Exhibit 10.1

 

 

PURCHASE AND SALE AGREEMENT

BETWEEN

Verandas at Mitylene, LLC,

a Delaware limited liability company

AS SELLER,

AND

Inland Real Estate Acquisitions, Inc.,

an Illinois corporation

AS PURCHASER

As of May 30, 2017

 

 

 

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Table of Contents

Page

Article 1 PURCHASE AND SALE 6 1.1   Agreement of Purchase and Sale 6
1.2   Property Defined 8 1.3   Permitted Exceptions 8 1.4   Purchase Price 8
1.5   Payment of Purchase Price 8 1.6   Earnest Money 8 Article 2 TITLE AND
SURVEY 9 2.1   Title Examination; Commitment for Title Insurance 9 2.2   Survey
9 2.3   Title Objections; Cure of Title Objections 10 2.4   Conveyance of Title
11 2.5   Pre-Closing "Gap" Title/Survey Defects 12 2.6   Seller's Covenant Not
to Encumber 12 Article 3 INSPECTION 13 3.1   Right of Inspection 13 3.2   Right
of Termination 14 3.3   Intentionally Omitted. 15 3.4   Confidentiality 15
Article 4 CLOSING 16 4.1   Time and Place 16 4.2   Seller's Obligations at
Closing 16 4.3   Purchaser's Obligations at Closing 18 4.4   Credits and
Prorations 19 4.5   Closing Costs 22 4.6   Conditions Precedent to Obligation of
Purchaser 22 4.7   Conditions Precedent to Obligation of Seller 23
4.8   Seller's Tax Deferred Exchange 24 4.9   Purchaser's Tax Deferred Exchange
25

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Article 5 REPRESENTATIONS, WARRANTIES AND COVENANTS 25 5.1   Representations and
Warranties of Seller 25 5.2   Knowledge Defined 28 5.3   Survival of Seller's
Representations and Warranties 29 5.4   Covenants of Seller 29
5.5   Representations and Warranties of Purchaser 31 5.6   Survival of
Purchaser's Representations and Warranties 33 5.7   Covenants of Purchaser 34
5.8   Special Provisions Concerning Condominium Conversion 35 Article 6 DEFAULT
36 6.1   Default by Purchaser 36 6.2   Default by Seller 37 6.3   Notice of
Default; Opportunity to Cure 37 6.4   Recoverable Damages 37 Article 7 RISK OF
LOSS 38 7.1   Damage 38 7.2   Definition of Major Damage 38 7.3   Seller's
Insurance 39 Article 8 COMMISSIONS 39 8.1   Broker's Commission 39
8.2   Survival 39 Article 9 DISCLAIMERS AND WAIVERS 40 9.1   No Reliance on
Documents 40 9.2   Disclaimers 40 9.3   Certain Definitions 43 9.4   Effect and
Survival of Disclaimers 43

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Article 10 ESCROW AGENT 43 10.1   Investment of Earnest Money 43
10.2   Intentionally Omitted 43 10.3   Payment on Demand 44 10.4   Exculpation
of Escrow Agent 44 10.5   Stakeholder 44 10.6   Interest 44 10.7   Execution by
Escrow Agent 45 Article 11 MISCELLANEOUS 45 11.1   Intentionally Deleted 45
11.2   Intentionally Deleted 45 11.3   Assignment 45 11.4   Notices 45
11.5   Modifications 47 11.6   Calculation of Time Periods 47 11.7   Successors
and Assigns 47 11.8   Entire Agreement 48 11.9   Further Assurances 48
11.10   Counterparts 48 11.11   Severability 48 11.12   Applicable Law 48
11.13   No Third Party Beneficiary 48 11.14   Employees 49 11.15   Seller's
Access to Records after Closing 49 11.16   Schedules 49 11.17   Captions 50
11.18   Construction 50

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11.19   Termination of Agreement 50 11.20   Survival 50 11.21   Time of Essence
50 11.22   Covenant Not to Record 51 11.23   Limitation of Seller's Liability 51
11.24   JURY WAIVER 51 Article 12 ADDITIONAL PROPERTIES 51 12.1   Additional
PSAs 51 12.2   Agreements Regarding Additional PSAs 51

 

 

 

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of May 30, 2017
(the "Effective Date"), by and between Verandas at Mitylene, LLC, a Delaware
limited liability company ("Seller"), and Inland Real Estate Acquisitions, Inc.,
an Illinois corporation ("Purchaser").

Chicago Title Insurance Company, 10 South LaSalle Street, Suite 3100, Chicago,
Illinois 60603, Attn: Nancy Castro (“Escrow Agent”), through its agent Calloway
Title and Escrow, LLC, 4170 Ashford-Dunwoody Road, Suite 285, Atlanta, Georgia
30319, Attn: Amanda Calloway ("Title Company") is a party to this Agreement for
the limited purposes set forth herein.

W I T N E S S E T H:

Article 1
PURCHASE AND SALE

1.1Agreement of Purchase and Sale. Subject to the terms and conditions
hereinafter set forth, Seller agrees to sell and convey and Purchaser agrees to
purchase the following:

(a)                that certain tract or parcel of land being more particularly
described on Schedule 1.1(a), attached hereto and made a part hereof (the
property described in this clause (a) being herein referred to collectively as
the "Land");

(b)               all those rights, easements and appurtenances pertaining to
the Land (whether now or hereafter existing), including (i) all right, title and
interest of Seller (if any) in and to any streets, alleys or rights-of-way
(whether open, closed or proposed), within or adjacent to the Land, and (ii) all
right, title and interest of Seller with respect to any easements, covenants,
agreements, rights, privileges, tenements, hereditaments and appurtenances that
now or hereafter benefit or burden the Land (the property described in this
clause (b) herein referred to collectively as the "Related Rights");

(c)                the buildings, structures, facilities, installations,
fixtures and other improvements of every kind on the Land, including
specifically, without limitation, those certain buildings containing apartment
units and related facilities and commonly known as Verandas at Mitylene
Apartments (the property described in this clause (c) being herein referred to
collectively as the "Improvements", and the Land, the Related Rights and the
Improvements being hereinafter sometimes collectively referred to as the "Real
Property");

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(d)               all of Seller's right, title and interest in, to and under all
tangible personal property upon the Land or within the Improvements, including
specifically, without limitation, appliances, equipment, furniture, furnishings,
carpeting, draperies and curtains, tools and supplies, and other items of
tangible personal property owned by Seller and used exclusively in connection
with the ownership, use, maintenance or operation of the Land and the
Improvements, and including those items of tangible personal property identified
on Schedule 1.1(d), attached hereto and incorporated herein by this reference,
but excluding (i) cash and cash equivalents (except to the extent prorated at
Closing (as hereinafter defined)), (ii) any reserves or other deposits funded or
made in connection with any financing encumbering the Property, (iii) computer
software and computer files, (iv) any time clock(s), (v) personal property owned
by tenants under the Leases, (vi) any equipment installed by, or in connection
with, any telecommunication or utility provider and which is owned by any party
other than Seller (excluding any reversionary interest that Seller may have
therein which shall be assigned to Purchaser to the extent assignable), (vii)
any items owned by employees of Seller or any property manager, (viii) any items
leased to Seller, (ix) any digital voice receivers used in connection with
recorded music at the Property, and (x) all brochures, advertising copy,
promotional materials, manuals, reports, portfolios, binders, training materials
and other items on which the name "Flournoy" appears (the property described in
this clause (d), other than the excluded items, being herein referred to
collectively as the "Tangible Personal Property").

(e)                all of Seller's right, title and interest as landlord or
lessor in, to and under all written agreements listed and described on Schedule
1.1(e) (the "Rent Roll") attached hereto and made a part hereof as well as under
all similar agreements hereafter executed by Seller in accordance with the terms
of this Agreement, pursuant to which any portion of the Land or Improvements is
used or occupied by anyone other than Seller (the property described in this
clause (e) being herein referred to collectively as the "Leases");

(f)                all of Seller's right, title and interest in, to and under
(i) the Designated Service Contracts (as defined in Section 5.7 of this
Agreement), (ii) all assignable existing warranties and guaranties issued to or
inuring to the benefit of Seller in connection with the Improvements or the
Tangible Personal Property, and (iii) all governmental permits, licenses and
approvals, if any, belonging to or inuring to the benefit of Seller and
pertaining to the Real Property or the Tangible Personal Property, but only to
the extent that such permits, licenses and approvals are assignable and only to
the extent that such permits, licenses and approvals relate to the Real Property
or the Tangible Personal Property as opposed to other property of Seller or its
affiliates; (iv) resident and tenant files for current residents and tenants as
of the Closing Date (as hereinafter defined), (v) architectural and civil plans
and specifications (to the extent in Seller's possession but excluding any right
to reproduce, use such plans or specifications for future development or
otherwise restrict Seller or any affiliate of Seller from using such plans for
future development); (vi) other non-confidential and non-proprietary records
owned by Seller and used in connection with the operation of the Real Property
or any part thereof, and located

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on-site as of the Closing Date; (vii) the right to use the name "Verandas at
Mitylene Apartments" in connection with the Real Property; (viii) all assignable
telephone numbers, URLs and website domain names associated with the Real
Property including but not limited to the right, at Purchaser's expense, to use
www.verandasmontgomery.com for a period of one (1) year after the Closing solely
for the purpose of forwarding visitors to Purchaser's website for the Real
Property; but excluding any rights in or to the use of the name "Flournoy"; and
(ix) all logos, works of art, graphic designs and all videos and photos owned
and used by Seller in connection with the Real Property, provided that the item
listed in this clause (ix) does not use or display the name "Flournoy" (the
property described in this clause (f), other than the excluded items, being
sometimes herein referred to collectively as the "Intangible Property").

1.2Property Defined. The Land, the Related Rights, the Improvements, the
Tangible Personal Property, the Leases and the Intangible Property are
hereinafter sometimes referred to collectively as the "Property".

1.3Permitted Exceptions. The Property shall be conveyed, and Purchaser shall
accept the Property, subject to the matters which are, or are deemed to be,
Permitted Exceptions pursuant to Article 2 hereof (herein referred to
collectively as the "Permitted Exceptions").

1.4Purchase Price. Seller is to sell and Purchaser is to purchase the Property
for the total purchase price of Thirty Six Million Four Hundred Fifty One
Thousand and No/100 Dollars ($36,451,000.00) (the "Purchase Price").

1.5Payment of Purchase Price. The Purchase Price for the Property shall be paid
at Closing in cash by wire transfer of immediately available federal funds to a
bank account of Escrow Agent designated by Escrow Agent in writing to Purchaser
prior to the Closing ("Escrow Agent's Account"), and, as adjusted by prorations
and adjustments as herein provided, shall be subsequently payable in full at
Closing in cash by wire transfer of immediately available federal funds to a
bank account designated by Seller in writing to Escrow Agent prior to the
Closing.

1.6Earnest Money.

(a)                Within three (3) business days following the Effective Date,
Purchaser shall deposit with Escrow Agent the sum of Six Hundred Fifty Thousand
and No/100s Dollars ($650,000.00) by check or wire transfer of immediately
available funds (the "Earnest Money") in accordance with the wiring instructions
attached hereto as Schedule 1.6(a). The Earnest Money, together with all
interest earned thereon, if any, while such earnest money funds are in escrow
(including, without limitation, in Escrow Agent’s Account) shall collectively be
referred to herein as the “Earnest Money.” The Earnest Money shall be held and
applied as further set forth in this Agreement. Upon Closing, the Earnest Money
will be applied to the Purchase Price on the Closing Date and paid to Seller
through the escrow process outlined herein, or at Purchaser's election, upon
release of the Purchase Price to Seller on the Closing Date, the Earnest Money
shall be returned to Purchaser.

 

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(b)               If Purchaser fails to deliver any portion of the Earnest Money
to the Escrow Agent within the time period specified above, Seller shall have
the right to terminate this Agreement and upon such termination, Purchaser and
Seller shall have no further rights, or obligations hereunder, except those
which expressly survive termination of this Agreement.

(c)                In any event, if Purchaser is entitled to have the Earnest
Money returned to Purchaser pursuant to any provision of this Agreement, One
Hundred and no/100 Dollars ($100.00) of the Earnest Money shall nevertheless be
paid to Seller as good and sufficient consideration for entering into this
Agreement. In addition, Seller acknowledges that Purchaser, in evaluating the
Property and performing its due diligence investigation of the Property, will
devote internal resources and incur expenses, and that such efforts and expenses
of Purchaser also constitute good, valuable and sufficient consideration for
this Agreement.

Article 2
TITLE AND SURVEY

2.1Title Examination; Commitment for Title Insurance. Seller has obtained from
Title Company, at Seller's expense, and delivered to Purchaser the Chicago Title
Insurance Company Title Commitment No. NA01264, and has an effective date of
April 25, 2017 (the "Title Commitment") and covering the Property.

2.2Survey. Purchaser acknowledges that Seller has delivered to Purchaser that
certain existing as-built survey of the Real Property prepared by Pilgreen
Engineering, Inc., dated August 22, 2007 and bearing the seal of Martin Blethen
Alabama Land Surveyor License No.14728. Purchaser has ordered (or will order) an
update of said survey and will request that the update be delivered to Purchaser
no later than five (5) days before the Inspection Date (as defined in Section
3.2 below), which together with said updates or revisions shall constitute the
"Survey" hereunder. For purposes of the Deed to be delivered to Purchase at the
Closing, the legal description of the Property shall be the legal description
attached hereto as Schedule 1.1(a), less and except any right-of-way or other
conveyances previously made by Seller. If, however, the metes and bounds
description drawn from the Survey (or any update thereto) reflects a legal
description different from the legal description attached hereto as Schedule
1.1(a), Seller shall also deliver a quit claim deed, at Closing, containing the
legal description drawn from the Survey (or update thereto).

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2.3Title Objections; Cure of Title Objections.

(a)                Purchaser or its attorneys shall have until that date which
is five (5) days after receipt of the updated Survey, but in no event later than
the Inspection Date (also referred to herein as the "Title Objection Deadline")
to notify Seller and its attorneys, in writing, of such objections as Purchaser
may have to the Title Commitment (including the title exception documents
referred to therein) or Survey, other than the Permitted Exceptions described in
clauses (a) through (d) of Section 2.4. Subject to Section 2.3(d) hereof, any
item contained in the Title Commitment, any matter shown on the Survey or any
document that is of record and properly indexed as of the effective date of such
initial title examination to which Purchaser does not object on or before the
Title Objection Deadline shall be deemed a "Permitted Exception".

(b)               In the event Purchaser shall notify Seller of objections to
title or to matters shown on a Survey on or before the Title Objection Deadline,
Seller shall have the right, but not the obligation, to cure such objections. On
or before the fifth (5th) day following Seller's receipt of Purchaser's notice
of objections, Seller shall notify Purchaser in writing whether Seller elects to
attempt to cure such objections (and Seller's failure to provide such a notice
shall be deemed an election by Seller not to cure any such objection). If Seller
elects to attempt to cure, then Seller shall use commercially reasonable efforts
to attempt to remove, satisfy or cure the same. If Seller elects (or is deemed
to have elected) not to cure any objections specified in Purchaser's notice, or
if Seller notifies Purchaser of Seller's intent to cure any objection and
thereafter Seller fails or is unable to effect a cure prior to Closing (or any
date to which the Closing has been extended), then in either such case Purchaser
shall have the right to elect one, but not both, of the following options, which
election must in each case be made within the time period provided in paragraph
(c) below:

(A)to accept a conveyance of the Property subject to the Permitted Exceptions,
specifically including any matter objected to by Purchaser which Seller is
unwilling or unable to cure, and without reduction of the Purchase Price; or

(B)to terminate this Agreement by sending written notice thereof to Seller, and
upon delivery of such notice of termination, this Agreement shall terminate and
the Earnest Money shall be returned to Purchaser in accordance with Section 1.6
of this Agreement, and thereafter neither party hereto shall have any further
rights, obligations or liabilities hereunder with respect to the Property,
except to the extent that any right, obligation or liability set forth herein
expressly survives termination of this Agreement.

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(c)                If Seller notifies Purchaser that Seller does not intend to
attempt to cure any title objection, or if Seller is deemed to have elected not
to cure any title objections, or if Seller notifies Purchaser of Seller's intent
to cure any objection and Seller later notifies Purchaser that Seller has failed
or will be unable to effect a cure thereof, then in any such case Purchaser
shall, within five (5) days after receiving Seller's notice or the date of
Seller's deemed election, as applicable, notify Seller in writing whether
Purchaser shall elect to accept the conveyance under clause (b)(i) above or to
terminate this Agreement under clause (b)(ii) above (with Purchaser's failure to
provide such a notice deemed an election by Purchaser to accept conveyance under
clause (b)(i) above).

