Exhibit 10.1

 

 

 

SALE OF CRESCENT ALEXANDER VILLAGE APARTMENTS

9224 GRAHAM RIDGE DRIVE

CHARLOTTE, NORTH CAROLINA

*  *  *

PURCHASE AND SALE AGREEMENT

BETWEEN

GGT CRESCENT ALEXANDER NC VENTURE, LLC,

AS SELLER

AND

ALEXANDER VILLAGE ACQUISITION LP,

AS PURCHASER

*  *  *

EFFECTIVE DATE: SEPTEMBER 8, 2015

 

 

 

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ARTICLE 1

  

PURCHASE AND SALE OF PROPERTY

     1   

1.1

  

Land

     1   

1.2

  

Improvements

     1   

1.3

  

Personal Property

     1   

1.4

  

Leases

     2   

1.5

  

Licenses

     2   

1.6

  

Security Deposits

     2   

1.7

  

Guaranties

     2   

1.8

  

Contracts

     2   

1.9

  

Permits

     2   

1.10

  

Intangibles

     2   

ARTICLE 2

  

PURCHASE PRICE AND DEPOSIT

     2   

2.1

  

Payment

     2   

2.2

  

Deposit

     3   

ARTICLE 3

  

TITLE AND SURVEY

     3   

3.1

  

State of Title to be Conveyed

     3   

3.2

  

Title Commitment and Survey

     3   

ARTICLE 4

  

PROPERTY INFORMATION

     5   

4.1

  

Property Information

     5   

ARTICLE 5

  

PURCHASER’S DUE DILIGENCE

     5   

5.1

  

Purchaser’s Due Diligence

     5   

5.2

  

As Is, Where Is

     7   

ARTICLE 6

  

REPRESENTATIONS AND WARRANTIES

     8   

6.1

  

Seller’s Representations and Warranties

     8   

6.2

  

Purchaser’s Representations and Warranties

     10   

6.3

  

Knowledge

     10   

6.4

  

Survival

     11   

ARTICLE 7

  

COVENANTS OF PURCHASER AND SELLER

     11   

7.1

  

Operation of Property

     11   

7.2

  

Governmental Notices

     12   

7.3

  

Litigation

     13   

7.4

  

Tradenames and Service Marks

     13   

7.5

  

Completion of Connector Road and Sidewalk

     13   

ARTICLE 8

  

CONDITIONS PRECEDENT TO CLOSING

     14   

8.1

  

Conditions Precedent to Purchaser’s Obligation to Close

     14   

8.2

  

Conditions Precedent to Seller’s Obligation to Close

     14   

8.3

  

Failure of a Condition

     14   

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ARTICLE 9

  

CLOSING

     15   

9.1

  

Closing Date

     15   

9.2

  

Seller’s Obligations at the Closing

     15   

9.3

  

Purchaser’s Obligations at the Closing

     16   

9.4

  

Escrow

     17   

9.5

  

Costs and Adjustments at Closing

     17   

ARTICLE 10

  

DAMAGE AND CONDEMNATION

     20   

10.1

  

Damage

     20   

10.2

  

Condemnation and Eminent Domain

     21   

ARTICLE 11

  

REMEDIES AND ADDITIONAL COVENANTS

     21   

11.1

  

Seller Default At or Before Closing

     21   

11.2

  

Seller Default From and After Closing

     21   

11.3

  

Purchaser Default

     22   

11.4

  

Delivery of Materials

     22   

ARTICLE 12

  

BROKERAGE COMMISSION

     22   

12.1

  

Brokers

     22   

12.2

  

Indemnity

     22   

ARTICLE 13

  

NOTICES

     22   

13.1

  

Written Notice

     22   

13.2

  

Method of Transmittal

     23   

13.3

  

Addresses

     23   

ARTICLE 14

  

ASSIGNMENT

     24   

ARTICLE 15

  

MISCELLANEOUS

     25   

15.1

  

Entire Agreement

     25   

15.2

  

Modifications

     25   

15.3

  

Gender and Number

     25   

15.4

  

Captions

     25   

15.5

  

Successors and Assigns

     25   

15.6

  

Controlling Law

     25   

15.7

  

Exhibits

     25   

15.8

  

No Rule of Construction

     25   

15.9

  

Severability

     25   

15.10

  

Time of Essence

     25   

15.11

  

Business Days

     25   

15.12

  

No Memorandum

     26   

15.13

  

Press Releases

     26   

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15.14

  

Attorneys’ Fees and Costs

     26   

15.15

  

Counterparts and Expiration of Offer

     26   

15.16

  

Waiver of Jury Trial

     26   

15.17

  

Confidentiality

     26   

15.18

  

Jurisdiction and Service of Process

     27   

15.19

  

Exculpation

     27   

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EXHIBITS AND SCHEDULES

Exhibits

 

Exhibit A   –      Legal Description Exhibit B   –      Escrow Agreement
Exhibit C   –      Form of Special Warranty Deed Exhibit D   –      Form of Bill
of Sale Exhibit E   –      Form of Assignment and Assumption Agreement Exhibit F
  –      Form of Tenant Notification Letter Exhibit G   –      Form of
Declaration of Restrictions on Condominium Conversions Exhibit H   –      Form
of FIRPTA Exhibit I   –      Form of Electronic Confidentiality Agreement

Schedules

 

Schedule 1.4   –      Rent Roll Schedule 1.5   –      Licenses Schedule 1.8   –
     Contracts Schedule 6.1.3   –      Litigation Schedule 6.1.8   –     
Violations of Law Schedule 9.5.8   –      Landscaping Delay Repair and Quote
Schedule 9.5.9   –      Property Repairs

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PURCHASE AND SALE AGREEMENT

This PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as
of the date set forth on the cover page hereof (the “Effective Date”), by and
between GGT CRESCENT ALEXANDER NC VENTURE, LLC, a Delaware limited liability
company (“Seller”), and ALEXANDER VILLAGE ACQUISITION LP, a Delaware limited
partnership (“Purchaser”).

ARTICLE 1 PURCHASE AND SALE OF PROPERTY

On the terms and conditions stated in this Agreement, Seller hereby agrees to
sell to Purchaser and Purchaser hereby agrees to purchase from Seller all of the
following described property (collectively, the “Property”):

1.1 Land. Seller’s fee simple interest in and to all of that certain tract of
land situated at 9224 Graham Ridge Drive, Charlotte, Mecklenburg County, North
Carolina, and described more particularly in Exhibit A attached hereto and
incorporated herein by reference, together with all rights and appurtenances
pertaining to such land, including, without limitation, all of Seller’s right,
title and interest in and to (i) all minerals, oil, gas, and other hydrocarbon
substances thereon; (ii) all adjacent strips, streets, roads, alleys and
rights-of-way, public or private, open or proposed; (iii) all development
rights, covenants, easements, privileges, and hereditaments, whether or not of
record, and (iv) all access, air, water, riparian, development, utility, and
solar rights (collectively, the “Land”).

1.2 Improvements. A 320-unit multi-family apartment project, and all other
improvements and structures constructed on the Land in connection therewith (the
“Improvements”).

1.3 Personal Property. All of Seller’s right, title and interest in and to all
tangible personal property owned by Seller and located on the Land or within the
Improvements and used exclusively in connection with the ownership, use,
maintenance or operation of the Land or Improvements as of the Effective Date
and as of the Closing (as herein defined) including the following (collectively,
the “Personal Property”; provided, the Personal Property shall specifically
exclude any property owned by tenants under leases):

1.3.1 goods, mechanical systems, fixtures, machinery and equipment comprising a
part of or attached to or located upon the Improvements;

1.3.2 maintenance equipment and tools, if any, owned by Seller and used
exclusively in connection with, and located in or on, the Improvements;

1.3.3 site plans, surveys, plans and specifications and floor plans in Seller’s
possession, if any, that relate to the Land or Improvements;

1.3.4 subject to Section 7.4.2, pylons and other sign structures situated on or
at the Land or Improvements; and

1.3.5 all other tangible personal property owned by Seller including
specifically, without limitation, all appliances, furnishings, furniture,
carpeting, draperies, curtains, merchandise, chattels, tools, materials and
supplies.

 

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1.4 Leases. Seller’s right, title and interest in all leases with tenants or
other persons or entities leasing all or any portion of the Improvements (the
“Leases”), a current list of which is shown on the rent roll attached as
Schedule 1.4.

1.5 Licenses. Seller’s right, title and interest in all licenses, license
agreements and other similar agreements with licensees or other persons or
entities using any portion of the Improvements (collectively, the “Licenses”), a
current list of which is attached hereto as Schedule 1.5.

1.6 Security Deposits. Seller’s right, title and interest in all security
deposits held by Seller in connection with the Leases and not applied pursuant
to the terms thereof.

1.7 Guaranties. Seller’s right, title and interest in any and all guaranties of
the Leases, if any.

1.8 Contracts. Seller’s right, title and interest in and to those certain
parking, management, maintenance, commission, architectural, supply or service
contracts related to the Land, Improvements, Personal Property or Leases (the
“Contracts”) that are in existence and will remain in existence after Closing
and that are to be assumed by Purchaser pursuant to Section 7.1.2, but expressly
excluding the existing property management agreement that will be terminated as
of the time of Closing.

1.9 Permits. Seller’s right, title and interest in all permits, licenses,
certificates of occupancy, if any, entitlements and governmental approvals that
relate to the Land, Improvements, Personal Property, Leases, or Contracts, to
the extent assignable (collectively, the “Permits”).

1.10 Intangibles. Seller’s right, title and interest, if any, in and to the
following items, to the extent assignable and without warranty: consents,
licenses, approvals, certificates, development rights, warranties (including all
assignable termite warranties and bonds), guaranties, plans and specifications,
surveys, resident and tenant files for current residents and tenants in Seller’s
possession, including an electronic copy of all historical Yardi occupancy and
tenant data, and the following materials contained on the website: all
photographs of the Property, all site plans or other depictions of the Property,
and all narrative that relates solely to and describes the Property, but
expressly excluding (i) any name or trademark containing the phrase “Crescent”,
or any variation or derivative thereof, relating to the Land, the Improvements
and/or Personal Property; and (ii) any web sites, web design, links, Internet
domain names, manuals and instruction materials, marketing materials relating to
the Land, the Improvements and/or Personal Property (collectively, the
“Intangibles”).

ARTICLE 2 PURCHASE PRICE AND DEPOSIT

2.1 Payment. The purchase price for the Property (the “Purchase Price”) is
FIFTY-TWO MILLION TWO HUNDRED FIFTY THOUSAND and 00/100 DOLLARS
($52,250,000.00). The cash due at Closing on account of the Purchase Price shall
be subject to credits and adjustments as set forth in this Agreement. The
Purchase Price shall be paid by wire transfer of immediately available funds at
the Closing. Seller and Purchaser shall mutually agree, each acting in good
faith, on the allocation of the Purchase Price among the Land, Personal Property
and Improvements prior to the Closing. Such agreed-upon allocation shall be used
solely for transfer, sales and similar tax purposes and in any declaration or
filing with any governmental authority in connection with the same. The
allocation of the Purchase Price for all other purposes, whether for local,
state or federal taxes or otherwise, shall not be restricted by this Agreement
and shall not require the consent of the other party.

 

2

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2.2 Deposit.

2.2.1 Within two (2) Business Days after the Effective Date, Purchaser shall
deposit with First American Title Insurance Company, National Commercial
Services in Atlanta, Georgia, Attention: Terry W. Wilson, Senior Escrow Officer
(the “Escrow Agent” or “Title Company”), by bank wire transfer the sum of Two
Hundred Fifty Thousand and 00/100 Dollars ($250,000.00), as a non-refundable
deposit (except as otherwise provided herein) to assure Purchaser’s performance
hereunder (together with all interest thereon if any, the “Initial Deposit”).
Prior to making the Initial Deposit, Seller, Purchaser and the Escrow Agent
shall enter into an escrow agreement substantially in the form of Exhibit B
attached hereto (the “Escrow Agreement”). So long as Purchaser does not
terminate this Agreement as provided in Section 5.1.4, then no later than two
(2) Business Days after the expiration of the Study Period (as hereinafter
defined), Purchaser shall deposit with the Escrow Agent by bank wire transfer
the additional sum of Seven Hundred Fifty Thousand and 00/100 Dollars
($750,000.00) (the “Second Deposit”), as a non-refundable deposit (except as
otherwise provided herein) to assure Purchaser’s performance hereunder. The
Initial Deposit and the Second Deposit, in the total amount of $1,000,000.00,
together with all interest thereon, if any, are referred to collectively as the
“Deposit.”

