at the Closing. Buyer has no
obligation to attempt to pursue or collect any such reimbursement; however, if
Buyer hereafter receives any such reimbursement, then Buyer agrees to remit such
payment to Seller within 10 days after receipt of same.

 

(h)The obligations of Seller and Buyer under this Section 6.3 survive the
Closing.

 

Contract of Sale Page 10

 

 

Section 6.4Closing Costs.

 

Seller shall pay (i) the basic premium for the Owner Policy (but not for any
extended coverage, endorsements or modifications to the Owner Policy or for any
loan policy or endorsements or modifications required by Buyer's lender), (ii)
the cost of recording the Deed, (iii) 50% of any escrow fees or similar charges
of Closing Agent, (iv) the cost of the Updated Survey, and (v) the costs, if
any, incurred by Seller in connection with the performance of its obligations
under this Contract. Buyer shall pay (i) any premiums related to any extended
coverage, endorsements or modifications to the Owner Policy and for any loan
policy or endorsements or modifications required by Buyer's lender, (ii) the
cost of any other conveyance documents that Buyer may choose to record in
addition to the Deed, (iii) 50% of any escrow fee or similar charges of Closing
Agent, and (iv) the costs, if any, incurred by Buyer in connection with the
performance of its obligations under this Contract. All other expenses incurred
by Seller or Buyer with respect to the Closing will be borne and paid
exclusively by the party incurring same, without reimbursement, except to the
extent otherwise specified in this Contract.

 

Section 6.5Signage.

 

All signage and other current branding of the Property will remain the property
of Seller, as contemplated above. Within ten (10) business days after the
Closing and upon advance written notice to Buyer (which may be provided by
email), Seller may remove all signage and other branding of the Property from
the Improvements. Upon Seller’s timely removal as contemplated above, Seller
shall be entitled to enter the Real Property and remove same therefrom and to
relocate, reuse, alter, discard or destroy same. Such relocation may, at
Seller’s option, include the use of such signage and branding at any other real
property owned by Seller or its affiliates. With respect to any signage or
branding not removed by Seller from the Real Property within ten (10) business
days after the Closing, Buyer may discard or destroy (but not use) such items at
its sole cost and expense. The provisions of this Section shall survive the
Closing.

 

ARTICLE 7

DEFAULTS AND REMEDIES

 

Section 7.1Breach of Seller's Representations and Warranties Prior to Closing.

 

If any of Seller's representations and warranties in Section 4.1 are inaccurate
in any material respect at or prior to Closing and Seller does not cure the
material breach within 5 days after receipt of notice of the breach from Buyer,
then Buyer shall, as its sole and exclusive remedy, waiving all other remedies,
either: (a) terminate this Contract by giving notice to Seller within 5 days
after the end of Seller's cure period with respect to such breach; or (b) waive
the respective deficiency in such representation and warranty in its entirety
and proceed to the Closing. If Buyer does not provide notice of termination to
Seller within such 5-day period, then Buyer shall be deemed to have elected to
waive the deficiency as provided in clause (b). Only upon Buyer’s approval, the
Closing Date may be extended to the extent necessary to afford Seller the entire
cure period hereunder. If Buyer terminates this Contract under this Section 7.1,
then Closing Agent shall return the Earnest Money to Buyer and the parties have
no further rights, liabilities, or obligations under this Contract (other than
those that expressly survive termination). If Buyer has actual knowledge of the
inaccuracy or breach of any representation or warranty by Seller at or prior to
Closing and the Closing occurs, then effective as of Closing, Buyer is deemed to
waive such breach or inaccuracy in the representation and warranty in its
entirety (such waiver to survive Closing accordingly).

 

Contract of Sale Page 11

 

 

Section 7.2Buyer's Remedies.

