Exhibit 10.1

 

 

 

 

SINGLE FAMILY HOMES

REAL ESTATE PURCHASE AND SALE AGREEMENT

 

by and among

 

THE ENTITIES AND INDIVIDUALS LISTED ON SCHEDULE I HERETO,

 

collectively, as Seller

 

and

 

REVEN HOUSING FLORIDA, LLC,
a Delaware limited liability company,

 

as Buyer

 

September 11, 2014

 

 

 

 

 

 

  

THIS SINGLE FAMILY HOMES PURCHASE AND SALE AGREEMENT (this “Agreement”) is made
and entered into as of September 11, 2014 (“Effective Date”), by and between THE
ENTITIES AND INDIVIDUALS LISTED ON SCHEDULE I HERETO (collectively, “Seller”)
and REVEN HOUSING FLORIDA, LLC, a Delaware limited liability company (“Buyer”).

 

BASIC TERMS

 

The following terms, as used in this Agreement, will have the meanings assigned
to such terms in this Basic Terms section of the Agreement, subject to any
adjustments set forth elsewhere in this Agreement.

 

Purchase Price: Five Million Ninety Thousand Eight Hundred Sixty-Six and 62/100
Dollars ($5,090,866.62) subject to adjustment in accordance with the provisions
of this Agreement.

 

Deposit: Fifty Thousand Nine Hundred Eight and 66/100 Dollars ($50,908.66).

 

Closing Date: Thirty (30) days after expiration of the Due Diligence Period,
unless Seller has agreed to cure objections raised by Buyer during the Due
Diligence Period, in which case the Closing Date shall be five (5) days after
the final objection is cured.

 

Due Diligence Period: Subject to the provisions of Section 7 below, the period
commencing on the Effective Date and ending on the date that is 30 days after
Buyer receives all Property Information to be delivered to Buyer pursuant to
Section 6(a)(3) and Section 7(a), during which period Buyer will be provided the
opportunity to review all aspects of the Property.

 

Escrow Holder: Fidelity National Title Insurance Company.

 

Title Company: Fidelity National Title Insurance Company.

 

Seller’s Broker: SunCoast Property Management, LLC.

 

Buyer’s Broker: None.

 

PRELIMINARY STATEMENTS

 

A. Seller is the owner of the Property (as defined herein); and

 

B. Seller desires to sell, and Buyer desires to buy, the Property, at the price
and on the terms and conditions hereafter set forth.

 

In consideration of the recitals, mutual covenants, and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are mutually acknowledged, Seller and Buyer hereby agree as
follows:

 

1.                  Premises. The real estate which is the subject of this
Agreement consists of seventy-seven (77) single family homes, in the State of
Florida, which are identified and generally described on Exhibit A attached
hereto, together with all of the improvements and structures located thereon
(“Improvements”), any heating and ventilating systems and other fixtures located
therein or thereon, and all rights, interests, benefits, privileges, easements
and appurtenances to the land and the Improvements, if any (collectively, the
“Premises”).

 

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2.                  Personal Property and Leases.

 

(a)                The “Personal Property” referred to herein shall consist of
all right, title, and interest of Seller, if any, in all tangible (including all
advertising materials, plans and specifications) and intangible personal
property, including any equipment, appliances, or furnishings that remain in the
Premises at the Closing, and any and all existing licenses and permits held by
Seller and not constituting part of the real estate, located on and used in
connection with the Premises.

 

(b)               The “Leases” referred to herein shall consist of the leases,
occupancy and rental agreements between the Seller, as landlord and tenants of
the single family homes that comprise the Premises that are in effect as of the
date of the Closing (defined below), as well as and service contracts relating
to the maintenance and repair of such homes.

 

3.                  Sale/Conveyance and Assignment. Seller agrees to sell,
convey and assign to Buyer, and Buyer agrees to buy and assume from Seller, at
the price and upon the other terms and conditions hereafter set forth (a) the
Premises, (b) the Personal Property, (c) the Improvements, and (d) the Leases
(a-d collectively, the “Property”).

 

4.                  Transfer of Title.

 

(a)                Title to the various properties constituting the Property
shall be conveyed to Buyer by deeds that are in the form that are customarily
used in the county in which the Premises are located (collectively, the “Deed”)
executed by Seller, in the form attached hereto as Exhibit C.

 

(b)               The Personal Property shall be conveyed to Buyer by a bill of
sale (the “Bill of Sale”) executed by Seller, in the form attached hereto as
Exhibit D.

 

(c)                The Leases shall be assigned by Seller and assumed by Buyer
by an Assignment Leases and Contracts (the “Assignment of Leases and
Contracts”), in the form attached hereto as Exhibit E.

 

5.                  Purchase Price; Deposit(a)                .

 

(a)                Delivery of Purchase Price. The purchase price for the
Property shall be the price identified in the Basic Terms (the “Purchase
Price”), which shall be subject to reduction in accordance with Section 7(d) and
payable by Buyer to Seller as follows:

 

(1)               Within five (5) business days after the execution of this
Agreement, Buyer shall deposit into an escrow account (the “Escrow”) established
with Escrow Holder (as identified in the Basic Terms), which will serve as
escrow holder for this transaction a deposit in the amount of the Deposit (as
identified in the Basic Terms above). If Buyer notifies Seller that it elects to
proceed to purchase the Property in accordance with the provisions of Section 7,
then the Deposit (as defined in the Basic Terms) will become non-refundable to
Buyer, except in the event of a default or breach of this Agreement by Seller.
The Deposit shall at all times prior to Closing be invested in United States
treasury obligations or such other interest bearing accounts or securities as
are approved by Buyer in writing; all interest earned on the Deposit will be
administered, paid or credited (as the case may be) in the same manner as the
Deposit and, when credited to the escrow account shall constitute additional
Deposit. At the closing of the transactions contemplated by this Agreement (the
“Closing”), Buyer shall receive a credit against the Purchase Price for the
Deposit.

 

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(2)               The Purchase Price, less a credit for the Deposit, and plus or
minus prorations and adjustments as set forth in Section 17 hereof, shall be
paid by Buyer to Seller by wire transfer of immediately available federal funds
on the Closing Date.

 

(b)               Property Valuation. Buyer may elect to retain an independent,
third-party valuation consultant to prepare a valuation report (“Valuation
Report”) for each of the properties that comprise the Property. If the sum of
the values of the properties that comprise the Property (“Total Valuation”) is
less than the Purchase Price, Buyer may elect to (i) attempt to renegotiate the
Purchase Price with Seller, (ii) terminate this Agreement, or (iii) proceed to
Closing hereunder at the stated Purchase Price. If Buyer terminates this
Agreement in accordance with this Section 5(b), then this Agreement will have no
further force or effect, the parties will have no further obligations to each
other (except for any indemnities or other provisions that expressly survive
termination of this Agreement) and Escrow Holder shall refund the Deposit to
Buyer.

 

(c)                Notwithstanding Section 5(b) above and Section 7(d) below,
Buyer may, in lieu of adjusting the Purchase Price as a result of necessary
repairs and replacements or a Total Valuation that is less than the Purchase
Price in accordance with those provisions, elect to exclude specified properties
from the properties identified on Exhibit A. If, as a result of its due
diligence investigations, Buyer elects to exclude one or more properties from
the Property being acquired in accordance with this Agreement, then at least two
business days before the end of the Due Diligence Period, Buyer will notify
Seller that certain specified properties (“Excluded Properties”) are to be
excluded from the sale contemplated in this Agreement. Following Buyer’s
notification to Seller and identification of the Excluded Properties, (i) the
description of the properties that comprise the Property, as identified on
Exhibit A, will be deemed modified to exclude the Excluded Properties; and (ii)
the Purchase Price will be reduced by the sum of the Assigned Home Price
(defined below) for each of the Excluded Properties. Once Buyer identifies to
Seller the Excluded Properties, those properties so identified will no longer be
the subject of this Agreement and Seller will be free to sell them to another
party or take any action that Seller elects with respect to the Excluded
Properties. For purposes of this Section 5(c), the “Assigned Home Price” will be
the value, measured in dollars, that is agreed upon by Seller and Buyer assigned
to each single family home listed in Exhibit A.

 

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6.                  Representations, Warranties and Covenants.

 

(a)                Seller’s Representations and Warranties. As a material
inducement to Buyer to execute this Agreement and consummate this transaction,
Seller represents and warrants to Buyer as follows:

 

(1)               Organization and Authority. Seller has been duly organized and
is validly existing as a Florida limited liability company or as a Florida
corporation, as applicable. Seller has the full right and authority and has
obtained any and all consents required therefor to enter into this Agreement,
consummate or cause to be consummated the sale and make or cause to be made
transfers and assignments contemplated herein. The persons signing this
Agreement on behalf of Seller are authorized to do so. This Agreement and all of
the documents to be delivered by Seller at the Closing have been authorized and
properly executed and will constitute the valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms.