2.2.2 Escrow Agent shall place the Initial Deposit and the Second Deposit (if
made) in an interest-bearing escrow account at a federally-insured (to the
extent of the FDIC limits) commercial bank acceptable to both Seller and
Purchaser. The Escrow Agent shall hold the Deposit in accordance with this
Agreement and the Escrow Agreement. At Closing (as hereinafter defined), Escrow
Agent shall deliver the Deposit to Seller and credit the Deposit against the
Purchase Price.

ARTICLE 3 TITLE AND SURVEY

3.1 State of Title to be Conveyed. Title to the Property shall be conveyed to
Purchaser at Closing in fee simple by Special Warranty Deed, free and clear of
any and all liens, mortgages, deeds of trust, security interests and other
encumbrances, except for the following (collectively, the “Permitted
Exceptions”): (i) real property taxes and assessments attributable to the
Property for the year in which Closing occurs and thereafter, not yet due and
payable; (ii) zoning and other regulatory laws and ordinances affecting the
Property; (iii) any easement, right of way, limitation, encroachment, conflict,
discrepancy, overlapping of improvements, protrusion, lien, encumbrance,
restriction, condition, covenant, exception or other matter with respect to the
Property that is reflected or addressed on the original Survey (as hereinafter
defined) or the Title Commitment; or (iv) any Purchaser’s Objection (as
hereinafter defined) that remains uncured, for whatever reason, at the earlier
to occur of (A) Closing hereunder or (B) five (5) Business Days after Seller
notifies Purchaser that Seller is unwilling or unable to cure or modify
Purchaser’s Objections to the reasonable satisfaction of Purchaser, and (v) the
rights and interests of parties claiming under the Leases.

3.2 Title Commitment and Survey.

3.2.1 Seller shall obtain a title commitment (the “Title Commitment”) for an
ALTA owner’s policy of title insurance (on the current ALTA 2006 Form) in the
amount of the Purchase Price with respect to the Property issued by the Title
Company. As of the Effective Date, Purchaser acknowledges that Seller has
delivered to Purchaser copies of the Title Commitment and all items listed as
title exceptions therein (to the extent provided to Seller by the Title
Company).

3.2.2 As of the Effective Date, Purchaser acknowledges that Seller has delivered
to Purchaser a copy of the existing survey in connection with the Property dated
April 2014 with a certification date of May 5, 2015 (as may be updated pursuant
to this Section 3.2.2, the “Survey”). Purchaser may obtain, at Purchaser’s sole
cost and expense, an update of the Survey of the Property (certified to include
Seller)

 

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prepared by a licensed surveyor within ten (10) Business Days after the
Effective Date. Purchaser shall deliver a copy of the updated Survey to Seller
and the Title Company within three (3) days after Purchaser’s receipt of the
updated Survey.

3.2.3 As of the Effective Date, Purchaser has had the opportunity to examine
title to the Property and the Survey and, in Purchaser’s discretion to object to
any exceptions to title disclosed on the Title Commitment and to any matters
disclosed on the Survey. Purchaser has approved the Title Commitment and the
Survey.

3.2.4 If any revision or update to the Survey or any supplemental title
commitment or update issued subsequent to the date of the original Title
Commitment discloses any matters not set forth on the original Survey or the
original Title Commitment, then, no later than (i) five (5) days after
Purchaser’s receipt of the updated Survey, or (ii) five (5) days after
Purchaser’s receipt of the supplemented or updated Title Commitment, as
applicable, Purchaser shall have the right to object to any such matter
(“Purchaser’s Objections”). Within five (5) days after Seller’s receipt of
Purchaser’s Objections, Seller shall notify Purchaser in writing of the
Purchaser’s Objections, if any, which Seller elects to attempt to cure at or
prior to Closing. Seller’s failure to provide such a notice will be deemed an
election by Seller not to cure any Purchaser’s Objections. If Seller elects not
to cure any or all of Purchaser’s Objections, Purchaser may (as its sole and
exclusive remedy) terminate this Agreement by delivering written notice to
Seller on or before five (5) days after Seller’s written notice (or deemed
notice) to Purchaser of Seller’s intent to not cure one or more of such
Purchaser’s Objections; in which event, the Deposit will be returned to
Purchaser, and neither party shall have any rights or obligations under this
Agreement (other than any obligations of either party that expressly survive
termination). If Seller elects to cure any Purchaser’s Objection, but is unable
to effect a cure of such Purchaser’s Objection on or before the Business Day
immediately prior to the Closing Date, then the Purchaser’s response period with
respect to any such Purchaser’s Objection, and Purchaser’s right to terminate
this Agreement, shall be the Closing Date. If Purchaser timely terminates this
Agreement, the Deposit shall be returned to Purchaser and this Agreement will be
null and void and of no further force and effect whatsoever, except for the
terms of this Agreement which expressly survive termination of this Agreement.
Notwithstanding the foregoing, in the event that any such matter not set forth
on the original Survey or the original Title Commitment is the result of an
intentional act of Seller after the Effective Date that is not otherwise
permitted under this Agreement, then Purchaser shall be permitted to pursue the
remedies provided in Section 11.1 hereof.

3.2.5 Notwithstanding anything contained herein to the contrary, Seller shall
have no obligation to take any steps, bring any action or proceeding or incur
any expense whatsoever to eliminate, modify or cure any easement, right of way,
limitation, encroachment, conflict, discrepancy, overlapping of improvements,
protrusion, lien, encumbrance, restriction, condition, covenant, exception or
other matter with respect to the Property that is reflected or addressed on the
original Survey or the Title Commitment or any Purchaser Objection that
Purchaser may have pursuant to Section 3.2.4; provided that, Seller shall be
obligated at Closing to discharge any Purchaser Objection that constitutes (i) a
mortgage, deed to secure debt, deed of trust, security interest or similar
security instrument encumbering all or any part of the Property, if any, that
was created or entered into by Seller or any party claiming by, through or under
Seller; (ii) a mechanic’s, materialman’s or similar lien affecting the Property
encumbering the Property as a result of the action(s) of Seller or the action(s)
of any party claiming by, through or under Seller, which, if disputed and not
yet resolved, may be bonded over by Seller, but expressly excluding any such
lien resulting from any act or omission of Purchaser or any of its agents,
contractors, representatives or employees or any tenant of the Property and with
the understanding that if such lien is disputed and not yet resolved, that same
may be bonded over by Seller in lieu of satisfying same); (iii) the lien of ad
valorem real or personal property taxes, assessments and governmental charges
affecting all or any portion of the Property which are delinquent; and (iv) a
judgment lien of record against Seller in Mecklenburg County, North Carolina
(with the understanding

 

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that if such judgment lien is disputed and not yet resolved, that same may be
bonded over by Seller in lieu of satisfying same). Purchaser and Seller agree
that such mortgages, liens, judgments or other encumbrances, if any, may be paid
out of the cash consideration to be paid by Purchaser at Closing.

ARTICLE 4 PROPERTY INFORMATION

4.1 Property Information. Prior to the Effective Date, Seller has made available
to Purchaser, either at the property management office at the Property or via a
due diligence website, certain materials which pertain to the Property. All
materials pertaining to the Property that have been made available to Purchaser
on the due diligence website or at the property management office on or before
the Effective Date are hereinafter collectively referred to as the “Property
Information”. Purchaser shall keep such Property Information confidential,
subject to Purchaser’s right to disseminate Property Information to or among the
parties listed in Section 15.17 of this Agreement, and subject to the
restrictions set forth in Section 15.17. Seller makes no representation or
warranty as to the truth or accuracy of the Property Information provided to
Purchaser, except as otherwise expressly provided in this Agreement.

ARTICLE 5 PURCHASER’S DUE DILIGENCE

5.1 Purchaser’s Due Diligence

5.1.1 Subject to the provisions of this Section, Purchaser and its agents,
employees, consultants, inspectors, appraisers, engineers and contractors
(collectively “Purchaser’s Representatives”) shall have the right, through the
Closing Date, from time to time, upon the advance notice required pursuant to
this Section 5.1, to enter upon and pass through the Property during normal
business hours to examine and inspect the same. Notwithstanding any such
inspection, or anything to the contrary contained herein, Purchaser’s
obligations hereunder shall not be limited or otherwise affected as a result of
any fact, circumstance or other matter of any kind discovered following the date
hereof in connection with any such inspection, access or otherwise; it being
agreed that Seller is permitting Purchaser such right of inspection and access
as a courtesy to Purchaser in its preparation for taking title to the Property.
Without limiting the generality of the foregoing, (i) Purchaser agrees that it
shall not have the right to terminate this Agreement or obtain a reduction of
the Purchase Price as a result of any such fact, circumstance or other matter so
discovered (including, without limitation, relating to the physical condition of
the Property, the operations of the Property or otherwise), except as provided
in Section 5.1.4 below and (ii) Purchaser shall have no right to terminate this
Agreement or obtain a return of the Deposit except as expressly provided in this
Agreement.

5.1.2 Purchaser and Purchaser’s Representatives shall have the right to enter
upon the Property at any reasonable time during normal business hours during the
term of this Agreement upon prior reasonable notice to Seller for the limited
purpose of performing investigations, tests and studies, and surveys. In
conducting any inspection of the Property or otherwise accessing the Property,
Purchaser shall at all times comply with all laws and regulations of all
applicable governmental authorities, and neither Purchaser nor any of
Purchaser’s Representatives shall (i) contact or have any discussions with any
of Seller’s employees, agents or representatives, or with any tenants
(including, without limitation, having any contacts whatsoever with tenants,
including but not limited to telephone conversations or electronic mail
messages) at, or contractors providing services to, the Property, unless in each
case Purchaser obtains the prior written consent of Seller (which may be given
via electronic mail), it being agreed that all such contacts or discussions
shall, pending any such approval, be directed to Willis W. Chapman via
electronic mail (at WChapman@crescentcommunities.com) and Darren Pierce via
electronic mail at DPierce@crescentcommunities.com), (ii) interfere with the
business of Seller conducted at the Property or disturb the use or occupancy of
any tenant or occupant of the Property, or (iii) damage the Property. In
conducting any inspection of the Property or otherwise accessing the Property,
Purchaser and Purchaser’s

 

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Representatives shall at all times comply with, and shall be subject to, the
rights of the tenants of the Property (and any persons claiming by, under or
through such tenants). Seller may from time to time establish reasonable rules
of conduct for Purchaser and Purchaser’s Representatives in furtherance of the
foregoing, and Purchaser shall comply with all of Seller’s requirements
regarding entry upon the Property. Purchaser shall schedule and coordinate all
inspections, including, without limitation, any environmental tests, and other
access with Seller and shall give Seller at least two (2) Business Days’ prior
notice thereof. Seller shall be entitled to have a representative present at all
times during each such inspection or other access. Purchaser agrees to pay to
Seller on demand the cost of repairing and restoring any damage or disturbance
which Purchaser or Purchaser’s Representatives shall cause to the Property. All
inspection fees, appraisal fees, engineering fees and other costs and expenses
of any kind incurred by Purchaser or Purchaser’s Representatives relating to
such inspection and its other access shall be at the sole expense of Purchaser.
Purchaser shall keep all information obtained during its inspections and access
to the Property confidential and shall abide by the terms and provisions of the
Electronic Confidentiality Agreement which is a part of the Apartment Realty
Advisors’ website and which Purchaser has agreed to. A copy of such Electronic
Confidentiality Agreement is attached hereto as Exhibit I, and the terms of such
Electronic Confidentiality Agreement are hereby incorporated herein by this
reference. If the Closing shall not occur for any reason whatsoever, or if a
sales contract with respect to a sale of the Property to Purchaser is not
executed, Purchaser shall: (A) if requested by Seller, and upon receipt of the
reimbursement of the costs therefor, promptly deliver to Seller without
representation or warranty of any kind, express or implied, the originals of all
tests, reports and inspections of the Property, made and conducted by Purchaser
or Purchaser’s Representatives, or for Purchaser’s benefit, that are in the
possession or control of Purchaser or Purchaser’s Representatives; (B) promptly
return to Seller copies of all due diligence materials delivered by Seller to
Purchaser; and (C) promptly destroy all copies and abstracts of the materials
referenced in (A) and (B) above. Purchaser and Purchaser’s Representatives shall
not be permitted to conduct borings of the Property or drilling in or on the
Property, or any other invasive, intrusive or destructive testing in connection
with the preparation of an environmental audit or in connection with any other
inspection of the Property without the prior written consent of Seller, which
Seller may give or withhold in its sole discretion (and, if such consent is
given, Purchaser shall be obligated to pay to Seller on demand the cost of
repairing and restoring any damage as aforesaid). This Section 5.1.2 shall
survive the Closing or any termination of this Agreement.

