EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
by and between
Cooper Creek Village, LLC
(“Seller”)
and
STEADFAST ASSET HOLDINGS, INC.,
a California corporation
(“Buyer”)

 

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TABLE OF CONTENTS

                          Page No.   1.    
PURCHASE AND SALE
    1        
1.1 Property
    1        
1.2 No Warranty
    2   2.    
PURCHASE PRICE
    2   3.    
PAYMENT OF PURCHASE PRICE
    2        
3.1 Deposit
    2        
3.2 Remainder of Purchase Price
    3        
3.3 Liquidated Damages
    3   4.    
ESCROW INSTRUCTIONS
    3        
4.1 Opening of Escrow
    3        
4.2 Conditions to Close
    3        
4.3 Recordation and Transfer
    4   5.    
CLOSING
    4        
5.1 Generally
    4        
5.2 Extension Option
    5   6.    
BUYER’S REVIEW
    5        
6.1 Delivery of Documents
    5        
6.2 Access
    6        
6.3 Title and Survey
    6        
6.4 Buyer’s Due Diligence
    7        
6.5 Buyer’s Termination Right
    7        
6.6 Contracts
    7   7.    
REPRESENTATIONS AND WARRANTIES
    7        
7.1 Seller’s Representations and Warranties
    7        
7.2 Buyer’s Representations and Warranties
    11   8.    
COVENANTS
    11        
8.1 Seller
    11        
8.2 Buyer
    14   9.    
ADJUSTMENTS AND PRORATIONS
    14        
9.1 Generally
    14        
9.2 Rental Income
    15        
9.3 Proration Period
    15   10.    
CLOSING DOCUMENTS
    15        
10.1 Seller’s Deliveries
    15        
10.2 Buyer’s Deliveries
    16  

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                            Page No.        
10.3 Other Closing Documents
    16        
10.4 Closing Documents
    16   11.    
COSTS
    16   12.    
CASUALTY OR CONDEMNATION
    16   13.    
ATTORNEYS’ FEES
    17   14.    
ASSIGNMENT
    17   15.    
WAIVER
    17   16.    
GOVERNING LAW
    17   17.    
NOTICES
    17   18.    
ENTIRE AGREEMENT
    18   19.    
COUNTERPARTS; COPIES
    18   20.    
AUTHORITY
    18   21.    
RECORD ACCESS AND RETENTION
    18   22.    
CONTRACT CONSIDERATION
    19  

EXHIBITS

     
Exhibit “A”
  Real Property Description
Exhibit “B”
  Personal Property Description
Exhibit “C”
  Due Diligence Documents
Exhibit “D”
  Form of Deed
Exhibit “E”
  Form of General Assignment
Exhibit “F”
  Form of Bill of Sale
Exhibit “G”
  Form of Non-Foreign Certificate
Exhibit “H”
  Form of Tenant Notice  
SCHEDULES
     
Schedule 1
  Leases
Schedule 2
  Contracts
Schedule 3
  Approvals
Schedule 7.1.8
  Litigation

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PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
     This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(“Agreement”) is made and entered into as of the 24th day of June, 2011, by and
between Cooper Creek Village, LLC, a Kentucky limited liability company (
“Seller”), and STEADFAST ASSET HOLDINGS, INC., a California corporation
(“Buyer”), with reference to the following facts:
RECITALS:
     A. Seller is the fee owner of that certain land improved with a multifamily
residential project commonly known as Cooper Creek Village Apartments,
consisting of 123 units situated thereon, located at 4807 Cooper Village
Terrace, Louisville, KY 40219 and more particularly described in Exhibit “A”
attached hereto, together with all structures, improvements, machinery, fixtures
and equipment affixed or attached to the land (collectively referred to herein
as the “Real Property”).
     B. Seller desires to sell the Real Property, along with certain related
personal and intangible property, to Buyer, and Buyer desires to purchase such
Real Property and related personal and intangible property from Seller in
accordance with the terms and conditions hereinafter set forth.
     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto mutually agree as follows:
     1. PURCHASE AND SALE.
          1.1 Property. Subject to the terms and conditions of this Agreement,
and for the consideration herein set forth, Seller agrees to sell and transfer,
and Buyer agrees to purchase and acquire, all of Seller’s right, title, and
interest in and to the following (collectively, the “Property”):
               1.1.1 The Real Property;
               1.1.2 All easements, licenses, interests, rights, privileges,
tenements, hereditaments and appurtenances on or in anywise appertaining to the
Real Property;
               1.1.3 All equipment, tools, machinery, materials, furniture,
furnishings, supplies and other tangible personal property owned by Seller and
located on or used in connection with or arising out of the ownership,
management or operation of the Real Property as of the date hereof, as more
particularly described in Exhibit “B” attached hereto (collectively, “Personal
Property”);
               1.1.4 All leases and occupancy agreements relating to the
Property in effect on the Date of Closing (as hereinafter defined), including
all amendments thereto

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(collectively, “Leases”) (the Leases in effect on the date of this Agreement are
identified on Schedule 1 attached hereto);
               1.1.5 Subject to Section 6.6 below, all service, maintenance,
supply or other contracts relating to the operation of the Property in effect as
of the date hereof (including without limitation all warranties and license
agreements), which are identified on Schedule 2 attached hereto (collectively,
“Contracts”);
               1.1.6 All approvals, plans, specifications, studies and surveys
relating to the Property, which are identified on Schedule 3 attached hereto
(collectively, “Approvals”); and
               1.1.7 All entitlements and intangible personal property in
connection with or arising out of the ownership of the Real Property, including,
without limitation, all licenses, permits and certificates of occupancy for the
Real Property and trade names and logos (the “Intangible Property”).
          1.2 No Warranty. Subject to the representations, warranties and
covenants of Seller set forth in this Agreement, Seller is selling and Buyer is
purchasing the Property “AS IS WHERE IS” with all faults.
     2. PURCHASE PRICE. The total purchase price (“Purchase Price”) to be paid
by Buyer to Seller for the Property shall be ELEVEN MILLION AND 00/100 DOLLARS
($11,000,000.00) payable all in cash.
     3. PAYMENT OF PURCHASE PRICE.
          The Purchase Price shall be paid as follows:
          3.1 Deposit. As part of the Opening of Escrow (as defined below),
Buyer shall deliver to First American Title Insurance Company (“Escrow Holder”),
which has an address of 5 First American Way, Santa Ana, California 92707 Attn:
Jeanne Gould, the sum of TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($200,000.00)
(“Initial Deposit”) in immediately available funds as a good faith deposit. The
Initial Deposit, the Extension Deposit (as hereinafter defined), and all
interest earned on any of the foregoing, shall be collectively referred to in
this Agreement as the “Deposit”. Escrow Holder shall place the Deposit in one or
more government insured interest-bearing accounts satisfactory to Seller and
Buyer (which shall have no penalty for early withdrawal), and shall not
commingle the Deposit with any funds of Escrow Holder or any other person or
entity. All interest earned on the Deposit shall be included within the meaning
of the term “Deposit” in this Agreement. The Buyer shall be responsible for any
and all taxes due and owing with respect to the interest accruing on the
Deposit. If Closing occurs in accordance with this Agreement, the Deposit shall
be applied against the Purchase Price. The Deposit shall be returned to Buyer
within one (1) business day only if (y) Buyer elects to properly terminate this
Agreement in accordance with Section 6.5 below or (z) Closing fails to occur due
to (i) Seller’s material breach of this Agreement (not caused by Buyer’s
breach), (ii) the failure of a condition to close set forth in Section 4.2.2
(with respect to deliveries by Seller only), 4.2.3, 4.2.4 (with respect to
performance by Seller only), 4.2.5 or 4.2.6 (with

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respect to Seller’s ability to perform only) of this Agreement (to the extent
all of the foregoing are not caused by Buyer’s breach or failure to perform) ,
or (iii) a casualty or condemnation event as described in Section 12 below
occurs. In the event of a termination of this Agreement by either Seller or
Buyer for any reason other than pursuant to Section 6.5, Escrow Holder is
authorized to deliver the Deposit to the party hereto entitled to same pursuant
to the terms hereof on or before the tenth business day following receipt by
Escrow Holder and the non-terminating party of written notice of such
termination from the terminating party, unless the other party hereto notifies
Escrow Holder that it disputes the right of the other party to receive the
Deposit. In such event, Escrow Holder may interplead the Deposit into a court of
competent jurisdiction in the county in which the Deposit has been deposited.
All attorneys’ fees and costs and Escrow Holder’s costs and expenses incurred in
connection with such interpleader shall be assessed against the party that is
not awarded the Deposit, or if the Deposit is distributed in part to both
parties, then in the inverse proportion of such distribution.
          3.2 Remainder of Purchase Price. On or before the Closing Date, Buyer
shall deposit into Escrow (as defined below) immediately available funds in an
amount which, when added to the Deposit, will equal the Purchase Price plus any
additional amounts necessary to cover costs and/or prorations under this
Agreement.
          3.3 Liquidated Damages. SELLER AND BUYER AGREE THAT, (i) IF THE
PURCHASE AND SALE OF THE PROPERTY IS NOT COMPLETED AND THIS AGREEMENT TERMINATES
BECAUSE BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT
(AFTER WRITTEN NOTICE AND A REASONABLE OPPORTUNITY TO CURE; PROVIDED, HOWEVER,
THAT NO SUCH NOTICE OR CURE SHALL EXTEND THE DUE DILIGENCE PERIOD OR, WITH
RESPECT TO THE DELIVERY BY BUYER OF THE PURCHASE PRICE OR ANY OTHER REQUIRED
CLOSING DELIVERIES, EXTEND THE CLOSING DATE OR RESCHEDULED CLOSING DATE (EACH AS
HEREINAFTER DEFINED), AS APPLICABLE), OR (ii) BECAUSE THE DEPOSIT BECAME
NONREFUNDABLE, SELLER DID NOT BREACH AND BUYER HAS NO RIGHT TO THE DEPOSIT UNDER
SECTION 3.1 OR SECTION 3.4, SELLER MAY TERMINATE THIS AGREEMENT BY DELIVERING
WRITTEN NOTICE TO BUYER AND ESCROW AGENT AND THEREUPON THE DEPOSIT SHALL BE PAID
TO SELLER AND RETAINED BY SELLER AS LIQUIDATED DAMAGES AND AS SELLER’S SOLE
REMEDY AT LAW OR IN EQUITY. SELLER AND BUYER AGREE THAT, UNDER THE CIRCUMSTANCES
EXISTING AS OF THE DATE OF THIS AGREEMENT, ACTUAL DAMAGES MAY BE DIFFICULT TO
ASCERTAIN AND THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE
INCURRED BY SELLER IF BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES
THIS AGREEMENT AND FAILS TO PURCHASE THE PROPERTY.
     SELLER’S INITIALS: ________ BUYER’S INITIALS: ________
          3.4 Specific Performance. If Seller fails to consummate the sale of
the Property pursuant to this Agreement or otherwise materially defaults on its
obligations hereunder at or prior to Closing for any reason except failure by
Buyer to perform hereunder or Buyer’s

