EXHIBIT 10.1

 

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

 

by and between

 

VILLAGES AT SPRING HILL, L.P.,

a Tennessee limited partnership

 

(“Seller”)

 

and

 

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

 

(“Buyer”)

 

 

11679284.5

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TABLE OF CONTENTS

 

 

 

 

 

 

Page No.

1.

PURCHASE AND SALE

4 

 

1.1

Property

4 

 

1.2

No Warranty

4 

2.

PURCHASE PRICE

6 

3.

PAYMENT OF PURCHASE PRICE

6 

 

3.1

Deposit

6 

 

3.2

Remainder of Purchase Price

7 

 

3.3

Buyer Default; Liquidated Damages

7 

 

3.4

Seller Default; Specific Performance

8 

4.

ESCROW INSTRUCTIONS

9 

 

4.1

Opening of Escrow

9 

 

4.2

Conditions to Close

9 

 

4.3

Recordation and Transfer

10 

5.

CLOSING

10 

 

5.1

Generally

10 

 

5.2

Extension Option

10 

 

5.3

Existing Loan

11 

6.

BUYER’S REVIEW

11 

 

6.1

Delivery of Documents

11 

 

6.2

Access

12 

 

6.3

Title and Survey

12 

 

6.4

Buyer’s Due Diligence

14 

 

6.5

Buyer’s Termination Right

15 

 

6.6

Contracts

15 

7.

REPRESENTATIONS AND WARRANTIES

15 

 

7.1

Seller’s Representations and Warranties

15 

 

7.2

Buyer’s Representations and Warranties

19 

 

7.3

Release

19 

8.

COVENANTS

19 

 

8.1

Seller

20 

 

8.2

Buyer

22 

9.

ADJUSTMENTS AND PRORATIONS

23 

 

9.1

Generally

23 

 

9.2

Rental Income

23 

 

9.3

Proration Period

23 

 

9.4

Rent Ready

24 

10.

CLOSING DOCUMENTS

24 

 

10.1

Seller’s Deliveries

24 

 

10.2

Buyer’s Deliveries

24 

 

10.3

Other Closing Documents

24 

 

10.4

Closing Documents

24 

1

 

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11.

COSTS

25 

12.

CASUALTY OR CONDEMNATION

25 

13.

ATTORNEYS’ FEES

27 

14.

ASSIGNMENT

27 

15.

WAIVER

27 

16.

GOVERNING LAW

28 

17.

NOTICES

28 

18.

ENTIRE AGREEMENT

30 

19.

COUNTERPARTS; COPIES

30 

20.

AUTHORITY

30 

21.

RECORD ACCESS AND RETENTION

31 

22.

CONTRACT CONSIDERATION

31 

23.

JURY TRIAL WAIVER

32 

24.

COUNSEL

32 

25.

equal participATiON

32 

26.

CONFIDENTIALITY

32 

 

2

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EXHIBITS

Exhibit “A”

Real Property Description

Exhibit “B”

Personal Property Description

Exhibit “C”

Due Diligence Documents

Exhibit “D”

Form of Deed

Exhibit “E”

Form of General Assignment

Exhibit “F”

Form of Bill of Sale

Exhibit “G”

Form of Non-Foreign Certificate

Exhibit “H”

Form of Tenant Notice

SCHEDULES

Schedule 1

Leases

Schedule 2

Contracts

Schedule 7.1.8

Litigation Schedule

 

 

 

3

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PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

 

This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”) is
made and entered into as of the 7th day of April, 2014, by and between VILLAGES
AT SPRING HILL, L.P., a  Tennessee limited partnership (“Seller”), and STEADFAST
ASSET HOLDINGS, INC., a California corporation (“Buyer”), with reference to the
following facts:

RECITALS:

A. Seller is the fee owner of that certain land with a multi-family residential
project commonly known as Villages at Spring Hill, consisting of 176 units
situated thereon, located at 200 Kedron Parkway, Spring Hill, TN 37174 and more
particularly described in Exhibit “A” attached hereto, together with all
structures, improvements, machinery, fixtures and equipment affixed or attached
to such land (collectively referred to herein as the “Real Property”).

B. Seller desires to sell the Real Property, along with certain related personal
and intangible property, to Buyer, and Buyer desires to purchase such Real
Property and related personal and intangible property from Seller in accordance
with the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereto mutually agree as follows:

1. PURCHASE AND SALE.

 

1.1. Property.  Subject to and accordance with the terms and conditions of this
Agreement, and for the consideration herein set forth, Seller agrees to sell and
transfer, and Buyer agrees to purchase and acquire, all of Seller’s right,
title, and interest in and to the following (collectively, the “Property”):

 

1.1.1. The Real Property;

 

1.1.2. All easements, licenses, interests, rights, privileges, tenements,
hereditaments and appurtenances on or in any way appertaining to the Real
Property, including, without limitation, all water and water rights;

 

1.1.3. All equipment, tools, machinery, materials, furniture, furnishings,
supplies and other tangible personal property owned by Seller and located on or
used exclusively in connection with or arising out of the ownership, management
or operation of the Real Property (collectively, “Personal Property”); the
Personal Property owned by Seller as of the date hereof is identified on Exhibit
“B” attached hereto;

1.1.4. All leases and occupancy agreements relating to the Property in effect on
the Date of Closing (as hereinafter defined), including all amendments thereto

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(collectively, “Leases”); the Leases in effect on the date of this Agreement are
identified on the rent roll attached hereto as Schedule 1 (the “Rent Roll”);

 

1.1.5. Subject to Section 6.6 below, to the extent assignable, all service,
maintenance, supply or other contracts relating to the leasing, advertising,
management, operation, maintenance or repair of the Property in effect as of the
date hereof (including without limitation all warranties and guarantees
thereunder), which are identified on Schedule 2 attached hereto (collectively,
“Contracts”); 

 

1.1.6. To the extent assignable, all licenses, permits, certificates of
occupancy and governmental approvals relating exclusively to the Property
(collectively, “Approvals”) and any plans, specifications, studies, reports or
surveys relating exclusively to the Real Property; and

 

1.1.7. To the extent assignable, all entitlements and intangible personal
property in connection with or arising out of the design, construction,
occupancy, use, management, operation, maintenance, repair or ownership of the
Real Property, including, without limitation, trade names (including “Villages
at Spring Hill” or derivatives thereof), websites, web domains and internet
addresses, all phone number(s) for the Real Property, all fax number(s) for the
Real Property and logos owned by Seller and used solely in connection therewith
(collectively, the “Intangible Property”).

 

Included in the Property shall be any and all the foregoing items in which any
affiliate of Seller has any right, title or interest, to the extent the same is
used solely in connection with the Real Property unless otherwise expressly
agreed to by Buyer; it being understood and agreed that Seller shall cause such
affiliate to convey the same to Buyer at Closing.

Seller hereby confirms to Buyer that no vehicles are included in the Personal
Property, and that no material Personal Property or Contracts are held in the
name of Seller’s property manager or any affiliate of Seller except as
specifically noted on Exhibit “B” or Schedule 2, as applicable.

1.2. No Warranty.  THE ENTIRE AGREEMENT BETWEEN THE SELLER AND BUYER WITH
RESPECT TO THE PROPERTY AND THE SALE THEREOF IS EXPRESSLY SET FORTH IN THIS
AGREEMENT.  THE PARTIES ARE NOT BOUND BY ANY AGREEMENTS, UNDERSTANDINGS,
PROVISIONS, CONDITIONS, REPRESENTATIONS OR WARRANTIES (WHETHER WRITTEN OR ORAL
AND WHETHER MADE BY SELLER OR ANY AGENT, EMPLOYEE, MEMBER, OFFICER OR PRINCIPAL
OF SELLER OR ANY OTHER PARTY) OTHER THAN AS ARE EXPRESSLY SET FORTH IN THIS
AGREEMENT AND IN THE DEED AND THE OTHER DOCUMENTS DELIVERED BY BUYER AND/OR
SELLER AT CLOSING.  FOR AVOIDANCE OF DOUBT, TO THE EXTENT THAT SELLER OR
PROPERTY MANAGER PROVIDES THE BUYER WITH THE REIT PROPERTY SERVICES
QUESTIONNAIRE REQUESTED ON EXHIBIT C, THE INFORMATION CONTAINED THEREIN IS NOT
INTENDED TO, AND EXPRESSLY WILL NOT, CONSTITUTE A REPRESENTATION OR WARRANTY BY
SELLER OR THE PROPERTY MANAGER WITH REGARD TO THE PROPERTY OR THE CONTENTS
THEREOF, IT BEING UNDERSTOOD THAT SUCH QUESTIONNAIRE IS BEING PROVIDED MERELY AS
AN ACCOMMODATION TO BUYER, WITHOUT

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REPRESENTATION OR WARRANTY REGARDING THE ACCURACY OF SUCH INFORMATION. WITHOUT
IN ANY MANNER LIMITING THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES THAT,
EXCEPT FOR THE REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF SELLER
EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE DEED AND OTHER DOCUMENTS
DELIVERED AT CLOSING, THE PROPERTY, THE LEASES AND THE CONTRACTS WILL BE
PURCHASED BY BUYER IN AN “AS IS” AND “WHERE IS” CONDITION AND WITH ALL EXISTING
DEFECTS (PATENT AND LATENT) AND NOT IN RELIANCE ON ANY AGREEMENT, UNDERSTANDING,
CONDITION, WARRANTY (INCLUDING, WITHOUT LIMITATION, WARRANTIES OF HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) OR REPRESENTATION MADE BY
SELLER OR ANY AGENT, EMPLOYEE, MEMBER, OFFICER OR PRINCIPAL OF SELLER OR ANY
OTHER PARTY (EXCEPT FOR REPRESENTATIONS EXPRESSLY PROVIDED IN THIS AGREEMENT AND
IN THE DEED AND OTHER DOCUMENTS DELIVERED AT CLOSING) AS TO THE FINANCIAL OR
PHYSICAL (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL) CONDITION OF THE
PROPERTY OR THE AREAS SURROUNDING THE PROPERTY, OR AS TO ANY OTHER MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, AS TO ANY PERMITTED USE THEREOF, THE
ZONING CLASSIFICATION THEREOF OR COMPLIANCE THEREOF WITH FEDERAL, STATE OR LOCAL
LAWS, AS TO THE INCOME OR EXPENSE IN CONNECTION THEREWITH, OR AS TO ANY OTHER
MATTER IN CONNECTION THEREWITH.  BUYER ACKNOWLEDGES THAT, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT OR IN THE DEED OR IN THE OTHER
DOCUMENTS DELIVERED AT CLOSING, NEITHER SELLER, NOR ANY AGENT, MEMBER, OFFICER,
EMPLOYEE OR PRINCIPAL OF SELLER NOR ANY OTHER PARTY ACTING ON BEHALF OF SELLER
(INCLUDING PROPERTY MANAGER AND ITS EMPLOYEES) HAS MADE OR SHALL BE DEEMED TO
HAVE MADE ANY SUCH AGREEMENT, CONDITION, REPRESENTATION OR WARRANTY EITHER
EXPRESSED OR IMPLIED.

2. PURCHASE PRICE.

 

The total purchase price (“Purchase Price”) to be paid by Buyer to Seller for
the Property shall be FOURTEEN MILLION TWO HUNDRED THOUSAND AND 00/100 DOLLARS
($14,200,000.00), payable all in cash.

3. PAYMENT OF PURCHASE PRICE.

 

The Purchase Price shall be paid as follows:

3.1. Deposit.  As part of the Opening of Escrow (as defined below), Buyer shall
deliver to First American Title Insurance Company (“Escrow Holder”), which has
an address of 414 Union Street, Suite 1205, Nashville, Tennessee 37219, Attn:
Susan Felts, the sum of ONE HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS
($150,000.00) (“Initial Deposit”) in immediately available funds as a good faith
deposit.  In addition, if the Agreement has not been terminated pursuant to
Sections 6.3, 6.4 or 12 below, Buyer shall deposit with Escrow Holder an
additional sum of ONE HUNDRED THOUSAND AND 00/100 DOLLARS

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($100,000.00) (“Additional Deposit”) in immediately available funds within two
(2) Business Days after the expiration of the Due Diligence Period (as
hereinafter defined).  The Initial Deposit, the Additional Deposit, the
Extension Deposit (as hereinafter defined), if any, and all interest earned on
any of the foregoing, shall be collectively referred to in this Agreement as the
“Deposit”.  Escrow Holder shall place the Deposit in one or more government
insured interest-bearing accounts satisfactory to Seller and Buyer (which shall
have no penalty for early withdrawal), and shall not commingle the Deposit with
any funds of Escrow Holder or any other person or entity.  If the transaction
closes in accordance with the terms of this Agreement, the Deposit shall be
delivered by the Escrow Holder to Seller as part payment of the Purchase Price
with credit for such amount given to Buyer on the Settlement Statement (as
defined below).  The Deposit shall be returned to Buyer if (y) Buyer elects to
terminate this Agreement in accordance with Section 6.5 or Section 12 below or
(z) Escrow fails to close due to (i) Seller’s breach of this Agreement, or (ii)
the failure of a condition to close under Section 4.2 (other than a failure of
Buyer to deliver funds or instruments under Section 4.2.2, a breach by Buyer
under Section 4.2.4 or 4.2.5, or a action against Buyer under Section 4.2.6);
otherwise, the Deposit shall be deemed earned by and released to Seller pursuant
to Section 3.3 below if the Agreement terminates for any other reason.  In the
event of a termination of this Agreement by either Seller or Buyer for any
reason other than pursuant to Section 6.5, Escrow Holder is authorized to
deliver the Deposit to the party hereto entitled to same pursuant to the terms
hereof on or before the fifth (5th) Business Day following receipt by Escrow
Holder and the non-terminating party of written notice of such termination from
the terminating party, unless the other party hereto notifies Escrow Holder, in
good faith, that it disputes the right of the other party to receive the
Deposit.  In such event, Escrow Holder may either disburse the Deposit in
accordance with a jointly executed instruction letter from Seller and Buyer or,
if no such instruction letter is received within five  (5) Business Days after
the Escrow Holder’s receipt of the original letter identifying the dispute,
interplead the Deposit into a court of competent jurisdiction in the county in
which Escrow Holder is located.  All attorneys’ fees and costs and Escrow
Holder’s costs and expenses incurred in connection with such interpleader shall
be assessed against the party that is not awarded the Deposit, or if the Deposit
is distributed in part to both parties, then in the inverse proportion of such
distribution.  As used in this Agreement, “Business Day” means any day other
than a Saturday or Sunday or a legal holiday on which commercial banks are
authorized or required to be closed for business in the state in which the
Property is located.

 

3.2. Remainder of Purchase Price.  On or before the Closing Date, Buyer shall
deposit into Escrow immediately available funds in an amount which, when added
to the Deposit, will equal the Purchase Price plus any additional amounts
necessary to cover costs and/or prorations under this Agreement.

 

3.3. Buyer Default; Liquidated Damages.  SELLER AND BUYER AGREE THAT, IF THE
PURCHASE AND SALE OF THE PROPERTY IS NOT COMPLETED AND THIS AGREEMENT TERMINATES
BECAUSE BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT
(AFTER WRITTEN NOTICE FROM SELLER AND TEN (10) DAYS TO CURE), AND SELLER IS NOT
IN MATERIAL DEFAULT HEREUNDER EXCEPT WITH RESPECT TO BUYER’S OBLIGATION TO
DELIVER THE PURCHASE PRICE TO ESCROW HOLDER, FOR WHICH NO NOTICE OR CURE SHALL
BE

7

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AVAILABLE), THE PORTION OF THE DEPOSIT THEN DEPOSITED WITH ESCROW HOLDER
PURSUANT TO THIS AGREEMENT SHALL BE PAID TO SELLER PURSUANT TO THE TERMS OF THIS
AGREEMENT UPON TERMINATION OF THIS AGREEMENT AND RETAINED BY SELLER AS
LIQUIDATED DAMAGES AND AS SELLER’S SOLE REMEDY AT LAW OR IN EQUITY, AT WHICH
TIME THIS AGREEMENT SHALL BE NULL AND VOID AND NEITHER PARTY SHALL HAVE ANY
RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT EXCEPT THOSE THAT EXPRESSLY SURVIVE
TERMINATION.  SELLER AND BUYER AGREE THAT, UNDER THE CIRCUMSTANCES EXISTING AS
OF THE DATE OF THIS AGREEMENT, ACTUAL DAMAGES MAY BE DIFFICULT TO ASCERTAIN AND
THE PORTION OF THE DEPOSIT THEN DEPOSITED WITH ESCROW HOLDER PURSUANT TO THIS
AGREEMENT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY
SELLER IF BUYER MATERIALLY DEFAULTS UNDER OR MATERIALLY BREACHES THIS AGREEMENT
AND FAILS TO PURCHASE THE PROPERTY.