(d)               Notwithstanding anything contained herein to the contrary,
Seller shall be obligated at Closing to discharge (i) all mortgages of Seller
(regardless of whether Purchaser objects to such mortgage), and (ii) all
monetary liens arising by, through or under Seller. The term "mortgage" as used
herein includes any mortgage, deed of trust, deed to secure debt and similar
security instrument securing an indebtedness of Seller and encumbering the
Property or any portion thereof; the terms "discharge" and "discharged" as used
herein include compliance with a statutory bonding procedure that has the legal
effect of removing the mortgage or item as a lien on the Property or otherwise
allows the mortgage or item to be removed from the title exceptions in the Title
Policy (as defined below).

2.4Conveyance of Title. At Closing, Seller shall convey and transfer the
Property to Purchaser. It shall be a condition to Purchaser's obligation to
close this transaction that title to the Real Property conveyed and transferred
to Purchaser shall be such title to the Real Property as will enable the Title
Company to issue to Purchaser an extended coverage American Land Title
Association (ALTA) Form 2006 Owner's Policy of Title Insurance (the "Title
Policy") covering the Real Property, in the full amount of the Purchase Price,
subject to the following matters, which are collectively referred to in this
Agreement as "Permitted Exceptions":

(a)                the rights of residential tenants, as tenants only, without
any right to acquire any portion of the Property, under the Leases described in
the Rent Roll and any new Leases entered into between the Effective Date and
Closing and (if required) approved by Purchaser in accordance with the terms of
this Agreement;

(b)               the lien of all ad valorem real estate taxes and assessments
not yet due and payable as of the date of Closing, subject to adjustment as
herein provided;

(c)                local, state and federal laws, ordinances or governmental
regulations, including but not limited to, building, zoning and land use laws,
ordinances and regulations, now or hereafter in effect relating to the Property;

(d)               Intentionally Deleted.

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(e)                additional items, if any, appearing of record or shown on the
Survey, except to the extent Seller agrees to cure any such matters pursuant to
Section 2.3 or 2.5 hereof; and

(f)                additional items, if any, approved by Purchaser pursuant to
Section 2.6 hereof.

2.5Pre-Closing "Gap" Title/Survey Defects. Whether or not Purchaser shall have
furnished to Seller any notice of title objections pursuant to the foregoing
provisions of this Agreement, Purchaser may, at or prior to Closing, notify
Seller in writing of any objections to title or survey matters having a material
effect on the operation or value of the Property and first raised by the Title
Company or the Surveyor and first arising between (a) the effective date of the
applicable Title Commitment or Survey and (b) the Closing Date; provided,
however, that Purchaser must notify Seller of any such objections within five
(5) business days of Purchaser's first receipt of the updated Title Commitment,
updated survey or other document, whichever first provides notice of the
condition giving rise to any such objection. With respect to any objections to
title or survey matters set forth in such notice, except for objections arising
or resulting from Seller's breach of the covenant contained in Section 2.6
hereof, Seller shall have the same option to cure and Purchaser shall have the
same option to accept title subject to such matters or to terminate this
Agreement as those which apply to any notice of objections made by Purchaser on
or before the Title Objection Deadline.

2.6Seller's Covenant Not to Encumber. Seller agrees that, between the Effective
Date and the Closing Date, Seller will not sell, assign, rent, convey
(absolutely or as security), grant a security interest in, or otherwise encumber
or dispose of, the Property (or any part thereof or estate therein) in any
manner that will survive Closing, except as approved in writing by Purchaser or
as expressly provided in this Agreement. Notwithstanding the foregoing, Seller
shall have the right to (i) continue leasing apartment units in the Property in
the manner described in Section 5.4(b) hereof, (ii) terminate, amend or enter
into service contracts in the manner described in Section 5.4(g) hereof, (iii)
use, deplete, remove or replace items of Tangible Personal Property in the
ordinary course of business, provided any appliances, leasing office and pool
furniture, fitness center equipment and other similar items of equipment or
furniture so removed by Seller are promptly replaced by Seller, at its cost,
with items of comparable value and utility, and (iv) modify or amend the
existing loan on the Property.

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Article 3 

INSPECTION

3.1Right of Inspection.

(a)                Beginning on the date of the Access Agreement (as hereinafter
defined) and continuing thereafter so long as this Agreement remains in full
force and effect, Purchaser and its agents, representatives, contractors and
consultants shall, at Purchaser’s sole cost and expense and upon twenty-four
(24) hours prior telephonic notice to Seller, have the right to make physical
inspections of the Property and to examine at such place or places at the
Property, in the offices of the property manager or elsewhere as the same may be
located, any operating files maintained by Seller or its property manager in
connection with the leasing, maintenance and/or management of the Property,
including, without limitation, the Leases, lease files, service contracts,
bills, invoices, receipts and other general records relating to the income and
expenses of the Property, correspondence, surveys, plans and specifications,
warranties for services and materials provided to the Property and similar
materials, but excluding materials not directly related to the leasing,
maintenance, and/or management of the Property such as Seller's internal
memoranda, financial projections, insurance policies, operating budgets,
appraisals, accounting and tax records and similar proprietary or confidential
information. Seller shall have the right, but not the obligation, to have one of
its representatives accompany Purchaser or its representatives on each such
inspection or examination. To the extent in Seller’s possession, Seller shall
provide Purchaser with the items set forth in Schedule 3.1(a) attached hereto
within three (3) business days after the Effective Date. Seller shall reasonably
cooperate with Purchaser in its inspections and examinations of the Property,
but Seller shall not be obligated to incur any liability, undue time commitment
or expense in connection therewith.

(b)               Purchaser’s inspections of the Property shall not damage the
Property in any respect, shall not be invasive in any respect (including,
without limitation, soil borings, test pits, groundwater testing, or Phase II or
Phase III environmental testing), and shall be conducted in accordance with
standards customarily employed in the industry and in compliance with all
governmental laws, rules and regulations. Following each such entry by the
Purchaser Parties with respect to the Inspections, Purchaser shall promptly
restore, or cause to be restored, the Property to its original condition as
existed immediately prior to any such Inspections. Purchaser shall not have the
right to submit any samples or other materials to any testing laboratory or
similar facility without obtaining the prior written consent of Seller.

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(c)                Except with respect to the gross negligence or willful
misconduct of Seller, its members, and their respective, members, affiliates,
indirect owners (including trusts and plans), trustees, officers, directors,
shareholders, agents and employees Purchaser shall indemnify, hold harmless and
defend Seller, its members, and their respective, members, affiliates, indirect
owners (including trusts and plans), trustees, officers, directors,
shareholders, agents and employees from and against any and all claims, demands,
causes of action, liabilities, losses, costs, damages and expenses (including
reasonable attorneys' fees and expenses and court costs incurred in defending
any such claim or in enforcing this indemnity) of whatsoever nature (for
purposes of this Section 3.1, individually a "Claim" and collectively, "Claims")
that may be incurred by Seller or any other indemnified party and arising out of
or in connection with the acts or omissions of Purchaser and its agents,
representatives, contractors and consultants, or any of them, in connection with
the inspections and examinations of the Property, including but not limited to
Claims arising out of or in connection with personal injury or death of persons,
loss, destruction or damage to property, or liens or claims of lien filed
against the Property. Notwithstanding the foregoing, Purchaser shall have no
liability for pre-existing conditions discovered by any inspection of the Real
Property and not aggravated by Purchaser. This Section 3.1(c) shall survive
Closing or any termination of this Agreement for a period of twenty-four (24)
months.

3.2Right of Termination. Seller agrees that in the event Purchaser determines,
in Purchaser's sole and absolute discretion, that it does not wish to acquire
the Property for any reason or no reason, then Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to Seller
on or before thirty (30) days following the date of that certain Access
Agreement, dated May 11, 2017, between Purchaser and Seller (the "Access
Agreement") pursuant to which Purchaser is permitted access to the Property for
performance of its due diligence investigations (said thirtieth (30th) day being
referred to herein as the "Inspection Date"). Upon any such termination of this
Agreement pursuant to Purchaser's rights under this Section 3.2 the Earnest
Money shall be promptly returned to Purchaser in accordance with Section 1.6
hereof, Seller shall be solely responsible for the cost of the survey updates
commissioned by Purchaser under Section 2.2, and Purchaser and Seller shall have
no further rights and obligations hereunder except those which expressly survive
termination of this Agreement. If Purchaser fails to give Seller timely notice
of termination on or before the Inspection Date, then Purchaser shall no longer
have the right to terminate this Agreement under this Section 3.2 and (subject
to any contrary provisions of this Agreement) shall be bound to proceed to
Closing and consummate the transaction contemplated hereby pursuant to the terms
of this Agreement, and Purchaser shall be solely responsible for the cost of the
survey updates commissioned by Purchaser under Section 2.2 and as more
particularly provided in Section 4.5 below. Time is of the essence with respect
to the provisions of this Section 3.2. The period commencing on the date of the
Access Agreement, and ending on the Inspection Date, is sometimes referred to
herein as the "Inspection Period."

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3.3              Intentionally Omitted.

3.4Confidentiality.

(a)                Purchaser acknowledges that all reports and other information
provided to Purchaser (the “Deliveries”) under this Agreement or separate
arrangement with Seller or Broker are for informational purposes only and shall
not be construed as a representation or warranty on the part of Seller or any
other party regarding the Property. Notwithstanding any provision of this
Agreement, Purchaser shall not have access to, and Seller shall not be obligated
to make available to Purchaser, any confidential, proprietary or privileged
information of Seller related to the Property, such excluded materials to
include Seller’s internal memoranda, financial projections, operating budgets,
appraisals, tax returns and similar proprietary, confidential or privileged
information. Notwithstanding anything in the foregoing to the contrary, Seller
will make available to Purchaser financial statements, operating reports and
rent rolls used in Seller’s ordinary course of business.

(b)               The existence and contents of this Agreement, the negotiations
of parties with respect to the possible sale and purchase of the Property and
any matters disclosed by any Inspections undertaken by Purchaser and the
Purchaser Parties with respect to the Property and any additional information
furnished by Seller to Purchaser from time to time (including, without
limitation, the Deliveries) shall be kept confidential and shall not be
disclosed to any third parties without the consent of both parties hereto,
except for any disclosure that may be required by law to be made to any
applicable governmental or quasi-governmental authorities. No advertisement or
other publicity concerning this transaction shall be made or disseminated by
either party at any time without the review and approval of both parties hereto.
Both parties recognize the need to disclose, and agree to the disclosure of,
certain aspects of this transaction to their respective lenders, investors,
accountants, attorneys and other consultants. Each party agrees to inform their
lender, investors, accountants, attorneys and other consultants of the
confidentiality of this transaction and all such other information.
Notwithstanding the foregoing of this Section 3.4, either of Seller or Purchaser
(or both) may issue a press release describing the transaction if and when the
Property is actually conveyed, provided that any such press release issued by
either party must be reasonably approved in advance by the other party.
Additional confidentiality restrictions may be set forth in a separate
confidentiality agreement between Seller and Purchaser (provided such
restrictions are consistent with this Agreement).

(c)                If this Agreement is terminated, Purchaser shall, within
seven (7) days from the date of such termination, return or cause to be returned
to Seller all Deliveries and, if requested by Seller and upon reimbursement of
Purchaser's actual costs therefor, deliver to Seller copies of all third party
reports, together with such reliance letters and/or assignments as Seller may
reasonably request. The provisions of this Section 3.4 shall survive the
termination of this Agreement for a period of twenty four (24) months.

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ARTICLE 4

CLOSING

4.1Time and Place. The consummation of the transaction as contemplated hereby
("Closing") shall be held at the office of Escrow Agent on or before thirty (30)
calendar days after the Inspection Date, via escrow funds and fully executed
documents. At Closing, Seller and Purchaser shall perform the obligations set
forth in, respectively, Section 4.2 and Section 4.3. The Closing may be held at
such other place or such earlier time and date as Seller and Purchaser shall
mutually approve in writing. The date on which the Closing is scheduled to occur
hereunder (or, if earlier, the date on which Closing occurs) is sometimes
referred to herein as the "Closing Date". The parties will endeavor to
"pre-close" on the business day prior to the Closing Date, so as to allow the
wire transfers of the Purchase Price to occur at the opening of business on the
Closing Date or as promptly thereafter as practical. Notwithstanding any
provision of this Agreement to the contrary, if Seller's existing mortgagee
requires a prior notification period, or the satisfaction of other conditions
precedent, to complete the repayment of Seller's existing mortgage loan on the
Property and release or defeasance of the Property from the effect of the
security instrument(s) currently encumbering the Property, then Seller shall
have the unilateral option to extend the Closing Date up to thirty (30) days by
delivery to Purchaser of not less than ten (10) days' prior written notice of
said requirement; provided that Seller diligently and in good faith pursues said
repayment and release within said thirty (30)-day period.

4.2Seller's Obligations at Closing. At Closing, Seller shall:

(a)                deliver to Purchaser a duly executed limited or special
warranty deed in the form attached hereto as Schedule 4.2(a) and by this
reference made a part hereof, conveying the Real Property to Purchaser subject
to the Permitted Exceptions (the "Deed");

(b)               deliver to Purchaser two counterparts of a bill of sale and
assignment and assumption of leases and service contracts, in the form attached
hereto as Schedule 4.2(b) and by this reference made a part hereof, duly
executed by Seller, pursuant to which (i) Seller shall convey the Tangible
Personal Property and the Intangible Property to Purchaser, and (ii) Seller
shall assign to Purchaser, and Purchaser shall assume from and after the date of
Closing, Seller's interest in and to the Leases and Designated Service
Contracts, as amended or supplemented pursuant to this Agreement (the "Bill of
Sale and Assignment");

(c)                join with Purchaser to execute a notice (the "Tenant Notice")
in the form of Schedule 4.2(c) attached hereto, which Purchaser shall send to
each tenant under each of the Leases informing such tenant of the sale of the
Property and of the assignment to Purchaser of Seller's interest in, and
obligations under, the Leases (including, if applicable any security deposits)
and directing that all rent and other sums payable after the Closing under each
such Lease shall be paid as set forth in the notice;

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(d)               deliver to Purchaser a certificate ("Seller's Closing
Certificate"), dated as of the date of Closing and duly executed by Seller, in
the form of Schedule 4.2(d) attached hereto, stating that the representations
and warranties of Seller contained in Section 5.1 of this Agreement are true and
correct in all material respects as of the date of Closing (with appropriate
modifications to reflect any changes therein or identifying any representation
or warranty which is not, or no longer is, true and correct and explaining the
state of facts giving rise to the change). The inclusion of any change or
exception in such certificate shall not prejudice Purchaser's rights under this
Agreement with respect to the subject matter of such change or exception. The
Seller's Closing Certificate shall include an updated Rent Roll dated no earlier
than two (2) business days prior to the Closing Date as to which Seller shall
make the same representations and warranties, as of the date of such Rent Roll,
as Seller makes under Section 5.1(d) with respect to the Rent Roll attached
hereto;

(e)                deliver to Purchaser such evidence as the Title Company may
reasonably require as to the authority of the person or persons executing
documents on behalf of Seller;

(f)                deliver to Purchaser an affidavit duly executed by Seller
stating that Seller is not a "foreign person" as defined in the Federal Foreign
Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act;

(g)               deliver to the Title Company a title insurance affidavit, if
required by the Title Company, duly executed by Seller or a representative of
Seller, in form and content reasonably satisfactory to Seller and the Title
Company;

(h)               deliver to Purchaser at the place of Closing or at the
Property the Leases together with such leasing and property files and records
which are material in connection with the continued operation, leasing and
maintenance of the Property, all to the extent not previously delivered;

(i)                 deliver to Purchaser possession and occupancy of the
Property, subject to the Permitted Exceptions;

(j)                 deliver a closing statement evidencing the transaction
contemplated by this Agreement and such additional documents as shall be
reasonably requested by the Title Company or required to consummate the
transaction contemplated by this Agreement; provided, however, that in no event
shall Seller be required to indemnify the Title Company, Purchaser, or any other
party pursuant to any such documents, or undertake any other material liability
not expressly contemplated in this Agreement, unless Seller elects to do so in
its sole discretion;

(k)               Seller has complied with the requirements of the bulk transfer
provisions of the Uniform Commercial Code in effect in the state in which the
Property is located, if any;

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(l)                 deliver evidence of termination of the existing property
management agreement; and

(m)             if the legal description attached hereto as Schedule 1.1(a)
differs from the legal description of the Property drawn from the Survey, Seller
shall at Closing deliver (in addition to the Deed) a quit claim deed conveying
the Property pursuant to the legal description drawn from the Survey, which
legal description shall be subject to Seller's approval, which approval shall
not be unreasonably withheld.