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breach hereunder, or if prior to Closing any one or more of Seller’s
representations or warranties are breached in any material respect, and such
default or breach is not cured by the earlier of the third (3rd) business day
after written notice thereof from Buyer or the Closing Date (Buyer hereby
agreeing to give such written notice to Seller within one (1) business day after
Buyer first learns of any such default or breach by Seller, except no notice or
cure period shall apply if Seller fails to consummate the sale of the Property
hereunder), or if Seller breaches its obligations under Section 8.1.9 or Buyer
receives a statement from Lenders as described in Section 8.1.9, Buyer may elect
to (a) terminate this Agreement by giving Seller timely written notice of such
election prior to or at Closing and recover the Deposit and any and all
reasonable costs incurred to date (subject to the limit as provided in the last
sentence of this Section 3.4), (b) enforce specific performance to consummate
the sale of the Property hereunder, (c) waive said failure or breach and proceed
to Closing without any reduction in the Purchase Price, or (d) exercise any
other remedies at law or in equity. Notwithstanding anything herein to the
contrary, Buyer shall be deemed to have elected to terminate this Agreement
under subsection (a) hereof if Buyer fails to deliver to Seller written notice
of its intent to file a claim or assert a cause of action for specific
performance or other remedy at law or in equity against Seller on or before ten
(10) business days following the scheduled Closing Date or, having given such
notice, fails to file a lawsuit asserting such claim or cause of action in the
county in which the Property is located within ninety (90) days following the
scheduled Closing Date. Buyer’s remedies shall be limited to those described in
this Section 3.4 and Section 13. If, however, the equitable remedy of specific
performance is not available, Buyer may seek any other right or remedy available
at law or in equity; provided, however, that in no event shall Seller’s
liability exceed the lesser of (1) $250,000 or (2) the actual reasonable
out-of-pocket expenses incurred by Buyer and paid (A) to Buyer’s attorneys in
connection with the negotiation of this Agreement and (B) to unrelated and
unaffiliated third party consultants or any potential in connection with the
performance of examinations, inspections and/or investigations pursuant to
Section 6 or any potential financing.
     4. ESCROW INSTRUCTIONS.
          4.1 Opening of Escrow. Within five (5) business days after the mutual
execution of this Agreement by Seller and Buyer, the parties shall open an
escrow (“Escrow”) with Escrow Holder in order to consummate the purchase and
sale in accordance with the terms and provisions hereof. This Agreement shall be
deposited in the Escrow and the provisions hereof shall constitute joint primary
escrow instructions to Escrow Holder; provided, however, that the parties shall
execute such additional instructions as requested by Escrow Holder not
inconsistent with the provisions hereof. The date as of which Escrow Holder
shall have received (i) the Initial Deposit, which shall occur not later than
five (5) business days after the mutual execution of this Agreement by Seller
and Buyer, and (ii) executed counterparts of this Agreement from both Seller and
Buyer shall constitute the “Opening of Escrow.” Escrow Holder shall deliver
written confirmation of the date of the Opening of Escrow to the parties in the
manner set forth in Section 17 of this Agreement.

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          4.2 Conditions to Close. Closing (as hereinafter defined) shall not
occur unless and until the following conditions precedent and contingencies have
been satisfied or waived in writing by the party for whose benefit the
conditions have been included:
               4.2.1 All contingencies described in Section 6 below have either
been satisfied or waived in writing by Buyer or been effectively waived by
Buyer’s failure to terminate this Agreement.
               4.2.2 All funds and instruments described in Sections 3 and 10
have been delivered to Escrow Holder and Seller and Buyer have approved,
executed and delivered a settlement statement reflecting the Purchase Price, all
prorations, and all closing costs as required under this Agreement (the
“Settlement Statement”).
               4.2.3 Seller shall have caused the title department of Escrow
Holder, which has an address of 5 First American Way, Santa Ana, California
92707 Attn: Jeanne Gould, to have irrevocably committed to Buyer in writing to
issue an ALTA extended owner’s policy of title insurance, in form and content
acceptable to Buyer in its reasonable discretion, insuring Buyer’s fee simple
title to the Real Property in an amount equal to the Purchase Price subject only
to the Permitted Exceptions.
               4.2.4 Seller and Buyer shall each have materially performed,
observed and complied with all covenants, agreements and conditions required by
this Agreement to be performed, observed and/or complied with by such party
prior to, or as of, the Closing.
               4.2.5 Seller’s representations and warranties contained herein
shall be true and correct in all material respects as of the date hereof and as
of the Closing Date, except for representations and warranties made as of, or
limited by, a specific date, which will be true and correct in all material
respects as of the specified date or as limited by the specified date.
               4.2.6 There shall exist no pending or threatened actions, suits,
arbitrations, claims, attachments, proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy, reorganization or other proceedings, against
the other party that would materially and adversely affect that party’s ability
to perform its obligations under this Agreement; it being understood and agreed
that any previously threatened action by Lenders (as hereinafter defined) shall
not be deemed to materially and adversely affect Seller’s ability to perform its
obligations under this Agreement if and to the extent the approval and release
required under Section 7.1.14 of this Agreement has been obtained on or before
the Closing Date.
          4.3 Recordation and Transfer. Upon satisfaction of the conditions set
forth in Section 4.2 above, Escrow Holder shall transfer the Property as
follows:
               4.3.1 Cause the Deed (as such term is hereinafter defined) to be
recorded with the Office of the Clerk of Jefferson County, Kentucky;
               4.3.2 Deliver to the parties entitled thereto the other Closing
Documents (as hereinafter defined); and

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               4.3.3 Disburse all funds deposited with Escrow Holder by Buyer in
payment of the Purchase Price for the Property (subject to applicable
prorations) to Seller or, for closing costs, to the party entitled thereto, all
as set forth in the Settlement Statement.
     5. CLOSING.
          5.1 Generally. Unless this Agreement is earlier terminated by its
terms hereunder, Escrow shall close upon the recordation of the Deed in
accordance with the provisions of this Agreement (“Date of Closing”, “Closing
Date”, or “Closing”). The Closing shall occur no later than July 29, 2011
(“Initial Scheduled Closing Date”) at the office of Escrow Holder (or such other
location as may be mutually agreed upon by Seller and Buyer), unless otherwise
extended (i) by operation of Sections 6.2, 12 or 21.2 below, (ii) by Buyer
pursuant to Section 5.2 below, or (iii) by written agreement between Buyer and
Seller.
          5.2 Extension Option. Notwithstanding Section 5.1 above, Buyer shall
have the option (“Extension Option”) to extend the Initial Scheduled Closing
Date to not later than August 30, 2011 (“Rescheduled Closing Date”), in Buyer’s
sole and absolute discretion, by providing written notice to Seller of such
election prior to the Initial Scheduled Closing Date and depositing with Escrow
Holder an additional sum of FIFTY THOUSAND and 00/100 DOLLARS ($50,000.00)
(“Extension Deposit”) in immediately available funds; it being understood and
agreed that Buyer shall have no further right to terminate this Agreement under
Section 6.3 or 6.4 of this Agreement.
     6. BUYER’S REVIEW.
          6.1 Delivery of Documents. Within one (1) business day after the date
hereof, Seller shall, at the sole expense of Seller, deliver to Buyer all
documents pertaining to the Property that have been prepared by, for or at the
request of Seller or are in the possession of or available to Seller, including,
without limitation, (i) the documents listed on Exhibit “C” attached hereto;
(ii) copies of the Leases, Contracts and Approvals; (iii) copies of all
architectural, engineering and other drawings, plans and specifications for the
buildings, structures, improvements, machinery, fixtures and equipment included
in the Real Property; (iv) copies of all reports, studies, investigations,
appraisals and other materials concerning the design, construction, condition or
status of the Real Property or any of the buildings, structures, improvements,
machinery, fixtures or equipment included in the Real Property, or any system,
element or component thereof, or any past or present Release (as hereinafter
defined) or threatened Release of any Hazardous Substances (as hereinafter
defined) in, on, under or within the Real Property or any other real property in
the vicinity of the Real Property, or the compliance of the Real Property with
Environmental Laws (as hereinafter defined); and (v) copies of all environmental
impact reports, negative declarations, environmental impact certifications, and
zoning, land use or development agreements relating to the Real Property
(collectively, the “Seller Deliveries”). Seller hereby acknowledges and agrees
that the following in the possession of or available to Seller as will be
provided as required in the previous sentence: monthly operating statements
(year-to-date and 3-year historical); year-end financial statements, audited if
available (past 3 years); and general ledger (year-to-date and 3-year
historical).

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     As used in this Agreement, the following definitions shall apply:
“Environmental Laws” shall mean all federal, state and local laws, ordinances,
rules and regulations now or hereafter in force, as amended from time to time,
in any way relating to or regulating human health or safety, or industrial
hygiene or environmental conditions, or protection of the environment, or
pollution or contamination of the air, soil, surface water or groundwater, and
includes the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. § 6901, et seq., the Clean Water Act, 33 U.S.C. § 1251, et seq.,
and the Hazardous Substance Account Act. “Hazardous Substances” shall mean any
substance or material that is described as a toxic or hazardous substance waste
or material or a pollutant or contaminant, or words of similar import, in any of
the Environmental Laws, and includes asbestos, petroleum (including crude oil or
any fraction thereof, natural gas, natural gas liquids, liquefied natural gas,
or synthetic gas usable for fuel, or any mixture thereof), petroleum products,
polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive matter,
medical waste, and chemicals which may cause cancer or reproductive toxicity.
“Release” shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment, including continuing migration, of Hazardous Substances into or
through soil, surface water or groundwater.
          6.2 Access. Commencing upon the execution of this Agreement by Buyer
and Seller, Seller shall allow (or cause to be allowed) Buyer or Buyer’s agents
or representatives access to the Property for purposes of any non-intrusive
physical or environmental test, study or inspection of the Property and, to the
extent copies are not provided to Buyer by Seller, review and copying of
Seller’s books and records relating to the Property and any of the documents
described in Section 6.1 above, and other matters necessary in the discretion of
Buyer to evaluate and analyze the feasibility of the Property for Buyer’s
intended use thereof. Buyer shall not conduct or authorize any physically
intrusive testing of, on, or under the Property without first obtaining Seller’s
written consent as to the timing and scope of work to be performed, which
consent shall not be unreasonably withheld, conditioned or delayed. Seller
hereby acknowledges and agrees that Buyer or Buyer’s representatives may
communicate with any governmental authority for the sole purpose of gathering
information in connection with the Property or the Seller, or the transaction
contemplated by this Agreement.
          6.3 Title and Survey.
               6.3.1 Within one (1) business day after the date hereof, Seller
shall cause Escrow Holder to issue to Buyer a current commitment for an owner’s
policy of title insurance in the amount of the Purchase Price on an ALTA 2006
form (“Title Commitment”) together with copies of all documents of record
reflected therein as exceptions to title at Seller’s sole cost and expense (as
provided in Section 11 below). Buyer shall have until June 30, 2011 following
its receipt of the Title Commitment (“Title Objection Period”) in which to
notify Seller in writing of any objections Buyer has, in Buyer’s sole and
absolute discretion, to any matters shown on the Title Commitment (“Title
Objection Notice”). All objections raised by Buyer in the manner herein provided
are hereafter called “Objections.” Seller shall make reasonable efforts to
remedy or remove all Objections (or agree irrevocably in writing to remedy or
remove all such Objections at or prior to Closing) within fifteen (15) days
following Seller’s receipt of the Title

