Exhibit 10.196

 

 

 

PURCHASE AND SALE AGREEMENT

 

BETWEEN EACH OF

 

SH 23HUNDRED TIC, LLC

a Tennessee limited liability company

 

BGF 23HUNDRED, LLC

a Delaware limited liability company

 

AND

 

23HUNDRED, LLC

a Delaware limited liability company,

 

as tenants-in-common,

 

AS SELLER,

 

AND

 

SENTINEL ACQUISITIONS CORP.

a Delaware corporation

 

AS PURCHASER

 

As of December 10, 2014

 

 

 

23Hundred at Berry Hill Berry Hill, Tennessee

 

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Table of Contents

 

    Page       Article 1 PURCHASE AND SALE 1 1.1 Agreement of Purchase and Sale
1 1.2 Property Defined 3 1.3 Permitted Exceptions 3 1.4 Purchase Price 3 1.5
Payment of Purchase Price 3 1.6 Earnest Money 3 Article 2 TITLE AND SURVEY 4 2.1
Title Examination; Commitment for Title Insurance 4 2.2 Survey 4 2.3 Title
Objections; Cure of Title Objections 4 2.4 Conveyance of Title 6 2.5 Pre-Closing
“Gap” Title/Survey Defects 7 Article 3 INSPECTION PERIOD 7 3.1 Right of
Inspection 7 3.2 Right of Termination 9 3.3 Confidentiality 10 Article 4 CLOSING
11 4.1 Time and Place 11 4.2 Seller’s Obligations at Closing 11 4.3 Purchaser’s
Obligations at Closing 13 4.4 Credits and Prorations. 14 4.5 Closing Costs 16
4.6 Conditions Precedent to Obligation of Purchaser 17 4.7 Conditions Precedent
to Obligation of Seller 18 4.8 Tax Deferred Exchange 19 Article 5
REPRESENTATIONS, WARRANTIES AND COVENANTS 19 5.1 Representations and Warranties
of Seller 19 5.2 Knowledge Defined 24 5.3 Survival of Seller’s Representations
and Warranties 24 5.4 Covenants of Seller 24 5.5 Representations and Warranties
of Purchaser 26 5.6 Survival of Purchaser’s Representations and Warranties 28
5.7 Covenants of Purchaser 29 Article 6 DEFAULT 29 6.1 Default by Purchaser 29
6.2 Default by Seller 30 6.3 Notice of Default; Opportunity to Cure 30 6.4
Recoverable Damages 30 Article 7 RISK OF LOSS 31

 

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7.1 Damage 31 7.2 Definition of Major Damage 32 Article 8 COMMISSIONS 32 8.1
Broker’s Commission 32 8.2 Representation and Indemnity 32 8.3 Survival 33
Article 9 DISCLAIMERS AND WAIVERS 33 9.1 No Reliance on Documents 33 9.2
Disclaimers 34 9.3 Certain Definitions 36 9.4 Effect and Survival of Disclaimers
36 Article 10 ESCROW AGENT 36 10.1 Investment of Earnest Money 36 10.2 Payment
on Demand 36 10.3 Exculpation of Escrow Agent 37 10.4 Stakeholder 37 10.5
Interest 37 10.6 Execution by Escrow Agent 37 Article 11 MISCELLANEOUS 38 11.1
Public Disclosure 38 11.2 Assignment 38 11.3 Notices 38 11.4 Modifications 40
11.5 Calculation of Time Periods 40 11.6 Successors and Assigns 41 11.7 Entire
Agreement 41 11.8 Further Assurances 41 11.9 Counterparts 41 11.10 Severability
41 11.11 Applicable Law 41 11.12 No Third Party Beneficiary 41 11.13 Employees
42 11.14 Schedules 42 11.15 Captions 42 11.16 Construction 42 11.17 Termination
of Agreement 42 11.18 Survival 43 11.19 Time of Essence 43 11.20 Covenant Not to
Record 43 11.21 Limitation of Seller’s Liability 43 11.22 JURY WAIVER 43 11.23
Limitation of Purchaser’s Liability 43 11.24 Attorneys’ Fees. 43 Article 12
SPECIAL PROVISION REGARDING CONDOMINIUM 44 12.1 Condominium Conversion Agreement
44

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of December 10,
2014 (the “Effective Date”), by and between each of SH 23HUNDRED TIC, LLC, a
Tennessee limited liability company (“Stonehenge”), BGF 23HUNDRED, LLC, a
Delaware limited liability company (“BR1”), and 23HUNDRED, LLC, a Delaware
limited liability company (“BR2;” Stonehenge, BR1 and BR2 are sometimes referred
to collectively herein as “Seller”), and SENTINEL ACQUISITIONS CORP., a Delaware
corporation (“Purchaser”). FIRST AMERICAN TITLE INSURANCE COMPANY (“Escrow
Agent”)

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

 

In consideration of the mutual covenants and agreements contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE 1

 

PURCHASE AND SALE

 

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

 

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

 

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

 

(c)          the buildings, structures, facilities, installations, fixtures and
other improvements of every kind on the Land, including specifically, without
limitation, those certain buildings (which include 266 residential apartment
units) having a street address of 2300 Franklin Pike, Nashville, Tennessee
37204, and commonly known as 23Hundred at Berry Hill (the property described in
this clause (c) being herein referred to collectively as the “Improvements;” and
the Land, the Related Rights and the Improvements being hereinafter sometimes
collectively referred to as the “Real Property”);

 

 

 

 

(d)          all of Seller’s right, title and interest in, to and under all
tangible personal property upon the Land but not otherwise or within the
Improvements, including specifically, without limitation, appliances, equipment,
furniture, furnishings, carpeting, draperies and curtains, tools and supplies,
and other items of tangible personal property owned by Seller and used
exclusively in connection with the ownership, use, maintenance or operation of
the Land and the Improvements, and including those items of tangible personal
property identified on Schedule 1.1(d), attached hereto and incorporated herein
by this reference, but excluding (i) cash and cash equivalents (except to the
extent prorated at Closing), and any reserves or other deposits funded or made
in connection with any financing encumbering the Property, (ii) computer
software and computer files, (iii) personal property owned by tenants under the
Leases, (iv) any equipment installed by, or in connection with, any
telecommunication or utility provider and which is owned by any party other than
Seller (excluding any reversionary interest that Seller may have therein which
shall be assigned to Purchaser to the extent assignable), (v) any items owned by
employees of Seller or any property manager, (vi) any items leased to Seller,
and (vii) all brochures, advertising copy, promotional materials, manuals,
reports, portfolios, binders, training materials and other items on which the
name “Stonehenge” and/or “Bluerock” appears (the property described in this
clause (d), other than the excluded items, being herein referred to collectively
as the “Tangible Personal Property”). Seller agrees to cooperate reasonably, if
feasible, with Purchaser to transfer any property-specific computer data files
in electronic format to Purchaser provided Seller is not in breach of any
license agreement or other agreement with respect to the transfer of such data.

 

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

 

(f)          all of Seller’s right, title and interest in, to and under (i) the
Designated Service Contracts (as defined in Section 5.7(b) of this Agreement),
(ii) all freely assignable existing warranties and guaranties issued to or
inuring to the benefit of Seller in connection with the Improvements or the
Tangible Personal Property, (iii) all governmental permits, licenses and
approvals, if any, belonging to or inuring to the benefit of Seller and
pertaining to the Real Property or the Tangible Personal Property, but only to
the extent that such permits, licenses and approvals are freely assignable and
only to the extent that such permits, licenses and approvals relate to the Real
Property or the Tangible Personal Property as opposed to other property of
Seller or its affiliates; (iv) resident and tenant files for current residents
and tenants as of the Closing Date, (v) architectural and civil plans and
specifications (to the extent in Seller’s possession), (vi) other
non-confidential and non-proprietary records owned by Seller and used in
connection with the operation of the Real Property or any part thereof, and
located on-site as of the Closing Date; (vii) all rights to use the name
“23Hundred at Berry Hill” in connection with the Real Property; and (viii) all
freely assignable telephone numbers and website domain names associated with the
Real Property (the property described in this clause (f), other than the
excluded items, being sometimes herein referred to collectively as the
“Intangible Property”).

 

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

 

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

 

1.4           Purchase Price. Seller is to sell and Purchaser is to purchase the
Property for a purchase price of SIXTY ONE MILLION TWO HUNDRED THOUSAND and
NO/100 Dollars ($61,200,000.00). The Purchase Price, as adjusted by prorations
and adjustments as herein provided, shall be payable in full at Closing in cash
by wire transfer of immediately available federal funds to a bank account of
Escrow Agent designated by Escrow Agent in writing to Purchaser prior to the
Closing (“Escrow Agent’s Account”), and, as adjusted by prorations and
adjustments as herein provided, shall be subsequently payable in full at Closing
in cash by wire transfer of immediately available federal funds to a bank
account designated by Seller in writing to Escrow Agent prior to the Closing.

 

1.5           Earnest Money.

 

(a)          On the Effective Date, Purchaser shall deposit with Escrow Agent
the sum of SIX HUNDRED TWELVE THOUSAND AND NO/100 Dollars ($612,000.00) by wire
transfer of immediately available funds the “Initial Earnest Money”) in
accordance with the wiring instructions attached hereto as Schedule 1.5.

 

(b)          If Purchaser sends Seller the “Notice to Proceed” (as defined
below) on or prior to the “Inspection Date” (as defined below), then on or
before the Inspection Date, Purchaser shall deposit with Escrow Agent the
additional sum of SIX HUNDRED TWELVE THOUSAND and NO/100 Dollars ($612,000.00)
(the “Additional Earnest Money”) by wire transfer of immediately available funds
in accordance with the wiring instructions attached hereto as Schedule 1.5. The
Initial Earnest Money and the Additional Earnest Money, along with any and all
interest accrued thereon are herein collectively referred to as the “Earnest
Money.”

 

(c)          The Earnest Money shall be held by Escrow Agent pending Closing and
shall be applied to the Purchase Price on the Closing Date and paid to Seller
through the escrow process outlined herein. The Earnest Money shall be fully
refundable to Purchaser if Purchaser elects or is deemed to have elected to
terminate this Agreement at any time on or before the Inspection Date. If this
Agreement is terminated after the Inspection Date, the Escrow Agent shall
deliver the Earnest Money in accordance with the applicable terms of this
Agreement pertaining to such termination.

 

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

 

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

 

ARTICLE 2

 

TITLE AND SURVEY

 

2.1          Title Examination; Commitment for Title Insurance. Purchaser
acknowledges that, prior to the Effective Date, Seller has delivered to
Purchaser a copy of Seller’s existing title insurance policy for the Real
Property. Within two (2) days after the Effective Date, Seller shall order, at
Seller’s cost, a commitment for title insurance (the “Title Commitment”)
covering the Real Property from Waller Lansden Dortch & Davis, LLP, as agent for
First American Title Insurance Company (the “Title Company”).

 

2.2          Survey. Purchaser acknowledges that, prior to the Effective Date,
Seller has delivered to Purchaser a survey of the Real Property (the “Existing
Survey”). Purchaser shall promptly order, at Purchaser’s sole cost and expense,
an update to the Existing Survey in accordance with ALTA standards customary and
typical for institutional buyers of real estate similar to the Property (the
“Updated Survey”). For purposes of the Deed to be delivered to Purchaser at the
Closing, the legal description of the Property shall be the legal description
attached hereto as Schedule 1.1(a). If the legal description for the Real
Property on the Updated Survey differs from the legal description on Schedule
1.1(a), Seller shall execute and deliver to Purchaser at Closing a Quitclaim
Deed, without representation or warranty that utilizes the legal description set
forth on the Updated Survey (the “Quitclaim Deed”).

 

2.3          Title Objections; Cure of Title Objections.

 

(a)          Purchaser or its attorneys shall have until the date that is seven
(7) days after Purchaser’s receipt of the Title Commitment (the “Title Objection
Deadline”) to notify Seller and its attorneys, in writing, of such objections as
Purchaser may have to the Title Commitment (including the title exception
documents referred to therein) or the Existing Survey. Any item contained in the
Title Commitment, any matter shown on the Existing Survey to which Purchaser
does not object on or before the Title Objection Deadline shall be deemed a
“Permitted Exception.”

 

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(b)          In the event Purchaser shall notify Seller of objections to title
or to matters shown on the Existing Survey on or before the Title Objection
Deadline, Seller shall have the right, but not the obligation, to cure such
objections. On or before the fifth (5th) day following Seller’s receipt of
Purchaser’s notice of objections, Seller or its attorneys shall notify Purchaser
in writing whether Seller elects to attempt to cure such objections (and
Seller’s failure to provide such a notice shall be deemed an election by Seller
not to cure any such objection). In all instances, Seller shall have the right
but not the obligation to cure objections to title and survey raised by
Purchaser hereunder, other than those items described in Section 2.3(d) hereof.
Seller specifically agrees and acknowledges, however, that if Seller elects to
attempt to cure an objection raised by Purchaser, and then fails to cure such
objection, then Seller’s failure to cure shall constitute a Seller default under
this Agreement. If Seller elects to attempt to cure, and provided that Purchaser
shall not have terminated this Agreement in accordance with Section 3.2 hereof,
then Seller shall use commercially reasonable efforts to attempt to remove,
satisfy or cure the same. If Seller elects (or is deemed to have elected) not to
cure any objections specified in Purchaser’s notice, or if Seller notifies
Purchaser of Seller’s intent to cure any objection and thereafter Seller fails
or is unable to effect a cure prior to Closing (or any date to which the Closing
has been extended), then in either such case Purchaser shall have the right to
elect one, but not both, of the following options, which election must in each
case be made within the time period provided in paragraph (c) below:

 

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

 

(ii)         to terminate this Agreement by sending written notice thereof to
Seller, and upon delivery of such notice of termination, this Agreement shall
terminate, the Earnest Money shall be immediately paid to Seller, and thereafter
neither party hereto shall have any further rights, obligations or liabilities
hereunder except to the extent that any right, obligation or liability set forth
herein expressly survives termination of this Agreement.

 

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

 

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(d)          Notwithstanding anything contained herein to the contrary, Seller
shall be obligated at Closing to discharge, regardless of whether Purchaser
objects to same, (i) all Mortgages encumbering the Property or any portion
thereof, and (ii) all liens and encumbrances created on or after the Effective
Date by Seller or with the knowledge or consent of Seller, (iii) all mechanic’s
liens relating to matters that have been caused by Seller or parties acting on
behalf of Seller, (iv) all judgment liens, other statutory liens and other
monetary liens of a liquidated amount encumbering the Property or any portion
thereof, up to a maximum aggregate amount of $250,000.00 (collectively,
“Monetary Liens”). The term “Mortgage” as used herein includes any mortgage,
deed of trust, deed to secure debt and similar security instrument securing an
indebtedness of Seller and encumbering the Property or any portion thereof; the
terms “discharge” and “discharged” as used herein include compliance with a
statutory bonding procedure that has the legal effect of removing the Mortgage
or Monetary Lien as a lien on the Property or otherwise allows such item to be
removed (in a manner reasonably acceptable to Purchaser) from the title
exceptions in the Title Policy (as defined below).

 

2.4          Conveyance of Title. At Closing, Seller shall convey and transfer
the Property to Purchaser. The Owner’s Policy of Title Insurance (the “Title
Policy”) covering the Real Property, in the full amount of the Purchase Price,
and the Deed delivered by Seller to Purchaser at Closing shall be subject to the
following matters, which shall be deemed to be Permitted Exceptions:

 

(a)          the rights of tenants under the Leases described in the Rent Roll
and any new Leases entered into between the Effective Date and Closing and (if
required) approved by Purchaser in accordance with the terms of this Agreement;

 

(b)          the lien of all ad valorem real estate taxes and assessments not
yet due and payable as of the Closing Date (as defined in Section 4.1 hereof),
subject to adjustment as herein provided;

 

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

 

(d)          all matters reflected on the Title Commitment to which Purchaser
does not object or Seller does not agree to cure pursuant to Section 2.3;

 

(e)          matters deemed to be Permitted Exceptions hereunder, including, but
not limited to, the Condominium Conversion Agreement; and

 

(f)          additional items, if any, not objected to by Purchaser pursuant to
Section 2.5 hereof.

 

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2.5           Pre-Closing “Gap” Title/Survey Defects. Whether or not Purchaser
shall have furnished to Seller any notice of title objections pursuant to the
foregoing provisions of this Agreement, Purchaser may, at or prior to Closing,
notify Seller in writing of any objections to title or survey matters first
raised by the Title Company or the surveyor and first arising between (a) the
effective date of the Title Commitment or the Existing Survey and (b) the
Closing Date; provided, however, that Purchaser must notify Seller of any such
objections within five (5) days of Purchaser’s first receipt of the updated
Title Commitment, the Updated Survey or other document, whichever first provides
notice of the condition giving rise to any such objection, failing which,
Purchaser shall be deemed to have waived its right to object to any such items.
With respect to any objections to title or survey matters set forth in such
notice, Seller shall have the same option to cure and Purchaser shall have the
same option to accept title subject to such matters or to terminate this
Agreement as those which apply to any notice of objections made by Purchaser on
or before the Title Objection Deadline. For the avoidance of doubt, any matter
first appearing on the Updated Survey (i.e. even if such matter is reflected in
the Title Commitment first delivered to Purchaser by Seller to the extent not
shown on the Existing Survey) shall be a matter to which Purchaser shall have
the right to object to pursuant to this Section 2.5.

 

ARTICLE 3

 

INSPECTION PERIOD

 

3.1          Right of Inspection.

 

(a)          Within three (3) business days from the Effective Date, Seller
shall deliver or otherwise make available to Purchaser copies of those items
listed on Schedule 3.1 attached hereto (collectively, “Seller’s Deliveries”), to
the extent that such documents are in Seller’s possession or under Seller’s
control and have not already been delivered to Purchaser.

 

(b)          Beginning on the Effective Date and continuing thereafter so long
as this Agreement remains in full force and effect, Purchaser shall have the
right to make a physical inspection of the Property and to examine at such place
or places at the Property, in the offices of the property manager or elsewhere
as the same may be located, any operating files maintained by Seller or its
property manager in connection with the leasing, maintenance and/or management
of the Property, including, without limitation, the Leases, lease files, service
contracts, bills, invoices, receipts and other general records relating to the
income and expenses of the Property, correspondence, surveys, plans and
specifications, warranties for services and materials provided to the Property
and similar materials, but excluding materials not directly related to the
leasing, maintenance, and/or management of the Property such as Seller’s
internal memoranda, financial projections, insurance policies, operating
budgets, appraisals, accounting and tax records and similar proprietary or
confidential information (the “Inspections”).

