Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

BETWEEN

NXRTBH Foothill, LLC, FRBH Dana Point, LLC, FRBH Duck Creek, LLC, FRBH
Abbington, LLC, NXRTBH Heatherstone, LLC, and FRBH Edgewater Owner, LLC,

COLLECTIVELY,
AS SELLER

AND

bridge acquisitions, asset management and dispositions, llc,

AS PURCHASER

DATED June 25, 2019

 

PROPERTY ADDRESSES:
(i) 4424 E. Baseline Rd., Phoenix, Arizona, (ii) 18800 Lina Street, Dallas,
Texas, (iii) 18950 Marsh Lane, Dallas, Texas, (iv) 6202 Duck Creek Drive,
Garland, Texas, (v) 7600 Roswell Road, Sandy Springs, Georgia, (vi) 149 Hickory
Hollow Terrace, Nashville, Tennessee

 

 

 

 

 

 

 

 

 

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into as of the
25th day of June, 2019 (the “Effective Date”), by and between bridge
acquisitions, asset management and dispositions, llc, a Utah limited liability
company (“Purchaser”), and NXRTBH Foothill, LLC, a Delaware limited liability
company, FRBH Dana Point, LLC, a Delaware limited liability company, FRBH Duck
Creek, LLC, a Delaware limited liability company, FRBH Abbington, LLC, a
Delaware limited liability company, NXRTBH Heatherstone, LLC, a Delaware limited
liability company, and FRBH Edgewater Owner, LLC, a Delaware limited liability
company (collectively, “Seller”).

WITNESSETH:

1.PURCHASE AND SALE.  Purchaser agrees to purchase and Seller agrees to sell for
the Purchase Price (as set forth in Schedule 1), all of the following property
(collectively, the “Properties”):

(a)That certain parcels of real property located in Phoenix, Arizona, and
commonly known as “The Pointe at Foothills” having an address of 4424 E.
Baseline Rd., Phoenix, Arizona, more particularly described on Exhibit A-1
attached hereto (collectively, the “Foothills Land”);

(b)That certain parcels of real property located in located in Dallas, Texas,
and commonly known as “The Ashlar” having an address of 18800 Lina Street,
Dallas, Texas, more particularly described on Exhibit A-2 attached hereto
(collectively, the “Ashlar Land”);

(c)That certain parcels of real property located in Dallas, Texas, and commonly
known as “Heatherstone” having an address of 18950 Marsh Lane, Dallas, Texas,
more particularly described on Exhibit A-3 attached hereto (collectively, the
“Heatherstone Land”);

(d)That certain parcels of real property located in Garland, Texas, and commonly
known as “Belmont at Duck Creek” having an address of 6202 Duck Creek Drive,
Garland, Texas, more particularly described on Exhibit A-4 attached hereto
(collectively, the “Belmont Land”);

(e)That certain parcels of real property located in Sandy Springs, Georgia, and
commonly known as “Edgewater at Sandy Springs” having an address of 7600 Roswell
Road, Sandy Springs, Georgia, more particularly described on Exhibit A-5
attached hereto (collectively, the “Edgewater Land”);

(f)That certain parcels of real property located in Nashville, Tennessee, and
commonly known as “Abbington” having an address of 149 Hickory Hollow Terrace,
Nashville, Tennessee, more particularly described on Exhibit A-6 attached hereto
(collectively, the “Abbington Land”, and together with the Foothills Land, the
Ashlar Land, the Heatherstone Land, the Belmont Land, and the Edgewater Land,
the “Land”);

 

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(g)The personal property (the “Personal Property”) located on the Improvements
(hereinafter defined) which is used for operation and maintenance of the
apartment project and is owned by Seller, including those items set forth on
Exhibit B, which shall be transferred to Purchaser at Closing (as hereinafter
defined) by a Bill of Sale;

(h)All rights and appurtenances pertaining to the Land, including, without
limitation, any and all rights of Seller in and to all roads, alleys, easements,
streets and ways adjacent to the Land, rights of ingress and egress thereto, any
strips and gores within or bounding the Land and in the profits or rights or
other appurtenances connected with the beneficial use or enjoyment of the Land;

(i)Those certain apartment buildings containing approximately 528 apartment
units, and all of Seller’s right, title and interest in the other improvements,
structures, facilities, installations, fixtures and other improvements of every
kind placed, constructed or installed on, under or within the Foothills Land
(collectively, the “Foothills Improvements”);

(j)Those certain apartment buildings containing approximately 264 apartment
units, and all of Seller’s right, title and interest in the other improvements,
structures, facilities, installations, fixtures and other improvements of every
kind placed, constructed or installed on, under or within the Ashlar Land
(collectively, the “Ashlar Improvements”);

(k)Those certain apartment buildings containing approximately 152 apartment
units, and all of Seller’s right, title and interest in the other improvements,
structures, facilities, installations, fixtures and other improvements of every
kind placed, constructed or installed on, under or within the Heatherstone Land
(collectively, the “Heatherstone Improvements”);

(l)Those certain apartment buildings containing approximately 240 apartment
units, and all of Seller’s right, title and interest in the other improvements,
structures, facilities, installations, fixtures and other improvements of every
kind placed, constructed or installed on, under or within the Belmont Land
(collectively, the “Belmont Improvements”);

(m)Those certain apartment buildings containing approximately 760 apartment
units, and all of Seller’s right, title and interest in the other improvements,
structures, facilities, installations, fixtures and other improvements of every
kind placed, constructed or installed on, under or within the Edgewater Land
(collectively, the “Edgewater Improvements”);

(n)Those certain apartment buildings containing approximately 274 apartment
units, and all of Seller’s right, title and interest in the other improvements,
structures, facilities, installations, fixtures and other improvements of every
kind placed, constructed or installed on, under or within the Abbington Land
(collectively, the “Abbington Improvements”, and together with the Foothills
Improvements, the Ashlar Improvements, the Heatherstone Improvements, the
Belmont Improvements, and the Edgewater Improvements, the “Improvements”);

(o)All of Seller’s right, title and interest in all leases, licenses and
concession agreements and other similar written agreements (and any amendments,
renewals, extensions, modifications and guaranties thereof) (collectively, the
“Leases”) covering space situated at or within the Land and Improvements under
any existing Lease occupied by tenants (collectively, the “Tenants”),  all
refundable security deposits deposited by Tenants with respect to the Leases

 

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which have not been previously applied pursuant to the applicable Leases, and
all resident and tenant files, tenant lists and tenant marketing information
associated with the Property;

(p)All of Seller’s rights in and to contractual rights and intangibles with
respect to the operation, maintenance, and repair of the Land and the
Improvements, including assignable service and maintenance agreements but
excluding the property management agreement and any Master Agreements as
hereafter defined (collectively, “Service Contracts”),  utility agreements,
manufacturers’ warranties and guaranties relating to the Personal Property,
assignable governmental permits, licenses, certificates and approvals in
connection with the ownership of the Property (collectively, the “Licenses”),
architectural and civil plans, specifications, surveys, and drawings relating to
the Property (to the extent assignable), used in connection with the operation
of the Land or any part thereof in Seller possession or control, but
specifically excluding any warranties and/or guaranties from and/or claims
against Seller, BH Management Services, LLC (the “Property Manager”, their
respective affiliates and each of their respective successors and assigns). As
used herein, the term “Master Agreements” means agreements pertaining to
operations, services, maintenance, or repair of multiple properties of Seller or
affiliates of Seller.  Any Master Agreements affecting the Properties will be
terminated as to such Property at the Closing;

(q)Seller’s right, if any, to the use of the trade name “The Pointe at
Foothills”, “The Ashlar”, “Heatherstone”, “Belmont at Duck Creek”, “Edgewater at
Sandy Springs”, and “Abbington” (collectively, the “Trade Name”) in connection
with the Properties;

(r)All other intangible personal property, if any, owned by Seller to the extent
related exclusively to the Land, Improvements or the Personal Property,
including, without limitation, goodwill, logos, designs, trade names, building
names, trademarks, website domain names associated with Properties, and if
assignable, the right to the use of all telephone numbers pertaining to fixed
land lines at the Properties used by Seller; and

(s)All insurance proceeds and condemnation awards or claims thereto to be
assigned to Purchaser pursuant to Section 6 of this Agreement.

Each parcel of Land described in this Section, and all of the Personal Property,
Improvements, Leases, Licenses, Service Contracts, intangible property and other
property pertaining to such parcels, are sometimes referred to as a “Housing
Community,” and all such Housing Communities are sometimes collectively referred
to as the “Housing Communities.”  

References in the body of this Agreement to a defined term set forth on Schedule
1, Schedule 1(a), or Schedule 2 of this Agreement (the “Schedules”) (e.g., the
defined terms in the left-hand column of the Schedules) shall be deemed and
construed to incorporate all the terms provided under each such referenced
portion of the Schedules.  References in the Schedules to a portion of the body
of this Agreement (e.g., Section references in the right-hand column of the
Schedules) shall be deemed and construed to incorporate all the terms provided
under each such referenced portion of the body of the
Agreement.  Notwithstanding anything set forth above, if there is any
inconsistency between the Schedules and another portion of this Agreement, the
terms of the Schedules shall control.    

 

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2.PAYMENT OF PURCHASE PRICE.  The Purchase Price shall be paid by Purchaser as
follows:

(a)Within three (3) business days of the full execution of this Agreement, the
Earnest Money (as set forth in Schedule 2) shall be delivered to NexVantage
Title Services, Attn: Jeff Justema, 2515 McKinney Ave, Suite 1100, Dallas, Texas
75201; Jeff.Justema@NexVantageTitle.com; (469) 362-8845 (Office) (the “Escrow
Agent”) to be held in escrow by the Escrow Agent.  If Purchaser does not timely
deliver the Earnest Money, or if the Escrow Agent is not immediately able to
obtain good funds in respect of the Earnest Money, Seller may, at its option,
terminate this Agreement.  The Earnest Money shall be allocated among each
Housing Community based on a prorata share that the Allocated Purchase Price for
such Housing Community bears to the Purchase Price for all Housing
Communities.  

(b)All Earnest Money shall be delivered to the Escrow Agent by federally wired
“immediately available” funds.

(c)The Earnest Money shall be non-refundable unless this Agreement has been
terminated by Purchaser pursuant to a provision in this Agreement which
expressly entitles Purchaser to a return of the Earnest Money.

(d)On the Closing Date (as hereinafter defined), the balance of the Purchase
Price (plus or minus any prorations, to the extent applicable) by federally
wired “immediately available” funds delivered to the Escrow Agent’s account no
later than 12:00 Noon Central Time on the Closing Date.  If the funds are not
received by the Escrow Agent by 12:00 Noon Central Time but are received on the
Closing Date, then on the Closing Date, Purchaser shall pay Seller an amount
equal to any increased financing costs actually incurred by Seller, which may
include additional per diem interest, increases in the amount of any prepayment
penalties or payment of interest for the full month in which Closing occurs.

(e)Escrow Agent shall pay a portion of the Deposit in the amount of One Hundred
and No/100 Dollars ($100.00) (the “Independent Consideration”) to Seller upon
the earlier to occur of the Closing or the termination of this Agreement for any
reason.  The Independent Consideration constitutes bargained-for consideration
for this Agreement and Purchaser’s rights under Section 17 and is expressly
acknowledged to be adequate.  The obligation of Purchaser to pay the Independent
Consideration to Escrow Agent, and the obligation of Escrow Agent to pay the
same to Seller, are unconditional and shall survive any termination of this
Agreement.

(f)Seller and Purchaser agree to allocate the Purchase Price between the
Property as set forth in Schedule 1(a).  

3.TITLE COMMITMENT AND SURVEY.  Seller shall obtain and deliver to Purchaser a
current commitment for a TLTA or ALTA Owners’ Title Insurance Policy, as
applicable, for each Property (collectively, the “Title Commitments”) in the
amount of the allocated Purchase Price of such Property issued by Escrow Agent,
together with copies of all exception documents.  Purchaser shall within ten
(10) days of Seller’s receipt of the Title Commitments (but in any event no
later than five (5) days prior to the expiration of the Approval Period
[hereinafter defined]) (the “Title Review Period”) to examine Seller’s title to
the Properties

 

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and to notify Seller of any defects in or encumbrances upon Seller’s title to
the Properties (the “Objections”); provided, however, in no event shall
Purchaser have the right to object to the Permitted Exceptions (hereinafter
defined). Seller shall have the right, but not the obligation, to remove,
correct, and/or satisfy any Objections. If Purchaser fails to notify Seller of
any Objections prior to 5:00 p.m. Central Time on the last day of the Title
Review Period, then Purchaser shall be deemed to have waived any Objections and
to have accepted Seller’s title to the Properties.  If Purchaser notifies Seller
of any Objections prior to the expiration of the Title Review Period
(“Purchaser’s Objections Notice”), Seller shall notify Purchaser within five (5)
days after receipt of Purchaser’s Objections Notice (“Seller’s Response Period”)
whether or not Seller will seek to remove, correct, and/or satisfy the
Objections (“Seller’s Objections Response”).  If Seller fails to notify
Purchaser of Seller’s Objections Response within Seller’s Response Period, then
Seller shall be deemed to have elected not to seek to remove, correct, and/or
satisfy any Objections.  If Seller’s Objections Response indicates that Seller
will not seek to remove, correct, and/or satisfy all Objections set forth in
Purchaser’s Objections Notice, or if Seller fails to notify Purchaser of
Seller’s Objections within Seller’s Response Period, then Purchaser may either
(i) waive the Objections set forth in Purchaser’s Objections Notice and proceed
with Closing or (ii) terminate this Agreement by sending a Notice of Disapproval
(as hereinafter defined) in accordance with Section 17(f) to Seller not later
than five (5) days after the later of (A) Purchaser’s receipt of Seller’s
Objections Response if Seller sent a Seller’s Objections Response or (B)
Seller’s Response Period if Seller failed to notify Purchaser of Seller’s
Objections Response within Seller’s Response Period, in which case the Earnest
Money shall be disbursed and this Agreement shall terminate in accordance with
Section 17(f).  If Purchaser fails to so terminate this Agreement, Purchaser
shall be deemed to have waived all Objections and to have accepted Seller’s
title to the Properties subject to the Permitted Exceptions (hereinafter
defined), and any Objections for which Seller elects (or is deemed to have
elected not to cure) shall be deemed to be Permitted Exceptions.  If there
remains at Closing any Objections that Purchaser included in Purchaser’s
Objections Notice and for which Seller affirmatively agreed to seek to remove,
correct, and/or satisfy in Seller’s Objections Response, then Purchaser may
elect to: (1) consummate the transaction contemplated hereby without regard to
such Objections (in which event, the Purchase Price shall not be adjusted
because of such Objections); or (2) terminate this Agreement at Closing by
delivering a Notice of Disapproval, in which case the Earnest Money shall be
disbursed and this Agreement shall terminate in accordance with Section
17(f).  As used herein, the term “Permitted Exceptions” means (i) real estate
taxes and assessments not yet due and payable; (ii) the rights of tenants, as
tenants only, without any right or option to acquire any portion of the
Property, under the Leases described in the Rent Roll and any new Leases entered
into between the Effective Date and the Closing in accordance with the terms of
this Agreement and (if required) approved by Purchaser in accordance with the
terms of this Agreement; (iii) documents or agreements contemplated by the terms
of this Agreement; (iv) matters arising from acts of or at the direction of
Purchaser, its consultants or any of their respective agents, representatives or
employees; and (v) additional items, if any, approved by Purchaser pursuant to
this Agreement.  The Title Commitments shall be conclusive evidence of good
title as therein shown as to all matters insured by the policy, subject only to
the exceptions therein stated, and Seller makes no representation or warranty
that the Title Commitments are true and correct.  