4.3Purchaser's Obligations at Closing. At Closing, Purchaser shall:

(a)                deliver to Escrow Agent the full amount of the Purchase Price
as increased or decreased by prorations and adjustments as herein provided,
prior to 2:00 p.m. (Eastern Standard time) on the Closing Date, in immediately
available federal funds wire transferred to Escrow Agent's Account, and deliver
to Escrow Agent instructions to immediately release the full amount of the
Purchase Price, as increased or decreased by prorations and adjustments as
herein provided, to Seller;

(b)               join Seller in execution of all counterparts of the Bill of
Sale and Assignment and the Tenant Notice. In connection with the Tenant Notice,
Purchaser shall deliver to each and every tenant of the Property under a Lease
thereof a signed statement acknowledging Purchaser's receipt and responsibility
for each tenant's security deposit (to the extent credited or delivered by
Seller to Purchaser at Closing), if any, all in compliance with and to the
extent required by the applicable law. The provisions of this sub-section shall
survive Closing;

(c)                deliver to the Title Company as it may reasonably require as
to the authority of the person or persons executing documents on behalf of
Purchaser;

(d)               deliver to Seller a certificate dated as of the date of
Closing and duly executed by Purchaser, (i) reaffirming the provisions of
Article 9 and confirming that such provisions remain and will continue in full
force and effect as of and after the Closing, and (ii) stating that the
representations and warranties of Purchaser contained in Section 5.5 of this
Agreement are true and correct in all material respects as of the date of
Closing; and

(e)                deliver a closing statement evidencing the transaction
contemplated by this Agreement and such additional documents as shall be
reasonably requested by the Title Company or required to consummate the
transaction contemplated by this Agreement, provided, however, that in no event
shall Purchaser be required to indemnify Seller or Title Company or undertake
any other material liability not expressly contemplated in this Agreement,
unless Purchaser elects to do so in its sole discretion.

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4.4Credits and Prorations.

(a)                All income and expenses in connection with the operation of
the Property shall be apportioned, as of 11:59 p.m. (Eastern Standard time) on
the day prior to the Closing Date, as if Purchaser were vested with title to the
Property during the entire Closing Date, such that, except as otherwise
expressly provided to the contrary in this Agreement, Seller shall have the
benefit of income and the burden of expenses for the day preceding the Closing
Date and the Purchaser shall have the benefit of income and the burden of
expenses for the Closing Date and thereafter. Items (1)-(5) below will be
prorated at Closing utilizing the information known at that time. A post-closing
"true-up" shall take place within ninety (90) days of the Closing Date to adjust
the prorations of said items (1), (3), (4) and (5), if necessary, and within a
reasonable time to adjust the proration of said item (2), if necessary. Such
prorated items shall include, without limitation, the following:

(1)               rents, if any, based on the amount collected for the current
month; provided, however, that if the amount of rent collected for the current
month is actually less than the monthly rents generated by operations at the
Property averaged over the immediately preceding twelve (12) calendar months
(the "T-12 Average Monthly Rent"), then the rent amount used in prorating rents
for the month of the Closing shall be the T-12 Average Monthly Rent and not
actual rents collected. For purposes of example only: If (A) the quotient
derived by dividing (i) the sum of all monthly rental collections for the
immediately preceding twelve (12) calendar months, by (ii) twelve (12) (said
quotient being the T-12 Average Monthly Rent), exceeds (B) the amount of rent
actually collected for the month in which the Closing occurs, then the parties
shall use the T-12 Average Monthly Rent as the rent amount prorated for the
month of the Closing. The term "rents" as used in this Agreement includes all
payments due and payable by, or received from, tenants under the Leases other
than refundable deposits, application fees, reimbursement payments, late
charges, pet and cleaning charges and termination payments (which refundable
deposits shall be treated as set forth in Section 4.4(b)(1), but such other
amounts shall be retained by Seller);

(2)               ad valorem taxes and assessments levied against the Property
(including personal property taxes on the Tangible Personal Property), which
shall be prorated as set forth in Section 4.4(b)(2) hereof;

(3)               payments or amounts due under the Designated Service
Contracts. To the extent any rebate, concession or commission payable to Seller
under any Designated Service Contract has accrued before Closing but has not
been paid to Seller, Seller shall receive a credit for such accrued amounts at
Closing; Seller shall retain any lump sum payments, signing bonus or similar
payments received by Seller before Closing;

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(4)               any concessions given to any tenants under the Leases that
Seller agreed were to be provided or delivered to the tenants following the
Closing Date, including, but not limited to, the amount of any rebates, rental
concessions, gift cards, non-monetary concessions (e.g., televisions bicycles,
iPads, etc.), free rent periods, credits or setoffs given to any of the tenants
under the Leases (collectively, the “Concessions”), shall be settled at Closing
by Seller giving Purchaser a credit against the Purchase Price equal to the
actual cost to the landlord of such Concessions.

(5)               gas, electricity, water and other utility charges for which
Seller is liable, if any, such charges to be apportioned at Closing on the basis
of the most recent meter reading occurring prior to Closing or the most recent
utility bill received by Seller, as applicable, including, without limitation,
water charges not yet due and payable to such utility provider at Closing, but
which amounts are customarily billed directly to Seller and reimbursed by
tenants; and

(6)               any other operating expenses or other items pertaining to the
Property which are customarily prorated between a purchaser and a seller in
comparable commercial transactions in the area in which the Property is located.

(b)               Notwithstanding anything contained in the foregoing
provisions:

(1)               At Closing, (A) Seller shall credit to Purchaser the amount of
such unforfeited resident deposits as shown on the Rent Roll, and (B) Purchaser
shall credit to the account of Seller all refundable cash or other deposits
posted with utility companies serving the Property, or, at either party's
option, Purchaser shall contract directly with the utility companies and Seller
shall be entitled to receive and retain such refundable cash and deposits;
provided that Purchaser and Seller will cooperate so that utility service to the
Property is not interrupted. For the purposes of this Section 4.4(b)(1) the term
"unforfeited resident deposits" means any refundable resident deposits which are
held by Seller and which Seller has not applied, and is not entitled to apply,
against delinquent rents, property damage or otherwise in accordance with the
applicable Lease. From and after the Effective Date, Seller will not apply any
tenant deposits unless such tenant has already vacated the Property.

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(2)               Any ad valorem taxes for the current year paid at or prior to
Closing shall be prorated based upon the amounts actually paid for the current
tax year. If all taxes and assessments for the current tax year are not due
prior to the Closing Date, then Seller shall be charged at Closing an amount
equal to that portion of such taxes and assessments which relates to the period
before Closing and Purchaser shall pay the taxes and assessments prior to their
becoming delinquent. Any such apportionment made with respect to a tax year for
which the tax rate or assessed valuation, or both, have not yet been fixed shall
be based upon the tax rate and/or assessed valuation last fixed. To the extent
that the actual taxes and assessments for the current tax year differ from the
amount apportioned at Closing, the parties shall make all necessary adjustments
by appropriate payments between themselves following Closing promptly following
the availability of the final tax bills. For avoidance of doubt, any refunds
generated from appeal of ad valorem taxes for year(s) prior to the current year
shall remain the property of Seller and paid to Seller by Purchaser, if and to
the extent received by Purchaser.

(3)               Gas, electricity, water and other utility charges referred to
in Section 4.4(a)(4) above which are payable by any tenant directly to a third
party shall not be apportioned hereunder, and Purchaser shall accept title
subject to any of such charges which are unpaid and Purchaser shall look solely
to the responsible tenant for the payment of the same.

(4)               If Seller shall have paid any gas, electricity, water or other
utility charges referred to in Section 4.4(a)(4) above directly to a third party
which are reimbursable by tenants, but shall not have been reimbursed therefor
by the time of Closing, then Purchaser shall credit to Seller an amount equal to
all such charges so paid by Seller.

(5)               As to gas, electricity and other utility charges referred to
in Section 4.4(a)(4) above, Seller may on notice to Purchaser elect to pay one
or more of all of such items accrued to the Closing Date directly to the person
or entity entitled thereto, and to the extent Seller so elects and the utility
company agrees to look solely to Seller for payment of any such item accrued
prior to the Closing Date, such item shall not be apportioned hereunder, and
Seller's obligation to pay such item with respect to the period prior to Closing
directly in such case shall survive the Closing.

(6)               Seller shall pay in full all leasing commissions and locators'
and finders' fees, if any, due to leasing or other agents (pursuant to a
contractual arrangement with Seller) for each Lease and Lease renewal entered
into by Seller prior to the Closing Date promptly when due.

(7)               The Tangible Personal Property is included in this sale,
without further charge.

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(8)               Unpaid and delinquent rent collected by Seller and Purchaser
after the date of Closing shall be delivered as follows: (a) if Seller collects
any unpaid or delinquent rent for the Property, Seller shall, within fifteen
(15) days after the receipt thereof, deliver to Purchaser any such rent which
Purchaser is entitled to hereunder relating to the date of Closing and any
period thereafter, and (b) if Purchaser collects any unpaid or delinquent rent
from the Property, Purchaser shall, within fifteen (15) days after the receipt
thereof, deliver to Seller any such rent which Seller is entitled to hereunder
relating to the period prior to the date of Closing. Seller and Purchaser agree
that all rent received by Seller or Purchaser after the Closing shall be applied
first to current rentals and then to delinquent rentals, if any, in inverse
order of maturity. Purchaser will make a good faith effort after Closing to
collect all rents in the usual course of Purchaser's operation of the Property,
but Purchaser will not be obligated to institute any lawsuit or other collection
procedures to collect delinquent rents. Notwithstanding the foregoing, Seller
shall have the sole right to collect rents, if any, which are unpaid or
delinquent as of Closing, from tenants who are no longer in occupancy as of the
Closing (and Purchaser shall promptly deliver any such rents to Seller if
received by Purchaser after Closing).

(9)               Seller shall not grant rent concessions (whether monetary or
non-monetary) to any tenant without the prior written consent of Purchaser.

(10)           The provisions of Sections 4.4(a) and (b) shall survive Closing.

4.5Closing Costs. Seller shall pay (a) the fees of any counsel representing it
in connection with this transaction, (b) the base premium for the Title Policy
in the amount of the Purchase Price and the simultaneous issue charge for any
lender's policy, (c) the costs of curing all title objections for which Seller
is responsible under this Agreement, (d) the costs of recording all mortgage
cancellations; and (e) one-half of any escrow fees charged by the Escrow Agent.
Purchaser shall pay (A) the fees of any counsel representing Purchaser in
connection with this transaction, (B) the fees for recording the Deed, (C) the
premiums for any title insurance endorsements requested by Purchaser or its
lender or title insurance coverage in excess of the Purchase Price, (D) the cost
of Purchaser's inspections of the Property, (E) the cost to update the Survey as
provided in Section 2.2 hereof and the cost of any revisions to the Survey
necessary to comply with the requirements of Purchaser's lender, (F) all
applicable transfer taxes, documentary stamp taxes and similar charges relating
to transfer of the Property, and (G) one-half of any escrow fees charged by the
Escrow Agent. All other costs and expenses incident to this transaction and the
closing thereof shall be paid by the party incurring same.

4.6Conditions Precedent to Obligation of Purchaser. The obligation of Purchaser
to consummate the transaction hereunder shall be subject to the fulfillment on
or before the date of Closing (or such earlier time as otherwise required
hereby) of all of the following conditions, any or all of which may be waived by
Purchaser in its sole discretion:

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(a)                Seller shall have delivered to Escrow Agent all of the items
required to be delivered by Seller pursuant to the terms of Section 4.2 of this
Agreement.

(b)               All of the representations and warranties of Seller contained
in this Agreement shall be true and correct in all material respects as of the
date of Closing (with appropriate modifications permitted under this Agreement
or not adverse to Purchaser).

(c)                Seller shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed and
observed by Seller as of the date of Closing.

(d)               The Title Company is ready, willing and able to issue the
Title Policy.

In the event any of the foregoing conditions has not been satisfied by the
Closing Date, Purchaser shall have the right to terminate this Agreement by
written notice given to Seller on the Closing Date, whereupon Escrow Agent shall
promptly refund the Earnest Money to Purchaser and the parties shall have no
further rights, duties or obligations hereunder, other than those which are
expressly provided herein to survive the termination of this Agreement;
provided, however, that if any of the foregoing conditions has not been
satisfied due to a default by Purchaser or Seller hereunder, then Purchaser's
and Seller's respective rights, remedies and obligations shall instead be
determined in accordance with Article 6.

4.7Conditions Precedent to Obligation of Seller. The obligation of Seller to
consummate the transaction hereunder shall be subject to the fulfillment on or
before the date of Closing of all of the following conditions, any or all of
which may be waived by Seller in its sole discretion:

(a)                Seller shall have received the Purchase Price as adjusted
pursuant to and payable in the manner provided for in this Agreement.

(b)               Purchaser shall have delivered to Escrow Agent all of the
items required to be delivered by Purchaser pursuant to the terms of Section 4.3
of this Agreement.

(c)                All of the representations and warranties of Purchaser
contained in this Agreement shall be true and correct in all material respects
as of the date of Closing (with appropriate modifications permitted under this
Agreement).

(d)               Purchaser shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed and
observed by Purchaser as of the date of Closing.

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(e)                As of the Closing Date, (i) Seller shall not be in default
beyond any applicable notice and/or cure period under any Lease and/or any
material agreement that would be binding on Purchaser or the Property following
Closing, and (ii) there shall not be any threatened (in writing) or pending
material litigation against Seller and/or the Property. For purposes of this
subsection (e), the term "material" shall refer to a default under a Lease or
material agreement or litigation claim the underlying basis for which (i) exists
on the Closing Date, and (ii) in the aggregate when finally adjudicated against
Seller, would result in liability for the alleged default, breach or claim in
excess of One Hundred Thousand Dollars ($100,000), excluding any attorneys' fees
awards, consequential or punitive damages.

In the event any of the foregoing conditions has not been satisfied by the
Closing Date, Seller shall have the right to terminate this Agreement by written
notice given to Purchaser on the Closing Date, whereupon Escrow Agent shall
promptly refund the Earnest Money to Purchaser and the parties shall have no
further rights, duties or obligations hereunder, other than those which are
expressly provided herein to survive a termination of this Agreement; provided,
however, if any of the foregoing conditions has not been satisfied due to a
default by Purchaser or Seller hereunder, then Purchaser's and Seller's
respective rights, remedies and obligations shall instead be determined in
accordance with Article 6.

4.8Seller's Tax Deferred Exchange. Seller may convey the Property as part of a
tax deferred exchange for the benefit of Seller pursuant to Section 1031 of the
Internal Revenue Code. With respect thereto, Seller may assign all of Seller's
contract rights and obligations hereunder to an exchange accommodation
titleholder or a qualified intermediary, as part of, and in furtherance of, such
tax deferred exchange. Purchaser agrees to assist and cooperate in such exchange
for the benefit of Seller at no cost, expense or liability to Purchaser and
without reduction or alteration of the rights of Purchaser under this Agreement
and with respect to Seller; and Purchaser further agrees to execute any and all
documents (subject to the reasonable approval of Purchaser's legal counsel) as
are reasonably necessary in connection with such exchange at Seller's sole
expense provided that Purchaser shall not be required to undertake any material
liability or obligation in so doing and provided that such exchange does not
extend the Closing Date. As part of such exchange, Seller shall convey the
Property directly to Purchaser and Purchaser shall not be obligated to acquire
or convey any other property as part of such exchange. Seller shall indemnify,
hold harmless and defend Purchaser from and against any and all claims, demands,
causes of action, liabilities, losses, costs, damages and expenses (including
reasonable attorneys' fees and expenses and court costs incurred in defending
any such claim or in enforcing this indemnity) that may be incurred by Purchaser
and arising out of Purchaser's participation in such exchange for the benefit of
Seller, which obligation shall survive the Closing. Notwithstanding the
foregoing, should Seller fail to effect a tax deferred exchange as contemplated
in this Section 4.8 for any reason, then the sale by Seller of the Property
shall be consummated in accordance with terms and conditions of this Agreement
just as though the provisions of this Section 4.8 had been omitted from this
Agreement, except that Purchaser shall be reimbursed and indemnified from
resulting costs and expenses as provided in this Section 4.8. Nothing contained
in this Section 4.8 shall release Seller of any of its obligations or
liabilities under this Agreement, whether accruing before, at or after Closing,
nor shall anything contained in this Section 4.8 impose any liability or
obligation on Purchaser with respect to the tax consequences of this transaction
to Seller.