 

If Seller does not timely perform any one or more of its obligations under this
Contract whether in whole or in part and Seller does not cure the default within
5 days after receipt of notice of the default from Buyer, then Buyer may elect,
as its sole and exclusive remedy, to either: (i) enforce specific performance of
Seller's obligation to convey the Property to Buyer under this Contract, if the
default at issue involves Seller’s failure to timely consummate the transactions
contemplated hereunder; or (ii) terminate this Contract by giving notice to
Seller within 5 days after the expiration of Seller’s cure period, in which case
Closing Agent shall return the Earnest Money to Buyer, and the parties will have
no further rights, liabilities, or obligations under this Contract (other than
those that expressly survive termination).

 

Only upon Buyer’s approval, the Closing Date may be extended as necessary to
afford Seller the time to cure Seller’s default, and if necessary, to
accommodate Buyer’s 5-day termination period above. As a condition to pursuing
such remedy, Buyer shall give Seller notice of its intent to enforce specific
performance within 60 days after the Closing Date, and file an action to enforce
specific performance against Seller in an appropriate State court having
jurisdiction over the Real Property within 180 days after the Closing Date.

 

Section 7.3Seller's Remedies.

 

If Buyer fails to comply with any one or more of its obligations under this
Contract whether in whole or in part or if any of Buyer’s representations or
warranties in this Contract are determined to be inaccurate or false in any
material respect, and Buyer does not cure such default or deficiency within 5
days after receipt of notice of such matter from Seller, then Seller may, as its
sole and exclusive remedy, terminate this Contract by giving notice to Buyer of
such termination. Upon such termination, the Closing Agent shall pay all of the
Earnest Money to Seller, and Seller will retain all Earnest Money as liquidated
damages, and the parties have no further rights, liabilities, or obligations
under this Contract (except for those that expressly survive termination). The
parties agree that Seller's damages are difficult to ascertain and that the
Earnest Money is a fair approximation of Seller's damages. Notwithstanding
anything to the contrary herein, Seller is not required to give Buyer notice of
default or opportunity to cure with respect to the performance of any obligation
involving the deposit of Earnest Money or the payment of the Purchase Price
hereunder.

 

ARTICLE 8

CASUALTY AND CONDEMNATION

 

Section 8.1Risk of Loss and Notice.

 

Seller shall give Buyer written notice within 48 hours after obtaining knowledge
of any destruction of any part of the Real Property and Improvements or the
commencement of any condemnation proceedings against the Real Property and
Improvements between the Effective Date and the Closing Date.

 

Section 8.2Minor Casualty and Condemnation.

 

If condemnation proceedings are commenced against any portion of the Real
Property and Improvements and Buyer does not timely elect to terminate this
Contract under Section 8.3 (an Immaterial Condemnation) or if Improvements are
destroyed by fire or other casualty and the estimated cost of repairs as
reasonably determined by Seller is less than or equal to one percent (1%) of the
Purchase Price (a Minor Casualty), Closing will occur with no reduction in the
Purchase Price and at Closing:

 

(a)Seller shall assign its interest in all proceeds of property insurance or
condemnation awards to Buyer, less any amounts actually paid by Seller to third
parties to secure such proceeds or awards and to repair, restore, or clean up
the Real Property and Improvements;

 

Contract of Sale Page 12

 

 

(b)If a Minor Casualty occurs: (i) Buyer will receive a credit against the
Purchase Price equal to the deductible applicable to the damage claim at issue
under Seller's applicable property insurance policy, if any; and (ii) Buyer
shall accept the Real Property and remaining Improvements in their damaged
state, and Seller has no obligation to repair or restore any damaged or
destroyed portions of the Real Property and Improvements but may do so at its
election; and

 

(c)If an Immaterial Condemnation is commenced: (i) Buyer will accept the
remaining Real Property and Improvements subject to the condemnation
proceedings, and (ii) Seller has no obligation to defend or otherwise appear in
any condemnation proceedings after Closing;

 

Section 8.3Major Casualty and Condemnation.