 

(2)               Conflicts. There is no agreement to which Seller is a party
or, to Seller’s Knowledge, binding on Seller or the Property, that is in
conflict with this Agreement or that would limit or restrict the timely
performance by Seller of its obligations pursuant to this Agreement.

 

(3)               Documents and Records. To Seller’s Knowledge, Seller has
provided (or upon the execution hereof will provide) Buyer with, or has made
available to Buyer, true, correct and complete copies of the items scheduled in
Schedule 6(a)(3) attached hereto (all of the foregoing collectively the
“Property Information”). The Property Information consists of all documents
relating to the Property in Seller’s possession or control.

 

(4)               Litigation. There is no action, suit or proceeding pending or
to Seller’s knowledge threatened which (i) if adversely determined, would not be
covered by insurance (subject to the payment of a customary insurance
deductible) or adversely affect the Property, or (ii) which challenges or
impairs Seller’s ability to execute, deliver or perform this Agreement or
consummate the transaction contemplated hereby.

 

(5)               Leases. Schedule 6(a)(5) sets forth a list of the leases and
all contracts (including all service, maintenance, and warranty contracts) that
apply to the properties that comprise the Property, which, to Seller’s
Knowledge, is true and correct and complete list of such leases and contracts as
of the date of such schedule. To Seller’s Knowledge, except as scheduled in
Schedule 6(a)(5), neither Seller nor any other party is in default with respect
to any of its obligations or liabilities pertaining to the Leases. To Seller’s
Knowledge, other than the Leases and any other matters disclosed in the Title
Report, there are no leases, licenses or other occupancy agreements to which
Seller is a party or is bound affecting any portion of the Property as of the
date hereof, which will be in force on the Closing Date. Seller has delivered or
made available at the Property, true and correct copies of the Leases to Buyer.
No lessee under any Lease has any right of first refusal or option to purchase
the property that is the subject of their Lease. With respect to any property
identified on Exhibit A, if any Lease expires and is extended or renewed, or if
Seller elects to sign a new Lease, during the period this Agreement is in
effect, then such new Lease must include the same or greater rental rate as the
previous Lease, may not have a term shorter than one year, and may not include
any free rent period or cancellation right on the part of the tenant, unless
such terms are approved by Buyer in writing.

 

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(6)               Contracts. Exhibit B sets forth all contracts presently
outstanding with respect to the Property. To Seller’s Knowledge, neither Seller
nor any other party is in default with respect to any of its obligations or
liabilities pertaining to any contracts that will survive the Close of Escrow.

 

(7)               Notice of Violations. Seller has received no written notice
that either the Property or the use thereof violates any laws, rules and
regulations of any federal, state, city or county government or any agency,
body, or subdivision thereof having any jurisdiction over the Property that have
not been resolved to the satisfaction of the issuer of the notice.

 

(8)               Withholding Obligation. Seller is not a “foreign person”
within the meaning of Section 1445 of the Internal Revenue Code of 1986, as
amended.

 

(9)               Condemnation. Except for any condemnation proceedings which
Seller has not yet been served with process, there are no pending or, to
Seller’s Knowledge, threatened condemnation or similar proceedings affecting the
Property or any individual property that is a part thereof.

 

(10)           Employees. Seller has no employees at the Property.

 

(11)           No Bankruptcy Proceedings. Seller has not (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 Seller’s assets, or (iv) suffered the attachment or
other judicial seizure of all or substantially all of Seller’s assets.

 

(12)           Unrecorded Documents. Other than as disclosed in the Property
Information, the Title Commitment, or any other documents delivered to Buyer,
Seller has not entered into any unrecorded contracts, leases, easements or other
agreements with respect to the Property that would be binding on Buyer or the
Property following the Closing. Seller has no knowledge of any claim of any
third party affecting the use, title, occupancy or development of the Property
that has not been disclosed to Buyer. Seller has not granted any right of first
refusal, option or other right to acquire all or any part of the Property.

 

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For purposes of this Section 6(a), the term “Seller’s Knowledge” means the
actual knowledge of Chris Funk, the person who Seller represents to be the most
knowledgeable about the Property.

 

(b)               Buyer’s Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction,
Buyer represents and warrants to Seller that Buyer has been duly organized and
is validly existing as a Delaware limited liability company. Buyer has the full
right and authority and has obtained any and all consents required therefore to
enter into this Agreement, consummate or cause to be consummated the purchase,
and make or cause to be made the deliveries and undertakings contemplated herein
or hereby. The persons signing this Agreement on behalf of Buyer are authorized
to do so. This Agreement and all of the documents to be delivered by Buyer at
the Closing have been authorized and properly executed and will constitute the
valid and binding obligations of Buyer, enforceable against Buyer in accordance
with their terms.

 

(c)                Covenants of Seller. Seller covenants and agrees that during
the period from the date of this Agreement through and including the Closing
Date:

 

(1)               Seller will timely pay and perform its obligations under the
Leases and any contracts to be assumed by Buyer pursuant hereto.

 

(2)               All tenant repair requests, including move-in punch-list
items, have been fixed properly or will be fixed properly and paid for before
the Closing Date.

 

(d)               Seller’s Representations Regarding Tenants. Seller hereby
represents and warrants that each tenant is occupying its respective home and is
current in the payment of rent, no default currently exists and no condition
exists, which, with the passage of time may become a default under any of the
Leases, and that, as of the date of this Agreement, the Rent Roll with Accounts
Receivable attached hereto as Exhibit H is accurate.

 

(1)               Following the expiration of the Due Diligence Period, Seller
will not enter into any contract (other than new Leases) that will be an
obligation affecting the Property subsequent to the Closing Date except for
contracts entered into in the ordinary course of business that are terminable
without cause and without payment of a penalty on not more than 30-days’ notice.

 

(2)               Seller will not remove any Personal Property from the Property
except as may be required for necessary repair or replacement, and in the event
of such replacement, the replacement shall be of materially equal or better
quality and quantity as existed as of the time of its removal.

 

(3)               Seller will continue to operate and maintain the Property in
accordance with past practices and will not make any material alterations or
changes thereto;

 

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(4)               Seller will maintain casualty and liability insurance of a
level and type consistent with the insurance maintained by Seller prior to the
execution of this Agreement with respect to the Property;

 

(5)               Seller will not do anything, or authorize anything to be done,
that would adversely affect the condition of title as shown on the Title
Commitment.

 

(6)               Seller agrees to terminate by written notice to the other
parties thereto, effective as of Closing, any service contracts that Buyer,
pursuant to written notice to Seller prior to the expiration of the Due
Diligence Period, requests Seller to terminate. Seller shall deliver to Buyer
copies of all notices of termination given by Seller pursuant to this
subsection.

 

(7)               Seller shall repair all homes that become vacant at least five
(5) days prior to the Closing to “rent-ready” condition in accordance with
Seller’s customary practice and procedure for the Property. Buyer shall receive
a $3,500 credit against the Purchase Price with respect to any unit that is
vacant and not in “rent ready” condition on the Closing Date. At Buyer’s
request, Seller shall inspect each of the vacant units prior to the Closing to
determine if any of such units cannot be restored to “rent ready” condition at a
cost of $3,500 or less, and Buyer and Seller hereby agree to make such
adjustments to the $3,500 per unit credit as Buyer and Seller agree, acting
reasonably, are necessary in order to pay for the cost of restoring the vacant
units to “rent ready” condition. Upon request, Seller shall keep Buyer
reasonably informed as to the status of leasing prior to the Closing Date and
shall deliver to Buyer copies of all new Leases.

 

(e)                Representation and Warranties Prior to Closing. The continued
validity in all material respects of the foregoing representations and
warranties shall be a condition precedent to the obligation of the party to whom
the representation and warranty is given to close this transaction. If any of
Seller’s representations and warranties are not true and correct in all material
respects at any time on or before the Closing even if true and correct as of the
date of this Agreement or whether any change in facts or circumstances has made
the applicable representation and warranty no longer true and correct and
regardless as to whether Buyer becomes aware of such fact through Seller’s
notification or otherwise, then Buyer may, at Buyer’s option, exercised by
written notice to Seller (and as its sole and exclusive remedy), either (i)
proceed with this transaction, accepting the applicable representation and
warranty as being modified by such subsequent matters or knowledge and waiving
any right relating thereto, if any, or (ii) terminate this Agreement and declare
this Agreement of no further force and effect and in which event Escrow Holder
shall, without further instruction, return the Deposit to Buyer and Seller shall
have no further liability hereunder by reason thereof; provided, that if the
breach of any representation or warranty of Seller hereunder results from the
willful and intentional act of Seller, Buyer will have the rights and remedies
available to Buyer under Section 18(b) of this Agreement upon a default by
Seller of its obligations under this Agreement.