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Objection Notice (“Seller’s Cure Period”). In the event Seller is unable to
remedy or cause the removal of any Objections (or agree irrevocably to do so at
or prior to Closing) within Seller’s Cure Period, then Buyer, within ten
(10) days after the expiration of Seller’s Cure Period, shall deliver to Seller
written notice electing, in Buyer’s sole and absolute discretion, to either
(i) terminate this Agreement, or (ii) unconditionally waive any such Objections,
failing which Buyer shall conclusively be deemed to have elected (i) above. Any
new title or survey information received by Seller or Buyer after the expiration
of the Title Objection Period or Seller’s Cure Period, as applicable, from a
supplemental title report, survey or other source which is not the result of the
acts or omissions of Buyer or its agents, contractors or invitees (each, a “New
Title Matter”) shall be subject to the same procedure provided in this
Section 6.3 (and the Date of Closing shall be extended commensurately if the
Closing would have occurred but for those procedures being implemented for a New
Title Matter), except that the Buyer’s Title Objection Period and Seller’s Cure
Period for any New Title Matters shall be five (5) business days each. Closing
shall be delayed as needed to accommodate such additional time periods. Seller
shall have no obligation to cure title objections except financing liens of an
ascertainable amount created by, under or through Seller, which liens Seller
shall cause to be released at or prior to Closing (with Seller having the right
to apply the Purchase Price or a portion thereof for such purpose), and Seller
shall deliver the Property free and clear of any such financing liens. Seller
further agrees to remove any exceptions or encumbrances to title which are
voluntarily created by, under or through Seller after the date hereof without
Buyer’s consent. The term “Permitted Exceptions” shall mean: the specific
exceptions (excluding exceptions that are part of the promulgated title
insurance form) in the Title Commitment to which Buyer has not raised an
Objection as provided herein or has subsequently waived such Objection in
writing and that Seller is not required to remove as provided above; items shown
on the Survey which have not been removed as of the end of the Due Diligence
Period; real estate taxes not yet due and payable; and rights of tenants (as
tenants only) under the Leases.
               6.3.2 Within one (1) business day after the date hereof, Seller
shall provide Buyer with a copy of any existing survey of the Property in
Seller’s possession or control. Buyer, at its sole cost and expense, may elect
to obtain a new survey or revise, modify, or re-certify an existing survey of
the Property as necessary in order for the title department of Escrow Holder to
delete the survey exception from title or to otherwise satisfy Buyer’s
objectives.
          6.4 Buyer’s Due Diligence. Subject to Section 21.2 below, Buyer shall
have until June 30, 2011 (“Due Diligence Period”) to evaluate and analyze the
feasibility of the Property for Buyer’s intended use thereof, including, without
limitation, the zoning of the Property, the physical, environmental and
geotechnical condition of the Property and the economic feasibility of owning
and operating the Property. If, during the Due Diligence Period, Buyer
determines that the Property is not acceptable for any reason whatsoever in
Buyer’s sole and absolute discretion, Buyer shall have the right, by giving
written notice to Seller on or before the last day of the Due Diligence Period,
to terminate this Agreement. Buyer agrees to indemnify and hold Seller harmless
and defend Seller from and against any claims, liabilities, liens, cause of
action, expenses, costs, or damages (including reasonable attorneys’ fees and
personal injury claims) resulting from the inspection of the Property prior to
the Closing Date by Buyer or Buyer’s contractors, employees, representatives, or
agents; provided, however, that

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Buyer shall not be responsible for any losses or expenses resulting from the
discovery of adverse information regarding the Property. In the event this
Agreement is terminated for any reason, Buyer shall restore the Property to the
extent of any physical change or damage made as a result of the conduct of any
inspection or investigation of the Property by Buyer or Buyer’s agents,
representatives or contractors to substantially the same condition that existed
immediately prior to Buyer’s inspection and investigation. Any provision to the
contrary herein notwithstanding, the provisions of the previous two sentences
shall survive termination of this Agreement for any reason for a period of
twelve (12) months and control over any provisions to the contrary herein.
          6.5 Buyer’s Termination Right. If Buyer exercises the right to
terminate this Agreement in accordance with Sections 6.3 or 6.4 hereof, this
Agreement shall terminate as of the date the termination notice is given by
Buyer (except as to such matters that are expressly specified to survive the
termination of this Agreement), and Escrow Holder shall return the Deposit to
Buyer If Buyer does not exercise the right to terminate this Agreement in
accordance with Sections 6.3 or Section 6.4 hereof, this Agreement shall
continue in full force and effect and the Deposit shall become non-refundable
except as provided in Section 3.1 above.
          6.6 Contracts. On or before the expiration of the Due Diligence
Period, Buyer shall notify Seller in writing as to which of the Contracts Buyer
elects to assume at Closing, in Buyer’s sole and absolute discretion. Seller
shall notify the vendors under those Contract(s) which Buyer has not agreed to
assume and, provided that Closing occurs hereunder, such Contracts shall
terminate effective as of the Date of Closing.
     7. REPRESENTATIONS AND WARRANTIES.
          7.1 Seller’s Representations and Warranties. The representations,
warranties and covenants of Seller in this Section 7.1 are a material inducement
for Buyer to enter into this Agreement. Buyer would not purchase the Property
without such representations, warranties and covenants of Seller. Such
representations, warranties and covenants shall survive the Closing for one
(1) year. Seller represents, warrants and covenants to Buyer as of the date of
this Agreement and as of the Closing Date as follows:
               7.1.1 Seller is a limited liability company duly incorporated and
organized and validly existing and in good standing under the laws of the
Commonwealth of Kentucky. Seller has full power and authority to enter into this
Agreement and to perform this Agreement. The execution, delivery and performance
of this Agreement by Seller have been duly and validly authorized by all
necessary action on the part of Seller and all required consents and approvals
have been duly obtained. This Agreement is a legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms. There is no
agreement to which Seller is a party or, to Seller’s knowledge, that is binding
on Seller which is in conflict with this Agreement. At Closing, Seller will
cause good and indefeasible title to the Real Property to be conveyed to Buyer,
subject only to the Permitted Exceptions.
               7.1.2 All of the Personal Property is described in Exhibit “B”
attached hereto, which is a materially accurate and materially complete list of
all tangible and intangible personal property owned by Seller relating to the
ownership, management, operation, maintenance or repair of the Real

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Property. All of the Personal Property is located at the Real Property. Seller
has and can convey good title to the Personal Property, free and clear of all
liens, encumbrances, security interests and adverse claims of any kind or nature
whatsoever.
               7.1.3 All of the Leases are described in Schedule 1 attached
hereto, and there are no persons leasing, using or occupying the Real Property
or any part thereof except the tenants under the Leases. All of the Contracts
are described in Schedule 2 attached hereto, which is an accurate and complete
list of all presently effective contracts, agreements, warranties and guaranties
relating to the leasing, advertising, promotion, design, construction,
ownership, management, operation, maintenance or repair of the Real Property.
All of the Approvals are described in Schedule 3 attached hereto, which is an
accurate and complete list of all presently effective building permits,
certificates of occupancy, and other certificates, permits, licenses and
approvals relating to the design, construction, ownership, occupancy, use,
management, operation, maintenance or repair of the Real Property. Except for
the liens granted to Lenders (as hereinafter defined), which Seller shall cause
to be removed from title at or before Closing pursuant to subsection 7.1.14
below, Seller has and can convey good title to the Leases, the Contracts and the
Approvals, free and clear of all liens, encumbrances, security interests and
adverse claims of any kind or nature whatsoever. To Seller’s knowledge, all of
the copies of the documents delivered to Buyer pursuant to Section 6.1 hereof
are accurate and complete copies of all originals of the documents described in
Section 6.1 hereof and fairly and accurately represent the financial, physical
and environmental condition of the Property.
               7.1.4 All information concerning the Leases is accurate and
complete. Except as disclosed to Buyer, to the knowledge of Seller, the Leases
are in full force and effect and the full current rent is accruing thereunder.
The Leases have not been amended or modified except as disclosed in writing to
Buyer. No monthly rent has been paid more than one (1) month in advance (except
as otherwise expressly permitted or required pursuant to the terms of the Lease)
and no security deposit or prepaid rent has been paid except as otherwise
disclosed in writing to Buyer. No tenant under the Leases is entitled to
interest on any security deposit. The tenants have accepted possession of their
respective premises under the Leases and all improvements and construction
required to be performed by the landlord under the Leases have been completed.
Except as disclosed to Buyer , to the knowledge of Seller, there is no existing
breach or default by the landlord or by any tenant under the Leases and, to
Seller’s knowledge, the tenants have no defenses, claims or demands against the
landlord, under the Leases or otherwise, which can be offset against rents or
other charges due or to become due under the Leases. To Seller’s knowledge, no
event has occurred or condition exists which, with or without notice or the
passage of time, or both, would constitute a breach or a default by the landlord
or by any tenant under the Leases. To Seller’s knowledge, Seller has received no
notice from any tenant under the Leases claiming any breach or default by Seller
under any of the Leases. To the knowledge of Seller, no money is owed to any
tenant for improvements or otherwise under the Leases and no improvement,
moving, relocation or other payment or credit of any kind is presently owed, or
will or could become due and payable, to any tenant under the Leases. There are
no leasing commissions or other commissions, fees or compensation presently owed
or which will become due and payable with respect to any of the Leases or which
could become due and payable in the future upon the exercise of any right or
option contained in any of the Leases. Except for liens granted to Lenders,
which Seller shall cause to be removed from title at or before Closing pursuant
to subsection 7.1.14 below, Seller has not assigned, transferred,

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pledged or encumbered in any manner any of the Leases or any rents or other
amount payable by any tenant thereunder.
               7.1.5 To Seller’s knowledge, there are no defects or deficiencies
in the design, construction, fabrication, manufacture or installation of the
Real Property or any part thereof or any system, element or component thereof.
To Seller’s knowledge, all systems, elements and components of the Property
(including all machinery, fixtures and equipment, the roof, foundation and
structural elements, and the elevator, mechanical, electrical and life safety
systems) are in good working order and repair and sound operating condition.
Seller has received no notice of any kind from any insurance broker, agent or
underwriter that any noninsurable condition exists in, on or about the Real
Property or any part thereof. To Seller’s knowledge, the Approvals have been
duly and validly issued, are in full force and effect, and are all of the
certificates, permits, licenses and approvals that are required by law to own,
operate, use and occupy the Real Property as it is presently owned, operated,
used and occupied. Seller has fully performed, satisfied and discharged all of
the obligations, requirements and conditions imposed on the Real Property by the
Approvals.
               7.1.6 Seller has received no notice of any kind from any
insurance broker, agent or underwriter that any noninsurable condition exists
in, on or about the Real Property or any part thereof. Seller has not received
any notice that the Real Property is in violation of any applicable building,
earthquake, zoning, land use, environmental, antipollution, health, fire,
safety, access and accommodations for the physically handicapped, subdivision,
energy and resource conservation and similar laws, statutes, rules, regulations
and ordinances or any covenants, conditions and restrictions applicable to the
Real Property.
               7.1.7 To Seller’s knowledge, there are no Hazardous Substances
present in, on or under the Real Property or any nearby real property which
could migrate to the Real Property, and to Seller’s knowledge, there is no
present Release or threatened Release of any Hazardous Substances in, on or
under the Real Property in violation of applicable laws. Seller has never used
the Real Property or any part thereof, and has never permitted any person to use
the Real Property or any part thereof, for the production, processing,
manufacture, generation, treatment, handling, storage or disposal of Hazardous
Substances in violation of applicable laws. To Seller’s knowledge, no
underground storage tanks of any kind are located in the Real Property. To
Seller’s knowledge, the Real Property and every part thereof, and all operations
and activities therein and thereon and the use and occupancy thereof, comply
with all applicable Environmental Laws, and neither Seller nor any person using
or occupying the Real Property or any part thereof is violating any
Environmental Laws. To Seller’s knowledge, Seller has all permits, licenses and
approvals (which are included in the Approvals) required by all applicable
Environmental Laws for the use and occupancy of, and all operations and
activities in, the Real Property. To Seller’s knowledge, Seller is in full
compliance with all such permits, licenses and approvals, and to Seller’s
knowledge, all such permits, licenses and approvals are in full force and
effect. No claim, demand, action or proceeding of any kind relating to any past
or present Release or threatened Release of any Hazardous Substances in, on or
under the Real Property or any past or present violation of any Environmental
Laws at the Real Property has been made or commenced, or is pending, or to
Seller’s knowledge is being threatened or contemplated by any person.