 

 

SELLER’S INITIALS:  LAA

BUYER’S INITIALS:  ADR

 

3.4. Seller Default; Specific Performance.  If Seller fails to consummate the
sale of the Property pursuant to this Agreement or otherwise materially defaults
on its obligations hereunder at or prior to Closing for any reason except
failure by Buyer to perform hereunder  or materially breaches any representation
or warranty in this Agreement, and such default or breach has not been cured
within ten (10) days after written notice thereof has been delivered to Seller
and Buyer is not in material default hereunder (except no notice or cure period
shall apply if Seller fails to deliver the executed Settlement Statement and
Closing Documents on the Closing Date), Buyer may,  (a) terminate this Agreement
by giving Seller timely written notice of such termination prior to or at
Closing and recover the Deposit and any and all Buyer’s Costs (as hereinafter
defined) incurred as of the date of such termination, in which event this
Agreement shall be null and void and neither party shall have any rights or
obligations under this Agreement except those that expressly survive
termination, (b) enforce specific performance to consummate the sale of the
Property hereunder, provided an action is filed within thirty (30) days after
Buyer notifies Seller of such default,  or (c) waive said default or breach and
proceed to Closing without any reduction in the Purchase Price.  Buyer’s
remedies shall be limited to those described in this Section 3.4 and Section
13.  If, however, the equitable remedy of specific performance is not available,
Buyer may seek to recover from Seller Buyer’s Costs (as defined herein), which
shall not exceed an amount equal to One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00) unless Buyer has deposited the Additional Deposit, in
which event said amount shall be increased to Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00).  For purposes of this Agreement, “Buyer’s Costs”
shall mean the actual expenses incurred by Buyer and paid (A) to Buyer’s
attorneys (including in-house attorneys) in connection with the negotiation of
this Agreement or the proposed purchase of the Property, (B) to third party
consultants in connection with the performance of examinations, inspections
and/or investigations pursuant to Section 6 and (C) to any potential lender in
connection with any proposed financing of the Property.

 

4. ESCROW INSTRUCTIONS.

 

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4.1. Opening of Escrow.  Within one  (1) Business Day after the mutual execution
and delivery of this Agreement, the parties shall open an escrow (“Escrow”) with
Escrow Holder in order to consummate the purchase and sale in accordance with
the terms and provisions hereof by (i) Buyer delivering to Escrow Holder the
Initial Deposit and (ii) Buyer and Seller delivering to Escrow Holder their
respective executed counterparts of this Agreement (collectively, the “Opening
of Escrow”).  Escrow Holder shall deliver written confirmation of the date of
the Opening of Escrow to the parties in the manner set forth in Section 17 of
this Agreement.  This Agreement shall be countersigned by Escrow Holder and the
provisions hereof shall constitute joint primary escrow instructions to Escrow
Holder; provided, however, that the parties shall execute such reasonable
additional instructions as requested by Escrow Holder not inconsistent with the
provisions hereof.

 

4.2. Conditions to Close.  Escrow shall not close unless and until the following
conditions precedent and contingencies have been satisfied or waived in writing
by the party for whose benefit the conditions have been included:

 

4.2.1. Intentionally omitted.

 

4.2.2. All funds and instruments described in Sections 3 and 10 have been
delivered to Escrow Holder, and  both Seller and Buyer have approved, executed
and delivered a settlement statement reflecting the Purchase Price, all
prorations, and all closing costs as required under this Agreement (the
“Settlement Statement”).

 

4.2.3. The title department of Escrow Holder is irrevocably committed to issue
an ALTA 2006 extended owner’s policy of title insurance, in form and content
acceptable to Buyer, insuring Buyer’s fee simple title to the Real Property in
an amount equal to the Purchase Price subject only to the Permitted Exceptions
(as hereinafter defined) and subject to no conditions other than payment of the
applicable premium therefor.

 

4.2.4. Seller and Buyer shall each have materially performed, observed and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, observed and/or complied with by such party prior to,
or as of, the Closing.

 

4.2.5. Seller’s and Buyer’s representations and warranties contained herein
shall be true and correct in all material respects as of the date hereof and as
of the Closing Date, except for representations and warranties made as of, or
limited by, a specific date, which will be true and correct in all material
respects as of the specified date or as limited by the specified date.

 

4.2.6. There shall exist no pending or threatened (in writing) actions, suits,
arbitrations, claims, attachments, proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy, reorganization or other proceedings, against
the other party that would materially and adversely affect that party’s ability
to perform its obligations under this Agreement.

 

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4.3. Recordation and Transfer.  Upon satisfaction of the conditions set forth in
Section 4.2 above, Escrow Holder shall transfer the Property as follows:

 

4.3.1. Disburse all funds deposited with Escrow Holder by Buyer in payment of
the Purchase Price for the Property (subject to applicable prorations and
adjustments as provided herein) to (i) Seller by wire transfer pursuant to
instructions to be delivered by Seller to Escrow Holder, (ii) for closing costs,
to the party entitled thereto, and (iii) any remainder to Buyer, all as set
forth in the Settlement Statement;

 

4.3.2. Cause the Deed (as such term is hereinafter defined) to be recorded with
the Register’s Office of Maury County, Tennessee; and

 

4.3.3. Deliver to the parties entitled thereto the other Closing Documents (as
hereinafter defined).

 

5. CLOSING.

 

5.1. Generally.  Escrow shall close at such time as the Escrow Holder is
otherwise prepared to record the Deed and all the conditions associated with the
recording of the Deed have been satisfied in accordance with the provisions of
this Agreement (“Date of Closing”, “Closing Date”, “Closing” or “Close of
Escrow”).  The Close of Escrow shall occur on a date selected by Buyer and
reasonably acceptable to Seller, but in no event later than May 30, 2014
(“Outside Closing Date”) at the office of Escrow Holder (or such other location
as may be mutually agreed upon by Seller and Buyer), unless otherwise extended
(i) by operation of Sections 5.2, 6.3, 12 or 21 below, or (ii) by written
agreement between Buyer and Seller.    The foregoing notwithstanding, the
parties shall not be required to physically attend Closing, it being understood
that the Close of Escrow can proceed on the basis of written instructions to the
Escrow Holder.

 

5.2. Extension Option.  Notwithstanding Section 5.1 above and subject to the
provisions of Section 5.3 below, Buyer shall have the option (“Extension
Option”) to extend the Outside Closing Date to June 30, 2014 (“Extended Outside
Closing Date”), in Buyer’s sole and absolute discretion, by providing written
notice to Seller of such election at least five (5) days prior to the Outside
Closing Date. If the Extension Option is exercised, on  or before the Outside
Closing Date, Buyer shall deposit with Escrow Holder an additional sum of ONE
HUNDRED THOUSAND and 00/100 DOLLARS ($100,000.00) (“Extension Deposit”) in
immediately available funds; it being understood and agreed that Buyer’s failure
to do so will result in an immediate termination of this Agreement on the
Outside Closing Date with no right of cure, in which event this Agreement shall
be null and void except for those provisions that expressly survive termination.

 

5.3. Existing Loan.  Buyer acknowledges that the Property is subject to an
existing loan (the “Existing Loan”) financed by the United States Department of
Housing and Urban Development (“HUD”) and serviced by Greystone Funding
Corporation (“Servicer”).  Seller’s ability to prepay the Existing Loan is
currently subject to the approval of HUD and certain conditions including the
obligation to provide not less than thirty (30) days prior written notice of
intent to prepay, and requiring that any prepayment be made only as of the last
day of a month. 

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Buyer agrees to provide Seller with Buyer’s selected Closing Date, pursuant to
Section 5.1 above, which date must be not less than forty  (40) days following
the date of such notice and sent to Seller and its counsel via email not later
than 3 p.m. Central time; provided, however that Buyer shall have the right to
revoke such notice at any time and for any reason prior to the expiration of the
Due Diligence Period.  Seller agrees to provide notice to HUD and Servicer of
its intent to prepay the loan as of the Closing Date on the same day that Seller
receives the notice in the prior sentence from Buyer.  If Buyer fails to close
on the Closing Date selected by Buyer hereunder and has not revoked its notice
as and when permitted above, Seller shall have all its rights and remedies under
Section 3.3 hereof.  Additionally, if the Closing Date selected by Buyer is not
the last day of a month, Buyer shall pay to Seller, in addition to the Purchase
Price, all interest accruing on the Existing Loan between the Closing Date and
the last day of the month within which Closing occurs, and, if and to the extent
specified in writing to Buyer by Seller on or before the date on which Buyer
gives to Seller its notice of the Closing Date under this Section 5.3, all
amounts required by HUD or Servicer to be paid to accommodate a Closing on such
Closing Date including.

 

Buyer acknowledges that its right to extend the Closing pursuant to the
Extension Option set forth in Section 5.2 hereof is subject to Seller’s ability
to extend the prepayment date for the Existing Loan to the Extended Outside
Closing Date.  Seller will use good faith commercially reasonable efforts to
obtain the approval of HUD and/or Servicer to prepay the loan on the Extended
Outside Closing Date, but shall have no liability in the event it is unable to
do so, in which event, Buyer’s Extension Option shall be inapplicable, and the
Closing shall be held on the Closing Date.

 

6. BUYER’S REVIEW.

 

6.1. Delivery of Documents.  Within three (3) Business Days after the Opening of
Escrow, Seller shall, at the sole expense of Seller, deliver to Buyer (in
electronic format to the extent feasible), or, with respect to the items that
are difficult or costly to copy (due to size or volume), make available to Buyer
at the Property, the due diligence materials regarding the Property listed on
Exhibit “C” attached hereto, and, promptly following written request therefore,
such other items as are reasonably requested from time to time by Buyer and are
customarily provided in similar transactions (collectively, the “Seller
Deliveries”) all to the extent such Seller Deliveries are in Seller’s or
Seller’s property manager’s possession or reasonable control.  Seller hereby
acknowledges and agrees that the following are in the possession of or
reasonable control of Seller or Seller’s property manager and will be provided
as required in the previous sentence:  monthly operating statements
(year-to-date and 3-year historical); year-end financial statements, audited if
available (past 3 years); general ledger (year-to-date and 3-year historical);
copies of all Leases (made available at the Property only); and copies of all
pleadings, notices, filings and similar non-privileged materials in connection
with the Litigation.    Notwithstanding the foregoing, copies of all existing
resident leases (the “Leases”) will not be delivered to Buyer, but may be
reviewed and copied by Buyer at the property management office located at the
Property.

 

6.2. Access.  Commencing upon the execution of this Agreement by Buyer and
Seller, Seller shall permit (or cause to be permitted) Buyer or Buyer’s agents,
employees, contractors, lenders and representatives upon no less than 48 hours’
notice access to the Property for purposes of any non-intrusive physical or
environmental test, study or inspection of the Property and, to the extent
copies are not provided to Buyer by Seller pursuant to Section 6.1,

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review and copying of Seller’s books and records relating to the Property and
any of the documents described in Section 6.1 above, and other matters necessary
in the discretion of Buyer to evaluate and analyze the feasibility of the
Property for Buyer’s intended use thereof (provided that the foregoing shall not
expand Seller’s obligations under Section 6.1 above or any other provision of
this Agreement).  Buyer shall not conduct or authorize any physically intrusive
testing of, on, or under the Property without first obtaining Seller’s consent
(which may be via electronic mail, but without requirement for concurrent
overnight delivery) as to the timing and scope of work to be performed, which
consent shall not be unreasonably withheld, conditioned or delayed.    Prior to
any entry Buyer shall notify (which may be via electronic mail, but without
requirement for concurrent overnight delivery) Seller at least 48 hours in
advance and Seller shall have the right to have a representative of Seller
present during any entry onto the Property by Buyer.  Buyer shall not contact
any tenant of the Property without the prior written approval of Seller.  In the
event that Seller does consent to Buyer’s contact with any tenant of the
Property, Seller shall have the right to have a representative of Seller present
during any such interview.  Prior to any entry onto the Property for purposes of
inspection or testing (as opposed to solely for review of materials), Buyer
shall provide Seller with evidence that Buyer maintains: (a) commercial general
liability insurance coverage of not less than One Million Dollars
($1,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) in the
aggregate, (b) commercial automobile insurance coverage of not less than One
Million Dollars ($1,000,000.00) per occurrence which shall cover liability
arising in connection with any automobile at the Property (including owned,
hired and non-owned automobiles), and (c) workers’ compensation insurance as
required by statute in the state where the Property is located and employer’s
liability insurance of not less than Five Hundred Thousand Dollars ($500,000.00)
per accident.  With respect to the coverages required by subsections (a) and (b)
immediately preceding, Seller and Commonwealth Development Group shall be named
as additional insureds.  Such insurance coverage shall (i) be issued by an
insurance company authorized to issue insurance in the state where the Real
Property is located having a rating of at least “AX” by A.M. Best Company, (ii)
be primary and any insurance maintained by Seller shall be excess and
noncontributory, and (iii) not contain any exclusions for work performed at or
on residential properties, or for “insured versus insured” claims as respects
any potential claim by Seller against Buyer.  The insurance certificate required
herein shall also provide that the coverage may not be cancelled, non-renewed or
reduced without at least thirty (30) days’ prior written notice to Seller except
in the event this Agreement is terminated.

 

6.3. Title and Survey.

 

6.3.1. Within one (1) Business Day after the Opening of Escrow, Seller shall
cause Escrow Holder to issue to Buyer a current commitment for an owner’s policy
of title insurance in the amount of the Purchase Price on an ALTA 2006 form
together with copies of all documents of record referenced therein
(collectively, the “Title Commitment”).  Buyer shall have twenty (20) days
following its receipt of the Title Commitment and any existing survey provided
to Buyer by Seller (“Title Objection Period”) in which to notify Seller in
writing of any objections Buyer has, in Buyer’s sole and absolute discretion, to
any matters shown on the Title Commitment (“Title Objection Notice”).  All
objections raised by Buyer in the manner herein provided are hereafter called
“Objections.”  Subject to the limitations set forth in the penultimate sentence
of this Section 6.3.1, Seller shall have ten (10) days after receipt of Buyer’s
Title Objection Notice in which to elect, by written notice to Buyer, to either
(i) cure Buyer’s objections,

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or (ii) not to cure Buyer’s Objections (“Seller’s Cure Period”).  Seller shall
have no obligation whatsoever to cure or attempt to cure any of Buyer’s
Objections except as provided in the penultimate sentence of this Section
6.3.1.  In the event Seller fails to provide such written notice of its election
to proceed under either clause (i) or (ii) above, Seller shall be deemed to have
elected clause (ii) above.  In the event Seller is unable to remedy or cause the
removal of any Objections (or agree irrevocably to do so at or prior to Closing)
within Seller’s Cure Period, then Buyer, within five (5) days after the
expiration of Seller’s Cure Period (“Buyer’s Termination Period”), shall deliver
to Seller written notice electing, in Buyer’s sole and absolute discretion, to
either (i) terminate this Agreement, at which time Escrow Holder shall return
the Deposit to Buyer and the parties shall have no further rights, liabilities,
or obligations under this Agreement (other than those that expressly survive
termination), or (ii) unconditionally waive any such Objections, failing which
Buyer shall conclusively be deemed to have elected (i) above.  If Seller does
not timely receive notice of Buyer’s election to terminate under this Section,
Buyer will be deemed to have waived the uncured Objections.  Any new title or
survey information received by Seller or Buyer after the expiration of the Title
Objection Period, Seller’s Cure Period or Buyer’s Termination Period, as
applicable, from a supplemental title commitment or update issued subsequent to
the date of the original Title Commitment which is not the result of the acts or
omissions of Buyer or its agents, contractors or invitees (each, a “New Title
Matter”) shall be subject to the same procedure provided in this Section 6.3
(and the Date of Closing shall be extended commensurately if the Closing would
have occurred but for those procedures being implemented for a New Title
Matter), except that Buyer’s Title Objection Period, Seller’s Cure Period and
Buyer’s Termination Period for any New Title Matters shall be five (5) Business
Days each.  If such additional time periods would otherwise extend pas the
Outside Closing Date, then the Outside Closing Date shall be delayed on a
day-for-day basis in order to provide such additional time periods. 
Notwithstanding anything to the contrary contained herein, Seller shall have no
obligation to cure title Objections except (i) financing liens of an
ascertainable amount created by, under or through Seller, which liens Seller
shall cause to be released at or prior to Closing (with Seller having the right
to apply the Purchase Price or a portion thereof for such purpose), and Seller
shall deliver the Property free and clear of any such financing liens, (ii) any
exceptions or encumbrances to title which are created by, under or through
Seller after the date of the Title Commitment without Buyer’s consent, and (iii)
any Objections which Seller has specifically agreed, in writing, to cure.  The
term “Permitted Exceptions” shall mean: the specific exceptions in the Title
Commitment approved by Buyer; other exceptions to which Buyer has not raised an
Objection as provided herein or has subsequently waived such Objection in
writing and that Seller is not required to remove as provided above; real estate
taxes not yet due and payable; and rights of tenants (as tenants only) under the
Leases, the standard printed exceptions, stipulations and exclusions from
coverage contained in the standard ALTA form of owner’s policy of title
insurance in use in Tennessee which cannot be removed by the performance of
Seller’s obligations under this Agreement and any laws, regulations or
ordinances (including, but not limited to, zoning, building and environmental
matters) as to the use, occupancy, subdivision or improvement of the Property
adopted or imposed by any governmental agency.

