Exhibit 10.210

 

 

 

PURCHASE AND SALE AGREEMENT
BETWEEN

AH DURHAM APARTMENTS, LLC,

a Virginia limited liability company

AS SELLER,
AND

TRIBRIDGE RESIDENTIAL, LLC,

a Georgia limited liability company

AS PURCHASER

 

As of December 1, 2014

 

 

 

Whetstone Apartments Durham, North Carolina

 

 

 

 

Table of Contents

 

    Page ARTICLE 1 PURCHASE AND SALE l 1.1 Agreement of Purchase and Sale 1 1.2
Property Defined 2 1.3 Permitted Exceptions 2 1.4 Purchase Price 2 1.5 Payment
of Purchase Price 3 1.6 Earnest Money 3 ARTICLE 2 TITLE AND SURVEY 4 2.1 Title
Examination; Commitment for Title Insurance 4 2.2 Survey 4 2.3 Title Objections;
Cure of Title Objections 4 2.4 Conveyance of Title 6 2.5 Pre-Closing "Gap"
Title/Survey Defects 6 2.6 Seller's Covenant Not to Encumber 6 ARTICLE 3
INSPECTION PERIOD 6 3.1 Right of inspection 6 3.2 Right of Termination 8 3.3
Condition of the Property 9 ARTICLE 4 CLOSING 11 4.1 Time and Place 11 4.2
Seller's Obligations at Closing 12 4.3 Purchaser's Obligations at Closing 14 4.4
Credits and Prorations 14 4.5 Closing Costs 17 4.6 Conditions Precedent to
Obligation of Purchaser 17 4.7 Conditions Precedent to Obligation of Seller 19
ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS 20 5.1 Representations and
Warranties of Seller 20 5.2 Knowledge Defined 23 5.3 Survival of Seller's
Representations and Warranties 23 5.4 Covenants of Seller 24 5.5 Representations
and Warranties of Purchaser 28 5.6 Survival of Purchaser's Representations and
Warranties 30 ARTICLE 6 DEFAULT 30 6.1 Default by Purchaser 30 6.2 Default by
Seller 30 6.3 Notice of Default; Opportunity to Cure 31 6.4 Recoverable Damages
31 ARTICLE 7 RISK OF LOSS 31 7.1 Damage 31 7.2 Definition of Major Damage 32 7.3
Seller's Insurance 33 ARTICLE 8 COMMISSIONS 33 8.1 Broker's Commission 33 8.2
Representation and Indemnity 33

 

 i  

 

 

8.3 Survival 33 ARTICLE 9 RESERVED 33 ARTICLE 10 ESCROW AGENT 33 10.1 Investment
of Earnest Money 33 10.2 Payment on De1nand 34 10.3 Exculpation of Escrow Agent
34 10.4 Stakeholder 34 10.5 Interest. 35 10.6 Execution by Escrow Agent. 35
ARTICLE 11 MISCELLANEOUS 35 11.1 Assignment 35 11.2 Notices 35 11.3
Modifications 36 11.4 Calculation of Time Periods 37 11.5 Successors and Assigns
37 11.6 Entire Agreement 37 11.7 Further Assurances 37 11.8 Counterparts 37 11.9
Severability 37 11.10 Applicable Law 37 11.11 No Third Party Beneficiary 38
11.12 Schedules 38 11.13 Captions 38 11.14 Construction 38 11.15 Termination of
Agreement. 38 11.16 Survival 39 11.17 Time of Essence 39 11.18 Covenant Not to
Record 39 11.19 Reserved 39 11.20 Construction Matters 39 11.21 Confidentiality
40 11.22 Tax-Deferred Exchange 41

 

Schedule 1.l(a)

Legal description of the Land

 

Schedule 1.l(d)

INVENTORY OF Tangible Personal Property

 

Schedule 1.l(e)
RENT ROLL

 

Schedule 1.1(f)

PLANS AND SPECIFICATIONS

 

 ii  

 

 

Schedule l.6(a)

ESCROW AGENT WIRING INSTRUCTIONS

 

Schedule 3.l (e)
SELLER'S DELIVERIES

 

Schedule 4.2(a)

Form of special Warranty Deed

 

EXHIBIT A

PROPERTY DESCRIPTION

 

EXHIBIT B
EXCEPTIONS

 

Exhibits to Special Warranty Deed

 

Schedule 4.2(b)

Exhibits to Bill of Sale and Assignment

 

Schedule 4.2(c)

Form of Notice to Tenants

 

EXHIBIT A

Addresses

 

Schedule 4.2(d)

Form of Seller's Closing Certificate

 

Exhibits to Seller's Closing Certificate

 

Schedule 4.2(f)
FIRPTA AFFIDAVIT

 

Schedule 5.1

SELLER'S DISCLOSURE STATEMENT

 

Schedule 5.l(j)

SCHEDULE OF SERVICE CONTRACTS

 

Schedule 5.l (k)

List of Insurance Policies

 

Schedule 5.4(b)

Leasing Guidelines

 

 iii  

 

 

Schedule 5.4(1)

PUNCHLIST HOLDBACK ESCROW AGREEMENT

 

Schedule 1l.20(b)
Construction Deliveries

 

Schedule 11.20(c)
Form of Consent

 

 iv  

 

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of December 1,
2014 (the "Effective Date"), by and between AH DURHAM APARTMENTS, LLC, a
Virginia limited liability company ("Seller"), and TRIBRIDGE RESIDENTIAL, LLC, a
Georgia limited liability company ("Purchaser"), CALLOWAY TITLE & ESCROW,
L.L.C., as agent for Chicago Title Insurance Company ("Escrow Agent;" in its
capacity as title insurer sometimes herein called the "Title Company").

 

WITNESSETH:

 

ARTICLE 1

 

PURCHASE AND SALE

 

1.1           Agreement 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 located in Raleigh, North
Carolina, consisting of approximately 2.1 acres and more particularly described
on Schedule 1.l (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, hereditaments 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 and parking deck, having a street address of
501 Willard Street, Durham, North Carolina and commonly known as Whetstone
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");

 

 1 

 

 

(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, office equipment, fitness equipment 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
(the property described in this clause (d) being herein referred to collectively
as the "Tangible Personal Property"); provided that any property owned by the
company providing management and leasing services for the Real Property is
excluded from Tangible Personal Property. Seller agrees to cooperate reasonably
with Purchaser to transfer any property specific computer data files in
electronic format to Purchaser.

 

(e)          all of Seller's right, title and interest as landlord or lessor in,
to and under all written lease agreements listed and described on Schedule
1.l(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 to the extent assignable (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, (iii) all assignable
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; (iv) resident and tenant files for current residents and
tenants as of the Effective Date, (v) all plans, drawings, specifications,
surveys, engineering reports, and other technical information in the possession
of Seller pertaining to the development and construction of the Improvements, a
list of which are attached hereto as Schedule 1.1(f) and incorporated herein by
reference (as modified from time to time in accordance with Section 5.4(m)i. (as
hereinafter defined "Plans and Specifications"), (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; (vii) all rights to use the
name "Whetstone" in connection with the Real Property, and (viii) all assignable
telephone numbers, social media identities such as on Facebook and Twitter
associated with the Real Property and websites domain names associated solely
with the Real Property including but not limited to www.whetstoneapartments.com,
and (ix) the Construction Contracts (as herein defined) (the property described
in this clause (f), being sometimes herein referred to collectively as the
"Intangible Property").

 

1.2           Property 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."

 

1.3           Permitted 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").

 

 2 

 

 

1.4           Purchase Price. Seller is to sell and Purchaser is to purchase the
Property for a total purchase price of THIRTY-SIX MILLION AND NO /100 DOLLARS
($36,000,000.00) (the "Purchase Price").

 

1.5           Payment of Purchase Price. The Purchase Price as adjusted by
prorations and adjustments as herein provided, shall be payable in full 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.

 

1.6           Earnest Money

 

(a)          Within three (3) business days following the Effective Date,
Purchaser shall deposit with Escrow Agent the sum of Fifty Thousand and No/00
Dollars ($50,000.00) by wire transfer of immediately available funds (the
"Initial Earnest Money"). On or before the date which is three (3) business days
following the expiration of the Inspection Period (as defined in Section 3.2),
in the event Purchaser has not sooner terminated this Agreement in accordance
with the terms hereof, Purchaser shall deposit with Escrow Agent the additional
sum of Nine Hundred Fifty Thousand and No/00 Dollars ($950,000.00) by wire
transfer of immediately available funds (the "Additional Earnest Money"). The
Initial Earnest Money and the Additional Earnest Money, and any interest thereon
pursuant to Section 10.1 shall individually and collectively be referred to
herein as the "Earnest Money." The Earnest Money is consideration for the rights
granted to Purchaser to purchase the Property and if Purchaser has not
terminated this Agreement in accordance with Section 3.2, then the Earnest Money
will be non refundable except if a Purchaser Permitted Termination Event occurs.
The Earnest Money shall 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, and shall otherwise be held,
credited, disbursed and refunded in the manner set forth herein. For purposes of
this Agreement, "Purchaser Permitted Termination Event" means the termination of
this Agreement by Purchaser for any of the following reasons: (i) pursuant to
Section 3.2 as a result of Purchaser's inspection of the Property; (ii) pursuant
to Section 2.3 as a result of a title or survey matter; (iii) pursuant to
Section 4.6 if a closing condition benefiting Purchaser is not satisfied; (v)
pursuant to Section 7.1 in the event of "major" damage to the Property; or (vi)
pursuant to Section 6.2 in the event of a Seller default.

 

(b)          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/00 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.

 

 3 

 

 

ARTICLE 2

 

TITLE AND SURVEY

 

2.1           Title Examination; Commitment for Title Insurance. No later than
three (3) business days after the Effective Date, Purchaser shall order from the
Title Company a title commitment (the "Title Commitment") covering the Property
along with copies of all documents and title exceptions referenced therein.

 

2.2           Survey. Seller shall deliver to Purchaser a copy of a survey of
the Land (the "Existing Survey") dated August 20, 2013, prepared by Jeffrey P.
Williams, Professional Land Surveyor, as part of Seller's Deliveries pursuant to
Section 3.l (e). Purchaser may obtain, at Purchaser's sole cost and expense, an
update to the Existing Survey (the "Updated Survey"). For purposes of the Deed
to be delivered to Purchaser at the Closing, the legal description of the
Property shall be the legal description attached hereto as Schedule 1.l(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 Updated Survey 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 Updated Survey.

 

2.3           Title Objections; Cure of Title Objections.

 

(a)          Purchaser or its attorneys shall have until the Inspection Date
(the "Title Objection Deadline") to notify Seller, in writing ("Objection
Letter"), of such objections as Purchaser may have to the Title Commitment
(including the title exception documents referred to therein) or the Updated
Survey (collectively, "Title Objections"); provided that Acceptable Encumbrances
will not be asserted as or constitute Title Objections. "Acceptable
Encumbrances" means those encumbrances described in the Title Commitment that
Purchaser will not have the right to object to, which are limited to (i) ad
valorem and other real property taxes and assessments for the year of the
Closing, not yet due and payable, which will be prorated as provided for herein,
(ii) Monetary Liens (defined below) that Seller will satisfy from the proceeds
of the sale at Closing and have discharged of record, (iii) standard printed
conditions and exclusions contained in owner's title insurance policies (iv) the
rights of 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 in accordance with the terms
of this Agreement and (v) any matters which are approved in writing by Purchaser
or approved by Purchaser pursuant to the provisions of this Agreement.
Acceptable Encumbrances and any item contained in the Title Commitment or shown
on the Updated Survey which is not described in the Objection Letter and
delivered to Seller on or before the Title Objection Deadline conclusively will
be deemed a "Permitted Exception."

 

(b)          In the event Purchaser shall deliver to Seller an Objection Letter
on or before the Title Objection Deadline, Seller shall have the right, but not
the obligation, to cure any Title Objections. On or before the tenth (10th)
business day following Seller's receipt of the Objection Letter ("Response
Period"), Seller or its attorneys shall notify Purchaser in writing ("Response
Notice") whether Seller shall cure any valid Title Objections (and Seller's
failure to provide a Response Notice on or before the end of the Response Period
shall be deemed an election by Seller not to cure the Title Objection).If Seller
elects to cure, and provided that Purchaser shall not have terminated this
Agreement in accordance with Section 3.2 hereof, then Seller shall remove,
satisfy or cure the same. If Seller elects (or is deemed to have elected) not to
cure any valid Title Objections specified in Purchaser's Objection Letter, 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:

 

 4 

 

 

(i)          to accept a conveyance of the Property subject to the Permitted
Exceptions, specifically including any Title Objection which Seller has not
elected (or has been deemed to have not elected) to cure, and without reduction
of the Purchase Price, in which event those Title Objections shall be deemed
Permitted Exceptions; or

 

(ii)         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 except to the
extent that any right, obligation or liability set forth herein expressly
survives termination of this Agreement.

 

(c)          If Seller notifies Purchaser that Seller does not intend to attempt
to cure a Title Objection, or if Seller is deemed to have elected not to cure a
Title Objection, then in any such case Purchaser shall, within five (5) business
days after the expiration of the Response Period ("Election Period), notify
Seller in writing ("Election Notice") whether Purchaser elects to accept
conveyance of the Property under clause (b)(l) above or to terminate this
Agreement under clause (b)(2) above. Purchaser's failure to deliver the Election
Notice within the Election Period conclusively will be deemed an election by
Purchaser to accept conveyance of the Property under clause (b)(l ) above).

 

(d)          Notwithstanding anything contained herein to the contrary,
regardless of whether Purchaser objects to the same, Seller shall be obligated
at Closing to discharge (a) all mortgages, and (b) all mechanics' liens,
judgment liens, tax liens, assessment liens or other liens affecting the
Property, in each case which can be satisfied by payment of a sum certain
(collectively, "Monetary Liens"). The term "mortgage" as used herein includes
any mortgage, deed of trust, deed to secure debt and similar security instrument
encumbering the Property or any portion thereof; the terms "discharge" and
"discharged" as used herein shall mean having the Monetary Lien satisfied and
cancelled of record or, in the case of Monetary Liens which are not mortgages,
bonded over.

 

(e)          Notwithstanding anything contained herein to the contrary, if
Seller fails to take any actions to have a Monetary Lien satisfied and cancelled
of record which Seller was obligated to take under Section 2.3(d) above, or
fails to cure a Title Objection that Seller indicates it would cure pursuant to
Section 2.3(b) above, the same shall constitute a default by Seller hereunder,
and the default provisions of Article 6 shall apply.

 

 5 

 

 

2.4           Conveyance of Title. At Closing, Seller shall convey and transfer
the Real Property to Purchaser by special warranty deed subject to all Permitted
Exceptions. 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 all Permitted Exceptions.