 

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(c)          Upon forty-eight (48) hours’ prior telephonic notice to Seller via
Todd Jackovich (615-864-4291), Purchaser and its agents, representatives,
contractors and consultants (collectively the “Purchaser Inspection Parties”)
shall have the right to enter upon the Property during regular business hours
for the purpose of conducting such Inspections as Purchaser may reasonably
require; provided that Seller shall have the opportunity to have one of its
representatives accompany the Purchaser Inspection Parties on each such entry,
and provided further that Purchaser shall not conduct any invasive testing
(including, without limitation, soil borings, test pits, ground water testing,
or Phase II or Phase III environmental testing), without Seller’s approval in
its sole discretion. Any and all such Inspections shall be done at Purchaser’s
sole cost and expense. The Inspections shall be conducted in accordance with
standards customarily employed in the industry and in compliance with all
governmental laws, rules and regulations. Following each such entry by the
Purchaser Inspection Parties with respect to the Inspections, Purchaser shall
promptly restore, or cause to be restored, the Property to its original
condition as existed immediately prior to any such Inspections. Purchaser shall
not have the right to submit any samples or other materials to any testing
laboratory or similar facility without obtaining the prior written consent of
Seller. Notwithstanding the foregoing, Purchaser shall have the right to test
for the presence of radon at the Property and submit radon samples to testing
laboratories or other similar facilities without Seller’s consent.

 

(d)          Prior to conducting any physical inspection or testing at the
Property, Purchaser shall obtain, and during the period of such inspection or
testing shall maintain, at their expense: (i) commercial general liability
(“CGL”) insurance, issued on a form at least as broad as Insurance Services
Office (“ISO”) Commercial General Liability Coverage “occurrence” form CG 00 01
10 01 or another “occurrence” form providing equivalent coverage, including
contractual liability coverage with respect to Purchaser’s obligations under
this Agreement and personal injury liability coverage, with limits of not less
than Three Million and No/100 Dollars ($3,000,000) for any one occurrence and
Five Million and No/100 Dollars ($5,000,000) in the aggregate; (ii)
comprehensive automobile liability insurance (covering any automobiles owned or
operated by Purchaser or Purchaser’s Representatives) issued on a form at least
as broad as ISO Business Auto Coverage form CA 00 01 07 97 or other form
providing equivalent coverage; (iii) worker’s compensation insurance; and (iv)
employer’s liability insurance. Such automobile liability insurance shall be in
an amount not less than One Million and No/100 Dollars ($1,000,000) for each
accident. Such worker’s compensation insurance shall carry minimum limits as
defined by the law of the jurisdiction in which the Property is located (as the
same may be amended from time to time). Such employer’s liability insurance
shall be in an amount not less than One Million and No/100 Dollars ($1,000,000)
for each accident, One Million and No/100 Dollars ($1,000,000) disease- policy
limit, and One Million and No/100 Dollars ($1,000,000) disease-each employee.
Seller, and its property manager, shall be covered as additional insureds on the
CGL and automobile liability insurance policies with respect to liability
arising out of the named insured’s acts or omissions relating to the Property.
The insurer and the terms and conditions of all the foregoing policies shall be
reasonably acceptable to Seller. Prior to making any entry upon the Property,
Purchaser shall furnish to Seller a certificate of insurance evidencing the
foregoing coverages, which certificate of insurance shall be in form and
substance reasonably satisfactory to Seller.

 

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(e)          Purchaser shall indemnify, hold harmless and defend Seller, its
general partner and their respective officers, directors, employees and
shareholders from and against any and all claims, demands, causes of action,
liabilities, losses, costs, damages and expenses (including reasonable
attorneys’ fees and expenses and court costs incurred in defending any such
claim or in enforcing this indemnity) of whatsoever nature (for purposes of this
Section 3.1, individually a “Claim” and collectively, “Claims”) that may be
incurred by Seller or any other indemnified party and caused by and arising
solely out of the acts or omissions of Purchaser and its agents,
representatives, contractors and consultants, or any of them, including but not
limited to Claims arising out of or in connection with personal injury or death
of persons, loss, destruction or damage to property, or liens or claims of lien
filed against the Property. Notwithstanding the foregoing, Purchaser shall have
no liability for pre-existing conditions merely discovered by any inspection of
the Real Property, except to the extent aggravated by Purchaser or Claims
resulting from the gross negligence or wrongdoing of Seller and its affiliates
and employees. This Section 3.1(e) shall survive Closing or any termination of
this Agreement.

 

3.2          Right of Termination. Seller agrees that in the event Purchaser
determines, in Purchaser’s sole discretion, that it does not wish to acquire the
Property for any reason or no reason, then Purchaser shall have the right to
terminate this Agreement by giving written notice of such termination to Seller
on or before 5:00 p.m. (Nashville, Tennessee time) on December 15, 2014 (the
“Inspection Date”). Upon any such termination of this Agreement pursuant to
Purchaser’s rights under this Section 3.2, the entire Earnest Money shall be
promptly disbursed to Purchaser in accordance with Section 10.2 (minus the costs
of any unpaid fees or expenses relating to the Updated Survey, which shall be
paid to the surveyor), and Purchaser and Seller shall have no further rights and
obligations hereunder except those which expressly survive termination of this
Agreement. If Purchaser elects to proceed with the purchase of the Property
hereunder, Purchaser shall send written notice of its election (the “Notice to
Proceed”) prior to the expiration of the Inspection Period, following which
Purchaser shall have no further right to terminate this Agreement pursuant to
this Section 3.2, and the Earnest Money shall become non- refundable to
Purchaser except as otherwise specifically provided herein. If Purchaser fails
to timely send the Notice to Proceed prior to the expiration of the Inspection
Period, Purchaser shall be deemed to have terminated this Agreement, this
Agreement shall automatically terminate, the Escrow Agent shall promptly deliver
the Earnest Money to Purchaser and the parties shall have no further rights or
obligations hereunder except those which expressly survive termination of this
Agreement. Time is of the essence with respect to the provisions of this Section
3.2. The period commencing on the Effective Date and ending at 5:00 p.m.
(Nashville, Tennessee time) on the Inspection Date is sometimes referred to
herein as the “Inspection Period.”

 

9

 

 

3.4          Confidentiality.

 

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

 

(b)          Until the Closing, the existence and contents of this Agreement,
the negotiations of parties with respect to the possible sale and purchase of
the Property and any matters disclosed by any Inspections undertaken by
Purchaser with respect to the Property and any additional information furnished
by Seller to Purchaser from time to time (including, without limitation, the
Deliveries) shall be kept confidential and shall not be disclosed to any third
parties without the consent of both parties hereto. Each party may, however,
disclose such contents as are (i) expressly required under applicable laws
(which shall include the right of Seller to make securities filings) or (ii)
expressly required by appropriate written judicial order, subpoena or demand
issued by a court of competent jurisdiction (but will, to the extent
practicable, first give the other party written notice of the requirement and
will cooperate with the other party so that the other party, at its expense, may
seek an appropriate protective order and, in the absence of a protective order,
the party from which disclosure is required may disclose only such content as
may be necessary to avoid any penalty, sanction, or other material adverse
consequence, and the disclosing party will use reasonable efforts to secure
confidential treatment of any such content so disclosed).

 

(c)          Until the Closing, no advertisement or other publicity concerning
this transaction shall be made or disseminated by either party at any time
without the review and approval of both parties hereto. Both parties recognize
the need to disclose, and agree to the disclosure of, certain aspects of this
transaction to their respective lenders, investors, accountants, attorneys and
other consultants. Neither party is responsible for the actions of third parties
as to the disclosure of confidential information, but each party agrees to
inform their lender, investors, accountants, attorneys and other consultants of
the confidentiality of this transaction and all such other information and, upon
request of the other, agrees to use commercially reasonable efforts to obtain
confidentiality agreements from such third parties. Notwithstanding the
foregoing of this Section 3.3, either of Seller or Purchaser (or both) may issue
a press release describing the transaction if and when the Property is actually
conveyed, provided that any such press release must be approved in advance by
the other party, such approval to not be unreasonably withheld or delayed.

 

10

 

 

(d)          If this Agreement is terminated, Purchaser shall, within seven (7)
days from the date of Seller’s request, return or cause to be returned to Seller
all Deliveries and, if requested by Seller and upon reimbursement of Purchaser’s
actual costs therefor, deliver to Seller copies of all third party reports,
together with such reliance letters and/or assignments as Seller may reasonably
request. The confidentiality provisions of this Section 3.3 shall survive the
termination of this Agreement, but shall not survive the Closing.

 

ARTICLE 4

 

CLOSING

 

4.1          Time and Place. The consummation of the transaction contemplated
hereby (“Closing”) shall be occur through escrow arrangements reasonably
acceptable to the parties with the Escrow Agent at or before 2:00 p.m.
Nashville, Tennessee time on or before January 14, 2015. At Closing, Seller and
Purchaser shall perform the obligations set forth in, respectively, Section 4.2
and Section 4.3. The Closing may be held at such other place or such earlier
time and date as Seller and Purchaser shall mutually approve in writing. The
date on which the Closing is scheduled to occur hereunder (or, if earlier, the
date on which Closing occurs) is sometimes referred to herein as the “Closing
Date.” The parties will endeavor to “pre-close” on the business day prior to the
Closing Date, so as to allow the wire transfers of the Purchase Price to occur
at the opening of business on the Closing Date or as promptly thereafter as
practical, provided that the foregoing shall not require Purchaser to fund the
transaction contemplated herein until the Closing Date.

 

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

 

(a)          deliver to Purchaser a duly executed special warranty deed in the
form attached hereto as Schedule 4.2(a) and by this reference made a part
hereof, conveying the Real Property to Purchaser subject only to the Permitted
Exceptions (the “Deed”) and, if requested by Purchaser pursuant to Section 2.2,
the Quitclaim Deed;

 

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

 

11

 

 

(c)          join with Purchaser to execute a notice (the “Tenant Notice”) in
form and content reasonably satisfactory to Purchaser and Seller, which
Purchaser shall send a copy thereof to each tenant under each of the Leases
informing such tenant of the sale of the Property and of the assignment to
Purchaser of Seller’s interest in, and obligations under, the Leases (including,
if applicable any security deposits) and directing that all rent and other sums
payable after the Closing under each such Lease shall be paid as set forth in
the notice.

 

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

 

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

 

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

 

(g)          deliver to the Title Company a broker’s lien waiver and title
insurance affidavit, if required by the Title Company, duly executed by Seller
or a representative of Seller, in the form attached hereto as Schedule 4.2(g),
and addressing such other customary matters as may be reasonably requested by
the Title Company;

 

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

 

(i)          deliver to Purchaser possession and occupancy of the Property,
subject to the Permitted Exceptions, together with all keys for the Property in
the possession or control of Seller;

 

(j)          deliver to Purchaser two counterparts of the Condominium Conversion
Agreement, executed by Seller;

 

12

 

 

(k)          deliver to Escrow Agent an affidavit or other statement acceptable
to Escrow Agent providing the information necessary for the Escrow Agent to file
the Form 1099 required by the provisions of Section 6045(e) of the Code; and

 

(l)          deliver a closing statement evidencing the transaction contemplated
by this Agreement and such additional documents as shall be reasonably requested
by the Title Company or required to consummate the transaction contemplated by
this Agreement, including all necessary state, county, or local governmental
transfer tax forms or returns; provided, however, that in no event shall Seller
be required to indemnify the Title Company, Purchaser, or any other party
pursuant to any such documents, or undertake any other material liability not
expressly contemplated in this Agreement, unless Seller elects to do so in its
sole discretion.

 

4.3           Purchase r’s Obligations at Closin g. At Closing, Purchaser shall:

 

(a)          deliver to Escrow Agent the full amount of the Purchase Price (less
the Earnest Money and any interest accrued thereon), as increased or decreased
by prorations and adjustments as herein provided, prior to 2:00 p.m. (Nashville,
Tennessee time) on the Closing Date, in immediately available federal funds wire
transferred to Escrow Agent’s Account pursuant to Section 1.5 above, and deliver
to Escrow Agent instructions to immediately release the full amount of the
Purchase Price, as increased or decreased by prorations and adjustments as
herein provided, to Seller or its designees;

 

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

 

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

 

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

 

(e)          deliver to Seller two counterparts of the Condominium Conversion
Agreement, executed by Purchaser; and

 

13

 

 

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

 

4.4          Credits and Prorations.

 

(a)          All income and expenses in connection with the operation of the
Property shall be apportioned, as of 11:59 p.m. (Nashville, Tennessee time) on
the day prior to the Closing Date, as if Purchaser were vested with title to the
Property during the entire Closing Date, such that, except as otherwise
expressly provided to the contrary in this Agreement, Seller shall have the
benefit of income and the burden of expenses for the day preceding the Closing
Date and the Purchaser shall have the benefit of income and the burden of
expenses for the Closing Date and thereafter. Items (1)-(5) below will be
prorated at Closing utilizing the information known at that time. A post-closing
“true- up” shall take place within one hundred eighty (180) days of the Closing
Date to adjust the prorations of said items (1), (3), (4) and (5), if necessary,
and within a reasonable time to adjust the proration of said item (2), if
necessary. Such prorated items shall include, without limitation, the following:

 

(1)         rents, if any, based on the amount collected for the current month
and all prepaid rents for subsequent months. The term “rents” as used in this
Agreement includes all payments due and payable by, or received from, tenants
under the Leases other than refundable deposits, application fees, reimbursement
payments, and late charges (which refundable deposits shall be treated as set
forth in Section 4.4(b)(1), but such other amounts shall be retained by Seller);

 

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

 

(3)         payments or amounts due under the Designated Service Contracts.
Purchaser shall retain any bonus, rebates, concession or commission payments
received by Purchaser on or after Closing. Seller shall retain any signing bonus
or similar payments received by Seller before Closing;

 

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

 

14

 

 

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

 

(b)          Notwithstanding anything contained in the foregoing provisions:

 

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

 

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

 

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

 

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

 

15

 

 

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

 

(6)         Unpaid and delinquent rent and reimbursements collected by Seller
and Purchaser after the Closing Date shall be delivered as follows: (A) if
Seller collects any unpaid or delinquent rent or reimbursements for the
Property, Seller shall, promptly after the receipt thereof, deliver to Purchaser
any such rent or reimbursement which Purchaser is entitled to hereunder relating
to the Closing Date and any period thereafter, and (B) if Purchaser collects any
unpaid or delinquent rent or reimbursement from the Property, Purchaser shall,
promptly after the receipt thereof, deliver to Seller any such rent or
reimbursement which Seller is entitled to hereunder relating to the period prior
to the Closing Date. Seller and Purchaser agree that all rent and reimbursements
received by Seller or Purchaser after the Closing shall be applied first to
rentals and reimbursements owing to Purchaser for its period of ownership
(whether delinquent or otherwise) and then to delinquent rentals and
reimbursements, if any, owed to Seller for its period of ownership. For a period
of one hundred eighty (180) days following the Closing Date, Purchaser will use
commercially reasonable efforts to collect all rents and reimbursements in the
usual course of Purchaser’s operation of the Property, but Purchaser will not be
obligated to institute any lawsuit or other collection procedures to collect
delinquent rents or reimbursements. Notwithstanding the foregoing, Seller shall
have the sole right to collect rents and reimbursements, if any, which are
unpaid or delinquent as of Closing, from tenants who are no longer in occupancy
as of the Closing (and Purchaser shall promptly deliver any such rents and
reimbursements to Seller if received by Purchaser after Closing).

 

(7)         The provisions of this Section 4.4 shall survive Closing.

 

4.5          Closing Costs. Seller shall pay (a) the fees of any counsel
representing it in connection with this transaction, (b) the cost of the
Existing Survey provided by Seller (but not the cost of any update or revision
thereto), (c) the costs of curing all title objections for which Seller is
responsible under this Agreement, (d) the cost of the Title Commitment and the
premium for the Owner’s Title Policy (but excluding any endorsements thereto),
(e) the costs of recording all mortgage cancellations, (f) the costs of
recording the Deed and the Condominium Conversion Agreement, (g) any amounts
owed to Broker (as defined in Section 8.1) payable by Seller, and (h) one half
of Escrow Agent’s escrow fee. Purchaser shall pay (A) the fees of any counsel
representing Purchaser in connection with this transaction, (B) the premium for
any lender’s title insurance policy in connection with Purchaser’s acquisition
financing, if any, and any endorsements to the Title Policy or such lender’s
title policy (unless pursuant to Section 2.3 Seller expressly agrees in writing
to pay for the costs of endorsements necessary to cure any title objections of
Purchaser), (C) the cost of Purchaser’s inspections of the Property, (D) the
cost of the Updated Survey, including updates or revisions necessary to comply
with the requirements of Purchaser or its lender, (E) any mortgage or
intangibles tax in connection with Purchaser’s acquisition financing, if any,
(F) any State of Tennessee transfer taxes, and (G) one half of Escrow Agent’s
escrow fee. All other costs and expenses incident to this transaction and the
closing thereof shall be paid by the party incurring same.

 

16

 

 

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

 

(a)          Seller shall have performed all of its material obligations and
material covenants hereunder and shall have delivered to Purchaser all of the
items required to be delivered to Purchaser by Seller or Seller’s agents
pursuant to the terms of this Agreement, including, but not limited to, those
provided in Section 4.2;

 

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

 

(c)          The Title Company has irrevocably committed to issue an ALTA
Owner’s Policy of Title Insurance (subject to payment of the portion of the
premium, if any, that Purchaser is required to pay hereunder) with liability in
an amount equal to the Purchase Price (the “Title Policy”) showing the Real
Property vested in Purchaser (or Purchaser’s permitted assignee or nominee)
subject only to the Permitted Exceptions, the standard conditions set forth on
the policy jacket, and title exceptions, if any, resulting from documents
recorded by Purchaser at closing; provided, however, if the Title Company is
unwilling to irrevocably commit to issue such Policy for general reasons that
are not directly related to the particular facts and circumstances of the
transaction contemplated by this Agreement, then Purchaser shall accept such
Policy from any other nationally recognized title insurance company licensed to
do business in Tennessee chosen by Seller and reasonably acceptable to
Purchaser. For avoidance of doubt, the issuance of a signed marked title binder
or a pro forma title policy by the Title Company shall constitute the
satisfaction of the irrevocable commitment condition set forth in this Section
4.6(c); and

 

(d)          Purchaser shall have received an Updated Survey sufficient to cause
the Title Company to omit the standard survey exception from the Title Policy,
it being acknowledged that the Title Policy may contain an exception for
specific matters shown on the Updated Survey (subject to Purchaser’s right to
object to such specific matters, if applicable, pursuant to Section 2.5,
including the time periods set forth therein); provided, however,
notwithstanding anything contained herein to the contrary, Purchaser shall have
no right to terminate this Agreement pursuant to the final paragraph of this
Section 4.6 if the failure of this condition precedent is the result of
Purchaser’s failure to use commercially reasonable efforts to obtain the Updated
Survey. Purchaser covenants to order the Updated Survey, from the surveyor who
prepared the Existing Survey, within two (2) business days of its receipt of the
Title Commitment.

 

17

 

 

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

 

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

 

(a)          Purchaser shall have delivered to Escrow Agent the Purchase Price
as provided in Section 4.3(a).

 

(b)          Purchaser shall have delivered to Seller all of the material items
required to be delivered to Seller by Purchaser or Purchaser’s agents pursuant
to the terms of this Agreement, including but not limited to, those provided for
in Section 4.3.