 

6.3.2. Within one (1) Business Day after the Opening of Escrow, Seller shall
provide Buyer with a copy of any existing survey of the Property in Seller’s
possession or control.  Buyer, at its sole cost and expense, may elect to obtain
a new survey or revise, modify, or re-certify an existing survey of the Property
(either, the "Survey") as necessary in order for the

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title department of Escrow Holder to delete the general survey exception from
title or to otherwise satisfy Buyer’s objectives.

 

6.4. Buyer’s Due Diligence.  Subject to Section 21 below, Buyer shall have
thirty (30) days from and after the Opening of Escrow (“Due Diligence Period”)
to evaluate and analyze the feasibility of the Property for Buyer’s intended use
thereof, including, without limitation, the zoning of the Property, the
physical, environmental and geotechnical condition of the Property and the
economic feasibility of owning and operating the Property.  If, during the Due
Diligence Period, Buyer determines in Buyer’s sole and absolute discretion that
the Property is not acceptable for any reason whatsoever, Buyer shall have the
right, by giving written notice to Seller on or before the last day of the Due
Diligence Period, to terminate this Agreement.  Buyer’s failure to terminate
this Agreement within the Due Diligence Period shall be conclusively deemed a
waiver by Buyer of the termination right contained in this Section 6.4.  Except
to the extent arising out of the negligence or willful misconduct of Seller or
Seller’s contractors, employees, representatives or agents, Buyer agrees to
indemnify and hold Seller harmless and defend Seller from and against any
claims, liabilities, liens, cause of action, expenses, costs, or damages
(including reasonable attorneys’ fees and personal injury claims but expressly
excluding punitive, special, consequential or incidental damages) resulting from
the inspection of the Property prior to the Closing Date by Buyer or Buyer’s
contractors, employees, representatives, or agents; provided, however, that
Buyer shall not be responsible for any losses or expenses resulting from the
discovery of adverse information regarding the Property.  In the event this
Agreement is terminated for any reason, Buyer shall promptly restore the
Property to the extent of any physical change or damage made as a result of the
conduct of any inspection or investigation of the Property by Buyer or Buyer’s
agents, representatives or contractors to substantially the same condition that
existed immediately prior to Buyer’s inspection and investigation, to the extent
permitted by applicable law.  Any provision to the contrary herein
notwithstanding, the provisions of the previous two sentences shall survive
termination of this Agreement for any reason for a period of (a) three (3)
months with respect to the repair obligation above, any other claim of Seller
unrelated to a claim of a third party unaffiliated with Seller, or any claim of
Seller relating to a claim made by a third party unaffiliated with Seller of
which Seller first becomes aware prior to the expiration of said three month
period, or (b) one (1) year with respect to any claim of Seller relating to a
claim made by a third party unaffiliated with Seller of which Seller first
becomes aware after the expiration of said three month period; provided however
that if Seller shall have provided written notice to Buyer with reasonable
detail of a specified claim that Buyer is responsible for hereunder within the
applicable period, then such period shall be extended until such claim is
resolved.

 

6.5. Buyer’s Termination Right.  If Buyer exercises the right to terminate this
Agreement in accordance with Sections 6.3 (including without limitation for any
New Title Matter) or 6.4 hereof, this Agreement shall terminate as of the date
the termination notice is given by Buyer at which time this Agreement shall be
null and void and neither party shall have any further rights of obligations
under this Agreement (except as to such matters that are expressly specified to
survive the termination of this Agreement), and Escrow Holder shall return the
Deposit to Buyer  If Buyer does not exercise the right to terminate this
Agreement in accordance with Sections 6.3 or Section 6.4 hereof, Buyer shall
deposit with Escrow Holder the Additional Deposit pursuant to Section 3.1 and
this Agreement shall continue in full force and effect and the Deposit shall
become non-refundable except as provided in Section 3.1 above.

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6.6. Contracts.  On or before the expiration of the Due Diligence Period, Buyer
shall notify Seller in writing as to which of the Contracts Buyer elects to
assume at Closing, in Buyer’s sole and absolute discretion.  Seller shall notify
the vendors under those Contract(s) which Buyer has not agreed to assume and,
provided that Closing occurs hereunder, such Contracts shall terminate effective
as of the Date of Closing. Seller shall cooperate with Buyer, both before and
after the Close of Escrow, to obtain any approvals or consents required to
assign any Contracts to Buyer, including, without limitation, sending requests
for such approvals or consents to the party or parties whose consent or approval
is required.  If Seller fails to timely send any such request for approval or
consent, Buyer may do so in Seller’s name.  Seller’s obligations under this
Section 6.6 shall survive the Close of Escrow.  Notwithstanding anything
contained herein, Buyer shall be obligated to assume any Contracts that cannot
be terminated without the payment of a contractually required prepayment or
terminate fee unless Buyer pays such fee at Closing.

 

7. REPRESENTATIONS AND WARRANTIES.

 

7.1. Seller’s Representations and Warranties.  The representations, warranties
and covenants of Seller in this Section 7.1 are a material inducement for Buyer
to enter into this Agreement.  Buyer would not purchase the Property without
such representations, warranties and covenants of Seller.  Such representations,
warranties and covenants shall survive the Closing for nine (9) months.  Seller
represents, warrants and covenants to Buyer as of the date of this Agreement and
as of the Closing Date as follows:

 

7.1.1. Seller is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Tennessee and duly qualified to
transact business and in good standing in the State in which the Real Property
is located.  Seller has full power and authority to enter into this Agreement
and to perform this Agreement.  The execution, delivery and performance of this
Agreement by Seller have been duly and validly authorized by all necessary
action on the part of Seller and all required consents and approvals have been
duly obtained.  This Agreement is a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.  There is no
agreement to which Seller is a party or, to Seller’s knowledge, that is binding
on Seller which is in conflict with this Agreement.

 

7.1.2. All of the Personal Property is described in Exhibit “B” attached hereto,
which is a materially accurate and materially complete list of all tangible
personal property owned by Seller relating to the ownership, management,
operation, maintenance or repair of the Real Property.  All of the Personal
Property is located at the Real Property.

 

7.1.3. All of the Leases are described in Schedule 1 attached hereto, and there
are no persons leasing, using or occupying the Real Property or any part thereof
except the tenants under the Leases.  All of the Contracts are described in
Schedule 2 attached hereto, which is an accurate and complete list of all
presently effective contracts, agreements, warranties and guaranties relating to
the leasing, advertising, promotion, design, construction, ownership,
management, operation, maintenance or repair of the Real Property.  To Seller’s
knowledge, Seller has (and can convey at Closing) good title to the Leases and
the Contracts, free

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and clear of all matters of public record or other items contained in the Seller
Deliveries,  and other than the Permitted Exceptions.

 

7.1.4. The Rent Roll is accurate and complete in all material respects.  Except
as set forth on the Rent Roll, to the knowledge of Seller, the Leases are in
full force and effect, have not been amended or modified.  To the knowledge of
Seller, Seller has received no written notice from any tenant under the Leases
claiming any breach or default by Seller under any of the Leases that is not
included in the Seller Deliveries.  Notwithstanding anything in this Agreement
to the contrary, Seller does not covenant or represent that tenants under the
Leases will not be in default under their respective Leases, and the existence
of any default by any tenant under its Lease shall not affect the obligations of
Buyer hereunder.

 

7.1.5. Seller has received no written notice from any third party of any
currently existing latent or other material defect in the improvements to the
Real Property or any material component thereof (including the roof and
foundation), or the mechanical, electrical, plumbing and life safety systems,
that has not been included in the Seller Deliveries.

 

7.1.6. Seller has received no written notice from any third party that the
Property or the use and occupancy thereof are not currently in material
compliance with all applicable laws, statutes, rules, regulations and
ordinances, and all material covenants, conditions and restrictions applicable
to the Real Property.  Seller has received no written notice, citation or other
claim alleging any violation of any such law, statute, rule, regulation,
ordinance, covenant, condition or restriction that has not been
cured/corrected that has not been included in the Seller Deliveries.

 

7.1.7. To Seller’s knowledge and except as set forth in the Seller’s Deliveries,
there are no Hazardous Substances (as defined below) present in, on or under the
Real Property, and to Seller’s knowledge and except as set forth in the Seller’s
Deliveries, there is no present Release or threatened Release of any Hazardous
Substances in, on or under the Real Property in violation of Environmental Laws
(as defined below).  Seller has never used the Real Property or any part
thereof, and to Seller’s knowledge has never permitted any person to use the
Real Property or any part thereof, for the production, processing, manufacture,
generation, treatment, handling, storage or disposal of Hazardous Substances in
violation of applicable Environmental Laws.  To Seller’s knowledge and except as
set forth in the Seller’s Deliveries, no underground storage tanks of any kind
are located in the Real Property.  Seller shall not be deemed to have breached
the foregoing representations and warranties with respect to the safe and lawful
use and storage by Seller, any tenant or any other person of quantities of (i)
pre-packaged supplies, cleaning materials and petroleum products customarily
used in the operation and maintenance of comparable multifamily properties, (ii)
cleaning materials, personal grooming items and other items sold in pre-packaged
containers for consumer use and used by tenants and occupants of residential
dwelling units in the Property, and (iii) petroleum products used in the
operation and maintenance of motor vehicles from time to time located on the
Property’s parking areas, so long as all of the foregoing are used, stored,
handled, transported and disposed of in compliance with Environmental Laws
(collectively, "Lawful Substances"). As used in this Agreement, the following
definitions shall apply:  “Environmental Laws” shall mean all federal, state and
local laws, ordinances, rules and regulations now or hereafter in force, as
amended from time to time,

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in any way relating to or regulating human health or safety, or industrial
hygiene or environmental conditions, or protection of the environment, or
pollution or contamination of the air, soil, surface water or groundwater, and
includes the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. § 9601, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. § 6901, et seq., the Clean Water Act, 33 U.S.C. § 1251, et seq.,
and the Hazardous Substance Account Act.  “Hazardous Substances” shall mean any
substance or material that is described as a toxic or hazardous substance waste
or material or a pollutant or contaminant, or words of similar import, in any of
the Environmental Laws, and includes, without limitation, asbestos, petroleum
(including crude oil or any fraction thereof, natural gas, natural gas liquids,
liquefied natural gas, or synthetic gas usable for fuel, or any mixture
thereof), petroleum products, polychlorinated biphenyls, urea formaldehyde,
radon gas, radioactive matter, medical waste, and chemicals which may cause
cancer or reproductive toxicity.  “Release” shall mean any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the environment, including continuing
migration, of Hazardous Substances into or through soil, surface water or
groundwater.

 

7.1.8. Except for the matters (collectively, the “Litigation”) described on
Schedule 7.1.8 (the “Litigation Schedule”), there is no litigation, arbitration
or other legal or administrative suit, action, proceeding or investigation of
any kind pending (including, without limitation, involving the federal
Department of Housing and Urban Development or the Americans with Disabilities
Act of 1990, as amended, or any other law, rule or regulation governing access
by disabled persons) or, to Seller’s knowledge, threatened against Seller or
relating to the Property or any part thereof.  Neither Seller nor any affiliate
thereof or property manager on Seller’s behalf has commenced any legal or
administrative action or proceeding pending to contest or appeal the amount of
real property taxes or assessments levied against the Real Property or any part
thereof or the assessed value of the Real Property or any part thereof for real
property tax purposes, and to Seller’s knowledge no other party has commenced or
threatened in writing to commence such an action.

 

7.1.9. Seller is solvent, has not made a general assignment for the benefit of
its creditors, and has not admitted in writing its inability to pay its debts as
they become due, nor has Seller filed, nor does it contemplate the filing of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or any other proceeding for the relief of debts in general, nor has
any such proceeding been instituted by or against Seller.

 

7.1.10. Seller is not a “foreign person” as defined in Section 1445 of the
Internal Revenue Code of 1986, as amended, and the Income Tax Regulations
thereunder.

 

7.1.11. Except for Miller Harris of William Kirkland Company and Fernwood Real
Estate (collectively, the “Broker”), Seller has not dealt with any investment
adviser, real estate broker or finder, or incurred any liability for any
commission or fee to any investment adviser, real estate broker or finder, in
connection with the sale of the Property to Buyer or this Agreement.

 

7.1.12. Seller is not any of the following:  (i) a person or entity that is
listed in the annex to, or is otherwise subject to the provisions of, Executive
Order No. 13224

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on Terrorist Financing (effective September 24, 2001) (herein called the
“Executive Order”); (ii) a person or entity owned or controlled by, or acting
for or on behalf of any person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, the Executive Order; (iii) a person or
entity that is named as a “specifically designated national” or “blocked person”
on the most current list published by the U.S. Treasury Department’s Office of
Foreign Assets Control (herein called “OFAC”) at its official website,
http://www.treas.gov/offices/enforcement/ofac; (iv) a person or entity that is
otherwise the target of any economic sanctions program currently administered by
OFAC; or  (v) a person or entity that is affiliated with any person or entity
identified in the foregoing clauses (i), (ii), (iii), or (iv).

 

7.1.13. Neither Seller nor, to Seller’s knowledge, any previous owner of the
Property has sold, transferred, conveyed, or entered into any agreement
regarding water or water rights relating to the Property, except as otherwise
expressly set forth in the Title Commitment.

 

7.1.14. To Seller’s knowledge, the Seller Deliveries delivered to Buyer are
complete copies of the documents in Seller’s or it property manager’s possession
or reasonable control, and are the documents used and relied upon by Seller in
its ownership and operation of the Property.

 

All references in this Section 7.1 or elsewhere in this Agreement and/or in any
other document or instrument executed by Seller in connection with or pursuant
to this Agreement, to “Seller’s knowledge” or “to the knowledge of Seller” and
words of similar import shall refer solely to facts within the actual knowledge
(without independent investigation or inquiry) of Larry Atema,  the Assistant
Secretary of the General Partner of Seller and Kathy Coggin, the Executive Vice
President of Seller’s property manager, and shall not be construed to refer to
the knowledge of any other employee, officer, director, member, shareholder or
agent of Seller, Seller’s property manager or any affiliate of Seller, and shall
in no event be deemed to include imputed or constructive knowledge.  Seller
hereby affirms that Larry Atema and Kathy Coggin are reasonably familiar with
and have substantial knowledge of the facts regarding the Property, its
condition, and its historical performance during the period of the Seller’s
ownership thereof.  Nothing in this Section 7.1 or the remainder of this
Agreement shall give rise to any personal liability to the foregoing named
individuals.

 

7.2. Buyer’s Representations and Warranties.  Buyer represents and warrants to
Seller as follows (which representations, warranties and covenants shall survive
the Closing for one (1) year):

 

7.2.1. Buyer is a corporation, duly organized, validly existing, and in good
standing under the laws of the State of California.

 

7.2.2. Buyer has all requisite power and authority to execute and deliver this
Agreement and to carry out its obligations hereunder and the transactions
contemplated hereby.  This Agreement has been, and the documents contemplated
hereby will be, duly executed and delivered by Buyer and constitute its legal,
valid, and binding obligation enforceable against it in accordance with its
terms.

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7.2.3. Buyer is not any of the following:  (i) a person or entity that is listed
in the annex to, or is otherwise subject to the provisions of the Executive
Order; (ii) a person or entity owned or controlled by, or acting for or on
behalf of any person or entity that is listed in the Annex to, or is otherwise
subject to the provisions of, the Executive Order; (iii) a person or entity that
is named as a “specifically designated national” or “blocked person” on the most
current list published by OFAC at its official website,
http://www.treas.gov/offices/enforcement/ofac; (iv) a person or entity that is
otherwise the target of any economic sanctions program currently administered by
OFAC; or  (v) a person or entity that is affiliated with any person or entity
identified in the foregoing clauses (i), (ii), (iii), or (iv).

 

7.2.4. Except for Broker, Buyer has not dealt with any investment adviser, real
estate broker or finder, or incurred any liability for any commission or fee to
any investment adviser, real estate broker or finder, in connection with the
purchase of the Property or this Agreement.