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               7.1.8 Except for ordinary evictions and those non-material
matters described on Schedule 7.1.8, there is no litigation, arbitration or
other legal or administrative suit, action, proceeding or investigation of any
kind pending or to Seller’s knowledge threatened or being contemplated against
or involving Seller relating to the Real Property or any part thereof and, to
Seller’s knowledge, there is no valid basis for any such litigation, arbitration
or other legal or administrative suit, action, proceeding or investigation. To
Seller’s knowledge, there is no general plan, land use or zoning action or
proceeding of any kind, or general or special assessment action or proceeding of
any kind, or condemnation or eminent domain action or proceeding of any kind
pending or threatened or being contemplated with respect to the Real Property or
any part thereof. There is no legal or administrative action or proceeding
pending to contest or appeal the amount of real property taxes or assessments
levied against the Real Property or any part thereof or the assessed value of
the Real Property or any part thereof for real property tax purposes. To
Seller’s knowledge, no supplemental real property taxes have been or will be
levied against or assessed with respect to the Real Property or any part thereof
based on any change in ownership or new construction or other event or
occurrence relating to the Real Property before the date of this Agreement,
except any such supplemental real property taxes as have been paid in full and
discharged.
               7.1.9 To Seller’s knowledge, all water, sewer, gas, electric,
steam, telephone and drainage facilities and all other utilities required by law
or reasonably necessary or proper and usual for the full operation, use and
occupancy of the Real Property are installed to the boundary lines of the Real
Property, are connected with valid permits, if required, and are adequate to
service the Real Property and to allow full compliance with all applicable laws,
and the cost of installation and connection of all such utilities to the
Property has been fully paid.
               7.1.10 Seller is not “foreign person” as defined in Section 1445
of the Internal Revenue Code of 1986, as amended, and the Income Tax Regulations
thereunder.
               7.1.11 No withholding of tax or reporting (except for filing
appropriate final property and transfer tax returns at the respective taxing
authorities to be paid on the Closing Date, and customary income tax filings)
will be required with respect to the sale of the Property by Seller.
               7.1.12 Seller has not made a general assignment for the benefit
of its creditors, and has not admitted in writing its inability to pay its debts
as they become due, nor has Seller filed, nor does it contemplate the filing of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or any other proceeding for the relief of debts in general, nor has
any such proceeding been instituted by or against Seller.
               7.1.13 Except for Hendricks & Partners, Seller has not dealt with
any investment adviser, real estate broker or finder, or incurred any liability
for any commission or fee to any investment adviser, real estate broker or
finder, in connection with the sale of the Property to Buyer or this Agreement.
               7.1.14 All lenders with liens affecting the Property, including,
without limitation, Freddie Mac (with respect to which Wells Fargo Bank NA is
the servicer) (collectively, “Lenders”), have approved the transaction
contemplated by this Agreement (or

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will approve the transaction) and Seller shall cause such lenders, including,
without limitation, Lenders, to fully and unconditionally release such liens at
the Closing.
               7.1.15 The transaction contemplated by this Agreement (and any
underlying obligations contemplated by this Agreement) does not and shall not
constitute a non-exempt prohibited transaction under the Employee Retirement
Income Security Act of 1974 (“ERISA”) or a comparable violation of state law.
               7.1.16 Seller is not any of the following: (i) a person or entity
that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224 on Terrorist Financing (effective September 24, 2001)
(herein called the “Executive Order”); (ii) 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, or is otherwise subject to the provisions of, the Executive
Order; (iii) a person or entity that is named as a “specifically designated
national” or “blocked person” on the most current list published by the U.S.
Treasury Department’s Office of Foreign Assets Control (herein called “OFAC”) at
its official website, http://www.treas.gov/offices/enforcement/ofac; (iv) a
person or entity that is otherwise the target of any economic sanctions program
currently administered by OFAC; or (v) a person or entity that is affiliated
with any person or entity identified in the foregoing clauses (i), (ii), (iii),
or (iv).
               7.1.17 To Seller’s knowledge, all of the Seller Deliveries
provided to Buyer are true and complete copies of such documents. To Seller’s
knowledge, Seller has used commercially reasonable efforts to disclose to Buyer,
in writing (which disclosure may be by delivery of the Seller Deliveries), all
material information, knowledge and findings relating to the Property and its
operations in Seller’s possession or control.
          7.2 Buyer’s Representations and Warranties. Buyer represents and
warrants to Seller as follows:
               7.2.1 Buyer is a limited liability company, duly organized,
validly existing, and in good standing under the laws of the State of
California.
               7.2.2 Buyer has all requisite power and authority to execute and
deliver this Agreement and to carry out its obligations hereunder and the
transactions contemplated hereby. This Agreement has been, and the documents
contemplated hereby will be, duly executed and delivered by Buyer and constitute
its legal, valid, and binding obligation enforceable against it in accordance
with its terms.
               7.2.3 Except for Hendricks & Partners, Buyer has not dealt with
any investment adviser, real estate broker or finder, or incurred any liability
for any commission or fee to any investment adviser, real estate broker or
finder, in connection with the purchase of the Property or this Agreement.

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     8. COVENANTS.
          8.1 Seller. Seller covenants and agrees with Buyer as follows:
               8.1.1 Between the date of this Agreement and the Closing Date,
Seller shall not execute any additional lease affecting the Real Property or
amend, modify, renew, extend or terminate any of the Leases, the Contracts or
the Approvals in any respect without the prior approval of Buyer, which approval
may not be unreasonably withheld by Buyer; provided, however, that any Leases
which are either executed or renewed on a month-to-month basis (or annual basis
solely with respect to residential Leases) and which are consistent with the
current leasing practices of Seller, including, without limitation, current
rental rates, shall be deemed to be automatically approved by Buyer, and
provided further that any Contracts that are not terminable upon no more than
thirty (30) days notice may be disapproved by Buyer in its sole and absolute
discretion. Further, Buyer shall be deemed to have approved a proposed Lease if
Buyer has not made an objection to such contract within two (2) business days of
a receipt of a request for approval. Further, Seller, in emergency situations or
in situations that are critical to the operation of the Property, may enter into
Contracts for goods and services without the approval of Buyer, provided that
such Contracts must be terminable upon no more than thirty (30) days notice
without payment of any penalty or fee. Between the date of this Agreement and
the Closing Date, Seller shall not consent to any assignment or sublease
requested by any tenant under any of the Leases without the prior approval of
Buyer, which approval shall not be unreasonably withheld or delayed. Between the
date of this Agreement and the Closing Date, Seller shall manage, operate,
maintain and repair the Real Property and the Personal Property in the ordinary
course of business in accordance with Seller’s existing practices (including,
without limitation, maintenance of substantially the same advertising and
marketing programs for the Real Property in effect as of the date of this
Agreement), comply with the Approvals and all covenants, conditions,
restrictions, laws, statutes, rules, regulations and ordinances applicable to
the Real Property or the Personal Property, keep the Leases, the Contracts and
the Approvals in force, immediately give Buyer copies of all notices received by
Seller asserting any breach or default under the Leases or the Contracts or any
violation of the Approvals or any covenants, conditions, restrictions, laws,
statutes, rules, regulations or ordinances applicable to the Real Property or
the Personal Property, and perform when due all of Seller’s obligations under
the Leases, the Contracts and the Approvals in accordance with the Leases, the
Contracts and the Approvals and all applicable laws. Seller shall not (i) create
or agree to any easements, liens, mortgages, encumbrances or other interests
that would affect the Property or Seller’s ability to comply with this
Agreement; (ii) initiate or consent to, approve or otherwise take any action
with respect to zoning or any other governmental rules or regulations presently
applicable to all or any part of the Real Property; (iii) fail to pay when due
and payable all taxes and other public charges assessed against the Real
Property or Seller; (iv) fail to keep current and free from default any and all
secured financing against the Real Property; or (v) fail to pay in a timely
fashion all proper bills for labor or services for work performed for or on
behalf of Seller with respect to the Property. Between the date of this
Agreement and the Closing Date, Seller shall keep in force property insurance
covering all buildings, structures, improvements, machinery, fixtures and
equipment included in the Real Property insuring against all risks of physical
loss or damage, subject to standard exclusions, in an amount equal to the actual
replacement cost

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(without deduction for depreciation) of such buildings, structures,
improvements, machinery, fixtures and equipment.
               8.1.2 Between the date of this Agreement and the Closing Date,
Seller shall not use, produce, process, manufacture, generate, treat, handle,
store or dispose of any Hazardous Substances in violation of applicable laws in,
on or under the Real Property, or use the Real Property for any such purposes,
or Release any Hazardous Substances in violation of applicable laws, into any
air, soil, surface water or groundwater comprising the Real Property, or permit
any person using or occupying the Real Property or any part thereof to do any of
the foregoing. Between the date of this Agreement and the Closing Date, Seller
shall comply, and shall cause all persons using or occupying the Real Property
or any part thereof to comply, with all Environmental Laws applicable to the
Real Property, or the use or occupancy thereof, or any operations or activities
therein or thereon. Between the date of this Agreement and the Closing Date,
Seller shall duly obtain all permits, licenses and approvals required by all
applicable Environmental Laws for the use and occupancy of, and all operations
and activities in, the Real Property, comply fully with all such permits,
licenses and approvals, and keep all such permits, licenses and approvals in
full force and effect. Immediately after Seller obtains any information
indicating that any Hazardous Substances may be present or any Release or
threatened Release of Hazardous Substances may have occurred in, on or under the
Real Property (or any nearby real property which could migrate to the Real
Property) or that any violation of any Environmental Laws may have occurred at
the Real Property, Seller shall give written notice thereof to Buyer with a
reasonably detailed description of the event, occurrence or condition in
question. Seller shall immediately furnish to Buyer copies of all written
communications received by Seller from any person (including notices,
complaints, claims or citations that any Release or threatened Release of any
Hazardous Substances or any violation of any Environmental Laws has actually or
allegedly occurred) or given by Seller to any person concerning any past or
present Release or threatened Release of any Hazardous Substances in, on or
under the Real Property (or any nearby real property which could migrate to the
Real Property) or any past or present violation of any Environmental Laws at the
Real Property.
               8.1.3 Seller shall use commercially reasonable efforts, in good
faith and with diligence, to cause all of the representations and warranties
made by Seller in Section 7.1 hereof to be true and correct on and as of the
Closing Date.
               8.1.4 Seller shall promptly notify Buyer in writing of any
litigation, arbitration, condemnation or administrative hearing before any court
or governmental agency concerning Seller or the Property which is instituted
after the date hereof.
               8.1.5 Seller shall indemnify and defend Buyer against and hold
Buyer harmless from all claims, demands, liabilities, losses, damages, costs and
expenses, including reasonable attorneys’ fees and disbursements, (i) that may
be suffered or incurred by Buyer if any representation or warranty made by
Seller in Section 7.1 hereof was untrue or incorrect in any material respect
when made or that may be caused by any breach by Seller of any such
representation or warranty, (ii) arising from or based on any failure by Seller
to perform all obligations of Seller in accordance with the Leases, the
Contracts or the Approvals before the Closing Date, or any breach, default or
violation by Seller (or any event by Seller or condition