 

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

 

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

 

18

 

 

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

 

ARTICLE 5

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

5.1          Representations and Warranties of Seller. Each of Stonehenge, BR1
and BR2, jointly and severally, hereby makes the following representations and
warranties to Purchaser as of the Effective Date. Such representations and
warranties are subject to (i) those matters, if any, disclosed in Seller’s
disclosure statement attached hereto as Schedule 5.1 and made a part hereof by
this reference (“Seller’s Disclosure Statement”) and (ii) the Permitted
Exceptions.

 

(a)          Organization and Authority.

 

(i)          Stonehenge has been duly organized and is validly existing and in
good standing as a limited liability company under the laws of the State of
Tennessee. Stonehenge has the full right and authority to enter into this
Agreement and to transfer its interest in the Property pursuant hereto and to
consummate or cause to be consummated the transactions contemplated herein. The
person signing this Agreement on behalf of Stonehenge is authorized to do so.
Neither the execution and delivery of this Agreement nor any other documents
executed and delivered, or to be executed and delivered, by Stonehenge in
connection with the transactions described herein, will violate any provision of
Stonehenge’s organizational documents or of any agreements, regulations, or laws
to or by which Stonehenge is bound. This Agreement has been, and each document
to be executed and delivered by Stonehenge at Closing shall have been as of
Closing, duly authorized, executed and delivered by Stonehenge, is a valid and
binding obligation of Stonehenge and is enforceable against Stonehenge in
accordance with its terms subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the rights of creditors
generally; and (B) the exercise of judicial discretion in accordance with
general principles of equity.

 

19

 

 

(ii)         BR1 has been duly organized and is validly existing and in good
standing as a limited liability company under the laws of the State of Delaware.
BR1 has the full right and authority to enter into this Agreement and to
transfer its interest in the Property pursuant hereto and to consummate or cause
to be consummated the transactions contemplated herein. The person signing this
Agreement on behalf of BR1 is authorized to do so. Neither the execution and
delivery of this Agreement nor any other documents executed and delivered, or to
be executed and delivered, by BR1 in connection with the transactions described
herein, will violate any provision of BR1’s organizational documents or of any
agreements, regulations, or laws to or by which BR1 is bound. This Agreement has
been, and each document to be executed and delivered by BR1 at Closing shall
have been as of Closing, duly authorized, executed and delivered by BR1, is a
valid and binding obligation of Stonehenge and is enforceable against BR1 in
accordance with its terms subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the rights of creditors
generally; and (B) the exercise of judicial discretion in accordance with
general principles of equity.

 

(iii)        BR2 has been duly organized and is validly existing and in good
standing as a limited liability company under the laws of the State of Delaware.
BR2 has the full right and authority to enter into this Agreement and to
transfer its interest in the Property pursuant hereto and to consummate or cause
to be consummated the transactions contemplated herein. The person signing this
Agreement on behalf of BR2 is authorized to do so. Neither the execution and
delivery of this Agreement nor any other documents executed and delivered, or to
be executed and delivered, by BR2 in connection with the transactions described
herein, will violate any provision of BR2’s organizational documents or of any
agreements, regulations, or laws to or by which BR2 is bound. This Agreement has
been, and each document to be executed and delivered by BR2 at Closing shall
have been as of Closing, duly authorized, executed and delivered by BR2, is a
valid and binding obligation of Stonehenge and is enforceable against BR2 in
accordance with its terms subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the rights of creditors
generally; and (B) the exercise of judicial discretion in accordance with
general principles of equity.

 

(b)          Pending Actions. Except as set forth on Schedule 5.1, to the best
of Seller’s knowledge, Seller has not received written notice of and has no
knowledge of any pending or threatened (in writing) action, suit, arbitration,
administrative or judicial proceeding, or unsatisfied order or judgment against
Seller which pertains to the Property or the transaction contemplated by this
Agreement, which in any case, if adversely determined, would have a material
adverse effect on the use, operation, or the value of the Property or Seller’s
ability to consummate the transaction contemplated herein.

 

20

 

 

(c)          Condemnation. To the best of Seller’s knowledge, Seller has not
received written notice of and has no knowledge of any threatened (in writing)
or pending condemnation proceedings relating to the Property.

 

(d)          Environmental Matters. To the best of Seller’s knowledge, all
environmental reports related to the Property that Seller has in its possession
or control have been or will be delivered to Purchaser as part of the Seller’s
Deliveries. To the best of Seller’s knowledge, Seller has received no written
notice from any governmental authority asserting any violation of Environmental
Laws related to the Property which has not been cured or corrected. The term
“Environmental Laws” includes without limitation the Resource Conservation and
Recovery Act and the Comprehensive Environmental Response, Compensation, and
Liability Act and other federal laws governing the environment together with
their implementing regulations applicable to the Property, and all applicable
state, regional, county, municipal and other local laws, regulations and
ordinances that are equivalent or similar to the federal laws recited above or
that purport to regulate hazardous or toxic substances and materials. The term
“Hazardous Materials” includes petroleum (including crude oil or any fraction
thereof) and any substance, material, waste, pollutant or contaminant listed or
defined as hazardous or toxic under any Environmental Laws, in any case at
levels or concentrations requiring monitoring, reporting, remediation or removal
in accordance with Environmental Laws.

 

(e)          Service Contracts. There are no service, supply, equipment rental
or similar agreements (each a “Service Contract” and collectively “Service
Contracts”) to which Seller is a party or otherwise bound affecting the Property
other than those set forth in Schedule 5.1(e). The Service Contracts have not
been amended or modified, except as set forth on Schedule 5.1(e). True and
complete copies of the Service Contracts have been or will be delivered to
Purchaser as part of Seller’s Deliveries. To Seller’s knowledge, Seller is not
in default with respect to its obligations or liabilities under any of the
Service Contracts.

 

21

 

 

(f)          Rent Roll. The Rent Roll is a copy of the Rent Roll that Seller
relies upon and uses in the ordinary course of its business, and is true and
correct in all material respects as of the date set forth thereon. The copies of
Leases and other agreements with tenants under the Leases (the “Tenants”)
delivered or furnished and made available by Seller to Purchaser pursuant to
this Agreement constitute all of the Leases to which Seller is a party or is
otherwise bound relating to the Property. In respect of each of the Leases, to
Seller’s knowledge, except as otherwise set forth in the Rent Roll (or
delinquency report attached thereto), the following information is true and
correct: (i) each of the Leases is in full force and effect and has not been
amended except as disclosed to Purchaser; (ii) Seller has not received written
notice of any material default by Seller under any of the Leases; (iii) the Rent
Roll discloses all refundable security deposits made by each of the Tenants
under the Leases; (iv) no Tenant under the Leases is entitled to any rebate or
concession which is not disclosed on the Rent Roll; and (v) there are no written
or oral leases affecting the Property other than those listed in the Rent Roll.
To Seller’s knowledge, none of Seller’s interests in the Leases or any of the
rents or amounts payable thereunder have been assigned, pledged, hypothecated or
otherwise encumbered other than those in connection with the existing first
mortgage, if any, affecting the Property. Notwithstanding anything in this
Agreement to the contrary, Seller does not covenant or represent that Tenants
under 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 Purchaser hereunder.

 

(g)          Property Violations. Seller has received no written notice that the
Property, and the use and operation thereof, are not in compliance with all
applicable municipal and governmental laws, ordinances, regulations, licenses,
permits and authorizations.

 

(h)         Seller’s Delive ries . To the best of Seller’s knowledge, the
Seller’s Deliveries, which may be copies and not originals, are true, correct
and complete in all material respects.

 

(i)           Patriot Act and Related Matters.

 

(i)          Seller has been in compliance in all material respects for the last
five (5) years and will continue to be in compliance in all material respects
through the Closing Date with (A) the PATRIOT Act, Pub. L. No. 107-56, the Bank
Secrecy Act, 31 U.S.C. § 5311 et seq., the Money Laundering Control Act of 1986,
and laws relating to the prevention and detection of money laundering in 18
U.S.C. §§ 1956 and 1957; (B) the Export Administration Act (50 U.S.C. §§
2401-2420), the International Emergency Economic Powers Act (50 U.S.C. § 1701,
et seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994), the Trading With
The Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9; (C) the Foreign
Asset Control Regulations contained in 31 C.F.R., Subtitle B, Chapter V; and (D)
any other civil or criminal federal or state laws, regulations, or orders of
similar import.

 

(ii)         None of the Seller Parties (as defined below) is now or shall be at
any time until after the Closing Date be a person who has been listed on (A) the
Specially Designated Nationals and Blocked Persons List contained in Appendix A
to 31 C.F.R., Subtitle B, Part V; (B) the Denied Persons List, the Entity List,
and the Unverified Parties List maintained by the United States Department of
Commerce; (C) the List of Terrorists and List of Debarred Parties maintained by
the United States Department of State; and (D) any other similar list maintained
by any federal or state agency or pursuant to any Executive Order of the
President of the United States of America. “Seller Parties” means, collectively,
(1) Seller, (2) its executive officers, directors, managers, agents and
employees, (3) its shareholders, members, partners, and other investors, or any
other person that owns or controls Seller, and (4) any entity on whose behalf
Seller acts.

 

22

 

 

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

 

(k)          Financial Status. 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
debtors in general, nor has any such proceeding been instituted by or against
Seller, nor is any such proceeding to Seller’s knowledge threatened or
contemplated.

 

(l)           ERISA. Seller is not (i) an “employee benefit plan” within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), (ii) a “governmental plan” under Section 3(32) of ERISA,
(iii) any plan described in Section 4975 of the Internal Revenue Code, or (iv)
an entity whose underlying assets include “plan assets” by reason of the
application of the ERISA “plan assets” regulation (29 C.F.R. 2510.3-101), as
modified by Section 3(42) of ERISA.

 

(m)          TIC Agreement. The Tenancy in Common Agreement dated December 9,
2014 among Stonehenge, BR1 and BR2 (the “TIC Agreement”) is in full force and
effect. None of Stonehenge, BR1 or BR2 has received any uncured notice of
default from either of the other two co-tenants under the TIC Agreement, and
none of Stonehenge, BR1 or BR2 has any knowledge of any uncured and outstanding
default by either of the other two co-tenants under the Existing TIC Agreement.

 

(n)          Employees. Seller has no employees.

 

(o)          Designated Representatives. Todd Jackovich is a principal of
Stonehenge and Patricia Anderson is a Vice President-Property Management for
Bluerock Real Estate LLC, an affiliate of BR1 and BR2.

 

(p)          Tangible Personal Property. To Seller’s knowledge there are no
liens or encumbrances against the Tangible Personal Property other than those in
connection with the existing first mortgage, if any, affecting the Property.

 

23

 

 

5.2           Knowledge Defined. References to the “knowledge” of Seller shall
refer only to the actual knowledge, without investigation or inquiry, on the
Effective Date and on the Closing Date, as the case may be, of any of the
Designated Representatives (as hereinafter defined) of Seller, and shall not be
construed, by imputation or otherwise, to refer to the knowledge of any property
manager or broker, or to any other officer, agent, manager, representative or
employee of Seller or any affiliate of Seller, or to impose upon such Designated
Representatives any duty to investigate the matter to which such actual
knowledge, or the absence thereof, pertains. As used herein, the term
“Designated Representatives” shall refer to the following persons: Todd
Jackovich who is a principal of Stonehenge; and Patricia Anderson, who is a Vice
President- Property Management for Bluerock Real Estate LLC, an affiliate of BR1
and BR2. In no event shall Purchaser have any personal claim against the
above-named individuals as a result of the reference thereto in this Section 5.2
and Purchaser waives and releases all such claims which Purchaser now has or may
later acquire against them in connection with the transactions contemplated in
this Agreement.

 

5.3          Survival of Seller’s Representation s and Warr anties . The
representations and warranties of Seller set forth in Section 5.1, as updated by
Seller’s Closing Certificate, shall survive Closing for a period of six (6)
months after Closing (the “Survival Period”) unless a written claim in respect
thereof has been delivered by Purchaser to Seller prior to the expiration of the
Survival Period (in which case the relevant representations and warranties shall
survive as to the pending claim until its final resolution); provided, however,
that Seller’s representations in Section 5.1(i) shall survive for the applicable
statute of limitations. Except with respect to a pre- closing misrepresentation
by Seller for which the Agreement is terminated under Section 6.2, in which
event Section 6.2 shall apply, no claim for a breach of any representation or
warranty of Seller shall be actionable or payable (a) if the breach in question
results from or is based on a condition, state of facts or other matter which
was known to Purchaser prior to Closing, (b) unless the valid claims for all
such breaches collectively aggregate Fifty Thousand and No/100 Dollars
($50,000.00) or more, in which event the full amount of such valid claims shall
be actionable, up to but not exceeding the amount of the Cap (as defined below),
and (c) unless written notice containing a description of the specific nature of
such breach shall have been given by Purchaser to Seller prior to the expiration
of the Survival Period and an action shall have been commenced by Purchaser
against Seller within forty-five (45) days after the expiration of the Survival
Period. In the event of any breach by Seller of its representations and
warranties contained herein which Purchaser first discovers after Closing and
provides timely notice as aforesaid, Seller shall indemnify and hold Purchaser
harmless from and against any and all loss, damage, cost or expense resulting
therefrom up to but not exceeding the Cap. Seller shall not be liable to
Purchaser to the extent Purchaser’s claim is satisfied from any insurance
policy, Service Contract or Lease, and such amounts shall not be applied toward
the Cap. As used herein, the term “Cap” shall mean the total aggregate amount of
Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00). In no event shall
Seller’s aggregate liability to Purchaser for any and all breaches of any
representation or warranty of Seller in this Agreement or Seller’s Closing
Certificate exceed the amount of the Cap, and Purchaser hereby waives and
disclaims any right to damages or compensation for any and all such breaches in
excess of the Cap.

 

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

 

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(a)          Operation of Property. Seller shall operate and maintain the
Property in a manner generally consistent with the manner in which Seller has
operated and maintained the Property prior to the date hereof and consistent
with the operational standard of an institutional owner of similarly situated
multi-family projects within the greater Nashville, Tennessee market. Seller
shall have no obligation to make capital improvements at the Property. Upon
request from time to time, Seller shall provide Purchaser with an updated Rent
Roll and reports detailing monthly rental collections, occupancy, vacancies,
concessions and incentives. For any apartment unit at the Property that shall
have become vacant more than five (5) days prior to the Closing Date, Seller
shall either (i) restore such unit to “rent ready” condition prior to the
Closing Date, or (ii) at Closing, credit Purchaser the sum of $500.00 for each
such vacant apartment unit against the Purchase Price.

 

(b)          Execution of New Leases and Renewals. Seller shall continue its
efforts in its ordinary course of business to negotiate new leases for unrented
apartment units in the Improvements and/or Lease renewals for rented apartment
units in the Improvements and shall maintain an advertising and marketing
program for apartment units in the Improvements consistent with Seller’s past
practices at the Property. Except for amendments or leases entered into pursuant
to renewal notices mailed prior to the execution of this Agreement (a true and
complete schedule of which is attached hereto as Schedule 5.4(b)), unless
Purchaser agrees otherwise in writing, any new leases or renewals of existing
leases for such apartment units entered into by Seller after the Effective Date
until the Closing or earlier termination of this Agreement shall be on Seller’s
standard apartment lease form for the Property, and shall be for terms of no
less than six (6) months and no more than thirteen (13) months. Prior to the
expiration of the Inspection Period, Seller shall retain the discretion to set
rent rates, concessions and other terms of occupancy, provided Seller shall only
enter into new leases or renewals in the ordinary course of business taking into
account Seller’s then-current good faith evaluation of market conditions. After
the expiration of the Inspection Period, any new leases or renewals of existing
leases by Seller shall be on terms consistent with the leasing guidelines
attached hereto as Schedule 5.4(b) and incorporated herein by reference. Each
such new lease or renewal entered into by Seller in accordance with the terms
hereof shall constitute a “Lease” for purposes of this Agreement.

 

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

 

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

 

25

 

 

(e)          Provide Copies of Notices. Seller shall furnish Purchaser with
copies of all written notices received by Seller from any governmental authority
of any violation of any law, statute, ordinance, regulation or order of any
governmental or public authority relating to the Property, within ten (10)
business days following Seller’s receipt thereof, but, if received by such date,
in no event later than two (2) business days prior to the Closing Date.

 

(f)          Removal and Replacement of Tangible Personal Property. Seller shall
not remove any Tangible Personal Property except as may be required for
necessary repair or replacement (which repair and replacement shall be of equal
quality and quantity as existed as of the time of the removal).

 

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

 

(h)          Management Contracts. As of Closing all property management
contracts (if any) pertaining to the Property shall have been terminated.

 

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

 

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

 

26

 

 

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

 

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

 

(d)          Financial Status. Purchaser 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 Purchaser filed, nor does
it contemplate the filing of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or any other proceeding for the relief of
debtors in general, nor has any such proceeding been instituted by or against
Purchaser, nor is any such proceeding to Purchaser’s knowledge threatened or
contemplated. The purchase of the Property will not render Purchaser insolvent.

 

(e)          ERISA. Purchaser is not (i) an “employee benefit plan” within the
meaning of Section 3(3) of ERISA, (ii) a “governmental plan” under Section 3(32)
of ERISA, (iii) any plan described in Section 4975 of the Internal Revenue Code,
or (iv) an entity whose underlying assets include “plan assets” by reason of the
application of the ERISA “plan assets” regulation (29 C.F.R. 2510.3-101), as
modified by Section 3(42) of ERISA.

 

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

 

(i)          Purchaser is familiar with the source of funds for the Purchase
Price and represents that all such funds are and will be derived from legitimate
business activities within the United States of America and/or from loans from a
banking or financial institution chartered or organized within the United States
of America.

 

(ii)         Purchaser has been in compliance in all material respects for the
last five (5) years and will continue to be in compliance in all material
respects through the Closing Date with (A) the PATRIOT Act, Pub. L. No. 107-56,
the Bank Secrecy Act, 31 U.S.C. § 5311 et seq., the Money Laundering Control Act
of 1986, and laws relating to the prevention and detection of money laundering
in 18 U.S.C. §§ 1956 and 1957; (B) the Export Administration Act (50 U.S.C. §§
2401-2420), the International Emergency Economic Powers Act (50 U.S.C.§ 1701, et
seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994), the Trading With
The Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9; (C) the Foreign
Asset Control Regulations contained in 31 C.F.R., Subtitle B, Chapter V; and (D)
any other civil or criminal federal or state laws, regulations, or orders of
similar import.

 

27

 

 

(iii)        None of the Purchaser Parties (as defined below) is now or shall be
at any time until the Closing Date be a person who has been listed on (A) the
Specially Designated Nationals and Blocked Persons List contained in Appendix A
to 31 C.F.R., Subtitle B, Part V; (B) the Denied Persons List, the Entity List,
and the Unverified Parties List maintained by the United States Department of
Commerce; (C) the List of Terrorists and List of Debarred Parties maintained by
the United States Department of State; and (D) any other similar list maintained
by any federal or state agency or pursuant to any Executive Order of the
President of the United States of America. “Purchaser Parties” means,
collectively, (1) Purchaser, (2) its executive officers, directors, managers,
agents and employees, (3) its shareholders, members, partners, and other
investors, or any other person that owns or controls Purchaser, and (4) any
entity on whose behalf Purchaser acts.