 

7.3. RELEASE.  BUYER REPRESENTS TO SELLER THAT, EXCEPT FOR THE EXPRESS
REPRESENTATIONS, WARRANTIES AND COVENANTS CONTAINED HEREIN AND IN ANY DOCUMENTS
DELIVERED BY SELLER TO BUYER AT CLOSING, BUYER WILL RELY SOLELY UPON ITS OWN
INVESTIGATIONS OF THE PROPERTY (AS BUYER DEEMS NECESSARY) AND NOT UPON ANY
INFORMATION PROVIDED BY OR ON BEHALF OF SELLER, SELLER’S AGENTS, EMPLOYEES OR
THIRD PARTIES REPRESENTING OR PURPORTING TO REPRESENT SELLER, WITH RESPECT
THERETO.  UPON CLOSING, SUBJECT TO THE EXPRESS OBLIGATIONS OF SELLER UNDER THIS
AGREEMENT (INCLUDING INDEMNIFICATION OBLIGATIONS EXPRESSLY PROVIDED HEREUNDER)
AND THE DOCUMENTS SELLER DELIVERS TO BUYER AT CLOSING, BUYER SHALL BE DEEMED TO
WAIVE, RELINQUISH, RELEASE AND FOREVER DISCHARGE SELLER AND SELLER’S AFFILIATES
FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) OF ANY AND EVERY
KIND OR CHARACTER, KNOWN OR UNKNOWN, BY REASON OF OR ARISING OUT OF THE
PROPERTY, INCLUDING, WITHOUT LIMITATION, BY REASON OF OR ARISING OUT OF ANY
LATENT OR PATENT CONSTRUCTION DEFECT OR OTHER PHYSICAL CONDITION (INCLUDING,
WITHOUT LIMITATION, FUNGI, MOLD OR MILDEW) WHETHER PURSUANT TO STATUTES IN
EFFECT IN THE STATE OF TENNESSEE OR ANY OTHER FEDERAL, STATE, OR LOCAL
ENVIRONMENTAL OR HEALTH AND SAFETY LAW OR REGULATION, THE EXISTENCE OF ANY
HAZARDOUS MATERIAL WHATSOEVER, ON, AT, TO, IN, ABOVE, ABOUT, UNDER, FROM OR IN
THE VICINITY OF THE PROPERTY AND ANY AND ALL OTHER MATTERS REGARDING THE
PROPERTY.  THIS RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY UNAWARE AND
OF WHICH BUYER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER,
WOULD MATERIALLY AFFECT BUYER’S RELEASE OF SELLER.

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IN THIS REGARD AND TO THE EXTENT PERMITTED BY LAW, BUYER HEREBY AGREES,
REPRESENTS AND WARRANTS THAT BUYER REALIZES AND ACKNOWLEDGES THAT FACTUAL
MATTERS NOW UNKNOWN TO BUYER MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CAUSES
OF ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND
EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND BUYER
FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND RELEASES CONTAINED
HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON BY BUYER IN LIGHT OF THAT
REALIZATION AND THAT BUYER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND
ACQUIT SELLER AND SELLER’S AFFILIATES FROM ANY SUCH UNKNOWN CAUSES OF ACTION,
CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND EXPENSES
SUBJECT TO THE LIMITATIONS AND CONDITIONS IN, AND IN ACCORDANCE WITH, THE TERMS
OF THE PRIOR PARAGRAPH. 

BUYER’S RELEASE OF SELLER AS SET FORTH IN THIS SECTION 7.3 SHALL NOT PERTAIN TO
ANY CLAIM OR CAUSE OF ACTION BY BUYER AGAINST SELLER FOR (I) A BREACH BY SELLER
OF A REPRESENTATION OR WARRANTY EXPRESSLY SET FORTH IN SECTION 7 OF THIS
AGREEMENT OR IN ANY DOCUMENT DELIVERED BY SELLER TO BUYER AT CLOSING OR (II) ANY
EXPRESS INDEMNIFICATION OBLIGATION OF SELLER HEREUNDER THAT EXPRESSLY SURVIVES
CLOSING.

8. COVENANTS.

 

8.1. Seller.  Seller covenants and agrees with Buyer as follows:

 

8.1.1. Between the date of this Agreement and the Closing Date, unless
terminated earlier by either Seller or Buyer pursuant to the terms of this
Agreement, notwithstanding the provisions of Section 8.1.2 below, Seller shall
not enter into any new  Lease for a term of less than 6 months or more than 1
year, and Seller shall not enter into Contracts for goods or services without
the approval of Buyer if such Contracts are terminable upon more than thirty
(30) days’ notice or with payment of a penalty or fee.

 

8.1.2. Between the date of this Agreement and the Closing Date, Seller shall (a)
lease, manage, operate, maintain and repair the Real Property and the Personal
Property in its ordinary course of business in accordance with Seller’s current
leasing, management, operating, maintenance and repair practices in effect as of
the date hereof (provided, that such obligation shall not include incurring any
capital expenditures except to the extent that the Property is unable to operate
without such expenditure; it being expressly understood and agreed however that
making units “rent ready”, including without limitation, replacing carpet and/or
appliances, shall not be deemed a capital expenditure hereunder and Seller shall
continue to make units “rent ready” in its ordinary course of business), and (b)
promptly give Buyer copies of all written notices received by Seller asserting
any breach or default under, and perform when due all of Seller’s material
obligations under, the Leases or the Contracts or any violation of the
Approvals, Permitted Exceptions or any covenants, conditions, restrictions,
laws, statutes, rules,

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regulations or ordinances applicable to the Real Property or the Personal
Property.  Seller shall not (i) create or agree to any easements, liens,
mortgages, encumbrances or other interests that would affect the Property or
Seller’s ability to comply with this Agreement; (ii) initiate or consent to,
approve or otherwise take any action with respect to zoning or any other
governmental rules or regulations presently applicable to all or any part of the
Real Property; or (iii) fail to pay when due and payable all taxes and other
public charges assessed against the Real Property or Seller.  Between the date
of this Agreement and the Closing Date, Seller shall keep in force its current
property insurance covering the Real Property.

 

8.1.3. Between the date of this Agreement and the Closing Date, promptly after
Seller obtains any written information indicating that any Hazardous Substances
may be present or any Release or threatened Release of Hazardous Substances may
have occurred in, on or under the Real Property (or any nearby real property
which could migrate to the Real Property) or that any violation of any
Environmental Laws may have occurred at the Real Property, Seller shall give
written notice thereof to Buyer with a reasonably detailed description of the
event, occurrence or condition in question.  Between the date of this Agreement
and the Closing Date, Seller shall promptly furnish to Buyer copies of all
written communications received by Seller from any person (including notices,
complaints, claims or citations that any Release or threatened Release of any
Hazardous Substances or any violation of any Environmental Laws has actually or
allegedly occurred) or given by Seller to any person concerning any past or
present Release or threatened Release of any Hazardous Substances in, on or
under the Real Property (or any nearby real property which could migrate to the
Real Property) or any past or present violation of any Environmental Laws at the
Real Property.  Seller shall not be deemed to have breached the foregoing
covenants with respect to Lawful Substances.

 

8.1.4. Intentionally omitted.

 

8.1.5. Between the date of this Agreement and the Closing Date, Seller shall
promptly (i) notify Buyer in writing of any litigation, arbitration,
condemnation or administrative hearing before any court or governmental agency
concerning Seller or the Property that is instituted after the date hereof,
other than eviction or unlawful detainer actions that will be completed prior to
Closing, (ii) provide to Buyer copies of any Leases or Contracts entered into
after the date hereof and any documents or materials received by Seller from and
after the date hereof that would have been included in Seller Deliveries if
received by Seller prior to such date, (iii) within two (2) Business Days after
Seller’s receipt of request therefor, provide to Buyer an updated Rent Roll with
all information concerning the Leases updated through the date that is one (1)
Business Day before the date that the updated Rent Roll is delivered to Buyer,
and (iv) deliver to Buyer copies of all pleadings, notices, filings and similar
non-privileged materials given or received after the date hereof in connection
with the Litigation and respond to such questions and requests as Buyer may
reasonably make In connection therewith.

 

8.1.6. Between the date of this Agreement and the Closing Date, Seller shall not
in any manner sell, convey, assign, transfer, encumber or otherwise dispose of
the Property or any part thereof or interest therein except for normal course of
business replacements of Personal Property.

 

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8.1.7. Intentionally omitted.

 

8.1.8. Seller shall pay all commissions, fees and expenses due to Broker in
respect of the sale of the Property to Buyer or this Agreement.  Seller hereby
agrees to indemnify and hold Buyer harmless from and against any and all claims
for brokerage or finder’s fees or other similar commissions or compensation made
by any and all other brokers or finders claiming to have dealt with Seller in
connection with this Agreement or the consummation of the transaction
contemplated hereby.  The terms of this Section 8.1.8 shall survive Closing.

 

8.1.9. Seller shall not dissolve its existing entity and shall remain validly
existing and in good standing under the laws of the State of its formation
during the period commencing on the date of this Agreement through December 31,
2014; provided, however, that if Buyer gives Seller written notice of a claim
under this Agreement on or before the expiration of such period, such covenant
shall extend until the date such claim has been satisfactorily resolved in
Buyer’s reasonable discretion.

 

Seller hereby acknowledges that Buyer shall have the right to pursue any claim
against Seller with respect to, and Seller shall remain liable to Buyer for, any
of the following that is first discovered by Buyer on or after Closing: (i)
breach by Seller of any representation or warranty in in this Agreement any
material respect or (ii) breach by Seller of any covenant or other obligation
under this Agreement in any material respect.  Any such claim made by Buyer must
be made within nine (9) months after the Closing or termination or shall
automatically be null, void and of no force or effect whatsoever.  The
provisions of this paragraph shall survive Closing.

8.2. Buyer.  Buyer covenants and agrees with Seller as follows:

 

8.2.1. Intentionally omitted.

 

8.2.2. Intentionally omitted.

 

8.2.3. Buyer hereby agrees to indemnify and hold Seller harmless from and
against any and all claims for brokerage or finder’s fees or other similar
commissions or compensation made by any and all other brokers or finders
claiming to have dealt with Buyer in connection with this Agreement or the
consummation of the transaction contemplated hereby, other than Broker.   The
terms of this Section 8.2.3 shall survive Closing.

 

9. ADJUSTMENTS AND PRORATIONS.

 

9.1. Generally.  All taxes (including, without limitation, real estate taxes and
personal property taxes), collected rents, laundry income, fees, rents and other
income paid under any cable contracts Buyer elects to assume pursuant to Section
6.6 above (including, without limitation, any amounts paid on or about execution
of the applicable contract for rights and privileges provided over the term of
the applicable contract), parking income, furniture rental, charges for
utilities (including water, sewer, gas, and fuel oil) and for utility services,
maintenance services, maintenance and service contracts, all operating costs and
expenses, and all other income, costs, and charges of every kind which in any
manner relate to the operation of the Property (but not including insurance
premiums) shall be prorated as of 11:59 p.m. the day immediately

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preceding the Date of Closing (the “Proration Date”).  If the amount of any such
items is not known on the Proration Date, they shall be apportioned on the basis
of the amounts for the preceding year, with a reapportionment as soon as the new
amounts can be ascertained.   Any deposits on utilities paid by Seller shall be
returned to Seller.  On the Date of Closing, Seller shall deliver to Buyer all
inventories of supplies on hand at the Property owned by Seller, if any, at no
additional cost to Buyer.

 

9.2. Rental Income.  Rental income from the Property (including, without
limitation, laundry income, late fees and charges, and all other payments
received from tenants under or in connection with the Leases) shall be prorated
as of the Proration Date.  Non-delinquent rents shall be prorated as of the
Proration Date.  Rents delinquent as of the Proration Date (i.e., rents that are
due and owing after the expiration of any applicable grace period or, if no
grace period is provided, after the date such rents are due), but collected
later, shall be prorated as of the Proration Date when collected. Rents
collected after the Proration Date from tenants whose rental was delinquent at
the Proration Date shall be deemed to apply first to the current rental due at
the time of payment and second to rentals which were delinquent as of the
Proration Date.  Rents collected after the Proration Date to which Seller is
entitled shall be promptly paid to Seller.  For a period of sixty (60) days
after the Closing Date, Buyer shall use reasonable efforts to collect all rents
which are delinquent as of the Proration Date with no obligation to incur any
expenses or commence litigation to collect such rents.  Commencing as of sixty
one (61) days after the Closing Date, Seller may use reasonable efforts,
including litigation, to collect any rents delinquent as of the Proration Date
which are still uncollected; provided, however, in exercising its remedies
against tenants as outlined in this Section, Seller shall not evict any tenant
of the Property or otherwise unreasonably interfere with Buyer’s operation of
the Property.  With respect to unapplied security deposits, if any, made by
tenants at the Property, Buyer shall receive credit therefor at Closing.  Any
leasing commissions with respect to the Leases shall be the sole responsibility
of Seller, and shall be paid or discharged fully at or prior to Closing.

 

9.3. RUBS.  Within ninety (90) days after the Closing Date, all reimbursable
utility bills for utility charges incurred by Seller and reimbursable to Seller
from the tenants under the Leases for periods prior to Closing (“RUBS”), if
received by Buyer, shall be remitted by Buyer to Seller.  Thereafter, Buyer
shall have no obligation to remit RUBS income to Seller.

 

9.4. Proration Period.  If any of the items subject to proration hereunder
cannot be prorated as of the Proration Date because the information necessary to
compute such proration is unavailable, or if any errors or omissions in
computing prorations as of the Proration Date are discovered subsequent to the
Close of Escrow, then such item shall be reapportioned and such errors and
omissions corrected as soon as practicable after the Close of Escrow and the
proper party reimbursed within thirty (30) days after such party’s receipt of
written demand therefor. This covenant shall survive the Closing of the sale
contemplated hereby for a period of one (1) year with respect to tax prorations
and ninety (90) days with respect to all other prorations, and shall then
terminate.

 

9.5. Rent Ready Adjustments.  Not more than forty-eight (48) hours prior to
Close of Escrow (“Walk Though Date”), a representative of Buyer and a
representative of Seller shall conduct an onsite walk-through of the then
unoccupied rental units on the Property to

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determine whether such unoccupied rental units are in “rent ready” condition. 
With respect to any rental unit that is vacated either (a) on or before five (5)
days prior to Close of Escrow that Seller has not placed in a “rent ready”
condition before the Walk Through Date or (b) on or after the Walk Through Date,
Buyer shall receive a credit against the Purchase Price at Closing in the amount
of $750.00 per unit.  As used herein, “‘rent ready’ condition” means Seller’s
practice and procedures, as of the date of this Agreement, for placing units in
“rent ready” condition.  Nothing contained in this Section 9.5 shall be
construed as limiting Buyer’s rights and Seller’s obligations under the other
provisions of this Agreement.

 

10. CLOSING DOCUMENTS.

 

10.1. Seller’s Deliveries.  Conditioned upon performance by Buyer hereunder,
Seller shall execute and deliver to Escrow Holder prior to Closing the
following:

 

10.1.1. Deed.  A special warranty deed with respect to the Real Property, in the
form of attached Exhibit “D” (the “Deed”), subject only to the Permitted
Exceptions;

 

10.1.2. Assignment and Assumption of Leases, Contracts and Approvals.  An
assignment of all of Seller’s right, title and interest in and to the Leases,
Contracts and Approvals in the form of attached Exhibit “E” (“General
Assignment”);

 

10.1.3. Bill of Sale.  A bill of sale in the form of attached Exhibit “F”,
assigning and transferring to Buyer all of the right, title, and interest of
Seller in and to the Personal Property and the Intangible Property;

 

10.1.4. Non-Foreign Certificate.  A certification that Seller is not a
non-resident alien (a foreign corporation, partnership, trust, or estate as
defined in the Internal Revenue Code and Treasury Regulations promulgated
thereunder), in the form of attached Exhibit “G”; and

 

10.1.5. Tenant Notices.  Notices to the tenants under all Leases of the
occurrence of the sale of the Property in the form of attached Exhibit “H”,  as
may be modified at the reasonable request of Buyer to conform to the
requirements of applicable law.

 

10.1.6. Affidavit(s).  An affidavit(s) as to construction, debts, liens and
parties in possession in the form customarily used by Escrow Holder, certified
to Buyer and Escrow Holder, identifying no construction, debts, liens or parties
in possession (other than residential tenants disclosed to Buyer) that may
affect the Property after the Closing Date.

 

10.1.7. Gap Indemnity.  A gap indemnity in the form customarily used by and
approved by Escrow Holder.

 

10.1.8. Rent Roll.  An updated Rent Roll, in the same form and with the same
categories of information as on the initial Rent Roll, with all information
concerning the Leases updated through the Proration Date.