 

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7.                  Due Diligence Period.

 

(a)                Buyer will have a period commencing on the Effective Date and
ending at 6:00 PM Pacific Time on the date that is thirty (30) days after Buyer
has received all Property Information set forth in Schedule 6(a)(3) (the “Due
Diligence Period”) to examine, inspect, and investigate the Property and, in
Buyer’s sole judgment and discretion, to determine whether Buyer desires to
purchase the Property. However, if Buyer is acting diligently and in good faith
to proceed with the consummation of the transaction contemplated by this
Agreement, Seller shall agree, upon the written request of Buyer, to extend the
Closing Date up to fourteen (14) business days. Seller shall deliver written
notice to Buyer confirming that Seller has sent all Property Information. Buyer
shall have seven (7) business days after receipt of such notice to (i) confirm
its receipt of all Property Information or (ii) notify Seller of any missing
Property Information. If Buyer notifies Seller of any missing Property
Information within such seven (7) business day period, Seller shall have an
additional five (5) business days to deliver such missing Property Information
to Buyer.

 

(b)               Buyer may terminate this Agreement for any or no reason by
giving written notice of such termination to Seller on or before the last day of
the Due Diligence Period. If this Agreement is terminated pursuant to this
Section 7, the Deposit shall be immediately refunded to Buyer, and neither party
shall have any further liability or obligation to the other under this Agreement
except for the indemnity provisions set forth in Section 7(c) of this Agreement
and any other provision of this Agreement that is expressly intended to survive
the termination of this Agreement. In the event this Agreement is terminated as
provided for herein, Escrow Holder shall promptly return Buyer’s Deposit and
Seller shall not cause Escrow Holder to delay the return of the Deposit to Buyer
for any reason. If Buyer does not elect to exercise its right to terminate this
Agreement during the Due Diligence Period, then Buyer shall notify Seller of
Buyer’s intention to acquire the Property before the expiration of the Due
Diligence Period. If Buyer does not, before the expiration of the Due Diligence
Period, either affirmatively notify Seller of its desire to acquire the Property
or send a termination notice to Seller, and such failure continues for five (5)
business days thereafter, then Buyer will be deemed to have elected to terminate
this Agreement. If Buyer elects to proceed to purchase the Property, and this
Agreement is not terminated or deemed terminated before the expiration of the
Due Diligence Period, then the Deposit shall be non-refundable except in the
event of a default hereunder by Seller.

 

(c)                Subject to the rights of tenants under the Leases, Seller
will provide to Buyer reasonable access to the Property for the purpose of
examining any or all aspects thereof, including conducting on a non-destructive
basis, surveys, architectural, engineering, non-invasive geo-technical and
environmental inspections and tests, and any other inspections, studies, or
tests reasonably required by Buyer. Buyer shall give Seller reasonable notice by
telephone or e-mail before entering onto any of the properties that comprise the
Property to perform inspections or tests, and in the case of tests (i) Buyer
shall specify to Seller the precise nature of the test to be performed, and (ii)
Seller may require, as a condition precedent to Buyer’s right to perform any
such test, that Buyer deliver Seller evidence of public liability and other
appropriate insurance naming Seller as an additional insured thereunder. Such
examination of the physical condition of the Property, including the Third Party
Inspection Report (defined in Section 7(d) below) may include an examination for
the presence or absence of hazardous or toxic materials, substances or wastes,
which shall be performed or arranged by Buyer at Buyer’s sole expense. Buyer
shall keep the Property free and clear of any liens and will indemnify, protect,
defend, and hold each Seller Related Party (defined below) harmless from and
against all losses, costs, damages, claims, liabilities and expenses (including
reasonable attorneys’ fees and court costs) (collectively, “Losses”) arising
from damage to the Property and injury to persons asserted against or incurred
by any Seller Related Party as a result of such entry by Buyer, its agents,
employees or representatives (except that Buyer shall have no liability or
indemnity obligation for any diminution in the value of the Property as a result
of any unfavorable analysis, test, study, opinion or recommendation made to or
for or reach by Buyer). If any inspection or test disturbs the Property and
Buyer does not acquire the Property, Buyer will restore the Property to
substantially the same condition as existed prior to any such inspection or
test. Buyer and its agents, employees, and representatives may, upon not less
than 24 hours prior telephonic notice to Seller, examine and make copies of all
books and records and other materials relating to the condition of the Property
in Seller’s possession at the office where such records are maintained. Any
information provided to or obtained by Buyer with respect to the Property shall
be subject to the provisions of Section 22(p) of this Agreement. The obligations
of Buyer under this Section shall survive the termination of the Agreement.

 

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(d)               Buyer may retain a contractor or home inspector to prepare a
report or reports describing the physical condition of the Property
(collectively, the “Third Party Inspection Report”), which Third Party
Inspection Report shall adequately identify any necessary repairs or
improvements and the estimated costs of such repairs or improvements
(collectively, the “Necessary Repairs”). The person or entity preparing the
Third Party Inspection Report must be licensed to perform such inspections in
the jurisdiction where the Property is located, and may not be, or have ever
been, owned or controlled by Buyer or an affiliate of Buyer or otherwise not at
arm’s length from Buyer. Buyer will provide a copy of the Third Party Inspection
Report to Seller prior to the expiration of the Due Diligence Period. If any
Necessary Repairs are identified in the Third Party Inspection Report and
subject to the limitations set forth below, Seller shall have the right to (i)
make the Necessary Repairs after Closing and the estimated cost of the Necessary
Repairs as set forth in the Third Party Inspection Report shall be held in
escrow by the Escrow Holder until such Necessary Repairs are completed by Seller
within forty-five (45) days or (ii) reduce the Purchase Price by the estimated
cost of the repairs or replacements set forth in the Third Party Inspection
Report. In the event Seller elects to reduce the Purchase Price, Seller and
Buyer agree that the Purchase Price will not be reduced by an amount greater
than five percent (5%) of the Purchase Price without Seller’s written agreement.
Normal wear and tear shall not constitute grounds for a reduction in the
Purchase Price. If the cost to make the repairs and replacements identified in
the Third Party Inspection Report exceeds five percent (5%) of the Purchase
Price, and Seller does not agree to reduce the Purchase Price by the identified
cost of such repairs and replacements as set forth in the Third Party Inspection
Report, then Buyer may, upon written notice to Seller and prior to the end of
the Due Diligence Period, elect to (i) close the transaction as contemplated
with a five percent (5%) reduction of the Purchase Price or (ii) terminate this
Agreement. If Buyer terminates this Agreement in accordance with this Section
7(d), then this Agreement will have no further force or effect, the parties will
have no further obligations to each other (except for any indemnities or other
provisions that expressly survive termination of this Agreement) and Escrow
Holder shall refund the Deposit to Buyer. The reductions to the Purchase Price
contemplated in this Section 7(d) are in addition to those contemplated in
Section 5(b) and 5(c) of this Agreement.

 

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(e)                Notwithstanding any provision to the contrary set forth
herein, in addition to the rights set forth in Sections 5(b), 5(c) and 7(d), at
any time during the Due Diligence Period, Buyer may in its sole discretion,
elect to designate specified properties from the properties identified on
Exhibit A as Excluded Properties as defined in Section 5(c), with the
understanding that Seller’s written consent is required if Buyer elects to buy
fewer than eighty-five percent (85%) of the properties comprising the Property.
In the event of such an election, Buyer shall deliver to Seller a notice stating
which properties it has designated as Excluded Properties no later than two (2)
days prior to the end of the Due Diligence Period (the “Notice to Seller”). Upon
delivery of the Notice to Seller, the designated properties described in the
Notice to Seller shall be Excluded Properties, and the terms of Section 5(c)
shall apply with respect thereto.