 

(g)          Purchaser Representative. Noel G. Belli is Purchaser’s acquisition
officer in respect of the Property.

 

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

 

5.7          Knowledge Defined. References to the “knowledge” of Purchaser shall
refer only to the actual knowledge, without investigation or inquiry, on the
Effective Date and on the Closing Date, as the case may be, of the Purchaser
Representative (as hereinafter defined), and shall not be construed, by
imputation or otherwise, to refer to the knowledge of any property manager or
broker, or to any other officer, agent, manager, representative or employee of
Purchaser or any affiliate of Purchaser, or to impose upon such Purchaser
Representative any duty to investigate the matter to which such actual
knowledge, or the absence thereof, pertains. As used herein, the term “Purchaser
Representative” shall refer to the following person: Noel G. Belli, who is the
Purchaser’s acquisition officer in respect of the Property. In no event shall
Seller have any personal claim against the above-named individual as a result of
the reference thereto in this Section 5.7 and Seller waives and releases all
such claims which Seller now has or may later acquire against him in connection
with the transactions contemplated in this Agreement.

 

28

 

 

5.8          Covenants of Purchaser

 

(a)          Reserved.

 

(b)          “Designated Service Contracts” means (i) those certain Service
Contracts which are assignable in accordance with their terms which Purchaser
identifies by written notice delivered to Seller on or before the Inspection
Date as the Service Contracts Purchaser elects Seller to assign to Purchaser at
Closing, (ii) those assignable Service Contracts regarding which Purchaser has
failed to deliver such written notice on or before the Inspection Date, and
(iii) those Service Contracts (the “Must Take Service Contracts”) attached
hereto as Schedule 5.8(b) which are assignable in accordance with their terms
and which may not be terminated without cause or penalty, with thirty (30) days’
(or less) written notice. Purchaser hereby covenants with Seller that on or
before the Inspection Date, Purchaser shall deliver written notice to Seller
instructing which of the assignable Service Contracts Purchaser desires for
Seller to assign to Purchaser and which it does not. If Purchaser fails to
timely deliver such notice, Purchaser shall not be in default hereunder but
shall be deemed to have chosen to have all assignable Service Contracts assigned
to Purchaser, and all such Service Contracts shall be deemed part of the
“Designated Service Contracts.” If Purchaser charges any vendor approval fees
that would otherwise be payable by a service provider in connection with the
assignment of any Service Contracts (such as Compliance Depot charges),
Purchaser agrees to waive and release such fees. At Closing, Seller will cause
the Service Contracts which Purchaser has elected not to have assigned to
Purchaser (other than the Must Take Service Contracts), by operation of the
aforesaid notice on or before the Inspection Date, to be terminated at Seller’s
expense, such termination to be effective within the time period provided for in
the applicable Service Contract (or if no such time period is provided, as
promptly as practicable after the Closing Date). The provisions of this Section
5.7(b) shall survive Closing.

 

ARTICLE 6

 

DEFAULT

 

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

 

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6.2          Default by Seller. If the sale of the Property as contemplated
hereunder is not consummated due to Seller’s default hereunder, then Purchaser
shall be entitled, as its sole remedy for such default, either (a) to receive
the return of the Earnest Money, which return shall operate to terminate this
Agreement and release the parties from any and all liability hereunder, except
that, to the extent that such termination is the result of a failure of Seller
to perform a material obligation or a material covenant under this Agreement,
Purchaser shall also be entitled to recover from Seller, and Seller shall
promptly pay to Purchaser, an amount equal to Purchaser’s actual out of pocket
expenses incurred in connection with the transactions contemplated hereby in an
amount not to exceed Seventy-Five Thousand Dollars ($75,000.00), or (b) to
enforce specific performance of Seller’s obligation to execute and deliver the
documents and perform its obligations relating to the Closing and the conditions
at Closing set forth in this Agreement; provided, however, that notwithstanding
the foregoing, if specific performance is not available to Purchaser due to a
voluntary transfer by Seller of all or a material portion of its interest in the
Property, then Purchaser shall be entitled to seek Purchaser’s actual damages
resulting from the loss of Purchaser’s bargain. In no event shall Seller be
liable for consequential, speculative, remote or punitive damages, or any other
damages, and Purchaser hereby waives and releases any right to seek or collect
any such consequential, speculative, remote or punitive damages, or any damages
other than Purchaser’s actual damages as set forth in the immediately preceding
sentence. Purchaser shall be deemed to have elected (a) above if Purchaser fails
to file suit for specific performance against Seller in a court having
jurisdiction in the county and state in which the Property is located, on or
before forty-five (45) days following the date upon which Closing was to have
occurred. This Section 6.2 shall be subject to Section

6.4 hereof.

 

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

 

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

 

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ARTICLE 7

 

RISK OF LOSS

 

7.1          Damage. Prior to Closing, the risk of loss shall remain with
Seller. In the event of “damage” to the Property or any portion thereof, then
Seller shall promptly notify Purchaser thereof. In addition, if Seller
determines that such damage is “major” (as hereinafter defined), Seller shall
specifically so notify Purchaser in writing. In the event of such major damage,
Purchaser may elect to proceed with the Closing (subject to the other provisions
of this Agreement) or may terminate this Agreement by delivering written notice
thereof to Seller within ten (10) business days after Purchaser’s receipt of
Seller’s notice respecting the damage. If Purchaser does not specifically elect
to proceed with Closing within ten (10) business days of receipt of Seller’s
notice respecting such major damage, then this Agreement shall terminate, the
Earnest Money shall be returned to Purchaser and, except for obligations of the
parties which survive termination of this Agreement, the parties shall have no
further obligations hereunder. If Purchaser elects to proceed, Purchaser shall
have no further right to terminate this Agreement as a result of the damage and
in such event, Seller shall assign to Purchaser at Closing all insurance
proceeds (including rent loss insurance, if any, applicable to the period from
and after the Closing Date) or condemnation awards payable as a result of such
damage and pay any insurance deductible due under Seller’s insurance
policy(ies). If the damage is not major, Seller shall assign to Purchaser at
Closing all insurance proceeds (including rent loss insurance, if any,
applicable to the period from and after the Closing Date) or condemnation awards
payable as a result of such damage and pay any insurance deductible due under
Seller’s insurance policy(ies). In the event the damage is not major and prior
to Closing sufficient insurance proceeds are not received or committed in
writing by the insurance carrier sufficient to repair any damage, Seller shall
repair such damage to Purchaser’s reasonable satisfaction by Closing or give
Seller a credit at Closing in an amount sufficient to pay for the cost unpaid as
of Closing for repair of the applicable damage (i.e. to restore the Property to
substantially the same condition as immediately before such casualty), such
amount to be determined by an architect or other appropriate professional
selected by Seller and approved by Purchaser, such approval not to be
unreasonably withheld, conditioned or delayed. Any assignment by Seller to
Purchaser of insurance proceeds respecting loss of rental income shall be
limited to that portion of such proceeds attributable to periods after Closing.
In the event of casualty or condemnation occurs between the expiration of the
Inspection Period and the Closing Date which results in Major Damage, the
parties acknowledge and agree that the Closing Date may be delayed for so long
as is reasonably necessary to allow the parties sufficient time to obtain,
analyze and address the items related to such casualty or condemnation, provided
that such delay shall not exceed thirty (30) days from the originally scheduled
Closing Date.

 

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

 

(a)          “damage” means (i) physical damage to or destruction of all or part
of the Property by reason of fire, earthquake, tornado, flood or other casualty
occurring after the Effective Date or (ii) the actual or threatened (in writing
by the appropriate governmental authority) physical taking of all or part of the
Property by condemnation or by conveyance in lieu of condemnation occurring
after the Effective Date; and

 

(b)          “major” damage refers to the following: (i) damage such that the
cost of repairing or restoring the premises in question to a condition
substantially similar to that of the premises in question prior to the event of
damage would in the opinion of an architect selected by Seller and reasonably
approved by Purchaser, be equal to or greater than ten percent (10%) of the
Purchase Price or that impairs access to twenty-five (25) or more residential
apartment units for a period of thirty (30) days or more after the Closing; and
(ii) any condemnation or conveyance in lieu of condemnation which materially
impairs the current use or value of the Property or access to the Property from
public roads or the number or utility of parking spaces or prohibits, as a
matter of applicable law, the rebuilding or repair of Improvements as they
currently exist. If Purchaser does not give notice to Seller of Purchaser’s
reasons for disapproving an architect within ten (10) business days after
receipt of notice of the proposed architect containing the proposed architect’s
educational background, a description of his or her general experience and two
references, then Purchaser shall be deemed to have approved the architect
selected by Seller.

 

ARTICLE 8

 

COMMISSIONS

 

8.1          Broker’s Commission. The parties acknowledge that [Jones Lang
LaSalle] (“Broker”) has been retained by and represents Seller as broker in
connection with the sale of the Property by Seller to Purchaser, and is to be
compensated for its services by Seller. Seller agrees to pay Broker upon, but
only upon, final consummation of the transaction contemplated herein, a real
estate brokerage commission pursuant to a separate written agreement between
Seller and Broker.

 

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

 

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

 

ARTICLE 9

 

DISCLAIMERS AND WAIVERS

 

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

 

33

 

 

9.2          Disclaimers. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES
OF SELLER SET FORTH IN THIS AGREEMENT AND IN THE CLOSING DOCUMENTS, PURCHASER
UNDERSTANDS AND AGREES THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE
ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR
IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER’S LIMITED OR SPECIAL WARRANTY OF
TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, LATENT OR PATENT
PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR
PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY
WITH APPLICABLE LAWS, THE ABSENCE OR PRESENCE OF HAZARDOUS MATERIALS OR OTHER
TOXIC SUBSTANCES (INCLUDING WITHOUT LIMITATION MOLD OR ANY MOLD CONDITION),
COMPLIANCE WITH ENVIRONMENTAL LAWS OR ACCESS LAWS, THE TRUTH, ACCURACY OR
COMPLETENESS OF THE PROPERTY DOCUMENTS OR ANY OTHER INFORMATION PROVIDED BY OR
ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE
PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL
AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY “AS IS, WHERE
IS, WITH ALL FAULTS”, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS
AGREEMENT OR IN THE CLOSING DOCUMENTS. PURCHASER HAS NOT RELIED AND WILL NOT
RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED
WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION,
PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR
FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR
AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN
THIS AGREEMENT OR IN THE CLOSING DOCUMENTS.

 

34

 

 

PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT
PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS
NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE
EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY
HAZARDOUS MATERIALS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY
(INCLUDING WITHOUT LIMITATION ANY MOLD OR MOLD CONDITION), OR WITH RESPECT TO
ACCESS LAWS, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION
PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT
THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS
ARE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE CLOSING DOCUMENTS. UPON
CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT
LIMITED TO, DESIGN, CONSTRUCTION DEFECTS, ADVERSE PHYSICAL OR ENVIRONMENTAL
CONDITIONS, OR NONCOMPLIANCE WITH ACCESS LAWS, MAY NOT HAVE BEEN REVEALED BY
PURCHASER’S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE
WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S AND ITS PARTNERS’
RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT OR UNDER ANY ENVIRONMENTAL LAW), LOSSES, DAMAGES, LIABILITIES,
FINES, PENALTIES (WHETHER BASED ON STRICT LIABILITY OR OTHERWISE), COSTS AND
EXPENSES (INCLUDING ATTORNEYS’ FEES AND COURT COSTS) OF ANY AND EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED
AGAINST SELLER (AND SELLER’S AND ITS PARTNERS’ RESPECTIVE OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF
ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF
ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS OR
ACCESS LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR
MATTERS REGARDING THE PROPERTY. THE FOREGOING SHALL NOT BE INTERPRETED TO WAIVE
ANY CLAIM OF PURCHASER WITH RESPECT TO ANY BREACH BY SELLER OF ANY EXPRESS
COVENANT, REPRESENTATIONS OR WARRANTIES MADE BY SELLER IN THIS AGREEMENT THAT
EXPRESSLY SURVIVE CLOSING PURSUANT TO THE TERMS HEREOF OR IN THE CLOSING
DOCUMENTS.

 

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

 

35

 

 

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

 

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

 

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

 

ARTICLE 10

 

ESCROW AGENT

 

10.1        Investment of Earnest Money. Escrow Agent shall invest the Earnest
Money held by Escrow Agent pursuant to Purchaser’s directions in an
interest-bearing account at a commercial bank whose deposits are insured by the
Federal Deposit Insurance Corporation. Escrow Agent shall notify Seller, no
later than one (1) business day after Escrow Agent’s receipt thereof, that
Escrow Agent has received any portion of the Earnest Money in immediately
available funds, and is holding the same in accordance with the terms of this
Agreement. However, Escrow Agent shall invest the Earnest Money only in such
accounts as will allow Escrow Agent to disburse the Earnest Money or any portion
thereof upon no more than one (1) business day’s notice.

 

10.2        Payment on Demand. Escrow Agent shall hold the Earnest Money in
escrow and shall not release the same to any person or entity except as
expressly provided herein. Upon receipt of any written certification from Seller
or Purchaser claiming the Earnest Money pursuant to the provisions of this
Agreement, Escrow Agent shall promptly forward a copy thereof to the other such
party (i.e., Purchaser or Seller, whichever did not claim the Earnest Money
pursuant to such notice) and, unless such other party within ten (10) days
thereafter notifies Escrow Agent of any objection to such requested disbursement
of the Earnest Money in which case Escrow Agent shall retain the Earnest Money
subject to Section 10.4 below, Escrow Agent shall disburse the Earnest Money to
the party demanding the same and shall thereupon be released and discharged from
any further duty or obligation hereunder. Notwithstanding the foregoing, Escrow
Agent shall promptly (without the necessity of any notice to Seller and
notwithstanding any objection that Seller may raise) deliver the Earnest Money
to Purchaser upon demand made at any time prior to the expiration of the
Inspection Period.

 

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10.3        Exculpation of Escrow Agent. It is agreed that the duties of Escrow
Agent are herein specifically provided and are purely ministerial in nature, and
that Escrow Agent shall incur no liability whatsoever except for its misconduct
or negligence, so long as Escrow Agent is acting in good faith. Except in the
event of Escrow Agent’s willful misconduct or gross negligence, Seller and
Purchaser do each hereby release Escrow Agent from any liability for any error
of judgment or for any act done or omitted to be done by Escrow Agent in the
good faith performance of its duties hereunder and do each hereby indemnify
Escrow Agent against, and agree to hold, save, and defend Escrow Agent harmless
from, any costs, liabilities, and expenses incurred by Escrow Agent in serving
as Escrow Agent hereunder and in faithfully discharging its duties and
obligations hereunder. Seller and Purchaser are aware the Federal Deposit
Insurance Corporation (FDIC) coverages apply to a maximum amount of Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00) per depositor (as may be
modified by the FDIC from time to time). Further, Seller and Purchaser do not
and will not hold Escrow Agent liable for any loss occurring which arises from
bank failure or error, insolvency or suspension, or a situation or event which
falls under the FDIC coverages.

 

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

 

10.5        Interest. All interest and other income earned on the Earnest Money
deposited with Escrow Agent hereunder shall be reported for income tax purposes
as earnings of Purchaser. Purchaser’s taxpayer identification number shall be
delivered to Escrow Agent and/or Seller upon request prior to Closing.

 

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

 

37

 

 

ARTICLE 11

 

MISCELLANEOUS

 

11.1        Public Disclosure. Prior to Closing, any release to the public of
information with respect to the sale contemplated herein or any matters set
forth in this Agreement will be made only in the form approved by Purchaser and
Seller except for any disclosure that may be required by law or applicable
regulation to be made to any applicable governmental or quasi- governmental
authorities or to the public. Further, either Seller or Purchaser may also make
such disclosures with respect to the transaction as are consistent with such
party’s customary disclosures in quarterly earnings press releases and
supplemental financial disclosures; however no such releases or disclosures to
the general public in writing shall include the name of the purchaser or seller
of the Property. Notwithstanding any terms or conditions in this Agreement to
the contrary, this Section 11.1 shall survive the Closing.

 

11.2        Assignment. Purchaser may not assign its rights under this Agreement
without first obtaining Seller’s written approval, which approval may be given
or withheld in Seller’s sole discretion. Notwithstanding the foregoing, (a)
Purchaser may assign this Agreement at or prior to Closing to a Permitted
Assignee without Seller’s consent, and (b) Seller may assign its rights under
this Agreement to an exchange accommodation titleholder to facilitate a tax
deferred exchange pursuant to Section 4.8 hereof. For purposes hereof, the term
“Permitted Assignee” means an assignee which expressly assumes in writing all
obligations of Purchaser hereunder and is (i) any entity that is directly or
indirectly controlling or controlled by or under direct or indirect common
control with Sentinel Acquisitions Corp. or Sentinel Real Estate Corporation,
(ii)         any commingled investment fund that is managed directly or
indirectly by Sentinel Acquisitions Corp. or Sentinel Real Estate Corporation or
any permitted assignee under clause (i) above, or (iii) any person or entity who
has retained Sentinel Acquisitions Corp. or Sentinel Real Estate Corporation or
any permitted assignee under clause (i) above, as its asset manager with respect
to the Property; provided that such retention pursuant to an assignment in (iii)
above is a bona fide arrangement and not principally for the purpose of
transferring Purchaser’s interest in this Agreement. No transfer or assignment
by Purchaser shall release or relieve Purchaser of its obligations hereunder.

 

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

 

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The parties’ respective addresses for notice purposes are as follows. Notice by
telephone shall not be effective.

 

If to Seller:

 

SH 23Hundred TIC, LLC

BGF 23Hundred, LLC

23Hundred, LLC

c/o Stonehenge Real Estate Group, LLC

3200 West End Avenue, Suite 500

Nashville, TN 37203

Attention: Todd Jackovich

toddj@stonehengereg.com

 

With a copy to:

 

Eric R. Wilensky, Esq.

Nelson Mullins Riley & Scarborough LLP

Atlantic Station

201 17th Street NW, Suite 1700

Atlanta, GA 30363

eric.wilensky@nelsonmullins.com

 

If to Purchaser

 

Sentinel Acquisitions Corp.

c/o Sentinel Real Estate Corporation

1251 Avenue of the Americas

New York, NY 10020

Attention: Noel G. Belli

belli@sentinelcorp.com

 

and

 

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Sentinel Acquisitions Corp.

c/o Sentinel Real Estate Corporation

1251 Avenue of the Americas

New York, NY 10020

Attention: Millie Cassidy

cassidy@sentinelcorp.com

 

With a copy to:

 

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

Attention: Mark Brody, Esq.

brody@sewkis.com

 

If to Escrow Agent:

 

First American Title Insurance Company

633 Third Avenue

New York, NY 10017

Attention: Phillip Salomon

psalomon@firstam.com

 

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

 

11.5         Calculation of Time Periods. Where used in this Agreement, the term
“business day” shall mean any day that is not a Saturday, Sunday or legal
holiday. If any date set forth in this Agreement shall fall on, or any time
period set forth in this Agreement shall expire on, a day which is not a
business day, such date shall automatically be extended to, and the expiration
of such time period shall automatically to be extended to, the next business
day. The final day of any time period under this Agreement or any deadline under
this Agreement shall include the period of time through and including such final
day or deadline. The final day of any such time period or deadline shall be
deemed to end at 5:00 p.m., Nashville, Tennessee time.