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10.2. Buyer’s Deliveries.  Conditioned upon performance by Seller hereunder,
Buyer shall deliver the Purchase Price and execute and deliver to Escrow Holder
prior to Closing the General Assignment and the Deed.

 

10.3. Other Closing Documents.  Each party shall deliver to the other party or
Escrow Holder such duly executed and acknowledged or verified certificates,
affidavits, and other usual and customary closing documents respecting the power
and authority to perform the obligations hereunder and as to the due
authorization thereof by the appropriate corporate, partnership, or other
representatives acting for it, as counsel for the other party or Escrow Holder
may reasonably request, and such conveyancing or transfer tax forms or returns,
if any, as are required to be delivered by Seller or Buyer under applicable
state or local law in connection with the conveyance of the Real Property.  Each
party shall deliver any additional documents that the other party or Escrow
Holder may reasonably require for the proper consummation of the transaction
contemplated by this Agreement; provided, however, that no such additional
document shall expand any obligation, covenant, representation or warranty of
such party or result in any new or additional obligation, covenant,
representation or warranty of such party under this Agreement beyond those
expressly set forth in this Agreement.

 

10.4. Closing Documents.  All documents to be delivered to Escrow Holder
pursuant to this Section 10 shall hereinafter be referred to as “Closing
Documents”.

 

10.5. Possession.  Upon Closing, Seller shall deliver to Buyer sole possession
of the Property, subject to the rights of tenants in possession (as residential
tenants only) under the Leases and subject to the Permitted Encumbrances.

 

11. COSTS.

 

Seller shall pay the cost of preparation of Seller’s Closing Documents and
the costs of any endorsements to the Title Policy (as hereinafter defined) to
the extent that such endorsements are necessary to cure any Objections that
Seller has elected or is required to cure.  Buyer shall pay the cost of any
endorsements to the Title Policy except as provided in the previous sentence
(and loan policy, if applicable), the cost of preparation of Buyer’s Closing
Documents, the cost of any updated survey, if desired, and any costs relating to
any financing obtained by Buyer.  Seller and Buyer shall each pay one-half (1/2)
of (i) the cost of the Title Commitment and any updates thereto, (ii) all real
estate transfer taxes and documentary stamps, (iii) the cost of a standard ALTA
Owner’s Policy of Title Insurance (the “Title Policy”), (iv) Escrow Holder’s
escrow fee (excluding charges assessed by Escrow Holder for special services,
which shall be paid by the party requesting or using such special services), (v)
recording fees for the Deed, and (vi) other closing costs.  Each party shall pay
its own attorney’s fees.

 

12. CASUALTY OR CONDEMNATION.

 

If, before the Closing Date, (i) the improvements on the Real Property are
materially damaged by any casualty, as reasonably determined by Buyer, or (ii)
proceedings are commenced for the taking by exercise of the power of eminent
domain of all or a material part of

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the Property, Seller shall promptly notify Buyer.  If the Property or any part
thereof shall be (a) condemned such that either (1) damages are in excess of One
Hundred Fifty Thousand and No/100 Dollars ($150,000.00) (as determined by an
independent MAI certified appraiser selected by Seller) or (2) such condemnation
affects access to, or parking at, the Property, results in the Property being
“non-conforming” for zoning purposes, or otherwise has a materially adverse
effect on the use Property, or, (2) destroyed or damaged by fire or other
casualty the repair of which would cost in excess of One Hundred Fifty Thousand
and No/100 Dollars ($150,000.00) (as determined by the independent insurance
adjuster designated by Seller’s insurance company), Buyer shall have the right,
by giving notice to Seller within fifteen (15) days after Seller gives written
notice of the casualty or condemnation to Buyer, to terminate this Agreement, in
which event this Agreement shall automatically terminate and the Deposit shall
be returned to Buyer.  If, before the Closing Date, (a) the improvements on the
Real Property are damaged by any casualty, but damages are less than One Hundred
Fifty Thousand and No/100 Dollars ($150,000.00), (b) proceedings are commenced
for the taking by exercise of the power of eminent domain and such damages are
less than One Hundred Fifty Thousand and No/100 Dollars ($150,000.00) and do not
have the effects described in subsection (a)(ii) of the preceding sentence, or
(c) Buyer has the right to terminate this Agreement pursuant to the preceding
sentence but Buyer does not exercise such right, then this Agreement shall
remain in full force and effect and, on the Closing Date, one of the following
shall occur, as applicable: (1) in the event of a casualty, Buyer shall receive
(w) a credit against the cash balance of the Purchase Price payable at Closing
to the extent of payments received by or on behalf of Seller prior to the
Closing Date under any applicable insurance policy or policies in effect with
respect to the Property (to the extent that such payments have not been
reasonably expended in connection with the repair of any such casualty and do
not exceed $25,000 in the aggregate unless otherwise agreed by Buyer), (x) an
assignment of Seller's rights to any payments which may be payable subsequent to
the Closing Date under any applicable insurance policy or policies in effect
with respect to the Property (or, if Seller’s insurer does not permit such
policy and/or payments to be assigned to Buyer, a credit for such amounts), (y)
an assignment of Seller's rights to payments with respect to rents due
subsequent to the Closing Date under any rental insurance policy or policies
with respect to the Property (or, if Seller’s insurer does not permit such
policy and/or payments to be assigned to Buyer, a credit for such amounts), and
(z) a credit against the cash balance of the Purchase Price payable at the
Closing in an amount equal to the aggregate amount of the deductibles with
respect to all such insurance policies, but there shall be no other credit
against or reduction in the Purchase Price attributable to such casualty; or (2)
the condemnation award (or, if not theretofore received, the right to receive
such award) payable on account of the taking shall be transferred to
Buyer.  Seller shall give notice to Buyer immediately after the occurrence of
any damage to the improvements on the Real Property by any casualty or the
commencement of any eminent domain proceedings.  Buyer shall have a period of
fifteen (15) days after Seller has given the notice to Buyer required by this
Section 12 to make the determination as to whether to terminate this
Agreement.  If necessary, the Closing Date shall be postponed until Seller has
given the notice to Buyer required by this Section 12 and the period of fifteen
(15) days described in this Section 12 has expired.

 

13. ATTORNEYS’ FEES.

 

In any action to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to an award of its reasonable attorneys’ fees
and costs.

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14. ASSIGNMENT.

 

Buyer may not assign Buyer's rights and obligations under this Agreement (which
shall include its rights in and to the Deposit) to a third party (“Assignee”)
without Seller’s prior written consent.  Notwithstanding the foregoing to the
contrary, Buyer shall have the one-time right to transfer all of its rights
under this Agreement to an Assignee without Seller’s prior consent (but with
notice to Seller of such assignment) so long as Buyer or an affiliate of Buyer
controls, or is under control with, such Assignee entity.  Any permitted
assignment shall be on the further condition that the Assignee expressly assumes
the obligations of Buyer hereunder in a written agreement.  Buyer shall promptly
provide Seller with a copy of any such written assignment.  Any attempt to
assign the Agreement other than in accordance with this Section 14 shall be null
and void and considered a default hereunder.  Notwithstanding any such permitted
assignment, Buyer shall remain liable for the performance of its obligations
hereunder to the extent of any default of Assignee thereof.  Subject to the
foregoing provisions of this Section 14, this Agreement shall inure to the
benefit of and be binding on the parties hereto and their respective heirs,
legal representatives, successors, and assigns.  This Agreement is for the sole
benefit of Seller and Buyer (including a permitted Assignee), and no third party
(including, without limitation, subsequent owners of the Property) is intended
to be a beneficiary of or have the right to enforce this Agreement.  Seller may
not assign this Agreement.

15. WAIVER.

 

No waiver of any breach of any agreement or provision contained herein shall be
deemed a waiver of any preceding or succeeding breach of any other agreement or
provision herein contained.  No extension of time for the performance of any
obligation or act shall be deemed an extension of time for the performance of
any other obligation or act.

16. GOVERNING LAW; TIME.

 

This Agreement shall be construed under the laws of the State in which the Real
Property is located (without regard to the principles thereof governing
conflicts of laws).  All periods of time referred to in this Agreement shall
include all business and non-business days unless such period of time specifies
business days; provided, however, that if the date or last date to perform any
act or give a notice with respect to the Agreement shall fall on a day that is
not a business day, such act or notice may be timely performed or given on the
next succeeding business day.

17. NOTICES.

 

All notices required or permitted to be given hereunder shall be in writing and
sent by overnight delivery service (such as Federal Express), in which case
notice shall be deemed given on the day after the date sent, or by personal
delivery, in which case notice shall be deemed given on the date received, or by
certified mail, in which case notice shall be deemed given three (3) days after
the date sent, or by electronic mail (with copy by overnight delivery service),
in which case notice shall be deemed given on the date sent, to the appropriate
address set forth below or at such other place or places as either Buyer or
Seller may, from time to time, respectively, designate in a written notice given
to the other in the manner described above.

27

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[FOR OVERNIGHT DELIVERY]

 

 

 

latema@commonwealthdevelopmentgroup.com

(931) 486-1200

 

 

 

 

 

 

bo.campbell@wallerlaw.com 

 

 

To Seller:

Villages at Spring Hill, L.P.

c/o GO-Tenn, Inc.

200 Kedron Parkway [FOR OVERNIGHT DELIVERY]

Box 9, SH [FOR U.S. MAIL]

Spring Hill, TN  37174-0009

Attn:  Larry Atema

Email:  latema@commonwealthdevelopmentgroup.com

Telephone No:  (931) 486-1200

 

 

With Copy To:

Waller Lansden Dortch & Davis, LLP

Nashville City Center

511 Union Street, Suite 2700

Nashville, Tennessee 37219-8966

Attn: Robert R. Campbell, Jr.

E-mail: bo.campbell@wallerlaw.com 

Telephone No.: (615) 850-8469

 

 

To Buyer:

Steadfast Asset Holdings, Inc.

18100 Von Karman Ave., Suite 500

Irvine, CA  92612

Attn: Ana Marie del Rio, Esq.

E-mail: adelrio@steadfastcompanies.com

Telephone No.:  (949) 852-0700

 

 

With Copy To:

Steadfast Companies

105 Oronoco Street, Suite 312

Alexandria, VA  22314

Attn:  Ginger Davis, Assoc. General Counsel

E-mail: gdavis@SteadfastCompanies.com
Telephone No:(949) 825-6704

 

and

 

Garrett DeFrenza Stiepel Ryder LLP

3200 Bristol Street, Suite 850

Costa Mesa, CA  92626

Attn:  Marcello F. DeFrenza, Esq.

Telephone No: (714) 384-4300

Email:  mdefrenza@gdsrlaw.com 

 

 

18. ENTIRE AGREEMENT.

 

This instrument, executed in duplicate, sets forth the entire agreement between
the parties and may not be canceled, modified, or amended except by a written
instrument executed by both Seller and Buyer.

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19. COUNTERPARTS; COPIES.

 

This Agreement may be executed and delivered in any number of counterparts, each
of which so executed and delivered shall be deemed to be an original and all of
which shall constitute one and the same instrument.  Electronic, photocopy and
facsimile copies of signatures may be used in place and stead of original
signatures with the same force and effect as originals.

20. AUTHORITY.

 

The individual(s) executing this Agreement on behalf of each party hereto hereby
represent and warrant that he/she has the capacity, with full power and
authority, to bind such party to the terms and provisions of this Agreement.

 

21. RECORD ACCESS AND RETENTION.

 

Seller shall promptly provide to Buyer (at Buyer’s expense) copies of, or shall
provide Buyer reasonable access to, such factual information as may be
reasonably requested by Buyer, and in the possession or control of Seller, or
its property manager or accountants, to enable Buyer’s auditor to conduct an
audit, in accordance with Rule 3-14 of Securities and Exchange Commission
Regulation S-X, of the income statements of the Property for the year to date of
the year in which Closing occurs plus the two (2) immediately preceding calendar
years (provided, however, that other than fees paid or payable to Seller, a
Seller affiliate or a third party for on-site property management, such audit
shall not include an audit of asset management fees internally allocated by
Seller (as opposed to paid to a third party) or interest expenses attributable
to the Seller).  Buyer shall be responsible for all out-of-pocket costs
associated with this audit.  Seller shall reasonably cooperate (at no cost to
Seller) with Buyer’s auditor in the conduct of such audit.  In addition, Seller
agrees to provide to Buyer or any affiliate of Buyer, if requested by such
auditor, historical financial statements for the Property, including (without
limitation) income and balance sheet data for the Property, whether required
before or after Closing.  Without limiting the foregoing, (i) Buyer or its
designated independent or other auditor may audit Seller’s operating statements
of the Property, at Buyer’s expense, and Seller shall provide such documentation
as Buyer or its auditor may reasonably request in order to complete such audit,
and (ii) Seller shall furnish to Buyer such financial and other information as
may be reasonably required by Buyer or any affiliate of Buyer to make any
required filings with the Securities and Exchange Commission or other
governmental authority.  Seller’s obligation to maintain its records for use
under this Section 21 shall be an on-going condition to Buyer’s obligation to
Close Escrow, and Seller shall maintain its records for use under this
Section 21 for a period of not less than two (2) years after the Closing
Date.  If Seller fails to make available to Buyer records or other information
as required pursuant to this Section above within five  (5)  Business Days after
Buyer’s request for the same, the Due Diligence Period shall be extended one (1)
day for each day such records or other information is not made available to
Buyer.  If the Due Diligence Period is extended by virtue of the foregoing such
that the Closing Date will occur less than ten (10) days after the expiration of
the extended Due Diligence Period, the Closing Date shall be automatically
extended to the date that is ten (10) days after the expiration of such extended
Due Diligence Period; provided, however, that Buyer shall have the option, in
its sole and absolute discretion, to require that the Close of Escrow occur
earlier than such extended Closing Date by giving written notice thereof to
Seller and Escrow Holder.  The provisions of this Section shall survive Closing.

29

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22. CONTRACT CONSIDERATION.

 

The parties have bargained for and expressly agree that the rights and
obligations of each party contained in this Agreement, including, without
limitation, Buyer’s obligation to deliver the Independent Contract Consideration
(as hereinafter defined) to Escrow Holder, constitute sufficient consideration
for the other party’s execution, delivery and performance of this Agreement in
accordance with its terms, including without limitation, Buyer’s exclusive right
to inspect and purchase the Property pursuant to this Agreement and all
contingencies and conditions of Closing for the benefit of Buyer set forth in
this Agreement.    Buyer shall deliver to Escrow Holder, in addition to and
together with Buyer’s delivery to Escrow Holder of the Initial Deposit, the sum
of ONE HUNDRED AND 00/100 DOLLARS ($100.00) (“Independent Contract
Consideration”).  Escrow Holder shall release and deliver the Independent
Contract Consideration to Seller immediately following receipt from Buyer
without the need for further instruction from any party.  The Independent
Contract Consideration is in addition to and independent of any other
consideration or payment provided in this Agreement, is non‑refundable, is fully
earned, and shall be retained by Seller notwithstanding any other provision of
this Agreement.

23. JURY TRIAL WAIVER.

 

EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
WHICH SELLER AND/OR BUYER MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR
IN ANY WAY PERTAINING TO, THIS AGREEMENT.  THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE BY THE PARTIES AND EACH HEREBY REPRESENTS AND WARRANTS TO
THE OTHER THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT.  EACH PARTY FURTHER REPRESENTS AND WARRANTS TO THE OTHER
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND THE MAKING OF
THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OF ITS OWN FREE WILL, AND HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.  THE PROVISIONS OF THIS SECTION
SHALL SURVIVE CLOSING OR THE TERMINATION OF THIS AGREEMENT.

 

30

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24. COUNSEL.  EACH PARTY HERETO WARRANTS AND REPRESENTS THAT EACH PARTY HAS BEEN
AFFORDED THE OPPORTUNITY TO BE REPRESENTED BY COUNSEL OF ITS CHOICE IN
CONNECTION WITH THE EXECUTION OF THIS AGREEMENT AND HAS HAD AMPLE OPPORTUNITY TO
READ, REVIEW, AND UNDERSTAND THE PROVISIONS OF THIS AGREEMENT.

 

25. EQUAL PARTICIPATION.  SELLER AND BUYER HAVE PARTICIPATED EQUALLY IN THE
PREPARATION OF THIS AGREEMENT, AND, THEREFORE, THIS AGREEMENT AND EACH PROVISION
HEREOF SHALL NOT BE CONSTRUED IN FAVOR OF OR AGAINST ANY PARTY TO THIS AGREEMENT
BY REASON OF ONE PARTY’S BEING DEEMED TO PREPARED THIS AGREEMENT OR IMPOSED SUCH
PROVISION.