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which, after notice or the passage of time, or both, would constitute a breach,
default or violation by Seller) under the Leases, the Contracts or the Approvals
that occurs before the Closing Date, or any condition, event or circumstance
relating to the Real Property that existed or occurred before the Closing Date,
or any personal injury or property damage occurring in, on or about the Real
Property before the Closing Date, and (iii) arising from, relating to or
connected with any past or present Release or threatened Release of any
Hazardous Substances in, on or under the Real Property or any past or present
violation of any Environmental Laws at the Real Property that exists or occurs,
or the onset of which exists or occurs, before the Closing Date, including,
without limitation, all expenses of investigation and monitoring, costs of
containment, abatement, removal, repair, cleanup, restoration and remedial work,
penalties and fines, attorneys’ fees and disbursements, and other response
costs. Any claim of Buyer in connection with said indemnities shall be made
within twelve (12) months after the Closing or shall automatically be null, void
and of no force or effect whatsoever.
               8.1.6 Between the date of this Agreement and the Closing Date,
Seller shall not in any manner sell, convey, assign, transfer, encumber or
otherwise dispose of the Real Property, the Leases, the Personal Property, the
Contracts or the Approvals, or any part thereof or interest therein; provided,
however, that subject to prior written notice to Buyer, Seller may sell, convey,
assign, transfer, encumber or otherwise dispose of Personal Property or
Contracts in the ordinary course of its business.
               8.1.7 Seller shall pay all commissions, fees and expenses due to
Hendricks & Partners, in respect of the sale of the Property to Buyer or this
Agreement. Seller hereby agrees to indemnify and hold Buyer harmless from and
against any and all claims for brokerage or finder’s fees or other similar
commissions or compensation made by any and all other brokers or finders
claiming to have dealt with Seller in connection with this Agreement or the
consummation of the transaction contemplated hereby. The indemnification
obligations of Seller set forth in this Section 8.1.6 shall survive the Closing
or the termination of this Agreement for any reason for a period of twelve
(12) months.
               8.1.8 Seller shall not dissolve its existing entity and shall
remain validly existing and in good standing under the laws of the Commonwealth
of Kentucky during the period commencing on the date of this Agreement and
ending on the date that is twelve (12) months after the Closing Date; provided,
however, that if Buyer gives Seller written notice of a claim under this
Agreement on or before the expiration of such period, such covenant shall extend
until the later to occur of (a) the date that is eighteen (18) months after the
Closing Date, or (b) the date such claim has been satisfactorily resolved in
Buyer’s reasonable discretion.
               8.1.9 Not later than one (1) business day after the date of this
Agreement, Seller shall provide to Buyer copies of all documents evidencing,
securing or otherwise relating to any loan in favor of the Lenders and any
material correspondence to or from Lenders relating to the maturity of such
loan. Seller shall use commercially reasonable and good faith efforts (i) to
obtain as soon as possible, but in all events prior to June 29, 2011, a payoff
statement from Lenders indicating the amount (subject only to additional legal
fees not to exceed $100,000) required to satisfy any such loan in full as of the
Initial Scheduled Closing Date (with a per diem thereafter); (ii) to schedule as
soon as possible, but in all events prior to

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June 29, 2011, a meeting or conference call with Lenders, Seller and Buyer (or
its employees, officers, agents, representatives, directors, consultants,
accountants or other designees; collectively the “Buyer Representatives”) the
purpose of which is to discuss the repayment in full to Lenders in connection
with the Closing hereunder, at which the Buyer Representatives may ask such
questions or provide such information regarding this Agreement or the closing of
the transaction contemplated hereby as such Buyer Representative may determine
reasonably necessary, all of which are hereby expressly authorized by Seller;
and (iii) to obtain, on or before July 21, 2011, an agreement in form and
substance reasonably acceptable to Buyer executed by Lenders whereby Lenders
either (x) agree to forbear from the commencement of (other otherwise agree not
to commence) any enforcement action with respect to any loan to Seller or
secured by the Property for so long as this Agreement shall be outstanding or
(y) agree that, even if an action has been commenced by Lenders, to accept a
satisfaction in full of the amounts due to Lender (as provided in (i) above and
subject to the cap provided therein) on the Closing Date. Seller hereby releases
Buyer and Buyer’s Representative from any and all claims, demands, liabilities,
losses, damages, costs and expenses in connection with Buyer’s or Buyer’s
Representatives inclusion in conversations with Lenders as provided in
subsection (ii) above or subsection (b) below and shall indemnify Buyer and
Buyer’s Representatives from and against any and all claims, demands,
liabilities, losses, damages, costs and expenses in connection therewith. From
and after the date hereof and continuing through and including the Closing Date,
Seller shall (a) provide to Buyer copies of all correspondence to or from
(including email correspondence) or agreements with Lenders and/or notices of
any suit or action filed by or on behalf of Lenders, all within one (1) business
day of delivery or receipt thereof; (b) use commercially reasonable efforts to
include Buyer in any telephonic conversations or email correspondence with
Lenders; and (c) promptly (and in all events within thirty (30) days), file all
necessary motions to dismiss any action or suit commenced by Lenders.
Additionally, if and to the extent that Lenders fail to accept satisfaction in
full of any loan on the Closing Date, if requested by Buyer, (and provided that
all funds for Closing are in escrow with the Escrow Agent and Buyer has provided
an affidavit or other necessary statement that Buyer is ready, willing and able
to perform), Seller shall, within five (5) business days, file such action as
may be necessary for an expedited proceeding to require Lenders to accept said
satisfaction. Buyer hereby consents to Seller providing a copy of this Agreement
to Lenders. Seller’s breach of this Section 8.1.9 shall constitute a material
default under this Agreement for which Buyer shall be entitled to terminate this
Agreement under Section 3.4 and receive the Deposit and its reasonable costs (as
provided in subsection (a) of Section 3.4 and specifically including any
non-refundable deposits paid by Buyer and any legal fees or costs incurred by
any prospective lender to Buyer) for which, notwithstanding the cure period
provided in Section 3.4, no cure period shall be afforded Seller (unless Buyer
so agrees in its sole and absolute discretion). Additionally, upon the receipt
of any statement (whether verbal or in writing) from Lenders that Lenders will
not accept satisfaction in full of any Loan or release all liens on the Closing
Date, Buyer shall be entitled to terminate this Agreement under Section 3.4 and
receive the Deposit and its reasonable costs (as provided in subsection (a) of
Section 3.4 and specifically including any non-refundable deposits paid by Buyer
and any legal fees or costs incurred by any prospective lender to Buyer) for
which the cure period set forth in the first sentence of Section 3.4 shall be
afforded Seller.
          8.2 Buyer. Buyer covenants and agrees with Seller as follows:

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               8.2.1 All representations and warranties made by Buyer in
Section 7.2 hereof shall survive the Closing. Buyer shall use commercially
reasonable efforts, in good faith and with diligence, to cause all of the
representations and warranties made by Buyer in Section 7.2 hereof to be true
and correct on and as of the Closing Date. Buyer shall indemnify and defend
Seller against and hold Seller harmless from all claims, demands, liabilities,
losses, damages, costs and expenses, including reasonable attorneys’ fees and
disbursements, that may be suffered or incurred by Seller if any representation
or warranty made by Buyer in Section 7.2 hereof was untrue or incorrect in any
material respect when made or that may be caused by any breach by Buyer of any
such representation or warranty.
               8.2.2 Subject to Seller’s representations, warranties and
covenants set forth in Section 7.1 above, Buyer shall indemnify and defend
Seller against and hold Seller harmless from all claims, demands, liabilities,
losses, damages, costs and expenses, including reasonable attorneys’ fees and
disbursements, arising from or based on any failure by Buyer to perform all
obligations of Buyer in accordance with the Leases or the Contracts arising or
accruing on or after the Closing Date and during Buyer’s ownership of the
Property or any breach, default or violation by Buyer (or any event by Buyer or
condition which, after notice or the passage of time, or both, would constitute
a breach, default or violation by Buyer) under the Leases or the Contracts that
occurs on or after the Closing Date and during Buyer’s ownership of the
Property.
               8.2.3 Buyer hereby agrees to indemnify and hold Seller harmless
from and against any and all claims for brokerage or finder’s fees or other
similar commissions or compensation made by any and all other brokers or finders
claiming to have dealt with Buyer other than Hendricks and Partners in
connection with this Agreement or the consummation of the transaction
contemplated hereby. The indemnification obligations of Buyer set forth in this
Section 8.2.3 shall survive the Closing or the termination of this Agreement for
any reason for a period of twelve (12) months.
     9. ADJUSTMENTS AND PRORATIONS.
          9.1 Generally. All taxes, including, without limitation, real estate
taxes and personal property taxes, collected rents, laundry income, parking
income, furniture rental, charges for utilities, including water, sewer, and
fuel oil, and for utility services, maintenance services, maintenance and
service contracts, all operating costs and expenses, and all other income,
costs, and charges of every kind which in any manner relate to the operation of
the Property (but not including insurance premiums) shall be prorated to the
Date of Closing. If the amount of said taxes, assessments, or rents is not known
on the Date of Closing, they shall be apportioned on the basis of the amounts
for the preceding year, with a reapportionment as soon as the new amounts can be
ascertained. Any deposits on utilities paid by Seller shall be returned to
Seller. The foregoing provisions of this Section 9.1 shall not apply to any
taxes, assessments, or other payments which are directly payable by tenants
under their leases or reimbursable by such tenants to the owner of the Property,
as landlord, under their leases. On the Date of Closing, Seller shall deliver to
Buyer all inventories of supplies on hand at the Property owned by Seller, if
any, at no additional cost to Buyer.