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4.9Purchaser's Tax Deferred Exchange. Purchaser may acquire the Property as part
of a tax deferred exchange for the benefit of Purchaser pursuant to Section 1031
of the Internal Revenue Code. With respect thereto, Purchaser may assign all of
Purchaser's contract rights and obligations hereunder to an exchange
accommodation titleholder or a qualified intermediary, as part of, and in
furtherance of, such tax deferred exchange. Seller agrees to assist and
cooperate in such exchange for the benefit of Purchaser at no cost, expense or
liability to Seller and without reduction or alteration of the rights of Seller
under this Agreement and with respect to Purchaser; and Seller further agrees to
execute any and all documents (subject to the reasonable approval of Seller's
legal counsel) as are reasonably necessary in connection with such exchange at
Purchaser's sole expense provided that Seller shall not be required to undertake
any material liability or obligation in so doing and provided that such exchange
does not extend the Closing Date. As part of such exchange, Seller shall convey
the Property directly to Purchaser and Seller shall not be obligated to acquire
or convey any other property as part of such exchange. Purchaser shall
indemnify, hold harmless and defend Seller from and against any and all claims,
demands, causes of action, liabilities, losses, costs, damages and expenses
(including reasonable attorneys' fees and expenses and court costs incurred in
defending any such claim or in enforcing this indemnity) that may be incurred by
Seller and arising out of Seller's participation in such exchange for the
benefit of Purchaser. Notwithstanding the foregoing, should Purchaser fail to
effect a tax deferred exchange as contemplated in this Section 4.9 for any
reason, then the purchase by Purchaser of the Property shall be consummated in
accordance with terms and conditions of this Agreement just as though the
provisions of this Section 4.9 had been omitted from this Agreement, except that
Seller shall be reimbursed and indemnified from resulting costs and expenses as
provided in this Section 4.9. Nothing contained in this Section 4.9 shall
release Purchaser of any of its obligations or liabilities under this Agreement,
whether arising before, at or after Closing, nor shall anything contained in
this Section 4.9 impose any liability or obligation on Seller with respect to
the tax consequences of this transaction to Purchaser.

 

Article 5 

REPRESENTATIONS, WARRANTIES AND COVENANTS

5.1Representations and Warranties of Seller. The Seller makes the following
representations and warranties to Purchaser as of the Effective Date. Such
representations and warranties are subject to (i) those matters, if any,
disclosed in Seller's disclosure statement attached hereto as Schedule 5.1 and
made a part hereof by this reference ("Seller's Disclosure Statement") and (ii)
the Permitted Exceptions.

(a)                Organization and Authority. The Seller has been duly
organized and is validly existing and in good standing under the laws of the
State of Delaware and is duly qualified to transact business in the State where
the Property is located. Seller has the full right and authority to enter into
this Agreement and to transfer the Property pursuant hereto and to consummate or
cause to be consummated the transactions contemplated herein. The person signing
this Agreement on behalf of Seller is authorized to do so. Neither the execution
and delivery of this Agreement nor any other

25 

 

documents executed and delivered, or to be executed and delivered, by Seller in
connection with the transactions described herein, will violate any provision of
Seller's organizational documents or of any agreements, regulations, or laws to
or by which Seller is bound. This Agreement has been, and each document to be
executed and delivered by Seller at Closing shall have been as of Closing, duly
authorized, executed and delivered by Seller, is a valid and binding obligation
of Seller and is enforceable against Seller in accordance with its terms subject
to (i) applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws affecting the rights of creditors generally; and (ii) the exercise of
judicial discretion in accordance with general principles of equity.

(b)               Consents. Seller has obtained all consents and permissions (if
any) related to the transactions herein contemplated and required under any
covenant, agreement, encumbrance, law or regulation by which Seller or the
Property is bound.

(c)                Pending Actions. Except as set forth on Schedule 5.1, Seller
has not received written notice of any action, suit, arbitration, administrative
or judicial proceeding, or unsatisfied order or judgment against Seller which
pertains directly to the Property or the transaction contemplated by this
Agreement, which in either case, if adversely determined, would have a material
adverse effect on the use, operation, or the value of the Property.

(d)               Leases and Rent Roll. Seller is the lessor or landlord under
the Leases. The Rent Roll attached as Schedule 1.1(e) is, and each rent roll
hereafter delivered by Seller to Purchaser shall be the rent roll maintained by
Seller and relied on by Seller for internal administration and accounting
purposes, which to Seller's knowledge is accurate in all material respects.
Notwithstanding anything to the contrary contained in this Agreement, Seller
does not represent or warrant that any particular Lease will be in force or
effect at Closing or that the tenants under the Leases will have performed their
obligations thereunder. The termination of any Lease prior to Closing by reason
of the tenant's default or for any other reason not constituting a default by
Seller under this Agreement shall not affect the obligations of Purchaser under
this Agreement in any manner or entitle Purchaser to an abatement of or credit
against the Purchase Price or give rise to any other claim on the part of
Purchaser. This representation shall be applicable to any updated rent roll
delivered by Seller to Purchaser as of the date thereon. Except as required to
be paid by Seller prior to Closing, there are no leasing or other commissions
due, nor will any become due, in connection with any Lease, and no understanding
or agreement with any party exists as to payment of any leasing commissions or
fees regarding future leases or as to the procuring of tenants.

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(e)                Condemnation. Seller has not received written notice of any
pending condemnation proceedings relating to the Property.

(f)                Insurance. Seller has not received prior to the Effective
Date any written notice from Seller's current insurance carrier of any defects
or inadequacies in or on the Property or any part or component thereof that
would materially and adversely affect the insurability of the Property or cause
any material increase in the premiums for insurance for the Property, that have
not been cured or repaired.

(g)               Environmental Matters. (i) Seller has received no written
notice from any governmental authority asserting any violation of Environmental
Laws (as defined herein) related to the Property which has not been cured or
corrected as of the Effective Date, (ii) other than as disclosed within the
environmental reports previously delivered to Purchaser, Seller has not
manufactured, introduced, released or discharged from or onto the Property any
Hazardous Materials or any toxic wastes, substances or materials (including,
without limitation, asbestos) in violation of any environmental laws, and Seller
has not used the Property for the generation, treatment, storage, handling or
disposal of any Hazardous Materials in violation of any environmental laws, and
(iii) other than the environmental reports previously delivered to Purchaser,
Seller has not commissioned any study relating to the presence or absence of
Hazardous Materials (as defined herein) on the Property. The term "Environmental
Laws" includes without limitation the Resource Conservation and Recovery Act and
the Comprehensive Environmental Response, Compensation, and Liability Act and
other federal laws governing the environment as in effect on the date of this
Agreement together with their implementing regulations as of the date of this
Agreement applicable to the Property, and all applicable state, regional,
county, municipal and other local laws, regulations and ordinances that are
equivalent or similar to the federal laws recited above or that purport to
regulate hazardous or toxic substances and materials. The term "Hazardous
Materials" includes petroleum (including crude oil or any fraction thereof),
mold and any substance, material, waste, pollutant or contaminant listed or
defined as hazardous or toxic under any Environmental Laws, in any case at
levels or concentrations requiring monitoring, reporting, remediation or removal
in accordance with Environmental Laws.

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(h)               Service Contracts. There are no material service, supply,
equipment rental or similar agreements (each a "Service Contract" and
collectively "Service Contracts") to which Seller is a party affecting the
Property other than those set forth in Schedule 5.7(b) and to the extent the
same are in Seller's possession, those Service Contracts which have been
delivered by Seller to Purchaser are true, correct and complete in all material
respects and include any material amendments or modifications thereto. To
Seller's knowledge, Seller is not in default with respect to its obligations or
liabilities under any of the Service Contracts where the failure to cure such
default would have a Material Adverse Effect. "Material Adverse Effect" means,
with respect to any fact or circumstance, that such fact or circumstance would
individually or in the aggregate have a material adverse effect on title to the
Property or any portion thereof, on Seller's ability to consummate the
transaction contemplated herein, or on the value or operation of the Property.

(i)                 Employees. Seller has no employees which Purchaser shall be
obligated to employ following the Closing.

(j)                 Operating Statements. The operating statements for the
Property delivered to Purchaser are the operating statements maintained by
Seller and relied on by Seller for internal administration and accounting
purposes; provided, however, that Seller does not and will not represent or
warrant that Purchaser will be able to, or should be able to, operate the
Property according to and with similar results as shown in such operating
statements.

(k)               Compliance with Law. Seller has not received written notice
from any governmental authority that the Property is not in material compliance
with applicable laws, ordinances and regulations.

(l)                 Soil Conditions. To the knowledge of Seller, there are no
soil conditions existing on or about the Land which could cause instability,
susceptibility to landslides or the need for undershoring or affect the
stability and/or integrity of the Land or Improvements.

5.2Knowledge Defined. References to the "knowledge" of Seller shall refer only
to the actual knowledge, without investigation or inquiry, on the Effective Date
of the Designated Representatives (as hereinafter defined) of Seller, and shall
not be construed, by imputation or otherwise, to refer to the knowledge of any
property manager or broker, or to any other officer, agent, manager,
representative or employee of Seller or any affiliate of Seller, or to impose
upon such Designated Representatives any duty to investigate the matter to which
such actual knowledge, or the absence thereof, pertains. As used herein, the
term "Designated Representatives" shall refer to the following persons: (i)
Thomas H. Flournoy and (ii) Flournoy Properties' regional property manager. In
no event shall Purchaser have any personal claim against the above-named
individuals as a result of the reference thereto in this Section 5.2 and
Purchaser waives and releases all such claims which Purchaser now has or may
later acquire against them in connection with the transactions contemplated in
this Agreement.

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5.3Survival of Seller's Representations and Warranties. The representations and
warranties of Seller set forth in Section 5.1, as updated by Seller's Closing
Certificate, shall survive Closing for a period of nine (9) months after
Closing. Except with respect to fraudulent misrepresentation for which the
Agreement is terminated under Section 6.2, in which event Section 6.2 shall
apply, no claim for a breach of any representation or warranty of Seller shall
be actionable or payable (a) if the breach in question results from or is based
on a condition, state of facts or other matter which was known to Purchaser
prior to Closing, (b) unless the valid claims for all such breaches collectively
aggregate Ten Thousand and No/100 Dollars ($10,000.00) or more, in which event
the full amount of such valid claims shall be actionable, up to but not
exceeding the amount of the Cap (as defined below), and (c) unless written
notice containing a description of the specific nature of such breach shall have
been given by Purchaser to Seller prior to the expiration of said nine (9) month
period and an action shall have been commenced by Purchaser against Seller
within eleven (11) months after Closing. In the event of any breach by Seller of
its representations and warranties contained herein which Purchaser first
discovers after Closing and provides timely notice as aforesaid, Seller shall
indemnify and hold Purchaser harmless from and against any and all loss, damage,
cost or expense resulting therefrom up to but not exceeding the Cap. Seller
shall not be liable to Purchaser to the extent Purchaser's claim is or can be
satisfied from any insurance policy, Service Contract or Lease and Purchaser
agrees to first seek reimbursement of any claims from said insurance policy,
Service Contract or Lease prior to seeking indemnification from the Seller. As
used herein, the term "Cap" shall mean the total aggregate amount equal to Three
Hundred Fifty Thousand and No/100 Dollars ($350,000.000). In no event shall
Seller's aggregate liability to Purchaser for any and all breaches of any
representation or warranty of Seller in this Agreement or Seller's Closing
Certificate exceed the amount of the Cap, and Purchaser hereby waives and
disclaims any right to damages or compensation for any and all such breaches in
excess of the Cap.

5.4Covenants of Seller. Seller hereby covenants with Purchaser, from the
Effective Date until the Closing or earlier termination of this Agreement, as
follows:

(a)                Operation of Property. Seller shall operate and maintain the
Property in a manner generally consistent with the manner in which Seller has
operated and maintained the Property prior to the date hereof.

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(b)               Execution of New Leases and Renewals. Seller shall use
reasonable efforts to negotiate new leases for unrented apartment units in the
Improvements and/or Lease renewals for rented apartment units in the
Improvements and shall maintain an advertising and marketing program for
apartment units in the Improvements consistent with Seller's past practices at
the Property. Except for amendments or leases entered into pursuant to renewal
notices mailed prior to the execution of this Agreement, unless Purchaser agrees
otherwise in writing, any new leases or renewals of existing leases for such
apartment units entered into by Seller after the Effective Date until the
Closing or earlier termination of this Agreement shall be on Seller's standard
apartment lease form for the Property, and shall be for terms of no less than
six (6) months and no more than fifteen (15) months. In all cases, Seller shall
retain the discretion to set rent rates, concessions and other terms of
occupancy, provided that Seller shall only enter into new leases or renewals in
the ordinary course of business taking into account Seller's then-current good
faith evaluation of market conditions. Each such new lease or renewal entered
into by Seller shall constitute a "Lease" for purposes of this Agreement.

(c)                Maintenance of Insurance. Seller shall keep the Improvements
insured against loss or damage (including rental loss) by fire and all risks
covered by the Seller's insurance that is currently in force, provided that
Seller may make adjustments in Seller's insurance coverage for the Property
which are consistent with Seller's general insurance program for Seller's other
apartment properties as in effect from time to time.

(d)               Enforcement of Existing Leases. Seller shall perform the
landlord's material obligations to the tenants under the Leases and enforce the
material obligations of the tenants under the Leases, in each case in accordance
with the current management standards of Seller for its apartment properties.

(e)                Preparation of Vacant Units for Lease. Seller shall place
apartment units that are now vacant or that become vacant into rent-ready
condition on or before the Closing Date in accordance with Seller's current
management standards for its apartment properties as though no sale of the
Property were contemplated or, at Seller's option, provide Purchaser a credit at
Closing equal to Seven Hundred Fifty and no/100 Dollars ($750.00) per unit for
the apartment units that are not in rent-ready condition on the Closing Date;
provided, however, that with respect to apartment units vacated during the five
(5) day period ending on the Closing Date, Seller shall have no obligation
either to put such units into rent-ready condition or to give Purchaser a credit
for the cost of doing so.

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(f)                Removal and Replacement of Tangible Personal Property. Seller
shall not remove any Tangible Personal Property except as may be required for
necessary repair or replacement (which repair and replacement shall be of equal
quality and quantity as existed as of the time of the removal), or otherwise in
accordance with current inventory and management standards of Seller for its
apartment properties, provided that any appliances, leasing office furniture,
pool furniture, fitness center equipment, or other similar items of equipment so
removed by Seller are promptly replaced by Seller, at its cost, with items of
comparable value and utility.

(g)               Execution of New Contracts. Seller shall not, without
Purchaser's prior written consent in each instance (which consent may be
withheld in Purchaser's sole discretion), materially amend or terminate any of
the Designated Service Contracts, or enter into any contract or agreement that
will be an obligation affecting the Property or binding on Purchaser after the
Closing, except that (i) Seller may enter into, amend or enforce (including
enforcement by termination) Service Contracts in the ordinary course of business
as reasonably necessary for the continued operation and maintenance of the
Property, provided any new Service Contracts are terminable without cause or
penalty on thirty (30) days' notice, and (ii) Seller may conduct leasing
activity as provided in Section 5.4(b) hereof.

(h)               Maintenance of Permits. Seller shall make commercially
reasonable efforts to maintain in existence all licenses, permits and approvals
that are now in existence with respect to, and are required for, the ownership,
operation or improvement of the Property, and are of a continuing nature.

(i)                 Management Contracts. As of Closing the property management
contract pertaining to the Property shall have been terminated.

5.5Representations and Warranties of Purchaser. Purchaser hereby makes the
following representations and warranties to Seller as of the Effective Date:

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(a)                Organization and Authority. Purchaser has been duly organized
and is validly existing as a corporation under the laws of the State of
Illinois. Purchaser has the full right and authority to enter into this
Agreement and to purchase the Property pursuant hereto and to consummate or
cause to be consummated the transactions contemplated herein. The person signing
this Agreement on behalf of Purchaser is authorized to do so. Neither the
execution and delivery of this Agreement nor any other documents executed and
delivered, or to be executed and delivered, by Purchaser in connection with the
transactions described herein, will violate any provision of Purchaser's
organizational documents or of any agreements, regulations, or laws to or by
which Purchaser is bound. This Agreement has been duly authorized, executed and
delivered by Purchaser, is a valid and binding obligation of Purchaser and is
enforceable against Purchaser in accordance with its terms subject to (i)
applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
affecting the rights of creditors generally; and (ii) the exercise of judicial
discretion in accordance with general principles of equity.

(b)               Consents. Purchaser has obtained all consents and permissions
(if any) related to the transactions herein contemplated and required under any
covenant, agreement, encumbrance, law or regulation by which Purchaser is bound.

(c)                Pending Actions. To Purchaser's knowledge, there is no
action, suit, arbitration, administrative or judicial administrative proceeding,
or unsatisfied order or judgment pending or threatened against Purchaser or the
transaction contemplated by this Agreement, which, if adversely determined,
could individually or in the aggregate have a material adverse effect on
Purchaser's ability to consummate the transaction contemplated herein.

(d)               ERISA. Purchaser is not (i) an "employee benefit plan" within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), (ii) a "governmental plan" under Section 3(32) of
ERISA, (iii) any plan described in Section 4975 of the Internal Revenue Code, or
(iv) an entity whose underlying assets include "plan assets" by reason of the
application of the ERISA "plan assets" regulation (29 C.F.R. 2510.3-101).