 

26. CONFIDENTIALITY.

 

Prior to the Closing, the parties shall use commercially reasonable efforts to
ensure that no disclosure of information not already in the public domain occurs
regarding this transaction or the “Information” (as defined below); provided,
however, such disclosures may be made (a) to the parties’ respective members,
consultants, contractors, engineers, partners, investors, employees, agents,
representatives, brokers, advisors and attorneys (individually, a
“Representative” and, collectively, “Representatives”), provided each
Representative shall be instructed to maintain the confidentiality of the
Information, or (b) as required by applicable law.  As used in this Agreement,
the term “Information” shall mean any of the following: (i) all information and
documents in any way relating to the Property, the operation thereof or the sale
thereof, including, without limitation, the terms of sale, the contractual terms
set forth in this Agreement, all Leases and Contracts furnished to, or otherwise
made available for review by, Buyer or Buyer’s Representatives, or by Seller or
Seller’s Representatives, and (ii) all analyses, compilations, data, studies,
reports or other information or documents prepared or obtained by Buyer or
Buyer's Representatives containing or based on, in whole or in part, the
information or documents described in the preceding clause (i), or otherwise
reflecting their review or investigation of the Property.    Notwithstanding
anything herein to the contrary, Seller hereby acknowledges and agrees that
Buyer and its Representatives may communicate with any governmental authority or
quasi-governmental authority for the sole purpose of gathering information in
connection with the Property or Seller, or the transaction contemplated by this
Agreement; provided however that neither Buyer nor Buyer’s Representatives shall
request that any governmental authority (including any police or fire
departments) inspect the Property.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

31

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

 

 

 

 

SELLER:

 

 

 

VILLAGES AT SPRING HILL, L.P., a  Tennessee limited partnership

 

 

 

By:

GO-Tenn, Inc., a Tennessee corporation,

 

 

its general partner

 

 

 

 

 

By:

/s/ Larry A. Atema

 

 

 

Larry A. Atema,

 

 

 

Assistant Secretary

 

 

 

 

BUYER:

 

 

 

 

STEADFAST ASSET HOLDINGS, INC.,

 

a California corporation

 

 

 

 

By:

/s/ Ana Marie del Rio

 

Name:

Ana Marie del Rio

 

Its:

Vice President

 

 

 

 

11679284.1

--------------------------------------------------------------------------------

 

 

THE UNDERSIGNED HEREBY ACCEPTS THE FOREGOING PURCHASE AND SALE AGREEMENT AS OF
APRIL 9, 2014, AND AGREES TO ACT AS ESCROW HOLDER IN ACCORDANCE THEREWITH.

 

 

 

FIRST AMERICAN TITLE INSURANCE COMPANY

 

 

 

By:

/s/ Jodean King

 

 

Escrow Officer

 

 

 

EXHIBIT “A”

Page 2

--------------------------------------------------------------------------------

 

 

EXHIBIT “A”

Description of Real Property

LOCATED IN THE THIRD (3RD) CIVIL DISTRICT OF MAURY COUNTY, TENNESSEE, BEING LOT
NO. 57 OF SPRING HILL TOWN CENTER, AS SHOWN ON PLAT OF RECORD IN PLAT BOOK 7,
PAGES 398-400, AS REVISED IN PLAT BOOK 8, PAGES 282-284, REGISTER'S OFFICE FOR
MAURY COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED, AS FOLLOWS,
TO-WIT:

BEGINNING AT A POINT ON THE SOUTHERN MARGIN OF BEECHCROFT ROAD, SAID POINT BEING
N 89° 02' 36" E, 511.84 FEET FROM THE INTERSECTION OF TOWN CENTER PARKWAY AND
BEECHCROFT ROAD;

THENCE, FROM POINT OF BEGINNING WITH THE SOUTHERN MARGIN OF BEECHCROFT ROAD, N
89° 02' 36" E, 100.00 FEET TO A POINT;

THENCE, LEAVING SAID ROAD WITH THE WESTERN BOUNDARY OF A PARCEL CONVEYED TO
ALEXANDER KOGEN, OF RECORD IN BOOK 391, PAGE 85, S 00° 49' 13" E, 165.43 FEET TO
A POINT;

THENCE, WITH THE SOUTHERN BOUNDARY OF SAID KOGEN PROPERTY AND THE SOUTHERN
BOUNDARY OF A PARCEL CONVEYED TO RANDAL BIGGERS OF RECORD IN BOOK 747, PAGE 778,
AND A PARCEL CONVEYED TO JAMES PIPKINS OF RECORD IN BOOK 377, PAGE 66, R.O.M.C.,
N 89° 16' 51" E, 230.32 FEET TO A POINT;

THENCE, WITH THE SOUTHERN BOUNDARY OF SAID PIPKINS PARCEL, S 88° 50' 56" E,
98.45 FEET TO A POINT;

THENCE, WITH SAID SOUTHERN BOUNDARY OF PIPKINS AND THE SOUTHERN BOUNDARY OF A
PARCEL CONVEYED TO DON GRAY OF RECORD IN BOOK 825, PAGE 22, R.O.M.C., N 89° 15'
44" E, 109.06 FEET TO A POINT;

THENCE, N 83° 08' 39" E, 50.10 FEET TO A POINT;

THENCE, WITH THE WESTERN BOUNDARY OF A PARCEL CONVEYED TO THE CITY OF SPRING
HILL OF RECORD IN BOOK 743, PAGE 623, R.O.M.C., S 16° 30' 46" E, 179.85 FEET TO
A POINT;

THENCE, S 74° 08' 49", E, 162.42 FEET TO A POINT, SAID POINT BEING A POINT ON
THE WESTERN BOUNDARY OF A PARCEL CONVEYED TO MAURY COUNTY BOARD OF EDUCATION OF
RECORD IN BOOK 745, PAGE 268, R.O.M.C.;

THENCE, WITH SAID COUNTY PROPERTY, S 14° 25' 53" E, 299.41 FEET TO A POINT;

EXHIBIT “A”

Page 1

--------------------------------------------------------------------------------

 

 

THENCE, S 63° 03' 41" E, 313.00 FEET TO A POINT;

THENCE, N 53° 16' 44" E, 258.00 FEET TO A POINT:

THENCE, S 15° 59' 04" E, 173.51 FEET TO A POINT;

THENCE, S 03° 14' 34" W, 342.90 FEET TO A POINT, SAID POINT BEING ON THE
NORTHERN BOUNDARY OF LOT 61 OF SPRING HILL TOWN CENTER SUBDIVISION OF RECORD IN
PLAT BOOK 8, PAGE 282, R.O.M.C.;

THENCE, WITH THE COMMON LINE BETWEEN SAID LOTS 61 AND 57, S 73° 44' 13" W,
110.34 FEET TO A POINT;

THENCE, N 69° 57' 21" W, 301.50 FEET TO A POINT, SAID POINT BEING A POINT ON A
MANHOLE COVER;

THENCE, N 53° 30' 53" W, 90.00 FEET TO A POINT, SAID POINT BEING THE
NORTHWESTERN CORNER OF LOT 60 OF SAID SPRING HILL TOWN CENTER;

THENCE, WITH THE WESTERN MARGIN OF SAID LOT 60 WITH A CURVE TO THE RIGHT 109.38
FEET TO A POINT, SAID CURVE HAVING A CENTRAL ANGLE OF 20° 39' 05", A RADIUS OF
303.46 FEET, A TANGENT OF 55.29 FEET, AND A CHORD OF S 38° 07' 52" W, 109.34
FEET;

THENCE, S 57° 08' 13" W, 22.64 FEET TO A POINT;

THENCE, WITH A CURVE TO THE LEFT 111.37 FEET TO A POINT, SAID CURVE HAVING A
CENTRAL ANGLE OF 38° 00' 41", A RADIUS OF 167.87 FEET, A TANGENT OF 57.82 FEET,
AND A CHORD OF S 38° 07' 52" W, 109.34 FEET;

THENCE, WITH A CURVE TO THE RIGHT 40.78 FEET TO A POINT, SAID CURVE HAVING A
CENTRAL ANGLE OF 93° 27' 34", A RADIUS OF 25.00 FEET, A TANGENT OF 20.56 FEET,
AND A CHORD OF S 27° 36' 15" E, 36.41 FEET, SAID POINT BEING ON THE NORTHERN
MARGIN OF KEDRON ROAD;

THENCE, WITH THE NORTH MARGIN OF KEDRON ROAD, WITH A CURVE TO THE LEFT, 119.45
FEET, SAID CURVE HAVING A CENTRAL ANGLE OF 09° 55' 07", A RADIUS OF 690.00 FEET,
A TANGENT OF 59.87 FEET, AND A CHORD OF N 79° 17' 35" W, 119.30 FEET;

THENCE, WITH SAID ROAD N 84° 15' 08" W, 7.19 FEET TO A POINT, SAID POINT BEING A
COMMON FRONT CORNER BETWEEN LOTS 49 AND 57;

THENCE, WITH THE COMMON LINE BETWEEN SAID LOTS, WITH A CURVE TO THE LEFT, 35.25
FEET TO A POINT, SAID CURVE HAVING A CENTRAL ANGLE OF 80° 46' 32", A RADIUS OF
25.00 FEET, A TANGENT OF 21.27 FEET, AND A CHORD OF N 55°

EXHIBIT “A”

Page 2

--------------------------------------------------------------------------------

 

 

21' 36" E, 32.40 FEET;

THENCE, CONTINUING WITH SAID COMMON LINE BETWEEN LOTS 57 AND 49 WITH A CURVE TO
THE RIGHT 182.41 FEET TO A POINT, SAID CURVE HAVING A CENTRAL ANGLE OF 42° 09'
52", A RADIUS OF 247.87 FEET, A TANGENT OF 95.56 FEET, AND A CHORD OF N 36° 03'
16" E, 178.32 FEET;

THENCE, N 57° 08' 13" E, 22.64 FEET TO A POINT;

THENCE, WITH A CURVE TO THE RIGHT, 11.00 FEET TO A POINT, SAID CURVE HAVING A
CENTRAL ANGLE OF 02° 49' 15", A RADIUS OF 223.45 FEET, A TANGENT OF 5.50 FEET,
AND A CHORD OF N 55° 43' 35" E, 11.00 FEET;

THENCE, N 04° 23' 29" E, 32.55 FEET TO A POINT, SAID POINT BEING A COMMON CORNER
BETWEEN LOTS 49 AND 57;

THENCE, WITH THE COMMON LINE BETWEEN SAID LOTS, N 53° 27' 33" W, 290.00 FEET TO
A POINT;

THENCE, N 75° 04' 01" W, 170.00 FEET TO A POINT;

THENCE, S 83° 38' 45" W, 200.61 FEET TO A POINT;

THENCE, N 43° 31' 24" W, 270.00 FEET TO A POINT;

THENCE, S 89° 54' 52" W, 114.91 FEET TO A POINT, SAID POINT BEING A COMMON
CORNER BETWEEN LOTS 49 AND 57 AND ALSO A POINT ON THE EASTERN MARGIN OF LOT 47;

THENCE, WITH SAID COMMON LINE N 00° 05' 08" W, 262.41 FEET TO A POINT, SAID
POINT BEING ON THE SOUTHERN MARGIN OF LOT 46;

THENCE, WITH SAID LOT 46, N 89° 47' 38" E, 90.28 FEET TO A POINT, SAID POINT
BEING THE SOUTHEAST CORNER OF LOT 46;

THENCE, WITH THE EASTERN MARGIN OF LOT 46, N 00° 57' 24" W, 348.99 FEET TO THE
POINT OF BEGINNING.

INCLUDED IN THE ABOVE DESCRIBED TRACT OF LAND BUT SPECIFICALLY EXCLUDED
THEREFROM IS THAT CERTAIN TRACT OR PARCEL OF LAND CONVEYED TO THE TOWN OF SPRING
HILL BY DEED OF RECORD IN BOOK 1463, PAGE 831, REGISTER'S OFFICE FOR MAURY
COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS, TO-WIT:

BEING LAND IN THE THIRD CIVIL DISTRICT, SPRING HILL, MAURY COUNTY, TENNESSEE,
LOCATED GENERALLY SOUTH OF BEECHCROFT ROAD, NORTH OF

EXHIBIT “A”

Page 3

--------------------------------------------------------------------------------

 

 

HIGHWAY 31 (MAIN STREET) BETWEEN MAURY HILL DRIVE AND KEDRON PARKWAY AND BEING
MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN IRON PIN FOUND AT THE NORTHEAST CORNER OF LOT 61, SPRING HILL,
TOWN CENTER, AS OF RECORD IN PLAT BOOK 8, PAGE 283, R.O.M.C., SAID PIN BEING IN
THE WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION, AS OF RECORD IN DEED
BOOK 665, PAGE 230, R.O.M.C.;

THENCE, LEAVING SAID WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION WITH
THE NORTHERLY PROPERTY LINE OF SAID LOT 61, S 73 DEG. 44 MIN. 13 SEC. W, 11.96
FEET TO THE TOP OF CREEK BANK;

THENCE, GENERALLY FOLLOWING THE TOP OF CREEK BANK THE FOLLOWING FOUR CALLS:

N 21 DEG. 25 MIN. 00 SEC. W, 8.12 FEET TO A POINT;

N 00 DEG. 25 MIN. 54 SEC. W, 170.08 FEET TO A POINT;

N 27 DEG. 25 MIN. 57 SEC. W, 93.36 FEET TO A POINT;

N 23 DEG. 43 MIN. 58 SEC. E, 72.21 FEET TO A POINT;

THENCE, LEAVING SAID TOP OF BANK, N 68 DEG. 44 MIN. 14 SEC. E, 52.65 FEET TO AN
IRON PIN FOUND IN THE WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION, AS
OF RECORD IN DEED BOOK 665, PAGE 230, R.O.M.C.;

THENCE WITH THE WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION, S 03 DEG.
14 MIN. 34 SEC. W, 342.90 FEET TO THE POINT OF BEGINNING.

BEING PART OF THE SAME PROPERTY CONVEYED TO VILLAGES AT SPRING HILL, L.P., BY
SPECIAL WARRANTY DEED OF RECORD IN BOOK 1214, PAGE 975, IN THE REGISTER'S
OFFICE, MAURY COUNTY, TENNESSEE.

 

 

EXHIBIT “A”

Page 4

--------------------------------------------------------------------------------

 

 

EXHIBIT “B”

 

Personal Property Description

[Attached]

 

[INTENTIONALLY OMITTED]

 

11679284.1

EXHIBIT “B”

Page 1

--------------------------------------------------------------------------------

 

 

EXHIBIT “C”

Due Diligence Documents

 

For any items that are not in the possession or control of, or are reasonably
available, to Owner, please indicate with “Not available to Owner”, and for any
that are not applicable to the Property, please indicate “Not applicable to
Property”

 

 

 

 

 

 

CONSTRUCTION / REHABILITATION

Delivered (Date)

Not applicable to Property

Not available to Owner

1

Plans & Specifications: Site plan and most current civil, landscape,
architectural, structural mechanical, electrical and fire protection plans,
including elevations

 

 

 

2

Construction contracts, if any, including for all work completed in past 3 years

 

 

 

3

Current capital improvements with schedule (past 3 years) and Capital
expenditure budget for next 3 years

 

 

 

4

Detailed unit-by-unit list of upgraded vs. non-upgraded units (if applicable)

 

 

 

5

Warranties in effect, if any (construction, roof, mechanical equipment, etc.)