Notwithstanding the foregoing or any provision of this Agreement to the
contrary, Seller shall be obligated to cause the discharge or release of (i) all
deeds of trust or mortgages previously granted by Seller (or their affiliates)
and encumbering such Housing Community; and (ii) all other

 

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voluntary liens or encumbrances resulting from any action of Seller or its
affiliates after the Effective Date that are not otherwise permitted pursuant to
the terms of this Agreement; provided, however, that Seller may elect to
effectuate such discharge by directing Escrow Agent to apply a portion of the
Purchase Price funds at the applicable Closing to repayment of the debt secured
by such deeds of trust or mortgages or otherwise to discharge or release any
such lien or encumbrance.

4.CONDITION OF TITLE/CONVEYANCE.  Subject to Seller’s receipt of the Purchase
Price (plus or minus prorations) and Purchaser’s compliance with the terms of
this Agreement, Seller agrees to convey fee simple title to each Property by
Special Warranty Deed (“Deed”) in recordable form subject only to the Permitted
Exceptions (including, without limitation, Additional Disapproved Exceptions (as
herein defined) accepted or deemed accepted by Purchaser).  If Seller is unable
to convey title to any Property subject only to the Permitted Exceptions because
of the existence of an additional title exception that (a) would have a material
adverse effect on such Property or would render title to such Property
unmarketable, (b) was not previously included in the Title Commitment, (c) was
not known by Purchaser, and (d) did not arise from acts of or at the direction
of Purchaser, its consultants or any of their respective agents, representatives
or employees (“Additional Disapproved Exception”), then Purchaser shall notify
Seller within three (3) business days after Purchaser has knowledge of, or
receives notice of, such Additional Disapproved Exception and Seller shall have
three (3) business days (or until the Pre-Closing Date (as hereinafter
defined,  if earlier) to have the Additional Disapproved Exception removed from
the Title Commitment or “insured” or bonded” over.  If Seller is unable (or
unwilling) to effect such a cure, then Purchaser may elect either to take title
to such Property subject to the Additional Disapproved Exception or to terminate
this Agreement by delivering a Notice of Disapproval within three (3) business
days after Seller notifies Purchaser that the Additional Disapproved Exception
has not been so cured, in which case the Earnest Money shall be disbursed and
this Agreement shall terminate in accordance with Section 17(f).  If Purchaser
elects to take title to such Property subject to the Additional Disapproved
Exception or fails to timely terminate this Agreement, such Additional
Disapproved Exception shall thereafter be deemed a Permitted Exception.

5.PAYMENT OF CLOSING COSTS. At Closing, Seller shall pay Seller’s Closing Costs
(as set forth in Schedule 2) and Purchaser shall pay Purchaser’s Closing Costs
(as set forth in Schedule 2).  All other closing costs not addressed in this
Section or elsewhere in this Agreement shall be allocated in accordance with the
customary practice in the county in which such Property is located or shall be
borne by the party who incurred such costs.

6.DAMAGE, CASUALTY AND CONDEMNATION.

(a)In the event of “damage” to the Properties or any portion thereof, then
Seller shall promptly notify Purchaser thereof.  If any Housing Community
suffers damage as a result of any insured casualty prior to the Closing Date and
can be repaired or restored for an amount equal to the Materiality Threshold (as
set forth in Schedule 2) or less, then Seller shall assign to Purchaser all
insurance proceeds payable (and all claims relating thereto) as a result of such
damage and give Purchaser a credit at Closing equal to (x) any insurance
proceeds received to date by Seller or their affiliates (less any repair costs
incurred by Sellers which were approved by Purchaser) and (y) any insurance
deductible due under Sellers’ insurance policy(ies).  If any insurance proceeds
to be

 

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assigned hereunder are not assignable, Sellers shall cooperate with Purchaser to
continue such proceedings and make such claims so Purchaser may obtain the
benefit of and receive such

(b)If the cost of repair or restoration exceeds the Materiality Threshold, then
Purchaser may elect to proceed with the Closing (subject to the other provisions
of this Agreement) or may terminate this Agreement solely with respect to the
Housing Community(ies) so damaged (each, a “Damaged Housing Community,” and
collectively, the “Damaged Housing Communities”) by delivering written notice
thereof to Seller within five (5) Business Days after Purchaser’s receipt of
Sellers’ notice respecting the damage and an estimate of the time and cost to
repair such damage.  If, within five (5) Business Days of receipt of Seller’s
notice respecting such damage, Purchaser delivers written notice of such
termination of this Agreement with respect to such Damaged Housing
Community(ies), to Seller, this Agreement with respect to such Damaged Housing
Community(ies) shall terminate, the Allocated Earnest Money allocable to such
Damaged Housing Community(ies) 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 with respect to such Damaged
Housing Community(ies). If Purchaser does not timely elect to so terminate this
Agreement with respect to such Damaged Housing Community(ies), 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 the Closing all insurance
proceeds payable (and all claims relating thereto) as a result of such damage
and give Purchaser a credit at Closing equal to (x) any insurance proceeds
received to date by Seller or their affiliates (less any repair costs incurred
by Sellers which were approved by Purchaser) and (y) any insurance deductible
due under Sellers’ insurance policy(ies).  

(c)If condemnation proceedings (“Proceedings”) are instituted against any
Housing Community and the parties reasonably believe that such Proceedings will
result in a taking which materially and adversely affects vehicular access with
respect to the Housing Community, or such Proceedings will result in an award
equal to the Materiality Threshold or less, then Purchaser shall remain
obligated to purchase the Properties at the Closing for the Purchase Price
without any offset, credit or deduction, provided that Seller shall assign
Seller’s interest in the Proceedings to Purchaser. If Proceedings are instituted
against any Housing Community and the parties reasonably believe that such
Proceedings will result in an award in excess of the Materiality Threshold, then
Purchaser can elect to either take the Properties subject to the Proceedings
along with an assignment of Seller’s interest in the Proceedings or terminate
this Agreement with respect to such Housing Community by delivering written
notice to the Seller within five (5) days after Seller notifies Purchaser of the
Proceedings.  If the Agreement is terminated with respect to a Housing
Community(ies) pursuant to the express termination provisions contained in
Section 6(a) or 6(c), then the Earnest Money (less the Independent
Consideration) allocable to such Housing Community(ies) 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 with
respect to such Housing Community(ies).

7.AS-IS CONDITION.

(a)Except as specifically set forth in Section 18 of this Agreement and in the
Closing Documents (the “Seller’s Express Obligations”), Purchaser is not relying
on Seller having made any inquiry as to the condition of the Properties or the
Leases.  Purchaser

 

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acknowledges and agrees that it will be purchasing the Properties based solely
upon its inspection and investigations of the Properties and that Purchaser will
be purchasing the Properties “AS IS” and “WITH ALL FAULTS” based upon the
condition of the Properties as of the date of this Agreement, subject to
reasonable wear and tear and, subject to the provisions of Section 6, loss by
fire or other casualty or condemnation from the date of this Agreement until the
Closing Date.  Without limiting the foregoing, Purchaser acknowledges that,
except for Seller’s Express Obligations, neither Seller nor its consultants,
brokers or agents have made any other representations or warranties of any kind
upon which Purchaser is relying as to any matters concerning the Properties,
including, but not limited to, any implied warranty as to the quality of the
construction of the Properties or its fitness for use as an apartment project,
the condition of the Land or any of the Improvements, whether or not the
Properties are subject to airport corridor noise, the existence or nonexistence
of asbestos, lead in water, lead in paint, radon, underground or above ground
storage tanks, petroleum, toxic waste or any Hazardous Materials or Hazardous
Substances (as such terms are defined below), the Tenants of the Properties or
the Leases affecting the Properties, economic projections or market studies
concerning the Properties, any development rights, taxes, bonds, covenants,
conditions and restrictions affecting the Properties, water or water rights,
topography, drainage, soil, subsoil of the Properties, the utilities serving the
Properties or any zoning, environmental or building laws, rules or regulations
affecting the Properties.  Seller makes no representation that the Properties
comply with Title III of the Americans With Disabilities Act, the Fair Housing
Act of 1968 as amended, or any fire codes, building codes or health
codes.  Except for claims in connection with a breach of Seller’s Express
Obligations, Purchaser hereby releases Seller and Property Manager, together
with all of their respective members, managers, partners, officers, directors,
employees, representatives, agents, shareholders, trustees and/or beneficiaries
and all their respective current and former affiliates, heirs, successors,
assigns, predecessors, attorneys, agents and related entities (collectively
referred to herein as the “Seller Related Parties”) from any and all liability
in connection with any claims (including but not limited to all health and
medical claims) which Purchaser may have against any of the Seller Related
Parties, and Purchaser hereby agrees not to assert any claims, for damage, loss,
compensation, contribution, cost recovery or otherwise, against any of the
Seller Related Parties, whether in tort, contract, or otherwise, relating
directly or indirectly to the condition of the Properties, including without
limitation (i) claims relating to the existence of asbestos; (ii) claims
attributable to indoor air quality issues, releases from building material and
furnishings, releases from cleaning, repairing, or decorating activities, and
the operation of heating and cooling systems and humidifiers; or (iii) claims
relating to Hazardous Materials or Hazardous Substances on, or environmental
conditions of, the Properties, or arising under the Environmental Laws (as such
term is hereinafter defined), or relating in any way to the quality of the
indoor or outdoor environment at the Properties including methane gas or any of
its derivatives; or (iv) claims relating to mold, fungus, bacteria and/or other
biological growth or biological growth factors, or any other type of indoor
contaminants that may exist on the Properties; or (v) claims relating to latent
or patent construction defects or any implied warranty as to fitness for use as
an apartment project; or (vi) claims relating to the failure of any of the
Seller Related Parties to disclose any information relating to the Properties,
except as may otherwise be expressly set forth in Section 17(f).  As used in
this Section the term “affiliates” means, with respect to the Seller Related
Parties, or any manager, member or partner of the Seller Related Parties, any
other entity or person which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with
the Seller Related Parties or any manager, member or partner of the Seller

 

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Related Parties.  As used in the previous sentence, “control” means the
possession, directly or indirectly, of the power to cause the direction of the
management of any Seller Related Party or any manager, member or partner of any
Seller Related Party, whether through voting securities, by contract, family
relationship or otherwise.  This release shall forever survive the Closing and
the delivery and recording of the Deeds.  As used herein, the term “Hazardous
Materials” or “Hazardous Substances” means (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.; 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
(collectively the “Environmental Laws”); 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.    

Purchaser hereby specifically acknowledges that Purchaser has carefully reviewed
this subsection, and discussed its import with legal counsel, is fully aware of
its consequences, and that the provisions of this subsection are a material part
of this Agreement.

Purchaser’s Initials _CA_________

(b)None of the Seller Related Parties makes any representation or warranty that
any financial material that Seller may provide to Purchaser is complete or
accurate or that Purchaser will achieve similar financial or other results with
respect to the operations of the Properties, it being acknowledged by Purchaser
that Seller’s operation of the Properties and allocations of revenues or
expenses may be vastly different than Purchaser may be able to
attain.  Purchaser acknowledges that it is a sophisticated and experienced
purchaser of real estate and further that Purchaser has relied upon its own
investigation and inquiry with respect to the operation of the Properties and
releases the Seller Related Parties from any liability with respect to such
historical information.

Purchaser’s Initials __CA________

 

 

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8.CLOSING.  

(a)The closing (“Closing”) of this transaction shall be on the Closing Date (as
set forth in Schedule 2), at which time Purchaser shall cause the Purchase Price
(plus or minus prorations) to be delivered to Seller and Seller shall deliver
possession of the Properties to Purchaser.  There will be a “pre-closing” on the
first business day immediately preceding the Closing Date (“Pre-Closing Date”)
through the office of the Escrow Agent.  