(e)                Patriot Act and Related Matters. Purchaser hereby represents,
warrants, covenants and agrees, as of the date hereof and as of the Closing
Date, as follows:

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(A)                        Purchaser is familiar with the source of funds for
the purchase price of the Property and represents that all such funds are and
will be derived from legitimate business activities within the United States of
America and/or from loans from a banking or financial institution chartered or
organized within the United States of America. To the extent Seller is required
to obtain such information in order to comply with applicable law, regulation or
official government request, and to the extent providing such information does
not violate applicable law, regulation or official government request, Purchaser
agrees to provide to Seller such documents, certifications or other evidence as
may be reasonably requested from time to time by Seller, confirming the source
of funds for the Purchase Price (and that such funds derived from legitimate
business activities).

(B)                        Purchaser has been in compliance in all material
respects for the last five years and will continue to be in compliance in all
material respects through the Closing Date with (a) the PATRIOT Act, Pub. L. No.
107-56, the Bank Secrecy Act, 31 U.S.C. § 5311 et seq., the Money Laundering
Control Act of 1986, and laws relating to the prevention and detection of money
laundering in 18 U.S.C. §§ 1956 and 1957; (b) the Export Administration Act (50
U.S.C. §§ 2401-2420), the International Emergency Economic Powers Act (50 U.S.C.
§ 1701, et seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994), the
Trading With The Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9;
(c) the Foreign Asset Control Regulations contained in 31 C.F.R., Subtitle B,
Chapter V; and (d) any other civil or criminal federal or state laws,
regulations, or orders of similar import.

(C)                        None of the Purchaser Parties (as defined below) is
now or shall be at any time until the Closing Date be a person who has been
listed on (a) the Specially Designated Nationals and Blocked Persons List
contained in Appendix A to 31 C.F.R., Subtitle B, Part V; (b) the Denied Persons
List, the Entity List, and the Unverified Parties List maintained by the United
States Department of Commerce; (c) the List of Terrorists and List of Debarred
Parties maintained by the United States Department of State; and (d) any other
similar list maintained by any federal or state agency or pursuant to any
Executive Order of the President of the United States of America. "Purchaser
Parties" means, collectively, (A) Purchaser, (B) its executive officers,
directors, managers, agents and employees, (C) its shareholders, members,
partners, and other investors, or any other person that owns or controls
Purchaser, and (D) any entity on whose behalf Purchaser acts.

5.6Survival of Purchaser's Representations and Warranties. The representations
and warranties of Purchaser set forth in Section 5.5 shall survive Closing for a
period of six (6) months after Closing provided, however, that Purchaser's
representations in Section 5.5(f) shall survive for the applicable statute of
limitations.

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5.7Covenants of Purchaser.

(a)                EXCEPT FOR CLAIMS BASED ON FRAUD AND/OR A BREACH BY SELLER OF
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 5.1(g), PURCHASER
IRREVOCABLY WAIVES ANY CLAIM AGAINST SELLER ARISING FROM THE PRESENCE OF
HAZARDOUS MATERIALS OR MOLD OR ANY MOLD CONDITION ON THE PROPERTY OR THE BREACH
OF ENVIRONMENTAL LAWS WITH RESPECT TO THE PROPERTY. "Mold" means mold, mildew,
fungus or other potentially dangerous organisms. "Mold Condition" means the
presence or suspected presence of Mold or any condition(s) that reasonably can
be expected to give rise to or indicate the presence of Mold, including observed
or suspected instances of water damage or intrusion, the presence of wet or damp
wood, cellulose wallboard, floor coverings or other materials, inappropriate
climate control, discoloration of walls, ceilings or floors, complaints of
respiratory ailment or eye irritation by residents, employees or any other
occupants or invitees in the Property, or any notice form a governmental agency
of complaints regarding the indoor air quality at the Property.

(b)               "Designated Service Contracts" means (i) those certain Service
Contracts which are assignable in accordance with their terms which Purchaser
identifies by written notice delivered to Seller on or before the Inspection
Date as the Service Contracts Purchaser elects Seller to assign to Purchaser at
Closing, (ii) those assignable Service Contracts regarding which Purchaser has
failed to deliver such written notice on or before the Inspection Date, and
(iii) those Service Contracts (the “Must Take Service Contracts”) attached
hereto as Schedule 5.7(b) which are assignable in accordance with their terms
and which may not be terminated without cause or penalty, with thirty (30) days
(or less) written notice. Purchaser hereby covenants with Seller that on or
before the Inspection Date, Purchaser shall deliver written notice to Seller
instructing which of the assignable Service Contracts Purchaser desires for
Seller to assign to Purchaser and which it does not. If Purchaser fails to
timely deliver such notice, Purchaser shall be deemed to have chosen to have all
assignable Service Contracts assigned to Purchaser, and all such Service
Contracts shall be deemed part of the “Designated Service Contracts.” If
Purchaser charges any vendor approval fees that would otherwise be payable by a
service provider in connection with the assignment of any Service Contracts,
Purchaser agrees to waive and release such fees. At Closing, Seller will cause
the Service Contracts which Purchaser has elected not to have assigned to
Purchaser (other than the Must Take Service Contracts), by operation of the
aforesaid notice on or before the Inspection Date, to be terminated at Seller’s
expense, such termination to be effective within the time period provided for in
the applicable Service Contract (or if no such time period is provided, as
promptly as practicable after the Closing Date). The provisions of this Section
5.7(b) shall survive Closing.

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5.8Special Provisions Concerning Condominium Conversion.

(a)                If Purchaser or any affiliate of Purchaser shall elect to
conduct a program of sales of condominium units within the Property, or
otherwise to convert all or any part of a Property to the condominium form of
ownership at any time during the ten (10) year period following issuance of the
Certificate of Occupancy for the Property (i.e., April 2010), such party shall
provide Seller with copies of the proposed condominium documentation in advance
of submission to any governmental agency with jurisdiction over such sales
program, or in advance of any recordation of any such documentation in the real
property records. The proposed condominium documentation shall reflect a
"Developer" or "Declarant" (or similar party) other than Seller or any affiliate
of Seller and, except as may otherwise be required by law, shall contain no
terms or provisions which would permit a proposed unit purchaser to learn that
Seller or any affiliate of Seller was involved in or connected with the Property
or the proposed condominium in any manner.

(b)               Purchaser agrees that, at all times from and after Closing, it
will indemnify, hold harmless and defend Seller and its affiliates, and their
respective officers, partners, members, directors, employees and agents (herein
collectively called the "Indemnified Parties") from and against any and all
liabilities, damages, losses, costs and expenses (including attorneys' fees and
expenses), which any of the Indemnified Parties may suffer, incur or be
obligated to perform as a result of Purchaser's, or any of its affiliates', and
only Purchaser or one of its affiliates, converting the form of ownership of all
or any part of the Property to a condominium form of ownership and/or selling
residential condominium units within the Property (hereinafter collectively
called the "Condo Claims"). The foregoing indemnity with respect to the Condo
Claims shall be in effect regardless of whether the Condo Claims result from
actions of condominium unit owners, condominium unit purchasers or condominium
or property owners' association and regardless of whether such Condo Claims
relate to the construction of the Property or any other matter, nature or thing,
whatsoever. In the event Purchaser receives notice or otherwise becomes aware
(while having an ownership interest in the Property) of a claim by any unit
owner, unit purchasers, or condominium or property owner's association and/or
any other person or entity, whether such claim relates to the construction of
the Property or any other matter, nature or thing, whatsoever, Purchaser agrees
to take any and all actions which are reasonably necessary to prevent any claims
from being brought against any of the Indemnified Parties.

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(c)                Prior to Closing, Purchaser shall not undertake or commence
any sales or marketing activities regarding the conversion of all or any part of
the Property to a condominium form of ownership or the marketing or sale of
condominium units therein, including, without limitation, the submittal or
recordation of any documentation regarding the conversion of the Property to a
condominium form of ownership or the marketing or sale of condominium units
therein. Additionally, and not by way of limitation, prior to Closing, neither
Purchaser nor any affiliate of Purchaser, nor any of their respective partners,
members, officers, directors, shareholders, agents or representatives, shall
communicate any information about or concerning the future or potential
conversion of all or any part of the Property to a condominium form of
ownership, or the sale or marketing of any condominium units therein, to any
existing or potential tenant or occupant of Seller or the Property.
Notwithstanding the foregoing provisions or anything contained in this Agreement
to the contrary, Purchaser shall be permitted to inspect or review any or all
records of any federal, state or local governmental authority, and shall be
permitted to make such inquiries of and obtain such documentation and
information related to the Property from any federal, state or local
governmental authorities to be able to confirm the compliance and the condition
of the Property with respect to all governmental requirements and Purchaser's
ability to convert the Property to condominium use; provided, however, that this
Section 5.8 does not permit the disclosure of any information concerning the
potential conversion of the Property to a condominium form of ownership to any
tenant or occupant of the Property or potential purchasers of condominium units
prior to Closing.

(d)               This Section 5.8 shall survive the termination, cancellation,
rescission or consummation of this Agreement.

Article 6
DEFAULT

6.1Default by Purchaser. If the sale of the Property as contemplated hereunder
is not consummated due to Purchaser's default hereunder, then Seller shall be
entitled, as its sole and exclusive remedy for such default, to terminate this
Agreement and receive the Earnest Money as liquidated damages for the breach of
this Agreement and not as a penalty, it being agreed between the parties hereto
that the actual damages to Seller in the event of such breach are impractical to
ascertain and the amount of the Earnest Money is a reasonable estimate thereof,
Seller hereby expressly waiving and relinquishing any and all other remedies at
law or in equity. Seller's right to receive the Earnest Money is intended not as
a penalty, but as full liquidated damages. The right to receive the Earnest
Money as full liquidated damages is Seller's sole and exclusive remedy in the
event of default hereunder by Purchaser, and Seller hereby waives and releases
any right to (and hereby covenants that it shall not) sue Purchaser: (a) for
specific performance of this Agreement, or (b) to recover any damages of any
nature or description other than or in excess of the Earnest Money. Purchaser
hereby waives and releases any right to (and hereby covenants that it shall not)
sue Seller or seek or claim a refund of the Earnest Money (or any part thereof)
on the grounds it is unreasonable in amount and exceeds Seller's actual damages
or that its retention by Seller constitutes a penalty and not agreed upon and
reasonable liquidated damages. This Section 6.1 is subject to Section 6.4
hereof.

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6.2Default by Seller. If the sale of the Property as contemplated hereunder is
not consummated due to Seller's default hereunder, then Purchaser shall be
entitled, as its sole remedy for such default, either (a) to receive the return
of the Earnest Money, which return shall operate to terminate this Agreement and
release Seller from any and all liability hereunder, and Seller shall reimburse
Purchaser for its actual third party costs incurred in connection with this
Agreement, not to exceed One Hundred Thousand and 00/100 Dollars ($100,000.00),
(b) to seek specific performance of Seller's obligation to execute and deliver
the documents required to convey said Property to Purchaser, it being understood
and agreed that the remedy of specific performance shall not be available to
enforce any other obligation of Seller hereunder, or (c) solely to the extent
that specific performance is not available to Purchaser due to (x) Seller’s
conveyance of all or a material portion of the Property by Seller to a party
other than Purchaser, or (y) a material encumbrance of the Property
intentionally made by Seller in breach of this Agreement, Purchaser shall have
the right to bring an action against Seller to recover any and all actual
damages (but excluding consequential and punitive damages) incurred by Purchaser
arising as a result of Seller’s actions, but not to exceed Six Hundred Fifty
Thousand and No/100s Dollars ($650,000.00). In no event shall Seller be liable
for consequential, speculative, remote or punitive damages. Purchaser shall be
deemed to have elected to terminate this Agreement and receive back the Earnest
Money if Purchaser fails to file suit for specific performance against Seller in
a court having jurisdiction in the county and state in which the Property is
located, on or before ninety (90) days following the date upon which Closing was
to have occurred.

6.3Notice of Default; Opportunity to Cure. Neither Seller nor Purchaser shall be
deemed to be in default hereunder until and unless such party has been given
written notice of its failure to comply with the terms hereof and thereafter
does not cure such failure within five (5) business days after receipt of such
notice; provided, however, that this Section 6.3 shall not be applicable to
Purchaser's failure to deliver the Earnest Money or any portion thereof on the
date required hereunder or to a party's failure to make any deliveries required
of such party on the Closing Date and, accordingly, shall not have the effect of
extending the Closing Date or the due date of any Earnest Money deposit
hereunder.

6.4Recoverable Damages. Notwithstanding Sections 6.1 and 6.2 hereof, in no event
shall the provisions of Sections 6.1 and 6.2 limit (i) either Purchaser's or
Seller's obligation to indemnify the other party, or the damages recoverable by
the indemnified party against the indemnifying party due to, a party's express
obligation to indemnify the other party in accordance with the Sections 3.1,
4.8, 4.9, or 8.1(b) of this Agreement, or (ii) either party's obligation to pay
costs, fees or expenses under Section 4.5 hereof, or the damages recoverable by
either party against the other party due to a party's failure to pay such costs.
In addition, if this Agreement terminates for any reason, other than a default
by Seller hereunder for which Purchaser has elected to pursue the remedy of
specific performance, and Purchaser or any party related to or affiliated with
Purchaser asserts any claim or right to the Property that would otherwise delay
or prevent Seller from having clear, indefeasible, and marketable title to the
Property, then Seller shall have all rights and remedies available at law or in
equity with respect to such assertion by Purchaser and any loss, damage or other
consequence suffered by Seller as a result of such assertion.

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Article 7
RISK OF LOSS

7.1Damage. In the event of "damage" to the Property or any portion thereof,
which is "major" (as such terms are hereinafter defined) then Seller shall
promptly notify Purchaser thereof. In the event of such major damage, Purchaser
may elect to proceed with the Closing (subject to the other provisions of this
Agreement) or may terminate this Agreement by delivering written notice thereof
to Seller within ten (10) days after Purchaser's receipt of Seller's notice
respecting the damage. If, within ten (10) days of receipt of Seller's notice
respecting such major damage, Purchaser delivers written notice of termination
of this Agreement to Seller, this Agreement shall terminate, all Earnest Money
shall be returned to Purchaser and, except for obligations of the parties which
survive termination of this Agreement, the parties shall have no further
obligations hereunder. If Purchaser does not timely elect to terminate this
Agreement, Purchaser shall have no further right to terminate this Agreement as
a result of the damage and in such event, Seller shall assign to Purchaser at
Closing all insurance proceeds or condemnation awards payable as a result of
such damage and pay any insurance deductible due under Seller's insurance
policy(ies). If the damage is not major, Seller shall assign to Purchaser at
Closing all insurance proceeds or condemnation awards payable as a result of
such damage and pay any insurance deductible due under Seller's insurance
policy(ies). In the event the damage is not major and prior to Closing
sufficient insurance proceeds are not received or committed in writing by the
insurance carrier sufficient to repair any damage, Seller shall repair such
damage by Closing or give Purchaser a credit at Closing in an amount sufficient
to pay for the cost unpaid as of Closing for repair of the applicable damage
(i.e. to restore the Property to substantially the same condition as immediately
before such casualty), such amount to be determined by an architect or other
appropriate professional selected by Seller and approved by Purchaser, such
approval not to be unreasonably withheld, conditioned or delayed. Any assignment
by Seller to Purchaser of insurance proceeds respecting loss of rental income
shall be limited to that portion of such proceeds attributable to periods after
Closing.

7.2Definition of Major Damage. For purposes of Section 7.1:

(a)                "damage" means (i) physical damage to or destruction of all
or part of the Real Property by reason of fire, earthquake, tornado, flood or
other casualty occurring after the Effective Date or (ii) the physical taking of
all or part of the Real Property by condemnation or by conveyance in lieu of
condemnation occurring after the Effective Date; and

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(b)               "major" damage refers to the following: (i) damage such that
the cost of repairing or restoring the premises in question to a condition
substantially similar to that of the premises in question prior to the event of
damage would in the opinion of an architect selected by Seller and reasonably
approved by Purchaser, be equal to or greater than Three Hundred Fifty Thousand
and no/100s Dollars ($350,000.00), and (ii) any damage due to a condemnation or
conveyance in lieu of condemnation which permanently and materially impairs the
current use or value of a Property or access to such Property from public roads
or the number or utility of parking spaces. If Purchaser does not give notice to
Seller of Purchaser's reasons for disapproving an architect within five (5)
business days after receipt of notice of the proposed architect, then Purchaser
shall be deemed to have approved the architect selected by Seller.

7.3Seller's Insurance. If necessary or appropriate for Purchaser to evaluate its
options or enforce its rights under this Article 7 following any damage to the
Property, Seller shall promptly provide to Purchaser on request a copy of
Seller's property insurance policies (or other applicable insurance policies)
with respect to the Property.