 

 

 

6

Copies of all licenses, permits, and governmental approvals,  including business
license (with expiration date & annual costs), fictitious business name
statements and building permits (showing placed in service/completion dates)

 

 

 

7

Certificate(s) of Occupancy for all buildings

 

 

 

8

List and description of tenant or common area work in progress, if any

 

 

 

9

Copies of all governmental correspondence or notices pertaining to the property,
including but not limited to building code, health code, zoning and fire code,

 

 

 

10

Maintenance records/work orders, including water intrusion log, for past 12
months

 

 

 

 

11679284.1

EXHIBIT “D”

--------------------------------------------------------------------------------

 

 

11

Operation & Maintenance (O&M) Manuals, if any, for maintenance of equipment or
hazardous materials

 

 

 

 

FINANCIAL

 

 

 

1

Monthly operating statements, YTD & 3-year historical (cash flow and income
statements, balance sheets)

 

 

 

2

Year-end financial statements: Trailing-12 and audited statements, past 3 years

 

 

 

3

Operating budget, current year and/or next available

 

 

 

4

Property tax bills and Assessment notices, current and past 3 years, with proof
of payment (including special assessments or districts and all documentation
concerning appeals)

 

 

 

5

Utility bills for any master-metered utility expenses and any resident unit
utilities paid by the Property, monthly YTD and past calendar year

 

 

 

6

List of utilities paid by Owner/Residents and list of account numbers

 

 

 

7

List of meters and required deposits (if any / typically for gas, electric,
water, phone)

 

 

 

8

Security deposit/resident ledgers, current

 

 

 

9

Name and version of accounting software

 

 

 

10

Tax returns, past 3 years - For company purchases only

 

 

 

11

Loan documents (full closing binder) - For loan assumptions only

 

 

 

12

REIT Property Services Questionnaire (form for completion to be provided)

 

 

 

13

General Ledger, prior year, most recent quarter-end and YTD (in Excel format)

 

 

 

14

Trial Balance, prior year, most recent quarter-end and YTD (in Excel format)

 

 

 

15

Bank Statements and Reconciliations, prior year, most recent quarter-end and YTD
(monthly)

 

 

 

 

EXHIBIT “D”

--------------------------------------------------------------------------------

 

 

16

Cash Disbursement Journal, prior year, most recent quarter-end and YTD

 

 

 

17

Check Register, prior year, most recent quarter-end and YTD

 

 

 

18

Accounts Payable Aging Detail, prior year, most recent quarter-end and YTD

 

 

 

19

Aged Delinquency Report (showing total rent outstanding) with status of any
files placed for eviction or collection

 

 

 

20

Rent and expense selections, prior year, most recent quarter-end and YTD (25
respective selections to be made by Buyer’s independent REIT 3-14 auditors based
upon items received for #13-17 above)

 

 

 

21

Payroll selections, prior year, most recent quarter-end and YTD (2-months of
selections with detailed support to be made by Buyer’s independent REIT 3-14
auditors; detailed support to be requested may include inputs, timecards,
reimbursement calculations, agreements or contracts as necessary, to support and
recalculate the payroll amounts shown in the financial statements)

 

 

 

 

MANAGEMENT/LEASING/OPERATIONS

 

 

 

1

Monthly rent rolls, prior year and YTD, in Excel (with all lease charges broken
out, to include unit square footage, monthly rent, deposits, financial
concessions, other concessions, lease term, extension options, defaults
(financial or otherwise), and such other information as Buyer may require)

 

 

 

2

Market rent survey (comparison of subject w/other properties)

 

 

 

3

Occupancy history, monthly for past 3 years and current YTD

 

 

 

4

Current leases for all tenants with all available tenant correspondence files
(including amendments/letters/agreements/default notices given or received) and
all historical litigation pleadings, if any

 

 

 

5

Current or former lease selections, as the case may be, with copies of back-up
for rents received (for both resident and any housing authority portion paid, as
applicable), prior year and YTD (25 selections to be made by Buyer’s independent
REIT 3-14 auditors)

 

 

 

6

Current form of lease with all addenda

 

 

 

7

List of leases under negotiation or currently out for signature

 

 

 

EXHIBIT “D”

--------------------------------------------------------------------------------

 

 

 

8

Current tenant contact sheet (name, address, phone number)

 

 

 

9

Current staff list (names, titles, hire dates, salary, unit info, hours per
week, list of benefits, commissions offered, if any)

 

 

 

10

Job descriptions for staff positions

 

 

 

11

Worker’s Comp insurance loss run history, including Experience Modification Rate
(YTD & past 3 yrs)

 

 

 

12

OSHA 300 Log (most recent 3 years)

 

 

 

13

Inventory of personal property on site, including items such as furniture,
supplies, appliances

 

 

 

14

Property brochure

 

 

 

15

List of all active vendors utilized at the property (name, function, contact
information)

 

 

 

16

Copies of all operating and management service contracts, including but not
limited to:

 

 

 

 

a. Advertising (including any apt. locator services & pay-per-lease agreements)

 

 

 

 

b. Alarm monitoring (including any firm alarm & security cameras)

 

 

 

 

c. Cable/TV (including any revenue sharing programs); if none, please indicate
so in writing

 

 

 

 

d. Elevator

 

 

 

 

e. Equipment leases (such as copier, postage machines, key control systems)

 

 

 

 

f. Fire extinguisher (including any fire sprinkler systems)

 

 

 

 

g. Furniture rental

 

 

 

 

h. HVAC

 

 

 

 

i. Internet (including any leased equipment such as modems and firewalls

 

 

 

 

j. Janitorial services (including any uniform cleaning services)

 

 

 

 

EXHIBIT “D”

--------------------------------------------------------------------------------

 

 

 

k. Landscaping (including any pond/lake maintenance and snow removal)

 

 

 

 

l. Laundry

 

 

 

 

m. Pest control (including any termite contracts)

 

 

 

 

n. Phone (landlines, cell phones, pagers, answering service)

 

 

 

 

o. Pool (maintenance, emergency phone, etc.)

 

 

 

 

p. Property management agreement; indicate whether entity is related party for
disclosure purposes

 

 

 

 

q. Security (including any on-site courtesy officer arrangements)

 

 

 

 

r. Trash (including recycling programs); Also a copy of the most recent invoice

 

 

 

 

s. Revenue Sharing (such as vending machines, pay phones)

 

 

 

 

t. Collection Recovery

 

 

 

 

u. Credit/application verification

 

 

 

 

v. Training programs (including any safety training materials and/or Safety
Plan)

 

 

 

 

w. Software (including any property management software such as OneSite, Yardi,
etc.)

 

 

 

 

x. Common Area Services (such as office cleaning, dog waste removal, etc.)

 

 

 

 

y. Utility Billing by Third Party

 

 

 

 

z. Gate/Access Systems (including software for programming access cards/remotes)

 

 

 

 

aa. Towing/Parking Services

 

 

 

 

bb. Website Domain (including any website hosting)

 

 

 

 

cc. Boiler Maintenance and Water Treatment

 

 

 

 

PHYSICAL ITEMS

 

 

 

 

EXHIBIT “D”

--------------------------------------------------------------------------------

 

 

1

Property information, including number of pools, spas, dumpsters (with size),
buildings, storage units, laundry rooms

 

 

 

2

Marketing photos, including aerial photos if available

 

 

 

3

Parking: indicate carport, garages, or open spaces and how many of each

 

 

 

4

Unit floor plans with sq. footage

 

 

 

5

List of model units, if any (apt. #, bedrooms, rent loss)

 

 

 

6

List of fire safety equipment, such as smoke sensors, suppression devices, etc.
(including system type, rating, map of locations, etc.)

 

 

 

7

Current insurance certificates: Evidence of Commercial Property Insurance and
Certificate of Insurance

 

 

 

8

Insurance loss run history, past 3 years and YTD (property & general liability)

 

 

 

9

Copies of insurance policies, past 3 years

 

 

 

10

All existing third party reports, including, but not limited to:

 

 

 

 

a. Certified, as-built ALTA Survey

 

 

 

 

b. Appraisal (if dated w/n 24 months)

 

 

 

 

c. Asbestos

 

 

 

 

d. Lead-Based Paint Report

 

 

 

 

e. Engineering study or inspection (structural or otherwise)

 

 

 

 

f. Mold

 

 

 

 

g. Phase I Environmental

 

 

 

 

h. Physical Needs Assessment

 

 

 

 

i. Operations & Maintenance (O&M) Plans, if any

 

 

 

 

j. Radon

 

 

 

 

k. Soils/Geotechnical

 

 

 

 

l. Termite

 

 

 

 

EXHIBIT “D”

--------------------------------------------------------------------------------

 

 

 

m. Fire/Life Safety Inspection Report (current)

 

 

 

 

TITLE AND AGREEMENTS

 

 

 

1

Title Insurance Commitment and all recorded documents referenced therein

 

 

 

2

Zoning: any reports, compliance letters, maps, ordinances, amendments, CC&R’s,
special use permits, etc.

 

 

 

3

Pending litigation summary and copies of all pleadings, if applicable

 

 

 

4

Governmental Agreements:  Any city or county development agreements, bonds, tax
increment financing agreements, municipal utility agreements, etc.

 

 

 

5

Condo / Association documents, if applicable (articles of incorporation, bylaws,
CC&R’s, Declaration of Horizontal Regime, budgets, material notices, rules and
regulations, etc.)

 

 

 

6

Development Agreements:  Any development agreements or restrictions with any
private party

 

 

 

7

Access Agreements:  Any agreements for shared roadways, driveways or other
access

 

 

 

8

Amenities Agreements:  Any reciprocal easement agreements or shared used
agreements for any amenities

 

 

 

9

Other Agreements:  Any agreements that will be binding on the property after
closing or that provide any material benefit to or obligation on the property

 

 

 

 

 

EXHIBIT “D”

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EXHIBIT “D”

Form of Deed

FROM:Villages at Spring Hill, L.P., a Tennessee limited partnership

TO:____________________________, a ___________________________________

______________________________________________________________________________

Address New Owner as follows:Send Tax Bills to:Map-Parcel Number:

 

______________________________

______________________________

______________________________       

______________________________

______________________________

______________________________________________________________________________

THIS INSTRUMENT PREPARED BY: Waller Lansden Dortch & Davis, LLP, Nashville City
Center, 511 Union Street, Suite 2700, Nashville, Tennessee 37219-8966

______________________________________________________________________________

 

STATE OF_____________)

COUNTY OF _____________)

 

The actual consideration or value, whichever is greater, for this transfer is
Fourteen Million Two Hundred Thousand and No/100 Dollars ($14,200,000.00).

 

 

 

 

 

 

Affiant

 

Subscribed and sworn to before me, this the _____ day of ______________, 2014.

 

 

 

 

 

Notary Public

 

My Comm. Expires:______________

EXHIBIT “D”

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______________________________________________________________________________

SPECIAL WARRANTY DEED

 

FOR AND IN CONSIDERATION OF the sum of Ten Dollars, cash in hand paid by the
hereinafter named GRANTEE, and other good and valuable considerations, the
receipt and sufficiency of which are hereby acknowledged VILLAGES AT SPRING
HILL, L.P., a Tennessee limited partnership, hereinafter called "GRANTOR", has
bargained and sold, and by these presents does transfer and convey unto
_______________________________, a _______________________,  hereinafter called
"GRANTEE", its successors and assigns, a certain tract or parcel of land in
Maury County, State of Tennessee, described as follows, to wit (the “Property”):

 

LOCATED IN THE THIRD (3RD) CIVIL DISTRICT OF MAURY COUNTY, TENNESSEE, BEING LOT
NO. 57 OF SPRING HILL TOWN CENTER, AS SHOWN ON PLAT OF RECORD IN PLAT BOOK 7,
PAGES 398-400, AS REVISED IN PLAT BOOK 8, PAGES 282-284, REGISTER'S OFFICE FOR
MAURY COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED, AS FOLLOWS,
TO-WIT:

BEGINNING AT A POINT ON THE SOUTHERN MARGIN OF BEECHCROFT ROAD, SAID POINT BEING
N 89° 02' 36" E, 511.84 FEET FROM THE INTERSECTION OF TOWN CENTER PARKWAY AND
BEECHCROFT ROAD;

THENCE, FROM POINT OF BEGINNING WITH THE SOUTHERN MARGIN OF BEECHCROFT ROAD, N
89° 02' 36" E, 100.00 FEET TO A POINT;

THENCE, LEAVING SAID ROAD WITH THE WESTERN BOUNDARY OF A PARCEL CONVEYED TO
ALEXANDER KOGEN, OF RECORD IN BOOK 391, PAGE 85, S 00° 49' 13" E, 165.43 FEET TO
A POINT;

THENCE, WITH THE SOUTHERN BOUNDARY OF SAID KOGEN PROPERTY AND THE SOUTHERN
BOUNDARY OF A PARCEL CONVEYED TO RANDAL BIGGERS OF RECORD IN BOOK 747, PAGE 778,
AND A PARCEL CONVEYED TO JAMES PIPKINS OF RECORD IN BOOK 377, PAGE 66, R.O.M.C.,
N 89° 16' 51" E, 230.32 FEET TO A POINT;

THENCE, WITH THE SOUTHERN BOUNDARY OF SAID PIPKINS PARCEL, S 88° 50' 56" E,
98.45 FEET TO A POINT;

THENCE, WITH SAID SOUTHERN BOUNDARY OF PIPKINS AND THE SOUTHERN BOUNDARY OF A
PARCEL CONVEYED TO

EXHIBIT “D”

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DON GRAY OF RECORD IN BOOK 825, PAGE 22, R.O.M.C., N 89° 15' 44" E, 109.06 FEET
TO A POINT;

THENCE, N 83° 08' 39" E, 50.10 FEET TO A POINT;

THENCE, WITH THE WESTERN BOUNDARY OF A PARCEL CONVEYED TO THE CITY OF SPRING
HILL OF RECORD IN BOOK 743, PAGE 623, R.O.M.C., S 16° 30' 46" E, 179.85 FEET TO
A POINT;

THENCE, S 74° 08' 49", E, 162.42 FEET TO A POINT, SAID POINT BEING A POINT ON
THE WESTERN BOUNDARY OF A PARCEL CONVEYED TO MAURY COUNTY BOARD OF EDUCATION OF
RECORD IN BOOK 745, PAGE 268, R.O.M.C.;

THENCE, WITH SAID COUNTY PROPERTY, S 14° 25' 53" E, 299.41 FEET TO A POINT;

THENCE, S 63° 03' 41" E, 313.00 FEET TO A POINT;

THENCE, N 53° 16' 44" E, 258.00 FEET TO A POINT:

THENCE, S 15° 59' 04" E, 173.51 FEET TO A POINT;

THENCE, S 03° 14' 34" W, 342.90 FEET TO A POINT, SAID POINT BEING ON THE
NORTHERN BOUNDARY OF LOT 61 OF SPRING HILL TOWN CENTER SUBDIVISION OF RECORD IN
PLAT BOOK 8, PAGE 282, R.O.M.C.;

THENCE, WITH THE COMMON LINE BETWEEN SAID LOTS 61 AND 57, S 73° 44' 13" W,
110.34 FEET TO A POINT;

THENCE, N 69° 57' 21" W, 301.50 FEET TO A POINT, SAID POINT BEING A POINT ON A
MANHOLE COVER;

THENCE, N 53° 30' 53" W, 90.00 FEET TO A POINT, SAID POINT BEING THE
NORTHWESTERN CORNER OF LOT 60 OF SAID SPRING HILL TOWN CENTER;

THENCE, WITH THE WESTERN MARGIN OF SAID LOT 60 WITH A CURVE TO THE RIGHT 109.38
FEET TO A POINT, SAID CURVE HAVING A CENTRAL ANGLE OF 20° 39' 05", A RADIUS OF
303.46 FEET, A TANGENT OF 55.29 FEET, AND A CHORD OF S 38° 07' 52" W, 109.34
FEET;

THENCE, S 57° 08' 13" W, 22.64 FEET TO A POINT;

THENCE, WITH A CURVE TO THE LEFT 111.37 FEET TO A POINT, SAID CURVE HAVING A
CENTRAL ANGLE OF 38° 00' 41", A RADIUS OF 167.87 FEET, A TANGENT OF 57.82 FEET,
AND A CHORD OF S 38° 07' 52" W, 109.34 FEET;

EXHIBIT “D”

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THENCE, WITH A CURVE TO THE RIGHT 40.78 FEET TO A POINT, SAID CURVE HAVING A
CENTRAL ANGLE OF 93° 27' 34", A RADIUS OF 25.00 FEET, A TANGENT OF 20.56 FEET,
AND A CHORD OF S 27° 36' 15" E, 36.41 FEET, SAID POINT BEING ON THE NORTHERN
MARGIN OF KEDRON ROAD;

THENCE, WITH THE NORTH MARGIN OF KEDRON ROAD, WITH A CURVE TO THE LEFT, 119.45
FEET, SAID CURVE HAVING A CENTRAL ANGLE OF 09° 55' 07", A RADIUS OF 690.00 FEET,
A TANGENT OF 59.87 FEET, AND A CHORD OF N 79° 17' 35" W, 119.30 FEET;

THENCE, WITH SAID ROAD N 84° 15' 08" W, 7.19 FEET TO A POINT, SAID POINT BEING A
COMMON FRONT CORNER BETWEEN LOTS 49 AND 57;

THENCE, WITH THE COMMON LINE BETWEEN SAID LOTS, WITH A CURVE TO THE LEFT, 35.25
FEET TO A POINT, SAID CURVE HAVING A CENTRAL ANGLE OF 80° 46' 32", A RADIUS OF
25.00 FEET, A TANGENT OF 21.27 FEET, AND A CHORD OF N 55° 21' 36" E, 32.40 FEET;

THENCE, CONTINUING WITH SAID COMMON LINE BETWEEN LOTS 57 AND 49 WITH A CURVE TO
THE RIGHT 182.41 FEET TO A POINT, SAID CURVE HAVING A CENTRAL ANGLE OF 42° 09'
52", A RADIUS OF 247.87 FEET, A TANGENT OF 95.56 FEET, AND A CHORD OF N 36° 03'
16" E, 178.32 FEET;

THENCE, N 57° 08' 13" E, 22.64 FEET TO A POINT;

THENCE, WITH A CURVE TO THE RIGHT, 11.00 FEET TO A POINT, SAID CURVE HAVING A
CENTRAL ANGLE OF 02° 49' 15", A RADIUS OF 223.45 FEET, A TANGENT OF 5.50 FEET,
AND A CHORD OF N 55° 43' 35" E, 11.00 FEET;

THENCE, N 04° 23' 29" E, 32.55 FEET TO A POINT, SAID POINT BEING A COMMON CORNER
BETWEEN LOTS 49 AND 57;

THENCE, WITH THE COMMON LINE BETWEEN SAID LOTS, N 53° 27' 33" W, 290.00 FEET TO
A POINT;

THENCE, N 75° 04' 01" W, 170.00 FEET TO A POINT;

THENCE, S 83° 38' 45" W, 200.61 FEET TO A POINT;

THENCE, N 43° 31' 24" W, 270.00 FEET TO A POINT;

THENCE, S 89° 54' 52" W, 114.91 FEET TO A POINT, SAID POINT BEING A COMMON
CORNER BETWEEN LOTS 49 AND 57 AND ALSO A POINT ON THE EASTERN MARGIN OF LOT 47;

EXHIBIT “D”

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THENCE, WITH SAID COMMON LINE N 00° 05' 08" W, 262.41 FEET TO A POINT, SAID
POINT BEING ON THE SOUTHERN MARGIN OF LOT 46;

THENCE, WITH SAID LOT 46, N 89° 47' 38" E, 90.28 FEET TO A POINT, SAID POINT
BEING THE SOUTHEAST CORNER OF LOT 46;

THENCE, WITH THE EASTERN MARGIN OF LOT 46, N 00° 57' 24" W, 348.99 FEET TO THE
POINT OF BEGINNING.