 

8.                  As Is Sale.

 

(a)                BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS
SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN “AS IS WITH ALL FAULTS” BASIS
AND THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE CLOSING
DOCUMENTS DELIVERED BY SELLER TO BUYER AT CLOSING, BUYER IS NOT RELYING ON ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM
SELLER, ITS AGENTS, OR BROKERS AS TO ANY MATTERS CONCERNING THE PROPERTY,
INCLUDING WITHOUT LIMITATION: (I) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL
CONDITION OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO THE STRUCTURAL
ELEMENTS, FOUNDATION, ROOF, APPURTENANCES, ACCESS, LANDSCAPING, PARKING
FACILITIES AND THE ELECTRICAL, MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY
SYSTEMS, FACILITIES AND APPLIANCES, (II) THE QUALITY, NATURE, ADEQUACY, AND
PHYSICAL CONDITION OF SOILS, GEOLOGY AND ANY GROUNDWATER, (III) THE EXISTENCE,
QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE
PROPERTY, (IV) THE DEVELOPMENT POTENTIAL OF THE PROPERTY, AND THE PROPERTY’ USE,
HABITABILITY, MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE
PROPERTY FOR ANY PARTICULAR PURPOSE, (V) THE ZONING OR OTHER LEGAL STATUS OF THE
PROPERTY OR ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON USE OF THE PROPERTY,
(VI) THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES,
LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS
OF ANY GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR
ENTITY, (VII) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS (AS DEFINED IN ANY
ENVIRONMENTAL STATUTE) ON, UNDER OR ABOUT THE PROPERTY OR THE ADJOINING OR
NEIGHBORING PROPERTY, (VIII) THE QUALITY OF ANY LABOR AND MATERIALS USED IN ANY
IMPROVEMENTS ON THE PROPERTY, (IX) THE CONDITION OF TITLE TO THE PROPERTY, (X)
THE LEASES (INCLUDING ALL SERVICE CONTRACTS) AND ANY OTHER AGREEMENTS AFFECTING
THE PROPERTY AND (XI) THE ECONOMICS OF ANY PAST OR FUTURE OPERATIONS OF THE
PROPERTY.

 

10

 

  

9.                  Survival of Representations and Warranties After Closing.

 

(a)                All representations and warranties of Seller herein shall
survive the Closing for a period of nine (9) months (the “Limitation Period”).

 

(b)               Buyer shall provide actual written notice to Seller of any
breach of any of Seller’s warranties or representations of which Buyer acquires
knowledge, through any means, at any time after the Closing Date but prior to
the expiration of the Limitation Period, and shall allow Seller thirty (30) days
within which to cure such breach, or, if such breach is susceptible of cure but
cannot reasonably be cured within thirty (30) days, an additional reasonable
time period required to effect such cure so long as such cure has been commenced
within such thirty (30) days and diligently pursued but in no event more than
ninety (90) days. If Seller fails to cure such breach after actual written
notice and within such cure period (as extended), Buyer’s sole remedy shall be
an action at law for damages as a consequence thereof, which must be commenced,
if at all, within the six (6) months after the expiration of the Limitation
Period.

 

10.              Closing.

 

(a)                The purchase and sale transaction contemplated in this
Agreement shall occur on the date specified in the Basic Terms section of this
Agreement (the “Closing Date”), and accomplished by recording the Deed (as
defined in Section 14) in the Official Records of the particular County in which
each of the individual properties that constitute the Property is located (the
“Official Records”), provided that all conditions precedent to the Closing have
been fulfilled or have been waived in writing by the respective party entitled
to waive same.

 

(b)               On or before the Closing Date, the parties shall establish the
usual form of deed and money escrow with Escrow Holder. Counsel for the
respective parties is hereby authorized to execute the escrow trust instructions
as well as any amendments thereto.

 

11.              Conditions to Buyer’s Obligation to Close.

 

(a)                Buyer will not be obligated to proceed with the Closing
unless and until each of the following conditions has been either fulfilled or
waived in writing by Buyer:

 

(1)               This Agreement shall not have been previously terminated
pursuant to any other provision hereof;

 

11

 

  

(2)               Seller shall be prepared to deliver or cause to be delivered
to Buyer all instruments and documents to be delivered to Buyer at the Closing
pursuant to Section 14 and Section 16 or any other provision of this Agreement;
and

 

(3)               All property managing services provided to the Property under
any property management agreement shall have been terminated on or prior to the
Closing at no cost, liability or expense to Buyer.

 

(b)               If any of the foregoing conditions are not fulfilled on or
before the time for Closing hereunder or waived by the Buyer in writing, then
subject to the provisions of Section 18(b) hereof, Buyer may elect, upon notice
to Seller, to terminate this Agreement, in which event the Deposit shall be
returned to Buyer, and neither party shall have any further liability or
obligation to the other, except for the provisions of this Agreement which are
expressly stated to survive the termination of this Agreement.

 

12.              Conditions to Seller’s Obligation to Close.

 

(a)                Seller will not be obligated to proceed with the Closing
unless and until each of the following conditions has been fulfilled or waived
in writing by Seller:

 

(1)               Buyer shall be prepared to pay to Seller the Purchase Price
and all other amounts to be paid to it at Closing pursuant to the provisions of
this Agreement;

 

(2)               Buyer shall be prepared to deliver to Seller all instruments
and documents to be delivered to Seller at the Closing pursuant to Section 15
and Section 16 or any other provision of this Agreement; and

 

(3)               This Agreement shall not have been previously terminated
pursuant to any other provision hereof.

 

(b)               If the foregoing conditions are not fulfilled on or before the
time for Closing hereunder or waived by Seller in writing, then subject to the
provisions of Section 18(a) hereof, Seller may elect, upon notice to Buyer, to
terminate this Agreement, in which event the Deposit shall be returned to Buyer,
and neither party shall have any further liability or obligation to the other,
except for the provisions of this Agreement which are expressly stated to
survive the termination of this Agreement. For the avoidance of doubt, it is
understood that if Buyer defaults after the expiration of the Due Diligence
period, then the Deposit shall be paid to the Seller.

 

13.              Title Insurance. (a) Following completion of the 3rd party
valuation of the Property, Buyer and Seller shall cause Title Company to deliver
to Buyer a commitment for the Title Policy described in subsection (b) below
(the “Title Commitment”), together with legible copies of all of the underlying
documentation described in such Title Commitment. Seller shall, include in the
Property Information the most recent surveys of the properties that comprise the
Property in Seller’s possession, custody or control (the “Surveys”). The cost to
deliver the Title Commitment to the Buyer shall be split equally (50% / 50%)
between Buyer and Seller.

 

12

 

  

(a)                At Closing, and as a condition thereof, Buyer shall receive
an owner’s title insurance policy (the “Title Policy”) issued by Title Company,
dated the day of Closing, with liability in the full amount of the Purchase
Price, the form of which shall be an American Land Title Association Owner’s
Policy, Standard Form B, 1992 (or other form preferred by Buyer or required or
promulgated pursuant to applicable state insurance regulations), subject only to
the Permitted Exceptions (defined below). The Title Policy may contain any
endorsements requested by Buyer.

 

(b)               Prior to the expiration of the Due Diligence Period, Buyer
shall review title to the Property as disclosed by the Title Commitment and the
Surveys, and satisfy itself as to the availability from the Title Company of the
Title Policy and all requested endorsement to such Title Policy. Buyer shall
have the right, at its own cost and expense, to obtain an update of the Surveys
or to secure new surveys at any time prior to the expiration of the Due
Diligence Period.

 

(c)                Seller shall have no obligation to remove or cure title
objections, except for (1) liens of an ascertainable amount created by Seller,
which liens Seller shall cause to be released at the Closing or affirmatively
insured over by the Title Company with Buyer’s approval, (2) any exceptions or
encumbrances to title which are created by Seller after the date of this
Agreement without Buyer’s consent, and (3) non-consensual liens which liens
Seller shall cause to be released at the Closing or affirmatively insured over
by the Title Company. In addition, Seller shall provide the Title Company with
any affidavits, ALTA statements or personal undertakings (collectively, an
“Owner’s Affidavit”), in form and substance reasonably acceptable to the Title
Company, that will permit the Title Company to remove the standard “mechanics
lien” and “GAP” exceptions and otherwise issue the Title Policy in the form
required by Buyer.

 

(d)               “Permitted Exceptions” shall mean: (1) any exception arising
out of an act of Buyer or its representatives, agents, employees or independent
contractors permitted under this Agreement; (2) zoning and subdivision
ordinances and regulations; (3) the specific exceptions in the Title Commitment
that the Title Company has not agreed to insure over or remove from the Title
Commitment as of the end of the Due Diligence Period and that Seller is not
required to remove as provided above; (4) items shown on the Surveys or any
updated or new surveys of the Property which have not been removed as of the end
of the Due Diligence Period; (5) real estate taxes and assessments not yet due
and payable; and (6) rights of tenants under the Leases, as occupancy tenants
only and without any rights of first refusal, rights of first offer or purchase
options.

 

14.              Documents to be Delivered to Buyer at Closing. At Closing,
Seller shall deliver or cause to be delivered to Buyer each of the following
instruments and documents:

 

(a)                Deed. The Deed, in the form attached hereto as Exhibit C.

 

(b)               Bill of Sale. The Bill of Sale covering the Personal Property,
in the form attached hereto as Exhibit D.

 

13

 

  

(c)                The Title Policy. The Title Policy may be delivered after the
Closing if at the Closing the Title Company issues a currently effective,
duly-executed “marked-up” Title Commitment and irrevocably commits in writing to
issue the Title Policy in the form of the “marked-up” Title Commitment after the
Closing.