(b)Subject to Purchaser’s right to terminate this Agreement with respect to a
specific Housing Community in Sections 6 and 8 of this Agreement, Purchaser and
Seller acknowledge and agree that (a) it is the intent of the parties hereunder
that Seller’s and Purchaser’s obligation to proceed with the Closing (as
hereinafter defined) is contingent upon the Closing of all the Properties
occurring concurrently; (b) each party assures the other that it shall cause the
Closing of all the Properties to occur concurrently; and (c) neither party would
have entered into this Agreement but for such assurance by the other party.

 

(c)The obligation of Purchaser to proceed with each Closing shall be subject to
the fulfillment on or before the date of such Closing (or such earlier time as
otherwise required hereby) of all of the following conditions, any or all of
which may be waived by Purchaser in its sole discretion:

(i)Seller shall have delivered all of the items required to be delivered by
Seller pursuant to Section 9(c) of this Agreement;

 

(ii)All of the representations and warranties of Seller contained in this
Agreement shall have been true and correct in all material respects when made,
and shall be true and correct in all material respects on the date of Closing
with the same effect as if made on and as of such date, except for (i) any
changes in such representations and warranties set forth in Section 18(b)(i),
Section 18(b)(iv), Section 18(b)(v), or Section 18(b)(viii), (ii) any changes in
such representations and warranties set forth in Section 18(b)(ix) unless the
cure for such change exceeds the Materiality Threshold for any specific Housing
Community or such change results in a Material Title Defect, and (iii) any
changes in such representations and warranties set forth in Section 18(b)(x)
unless the cure for such change exceeds the Materiality Threshold for any
specific Housing Community or such change results in a Material Environmental
Issue, resulting from matters which are not prohibited by the terms of this
Agreement, and unless any breach of such representations and warranties has been
waived or is deemed to have been waived pursuant to Section 10 of this
Agreement;

 

(iii)Seller shall have performed and observed in all material respects all
covenants and obligations of this Agreement to be performed and observed by
Seller on or prior to the date of such Closing unless any breach of such
covenants and obligations has been waived or is deemed to have been waived
pursuant to Section 10 of this Agreement;

 

(iv)Escrow Agent has committed in writing, subject only to (i) the receipt of
the title premiums and costs with respect to the title policies, and (ii)
Purchaser’s satisfaction of any customary requirements of the Title Company that
are imposed upon and complied with by similar purchasers in like transactions in
the respective jurisdictions

 

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where the applicable Housing Communities are located, to issue to Purchaser an
TLTA or ALTA Owner’s Title Insurance Policy, as applicable, with respect to each
Housing Community involved in the applicable Closing, in an amount equal to the
portion of the Purchase Price allocable to such Housing Community (as specified
herein), in each case subject only to Permitted Exceptions (each, a “Title
Policy,” and collectively, the “Title Policies”); and  

 

(v)No action, suit or other proceeding shall be pending which shall have been
brought by a person or entity seeking to restrain or prohibit the transactions
contemplated under this Agreement.

 

In the event any of the foregoing conditions has not been satisfied by the
Closing Date, then Purchaser shall provide Seller with a written notice
describing such unsatisfied conditions.  If such conditions are not satisfied
within ten (10) days following Seller’s receipt of such notice and Purchaser is
not in breach or default hereunder, then Purchaser shall have the right either
to (i) terminate this Agreement with respect solely to the Housing
Community(ies) involved in such Closing for which conditions of this Section 8
have not been satisfied by written notice to Seller within one (1) business day
after the expiration of such ten (10) day cure period, or (ii) elect to proceed
with the Closing (including, without limitation, with regard to such Housing
Communities) despite the non-satisfaction of such conditions.  In the event
Purchaser so terminates this Agreement, the parties shall have no further
rights, duties or obligations hereunder with respect to such Housing
Community(ies) as were the subject of such termination, other than those which
are expressly provided herein to survive the termination of this Agreement. In
the event Purchaser so terminates this Agreement, Escrow Agent shall promptly
refund the Earnest Money allocable to the Housing Community(ies) for which such
termination has occurred then held by Escrow Agent to Purchaser.  For the
avoidance of doubt, in the event Purchaser elects to terminate this Agreement
with respect to any Housing Community(ies) pursuant to subclause (i) above, this
Agreement shall remain in full force and effect with respect to each other
Housing Community (including those Housing Communities with respect to the
applicable Closing for which the foregoing conditions have been satisfied).

 

(d)The obligation of Seller to proceed with each Closing shall be subject to the
fulfillment on or before the date of such Closing (or such earlier time as
otherwise required hereby) of all of the following conditions:

 

(i)Purchaser shall have deposited with Escrow Agent the Purchase Price, together
with any other amounts to be paid by Purchaser in connection with such Closing
pursuant to this Agreement.

 

(ii)Purchaser shall have delivered all of the items required to be delivered by
Purchaser pursuant to the terms of this Agreement.

 

(iii)All of the representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects as of (i) the
Effective Date and (ii) the date of such Closing.

 

 

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

 

(v)No action, suit or other proceeding shall be pending which shall have been
brought by a person or entity to restrain, prohibit or change in any material
respect the transactions contemplated under this Agreement.

 

In the event any of the foregoing conditions has not been satisfied by the
applicable Closing Date, then Seller shall provide Purchaser with a written
notice describing such unsatisfied conditions.  In the event Purchaser breaches
or fails, without legal excuse, to satisfy the foregoing condition and complete
the purchase of the Property or to perform its obligations under this Agreement
in any respect, and such failure continues for ten (10) days after written
notice from Seller to Purchaser regarding the same (provided that such ten (10)
day period shall not be applicable in connection with a failure by Purchaser to
perform its obligations on the Closing Date set forth in Sections 9(a) and
9(c)), and Seller is not in breach of default hereunder, then Seller shall have
the right either to (i) terminate this Agreement in its entirety by delivering
written notice to Seller within one (1) business day after the expiration of
such ten (10) day cure period or the Closing Date, if such cure period is not
applicable, (ii) terminate this Agreement with respect solely to the Housing
Community(ies) involved in such Closing for which conditions of this Section 8
have not been satisfied by delivering written notice to Seller within one (1)
business day after the expiration of such ten (10) day cure period or the
Closing Date, if such cure period is not applicable, or (iii) elect to proceed
with the Closing (including, without limitation, with regard to such Housing
Communities) despite the non-satisfaction of such conditions.  In the event
Seller terminates this Agreement in its entirety, (a) the parties shall have no
further rights, duties or obligations hereunder with respect to such Housing
Community(ies) as were the subject of such termination, other than those which
are expressly provided herein to survive the termination of this Agreement, and
(b) Escrow Agent shall deliver the Earnest Money to Seller.  In the event Seller
terminates this Agreement with respect to a specific Housing Community(ies) (y)
the parties shall have no further rights, duties or obligations hereunder with
respect to such Housing Community(ies) as were the subject of such termination,
other than those which are expressly provided herein to survive the termination
of this Agreement, and (z) Escrow Agent shall deliver the portion of the Earnest
Money allocable to the Housing Community(ies) for which such termination has
occurred then held by Escrow Agent to Seller.  For the avoidance of doubt, in
the event Seller elects to terminate this Agreement with respect to any Housing
Community(ies) pursuant to subclause (ii) above, this Agreement shall remain in
full force and effect with respect to each other Housing Community (including
those Housing Communities with respect to the applicable Closing for which the
foregoing conditions have been satisfied).

 

(e)Purchaser and certain seller entities have entered into a contract of even
date herewith substantially similar to this Agreement (the “Other Agreement”)
for the purchase and sale of additional property as set forth therein (the
“Other Property”).  Purchaser acknowledges and agrees that a significant part of
the consideration of this Agreement is Purchaser’s agreement with Seller to
close the purchase of both the Property under this Agreement and the Other
Property under the Other Contract simultaneously (i.e., on the same date and at
the same time), Purchaser hereby covenants to Seller that it shall be obligated
to close the purchase under both this Agreement

 

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and the Other Agreement simultaneously. Accordingly, it shall be an additional
condition precedent of Seller’s obligations at the Closing under this Agreement
that Purchaser close on the purchase of the Other Property in accordance with
the Other Agreement, and failing which, Purchaser shall be considered in default
under this Agreement,  in which case Seller shall have the rights set forth in
Section 11.  If Purchaser is in default under any provision of the Other
Agreement, then Purchaser shall be deemed in default of the corresponding
provision of this Agreement.  Any termination of this Agreement for any reason
by any party shall constitute a termination of the Other Agreement by such
party’s corresponding party to the Other Agreement, and any termination by any
party of the Other Agreement shall constitute a termination of this Agreement by
such Party’s corresponding party to this Agreement.  This Section 8(e) shall
survive the termination of this Agreement.

9.CLOSING DOCUMENTS.

(a)On or before the Closing Date, Purchaser shall deliver to Escrow Agent the
balance of the Purchase Price plus or minus prorations, in accordance with the
closing statement.

(b)Once the Closing has occurred and Seller has received the Purchase Price
(plus or minus any prorations), Seller shall deliver to Purchaser possession of
the Properties, all keys used in connection with the Properties, and copies of
the Lease files (all of which will be made available at the Properties).

(c)On or before the Pre-Closing Date, Seller and Purchaser shall deliver to
Escrow Agent or the other party, as applicable, executed originals of the
following:

(i)the Deed (in the form of Exhibit C attached hereto) executed and acknowledged
by Seller, subject to the Permitted Exceptions (including any Additional
Disapproved Exceptions (as herein defined) accepted or deemed accepted by
Purchaser);

(ii)the Bill of Sale (in the form of Exhibit D attached hereto) which shall be
executed by Seller and Purchaser;

(iii)closing statement prepared by Escrow Agent which shall be executed by
Seller and Purchaser upon receipt thereof;

(iv) assignment and assumption of all Service Contracts to be assumed by
Purchaser hereunder (in the form of Exhibit E attached hereto) which shall be
executed by Seller and Purchaser;

(v)assignment and assumption of all Leases and security deposits (in the form of
Exhibit F attached hereto) which shall be executed by Seller and Purchaser;

(vi)rent roll in the form set forth on Exhibit K attached hereto;

(vii)notices to the tenants of the transfer of title and the assumption by
Purchaser of the landlord’s obligations under the Leases and the obligation to
refund the security deposits (in the form of Exhibit G attached hereto), which
shall be executed by Seller and Purchaser;

 

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(viii)non-foreign affidavit (in the form of Exhibit H attached hereto), executed
by Seller;

(ix)assignment of intangible property (in the form of Exhibit I attached
hereto), which shall be executed by Seller and Purchaser;

(x)assignment of all transferable guaranties and transferable warranties
relating to the Personal Property and an assignment of all assignable
governmental permits, licenses and approvals covering the buildings and the
Personal Property situated on the Properties (in the form of Exhibit J attached
hereto), which shall be executed by Seller and Purchaser; and

 

(xi)such other documents executed by Seller and/or Purchaser as may be
reasonably required by the Escrow Agent in order to consummate the transaction
as set forth in this Agreement, including any state law specific closing
documents.

10.SELLER’S RIGHT TO CURE. If on or prior to Closing, Purchaser discovers,
believes or obtains actual or constructive knowledge that any representation or
warranty of Seller is untrue or misleading in any material respect or that
Seller is in default under this Agreement or that Seller has failed to perform a
required covenant (collectively, a “Breach”), then Purchaser shall give Seller
notice of such Breach (“Purchaser’s Breach Notice”).  Upon receipt of
Purchaser’s Breach Notice, Seller shall have the right to cure such Breach
within ten (10) days after receipt of such notice.  If Purchaser fails to
deliver Purchaser’s Breach Notice to Seller within five (5) business days after
learning of such Breach, then Purchaser shall have waived its rights to assert
any claims for a Breach, and Seller’s representations and warranties shall be
deemed to be modified to include any such discovery, belief or knowledge by
Purchaser.  If Seller is unable to cure the Breach, then Seller shall so notify
Purchaser (“Seller’s Breach Notice”).  In such event, Purchaser can either waive
the Breach or, upon notice to Seller within five (5) days after receipt of
Seller’s Breach Notice, terminate this Agreement.  In such event, the Earnest
Money (less the Independent Consideration) plus all interest accrued thereon
shall be returned to Purchaser, and except for those provisions that expressly
survive the termination of this Agreement, neither party shall have any further
obligation or liability hereunder.  Purchaser hereby waives any right Purchaser
may have to commence any action(s) to enforce any alleged breach and/or
violation of any representations of Seller as set forth in this Agreement or to
seek damages in connection therewith in the event that Purchaser obtains actual
knowledge of any such alleged breach and/or violation prior to Closing and
consummates the Closing.

11.DEFAULT BY PURCHASER.  ALL EARNEST MONEY DEPOSITED INTO THE ESCROW IS TO
SECURE THE TIMELY PERFORMANCE BY PURCHASER OF ITS OBLIGATIONS AND UNDERTAKINGS
UNDER THIS AGREEMENT.   IN THE EVENT OF ANY DEFAULT OF PURCHASER UNDER THE
PROVISIONS OF THIS AGREEMENT, SELLER SHALL RETAIN ALL OF THE EARNEST MONEY AND
THE INTEREST THEREON AS SELLER’S SOLE RIGHT TO DAMAGES OR ANY OTHER REMEDY AND
PURCHASER SHALL HAVE NO FURTHER RIGHTS TO PURCHASE THE PROPERTIES, PROVIDED THAT
THE FOREGOING SHALL NOT LIMIT SELLER’S RIGHT TO RECOVER FROM PURCHASER ANY
AMOUNTS AS TO WHICH PURCHASER HAS INDEMNIFIED SELLER AS PROVIDED ELSEWHERE IN
THIS AGREEMENT OR SELLER’S RIGHT TO

 

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RECOVER ATTORNEYS’ FEES (AS PROVIDED IN SECTION 33).  THE PARTIES HAVE AGREED
THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PURCHASER, WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICAL TO DETERMINE.  THEREFORE, BY PLACING THEIR
INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S
DAMAGES.