 

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11.6        Successors and Assigns. Subject to Section 11.2 hereof, the terms
and provisions of this Agreement are to apply to and bind the permitted
successors and assigns of the parties hereto.

 

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

 

11.8        Further Assurances. Each party agrees that it will without further
consideration execute and deliver such other documents and take such other
action, whether prior or subsequent to Closing, as may be reasonably requested
by the other party to consummate more effectively the purposes or subject matter
of this Agreement. Without limiting the generality of the foregoing, Purchaser
shall, if requested by Seller, execute acknowledgments of receipt with respect
to any materials delivered by Seller to Purchaser with respect to the Property.
The provisions of this Section 11.8 shall survive Closing.

 

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

 

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

 

11.11      Applicable Law. This Agreement is performable in the state in which
the Property is located and shall in all respects be governed by, and construed
in accordance with, the substantive federal laws of the United States and the
laws of such state. Seller and Purchaser hereby irrevocably submit to the
jurisdiction of any state or federal court sitting in the state and judicial
district in which the Property is located in any action or proceeding arising
out of or relating to this Agreement and hereby irrevocably agree that all
claims in respect of such action or proceeding shall be heard and determined in
a state or federal court sitting in the state and judicial district in which the
Property is located. Purchaser and Seller agree that the provisions of this
Section 11.11 shall survive the Closing of the transaction contemplated by this
Agreement.

 

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

 

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11.13      Employees. Prior to the day after the Inspection Date, Purchaser
agrees not to offer employment to any employees of Seller’s property manager who
are employed at the Property. Purchaser shall use reasonable efforts to instruct
its personnel on the Property during the Inspection Period to not solicit the
employment of any employees at the Property until the day after the Inspection
Date. Purchaser shall have no responsibility for the salaries, benefits, leasing
commissions, and bonuses, if any, payable to such employees at the Property
relating to or arising from such employment by Seller’s property manager, even
if such employees are subsequently employed by or on behalf of Purchaser or its
affiliates following the Closing. Any employment of such existing employees by
Purchaser or its affiliates shall be pursuant to separate employment agreements
with such employees. Purchaser shall have no obligation to offer (or cause to be
offered) employment to any employee of the Property following the Closing. This
Section 11.13 shall survive the Closing.

 

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

 

Schedule 1.1(a) - Legal Description of the Land Schedule 1.1(d) - Inventory of
Tangible Personal Property Schedule 1.1(e) - Rent Roll Schedule 1.5 - Escrow
Agent Wiring Instructions Schedule 3.1 - Seller’s Deliveries Schedule 4.2(a) -
Limited Warranty Deed Schedule 4.2(b) - Bill of Sale and Assignment Schedule
4.2(d) - Seller’s Closing Certificate   Schedule 4.2(g) - Seller’s Affidavit
Schedule 5.1 - Seller’s Disclosure Statement   Schedule 5.1(e) - Schedule of
Service Contracts Schedule 5.4(b)(i) - Lease Renewal and Amendment Notices
Schedule 5.4(b)(ii) - Leasing Guidelines Schedule 5.8(b) - Schedule of Must Take
Service Contracts Schedule 12.1 - Condominium Conversion Agreement

 

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

 

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

 

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

 

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11.18     Survival. The provisions of the following Sections of this Agreement
shall survive Closing and shall not be merged into the execution and delivery of
the Deed: 3.1(e); 4.2(c); 4.4; 4.5; 4.8; 5.1; 5.2; 5.3; 5.5; 5.6; 5.7; Article
8; Article 9; 11.8; 11.11; 11.13; 11.23; those additional provisions of this
Article 11 which govern the administration, interpretation or enforcement of
this Agreement; and any other provisions contained herein that by their terms
survive the Closing (the “Obligations Surviving Closing”). Except for the
Obligations Surviving Closing, all representations, warranties, covenants and
agreements contained in this Agreement shall be merged into the instruments and
documents executed and delivered at Closing. The Obligations Surviving Closing
shall survive the Closing; provided, however, that the representations and
warranties of Seller contained in Section 5.1, as updated by Seller’s Closing
Certificate, and the representations and warranties of Purchaser contained in
Section 5.5, as updated by Purchaser’s certificate under Section 4.3(d), shall
survive for the period, and are subject to the terms, set forth in Sections 5.3
and 5.6 respectively.

 

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

 

11.20      Covenant Not to Record. Purchaser shall not record this Agreement,
any memorandum or other evidence thereof; provided, however, that the foregoing
shall not prohibit the recordation of any lis pendens with regard to a timely
action for specific performance filed pursuant to Section 6.2 of this Agreement.
Any such recording shall constitute a material default hereunder on the part of
Purchaser.

 

11.21      Limitation of Seller’s Liab ility . Purchaser shall have no recourse
against any of the past, present or future, direct or indirect, shareholders,
partners, members, managers, principals, directors, officers, agents,
incorporators, affiliates or representatives of Seller or of any of the assets
or property of any of the foregoing for the payment or collection of any amount,
judgment, judicial process, arbitral award, fee or cost or for any other
obligation or claim arising out of or based upon this Agreement and requiring
the payment of money by Seller. This Section 11.21 shall survive the Closing.

 

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

 

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

 

11.24      Attorneys’ Fees . Should either party employ attorneys to enforce any
of the provisions hereof, the party against whom any final judgment is entered
agrees to pay the prevailing party all reasonable costs, charges, and expenses,
including attorneys’ fees, expended or incurred in connection therewith.

 

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ARTICLE 12

 

SPECIAL PROVISION REGARDING CONDOMINIUM

 

12.1        Condominium Conversion Agreement. As a material part of the
consideration for Seller’s execution and delivery of this Agreement, Purchaser
shall execute and deliver at Closing a Condominium Conversion Agreement in the
form set forth on Schedule 12.1 attached hereto, which will be recorded against
the Property at the Closing.

 

[SIGNATURES ON THE FOLLOWING PAGES]

 

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

 

  SELLER:       SH 23HUNDRED TIC, LLC,   a Tennessee limited liability company  
            By: Stonehenge 23Hundred N Member, LLC,     a Tennessee limited
liability company,     its Sole Member                 By: Stonehenge 23Hundred
Manager, LLC,       a Tennessee limited liability company       its Manager    
              By: Stonehenge Real Estate Group, LLC,         a Georgia limited
liability company,         its Manager                     By: /s/ Todd
Jackovich           Todd Jackovich, its Manager               BGF 23HUNDRED,
LLC, a Delaware limited   liability company               By:

Bluerock Growth Fund, LLC, its sole

member

                By:

Bluerock Fund Manager, LLC, its

manager

                    By: /s/ Jordan Ruddy           Jordan Ruddy, its Authorized
          Signatory

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 

 

 

  23HUNDRED, LLC, a Delaware limited liability company                   By: BR
Stonehenge 23Hundred JV, LLC, its sole member                     By: BR Berry
Hill Managing Member, LLC, its       manager                       By: BEMT
Berry Hill, LLC, its manager                   By: Bluerock Residential
Holdings, L.P.,           its sole member                           By: Bluerock
Residential Growth             REIT, Inc., its general             partner      
                      By: /s/ Michael L. Konig               Michael L. Konig,
its               Senior Vice President               and Chief Operating      
        Officer

 

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 

 

 

  PURCHASER:       SENTINEL ACQUISITIONS CORP., a   Delaware corporation        
By: /s/ Noel G. Belli   Name: Noel G. Belli   Title: Vice President

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

 

 

 

 

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

 

  ESCROW AGENT:       FIRST AMERICAN TITLE INSURANCE   COMPANY         By: /s/
Philip Solomon   Name: Philip Solomon   Title: Vice President

 

[END OF SIGNATURES]

 

 

 

 

Schedule 1.1(a)

 

LEGAL DESCRIPTION OF THE LAND

 

Being a tract of land lying in the City of Berry Hill, Davidson County,
Tennessee and being more particularly described as follows:

 

Commencing at the intersection of the southerly right-of-way line of Bradford
Avenue, 50 feet in width, and the easterly right-of-way line of Franklin Pike;

 

Thence North 71 deg 02 min 40 sec East, 24.81 feet to an existing hole in
concrete on the southerly right-of-way line of Bradford Avenue, being the true
point of beginning for this tract;

 

Thence with the southerly right-of-way line of Bradford Avenue, North 71 deg 02
min 40 sec East, 325.22 feet to an existing iron rod at a comer common with the
property conveyed to Melpark Properties Management, L.P., of record in Book
11037, page 674 at the Register’s Office for Davidson County, Tennessee;

 

Thence leaving the southerly right-of-way line of Bradford Avenue with the
westerly line of said Melpark Properties Management, South 18 deg 30 min 38 sec
East, 367.50 feet to an existing concrete monument on the northerly right-of-way
line of Melpark Drive, right-of-way width varies;

 

Thence with the northerly right-of-way line of Melpark Drive for the following
three calls:

 

1)  South 71 deg 02 min 47 sec West, 150.00 feet to an existing iron rod,

2)  South 74 deg 01 min 17 sec West, 135.11 feet to an existing iron rod,

3)  South 70 deg 45 min 21 sec West, 40.02 feet to an existing iron rod at the
beginning of a radius return to Franklin Pike;

 

Thence with a curve to the right having a radius of 25.00 feet, a curve length
of 39.30 feet and a chord bearing and distance of North 63 deg 32 min 46 sec
West, 35.38 feet to an existing concrete monument on the easterly right-of-way
line of Franklin Pike;

 

Thence with the easterly right-of-way line of Franklin Pike, North 18 deg 30 min
33 sec West, 310,68 feet to a radius return to Bradford Avenue;

 

Thence with a curve to the right having a radius of 25.00 feet, a curve length
of 39.08 feet and a chord bearing and distance of North 26 deg 16 min 03 sec
East, 35.22 feet to the point of beginning; containing 127,443 square feet or
2.926 acres more or less.

 

Being the same property conveyed to Horsepower, J.V. of record in Instrument
Number 20120803-0069224 at the Register’s Office for Davidson County, Tennessee.

 

 

 

 

Schedule 1.1(d)

 

INVENTORY OF TANGIBLE PERSONAL PROPERTY

 

 

 

 

     

23Hundred Inventory List

11/18/2014

        Leasing Office/Entry Vestibule     Fitness Room         Bench 1    TVs 3
  Mail Room   Chairs 28   Fitness Machines 11   TV 1 Desks 4   Dumbell Rack 1  
Google Box 1 TV 1   Medicine Balls 5   Garage/Exterior   Computers 5   Benches 2
  Planters 2 Tables 3   Pool Courtyard - Pool Deck     Dog Stations 3 Key Track
1   Lounge Chairs 28   Trash Cans 1 Refrigerator 2   Chairs (other) 27   Bicycle
Racks 2 Sonos Sound Equip 2   Tables 19   Residential Units 266 Microwave 1  
Trash Cans 3   Refrigerator 266 Filing Cabinets 3   Speakers 6   Microwave 266
Copy Machine 1   Pool Accessories     Oven 266 Accessories 20   Pool Courtyard -
Upper Deck     Dishwasher 266 Curtains 2   Trash Cans 3   Garbage Disposal 266
Blinds 18   Chairs 18   Washer/Dryer Combo 266 Model Unit (259)     Tables 9  
Maintenance Shop   Sonos Sound Equip 1    Umbrellas 2   Refer To Maintenance  
Beds 2   Grills 2   Inventory List   Chairs 5   Fire Pit 1       Couch 1  
Speakers 2       Tables/Cabinets 9   Amplifier 1       Accessories 80   Sonos
Sound Equip 1       Lamps 4   Zen Courtyard         Curtains 8   Trash Cans 2  
    Cyber Lounge     Fire Pit 1       TVs 4    Chairs 8       Chairs 10   Tables
4       Tables 2   Sky Lounge         Couch 1   TVs 5       Ice Machine 1  
Chairs 33       Refrigerator 1   Tables 7       Accessories 28   Couch 1      
Curtains 4   Ice Machine 1             Refrigerator 1             Amplifier 1  
          Sonos Sound Equip 1             Game Table Tops 2            
Accessories 20      

 

 

 

 

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

4

ITEM DESCRIPTION

  MFG/MODEL #   SERIAL #   AMOUNT 16 Gallon Wet/Dry Vacuum   Ridgid/WD 1851  
13282 R 0324   1 Heavy Duty Key Milling Machine   Ilco/045HD   PD012543   1 13"
Commercial Vacuum   Sanitaire/SC9180B   SU111340007001   1 Pressure Washer 3000
PSI   Mi-T-M/WP-3000HDHB   10748890   1 Hand Held Power Auger   General Wire/PVF
  IPV380526   1 Backpack Shoulder Vacuum   Hoover/C2401   C14A (?)   1 Backpack
Air Blower   Echo/PB-755ST   P04112038587   1 Ozone Deodorizer   Queenaire/QTT24
  W53039283   1 Electronic Freon Charging Scale   Inficon/713-500-G1   1402 (?)
  1 Freon Recovery Machine   Inficon/714-202-G1   14-12087   1 5 CFM Vacuum Pump
  Robinair/288565   02AQ   1 Hammer/Drill 20 Volt Battery Powered  
DeWalt/DCD985   203323   1 Reciprocating Saw 20 Volt Battery Powered  
DeWalt/DCS381   740729   1 LED Flashlight 20 Volt Battery Powered  
DeWalt/DCL040   247733   1 Impact Driver 20 Volt Battery Powered   DeWalt/DCF885
  281488   1 Circular Saw 20 Volt Battery Powered   DeWalt/DCS393   ?   1 20
Volt Battery Charger   DeWalt/DCB101   ?   1 20 Volt Batteries   DeWalt/       2

 

1

 

  

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

ITEM DESCRIPTION

  MFG/MODEL #   SERIAL #   AMOUNT 8” Bench Grinder   DeWalt/DW758   2014
12-YL101796   1 3 Speed Carpet Fan   Windshear/3000  

04130B5232

04130B5236

04130B5235

  3 Hand Held Two Way UHF Radios   Motorola/RMU2040  

O24TPP8369 024TPP8503

024TTP8489

  3 5 Gallon Logo Bucket   NL/RG5500       2 35 Quart Mop Bucket/Wringer  
Rubbermaid/FG758088YEL       1 60" Super Jaws Mop Handle (2 pack)  
NL/01207-NBHDS       2 Telescoping Adjustable Handle   Rubbermaid/FGQ760000000  
    1 18" Wet/Dry Mop Head   Rubbermaid/FGQ56000YL00       1 44 Gallon Vented
Brute Trash Can   Rubbermaid/264360 Gray       9 44 Gallon Brute Trash Can Lid  
Rubbermaid/FG264560BLA       9 44 Gallon Brute Trash Can Dolly  
Rubbermaid/FG264000BLA       1 45 Gallon Trash Can w/Lid and Wheels  
Rubbermaid/RM134501       1 10 Quart Bucket   Huskee/5U028       2 26" Wet Floor
Sign   NL/AF03742       4 8' Fiberglass Step Ladder   Louisville/L-3016-08      
1 6' Fiberglass Step Ladder   Louisville/L-3016-06       1 Wood Handle Corn
Broom (2 pack)   HD/00312-HDS       1 55" Large Angle Broom (3 pack)  
HD/00402-12HDS       3

2

 

 

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

ITEM DESCRIPTION   MFG/MODEL #   SERIAL #   AMOUNT 3 Piece Rain Suit "X-Large"  
SAS Safety/6814-01       2 16" PVC Rubber Work Boots "Size 9"   SAS
Safety/7130-09       1 16" PVC Rubber Work Boots "Size 12"   SAS Safety/7130-12
      1 Digital Moisture Meter   Sonin/50218       1 MSDS Binder/Wall Mount  
SDS/6000-75       1 Dual Eye Wash Station   Honeywell/32-000465-0000       1
Aluminum Convertible Hand Truck   Milwaukee/45136       1 Aluminum Appliance
Hand Truck   Milwaukee/40187       1 25” Handle Dust Pan (jumbo)   NL/204      
2 5 Gallon Safety Gas Can w/Funnel   Justrite/000000010802       1 Industrial
First Aid Cabinet   Medifirst/734HDS       1 Clear Glass Safety Glasses  
Radnor/RAD64051271       3 25' 16/3 Orange Extension Cord   SJTW/EC501625      
2 50' 16/3 Orange Extension Cord   SJTW/EC501630       1 50' Contractor Grade
Garden Hose 3/4"   Swan/CELCF34050       1 75' Contractor Grade Garden Hose 3/4"
  Swan/CELCF34075       2 6" Rubber Plunger   Maint. Warehouse/GTR-1038       1
6" Heavy Duty Plunger   Maint. Warehouse/GTR-1036       1

 

3

 

  

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

ITEM DESCRIPTION   MFG MODEL #   SERIAL #   AMOUNT 2 Step - Folding Step Stool  
Costco/11-565-CLGG4       1 3' - 6' Length Toilet Auger   General Wire/T6FL    
  1 36" Lobby Dust Pan   HD/T09210JNKP-HDS       1 36" Pick Up Tool  
Unger/NN900       2 48" Round Point Shovel   Corona/SS 26000       1 48" Square
Point Shovel   Corona/SS 27000       1 First Aid Kit   Skilcraft/6545       1
Garden Hose Brass Nozzle   Pro/749470 (?)       1 3” Purdy Paint Brush  
Purdy/144380330       1 2.5” Purdy Paint Brush   Purdy/144152325       1 9”
Paint Roller Handle   HD/926430       2 10” Taping Knife   Wal-Board/18-030    
  1 3” Scraper Knife   Warner/27112009       1 5 in 1 Glazier Knife  
Warner/27112009       1 12” Plastic Mud Pan   Wal-Board/27-002       1 11 oz.
Caulking Gun   HD/531418       1 5 gal. Paint Bucket Grid   Linzer/RM 416      
2 2’ - 4’ Fiberglass Extension Pole   Long Arm/7504       1

 

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23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

ITEM DESCRIPTION   MFG MODEL #   SERIAL #   AMOUNT 4’ – 8’ Aluminum Extension
Pole   Ettore/43009       1 18" Snow Shovel   Bigfoot/1184       1 21" Snow
Pusher   Bigfoot/1201       1 Paint and Pesticide Respirator   North/R95       2
Lower Back Support (med.)   SAS/7162       1 Lower Back Support (lg.)   SAS/7163
      1 Utility Knife   Stanley/10-099       2 24” Bolt Cutter   HD/131354      
1 6” Bench Vise   Olympia/616       1 Staple Gun Tacker   Stanley/TR150HL      
1 18” Wrecking Bar   HD/132616       1 Carpenters Quick Square Aluminum  
Stanley/46-067       1 60” Garden Bow Rake   Corona/RK 20002       1 8 Lb.
Sledge Hammer   Corona/ST 40001       1 65 Piece Drill Bit Acc. Kit  
DeWalt/SW2583       1 Drywall Utility Saw   Wal-Board/04-030       1 24” Level  
Stanley/42-240       1 Mini Hacksaw   Stanley/15-809X       1