Article 8
COMMISSIONS

8.1Broker's Commission

(a)                The parties acknowledge that Berkadia Real Estate Advisors
LLC ("Broker"), has been retained by and represents Seller as broker in
connection with the subject transaction, and is to be compensated for its
services by Seller. Seller agrees that Seller shall pay to Broker upon, but only
upon, final consummation of the transaction contemplated herein, a brokerage
commission pursuant to a separate written agreement between Seller and Broker.

(b)               Purchaser and Seller each hereby represents and warrants to
the other that it has not disclosed this Agreement or the subject matter hereof
to, and has not otherwise dealt with, any real estate broker, agent or salesman
(other than Broker) so as to create any legal right or claim in any such broker,
agent or salesman (other than Broker) for a real estate commission or similar
fee or compensation with respect to the negotiation and/or consummation of this
Agreement or the conveyance of the Property by Seller to Purchaser. Except as
provided in this Section 8.1 with respect to Broker, Purchaser and Seller shall
indemnify, hold harmless and defend each other from and against any and claims
and demands for a real estate brokerage commission or similar fee or
compensation arising out of any claimed dealings with the indemnifying party and
relating to this Agreement or the purchase and sale of the Property (including
reasonable attorneys' fees and expenses and court costs incurred in defending
any such claim or in enforcing this indemnity).

8.2Survival. This Article 8 shall survive the rescission, cancellation,
termination or consummation of this Agreement.

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Article 9
DISCLAIMERS AND WAIVERS

9.1No Reliance on Documents. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND
WARRANTIES SET FORTH IN THIS AGREEMENT HEREOF AND IN THE CLOSING DOCUMENTS,
SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO THE TRUTH, ACCURACY OR
COMPLETENESS OF ANY MATERIALS, DATA OR INFORMATION DELIVERED BY SELLER TO
PURCHASER IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREBY. PURCHASER
ACKNOWLEDGES AND AGREES THAT ALL MATERIALS, DATA AND INFORMATION DELIVERED BY
SELLER TO PURCHASER IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREBY ARE
PROVIDED TO PURCHASER AS A CONVENIENCE ONLY AND THAT ANY RELIANCE ON OR USE OF
SUCH MATERIALS, DATA OR INFORMATION BY PURCHASER SHALL BE AT THE SOLE RISK OF
PURCHASER, EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, PURCHASER ACKNOWLEDGES AND AGREES THAT (A) ANY
ENVIRONMENTAL OR OTHER REPORT WITH RESPECT TO THE PROPERTY WHICH IS DELIVERED BY
SELLER TO PURCHASER SHALL BE FOR GENERAL INFORMATIONAL PURPOSES ONLY, (B)
PURCHASER SHALL NOT HAVE ANY RIGHT TO RELY ON ANY SUCH REPORT DELIVERED BY
SELLER TO PURCHASER, BUT RATHER WILL RELY ON ITS OWN INSPECTIONS AND
INVESTIGATIONS OF THE PROPERTY AND ANY REPORTS COMMISSIONED BY PURCHASER WITH
RESPECT THERETO, AND (C) NEITHER SELLER, ANY AFFILIATE OF SELLER NOR THE PERSON
OR ENTITY WHICH PREPARED ANY SUCH REPORT DELIVERED BY SELLER TO PURCHASER SHALL
HAVE ANY LIABILITY TO PURCHASER FOR ANY INACCURACY IN OR OMISSION FROM ANY SUCH
REPORT.

9.2Disclaimers. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER
SET FORTH IN THIS AGREEMENT HEREOF AND IN THE CLOSING DOCUMENTS, PURCHASER
UNDERSTANDS AND AGREES THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE
ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR
IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S LIMITED OR SPECIAL WARRANTY OF
TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, LATENT OR PATENT
PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR
PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE

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COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS, THE ABSENCE OR PRESENCE OF
HAZARDOUS MATERIALS OR OTHER TOXIC SUBSTANCES (INCLUDING WITHOUT LIMITATION MOLD
OR ANY MOLD CONDITION), COMPLIANCE WITH ENVIRONMENTAL LAWS OR ACCESS LAWS, THE
TRUTH, ACCURACY OR COMPLETENESS OF THE PROPERTY DOCUMENTS OR ANY OTHER
INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER
OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON
CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE
PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT TO THE EXTENT EXPRESSLY
PROVIDED OTHERWISE IN THIS AGREEMENT AND IN THE CLOSING DOCUMENTS. PURCHASER HAS
NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY
EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH
RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE
PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO
REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR
IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT.

PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT
PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS
NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE
EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY
HAZARDOUS MATERIALS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY
(INCLUDING WITHOUT LIMITATION ANY MOLD OR MOLD CONDITION), OR WITH RESPECT TO
ACCESS LAWS, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION
PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT
THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS
ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, PURCHASER SHALL ASSUME
THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, DESIGN,
CONSTRUCTION DEFECTS, ADVERSE PHYSICAL OR ENVIRONMENTAL CONDITIONS, OR
NONCOMPLIANCE WITH ACCESS LAWS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S
INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED,
RELINQUISHED AND RELEASED SELLER (AND SELLER'S AND ITS PARTNERS'

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RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT OR UNDER ANY ENVIRONMENTAL LAW), LOSSES, DAMAGES, LIABILITIES,
FINES, PENALTIES (WHETHER BASED ON STRICT LIABILITY OR OTHERWISE), COSTS AND
EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED
AGAINST SELLER (AND SELLER'S AND ITS PARTNERS' RESPECTIVE OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF
ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF
ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS OR
ACCESS LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR
MATTERS REGARDING THE PROPERTY. THE FOREGOING SHALL NOT BE INTERPRETED TO WAIVE
ANY CLAIM OF PURCHASER WITH RESPECT TO FRAUD OR ANY BREACH BY SELLER OF ANY
EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN SECTION 5.1 THAT
EXPRESSLY SURVIVE CLOSING PURSUANT TO SECTION 5.3.

PURCHASER AGREES THAT SHOULD ANY INVESTIGATION, CLEANUP, REMEDIATION OR REMOVAL
OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS (INCLUDING WITHOUT
LIMITATION ANY MOLD OR MOLD CONDITION) ON OR RELATED TO THE PROPERTY BE REQUIRED
AFTER THE DATE OF CLOSING, SELLER SHALL HAVE NO LIABILITY TO PURCHASER TO
PERFORM OR PAY FOR SUCH INVESTIGATION, CLEAN-UP, REMOVAL OR REMEDIATION, AND
PURCHASER EXPRESSLY WAIVES AND RELEASES ANY CLAIM TO THE CONTRARY. PURCHASER
FURTHER AGREES THAT SHOULD ANY INVESTIGATION OR CURATIVE ACTION ON OR RELATED TO
THE PROPERTY BE REQUIRED AFTER THE DATE OF CLOSING UNDER ANY ACCESS LAWS, SELLER
SHALL HAVE NO LIABILITY TO PURCHASER TO PERFORM OR PAY FOR SUCH INVESTIGATION OR
CURATIVE ACTION AND PURCHASER EXPRESSLY WAIVES AND RELEASES ANY CLAIM TO THE
CONTRARY. THE FOREGOING SHALL NOT BE INTERPRETED TO WAIVE ANY BREACH BY SELLER
OF ANY EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN SECTION 5.1 THAT
EXPRESSLY SURVIVE CLOSING PURSUANT TO SECTION 5.3.

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PURCHASER REPRESENTS AND WARRANTS THAT THE TERMS OF THE RELEASE CONTAINED HEREIN
AND ITS CONSEQUENCES HAVE BEEN COMPLETELY READ AND UNDERSTOOD BY PURCHASER, AND
PURCHASER HAS HAD THE OPPORTUNITY TO CONSULT WITH, AND HAS CONSULTED WITH, LEGAL
COUNSEL OF PURCHASER'S CHOICE WITH REGARD TO THE TERMS OF THIS RELEASE.
PURCHASER ACKNOWLEDGES AND WARRANTS THAT PURCHASER'S EXECUTION OF THIS RELEASE
IS FREE AND VOLUNTARY.

9.3Certain Definitions. The term "Access Laws" means the Americans With
Disabilities Act, the Fair Housing Act, the Rehabilitation Act and other federal
laws and all applicable state, regional, county, municipal and other local laws,
regulations and ordinances governing access to handicapped or disabled persons
or the construction or design of residential dwelling units, places of public
accommodation, or common areas which are at or on the Property.

9.4Effect and Survival of Disclaimers. Seller and Purchaser acknowledge that the
provisions of this Article 9 are an integral part of the transactions
contemplated in this Agreement and a material inducement to Seller to enter into
this Agreement and that Seller would not enter into this Agreement but for the
provisions of this Article 9. Seller and Purchaser agree that the provisions of
this Article 9 shall survive Closing or any termination of this Agreement.

 

Article 10
ESCROW AGENT

10.1Investment of Earnest Money. Escrow Agent shall invest the Earnest Money
pursuant to Purchaser's directions in an interest bearing account at a
commercial bank whose deposits are insured by the Federal Deposit Insurance
Corporation; provided, however, Purchaser may elect to not invest the Earnest
Money. Escrow Agent shall notify Seller, no later than one (1) business day
after Escrow Agent's receipt thereof, that Escrow Agent has received the Earnest
Money in immediately available funds, and is holding the same in accordance with
the terms of this Agreement. However, if Purchaser elects to invest the Earnest
Money, Escrow Agent shall invest the Earnest Money only in such accounts as will
allow Escrow Agent to disburse the Earnest Money upon no more than one (1)
business days' notice.

10.2Intentionally Omitted.

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10.3Payment on Demand. Upon receipt of any written certification from Seller or
Purchaser claiming the Earnest Money pursuant to the provisions of this
Agreement, Escrow Agent shall promptly forward a copy thereof to the other such
party (i.e., Purchaser or Seller, whichever did not claim the Earnest Money
pursuant to such notice) and, unless such other party within ten (10) days
thereafter notifies Escrow Agent of any objection to such requested disbursement
of the Earnest Money in which case Escrow Agent shall retain the Earnest Money
subject to Section 10.5 below, Escrow Agent shall disburse the Earnest Money to
the party demanding the same and shall thereupon be released and discharged from
any further duty or obligation hereunder; provided, however, to the extent that
Purchaser terminates this Agreement pursuant to the terms and conditions of
Section 3.2 hereinabove, the Earnest Money shall be promptly disbursed to
Purchaser.

10.4Exculpation of Escrow Agent. It is agreed that the duties of Escrow Agent
are herein specifically provided and are purely ministerial in nature, and that
Escrow Agent shall incur no liability whatsoever except for its misconduct or
negligence, so long as Escrow Agent is acting in good faith. Seller and
Purchaser do each hereby release Escrow Agent from any liability for any error
of judgment or for any act done or omitted to be done by Escrow Agent in the
good faith performance of its duties hereunder and do each hereby indemnify
Escrow Agent against, and agree to hold, save, and defend Escrow Agent harmless
from, any costs, liabilities, and expenses incurred by Escrow Agent in serving
as Escrow Agent hereunder and in faithfully discharging its duties and
obligations hereunder.

10.5Stakeholder. Escrow Agent is acting as a stakeholder only with respect to
the Earnest Money. If there is any dispute as to whether Escrow Agent is
obligated to deliver the Earnest Money or as to whom the Earnest Money is to be
delivered, Escrow Agent may refuse to make any delivery and may continue to hold
the Earnest Money until receipt by Escrow Agent of an authorization in writing,
signed by Seller and Purchaser, directing the disposition of the Earnest Money,
or, in the absence of such written authorization, until final determination of
the rights of the parties in an appropriate judicial proceeding. If such written
authorization is not given, or a proceeding for such determination is not begun,
within thirty (30) days of notice to Escrow Agent of such dispute, Escrow Agent
may bring an appropriate action or proceeding for leave to deposit the Earnest
Money in a court of competent jurisdiction located in the Atlanta metropolitan
area pending such determination. Escrow Agent shall be reimbursed for all costs
and expenses of such action or proceeding, including, without limitation,
reasonable attorneys' fees and disbursements, by the party determined not to be
entitled to the Earnest Money. Upon making delivery of the Earnest Money in any
of the manners herein provided, Escrow Agent shall have no further liability or
obligation hereunder.

10.6Interest. All interest and other income, if any, earned on the Earnest Money
deposited with Escrow Agent hereunder shall be reported for income tax purposes
as earnings of Purchaser. Purchaser's taxpayer identification number is
______________.

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10.7Execution by Escrow Agent. Escrow Agent has executed this Agreement solely
for the purpose of acknowledging and agreeing to the provisions of this Article
10. Escrow Agent's consent to any modification or amendment of this Agreement
other than this Article 10 shall not be required.

Article 11
MISCELLANEOUS

11.1Intentionally Deleted.

11.2Intentionally Deleted.

11.3Assignment. Purchaser may not assign its rights under this Agreement without
first obtaining Seller's written approval, which approval may be given or
withheld in Seller's sole discretion. Any transfer, directly or indirectly, of
any stock, partnership interest or other ownership interest in Purchaser in
excess of 49% without Seller's written approval, which approval shall not be
unreasonably withheld, delayed or conditioned, shall constitute a default by
Purchaser under this Agreement, provided, however, (i) Purchaser may assign this
Agreement at Closing to a Permitted Affiliate without Seller's consent, (ii)
Seller or Purchaser may assign its rights under this Agreement to a reputable
exchange accommodation to facilitate a tax deferred exchange pursuant to
Sections 4.8 and 4.9 hereof, and (iii) Seller may assign this Agreement for tax
planning or other purposes as described in Section 2.6. For purposes hereof, the
term "Permitted Affiliate" means an entity that (i) controls, is controlled or
managed by, or is under common control with The Inland Real Estate Group and/or
Inland Private Capital Corporation and/or those persons controlling and/or
managing The Inland Real Estate Group and/or Inland Private Capital Corporation,
(ii) is solvent at the time of assignment, and (iii) at the time of Closing, is
not rendered insolvent by such assignment, and has sufficient assets to
consummate the transaction contemplated herein. No transfer or assignment by
Purchaser shall release or relieve Purchaser of its obligations hereunder.

11.4Notices. Any notice, request or other communication (a "notice") required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or overnight courier (such as United Parcel Service or Federal Express),
sent by email (provided a copy of such notice is deposited with an overnight
courier for next business day delivery). Any such notice shall be considered
given on the date of such hand or courier delivery, confirmed email transmission
if received on a business day (provided a copy of such notice is deposited with
an overnight courier for next business day delivery), deposit with such
overnight courier for next business day delivery, but the time period (if any is
provided herein) in which to respond to such notice shall commence on the date
of hand or overnight courier delivery or on the date received following deposit
in the United States mail as provided above. Rejection or other refusal to
accept or inability to deliver because of changed address of which no notice was
given shall be deemed to be receipt of the notice. By giving at least five (5)
days' prior written notice thereof, any party may from time to time and at any
time change its mailing address hereunder. Any notice of any party may be given
by such party's counsel.

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The parties' respective addresses for notice purposes are as follows. Telephone
numbers are given for convenience of reference only. Notice by telephone shall
not be effective.

If to Seller:

 

Flournoy Development Company, LLC

900 Brookstone Centre Parkway

Columbus, Georgia 31904

Attention: Thomas H. Flournoy

Phone: 706/243-9406

e-mail: Tom.Flournoy@FlournoyDev.com

 

with a copy to:

 

Flournoy Development Company, LLC

900 Brookstone Centre Parkway

Columbus, Georgia 31904

Attention: Jeremy Brewer, Esq.

Phone: 706/243-9470

e-mail: Jeremy.Brewer@FlournoyDev.com

and with a copy to:

 

Burr & Forman LLP

171 17th Street NW

Suite 1100

Atlanta, Georgia 30363

Attention: G. Wilson Horde III, Esq.

Telephone: 404/685-4288

e-mail: rhorde@burr.com

 

If to Purchaser:

 

Inland Real Estate Acquisitions, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Mark Cosenza

Telephone No. 630/218-4946

e-mail: mcosenza@inlandgroup.com

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with a copy to:

 

The Inland Real Estate Group, Inc.

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Brett D. Smith, Esq.

Telephone No. 630/218-2885

e-mail: brett.smith@inlandgroup.com

 

If to Escrow Agent:

 

Nancy Castro

Chicago Title Insurance Company

10 S. LaSalle Street, Suite 3100

Chicago, Illinois 60603

Phone 312/223-2709

e-mail: nancy.castro@ctt.com

 

11.5Modifications. This Agreement cannot be changed orally, and no agreement
shall be effective to waive, change, modify or discharge it in whole or in part
unless such agreement is in writing and is signed by the parties against whom
enforcement of any waiver, change, modification or discharge is sought.
Signatures inscribed on the signature pages of this Agreement or any formal
amendment which are transmitted by email transmission (e.g., PDF files) shall be
valid and effective to bind the party so signing. Each party agrees to promptly
deliver to the other party an executed original of this Agreement or any such
formal amendment with its actual signature, but a failure to do so shall not
affect the enforceability of this Agreement or any such formal amendment, it
being expressly agreed that each party to this Agreement or any formal amendment
shall be bound by its own emailed signature and shall accept the emailed
signature of the other party to this Agreement or any formal amendment.