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          9.2 Rental Income. Rental income from the Property shall be prorated
as of the Closing Date. Non-delinquent rents shall be prorated to the Closing
Date. Rents delinquent as of the Closing Date, but collected later, shall be
prorated as of the Closing Date when collected. Rents collected after the
Closing Date from tenants whose rental was delinquent at the Closing Date shall
be deemed to apply first to the current rental due at the time of payment and
second to rentals which were delinquent at the Closing Date. Rents collected
after the Closing Date to which Seller is entitled shall be promptly paid to
Seller. For a period of sixty (60) days after the Closing Date, Buyer shall use
reasonable efforts to collect all rents which are delinquent as of the Closing
Date with no obligation to incur any expenses or commence litigation to collect
such rents. Commencing as of sixty one (61) days after the Closing Date, Seller
may use reasonable efforts, including litigation, to collect any rents
delinquent as of the Closing Date which are still uncollected; provided,
however, in exercising its remedies against tenants as outlined in this Section,
Seller shall not evict any tenant of the Property or otherwise unreasonably
interfere with Buyer’s operation of the Property. With respect to security
deposits, if any, made by tenants at the Property, Buyer shall receive credit
therefor at Closing. Any leasing commissions with respect to the Leases shall be
the sole responsibility of Seller, and shall be paid or discharged fully at or
prior to Closing.
          9.3 Proration Period. If any of the items subject to proration
hereunder cannot be prorated at the Closing because the information necessary to
compute such proration is unavailable, or if any errors or omissions in
computing prorations at the Closing are discovered subsequent to the Closing
Date, then such item shall be reapportioned and such errors and omissions
corrected as soon as practicable after the Closing Date and the proper party
reimbursed.
     10. CLOSING DOCUMENTS
          10.1 Seller’s Deliveries. Conditioned upon performance by Buyer
hereunder, Seller shall execute and deliver to Escrow Holder prior to Closing
the following documents:
               10.1.1 Deed. A special warranty deed with respect to the Real
Property, executed by Seller and Buyer in the form of attached Exhibit “D” (the
“Deed”), subject only to the Permitted Exceptions;
               10.1.2 Assignment and Assumption of Leases, Contracts and
Approvals. An assignment of all of Seller’s right, title and interest in and to
the Leases, Contracts and Approvals in the form of attached Exhibit “E”
(“General Assignment”);
               10.1.3 Bill of Sale. A bill of sale in the form of attached
Exhibit “F”, assigning and transferring to Buyer all of the right, title, and
interest of Seller in and to the Personal Property;
               10.1.4 Non-Foreign Certificates. Certifications that Seller is
not a non-resident aliens (a foreign corporation, partnership, trust, or estate
as defined in the Internal Revenue Code and Treasury Regulations promulgated
thereunder), each in the form of attached Exhibit “G”; and

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               10.1.5 Tenant Notices. Notices to the tenants under all Leases of
the occurrence of the sale of the Property in the form of attached Exhibit “H”.
               10.1.6 Affidavit(s). An affidavit(s) as to construction, debts,
liens and parties in possession in the form customarily used by Escrow Holder,
certified to Buyer and Escrow Holder, identifying no construction, debts, liens
or parties in possession (other than residential tenants disclosed to Buyer)
that may affect the Property after the Closing Date.
               10.1.7 Possession. Sole possession of the Property, subject to
rights of tenants in possession as tenants only under the Leases.
          10.2 Buyer’s Deliveries. Conditioned upon performance by Seller
hereunder, Buyer shall execute and deliver to Escrow Holder prior to Closing the
General Assignment.
          10.3 Other Closing Documents. Each party shall deliver to the other
party or Escrow Holder such duly executed and acknowledged or verified
certificates, affidavits, and other usual closing documents respecting the power
and authority to perform the obligations hereunder and as to the due
authorization thereof by the appropriate corporate, partnership, or other
representatives acting for it, as counsel for the other party or Escrow Holder
may reasonably request, and such conveyancing or transfer tax forms or returns,
if any, as are required to be delivered by Seller or Buyer under applicable
state or local law in connection with the conveyance of the Real Property. Each
party shall deliver any additional documents that the other party or Escrow
Holder may reasonably require for the proper consummation of the transaction
contemplated by this Agreement (provided, however, no such additional document
shall expand any obligation, covenant, representation or warranty of such party
or result in any new or additional obligation, covenant, representation or
warranty of such party under this Agreement beyond those expressly set forth in
this Agreement).
          10.4 Closing Documents. All documents to be delivered to Escrow Holder
pursuant to this Section 10 shall hereinafter be referred to as “Closing
Documents”.
     11. COSTS. Seller shall pay all real estate transfer taxes and documentary
stamps, the cost of the Title Commitment and any updates thereto, and the costs
of any endorsements to the Title Policy (hereinafter defined) to the extent that
such endorsements are necessary to cure any Title Objections. Buyer shall pay
the cost of a standard ALTA Owner’s Policy of Title Insurance (the “Title
Policy”), any extended ALTA title insurance coverage, if desired, the cost of
any endorsements to the title policy (if requested by Buyer) other than those
necessary to cure any Title Objections, and the cost of any updated survey, if
desired. Seller and Buyer shall each pay one-half (1/2) of (i) recording fees
for the Deed, (ii) Escrow Holder’s escrow fee (excluding charges assessed by
Escrow Holder for special services, which shall be paid by the party requesting
or using such special services), and (iii) other closing costs. Each party shall
pay its own attorney’s fees.
     12. CASUALTY OR CONDEMNATION. During the period from the Opening of Escrow
through Closing, all risk of loss from fire or other casualty or condemnation
shall be borne by Seller. If, before the Closing Date, (i) the improvements on
the Real Property are materially damaged by any casualty, as reasonably
determined by Buyer, or (ii) proceedings are

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commenced for the taking by exercise of the power of eminent domain of all or a
material part of the Property, as reasonably determined by Buyer, Buyer shall
have the right, by giving notice to Seller within sixty (60) days after Seller
gives written notice of the casualty or condemnation to Buyer, to terminate this
Agreement, in which event this Agreement shall automatically terminate and the
Deposit shall be returned to Buyer. If, before the Closing Date, (a) the
improvements on the Real Property are damaged by any casualty, but not in a
material manner, (b) proceedings are commenced for the taking by exercise of the
power of eminent domain of less than such a material part of the Property, or
(c) Buyer has the right to terminate this Agreement pursuant to the preceding
sentence but Buyer does not exercise such right, then this Agreement shall
remain in full force and effect and, on the Closing Date, one of the following
shall occur, as applicable: (1) the full repair and restoration cost, as
mutually determined by Buyer and Seller, shall be a credit to Buyer against the
total Purchase Price for the Property, or (2) the condemnation award (or, if not
theretofore received, the right to receive such award) payable on account of the
taking shall be transferred to Buyer. Seller shall give notice to Buyer
immediately after the occurrence of any damage to the improvements on the Real
Property by any casualty or the commencement of any eminent domain proceedings.
Buyer shall have a period of sixty (60) days after Seller has given the notice
to Buyer required by this Section 12 to make the determination as to whether to
terminate this Agreement. If necessary, the Closing Date shall be postponed
until Seller has given the notice to Buyer required by this Section 12 and the
period of thirty (30) days described in this Section 12 has expired.
     13. ATTORNEYS’ FEES. In any action to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to an award of its
reasonable attorneys’ fees and costs.
     14. ASSIGNMENT. Buyer shall have the right, by giving notice to Seller
before the Closing Date, to assign this Agreement or to have Seller convey,
assign and transfer the Property at the Closing in accordance with this
Agreement to any person or entity designated by Buyer in such notice.
     15. WAIVER. No waiver of any breach of any agreement or provision contained
herein shall be deemed a waiver of any preceding or succeeding breach of any
other agreement or provision herein contained. No extension of time for the
performance of any obligation or act shall be deemed an extension of time for
the performance of any other obligation or act.
     16. GOVERNING LAW. This Agreement shall be construed under the laws of the
Commonwealth of Kentucky (without regard to the principles thereof governing
conflicts of laws).
     17. NOTICES. All notices required or permitted to be given hereunder shall
be in writing and sent by overnight delivery service (such as Federal Express),
in which case notice shall be deemed given on the day after the date sent, or by
personal delivery, in which case notice shall be deemed given on the date
received, or by certified mail, in which case notice shall be deemed given three
(3) days after the date sent, or by fax (with copy by overnight delivery
service), in which case notice shall be deemed given on the date sent, to the
appropriate address set forth below or at such other place or places as either
Buyer or Seller may, from time to time, respectively, designate in a written
notice given to the other in the manner described above.

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To Seller:
  Cooper Creek Village, LLC
Attn: Don Cook
101 North Seventh Street
Louisville, Ky 40202
Fax (502) 753-7503
Telephone No. : (502) 753-7500
 
   
With Copy To:
  Adams Law Group
Attn: Tad Adams
6004 Brownsboro Park blvd. suite A
Louisville, Ky 40207
Fax (502) 895-1702
Telephone # (502) 895-8210
 
   
To Buyer:
  Steadfast Asset Holdings, Inc.
18100 Von Karman, Suite 500
Irvine, California 92612
Attn: Ana Marie del Rio, Esq.
Fax No.: (949) 852-0143
Telephone No.: (949) 852-0700
 
   
With Copy To:
  Katten Muchin Rosenman LLP
2900 K Street NW, North Tower — Suite 200
Washington, DC 20007-5118
Attn: Virginia A. Davis
Fax No.: (202) 339-8244
Telephone No.: (202) 625-3602

     18. ENTIRE AGREEMENT. This instrument, executed in duplicate, sets forth
the entire agreement between the parties and may not be canceled, modified, or
amended except by a written instrument executed by both Seller and Buyer.
     19. COUNTERPARTS; COPIES. This Agreement may be executed and delivered in
any number of counterparts, each of which so executed and delivered shall be
deemed to be an original and all of which shall constitute one and the same
instrument. Electronic, photocopy and facsimile copies of signatures may be used
in place and stead of original signatures with the same force and effect as
originals.
     20. AUTHORITY. The individual(s) executing this Agreement on behalf of each
party hereto hereby represent and warrant that he/she has the capacity, with
full power and authority, to bind such party to the terms and provisions of this
Agreement.
     21. RECORD ACCESS AND RETENTION. Seller shall provide to Buyer (at Buyer’s
expense) copies of, or shall provide Buyer reasonable access to, such factual

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information as may be reasonably requested by Buyer, and in the possession or
control of Seller, or its property manager or accountants, to enable Buyer’s
auditor to conduct an audit, in accordance with Rule 3-14 of Securities and
Exchange Commission Regulation S-X, of the income statements of the Property for
the year to date of the year in which Closing occurs plus one (1) prior calendar
year (provided, however, such audit shall not include an audit of management
fees or interest expenses attributable to the Seller). Buyer shall be
responsible for all out-of-pocket costs associated with this audit. Seller shall
reasonably cooperate (at no cost to Seller) with Buyer’s auditor in the conduct
of such audit. In addition, Seller agrees to provide to Buyer or any affiliate
of Buyer, if requested by such auditor, historical financial statements for the
Property, including (without limitation) income and balance sheet data for the
Property, whether required before or after Closing. Without limiting the
foregoing, (i) Buyer or its designated independent or other auditor may audit
Seller’s operating statements of the Property, at Buyer’s expense, and Seller
shall provide such documentation as Buyer or its auditor may reasonably request
in order to complete such audit, and (ii) Seller shall furnish to Buyer such
financial and other information as may be reasonably required by Buyer or any
affiliate of Buyer to make any required filings with the Securities and Exchange
Commission or other governmental authority. Seller’s obligation to maintain its
records for use under this Section 21.1 shall be an on-going condition to
Buyer’s obligation to close Escrow. Seller shall maintain its records for use
under this Section 21.1 for a period of not less than one (1) year after the
Closing Date. The provisions of this Section shall survive Closing.
     22. CONTRACT CONSIDERATION. The parties have bargained for and expressly
agree that the rights and obligations of each party contained in this Agreement,
including, without limitation, Buyer’s obligation to deliver the Initial Deposit
to Escrow Holder, constitute sufficient consideration for the other party’s
execution, delivery and obligations under this Agreement, including without
limitation, Buyer’s exclusive right to inspect and purchase the Property
pursuant to this Agreement and all contingencies and conditions of Closing for
the benefit of Buyer set forth in this Agreement.
     23. JURY TRIAL WAIVER. EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO WHICH SELLER AND/OR BUYER MAY BE PARTIES ARISING OUT
OF, IN CONNECTION WITH, OR IN ANY WAY PERTAINING TO, THIS AGREEMENT. THIS WAIVER
IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PARTIES AND EACH HEREBY
REPRESENTS AND WARRANTS TO THE OTHER THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH PARTY FURTHER REPRESENTS AND WARRANTS
TO THE OTHER THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OF ITS OWN FREE WILL,
AND HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. THE PROVISIONS
OF THIS SECTION SHALL SURVIVE CLOSING OR THE TERMINATION OF THIS AGREEMENT.