5.1.3 Concurrently with the execution of this Agreement and during the term of
this Agreement, Purchaser shall cause any and all parties that access the
Property pursuant to the rights granted herein to maintain workers’ compensation
insurance in accordance with applicable law, and to maintain, at its expense,
(i) commercial general liability (“CGL”) insurance, issued on a form at least as
broad as Insurance Services Office (“ISO”) Commercial General Liability Coverage
“occurrence” form CG 00 01 10 01 or another “occurrence” form providing
equivalent coverage, including contractual liability and personal injury
liability coverage, with limits of not less than Two Million Dollars
($2,000,000) for any one occurrence and Five Million Dollars ($5,000,000) in the
aggregate; (ii) comprehensive automobile liability insurance (covering any
automobiles owned or operated by Purchaser or Purchaser’s Representatives);
(iii) worker’s compensation insurance or participation in a monopolistic state
workers’ compensation fund, and (iv) employer’s liability insurance or (in a
monopolistic state) Stop Gap Liability insurance. Such automobile liability
insurance shall be in an amount not less than One Million Dollars ($1,000,000)
for each accident. Such worker’s compensation insurance shall carry minimum
limits as defined by the law of the jurisdiction in which the Property is
located (as the same may be amended from time to time). Such employer’s
liability insurance shall be in an amount not less than One Million Dollars
($1,000,000) for each accident, One Million Dollars ($1,000,000) disease-policy
limit, and One Million Dollars ($1,000,000) disease-each employee. Seller, and
its property manager, shall be covered as additional insureds on the CGL and
automobile liability insurance policies with respect to liability arising out of
the named insured’s acts or

 

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omissions relating to the Property. The insurer and the terms and conditions of
all the foregoing policies shall be acceptable to Seller. Prior to making any
entry upon the Property, Purchaser shall furnish to Seller a certificate of
insurance evidencing the foregoing coverages, which certificate of insurance
shall be in form and substance satisfactory to Seller. Notwithstanding anything
to the contrary contained herein, Seller agrees that Purchaser has provided
insurance certificates for CBRE and UES, its two Purchaser’s Representatives
that will access the Property pursuant to the rights granted herein, and Seller
approves such certificates. Additionally, Purchaser agrees that it shall not
directly access the Property pursuant to the rights granted herein unless and
until Purchaser provides Seller with proof that Purchaser has the insurance
required herein.

5.1.4 Purchaser shall have until 5:00 p.m. (Eastern time) on September 8, 2015
(the “Study Period”) within which to determine, in its sole discretion, whether
all matters related to the Property are satisfactory to Purchaser, for any
reason or no reason. If Purchaser, in its sole discretion, determines that the
purchase of the Property is not feasible and that Purchaser does not desire to
proceed with the transactions contemplated under this Agreement, then Purchaser
shall deliver to Seller, prior to the expiration of the Study Period, written
notice that Purchaser does not desire to proceed with the transactions
contemplated under this Agreement and in such case, this Agreement shall
terminate upon Seller’s receipt of such notice, except for those matters which
are indicated herein as surviving termination, and the Deposit shall be
immediately returned to Purchaser. If Purchaser fails to timely notify Seller
prior to the expiration of the Study Period (with time being of the essence)
that Purchaser does not desire to proceed with the transactions contemplated
under this Agreement as aforesaid, then Purchaser shall be deemed to have waived
its right to terminate this Agreement under this Section 5.1.4.

5.1.5 Purchaser shall pay for all such work performed on the Property and shall
not permit the creation of any lien in favor of any contractor, subcontractor,
materialman, mechanic, surveyor, architect or laborer and shall not unreasonably
disrupt any tenants of the Property. Purchaser hereby expressly agrees to
indemnify and hold Seller harmless against any claim, lien, loss, cost, expense,
damage or injury to either persons or Property arising out of Purchaser’s or its
agent’s or representative’s actions under this paragraph 5, other than any
claims, damages, investigation and attorneys’ fees, disbursement, expenses or
court cost incurred solely as the result of (a) the mere discovery of existing
conditions so long as not exacerbated by Purchaser, or (b) the gross negligence
or willful misconduct of Seller. This Section 5.1.5 shall survive the Closing or
any termination of this Agreement.

5.2 As Is, Where Is.

5.2.1 Except as provided in the express representations and warranties of Seller
set forth in Section 6.1 and 12 of this Agreement and in Seller’s Special
Warranty Deed, the Bill of Sale and the Assignment and Assumption Agreement
(collectively, the “Express Representations”), Seller does not, by the execution
and delivery of this Agreement, and Seller shall not, by the execution and
delivery of any document or instrument executed and delivered in connection with
the Closing, make any representation or warranty, express or implied, of any
kind or nature whatsoever, with respect to the Property, and all such warranties
are hereby disclaimed.

5.2.2 Without limiting the generality of the foregoing, other than the Express
Representations, Seller makes, and shall make, no express or implied warranty as
to matters of title, zoning, acreage, tax consequences, physical or
environmental condition (including, without limitation, laws, rules,
regulations, orders and requirements pertaining to the use, handling,
generation, treatment, storage or disposal of any toxic or hazardous waste or
toxic, hazardous or regulated substance), valuation, governmental approvals,
governmental regulations or any other matter or thing relating to or affecting
the Property (collectively, the “Disclaimed Matters”).

 

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5.2.3 Notwithstanding anything to the contrary set forth in this Agreement, but
subject to the Express Representations and Seller’s obligations set forth in
Section 7.1 of this Agreement, and subject to Article 10 hereof, the Property,
including without limitation the roofs, all structural components, all heating,
ventilating, air conditioning, mechanical, plumbing, and electrical systems,
fire and life safety and all other parts of the Improvements constituting a
portion of the Property, shall be conveyed to Purchaser, and Purchaser shall
accept same, in their “AS IS” “WHERE IS” condition on the Closing Date, “WITH
ALL FAULTS” and “SUBJECT TO ALL DEFECTS.” Purchaser acknowledges that Seller’s
willingness to sell the Property to Purchaser at the Purchase Price has been
induced, in part, by the agreement of Purchaser to purchase the Improvements and
the Personal Property in such “AS IS” condition. Purchaser hereby acknowledges,
represents and warrants that it is not in a disparate bargaining position with
respect to Seller in connection with the transaction contemplated hereby, that
Purchaser freely and fairly agreed to the waivers and conditions of this
Section 5.2 as part of the negotiations of this Agreement, and Purchaser has
been represented by adequate legal counsel in connection herewith and has
conferred with such legal counsel concerning the waivers and other conditions of
this Section 5.2.

5.2.4 Without in any way limiting any provision of this Section 5.2, Purchaser
specifically acknowledges and agrees that, except with respect to the Express
Representations and the obligations of Seller set forth in Section 7.1 of this
Agreement, and subject to Article 10 hereof, Purchaser hereby waives, releases
and discharges any claim it has, might have had or may have against Seller with
respect to (i) the Disclaimed Matters, (ii) the condition of the Property as of
the Closing Date, (iii) the past, present or future condition or compliance of
the Property with regard to any environmental protection, pollution control or
land use laws, rules, regulations, orders or requirements, including, without
limitation, CERCLA (as hereinafter defined), or (iv) any other state of facts
that exists with respect to the Property. The waiver, release and discharge set
forth in this Section 5.2.4 shall survive the Closing or any termination of this
Agreement.

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

6.1 Seller’s Representations and Warranties. Seller represents to Purchaser as
of the Effective Date as follows:

6.1.1 Organization. Seller is a Delaware limited liability company, duly formed
and validly existing under the laws of the State of Delaware and in good
standing under the laws of the State of North Carolina.

6.1.2 Authority/Consent. Seller possesses all requisite power and authority, and
has taken all actions required by its organizational documents and applicable
law, to execute and deliver this Agreement and will by Closing have taken all
actions required by its organizational documents and applicable law, to
consummate the transactions contemplated by this Agreement.

6.1.3 Litigation. To Seller’s knowledge, except as may be disclosed on
Schedule 6.1.3 attached hereto, no material action, suit or other proceeding
(including, but not limited to, any condemnation action or real estate tax
appeal) is pending or, to Seller’s knowledge, has been threatened in writing
that concerns or involves the Property.

6.1.4 Bankruptcy. No bankruptcy, insolvency, reorganization or similar action or
proceeding, whether voluntary or involuntary, is pending, or, to Seller’s
knowledge, threatened, against Seller.

6.1.5 Contracts. To Seller’s knowledge, those Contracts referenced on
Schedule 1.8 are

 

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all of the Contracts in effect and entered into by Seller which will affect the
Property after Closing. Seller has provided Purchaser with true, correct and
complete copies, in all material respects, of all Contracts, including all
amendments and modifications thereof, prior to the execution of this Agreement
by Purchaser and Seller.

6.1.6 Employees. Seller has no employees.

6.1.7 Leases. To Seller’s knowledge, except for (i) the Leases referenced on the
rent roll attached as Schedule 1.4, (ii) the Licenses referenced on Schedule
1.5, and (iii) the leases, amendments or other occupancy agreements which may be
entered into by Seller pursuant to Section 7.1 of this Agreement, there are no
leases, rental agreements, licenses, license agreements or other occupancy
agreements with anyone in effect which will affect the Property after Closing.
To Seller’s knowledge, each Lease is in full force and effect. Seller will
provide Purchaser with true, correct and complete copies of all Leases,
including all amendments and modifications thereto, as part of the Property
Information.

6.1.8 Violations of Law. Except as set forth on Schedule 6.1.8, and to Seller’s
knowledge, Seller has not received written notice from any governmental
authority of any material violation of any federal or municipal laws,
ordinances, orders, regulations and requirements affecting the Property or any
portion thereof (including the conduct of business operations thereon) which are
unresolved.

6.1.9 Foreign Person. Seller is not a “foreign person,” “foreign trust” or
“foreign corporation” within the meaning of the United States Foreign Investment
in Real Property Tax Act of 1980 and the Internal Revenue Code of 1986, as
subsequently amended (the “Code”).

6.1.10 No Conflicts. The execution and delivery of this Agreement by Seller and
the consummation by Seller of the transactions contemplated hereby will not:
(i) violate any judgment, order, injunction, or decree to which Seller or the
Property is subject, or (ii) conflict with, result in a breach of, or constitute
a default under the organic documents of Seller or any lease, mortgage, loan
agreement, covenant, or other agreement or instrument to which Seller is a party
or by which Seller or the Property may be bound.