 

2.5           Pre-Closing "Gap" Title/Survey Defects. Whether or not Purchaser
shall have furnished to Seller any Objection Letter 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, as reasonably determined by
Purchaser, and first appearing of record (as to title matters) or first arising
(as to survey matters) between (a) the effective date of the Title Commitment or
the last date of field work for the Survey and (b) the Closing Date (each a "New
Matter"); provided, however, that Purchaser must identify any New Matter as a
Title Objection by delivering to Seller an Objection Letter within ten (10)
business days after Purchaser's first receipt of the updated Title Commitment,
updated survey or other document, whichever first provides notice of the New
Matter. Any New Matter which is not identified as a Title Objection by delivery
of an Objection Letter by Purchaser to Seller within this ten (10) business day
period conclusively will be deemed to be a Permitted Exception for all purposes
under this Agreement. If Purchaser timely delivers an Objection Letter to Seller
with respect to any New Matter, then, except for objections arising or resulting
from Seller's breach of the covenant contained in Section 2.6 hereof, the same
elections, procedures and time periods as set forth in Section 2.3 with respect
to Title Objections (including, without limitation, the Response Period, the
Election Period, the Cure Period and Purchaser's right to terminate this
Agreement or waive the Title Objections with respect to any New Matter) also
will apply to any Title Objections timely made with respect to any New Matter.

 

2.6           Seller'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, or enter into any agreements that contemplate any of the
aforementioned, 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 for in or contemplated by this Agreement.

 

ARTICLE 3

 

INSPECTION PERIOD

3.1           Right of Inspection.

 

(a)          Beginning on the Effective Date and continuing thereafter so long
as this Agreement remains in full force and effect, Purchaser shall 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, operation,
condition 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, 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, or management of the Property such as Seller's
internal memoranda, correspondence, emails, financial projections, insurance
policies, operating budgets, appraisals, accounting and tax records and similar
proprietary or confidential information (the "Inspections").

 

 6 

 

 

(b)          Purchaser and its agents, representatives, contractors and
consultants (collectively the "Purchaser Parties") shall have the right to enter
upon the Property during regular business hours for the purpose of conducting
such Inspections as Purchaser may reasonably require; provided that (i) all
Inspections will be scheduled in advance with Seller with at least forty-eight
(48) hours prior telephonic notice to Seller via Eric L. Smith (Phone:
757-366-4000) and (ii) at Seller's option, representatives of Seller will
accompany the Purchaser Parties during any Inspections. Subject to any tenant's
rights under the tenant's Lease, on request by Purchaser, Seller will arrange
for entry to any occupied apartment unit by a Purchaser Party to conduct an
Inspection of that occupied apartment unit not more than once prior to Closing,
unless such Inspection reveals any defect or other matter requiring repair, in
which event Purchaser shall have the right to re-inspect such unit to confirm
that such matters have been addressed, to the extent the parties have agreed to
address the defect or repair or to the extent Seller otherwise has an obligation
to address the defect or repair pursuant to this Agreement. Under no
circumstances will Purchaser's right of entry to the Property be interpreted as
delivery of possession of the Property prior to Closing. During any Inspections,
Purchaser will not cause any damage or make any physical changes to the
Property. Any and all Inspections shall be done at Purchaser's sole cost and
expense. Without limiting the generality of the foregoing and subject to the
limitations in this Section 3.1, Purchaser shall have the right to cause its
engineering consultant to perform environmental assessments upon the Property
and a property condition and engineering investigation of the Property.
Purchaser shall restore, or cause to be restored, the Property to the condition
as existed immediately prior to any such Inspections.

 

(c)          Purchaser shall maintain at all times prior to Closing,
comprehensive general liability insurance with limits of not less than One
Million Dollars ($1,000,000.00) combined single limit, bodily injury, death and
property damage insurance per occurrence, to cover risks of the type described
in this Section 3.1. In conjunction with signing this Agreement, Purchaser will
deliver to Seller (x) an ACORD 25 certificate of insurance providing evidence
that this insurance is in force and naming Seller as the certificate holder and
(y) an endorsement to this insurance policy naming Seller as an additional
insured.

 

 7 

 

 

(d)          Purchaser shall defend (using attorneys reasonably acceptable to
Seller), indemnify and hold harmless Seller, Armada Hoffler Properties, Inc.,
Annada Hoffler, L.P. and their respective past, present, and future officers,
directors, members, managers, partners, agents, representatives, affiliates,
successors, and assigns and their respective heirs, successors and assigns
(collectively, "Seller Group") from and against any and all claims, demands,
fines, suits, causes of action, proceedings, orders, decrees, judgments,
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 and by or in favor of
anyone whomsoever (for purposes of this Section 3.1, individually a "Claim" and
collectively, "Claims") to the extent actually incurred by Seller and caused by,
arising from, resulting from, or occasioned in whole or in part by any acts or
omissions of any Purchaser Party, the Construction Consultant (defined below) or
their agents, contractors, employees, representatives or invitees in connection
with any Inspection or exercising any rights granted to Purchaser pursuant to
this Section 3.1 or any other provision of this Agreement. Notwithstanding the
foregoing, Purchaser shall have no liability for pre-existing conditions upon
the Real Property or for Claims which arise from the negligent or willful
actions of Seller or persons acting on behalf or at the request of Seller. This
Section 3.1(d) shall survive Closing or any termination of this Agreement.

 

(e)          Seller shall deliver to Purchaser the information and documents
listed on Schedule 3.l(e) attached hereto ("Seller's Deliveries") as soon as
practicably possible following the Effective date, but in no event later than
the date which is five (5) business days following the Effective Date.

 

(f)          Purchaser will restore the Property to the condition that existed
immediately prior to Purchaser's entry pursuant to this Section 3.1 promptly
after any Inspection. Notwithstanding anything to the contrary contained in this
Agreement, Purchaser will not perform or allow any of its agents, servants,
employees, contractors or representatives to perform a Phase II environmental
audit and inspection of the Property or any other form of invasive property
testing without Seller's prior written consent, which may be withheld in
Seller's sole and absolute discretion. Purchaser will pay for all Inspections
and other due diligence surveys or reports promptly after receipt of any
invoices. Purchaser will not suffer or permit the filing of any liens against
the Property. If any liens are filed as a result of Purchaser's activities
pursuant to this Section 3.1, Purchaser will promptly cause them to be released
or otherwise eliminated from being a lien on the Property at Purchaser's sole
cost. In the event the transaction contemplated by this Agreement is not closed
or this Agreement is terminated for any reason whatsoever, Purchaser will remain
obligated with respect to the indemnities and other obligations contained in
Section 3.1.

 

3.2           Right 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 6:00 p.m. on the date which is sixty (60)
days following the later to occur of (a) the Effective Date, or (b) the date
upon which Seller has delivered the Seller's Deliveries to Purchaser (the
"Inspection Date"). For purposes of establishing the Inspection Date, Purchaser
will acknowledge in writing to Seller receipt of Seller's Deliveries and the
Inspection Date. Upon any such termination of this Agreement pursuant to
Purchaser's rights under this Section 3.2 the Initial Earnest Money shall be
promptly returned to Purchaser in accordance with Section 1.6 hereof, and
Purchaser and Seller shall have no further rights and obligations hereunder
except those indemnities and rights which expressly survive termination of this
Agreement. If Purchaser fails to give Seller written notice of termination on or
before the Inspection Date, then Purchaser (i) shall no longer have the right to
terminate this Agreement under this Section 3.2 and (ii) subject to Purchaser's
tight to terminate this Agreement due to any Purchaser Permitted Termination
Event other than pursuant to Section 3.2, shall be bound to proceed to Closing
and consummate the transaction contemplated hereby pursuant to the terms of this
Agreement. The period commencing on the Effective Date and ending on the
Inspection Date is sometimes referred to herein as the "Inspection Period."

 

 8 

 

 

3.3           Condition of the Property.       If this Agreement is not
terminated pursuant to Section 3.2, then subject to Purchaser's right to
terminate this Agreement due to any Purchaser Permitted Termination Event other
than pursuant to Section 3.2, the following provisions will be applicable and
will survive the Closing or termination of this Agreement:

 

(a)          Purchaser acknowledges, represents, warrants and agrees to and with
Seller that, except as otherwise expressly provided in this Agreement or in any
document delivered by Seller to Purchaser at Closing, including, without
limitation, any and all obligations, representations, warranties and indemnities
provided by Seller to Purchaser in this Agreement or in any document delivered
by Seller to Purchaser at Closing (collectively, "Seller's Representations"):
(i) Purchaser is purchasing the Property in its existing condition: "AS IS,
WHERE IS, AND WITH ALL FAULTS" with respect to all facts, circumstances,
conditions and defects; (ii) Seller has no obligation to inspect for, repair or
correct any such facts, circumstances, conditions or defects or to compensate
Purchaser for any such items; (iii) Seller has specifically bargained for the
assumption by Purchaser of all responsibility to inspect and investigate the
Property and of all risk of adverse conditions and has structured the Purchase
Price and other terms of this Agreement in consideration thereof; (iv) Purchaser
has undertaken all inspections and investigations of the Property as Purchaser
deems necessary or appropriate under the circumstances as to the condition of
the Property and the suitability of the Property for Purchaser's intended use,
and Purchaser is and will be relying strictly and solely on such inspections and
investigations and the advice and counsel of its own consultants, agents, legal
counsel and officers and Purchaser is and will be fully satisfied that the
Purchase Price is fair and adequate consideration for the Property; (v) Seller
is not making and has not made any warranty or representation with respect to
any of Seller's Deliveries or other materials or data provided by Seller to
Purchaser (whether prepared by or for Seller or others) or the education,
skills, competence or diligence of the preparers thereof or the physical
condition or any other aspect of all or any part of the Property as an
inducement to Purchaser to enter into this Agreement and thereafter to purchase
the Property or for any other purpose; and (vi) by reason of all the foregoing,
Purchaser assumes the full risk of any loss or damage occasioned by any fact,
circumstance, condition or defect pertaining, to the Property. Without limiting
the generality of any of the foregoing, except with respect to Seller's
Representations, Purchaser specifically acknowledges that Seller does not
represent or in any way warrant the accuracy of any marketing information or
pamphlets listing or describing the Property or any information provided by
Seller to Purchaser including without limitation any information contained in
any of Seller's Deliveries; and

 

 9 

 

 

(b)          EXCEPT FOR SELLER'S REPRESENTATIONS, SELLER DISCLAIMS ALL
WARRANTIES OF ANY KIND OR NATURE WHATSOEVER (INCLUDING WARRANTIES OF
HABITABILITY AND FITNESS FOR PARTICULAR PURPOSES), WHETHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO WARRANTIES WITH RESPECT TO THE PROPERTY, TAX
LIABILITIES, ZONING, LAND USE, LAND VALUE, AVAILABILITY OF ACCESS OR UTILITIES,
INGRESS OR EGRESS, GOVERNMENTAL APPROVALS AND COMPLIANCES (INCLUDING COMPLIANCE
WITH THE AMERICANS WITH DISABILITIES ACT (OR SIMILAR LEGISLATION) AND ANY STATE
LAW REQUIREMENTS), OR THE SOIL CONDITIONS OF THE LAND. PURCHASER FURTHER
ACKNOWLEDGES THAT PURCHASER IS BUYING THE PROPERTY "AS IS" AND IN ITS PRESENT
CONDITION AND THAT EXCEPT FOR SELLER'S REPRESENTATIONS, PURCHASER IS NOT RELYING
ON ANY REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE MADE BY SELLER, OR ANY
OF ITS EMPLOYEES OR AGENTS OR THE SELLER GROUP WITH RESPECT, TO THE LAND OR
PROPERTY, AND THAT, IN FACT, NO SUCH REPRESENTATIONS OR WARRANTIES WERE MADE
EXCEPT FOR SELLER'S REPRESENTATIONS; AND

 

(c)          FURTHER AND WITHOUT IN ANY WAY LIMITING ANY OTHER PROVISION OF THIS
AGREEMENT, EXCEPT FOR SELLER'S REPRESENTATIONS, SELLER MAKES NO WARRANTY WITH
RESPECT TO THE PRESENCE IN, ON OR BENEATH THE REAL PROPERTY (OR ANY PARCEL IN
PROXIMITY THERETO) OF HAZARDOUS MATERIALS OR SUBSTANCES WHICH ARE CATEGORIZED AS
HAZARDOUS OR TOXIC UNDER ANY LOCAL, STATE OR FEDERAL LAW, STATUTE, ORDINANCE,
RULE OR REGULATION PERTAINING TO ENVIRONMENTAL OR SUBSTANCE REGULATION,
CONTAMINATION, CLEANUP OR DISCLOSURE. BY ACCEPTANCE OF THIS AGREEMENT AND THE
DEED, PURCHASER ACKNOWLEDGES THAT PURCHASER'S OPPORTUNITY FOR INSPECTION AND
INVESTIGATION OF THE REAL PROPERTY (AND OTHER PARCELS IN PROXIMITY THERETO),
ALONG WITH SELLER'S REPRESENTATIONS, HAVE BEEN ADEQUATE TO ENABLE PURCHASER TO
MAKE PURCHASER'S OWN DETERMINATION WITH RESPECT TO THE PRESENCE IN, ON OR
BENEATH THE REAL PROEPRTY (AND OTHER PARCELS IN PROXIMITY THERETO) OF ANY
HAZARDOUS MATERIALS OR SUBSTANCES. FURTHERMORE, PURCHASER'S CLOSING HEREUNDER
WILL BE DEEMED TO CONSTITUTE AN EXPRESS WAIYER OF PURCHASER'S AND ITS
SUCCESSORS' AND ASSIGNS' RIGHTS TO SUE SELLER OR ANY MEMBER OF THE SELLER GROUP
AND OF PURCHSASER'S RIGHT TO JOIN SELLER OR ANY MEMBER OF THE SELLER GROUP IN AN
ACTION BROUGHT UNDER ANY FEDERAL, STATE OR LOCAL LAW, RULE, ACT, OR REGULATION
NOW EXISTING OR HEREAFTER ENACTED OR AMENDED WHICH PROHIBITS OR REGULATES THE
USE, HANDLING, STORAGE, TRANSPORTATION OR DISPOSAL OF HAZARDOUS MATERIALS OR
TOXIC SUBSTANCES OR WHICH REQUIRES REMOVAL OR REMEDIAL ACTION WITH RESPECT TO
SUCH HAZARDOUS MATERIALS OR SUBSTANCES, SPECIFICALLY INCLUDING BUT NOT LIMITED
TO FEDERAL "CERCLA," "RCRA," AND "SARA" ACTS, UNLESS AND TO THE EXTENT SUCH
MATTER IS THE SUBJECT OF SELLER'S REPRESENTATIOS.

 

NOTWITHSTANDING THE FOREGOING OR ANY PROVISION HEREOF TO THE CONTRARY, THE
ACKNOWLEDGEMENTS SET FORTH IN THIS SECTION 3.3 BY PURCHASER SHALL NOT APPLY TO
ANY CLAIM WITH RESPECT TO ANY FRAUDULENT OR PROVEN INTENTIONAL MISREPRESENTATION
BY SELLER.