 

(d)               Assignment of Leases and Contracts. An Assignment of Leases
and Contracts, in the form attached hereto as Exhibit E, transferring and
assigning to Buyer, to the extent the same are assignable, all right, title and
interest of Seller in the Leases and the other property described therein.

 

(e)                Transfer Tax Declarations. Original copies of any required
real estate transfer tax or documentary stamp tax declarations executed by
Seller or any other similar documentation required to evidence the payment of
any tax imposed by the state, county and city on the transaction contemplated
hereby.

 

(f)                 FIRPTA. An affidavit, in the form attached hereto as
Exhibit F, stating Seller’s U.S. taxpayer identification number and that Seller
is a “United States person”, as defined by Internal Revenue Code
Section 1445(f)(3) and Section 7701(b).

 

(g)                Owner’s Affidavit. The Owner’s Affidavit materials referred
to in Section 13(d) above.

 

(h)                Surveys, Plans, Permits and Specifications. All existing
surveys, blueprints, drawings, plans and specifications, permits, and operating
manuals for or with respect to any of the properties that comprise the Property
or any part thereof to the extent the same are in Seller’s possession.

 

(i)                  Keys. All keys to the improvements, to the extent the same
are in Seller’s possession.

 

(j)                 Leases. Originals of all Leases in effect on the Closing
Date (or copies thereof in the event the originals are not in Seller’s
possession, or in the possession of Sellers’ property manager and such copies of
Leases are in Seller’s possession), and the tenant files with respect to such
Leases, to the extent the same are in Seller’s possession.

 

(k)               Certificate. A certificate (the “Update”) of Seller dated as
of the Closing Date certifying that the representations and warranties of Seller
set forth in Section 6(a) of this Agreement as applicable, remain true and
correct in all material respects as of the Closing Date, except as to Schedule
6(a)(5), which Update shall be dated no earlier than three (3) days prior to
Closing.

 

(l)                  Other Deliveries. Such other documents and instruments as
may be required by any other provision of this Agreement or as may reasonably be
required to carry out the terms and intent of this Agreement.

 

14

 

  

15.              Documents to be Delivered to Seller at Closing. At Closing,
Buyer shall deliver or cause to be delivered to Seller each of the following
instruments, documents and amounts:

 

(a)                Purchase Price. The Purchase Price, subject to adjustment and
proration as provided in Section 17 below.

 

(b)               Transfer Tax Declarations. Original copies of any required
real estate transfer tax or documentary stamp tax declarations executed by Buyer
or any other similar documentation required to evidence the payment of any tax
imposed by the state, county and city on the transaction contemplated hereby.

 

(c)                Assignment of Leases. A counterpart of the Assignment of
Leases and Contracts, in the form attached hereto as Exhibit E.

 

(d)               Certificate. A certificate of Buyer (the “Buyer’s Update”)
dated as of the Closing Date certifying that the representations and warranties
of Buyer set forth in Section 6(b) of this Agreement as applicable, remain true
and correct in all material respects as of the Closing Date, which Buyer’s
Update shall be dated no earlier than three (3) days prior to Closing.

 

(e)                Other Documents. Such other documents and instruments as may
be required by any other provision of this Agreement or as may reasonably be
required to carry out the terms and intent of this Agreement.

 

16.              Documents to be Delivered by Seller and Buyer at Closing. At
Closing, Buyer and Seller shall deliver or cause to be delivered each of the
following instruments and documents:

 

(a)                Escrow Instructions. Escrow instructions (as described in
Section 10(b)).

 

(b)               Settlement Statement. A fully executed settlement statement.

 

(c)                Notice to Tenants. A duly executed notice to each of the
tenants under the Leases.

 

17.              Prorations and Adjustments.

 

(a)                The following items shall be prorated and adjusted based upon
the number of calendar days in the measuring period between Seller and Buyer as
of midnight on the date of Closing, except as otherwise specified:

 

(1)               Taxes. All real estate taxes and assessments (“Taxes”)
assessed against the Property for the year of Closing shall be prorated as
follows: Seller will be responsible for the payment of Taxes applicable to the
period before the Closing Date, and Buyer will be responsible for the period on
and after the Closing Date. If the actual taxes and assessments cannot be
determined for such year as of the Closing Date, then the parties shall make
such proration based upon One Hundred and Ten percent (110%) of the most
recently issued tax bill for the Property and thereafter, make a final
adjustment of such Taxes upon receipt of the final bill. The provisions of this
Section 17(a)(1) shall survive Closing.

 

15

 

  

(2)               Utilities. All utilities shall be prorated based upon
estimates using the most recent actual invoices. Seller shall receive a credit
for the amount of deposits, if any, with utility companies that are transferable
and that are assigned to Buyer at the Closing. In the case of non-transferable
deposits, Buyer shall be responsible for making any security deposits required
by utility companies providing service to the Property.

 

(3)               Collected Rent. Buyer shall receive a credit for any rent and
other income (and any applicable state or local tax on rent) under Leases
collected by Seller before Closing that applies to any period after Closing.
Uncollected rent and other uncollected income shall not be prorated at Closing.
After Closing, Buyer shall apply all rent and income collected by Buyer from a
tenant (x) first to such tenant’s rental obligations for the month in which the
Closing occurs, (y) next to such tenant’s monthly rental for the month in which
the payment is made, and (z) then to arrearages in the reverse order in which
they were due, remitting to Seller, after deducting collection costs, any rent
or expense reimbursements properly allocable to Seller’s period of ownership.
Buyer shall bill and attempt to collect such rent arrearages in the ordinary
course of business, but shall not be obligated to engage a collection agency or
take legal action to collect any rent arrearages. Any rent or other income
received by Seller or Buyer after Closing which are owed to Seller or Buyer
shall be remitted to Seller or Buyer as applicable, promptly after receipt.

 

(b)               Tenant Security Deposits. All unapplied tenant security
deposits (and interest thereon if required by law or contract to be earned
thereon) under the Leases, shall be credited to Buyer at Closing.

 

(1)               Service Contracts. With respect to any contracts that are
assumed by Buyer and survive the Closing, Seller shall receive a credit for
prepaid charges and premiums applicable to Buyer’s period of ownership. The
Buyer shall receive a credit for any payments made in arrears. In addition and
without limitation of the foregoing, Buyer shall receive a credit under any
assumed contract (each a “Service Provider Contract”) in which Seller has
received any advance payments or other income from the servicer provider under
such Service Provider Contract in exchange for agreeing to enter into such
Service Contract (regardless of whether such advance payment or other income was
paid in a lump sum or in installments). Any lump sum payments shall be pro-rated
on a straight line basis over the term of any applicable Service Provider
Contract.

 

(2)               Owner Deposits. Seller shall be entitled to the return of all
bonds, deposits, letters of credit, set aside letters or other similar items, if
any, that are outstanding with respect to the Property that have been provided
by Seller or any of its affiliates, agents or investment advisors to any
governmental agency, public utility, or similar entity (collectively, “Owner
Deposits”). Buyer shall replace such Owner Deposits. To the extent that any
funds are released as a result of the termination of any Owner Deposits for
which Seller did not receive a credit, such funds shall be delivered to Seller
immediately upon their receipt.

 

16

 

  

(c)                Final Prorations. With regards to any prorations set forth in
this Section 17 that are based upon estimates, such prorations shall be
readjusted based upon the actual bills after the Closing and before the
expiration of the Limitation Period. The provisions of this Section 17(c) shall
survive Closing.

 

18.              Default; Termination(a)                . (a) IF THE CLOSING
FAILS TO OCCUR BECAUSE OF BUYER’S DEFAULT, THE DEPOSIT SHALL BE RETAINED BY
SELLER AS LIQUIDATED DAMAGES. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE
THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN BECAUSE OF THE NATURE OF THE
PROPERTY AND THAT THE AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES’ REASONABLE
ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS
NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF ANY APPLICABLE
LAWS, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 18, SELLER
AND BUYER AGREE THAT THIS LIQUIDATED DAMAGES PROVISION IS INTENDED TO BE
SELLER’S SOLE AND EXCLUSIVE REMEDY FOR A DEFAULT BY BUYER, BUT IS NOT INTENDED
AND SHOULD NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY BUYER’S
INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT.

 

SELLER’S INITIALS: _____             BUYER’S INITIALS: _____

 

 

(b)               If Seller defaults in any material respect hereunder, then
provided Buyer is not in default any material respect, Buyer may, at its sole
election, either:

 

(1)               Terminate this Agreement, whereupon the Deposit shall be
promptly returned to Buyer, as well as Buyer’s actual out of pocket costs to
unrelated and independent third party vendors, including reasonable attorneys’
fees, incurred as a result of this transaction not to exceed Fifty Thousand and
00/100 Dollars ($50,000.00) in the aggregate, and neither party shall have any
further liability or obligation to the other, except for the provisions of this
Agreement which are expressly stated to survive the termination of this
Agreement; or

 

(2)               Assert and seek judgment against Seller for specific
performance with respect to one or more (at Buyer’s election) of the properties
that comprise the Property; provided that if Buyer elects to purchase less than
all of such properties pursuant to the terms of Section 7(e) of this Agreement,
then the Purchase Price will be reduced by the aggregate Assigned Home Price for
the Excluded Properties. If a court of competent jurisdiction determines that
the remedy of specific performance is not available to Buyer, then Buyer shall
have the right to assert and seek judgment against Seller for actual contract
damages.