6.1.11 Prohibited Transaction. Neither Seller nor any person, group, entity or
nation that Seller is acting, directly or indirectly for, or on behalf of, is
named by any Executive Order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism) or the United States Treasury Department as a
terrorist, “Specially Designated National and Blocked Person,” or is otherwise a
banned or blocked person, group, entity, or nation pursuant to any Law that is
enforced or administered by the Office of Foreign Assets Control, and Seller is
not engaging in the transactions contemplated by this Agreement, directly or
indirectly, on behalf of, or instigating or facilitating the transactions
contemplated by this Agreement, directly or indirectly, on behalf of, any such
person, group, entity or nation. Seller is not engaging in the transactions
contemplated by this Agreement, directly or indirectly, in violation of any laws
relating to drug trafficking, money laundering or predicate crimes to money
laundering. None of the funds of Seller have been or will be derived from any
unlawful activity with the result that the investment of direct or indirect
equity owners in Seller is prohibited by law or that the transactions
contemplated by this Agreement or this Agreement is or will be in violation of
applicable law. Seller has and will continue to implement procedures, and has
consistently and will continue to consistently apply those procedures, to ensure
the foregoing representations and warranties remain true and correct at all
times prior to Closing.

6.1.12 No Right of First Refusal. Seller has not entered into any other contract
to sell, or granted a third party any right or option to purchase (including any
right of first offer or right of first refusal), the Property or any part
thereof that is currently in effect, and Seller has no knowledge of any other
party having any right or option to purchase (including any right of first offer
or right of first refusal).

 

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6.2 Purchaser’s Representations and Warranties. Purchaser represents to Seller,
as of the Effective Date, as follows:

6.2.1 Organization. Purchaser is a Delaware limited partnership, duly formed,
validly existing and in good standing under the laws of the State of Delaware,
and qualified to do business in the State of North Carolina.

6.2.2 Authority/Consent. Purchaser possesses all requisite power and authority,
has taken all actions required by its organizational documents and applicable
law, and has obtained all necessary consents, to execute and deliver this
Agreement and will by Closing have taken all actions required by its
organizational documents and applicable law, to consummate the transactions
contemplated in this Agreement.

6.2.3 Prohibited Transaction. Neither Purchaser nor any person, group, entity or
nation that Purchaser is acting, directly or indirectly for, or on behalf of, is
named by any Executive Order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism) or the United States Treasury Department as a
terrorist, “Specially Designated National and Blocked Person,” or is otherwise a
banned or blocked person, group, entity, or nation pursuant to any Law that is
enforced or administered by the Office of Foreign Assets Control, and Purchaser
is not engaging in the transactions contemplated by this Agreement, directly or
indirectly, on behalf of, or instigating or facilitating the transactions
contemplated by this Agreement, directly or indirectly, on behalf of, any such
person, group, entity or nation. Purchaser is not engaging in the transactions
contemplated by this Agreement, directly or indirectly, in violation of any laws
relating to drug trafficking, money laundering or predicate crimes to money
laundering. None of the funds of Purchaser have been or will be derived from any
unlawful activity with the result that the investment of direct or indirect
equity owners in Purchaser is prohibited by law or that the transactions
contemplated by this Agreement or this Agreement is or will be in violation of
applicable law. Purchaser has and will continue to implement procedures, and has
consistently and will continue to consistently apply those procedures, to ensure
the foregoing representations and warranties remain true and correct at all
times prior to Closing.

6.2.4 ERISA. Purchaser is not an employee pension benefit plan subject to the
provisions of Title IV of the Employee Retirement Income Security Act of 1974,
as in effect from time to time (“ERISA”) or subject to the minimum funding
standards under Part 3, Subtitle B, Title I of ERISA or Section 412 of the Code
or Section 302 of ERISA, and none of its assets constitutes or will constitute
assets of any such employee benefit plan subject to Part 4, Subtitle B, Title I
of ERISA. Purchaser is not a “governmental plan” within the meaning of
Section 3(32) of ERISA and the funds used by Purchaser to acquire the Interest
are not subject to any state statutes regulating investments of and fiduciary
obligations with respect to governmental plans. The transactions contemplated by
this Agreement are not specifically excluded by Part I(b) of PTE 84-14.

6.3 Knowledge. For purposes of this Agreement, the phrase “to Seller’s
knowledge” means the present, actual knowledge of Brian J. Natwick (the “Seller
Knowledge Individual”), the person in the primary position of responsibility
with respect to the Property, without investigation or review of files relating
to the Property. In no event shall the Seller Knowledge Individual have any
personal liability hereunder.

 

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6.4 Survival. All of the representations and warranties set forth in this
Article 6 shall survive the Closing for a period of one hundred eighty
(180) days, subject to the provisions of Section 11.2 of this Agreement (the
“Survival Period”). The party (the “Non-Breaching Party”) who discovers an
alleged breach or failure of any representation or warranty by the other party
(the “Breaching Party”) shall provide the Breaching Party with written notice (a
“Notice of Breach”) of any such alleged breach or failure made by the Breaching
Party and specifying the nature thereof within five (5) Business Days after the
Non-Breaching Party’s discovery of such alleged breach or failure. The
Non-Breaching Party shall commence any action, suit, or proceeding with respect
to any breach or failure that is the subject of the Notice of Breach, if at all
(as provided below), on or before the date that is thirty (30) days after the
expiration of the Survival Period (“Suit Deadline”). Seller and Purchaser
acknowledge and agree that the resolution of such action, suit, or proceeding
may not occur until after the expiration of the Survival Period, and the
Survival Period shall be deemed to be tolled with respect to (and only with
respect to) any alleged breach or failure of a representation or warranty of
which the Breaching Party receives a Notice of Breach before the expiration of
the Survival Period, provided the Non-Breaching Party files an action, suit, or
proceeding, and serves the Breaching Party, with respect thereto prior to the
Suit Deadline. Notwithstanding the foregoing to the contrary, Seller shall have
no liability in connection with this Agreement by reason of any inaccuracy of a
representation or warranty if, and to the extent that, such inaccuracy is
disclosed to Purchaser or otherwise included in the Property Information at the
time of the Closing and Purchaser elects, nevertheless, to consummate the
transaction contemplated hereby. Notwithstanding anything herein to the
contrary, Seller shall maintain a net worth in a minimum of Five Hundred
Twenty-Two Thousand Five Hundred and No/100 Dollars ($522,500.00) until the date
which is one hundred eighty (180) days after Closing.

ARTICLE 7 COVENANTS OF PURCHASER AND SELLER

7.1 Operation of Property. From the Effective Date until the earlier of (i) the
termination of this Agreement, and (ii) Closing, Seller shall operate the
Property in accordance with the terms of this Section 7.1.

7.1.1 (a) From the Effective Date until the Closing, Seller shall continue to
market the Property to prospective tenants, maintain and repair the Property and
maintain insurance on the Property, all in the same manner as it has prior to
the Effective Date. However, Seller shall not take any of the following actions
after the expiration of the Study Period without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed:

 

  (i) make or permit to be made any material alterations to or upon the Property
except as required under Section 7.2 hereof or permitted under Section 9.5.9
hereof;

 

  (ii) enter into any new Contracts which are not terminable without premium or
penalty by Purchaser upon thirty (30) days’ prior written notice following the
Closing, or amend or modify the Contracts in any manner, unless such Contract as
amended may be terminated without premium or penalty upon thirty (30) days’
prior written notice, or knowingly fail to timely perform its material
obligations under the Contracts (provided that in the case of emergency or other
exigent circumstances, Seller shall have the right to enter into contracts to
perform repairs or replacements without Purchaser’s consent);

 

  (iii) encumber, sell or transfer the Property or any interest therein or alter
or amend the zoning classification of the Land or Improvements; or

 

  (iv)

settle, compromise, withdraw or terminate any real estate tax appeal or
proceeding

 

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  affecting the Property other than any relating solely to periods prior to
calendar year 2015 (which Seller retains the full and unfettered right to settle
or compromise, and any refunds applicable to such period shall belong solely to
Seller).

Prior to the expiration of the Study Period, Seller shall have the right to take
any of the aforesaid actions without obtaining Purchaser’s consent thereto, but
Seller shall keep Purchaser reasonably informed as to material actions Seller
has taken or proposes to take.

(b) From and after the Effective Date, Seller shall not (a) enter into any “New
Lease” with a first-time tenant unless the Lease is for a period of not less
than three (3) months and not more than thirteen (13) months; (b) amend, renew
or extend any existing Lease or enter into any New Lease with an existing
tenant, unless the New Lease is for a period of not less than three (3) months
and not more than thirteen (13) months. All renewals of Leases shall be at
rental rates that are no less than two percent (2%) more and no greater than six
percent (6%) more than such tenant’s previous rental rate. Notwithstanding the
foregoing, this subsection shall not apply to month-to-month leases or
situations where a tenant at the Property requests a one month extension to
provide such tenant with additional time to move out.

(c) At the time of Closing, Seller shall cause all apartment units in the
Property to be in a market rent-ready condition according to normal and
customary industry practice. With respect to each apartment unit that is not in
such a rent-ready condition at the Closing, Purchaser shall receive a credit
against the Purchase Price in the sum of Five Hundred and No/100 Dollars
($500.00).

(d) Whenever in this Section 7.1.1 Seller is required to obtain Purchaser’s
consent with respect to any proposed action or transaction, Purchaser shall,
within five (5) Business Days after receipt of Seller’s receipt of request
therefor, notify Seller of its approval or disapproval of same and, if Purchaser
fails to notify Seller in writing of its disapproval within said five
(5) Business Day period, Purchaser shall be deemed to have approved same.

7.1.2 Prior to the expiration of the Study Period, Purchaser shall review the
Contracts (as identified on Schedule 1.8 hereto) to determine, among other
things, whether such Contracts are terminable by their own terms, and to
determine whether Purchaser desires to assume any of such Contracts. Prior to
the expiration of the Study Period, Purchaser shall deliver a notice (the
“Contract Termination Notice”) to Seller setting forth which of such Contracts,
if any, that Purchaser elects to assume (the “Assumed Contracts”) and which of
such Contracts, if any, that Purchaser elects to terminate (the “Terminable
Contracts”). Immediately upon receipt from Purchaser of the Contract Termination
Notice, Seller will deliver notices of termination canceling such Terminable
Contracts for which Seller is timely notified of by Purchaser; provided,
however, that if because of the notice requirement in any Terminable Contract,
such Terminable Contract cannot be terminated as of Closing, Seller will send
the applicable notice of termination, but any such Terminable Contract, together
with any Assumed Contracts or Contracts that by their terms cannot be
terminated, shall be assigned to, and assumed by, Purchaser at Closing pursuant
to that certain Assignment and Assumption Agreement in the form of Exhibit E
attached hereto. The foregoing notwithstanding, Seller shall cause Seller’s
existing property management agreement to be terminated effective as of the
Closing Date.

7.2 Governmental Notices. Promptly after receipt, Seller shall provide Purchaser
with copies of any written notices that Seller receives with respect to (i) any
special assessments or proposed increases in the valuation of the Property;
(ii) any changes to access to the Property or roadways adjacent to the Property,
or condemnation or eminent domain proceedings affecting the Property; or
(iii) any changes to or violation of any Environmental Law or any zoning,
health, fire, safety or other law, regulation or code applicable to the
Property. In addition, Seller shall deliver or cause to be delivered to
Purchaser, promptly upon receipt thereof by Seller, copies of any written
notices of default given or received by Seller under any of the Leases.

 

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7.3 Litigation. Seller will advise Purchaser promptly of any litigation,
arbitration proceeding or administrative hearing that affects Seller or the
Property and that is instituted after the Effective Date.