 

 10 

 

 

FURTHER, NOTWITHSTANDING ANYTHING IN THE FOREGOING TO THE CONTRARY: (A)
PURCHASER SHALL HAVE THE RIGHT TO DEFEND GOVERNMENT AND THIRD-PARTY CLAIMS BY
ALLEGING THAT SELLER (OR SOMEONE ACTING ON SELLER'S BEHALF), NOT PURCHASER, IS
LIABLE FOR SUCH CLAIMS AND PURCHASER HAS NO OBLIGATION TO INDEMNIFY SELLER FOR
GOVERNMENTAL OR THIRD PARTY CLAIMS ASSERTED BEFORE OR AFTER THE CLOSING AS A
RESULT OF ANY ACT OR OMISSION TAKEN OR FAILED TO BE TAKEN BY OR ON SELLER'S
BEHALF PRIOR TO THE CLOSING; AND (B) THE PROVISIONS SET FORTH IN SECTION 3.3
SHALL NOT APPLY TO THIRD-PARTY TORT CLAIMS RELATING TO THE PROPERTY AND
OCCURRING DURING SELLER'S OWNERSHIP OF THE PROPERTY. ADDITIONALLY, SELLER AND
PURCHASER HEREBY ACKNOWLEDGE AND AGREE THAT THE PROVISIONS SET FORTH IN THIS
SECTION 3.3 ARE NOT INTENDED TO BE AND SHALL NOT BE CONSTRUED AS A WAIYER OF
SIMILAR CLAIMS AGAINST ANY OF SELLER'S PREDECESSORS-IN-TITLE WITH RESPECT TO THE
PROPERTY OR THE PROJECT ("PREDECESSORS'' ), OR ANY SUCH PREDECESSOR'S OFFICERS,
MEMBERS, MANAGERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS OR CONTRACTORS, OR ANY
OTHER PERSON ACTING ON BEHALF OF ANY SUCH PREDECESSORS.

 

ARTICLE 4

 

CLOSING

 

4.1           Time and Place.       The consummation of the transaction
contemplated hereby ("Closing") shall be held at the office of Escrow Agent on
the date which is twenty (20) days after the date when the Construction and
Occupancy Conditions have been satisfied but in no event (i) earlier than the
date which is one hundred twenty (120) days after the Inspection Date; and (ii)
later than the date which is one hundred fifty (150) days after the Inspection
Date; provided, the date of Closing shall be extended on a day by day basis, to
permit the full twenty (20) day period from the satisfaction of the Construction
and Occupancy Conditions to run (i.e. up to a maximum of one hundred seventy
(170) days after the Inspection Date. Notwithstanding the foregoing, in the
event the Construction and Occupancy Conditions have not been satisfied prior to
the date which is one hundred fifty ( 150) days after the Inspection Date,
either party shall have the right to extend the Closing for an additional
forty-five (45) days by delivering notice to the other party on or before the
date which is one hundred fifty (150) days after the Inspection Date, in order
to provide Seller with additional time to complete the Construction and
Occupancy Conditions. 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." Notwithstanding any
provision in this Agreement to the contrary, the Closing Date shall be delayed
one day for each day that a Force Majeure Causes Delay exists provided that
Seller has given Purchaser written notice, within five (5) days after the
conclusion of any Force Majeure Causes Delay, stating the duration of the delay,
the reason Seller is claiming the delay and the number of days delayed; provided
that in no event will the Closing Date be delayed for more than thirty (30) days
due to any Force Majeure Causes Delay. As used herein, "Construction and
Occupancy Conditions" shall mean the following: (a) the Architect (as
hereinafter defined) shall have issued a certificate of substantial completion
with respect to the Improvements having been constructed in accordance with the
Plans and Specifications; [b] the aggregate estimated cost of completing all
Punchlist Items (as hereinafter defined), as reasonably determined by the
Architect and the Construction Consultant (as hereinafter defined), is equal to
or less than $150,000.00; [c] final certificates of occupancy shall have been
issued with respect to all of the Improvements; and [d] Seller has delivered
notice to Purchaser, along with evidence reasonably acceptable to Purchaser
substantiating the same, that the Construction and Occupancy Conditions set
forth in Section 4.1[a] - [c] have been satisfied. As used herein, "Force
Majeure Causes Delay" shall mean those events or circumstances entitling the
Contractor (defined in Section 11.20) to an extension of the time for completion
under Section 8.2.1 of the General Conditions that are part of the GMAX (defined
in Section 11.20).

 

 11 

 

 

4.2           Seller's Obligations at Closing. At Closing, Seller shall deliver
to Escrow Agent or Purchaser as appropriate:

 

(a)          a duly executed 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 only to the Permitted Exceptions (the "Deed");

 

(b)          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)          a notice (the "Tenant Notice") duly executed by Seller in the form
attached hereto as Schedule 4.2(c), 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.

 

(d)          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, and shall not excuse Seller for
breaching any representation or warranty when made as of the date of this
Agreement. 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.l (d) with respect to the
Rent Roll attached hereto.

 12 

 

 

(e)          evidence in form and substance reasonably satisfactory to the Title
Company that Seller has the power and authority to execute and enter into this
Agreement and to consummate the sale of the Property, and that any and all
actions required to authorize and approve the execution of and entry into this
Agreement by Seller, the performance by Seller of all of Seller's duties and
obligations under this Agreement, and the execution and delivery by Seller of
all documents and other items to be executed by Seller at Closing, have been
accomplished, and that the person or persons executing documents on behalf of
Seller are properly authorized to do so;

 

(f)           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, in the form attached hereto as
Schedule 4.2(f);

 

(g)          a title insurance affidavit and a gap indemnity in form and content
reasonably acceptable to Seller and the Title Company, duly executed by Seller;

 

(h)          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)          to Purchaser possession and occupancy of the Property, subject only
to the Permitted Exceptions and rights of tenants under the Leases described in
the updated Rent Roll described in Section 4.2(d);

 

(j)          a closing statement evidencing the transaction contemplated by this
Agreement (the "Closing Statement") and such additional documents as shall be
reasonably requested by the Title Company or required to consummate the
transaction contemplated by this Agreement;

 

(k)          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;

 

(1)         two counterparts duly executed by Seller of an assignment of the
Construction Contracts (as hereinafter defined); and

 

(m)          such additional documents or instruments as may be reasonably
required to effectuate the terms, conditions and provisions of this Agreement
and to carry out the intent of the parties, or as may be reasonably required by
the Title Company.

 

4.3           Purchaser's Obligations at Closing.       At Closing, Purchaser
shall deliver to Escrow Agent or Seller as appropriate:

 

 13 

 

 

(a)          the full amount of the Purchase Price, as increased or decreased by
prorations and adjustments as herein provided, on the Closing Date, in
immediately available federal funds;

 

(b)          counterparts duly executed by Purchaser of the Bill of Sale and
Assignment, Assignment of Construction Contracts, Tenant Notice and Closing
Statement;

 

(c)          evidence in form and substance reasonably satisfactory to the Title
Company that Purchaser has the power and authority to execute and enter into
this Agreement and to consummate the purchase of the Property, and that any and
all actions required to authorize and approve the execution of and entry into
this Agreement by Purchaser, the performance by Purchaser of all of Purchaser's
duties and obligations under this Agreement, and the execution and delivery by
Purchaser of all documents and other items to be executed by Purchaser at
Closing, have been accomplished, and that the person or persons executing
documents on behalf of Purchaser are properly authorized to do so; and

 

(d)          such additional documents or instruments as may be reasonably
required to effectuate the terms, conditions and provisions of this Agreement
and to carry out the intent of the parties, or as may be reasonably required by
the Title Company.

 

4.4           Credits 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 Daylight 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 a reasonable time after the Closing Date to
adjust the proration of said items (not to exceed six (6) months from the
Closing Date [except for ad valorem taxes and assessments, which shall be
adjusted within one (1) month after receipt of the final bills therefor, if
later]) if necessary. Such prorated items shall include, without limitation, the
following:

 

i.            rents, if any, based on the amount actually collected for the
current month. The term "rents" as used in this Agreement includes all payments
due and payable by, or received from, tenants under the Leases other than
security deposits (which security deposits shall be treated as set forth in
Section 4.4(b)(l ));

 

ii.            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;

 

 14 

 

 

iii.          payments or amounts due under the Designated Service Contracts;

 

ivgas, 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

 

v.           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:

 

i.            At Closing, (A) Seller shall credit to Purchaser the amount of all
security deposits, and (B) Purchaser shall credit to the account of Seller all
refundable cash or other deposits posted with utility companies serving the
Property, or, in lieu of such credit, 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)(l) the term "security
deposits" means any security deposits which were tendered by tenants under the
Leases listed on the Rent Roll attached as Schedule 1.1(e), and which Seller has
not applied as of the Effective Date in accordance with the applicable Lease.
Notwithstanding anything to the contrary contained herein, following the
expiration of the Inspection Period, Seller shall not be entitled to apply a
security deposit due to a default by a Tenant which is less than thirty (30)
days old.

 

ii.           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 have not been
paid before Closing, 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 appo1iionment made with respect to a tax year for
which the tax bill is not available shall be based upon the greater of (i) the
prior year's tax bill for the Property; or (ii) the most recent county tax
assessor's valuation of the Property applied to the most recently published
property tax millage rate which is applicable to the Property. 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 the avoidance of doubt, special
assessments which are certified or become a lien prior to Closing shall be
credited to Purchaser at Closing.

 

 15 

 

 

iii.          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.

 

iv.          Seller shall pay in full all leasing commissions and locators' and
finders' fees, if any, due to leasing or other agents for each Lease and Lease
renewal entered into by Seller prior to the Closing Date promptly when due.

 

v.          The Tangible Personal Property is included in this sale, without
further charge.

 

vi.          Unpaid and delinquent rent and reimbursements collected by Seller
and Purchaser after the date of Closing shall be delivered as follows: (a) if
Seller collects any unpaid or delinquent rent or reimbursements for the
Property, Seller shall, within fifteen (15) days after the receipt thereof,
deliver to Purchaser any such rent or reimbursement which Purchaser is entitled
to hereunder relating to the date of Closing and any period thereafter, and (b)
if within ninety (90) days after Closing Purchaser collects any unpaid or
delinquent rent or reimbursement from the Property, Purchaser shall, within
fifteen (15) days after the receipt thereof, deliver to Seller any such rent or
reimbursement which Seller is entitled to hereunder relating to the period prior
to the date of Closing. Seller and Purchaser agree that all rent and
reimbursements received by Seller or Purchaser after the Closing shall be
applied first to current rentals and reimbursements and then to delinquent
rentals and reimbursements, if any, in inverse order of maturity (i.e. any such
collected rent shall be allocated to the most recent delinquent period first),
and that any rent or reimbursements received by Purchaser more than ninety (90)
days after Closing shall belong to Purchaser. Purchaser will make a good faith
effort after Closing to collect all rents and reimbursements 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
or reimbursements, nor shall Seller have any right to bring an action against or
otherwise attempt to collect any delinquent amounts from existing tenants of the
Property.

 

 16 

 

 

vii.          With respect to any Contracts which Purchaser assumes at Closing,
Purchaser shall also receive a proration credit as to the unamortized portion of
any signing bonus or similar payments received by Seller before Closing.

 

viii.         The provisions of this Section 4.4 shall survive Closing.

 

4.5           Closing Costs. Seller shall pay (a) the fees of any counsel
representing it in connection with this transaction; (b) the cost of the
Existing Survey provided by Seller (but not the cost of any update or revision
thereto); (c) with regard to title, the cost of curing all title objections for
which Seller is responsible under this Agreement; (d) the costs of recording all
Monetary Lien cancellations; and (e) any and all transfer tax or other excise or
franchise tax relating to the transfer of the Property. Purchaser shall pay (i)
the fees of any counsel representing Purchaser in connection with this
transaction; (ii) the fees for recording the Deed; (i) the title premium on any
owner's and lender's title policy and any special endorsements required by
Purchaser's lender; (iv) all charges for services invoiced by the Title Company
(other than escrow fees, which shall be allocated in the manner set forth
below); (v) the cost of the Updated Survey, including updates or revisions
necessary to comply with the requirements of Purchaser or its lender; (vi) all
fees, costs and document recordation taxes and charges related to any financing
obtained by Purchaser; (vii) all expenses and costs associated with any
Inspections or the engagement of any Purchaser Parties to perform Inspections;
(viii) all fees and costs related to Purchaser's engagement of the Construction
Consultant; and (ix) the compensation owed to the Broker as required by Section
8.1. Any escrow fee charged by the Title Company shall be shared evenly by
Purchaser and Seller. All other costs and expenses incident to this transaction
and the closing thereof shall be paid by the party incurring same.

 

4.6           Conditions 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:

 

(a)          Seller shall have delivered all of the items required to be
delivered by Seller or Seller's agents pursuant to the terms of this Agreement,
including but not limited to, those provided for in Section 4.2.

 

(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; provided, Seller is entitled to update in Seller's Closing
Certificate (x) the Rent Roll which shall not constitute a failure of this
condition precedent and (y) other representations and warranties to reflect
changes in facts that have occurred after the Effective Date, which Seller first
attains knowledge of after the Effective Date, but if Purchaser determines in
its reasonable discretion that an updated representation has a material and
adverse effect on Purchaser's purchase of the Property, then Purchaser may
notify Seller that the condition precedent has failed but Seller will not be in
default under this Agreement as a result of the failure of the condition
precedent.

 

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

 

 17 

 

 

(d)          The Construction and Occupancy Conditions have been satisfied;
provided, however, in the event that the Construction and Occupancy Conditions
have not been satisfied on or before the date in accordance with the time limits
set forth in Section 4.1, then at Purchaser's election, at any time thereafter,
in its sole discretion, this condition may be deemed unsatisfied, whereupon
Purchaser may avail itself of the rights set forth in the final paragraph of
this Section 4.6; provided, however, in the event a party elects to extend the
Closing Date to provide Seller with additional time to complete the Construction
and Occupancy Conditions as provided in Section 4.1, and thereafter, Seller
fails to cause the completion of the Construction and Occupancy Conditions, then
in addition to the rights set forth in the final paragraph of this Section 4.6,
Seller shall also reimburse Purchaser for Purchaser's actual and verifiable
third party costs and expenses incurred in connection with this Agreement, not
to exceed $100,000.00.

 

(e)          Seller has satisfied all of the Schedule B - Section 1 requirements
contained in the Title Commitment that are Seller's obligation to satisfy and
Seller has done nothing to prevent the Title Company from being able to deliver
at Closing the owner's policy of title insurance pursuant to the Title
Commitment, without exception other than the Permitted Exceptions.

 

(f)          Subject to Purchaser satisfying its obligation in Section 4.7(d),
Purchaser has obtained a final as-built ALTA survey showing the location of the
Improvements upon the Land, completed in accordance with the Plans and
Specifications and compliant with all applicable zoning requirements.

 

(g)          Seller has obtained and delivered to Purchaser all consents
required by Section 11.20 to assign the Construction Contracts (as hereinafter
defined) to Purchaser in accordance with their terms.

 

(h)          Subject to Purchaser satisfying its obligation in Section 4.7(e),
Purchaser has received a clean update to the Phase I Environmental Report that
Purchaser obtains during the Inspection Period confirming that no
environmentally recognized conditions have occurred at the Property since the
expiration of the Inspection Period.

 

(i)          There occurring, between the date hereof and the date of Closing,
no material adverse change in the physical condition of the Property, the zoning
status of the Property, or in any other aspect of the Property.

 

In the event any of the foregoing conditions have 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 entire amount of 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 have
not been satisfied due to a default by Seller hereunder, then Purchaser's
rights, remedies and obligations shall instead be determined in accordance with
Article 6. For the avoidance of doubt, the foregoing conditions are for the
benefit of Purchaser and may be waived, in writing, in whole or in part, at
Purchaser's discretion.