11.6Calculation of Time Periods. Unless otherwise specified, in computing any
period of time described in this Agreement, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday under the laws of the State in which the
Property is located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday or legal holiday. The final day of
any such period shall be deemed to end at 5:00 p.m., Eastern time.

11.7Successors and Assigns. Subject to Section 11.3 hereof, the terms and
provisions of this Agreement are to apply to and bind the permitted successors
and assigns of the parties hereto.

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11.8Entire Agreement. This Agreement, including the Schedules, contain the
entire agreement between the parties pertaining to the subject matter hereof and
fully supersede all prior written or oral agreements and understandings between
the parties pertaining to such subject matter.

11.9Further Assurances. Each party agrees that it will without further
consideration execute and deliver such other documents and take such other
action, whether prior or subsequent to Closing, as may be reasonably requested
by the other party to consummate more effectively the purposes or subject matter
of this Agreement. Without limiting the generality of the foregoing, Purchaser
shall, if requested by Seller, execute acknowledgments of receipt with respect
to any materials delivered by Seller to Purchaser with respect to the Property.
The provisions of this Section 11.9 shall survive Closing.

11.10Counterparts. This Agreement may be executed in identical counterparts, and
all such executed counterparts shall constitute the same agreement. It shall be
necessary to account for only one such counterpart in proving this Agreement.

11.11Severability. If any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of this
Agreement shall nonetheless remain in full force and effect.

11.12Applicable Law. This Agreement is performable in the state in which the
Property is located and shall in all respects be governed by, and construed in
accordance with, the substantive federal laws of the United States and the laws
of such state. Seller and Purchaser hereby irrevocably submit to the
jurisdiction of any state or federal court sitting in the state and judicial
district in which the Property is located in any action or proceeding arising
out of or relating to this Agreement and hereby irrevocably agree that all
claims in respect of such action or proceeding shall be heard and determined in
a state or federal court sitting in the state and judicial district in which the
Property is located. Purchaser and Seller agree that the provisions of this
Section 11.12 shall survive the Closing of the transaction contemplated by this
Agreement.

11.13No Third Party Beneficiary. The provisions of this Agreement and of the
documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing.

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11.14Employees. Seller shall be solely responsible for the salaries and
benefits, if any, payable to Seller's employees at the Property for the period
through the Closing, in accordance with and subject to the terms and conditions
of such employment, even if such employees are employed by or on behalf of
Purchaser following the Closing. With respect to any employees employed by or on
behalf of Purchaser following the Closing, Purchaser shall be solely responsible
for all salaries and benefits, if any, payable to such employees for the period
from and after the Closing in accordance with and subject to the terms and
conditions of such employment, even if such employees were employed by Seller
prior to the Closing, provided, however, that Purchaser shall have no obligation
to offer employment to or to employ any employee of the Property following
Closing. Neither Purchaser nor Seller shall have any obligation for salaries,
benefits or other employment obligations to any such employee with respect to
the period such employee is or was employed by the other party; provided that
Purchaser shall, unless forbidden by existing benefit plans, grant to employees
of Seller that Purchaser does hire credit for tenure of employment with Seller
in determining the employee's benefits. This Section 11.14 shall survive the
Closing.

11.15Seller's Access to Records after Closing. Purchaser shall reasonably
cooperate with Seller for a period of three (3) years after Closing to make
available Purchaser's employees and Property records, as Seller may reasonably
request, in case of Seller's need in response to any legal requirement, tax
audit, tax return preparation, securities law filing, or litigation threatened
or brought against Seller, by allowing Seller and its agents or representatives
access, upon reasonable advance notice (which notice shall identify the nature
of the information sought by Seller), at all reasonable times to examine and
make copies of any and all instruments, files and records which predate the
Closing; provided, however, that nothing contained in this Section 11.15 shall
require Purchaser to retain any files or records for any particular period of
time. This Section 11.15 shall survive Closing.

11.16Schedules. The following schedules attached hereto shall be deemed to be an
integral part of this Agreement:

Schedule 1.1 (a)    -      Legal Description of the Land

Schedule 1.1(d)     -      Inventory of Tangible Personal Property

Schedule 1.1(e)     -      Rent Roll

Schedule 1.6(a)     -      Earnest Money Wiring Instructions

Schedule 3.1(a)     -      Due Diligence Documents

Schedule 4.2(a)     -      Statutory Warranty Deed

Schedule 4.2(b)     -      Bill of Sale and Assignment

Schedule 4.2(c)     -      Tenant Notice

Schedule 4.2(d)     -      Seller's Closing Certificate

Schedule 5.1          -      Seller's Disclosure Statement

Schedule 5.7(b)     -      Schedule of Must Take Service Contracts

Schedule 12.1        -      Additional PSAs and Additional Properties

 

49 

 

 

11.17Captions. The section headings appearing in this Agreement are for
convenience of reference only and are not intended, to any extent and for any
purpose, to limit or define the text of any section or any subsection hereof.

11.18Construction. The parties acknowledge that the parties and their counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any schedules or amendments hereto.

11.19Termination of Agreement. It is understood and agreed that if either
Purchaser or Seller terminates this Agreement pursuant to a right of termination
granted hereunder, such termination shall operate to relieve Seller and
Purchaser from all obligations under this Agreement, except for such obligations
as are specifically stated herein to survive the termination of this Agreement.

11.20Survival. (a) The provisions of the following Sections of this Agreement
shall survive Closing and shall not be merged into the execution and delivery of
the Deed: 3.1(c); 4.2(c); 4.4; 4.5; 4.8; 4.9; 5.1; 5.2; 5.3; 5.5; 5.6; 5.7; 5.8;
Article 8; Article 9; 11.9; 11.12; 11.14; 11.15; those additional provisions of
Article 11 which govern the administration, interpretation or enforcement of
this Agreement; and any other provisions contained herein that by their terms
survive the Closing (the "Obligations Surviving Closing"). Except for the
Obligations Surviving Closing, all representations, warranties, covenants and
agreements contained in this Agreement shall be merged into the instruments and
documents executed and delivered at Closing. The Obligations Surviving Closing
shall survive the Closing; provided, however, that the representations and
warranties of Seller contained in Section 5.1, as updated by Seller's Closing
Certificate, and the representations and warranties of Purchaser contained in
Section 5.5, shall survive for the period, and are subject to the terms, set
forth in Sections 5.3 and 5.6 respectively.

(b)       If at the time of a written demand by Purchaser upon Seller alleging a
breach of or claim under any Obligations Surviving Closing, Seller's net worth
(as that term is defined by generally accepted accounting principles
consistently applied) is less than One Million Fifty Thousand Dollars
($1,050,000.00; the "Minimum Net Worth Threshold"), then by executing this
Agreement below, FDC Development JV, LLC, a Delaware limited liability company
("FDC JV") shall be deemed and construed to have guaranteed the Obligations
Surviving Closing for a period of nine (9) months following the Closing;
provided, however, that FDC JV's liability under said guaranty shall not exceed
One Million Fifty Thousand Dollars ($1,050,000.00). During said nine (9) month
period, FDC JV covenants unto Purchaser that FDC JV shall maintain a net worth
not less than the Minimum Net Worth Threshold.

11.21Time of Essence. Time is of the essence with respect to this Agreement.

50 

 

 

11.22Covenant Not to Record. Except as part of a specific performance actions,
Purchaser shall not record this Agreement or any memorandum or other evidence
thereof. Any such recording shall constitute a material default hereunder on the
part of Purchaser.

11.23Limitation of Seller's Liability. Purchaser shall have no recourse against
any of the past, present or future, direct or indirect, shareholders, partners,
members, managers, principals, directors, officers, agents, incorporators,
affiliates or representatives of Seller or its general partner or of any of the
assets or property of any of the foregoing for the payment or collection of any
amount, judgment, judicial process, arbitral award, fee or cost or for any other
obligation or claim arising out of or based upon this Agreement and requiring
the payment of money by Seller. This Section 11.23 shall survive the Closing.

11.24JURY WAIVER. IN ANY LAWSUIT OR OTHER PROCEEDING INITIATED BY SELLER OR
PURCHASER UNDER OR WITH RESPECT TO THIS AGREEMENT, SELLER AND PURCHASER EACH
WAIVE ANY RIGHT IT MAY HAVE TO TRIAL BY JURY.

Article 12
ADDITIONAL PROPERTIES

12.1Additional PSAs. Purchaser (or one or more of Purchaser’s affiliates or
designees) and Seller (or one or more of Seller’s affiliates) have, on or about
even date herewith, entered into those certain purchase and sale agreements
described on Schedule 12.1 hereto (each an “Additional PSA” and, collectively,
the “Additional PSAs”) to acquire one or more additional properties listed on
such Schedule 12.1 (each an “Additional Property” and, collectively, the
“Additional Properties”).

12.2Agreements Regarding Additional PSAs. Purchaser and Seller hereby agree as
follows with respect to the Additional PSAs and the transactions contemplated
thereby:

(a) Termination by Purchaser On or Prior to the Inspection Date. If on or prior
to the Inspection Date, Purchaser elects to terminate this Agreement in
accordance with the terms and provisions hereof, then Seller shall have the
right to terminate any other Additional PSA (or no other Additional PSA) as
Seller may elect in its sole and absolute discretion, whereupon Escrow Agent
shall promptly disburse the Earnest Money under this Agreement and each
terminated Additional PSA to Purchaser, and the parties shall have no further
rights, duties or obligations hereunder with respect to this Agreement and each
terminated Additional PSA, other than those which are expressly provided herein
to survive the termination of this Agreement and/or each terminated Additional
PSA, respectively.

51 

 

 

(b) Post-Inspection Date Default by Purchaser. If following the Inspection Date,
Purchaser fails to acquire the Property in accordance with the terms and
provisions of this Agreement and Purchaser fails to cure such default within the
applicable notice and cure period (a “Purchaser Default”), then Seller shall
have the right to terminate this Agreement pursuant to Section 6.1 hereinabove
and any other Additional PSA (or no other Additional PSA) as Seller may elect in
its sole and absolute discretion, whereupon (unless such termination events have
occurred and are continuing which would require reimbursement of all Earnest
Money to Purchaser under Sections 2.3, 2.5, 3.2, 4.6, 6.2, 7.1 or 12.2(c)(i)(A)
hereof), Escrow Agent shall promptly disburse the Earnest Money to Seller under
this Agreement, and the applicable escrow agent under each terminated Additional
PSA shall promptly disburse to the applicable seller all earnest money under
each terminated Additional PSA, and thereafter the parties shall have no further
rights, duties or obligations hereunder (or thereunder), other than those which
are expressly provided to survive the termination; provided, however, if Seller
elects to so terminate this Agreement due to a Purchaser Default under an
Additional PSA following the Inspection Date, then it must do so by written
notice to Purchaser delivered within two (2) business days after termination of
such Additional PSA by the applicable seller thereunder; provided further,
however, if Purchaser's failure to acquire the Property is not caused by a
Purchaser default (e.g., (x) a casualty or condemnation affecting the Property,
(y) a failure of Seller to satisfy a condition precedent, which condition is
within Seller's reasonable control and ability to fulfill, or (z) an intentional
default by Seller under this Agreement), then the provisions of this Agreement
that govern Purchaser's rights upon the occurrence of such circumstances shall
control and neither Seller nor the sellers under the Additional PSAs shall have
the right to terminate this Agreement or an Additional PSA because of
Purchaser's exercise of said rights.

(c) Post-Inspection Date Default by Seller. If (1) Purchaser does not elect to
terminate this Agreement on or before the Inspection Date and does not elect to
terminate an Additional PSA following the applicable "Inspection Date" for such
Additional PSA(s), and (2) after the Inspection Date, Seller defaults under this
Agreement beyond any applicable notice and cure period specified in this
Agreement (a “Seller Default”), then in addition to any and all remedies that
may be available to Purchaser under this Agreement, Purchaser may elect to
terminate the Additional PSAs as a result of the Seller Default and receive (i)
a refund of all Earnest Money paid under such terminated Additional PSAs,
together with payment from Seller of an amount equal to the lesser of (A) One
Hundred Thousand and no/100 Dollars ($100,000.00) for each terminated Additional
PSA, or (B) the amount of all direct, third party out of pocket costs and
expenses actually incurred by Purchaser in connection with the terminated
Additional PSAs; and (ii) if the Seller Default under this Agreement is
intentional, then in addition to the remedies described in clause (i) above,
Purchaser shall also have the right to receive payment from Seller of money
damages in an amount equal to one-half percent (0.50%) of the collective
Purchase Price for this Agreement and the terminated Additional PSAs (provided,
however, that if Purchaser elects to so terminate any of the Additional PSAs, it
must do so by written notice to the applicable seller delivered within two (2)
business days after termination of this Agreement).

[Signatures on following pages.]

52 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the Effective Date. 

 

SELLER:

 

VERANDAS AT MITYLENE, LLC,

a Delaware limited liability company

            By:

FDC Development JV, LLC,

a Delaware limited liability company, its sole Member

              By:

Flournoy Development Company, LLC,

a Georgia limited liability company, its Manager

                By: /s/ Thomas H. Flournoy         Thomas H. Flournoy, its
President

 

For the sole purpose of fulfilling its obligations under Section 11.20 of the
above Agreement, and no other Section(s) thereof, FDC JV has executed this
Agreement below as of the Effective Date.

 

 

FDC Development JV, LLC,

a Delaware limited liability company,

its sole Member

          By:

Flournoy Development Company, LLC,

a Georgia limited liability company,

its Manager

            By: /s/ Thomas H. Flournoy       Thomas H. Flournoy, its President

 

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 

 

This is a signature page to, and may be attached to a master counterpart of, the
Purchase and Sale Agreement between Verandas at Mitylene, LLC, as Seller, and
Inland Real Estate Acquisitions, Inc., as Purchaser, with respect to Verandas at
Mitylene Apartments.

 

 

PURCHASER:

 

Inland Real Estate Acquisitions, Inc.,

an Illinois corporation

        By: /s/ Mark J. Cosenza   Name: Mark J. Cosenza   Title: Senior Vice
President

 

 

 

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 

 

This is a signature page to, and may be attached to a master counterpart of, the
Purchase and Sale Agreement between Verandas at Mitylene, LLC, as Seller, and
Inland Real Estate Acquisitions, Inc., as Purchaser, with respect to Verandas at
Mitylene Apartments.

 

Chicago Title Insurance Company, as Escrow Agent is a party to such Purchase and
Sale Agreement for the limited purposes set forth therein.

 

 

Escrow Agent has executed this Agreement for the limited purposes set forth
herein.

 

 

ESCROW AGENT:

 

CHICAGO TITLE INSURANCE COMPANY

        By: /s/ Katie Van Zuidam   Name: Katie Van Zuidam   Title: Escrow
Associate

 

  

 

 

Schedule 1.1(a)

LEGAL DESCRIPTION OF THE LAND

 [image_002.jpg]

 

 

 

Schedule 1.1(d)

INVENTORY OF TANGIBLE PERSONAL PROPERTY

SEE ATTACHED

 

 

 

 

Schedule 1.1(e)

RENT ROLL

SEE ATTACHED

 

 

 

 

Schedule 1.6(a)

EARNEST MONEY WIRING INSTRUCTIONS

SEE ATTACHED

 

 

 

 

 

Schedule 3.1(a)

Due Diligence Documents

SEE ATTACHED

 

 

 

Schedule 4.2(a)

FORM OF STATUTORY WARRANTY DEED

SEE ATTACHED

 

 

 

This instrument was prepared by:   Send Tax Notice to:                        

 

STATE OF ALABAMA ) COUNTY OF __________ )

 

STATUTORY WARRANTY DEED

 

KNOW ALL MEN BY THESE PRESENTS,

 

THAT IN CONSIDERATION of the Ten Dollars ($10.00) and other valuable
consideration in hand paid by ________________________, a _____________________
(hereinafter referred to as the “Grantee”) to Verandas at Mitylene, a Delaware
limited liability company (hereinafter referred to as the “Grantor”), the
receipt and sufficiency of which are hereby acknowledged, Grantor does by these
presents, grant, bargain, sell and convey unto the Grantee, all those certain
tracts or lots of land lying in Montgomery County, Alabama, and more
particularly described on Exhibit “A” attached hereto and incorporated herein by
reference, subject, however, to the permitted exceptions described on Exhibit
“B” attached hereto and incorporated herein by reference (the “Permitted
Exceptions”).