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     24. COUNSEL . EACH PARTY HERETO WARRANTS AND REPRESENTS THAT EACH PARTY HAS
BEEN AFFORDED THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL OF ITS CHOICE IN
CONNECTION WITH THE EXECUTION OF THIS AGREEMENT AND HAS HAD AMPLE OPPORTUNITY TO
READ, REVIEW, AND UNDERSTAND THE PROVISIONS OF THIS AGREEMENT.
     25. EQUAL PARTICIPATION. SELLER AND BUYER HAVE PARTICIPATED EQUALLY IN THE
PREPARATION OF THIS AGREEMENT, AND, THEREFORE, THIS AGREEMENT AND EACH PROVISION
THEREOF SHALL NOT BE CONSTRUED IN FAVOR OF OR AGAINST ANY PARTY TO THIS
AGREEMENT BY REASON OF ONE PARTY’S BEING DEEMED TO PREPARED THIS AGREEMENT OR
IMPOSED SUCH PROVISION.
[SIGNATURES APPEAR ON FOLLOWING PAGE]

24

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     IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed the day and year first above written.

            SELLER:

Cooper Creek Village, LLC, a Kentucky limited
liability company
      By:   /s/ Donald J. Cook         Name:   Donald J. Cook        Its:
Managing Member        BUYER:

STEADFAST ASSET HOLDINGS, INC.,
a California corporation
      By:   /s/ Ana Marie del Rio         Name:   Ana Marie del Rio         Its:
Secretary   

25

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THE UNDERSIGNED HEREBY ACCEPTS THE FOREGOING PURCHASE AND SALE AGREEMENT AS OF
JUNE 24, 2011, AND AGREES TO ACT AS ESCROW HOLDER IN ACCORDANCE THEREWITH.

            FIRST AMERICAN TITLE INSURANCE COMPANY
      By:   /s/ Brenna Ryan for Jeanne Gould       Escrow Officer             

26

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EXHIBIT “A”

Description of Property
EXHIBIT “A-2”

Page 1 of 1

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EXHIBIT “B”
Personal Property Description
Cooper Creek Village Inventory
Manager Office
U Shaped Desk
Green Leather Sofa
Area rug
Small bookshelf — grey
Long glass top table
2 prints
1 guest Chair
Dell Computer w/Monitor
Various Accessories
Spare Offices
Crendeza
Large desk
Small Desk
Various Accessories
Conference Room
Conference Table
6 chairs
2 side chairs
Buffet
Small dresser
Mirror
Print
2 plants
Flower Arrangement
Various Accessories
Kitchen
Refrigerator
Stove
Dishwasher
Front Office (Leasing Area)
3 side chairs
2 guest chairs
Office chair
Small Desk
Chest
EXHIBIT “B”

Page 1 of 3

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4 shelf table
2 prints
Mirro
Various accessories
Area rug
Entry
Rug runner
Umbrella sand
2 plants
Picture
Various accessories
Side Office
Chest
Antique Table
3 chairs
Mirror
Dog print
Assistant Office
2 lateral file cabinets
1 black file cabinet
Desk
Credenza w/hutch
Dell Computer w/Monitor
HP Laser Printer
Fax/Copier
Built-In Bookshelf with Various accessories
Side table
Printer table
Area rug
Print
Various accessories
Fitness Center
Schwinn Treadmill
Tectrix Bike
Climbmax 3000
Vectra — full body workout system
Built in lockers without keys
Pool Furniture
5 large planters
2 trash cans
3 umbrellas

 

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19 Lounge Chairs (purchased in 2009)
4 tables with 12 Chairs
Various original pool furniture (basement)
Equipment
Nitsuko Phone System with two phones and 2 port voicemail
Sound System Onkyo Stereo receiver (speakers at pool and in fitness ctr.)
3 Com Switch
Belkin Firewall and wireless router
Golf Cart
Key Machine
Various tools
Leaf Blower
Various Ladders

 

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EXHIBIT “C”

Due Diligence Documents

     
 
  CONSTRUCTION / REHABILITATION
1
  Plans & Specifications
2
      a. Most current civil, landscape, architectural, structural mechanical,
electrical & fire protection plans
3
  Construction contracts
4
  Current capital improvements and schedule over past 3 years & Capital Budget
for next 3 years
5
  Warranties in effect (construction, roof, mechanical equipment, etc.)
6
  Copies of all Licenses and Permits, including Business License (with
expiration date & annual costs)
7
  Certificate(s) of Occupancy
8
  Tenant work in progress
9
  Copies of all Governmental correspondence or notices pertaining to the
property including but not limited to Building Code, Health Code, Zoning and
Fire Code
10
  Maintenance Records/work orders (for past 12 months)
 
  Other
 
  FINANCIAL
1
  Monthly Operating Statements (YTD and 3-year historical)
2
  Current Year Operating Budget
3
  Agreements, bonds affecting property (if any)
4
  City or County Development Agreements (if any)
5
  Year-End Financial Statements, Audited if available (past 3 years)
6
  Loan Documents (executed Notes, Deeds of Trust, etc.) — For loan assumptions
only
7
  Property Tax Bills (current and for past 3 years, including special
assessments or districts and appeals) & Assessment
8
  Tax Returns (past 3 years) — For company purchases only
9
  Type of Accounting Software:
10
  General Ledger — YTD and 3-year historical
11
  Utility Bills (current & past 12 months)
12
  Other
 
  MANAGEMENT/LEASING/OPERATIONS
1
  Current Monthly Rent Rolls (showing, square footage, monthly rent, deposits,
financial concessions, other concessions, lease term, extension options,
defaults (financial or otherwise), and such other information as Buyer may
require)
2
  Security Deposit/Resident Ledgers
3
  Market Rent Survey (if available, comparison of subject w/other properties)
4
  Occupancy History (past 3 years)
5
  Leases for all tenants and all available tenant correspondence files
(including amendments/letters/agreements)
6
  Form of Lease (with all addendums)
7
  Schedule of leases under negotiation or leases out for signature
8
  Aged Delinquency Report (showing total rent outstanding) and status of all
files placed for eviction or collection
9
  Tenant contact sheet (name, address, phone number)
10
  Copies of all operating & management service contracts, including but not
limited to:
11
      a. Laundry
12
      b. Landscaping
13
      c. HVAC

EXHIBIT “C”

Page 1 of 3

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14
      d. Janitorial Services
15
      e. Security
16
      f. Equipment Leases (such as copier, etc.)
17
      g. Trash
18
      h. Pest Control
19
      i. Pool
20
      j. Cable/TV (if none, please indicate in writing)
21
      k. Advertising
22
      l. Fire Extinguisher
23
      m. Apartment Furniture Rental
24
      n. Alarm Monitoring
25
      o. Elevator
26
      p. Phone
27
      q. Property Management Agreement; indicate whether entity is related party
for disclosure purposes
28
      r. Other:
29
  Inventory of Personal Property and Supplies Inventory (on site)
30
  Current Staff Information (employees, titles, hire dates, salary, unit
information)
31
  List of which utilities are paid by Resident & Owner
32
  List of account numbers for any utility accounts
33
  Schedule of meters and required deposits (gas, electric, telephone, water)
34
  Current list of all vendors utilized at the property
35
  Property Brochure
36
  Certificates of insurance and copies of all insurance policies, including cost
(last 3-yrs); insurance loss runs
37
  Pending Litigation Information (if applicable)
38
  O&M Manuals
39
  Other
 
  PHYSICAL ITEMS
1
  Site Plan & Elevations
2
  Unit Floor Plans (w/sq. footage)
3
  Property Information (including number of pools, spas, dumpsters (with size),
year built)
4
  Property Photos (including aerial photos if available)
5
  Model Units, if any (apt. #, bedrooms, rent loss)
6
  Building (# of bldgs., storage units, laundry rooms)
7
  Parking (carport, garages, or open spaces & number of each type)
8
  Zoning Maps & Description (also any ordinances, amendments, CC&R’s, special
use permits, etc.)
9
  Certificates of Occupancy & Building Permits (include placed in service date
per bldg. if applicable)
10
  Flood Map & Designation
11
  List of fire safety equipment, such as smoke sensors, suppression devices,
etc. (including system type, rating, map of locations, etc.)
12
  Other
 
  THIRD PARTY REPORTS
1
  All existing reports, including, (but not limited to):
2
      a. Soils or Geotechnical Report
3
      b. Phase I Environmental Report
4
      c. Property Condition Report
5
      d. Lead-Based Paint Report
6
      e. Mold Report
7
      f. List of fire suppressions devices (system type, rating, location ,
etc.)

EXHIBIT “C”

Page 2 of 3

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8
      g. Asbestos Report
9
      h. O & M Plan (if any)
10
      i. Engineering study or inspection
11
      j. Termite
12
      k. Radon
13
      l. Appraisal (if dated w/n 24 months)
14
      m. Certified As-Built ALTA Survey
15
  Other
 
  TITLE AND OTHER
1
  Title Insurance Commitment and all recorded documents referenced therein
2
  Any zoning report or compliance letter
 
  CAPITAL SOURCE — SPECIFIC INFORMATION: REIT
1
  Property Services Questionnaire
2
  Bank Reconciliations: YTD and Year-End for past 2 years
3
  Trial Balance: Year-End for past 2 years and for the years then ended
4
  Trial Balance as of 3/31/10 and for the 3-month period then ended
5
  Cash Disbursement Journals: Monthly for current and previous years (cutoff
selections for expense testing)
6
  Invoices and/or related support for Cash Disbursement Journals selected by E&Y
(to perform Cutoff Testing)
7
  Signed Letter of Representation from Seller
8
  Copy of 25 leases (as selected by E&Y) from the rent rolls provided
9
  Copy of check/evidence of payment of property tax bills for all property tax
expenses recorded in previous year
10
  APN Number for the parcel(s) being purchased (to verify the completeness of
the expense in #8 directly above)
11
  Copy of invoices or service contract and evidence of payment (check copy or
other) for 25 expenses selected by E&Y (utilities, cleaning, repairs and
maintenance and G&A expense, etc.)
12
  GL detail for the real estate balance sheet account for previous year and
quarters of previous year. Provide invoices for a sample of capitalized costs
(selections by TBD) in order to verify the completeness of repairs/maintenance
expense.
13
  Other

EXHIBIT “C”

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EXHIBIT “D”
Form of Deed
SPECIAL WARRANTY DEED
     THIS SPECIAL WARRANTY DEED is made as of ____________ ___, 2011, between
     _________________________
     ____________________
     ____________________
     ____________________ (the “Grantor”)
     and
     _________________________
     ____________________
     ____________________
     ____________________ (the “Grantee”)
W I T N E S S E T H:
     For good and valuable consideration, the receipt of which is hereby
acknowledged by Grantor, Grantor does hereby grant and convey unto Grantee in
fee simple and with covenant of Special Warranty all of Grantor’s right, title
and interest in and to the real property, together with all improvements thereon
and appurtenances thereto, located in Jefferson County, Kentucky and more fully
described as follows (the “Property”):
See attached Exhibit A.
     Grantor covenants lawful seisin of the estate hereby conveyed, full right
and power to convey same and that said estate is free of encumbrances except
liens for real property taxes and assessments due and payable in 2011, and
thereafter, which Grantee assumes and agrees to pay; however, this conveyance is
made subject to easements, covenants, restrictions and stipulations of record
and governmental laws and regulations affecting the Property herein conveyed.
     To have and to hold the Property together with all of the rights,
privileges, appurtenances and improvements thereunto belonging unto the Grantee,
and its successors and assigns forever, with covenant of special warranty of
title.