 

 18 

 

 

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

 

(a)          Purchaser has delivered all of the items required to be delivered
by Purchaser or Purchaser's agents pursuant to the terms of this Agreement,
including but not limited to, those provided for in Section 4.3.

 

(b)          All of the representations and warranties of Purchaser contained in
this Agreement are true and correct in all material respects as of the date of
Closing.

 

(c)          Purchaser has performed and observed, in all respects, all
covenants and agreements of this Agreement to be performed and observed by
Purchaser as of the Closing Date.

 

(d)          Purchaser has taken all commercially reasonable actions necessary
to obtain the survey (without regard to its contents) referenced in Section
4.6(f).

 

(e)          Purchaser has taken all commercially reasonable actions necessary
to obtain the environmental report (without regard to its contents) referenced
in Section 4.6(h).

 

In the event any of the foregoing conditions have 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 pay the entire amount of the Earnest Money to Seller 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 have not
been satisfied due to a default by Purchaser, then Seller's rights, remedies and
obligations shall instead be determined in accordance with Article 6. For the
avoidance of doubt, the foregoing conditions are for the benefit of Seller and
may be waived, in writing, in whole or in part, at Seller's discretion.

 

ARTICLE 5

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

5.1           Representations and Warranties of Seller. Seller hereby makes the
following representations and warranties to Purchaser as of the Effective Date
shall be deemed remade at Closing pursuant to Section 4.2(d). Such
representations and warranties are subject to 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").

 

 19 

 

 

(a)          Organization and Authority. Seller has been duly organized and is
validly existing as a limited liability company under the laws of the
Commonwealth of Virginia and is duly authorized to conduct business in the State
of North Carolina. 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 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 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, fraudulent conveyance 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. Seller has not received written notice of any
violation, action, suit, arbitration, administrative or judicial proceeding, or
unsatisfied order or judgment against Seller or the Property. To Seller's
knowledge, no such action, suit, arbitration, administrative or judicial
proceeding has been threatened in writing.

 

(d)          Leases and Rent Roll. Seller is the lessor or landlord under the
Leases. The Rent Roll attached as Schedule 1.l(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 . As of the date set forth on the Rent Roll, the Rent Roll is true,
correct, accurate, and complete. The originals or copies of the Leases and the
tenant lease files made available to Purchaser in connection with Section 3.1(a)
of this Agreement are complete and accurate originals or copies, as applicable,
of all of the Leases and the tenant lease files, and represent all such
documents in Seller's possession and control. There are no written or oral
promises, understandings or commitments between Seller and any tenant under the
Leases that would be binding on Purchaser other than as set forth in such copies
of the Leases and the tenant lease files made available to Purchaser to copy
pursuant to Section 3.l (a) hereof. The Leases are in full force and effect
according to the terms set forth therein, such Leases set forth the entire
agreement between Seller, as landlord, and the tenant with respect to the
premises affected thereby, and except as set forth in Schedule 5.1, Seller has
not: (i) given any outstanding notice of any defaults of tenants under the
Leases; or (ii) received any outstanding notice of any breaches or defaults of
Seller under the Leases.

 

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

 

(f)          Permits. All permits necessary for the construction of the
Improvements have been or will be obtained by Seller in connection with the
development of the Property and final certificates of occupancy have or will be
issued with regard to all Improvements constructed pursuant to such permits.

 

 20 

 

 

(g)          No Violation. Neither the Property nor the use thereof violates any
permit, governmental law or regulation or any covenants or restrictions
encumbering the Property in any material respect.

 

(h)          No Liens. Seller has paid all sums required to be paid to the
General Contractor under the GMAX (defined below) and to Seller's knowledge no
sub contractor, vendor or other party has any outstanding claim, or has
delivered to Seller written notice of a claim, against Seller or the Property
for unpaid sums for labor, services or materials provided in connection with the
Improvements.

 

(i)          Environmental Matters. Seller has no knowledge of any violation of
any environmental law, code, rule, regulation or order ("Environmental Law")
related to the Real Property or the presence or release of any Hazardous
Materials on or from the Property. Except for de minimis amounts of Hazardous
Materials used, stored and disposed of in accordance with Environmental Laws,
and used in connection with the ordinary construction, maintenance and operation
of the Property, (x) 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) and
(y) Seller has not used the Property or any part thereof for the generation,
treatment, storage, handling or disposal of any Hazardous Materials. For
purposes hereof, "Hazardous Materials" means "Hazardous Material,'' "Hazardous
Substance," "Pollutant or Contaminant,'' and "Petroleum" and "Natural Gas
Liquids,'' as those terms are defined or used in Section 101 of CERCLA, any
"solid waste" as defined in the Solid Waste Disposal Act and any other
substances regulated because of their effect or potential effect on public
health and the environment, including, without limitation, PCBs, lead paint,
asbestos, urea formaldehyde, radioactive materials, putrescible materials, and
infectious materials.

 

(j)          ERISA. Seller is not an employee benefit plan (a "Plan") subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"),
Seller's assets do not constitute "plan assets" within the meaning of the "plan
asset regulations" (29.C.F.R. Section 2510.3-101), and Seller's sale of the
Property will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.

 

(k)         Insurance. Attached hereto as Schedule 5.l (k) is a true, correct
and complete list of all insurance policies (along with provider, coverage
amount, and other material terms) that Seller maintains in connection with the
development, construction and operation of the Property.

 

(i)          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 5.1(1), and those Service Contracts which have
been or will be delivered by Seller to Purchaser are true, correct and complete
in all material respects and include any material amendments or modifications
thereto. Seller is not in default with respect to its obligations or liabilities
under any of the Service Contracts.

 

 21 

 

 

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

 

(n)          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, and are
complete and accurate in all material respects.

 

(o)          Patriot Act and Related Matters.

 

(i)          Seller has been in compliance in all material respects since its
formation 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.

 

(ii)         None of the Seller Parties (as defined below) is now or shall be at
any time until the Closing Date be a person who has been listed on (i) the
Specially Designated Nationals and Blocked Persons List contained in Appendix A
to 31 C.F.R., Subtitle B, Part V; (ii) the Denied Persons List, the Entity List,
and the Unverified Parties List maintained by the United States Department of
Commerce; (iii) the List of Terrorists and List of Debarred Parties maintained
by the United States Department of State; and (iv) 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. "Seller Parties" means,
collectively, (a) Seller, (b) Seller's executive officers, directors, managers,
agents and employees and (c) Seller's members; provided that the shareholders of
Armada Hoffler Properties, Inc. and the limited partners of Annada Hoffler, L.P.
are not "Seller Parties" for any purpose under this Agreement.

 

(p)          No Conflict with or Breach of Other Agreements. Neither the
execution and delivery of this Agreement, nor the incurrence of the obligations
herein set forth, nor the consummation of the transactions provided for herein,
nor compliance with the terms of this Agreement, conflict with or result in a
breach of any of the terms, conditions, or provisions of, or constitute a
default under, any bond, note, or other evidence of indebtedness, or any
indenture, mortgage, deed of trust, loan agreement, lease, or other material
agreement or instrument to which Seller is a party or by which the Property may
be bound.

 

 22 

 

 

(q)          Personal Property. Seller has good and marketable title to the
Personal Property, free and clear of any liens, encumbrances or claims other
than Monetary Liens.

 

(r)          Foreign Person. Seller is not a foreign person within the meaning
of Section 1445(£) of the Internal Revenue Code.

 

5.2           Knowledge Defined. References to the "knowledge" of Seller shall
refer only to the conscious awareness on the Effective Date of the Designated
Representatives (as hereinafter defined). Seller represents and warrants to
Purchaser that the Designated Representatives are the individuals in the best
position to have knowledge of the representations and warranties made herein,
and that no other representative of Seller is likely to have information
regarding the representations and warranties set forth in this Article 5 which
would be superior to or more comprehensive than that of the Designated
Representatives. As used herein, the term "Designated Representatives" shall
refer only to Eric L. Smith, Vice President of Operations of Armada Hoffler
Properties, Inc., and Christopher Odle, Vice President of Development of Armada
Hoffler Properties, Inc.

 

5.3           Survival of Seller's Representations and Warranties. All
representations and warranties of Seller in this Section 5.1 shall survive
Closing for a period of nine (9) months after Closing. If any of Seller's
representations and warranties contained in Section 5.1 are determined to be
untrue or incorrect, then Seller shall indemnify and hold Purchaser harmless
from and against any and all actual losses, damages, costs, liabilities or
expenses (including, without limitation, reasonable attorney's fees) incmTed by
Purchaser and arising from the representation or warranty being untrue or
incorrect respect in an amount not to exceed a total of Six Hundred Fifty
Thousand and 00/100 Dollars ($650,000.00); provided that Seller shall not be
liable for indirect, special, punitive or exemplary damages of any nature
whatsoever. The obligations in this Section 5.3 will expire and be of no further
force or effect once a period of nine (9) months after Closing has elapsed.

 

5.4           Covenants of Seller. Seller hereby covenants with Purchaser, from
the Effective Date (or Inspection Date where indicated) 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 consistent with the manner in which Seller has operated and
maintained the Property prior to the date hereof and otherwise consistent with
the requirements of any loan secured by the Property.

 

 23 

 

 

(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 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 thirteen ( 13) months. In
all cases, Seller shall retain the discretion to set rent rates, concessions,
promotions and other terms of occupancy, provided Seller shall grant no more
than one (1) month free rent concession for each new lease (to be taken up front
and not amortized over the course of the lease), and 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 and further
provided, however, after the Inspection Date, unless Purchaser agrees otherwise
in writing, Seller shall not lease units for amounts less than the amounts shown
on Schedule 5.4(b) to this Agreement, Each such new lease or renewal entered
into by Seller shall constitute a "Lease" for purposes of this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, following
the expiration of the Inspection Period, Purchaser shall have the right, but not
the obligation, to replace Seller's leasing and marketing teams ("Seller's
Leasing Agent") with leasing and marketing teams of Purchaser's affiliated
property management company, TriBridge Residential Property Management Advisors,
LLC, a Georgia limited liability company authorized to do business in North
Carolina, whereupon Purchaser shall have the exclusive right to conduct leasing
and marketing activity with respect to the Property. If Purchaser exercises its
right to replace Seller's Leasing Agent and conduct leasing and marketing
activity with respect to the Property, and if replacement of Seller's Leasing
Agent causes Seller to be obligated to make any payments to Seller's Leasing
Agent, then Seller and Purchaser will each pay fifty percent (50%) of these
payments; provided that Purchaser's obligation will not exceed $10,000.00. For
avoidance of doubt, Seller's property manager shall continue to perform all
other aspects of property management with respect to the Property.

 

(c)          Maintenance of Insurance. Seller shall keep the Improvements
insured against loss or damage for the full replacement cost thereof, and shall
maintain rental loss insurance covering loss of rents in an amount of not less
than $2,000,000.00 of coverage.

 

(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 and otherwise in a manner consistent with
prudent owners of similar properties.

 

(e)          Preparation of Vacant Units for Lease. Three (3) business days
prior to Closing, Seller and Purchaser shall reasonably determine the number of
formerly occupied apartment units which have subsequently been vacated that are
not in rent ready condition. A formerly occupied vacant apartment unit shall be
"rent ready" if its condition is consistent with the condition of vacant units
currently being marketed to and accepted for rental by tenants of comparable
vacant apartment units in the Property and such units have a full complement of
operating appliances and components. If Seller and Purchaser reasonably
determines that fewer than all formerly occupied vacant apartment units are in a
rent ready condition at Closing, Purchaser shall accept such apartment units in
"as-is" condition at Closing and Purchaser shall receive a credit (the
"Estimated Rent Ready Credit") against the Purchase Price at Closing in an
amount equal to $750.00 for each such formerly occupied vacant apartment unit
which is not in a rent ready condition.

 

 24 

 

 

(f)          [Reserved]

 

(g)          Provide Copies of Notices. Seller shall furnish Purchaser with a
copy of all written notices received by Seller from any governmental authority
of any violation of any law, statute, ordinance, regulation or order of any
governmental or public authority relating to the Property within five (5)
business days following Seller's receipt thereof, but, if received by such date,
in no event later than two (2) business days prior to the Closing Date. Seller
shall similarly furnish Purchaser with a copy of all written notices received by
Seller from tenants which allege any default by Seller under the Leases.

 

(h)          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.

 

(i)          Execution of New Contracts. Seller shall not, without Purchaser's
prior written consent in each instance (which consent shall not be unreasonably
withheld, conditioned or delayed during the Inspection Period but which
thereafter may be withheld in Purchaser's sole discretion), (x) materially amend
or terminate any of the Designated Service Contracts after Purchaser has
notified Seller of the Service Contracts that Purchaser will require be
Designated Service Contracts in accordance with Section 5.4(k) or (y) enter into
any other contract or agreement (excluding Leases entered into pursuant to
Section 5.4(b)) that will be an obligation affecting the Property or binding on
Purchaser after the Closing. Subject to the foregoing, (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 and enter into Leases as provided in Section
5.4(b) hereof.

 

(j)          Maintenance of Permits. Seller shall 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.

 

(k)          Management Contracts and Listing Agreement. As of Closing all
property management contracts and listing agreements (if any) pertaining to the
Property shall have been terminated.

 

(1)         Designated Service Contracts. "Designated Service Contracts" means
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 (the "Designated Service Contracts.") At Closing,
Seller will cause the Service Contracts which Purchaser has elected not to have
assigned to Purchaser, 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; provided, however, that Seller shall be responsible for all fees
incurred after the Closing Date arising from such Service Contracts which are
terminated after the Closing Date). The provisions of this Section 5.4(k) shall
survive Closing.

 

 25 

 

 

(m)         Construction Covenants.

 

i.             Seller covenants and agrees to cause construction of the
Improvements to be completed in accordance with the Plans and Specifications.
From and after the Effective Date, except for Permitted Written Change Orders
(hereinafter defined), Seller shall not modify the Plans and Specifications in a
manner which has a material adverse effect on the operation, structure,
aesthetics or value of the Property without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed. Seller shall be entitled to modify the Plans and Specifications in
connection with Permitted Written Change Orders without Purchaser's consent.
"Permitted Changes" shall mean: [a] changes or modifications expressly required
by any governmental authority; and [b] changes to the Plans and Specifications
made following the Effective Date and which are consistent with any changes to
the Plans and Specifications made or improvements constructed prior to the
Effective Date, which changes or improvements, to the extent material in nature,
have been memorialized in change orders that were delivered to or made available
to Purchaser as part of the Seller's Deliveries. Purchaser shall engage Zurn
Brunnen, Inc. ( “Construction Consultant") to serve as Purchaser's construction
consultant to monitor the progress and workmanship of construction of the
Improvements in accordance with the Plans and Specifications. Seller agrees that
Construction Consultant shall have the right to inspect the progress of the
construction of the Improvements during normal business hours not more than once
per calendar month accompanied by a representative of Seller after not less than
two (2) business days' prior written notice to Seller's Designated
Representative. The Construction Consultant's sole role is to advise Purchaser
as to the status of construction of the Improvements and the Construction
Consultant will not have any right to direct, or interfere with, any activities
of the Architect, the Engineer, the General Contractor or any sub-contractor or
vendor and will not have any communication (whether verbal, written, electronic
or of any other nature) with any of these parties or Seller's lender or
representatives of Seller's lender without Seller's prior written consent (other
than with Architect in furtherance of the formulation of the Punchlist Items
pursuant to Section 5.4(m)(iv) below). In no event shall Construction Consultant
or Purchaser have any liability to Seller or any other party as a result of
Construction Consultant's monitoring and/or approval or disapproval of any
aspect of the construction of the Improvements; provided, however, the preceding
sentence shall not operate to relieve Purchaser from its obligations under this
Agreement.