 

TOGETHER WITH all appurtenances thereto belonging or in anywise appertaining and
all right, title and interest of Grantor in and to any and all roads, alleys and
ways bounding said Property.

TO HAVE AND TO HOLD, to the said Grantee, its successors and assigns forever.

Grantor hereby covenants and agrees with Grantee, its successors and assigns,
that the Grantor, its heirs, successors and assigns, will warrant and defend the
above described Property against the lawful claims (unless otherwise noted
above) of all persons claiming by, through, or under the Grantor, but not
further or otherwise.

 

[$_______ of the consideration for this Deed is secured by a mortgage executed
and filed for record simultaneously herewith, and on which mortgage tax under
Section 40-22-2 of the Alabama Code is being paid].

 

Pursuant to the provisions of Alabama Code § 40-2201 (1975), the following
information is offered in lieu of submitting Form RT-1:

 

Grantor’s Name and Mailing Address:                          Grantee’s Name and
Mailing Address:

 

Verandas at Mitylene                                                     IRESI
Montgomery Mitylene, LLC

c/o Flournoy Development Company, LLC                   c/o Inland Real Estate
Acquisitions, Inc.

900 Brookstone Centre Parkway                                    2901
Butterfield Road

Columbus, GA 31904                                                     Oak
Brook, IL 60523

Attention: Jeremy Brewer, Esq.                                      Attention:
Brett Smith, Esq.

 

Property Address:       8850 Crosswind Drive, Montgomery, AL 36117

Purchase Price:           $36,403,542.00

 

 

IN WITNESS WHEREOF, the Grantor has caused this Statutory Warranty Deed to be
executed as of the _________ day of ___________, 201__.

 

 

 

GRANTOR:

 

  a           By:                 Its:  

 

 

STATE OF ____________ ) COUNTY OF __________ )

 

 

I, the undersigned authority, a Notary Public in and for said county in said
state, hereby certify that _____________________, whose name as _______________
of ___________________________, a _____________________, is signed to the
foregoing conveyance and who is known to me, acknowledged before me on this day
that, being informed of the contents of the said conveyance, s/he, as such
officer and with full authority, executed the same voluntarily for and as the
act of said ________________.

 

Given under my hand and official seal, this the _____ day of ______________,
201_.

 

 

       

Notary Public

My Commission Expires:

 

 

 

 

 

 

Exhibits to Statutory Warranty Deed

A - Legal Description of Land

B - Permitted Exceptions

 

 

 

EXHIBIT A

Legal Description of the Land

[image_003.jpg]

 

 

 

Schedule 4.2(b)

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION
OF LEASES AND SERVICE CONTRACTS

This Bill of Sale and Assignment and Assumption of Leases and Service Contracts
(this "Agreement") is made and entered into this ____ day of _____, 2017, by and
between Verandas at Mitylene, LLC, a Delaware limited liability company
("Seller"), and ___________________, a ___________ ("Purchaser").

W I T N E S S E T H:

WHEREAS, Seller and Purchaser have previously entered into that certain Purchase
and Sale Agreement, dated _____, 2017 [DESCRIBE AMENDMENTS, IF APPLICABLE] (the
"Contract"), having [NAME OF ESCROW AGENT] as party for the limited purposes set
forth therein;

WHEREAS, concurrently with the execution and delivery of this Agreement and
pursuant to the Contract, Seller is conveying to Purchaser, by Statuory Warranty
Deed, (i) those certain tracts or parcels of real property located in
Montgomery, Montgomery County, Alabama, and more particularly described on
Exhibit A, attached hereto and made a part hereof (the "Land"), (ii) the rights,
easements and appurtenances pertaining to the Land (the "Related Rights"), and
(iii) the buildings, structures, fixtures and other improvements on and within
the Land (the "Improvements"; and the Land, the Related Rights and the
Improvements being sometimes collectively referred to as the "Real Property");

WHEREAS, Seller has agreed to convey to Purchaser certain personal property and
assign to Purchaser certain leases and service contracts as hereinafter set
forth;

NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10.00), the
assumptions by Purchaser hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:

1.                  Bill of Sale:

(a)       Seller hereby sells, assigns, transfers and conveys to Purchaser all
of Seller's right, title and interest in, to and under the Tangible Personal
Property and the Intangible Property. Seller warrants to Purchaser that Seller
owns good title to the Tangible Personal Property, that the Tangible Personal
Property is free and clear of all liens, charges and encumbrances other than the
Permitted Exceptions (as defined in the Contract), and that Seller has full
right, power and authority to sell the Tangible Personal Property and to make
this Bill of Sale. Seller further warrants to Purchaser that Seller has not
conveyed to any third party its right, title and interest, if any, in the
Intangible Property.

 

 

 

(b)       "Tangible Personal Property" means all tangible personal property
owned by Seller upon the Land or within the Improvements, including
specifically, without limitation, appliances, equipment, furniture, furnishings,
carpeting, draperies and curtains, tools and supplies, and other items of
tangible personal property owned by Seller and used exclusively in connection
with the ownership, use, maintenance or operation of the Land and the
Improvements, and including those items of tangible personal property identified
on Exhibit B, attached hereto and made a part hereof by this reference;
provided, however, that the Tangible Personal Property does not include the
following items: (i) cash and cash equivalents, and any reserves or other
deposits funded or made in connection with any financing encumbering the
Property, (ii) computer software and computer files, (iii) any time clock(s),
(iv) personal property owned by tenants under the Leases, (v) any equipment
installed by, or in connection with, any telecommunication or utility provider
and which is owned by a party other than Seller, (vi) any items owned by
employees of Seller or any property manager, (vii) any items leased to Seller,
(viii) any digital voice receivers used in connection with recorded music at the
Property, and (ix) all brochures, advertising copy, promotional materials,
manuals, reports, portfolios, binders, training materials and other items on
which the name "Flournoy" appears.

(c)       "Intangible Property" means (i) all assignable existing warranties and
guaranties issued to or inuring to the benefit of Seller in connection with the
Improvements or the Tangible Personal Property; (ii) all governmental permits,
licenses and approvals, if any, belonging to or inuring to the benefit of Seller
and pertaining to the Real Property or the Tangible Personal Property, but only
to the extent that such permits, licenses and approvals are assignable, and only
to the extent that such permits, licenses and approvals relate to the Real
Property or the Tangible Personal Property, as opposed to other property of
Seller or its affiliates; (iii) resident and tenant files for current residents
and tenants as of the Closing Date, (iv) architectural and civil plans and
specifications (to the extent in Seller's possession but excluding any right to
reproduce or otherwise use such plans or specifications for future development);
(v) the right to use the name "Verandas at Mitylene Apartments"; (vi) all
assignable telephone numbers, URLs and website domain names associated with the
Real Property including but not limited to the right, at Purchaser's expense, to
use www.verandasmontgomery.com for a period of one (1) year after the Closing
solely for the purpose of forwarding visitors to Purchaser's website for the
Real Property; but excluding any rights in or to the use of the name "Flournoy";
(vii) all logos, works of art, graphic designs and all videos and photos owned
and used by Seller in connection with the Real Property; provided that the item
listed in this clause (vii) does not use or display the name "Flournoy" and
(viii) other non-confidential and non-proprietary records owned by Seller and
used in connection with the operation of the Real Property or any part thereof,
and located on-site as of the Closing Date, (the property described in this
subparagraph 1(c), other than the excluded items, being sometimes herein
referred to collectively as the "Intangible Property").

 

 

 

2.                  Assignment and Assumption of Leases:

(a)       Seller hereby sells, assigns, transfers and conveys to Purchaser all
of Seller's right, title and interest as landlord in, to and under all rental
agreements, leases and other agreements in effect as of the date of this
Agreement demising space in or providing for the use or occupancy of the Real
Property (the "Leases"), together with any and all unapplied refundable tenant
security and other unapplied refundable deposits in Seller's possession with
respect to the Leases as of the date of this Agreement (collectively, the
"Deposits"). The assignment of the Deposits has been made by means of a credit
or payment on the closing statement executed by Seller and Purchaser.

(b)       Purchaser hereby assumes, and hereby covenants and agrees to fully and
faithfully perform, observe and comply with, all of the covenants, agreements,
conditions and other terms and provisions stated in the Leases which, under the
terms of the Leases, are to be performed, observed, and complied with by the
landlord from and after the date of this Agreement. Purchaser acknowledges that
Purchaser shall become solely responsible and liable as landlord under the
Leases for obligations arising or accruing from and after the date hereof.

(c)       Seller shall indemnify, hold harmless and defend Purchaser from and
against any and all claims, demands, causes of action, liabilities, losses,
costs, damages and expenses (including reasonable attorneys' fees and expenses
and court costs incurred in defending any such claim or in enforcing this
indemnity) that may be incurred by Purchaser by reason of the assertion by any
tenant under any of the Leases that Seller has failed to perform, observe and
comply with its obligations as landlord under any of the Leases during the
period before the date hereof, other than with respect to the Deposits (to the
extent paid or assigned to Purchaser or for which Purchaser has received a
credit or payment at Closing).

(d)       Purchaser shall indemnify, hold harmless and defend Seller from and
against any and all claims, demands, causes of action, liabilities, losses,
costs, damages and expenses (including reasonable attorneys' fees and expenses
and court costs incurred in defending any such claim or in enforcing this
indemnity) that may be incurred by Seller by reason of the failure of Purchaser
to perform, observe and comply with the landlord's obligations under any of the
Leases arising or accruing during the period from and after the date hereof,
including without limitation, claims made by tenants with respect to the
Deposits, whether arising before, on or after the date hereof (to the extent
paid or assigned to Purchaser or for which Purchaser has received a credit or
payment at Closing).

(e)       equivalent party under any of the Leases, and the word "tenant" means
the tenant, lessee or other equivalent party under any of the Leases.

 

 

 

3.                  Assignment and Assumption of Service Contracts:

(a)       Seller hereby sells, assigns, transfers and conveys to Purchaser all
of Seller's right, title and interest in, to and under those service, supply,
equipment rental and similar agreements set forth on Exhibit C, attached hereto
and made part hereof by this reference (the "Service Contracts").

(b)       Purchaser hereby assumes, and hereby covenants and agrees to fully and
faithfully perform, observe and comply with, all of the covenants, agreements,
conditions and other terms and provisions stated in the Service Contracts which,
under the terms of the Service Contracts, are to be performed, observed, and
complied with by the property owner from and after the date of this Agreement.
Purchaser acknowledges that Purchaser shall become solely responsible and liable
under the Service Contracts for obligations arising or accruing from and after
the date hereof, including with respect to any and all payments coming due under
the Service Contracts for which Purchaser has received a credit or payment on
the closing statement executed by Purchaser and Seller (the "Credited
Payments").

(c)       Seller shall indemnify, hold harmless and defend Purchaser from and
against any and all claims, demands, causes of action, liabilities, losses,
costs, damages and expenses (including reasonable attorneys' fees and expenses
and court costs incurred in defending any such claim or in enforcing this
indemnity) that may be incurred by Purchaser by reason of the assertion by any
other contract party under any of the Service Contracts that Seller has failed
to perform, observe and comply with its obligations under any of the Service
Contracts during the period before the date hereof, other than with respect to
the Credited Payments (to the extent paid or assigned to Purchaser or for which
Purchaser has received a credit or payment at Closing).

(d)       Purchaser shall indemnify, hold harmless and defend Seller from and
against any and all claims, demands, causes of action, liabilities, losses,
costs, damages and expenses (including reasonable attorneys' fees and expenses
and court costs incurred in defending any such claim or in enforcing this
indemnity) that may be incurred by Seller by reason of the failure of Purchaser
to perform, observe and comply with its obligations under any of the Service
Contracts arising or accruing during the period from and after the date hereof,
including without limitation, claims made by any other contract party with
respect to the Credited Payments, whether arising before, on or after the date
hereof (to the extent paid or assigned to Purchaser or for which Purchaser
received a credit or payment at Closing).

4.                  Qualifications. This Agreement is subject to the Permitted
Exceptions (as defined in the Contract). This Agreement is also subject to those
provisions of the Contract limiting Seller's liability to Purchaser, including
but not limited to Article 9 of the Contract.

 

 

 

5.                  Counterparts. This Agreement may be executed in two or more
identical counterparts, and it shall not be necessary that any one of the
counterparts be executed by all of the parties hereto. Each fully or partially
executed counterpart shall be deemed an original, but all of such counterparts
taken together shall constitute one and the same instrument.

6.                  Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon, the successors, executors, administrators,
legal representatives and assigns of the parties hereto.

7.                  Governing Law. This Agreement shall be construed under and
enforced in accordance with the laws of the State of Alabama.

EXECUTED effective as of the date first above written.

 

SELLER:

 

  a           By:       a                   By:         Name:         Title:    

 

 

 

 

PURCHASER:

 

  a             By:       Name:       Title:  

 

 

 

 

Exhibits to Bill of Sale and Assignment

A - Legal Description of Land

B - Inventory of Tangible Personal Property

C - List of Designated Service Contracts

 

 

 

 

EXHIBIT 4.2(c)

“TENANT NOTICE ”

________________, ___________

RE: Notice of Change of Ownership of Verandas at Mitylene Apartments

Dear Tenants:

As of the date hereof, __________________________________, a Delaware limited
liability company (the “Seller”) has transferred, sold, assigned, and conveyed
all of its interest in and to the above-described property, (the “Property”) to
____________________________ (the “New Owner”). After today, New Owner will be
responsible for all obligations of the “landlord” or “lessor” under your lease.

Future notices and rental payments with respect to your lease premises at the
Property should be made to the New Owner in accordance with your lease terms at
the following address:

________________________

________________________

________________________

On behalf of Flournoy Properties, we want to thank you for making Verandas at
Mitylene Apartments your home. It has been our pleasure to serve you. Any future
inquiries regarding your lease should be directed to the Purchaser at the
contact information listed above. If you have any questions regarding any of
this information, please contact the New Owner.

 

  Very truly yours,  

 

Seller:

    a             By:       Print Name:       Its:  

 

 

 

 

New Owner:

    a             By:       Print Name:       Its:  

 

 

 

Schedule 4.2(d)

Seller's Closing Certificate

THIS CERTIFICATION is made as of _____________, 20__, by Verandas at Mitylene, a
Delaware limited liability company ("Seller"), in favor of
_______________________, a __________ ("Purchaser").

Seller hereby certifies to Purchaser that the representations and warranties of
Seller set forth in Section 5.1 of that certain Purchase and Sale Agreement
between Seller and _________________________ [if applicable: as amended] (the
"Agreement") dated as of __________, 20__, as amended, are true and correct in
all material respects as of the date hereof, except as to:

(a)       The Rent Roll attached hereto as Exhibit A replaces the Rent Roll
attached to the Agreement as Schedule 1.3; and

(b)       [If applicable: The items disclosed on Exhibit B attached hereto
replace Seller's Disclosure Schedule attached to the Agreement as Schedule 5.1].

The representations and warranties set forth in Section 5.1 of the Agreement, as
updated by this Certificate of Seller's Representations and Warranties, will
survive only for a period of ______________ from the date hereof.

This certificate is delivered pursuant to Section 4.2(d) of the Agreement, and
Seller's liability hereunder is subject to Section 5.3 of the Agreement,
including the Cap as defined therein.

 

 

  a           By:       a                   By:         Print Name:        
Title:    

 

 

 

 

 

Exhibits to Seller's Closing Certificate

Exhibit A -- Updated Rent Roll

Exhibit B -- Additional Items for Seller's Disclosure Schedule [if applicable]

 

 

 

 

Schedule 5.1

SELLER'S DISCLOSURE STATEMENT

NONE

 

 

 

 

Schedule 5.7(b)

SCHEDULE OF MUST TAKE SERVICE CONTRACTS

 

Knology (Resident Cable, Internet, Telephone)

Montgomery Water (Waste Water)

Valet Waste (Trash Removal)

Cort Furniture (Rental Furniture for Corporate Apartments Based on Leases)

 

 

 

Schedule 12.1

 

ADDITIONAL PSAs

 

and

ADDITIONAL PROPERTIES

 

1.       Purchase And Sale Agreement, dated, as of May 25, 2017 (the "Effective
Date"), by and between Verandas at Taylor Oaks, LLC, a Delaware limited
liability company, and Inland Real Estate Acquisitions, Inc., an Illinois
corporation, pertaining to the sale of the Verandas at Taylor Oaks apartments
located at 7701 Taylor Oaks Dr., Montgomery, AL 36116.

 

 

2.       Purchase And Sale Agreement, dated, as of May 25, 2017 (the "Effective
Date"), by and between The Haven at Commons Park, a Delaware limited liability
company, and Inland Real Estate Acquisitions, Inc., an Illinois corporation,
pertaining to the sale of the Verandas at Taylor Oaks apartments located at 7477
Commons Blvd., Chattanooga, TN 37421.