7.4 Tradenames and Service Marks.

7.4.1 Purchaser hereby acknowledges and agrees that the name “Crescent”, any
other trade name or service mark which includes the word “Crescent” or any other
trade name or service mark of Seller or its members (hereinafter collectively
referred to as the “Marks”), and each of them, are trade names and service marks
of Crescent Communities, LLC; that the Marks, and each of them, are the sole and
exclusive property of Crescent Communities, LLC, which owns all right, title,
and interest in and to the Marks, and each of them; and that, by this Agreement,
Purchaser shall acquire no ownership right or interest of any kind in or to the
Marks, or any of them. Purchaser further acknowledges and agrees that any use by
Purchaser of the Marks, or any of them, in any manner in connection with the
Property or otherwise, other than in accordance with Section 7.4.2 below, will
result in immediate and irreparable injury to Seller and its affiliates,
including, Crescent Communities, LLC, and that Seller and/or its affiliates,
including, Crescent Communities, LLC, shall be entitled to temporary,
preliminary, and permanent injunctive relief against Purchaser in the event of
any such use of the Marks, or any of them, by Purchaser, or in the event of any
other violation by Purchaser of this Section 7.4.1. Except as set forth in
Section 7.4.2 below, Purchaser may continue to use “Alexander Village” in the
name of the Property after Closing provided Purchaser does not use the
“Crescent” name or any of the Marks; provided, however, nothing contained herein
shall be deemed to be a warranty of Seller’s or Purchaser’s right to use such
names.

7.4.2 Purchaser shall be permitted to continue using the name “Crescent” in
signage, lease forms, and the like for the Property for up to ninety (90) days
after Closing; provided Purchaser maintains the Property in a first class
condition at all times during such ninety (90) day period; subject to the
foregoing, Purchaser agrees to remove the “Crescent” name from the Property, at
Purchaser’s sole expense, within ninety (90) days after Closing, including
changes in signage, lease forms, and the like.

7.4.3 This Section 7.4 shall survive the Closing.

7.5 Completion of Connector Road and Sidewalk. Pursuant to that certain
Temporary Easement Agreement dated October 17, 2012, between Seller and the City
of Charlotte, North Carolina, Seller has agreed to slope and grade an easement
parcel adjacent to the Property, as more particularly described in such
Temporary Easement Agreement, construct a connector road and a sidewalk on such
easement parcel, and, upon completion of such work, maintain the easement area
for a two full growing seasons (ending October 31) after the date of acceptance
of the connector road. Seller has sloped and graded the easement parcel and
constructed the connector road and sidewalk, but the City of Charlotte has not
yet accepted the connector road. Seller shall continue to use commercially
reasonable efforts to cause the City of Charlotte to accept the connector road
as promptly as practical, which obligation shall expressly survive the Closing.

 

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ARTICLE 8 CONDITIONS PRECEDENT TO CLOSING

8.1 Conditions Precedent to Purchaser’s Obligation to Close. Purchaser’s
obligation to purchase the Property is subject to satisfaction on or before the
Closing Date (as such date may be extended as provided herein) of the following
conditions, any of which may be waived in writing by Purchaser in Purchaser’s
sole and absolute discretion.

8.1.1 Seller shall have performed and observed, in all material respects, all
covenants of Seller under this Agreement.

8.1.2 All representations and warranties of Seller set forth in this Agreement
shall be true and correct in all material respects as if made on the Closing
Date.

8.2 Conditions Precedent to Seller’s Obligation to Close. Seller’s obligation to
sell the Property is subject to satisfaction, on or before the Closing Date (as
such date may be extended as provided herein) of the following conditions, any
of which may be waived in writing by Seller, in Seller’s sole and absolute
discretion:

8.2.1 Purchaser shall have performed and observed, in all material respects, all
covenants of Purchaser under this Agreement.

8.2.2 All representations and warranties of Purchaser set forth in this
Agreement shall be true and correct in all material respects as if made on the
Closing Date.

8.3 Failure of a Condition

8.3.1 In the event that any condition precedent to Closing has not been
satisfied on or before the Closing Date, then the party whose conditions to
Closing have not been satisfied (the “Unsatisfied Party”) shall give notice to
the other party of the condition or conditions which the Unsatisfied Party
asserts are not satisfied. If the conditions specified in such notice are not
satisfied within five (5) Business Days after receipt of such notice, then the
party whose condition precedent was not satisfied may terminate this Agreement,
whereupon neither party shall have any further rights or obligations hereunder
(other than any obligations of either party that expressly survive termination)
and the Deposit shall be returned to Purchaser; provided, however, that if such
failure of a condition is due to a default by one of the parties, the
disposition of the Deposit shall be governed solely by Article 11 of this
Agreement and not by this Section 8.3.1. Notwithstanding anything contained
herein to the contrary, if any of the conditions precedent to Purchaser’s
obligation to close, as set forth in Section 8.1 of this Agreement, are not
satisfied within the five (5) Business Day period specified above and the same
are reasonably susceptible of being cured, Seller shall have the right to extend
such period in which to satisfy the unsatisfied condition for a period of up to
ten (10) additional days, by giving notice thereof to Purchaser within such five
(5) Business Day period. Further, Purchaser shall have the right to waive the
unsatisfied condition or conditions, by notice to Seller within five
(5) Business Days after expiration of the applicable satisfaction period,
without satisfaction having occurred, in which event the Closing Date shall be
the date which is five (5) Business Days after Seller’s receipt of Purchaser’s
waiver notice.

8.3.2 If the transaction contemplated by this Agreement closes, the parties
shall be deemed to have waived any and all unmet or unsatisfied conditions,
other than any unmet or unsatisfied conditions arising out of a breach by either
party of any of its representations and warranties hereunder of which the other
party has no knowledge as of Closing.

 

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ARTICLE 9 CLOSING

9.1 Closing Date. The consummation of the transaction contemplated hereby (the
“Closing”) will take place at the office of Escrow Agent, via an escrow closing,
on September 29, 2015 (with time being of the essence with respect thereto), or
such earlier date as Seller and Purchaser may mutually agree upon in writing
(the “Closing Date”). Purchaser and Seller agree to finalize and execute all
documents necessary for the consummation of the transaction contemplated herein,
including but not limited to the settlement statement, and to deliver all such
documents to the Title Company in escrow not later than the end of the Business
Day immediately preceding the Closing Date in order to ensure the orderly and
timely transfer of all funds necessary for Closing by not later than 2:00 p.m.
(Eastern time) on the Closing Date.

9.2 Seller’s Obligations at the Closing. At the Closing, Seller will do, or
cause to be done, the following:

9.2.1 Closing Documents. Seller shall execute, acknowledge (if necessary) and
deliver originals of the following documents:

9.2.1.1 Special Warranty Deed in the form of Exhibit C hereto (the “Deed”);

9.2.1.2 Bill of Sale in the form of Exhibit D hereto;

9.2.1.3 Assignment and Assumption Agreement in the form of Exhibit E hereto;

9.2.1.4 Letters to each tenant under the Leases in the form of Exhibit F hereto,
notifying tenants of the conveyance of the Property to Purchaser and advising
them that, following the Closing Date, all future payments of rent are to be
made in the manner set forth therein;

9.2.1.5 Certificate of Non-Foreign Status in the form of Exhibit H;

9.2.1.6 Settlement statement showing all of the payments, adjustments and
prorations provided in Section 9.5 and otherwise agreed upon by Seller and
Purchaser;

9.2.1.7 A rent roll for the Property dated as of the Closing Date;

9.2.1.8 A certificate stating that each of Seller’s representations and
warranties contained in this Agreement is true and correct in all material
respects as of the Closing Date;

9.2.1.9 A duly executed affidavit in a form customarily used for commercial real
estate transactions in the State of North Carolina and which is acceptable to
the Title Company in order for the Title Company to be able to delete standard
exceptions, showing among other things that all debts for labor and materials in
respect of the Property incurred by or on behalf of Seller have been paid in
full and that there are no outstanding claims, suits, debts, rights of
occupancy, encumbrances, liens or judgments against the Property, except matters
approved or waived by Purchaser pursuant to Article III hereof;

9.2.1.10 Such evidence as is reasonably required by the Title Company evidencing
the authority of Seller and those individuals acting on behalf of Seller to
enter into this Agreement and consummate the transaction contemplated herein;
and

 

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9.2.1.11 Copies of notices of termination of such other service agreements and
contracts that Purchaser elected to have terminated in accordance with
Section 7.1.2.

9.2.1.12 A duly executed Declaration of Transfer of Inspection/Maintenance
Responsibilities of Stormwater BMP Facilities pursuant to the Post Construction
Storm Water Best Management Practices Operations and Management Agreement and
Easement Agreement by and between the City of Charlotte and Seller, in
recordable form and as required under the PCO Administrative Manual (the
“Declaration of Transfer of Inspection/Maintenance Responsibilities”).

9.2.2 Original Property Information Documents. Seller will deliver to Purchaser
originals within Seller’s possession of all items constituting the Property
Information referenced in Article 4.

9.2.3 Possession. Seller will deliver to Purchaser possession of the Property,
subject to the Leases.

9.2.4 Keys. Seller will deliver to Purchaser all keys for the Property in the
possession or subject to the control of Seller, including, without limitation,
master keys as well as combinations, card keys and cards for the security
systems, if any.

9.2.5 Costs. Seller will pay all costs allocated to Seller pursuant to
Section 9.5 of this Agreement.

9.3 Purchaser’s Obligations at the Closing. At the Closing, Purchaser will do,
or cause to be done, the following:

9.3.1 Closing Documents. At Closing, Purchaser shall execute, acknowledge (if
necessary) and deliver originals of the following documents:

9.3.1.1 Assignment and Assumption Agreement in the form of Exhibit E hereto;

9.3.1.2 Settlement statement showing all of the payments, adjustments and
prorations provided for in Section 9.5 and otherwise agreed upon by Seller and
Purchaser;

9.3.1.3 Such evidence as may be reasonably required by the Title Company with
respect to the authority of the person(s) executing the documents required to be
executed by Purchaser on behalf of Purchaser;

9.3.1.4 A certificate stating that each of Purchaser’s representations and
warranties contained in this Agreement is true and correct; and

9.3.1.5 A duly executed Declaration of Transfer of Inspection/Maintenance
Responsibilities, in recordable form and as required under the PCO
Administrative Manual.

9.3.2 Payment of Consideration. Purchaser shall pay to Escrow Agent by bank wire
transfer of immediately available funds at Closing the Purchase Price in
accordance with Article 2 of this Agreement (subject to the credits, prorations
and adjustments provided hereby). The net closing proceeds due to Seller shall
be wire transferred to such account or accounts as Seller may designate, and
actually received in such account or accounts, not later than 2:00 p.m. (Eastern
time) on the Closing Date (the “Wiring Deadline”), with time being strictly of
the essence with respect thereto.

9.3.3 Costs. Purchaser will pay all costs allocated to Purchaser pursuant to
Section 9.5 of this Agreement.

 

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9.4 Escrow. The delivery of the documents and the payment of the sums to be
delivered and paid at the Closing shall be accomplished through an escrow with
the Escrow Agent.

9.5 Costs and Adjustments at Closing.

9.5.1 Expenses. Seller shall pay (a) the fees of any counsel representing Seller
in connection with this transaction, (b) one-half (1/2) of the escrow fee
charged by Escrow Agent, (c) the recording charges for the deed and any other
documents to clear title and (d) all transfer taxes, transfer fees, deed taxes
and other similar taxes or fees associated with the sale, including any State
excise Stamp tax. Purchaser shall pay (i) the fees of any counsel representing
Purchaser in connection with this transaction, (ii) costs and expenses related
to the Survey, (iii) the costs and expenses related to all of Purchaser’s due
diligence studies and investigations, (iv) one-half (1/2) of the escrow fee
charged by Escrow Agent, (v) all costs related to Purchaser’s financing of the
Property and (v) all charges and costs for any title examinations, title
commitments and title insurance, including the costs of any endorsements. Any
other costs or expenses incident to this transaction and the closing thereof not
expressly provided for above shall be allocated between and paid by the parties
in accordance with custom and practice in Mecklenburg County, North Carolina.