 

 26 

 

 

ii.           All permits necessary for the construction of the Improvements in
connection with the development of the Property will be obtained by Seller
("Permits"). Seller will obtain final certificates of occupancy with regard to
all Improvements constructed pursuant to the Permits.

 

iii.           The Improvements upon the Property will comply with: (i) all
applicable zoning and land use statutes, environmental, building, fire, health,
sanitation and other similar codes and regulations, including, without
limitation, the Americans with Disabilities Act and all state and local building
codes, and (ii) the Permits.

 

iv.           Prior to or promptly after (but in no event later than five days
following) substantial completion of the Improvements, Seller agrees to cause
Seller's architect (the "Architect") to inspect and prepare, which inspection
and preparation shall be subject to the participation, input and reasonable
written approval of the Construction Consultant, a punchlist with respect to the
Improvements detailing outstanding items of finish or other aspects of the
Improvements which remain to be completed prior to final completion of the
Improvements in accordance with the Plans and Specifications (the "Punchlist
Items"); Seller covenants and agrees to proceed to promptly (but in no event
later than 30 days following the issuance of the punchlist) cure or correct, or
cause the General Contractor to cure or correct, such Punchlist Items. If any
Punchlist Items have not been cured or corrected prior to Closing, as reasonably
determined by the Architect and Construction Consultant, then at Closing: (i)
Seller, Purchaser and the Title Company shall execute and deliver a Punchlist
Escrow Agreement (the "Punchlist Escrow Agreement") in the form set forth on
Schedule 5.4(1) attached hereto; and (ii) Seller shall escrow with the Title
Company an amount equal to 150% of the estimated cost of completing the
Punchlist Items as reasonably determined by the Architect and the Construction
Consultant (the "Escrowed Funds"), to be held and disbursed by the Title Company
in accordance with the provisions of the Punchlist Escrow Agreement.

 

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

 

(a)          Organization and Authority. Purchaser has been duly organized and
validly exists in good standing as a limited liability company under the laws of
the State of Georgia and will be duly authorized to conduct business in the
State of North Carolina prior to the Closing. 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, fraudulent conveyance and other laws affecting the rights of
creditors generally; and (ii) the exercise of judicial discretion in accordance
with general principles of equity

 

 27 

 

 

(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)          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:

 

(i)          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).

 

(ii)         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.

 

 28 

 

 

(iii)        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 (i) the
Specially Designated Nationals and Blocked Persons List contained in Appendix A
to 31 C.F.R., Subtitle B, Part V; (ii) the Denied Persons List, the Entity List,
and the Unverified Parties List maintained by the United States Department of
Commerce; (iii) the List of Terrorists and List of Debarred Parties maintained
by the United States Department of State; and (iv) 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.

 

5.6           Survival 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 nine (9) months after Closing. If any of
Purchaser's representations and warranties contained in Section 5.5 are
determined to be untrue or incorrect in any material respect, then Purchaser
shall indemnify and hold Seller harmless from and against any and all actual and
direct loss, damage, cost or expense incurred by Purchaser and arising solely
from the representation or warranty being untrue or incorrect in any material
respect in an amount not to exceed a total of Six Hundred Fifty Thousand and
00/100 Dollars ($650,000.00) provided that Purchaser shall not be liable for
indirect, special, punitive or exemplary damages of any nature whatsoever. The
obligations in this Section 5.6 will expire and be of no further force or effect
once a period of nine (9) months after Closing has elapsed.

 

ARTICLE 6

 

DEFAULT

 

6.1           Default 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. This Section 6.1 is subject to Section 6.4 hereof.

 

 29 

 

 

6.2           Default 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 and reimbursement of the amount of all direct
third party out-of-pocket costs and expenses actually incurred, and documented
by paid invoices and evidence of payment, by Purchaser in connection with this
Agreement, including reasonable attorneys' fees, and the inspection, acquisition
and financing of the Property, including, without limitation, any forfeited good
faith and/or rate lock deposits, which return and reimbursement shall operate to
terminate this Agreement and release Seller from any and all liability
hereunder, (b) waive the default by Seller and close the purchase
notwithstanding the default by Seller, or (c) to enforce specific performance of
Seller's obligation to execute and deliver the documents and perform its
obligations as contained hereunder; provided, however, in the event specific
performance is unavailable as a remedy to Purchaser because of Seller's
intentional acts (such as conveying the Property to a third party prior to
Closing), then Purchaser shall be entitled to bring an action against Seller for
its actual damages (i.e. for the benefit of Purchaser's bargain) .For purposes
of clarity, if Seller sells the Property to a third party in breach of this
Agreement then specific performance would not be available as a remedy and the
Purchaser's recoverable damages under sub-clause (c) above would be equal to the
purchase price Seller received minus the Purchase Price. Purchaser waives and
releases any right to (and hereby covenants that it shall not) sue Seller to
recover any damages of any nature or description other than as set forth in this
Section 6.2. This Section 6.2 is subject to Section 6.4 hereof.

 

6.3           Notice 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 ten ( 10) business days after
receipt of such notice; provided, however, that this Section 6.3 (i) 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, (ii)
shall not have the effect of extending the Closing Date or the due date of any
Earnest Money deposit hereunder.

 

6.4           Recoverable Damages. Notwithstanding Sections 6.1 and 6.2 hereof,
in no event shall the provisions of Sections 6.1 or 6.2 limit (i) either
Purchaser's or Seller's obligation to indemnify the other party or any other
indemnified party, or the damages recoverable by the indemnified party against
the indemnifying party due to a party's express obligation to indemnify in
accordance with Sections 3.1, 5.3, 5.6 or 8.2 of this Agreement or in any
indemnity contained in any of the documents delivered by either party at
Closing, 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. Notwithstanding any provision
of this Agreement or applicable law to the contrary, under no circumstances will
any party be liable for any indirect, special, punitive or exemplary damages for
any claim or dispute related to or arising under this Agreement.

 

 30 

 

 

ARTICLE 7

 

RISK OF LOSS

 

7.1        Damage. In the event of "damage" to the Property or any portion
thereof prior to Closing, 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 (subject to any lender's
refusal to pay insurance proceeds or condemnation awards to Seller, in which
event Purchaser shall have ten ( 10) days from receipt of notice of such refusal
to elect whether 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 pay over or 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,
then Purchaser may not terminate this Agreement and Seller shall pay over or
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 to Purchaser's reasonable satisfaction to the
condition that existed prior to such damage 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
Purchaser and approved by Seller, 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. Seller agrees that the
assignment of insurance proceeds contemplated under this Section 7.1 shall
include, without limiting the generality of the foregoing assignment, insurance
proceeds from any loss of income or rents insurance policy maintained by Seller.
The Closing shall be extended for a period of up to an additional thirty (30)
days in the event any lender fails to make a decision regarding any insurance
proceeds or condemnation awards on or before the then scheduled Closing Date.

 

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

 

(a)          "damage" means (i) physical damage to or destruction of all or any
part of the Real Property by reason of fire, earthquake, tornado, flood, water
intrusion 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

 

(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 Purchaser and reasonably
approved by Seller, be equal to or greater than Six Hundred Twenty Five Thousand
and Noll 00 Dollars ($625,000.00), (ii) any damage due to a condemnation or
conveyance in lieu of condemnation which permanently and materially impairs the
current use or value of the Property, access to the Property from public roads
or the number of parking spaces, or (iii) any damage which results in Seller's
lender withholding or denying insurance proceeds or condemnation awards to
Seller and applying the same to a principal paydown of any loan secured by the
Property.

 

 31 

 

 

7.3          Seller'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, and the period within which Purchaser
must make any election hereunder shall be extended for ten (10) days after
receipt of the applicable insurance policies.

 

ARTICLE 8

 

COMMISSIONS

 

8.1           Broker's Commission. The parties acknowledge that Cushman &
Wakefield Thalhimer, of North Carolina, Inc. ("Broker") represents Purchaser as
broker in connection with the sale of the Property by Seller to Purchaser, and
is to be compensated for its services solely by Purchaser pursuant to a separate
agreement.

 

8.2           Representation and Indemnitv. 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, with respect to Purchaser) so as
to create any legal right or claim in any such broker, agent or salesman (other
than Broker, with respect to Purchaser) 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. 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).

 

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

 

ARTICLE 9

 

RESERVED

 

ARTICLE 10

 

ESCROW AGENT

 

10.1         Investment 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. 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, 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 day's notice.

 

 32 

 

 

10.2         Payment 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. Notwithstanding the forgoing, in the
event Purchaser terminates this Agreement pursuant to its rights under Section
3.2 of this Agreement, Escrow Agent shall immediately refund the Earnest Money
to Purchaser (less the sum of One Hundred and No/00 Dollars ($100.00) which
shall be paid to Seller in consideration of this Agreement), and Seller hereby
agrees that its consent shall not be required for Escrow Agent to refund such
Earnest Money.

 

10.3         Exculpation 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. Subject to the
foregoing, 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. Seller and Purchaser are aware the Federal
Deposit Insurance Corporation (FDIC) coverages apply to a maximum amount of
$250,000.00 per depositor (as may be modified by the FDIC from time to time).
Further, Seller and Purchaser do not and will not hold Escrow Agent liable for
any loss occurring which arises from bank failure or error, insolvency or
suspension, or a situation or event which falls under the FDIC coverages.

 

10.4         Stakeholder. 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 Durham, North Carolina 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.

 

 33 

 

 

10.5         Interest. All interest and other income 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
27-4292135.

 

10.6         Execution 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

 

11.1         Assignment. 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 reasonable discretion. Notwithstanding the
foregoing, Purchaser may assign this Agreement at Closing to a Permitted
Affiliate without Seller's consent, and Seller or Purchaser may assign its
rights under this Agreement to a reputable exchange accommodation to facilitate
a tax deferred exchange. For purposes hereof, the term "Permitted Affiliate"
means an entity that owns or is owned by, in whole or in part, or controls, is
controlled or managed by, or is under common control, exclusively or
non-exclusively, with Purchaser, and/or those persons controlling and/or
managing Purchaser. If an assignment occurs in accordance with this Section
11.1, then the assignor will be jointly and severally liable with the assignee
for all obligations under this Agreement.

 

11.2         Notices. 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 electronic mail (provided a copy of such notice is deposited
with an overnight courier for next business day delivery) or mailed by United
States registered or certified mail, return receipt requested, postage prepaid
and addressed to each party at its address as set forth below. Any such notice
shall be considered given on the date of such hand or courier delivery,
electronic mail 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,
or deposit in the United States mail, 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. Copies of notices are for informational purposes only, and
a failure to give or receive copies of any notice shall not be deemed a failure
to give notice.

 

 34 

 

 

The parties' respective addresses for notice purposes are as follows. Notice by
telephone shall not be effective. If to Purchaser:

 

If to Purchaser:        

TriBridge Residential, LLC

1575 Northside Drive NW

Suite 200, Building 100

 

Atlanta, Georgia 30318

Attention: Steve Broome

steveb@tribridgeresidential.com

    with a copy to:     Nelson Mullins Riley & Scarborough, LLP   Atlantic
Station   201  17th South Street NW, Suite 1700   Atlanta, Georgia 30363  
Attention: Eric Wilensky, Esq.    eric.wilensky@nelsonmullins.com     If  to
Seller or Parent: Eric L. Smith, Vice President of Operations   Armada Hoffler
Properties, Inc.  

222 Central Park Avenue, Suite 2100

Virginia Beach, Virginia 23462

esmith@armadahoffler.com

    with a copy to: C. Grigsby Scifres, Esq.   Williams Mullen  

222 Central Park Avenue, Suite 1700

Virginia Beach, Virginia 23462

gscifres@williamsmullen.com

    If   to Escrow Agent:   S. Marcus Calloway  

Calloway Title & Escrow, L.L.C.

4170 Ashford-Dunwoody Road

  Suite 285  

Atlanta, Georgia 30319

MarcusC@titlelaw.com

 

 35 

 

 

11.3 Modifications. 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 telecopy or 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 telecopied or emailed signature
and shall accept the telecopied or emailed signature of the other party to this
Agreement or any formal amendment.

 

11.4         Calculation 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 6:00 p.m., Eastern time.

 

11.5         Successors and Assigns. Subject to Section 11.1 hereof, the terms
and provisions of this Agreement are to apply to and bind the permitted
successors and assigns of the parties hereto.

 

11.6         Entire Agreement. This Agreement, including the Joinder and
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.

 

11.7         Further 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. The provisions of this Section 11.7 shall survive Closing.

 

11.8         Counterparts. 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.

 

11.9         Severability. 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.

 

11.10       Applicable 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 the state of North Carolina. 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 11.10 shall survive the Closing of the transaction
contemplated by this Agreement.

 

 36 

 

 

11.11         No 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 (other than Escrow Agent as to the provisions of Article 10).

 

11.12         Schedules. 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  l.l(e) Rent Roll Schedule  1.1(f) Plans and
Specifications Schedule 1.6(a) Escrow Agent Wiring Instructions Schedule  3.l(e)
Seller's  Deliveries Schedule 4.2(a) Form of Special Warranty Deed Schedule
4.2(b) Form of Bill of Sale and Assignment Schedule 4.2(c) Form of Notice to
Tenants Schedule 4.2(d) Form of Seller's Closing Certificate Schedule 4.2(f)
FIRPTA Affidavit Schedule 5.1 Seller's Disclosure  Statement Schedule 5.1(j)
Schedule of Service Contracts Schedule 5.l(k) List of Insurance Policies
Schedule 5.4(b) Leasing Guidelines Schedule 5.4(1) Punchlist Holdback Escrow
Agreement Schedule  11.20(b) Construction Deliveries Schedule   1l.20(c) Form of
Consent to Assignment

 

11.13         Captions. 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.

 

11.14         Construction. 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.

 

11.15         Termination 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.

 

 37 

 

 

11.16         Survival. The provisions of this Agreement shall survive Closing
and shall not be merged into the execution and delivery of the Deed; 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.

 

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

 

11.18         Covenant Not to Record. Purchaser shall not record this Agreement
or any memorandum or other evidence thereof; provided, however, the foregoing
covenant shall not preclude Purchaser from filing a lis pendens in connection
with a suit for specific performance brought pursuant to Section 6.2 of this
Agreement.

 

11.19         Reserved.

 

11.20         Construction Matters. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser and Seller hereby agree that the following
representations, warranties and covenants of Seller (collectively the
"Construction Obligations") constitute a material inducement of Purchaser's
willingness to enter into the transaction contemplated herein, and Purchaser's
furnished consideration is in exchange for, in part, the receipt of the
following: Seller shall cause all amounts due in connection with the
Construction Contracts (as hereinafter defined) to be paid in full on or prior
to Closing, and shall provide final lien waivers from all vendors and
contractors who are parties to the Construction Contracts at Closing (with
exception only for those certain contractors performing work in connection with
any Punchlist Items to be completed following Closing, in which event, final
lien waivers shall be obtained on or prior to Closing for all completed work,
and for such work that remains incomplete in connection with Punchlist Items,
Seller shall obtain final lien waivers upon payment of such contractors from the
Escrowed Funds pursuant to the Punchlist Escrow Agreement (which shall be an
obligation that survives Closing).