5

 

 

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

ITEM DESCRIPTION   MFG MODEL #   SERIAL #   AMOUNT Folding Saw Horse  
Stanley/060852R       2 (set) 15” Coarse Cut Hand Saw   Irwin/2011201       1
Nitrogen Regulator   TurboTorch/245-02P       1 8 Piece Spade Drill Bit Set  
Irwin/341008       1 10 Piece 6” T-Handle Hex Wrench Set   Eklind/50160       1
Basin Wrench   HD/145507       1 30 Lb. Freon Recovery Cylinder   HD/149873    
  1 50 Lb. Freon Recovery Cylinder   HD/150102       1 PVC Cutter   General/SUS
      1 Copper Cutter   Ridgid/86127       1 28" Bright Orange Traffic Cones  
SAS Safety/7500-28       10 24" Hvy-Dty Push Broom (2 pack)   Abco/BH-00805    
  2 Flashlights   Maglite/S2D016       2 28” Feather Duster   HD/103       1
Safety Ear Plugs   Leight/AS-30R       3 Safety Face Sheilds   SAS/5140       2
Reflective Safety Vests   SAS/690-1208       2 7 Piece Hammer Drill Bit Set  
Bosch/HCBG700T       1

 

6

 

 

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

ITEM DESCRIPTION   MFG MODEL #   SERIAL #   AMOUNT 118 Piece Metric/Stnd. Socket
Set   GearWrench/83001D       1 9’ x 12’ Painters Drop Cloths 8 oz.  
EZ-One/41-CD912H       2 Garden Hose Nozzles   HD/749476       2 Re-Keying Tool
  Kwikset/83260       1 24’ Aluminum Extension Ladder   Louisville/L2121-24    
  1 Toilet Sanitary Brushes   HD/908658       2 Oxy-Acetylene Torch Kit  
Campbell/WT500000AV       1 Freon Charging Manifold   JB/M2-5-410A       1 25’
Measuring Tape   DeWalt/DWHT33373L       1 Disposable Respirators   SAS/8610    
  1 box 2 Gallon Poly Sprayer   Chapin/21220XP       1 15” Utility Pry Bar  
HD/132613       1 Water Heater Element Removal Tool   HD/145750       1 2’
Aluminum Step Ladder   Louisville/L-2012-02       1 3 Lb. Sledge Hammer  
Plumb/11649       1 Yellow Rubber Gloves   HD/115607       3 Rubber Waste
Baskets   Rubbermaid/RCP2957GRY       2 Steel Padlocks   Master/3       2

 

7

 

 

23Hundred at Berry HillMaintenance Inventory List Date: November 11, 2014

 

ITEM DESCRIPTION   MFG MODEL #   SERIAL #   AMOUNT 30 Gallon Flammable Storage
Cabinet   Justrite/893020       1 14” Window Strip Washer   Ettore/53014       1
18” Heavy Duty Pipe Wrench   Superior/02818       1 95 Gallon Trash Cans
w/Wheels   Rubbermaid/9W22       5 Heavy Duty Maintenance Cart  
Rubbermaid/FG450088BLA       3 Screw Top Funnel (3 pack)   Delta
Sprayers/FMBLUE-3       1 24 Ounce Orbital Sprayer (3 pack)   Delta
Sprayers/ORB2498-12P       1 Individual/Master Keying Kit   Schlage/OMK118      
1 Handheld Spreader   EV-N-Spred 3400       1 40 CF Nitrogen Cylinder  
HD/235011       1 Hole Saw Kit   Vermont Amer./       1 Mini Fridge   Magic
Chef/HMBR350SE       1 2 Gallon Plastic Gas Can           1

 

8

 

 

Schedule 1.1(e)

 

RENT ROLL

 

[Redacted]

 

 

 

 

Schedule 1.5

 

ESCROW AGENT WIRING INSTRUCTIONS

 

New York – National Commercial Services

 

BANK: First American Trust 5 First American Way

Santa Ana, CA 92707

 

ABA NO.: 122241255

 

For Credit To: First American Title Insurance Company

 

Account Number: 3023140000

 

Reference: Title No. / Deal Name:    

 

Property Address:

 

First American Contact:

       

 

 

 

 

Schedule 3.1

 

SELLER’S DELIVERIES

 

1.Contracts. Master list and copies of all contracts pertaining to the Property
in Seller’s possession.

 

2.Operating Statements. Current operating statement of the Property, from
commencement of operations to YTD 2014, in form routinely prepared by or for the
benefit of Seller.

 

3.Utilities. A list of all utilities (gas, electric, water and sewer) servicing
the Property, together with a monthly utility log for 2014 from each utility and
copies of the bills from each utility for the prior 3 months.

 

4.Tax Bills. The tax bills from commencement of operations to YTD 2014 relating
to the Property (including, but not limited to, property, personal and rental
taxes, and any special assessments).

 

5.Inventory. A current inventory of all Tangible Personal Property owned by
Seller.

 

6.Certificates of Occupancy and Permits. All certificates of occupancy and all
other related permits (including pool permits), licenses (including business
licenses), and other approvals issued by the appropriate governmental
authorities relating to the Property in Seller’s possession or control, all to
be available on-site at the Property.

 

7.Insurance. Copies of all loss runs from commencement of operations to YTD 2014
.

 

8.Plans and Specifications. Plans and specifications for the Improvements
relating to the Property in Seller’s possession or control, all to be available
on-site at the Property.

 

9.Rent Roll.

 

10.Aging Receivable Detail.

 

11.Unit Mix with Rent Schedule, including any specials or promotions

 

12.List of on-site positions.

 

13.Lease Form

 

14.Property Brochure (N/A – all on website)

 

15.Resident Profile

 

16.Lease files, to be available on site at Property

 

17.List of office, model and employee units

 

 

 

 

18.Tenant qualification criteria

 

19.Copies of all unexpired warranties, including the roof warranty

 

20.Most current termite bond/inspection report

 

21.Outstanding litigation information

 

 

 

 

 

 

Schedule 4.2(a)

 

FORM OF SPECIAL WARRANTY DEED

 

This Instrument Prepared By:

 

SPECIAL WARRANTY DEED

 

Address New Owner as Follows: Send Tax Bills To:
                                                                             
                                                                               
  Map & Parcel No.:

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
acknowledged, SH 23HUNDRED TIC, LLC, a Tennessee limited liability company, BGF
23HUNDRED, LLC, a Delaware limited liability company, and 23HUNDRED, LLC, a
Delaware limited liability company, as tenants-in-common (collectively,
“Grantor”) has bargained and sold, and hereby transfers and conveys
to                              , a                           (“Grantee”), its
successors and assigns, certain land in Davidson County, Tennessee, being more
particularly described in Exhibit A attached hereto and incorporated herein by
reference (the “Property”)

 

The Property is improved property located at 2300 Franklin Pike, Nashville, TN
37204.

 

TO HAVE AND TO HOLD the Property with all appurtenances, estate, title, and
interest thereto belonging to Grantee, its successors and assigns, forever.

 

STATE OF TENNESSEE )     COUNTY OF DAVIDSON )       The actual consideration or
value, whichever is greater, for this transfer is $                    .        
Affiant Subscribed and sworn to before           me this day        of , 20    .
                    Notary Public     MyCommission Expires:  

 

 

 

 

Grantor does hereby covenant with Grantee that it is lawfully seized and
possessed of the Property in fee simple and that it has good right to sell and
convey the same.

 

Grantor does further covenant and bind itself, its successors and assigns, to
warrant and forever defend the title to the Property against the lawful claims
of all persons claiming by, through or under Grantor, but no further or
otherwise, subject however to the matters set forth on Exhibit B.

 

 

 

 

Executed as of the             day of               , 20 .

 

  GRANTOR:

 

  SH 23HUNDRED TIC, LLC, a Tennessee limited liability company

 

  By: Stonehenge 23Hundred JV Member, LLC, a Tennessee limited liability
company, its sole member

 

  By: Stonehenge  23Hundred   Manager, LLC, a Tennessee limited liability
company, its Manager

 

  By: Stonehenge   Real   Estate Group, LLC, a Georgia limited liability
company, its Manager

 

  By:   Todd Jackovich, its Manager

 

STATE OF                       )

COUNTY OF                    )

 

Personally appeared before me,                        , Notary Public,
                         , with whom I am personally acquainted and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is acting in his capacity
as                       of                      , a               , and that he
is authorized by said                          , to execute this instrument on
behalf of                      .

 

WITNESS my hand, at office, this                       day
of                      , 20     .

 

 
                                                                                                                
  Notary Public   My Commission Expires:
                                                                   

 

 

 

  

  GRANTOR:

 

  BGF  23HUNDRED,  LLC,  a  Delaware  limited liability company

 

  By: Bluerock Growth Fund, LLC, its sole member

 

  By: Bluerock  Fund  Manager,  LLC,  its manager

 

  By:     Jordan Ruddy, its Authorized Signatory

 

STATE OF                     )

COUNTY OF                 )

 

Personally appeared before me,                  , Notary Public,
                 , with whom I am personally acquainted and who acknowledged
that he executed the within instrument for the purposes therein contained, and
who further acknowledged that he is acting in his capacity as                 
of                  , a                    , and that he is authorized by said
                 , to execute this instrument on behalf of                    .

 

WITNESS my hand, at office, this                  day of                 ,
20      .

 

      Notary Public     My Commission Expires:                    

 

 

 

 

 

 

GRANTOR:

 

  23HUNDRED, LLC, a Delaware limited liability company  

 

  By: BR Stonehenge 23Hundred JV, LLC, its sole member

 

By:BR Berry Hill Managing Member, LLC, its manager    By: BEMT Berry Hill, LLC,
its manager  

By:Bluerock Residential Holdings, L.P., its sole member

 

By:Bluerock Residential Growth REIT, Inc., its general partner

 

  By:    Michael L. Konig, its Senior Vice President and Chief Operating Officer

 

STATE OF                                     )

COUNTY OF                                  )

 

Personally appeared before me,                                  ,    Notary
Public,                        , with whom I am personally acquainted and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is acting in his capacity
as                                of                               ,
a                            , and that he is authorized by
said                       , to execute this instrument on behalf of
                                                                                         .

 

WITNESS my hand, at office, this                       day
of                       , 20.        

 

 
                                                                                                               
  Notary Public   My Commission Expires:
                                                                   

 

 

 

 

Exhibits to Special Warranty Deed

 

A - Legal Description of Land

 

B - Permitted Exceptions

 

 

 

 

Schedule 4.2(b)

 

FORM OF BILL OF SALE AND ASSIGNMENT AND

ASSUMPTION OF LEASES AND SERVICE CONTRACTS

 

 

 

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

 

This Bill of Sale and Assignment and Assumption of Leases and Service Contracts
(this “Agreement”) is made and entered into this      day of       , 20     , by
and between each of SH 23HUNDRED TIC, LLC, a Tennessee limited liability
company, BGF 23HUNDRED, LLC, a Delaware limited liability company, and
23HUNDRED, LLC, a Delaware limited liability company, as tenants-in-common
(collectively, “Seller”), and, a                                  (“Purchaser”).

 

WITNESSETH:

 

WHEREAS, Seller and Purchaser have previously entered into that certain Purchase
and Sale Agreement, dated                                   , 20
         [DESCRIBE AMENDMENTS, IF APPLICABLE] (the “Contract”), having
                                   as a party for the limited purposes set forth
therein;

 

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

 

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

 

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

 

 

 

 

1.          Bill of Sale.

 

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

 

(b)          “Tangible Personal Property” shall have the meaning ascribed to
such term in the Contract.

 

(c)          “Intangible Property” shall have the meaning ascribed to such term
in the Contract.

 

2.          Assignment and Assumption of Leases.

 

(a)          Seller hereby sells, assigns, transfers and conveys to Purchaser
all of Seller’s right, title and interest as landlord in, to and under all
Leases (as defined in the Contract), together with any and all unapplied
refundable tenant security and other unapplied refundable deposits in Seller’s
possession or control with respect to the Leases as of the date of this
Agreement (collectively, the “Deposits”). The assignment of the Deposits has
been made by means of a credit or payment on the closing statement executed by
Seller and Purchaser pursuant to the Contract.

 

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

 

(c)          Purchaser shall indemnify, hold harmless and defend Seller from and
against any and all claims, demands, causes of action, liabilities, losses,
costs, damages and expenses (including reasonable attorneys’ fees and expenses
and court costs incurred in defending any such claim or in enforcing this
indemnity) that may be incurred by Seller by reason of the failure of Purchaser
to perform, observe and comply with the landlord’s obligations under any of the
Leases arising or accruing during the period from and after the date hereof,
including without limitation, claims made by tenants with respect to the
Deposits, whether arising before, on or after the date hereof (to the extent
paid or assigned to Purchaser or for which Purchaser has received a credit or
payment at Closing). Seller shall indemnify, hold harmless and defend Purchaser
from and against any and all claims, demands, causes of action, liabilities,
losses, costs, damages and expenses (including reasonable attorneys’ fees and
expenses and court costs incurred in defending any such claim or in enforcing
this indemnity) that may be incurred by Purchaser by reason of the failure of
Seller to perform, observe and comply with the landlord’s obligations under any
of the Leases arising or accruing during the period prior to the date hereof,
including without limitation, claims made by tenants with respect to the
Deposits arising before the date hereof (to the extent such Deposits were not
paid or assigned to Purchaser or for which Purchaser did not receive a credit or
payment at Closing).

 

 

 

 

(d)          For purposes of this Paragraph 2, the word “landlord” means the
landlord, lessor or other equivalent party under any of the Leases, and the word
“tenant” means the tenant, lessee or other equivalent party under any of the
Leases.

 

3.          Assignment and Assumption of Service Contracts.

 

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

 

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

 

(c)          Purchaser shall indemnify, hold harmless and defend Seller from and
against any and all claims, demands, causes of action, liabilities, losses,
costs, damages and expenses (including reasonable attorneys’ fees and expenses
and court costs incurred in defending any such claim or in enforcing this
indemnity) that may be incurred by Seller by reason of the failure of Purchaser
to perform, observe and comply with its obligations under any of the Service
Contracts arising or accruing during the period from and after the date hereof,
including without limitation, claims made by any other contract party with
respect to the Credited Payments, whether arising before, on or after the date
hereof (to the extent paid or assigned to Purchaser or for which Purchaser
received a credit or payment at Closing). Seller shall indemnify, hold harmless
and defend Purchaser from and against any and all claims, demands, causes of
action, liabilities, losses, costs, damages and expenses (including reasonable
attorneys’ fees and expenses and court costs incurred in defending any such
claim or in enforcing this indemnity) that may be incurred by Purchaser by
reason of the failure of Seller to perform, observe and comply with its
obligations under any of the Service Contracts arising or accruing during the
period prior to the date hereof, including without limitation, claims made by
any other contract party with respect to the Credited Payments, arising before
the date hereof (to the extent such Credited Payments were not paid or assigned
to Purchaser or for which Purchaser did not receive a credit or payment at
Closing)

 

4.          Qualifications. This Agreement is subject to the Permitted
Exceptions (as defined in the Contract). This Agreement is also subject to those
provisions of the Contract limiting Seller’s liability to Purchaser, including
but not limited to Section 11.21 of the Contract.

 

 

 

 

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

 

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

 

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

 

 

 

 

EXECUTED effective as of the date first above written.

 

SELLER:

 

 SH 23HUNDRED TIC, LLC, a Tennessee limited liability company    

By:Stonehenge 23Hundred JV Member, LLC, a Tennessee limited liability company,
its sole member

 

By:Stonehenge 23Hundred Manager, LLC, a Tennessee limited liability company, its
Manager

 

By:Stonehenge Real Estate Group, LLC, a Georgia limited liability company, its
Manager

 

 By:                                                      Todd Jackovich, its
Manager

 

  BGF 23HUNDRED, LLC, a Delaware limited liability company

 

By:Bluerock Growth Fund, LLC, its sole member

 

By:Bluerock Fund Manager, LLC, its manager

 

By:                                                   Jordan Ruddy, its
Authorized Signatory

 

 

 

 

23HUNDRED, LLC, a Delaware limited liability company

 

  By: BR Stonehenge 23Hundred JV, LLC, its sole member

        By: BR Berry Hill Managing   Member, LLC, its manager

        By: BEMT Berry Hill, LLC, its manager

        By: Bluerock Residential Holdings, L.P., its sole member

        By: Bluerock Residential Growth REIT, Inc., its general partner

        By:                                                 Michael L. Konig,
its Senior Vice President and Chief Operating Officer

 

 

 

 

PURCHASER:

 

                                                       , a
                                                   

 

By:                                                                     

 Name:                                                            

 Title:                                                          

 

 

 

 

Exhibits to Bill of Sale and Assignment

 

A - Legal Description of Land

 

B - List of Designated Service Contracts

 

 

 

 

Schedule 4.2(d)

 

FORM OF SELLER’S CLOSING CERTIFICATE

 

 

 

Seller’s Closing Certificate

 

THIS CERTIFICATION is made as of                                          , 20
by each of SH 23HUNDRED TIC, LLC, a Tennessee limited liability company, BGF
23HUNDRED, LLC, a Delaware limited liability company, and 23HUNDRED, LLC, a
Delaware limited liability company, jointly and severally (collectively,
“Seller”), in favor of                       , a
                    (“Purchaser”).

 

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

hereof, except as to:

 

  (a) The Rent Roll attached hereto as Exhibit A replaces the Rent Roll attached
to the Agreement as Schedule 1.1(e); and         (b) [If applicable: The items
disclosed on Exhibit B attached hereto replace Seller’s Disclosure Schedule
attached to the Agreement as Schedule 5.1].

 

The representations and warranties set forth in Section 5.1 of the Agreement, as
updated by this Certificate of Seller’s Representations and Warranties, will
survive only for the period set forth in Section 5.3 of the Agreement.