 

If condemnation proceedings are commenced against any portion of the Real
Property and Improvements (a Condemnation), or if Improvements are destroyed by
fire or other casualty and the estimated cost of repairs as reasonably
determined by Seller’s applicable insurance adjuster is more than one percent
(1%) of the Purchase Price (a Major Casualty), then Buyer may, as its sole and
exclusive remedy, terminate this Contract by giving notice to Seller within 10
days after receiving notice of such Condemnation or Major Casualty. Upon such
notice of termination, Closing Agent shall deliver the Earnest Money to Buyer,
and the parties have no further rights, liabilities, or obligations under this
Contract (other than those that expressly survive termination). If Buyer does
not provide notice of termination within such 10-day period, then Buyer is
deemed to waive its right to terminate under this Section 8.3, Closing will
occur without reduction in the Purchase Price, and such matter will be deemed a
Minor Casualty or Immaterial Condemnation (as applicable) and governed
accordingly under Section 8.2.

 

ARTICLE 9

MISCELLANEOUS

 

Section 9.1Notices.

 

All notices, requests, approvals, consents, and other communications required or
permitted under this Contract (Notices) must be in writing and are effective:
(a) on the business day sent, if sent by fax or e-mail prior to 5:00 p.m.
Dallas, Texas time, and (i) with respect to fax, the sending fax generates a
written confirmation of sending, or (ii) with respect to e-mail, the sender
receives evidence of sending, via copy of the message in its “sent” file or
other similar electronic storage; (b) on the date of deposit, if deposited on a
business day with a nationally recognized overnight courier service for prepaid
delivery on the next business day; or (c) 3 business days after being deposited
on a business day in the United States mail, certified, return receipt
requested, postage prepaid. In each instance, the Notice must be addressed to
Buyer or Seller, as the case may be, at the following addresses:

 

Seller: The Ablon at Frisco Square, LLC   8222 Douglas Avenue, Suite 390  
Dallas, Texas 75225   Tel No. (214) 720-9237   Fax No. (214) 871-2799   Contact:
Stephen Brookshire   Email: sbrookshire@pegasusablon.com       With a copy to:

 

Contract of Sale Page 13

 

 

  Munsch Hardt Kopf & Harr, P.C.   500 N. Akard Street, Suite 3800   Dallas,
Texas 75201   Contact: Will Themer   Telephone: (214) 855-7582   Facsimilie:
(214) 978-4333   Email: wthemer@munsch.com     Buyer: Irwin R. Rose & Co., LLC  
8801 River Crossing Blvd Suite 340   Indianapolis, Indiana 46240 or       P.O.
Box 40879   Indianapolis, IN 46240-8079   Tel No. (317) 884-8825   Fax No. (317)
575-0850   Contact: Douglas C. Rose   Email:  drose@rose-apartments.com      
With a copy to:       Irwin R. Rose & Co., LLC   3811 Turtle Creek Blvd Suite
1000   Dallas, Texas 75219   Contact: Jane Rose Hurst   Telephone: (469)
828-2596   Facsimilie: (469) 828-3606   Email:  jrose@amcapts.com

 

Either party may change its addresses or numbers for notice hereunder, by
providing the other party with at least 5 days’ prior notice of such change in
accordance with this provision. Legal counsel of Buyer or Seller, as applicable,
may deliver Notice on behalf of the respective party.

 

Section 9.2Assignment.

 

This Contract may not be assigned by Buyer without the prior consent of Seller,
except the assignment of the Contract to an affiliate of Buyer. Any assignee of
Buyer's interest in this Contract is bound by all of Buyer’s actions prior to
the assignment, and must assume in writing all of Buyer's obligations under this
Contract. Buyer is not released from the obligations or agreements created under
this Contract as a result of any assignment. Upon any assignment of this
Contract, Buyer shall promptly deliver to Seller a fully executed copy of the
assignment of this Contract and the assumption by the assignee of Buyer's
obligations under this Contract, which assignment and assumption must be
effected and delivered to Seller at least 7 days prior to Closing. No transfer
or assignment in violation of this Section 9.2 is valid or enforceable. An
affiliate is any person, partnership, company or entity that controls, is
controlled by, or is under common control with the assignor in question.

 

Section 9.3Commissions.