Seller’s Initials _MRM_________

Purchaser’s Initials _CA_________

12.

SELLER’S DEFAULT.  IF THIS SALE IS NOT COMPLETED BECAUSE OF SELLER’S UNCURED
FAILURE TO PERFORM ANY COVENANT REQUIRED HEREIN OR BECAUSE OF ANY INTENTIONAL
BREACH OF A WARRANTY OR MISREPRESENTATION, PURCHASER’S SOLE REMEDY SHALL BE THE
RIGHT TO A RETURN OF ALL EARNEST MONEY (LESS THE INDEPENDENT CONSIDERATION)
TOGETHER WITH ANY INTEREST ACCRUED THEREON, THIS AGREEMENT SHALL TERMINATE, AND
TO THE EXTENT SUCH BREACH IS DUE TO OF ANY INTENTIONAL BREACH OF A WARRANTY OR
INTENTIONAL MISREPRESENTATION OF SELLER, SELLER SHALL REIMBURSE Purchaser for
the actual and documented out of pocket expenses incurred by Purchaser in
connection with this Agreement with respect to any applicable terminated Housing
Community and the transactions contemplated hereby with respect thereto in an
aggregate amount not to exceed THE COST CAP (AS SET FORTH IN SCHEDULE 2), AND
EXCEPT FOR THOSE PROVISIONS THAT EXPRESSLY SURVIVE THE TERMINATION OF THIS
AGREEMENT, NEITHER PARTY SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO EACH
OTHER AT LAW OR IN EQUITY.  NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY, IF SELLER’S DEFAULT IS ITS REFUSAL TO DELIVER THE DEED AND THE OTHER
DOCUMENTS REQUIRED TO BE DELIVERED AT CLOSING, THEN PURCHASER WILL BE ENTITLED,
AS ITS SOLE REMEDY, TO SUE FOR SPECIFIC PERFORMANCE, PROVIDED THAT PURCHASER
ASSERTS SUCH CLAIM FOR SPECIFIC PERFORMANCE WITHIN THIRTY (30) DAYS FROM THE
SCHEDULED CLOSING DATE SET FORTH IN SECTION 8; PROVIDED, HOWEVER,
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, UNDER NO
CIRCUMSTANCES SHALL PURCHASER BE PERMITTED OR ENTITLED TO FILE A CLAIM OF LIS
PENDENS AGAINST ANY PROPERTY.  IF PURCHASER IS UNABLE TO ENFORCE THIS AGREEMENT
BY SUIT FOR SPECIFIC PERFORMANCE DUE TO SELLER SELLING THE PROPERTY TO A THIRD
PARTY and IF Purchaser entered into and paid for a rate lock agreement for its
acquisition loan, then Purchaser may recover Purchaser’s actual out-of-pocket
fee paid to its lender not to exceed two percent of the loan amount.

Seller’s Initials _MRM_________

Purchaser’s Initials __CA________

 

 

 

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13.PRORATIONS AND DELINQUENT RENTS.  

(a)Rents (exclusive of Delinquent Rent, as hereinafter defined, but including
prepaid rents); refundable security deposits and interest thereon if required by
law (which will be assigned to and assumed by Purchaser and credited to
Purchaser at Closing); water and other utility charges; fuels; prepaid operating
expenses; real and personal property taxes; and other similar items shall be
adjusted ratably as of 11:59 P.M. on the Pre-Closing Date (the “Proration
Date”), and credited or debited to the balance of the cash due at Closing.  All
supplemental taxes and assessments attributable to the period prior to the
Closing Date for the calendar year in which the Closing occurs shall be prorated
to the Closing Date; provided, however, in no event shall Seller be charged with
or (and Purchaser shall) be responsible for any increase in the taxes on the
Properties resulting from the sale of the Properties or from any improvements
made at any time from and after the Closing Date or any improvements constructed
in respect of Seller’s rights under Section 6(a).  Except as provided in
Section 13(a), if the amount of any of the items to be prorated is not then
ascertainable, the adjustment thereof shall be on the basis of the most recent
ascertainable data and will be reconciled by Seller and Purchaser when such data
is available, but in no event later than one hundred twenty (120) days after the
Closing Date, except for taxes and assessments which shall be reconciled as soon
as reasonably practical after applicable information is
obtained.  Notwithstanding any provision herein to the contrary, if any amounts
are not prorated as of the Closing and such amounts relate to periods prior to
the Closing Date, Seller and Purchaser shall prorate such amounts within one
hundred twenty (120) days after the Closing Date.  If special assessments have
been levied against the Properties for completed improvements, then the amount
of any installments which are due prior to the Closing Date shall be paid by the
Seller; and the amount of installments which are due after the Closing Date
shall be paid by Purchaser.  All assessments for incomplete improvements shall
be paid by Purchaser.  Purchaser acknowledges that Seller is currently
contesting the assessed valuation of the Property for the 2019 tax year (the
“Tax Protest”).  Seller shall retain the right to control the Tax Protest and
the right to receive any refunds resulting therefrom following the Closing, but
shall keep Purchaser reasonably informed regarding the status of the Tax
Protest.

(b)If, as of the Closing Date, any rentals, receipts, water, sewer or utility
charges, or other revenues from the Properties are in arrears (“Delinquent
Rent”) for the calendar month in which the Closing occurs, then Seller’s portion
of the first rent collected by Purchaser during that calendar month will be
delivered to Seller for the Delinquent Rent.  If Delinquent Rent is in arrears
for a period prior to the calendar month in which the Closing occurs, then rents
collected by Purchaser shall first be applied to current rent and then to
Delinquent Rent.  Purchaser shall use reasonable efforts after Closing to
collect all Delinquent Rent, and Seller shall have the right to take any action
to collect any such Delinquent Rent from any tenant that has vacated the leased
premises and is no longer a tenant of the Property, provided that Seller shall
have no right to exercise any other landlord remedy against such tenant other
than to sue for collection.  Purchaser shall deliver Seller’s pro rata share
within ten (10) days of Purchaser’s receipt of that Delinquent Rent.  In
addition to any other prorations described in this Agreement, any ratio utility
billing systems (“RUBS”) applicable to the Properties, for the following
categories of utilities and other reimbursements: (i) electricity, (ii) gas,
(iii) water / sewer, (iv) trash, (v) pest control and (vi) other, attributable
to the uncollected or trailing collections two calendar months prior to Closing
will be reflected as a credit to Seller at Closing and will be calculated for
closing purposes on the uncollected or trailing collections monthly periods
based on the monthly average actual trailing

 

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RUBS for three months prior to Closing according to the income statements
prepared by Seller and provided to Purchaser., and such amount shall be final
between Seller and Purchaser and not subject to adjustment after the Closing
Date.  Seller and Purchaser each agree to provide such information as the other
may reasonably request regarding RUBS and the billing, collection, and payment
thereof.  This Section 13(a) of this Agreement shall survive the Closing and the
delivery and recording of the Deed.

14.RECORDING.  This Agreement shall not be recorded in the real property records
and the act of recording by either party hereto shall be an act of default
hereunder and shall be subject to the provisions of Section 11 or Section 12, as
applicable.

15.ASSIGNMENT.  Purchaser shall not have the right to assign its interest in
this Agreement without the prior written consent of the Seller.  Any assignment
or transfer of, or attempt to assign or transfer Purchaser’s interest in this
Agreement shall be an act of default hereunder by Purchaser and subject to the
provisions of Section 11.  Seller hereby consents to an assignment to an entity
(or entities), the ownership and control of which is held by the same persons
owning and controlling Purchaser.  However, Purchaser shall remain liable for
all of Purchaser’s obligations and undertakings set forth in this Agreement and
the exhibits attached hereto.  Purchaser shall notify Seller of any assignment
no later than ten (10) days prior to the Closing Date.

16.BROKER. The parties hereto acknowledge that CBRE, Inc. (“Broker”) is the only
real estate broker involved in this transaction.  The foregoing does not apply
to any fee which may be paid by Seller to any affiliate of Seller or an
exclusive broker engaged by an affiliate of Seller as a result of this
transaction.  Seller agrees to pay Broker a commission or fee (“Fee”) pursuant
to an agreement between Seller and Broker.  Purchaser agrees to indemnify,
defend and hold harmless the Seller Related Parties from all claims, including
attorneys’ fees and costs incurred by a Seller Related Party as a result of
anyone’s claiming by or through Purchaser any fee, commission or compensation on
account of this Agreement, its negotiation or the sale hereby
contemplated.  Purchaser does now and shall at all times consent to a Seller
Related Party’s selection of defense counsel.  Seller agrees to indemnify,
defend and hold harmless Purchaser and all shareholders, employees, officers and
directors of Purchaser or Purchaser’s parent or affiliate (each of the above is
individually referred to as a “Purchaser Related Party”) from all claims,
including attorneys’ fees and costs incurred by a Purchaser Related Party as a
result of anyone’s claiming by or through Seller any fee, commission or
compensation on account of this Agreement, its negotiation or the sale hereby
contemplated.  Seller does now and shall at all times consent to a Purchaser
Related Party’s selection of defense counsel.  Notwithstanding anything
contained in this Agreement to the contrary, the provisions of this Section
shall forever survive the Closing and delivery and recording of the Deed or
earlier termination of this Agreement.

17.DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD.

(a)Seller has heretofore delivered or shall deliver or make available to
Purchaser within five (5) business days after the full execution of this
Agreement, originals or copies of the following documents to the extent that
they are in Seller’s possession, provided, however, that nothing in this Section
shall constitute a representation or warranty as to the delivery,

 

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accuracy or completeness of any documents described herein or otherwise in
Seller’s possession  (collectively the “Documents”):

(i)Copies of all certificates of occupancy.

(ii)Copies of any existing surveys of the Properties.

(iii)Copies of the most recent real estate and personal property tax bills.

(iv)Copies of all Service Contracts pertaining to the Properties and a schedule
listing all such Service Contracts.

(v)Copies of any Leases and licenses which are located at the Properties for
Purchaser’s review.

(vi)Unaudited income and expense statements of operations (hereinafter referred
to as the “Financial Statements”) for the Properties for the prior calendar year
and the latest available current calendar year.

(vii)A current inventory of all material personal property included in the sale.

(viii)Copies of any Phase I Environmental reports.

(ix)Where available, accounting information showing details of all revenues and
expenses for the operation during 2016, 2017, 2018 and year to date 2019. The
most recent 12 months are to be provided on a month to month basis supported by
monthly bank statements.

(x)Live pleadings in any pending litigation affecting the Property.

(xi)A copy of the standard lease document (including all addendums and
exhibits).

(xii)A copy of the 2016, 2017, 2018 and 2019 (when available) real estate tax
valuations and tax bills from the appropriate county and/or other jurisdiction.
If applicable, provide a personal property tax itemized report, valuations and
bills.

(xiii)To the extent available, a copy of all utility billings which are/were the
obligation of Seller for the past twelve months to include but not limited to
electric, gas, water, sewer (cable & internet if provided by Seller). Most
recent three months of detailed RUBS billing and collection history with
coinciding utility bills.

(xiv)Copies of all Service Agreements.

(xv)Copies of all assignable construction warranties and guaranties.

(xvi)All licenses, permits, and certificates of occupancy affecting the
Properties.

 

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(xvii)A current aged delinquency and prepaid report (if available).

(xviii)A month-by-month occupancy report for the property covering the past 12
months.

All of the Documents and the condition of the Properties shall be subject to
approval by Purchaser by the close of business (5:00 P.M. Mountain Time) on the
Approval Period (as set forth in Schedule 2).  Purchaser shall deliver written
notice (the “Diligence Notice”) to Seller stating either (i) that Purchaser
elects to terminate this Agreement, or (ii) that Purchaser elects not to
terminate this Agreement.  From the Effective Date through the Closing Date,
upon reasonable notice to the Seller, Purchaser shall have the right to inspect
and approve the condition of the Properties during normal business
hours.  Purchaser, its engineers, architects, employees, contractors and agents
shall maintain public liability insurance policies (in an amount of combined
single limit coverage of not less than Two Million Dollars ($2,000,000))
insuring against claims arising as a result of the inspections of the Properties
being conducted by Purchaser naming Seller and Property Manager, as additional
insureds.  Prior to commencing any tests, studies and investigations, Purchaser
shall deliver to Seller a certificate of insurance evidencing the existence of
the aforesaid policies, however, Purchaser’s failure to deliver said certificate
of insurance to Seller shall not in any way waive Purchaser’s obligation to
maintain or caused to be maintained said public liability policies in accordance
with the terms of the previous sentence.  Purchaser shall indemnify, defend,
protect and hold the Seller Related Parties harmless from any and all loss,
costs, including attorneys’ fees, liability or damages which any of the Seller
Related Parties may incur or suffer as a result of Purchaser conducting its
inspection and investigation of the Properties including the entry of Purchaser,
its employees or agents and its lender onto the Properties, including without
limitation, liability for mechanics’ lien claims; provided, however, the
foregoing indemnity shall not apply to (i) Purchaser’s mere discovery of
pre-existing conditions at the Property; or any (ii) loss, costs, including
attorneys’ fees, liability or damages attributable to Seller’s gross negligence
or willful misconduct.  Purchaser’s rights under this Section shall not include
the right to conduct any Phase II-type environmental audit or invasive or
destructive testing of the Properties (including, without limitation, any soil
sampling, excavation or other physical testing) without Seller’s prior written
approval (which approval shall not be unreasonably withheld or delayed) of the
specific types and extent of such audit or testing and the entity which is to
perform such audit or test; provided, however, in no event shall Purchaser have
the right to perform (and Purchaser shall not perform) any test, investigation,
drilling or other action involving or which may disturb or contaminate any
ground water under or adjacent to the Properties.  If Seller’s on-site
management personnel refuse to allow Purchaser to perform testing of the
Improvements (invasive or otherwise), then Purchaser shall immediately deliver
written notice to Seller of such refusal.  Purchaser shall have the right, prior
to the expiration of the Approval Period, to inspect the apartment units
(collectively, the “Units”); provided, however, in no event shall Purchaser,
without being accompanied by a representative of Seller, (i) contact any Tenant
of the Properties or (ii) enter any Unit whether or not occupied by a
Tenant.  Seller shall have the right, at its option, to cause a representative
of Seller to be present at all on-site inspections, reviews and examinations
conducted hereunder.  Purchaser shall keep all information or data received or
discovered in connection with any of the inspections, reviews or examinations
strictly confidential.  Notwithstanding anything contained in this Agreement to
the contrary, Purchaser’s indemnity obligations under this Section shall forever
survive the Closing and delivery and recording of the Deed or the earlier
termination of this Agreement.  