 

17

 

  

19.              Expenses.

 

(a)                One half (1/2) of all title insurance premiums for the Title
Policy, title search, all state and county transfer taxes, deed recording and
fees charged by the Escrow Holder shall be borne and paid by Seller.

 

(b)               One half (1/2) of all title insurance premiums for the Title
Policy, title search, all state and county transfer taxes, deed recording and
fees charged by the Escrow Holder shall be borne by Buyer. Any closing cost
related to financing of the Property shall be borne by Buyer.

 

(c)                All other costs, charges, and expenses shall be borne and
paid as provided in this Agreement, or in the absence of such provision, in
accordance with custom where the properties in question are located.

 

20.              Intermediaries. (a) Buyer and Seller acknowledge and agree that
Seller’s Broker (as defined in the Basic Terms) has acted as a broker in
connection with this transaction on behalf of Seller. Upon Closing, Seller
agrees to pay a brokerage commission to Seller’s Broker pursuant to a separate
agreement between Seller and Seller’s Broker. Seller and Buyer agree that Buyer
has not engaged a broker with respect to the transaction contemplated in this
Agreement and that Buyer is not responsible in any way for Seller’s Broker fees
and/or commissions. All brokerage fees are to be paid through Escrow Holder at
Closing as a Closing Cost.

 

(b)               Seller represents to Buyer, and Buyer represents to Seller,
that except for Seller’s Broker there are no fees owed to any broker, finder, or
intermediary of any kind with whom such party has dealt in connection with this
transaction. Except as expressly set forth above, if any claim is made for
broker’s or finder’s fees or commissions in connection with the negotiation,
execution or consummation of this Agreement or the transactions contemplated
hereby, each party shall defend, indemnify and hold harmless the other party
from and against any such claim based upon any statement, representation or
agreement of such party, which obligation shall survive Closing.

 

21.              Destruction of Improvements.

 

(a)                If, prior to Closing, any of the Improvements on any of the
properties that comprise the Property are damaged or destroyed such that the
cost of repair or replacement of such improvements is material (“Material
Damage”), or a condemnation proceeding is commenced or threatened in writing by
a governmental or quasi-governmental agency with the power of eminent domain
(“Condemnation”), then:

 

18

 

  

(1)               Buyer may elect, within fourteen (14) days from receipt of
notice of said Material Damage, or notice of a Condemnation, by written notice
to Seller, to exclude the individual property affected by such event from this
transaction; provided that if more than twenty-five percent (25%) of the
properties that comprise the Property suffer Material Damage, or become the
subject of a Condemnation, then Buyer may terminate this Agreement. If
necessary, the time of Closing shall be extended to permit Buyer to evaluate and
make the elections contemplated in this Section 21. If Buyer elects to terminate
this Agreement in accordance with this Section 21, then the Deposit shall be
returned to Buyer and, except for the provisions of this Agreement that
expressly survive Closing or earlier termination of this Agreement, this
Agreement shall be void and of no further force and effect, and neither party
shall have any liability to the other by reason hereof; or

 

(2)               If Buyer elects to exclude certain properties from this
transaction, and proceed to the Closing, then the Purchase Price will be reduced
by the aggregate Assigned Home Value of the properties not purchased. If,
however, it is determined that any damage to one or more properties does not
constitute a Material Damage, or Buyer elects to purchase one or more properties
that have suffered Material Damage, then the transaction contemplated hereby
shall be closed without a reduction in the Purchase Price, and Seller shall
assign to Buyer Seller’s rights in any insurance proceeds or Condemnation award
to be paid to Seller in connection with such damage or Condemnation, and, in the
case of Material Damage, Seller shall pay to Buyer an amount equal to the
deductible under Seller’s policy of casualty insurance and Seller shall execute
and deliver to Buyer all required proofs of loss, assignments of claims and
other similar items.

 

(b)               For purposes of this Section 21, damage or destruction will be
considered “Material Damage” if one or more of the properties that comprise the
Property are rendered uninhabitable, or if the time to repair such damage,
despite reasonable expectations with respect to repairs, is reasonably by Buyer
to exceed three months. If, prior to Closing, any of the improvements on the
Property are damaged or destroyed and such damage is not Material Damage, Buyer
shall remain obligated to close hereunder with no abatement in the Purchase
Price. At Closing, Seller shall assign to Buyer Seller’s rights in any insurance
proceeds to be paid to Seller in connection with such damage or destruction, and
Buyer shall receive a credit against the Purchase Price in an amount equal to
the deductible amount under Seller’s casualty insurance policy.

 

22.              General Provisions.

 

(a)                Entire Agreement. This written Agreement, including all
Exhibits attached hereto and documents to be delivered pursuant hereto, shall
constitute the entire agreement and understanding of the parties, and there are
no other prior or contemporaneous written or oral agreements, undertakings,
promises, warranties, or covenants not contained herein.

 

19

 

  

(b)               Amendments in Writing. This Agreement may be amended only by a
written memorandum subsequently executed by all of the parties hereto.

 

(c)                Waiver. No waiver of any provision or condition of this
Agreement by any party shall be valid unless in writing signed by such party. No
such waiver shall be taken as a waiver of any other or similar provision or of
any future event, act, or default.

 

(d)               Time of the Essence. Time is of the essence of this Agreement.
However, if Buyer is acting diligently and in good faith to proceed with the
consummation of the transaction contemplated by this Agreement on the Closing
Date, Seller will agree, upon the written request of Buyer, to extend the
Closing Date up to three (3) business days. Likewise, if Seller is acting
diligently and in good faith to proceed with the consummation of the transaction
contemplated by this Agreement on the Closing Date, Buyer will agree, upon the
written request of Seller, to extend the Closing Date up to three (3) business
days. In the computation of any period of time provided for in this Agreement or
by law, any date falling on a Saturday, Sunday or legal holiday when banks are
not open for business in the State where the Property is located, will be deemed
to refer to the next day which is not a Saturday, Sunday, or legal holiday when
banks are not open for business in such State.

 

(e)                Severability. If any provision of this Agreement is rendered
unenforceable in whole or in part, such provision will be limited to the extent
necessary to render the remainder of the Agreement valid, or will be deemed to
be removed from this Agreement, as circumstances require, and this Agreement
shall be construed as if said provision had been incorporated herein as so
limited, or as if said provision has not been included herein, as the case may
be.

 

(f)                 Headings. Headings of sections are for convenience of
reference only, and shall not be construed as a part of this Agreement.

 

(g)                Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefits of the parties hereto, and their respective
successors, and permitted assigns. This Agreement may not be assigned by either
party without the consent of the other party, except that Buyer may, without
consent from Seller, assign this Agreement to an affiliate of Buyer, Reven
Housing REIT, Inc, or any affiliate of Reven Housing REIT, Inc. or any entity
formed by Buyer for the purpose of acquiring or taking title to the Property;
provided that such assignment will not release Buyer from its obligations under
this Agreement. Any assignment in accordance with this Section 22(g) will
entitle the assignee thereunder to all rights and benefits, and subject such
assignee to all obligations, of Buyer hereunder.

 

(h)                Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed, or sent by Federal
Express, UPS or other recognized overnight courier service for next business day
delivery, or sent by facsimile transmission or electronic mail (so long as
reasonable evidence that such notice was sent and received is obtained by the
sending party). Any notice provided hereunder shall be deemed to be given when
sent in accordance with this provision, but any time to respond to such notice
as provided in this Agreement will not commence until the actual receipt of the
notice. Notices will be deemed valid if sent to the parties as follows:

 

20

 

  

IF TO BUYER

 

Reven Housing REIT, Inc.