 

Each party hereby warrants to the other party that it has not dealt with any
real estate broker or salesman in the negotiation of this Contract except Brian
O’Boyle of ARA Newmark Dallas (Broker). Seller shall pay to Broker the
commissions due and payable to Broker in connection with the transactions
contemplated by this Contract, pursuant to separate written agreement between
Seller and Broker. Each party shall indemnify, defend, and hold harmless the
other party against any other real estate commissions due by virtue of the
execution or Closing of this Contract, the obligation or asserted claim for
which arises from actions taken or claimed to be taken by or through the
indemnifying party. The provisions of this Section 9.3 survive the Closing or
any termination of this Contract, and is not affected by any limitation on
remedies provided in this Contract.

 

Contract of Sale Page 14

 

 

Section 9.4Holidays, Etc.

 

Whenever any time limit or date provided herein falls on a date that is not a
business day, then that date is extended to the next day that is a business day.
The term business day as used in this Contract means any day that is not a
Saturday, Sunday, or other day on which national banks in the State of Texas are
authorized or required to be closed. Furthermore, the Friday immediately
following Thanksgiving Day is not a business day.

 

Section 9.5Legal Fees.

 

If there is litigation, arbitration, or mediation concerning the interpretation
or enforcement of this Contract or any portion of this Contract, the prevailing
party is entitled to recover from the other party its reasonable legal fees and
related expenses, and this paragraph survives the Closing or any earlier
termination of this Contract.

 

Section 9.6Disclaimers, Waivers, Releases and Indemnities.

 

Buyer acknowledges and agrees that:

 

(a)EXCEPT AS MAY BE SPECIFICALLY STATED IN THE CLOSING DOCUMENTS OR IN THE
SURVIVING OBLIGATIONS OF THIS CONTRACT, BUYER IS PURCHASING THE PROPERTY AS IS,
WHERE IS, AND WITH ALL FAULTS, AND BUYER RELEASES SELLER AND ALL SELLER
AFFILIATES AND THEIR EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, AND AGENTS
FOR ANY COST, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING FROM OR RELATED TO ANY CONSTRUCTION OR DESIGN DEFECTS, ERRORS,
OMISSIONS, OR OTHER CONDITIONS AFFECTING THE PROPERTY, KNOWN OR UNKNOWN. THIS
RELEASE WILL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESS
TERMS AND PROVISIONS, INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO UNKNOWN
CLAIMS, DAMAGES, AND CAUSES OF ACTION. THIS COVENANT RELEASING SELLER AND ALL
SELLER AFFILIATES IS A COVENANT RUNNING WITH THE PROPERTY AND IS BINDING UPON
BUYER, ITS SUCCESSORS AND ASSIGNS. BUYER SHALL PERFORM ALL INVESTIGATIONS OF THE
PROPERTY IT DEEMS NECESSARY DURING THE DUE DILIGENCE PERIOD. SUBJECT TO SELLER'S
REPRESENTATIONS AND WARRANTIES SPECIFIED IN SECTION 4.1, BUYER IS RELYING SOLELY
ON BUYER'S INDEPENDENT ANALYSIS AND INVESTIGATION OF THE PROPERTY AND BUYER
ASSUMES THE RISK THAT AN ADVERSE CONDITION OF THE PROPERTY MAY NOT HAVE BEEN
REVEALED BY ITS OWN DUE DILIGENCE.

 