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TRANSFER YEAR PROPERTY TAX BILL TO BE ADDRESSED IN CARE OF THE GRANTEE,
_______________________.

            GRANTOR:

_________________________,
____________________
      By:   _____________________         Title:____________________________   
    Date: ____________ ___, 2011
(the “Grantor”)     

Consideration Certificate
     For purposes of KRS Chapter 382.135, Grantor and Grantee, by execution of
this Special Warranty Deed swear and affirm, under penalty of perjury that the
Property herein conveyed is transferred for the full, accurate and true
consideration _____________________ Dollars ($____________).

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      GRANTOR:   GRANTEE:
_________________________,
  _________________________,
____________________
  ____________________  
By:______________________
  By:______________________
Title:_____________________
  Title:_____________________
Date: ____________ ___, 2011
  Date: ____________ ___, 2011

         
COMMONWEALTH OF KENTUCKY
  )
) SS:
COUNTY OF JEFFERSON
  )  

     The Special Warranty Deed and foregoing consideration statement were
subscribed, sworn to and acknowledged before me this ___ day of ____________,
2011, by ____________________ who acknowledged himself to be the
____________________ of _________________________, a ____________________, and
the within named Grantor, to be the free act and voluntary deed of said company
and to be his free act and voluntary deed as its officer aforesaid.
     My commission expires: ________________________.
________________________                                                     
____________________
NOTARY PUBLIC

         
STATE OF ____________________
  )
) SS:
COUNTY OF ____________________
  )  

     The Special Warranty Deed and foregoing consideration statement were
subscribed, sworn to and acknowledged before me this ___ day of ____________,
2011, by
EXHIBIT “D”

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____________________ who acknowledged himself to be the ____________________ of
_________________________, a ____________________, and the within named Grantee,
to be the free act and voluntary deed of said company and to be his free act and
voluntary deed as its officer aforesaid.
     My commission expires: ________________________.
     ____________________

            ____________________

NOTARY PUBLIC    

THIS INSTRUMENT PREPARED BY:
________________________

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EXHIBIT “E”
Form of Assignment of Leases
ASSIGNMENT AND ASSUMPTION
OF LEASES, CONTRACTS AND APPROVALS
     THIS ASSIGNMENT AND ASSUMPTION OF LEASES, CONTRACTS AND APPROVALS (this
“Assignment”) is made as of the _____ day of __________________, 2011, by and
between Cooper Creek Village, LLC, a Kentucky limited liability company
(“Assignor”), and _________________________, a _________________________
(“Assignee”).
W I T N E S S E T H:
     For good and valuable consideration, receipt and sufficiency of which are
hereby acknowledged, Assignor and Assignee hereby agree as follows:
     1. Assignor hereby sells, transfers, assigns and conveys to Assignee the
following:
          (a) All right, title and interest of Assignor in and to those certain
leases described on Exhibit A attached hereto and made a part hereof
(collectively, the “Leases”), relating to the leasing of space in or on that
certain land and improvements located in the County of Jefferson, Commonwealth
of Kentucky, more particularly described in Exhibit B attached hereto, and all
of the rights, interests, benefits and privileges of the lessor thereunder, and
all prepaid rents and security or other deposits held by Assignor under the
Leases and not credited to Assignee under the Purchase Agreement (defined below)
or credited or returned to tenants; but subject to all terms, conditions,
reservations and limitations set forth in the Leases.
          (b) To the extent assignable and without costs to Seller, all right,
title and interest of Assignor in and to those certain contracts set forth on
Exhibit C attached hereto and made a part hereof, and all warranties,
guaranties, indemnities and claims (including, without limitation, for
workmanship, materials and performance) and which exist or may hereafter exist
against any contractor, subcontractor, manufacturer or supplier or laborer or
other services relating thereto (collectively, the “Contracts”).
          (c) To the extent assignable, all right, title and interest of
Assignor in and to those certain approvals, plans, studies and surveys set forth
on Exhibit D attached hereto and made a part hereof (collectively, the
“Approvals”).
     2. This Assignment is given pursuant to that certain Purchase and Sale
Agreement and Joint Escrow Instructions (as amended, the “Purchase Agreement”)
dated as of June ___ 2011, between Assignor and STEADFAST ASSET HOLDINGS, INC.,
a California corporation, providing for, among other things, the conveyance of
the Leases, the Contracts and the Approvals.
EXHIBIT “E”

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     3. Assignee hereby accepts the assignment of the Leases, the Contracts and
the Approvals and agrees to assume and discharge, in accordance with the terms
thereof, (a) all of the obligations thereunder arising from and after the date
hereof.
     4. Assignor agrees to indemnify, defend and hold harmless Assignee from and
against any and all claims, damages, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses)
asserted against or suffered or incurred by Assignee as a result of or in
connection with any liabilities or obligations under the Leases, the Contracts
or the Approvals relating to periods prior to the date hereof. The
indemnification obligation of Assignor set forth herein shall automatically
expire twelve (12) months after the date of this Agreement.
     5. In any action to enforce the provisions of this Assignment, the
prevailing party shall be entitled to an award of its attorneys’ fees and costs.
This Assignment may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Assignment. The terms, covenants and
conditions hereof shall inure to the benefit of and be binding upon the
respective parties hereto, their heirs, executors, administrators, successors
and assigns. Any alteration, change or modification of or to this Assignment, in
order to become effective, must be made in writing and in each instance signed
on behalf of each party to be charged. No provision of this Assignment that is
held to be inoperative, unenforceable or invalid shall affect the remaining
provisions, and to this end all provisions of this Agreement shall be severable.
This Assignment shall be governed by the laws of the Commonwealth of Kentucky.
     IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first above written.

            ASSIGNOR:

Cooper Creek Village, LLC, a Kentucky limited liability company
      By:           Name:  
        Its:          ASSIGNEE:

,      a

      By:           Name:  
        Title:        

EXHIBIT “E”

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Exhibit A
  Leases
Exhibit B
  Description of the Property
Exhibit C
  Contracts
Exhibit D
  Approvals

EXHIBIT “E”

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Exhibit A
Leases
[To be Attached]
EXHIBIT “E”

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Exhibit B
Description of Property
Approvals
[To be Attached]
EXHIBIT “E”

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EXHIBIT “F”
Form of Bill of Sale
BILL OF SALE
     Know all men by these presents, that Cooper Creek Village, LLC, a Kentucky
limited liability company (“Grantor”), for and in consideration of the sum of
ten dollars and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, does bargain, sell, grant,
transfer, assign, and convey to _________________________ (“Grantee”) all of its
right, title, and interest, if any, in and to any and all tangible personal
property owned by Grantor and now at, in or upon or used in connection with the
property commonly known as Cooper Creek Village Apartments, located at 4807
Cooper Village Terrace in the City of Louisville, County of Jefferson and
Commonwealth of Kentucky (“Property”), and more particularly described on
Exhibit A attached hereto.
     Grantor is selling and Grantee is purchasing the Property “AS IS WHERE IS”
with all faults except as provided in that certain Purchase and Sale Agreement
and Joint Escrow Instructions dated as of June __, 2011 between Grantor and
STEADFAST ASSET HOLDINGS, INC., a California corporation.
     IN WITNESS WHEREOF, Grantor has executed this Bill of Sale as of the ____
day of ___________________, 2011.

            Cooper Creek Village, LLC, a Kentucky limited
liability company
      By:         Name:           Its:                        

EXHIBITS:
A — Legal Description
EXHIBIT “F”

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Exhibit A
Legal Description
EXHIBIT “F”

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EXHIBIT “G”
Form of Non-Foreign Certificate
CERTIFICATE OF NON-FOREIGN STATUS
     Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform _________________________ (“Transferee”), that withholding of
tax is not required upon the disposition of a U.S. real property interest by
Cooper Creek Village, LLC, a Kentucky limited liability company (“Transferor”),
the undersigned hereby certifies to Transferee the following on behalf of
Transferor:
     1. Transferor is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations);
     2. Transferor’s U.S. employer identification number is _____________; and
     3. Transferor’s office address is ____________________.
     Transferor understands that this certification may be disclosed to the
Internal Revenue Service by Transferee and that any false statement contained
herein could be punished by fine, imprisonment, or both.
     Under penalties of perjury, the undersigned declares that the undersigned
has examined this certification and to the best of the undersigned’s knowledge
and belief it is true, correct and complete, and the undersigned further
declares that the undersigned has authority to sign this document on behalf of
Transferor.
     Dated as of ____________________, 2011.

            Cooper Creek Village, LLC, a Kentucky
limited liability company
      By:           Name:           Title:                        

EXHIBIT “G”

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EXHIBIT “H”

Form of Tenant Notice
____________________, 2011
     To: _____________________________
            _____________________________
            _____________________________
            _____________________________
     Re: Notice of Lease Assignment and Transfer of Security Deposit
     This letter is to notify you that the property commonly known as Cooper
Creek Village Apartments, 4807 Cooper Village Terrace, Louisville, Kentucky
(“Property”) has this date been sold and the ownership transferred.
     In connection with this sale, all of the interest of the lessor under your
lease of space in the Property, together with your security deposit in the
amount of $__________, have been transferred to the new owner. You are hereby
notified that, from and after the date hereof and until further notice, all
future payments under your lease should be made payable to “_____________” and
mailed to _________________________. In addition, all questions or other matters
regarding your lease should be directed to the ___________________ at (_____)
___________________.
     Thank you for your cooperation.

            Very truly yours,
        ,    a                       By:           Name:           Title:      
                 

EXHIBIT “J”

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SCHEDULE 2
CONTRACTS

1.   Advertising Agreement with Apartment Guide dated January 23, 2009, and
August 25, 2010

2.   Advertising Contract with ForRent.com dated December 16, 2010

3.   Standard Service Agreement (Bulk Accounts) with Insight Kentucky Partners
II, LP dated January 1, 2009

4.   Laundry Facilities Lease with Automatic Apartment Laundries, Inc. dated
September 24, 1998

5.   Landscaping Agreement with U.S. Lawns of East Louisville dated April 1,
2011

6.   Service Agreement with Waste Management of Kentucky, LLC dated March 1,
2008

7.   Orkin Pest Control Reports/Plans (various)

8.   Management Agreement with Renaissance Development dated January 1, 2009

9.   Cavalier Master Services Agreement

10.   All other Contracts relating to the operation of the Property and
identified on Exhibit C, Due Diligence Documents

SCHEDULE 2

 

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SCHEDULE 3
APPROVALS

    All Approvals relating to the Property and identified on Exhibit C, Due
Diligence Documents

SCHEDULE 3

 

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SCHEDULE 7.1.8
LITIGATION
Threatened enforcement action by Lenders as a result of maturity default under
loan secured by the Property