P.O. Box 1459

La Jolla, California 92038-1459

Phone: 858-459-4000

e-mail: cmc@revenhousingreit.com

e-mail: mps@revenhousingreit.com

Attention: Chad Carpenter and Michael Soni

 

 

with a copy to:

 

Greenberg Traurig, LLP

1840 Century Park East

Suite 1900

Los Angeles, California 90067

Phone: (310) 586-6505

e-mail: treisterd@gtlaw.com

Attention: Dana S. Treister

 

with an additional copy to:

 

Greenberg Traurig, LLP

1840 Century Park East

Suite 1900

Los Angeles, California 90067

Phone: (310) 586-7855

e-mail: presants@gtlaw.com

Attention: Sandy Presant

 

21

 

   

IF TO SELLER:

 

Bessie Circle Land Trust

Blanco Court Land Trust

Doncaster Ave. Land Trust

Ensign Ave. Land Trust

Fredericksburg Ave. Land Trust

Green Knoll Land Trust

Greenleaf Road Land Trust

Holcroft Dr. Land Trust

Karenita Drive Land Trust

Miss Muffett Land Trust

Penton Street Land Trust

Portsmouth Ave Land Trust

Ribault Scenic Drive Land Trust

Robert C Weaver Dr. Land Trust

S. Miss Muffett Land Trust

Spottswood Land Trust

Tallyho Ave. Land Trust

Tango Lane Land Trust

Tinkerbell Lane Trust

Tusk Court Land Trust

Waynesboro Ave Land Trust

Williamsburg Land Trust

637 South Pokeberry Place

Saint Johns, Florida 32259

E-mail: viptwo@yahoo.com

Attention: Anthony Simonetta

 

Ben C. Bishop III

50 N. Laura Street, #3625

Jacksonville, Florida 32202

E-mail: bbishop3@allenewing.com

Attention: Ben Bishop

 

 

Triton Homes, Inc.

13440 Troon Trace Lane

Jacksonville, Florida 32225

E-mail: briankolke11@hotmail.com

Attention: Brian Kolke

 

22

 

   

CKF Investment Properties, LLC

DCCF Properties, LLC

NBJW Properties, LLC

First Coast Residential Income Fund, LLC

6005 Powers Ave., #103

Jacksonville, Florida 32217

E-mail: chrisfunkck@aol.com

Attention: Chris Funk

 

Clyde Montgomery

2353 St. Johns Bluff Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

 

 

Darius Trunk

2353 St. Johns Bluff Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

 

Gary Moreau

2353 St. Johns Bluff Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

 

FCAM Rentals, LLC

5651 Colcord Ave.

Jacksonville, FL 32211

E-mail: fcreinc@gmail.com

Attention: Gary Wetherhold

 

Matson Family Trust

8050 A1A South, Unit 106

St. Augustine, Florida 32080

E-mail: ___ matsonm@bellsouth.net_______

Attention: Joanne Matson

 

Joe Danese

8613 Old Kings Road S., #106

Jacksonville, Florida 32217

E-mail: danese3@sunshinetitle.com

 

23

 

  

Larry Payne

163 Hickory Hill Dr.

St. Augustine, Florida 32095

E-mail: lpane1@bellsouth.net

 

Lydell Bryant

2353 St. Johns Bluff Road S.

Jacksonville, FL 32202

E-mail: garymoreau@bellsouth.net

  

Robert Reinard

3371 Putting Green Court

Oceanside, California 92056

E-mail: rreinard@cox.net

 

FCRE, Inc.

5651 Colcord Ave.

Jacksonville, Florida 32211

E-mail: romyshaw@gmail.com

 

Bay Island Holdings, LLC

3948 3rd Street South, #161

Jacksonville Beach, Florida 32250

E-mail: wyatt.payne@comcast.net

Attention: Wyatt Payne

 

 

With copies to:

 

 

Attention:

 

 

IF TO ESCROW HOLDER:

 

Fidelity National Title Insurance Company

1300 Dove Street, Suite 130

Newport Beach, California  92660

Phone: (949) 221-4715

e-mail: paul.mcdonald@fnf.com

Attention:  Paul McDonald

 

24

 

   

or to such additional or other persons, at such other address or addresses as
may be designated by notice from Buyer or Seller, as the case may be, to the
other. Notices by mail shall be sent by United States certified or registered
mail, return receipt requested, postage prepaid, and shall be deemed given upon
receipt or refusal of receipt. Notices by facsimile or electronic mail shall be
deemed given and effective upon receipt or refusal of receipt. Notices by
overnight courier shall be deemed given and effective upon receipt or refusal of
receipt from Federal Express, UPS or another recognized overnight courier
service.

 

(i)                  Governing Law; Venue. To the extent enforceable, the
parties agree that this Agreement shall be governed in all respects by the
internal laws of the State of Florida; provided that if the dispute involves an
individual property the law of the State where such property is located will
apply. In any dispute arising out of or related to this Agreement, an action
must be brought in Federal or State court, as applicable, in the County of
Duval, Florida. The provisions of this Section 22(i) will survive the
termination of this Agreement.

 

(j)                 Counterparts. This Agreement may be executed in any number
of identical counterparts, any or all of which may contain the signatures of
less than all of the parties, and all of which shall be construed together as
but a single instrument.

 

(k)               Attorneys’ Fees. If any action or proceeding brought by either
party against the other under this Agreement, the prevailing party shall be
entitled to recover all costs and expenses including its attorneys’ fees in such
action or proceeding in such amount as the court may adjudge reasonable. The
prevailing party shall be determined by the court based upon an assessment of
which party’s major arguments made or positions taken in the proceedings could
fairly be said to have prevailed over the other party’s major arguments or
positions on major disputed issues in the court’s decision. If the party that
commenced or instituted the action, suit or proceeding dismisses or discontinues
it without the concurrence of the other party, such other party shall be deemed
the prevailing party. The provisions of this Section 22(k) will survive any
termination of this Agreement.

 

(l)                  Construction. This Agreement will not be construed more
strictly against either party by virtue of the fact that it was prepared by one
party or its counsel, it being recognized that each party hereto has had the
opportunity to review, have its counsel review, and provide input into this
Agreement. All words herein that are expressed in the neuter gender shall be
deemed to include the masculine, feminine and neuter genders and any word herein
that is expressed in the singular or plural shall be deemed, whenever
appropriate in the context, to include the plural and the singular.

 

(m)              Reporting Obligations. Seller and Buyer hereby designate Escrow
Holder to act as and perform the duties and obligations of the “reporting
person” with respect to the transaction contemplated by this Agreement for
purposes of 26 C.F.R. Section 1.6045-4(e)(5) relating to the requirements for
information reporting on real estate transactions. If required under applicable
law, Seller, Buyer and Escrow Holder shall execute at Closing a Designation
Agreement designating the Escrow Holder as the reporting person with respect to
the transaction contemplated by this Agreement.

 

25

 

  

(n)                1031 Exchange. Either party may involve this transaction in a
like-kind exchange under Internal Revenue Code Section 1031, the cost and
expense of which will be borne solely by the party invoking such structure. Each
party shall reasonably cooperate with the other in such structure, provided that
the party that is not participating in a like-kind exchange shall incur no
material costs, expenses or liabilities in connection with the other’s exchange
and will not be required to take title to or contract for purchase of any other
property. If either party uses a qualified intermediary or exchange accommodator
to effectuate the exchange, any assignment of the rights or obligations of such
party shall not relieve, release or absolve such party of its obligations to the
other.

 

(o)               Bulk Sales. Seller agrees to indemnify and hold Buyer, any
permitted assignee of Buyer’s rights under this Agreement and any of their
respective affiliates, officers, directors, shareholders, members, partners,
agents, employees and advisors (collectively, the “Indemnified Parties”)
harmless from and against any and all claims, damages, losses, costs, expenses,
liens, actions and causes of actions (including, without limitation, reasonable
attorneys’ fees and expenses) that may be incurred by, or asserted against,
Buyer, any of the other Indemnified Parties or the Property by reason of either
such noncompliance with the Bulk Sales laws applicable in the state or states
where the Property is located, or the failure of Seller to have paid any taxes,
penalties or interest which are the subject of such laws. The provisions and
obligations of this Section 24(o) shall survive the Closing.

 

(p)               Confidentiality. Buyer and its representatives shall hold in
strictest confidence all data and information obtained with respect to the
operation and management of the Property, whether obtained before or after the
execution and delivery hereof, and shall not use such data or information for
purposes unrelated to this Agreement or disclose the same to others except as
expressly permitted hereunder. The preceding sentence shall not be construed to
prevent Buyer from disclosing to its prospective lenders or investors, or to its
officers, directors, attorneys, accountants, architects, engineers and
consultants to perform their designated tasks in connection with Buyer’s
inspection and proposed acquisition of the Property, provided Buyer advises any
such party of the confidential nature of the information disclosed. However,
neither party shall have this obligation concerning information which: (a) is
published or becomes publicly available through no fault of either the Buyer or
Seller; (b) is rightfully received from a third party; or (c) is required to be
disclosed by law. Notwithstanding the preceding, nothing in this Agreement will
prevent or be deemed to limit Buyer’s ability to disclose the existence of this
Agreement, and the nature of any material terms herein, to the Securities and
Exchange Commission or any other governmental agency to which Buyer, or its
successors hereunder, have a disclosure obligation under any applicable law.