 

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(b)Purchaser acknowledges that it is a sophisticated and experienced purchaser
of real estate; that numerous apartment complexes contain mold; water damage,
fungi, bacteria and/or other biological growth or biological growth factors; and
that the Properties may contain mold, water damage, fungi, bacteria, and/or
other biological growth or biological growth factors which Purchaser may not
discover during the Approval Period.  Purchaser agrees that in purchasing the
Properties from the Seller, it is assuming the risk that the Properties may
contain mold, water damage, fungi, bacteria, and/or other biological growth or
biological growth factors even as a result of a patent or latent construction
defect.

(c)Purchaser agrees to restore any damage to the Properties which may arise as a
result of Purchaser’s inspection of the Properties.

(d)Purchaser shall not, directly or indirectly, cause any governmental agency,
authority, department or employee to inspect any portion of the Properties.

(e)If at any time prior to the expiration of the Approval Period, Purchaser
discovers or is advised of any fact or circumstance which would cause a
representation or warranty of Seller to be untrue or misleading, or with the
passage of time would become untrue or misleading, then Seller’s representation
shall be deemed modified to the extent of Purchaser’s knowledge prior to the
expiration of the Approval Period.

(f)In the event that Purchaser delivers a Diligence Notice stating that
Purchaser elects to terminate this Agreement, then upon receipt of such
Diligence Notice, the Earnest Money (less the Independent Consideration) on
deposit with the Escrow Agent shall be released and delivered to Seller, unless
the reason for such termination is as a result of a Material Title Defect or a
Material Environmental Issue (both hereinafter defined), in which event the
Earnest Money shall be returned to Purchaser, and this Agreement shall be deemed
terminated, and except for those provisions that expressly survive the
termination of this Agreement, neither party shall have any further obligation
or liability hereunder. In the event that Purchaser delivers a Diligence Notice
stating that Purchaser elects to proceed with this Agreement, then Purchaser
shall no longer have the right to terminate this Agreement pursuant to this
Section 17, the Earnest Money shall become fully nonrefundable (unless otherwise
expressly stated herein) and it shall be conclusively presumed that Purchaser
(i) has approved the Documents, any surveys obtained, and the condition of title
and condition to the Properties, (ii) has acknowledged and agreed that Purchaser
has been given adequate access to inspect the Properties, including the
opportunity to conduct invasive testing to discover any patent or latent defects
in or on the Properties, examine the books and records relating to the
Properties; conduct interviews or take any other necessary steps to fully and
adequately discover any and all latent or patent defects with the Properties,
(iii) has acknowledged that it has the full and complete knowledge necessary to
purchase the Properties, or has chosen not to obtain the full and complete
knowledge, although provided with the opportunity by Seller, and (iv) has
conducted, or had the opportunity to conduct, sufficient examination of the
building, building envelope, building systems, building grounds, building
components and surrounding conditions including but not limited to soils and the
environmental condition of the Properties.  The failure of Purchaser to deliver
the Diligence Notice to Seller by the expiration of the Approval Period shall be
deemed to be the delivery of a Diligence Notice by Purchaser electing to
terminate this Agreement. A “Material Environmental Issue” means (A) the
presence on the Property of Hazardous Substances or Hazardous Materials and
(B)(i) the presence of which substances or

 

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materials are such that the same will materially and adversely affect
Purchaser’s ability to own and operate the Property as it is currently being
operated as of the Effective Date or (ii) causes Freddie Mac, Fannie Mae, or a
national lender to refuse to provide financing for the acquisition of the
Property.  A “Material Title Defect” means an encumbrance or defect in legal
title to the Property that (i) materially and adversely affects Purchaser’s
ability to own and operate the Property as it is currently being operated as of
the Effective Date or (ii) causes Freddie Mac, Fannie Mae, or a national lender
to refuse to provide financing for the acquisition of the Property.

Purchaser’s Initials _CA_________

(g)On or before the expiration of the Approval Period, Purchaser may deliver
written notice to Seller (the “Service Contracts Notice”) specifying any Service
Contracts which Purchaser desires to terminate at the Closing (the “Terminated
Contracts”); provided that (a) the effective date of such termination on or
after Closing shall be subject to the express terms of such Terminated
Contracts, (b) if any such Service Contract cannot by its terms be terminated at
Closing, it shall be assumed by Purchaser and not be a Terminated Contract, and
(c) to the extent that any such Terminated Contract requires payment of a
penalty, fee or premium for cancellation, Purchaser shall be solely responsible
for the payment of any such cancellation fees, penalties or premiums.  If
Purchaser fails to deliver the Service Contracts Notice on or before the
expiration of the Approvals Period, there shall be no Terminated Contracts and
Purchaser shall assume all Service Contracts at the Closing.  If Purchaser
delivers the Service Contracts Notice to Seller on or before the expiration of
the Approval Period, then Seller shall deliver a vendor termination notices for
each Terminated Contract informing the vendor(s) of the termination of such
Terminated Contract as of the Closing Date (subject to any delay in the
effectiveness of such termination pursuant to the express terms of each
applicable Terminated Contract) (the “Vendor Terminations”).  Seller shall
request its property manager to sign the Vendor Terminations prepared by
Purchaser, and deliver them to all applicable vendors.  To the extent that any
Service Contract to be assigned to Purchaser requires vendor consent, then,
prior to the Closing, Seller shall obtain from each applicable vendor a consent
(each a “Required Assignment Consent”) to such assignment.  The provisions of
this Section shall survive the Closing.

18.SELLER’S REPRESENTATIONS, WARRANTIES AND COVENANTS.

(a)Any reference in this Agreement to Seller’s knowledge or to the best of
Seller’s knowledge shall mean solely such actual (and not constructive or
imputed) knowledge or notice that as has actually been received by Matt
McGraner, who shall not have made, and who shall not have any duty to make, any
inquiry of any kind with respect to such matters.  Any knowledge or notice
given, had or received by any of Seller’s agents, servants or employees (other
than notice actually given to Matt McGraner) shall not be construed or imputed
to Seller or its constituent entities or their owners.  Matt McGraner shall have
no personal liability to Purchaser or any other person or entity for any breach
of any representation, warranty or covenant by Seller in this Agreement.  Matt
McGraner is acting for and on behalf of Seller and in a capacity as a
representative of Seller or one or more of Seller’s affiliates and is in no
manner expressly or impliedly making any representations in an individual
capacity.  Purchaser waives any right to sue or seek any personal judgment or
claim against Matt McGraner.

 

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(b)Except in all cases for (i) any fact, information or condition disclosed in
the Documents, the Title Commitments, the Permitted Exceptions, any survey
provided to or obtained by Purchaser, the Service Contracts, the Rent Roll, any
environmental report provided to or obtained by Purchaser, or any other
documents or materials provided by Seller to Purchaser prior to Closing, (ii)
any matter disclosed in any exhibits or schedules to this Agreement (as updated
from time to time pursuant to this Agreement), (iii) any matter disclosed by
Purchaser’s diligence or inspection of the Property (including, without
limitation, zoning reports, property condition reports, or similar third-party
reports), or (iv) any fact, information or condition of which Purchaser
otherwise has knowledge, and subject to the limitations set forth in
subparagraph (a) above, Seller hereby makes the following representations,
warranties and covenants, all of which are made to the best of Seller’s
knowledge, as of the date of this Agreement (and shall be remade by Seller as of
Closing):

(i)Seller has not received written notice of any pending litigation action,
suit, condemnation, arbitration, administrative or judicial proceeding, or
unsatisfied order or judgment, affecting title to the Properties or the
transaction contemplated by this Agreement, except as may be set forth on
Exhibit L attached hereto.

(ii)This Agreement has been, and each Closing Document shall have been as of
Closing, been duly authorized and executed on behalf of each Seller and
constitutes a valid and binding agreement, enforceable in accordance with its
terms.  Each Seller has been duly organized and is validly existing and in good
standing under the laws of the State of Delaware and is duly qualified to
transact business in the State where the Housing Community that it owns is
located.  Neither the execution and delivery by Seller of this Agreement or the
Closing Documents, nor the consummation of the transaction contemplated hereby,
will (x) conflict with, or result in any violation of, (i) the organizational
documents of any Seller, (ii) any agreement, instrument or document to which any
Seller is a party or to which any portion of the Property is subject or (iii)
any law, regulation, governmental authorization, order, writ, judgement or
decree or any provisions of any agreement or judicial order, in each case, to
which any Seller is a party or to which any portion of the Property is subject
or (y) result in the creation or imposition of any lien or encumbrance on any
portion of the Property.  The person signing this Agreement on behalf of Seller
is authorized to do so.  

(iii)Seller does not have any employees on site at the Properties.

(iv)Attached hereto as Exhibit M is a list of all current Service Contracts
(excepting the property management agreement which shall be terminated at
Closing) entered into by Seller and/or its property manager or leasing agent
relating to the management, maintenance, leasing or operation of the
Properties.  

(v)The Rent Roll attached hereto as Exhibit K is, and each rent roll hereafter
delivered by Seller to Purchaser shall be, the rent roll maintained by Seller
and relied on by Seller for internal administration and accounting purposes.  To
Seller’s knowledge, there are no tenant delinquencies under any Leases, except
as set forth in the Rent Roll.  Notwithstanding any provision of this Agreement
to the contrary, Seller does

 

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not represent or warrant that any particular Lease will be in force or effect at
any Closing or that the tenants under the Leases will have performed their
obligations thereunder.  

(vi)No Seller is a “foreign person” as defined in Section 1445 of the Code, and
the regulations adopted thereunder. Each Seller shall deliver such documentation
as required under Section 1445 of the Code to establish that such Seller is not
subject to the withholding requirements of Section 1445 of the Code.

(vii)No Seller has (i) made a general assignment for the benefit of creditors,
(ii) filed any voluntary petition in bankruptcy or suffered the filing of any
involuntary petition by Seller’s creditors, (iii) suffered the appointment of a
receiver to take possession of all, or substantially all, of such Seller’s
assets or any portion of the Property, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of such Seller’s assets or any
portion of the Property, (v) admitted in writing its inability to pay its debts
as they come due, or (vi) made an offer of settlement, extension or composition
to its creditors generally.

(viii)Seller is not delinquent in the payment of any ad valorem property taxes
that are currently due and payable with respect to the Property.

 

(ix)To Seller’s knowledge, Seller has not received any written notice from any
governmental authority that Seller or the Property is in material violation of
any applicable laws (other than Environmental Laws), rules or regulations.  

 

(x)To Seller’s knowledge, except as set forth in any environmental report or
assessment previously made available to or obtained by Purchaser, 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 as of the Effective Date.

(c)Seller hereby covenants that prior to the Closing:

(i)Seller shall operate, lease, insure, and manage the Properties (or to cause
its property manager to do so) in at least the same manner that Seller (or its
property manager, as the case may be) has heretofore operated, leased and
managed the Properties (wear and tear, and casualty excepted).  

(ii)Seller will not, without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld, delayed or conditioned, permit any
material structural modifications or additions to the Properties.

(iii)Seller will not remove any Personal Property, unless it is replaced by
similar personal property of at least equal value.

(iv)Seller shall place apartment units that are now vacant or that become vacant
into rent-ready condition on or before such Closing Date substantially in
accordance with Seller’s current management standards for its apartment
properties as though no sale

 

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of the Property were contemplated or, at Seller’s option, provide Purchaser a
credit at such Closing equal to the Rent Ready Credit (as set forth in Schedule
2) per unit for the apartment units that are not in rent-ready condition on such
Closing Date; provided, however, that with respect to apartment units vacated
during the ten (10) day period ending on such Closing Date on which the
applicable Housing Communities are sold, Seller shall have no obligation either
to put such units into rent-ready condition or to give Purchaser a credit for
the cost of doing so.  

(v)Seller shall advise Purchaser promptly after Seller’s receipt of any written
notice of litigation, arbitration proceeding or administrative hearing
(including condemnation) before any governmental agency which materially and
adversely affects the Property.  Seller shall deliver to Purchaser promptly
after receipt thereof copies of any written notices received by any Seller of
(i) violations or other written notices regarding material violations of
applicable laws affecting the Property, or (ii) any material defaults under any
Service Contract.

(vi)In the event that Purchaser’s proposed lender with respect to any Housing
Community (“Purchaser’s Lender”) requires Purchaser to deliver (i) estoppels to
any parties to any declaration, reciprocal easement agreement, Lease (other than
a residential lease) or Service Contract (“Estoppels”) and/or (ii)
subordination, nondisturbance and attornment agreements (“SNDAs”) in connection
with Purchaser’s financing of the Property (or any portion thereof) or otherwise
requests Purchaser to attempt to obtain same, Seller shall, at Purchaser’s cost
and expense, deliver to the applicable third party each such requested Estoppel
and/or SNDA (as applicable) prepared by Purchaser or Purchaser’s Lender and
shall endeavor to obtain the return of an executed Estoppel and/or an SNDA (as
applicable) in substantially the same form. In no event shall Purchaser’s
receipt of any such requested Estoppels or SNDAs be a condition to Closing. In
no event shall Seller be required to deliver requests for such Estoppels and/or
SNDAs (as applicable) for any residential Leases.

d.