 

(b)          Construction-Related Deliveries. In addition to and not in
limitation of the items to be delivered to Purchaser in accordance with Section
3.l (e), Seller shall deliver true, correct and complete copies of the items
attached as Schedule l 1.20(b) attached hereto and by this reference made a part
hereof.

 

 38 

 

 

(c)          Assignments. At Closing, Seller shall transfer, convey and assign,
or cause its affiliate Armada Hoffler Development Company, to transfer, convey
and assign, to Purchaser, to the extent expressly permitted under such documents
without the consent of any party to the document other than Seller or Armada
Hoffler Development Company, or if a third party consent is required, to the
extent Seller has obtained such consent, all of Seller's rights, interests and
remedies in and to (i) that certain DBIA Standard Form of Agreement Between
Owner and Design-Builder - Cost Plus Fee with an Option for a Guaranteed Maximum
Price between Seller, as Owner, and AHP Construction, LLC as Contractor
("Contractor") dated as of July 19, 2013, together with that certain DBIA
Standard Form of General Conditions of Contract Between Owner and
Design-Builder, as modified or clarified, which is a part thereof (collectively
the "GMAX"), and (ii) that certain agreement dated February 3, 2012, between
Armada Hoffler Development Company, and Coulter Jewell Thames, P.A., respecting
the provision of professional engineering services in connection with the
construction of the Improvements at the Property (the "Engineer's Contract").
For purposes of clarification, there is no separate architect agreement as the
GMAX constitutes a design/build agreement. The GMAX and the Engineer's Contract
are hereinafter referred to as the ("Construction Contracts"). If any
Construction Contract requires the consent of a third party as a condition to
any assignment thereof, then prior to the expiration of the Inspection Period,
Seller shall use reasonable efforts (and, to the extent such party is an
affiliate of Seller, best efforts) to obtain and deliver to Purchaser the
written consent of the Contractor to the assignment to Purchaser of the GMAX and
the written consent of Coulter Jewell Thames, P.A. to the assignment to
Purchaser of the Engineer's Contract; provided that Seller will have no
liability to Purchaser if the Engineer refuses to consent to the assignment. The
form of consent shall be substantially identical to the document set forth in
Schedule l 1.20(c). To the extent a party's consent to the assignment of a
Construction Contract is required, and to the extent a party is not willing to
provide its consent to the full assignment of the Construction Contract, but
rather an assignment of the warranty rights thereunder, then Seller and
Purchaser agree that the terms of this Section 11.20 and the documents attached
as Schedules 4.2(b) and ll.20(c) shall be modified to reflect the assignment of
warranty rights, rather than the full assignment of the Construction Contract.

 

11.21 Confidentiality. Each party is aware, and will advise its Representatives
who are informed of the matters that are the subject of this Agreement, of the
restrictions imposed by the United States securities laws and other applicable
laws on the purchase or sale of securities by any person who has received
material, non-public information and on the communication of such information to
any other person when it is reasonably foreseeable that such other person is
likely to purchase or sell such securities in reliance on such information.

 

Seller is an affiliate of Armada Hoffler Properties, Inc. ("AHP"). AHP is a
publicly traded real estate investment trust. The fact that Purchaser has
entered into this Agreement may be material, non-public insider information
subject to restrictions imposed by the United States securities laws and other
applicable laws on the purchase and sale of the securities of AHP. Purchaser
will keep confidential the existence of this Agreement and all matters related
to it, and, except with the prior written consent of AHP, will not disclose the
existence of this Agreement to any person other than to its Representatives who
have a need to know, and will not use or allow any Purchaser Representatives to
use the existence of this Agreement for any of the following purposes: (x) the
trading in any securities of AHP, (y) the trading in any securities that are
convertible into or exchangeable for securities of AHP, or (z) any derivative
with respect to securities of AHP, whether any such transaction described in
clauses (x), (y) or (z) above is to be settled by delivery of securities, in
cash or otherwise, until this Agreement has been publicly disclosed by AHP
through a press release or by a filing with the U.S. Securities and Exchange
Commission.

 

Neither Purchaser nor any of its Representatives will knowingly disclose to any
of Seller's tenants, employees, leasing agents, brokers or other representatives
the existence of or any other information concerning this Agreement. Purchaser
shall instruct each of its Representatives having access to any of Seller's
tenants, employees, leasing agents, brokers or other representatives of the
requirements of this covenant. Each party will be responsible for any actions or
omissions by its Representatives which are not in accordance with the provisions
of this Section 11.21.

 

 39 

 

 

As used in this Agreement, "Representatives" of a person means the person's
directors, officers, members, managers, partners, employees, agents, affiliates,
business units and divisions, financial advisors, accountants, current or
prospective lenders or investors, consultants, attorneys, real estate brokers
(it being agreed and acknowledged, for the avoidance of doubt, that Purchaser
may engage one or more real estate brokers for the purposes of obtaining
brokers' opinions of value on the Project) or agents and other representatives.

 

11.22 Tax-Deferred Exchange. Purchaser and Seller acknowledge that either party
may wish to structure this transaction as a tax-deferred exchange of like-kind
property within the meaning of Section 1031 of the Internal Revenue Code. Each
party agrees to reasonably cooperate with the other party to effect this
exchange; provided, that (a) the cooperating party shall not be required to
acquire or take title to any exchange property, (b) the cooperating party shall
not be required to incur any expense or liability whatsoever in connection with
the exchange, including, without limitation, any obligation for the payment of
any escrow, title, brokerage or other costs including attorneys' fees incurred
with respect to the exchange, (c) no substitution of the effectuating party
shall release it from any of its obligations, warranties or representations set
forth in this Agreement or from liability for any prior or subsequent default
under this Agreement by the effectuating party, its successors, or assigns,
which obligations shall continue as the obligations of a principal and not of a
surety or guarantor, (d) the effectuating party shall give the cooperating party
at least two (2) business days prior notice of the proposed changes required to
effect such exchange and the identity of any party to be substituted in the
escrow, (e) the effectuating party shall be responsible for preparing all
additional agreements, documents and escrow instructions (collectively,
"Exchange Documents") required by the exchange, at its sole cost and expense,
(f) the effectuating party shall be responsible for making all determinations as
to the legal sufficiency, tax considerations and other considerations relating
to the proposed exchange, the Exchange Documents and the transactions
contemplated thereby, and the cooperating party shall in no event be responsible
for, or in any way be deemed to warrant or represent any tax or other
consequences of the exchange transaction, and (g) the election to effect such an
exchange shall not delay the Closing of the transaction as defined herein.

 

[SIGNATURES ON THE FOLLOWING PAGES]

 

 40 

 

 

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

 

  SELLER:       AH DURHAM APARTMENTS, LLC   By: ARMADA HOFFLER MANAGER, LLC,  
Its Manager         By: /s/ Eric L. Smith,     Eric L. Smith, Manager

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 1 

 

 

  PURCHASER:       TRIBRIDGE RESIDENTIAL, LLC,   a Georgia limited liability
company         By: /s/ Jim Schrader   Name: Jim Schrader   Title: VP

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 2 

 

 

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

 

  ESCROW AGENT:       CALLOWAY TITLE & ESCROW, LLC         By: /s/ S. Marcus
Calloway   Name: S. Marcus Calloway   Title: Manger

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

Calloway Title & Escrow, L.L.C., as Escrow Agent, is a party to such Purchase
and Sale Agreement for the limited purposes set forth therein.

 

 3 

 

 

PARENT JOINDER

 

This joinder (this "Joinder") is attached to and made a part of the foregoing
Agreement and all terms capitalized but not defined herein shall have the
respective meanings given to them in the Agreement. The undersigned, ARMADA
HOFFLER PROPERTIES, INC. a Maryland corporation ("Parent"), for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, hereby duly executes with proper authority and joins in the
execution of this Agreement, and agrees that it is jointly and severally liable,
as a principal and not as a surety, for Seller's indemnity obligations under:
(i) Sections 5.3, 4.4 and 8.2 of the Agreement, and (ii) the Bill of Sale and
Assignment and Assumption of Leases and Service Contracts to be delivered by
Seller to Purchaser at Closing under the Agreement. Purchaser shal1 have the
right to proceed directly against the undersigned without first making written
demand to Seller (and without any obligation to bring suit against Seller) for
the satisfaction of any such obligations,

 

The undersigned is an indirect owner of Seller, will derive substantial benefits
from the transactions described in the Agreement and acknowledges that the
execution of this Joinder is a material inducement and condition to Purchaser's
execution of the Agreement. The undersigned represents and warrants that it has
the legal right, power, authority and capacity to execute this Joinder, that
such execution does not violate the organizational documents of, or any other
agreement or instrument by which the undersigned is bound, and that this Joinder
is binding and enforceable against the undersigned.

 

The undersigned unconditionally waives any guarantor or suretyship defenses that
might otherwise be available to it with respect to its obligations under this
Joinder.

 

The provisions set forth in Sections 11.2 through 11.19, both inclusive, of the
Agreement are hereby incorporated by reference into this Joinder as if fully set
forth herein, provided that the undersigned shall be "Seller", as applicable,
under such Sections.

 

  ARMADA HOFFLER PROPERTIES, INC.,     a Maryland corporation             By:
/s/ Eric L. Smith     Eric L. Smith     Vice President of Operations & Secretary
 

 

 4 

 

 

Schedule 1.l(a)

 

LEGAL DESCRIPTION OF THE LAND

 

BEING ALL THAT CERTAIN PA RCEL CONTAIN ING APPROXIMATELY 2.0994 ACRES AS SHOWN
ON A MAP ENTITLED "EXEMPT FINAL RECOMBIN ATION PLAT 300 J ACKSON STREET & 501
WILLARD ST" RECORDED IN PLAT BOOK 192, PAGE 3 DURHAM COUNTY REGISTRY.

 

WHICH IS MORE FULLY DESCRIBED AS:

 

BEGINNING AT A PK N A IL ON THE EASTERN RIGHT OF WAY OF WILLARD ST; THENCE W ITH
A CURVE TURNING TO THE RIGHT WITH AN ARC LENGTH OF 31 .04', WITH A RADIUS OF
20.00', WITH A CHORD BEARING OF N 45°11'41" E, WITH A CHORD LENGTH OF 28.02' TO
AN EXISTING IRON PIPE; THENCE N 89°41 '27" E A DISTANCE OF 185.08 TO AN EXISTING
IRON PIPE; THENCE WITH A CURVE TURNING TO THE RIGHT WITH AN ARC LENGTH OF
114.62', WITH A RADIUS OF 190.37', WITH A CHORD BEARING OF S 73°14'22" E, WITH A
CHORD LENGTH OF 112.90' TO AN EXISTING IRON PIPE; THENCE S 59°12'33" E A
DISTANCE OF 1 1 1.39' TO AN EXISTING IRON PIPE; THENCE S 30°47'27" W A DISTANCE
OF 90.76' TO AN EXISTING IRON PIPE; THENCE S 27°33'27" W A DISTANCE OF 158.72'
TO AN EXISTING IRON PIPE; THENCE N 59°12'33" W ADISTANCE OF 113.65' TO AN
EXISTING IRON PIPE; THENCE N 89°21 '33" W A DISTANCE OF 193.78' TO AN EXISTING
IRON PIPE; THENCE N 00°38'37" E A DISTANCE OF 227.18' TO AN EXISTING IRON PIPE;
WHICH IS THE POINT OF BEGINNING, HAYING AN AREA OF 91 ,449.07 SQUARE FEET OR
2.099 ACRES AS SHOWN ON PLAT PREPARED BY COULTER JEWELL THAMES PA RECORDED IN
DURHAM COUNTY REGISTRY IN BOOK 192 PAGE 3.

 

 5 

 

 

Schedule 1.l(d)

 

INVENTORY OF TANGIBLE PERSONAL PROPERTY [TO BE

 

ATTACHED]

 

 6 

 

 

PERSONAL PROPERTY INVENTORY

 

Whetstone Apartments-As of 10/6/2014

 

Whetstone Fitness Center Inventory

 

2-True Fitness Commercial Series 400 Treadmills 2-True

Fitness Commercial Series 400 Ellipticals

1-True Fitness Commercial Series 400 Recum bent

1-Apollo 3-Stack I 3 -Station Multi Gym

1-Evolution Deluxe 3-Teir Dumbbell Rack 5-60lbs 1-

Evolution Deluxe Adjustable Bench w/ wheels

1-York Barbell Rubber Hex Dumbbell Set 5-60lbs

1-TRX 7' Mu lti-Mou nt with 3' wall banner

3-TRX Commercial Suspension Trainer

1-Medicine Ball Rack w/ 6 Med Balls 4-141bs

1-Body Sport 55cm Stability/Core Ball

1-Body Sport 65cm Stability/Core Ball

2-Aeromat Stability Ball Storage Base

1 -Commercial BOSU Balance Ball

 

Office

 

3- Office desks

3- Office Chairs

2 -Club guest Chairs

5- Wood and cloth Chairs 3 - End table

1 -Conference table

6- Chairs for conference table

1-Break room dining table with 2 Chairs

1- 4 drawer tan metal file cabinet

1- 2 drawer black metal file cabinet

3- Del l Desk top computer

7- Pieces of wall art 3-Desk Lamps

1- Table Lamp

1 - Camera

1-Key Trak

 

Lobby En tra nce

 

1 - Love Seat

1- Chair

1- Magazi ne Rack

1- Coffee Table

2 - Large vases with Sticks

3- Pieces of wall art

1 - Area rug

1 - Lamp

 

Eleva tor Lobby

 

1 – Sofa Table

 

 

 

 

1 – Mirror

2 – Lamps

1 – Bowl

 

Model

 

1- Entry Rug

2 – Entry Square Wall Mirrors

1 – Fruit bowl with lemons and limes

5 – Cook Books

2 – Glass Jars

1 – Small wooden counter wine rack

3 – Glass bottles with corks

1 – Tea Pot

2 – Glass Canisters

1 – Calendar with pasta set

2 – Bottles of Soap

2 – Bottles of Olive Oil

3 – Place settings

1 – Kitchen area rugs

 

Model Bathroom

 

2 – Wall Art bathroom entry

2 – Bathroom Wall Art

1 – Shower Curtain

1 – Bathroom rug

2 – Candles

1 – Soap dispenser

1 – Tissue Holder

 

Model Living room

 

3 – Bar stools

1 – Area Rugs

1 – Couch

1 – Wall Art

1 – Fake TV

2 – Vases

1 – Plate with Stand

4 – Pillows

1 – Chair

1 – Throw

1 – Fake Plant

1 – TV tray

1 – End table

1 – Lamp

1 – Picture frame

 

Model Bedroom

 

1 – Queen bed headboard and frame

1 – Queen mattress and box spring

 

 2 

 

 

1 – Queen comforter set

1 – Night Stand

1 – Lamp

5 – Books

1 – Floor Lamp

1 – Full length hanging mirror

1 – Dresser

1 – Fake TV

1 – Set of Curtains

1 – Lamp

1 – Wire Wall art

2 – Small print wall art

2 – Scarves

1 – Hamper

1 – Hanging Shoe Racks

1 – hanging bag

1 – Hat

19 – Wooden hangers

 

Clubroom

 

3 – Large vases on fireplace

5 – Large vases in clubroom

1 – Lamp

3 – Bar stools

2 – Tables

6 – Chairs

2 – Club Chairs

1 – Couch

1 – End Table

1 – Coffee Table

1 – Area Rug

4 - Pillows

5 – Wall Art

1 – Bowl

 

Media Room

 

3 – Chairs

2 - End tables

2 – lamps

3 – Duke Prints

1 – TV Stand

1 – Fake Dice

 

Print Center

 

2 – Desk Chairs

2 – Wall Prints

 

 3 

 

 

Conference Room

 

1 – Table

1 – Round Table

5 – Chairs

1 – Wall art metal

2 – Wall prints

1 – Lamp

 

Appliances in Apartment Units

 

204 – Refrigerators

204 – Dishwashers

204 – Electric Ranges

204 – Microwaves

204 – Stacked Washer/Dryer units

 

 4 

 

 

Schedule 1.l(e)

RENT ROLL

 

[TO BE ATTACHED]

 

 

 

 

Schedule 1.1(f)

PLANS AND SPECIFICATIONS

 

[TO BE ATTACHED]

 

 

 

 

Schedu le 1.6(a)

 

ESCROW AGENT WIRING INSTRUCTIONS

 

[TO BE ATTACHED]

 

 

 

 

CALLOWAY TITLE AND ESCROW, LLC

4170 Ashford Dunwoody Road

Suite 285

Atlanta, Georgia 30319

TELEPHONE (770) 698-7960

TELECOPIER (770) 698-7999

 

WIRE TRANSFER INSTRUCTIONS

 

BB&T

271 17th Street

Suite 800

Atlanta, Georgia 30363

 

ABA 061 113 415

 

International wires:

Swift Code: BRBTUS33

 

Calloway Title and Escrow LLC IOLTA Account Account

 

No. 0005 24173 7545

 

Notify Kendra Huckabee or Katherine Williams upon
receipt at 770-698-7960

 

Please reference Property name, Purchaser, and or Seller.