 

(q)               Post-Closing Vacancy Holdback. Twenty Thousand and 00/100
Dollars ($20,000.00) of the Purchase Price (the “Post-Closing Vacancy Holdback”)
shall be withheld by the Escrow Holder subject to the following terms. If any of
the properties that comprise the Property become tenantless or vacant because
the tenant or other occupant breached the lease or other occupancy agreement
within sixty (60) days after Closing, for each such property, Buyer shall
provide back-up documentation reasonably satisfactory to Seller documenting the
breach and missing tenant or vacancy and shall be refunded Five Thousand and
00/100 Dollars ($5,000.00) from the Post-Closing Vacancy Holdback. After sixty
(60) days have elapsed after the closing, the balance of the Post-Closing
Vacancy Holdback, if any, shall be delivered to Seller.

 

26

 

  

(r)                 Post-Closing Return of Properties. If during the ninety (90)
day period after Closing Buyer learns that any leases, other occupancy
agreements or contracts of any kind on properties that comprise the Property
provide the tenant, occupant or any other third party with an option to purchase
the property, a right of first refusal, a right of first offer or any other
contractual option or right to purchase the property, then the sale of such
property to Buyer shall be rescinded and the purchase price of such property
shall be refunded by Seller to Buyer within thirty (30) days of Buyer’s written
notice to Seller. Buyer’s notice to Seller shall include back-up documentation
reasonably satisfactory to Seller demonstrating the existence of the option to
purchase the property, a right of first refusal, a right of first offer, or any
other contractual option or right to purchase the property.

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

27

 

   

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

 

  SELLER         BESSIE CIRCLE LAND TRUST,   a Florida Land Trust            
By: /s/ Anthony Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary    
          BLANCO COURT LAND TRUST,   a Florida Land Trust             By: /s/
Anthony Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary            
  DONCASTER AVE. LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: A.J. Simunetta   Its: Sole Beneficiary               ENSIGN
AVE. LAND TRUST,   a Florida Land Trust               By: /s/ Anthony Simunetta
  Name: Anthony Simunetta   Its: Sole Beneficiary

 

28

 

 

  FREDERICKSBURG AVE. LAND TRUST,   a Florida Land Trust               By: /s/
Anthony Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary            
  GREEN KNOLL LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
GREENLEAF ROAD LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
HOLCROFT DR. LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
KARENITA DRIVE LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary

 

29

 

 

  MISS MUFFETT LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary               PENTON
STREET LAND TRUST,   a Florida Land Trust             By: /s/ Anthony Simunetta
  Name: Anthony Simunetta   Its: Sole Beneficiary               PORTSMOUTH AVE.
LAND TRUST,   a Florida Land Trust             By: /s/ Anthony Simunetta   Name:
Anthony Simunetta   Its: Sole Beneficiary               RIBAULT SCENIC DRIVE
LAND TRUST,   a Florida Land Trust             By: /s/ Anthony Simunetta   Name:
Anthony Simunetta   Its: Sole Beneficiary               ROBERT C. WEAVER DR.
LAND TRUST,   a Florida Land Trust             By: /s/ Anthony Simunetta   Name:
Anthony Simunetta   Its: Sole Beneficiary

 

30

 

 

  S. MISS MUFFETT LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
SPOTTSWOOD LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
TALLYHO AVE. LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary               TANGO
LANE LAND TRUST,   a Florida Land Trust             By: /s/ Anthony Simunetta  
Name: Anthony Simunetta   Its: Sole Beneficiary               TINKERBELL LANE
LAND TRUST,   a Florida Land Trust             By: /s/ Anthony Simunetta   Name:
Anthony Simunetta   Its: Sole Beneficiary

 

31

 

 

  TUSK COURT LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
WAYNESBORO AVE. LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary              
WILLIAMSBURG LAND TRUST,   a Florida Land Trust             By: /s/ Anthony
Simunetta   Name: Anthony Simunetta   Its: Sole Beneficiary               Ben C.
Bishop III             By: /s/ Ben C. Bishop III   Name: Ben C. Bishop III      
        First Coast Residential Income Fund, LLC,   a Florida limited liability
company             By: /s/ Chris Funk   Name: Chris Funk   Its: Managing Member

 

32

 

 

  TRITON HOMES, INC.,   a Florida corporation             By: /s/ Brian Kolke  
Name: Brian Kolke   Its: President               CKF INVESTMENT PROPERTIES, LLC,
  a Florida limited liability company         By: /s/ Chris Funk   Name: Chris
Funk   Its: Managing Member               DCCF PROPERTIES, LLC,   a Florida
limited liability company         By: /s/ Chris Funk   Name: Chris Funk   Its:
Managing Member             NBJW PROPERTIES, LLC,   a Florida limited liability
company         By: /s/ Chris Funk   Name: Chris Funk   Its: Managing Member    
          CLYDE MONTGOMERY,                    /s/ Clyde Montgomery

 

33

 

 

  DARIUS TRUNK,                             /s/ Darius Trunk               GARY
MOREAU,                             /s/ Gary Moreau               FCAM RENTALS,
LLC,   a Florida limited liability company             By: /s/ Gary R.
Wetherhold   Name: Gary R. Wetherhold   Its: Manager               MATSON FAMILY
TRUST,   a Florida Living Trust dated May 11, 1995             By: /s/ Joanne
Matson   Name: Joanne Matson   Its: Trustee               JOE DANESE,          
                  /s/ Joe Danese               LARRY PAYNE,            
                /s/ Larry C. Payne

 

34

 

 

  LYDELL BRYANT,                             /s/ Lydell Bryant              
ROBERT REINARD,                             /s/ Robert Reinard              
FCRE, INC.,   a Florida corporation             By: /s/ Romy L. Shaw   Name:
Romy L. Shaw   Its: President               BAY ISLAND HOLDINGS, LLC,   a
Florida limited liability company             By: /s/ P. Wyatt Payne, Jr.  
Name: P. Wyatt Payne, Jr.   Its: Managing Member               BUYER        
Reven HOUSING FLORIDA, LLC,   a Delaware limited liability company              
By: /s/ Chad Carpenter     Chad Carpenter     Chief Executive Officer

 

35

 

 

LIST OF EXHIBITS AND SCHEDULES

 

EXHIBITS DESCRIPTIONS 1. EXHIBIT A DESCRIPTION OF THE PROPERTIES 2. EXHIBIT B
LIST OF CONTRACTS 3. EXHIBIT C FORM OF DEED 4. EXHIBIT D FORM OF BILL OF SALE 5.
EXHIBIT E FORM OF ASSIGNMENT OF LEASES AND CONTRACTS 6. EXHIBIT F FORM OF FIRPTA
AFFIDAVIT 7. EXHIBIT G TENANT ESTOPPEL AGREEMENT 8. EXHIBIT H RENT ROLL
SCHEDULES DESCRIPTIONS 1. I LIST OF SELLER ENTITIES AND INDIVIDUALS 2. 6(a)(3)
PROPERTY INFORMATION 2. 6(a)(5) LIST OF LEASES

 

 

 

 

SCHEDULE I

 

 1   Bessie Circle Land Trust  2   Blanco Court Land Trust  3   Doncaster Ave
Land Trust  4   Ensign Ave Land Trust  5   Fredericksburg Ave Land Trust  6  
Green Knoll Land Trust  7   Greenleaf Road Land Trust  8   Holcroft Dr Land
Trust  9   Karenita Drive Land Trust  10   Kylan Drive Land Trust  11   Miss
Muffett Land Trust  12   Penton Street Land Trust  13   Portsmouth Ave Land
Trust  14   Ribault Scenic Drive Land Trust  15   Robert C Weaver Dr Land Trust
 16   S Miss Muffet Land Trust  17   Spottswood Land Trust  18   Tallyho Ave
Land Trust  19   Tango Lane Land Trust  20   Tinkerbell Lane Trust  21   Tusk
Court Land Trust  22   Waynesboro Ave Land Trust  23   Williamsburg Land Trust
 24   Ben C. Bishop III  25   First Coast Residential Income Fund, LLC a Florida
limited liability company  26   Triton Homes Inc., a Florida corporation  27  
CKF Investment Properties, LLC, a Florida limited liability company  28   DCCF
Properties, LLC, a Florida limited liability company  29   NBJW Properties LLC,
a Florida limited liability company  30   Clyde Montgomery, an individual  31  
   32   Darius Trunk, an individual  33   Gary Moreau, an individual  34   FCAM
Rentals LLC, a Florida limited liability company  35   Matson Family Trust  36  
Joe Danese, an individual  37   Larry Payne Larry, an individual  38   Lydell
Bryant, an individual  39      40      41   Robert Reinard, an individual  42  
FCRE, INC., a Florida corporation  43   Bay Island Holdings, LLC, a Florida
limited liability company