(b)EXCEPT AS MAY BE SPECIFICALLY STATED IN THE CLOSING DOCUMENTS OR IN THE
SURVIVING OBLIGATIONS OF THIS CONTRACT, SELLER, FOR ITSELF AND ON BEHALF OF ALL
SELLER AFFILIATES, SPECIFICALLY DISCLAIMS, AND BUYER EXPRESSLY WAIVES, ANY
WARRANTY, GUARANTY, OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT, OR
FUTURE, OF, AS, TO, OR CONCERNING ALL OR ANY PORTION OF THE PROPERTY OR THE
OWNERSHIP OR OPERATION THEREOF, INCLUDING (WITHOUT LIMITATION): (I) THE NATURE
AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER
(INCLUDING BUT NOT LIMITED TO, DRINKING WATER, GROUNDWATER, SURFACE WATER,
WETLANDS), SOIL, AND GEOLOGY, AND THE SUITABILITY OF THE REAL PROPERTY AND
IMPROVEMENTS FOR ANY AND ALL ACTIVITIES AND USES THAT BUYER MAY ELECT TO CONDUCT
THEREON; (II) MATTERS OF TITLE; (III) THE COMPLIANCE OF THE REAL PROPERTY AND
IMPROVEMENTS OR THE OPERATION THEREOF WITH ANY LAWS, RULES, ORDINANCES, OR
REGULATIONS OF ANY GOVERNMENTAL AUTHORITY OR OTHER BODY, INCLUDING, WITHOUT
LIMITATION, THE AMERICANS WITH DISABILITIES ACT AND THE FAIR HOUSING ACT, AS
AMENDED FROM TIME TO TIME AND RELATED RULES AND REGULATIONS; (IV) WHETHER THE
IMPROVEMENTS ARE BUILT IN A GOOD AND WORKMANLIKE MANNER; (V) ZONING TO WHICH THE
REAL PROPERTY AND IMPROVEMENTS OR ANY PORTION THEREOF MAY BE SUBJECT; (VI)
WARRANTIES (EXPRESS OR IMPLIED) OF CONDITION REGARDING THE FITNESS OF THE REAL
PROPERTY AND IMPROVEMENTS FOR A PARTICULAR PURPOSE, MERCHANTABILITY,
TENANTABILITY, HABITABILITY, OR SUITABILITY FOR ANY INTENDED USE; AND (VII) ANY
ENVIRONMENTAL CONDITIONS THAT MAY EXIST ON THE REAL PROPERTY AND IMPROVEMENTS
(COLLECTIVELY, THE "HAZARDOUS WASTE LAWS") AND BUYER RELEASES AND WAIVES ANY
CLAIMS OR CAUSES OF ACTION AGAINST SELLER, SELLER'S AGENTS AND SELLER'S
AFFILIATES BASED IN WHOLE OR IN PART ON ANY VIOLATION OF, OR ARISING OUT OF THE
HAZARDOUS WASTE LAWS, OR A VIOLATION OF OR ARISING OUT OF ANY FEDERAL, STATE, OR
LOCAL STATUTE, ORDINANCE, RULE, OR REGULATION RELATING TO THE HAZARDOUS WASTE
LAWS.

 

Contract of Sale Page 15

 

 

(c)THE TERM “CLOSING DOCUMENTS” IS DEFINED COLLECTIVELY AS THE DEED, BILL OF
SALE, ASSIGNMENT OF LEASES, AND OTHER DOCUMENTS UNDER SECTION 6.2 THAT ARE
EXECUTED BY SELLER AND DELIVERED TO BUYER AT THE CLOSING. THE TERM “SURVIVING
OBLIGATIONS” IS DEFINED AS THE EXPRESS REPRESENTATIONS, WARRANTIES AND
INDEMNITIES OF SELLER THAT ARE EXPRESSLY SET FORTH ELSEWHERE WITHIN THIS
CONTRACT AND STIPULATED AS SURVIVING CLOSING, AS EXPRESSLY LIMITED BY THIS
CONTRACT.

 

(d)SELLER INDEMNIFIES BUYER FOR LOSSES, COSTS, LIABILITIES, CLAIMS AND CAUSES OF
ACTION ARISING OR ACCRUING PRIOR TO THE DATE OF CLOSING, AS AND TO THE EXTENT
PROVIDED WITHIN THE BILL OF SALE AND THE ASSIGNMENT OF LEASES. BUYER INDEMNIFIES
SELLER FOR LOSSES, COSTS, LIABILITIES, CLAIMS AND CAUSES OF ACTION ARISING OR
ACCRUING ON OR AFTER THE DATE OF CLOSING, AS AND TO THE EXTENT PROVIDED WITHIN
THE BILL OF SALE AND THE ASSIGNMENT OF LEASES. THE PARTIES ACKNOWLEDGE THAT THE
FOREGOING INDEMNITIES DO NOT EXTEND TO MATTERS PERTAINING TO THE PHYSICAL
CONDITION OF THE PROPERTY, INCLUDING (BY WAY OF EXAMPLE AND NOT LIMITATION) THE
CONSTRUCTION OF THE IMPROVEMENTS.