 

 

 

 

Schedule 3.l(e)

 

SELLER'S DELIVERIES

 

 

 

 

Schedule 4.2(a)

 

FORM OF SPECIAL WARRANTY DEED

 

 

 

 

Schedule 4.2(b)

 

[FORM OF BILL OF SALE AND ASSIGNMENT AND ASSUMPTION

OF LEASES, THE CONSTRUCTION CONTRACTS AND SERVICE CONTRACTS]

 

*  * *

 

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION

OF LEASES, CONSTRUCTION CONTRACTS AND SERVICE CONTRACTS

 

This Bill of Sale and Assignment and Assumption of Leases, Construction
Contracts and Service Contracts (this "Bill of Sale") is made and entered into
this         day of   , 2015, by and between
            a                                                  ("Seller"),
and               a                 ("Purchaser").

 

WITNESSETH:

 

WHEREAS, Seller and Purchaser have previously entered into that certain Purchase
and Sale Agreement, dated ____, 2015 [DESCRIBE AMENDMENTS, IF APPLICABLE] (the
"Agreement"), having Calloway Title & Escrow, L.L.C. and                    as
parties for the limited purposes set forth therein;

 

WHEREAS, concurrently with the execution and delivery of this Bill of Sale and
pursuant to the Agreement, Seller is conveying to Purchaser, by Special Warranty
Deed, (i) those certain tracts or parcels of real property located in Charlotte,
North Carolina, 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 (ii i) 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, 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, computers, equipment, furniture,
furnishings, carpeting, draperies and curtains, tools and supplies, and other
items of tangible persona l 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 any
personal property owned by tenants under the Leases.

 

(c)          "Intangible Property" means (i) al l 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 assignable
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; (iii) resident and tenant tiles for current residents and
tenants as of the Closing Date, and (iv) other 0011-conficlential and
non-proprietary records owned by Seller and used in connection with the
operation of the Real Property or any part thereof (the property described in
this subparagraph l (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 sell s, assigns, transfers and conveys to Purchaser
all of Seller's right, title and interest as land lord in, to and under all
rental agreements, leases and other agreements i n effect as of the date of this
Bill of Sale demising space in or providing for the use or occupancy of the Rea
l Property (the "Leases '), including, without limitation, the Leases listed on
the updated Rent Roll described in Section 4.2(d) of the Agreement, together
with any and all security deposits under the Leases (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 land lord from and after the date of this Bill of Sale.
Purchaser acknowledges that Purchaser shall become solely responsible and liable
as land lord 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 i n 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 du ring 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 l imitation, claims made by tenants with respect to the
Deposits, whether arising before, on or after the date hereof (to the extent
paid to Purchaser or for which Purchaser has received a credit or payment at
Closing).

 

(e)          For purposes of this Paragraph 2, the word "landlord" means the
landlord, lessor or other 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 Selle1·'s right, title and interest in, to and under those se1·vice,
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 Bill of Sale. 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 t han with respect to
the Credited Payments.

 

(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.          Assignment of Construction Contracts.

 

(a)          Seller hereby sells, assigns, transfers and conveys to Purchaser
all of Seller's right, title and interest in, to and under those certain
construction contract agreements set forth on Exhibit D, attached hereto and
made part hereof by this reference (the "Construction Contracts").

 

(b)          Purchaser hereby assumes all of the covenants, agreements,
conditions and other terms and provisions stated i n the Construction Contracts
which, under the terms of the Construction Contracts, are to be performed,
observed, and complied with by the property owner and first arising from and
after the date of this Agreement.

 

 

 

 

(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 failure of Seller
to perform, observe and comply with its obligations under any of the
Construction Contracts arising or accruing during the period prior to the date
hereof, including without limitation, the failure to pay, when due, any party in
accordance with the Construction Contracts.

 

5.          Counterparts. This Bill of Sale 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 Bill of Sale 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 Bill of Sale shall be construed under and
enforced in accordance with the laws of the state in which the Real Property is
located.

 

 

 

 

 

EX ECUTED effective as of the date first above written.

 

SELLER:   PURCHASER:      
                                                                     ,  
                                                                        ,
a                                                                      
a                                                                               
                         By:
                                                                      ,   By:
                              
a                                                                       Name:  
                      Title:                   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

 

D - List of Construction Contracts

 

 

 

 

 

Schedule 4.2(c)

 

Form of Notice to Tenants.

 

NOTICE TO TENANTS

OF

WHETSTONE APARTMENTS

(THE "PREMISES")

 

Dear Tenant:

 

Please be advised that the Premises have this day been conveyed and your lease
(the "Lease") has been assigned by_______________________________("Prior
Owner"), to___________("New Owner").

 

New Owner has assumed all of the obligations under your Lease accruing from and
after this day, which may include any obligations to return your security
deposit in accordance with the terms of your Lease.

 

Until further notice, all correspondence and notices shall be directed, and all
rents, additional rents and other charges under the Lease shall be paid to New
Owner at the addresses attached hereto as Exhibit A.

 

Your security deposit, if any, under the Lease has been transferred to New
Owner.

 

Dated:___________________, 20_.

 

[SIGNATURES FOLLOW]

 

 

 

  

PRIOR OWNER:

 

Signature Page to Notice to Tenants·.

 

 

 

  

NEW OWNER:

 

Signature Page to Notice to Tenants

 

 

 

 

EXHIBIT A

 

Addresses

 

For All Notices and

Payments:

 

With a Copy To:

 

 

 

  

Schedule 4.2(d)

 

FORM OF SELLER'S CLOSING
CERTIFICATE

 

 

Seller's Closing Certificate

THIS CERTIFICATION is made as of                           , 2014 by
                            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________ 2013, 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 l.l(e); 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 for the periods set forth in the Agreement.

 

This certificate is delivered pursuant to Section 4.2(d) of the Agreement.

  

      a     By:       a       By:       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 4.2(0

 

FIRPTA AFFIDAVIT

 

Under Section 1445(a) of the Internal Revenue Code, a purchaser of real property
must withhold tax with respect to certain transfers of property if the Seller of
the property is a "foreign person." To inform TRIBRIDGE RESIDENTIAL, LLC, a
Georgia limited liability company ("Purchaser"), that no withholding by
Purchaser is required with respect to its acquisition of certain property from
AH DURHAM APARTMENTS, LLC, a Virginia limited liability company ("Seller"), the
undersigned hereby certifies the following:

 

1.          Seller is not a "foreign person," "foreign corporation", "foreign
partnership" or "foreign limited liability company" (as those terms are defined
in the Internal Revenue Code and Income Tax Regulations);

 

2.          Seller's Federal Tax Identification Number is:                    

 

3.          Seller's address is:                 AH Durham Apartments, LLC

222 Central Park Avenue, Suite 2100

Virginia Beach, VA 23462

 

4.          Seller intends to file a United States income tax return with
respect to the transfer

 

The undersigned understands that this certification may be disclosed to the
Internal Revenue Service by Purchaser and that any false statement contained
herein could be punished by fine, imprisonment, or both.

 

Under penalties of perjury, we declare that we have examined this certification
and, to the best of our knowledge and belief, it is true, correct and complete.

 

Date:__________ ‘ 2015   AH DURHAM APARTMENTS, LLC     By: ARMADA HOFFLER
MANAGER, LLC,     Its Manager             By:           Eric L. Smith, Manager

 

 

 

  

Schedule 5.1

SELLER'S DISCLOSURE STATEMENT

 

(NONE)

 

 

 

  

Schedule 5.l(j)

 

SCHEDULE OF SERVICE CONTRACTS

 

[to be attached]

 

 

 

 

SERVICE CONTRACTS

 

Whetstone Apartments-As of 10/6/2014

 

1.Advertiser Agreement with Network Communications, Inc. dba Apartment Finder
with a term from 11/1/2014-10/31/2015.

 

2.Advertising Agreement with Consumer Source Holdings LLC dba Apartment Guide,
dated May 12, 2014.

 

3.Internet Advertising Agreement with Apartments, LLC dba Apartments.com dated
May 13, 2014.

 

4.Advertising Agreement with United Advertising Publications, Inc. dba ForRen t
Media Solutions dated September 5, 2014.

 

5.Advertising Agreement with the Chronicle regarding nearDuke.com dated February
24, 2014.

 

6.Cable Internet Agreement with Time Warner Cable dated July W, 2014.

 

7.Service Agreement with Wayne Automatic Fire Sprinklers, Inc. dated August 5,
2014.

 

 

 

  

Schedule 5.l(k)

 

LIST OF INSURANCE POLICIES

 

[to be attached]

 

 

 

  

Schedule 5.4(b)

 

LEASING GUIDELINES

 

[to be attached]

 

 

 

  

Schedule 5.4(1)

 

PUNCHLIST HOLDBACK ESCROW AGREEMENT

 

THIS PUNCHLIST HOLDBACK ESCROW AGREEMENT (this "Agreement") is executed to be
effective as of              , 201_, by and between AH DURHAM APARTMENTS, LLC, a
Virginia limited liability company ("Seller"), TRIBRIDGE RESIDENTIAL, LLC, a
Georgia limited liability company ("Purchaser"), and CALLOWAY TITLE & ESCROW,
L.L.C. ("Escrow Agent"), upon the terms and provisions hereinafter set forth.
Seller, Purchaser and the Escrow Agent are sometimes hereinafter referred to
individually as a "Party" and collectively as the "Parties."

 

RECITALS:

 

WHEREAS, Seller and Purchaser are parties to that certain Purchase and Sale
Agreement (the "Purchase Agreement")
dated                                              , 2014, pertaining to the
sale and purchase of the project located at 501 Willard Street, Durham, North
Carolina and known as Whetstone Apartments (the "Project"), as more particularly
described in the Purchase Agreement;

 

WHEREAS, pursuant to Section 5.4(1) of the Purchase Agreement, (a) the sum of $
    out of the Purchase Price has been placed into escrow (the "Punchlist
Holdback") with the Escrow Agent; and (b) portions of the Punchlist Holdback are
to be released to Seller or, if applicable, Purchaser, as the case may be, to
pay costs incurred in connection with completion of the punch list items
described on Exhibit "A" attached hereto (the "Punchlist");

 

WHEREAS, the Parties desire to enter into this Agreement for the purpose of
confirming their agreement with respect to the Punchlist Holdback;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in consideration of the mutual benefits to
be derived pursuant to the terms hereof, the parties hereby agree as follows:

 

1.    Seller and Purchaser hereby engage Escrow Agent to serve as escrow agent,
and Escrow Agent accepts such engagement and agrees to act as escrow agent in
accordance with the provisions of this Agreement.

 

2.          Seller has delivered to Escrow Agent, and Escrow Agent acknowledges
receipt of, the Punchlist Holdback. Escrow Agent shall invest the Punchlist
Holdback in one or more federally insured interest-bearing bank accounts at one
or more national banking associations. Interest on the Punchlist Holdback shall
become part of the Punchlist Holdback and shall be disbursed in the same manner
as the Punchlist Holdback. The Punchlist Holdback shall be invested under
Seller's taxpayer identification number. Seller agrees to execute and deliver to
Escrow Agent such forms as Escrow Agent may require in connection with the
investment of such funds, and Escrow Agent will not be required to invest the
funds in an interest bearing account until such time as Seller has provided such
fonns to Escrow Agent.

 

 

 

  

3.          Seller and Purchaser agree that the list of items described on the
Punchlist shall constitute the final list of Punchlist Items (as defined in the
Purchase Agreement) required to be completed by Seller pursuant to the Purchase
Agreement and that, except for matters identified on the Punchlist, Seller shall
not be required to complete any additional work in order to cause final
completion of the Improvements (as defined in the Purchase Agreement) in
accordance with the Plans and Specifications (as defined in the Purchase
Agreement) to occur pursuant to the Purchase Agreement. Portions of the
Punchlist Holdback are to be released from time to time by Escrow Agent to
Seller or, if applicable, Purchaser for payment of costs of completing the
Punchlist Items as follows:

 

(a)          (i) At such time as Seller has completed a portion of the Punchlist
work, Seller shall be entitled to draw down on the Punchlist Holdback to pay to
the applicable subcontractors (if not previously paid by Seller) or to reimburse
Seller or                    ("Contractor") for (if previously paid by Seller or
Contractor) costs incurred in connection therewith and shall submit a request to
Escrow Agent identifying the portion of the Punchlist Holdback required to pay
to the subcontractor or reimburse Seller or Contractor for such costs. Such
request by Seller shall include a certificate signed by Seller ("Seller's
Certificate") specifying the amount required to be released and confirming that
the funds will be used only for payment of such work, together with confirmation
from __________(the "Architect") that the applicable portion of the Punchlist
work has been completed and affidavits, lien waivers and releases signed by each
contractor or subcontractor performing any portion of the Punchlist work for
which payment is requested (which waiver or release may be conditioned upon
payment of the amount reflected in the then applicable draw) as required by the
Escrow Agent to issue a             endorsement to Purchaser's title insurance
policy without exception for matters arising from mechanic's lien claims in
connection with portions of the Punchlist work for which payment is requested.
Simultaneously with the delivery of any such request to Escrow Agent, Seller
shall deliver a copy of the request (including Seller's Certificate and other
documentation) to Purchaser.