9.5.2 Real Estate and Personal Property Taxes. Real estate, personal property
and ad valorem taxes for the year in which the Closing occurs will be prorated
between Seller and Purchaser as of the Apportionment Time (as hereinafter
defined) on the basis of actual bills therefor, if available. If such bills are
not available as of the Closing, then such taxes and other charges shall be
prorated on the basis of the tax assessment for the 2015 year and the tax rate
for the 2014 year, or if unknown as of Closing, then the most currently
available tax assessment and the most currently available tax rate, thereafter,
promptly re-prorated upon the availability of actual bills for the applicable
period. Any and all rebates or reductions in taxes received subsequent to
Closing for the calendar year in which Closing occurs, net of costs of obtaining
the same (including without limitation reasonable attorneys’ fees) and net of
any amounts due to tenants, shall be prorated as of the Apportionment Time, when
received. The current installment of all special assessments, if any, which are
a lien against the Property at the time of Closing and which are being or may be
paid in installments shall be prorated as of the Apportionment Time. As used
herein, the term “Apportionment Time” shall mean 11:59 p.m. Eastern time on the
date immediately prior to the Closing Date.

9.5.3 Lease Security Deposits and Prepaid Rent. At Closing, Seller shall pay to
Purchaser, as a credit against the Purchase Price, an amount equal to all
security deposits, prepaid rent and other deposits held by Seller under the
Leases (together with accrued interest thereon required by law or by the terms
of the Leases), and thereafter Purchaser shall be solely obligated for the
return of such security deposits and other deposits.

9.5.4 Rents. All rents and other costs or charges paid by tenants under the
Leases shall be prorated as of the Apportionment Time, to the extent actually
collected by Seller. With respect to any rent or charges that are delinquent
prior to Closing, Seller shall have the right to pursue all rights and remedies
against the tenants to recover such delinquencies; provided, however, that
Seller shall not be entitled to dispossess such tenants. Purchaser shall
promptly remit to Seller any rent or payments for any charges received by
Purchaser subsequent to Closing which are attributable to periods prior to
Closing; provided, however, that such amounts received from tenants after
Closing will first be applied to such charges as are then due and then applied
in their reverse order of accrual until applied in full. From and after Closing
and

 

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for a period of sixty (60) days thereafter, Purchaser shall use commercially
reasonable efforts to collect from the tenants all rents that are delinquent for
the period prior to Closing, but Purchaser will not be obligated to institute
any lawsuit or other collection procedures to collect delinquent rents.

9.5.5 Utilities. Water, sewer, electric, fuel (if any) and other utility
charges, other than those for which tenants under Leases are responsible
directly to the provider, shall be prorated as of the Apportionment Time. If
consumption of any of the foregoing is measured by meter, Seller shall, prior to
the Closing Date, endeavor to obtain a reading of each such meter and a final
bill as of the Closing Date. If there is no such meter or if the bill for any of
the foregoing shall have not been issued as of the Closing Date, the charges
therefor shall be adjusted as of the Apportionment Time on the basis of the
charges of the prior period for which such bills were issued and shall be
further adjusted between the parties when the bills for the correct period are
issued. Seller and Purchaser shall cooperate to cause the transfer of utility
accounts from Seller to Purchaser. Seller shall be entitled to retain any
utility security deposits to be refunded. At Closing, Purchaser shall post
substitute utility security deposits to replace those previously paid by Seller
or, if the utility provider will not refund such deposits to Seller, Seller
shall be reimbursed therefor by Purchaser at Closing.

9.5.6 Contracts. All payments made or required under Contracts assumed by
Purchaser shall be adjusted and apportioned as of the Apportionment Time.

9.5.7 Insurance Policies. Premiums on insurance policies will not be adjusted.
As of the Closing Date, Seller will terminate its insurance coverage and
Purchaser will obtain its own insurance coverage.

9.5.8 Delayed Landscaping. Seller applied for and was granted the right to delay
the required planting, pruning and replacement of certain plants and trees
located on the Property (the “Delayed Landscaping”), such delay request is set
forth on Schedule 9.5.8 attached hereto and made a part hereof for all purposes.
Seller has received a quote from Color Landscapes, its landscaping subcontractor
for the construction of the Property, for the cost to complete the Delayed
Landscaping in the amount of Five Thousand Four Hundred and 00/100 Dollars
($5,400), as further described on Schedule 9.5.8. Seller acknowledges and agrees
that another contractor would charge more than $5,400 to complete the Delayed
Landscaping. As a result, Purchaser and Seller hereby agree that Seller shall
complete the Delayed Landscaping post-Closing, as set forth on Schedule 9.5.8
and in accordance with this Section 9.5.8, and escrow the Escrowed Funds
(hereinafter defined) as security for its performance.

9.5.8.1 Escrowed Funds. As security for the performance of Seller’s obligation
to complete the Delayed Landscaping after the Closing Date, Seller hereby
authorizes and directs the Escrow Agent to withhold Twenty-Five Thousand and
00/100 Dollars ($25,000) (the “Escrowed Funds”) of the Purchase Price otherwise
payable to Seller and deposit the Escrowed Funds in escrow with the Escrow
Agent, to be held in accordance with the Escrow Agreement, and to be disbursed
in accordance with Section 9.5.8.2 hereof.

9.5.8.2 Timing of Completion of Delayed Landscaping. Seller agrees to use
diligent efforts to complete the Delayed Landscaping on or before November 10,
2015. Seller shall notify Purchaser when the Delayed Landscaping is completed.
Seller and Purchaser shall conduct an inspection of the Property during the week
that Seller notifies Purchaser that the Delayed Landscaping is completed, or, if
Seller does not so notify Purchaser, during the week of November 10, 2015, to
determine which, if not all, of the Delayed Landscaping has been completed. If
the Delayed Landscaping has been completed, or if a percentage of the Delayed
Landscaping has been completed, then upon receipt of a release of lien from each
contractor that works on the Delayed

 

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Landscaping on behalf of Seller, Seller and Purchaser shall provide the Escrow
Agent with written notice that it shall disburse the Escrowed Funds, or a
percentage thereof, as applicable based on the amount of the Delayed Landscaping
that has been completed, to Seller. If as of November 10, 2015, none or only a
percentage of the Delayed Landscaping has been completed, then Purchaser shall
have the right to complete the Delayed Landscaping, submit any and all invoices
for the completion of Delayed Landscaping to the Escrow Agent, and receive a
disbursement of the Escrowed Funds in the amount of any and all such invoices up
to $25,000. Upon the completion of the Delayed Landscaping, and the payment of
all invoices therefor up to $25,000, Seller and Purchaser shall notify Escrow
Agent in writing that all remaining Escrowed Funds shall be released to Seller.
For purposes of this Section 9.5.8.2, the completion of the Delayed Landscaping
shall be determined by the city of Charlotte, North Carolina.

9.5.8.3 Access to Property for Repairs. Seller and Seller’s agents and
contractors shall have access to the Property, and shall have the right to
perform the Delayed Landscaping, on business days and Saturdays, between the
hours of 8:00 a.m. and 6:00 p.m. local time. Each time Seller, its agents and
contractors, enter upon the Property, such entrant shall check in with the
on-site property manager prior to commencing any work on the Delayed
Landscaping. Prior to Seller and Seller’s agents and contractors entering the
Property, Seller shall provide Purchaser with certificates of insurance showing
that Seller and its agents and contractors have obtained commercial general
liability insurance in amounts acceptable to Purchaser, the determination of
which not to be unreasonably withheld or delayed; provided that Seller shall
only be required to provide such certificates of insurance for those parties
actually accessing the Property. All expenses incurred by Seller in connection
with the Delayed Landscaping shall be paid by Seller. Seller shall indemnify,
defend and hold harmless Purchaser from and against any loss, cost, damage,
liability or expense incurred by Purchaser relating to the Delayed Landscaping
and/or Seller’s failure to pay any expenses relating thereto, and arising from
Seller’s and Seller’s agents’ and contractors’ entry on the Property and their
actions or inactions thereon.

9.5.8.4 Survival. The provisions and obligations of this Section 9.5.8 shall
survive the Closing.

9.5.9 Repairs of Property Conditions. Attached hereto as Schedule 9.5.9 is an
agreed upon list of repairs to be made to the Property (the “Outstanding
Repairs”) and cost estimates to complete such repairs. Purchaser and Seller
agree that Purchaser will receive a credit against the Purchase Price at Closing
in an amount equal to the total estimated costs of all such repairs as set forth
on Schedule 9.5.9 (the “Maximum Repair Credit”); provided, however, the Maximum
Repair Credit will be reduced to the extent Seller completes any Outstanding
Repairs to Purchaser’s reasonable satisfaction prior to Closing. During the week
that is one (1) week prior to the Closing Date, Purchaser’s property manager
shall have the right to inspect the Outstanding Repairs. Seller, or Seller’s
representative or consultant, shall have the right to participate in such
inspection. Purchaser’s property manager and Seller’s representative or
consultant shall complete a list of all of the remaining Outstanding Repairs,
and the repair credit shall be determined based on such list of Outstanding
Repairs (the “Outstanding Repair Credit”). Such determination of the Outstanding
Repairs and the Outstanding Repair Credit shall be final and binding on the
parties. Purchaser shall receive from Seller a credit against the Purchase Price
in the amount of the Outstanding Repair Credit, not to exceed the Maximum Repair
Credit. The Outstanding Repair Credit shall be reflected on each of Seller’s and
Purchaser’s settlement statements.

9.5.10 Closing Statement. Not later than five (5) Business Days prior to the
Closing, Seller or its agents or designees shall prepare, and promptly
thereafter, Seller and Purchaser shall jointly agree upon, a closing statement
(the “Closing Statement”) that will show the net amount due either to Seller

 

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or to Purchaser as the result of the adjustments and prorations provided for in
this Agreement, and such net due amount shall be added to or subtracted from the
cash balance of the Purchase Price to be paid to Seller at the Closing, as
applicable. Not later than the date that is one hundred thirty-five (135) days
after the Closing Date, Seller and Purchaser shall reprorate the adjustments and
prorations provided for herein, other than the proration for the estate,
personal property and ad valorem taxes, respecting any items that were not
capable of being determined as of the Closing Date or that previously were
wrongfully determined and need to be corrected and the manner in which such
items shall be determined and paid. The net amount due Seller or Purchaser, if
any, by reason of adjustments to the Closing Statement shall be paid in cash by
the party obligated therefor within five (5) Business Days following the
reproration by Seller and Purchaser. The reprorations agreed to by Seller and
Purchaser not later than one hundred thirty-five (135) days after the Closing
Date shall be conclusive and binding on the parties hereto except for any items
that are not capable of being determined at the time such reproration has been
made by Seller and Purchaser, which items shall be determined and paid promptly
as soon as they are capable of being determined. Prior to and following the
Closing Date, each party shall provide the other with such information as the
other shall reasonably request (including, without limitation, access to the
books, records, files, ledgers, information and data with respect to the
Property during normal business hours upon reasonable advance notice) in order
to make the preliminary and final adjustments and prorations provided for
herein. Notwithstanding anything herein to the contrary, when the actual amount
of taxes for the 2015 year is finally ascertained, any further adjustment will
be promptly made between the parties in cash.

9.5.11 Survival. The provisions of this Section 9.5 shall survive Closing.

ARTICLE 10 DAMAGE AND CONDEMNATION

10.1 Damage. If, prior to the Closing, all or any portion of the Property is
damaged by fire or any other cause whatsoever, Seller shall promptly give
Purchaser written notice of such damage.

10.1.1 Minor Damage. If the cost for repairing such damage is less than Seven
Hundred Fifty Thousand and No/100 Dollars ($750,000.00) (as determined by
Seller’s independent insurer), then Purchaser shall have the right at Closing to
receive the amount of the deductible plus all insurance proceeds received by
Seller as a result of such loss, or an assignment of Seller’s rights to such
insurance proceeds, and this Agreement shall continue in full force and effect
with no reduction in the Purchase Price, and Seller shall have no further
liability or obligation to repair such damage or to replace the Property.