Purchaser’s right to make a claim against Seller for a breach of an indemnity
(except for Seller’s indemnity for a brokerage commission), representation,
warranty or covenant under this Agreement or the Exhibits attached hereto
(“Claim”) shall expire on the Survival Date (as set forth in Schedule 2) and may
not be asserted as to any matter as to which Purchaser had knowledge prior to
Closing.   As to any Claim, Purchaser must: (i) notify Seller of the existence
of the Claim in question prior to the Survival Date, which notification (“Claim
Notice”) shall contain a reasonable description of the nature of the Claim or
the facts, circumstances, conditions or events then known to Purchaser which
give rise to the claim in question; and (ii) institute legal proceedings in a
court of competent jurisdiction within thirty (30) days after delivery of the
Claim Notice to Seller (“Judicial Proceedings Date”).  Any Claim for which a
Claim Notice is not delivered by Purchaser to Seller on or prior to the Survival
Date or for which legal proceedings are not instituted on or prior to the
Judicial Proceedings Date, then such Claim shall be deemed to have been waived
by Purchaser and rendered null and void and of no further force or
effect.  Seller’s total liability in the aggregate for all Claims shall not
exceed the Liability Cap (as set forth in Schedule 2).  Seller shall not be
liable for any Claim(s) which in the aggregate do(es) not exceed the Liability
Threshold (as set forth in Schedule 2).

 

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19.PURCHASER’S REPRESENTATIONS AND WARRANTIES.

(a)If Purchaser is an entity, it is duly organized, validly existing and in good
standing under the laws of the state of its formation. Purchaser is authorized
to transact business in the state in which the Properties a located. Purchaser
has full power and authority to enter into and perform this Agreement in
accordance with its terms, and the persons executing this Agreement on behalf of
Purchaser have been duly authorized to do so.

(b)This Agreement is, and all agreements, instruments and documents to be
executed and delivered by Purchaser pursuant to this Agreement shall be, valid
and legally binding upon Purchaser and enforceable in accordance with their
respective terms.

(c)Performance of this Agreement will not result in any breach of, or constitute
any default under, any agreement or other instrument to which Purchaser is a
party or by which Purchaser might be bound.

(d)Neither the execution or delivery of, nor the performance under, this
Agreement by Purchaser will (a) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to Purchaser or the articles of
incorporation, by-laws or other similar corporate and/or organizational and
governing documents of Purchaser, or (b) result in a breach of or constitute or
cause a default under any indenture, agreement, lease or instrument to which
Purchaser is a party or by which the Properties may be bound or affected.

(e)No petition in bankruptcy (voluntary or otherwise), assignment for the
benefit of creditors, or petition seeking reorganization or arrangement or other
action under Federal or state bankruptcy law is pending against or, to the best
of Purchaser's knowledge, contemplated by Purchaser.

(f)There are no actions, suits, claims or other proceedings pending or, to the
best of Purchaser's knowledge, contemplated or threatened against Purchaser that
could affect Purchaser's ability to perform its obligations when and as required
under the terms of this Agreement.

(g)Purchaser is not, and will not become, a person or entity with whom United
States persons or entities are restricted from doing business under regulations
of the Office of Foreign Asset Control, Department of the Treasury ("OFAC") of
the Department of the Treasury (including those named on OFAC's Specially
Designated and Blocked Persons list), or under any statute, executive order
(including the September 24, 2002, Executive Order blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support
Terrorism) or other governmental action and is not and will not engage in any
dealing or transaction or be otherwise associated with such persons or entities.

20.COMPLIANCE WITH OFAC.

(a)To the best knowledge of Purchaser, without any duty to make diligent
inquiry, Purchaser is in compliance with all laws, statutes, rules and
regulations or any federal, state or local governmental authority in the United
States of America applicable to Purchaser and

 

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all beneficial owners of Purchaser, including, without limitation, the
requirements of Executive Order No. 13224, 66 Fed Reg. 49079 (September 25,
2001) (the “Order”) and in any enabling legislation or other Executive Orders in
respect thereof (the Order and such other rules, regulations, legislation, or
orders are collectively called the “Orders”).  Purchaser agrees to make its
policies, procedures and practices regarding compliance with the Orders
available to Seller for its review and inspection during normal business hours
and upon reasonable prior notice.

(b)Neither Purchaser nor any beneficial owner of Purchaser:

(i)is listed on the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to the Order and/or on any other list of terrorists
or terrorist organizations maintained pursuant to any of the rules and
regulations of OFAC or pursuant to any other applicable Orders (such lists are
collectively referred to as the “Lists”);

(ii)has been determined by competent authority to be subject to the prohibitions
contained in the Orders;

(iii)is owned or controlled by, nor acts for or on behalf of, any person or
entity on the Lists or any other person or entity who has been determined by
competent authority to be subject to the prohibitions contained in the Orders;
or

(iv)shall transfer or permit the transfer of any interest in Purchaser or any
beneficial owner in Purchaser to any person who is or whose beneficial owners
are listed on the Lists.

If Purchaser obtains knowledge that Purchaser or any beneficial owner in
Purchaser has become listed on the Lists or has been indicted, arraigned, or
detained (in a custodial manner) on charges involving money laundering or
predicate crimes to money laundering, Purchaser shall immediately notify Seller
and in such event, Seller shall have the right to terminate this Contract
without penalty or liability to Seller immediately upon delivery of written
notice thereof to Purchaser.  In such event the Earnest Money shall be returned
to Purchaser.

21.FURTHER NEGOTIATIONS.  For one (1) year following Closing, Purchaser shall
comply with the Right to Offer described Schedule 2.  This Section 21 shall
survive the Closing.

22.INTENTIONALLY DELETED.  

23.ORGANIZATIONAL DOCUMENTS.  At least ten (10) days prior to the Closing Date,
Purchaser and Seller will provide Escrow Agent with copies of their respective
organizational documents as required by Escrow Agent.

24.TIME OF ESSENCE.  Time is of the essence of this Agreement.

25.NOTICES.  Any notice or demand which either party hereto is required or may
desire to give or deliver to or make upon the other party shall be in writing
and may be personally delivered or given or made by overnight courier such as
Federal Express or by facsimile (in the

 

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case of facsimile followed by delivering such notice using one of the other
methods of delivery):

TO SELLER:

c/o Highland Capital Management, L.P.

300 Crescent Court, Suite 700

Dallas, Texas  75201

Attn:  Matt R. McGraner

Tel:  (972) 419-6229

Fax: (972) 628-4147

Email: MMcGraner@hcmlp.com

 

 

with a copy to:

Wick Phillips Gould & Martin, LLP

3131 McKinney Avenue, Suite 100

Dallas, TX  75204

Attn:  Chris Fuller

Tel: 214-740-4023

Email: cfuller@wickphillips.com

and

Attn:  D.C. Sauter

Tel: 214-740-4043

Email: dcsauter@wickphillips.com

 

 

 

TO PURCHASER:

c/o Bridge Acquisitions and Dispositions, LLC

111 E. Sego Lily Drive, Suite 400

Sandy, UT 84070

Attention: Colin Apple

Telephone: 801-716-4552

Email:        Collin.Apple@bridgeig.com

 

with a copy to:

 

Ward | Molloy, P.C.

68 South Main Street, 8th Floor

Salt Lake City, Utah 84101

Attention: Curtis Ward

Phone: 801-258-9801

Email: cward@wardmolloy.com

 

Attention: Brynn Hill

Phone: 801-258-9803

Email: bhill@wardmolloy.com

subject to the right of either party to designate a different address for itself
by notice similarly given.  Any notice or demand so given shall be deemed to be
delivered or made on the next business day if sent by overnight courier, or on
the same day if sent by facsimile or personal delivery before the close of
business, or the next day if sent by facsimile or personal delivery after

 

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the close of business.  Any such notice, demand or document not given, delivered
or made by overnight courier, personal delivery or facsimile as aforesaid shall
be deemed to be given, delivered or made upon receipt of the same by the party
to whom the same is to be given, delivered or made.  Copies of all notices shall
be served upon the Escrow Agent.

26.EXECUTION OF AGREEMENT.  The parties hereto will each execute one (1)
original of this Agreement and forward such original to the Escrow Agent.  This
Agreement may be executed in multiple counterparts, and by the parties hereto on
separate counterparts, and each counterpart, when so executed and delivered,
shall constitute an original agreement, and all such separate counterparts shall
constitute one and the same agreement.   Each party (i) has agreed to permit the
use, from time to time, of telecopied signatures in order to expedite the
transaction contemplated by this Agreement, (ii) intends to be bound by its
telecopied signature, (iii) is aware that the other will rely on the telecopied
signature, and (iv) acknowledges such reliance and waives any defenses (other
than fraud) to the enforcement of any document based on the fact that a
signature was sent by telecopy.  As used herein, the term "telecopied signature"
shall include any signature sent via facsimile or via email in portable document
format (".pdf").    

27.GOVERNING LAW.  The provisions of this Agreement shall be governed by the
laws of the State of Texas without regard to conflicts of laws principles.

28.ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement between
the parties and supersedes all other negotiations, understandings and
representations made by and between the parties and the agents, servants and
employees.

29.COUNTERPARTS.  This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same instrument.

30.CAPTIONS.  Section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend or
describe the scope of this Agreement or any provision hereof.

31.NON-BUSINESS DAYS.  Whenever action must be taken (including the giving of
notice of the delivery of documents) under this Agreement during a certain
period of time (or by a particular date) that ends (or occurs) on a non-business
day, then such period (or date) shall be extended until the immediately
following business day.  As used herein, “business day” means any day other than
a Saturday, Sunday or federal holiday.

32.SEVERABILITY.  If any term or provision of this Agreement or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each such term and
provision of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.

33.NO WAIVER.  No waiver by a party of any breach of this Agreement or of any
warranty or representation hereunder by the other party shall be deemed to be a
waiver of any other breach by such other party (whether preceding or succeeding
and whether or not of the same or

 

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similar nature), and no acceptance of payment or performance by a party after
any breach by the other party shall be deemed to be a waiver of any breach of
this Agreement or of any representation or warranty hereunder by such other
party, whether or not the first party knows of such breach at the time it
accepts such payment or performance.  No failure or delay by a party to exercise
any right it may have by reason of the default of the other party shall operate
as a waiver of default or modification of this Agreement or shall prevent the
exercise of any right by the first party while the other party continues to be
so in default.

34.ATTORNEYS’ FEES.  In the event either party commences legal proceedings
against the other party pursuant to any right to do so under this Agreement,
then the prevailing party shall be entitled to recover reasonable attorneys’
fees and costs.

35.TAX DEFERRED EXCHANGE.  Purchaser and Seller may use the Properties in
connection with a 1031 or 1033 tax deferred exchange (“Exchange”).  The parties
agree to cooperate with each other and will execute such documents as may
reasonably be required by each other in order to effectuate an Exchange,
provided that no later than five (5) business days prior to the Closing Date,
the party (“Exchange Party”) seeking to effectuate an Exchange, delivers to the
other party (“Cooperating Party”) copies of all of the documents which the
Cooperating Party is required to execute in order to effectuate an
Exchange.  The Cooperating Party will not assume any liability or cost in
connection with an Exchange and the Closing will not be delayed in order to
effectuate an Exchange.  Either party’s inability to obtain any benefits for an
Exchange under Sections 1031 or 1033 of I.R.C. will not relieve such party of
any of its obligations under this Agreement.  The Exchange Party hereby agrees
to indemnify, defend and hold the Cooperating Party harmless from any damages,
costs or claims incurred by reason of the Exchange.  The provisions of this
Section shall survive the Closing and delivery and recording of the Deed.

36.CONFIDENTIALITY.  Purchaser and Seller each hereby agree to keep the terms
and conditions of this Agreement and any information obtained with reference to
the Properties confidential, provided that the parties may reveal such
information regarding the terms and provisions of this Agreement as may be
necessary in their reasonable discretion to comply with the provisions of this
Agreement or in the ordinary course of business.  Nothing in this Section 36,
however, shall prohibit (a) the parties from making disclosures to their
respective legal counsel, certified public accountants, professional advisors,
current and prospective lenders and financial partners and investors, (b) the
parties from making disclosures that are otherwise required as a matter of law
(including, without limitation, any determination by Seller or any of its direct
or indirect owners that such disclosure is made to comply with the freedom of
information act or any public records act), or (c) the parties from making
disclosures in connection with asserting or defending any action relating to the
Properties or this Agreement.  This Section 36 shall survive the Closing and the
delivery and recording of the Deed or earlier termination of this Agreement.

37.SURVIVAL OF INDEMNIFICATION.  Notwithstanding anything contained in this
Agreement to the contrary, all of Purchaser’s indemnity obligations contained in
this Agreement and the Exhibits attached hereto shall forever survive the
Closing and the delivery and recording of the Deed or the earlier termination of
this Agreement.

38.DRAFTING.  This Agreement shall not be construed more strictly against any
party merely by virtue of the fact that the same has been prepared by such party
or its counsel, it being

 

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

 

recognized that each party hereto has contributed substantially and materially
to the preparation of this Agreement, and that each party hereto acknowledges
and waives any claim contesting the existence and the adequacy of the
consideration given by the other parties hereto in entering into this Agreement.

39.NO SURVIVAL.  Except as to those obligations which specifically survive the
Closing, all of Seller’s other obligations hereunder shall merge with the Deed.