 

THE PROVISIONS OF THIS SECTION 9.6 SURVIVE THE CLOSING OR ANY EARLIER
TERMINATION OF THIS CONTRACT.

 

Section 9.7Independent Contract Consideration.

 

Buyer tenders to Seller and Seller acknowledges receipt of the sum of $100 as
independent and non-refundable contract consideration for any options granted in
this Contract. This independent consideration is in addition to any other
deposits made under this Contract, is earned by Seller upon its execution of
this Contract, and will not be credited against the Purchase Price.

 

Section 9.8General.

 

This Contract may be executed in one or more counterparts. Each counterpart is
an original and proof of this Contract may be made without more than one
counterpart. Facsimile pdf and/or email signatures are binding on the party
providing the facsimile signatures. The laws of the State of Texas govern this
Contract. Time is of the essence in the performance of this Contract. This
Contract is binding upon and inures to the benefit of the successors and assigns
of the parties. This Contract embodies the complete agreement between the
parties and cannot be varied except by written agreement of Seller and Buyer. If
any provision in this Contract is unenforceable in any respect, the remainder of
this Contract remains enforceable and, in lieu of the unenforceable provision,
there will be added to this Contract a provision as similar in terms to the
unenforceable clause as may be possible and be enforceable. Section headings or
captions are used in this Contract for convenience only and do not limit or
otherwise affect the meaning of any provision of this Contract.

 

Contract of Sale Page 16

 

 

Section 9.9No Recording.

 

Buyer covenants that neither it nor any successor or assign will record in any
public records this Contract or any memorandum or affidavit relating to this
Contract. This provision survives the Closing or earlier termination of this
Contract, and notwithstanding Section 7.3, Seller may enforce specific
performance of Buyer's obligations under this Section 9.9 and pursue any other
remedy at law or in equity in connection with same.

 

Section 9.10Confidentiality.

 

Unless Seller specifically and expressly otherwise agrees in writing, Buyer
agrees that (a) the results of all inspections, analyses, studies and similar
reports relating to the Property prepared by or for Buyer or any agent utilizing
any information acquired in whole or in part through the exercise of Buyer’s
access or inspection rights under this Contract (the “Buyer’s Studies”); and (b)
all information regarding the Property of whatsoever nature made available to
Buyer by Seller or Seller’s agents or representatives (the Seller’s Proprietary
Information), is confidential and shall not be disclosed to any other person
except those assisting Buyer with the transaction, or Buyer’s lender or
investors, if any, and then only upon Buyer making such persons aware of the
confidentiality restriction and procuring such persons’ agreement to be bound
thereby. Buyer agrees not to use, or allow to be used, any such information for
any purpose other than to determine whether to proceed with the contemplated
purchase, unless the same is consummated, in connection with the operation of
the Property post-closing. Further, if this Contract is terminated or if the
transaction thereafter fails to close for any reason whatsoever, Buyer agrees to
return to Seller, or cause to be returned to Seller, all of Seller’s Proprietary
Information. Unless Seller reimburses Buyer for Buyer’s costs associated with
the Buyer’s Studies, Seller shall not be entitled to receive the Buyer’s
Studies. The provisions of this Section survive the Closing or early termination
of this Contract.

 

For the avoidance of doubt and notwithstanding anything to the contrary in this
Contract, Seller and its owners and investors, and each of their respective
affiliates (collectively, the Seller Group), and Buyer and its owners and
investors, and each of their respective affiliates (collectively, Buyer Group)
may cause to be made any disclosure with respect to this Contract or the subject
transactions that is reasonably deemed necessary by any member of the Seller
Group and or Buyer Group or its counsel in connection with financial reporting,
securities disclosures or other legal, tax or financial requirements or
guidelines applicable to any of the Seller Group and/or Buyer Group, including
(without limitation) any disclosures to or filings with the Securities and
Exchange Commission.