INCLUDED IN THE ABOVE DESCRIBED TRACT OF LAND BUT SPECIFICALLY EXCLUDED
THEREFROM IS THAT CERTAIN TRACT OR PARCEL OF LAND CONVEYED TO THE TOWN OF SPRING
HILL BY DEED OF RECORD IN BOOK 1463, PAGE 831, REGISTER'S OFFICE FOR MAURY
COUNTY, TENNESSEE, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS, TO-WIT:

BEING LAND IN THE THIRD CIVIL DISTRICT, SPRING HILL, MAURY COUNTY, TENNESSEE,
LOCATED GENERALLY SOUTH OF BEECHCROFT ROAD, NORTH OF HIGHWAY 31 (MAIN STREET)
BETWEEN MAURY HILL DRIVE AND KEDRON PARKWAY AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT AN IRON PIN FOUND AT THE NORTHEAST CORNER OF LOT 61, SPRING HILL,
TOWN CENTER, AS OF RECORD IN PLAT BOOK 8, PAGE 283, R.O.M.C., SAID PIN BEING IN
THE WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION, AS OF RECORD IN DEED
BOOK 665, PAGE 230, R.O.M.C.;

THENCE, LEAVING SAID WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION WITH
THE NORTHERLY PROPERTY LINE OF SAID LOT 61, S 73 DEG. 44 MIN. 13 SEC. W, 11.96
FEET TO THE TOP OF CREEK BANK;

THENCE, GENERALLY FOLLOWING THE TOP OF CREEK BANK THE FOLLOWING FOUR CALLS:

N 21 DEG. 25 MIN. 00 SEC. W, 8.12 FEET TO A POINT;

N 00 DEG. 25 MIN. 54 SEC. W, 170.08 FEET TO A POINT;

N 27 DEG. 25 MIN. 57 SEC. W, 93.36 FEET TO A POINT;

N 23 DEG. 43 MIN. 58 SEC. E, 72.21 FEET TO A POINT;

THENCE, LEAVING SAID TOP OF BANK, N 68 DEG. 44 MIN. 14

EXHIBIT “D”

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SEC. E, 52.65 FEET TO AN IRON PIN FOUND IN THE WESTERLY LINE OF THE MAURY COUNTY
BOARD OF EDUCATION, AS OF RECORD IN DEED BOOK 665, PAGE 230, R.O.M.C.;

THENCE WITH THE WESTERLY LINE OF THE MAURY COUNTY BOARD OF EDUCATION, S 03 DEG.
14 MIN. 34 SEC. W, 342.90 FEET TO THE POINT OF BEGINNING.

BEING PART OF THE SAME PROPERTY CONVEYED TO VILLAGES AT SPRING HILL, L.P., BY
SPECIAL WARRANTY DEED OF RECORD IN BOOK 1214, PAGE 975, IN THE REGISTER'S
OFFICE, MAURY COUNTY, TENNESSEE.

 

Said property is transferred subject to the limitations, restrictions, and
encumbrances set forth below.

 

[PERMITTED ENCUMBRANCES TO BE ATTACHED PURSUANT TO SECTION 6.3]

 

This is improved property commonly known as 200 Kedron Parkway, Spring Hill,
Tennessee 37174.

 

TO HAVE AND TO HOLD the said tract or parcel of land, with the appurtenances,
estate, title and interest thereto belonging to the said GRANTEE, its successors
and assigns, forever, and GRANTOR further covenants and binds itself, its
successors and assigns to warrant specially and forever defend the title to said
real estate to GRANTEE, its successors and assigns, against the lawful claims of
all persons claiming through and under GRANTOR (other than claims arising out of
the matters set forth above), but not further or otherwise.  Wherever used, the
singular number shall include the plural, the plural the singular, and the use
of any gender shall be applicable to all genders.

EXHIBIT “D”

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IN WITNESS WHEREOF, Grantor has caused this Special Warranty Deed to be executed
this ____ day of __________, 2014.

 

 

 

GRANTOR:

 

 

 

VILLAGES AT SPRING HILL, L.P., a  Tennessee limited partnership

 

 

 

By:

GO-Tenn, Inc., a Tennessee corporation,

 

 

its general partner

 

 

 

 

 

 

 

 

By:

 

 

 

 

Larry A. Atema,

 

 

 

Assistant Secretary

 

 

STATE OF TENNESSEE)

 

COUNTY OF  ____________)

 

Before me, the undersigned, a Notary Public in and for the County and State
aforesaid, personally appeared ________, with whom I am personally acquainted
(or proved to me on the basis of satisfactory evidence), and who upon oath
acknowledged himself to be the ________ of Villages at Spring Hill, L.P., a
Tennessee limited partnership, the within named grantor, and being authorized so
to do, executed the foregoing instrument for the purposes therein contained on
behalf of the foregoing entity.

 

Witness my hand and seal, this the ________ day of _____________________, 2014.

 

 

 

 

 

NOTARY PUBLIC

 

 

 

EXHIBIT “D”

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EXHIBIT “E”

Form of General Assignment

ASSIGNMENT AND ASSUMPTION
OF LEASES, CONTRACTS AND APPROVALS

THIS ASSIGNMENT AND ASSUMPTION OF LEASES, CONTRACTS AND APPROVALS (this
“Assignment”) is made as of the _____ day of __________________, 2014, by and
between VILLAGES AT SPRING HILL, L.P., a Tennessee limited partnership
(“Assignor”), and _________________________, a Delaware limited liability
company (“Assignee”).

W I T N E S S E T H:

For good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee hereby agree as follows:

1.Assignor hereby sells, transfers, assigns and conveys to Assignee the
following:

(a)All right, title and interest of Assignor in and to all leases and occupancy
agreements relating to the Property, including, without limitation, those
certain leases described on Exhibit A attached hereto and made a part hereof
(collectively, the “Leases”), relating to the leasing of space in or on that
certain land and improvements located in the County of Maury, State of
Tennessee, more particularly described in Exhibit B attached hereto (the
“Property”), and all of the rights, interests, benefits and privileges of the
lessor thereunder, and all prepaid rents and security and other deposits held by
Assignor under the Leases and not credited to Assignee under the Purchase
Agreement (defined below) or credited or returned to tenants; but subject to all
terms, conditions, reservations and limitations set forth in the Leases.

(b)To the extent assignable, all right, title and interest of Assignor in and to
those certain contracts set forth on Exhibit C attached hereto and made a part
hereof, and all warranties, guaranties, indemnities and claims (including,
without limitation, for workmanship, materials and performance) and which exist
or may hereafter exist against any contractor, subcontractor, manufacturer or
supplier or laborer or other services relating thereto (collectively, the
“Contracts”).

(c)To the extent assignable, all right, title and interest of Assignor in and to
all building permits, certificates of occupancy, and other certificates,
permits, licenses and governmental approvals relating to the design,
construction, ownership, occupancy, use, management, operation, maintenance or
repair of the Property, including, without limitation, those identified on
Exhibit D attached hereto and made a part hereof (collectively, the “Approvals”)
and any plans, specifications, studies, reports or surveys relating to the
Property.

2.This Assignment is given pursuant to that certain Purchase and Sale Agreement
and Joint Escrow Instructions (as amended, the “Purchase Agreement”) dated as
of April 7, 2014, between Assignor and Assignee’s predecessor-in-interest,
steadfast ASSET HOLDINGS,

EXHIBIT “E”

Page 1

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inc., a California corporation, providing for, among other things, the
conveyance of the Leases, the Contracts and the Approvals.

3.It is specifically agreed between Assignor and Assignee that Assignor shall
remain liable for the performance of the obligations to be performed by Assignor
under the Leases and Contracts which were required to be performed prior to (but
not from and after) the date hereof.

4.Assignee hereby assumes the covenants, agreements and obligations of Assignor
as landlord or lessor under the Leases which are required to be performed from
and after the date of this Assignment, and Assignee further assumes all
liability of Assignor for the proper refund or return of the security deposits
if, when and as required by the Leases, but only to the extent Assignee obtained
a credit against the Purchase Price for such security deposit.  Assignee hereby
assumes the covenants, agreements and obligations of Assignor under the
Contracts which are applicable to the period and required to be performed from
and after the date of this Assignment, but not otherwise.

5.If either Assignee or Assignor, or their respective successors or assigns,
file suit to enforce the obligations of the other party under this Assignment,
the prevailing party shall be entitled to recover the reasonable fees and
expenses of its attorneys.

6.This Assignment may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Assignment.  The terms, covenants and
conditions hereof shall inure to the benefit of and be binding upon the
respective parties hereto, their heirs, executors, administrators, successors
and assigns.  Any alteration, change or modification of or to this Assignment,
in order to become effective, must be made in writing and in each instance
signed on behalf of each party to be charged.  No provision of this Assignment
that is held to be inoperative, unenforceable or invalid shall affect the
remaining provisions, and to this end all provisions of this Agreement shall be
severable.  This Assignment shall be governed by the laws of the State of
Tennessee.

EXHIBIT “E”

Page 2

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IN WITNESS WHEREOF, the parties have executed this Assignment as of the date
first above written.

 

 

 

ASSIGNOR:

 

 

 

VILLAGES AT SPRING HILL, L.P., a Tennessee limited partnership

 

 

 

By:

GO-Tenn, Inc., a Tennessee corporation,

 

 

its general partner

 

 

 

 

By:

 

 

 

 

Larry A. Atema,

 

 

 

Assistant Secretary

 

 

 

 

 

ASSIGNEE:

 

,

 

a

 

 

By:

 

 

Name:

 

 

Title:

 

 

Exhibit ALeases

Exhibit BDescription of the Property

Exhibit CContracts

 

EXHIBIT “E”

Page 3

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EXHIBIT “F”

Form of Bill of Sale

BILL OF SALE

Know all men by these presents, that VILLAGES AT SPRING HILL, L.P., a Tennessee
limited partnership (“Grantor”), for and in consideration of the sum of ten
dollars and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, does bargain, sell, grant, transfer, assign,
and convey to _________________________, a Delaware limited liability company
(“Grantee”) all of its right, title, and interest, if any, in and to any and all
(i) tangible personal property owned by Grantor and now at, in or upon or used
in connection with the property commonly known as Villages at Spring Hill,
located in the City of Spring Hill, County of Maury and State of Tennessee
(“Property”), and more particularly described on Exhibit A attached hereto,
including without limitation the tangible personal property listed on Schedule 1
attached hereto, and (ii) intangible personal property owned by Grantor in
connection with or arising out of the ownership of the Property. 

Grantor is selling and Grantee is purchasing the Property “AS IS WHERE IS” with
all faults except as provided in that certain Purchase and Sale Agreement and
Joint Escrow Instructions dated as of April 7, 2014 between Grantor and
Grantee’s predecessor-in-interest, steadfast ASSET HOLDINGS, inc., a California
corporation.

IN WITNESS WHEREOF, Grantor has executed this Bill of Sale as of the ____ day of
___________________, 2014.

 

 

 

VILLAGES AT SPRING HILL, L.P., a Tennessee limited partnership

 

 

 

 

 

By:

GO-Tenn, Inc., a Tennessee corporation,

 

 

its general partner

 

 

 

 

 

By:

 

 

 

 

Larry A. Atema,

 

 

 

Assistant Secretary

EXHIBITS:

A - Legal Description

SCHEDULES:

1 – Tangible Personal Property

EXHIBIT “F”

Page 1

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Exhibit A

Legal Description

 

 

EXHIBIT “F”

Page 2

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EXHIBIT “G”

Form of Non-Foreign Certificate

CERTIFICATE OF NON-FOREIGN STATUS

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S.
real property interest must withhold tax if the transferor is a foreign
person.  To inform _________________________, a Delaware limited liability
company (“Transferee”), that withholding of tax is not required upon the
disposition of a U.S. real property interest by VILLAGES AT SPRING HILL, L.P.,
a Tennessee limited partnership (“Transferor”), the undersigned hereby certifies
to Transferee the following on behalf of Transferor:

 

1.Transferor is not a foreign corporation, foreign partnership, foreign trust,
or foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);

2.Transferor’s U.S. employer identification number is _____________; and

3.Transferor’s office address is _________________________________________.

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

Under penalties of perjury, the undersigned declares that the undersigned has
examined this certification and to the best of the undersigned’s knowledge and
belief it is true, correct and complete, and the undersigned further declares
that the undersigned has authority to sign this document on behalf of
Transferor.

Dated as of ____________________, 2014.

 

 

 

VILLAGES AT SPRING HILL, L.P., a Tennessee limited partnership

 

 

 

By:

GO-Tenn, Inc., a Tennessee corporation, its general partner

 

 

 

 

 

By:

 

 

 

 

Larry A. Atema,

 

 

 

Assistant Secretary

 

EXHIBIT “G”

Page 1 of 1

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STATE OF ___________________ )

ss.

COUNTY OF _______________ )

 

On _______________, before me, ______________________________, a Notary Public
personally appeared ______________________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of
_________________ that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

___________________________

Notary Public(SEAL)

 

 

EXHIBIT “E”

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EXHIBIT “H”

Form of Tenant Notice

 

[**DATE**]

 

 

TO:

All Valued Residents of [**COMMUNITY NAME**]

 

Re:Notice of Lease Assignment and Transfer of Security Deposit

 

This letter is to notify you that the property commonly known as [**COMMUNITY
NAME**], [**ADDRESS**] (“Property”) has this date been sold and the ownership
transferred.

 

In connection with this sale, all of the interest of the lessor under your lease
of space in the Property, together with your security deposit, have been
transferred to the new owner.  You are hereby notified that, from and after the
date hereof and until further notice, all future payments under your lease
should be made payable to [**COMMUNITY NAME**] and mailed to [**COMMUNITY
LEASING OFFICE ADDRESS**].  In addition, all questions or other matters
regarding your lease should be directed to the property manager at [**COMMUNITY
LEASING OFFICE PHONE NUMBER**].

Thank you for your cooperation.

 

 

 

Very truly yours,

 

 

 

VILLAGES AT SPRING HILL, L.P., a Tennessee limited partnership

 

 

 

By:

 

 

Name:

 

 

Its:

 

 

 

 

 

 

a(n)

 

 

 

 

 

By:

 

 

Name:

 

EXHIBIT “H”

Page 1 of 1

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Its:

 

 

 

11679284.1

EXHIBIT “J”

Page 2 of 2

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SCHEDULE 1

 

LEASES

 

[Attached]

 

[INTENTIONALLY OMITTED]

 

SCHEDULE 1

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SCHEDULE 2

 

CONTRACTS

 

[Attached]

 

[INTENTIONALLY OMITTED]

11679284.1

SCHEDULE 2

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SCHEDULE 7.1.8

LITIGATION SCHEDULE

See Attached.

[INTENTIONALLY OMITTED]

 

 

{10267532.1}

 

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