40.WAIVER OF JURY.  In the event of a dispute, the parties hereto waive a trial
by jury.

41.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 the Closing, as may be reasonably
requested by the other party to consummate more effectively the purposes or
subject matter of this Agreement.  The provisions of this Section 41 shall
survive the Closing.

42.JOINT AND SEVERAL LIABILITY.  Each Seller who is a party as a Seller to this
Agreement (“Seller Party”) shall be jointly and severally liable for all of the
obligations and liabilities of Seller (and each other Seller) under this
Agreement.  Without limiting the generality of the foregoing, (i) each reference
herein to Seller shall also be deemed to refer to each Seller Party, (ii)
references in this Agreement to the phrase “received by Seller” (or words of
similar import) shall mean received by any Seller Party, (iii) references in
this Agreement to the phrase “given by Seller” (or words of similar import)
shall mean given by any Seller Party, and (iv) references in this Agreement to
the phrase “in the possession of Seller” (or words of similar import) shall mean
the possession of any Seller Party. Each Seller Party hereby irrevocably
appoints NexPoint Residential Operating Partnership, L.P., a Delaware limited
partnership (the “Seller Agent”), to act as an agent for Seller (and for each
Seller Party individually) in connection with all actions to be taken by Seller
and/or a Seller Party in connection with this Agreement (including, without
limitation, giving and receiving notices, granting or denying of consents, and
accepting payments to be made to Seller under this Agreement).  Accordingly (and
without limiting the generality of the foregoing), (i) if Purchaser pays any
amounts in connection with this Agreement to the Seller Agent (including the
Purchase Price, as adjusted in accordance with this Agreement), then the same
shall be deemed duly paid to all Seller(s) (and thus to all of the Seller
Parties) for all purposes of this Agreement; (ii) any consent, approval or other
notice given by the Seller Agent to Purchaser shall be deemed to have been given
by, and shall be binding on, all Sellers (and thus all of the Seller Parties)
for all purposes of this Agreement, and Purchaser shall have the right to rely
on any such consent, approval or other notice so given; (iii) any notice given
by Purchaser to the Seller Agent shall be deemed to have been given to all
Sellers (and thus all of the Seller Parties) for all purposes of this Agreement;
and (iv) each Seller Party hereby irrevocably appoints the Seller Agent as the
agent for the service of process on each of the Sellers (and thus all of the
Seller Parties).  Notwithstanding the foregoing, Purchaser may insist that any
action (such as the execution of a deed or other closing documents) that is
required to be taken by Seller or any individual Seller Party pursuant to this
Agreement actually be taken by Seller Agent (and thus all of the Seller Parties)
or such individual Seller Party, as the case may be (rather than by the Seller
Agent acting as agent therefor).  In the event more than one person and/or
entity executes or becomes a party to this Agreement as Purchaser, including by
assignment, each such person and/or

 

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entity which comprises Purchaser under this Agreement shall be jointly and
severally liable for all of the obligations, covenants and liabilities and shall
jointly exercise any rights or remedies available under this Agreement and any
exhibit hereto.  The provisions of this Section 42 shall survive the Closing.

 

43.ABBINGTON WORK.  Seller shall use commercially reasonable efforts (i) to
complete the Abbington Work (as set forth in Schedule 2), at its sole cost and
expense, which cost shall not be capped by the Rent Ready Credit; provided, that
if the Abbington Work is not completed by the Closing Date, Seller shall credit
Purchaser for the reasonable cost of the incomplete Abbington Work at Closing,
not to exceed the Abbington Work Cap (as set forth in Schedule 2).

 

44.EDGEWATER WORK.  On or before the Closing Date, Seller shall procure a
business license for Edgewater at Sandy Springs and provide compliance
documentation for code violation BL201900355.

 

 

SIGNATURE PAGES FOLLOW

 

 

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

 

IN WITNESS WHEREOF, the parties hereto have put their hand and seal as of the
date set forth above.

Executed by Purchaser on

 

PURCHASER:

June 25, 2019.

 

 

 

 

Bridge Acquisitions, Asset Management and Dispositions, LLC,

A Utah limited liability company

 

By: /s/ Colin Apple

Name:Colin Apple

Title: Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

Executed by Seller on

 

SELLER:

June 25, 2019.

 

FRBH DUCK CREEK, LLC, a Delaware limited liability company

 

 

 

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized Signatory

 

 

 

NXRTBH HEATHERSTONE, LLC, a Delaware limited liability company

 

 

 

By: /s/ Matt McGraner
Name:Matt McGraner

Title:Authorized Signatory

 

 

 

 

 

FRBH ABBINGTON, LLC,

a Delaware limited liability company

 

 

 

 

By: /s/ Matt McGraner
Name:Matt McGraner

Title:Authorized Signatory

 

 

 

FRBH EDGEWATER OWNER, LLC,
a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized Signatory

 

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

 

 

 

 

FRBH DANA POINT, LLC,
a Delaware limited liability company

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized Signatory

 

 

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JOINDER BY ESCROW AGENT

Escrow Agent has executed this Agreement in order to confirm that Escrow Agent
shall hold the Earnest Money required to be deposited under this Agreement and
the interest earned thereto, in escrow, and shall disburse the Earnest Money,
and the interest earned thereon, pursuant to the provisions of this Agreement.

NEXVANTAGE TITLE SERVICES

 

 

Date executed by Escrow Agent

_6-26-19_______________________

 

By: /s/ Jeff Justema

Name: Jeff Justema

Title: VP

 

 

 

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Schedule 1

Purchase Price

Two Hundred Eighty Nine Million Eight Hundred Seventy Five and No/100 Dollars
($289,875,000.00)

 

 

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Schedule 1(a)

Purchase Price Allocations

 

Pointe at Foothills

$85,400,000

Duck Creek

$29,500,000

Abbington Heights

$28,050,000

The Ashlar

$29,400,000

Heatherstone

$16,275,000

Edgewater

$101,250,000

 

 

 

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Schedule 2

 

Defined Terms

 

Earnest Money:

Nine Million and No/100 Dollars ($9,000,000.00) (Section 2)

 

Seller’s Closing Costs:

(i) Seller’s attorneys’ fees, (ii) the fee owed to Broker, (iii) the cost of
each title policy in an amount up to the Allocated Purchase Price for each
Property, (iv) one-half (½) of any escrow fees (unrelated to any Purchaser
financing) pertaining to the sale of the Properties, and (v) transfer taxes or
documentary stamps to be paid with reference to the recording of the Deeds
(Section 5)

 

At Closing, Seller will provide Purchaser with a credit in the amount of One
Hundred Fifteen Thousand and No/100 Dollars ($115,000.00) in consideration of
Purchaser’s agreement to extend the Closing Date to August 30, 2019.  

Purchaser’s Closing Costs:

(i) Purchaser’s attorneys’ fees, (ii) one-half (½) of any escrow fees pertaining
to the sale of the Properties, (iii) the cost of any endorsements and extended
coverage to the title policy for the Properties, (iv) any and all recording fees
(except as set forth above), (v) any and all costs related to any financing that
may be obtained by Purchaser in connection with its acquisition of the
Properties, (vi) any costs and fees related to ordering any update of the
existing survey(s) for the Properties, and (vii) all costs of Purchaser’s due
diligence in connection with the transaction contemplated hereby (Section 5)

Materiality Threshold:

Five percent (5.0%) of the Allocated Purchase Price of any Housing Community
(Section 6)

 

Approval Period:

July 3, 2019 (Section 17)

 

Closing Date:

September 3, 2019 with respect to the Abbington Housing Community, and with
respect to all other Housing Communities, August 30, 2019 (Section 8)

 

Cost Cap:

One Hundred Eighty Seven Thousand Five Hundred and No/100 Dollars ($187,500.00)

 

Survival Date:

One hundred twenty (120) days after the Closing

 

Liability Cap:

One and 4/10 percent (1.4%) of the Purchase Price

 

Liability Threshold:

Twenty-Five Thousand and No/100 Dollars ($25,000.00)

 

 

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

 

Rent Ready Credit:

Seven Hundred Fifty and no/100 Dollars ($750.00) (Section 18)

 

Abbington Work:

Unit 102: Repair fire damage as set forth in the Contract attached hereto as
Schedule 3.

Unit 123: Complete plumbing work as set forth in the Contract attached hereto as
Schedule 3.

Unit 168: Complete plumbing work as set forth in the Contract attached hereto as
Schedule 3.  

 

Abbington Work Cap:

$54,434.00

 

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

 

Right to Offer:

If, during the one (1) year period following the Closing Date of this Agreement,
Purchaser, in its sole and absolute discretion, determines that it will endeavor
to sell any portion of the Property to an unrelated third party, then Purchaser
shall so notify Seller in writing.  Seller shall have ten (10) days after the
date of receipt of Purchaser’s notice (the “Offer Period”) within which to
present a Letter of Intent (“LOI”) to Purchaser describing the terms and
conditions upon which Seller desires to purchase the Property (the “Offer”).  If
Seller fails to deliver the Offer to Purchaser within the Offer Period, then
Seller's rights hereunder shall terminate, and Purchaser shall be free to sell
the Property upon terms and conditions, and to such purchaser, as determined by
Purchaser in its sole and absolute discretion.   If Seller delivers the Offer
within the Offer Period, Purchaser may accept or reject Seller’s offer for any
reason or no reason at all, and is under no obligation to make a
counterproposal.  If Purchaser accepts the Offer, then for a period of fifteen
(15) days thereafter, Seller and Purchaser shall exclusively negotiate a
proposed purchase and sale agreement.  If the parties do not finalize a purchase
and sale agreement within the 15-day negotiation period, then Purchaser is under
no further obligation to continue such negotiations with Seller and shall be
free to sell the Property to any third party at its sole discretion.  The terms
and conditions of this paragraph, and the rights and obligations of Purchaser
and Seller hereunder shall expire and terminate one (1) year after the Closing
Date and shall be of no further force or effect.  Notwithstanding the foregoing
or anything to the contrary herein, in no event Seller shall have any offer
rights with respect to (a) any transfer of the Property by Purchaser to any
parent, subsidiary or affiliate of Purchaser, (b) any transfer of membership
interest in Purchaser or transfers to any entity into which or with which
Purchaser is merged or consolidated; (c) any transfers by Purchaser which are
deemed or considered transfers by operation of law, liquidation or
consolidation, (d) any transfer by Purchaser to a lender or designee of a lender
as security for a loan, or in a foreclosure (or to any other third party in a
foreclosure sale or auction), by a deed in lieu of foreclosure, or similar
transaction, (e) any grants of easements,

leases, licenses, or transfers not in fee, and (f) any other financing
transactions of any nature no matter the structure, including financing
arrangements which include lender acquisition rights.   The terms and conditions
of this paragraph are personal to Seller and shall become null and void upon any
attempted transfer or assignment.    In no event shall any broker be entitled to
a commission in the event of a subsequent sale of the Property to Seller.  The
terms and conditions of this paragraph are confidential and shall become null
and void if Seller shall record this paragraph, or any of the terms herein, or
any memorandum or other evidence hereof.

 

 

 

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

 

Schedule 3

 

Abbington Work

 

 

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

 

EXHIBITS

 

A

-

Legal

B

-

Personal Property

C

-

Deed

D

-

Bill of Sale

E

-

Assignment and Assumption of Service Contracts

F

-

Assignment and Assumption of Leases and Security Deposits

G

-

Notice to Tenants

H

-

Non-Foreign Affidavit

I

-

Assignment of Intangible Property

J

-

Assignment of Guaranties, Warranties, Permits, Licenses and Approvals

K

-

Rent Roll

L

-

Litigation

M

 

-

 

Service Contracts

 

 

 

 

 

 

 

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

Table of Contents

Page

 

1.

PURCHASE AND SALE2

 

2.

PURCHASE PRICE5

 

3.

TITLE COMMITMENT AND SURVEY5

 

4.

CONDITION OF TITLE/CONVEYANCE7

 

5.

PAYMENT OF CLOSING COSTS7

 

6.

DAMAGE, CASUALTY AND CONDEMNATION7

 

7.

AS-IS CONDITION8

 

8.

CLOSING11

 

9.

CLOSING DOCUMENTS14

 

10.

SELLER’S RIGHT TO CURE15

 

11.

DEFAULT BY PURCHASER15

 

12.

SELLER’S DEFAULT16

 

13.

PRORATIONS AND DELINQUENT RENTS16

 

14.

RECORDING18

 

15.

ASSIGNMENT18

 

16.

BROKER.18

 

17.

DOCUMENTS, INSPECTION OF PROPERTY AND APPROVAL PERIOD18

 

18.

SELLER’S REPRESENTATIONS, WARRANTIES AND COVENANTS22

 

19.

PURCHASER’S REPRESENTATIONS, WARRANTIES AND COVENANTS26

 

20.

COMPLIANCE WITH OFAC26

 

21.

ORGANIZATIONAL DOCUMENTS27

 

22.

TIME OF ESSENCE27

 

23.

NOTICES27

 

24.

EXECUTION OF AGREEMENT AND ESCROW AGREEMENT29

 

25.

GOVERNING LAW29

 

26.

ENTIRE AGREEMENT29

 

27.

COUNTERPARTS29

 

28.

CAPTIONS29

 

29.

NON-BUSINESS DAYS29

 

30.

SEVERABILITY29

 

 

 

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Table of Contents

(continued)

Page

31.

NO WAIVER29

 

32.

ATTORNEYS’ FEES30

 

33.

TAX DEFERRED EXCHANGE30

 

34.

CONFIDENTIALITY30

 

35.

SURVIVAL OF INDEMNIFICATION30

 

36.

MISCELLANEOUS PROVISIONS30

 

37.