 

Section 9.11Waiver of Jury Trial.

 

TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF BUYER AND SELLER IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE PROVISIONS OF THIS CONTRACT OR ANY DOCUMENT DELIVERED IN CONNECTION
WITH THIS CONTRACT OR THE TRANSACTIONS CONTEMPLATED THEREBY, WHETHER NOW
EXISTING OR HEREAFTER ARISING. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR
COPY OF THIS CONTRACT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

Contract of Sale Page 17

 

 

Section 9.12OFAC.

 

Each party hereby represents to the other that it is in compliance with the
requirements of Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 23, 2001)
(the Order) and other similar requirements contained in the rules and
regulations of the Office of Foreign Assets Control, Department of the Treasury
(OFAC) and in any enabling legislation or other Executive Orders or regulations
in respect thereof (the Order and such other rules, regulations, legislation, or
orders are collectively called the Orders). Furthermore, each party represents
to the other that neither it nor, to its knowledge, any of its beneficial
owners: (a) is listed on the Specially Designated Nationals and Blocked Persons
List maintained by OFAC pursuant to the Order and/or on any other list of
terrorists or terrorist organizations maintained pursuant to any of the rules
and regulations of OFAC or pursuant to any other applicable Orders (such lists
are collectively referred to as the Lists); (b) is a Person who has been
determined by competent authority to be subject to the prohibitions contained in
the Orders; or (c) is owned or controlled by, or acts for or on behalf of, any
Person on the Lists or any other Person who has been determined by competent
authority to be subject to the prohibitions contained in the Orders. The
provisions of this paragraph survive Closing.

 

Section 9.13Exchange.

 

Seller or Buyer may elect to consummate the sale or purchase (as applicable) of
the Property as part of a so-called like kind exchange (the Exchange) pursuant
to Section 1031 of the Internal Revenue Code of 1986, as amended (the Code);
provided, however, the following provisions shall apply: (a) the Closing Date is
not delayed; (b) the non-exchanging party incurs no additional liabilities of
any kind in effecting the Exchange; (c) the non-exchanging party is not required
to hold title to the exchange property at any time; (d) the exchanging party
shall pay all additional costs incurred in effecting the Exchange, including
attorneys' fees; and (e) if the exchanging party uses a qualified intermediary
to effectuate the Exchange, any assignment of the rights or obligations of the
exchanging party hereunder shall not relieve, release or absolve the exchanging
party of its obligations under this Contract. The non-exchanging party is
obligated to reasonably cooperate with the exchanging party in effecting the
Exchange, but only if the exchanging party adheres to the foregoing provisions
and otherwise causes the Exchange to adhere to same.

 

[SIGNATURE PAGE FOLLOWS]

 

Contract of Sale Page 18

 

 

EXECUTED by Seller on the tenth day of April, 2017.

 

  THE ABLON AT FRISCO SQUARE, LLC,   a Delaware limited liability company      
  By: Ablon Multifamily Ill LLC,     a Texas limited liability company,     its
managing member         By: Pegasus Ablon Properties LLC,     a Texas limited
liability company,     its managing member         By: /s/ Stephen Brookshire  
  Name: Stephen Brookshire     Title: Vice President

 

EXECUTED by Buyer on the tenth day of April, 2017.

 

    Irwin R. Rose & CO, LLC         By: /s/ Douglas C. Rose     Douglas C. Rose
President

 

Contract of Sale Page 19

 

 

The undersigned acknowledges receipt of a copy of this Contract, fully-executed
by Buyer and Seller, and shall comply with the terms of this Contract that
relate to Closing Agent.

 

COMMONWEALTH TITLE

 

By: /s/ Stacie Taylor     Name: Stacie Taylor     Title: Sr. Commercial EO  

 

Contract of Sale Page 20