10.1.2 Major Damage. If the cost for repairing such damage exceeds Seven Hundred
Fifty Thousand and No/100 Dollars ($750,000.00) (as determined by Seller’s
independent insurer), then Purchaser shall have the option, exercisable by
written notice delivered to Seller within five (5) Business Days after Seller’s
notice of damage to Purchaser, either (i) to receive the amount of the
deductible plus all insurance proceeds received by Seller as a result of such
loss, or an assignment of Seller’s rights to such insurance proceeds, and this
Agreement shall continue in full force and effect with no reduction in the
Purchase Price, and Seller shall have no further liability or obligation to
repair such damage or to replace the Property; or (ii) to terminate this
Agreement. If Purchaser elects to terminate this Agreement, Purchaser shall give
notice to Seller thereof, the Deposit shall be returned to Purchaser, and
thereafter neither party will have any further rights or obligations hereunder,
except for any obligations that expressly survive termination. If Purchaser
fails to notify Seller within such five (5) Business Day period (or such shorter
period so as to permit Closing to occur not later than the Closing Date, time
being strictly of the essence) of Purchaser’s election to terminate this
Agreement, then Purchaser shall be deemed to have elected option (i), and
Purchaser and Seller shall proceed to Closing in accordance with the terms and
conditions of this Agreement.

 

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10.2 Condemnation and Eminent Domain. In the event that any condemnation
proceedings are instituted, or notice of intent to condemn is given, with
respect to all or any portion of the Property that would result in a loss or
damage totaling more than Five Hundred Thousand Dollars ($500,000.00), either
Seller or Purchaser may terminate this Agreement by written notice to the other
party, in which event the Deposit will be returned to Purchaser. Seller shall
promptly notify Purchaser of any such condemnation proceedings or notice
thereof. If neither Seller nor Purchaser elects to terminate this Agreement
within ten (10) days after Purchaser receives written notice from Seller of the
occurrence of a condemnation proceedings, then Seller and Purchaser will be
deemed to have elected to proceed with Closing, in which event Seller will pay
to Purchaser any proceeds or awards theretofore received by Seller and assign to
Purchaser all of Seller’s right, title and interest to any other claims and
proceeds Seller may have with respect to any casualty insurance policies or
condemnation awards relating to the portion of the Property in question. If
neither Seller nor Purchaser elects to terminate this Agreement within such ten
(10) day period, the Purchase Price will be reduced by an amount equal to the
deductible amount under Seller’s insurance policy assigned to Purchaser. Upon
Closing, full risk of loss with respect to the Property will pass to Purchaser.

ARTICLE 11 REMEDIES AND ADDITIONAL COVENANTS

11.1 Seller Default At or Before Closing. If the sale of the Property as
contemplated hereunder is not consummated due to Seller’s default hereunder,
then Purchaser shall give Seller written notice of such breach or default on or
prior to the Closing Date and Seller shall have five (5) Business Days from the
date of receipt of such notice to cure such breach or default and the Closing
Date shall be extended accordingly. If Seller fails to cure such breach or
default within such five (5) Business Day period, then Purchaser shall be
entitled, as its sole and exclusive remedy, to either (i) terminate this
Agreement and receive the return of the Deposit, together with Purchaser’s
documented direct third party costs and expenses (including, without limitation,
attorneys’ fees) incurred in connection with its inspection of the Property and
negotiations of the transaction contemplated by this Agreement, not to exceed
One Hundred Thousand and No/100 Dollars ($100,000.00), which return and
reimbursement will operate to terminate this Agreement and release Seller from
any and all further liability hereunder or (ii) treat this Agreement as being in
full force and effect and pursue specific performance of this Agreement,
provided that Purchaser must commence any action for specific performance within
thirty (30) days after the scheduled Closing Date. Except as set forth in this
Section 11.1, Purchaser waives any right to pursue any other remedy at law or
equity for a default by Seller that causes the sale of Property contemplated
hereunder to not be consummated.

11.2 Seller Default From and After Closing. Subject to the limitations set forth
in Section 6.4 of this Agreement, if Seller is in breach or default of any of
its obligations or agreements hereunder that survive the Closing when
performance is required, including, without limitation, any obligations or
agreements under the documents delivered at Closing by Seller pursuant to
Section 9.2.1 of this Agreement, or if any of the Express Representations should
be false in any material respect and Purchaser shall first become actually aware
of same after the Closing Date, then Purchaser shall give Seller written notice
of such breach or default of such obligation, agreement or representation
hereunder prior to the expiration of the applicable survival period of such
breach or default, if any, and Seller shall have ten (10) days from the date of
receipt of such notice to cure such breach or default. If Seller fails to cure
such breach or default within such ten (10) day period, and the reasonably
estimated losses or damages sustained as a result of Seller’s failure or
inability to perform any of its obligations, agreements or Express
Representations hereunder exceed One Hundred Twenty-Five Thousand and 00/100
Dollars ($125,000.00), then Seller shall be liable for the actual direct damages
suffered by Purchaser due to such uncured breach or default from the first
dollar of loss. Notwithstanding anything to the contrary contained herein,
(i) in no event shall Seller be liable to Purchaser for damages in an aggregate
amount in excess of Five Hundred Twenty-Two Thousand Five Hundred and No/100
Dollars ($522,500.00), (ii) Seller’s inability to satisfy a condition of this
Agreement shall not be

 

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considered a default by Seller hereunder unless such inability results from a
breach of any of Seller’s representations set forth in Section 6.1 or a breach
of Seller’s express covenants and obligations hereunder, and (iii) if Purchaser
has knowledge of a default by Seller on the Closing Date and Purchaser elects to
close the transaction contemplated herein, Purchaser shall be deemed to have
irrevocably waived such default and Seller shall not have any liability with
respect to such default.

11.3 Purchaser Default. 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 Deposit 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 Deposit is a reasonable estimate thereof. The
right to receive the Deposit 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 Deposit
or to pursue any and all remedies at law or in equity.

11.4 Delivery of Materials. Notwithstanding anything contained in this Agreement
to the contrary, if this Agreement is terminated for any reason whatsoever, then
Purchaser shall promptly deliver to Seller all Property Information provided to
Purchaser by Seller, including copies thereof in any form whatsoever, including
electronic form, and if requested by Seller, and upon receipt of the
reimbursement of the costs therefor, Purchaser shall deliver to Seller without
representation or warranty of any kind, express or implied, any and all tests
results and studies of the Property performed by or on behalf of Purchaser
pursuant to Article 5, excluding any confidential or proprietary information or
financial modeling. The obligations of Purchaser under this Section 11.4 shall
survive any termination of this Agreement.

ARTICLE 12 BROKERAGE COMMISSION

12.1 Brokers. Seller represents and warrants to Purchaser that Seller has not
contacted or entered into any agreement with any real estate broker, agent,
finder, or any party in connection with this transaction, except for Apartment
Realty Advisors of the Carolinas, Inc. (“Seller’s Broker”) and that Seller has
not taken any action which would result in any real estate broker’s or finder’s
fees or commissions being due and payable to any party other than Seller’s
Broker with respect to the transaction contemplated hereby. Seller will be
solely responsible for the payment of Seller’s Broker’s commission in accordance
with the provisions of a separate agreement. Purchaser hereby represents and
warrants to Seller that Purchaser has not contracted or entered into any
agreement with any real estate broker, agent, finder, or any party in connection
with this transaction and that Purchaser has not taken any action which would
result in any real estate broker’s or finder’s fees or commissions being due or
payable to any party with respect to the transaction contemplated hereby.

12.2 Indemnity. Each party hereby indemnifies and agrees to hold the other party
harmless from and against any loss, liability, damage, cost, or expense
(including, without limitation, reasonable attorneys’ fees) paid or incurred by
the other party by reason of a breach of the representation and warranty made by
such party under this Article 12. Notwithstanding anything to the contrary
contained in this Agreement, the indemnities set forth in this Section 12.2
shall survive the Closing or earlier termination of this Agreement.

ARTICLE 13 NOTICES

13.1 Written Notice. All notices, demands and requests which may be given or
which are required to be given by either party to the other party under this
Agreement must be in writing.

 

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13.2 Method of Transmittal. All notices, demands, requests or other
communications required or permitted to be given hereunder must be sent (i) by
United States certified mail, postage fully prepaid, return receipt requested,
(ii) by hand delivery, (iii) by FedEx or a similar nationally recognized
overnight courier service or (iv) by facsimile or electronic mail (provided a
copy of such notice is deposited with a reputable overnight delivery service for
next business day delivery) to the address to the applicable party set forth
below. Any such notice shall be considered given on the date (i) which is three
(3) Business Days after deposit in the United States certified mail, postage
fully paid, return receipt requested, (ii) of such hand delivery, (iii) of
confirmed facsimile transmission and electronic mail delivery (provided a copy
of such notice is deposited with FedEx or a similar nationally recognized
overnight courier service for next business day delivery), or (iv) which is one
(1) Business Day after deposit with FedEx or a similar nationally recognized
overnight courier service for next business day delivery. 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.

13.3 Addresses. The addresses for proper notice under this Agreement are as
follows:

 

As to Seller:      GGT Crescent Alexander NC Venture, LLC      c/o Crescent
Communities, LLC      227 W. Trade Street      Suite 1000      Charlotte, NC
28202      Attention: Brian J. Natwick, President Multifamily Division      Fax:
(980) 321-6240      Email: bnatwick@crescentcommunities.com With copies to:     
GGT Crescent Alexander Holdings, LLC      CNL Center at City Commons      450
South Orange Avenue      Orlando, Florida 32801      Attention: Michael Tetrick
     Fax: (407) 540-2683      Email: mike.tetrick@cnl.com      and:      GGT
Crescent Alexander Holdings, LLC      CNL Center at City Commons      450 South
Orange Avenue      Orlando, Florida 32801      Attention: Tracey Bracco, Esq.,
Assistant General Counsel      Fax:                                     
                             Email: tracey.bracco@cnl.com      and:      Holt
Ney Zatcoff & Wasserman, LLP      100 Galleria Parkway      Suite 1800

 

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     Atlanta, GA 30339      Attention: Sanford H. Zatcoff, Esq.      Fax: (770)
956-1490      Email: szatcoff@hnzw.com      and:      Lowndes, Drosdick, Doster,
Kantor & Reed, P.A.      450 South Orange Avenue, Suite 800      Orlando,
Florida 32801      Attention: Joaquin E. Martinez, Esq.      Fax: (407) 418-6290
     Email: joaquin.martinez@lowndes-law.com As to Purchaser:      Alexander
Village Acquisition LP      3300 Bloor Street West      Suite 1801, West Tower
     Toronto, Ontario M8X 2X2      Attention: Evan Kirsh      Fax: 647-725-0144
     Email: ekirsh@starlightus.com With a copy to:      Strasburger & Price, LLP
     2801 Network Blvd., Ste. 600      Frisco, Texas 75034      Attention:
Sherry Meyer      Fax: 469-227-6578      Email: sherry.meyer@strasburger.com
As to Escrow Agent:      First American Title Insurance Company      Six
Concourse Parkway      Suite 2000      Atlanta, Georgia 30328      Attention:
Terry W. Wilson      Fax: (866) 735-3071      Email: twwilson@firstam.com

Either party may from time to time by written notice to the other party
designate a different address for notices. Notices sent to or from an address
outside of the continental United States shall be sent only by one of the
methods specified in clauses (ii) or (iii) of this Section 13.3. Anything
contained in this Section 13.3 to the contrary notwithstanding, all notices may
be executed and sent by the parties’ counsel.

ARTICLE 14 ASSIGNMENT

Neither party shall have the right to assign this Agreement without the prior
written consent of the other, which consent may be granted or withheld in the
sole and absolute discretion of the party whose consent has been requested.
Seller hereby consents to an assignment at Closing by Purchaser of its interest
in this Agreement to a wholly-owned subsidiary of Purchaser without further
evidence of such subsidiary’s

 

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financial capability to consummate Closing hereunder, provided that such
subsidiary shall assume, in writing (by execution of an assignment and
assumption agreement satisfactory to Seller), all of Purchaser’s obligations
under this Agreement.

ARTICLE 15 MISCELLANEOUS

15.1 Entire Agreement. This Agreement embodies the entire agreement between the
parties and cannot be varied except by the written agreement of the parties and
supersedes all prior agreements and undertakings.

15.2 Modifications. This Agreement may not be modified except by the written
agreement of the parties.

15.3 Gender and Number. Words of any gender used in this Agreement will be
construed to include any other gender and words in the singular number will be
construed to include the plural, and vice versa, unless the context requires
otherwise.