 

 

 

 

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

 

 

  

SH 23HUNDRED TIC, LLC, a Tennessee limited liability company

   

By:Stonehenge 23Hundred JV Member, LLC, a Tennessee limited liability company,
its sole member

 

By:Stonehenge 23Hundred Manager, LLC, a Tennessee limited liability company, its
Manager

 

By:Stonehenge Real Estate Group, LLC, a Georgia limited liability company, its
Manager

 

 By:                                                       Todd Jackovich, its
Manager

 

  BGF 23HUNDRED, LLC, a Delaware limited liability company  

 

By:Bluerock Growth Fund, LLC, its sole member

 

By:Bluerock Fund Manager, LLC, its manager

 

By:                                                                     Jordan
Ruddy, its Authorized Signatory

 

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

 

 

  23HUNDRED, LLC, a Delaware limited liability company

 

  By: BR Stonehenge 23Hundred JV, LLC, its sole member      

By:BR Berry Hill Managing Member, LLC, its manager

 

  By: BEMT Berry Hill, LLC, its manager      

By:Bluerock Residential Holdings, L.P., its sole member

 

By:Bluerock Residential Growth REIT, Inc., its general partner

 

By:                                                                 Michael L.
Konig, its Senior Vice President and Chief Operating Officer

 

 

 

 

Exhibits to Seller’s Closing Certificate

 

Exhibit A   —      Updated Rent Roll

 

Exhibit B    —     Additional Items for Seller’s Disclosure Schedule [if
applicable]

 

 

 

 

Schedule 4.2(g)

 

FORM OF SELLER’S AFFIDAVIT

 

 

 

Seller’s Af f id avit

 

STATE OF                                                        

COUNTY OF                                                    

 

Personally appeared before me the undersigned deponents, who, first being duly
sworn, each deposes and says on oath the following:

 

1.          THAT Todd Jackovich is the Manager of Stonehenge Real Estate Group,
LLC, a Georgia limited liability company, the Manager of Stonehenge 23Hundred
Manager, LLC, a Tennessee limited liability company, the Manager of Stonehenge
23Hundred JV Member, LLC, a Tennessee limited liability company, the sole member
of SH 23HUNDRED TIC, LLC, a Tennessee limited liability company (“Stonehenge”),
and in such capacity is familiar with the affairs of Stonehenge and is
authorized to execute this Affidavit on behalf of Stonehenge; and

 

2.          THAT Jordan Ruddy is an Authorized Signatory of Bluerock Fund
Manager, LLC, the Manager of Bluerock Growth Fund, LLC, the sole member of BGF
23HUNDRED, LLC, a Delaware limited liability company (“BR1”), and in such
capacity is familiar with the affairs of BR1 and is authorized to execute this
Affidavit on behalf of BR1; and

 

3.          THAT Michael L. Konig is the Senior Vice President and Chief
Operating Officer of Bluerock Residential Growth REIT, Inc., the general partner
of Bluerock Residential Holdings, L.P., the sole member of BEMT Berry Hill, LLC,
the manager of BR Berry Hill Managing Member, LLC, the manager of BR Stonehenge
23Hundred JV, LLC, the sole member of 23HUNDRED, LLC, a Delaware limited
liability company (“BR2”), and in such capacity is familiar with the affairs of
BR2 and is authorized to execute this Affidavit on behalf of BR2;

 

4.          That Stonehenge, BR1 and BR2 collectively own, as tenants in common,
those certain tracts or parcels of land more particularly described on Ex hibit
“A” attached hereto and by reference made a part hereof (the “Property”); and

 

5.          THAT this Affidavit pertains to the Property; and

 

6.          THAT none of Stonehenge, BR1 or BR2 has made improvements or repairs
on the Property during the one hundred twenty (120) days immediately preceding
this date, and there are no outstanding bills incurred by any such parties for
labor or materials used in making improvements or repairs on the Property, or
for services of architects, surveyors, engineers, or registered foresters
incurred in connection therewith; and

 

 

 

 

7.          THAT there are no parties in possession claiming by, through or
under Stonehenge, BR1 or BR2 except for those parties exercising their rights as
set forth on Exhibit “B” attached hereto and by reference made a part hereof;
and

 

8.          THAT, none of Stonehenge, BR1 or BR2 has engaged any broker’s
services with regard to the sale or other conveyance of any interest in the
Property, except as set forth on the final approved closing statement for the
sale of the Property; and

 

9.          THAT each deponent has personal knowledge of the matters herein
stated and makes this Affidavit for the purpose of
inducing                                     to issue its policy or policies of
title insurance covering the Property; and

 

10.         THAT there are not unpaid or unsatisfied special assessments for
water, sewage or street improvements affecting title to the Property, except as
set forth in said Ex hibit “B. ”

 

 

 

 

  SH 23HUNDRED TIC, LLC, a Tennessee limited liability company    

By:Stonehenge 23Hundred JV Member, LLC, a Tennessee limited liability company,
its sole member

 

By:Stonehenge 23Hundred Manager, LLC, a Tennessee limited liability company, its
Manager

 

By:Stonehenge Real Estate Group, LLC, a Georgia limited liability company, its
Manager

 

 By:                                                                   Todd
Jackovich, its Manager

 

Sworn to and subscribed before me,

this                         day of                           , 20             .

 

(SEAL)

 

                                              

Notary Public

 

My Commission Expires:

 

                                              

 

(NOTARIAL SEAL)

 

 

 

  BGF 23HUNDRED, LLC, a Delaware limited liability company  

 

By:Bluerock Growth Fund, LLC, its sole member

 

By:Bluerock Fund Manager, LLC, its manager

 

 By:                                                                   Jordan
Ruddy, its Authorized Signatory

 

Sworn to and subscribed before me,

this         day of                                            , 20          .

 

(SEAL)

 

                                                          

Notary Public

 

My Commission Expires:

 

                                                           

 

(NOTARIAL SEAL)

 

 

 

 

23HUNDRED, LLC, a Delaware limited liability company

 

 By:BR Stonehenge 23Hundred JV, LLC, its sole member    

By:BR Berry Hill Managing Member, LLC, its manager

 

 By:BEMT Berry Hill, LLC, its manager    

By:Bluerock Residential Holdings, L.P., its sole member

 

By:Bluerock Residential Growth REIT, Inc., its general partner

 

By:                                                           Michael L. Konig,
its Senior Vice President and Chief Operating Officer

 

Sworn to and subscribed before me,

this        day of                                       , 20       .

 

(SEAL)

 

                                            

Notary Public

 

My Commission Expires:

                                               

 

(NOTARIAL SEAL)

 

 

 

 

Schedule 5.1

 

SELLER’S DISCLOSURE STATEMENT

 

None.

 

 

 

 

Schedule 5.1(e)

 

SCHEDULE OF SERVICE CONTRACTS

 

    NAME OF AGREEMENT   PARTIES TO AGREEMENT           1.   Purchase and Order
Agreement (Key Track System)   By  and  between  HandyTrac  and  23Hundred, LLC
dated 10/22/13           2.   New Construction Subterranean Termite Service
Record   With Southern Exterminating, Inc. dated 12/2/14           3.   AT&T
Connected Communities MDU Non-Exclusive Marketing Contract ("Contract") New
Construction Property   By and between BellSouth Telecommunications, LLC and
23Hundred, LLC dated 4/29/13           4.   Installation and Service Agreement  
By and between Comcast of Nashville I, LLC and 23Hundred LLC dated 9/1/13      
    5.   Customer Service Agreement (Trash Collection)   By and between Allied
Waste and 23Hundred Apartments dated 10/5/13           6.   Apartment Selector
Listing Agreement   By and between Apartment Selector and Matrix Residential, as
Agent of Stonehenge           7.   Internet Advertising Agreement   By and
between Matrix Residential, as Management Company, and Apartments.com dated
6/10/14           8.   Service Agreement (Commercial Pest Management)   By and
between Arrow Exterminators and Melissa White, on behalf of Management Company
dated 7/15/13           9.   Contact at Once! Service Order Form (Online
Messaging)   By  and  between  Contact  at  Once!  LLC  and 23Hundred dated
5/20/13           10.   Ad Insertion Agreement (Internet Advertising)   By and
between For Rent Media Solutions and Matrix Residential, as Management Company
for 23 Hundred at Berry Hill, dated 5/10/13           11.   Order Form (Text
Messaging Service)   By and between IRIO and Dana Pate, Marketing Director for
Matrix Residential, dated 5/9/13           12.   Order Form (Answering Service)
  By and  between  RP  Newco  LLC  d/b/a  Level One and Matrix Residential, LLC
dated 12/10/13           13.   Property Activation Agreement (Locator Service)  
By and  between  Rent.com  and  Dana  Pate,  as Marketing Director of Matrix
Residential, dated 5/9/13           14.   Service Agreement (Event Coordinators)
  With Ctram, dated April 14, 2014

 

 

 

 

Schedule 5.4(b)(i)

 

LEASE RENEWAL AND AMENDMENT NOTICES

 

Lease renewal notices for leases expiring in November 2014:

 

Apt #  Resident's Name  Lease
Expiration
Date 463  [Personal information redacted]  11/21/2014 465  [Personal information
redacted]  11/21/2014 471  [Personal information redacted]  11/24/2014 475 
[Personal information redacted]  11/21/2014 477  [Personal information
redacted]  11/21/2014 487  [Personal information redacted]  11/21/2014

 

Lease renewal notices for leases expiring in December 2014:

 

Apt #  Resident's Name  Lease
Expiration
Date 483  [Personal information redacted]  12/1/2014 371  [Personal information
redacted]  12/3/2014 373  [Personal information redacted]  12/3/2014 370 
[Personal information redacted]  12/4/2014 369  [Personal information redacted] 
12/5/2014 391  [Personal information redacted]  12/11/2014 265  [Personal
information redacted]  12/13/2014 268  [Personal information redacted] 
12/13/2014 375  [Personal information redacted]  12/13/2014 383  [Personal
information redacted]  12/13/2014 479  [Personal information redacted] 
12/13/2014 281  [Personal information redacted]  12/17/2014 270  [Personal
information redacted]  12/25/2014 287  [Personal information redacted] 
12/26/2014 168  [Personal information redacted]  12/27/2014 269  [Personal
information redacted]  12/27/2014 389  [Personal information redacted] 
12/31/2014

 

 

 

 

Lease renewal notices for leases expiring in January 2015:

 

Apt #  Resident's Name  Lease
Expiration
Date 169  [Personal information redacted]  1/2/2015 365  [Personal information
redacted]  1/2/2015 467  [Personal information redacted]  1/2/2015 185 
[Personal information redacted]  1/4/2015 171  [Personal information redacted] 
1/5/2015 379  [Personal information redacted]  1/5/2015 470  [Personal
information redacted]  1/5/2015 179  [Personal information redacted]  1/6/2015
377  [Personal information redacted]  1/6/2015 170  [Personal information
redacted]  1/12/2015 285  [Personal information redacted]  1/13/2015 363 
[Personal information redacted]  1/13/2015 271  [Personal information redacted] 
1/26/2015 277  [Personal information redacted]  1/27/2015 546  [Personal
information redacted]  1/30/2015 291  [Personal information redacted]  1/31/2015
481  [Personal information redacted]  1/31/2015

 

Lease renewal notices for leases expiring in February 2015:

 

Apt #  Resident's Name  Lease
Expiration
Date 552  [Personal information redacted]  2/1/2015 5  [Personal information
redacted]  2/1/2015 177  [Personal information redacted]  2/2/2015 165 
[Personal information redacted]  2/11/2015 6  [Personal information redacted] 
2/13/2015 504  [Personal information redacted]  2/13/2015 554  [Personal
information redacted]  2/13/2015 101  [Personal information redacted]  2/23/2015
531  [Personal information redacted]  2/23/2015 506  [Personal information
redacted]  2/24/2015 7  [Personal information redacted]  2/25/2015 515 
[Personal information redacted]  2/25/2015 289  [Personal information redacted] 
2/27/2015 404  [Personal information redacted]  2/27/2015

 

 

 

 

Schedule 5.4(b)(ii)

 

LEASING GUIDELINES

 

Application Fee: $125
Administration Fee: $250

(For the majority of the lease up the application fee was reduced to $50 and the
Administration fee was reduced to $49 encourage prospect to apply within a 24
hour period.)

 

Deposit: $500 initial deposit, up to $1400.

We also offered Lease Term solutions as the Deposit alternative. $75 would cover
up to $500, or $125 lease term (covers up to $1000) + $400 additional deposit.

 

Pet Policy

·No Aggressive Breeds

·$100 Pet Deposit for one pet - $200 Pet Deposit for two. (Refundable upon move
out)

·$250 one time pet fee – non-refundable.

·$10 per month pet rent

 

Late Fees

·Rent is considered late after the 5th of each month.

·Late fee varies per lease agreement. Originally it was 10% of the leased rate.
But we are in the process of changing this over to a flat $100 late fee.

·File evictions on the 10th of each month.

 

No upfront concessions were given during the lease up. We used Gift Cards in
lieu of concessions. We gave out (19) - $500 Gift Cards and one (1) - $250 Gift
Card for move in incentives.

 

 

 

 

Schedule 5.8(b)

 

SCHEDULE OF MUST TAKE SERVICE CONTRACTS

 

    NAME OF AGREEMENT   PARTIES TO AGREEMENT           1.   Purchase and Order
Agreement (Key Track System)   By  and  between  HandyTrac  and  23Hundred, LLC
dated 10/22/13           2.   New Construction Subterranean Termite Service
Record   By  and  between  Southern  Exterminating,  Inc. and Builder dated
12/2/14           3.   AT&T Connected Communities MDU Non- Exclusive Marketing
Contract ("Contract") New Construction Property   By and between BellSouth
Telecommunications, LLC and 23Hundred, LLC dated 4/29/13           4.  
Installation and Service Agreement   By and between Comcast of Nashville I, LLC
and 23Hundred LLC dated 9/1/13           5.   Customer Service Agreement (Trash
Collection)   By and between Allied Waste and 23Hundred Apartments dated 10/5/13
          6.   Service Agreement (Commercial Pest Management)   By and between
Arrow Exterminators and Melissa White, on behalf of Management Company dated
7/15/13           7.   Ad Insertion Agreement (Internet Advertising)   By and
between For Rent Media Solutions and Matrix Residential, as Management  Company
for 23 Hundred at Berry Hill, dated 5/10/13

 

 

 

 

Schedule 12.1

 

FORM OF CONDOMINIUM CONVERSION AGREEMENT

 

Return after recording to:                                              

SPACE ABOVE THIS LINE FOR RECORDER’S USE

 

23Hundred at Berry Hill

 

PROHIBITION AGAINST

CONDOMINIUM CONVERSION AGREEMENT

 

THIS PROHIBITION AGAINST CONDOMINIUM CONVERSION AGREEMENT (the “Condominium
Agreement”) is made and entered into as of, 20   , by and between________
(“Purchaser”) and each of SH 23HUNDRED TIC, LLC, a Tennessee limited liability
company, BGF 23HUNDRED, LLC, a Delaware limited liability company, and
23HUNDRED, LLC, a Delaware limited liability company, as tenants-in-common
(collectively, “Seller”).

 

WITNESSETH:

 

WHEREAS, Seller and Purchaser have entered into that certain Purchase and Sale
Agreement dated as of December , 2014 (the “Sale Agreement”) relating to the
sale by Seller to Purchaser of that parcel of real property located in Davidson
County, Tennessee, and more particularly described on Exhibit “A” attached
hereto (the “Land”), together with certain apartment buildings and related
personal property and other rights located thereon and relating thereto (the
“Improvements” and the Land and the Improvements collectively referred to herein
as the “Property”).

 

WHEREAS, as a condition to Seller conveying the Property to Purchaser and in
consideration of Seller accepting the purchase price and conveying the Property
as set forth in the Sale Agreement to Purchaser, Purchaser has agreed with
Seller to execute and record this Condominium Agreement providing for certain
restrictions relating to the future use of the Property for a period of time
after the date of this Condominium Agreement as more fully set forth herein.

 

 

 

 

NOW, THEREFORE, in consideration of the mutual covenants and undertakings set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, Seller and Purchaser hereby agree
as follows:

 

Section 1. Definitions and Interpretation. The following terms shall have the
respective meanings assigned to them in this Section I unless the context in
which they are used clearly requires otherwise:

 

“Assumption Agreement” – As defined in Section 2 hereof.

 

“Condominium Conversion” - Shall mean the filing or recording of any document
providing for the conversion of the Property to a form of condominium ownership
under any state or local statute or ordinance.

 

“County” - The county in which the Land is located.

 

“Deed” - Limited Warranty Deed.

 

“Event of Default” - As defined in Section 11 hereof.

 

“First Mortgage” – As defined in Section 20(a) hereof.

 

“First Mortgagee” – As defined in Section 20(a) hereof.

 

“Hazardous Materials” or “Hazardous Substances” - Shall mean (i) hazardous
wastes, hazardous materials, hazardous substances, hazardous constituents, toxic
substances or related materials, whether solids, liquids or gases, including but
not limited to substances defined as “hazardous wastes,” “hazardous materials,”
“hazardous substances,” “toxic substances,” “pollutants,” “contaminants,”
“radioactive materials”, “toxic pollutants”, or other similar designations in,
or otherwise subject to regulation under, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), 42
U.S.C. § 9601 et seq.; the Toxic Substance Control Act (“TSCA”), 15 U.S.C. §
2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1802; the
Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 9601, et seq.; the
Clean Water Act (“CWA”), 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act,
42 U.S.C. § 300f et seq.; the Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq.;
any Regional Water Quality Control Board; and in any permits, licenses,
approvals, plans, rules, regulations or ordinances adopted, or other criteria
and guidelines promulgated pursuant to the preceding laws or other similar
federal, state or local laws, regulations, rules or ordinance now or hereafter
in effect relating to environmental matters; and (ii) any other substances,
constituents or wastes subject to any applicable federal, state or local law,
regulation or ordinance, including any environmental law, now or hereafter in
effect, including but not limited to (A) petroleum, (B) refined petroleum
products, (C) waste oil, (D) waste aviation or motor vehicle fuel and their
byproducts, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H)
Polychlorinated Biphenyls (PCB’s), (I) ureaformaldehyde, (J) volatile organic
compounds (VOC), (K) total petroleum hydrocarbons (TPH), (L) benzene derivative
(BTEX), (M) petroleum byproducts and (N) methane gas or any of its derivatives.

 

 

 

 

“Improvements” - As defined in the Recitals hereof.

 

“Indemnified Parties” - As defined in Section 3 hereof.

 

“Land” - As defined in the Recitals hereof.

 

“Property” - As defined in the Recitals hereof.

 

“Property Conditions” - As defined in Section 3 hereof.

 

“Residential Rental Property” - Shall mean property used for the rental of
apartments to the general public under leases providing for residential use by
any occupant of any apartment.

 

“Purchaser” - As defined in the Preamble hereof. In the event more than one
person and/or entity executes this Condominium Agreement as Purchaser, each such
person and/or entity which comprises Purchaser under this Condominium Agreement
shall be jointly and severally liable for all of the obligations, covenants,
liabilities and indemnifications of the Purchaser under this Condominium
Agreement.

 

“Seller” - As defined in the Preamble hereof. “Term” - As defined in Section 7
herein.

 

“Units” - Shall mean any portion of the Property created in connection with any
Condominium Conversion.

 

Section 2. Residential Rental Property. The Purchaser hereby acknowledges and
agrees that during the Term of this Condominium Agreement:

 

(a.)            The Property shall at all times be used as Residential Rental
Property.

 

(b.)            The Property shall not be subject to any Condominium Conversion
and neither shall any portion of the Property be converted to Units for sale in
connection with a Condominium Conversion nor shall the title to any such Units
be transferred to any party.

 

(c.)            No part of the Property will at any time be owned or used as a
cooperative housing corporation, community apartment property or stock
corporation.

 

The Purchaser hereby covenants and agrees to include the requirements and
restrictions contained in this Condominium Agreement in any documents
transferring any interest (other than a leasehold interest to an individual
tenant) in the Property to another person to the end that such transferee had
notice of, and is bound by, the requirements and restrictions hereof, and to
obtain the agreement from any transferee in the form of Exhibit B attached
hereto (the “Assumption Agreement”) requiring said transferee to abide to all
the requirements and restrictions contained in this Condominium Agreement.