RIGHT TO CONTINUE TO MARKET31

 

38.

JOINT AND SEVERAL LIABILITY OF PURCHASER31

 

 

 

 

 

-ii-

 

 

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FIRST AMENDMENT TO

PURCHASE AND SALE AGREEMENT

This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is made
as of the 28th day of June, 2019, by and between NXRTBH FOOTHILL, LLC, a
Delaware limited liability company, FRBH DANA POINT, LLC, a Delaware limited
liability company, FRBH DUCK CREEK, LLC, a Delaware limited liability company,
FRBH ABBINGTON, LLC, a Delaware limited liability company, NXRTBH HEATHERSTONE,
LLC, a Delaware limited liability company, and FRBH EDGEWATER OWNER, LLC, a
Delaware limited liability company (collectively, “Seller”), and BRIDGE
ACQUISITIONS, ASSET MANAGEMENT AND DISPOSITIONS, LLC, a Utah limited liability
company (“Purchaser”).

R E C I T A L S:

 

A.Seller and Purchaser are parties to that Purchase and Sale Agreement dated as
of June 25, 2019 (the “Agreement”) for the purchase and sale of the properties
described therein.

 

B.Purchaser and Seller desire to modify the terms of the Agreement pursuant to
the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.Incorporation of Recitals; Definitions.  The foregoing recitals are
incorporated herein.  Capitalized terms not otherwise defined herein shall have
the meaning given such terms in the Agreement.

 

2.Title Period.  Notwithstanding anything to the contrary contained in the
Agreement, Seller and Purchaser agree that the Title Review Period shall expire
at 5 p.m. Mountain Time on July 3, 2019 and the Approval Period with respect to
a Material Title Defect shall expire at 5 p.m. Mountain Time on July 8, 2019.

 

3.No Further Amendment.  Except as expressly set forth herein, the Agreement
remains unmodified and in full force and effect.  To the extent of any
inconsistency between the terms and provisions of this Amendment and the
Agreement, the terms and provisions of this Amendment shall control.

 

4.Miscellaneous.  This Amendment may be executed in multiple counterparts each
of which shall be deemed an original but together shall constitute one and the
same instrument.  Each party has the right to rely upon a facsimile or e-mail
counterpart of this Amendment signed by the other party to the same extent as if
such party received an original counterpart.  This Amendment shall extend to, be
binding upon and inure to the benefit of the respective heirs, devisees, legal
representatives, successors, permitted assigns and beneficiaries of the parties
hereto.

 

 

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[Signatures on Next Page]

 

 

-ii-

 

 

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IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as of the
date set forth above.

SELLER:

FRBH DUCK CREEK, LLC,

a Delaware limited liability company

 

By: /s/ Matt McGraner

Name:Matt McGraner
Title:Authorized

 

NXRTBH HEATHERSTONE, LLC,

a Delaware limited liability company

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized Signatory

 

 

FRBH ABBINGTON, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized

 

FRBH EDGEWATER OWNER, LLC,
a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized

 

FRBH DANA POINT, LLC,
a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized

 

 

-iii-

 

 

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

 

 

 

 

PURCHASER:

BRIDGE ACQUISITIONS, ASSET MANAGEMENT AND

DISPOSITIONS, LLC,

a Utah limited liability company

By: /s/ Colin Apple

Name: Colin Apple____________________
Its: _Managing Director________________

 

 

 

 

-iv-

 

 

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SECOND AMENDMENT TO

PURCHASE AND SALE AGREEMENT

This SECONDAMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is made
as of the 3rd day of July, 2019, by and between NXRTBH FOOTHILL, LLC, a Delaware
limited liability company, FRBH DANA POINT, LLC, a Delaware limited liability
company, FRBH DUCK CREEK, LLC, a Delaware limited liability company, FRBH
ABBINGTON, LLC, a Delaware limited liability company, NXRTBH HEATHERSTONE, LLC,
a Delaware limited liability company, and FRBH EDGEWATER OWNER, LLC, a Delaware
limited liability company (collectively, “Seller”), and BRIDGE ACQUISITIONS,
ASSET MANAGEMENT AND DISPOSITIONS, LLC, a Utah limited liability company
(“Purchaser”).

R E C I T A L S:

 

A.Seller and Purchaser are parties to that Purchase and Sale Agreement dated as
of June 25, 2019, as amended by that certain First Amendment to Purchase and
Sale Agreement dated June 28, 2019 (collectively, the “Agreement”) for the
purchase and sale of the properties described therein.

 

B.Purchaser and Seller desire to modify the terms of the Agreement pursuant to
the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.Incorporation of Recitals; Definitions.  The foregoing recitals are
incorporated herein.  Capitalized terms not otherwise defined herein shall have
the meaning given such terms in the Agreement.

 

2.Title Period.  Notwithstanding anything to the contrary contained in the
Agreement, Seller and Purchaser agree that the Title Review Period shall expire
at 5 p.m. Mountain Time on July 9, 2019 and the Approval Period with respect to
a Material Title Defect shall expire at 5 p.m. Mountain Time on July 11, 2019.

 

3.No Further Amendment.  Except as expressly set forth herein, the Agreement
remains unmodified and in full force and effect.  To the extent of any
inconsistency between the terms and provisions of this Amendment and the
Agreement, the terms and provisions of this Amendment shall control.

 

4.Miscellaneous.  This Amendment may be executed in multiple counterparts each
of which shall be deemed an original but together shall constitute one and the
same instrument.  Each party has the right to rely upon a facsimile or e-mail
counterpart of this Amendment signed by the other party to the same extent as if
such party received an original counterpart.  This Amendment shall extend to, be
binding upon and inure to the benefit of the respective heirs,

 

 

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devisees, legal representatives, successors, permitted assigns and beneficiaries
of the parties hereto.

[Signatures on Next Page]

 

 

-ii-

 

 

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IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as of the
date set forth above.

SELLER:

FRBH DUCK CREEK, LLC,

a Delaware limited liability company

 

By: /s/ Matt McGraner

Name:Matt McGraner
Title:Authorized

 

NXRTBH HEATHERSTONE, LLC,

a Delaware limited liability company

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized Signatory

 

 

FRBH ABBINGTON, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized

 

FRBH EDGEWATER OWNER, LLC,
a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized

 

FRBH DANA POINT, LLC,
a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name:Matt McGraner

Title:Authorized

 

 

-iii-

 

 

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

 

 

 

 

PURCHASER:

BRIDGE ACQUISITIONS, ASSET MANAGEMENT AND

DISPOSITIONS, LLC,

a Utah limited liability company

By: /s/ Colin Apple

Name: Colin Apple____________________
Its: Managing Director__________________

 

 

 

 

-iv-

 

 

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THIRD AMENDMENT TO

PURCHASE AND SALE AGREEMENT

This THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is made
as of the 24th day of July, 2019, by and between NXRTBH FOOTHILL, LLC, a
Delaware limited liability company, NXRTBH DANA POINT, LLC, a Delaware limited
liability company, FRBH DUCK CREEK, LLC, a Delaware limited liability company,
NXRT ABBINGTON, LLC, a Delaware limited liability company, NXRTBH HEATHERSTONE,
LLC, a Delaware limited liability company, and FRBH EDGEWATER OWNER, LLC, a
Delaware limited liability company (collectively, “Seller”), and BRIDGE
ACQUISITIONS, ASSET MANAGEMENT AND DISPOSITIONS, LLC, a Utah limited liability
company (“Purchaser”).

R E C I T A L S:

 

A.Seller and Purchaser are parties to that Purchase and Sale Agreement dated as
of June 25, 2019, as amended by that certain First Amendment to Purchase and
Sale Agreement dated June 28, 2019, and as further amended by that certain
Second Amendment to Purchase and Sale Agreement dated July 3, 2019
(collectively, the “Agreement”) for the purchase and sale of the properties
described therein.

 

B.Purchaser and Seller desire to modify the terms of the Agreement pursuant to
the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.Incorporation of Recitals; Definitions.  The foregoing recitals are
incorporated herein.  Capitalized terms not otherwise defined herein shall have
the meaning given such terms in the Agreement.

 

2.Closing Date.  Notwithstanding anything to the contrary contained in the
Agreement, the Closing Date with respect to all Housing Communities, except for
the Abbington Housing Community, shall be revised to August 27, 2019.  The
Closing Date with respect to the Abbington Housing Community shall remain on
September 3, 2019.

 

3.No Further Amendment.  Except as expressly set forth herein, the Agreement
remains unmodified and in full force and effect.  To the extent of any
inconsistency between the terms and provisions of this Amendment and the
Agreement, the terms and provisions of this Amendment shall control.

 

4.Miscellaneous.  This Amendment may be executed in multiple counterparts each
of which shall be deemed an original but together shall constitute one and the
same instrument.  Each party has the right to rely upon a facsimile or e-mail
counterpart of this Amendment signed by the other party to the same extent as if
such party received an original counterpart.  This Amendment shall extend to, be
binding upon and inure to the benefit of the respective heirs, devisees, legal
representatives, successors, permitted assigns and beneficiaries of the parties
hereto.

 

[Signatures on Next Page]

 

 

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IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as of the
date set forth above.

SELLER:

 

FRBH DUCK CREEK, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name: Matt McGraner

Title: Authorized Signatory

 

 

NXRTBH HEATHERSTONE, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name: Matt McGraner

Title: Authorized Signatory

 

 

NXRT ABBINGTON, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name: Matt McGraner

Title: Authorized Signatory

 

 

FRBH EDGEWATER OWNER, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name: Matt McGraner

Title: Authorized Signatory

 

 

NXRTBH DANA POINT, LLC,

a Delaware limited liability company

 

 

By: /s/ Matt McGraner

Name: Matt McGraner

Title: Authorized Signatory

 

 

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PURCHASER:

BRIDGE ACQUISITIONS, ASSET MANAGEMENT AND

DISPOSITIONS, LLC,

a Utah limited liability company

By: /s/ Colin Apple

Name: Colin Apple____________________
Its: Managing Director_________________________________

 

 

 

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fourth AMENDMENT TO

PURCHASE AND SALE AGREEMENT

This FOURTH AMENDMENT TO PURCHASE AND SALE AGREEMENT (this “Amendment”) is made
as of the 30th day of July, 2019, by and between NXRTBH FOOTHILL, LLC, a
Delaware limited liability company, NXRTBH DANA POINT, LLC, a Delaware limited
liability company, FRBH DUCK CREEK, LLC, a Delaware limited liability company,
NXRT ABBINGTON, LLC, a Delaware limited liability company, NXRTBH HEATHERSTONE,
LLC, a Delaware limited liability company, and FRBH EDGEWATER OWNER, LLC, a
Delaware limited liability company (collectively, “Seller”), and BRIDGE
ACQUISITIONS, ASSET MANAGEMENT AND DISPOSITIONS, LLC, a Utah limited liability
company (“Purchaser”).

 

R E C I T A L S:

 

A.Seller and Purchaser are parties to that Purchase and Sale Agreement dated as
of June 25, 2019, as amended by that certain First Amendment to Purchase and
Sale Agreement dated June 28, 2019, as further amended by that certain Second
Amendment to Purchase and Sale Agreement dated July 3, 2019, and as further
amended by that certain Third Amendment to Purchase and Sale Agreement dated
July 24, 2019 (collectively, the “Agreement”) for the purchase and sale of the
properties described therein.

 

B.Purchaser and Seller desire to modify the terms of the Agreement pursuant to
the terms and conditions of this Amendment.

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.Incorporation of Recitals; Definitions.  The foregoing recitals are
incorporated herein.  Capitalized terms not otherwise defined herein shall have
the meaning given such terms in the Agreement.

 

2.Closing Date.  Notwithstanding anything to the contrary contained in the
Agreement, the Closing Date with respect to the Abbington Housing Community
shall be revised to August 30, 2019.  

 

3.No Further Amendment.  Except as expressly set forth herein, the Agreement
remains unmodified and in full force and effect.  To the extent of any
inconsistency between the terms and provisions of this Amendment and the
Agreement, the terms and provisions of this Amendment shall control.

 

4.Miscellaneous.  This Amendment may be executed in multiple counterparts each
of which shall be deemed an original but together shall constitute one and the
same instrument.  Each party has the right to rely upon a facsimile or e-mail
counterpart of this Amendment signed by the other party to the same extent as if
such party received an original counterpart.  This Amendment shall extend to, be
binding upon and inure to the benefit of the respective heirs, devisees, legal
representatives, successors, permitted assigns and beneficiaries of the parties
hereto.

 

[Signatures on Next Page]

 

 

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IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as of the
date set forth above.

SELLER:

 

FRBH DUCK CREEK, LLC,

a Delaware limited liability company

By: ____/s/ Matt McGraner______

Name: Matt McGraner

Title: Authorized Signatory

 

NXRTBH HEATHERSTONE, LLC,

a Delaware limited liability company

 

 

By: ____/s/ Matt McGraner______

Name: Matt McGraner

Title: Authorized Signatory

 

 

NXRT ABBINGTON, LLC,

a Delaware limited liability company

 

 

By: ____/s/ Matt McGraner______

Name: Matt McGraner

Title: Authorized Signatory

 

 

FRBH EDGEWATER OWNER, LLC,

a Delaware limited liability company

 

 

By: ____/s/ Matt McGraner______

Name: Matt McGraner

Title: Authorized Signatory

 

 

NXRTBH DANA POINT, LLC,

a Delaware limited liability company

 

 

By: ____/s/ Matt McGraner______

Name: Matt McGraner

Title: Authorized Signatory

 

 

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PURCHASER:

BRIDGE ACQUISITIONS, ASSET MANAGEMENT AND

DISPOSITIONS, LLC,

a Utah limited liability company

By:/s/ Colin Apple

Name: Colin Apple    

Its: Managing Director    

 

 

 

 

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