 

(ii)    Within five (5) days following receipt of such request, Escrow Agent
shall release the applicable portion of the Punchlist Holdback, as described in
such request, to the subcontractors, Seller or Contractor, as applicable. Seller
may use the released funds only for payment of or reimbursement for the work
referred to in (a) (i) above.

 

 

 

 

 

(c)          (i) In the event that Seller has not completed the Punchlist work
on or prior to the date which is thirty (30) days following the Closing Date,
and such failure continues uncured for ten (10) days after written notice
thereof from Purchaser to Seller, Purchaser shall be entitled to take such
actions as may be required to cause the Punchlist work to be completed, in which
event Purchaser shall be entitled to draw down on the Punchlist Holdback to pay
to the applicable subcontractors (if not previously paid by Purchaser) or
reimburse Purchaser (if previously paid by Purchaser) for costs incurred in
connection therewith and shall submit a request to Escrow Agent identifying the
portion of the Punchlist Holdback required to pay the subcontractors or
reimburse Purchaser for such costs. Such request by Purchaser shall include a
certificate signed by Purchaser ("Purchaser's Certificate") specifying the
amount required to be released and confirming that the funds will be used only
for payment of such work, together with confinnation from the Architect that the
applicable portion of the Punchlist work has been completed and lien waivers and
releases signed by each contractor or subcontractor performing any portion of
the Punchlist work for which payment is requested (which waiver or release may
be conditioned upon payment of the amount reflected in the then applicable
draw). Simultaneously with the delivery of any such request to Escrow Agent,
Purchaser shall deliver a copy of the request (including Purchaser's Certificate
and other documentation) to Seller.

 

(ii)    Within five (5) days following receipt of such request, Escrow Agent
shall release the applicable portion of the Punchlist Holdback, as described in
such request, to Purchaser. Purchaser may use the released funds only for
payment of or reimbursement for the work referred to in (b) (i) above.

 

(d)          Upon completion of all Punchlist Work and payment of all costs
incurred in connection therewith, Escrow Agent shall release the balance of the
Punchlist Holdback to Seller.

 

The Architect's determination with respect to completion of Punchlist Items
shall be binding on the Parties. Escrow Agent will not be liable under this
Agreement for any funds it disburses to Seller or Purchaser. In the event that,
pursuant to the provisions of this Agreement, Seller or Purchaser is entitled to
receive a payment or disbursement of any portion of the Punchlist Holdback,
Seller and Purchaser each agree to execute and deliver to Escrow Agent such
authorizations and instructions as may be required to direct Escrow Agent to
release the applicable portion of the Punchlist Holdback as provided as provided
herein.

 

4.          In the event of any dispute between Seller and Purchaser regarding
the disbursement of the Punchlist Holdback or any portion thereof, or in the
event Escrow Agent shall receive conflicting demands or instructions with
respect thereto, Escrow Agent shall be entitled to deposit all funds into a
court of general jurisdiction in Durham, North Carolina, and to interplead
Seller and Purchaser in connection therewith. Seller and Purchaser hereby
consent to the jurisdiction of any such court in connection with such dispute.

 

5.          Escrow Agent shall not be entitled to receive any fees pursuant to
this Agreement.

 

6.          Except as set forth herein, Escrow Agent is not a party to, or bound
by any agreement which may be deposited under, evidenced by, or which arises out
of the provisions of this Agreement.

 

 

 

  

7.          Escrow Agent acts hereunder as a depository only and is not
responsible or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of any instrument deposited with it hereunder, or with
respect to the form or execution of the same, or the identity, authority, or
rights of any person executing or depositing the same. Seller and Purchaser
hereby certify that they are aware the Federal Deposit Insurance Corporation
(the "FDIC") coverages apply only to a maximum amount of One Hundred Thousand
and No/I 00 Dollars ($100,000.00) for each individual depositor. Seller and
Purchaser understand that Escrow Agent assumes no responsibility for, nor will
Seller and Purchaser hold same liable for, any loss occurring which arises from
the fact that the amount of the above account may cause the aggregate amount of
any individual depositor's account to exceed One Hundred Thousand and No/100
Dollars ($100,000.00) and that the excess amount is not insured by the FDIC.

 

8.          Escrow Agent shall be protected in acting upon any notice, request,
waiver, consent, receipt or other paper or document believed by Escrow Agent to
be genuine and to be signed by the proper party or parties.

 

9.          Escrow Agent may consult with legal counsel in the event of any
dispute of questions as to the construction of the foregoing instructions, or
Escrow Agent's duties hereunder, and Escrow Agent shall incur no liability and
shall be fully protected in acting in accordance with the opinion and
instructions of such counsel.

 

10.         Escrow Agent shall not be liable for any damage, liability, or loss
arising out of or in connection with the services rendered by Escrow Agent
pursuant to this Agreement, except for any damage, liability, or loss resulting
from the willful misconduct, negligence or breach of this Agreement by Escrow
Agent or any of its officers or employees. Seller and Purchaser hereby release
and discharge Escrow Agent from all matters with respect to the subject matter
hereof (except for the willful misconduct, negligence or breach of this
Agreement by Escrow Agent or any of its officers or employees) and agree to
indemnify and hold Escrow Agent harmless from and against all costs, damages,
judgments, attorney's fees, expenses, obligations, and liabilities of any kind
or nature, which in good faith, Escrow Agent may incur or sustain in connection
with this Agreement (except for the willful misconduct, negligent conduct or
breach of this Agreement by Escrow Agent or any of its officers or employees).
In the event of controversy or litigation arising out of this transaction, which
(a) results in any expense or attorney's fees to Escrow Agent, by virtue of such
claim or default, controversy or litigation; or (b) requires a declaratory
judgment by a proper court as to the disbursement of said escrowed funds, unless
due to the willful misconduct, negligence or breach of this Agreement by Escrow
Agent, Escrow Agent is hereby authorized to deduct such expense or attorney's
fees out of the escrowed funds, and to pay any remaining balance over to the
party entitled thereto as agreed upon by the parties, or as directed by a court
of competent jurisdiction; provided, that as between Seller and Purchaser, the
prevailing party in such dispute shall be entitled to recover all of such costs
and expenses from the other party.

 

11.         This Agreement may be amended only by written agreement signed by
Seller and Purchaser; however, (a) Escrow Agent will not be bound by such
amendment until such time as Escrow Agent has been provided with a copy of the
fully executed amendment; and (b) should, at any time, any attempt be made to
modify this Agreement in a manner that would increase the duties and
responsibilities of Escrow Agent, or to modify this Agreement in any manner that
Escrow Agent shall deem undesirable, Escrow Agent may resign by notifying the
parties hereto in writing, by certified mail to their respective addresses set
forth below; and until (i) the acceptance by such parties; or (ii) fifteen (15)
days following the date upon which notice was mailed, whichever occurs sooner,
Escrow Agent's only remaining obligation shall be to perfonn its duties
hereunder in accordance with the terms of this Agreement.

 

 

 

  

12.         Escrow Agent may be removed by written agreement executed by both
Seller and Purchaser, in which event, Escrow Agent shall disburse the balance of
the Punchlist Holdback and all other documents and information held by Escrow
Agent pursuant to this Agreement to or as directed by written instructions
signed by both Seller and Purchaser.

 

13.         All notices, requests and other communications under this Agreement
shall be in writing and shall be delivered in person by hand delivery or
overnight delivery service, by facsimile or by email (provided, that any notice
of default or termination notice may not be given by email), or sent by
certified mail, return receipt requested, addressed as follows:

 

  If to Seller:

Eric L. Smith, Vice President of Operations

Armada Hoffler Properties, Inc.

   

222 Central Park Avenue, Suite 2100

Virginia Beach, Virginia 23462

esmith@armadahoffler.com

        with a copy to: C. Grigsby Scifres, Esq.     Williams Mullen    

222 Central Park Avenue, Suite 1700

Virginia Beach, Virginia 23462

gscifres@williamsmullen.com

        If to  Purchaser:

c/o TriBridge Residential, LLC

1575 Northside Drive NW

Suite 200, Building 100

   

Atlanta, Georgia 30318

Attention: Steve Broome

    email: steveb@tribridgeresidential.com         With a copy to: Eric R.
Wilensky    

Nelson Mullins Riley & Scarborough LLP

Atlantic Station

    201 17th Street NW, Suite 1700     Atlanta, GA 30363     email:
eric.wilensky@nelsonmullins.com         If to Escrow Agent: S. Marcus Calloway  
 

Calloway Title & Escrow, L.L.C.

4170 Ashford-Dunwoody Road

    Suite 285    

Atlanta, Georgia 30319

MarcusC@titlelaw.com

 

 

 

  

or such other address, and to the attention of such other person, as the Parties
shall give notice as herein provided. All such notices, requests and other
communications shall be deemed to have been sufficiently given for all purposes
hereof upon receipt at such address if delivered in person, by overnight
delivery, by facsimile or by email, or if mailed, upon deposit of both the
original and any required copies in a post office or official depository of the
United States Postal Service.

 

14.         THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. The Parties hereby consent to jurisdiction and venue in Durham, North
Carolina, and agree that such jurisdiction and venue shall be sole and exclusive
for any and all actions or disputes related to this Agreement or any related
instrument.

 

15.         This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
legal representatives, successors and assigns. This Agreement may not be
assigned by either Seller or Purchaser except in connection with and to the same
party as the Purchase Agreement is assigned, and Purchaser shall be entitled to
pledge its rights under this Agreement and the Punchlist Holdback to Purchaser's
lender. This Agreement may not be assigned by Escrow Agent without the prior
written consent of Seller and Purchaser.

 

16.         With respect to all provisions of this Agreement, time is of the
essence. However, if the Closing or the final date of any period which is set
out in any provision of this Agreement falls on a Saturday, Sunday or legal
holiday under the laws of the United States or the State of North Carolina,
then, and in such event, the Closing or such period shall be extended so that
the Closing or the last day of such period falls on the next day which is not a
Saturday, Sunday or legal holiday.

 

17.         This Agreement may be executed in multiple counterparts. A facsimile
or pdf copy of this Agreement bearing the signature of a Party hereto shall be
sufficient to bind such Party to the terms of this Agreement.

 

18.         All capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Purchase Agreement.

 

[SIGNATURES BEGIN ON NEXT PAGE]

 

 

 

  

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

 

  SELLER:       AH DURHAM APARTMENTS, LLC   By:  ARMADA HOFFLER MANAGER, LLC,  
Its Manager         By         Eric L. Smith, Manager

 

 

 

  

  PURCHASER:         TRIBRIDGE RESIDENTIAL,  LLC,     a Georgia limited
liability company             By:         Name:         Title:                  
TIN:  

 

 

 

  

  ESCROW AGENT:         CALLOWAY TITLE & ESCROW, LLC       By:         Name:    
    Title:  

 

 

 

  

EXHIBIT A

PUNCHLIST

 

 

 

  

Schedule 11.20(b)

 

CONSTRUCTION DELIVERIES

 

Construction Related Deliveries Site

1.Civil Engineer Contract

2.Landscape Architect Contract

3.Hardscape Architect Agreement

4.Civil Construction Documents

5.Landscape/Hardscape Construction Documents

6.Flood Plain Status

 

Buildings

1.Architect Contract

2.Contact list of MEP and Structural Engineers

3.Spec Book

4.Architectural, MEP, Structural Construction Documents

5.Interior Design Contract

6.Interior Design Construction Documents

7.Monthly Architect site visit reports

8.All consultant reports (waterproofing, sound, ADA/FHA, material testing,
private inspections, etc.)

9.Insurance Certificates for all consultants and GC

 

General Contractor

1.GMAX Contract Form

2.Construction Schedule

3.Contact List of GC

 

 

 

  

Schedule 11.20(c)

 

FORM OF CONSENT

 

CONSENT TO ASSIGNMENT OF CONTRACT

 

THIS CONSENT OF GENERAL CONTRACTOR (hereinafter, this "Agreement") is dated as
of                by                        (“Contractor"), to and for the
benefit of                                               ("Assignee").

 

RECITALS:

 

A.           On             , 2014,                          ("Assignor")
entered into a written agreement (the "Contract") with Contractor, pursuant to
which Contractor agreed to perform general contracting services in connection
with the construction of certain improvements to the Property (collectively, the
"Improvements"). Construction of the Improvements is hereinafter referred to as
the "Project"

 

B.           Concurrently herewith, Assignor has conveyed fee simple title (the
"Conveyance") to that certain real property as more particularly described on
Exhibit A attached hereto and by reference made a part hereof (the "Property")
to Assignee.

 

C.           Under the terms of the Conveyance, Assignor has agreed to assign to
Assignee the Contract under that certain Bill of Sale and Assignment and
Assumption of Leases, Construction Contracts and Service Contracts between
Assignor and Assignee (the "Assignment"), and Assignee has agreed to the
Contract, in accordance with the terms of the Assignment.

 

D.           Contractor will benefit from this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt, sufficiency, and adequacy of which are hereby
acknowledged, Contractor hereby agrees as follows:

 

1.          Contractor consents to the terms of the Assignment notwithstanding
any terms to the contrary contained in the Contract. Contractor represents and
warrants that (a) a true and complete copy of the Contract is attached hereto as
Exhibit B; (b) the Contract contains all agreements between Contractor and
Assignor concerning the Property or the Project; and (c) the Contract is in full
force and effect.

 

2.          Contractor represents and warrants that as of the date hereof (a) no
party is in default under the Contract and there are no circumstances which
would constitute a default thereunder upon the passage of time, the giving of
notice, or both; (b) Contractor has no counterclaim, right of set-off or other
defense to performance by Contractor under the Contract; (c)          Assignor
has satisfied all conditions, if any, to completion of performance by the
Contractor under the Contract; and (d) Assignor has made all payments required
of it by, under, or in connection with the Contract.

 

 

 

  

3.          For purposes of this Agreement, all notices, demands or documents
required or permitted to be given to either party shall be in writing and shall
be (a) delivered in person, mailed, postage prepaid, either by registered or
certified mail, return receipt requested, or sent by overnight express carrier,
addressed in each case as follows:

 

To Contractor:

 

To Assignee:

 

or to any other address as to any of the parties hereto, as such party shall
designate in a written notice to the other party hereto. All notices sent
pursuant to the terms of this section shall be deemed received (i) if personally
delivered, then on the date of delivery, (ii) if sent by overnight, express
carrier, then on the next federal banking day immediately following the day
sent, or (iii) if sent by registered or certified mail, then on the earlier of
the third federal banking day following the day sent or when actually received.

 

This Agreement and all rights and obligations hereunder, including matters of
construction, validity and performance, shall be governed by the laws of the
State of North Carolina. This Agreement shall be binding upon and inure to the
benefit of Assignee, Contractor and each of their respective successors and
assigns. The provisions of this Agreement cannot be waived, modified or amended
unless such waiver, modification or amendment is in writing and is executed on
behalf of each of Assignee and Contractor. If any provision of this Agreement is
held to be illegal, invalid or unenforceable, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part thereof; the
remaining provisions thereof shall remain in full effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom; and in lieu of such illegal, invalid or unenforceable provision there
shall be added automatically as a part of this Agreement a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
to be legal, valid and enforceable. Time is of the essence of this Agreement.

 

Receipt of an executed signature page to this Agreement by electronic
transmission shall constitute effective delivery thereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]