 

 

 

 

 

Section 3. Indemnification. In the event any of the provisions of Section 2
hereof are breached, Purchaser agrees to indemnify, defend and hold harmless the
Seller, and each of its members, partners, officers, directors, trustees,
affiliates, including but not limited to parents, subsidiaries, shareholders,
managers, beneficiaries, employees and agents (collectively, the “Indemnified
Parties”) from any and all demands, claims, including claims for personal
injury, property damage or death, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever, whether in tort, contract or otherwise (including without
limitation, court costs and attorneys’ fees and disbursements) arising out of,
or in any way relating to: (a) claims made or brought by any party or parties
who acquire or contract to acquire any ownership interest in the Property
following the date hereof, their agents, employees and successors and assigns in
connection with or related to (i) the physical condition of the Property
including, without limitation, latent or patent defects, and claims relating to
the existence of asbestos, any other construction defects, claims relating to
mold, all structural and seismic elements, all mechanical, electrical, plumbing,
sewage, heating, ventilating, air conditioning and other systems, the
environmental condition of the Property and the presence of Hazardous Materials
or Hazardous Substances on, under or about the Property, and (ii) any law or
regulation applicable to the Property, including, without limitation, any
environmental law and any other federal, state or local law (the matters
described in (i) and (ii) hereof collectively the “Property Conditions”); and
(b) a breach of any of the covenants, terms and conditions of this Condominium
Agreement by Purchaser or its successors and assigns. Purchaser and each of its
successors and assigns do now and shall at all times consent to the right of
Indemnified Parties to approve and appoint defense counsel and to participate in
or assume the defense of any claim. Until any determination is made in any
appropriate legal proceeding challenging the obligation of Purchaser herein,
Purchaser’s obligations under all the terms and provisions of this Section shall
remain in full force and effect. Purchaser acknowledges that it is a
sophisticated and experienced purchaser of real estate and has reviewed with its
counsel the full meaning and affect of the foregoing indemnity.

 

Purchaser’s Initials

 

Section 4. Consideration. In consideration of the Seller’s acceptance of the
purchase price for the Property from Purchaser, Purchaser has entered into this
Condominium Agreement and has agreed to restrict the uses to which the Property
can be put on the terms and conditions set forth herein.

 

Section 5. Sale or Transfer of the Property. The Purchaser hereby covenants and
agrees not to sell, transfer or otherwise dispose of the Property, or any
portion thereof (other than for individual tenant use as contemplated
hereunder), without obtaining from the Purchaser’s purchaser or transferee the
executed Assumption Agreement assuming the Purchaser’s duties and obligations
under this Condominium Agreement and recording same in the real estate records
of the County.

 

Section 6. Intentionally deleted.

 

 

 

 

Section 7. Term. This Condominium Agreement and all and several of the terms
hereof shall become effective upon its execution and delivery and shall remain
in full force and effect until November 1, 2018 (the “Term”). Upon the
termination of the Term of this Condominium Agreement, the parties hereto agree
to execute, deliver and record appropriate instruments of release and discharge
of the terms hereof; provided, however, that the execution and delivery of such
instruments shall not be necessary or a prerequisite to the termination of this
Condominium Agreement in accordance with its terms.

 

Section 8. Covenants to Run With the Land. The Purchaser and Seller hereby
subject the Property to the covenants, reservations and restrictions set forth
in this Condominium Agreement. The Purchaser and the Seller hereby declare their
express intent that the covenants, reservations and restrictions set forth
herein shall be deemed covenants running with the land and shall pass to and be
binding upon the Purchaser’s successors in title to the Property; provided,
however, that on the termination of this Condominium Agreement said covenants,
reservations and restrictions shall expire. Each and every contract, deed or
other instrument hereafter executed covering or conveying the Property or any
portion thereof shall conclusively be held to have been executed, delivered and
accepted subject to such covenants, reservations and restrictions, regardless of
whether such covenants, reservations and restrictions are set forth in such
contract, deed or other instrument.

 

Section 9. Burden and Benefit. The Purchaser and Seller hereby declare their
understanding and intent that the burden of the covenants set forth herein touch
and concern the Land in that the Purchaser’s legal interest in the Property is
rendered less valuable thereby. The Purchaser and Seller hereby further declare
their understanding and intent that the benefit of such covenants touch and
concern the Land by enhancing and increasing the enjoyment and use of the
Property by persons entitled to rent the apartments contained therein.

 

Section 10. Uniformity: Common Plan. The covenants, reservations and
restrictions hereof shall apply uniformly to the entire Property in order to
establish and carry out a common plan for the use of the Property.

 

Section 11. Enforcement. If the Purchaser or any of its successors or assigns
defaults in the performance or observance of any covenant, agreement or
obligation of the Purchaser and its successors or assigns set forth in this
Condominium Agreement, then the Seller or any of the Indemnified Parties may
declare an “Event of Default” to have occurred hereunder, and, at any of said
Parties option, it may take any one or more of the following steps: (a) by
mandamus or other suit, action or proceeding at law or in equity, to require the
Purchaser and its successors and assigns to perform its obligations and
covenants hereunder, or enjoin any acts or things which may be unlawful or in
violation of the rights of the Seller hereunder; (b) have access to and inspect,
examine and make copies of all of the books and records of the Purchaser
pertaining to the Property; or (c) take such other action at law or in equity as
may appear necessary or desirable to enforce the obligations, covenants and
agreements of the Purchaser hereunder. All rights and remedies as set forth
herein shall be cumulative and non-exclusive to the extent permitted by law.

 

Section 12. Recording and Filing. The Purchaser shall cause this Condominium
Agreement and all amendments and supplements hereto and thereto, to be recorded
and filed in the real property records of the County and in such other places as
the Seller may reasonably request. The Seller shall pay all fees and charges
incurred in connection with any such recording.

 

 

 

 

Section 13. Attorneys ’ Fe es . In the event that a party to this Condominium
Agreement brings an action against any other party to this Condominium Agreement
by reason of the breach of any condition or covenant, representation or warranty
in this Condominium Agreement, or otherwise arising out of this Condominium
Agreement, the prevailing party in such action shall be entitled to recover from
the other reasonable attorneys’ fees to be fixed by the court which shall render
a judgment, as well as the costs of suit.

 

Section 14. Governing Law. This Condominium Agreement shall be governed by the
laws of the State of Tennessee.

 

Section 15. Amendments. This Condominium Agreement shall be amended only with
the express written consent of the Seller, by a written instrument executed by
the parties hereto or their successors in title, and duly recorded in the real
property records of the County.

 

Section 16. Intentionally Omitted.

 

Section 17. Notice. Any notice required to be given hereunder shall be made in
writing and shall be given by personal delivery, certified or registered mail,
postage prepaid, return receipt requested, at the addresses specified below, or
at such other addresses as may be specified in writing by the parties hereto:

 

TO SELLER:

 

SH 23Hundred TIC, LLC

BGF 23Hundred, LLC

23Hundred, LLC

c/o Stonehenge Real Estate Group, LLC

3200 West End Avenue, Suite 500

Nashville, TN 37203

Attention: Todd Jackovich

 

With a copy to:

 

Eric R. Wilensky, Esq.

Nelson Mullins Riley & Scarborough LLP

Atlantic Station

201 17th Street NW, Suite 1700

Atlanta, GA 30363

 

 

 

 

 

TO PURCHASER:

 

                                                           

c/o Sentinel Real Estate Corporation

1251 Avenue of the Americas

New York, NY 10020

Attention: Noel G. Belli

belli@sentinelcorp.com

 

and

 

                                                                

c/o Sentinel Real Estate Corporation

1251 Avenue of the Americas

New York, NY 10020

Attention: Millie Cassidy

 

With a copy to:

 

Seward & Kissel LLP

One Battery Park Plaza

New York, NY 10004

Attention: Mark Brody, Esq.

 

Notice shall be deemed given three business days after the date of mailing, by
certified mail, postage prepaid, return receipt requested, or, if personally
delivered, when received.

 

Section 18. Severability. If any provision of this Condominium Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining portions hereof shall not in any way be affected or impaired
thereby.

 

Section 19. Multiple Counterparts. This Condominium Agreement may be
simultaneously executed in multiple counterparts, all of which shall constitute
one and the same instrument, and each of which shall be deemed to be an
original.

 

Section 20.  Mortga gee’s Ri ghts .

 

(a)    Definitions. For purposes of this Section 20, the following terms shall
have the following meanings:

 

“First Mortgage” shall mean any bona-fide unpaid and outstanding mortgage or
deed of trust on the Property or other instrument creating a security interest
against the Property having priority of record over all other recorded liens
except those governmental liens and statutory liens which are made superior by
statute.

 

“First Mortgagee” shall mean the holder of any First Mortgage.

 

 

 

 

(b)          Transfer of Property to or from First Mortgagee. Notwithstanding
the provisions of Section 5 hereof, no sale, transfer, or other disposition of
the Property including, but not limited to, a conveyance pursuant to a
deed-in-lieu of foreclosure or the sale of the Property at a foreclosure to (i)
a First Mortgagee, (ii) an affiliate of a First Mortgagee, (iii) a purchaser at
a foreclosure sale, and (iv) any transferee of a First Mortgagee or affiliate of
a First Mortgagee (collectively a “Foreclosure Purchaser”), shall require the
execution and delivery of the Assumption Agreement by the Foreclosure Purchaser
as called for under Section 5 of this Condominium Agreement. Nothing in this
paragraph shall be deemed to negate or make unenforceable any other covenant of
this Condominium Agreement against said Foreclosure Purchaser including but not
limited to the restrictions contained in Section 2 and said Foreclosure
Purchaser by taking title to the Property agrees that it has assumed and shall
be bound by said restrictions in Section 2, and the provisions of Section 5, in
connection with any subsequent sale or transfer of the Property, and all other
terms and conditions of this Condominium Agreement.

 

(c)          No Amendments. No amendment of this Condominium Agreement shall be
effective without the written consent and approval of any First Mortgagee, which
shall not be unreasonably withheld, conditioned and/or delayed.

 

Section 21. Joint and Several Liability of Purchaser. In the event more than one
person and/or entity executes this Condominium Agreement as Purchaser, each such
person and/or entity which comprises Purchaser under this Condominium Agreement
shall be jointly and severally liable for all of the obligations, covenants,
liabilities and indemnifications of the Purchaser under this Condominium
Agreement.

 

Section 22. Limitation on Owner Liability. Purchaser and Seller specifically
agree and acknowledge that, as to Purchaser and each successive owner of the
Property during the Term, each such owner of the Property shall be liable solely
for breaches occurring under Section 2 of this Condominium Agreement, if any,
during such owner’s ownership of the Property, and not for any breaches
occurring prior to or subsequent to its ownership of the Property.

 

 

 

 

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

 

  SELLER:       SH 23HUNDRED TIC, LLC, a Tennessee limited liability company

 

  By: Stonehenge 23Hundred JV Member, LLC, a Tennessee limited liability
company, its sole member

        By: Stonehenge 23Hundred  Manager, LLC, a Tennessee limited liability
company, its Manager

        By: Stonehenge  Real  Estate Group, LLC, a Georgia limited liability
company, its Manager

 

  By:                                                        Todd Jackovich, its
Manager

 

STATE OF                 )

COUNTY OF              )

 

Personally appeared before me,                           , Notary Public,
                         , with whom I am personally acquainted and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is acting in his capacity
as                          of                          ,
a                         , and that he is authorized by said
                          , to execute this instrument on behalf of
                         .

 

WITNESS my hand, at office, this                   day of                   ,
20       .

 

                                                                                           

Notary Public

My Commission Expires:                                                  

 

 

 

 

  SELLER:       BGF 23HUNDRED, LLC, a Delaware limited liability company

        By: Bluerock Growth Fund, LLC, its sole member

        By: Bluerock Fund Manager, LLC, its manager

        By:
                                                                          
Jordan Ruddy, its Authorized Signatory

 

STATE OF                 )

COUNTY OF              )

 

Personally appeared before me,               , Notary Public,               ,
with whom I am personally acquainted and who acknowledged that he executed the
within instrument for the purposes therein contained, and who further
acknowledged that he is acting in his capacity as               of
               , a_________ , and that he is authorized by said                 
      , to execute this instrument on behalf of              .

 

WITNESS my hand, at office, this               day of              , 20
              .

 

                                                                                                      

 Notary Public

My Commission Expires:                                                          

 

 

 

 

 

 

  SELLER:         23HUNDRED, LLC, a Delaware limited liability company        
By: BR Stonehenge 23Hundred JV, LLC, its sole member       

  By:  BR Berry  Hill Managing  Member, LLC, its manager

 

  By: BEMT Berry Hill, LLC, its manager

 

  By: Bluerock Residential Holdings, L.P., its sole member

 

  By: Bluerock Residential Growth REIT, Inc., its general partner

 

  By:                                                                    Michael
L. Konig, its Senior Vice President and Chief Operating Officer

 

STATE OF                         )

COUNTY OF                      )

 

Personally appeared before me,                           , Notary Public,
                          , with whom I am personally acquainted and who
acknowledged that he executed the within instrument for the purposes therein
contained, and who further acknowledged that he is acting in his capacity
as                         of                          ,
a                         , and that he is authorized by said
                         , to execute this instrument on behalf
of                         .

 

WITNESS my hand, at office, this                  day of              , 20
     .

  

                                                                                                      

 Notary Public

My Commission Expires:                                                          

  

 

 

 

 

  PURCHASER:       ________________________, a ___________________         By:  
    Name:     Title:

 

STATE OF__________)

COUNTY OF________)

 

Personally appeared before me, ___________________, Notary Public,
___________________, with whom I am personally acquainted and who acknowledged
that he executed the within instrument for the purposes therein contained, and
who further acknowledged that he is acting in his capacity as
___________________of ___________________, a ___________________, and that he is
authorized by said ___________________, to execute this instrument on behalf of
______________________.

 

WITNESS my hand, at office, this ____ day of ________________, 20__.

 

      Notary Public   My Commission Expires:
                                                  

  

 

 

 

EXHIBIT A

 

[Legal Description of Land]

 

 

 

 

 

EXHIBIT B

 

 

space above this line for recorder’s use

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is made as of
this____day of_________,____ , by and between______________________ (the
“Assignor”), and ___________________, a ___________________ (the “Assignee”).
This Agreement is hereby deemed to be effective by the parties hereto as of the
date of recordation of the Deed transferring title to the Project (as defined
below) from the Assignor to the Assignee (the “Deed Recordation Date”).

 

WITNESSETH:

 

WHEREAS, Assignor is a party to that certain Prohibition Against Condominium
Conversion Agreement (“Condominium Agreement”) with _____________________\, as
seller, dated as of________________20          , and recorded in Book          ,
Page encumbering the land and all improvements thereon (the “Project”) as
legally described in Exhibit “A” attached hereto; and

 

WHEREAS, the Assignee desires to acquire and the Assignor desires to sell,
convey, and transfer to the Assignee, the Assignor’s entire ownership interest
in the Project, which sale, conveyance, and transfer requires the assumption by
the Assignee of the rights, duties, and obligations of the Assignor under the
Condominium Agreement relating to the period from and after the Deed Recordation
Date; and

 

WHEREAS, the Assignee is willing to assume such obligations under the
Condominium Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:

 

1. Recitals and Definitions. The recitals set forth above are true and accurate
and are incorporated herein by reference. All capitalized terms used herein and
not otherwise defined herein shall have the respective meanings given to such
terms in the Condominium Agreement.

 

 

 

  

2.   Assignment and Assumption. The Assignor hereby assigns to the Assignee all
of the Assignor’s right, title, duties and obligations under the Condominium
Agreement, and the Assignee hereby accepts and unconditionally assumes in full
and agrees to be bound by and perform all of the duties, agreements,
indemnities, and obligations of the Assignor under the Condominium Agreement
arising from and after the Deed Recordation Date, which assumption shall be
effective upon the Deed Recordation Date. Nothing contained herein shall release
Assignor from any obligations arising under the Condominium Agreement.

 

3.   Representations, Warranties and Covenants.

 

A.  The Assignor hereby represents, warrants, and covenants that to its
knowledge (i) it is not in default under any of the covenants, representations,
or warranties contained in the Condominium Agreement, (ii) it has not received
any notice of default relating to the Condominium Agreement.

 

B.        The Assignee hereby represents, warrants, and covenants that by its
execution of this Agreement (i) it has unconditionally assumed in full all of
the duties, agreements, and obligations of the Assignor under the Condominium
Agreement, which assumption shall be effective upon the Deed Recordation Date
and (ii) covenants not to assert against any of the Indemnified Parties defined
in the Condominium Agreement, any claims relating to the Property Conditions
defined in the Condominium Agreement.

 

4.   Notice. All correspondence and notices given or required to be given to the
Assignor under the Condominium Agreement, from and after the Deed Recordation
Date, shall be provided to the Assignee and shall be addressed as follows:

 

Assignee:                     Attn: __________________________________    
Telephone:______________________________     Email:

 

With a copy to:                     Attn:___________________________________    
Telephone:______________________________     Email:

 

Assignor:                     Attn:___________________________________    
Telephone:______________________________    
Email:__________________________________

 

 

 

  

With a copy to:                     Attn:___________________________________    
Telephone:______________________________    
Email:__________________________________

 

5.   Severability. If any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
portions hereof shall not in any way be affected or impaired thereby.

 

6.   Joint and Several Liability of Assignee. In the event more than one person
and/or entity executes this Agreement as Assignee, each such person and/or
entity which comprises Assignee under this Agreement shall be jointly and
severally liable for all of the obligations, covenants, liabilities and
indemnifications of the Assignee under this Agreement and of the Purchaser under
the Condominium Agreement.

 

7.   Successors and Assigns. This Agreement applies to, inures to the benefit
of, and binds all parties hereto and their respective successors and assigns.

 

8.   Counterparts. This Agreement may be executed in multiple counterparts, all
of which, when taken together, shall be deemed an original upon execution.

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

 

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

 

ASSIGNOR:

 

__________________________,

a __________________________

 

By:     Name:     Title:           WITNESS:               Name:    

 

STATE OF______________)

COUNTY OF____________)

 

Personally appeared before me, ___________________, Notary Public,
___________________, with whom I am personally acquainted and who acknowledged
that he executed the within instrument for the purposes therein contained, and
who further acknowledged that he is acting in his capacity as
___________________of ___________________, a ___________________, and that he is
authorized by said ___________________, to execute this instrument on behalf of
______________________.

 

WITNESS my hand, at office, this ____ day of ________________, 20__. 

 

      Notary Public   My Commission Expires:
                                                  

  

 

 

  

ASSIGNEE:

 

__________________________,

a __________________________

 

By:     Name:     Title:    

 

STATE OF______________)

COUNTY OF____________)

 

Personally appeared before me, ___________________, Notary Public,
___________________, with whom I am personally acquainted and who acknowledged
that he executed the within instrument for the purposes therein contained, and
who further acknowledged that he is acting in his capacity as
___________________of ___________________, a ___________________, and that he is
authorized by said ___________________, to execute this instrument on behalf of
______________________.

 

WITNESS my hand, at office, this ____ day of ________________, 20__.

 

      Notary Public   My Commission Expires:
                                                  

 

 

 

  

EXHIBIT A

 

[Legal Description of Project]