15.4 Captions. The captions used in connection with the Articles, Sections and
Subsections of this Agreement are for convenience only and will not be deemed to
expand or limit the meaning of the language of this Agreement.

15.5 Successors and Assigns. This Agreement will be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns.

15.6 Controlling Law. This Agreement will be construed under, governed by and
enforced in accordance with the laws of the State of North Carolina (without
reference to conflicts of laws principles).

15.7 Exhibits. All exhibits, attachments, schedules, annexed instruments and
addenda referred to herein will be considered a part hereof for all purposes
with the same force and effect as if set forth verbatim herein.

15.8 No Rule of Construction. Seller and Purchaser have each been represented by
counsel in the negotiations and preparation of this Agreement; therefore, this
Agreement will be deemed to be drafted by both Seller and Purchaser, and no rule
of construction will be invoked respecting the authorship of this Agreement.

15.9 Severability. In the event that any one or more of the provisions contained
in this Agreement (except the provisions relating to Seller’s obligations to
convey the Property and Purchaser’s obligation to pay the Purchase Price, the
invalidity of either of which shall cause this Agreement to be null and void)
are held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability will not affect any other provisions
hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had not been contained herein, provided, however, that
the parties hereto shall endeavor in good faith to rewrite the affected
provision to make it (i) valid, and (ii) consistent with the intent of the
original provision.

15.10 Time of Essence. Time is important to both Seller and Purchaser in the
performance of this Agreement, and both parties have agreed that TIME IS OF THE
ESSENCE with respect to any date set out in this Agreement.

15.11 Business Days. “Business Day” means any day on which business is generally
transacted by banks in the State of North Carolina and banks in Toronto,
Ontario, Canada. If the final date of any period which is set out in any
paragraph of this Agreement falls upon a day which is not a Business Day, then,
and in such event, the time of such period will be extended to the next Business
Day.

 

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15.12 No Memorandum. Purchaser and Seller agree not to record this Agreement or
any memorandum hereof.

15.13 Press Releases. Prior to Closing, any release to the public of information
with respect to the sale contemplated herein or any matters set forth in this
Agreement will be made only in the form approved by Purchaser and Seller except
for any disclosure that may be required by law or applicable regulation to be
made to any applicable governmental or quasi-governmental authorities or to the
public. After the Closing has occurred, Seller and Purchaser shall each have the
right to issue a press release regarding consummation of the transactions
contemplated in this Agreement.

15.14 Attorneys’ Fees and Costs. In the event either party is required to resort
to litigation to enforce its rights under this Agreement, the non-prevailing
party in such litigation shall pay the costs, expenses and attorneys’ fees
incurred by the prevailing party in connection with such action.

15.15 Counterparts and Expiration of Offer. This Agreement may be executed in
multiple counterparts which shall together constitute a single document.
However, this Agreement shall not be effective unless and until all counterpart
signatures have been obtained. An unsigned draft of this Agreement shall not be
considered an offer by either party to purchase or sell the Property.

15.16 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY IN CONNECTION
WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE
RELATIONSHIP OF SELLER AND PURCHASER HEREUNDER, PURCHASER’S OWNERSHIP OR USE OF
THE PROPERTY, AND/OR ANY CLAIMS OF INJURY OR DAMAGE RELATED TO THE PROPERTY.

15.17 Confidentiality

15.17.1 Except as provided otherwise in this Section 15.17, Purchaser and
Seller, for the benefit of each other, hereby agree that neither of them will
release or cause or permit to be released to the public any press notices,
publicity (oral or written) or advertising promotion relating to, or otherwise
publicly announce or disclose or cause or permit to be publicly announced or
disclosed, in any manner whatsoever, the terms, conditions or substance of this
Agreement or the transactions contemplated herein, without first obtaining the
consent of the other party hereto, which may be granted or withheld in the sole
discretion of the other party. However, each party consents to any disclosure of
this Agreement which the other party reasonably believes is required by law, by
the public disclosure obligations required by the U.S. Securities and Exchange
Commission, by Ontario Securities Commission or which is recommended in good
faith by counsel to such other party.

15.17.2 It is understood that the foregoing shall not preclude any party from
discussing the substance or any relevant details of the transactions
contemplated in this Agreement on a confidential basis with any of its
attorneys, accountants, professional consultants, financial advisors, rating
agencies, or potential lenders, as the case may be, or prevent any party hereto
from complying with applicable laws, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements. Notwithstanding the
foregoing, Purchaser shall have the right to deliver such information to
Purchaser’s potential investors and potential lenders, in each case on a
need-to-know basis after the recipients have been informed of the confidential
nature of such information and directed not to disclose such information except

 

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in accordance with this Section 15.17. The aforementioned shall not preclude the
disclosure to potential investors of the proposed purchase price, the net
operating income of the Property and the approximate rate of return on the
investment.

15.17.3 In addition to any other remedies available to Seller and Purchaser,
Seller and Purchaser shall each have the right to seek equitable relief,
including, without limitation, injunctive relief or specific performance,
against the other party or its representatives in order to enforce the
provisions of this Section 15.17.

15.17.4 Notwithstanding any other provision of this Agreement, the provisions of
Section 15.17 shall survive the termination of this Agreement for one (1) year
following the Effective Date, but shall not survive Closing.

15.18 Jurisdiction and Service of Process. The parties hereto agree to submit to
personal jurisdiction in the State of North Carolina in any action or proceeding
arising out of this Agreement and, in furtherance of such agreement, the parties
hereby agree and consent that without limiting other methods of obtaining
jurisdiction, personal jurisdiction over the parties in any such action or
proceeding may be obtained within or without the jurisdiction of any court
located in the State of North Carolina and that any process or notice of motion
or other application to any such court in connection with any such action or
proceeding may be served upon the parties by certified mail to or by personal
service at the last known address of the parties, whether such address be within
or without the jurisdiction of any such court. Purchaser hereby irrevocably
designates its counsel, Strasburger & Price, LLP, as its agent for service of
process in connection with any matter relating to this Agreement. The provisions
of this Section 15.18 shall survive the Closing or the termination hereof.

15.19 Exculpation. Purchaser agrees that it does not have and will not have any
claims or causes of action against the Seller Knowledge Individual or any
disclosed or undisclosed officer, director, employee, trustee, shareholder,
member, manager, partner, principal, parent, subsidiary or other affiliate of
Seller, or any officer, director, employee, trustee, shareholder, partner or
principal of any such parent, subsidiary or other affiliate (collectively,
“Seller’s Affiliates”), arising out of or in connection with this Agreement or
the transactions contemplated hereby. Purchaser agrees to look solely to Seller
and its assets for the satisfaction of any liability or obligation arising under
this Agreement or the transactions contemplated hereby, or for the performance
of any of the covenants, warranties or other agreements contained herein, and
further agrees not to sue or otherwise seek to enforce any personal obligation
against any of Seller’s Affiliates with respect to any matters arising out of or
in connection with this Agreement or the transactions contemplated hereby.
Without limiting the generality of the foregoing provisions of this
Section 15.19, Purchaser hereby unconditionally and irrevocably waives any and
all claims and causes of action of any nature whatsoever it may now or hereafter
have against Seller’s Affiliates, and hereby unconditionally and irrevocably
releases and discharges Seller’s Affiliates from any and all liability
whatsoever which may now or hereafter accrue in favor of Purchaser against
Seller’s Affiliates, in connection with or arising out of this Agreement or the
transactions contemplated hereby.

Seller agrees that it does not have and will not have any claims or causes of
action against any disclosed or undisclosed officer, director, employee,
trustee, shareholder, member, manager, partner, principal, parent, subsidiary or
other affiliate of Purchaser, or any officer, director, employee, trustee,
shareholder, partner or principal of any such parent, subsidiary or other
affiliate (collectively, “Purchaser’s Affiliates”), arising out of or in
connection with this Agreement or the transactions contemplated hereby. Seller
agrees to look solely to Purchaser and its assets for the satisfaction of any
liability or obligation arising under this Agreement or the transactions
contemplated hereby, or for the performance of any of the covenants, warranties
or other agreements contained herein, and further agrees not to sue or otherwise
seek

 

27

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to enforce any personal obligation against any of Purchaser’s Affiliates with
respect to any matters arising out of or in connection with this Agreement or
the transactions contemplated hereby. Without limiting the generality of the
foregoing provisions of this Section 15.19, Seller hereby unconditionally and
irrevocably waives any and all claims and causes of action of any nature
whatsoever it may now or hereafter have against Purchaser’s Affiliates, and
hereby unconditionally and irrevocably releases and discharges Purchaser’s
Affiliates from any and all liability whatsoever which may now or hereafter
accrue in favor of Seller against Purchaser’s Affiliates, in connection with or
arising out of this Agreement or the transactions contemplated hereby.

The provisions of this Section 15.19 shall survive the termination of this
Agreement and the Closing.

ARTICLE 16 NORTH CAROLINA PROVISIONS

16.1 No conversion of the Property to condominiums shall be allowed for the term
set forth in the Declaration of Restriction on Condominium Conversions attached
hereto as Exhibit G, which Purchaser expressly agrees Seller shall have the
right to record against the Property at or prior to the Closing Date and which,
if so recorded, shall be deemed to be a Permitted Exception, unless and until
Seller expressly consents in writing to such condominium conversion, in Seller’s
sole and absolute discretion.

16.2 The provisions of this Article 16 shall survive Closing.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement
as of the date first written above.

 

SELLER: GGT CRESCENT ALEXANDER NC VENTURE, LLC, a Delaware limited liability
company By:   Crescent Alexander Village I, LLC, a Delaware limited liability
company, its Operating Member   By:   Crescent Communities, LLC, a Georgia
limited liability company, its sole manager     By:  

/s/ Brian J. Natwick

      Brian J. Natwick, President-Multifamily Division PURCHASER:

ALEXANDER VILLAGE ACQUISITION LP,

a Delaware limited partnership

By:   Alexander Village Acquisition (GP) LP   its general partner     By:  

/s/ Evan Kirsh

      Evan Kirsh       President

 

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EXHIBIT A

LEGAL DESCRIPTION

Intentionally Omitted

EXHIBIT B

ESCROW AGREEMENT

Intentionally Omitted

EXHIBIT C

FORM OF SPECIAL WARRANTY DEED

NORTH CAROLINA SPECIAL WARRANTY DEED

Intentionally Omitted

EXHIBIT A

Intentionally Omitted

EXHIBIT B

PERMITTED EXCEPTIONS

Intentionally Omitted

EXHIBIT D

FORM OF BILL OF SALE

Intentionally Omitted

EXHIBIT A

REAL PROPERTY DESCRIPTION

Intentionally Omitted

EXHIBIT E

FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

Intentionally Omitted

 

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EXHIBIT A

Real Property Description

Intentionally Omitted

EXHIBIT B

Leases, Licenses and Security Deposits

Intentionally Omitted

EXHIBIT C

Contracts

Intentionally Omitted

EXHIBIT F

FORM OF TENANT NOTIFICATION LETTER

Intentionally Omitted

EXHIBIT G

FORM DECLARATION OF RESTRICTIONS ON CONDOMINIUM CONVERSIONS

Intentionally Omitted

EXHIBIT A

Intentionally Omitted

EXHIBIT H

FORM OF CERTIFICATE OF NON-FOREIGN STATUS

Intentionally Omitted

EXHIBIT I

Electronic Confidentiality Agreement

Intentionally Omitted

SCHEDULE 1.4

RENT ROLL

Intentionally Omitted

 

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SCHEDULE 1.5

LICENSES

None.

SCHEDULE 1.8

CONTRACTS

Intentionally Omitted

SCHEDULE 6.1.3

LITIGATION

None.

SCHEDULE 6.1.8

VIOLATIONS OF LAW

None.

SCHEDULE 9.5.8

LANDSCAPING DELAY REQUEST AND QUOTE

Intentionally Omitted

SCHEDULE 9.5.9

PROPERTY REPAIRS

Intentionally Omitted

 

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